-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Re09tZlSexwFxSFQQKWJx196w7xWWWlMx2kaBPl/h8SsRSzEb/7OtUKdQpUXI8pI GFIPaGtCsnJSHE44OVCy5A== 0000891804-04-001960.txt : 20040901 0000891804-04-001960.hdr.sgml : 20040901 20040901130651 ACCESSION NUMBER: 0000891804-04-001960 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040630 FILED AS OF DATE: 20040901 DATE AS OF CHANGE: 20040901 EFFECTIVENESS DATE: 20040901 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ACTIVA MUTUAL FUND TRUST CENTRAL INDEX KEY: 0000006247 IRS NUMBER: 381958738 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-02168 FILM NUMBER: 041010456 BUSINESS ADDRESS: STREET 1: 2905 LUCERNE SE CITY: GRAND RAPIDS STATE: MI ZIP: 49546 BUSINESS PHONE: 6167876288 MAIL ADDRESS: STREET 1: ATTN: JERRY MICK STREET 2: 2905 LUCERNE SE CITY: GRAND RAPIDS STATE: MI ZIP: 49546 FORMER COMPANY: FORMER CONFORMED NAME: AMWAY MUTUAL FUND INC DATE OF NAME CHANGE: 19920703 N-CSRS 1 file001.txt ACTIVA MUTUAL FUND TRUST UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-2168 --------------------- ACTIVA MUTUAL FUND TRUST ------------------------------------------------------------------------------ (Exact name of registrant as specified in charter) 2905 Lucerne Dr. SE, Suite 200 Grand Rapids, Michigan 49546-7116 - ------------------------------------------------------------------------------ (Address of principal executive offices) (Zip code) Allan D. Engel, President, Secretary, and Treasurer Activa Mutual Fund 2905 Lucerne Dr SE, Suite 200 Grand Rapids, Michigan 49546-7116 - ------------------------------------------------------------------------------ (Name and address of agent for service) Registrant's telephone number, including area code: (616) 787-6288 ------------------- Date of fiscal year end: December 31 ------------------ Date of reporting period: June 30, 2004 ----------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO SHAREHOLDERS. - ------------------------------- The attached Semiannual Report to Shareholders was mailed on August 30, 2004. Activa SEMIANNUAL REPORT JUNE 30, 2004 ACTIVA MONEY MARKET FUND Sub-Adviser: JP Morgan Investment Management, Inc. ACTIVA INTERMEDIATE BOND FUND Sub-Adviser: McDonnell Investment Management, LLC ACTIVA VALUE FUND Sub-Adviser: Wellington Management, Co. LLP ACTIVA GROWTH FUND Sub-Adviser: State Street Research & Management Company ACTIVA INTERNATIONAL FUND Sub-Adviser: Nicholas-Applegate Capital Management A selection of stock, bond, and money market funds, managed by professional advisers, which are designed to help investors meet their financial goals. Activa Mutual Funds ACTIVA Mutual Funds Semiannual Report Contents Page SHAREHOLDER LETTER 1 ACTIVA MONEY MARKET FUND 2 ACTIVA INTERMEDIATE BOND FUND 3 ACTIVA VALUE FUND 4 ACTIVA GROWTH FUND 5 ACTIVA INTERNATIONAL FUND 6 ACTIVA OFFICERS AND TRUSTEES OF THE FUND 7 SCHEDULE OF INVESTMENTS Activa Money Market Fund 9 Activa Intermediate Bond Fund 10 Activa Value Fund 13 Activa Growth Fund 18 Activa International Fund 22 Page Statement of Assets and Liabilities 28 Statement of Operations 29 Statement of Changes in Net Assets 30 Notes to Financial Statements 32 Financial Highlights 36 Activa Mutual Funds 2905 Lucerne SE, Suite 200 Grand Rapids, Michigan 49546 (616) 787-6288 (800) 346-2670 www.activafunds.com SEMIANNUAL REPORT DEAR SHAREHOLDER: I am pleased to provide you with the Semi-Annual Report to Shareholders for the Activa Mutual Funds for the period ended June 30, 2004. The following pages include the sub-advisers' management discussions and performance reviews for the Funds. During first six months of 2004 the U.S. and International stock markets posted positive returns. Although early during the first quarter of 2004 we saw strong positive returns, the markets in the second quarter mostly treaded water as strength in the overall economy was offset by continued turmoil in Iraq, prospects of rising interest rates and rising energy costs. The Dow Jones Industrial Average finished the first half of the year up narrowly, 0.87%, and the Standard & Poor's 500 Index finished stronger with a positive 3.44%, for the same period. During the first six months the Lehman Brothers Aggregate Bond Index was generally flat, ending the period up 0.10%, in expectation of any increasing Federal Funds Rate. The Federal Reserve increased the rate a quarter of a percent on June 30th as anticipated. Mutual Fund investors continue to invest during this economic environment, with net assets increasing 2.3% year to date 2004. Stock-funds have seen the largest inflows in 2004 as net assets have increased over $200 billion since December of 2003, an increase of 7.2% year-to-date. Taxable Bond Funds grew slightly in the second quarter, increasing only 0.04%; although, year-to-date taxable bond assets have seen a net decrease, down 0.4%. After the strong market recovery in 2003, investors are realizing that 2004 may not be as robust. Although markets were mainly positive during the first quarter, the second quarter was much more volatile. While it continues to be difficult to predict market direction it is as important as ever for investors to maintain and review their investment objectives and focal point of their investment programs. Diversification among asset classes and the appropriate mix of stock and bond investments may help weather market volatility. Maintaining a diversified investment plan and using dollar cost averaging may help investors achieve their goals. Dollar cost averaging involves investing a certain amount of money in the same fund at the same time each month or quarter. By investing the same dollar amount on a periodic basis in the same fund you may pay a lower average cost per share. Although dollar cost averaging does not guarantee a profit, it does encourage discipline, eliminate the need to decide when to invest, and avoid the temptation to time the market. Activa Mutual Funds can help you maintain an investment program by establishing an automatic investment program from your bank account. You can choose the dollar amount (minimum $50), time periods, and Funds you want to invest in. Call an Activa Funds Shareholder Representative (1-800-346-2670) to further discuss dollar cost averaging and how you can establish an automatic investment program. To help investors determine their personal asset allocation and investment needs the Activa Funds web-site offers a variety of financial calculators to help investors develop a plan. Please visit our web site at www.activafunds.com to access the financial calculators, and learn how you can develop a diversified portfolio using the Activa Funds. We here at Activa funds thank you for your support of our Fund family and we will continue to make it our priority to bring you the highest level of quality and service. Sincerely, /s/ Allan D. Engel Allan D. Engel President ACTIVA Mutual Funds Semiannual Report 1 ACTIVA Money Market Fund -- JP Morgan Investment Management, Inc. The Activa Money Market Fund, which seeks to provide preservation of principal, returned 0.16% for the six-month period ended June 30, 2004. HOW WAS THE FUND MANAGED? Data released during the first quarter was mixed. On balance, they suggested that the U.S. economy would continue growing near its trend rate of 4%. Although corporate profits rose, companies were still reluctant to add new workers. Consumer spending increased, fueled by tax refunds and the mortgage credit boom. Core inflation rose slightly but without evidence of a meaningful uptrend. The Federal Reserve Board indicated that it could be patient in maintaining an accommodative stance. By the second quarter, the economy had completed its transition from a stimulus-dependent to a self-sustaining expansion. The key marker was accelerated private employment growth, which was accompanied by an upswing in pre-tax income growth. However, economic growth moderated and inflation increased. The combination of renormalizing economic conditions and rising inflation had a major effect on expectations for the Fed's monetary policy. In June, the Fed raised interest rates by .25% to 1.25%, the first rate hike in four years. Treasury yields rose and the LIBOR curve steepened as investors anticipated significantly higher short-term interest rates in coming quarters. During the first quarter, we targeted a weighted average maturity (WAM) of 70 to 75 days. In February, we extended our WAM by concentrating our purchases in six-month maturities. We continued to add one- and three-month commercial paper throughout the quarter to maintain our extended WAM and to keep our cash positions low. In the second quarter, we maintained a target WAM of 60 to 65 days. In April and again in June, we took advantage of higher rates to purchase 13-month fixed-rate certificates of deposit. During May and June, we bought one- and three-month commercial paper and increased our allocation to floating rate notes. Toward the end of June, we purchased one- to two-week commercial paper, awaiting the outcome of the June 30 Fed meeting. 2 ACTIVA Mutual Funds Semiannual Report ACTIVA Intermediate Bond Fund-- McDonnell Investment Management, LLC ECONOMIC REVIEW The economic environment for the first half of 2004 was characterized by solid global and US economic growth (with US real GDP expanding at nearly a 4% rate), commodity price pressures, US budget and trade deficits, weaker US dollar and a tighter Fed monetary policy. The underlying economic strength coupled with the commodity price pressures contributed to weakness across the yield curve as interest rates moved higher in anticipation of tighter monetary policy. MARKET OVERVIEW As we entered 2004 the fixed income market was focused on the prospects for gains in employment in the current economic recovery. In our view, the pace of job creation would be considered the final piece of the economic strength puzzle and would determine the magnitude of the potential short-term rate increases by the Federal Reserve Board. Robust employment growth began to appear late in the first quarter and carried through the second quarter causing interest rates to rise and bond prices to fall as expectations for short-term fed funds rate increases rose. As a result of the underlying economic strength, the Federal Reserve increased the Fed Funds target rate to 1.25% at its June meeting. The increase in the short term Fed Funds rate contributed to an overall flatter yield curve at the end of the period. The yield difference from 2 year treasuries to 30 year treasuries decreased from 3.25% as of December 31, 2003 to 2.61% as of June 30, 2004. Overall, the 2-year treasury yield increased from 1.82% on December 31, 2003 to 2.68% on June 30, 2004, while the 30-year treasury yield increased from 5.07% to 5.29% over the same period. PORTFOLIO STRATEGY AND OVERVIEW As of June 30, 2004, the Fund had a duration of approximately 4.4 years, which was comparable to the 4.6 year duration of the Fund's benchmark, the Lehman Brothers Aggregate Bond Index. With respect to relative sector weightings, the Fund held overweight positions in the corporate and asset- and mortgage-backed sectors. We believe the relative yield premiums offered by these sectors remain attractive and present positive total return opportunities. In addition, we have underweighted the middle of the yield curve relative to the benchmark in anticipation of a less steep or flatter yield curve in a rising rate environment. The Fund generated a total return of -0.23% for the first six months of 2004, compared to the Bond Index return of +0.10% during the same period. Detracting from the Fund's performance was the continued underweight in treasury securities. OUTLOOK AND SUMMARY We believe the prospects for continued economic growth and concerns about underlying price pressures will cause the Fed to continue to firm monetary policy leading to additional increases in the Fed Funds rate. As of June 30, 2004, the futures market had priced in a year-end Fed Funds rate of approximately 2.25%, a 1.00% increase from the June 30, 2004 level. While geopolitical events or other factors certainly could cause the economic strength to fizzle and short-circuit the anticipated degree of monetary tightening. The Fed's last Federal Open Market Committee statement highlighted its belief that monetary policy still would be accommodative at the 1.25% level. The question for us will be when the Fed feels that the Fed Funds rate has moved to a neutral stance, appropriately balancing the prospects for sustainable economic growth and relative stable inflation. The challenge for us remains identifying the key sectors, yield curve posture and securities that best fit this environment. We expect to continue to meet these challenges through appropriate risk management and our disciplined investment style. ACTIVA Mutual Funds Semiannual Report 3 ACTIVA Value Fund -- Wellington Management Co., LLP MARKET COMMENT Broad-based indications of economic strength and continued growth in corporate profits overshadowed investors' concerns regarding rising inflation, acts of terrorism, and turmoil in Iraq during the six-month period ended June 30, 2004. The Federal Reserve raised the target federal funds rate 25 basis points citing the "solid pace" of output growth and improving labor markets. All major indexes posted positive returns during the period. Small caps outperformed large caps, as the Russell 2000 Index gained 7% versus 3% for the Russell 1000 Index. Value slightly outperformed growth as the Russell 1000 Value advanced 4% versus 3% for the Russell 1000 Growth. Within the Russell 1000 Value Index, nine out of ten broad industry sectors posted positive returns. Energy and Consumer Staples were the best performing sectors, while Consumer Discretionary was the only sector to post negative results. FUND REVIEW The Activa Value Fund recorded positive performance of +2.4% for the six-month period, but trailed the +3.9% return of the Russell 1000 Value