As filed with the Securities and Exchange Commission on June 29, 2004
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 No. 811-08261
MEMBERS Mutual Funds
5910 Mineral Point Road
Madison, WI 53705
(608) 238-5851
(Registrant's Exact Name, Address and Telephone Number)
Margaret Gallardo-Cortez, Esq.
Assistant Vice President, Associate General Counsel
CUNA Mutual Group
5910 Mineral Point Road
Madison, WI 53705
(Name and Address of Agent for Service)
Copy to:
Stephen E. Roth, Esq.
Sutherland Asbill & Brennan LLP
1275 Pennsylvania Avenue, N.W.
Washington, D. C. 20004-2415
-----------------------------------
Date of Fiscal Year End: October 31, 2003
Date of Reporting Period: November 1, 2003 - April 30, 2004
ITEM 1. REPORTS TO STOCKHOLDERS
A copy of the report transmitted to stockholders pursuant to Rule 30e-1 under
the Investment Company Act of 1940 on June 29, 2004 appears beginning on the
following page.
2
SEMIANNUAL REPORT
APRIL 30, 2004
INVEST WHERE YOU
BELONG.
[GRAPHICS OF SEMIANNUAL REPORT]
[LOGO OF MEMBERS]
MUTUAL FUNDS
THE MEMBERS(R) MUTUAL FUNDS DIFFERENCE
Today's financial world suffers no shortage of mutual funds, and they're all
vying for your attention. Some fund companies tout their long history or
well-known name. Others tantalize with the latest investment trends and the
hottest stocks. So where should an investor turn? Who should you trust with your
financial future?
We suggest MEMBERS Mutual Funds, a diverse family of mutual funds with an
important distinction: It is designed by financial management professionals
located at credit unions across the nation, specifically for credit union
members. The funds are distributed by CUNA Brokerage Services, Inc., and are
managed by MEMBERS Capital Advisors, Inc. the registered investment advisor
affiliate of CUNA Mutual Group, a family of companies owned by and dedicated to
America's credit unions and their members. Currently, MEMBERS Capital Advisors
manages $12 billion in investments for credit union members, employees and the
credit union system.
Just as credit unions are different from banks, the MEMBERS Mutual Funds family
is unlike the typical fund family. We share many of the philosophies you've come
to appreciate in the credit union movement: we focus on providing good value,
superior service and investor education. We avoid slick hype and silly fads. Our
staff of investment management professionals is straightforward and highly
experienced in the investment field. Here you'll be treated like a valued
member, with a company where you can feel like you truly belong.
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TABLE OF CONTENTS
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PAGE
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LETTER TO SHAREHOLDERS ................................................... 2
SUMMARY OF U.S. ECONOMIC AND FINANCIAL MARKET CONDITIONS ................. 3
FUND PERFORMANCE REVIEWS
Bond Fund ....................................................... 4
High Income Fund ................................................ 6
Balanced Fund ................................................... 8
Growth and Income Fund .......................................... 10
Capital Appreciation Fund ....................................... 12
Mid-Cap Fund .................................................... 14
Multi-Cap Growth Fund ........................................... 16
International Stock Fund ........................................ 18
PORTFOLIOS OF INVESTMENTS
Cash Reserves Fund .............................................. 20
Bond Fund ....................................................... 21
High Income Fund ................................................ 24
Balanced Fund ................................................... 33
Growth and Income Fund .......................................... 37
Capital Appreciation Fund ....................................... 39
Mid-Cap Fund .................................................... 41
Multi-Cap Growth Fund ........................................... 43
International Stock Fund ........................................ 45
FINANCIAL STATEMENTS
Statements of Assets and Liabilities ............................ 50
Statements of Operations ........................................ 52
Statements of Changes in Net Assets ............................. 54
Financial Highlights ............................................ 58
NOTES TO FINANCIAL STATEMENTS ............................................ 67
OTHER INFORMATION ........................................................ 74
TRUSTEES AND OFFICERS .................................................... 75
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SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
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2 LETTER TO SHAREHOLDERS
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Dear Fellow Shareholder:
Six months ago as MEMBERS Funds' current fiscal year began, the primary
question in the collective mind of U.S. investors seemed to be, "How
good can this economy and market get?" As the first half of the fiscal
year drew to a close on April 30, the question appears to have become,
"How bad can this economy and market get?"
Still, an objective appraisal of this six-month period would have to be
quite favorable. GDP grew at a solid 4% annual rate. Corporate profits
advanced at five times that pace with a majority of companies reporting
earnings that exceeded investors' already heady expectations. Bonds
benefited as interest rates trended down for the first four months of
the period. They turned back up suddenly in mid-March, however, as
employment and inflation numbers began to show the kinds of increases
that could compel the Federal Reserve to finally start tightening
credit.
Although both bonds and stocks in the U.S. and internationally provided
overall returns for this period that were above their long-term
averages, those returns were lower than in the exceptionally favorable
prior year. And, they were more erratic, reflecting the changing
domestic and international economic situations as well as the din of
national and world politics, terrorism, and war. By the close of the
period, investors were having a difficult time maintaining a favorable
near-term outlook.
Each of the Funds provided nicely positive returns in this environment,
most exceeding their representative market and/or peer averages.
Information regarding each fund's returns and the sources of those
returns is provided in the body of this report.
As we look ahead, we share the current concerns of many investors
regarding the likelihood of rising interest rates, tightening monetary
and fiscal policy, stubbornly high energy prices and a continued
distressing national and world political backdrop. But we also maintain
our confidence in expectations for U.S. and international securities
over the long-term, believing strongly that mere population growth,
supplemented with technological advance, provides a solid foundation
for continued economic growth.
So, in spite of the near-term concerns, we encourage long-term
investors to maintain and maybe even accelerate their investment
accumulation programs in the months immediately ahead. Times like these
can be particularly advantageous for patient investors who are willing
and able to take such a contrary approach in their investing.
We thank you for your confidence and trust, and remain committed to
your long-term investment success.
Sincerely,
/s/ Lawrence R. Halverson
Lawrence R. Halverson
President
(Not part of the Semiannual Report.)
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS
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SUMMARY OF U.S. ECONOMIC AND FINANCIAL MARKET CONDITIONS 3
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U.S. ECONOMY
The U.S. economy grew strongly in the six-month period ended April 30, 2004.
Stimulative monetary policy, a tax refund, and growing consumer confidence led
to a surge in durable-goods purchases in mid-summer, that persisted into fall
and winter. The housing market and residential construction continued to benefit
from low mortgage rates, boosting economic activity in many other areas of the
economy. Corporations began to capitalize on their shored-up balance sheets,
rising profits, and a low cost of capital, and finally began to increase their
capital investment after a multi-year slump. Federal government spending,
particularly on national security, also fostered economic growth.
Despite rising energy prices, inflationary pressures generally remained modest
during the period. Improving productivity helped to keep unit labor costs low,
and companies had difficulty passing on increases in energy and raw-material
prices on to consumers due to the highly competitive business environment. The
labor market stabilized, and signs of significant improvement began to appear
late in the period as new hirings out-paced job losses by a wide margin for the
first time in several years.
U.S. STOCKS
U.S. stocks rose moderately over the period. The first four months saw a
continuation of the powerful rally that began just before the commencement of
hostilities in the Iraq war last spring. Corporate profits were rising rapidly,
and low interest rates encouraged market participants to increase their
allocations to equities. During the last two months of the period, however, a
slight uptick in inflation and marked improvement in the labor market caused
market participants to begin to "price in" or anticipate a campaign of monetary
tightening by the Fed. This affected the prices of speculative shares in
particular, as market participants began to rotate into energy stocks and more
defensive areas that have out-performed in past Fed tightening cycles. Tensions
in Iraq, indications that the Chinese government was attempting to slow down
China's red-hot economy, and the relentless upward march of oil and gasoline
prices also dampened investor sentiment in March and April.
U.S. BONDS
U.S. bonds posted modest returns until bond market participants caught wind of
the same developments that halted the long rally in stocks in mid-March.
Anxieties about a Fed tightening campaign gripped fixed income markets and led
to a sharp sell-off characterized by unusually high volatility. Price declines
were widespread across the government, agency, municipal, and corporate sectors.
Some observers had predicted that high-yield corporate bonds would prove
relatively immune to the impact of anticipated rises in interest rates, thanks
to improving trends in corporate profitability and balance-sheet health.
However, the high-yield sector also experienced a significant sell-off, erasing
some of the gains of its extended seventeen-month rally.
INTERNATIONAL ECONOMIES AND FINANCIAL MARKETS
International economies benefited from robust global growth during the period.
The large, fast-growing Chinese economy spurred a very substantial increase in
demand for raw materials, energy, and industrial machinery. Emerging Asia,
commodity-based economies such as Australia and Russia, and Japan all benefited
from Chinese demand and posted growth numbers that surprised economists. Europe
lagged behind, growing at a relatively anemic pace as a weaker U.S. dollar cut
into the demand for European exports and the euro-zone economies faced the
difficult prospect of integrating new Eastern European economies into the
European economic community.
Developing-markets stocks led returns of international stocks early in the
period as investors focused on the potential of emerging Asia and the prospect
for continued demand growth from China. In developed markets, Japan
out-performed Europe, and smaller stocks out-performed larger stocks. As in U.S.
financial markets, riskier areas led the way in the first four months of the
period, but emerging-markets stocks in particular either plateaued or fell as
soon as global equity market participants began to ratchet down their exposure
to more speculative stocks in anticipation of rising interest rates. Concerns
about whether China would experience a hard or soft landing also became
widespread as the period ended.
(Not part of the Semiannual Report.)
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MUTUAL FUNDS
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4 FUND PERFORMANCE REVIEW
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- ---------------------------------- BOND FUND ---------------------------------
INVESTMENT OBJECTIVE
The Bond Fund seeks to generate a high level of current income, consistent with
the prudent limitation of investment risk.
PORTFOLIO MANAGEMENT
The Fund is managed by a team of MEMBERS Capital Advisors' portfolio managers.
PRINCIPAL INVESTMENT STRATEGIES
To keep current income relatively stable and to limit share price volatility,
the Bond Fund emphasizes investment grade securities and maintains an
intermediate (typically 3-6 year) average portfolio duration. Under normal
circumstances, the Fund invests at least 80% of its assets in such securities.
The Fund may invest in the following instruments:
o CORPORATE DEBT SECURITIES: securities issued by domestic and foreign
corporations which have a rating within the four highest categories and, to a
limited extent (up to 20% of its assets), in securities not rated within the
four highest categories;
o U.S. GOVERNMENT DEBT SECURITIES: securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities;
o FOREIGN GOVERNMENT DEBT SECURITIES: securities issued or guaranteed by a
foreign government or its agencies or instrumentalities, payable in U.S.
dollars, which have a rating within the four highest categories; and
o NON-RATED DEBT SECURITIES: securities issued or guaranteed by corporations,
financial institutions, and others which, although not rated by a national
rating service, are considered by the Fund's investment adviser to have an
investment quality equivalent to the four highest categories.
The MEMBERS Bond Fund (Class A shares at net asset value) returned 0.55% during
the six-month period ended April 30, 2004, underperforming the Lehman Brothers
Intermediate Government/Credit Bond Index, which returned 1.07%. The Fund also
under-performed the Lipper Intermediate Investment Grade Fund Index of similar
funds, which returned 1.33%.
The Fund's under-performance can primarily be attributed to its conservative
posture with regard to duration, or interest-rate sensitivity, and credit
quality versus indexes and peers. The Fund also has historically attempted to
minimize interest-rate and credit risk. This has held back performance during
bull markets for fixed-income securities. Management has been gradually and
modestly extending duration with the intent to better align the Fund with its
peer funds, which could increase both absolute returns and interest-rate risk
going forward. Management believes that a rising-rate environment is a good time
to extend duration, as, in its view, market participants tend to "over-discount"
the magnitude of Fed policy shifts, undervaluing intermediate-term bonds and
offering attractive purchase opportunities. The Fund's basic strategy, however,
has not changed. It is still being managed with the goal of providing current
income and more price-stable diversification for an investor's portfolio that
contains stocks or stock mutual funds.
Effective June 30, 2004, the Merrill Lynch U.S. Domestic Master Index was
adopted as the representative market index of the MEMBERS Bond Fund, replacing
the Lehman Brothers Intermediate Government/Credit Bond Index. The Merrill Lynch
U.S. Domestic Master Index better represents the overall U.S. bond market and is
more consistent with the Fund's investment objectives, philosophy and process.
Also, our analysis of the Bond Fund's representative Morningstar peer group
(Intermediate Term Bond Funds) shows a higher correlation with the Merrill Lynch
U.S. Domestic Master Index than with the Lehman Brothers Intermediate
Government/Credit Bond Index. The Fund's investment objective has not changed,
nor have the investment philosophies and strategies with which the Fund is
managed.
MEMBERS Capital Advisors' Fixed-Income Portfolio Management Team--Advisor
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
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FUND PERFORMANCE REVIEW 5
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- ---------------------------------- BOND FUND ---------------------------------
BOND FUND CUMULATIVE PERFORMANCE OF $10,000 SINCE INCEPTION[delta]
[CHART OF BOND FUND CUMULATIVE PERFORMANCE OF $10,000 SINCE INCEPTION[delta]]
12/29/97 Inception 4/30/1998 10/31/1998 4/30/1999 10/31/1999 4/30/2000 10/31/2000
------------------ --------- ---------- --------- ---------- --------- ----------
MMF Bond A 9,525 9,654 10,104 10,252 10,266 10,372 10,768
MMF Bond B 10,000 9,667 10,086 10,195 10,235 10,372 10,721
Merrill Lynch U.S. Domestic
Master Index 10,000 10,219 10,803 10,870 10,840 11,005 11,634
Lehm Int/Gov Credit IX 10,000 10,226 10,820 10,650 10,927 11,042 11,631
4/30/2001 10/31/2001 4/30/2002 10/31/2002 4/30/2003 10/31/2003 4/30/2004
--------- ---------- --------- ---------- --------- ---------- ---------
MMF Bond A 11,338 12,175 12,095 12,688 13,174 13,132 13,204
MMF Bond B 11,418 12,225 12,286 12,852 13,184 13,091 13,214
Merrill Lynch U.S. Domestic
Master Index 12,350 13,331 13,311 14,129 14,739 14,825 15,012
Lehm Int/Gov Credit IX 12,382 13,289 13,269 14,074 14,703 14,839 14,995
[END CHART]
[delta] This chart compares a $10,000 investment made in the Fund on its
inception date to a $10,000 investment made in the index on that date.
All dividends and capital gains are reinvested. Further information
relating to the Fund's performance, including expense reimbursements,
is contained in the Prospectus and elsewhere in this report. Past
performance is not indicative of future performance. Investment return
and principal value will fluctuate, so an investor's shares, when
redeemed, may be worth more or less than when purchased. Indices are
unmanaged and investors cannot invest in them. Additionally, index
returns do not reflect expenses or sales charges. The graphs above and
the table below do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares.
BOND FUND DIVERSIFICATION OF INVESTMENTS AMONG MARKET SECTORS
[PIE CHART OF BOND FUND DIVERSIFICATION OF INVESTMENTS AMONG MARKET SECTORS]
Mortgage Backed 33%
Corporate Notes and Bonds 29%
U.S. Government and Agency Obligations 27%
Commercial Mortgage Backed 5%
Asset Backed 3%
Cash & Other Net Assets 2%
Private Label Mortgage Backed 1%
[END PIE CHART]
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MEMBERS BOND FUND AVERAGE ANNUAL TOTAL RETURN THROUGH APRIL 30, 2004
% Return Without Sales Charge % Return After Sales Charge***
Since Since
Inception Inception
1 Year 3 Years 5 Years [dagger] 1 Year 3 Years 5 Years [dagger]
------ ------- ------- --------- ------ ------- ------- ---------
Class A Shares* 0.22% 5.21% 5.19% 5.29% -4.57% 3.51% 4.17% 4.48%
Class B Shares** -0.52 4.40 4.39 4.49 -4.86 3.32 4.05 4.49
Lipper Intermediate Investment
Grade Bond Fund Index 2.45 6.41 6.25 6.16 -- -- -- --
Merrill Lynch U.S. Domestic
Master Index 1.85 1.72 6.66 6.62 -- -- -- --
Lehman Brothers Intermediate
Government/Credit Bond Index 2.03 6.60 6.64 6.60 -- -- -- --
* Maximum Sales Charge is 4.75% for A Shares.
** Maximum Contingent Deferred Sales Charge is 4.5% for B Shares; reduced
after 12 months and eliminated after six years.
*** Assuming Maximum Applicable Sales Charge.
[dagger] Fund commenced operations on December 29, 1997.
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- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
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6 FUND PERFORMANCE REVIEW
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- ------------------------------ HIGH INCOME FUND ------------------------------
INVESTMENT OBJECTIVE
The High Income Fund seeks high current income. The Fund also seeks capital
appreciation, but only when consistent with its primary goal.
PORTFOLIO MANAGEMENT
The Fund is managed by a team of MEMBERS Capital Advisors' portfolio managers,
which may use one or more subadvisors under a "manager of managers" approach to
make investment decisions for some or all of the assets of this Fund.
Massachusetts Financial Services Company ("MFS") is the only subadvisor
currently used by MEMBERS Capital Advisors to manage the assets of the Fund.
PRINCIPAL INVESTMENT STRATEGIES
The High Income Fund invests primarily in lower-rated, higher-yielding income
bearing securities, such as "junk" bonds. Because the performance of these
securities has historically been strongly influenced by economic conditions, the
Fund may rotate securities selection by business sector according to the
economic outlook. Under normal market conditions, the Fund invests at least 80%
of its assets in bonds rated lower than investment grade (BBB/Baa) and their
unrated equivalents or other high-yielding securities. Types of bonds and other
securities include, but are not limited to, domestic and foreign corporate
bonds, debentures, notes, convertible securities, preferred stocks, municipal
obligations and government obligations. The Fund may invest in mortgage-backed
securities.
The early part of the six-month period ended April 30, 2004 was highlighted by a
continuation of a period of declining interest rates, rising bond prices, and
solid returns for investors in high-yield bonds. Several factors contributed to
these conditions. Economic indicators showed that inflation was well contained
while job growth remained weak. Although other economic indicators showed that
the U.S. economy was improving, many investors were concerned that consumer
spending might falter because laid-off workers were not finding new jobs.
However, the bond market began to change rapidly toward the end of the period,
following a string of strong economic numbers and reports in March and April of
rapid improvement in the U.S. employment market. Improving economic indicators
and better employment numbers set the stage for rising interest rates and
declining prices for bonds.
Strength in the high-yield market during 2003 carried over into early 2004, with
the riskiest bonds generally showing the best performance. The Fund's subadvisor
had been selectively increasing the exposure to riskier holdings in sectors such
as telecommunications and utilities as fundamentals showed signs of continued
improvement. However, the portfolio's more defensive orientation weighed
negatively on performance during the first half of the period. Market
performance became more fairly distributed across quality tiers as the period
drew to a close, and the Fund's more defensive positioning contributed
positively to performance.
For the six-month period, the High Income Fund (Class A shares at net asset
value) underperformed, posting a total return of 4.15% versus 5.53% for the
Lehman Brothers High Yield Bond Index and 5.28% for the Lipper High Yield Bond
Fund Index.
The Fund's overweight exposure to the media sector provided stability to the
portfolio. Charter Communications was one notable contributor during the period.
Additionally, exposure to commodity chemicals firms, such as IMC Global and
Huntsman, contributed positively to performance. This contribution could be
attributed to improving fundamentals and to increased merger and acquisitions
activity in the chemical industry. IMC Global, for example, reportedly is being
acquired by a subsidiary of Cargill, and that drove up the prices of its bonds.
Market performance turned mixed later in the period and exposure to some of the
riskier segments of the high-yield market, such as wireless and wire-line
telecommunications securities, negatively impacted portfolio performance.
Despite the recent short-term volatility, the subadvisor remains focused on
seeking credit issuers with improving fundamentals and on avoiding excessive
risk.
MEMBERS Capital Advisors' Fixed-Income Portfolio Management Team--Advisor
Massachusetts Financial Services Company--Subadvisor
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
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FUND PERFORMANCE REVIEW 7
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- ------------------------------ HIGH INCOME FUND ------------------------------
HIGH INCOME FUND CUMULATIVE PERFORMANCE OF $10,000 SINCE INCEPTION[delta]
[CHART OF HIGH INCOME FUND CUMULATIVE PERFORMANCE OF $10,000
SINCE INCEPTION[delta]]
12/29/97 Inception 4/30/1998 10/31/1998 4/30/1999 10/31/1999 4/30/2000 10/31/2000
------------------ --------- ---------- --------- ---------- --------- ----------
MMF High Income A 9,525 9,799 8,974 10,171 9,843 10,085 9,763
MMF High Income B 10,000 9,800 8,962 10,091 9,805 10,114 9,698
Lehman Brothers High Yield Bond IX 10,000 10,398 9,790 10,444 10,215 10,223 10,050
4/30/2001 10/31/2001 4/30/2002 10/31/2002 4/30/2003 10/31/2003 4/30/2004
--------- ---------- --------- ---------- --------- ---------- ---------
MMF High Income A 9,992 9,574 10,054 9,606 10,902 11,630 12,113
MMF High Income B 10,001 9,571 10,223 9,745 10,947 11,617 12,145
Lehman Brothers High Yield Bond IX 10,334 10,035 10,701 9,484 11,642 12,687 13,388
[END CHART]
[delta] This chart compares a $10,000 investment made in the Fund on its
inception date to a $10,000 investment made in the index on that date.
All dividends and capital gains are reinvested. Further information
relating to the Fund's performance, including expense reimbursements,
is contained in the Prospectus and elsewhere in this report. Past
performance is not indicative of future performance. Investment return
and principal value will fluctuate, so an investor's shares, when
redeemed, may be worth more or less than when purchased. Indices are
unmanaged and investors cannot invest in them. Additionally, index
returns do not reflect expenses or sales charges. The graphs above and
the table below do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares.
HIGH INCOME FUND DIVERSIFICATION OF INVESTMENTS AMONG MARKET SECTORS
[PIE CHART OF HIGH INCOME FUND DIVERSIFICATION OF INVESTMENTS
AMONG MARKET SECTORS]
Other Sectors 26%
Energy 12%
Cash and Other Net Assets 8%
Media 8%
Basic Materials 7%
Telecommunications 7%
Communications 6%
Industrials 6%
Recreation 6%
Containers & Packaging 5%
Health Care Services 3%
Pipeline 3%
Retail 3%
[END PIE CHART]
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MEMBERS HIGH INCOME FUND AVERAGE ANNUAL TOTAL RETURN THROUGH APRIL 30, 2004
% Return Without Sales Charge % Return After Sales Charge***
Since Since
Inception Inception
1 Year 3 Years 5 Years [dagger] 1 Year 3 Years 5 Years [dagger]
------ ------- ------- --------- ------ ------- ------- ---------
Class A Shares* 11.11% 6.63% 3.56% 3.87% 5.78% 4.92% 2.56% 3.07%
Class B Shares** 10.24 5.87 2.82 3.11 5.74 4.87 2.54 3.11
Lipper High Yield Bond Fund Index 15.22 6.69 2.07 2.56 -- -- -- --
Lehman Brothers High Yield Bond Index 15.00 9.01 4.79 4.71 -- -- -- --
* Maximum Sales Charge is 4.75% for A Shares.
** Maximum Contingent Deferred Sales Charge is 4.5% for B Shares; reduced
after 12 months and eliminated after six years.
*** Assuming Maximum Applicable Sales Charge.
[dagger] Fund commenced operations on December 29, 1997.
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- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
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8 FUND PERFORMANCE REVIEW
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- -------------------------------- BALANCED FUND -------------------------------
INVESTMENT OBJECTIVE
The Balanced Fund seeks a high total return through the combination of income
and capital appreciation.
PORTFOLIO MANAGEMENT
The Fund is managed by a team of MEMBERS Capital Advisors' portfolio managers.
PRINCIPAL INVESTMENT STRATEGIES
The Balanced Fund invests in a broadly diversified array of securities including
common stocks, bonds and money market instruments. The Fund employs regular
rebalancing to maintain a relatively static asset allocation. Stock, bond and
cash components will vary, however, reflecting the relative availability of
attractively priced stocks and bonds. Generally, however, common stocks will
constitute 50% to 70% of the Fund's assets, bonds will constitute 25% to 50% of
the Fund's assets and money market instruments may constitute up to 25% of the
Fund's assets. The Balanced Fund will invest in the same types of equity
securities in which the Capital Appreciation Fund and Growth and Income Fund
invest, the same type of bonds in which the Bond Fund invests, and the same
types of money market instruments in which the Cash Reserves Fund invests.
The Balanced Fund (Class A shares at net asset value) returned 4.14% during the
six-month period ended April 30, 2004, out-performing the Blended Synthetic
Index, a representative index of stocks, bonds, and money-market instruments,
which returned 3.31%. The Fund under-performed the Lipper Balanced Fund Index, a
representative index of its peer funds, which returned 4.74%.
The Fund out-performed the Blended Synthetic Index primarily due to its lower
holdings of cash, which under-performed during the period as the Fed continued
to hold short-term interest rates low. The Fund trailed its peers primarily
because of its higher weighting in bonds, since stocks out-performed
investment-grade bonds during the period. Performance of the stock component of
the Fund was positively affected by an overweight in the energy sector versus
the S&P 500 Index. Performance was hurt by stock selection in the health care
sector, where holdings Applied Biosystems and Wyeth lagged behind the overall
performance of the sector. Performance was helped by stock selection in the
financials sector, as Allstate, American International Group, and Prudential
Financial benefited as investors rotated to more diverse, larger financial
enterprises, apparently anticipating that they will weather a rising-rate
environment more easily. Stock selection in the information technology sector
was also a positive contributor to performance, as Autodesk rose after posting
strong earnings and Motorola gained market share in the highly-competitive
market for cellular telephones.
The Balanced Fund's generally conservative approach led to under-performance
versus the typical balanced fund. Management currently intends to gradually and
moderately increase the Fund's allocation to equities for strategic reasons,
although it generally will maintain a conservative posture in regard to security
selection in both equity and fixed-income markets.
Effective June 30, 2004, the Balanced Fund's representative market index is
being changed from a single, fixed blend of the Standard & Poor's 500 Index
(45%), the Lehman Brothers Intermediate Government/Credit Bond Index (40%), and
90-day U.S. Treasury bills (15%) to two separate indexes--the Russell 1000(R)
Index and the Merrill Lynch U.S. Domestic Master Index. These indexes will
better reflect the types of stocks and bonds typically held by the Fund as
described in the prospectus. The separate presentation of the two indexes will
better reflect the manager's ability to vary the Fund's relative weightings in
stocks and bonds over time. The Fund's investment objective has not changed, nor
have the investment philosophies and strategies with which the Fund is managed.
MEMBERS Capital Advisors' Common Stock and Fixed-Income Portfolio Management
Teams--Advisor
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
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FUND PERFORMANCE REVIEW 9
- --------------------------------------------------------------------------------
- -------------------------------- BALANCED FUND -------------------------------
BALANCED FUND CUMULATIVE PERFORMANCE OF $10,000 SINCE INCEPTION[delta]
[CHART OF BALANCED FUND CUMULATIVE PERFORMANCE OF $10,000
SINCE INCEPTION[delta]]
12/29/97 Inception 4/30/1998 10/31/1998 4/30/1999 10/31/1999 4/30/2000 10/31/2000
------------------ --------- ---------- --------- ---------- --------- ----------
MMF Balanced A 9,425 10,281 10,266 11,736 11,866 12,653 12,893
MMF Balanced B 10,000 10,432 10,374 11,420 11,922 12,852 13,053
Merrill Lynch U.S. Domestic Master Index 10,000 10,219 10,803 10,870 10,840 11,005 11,634
Russell 1000 Index 10,000 11,872 11,656 14,283 14,638 16,061 15,965
Synthetic Index 10,000 10,872 11,196 11,707 12,017 12,724 13,383
4/30/2001 10/31/2001 4/30/2002 10/31/2002 4/30/2003 10/31/2003 4/30/2004
--------- ---------- --------- ---------- --------- ---------- ---------
MMF Balanced A 12,579 11,792 11,993 10,897 11,228 12,284 12,792
MMF Balanced B 12,728 11,867 12,329 11,161 11,357 12,385 12,952
Merrill Lynch U.S. Domestic Master Index 12,350 13,331 13,311 14,129 14,739 14,825 15,012
Russell 1000 Index 13,867 11,808 12,206 10,083 10,562 12,333 13,087
Synthetic Index 13,054 13,680 12,735 12,063 12,554 13,479 13,926
[END CHART]
[delta] This chart compares a $10,000 investment made in the Fund on its
inception date to a $10,000 investment made in the index on that date.
All dividends and capital gains are reinvested. Further information
relating to the Fund's performance, including expense reimbursements,
is contained in the Prospectus and elsewhere in this report. Past
performance is not indicative of future performance. Investment return
and principal value will fluctuate, so an investor's shares, when
redeemed, may be worth more or less than when purchased. Indices are
unmanaged and investors cannot invest in them. Additionally, index
returns do not reflect expenses or sales charges. The graphs above and
the table below do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares.
BALANCED FUND DIVERSIFICATION OF INVESTMENTS AMONG MARKET SECTORS
[PIE CHART OF BALANCED FUND DIVERSIFICATION OF INVESTMENTS AMONG MARKET SECTORS]
Common Stocks 59%
Mortgage Backed 12%
U.S. Government and Agency Obligations 12%
Corporate Notes & Bonds 11%
Cash and Other Net Assets 3%
Asset Backed 1%
Commercial Mortgage Backed 1%
Private Label Mortgage Backed 1%
[END PIE CHART]
- --------------------------------------------------------------------------------
MEMBERS BALANCED FUND AVERAGE ANNUAL TOTAL RETURN THROUGH APRIL 30, 2004
% Return Without Sales Charge % Return After Sales Charge***
Since Since
Inception Inception
1 Year 3 Years 5 Years [dagger] 1 Year 3 Years 5 Years [dagger]
------ ------- ------- --------- ------ ------- ------- ---------
Class A Shares* 13.93% 0.56% 1.74% 4.94% 7.38% -1.40% 0.53% 3.96%
Class B Shares** 13.06 -0.19 0.98 4.17 8.56 -1.31 0.61 4.17
Lipper Balanced Fund Index 16.18 1.63 2.01 4.85 -- -- -- --
Russell 1000(R) Index 23.90 -1.91 -1.73 4.34 -- -- -- --
Merrill Lynch U.S.
Domestic Master Index 1.85 6.72 6.66 6.62 -- -- -- --
Blended Synthetic Index 10.93 2.18 2.45 5.98 -- -- -- --
* Maximum Sales Charge is 5.75% for A Shares.
** Maximum Contingent Deferred Sales Charge is 4.5% for B Shares; reduced
after 12 months and eliminated after six years.
*** Assuming Maximum Applicable Sales Charge.
[dagger] Fund commenced operations on December 29, 1997.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
10 FUND PERFORMANCE REVIEW
- --------------------------------------------------------------------------------
- --------------------------- GROWTH AND INCOME FUND ---------------------------
INVESTMENT OBJECTIVE
The Growth and Income Fund seeks long-term capital growth with income as a
secondary consideration.
PORTFOLIO MANAGEMENT
The Fund is managed by a team of MEMBERS Capital Advisors' portfolio managers.
PRINCIPAL INVESTMENT STRATEGIES
The Growth and Income Fund will focus on stocks of companies with financial and
market strength and a long-term record of financial performance, and will, under
normal market conditions, maintain at least 80% of its assets in such stocks.
Primarily through ownership of a diversified portfolio of common stocks and
securities convertible into common stocks, the Fund will seek a rate of return
in excess of returns typically available from less variable investment
alternatives. The Fund generally follows what is known as a "value" approach
which generally means that the managers seek to invest in stocks at prices below
their perceived intrinsic value as estimated based on fundamental analysis of
the issuing company and its prospects. By investing in value stocks, the Fund
attempts to limit the downside risk over time but may also produce smaller gains
than other stock funds if their intrinsic values are not realized by the market
or if growth-oriented investments are favored by investors.
The Growth and Income Fund (Class A shares at net asset value) returned 7.19%
during the six-month period ended April 30, 2004, out-performing the S&P 500
Index of large-capitalization stocks, which returned 6.27%. The Fund
under-performed the Lipper Large-Cap Value Fund Index, which returned 8.01%.
The Fund's performance was helped by an overweight in the energy sector.
Performance was also helped by stock selection in the financials sector, as
Allstate, Prudential Financial, Berkshire Hathaway, and Bank of America all
performed well as investors apparently favored the prospects for larger,
potentially more stable enterprises to weather a campaign of monetary tightening
by the U.S. Federal Reserve. Performance was hurt by stock selection in the
health care sector, as Bristol Myers Squibb continued to struggle when compared
with its peers in the pharmaceutical industry and Wyeth gave back some of the
gains it earned during a strong period of performance in early 2003. Performance
was also hurt by stock selection in the utilities sector, as the Fund's holdings
in Ameren, Consolidated Edison, FPL Group, and Progress Energy--all more
conservative, regulated utilities--underperformed in the sector. At-risk,
unregulated utilities out-performed during the period as market participants
apparently decided that they had overestimated the risks inherent in these
shares and bid prices up.
Management continues to favor "blue chip" shares--stocks of industry leaders
with solid track records of earnings growth and healthy balance sheets.
Management believes that market participants, perhaps lured by the exceptional
returns that riskier "deep value" and speculative growth provided during 2003,
may have undervalued a number of these stocks.
Effective June 30, 2004, the Growth & Income Fund's representative market index
is being changed from the Standard & Poor's 500 Index to the Russell 1000(R)
Value Index. This Russell 1000(R) Value Index will better reflect the Fund's
focus on large-cap value stocks as described in the prospectus. Also, our
analysis of the Fund's representative Morningstar peer group (Large-Cap Value)
shows a higher correlation with the Russell 1000(R) Value Index than with the
Standard & Poor's 500 Index. The Fund's investment objective has not changed,
nor have the investment philosophies and strategies with which the Fund is
managed.
MEMBERS Capital Advisors' Common Stock Portfolio Management Team--Advisor
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
- --------------------------------------------------------------------------------
FUND PERFORMANCE REVIEW 11
- --------------------------------------------------------------------------------
- --------------------------- GROWTH AND INCOME FUND ---------------------------
GROWTH AND INCOME FUND CUMULATIVE PERFORMANCE OF $10,000 SINCE INCEPTION[delta]
[CHART OF GROWTH AND INCOME FUND CUMULATIVE PERFORMANCE OF $10,000
SINCE INCEPTION[delta]]
12/29/97 Inception 4/30/1998 10/31/1998 4/30/1999 10/31/1999 4/30/2000 10/31/2000
------------------ --------- ---------- --------- ---------- --------- ----------
MMF Growth & Income A 9,425 10,928 10,327 12,910 12,634 13,654 13,506
MMF Growth & Income B 10,000 11,114 10,447 12,287 12,821 13,893 13,682
Russell 1000 Value Index 10,000 11,595 11,021 13,228 12,843 12,716 13,552
S&P 500 Index 10,000 11,717 11,670 13,057 14,667 15,725 15,560
4/30/2001 10/31/2001 4/30/2002 10/31/2002 4/30/2003 10/31/2003 4/30/2004
--------- ---------- --------- ---------- --------- ---------- ---------
MMF Growth & Income A 12,430 10,748 11,300 9,081 9,286 10,801 11,577
MMF Growth & Income B 12,566 10,777 11,609 9,295 9,365 10,861 11,709
Russell 1000 Value Index 13,533 11,945 13,004 10,748 11,312 13,206 14,283
S&P 500 Index 13,677 11,680 11,948 9,915 10,359 11,977 12,729
[END CHART]
[delta] This chart compares a $10,000 investment made in the Fund on its
inception date to a $10,000 investment made in the index on that date.
All dividends and capital gains are reinvested. Further information
relating to the Fund's performance, including expense reimbursements,
is contained in the Prospectus and elsewhere in this report. Past
performance is not indicative of future performance. Investment return
and principal value will fluctuate, so an investor's shares, when
redeemed, may be worth more or less than when purchased. Indices are
unmanaged and investors cannot invest in them. Additionally, index
returns do not reflect expenses or sales charges. The graphs above and
the table below do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares.
GROWTH AND INCOME FUND DIVERSIFICATION OF INVESTMENTS AMONG MARKET SECTORS
[PIE CHART OF GROWTH AND INCOME FUND DIVERSIFICATION OF INVESTMENTS
AMONG MARKET SECTORS]
Financials 25%
Information Technology 12%
Consumer Discretionary 11%
Energy 11%
Industrials 10%
Consumer Staples 9%
Health Care 8%
Telecommunication Services 5%
Materials 4%
Utilities 3%
Cash and Other Net Assets 2%
[END PIE CHART]
- --------------------------------------------------------------------------------
MEMBERS GROWTH AND INCOME FUND AVERAGE ANNUAL TOTAL RETURN
THROUGH APRIL 30, 2004
% Return Without Sales Charge % Return After Sales Charge***
Since Since
Inception Inception
1 Year 3 Years 5 Years [dagger] 1 Year 3 Years 5 Years [dagger]
------ ------- ------- --------- ------ ------- ------- ---------
Class A Shares* 24.67% -2.34% -2.16% 3.30% 17.50% -4.26% -3.31% 2.34%
Class B Shares** 23.79 -3.09 -2.90 2.52 19.29 -4.23 -3.28 2.52
Lipper Large-Cap Value Fund Index 24.75 -1.03 -0.31 4.02 -- -- -- --
Russell 1000(R) Value Index 26.26 1.81 1.54 5.79 -- -- -- --
S&P 500 Index 22.88 -2.36 -2.26 3.88 -- -- -- --
* Maximum Sales Charge is 5.75% for A Shares.
** Maximum Contingent Deferred Sales Charge is 4.5% for B Shares; reduced
after 12 months and eliminated after six years.
*** Assuming Maximum Applicable Sales Charge.
[dagger] Fund commenced operations on December 29, 1997.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
12 FUND PERFORMANCE REVIEW
- --------------------------------------------------------------------------------
- -------------------------- CAPITAL APPRECIATION FUND -------------------------
INVESTMENT OBJECTIVE
The Capital Appreciation Fund seeks long-term capital appreciation.
PORTFOLIO MANAGEMENT
The Fund is managed by a team of MEMBERS Capital Advisors' portfolio managers.
PRINCIPAL INVESTMENT STRATEGIES
The Capital Appreciation Fund invests primarily in common stocks, and will,
under normal market conditions, maintain at least 80% of its assets in such
securities. The Fund seeks stocks that have low market prices relative to their
perceived intrinsic value and growth capabilities as estimated based on
fundamental analysis of the issuing companies and their prospects. This is
sometimes referred to as a "core" or "blend" approach. Relative to the Growth
and Income Fund, the Capital Appreciation Fund will seek more earnings growth
capability in the stocks it purchases, and will include some smaller, less
developed issuers and some companies undergoing more significant changes in
their operations or experiencing signif icant changes in their markets. The Fund
will diversify its holdings among various industries and among companies within
those industries may often be less diversified than the Growth and Income Fund.
The combination of these factors introduces greater investment risk than the
Growth and Income Fund, but can also provide higher long-term returns than are
typically available from less risky investments.
The MEMBERS Capital Appreciation Fund (Class A shares at net asset value)
returned 4.63% during the six-month period ended April 30, 2004,
under-performing the S&P SuperComposite 1500 Index, which returned 6.43%. The
Fund also under-performed the Lipper Multi-Cap Core Fund Index, a representative
index of peer funds, which returned 6.24%.
Fund performance was helped by an overweight in the energy sector and by stock
selection in the information technology sector, where computer-aided design
software company Autodesk rose sharply after recording impressive earnings
growth. Performance was hurt by stock selection in the health care sector, where
Applied Biosystems issued cautious earnings guidance and saw its share price
decline sharply in a biotechnology sector sell-off late in the period as equity
investors rotated out of more speculative shares. Performance was also hurt by
stock selection in the telecommunications sector, as CenturyTel posted
disappointing earnings and earnings growth.
The Fund generally performed well in 2003 after under-performing in 2002.
However, as noted, the Fund's relative performance slipped early in 2004,
primarily due to the under-performance of the two rather large holdings
discussed above. Management has tightened its risk controls with the intention
that under-performance by a few holdings will be less likely to impact the
performance of the overall portfolio going forward.
Effective June 30, 2004, the Capital Appreciation Fund's representative market
index is being changed from the Standard & Poor's SuperComposite 1500 Index to
the Russell 1000(R) Index. This Russell 1000(R) Index will reflect the Fund's
use of primarily large-cap and some mid-cap stocks as described in the
prospectus. Also, our analysis of the Fund's representative Morningstar peer
group (Large-Cap Blend) shows a higher correlation with the Russell 1000(R)
Index than with the Standard & Poor's SuperComposite 1500 Index. The Fund's
investment objective has not changed, nor have the investment philosophies and
strategies with which the Fund is managed.
