N-CSRS 1 activa43884.txt ACTIVA MUTUAL FUNDS 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 Trust 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) 588-5380 ------------------- Date of fiscal year end: December 31 ------------------ Date of reporting period: June 30, 2008 ----------------- 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 29, 2008. Logo: Activa Semiannual Report June 30, 2008 ACTIVA INTERMEDIATE BOND FUND Sub-Adviser: McDonnell Investment Management, LLC ACTIVA VALUE FUND Sub-Adviser: Wellington Management Company, LLP ACTIVA GROWTH FUND Sub-Adviser: BlackRock Capital Management, Inc. ACTIVA INTERNATIONAL FUND Sub-Adviser: Tradewinds Global Investors, LLC A selection of stock and bond funds, managed by professional advisers, which are designed to help investors meet their financial goals. Logo: Activa Mutual Funds ACTIVA Mutual Funds Semiannual Report Contents Page SHAREHOLDER LETTER 1 ACTIVA INTERMEDIATE BOND FUND 2 ACTIVA VALUE FUND 3 ACTIVA GROWTH FUND 5 ACTIVA INTERNATIONAL FUND 6 ACTIVA PORTFOLIO HIGHLIGHTS 8 ACTIVA ADDITIONAL INFORMATION 10 ACTIVA OFFICERS AND TRUSTEES OF THE FUND 13 SCHEDULE OF INVESTMENTS Activa Intermediate Bond Fund 15 Activa Value Fund 20 Activa Growth Fund 24 Activa International Fund 28 Page STATEMENT OF ASSETS AND LIABILITIES 32 STATEMENT OF OPERATIONS 33 STATEMENT OF CHANGES IN NET ASSETS 34 NOTES TO FINANCIAL STATEMENTS 36 FINANCIAL HIGHLIGHTS 42 The views and opinions in this report were current as of June 30, 2008. They are not guarantees of performance or investment results and should not be taken as investment advice. Investment decisions reflect a variety of factors, and the managers reserve the right to change their views about individual stocks, sectors, and the markets at any time. As a result, the views expressed should not be relied upon as a forecast of the funds' future investment intents. Activa Mutual Funds 2905 Lucerne SE, Suite 200 Grand Rapids, Michigan 49546 (800) 346-2670 WWW.ACTIVAFUNDS.COM SEMIANNUAL REPORT DEAR SHAREHOLDER: During the first six months of 2008, the first quarter retrospectively seemed somewhat stable due to action taken by the Federal Reserve to stabilize credit markets. Volatility became the theme of the second quarter, with most major markets indices finishing the 6-month period with negative returns. The Dow Jones Industrial Average declined more than 13%. The U.S. broader markets also declined with The Standard & Poor's 500 Index and the NASDAQ Composite finishing the period -11.9% and -13.5% respectively. Unlike the previous periods the overseas markets also experienced increased volatility as measured by the MSCI EAFE Index, finishing the 6-month period -10.6%. Although many investors know that volatility and uncertainty may be present in the markets, the previous six months have been increasingly turbulent. During these times, we recognize that investors may be more inclined to focus on short-term performance. However, it is important to remember that history has shown that creation of wealth is a long-term venture. We believe that a long-term plan includes an investment strategy of allocating your investment holdings across the major asset classes, diversifying within each class, and regularly rebalancing your portfolio to maintain the desired allocation. Although this strategy cannot guarantee a profit or protect against a loss, it is an approach which may potentially allow you to capitalize on the many opportunities the financial markets can offer. During these unpredictable markets, our sub-advisers and their portfolio managers have proceeded with the skill and perspective that their experience has provided them. They have been proactive in managing your investments in these market environments, identifying and evaluating risks, and utilizing their investment expertise. We are pleased to note that over this short term period most of our Funds have outperformed their benchmarks on a relative basis. Although pleased with this outcome, we continue to monitor the sub-advisers' results and abilities to invest appropriately in these challenging markets. Following in this report you will find their management discussion and review of fund results. In addition, you will find graphic illustrations and tables highlighting the diversification and significant holdings of each of the Funds. Investing regularly along with an automatic investment plan can help to relieve the anxiousness and emotion from investing. 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 choose the dollar amount (minimum $50), time periods, and Activa Funds you want to invest in. Call an Activa Investor Services Representative (1-800-346-2670) to further discuss dollar cost averaging and how you can establish an automatic investment program. Activa Management Services, LLC is excited to announce the launch of our new web-site, activaservices.com. The site will offer many features including the option to view and use enhanced financial planning products along with Activa's Travel and Health services. The financial planning tools include retirement planning, education funding and the ability to create your own diversified asset allocation strategy. Please visit our new site to see Activa's full slate of services. 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 Intermediate Bond Fund -- McDonnell Investment Management, LLC MARKET PERSPECTIVE Amid ongoing concerns related to financial sector liquidity, the Federal Reserve (the Fed) reduced the Federal Funds rate by 225 basis points in the first half of 2008. The Fed acted in concert with other central banks including the European Central Bank to ensure global liquidity needs were met. The combination of these events resulted in a decline in short to intermediate US treasury yields. The yield on the two and five year treasury notes declined from 3.05% to 2.62% and from 3.44% to 3.33%, respectively. However, yield on the 30 year treasury bond increased from 4.45% to 4.52% as signs of increased inflation risk remained in the market. Although core inflation moderated over the course of the period, investors remained concerned about the potential long term inflation effects of the rate cuts, high energy and commodity prices and a weaker dollar. This also contributed to a steepening of the treasury yield curve as the yield difference between 2-year and 30-year treasuries increased by .50%. US economic growth remained moderate running at approximate 1% annualized rate. Market volatility is expected to remain elevated as the credit crisis and bursting of the housing bubble work their way through the broader economy and financial markets. PORTFOLIO HIGHLIGHTS For the six month period, lower quality, higher yielding securities underperformed as investors sought the safety and principal protection offered by US Treasury and higher quality securities. In addition, the weakening US dollar enhanced the value of high quality, non-US dollar denominated securities. As a result, the Fund reduced exposure to lower quality securities and increased its weighting in higher quality securities including non-US dollar denominated securities. In particular, the Fund took continued steps to reduce exposure to the finance, housing and mortgage sectors over the course of the period. In addition, the Fund maintained a modest, positive, relative duration posture as well as an overweight position in intermediate maturity securities (3 - 10 year maturities). PERFORMANCE SUMMARY The Fund generated a total return of 1.14% for the six month period ended June 30, 2008. By comparison the Lehman Brothers Aggregate Bond Fund returned 1.13% for the same period. Overall the Fund's relative return benefited from its exposure to high quality, non-U.S. sovereign securities, positive duration posture and an overweight in intermediate maturity securities. Detractors from the Fund's relative return included an overweight in the mortgage and asset-backed sectors. 2 ACTIVA Mutual Funds Semiannual Report ACTIVA Value Fund -- Wellington Management Company, LLP MARKET COMMENT Equity markets continued their downward spiral during the first six months of 2008. Early in the year, equity markets were buoyed by Fed actions and the perception of stabilizing credit markets. However, stocks began to quickly retreat in the latter half of the period, as rising commodity prices stoked inflation concerns and continued weakness in the US housing market reignited economic concerns and credit market fears. Mid cap stocks led large caps and small caps over the first half of the year when measured using the S&P MidCap 400, the S&P 500 and the Russell 2000 Indexes. Growth outperformed value as the Russell 1000 Growth Index returned -9.1% and the Russell 1000 Value Index returned -13.6%. Within the Russell 1000 Value index, all broad sectors except for Energy posted negative results. FUND REVIEW Despite the volatile market environment, the Activa Value Fund continues to post strong performance relative to the benchmark. During the six-month period ended June 30, 2008, the Activa Value Fund returned -10.59% net of expenses, outperforming the -13.57% return of the Russell 1000 Value index. Longer-term comparisons also remain favorable. The Sub-Adviser focuses 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. The Sub-Adviser uses an internally-developed, quantitative analytical approach to complement fundamental or "bottom-up" security analysis research. For the first half of the year, the Fund's bottom-up investment approach produced positive benchmark-relative results in six out of ten broad market sectors. Strong security selection within the Financials, Materials, and Information Technology sectors contributed most to positive results while Energy and Industrials marginally detracted. The Financial's sector outperformed on a relative basis, buoyed by our positioning in American International Group, Citigroup and Assurant. Our underweight position in both American International Group and Citigroup proved additive to the Fund's performance as both companies continue to be hurt by exposure to US subprime related assets. Our overweight positioning in global insurance product provider, Assurant, positively contributed, as shares rose on better than expected profits and news that the company would raise its quarterly dividend by 17%. The largest absolute and relative contributor to the Fund was biopharmaceutical company, Millennium, whose shares skyrocketed after it announced that it would be acquired by Japan-based Takeda Pharmaceuticals. Within the Materials sector, Mosaic, U.S. Steel and Freeport-McMoRan contributed to the Fund's performance. All three companies benefited from rising commodity prices. The Information Technology sector was also a strong spot for the Fund after Accenture reported higher-than-expected profits despite worries of a weaker US economy and financial sector. In the Energy sector, our underweight to Chevron combined with avoiding benchmark names Apache and EOG Resources slightly detracted from the Fund's overall performance, as did not holding an Industrials stock CSX. Our overweight position in Bank of America was one of the largest absolute and relative detractors in the Fund. Shares of the diversified financial company fell throughout the period amid rising credit losses, a deteriorating home equity portfolio and weaker consumer trends. OUTLOOK The objective of the Value Fund is to provide long-term total returns in excess of the Russell 1000 Value Index and is intended to be suitable as a US large-cap value investment. The Portfolio attempts to add value by combining Wellington Management's proprietary fundamental and quantitative research in a disciplined framework to build a portfolio of the most attractive large cap value stocks. The Portfolio focuses on stock selection as the key driver of returns and uses quantitative portfolio construction ACTIVA Mutual Funds Semiannual Report 3 ACTIVA Value Fund continued -- Wellington Management Company, LLP techniques to build a portfolio insulated from factors that may cause serious under performance versus the benchmark to avoid surprises from unintended, uncompensated "risks." These factors for the Value Fund include consistent value orientation, while minimizing exposure to foreign stocks, cash positions, overexposure to small cap or mid cap stocks and excessive industrial sector bets. These exposures are managed within a set range and monitored for their impact on overall portfolio risk to focus active risk on stock selection. 