index. The Sub-Advisor uses fundamental, or "bottom-up," security analysis to focus on stock selection within industries; rather than making significant sector bets, industry weights are kept in line with those of the Russell 1000 Value Index. In addition, the Sub-Adviser uses an internally-developed, quantitative analytical approach to complement the fundamental research. The Activa Value Fund underperformed its benchmark during the six-month period, with the Fund's bottom-up investment approach producing positive benchmark-relative results in only one of the ten broad market sectors. Stock selection in the other nine sectors detracted from performance. Year-to-date, stock selection within the Industrials sector was the biggest detractor from benchmark-relative returns. Shares of American Power Conversion fell after the company announced lower-than-expected earnings caused by increased sales and marketing costs as it sought to boost market share. United Technologies, an aerospace company, also fell as US government budget pressures increase and defense programs come under greater scrutiny. Within Information Technology, semiconductor stocks, Fairchild Semiconductor and Novellus Systems, underperformed as investors feared that demand growth would slow and the semiconductor cycle would not be as robust as had been expected. In addition, relative performance was negatively impacted by the Fund's position in King Pharmaceuticals. The stock fell on poor earnings due to an inventory draw down and fears of generic competition. On the positive side, a number of bank stocks within Financials dampened the overall negative relative results. Shares of Bank One surged on news that Bank One and J.P Morgan Chase agreed to merge, establishing the second largest banking franchise in the United States, based on core deposits. Countrywide Financial's successful efforts to gain market share and diversify revenues spurred the shares' outperformance during a period of rising interest rates. General Growth Properties benefited from strong performance of the Real Estate industry earlier in the year. Finally, Bank of America continued to benefit from the acquisition of FleetBoston Financial. 4 ACTIVA Mutual Funds Semiannual Report ACTIVA Growth Fund -- State Street Research & Management Company PERFORMANCE SUMMARY In an environment where the market remained modestly positive, Large-Cap Growth stocks have faired well, with the Russell 1000(R) Growth Index gaining 2.68% in the first half of the year. Strong stock selection across several sectors, including Consumer Discretionary, Conglomerates and Energy, drove relative and absolute returns higher as the portfolio gained 2.74% during the same period. Selection in Producer Durables and Technology modestly detracted from return comparisons. PORTFOLIO REVIEW Strong stock-picking across several sectors, including Consumer Discretionary, Conglomerates and Energy, contributed to the portfolio's performance during the first half of 2004. Within the Consumer Discretionary sector, double digit gains by Yahoo!, Harman International and Caesar's Entertainment have bolstered portfolio returns. Yahoo!, an internet search-engine leader, continues to generate enormous cash flow as internet advertising has begun to make up a larger percentage of companies' advertising budgets. Caesar's, along with portfolio holding International Game Technology, gained as gaming fundamentals continue to improve. Our Energy exposure continues to be an area of strength within the portfolio as our bottom-up selection process has led us to overweight the sector. Year-to-date, the Energy sector has been the Russell 1000 Growth Index's top performing segment. Additionally, our portfolio holdings within the sector have faired particularly well, benefiting from elevated commodity prices as higher coal prices boosted profit margins at Consol Energy and shares of EOG Resources continue to benefit from high oil and natural gas prices. In contrast, investor sentiment moved away from several holdings within the semiconductor area, marginally detracting from the portfolio's performance. Semiconductor holdings PMC-Sierra, Fairchild and Cypress Semiconductor all declined since the end of last year. While margin issues at Cypress gave rise to concerns for its shareholders, order cancellations at Fairchild contributed to a declining stock-price. Additionally, within the Producer Durables sector, power protection provider American Power Conversion posted double-digit declines as the company missed first quarter street earnings estimates. PORTFOLIO POSITIONING AND OUTLOOK While equity markets ended the first half of the year modestly positive, markets were choppy as investors attempted to reconcile strong corporate profits with concerns surrounding rising interest rates, elevated oil prices and the sustainability of economic recovery. With companies facing increasingly difficult year-over-year earnings comparisons, an upcoming presidential election and rising interest rates, it is likely that markets will remain volatile through the second half of the year. In this environment, we continue to focus on stock-specific fundamentals and continue to feel that solid bottom-up stock selection will be critical in producing above-benchmark returns for our clients over longer time periods. As a result of our bottom-up selection process, we enter the second half the year with an overweight, albeit less than at the end of 2003, in the Consumer Discretionary sector. Within the Energy sector, we remain overweight as we continued to believe stocks still offer significant upside, even with their recent rally. The supply-demand dynamics for coal, natural gas and oil remain compelling and should provide a boost to those stocks highly levered toward energy commodity prices. Within Health Care, we continue to favor companies with strong product pipelines and remain overweight within biotech, but underweight to large-cap pharmaceutical companies. In Technology, sales of Cypress Semiconductor, Fairchild Semiconductor and Texas Instruments lessened our semiconductor weighting to a slight under weight. While we believe that upside still may exist within the group, we are less confident than a few months ago and have decreased our exposure to the segment. Over the past several quarters, our bottom-up approach has resulted in a portfolio with a cyclical tilt, levered to economic recovery. As the benefits of recovery have begun to work through the markets and into stock prices, we have been finding greater opportunity in more stable growth-oriented stocks. As a result, the "bets" within the portfolio are more broad-based than they have been over the last few quarters when the portfolio had a cyclical bias. ACTIVA Mutual Funds Semiannual Report 5 ACTIVA International Fund -- Nicholas Applegate Capital Management MARKET OVERVIEW The portfolio has underperformed during the first half of 2004, returning 1.55% versus the EAFE Index return of 4.86%. Performance has been closer to that of the growth indexes, indicating that the growth style of the portfolio has been a contributor to the underperformance. International equities gained about 4.9% during the first half of 2004. Virtually all of the appreciation occurred in the first quarter and most of that came from Japan. The markets were essentially unchanged during the second quarter as investors were forced to cope with rising interest rates, inflation, unrelenting geopolitical tensions, fears of a slowdown in China's economy and skyrocketing oil prices. On the positive side, corporate fundamentals have continued to improve and economic indicators have steadily progressed. European equities managed to post small gains during the second quarter. The economic environment in Europe remains depressed, with high unemployment throughout much of the region weighing down consumer spending. Companies have, however, benefited from an increase in demand from outside the euro zone. For example, German manufacturing orders jumped 2.5% in April with all categories showing strength and foreign orders far outpacing domestic orders. As expected, net exports were up, but domestic demand was weak. Unemployment remained unchanged at 9%. For the first half, value has outperformed growth in non-US stocks, with the value benchmarks up about 6% versus growth at about 2%. The best performing sectors in the first half included Utilities, Consumer Discretionary, Consumer Staples, Energy and Industrials. Materials, Health Care and Financials lagged. On a country basis, Japan was the strongest major country in the first half, with the Japanese market up over 10%. All of Europe's largest economies, including Switzerland, Germany, France, and the UK underperformed the overall non-US marketplace. PORTFOLIO SPECIFICS Stock selection also detracted from results, particularly true in the Consumer Discretionary and Industrials sectors. In Consumer Discretionary, poor performers included George Wimpey, LG Electronics, Matsushita Electronics and BskyB. Not owning Daimler Chrysler also hurt results as the stock was up 17% in the second quarter. Industrials that underperformed included: Sumitomo Corp., Toppan Printing, Deutsche Post and Adecco. Being overweight Taiwan and S. Korea hurt as China slowdown fears were a drag on many Asian markets. The portfolio was a bit underweight in Japan which has also hurt this year. Over the past several months, we have made several positioning changes in the portfolio. We took profits from several of our wireless cellular positions. We also cut back on a variety of technology companies with an emphasis on those in Asia ex- Japan, reducing the overweight in these securities. These assets have been redeployed in Consumer Discretionary stocks with an emphasis on European media names where we believe the earnings growth potential has been overlooked by the market. MARKET OUTLOOK The outlook for international equities remains reasonably optimistic. Corporate fundamentals and economic growth are improving throughout the major regions of the world. Asian economies, led by Japan, are now exhibiting broad based strength in both the consumer and business segments. Leading economic indicators in the US and Japan have been strong and suggest moderate growth going forward. In Japan, recent Tankan surveys of business confidence have also been better than economists had predicted. Unemployment has fallen and household spending is up. The European economy, however, remains stagnant. Business and consumer confidence remains weak and unemployment stubbornly high. Germany has been particularly sluggish. We expect the European central bank to keep interest rates at their present low levels. We expect the choppy markets seen in the last several months to continue. Earnings season for international companies commences in mid July, but expectations are high and the comparisons versus the latter part of 2003 are more challenging. We expect earnings to remain strong, but the rate of earnings growth may be peaking. 6 ACTIVA Mutual Funds Semiannual Report ACTIVA Officers and Trustees of the Fund The business affairs of the Fund are managed and under the direction of the Board of Trustees ("Board"). The following information as of June 30, 2004 pertains to the Officers and Trustees of the Fund or the Advisor or both, and includes their principal occupation during the past five years and their compensation as Trustee:
NUMBER OF PORTFOLIOS OTHER IN FUND DIRECTOR- TERM OF COMPLEX SHIPS NAME AND OFFICE/LENGTH PRINCIPAL OCCUPATION OVERSEEN BY HELD BY ADDRESS AGE OFFICE HELD OF TIME SERVED LAST FIVE YEARS DIRECTOR DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------------ INTERESTED TRUSTEES - ------------------- Allan D. Engel* 52 Trustee, President, Perpetual / 23 Vice President, Real Estate 5 None 2905 Lucerne SE, Secretary and Operations and Secretary-Activa Suite 200 Treasurer of the Fund; Holdings Corp. Formerly, Sr. Grand Rapids, President, and Manager, Investments and Real Michigan Secretary of the Estate, Amway Corporation; 49546 Investment Adviser Director, President and Secretary of Amway Management Company (1981-1999); Trustee, Vice President and Secretary, Amway Mutual Fund (1981-1999); Vice President and Assistant Treasurer, Activa Mutual Fund Trust (1999-2002). James J. Rosloniec* 59 Trustee of the Fund Perpetual / 23 President & Chief Operating 5 None 2905 Lucerne SE Officer, JVA Enterprises, LLC. Suite 200 President, Chief Executive Officer Grand Rapids, Michigan and Director, Activa Holdings 49546 Corp. Formerly, Vice President-Audit and Control, Amway Corporation (1991-2000); Director, Vice President and Treasurer of Amway Management Company (1984-1999); Trustee, President and Treasurer, Amway Mutual Fund, (1981-1999); President and Treasurer, Activa Mutual Fund Trust (1999-2002). ADVISORY TRUSTEE - ---------------- Joseph E. Victor, Jr. 56 Advisory Trustee of Perpetual / 3 President and Chief Executive 5 None 2905 Lucerne SE, the Fund Officer, Marker Net, Inc. (Crown Suite 200 Independent Business Owner Grand Rapids, affiliated with Quixtar, Inc.) Michigan 49546 DISINTERESTED TRUSTEES - ---------------------- Donald H. Johnson 73 Trustee of the Fund Perpetual / 11 Retired, Former Vice 5 None 2905 Lucerne SE, President-Treasurer, Suite 200 SPX Corporation. Grand Rapids, Michigan 49546 Walter T. Jones 62 Trustee of the Fund Perpetual / 12 Retired, Former Senior Vice 5 None 936 Sycamore Ave. President-Chief Financial Holland, Michigan Officer, Prince Corporation. 49424 Richard E. Wayman 69 Trustee of the Fund Perpetual / 6 Retired, Former Finance 5 None 24578 Rutherford Director, Amway Corporation. Ramona, California 92065 ACTIVA Mutual Funds Semiannual Report 7
ACTIVA Officers and Trustees of the Fund continued The following table summarizes Trustee compensation which was paid by Activa Asset Management LLC during the six month period ended June 30, 2004 pursuant to the Administration Agreement.