MEMBERS Capital Advisors' Common Stock Portfolio Management Team--Advisor
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
- --------------------------------------------------------------------------------
FUND PERFORMANCE REVIEW 13
- --------------------------------------------------------------------------------
- -------------------------- CAPITAL APPRECIATION FUND -------------------------
CAPITAL APPRECIATION FUND CUMULATIVE PERFORMANCE OF $10,000
SINCE INCEPTION[delta]
[CHART OF CAPITAL APPRECIATION FUND CUMULATIVE PERFORMANCE OF $10,000
SINCE INCEPTION[delta]]
12/29/97 Inception 4/30/1998 10/31/1998 4/30/1999 10/31/1999 4/30/2000 10/31/2000
------------------ --------- ---------- --------- ---------- --------- ----------
MMF Capital Appreciation A 9,425 11,057 10,415 12,558 12,945 14,585 15,550
MMF Capital Appreciation B 10,000 11,261 10,541 12,034 13,153 14,870 15,812
Russell 1000 Index 10,000 11,872 11,656 14,283 14,638 16,061 15,965
S&P 1500 Index 10,000 11,692 11,428 13,445 14,281 15,481 15,446
4/30/2001 10/31/2001 4/30/2002 10/31/2002 4/30/2003 10/31/2003 4/30/2004
--------- ---------- --------- ---------- --------- ---------- ---------
MMF Capital Appreciation A 14,708 12,116 12,057 9,142 9,674 11,278 11,801
MMF Capital Appreciation B 14,940 12,205 12,401 9,364 9,779 11,366 11,969
Russell 1000 Index 13,867 11,808 12,206 10,083 10,562 12,333 13,087
S&P 1500 Index 13,757 11,795 12,314 10,140 10,586 12,371 13,165
[END CHART]
[delta] This chart compares a $10,000 investment made in the Fund on its
inception date to a $10,000 investment made in the index on that date.
All dividends and capital gains are reinvested. Further information
relating to the Fund's performance, including expense reimbursements,
is contained in the Prospectus and elsewhere in this report. Past
performance is not indicative of future performance. Investment return
and principal value will fluctuate, so an investor's shares, when
redeemed, may be worth more or less than when purchased. Indices are
unmanaged and investors cannot invest in them. Additionally, index
returns do not reflect expenses or sales charges. The graphs above and
the table below do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares.
CAPITAL APPRECIATION FUND DIVERSIFICATION OF INVESTMENTS AMONG MARKET SECTORS
[PIE CHART OF CAPITAL APPRECIATION FUND DIVERSIFICATION OF INVESTMENTS
AMONG MARKET SECTORS]
Financials 17%
Information Technology 17%
Health Care 14%
Consumer Discretionary 12%
Industrials 12%
Consumer Staples 11%
Energy 6%
Cash and Other Net Assets 4%
Telecommunication Services 3%
Materials 2%
Utilities 2%
[END PIE CHART]
- --------------------------------------------------------------------------------
MEMBERS CAPITAL APPRECIATION FUND AVERAGE ANNUAL TOTAL RETURN
THROUGH APRIL 30, 2004
% Return Without Sales Charge % Return After Sales Charge***
Since Since
Inception Inception
1 Year 3 Years 5 Years [dagger] 1 Year 3 Years 5 Years [dagger]
------ ------- ------- --------- ------ ------- ------- ---------
Class A Shares* 21.98% -7.08% -1.24% 3.61% 14.99% -8.90% -2.40% 2.65%
Class B Shares** 21.18 -7.74 -1.94 2.88 16.68 -8.82 -2.34 2.88
Lipper Multi-Cap Core Fund Index 26.45 -1.23 0.19 4.30 -- -- -- --
Russell 1000(R) Index 23.90 -1.91 -1.73 4.34 -- -- -- --
S&P SuperComposite 1500 Index 24.36 -1.42 -1.09 4.43 -- -- -- --
* Maximum Sales Charge is 5.75% for A Shares.
** Maximum Contingent Deferred Sales Charge is 4.5% for B Shares; reduced
after 12 months and eliminated after six years.
*** Assuming Maximum Applicable Sales Charge.
[dagger] Fund commenced operations on December 29, 1997.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
14 FUND PERFORMANCE REVIEW
- --------------------------------------------------------------------------------
- -------------------------------- MID-CAP FUND --------------------------------
INVESTMENT OBJECTIVE
The Mid-Cap Fund seeks long-term capital appreciation.
PORTFOLIO MANAGEMENT
The Fund is managed by a team of MEMBERS Capital Advisors' portfolio managers,
which may use one or more subadvisors under a "manager of managers" approach to
make investment decisions for some or all of the assets of this Fund. Wellington
Management Company, LLP is the only subadvisor currently used by MEMBERS Capital
Advisors to manage the assets within the smaller-cap portion of the Fund.
PRINCIPAL INVESTMENT STRATEGIES
The Mid-Cap Fund invests primarily in common stocks of midsize and smaller
companies (market capitalization of less than $12 billion, but more than $2
billion, at the time of purchase), and will under normal market conditions,
maintain at least 80% of its assets in such securities. However, the Fund will
not automatically sell a stock just because the company's market capitalization
has either grown beyond $12 billion, or fallen below $2 billion, and such
positions may be increased through additional purchases.
The Fund seeks stocks in this midsize to smaller range that have a low market
price relative to their value as estimated based on fundamental analysis of the
issuing company and its prospects. This is sometimes referred to as a "value"
approach. Relative to the Growth and Income and Capital Appreciation Funds, the
Mid-Cap Fund includes more smaller, less developed issuers. These midsize and
smaller companies often have difficulty competing with larger companies, but the
successful ones tend to grow faster than larger companies. They often use
profits to expand rather than to pay dividends.
The Fund diversifies its holdings among various industries and among companies
within those industries but is often less diversified than the Growth and Income
Fund. The combination of these factors introduces greater investment risk than
the Growth and Income Fund, but can also provide higher long-term returns than
are typically available from less risky investments.
The MEMBERS Mid-Cap Fund (Class A shares at net asset value) returned 7.55%
during the six-month period ended April 30, 2004, out-performing the S&P MidCap
400 Index, which returned 6.94%. The Fund under-performed the Lipper Mid-Cap
Value Fund Index, a representative index of peer funds, which returned 10.30%
Fund performance was helped by overweights in the information technology and
consumer staples sectors. Fund performance was also helped by stock selection in
the health care sector, where medical device makers Apogent Technologies and
Becton Dickinson performed strongly, and Biogen Idec shares appreciated in price
as market participants viewed the merger of Biogen and Idec Pharmaceuticals
favorably. Performance was hurt by stock selection in the materials sector, as
Martin Marietta and MeadWestvaco were hit particularly hard during a general
rotation by market participants away from cyclical shares.
The Fund performed versus its benchmark index during the period, but it did
under-perform its peers. Shares of financially distressed companies--so-called
"deep value" stocks--were the strongest performers in the mid-cap space during
the period, as these companies were able to take advantage of
higher-than-expected earnings and an exceptionally low cost of capital to
refinance, restructure, and shore up their balance sheets. The Fund's investment
discipline has tended to avoid the riskiest shares in the mid-cap universe,
which can lead to periods of under-performance versus its peer funds, especially
those that devote a significant portion of their portfolios to "deep value"
stocks.
Effective June 30, 2004, the Mid-Cap Fund's representative market index is being
changed from the Standard & Poor's MidCap 400 Index to the Russell Midcap(R)
Value Index. This index will better reflect the Fund's focus on mid-cap value
stocks as described in the prospectus. Also, our analysis of the Fund's
representative Morningstar peer group (Mid-Cap Value) shows a higher correlation
with the Russell Midcap(R) Value Index than with the Standard & Poor's MidCap
400 Index. The Fund's investment objective has not changed, nor have the
investment philosophies and strategies with which the Fund is managed.
MEMBERS Capital Advisors' Common Stock Portfolio Management Team--Advisor
Wellington Management Company, LLP--Subadvisor
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
- --------------------------------------------------------------------------------
FUND PERFORMANCE REVIEW 15
- --------------------------------------------------------------------------------
- -------------------------------- MID-CAP FUND --------------------------------
MID-CAP FUND CUMULATIVE PERFORMANCE OF $10,000 SINCE INCEPTION[delta]
[CHART OF MID-CAP FUND CUMULATIVE PERFORMANCE OF $10,000
SINCE INCEPTION[delta]]
2-28-01 Inception 4/30/2001 10/31/2001 4/30/2002 10/31/2002 4/30/2003 10/31/2003 4/30/2004
----------------- --------- ---------- --------- ---------- --------- ---------- ---------
MMF Mid-Cap Fund A 9,425 9,793 8,935 10,601 8,149 8,630 10,488 11,281
MMF Mid-Cap Fund B 10,000 9,930 9,006 11,160 8,540 8,705 10,560 11,370
Russell Mid-Cap Value Index 10,000 10,204 9,207 11,063 8,933 9,571 11,924 12,913
S&P 400 Index 10,000 10,278 9,126 10,954 8,691 9,036 11,362 12,150
[END CHART]
[delta] This chart compares a $10,000 investment made in the Fund on its
inception date to a $10,000 investment made in the index on that date.
All dividends and capital gains are reinvested. Further information
relating to the Fund's performance, including expense reimbursements,
is contained in the Prospectus and elsewhere in this report. Past
performance is not indicative of future performance. Investment return
and principal value will fluctuate, so an investor's shares, when
redeemed, may be worth more or less than when purchased. Indices are
unmanaged and investors cannot invest in them. Additionally, index
returns do not reflect expenses or sales charges. The graphs above and
the table below do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares.
MID-CAP FUND DIVERSIFICATION OF INVESTMENTS AMONG MARKET SECTORS
[PIE CHART OF MID-CAP FUND DIVERSIFICATION OF INVESTMENTS AMONG MARKET SECTORS]
Financials 21%
Consumer Discretionary 16%
Industrials 15%
Health Care 10%
Information Technology 9%
Utilities 7%
Energy 6%
Cash and Other Assets 5%
Consumer Staples 5%
Materials 5%
Telecommunication Services 1%
[END PIE CHART]
- --------------------------------------------------------------------------------
MEMBERS MID-CAP FUND AVERAGE ANNUAL TOTAL RETURN THROUGH APRIL 30, 2004
% Return Without Sales Charge % Return After Sales Charge***
Since Since
Inception Inception
1 Year 3 Years [dagger] 1 Year 3 Years [dagger]
------ ------- --------- ------ ------- ---------
Class A Shares* 30.71% 4.83% 5.83% 23.17% 2.79% 3.87%
Class B Shares** 29.38 3.98 4.99 24.88 2.89 4.13
Lipper Mid-Cap Value Fund Index 38.61 8.32 8.71 -- -- --
Russell Midcap(R) Value Index 34.92 8.16 8.40 -- -- --
S&P MidCap 400 Index 34.45 5.73 6.33 -- -- --
* Maximum Sales Charge is 5.75% for A Shares.
** Maximum Contingent Deferred Sales Charge is 4.5% for B Shares; reduced
after 12 months and eliminated after six years.
*** Assuming Maximum Applicable Sales Charge.
[dagger] Fund commenced operations on February 28, 2001.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
16 FUND PERFORMANCE REVIEW
- --------------------------------------------------------------------------------
- ---------------------------- MULTI-CAP GROWTH FUND ---------------------------
INVESTMENT OBJECTIVE
The Muti-Cap Growth Fund seeks long-term capital appreciation.
PORTFOLIO MANAGEMENT
The Fund is managed by a team of MEMBERS Capital Advisors' portfolio managers,
which may use one or more subadvisors under a "manager of managers" approach to
make investment decisions for some or all of the assets of this Fund. Wellington
Management Company, LLP, is the only subadvisor currently used by MEMBERS
Capital Advisors to manage the assets of the Fund.
PRINCIPAL INVESTMENT STRATEGIES
The Multi-Cap Growth Fund invests generally in common stocks, securities
convertible into common stocks and related equity securities. Under normal
market conditions, the Fund will maintain at least 80% of its assets in these
securities. The Fund is managed by a team of portfolio managers of the
subadviser, each with expertise in a specific range of the market capitalization
spectrum. Each of the portfolio managers has a distinct sub-portfolio that is
focused on the manager's area of market capitalization expertise. Typically,
between 60% to 90% of the Fund will be invested in large capitalization
companies (generally over $12 billion of market capitalization). The subadvisor
may invest up to 25% of the Fund in mid capitalization companies (generally
between $2 billion and $12 billion of market capitalization) and up to 20% in
smaller capitalization companies (generally under $2 billion of market
capitalization). The Fund seeks securities of growth companies across a broad
range of market capitalization, which are companies that may be:
o major enterprises that have demonstrated and are expected to sustain
above-average growth or whose rates of earnings growth are anticipated to
accelerate because of factors such as expectations relative to management,
new or unique products, superior market position, changes in demand for the
company's products, or changes in the economy or segments of the economy
affecting the company; or
o early in their life cycle, but have the potential to become much larger
enterprises.
Continued economic growth and strong corporate profits apparently helped to lift
investor sentiment over the six-month period ended April 30, 2004. All major
indexes posted positive returns. Small-and large-cap stocks posted similar
returns, but stock performances were less evenly distributed among style
categories as value stocks substantially outperformed their growth counterparts.
Within Russell 3000 Growth--the Fund's representative index--nine out of ten
broad industry sectors posted positive returns. Energy and Telecommunication
Services were the index's best performing sectors, while Information Technology
was the weakest performer and the only sector that provided negative absolute
results. The Fund continues to have a procyclical orientation with overweights
in the Information Technology and Consumer Discretionary sectors.
For the six-month period, the Fund (Class A shares at net asset value) posted a
total return of 6.73% versus 4.12% for the Russell 3000 Growth Index and 4.04%
for the Lipper Multi-Cap Growth Fund Index.
Stock selection was strongest within the Information Technology and Industrials
sectors. The period's largest detractors were the Fund's significant underweight
position in the Consumer Staples sector and disadvantageous stock selection
among Telecommunication Services stocks. Key individual contributors to
performance were Apollo Group (Commercial Services & Supplies), Guidant (Health
Care Equipment & Services) and eBay (Retailing). Apollo Group benefited from the
secular trend of rising demand for higher education coupled with limited supply
growth. Guidant rose significantly after announcing a co-promotion arrangement
for Johnson & Johnson's Cypher drug-eluting stent and based on its continued
growth in implantable cardioverter defibrillators. eBay benefited from continued
strong earnings growth in the U.S. and overseas.
The biggest individual detractors from absolute performance during the six-month
period included KLA-Tencor (Semiconductors & Semiconductor Equipment), whose
strong results were overshadowed by a general decline in semiconductor stocks.
Other stocks that detracted from performance included Research in Motion and
EMC, both from the Technology Hardware & Equipment industry.
Going forward, the Fund's subadvisor anticipates continued strong economic and
corporate profit growth. Capital expenditures are expected to continue to trend
positively and inventory building is expected to be an additional positive
factor influencing economic growth over the next several quarters. The Federal
Reserve is widely expected to raise short-term rates over the next several
quarters in response to continued economic growth, improving employment numbers,
and a modest up-tick in the inflation rate. Although the economy continues to
march along at a healthy level, the economic up cycle may be beginning its
maturation phase. Following very high year-over-year GDP growth, the second
half's rate should moderate somewhat. If the U.S. economy moves into the later
stages of its recovery, investors may become less interested in economically
sensitive areas. If so, the Fund's orientation toward market-share-gaining
companies with strong organic growth should position it well for this next phase
of the market cycle.
MEMBERS Capital Advisors' Common Stock Portfolio Management Team--Advisor
Wellington Management Company, LLP--Subadvisor
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
- --------------------------------------------------------------------------------
FUND PERFORMANCE REVIEW 17
- --------------------------------------------------------------------------------
- ---------------------------- MULTI-CAP GROWTH FUND ---------------------------
MULTI-CAP GROWTH FUND CUMULATIVE PERFORMANCE OF $10,000 SINCE INCEPTION[delta]
[CHART OF MULTI-CAP GROWTH FUND CUMULATIVE PERFORMANCE OF $10,000
SINCE INCEPTION[delta]]
2-29-00 Inception 4/30/2000 10/31/2000 4/30/2001 10/31/2001 4/30/2002 10/31/2002 4/30/2003
----------------- --------- ---------- --------- ---------- --------- ---------- ---------
MMF Multi-Cap Growth A 9,425 8,087 7,417 5,353 4,024 3,949 3,289 3,450
MMF Multi-Cap Growth B 10,000 8,194 7,478 5,405 4,051 4,130 3,420 3,473
Russell 3000 Growth Index 10,000 10,023 9,221 6,839 5,594 5,521 4,490 4,595
10/31/2003 4/30/2004
---------- ---------
MMF Multi-Cap Growth A 4,204 4,486
MMF Multi-Cap Growth B 4,210 4,528
Russell 3000 Growth Index 5,539 5,767
[END CHART]
[delta] This chart compares a $10,000 investment made in the Fund on its
inception date to a $10,000 investment made in the index on that date.
All dividends and capital gains are reinvested. Further information
relating to the Fund's performance, including expense reimbursements,
is contained in the Prospectus and elsewhere in this report. Past
performance is not indicative of future performance. Investment return
and principal value will fluctuate, so an investor's shares, when
redeemed, may be worth more or less than when purchased. Indices are
unmanaged and investors cannot invest in them. Additionally, index
returns do not reflect expenses or sales charges. The graphs above and
the table below do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares.
MULTI-CAP GROWTH FUND DIVERSIFICATION OF INVESTMENTS AMONG MARKET SECTORS
[PIE CHART OF MULTI-CAP GROWTH FUND DIVERSIFICATION OF INVESTMENTS
AMONG MARKET SECTORS]
Information Technology 38%
Health Care 22%
Consumer Services 13%
Financials 10%
Other Sectors 9%
Consumer Discretionary 5%
Cash and Other Net Assets 3%
[END PIE CHART]
- --------------------------------------------------------------------------------
MEMBERS MULTI-CAP GROWTH FUND AVERAGE TOTAL RETURN THROUGH APRIL 30, 2004
% Return Without Sales Charge % Return After Sales Charge***
Since Since
Inception Inception
1 Year 3 Years [dagger] 1 Year 3 Years [dagger]
------ ------- --------- ------ ------- ---------
Class A Shares* 30.05% -5.72% -16.31% 22.68% -7.58% -17.49%
Class B Shares** 29.05 -6.38 -16.91 24.55 -7.48 -17.31
Lipper Multi-Cap Growth Fund Index 27.22 -6.57 -13.55 -- -- --
Russell 3000 Growth Index 22.93 -5.52 -12.37 -- -- --
* Maximum Sales Charge is 5.75% for A Shares.
** Maximum Contingent Deferred Sales Charge is 4.5% for B Shares; reduced
after 12 months and eliminated after six years.
*** Assuming Maximum Applicable Sales Charge.
[dagger] Fund commenced operations on February 29, 2000.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
18 FUND PERFORMANCE REVIEW
- --------------------------------------------------------------------------------
- -------------------------- INTERNATIONAL STOCK FUND --------------------------
INVESTMENT OBJECTIVE
The International Stock Fund seeks long-term growth of capital.
PORTFOLIO MANAGEMENT
The Fund is managed by a team of MEMBERS Capital Advisors' portfolio managers,
which may use one or more subadvisors under a "manager of managers" approach to
make investment decisions for some or all of the assets of this Fund. Lazard
Asset Management LLC is the only subadvisor currently used by MEMBERS Capital
Advisors to manage the assets of the Fund.
PRINCIPAL INVESTMENT STRATEGIES
Under normal market conditions, the International Stock Fund invests at least
80% of its assets in foreign equity securities. Foreign equity securities are
securities that are issued by companies organized or whose principal operations
are outside the U.S., are principally traded outside of the U.S., or are quoted
or denominated in a foreign currency. Equity securities include common stocks,
securities convertible into common stocks, preferred stocks, and other
securities representing equity interests such as American Depository Receipts
("ADRs" -- receipts typically issued by a U.S. financial institution which
evidence ownership of underlying securities of foreign corporate issuers),
European Depository Receipts ("EDRs") and Global Depository Receipts ("GDRs").
EDRs and GDRs are receipts evidencing an arrangement with a non-U.S. financial
institution similar to that for ADRs and are designed for use in non- U.S.
securities markets. The Fund may also invest in debt securities, foreign money
market instruments, and other income bearing securities as well as forward
foreign currency exchange contracts and other derivative securities and
contracts. The Fund always holds securities of issuers located in at least three
countries other than the U.S.
The global rally in aggressive growth stocks that began last year abated
somewhat during the six-month period ended April 30, 2004. Some of the more
defensive sectors, such as consumer staples and energy, posted stronger results
after an extended period of lagging performance.
The International Stock Fund underperformed its representative index, but
outperformed its peer index during the six-month period. The Fund posted a total
return of 11.41% (Class A shares at net asset value) versus 12.58% for the MSCI
EAFE Index and 10.98% for the Lipper International Stock Fund Index.
International small-cap stocks surged during the period as a rising global
economy and low interest rates combined with improved corporate profitability to
steadily lift returns. One of the Fund's best performing names during this time
was OPAP, the Greek lottery company. The rollout of the new lottery game, Kino,
is proceeding much faster than initially estimated. Athens and Thessaloniki, two
of the most densely populated areas in Greece, may now receive Kino terminals to
operate prior to the opening of the Olympic games in August. In addition, the
company may increase the dividend payout due to the positive ruling in the
ongoing litigation with one of its key suppliers. Although a new management team
has recently been put in place, we believe that they are well qualified to lead
the company and their reputations within the legal community in Greece should
help improve OPAP's overall reputation.
Detractors from performance among small-cap stocks included IHC Caland, the
Dutch oil service company specializing in the manufacture of floating
production, storage and offloading vessels. The company issued a trading
statement with a mixed forward look. With oil prices remaining high, production
low, and demand picking up, we believe there may be an increased need for oil
services. We believe IHC is well positioned to take advantage of this pickup
when it occurs.
Macro economic issues appeared to be more influential in the emerging markets
than company fundamentals. A key question regarding China changed from "How fast
is China growing?" to "How much will China slow?" Political issues were at the
forefront in Brazil where President Lula faced increased pressure for social
reforms, and in South Korea, Taiwan, India, Indonesia, the Philippines, and
Russia, where elections have been taking place. The Fund's iron ore holdings,
Caemi and CVRD (both Brazilian) and Kumba (South Africa), rallied and then
declined based upon global demand for steel. While steel prices may rise or
fall, the demand for iron ore appears to be less volatile. Three companies
control 65% of global capacity in the iron ore industry with CVRD holding a 35%
market share, which may bode well for future pricing.
SK Corp, a South Korean firm, detracted from Fund performance. The company
experienced a dramatic decline in price due to increasing shareholder activism.
In addition, the stock's valuations have been depressed as perceptions
reportedly spread that corporate governance has been lacking. Subsequently, a
proxy battle that took place during March 2004 resulted in management being
forced to increase corporate transparency. These changes should allow the stock
valuations to be reevaluated and potentially become more attractive.
Going forward, the subadvisor expects continued global economic growth and
generally favorable business conditions. But, after a period of impressive
returns from international equities, more modest expectations about near-term
results are probably warranted.
MEMBERS Capital Advisors' Common Stock Portfolio Management Team--Advisor
Lazard Asset Management--Subadvisor
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
- --------------------------------------------------------------------------------
FUND PERFORMANCE REVIEW 19
- --------------------------------------------------------------------------------
- -------------------------- INTERNATIONAL STOCK FUND --------------------------
INTERNATIONAL STOCK FUND CUMULATIVE PERFORMANCE OF $10,000
SINCE INCEPTION[delta]
[CHART OF INTERNATIONAL STOCK FUND CUMULATIVE PERFORMANCE OF $10,000
SINCE INCEPTION[delta]]
12/29/97 Inception 4/30/1998 10/31/1998 4/30/1999 10/31/1999 4/30/2000 10/31/2000
------------------ --------- ---------- --------- ---------- --------- ----------
International Stock A 9,425 11,104 9,764 11,084 11,413 10,981 10,353
International Stock B 10,000 11,301 9,840 10,916 11,545 11,103 10,413
MSCI EAFE 10,000 11,592 11,090 12,035 13,863 14,619 10,410
4/30/2001 10/31/2001 4/30/2002 10/31/2002 4/30/2003 10/31/2003 4/30/2004
--------- ---------- --------- ---------- --------- ---------- ---------
International Stock A 9,632 7,984 9,044 7,646 7,895 9,822 10,942
International Stock B 9,703 8,017 9,291 7,826 7,983 9,885 11,062
MSCI EAFE 12,257 10,033 10,613 8,745 8,923 11,156 12,559
[END CHART]
[delta] This chart compares a $10,000 investment made in the Fund on its
inception date to a $10,000 investment made in the index on that date.
All dividends and capital gains are reinvested. Further information
relating to the Fund's performance, including expense reimbursements,
is contained in the Prospectus and elsewhere in this report. Past
performance is not indicative of future performance. Investment return
and principal value will fluctuate, so an investor's shares, when
redeemed, may be worth more or less than when purchased. Indices are
unmanaged and investors cannot invest in them. Additionally, index
returns do not reflect expenses or sales charges. The graphs above and
the table below do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares.
INTERNATIONAL STOCK FUND GEOGRAPHICAL DIVERSIFICATION OF INVESTMENTS
[PIE CHART OF INTERNATIONAL STOCK FUND GEOGRAPHICAL DIVERSIFICATION
OF INVESTMENTS]
Europe (excluding United Kingdom) 39%
United Kingdom 20%
Japan 15%
Pacific Basin 11%
Latin America 6%
Other Countries 5%
Africa 3%
Cash and Other Net Assets 1%
[END PIE CHART]
- --------------------------------------------------------------------------------
MEMBERS INTERNATIONAL STOCK FUND AVERAGE ANNUAL TOTAL RETURN
THROUGH APRIL 30, 2004
% Return Without Sales Charge % Return After Sales Charge***
Since Since
Inception Inception
1 Year 3 Years 5 Years [dagger] 1 Year 3 Years 5 Years [dagger]
------ ------- ------- --------- ------ ------- ------- ---------
Class A Shares* 38.60% 4.34% -0.26% 2.38% 30.59% 2.30% -1.43% 1.43%
Class B Shares** 37.35 3.54 -1.02 1.60 32.85 2.44 -1.38 1.60
Lipper International Fund Index 38.22 1.44 1.32 4.00 -- -- -- --
MSCI EAFE Index 40.75 0.74 -0.41 3.66 -- -- -- --
* Maximum Sales Charge is 5.75% for A Shares.
** Maximum Contingent Deferred Sales Charge is 4.5% for B Shares; reduced
after 12 months and eliminated after six years.
*** Assuming Maximum Applicable Sales Charge.
[dagger] Fund commenced operations on December 29, 1997.
- --------------------------------------------------------------------------------
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
20 CASH RESERVES FUND--PORTFOLIO OF INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
Value
Par Value (Note 2)
- --------- --------
COMMERCIAL PAPER (A) - 42.53%
FINANCE - 35.52%
$ 750,000 American General Finance Corp.
1.010%, due 05/12/04 .............................. $ 749,768
750,000 CXC, Inc.
1.030%, due 06/07/04 .............................. 749,206
800,000 Fountain Square Commercial Funding
1.035%, due 06/15/04 .............................. 798,965
800,000 General Electric Capital Corp.
1.020%, due 05/11/04 .............................. 799,773
700,000 Goldman Sachs Group, Inc.
1.100%, due 05/24/04 .............................. 699,508
800,000 Greyhawk Funding LLC
1.030%, due 05/28/04 .............................. 799,382
500,000 Nestle Capital Corp.
1.050%, due 06/03/04 .............................. 499,519
500,000 Perry Global Funding LLC
1.060%, due 06/01/04 .............................. 499,544
750,000 Thames Asset Global Securitization, Inc.
1.040%, due 06/30/04 .............................. 748,700
1,000,000 Three Rivers Funding
1.020%, due 05/20/04 .............................. 999,462
------------
7,343,827
------------
FOREIGN - 3.14%
650,000 Government of Quebec
1.040%, due 06/28/04 .............................. 648,911
------------
HEALTH CARE - 3.87%
800,000 Medtronic, Inc.
0.980%, due 05/05/04 .............................. 799,913
------------
TOTAL COMMERCIAL PAPER ............................ 8,792,651
( Cost $8,792,651 ) ------------
CORPORATE NOTES AND BONDS - 21.60%
CONSUMER STAPLES - 2.45%
500,000 PepsiCo, Inc.
4.500%, due 09/15/04 .............................. 506,082
------------
FINANCE - 13.07%
1,000,000 American Express Credit Corp. (G)
1.140%, due 05/05/04 .............................. 1,000,000
500,000 Bank of America Corp. (G)
1.430%, due 07/22/04 .............................. 500,847
500,000 CIT Group, Inc.
5.625%, due 05/17/04 .............................. 500,996
700,000 Wells Fargo Financial, Inc.
5.450%, due 05/03/04 .............................. 700,163
------------
2,702,006
------------
HEALTH CARE - 2.45%
500,000 Pfizer, Inc.
3.625%, due 11/01/04 .............................. 505,894
------------
RETAIL - 3.63%
750,000 Wal-Mart Stores, Inc.
7.500%, due 05/15/04 .............................. 751,857
------------
TOTAL CORPORATE NOTES AND BONDS ................... 4,465,839
( Cost $4,465,839 ) ------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 27.67%
FEDERAL FARM CREDIT BANK (A) - 10.26%
1,132,000 1.010%, due 07/15/04 .............................. 1,129,618
1,000,000 1.330%, due 01/05/05 .............................. 990,801
------------
2,120,419
------------
FEDERAL HOME LOAN BANK (A) - 2.42%
500,000 1.305%, due 04/22/05 .............................. 500,000
------------
FEDERAL HOME LOAN MORTGAGE CORP.(A) - 3.14%
650,000 0.995%, due 05/10/04 .............................. 649,838
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (A) - 2.18%
452,000 1.055%, due 06/01/04 .............................. 451,589
------------
STUDENT LOAN MARKETING ASSOCIATION (G) - 9.67%
1,000,000 1.035%, due 05/04/04 .............................. 1,000,000
1,000,000 1.045%, due 05/04/04 .............................. 1,000,000
------------
2,000,000
------------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS ...... 5,721,846
( Cost $5,721,846 ) ------------
Shares
------
INVESTMENT COMPANIES - 7.89%
1,000,825 One Group Institutional Prime Money Market Fund ... 1,000,825
629,642 SSgA Prime Money Market Fund ...................... 629,642
------------
TOTAL INVESTMENT COMPANIES ........................ 1,630,467
( Cost $1,630,467 ) ------------
TOTAL INVESTMENTS - 99.69% ...................................... 20,610,803
( Cost $20,610,803** ) ------------
NET OTHER ASSETS AND LIABILITIES - 0.31% ........................ 64,193
------------
TOTAL NET ASSETS - 100.00% ...................................... 20,674,996
============
_______________________________
** Aggregate cost for Federal tax purposes.
(A) Rate noted represents annualized yield at time of purchase.
(G) Floating rate or variable rate notes.
See accompanying Notes to Financial Statements.
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
- --------------------------------------------------------------------------------
BOND FUND--PORTFOLIO OF INVESTMENTS (UNAUDITED) 21
- --------------------------------------------------------------------------------
Value
Par Value (Note 2)
- --------- --------
ASSET BACKED - 3.10%
$ 494,593 ABSC Long Beach Home Equity Loan Trust,
Series 2000-LB1, Class AF5 (G)
8.050%, due 09/21/30 .............................. $ 529,031
1,000,000 Countrywide Asset-Backed Certificates,
Series 2003-S, Class A4
5.009%, due 12/25/32 .............................. 1,001,207
560,000 GMAC Home Equity Loan Trust,
Series 2004-HE2, Class M1
3.950%, due 10/25/33 .............................. 540,050
700,000 Green Tree Home Equity Loan Trust,
Series 1999-A, Class B1
8.970%, due 11/15/27 .............................. 773,771
1,500,000 New Century Home Equity Trust,
Series 2003-5, Class AI5
5.500%, due 11/25/33 .............................. 1,508,361
------------
TOTAL ASSET BACKED ................................ 4,352,420
( Cost $4,274,762 ) ------------
COMMERCIAL MORTGAGE BACKED - 5.13%
300,000 Ameriquest Mortgage Co.,
Series 2004-FR1, Class M2
5.207%, due 05/25/34 .............................. 295,500
1,200,000 Greenwich Capital Commercial Funding Corp.,
Series 2004-GG1A, Class A7
5.317%, due 06/10/36 .............................. 1,205,950
1,196,095 Morgan Stanley Capital I, Inc.,
Series 1999-CAM1, Class A3
6.920%, due 03/15/32 .............................. 1,290,155
500,000 Morgan Stanley Capital I, Inc.,
Series 2004-TP13, Class A3
4.390%, due 09/13/45 .............................. 482,910
2,000,000 Morgan Stanley Dean Witter Capital I Inc.,
Series 2000-PRIN, Class A4
7.490%, due 02/23/34 .............................. 2,309,507
1,621,000 Residential Asset Mortgage Products Inc.,
Series 2003-RS9, Class AI5
4.990%, due 03/25/31 .............................. 1,606,798
------------
TOTAL COMMERCIAL MORTGAGE BACKED .................. 7,190,820
( Cost $7,118,991 ) ------------
PRIVATE LABEL MORTGAGE BACKED - 1.17%
1,600,000 Countrywide Alternative Loan Trust,
Series 2002-5, Class A10
6.750%, due 06/25/32 .............................. 1,640,200
------------
TOTAL PRIVATE LABEL MORTGAGE BACKED ............... 1,640,200
( Cost $1,624,638 ) ------------
CORPORATE NOTES AND BONDS - 28.74%
CABLE - 1.44%
650,000 Comcast Cable Communications, Inc.
6.875%, due 06/15/09 .............................. 715,575
800,000 Comcast Corp.
5.300%, due 01/15/14 .............................. 780,937
500,000 Cox Communications, Inc.
6.875%, due 06/15/05 .............................. 524,866
------------
2,021,378
------------
CAPITAL GOODS - 0.37%
500,000 United Technologies Corp.
6.625%, due 11/15/04 .............................. 513,273
------------
COMMUNICATION SERVICES - 0.71%
1,000,000 Clear Channel Communications, Inc.
4.250%, due 05/15/09 .............................. 991,776
------------
CONSUMER DISCRETIONARY - 0.50%
700,000 Carnival Corp. (C)
3.750%, due 11/15/07 .............................. 697,864
------------
CONSUMER STAPLES - 0.89%
750,000 Coca-Cola Enterprises, Inc.
4.375%, due 09/15/09 .............................. 757,761
500,000 Safeway, Inc.
4.125%, due 11/01/08 .............................. 494,348
------------
1,252,109
------------
ENERGY - 2.98%
700,000 Centerpoint Energy, Inc.
7.875%, due 04/01/13 .............................. 789,424
400,000 ConocoPhillips
8.500%, due 05/25/05 .............................. 427,005
500,000 Occidental Petroleum Corp.
5.875%, due 01/15/07 .............................. 533,215
800,000 Pemex Project Funding Master Trust
7.375%, due 12/15/14 .............................. 836,000
450,000 Texaco Capital, Inc.
5.700%, due 12/01/08 .............................. 470,453
1,000,000 Valero Energy Corp.
7.500%, due 04/15/32 .............................. 1,123,824
------------
4,179,921
------------
FINANCE - 8.36%
500,000 AIG SunAmerica Global Financing XII (C)
5.300%, due 05/30/07 .............................. 526,000
750,000 American Association of Retired Persons (C)
7.500%, due 05/01/31 .............................. 852,179
500,000 American General Finance Corp.
4.625%, due 09/01/10 .............................. 500,143
850,000 Bank of America Corp.
4.875%, due 01/15/13 .............................. 837,575
See accompanying Notes to Financial Statements.
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
22 BOND FUND--PORTFOLIO OF INVESTMENTS (UNAUDITED)(CONTINUED)
- --------------------------------------------------------------------------------
Value
Par Value (Note 2)
- --------- --------
CORPORATE NOTES AND BONDS (CONTINUED)
FINANCE (CONTINUED)
$ 500,000 Bear Stearns Cos., Inc.
7.800%, due 08/15/07 .............................. $ 563,518
500,000 Burlington Resources Finance Co.
5.700%, due 03/01/07 .............................. 531,732
1,000,000 Cendant Corp.
6.250%, due 01/15/08 .............................. 1,080,054
500,000 CIT Group, Inc.
7.375%, due 04/02/07 .............................. 554,872
750,000 Countrywide Home Loans, Inc.
5.250%, due 06/15/04 .............................. 753,290
750,000 EOP Operating LP
6.500%, due 06/15/04 .............................. 754,321
750,000 Goldman Sachs Group, Inc.
5.700%, due 09/01/12 .............................. 773,257
750,000 Household Finance Corp.
6.500%, due 11/15/08 .............................. 823,720
500,000 Merrill Lynch & Co., Inc.
7.375%, due 05/15/06 .............................. 546,884
500,000 U.S. Bank N.A.
6.300%, due 02/04/14 .............................. 542,853
750,000 Wachovia Corp.
4.950%, due 11/01/06 .............................. 784,951
500,000 Washington Mutual Finance Corp.
6.250%, due 05/15/06 .............................. 535,265
800,000 Wells Fargo & Co.
3.125%, due 04/01/09 .............................. 764,284
------------
11,724,898
------------
INDUSTRIALS - 6.74%
1,000,000 Caterpillar Financial Services Corp.
2.500%, due 10/03/06 .............................. 989,335
1,000,000 DaimlerChrysler NA Holding Corp.
4.750%, due 01/15/08 .............................. 1,014,474
1,000,000 Dow Chemical Co.
5.750%, due 12/15/08 .............................. 1,063,023
500,000 Ford Motor Credit Co.
7.600%, due 08/01/05 .............................. 528,338
500,000 Ford Motor Credit Co.
5.800%, due 01/12/09 .............................. 509,258
500,000 GE Global Insurance Holding Corp.
7.000%, due 02/15/26 .............................. 535,532
800,000 General Electric Co.
5.000%, due 02/01/13 .............................. 795,410
500,000 General Motors Acceptance Corp.
6.125%, due 08/28/07 .............................. 528,354
600,000 General Motors Acceptance Corp.
6.875%, due 09/15/11 .............................. 629,766
200,000 International Paper Co.
7.875%, due 08/01/06 .............................. 219,182
400,000 Raytheon Co.
4.500%, due 11/15/07 .............................. 409,477
650,000 Waste Management, Inc.
6.875%, due 05/15/09 .............................. 719,400
450,000 Waste Management, Inc.
6.375%, due 11/15/12 .............................. 483,156
1,000,000 Weyerhaeuser Co.
6.875%, due 12/15/33 .............................. 1,030,179
------------
9,454,884
------------
PIPELINE - 0.55%
750,000 Kinder Morgan, Inc.
6.650%, due 03/01/05 .............................. 778,694
------------
TELECOMMUNICATIONS - 2.25%
750,000 Bellsouth Capital Funding Corp.
7.875%, due 02/15/30 .............................. 879,933
750,000 SBC Communications, Inc.
5.875%, due 08/15/12 .............................. 782,558
250,000 Sprint Capital Corp.
7.125%, due 01/30/06 .............................. 268,183
200,000 Telephone & Data Systems, Inc.
7.000%, due 08/01/06 .............................. 216,657
500,000 Verizon Wireless Capital LLC
5.375%, due 12/15/06 .............................. 527,608
500,000 Vodafone Group PLC
5.000%, due 12/16/13 .............................. 489,854
------------
3,164,793
------------
TRANSPORTATION - 1.16%
750,000 Burlington Northern Santa Fe Corp.
6.375%, due 12/15/05 .............................. 795,608
750,000 Norfolk Southern Corp.
7.250%, due 02/15/31 .............................. 830,245
------------
1,625,853
------------
UTILITIES - 2.79%
750,000 DTE Energy Co.
6.450%, due 06/01/06 .............................. 796,767
500,000 Energy East Corp.
8.050%, due 11/15/10 .............................. 589,461
750,000 Niagara Mohawk Power Co.
7.750%, due 05/15/06 .............................. 820,908
250,000 Progress Energy, Inc.
7.750%, due 03/01/31 .............................. 285,476
600,000 Virginia Electric and Power Co., Series A
5.750%, due 03/31/06 .............................. 632,900
750,000 Wisconsin Electric Power Co.