4 ACTIVA Mutual Funds Semiannual Report ACTIVA Growth Fund -- BlackRock Capital Management, Inc. PERFORMANCE SUMMARY Surging energy and food prices, fear of recession, and continued dislocations in the financial sector have produced a very challenging environment for equities thus far in 2008. A 45% increase in oil prices combined with a 75% jump in natural gas prices have created a positive backdrop for energy stocks, while creating major headwinds for the U.S. consumer and other segments of the global economy. The Russell 1000 Growth Index significantly outperformed the Russell 1000 Value Index, in large part due to the lower weighting in financials for the Russell 1000 Growth, but still registered a negative return. The Growth Fund also declined during the first half of 2008, down 4.87%, but effectively protected investor capital, significantly outperforming the 9.06% decline posted by its benchmark the Russell 1000 Growth Index. Stock selection accounted for the majority of the outperformance, with the strongest relative results being posted in the energy, health care, and information technology sectors. Sector positioning also added value, as the portfolio held underweights in the poor performing consumer discretionary and financials sectors. PORTFOLIO REVIEW The energy sector delivered many headlines during the quarter with crude oil rising sharply and flirting with $150/barrel. Higher energy prices have boosted both producers and services companies in 2008, as slowing global growth has not yet improved the current supply/demand dynamic. The Fund's investment in energy producers, coal miners in particular, delivered excellent returns in the second quarter. Massey Energy, a recent addition to the portfolio, skyrocketed after announcing an increase in production amid dramatically higher coal prices. Consol Energy is also benefiting from this tight coal market, while Petroleo Brasileiro S/A moved higher as a result of the company's recent offshore oil discoveries. In health care, strength in pharmaceuticals and biotechnology powered absolute and relative returns. Elan Pharmaceuticals delivered the greatest impact in health care. Shares of the company ran up in anticipation of, and in response to, the company's report of encouraging data for its Alzheimer's drug in development, bapineuzumab. Celgene Corp. and Gilead Sciences, Inc. both produced double-digit returns in biotechnology. Also in health care, our relative lack of exposure to the managed care companies paid off as these companies fell 30% on average due to challenging industry trends. Stock selection decisions also produced relative outperformance in the information technology sector. In software, videogame publisher Activision rose significantly after reporting excellent fourth quarter earnings and raising earnings guidance for 2009. Qualcomm, a top portfolio holding, boosted results in communications equipment with its 13% rise amid the hostile market environment. The materials, industrials and consumer staples sectors all featured positive stock selection, while the consumer discretionary sector was the lone sector to experience underperformance during the 6-month period. PORTFOLIO POSITIONING AND OUTLOOK The portfolio continues to be managed from the bottom-up. As such, all stock selection decisions made during the period resulted from stock-specific developments and were not made in reaction to, or in anticipation of, broad economic and market conditions. During the period our allocation to energy rose as a result of market appreciation and the addition of Massey Energy and Cameron International. As a result of the annual reconstitution of the Russell 1000 Growth Index, our underweight in information technology increased while our relative underweight in consumer discretionary narrowed. As of 6/30/08, the portfolio holds significant overweights in the health care, telecommunication services and consumer staples industries while maintaining underweights in technology and consumer discretionary. ACTIVA Mutual Funds Semiannual Report 5 ACTIVA International Fund -- Tradewinds Global Investors, LLC ACTIVA FIRST HALF 2008 COMMENTARY REVIEW In the first half of 2008, the market continued to experience the volatility which began in the second half of 2007. Most major global indices posted negative returns, with the benchmark MSCI EAFE Index falling nearly 11% in the period. In US dollar terms, Japan was one of the better performing markets, declining just over 5% during the period. The crisis in the financials sector took hold in the US and Europe, and write-down's and capital raisings eclipsed anything seen to date. Inflation fears continued to concern investors, with the oil price continuing to hit new highs and food and energy inflation finally showing the inevitable impact on core CPI numbers. Growth significantly outperformed value for the period, and resource companies, in both the Energy and Materials sectors, easily outperformed consumer and financial related companies. Most major markets, including the US, entered bear market territory. Once again, the Fund outperformed the benchmark MSCI EAFE; while the Fund ended the period with a return of roughly -3.30%, the benchmark lost ground for the third quarter in a row, declining to roughly -10.60% for the first six months of the year. From a sector perspective, relative outperformance, came from most sectors, particularly the underweight in Financials, and overweight in Information Technology, Consumer holdings, Telecom and Energy. Currency returns had a small negative impact on returns. In general, the euro and other European currencies strengthened against the US dollar, as did the Japanese yen. On the other hand, the South African Rand and the South Korean Won lost ground against the dollar. From a regional perspective, Canada was the greatest contributor to relative outperformance. Financials led many of the market headlines in the media throughout the first half of 2008, as high-profile bankruptcies, takeovers, and bailouts tormented investors. From a sector perspective, the Fund's significant underweight in Financials was the largest contributor to relative performance. As the markets attempted to digest the seemingly endless barrage of bad news and speculation of further troubles, investors in Financials realized they were suffering from years of gorging in the sector. While for the past few years we have maintained significant underexposure to the sector, as we viewed the environment in which many of the companies were operating to be unsustainable, we have recently begun to modestly and selectively add to the sector, since not unexpectedly, the turmoil has also led to the uncovering of investment opportunities. Both the Consumer Staples and the Consumer Discretionary sectors added significantly to performance relative to the benchmark. While the holdings therein had mostly negative returns for the period, these paled in comparison to how these sectors performed in the index, as concerns about a global slowdown and rising inflation led many investors to question the future earnings potential of these companies. Within these sectors, the standout performer in the group was Premiere AG, the German media company, which benefited from a large investment by News Corp., and speculation of additional investments or even a possible takeover. While most of our Technology holdings were down during the period, Technology was one of the largest contributors to relative outperformance, due in part to the overweight position in the portfolio. Gemalto was the best performing Technology holding, and the top contributor to relative outperformance in the portfolio. At a time when the market for mobile devices has been experiencing a slowdown, shares of the French company, the largest global manufacturer of smart cards used in mobile telephones, appreciated on improving profit margins brought about by a recent restructuring and capital investments. Ericsson and Alcatel-Lucent, the Swedish and Franco-American telecom equipment makers, respectively, continued to be laggards, principally over concerns of increased competition and over-capacity in the industry. Health Care and Utilities, while small weights in the portfolio relative to the benchmark, were the greatest detractors from performance. In the Health Care sector, Sanofi-Aventis was the worst performing stock, while in the Utilities sector, Korea Electric Power was the culprit. Telecom was overweight in the portfolio relative to the benchmark, and a significant contributor to performance. Within the Telecom Sector, Chunghwa Telecom of Taiwan was 6 ACTIVA Mutual Funds Semiannual Report ACTIVA International Fund -- Tradewinds Global Investors, LLC the best performing holding in the sector, after local regulators allowed the company to return additional capital to shareholders. We sold out of the position amid the rise in the stock from the positive news. The worst performing holding in the sector, and the largest detractor to performance in the portfolio, was Telecom Italia. The company's shares were punished after announcing lower earnings and cash flow for the year, and consequently decreasing its dividend payout. The Materials sector, in which the Fund has a significant overweight relative to the benchmark, was a small contributor to performance. Newmont Mining Corp., based in the US but with assets and operations throughout the Americas, Africa, Asia, and Australia, was the best performing stock in the sector. Two paper companies, Stora Enso Corp. and UPM Kymmene Corp., both from Finland, were some of the worst performing stocks within the sector, and some of the largest detractors from performance in the portfolio. Both companies issued profit warnings during the second quarter, citing escalating wood and energy costs, as well as negative impact from foreign exchange. Stora Enso, in particular, was hindered by unscheduled maintenance issues as well as strikes at some of its Finnish operations, leading it to be the second largest detractor from performance in the portfolio. The Energy sector was also a large contributor to outperformance, in large part due to the Fund's overweight position relative to the benchmark. Opti Canada was the best performing stock within the sector. The company's perceived risk was lowered upon completion of its largest project and ramp up in production. We continue to maintain a well-diversified portfolio of energy companies, both geographically, and within the context of the segments of the market in which they operate, from exploration and production in Canadian oil sands, to the major integrated companies. Anyone reading our commentaries over recent years would have become accustomed to our bearish stance on global equities. This stance did not pay off in some periods, but has paid off handsomely, at least on a relative basis year-to-date. While focusing on the absolute value of companies, rather than on a relative basis it can sometimes be hard to shield an entire portfolio from negative global sentiment. To that end, we have been overweight in the gold mining sector, owning companies which trade at a significant discount to the spot price of the metal, while at the same time believing that in times of turmoil the gold price tends to do well. While trimming at the margin we continue to maintain this exposure. We have also maintained our overweight exposure to Japan. We are not buying Japan for macro reasons but given the fact that we can find many companies in that market which fit our value criteria - that said, Japan has been a significant global laggard for many years, so we are not too surprised by its recent outperformance. While it is sometimes difficult to look at falling markets and see opportunity, that is just what we do. This means we have the opportunity to build stronger portfolios for potentially greater future returns. While some clients may look to take money away from equity markets for tactical reasons, we know that the only way to grow wealth over the long term is not to shy away from investing but to embrace the opportunity to buy quality franchises at discounts to their intrinsic worth. While the US and some other Anglo and European countries may be going through tremendous economic volatility driven by the excesses of recent years, money can still be made focusing on investing in companies rather than buying markets. ACTIVA Mutual Funds Semiannual Report 7 ACTIVA Portfolio Highlights (Unaudited) ACTIVA Intermediate Bond Fund Pie Chart: Quality Diversification as of 6/30/08 U.S. Government and U.S. Government Agency Obligations 54% BBB 9%* A 13% AA 6% AAA 18% * Category reflects ratings by one nationally recognized rating agency. Pie Chart: Average Years to Maturity** Schedule as of 6/30/08 Over 20 Years 4% Less than 1 Year 5% 1 - 4.99 Years 37% 5 - 9.99 Years 50% 10 - 19.99 Years 4% ** Average years to maturity is based on the average time remaining until principal payments are expected from the Fund's bonds, weighted by dollar amount. ACTIVA Value Fund Pie Chart: Industry Sector Holdings as of 6/30/08 Information Technology 6% Energy 21% Materials 6% Industrials 10% Consumer Discretionary 6% Consumer Staples 7% Health Care 9% Financials 23% Telecommunication Services 6% Utilities 6% Top Ten Holdings as of 6/30/08 