PENSION OR RETIREMENT BENEFITS ACCRUED AS ESTIMATED ANNUAL TOTAL NAME OF PERSON, TRUSTEE PART OF BENEFITS COMPENSATION POSITION COMPENSATION FUND EXPENSES UPON RETIREMENT PAID TO TRUSTEES INTERESTED TRUSTEES Allan D. Engel* Trustee $5,000 -0- -0- $5,000 James J. Rosloniec* $5,000 -0- -0- $5,000 Trustee ADVISORY TRUSTEE Joseph E. Victor, Jr. $5,000 -0- -0- $5,000 Advisory Trustee DISINTERESTED TRUSTEES Donald H. Johnson $5,000 -0- -0- $5,000 Trustee Walter T. Jones $5,000 -0- -0- $5,000 Trustee Richard E. Wayman $5,000 -0- -0- $5,000 Trustee
*Mssrs. Engel and Rosloniec are interested persons of the Fund. In addition, Mr. Engel is an officer of the Fund, Investment Adviser and of Activa Holdings Corp., which controls the Investment Adviser. Mr. Rosloniec is also an officer of Activa Holdings Corp., and of JVA Enterprises, LLC, which may be deemed to control Activa Holdings Corp. The Officers serve without compensation from the Fund. Fees paid to all Trustees during the six month period ended June 30, 2004, amounted to $30,000. The Fund's Statement of Additional Information contains additional information about the Fund's Trustees. It is available, without charge, by writing or telephoning the Fund. A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available, without charge, upon request, by calling (800) 346-2670 and it also appears in the Fund's Statement of Additional Information which can be found on the Securities and Exchange Commission's website at http://www.sec.gov. 8 ACTIVA Mutual Funds Semiannual Report ACTIVA Schedule of Investments MONEY MARKET FUND - 6/30/04 (Unaudited)
% OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) - ------------------------- ------------ ----------- ------------- CERTIFICATES OF DEPOSIT 23.5% CREDIT SUISSE FIRST BOSTON, FRN, 7/12/04 1,000,000 $ 1,000,070 ABN-AMRO BANK N.V.OSIT MODEL, CD, 1.11%, 9/7/04 500,000 500,000 BARCLAYS BANK PLC, CD, 1.09%, 8/25/04 1,000,000 1,000,004 SANTANDER CENTRAL HISPANO, CD, 1.12%, 8/11/04 1,000,000 1,000,022 BNP PARIBAS, CD, 1.36%, 9/10/04 1,000,000 1,000,000 COD ROYAL BANK OF SCOTLAND, FRN, 9/27/04 1,000,000 999,740 ROYAL BANK OF SCOTLAND GROUP, CD, 2.47%, 7/15/05 300,000 299,944 SOCIETE GENERALE, CD, 2.48%, 7/15/05 500,000 499,846 WEST LB AG, 1.27%, 10/14/04 1,000,000 1,000,312 ------------- 7,299,938 ------------- COMMERCIAL PAPER 64.4% DANSKE CORPORATION, DN, 1.07%, 9/17/04 500,000 498,841 MACQUARIE BANK LTD., DN, 1.23%, 7/21/04 1,000,000 999,317 NBNZ INTERNATIONAL, DN, 1.12%, 7/23/04 482,000 481,670 WELLS FARGO BANK MINNESOTA, FRN, 1.03%, 2/14/05 1,000,000 1,000,000 DEUTSCHE BANK AG, FRN, 10/8/04 1,000,000 1,000,000 AMSTERDAM FUNDING, DN, 1.24%, 7/22/04 1,000,000 999,277 AQUINAS FUNDING LLC, DN, 1.09%, 7/14/04 1,000,000 999,606 ATLANTIS ONE FUNDING, DN, 1.07%, 10/1/04 1,000,000 997,266 CBA (DELAWARE) FINANCE, INC., DN, 1.09%, 7/20/04 747,000 746,570 CANTABRIC FINANCE LLC, DN, 1.52%, 9/27/04 1,000,000 996,284 GEMINI SECURITIZATION CORP., DN, 1.45%, 7/1/04 499,000 499,000 GOVCO INCORPORATED, DN, 1.16%, 8/10/04 500,000 499,356 GRAMPIAN FUNDING, DN, 1.16%, 10/6/04 1,000,000 996,874 HSH NORBANK, DN, 1.21%, 7/14/04 1,000,000 999,561 K2 (USA) LLC, DN, 1.09%, 7/7/04 500,000 499,909 K2 (USA) LLC, DN, 1.09%, 8/17/04 500,000 499,288 LINKS FINANCE LLC, DN, 1.06%, 6/10/05 1,000,000 999,812 NBNZ INTERNATIONAL, DN, 1.26%, 9/1/04 1,000,000 997,821 NEW CENTER ASSET TRUST, DN, 1.46%, 7/1/04 1,000,000 1,000,000 SILVER TOWER US FUNDING, DN, 1.11%, 8/11/04 1,000,000 998,736 WEST LB AG, DN, 1.29%, 9/7/04 500,000 498,782 RWE AG, DN, 1.14%, 7/6/04 1,005,000 1,004,841 NATIONWIDE BUILDING SOCIETY, DN, 1.09%, 8/20/04 800,000 798,789 NETWORK RAIL CP FINANCE, DN, 1.24%, 10/22/04 1,000,000 996,092 ------------- 20,007,692 ------------- FEDERAL HOME LOAN BANK 2.4% FHLB, FRN, 9/20/04 750,000 749,886 ------------- FEDERAL NATIONAL MORTGAGE ASSOCIATION 9.7% FANNIE MAE, FRN, 7/30/04 1,000,000 999,940 FANNIE MAE, FRN, 9/10/04 1,000,000 999,887 FANNIE MAE, FRN, 9/10/04 1,000,000 1,000,000 ------------- 2,999,827 ------------- TOTAL SHORT TERM OBLIGATIONS - 100% (Cost $31,057,343) $ 31,057,343 ============= ACTIVA Mutual Funds Semiannual Report 9 The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments INTERMEDIATE BOND FUND - 6/30/04 (Unaudited) % OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) - ------------------------- ------------ ----------- ------------- US TREASURY NOTES 10.0% U.S. TREASURY NOTES, 6.875%, 5/15/06 2,500,000 $ 2,691,993 U.S. TREASURY NOTES, 2.625%, 11/15/06 14,000,000 13,912,500 ------------- 16,604,493 ------------- US TREASURY BONDS 3.3% U.S. TREASURY BONDS, 8.125%, 8/15/19 2,600,000 3,406,000 U.S. TREASURY BONDS, 5.25%, 11/15/28 725,000 710,529 US TREASURY INFLATION INDEX BOND (TIP), 3.88%, 4/15/29 900,000 1,312,754 ------------- 5,429,283 ------------- US TREASURY STRIPS - PRINCIPAL ONLY 0.7% STRIP PRINC, 5/15/18 2,340,000 1,117,373 ------------- FEDERAL HOME LOAN MORTGAGE 19.3% FEDERAL GOVT LOAN MORTGAGE CORP., 5.00%, 7/1/34 3,250,000 3,137,264 FREDDIE MAC GOLD, 5.50%, 12/1/32 1,402,990 1,402,255 FREDDIE MAC, 8.00%, 3/1/30 621,317 674,905 FREDDIE MAC, 6.50%, 12/15/22 1,568,746 1,577,087 FREDDIE MAC, 4.25%, 6/15/05 7,000,000 7,140,000 FREDDIE MAC, 5.50%, 5/15/28 3,000,000 3,042,086 FREDDIE MAC, 5.00%, 4/15/18 2,250,000 2,201,911 FREDDIE MAC, 4.50%, 4/15/26 2,500,000 2,485,839 FREDDIE MAC, 4.00%, 5/15/23 4,750,000 4,790,882 FREDDIE MAC, 4.00%, 2/15/21 2,500,000 2,522,324 FREDDIE MAC, 4.00%, 5/15/24 3,000,000 3,012,180 ------------- 31,986,733 ------------- FEDERAL NATIONAL MORTGAGE ASSOCIATION 19.1% FANNIE MAE, 7.125%, 1/15/30 4,500,000 5,259,015 FANNIE MAE, 6.5%, 9/1/29 351,739 367,127 FANNIE MAE, 4.50%, 9/1/18 3,719,975 3,642,863 FANNIE MAE CL, 5.00%, 12/1/33 2,593,870 2,514,672 FANNIE MAE, 6.00%, 4/1/14 310,659 324,735 FANNIE MAE, 6.00%, 2/1/29 471,354 483,727 FANNIE MAE, 6.00%, 1/1/29 643,198 660,082 FANNIE MAE, 6.50%, 3/1/29 505,626 528,060 FANNIE MAE, 6.50%, 3/1/29 444,360 464,076 FANNIE MAE, 6.00%, 4/1/14 631,195 659,397 FANNIE MAE CL, 6.50%, 7/1/32 3,941,110 4,107,820 FANNIE MAE CL, 6.50%, 9/1/18 2,563,420 2,710,467 FANNIE MAE, 6.50%, 10/1/31 1,032,492 1,077,013 FANNIE MAE, 6.50%, 5/1/32 1,427,018 1,487,382 FANNIE MAE CL, 5.50%, 2/1/33 1,449,429 1,447,134 FANNIE MAE CL, 5.50%, 4/1/33 1,046,407 1,043,085 FANNIE MAE CL, 5.00%, 8/1/33 3,776,536 3,661,227 FANNIE MAE CL, 5.00%, 6/1/34 1,250,000 1,209,312 ------------- 31,647,194 ------------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION 8.1% GOVERNMENT NATIONAL MORTGAGE ASSOC., 5.00%, 8/15/33 1,835,926 1,782,914 GOVERNMENT NATIONAL MORTGAGE ASSOC., 6.00%, 12/15/31 1,198,565 1,231,481 10 ACTIVA Mutual Funds Semiannual Report The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments continued INTERMEDIATE BOND FUND - 6/30/04 (Unaudited) % OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) - ------------------------- ------------ ----------- ------------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (CONTINUED) 8.1% GOVERNMENT NATIONAL MORTGAGE ASSOC., 7.00%, 11/15/31 630,007 $ 669,869 GOVERNMENT NATIONAL MORTGAGE ASSOC., 6.00%, 10/15/32 2,141,095 2,198,012 GOVERNMENT NATIONAL MORTGAGE ASSOC., 6.50%, 5/15/29 1,074,329 1,125,016 GOVERNMENT NATIONAL MORTGAGE ASSOC., 7.00%, 12/15/28 382,552 407,296 GOVERNMENT NATIONAL MORTGAGE ASSOC., 7.00%, 9/15/29 380,879 405,160 GOVERNMENT NATIONAL SINGLE FAMILY, 6.50%, 8/15/31 1,881,749 1,969,518 GOVERNMENT NATIONAL SINGLE FAMILY, 7.00%, 12/15/29 1,064,656 1,132,930 GOVERNMENT NATIONAL MORTGAGE ASSOC., 4.50%, 4/15/18 2,499,967 2,454,348 ------------- 13,376,544 ------------- CORPORATE BONDS- 38.4% AUTOMOTIVE 0.9% FORD MOTOR CREDIT CO., 7.00%, 10/1/13 900,000 910,125 GENERAL MOTORS, 8.375%, 7/15/33 550,000 583,688 ------------- 1,493,813 ------------- BANKING 7.2% BANK OF AMERICA CORP., 3.875%, 1/15/08 1,500,000 1,498,800 FIRST DATA CORPORATION, 4.70%, 11/1/06 1,750,000 1,807,452 LEHMAN BROTHERS HOLDINGS, INC., 8.25%, 6/15/07 1,750,000 1,969,147 MELLON CAP II, 7.995%, 1/15/27 2,040,000 2,263,625 NATIONAL RURAL UTIL., 8.00%, 3/1/32 1,500,000 1,857,374 WELLS FARGO & CO., 5.90%, 5/21/06 2,500,000 2,628,125 ------------- 12,024,523 ------------- BANKING AND FINANCIAL SERVICES 1.1% GREENPOINT FINL., 3.20%, 6/6/08 1,900,000 1,821,950 ------------- BROADCASTING 2.0% CLEAR CHANNEL, 5.00%, 3/15/12 1,250,000 1,218,078 COMCAST CORP., 6.50%, 1/15/15 1,000,000 1,038,423 LIBERTY MEDIA, 5.70%, 5/15/13 1,000,000 986,812 ------------- 3,243,313 ------------- COMMERCIAL SERVICES 1.9% ARAMARK SERVICES, INC., 7.00%, 7/15/06 1,550,000 1,652,688 CENDANT CORP., 7.375%, 1/15/13 1,300,000 1,452,369 ------------- 3,105,057 ------------- DIVERSIFIED 1.0% GENERAL ELECTRIC CAP. CORP., 3.125%, 4/1/09 1,725,000 1,638,750 ------------- ELECTRIC UTILITY 4.9% AMERICAN ELECTRIC POWER, 5.375%, 3/15/10 1,150,000 1,176,415 ENTERGY GULF STS, 6.00%, 12/1/12 1,600,000 1,587,824 PACIFIC GAS & ELEC., 4.80%, 3/1/14 1,725,000 1,637,605 PECO ENERGY TRANSITION TRUST, 6.52%, 12/31/10 3,385,000 3,712,901 ------------- 8,114,745 ------------- ENTERTAINMENT 1.1% VIACOM, INC., 5.625%, 5/1/07 1,700,000 1,786,831 ------------- ACTIVA Mutual Funds Semiannual Report 11 The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments continued INTERMEDIATE BOND FUND - 6/30/04 (Unaudited) % OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) - ------------------------- ------------ ----------- ------------- FINANCIAL SERVICES 8.5% CIT GROUP, INC., 7.375%, 4/2/07 1,800,000 $ 1,970,496 CAPITAL ONE BANK, 4.875%, 5/15/08 1,250,000 1,264,544 COUNTRYWIDE HOME LOAN, 5.50%, 2/1/07 2,500,000 2,613,020 DETROIT EDISON SECURITIZATION FUNDING LLC, 6.19%, 3/1/13 500,000 539,706 GENERAL MOTORS ACCEPT. CORP., 6.125%, 8/28/07 800,000 835,359 GOLDMAN SACHS CAPITAL I, 6.345%, 2/15/34 1,650,000 1,554,445 INTERNATIONAL LEASE FIN., 5.875%, 5/1/13 1,500,000 1,540,491 PSE&G TRANSITION FUNDING LLC, 6.45%, 3/15/13 1,450,000 1,586,822 VANDERBILT MORTGAGE FINANCE, 7.82%, 11/7/17 2,198,551 2,264,540 ------------- 14,169,423 ------------- FOOD PRODUCTS 0.6% KROGER CO., 5.50%, 2/1/13 1,000,000 998,942 ------------- FOREST PRODUCTS 0.7% WEYERHAEUSER CO., 7.375%, 3/15/32 1,100,000 1,199,865 ------------- HEALTH CARE 1.0% AETNA, INC., 7.375%, 3/1/06 1,500,000 1,599,375 ------------- OIL & EXPLOR PROD & SER 1.2% PEMEX PROJECT FUNDING MASTER TR, 8.50%, 2/15/08 1,000,000 1,105,000 TRANSOCEAN SEDCO RIG, 7.375%, 4/15/18 750,000 847,411 ------------- 1,952,411 ------------- PRINTING & PUBLISHING 1.0% NEW AMERICA HOLDINGS, 7.375%, 10/17/08 1,595,000 1,757,146 ------------- RAILROADS 0.7% BRIT. SKY BROADCA. BSY, 8.20%, 7/15/09 1,000,000 1,153,375 ------------- REAL ESTATE 0.6% PULTE HOMES, INC., 6.375%, 5/15/33 1,100,000 1,012,000 ------------- TRANSPORTATION & SHIPPING 1.0% FEDEX CORP., 6.875%, 2/15/06 1,500,000 1,589,317 ------------- TELECOMMUNICATIONS 3.0% AOL TIME WARNER, 7.625%, 4/15/31 750,000 814,024 DEUTSCHE TELEKOM INT. FIN., 8.50%, 6/15/10 1,000,000 1,169,950 FRANCE TELECOM, 8.50%, 3/1/11 800,000 1,006,876 SPRINT CAPITAL CORP., 8.75%, 3/15/32 750,000 876,465 VERIZON GLOBAL FDG. CORP., 7.75%, 6/15/32 1,000,000 1,127,790 ------------- 4,995,105 ------------- TOTAL CORPORATE BONDS 63,655,941 ------------- COLLATERALIZED MORTGAGE OBLIGATIONS 1.1% AMERICAN GENERAL FINANCE, 4.50%, 11/15/07 1,800,000 1,829,758 ------------- TOTAL FIXED INCOME - 100% (Cost $165,998,542) $ 165,647,319 ============= 12 ACTIVA Mutual Funds Semiannual Report The accompanying notes are an integral part of these financial statements.