6.500%, due 06/01/28 .............................. 789,315
------------
3,914,827
------------
TOTAL CORPORATE NOTES AND BONDS ................... 40,320,270
( Cost $39,296,181 ) ------------
MORTGAGE BACKED - 32.57%
FEDERAL HOME LOAN MORTGAGE CORP.- 7.70%
1,885,359 5.000%, due 05/01/18 Pool # E96322 ................ 1,900,263
1,149,412 7.000%, due 07/15/27 Series 1974 Class ZA ......... 1,210,751
2,500,000 5.500%, due 05/15/28 Series 2519 Class NG ......... 2,608,049
22,981 8.000%, due 06/01/30 Pool # C01005 ................ 24,830
199,854 7.000%, due 03/01/31 Pool # C48133 ................ 211,057
405,329 6.500%, due 01/01/32 Pool # C62333 ................ 422,118
1,125,087 6.000%, due 09/01/32 Pool # C70558 ................ 1,151,541
3,370,427 5.000%, due 07/01/33 Pool # A11325 ................ 3,270,216
------------
10,798,825
------------
See accompanying Notes to Financial Statements.
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
- --------------------------------------------------------------------------------
BOND FUND--PORTFOLIO OF INVESTMENTS (UNAUDITED)(CONTINUED) 23
- --------------------------------------------------------------------------------
Value
Par Value (Note 2)
- --------- --------
MORTGAGE BACKED (CONTINUED)
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 21.27%
$ 509,408 6.100%, due 04/01/11 Pool # 383475 ................ $ 551,660
142,268 6.000%, due 05/01/16 Pool # 582558 ................ 148,476
436,450 5.500%, due 09/01/17 Pool # 657335 ................ 448,286
1,377,217 5.500%, due 02/01/18 Pool # 673194 ................ 1,414,567
1,535,018 4.500%, due 09/01/18 Pool # 737144 ................ 1,512,875
230,495 6.000%, due 05/01/21 Pool # 253847 ................ 237,319
1,267,164 5.500%, due 12/01/22 Pool # 254587 ................ 1,284,133
321,339 7.000%, due 11/01/31 Pool # 607515 ................ 339,692
304,766 6.000%, due 02/01/32 Pool # 611619 ................ 311,840
982,463 6.500%, due 03/01/32 Pool # 631377 ................ 1,022,779
132,942 7.000%, due 05/01/32 Pool # 644591 ................ 140,534
3,081,458 6.500%, due 06/01/32 Pool # 545691 ................ 3,207,907
818,065 6.000%, due 12/01/32 Pool # 676552 ................ 837,054
2,814,720 5.500%, due 04/01/33 Pool # 690206 ................ 2,810,350
2,247,158 5.500%, due 05/01/33 Pool # 704523 ................ 2,243,670
1,371,928 6.000%, due 05/01/33 Pool # 555436 ................ 1,404,134
1,160,956 6.000%, due 08/01/33 Pool # 729418 ................ 1,188,173
1,612,224 6.000%, due 08/01/33 Pool # 729423 ................ 1,650,020
1,459,667 5.000%, due 10/01/33 Pool # 254903 ................ 1,415,264
2,838,772 5.500%, due 11/01/33 Pool # 555880 ................ 2,834,365
5,000,000 5.000%, due 05/01/34 TBA (H) ...................... 4,843,750
------------
29,846,848
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 3.60%
45,771 8.000%, due 10/20/15 Pool # 002995 ................ 48,465
2,024,855 6.500%, due 09/20/28 Series 1998-21, Class ZB ..... 2,099,775
190,780 6.500%, due 02/20/29 Pool # 002714 ................ 198,960
30,928 7.500%, due 05/20/30 Pool # 002921 ................ 33,146
63,889 7.500%, due 08/20/30 Pool # 002957 ................ 68,470
153,463 6.500%, due 04/20/31 Pool # 003068 ................ 159,955
2,400,000 6.000%, due 07/20/32 Series 2002-50, Class PE ..... 2,439,406
------------
5,048,177
------------
TOTAL MORTGAGE BACKED 45,693,850
( Cost $45,715,248 ) ------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 27.40%
FEDERAL FARM CREDIT BANK - 0.77%
500,000 6.125%, due 12/29/15 .............................. 547,029
500,000 5.875%, due 10/03/16 .............................. 537,959
------------
1,084,988
------------
FEDERAL HOME LOAN MORTGAGE CORP.- 2.79%
2,500,000 4.875%, due 11/15/13 .............................. 2,477,182
1,500,000 4.500%, due 01/15/14 .............................. 1,440,629
------------
3,917,811
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 6.26%
3,000,000 4.000%, due 09/02/08 .............................. 2,999,148
2,950,000 6.400%, due 05/14/09 .............................. 2,954,366
500,000 6.250%, due 07/19/11 .............................. 505,326
1,300,000 4.125%, due 04/15/14 .............................. 1,209,299
1,000,000 6.625%, due 11/15/30 .............................. 1,111,010
------------
8,779,149
------------
U.S. TREASURY BONDS - 4.76%
500,000 9.125%, due 05/15/09 .............................. 501,328
5,500,000 6.250%, due 05/15/30 .............................. 6,180,840
------------
6,682,168
------------
U.S. TREASURY NOTES - 12.82%
2,300,000 1.500%, due 03/31/06 .............................. 2,267,927
5,200,000 2.000%, due 05/15/06 .............................. 5,165,061
2,500,000 2.625%, due 11/15/06 .............................. 2,498,243
6,280,000 3.250%, due 01/15/09 .............................. 6,193,160
200,000 2.625%, due 03/15/09 .............................. 191,398
1,700,000 4.250%, due 11/15/13 .............................. 1,667,727
------------
17,983,516
------------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS ...... 38,447,632
( Cost $39,175,440 ) ------------
Shares
------
INVESTMENT COMPANIES - 20.67%
3,365,111 SSgA Prime Money Market Fund ...................... 3,365,111
25,638,049 State Street Navigator Securities
Lending Prime Portfolio (I) ....................... 25,638,049
------------
TOTAL INVESTMENT COMPANIES ........................ 29,003,160
( Cost $29,003,160 ) ------------
OTHER INVESTMENTS (I) - 4.56% ................................... 6,398,875
------------
TOTAL INVESTMENTS - 123.34% ..................................... 173,047,227
( Cost $172,607,295** ) ------------
NET OTHER ASSETS AND LIABILITIES - (23.34)% ..................... (32,745,602)
------------
TOTAL NET ASSETS - 100.00% ...................................... $140,301,625
============
_______________________________
** Aggregate cost for Federal tax purposes was $172,750,607.
(C) Security sold within the terms of a private placement memorandum exempt
from registration under section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or other
"qualified institutional investors." The securities have been determined to
be liquid under guidelines established by the Board of Trustees.
(G) Floating rate or variable rate note.
(H) Security purchased on a delayed delivery or when-issued basis.
(I) Represents collateral held in connection with securities lending.
See accompanying Notes to Financial Statements.
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
24 HIGH INCOME FUND--PORTFOLIO OF INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
Value
Par Value (Note 2)
- --------- --------
ASSET BACKED - 0.52%
$ 47,462 Continental Airlines, Inc.,
Series 1997-4, Class B
6.900%, due 01/02/17 .............................. $ 39,480
43,369 Continental Airlines, Inc.,
Series 1998-1, Class B
6.748%, due 03/15/17 .............................. 35,255
118,327 Continental Airlines, Inc.,
Series 1999-1, Class B
6.795%, due 08/02/18 .............................. 100,400
134,670 Continental Airlines, Inc.,
Series 1999-2, Class B
7.566%, due 03/15/20 .............................. 112,597
45,000 Delta Air Lines, Inc.,
Series 2000-1, Class B
7.920%, due 05/18/12 .............................. 37,067
------------
TOTAL ASSET BACKED ................................ 324,799
( Cost $305,626 ) ------------
COMMERCIAL MORTGAGE BACKED - 0.72%
180,000 Commercial Mortgage Acceptance Corp.,
Series 1998-C2, Class F (C)(G)
5.440%, due 09/15/30 .............................. 159,372
100,000 CS First Boston Mortgage Securities Corp.,
Series 1998-C2, Class F (C)
6.750%, due 11/11/30 .............................. 85,706
85,000 GE Capital Commerical Mortgage Corp. (C)
7.520%, due 01/15/33 .............................. 85,458
115,000 GMAC Commercial Mortgage Securities, Inc. (C)
7.640%, due 04/15/34 .............................. 121,510
------------
TOTAL COMMERCIAL MORTGAGE BACKED .................. 452,046
( Cost $431,140 ) ------------
CORPORATE NOTES AND BONDS - 89.38%
AEROSPACE/DEFENSE - 0.86%
110,000 K & F Industries, Inc., Series B
9.250%, due 10/15/07 .............................. 113,850
55,000 K & F Industries, Inc., Series B
9.625%, due 12/15/10 .............................. 61,600
235,000 L-3 Communications Corp.
7.625%, due 06/15/12 .............................. 253,212
105,000 TransDigm, Inc.
8.375%, due 07/15/11 .............................. 111,038
------------
539,700
------------
BASIC MATERIALS - 7.14%
445,000 Abitibi-Consolidated, Inc. (D)
8.550%, due 08/01/10 .............................. 482,763
30,000 Buckeye Technologies, Inc.
8.000%, due 10/15/10 .............................. 28,650
155,000 Buckeye Technologies, Inc.
8.500%, due 10/01/13 .............................. 165,075
170,000 Dresser, Inc.
9.375%, due 04/15/11 .............................. 183,600
405,000 Equistar Chemicals LP/Equistar Funding Corp.
10.625%, due 05/01/11 ............................. 453,600
115,000 FiberMark, Inc. (E)
10.750%, due 04/15/11 ............................. 60,950
105,000 Foamex L.P.
10.750%, due 04/01/09 ............................. 98,175
705,000 Georgia-Pacific Corp.
9.375%, due 02/01/13 .............................. 819,562
30,000 Hexcel Corp.
9.875%, due 10/01/08 .............................. 33,075
220,000 Hexcel Corp.
9.750%, due 01/15/09 .............................. 231,000
30,000 Huntsman International LLC
9.875%, due 03/01/09 .............................. 33,375
350,000 Huntsman International LLC
10.125%, due 07/01/09 ............................. 366,625
137,000 Interface, Inc.
10.375%, due 02/01/10 ............................. 153,269
60,000 INVISTA (C)
9.250%, due 05/01/12 .............................. 60,000
205,000 Newark Group, Inc. (C)
9.750%, due 03/15/14 .............................. 200,900
195,000 Norske Skog Canada, Ltd. (D)
8.625%, due 06/15/11 .............................. 211,087
95,000 Norske Skog Canada, Ltd. (C)(D)
7.375%, due 03/01/14 .............................. 97,375
335,000 Rhodia S.A. (C)(D)
8.875%, due 06/01/11 .............................. 276,375
65,000 Sovereign Specialty Chemicals, Inc.
11.875%, due 03/15/10 ............................. 66,950
145,000 Steel Dynamics, Inc. (C)
9.500%, due 03/15/09 .............................. 162,037
117,000 Tempur Pedic, Inc. and Tempur Production USA,
Inc. (C)
10.250%, due 08/15/10 ............................. 133,673
135,000 United States Steel Corp.
9.750%, due 05/15/10 .............................. 152,888
------------
4,471,004
------------
BUILDING AND CONSTRUCTION - 2.34%
120,000 American Standard, Inc.
7.375%, due 02/01/08 .............................. 131,400
85,000 Corrections Corp. of America
9.875%, due 05/01/09 .............................. 95,837
25,000 Corrections Corp. of America
7.500%, due 05/01/11 .............................. 26,188
50,000 Corrections Corp. of America (C)
7.500%, due 05/01/11 .............................. 52,375
100,000 D. R. Horton, Inc.
5.000%, due 01/15/09 .............................. 98,500
375,000 D. R. Horton, Inc.
8.000%, due 02/01/09 .............................. 414,375
85,000 Formica Corp., Series B (E)
10.875%, due 03/01/09 ............................. 13,706
140,000 Joy Global, Inc., Series B
8.750%, due 03/15/12 .............................. 156,800
170,000 Ply Gem Industries, Inc. (C)
9.000%, due 02/15/12 .............................. 174,250
40,000 Technical Olympic USA, Inc. (C)
7.500%, due 03/15/11 .............................. 38,400
250,000 WCI Communities, Inc.
7.875%, due 10/01/13 .............................. 261,250
------------
1,463,081
------------
See accompanying Notes to Financial Statements.
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
- --------------------------------------------------------------------------------
HIGH INCOME FUND--PORTFOLIO OF INVESTMENTS (UNAUDITED)(CONTINUED) 25
- --------------------------------------------------------------------------------
Value
Par Value (Note 2)
- --------- --------
CORPORATE NOTES AND BONDS (CONTINUED)
CHEMICALS AND DRUGS - 2.65%
$ 220,000 Acetex Corp. (D)
10.875%, due 08/01/09 ............................. $ 242,000
155,000 Alpharma, Inc. (C)
8.625%, due 05/01/11 .............................. 162,750
190,000 Hercules, Inc. (C)
6.750%, due 10/15/29 .............................. 188,100
200,000 IMC Global, Inc.
10.875%, due 08/01/13 ............................. 245,500
10,000 Kronos International, Inc. (F)
8.875%, due 06/30/09 .............................. 12,815
175,000 Lyondell Chemical Co.
9.500%, due 12/15/08 .............................. 182,875
55,000 Lyondell Chemical Co.
11.125%, due 07/15/12 ............................. 61,050
60,000 Nalco Co. (C)
7.750%, due 11/15/11 .............................. 63,150
115,000 Nalco Co. (C)
8.875%, due 11/15/13 .............................. 121,325
140,000 Nova Chemicals Corp. (D)
6.500%, due 01/15/12 .............................. 140,000
50,000 Noveon, Inc., Series B
11.000%, due 02/28/11 ............................. 58,250
55,000 Resolution Performance Products LLC/RPP
Capital Corp.
8.000%, due 12/15/09 .............................. 56,925
115,000 Rockwood Specialties Group, Inc.
10.625%, due 05/15/11 ............................. 122,475
------------
1,657,215
------------
COMMUNICATION - 6.45%
150,000 American Tower Corp.
9.375%, due 02/01/09 .............................. 160,875
50,000 American Towers, Inc. (C)
7.250%, due 12/01/11 .............................. 51,125
85,000 CCO Holdings LLC/CCO Holdings Capital Corp. (C)
8.750%, due 11/15/13 .............................. 83,725
80,000 Charter Communciations Operating LLC/
Charter Communications Capital Corp. (C)
8.375%, due 04/30/14 .............................. 78,800
160,000 Charter Communications Holdings II LLC/
Charter Communications Holdings II
Capital Corp. (C)
10.250%, due 09/15/10 ............................. 164,800
130,000 Charter Communications Holdings LLC/
Charter Communications Capital Corp.
8.250%, due 04/01/07 .............................. 122,525
820,000 Charter Communications Holdings LLC/
Charter Communications Capital Corp.
8.625%, due 04/01/09 .............................. 680,600
15,000 Esprit Telecom Group PLC (D)(E)
10.875%, due 06/15/08 ............................. 2
170,000 Nextel Communications, Inc.
9.375%, due 11/15/09 .............................. 183,812
700,000 Nextel Communications, Inc.
7.375%, due 08/01/15 .............................. 727,125
300,000 Qwest Capital Funding, Inc.
7.250%, due 02/15/11 .............................. 244,500
200,000 Qwest Corp. (C)(G)
9.125%, due 03/15/12 .............................. 212,500
885,000 Qwest Services Corp. (C)
13.500%, due 12/15/10 ............................. 1,026,600
345,000 Telewest Communications PLC (B)(C)(D)
9.250%, due 04/15/09 .............................. 179,400
20,000 Telewest Communications PLC (B)(D)
11.375%, due 02/01/10 ............................. 9,400
125,000 Triton PCS, Inc.
8.750%, due 11/15/11 .............................. 115,312
------------
4,041,101
------------
CONSUMER CYCLICALS - 1.22%
120,000 Advanced Accesory Systems LLC, Series B
10.750%, due 06/15/11 ............................. 125,100
255,000 Burns, Philp Capital Property, Ltd.
9.750%, due 07/15/12 .............................. 269,025
105,000 Dura Operating Corp., Series D
9.000%, due 05/01/09 .............................. 104,475
175,000 Safilo Capital International S.A. (C)(F)
9.625%, due 05/15/13 .............................. 190,726
55,000 Technical Olympic USA, Inc.
9.000%, due 07/01/10 .............................. 57,750
440,000 WestPoint Stevens, Inc. (E)
7.875%, due 06/15/05 .............................. 14,300
105,000 WestPoint Stevens, Inc. (E)
7.875%, due 06/15/08 .............................. 3,412
------------
764,788
------------
CONSUMER SERVICES - 1.96%
65,000 GEO Group, Inc.
8.250%, due 07/15/13 .............................. 67,600
425,000 Iron Mountain, Inc.
8.625%, due 04/01/13 .............................. 454,750
70,000 Iron Mountain, Inc.
7.750%, due 01/15/15 .............................. 71,750
160,000 Merisant Co. (C)
9.500%, due 07/15/13 .............................. 168,800
125,000 Michael Foods, Inc. (C)
8.000%, due 11/15/13 .............................. 131,406
30,000 Pinnacle Foods Holding Corp. (C)
8.250%, due 12/01/13 .............................. 31,313
175,000 Roundy's, Inc., Series B
8.875%, due 06/15/12 .............................. 189,875
80,000 United Biscuits Finance PLC (F)
10.625%, due 04/15/11 ............................. 105,393
90,000 Venture Holdings Co. LLC, Series B (E)
9.500%, due 07/01/05 .............................. 3,825
------------
1,224,712
------------
CONSUMER STAPLES - 0.91%
90,000 Finlay Enterprises, Inc.
9.000%, due 05/01/08 .............................. 92,363
195,000 Revlon Consumer Products Corp.
8.625%, due 02/01/08 .............................. 182,325
130,000 Samsonite Corp.
10.750%, due 06/15/08 ............................. 135,200
35,000 Seminis Vegetable Seeds, Inc.
10.250%, due 10/01/13 ............................. 38,850
110,000 Seminis Vegetable Seeds, Inc. (C)
10.250%, due 10/01/13 ............................. 122,100
------------
570,838
------------
See accompanying Notes to Financial Statements.
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
26 HIGH INCOME FUND--PORTFOLIO OF INVESTMENTS (UNAUDITED)(CONTINUED)
- --------------------------------------------------------------------------------
Value
Par Value (Note 2)
- --------- --------
CORPORATE NOTES AND BONDS (CONTINUED)
CONTAINERS/PACKAGING - 4.96%
$ 209,000 Corp Durango, S.A. de C.V., Series A (C)(D)(E)
13.750%, due 07/15/09 ............................. $ 137,940
250,000 Crown European Holdings S.A. (D)
9.500%, due 03/01/11 .............................. 280,312
295,000 Crown European Holdings S.A. (D)
10.875%, due 03/01/13 ............................. 343,675
195,000 Graham Packaging Co., Inc.
8.750%, due 01/15/08 .............................. 196,463
50,000 Graphic Packaging Corp.
8.500%, due 08/15/11 .............................. 55,250
260,000 Graphic Packaging Corp.
9.500%, due 08/15/13 .............................. 292,500
125,000 Greif, Inc.
8.875%, due 08/01/12 .............................. 137,500
325,000 Jefferson Smurfit Corp.
8.250%, due 10/01/12 .............................. 347,750
170,000 Kappa Beheer BV (D)
10.625%, due 07/15/09 ............................. 178,500
295,000 Owens-Brockway Glass Container, Inc.
8.875%, due 02/15/09 .............................. 320,444
115,000 Owens-Brockway Glass Container, Inc.
8.750%, due 11/15/12 .............................. 125,637
310,000 Owens-Brockway Glass Container, Inc.
8.250%, due 05/15/13 .............................. 320,075
105,000 Plastipak Holdings, Inc.
10.750%, due 09/01/11 ............................. 113,400
95,000 Pliant Corp. (B)(C)
11.125%, due 06/15/09 ............................. 79,325
175,000 Pliant Corp.
13.000%, due 06/01/10 ............................. 158,375
25,000 Portola Packaging. Inc. (C)
8.250%, due 02/01/12 .............................. 21,125
------------
3,108,271
------------
DURABLE GOODS - 2.05%
160,000 ArvinMeritor, Inc.
8.750%, due 03/01/12 .............................. 174,400
240,000 Collins & Aikman Products
10.750%, due 12/31/11 ............................. 248,400
150,000 Dana Corp.
6.500%, due 03/01/09 .............................. 157,500
30,000 Dana Corp.
10.125%, due 03/15/10 ............................. 34,350
60,000 Dana Corp.
9.000%, due 08/15/11 .............................. 70,800
115,000 Kinetek, Inc., Series D
10.750%, due 11/15/06 ............................. 101,775
65,000 Metaldyne Corp.
11.000%, due 06/15/12 ............................. 55,250
100,000 Metaldyne Corp. (C)
10.000%, due 11/01/13 ............................. 97,000
65,000 Rexnord Corp.
10.125%, due 12/15/12 ............................. 70,850
135,000 Tenneco Automotive, Inc., Series B
10.250%, due 07/15/13 ............................. 155,588
100,000 Tenneco Automotive, Inc. (C)
10.250%, due 07/15/13 ............................. 115,250
------------
1,281,163
------------
ENERGY - 11.88%
380,000 AES Corp. (C)
8.750%, due 05/15/13 .............................. 413,250
125,000 AES Corp. (C)
9.000%, due 05/15/15 .............................. 136,250
370,000 Allegheny Energy Supply Co., LLC (C)
8.250%, due 04/15/12 .............................. 370,925
135,000 AmeriGas Partners, L.P./AmeriGas Eagle
Finance Corp., Series B
8.875%, due 05/20/11 .............................. 148,163
160,000 Belden & Blake Corp., Series B
9.875%, due 06/15/07 .............................. 159,600
270,000 Calpine Corp.
8.500%, due 02/15/11 .............................. 189,000
400,000 Calpine Corp. (C)
8.750%, due 07/15/13 .............................. 354,000
170,000 Centerpoint Energy, Inc
7.250%, due 09/01/10 .............................. 181,281
226,000 Centerpoint Energy, Inc.
7.875%, due 04/01/13 .............................. 254,871
325,000 Chesapeake Energy Corp.
8.125%, due 04/01/11 .............................. 355,875
160,000 Citgo Petroleum Corp.
11.375%, due 02/01/11 ............................. 184,800
200,000 CMS Energy Corp.
8.500%, due 04/15/11 .............................. 209,500
100,000 Edison Mission Energy
7.730%, due 06/15/09 .............................. 94,500
235,000 El Paso Corp.
7.000%, due 05/15/11 .............................. 199,750
245,000 El Paso Natural Gas Co., Series A
7.625%, due 08/01/10 .............................. 252,350
195,000 El Paso Production Holding Co.
7.750%, due 06/01/13 .............................. 185,250
170,000 Encore Acquisition Co.
8.375%, due 06/15/12 .............................. 185,300
35,000 Encore Acquisition Co. (C)
6.250%, due 04/15/14 .............................. 34,475
40,000 EXCO Resources, Inc. (C)
7.250%, due 01/15/11 .............................. 40,400
335,000 FirstEnergy Corp., Series B
6.450%, due 11/15/11 .............................. 352,688
160,000 Gaz Capital S.A. (C)(D)
8.625%, due 04/28/34 .............................. 154,400
65,000 Giant Industries, Inc. (H)
8.000%, due 05/15/14 .............................. 65,000
144,000 GulfTerra Energy Partners L.P., Series B
8.500%, due 06/01/10 .............................. 160,560
195,000 Hanover Equipment Trust, Series B (G)
8.750%, due 09/01/11 .............................. 209,625
100,000 Magnum Hunter Resources, Inc.
9.600%, due 03/15/12 .............................. 111,000
100,000 MSW Energy Holdings LLC/MSW Energy
Finance Co., Inc. (C)
7.375%, due 09/01/10 .............................. 103,500
355,000 NRG Energy, Inc. (C)
8.000%, due 12/15/13 .............................. 357,662
100,000 OAO Gazprom (C)(D)
9.625%, due 03/01/13 .............................. 102,750
See accompanying Notes to Financial Statements.
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
- --------------------------------------------------------------------------------
HIGH INCOME FUND--PORTFOLIO OF INVESTMENTS (UNAUDITED)(CONTINUED) 27
- --------------------------------------------------------------------------------
Value
Par Value (Note 2)
- --------- --------
CORPORATE NOTES AND BONDS (CONTINUED)
ENERGY (CONTINUED)
$ 40,000 Parker Drilling Co.
9.625%, due 10/01/13 .............................. $ 43,200
130,000 Peabody Energy Corp., Series B
6.875%, due 03/15/13 .............................. 135,200
150,000 Petroleum Geo-Services ASA
10.000%, due 11/05/10 ............................. 163,500
35,000 PG&E Corp. (C)
6.875%, due 07/15/08 .............................. 37,275
170,000 Pioneer Natural Resources Co.
7.500%, due 04/15/12 .............................. 195,147
170,000 Premcor Refining Group, Inc.
7.750%, due 02/01/12 .............................. 178,075
185,000 Reliant Energy, Inc.
9.250%, due 07/15/10 .............................. 197,950
100,000 Reliant Energy, Inc.
9.500%, due 07/15/13 .............................. 108,500
80,000 SESI LLC
8.875%, due 05/15/11 .............................. 86,600
170,000 Southern Natural Gas Co.
8.875%, due 03/15/10 .............................. 187,850
40,000 Stone Energy Corp.
8.250%, due 12/15/11 .............................. 43,200
85,000 TECO Energy, Inc.
10.500%, due 12/01/07 ............................. 95,625
155,000 TECO Energy, Inc.
7.500%, due 06/15/10 .............................. 158,487
225,000 Vintage Petroleum, Inc.
8.250%, due 05/01/12 .............................. 246,375
------------
7,443,709
------------
FINANCE - 1.62%
146,000 Alamosa, Inc. (B)
12.000%, due 07/31/09 ............................. 137,240
32,500 Alamosa, Inc.
11.000%, due 07/31/10 ............................. 35,262
40,000 Alamosa, Inc. (C)
8.500%, due 01/31/12 .............................. 38,700
110,000 Arch Western Finance LLC (C)
6.750%, due 07/01/13 .............................. 113,300
170,000 Bombardier Recreational Products, Inc. (C)(D)
8.375%, due 12/15/13 .............................. 168,300
25,000 CB Richard Ellis Group, Inc.
9.750%, due 05/15/10 .............................. 27,875
70,000 Eircom Funding (D)
8.250%, due 08/15/13 .............................. 75,600
210,000 JSG Funding PLC (D)
9.625%, due 10/01/12 .............................. 236,250
165,000 PCA LLC/PCA Finance Corp.
11.875%, due 08/01/09 ............................. 184,800
------------
1,017,327
------------
HEALTH CARE SERVICES - 2.96%
235,000 Alliance Imaging, Inc.
10.375%, due 04/15/11 ............................. 235,000
150,000 Beverly Enterprises, Inc.
9.625%, due 04/15/09 .............................. 174,750
100,000 Extendicare Health Services, Inc. (C)
6.875%, due 05/01/14 .............................. 97,250
705,000 HCA, Inc.
7.875%, due 02/01/11 .............................. 778,355
135,000 InSight Health Services Corp., Series B
9.875%, due 11/01/11 .............................. 136,350
190,000 Mariner Health Care, Inc. (C)
8.250%, due 12/15/13 .............................. 191,900
140,000 Tenet Healthcare Corp.
6.500%, due 06/01/12 .............................. 121,450
110,000 Triad Hospitals, Inc., Series B (C)
8.750%, due 05/01/09 .............................. 121,962
------------
1,857,017
------------
INDUSTRIALS - 6.26%
160,000 AMSTED Industries, Inc. (C)
10.250%, due 10/15/11 ............................. 180,800
120,000 BE Aerospace, Inc., Series B
8.875%, due 05/01/11 .............................. 115,800
145,000 Blount, Inc.
7.000%, due 06/15/05 .............................. 150,800
115,000 Blount, Inc.
13.000%, due 08/01/09 ............................. 124,200
45,000 Communications & Power Industries, Inc. (C)
8.000%, due 02/01/12 .............................. 45,900
65,000 Delco Remy International, Inc. (C)
9.375%, due 04/15/12 .............................. 64,188
90,000 Dunlop Standard Aerospace Holdings PLC (C)(D)
11.875%, due 05/15/09 ............................. 95,175
80,000 Eagle-Picher Industries, Inc.
9.750%, due 09/01/13 .............................. 87,600
300,000 Flextronics International, Ltd. (D)
6.500%, due 05/15/13 .............................. 303,750
195,000 General Binding Corp.
9.375%, due 06/01/08 .............................. 198,169
32,500 Grupo Transportacion Ferroviaria
Mexicana, S.A. de C.V. (D)
12.500%, due 06/15/12 ............................. 39,025
75,000 Jacuzzi Brands, Inc.
9.625%, due 07/01/10 .............................. 84,000
50,000 JLG Industies, Inc.
8.250%, due 05/01/08 .............................. 54,250
135,000 Johnsondiversey Holdings, Inc. (B)
10.670%, due 05/15/13 ............................. 102,600
365,000 Johnsondiversey, Inc., Series B
9.625%, due 05/15/12 .............................. 399,675
95,000 Manitowoc Co., Inc.
10.375%, due 05/15/11 ............................. 125,723
95,000 Manitowoc Co., Inc.
10.500%, due 08/01/12 ............................. 108,300
145,000 Muzak LLC/Muzak Finance Corp.
10.000%, due 02/15/09 ............................. 148,625
135,000 Ocean Rig Norway AS (D)
10.250%, due 06/01/08 ............................. 133,650
80,000 Oxford Automotive, Inc. (C)
12.000%, due 10/15/10 ............................. 60,400
120,000 SPX Corp.
7.500%, due 01/01/13 .............................. 126,900
See accompanying Notes to Financial Statements.
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
28 HIGH INCOME FUND--PORTFOLIO OF INVESTMENTS (UNAUDITED)(CONTINUED)
- --------------------------------------------------------------------------------
Value
Par Value (Note 2)
- --------- --------
CORPORATE NOTES AND BONDS (CONTINUED)
INDUSTRIALS (CONTINUED)
$ 100,000 Thermadyne Holdings Corp. (C)
9.250%, due 02/01/14 .............................. $ 101,500
132,000 TRW Automotive, Inc.
9.375%, due 02/15/13 .............................. 151,140
130,000 TRW Automotive, Inc.
11.000%, due 02/15/13 ............................. 154,700
115,000 United Rentals North America, Inc. (C)
6.500%, due 02/15/12 .............................. 110,975
80,000 United Rentals North America, Inc. (C)
7.000%, due 02/15/14 .............................. 74,400
85,000 Valmont Industries, Inc. (C)(H)
6.875%, due 05/01/14 .............................. 85,000
100,000 Werner Holding Co., Inc.
10.000%, due 11/15/07 ............................. 77,500
405,000 Xerox Corp.
7.625%, due 06/15/13 .............................. 413,100
------------
3,917,845
------------
MACHINERY - 1.43%
220,000 AGCO Corp.
9.500%, due 05/01/08 .............................. 240,900
110,000 AGCO Corp.
6.875%, due 04/15/14 .............................. 130,095
95,000 Case New Holland, Inc. (C)
9.250%, due 08/01/11 .............................. 105,925
100,000 Case New Holland, Inc. (C)
9.250%, due 08/01/11 .............................. 111,500
50,000 Columbus McKinnon Corp.
10.000%, due 08/01/10 ............................. 53,000
175,000 Terex Corp., Series B
10.375%, due 04/01/11 ............................. 199,062
50,000 Terex Corp. (C)
7.375%, due 01/15/14 .............................. 52,125
------------
892,607
------------
MEDIA - 7.73%
150,000 Allbritton Communications Co.
7.750%, due 12/15/12 .............................. 153,000
250,000 Cablevision Systems Corp. (C)
8.000%, due 04/15/12 .............................. 250,625
620,000 CSC Holdings, Inc., Series B
8.125%, due 08/15/09 .............................. 663,400
150,000 CSC Holdings, Inc. (C)
6.750%, due 04/15/12 .............................. 148,875
205,000 Dex Media East LLC/Dex Media East Finance Co.
9.875%, due 11/15/09 .............................. 229,856
35,000 Dex Media East LLC/Dex Media East Finance Co.
12.125%, due 11/15/12 ............................. 40,600
20,000 Dex Media West LLC/Dex Media Finance Co. (C)
8.500%, due 08/15/10 .............................. 21,700
240,000 Dex Media West LLC/Dex Media Finance Co. (C)
9.875%, due 08/15/13 .............................. 262,800
70,000 Dex Media, Inc. (C)
8.000%, due 11/15/13 .............................. 67,900
225,000 DirecTV Holdings LLC
8.375%, due 03/15/13 .............................. 251,437
230,000 Emmis Communications Corp. (B)
12.500%, due 03/15/11 ............................. 230,000
130,000 Emmis Operating Co. (C)(H)
6.875%, due 05/15/12 .............................. 129,675
285,000 Lamar Media Corp.
7.250%, due 01/01/13 .............................. 306,375
200,000 Lighthouse International Co. S.A. (C)(F)
8.000%, due 04/30/14 .............................. 241,925
285,000 MediaCom Broadband LLC
11.000%, due 07/15/13 ............................. 304,950
170,000 Medianews Group, Inc. (C)
6.875%, due 10/01/13 .............................. 168,300
140,000 PRIMEDIA, Inc.
8.875%, due 05/15/11 .............................. 142,450
50,000 PRIMEDIA, Inc. (C)
8.000%, due 05/15/13 .............................. 49,375
140,000 R. H. Donnelley Finance Corp. I
10.875%, due 12/15/12 ............................. 166,600
60,000 Radio One, Inc., Series B
8.875%, due 07/01/11 .............................. 66,450
280,000 Spanish Broadcasting Systems, Inc.
9.625%, due 11/01/09 .............................. 296,100
95,000 Vivendi Universal S.A., Series B (D)
9.250%, due 04/15/10 .............................. 110,913
50,000 Warner Music Group (C)
7.375%, due 04/15/14 .............................. 50,250
90,000 XM Satellite Radio, Inc. (C)
6.650%, due 05/01/09 .............................. 90,900
30,392 XM Satellite Radio, Inc. (B)
14.000%, due 12/31/09 ............................. 29,252
144,000 XM Satellite Radio, Inc.
12.000%, due 06/15/10 ............................. 166,500
185,000 Young Broadcasting, Inc.
8.500%, due 12/15/08 .............................. 198,413
------------
4,838,621
------------
METALS AND MINING - 1.26%
85,000 Commonwealth Industries, Inc.
10.750%, due 10/01/06 ............................. 85,425
40,981 Doe Run Resources Corp., Series AI (E)(J)
14.500%, due 11/01/08 PIK ......................... 22,539
95,000 Earle M. Jorgensen Co.
9.750%, due 06/01/12 .............................. 106,400
255,000 Kaiser Aluminum & Chemical Corp. (E)
9.875%, due 02/15/49 .............................. 247,350
25,000 Oregon Steel Mills, Inc.
10.000%, due 07/15/09 ............................. 25,875
140,000 Russel Metals, Inc. (C)(D)
6.375%, due 03/01/14 .............................. 138,250
60,000 SGL Carbon Luxembourg S.A. (C)(F)
8.500%, due 02/01/12 .............................. 74,015
85,000 TriMas Corp.
9.875%, due 06/15/12 .............................. 91,800
------------
791,654
------------
See accompanying Notes to Financial Statements.
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
- --------------------------------------------------------------------------------
HIGH INCOME FUND--PORTFOLIO OF INVESTMENTS (UNAUDITED)(CONTINUED) 29
- --------------------------------------------------------------------------------
Value
Par Value (Note 2)
- --------- --------
CORPORATE NOTES AND BONDS (CONTINUED)
PIPELINE - 2.62%
$ 40,000 ANR Pipeline, Co.
8.875%, due 03/15/10 .............................. $ 44,200
135,000 ANR Pipeline, Co.
9.625%, due 11/01/21 .............................. 153,225
175,000 Dynegy Holdings, Inc. (C)
9.875%, due 07/15/10 .............................. 189,875
220,000 Dynegy Holdings, Inc.
6.875%, due 04/01/11 .............................. 188,100
60,000 Williams Cos., Inc.
8.625%, due 06/01/10 .............................. 66,000
955,000 Williams Cos., Inc.
7.125%, due 09/01/11 .............................. 997,975
------------
1,639,375
------------
PRINTING - 0.76%
125,000 Hollinger International Publishing, Inc.
9.000%, due 12/15/10 .............................. 138,750
65,000 Hollinger, Inc. (C)(D)
11.875%, due 03/01/11 ............................. 76,050
50,000 Houghton Mifflin Co.
9.875%, due 02/01/13 .............................. 49,375
75,000 Mail-Well I Corp.
9.625%, due 03/15/12 .............................. 82,500
135,000 Mail-Well I Corp. (C)
7.875%, due 12/01/13 .............................. 127,575
------------
474,250
------------
REITS - 0.02%
10,000 Host Marriott L.P., Series I
9.500%, due 01/15/07 .............................. 11,100
------------
RECREATION - 6.35%
122,000 AMC Entertainment, Inc.
9.500%, due 02/01/11 .............................. 127,490
55,000 Ameristar Casinos, Inc.
10.750%, due 02/15/09 ............................. 63,800
95,000 AMF Bowling Worldwide, Inc. (C)
10.000%, due 03/01/10 ............................. 98,563
60,000 Aztar Corp.
9.000%, due 08/15/11 .............................. 67,350
220,000 Boyd Gaming Corp. (C)
6.750%, due 04/15/14 .............................. 216,700
140,000 Caesars Entertainment, Inc.
8.875%, due 09/15/08 .............................. 156,100
290,000 Caesars Entertainment, Inc.
8.125%, due 05/15/11 .............................. 320,450
470,000 Hilton Hotels Corp.
7.625%, due 12/01/12 .............................. 525,225
185,000 Isle of Capri Casinos, Inc. (C)
7.000%, due 03/01/14 .............................. 181,300
140,000 Mandalay Resort Group
9.375%, due 02/15/10 .............................. 162,400
160,000 MGM Mirage, Inc.
8.500%, due 09/15/10 .............................. 180,400
160,000 MGM Mirage, Inc.
8.375%, due 02/01/11 .............................. 176,800
8,000 Pinnacle Entertainment, Inc., Series B
9.250%, due 02/15/07 .............................. 8,200
130,000 Pinnacle Entertainment, Inc. (C)
8.250%, due 03/15/12 .............................. 125,125
150,000 Pinnacle Entertainment, Inc., Series B
8.750%, due 10/01/13 .............................. 151,500
135,000 Regal Cinemas, Inc., Series B
9.375%, due 02/01/12 .............................. 159,975
165,000 Royal Caribbean Cruises, Ltd.
6.875%, due 12/01/13 .............................. 165,413
310,000 Six Flags, Inc.
9.750%, due 04/15/13 .............................. 326,662
160,000 Starwood Hotels & Resorts Worldwide, Inc. (G)
7.875%, due 05/01/12 .............................. 175,000
205,000 Station Casinos, Inc. (C)
6.500%, due 02/01/14 .............................. 201,925
200,000 Vail Resorts, Inc. (C)
6.750%, due 02/15/14 .............................. 196,000
165,000 Venetian Casino Resort LLC
11.000%, due 06/15/10 ............................. 193,050
------------
3,979,428
------------
RETAIL - 3.34%
180,000 Cole National Group, Inc.
8.875%, due 05/15/12 .............................. 194,400
360,000 Couche Tard US L.P.
7.500%, due 12/15/13 .............................. 378,000
120,000 Dollar General Corp.
8.625%, due 06/15/10 .............................. 136,500
75,000 Finlay Fine Jewelry Corp.
8.375%, due 05/01/08 .............................. 77,156
180,000 J Crew Operating Corp.
10.375%, due 10/15/07 ............................. 180,225
40,000 Jitney-Jungle Stores of America, Inc. (E)
12.000%, due 03/01/06 ............................. 4
10,000 Jitney-Jungle Stores of America, Inc. (E)
10.375%, due 09/15/07 ............................. 1
155,000 Remington Arms Co., Inc.
10.500%, due 02/01/11 ............................. 154,225
60,000 Rite Aid Corp.
9.500%, due 02/15/11 .............................. 67,350
385,000 Rite Aid Corp.
9.250%, due 06/01/13 .............................. 408,100
300,000 Saks, Inc. (C)
7.000%, due 12/01/13 .............................. 306,000
155,000 Williams Scotsman, Inc.
9.875%, due 06/01/07 .............................. 154,225
35,000 Williams Scotsman, Inc.
10.000%, due 08/15/08 ............................. 38,325
------------
2,094,511
------------
SCHOOLS - 0.32%
199,000 KinderCare Learning Centers, Inc., Series B
9.500%, due 02/15/09 .............................. 202,150
------------
TECHNOLOGY - 1.17%
175,000 Amkor Technology, Inc.
7.750%, due 05/15/13 .............................. 172,375
125,000 Argo-Tech Corp., Series D
8.625%, due 10/01/07 .............................. 125,000
80,000 BE Aerospace, Inc.
9.500%, due 11/01/08 .............................. 80,000
See accompanying Notes to Financial Statements.