as a Percent of Total Investments (The Fund's composition is subject to change) AT&T, INC. 5.6% EXXON MOBIL CORP. 5.5% CONOCOPHILLIPS 5.3% OCCIDENTAL PETROLEUM CORP. 3.4% GENERAL ELECTRIC CO. 3.1% ASSURANT, INC. 2.9% GOLDMAN SACHS 2.9% BANK OF AMERICA CORP. 2.7% ACCENTURE LTD. 2.5% ACE LIMITED 2.4% 8 ACTIVA Mutual Funds Semiannual Report ACTIVA Portfolio Highlights (Unaudited) continued ACTIVA Growth Fund Pie Chart: Industry Sector Holdings as of 6/30/08 Consumer Discretionary 6% Consumer Staples 14% Energy 12% Financials 3% Health Care 19% Industrials 12% Information Technology 23% Materials 5% Other 6% Top Ten Holdings as of 6/30/08 as a Percent of Total Investments (The Fund's composition is subject to change) SCHLUMBERGER LTD. 4.6% QUALCOMM, INC. 4.5% WAL-MART STORES, INC. 3.7% THE COCA COLA CO. 3.3% ADOBE SYS., INC. 2.8% APPLE COMPUTER 2.6% DANAHER CORP. 2.6% GOOGLE, INC. 2.6% PHILIP MORRIS 2.6% THERMO ELECTRON CORP. 2.3% ACTIVA International Fund Pie Chart: Country Breakdown as of 6/30/08 Japan 33% Canada 11% *United States 10% United Kingdom 8% South Africa 7% France 7% Republic of Korea 5% Germany 3% Italy 3% Other 13% * United States securities represent 6.1% cash equivalents and approximately 3.8% Newmont Mining Corp. which is headquartered in the United States but has operations throughout the world in various countries. Pie Chart: Industry Sector Holdings as of 6/30/08 Consumer Discretionary 15% Consumer Staples 8% Energy 14% Finance 3% Health 4% Materials and Processing 26% Producer Durables 7% Technology 6% Telecommunications 13% Other 4% Top Ten Holdings as of 6/30/08 as a Percent of Total Investments (The Fund's composition is subject to change) ANGLOGOLD ASHANTI-SPN ADR - SOUTH AFRICA 4.8% NIPPON TLGRPH. & TELE. ADR - JAPAN 4.1% BARRICK GOLD CORP. - CANADA 4.0% NEWMONT MINING CORP. - UNITED STATES 3.8% PREMIERE AG - GERMANY 3.4% DAI NIPPON PRINTING - JAPAN 3.2% BP PLC - UNITED KINGDOM 3.1% TELECOM ITALIA - ITALY 3.0% NIPPON OIL CORP. - JAPAN 2.9% FUJI PHOTO FILM - JAPAN 2.8% ACTIVA Mutual Funds Semiannual Report 9 ACTIVA Additional Information (Unaudited) EXPENSE EXAMPLE As a shareholder of the Fund, you incur two types of costs: (1) transaction costs (none for Activa Funds) and (2) ongoing costs, including management fees; distribution 12b-1 fees; service fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. This Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from January 1, 2008 to June 30, 2008. ACTUAL EXPENSES The first line of the table for each Fund below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the table for each Fund below provides information, as required by applicable regulations of the Securities and Exchange Commission, about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. Unlike some mutual funds, the Activa Funds do not charge transactional fees such as sales charges, redemption fees, or exchange fees. EXPENSES PAID DURING THE PERIOD
Beginning Ending Expenses Account Account Paid Annualized Value, Value, During Expense 1/1/2008 6/30/2008 Period* Ratio -------- --------- ------- ----- Activa Intermediate Bond Actual $1,000.00 $1,011.40 $5.20 1.04% Hypothetical $1,000.00 $1,019.83 $5.24 1.04% Activa Value Fund Class A Actual $1,000.00 $894.10 $6.45 1.37% Hypothetical $1,000.00 $1,018.19 $6.90 1.37% Activa Value Fund Class R Actual $1,000.00 $893.70 $5.79 1.23% Hypothetical $1,000.00 $1,018.88 $6.19 1.23% Activa Growth Fund Actual $1,000.00 $951.30 $6.99 1.44% Hypothetical $1,000.00 $1,017.84 $7.25 1.44% Activa International Fund Actual $1,000.00 $967.00 $7.73 1.58% Hypothetical $1,000.00 $1,017.14 $7.96 1.58%
* Expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). OTHER INFORMATION Proxy Voting Guidelines The Funds exercise the voting rights associated with the securities held by the Funds under the proxy voting policy of the Funds. A description of those policies and procedures of the Fund and a record of the Fund's proxy votes for the period ended June 30, 2008 are available without charge, upon request, by calling 800-346-2670. It is also available on the Securities and Exchange Commission's (SEC) website at http://www.sec.gov. Quarterly Filing of Portfolio Holdings The Funds will file their complete schedule of investments with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund's Form N-Q will be available on the SEC's website at http://www.sec.gov. The Fund's Form N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330. Information included in the Fund's Forms N-Q will also be available upon request, by calling 800-346-2670. 10 ACTIVA Mutual Funds Semiannual Report ACTIVA Additional Information (Unaudited) continued APPROVAL OF INVESTMENT ADVISORY AGREEMENTS At a meeting held on February 11, 2008, the Fund's Board of Trustees approved continuation of the Investment Advisory Contract with Activa Asset Management LLC until March 31, 2009. At the same meeting, the Trustees approved continuation of the Sub-Advisory Agreements for the same period. In considering the Investment Advisory Agreement the Board of Trustees reviewed the nature, extent and quality of the services provided to the Fund by the Investment Adviser. As part of its review, the Board considered the performance of the Investment Adviser in setting the overall investment strategies for the Funds, monitoring and evaluating the investment performance of the Funds' Sub-Advisers, and monitoring compliance with the investment objectives, policies and restrictions of the Funds. The Board also considered the qualifications of the portfolio managers assigned to each Fund. As part of its review, the Board considered financial information provided by these organizations, as well as information about their management structures, professional staffs and compliance with securities regulations. In addition, during the year the Board received a report from the Trust's Chief Compliance Officer regarding the Investment Adviser's compliance programs, code of ethics, and record of compliance with federal securities regulations. The Board concluded that the Investment Adviser had provided satisfactory services to the Fund, and that it could be expected to continue to provide satisfactory services in the future. As part of its review, the Board considered information provided by the Investment Adviser and Sub-Adviser regarding the Funds' performance, as well as information regarding the investment performance of other funds with similar investment objectives. The Board concluded that each Fund's investment performance was satisfactory. In considering the Investment Advisory Agreement the Board of Trustees also reviewed the compensation paid under these agreements. As part of its review, the Board considered information provided by the Investment Adviser and Sub-Adviser with respect to the amounts being paid for investment advisory services by other funds that have similar investment objectives. The Board also considered the fact that the Investment Advisory Agreement provides for reduced payments (as a percentage of Fund assets) as the size of the Fund increases, so that Fund investors will benefit from economies of scale. The Board noted that shareholders of the Bond and Growth Funds are currently benefiting from economies of scale. The Board concluded that the compensation paid under the Investment Advisory Agreement is reasonable in light of the services provided to the Funds. As part of its review of compensation, the Board considered other benefits that might accrue to the Investment Adviser and its affiliated organizations by virtue of its relationships with the Fund. The Board also considered information provided by the Investment Adviser as to the profitability of the Investment Advisory Agreement. Following its review, the Board of Trustees concluded that the terms and conditions of the Investment Advisory Agreement, including the compensation payable thereunder, were fair and reasonable, and that the agreement should be continued until March 31, 2009. In reaching this decision, the Board did not identify any single factor as all-important or controlling. Nor does the foregoing summary detail all the matters considered by the Board. Sub-Advisory Agreement Approvals - Intermediate Bond Fund, Value Fund, Growth Fund, and International Fund. In considering each Sub-Advisory Agreement the Board of Trustees reviewed the nature, extent and quality of the services provided to a Fund by its Sub-Adviser. As part of its review, the Board considered the performance of each Sub-Adviser in furnishing investment advice, managing the Fund's investment portfolio, and complying with the Fund's investment objectives, policies and restrictions. As part of its review, the Board considered financial information provided by each of the Sub-Advisers, as well as information about their management structures, professional staffs and, in particular, the qualifications of the portfolio managers assigned to each Fund. In addition, the Board received a report from the Funds' Chief Compliance Officer regarding the ACTIVA Mutual Funds Semiannual Report 11 ACTIVA Additional Information (Unaudited) continued Sub-Advisers' compliance programs, code of ethics, and record of compliance with federal securities regulations. The Board concluded that each Sub-Adviser had provided satisfactory services to the Fund, and that it could be expected to continue to provide satisfactory services in the future. As part of its review, the Board considered information provided by the Investment Adviser and each of the Sub-Advisers regarding the Funds' performance, as well as information regarding the investment performance of other funds with similar investment objectives. In addition, the Board was provided with a report prepared by the Consulting Group, an independent consulting organization, which analyzed the capabilities and performance of each of the Sub-Advisers. The Board concluded that each Fund's investment performance was satisfactory. In considering each Sub-Advisory Agreement the Board of Trustees also reviewed the compensation paid under the agreement. As part of its review, the Board considered information provided by the Investment Adviser and Sub-Adviser with respect to the amounts being paid for investment advisory services by other funds that have similar investment objectives. The Board also considered the fact that each Sub-Advisory Agreement provides for reduced payments (as a percentage of Fund assets) as the size of the Fund increases, so that Fund investors will benefit from economies of scale. The Board noted that shareholders of the Bond and Growth Funds are currently benefiting from economies of scale. The Board concluded that the compensation paid under each of the Sub-Advisory Agreements is reasonable in light of the services provided to the Funds. As part of its review of compensation, the Board considered other benefits that might accrue to each Sub-Adviser and its affiliated organizations by virtue of its relationship with the Fund including the Sub-Adviser's soft dollar practices and, if applicable, use of affiliated brokerage. The Board did not consider a profit analysis from each of the Sub-Advisers because the sub-advisory fees resulted from arms-length negotiations between the Investment Adviser and each of the Sub-Advisers and because the fees under the Sub-Advisory Agreements constitute a very small percentage of the Sub-Advisers' total income from providing investment management services. Following its review, the Board of Trustees concluded that the terms and conditions of each of the Sub-Advisory Agreements, including the compensation payable thereunder, were fair and reasonable, and that the agreements should be continued until March 31, 2009. In reaching this decision, the Board did not identify any single factor as all-important or controlling. Nor does the foregoing summary detail all of the matters considered by the Board. 12 ACTIVA Mutual Funds Semiannual Report ACTIVA Officers and Trustees of the Fund The business affairs of the Fund are managed under the direction of the Board of Trustees ("Board"). The following information as of June 30, 2008 pertains to the Officers and Trustees of the Fund or the Adviser or both, and includes their principal occupation during the past five years and, for the Trustees, their compensation as Trustees:
NUMBER OF PORTFOLIOS OTHER IN FUND DIRECTOR- TERM OF COMPLEX SHIPS NAME AND OFFICE/YEARS PRINCIPAL OCCUPATION OVERSEEN BY HELD BY ADDRESS AGE OFFICE HELD SERVED LAST FIVE YEARS TRUSTEE TRUSTEE INTERESTED TRUSTEE James J. Rosloniec* 63 Trustee of the Fund Perpetual / 27 President, Chief Operating Officer, 4 None 2905 Lucerne SE, JVA Enterprises I, LLC; President, Suite 200 Chief Executive Officer and Director, Grand Rapids, Michigan Activa Holdings Corp.; President, 49546 Chief Executive Officer, of Activa Management Services, LLC; and President and Treasurer, Activa Mutual Fund Trust (1999-2002). ADVISORY TRUSTEE Joseph E. Victor, Jr. 60 Advisory Trustee of Perpetual / 7 President and Chief Executive Officer, 4 None 2905 Lucerne SE, the Fund Marker Net, Inc. (Crown Independent Suite 200 Business Owner affiliated with Grand Rapids, Michigan Quixtar, Inc.) 49546 DISINTERESTED TRUSTEES Donald H. Johnson 77 Trustee of the Fund Perpetual / 15 Retired, Former Vice President- 4 None 2905 Lucerne SE, Treasurer, SPX Corporation. Suite 200 Grand Rapids, Michigan 49546 Walter T. Jones 66 Trustee of the Fund Perpetual / 16 Retired, Former Senior Vice 4 None 936 Sycamore Drive President-Chief Financial Officer, Holland, Michigan Prince Corporation 49424 Richard E. Wayman 73 Trustee of the Fund Perpetual / 10 Retired, Former Finance Director, 4 None 24578 Rutherford Amway Corporation. Ramona, California 92065 OFFICER Allan D. Engel 56 President, Secretary Perpetual / 27 Vice President, Real Estate N/A N/A 2905 Lucerne SE, and Treasurer of the Operations and Secretary-Activa Suite 200 Fund; President, and Holdings Corp.; Vice President of Grand Rapids, Michigan Secretary of the Activa Management Services, LLC; 49546 Investment Adviser. Trustee, Activa Mutual Fund Trust (1999-2004); and Vice President and Assistant Treasurer, Activa Mutual Fund Trust (1999-2002).
ACTIVA Mutual Funds Semiannual Report 13 ACTIVA Officers and Trustees of the Fund continued The following table contains information about the compensation that the Trustees received during the six month period ended June 30, 2008:
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 TRUSTEE James J. Rosloniec* $8,000 -0- -0- $8,000 Trustee ADVISORY TRUSTEE Joseph E. Victor, Jr. $8,000 -0- -0- $8,000 Advisory Trustee DISINTERESTED TRUSTEES Donald H. Johnson $8,000 -0- -0- $8,000 Trustee Walter T. Jones $8,000 -0- -0- $8,000 Trustee Richard E. Wayman $8,000 -0- -0- $8,000 Trustee
*Mr. Rosloniec is an interested person of the Funds inasmuch as he is an officer of Activa Holdings Corp. and Activa Management Services, LLC, which controls the Investment Adviser. He is also an officer of JVA Enterprises I, LLC , which may be deemed to control Activa Holdings Corp. Fees paid to all Trustees during the six month period ended June 30, 2008, amounted to $40,000. Under the Administrative Agreement, the Investment Adviser pays the fees of the Interested Trustees of the Funds and the Funds pay the fees of the Disinterested and Advisory Trustees of the Funds. In addition, the Investment Adviser pays the salaries and fees of all of the Funds' officers who devote all or part of their time to the affairs of the Investment Adviser. The Funds' Statement of Additional Information contains additional information about the Funds' Trustees. It is available, without charge, by writing or telephoning the Funds. 14 ACTIVA Mutual Funds Semiannual Report ACTIVA Schedule of Investments INTERMEDIATE BOND FUND - 6/30/08 (Unaudited)
% OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) --------------------------------------------------------------------------------------------------------------------------- MONEY MARKET FUNDS - TAXABLE CUSTODIAN CASH SWEEP 1.5% NORTHERN INSTITUTIONAL DIVERSIFIED ASSETS PORT. 997,826 $ 997,826 ----------- US TREASURY NOTES 3.4% U.S. TREASURY NOTES, 6.25%, 8/15/23 1,355,000 1,612,558 U.S. TREASURY NOTES, 4.25%, 8/15/14 600,000 627,048 ----------- 2,239,606 ----------- US TREASURY BONDS 4.1% US TREASURY INFLATION INDEX BOND (TIP), 3.875%, 4/15/29 366,000 618,521 U.S. TREASURY INFLATION INDEX BOND (TIP), 2.00%, 1/15/14 1,000,000 1,228,442 U.S. TREASURY NOTE, 4.625%, 2/15/17 800,000 842,501 ----------- 2,689,464 ----------- US TREASURY STRIPS - PRINCIPAL ONLY 1.5% STRIP PRINC., 11/15/13 135,000 111,865 STRIP PRINC., 8/15/25 1,900,000 846,241 ----------- 958,106 ----------- FEDERAL HOME LOAN BANK 1.5% FEDERAL HOME LOAN BANK, DN, 7/2/08 1,000,000 999,879 ----------- FEDERAL HOME LOAN MORTGAGE 15.5% FEDERAL GOVERNMENT LOAN MGMT. CORP., 5.50%, 12/1/32 234,807 232,826 FEDERAL GOVERNMENT LOAN MGMT. CORP., 5.00%, 12/01/35 625,562 601,627 FEDERAL GOVERNMENT LOAN MGMT. CORP., 5.50%, 8/1/37 931,921 919,107 FEDERAL GOVERNMENT LOAN MGMT. CORP., 5.50%, 2/01/36 453,321 447,938 FEDERAL GOVERNMENT LOAN MGMT. CORP., 4.50%, 12/01/35 425,057 394,780 FEDERAL GOVERNMENT LOAN MGMT. CORP., 5.50%, 9/01/19 334,600 338,995 FEDERAL GOVERNMENT LOAN MGMT. CORP., 5.375%, 1/09/14 720,000 726,044 FEDERAL GOVERNMENT LOAN MGMT. CORP., 8.00%, 3/1/30 93,875 101,717 FEDERAL GOVERNMENT LOAN MGMT. CORP., 4.50%, 4/01/20 791,459 770,040 FEDERAL GOVERNMENT LOAN MGMT. CORP., 5.00%, 7/01/34 733,092 706,188 FEDERAL GOVERNMENT LOAN MGMT. CORP., 5.50%, 5/01/35 1,220,082 1,205,594 FEDERAL GOVERNMENT LOAN MGMT. CORP., 5.00%, 9/01/35 988,918 951,081 FEDERAL GOVERNMENT LOAN MGMT. CORP., 5.50%, 5/15/28 1,021,000 1,045,231 FEDERAL GOVERNMENT LOAN MGMT. CORP., 5.00%, 4/15/18 767,000 768,978 FEDERAL GOVERNMENT LOAN MGMT. CORP., 4.50%, 4/15/26 852,000 858,188 ----------- 10,068,334 ----------- FEDERAL NATIONAL MORTGAGE ASSOCIATION 20.4% FANNIE MAE, 6.5%, 9/1/29 42,607 44,317 FANNIE MAE, 4.50%, 9/1/18 666,505 652,009 FANNIE MAE, 5.00%, 12/1/33 539,045 520,104 FANNIE MAE, 5.00%, 7/1/37 1,204,172 1,155,585 FANNIE MAE, 6.0%, 1/1/29 70,095 71,396 FANNIE MAE, 6.50%, 3/1/29 46,322 48,210 ACTIVA Mutual Funds Semiannual Report 15 The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments continued INTERMEDIATE BOND FUND - 6/30/08 (Unaudited) % OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) --------------------------------------------------------------------------------------------------------------------------- FEDERAL NATIONAL MORTGAGE ASSOCIATION (CONTINUED) FANNIE MAE, 6.50%, 3/1/29 41,462 $ 43,152 FANNIE MAE, 6.50%, 7/1/32 457,001 474,486 FANNIE MAE, 6.50%, 4/1/18 276,730 288,816 FANNIE MAE, 6.50%, 5/1/32 222,686 231,206 FANNIE MAE, 3.25%, 4/9/13 650,000 626,158 FANNIE MAE, 5.5%, 2/1/33 213,005 211,237 FANNIE MAE, 5.50%, 4/1/33 173,487 172,047 FANNIE MAE, 4.50%, 8/1/19 665,361 649,226 FANNIE MAE, 5.00%, 8/1/33 180,557 174,213 FANNIE MAE, 7.00%, 3/1/35 112,876 119,245 FANNIE MAE, 5.00%, 6/01/34 194,653 187,570 FANNIE MAE, 5.00%, 8/01/19 380,621 379,249 FANNIE MAE, 6.00%, 10/1/34 909,387 921,163 FANNIE MAE, 4.50%, 9/01/35 1,110,962 1,031,329 FANNIE MAE, 6.00%, 1/01/36 1,442,303 1,458,726 FANNIE MAE, 5.00%, 11/01/35 516,534 496,932 FANNIE MAE, 5.50%, 1/01/36 869,428 859,765 FANNIE MAE, 5.50%, 2/01/36 732,672 724,530 FANNIE MAE, 5.260%, 4/01/37 1,179,389 1,194,462 FANNIE MAE, 5.50%, 11/01/36 509,160 502,548 ----------- 13,237,681 ----------- FEDERAL FARM CREDIT BANK 0.8% FEDERAL FARM CREDIT BANK, 4.875%, 1/17/17 500,000 508,270 ----------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION 3.4% GOVERNMENT NATIONAL MORTGAGE ASSOC., 7.00%, 11/15/31 67,058 71,405 GOVERNMENT NATIONAL MORTGAGE ASSOC., 7.00%, 12/15/28 26,945 28,740 GOVERNMENT NATIONAL MORTGAGE ASSOC., 7.00%, 9/15/29 7,063 7,530 GOVERNMENT NATIONAL SINGLE FAMILY, 7.00%, 12/15/29 102,799 109,621 GOVERNMENT NATIONAL MORTGAGE ASSOC., 4.50%, 4/15/18 377,976 371,410 GOVERNMENT NATIONAL SINGLE FAMILY, 7.00%, 9/15/34 71,899 76,359 GOVERNMENT NATIONAL MORTGAGE ASSOC., 3.407%, 7/16/21 582,389 576,261 GOVERNMENT NATIONAL MORTGAGE ASSOC., 4.549%, 6/16/28 1,000,000 978,128 ----------- 2,219,454 ----------- FOREIGN BOND 7.7% GOVERNMENT OF CANADA, 4.00%, 6/1/16 100,000 100,338 CANADA GOV'T., 4.25%, 12/01/08 350,000 345,169 PROVINCE OF ONTARIO, 4.30%, 3/08/17 400,000 390,657 TELEFONICA EMISIONES SAU., 5.855%, 2/04/13 280,000 282,151 JAPAN-37(10 YEAR ISSUE) GOVT., 0.80%, 6/20/09 53,950,000 508,388 GOVERNMENT OF AUSTRALIA, 5.25%, 8/15/10 1,000,000 929,085 BUNDESREPUB. DEUTSCHLAND, 4.0%, 1/04/37 200,000 272,496 UK TREASURY NOTE, 4.00%, 9/07/16 200,000 368,886 BUONI POLIENNALI DEL TES, 3.75%, 8/01/16 370,000 533,443 JAPAN-281(10 YEAR ISSUE), 2.00%, 6/20/16 127,450,000 1,245,403 ----------- 4,976,016 ----------- 16 ACTIVA Mutual Funds Semiannual Report The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments continued INTERMEDIATE BOND FUND - 6/30/08 (Unaudited) % OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) --------------------------------------------------------------------------------------------------------------------------- MUNICIPAL BONDS NEW YORK 0.9% PORT AUTHORITY NY AND NJ MUN. BOND, 5.75%, 11/01/32 600,000 $ 601,440 ----------- CORPORATE BONDS - 23.4% AUTOMOTIVE 1.3% CREDIT SUISSE NEW YORK, 5.75%, 2/15/18 290,000 279,747 DAIMLERCHRYSLER, 5.75%, 9/08/11 295,000 301,042 DELHAIZE AMERICA, INC., 6.50%, 6/15/17 250,000 252,605 ----------- 833,394 ----------- BANKING 2.8% BB&T CAPITAL TRUST, 6.75%, 6/07/36 285,000 250,327 CITIGROUP, INC., 5.625%, 8/27/12 280,000 275,718 FIFTH THIRD BANCORP, 5.45%, 1/15/17 295,000 237,675 JP MORGAN CHASE, 5.375%, 10/01/12 280,000 281,106 JP MORGAN CHASE, 5.247%, 1/12/43 500,000 499,864 WELLS FARGO COMPANY, 5.25%, 10/23/12 280,000 281,838 ----------- 1,826,528 ----------- BROADCASTING 0.4% ROGERS CABLE, INC., 5.50%, 3/15/14 270,000 260,223 ----------- DRUGS 1.3% ABBOTT LABS, 5.60%, 11/30/17 280,000 282,941 DOVER CORP. 5.45%, 3/15/18 300,000 294,333 HOSPIRA, INC., 6.05%, 3/30/17 300,000 290,003 ----------- 867,277 ----------- ELECTRIC UTILITY 4.1% DPL, INC., 6.875%, 9/01/11 270,000 281,318 MIDAMERICA ENERGY HLDGS., 6.125%, 4/01/36 295,000 284,200 NEVADA POWER CO., 5.875%, 1/15/15 306,000 306,981 NUCOR CORP., 5.75% 12/01/17 285,000 285,907 PECO ENERGY TRANSITION TRUST, 6.52%, 12/31/10 1,152,000 1,207,549 TEXTRO, INC., 4.50%, 8/01/10 285,000 284,760 ----------- 2,650,715 ----------- ENERGY 2.1% FLORIDA POWER CORP., 6.35%, 9/15/37 170,000 173,216 NORTHERN STATES PWR., 8.00%, 8/28/12 250,000 279,699 SOUTHERN POWER CO., 6.25%, 7/15/12 280,000 292,003 SUNCORP ENERGY, INC., 6.10%, 6/01/18 300,000 301,464 XTO ENERGY, INC., 5.5%, 6/15/18 300,000 287,033 ----------- 1,333,415 ----------- ACTIVA Mutual Funds Semiannual Report 17 The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments continued INTERMEDIATE BOND FUND - 6/30/08 (Unaudited) % OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) --------------------------------------------------------------------------------------------------------------------------- FINANCIAL SERVICES 4.4% AMERICA MOVIL SA AMXLMM5, 5.625%, 11/15/17 320,000 $ 309,790 AMERICAN EXPRESS, 6.80%, 9/01/66 270,000 250,006 CITIGROUP/DEUTSCHE BANK COMM. MORTAGE, VRN, 7/15/44 605,000 605,398 CASE CORP., 7.250%, 1/15/16 290,000 284,200 GENERAL ELECTRIC CAPITAL CORP., 5.0875%, 1/14/38 300,000 272,780 GOLDMAN SACHS GROUP, INC., 5.625%, 1/15/17 360,000 334,111 INTERNATIONAL LEASE FIN., 5.625%, 9/20/13 305,000 266,950 MORGAN STANLEY CAPITAL, 4.517%, 1/14/42 1,311 1,310 PNC FUNDING CORP., 5.125%, 12/14/10 295,000 293,319 RESONA PFD GLOBAL SECS., 7.191%, 12/29/49 290,000 268,141 ----------- 2,886,005 ----------- HEALTH CARE 0.9% AETNA, INC., 5.75%, 6/15/11 290,000 300,155 UNUMPROVIDENT CORP., 7.625%, 3/01/11 270,000 280,537 ----------- 580,692 ----------- INSURANCE 0.8% ACE INA HOLDINGS, 5.70%, 2/15/17 290,000 278,862 METLIFE, INC., 6.40%, 12/15/36 285,000 249,590 ----------- 528,452 ----------- OIL & EXPLOR PROD & SER 0.4% PETROBAS INTERNATIONAL, 6.125%, 10/06/16 280,000 281,400 ----------- OIL & GAS EQUIPMENT/SERVICES 2.3% HESS CORP., 6.65%, 8/15/11 270,000 283,389 CONOCOPHILLIPS, 5.20%, 5/15/18 300,000 296,220 FPL GROUP CAPITAL, INC., 7.375%, 6/01/09 275,000 284,349 ORACLE CORP., 5.75%, 4/15/18 345,000 345,344 WESTERN OIL AND SANDS, INC., 8.375%, 5/01/12 285,000 310,311 ----------- 1,519,613 ----------- PIPELINES 0.4% KINDER MORGAN ENERGY PARTNERS, 5.85%, 9/15/12 280,000 282,613 ----------- PRINTING & PUBLISHING 0.8% NEWS AMERICA HOLDINGS, 8.15%, 10/17/36 152,000 170,218 XEROX CORP., 5.50%, 5/15/12 320,000 316,573 ----------- 486,791 ----------- TECHNOLOGY 0.4% SEAGATE TECHNOLOGY HDD, 6.80%, 10/01/16 305,000 279,837 ----------- TRANSPORTATION & SHIPPING 0.5% UNITED PARCEL SERVICES, 5.50%, 1/15/18 285,000 289,110 ----------- 18 ACTIVA Mutual Funds Semiannual Report The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments continued INTERMEDIATE BOND FUND - 6/30/08 (Unaudited) % OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) --------------------------------------------------------------------------------------------------------------------------- TELECOMMUNICATIONS 0.5% VERIZON NEW YORK, INC., 6.875%, 4/01/12 315,000 $ 328,782 ----------- TOTAL CORPORATE BONDS 15,234,847 ----------- ASSET BACKED SECURITIES - 3.8% ELECTRIC UTILITY 1.1% DETROIT EDISON SECURITIZATION FUNDING LLC, 6.19%, 3/1/13 169,000 174,718 PSE&G TRANSITION FUNDING LLC, 6.45%, 3/15/13 494,000 516,220 ----------- 690,938 ----------- FINANCIAL SERVICES 2.7% CARMAX AUTO OWNER TRUST, 4.79%, 2/15/13 550,000 544,418 CITIBANK CREDIT CARD INSURANCE TRUST, 5.30%, 3/15/18 625,000 613,701 HONDA AUTO RECEIVABLES OWNER TRUST, 5.11%, 4/15/12 595,000 604,395 ----------- 1,762,514 ----------- TOTAL ASSET BACKED SECURITIES 2,453,452 ----------- COLLATERALIZED MORTGAGE OBLIGATIONS - 12.1% FINANCIAL SERVICES 12.1% BEAR STEARNS COMMERCIAL MORTG. SEC., 4.735%, 9/11/42 500,000 495,576 BEAR STEARNS COMMERCIAL MORTG. SEC., 5.426%, 9/11/41 605,000 599,877 BEAR STEARNS COMMERCIAL MORTG. SEC., 5.201%, 12/11/38 945,000 883,273 BEAR STEARNS COMMERCIAL MORTG. SEC., 5.588%, 9/11/42 650,000 636,130 CATERPILLAR FIN SERV., 5.45%, 4/15/18 335,000 332,731 CITIGROUP/DEUTS. BANK COMM. MORTG. TR., 5.56%, 10/15/48 740,000 735,167 GREENWICH CAPITAL COMM. FUNDING CORP., 5.381%, 3/10/39 605,000 592,409 FREDDIE MAC, 5.00%, 10/15/31 1,500,000 1,488,139 FREDDIE MAC, 5.50%, 1/15/31 1,128,000 1,143,733 MERRILL LYNCH MORTGAGE TRUST, VRN, 11/12/37 500,000 483,438 SMALL BUSINESS ADMIN. PARTICIPATION, 6.07%, 7/01/26 460,552 477,796 ----------- 7,868,269 ----------- TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS 7,868,269 ----------- TOTAL FIXED INCOME - 100% (Cost $65,005,007) $65,052,644 ===========