ACTIVA Schedule of Investments VALUE FUND - 6/30/04 (Unaudited)
% OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) - ------------------------- ------------ ----------- ------------- US TREASURY BILLS - 0.2% 0.2% U.S. TREASURY BILLS 7/15/04 180,000 $ 179,919 ------------- TOTAL US TREASURY BILLS (Cost $179,935) 179,919 ------------- COMMON STOCKS - 99.8% AEROSPACE 2.6% UNITED TECHNOLOGIES 31,436 2,875,765 ------------- AUTOMOTIVE 0.9% FORD MOTOR COMPANY 39,800 622,870 GENERAL MOTORS 8,800 409,992 ------------- 1,032,862 ------------- AUTOMOTIVE PARTS & EQUIPMENT 0.2% DANA CORP. 10,148 198,901 ------------- BANKING 16.6% BANK OF AMERICA CORP. 67,865 5,742,736 CITIGROUP, INC. 121,672 5,657,748 COMERICA, INC. 19,160 1,051,501 HIBERNIA CORP. 52,319 1,271,352 KEYCORP 43,900 1,312,171 MBNA CORPORATION 19,600 505,484 NATIONAL CITY CORP. 12,800 448,128 SUN TRUST BANKS, INC. 8,600 558,914 UNIONBANCAL CORPORATION 26,609 1,500,748 WACHOVIA CORP. 10,843 482,513 ------------- 18,531,295 ------------- BANKING & FINANCIAL SERVICES 1.3% UBS AG-REGISTERED 20,172 1,433,422 ------------- BEVERAGES - DOMESTIC 0.9% COCA-COLA COMPANY 7,100 358,408 COCA-COLA ENTERPRISES 23,500 681,265 ------------- 1,039,673 ------------- BROADCASTING 1.2% COX COMMUNICATIONS *47,400 1,317,246 ------------- BUILDING PRODUCTS 0.5% SHERWIN-WILLIAMS & CO. 12,700 527,685 ------------- CHEMICALS 1.0% PPG INDUSTRIES, INC. 5,000 312,450 ROHM & HAAS COMPANY 18,026 749,521 ------------- 1,061,971 ------------- ACTIVA Mutual Funds Semiannual Report 13 The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments continued VALUE FUND - 6/30/04 (Unaudited) % OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) - ------------------------- ------------ ----------- ------------- COMMERCIAL SERVICES 0.3% CENDANT CORP. 14,812 $ 362,598 ------------- COMPUTER SOFTWARE 2.6% DST SYSTEMS, INC. *7,000 336,630 MICROSOFT CORP. 90,000 2,570,400 ------------- 2,907,030 ------------- COMPUTERS 0.4% CITADEL BROADCASTING CORP. *33,800 492,466 ------------- CONSTRUCTION - DOMESTIC 0.6% CENTEX CORPORATION 6,200 283,650 PULTE CORPORATION 7,900 411,037 ------------- 694,687 ------------- CONSUMER GOODS & SERVICES 0.6% COLGATE-PALMOLIVE 5,300 309,785 GILLETTE CO. 9,665 409,796 ------------- 719,581 ------------- COSMETICS 0.7% KIMBERLY-CLARK CORP. 11,200 737,856 ------------- DEFENSE 1.2% GENERAL DYNAMICS 13,022 1,293,085 ------------- ELECTRIC UTILITY 4.6% AMEREN CORPORATION 13,100 562,776 AMERICAN ELECTRIC POWER 23,400 748,800 CINERGY CORP. 12,764 485,032 ENTERGY CORP. 26,500 1,484,265 EXELON CORP. 53,960 1,796,328 ------------- 5,077,201 ------------- ELECTRICAL & ELECTRONIC 0.4% PUBLIC SERVICE ENTERPRISE GROUP, INC. 11,800 472,354 ------------- ELECTRICAL EQUIPMENT 3.6% FAIRCHILD SEMICONDUCTOR INT'L. *14,669 240,132 GENERAL ELECTRIC & CO. 118,500 3,839,400 ------------- 4,079,532 ------------- ELECTRONICS 2.2% MOTOROLA, INC. 100,464 1,833,468 NATIONAL SEMICONDUCTOR CORP. *7,600 167,124 TEKTRONIX, INC. 12,000 408,240 ------------- 2,408,832 ------------- 14 ACTIVA Mutual Funds Semiannual Report The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments continued VALUE FUND - 6/30/04 (Unaudited) % OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) - ------------------------- ------------ ----------- ------------- ENTERTAINMENT 0.5% FOX ENTERTAINMENT GRP., INC. -A *19,900 $ 531,330 ------------- ENVIRONMENTAL SERVICES 0.2% WASTE MANAGEMENT, INC. 8,800 269,720 ------------- FINANCIAL SERVICES 9.0% AMBAC FINANCIAL GROUP, INC. 4,500 330,480 CAPITAL ONE FINANCIAL 17,538 1,199,249 COUNTRYWIDE CREDIT IND., INC. 16,360 1,149,290 FREDDIE MAC 19,557 1,237,958 FANNIE MAE 8,800 627,968 GOLDEN WEST FINANCIAL CORP. 16,823 1,789,126 ISTAR FINANCIAL, INC. 14,900 596,000 MERRILL LYNCH & CO. 31,064 1,676,835 MORGAN STANLEY DEAN WITTER DISCOVERY 27,833 1,468,747 ------------- 10,075,653 ------------- HOME BUILDERS 1.8% D.R. HORTON, INC. 6,600 187,440 KING PHARMACEUTICALS, INC. *52,997 606,816 LENNAR CORPROATION CLASS A 8,400 375,648 STANDARD-PACIFIC CORP. 16,300 803,590 ------------- 1,973,494 ------------- INFORMATIONAL SERVICES 2.8% AFFILIATED COMPUTER SERVICES *11,100 587,634 TIME WARNER *145,723 2,561,810 ------------- 3,149,444 ------------- INSURANCE 6.6% HARTFORD FINANCIAL SERVICES GROUP 25,500 1,752,870 MBIA, INC. 37,212 2,125,549 ST. PAUL COMPANIES 46,001 1,864,881 ACE LIMITED 22,500 951,300 XL CAPITAL LIMITED 8,590 648,201 ------------- 7,342,801 ------------- MACHINERY & EQUIPMENT 0.4% CATERPILLAR, INC. 5,000 397,200 ------------- METALS & MINING 0.4% ALCOA, INC. 15,010 495,780 ------------- OFFICE/BUSINESS EQUIPMENT & SUPPLIES 2.9% I.B.M. 26,120 2,302,478 PITNEY BOWES, INC. 13,500 597,375 XEROX CORP. *22,930 332,485 ------------- 3,232,338 ------------- ACTIVA Mutual Funds Semiannual Report 15 The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments continued VALUE FUND - 6/30/04 (Unaudited) % OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) - ------------------------- ------------ ----------- ------------- OIL/GAS - EQUIPMENT & SVCS 2.9% CONOCOPHILLIPS 35,900 $ 2,738,811 MARATHON OIL CORP. 12,100 457,864 ------------- 3,196,675 ------------- OIL & GAS EXPLOR PROD & SER 8.9% ANADARKO PETROLEUM CORP. 6,200 363,320 CHEVRONTEXACO CORP. 34,628 3,258,841 DEVON ENERGY CORP. 19,842 1,309,572 EXXON MOBIL CORP. 86,464 3,839,866 KERR-MCGEE CORP. 11,700 629,109 UNOCAL CORP. 15,000 570,000 ------------- 9,970,708 ------------- OIL & GAS TRANSMISSION 0.9% UGI CORP. 30,900 991,890 ------------- PAPER PRODUCTS 3.2% TEMPLE - INLAND, INC. 26,470 1,833,047 WEYERHAEUSER 27,571 1,740,282 ------------- 3,573,329 ------------- PHARMACEUTICALS 2.6% ABBOTT LABORATORIES 17,460 711,670 ICOS CORPORATION *20,400 608,736 MEDCO HEALTH SOLUTIONS *43,562 1,633,575 ------------- 2,953,981 ------------- RAILROADS 1.9% CANADIAN NATIONAL RAILWAY 48,471 2,112,851 ------------- RESTAURANTS 0.8% MCDONALDS CORP. 35,100 912,600 ------------- RETAIL STORES 2.8% FEDERATED DEPARTMENT STORES 36,008 1,767,993 FOOT LOCKER, INC. 21,323 519,002 GAP, INC. 34,800 843,900 ------------- 3,130,895 ------------- REAL ESTATE INVESTMENT TRUST 0.3% THORNBURG MORTGAGE, INC. 13,700 369,215 ------------- STEEL 0.7% PRECISION CASTPARTS CORP. 15,300 836,757 ------------- TOBACCO 2.4% ALTRIA GROUP, INC. 53,925 2,698,946 ------------- 16 ACTIVA Mutual Funds Semiannual Report The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments continued VALUE FUND - 6/30/04 (Unaudited) % OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) - ------------------------- ------------ ----------- ------------- TELECOMMUNICATIONS 5.4% AT&T CORP. NEW 14,357 $ 210,043 CITIZENS COMMUNICATIONS COMPANY *43,405 525,200 LIBERTY MEDIA INTERNATIONAL *9,300 345,030 NEXTEL COMMUNICATIONS, INC., CLASS A *64,700 1,724,902 SPRINT CORP. 102,043 1,795,957 VERIZON COMMUNICATIONS 38,300 1,386,077 ------------- 5,987,209 ------------- TOTAL COMMON STOCKS (Cost $101,983,341) 111,466,858 ------------- TOTAL INVESTMENTS - 100% (Cost $102,163,276) $ 111,646,777 =============
*Non-dividend producing as of June 30, 2004 At June 30, 2004, the Fund's open future contracts were as follows:
Number of Opening Face Market Contracts Contract Type Amount Value - ------------------------------------------------------------------------------------------------------------------- 12 Standard & Poor's 500, 9/17/04 $668,662 $684,240
ACTIVA Mutual Funds Semiannual Report 17 The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments GROWTH FUND - 6/30/04 (Unaudited)
% OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) - ------------------------- ------------ ----------- ------------- COMMERCIAL PAPER - 1.0% 1.0% GOLDMAN SACHS GROUP, INC., DN, 7/6/04 313,000 $ 312,946 ------------- TOTAL COMMERCIAL PAPER (Cost $312,946) 312,946 ------------- COMMON STOCKS - 99.0% APPAREL 1.0% POLO RALPH LAUREN CORPORATION 8,900 306,605 ------------- BANKING 3.1% CITIGROUP, INC. 12,410 577,065 MBNA CORPORATION 14,500 373,955 ------------- 951,020 ------------- BEVERAGES - DOMESTIC 2.9% COCA-COLA COMPANY 17,600 888,448 ------------- BIOTECHNOLOGY 0.5% GENENTECH, INC. *2,900 162,980 ------------- BUSINESS SERVICES 1.5% FIRST DATA CORP. 10,600 471,912 ------------- COMMUNICATIONS EQUIPMENT 2.4% COMCAST CORPORATION NEW CLASS A SPECIAL *7,700 212,597 QUALCOMM, INC. 7,000 510,860 ------------- 723,457 ------------- COMPUTER SOFTWARE 5.1% MICROSOFT CORP. 36,420 1,040,155 ORACLE CORP. *45,200 539,236 ------------- 1,579,391 ------------- COMPUTERS 7.6% CISCO SYSTEMS, INC. *47,310 1,121,247 INTEL CORP. 38,680 1,067,568 ZEBRA TECHNOLOGIES CORPORATION *1,900 165,300 ------------- 2,354,115 ------------- DRUGS 2.9% IVAX CORP. *6,500 155,935 NOVARTIS AG - ADR 16,610 739,145 ------------- 895,080 ------------- DATA PROCESSING & REPRODUCTION 0.5% ALLIANCE DATA SYSTEMS CORP. *3,900 164,775 ------------- 18 ACTIVA Mutual Funds Semiannual Report The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments continued GROWTH FUND - 6/30/04 (Unaudited) % OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) - ------------------------- ------------ ----------- ------------- DEFENSE 1.4% GENERAL DYNAMICS 4,200 $ 417,060 ------------- EDUCATION 1.1% CAREER EDUCATION CORP. *7,300 332,588 ------------- ELECTRIC UTILITY 1.1% CONSOL ENERGY, INC. 9,700 349,200 ------------- ELECTRICAL EQUIPMENT 3.4% GENERAL ELECTRIC & CO. 32,175 1,042,470 ------------- ELECTRONICS 7.4% EOG RESOURCES, INC. 13,800 823,998 HARMAN INTERNATIONAL INDUSTRIES 3,400 309,400 INTERNATIONAL GAME TECHNOLOGY 15,240 588,264 MILLIPORE CORP. *3,000 169,110 PMC - SIERRA, INC. *12,800 183,680 FLEXTRONICS INTERNATIONAL LTD. 13,200 210,540 ------------- 2,284,992 ------------- ENTERTAINMENT 4.0% CAESARS ENTERTAINMENT, INC. *33,500 502,500 WALT DISNEY COMPANY 21,300 542,937 INTERACTIVECORP *5,805 174,963 ------------- 1,220,400 ------------- FINANCIAL SERVICES 5.4% AMERICAN EXPRESS COMPANY 9,940 510,717 FANNIE MAE 3,200 228,352 GOLDMAN SACH GROUP, INC. 3,000 282,480 PROVIDIAN FINANCIAL CORP. *18,300 268,461 SLM CORP. 9,600 388,320 ------------- 1,678,330 ------------- HOUSEHOLD PRODUCTS/WARES 1.3% MANPOWER INCORPORATED 7,900 401,083 ------------- HOME FURNISHINGS 0.8% BED, BATH AND BEYOND, INC. *6,200 238,390 ------------- HOTELS & LODGING 1.5% MARRIOTT INTERNATIONAL CLASS-A 9,200 458,896 ------------- INDUSTRIAL GOODS & SERVICES 2.5% CLOROX COMPANY 11,000 591,580 EXPEDITORS INTERNATIONAL 3,600 177,876 ------------- 769,456 ------------- ACTIVA Mutual Funds Semiannual Report 19 The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments continued GROWTH FUND - 6/30/04 (Unaudited) % OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) - ------------------------- ------------ ----------- ------------- INFORMATIONAL SERVICES 2.7% YAHOO!, INC. *23,000 $ 835,590 ------------- INSURANCE 2.1% AMERICAN INTERNATIONAL GROUP 9,040 644,371 ------------- INTERNET CONTENT 1.0% JUNIPER NETWORKS, INC. *12,400 304,668 ------------- MEDICAL EQUIPMENT & SUPPLIES 6.8% ALLERGAN, INC. 2,500 223,800 GUIDANT CORP. 8,300 463,804 JOHNSON & JOHNSON 6,410 357,037 TYCO INTERNATIONAL LTD. 21,700 719,138 ALCON, INC. 4,200 330,330 ------------- 2,094,109 ------------- MEDICAL LABS & TESTING SERV. 1.1% CHARLES RIVER LABORATORIES INTERNATIONAL, INC. *7,000 342,090 ------------- MEDICAL SERVICES 1.4% UNITEDHEALTH GROUP, INC. 7,100 441,975 ------------- OIL & GAS EXPLOR PROD & SER 1.5% BURLINGTON RESOURCES 4,800 173,664 NEWFIELD EXPLORATION CO. *5,300 295,422 ------------- 469,086 ------------- PHARMACEUTICALS 11.0% AMGEN, INC. *2,750 150,067 BIOGEN IDEC, INC. *8,200 518,650 CAREMARK RX, INC. *14,000 461,160 CHIRON CORPORATION *5,500 245,520 ELAN CORP PLC - SPONS ADR *7,700 190,498 MONSANTO COMPANY 8,700 334,950 PFIZER, INC. 43,214 1,481,376 ------------- 3,382,221 ------------- PRINTING & PUBLISHING 2.4% THE NEWS CORPORATION, LTD. - SPONSORED ADR 20,900 740,278 ------------- RESTAURANTS 0.8% STARBUCKS CORP. *5,900 256,532 ------------- 20 ACTIVA Mutual Funds Semiannual Report The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments continued GROWTH FUND - 6/30/04 (Unaudited) % OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) - ------------------------- ------------ ----------- ------------- RETAIL STORES 4.3% COACH, INC. *5,020 $ 226,854 NORDSTROM, INC. 6,200 264,182 STAPLES, INC. 11,000 322,410 TARGET CORP. 12,200 518,134 ------------- 1,331,580 ------------- SECURITY BROKERS & DEALERS 0.6% AMERITRADE HOLDING CORP. *15,400 174,790 ------------- SHOES - LEATHER 1.1% NIKE INCORPORATED - CL B 4,400 333,300 ------------- TECHNOLOGY-SOFTWARE 4.1% LINEAR TECHNOLOGY 14,200 560,474 SAP AKTIENGESELLSCHAFT 17,000 710,770 ------------- 1,271,244 ------------- TELECOMMUNICATIONS 0.7% RED HAT, INC. *9,800 225,106 ------------- TOTAL COMMON STOCKS (Cost $26,472,495) 30,537,588 ------------- TOTAL INVESTMENTS - 100% (Cost $26,785,441) $ 30,850,534 ============= *Non-dividend producing as of June 30, 2004 ACTIVA Mutual Funds Semiannual Report 21 The accompanying notes are an integral part of these financial statements.
ACTIVA Schedule of Investments INTERNATIONAL FUND - 6/30/04 (Unaudited)
% OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) - ------------------------- ------------ ----------- ------------- COMMON STOCKS - 100% ADVERTISING 0.9% AEGIS GROUP PLC 159,340 $ 259,344 ------------- AEROSPACE 0.9% THALES SA 7,337 268,422 ------------- AUTOMOTIVE 1.8% TOYOTA MOTOR 13,000 526,600 ------------- BANKING 3.9% HSBC HOLDINGS 33,132 492,696 ROYAL BANK OF SCOTLAND 14,132 406,979 BANCO BILBAO 18,300 244,466 ------------- 1,144,141 ------------- BANKING & FINANCIAL SERVICES 4.0% SOCIETE GENERALE -A 4,187 355,824 SUMITOMO MITSUI FINANCIAL GROUP, INC. 68 466,151 UBS AG- REGISTERED 4,681 329,845 ------------- 1,151,820 ------------- BEVERAGES - FOREIGN 1.1% INTERCONTINENTAL HOTELS 29,779 314,575 ------------- BREWERY 1.1% INTERBREW (BEL) 9,572 304,537 ------------- BIOTECHNOLOGY 1.6% CELLTECH GROUP PLC *46,546 463,417 ------------- BROADCASTING 2.5% BRITISH SKY BROADCASTING 30,700 346,295 TV FRANCAISE 11,899 374,807 ------------- 721,102 ------------- BUILDING PRODUCTS 1.8% HOLDERSBANK REG 9,376 509,826 ------------- BUSINESS SERVICES 2.5% WPP GROUP PLC 14,282 145,042 VEDIOR N.V. *19,835 289,105 TOPPAN PRINTING 27,000 305,595 ------------- 739,742 ------------- CHEMICALS 2.5% SHIN ETSU CHEM 8,200 293,085 NOVARTIS AG-REG 9,723 428,933 ------------- 722,018 ------------- 22 ACTIVA Mutual Funds Semiannual Report The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments continued INTERNATIONAL FUND - 6/30/04 (Unaudited) % OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) - ------------------------- ------------ ----------- ------------- COMMERCIAL SERVICES 1.0% BOUYGUES 8,687 $ 290,860 ------------- COMPUTER SOFTWARE 2.2% SAP AG 2,100 350,030 DASSAULT SYSTEMS SA (FFR) 6,419 297,627 ------------- 647,657 ------------- COMPUTERS 1.0% ASM LITHOGRAPHY HOLDING NV 17,700 302,847 ------------- CONSUMER GOODS & SERVICES 1.3% FUJI PHOTO FILM 12,000 376,117 ------------- COSMETICS 2.4% L'OREAL (FFR) 4,723 377,241 CHRISTIAN DIOR 5,116 330,826 ------------- 708,067 ------------- CRUISE LINES 1.2% CARNIVAL PLC 7,184 348,895 ------------- DATA PROCESSING & REPRODUCTION 1.1% CANON, INC. 6,000 316,180 ------------- ELECTRICAL & ELECTRONIC 1.0% CREDIT SUISSE 584,000 300,333 ------------- ELECTRONICS 5.8% ATI TECHNOLOGIES, INC. *13,700 258,382 ELECTROCOMPONENTS PLC 28,154 182,274 KYOCERA CORPORATION 6,000 509,188 LG ELECTRONICS, INC. 8,090 383,671 MATSUSHITA ELECTRIC INDL. CO. 25,000 354,901 ------------- 1,688,416 ------------- ENTERTAINMENT 1.4% PEARSON PLC 33,290 404,488 ------------- FINANCIAL SERVICES 5.3% MAN GROUP PLC 14,400 372,914 DAIWA SECURITIES 45,000 323,329 MIZUHO FINANCIAL GROUP 101 458,186 ING GROUP 16,800 396,531 ------------- 1,550,960 ------------- ACTIVA Mutual Funds Semiannual Report 23 The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments continued INTERNATIONAL FUND - 6/30/04 (Unaudited) % OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) - ------------------------- ------------ ----------- ------------- FOOD PRODUCTS 4.4% DIAGEO PLC 37,092 $ 500,125 CADBURY'S SCHWEPPES 35,270 304,300 JPY AJINOMOTO CO., INC. 39,000 469,651 ------------- 1,274,076 ------------- FOREIGN AGENCIES 0.8% GREEK ORGANIZATION OF FOOTBALL PROGNOSTICS 12,380 233,764 ------------- HEALTH CARE 2.4% ROCHE HOLDINGS 7,006 693,663 ------------- HOME BUILDERS 1.4% GEORGE WIMPEY PLCITY 60,500 404,855 ------------- HOUSEHOLD PRODUCTS/WARES 1.2% RECKITT BENSKISER 12,700 359,521 ------------- HOUSEWARES 0.8% ASAHI GLASS COMPANY 22,000 228,841 ------------- INFORMATIONAL SERVICES 1.0% TELENOR ASA 41,667 289,742 ------------- INSURANCE 0.9% AXA 12,400 273,065 ------------- INTERNET CONTENT 0.7% NHN CORP. 1,932 192,280 ------------- MACHINERY & EQUIPMENT 0.7% ASM INTERNATIONAL *9,831 203,096 ------------- MANUFACTURING-CONSUMER GOODS 1.1% CIE FINANCIERE RICHEMONT *12,177 317,940 ------------- MANUFACTURING - MISCELLANEOUS 1.4% SIEMENS AG (REGD) 5,693 409,696 ------------- MATERIALS 1.1% WMC RESOURCES LTD. 91,933 315,079 ------------- MERCHANDISING 0.9% SYNTHES, INC. 2,210 251,898 ------------- NATURAL GAS UTILITY 1.6% GAZPROM OAO MOSCOW ADR 4,000 114,800 TOKYO GAS CO. LTD. 100,000 354,672 ------------- 469,472 ------------- 24 ACTIVA Mutual Funds Semiannual Report The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments continued INTERNATIONAL FUND - 6/30/04 (Unaudited) % OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) - ------------------------- ------------ ----------- ------------- OIL & GAS EXPLOR PROD & SER 5.6% SAIPEM S.P.A. 22,600 $ 205,672 TOTAL S.A. 