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
30 HIGH INCOME FUND--PORTFOLIO OF INVESTMENTS (UNAUDITED)(CONTINUED)
- --------------------------------------------------------------------------------
Value
Par Value (Note 2)
- --------- --------
CORPORATE NOTES AND BONDS (CONTINUED)
TECHNOLOGY (CONTINUED)
$ 243,000 Fisher Scientific International, Inc.
8.125%, due 05/01/12 .............................. $ 263,655
35,000 NDC Health Corp.
10.500%, due 12/01/12 ............................. 39,025
45,000 ON Semiconductor Corp.
13.000%, due 05/15/08 ............................. 54,225
------------
734,280
------------
TELECOMMUNICATIONS - 6.63%
15,755 Avalon Cable Holding Finance, Inc. (B)
11.875%, due 12/01/08 ............................. 16,740
220,000 Centennial Cellular Corp Operating Co./
Centennial Communications Corp. LLC
10.125%, due 06/15/13 ............................. 226,600
222,000 Citizens Communications Co.
9.000%, due 08/15/31 .............................. 217,925
160,000 Colt Telecom Group PLC (D)
7.625%, due 12/15/09 .............................. 194,498
175,000 Crown Castle International Corp.
7.500%, due 12/01/13 .............................. 174,563
220,000 Dobson Communications Corp.
8.875%, due 10/01/13 .............................. 172,150
400,000 EchoStar DBS Corp.
6.375%, due 10/01/11 .............................. 404,500
180,000 GCI, Inc. (C)
7.250%, due 02/15/14 .............................. 174,600
285,000 Granite Broadcasting Corp. (C)
9.750%, due 12/01/10 .............................. 279,300
150,000 Innova S de RL de CV (D)
9.375%, due 09/19/13 .............................. 162,938
180,000 Insight Midwest L.P./Insight Capital, Inc.
9.750%, due 10/01/09 .............................. 189,900
445,000 Lucent Technologies, Inc.
5.500%, due 11/15/08 .............................. 422,750
25,520 MCI, Inc.
5.908%, due 05/01/07 .............................. 25,232
25,520 MCI, Inc.
6.688%, due 05/01/09 .............................. 24,244
21,874 MCI, Inc.
7.735%, due 05/01/14 .............................. 20,288
165,000 Millicom International Cellular S.A. (C)(D)
10.000%, due 12/01/13 ............................. 169,125
180,000 Nortel Networks, Ltd.
6.125%, due 02/15/06 .............................. 177,975
15,000 NTL Cable PLC (C)(D)
8.750%, due 04/15/14 .............................. 15,488
110,000 Paxson Communications Corp.
10.750%, due 07/15/08 ............................. 116,050
165,000 Paxson Communications Corp. (B)
12.250%, due 01/15/09 ............................. 143,137
100,000 Rogers Wireless Communications, Inc. (C)
6.375%, due 03/01/14 .............................. 94,000
52,000 Rural Cellular Corp.
9.750%, due 01/15/10 .............................. 48,620
200,000 Rural Cellular Corp.
9.875%, due 02/01/10 .............................. 205,500
40,000 Rural Cellular Corp. (C)
8.250%, due 03/15/12 .............................. 41,300
145,000 Time Warner Telecom Holdings, Inc. (C)
9.250%, due 02/15/14 .............................. 134,850
145,000 Time Warner Telecom, Inc.
10.125%, due 02/01/11 ............................. 121,075
175,000 Western Wireless Corp.
9.250%, due 07/15/13 .............................. 179,812
------------
4,153,160
------------
TRANSPORTATION - 0.92%
110,000 CHC Helicopter Corp. (C)
7.375%, due 05/01/14 .............................. 111,375
150,000 GulfMark Offshore, Inc.
8.750%, due 06/01/08 .............................. 154,125
235,000 Kansas City Southern Railway Co.
7.500%, due 06/15/09 .............................. 242,050
60,000 Stena AB (D)
9.625%, due 12/01/12 .............................. 67,500
------------
575,050
------------
UTILITIES - 1.96%
150,000 Empresa Nacional de Electricidad S.A. (D)
8.350%, due 08/01/13 .............................. 160,944
75,000 Illinois Power Co.
11.500%, due 12/15/10 ............................. 88,875
230,000 Midwest Generation LLC (C)
8.750%, due 05/01/34 .............................. 228,850
200,000 Mirant Americas Generation LLC (E)
8.300%, due 05/01/11 .............................. 145,000
120,000 Mission Energy Holding Co.
13.500%, due 07/15/08 ............................. 131,700
35,000 Nevada Power Co. (C)
6.500%, due 04/15/12 .............................. 34,738
250,000 PSEG Energy Holdings, Inc.
8.625%, due 02/15/08 .............................. 268,750
60,000 Sierra Pacific Power Co. (C)
6.250%, due 04/15/12 .............................. 58,950
110,000 Sierra Pacific Resources (C)
8.625%, due 03/15/14 .............................. 111,100
------------
1,228,907
------------
WASTE DISPOSAL - 1.61%
265,000 Allied Waste Industries, Inc., Series B
8.875%, due 04/01/08 .............................. 294,150
360,000 Allied Waste Industries, Inc. (C)
6.500%, due 11/15/10 .............................. 360,000
330,000 Allied Waste Industries, Inc.
7.875%, due 04/15/13 .............................. 354,750
------------
1,008,900
------------
TOTAL CORPORATE NOTES AND BONDS ................... 55,981,764
( Cost $54,399,875 ) ------------
See accompanying Notes to Financial Statements.
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
- --------------------------------------------------------------------------------
HIGH INCOME FUND--PORTFOLIO OF INVESTMENTS (UNAUDITED)(CONTINUED) 31
- --------------------------------------------------------------------------------
Value
Shares (Note 2)
------ --------
COMMON STOCKS - 0.77%
CHEMICALS AND DRUGS - 0.00%
43 Sterling Chemicals, Inc. * ........................ $ 1,102
------------
COMMUNICATION - 0.10%
20 Allstream, Inc., Class A * ........................ 1,080
1,080 Allstream, Inc., Class B * ........................ 58,116
------------
59,196
------------
INDUSTRIALS - 0.11%
3,315 Hayes Lemmerz International, Inc. * ............... 47,835
16 Oxford Automotive, Inc. * ......................... 0
1,602 Thermadyne Holdings Corp. * ....................... 23,870
------------
71,705
------------
TELECOMMUNICATIONS - 0.36%
625 Completel Europe N.V. * ........................... 23,938
448 ITC DeltaCom, Inc. * .............................. 2,657
30,063 Jazztel PLC * ..................................... 11,882
9,533 MCI, Inc. * ....................................... 135,179
921 NTL, Inc. * ....................................... 52,285
480 Versatel Telecom International N.V. * ............. 1,029
------------
226,970
------------
UTILITIES - 0.20%
7,046 DPL, Inc. ......................................... 124,151
------------
TOTAL COMMON STOCKS ............................... 483,124
( Cost $708,631 ) ------------
PREFERRED STOCKS - 0.29%
INDUSTRIALS - 0.00%
11 HLI Operating Co., Inc. ........................... 913
------------
MEDIA - 0.29%
607 Cablevision Systems Corp., Series M ............... 63,431
1,350 PRIMEDIA, Inc. .................................... 117,450
1 PTV, Inc. ......................................... 8
------------
180,889
------------
TOTAL PREFERRED STOCKS ............................ 181,802
( Cost $186,418 ) ------------
WARRANTS AND RIGHTS - 0.01%
CHEMICALS AND DRUGS - 0.00%
2 Sterling Chemicals, Inc., Exp. 12/19/08 * ......... 1
------------
COMMUNICATION - 0.00%
175 GT Group Telecom, Inc., Exp. 02/01/10 (C) * ..... 44
------------
FINANCE - 0.00%
150 Ono Finance PLC, Series A, Exp. 05/31/09 (C) * .. 0
45 Ono Finance PLC, Exp. 02/15/11 (C) * ............ 1
------------
1
------------
INDUSTRIALS - 0.00%
447 Thermadyne Holdings Corp., Class A,
Exp. 05/23/04 * ................................. 603
270 Thermadyne Holdings Corp., Class B,
Exp. 05/23/06 * ................................. 486
------------
1,089
------------
TELECOMMUNICATIONS - 0.01%
55 XM Satellite Radio Holdings, Inc.,
Exp. 03/03/10 * ................................. 2,035
------------
TOTAL WARRANTS AND RIGHTS ....................... 3,170
( Cost $16,058 ) ------------
Par Value
---------
FOREIGN GOVERNMENT AND AGENCY OBLIGATIONS - 0.63%
BRAZIL - 0.29%
$ 196,000 Federal Republic of Brazil (D)
11.000%, due 08/17/40 ............................. 182,280
------------
PANAMA - 0.19%
111,000 Panama Government International Bond (D)
9.375%, due 01/16/23 .............................. 116,273
------------
RUSSIA - 0.15%
65,000 Russia Government International Bond (D)
12.750%, due 06/24/28 ............................. 96,038
------------
TOTAL FOREIGN GOVERNMENT AND AGENCY
OBLIGATIONS ....................................... 394,591
( Cost $442,686 ) ------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS (A) - 4.93%
STUDENT LOAN MARKETING ASSOCIATION - 4.93%
3,091,000 0.900%, due 05/03/04 .............................. 3,090,845
------------
TOTAL U.S. GOVERNMENT AND AGENCY
OBLIGATIONS ....................................... 3,090,845
( Cost $3,090,845 ) ------------
See accompanying Notes to Financial Statements.
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
32 HIGH INCOME FUND--PORTFOLIO OF INVESTMENTS (UNAUDITED)(CONTINUED)
- --------------------------------------------------------------------------------
Value
Shares (Note 2)
------ --------
INVESTMENT COMPANIES - 17.52%
20 SSgA Prime Money Market Fund ...................... $ 20
10,971,565 State Street Navigator Securities
Lending Prime Portfolio (I) ....................... 10,971,565
------------
TOTAL INVESTMENT COMPANIES ........................ 10,971,585
( Cost $10,971,585 ) ------------
TOTAL INVESTMENTS - 114.77% ..................................... 71,883,726
( Cost $70,552,864** ) ------------
NET OTHER ASSETS AND LIABILITIES - (14.77)% ..................... (9,250,502)
------------
TOTAL NET ASSETS - 100.00% ...................................... $ 62,633,224
============
* Non-income producing.
** Aggregate cost for Federal tax purposes was $70,644,009.
(A) Rate noted represents annualized yield at time of purchase.
(B) Represents security that remains a specified coupon until a predetermined
date, at which time the stated rate becomes the effective rate.
(C) Security sold within the terms of a private placement memorandum exempt
from registration under section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or other
"qualified institutional investors." The securities have been determined to
be liquid under guidelines established by the Board of Trustees.
(D) Notes and bonds, issued by foreign entities, denominated in U.S. dollars.
The aggregate of these securities are 8.28% of total net assets.
(E) In Default.
(F) Notes and bonds, issued by foreign entities, denominated in their local
currencies and converted to U.S. dollars at period end exchange rates. The
aggregate of these securities are 1.00% of total net assets.
(G) Floating rate or variable rate note.
(H) Security purchased on a delayed delivery or when-issued basis.
(I) Represents collateral held in connection with securities lending.
(J) Represents a private placement security.
ADR American Depository Receipt.
PIK Payment-In-Kind.
PLC Public Limited Company.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Appreciation/
Currency Settlement Date Local Amount Face Amount Value (Depreciation)
- -------- --------------- ------------ ----------- ----- --------------
Euro (sell) 06/16/04 26,631 $ 32,357 $ 31,854 $ 503
Euro (sell) 06/16/04 31,089 $ 37,773 $ 37,185 $ 588
Euro (sell) 06/16/04 13,357 $ 16,545 $ 15,977 $ 568
Euro (sell) 06/16/04 17,970 $ 22,031 $ 21,494 $ 537
Euro (buy) 06/16/04 68,849 $ 84,289 $ 82,350 $(1,939)
Euro (sell) 06/16/04 13,385 $ 16,343 $ 16,010 $ 333
Euro (sell) 06/16/04 514,764 $625,953 $615,708 $10,245
Euro (sell) 06/16/04 13,352 $ 16,343 $ 15,970 $ 373
Euro (sell) 06/16/04 13,447 $ 16,415 $ 16,084 $ 331
Euro (sell) 06/16/04 13,881 $ 16,754 $ 16,603 $ 151
Euro (sell) 06/16/04 205,000 $247,230 $245,200 $ 2,030
Euro (sell) 06/16/04 110,000 $131,065 $131,571 $ (506)
Euro (buy) 06/16/04 7,671 $ 9,093 $ 9,176 $ 83
Euro (buy) 06/16/04 16,874 $ 19,962 $ 20,183 $ 221
-------
$13,518
=======
See accompanying Notes to Financial Statements.
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
- --------------------------------------------------------------------------------
BALANCED FUND--PORTFOLIO OF INVESTMENTS (UNAUDITED) 33
- --------------------------------------------------------------------------------
Value
Shares (Note 2)
------ --------
COMMON STOCKS - 58.89%
CONSUMER DISCRETIONARY - 6.56%
49,900 Carnival Corp. .................................... $ 2,129,233
18,434 Comcast Corp., Class A * .......................... 554,863
39,700 Cox Communications, Inc., Class A * ............... 1,297,793
40,000 Home Depot, Inc. .................................. 1,407,600
62,400 McDonald's Corp. .................................. 1,699,152
69,700 Target Corp. ...................................... 3,022,889
23,700 Tiffany & Co. ..................................... 924,300
15,300 Viacom, Inc., Class B ............................. 591,345
60,100 Walt Disney Co. ................................... 1,384,103
------------
13,011,278
------------
CONSUMER STAPLES - 6.64%
36,800 Coca-Cola Co. ..................................... 1,860,976
56,100 CVS Corp. ......................................... 2,167,143
34,900 General Mills, Inc. ............................... 1,701,375
37,900 Kimberly-Clark Corp. .............................. 2,480,555
9,800 Procter & Gamble Co. .............................. 1,036,350
81,400 Sara Lee Corp. .................................... 1,878,712
35,900 Wal-Mart Stores, Inc. ............................. 2,046,300
------------
13,171,411
------------
ENERGY - 4.46%
17,200 Anadarko Petroleum Corp. .......................... 921,576
25,264 BP PLC, ADR ....................................... 1,336,466
20,500 Devon Energy Corp. ................................ 1,254,600
42,500 Exxon Mobil Corp. ................................. 1,808,375
11,900 Kerr-McGee Corp. .................................. 582,267
33,400 Marathon Oil Corp. ................................ 1,120,904
25,100 Schlumberger, Ltd. ................................ 1,469,103
13,016 Transocean, Inc. * ................................ 361,454
------------
8,854,745
------------
FINANCIALS - 12.32%
21,000 ACE, Ltd. ......................................... 920,640
47,000 Allstate Corp. .................................... 2,157,300
27,000 American International Group, Inc. ................ 1,934,550
41,696 Bank of America Corp. ............................. 3,356,111
33,690 Bank One Corp. .................................... 1,663,275
9,000 Chubb Corp. ....................................... 621,000
80,000 Citigroup, Inc. ................................... 3,847,200
10,000 Goldman Sachs Group, Inc. ......................... 967,500
25,000 Marsh & McLennan Cos., Inc. ....................... 1,127,500
28,000 Morgan Stanley .................................... 1,438,920
33,000 National City Corp. ............................... 1,144,110
50,000 Prudential Financial, Inc. ........................ 2,197,000
16,100 SunTrust Banks, Inc. .............................. 1,095,605
34,800 Wells Fargo & Co. ................................. 1,964,808
------------
24,435,519
------------
HEALTH CARE - 7.23%
35,000 Abbott Laboratories ............................... 1,540,700
42,300 Applera Corp. - Applied Biosystems Group .......... 785,511
44,500 Baxter International, Inc. ........................ 1,408,425
57,800 Bristol-Myers Squibb Co. .......................... 1,450,780
10,800 Genzyme Corp. * ................................... 470,448
39,600 GlaxoSmithKline PLC, ADR .......................... 1,663,200
76,500 IMS Health, Inc. .................................. 1,931,625
18,300 MedImmune, Inc. * ................................. 443,592
85,962 Pfizer, Inc. ...................................... 3,074,001
41,400 Wyeth ............................................. 1,576,098
------------
14,344,380
------------
INDUSTRIALS - 6.94%
32,000 Burlington Northern Santa Fe Corp. ................ 1,046,400
31,000 Dover Corp. ....................................... 1,240,930
18,000 Emerson Electric Co. .............................. 1,083,960
15,000 FedEx Corp. ....................................... 1,078,650
76,000 General Electric Co. .............................. 2,276,200
47,000 Honeywell International, Inc. ..................... 1,625,260
16,000 Illinois Tool Works, Inc. ......................... 1,379,360
23,000 Textron, Inc. ..................................... 1,269,140
18,000 United Technologies Corp. ......................... 1,552,680
43,000 Waste Management, Inc. ............................ 1,221,200
------------
13,773,780
------------
INFORMATION TECHNOLOGY - 9.61%
87,800 ADC Telecommunications, Inc. * .................... 219,500
39,000 Applied Materials, Inc. * ......................... 710,970
61,600 Autodesk, Inc. .................................... 2,063,600
38,400 Celestica, Inc. * ................................. 675,072
50,900 Cisco Systems, Inc. * ............................. 1,062,283
33,200 Computer Sciences Corp. * ......................... 1,358,212
17,600 Dell, Inc. * ...................................... 610,896
37,800 EMC Corp. * ....................................... 421,848
27,265 First Data Corp. .................................. 1,237,559
50,200 Hewlett-Packard Co. ............................... 988,940
21,600 Intel Corp. ....................................... 555,768
23,900 International Business Machines Corp. ............. 2,107,263
30,238 Koninklijke Philips Electronics N.V., ADR ......... 810,681
37,400 Micron Technology, Inc. * ......................... 509,388
69,200 Microsoft Corp. ................................... 1,797,124
77,700 Motorola, Inc. .................................... 1,418,025
56,000 PeopleSoft, Inc. * ................................ 945,280
47,900 Texas Instruments, Inc. ........................... 1,202,290
14,196 VERITAS Software Corp. * .......................... 378,607
------------
19,073,306
------------
MATERIALS - 1.61%
23,500 Alcoa, Inc. ....................................... 722,625
26,000 E.I. du Pont de Nemours & Co. ..................... 1,116,700
35,000 Rohm and Haas Co. ................................. 1,357,300
------------
3,196,625
------------
TELECOMMUNICATION SERVICES - 2.21%
27,000 ALLTEL Corp. ...................................... 1,359,180
74,000 SBC Communications, Inc. .......................... 1,842,600
31,020 Verizon Communications, Inc. ...................... 1,170,695
------------
4,372,475
------------
UTILITIES - 1.31%
12,000 Ameren Corp. ...................................... 524,640
6,000 Consolidated Edison, Inc. ......................... 247,260
18,000 FPL Group, Inc. ................................... 1,145,160
16,000 Progress Energy, Inc. ............................. 684,320
------------
2,601,380
------------
TOTAL COMMON STOCKS ............................... 116,834,899
( Cost $110,069,415 ) ------------
See accompanying Notes to Financial Statements.
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
34 BALANCED FUND--PORTFOLIO OF INVESTMENTS (UNAUDITED)(CONTINUED)
- --------------------------------------------------------------------------------
Value
Par Value (Note 2)
- --------- --------
ASSET BACKED - 1.29%
$ 764,371 ABSC Long Beach Home Equity Loan Trust,
Series 2000-LB1, Class AF5 (G)
8.050%, due 09/21/30 .............................. $ 817,593
500,000 ABSC Manufactured Housing Contract, (C)
Series 2004-OK1, Class A4
5.020%, due 04/16/30 .............................. 410,000
320,000 GMAC Home Equity Loan Trust, Series
2004-HE2, Class M1
3.950%, due 10/25/33 .............................. 308,600
485,314 Green Tree Financial Corp., Series
1996-1, Class M1
7.000%, due 03/15/27 .............................. 475,608
500,000 Green Tree Home Equity Loan Trust,
Series 1999-A, Class B1
8.970%, due 11/15/27 .............................. 552,694
------------
TOTAL ASSET BACKED ................................ 2,564,495
( Cost $2,561,503 ) ------------
COMMERCIAL MORTGAGE BACKED - 1.35%
500,000 Ameriquest Mortgage Co., Series
2004-FR1, Class M2
5.207%, due 05/25/34 .............................. 492,500
400,000 Greenwich Capital Commercial Funding
Corp., Series 2004-GG1A, Class A7
5.317%, due 06/10/36 .............................. 401,983
1,196,095 Morgan Stanley Capital I, Inc., Series
1999-CAM1, Class A3
6.920%, due 03/15/32 .............................. 1,290,155
500,000 Residential Asset Mortgage Products, Inc.,
Series 2003-RS9, Class AI5
4.990%, due 03/25/31 .............................. 495,619
------------
TOTAL COMMERCIAL MORTGAGE BACKED .................. 2,680,257
( Cost $2,625,409 ) ------------
PRIVATE LABEL MORTGAGE BACKED - 0.88%
1,700,000 Countrywide Alternative Loan Trust,
Series 2002-5, Class A10
6.750%, due 06/25/32 .............................. 1,742,712
------------
TOTAL PRIVATE LABEL MORTGAGE BACKED ............... 1,742,712
( Cost $1,725,563 ) ------------
CORPORATE NOTES AND BONDS - 10.45%
CABLE - 0.39%
350,000 Comcast Cable Communications, Inc.
6.875%, due 06/15/09 .............................. 385,310
400,000 Comcast Corp.
5.300%, due 01/15/14 .............................. 390,468
------------
775,778
------------
CAPITAL GOODS - 0.26%
500,000 United Technologies Corp.
6.625%, due 11/15/04 .............................. 513,273
------------
CONSUMER DISCRETIONARY - 0.25%
500,000 Carnival Corp. (C)
3.750%, due 11/15/07 .............................. 498,474
------------
CONSUMER STAPLES - 0.20%
400,000 Safeway, Inc.
4.125%, due 11/01/08 .............................. 395,478
------------
ENERGY - 1.21%
300,000 Centerpoint Energy, Inc.
7.875%, due 04/01/13 .............................. 338,325
500,000 ConocoPhillips
8.500%, due 05/25/05 .............................. 533,756
500,000 Occidental Petroleum Corp.
5.875%, due 01/15/07 .............................. 533,215
500,000 Pemex Project Funding Master Trust
7.375%, due 12/15/14 .............................. 522,500
450,000 Texaco Capital, Inc.
5.700%, due 12/01/08 .............................. 470,453
------------
2,398,249
------------
FINANCE - 2.17%
750,000 American Association of Retired Persons (C)
7.500%, due 05/01/31 .............................. 852,179
500,000 American General Finance Corp.
4.625%, due 09/01/10 .............................. 500,143
500,000 Bear Stearns Cos., Inc.
7.800%, due 08/15/07 .............................. 563,518
500,000 CIT Group, Inc.
7.375%, due 04/02/07 .............................. 554,872
250,000 Household Finance Corp.
6.500%, due 11/15/08 .............................. 274,573
500,000 Merrill Lynch & Co., Inc.
7.375%, due 05/15/06 .............................. 546,884
500,000 U.S. Bank N.A.
6.300%, due 02/04/14 .............................. 542,853
500,000 Wells Fargo & Co.
3.125%, due 04/01/09 .............................. 477,678
------------
4,312,700
------------
INDUSTRIALS - 1.87%
500,000 Caterpillar Financial Services Corp.
2.500%, due 10/03/06 .............................. 494,668
350,000 Ford Motor Credit Co.
7.600%, due 08/01/05 .............................. 369,837
500,000 Ford Motor Credit Co.
5.800%, due 01/12/09 .............................. 509,257
350,000 GE Global Insurance Holding Corp.
7.000%, due 02/15/26 .............................. 374,872
1,000,000 General Motors Acceptance Corp.
6.125%, due 08/28/07 .............................. 1,056,708
500,000 General Motors Acceptance Corp.
6.875%, due 09/15/11 .............................. 524,806
350,000 Waste Management, Inc.
6.875%, due 05/15/09 .............................. 387,369
------------
3,717,517
------------
PIPELINE - 0.34%
650,000 Kinder Morgan, Inc.
6.650%, due 03/01/05 .............................. 674,868
------------
See accompanying Notes to Financial Statements.
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
- --------------------------------------------------------------------------------
BALANCED FUND--PORTFOLIO OF INVESTMENTS (UNAUDITED)(CONTINUED) 35
- --------------------------------------------------------------------------------
Value
Par Value (Note 2)
- --------- --------
TELECOMMUNICATIONS - 1.39%
$ 500,000 Bellsouth Capital Funding Corp.
7.875%, due 02/15/30 .............................. $ 586,622
750,000 SBC Communications, Inc.
5.875%, due 08/15/12 .............................. 782,559
250,000 Sprint Capital Corp.
7.125%, due 01/30/06 .............................. 268,183
537,000 Telephone & Data Systems, Inc.
7.000%, due 08/01/06 .............................. 581,725
500,000 Verizon Wireless Capital LLC
5.375%, due 12/15/06 .............................. 527,608
------------
2,746,697
------------
TRANSPORTATION - 0.60%
600,000 Burlington Northern Santa Fe Corp.
6.375%, due 12/15/05 .............................. 636,486
500,000 Norfolk Southern Corp.
7.250%, due 02/15/31 .............................. 553,497
------------
1,189,983
------------
UTILITIES - 1.77%
500,000 DTE Energy Co.
6.450%, due 06/01/06 .............................. 531,178
500,000 Energy East Corp.
8.050%, due 11/15/10 .............................. 589,461
750,000 Niagara Mohawk Power Co.
7.750%, due 05/15/06 .............................. 820,908
350,000 Progress Energy, Inc.
7.750%, due 03/01/31 .............................. 399,666
350,000 Virginia Electric and Power Co., Series A
5.750%, due 03/31/06 .............................. 369,192
750,000 Wisconsin Electric Power Co.
6.500%, due 06/01/28 .............................. 789,315
------------
3,499,720
------------
TOTAL CORPORATE NOTES AND BONDS ................... 20,722,737
( Cost $19,885,926 ) ------------
MORTGAGE BACKED - 12.14%
FEDERAL HOME LOAN MORTGAGE CORP.- 2.13%
1,149,412 7.000%, due 07/15/27 Series 1974 Class ZA ......... 1,210,751
42,514 8.000%, due 06/01/30 Pool # C01005 ................ 45,935
607,994 6.500%, due 01/01/32 Pool # C62333 ................ 633,177
2,407,448 5.000%, due 07/01/33 Pool # A11325 ................ 2,335,868
------------
4,225,731
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 8.99%
815,052 6.100%, due 04/01/11 Pool # 383475 ................ 882,656
213,402 6.000%, due 05/01/16 Pool # 582558 ................ 222,714
1,467,988 5.000%, due 12/01/17 Pool # 672243 ................ 1,479,087
1,535,018 4.500%, due 09/01/18 Pool # 737144 ................ 1,512,874
322,693 6.000%, due 05/01/21 Pool # 253847 ................ 332,246
321,339 7.000%, due 11/01/31 Pool # 607515 ................ 339,692
203,177 6.000%, due 02/01/32 Pool # 611619 ................ 207,894
212,707 7.000%, due 05/01/32 Pool # 644591 ................ 224,855
1,479,100 6.500%, due 06/01/32 Pool # 545691 ................ 1,539,795
1,817,086 6.000%, due 08/01/33 Pool # 729413 ................ 1,859,686
1,868,769 6.000%, due 08/01/33 Pool # 729418 ................ 1,912,580
1,310,265 5.500%, due 10/01/33 Pool # 254904 ................ 1,308,230
3,785,029 5.500%, due 11/01/33 Pool # 555880 ................ 3,779,153
2,300,000 5.000%, due 05/01/34 TBA (H) ...................... 2,228,125
------------
17,829,587
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 1.02%
29,938 8.000%, due 10/20/15 Pool # 002995 ................ 31,700
267,091 6.500%, due 02/20/29 Pool # 002714 ................ 278,544
61,857 7.500%, due 05/20/30 Pool # 002921 ................ 66,292
63,889 7.500%, due 08/20/30 Pool # 002957 ................ 68,470
255,772 6.500%, due 04/20/31 Pool # 003068 ................ 266,592
1,300,000 6.000%, due 07/20/32 Series 2002-50, Class PE ..... 1,321,345
------------
2,032,943
------------
TOTAL MORTGAGE BACKED ............................. 24,088,261
( Cost $24,050,146 ) ------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 11.70%
FEDERAL FARM CREDIT BANK - 1.09%
1,000,000 6.125%, due 12/29/15 .............................. 1,094,059
1,000,000 5.875%, due 10/03/16 .............................. 1,075,917
------------
2,169,976
------------
FEDERAL HOME LOAN MORTGAGE CORP.- 0.73%
1,500,000 4.500%, due 01/15/14 .............................. 1,440,628
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 2.98%
1,100,000 4.000%, due 09/02/08 .............................. 1,099,688
3,050,000 6.400%, due 05/14/09 .............................. 3,054,514
500,000 6.250%, due 07/19/11 .............................. 505,326
500,000 5.250%, due 08/01/12 .............................. 504,182
800,000 4.125%, due 04/15/14 .............................. 744,184
------------
5,907,894
------------
U.S. TREASURY BONDS - 2.26%
500,000 9.125%, due 05/15/09 .............................. 501,328
3,550,000 6.250%, due 05/15/30 .............................. 3,989,451
------------
4,490,779
------------
U.S. TREASURY NOTES - 4.64%
1,700,000 1.500%, due 03/31/06 .............................. 1,676,294
2,500,000 2.000%, due 05/15/06 .............................. 2,483,202
4,000,000 2.625%, due 05/15/08 .............................. 3,895,936
1,100,000 5.000%, due 08/15/11 .............................. 1,156,547
------------
9,211,979
------------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS ...... 23,221,256
( Cost $23,537,629 ) ------------
See accompanying Notes to Financial Statements.
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
36 BALANCED FUND--PORTFOLIO OF INVESTMENTS (UNAUDITED)(CONTINUED)
- --------------------------------------------------------------------------------
Value
Shares (Note 2)
------ --------
INVESTMENT COMPANIES - 10.28%
1 One Group Institutional Prime Money
Market Fund ....................................... $ 1
7,191,823 SSgA Prime Money Market Fund ...................... 7,191,823
13,203,010 State Street Navigator Securities
Lending Prime Portfolio (I) ....................... 13,203,010
------------
TOTAL INVESTMENT COMPANIES ........................ 20,394,834
( Cost $20,394,834 ) ------------
OTHER INVESTMENTS (I) - 1.49% ................................... 2,961,360
------------
TOTAL INVESTMENTS - 108.47% ..................................... 215,210,811
( Cost $207,811,785** ) ------------
NET OTHER ASSETS AND LIABILITIES - (8.47)% ...................... (16,803,492)
------------
TOTAL NET ASSETS - 100.00% ...................................... $198,407,319
============
_______________________________
* Non-income producing.
** Aggregate cost for Federal tax purposes was $207,885,548.
(C) Security sold within the terms of a private placement memorandum exempt
from registration under section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or other
"qualified institutional investors." The securities have been determined to
be liquid under guidelines established by the Board of Trustees.
(G) Floating rate or variable rate note.
(H) Security purchased on a delayed delivery or when-issued basis.
(I) Represents collateral held in connection with securities lending.
ADR American Depository Receipt.
PLC Public Limited Company.
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
- --------------------------------------------------------------------------------
GROWTH AND INCOME FUND--PORTFOLIO OF INVESTMENTS (UNAUDITED) 37
- --------------------------------------------------------------------------------
Value
Shares (Note 2)
------ --------
COMMON STOCKS - 97.89%
CONSUMER DISCRETIONARY - 10.87%
41,791 Comcast Corp., Class A * .......................... $ 1,257,909
84,200 Home Depot, Inc. .................................. 2,962,998
135,500 McDonald's Corp. .................................. 3,689,665
100,500 Target Corp. ...................................... 4,358,685
107,100 Time Warner, Inc. * ............................... 1,801,422
34,700 Viacom, Inc., Class B ............................. 1,341,155
112,400 Walt Disney Co. ................................... 2,588,572
------------
18,000,406
------------
CONSUMER STAPLES - 9.07%
23,100 Altria Group, Inc. ................................ 1,279,278
17,300 Coca-Cola Co. ..................................... 874,861
80,300 General Mills, Inc. ............................... 3,914,625
45,600 Kimberly-Clark Corp. .............................. 2,984,520
71,400 Kroger Co. * ...................................... 1,249,500
8,200 Procter & Gamble Co. .............................. 867,150
166,600 Sara Lee Corp. .................................... 3,845,128
------------
15,015,062
------------
ENERGY - 11.00%
25,700 Anadarko Petroleum Corp. .......................... 1,377,006
19,700 Apache Corp. ...................................... 824,839
44,206 BP PLC, ADR ....................................... 2,338,497
29,583 ChevronTexaco Corp. ............................... 2,706,845
29,500 ConocoPhillips .................................... 2,103,350
18,200 Cooper Cameron Corp. * ............................ 879,970
30,000 Devon Energy Corp. ................................ 1,836,000
97,200 Exxon Mobil Corp. ................................. 4,135,860
20,500 Schlumberger, Ltd. ................................ 1,199,865
29,452 Transocean, Inc. * ................................ 817,882
------------
18,220,114
------------
FINANCIALS - 25.29%
107,100 Allstate Corp. .................................... 4,915,890
60,092 Bank of America Corp. ............................. 4,836,805
78,770 Bank One Corp. .................................... 3,888,875
5,000 Bear Stearns Cos., Inc. ........................... 400,700
10 Berkshire Hathaway, Inc., Class A * ............... 933,900
132,866 Citigroup, Inc. ................................... 6,389,526
21,000 Fannie Mae ........................................ 1,443,120
18,000 Marsh & McLennan Cos., Inc. ....................... 811,800
58,400 Morgan Stanley .................................... 3,001,176
57,100 National City Corp. ............................... 1,979,657
11,000 Principal Financial Group, Inc. ................... 388,300
104,700 Prudential Financial, Inc. ........................ 4,600,518
27,700 SunTrust Banks, Inc. .............................. 1,884,985
29,600 U.S. Bancorp ...................................... 758,944
78,200 Wachovia Corp. .................................... 3,577,650
28,500 Wells Fargo & Co. ................................. 1,609,110
6,000 XL Capital, Ltd. .................................. 458,100
------------
41,879,056
------------
HEALTH CARE - 8.25%
82,100 Baxter International, Inc. ........................ 2,598,465
107,100 Bristol-Myers Squibb Co. .......................... 2,688,210
59,600 GlaxoSmithKline PLC, ADR .......................... 2,503,200
53,200 Merck & Co., Inc. ................................. 2,500,400
46,040 Pfizer, Inc. ...................................... 1,646,390
45,200 Wyeth ............................................. 1,720,764
------------
13,657,429
------------
INDUSTRIALS - 10.00%
52,000 Burlington Northern Santa Fe Corp. ................ 1,700,400
51,700 Emerson Electric Co. .............................. 3,113,374
107,300 Honeywell International, Inc. ..................... 3,710,434
15,000 Masco Corp. ....................................... 420,150
58,000 Textron, Inc. ..................................... 3,200,440
27,300 United Technologies Corp. ......................... 2,354,898
72,800 Waste Management, Inc. ............................ 2,067,520
------------
16,567,216
------------
INFORMATION TECHNOLOGY - 11.44%
59,600 Applied Materials, Inc. * ......................... 1,086,508
39,600 Automatic Data Processing, Inc. . ................. 1,734,876
84,800 Computer Associates International, Inc. . ......... 2,273,488
44,200 Computer Sciences Corp. * ......................... 1,808,222
84,600 EMC Corp. * ....................................... 944,136
108,921 Hewlett-Packard Co. ............................... 2,145,744
65,700 Intel Corp. ....................................... 1,690,461
32,100 International Business Machines Corp. ............. 2,830,257
155,700 Motorola, Inc. .................................... 2,841,525
63,500 Texas Instruments, Inc. ........................... 1,593,850
------------
18,949,067
------------
MATERIALS - 4.24%
9,000 Air Products & Chemicals, Inc. .................... 448,290
17,800 Alcan, Inc. ....................................... 716,094
34,900 Alcoa, Inc. ....................................... 1,073,175
19,600 Dow Chemical Co. .................................. 777,924
66,000 E.I. du Pont de Nemours & Co. ..................... 2,834,700
19,700 Weyerhaeuser Co. .................................. 1,166,240
------------
7,016,423
------------
TELECOMMUNICATION SERVICES - 4.68%
50,700 ALLTEL Corp. ...................................... 2,552,238
102,000 SBC Communications, Inc. .......................... 2,539,800
21,800 Telefonos de Mexico S.A. de C.V., ADR ............. 744,252
50,820 Verizon Communications, Inc. ...................... 1,917,947
------------
7,754,237
------------
UTILITIES - 3.05%
26,800 Ameren Corp. ...................................... 1,171,696
30,200 Consolidated Edison, Inc. ......................... 1,244,542
17,000 FPL Group, Inc. ................................... 1,081,540
36,200 Progress Energy, Inc. ............................. 1,548,274
------------
5,046,052
------------
TOTAL COMMON STOCKS ............................... 162,105,062
( Cost $157,724,807 ) ------------
See accompanying Notes to Financial Statements.
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
38 GROWTH AND INCOME FUND--PORTFOLIO OF INVESTMENTS (UNAUDITED)
(CONTINUED)
- --------------------------------------------------------------------------------
Value
Shares (Note 2)
------ --------
INVESTMENT COMPANY - 1.60%
2,648,352 SSgA Prime Money Market Fund ...................... $ 2,648,352
------------
Total Investment Company........................... 2,648,352
( Cost $2,648,352 ) ------------
TOTAL INVESTMENTS - 99.49% ...................................... 164,753,414
( Cost $160,373,159** ) ------------
NET OTHER ASSETS AND LIABILITIES - 0.51% ........................ 850,927
------------
TOTAL NET ASSETS - 100.00% ...................................... $165,604,341
============
_______________________________
* Non-income producing.
** Aggregate cost for Federal tax purposes was $161,429,307.
ADR American Depository Receipt.
PLC Public Limited Company.
See accompanying Notes to Financial Statements.
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
- --------------------------------------------------------------------------------
CAPITAL APPRECIATION FUND--PORTFOLIO OF INVESTMENTS (UNAUDITED) 39
- --------------------------------------------------------------------------------
Value
Shares (Note 2)
------ --------
COMMON STOCKS - 96.21%
CONSUMER DISCRETIONARY - 12.24%
67,750 Brinker International, Inc. * ..................... $ 2,605,665
90,600 Carnival Corp. .................................... 3,865,902
112,200 Cox Communications, Inc., Class A * ............... 3,667,818
54,600 Kohl's Corp. * .................................... 2,281,734
267,400 Liberty Media Corp., Class A * .................... 2,925,356
65,800 Tiffany & Co. ..................................... 2,566,200
------------
17,912,675
------------
CONSUMER STAPLES - 10.99%
55,600 Coca-Cola Co. ..................................... 2,811,692
57,400 CVS Corp. ......................................... 2,217,362
59,800 Estee Lauder Cos., Inc., Class A .................. 2,733,458
15,600 General Mills, Inc. ............................... 760,500
62,900 Kraft Foods, Inc., Class A ........................ 2,070,039
22,400 Procter & Gamble Co. .............................. 2,368,800
54,800 Wal-Mart Stores, Inc. ............................. 3,123,600
------------
16,085,451
------------
ENERGY - 5.63%
43,850 Apache Corp. ...................................... 1,835,999
45,000 ConocoPhillips .................................... 3,208,500
30,600 Marathon Oil Corp. ................................ 1,026,936
49,800 Weatherford International, Ltd. * ................. 2,165,304
------------
8,236,739
------------
FINANCIALS - 17.35%
24,600 ACE, Ltd. ......................................... 1,078,464
45,000 American International Group, Inc. ................ 3,224,250
18,100 Bank of America Corp. ............................. 1,456,869
53,100 Bank of New York Co., Inc. ........................ 1,547,334
10,000 Chubb Corp. ....................................... 690,000
59,000 Citigroup, Inc. ................................... 2,837,310
36,500 Freddie Mac ....................................... 2,131,600
18,400 Goldman Sachs Group, Inc. ......................... 1,775,600
33,000 Marsh & McLennan Cos., Inc. ....................... 1,488,300
42,100 MetLife, Inc. ..................................... 1,452,450
1,338 Piper Jaffray Cos. * .............................. 64,786
70,200 U.S. Bancorp ...................................... 1,799,928
55,500 Wells Fargo & Co. ................................. 3,133,530
14,000 XL Capital, Ltd. .................................. 1,068,900
28,900 Zions Bancorporation .............................. 1,633,428
------------
25,382,749
------------
HEALTH CARE - 14.26%
81,600 Abbott Laboratories ............................... 3,592,032
124,500 Applera Corp. - Applied Biosystems Group .......... 2,311,965
74,600 Boston Scientific Corp. * ......................... 3,072,774
16,500 Genzyme Corp. * ................................... 718,740
108,300 IMS Health, Inc. .................................. 2,734,575
32,400 MedImmune, Inc. * ................................. 785,376
15,700 Merck & Co., Inc. ................................. 737,900
154,438 Pfizer, Inc. ...................................... 5,522,703
82,900 Schering-Plough Corp. ............................. 1,386,917
------------
20,862,982
------------
INDUSTRIALS - 12.29%
69,000 Dover Corp. ....................................... 2,762,070
39,900 FedEx Corp. ....................................... 2,869,209
17,100 General Dynamics Corp. ............................ 1,600,902
100,000 General Electric Co. .............................. 2,995,000
32,000 Honeywell International, Inc. ..................... 1,106,560
45,000 Illinois Tool Works, Inc. ......................... 3,879,450
55,000 Masco Corp. ....................................... 1,540,550
51,400 Pall Corp. ........................................ 1,222,292
------------
17,976,033
------------
INFORMATION TECHNOLOGY - 17.05%
198,000 ADC Telecommunications, Inc. * .................... 495,000
82,800 Altera Corp. * .................................... 1,656,828
86,300 Autodesk, Inc. .................................... 2,891,050
132,400 Cadence Design Systems, Inc. * .................... 1,697,368
68,800 Celestica, Inc. * ................................. 1,209,504
62,900 Cisco Systems, Inc. * ............................. 1,312,723
50,900 Dell, Inc. * ...................................... 1,766,739
112,900 EMC Corp. * ....................................... 1,259,964
37,960 First Data Corp. .................................. 1,723,005
33,000 Hewlett-Packard Co. ............................... 650,100
32,700 KLA-Tencor Corp. * ................................ 1,362,609
93,400 Micron Technology, Inc. * ......................... 1,272,108
139,100 Microsoft Corp. ................................... 3,612,427
22,000 Novellus Systems, Inc. * .......................... 637,120
145,200 PeopleSoft, Inc. * ................................ 2,450,976
26,624 Skyworks Solutions, Inc. * ........................ 227,901
26,728 VERITAS Software Corp. * .......................... 712,836
------------
24,938,258
------------
MATERIALS - 2.15%
44,900 Praxair, Inc. ..................................... 1,641,095
38,900 Rohm and Haas Co. ................................. 1,508,542
------------
3,149,637
------------
TELECOMMUNICATION SERVICES - 2.69%
66,300 BellSouth Corp. ................................... 1,711,203
51,300 CenturyTel, Inc. .................................. 1,481,544
30,000 SBC Communications, Inc. .......................... 747,000
------------
3,939,747
------------
UTILITIES - 1.56%
35,800 FPL Group, Inc. ................................... 2,277,596
------------
TOTAL COMMON STOCKS ............................... 140,761,867
( Cost $131,288,171 ) ------------
See accompanying Notes to Financial Statements.