ACTIVA Mutual Funds Semiannual Report 19 The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments VALUE FUND - 6/30/08 (Unaudited)
% OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) --------------------------------------------------------------------------------------------------------------------------- MONEY MARKET FUNDS - TAXABLE - 2.0% 2.0% CUSTODIAN CASH SWEEP NORTHERN INSTITUTIONAL DIVERSIFIED ASSETS PORT. 1,630,948 $ 1,630,948 ----------- TOTAL MONEY MARKET FUNDS - TAXABLE (Cost $1,630,948) 1,630,948 ----------- COMMON STOCKS - 98.0% AEROSPACE 1.9% HONEYWELL INTERNATIONAL, INC. 6,500 326,820 INGRAM MICRO, INC. CL A *18,300 324,825 LOCKHEED MARTIN CORP. 7,100 700,486 RAYTHEON CO. 4,400 247,632 ----------- 1,599,763 ----------- AGRICULTURE 0.4% BUNGE LIMITED 3,200 344,608 ----------- AUTOMOTIVE PARTS & EQUIPMENT 0.6% TRW AUTOMOTIVE HOLDINGS CORP. *28,800 531,936 ----------- BANKING 4.0% CITIGROUP, INC. 24,172 405,123 COMERICA, INC. 11,960 306,535 HUNTINGTON BANCSHARES, INC. 24,100 139,057 POPULAR, INC. *55,300 364,427 SOVEREIGN BANCORP, INC. *21,770 160,227 TORONTO DOMINION BANK - ADR 3,246 202,128 UMB FINANCIAL CORP. *13,500 692,145 U.S. BANCORP 37,300 1,040,297 ----------- 3,309,939 ----------- BUSINESS SERVICES 2.3% LEXMARK INTERNATIONAL, INC. *6,500 217,295 MANPOWER, INC. 22,900 1,333,696 WESTERN UNION CORP. *15,900 393,048 ----------- 1,944,039 ----------- CHEMICALS 1.3% MOSAIC CO/THE 7,700 1,114,190 ----------- CONSTRUCTION - FOREIGN 2.5% ACCENTURE LTD. 50,500 2,056,360 ----------- CONSUMER GOODS & SERVICES 0.4% HASBRO, INC. 8,600 307,192 ----------- 20 ACTIVA Mutual Funds Semiannual Report The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments continued VALUE FUND - 6/30/08 (Unaudited) % OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) --------------------------------------------------------------------------------------------------------------------------- CONTAINERS & PACKAGING 0.9% GREIF, INC. 3,700 $ 236,911 OWENS-ILLINOIS, INC. 11,800 491,942 ----------- 728,853 ----------- COSMETICS 0.3% KIMBERLY-CLARK CORP. *4,000 239,120 ----------- DIVERSIFIED 3.1% GENERAL ELECTRIC & CO. 95,800 2,556,902 ----------- ELECTRIC UTILITY 0.9% FIRSTENERGY CORP. 9,200 757,436 ----------- ENERGY 5.2% AMERICAN ELECTRIC POWER 10,600 426,438 DEVON ENERGY CORP. 5,000 600,800 DOMINION RESOURCES, INC./VA 7,200 341,928 DUKE ENERGY CORP. 56,100 975,018 NOBLE ENERGY, INC. *3,100 311,736 SIERRA PACIFIC RESOURCES 22,300 283,433 UGI CORPORATION 47,800 1,372,338 ----------- 4,311,691 ----------- ENTERTAINMENT 1.7% WALT DISNEY COMPANY 44,300 1,382,160 ----------- FINANCIAL SERVICES 10.6% BANK OF AMERICA CORP. 95,512 2,279,871 BANK OF NEW YORK MELLON CORP. 11,400 431,262 CAPITAL ONE FINANCIAL 16,800 638,568 CAPITALSOURCE, INC. 34,700 384,476 GOLDMAN SACH GROUP, INC. 13,800 2,413,620 LEHMAN BROTHERS HOLDING 30,700 608,167 STATE STREET CORP. *16,900 1,081,431 UNUM GROUP 31,100 635,995 WADDELL & REED FINANCIAL 10,000 350,100 ----------- 8,823,490 ----------- FOOD PRODUCTS 0.7% KROGER CO. 19,500 562,965 ----------- HEALTH CARE 3.0% MCKESSON HBOC, INC. 33,500 1,872,985 UNIVERSAL HEALTH SERVICES, INC. 9,200 581,624 ----------- 2,454,609 ----------- ACTIVA Mutual Funds Semiannual Report 21 The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments continued VALUE FUND - 6/30/08 (Unaudited) % OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) --------------------------------------------------------------------------------------------------------------------------- HOTELS & LODGING 0.6% HOST HOTELS & RESORTS 36,500 $ 498,225 ----------- INSURANCE 7.2% AMERICAN INTERNATIONAL GROUP 29,200 772,632 ASSURANT, INC. 35,900 2,367,964 ACE LIMITED 35,600 1,961,204 EVEREST RE GROUP LTD. 11,400 908,694 ----------- 6,010,494 ----------- MACHINERY & EQUIPMENT 1.2% AGCO CORPORATION *18,500 969,585 ----------- MANUFACTURING - MISCELLANEOUS 1.2% PARKER HANNIFIN CORP. 13,900 991,348 ----------- MEDICAL SERVICES 0.9% AMGEN, INC. *15,400 726,264 ----------- METALS & MINING 2.2% ALCOA, INC. *14,700 523,614 FREEPORT-MCMORAN COPPER 9,700 1,136,743 SOUTHERN COPPER CORP. 1,800 191,934 ----------- 1,852,291 ----------- OFFICE/BUSINESS EQUIPMENT & SUPPLIES 1.8% HEWLETT-PACKARD 23,500 1,038,935 INTERNATIONAL BUSINESS MACHINES CORP. 3,700 438,561 ----------- 1,477,496 ----------- OIL & GAS EXPLOR PROD & SER 19.1% CHEVRON CORPORATION 7,419 735,446 CONOCOPHILLIPS 46,600 4,398,574 CONTINENTAL RESOURCES, INC. *4,300 298,076 EXXON MOBIL CORP. 52,164 4,597,213 HESS CORP. 10,700 1,350,233 MARATHON OIL CORP. 27,000 1,400,490 OCCIDENTAL PETROLEUM CORP. 31,300 2,812,618 W&T OFFSHORE, INC. *4,500 263,295 ----------- 15,855,945 ----------- PHARMACEUTICALS 5.4% BRISTOL-MYERS SQUIBB COMPANY 29,300 601,529 ELI LILLY & CO. 29,700 1,370,952 MERCK & COMPANY, INC. 20,800 783,952 22 ACTIVA Mutual Funds Semiannual Report The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments continued VALUE FUND - 6/30/08 (Unaudited) % OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) --------------------------------------------------------------------------------------------------------------------------- PHARMACEUTICALS (CONTINUED) UNITEDHEALTH GROUP, INC. *13,000 $ 341,250 WATSON PHARMACEUTICALS, INC. *10,900 296,153 WYETH *22,500 1,079,100 ----------- 4,472,936 ----------- RESTAURANTS 0.7% DARDEN RESTAURANT, INC. 17,600 562,144 ----------- RETAIL STORES 5.7% BJ'S WHOLESALE CLUB, INC. *15,800 611,460 DOLLAR TREE, INC. *7,900 258,251 GAP, INC. 86,800 1,446,956 STAPLES, INC. *9,200 218,500 SUPERVALU, INC. 33,200 1,025,548 WAL-MART STORES, INC. 21,200 1,191,440 ----------- 4,752,155 ----------- REAL ESTATE INVESTMENT TRUST 0.6% DOVER CORPORATION 9,500 459,515 ----------- STEEL 1.2% UNITED STATES STEEL CORP. 5,400 997,812 ----------- TECHNOLOGY 0.9% AVNET, INC. 7,200 196,416 BELDEN CDT, INC. 5,700 193,116 SEAGATE TECHNOLOGY *21,400 409,382 ----------- 798,914 ----------- TOBACCO 1.9% PHILIP MORRIS INTERNATIONAL *32,325 1,596,532 ----------- TELECOMMUNICATIONS 7.6% AT&T, INC. 139,045 4,684,426 ENTERGY CORP. 3,100 373,488 FPL GROUP, INC. 11,400 747,612 TIME WARNER 36,900 546,120 ----------- 6,351,646 ----------- TOTAL COMMON STOCKS (Cost $78,215,004) 81,398,555 ----------- TOTAL INVESTMENTS - 100% (Cost $79,845,952) $83,029,503 =========== *Non-dividend producing as of June 30, 2008
ACTIVA Mutual Funds Semiannual Report 23 The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments GROWTH FUND - 6/30/08 (Unaudited)
% OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) --------------------------------------------------------------------------------------------------------------------------- MONEY MARKET FUNDS - TAXABLE - 0.3% 0.3% CUSTODIAN CASH SWEEP NORTHERN INSTITUTIONAL DIVERSIFIED ASSETS PORT. 69,285 $ 69,285 ----------- TOTAL MONEY MARKET FUNDS - TAXABLE (Cost $69,285) 69,285 ----------- FEDERAL HOME LOAN BANK - 0.7% 0.7% FEDERAL HOME LOAN BANK, 7/01/08 200,000 200,000 ----------- TOTAL FEDERAL HOME LOAN BANK (Cost $200,000) 200,000 ----------- COMMON STOCKS - 97.2% AEROSPACE 2.7% HONEYWELL INTERNATIONAL, INC. 9,219 463,531 NORTHROP GRUMMAN CORP. 4,500 301,050 ----------- 764,581 ----------- AGRICULTURE 1.6% MONSANTO COMPANY 3,484 440,517 ----------- AIRLINES 1.1% EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. 6,976 299,968 ----------- BIOTECHNOLOGY 6.1% CELGENE CORP. *7,300 466,251 GENENTECH, INC. *4,900 371,910 GENZYME CORPORATION *4,400 316,888 GILAD SCIENCES, INC. 10,400 550,680 ----------- 1,705,729 ----------- BUSINESS SERVICES 2.4% JANUS CAPITAL GROUP, INC. 19,404 513,624 RESEARCH IN MOTION 1,310 153,139 ----------- 666,763 ----------- COAL & CONSUMABLE FUELS 1.5% CONSOL ENERGY, INC. 3,792 426,107 ----------- COMMUNICATIONS EQUIPMENT 8.8% AMERICAN TOWER CORPORATION *13,838 584,655 CISCO SYSTEMS, INC. *27,030 628,718 QUALCOMM, INC. 28,196 1,251,057 ----------- 2,464,430 ----------- 24 ACTIVA Mutual Funds Semiannual Report The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments continued GROWTH FUND - 6/30/08 (Unaudited) % OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) --------------------------------------------------------------------------------------------------------------------------- COMPUTER SOFTWARE 4.5% ADOBE SYSTEMS, INC. *19,959 $ 786,185 MICROSOFT CORP. 17,276 475,263 ----------- 1,261,448 ----------- COMPUTER HARDWARE 2.6% APPLE COMPUTER *4,407 737,908 ----------- CONSUMER GOODS & SERVICES 5.0% COCA-COLA CO. 17,500 909,650 MCDONALD'S CORP. 4,700 264,234 PEPSICO, INC. 3,700 235,283 ----------- 1,409,167 ----------- COSMETICS 3.7% ACTIVISION, INC. *18,100 616,667 AVON PRODUCTS, INC. 11,300 407,026 ----------- 1,023,693 ----------- ELECTRIC UTILITY 1.7% EXELON CORP. 5,123 460,865 ----------- ELECTRONICS 1.3% PMC - SIERRA, INC. 48,700 372,555 ----------- FINANCIAL SERVICES 1.3% JP MORGAN CHASE & CO. 4,900 168,119 NYSE EURONEXT 3,700 187,442 ----------- 355,561 ----------- GOLD (PRECIOUS METALS) 1.7% AGNICO-EAGLE MINES LTD. *6,200 461,094 ----------- HEALTH CARE 2.4% DENTSPLY INT'L., INC. *5,200 191,360 MEDCO HEALTH SOLUTIONS *9,916 468,035 ----------- 659,395 ----------- INDUSTRIAL GOODS & SERVICES 2.0% CORNING, INC. 16,073 370,483 FLUOR CORP. 1,000 186,080 ----------- 556,563 ----------- INSTRUMENTATION 2.3% THERMO ELECTRON CORP. *11,500 640,895 ----------- ACTIVA Mutual Funds Semiannual Report 25 The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments continued GROWTH FUND - 6/30/08 (Unaudited) % OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) --------------------------------------------------------------------------------------------------------------------------- INTERNET CONTENT 2.6% GOOGLE, INC. CL A *1,379 $ 725,933 ----------- INVESTMENT COMPANY 1.8% JOY GLOBAL, INC. 6,500 492,895 ----------- MACHINERY & EQUIPMENT 0.8% BORGWARNER, INC. *5,000 221,900 ----------- MANUFACTURING-CAPITAL GOODS 2.6% DANAHER CORP. 9,400 726,620 ----------- MEDICAL EQUIPMENT & SUPPLIES 4.3% C.R. BARD, INC. 2,800 246,260 JOHNSON & JOHNSON 9,500 611,230 HENRY SCHEIN, INC. *6,600 340,362 ----------- 1,197,852 ----------- METALS & MINING 1.9% FREEPORT-MCMORAN COPPER 4,659 545,988 ----------- NATURAL RESOURCES 1.1% MASSEY ENERGY CO. *3,270 306,562 ----------- OIL & GAS EXPLOR PROD & SER 9.5% CAMERON INTERNATIONAL CORP. *10,500 581,175 EOG RESOURCES, INC. 2,530 331,936 PETROLEO BRASILEIRO S.A 3,200 226,656 SCHLUMBERGER LTD. 12,074 1,297,110 TRANSOCEAN, INC. *1,397 212,889 ----------- 2,649,766 ----------- PHARMACEUTICALS 5.1% ABBOTT LABORATORIES 10,100 534,997 CUMMINS, INC. 7,100 465,192 ELAN CORP. PLC - SPONS. ADR *11,900 423,045 ----------- 1,423,234 ----------- RETAIL STORES 7.9% AMAZON.COM, INC. 4,242 311,066 CVS CORP. *2,100 83,097 KOHL'S CORP. *7,434 297,657 NORDSTROM, INC. 6,890 208,767 ROSS STORES, INC. *7,530 267,466 WAL-MART STORES, INC. 18,474 1,038,239 ----------- 2,206,292 ----------- 26 ACTIVA Mutual Funds Semiannual Report The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments continued GROWTH FUND - 6/30/08 (Unaudited) % OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) --------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY-SOFTWARE 1.6% SALESFORCE.COM, INC. *6,490 $ 442,813 ----------- TOBACCO 2.6% PHILIP MORRIS INTERNATIONAL *14,919 736,849 ----------- TELECOMMUNICATIONS 1.7% AT&T, INC. 7,426 250,182 BROADCOM CORP. CL A 8,600 234,694 ----------- 484,876 ----------- WASTE MANAGEMENT 1.0% WASTE MANAGEMENT, INC. 7,800 294,138 ----------- TOTAL COMMON STOCKS - (Cost $25,236,768) 27,162,957 ----------- WARRANTS - 0.0% 0.0% RAYTHEON CO. WARRANTS, EXPIRES 6/16/11 628 12,214 ----------- TOTAL WARRANTS - (Cost $0.00) 12,214 ----------- MUTUAL FUNDS - 1.8% 1.8% FINANCIAL SERVICES CONSUMER STAPLES SELECT SECTOR SPDR FUND 18,400 490,544 ----------- TOTAL MUTUAL FUNDS (Cost $482,025) 490,544 ----------- TOTAL INVESTMENTS - 100% (Cost $25,988,078) $27,935,000 =========== *Non-dividend producing as of June 30, 2008 ACTIVA Mutual Funds Semiannual Report 27 The accompanying notes are an integral part of these financial statements.