'B'(FFR) 1,671 318,575 LUKOIL HOLDING - ADR 1,600 168,320 ENTE NAZIONALE IDROC (ITL) 12,300 244,225 PETRO-CANADA 4,200 180,593 PETROLEO BRASILEIRO S.A. - ADR 6,500 182,455 PRECISION DRILLING CORP. *6,900 331,269 ------------- 1,631,109 ------------- PHARMACEUTICALS 3.3% MERCK KGAA 8,100 489,787 CHUGAI PHARMACEUTICAL CO. LTD. 21,100 331,056 TEVA PHARMACEUTICAL - SP ADR 1,900 127,851 ------------- 948,694 ------------- PRINTING & PUBLISHING 1.2% NEWS CORP. 39,023 344,686 ------------- PUBLISHING 1.4% UNITED BUSINESS MEDIA 44,811 412,012 ------------- RETAIL STORES 3.4% NEXT PLC 12,793 330,137 ESPRIT HOLDINGS LIMITED 63,500 284,129 ITO YOKADO COMPANY 9,000 385,190 ------------- 999,456 ------------- RETAIL STORES - GROCERY 0.8% TESCO ORD SP 49,500 239,008 ------------- REAL ESTATE 0.7% MITSUBISHI ESTATE CO. LTD. (JP) 16,000 198,543 ------------- TECHNOLOGY 1.4% UNITED MICROELECTRONICS CORP. LN 538,000 399,822 ------------- TECHNOLOGY-SOFTWARE 1.5% ERICSSON (LM) TEL. CO. ADR *14,600 436,832 ------------- TOBACCO 1.0% ALTADIS S.A. 9,687 299,357 ------------- TOYS 1.0% NINTENDO 2,600 301,425 ------------- ACTIVA Mutual Funds Semiannual Report 25 The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments continued INTERNATIONAL FUND - 6/30/04 (Unaudited) % OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) - ------------------------- ------------ ----------- ------------- TELECOMMUNICATIONS 7.6% AMERICA MOVIL-SERIES L ADR 9,600 $ 349,152 COLT TELECOM GROUP PLC *146,103 212,628 VODAFONE 124,851 273,399 MM02 PLC *84,122 141,495 TELECOM ITALIA 42,300 239,824 DEUTSCHE TELEKOM *25,543 449,061 ALCATEL ALSTHOM *21,480 331,375 ADVANCED INFO SERVICE PUBLIC COMPANY LIMITED 92,600 206,105 ------------- 2,203,039 ------------- TELECOMMUNICATIONS-SERVICES AND EQUIPMENT 1.7% TELEKOM AUSTRIA AG 20,666 315,548 SK TELECOM 1,000 164,431 ------------- 479,979 ------------- WHOLESALE DISTRIBUTION 0.7% SUMITOMO CORPORATION 28,000 203,235 ------------- TOTAL COMMON STOCKS (Cost $26,607,274) 29,074,549 ------------- TOTAL INVESTMENTS - 100% (Cost $26,607,274) $ 29,074,549 ============= *Non-dividend producing as of June 30, 2004 26 ACTIVA Mutual Funds Semiannual Report The accompanying notes are an integral part of these financial statements.
ACTIVA Schedule of Investments continued INTERNATIONAL FUND - 6/30/04 (Unaudited) At June 30, 2004 the breakdown by country was: % OF MARKET ACTUAL COUNTRY VALUE MARKET VALUE - -------- ---------- ------------- Australia 2.3% $ 659,765 Austria 1.1% 315,548 Belgium 1.0% 304,537 Bermuda 1.0% 284,129 Brazil 0.6% 182,455 Canada 1.8% 511,862 China 0.9% 258,382 France 11.1% 3,218,620 Germany 5.8% 1,698,574 Greece 0.8% 233,764 Israel 0.4% 127,851 Italy 2.4% 689,721 Japan 22.0% 6,401,945 Republic of Korea 2.5% 740,383 Mexico 1.2% 349,152 Netherlands 4.1% 1,191,578 Norway 1.0% 289,742 Russian Federation 0.6% 168,320 Spain 1.8% 543,823 Sweden 1.5% 436,832 Switzerland 8.8% 2,532,106 Taiwan 2.4% 700,155 Thailand 0.7% 206,105 United Kingdom 23.8% 6,914,400 United States 0.4% 114,800 ------------ ------------- 100.0% $ 29,074,549 ============ ============= ACTIVA Mutual Funds Semiannual Report 27 The accompanying notes are an integral part of these financial statements.
ACTIVA Statement of Assets and Liabilities MONEY MARKET INTERMEDIATE INTERNATIONAL As of June 30, 2004 (Unaudited) FUND BOND FUND VALUE FUND GROWTH FUND FUND ------------- ------------- ------------- ------------- ------------- ASSETS Investments at cost $31,057,343 $165,998,542 $102,163,276 $26,785,441 $26,607,274 ------------- ------------- ------------- ------------- ------------ Investments at value 31,057,343 165,647,319 111,646,777 30,850,534 29,074,549 Cash 801 4,244,363 1,240,918 152,450 1,034,777 Foreign currency held at value (cost $13,405) 13,392 Receivables: Investments sold -- 1,268,328 -- -- 583,614 Investment income 26,805 1,649,182 148,984 19,635 45,963 Other assets 11,389 13,628 20,062 10,941 31,681 ------------- ------------- ------------- ------------- ------------ Total Assets 31,096,338 172,822,820 113,056,741 31,033,560 30,783,976 ------------- ------------- ------------- ------------- ------------ LIABILITIES Payables: Investments purchased -- 3,104,639 297,790 148,398 967,173 Income payable 9,122 -- -- -- -- Advisory fees 27,079 140,736 163,350 52,011 62,520 Transfer agent fees 1,983 244 37,923 825 496 12b-1 fees -- 63,097 38,769 11,285 11,033 Service fees 11,605 63,097 41,547 11,285 11,033 Other liabilities -- 6,319 -- -- 493 Accrued expenses 6,663 12,658 16,243 8,832 15,013 ------------- ------------- ------------- ------------- ------------ Total Liabilities 56,452 3,390,790 595,622 232,636 1,067,761 ------------- ------------- ------------- ------------- ------------ NET ASSETS $31,039,886 $169,432,030 $112,461,119 $30,800,924 $29,716,215 ============= ============= ============= ============= ============ SHARES OUTSTANDING 31,055,397 16,846,404 15,559,344 4,726,993 4,123,336 ============= ============= ============= ============= ============ NET ASSET VALUE PER SHARE $1.00 $10.06 $6.52 $7.21 Class A based on net assets of $104,832,689 and 14,507,884 shares outstanding $7.23 Class R based on net assets of $7,628,430 and 1,051,460 shares outstanding $7.26 28 ACTIVA Mutual Funds Semiannual Report The accompanying notes are an integral part of these financial statements.
ACTIVA Statement of Operations For the six month period ended June 30, 2004 (Unaudited)
MONEY MARKET INTERMEDIATE INTERNATIONAL FUND BOND FUND VALUE FUND GROWTH FUND FUND ------------- ------------- ------------- ------------- ------------ INVESTMENT INCOME Interest $174,083 $4,049,174 $10,406 $3,458 $1,129 Dividends -- -- 1,246,837 111,840 349,518 Miscellaneous 1,134 11,962 13,533 4,504 13,227 ------------- ------------- ------------- ------------- ------------ Total Investment Income 175,217 4,061,136 1,270,776 119,802 363,874 ------------- ------------- ------------- ------------- ------------ EXPENSES Advisory fees 54,554 283,318 332,092 104,222 126,477 12b-1 fees -- 127,348 82,867 22,617 22,320 Service fees 23,380 127,348 87,251 22,617 22,320 Shareholder report 2,002 910 25,480 1,274 1,001 Fund accounting fees 19,656 33,619 34,762 20,930 26,804 Audit fees 8,190 8,190 8,190 8,190 8,190 Custodian fees 6,006 9,828 17,290 7,166 29,120 Insurance 598 3,332 2,629 577 558 Legal fees 4,368 4,368 6,188 4,368 4,368 Registration fees 910 3,822 2,466 728 728 Transfer agent fees 4,368 546 70,980 1,729 1,001 Transfer agent fees - Class R -- -- 5,846 -- -- ------------- ------------- ------------- ------------- ------------ Total Expenses 124,032 602,629 676,041 194,418 242,887 ------------- ------------- ------------- ------------- ------------ Net Investment Income (Loss) 51,185 3,458,507 594,735 (74,616) 120,987 ------------- ------------- ------------- ------------- ------------ REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS, FOREIGN CURRENCY AND FUTURES CONTRACTS Net realized gain (loss) from security transactions -- 901,191 15,961,234 2,127,899 3,099,409 Net realized gain (loss) from foreign currency transactions -- -- -- -- (105,467) Net realized gain (loss) from futures contracts -- -- 33,662 -- -- Changes in net unrealized appreciation or (depreciation) of investments and foreign currency -- (4,860,768) (14,081,584) (1,258,205) (2,690,313) ------------- ------------- ------------- ------------- ------------ Net Gain (Loss) from Investments, Foreign Currency and Futures Contracts -- (3,959,577) 1,913,312 869,694 303,629 ------------- ------------- ------------- ------------- ------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $51,185 ($501,070) $2,508,047 $795,078 $424,616 ============= ============= ============= ============= ============ ACTIVA Mutual Funds Semiannual Report 29 The accompanying notes are an integral part of these financial statements.