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
40 CAPITAL APPRECIATION FUND--PORTFOLIO OF INVESTMENTS (UNAUDITED)
(CONTINUED)
- --------------------------------------------------------------------------------
Value
Shares (Note 2)
------ --------
INVESTMENT COMPANIES - 3.69%
5,372,850 SSgA Prime Money Market Fund ...................... $ 5,372,850
30,319 State Street Navigator Securities
Lending Prime Portfolio (I) ....................... 30,319
------------
TOTAL INVESTMENT COMPANIES ........................ 5,403,169
( Cost $5,403,169 ) ------------
TOTAL INVESTMENTS - 99.90% ...................................... 146,165,036
( Cost $136,691,340** ) ------------
NET OTHER ASSETS AND LIABILITIES - 0.10% ........................ 147,449
------------
TOTAL NET ASSETS - 100.00% ...................................... $146,312,485
============
_______________________________
* Non-income producing.
** Aggregate cost for Federal tax purposes was $137,512,692.
(I) Represents collateral held in connection with securities lending.
See accompanying Notes to Financial Statements.
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
- --------------------------------------------------------------------------------
MID-CAP FUND--PORTFOLIO OF INVESTMENTS (UNAUDITED) 41
- --------------------------------------------------------------------------------
Value
Shares (Note 2)
------ --------
COMMON STOCKS - 95.44%
CONSUMER DISCRETIONARY - 15.78%
20,600 Abercrombie & Fitch Co., Class A .................. $ 647,870
32,400 Belo Corp., Class A ............................... 922,104
500 Cato Corp. ........................................ 10,010
3,600 CEC Entertainment, Inc. * ......................... 123,012
2,000 Courier Corp. ..................................... 81,500
21,200 Darden Restaurants, Inc. .......................... 480,392
23,500 Ethan Allen Interiors, Inc. ....................... 976,895
3,600 Gildan Activewear, Inc. * ......................... 105,012
10,110 Hibbett Sporting Goods, Inc. * .................... 245,459
27,900 Interpublic Group of Companies, Inc. * ............ 437,751
12,600 Interstate Hotels & Resorts, Inc. * ............... 72,702
5,300 J. Jill Group, Inc. * ............................. 112,254
13,700 Jones Apparel Group, Inc. ......................... 501,420
17,000 Linens 'N Things, Inc. * .......................... 551,480
2,400 Meritage Corp. * .................................. 162,840
4,900 Modine Manufacturing Co. .......................... 134,750
35,600 Newell Rubbermaid, Inc. ........................... 841,584
9,900 O'Reilly Automotive, Inc. * ....................... 444,411
8,600 Outback Steakhouse, Inc. .......................... 377,798
6,400 Shoe Carnival, Inc. * ............................. 82,944
3,800 Sonic Corp. * ..................................... 122,626
10,300 Spartan Motors, Inc. .............................. 111,652
3,100 Stage Stores, Inc. * .............................. 121,706
23,800 Talbots, Inc. ..................................... 831,810
2,500 Ultimate Electronics, Inc. * ...................... 10,625
8,300 WCI Communities, Inc. * ........................... 201,773
7,100 Yankee Candle Co., Inc. * ......................... 192,268
------------
8,904,648
------------
CONSUMER STAPLES - 4.86%
9,600 Casey's General Stores, Inc. ...................... 158,976
43,500 Hain Celestial Group, Inc. * ...................... 861,300
4,200 John B. Sanfilippo & Son, Inc. * .................. 131,754
23,800 McCormick & Co., Inc. ............................. 813,008
2,800 Mondavi Robert Corp. * ............................ 100,800
5,500 NBTY, Inc. * ...................................... 204,380
3,300 Riviana Foods, Inc. ............................... 83,325
6,400 Sensient Technologies Corp. ....................... 130,944
5,200 Universal Corp. ................................... 261,248
------------
2,745,735
------------
ENERGY - 6.49%
4,800 Amerada Hess Corp. ................................ 341,424
14,900 BJ Services Co. * ................................. 663,050
5,300 Encore Aquisition Co. * ........................... 157,675
18,600 ENSCO International, Inc. ......................... 509,082
14,200 Forest Oil Corp. * ................................ 372,750
14,600 Pioneer Natural Resources Co. ..................... 477,566
3,250 Plains Exploration and Production Co. * ........... 64,025
13,100 Smith International, Inc. * ....................... 717,225
4,900 St. Mary Land & Exploration Co. ................... 177,135
5,400 Vintage Petroleum, Inc. ........................... 81,378
2,900 Westport Resources Corp. * ........................ 99,267
------------
3,660,577
------------
FINANCIALS - 21.27%
5,900 1st Source Corp. .................................. 145,435
8,400 Acadia Realty Trust ............................... 105,504
3,000 Alexandria Real Estate Equities, Inc. ............. 170,460
6,900 American Capital Strategies, Ltd. ................. 181,125
6,800 AMERIGROUP Corp. * ................................ 282,268
12,440 Associated Banc-Corp. ............................. 509,418
7,000 Assured Guaranty, Ltd. * .......................... 123,900
11,000 Bear Stearns Cos., Inc. ........................... 881,540
2,600 Century Bancorp, Inc., Class A .................... 85,150
2,400 Chelsea Property Group, Inc. ...................... 122,400
28,600 Colonial BancGroup, Inc. .......................... 492,778
10,700 Compass Bancshares, Inc. .......................... 410,452
4,950 Delphi Financial Group, Inc., Class A ............. 198,792
2,600 Financial Federal Corp. * ......................... 81,380
3,900 First Midwest Bancorp, Inc. ....................... 131,625
19,700 FirstMerit Corp. .................................. 464,132
4,600 Getty Realty Corp. ................................ 98,946
24,000 Hibernia Corp., Class A ........................... 522,960
6,100 IPC Holdings, Ltd. ................................ 224,480
12,000 Jefferson-Pilot Corp. ............................. 595,080
6,900 Maguire Properties, Inc. .......................... 157,251
15,800 Marshall & Ilsley Corp. ........................... 580,966
10,700 National Commerce Financial Corp. ................. 284,513
12,300 NewAlliance Bancshares, Inc. * .................... 167,895
8,800 Platinum Underwriters Holdings,
Ltd. (Bermuda) .................................... 281,424
20,600 Principal Financial Group, Inc. ................... 727,180
18,000 Protective Life Corp. ............................. 647,280
7,000 PS Business Parks, Inc. ........................... 265,650
9,000 Radian Group, Inc. ................................ 418,590
5,000 RAIT Investment Trust ............................. 120,300
8,000 Reinsurance Group of America, Inc. ................ 310,560
2,400 RLI Corp. ......................................... 83,400
15,000 SAFECO Corp. ...................................... 656,850
6,000 Scottish Re Group Ltd. ............................ 131,280
7,000 Sky Financial Group, Inc. ......................... 167,300
4,800 SL Green Realty Corp. ............................. 195,840
7,600 TCF Financial Corp. ............................... 376,580
8,000 Torchmark Corp. ................................... 416,320
17,200 Universal American Financial Corp. * .............. 189,200
------------
12,006,204
------------
HEALTH CARE - 9.90%
6,000 AmSurg Corp. * .................................... 145,020
34,200 Apogent Technologies, Inc. * ...................... 1,108,764
21,000 Becton, Dickinson and Co. ......................... 1,061,550
5,575 Biogen Idec, Inc. * ............................... 328,925
2,300 CorVel Corp. * .................................... 71,484
4,000 Covance, Inc. * ................................... 134,960
19,300 IDEXX Laboratories, Inc. * ........................ 1,182,318
7,300 MAXIMUS, Inc. * ................................... 255,500
24,000 Omnicare, Inc. .................................... 995,520
11,000 PolyMedica Corp. .................................. 306,240
------------
5,590,281
------------
See accompanying Notes to Financial Statements.
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
42 MID-CAP FUND--PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
Value
Shares (Note 2)
------ --------
COMMON STOCKS (CONTINUED)
INDUSTRIALS - 14.57%
6,300 Albany International Corp., Class A ............... $ 192,150
9,000 Avery Dennison Corp. .............................. 578,070
2,900 Carlisle Cos., Inc. ............................... 171,825
4,800 Curtiss-Wright Corp., Class B ..................... 215,088
9,000 Deswell Industries, Inc. (Hong Kong) .............. 221,841
200 EMCOR Group, Inc. * ............................... 8,180
11,625 Genesee & Wyoming, Inc. * ......................... 267,956
8,000 Ingersoll-Rand Co., Class A ....................... 516,400
7,700 Kadant, Inc. * .................................... 141,680
18,500 Manpower, Inc. .................................... 867,650
17,000 Mueller Industries, Inc. .......................... 570,350
20,700 Norfolk Southern Corp. ............................ 493,074
10,000 Parker-Hannifin Corp. ............................. 552,900
8,400 Quixote Corp. ..................................... 162,960
14,400 R. R. Donnelley & Sons Co. ........................ 423,648
28,800 Republic Services, Inc., Class A .................. 830,016
5,800 Simpson Manufacturing Co., Inc. ................... 302,528
10,000 Teleflex, Inc. .................................... 456,500
2,400 Trex Co., Inc. * .................................. 92,904
8,700 United Stationers, Inc. * ......................... 330,600
5,700 USF Corp. ......................................... 189,525
9,500 W.W. Grainger, Inc. ............................... 497,800
7,000 Werner Enterprises, Inc. .......................... 139,930
------------
8,223,575
------------
INFORMATION TECHNOLOGY - 9.50%
10,200 Affiliated Computer Services, Inc., Class A * ..... 494,700
23,000 Andrew Corp. * .................................... 389,850
2,000 ANSYS, Inc. * ..................................... 74,100
16,100 Arrow Electronics, Inc. * ......................... 407,008
46,100 Atmel Corp. * ..................................... 269,224
8,600 ATMI, Inc. * ...................................... 189,888
3,400 Black Box Corp. ................................... 173,230
21,000 Cable Design Technologies Corp. * ................. 179,130
19,600 Convergys Corp. * ................................. 284,592
8,800 DuPont Photomasks, Inc. * ......................... 181,984
12,900 ESS Technology, Inc. * ............................ 138,288
2,200 Intergraph Corp. * ................................ 55,462
18,600 Intersil Corp., Class A * ......................... 367,350
4,300 Investment Technology Group, Inc. * ............... 61,619
23,800 LSI Logic Corp. * ................................. 177,072
24,100 McDATA Corp., Class B * ........................... 123,633
6,500 Molex, Inc. ....................................... 193,570
10,200 Pericom Semiconductor Corp. * ..................... 107,610
14,100 Reynolds and Reynolds Co., Class A ................ 402,696
14,300 SunGard Data Systems, Inc. * ...................... 372,801
18,200 Synopsys, Inc. * .................................. 486,486
3,800 Technitrol, Inc. * ................................ 80,826
4,700 Varian Semiconductor Equipment ....................
Associates, Inc. * ................................ 153,032
------------
5,364,151
------------
MATERIALS - 5.07%
2,600 Aber Diamond Corp. * .............................. 71,864
17,000 Air Products & Chemicals, Inc. .................... 846,770
4,000 AptarGroup, Inc. .................................. 157,200
2,550 Florida Rock Industries, Inc. ..................... 101,465
19,000 Martin Marietta Materials, Inc. ................... 821,750
28,010 MeadWestvaco Corp. ................................ 732,461
12,900 Meridian Gold, Inc. * ............................. 127,968
------------
2,859,478
------------
TELECOMMUNICATION SERVICES - 0.72%
14,000 CenturyTel, Inc. .................................. 404,320
------------
UTILITIES - 7.28%
30,800 Alliant Energy Corp. .............................. 765,688
14,000 Ameren Corp. ...................................... 612,080
4,400 Black Hills Corp. ................................. 134,596
18,400 Constellation Energy Group, Inc. .................. 708,032
3,800 New Jersey Resources Corp. ........................ 144,818
1,900 Peoples Energy Corp. .............................. 79,420
34,000 Pepco Holdings, Inc. .............................. 643,960
7,900 PNM Resources, Inc. ............................... 230,522
5,200 WGL Holdings, Inc. ................................ 147,056
20,500 Wisconsin Energy Corp. ............................ 643,700
------------
4,109,872
------------
TOTAL COMMON STOCKS 53,868,841
( Cost $45,127,005 ) ------------
INVESTMENT COMPANIES - 6.49%
2,081,877 SSgA Prime Money Market Fund ...................... 2,081,877
1,580,145 State Street Navigator Securities
Lending Prime Portfolio (I) ....................... 1,580,145
------------
TOTAL INVESTMENT COMPANIES ........................ 3,662,022
( Cost $3,662,022 ) ------------
TOTAL INVESTMENTS - 101.93% ..................................... 57,530,863
( Cost $48,789,027** ) ------------
NET OTHER ASSETS AND LIABILITIES - (1.93)% ...................... (1,086,840)
------------
TOTAL NET ASSETS - 100.00% ...................................... $ 56,444,023
============
_______________________________
* Non-income producing.
** Aggregate cost for Federal tax purposes was $48,794,129.
(I) Represents collateral held in connection with securities lending.
See accompanying Notes to Financial Statements.
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
- --------------------------------------------------------------------------------
MULTI-CAP GROWTH FUND--PORTFOLIO OF INVESTMENTS (UNAUDITED) 43
- --------------------------------------------------------------------------------
Value
Shares (Note 2)
------ --------
COMMON STOCKS - 96.91%
CONSUMER DISCRETIONARY - 4.80%
1,900 A.C. Moore Arts & Crafts, Inc. * .................. $ 51,737
17,380 Comcast Corp. * ................................... 503,846
6,910 Lowe's Cos., Inc. ................................. 359,735
1,397 M.D.C. Holdings, Inc. ............................. 86,321
5,000 Michaels Stores, Inc. ............................. 250,150
3,930 Scientific Games Corp., Class A * ................. 70,897
30,390 Sirius Satellite Radio, Inc. * .................... 100,287
8,830 TiVo, Inc. * ...................................... 61,898
1,010 Wynn Resorts, Ltd. * .............................. 40,329
5,100 XM Satellite Radio Holdings, Inc., Class A * ...... 122,196
------------
1,647,396
------------
CONSUMER SERVICES - 13.19%
20,700 Apollo Group, Inc., Class A * ..................... 1,881,216
3,150 DiamondCluster International, Inc.,
Class A * ......................................... 32,288
3,900 Lennar Corp., Class A ............................. 182,715
9,750 MPS Group, Inc. * ................................. 106,665
13,215 Omnicom Group, Inc. ............................... 1,050,725
13,550 Research In Motion, Ltd. * ........................ 1,175,598
12,680 Service Corp. International * ..................... 93,705
------------
4,522,912
------------
ENERGY - 1.92%
3,250 Arch Coal, Inc. ................................... 99,483
1,790 Cabot Oil & Gas Corp. ............................. 63,903
3,600 EOG Resources, Inc. ............................... 177,300
5,800 Key Energy Services, Inc. * ....................... 61,828
3,120 Whiting Petroleum Corp. * ......................... 79,092
6,575 XTO Energy, Inc. .................................. 175,552
------------
657,158
------------
FINANCIALS - 9.62%
1,020 Affiliated Managers Group, Inc. * ................. 49,674
1,170 Arch Capital Group, Ltd. * ........................ 47,011
7,680 BISYS Group, Inc. * ............................... 111,360
18,995 Citigroup, Inc. ................................... 913,469
27,529 Countrywide Financial Corp. ....................... 1,632,470
2,760 Fannie Mae ........................................ 189,667
3,100 IndyMac Bancorp, Inc. ............................. 99,696
2,200 Legg Mason, Inc. .................................. 202,532
3,600 U.S.I. Holdings Corp. * ........................... 54,540
------------
3,300,419
------------
HEALTH CARE - 21.68%
7,840 Abbott Laboratories ............................... 345,117
3,550 Abgenix, Inc. * ................................... 57,759
25,260 AstraZeneca PLC, ADR .............................. 1,208,691
5,820 Cardinal Health, Inc. ............................. 426,315
3,000 Cephalon, Inc. * .................................. 170,730
17,430 Eli Lilly & Co. ................................... 1,286,508
1,900 Express Scripts, Inc., Class A * .................. 146,946
8,760 Forest Laboratories, Inc. * ....................... 564,845
22,820 Guidant Corp. ..................................... 1,437,888
1,300 Kinetic Concepts, Inc. * .......................... 62,920
18,670 Medco Health Solutions, Inc. * .................... 660,918
3,250 Medicines Co. * ................................... 106,307
9,460 Medtronic, Inc. ................................... 477,352
8,600 Millennium Pharmaceuticals, Inc. * ................ 128,914
2,610 NPS Pharmaceuticals, Inc. * ....................... 65,380
3,300 Psychiatric Solutions, Inc. * ..................... 76,725
1,400 Symbion, Inc. * ................................... 22,820
1,600 Waters Corp. * .................................... 69,040
3,400 Watson Pharmaceuticals, Inc. * .................... 121,074
------------
7,436,249
------------
INDUSTRIALS - 1.61%
6,200 American Power Conversion Corp. ................... 115,692
7,230 Fleetwood Enterprises, Inc. * ..................... 104,835
2,900 Parker-Hannifin Corp. ............................. 160,341
5,300 Rockwell Collins, Inc. ............................ 170,925
------------
551,793
------------
INFORMATION TECHNOLOGY - 38.32%
3,700 Acxiom Corp. ...................................... 85,618
10,060 Aeroflex, Inc. * .................................. 126,555
7,800 Altera Corp. * .................................... 156,078
6,200 Amdocs, Ltd. * .................................... 164,610
22,550 Analog Devices, Inc. .............................. 960,630
1,600 CDW Corp. ......................................... 99,984
92,980 Corning, Inc. * ................................... 1,025,569
43,000 Dell, Inc. * ...................................... 1,492,530
14,920 eBay, Inc. * ...................................... 1,190,914
42,740 EMC Corp. * ....................................... 476,978
31,180 First Data Corp. .................................. 1,415,260
3,510 Genesis Microchip, Inc. * ......................... 52,755
3,300 Intuit, Inc. * .................................... 140,151
19,920 KLA-Tencor Corp. * ................................ 830,066
21,130 MEMC Electronic Materials, Inc. * ................. 168,406
32,880 Microsoft Corp. ................................... 853,894
3,400 Navigant Consulting, Inc. * ....................... 59,602
10,900 Network Appliance, Inc. * ......................... 202,958
3,650 Network Associates, Inc. * ........................ 57,232
17,140 ON Semiconductor Corp. * .......................... 82,786
3,710 Pixelworks, Inc. * ................................ 66,335
1,610 Plantronics, Inc. * ............................... 61,100
4,070 Polycom, Inc. * ................................... 77,656
13,860 Red Hat, Inc. * ................................... 314,761
1,410 Safenet, Inc. * ................................... 30,315
8,640 Sapient Corp. * ................................... 48,384
3,550 Serena Software, Inc. * ........................... 63,084
7,770 Skillsoft PLC, ADR * .............................. 97,125
12,960 Symantec Corp. * .................................. 583,848
10,000 VeriSign, Inc. * .................................. 161,300
20,010 Xilinx, Inc. * .................................... 672,936
26,220 Yahoo!, Inc. * .................................... 1,323,061
------------
13,142,481
------------
See accompanying Notes to Financial Statements.
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
44 MULTI-CAP GROWTH FUND--PORTFOLIO OF INVESTMENTS (UNAUDITED)
(CONTINUED)
- --------------------------------------------------------------------------------
Value
Shares (Note 2)
------ --------
COMMON STOCKS (CONTINUED)
TECHNOLOGY - 2.75%
13,190 Electronic Arts, Inc. * ........................... $ 667,678
7,350 SAP AG, ADR ....................................... 274,008
------------
941,686
------------
TELECOMMUNICATIONS - 2.51%
14,070 American Tower Corp., Class A * ................... 175,172
12,590 Crown Castle International Corp. * ................ 175,631
6,600 Nextel Communications, Inc., Class A * ............ 157,476
10,390 Univision Communications, Inc., Class A * ......... 351,701
------------
859,980
------------
TRANSPORTATION - 0.51%
4,500 OMI Corp. ......................................... 45,315
3,500 Sirva, Inc. * ..................................... 81,305
1,370 Yellow Roadway Corp. * ............................ 46,649
------------
173,269
------------
TOTAL COMMON STOCKS ............................... 33,233,343
( Cost $29,188,882 ) ------------
INVESTMENT COMPANIES - 5.63%
1,200 iShares Russell 2000 Growth Index Fund ............ 71,100
1,004,831 SSgA Prime Money Market Fund ...................... 1,004,831
854,385 State Street Navigator Securities
Lending Prime Portfolio (I) ....................... 854,385
------------
TOTAL INVESTMENT COMPANIES ........................ 1,930,316
( Cost $1,932,642 ) ------------
TOTAL INVESTMENTS - 102.54% ..................................... 35,163,659
( Cost $31,121,524** ) ------------
NET OTHER ASSETS AND LIABILITIES - (2.54)% ...................... (871,148)
------------
TOTAL NET ASSETS - 100.00% ...................................... $ 34,292,511
============
_______________________________
* Non-income producing.
** Aggregate cost for Federal tax purposes was $31,176,562.
(I) Represents collateral held in connection with securities lending.
ADR American Depository Receipt.
PLC Public Limited Company.
See accompanying Notes to Financial Statements.
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
- --------------------------------------------------------------------------------
INTERNATIONAL STOCK FUND--PORTFOLIO OF INVESTMENTS (UNAUDITED) 45
- --------------------------------------------------------------------------------
Value
Shares (Note 2)
------ --------
COMMON STOCKS - 97.25%
ARGENTINA - 0.17%
2,644 Tenaris S.A., ADR * ............................... $ 79,293
------------
AUSTRALIA - 0.69%
19,300 James Hardie Industries N.V. ...................... 93,278
37,151 John Fairfax Holdings, Ltd. ....................... 89,776
68,506 Macquarie Infrastructure Group .................... 135,896
------------
318,950
------------
AUSTRIA - 0.36%
1,100 Erste Bank der Oesterreichischen
Sparkassen AG ..................................... 164,479
------------
BELGIUM - 0.95%
2,400 Ackermans & van Haaren N.V. ....................... 58,350
11,500 Fortis Group ...................................... 250,117
7,899 Solvus S.A. * ..................................... 129,321
499 Solvus S.A. Strip VVPR * .......................... 6
------------
437,794
------------
BRAZIL - 1.92%
2,900 Brasil de Distribuicao Pao de Acucar, ADR ......... 51,620
2,000 Brasil Telecom Participacoes S.A., ADR ............ 62,000
5,100 Companhia de Bebidas das Americas, ADR ............ 95,676
4,300 Companhia de Concessoes Rodoviarias ............... 36,773
5,100 Companhia Vale do Rio Doce, ADR ................... 232,050
5,400 Embraer Aircraft Corp., ADR ....................... 139,320
5,800 Petroleo Brasileiro, S.A., ADR .................... 167,620
12,100 Souza Cruz S.A. ................................... 104,878
------------
889,937
------------
CHILE - 0.38%
6,300 AFP Provida S.A., ADR ............................. 174,825
------------
CHINA - 0.72%
9,920 China Mobile HK, Ltd., ADR ........................ 131,242
3,660 CNOOC, Ltd., ADR .................................. 132,785
204,000 Sinotrans, Ltd. ................................... 69,964
------------
333,991
------------
CROATIA - 0.34%
9,600 Pliva d.d., GDR (C)* .............................. 155,497
------------
CZECH REPUBLIC - 0.12%
4,500 Cesky Telecom A.S. ................................ 57,353
------------
EGYPT - 0.41%
27,305 Commercial International Bank of Egypt,
GDR (C) ........................................... 98,298
6,300 MobiNil - Egyptian Mobile Services ................ 89,006
------------
187,304
------------
FINLAND - 3.43%
5,200 Amer Group, Ltd. .................................. 246,433
57,300 Nokia Oyj ......................................... 805,662
9,000 Sampo Oyj ......................................... 86,123
19,000 Stora Enso Oyj .................................... 255,998
3,100 TietoEnator Oyj ................................... 92,261
4,400 Vaisala Oyj ....................................... 100,071
------------
1,586,548
------------
FRANCE - 7.34%
5,900 Aventis S.A. * .................................... 449,053
3,920 BNP Paribas ....................................... 235,209
3,800 Carbone Lorraine S.A. ............................. 153,872
4,600 Carrefour S.A. .................................... 213,261
15,927 Credit Agricole S.A. .............................. 392,563
4,400 Euronext N.V. ..................................... 127,895
5,700 Lagardere S.C.A. .................................. 343,037
4,300 Neopost S.A. ...................................... 236,947
3,000 Sanofi-Synthelabo S.A. ............................ 191,731
4,900 Schneider Electric S.A. ........................... 329,809
3,700 Total S.A., Series B .............................. 683,751
958 Union Financiere de France Banque S.A. ............ 37,380
------------
3,394,508
------------
GERMANY - 4.89%
7,200 BASF AG ........................................... 371,138
3,800 E. On AG .......................................... 251,674
2,000 Fielmann AG ....................................... 104,794
2,800 Medion AG ......................................... 118,979
7,100 MG Technologies AG ................................ 104,591
4,000 Muenchener Ruckversicherungs - Gesellschaft AG .... 432,160
1,050 PUMA AG ........................................... 241,321
2,400 Schering AG ....................................... 126,041
4,200 Siemens AG ........................................ 303,066
2,100 Stada Arzneimittel AG ............................. 110,336
4,511 Techem AG * ....................................... 98,597
------------
2,262,697
------------
GREECE - 0.35%
8,590 OPAP S.A. ......................................... 163,576
------------
HONG KONG - 0.98%
45,500 CLP Holdings, Ltd. ................................ 242,093
51,200 Esprit Asia Holdings, Ltd. ........................ 211,372
------------
453,465
------------
HUNGARY - 0.93%
2,280 Gedeon Richter Rt. ................................ 232,059
5,300 MOL Magyar Olaj-es Gazipari Rt. ................... 200,198
------------
432,257
------------
INDIA - 2.30%
2,200 Dr. Reddy's Laboratories, Ltd., ADR ............... 43,120
7,200 Hero Honda Motors, Ltd. ........................... 78,169
5,650 Hindalco Industries, Ltd., GDR .................... 141,625
34,800 Hindustan Lever, Ltd. ............................. 110,496
1,200 Oil & Natural Gas Corp., Ltd. ..................... 22,667
17,600 Reliance Industries, Ltd. ......................... 208,334
22,200 Satyam Computer Services, Ltd. .................... 160,172
20,800 State Bank of India, Ltd. ......................... 300,564
------------
1,065,147
------------
INDONESIA - 0.97%
419,500 HM Sampoerna Tbk PT ............................... 243,618
11,200 Telekomunikasi Indonesia Tbk PT, ADR .............. 202,720
------------
446,338
------------
See accompanying Notes to Financial Statements.
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
46 INTERNATIONAL STOCK FUND--PORTFOLIO OF INVESTMENTS (UNAUDITED)
(CONTINUED)
- --------------------------------------------------------------------------------
Value
Shares (Note 2)
------ --------
COMMON STOCKS (CONTINUED)
IRELAND - 2.61%
21,416 Allied Irish Banks PLC ............................ $ 308,811
11,211 Anglo Irish Bank Corp. PLC ........................ 183,277
18,000 Bank of Ireland ................................... 217,948
16,087 CRH PLC ........................................... 341,053
10,100 DCC PLC ........................................... 153,802
------------
1,204,891
------------
ISRAEL - 0.56%
42,000 Bank Hapoalim, Ltd. ............................... 108,363
3,876 Koor Industries, Ltd. * ........................... 151,950
------------
260,313
------------
ITALY - 1.59%
2,500 Davide Campari-Milano SpA ......................... 116,172
27,700 Eni SpA ........................................... 562,647
12,600 Snam Rete Gas SpA ................................. 55,834
------------
734,653
------------
JAPAN - 15.05%
4,100 ACOM Co., Ltd. .................................... 291,995
9,000 Canon, Inc. ....................................... 472,161
4,200 Credit Saison Co., Ltd. ........................... 122,919
5,000 Daito Trust Construction Co., Ltd. ................ 169,438
31 eAccess, Ltd. * ................................... 157,858
48 East Japan Railway Co. ............................ 245,295
5,300 Fanuc, Ltd. ....................................... 324,632
900 Funai Electric Co., Ltd. .......................... 133,901
8,000 Hisamitsu Pharmaceutical Co., Inc. ................ 133,738
5,000 Honda Motor Co., Ltd. ............................. 200,698
7,000 Kao Corp. ......................................... 167,127
2,700 Lawson, Inc. ...................................... 101,282
9,000 Leopalace21 Corp. ................................. 150,781
17,000 Mitsubishi Estate Co., Ltd. ....................... 201,015
3,900 NEC Electronics Corp. * ........................... 274,571
2,100 Nichii Gakkan Co. ................................. 109,029
49,300 Nissan Motor Co., Ltd. ............................ 548,994
30,000 Nomura Holdings, Inc. ............................. 487,111
224 NTT DoCoMo, Inc. .................................. 444,489
1,600 Rohm Co., Ltd. .................................... 199,629
3,500 Sammy Corp. ....................................... 148,099
3,000 Secom Techno Service Co., Ltd. .................... 119,603
6,600 Shin-Etsu Chemical Co., Ltd. ...................... 266,715
20,000 Sumitomo Trust & Banking Co., Ltd. ................ 120,328
21,000 Suruga Bank, Ltd. ................................. 155,837
10,100 Takeda Chemical Industries, Ltd. .................. 407,240
83,000 Tokyo Gas Co., Ltd. ............................... 307,588
9,000 Uniden Corp. ...................................... 158,610
2,100 USS Co., Ltd. ..................................... 177,529
2,800 Yamada Denki Co., Ltd. ............................ 96,154
40 Yoshinoya D&C Co., Ltd. ........................... 63,426
------------
6,957,792
------------
MEXICO - 1.73%
71,100 America Telecom, S.A. de C.V., Series A * ......... 124,102
3,554 Cemex S.A. de C.V., ADR ........................... 104,665
2,170 Fomento Economico Mexicano S.A. de
C.V., ADR ......................................... 94,873
2,500 Grupo Televisa, S.A. de C.V., ADR ................. 108,975
26,900 Kimberly-Clark de Mexico, S.A. de C.V.,
Class A ........................................... 71,373
8,600 Telefonos de Mexico S.A. de C.V., ADR ............. 293,604
------------
797,592
------------
NETHERLANDS - 7.09%
3,740 Boskalis Westminster N.V. ......................... 94,064
2,848 Fugro N.V. ........................................ 164,815
10,721 Heineken N.V. * ................................... 451,968
6,361 Hunter Douglas N.V. ............................... 304,502
1,482 IHC Caland N.V. ................................... 69,737
5,900 Imtech N.V. ....................................... 147,258
60,300 Koninklijke KPN ................................... 434,032
23,263 Philips Electronics N.V. .......................... 633,001
15,000 Royal Dutch Petroleum Co. ......................... 728,830
6,300 Telegraaf Holdings MIJ N.V. ....................... 136,568
6,078 United Services Group N.V. ........................ 112,102
------------
3,276,877
------------
NORWAY - 0.77%
13,200 Den Norske Bank ASA ............................... 83,593
6,300 Ekornes ASA ....................................... 126,568
11,800 Statoil ASA ....................................... 147,307
------------
357,468
------------
PERU - 0.19%
7,000 Credicorp, Ltd. ................................... 89,670
------------
PHILIPPINES - 0.33%
7,800 Philippine Long Distance Telephone Co., ADR * ..... 153,348
------------
RUSSIA - 0.40%
955 LUKOIL, ADR ....................................... 104,019
4,900 Wimm-Bill-Dann Foods OJSC, ADR * .................. 83,251
------------
187,270
------------
SINGAPORE - 0.60%
39,000 Overseas Chinese Banking Corp., Ltd. .............. 277,352
------------
SOUTH AFRICA - 2.73%
32,300 ABSA Group, Ltd. .................................. 209,038
11,100 Harmony Gold Mining Co., Ltd., ADR ................ 122,544
2,050 Impala Platinum Holdings, Ltd. .................... 140,067
16,100 Kumba Resources, Ltd. ............................. 96,413
97,900 Old Mutual PLC .................................... 168,049
59,100 Sanlam, Ltd. ...................................... 74,705
12,100 Sappi, Ltd. ....................................... 163,863
9,500 Sasol, Ltd. ....................................... 143,115
115,596 Steinhoff International Holdings, Ltd. ............ 144,284
------------
1,262,078
------------
See accompanying Notes to Financial Statements.
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
- --------------------------------------------------------------------------------
INTERNATIONAL STOCK FUND--PORTFOLIO OF INVESTMENTS (UNAUDITED)
(CONTINUED) 47
- --------------------------------------------------------------------------------
Value
Shares (Note 2)
------ --------
COMMON STOCKS (CONTINUED)
SOUTH KOREA - 5.15%
5,700 Daewoo Shipbuilding & Marine Engineering
Co., Ltd., GDR (C) * .............................. $ 122,436
1,150 Hite Brewery Co., Ltd. ............................ 84,289
9,686 Kookmin Bank * .................................... 361,569
10,540 KT Corp., ADR ..................................... 194,990
400 KT Corp. .......................................... 13,943
1,800 LG Chem, Ltd. ..................................... 72,715
1,500 LG Electronics, Inc. .............................. 91,021
4,400 LG Household & Health Care, Ltd. .................. 132,561
740 POSCO ............................................. 90,501
2,400 POSCO, ADR ........................................ 73,800
2,019 Samsung Electronics Co., Ltd., GDR (C) ............ 474,970
2,074 Samsung Fire & Marine Insurance Co., Ltd. ......... 137,872
920 Samsung SDI Co., Ltd. ............................. 117,612
3,300 SK Corp. .......................................... 138,373
870 SK Telecom Co., Ltd. .............................. 148,293
6,139 SK Telecom Co., Ltd., ADR ......................... 124,008
------------
2,378,953
------------
SPAIN - 1.62%
10,000 Abengoa, S.A. ..................................... 88,986
4,200 Aldeasa, S.A. ..................................... 121,176
8,100 Altadis, S.A. ..................................... 228,749
900 Antena 3 de Television S.A. * ..................... 45,702
7,600 Indra Sistemas, S.A. .............................. 98,485
10,100 Prosegur, CIA de Seguridad S.A. ................... 164,630
------------
747,728
------------
SWEDEN - 1.58%
8,200 Alfa Laval AB ..................................... 123,471
2,500 Autoliv, Inc., SDR ................................ 106,385
12,160 Elekta AB * ....................................... 217,331
10,300 Getinge AB ........................................ 118,679
16,400 Swedish Match AB .................................. 165,344
------------
731,210
------------
SWITZERLAND - 4.94%
13,100 Compagnie Financiere Richemont AG ................. 336,544
17,570 Credit Suisse Group ............................... 618,533
340 Edipresse S.A. .................................... 172,861
100 Geberit AG ........................................ 60,702
4,000 Roche Holding AG .................................. 419,058
6,600 Swiss Reinsurance Co. ............................. 433,679
3,400 UBS AG ............................................ 241,351
------------
2,282,728
------------
TAIWAN - 1.73%
61,571 Advantech Co., Ltd. ............................... 129,740
92,603 Chinatrust Financial Holding Co., Ltd. ............ 99,516
10,352 Compal Electronics, Inc., GDR ..................... 59,007
33,350 Compal Electronics, Inc. .......................... 37,546
139,000 Fubon Group Co., Ltd. ............................. 132,640
44,520 Hon Hai Precision Industry Co., Ltd. .............. 175,561
110,250 United Microelectronics Corp. * ................... 98,900
12,516 United Microelectronics Corp., ADR * .............. 65,083
------------
797,993
------------
THAILAND - 0.39%
175,300 Delta Electronics Public Co., Ltd. ................ 112,821
114,100 Thai Union Frozen Products Public Co.,
Ltd. - Foreign .................................... 67,302
------------
180,123
------------
TURKEY - 0.20%
30,267 Turkiye Garanti Bankasi A.S., ADR (C)* ............ 92,817
------------
UNITED KINGDOM - 20.44%
60,000 Barclays PLC ...................................... 541,309
78,300 BP PLC ............................................ 677,235
13,100 Bunzl PLC ......................................... 109,528
31,300 Cadbury Schweppes PLC ............................. 249,063
9,400 Carpetright PLC ................................... 174,447
16,200 Cattles PLC ....................................... 99,735
13,751 Collins Stewart Tullett PLC ....................... 101,736
31,800 Diageo PLC ........................................ 426,814
11,300 Enterprise Inns PLC ............................... 122,296
43,700 GlaxoSmithKline PLC ............................... 904,805
57,530 HSBC Holdings PLC ................................. 824,724
7,900 Imperial Tobacco Group PLC ........................ 175,062
17,300 Intertek Group PLC ................................ 157,842
12,300 JJB Sports PLC .................................... 57,066
27,000 John Wood Group PLC ............................... 67,783
45,360 Kesa Electricals PLC .............................. 226,947
114,200 Kidde PLC ......................................... 226,927
10,600 Luminar PLC ....................................... 86,181
7,273 Man Group PLC ..................................... 217,816
17,700 Northgate PLC ..................................... 195,957
49,000 Prudential PLC .................................... 385,126
72,300 Rentokil Initial PLC .............................. 241,157
11,300 Rio Tinto PLC ..................................... 248,000
21,800 Royal Bank of Scotland Group PLC .................. 654,812
3,500 Signet Group PLC, ADR ............................. 223,125
24,800 Smiths Group PLC .................................. 307,341
15,800 Trinity Mirror PLC ................................ 172,539
18,700 Unilever PLC ...................................... 176,505
439,900 Vodafone Group PLC ................................ 1,069,245
20,500 William Hill PLC .................................. 194,949
18,400 Wimpey George PLC ................................. 133,927
------------
9,449,999
------------
VENEZUELA - 0.30%
7,234 Compania Anonima Nacional Telefonos
de Venezuela, ADR ................................. 138,531
------------
TOTAL COMMON STOCKS ............................... 44,963,345
( Cost $36,037,064 ) ------------
See accompanying Notes to Financial Statements.