ACTIVA Schedule of Investments INTERNATIONAL FUND - 6/30/08 (Unaudited)
% OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) --------------------------------------------------------------------------------------------------------------------------- MONEY MARKET FUNDS - TAXABLE - 6.1% 6.1% CUSTODIAN CASH SWEEP - UNITED STATES NORTHERN INSTITUTIONAL DIVERSIFIED ASSETS PORT. 2,790,626 $ 2,790,626 ----------- TOTAL MONEY MARKET FUNDS - TAXABLE (Cost $2,790,626) 2,790,626 ----------- COMMON STOCKS - 93.9% 1.9% AEROSPACE THALES SA - FRANCE 15,050 857,698 ----------- ALUMINUM 3.1% TOYO SEIKAN KAISHA LTD. - JAPAN 32,800 578,951 ALUMINA LTD. - AUSTRALIA 183,290 832,649 ----------- 1,411,600 ----------- APPAREL 1.2% WACOAL HOLDINGS CORP. - JAPAN 45,000 537,440 ----------- AUTOMOTIVE PARTS & EQUIPMENT 1.4% MAGNA INTERNATIONAL, INC. CL A - CANADA *10,430 617,873 ----------- BANKING 0.9% SUMITOMO TRUST & BANKING - JAPAN 61,000 426,316 ----------- BEVERAGES - FOREIGN 2.2% COCA-COLA WEST HOLDINGS CO., LTD. - JAPAN 43,100 1,004,733 ----------- BREWERY 1.8% KIRIN BREWERY CO., LTD. - JAPAN 53,000 827,673 ----------- BUILDING PRODUCTS 1.3% JS GROUP CORP. - JAPAN 38,500 611,750 ----------- CABLE TV 3.4% PREMIERE AG - GERMANY *69,400 1,529,597 ----------- COMPUTER STORAGE 2.8% GEMALTO - NETHERLANDS *35,150 1,279,389 ----------- CONSUMER GOODS & SERVICES 6.7% FUJI PHOTO FILM - JAPAN 36,900 1,268,579 MABUCHI MOTOR CO. LTD. - JAPAN *23,000 1,247,810 SEGA SAMMY HOLDINGS, INC. - JAPAN 63,100 550,349 ----------- 3,066,738 ----------- COSMETICS 1.5% SHISEIDO CORP. - JAPAN 30,000 686,635 ----------- 28 ACTIVA Mutual Funds Semiannual Report The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments continued INTERNATIONAL FUND - 6/30/08 (Unaudited) % OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) --------------------------------------------------------------------------------------------------------------------------- ELECTRIC UTILITY 2.2% CENTRAIS ELETRICAS BRASILEIRAS S.A. - BRAZIL 28,950 $ 476,340 KOREA ELECTRIC POWER CORP. - SPON. ADR - KOREA 36,000 523,080 ----------- 999,420 ----------- ENERGY 1.1% SUNCOR ENERGY, INC. - CANADA 8,440 490,533 ----------- FINANCIAL SERVICES 2.2% TAKEFUJI CORP. - JAPAN 35,920 499,707 UBS AG-REG - SWITZERLAND 24,801 512,391 ----------- 1,012,098 ----------- FOREST PRODUCTS 1.5% STORA ENSO OYJ `R' SHRS - FINLAND 71,050 666,653 ----------- FOREIGN AGENCIES 1.1% OPTI CANADA, INC. - CANADA *22,830 517,337 ----------- GOLD (PRECIOUS METALS) 9.7% ANGLOGOLD ASHANTI-SPON ADR - SOUTH AFRICA 64,812 2,199,719 GOLD FIELDS LTD.-SPONS ADR - SOUTH AFRICA 25,150 318,148 GOLD FIELDS LTD. - SOUTH AFRICA 60,220 766,226 LIHIR GOLD LTD. - PAPUA NEW GUINEA *169,220 533,571 NEWCREST MINING LTD. - AUSTRALIA 12,800 359,437 NOVAGOLD RESOURCES, INC. - CANADA 32,850 244,733 ----------- 4,421,834 ----------- HOME BUILDERS 1.6% SEKISUI HOUSE LTD. - JAPAN 79,000 737,393 ----------- INDUSTRIAL CONGLOMERATES (ENERGY) 1.1% AREVA - CI - FRANCE 420 491,278 ----------- INSURANCE 1.3% MITSUI SUMITOMO INSURANCE GROUP HOLDINGS, INC. - JAPAN *16,800 579,147 ----------- MEDICAL EQUIPMENT & SUPPLIES 3.4% ASTRAZENECA ADR - UNITED KINGDOM 17,200 731,516 SANOFI-AVENTIS - FRANCE 12,150 811,594 ----------- 1,543,110 ----------- METALS & MINING 5.8% LONMIN PLC - UNITED KINGDOM 3,800 241,497 IVANHOE MINES LTD. - CANADA 44,050 480,585 NEWMONT MINING CORP. - UNITED STATES 33,300 1,736,928 ACTIVA Mutual Funds Semiannual Report 29 The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments continued INTERNATIONAL FUND - 6/30/08 (Unaudited) % OF SHARES OR VALUE SECURITY DESCRIPTION INVESTMENTS PAR VALUE (NOTE 2) --------------------------------------------------------------------------------------------------------------------------- METALS & MINING (CONTINUED) APEX SILVER MINES LTD. - CAYMAN ISLANDS 37,680 $ 185,009 ----------- 2,644,019 ----------- OIL & GAS EXPLOR PROD & SER 8.2% BP PLC - UNITED KINGDOM 123,300 1,432,250 PETRO-CANADA - CANADA 12,120 675,690 ROYAL DUTCH SHELL ADR-B - UNITED KINGDOM 14,435 1,156,388 SK TELECOM CO. LTD. ADR - KOREA 21,800 452,786 ----------- 3,717,114 ----------- PAPER PRODUCTS 0.8% UPM-KYMMENE OYJ - FINLAND 23,400 383,123 ----------- PETROLEUM-REFINING 2.9% NIPPON OIL CORP. - JAPAN 197,000 1,322,982 ----------- PRINTING & PUBLISHING 3.2% DAI NIPPON PRINTING CO., LTD. - JAPAN 98,000 1,444,570 ----------- PRECIOUS METALS 4.0% BARRICK GOLD CORP. - CANADA *40,293 1,833,332 ----------- RETAIL STORES 1.8% SEVEN & I HOLDINGS COMPANY - JAPAN 28,800 821,927 ----------- TELECOMMUNICATIONS 13.8% ERICSSON (LM) TEL-SP ADR - SWEDEN 43,860 456,144 KT CORP. - KOREA 58,110 1,238,905 ALCATEL-LUCENT - FRANCE 156,000 947,985 NIPPON TELEGRAPH & TELEPHONE CORP. ADR - JAPAN 76,850 1,867,455 TELECOM ITALIA - ITALY 845,000 1,370,198 BELGACOM SA - BELGIUM 9,650 416,263 ----------- 6,296,950 ----------- TOTAL COMMON STOCKS (Cost $43,287,978) 42,780,262 ----------- TOTAL INVESTMENTS - 100% (Cost $46,078,604) $45,570,888 ===========
*Non-dividend producing as of June 30, 2008 30 ACTIVA Mutual Funds Semiannual Report The accompanying notes are an integral part of these financial statements. ACTIVA Schedule of Investments continued INTERNATIONAL FUND - 6/30/08 (Unaudited) At June 30, 2008 the breakdown by country was: % OF MARKET ACTUAL COUNTRY VALUE MARKET VALUE Australia 2.6% $ 1,192,086 Belgium 0.9% 416,263 Brazil 1.1% 476,340 Canada 10.7% 4,860,082 Cayman Islands 0.4% 185,009 Finland 2.3% 1,049,776 France 6.9% 3,108,556 Germany 3.4% 1,529,597 Italy 3.0% 1,370,198 Japan 33.0% 15,013,416 Republic of Korea 4.8% 2,214,771 Netherlands 2.8% 1,279,389 Papua New Guinea 1.2% 533,572 South Africa 7.2% 3,284,093 Sweden 1.0% 456,144 Switzerland 1.1% 512,391 United Kingdom 7.7% 3,561,651 United States 9.9% 4,527,554 ----- ----------- 100.0% $45,570,888 ===== =========== ACTIVA Mutual Funds Semiannual Report 31 The accompanying notes are an integral part of these financial statements. ACTIVA Statement of Assets and Liabilities
INTERMEDIATE INTERNATIONAL As of June 30, 2008 (Unaudited) BOND FUND VALUE FUND GROWTH FUND FUND ----------- ----------- ----------- ----------- ASSETS Investments at cost $65,005,007 $79,845,952 $25,988,078 $46,078,604 ----------- ----------- ----------- ----------- Investments at value 65,052,644 83,029,503 27,935,000 45,570,888 Collateral for securities on loan 2,379,129 7,640,242 3,038,051 11,922,116 Foreign currency held at fair value (cost $56,087) -- -- -- 56,087 Receivables: Securities sold -- 259,619 295,639 465,487 Investment income 587,925 136,734 20,070 94,039 Other assets 957 28,244 16,797 22,431 ----------- ----------- ----------- ----------- Total Assets 68,020,655 91,094,342 31,305,557 58,131,048 ----------- ----------- ----------- ----------- LIABILITIES Payables - affiliate: Advisory fees 62,289 131,879 49,048 100,185 Transfer agent fees 506 52,060 1,324 932 12b-1 fees 16,357 20,604 7,068 11,787 Service fees 40,893 54,950 17,669 29,466 Payables - general: Collateral for securities on loan 2,379,129 7,640,242 3,038,051 11,922,116 Securities purchased -- 141,316 236,246 -- Due to broker - variation margin -- -- -- -- Other liabilities -- -- -- -- Accrued expenses 24,927 15,888 8,438 21,803 ----------- ----------- ----------- ----------- Total Liabilities 2,524,101 8,056,939 3,357,844 12,086,289 ----------- ----------- ----------- ----------- NET ASSETS $65,496,554 $83,037,403 $27,947,713 $46,044,759 =========== =========== =========== =========== SHARES OUTSTANDING 6,643,056 9,934,360 3,252,566 4,901,662 =========== =========== =========== =========== NET ASSET VALUE PER SHARE $9.86 $8.59 $9.39 Class A based on net assets of $77,825,849 and 9,314,415 shares outstanding $8.36 Class R based on net assets of $5,211,554 and 619,945 shares outstanding $8.41
32 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, 2008 (Unaudited)
INTERMEDIATE INTERNATIONAL BOND FUND VALUE FUND GROWTH FUND FUND ---------- ------------ ----------- ----------- INVESTMENT INCOME Interest $1,647,767 $18,975 $10,439 $13,398 Dividends -- 1,033,244 142,359 588,126 Miscellaneous 11,546 10,202 7,442 63,726 ---------- ------------ ----------- ----------- Total Investment Income 1,659,313 1,062,421 160,240 665,250 ---------- ------------ ----------- ----------- EXPENSES Advisory fees 124,525 262,269 95,440 197,267 12b-1 fees 32,697 41,044 13,727 23,208 Service fees 70,993 94,749 29,862 50,443 Shareholder report 2,550 24,570 2,002 1,820 Fund accounting fees 29,732 26,936 21,294 22,568 Audit fees 31,478 14,742 14,742 14,742 Custodian fees 7,971 9,072 5,257 15,106 Insurance 4,507 3,948 1,227 1,999 Legal fees 6,552 6,209 6,209 6,307 Registration fees 1,820 3,360 910 1,456 Michigan state business tax 18,200 -- -- 26,400 Transfer agent fees 948 99,554 2,548 1,820 Transfer agent fees - Class R -- 5,334 -- -- Trustee fees 9,430 7,280 7,280 7,280 ---------- ------------ ----------- ----------- Total Expenses 341,403 599,067 200,498 370,416 ---------- ------------ ----------- ----------- Net Investment Income (Loss) 1,317,910 463,354 (40,258) 294,834 ---------- ------------ ----------- ----------- REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS, FOREIGN CURRENCY AND FUTURES CONTRACTS Net realized gain (loss) from security transactions 307,952 (4,043,268) 782,354 2,779,914 Net realized gain (loss) from foreign currency transactions (5,603) -- -- (64,862) Net realized gain (loss) from futures contracts -- -- -- -- Changes in net unrealized appreciation or (depreciation) of investments and foreign currency (870,351) (6,487,517) (2,142,133) (4,568,721) ---------- ------------ ----------- ----------- Net Gain (Loss) from Investments, Foreign Currency and Futures Contracts (568,002) (10,530,785) (1,359,779) (1,853,669) ---------- ------------ ----------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $749,908 ($10,067,431) ($1,400,037) ($1,558,835) ========== ============ =========== ===========
ACTIVA Mutual Funds Semiannual Report 33 The accompanying notes are an integral part of these financial statements. ACTIVA Statement of Changes in Net Assets