ACTIVA Statement of Changes in Net Assets MONEY MARKET FUND INTERMEDIATE BOND FUND VALUE FUND PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED 6/30/04 12/31/03 6/30/04 12/31/03 6/30/04 12/31/03 Increase (Decrease) in: (UNAUDITED) (AUDITED) (UNAUDITED) (AUDITED) (UNAUDITED) (AUDITED) -------------------------- --------------------------- -------------------------- NET ASSETS FROM OPERATIONS Net investment income (loss) $51,185 $158,193 $3,458,507 $7,726,526 $594,735 $1,476,725 Net realized gain (loss) on investments -- -- 901,191 4,210,993 15,994,896 (3,674,758) Net increase (decrease) in unrealized appreciation -- -- (4,860,768) (6,211,546) (14,081,584) 33,045,072 ----------- ----------- ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations 51,185 158,193 (501,070) 5,725,973 2,508,047 30,847,039 DISTRIBUTIONS TO SHAREHOLDERS Net investment income: Class A (51,185) (158,193) (3,290,641) (7,160,355) -- (1,438,340) Class R -- -- -- -- -- (23,052) Net realized gain from investment transactions: Class A -- -- -- (5,392,480) -- -- Class R -- -- -- -- -- -- ----------- ----------- ------------ ------------ ------------ ------------ Total distributions to shareholders (51,185) (158,193) (3,290,641) (12,552,835) -- (1,461,392) CAPITAL SHARE TRANSACTIONS Net proceeds from sale of shares: Class A 2,425,011 3,590,366 30,818 168,664 489,612 445,288 Class R -- -- -- -- 5,578,776 637,451 Net asset value of shares issued to shareholders in reinvestment of investment income and realized gain from security transactions: Class A 50,968 172,625 3,290,093 12,550,220 -- 1,413,113 Class R -- -- -- -- -- 22,971 Payment for shares redeemed: Class A (1,947,051) (9,421,279) (60,214) (91,774) (33,251,208) (5,822,991) Class R -- -- -- -- (214,572) (388,785) ----------- ----------- ------------ ------------ ------------ ------------ Net increase (decrease) in net assets derived from capital share transactions 528,928 (5,658,288) 3,260,697 12,627,110 (27,397,392) (3,692,953) ----------- ----------- ----------- ----------- ----------- ----------- Net Increase (Decrease) in Net Assets 528,928 (5,658,288) (531,014) 5,800,248 (24,889,345) 25,692,694 Net Assets, beginning of year or period 30,510,958 36,169,246 169,963,044 164,162,796 137,350,464 111,657,770 ----------- ----------- ------------ ------------ ------------ ------------ Net Assets, end of year or period $31,039,886 $30,510,958 $169,432,030 $169,963,044 $112,461,119 $137,350,464 =========== =========== ============ ============ ============ ============ NET ASSETS CONSIST OF: Capital $31,055,397 $30,526,469 $168,946,350 $165,685,652 $117,377,701 $144,775,094 Undistributed net investment income (loss) -- -- 159,814 -- 522,357 -- Return of capital -- -- -- (8,051) -- (72,378) Undistributed net realized gain (loss) from investments (15,511) (15,511) 677,089 (224,103) (14,938,018) (30,932,914) Unrealized appreciation (depreciation) of investments and foreign currency -- -- (351,223) 4,509,546 9,499,079 23,580,662 ----------- ----------- ------------ ------------ ------------ ------------ $31,039,886 $30,510,958 $169,432,030 $169,963,044 $112,461,119 $137,350,464 =========== =========== ============ ============ ============ ============ TRANSACTIONS IN FUND SHARES Shares sold: Class A 2,425,011 3,590,366 2,970 15,817 64,474 74,730 Class R -- -- -- -- 770,392 105,917 Reinvested distributions: Class A 50,968 172,625 321,858 1,197,717 -- 204,207 Class R -- -- -- -- -- 3,305 Shares redeemed: Class A (1,947,051) (9,421,279) (5,900) (8,638) (4,698,176) (963,071) Class R -- -- -- -- (29,919) (65,384) ----------- ----------- ------------ ------------ ------------ ------------ Net increase (decrease) in fund shares 528,928 (5,658,288) 318,928 1,204,896 (3,893,229) (640,296) Shares outstanding, beginning of year or period 30,526,469 36,184,757 16,527,476 15,322,580 19,452,573 20,092,869 ----------- ----------- ------------ ------------ ------------ ------------ Shares outstanding, end of year or period 31,055,397 30,526,469 16,846,404 16,527,476 15,559,344 19,452,573 =========== =========== ============ ============ ============ ============
30 ACTIVA Mutual Funds Semiannual Report The accompanying notes are an integral part of these financial statements. ACTIVA Statement of Changes in Net Assets continued
GROWTH FUND INTERNATIONAL FUND PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED 6/30/04 12/31/03 6/30/04 12/31/03 Increase (Decrease) in: (UNAUDITED) (AUDITED) (UNAUDITED) (AUDITED) -------------------------- -------------------------- NET ASSETS FROM OPERATIONS Net investment income (loss) ($74,616) ($119,798) $120,987 $117,078 Net realized gain (loss) on investments 2,127,899 (424,586) 2,993,942 1,453,644 Net increase (decrease) in unrealized appreciation (1,258,205) 7,181,253 (2,690,313) 5,561,455 ----------- ----------- ----------- ----------- Net increase (decrease) in net assets resulting from operations 795,078 6,636,869 424,616 7,132,177 DISTRIBUTIONS TO SHAREHOLDERS Net investment income: Class A -- -- -- (90,086) Class R -- -- -- -- Net realized gain from investment transactions: Class A -- -- -- -- Class R -- -- -- -- ----------- ----------- ----------- ----------- Total distributions to shareholders -- -- -- (90,086) CAPITAL SHARE TRANSACTIONS Net proceeds from sale of shares: Class A 136,833 172,482 126,082 952,630 Class R -- -- -- -- Net asset value of shares issued to shareholders in reinvestment of investment income and realized gain from security transactions: Class A -- -- -- 90,083 Class R -- -- -- -- Payment for shares redeemed: Class A (150,418) (109,318) (263,244) (893,102) Class R -- -- -- -- ----------- ----------- ----------- ----------- Net increase (decrease) in net assets derived from capital share transactions (13,585) 63,164 (137,162) 149,611 ----------- ----------- ----------- ----------- Net Increase (Decrease) in Net Assets 781,493 6,700,033 287,454 7,191,702 Net Assets, beginning of year or period 30,019,431 23,319,398 29,428,761 22,237,059 ----------- ----------- ----------- ----------- Net Assets, end of year or period $30,800,924 $30,019,431 $29,716,215 $29,428,761 =========== =========== =========== =========== NET ASSETS CONSIST OF: Capital $37,639,904 $37,653,489 $35,339,310 $35,476,472 Undistributed net investment income (loss) (623,004) (548,387) (752,177) (767,698) Return of capital -- -- -- -- Undistributed net realized gain (loss) from investments (10,281,069) (12,408,969) (7,342,360) (10,441,768) Unrealized appreciation (depreciation) of investments and foreign currency 4,065,093 5,323,298 2,471,442 5,161,755 ----------- ----------- ----------- ----------- $30,800,924 $30,019,431 $29,716,215 $29,428,761 =========== =========== =========== =========== TRANSACTIONS IN FUND SHARES Shares sold: Class A 21,374 29,961 17,613 157,871 Class R -- -- -- -- Reinvested distributions: Class A -- -- -- 13,056 Class R -- -- -- -- Shares redeemed: Class A (24,251) (19,669) (36,333) (147,844) Class R -- -- -- -- ----------- ----------- ----------- ----------- Net increase (decrease) in fund shares (2,877) 10,292 (18,720) 23,083 Shares outstanding, beginning of year or period 4,729,870 4,719,578 4,142,056 4,118,973 ----------- ----------- ----------- ----------- Shares outstanding, end of year or period 4,726,993 4,729,870 4,123,336 4,142,056 =========== =========== =========== =========== ACTIVA Mutual Funds Semiannual Report 31 The accompanying notes are an integral part of these financial statements.
ACTIVA Notes to Financial Statements 1. ORGANIZATION Activa Mutual Fund Trust (Trust) was organized as a Delaware business trust on February 2, 1998. The trust consists of five funds, each open-end management investment companies registered under the Investment Company Act of 1940. The funds are: the Activa Money Market Fund (Money Market Fund), the Activa Intermediate Bond Fund (Intermediate Bond Fund), the Activa Value Fund (Value Fund), the Activa Growth Fund (Growth Fund) and the Activa International Fund (International Fund) collectively referred to as the Funds. The Value Fund is the successor to Amway Mutual Fund. 2. SIGNIFICANT ACCOUNTING POLICIES Investment Objectives The Money Market Fund's investment objective is to seek a high level of current income as is consistent with preservation of capital and liquidity. The Money Market Fund invests in a broad spectrum of high quality U.S. dollar-denominated money market securities, with the average weighted maturity of the securities held not to exceed 90 days. The Intermediate Bond Fund's investment objective is to seek a high level of current income as is consistent with moderate risk of capital and maintenance of liquidity. The Intermediate Bond Fund invests primarily in investment-grade debt securities, with average maturity of three to ten years. The Value Fund's investment objective is to seek long-term capital appreciation, and invests primarily in common stocks of U.S. companies which are considered by the investment manager to be undervalued. The Growth Fund seeks long-term growth of capital, and invests primarily in common stocks believed by the investment manager to have long-term growth potential. The International Fund seeks maximum long-term capital appreciation. The International Fund invests primarily in common stocks of non-U.S. companies which are believed by the investment manager to have potential for above-average growth of earnings. Classes of Shares The Value Fund offers two classes of shares (Class A and Class R). The Class R shares are offered to tax-exempt retirement and benefit plans of Alticor, Inc. and its affiliates, and are not subject to any sales charges or 12b-1 distribution fees. Each share of Class A and Class R represents an equal proportionate interest in the Value Fund and, generally, will have identical voting, dividend, liquidation, and other rights and the same terms and conditions. Each class will have exclusive voting rights with respect to matters affecting only that class. Each class bears different distribution, shareholder servicing and transfer agent expenses. Income, non-class specific expenses, and realized and unrealized gains or losses on investments are allocated to each class of shares based upon its relative net assets. Security Valuation Net asset values per share are calculated at the close of business on the New York Stock Exchange, usually 4:00 PM Eastern time on each business day on which that exchange is open. Investments in securities listed or admitted to trading on a national securities exchange are valued at their last reported sale price before the time of valuation. If a security is traded only in the over-the-counter market, or if no sales have been reported for a listed security on that day, it is valued at the mean between the current closing bid and ask prices. Short-term securities maturing within 60 days are valued at amortized cost, which approximates fair value. Portfolio debt securities with remaining maturities greater than 60 days are valued by pricing agents approved by the Board of Trustees. Foreign securities are converted to U.S. dollars using exchange rates at the close of the New York Stock Exchange. Securities for which market quotations are not readily available, including any restricted securities (none at June 30, 2004), and other assets of the Funds are valued at fair market value as determined by the Fund's Board of Trustees. Derivative Transactions The Funds (except the Money Market Fund) may trade in derivative contracts to hedge portfolio holdings and for investment purposes. Hedging activities are intended to reduce various risks associated with fluctuations in foreign currency exchange rates. When entering into a forward currency contract, the fund agrees 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. The fund's net equity in the contracts is included as unrealized gains or losses in the statement of assets and liabilities. This unrealized gain or loss is the difference between the forward foreign exchange rates at the dates of entry into the contracts and the forward rates at the 32 ACTIVA Mutual Funds Semiannual Report ACTIVA Notes to Financial Statements continued reporting date. The current year change in unrealized gains and losses and realized gains and losses are included in the statement of operations. These instruments involve market risk, credit risk, or both kinds of risk, 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 security values and interest rates. There were no foreign currency contracts outstanding at June 30, 2004. Security Transactions Security transactions are accounted for on the trade date. Dividend income is recorded on the ex-dividend date. Interest income is recorded on the accrual basis. Original issue discounts are accreted and premium is amortized on debt securities to interest income over the life of a security with a corresponding adjustment in the cost basis. Realized gains and losses from security transactions and unrealized appreciation and depreciation of investments are reported on a specific identification basis. Dividends and distributions to shareholders are recorded by the Funds on the ex-dividend date. Foreign Currency Translation Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. Net realized gains and losses from foreign currency and investment transactions disclosed in the Statement of Operations consist of net gains and losses on disposition of foreign currency, currency gains and losses realized between trade and settlement dates on security transactions, and the difference between the amount of net investment income accrued and the amount actually received in U.S. dollars. Net unrealized foreign exchange gains and losses arise from changes in fair values of assets and liabilities other than investments in securities at period end, resulting from changes in exchange rates. The effects of foreign currency exchange rates on foreign securities held are included in net realized and unrealized gain or loss on investments. Futures Contracts The Funds may use futures contracts to manage its exposure to the stock and bond markets. Buying futures tends to increase the fund's exposure to the underlying instrument, while selling futures tends to decrease the fund's exposure to the underlying instrument or hedge other fund investments. Futures contracts involve, to varying degrees, risk of loss in excess of the futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown at the end of the schedule of investments. This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract's terms. Gains (losses) are realized upon the expiration or closing of the futures contracts. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded. Security Lending The Funds lend portfolio securities from time to time in order to earn additional income. The Funds receive collateral in the form of U.S. Treasury obligations, letters of credit, and/or cash against the loaned securities, and maintain collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Funds and any additional required collateral is delivered to the Funds on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Funds could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. At June 30, 2004, the value of the securities loaned and the collateral received amounted to $42,053,260 and $42,890,507 respectively. Income Taxes It is the Funds' policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to make distributions of income and capital gains sufficient to relieve it from substantially all federal ACTIVA Mutual Funds Semiannual Report 33 ACTIVA Notes to Financial Statements continued income taxes. Foreign taxes are provided for based on each fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. Dividend Distributions The Money Market Fund and Intermediate Bond Fund declare dividends daily and monthly respectively, and distribute dividends monthly, and capital gains (if any) are distributed annually. The Value Fund, Growth Fund and International Fund declare and distribute dividends and capital gains (if any) annually. Use of Estimates 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 at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. 3. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES The Funds have entered into investment advisory agreements with Activa Asset Management LLC (the Adviser), effective June 11, 1999. The Funds employ the investment adviser to provide investment advice and manage on a regular basis the investment portfolios for the Funds. Except when otherwise specifically directed by the Funds, the Investment Adviser will make investment decisions on behalf of the Funds and place all orders for the purchase and sale of portfolio securities for the Funds' accounts. The Adviser shall be permitted to enter into an agreement with another advisory organization (sub-adviser), whereby the sub-adviser will provide all or part of the investment advice and services required to manage the Funds' investment portfolios as provided for in these agreements. In return for these services, the Funds pay the adviser an annual rate as follows: FUND % OF AVERAGE NET ASSETS Money Market .35% until assets total $500 million; when assets reach $500 million, .35% on first $100 million; .325% on next $100 million; .30% on assets in excess of $200 million Intermediate Bond .40% on first $50 million; .32% on next $100 million; .24% on assets in excess of $150 million Value .60% on first $100 million; .50% on assets in excess of $100 million; the minimum annual fee shall be $350,000 plus .20% Growth .70% on first $25 million; .65% on next $25 million; .60% on assets in excess of $50 million International .85% on first $50 million; .75% on assets in excess of $50 million As permitted by the above agreements, the Adviser has retained the following sub-advisers: FUND SUB-ADVISER Money Market J.P. Morgan Investment Management, Inc. Intermediate Bond McDonnell Investment Management, LLC Value Wellington Management Company, LLP Growth State Street Research & Management Company International Nicholas-Applegate Capital Management Pursuant to Rule 12b-1 under the Investment Company Act of 1940, the Money Market Fund, Value Fund, Intermediate Bond Fund, Growth Fund and International Fund have entered into a Plan and Agreement of Distribution with Activa Asset Management LLC. Under the terms of the agreement, Activa Asset Management LLC provides services in connection with distributing the Funds' shares (except Value Fund Class R). For these services rendered, the Funds compensate Activa Asset Management LLC monthly at a maximum annual rate of .25 of 1% of the average net assets of the Fund. For the six month period ended June 30, 2004 the Board of Trustees approved an annual rate of .15 of 1%, for all funds except the Money Market Fund. Activa Asset Management LLC is not presently providing services under the distribution plan on behalf of the Money Market Fund and is receiving no such compensation. The Funds have a transfer agency and dividend disbursing agency agreement with Activa Asset Management LLC. Under these agreements, Activa Asset Management LLC is the agent 34 ACTIVA Mutual Funds Semiannual Report ACTIVA Notes to Financial Statements continued for transfer of the Funds' shares and disbursement of the Funds' distributions. For these services, The Money Market, Intermediate Bond, Value (Class A), Growth and International Funds pay a monthly fee based upon $1.167 per account in existence during the month. The transfer agent is compensated by the Value Fund (Class R) at a monthly rate of 1/12 of .20% (.20% annually) of average net assets. On June 11, 1999 the Trust entered into an administrative agreement with Activa Asset Management LLC. Under the terms of the agreement Activa Asset Management LLC will act as administrator for the Funds. As administrator of the Funds, Activa Asset Management LLC will furnish office space and office facilities, equipment and personnel, pay the fees of all Trustees of the Trust, as well as providing services relating to compliance, tax and financial service requirements. For these services, the administrator will be compensated quarterly by each fund at an annual rate of .15% of average daily net assets. The original administrative agreement provided that the administrator would pay the fees of all the Trustees of the Trust. On June 3, 2004 the agreement was amended to provide that the Fund would pay the fees and expenses of its Disinterested Trustees, and that the administrator would pay the salary and related expenses of the Fund's Chief Compliance Officer. On July 9, 1999 the Trust entered into a Fund Accounting Agreement with Bisys Fund Services Ohio, Inc. (Fund Accountant). As stated in the agreement, the Fund Accountant is responsible for the maintenance of books and records, performance of daily accounting services, providing the Funds' management with monthly financial statements and certain information necessary for meeting compliance requirements. The Fund Accountant is compensated by each fund based upon an annual fee of $35,000 for assets up to $100 million; $50,000 for assets between $100 million and $1 billion; and $75,000 for assets in excess of $1 billion. In addition, each fund will pay the Fund Accountant an annual fee of $2,500 for portfolio accounting reports provided to investment adviser personnel through internet access. Two individuals and their families, which own (directly or indirectly) the majority of the shares outstanding of the Trust, also indirectly own 100% of the Adviser. 4. INVESTMENT TRANSACTIONS At June 30, 2004, the cost of investments owned by the Value Fund was $102,301,807 for federal income tax purposes. Aggregate gross unrealized appreciation on securities in which there was an excess of market value over tax cost was $10,799,556. Aggregate gross unrealized depreciation on securities in which there was an excess of tax cost over market value was $1,454,586. Net unrealized appreciation for tax purposes was $9,344,970, at June 30, 2004. The unrealized appreciation (depreciation) at June 30, 2004 based upon cost of both long-term and short-term securities for the funds that have elected an October 31st year-end for federal income tax purposes were as follows: Net Cost for Gross Gross unrealized federal unrealized unrealized appreciation income tax Fund appreciation depreciation (depreciation) purposes ------------ ------------ -------------- ---------- Money Market N/A N/A N/A 31,057,343 Intermediate Bond 2,204,537 2,555,759 (351,222) 165,998,542 Growth 4,193,847 641,018 3,552,829 27,297,705 International 2,805,561 383,097 2,422,464 26,652,085 5. RELATED PARTY TRANSACTION A certain class of Independent Business Owners of Alticor, Inc. received part of its Emerald profit-sharing bonus in common stock shares of the Value Fund or Money Market Fund. On January 8, 2004, Alticor, Inc. purchased 8,811 Value Fund shares valued at $62,908 (based upon the net asset value of $7.14 per share) and 1,711,697 Money Market Fund shares valued at $1,711,697 (based upon the net asset value of $1.00 per share) and transferred the shares to these Independent Business Owners. On February 4, 2004 Jay Van Andel, a principal shareholder of the Activa Mutual Fund, who owns all the outstanding securities of JVA Properties Corporation, the General Partner for JVA Enterprises Limited Partnership redeemed $30,000,000 from the Activa Value Fund, via a redemption in kind, as part of a reallocation of investment assets. ACTIVA Mutual Funds Semiannual Report 35 ACTIVA Financial Highlights
MONEY MARKET FUND INTERMEDIATE BOND FUND ---------------------------- ------------------------------- PERIOD YEAR PERIOD YEAR ENDED ENDED ENDED ENDED 6/30/04 12/31/03 6/30/04 12/31/03 Per share outstanding for each period (UNAUDITED) (AUDITED) (UNAUDITED) (AUDITED) ---------- ---------- ---------- ---------- Net Asset Value, Beginning of Period $1.00 $1.00 $10.28 $10.71 Income from investment operations: Net investment income (loss) -- 0.01 0.21 0.46 Net realized and unrealized gains (losses) on securities -- -- (0.23) (0.09) ---------- ---------- ---------- ---------- Total from investment operations -- 0.01 (0.02) 0.37 Less Distributions: Dividends from net investment income -- 0.01 0.20 0.46 Dividends in excess of net investment income -- -- -- -- Distributions from capital gains -- -- -- 0.34 ---------- ---------- ---------- ---------- Total Distributions -- 0.01 0.20 0.80 ---------- ---------- ---------- ---------- Net Asset Value, End of Period $1.00 $1.00 $10.06 $10.28 Total Return * 0.16% 0.47% -0.23% 3.49% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period $31,039,886 $30,510,958 $169,432,030 $169,963,044 Ratio of expenses to average net assets 0.4% 0.8% 0.4% 0.7% Ratio of net income (loss) to average net assets 0.2% 0.5% 2.0% 4.6% Portfolio turnover rate N/A N/A 36.7% 104.0% * The period ended June 30, 2004 is not annualized but an aggregate total return for the period. 36 ACTIVA Mutual Funds Semiannual Report VALUE FUND - CLASS A VALUE FUND - CLASS R ---------------------------- --------------------------- PERIOD YEAR PERIOD YEAR ENDED ENDED ENDED ENDED 6/30/04 12/31/03 6/30/04 12/31/03 Per share outstanding for each period (UNAUDITED) (AUDITED) (UNAUDITED) (AUDITED) ---------- ---------- ---------- ---------- Net Asset Value, Beginning of Period $7.06 $5.56 $7.09 $5.57 Income from investment operations: Net investment income (loss) 0.04 0.08 0.04 0.07 Net realized and unrealized gains (losses) on securities 0.13 1.50 0.13 1.52 ---------- ---------- ---------- ------- Total from investment operations 0.17 1.58 0.17 1.59 Less Distributions: Dividends from net investment income -- 0.08 -- 0.07 Dividends in excess of net investment income -- -- -- -- Distributions from capital gains -- -- -- -- ---------- ---------- ---------- ------- Total Distributions -- 0.08 -- 0.07 ---------- ---------- ---------- ------- Net Asset Value, End of Period $7.23 $7.06 $7.26 $7.09 Total Return * 2.41% 28.37% 2.40% 28.65% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period $104,832,689 $135,146,120 $7,628,430 $2,204,343 Ratio of expenses to average net assets 0.6% 1.1% 0.5% 1.0% Ratio of net income (loss) to average net assets 0.5% 1.2% 0.6% 1.3% Portfolio turnover rate 71.4% 65.7% 71.4% 65.7% GROWTH FUND INTERNATIONAL FUND --------------------------- ---------------------------- PERIOD YEAR PERIOD YEAR ENDED ENDED ENDED ENDED 6/30/04 12/31/03 6/30/04 12/31/03 Per share outstanding for each period (UNAUDITED) (AUDITED) (UNAUDITED) (AUDITED) ---------- ---------- ---------- ---------- Net Asset Value, Beginning of Period $6.35 $4.94 $7.10 $5.40 Income from investment operations: Net investment income (loss) (0.02) (0.03) 0.03 0.02 Net realized and unrealized gains (losses) on securities 0.19 1.44 0.08 1.70 ------- ---------- ---------- ---------- Total from investment operations 0.17 1.41 0.11 1.72 Less Distributions: Dividends from net investment income -- -- -- 0.02 Dividends in excess of net investment income -- -- -- -- Distributions from capital gains -- -- -- -- ------- ---------- ---------- ---------- Total Distributions -- -- -- 0.02 ------- ---------- ---------- ---------- Net Asset Value, End of Period $6.52 $6.35 $7.21 $7.10 Total Return * 2.68% 28.54% 1.55% 31.90% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period $30,800,924 $30,019,431 $29,716,215 $29,428,761 Ratio of expenses to average net assets 0.6% 1.4% 0.8% 1.7% Ratio of net income (loss) to average net assets -0.2% -0.5% 0.4% 0.5% Portfolio turnover rate 50.7% 101.0% 87.7% 188.0%
ACTIVA Mutual Funds Semiannual Report 37 Activa Mutual Funds Activa Mutual Funds 2905 Lucerne SE, Suite 200 Grand Rapids, Michigan 49546 (616) 787-6288 (800) 346-2670 www.activafunds.com Printed in U.S.A. ITEM 2. CODE OF ETHICS. Not applicable at this time. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable at this time. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable at this time. ITEMS 5 - 6. (RESERVED) ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Municipal Funds - Not applicable to this registrant. Non-Municipal Funds - Not applicable to this registrant. ITEM 8. RESERVED. ITEM 9. CONTROLS AND PROCEDURES. (a) The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 240.13a-15(b) or 240.15d-15(b)). (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant's last fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 10. EXHIBITS. File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated. (a) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit: Not applicable. (b) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2 under the Act (17 CFR 270.30a-2) in the exact form set forth below: Ex-99.CERT Attached hereto. (c) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Section 906 of the Sarbanes- Oxley Act of 2002. Ex-99.906 CERT Attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) Activa Mutual Fund Trust ----------------------------------------------------------- By (Signature and Title)* /s/ Allan D. Engel ---------------------------------------------- Allan D. Engel President, Principal Executive Officer and Principal Financial Officer Date September 1, 2004 ------------------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* ---------------------------------------------- Date ------------------------------------------------------------------- By (Signature and Title)* /s/ ---------------------------------------------- Date ------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature. EX-99.CERT 2 file002.txt CERTIFICATIONS Certification Pursuant to Section 302 of the Sarbanes-Oxley Act I, Allan D. Engel, certify that: 1. I have reviewed this report on Form N-CSR of the Activa Mutual Fund Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; and 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report. 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: September 1, 2004 ----------------------- /s/ Allan D. Engel --------------------- President, Principal Executive Officer and Principal Financial Officer EX-99.906CERT 3 file003.txt CERTIFICATIONS Certification Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. I, Allan D. Engel, Chief Administrative Officer of the Activa Mutual Fund Trust (the "Fund"), certify that: 1. The Form N-CSR of the Fund for the period ended June 30, 2004 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Fund. A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Activa Mutual Fund Trust and will be retained by Activa Mutual Fund Trust and furnished to the Securities and Exchange Commission or its staff upon request. Date: September 1, 2004 ----------------------- /s/ Allan D. Engel --------------------- President, Principal Executive Officer and Principal Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----