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
48 INTERNATIONAL STOCK FUND--PORTFOLIO OF INVESTMENTS (UNAUDITED)
(CONTINUED)
- --------------------------------------------------------------------------------
Value
Shares (Note 2)
------ --------
PREFERRED STOCKS - 1.24%
BRAZIL - 0.95%
454,100 Caemi Mineracao e Metalurgica S.A. ................ $ 165,155
35,200 Copel, ADR * ...................................... 118,976
4,400,000 Telemar Norte Leste S.A., Class A ................. 74,749
8,000 Usinas Siderurgicas de Minas Gerais S.A. .......... 78,858
------------
437,738
------------
GERMANY - 0.29%
220 Porsche AG ........................................ 136,358
------------
TOTAL PREFERRED STOCKS ............................ 574,096
( Cost $550,763 ) ------------
WARRANTS AND RIGHTS - 0.00%
JAPAN - 0.00%
240 Belluna Co., Ltd. * ............................... 0
------------
TOTAL WARRANTS AND RIGHTS ......................... 0
( Cost $227 ) ------------
Par Value
---------
CERTIFICATE OF DEPOSIT - 1.55%
$ 715,259 State Street Eurodollar ........................... 715,259
------------
TOTAL CERTIFICATE OF DEPOSIT ...................... 715,259
( Cost $715,259 ) ------------
TOTAL INVESTMENTS - 100.04% ..................................... 46,252,700
( Cost $37,303,313** ) ------------
NET OTHER ASSETS AND LIABILITIES - (0.04)% ...................... (19,138)
------------
TOTAL NET ASSETS - 100.00% ...................................... $ 46,233,562
============
_______________________________
* Non-income producing.
** Aggregate cost for Federal tax purposes was $37,310,722.
(C) Security sold within the terms of a private placement memorandum exempt
from registration under section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or other
"qualified institutional investors." The securities have been determined
to be liquid under guidelines established by the Board of Trustees.
ADR American Depository Receipt.
GDR Global Depository Receipt.
PLC Public Limited Company.
SDR Swedish Depository Receipt.
OTHER INFORMATION:
Industry Concentration as a Percentage of Net Assets % of Net Assets
---------------
Banks ................................................ 14.1%
Oil & Gas ............................................ 9.1%
Drugs & Health Care .................................. 7.2%
Telecommunications ................................... 6.9%
Communication Services ............................... 5.8%
Financial Services ................................... 5.1%
Food & Beverages ..................................... 4.0%
Insurance ............................................ 3.7%
Computers & Business Equipment ....................... 3.5%
Retail ............................................... 3.4%
Mining ............................................... 3.0%
Household Appliances & Home Furnishings .............. 2.6%
Business Services .................................... 2.5%
Electronics .......................................... 2.4%
Electrical Equipment ................................. 2.3%
Automobiles .......................................... 2.1%
Chemicals ............................................ 2.0%
Tobacco .............................................. 2.0%
Leisure Time ......................................... 1.6%
Certificate of Deposit ............................... 1.5%
Manufacturing ........................................ 1.4%
Construction & Mining Equipment ...................... 1.4%
Electric Utilities ................................... 1.3%
Conglomerates ........................................ 1.3%
Railroads & Equipment ................................ 1.0%
Household Products ................................... 0.9%
Real Estate .......................................... 0.8%
Building Construction ................................ 0.6%
Publishing ........................................... 0.6%
Forest Products ...................................... 0.6%
Apparel & Textiles ................................... 0.5%
Hotels & Restaurants ................................. 0.5%
Paper ................................................ 0.5%
Industrial Machinery ................................. 0.4%
Medical Products/Supplies ............................ 0.4%
Software ............................................. 0.3%
Internet ............................................. 0.3%
Diversified .......................................... 0.3%
Retail-Specialty ..................................... 0.3%
Aerospace ............................................ 0.3%
Shipbuilding ......................................... 0.3%
Auto Parts ........................................... 0.2%
Construction Materials ............................... 0.2%
Retail-General ....................................... 0.2%
Computer Software/Services ........................... 0.2%
Transportation ....................................... 0.2%
Cable ................................................ 0.1%
Commercial/Consumer Services ......................... 0.1%
---------------
100.00%
===============
See accompanying Notes to Financial Statements.
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
- --------------------------------------------------------------------------------
49
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- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
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50 STATEMENTS OF ASSETS AND LIABILITIES AS OF APRIL 30, 2004 (UNAUDITED)
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CASH RESERVES BOND HIGH INCOME
FUND FUND FUND
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ASSETS:
Investments:
Investments at cost .................................................. $ 20,610,803 $ 172,607,295 $ 70,552,864
Net unrealized appreciation (depreciation) ........................... -- 439,932 1,330,862
------------- ------------- -------------
Total investments at value ...................................... 20,610,803 173,047,227 71,883,726
Cash ................................................................. -- -- 147,473
Foreign currency (Cost $5,077 and $288,770, respectively) (Note 2) ... -- -- 5,090
Receivables:
Investments sold ..................................................... -- 3,852,862 842,246
Fund shares sold ..................................................... 26,894 465,970 224,183
Dividends and interest ............................................... 79,870 1,593,333 1,275,536
Net unrealized appreciation on foreign currency exchange contracts ..... -- -- 13,296
Prepaid insurance and registration fees ................................ 345 5,412 2,632
Prepaid Trustees' and other fees ....................................... 7,732 3,123 1,332
------------- ------------- -------------
Total Assets ....................................................... 20,725,644 178,967,927 74,395,514
------------- ------------- -------------
LIABILITIES:
Payable to custodian ................................................... -- -- --
Net unrealized depreciation on forward currency contracts .............. -- -- --
Payables:
Investments purchased ................................................ -- 6,121,435 520,817
Due to Advisor, net .................................................. 1,241 52,886 27,256
Fund shares repurchased .............................................. 21,199 190,151 52,833
Upon return of securities loaned ..................................... -- 32,036,924 10,971,565
Administration and transfer agent fees ............................... 22,583 103,467 33,565
Distribution fees - Class B .......................................... 5,625 36,632 14,665
Shareholder servicing fees ........................................... -- 28,936 12,823
Accrued expenses and other payables .................................... -- 95,871 128,766
------------- ------------- -------------
Total Liabilities .................................................... 50,648 38,666,302 11,762,290
------------- ------------- -------------
NET ASSETS ............................................................. $ 20,674,996 $ 140,301,625 $ 62,633,224
============= ============= =============
NET ASSETS CONSIST OF:
Paid-in capital ...................................................... $ 20,672,863 $ 140,683,822 $ 66,617,584
Accumulated undistributed
net investment income (loss) ....................................... 2,125 37,300 76,072
Accumulated net realized gain (loss) on investments sold and
foreign currency related transactions .............................. 8 (859,429) (5,404,273)
Net unrealized appreciation (depreciation) of investments (including
appreciation (depreciation) of foreign currency related
transactions) ....... .............................................. -- 439,932 1,343,841
------------- ------------- -------------
NET ASSETS ............................................................. $ 20,674,996 $ 140,301,625 $ 62,633,224
============= ============= =============
CLASS A SHARES:
Net assets ........................................................... $ 11,469,238 $ 81,573,169 $ 38,931,249
Shares of beneficial interest outstanding ............................ 11,490,401 8,176,922 5,276,906
NET ASSET VALUE and redemption price per share ....................... $ 1.00 $ 9.98 $ 7.38
Sales charge of offering price* ...................................... 0.06 0.50 0.37
------------- ------------- -------------
Maximum offering price per share ..................................... $ 1.06 $ 10.48 $ 7.75
============= ============= =============
CLASS B SHARES:
Net assets ........................................................... $ 9,205,758 $ 58,728,456 $ 23,701,975
Shares of beneficial interest outstanding ............................ 9,220,236 5,885,373 3,204,740
NET ASSET VALUE and redemption price per share** ..................... $ 1.00 $ 9.98 $ 7.40
============= ============= =============
_________________________________________
* Sales charge of offering price is 5.75% for the Cash Reserves Fund, 4.75%
for the Bond Fund and High Income Fund, 5.75% for the Balanced Fund, Growth
and Income Fund, Capital Appreciation Fund, Mid-Cap Fund, Multi-Cap Growth
Fund, and International Stock Fund.
** Redemption price per share is equal to the Net Asset Value per share less
any applicable contingent deferred sales charge and / or redemption fee.
See accompanying Notes to Financial Statements.
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
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51
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BALANCED GROWTH AND CAPITAL
FUND INCOME FUND APPRECIATION FUND
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ASSETS:
Investments:
Investments at cost ............................................... $ 207,811,785 $ 160,373,159 $ 136,691,340
Net unrealized appreciation (depreciation) ........................ 7,399,026 4,380,255 9,473,696
------------- ------------- -------------
Total investments at value ................................... 215,210,811 164,753,414 146,165,036
Cash .............................................................. -- -- --
Foreign currency (Cost $5,077 and $288,770, respectively) (Note 2). -- -- --
Receivables:
Investments sold .................................................. 1,387,010 837,135 3,087,893
Fund shares sold .................................................. 212,095 264,445 228,086
Dividends and interest ............................................ 1,038,295 223,266 131,358
Net unrealized appreciation on foreign currency exchange ............ -- -- --
contracts
Prepaid insurance and registration fees ............................. 4,351 1,769 1,428
Prepaid Trustees' and other fees .................................... 4,237 3,359 3,077
------------- ------------- -------------
Total Assets ...................................................... 217,856,799 166,083,388 149,616,878
------------- ------------- -------------
LIABILITIES:
Payable to custodian ................................................ -- -- --
Net unrealized depreciation on forward currency contracts ........... -- -- --
Payables:
Investments purchased ............................................. 2,669,133 -- 2,768,967
Due to Advisor, net ............................................... 105,630 66,930 82,493
Fund shares repurchased ........................................... 224,691 162,374 156,450
Upon return of securities loaned .................................. 16,164,370 -- 30,319
Administration and transfer agent fees ............................ 153,280 156,071 178,345
Distribution fees - Class B ....................................... 66,477 53,394 41,008
Shareholder servicing fees ........................................ 44,635 34,578 30,639
Accrued expenses and other payables ................................. 21,264 5,700 16,172
------------- ------------- -------------
Total Liabilities ................................................. 19,449,480 479,047 3,304,393
------------- ------------- -------------
NET ASSETS .......................................................... $ 198,407,319 $ 165,604,341 $ 146,312,485
============= ============= =============
NET ASSETS CONSIST OF:
Paid-in capital ................................................... $ 203,883,432 $ 187,266,153 $ 170,339,200
Accumulated undistributed
Net investment income (loss) ...................................... (3,183) 410,979 (251,196)
Accumulated net realized gain (loss) on investments sold and
foreign currency related transactions ........................... (12,871,956) (26,453,046) (33,249,215)
Net unrealized appreciation (depreciation) of investments
(including appreciation (depreciation) of foreign currency
related transactions)......... .................................. 7,399,026 4,380,255 9,473,696
------------- ------------- -------------
NET ASSETS .......................................................... $ 198,407,319 $ 165,604,341 $ 146,312,485
============= ============= =============
CLASS A SHARES:
Net assets ........................................................ $ 91,925,048 $ 80,730,169 $ 81,323,868
Shares of beneficial interest outstanding ......................... 7,980,529 6,887,139 6,540,210
NET ASSET VALUE and redemption price per share .................... $ 11.52 $ 11.72 $ 12.43
Sales charge of offering price* ................................... 0.70 0.72 0.76
------------- ------------- -------------
Maximum offering price per share .................................. $ 12.22 $ 12.44 $ 13.19
============= ============= =============
CLASS B SHARES:
Net assets ........................................................ $ 106,482,271 $ 84,874,172 $ 64,988,617
Shares of beneficial interest outstanding ......................... 9,235,821 7,340,226 5,462,022
NET ASSET VALUE and redemption price per share** .................. $ 11.53 $ 11.56 $ 11.90
============= ============= =============
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MID-CAP MULTI-CAP INTERNATIONAL STOCK
FUND GROWTH FUND FUND
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ASSETS:
Investments:
Investments at cost ............................................... $ 48,789,027 $ 31,121,524 $ 37,303,313
Net unrealized appreciation (depreciation) ........................ 8,741,836 4,042,135 8,949,387
------------- ------------- -------------
Total investments at value ................................... 57,530,863 35,163,659 46,252,700
Cash .............................................................. -- -- --
Foreign currency (Cost $5,077 and $288,770, respectively) (Note2) . -- -- 289,736
Receivables:
Investments sold .................................................. 670,442 246,819 293,895
Fund shares sold .................................................. 98,056 114,253 24,157
Dividends and interest ............................................ 28,608 12,904 185,486
Net unrealized appreciation on foreign currency exchange contracts .. -- -- --
Prepaid insurance and registration fees ............................. 790 375 397
Prepaid Trustees' and other fees .................................... 2,459 2,347 939
------------- ------------- -------------
Total Assets ...................................................... 58,331,218 35,540,357 47,047,310
------------- ------------- -------------
LIABILITIES:
Payable to custodian ................................................ 24,167 -- --
Net unrealized depreciation on forward currency contracts ........... -- -- 556
Payables:
Investments purchased ............................................. 128,346 296,340 717,096
Due to Advisor, net ............................................... 40,240 14,969 37,373
Fund shares repurchased ........................................... 32,484 28,863 3,111
Upon return of securities loaned .................................. 1,580,145 854,385 --
Administration and transfer agent fees ............................ 57,881 38,245 34,583
Distribution fees - Class B ....................................... 12,109 7,902 4,457
Shareholder servicing fees ........................................ 11,823 7,142 9,706
Accrued expenses and other payables ................................. -- -- 6,866
------------- ------------- -------------
Total Liabilities ................................................. 1,887,195 1,247,846 813,748
------------- ------------- -------------
NET ASSETS .......................................................... $ 56,444,023 $ 34,292,511 $ 46,233,562
============= ============= =============
NET ASSETS CONSIST OF:
Paid-in capital ................................................... $ 49,565,410 $ 51,456,261 $ 47,230,415
Accumulated undistributed
Net investment income (loss) ...................................... (29,549) (143,749) 80,766
Accumulated net realized gain (loss) on investments sold and
foreign currency related transactions ........................... (1,833,674) (21,062,397) (9,978,799)
Net unrealized appreciation (depreciation) of investments
(including appreciation (depreciation) of foreign currency
related transactions)......... .................................. 8,741,836 4,042,396 8,901,180
------------- ------------- -------------
NET ASSETS .......................................................... $ 56,444,023 $ 34,292,511 $ 46,233,562
============= ============= =============
CLASS A SHARES:
Net assets ........................................................ $ 37,224,175 $ 21,759,166 $ 39,146,042
Shares of beneficial interest outstanding ......................... 3,111,354 4,568,270 3,979,947
NET ASSET VALUE and redemption price per share .................... $ 11.96 $ 4.76 $ 9.84
Sales charge of offering price* ................................... 0.73 0.29 0.60
------------- ------------- -------------
Maximum offering price per share .................................. $ 12.69 $ 5.05 $ 10.44
============= ============= =============
CLASS B SHARES:
Net assets ........................................................ $ 19,219,848 $ 12,533,345 $ 7,087,520
Shares of beneficial interest outstanding ......................... 1,647,647 2,714,606 728,119
NET ASSET VALUE and redemption price per share** .................. $ 11.67 $ 4.62 $ 9.73
============= ============= =============
See accompanying Notes to Financial Statements.
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
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52 STATEMENTS OF OPERATIONS FOR THE PERIOD ENDED APRIL 30, 2004 (UNAUDITED)
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CASH RESERVES BOND HIGH INCOME
FUND FUND FUND
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INVESTMENT INCOME:
Dividends .................................................... $ -- $ -- $ 12,351
Interest ..................................................... 123,252 3,390,917 2,480,184
Less:Foreign taxes withheld ................................ -- -- (274)
Securities lending income .................................... -- 15,069 12,738
-------------- -------------- --------------
Total investment income .................................... 123,252 3,405,986 2,504,999
-------------- -------------- --------------
EXPENSES:
Management fees ................................................ 45,399 353,284 163,164
Administration and transfer agent fees ......................... 28,428 154,027 60,902
Registration expenses .......................................... 11,883 18,556 11,450
Custodian and accounting fees .................................. 9,569 28,723 35,908
Professional fees .............................................. 1,803 5,062 2,530
Reports to shareholder expense ................................. 859 8,669 4,103
Trustees' fees ................................................. 806 4,206 1,577
Distribution fees - Class B .................................... 38,529 231,324 86,800
Shareholder servicing fees - Class A ........................... -- 99,534 45,235
Shareholder servicing fees - Class B ........................... -- 77,108 28,933
Other expenses ................................................. 1,249 5,100 2,001
-------------- -------------- --------------
Total expenses before reimbursement/waiver ................... 138,525 985,593 442,603
Less reimbursement/waiver .................................... (48,495) (118,316) (59,140)
-------------- -------------- --------------
Total expenses net of reimbursement/waiver ................... 90,030 867,277 383,463
-------------- -------------- --------------
NET INVESTMENT INCOME (LOSS) ................................... 33,222 2,538,709 2,121,536
-------------- -------------- --------------
NET UNREALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments (including net
realized gain On foreign currency related transactions) .... 8 (428,572) 380,997
Net change in unrealized appreciation (depreciation) on
investments (including a net unrealized appreciation
(depreciation) on foreign currency related transactions) ... -- (1,583,154) (278,662)
-------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ......... 8 (2,011,726) 102,335
-------------- -------------- --------------
NET INCREASE IN NET ASSETS FROM OPERATIONS ..................... $ 33,230 $ 526,983 $ 2,223,871
============== ============== ==============
See accompanying Notes to Financial Statements.
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
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53
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BALANCED GROWTH AND CAPITAL
FUND INCOME FUND APPRECIATION FUND
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INVESTMENT INCOME:
Dividends .................................................... $ 1,093,618 $ 1,833,756 $ 823,635
Interest ..................................................... 2,042,290 58,579 34,973
Less:Foreign taxes withheld ................................ (6,515) (8,088) --
Securities lending income .................................... 9,705 843 1,060
-------------- -------------- --------------
Total investment income .................................... 3,139,098 1,885,090 859,668
-------------- -------------- --------------
EXPENSES:
Management fees ................................................ 632,493 443,269 540,674
Administration and transfer agent fees ......................... 234,815 254,963 274,548
Registration expenses .......................................... 17,093 15,294 16,578
Custodian and accounting fees .................................. 31,603 22,535 21,269
Professional fees .............................................. 5,926 5,021 4,370
Reports to shareholder expense ................................. 12,135 11,121 9,984
Trustees' fees ................................................. 5,525 4,537 4,052
Distribution fees - Class B .................................... 395,347 317,209 245,782
Shareholder servicing fees - Class A ........................... 111,484 95,750 98,297
Shareholder servicing fees - Class B ........................... 131,782 105,737 81,927
Other expenses ................................................. 6,109 4,946 4,511
-------------- -------------- --------------
Total expenses before reimbursement/waiver ................... 1,584,312 1,280,382 1,301,992
Less reimbursement/waiver .................................... (118,593) (157,229) (191,128)
-------------- -------------- --------------
Total expenses net of reimbursement/waiver ................... 1,465,719 1,123,153 1,110,864
-------------- -------------- --------------
NET INVESTMENT INCOME (LOSS) ................................... 1,673,379 761,937 (251,196)
-------------- -------------- --------------
NET UNREALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments (including net
realized gain on foreign currency related transactions) .... (513,149) 141,928 601,603
Net change in unrealized appreciation (depreciation) on
investments(including a net unrealized appreciation
(depreciation) on foreign currency related transactions) ... 6,063,398 9,555,625 5,664,296
-------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ......... 5,550,249 9,697,553 6,265,899
-------------- -------------- --------------
NET INCREASE IN NET ASSETS FROM OPERATIONS ..................... $ 7,223,628 $ 10,459,490 $ 6,014,703
============== ============== ==============
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MID-CAP MULTI-CAP INTERNATIONAL STOCK
FUND GROWTH FUND FUND
- ----------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends .................................................... $ 399,319 $ 75,872 $ 544,655
Interest ..................................................... 10,060 5,383 2,446
Less:Foreign taxes withheld ................................ -- (1,403) (54,658)
Securities lending income .................................... 4,066 1,010 --
-------------- -------------- --------------
Total investment income .................................... 413,445 80,862 492,443
-------------- -------------- --------------
EXPENSES:
Management fees ................................................ 253,893 113,421 232,502
Administration and transfer agent fees ......................... 91,476 73,710 50,274
Registration expenses .......................................... 12,018 11,709 10,906
Custodian and accounting fees .................................. 15,473 14,801 55,798
Professional fees .............................................. 2,698 997 2,887
Reports to shareholder expense ................................. 4,050 2,268 3,038
Trustees' fees ................................................. 1,445 660 1,211
Distribution fees - Class B .................................... 68,830 43,139 24,951
Shareholder servicing fees - Class A ........................... 43,871 23,427 47,042
Shareholder servicing fees - Class B ........................... 22,943 14,380 8,317
Other expenses ................................................. 1,765 1,078 1,530
-------------- -------------- --------------
Total expenses before reimbursement/waiver ................... 518,462 299,590 438,456
Less reimbursement/waiver .................................... (75,468) (74,979) (59,237)
-------------- -------------- --------------
Total expenses net of reimbursement/waiver ................... 442,994 224,611 379,219
-------------- -------------- --------------
NET INVESTMENT INCOME (LOSS) ................................... (29,549) (143,749) 113,224
-------------- -------------- --------------
NET UNREALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments (including net
realized gain On foreign currency related transactions) .... 791,151 1,368,026 2,289,990
Net change in unrealized appreciation (depreciation) on
investments (including a net unrealized appreciation
(depreciation) on foreign currency related transactions) ... 2,829,409 482,028 2,049,374
-------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ......... 3,620,560 1,850,054 4,339,364
-------------- -------------- --------------
NET INCREASE IN NET ASSETS FROM OPERATIONS ..................... $ 3,591,011 $ 1,706,305 $ 4,452,588
============== ============== ==============
See accompanying Notes to Financial Statements.
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
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54 STATEMENTS OF CHANGES IN NET ASSETS
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CASH RESERVES BOND
FUND FUND
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SIX MONTHS SIX MONTHS
ENDED ENDED
APRIL 30, 2004 YEAR ENDED APRIL 30, 2004 YEAR ENDED
(UNAUDITED) OCTOBER 31, 2003 (UNAUDITED) OCTOBER 31, 2003
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS AT BEGINNING OF PERIOD ........................... $ 26,306,927 $ 34,123,598 $ 142,693,847 $ 123,586,409
------------- ------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income ..................................... 33,222 131,509 2,538,709 4,788,871
Net realized gain (loss) .................................. 8 1,584 (428,572) 356,246
Net change in unrealized appreciation (depreciation) ...... -- -- (1,583,154) (1,197,091)
------------- ------------- ------------- -------------
Net increase in net assets from operations ................ 33,230 133,093 526,983 3,948,026
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A ................................................. (33,230) (119,661) (1,561,969) (2,879,857)
Class B ................................................. -- (13,432) (976,740) (2,109,246)
Net realized gains
Class A ................................................. -- -- -- --
Class B ................................................. -- -- -- --
------------- ------------- ------------- -------------
Total distributions ..................................... (33,230) (133,093) (2,538,709) (4,989,103)
------------- ------------- ------------- -------------
CAPITAL SHARE TRANSACTIONS:
CLASS A SHARES
Shares sold ............................................. 1,649,630 6,650,455 13,358,529 34,514,506
Issued to shareholders in reinvestment of distributions.. 32,265 116,802 1,166,095 2,334,521
Shares redeemed ......................................... (4,449,044) (9,018,299) (9,919,142) (21,156,808)
Redemption Fees ......................................... -- -- 954 --
------------- ------------- ------------- -------------
Net increase (decrease) from capital share transactions.. (2,767,149) (2,251,042) 4,606,436 15,692,219
------------- ------------- ------------- -------------
CLASS B SHARES
Shares sold ............................................. 1,254,892 5,361,829 2,761,639 19,242,363
Issued to shareholders in reinvestment of distributions.. -- 11,975 897,631 1,943,030
Shares redeemed ......................................... (4,119,674) (10,939,433) (8,646,202) (16,729,097)
------------- ------------- ------------- -------------
Net increase (decrease) from capital share transactions.. (2,864,782) (5,565,629) (4,986,932) 4,456,296
------------- ------------- ------------- -------------
Total increase (decrease) in net assets ..................... (5,631,931) (7,816,671) (2,392,222) 19,107,438
------------- ------------- ------------- -------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A) .............. $ 20,674,996 $ 26,306,927 $ 140,301,625 $ 142,693,847
============= ============= ============= =============
(A) Undistributed net investment income (loss) .............. $ 2,125 $ 2,133 $ 37,300 $ 37,300
============= ============= ============= =============
OTHER INFORMATION:
CAPITAL SHARE TRANSACTIONS:
CLASS A SHARES
Shares sold ............................................. 1,649,630 6,650,455 1,312,836 3,371,187
Issued to shareholders in reinvestment of distributions.. 32,265 116,802 114,819 228,188
Shares redeemed ......................................... (4,449,044) (9,018,299) (975,665) (2,072,910)
------------- ------------- ------------- -------------
Net increase (decrease) in shares outstanding ........... (2,767,149) (2,251,042) 451,990 1,526,465
------------- ------------- ------------- -------------
CLASS B SHARES
Shares sold ............................................. 1,254,892 5,361,829 271,209 1,878,376
Issued to shareholders in reinvestment of distributions.. -- 11,975 88,381 189,937
Shares redeemed ......................................... (4,119,674) (10,939,433) (849,769) (1,638,293)
------------- ------------- ------------- -------------
Net increase (decrease) in shares outstanding ........... (2,864,782) (5,565,629) (490,179) 430,020
------------- ------------- ------------- -------------
See accompanying Notes to Financial Statements.
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
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55
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HIGH INCOME BALANCED
FUND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED ENDED
APRIL 30, 2004 YEAR ENDED APRIL 30, 2004 YEAR ENDED
(UNAUDITED) OCTOBER 31, 2003 (UNAUDITED) OCTOBER 31, 2003
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS AT BEGINNING OF PERIOD ........................... $ 55,015,483 $ 33,615,728 $ 184,392,585 $ 161,291,500
------------- ------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income ..................................... 2,121,536 3,247,553 1,673,379 3,290,800
Net realized gain (loss) .................................. 380,997 (610,601) (513,149) (6,720,304)
Net change in unrealized appreciation (depreciation) ...... (278,662) 5,343,952 6,063,398 23,092,033
------------- ------------- ------------- -------------
Net increase in net assets from operations ................ 2,223,871 7,980,904 7,223,628 19,662,529
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A ................................................. (1,382,585) (1,953,581) (952,014) (1,810,597)
Class B ................................................. (792,233) (1,303,045) (720,952) (1,539,999)
Net realized gains
Class A ................................................. -- -- -- --
Class B ................................................. -- -- -- --
------------- ------------- ------------- -------------
Total distributions ..................................... (2,174,818) (3,256,626) (1,672,966) (3,350,596)
------------- ------------- ------------- -------------
CAPITAL SHARE TRANSACTIONS:
CLASS A SHARES
Shares sold ............................................. 8,295,479 14,165,543 11,838,354 18,447,908
Issued to shareholders in reinvestment of distributions . 842,732 1,279,144 939,829 1,784,694
Shares redeemed ......................................... (3,236,654) (3,165,724) (6,964,936) (14,351,848)
Redemption Fees ......................................... 80 -- -- --
------------- ------------- ------------- -------------
Net increase (decrease) from capital share transactions . 5,901,637 12,278,963 5,813,247 5,880,754
------------- ------------- ------------- -------------
CLASS B SHARES
Shares sold ............................................. 2,730,271 7,128,350 9,135,668 16,463,827
Issued to shareholders in reinvestment of distributions . 629,244 1,024,743 703,909 1,506,439
Shares redeemed ......................................... (1,692,464) (3,756,579) (7,188,752) (17,061,868)
------------- ------------- ------------- -------------
Net increase (decrease) from capital share transactions . 1,667,051 4,396,514 2,650,825 908,398
------------- ------------- ------------- -------------
Total increase (decrease) in net assets ..................... 7,617,741 21,399,755 14,014,734 23,101,085
------------- ------------- ------------- -------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A) .............. $ 62,633,224 $ 55,015,483 $ 198,407,319 $ 184,392,585
============= ============= ============= =============
(A) Undistributed net investment income (loss) .............. $ 76,072 $ 129,354 $ (3,183) $ (3,596)
============= ============= ============= =============
OTHER INFORMATION:
CAPITAL SHARE TRANSACTIONS:
CLASS A SHARES
Shares sold ............................................. 1,105,737 2,010,041 1,019,399 1,768,275
Issued to shareholders in reinvestment of distributions . 113,144 182,036 81,070 170,700
Shares redeemed ......................................... (431,653) (448,775) (598,428) (1,386,137)
------------- ------------- ------------- -------------
Net increase (decrease) in shares outstanding ........... 787,228 1,743,302 502,041 552,838
------------- ------------- ------------- -------------
CLASS B SHARES
Shares sold ............................................. 363,338 1,010,973 782,836 1,533,952
Issued to shareholders in reinvestment of distributions . 84,286 145,682 60,706 144,313
Shares redeemed ......................................... (225,691) (535,627) (615,526) (1,607,072)
------------- ------------- ------------- -------------
Net increase (decrease) in shares outstanding ........... 221,933 621,028 228,016 71,193
------------- ------------- ------------- -------------
- ------------------------------------------------------------------------------------------------
GROWTH AND INCOME
FUND
- ------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
APRIL 30, 2004 YEAR ENDED
(UNAUDITED) OCTOBER 31, 2003
- ------------------------------------------------------------------------------------------------
NET ASSETS AT BEGINNING OF PERIOD ........................... $ 148,170,626 $ 126,224,262
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income ..................................... 761,937 1,146,296
Net realized gain (loss) .................................. 141,928 (9,827,820)
Net change in unrealized appreciation (depreciation) ...... 9,555,625 30,800,834
------------- -------------
Net increase in net assets from operations ................ 10,459,490 22,119,310
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A ................................................. (804,489) (472,121)
Class B ................................................. (377,317) (174,442)
Net realized gains
Class A ................................................. -- --
Class B ................................................. -- --
------------- -------------
Total distributions ..................................... (1,181,806) (646,563)
------------- -------------
CAPITAL SHARE TRANSACTIONS:
CLASS A SHARES
Shares sold ............................................. 11,953,415 17,771,499
Issued to shareholders in reinvestment of distributions . 794,874 453,660
Shares redeemed ......................................... (4,600,926) (13,309,076)
Redemption Fees ......................................... -- --
------------- -------------
Net increase (decrease) from capital share transactions . 8,147,363 4,916,083
------------- -------------
CLASS B SHARES
Shares sold ............................................. 5,512,369 9,222,020
Issued to shareholders in reinvestment of distributions . 368,188 172,432
Shares redeemed ......................................... (5,871,889) (13,836,918)
------------- -------------
Net increase (decrease) from capital share transactions . 8,668 (4,442,466)
------------- -------------
Total increase (decrease) in net assets ..................... 17,433,715 21,946,364
------------- -------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A) .............. $ 165,604,341 $ 148,170,626
============= =============
(A) Undistributed net investment income (loss) .............. $ 410,979 $ 830,848
============= =============
OTHER INFORMATION:
CAPITAL SHARE TRANSACTIONS:
CLASS A SHARES
Shares sold ............................................. 1,018,173 1,787,581
Issued to shareholders in reinvestment of distributions . 68,113 48,409
Shares redeemed ......................................... (392,141) (1,393,405)
------------- -------------
Net increase (decrease) in shares outstanding ........... 694,145 442,585
------------- -------------
CLASS B SHARES
Shares sold ............................................. 476,572 944,572
Issued to shareholders in reinvestment of distributions . 31,905 18,539
Shares redeemed ......................................... (506,299) (1,456,011)
------------- -------------
Net increase (decrease) in shares outstanding ........... 2,178 (492,900)
------------- -------------
See accompanying Notes to Financial Statements.
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
56 STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
CAPITAL APPRECIATION MID-CAP
FUND FUND
- ----------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED
APRIL 30, 2004 YEAR ENDED APRIL 30, 2004 YEAR ENDED
(UNAUDITED) OCTOBER 31, 2003 (UNAUDITED) OCTOBER 31, 2003
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS AT BEGINNING OF PERIOD .................... $ 134,565,037 $ 110,464,831 $ 48,311,492 $ 34,415,066
------------- ------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income .............................. (251,196) (362,743) (29,549) (32,425)
Net realized gain (loss) ........................... 601,603 (13,902,776) 791,151 (810,008)
Net change in unrealized appreciation (depreciation) 5,664,296 38,761,664 2,829,409 11,016,333
------------- ------------- ------------- -------------
Net increase in net assets from operations ......... 6,014,703 24,496,145 3,591,011 10,173,900
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A .......................................... -- -- -- --
Class B .......................................... -- -- -- --
Net realized gains
Class A .......................................... -- -- -- --
Class B .......................................... -- -- -- --
------------- ------------- ------------- -------------
Total distributions .............................. -- -- -- --
------------- ------------- ------------- -------------
CAPITAL STOCK TRANSACTIONS:
CLASS A SHARES
Shares sold ...................................... 10,926,254 21,428,076 4,805,807 5,249,495
Issued to shareholders in reinvestment of
distributions .................................. -- -- -- --
Shares redeemed .................................. (4,648,333) (18,606,399) (1,602,078) (3,087,968)
Redemption Fees .................................. -- -- -- --
------------- ------------- ------------- -------------
Net increase (decrease) from capital stock
transactions ................................... 6,277,921 2,821,677 3,203,729 2,161,527
------------- ------------- ------------- -------------
CLASS B SHARES
Shares sold ...................................... 3,767,730 7,443,998 2,397,512 3,617,100
Issued to shareholders in reinvestment of
distributions .................................. -- -- -- --
Shares redeemed .................................. (4,312,906) (10,661,614) (1,059,721) (2,056,101)
------------- ------------- ------------- -------------
Net increase (decrease) from capital stock
transactions.................................... (545,176) (3,217,616) 1,337,791 1,560,999
------------- ------------- ------------- -------------
Total increase (decrease) in net assets .............. 11,747,448 24,100,206 8,132,531 13,896,426
------------- ------------- ------------- -------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A) ....... $ 146,312,485 $ 134,565,037 $ 56,444,023 $ 48,311,492
============= ============= ============= =============
(A) Undistributed net investment income (loss) ....... $ (251,196) $ -- $ (29,549) $ --
============= ============= ============= =============
OTHER INFORMATION:
CAPITAL SHARE TRANSACTIONS:
CLASS A SHARES
Shares sold ...................................... 874,498 2,090,566 405,163 548,389
Issued to shareholders in reinvestment of
distributions .................................. -- -- -- --
Shares redeemed .................................. (370,376) (1,854,922) (134,857) (329,777)
------------- ------------- ------------- -------------
Net increase (decrease) in shares outstanding .... 504,122 235,644 270,306 218,612
------------- ------------- ------------- -------------
CLASS B SHARES
Shares sold ...................................... 310,917 733,844 205,598 380,861
Issued to shareholders in reinvestment of
distributions .................................. -- -- -- --
Shares redeemed .................................. (358,598) (1,087,117) (90,429) (226,039)
------------- ------------- ------------- -------------
Net increase (decrease) in shares outstanding .... (47,681) (353,273) 115,169 154,822
------------- ------------- ------------- -------------
See accompanying Notes to Financial Statements.
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
- --------------------------------------------------------------------------------
57
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
MULTI-CAP GROWTH INTERNATIONAL STOCK
FUND FUND
- ----------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED
APRIL 30, 2004 YEAR ENDED APRIL 30, 2004 YEAR ENDED
(UNAUDITED) OCTOBER 31, 2003 (UNAUDITED) OCTOBER 31, 2003
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS AT BEGINNING OF PERIOD .................... $ 24,300,185 $ 13,965,505 $ 39,470,149 $ 30,322,989
------------- ------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income .............................. (143,749) (125,701) 113,224 391,549
Net realized gain (loss) ........................... 1,368,026 458,015 2,289,990 (1,565,592)
Net change in unrealized appreciation (depreciation) 482,028 4,064,829 2,049,374 9,799,283
------------- ------------- ------------- -------------
Net increase in net assets from operations ......... 1,706,305 4,397,143 4,452,588 8,625,240
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A .......................................... -- -- (366,092) (212,471)
Class B .......................................... -- -- (5,505) (404)
Net realized gains
Class A .......................................... -- -- -- --
Class B .......................................... -- -- -- --
------------- ------------- ------------- -------------
Total distributions .............................. -- -- (371,597) (212,875)
------------- ------------- ------------- -------------
CAPITAL STOCK TRANSACTIONS:
CLASS A SHARES
Shares sold ...................................... 7,456,737 5,641,381 2,164,917 1,435,692
Issued to shareholders in reinvestment of
distributions .................................. -- -- 355,484 206,495
Shares redeemed .................................. (1,121,776) (1,789,330) (493,548) (911,371)
Redemption Fees .................................. -- -- -- --
------------- ------------- ------------- -------------
Net increase (decrease) from capital stock
transactions ................................... 6,334,961 3,852,051 2,026,853 730,816
------------- ------------- ------------- -------------
CLASS B SHARES
Shares sold ...................................... 2,611,398 3,219,398 1,102,557 897,473
Issued to shareholders in reinvestment of
distributions .................................. -- -- 5,362 393
Shares redeemed .................................. (660,338) (1,133,912) (452,350) (893,887)
------------- ------------- ------------- -------------
Net increase (decrease) from capital stock
transactions ................................... 1,951,060 2,085,486 655,569 3,979
------------- ------------- ------------- -------------
Total increase (decrease) in net assets .............. 9,992,326 10,334,680 6,763,413 9,147,160
------------- ------------- ------------- -------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A) ....... $ 34,292,511 $ 24,300,185 $ 46,233,562 $ 39,470,149
============= ============= ============= =============
(A) Undistributed net investment income (loss) ....... $ (143,749) $ -- $ 80,766 $ 339,139
============= ============= ============= =============
OTHER INFORMATION:
CAPITAL SHARE TRANSACTIONS:
CLASS A SHARES
Shares sold ...................................... 1,583,290 1,437,061 220,388 189,540
Issued to shareholders in reinvestment of
distributions .................................. -- -- 36,953 29,122
Shares redeemed .................................. (235,153) (482,877) (49,787) (122,562)
------------- ------------- ------------- -------------
Net increase (decrease) in shares outstanding .... 1,348,137 954,184 207,554 96,100
------------- ------------- ------------- -------------
CLASS B SHARES
Shares sold ...................................... 568,165 845,667 112,606 119,456
Issued to shareholders in reinvestment of
distributions .................................. -- -- 562 56
Shares redeemed .................................. (142,635) (323,851) (46,038) (125,194)
------------- ------------- ------------- -------------
Net increase (decrease) in shares outstanding .... 425,530 521,816 67,130 (5,682)
------------- ------------- ------------- -------------
See accompanying Notes to Financial Statements.
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
58 FINANCIAL HIGHLIGHTS FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING
THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
CASH RESERVES FUND
------------------------------------------------------------
SIX MONTHS
ENDED 04/30/04 YEAR ENDED YEAR ENDED
(UNAUDITED) 10/31/2003 10/31/2002
-------------- -------------- --------------
CLASS A
- -------
Net Asset Value, Beginning of Period ................. $ 1.00 $ 1.00 $ 1.00
-------------- -------------- --------------
Income from Investment Operations:
Net investment income .......................... 0.00* 0.00* 0.01
-------------- -------------- --------------
Total from investment operations ............ -- -- 0.01
-------------- -------------- --------------
Less Distributions:
Distributions from net investment income ....... (0.00)* (0.00)* (0.01)
-------------- -------------- --------------
Total distributions ......................... -- -- (0.01)
-------------- -------------- --------------
Net increase (decrease) in net asset value ........... -- -- --
-------------- -------------- --------------
Net Asset Value, End of Period ....................... $ 1.00 $ 1.00 $ 1.00
============== ============== ==============
Total Return[dagger] ................................. 0.27%(1) 0.75% 1.57%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ................. $ 11,469 $ 14,236 $ 16,487
Ratios of expenses to average net assets
Before reimbursement of expenses by Advisor ....... 0.88%(2) 0.87% 0.99%
After reimbursement of expenses by Advisor ........ 0.55%(2) 0.55% 0.55%
Ratios of net investment income to average net assets:
After reimbursement of expenses by Advisor ....... 0.54%(2) 0.75% 1.46%
CLASS B
- -------
Net Asset Value, Beginning of Period.................. $ 1.00 $ 1.00 $ 1.00
-------------- -------------- --------------
Income from Investment Operations:
Net investment income........................... -- 0.00* 0.01
-------------- -------------- --------------
Total from investment operations............. -- -- 0.01
-------------- -------------- --------------
Less Distributions:
Distributions from net investment income........ -- (0.00)* (0.01)
-------------- -------------- --------------
Total distributions.......................... -- (0.01)
-------------- -------------- --------------
Net increase (decrease) in net asset value............ -- -- --
-------------- -------------- --------------
Net Asset Value, End of Period........................ $ 1.00 $ 1.00 $ 1.00
============== ============== ==============
Total Return[dagger] ................................. 0.00%(1) 0.08% 0.81%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's).................. $ 9,206 $ 12,071 $ 17,636
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor........ 1.63%(2) 1.62% 1.74%
After reimbursement of expenses by Advisor......... 1.09%(2)** 1.23% 1.30%
Ratios of net investment income to average net assets:
After reimbursement of expenses by Advisor......... 0.00%(2)** 0.08% 0.71%
CASH RESERVES FUND
------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
10/31/2001 10/31/2000 10/31/1999
-------------- -------------- --------------
CLASS A
- -------
Net Asset Value, Beginning of Period ................. $ 1.00 $ 1.00 $ 1.00
-------------- -------------- --------------
Income from Investment Operations:
Net investment income .......................... 0.04 0.06 0.05
-------------- -------------- --------------
Total from investment operations ............ 0.04 0.06 0.05
-------------- -------------- --------------
Less Distributions:
Distributions from net investment income ....... (0.04) (0.06) (0.05)
-------------- -------------- --------------
Total distributions ......................... (0.04) (0.06) (0.05)
-------------- -------------- --------------
Net increase (decrease) in net asset value ........... -- -- --
-------------- -------------- --------------
Net Asset Value, End of Period ....................... $ 1.00 $ 1.00 $ 1.00
============== ============== ==============
Total Return[dagger] ................................. 4.50% 5.77% 4.60%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ................. $ 11,508 $ 5,104 $ 4,481
Ratios of expenses to average net assets
Before reimbursement of expenses by Advisor ....... 1.25% 2.07% 2.63%
After reimbursement of expenses by Advisor ........ 0.55% 0.55% 0.55%
Ratios of net investment income to average net assets:
After reimbursement of expenses by Advisor ....... 3.96% 5.61% 4.41%
CLASS B
- -------
Net Asset Value, Beginning of Period ................. $ 1.00 $ 1.00 $ 1.00
-------------- -------------- --------------
Income from Investment Operations:
Net investment income .......................... 0.04 0.05 0.04
-------------- -------------- --------------
Total from investment operations ............ 0.04 0.05 0.04
-------------- -------------- --------------
Less Distributions:
Distributions from net investment income ....... (0.04) (0.05) (0.04)
-------------- -------------- --------------
Total distributions ......................... (0.04) (0.05) (0.04)
-------------- -------------- --------------
Net increase (decrease) in net asset value ........... -- -- --
-------------- -------------- --------------
Net Asset Value, End of Period ....................... $ 1.00 $ 1.00 $ 1.00
============== ============== ==============
Total Return[dagger] ................................. 3.72% 4.97% 3.81%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ................. $ 9,571 $ 2,865 $ 3,501
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor ....... 2.00% 2.82% 3.38%
After reimbursement of expenses by Advisor ........ 1.30% 1.30% 1.30%
Ratios of net investment income to average net assets:
After reimbursement of expenses by Advisor ........ 3.21% 4.86% 3.92%
_______________________________________________________
(1) Not annualized
(2) Annualized
[dagger] Total return without applicable sales charge
(*) Amounts represents less than $0.005 per share
(**) During the period, the Investment Advisor agreed to waive certain
distribution fee expenses specifically attributable to Class B shares.
These amounts are in addition to those required by the Fund's
contractual expense limitations. Had these amounts not been waived,
the ratios of expense and net investment income, both after
reimbursement, would have been 1.30% and 0.00%, respectively.
See accompanying Notes to Financial Statements.
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING
THROUGHOUT EACH PERIOD 59
- --------------------------------------------------------------------------------
BOND FUND
------------------------------------------------------------
SIX MONTHS
ENDED 04/30/04 YEAR ENDED YEAR ENDED
(UNAUDITED) 10/31/2003 10/31/2002
-------------- -------------- --------------
CLASS A
- -------
Net Asset Value, Beginning of Period ................. $ 10.12 $ 10.17 $ 10.23
-------------- -------------- --------------
Income from Investment Operations:
Net investment income .......................... 0.20 0.40 0.47
Net realized and unrealized gain (loss) on
investments ................................. (0.14) (0.05) (0.06)(c)
-------------- -------------- --------------
Total from investment operations ............ 0.06 0.35 0.41
-------------- -------------- --------------
Less Distributions:
Distributions from net investment income ....... (0.20) (0.40) (0.47)
Distributions from capital gains ............... -- -- --
-------------- -------------- --------------
Total distributions ......................... (0.20) (0.40) (0.47)
-------------- -------------- --------------
Net increase (decrease) in net asset value ........... (0.14) (0.05) (0.06)
-------------- -------------- --------------
Net Asset Value, End of Period ....................... $ 9.98 $ 10.12 $ 10.17
============== ============== ==============
Total Return[dagger] ................................. 0.55%(1) 3.51% 4.21%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ................. $ 81,573 $ 78,165 $ 63,069
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor ....... 1.07%(2) 1.10% 1.17%
After reimbursement of expenses by Advisor ........ 0.90%(2) 0.90% 0.90%
Ratios of net investment income to average net assets:
After reimbursement of expenses by Advisor ........ 3.92%(2) 3.94% 4.62%
Portfolio Turnover ................................... 56% 75% 90%
CLASS B
- -------
Net Asset Value, Beginning of Period ................. $ 10.12 $ 10.18 $ 10.24
-------------- -------------- --------------
Income from Investment Operations:
Net investment income .......................... 0.16 0.33 0.39
Net realized and unrealized gain (loss) on
investments ................................. (0.14) (0.06) (0.05)(c)
-------------- -------------- --------------
Total from investment operations ............ 0.02 0.27 0.34
-------------- -------------- --------------
Less Distributions:
Distributions from net investment income ....... (0.16) (0.33) (0.40)
Distributions from capital gains ............... -- -- --
-------------- -------------- --------------
Total distributions ......................... (0.16) (0.33) (0.40)
-------------- -------------- --------------
Net increase (decrease) in net asset value ........... (0.14) (0.06) (0.06)
-------------- -------------- --------------
Net Asset Value, End of Period ....................... $ 9.98 $ 10.12 $ 10.18
============== ============== ==============
Total Return[dagger] ................................. 0.18%(1) 2.64% 3.44%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ................. $ 58,728 $ 64,529 $ 60,517
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor ....... 1.82%(2) 1.85% 1.92%
After reimbursement of expenses by Advisor ........ 1.65%(2) 1.65% 1.65%
Ratios of net investment income to average net assets:
After reimbursement of expenses by Advisor ........ 3.17%(2) 3.19% 3.87%
Portfolio Turnover ................................... 56% 75% 90%
BOND FUND
------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
10/31/2001 10/31/2000 10/31/1999
-------------- -------------- --------------
CLASS A
- -------
Net Asset Value, Beginning of Period ................. $ 9.57 $ 9.74 $ 10.14
-------------- -------------- --------------
Income from Investment Operations:
Net investment income .......................... 0.55 0.63 0.51
Net realized and unrealized gain (loss)on
investments 0.67 (0.17) (0.35)
-------------- -------------- --------------
Total from investment operations ............ 1.22 0.46 0.16
-------------- -------------- --------------
Less Distributions:
Distributions from net investment income ....... (0.56) (0.63) (0.51)
Distributions from capital gains ............... -- -- (0.05)
-------------- -------------- --------------
Total distributions ......................... (0.56) (0.63) (0.56)
-------------- -------------- --------------
Net increase (decrease) in net asset value ........... 0.66 (0.17) (0.40)
-------------- -------------- --------------
Net Asset Value, End of Period ....................... $ 10.23 $ 9.57 $ 9.74
============== ============== ==============
Total Return[dagger] ................................. 13.07% 4.89% 1.60%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ................. $ 28,813 $ 13,279 $ 7,991
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor ....... 1.28% 1.66% 2.02%
After reimbursement of expenses by Advisor ........ 0.90% 0.90% 0.90%
Ratios of net investment income to average net assets:
After reimbursement of expenses by Advisor ........ 5.53% 6.52% 5.18%
Portfolio Turnover ................................... 109% 366% 725%
CLASS B
- -------
Net Asset Value, Beginning of Period ................. $ 9.58 $ 9.75 $ 10.14
-------------- -------------- --------------
Income from Investment Operations:
Net investment income .......................... 0.48 0.55 0.44
Net realized and unrealized gain (loss) on
investments ................................. 0.66 (0.17) (0.35)
-------------- -------------- --------------
Total from investment operations ............ 1.14 0.38 0.09
-------------- -------------- --------------
Less Distributions:
Distributions from net investment income ....... (0.48) (0.55) (0.44)
Distributions from capital gains ............... -- -- (0.04)
-------------- -------------- --------------
Total distributions ......................... (0.48) (0.55) (0.48)
-------------- -------------- --------------
Net increase (decrease) in net asset value ........... 0.66 (0.17) (0.39)
-------------- -------------- --------------
Net Asset Value, End of Period ....................... $ 10.24 $ 9.58 $ 9.75
============== ============== ==============
Total Return[dagger] ................................. 12.23% 4.10% 0.94%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ................. $ 31,119 $ 10,982 $ 7,508
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor ....... 2.03% 2.41% 2.77%
After reimbursement of expenses by Advisor ........ 1.65% 1.65% 1.65%
Ratios of net investment income to average net assets:
After reimbursement of expenses by Advisor ........ 4.78% 5.77% 4.58%
Portfolio Turnover ................................... 109% 366% 725%
_______________________________________________________
(1) Not annualized
(2) Annualized
[dagger] Total return without applicable sales charge.
(c) The amount shown for a share outstanding does not correspond with the
aggregate net gain (loss) on investments due to the timing of sales
and repurchases of shares in relation to fluctuating market values of
the investments of the Fund.
See accompanying Notes to Financial Statements.
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
60 FINANCIAL HIGHLIGHTS FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING
THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
HIGH INCOME FUND
------------------------------------------------------------
SIX MONTHS
ENDED 04/30/04 YEAR ENDED YEAR ENDED
(UNAUDITED) 10/31/2003 10/31/2002
-------------- -------------- --------------
CLASS A
- -------
Net Asset Value, Beginning of Period ................. $ 7.36 $ 6.57 $ 7.13
-------------- -------------- --------------
Income from Investment Operations:
Net investment income .......................... 0.27 0.54 0.58
Net realized and unrealized gain (loss) on
investments ................................. 0.03 0.80 (0.55)
-------------- -------------- --------------
Total from investment operations ............ 0.30 1.34 0.03
-------------- -------------- --------------
Less Distributions:
Distributions from net investment income ....... (0.28) (0.55) (0.59)
Distributions from capital gains ............... -- -- --
-------------- -------------- --------------
Total distributions ......................... (0.28) (0.55) (0.59)
-------------- -------------- --------------
Net increase (decrease) in net asset value ........... 0.02 0.79 (0.56)
-------------- -------------- --------------
Net Asset Value, End of Period ....................... 7.38 $ 7.36 $ 6.57
============== ============== ==============
Total Return[dagger] ................................. 4.15%(1) 21.09% 0.33%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ................. $ 38,931 $ 33,024 $ 18,055
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor ....... 1.20%(2) 1.38% 1.59%
After reimbursement of expenses by Advisor ........ 1.00%(2) 1.00% 1.00%
Ratios of net investment income to average net assets:
After reimbursement of expenses by Advisor ........ 7.44%(2) 7.73% 8.55%
Portfolio Turnover ................................... 29% 58% 47%
CLASS B
- -------
Net Asset Value, Beginning of Period ................. $ 7.37 $ 6.59 $ 7.14
-------------- -------------- --------------
Income from Investment Operations:
Net investment income .......................... 0.25 0.49 0.54
Net realized and unrealized gain (loss) on
investments ................................. 0.04 0.78 (0.55)
-------------- -------------- --------------
Total from investment operations............. 0.29 1.27 (0.01)
-------------- -------------- --------------
Less Distributions:
Distributions from net investment income ....... (0.26) (0.49) (0.54)
Distributions from capital gains ............... -- -- --
-------------- -------------- --------------
Total distributions ......................... (0.26) (0.49) (0.54)
-------------- -------------- --------------
Net increase (decrease) in net asset value ........... 0.03 0.78 (0.55)
-------------- -------------- --------------
Net Asset Value, End of Period ....................... $ 7.40 $ 7.37 $ 6.59
============== ============== ==============
Total Return[dagger] ................................. 3.89%(1) 19.96% (0.27)%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ................. $ 23,702 $ 21,992 $ 15,561
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor ....... 1.95%(2) 2.13% 2.34%
After reimbursement of expenses by Advisor ........ 1.75%(2) 1.75% 1.75%
Ratios of net investment income to average net assets:
After reimbursement of expenses by Advisor ........ 6.69%(2) 6.98% 7.80%
Portfolio Turnover ................................... 29% 58% 47%
HIGH INCOME FUND
------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
10/31/2001 10/31/2000 10/31/1999
-------------- -------------- --------------
CLASS A
- -------
Net Asset Value, Beginning of Period ................. $ 8.02 $ 8.88 $ 8.85
-------------- -------------- --------------
Income from Investment Operations:
Net investment income .......................... 0.74 0.81 0.80
Net realized and unrealized gain (loss) on
investments ................................. (0.88) (0.86) 0.06
-------------- -------------- --------------
Total from investment operations ............ (0.14) (0.05) 0.86
-------------- -------------- --------------
Less Distributions:
Distributions from net investment income ....... (0.75) (0.81) (0.80)
Distributions from capital gains ............... -- -- (0.03)
-------------- -------------- --------------
Total distributions ......................... (0.75) (0.81) (0.83)
-------------- -------------- --------------
Net increase (decrease) in net asset value ........... (0.89) (0.86) 0.03
-------------- -------------- --------------
Net Asset Value, End of Period ....................... $ 7.13 $ 8.02 $ 8.88
============== ============== ==============
Total Return[dagger] ................................. (1.94)% (0.81)% 9.69%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ................. $ 10,939 $ 8,394 $ 7,879
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor ....... 1.68% 1.62% 1.97%
After reimbursement of expenses by Advisor ........ 1.00% 1.00% 1.00%
Ratios of net investment income to average net assets:
After reimbursement of expenses by Advisor ........ 9.75% 9.40% 8.72%
Portfolio Turnover ................................... 38% 41% 48%
CLASS B
- -------
Net Asset Value, Beginning of Period ................. $ 8.04 $ 8.90 $ 8.85
-------------- -------------- --------------
Income from Investment Operations:
Net investment income .......................... 0.69 0.75 0.74
Net realized and unrealized gain (loss) on
investments ................................. (0.89) (0.86) 0.06
-------------- -------------- --------------
Total from investment operations ............ (0.20) (0.11) 0.80
-------------- -------------- --------------
Less Distributions:
Distributions from net investment income ....... (0.70) (0.75) (0.74)
Distributions from capital gains ............... -- -- (0.01)
-------------- -------------- --------------
Total distributions ......................... (0.70) (0.75) (0.75)
-------------- -------------- --------------
Net increase (decrease) in net asset value ........... (0.90) (0.86) 0.05
-------------- -------------- --------------
Net Asset Value, End of Period ....................... $ 7.14 $ 8.04 $ 8.90
============== ============== ==============
Total Return[dagger] ................................. (2.77)% (1.54)% 9.02%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ................. $ 15,063 $ 12,271 $ 9,399
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor ....... 2.43% 2.37% 2.72%
After reimbursement of expenses by Advisor ........ 1.75% 1.75% 1.75%
Ratios of net investment income to average net assets:
After reimbursement of expenses by Advisor ........ 9.00% 8.65% 8.13%
Portfolio Turnover ................................... 38% 41% 48%
_______________________________________________________
(1) Not annualized.
(2) Annualized.
[dagger] Total return without applicable sales charge.
See accompanying Notes to Financial Statements.
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING
THROUGHOUT EACH PERIOD 61
- --------------------------------------------------------------------------------
BALANCED FUND
------------------------------------------------------------
SIX MONTHS
ENDED 04/30/04 YEAR ENDED YEAR ENDED
(UNAUDITED) 10/31/2003 10/31/2002
-------------- -------------- --------------
CLASS A
- -------
Net Asset Value, Beginning of Period ................. $ 11.18 $ 10.16 $ 11.28
-------------- -------------- --------------
Income from Investment Operations:
Net investment income .......................... 0.12 0.25 0.28
Net realized and unrealized gain (loss) on
investments ................................. 0.34 1.02 (1.12)
-------------- -------------- --------------
Total from investment operations ............ 0.46 1.27 (0.84)
-------------- -------------- --------------
Less Distributions:
Distributions from net investment income ....... (0.12) (0.25) (0.28)
Distributions from capital gains ............... -- -- (0.00)*
-------------- -------------- --------------
Total distributions ......................... (0.12) (0.25) (0.28)
-------------- -------------- --------------
Net increase (decrease) in net asset value ........... 0.34 1.02 (1.12)
-------------- -------------- --------------
Net Asset Value, End of Period ....................... $ 11.52 $ 11.18 $ 10.16
============== ============== ==============
Total Return[dagger] ................................. 4.14%(1) 12.72% (7.59)%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ................. $ 91,925 $ 83,606 $ 70,389
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor ....... 1.22%(2) 1.32% 1.30%
After reimbursement of expenses by Advisor ........ 1.10%(2) 1.10% 1.10%
Ratios of net investment income to average net assets:
After reimbursement of expenses by Advisor ........ 2.13%(2) 2.38% 2.56%
Portfolio Turnover ................................... 26% 35% 48%
CLASS B
- -------
Net Asset Value, Beginning of Period ................. $ 11.19 $ 10.17 $ 11.29
-------------- -------------- --------------
Income from Investment Operations:
Net investment income .......................... 0.08 0.17 0.20
Net realized and unrealized gain (loss) on
investments ................................. 0.34 1.02 (1.12)
-------------- -------------- --------------
Total from investment operations ............ 0.42 1.19 (0.92)
-------------- -------------- --------------
Less Distributions:
Distributions from net investment income ....... (0.08) (0.17) (0.20)
Distributions from capital gains ............... -- -- (0.00)*
-------------- -------------- --------------
Total distributions ......................... (0.08) (0.17) (0.20)
-------------- -------------- --------------
Net increase (decrease) in net asset value ........... 0.34 1.02 (1.12)
-------------- -------------- --------------
Net Asset Value, End of Period ....................... $ 11.53 $ 11.19 $ 10.17
============== ============== ==============
Total Return[dagger] ................................. 3.74%(1) 11.87% (8.27)%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ................. $ 106,482 $ 100,787 $ 90,903
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor ....... 1.97%(2) 2.07% 2.05%
After reimbursement of expenses by Advisor ........ 1.85%(2) 1.85% 1.85%
Ratios of net investment income to average net assets:
After reimbursement of expenses by Advisor ........ 1.38%(2) 1.63% 1.81%
Portfolio Turnover ................................... 26% 35% 48%
BALANCED FUND
------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
10/31/2001 10/31/2000 10/31/1999
-------------- -------------- --------------
CLASS A
- -------
Net Asset Value, Beginning of Period ................. $ 12.65 $ 12.05 $ 10.68
-------------- -------------- --------------
Income from Investment Operations:
Net investment income .......................... 0.30 0.34 0.27
Net realized and unrealized gain (loss) on
investments ................................. (1.37) 0.69 1.38
-------------- -------------- --------------
Total from investment operations ............ (1.07) 1.03 1.65
-------------- -------------- --------------
Less Distributions:
Distributions from net investment income ....... (0.30) (0.35) (0.27)
Distributions from capital gains ............... -- (0.08) (0.01)
-------------- -------------- --------------
Total distributions ......................... (0.30) (0.43) (0.28)
-------------- -------------- --------------
Net increase (decrease) in net asset value ........... (1.37) 0.60 1.37
-------------- -------------- --------------
Net Asset Value, End of Period ....................... $ 11.28 $ 12.65 $ 12.05
============== ============== ==============
Total Return[dagger] ................................. (8.54)% 8.67% 15.58%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ................. $ 61,836 $ 27,088 $ 15,297
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor ....... 1.35% 1.28% 1.47%
After reimbursement of expenses by Advisor ........ 1.10% 1.10% 1.10%
Ratios of net investment income to average net assets:
After reimbursement of expenses by Advisor ........ 2.55% 2.83% 2.36%
Portfolio Turnover ................................... 57% 187% 349%
CLASS B
- -------
Net Asset Value, Beginning of Period ................. $ 12.66 $ 12.05 $ 10.68
-------------- -------------- --------------
Income from Investment Operations:
Net investment income .......................... 0.21 0.25 0.18
Net realized and unrealized gain (loss) on
investments ................................. (1.37) 0.69 1.38
-------------- -------------- --------------
Total from investment operations ............ (1.16) 0.94 1.56
-------------- -------------- --------------
Less Distributions:
Distributions from net investment income ....... (0.21) (0.25) (0.18)
Distributions from capital gains ............... -- (0.08) (0.01)
-------------- -------------- --------------
Total distributions ......................... (0.21) (0.33) (0.19)
-------------- -------------- --------------
Net increase (decrease) in net asset value ........... (1.37) 0.61 1.37
-------------- -------------- --------------
Net Asset Value, End of Period ....................... $ 11.29 $ 12.66 $ 12.05
============== ============== ==============
Total Return[dagger] ................................. (9.22)% 7.93% 14.72%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ................. $ 92,054 $ 63,669 $ 31,263
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor ....... 2.10% 2.03% 2.22%
After reimbursement of expenses by Advisor ........ 1.85% 1.85% 1.85%
Ratios of net investment income to average net assets:
After reimbursement of expenses by Advisor ........ 1.80% 2.08% 1.62%
Portfolio Turnover ................................... 57% 187% 349%
_______________________________________________________
(1) Not annualized
(2) Annualized
[dagger] Total return without applicable sales charge.
* Amount represents less than $0.005 per share.
See accompanying Notes to Financial Statements.
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
62 FINANCIAL HIGHLIGHTS FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING
THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
GROWTH AND INCOME FUND
------------------------------------------------------------
SIX MONTHS
ENDED 04/30/04 YEAR ENDED YEAR ENDED
(UNAUDITED) 10/31/2003 10/31/2002
-------------- -------------- --------------
CLASS A
- -------
Net Asset Value, Beginning of Period ................. $ 11.05 $ 9.37 $ 11.14
-------------- -------------- --------------
Income from Investment Operations:
Net investment income .......................... 0.20 0.12 0.10(b)
Net realized and unrealized gain (loss) on
investments ................................. 0.59 1.64 (1.82)
-------------- -------------- --------------
Total from investment operations ............ 0.79 1.76 (1.72)
-------------- -------------- --------------
Less Distributions:
Distributions from net investment income ....... (0.12) (0.08) (0.05)
Distributions from capital gains ............... -- -- --
-------------- -------------- --------------
Total distributions ......................... (0.12) (0.08) (0.05)
-------------- -------------- --------------
Net increase (decrease) in net asset value ........... 0.67 1.68 (1.77)
-------------- -------------- --------------
Net Asset Value, End of Period ....................... $ 11.72 $ 11.05 $ 9.37
============== ============== ==============
Total Return[dagger] ................................. 7.19%(1) 18.95% (15.51)%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ................. $ 80,730 $ 68,406 $ 53,896
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor ....... 1.19%(2) 1.35% 1.30%
After reimbursement of expenses by Advisor ........ 1.00%(2) 1.00% 1.00%
Ratios of net investment income to average net assets:
After reimbursement of expenses by Advisor ........ 1.35%(2) 1.29% 0.91%
Portfolio Turnover ................................... 9% 20% 18%
CLASS B
- -------
Net Asset Value, Beginning of Period ................. $ 10.87 $ 9.24 $ 11.02
-------------- -------------- --------------
Income from Investment Operations:
Net investment income .......................... 0.04 0.05 0.02(b)
Net realized and unrealized gain (loss) on
investments ................................. 0.70 1.60 (1.79)
-------------- -------------- --------------
Total from investment operations ............ 0.74 1.65 (1.77)
-------------- -------------- --------------
Less Distributions:
Distributions from net investment income ....... (0.05) (0.02) (0.01)
Distributions from capital gains ............... -- -- --
-------------- -------------- --------------
Total distributions ......................... (0.05) (0.02) (0.01)
-------------- -------------- --------------
Net increase (decrease) in net asset value ........... 0.69 1.63 (1.78)
-------------- -------------- --------------
Net Asset Value, End of Period ....................... $ 11.56 $ 10.87 $ 9.24
============== ============== ==============
Total Return[dagger] ................................. 6.82%(1) 17.93% (16.09)%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ................. $ 84,874 $ 79,765 $ 72,329
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor ....... 1.95%(2) 2.10% 2.05%
After reimbursement of expenses by Advisor ........ 1.75%(2) 1.75% 1.75%
Ratios of net investment income (loss) to average net
assets:
After reimbursement of expenses by Advisor ........ 0.60%(2) 0.54% 0.16%
Portfolio Turnover ................................... 9% 20% 18%
GROWTH AND INCOME FUND
------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
10/31/2001 10/31/2000 10/31/1999
-------------- -------------- --------------
CLASS A
- -------
Net Asset Value, Beginning of Period ................. $ 14.06 $ 13.21 $ 10.88
-------------- -------------- --------------
Income from Investment Operations:
Net investment income .......................... 0.06 0.07(b) 0.09
Net realized and unrealized gain (loss) on
investments ................................. (2.92) 0.84 2.33
-------------- -------------- --------------
Total from investment operations ............ (2.86) 0.91 2.42
-------------- -------------- --------------
Less Distributions:
Distributions from net investment income ....... (0.06) (0.04) (0.09)
Distributions from capital gains ............... -- (0.02) --
-------------- -------------- --------------
Total distributions ......................... (0.06) (0.06) (0.09)
-------------- -------------- --------------
Net increase (decrease) in net asset value ........... (2.92) 0.85 2.33
-------------- -------------- --------------
Net Asset Value, End of Period ....................... $ 11.14 $ 14.06 $ 13.21
============== ============== ==============
Total Return[dagger] ................................. (20.42)% 6.90% 22.33%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ................. $ 55,966 $ 46,994 $ 25,646
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor ....... 1.29% 1.07% 1.25%
After reimbursement of expenses by Advisor ........ 1.00% 1.00% 1.00%
Ratios of net investment income to average net assets:
After reimbursement of expenses by Advisor ........ 0.60% 0.54% 0.60%
Portfolio Turnover ................................... 24% 14% 19%
CLASS B
- -------
Net Asset Value, Beginning of Period ................. $ 13.96 $ 13.18 $ 10.88
-------------- -------------- --------------
Income from Investment Operations:
Net investment income .......................... (0.02) (0.03)(b) (0.01)
Net realized and unrealized gain (loss) on
investments ................................. (2.92) 0.84 2.33
-------------- -------------- --------------
Total from investment operations ............ (2.94) 0.81 2.32
-------------- -------------- --------------
Less Distributions:
Distributions from net investment income ....... -- (0.01) --
Distributions from capital gains ............... -- (0.02) (0.02)
-------------- -------------- --------------
Total distributions ......................... -- (0.03) (0.02)
-------------- -------------- --------------
Net increase (decrease) in net asset value ........... (2.94) 0.78 2.30
-------------- -------------- --------------
Net Asset Value, End of Period ....................... $ 11.02 $ 13.96 $ 13.18
============== ============== ==============
Total Return[dagger] ................................. (21.06)% 6.13% 21.32%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ................. $ 97,081 $ 106,762 $ 55,856
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor ....... 2.04% 1.82% 2.00%
After reimbursement of expenses by Advisor ........ 1.75% 1.75% 1.75%
Ratios of net investment income (loss) to average net
assets:
After reimbursement of expenses by Advisor ........ (0.15)% (0.21)% (0.15)%
Portfolio Turnover ................................... 24% 14% 19%
_______________________________________________________
(1) Not annualized
(2) Annualized
[dagger] Total return without applicable sales charge.
(b) Calculated based on average shares outstanding.
See accompanying Notes to Financial Statements.
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING
THROUGHOUT EACH PERIOD 63
- --------------------------------------------------------------------------------
CAPITAL APPRECIATION FUND
------------------------------------------------------------
SIX MONTHS
ENDED 04/30/04 YEAR ENDED YEAR ENDED
(UNAUDITED) 10/31/2003 10/31/2002
-------------- -------------- --------------
CLASS A
- -------
Net Asset Value, Beginning of Period ................. $ 11.88 $ 9.63 $ 12.81
-------------- -------------- --------------
Income from Investment Operations:
Net investment income (loss) ................... 0.05 0.00* (0.02)(b)
Net realized and unrealized gain (loss) on
investments ................................. 0.50 2.25 (3.11)
-------------- -------------- --------------
Total from investment operations ............ 0.55 2.25 (3.13)
-------------- -------------- --------------
Less Distributions:
Distributions from net investment income ....... -- -- --
Distributions from capital gains ............... -- -- (0.05)
-------------- -------------- --------------
Total distributions ......................... -- -- (0.05)
-------------- -------------- --------------
Net increase (decrease) in net asset value ........... 0.55 2.25 (3.18)
-------------- -------------- --------------
Net Asset Value, End of Period ....................... $ 12.43 $ 11.88 $ 9.63
============== ============== ==============
Total Return[dagger] ................................. 4.63%(1) 23.36% (24.54)%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ................. $ 81,324 $ 71,733 $ 55,865
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor ....... 1.47%(2) 1.64% 1.58%
After reimbursement of expenses by Advisor ........ 1.20%(2) 1.20% 1.20%
Ratios of net investment income (loss) to average net
assets:
After reimbursement of expenses by Advisor ........ (0.01)%(2) 0.05% (0.16)%
Portfolio Turnover ................................... 10% 25% 25%
CLASS B
- -------
Net Asset Value, Beginning of Period ................. $ 11.40 $ 9.31 $ 12.48
-------------- -------------- --------------
Income from Investment Operations:
Net investment loss ............................ (0.11) (0.08) (0.11)(b)
Net realized and unrealized gain (loss) on
investments ................................. 0.61 2.17 (3.01)
-------------- -------------- --------------
Total from investment operations ............ 0.50 2.09 (3.12)
-------------- -------------- --------------
Less Distributions:
Distributions from net investment income ....... -- -- --
Distributions from capital gains ............... -- -- (0.05)
-------------- -------------- --------------
Total distributions ......................... -- -- (0.05)
-------------- -------------- --------------
Net increase (decrease) in net asset value ........... 0.50 2.09 (3.17)
-------------- -------------- --------------
Net Asset Value, End of Period ....................... $ 11.90 $ 11.40 $ 9.31
============== ============== ==============
Total Return[dagger] ................................. 4.39%(1) 22.45% (25.12)%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ................. $ 64,989 $ 62,832 $ 54,600
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor ....... 2.22%(2) 2.39% 2.33%
After reimbursement of expenses by Advisor ........ 1.95%(2) 1.95% 1.95%
Ratios of net investment loss to average net assets:
After reimbursement of expenses by Advisor ........ (0.76)%(2) (0.70)% (0.91)%
Portfolio Turnover ................................... 10% 25% 25%
CAPITAL APPRECIATION FUND
------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
10/31/2001 10/31/2000 10/31/1999
-------------- -------------- --------------
CLASS A
- -------
Net Asset Value, Beginning of Period ................. $ 16.44 $ 13.70 $ 11.04
-------------- -------------- --------------
Income from Investment Operations:
Net investment income (loss) ................... (0.04)(b) (0.03)(b) 0.00*
Net realized and unrealized gain (loss) on
investments ................................. (3.59) 2.78 2.68
-------------- -------------- --------------
Total from investment operations ............ (3.63) 2.75 2.68
-------------- -------------- --------------
Less Distributions:
Distributions from net investment income ....... -- -- --
Distributions from capital gains ............... -- (0.01) (0.02)
-------------- -------------- --------------
Total distributions ......................... -- (0.01) (0.02)
-------------- -------------- --------------
Net increase (decrease) in net asset value ........... (3.63) 2.74 2.66
-------------- -------------- --------------
Net Asset Value, End of Period ....................... $ 12.81 $ 16.44 $ 13.70
============== ============== ==============
Total Return[dagger] ................................. (22.08)% 20.12% 24.29%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ................. $ 59,801 $ 35,889 $ 13,262
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor ....... 1.58% 1.37% 1.71%
After reimbursement of expenses by Advisor ........ 1.20% 1.20% 1.20%
Ratios of net investment income (loss) to average net
assets:
After reimbursement of expenses by Advisor ........ (0.30)% (0.27)% (0.05)%
Portfolio Turnover ................................... 30% 18% 68%
CLASS B
- -------
Net Asset Value, Beginning of Period ................. $ 16.13 $ 13.54 $ 10.98
-------------- -------------- --------------
Income from Investment Operations:
Net investment loss ............................ (0.15)(b) (0.15)(b) (0.12)
Net realized and unrealized gain (loss) on
investments ................................. (3.50) 2.75 2.68
-------------- -------------- --------------
Total from investment operations ............ (3.65) 2.60 2.56
-------------- -------------- --------------
Less Distributions:
Distributions from net investment income ....... -- -- --
Distributions from capital gains ............... -- (0.01) --
-------------- -------------- --------------
Total distributions ......................... -- (0.01) --
-------------- -------------- --------------
Net increase (decrease) in net asset value ........... (3.65) 2.59 2.56
-------------- -------------- --------------
Net Asset Value, End of Period ....................... $ 12.48 $ 16.13 $ 13.54
============== ============== ==============
Total Return[dagger] ................................. (22.63)% 19.25% 23.32%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ................. $ 72,667 $ 57,082 $ 23,563
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor ....... 2.33% 2.12% 2.46%
After reimbursement of expenses by Advisor ........ 1.95% 1.95% 1.95%
Ratios of net investment loss to average net assets:
After reimbursement of expenses by Advisor ........ (1.05)% (1.02)% (1.03)%
Portfolio Turnover ................................... 30% 18% 68%
_____________________________________________________
(1) Not annualized
(2) Annualized
[dagger] Total return without applicable sales charge.
(b) Calculated based on average shares outstanding.
* Amount represents less than $0.005 per share.
See accompanying Notes to Financial Statements.
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
64 FINANCIAL HIGHLIGHTS FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING
THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
MID-CAP FUND
----------------------------------------------------------------
SIX MONTHS
ENDED 04/30/04 YEAR ENDED YEAR ENDED INCEPTION(a)
(UNAUDITED) 10/31/2003 10/31/2002 TO 10/31/2001
-------------- ---------- ---------- -------------
CLASS A
- -------
NET ASSET VALUE, Beginning Period .............................. $ 11.12 $ 8.64 $ 9.48 $ 10.00
-------------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income .................................... 0.03 0.01 0.02(b) 0.00(b)*
Net realized and unrealized gain (loss) on investments ... 0.81 2.47 (0.85) (0.52)
-------------- ---------- ---------- ----------
Total from investment operations ...................... 0.84 2.48 (0.83) (0.52)
-------------- ---------- ---------- ----------
Less Distributions:
Distributions from net investment income ................. -- -- (0.01) --
Distributions from capital gains ......................... -- -- (0.00)* --
-------------- ---------- ---------- ----------
Total distributions ................................... -- -- (0.01) --
-------------- ---------- ---------- ----------
Net increase (decrease) in net asset value ..................... 0.84 2.48 (0.84) (0.52)
-------------- ---------- ---------- ----------
NET ASSET VALUE, End of Period ................................. $ 11.96 $ 11.12 $ 8.64 $ 9.48
============== ========== ========== ==========
Total Return[dagger] ........................................... 7.55%(1) 28.70% (8.79)% (5.20)%(1)
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ........................... $ 37,224 $ 31,591 $ 22,650 $ 15,345
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor ................. 1.67%(2) 1.92% 1.97% 2.29%(2)
After reimbursement of expenses by Advisor .................. 1.40%(2) 1.40% 1.40% 1.40%(2)
Ratios of net investment income (loss) to average net assets:
After reimbursement of expenses by Advisor .................. 0.15%(2) 0.17% 0.18% 0.03%(2)
Portfolio Turnover ............................................. 7% 25% 31% 30%
CLASS B
- -------
NET ASSET VALUE, Beginning Period .............................. $ 10.91 $ 8.54 $ 9.43 $ 10.00
-------------- ---------- ---------- ----------
Income from Investment Operations:
Net investment loss ...................................... (0.07) (0.05) (0.06)(b) (0.05)(b)
Net realized and unrealized gain (loss) on investments ... 0.83 2.42 (0.83) (0.52)
-------------- ---------- ---------- ----------
Total from investment operations ...................... 0.76 2.37 (0.89) (0.57)
-------------- ---------- ---------- ----------
Less Distributions:
Distributions from net investment income ................. -- -- -- --
Distributions from capital gains ......................... -- -- (0.00)* --
-------------- ---------- ---------- ----------
Total distributions ................................... -- -- -- --
-------------- ---------- ---------- ----------
Net increase (decrease) in net asset value ..................... 0.76 2.37 (0.89) (0.57)
-------------- ---------- ---------- ----------
Net Asset Value, End of Period ................................. $ 11.67 $ 10.91 $ 8.54 $ 9.43
============== ========== ========== ==========
Total Return[dagger] ........................................... 6.97%(1) 27.75% (9.43)% (5.70)%(1)
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ........................... $ 19,220 $ 16,721 $ 11,765 $ 6,192
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor ................. 2.43%(2) 2.67% 2.72% 3.04%(2)
After reimbursement of expenses by Advisor .................. 2.15%(2) 2.15% 2.15% 2.15%(2)
Ratios of net investment loss to average net assets:
After reimbursement of expenses by Advisor .................. (0.60)%(2) (0.58)% (0.57)% (0.72)%(2)
Portfolio Turnover ............................................. 7% 25% 31% 30%
_____________________________________________________
(1) Not annualized
(2) Annualized
[dagger] Total return without applicable sales charge.
(a) Fund commenced investment operations on February 28, 2001.
(b) Calculated based on average shares outstanding.
* Amount less than $0.005 per share.
See accompanying Notes to Financial Statements.
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING
THROUGHOUT EACH PERIOD 65
- --------------------------------------------------------------------------------
MULTI-CAP GROWTH FUND
------------------------------------------------------------------------------
SIX MONTHS
ENDED 04/30/04 YEAR ENDED YEAR ENDED YEAR ENDED INCEPTION(a)
(UNAUDITED) 10/31/2003 10/31/2002 10/31/2001 TO 10/31/2000
-------------- ---------- ---------- ---------- -------------
CLASS A
- -------
Net Asset Value, Beginning of Period ........... $ 4.46 $ 3.49 $ 4.27 $ 7.87 $ 10.00
-------------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment loss ...................... -- (0.03) (0.02)(b) (0.02) (0.02)(b)
Net realized and unrealized gain (loss)
on investments .............................. 0.30 1.00 (0.76) (3.58) (2.11)
-------------- ---------- ---------- ---------- ----------
Total from investment operations ...... 0.30 0.97 (0.78) (3.60) (2.13)
-------------- ---------- ---------- ---------- ----------
Net increase (decrease) in net asset value ..... 0.30 0.97 (0.78) (3.60) (2.13)
-------------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period ................. $ 4.76 $ 4.46 $ 3.49 $ 4.27 $ 7.87
============== ========== ========== ========== ==========
Total Return[dagger] ........................... 6.73%(1) 27.79% (18.27)% (45.74)% (21.30)%(1)
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ........... $ 21,759 $ 14,366 $ 7,915 $ 13,263 $ 20,731
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor . 1.68%(2) 2.40% 2.60% 2.36% 1.75%(2)
After reimbursement of expenses by Advisor .. 1.20%(2) 1.20% 1.20% 1.20% 1.20%(2)
Ratios of net investment loss to average net
assets:
After reimbursement of expenses by Advisor .. (0.65)%(2) (0.42)% (0.55)% (0.46)% (0.42)%(2)
Portfolio Turnover ............................. 38% 123% 214% 230% 151%
CLASS B
- -------
Net Asset Value, Beginning of Period ........... $ 4.34 $ 3.42 $ 4.22 $ 7.83 $ 10.00
-------------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment loss ...................... (0.05) (0.02) (0.05)(b) (0.07) (0.06)(b)
Net realized and unrealized gain (loss)
on investments .............................. 0.33 0.94 (0.75) (3.54) (2.11)
-------------- ---------- ---------- ---------- ----------
Total from investment operations ...... 0.28 0.92 (0.80) (3.61) (2.17)
-------------- ---------- ---------- ---------- ----------
Net increase (decrease) in net asset value ..... 0.28 0.92 (0.80) (3.61) (2.17)
-------------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period ................. $ 4.62 $ 4.34 $ 3.42 $ 4.22 $ 7.83
============== ========== ========== ========== ==========
Total Return[dagger] ........................... 6.45%(1) 26.90% (18.96)% (46.10)% (21.70)%(1)
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ........... $ 12,533 $ 9,935 $ 6,050 $ 6,902 $ 8,666
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor . 2.43%(2) 3.15% 3.35% 3.11% 2.50%(2)
After reimbursement of expenses by Advisor .. 1.95%(2) 1.95% 1.95% 1.95% 1.95%(2)
Ratios of net investment loss to average net
assets:
After reimbursement of expenses by Advisor .. (1.40)%(2) (1.17)% (1.30)% (1.21)% (1.17)%(2)
Portfolio Turnover ............................. 38% 123% 214% 230% 151%
_____________________________________________________
(1) Not annualized
(2) Annualized
[dagger] Total return without applicable sales charge.
(a) Fund commenced investment operations on February 29, 2000.
(b) Calculated based on average shares outstanding.
See accompanying Notes to Financial Statements.
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
66 FINANCIAL HIGHLIGHTS FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING
THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
INTERNATIONAL STOCK FUND
------------------------------------------------------------
SIX MONTHS
ENDED 04/30/04 YEAR ENDED YEAR ENDED
(UNAUDITED) 10/31/2003 10/31/2002
-------------- -------------- --------------
CLASS A
- -------
Net Asset Value, Beginning of Period ................ $ 8.92 $ 7.00 $ 7.31
-------------- -------------- --------------
Income from Investment Operations:
Net investment income ......................... 0.03 0.10 0.07(b)
Net realized and unrealized gain (loss)
on investments ............................. 0.99 1.88 (0.38)
-------------- -------------- --------------
Total from investment operations ........... 1.02 1.98 (0.31)
-------------- -------------- --------------
Less Distributions:
Distributions from net investment income ...... (0.10) (0.06) --
Distributions from capital gains .............. -- -- --
-------------- -------------- --------------
Total distributions ........................ (0.10) (0.06) --
-------------- -------------- --------------
Net increase (decrease) in net asset value .......... 0.92 1.92 (0.31)
-------------- -------------- --------------
Net Asset Value, End of Period ...................... $ 9.84 $ 8.92 $ 7.00
============== ============== ==============
Total Return[dagger] ................................ 11.41%(1) 28.46% (4.24)%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ................ $ 39,146 $ 33,664 $ 25,732
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor ...... 1.87%(2) 2.11% 2.29%
After reimbursement of expenses by Advisor ....... 1.60%(2) 1.60% 1.60%
Ratios of net investment income to average net
assets:
After reimbursement of expenses by Advisor ....... 0.63%(2) 1.30% 0.69%
Portfolio Turnover .................................. 22% 34% 47%
CLASS B
- -------
Net Asset Value, Beginning of Period ................ $ 8.78 $ 6.89 $ 7.25
-------------- -------------- --------------
Income from Investment Operations:
Net investment income (loss) .................. 0.00* 0.04 0.02(b)
Net realized and unrealized gain (loss)
on investments ............................. 0.96 1.85 (0.38)
-------------- -------------- --------------
Total from investment operations ........... 0.96 1.89 (0.36)
-------------- -------------- --------------
Less Distributions:
Distributions from net investment income ...... (0.01) (0.00)* --
Distributions from capital gains .............. -- -- --
-------------- -------------- --------------
Total distributions ........................ -- -- --
-------------- -------------- --------------
Net increase (decrease) in net asset value .......... 0.95 1.89 (0.36)
-------------- -------------- --------------
Net Asset Value, End of Period ...................... $ 9.73 $ 8.78 $ 6.89
============== ============== ==============
Total Return[dagger] ................................ 10.92%(1) 27.44% (4.97)%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ................ $ 7,088 $ 5,806 $ 4,591
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor ...... 2.61%(2) 2.86% 3.04%
After reimbursement of expenses by Advisor ....... 2.35%(2) 2.35% 2.35%
Ratios of net investment income (loss) to average net
assets:
After reimbursement of expenses by Advisor ....... (0.12)%(2) 0.55% (0.06)%
Portfolio Turnover .................................. 22% 34% 47%
INTERNATIONAL STOCK FUND
------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
10/31/2001 10/31/2000 10/31/1999
-------------- -------------- --------------
CLASS A
- -------
Net Asset Value, Beginning of Period ................ $ 9.55 $ 11.45 $ 10.34
-------------- -------------- --------------
Income from Investment Operations:
Net investment income ......................... 0.04 0.04(b) 0.14
Net realized and unrealized gain (loss)
on investments ............................. (2.21) (0.98) 1.56
-------------- -------------- --------------
Total from investment operations ........... (2.17) (0.94) 1.70
-------------- -------------- --------------
Less Distributions:
Distributions from net investment income ...... (0.07) (0.14) (0.14)
Distributions from capital gains .............. -- (0.82) (0.45)
-------------- -------------- --------------
Total distributions ........................ (0.07) (0.96) (0.59)
-------------- -------------- --------------
Net increase (decrease) in net asset value .......... (2.24) (1.90) 1.11
-------------- -------------- --------------
Net Asset Value, End of Period ...................... $ 7.31 $ 9.55 $ 11.45
============== ============== ==============
Total Return[dagger] ................................ (22.88)% (9.29)% 17.00%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ................ $ 25,829 $ 32,071 $ 33,214
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor ...... 2.14% 2.06% 2.18%
After reimbursement of expenses by Advisor ....... 1.60% 1.60% 1.60%
Ratios of net investment income to average net
assets:
After reimbursement of expenses by Advisor ....... 0.45% 0.43% 1.30%
Portfolio Turnover .................................. 86% 117% 57%
CLASS B
- -------
Net Asset Value, Beginning of Period ................ $ 9.48 $ 11.38 $ 10.28
-------------- -------------- --------------
Income from Investment Operations:
Net investment income (loss) .................. (0.02) (0.03)(b) 0.05
Net realized and unrealized gain (loss)
on investments ............................. (2.20) (0.98) 1.56
-------------- -------------- --------------
Total from investment operations ........... (2.22) (1.01) 1.61
-------------- -------------- --------------
Less Distributions:
Distributions from net investment income ...... (0.01) (0.07) (0.05)
Distributions from capital gains .............. -- (0.82) (0.46)
-------------- -------------- --------------
Total distributions ........................ (0.01) (0.89) (0.51)
-------------- -------------- --------------
Net increase (decrease) in net asset value .......... (2.23) (1.90) 1.10
-------------- -------------- --------------
Net Asset Value, End of Period ...................... $ 7.25 $ 9.48 $ 11.38
============== ============== ==============
Total Return[dagger] ................................ (23.48)% (9.92)% 16.09%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) ................ $ 4,787 $ 5,497 $ 3,326
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor ...... 2.89% 2.81% 2.93%
After reimbursement of expenses by Advisor ....... 2.35% 2.35% 2.35%
Ratios of net investment income (loss) to average
net assets:
After reimbursement of expenses by Advisor ....... (0.30)% (0.32)% 0.63%
Portfolio Turnover .................................. 86% 117% 57%
_____________________________________________________
(1) Not annualized
(2) Annualized
[dagger] Total return without applicable sales charge.
(b) Calculated based on average shares outstanding.
* Amount represents less than $ (0.005) per share
See accompanying Notes to Financial Statements.
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 67
- --------------------------------------------------------------------------------
1. ORGANIZATION
MEMBERS Mutual Funds, a Delaware Business Trust (the "Trust"), is registered
under the Investment Company Act of 1940, as amended (the "1940 Act") as an
open-end, management investment company. As of the date of this report, the
Trust offers nine Funds (individually, a "Fund," collectively, the "Funds") each
with two classes of shares: Class A and Class B. The Declaration of Trust
permits the Trustees to issue an unlimited number of shares of beneficial
interest of the Trust without par value. Each class of shares represents an
interest in the assets of the respective Fund and has identical voting,
dividend, liquidation and other rights, except that each class of shares bears
its own distribution fees and its proportional share of fund level expenses, is
subject to its own sales charges, if any, and has exclusive voting rights on
matters pertaining to Rule 12b-1 as it relates to that class. The accompanying
financial statements include the Cash Reserves Fund, Bond Fund, High Income
Fund, Balanced Fund, Growth and Income Fund, Capital Appreciation Fund, Mid-Cap
Fund, Multi-Cap Growth Fund and International Stock Fund.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally accepted
accounting principles 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 during the reported period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies consistently followed by each Fund in the
preparation of its financial statements.
Portfolio Valuation: Securities and other investments are valued as follows.
Equity securities listed on any U.S. or foreign stock exchange or quoted on the
National Association of Securities Dealers Automated Quotation System ("NASDAQ")
are valued at the last quoted sale price or official closing price on that
exchange or NASDAQ on the valuation day (provided that, for securities traded on
NASDAQ, the funds utilize the NASDAQ Official Closing Price ("NOCP")). If no
sale occurs, (a) equities traded on a U.S. exchange or on NASDAQ are valued at
the mean between the closing bid and closing asked prices (where only bid price
and asked price is quoted, or the spread between bid and asked prices is
substantial, quotations for a several-day period are used to establish value)
and (b) equity securities traded on a foreign exchange are valued at the
official bid price. Debt securities purchased with a remaining maturity of 61
days or more are valued by a pricing service selected by the Trust or on the
basis of dealer-supplied quotations. Short-term instruments having maturities of
60 days or less and all securities in the Cash Reserves Fund are valued on an
amortized cost basis or, if the current market value differs substantially from
the amortized cost, by marking to the market.
Over-the-counter securities not quoted on NASDAQ are valued at the last sale
price on the valuation day. If no sale occurs on the valuation day, an
over-the-counter security is valued at the mean between the last bid and asked
prices. Over-the-counter options are valued based upon prices provided by market
makers in such securities or dealers in such currencies. Financial futures
contracts generally are valued at the settlement price established by the
exchange(s) on which the contracts are primarily traded. The Trust's Securities
Valuation Committee shall estimate the fair value of futures positions affected
by the daily limit by using its valuation procedures for determining fair value,
when necessary. Forward foreign currency exchange contracts are valued based on
quotations supplied by dealers in such contracts.
The value of all assets and liabilities expressed in foreign currencies will be
converted into U.S. dollar values at the noon (Eastern Time) Reuters spot rate.
All other securities for which either quotations are not readily available, no
other sales have occurred, or do not, in MEMBERS Capital Advisors' opinion,
reflect the current market value are appraised at their fair values as
determined in good faith by and under the general supervision of the Board of
Trustees.
Additionally, a Fund's investments will be valued at fair value if the Advisor
determines that an event impacting the value of an investment occurred between
the closing time of a security's primary market or exchange (for example, a
foreign exchange or market) and the time the Fund's share price is calculated.
Significant events include, but are not limited to the following: (1)
significant fluctuations in domestic markets, foreign markets or foreign
currencies; (2) occurrences not directly tied to the securities markets such as
natural disasters, armed conflicts or significant government actions; and (3)
major announcements affecting a single issuer or an entire market or market
sector. In responding to a significant event, the Security Valuation Committee
would determine the fair value of affected securities considering factors
including, but not limited to: index options and futures traded subsequent to
the close; ADRs, GDRs or other related receipts; currency spot or forward
markets that trade after pricing of foreign exchange; other derivative
securities traded after the close such as WEBs and SPDRs; and alternative market
quotes on the affected securities.
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
68 NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
- --------------------------------------------------------------------------------
Security Transactions and Investment Income: Security transactions are accounted
for on a trade date basis. Net realized gains or losses on sales are determined
by the identified cost method. Interest income is recorded on the accrual basis.
Dividend income is recorded on ex-dividend date.
Federal Income Taxes: It is each Fund's intention to qualify as a regulated
investment company for federal income tax purposes by complying with the
appropriate provisions of the Internal Revenue Code of 1986, as amended.
Accordingly, no provisions for federal income taxes are recorded in the
accompanying financial statements.
Expenses: Expenses that are directly related to one Fund are charged directly to
that Fund. Other operating expenses are prorated to the Funds on the basis of
relative net assets. Class-specific expenses are borne by that class.
Classes: Income, and realized and unrealized gains/losses are allocated to the
respective classes on the basis of relative net assets.
Repurchase Agreements: Each Fund may engage in repurchase agreements. In a
repurchase agreement, a security is purchased for a relatively short period
(usually not more than 7 days) subject to the obligation to sell it back to the
issuer at a fixed time and price plus accrued interest. The Funds will enter
into repurchase agreements only with member banks of the Federal Reserve System
and with "primary dealers" in U.S. Government securities.
The Trust has established a procedure providing that the securities serving as
collateral for each repurchase agreement must be delivered to the Trust's
custodian either physically or in book-entry form and that the collateral must
be marked to market daily to ensure that each repurchase agreement is fully
collateralized at all times. In the event of bankruptcy or other default by a
seller of a repurchase agreement, a Fund could experience delays in liquidating
the underlying securities during the period in which the Fund seeks to enforce
its rights thereto, possible subnormal levels of income, declines in value of
the underlying securities or lack of access to income during this period and the
expense of enforcing its rights.
Foreign Currency Transactions: The books and records are maintained in U.S.
dollars. Foreign currency amounts are translated into U.S. dollars on the
following basis:
(1) market value of investment securities, assets and liabilities at the
current rate of exchange; and
(2) purchases and sales of investment securities, income and expenses at
the relevant rates of exchange prevailing on the respective dates of
such transactions.
The High Income, Mid-Cap, Multi-Cap Growth and International Stock Funds report
certain foreign currency-related transactions as components of realized gains or
losses for financial reporting purposes, whereas such components are treated as
ordinary income for federal income tax purposes.
The Funds do not isolate the portion of gains and losses on investments in
securities that is due to changes in the foreign exchange rates from that which
is due to change in market prices of securities. Such amounts are categorized as
gain or loss on investments for financial reporting purposes.
Forward Foreign Currency Exchange Contracts: The High Income, Multi-Cap Growth
and International Stock Funds may each purchase or sell forward foreign currency
exchange contracts for defensive or hedging purposes when the Fund's Investment
Advisor anticipates that the foreign currency will appreciate or depreciate in
value. When entering into forward currency exchange contracts, the Funds agree
to receive or deliver a fixed quantity of foreign currency for an agreed-upon
price on an agreed future date. These contracts are valued daily, and the Funds'
net assets, representing unrealized gain or loss on the contracts as measured by
the difference between the forward foreign exchange rates at the dates of entry
into the contracts and the forward rates at the reporting date, is included in
the Statements of Assets and Liabilities. The Funds realize a gain or a loss at
the time the forward currency exchange contracts are closed out or are offset by
a matching contract. Realized and unrealized gains and losses are included in
the Statements of Operations. At the period ended April 30, 2004, only the High
Income Fund had open forward currency exchange contracts, which are presented in
the Fund's Portfolio of Investments.
The instruments involve market risk, credit risk, or both, in excess of the
amount recognized in the Statements of Assets and Liabilities. Risks arise from
the possible inability of counterparties to meet the terms of their contracts
and from movement in currency and securities values and interest rates.
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED) 69
- --------------------------------------------------------------------------------
Futures Contracts: The Funds (other than Cash Reserves) may purchase and sell
futures contracts and purchase and write options on futures contracts. The funds
will engage in futures contracts or related options transactions only for bona
fide hedging purposes. Upon entering into a futures contract, the Fund is
required to pledge to the broker an amount of cash, U.S. Government securities
or other assets, equal to a certain percentage of the contract (initial margin
deposit). Subsequent payments, known as "variation margin," are made or received
by the Fund each day, depending on the daily fluctuations in the fair value of
the underlying security. When a fund enters into a futures contract, the fund
segregates in cash or liquid securities, of any type or maturity, equal in value
to the fund's commitment. The Fund recognizes a gain or loss equal to the daily
variation margin. Should market conditions move unexpectedly, the Fund may not
achieve the anticipated benefits of the futures contracts and may realize a
loss. The use of futures transactions involves the risk of imperfect correlation
in movements in the price of futures contracts, interest rates, and the
underlying hedged assets.
Delayed Delivery Securities: Each Fund may purchase securities on a when-issued
or delayed delivery basis. "When-issued" refers to securities whose terms are
available and for which a market exists, but that have not been issued. For
when-issued or delayed delivery transactions, no payment is made until delivery
date, which is typically longer than the normal course of settlement, and often
more than a month or more after the purchase. When a fund enters into an
agreement to purchase securities on a when-issued or delayed delivery basis, the
fund segregates in cash or liquid securities, of any type or maturity, equal in
value to the fund's commitment. Losses may arise due to changes in the market
value of the underlying securities, if the counterparty does not perform under
the contract, or if the issuer does not issue the securities due to political,
economic or other factors. For the period ended April 30, 2004, the Bond Fund,
the High Income Fund, and the Balanced Fund entered into such transactions, the
market values of which are identified in the Fund's Portfolio of Investments.
Reclassification Adjustments: Paid-in capital, undistributed net investment
income, and accumulated net realized gain (loss) have been adjusted in the
Statements of Assets and Liabilities for permanent book-tax differences for all
Funds.
Redemption Fees: The Bond, Balanced, Growth and Income, Capital Appreciation and
Multi-Cap Growth Funds will deduct a fee of 2% from redemption proceeds on
shares held 5 days or less. The High Income, Mid-Cap and International Stock
Funds will deduct a fee of 2% from redemption proceeds on shares held 30 days or
less. The redemption fee is treated as additional paid-in capital.
3. ADVISORY, ADMINISTRATION AND DISTRIBUTION AGREEMENTS
The Trust has entered into an Investment Advisory Agreement with MEMBERS Capital
Advisors, Inc. (the "Investment Advisor"). For its investment advisory services
to the Funds, the Investment Advisor is entitled to receive a fee, which is
calculated daily and paid monthly, at an annual rate based upon the following
percentages of average daily net assets: 0.40% for the Cash Reserves Fund; 0.50%
for the Bond Fund; 0.55% for the High Income Fund; 0.65% for the Balanced Fund;
0.55% for the Growth and Income Fund; 0.75% for the Capital Appreciation Fund;
0.95% for the Mid-Cap Fund, 0.75% for the Multi-Cap Growth Fund and 1.05% for
the International Stock Fund. The Investment Advisor has entered into Subadvisor
agreements for the management of the investments of the High Income Fund, the
Mid-Cap Fund, the Multi-Cap Growth Fund, and the International Stock Fund. The
Investment Advisor is solely responsible for the payment of all fees to the
Subadvisors. The Subadvisors for these Funds are Massachusetts Financial
Services Company for the High Income Fund, Wellington Management Company, LLP
for a portion of the Mid-Cap Fund and the entire Multi-Cap Growth Fund, and
Lazard Asset Management for the International Stock Fund.
The Investment Advisor contractually agrees to waive a portion of its fees and
to reimburse the Funds for certain expenses so that total expenses will not
exceed certain expense limitations. The Investment Advisor has agreed to waive
fees and/or reimburse expenses with respect to the Funds in order that total
expenses will not exceed the following amounts:
FUND CLASS A CLASS B
- ---- ------- -------
Cash Reserves Fund 0.55% 1.30%
Bond Fund 0.90% 1.65%
High Income Fund 1.00% 1.75%
Balanced Fund 1.10% 1.85%
Growth and Income Fund 1.00% 1.75%
Capital Appreciation Fund 1.20% 1.95%
Mid-Cap Fund 1.40% 2.15%
Multi-Cap Growth Fund 1.20% 1.95%
International Stock Fund 1.60% 2.35%
For the period ended April 30, 2004, the Investment Advisor reimbursed expenses
of $48,495 for the Cash Reserves Fund, $118,316 for the Bond Fund, $59,140 for
the High Income Fund, $118,593 for the Balanced Fund, $157,229 for the Growth
and Income Fund, $191,128 for the Capital Appreciation Fund, $75,468 for the
Mid-Cap Fund, $74,979 for the Multi-Cap Growth Fund and $59,237 for the
International Stock Fund.
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
70 NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
- --------------------------------------------------------------------------------
Any reimbursements or fee reductions made by the Investment Advisor to a Fund
are subject to repayment by the Fund, to the extent that the Fund is able to
make the repayment within its expense cap. Such payments must be made within
three years, measured on a fiscal year basis, from when the reimbursement or fee
reduction occurred.
RECOVERY EXPIRING RECOVERY EXPIRING RECOVERY EXPIRING
FUND OCTOBER 31, 2004 OCTOBER 31, 2005 OCTOBER 31, 2006
- ---- ----------------- ----------------- -----------------
Cash Reserves Fund $ 90,801 $114,473 $100,514
Bond Fund 140,301 234,662 284,227
High Income Fund 160,158 174,043 168,808
Balanced Fund 298,079 348,289 363,962
Growth and Income Fund 454,597 473,218 460,975
Capital Appreciation Fund 430,721 533,959 520,392
Mid-Cap Fund 94,077 189,165 205,353
Multi-Cap Growth Fund 278,988 247,687 204,794
International Stock Fund 187,608 223,636 166,715
Through April 30, 2004, none of the Funds has made repayments to the Investment
Advisor under the agreement.
CUNA Brokerage Services, Inc. ("CUNA Brokerage") serves as distributor of the
Funds. The Trust adopted Distribution Plans (the "Plans") with respect to
Trust's Class A and B shares pursuant to Rule 12b-1 under the 1940 Act. Under
the Plans, the Trust will pay service fees for Class A and Class B share at an
aggregate annual rate of 0.25% of each Fund's daily net assets attributable to
the respective class of shares for all Funds except the Cash Reserves Fund. The
Trust will also pay distribution fees for Class B shares at an aggregate annual
rate of 0.75% of each Fund's daily net assets attributable to Class B. The
distribution fees are used to reimburse CUNA Brokerage for its distribution
expenses with respect to Class B only, including but not limited to: (1) initial
and ongoing sales compensation to selling brokers and others engaged in the sale
of Fund shares, (2) marketing, promotional and overhead expenses incurred in
connection with the distribution of Fund shares, and (3) interest expenses on
unreimbursed distribution expenses. The service fees will be used to compensate
selling brokers and others for providing personal and account maintenance
services to shareholders.
The distributor may from time to time voluntarily agree to waive a portion of
its fees or expenses related to the Funds. In that regard, the distributor
waived a portion of 12b-1 fees on the Cash Reserves Fund Class B Shares for the
purpose of maintaining a one-day yield of zero. The amount of the daily waiver
is equal to the amount required to maintain a minimum daily distribution rate of
zero. For the period ended April 30, 2004, the waivers totaled $11,143 and are
reflected as fees waived by the distributor in the accompanying Statement of
Operations.
In addition to distribution fees, CUNA Brokerage received sales charges paid by
the purchasers or redeemers of the Funds' shares. For the period ended April 30,
2004, sales charges received by CUNA Brokerage were as follows:
AMOUNT PAID
-------------
FUND CLASS A CLASS B
- ---- ------- -------
Cash Reserves Fund $ 27,517 $ 38,658
Bond Fund 198,307 118,285
High Income Fund 98,956 26,900
Balanced Fund 441,532 139,860
Growth and Income Fund 341,923 95,920
Capital Appreciation Fund 249,953 87,446
Mid-Cap Fund 124,416 19,807
Multi-Cap Growth Fund 175,828 15,365
International Stock Fund 52,161 7,496
Certain officers and trustees of the Funds are also officers of the Investment
Advisor. The Funds do not compensate their officers or affiliated trustees. The
Trust paid each unaffiliated trustee $1,500 per regular meeting attended.
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED) 71
- --------------------------------------------------------------------------------
4. DIVIDENDS FROM NET INCOME AND DISTRIBUTIONS OF CAPITAL GAINS
With respect to the Cash Reserves Fund and the Bond Fund, dividends from net
investment income are declared daily and net realized gains from investment
transactions, if any, are distributed to shareholders annually. The High Income
Fund and Balanced Fund declare dividends from net investment income monthly and
net realized gains from investment transactions, if any, are distributed to
shareholders annually. The Growth and Income Fund, Capital Appreciation Fund,
Mid-Cap Fund, Multi-Cap Growth Fund and the International Stock Fund declare
dividends from net investment income annually and net realized gains from
investment transactions, if any, are distributed to shareholders annually.
Income and capital gain distributions, if any, are determined in accordance with
federal income tax regulations, which may differ from accounting principles
generally accepted in the United States of America. Taxable distributions from
income and realized capital gains in the Funds differ from book amounts earned
during the period due to differences in the timing of capital recognition, and
due to the reclassification of certain gains or losses from capital to income.
Dividends from net investment income are determined on a class level. Capital
gains are determined on a fund level.
5. SECURITIES TRANSACTIONS
For the period ended April 30, 2004, aggregate cost of purchases and proceeds
from sales of securities, other than short-term investments, were as follows:
U.S. GOVERNMENT OTHER INVESTMENT
SECURITIES SECURITIES
-------------------------- ---------------------------
FUND PURCHASES SALES PURCHASES SALES
- ---- --------- ----- --------- -----
Bond Fund $67,198,868 $62,811,189 $13,693,089 $15,022,558
High Income Fund -- -- 21,077,640 15,922,116
Balanced Fund 41,293,617 32,162,053 15,157,906 16,419,759
Growth and Income Fund -- -- 25,286,443 14,030,091
Capital Appreciation Fund -- -- 20,638,219 13,255,870
Mid-Cap Fund -- -- 7,637,358 3,630,071
Multi-Cap Fund -- -- 19,462,317 11,112,669
International Stock Fund -- -- 12,325,632 9,518,924
6. FOREIGN SECURITIES
Each Fund may invest in foreign securities, although only the High Income Fund,
Multi-Cap Growth Fund and International Stock Fund anticipate having significant
investments in such securities. The International Stock Fund, High Income Fund
and Multi-Cap Growth Fund may invest 100%, 50% and 25%, respectively, of their
assets in foreign securities. No Fund will concentrate its investments in a
particular foreign country.
Foreign securities means securities that are: (1) issued by companies organized
outside the U.S. or whose principal operations are outside the U.S. ("foreign
issuers"), (2) issued by foreign governments or their agencies or
instrumentalities (also "foreign issuers"), (3) principally traded outside the
U.S., or (4) quoted or denominated in a foreign currency ("non-dollar
securities"). Foreign securities include ADRs, EDRs, GDRs, SDRs and foreign
money market securities.
Investing in foreign securities involves certain risks not necessarily found in
U.S. markets. These include risks associated with adverse changes in economic,
political, regulatory and other conditions, changes in currency exchange rates,
exchange control regulations, expropriation of assets or nationalization,
imposition of withholding taxes on dividend or interest payments or capital
gains, and possible difficulty in obtaining and enforcing judgments against
foreign entities. Further, issuers of foreign securities are subject to
different, and often less comprehensive, accounting, reporting and disclosure
requirements than domestic issuers.
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SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
72 NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
- --------------------------------------------------------------------------------
7. SECURITIES LENDING
The Funds, excluding the Cash Reserves Fund, entered into a Securities Lending
Agreement (the "Agreement") with State Street Bank and Trust Company ("State
Street"). Under the terms of the Agreement, the Funds may lend portfolio
securities to qualified borrowers in order to earn additional income. The
Agreement requires that loans are collateralized at all times by cash or other
liquid assets at least equal to 102% of the value of the securities, which is
determined on a daily basis. At April 30, 2004 cash collateral received for
Funds engaged in securities lending was invested in the State Street Navigator
Securities Lending Prime Portfolio. Additionally non-cash collateral was also
received. The value of all collateral is included within the Portfolio of
Investments with an offsetting liability on the Statements of Assets and
Liabilities.
Amounts earned as interest on investments of cash collateral, net of rebates and
fees, are included in the Statements of Operations. The value of securities on
loan at April 30, 2004 is as follows:
FUND VALUE OF SECURITIES ON LOAN
- ---- ---------------------------
Bond Fund $31,401,393
High Income Fund 10,748,856
Balanced Fund 15,822,148
Capital Appreciation Fund 29,626
Mid-Cap Fund 1,540,561
Multi-Cap Fund 830,228
8. TAX INFORMATION
For federal income taxes purposes, the Funds listed below have capital loss
carryovers as of October 31, 2003, which are available to offset future capital
gains, if any:
CARRYOVER EXPIRING IN:
----------------------
FUND 2006 2007 2008 2009 2010 2011
- ---- ---- ---- ---- ---- ---- ----
Bond Fund $ -- $ -- $ 194,273 $ -- $ 230,858 $ --
High Income Fund 66,186 328,128 237,390 2,053,681 2,445,850 614,259
Balanced Fund -- -- -- -- 5,493,333 6,760,762
Growth and Income Fund -- -- 1,214,946 2,865,513 11,738,982 9,713,003
Capital Appreciation Fund -- -- -- -- 19,056,782 13,979,170
Mid-Cap Fund -- -- -- -- 1,801,181 814,114
Multi-Cap Growth Fund -- -- 6,238,457 10,391,144 5,728,147 --
International Stock Fund -- -- 1,887,109 3,985,467 4,881,331 1,505,342
The Bond Fund and Multi-Cap Growth Fund utilized $166,270 and $204,710 of prior
capital loss carryovers during the year ended October 31, 2003.
At April 30, 2004, the aggregate gross unrealized appreciation (depreciation)
and net unrealized appreciation (depreciation) for all securities as computed on
a federal income tax basis for each fund were as follows:
FUND APPRECIATION DEPRECIATION NET
- ---- ------------ ------------ ---
Bond Fund $ 1,932,261 $ 1,635,641 $ 296,620
High Income Fund 2,971,896 1,732,179 1,239,717
Balanced Fund 16,882,112 9,556,849 7,325,263
Growth and Income Fund 16,985,993 13,661,886 3,324,107
Capital Appreciation Fund 21,926,846 13,274,502 8,652,344
Mid-Cap Fund 10,376,962 1,640,228 8,736,734
Multi-Cap Fund 5,013,690 1,026,593 3,987,097
International Stock Fund 10,098,773 1,156,795 8,941,978
The differences between cost amounts for book purposes and tax purposes are
primarily due to deferred losses.
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED) 73
- --------------------------------------------------------------------------------
9. FINANCIAL INSTRUMENTS
Investing in certain financial instruments, including forward foreign currency
contracts and futures contracts, involves risk other than that reflected in the
Statements of Assets and Liabilities. Risks associated with these instruments
include potential for an imperfect correlation between the movements in the
prices of the instruments and the prices of the underlying securities and
interest rates, an illiquid secondary market for the instruments or inability of
counterparties to perform under the terms of the contracts and changes in the
value of foreign currency relative to the U.S. dollar. The High Income Fund,
Multi-Cap Growth Fund and International Stock Fund enter into these contracts
primarily to protect these Funds from adverse currency movements.
10. CONCENTRATION OF RISK
The High Income Fund invests in securities offering high current income, which
generally will include bonds in the below investment grade categories of
recognized rating agencies (so-called "junk bonds"). These securities generally
involve more credit risk than securities in the higher rating categories. In
addition, the trading market for high yield securities may be relatively less
liquid than the market for higher-rated securities. The Fund generally invests
at least 80% of its assets in high yield securities.
11. CAPITAL SHARES AND AFFILIATED OWNERSHIP
Each Fund is authorized to issue an unlimited number of shares of beneficial
interest with no par value. Each Fund currently offers two classes of shares,
Class A and Class B. At April 30, 2004, investments in the Funds by affiliates
were as follows:
CUNA MUTUAL CUNA MUTUAL CUMIS CUNA
LIFE INSURANCE INSURANCE INSURANCE BROKERAGE
FUND CLASS COMPANY SOCIETY SOCIETY, INC. SERVICES, INC.
- ---- ----- -------------- ----------- ------------- --------------
Cash Reserves A $ 1,854,501 $1,853,265 $ -- $ --
Bond Fund A 2,079,927 2,078,541 -- --
High Income Fund A 6,360,291 -- -- --
Balanced Fund A 11,867,858 -- 5,166,088 1,285,016
Growth and Income Fund A 2,066,369 2,404,865 3,313,271 --
Capital Appreciation Fund A 12,012,800 1,651,391 -- --
Mid-Cap Fund A 11,967,548 -- -- --
International Stock Fund A 3,482,968 5,803,786 20,734,565 --
- ------------------------------------------------------------- [LOGO OF MEMBERS]
SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
74 OTHER INFORMATION (UNAUDITED)
- --------------------------------------------------------------------------------
PROXY VOTING
Proxy Voting Policies and Procedures: A description of the policies and
procedures used by MEMBERS Mutual Funds to vote proxies related to portfolio
securities is available to shareholders at no cost on the Funds' Website at
www.membersfunds.com or by calling 1-800-877-6089.
Proxy Voting Record: MEMBERS Mutual Funds will make a filing with the Securities
and Exchange Commission (SEC) on Form N-PX, containing the proxy voting records
for the twelve-month period ended June 30, by no later than August 31 of each
year. The voting record will be available to shareholders at no cost on the
Funds' Website at www.membersfunds.com and on the SEC's Website at www.sec.gov.
The first reporting period ends June 30, 2004; consequently, the voting records
will be posted on or near August 31, 2004.
[LOGO OF MEMBERS] -------------------------------------------------------------
MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
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TRUSTEES AND OFFICERS 75
- --------------------------------------------------------------------------------
NUMBER OF
POSITION(S) PORTFOLIOS OTHER
NAME, ADDRESS AND HELD WITH LENGTH OF PRINCIPAL OCCUPATION OVERSEEN OUTSIDE
YEAR OF BIRTH THE FUND SERVICE(1) DURING PAST FIVE YEARS IN FUND DIRECTOR-
COMPLEX SHIPS(5)
- ----------------------------------------------------------------------------------------------------------------------------------
Michael S. Daubs, CFA(2)(3) Trustee 1997 - CUNA Mutual Insurance Society 19 ____
5910 Mineral Point Road (Chairman) Present Chief Officer - Investments,
Madison, WI 53705 1990 - Present
Year of Birth: 1943
MEMBERS Capital Advisors, Inc.
President,
1982 - Present
CUNA Mutual Life Insurance Company
Chief Officer - Investments,
1973 - Present
- ----------------------------------------------------------------------------------------------------------------------------------
Lawrence R. Halverson, CFA(2)(4) Trustee, 1997 - MEMBERS Capital Advisors, Inc. 19 ____
5910 Mineral Point Road President Present Senior Vice President - Equities
Madison, WI 53705 and Principal 1996 - Present
Year of Birth: 1945 Executive
Officer CUNA Brokerage Services, Inc.
President,
1996 - 1998
- ----------------------------------------------------------------------------------------------------------------------------------
Mary E. Hoffmann, CPA(2) Treasurer 1998 - MEMBERS Capital Advisors, Inc. 19 ____
5910 Mineral Point Road Present Assistant Vice President - Product
Madison, WI 53705 Operations and Finance,
Year of Birth: 1970 2001 - Present
Product Operations and Finance
Manager,
1998 - 2001
CUNA Mutual Insurance Society
Investment Accounting Supervisor,
1996 - 1998
- ----------------------------------------------------------------------------------------------------------------------------------
Holly S. Baggot(2) Secretary 1999 - MEMBERS Capital Advisors, Inc. 19 ____
5910 Mineral Point Road and Present Senior Manager - Product and Fund
Madison, WI 53705 Assistant Operations, 2001 - Present
Year of Birth: 1960 Treasurer
Operations & Administration Manager
1998 - 2001
- ----------------------------------------------------------------------------------------------------------------------------------
Dan Owens(2) Assistant 2000 - MEMBERS Capital Advisors, Inc. 19 ____
5910 Mineral Point Road Treasurer Present Senior Manager - Portfolio Operations,
Madison, WI 53705 2001 - Present
Year of Birth: 1966
Investment Operations Manager,
1999 - 2001
AmerUS Capital Management
Manager, Investment Accounting -
Reporting, 1998 - 1999
AmerUs Life Holdings, Inc.
Senior Investment Accountant,
1994 - 1998
- ----------------------------------------------------------------------------------------------------------------------------------
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SEMIANNUAL REPORT APRIL 30, 2004 MUTUAL FUNDS
- --------------------------------------------------------------------------------
76 TRUSTEES AND OFFICERS (CONTINUED)
- --------------------------------------------------------------------------------
NUMBER OF
POSITION(S) PORTFOLIOS OTHER
NAME, ADDRESS AND HELD WITH LENGTH OF PRINCIPAL OCCUPATION OVERSEEN OUTSIDE
YEAR OF BIRTH THE FUND SERVICE(1) DURING PAST FIVE YEARS IN FUND DIRECTOR-
COMPLEX SHIPS(5)
- -------------------------------------------------------------------------------------------------------------------------------
Rolf F. Bjelland, CLU Trustee 2003 - Fairview Medical Foundation 19 Regis
2000 Heritage Way Present Director, 2003 - Present Corp.,
Waverly, IA 50677 Director,
Year of Birth: 1938 A.L.S. Society 1982 -
Director, 2002 - Present Present
Viking Counsel Boy Scouts of America
Director, 1967 - Present
Lutheran Brotherhood Mutual Funds
Chairman and President
Lutheran Brotherhood
Chief Investment Officer
(now Thrivent Financial)
1983 - 2002
- ----------------------------------------------------------------------------------------------------------------------------------
Gwendolyn M. Boeke Trustee 1997 - Wartburg Theological Seminary 19 ____
2000 Heritage Way Present Development Association,
Waverly, IA 50677 Development Associate,
Year of Birth: 1934 1997 - Present
Evangelical Lutheran Church in America
Foundation
Regional Director, 1990 - Present
Wartburg College
Director, 1986 - 2001
- ----------------------------------------------------------------------------------------------------------------------------------
Alfred L. Disrud Trustee 1997 - Planned Giving Services 19 ____
2000 Heritage Way Present Owner, 1986 - Present
Waverly, IA 50677
Year of Birth: 1921
- ----------------------------------------------------------------------------------------------------------------------------------
Thomas C. Watt Trustee 1997 - Vision Development Services, Inc. 19 Wells Fargo
2000 Heritage Way Present Consultant, Bank,
Waverly, IA 50677 1997 - Present Community
Year of Birth: 1936 Director,
MidAmerica Energy Company 1985 -
Manager, Business Initiatives, Present
1987 - 1999
- ----------------------------------------------------------------------------------------------------------------------------------
(1) The board of trustees and officers of the Fund do not currently have term
limitations.
(2) "Interested person" as defined in the 1940 Act.
(3) Mr. Daubs is considered an "interested" trustee because of the position he
holds with the investment advisor of the trust.
(4) Mr. Halverson is considered an "interested" trustee because of the position
he holds with the investment advisor of the trust.
(5) Include only directorships with companies that:
(a) have a class of securities registered with the SEC under the
Securities Exchange Act, section 12; or
(b) are subject to the requirements of section 15(d) of the Securities
Exchange Act; or
(c) are registered as an investment advisor.
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MUTUAL FUNDS SEMIANNUAL REPORT APRIL 30, 2004
[LOGO OF MEMBERS]
MUTUAL FUNDS
MEMBERS(R) Mutual Funds
Post Office Box 8390
Boston, MA 02266-8390
1 (800) 877-6089
www.membersfunds.com
Distributed by:
CUNA Brokerage Services, Inc.
Office of Supervisory Jurisdiction
2000 Heritage Way
Waverly, IA 50677-9202
Member NASD/SIPC
Distributed by CUNA Brokerage Services, Inc. (CBSI), 2000 Heritage Way, Waverly,
Iowa 50677, toll-free 1 (866) 512-6109. NONDEPOSIT INVESTMENT PRODUCTS ARE NOT
FEDERALLY INSURED, INVOLVE INVESTMENT RISK, MAY LOSE VALUE AND ARE NOT
OBLIGATIONS OF OR GUARANTEED BY THE CREDIT UNION. For more complete information
about MEMBERS Mutual Funds, including charges and expenses, request a prospectus
from your registered representative or from MEMBERS Mutual Funds, Post Office
Box 8390, Boston, MA 02266-8390. Consider the investment objectives, risks, and
charges and expenses of the investment carefully before investing. The
prospectus contains this and other information about the investment company. For
more current performance information, call 1 (800) 877-6089. Current performance
may be lower or higher than the performance data quoted within. Past performance
does not guarantee future results.
4460-P1053(0604) (C)CUNA Mutual Group
------------------
Presorted Standard
U.S. POSTAGE
PAID
Louisville, KY
Permit # 1051
------------------
ITEM 2. CODE OF ETHICS.
(a) Not required in this semi-annual report filed on Form N-CSR.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not required in this semi-annual report filed on Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not required in this semi-annual report filed on Form N-CSR.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not required in this semi-annual report filed on Form N-CSR.
ITEM 6. SCHEDULE OF INVESTMENTS.
A copy of the Schedule I - Investments in securities of unaffiliated issuers is
included as part of the report to shareholders filed under Item 1 of this Form
N-CSR.
4
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASES.
Not applicable.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 10. CONTROLS AND PROCEDURES.
(a) The President and Treasurer of the Trust have concluded that the
Trust's Disclosure Controls and Procedures (as defined in
Rule 30a-3(c) under the Investment Company Act of 1940) are
effective based on their evaluation of the Disclosure Controls
and Procedures as of a date within 90 days of the filing date of
this report on Form N-CSR.
(b) There have been no changes in the Trust's internal controls over
financial reporting that occurred during the Trust's last fiscal
half-year that have materially affected, or are reasonably likely
to affect, the Trust's internal control over financial reporting.
ITEM 11. EXHIBITS.
(a) Not applicable.
(b) Certifications of the President and Treasurer of the Trust.
5