INTERMEDIATE BOND FUND VALUE FUND PERIOD YEAR PERIOD YEAR ENDED ENDED ENDED ENDED 6/30/08 12/31/07 6/30/08 12/31/07 Increase (Decrease) in: (UNAUDITED) (AUDITED) (UNAUDITED) (AUDITED) -------------------------- -------------------------- NET ASSETS FROM OPERATIONS Net investment income (loss) $1,317,910 $3,080,456 $463,354 $1,764,785 Net realized gain (loss) on investments 302,349 (378,583) (4,043,268) 12,337,013 Net increase (decrease) in unrealized appreciation (870,351) 1,481,723 (6,487,517) (11,073,622) ----------- ----------- ----------- ----------- Net increase (decrease) in net assets resulting from operations 749,908 4,183,596 (10,067,431) 3,028,176 DISTRIBUTIONS TO SHAREHOLDERS Net investment income: Class A (1,539,263) (3,053,266) 557 (1,719,046) Class R -- -- -- (78,994) Net realized gain from investment transactions: Class A -- -- 2,158 (6,667,917) Class R -- -- -- (292,555) ----------- ----------- ----------- ----------- Total distributions to shareholders (1,539,263) (3,053,266) 2,715 (8,758,512) CAPITAL SHARE TRANSACTIONS Net proceeds from sale of shares: Class A 63,251 31,052 2,318,585 2,924,398 Class R -- -- 670,230 1,563,838 Net asset value of shares issued to shareholders in reinvestment of investment income and realized gain from security transactions: Class A 1,539,120 3,053,091 -- 8,242,884 Class R -- -- -- 371,549 Payment for shares redeemed: Class A (81,714) (30,143,958) (3,691,978) (42,437,543) Class R -- -- (295,420) (1,249,301) ----------- ----------- ----------- ----------- Net increase (decrease) in net assets derived from capital share transactions 1,520,657 (27,059,815) (998,583) (30,584,175) ----------- ----------- ----------- ----------- Net Increase (Decrease) in Net Assets 731,302 (25,929,485) (11,063,299) (36,314,511) Net Assets, beginning of year or period 64,765,252 90,694,737 94,100,702 130,415,213 ----------- ----------- ----------- ----------- Net Assets, end of year or period $65,496,554 $64,765,252 $83,037,403 $94,100,702 =========== =========== =========== =========== NET ASSETS CONSIST OF: Capital $67,069,777 $65,549,120 $64,041,467 $65,040,049 Undistributed net investment income (loss) 56,605 -- 370,948 -- Return of capital -- (18,688) -- (92,963) Undistributed net realized gain (loss) from investments (1,678,224) (1,683,927) 15,441,437 19,482,547 Unrealized appreciation (depreciation) of investments and foreign currency 48,396 918,747 3,183,551 9,671,069 ----------- ----------- ----------- ----------- $65,496,554 $64,765,252 $83,037,403 $94,100,702 =========== =========== =========== =========== TRANSACTIONS IN FUND SHARES Shares sold: Class A 6,299 3,150 258,677 297,777 Class R -- -- 76,400 156,459 Reinvested distributions: Class A 153,895 310,896 -- 897,236 Class R -- -- 40,211 Shares redeemed: Class A (8,304) (3,048,237) (423,632) (4,505,039) Class R -- -- (32,870) (122,945) ----------- ----------- ----------- ----------- Net increase (decrease) in fund shares 151,890 (2,734,191) (121,425) (3,236,301) Shares outstanding, beginning of year or period 6,491,166 9,225,357 10,055,785 13,292,086 ----------- ----------- ----------- ----------- Shares outstanding, end of year or period 6,643,056 6,491,166 9,934,360 10,055,785 =========== =========== =========== ===========
34 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 YEAR PERIOD YEAR ENDED ENDED ENDED ENDED 6/30/08 12/31/07 6/30/08 12/31/07 Increase (Decrease) in: (UNAUDITED) (AUDITED) (UNAUDITED) (AUDITED) -------------------------- -------------------------- NET ASSETS FROM OPERATIONS Net investment income (loss) ($40,258) ($48,245) $294,834 $384,013 Net realized gain (loss) on investments 782,354 3,315,279 2,715,052 6,315,119 Net increase (decrease) in unrealized appreciation (2,142,133) 1,200,264 (4,568,721) (1,937,350) ----------- ----------- ----------- ----------- Net increase (decrease) in net assets resulting from operations (1,400,037) 4,467,298 (1,558,835) 4,761,782 DISTRIBUTIONS TO SHAREHOLDERS Net investment income: Class A -- -- -- (374,394) Class R -- -- -- -- Net realized gain from investment transactions: Class A -- -- -- (5,251,891) Class R -- -- -- -- ----------- ----------- ----------- ----------- Total distributions to shareholders -- -- -- (5,626,285) CAPITAL SHARE TRANSACTIONS Net proceeds from sale of shares: Class A 254,163 92,063 211,707 384,278 Class R -- -- -- -- Net asset value of shares issued to shareholders in reinvestment of investment income and realized gain from security transactions: Class A -- -- -- 5,626,173 Class R -- -- -- -- Payment for shares redeemed: Class A (150,014) (102,601) (227,497) (233,495) Class R -- -- -- -- ----------- ----------- ----------- ----------- Net increase (decrease) in net assets derived from capital share transactions 104,149 (10,538) (15,790) 5,776,956 ----------- ----------- ----------- ----------- Net Increase (Decrease) in Net Assets (1,295,888) 4,456,760 (1,574,625) 4,912,453 Net Assets, beginning of year or period 29,243,601 24,786,841 47,619,384 42,706,931 ----------- ----------- ----------- ----------- Net Assets, end of year or period $27,947,713 $29,243,601 $46,044,759 $47,619,384 =========== =========== =========== =========== NET ASSETS CONSIST OF: Capital $27,497,007 $27,392,859 $43,264,178 $43,279,969 Undistributed net investment income (loss) (857,293) (817,035) (718,813) (948,786) Return of capital -- -- -- -- Undistributed net realized gain (loss) from investments (638,923) (1,421,277) 4,006,666 1,226,752 Unrealized appreciation (depreciation) of investments and foreign currency 1,946,922 4,089,054 (507,272) 4,061,449 ----------- ----------- ----------- ----------- $27,947,713 $29,243,601 $46,044,759 $47,619,384 =========== =========== =========== =========== TRANSACTIONS IN FUND SHARES Shares sold: Class A 30,197 10,843 22,358 37,929 Class R -- -- -- -- Reinvested distributions: Class A -- -- -- 594,733 Class R -- -- -- -- Shares redeemed: Class A (17,880) (12,453) (24,901) (21,925) Class R -- -- -- -- ----------- ----------- ----------- ----------- Net increase (decrease) in fund shares 12,317 (1,610) (2,543) 610,737 Shares outstanding, beginning of year or period 3,240,249 3,241,859 4,904,205 4,293,468 ----------- ----------- ----------- ----------- Shares outstanding, end of year or period 3,252,566 3,240,249 4,901,662 4,904,205 =========== =========== =========== ===========
ACTIVA Mutual Funds Semiannual Report 35 The accompanying notes are an integral part of these financial statements. ACTIVA Notes to Unaudited Financial Statements 1. ORGANIZATION Activa Mutual Fund Trust (Trust) was organized as a Delaware statutory trust on February 2, 1998. The trust is an open-end management investment company registered under the Investment Company Act of 1940 and consists of four funds. The funds are: 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) and are collectively referred to as the Funds. The Value Fund is the successor to Amway Mutual Fund. 2. INVESTMENT OBJECTIVES 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 the Fund believes to be undervalued by the marketplace with above-average potential for capital appreciation. 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. All other Funds issue a single class of shares. Each share for all of the Funds, including Class A and Class R of the Value Fund represents an equal proportionate interest in their respective Fund and, generally, will have identical voting, dividend, liquidation, and other rights and the same terms and conditions. Each class and Fund will have exclusive voting rights with respect to matters affecting only that class or Fund. Each class and Fund 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 or Fund based upon its relative net assets. Each Fund has authorized an unlimited number of shares. 3. SIGNIFICANT ACCOUNTING POLICIES 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, 2008), and other assets of the Funds are valued at fair market value as determined by the Funds' Board of Trustees. 36 ACTIVA Mutual Funds Semiannual Report ACTIVA Notes to Unaudited Financial Statements continued Derivative Transactions The Funds 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, a 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 Operations. 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 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 Statement 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 forward foreign currency exchange contracts during the period ended June 30, 2008. Futures Contracts The Funds may use futures contracts to manage its exposure to the stock and bond markets. Buying futures tends to increase a 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 and market 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 or losses are realized upon the expiration or closing of the futures contracts and are included in the Statement of Operations. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded. 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 ACTIVA Mutual Funds Semiannual Report 37 ACTIVA Notes to Unaudited Financial Statements continued exchange rates on foreign securities held are included in net realized and unrealized gain or loss on investments. Security Lending The Funds lend portfolio securities from time to time in order to earn additional income. The income recorded as a result of securities lending transactions is included in miscellaneous income in the Statement of Operations. 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, 2008, the value of the securities loaned and the collateral received were as follows: Value of the Collateral Fund Securities Loaned Received ---- ----------------- -------- Intermediate Bond $2,372,828 $2,379,129 Value $7,384,251 $7,640,242 Growth $2,964,313 $3,038,051 International $11,985,139 $12,419,461 The cash collateral received by the Funds is recorded as an asset and liability in the Statement of Assets and Liabilities. Fair Value Measurements Effective January 1, 2008, the Funds adopted SFAS No. 157, Fair Value Measurements (SFAS 157). This standard establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and requires additional disclosures about fair value measurements. The three levels of the fair value hierarchy are as follows: o Level 1 - quoted prices in active markets for identical investments o Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) o Level 3 - significant unobservable inputs (including the Fund's own assumption in determining the fair value of investments) The inputs or methodology used in valuing securities are not necessarily an indication of the risk associated with investing in those securities. A summary of the inputs used to value the Fund's investments provided by the Fund Accountant as of June 30, 2008 is as follows:
(Level 2) Other (Level 3) (Level 1) Significant Significant Investment Quoted Observable Unobservable Fund Category Prices Inputs Inputs Total ---------------------------------------------------------------------------------------------------- Intermediate Investments Bond in Securities $ -- $65,052,644 $ -- $65,052,644 Intermediate Other Financial Bond Instruments* -- -- -- -- Investments Value in Securities 83,029,503 -- -- 83,029,503 Other Financial Value Instruments* -- -- -- -- Investments in Growth Securities 27,935,000 -- -- 27,935,000 Other Financial Growth Instruments* -- -- -- -- Investments in International Securities 45,094,547 476,341 -- 45,570,888 Other Financial International Instruments* -- -- -- --
* Other financial instruments may include options, futures, swaps and forward foreign currency contracts. 38 ACTIVA Mutual Funds Semiannual Report ACTIVA Notes to Unaudited Financial Statements continued 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 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 Intermediate Bond Fund declares and distributes 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 accounting principles generally accepted in the United States of America 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. New Accounting Standards On January 1, 2007, the Funds adopted the provisions of FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes, an Interpretation of FASB No. 109" (FIN 48). FIN 48 provides recognition criteria and a related measurement model for tax positions taken by companies. In accordance with FIN 48, a tax position is a position in a previously filed tax return or a position expected to be taken in a future tax filing that is reflected in measuring current or deferred income tax assets and liabilities. Tax positions are required to be recognized only when it is more likely than not (likelihood of greater than 50%), based solely on the technical merits, that the position will be sustained upon examination. Tax positions that meet the more likely than not threshold should be measured using a probability weighted approach as the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement. The Funds have reviewed their tax positions and determined that there are no uncertain tax positions. Accordingly, there have not been any adjustments made to these financial statements related to FIN 48. 4. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES The Trust has 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 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 ---- ----------------------- 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% of average net assets 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 ACTIVA Mutual Funds Semiannual Report 39 ACTIVA Notes to Unaudited Financial Statements continued As permitted by the above agreements, the Adviser has retained the following sub-advisers: FUND SUB-ADVISER Intermediate Bond McDonnell Investment Management, LLC Value Wellington Management Company, LLP Growth BlackRock Capital Management, Inc. International Tradewinds Global Investors, LLC* * Tradewinds Global Investors, LLC, became sub-adviser for the International Fund effective April 1, 2005. Prior to that agreement, sub-advisory services were provided by Nicholas Applegate Capital Management. Pursuant to Rule 12b-1 under the Investment Company Act of 1940, the 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 up to .25 of 1% of the average net assets of the Funds. For the six month period ended June 30, 2008 the Board of Trustees approved an annual rate of .10 of 1% of average net assets. The Trust has a transfer agency and dividend disbursing agency agreement with Activa Asset Management LLC. Under this agreement, Activa Asset Management LLC is the agent for transfer of the Funds shares and disbursement of the Funds distributions. For these services, the Intermediate Bond, Value (Class A), Growth and International Funds pay a monthly fee based upon $2.00 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, as amended on June 3, 2004 and February 12, 2008, the Trust has entered into an administrative agreement with Activa Asset Management LLC. Under the terms of the agreement Activa Asset Management LLC acts as administrator for the Funds. As administrator of the Funds, Activa Asset Management LLC furnishes office space and office facilities, equipment and personnel, as well as provides services relating to compliance, tax and financial service requirements. For these services, the administrator is compensated quarterly by each Fund at an annual rate of .15% of 1% of average daily net assets. Effective March 1, 2008, the rate is .25% of 1% of average daily net assets on the first $150,000,000 and .15% of 1% on the excess. 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 information for the preparation of 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 pays the Fund Accountant an annual fee of $2,500 for portfolio accounting reports provided to adviser personnel through internet access. Two families, which own (directly or indirectly) the majority of the shares outstanding of each Fund, also indirectly own 100% of the Adviser. 5. INVESTMENT TRANSACTIONS At June 30, 2008, the cost of investments owned by the Value Fund was $79,845,952 for federal income tax purposes. Aggregate gross unrealized appreciation on securities in which there was an excess of market value over tax cost was $12,039,258. Aggregate gross unrealized depreciation on securities in which there was an excess of tax cost over market value was $8,855,707. Net unrealized appreciation for tax purposes was $3,183,551, at June 30, 2008. 40 ACTIVA Mutual Funds Semiannual Report ACTIVA Notes to Unaudited Financial Statements continued The unrealized appreciation (depreciation) at June 30, 2008 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 ----------------------------------------------------------------------- Intermediate Bond $ 950,192 $ 903,151 $ 47,041 $65,005,603 Growth 3,066,857 1,177,483 1,889,374 26,045,626 International 5,005,060 5,512,777 (507,717) 46,078,604 Accumulated capital losses noted below represent net capital loss carryforwards for federal income tax purposes, as of December 31, 2007, that may be available to offset future realized gains and thereby reduce future taxable gains distributions. Each Fund's tax-basis capital gains and losses are determined only at the end of each fiscal year. The table below shows the expiration dates of the capital loss carryovers. December 31, December 31, December 31, December 31, Fund 2010 2011 2014 2015 -------------------------------------------------------------------- Intermediate Bond $ -- $ -- $1,028,625 $ 542,659 Value -- -- -- -- Growth 1,331,773 1,828,921 -- -- International -- -- -- -- For the period ended June 30, 2008, each Fund purchased and sold securities, excluding short-term securities, in the following amounts: U.S. Government Obligations Other Securities Fund Purchases Sales Purchases Sales --------------------------------------------------------------------------- Intermediate Bond $2,016,833 $1,690,874 $7,663,093 $7,690,922 Value -- -- 36,764,188 35,414,590 Growth -- -- 10,477,781 9,995,249 International -- -- 12,460,788 13,706,025 6. RELATED PARTY TRANSACTION A certain class of Independent Business Owners of Alticor, Inc. received part of their Emerald profit-sharing bonus in common stock shares of the Value Fund. On January 10, 2008, Alticor, Inc. purchased 230,119 Value Fund shares valued at $2,068,766 (based upon the net asset value of $8.99 per share) and transferred the shares to these Independent Business Owners. 7. SUBSEQUENT EVENTS On July 10, 2008 Amway Investment Corp., a principal shareholder of the Activa Mutual Fund, redeemed $22,000,000 from the Activa International Fund, via a redemption in kind which is a distribution of portfolio securities, rather than cash as payment, for a redemption of Fund shares. The Board of Trustees of the Activa Intermediate Bond Fund (the "Fund"), at its meeting on June 17, 2008, voted to liquidate the Fund effective July 18, 2008. Shareholders received a liquidating distribution as of July 18, 2008. Activa Asset Management, LLC, the Fund's Investment Adviser, has agreed to pay the expenses of the liquidation, if any. ACTIVA Mutual Funds Semiannual Report 41 ACTIVA Financial Highlights
INTERMEDIATE BOND FUND VALUE FUND - CLASS A ---------------------------- ------------------------------- PERIOD YEAR PERIOD YEAR ENDED ENDED ENDED ENDED 6/30/08 12/31/07 6/30/08 12/31/07 Per share outstanding for each period (UNAUDITED) (AUDITED) (UNAUDITED) (AUDITED) ----------- ----------- ----------- ----------- Net Asset Value, Beginning of Period $9.98 $9.83 $9.35 $9.81 Income from investment operations: Net investment income (loss) 0.23 0.44 0.05 0.14 Net realized and unrealized gains (losses) on securities (0.12) 0.15 (1.04) 0.09 ----------- ----------- ----------- ----------- Total income from investment operations 0.11 0.59 (0.99) 0.23 Less Distributions: Dividends from net investment income 0.23 0.44 -- 0.14 Dividends in excess of net investment income -- -- -- -- Distributions from capital gains -- -- -- 0.55 ----------- ----------- ----------- ----------- Total Distributions 0.23 0.44 -- 0.69 ----------- ----------- ----------- ----------- Net Asset Value, End of Period $9.86 $9.98 $8.36 $9.35 =========== =========== =========== =========== Total Return * 1.14% 6.13% -10.59% 2.43% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period $65,496,554 $64,765,252 $77,825,849 $88,679,133 Ratio of expenses to average net assets 0.5% 0.8% 0.7% 1.2% Ratio of net income (loss) to average net assets 2.0% 4.4% 0.5% 1.4% Portfolio turnover rate 14.6% 57.5% 40.8% 51.7% VALUE FUND - CLASS R GROWTH FUND INTERNATIONAL FUND -------------------------- -------------------------- -------------------------- PERIOD YEAR PERIOD YEAR PERIOD YEAR ENDED ENDED ENDED ENDED ENDED ENDED 6/30/08 12/31/07 6/30/08 12/31/07 6/30/08 12/31/07 Per share outstanding for each period (UNAUDITED) (AUDITED) (UNAUDITED) (AUDITED) (UNAUDITED) (AUDITED) ---------- ---------- ----------- ----------- ----------- ----------- Net Asset Value, Beginning of Period $9.41 $9.86 $9.03 $7.65 $9.71 $9.95 Income from investment operations: Net investment income (loss) 0.05 0.15 (0.01) -- 0.06 0.09 Net realized and unrealized gains (losses) on securities (1.05) 0.10 (0.43) 1.38 (0.38) 0.98 ---------- ---------- ----------- ----------- ----------- ----------- Total income from investment operations (1.00) 0.25 (0.44) 1.38 (0.32) 1.07 Less Distributions: Dividends from net investment income -- 0.15 -- -- -- 0.09 Dividends in excess of net investment income -- -- -- -- -- -- Distributions from capital gains -- 0.55 -- -- -- 1.22 ---------- ---------- ----------- ----------- ----------- ----------- Total Distributions -- 0.70 -- -- -- 1.31 ---------- ---------- ----------- ----------- ----------- ----------- Net Asset Value, End of Period $8.41 $9.41 $8.59 $9.03 $9.39 $9.71 ========== ========== =========== =========== =========== =========== Total Return * -10.63% 2.59% -4.87% 18.04% -3.30% 11.06% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period $5,211,554 $5,421,569 $27,947,713 $29,243,601 $46,044,759 $47,619,384 Ratio of expenses to average net assets 0.6% 1.1% 0.7% 1.4% 0.8% 1.4% Ratio of net income (loss) to average net assets 0.6% 1.4% -0.1% -0.2% 0.6% 0.8% Portfolio turnover rate 40.8% 51.7% 36.5% 98.8% 28.3% 50.1%
* The period ended June 30, 2008 is not annualized but an aggregate total return for the period. Performance data current to the most recent month end and the annualized expense ratio may be obtained upon request by calling 800-346-2670. 42-43 ACTIVA Mutual Funds Semiannual Report spread This page intentionally left blank. This page intentionally left blank. Logo: Activa Mutual Funds Activa Mutual Funds 2905 Lucerne SE, Suite 200 Grand Rapids, Michigan 49546 (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. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable at this time. ITEM 6. SCHEDULE OF INVESTMENTS. Included as part of the shareholder report. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable to this registrant. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable to this registrant. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable to this registrant. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The Nominating Committee will consider nominees recommended by shareholders. Recommendations by shareholders can be made in writing to the Fund. ITEM 11. CONTROLS AND PROCEDURES. (a) The registrant's principal executive and principal financial officer, 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, 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 that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS ----------------- (a) File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated. (1) 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 at this time. (2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)), exactly as set forth below: Ex-99.CERT Attached hereto. (3) Any written solicitation to purchase securities under Rule 23c-1 under the Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons: Not applicable to this registrant. (b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act, provide the certifications required by Rule 30a-2(b) under the Act (17 CFR 270.30a-2(b)), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR 240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished pursuant to this paragraph will not be deemed "filed" for purposes of Section 18 of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference: 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 3, 2008 ------------------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ Allan D. Engel ---------------------------------------------- Allan D. Engel President, Principal Executive Officer and Principal Financial Officer Date September 3, 2008 ------------------------------------------------------------------- By (Signature and Title)* ---------------------------------------------- Date ------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature.