Lutheran Brotherhood Family of Funds – ‘N-30B-2’ for 4/30/95

As of:  Thursday, 6/29/95   ·   For:  4/30/95   ·   Accession #:  60945-95-7   ·   File #:  811-01467

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Periodic or Interim Report Mailed to Shareholders   —   Rule 30b-2
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: N-30B-2     Periodic or Interim Report Mailed to Shareholders     77±   373K 


-----------------------------------       
7 Boxes Centered Here         
-----------------------------------       
LUTHERAN BROTHERHOOD        
-----------------------------------       
FAMILY OF FUNDS         
-----------------------------------       

offering        
GROWTH        
INCOME        
STABILITY         
LOGO GOES HERE          

Semi-Annual Report          
April 30, 1995          

25 YEARS & GROWING          
LOGO GOES HERE          

LUTHERAN BROTHERHOOD SECURITIES CORP.         
LOGO GOES HERE          

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Picture Goes Here                                                               

Our Message To You                                    
Dear Shareholder:                                     

The following report discusses the performance of the Lutheran                  
Brotherhood Family of Funds for the six months ended April 30, 1995. In         
addition to reviewing the investment strategies for each mutual fund,           
the report covers recent market and economic conditions that may have           
affected your returns and summarizes each manager's outlook for the             
months to come.                                                                 

In the past six months, investors have experienced the positive side of         
market volatility. After struggling for most of 1994, stocks and bonds          
recently enjoyed strong rebounds in prices. While these market changes          
have been somewhat unusual, investors can generally expect some                 
fluctuation in their returns. Even professionals don't know exactly when        
the markets will switch gears, so it helps to have a long-term plan you         
can follow regardless of market conditions.                                     

Of course, you still want to invest at attractive prices. The Lutheran          
Brotherhood Family of Funds makes this easier through our Systematic            
Investment Plan. Through this plan, you can transfer a specific amount          
from your bank account to your Lutheran Brotherhood mutual fund account         
on a regular basis. This lets you use a principle called dollar-cost            
averaging. By investing the same amount at regular intervals, you'll buy        
more shares when prices are low and fewer shares when prices are high.          
Over time, this can reduce the average price you pay for each share.            

The Systematic Investment Plan is one of the many services introduced by        
Lutheran Brotherhood since it became the first fraternal benefit society        
in the U.S. to offer mutual funds 25 years ago. As we celebrate our             
silver anniversary, we have renewed our commitment to outstanding               
service and competitive returns. If you'd like more information on the          
Systematic Investment Plan or other services of the Lutheran Brotherhood        
Family of Funds, please call us toll free at 800-328-4552, or locally at        
612-339-8091.                                                                   

Sincerely,                                                                      

/s/ Goes Here                                                                   

Rolf F. Bjelland                                                                
President and Chairman                                                          
Lutheran Brotherhood Family of Funds                                            

7 Boxes Center Here               

25 YEARS & GROWING                
LOGO GOES HERE                

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Economic and Market Overview                         April 30, 1995             

In the last six months, stock and bond prices rose dramatically. This           
was due largely to signs of a slowing economy, which eased investors'           
worries about inflation and prompted a sharp decline in long-term               
interest rates. During the period, bond prices recovered much of the            
ground they lost last year, while stock prices hit new highs. This              
significantly improved returns for shareholders in the Lutheran                 
Brotherhood Family of Funds.                                                    

New Optimism About Inflation                                                    

As the period began last November, the Federal Reserve Board boosted            
short-term interest rates by 75 basis points. This increase, the largest        
of six in 1994, raised investors' hopes that the Fed would curb                 
inflation and keep the economy growing. As investor optimism improved,          
bond prices started to rise -- providing strong gains for bond fund             
investors.                                                                      

As bond prices rose, bond yields fell. This made stocks more appealing          
to investors and enhanced the prospective profits of many companies.            
With further strength in corporate earnings, stock prices also began to         
rally.                                                                          

The pace of these rallies accelerated in the first part of 1995. In             
February, the Fed raised short-term rates another 50 basis points. At           
the same time, it became increasingly clear that the economy was                
slowing. Although short-term interest rates rose through the beginning          
of April, long-term rates continued to fall. This pushed stock and bond         
prices significantly higher.                                                    

By the end of April, the Dow Jones Industrial Average stood at 4316, up         
10.6% from six months before. Meanwhile, rising bond prices pushed the          
yields on 30-year Treasury bonds down to 7%, from a high of 8.2% in             
October of 1994.                                                                

The Road Ahead                                                                  

While inflation may rise briefly in the short term, we expect the annual        
rate of inflation to average about 3.5% for the rest of this year. There        
are now many signs of moderation in economic growth. During the first           
quarter of 1995, the gross domestic product (GDP) increased at an annual        
rate of 2.7%, compared to 5.1% in the last quarter of 1994.                     

While economic growth may slow significantly, it does not seem headed           
for recession. Consumers still have money to spend, which should provide        
further stimulation and continued growth.                                       

Although stock and bond prices are unlikely to continue rising as               
sharply as in recent months, they should continue to improve. Further           
restraint in the economy and inflation could push long-term interest            
rates lower and bond prices higher during the year. While corporate             
earnings may be less robust, they should continue to grow for some time.        
This could help stock prices reach new highs in the months to come.             

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Picture Goes Here                                                               

Lutheran Brotherhood Opportunity Growth Fund                  
Portfolio Manager's Review                                    

Michael A. Binger is a Chartered Financial Analyst and was named                
portfolio manager for the LB Opportunity Growth Fund in October 1994. He        
has been with Lutheran Brotherhood since 1987. Prior to his current             
appointment, he served as portfolio manager for LB's Convertible                
Securities Portfolio.                                                           

Fund Objective: To seek long-term growth of capital by investing in             
small-company stocks.                                                           

In the recent stock rally, technology stocks enjoyed the biggest gains -        
- especially computer and electronics-related issues. By investing              
heavily in the technology sector, and choosing top performers, the LB           
Opportunity Growth Fund delivered strong returns that outpaced other            
funds in its class.                                                             

For the six months ended April 30, 1995, the Fund had a total return            
(based on NAV) of 5.67%. That compares to a return of 5.32% for the             
average small-company growth funds tracked by Lipper Analytical                 
Services, and 5.38% for the Russell 2000 Index.                                 

Focus on Technology                                                             

During the period, we introduced computer software and networking stocks        
to the portfolio. This included stocks such as Sierra Online,                   
Macromedia, Alantec and Madge, N.V. A few of these stocks doubled their         
prices during the period, raising the combined weighting of the Fund's          
computer software and office equipment sectors to 19%.                          

In addition, we increased the Fund's commitment to drug and health care         
stocks from 7% to 11%. Although this group had rebounded significantly          
from the losses of 1994, we found many medical products and health              
services firms whose exceptional earnings potential made them attractive        
investments for the Fund. Among the stocks we added were Health South           
Rehabilitation, Puritan Bennett, EP Technologies, and Tecnol Medical            
Products. This group also performed well, with the exception of Cima            
Labs, a manufacturer of drug delivery systems.                                  

To make these new purchases, we took profits in holdings that had               
experienced significant price gains. These included Callaway Golf and           
Cobra Golf in the leisure sector and CUC International, Envoy, Sun Guard        
Data and Fiserv in the business services group. We also eliminated most         
holdings in the restaurant group, as well as several auto and chemical          
stocks. We felt there were better opportunities in sectors whose                
earnings were not as closely tied to the economy.                               

Small Company Outlook is Bright                                                 

For most of the period, large-company stocks gained more in price than          
small-company issues. Still concerned about the economy, investors              
appeared to prefer the higher liquidity of large-company stocks. As a           
result, the prices of small company stocks are still quite attractive --        
especially given the higher earnings potential for small companies as a         
whole.                                                                          

We believe the earnings potential is strong for stocks in the LB                
Opportunity Growth Fund. Given the positive outlook for technology,             
business services and health care issues, we expect to maintain                 
substantial investments in those groups. In addition, we will look for          
new opportunities in select retail firms that offer specialty or niche          
products. As the economy slows and businesses look forward to the next          
expansion, we may also increase the Fund's investments in capital goods         
stocks and other industrial issues.                                             

Chart Goes Here                                                                 

Growth of $10,000                   January 31, 1993 - April 30, 1995           
LB Opportunity Growth Fund                                                      
Annualized Total Returns*                       Period Ending 4/30/95           
---------------------------------------------------------------------           
        Since Fund
Based on                           Inception -- 1/8/93         1 Year           
---------------------------------------------------------------------           
Net Asset Value                          13.85%                13.47%           
Public Offering Price                    11.36%                 7.77%           
$14,000                                                                         
13,000                                                                        
12,000                                                                        
11,000                                                                        
10,000                                                                        
9,000                                                                       
Russell 2000     LB Opportunity        Lipper Average         
$12,079          Growth Fund           Small Company          
     $12,481               Stock Funds
                       $12,050
     1993                   1994                        1995

A Note About Performance                                                        

As you compare performance, please note that the LB Opportunity Growth          
Fund's performance reflects the maximum 5% sales charge. The performance        
of the index does not reflect any such charges. If you were to purchase         
any of the individual stocks represented in this index, any sales               
charges you would pay would reduce your total return as well.                   

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Picture Goes Here                                                               

Lutheran Brotherhood Fund                                 
Portfolio Manager's Review                                

James M. Walline is a Chartered Financial Analyst and portfolio manager         
for the LB Fund. He is a vice president of Lutheran Brotherhood and has         
been with Lutheran Brotherhood Research since its inception in 1970.            
Fund Objective: To seek growth of capital and income by investing in the        
stocks of leading companies.                                                    

As stock prices rose in recent months, we made significant new                  
investments in technology stocks -- the undisputed leaders of the market        
rally. Strong gains by top-performing stocks in this sector helped the          
LB Fund produce a total return (based on NAV) of 5.93% for the six              
months ended April 30, 1995.                                                    

During the period, an unexpectedly sharp decline in long-term interest          
rates boosted returns for interest-sensitive stocks in the financial            
services and utilities sectors. At the same time, lower interest rates          
and oil prices improved the gains for energy stocks. Because we placed          
less emphasis on these groups, the Fund lagged the S&P 500 Index, which         
returned 10.41% for the period, as well as the average growth and income        
funds tracked by Lipper Analytical Services, which returned 7.66%.              

Highlighting Industry Leaders                                                   

In choosing technology stocks, we focused on high-quality communication         
and computer companies like Motorola, Intel and Microsoft that are the          
leaders in their industry. Because the earnings growth of industry              
leaders tends to be more reliable, this strategy can help stabilize the         
Fund's returns as we take advantage of special market opportunities.            

We used the same approach in adding consumer staples stocks to the              
portfolio. Among our most significant purchases in this sector was Sara         
Lee. Like other consumer staples stocks, whose earnings can continue to         
grow in a weaker economy, we expect Sara Lee to perform well as the             
economy slows. In addition, Sara Lee enjoys a strong market position            
overseas.                                                                       

During the period we increased the Fund's technology holdings from 13%          
of the portfolio to 24% and boosted the representation of consumer              
staples stocks from 8% to 12%. Within the consumer staples group, we            
increased the Fund's allocation to health care stocks from 5% of the            
portfolio to 11% -- with purchases of drug stocks like Abbott                   
Laboratories, Merck and Schering-Plough.                                        

At the same time, we reduced the Fund's investments in industries where         
company earnings tend to depend more on a growing economy, or where             
company earnings were not otherwise reliable. This eliminated the Fund's        
positions in building, mining, paper, publishing and railroad stocks.           

Future Opportunities                                                            

We believe the Fund remains well-positioned for the months ahead. As the        
economy slows, investors will become increasingly interested in                 
companies with dependable earnings growth. This should be of special            
benefit to the Fund's holdings in the consumer staples and technology           
sectors.                                                                        

In the months to come, we will start to look for opportunities to invest        
in consumer cyclical issues -- such as retailing, housing, banking and          
auto stocks. The prices of many of these issues have become quite               
attractive and could rebound strongly once investors become less worried        
about the economy. We will also keep an eye on financial stocks, which          
should benefit from a period of lower interest rates. In selecting              
investments from these areas, we will continue to emphasize industry            
leaders that can help stabilize the Fund's returns.                             

Chart Goes Here                                                                 

Growth of $10,000                      April 30, 1985 - April 30, 1995          
LB Fund                                                                         
Annualized Total Returns*                        Period Ending 4/30/95          
----------------------------------------------------------------------          
Based on                     10 Years        5 Years          1 Year            
----------------------------------------------------------------------          
Net Asset Value               10.84%         11.03%           10.95%            
Public Offering Price         10.27%          9.90%            5.42%            

$40,000                                                                         
35,000                                                                        
30,000                                                                        
25,000                                                                        
20,000                                                                        
15,000                                                                        
10,000                                                                        
5,000                                                                       
Lipper Average       LB Fund $26,591        S & P 500 $39,676   
Growth & Income                                                 
Funds $32,949                                                   
1985  1986  1987  1988  1989  1990  1991  1992  1993  1994  1995    

A Note About Performance                                                        

As you compare performance, please note that the LB Fund's performance          
reflects the maximum 5% sales charge. The performance of the index does         
not reflect any such charges. If you were to purchase any of the                
individual stocks represented in this index, any sales charges you would        
pay would reduce your total return as well.                                     

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Picture Goes Here                                                               

Lutheran Brotherhood High Yield Fund                          
Portfolio Manager's Review                                    

Thomas N. Haag is a Chartered Financial Analyst and portfolio manager           
for the LB High Yield Fund. He has managed the Fund since January 1992.         

Fund Objective: To seek high current income and growth of capital by            
investing primarily in high-yielding ("junk") corporate bonds.                  

During the recent rally in bond prices, the LB High Yield Fund had              
significant investments in longer-term issues. These issues outperformed        
other bonds in the first part of 1995. Earlier in the period, however,          
longer-term issues had underperformed the market. This caused the Fund          
to lag its market benchmark, and other funds in its class, for the six          
months ended April 30, 1995. For the period, the Fund had a total return        
(based on NAV) of 4.82%. That compares to returns of 8.08% and 5.73%,           
respectively, for the Lehman Brothers High-Yield Index and the average          
high-yield bond funds tracked by Lipper Analytical Services.                    

Maximizing Income and Growth                                                    

As the period started, about 20% of the Fund was invested in deferred-          
interest issues such as zero-coupon bonds. Many of these bonds have been        
issued by broadcasting and telecommunications firms, whose potential for        
growth has been strong. Because zero-coupon bonds behave like longer-           
maturity issues, they can provide the Fund with attractive yields and           
capital growth over time.                                                       

As interest rates and bond prices stabilized at the end of last year,           
the prices of deferred interest investments continued to fall. Once             
interest rates started to decline, and bond prices rebounded, these             
investments outdistanced the market and delivered healthy price gains           
for the Fund.                                                                   

During the period we made minor changes to industry groups in the               
portfolio that could make the Fund more defensive in a slowing economy.         
We sold some of the Fund's investments in "cyclical" industries, such as        
paper and chemicals, whose earnings tend to track the economy, and              
bought issues in the supermarket and health care sectors, whose earnings        
can grow even when the economy is weak. We continued to hold sizable            
investments in the broadcasting and telecommunications groups, whose            
earnings growth also depends less on the economy.                               

Making the Fund More Defensive                                                  

We may become even more defensive in the months ahead. Although a               
slowing economy should mean additional declines in interest rates, we           
think most of the drop in rates is probably behind us. Given the speed          
with which rates have come down, we could even see a temporary rise in          
rates sometime this year.                                                       

Besides stressing bonds in defensive industries, we've reduced the              
Fund's holdings in zero-coupon issues and may take other measures to            
shorten the average maturity of the Fund's investments. We also expect          
to focus more on issues with higher credit ratings. These steps should          
help stabilize the Fund's returns if rates rise and bond prices weaken.         

Chart Goes Here                                                                 

Growth of $10,000                        April 30, 1987 - April 30, 1995        
LB High Yield Fund                                                              
Annualized Total Returns*                          Period Ending 4/30/95        
------------------------------------------------------------------------        
Since Fund            
Inception             
Based on                       4/3/87         5 Years            1 Year         
------------------------------------------------------------------------        
Net Asset Value                9.15%          14.48%             5.05%          
Public Offering Price          8.46%          13.30%            -0.24%          

$23,000                                                                         
21,000                                                                        
19,000                                                                        
17,000                                                                        
15,000                                                                        
13,000                                                                        
11,000                                                                        
9,000                                                                       
Lehman High Yield       LB High Yield Fund        Lipper Average    
Index $22,213           $19,662                   High Yield        
                                             Funds $19,383
1987    1988    1989    1990    1991    1992    1993    1994    1995      

A Note About Performance                                                        

As you compare performance, please note that the LB High Yield Fund's           
performance reflects the maximum 5% sales charge. The performance of the        
index does not reflect any such charges. If you were to purchase any of         
the individual bonds represented in this index, any sales charges you           
would pay would reduce your total return as well.                               

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Picture Goes Here                                                               

Lutheran Brotherhood Income Fund                                
Portfolio Manager's Review                                      

Charles E. Heeren, a vice president of Lutheran Brotherhood , is a              
Chartered Financial Analyst and portfolio manager for                           
the LB Income Fund. He has managed the Fund since January 1986.                 

Fund Objective: To seek high current income while preserving principal          
by investing in investment-grade bonds and other income-producing               
securities.                                                                     

In the last six months the LB Income Fund enjoyed strong gains from its         
investments in longer-maturity bonds. As bond prices rallied, the prices        
of longer-term issues generally rose more than the prices of shorter-           
term issues. By investing more heavily in longer-term securities, the           
Fund outperformed other funds in its class, as well as the bond market          
as a whole.                                                                     

For the six months ended April 30, 1995, the Fund had a total return            
(based on NAV) of 7.67%. That compares with a return of 6.70% for the           
average high-quality corporate bond funds tracked by Lipper Analytical          
Services and 7.01% for the Lehman Aggregate Bond Index.                         

A Barbelled Maturity Structure                                                  

Expecting the Treasury yield curve to flatten, we'd arranged the                
maturities of the Fund's investments in a "barbell" type of structure           
before the period began. Using this structure, we made sizable                  
investments in asset-backed securities that matured in one to three             
years and balanced those with large investments in 30-year corporate and        
Treasury bonds. At the same time, we reduced the Fund's holdings in             
bonds with maturities of five to 10 years. This helped us protect the           
value of the Fund while increasing the potential for income and capital         
gains. We extended this potential by raising the average maturity of the        
Fund's investments from 161+4 years to 18 years.                                

The Fund also benefited from heavier investments in corporate bonds.            
During the period stronger earnings and cash flow improved the credit           
quality of corporate issues. At the same time, the supply of new                
corporate issues declined. As the market rallied, these factors helped          
corporate bond prices rise more quickly than the prices of Treasury             
bonds.                                                                          

We further diversified the Fund's corporate holdings by adding bonds            
issued by chemical, health care, food, natural gas, retail and business         
services firms. For the most part we shifted into groups that tend to be        
less affected by a slowing economy. In addition, we reduced the Fund's          
investments in areas where we felt bonds might become overvalued, such          
as financial services and computer sectors.                                     

Making the Most of Lower Interest Rates                                         

Although a slowing economy may prompt further interest rate declines, we        
do not expect rates to fall as sharply as they have in recent months. We        
may, in fact, start to see rates stabilize or hit bottom. As a result,          
we expect to use a more defensive investment strategy in the months             
ahead.                                                                          

Since an upturn in rates would be especially harmful to the prices of           
longer-term issues, we have started to shorten the average maturity of          
the Fund's investments by taking profits in top-performing bonds and            
putting the proceeds in cash. In the meantime, lower interest rates             
should prompt homeowners to refinance their mortgages. In anticipation          
of this, we're selling some of the Fund's mortgage-backed securities to         
protect its yield. We believe the Fund's corporate holdings are now             
well-positioned for slower economic growth, but will continue to watch          
for new investment opportunities that might arise.                              

Chart Goes Here                                                                 

Growth of $10,000                     April 30, 1985 - April 30, 1995           
LB Income Fund                                                                  
Annualized Total Returns*                       Period Ending 4/30/95           
---------------------------------------------------------------------           
Based on                    10 Years         5 Years           1 Year           
---------------------------------------------------------------------           
Net Asset Value              8.98%            8.83%             6.43%           
Public Offering Price        8.42%            7.72%             1.12%           

$30,000                                                                         
27,000                                                                        
24,000                                                                        
21,000                                                                        
18,000                                                                        
15,000                                                                        
12,000                                                                        
9,000                                                                       
Lehman Aggregate         LB Income Fund        Lipper Average     
Bond Index $26,378       $22,453               Corporate Bond     
                                         Funds $24,485
1985  1986  1987  1988  1989  1990  1991  1992  1993  1994  1995          

A Note About Performance                                                        

As you compare performance, please note that the LB Income Fund's               
performance reflects the maximum 5% sales charge. The performance of the        
index does not reflect any such charges. If you were to purchase any of         
the individual bonds represented in this index, any sales charges you           
would pay would reduce your total return as well.                               

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Picture Goes Here                                                               

Lutheran Brotherhood Municipal Bond Fund                          
Portfolio Manager's Review                                        

Janet I. Grangaard is a Chartered Financial Analyst and was named               
portfolio manager for the LB Municipal Bond Fund in January 1994. She           
has been with Lutheran Brotherhood since 1988. Prior to her appointment         
as portfolio manager, she served as associate portfolio manager for the         
Fund.                                                                           

Fund Objective: To seek high current income that is exempt from federal         
income tax by investing in municipal bonds.                                     

When bond prices rise, as they have, the price gains tend to be greatest        
for longer-maturity issues. The municipal bond market is no exception.          
By investing heavily in longer-term securities, the LB Municipal Bond           
Fund delivered superior returns that outdistanced municipal bonds as a          
whole, as well as other funds in its class.                                     

For the six months ended April 30, 1995, the Fund had a total return            
(based on NAV) of 7.97%. That compares with returns of 7.57% for the            
Lehman Municipal Bond Index and 7.31% for an average of the municipal           
bond funds tracked by Lipper Analytical Services.                               

Adjusting to Smaller Supplies                                                   

In January of 1995, we had many bonds that were called in by issuers who        
had refinanced at lower interest rates. We reinvested the proceeds in           
issues with maturities of 15 to 30 years. To minimize the extra price           
risk that comes with longer-term bonds, we emphasized issues with               
exceptional credit quality.                                                     

During most of the period, the supply of new municipal bonds continued          
to shrink. Where demand remained strong, there was extra upward pressure        
on bond prices and extra downward pressure on yields. To maximize the           
Fund's yield as interest rates fell, we sold bonds in states where new          
issues declined sharply against strong demand and bought bonds in states        
with larger supplies.                                                           

We also changed the types of bonds in the Fund's portfolio. With the            
federal government giving state and local authorities more                      
responsibility and fewer resources, we have favored bonds funding high-         
quality, revenue-producing projects that can stand on their own. Because        
of this, we increased the Fund's investments in bonds that fund water           
and sewer projects and surface transportation, while decreasing                 
investments in bonds that fund health care facilities.                          

Managing Uncertainty                                                            

It's not clear where municipal bond prices are headed. A slowing economy        
could result in additional declines in interest rates and higher bond           
prices. These lower interest rates could stimulate the economy, causing         
rates to stabilize or even rise.                                                

There are two powerful yet opposing forces that affect the municipal            
bond market in this environment -- the shrinkage of the outstanding             
supply of municipal bonds and talk of changes to the federal tax code.          
If municipal bonds remain popular with investors, the shrinkage of the          
market would benefit existing bond investors in the form of higher              
prices. While tax reform is more of an issue for the 1997 Congress,             
we'll track which proposals gain favor in Washington and be prepared to         
respond accordingly.                                                            

With its focus on high-quality issues and revenue bonds, we believe the         
LB Municipal Bond Fund is well-positioned to cope with these                    
uncertainties. If municipal bond prices appear to be weakening, we may          
reduce the Fund's emphasis on longer-maturity investments to mitigate           
the risks associated with higher interest rates.                                

Chart Goes Here                                                                 

Growth of $10,000                     April 30, 1985 - April 30, 1995           
LB Municipal Bond Fund                                                          
Annualized Total Returns*                       Period Ending 4/30/95           
---------------------------------------------------------------------           
Based on                    10 Years         5 Years         1 Year             
---------------------------------------------------------------------           
Net Asset Value              9.47%            8.49%          6.83%              
Public Offering Price        8.91%            7.38%          1.50%              

$25,000                                                                         
23,000                                                                        
21,000                                                                        
19,000                                                                        
17,000                                                                        
15,000                                                                        
13,000                                                                        
11,000                                                                        
9,000                                                                       
Lehman Municipal      LB Municipal Bond         Lipper Average        
Bond Index $24,575    Fund $23,486              General Municipal     
                                    Bond Funds
                                 $23,505
1985  1986  1987  1988  1989  1990  1991  1992  1993  1994  1995        

A Note About Performance                                                        

As you compare performance, please note that the LB Municipal Bond              
Fund's performance reflects the maximum 5% sales charge. The performance        
of the index does not reflect any such charges. If you were to purchase         
any of the individual bonds represented in this index, any sales charges        
you would pay would reduce your total return as well.                           

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Picture Goes Here                                                               

Lutheran Brotherhood Money Market Fund                          
Portfolio Manager's Review                                      

Gail R. Onan, assistant vice president of Lutheran Brotherhood Research         
Corp., was named portfolio manager for the LB Money Market Fund in              
January 1994. She has been with Lutheran Brotherhood Research since             
1986. Prior to her appointment as manager of the Fund, she served as            
associate manager for the Fund.                                                 

Fund Objective: To seek current income with stability of principal by           
investing in high-quality, short-term debt.**                                   

The money market experienced dramatic changes in recent months. After           
rising sharply for most of 1994, yields weathered two more hikes in             
interest rates by the Federal Reserve Board's Open Market Committee (the        
Fed), plateaued and then began to decline. By the end of April 1995, the        
overnight Fed fund rate was about half a percent higher than it was six         
months before.                                                                  

Throughout this time, we adjusted the maturities of investments in the          
LB Money Market Fund to make the most of these changes. This helped the         
Fund earn a total return of 2.40% for the six months ended April 30,            
1995.                                                                           

Portfolio Strategy                                                              

As the period started, the Fund's investments had an average maturity of        
40 days. After the Fed raised short-term rates in November, we extended         
the average to 44 days. This was longer than the average maturity for           
other money market funds and provided the Fund with stronger yields.            

In January, as it appeared the Fed would boost rates again, we shortened        
the average maturity to be able to invest more quickly at the higher            
rates. As rates stabilized at higher levels, we lengthened the average          
maturity once again and picked up greater yields. These adjustments were        
made easier by staggering the Fund's investments among different                
maturity dates.                                                                 

During the period we looked for securities that were available in strong        
supply and offered attractive yields. Because of its greater                    
availability, we increased investments in commercial paper from 73% of          
the Fund's assets to 84%. In doing so, we further diversified the Fund's        
investments in this sector by adding securities from a broader range of         
issuers.                                                                        

Looking Ahead                                                                   

While there are signs that the economy is slowing, inflation remains a          
concern. If the economy does not weaken as expected, short-term rates           
may start to climb again. Historically, a larger supply of new issues           
has often put upward pressure on rates in last few months of the year.          
While we expect to keep the Fund's average maturity near 40 to 45 days,         
we're focusing on maturities of four to six months. This should give us         
money to invest at better yields in the fall, if interest rates do rise         
at that time.                                                                   

If the economy continues to slow, interest rates should fall to lower           
levels. In that case, we would want to lengthen the Fund's average              
maturity and lock in higher yields. At this point it's not clear which          
way rates will go. By continuing to stagger the Fund's maturity dates,          
we hope to respond quickly to any change in rate direction.                     

Annualized Total Returns**                  
Period Ending 4/30/95                   
10 Years                    5 Years                       1 Year                
5.49%                        4.06%                        4.20%                 

Footnotes                                                                       

*The annualized total return reflects the change in share price, the        
reinvestment of all dividends and capital gains, and the effect of              
compounding. Since performance varies, the annualized total return,             
which assumes a steady rate of growth, differs from the Fund's actual           
total return for the years indicated. POP returns have been adjusted for        
the maximum 5% sales charge. NAV returns do not include a sales charge.         
All returns represent past performance. The value of an investment              
fluctuates so that shares, when redeemed, may be worth more or less than        
the original investment.                                                        

**Investments in the Money Market Fund are neither guaranteed nor             
insured by the U.S. Government and there is no assurance that the Fund          
will maintain a stable net asset value.                                         

This report must be preceded or accompanied by a prospectus of the              
Lutheran Botherhood Family of Funds.                                            

7 Boxes Center Here               

                                                                [Download Table]

     Lutheran Brotherhood Opportunity Growth Fund                         
              Portfolio of Investments                                    
                  April 30, 1995                                          
                    (Unaudited)                                           
Shares                                       Value                        
------                                  -------------                     
                                                                          
        Common                                                            
        Stocks - 90.9% (a)                                                
        Bank & Finance - 0.7%                                             
 27,250 Mutual Risk Management, Ltd.        $837,938                      
                                        -------------                     
        Broadcasting - 1.8%                                               
 29,600 Broadcasting Partners, Inc.          599,400 (b)                  
 80,000 Granite Broadcasting Corp.           560,000 (b)                  
 38,400 Heftel Broadcasting Corp.            432,000 (b)                  
 32,000 Saga Communications, Inc.            568,000 (b)                  
                                        -------------                     
                                           2,159,400                      
                                        -------------                     
        Building Products &                                               
        Materials - 1.0%                                                  
 46,400 Fastenal Co.                       1,229,600                      
                                        -------------                     
        Computer Software - 9.1%                                          
  6,500 CBT Group, PLC ADS                   172,250 (b)                  
  4,100 Expert Software, Inc.                 60,475 (b)                  
 38,700 Hummingbird Communications           909,450 (b)                  
 45,000 Hyperion Software Corp.            1,935,000 (b)                  
 52,400 Macromedia, Inc.                   1,755,400 (b)                  
  8,100 Open Environment Corp.               141,750 (b)                  
 59,200 Sierra On-Line, Inc.               1,117,400 (b)                  
197,000 Spectrum Holobyte, Inc.            3,004,250 (b)                  
206,600 Viasoft, Inc.                      2,027,262 (b)                  
                                        -------------                     
                                          11,123,237                      
                                        -------------                     
        Computers &                                                       
        Office Equipment - 10.2%                                          
 77,500 Avid Technology, Inc.              3,124,219 (b)                  
200,000 Computer Network                                                  
          Technology Corp.                 1,775,000 (b)                  
 63,400 Exabyte Corp.                        800,425 (b)                  
100,200 Madge, N.V.                        2,755,500                      
 78,200 Micro Warehouse, Inc.              2,737,000 (b)                  
 20,200 PSC, Inc.                            262,600 (b)                  
 54,600 Xylogics, Inc.                     1,105,650 (b,c)                
                                        -------------                     
                                          12,560,394                      
                                        -------------                     
        Drugs & Health Care - 11.0%                                       
 99,000 Centocor, Inc.                     1,398,375 (b)                  
100,000 Cima Labs, Inc.                      487,500 (b)                  
 88,000 EP Technologies, Inc.                825,000 (b)                  
 95,500 Maxxim Medical, Inc.               1,325,062 (b)                  
 90,000 Puritan-Bennett Corp.              2,216,250                      
 49,000 Stryker Corp.                      2,211,125                      
 50,000 Sybron Corp.                       1,856,250 (b)                  
 99,600 Tecnol Medical Products, Inc.      1,855,050 (b)                  
 41,200 Watson Pharmaceuticals, Inc.       1,282,350 (b)                  
                                        -------------                     
                                          13,456,962                      
                                        -------------                     
        Electronics - 8.8%                                                
 21,700 Adaptec, Inc.                        694,400 (b)                  
 89,200 Aetrium, Inc.                      1,427,200 (b)                  
  1,600 Anadigics, Inc.                       21,400 (b)                  
 20,000 Diamond Multimedia                                                
          Systems, Inc.                      400,000 (b)                  
 18,200 GaSonics International Corp.         418,600 (b)                  
 56,500 LAM Research Corp.                 2,853,250 (b)                  
 80,000 Quality Semiconductor, Inc.          900,000 (b)                  
103,800 Read-Rite Corp.                    2,205,750 (b)                  
 89,100 Unitrode Corp.                     1,848,825 (b)                  
                                        -------------                     
                                          10,769,425                      
                                        -------------                     
        Healthcare Management - 10.0%                                     
 60,200 Abbey Healthcare Group, Inc.       2,392,950 (b)                  
 80,100 Coventry Corp.                     1,882,350 (b)                  
 41,000 Healthcare Compare Corp.           1,232,562 (b)                  
150,000 HEALTHSOUTH                                                       
          Rehabilitation Corp.             2,962,500 (b)                  
 78,300 Integrated Health Services, Inc.   2,711,138                      
 70,500 Quantum Health Resources, Inc.     1,145,625 (b)                  
                                        -------------                     
                                          12,327,125                      
                                        -------------                     
        Hospital Management - 0.6%                                        
158,000 Physician Computer                                                
          Network, Inc.                      711,000 (b)                  
                                        -------------                     
        Industrial - 2.1%                                                 
170,300 Union Switch & Signal, Inc.        2,618,362 (b)                  
                                        -------------                     
        Leisure & Entertainment - 3.5%                                    
 80,000 First Team Sports                  1,610,000 (b)                  
 85,000 Movie Gallery, Inc.                2,656,250 (b)                  
                                        -------------                     
                                           4,266,250                      
                                        -------------                     
        Pollution Control - 2.7%                                          
 90,400 IMCO Recycling, Inc.               1,423,800                      
121,500 U.S. Filter Corp.                  1,928,813 (b)                  
                                        -------------                     
                                           3,352,613                      
                                        -------------                     
        Restaurants - 1.1%                                                
104,000 Quality Dining, Inc.               1,391,000 (b)                  
                                        -------------                     
        Retail - 10.4%                                                    
 84,300 American Eagle Outfitters          1,812,450 (b)                  
 52,500 Department 56, Inc.                1,942,500 (b)                  
 92,200 General Nutrition Companies        2,293,475 (b)                  
 86,300 Gymboree Corp.                     2,028,050 (b)                  
 90,200 Sports Authority, Inc.             1,601,050 (b)                  
112,000 Strouds, Inc.                        952,000 (b)                  
 75,000 Sunglass Hut International         2,151,563 (b)                  
                                        -------------                     
                                          12,781,088                      
                                        -------------                     
        Services - 8.6%                                                   
 90,000 Acxiom Corp.                       1,563,750 (b)                  
 16,200 Cadmus Communications, Inc.          294,638 (c)                  
 44,000 Cambridge Technology                                              
          Partners, Inc.                   1,512,500 (b)                  
 20,400 Career Horizons, Inc.                479,400 (b)                  
 39,100 Catalina Marketing Corp.           1,837,700 (b)                  
 40,300 Gartner Group, Inc                 1,667,412 (b)                  
 76,000 Norrell Corp.                      1,824,000                      
 28,300 Paychex, Inc.                      1,347,788                      
                                        -------------                     
                                          10,527,188                      
                                        -------------                     
        Telephone &                                                       
        Telecommunications - 9.3%                                         
 88,800 Gilat Satellite Networks, Ltd.     1,431,900                      
 34,350 Glenayre Technologies, Inc.        2,112,525 (b)                  
 96,300 Metrocall, Inc.                    1,709,325 (b)                  
122,500 Netmanage, Inc.                    2,235,625 (b)                  
133,300 Network Peripherals, Inc.          2,549,362 (b)                  
 60,000 Summa Four, Inc.                   1,395,000 (b)                  
                                        -------------                     
                                          11,433,737                      
                                        -------------                     
        Total Common Stocks                                               
          (cost $99,794,206)             111,545,319                      
                                        -------------                     
        Short-Term                                                        
        Securities - 9.1% (a)                                             
        Commerical Paper                                                  
 Principal                                                                
   Amount                                                                 
------------                                                              
$5,600,000 Cargill, Inc., 5.92%,                                          
             due 5/1/1995                     5,600,000                   
 2,523,000 Delaware Funding Corp.,                                        
             5.98%, due 5/8/1995              2,520,066                   
 1,082,000 Hewlett Packard Corp., 6.0%,                                   
             due 5/16/1995                    1,079,295                   
 2,000,000 Spiegel Funding Corp., 5.98%,                                  
              due 5/18/1995                    1,994,352                  
                                            -------------                 
            Total Short-Term Securities                                   
              (at amortized cost)             11,193,713                  
                                            -------------                 
            Total Investments                                             
              (cost $110,987,919)           $122,739,032 (d)              
                                            =============                 

See accompanying notes to portfolio of investments.                       

Notes to Portfolio of Investments:                                        
(a) The categories of investments are shown as a percentage of total      
investments of the Lutheran Brotherhood Opportunity Growth Fund.          
(b) Currently non-income producing.                                       
(c) Includes stock rights that automatically traded with the stock and had
no separate value at April 30, 1995.                                      
(d) At April 30, 1995, the aggregate cost of securities for federal income
tax purposes was $110,987,919 and the net unrealized appreciation of      
investments based on that cost was $11,751,113 which is comprised of      
$16,567,487 aggregregate gross unrealized depreciation.                   

The accompanying notes are an integral part of the financial statements.  

                                                                [Download Table]

           Lutheran Brotherhood Fund                                      
            Portfolio of Investments                                      
                April 30, 1995                                            
                  (Unaudited)                                             
Shares                                         Value                      
------                                     -------------                  
                                                                          
        COMMON                                                            
        STOCKS - 90.4% (a)                                                
        Automotive - 1.1%                                                 
150,000 General Motors Corp.                 $6,768,750                   
                                           -------------                  
        Bank & Finance - 10.8%                                            
100,000 American International                                            
          Group, Inc.                        10,675,000                   
 70,400 Bear Stearns Cos., Inc.               1,452,000                   
136,400 Equitable Companies, Inc.             3,239,500                   
 96,900 Federal National Mortgage                                         
          Association                         8,551,425                   
122,100 First Bank System, Inc.               4,945,050                   
126,200 First Interstate Bancorp.             9,701,625 (b)               
 30,500 Green Tree Financial Corp.            1,246,688                   
152,300 MBNA Corp.                            4,607,075                   
160,000 Morgan Stanley Group, Inc.           11,120,000                   
 78,600 Morgan (J.P.) and Co., Inc.           5,158,125                   
 26,500 PMI Group, Inc.                         987,125                   
150,000 Providian Corp.                       5,118,750                   
                                           -------------                  
                                             66,802,363                   
                                           -------------                  
        Broadcasting - 2.5%                                               
 54,000 CBS, Inc.                             3,462,750                   
618,700 Tele-Communications, Inc.            11,832,637 (c)               
                                           -------------                  
                                             15,295,387                   
                                           -------------                  
        Chemicals - 2.9%                                                  
220,000 Air Products & Chemicals, Inc.       11,082,500                   
100,000 Dow Chemical Co.                      6,950,000                   
                                           -------------                  
                                             18,032,500                   
                                           -------------                  
        Computer Software - 6.6%                                          
159,900 Adobe Systems, Inc.                   9,314,175                   
201,400 Autodesk, Inc.                        6,860,188                   
 70,800 Electronic Arts, Inc.                 1,628,400 (c)               
175,000 Microsoft Corp.                      14,328,125 (c)               
283,900 Oracle Systems Corp.                  8,658,950 (c)               
                                           -------------                  
                                             40,789,838                   
                                           -------------                  
        Computers &                                                       
        Office Equipment - 7.6%                                           
 80,000 Cabletron Systems, Inc.               3,800,000 (c)               
 73,600 General Motors Group, Class E         3,183,200                   
200,000 International Business Machines      18,950,000                   
140,000 Novell, Inc.                          3,045,000 (c)               
144,400 Silicon Graphics, Inc.                5,415,000 (c)               
100,000 Xerox Corp.                          12,312,500                   
                                           -------------                  
                                             46,705,700                   
                                           -------------                  
        Conglomerates - 0.1%                                              
 15,000 Allied Signal, Inc.                     594,375                   
                                           -------------                  
        Containers & Packaging - 1.8%                                     
256,900 Crown Cork and Seal Co., Inc.        10,982,475 (c)               
                                           -------------                  
        Drugs & Health Care - 11.0%                                       
457,000 Abbott Laboratories                  17,994,375                   
171,300 Amgen, Inc.                          12,451,369                   
390,000 Merck & Co., Inc.                    16,721,250                   
142,000 Schering-Plough Corp.                10,703,250 (b)               
150,000 Smithkline Beecham, PLC               5,831,250                   
 95,600 St. Jude Medical, Inc.                4,110,800                   
                                           -------------                  
                                             67,812,294                   
                                           -------------                  
        Electical Equipment - 1.8%                                        
200,000 General Electric Co.                 11,200,000                   
                                           -------------                  
        Electric Utilities - 1.0%                                         
294,600 Southern Co.                          6,076,125                   
                                           -------------                  
        Electronics - 6.8%                                                
150,000 Advanced Micro Devices, Inc.          5,400,000                   
200,000 Intel Corp.                          20,475,000                   
285,000 Motorola, Inc.                       16,209,375                   
                                           -------------                  
                                             42,084,375                   
                                           -------------                  
        Food & Beverage - 6.3%                                            
300,000 ConAgra, Inc.                         9,975,000                   
100,000 General Mills, Inc.                   6,100,000                   
174,500 Nabisco Holdings, Inc.                4,864,187                   
 44,500 Salomon, Inc.,                                                    
          (Snapple, Inc., ELKS)                 673,063                   
610,000 Sara Lee Corp.                       17,003,750 (b)               
                                           -------------                  
                                             38,616,000                   
                                           -------------                  
        Hospital Management - 0.4%                                        
 85,400 Manor Care, Inc.                      2,508,625                   
                                           -------------                  
        Household Products - 6.4%                                         
175,000 Colgate Palmolive Co.                12,293,750                   
140,800 Gillette Co.                         11,545,600                   
227,700 Procter & Gamble                     15,910,537                   
                                           -------------                  
                                             39,749,887                   
                                           -------------                  
        Machinery &                                                       
        Equipment - 0.6%                                                  
100,000 Ingersoll Rand Co.                    3,575,000 (b)               
                                           -------------                  
        Medical Services - 0.6%                                           
106,400 United Healthcare Corp.               3,857,000                   
                                           -------------                  
        Oil & Oil Service - 7.3%                                          
236,300 Amoco Corp.                          15,507,187                   
225,000 Chevron Corp.                        10,659,375 (b)               
150,000 Halliburton Co.                       5,756,250                   
 75,000 Mobil Corp.                           7,115,625 (b)               
 50,000 Royal Dutch Petroleum Co.             6,200,000                   
                                           -------------                  
                                             45,238,437                   
                                           -------------                  
        Restaurants - 0.9%                                                
150,000 McDonald's Corp.                      5,250,000                   
                                           -------------                  
        Retail - 4.0%                                                     
166,400 Home Depot, Inc.                      6,947,200                   
 77,300 Office Depot, Inc.                    1,758,575 (c)               
660,000 Wal-Mart Stores, Inc.                15,675,000                   
                                           -------------                  
                                             24,380,775                   
                                           -------------                  
        Services - 3.6%                                                   
175,000 Automatic Data                                                    
        Processing, Inc.                     11,243,750                   
193,700 First Data Corp.                     10,895,625                   
                                           -------------                  
                                             22,139,375                   
                                           -------------                  
        Telephone &                                                       
        Telecommunications - 6.3%                                         
142,200 Ameritech Corp.                       6,399,000                   
235,000 AT&T Corp.                           11,926,250                   
 75,200 DSC Communications Corp.              2,782,400 (b,c)             
125,000 GTE Corp.                             4,265,625                   
155,000 Paging Network, Inc.                  4,262,500 (c)               
213,200 Southwestern Bell Corp.               9,407,450                   
                                           -------------                  
                                             39,043,225                   
                                           -------------                  
        Total Common Stocks                                               
        (cost $509,137,143)                 557,502,506                   
                                           -------------                  
 Principal                                                                
   Amount                                                                 
------------                                                              
            U.S. TREASURY - 0.3% (a)                                      
$2,000,000 U.S. Treasury Notes,                                           
             8.75%, Due 10/15/1997                                        
             (cost $2,035,342)                   2,092,500                
                                              -------------               

           SHORT-TERM                                                     
           SECURITIES - 9.3% (a)                                          
           Commercial Paper - 7.7%                                        
 2,100,000 Associates Corp. of                                            
             North America, 5.95%,                                        
             due 5/1/1995                        2,100,000                
 5,000,000 Ciesco, Inc., 5.95%,                                           
             due 5/18/1995                       4,985,951                
 5,000,000 Ciesco, Inc., 5.97%,                                           
             due 5/18/1995                       4,985,904                
 5,000,000 Enterprise Capital Funding,                                    
             5.97%, due 5/9/1995                 4,993,367                
 5,000,000 Great Lakes Chemical Corp.,                                    
           5.96%, due 5/24/1995                  4,980,961                
 9,800,000 Toys "R" Us, Inc., 5.92%,                                      
             due 5/15/1995                       9,777,438                
 5,800,000 United Parcel Service of                                       
           America, Inc., 5.92%,                                          
             due 5/3/1995                        5,798,092                
10,000,000 USAA Capital Corp., 5.92%                                      
            due 5/2/1995                         9,998,356                
                                              -------------               
                                                47,620,069                
                                              -------------               
           Government Agency - 1.6%                                       
 5,050,000 Federal Home Loan Bank,                                        
             5.85%, due 5/4/1995                 5,047,538                
 4,450,000 Federal Home Loan Bank,                                        
             5.85%, due 5/5/1995                 4,447,108                
                                              -------------               
                                                 9,494,646                
                                              -------------               
           Total Short-Term Securities                                    
             (at amortized cost)                57,114,715                
                                              -------------               
           Total Investments                                              
             (cost $568,287,200)              $616,709,721                
                                              =============               

See accompanying notes to portfolio of investments.                       

Notes to Portfolio of Investments:                                        
(a) The categories of investments are shown as a percentage of total      
investments of the Lutheran Brotherhood Fund.                             
(b) Includes stock rights that automatically traded with the stock and had
no separate value at April 30, 1995.                                      
(c) Currently non-income producing.                                       
(d) At April 30, 1995, the aggregate cost of securities for federal income
tax purposes was $568,287,200 and the net unrealized appreciation of      
investments based on that cost was $48,422,521 which is comprised of      
$55,954,638 aggregate gross unrealized appreciation and $7,532,117        
aggregate gross unrealized depreciation.                                  

The accompanying notes are an integral part of the financial statements.  

                                                        [Enlarge/Download Table]

                               Lutheran Brotherhood High Yield Fund                                                 
                                    Portfolio of Investments                                                        
                                          April 30, 1995                                                            
                                            (Unaudited)                                                             

 Principal                                                                                Maturity                  
   Amount                                                                       Rate        Date        Value       
------------                                                                -------------------------------------   
                                                                                                                    
            CORPORATE BONDS - 76.5% (a)                                                                             
            Aerospace - 0.4%                                                                                        
 $2,100,000 Rohr, Inc., Sr. Notes                                                11.625%   5/15/2003  $2,194,500    
                                                                                                    -------------   
            Airlines - 0.8%                                                                                         
  4,500,000 U.S. Air, Inc., Sr. Secured Equipment Trust, Series 1993-A3          10.375%    3/1/2013   4,128,219    
            Automotive - 2.0%                                                                       -------------   

  3,000,000 Doehler-Jarvis, Inc., Sr. Notes                                      11.875%    6/1/2002   3,135,000    
  6,250,000 Exide Corp., Sr. Notes                                                 10.0%   4/15/2005   6,328,125    
  1,500,000 JPS Automotive Products, Sr. Notes                                   11.125%   6/15/2001   1,492,500    
                                                                                                    -------------   
                                                                                                      10,955,625    
                                                                                                    -------------   
            Bank & Finance - 4.3%                                                                                   
  1,800,000 American Life Holding Corp., Sr. Subordinated Notes                   11.25%   9/15/2004   1,845,000    
  1,850,000 First Nationwide Holdings, Inc., Sr. Notes                            12.25%   5/15/2001   1,942,500    
  7,950,000 GPA Delaware, Inc., Debentures                                         8.75%  12/15/1998   6,300,375    
  2,250,000 Leucadia National Corp., Convertible Subordinated Debentures           5.25%    2/1/2003   2,160,000    
  7,000,000 Mutual Life Insurance Company of New York, Surplus Notes        Zero Coupon    8/15/2024   4,523,750 (b)
  3,500,000 Primeco, Inc., Sr. Subordinated Notes                                 12.75%    3/1/2005   3,640,000    
  2,750,000 Scotsman Group, Inc., Sr. Secured Notes                                 9.5%  12/15/2000   2,640,000    
                                                                                                    -------------   
                                                                                                      23,051,625    
                                                                                                    -------------   
            Broadcasting - 18.5%                                                                                    
  3,250,000 Adelphia Communications Corp., Sr. Debentures                        11.875%   9/15/2004   3,071,250    
  4,500,000 Adelphia Communications Corp., Sr. Notes                               12.5%   5/15/2002   4,410,000    
  3,050,000 Allbritton Communications Co., Sr. Subordinated Debentures             11.5%   8/15/2004   3,133,875    
  4,500,000 Bell Cablemedia, PLC, Sr. Discount Notes                        Zero Coupon    7/15/2004   2,880,000    
  6,400,000 Cablevision Industries, Debentures                                     9.25%    4/1/2008   6,408,000    
  2,650,000 Comcast Corp., Convertible Subordinated Debentures                    3.375%    9/9/2005   2,212,750    
  3,750,000 Continental Cablevision, Inc., Sr. Debentures                           9.5%    8/1/2013   3,740,625    
  5,500,000 Continental Cablevision, Inc., Sr. Subordinated Debentures             11.0%    6/1/2007   5,995,000    
  6,000,000 Diamond Cable Co., Sr. Discount Notes                           Zero Coupon    9/30/2004   3,645,000    
  6,665,250 Falcon Holdings Group, L.P., Sr. Subordinated Notes                    11.0%   9/15/2003   5,898,746    
  4,500,000 Granite Broadcasting Co., Sr. Subordinated Debentures                 12.75%    9/1/2002   4,758,750    
  5,750,000 International CableTel, Inc., Convertible Subordinated Notes           7.25%   4/15/2005   5,728,438    
  6,200,000 International CableTel, Inc., Sr. Deferred Coupon Notes         Zero Coupon    4/15/2005   3,441,000    
  4,500,000 Jones Intercable, Inc., Sr. Notes                                     9.625%   3/15/2002   4,556,250    
  6,750,000 Marcus Cable Operating Co., Sr. Subordinated Guaranteed                                                 
              Discount Notes                                                Zero Coupon     8/1/2004   4,050,000    
  4,500,000 NWCG Holdings Corp., Sr. Secured Discount Notes                 Zero Coupon    6/15/1999   2,655,000    
  4,000,000 Robin Media Group, Sr. Subordinated Deferred Interest Bonds          11.125%    4/1/1997   3,960,000    
  4,500,000 Rogers Cablesystems, Inc., Sr. Secured Second Priority Notes          9.625%    8/1/2002   4,516,875    
  6,000,000 Rogers Communications, Inc., Convertible Debentures                     2.0%  11/26/2005   3,157,500    
    900,000 Rogers Communications, Inc., Convertible Liquid Yield                                                   
              Option Notes                                                  Zero Coupon    5/20/2013     295,875    
  6,250,000 SCI Television, Inc., Sr. Second Priority Secured Notes                11.0%   6/30/2005   6,531,250    
  5,000,000 Scott Cable Communications, Inc., Subordinated Debentures             12.25%   4/15/2001   3,525,000    
  2,900,000 Storer Communications, Inc., Subordinated Debentures                   10.0%   5/15/2003   2,863,750    
  8,500,000 United International Holdings, Inc., Sr. Discount Notes         Zero Coupon   11/15/1999   4,590,000    
    300,000 United International Holdings, Inc., Units                      Zero Coupon   11/15/1999     174,000    
  3,700,000 Videotron Ltee. (Le Groupe), Sr. Notes                               10.625%    2/1/2005   3,866,500    
                                                                                                    -------------   
                                                                                                     100,065,434    
                                                                                                    -------------   
            Building Products & Materials - 2.4%                                                                    
  4,300,000 American Standard, Inc., Sr. Subordinated Discount Debentures   Zero Coupon     6/1/2005   3,182,000    
 10,500,000 Dal-Tile International, Inc., Sr. Secured Notes                 Zero Coupon    7/15/1998   7,061,250    
  2,700,000 Tarkett International, Sr. Subordinated Notes                           9.0%    3/1/2002   2,578,500    
                                                                                                    -------------   
                                                                                                      12,821,750    
                                                                                                    -------------   
            Chemicals - 1.4%                                                                                        
  6,500,000 G-I Holdings, Inc., Sr. Discount Notes                          Zero Coupon    10/1/1998   4,436,250    
  4,750,000 NL Industries, Inc., Sr. Secured Discount Notes                 Zero Coupon   10/15/2005   3,325,000    
                                                                                                    -------------   
                                                                                                       7,761,250    
                                                                                                    -------------   
            Computers & Office Equipment - 2.0%                                                                     
  7,000,000 Bell & Howell, Inc., Sr. Discount Debentures                    Zero Coupon     3/1/2005   3,902,500    
  2,600,000 Corporate Express, Inc., Sr. Subordinated Notes                       9.125%   3/15/2004   2,496,000    
  4,000,000 Unisys Corp., Convertible Subordinated Notes                           8.25%    8/1/2000   4,400,000    
                                                                                                    -------------   
                                                                                                      10,798,500    
                                                                                                    -------------   
            Conglomerates - 1.9%                                                                                    
  3,000,000 IMO Industries, Inc., Sr. Subordinated Debentures                      12.0%   11/1/2001   3,097,500    
  1,320,000 IMO Industries, Inc., Sr. Subordinated Debentures                     12.25%   8/15/1997   1,331,550    
  3,250,000 Jordan Industries, Inc., Sr. Notes                                   10.375%    8/1/2003   3,038,750    
  4,750,000 Jordan Industries, Inc., Sr. Subordinated Discount Debentures   Zero Coupon     8/1/2005   2,683,750    
                                                                                                    -------------   
                                                                                                      10,151,550    
                                                                                                    -------------   
            Containers & Packaging - 1.6%                                                                           
  3,300,000 Owens-Illinois, Inc., Sr. Subordinated Notes                           9.75%   8/15/2004   3,316,500    
  6,000,000 Silgan Holdings, Inc., Sr. Discount Debentures                  Zero Coupon   12/15/2002   5,370,000    
                                                                                                    -------------   
                                                                                                       8,686,500    
                                                                                                    -------------   
            Drugs & Health Care - 1.7%                                                                              
  5,600,000 Dade International, Inc., Sr. Subordinated Notes                       13.0%    2/1/2005   5,754,000    
  3,560,800 General Medical Corp., Payment-In-Kind Debentures                    12.125%   8/15/2005   3,547,447    
                                                                                                    -------------   
                                                                                                       9,301,447    
                                                                                                    -------------   
            Electric Utilities - 1.9%                                                                               
  2,000,000 El Paso Electric Co. (Del Norte Funding Corp.), Secured Lease                                           
              Obligation Bonds                                                    11.25%    1/2/2014   1,219,850 (c)
  4,450,000 El Paso Electric Co. (El Paso Funding Corp.), Lease Obligation                                          
              Bonds                                                              10.375%    1/2/2011   2,746,585 (c)
  1,500,000 El Paso Electric Co. (El Paso Funding Corp.), Lease Obligation                                          
              Bonds                                                               10.75%    4/1/2013     926,036 (c)
  1,750,000 Midland Cogen Venture Fund II, Secured Lease Obligation Bonds,                                          
              Series A                                                            11.75%   7/23/2005   1,743,135    
  3,600,000 Midland Cogen Venture Fund II, Subordinated Secured Lease                                               
              Obligation Bonds                                                    13.25%   7/23/2006   3,656,891    
                                                                                                    -------------   
                                                                                                      10,292,497    
                                                                                                    -------------   
            Electrical Equipment - 0.7%                                                                             
  3,750,000 Telex Communications, Inc., Sr. Notes                                  12.0%   7/15/2004   3,825,000    
                                                                                                    -------------   
            Food & Beverage - 3.7%                                                                                  
  1,000,000 Beatrice Foods, Inc., Sr. Subordinated Notes                           12.0%   12/1/2001     960,000    
  3,000,000 Curtice-Burns Food, Inc., Sr. Subordinated Notes                      12.25%    2/1/2005   3,195,000    
  2,500,000 Di Giorgio Corp., Sr. Notes                                            12.0%   2/15/2003   2,162,500    
  3,000,000 Dr. Pepper Bottling Holdings, Sr. Notes                         Zero Coupon    2/15/2003   2,205,000    
  3,350,000 Fresh Del Monte Corp., Sr. Notes                                       10.0%    5/1/2003   2,830,750    
 10,000,000 Specialty Foods Acquisition Co., Sr. Secured Discount                                                   
              Debentures, Series B                                          Zero Coupon    8/15/2005   5,250,000    
  9,000,000 White Rose Foods, Inc., Sr. Discount Debentures                 Zero Coupon    11/1/1998   3,645,000    
                                                                                                    -------------   
                                                                                                      20,248,250    
                                                                                                    -------------   
            Hospital Management - 1.5%                                                                              
  3,250,000 Charter Medical Corp., Sr. Subordinated Notes                         11.25%   4/15/2004   3,412,500    
  4,750,000 National Medical Enterprises, Sr. Subordinated Notes                 10.125%    3/1/2005   4,963,750    
                                                                                                    -------------   
                                                                                                       8,376,250    
                                                                                                    -------------   
            Household Products - 1.9%                                                                               
 14,000,000 Coleman Worldwide Corp., Convertible Liquid Yield                                                       
              Option Notes                                                  Zero Coupon    5/27/2013   4,025,000    
  3,250,000 JB Williams Holdings, Inc., Sr. Notes                                  12.0%    3/1/2004   3,120,000    
  3,500,000 Pace Industries, Inc., Sr. Notes, Series B                           10.625%   12/1/2002   3,290,000    
                                                                                                    -------------   
                                                                                                      10,435,000    
                                                                                                    -------------   
            Leisure & Entertainment - 1.2%                                                                          
  4,750,000 Bally's Health & Tennis Corp., Sr. Subordinated Notes                  13.0%   1/15/2003   3,948,437    
  3,000,000 IMAX Corp., Sr. Notes                                                   7.0%    3/1/2001   2,700,000    
                                                                                                    -------------   
                                                                                                       6,648,437    
                                                                                                    -------------   
            Machinery & Equipment - 0.5%                                                                            
  3,000,000 Great Dane Holdings, Inc., Sr. Subordinated Debentures                12.75%    8/1/2001   2,955,000    
                                                                                                    -------------   
            Mining & Metals - 0.4%                                                                                  
  2,500,000 EnviroSource, Inc., Sr. Notes                                          9.75%   6/15/2003   2,243,750    
                                                                                                    -------------   
            Natural Gas - 1.0%                                                                                      
  3,500,000 Columbia Gas Systems, Debentures                                      10.25%    8/1/2011   5,131,875 (c)
                                                                                                    -------------   
            Oil & Gas - 2.4%                                                                                        
  4,400,000 DeepTech International, Inc., Sr. Secured Notes                        12.0%  12/15/2000   3,850,000    
    500,000 Petroleum Heat & Power Co., Inc., Subordinated Debentures             9.375%    2/1/2006     445,000    
  5,200,000 Petroleum Heat & Power Co., Inc., Subordinated Debentures             12.25%    2/1/2005   5,512,000    
  3,300,000 Sherritt, Inc., Debentures                                             10.5%   3/31/2014   3,333,000    
                                                                                                    -------------   
                                                                                                      13,140,000    
                                                                                                    -------------   
            Paper & Forest Products - 4.5%                                                                          
  2,500,000 Container Corp. of America, Sr. Notes                                 11.25%    5/1/2004   2,668,750    
  4,000,000 Fort Howard Corp., Sr. Subordinated Notes                               9.0%    2/1/2006   3,630,000    
  4,500,000 Gaylord Container Corp., Sr. Subordinated Debentures            Zero Coupon    5/15/2005   4,342,500    
  6,100,000 Malette, Inc., Sr. Secured Notes                                      12.25%   7/15/2004   6,374,500    
  2,250,000 Repap New Brunswick, 2nd Priority Secured Notes                      10.625%   4/15/2005   2,295,000    
  3,550,000 Repap Wisconsin, Inc., 1st Priority Sr. Secured Notes                  9.25%    2/1/2002   3,479,000    
  1,250,000 SD Warren Co., Sr. Subordinated Notes                                  12.0%  12/15/2004   1,350,000    
                                                                                                    -------------   
                                                                                                      24,139,750    
                                                                                                    -------------   
            Publishing & Printing - 3.4%                                                                            
  2,500,000 Heritage Media Services, Sr. Secured Notes                             11.0%   6/15/2002   2,653,125    
  5,250,000 MobileMedia Communications, Inc., Sr. Subordinated Deferred                                             
              Coupon Notes                                                  Zero Coupon    12/1/2003   3,045,000    
 10,250,000 Neodata Services, Inc., Sr. Notes                               Zero Coupon     5/1/2003   7,943,750    
  3,500,000 News America Holdings, Inc., Convertible Liquid Yield                                                   
              Option Notes                                                  Zero Coupon    3/11/2013   1,531,250    
    750,000 News America Holdings, Inc., Subordinated Notes                 Zero Coupon    3/31/2002     629,062    
  2,500,000 Sullivan Graphics, Inc., Sr. Subordinated Notes                        15.0%    2/1/2000   2,656,250    
                                                                                                    -------------   
                                                                                                      18,458,437    
                                                                                                    -------------   
            Retail - 5.2%                                                                                           
  3,850,000 Color Tile, Inc., Sr. Notes                                           10.75%  12/15/2001   2,675,750    
  5,000,000 Dominick's Finer Foods, Sr. Subordinated Notes                       10.875%    5/1/2005   5,050,000    
  3,200,000 F & M Distributors, Inc., Sr. Subordinated Notes                       11.5%   4/15/2003     512,000 (c)
  4,750,000 Farm Fresh, Inc., Sr. Notes                                           12.25%   10/1/2000   4,536,250    
 19,000,000 Grand Union Capital, Sr. Notes                                  Zero Coupon    7/15/2004     308,750 (c)
 20,000,000 Grand Union Capital, Sr. Subordinated Notes, Series A           Zero Coupon    1/15/2007     200,000 (c)
  2,900,000 Loehmann's Holdings, Inc., Sr. Subordinated Notes                     13.75%   2/15/1999   2,827,500    
  1,500,000 Penn Traffic Co., Sr. Subordinated Debentures                         9.625%   4/15/2005   1,425,000    
  3,300,000 Purity Supreme, Notes, Series B                                       11.75%    8/1/1999   3,547,500    
  2,300,000 Smitty's SuperValu, Inc., Sr. Subordinated Notes, Series B            12.75%   6/15/2004   2,196,500    
  3,745,912 Town & Country Corp., Sr. Secured Discount Notes                                                        
              (Payment-In-Kind)                                                    13.0%   5/31/1998   1,854,227    
  6,200,000 Wherehouse Entertainment, Inc., Sr. Subordinated Notes                 13.0%    8/1/2002   3,069,000    
                                                                                                    -------------   
                                                                                                      28,202,477    
                                                                                                    -------------   
            Services - 1.0%                                                                                         
    750,000 Flagstar Corp., Sr. Subordinated Debentures                          11.375%   9/15/2003     622,500    
  6,000,000 Flagstar Corp., Sr. Subordinated Debentures                           11.25%   11/1/2004   4,905,000    
                                                                                                    -------------   
                                                                                                       5,527,500    
                                                                                                    -------------   
            Telecommunications - 8.9%                                                                               
  9,000,000 Call-Net Enterprises, Inc., Sr. Discount Notes                  Zero Coupon    12/1/2004   5,017,500    
  5,750,000 CenCall Communications Corp., Sr. Redeemable Discount Notes     Zero Coupon    1/15/2004   2,817,500    
    500,000 Comcast Cellular, Inc., Sr. Participation Redeemable Notes,                                             
              Series B                                                      Zero Coupon     3/5/2000     356,250    
  5,150,000 Comcast Cellular, Inc., Sr. Redeemable Notes                    Zero Coupon     3/5/2000   3,669,375    
  2,000,000 Dial Call Communications, Inc., Sr. Discount Notes              Zero Coupon   12/15/2005     945,000    
  1,500,000 Dial Call Communications, Inc., Sr. Discount Notes              Zero Coupon    4/15/2004     753,750    
  3,250,000 General Instrument, Convertible Jr. Subordinated Notes                  5.0%   6/15/2000   4,797,812    
  7,000,000 Horizon Cellular Telephone Co., Sr. Subordinated                                                        
            Discount Notes                                                  Zero Coupon    10/1/2000   5,355,000    
  4,500,000 In-Flight Phone Corp., Unit Debentures                          Zero Coupon    5/15/2002   2,725,844    
  2,500,000 K-III Communications Corp., Sr. Notes                                 10.25%    6/1/2004   2,581,250    
  2,500,000 NEXTEL Communications, Inc., Sr. Discount Notes                 Zero Coupon     9/1/2003   1,406,250    
  7,500,000 Pagemart Nationwide, Inc., Sr. Discount Notes                   Zero Coupon     2/1/2005   4,237,500    
  2,000,000 Rogers Cantel Mobile, Inc., Sr. Subordinated Notes                   11.125%   7/15/2002   2,105,000    
  3,500,000 USA Mobile Communications, Inc., Sr. Notes                             14.0%   11/1/2004   3,780,000    
  2,250,000 USA Mobile Communications, Inc., Sr. Notes                              9.5%    2/1/2004   1,991,250    
  8,000,000 Viatel, Inc., Sr. Discount Notes                                Zero Coupon    1/15/2005   5,160,000    
                                                                                                    -------------   
                                                                                                      47,699,281    
                                                                                                    -------------   
            Textiles & Apparel - 0.1%                                                                               
  1,500,000 Plaid Clothing Group, Sr. Subordinated Notes                           11.0%    8/1/2003     412,500    
                                                                                                    -------------   
            Transportation - 1.2%                                                                                   
  5,500,000 Burlington Motor Holdings, Inc., Sr. Subordinated Notes                11.5%   11/1/2003   4,922,500    
  1,400,000 TNT Transport, Sr. Notes                                               11.5%   4/15/2004   1,424,500    
                                                                                                    -------------   
                                                                                                       6,347,000    
                                                                                                    -------------   
              Total Corporate Bonds (cost $431,732,794)                                              413,999,404    
                                                                                                    -------------   

            FOREIGN BONDS - 0.9% (a,e)                                                                              
$10,750,000 Argentina, (Republic of), Par Bond (cost $4,027,896)                    5.0%    3/1/2023   4,730,000    
                                                                                                    -------------   
                                                        [Enlarge/Download Table]

   Shares                                                                                             
------------                                                                                          
                                                                                                      
            PREFERRED STOCKS - 11.5% (a)                                                              
      6,500 Armco, Inc., Convertible Preferred Stock                                     352,625      
     45,039 Berg Electronics Holding Corp., Preferred Stock                            1,176,644      
     90,000 Boise Cascade Corp., Convertible Preferred Stock                           2,486,250      
     32,000 California Federal Bank, Preferred Stock                                   3,328,000      
     97,500 Chevy Chase Savings Bank, Preferred Stock                                  2,656,875      
      5,150 Consolidated Hydro, Inc., Preferred Stock                                  2,631,650      
     23,500 EnviroSource, Inc., Jr. Convertible Preferred Stock                        2,940,438      
     55,000 First Nationwide Bank, Noncummulative Preferred Stock                      5,775,000      
    105,000 Flagstar Cos., Convertible Preferred Stock, Series A                       1,968,750      
     45,500 Grand Union Holdings Corp., Preferred Stock                                      228 (b,c)
    160,000 Granite Broadcasting Corp. Convertible Preferred Stock                     6,240,000      
    221,432 Harvard Industries, Inc., Exchangeable Payment-In-Kind Preferred Stock     6,103,219      
    150,000 Kaiser Aluminum Corp., Preferred Stock                                     1,650,000      
      9,412 K-III Communications Corp., Payment-In-Kind Preferred Stock, Series B        895,279      
    133,000 K-III Communications Corp., Preferred Stock                                3,441,375      
     87,000 Network Imaging Corp., Convertible Preferred Stock                           935,250      
     90,000 Newscorp Overseas Limited, Cummulative Guaranteed Preferred Stock          2,070,000      
      7,300 PanAmSat Corporation, Convertible Preferred Stock                          7,391,250      
     74,942 Riggs National Corp., Preferred Stock                                      1,920,389      
    122,500 River Bank America, Preferred Stock                                        2,894,063      
     30,750 Storage Technology Corp., Convertible Preferred Stock                      1,579,781      
     26,000 Transco Energy Co., Convertible Preferred Stock                            1,449,500      
     25,000 Unisys Corp., Convertible Preferred Stock, Series A                        1,000,000      
     31,250 WHX Corp., Preferred Stock                                                 1,328,125      
                                                                                    -------------     
              Total Preferred Stocks (cost $65,886,252)                               62,214,691      
                                                                                    -------------     
            COMMON STOCKS & STOCK WARRANTS - 3.7% (a)                                                 
    115,000 ADT Limited, Common Stock                                                  1,365,625 (d)  
     12,000 AmeriSource Health Corp., Class A Common Stock                               265,500 (d)  
     10,700 Arcadian Corp., Stock Warrants                                               192,600 (b,d)
     88,600 Berg Electronics Holdings Corp., Common Stock                                443,000 (b,d)
    134,948 Charter Medical Corp., Common Stock                                        2,395,327 (d)  
      9,270 Consolidated Hydro, Inc., Stock Warrants                                      92,700 (b,d)
      3,086 Dial Call Communications, Inc., Stock Warrants                                 4,938 (d)  
      1,500 Dial Call Communications, Inc., Stock Warrants                                 1,950 (d)  
     75,500 Envirotest Systems Corp., Common Stock                                       453,000 (d)  
      6,000 Federated Dept. Stores, Inc., Stock Warrants                                   5,250 (d)  
     31,751 Gaylord Container Corp., Class A Common Stock                                357,199 (d)  
    274,885 Gaylord Container Corp., Stock Warrants                                    2,491,145 (d)  
    100,000 Harvard Industries, Inc., Class B Common Stock                             1,962,500 (d)  
     25,000 International Cabletel, Inc., Common Stock                                   737,500 (d)  
     32,180 JPS Textiles Group, Common Stock                                             482,700 (d)  
    143,834 Memorex Telex, N.V., Common Stock                                            197,772 (d)  
      3,981 Memorex Telex, N.V., Warrants                                                    119 (d)  
     15,000 News Corp., Ltd, ADR, Ordinary Shares, Common Stock                          270,000      
     30,000 News Corp., Ltd, ADR, Preference Shares, Common Stock                        585,000      
     19,200 Payless Cashways, Inc., Stock Warrants                                        38,400 (d)  
    125,000 Plantronics, Inc., Common Stock                                            3,406,250 (d)  
      4,500 Terex Corp., Stock Appreciation Rights                                         1,125 (b,d)
     20,000 Triangle Wire & Cable, Inc., Stock Warrants                                        0 (b,d)
     11,500 United International Holdings, Inc., Stock Warrants                          368,000 (d)  
    180,000 USA Mobile Communications, Common Stock                                    2,700,000 (d)  
     23,700 Viacom, Inc., Class B Common Stock                                         1,087,237 (d)  
                                                                                    -------------     
              Total Common Stocks & Stock Warrants (cost $17,696,597)                 19,904,837      
                                                                                    -------------     
                                                        [Enlarge/Download Table]

 Principal                                                                               Maturity                  
   Amount                                                                      Rate        Date                    
------------                                                               ------------------------                
                                                                                                                   
            SHORT-TERM SECURITIES - 7.4% (a)                                                                       
            Commercial Paper                                                                                       
 $5,000,000 Cargill, Inc.                                                        5.959%    5/3/1995   4,998,347    
 17,900,000 General Electric Co.                                                   5.9%    5/1/1995  17,900,000    
  5,000,000 General Motors Acceptance Corp.                                       6.03%   5/31/1995   4,974,875    
  5,000,000 General Motors Acceptance Corp.                                       6.04%   5/31/1995   4,974,833    
  7,000,000 Pepsico, Inc.                                                         5.96%   5/12/1995   6,987,252    
                                                                                                   -------------   
              Total Short-Term Securities (at amortized cost)                                        39,835,307    
                                                                                                   -------------   
              Total Investments (cost $559,178,846)                                                $540,684,239 (f)
                                                                                                   -------------   
See accompanying notes to portfolio of investments.                                                                

Notes to Portfolio of Investments:                                                                                 
(a) The categories of investments are shown as a percentage of total                                               
investments of the Lutheran Brotherhood High Yield Fund.                                                           
(b) Denotes restricted securities. These securities have been valued from                                          
the date of acquisition through April 30, 1995 by obtaining quotations                                             
from brokers who are active with  the issues.  The following table                                                 
indicates the aquisition date and cost of restricted securities the Fund                                           
owned as of April 30, 1995:                                                                                        
                                                        [Enlarge/Download Table]

                                                                                  Acquisition             
                                           Security                                   Date        Cost    
            ----------------------------------------------------------------------------------------------
                                                                                                          
            Arcadian Corp., Stock Warrants                                              2/6/92    290,000 
            Berg Electronics Holdings Corp., Common Stock                              4/21/93     82,210 
            Consolidated Hydro, Inc., Stock Warrants                                    2/8/94    202,776 
            Grand Union Holdings Corp., Preferred Stock                                6/14/93  5,218,975 
            Mutual Life Insurance Company of New York, Surplus                                            
              Notes, 0%, 8/15/2024                                                      8/8/94  4,049,780 
            Terex Corp., Stock Appreciation Rights                                     7/27/92     11,250 
            Triangle Wire & Cable, Inc., Stock Warrants                                 1/3/92      1,998 
(c) Currently non-income producing and in default.                                                        
(d) Currently non-income producing.                                                                       
(e) Denominated in U.S. Dollars.                                                                          
(f) At April 30, 1995, the aggregate cost of securities for federal income                                
tax purposes was $559,178,846 and the net unrealized depreciation of                                      
investments based on that cost was $18,494,607 which is comprised of                                      
$27,863,628 gross unrealized appreciation and $46,358,235 aggregate                                       
gross unrealized depreciation.                                                                            

The accompanying notes are an integral part of the financial statements.                                  

                                                        [Enlarge/Download Table]

                                   Lutheran Brotherhood Income Fund                                                      
                                       Portfolio of Investments                                                          
                                            April 30, 1995                                                               
                                             (Unaudited)                                                                 

  Principal                                                                                  Maturity                    
    Amount                                                                         Rate        Date        Value         
--------------                                                                 -------------------------------------     
                                                                                                                         
              CORPORATE BONDS - 24.2% (a)                                                                                
              Bank & Finance - 9.5%                                                                                      
  $10,000,000 Aegon, N.V., Yankee Notes                                                8.0%   8/15/2006 $10,144,840      
    3,000,000 Associates Corp. of North America, Notes                               10.75%   11/1/1995   3,060,912      
    5,000,000 Associates Corp. of North America, Sr. Debentures                       12.4%   10/1/1995   5,116,645      
   13,000,000 Associates Corp. of North America, Sr. Notes                           9.125%    4/1/2000  13,797,654      
    9,000,000 Geico Corp., Debentures                                                 9.15%   9/15/2021   9,562,590      
   10,000,000 General Electric Capital Corp., Debentures                              8.85%    4/1/2005  10,945,380      
    3,000,000 Hancock (John) Mutual Life Insurance Co., Surplus Notes                7.375%   2/15/2024   2,697,000      
    5,000,000 Liberty Mutual Insurance Co., Surplus Notes                              8.2%    5/4/2007   4,983,400      
   10,000,000 Nationwide CSN Trust, Trust Notes                                      9.875%   2/15/2025  10,700,000      
    6,000,000 New York Life Insurance Co., Surplus Notes                               6.4%  12/15/2003   5,459,598      
    9,000,000 PNC Bank, NA, Subordinated Notes                                       7.875%   4/15/2005   9,019,899      
    6,000,000 Reliastar Financial Corp., Sr. Notes                                   8.625%   2/15/2005   6,180,294      
                                                                                                       -------------     
                                                                                                         91,668,212      
                                                                                                       -------------     
              Chemicals - 0.3%                                                                                           
    3,000,000 Monsanto Co., Debentures                                                 8.2%   4/15/2025   3,019,122      
                                                                                                       -------------     
              Drugs & Health Care - 1.7%                                                                                 
    9,000,000 American Home Products Corp., Notes                                      7.9%   2/15/2005   9,232,128      
    7,000,000 Bectin Dickinson & Co., Debentures                                       8.7%   1/15/2025   7,285,236      
                                                                                                       -------------     
                                                                                                         16,517,364      
                                                                                                       -------------     
              Electric Utilities - 3.4%                                                                                  
    5,000,000 Arizona Public Service Co., First Mortgage Bonds                         9.5%   4/15/2021   5,394,475      
    7,085,000 DQU Funding Corp., Collateralized Lease Obligation Bonds                7.23%   12/1/1999   7,030,821      
   13,000,000 Texas Utilities Electric Co., First Mortgage Bonds                     7.375%   10/1/2025  11,577,982      
    9,000,000 Virginia Electric & Power Co., First Refunding Mortgage Bonds           8.25%    3/1/2025   8,991,189      
                                                                                                       -------------     
                                                                                                         32,994,467      
                                                                                                       -------------     
              Electrical Equipment - 0.5%                                                                                
    5,000,000 Philips Electronics, N.V., Notes                                       8.375%   9/15/2006   5,226,865      
                                                                                                       -------------     
              Food & Beverage - 0.7%                                                                                     
    6,000,000 Coca Cola Enterprises, Inc., Debentures                                  8.5%    2/1/2022   6,232,212      
                                                                                                       -------------     
              Hospital Management - 1.0%                                                                                 
    5,000,000 Columbia/HCA Healthcare Corp., Medium Term Notes                         9.0%  12/15/2014   5,236,275      
    4,000,000 Columbia/HCA Healthcare Corp., Medium Term Notes                        8.85%    1/1/2007   4,225,992      
                                                                                                       -------------     
                                                                                                          9,462,267      
                                                                                                       -------------     
              Household Products - 1.7%                                                                                  
   14,000,000 Procter & Gamble, Guaranteed ESOP Debentures                            9.36%    1/1/2021  16,062,816      
                                                                                                       -------------     
              Natural Gas - 0.7%                                                                                         
    6,000,000 Coastal Corp., Sr. Notes                                              10.375%   10/1/2000   6,659,478      
                                                                                                       -------------     
              Paper & Forest Products - 0.5%                                                                             
    5,000,000 Georgia Pacific Corp., Debentures                                      8.625%   4/30/2025   5,049,335      
                                                                                                       -------------     
              Petroleum - 1.9%                                                                                           
    8,272,765 Mobil Oil Corp, ESOP Sinking Fund Debentures                            9.17%   2/29/2000   8,765,284      
   10,000,000 Texaco Capital, Inc., Debentures                                         7.5%    3/1/2043   9,164,100      
                                                                                                       -------------     
                                                                                                         17,929,384      
                                                                                                       -------------     
              Retail - 1.2%                                                                                              
    6,000,000 K-Mart Corp., Debentures                                                7.95%    2/1/2023   5,515,266      
    6,000,000 K-Mart Corp., Global Notes                                             8.125%   12/1/2006   5,958,288      
                                                                                                       -------------     
                                                                                                         11,473,554      
                                                                                                       -------------     
              Services - 0.5%                                                                                            
    5,000,000 ARAMARK Services, Inc., Guaranteed Notes                                8.15%    5/1/2005   4,986,400      
                                                                                                       -------------     
              Telephone - 0.6%                                                                                           
    7,000,000 U.S. West Communications, Inc., Debentures                             7.125%  11/15/2043   6,106,198      
                                                                                                       -------------     
                Total Corporate Bonds (cost $229,847,002)                                               233,387,674      
                                                                                                       -------------     

              FOREIGN BONDS - 12.0% (a,b)                                                                                
   11,500,000 Bell Telephone Co., Canada, Debentures, Series DJ                     13.375%  10/15/2010  12,431,684      
   20,325,000 British Columbia Hydro & Power, Debentures                              15.5%   7/15/2011  23,592,020      
   15,000,000 Inter American Development Bank, Debentures                            7.125%   3/15/2023  13,575,735      
    7,000,000 International Bank for Reconstruction &                                                                    
                Development, Debentures                                             12.375%  10/15/2002   8,990,478      
    7,000,000 KFW International Finance, Notes                                         7.2%   3/15/2014   6,627,264      
    5,500,000 Landeskreditbank Baden - Wurttemberg, Subordinated Notes               7.625%    2/1/2023   5,305,944      
   10,000,000 Ontario Province, Canada, Debentures                                  15.125%    5/1/2011  11,337,890      
    5,000,000 Ontario Province, Canada, Debentures                                   11.75%   4/25/2013   5,780,495      
   13,000,000 Ontario Province, Canada, Sr. Secured Notes                             7.75%    6/4/2002  13,225,927      
    5,000,000 Scotland International Finance No. 2,                                                                      
                Subordinated Guaranteed Notes                                         8.85%   11/1/2006   5,315,500      
    9,000,000 Societe-Generale, Subordinated Notes                                   9.875%   7/15/2003  10,175,211      
                                                                                                       -------------     
              Total Foreign Bonds (cost $122,547,667)                                                   116,358,148      
                                                                                                       -------------     
              ASSET-BACKED SECURITIES - 10.3% (a)                                                                        
   25,000,000 Household Affinity Master Trust, Series 1993-1-A                       3.325%   9/15/2000  25,100,225 (c)  
   12,000,000 Household Affinity Master Trust, Series 1993-2-A                         5.6%   5/15/2002  11,203,908      
   13,949,240 IBM Credit Receivables Lease Trust, Series 1993-1                       4.55%  11/15/2000  13,811,114      
   25,000,000 ITT Floorplan Receivable Master Trust, Series 1994-1-A                3.7725%   2/15/2001  25,100,725 (c)  
   20,000,000 Sears Credit Account Master Trust, Series 1994-1-A                       7.0%   1/15/2004  19,948,380      
    4,000,000 Standard Credit Card Master Trust, Series 1995-1                        8.25%    1/7/2005   4,170,036      
                                                                                                       -------------     
                Total Asset-Backed Securities (cost $98,524,648)                                         99,334,388      
                                                                                                       -------------     
              MORTGAGE-BACKED SECURITIES - 19.3% (a)                                                                     
   44,500,000 Federal National Mortgage Association, Participation Certificates        8.0%  11/25/2024  44,388,750 (d,e)
   81,608,211 Federal National Mortgage Association, Participation Certificates        6.5%   11/1/2024  75,385,585      
   69,860,149 Government National Mortgage Association,                                                                  
                Modified Pass Through Certificates                             7.0 - 7.5%  2022 - 2024   66,956,730      
                                                                                                       -------------     
                Total Mortgage-Backed Securities (cost $185,937,491)                                    186,731,065      
                                                                                                       -------------     
              U.S. GOVERNMENT AGENCIES - 1.6% (a)                                                                        
   65,000,000 Resolution Funding Corp., STRIPS                                 Zero Coupon 2018 - 2019   10,559,035      
    5,000,000 Tennessee Valley Authority, Power Bonds, 1994 Series A                  7.85%   6/15/2044   4,750,120      
                                                                                                       -------------     
              Total U.S. Government Agencies (cost $14,640,747)                                          15,309,155      
                                                                                                       -------------     
              U.S. GOVERNMENT - 18.5% (a)                                                                                
  110,000,000 U.S. Treasury Bonds                                              7.5 - 14.0% 2001 - 2024  143,505,188      
   35,000,000 U.S. Treasury Notes                                              7.5 - 10.5% 1995 - 2001   35,736,220      
                                                                                                       -------------     
                Total U.S. Government (cost $178,699,141)                                               179,241,408      
                                                                                                       -------------     

                                                                [Download Table]

    Shares                                                                      
--------------                                                                  
                                                                                
              COMMON & PREFERRED STOCKS - 0.9% (a)                              
      350,000 Citicorp, Preferred Stock                               7,000,000 
       30,000 Texaco, Inc., Common Stock                              2,051,250 
                                                                   -------------
                Total Common & Preferred Stocks (cost $9,008,725)     9,051,250 
                                                                   -------------

                                                        [Enlarge/Download Table]

  Principal                                                                    Maturity                  
    Amount                                                           Rate        Date                    
--------------                                                   ------------------------                
                                                                                                         
              SHORT-TERM SECURITIES - 13.2% (a)                                                          
              Commercial Paper - 12.3%                                                                   
   $5,400,000 AVCO Financial Services, Inc.                             5.97%   5/17/1995   5,385,672    
   10,000,000 Cargill, Inc.                                              5.9%    5/9/1995   9,986,889    
    5,000,000 Centurion Fuel Corp.                                       6.0%    5/1/1995   5,000,000    
    7,800,000 Ciesco, L.P.                                              5.97%   5/18/1995   7,778,011    
    5,000,000 Commercial Credit Co.                                     6.02%    5/3/1995   4,998,328    
    5,000,000 Commercial Credit Co.                                     5.98%    5/3/1995   4,998,339    
   10,000,000 Du Pont (E.I.) de Nemours and Co.                         5.95%   5/11/1995   9,983,472    
      775,000 General Electric Capital Corp.                             5.7%    5/1/1995     775,000    
   10,000,000 International Business Machines Credit Co.                5.96%   5/31/1995   9,950,333    
   10,000,000 Metlife Funding, Inc.                                     5.96%    5/4/1995   9,995,033    
    6,200,000 Pitney Bowes, Inc.                                        5.96%   5/10/1995   6,190,762    
   23,000,000 Harvard University                                        5.92%    5/1/1995  23,000,000    
    4,600,000 Toys R Us, Inc.                                           5.94%   5/24/1995   4,582,543    
    3,100,000 Toys R Us, Inc.                                           5.92%   5/15/1995   3,092,863    
   10,000,000 United Parcel Service of America, Inc.                    5.95%    5/8/1995   9,988,431    
    3,000,000 USAA Capital Corp.                                        5.96%   5/10/1995   2,995,530    
                                                                                         -------------   
                                                                                          118,701,206    
                                                                                         -------------   
              Government Agency - 0.9%                                                                   
     9,000,000Federal Home Loan Mortgage Corp.                          5.88%   5/15/1995   8,979,420    
                                                                                         -------------   
                Total Short-Term Securities (at amortized cost)                           127,680,626    
                                                                                         -------------   
                Total Investments (cost $966,886,047)                                    $967,093,714 (f)
                                                                                         =============   

                                                        [Enlarge/Download Table]

Notes to Portfolio of Investments:                                                                                  
(a) The categories of investments are shown as a percentage of total                                                
investments of the Lutheran Brotherhood Income Fund.                                                                
(b) Denominated in U.S. dollars.                                                                                    
(c) Denotes variable rate obligations for which current yield is shown.                                             
(d) Denotes investments purchased on a when-issued basis.                                                           
(e) At April 30, 1995, securities valued at $21,945,000 were held in                                                
escrow to cover open call options written as follows:                                                               

                                          Number of                              Exercise   Expiration              
     Type                                 Contracts                               Price        Date        Value    
--------------------------------------------------------------------------------------------------------------------
                                                                                                                    
Federal Nation                               1                                   99.59375      5/4/1995   $68,750   
Mortgage Association                                                                                                
$22,000,000 principal                                                                                               
amount, 8.0%, maturing                                                                                              
          2024                                                                                                      

(f) At April 30, 1995, the aggregate cost of securites for federal income                                           
tax purposes was $966,886,047 and the net unrealized appreciation of                                                
investments based on that cost was $207,667 which is comprised of                                                   
$14,705,734 aggregate gross unrealized appreciation and $14,498,067                                                 
aggregate gross unrealized depreciation.                                                                            

The accompanying notes are an integral part of the financial statements.                                            


                                                        [Enlarge/Download Table]

                             Lutheran Brotherhood Municipal Bond Fund                                                  
                                     Portfolio of Investments                                                          
                                          April 30, 1995                                                               
                                            (Unaudited)                                                                

 Principal                                                                                 Maturity                    
   Amount                                                                        Rate        Date        Value         
------------                                                                 -------------------------------------     
                                                                                                                       
            LONG-TERM MUNICIPAL SECURITIES - 99.1% (a)                                                                 
            Alabama - 0.4%                                                                                             
 $2,000,000 Huntsville, Alabama, General Obligation Warrants, Series B             7.875%    8/1/2012  $2,171,500 (b)  

            Arizona - 0.6%                                                                                             
  1,700,000 Pima County, Arizona (Catalina Foothills Unified School District                                           
              #16), Unlimited Tax General Obligation Bonds, Series A                 8.9%    7/1/2005   2,126,819 (c)  
  1,500,000 Tucson, Arizona, Unlimited Tax General Obligation                                                          
              Refunding Bonds                                                        6.1%    7/1/2012   1,516,605 (d)  
                                                                                                     -------------     
                                                                                                        3,643,424      
                                                                                                     -------------     
            Arkansas - 0.7%                                                                                            
  1,000,000 Arkansas Housing Development Agency, Single Family                                                         
              Mortgage Bonds, Series A                                             8.375%    7/1/2010   1,219,200 (b)  
  1,340,000 Arkansas Development Finance Authority, Correctional Facilities                                            
              Construction Revenue Bonds                                           7.125%  11/15/2010   1,431,281 (c)  
    875,000 Pope County, Arkansas, Pollution Control Revenue Refunding                                                 
              Bonds, Series 1994 (Arkansas Power and Light                                                             
              Company Project)                                                       6.3%   12/1/2016     893,830 (e)  
    750,000 Pope County, Arkansas, Pollution Control Revenue                                                           
              Refunding Bonds, Series 1994 (Arkansas Power and                                                         
              Light Company Project)                                                 6.1%   12/1/2016     766,140 (e)  
                                                                                                     -------------     
                                                                                                        4,310,451      
                                                                                                     -------------     
            California - 9.2%                                                                                          
  5,000,000 Alameda County, California, Certificates of Participation,                                                 
              Revenue Refunding Bonds, Santa Rita Jail Project                     5.375%    6/1/2009   4,741,950 (c)  
  1,750,000 Anaheim, California, Public Financing Authority,                                                           
              Electric Utilities Project, Refunding Revenue Bonds                    5.5%   10/1/2011   1,655,850 (c)  
  1,000,000 California Educational Facilities Authority (Stanford University),                                         
              Revenue Bonds                                                          5.0%    1/1/2015     880,140      
  1,500,000 State of California, General Obligation Bonds                            7.0%    8/1/2006   1,653,450      
  1,000,000 California State, Unlimited Tax General Obligation Bonds,                                                  
              Veteran's Series AT                                                    9.5%    2/1/2010   1,351,020      
  2,000,000 California State, Various Purpose General Obligation Bonds               6.3%    9/1/2010   2,079,740 (f)  
  4,400,000 California State Department of Water Resources                                                             
              (Central Valley Project), Water System Revenue                                                           
              Bonds, Series H                                                        6.9%   12/1/2025   4,842,376 (b)  
  3,000,000 California State Public Works Board, Department of Corrections,                                            
              Lease Revenue Bonds, State Prison, Series A                            7.4%    9/1/2010   3,374,700      
  2,000,000 California State Public Works Board, Lease Revenue Refunding                                               
              Bonds (Department of Corrections, Various State Prisons),                                                
              Series 1993A                                                          5.25%   12/1/2008   1,899,340 (f)  
  2,490,000 California Statewide Communities Development Authority,                                                    
              Certificates of Participation (The Trustees of the                                                       
              J. Paul Getty Trust)                                                   5.0%   10/1/2015   2,159,502      
  1,000,000 Central Valley Financing Authority, California, Cogeneration                                               
              Project Revenue Bonds, (Carson Ice-Gen Project), Series 1993           6.0%    7/1/2009     951,410      
  1,900,000 El Cajon, California, Redevelopment Agency Tax Allocation                                                  
              Refunding Bonds (El Cajon Redevelopment Project)                       6.6%   10/1/2022   1,969,274 (f)  
  1,000,000 Los Angeles County, California, Transportation Commission,                                                 
              Revenue Bonds, Series A                                                8.0%    7/1/2016   1,087,480 (b)  
  2,000,000 Metropolitan Water District of Southern California, Unlimited                                              
              Tax General Obligation Bonds, Series G                               6.625%    3/1/2009   2,128,180 (b)  
  2,145,000 Rancho, California, Water District Financing Authority,                                                    
              Revenue Refunding Bonds, Series A                                    4.875%    8/1/2015   1,815,228 (d)  
  2,000,000 Rancho, California, Water District Financing Authority,                                                    
              Revenue Refunding Bonds                                                5.9%   11/1/2015   1,904,200 (d)  
  1,000,000 Rio Linda, California, Union School District, Series 1992-A              7.4%    8/1/2010   1,119,200 (f)  
  2,815,000 Riverside County Transportation Commission, California,                                                    
              Sales Tax Revenue Capital Appreciation Bonds                   Zero Coupon     6/1/2004   1,699,556 (c)  
  1,500,000 San Francisco Bay Area Rapid Transit District, California,                                                 
              Sales Tax Revenue Refunding Bonds, Series 1990                        6.75%    7/1/2010   1,631,145 (f)  
 15,000,000 San Joaquin Hills Transportation Corridor Agency,                                                          
              California, Sr. Lien Convertible Toll Revenue Bonds            Zero Coupon     1/1/2013   9,514,200      
  3,000,000 San Mateo County, California, Joint Powers Financing Authority,                                            
              Lease Revenue Refunding Bonds, Capital Projects Program,                                                 
              1993 Series                                                            5.0%    7/1/2021   2,546,940 (c)  
  2,490,000 University of California Revenue Bonds, Multiple Purpose                                                   
              Projects, Series 1989 B                                               11.0%    9/1/1998   2,946,766 (f)  
  1,000,000 University of California, Housing System Revenue Bonds,                                                    
              Series A                                                              5.25%   11/1/2012     917,410 (c)  
  2,000,000 University of California Revenue Bonds, Multiple Purpose                                                   
              Projects, Series C                                                    4.75%    9/1/2015   1,663,280 (f)  
                                                                                                     -------------     
                                                                                                       56,532,337      
                                                                                                     -------------     
            Colorado - 5.2%                                                                                            
  2,500,000 St. Vrain Valley School District, Boulder, Larimer & Weld                                                  
              Counties Colorado, General Obligation Refunding &                                                        
              Improvement Bonds, Series 1990-A                               Zero Coupon   12/15/2003   1,492,625 (c)  
  5,000,000 St. Vrain Valley School District, Boulder, Larimer & Weld                                                  
              Counties Colorado, General Obligation Refunding &                                                        
              Improvement Bonds, Series 1990-A                               Zero Coupon   12/15/2004   2,937,450 (c)  
    970,000 Colorado Housing & Finance Authority, Single Family Residential                                            
              Housing Revenue Bonds, Series 1987-B                                   9.0%    9/1/2017   1,011,419      
    710,000 Colorado Springs, Colorado, Utilities System Refunding Revenue                                             
              Bonds, Series 1985-A                                                   9.5%  11/15/2015     729,418 (b)  
  3,100,000 Colorado Springs, Colorado, Utilities System Refunding Bonds                                               
              Series 1991-B                                                          7.0%  11/15/2021   3,468,125 (b)  
  1,945,000 Colorado State Colleges Board, Western State College,                                                      
              Housing & Student Fee Revenue Bonds, Series 1992                     6.625%    5/1/2015   2,138,858 (b,g)
  1,195,000 Colorado Water Resources Power Development Authority,                                                      
              Clean Water Revenue Bonds, Series A                                   6.25%    9/1/2013   1,232,308 (e)  
  2,850,000 Denver, Colorado, City & County Revenue Bonds, Sisters of                                                  
              Charity of Leavenworth                                                 5.0%   12/1/2023   2,339,052      
  2,000,000 Douglas County School District Number RE-1, Douglas & Elbert                                               
              Counties, Colorado, General Obligation Bonds                           6.5%  12/15/2016   2,075,900 (c)  
  2,680,000 Douglas County School District Number RE-1, Douglas & Elbert                                               
              Counties, Colorado, Project Fixed Rate Certificates of                                                   
              Participation, (Colorado Association of School Board Leases                                              
              Purchase Finance Program) Series 1991-D                               7.25%   12/1/1996   2,783,502      
  1,000,000 Eagle, Garfield, and Routt Counties, Colorado, Eagle County                                                
              School District No. RE50J, General Obligation Bonds,                                                     
              Series 1994                                                            6.3%   12/1/2012   1,027,230 (d)  
  1,890,000 Goldsmith Metropolitan District, Colorado, Unlimited Tax                                                   
              General Obligation Bonds                                       Zero Coupon     6/1/2007     948,874 (c)  
  1,890,000 Goldsmith Metropolitan District, Colorado, Unlimited Tax                                                   
              General Obligation Bonds                                       Zero Coupon     6/1/2008     890,549 (c)  
  1,885,000 Goldsmith Metropolitan District, Colorado, Unlimited Tax                                                   
              General Obligation Bonds                                       Zero Coupon    12/1/2008     862,991 (c)  
  3,000,000 Larimer County, Colorado, School District No. R-2, Poudre Valley                                           
              Unlimited Tax General Obligation Bonds                                 7.0%  12/15/2016   3,391,890      
  2,300,000 Metropolitan Wastewater Reclamation District, Colorado,                                                    
              Gross Revenue Refunding Bonds, Series B                               4.75%    4/1/2012   2,010,384 (c)  
  2,485,000 Regional Transportation District, Colorado, Sales Tax Revenue                                              
              Refunding & Improvement Bonds, Series 1992                            6.25%   11/1/2012   2,545,659 (d)  
                                                                                                     -------------     
                                                                                                       31,886,234      
                                                                                                     -------------     
            Connecticut - 1.2%                                                                                         
  1,850,000 Connecticut State Health & Education Facilities Authority, Revenue                                         
              Bonds, Lawrence & Memorial Hospital, Series D                          5.0%    7/1/2022   1,574,997 (c)  
  1,000,000 Connecticut State Health & Education Facilities Authority,                                                 
              Revenue Bonds, Hospital of St. Raphael, Series H                      5.25%    7/1/2012     933,440 (f)  
    750,000 Connecticut State Health & Education Facilities Authority,                                                 
              Revenue Bonds, New Britain General Hospital, Series B                  6.0%    7/1/2024     736,755 (f)  
  4,000,000 Connecticut Special Tax Obligation, Transportation Infrastructure                                          
              Revenue Bonds, Series B                                                6.5%   10/1/2010   4,278,160      
                                                                                                     -------------     
                                                                                                        7,523,352      
                                                                                                     -------------     
            Florida - 2.8%                                                                                             
 20,120,000 Broward County, Florida, Housing Finance Authority, Home                                                   
              Mortgage Revenue Bonds, 1983 Series A                          Zero Coupon     4/1/2014   2,932,691      
  1,000,000 Florida State Board of Education, Public Education Capital                                                 
              Outlay General Obligation Bonds, Series B1                           7.875%    6/1/2019   1,105,610 (b)  
  1,000,000 Florida State Municipal Power Agency, All Requirements                                                     
              Power Supply Project Revenue Refunding Bonds                           5.1%   10/1/2025     873,540 (f)  
  1,500,000 Florida State Turnpike Authority, Turnpike Revenue Refunding                                               
              Bonds, (Department of Transportation) Series A                         5.0%    7/1/2019   1,302,945 (d)  
  1,705,000 Hillsborough Industrial Development Authority, Florida                                                     
              (Tampa Electric Project), Pollution Control Revenue                                                      
              Bonds, Series 1991                                                   7.875%    8/1/2021   1,964,433      
  3,200,000 Hillsborough County, Florida, Industrial Development Authority                                             
              (Weyerhaueser Company, Inc.), Industrial Development                                                     
              Revenue Bonds, Series 1983                                            9.25%    6/1/2008   3,273,952      
  2,000,000 Reedy Creek Improvement District, Florida, Special Tax                                                     
              Revenue Bonds, Series A                                               5.75%    6/1/2019   1,917,160 (c)  
  2,000,000 St. Johns County, Florida, Water & Sewer Revenue Bonds                   5.0%    6/1/2009   1,893,440 (d)  
  1,465,000 Tampa, Florida, Utility Tax & Special Revenue Bonds, 1985 Series       8.875%   10/1/2013   1,520,113 (b,c)
                                                                                                     -------------     
                                                                                                       16,783,884      
                                                                                                     -------------     
            Georgia - 2.5%                                                                                             
  2,000,000 Brunswick, Georgia, Water & Sewer Revenue Refunding &                                                      
              Improvement Bonds, Series 1992                                         6.0%   10/1/2011   2,024,900 (c)  
  1,500,000 Brunswick, Georgia, Water & Sewer Revenue Refunding &                                                      
              Improvement Bonds, Series A                                            6.1%   10/1/2019   1,522,845 (c)  
  5,000,000 Cherokee County, Georgia, Water & Sewer Revenue Refunding                                                  
              & Improvement Bonds                                                    5.5%    8/1/2018   4,670,500 (c)  
  3,500,000 Georgia State, Unlimited Tax General Obligation Bonds,                                                     
              Series 1994D                                                           5.0%    8/1/2012   3,214,960      
  1,000,000 Georgia State, Unlimited Tax General Obligation Bonds, Series B          6.3%    3/1/2009   1,066,640      
  1,000,000 Georgia State, Unlimited Tax General Obligation Bonds, Series B          6.3%    3/1/2010   1,069,770      
  2,000,000 Georgia State, Unlimited Tax General Obligation Bonds, Series B         5.65%    3/1/2012   1,967,860      
                                                                                                     -------------     
                                                                                                       15,537,475      
                                                                                                     -------------     
            Hawaii - 0.3%                                                                                              
  2,000,000 City & County of Honolulu, Hawaii, General Obligation                                                      
              Refunding & Improvement Bonds, Series 1993B                            5.5%   10/1/2011   1,932,800      
                                                                                                     -------------     
            Idaho - 0.4%                                                                                               
  1,000,000 Idaho Falls, Idaho, General Obligation Electric Refunding Bonds,                                           
              Series 1991                                                    Zero Coupon     4/1/2007     515,720 (d)  
  3,115,000 Idaho Falls, Idaho, General Obligation Electric Refunding Bonds,                                           
              Series 1991                                                    Zero Coupon     4/1/2010   1,318,829 (d)  
  2,000,000 Idaho Falls, Idaho, General Obligation Electric Refunding Bonds,                                           
              Series 1991                                                    Zero Coupon     4/1/2011     799,320 (d)  
                                                                                                     -------------     
                                                                                                        2,633,869      
                                                                                                     -------------     
            Illinois - 0.8%                                                                                            
  3,940,000 Central Lake County, Illinois, Joint Action Water Agency,                                                  
              Refunding Unlimited Tax General Obligation Bonds                       6.0%    2/1/2019   3,790,241      
     16,000 Illinois Health Facilities Authority (Community Provider Pooled                                            
              Loan Program), Revenue Bonds, Series 1988 B                            7.9%   8/15/2003      16,473 (b,c)
    162,000 Illinois Health Facilities Authority (Community Provider Pooled                                            
              Loan Program), Revenue Bonds, Series 1988 B                            7.9%   8/15/2003     189,080 (b,c)
  1,035,000 Illinois Health Facilities Authority (Community Provider Pooled                                            
              Loan Program), Revenue Bonds, Series 1988 B                            7.9%   8/15/2003   1,062,231 (c)  
                                                                                                     -------------     
                                                                                                        5,058,025      
                                                                                                     -------------     
            Indiana - 1.2%                                                                                             
  2,450,000 Indiana Municipal Power Agency, Power Supply System                                                        
              Revenue Bonds, Series A                                                5.5%    1/1/2023   2,209,361 (c)  
    400,000 Indiana Housing Finance Authority, Single Family Mortgage                                                  
              Program Bonds, 1985 Series A                                          10.2%    1/1/2016     411,384      
  2,100,000 Indianapolis, Indiana, Resource Recovery Revenue Bonds,                                                    
              Ogden Martin Systems, Series A                                         7.8%   12/1/2004   2,207,646      
    410,000 Indianapolis, Indiana, Resource Recovery Revenue Bonds,                                                    
              1985 Series A                                                          7.9%   12/1/2008     431,304      
  2,190,000 Indianapolis, Indiana, Resource Recovery Revenue Bonds,                                                    
              1985 Series B                                                          7.9%   12/1/2008   2,303,792      
                                                                                                     -------------     
                                                                                                        7,563,487      
                                                                                                     -------------     
            Iowa - 0.9%                                                                                                
  4,000,000 Iowa Finance Authority, Iowa State Revolving Fund Revenue                                                  
              Bonds, Combined Series 1993                                            5.2%    5/1/2023   3,558,680      
  2,000,000 Iowa Finance Authority, Iowa State Revolving Fund Revenue                                                  
              Bonds, Combined Series 1994                                           6.25%    5/1/2024   2,044,660      
                                                                                                     -------------     
                                                                                                        5,603,340      
                                                                                                     -------------     
            Kansas - 1.5%                                                                                              
  8,000,000 Kansas City, Kansas, Utility System Refunding and                                                          
              Improvement Revenue Bonds                                            6.375%    9/1/2023   8,203,440 (d)  
  1,255,000 Kansas City, Kansas, Utility System, Capital Appreciation                                                  
              Refunding & Improvement Revenue Bonds                          Zero Coupon     3/1/2007     643,539 (b,f)
    920,000 Kansas City, Kansas, Utility System, Capital Appreciation                                                  
              Refunding & Improvement Revenue Bonds                          Zero Coupon     3/1/2007     469,596 (f)  
                                                                                                     -------------     
                                                                                                        9,316,575      
                                                                                                     -------------     
            Kentucky - 0.7%                                                                                            
    115,000 Jefferson County, Kentucky, Home Mortgage Revenue Bonds,                                                   
              Series 1983                                                          9.625%    5/1/2014     118,717      
  1,000,000 Kentucky Development Finance Authority, Refunding and                                                      
              Improvement Revenue Bonds (Ashland Hospital, Kings                                                       
              Daughter Project)                                                     9.75%    8/1/2005   1,106,240      
  5,345,000 Kentucky Turnpike Authority, Economic Development                                                          
              Road Revenue Bonds                                             Zero Coupon     1/1/2010   2,240,945 (d)  
    750,000 Kentucky Turnpike Authority, Economic Development                                                          
              Road Revenue and Revenue Refunding Bonds, Series 1993                  5.5%    7/1/2009     737,640 (f)  
                                                                                                     -------------     
                                                                                                        4,203,542      
                                                                                                     -------------     
            Louisiana - 1.3%                                                                                           
  1,005,000 Alexandria, Louisiana, Utilities Revenue Bonds, Series B                 5.0%    5/1/2009     912,520 (d)  
  1,065,000 Alexandria, Louisiana, Utilities Revenue Bonds, Series B                 5.0%    5/1/2010     957,744 (d)  
  6,500,000 New Orleans, Louisiana, General Obligation Bonds, Series 1991    Zero Coupon     9/1/2012   2,238,340 (f)  
  3,000,000 Orleans Parish School Board #87, Louisiana, Escrowed to                                                    
              Maturity Bonds                                                        8.95%    2/1/2008   3,874,080 (b,c)
                                                                                                     -------------     
                                                                                                        7,982,684      
                                                                                                     -------------     
            Maine - 0.3%                                                                                               
  1,250,000 Maine Health & Higher Educational Facilities Authority, Revenue                                            
              Bonds, Series 1994                                                     7.0%    7/1/2024   1,335,762 (e)  
    350,000 Regional Waste Systems, Inc., Maine, Solid Waste Resource                                                  
              Recovery System Revenue Bonds, Series A,B,C                           7.95%    7/1/2010     384,408      
                                                                                                     -------------     
                                                                                                        1,720,170      
                                                                                                     -------------     
            Maryland - 3.1%                                                                                            
    600,000 City of Baltimore, Maryland (Mayor and City Council of                                                     
              Baltimore), Convention Center Revenue Bonds, Series 1994              6.15%    9/1/2019     605,436 (d)  
  1,250,000 Maryland Environmental Services, Revenue Bonds,                                                            
              (Garrett County Landfill Project), Series 1993                         5.5%    9/1/2013   1,184,962 (f)  
  2,000,000 Maryland Health & Higher Education Authority,                                                              
              Union Hospital of Cecil County Revenue Bonds, Series 1992              6.7%    7/1/2022   1,867,700      
  2,500,000 Maryland Health & Higher Education Facilities Authority,                                                   
              Project & Refunding Revenue Bonds (University of                                                         
              Maryland Medical System Issue), Series 1993                          5.375%    7/1/2013   2,328,375 (f)  
  3,000,000 Maryland Health & Higher Education Facilities Authority,                                                   
              Revenue Project & Refunding Bonds, (University of Maryland)            5.0%    7/1/2020   2,561,010 (d)  
  3,250,000 Maryland Health & Higher Education Facilities Authority,                                                   
              Revenue Refunding Bonds, (Suburban Hospital Issue),                                                      
              Series 1993                                                          5.125%    7/1/2021   2,770,593      
  4,500,000 Morgan State University, Maryland, Academic Fee and Auxiliary                                              
              Facilities Fees Revenue Refunding Bonds, Series 1993                  6.05%    7/1/2015   4,562,550 (c)  
  1,000,000 Prince George's County, Maryland, Dimensions Health Corp.,                                                 
              Hospital Revenue Bonds, Series 1992                                    7.0%    7/1/2022   1,126,570 (b)  
  2,000,000 Prince George's County, Maryland, Project & Refunding                                                      
              Revenue Bonds, (Dimensions Health Corporation Issue)                                                     
              Series 1994                                                            5.3%    7/1/2024   1,654,080      
                                                                                                     -------------     
                                                                                                       18,661,276      
                                                                                                     -------------     
            Massachusetts - 5.6%                                                                                       
  2,850,000 Commonwealth of Massachusetts, General Obligation Bonds,                                                   
              Series B                                                               9.0%   10/1/2004   2,971,439 (b)  
  2,000,000 Commonwealth of Massachusetts, General Obligation Refunding                                                
              Bonds, Series B                                                        6.5%    8/1/2008   2,147,080      
  1,800,000 Commonwealth of Massachusetts, Limited Tax General                                                         
              Obligation Bonds, Construction Loan, Series C                        7.375%   12/1/2008   1,980,792 (b)  
  5,000,000 Commonwealth of Massachusetts, General Obligation Bonds,                                                   
              Consolidated Loan of 1993, Series A                                    5.5%   11/1/2008   4,865,450      
  1,160,000 Massachusetts State, Consolidated Loan Bonds, Series A                  5.75%    2/1/2010   1,145,140 (c)  
  2,970,000 Massachusetts Health and Education Facilities Authority                                                    
              (Harvard University), Revenue Bonds, Series J                         8.75%   12/1/2007   3,086,691 (b)  
  1,500,000 Massachusetts Health and Education Facilities Authority                                                    
              (Newton - Wellesley Hospital) Revenue Bonds, Series C                  8.0%    7/1/2018   1,638,780      
  2,500,000 Massachusetts Health and Education Facilities Authority,                                                   
              Revenue Bonds, Daughters of Charity National Health System,                                              
              The Carney Hospital, Series D                                          6.1%    7/1/2014   2,447,275      
  1,500,000 Massachusetts Health and Education Facilities Authority,                                                   
              Revenue Bonds, Series F                                                6.5%    7/1/2012   1,575,795      
  1,000,000 Massachusetts Health and Education Facilities Authority                                                    
              (Lahey Clinic Medical Center), Series B                              5.625%    7/1/2015     951,900 (c)  
  5,000,000 Massachusetts State Port Authority, Revenue Bonds, Series B              6.0%    7/1/2023   4,886,600      
  4,000,000 Massachussetts State Turnpike Authority, Turnpike                                                          
              Revenue Bonds, Series A                                                5.0%    1/1/2020   3,446,840 (d)  
  3,000,000 Plymouth County, Massachusetts, Correctional Facility                                                      
              Certificates of Participation Bonds                                    7.0%    4/1/2012   3,182,010      
                                                                                                     -------------     
                                                                                                       34,325,792      
                                                                                                     -------------     
            Michigan - 5.3%                                                                                            
  1,000,000 Anchor Bay School District, Counties of Macomb and St. Clair,                                              
              Michigan, 1993 School Building and Site Bonds, Unlimited                                                 
              Tax General Obligation Bonds                                          5.25%    5/1/2014     897,910 (d)  
    500,000 Breckenridge, Michigan, Community Schools Unlimited                                                        
              Tax General Obligation Bonds                                           5.5%    5/1/2013     466,465 (f)  
 10,000,000 Detroit, Michigan, Sewer Disposal Revenue Bonds, Linked                                                    
              Pars & Inflows                                                         5.7%    7/1/2023   9,413,000 (d)  
  1,500,000 Gibraltar, Michigan, School District, Refunding Unlimited Tax                                              
              General Obligation Bonds                                               5.5%    5/1/2014   1,396,395 (f)  
  1,400,000 Kent County, Michigan, Limited Tax Guaranteed Obligations,                                                 
              Refuse Disposal System Refunding Bonds                                 8.3%   11/1/2007   1,542,660      
  1,500,000 Livonia Public Schools, County of Wayne, Michigan,                                                         
              1992 School Building and Site Bonds, Series II (Unlimited Tax                                            
              General Obligation)                                            Zero Coupon     5/1/2009     656,925 (b,d)
  2,460,000 Michigan Municipal Bond Authority, Government Loan Revenue                                                 
              Refunding Bonds, Series A                                      Zero Coupon    12/1/2005   1,367,735 (d)  
  2,750,000 Michigan State Hospital Finance Authority, Hospital Revenue                                                
              Bonds, (Holland Community Hospital), Series 1993                      5.25%    1/1/2008   2,534,290      
    390,000 Michigan State Hospital Finance Authority, Hospital Revenue                                                
              and Refunding Bonds, (Detroit Medical Center Obligated Group),                                           
              Hospital Revenue & Refunding Bonds, Series 1988-A                    8.125%   8/15/2012     434,518      
    110,000 Michigan State Hospital Finance Authority, Hospital Revenue                                                
              and Refunding Bonds, (Detroit Medical Center Obligated Group),                                           
              Hospital Revenue & Refunding Bonds, Series 1988-A                    8.125%   8/15/2012     117,809 (b)  
  1,100,000 Michigan State Hospital Finance Authority, Refunding Hospital                                              
              Bonds, St. Johns Hospital, Series A                                   5.75%   5/15/2016   1,043,482 (f)  
  2,000,000 Economic Development Corporation of the County of St. Clair,                                               
              Michigan, Pollution Control Revenue Refunding Bonds                                                      
              (Detroit Edison Company Project), Series 1993 AA                       6.4%    8/1/2024   2,050,740 (f)  
  3,320,000 Sault St. Marie Chippewa Indians Housing Authority,                                                        
              Health Facilities Revenue Bonds (Tribal Health & Human                                                   
              Services Center Project), Series 1992                                 7.75%    9/1/2012   3,363,326      
  1,000,000 Vicksburg, Michigan, Community Schools, Qualified School                                                   
              General Obligation Bonds, Kalamazoo & St. Joseph Counties              7.0%    5/1/2007   1,114,520 (b,c)
  3,000,000 West Bloomfield School District, Oakland County, Michigan,                                                 
              1994 School Building and Site Refunding Unlimited Tax                                                    
              General Obligation Bonds                                             5.125%    5/1/2014   2,658,240 (c)  
  3,455,000 West Ottawa, Michigan, Public School District, Unlimited Tax                                               
              General Obligation Bonds                                       Zero Coupon     5/1/2004   2,123,305 (c)  
  1,860,000 West Ottawa, Michigan, Public School District, Unlimited Tax                                               
              General Obligation Bonds                                       Zero Coupon     5/1/2005   1,072,346 (c)  
                                                                                                     -------------     
                                                                                                       32,253,666      
                                                                                                     -------------     
            Minnesota - 4.6%                                                                                           
  3,260,000 Duluth Economic Development Authority, Minnesota, Health                                                   
              Care Facility Revenue Bonds (Duluth Clinic, LTD) Series 1992           6.3%   11/1/2022   3,308,737      
  2,500,000 City of Minneapolis (Lifespan Inc., Abbott - Northwestern                                                  
              Hospital), Hospital Facilities Refunding Revenue Bonds,                                                  
              1987 Series B                                                        9.125%   12/1/2014   2,810,600 (b)  
  1,850,000 City of Minneapolis (Lifespan Inc., Abbott - Northwestern                                                  
              Hospital), Hospital Facilities Revenue Bonds, 1988 Series A          7.875%   12/1/2014   2,025,842 (b)  
  7,685,000 Minneapolis, Minnesota, Community Development Agency, Tax                                                  
              Increment Revenue Appreciation Bonds                           Zero Coupon     3/1/2009   3,472,775 (c)  
  3,500,000 St. Louis Park, Minnesota, Health Care Facilities (Park Nicollet                                           
              Medical Center Project), Revenue Bonds, Series 1990-A                 9.25%    1/1/2020   4,153,380 (b)  
  7,600,000 St. Louis Park, Minnesota, Health Care Facilities, Revenue Bonds                                           
              (HealthSystem Minnesota Obligated Group), Series 1993                  5.1%    7/1/2013   6,779,352 (f)  
  1,000,000 St. Louis Park, Minnesota, Health Care Facilities, Revenue Bonds                                           
              (HealthSystem Minnesota Obligated Group), Series 1993                  5.2%    7/1/2016     895,940 (f)  
  1,400,000 St. Louis Park, Minnesota (Methodist Hospital), Hospital Revenue                                           
              Bonds, Series C                                                       7.25%    7/1/2015   1,566,572 (b,f)
  1,180,000 St. Louis Park, Minnesota (Methodist Hospital), Hospital Revenue                                           
              Bonds, Series A                                                       7.25%    7/1/2015   1,306,166 (b,f)
  1,000,000 St. Louis Park, Minnesota (Methodist Hospital), Hospital Revenue                                           
              Bonds, Series C                                                       7.25%    7/1/2018   1,118,980 (b,f)
    670,000 Southern Minnesota Municipal Power Agency, Power Revenue                                                   
              Refunding Bonds, Series A                                             5.75%    1/1/2018     669,940 (b,c)
                                                                                                     -------------     
                                                                                                       28,108,284      
                                                                                                     -------------     
            Missouri - 2.4%                                                                                            
  2,000,000 Boone County, Missouri, Hospital Revenue Refunding Bonds,                                                  
              Series 1993                                                            5.5%    8/1/2009   1,841,980      
  1,500,000 Missouri Health and Educational Facilities Authority, SSM                                                  
              Health Care Refunding Revenue Bonds, Series A                         6.25%    6/1/2007   1,560,960 (c)  
  2,450,000 Missouri Health and Educational Facilities Authority, Heartland                                            
              Health System Revenue Bonds, Series 1992                              6.35%  11/15/2017   2,506,130 (f)  
  1,425,000 Missouri Health and Educational Facilities Authority, Health                                               
              Facilities Revenue Refunding Bonds, Lester E. Cox Medical                                                
              Center Project, Series 1993-I                                         5.35%    6/1/2009   1,342,906 (c)  
  3,000,000 Missouri Health and Educational Facilities Authority, Health                                               
              Facilities Revenue Bonds, (Barnes-Jewish, Inc./Christian                                                 
              Health Services), Series 1993-A                                       5.25%   5/15/2012   2,741,040      
  2,650,000 Missouri Health and Educational Facilities Authority                                                       
              (Christian Health Services), Health Facilities Refunding &                                               
              Improvement Revenue Bonds, Series 1991 A                             6.875%   2/15/2021   2,929,204 (b,d)
  2,000,000 St. Louis County, Missouri, Industrial Development Authority,                                              
              Revenue Refunding Bonds (K-Mart Corp. Project)                         5.7%   10/1/2008   1,774,500      
                                                                                                     -------------     
                                                                                                       14,696,720      
                                                                                                     -------------     
            Montana - 1.0%                                                                                             
  1,250,000 Montana Health Facility Authority, Hospital Revenue Bonds                                                  
              for the Deaconess-Billings Clinic Health System Project,                                                 
              Series 1994                                                           5.25%   2/15/2020   1,134,212 (d)  
  4,400,000 Montana State Board of Investments, Payroll Tax Revenue Bonds,                                             
              Series 1991                                                          6.875%    6/1/2020   4,686,616 (c)  
                                                                                                     -------------     
                                                                                                        5,820,828      
                                                                                                     -------------     
            Nebraska - 0.7%                                                                                            
     60,000 Nebraska Mortgage Finance Fund, Single Family Mortgage                                                     
              Revenue Bonds, 1983 Series A                                        10.125%   1/15/2014      61,403      
  3,455,000 Omaha Public Power District, Nebraska, Electric Revenue                                                    
              Refunding Bonds, Series B                                             6.15%    2/1/2012   3,549,391      
  1,000,000 University of Nebraska, University of Nebraska Medical                                                     
              Center Project, Revenue Refunding Bonds                               5.25%    7/1/2011     922,040      
                                                                                                     -------------     
                                                                                                        4,532,834      
                                                                                                     -------------     
            New Hampshire - 0.2%                                                                                       
  1,100,000 New Hampshire Turnpike System, Residual Interest Bonds,                                                    
              1991 Refunding, Series C                                              9.12%   11/1/2017   1,219,570 (d,h)
                                                                                                     -------------     
            New Jersey - 2.5%                                                                                          
  1,700,000 Camden County, New Jersey, Municipal Utility Authority,                                                    
              Sewer Revenue Bonds                                                   8.25%   12/1/2017   1,858,627 (d)  
  1,250,000 East Orange, New Jersey, Unlimited Tax General Obligation                                                  
              Bonds                                                                  8.4%    8/1/2006   1,554,300 (e)  
  1,000,000 Mercer County, New Jersey, Improvement Authority, County                                                   
              Guaranteed Solid Waste Revenue Bonds, Series 1988                      7.9%    4/1/2013   1,075,910 (b)  
  1,000,000 Mercer County, New Jersey, Improvement Authority,                                                          
              Revenue Bonds, Series 1991                                             6.6%   11/1/2014   1,088,700 (b)  
  2,585,000 New Jersey Health Care Facilities Financing Authority,                                                     
              Jersey Shore Medical Center Revenue Bonds                              6.1%    7/1/2010   2,624,447 (f)  
  3,000,000 New Jersey Transit Corp. (Raymond Plaza East, Inc.),                                                       
              Certificates of Participation                                        6.375%   10/1/2006   3,227,910 (e)  
  1,520,000 New Jersey Turnpike Authority, Turnpike Revenue Bonds,                                                     
              1984 Series                                                         10.375%    1/1/2003   1,854,126 (b)  
  2,195,000 West New York, New Jersey, Municipal Utility Authority,                                                    
              Sewer Revenue Refunding Bonds                                  Zero Coupon   12/15/2007   1,077,811 (d)  
  2,595,000 West New York, New Jersey, Municipal Utility Authority,                                                    
              Sewer Revenue Refunding Bonds                                  Zero Coupon   12/15/2009   1,111,153 (d)  
                                                                                                     -------------     
                                                                                                       15,472,984      
                                                                                                     -------------     
            New Mexico - 1.3%                                                                                          
  1,325,000 Albuquerque, New Mexico (Southwest Community Health                                                        
              Services), Hospital Revenue Bonds, Series A                            9.5%    8/1/2006   1,380,465 (b)  
  5,000,000 Farmington, New Mexico, Power Revenue Refunding Bonds,                                                     
              Series 1983                                                          9.875%    1/1/2013   6,754,400 (b)  
                                                                                                     -------------     
                                                                                                        8,134,865      
                                                                                                     -------------     
            New York - 4.9%                                                                                            
  5,200,000 Metropolitan Transportation Authority, New York, Commuter                                                  
              Facilities Revenue Bonds, Series A                                   6.375%    7/1/2018   5,322,408 (c)  
  7,000,000 Metropolitan Transportation Authority, New York, Service                                                   
              Contract Commuter Facilities Revenue Bonds, Series P                  5.75%    7/1/2015   6,414,100      
  3,000,000 Metropolitan Transportation Authority, New York, Transit                                                   
              Facilities Revenue Bonds, Series B                                    6.25%    7/1/2014   3,052,710 (c)  
  1,250,000 New York City Municipal Water Finance Authority,                                                           
              Water & Sewer System Revenue Bonds                                    8.75%   6/15/2010   1,376,375 (b)  
  2,000,000 New York City Municipal Water Finance Authority,                                                           
              Water & Sewer System Revenue Bonds, Series A                         5.875%   6/15/2012   1,986,000 (f)  
  2,000,000 New York State Dorm Authority (City University),                                                           
              Construction Revenue Bonds, Series A                                 8.125%    7/1/2017   2,180,040 (b)  
  2,250,000 New York State Med Care Facilities Finance Agency                                                          
              (Ellis Hospital), Insured Mortgage Hospital Bonds, Series B            8.0%   2/15/2008   2,471,062 (i)  
  2,860,000 New York State Thruway Authority, Highway & Bridge                                                         
              Trust Fund, Revenue Bonds, Series 1994B                                6.0%    4/1/2014   2,834,289 (d)  
  2,000,000 New York State Development Corp., Correctional Facilities                                                  
              Refunding Bonds, Series A                                              5.5%    1/1/2016   1,765,940      
  1,000,000 Triborough Bridge & Tunnel Authority, New York, General                                                    
              Purpose Revenue Bonds, Series Q                                       6.75%    1/1/2009   1,082,750      
  1,900,000 Triborough Bridge & Tunnel Authority, New York, General                                                    
              Purpose Revenue Refunding Bonds, Series A                              5.0%    1/1/2015   1,664,362      
                                                                                                     -------------     
                                                                                                       30,150,036      
                                                                                                     -------------     
            North Carolina - 0.7%                                                                                      
    500,000 Dare County, North Carolina, Utility System Revenue Bonds,                                                 
              Series 1994                                                           5.75%    6/1/2014     494,270 (c)  
  4,000,000 North Carolina Municipal Power Agency Number 1, Catawba                                                    
              Electric Revenue Refunding Bonds, Series 1992                          6.0%    1/1/2011   4,044,200 (c)  
                                                                                                     -------------     
                                                                                                        4,538,470      
                                                                                                     -------------     
            North Dakota - 0.4%                                                                                        
  2,530,000 North Dakota Municipal Bond Bank, State Revolving Fund                                                     
              Program Bonds, Series 1995-A                                           6.3%   10/1/2015   2,568,987      
                                                                                                     -------------     
            Ohio - 4.7%                                                                                                
  1,050,000 Akron, Bath & Copley Joint Township, Ohio (Children's                                                      
              Hospital Medical Center), Hospital District Revenue Bonds             7.45%  11/15/2020   1,191,593 (b,f)
  3,785,000 Cleveland, Ohio, Public Power System, First Mortgage                                                       
              Revenue Bonds, Series 1994A                                            7.0%  11/15/2024   4,083,523 (c)  
  1,000,000 Cleveland, Ohio, Waterworks Improvement First Mortgage                                                     
              Refunding Revenue Bonds, Series 1993G                                  5.5%    1/1/2009     977,410 (c)  
  1,945,000 Columbus, Ohio, Unlimited Tax General Obligation Bonds,                                                    
              Series 1                                                              5.25%   9/15/2011   1,813,323      
  1,630,000 Cuyahoga County, Ohio (Deaconess Hospital), Hospital                                                       
              Revenue Bonds, Series C                                               7.45%   10/1/2018   1,850,278 (b)  
  1,470,000 Lorain County, Ohio (Humility of Mary Health System), Hospital                                             
              Revenue Bonds                                                        7.125%  12/15/2006   1,578,074      
  2,250,000 Ohio State Air Quality Development Authority, Columbus &                                                   
              Southern Pollution Control Revenue Bonds                             6.375%   12/1/2020   2,297,497 (d)  
  5,000,000 Ohio State Air Quality Development Authority, Cleveland Electric,                                          
              Pollution Control Revenue Bonds                                        8.0%   12/1/2013   5,790,850 (d)  
  1,500,000 Ohio Higher Educational Facility Commission, Higher                                                        
              Educational Revenue Bonds, (Ohio Dominican College                                                       
              1994 Project                                                         6.625%   12/1/2014   1,502,895      
  2,000,000 Ohio Higher Educational Facility Commission (Case Western                                                  
              Reserve University Project), Series B                                  6.5%   10/1/2020   2,140,300      
  4,100,000 Ohio State Water Development Authority, Revenue Refunding &                                                
              Improvement Bonds                                                      5.5%   12/1/2018   3,833,131 (f)  
  1,795,000 Trumbull County, Ohio (Memorial Hospital), Hospital Revenue                                                
              Refunding & Improvement Bonds, Series 1991-B                           6.9%  11/15/2012   1,918,837 (d)  
                                                                                                     -------------     
                                                                                                       28,977,711      
                                                                                                     -------------     
            Oklahoma - 1.7%                                                                                            
  5,220,000 Bass, Oklahoma, Memorial Baptist Hospital, Escrowed to Maturity         8.35%    5/1/2009   6,512,263 (b)  
  1,175,000 Grand River Dam Authority, Oklahoma, Revenue Refunding Bonds,                                              
              Series 1993                                                           5.75%    6/1/2008   1,192,214 (e)  
  1,500,000 Oklahoma Municipal Power Authority, Power Supply System                                                    
              Revenue Bonds, Series 1992-B                                         5.875%    1/1/2012   1,518,180 (c)  
  1,500,000 Oklahoma Municipal Power Authority, Electric Revenue Refunding                                             
              Bonds, Series B                                                       5.75%    1/1/2024   1,477,080 (c)  
                                                                                                     -------------     
                                                                                                       10,699,737      
                                                                                                     -------------     
            Oregon - 1.8%                                                                                              
  2,700,000 Clackamas County, Oregon, Health Facilities Authority, Adventist                                           
              Health-West Revenue Refunding Bonds, Series 1992-A                    6.35%    3/1/2009   2,833,434 (c)  
    850,000 Clackamas County, Oregon, North Clackamas School District                                                  
              No. 12, Unlimited Tax General Obligation Refunding Bonds,                                                
              Series 1993                                                            5.0%    6/1/2011     752,641      
  1,000,000 Emerald Peoples Utility District, Oregon, Electric System Revenue                                          
              Refunding Bonds                                                       5.75%   11/1/2016     986,640      
  1,750,000 Washington & Multnomah Counties, Oregon, Beaverton School                                                  
              District No. 48J, Unlimited Tax General Obligation Bonds               5.0%    9/1/2012   1,575,122      
  1,275,000 Washington & Multnomah Counties, Oregon, Beaverton School                                                  
              District No. 48J, General Obligation Bonds, Series 1994C               5.8%    6/1/2014   1,263,321      
  3,500,000 Hospital Facility Authority of the Western Lane Hospital District,                                         
              Oregon, Revenue Refunding Bonds, Series 1994                                                             
              (Sisters of St. Joseph of Peace, Health & Hospital Services)         5.875%    8/1/2012   3,467,835 (c)  
                                                                                                     -------------     
                                                                                                       10,878,993      
                                                                                                     -------------     
            Pennsylvania - 2.7%                                                                                        
  2,100,000 Allegheny County, Pennsylvania, Hospital Development Authority,                                            
              Hospital Revenue Bonds, Series A-1995, (Allegheny General                                                
              Hospital Project)                                                      6.2%    9/1/2015   2,101,554 (c)  
  2,575,000 Allegheny County, Pennsylvania, Sanitary Authority,                                                        
              Sewer Revenue Bonds, Series A                                  Zero Coupon     6/1/2008   1,193,461 (d)  
  2,000,000 Delaware River Joint Toll Bridge Commission, Pennsylvania,                                                 
              Toll Bridge Revenue Bonds                                            7.875%    7/1/2018   2,209,240 (b)  
  3,170,000 Millcreek Township, Pennsylvania, School District, General                                                 
              Obligation Bonds                                               Zero Coupon    8/15/2009   1,374,322 (d)  
  2,000,000 Monroeville, Pennsylvania, Hospital Authority, Forbes Health                                               
              System Revenue Bonds, Series 1992                                      7.0%   10/1/2003   2,043,040      
  2,500,000 Pennsylvania Housing Finance Agency, Rental Housing                                                        
              Refunding Bonds, Issue 1993                                           5.75%    7/1/2014   2,374,650      
  3,000,000 Pennsylvania State, General Obligation Bonds, 2nd Series of 1992 Zero Coupon     7/1/2006   1,597,410 (f)  
  1,000,000 Pennsylvania State Higher Education Facilites Authority,                                                   
              State System Revenue Bonds, Series K                                   5.5%   6/15/2011     950,720 (f)  
  1,105,000 Shamokin Area Industrial Development Authority, Pennsylvania                                               
              (Northumberland County), Commercial Development First                                                    
              Mortgage Revenue Refunding Bonds, Series 1994A,                                                          
              (K-Mart Corporation, Tenant and Guarantor)                             6.7%    7/1/2007   1,102,138      
  1,300,000 Southeastern Pennsylvania Transportation Authority, Special                                                
              Revenue Bonds, Series A                                               5.75%    3/1/2020   1,261,455 (d)  
                                                                                                     -------------     
                                                                                                       16,207,990      
                                                                                                     -------------     
            Puerto Rico - 1.7%                                                                                         
  2,000,000 Puerto Rico Commonwealth, Unlimited Tax General                                                            
              Obligation Bonds                                                      6.45%    7/1/2017   2,034,780      
  4,000,000 Puerto Rico Commonwealth Aqueduct & Sewer, Revenue Bonds,                                                  
              Series A                                                               9.0%    7/1/2009   5,150,320 (b)  
  3,000,000 Puerto Rico Electric Power Authority, Power Revenue Bonds,                                                 
              Series T                                                               6.0%    7/1/2016   2,912,340      
                                                                                                     -------------     
                                                                                                       10,097,440      
                                                                                                     -------------     
            South Carolina - 1.8%                                                                                      
  2,000,000 Greenville, South Carolina, Hospital System, Hospital Facility                                             
              Revenue Bonds, Series A                                                7.5%    5/1/2016   2,073,900 (b,d)
  2,000,000 Piedmont Municipal Power Agency, South Carolina, Electric                                                  
              Revenue Refunding Bonds, Series 1991                                  6.25%    1/1/2021   2,067,500 (d)  
  5,000,000 Piedmont Municipal Power Agency, South Carolina, Electric                                                  
              Revenue Refunding Bonds                                                5.0%    1/1/2022   4,221,900 (d)  
  2,500,000 South Carolina Public Service Authority, Electric System Revenue                                           
              Bonds, 1985 Refunding Series                                           9.5%    7/1/2022   2,596,625 (b)  
                                                                                                     -------------     
                                                                                                       10,959,925      
                                                                                                     -------------     
            Tennessee - 0.7%                                                                                           
  1,750,000 Bristol, Tennessee, Health and Educational Facilities Authority,                                           
              Bristol Memorial Hospital Revenue Bonds                                7.0%    9/1/2021   1,946,298 (b,d)
  1,125,000 Knox-Chapman Utility District, Tennessee, Knox County                                                      
              Water and Sewer Revenue Refunding Bonds                                6.0%    1/1/2014   1,113,694 (c)  
  1,000,000 Sullivan County, Tennessee, Health & Education Revenue Bonds,                                              
              (Holston Valley Health)                                               5.75%   2/15/2013     964,330 (c)  
                                                                                                     -------------     
                                                                                                        4,024,322      
                                                                                                     -------------     
            Texas - 9.7%                                                                                               
  2,165,000 Arlington, Texas, Independent School District, Unlimited Tax                                               
              Refunding & Improvement Bonds, Series 1992                     Zero Coupon    2/15/2009     947,296 (j)  
  7,000,000 Austin, Texas, Utility System Refunding Revenue Bonds,                                                     
              Series A                                                       Zero Coupon   11/15/2008   3,113,250 (c)  
  8,100,000 Austin, Texas, Utility System Refunding Revenue Bonds,                                                     
              Series A                                                       Zero Coupon   11/15/2009   3,355,020 (c)  
  2,500,000 Bexar Metropolitan Water District, Texas, Waterworks System                                                
              Revenue Bonds, Series 1994                                             5.0%    5/1/2019   2,136,250 (f)  
  1,000,000 Brazos River Authority, Texas, Collateralized Revenue Refunding                                            
              Bonds (Houston Lighting & Power Company), 1988 Series B               8.25%    5/1/2015   1,068,690      
  2,000,000 Brazos River Authority, Texas, Houston Light and Power                                                     
              Refunding Bonds                                                       8.25%    5/1/2015   2,196,460 (c)  
  2,000,000 Copperas Cove, Texas, Independent School District,                                                         
              Unlimited Tax General Obligation Bonds                                 6.9%   8/15/2014   2,123,460 (j)  
  1,500,000 Crowley, Texas, Independent School District Unlimited Tax                                                  
              General Obligation Bonds                                               5.4%    8/1/2009   1,432,440 (j)  
  3,000,000 Dallas-Fort Worth, Texas, Airport Joint Revenue Refunding Bonds,                                           
              Series 1985                                                          9.125%   11/1/2015   3,139,980      
  1,000,000 Dallas-Fort Worth, Texas, Airport Joint Revenue Refunding Bonds        7.375%   11/1/2008   1,124,080 (d)  
  1,000,000 Dallas-Fort Worth, Texas, Airport Joint Revenue Refunding Bonds        7.375%   11/1/2009   1,117,330 (d)  
  2,000,000 Dallas-Fort Worth, Texas, Airport Joint Revenue Refunding Bonds        7.375%   11/1/2010   2,234,660 (d)  
  4,000,000 Dallas and Fort Worth, Texas, Dallas-Fort Worth International                                              
              Airport Joint Revenue Refunding Bonds, Series 1994A                    6.0%   11/1/2012   3,970,040 (c)  
  2,285,000 Denton, Texas, Independent School District Unlimited Tax                                                   
              General Obligation Refunding Bonds                                    6.25%   2/15/2009   2,376,971 (j)  
  1,000,000 Georgetown, Texas, Higher Education Finance Corp., Higher                                                  
              Education Revenue Bonds, Series 1994 (Southwestern                                                       
              University Project)                                                    6.3%   2/15/2014     985,810      
  1,750,000 Harris County, Texas, Toll Road, Unlimited Tax & Subordinated                                              
              Lien, Revenue Refunding Bonds, Series 1988                           8.125%    8/1/2015   1,950,760 (b)  
  2,250,000 Harris County, Texas, Toll Road Sr. Lien Bonds, Series A               6.375%   8/15/2024   2,290,455 (c)  
  1,360,000 Houston, Texas, Housing Finance Corp., Single Family Mortgage                                              
              Revenue Bonds, Series 1983                                            10.0%   9/15/2014   1,382,685      
  1,280,000 Houston, Texas, Water & Sewer Systems, Exchange Pre-Refunded                                               
              Jr. Lien Revenue Bonds                                               9.375%   12/1/2013   1,340,634 (b,d)
    220,000 Houston, Texas, Water & Sewer Systems, Exchange Pre-Refunded                                               
              Jr. Lien Revenue Bonds                                               9.375%   12/1/2013     230,421 (b,d)
  3,000,000 Leander Independent School District, Texas (Travis and                                                     
              Williamson Counties), Unlimited Tax School Building and                                                  
              Refunding Bonds, Series 1994A                                          6.0%   8/15/2018   2,969,970 (j)  
  1,000,000 Lower Colorado River Authority, Priority Refunding Revenue                                                 
              Bonds, Series 1985                                                     9.5%    1/1/2011   1,051,720 (b)  
  1,845,000 San Antonio, Texas, Airport Revenue Refunding Bonds                    7.375%    7/1/2010   2,062,323 (f)  
  1,000,000 San Antonio, Texas, Airport Revenue Refunding Bonds                    7.375%    7/1/2011   1,117,790 (f)  
 11,615,000 Southeastern Texas Housing Finance Corp., Single Family                                                    
              Mortgage Revenue Bonds                                         Zero Coupon     9/1/2017   2,667,617 (b)  
    900,000 Texas Municipal Power Agency, Revenue Refunding Bonds                   5.75%    9/1/2012     929,745 (b.c)
    600,000 Texas Municipal Power Agency, Revenue Refunding Bonds                   5.75%    9/1/2012     619,830 (b.c)
  4,315,000 Texas State, Veterans Land Board General Obligation Bonds               0.05%    7/1/2010   1,769,711 (b)  
  2,500,000 Travis County, Texas, Housing Finance Corporation, Single                                                  
              Family Mortgage Revenue Refunding Bonds, Series 1994-A                6.75%    4/1/2014   2,576,125      
  3,650,000 Willis, Texas, Independent School District, Refunding Bonds              6.5%   2/15/2016   3,725,555 (j)  
  1,175,000 Wylie, Texas, Independent School District, (Collin County),                                                
              Unlimited Tax School Building and Refunding Bonds,                                                       
              Series 1994                                                          6.875%   8/15/2014   1,287,177 (j)  
                                                                                                     -------------     
                                                                                                       59,294,255      
                                                                                                     -------------     
            Utah - 3.0%                                                                                                
  6,000,000 Intermountain Power Agency, Utah, Power Supply Revenue Bonds,                                              
              1985 Series A                                                       10.375%    7/1/2016   6,195,960 (b)  
  2,000,000 Intermountain Power Agency, Utah, Power Supply Revenue Bonds,                                              
              1985 Series B                                                        9.375%    7/1/2001   2,057,280 (b)  
  1,400,000 Intermountain Power Agency, Utah, Power Supply Revenue Bonds,                                              
              1985 Series 1                                                          9.0%    7/1/2019   1,429,134 (b)  
  1,000,000 Intermountain Power Agency, Utah, Power Supply Revenue Bonds,                                              
              Series A                                                               6.0%    7/1/2009   1,002,700 (c)  
  2,445,000 St. George-Washington County, Utah, Water Revenue Refunding                                                
              Bonds, Series 1993                                                   5.375%    6/1/2016   2,247,053 (f)  
  3,750,000 Utah Associated Municipal Power Systems, San Juan Project                                                  
              Revenue Bonds, Series O                                               6.25%    6/1/2014   3,785,550 (c)  
  1,580,000 West Valley City, Utah, Municipal Building Authority, Lease                                                
              Refunding Bonds                                                        6.0%   1/15/2010   1,578,294 (c)  
                                                                                                     -------------     
                                                                                                       18,295,971      
                                                                                                     -------------     
            Virginia - 2.6%                                                                                            
  3,000,000 Fairfax County, Virginia, Economic Development Authority,                                                  
              Lease Revenue Bonds, (Government Center Properties)                                                      
              Series 1994                                                            5.5%   5/15/2014   2,844,120      
  1,000,000 University of Virginia, General University Revenue Bonds,                                                  
              Series B                                                             5.375%    6/1/2010     965,410      
  4,000,000 Upper Occoquan Sewage Authority, Virginia, Regional Sewerage                                               
              System Revenue Refunding Bonds, Series 1993                            5.0%    7/1/2021   3,423,520 (d)  
  2,000,000 Virginia State, Unlimited Tax General Obligation Bonds                   6.5%    6/1/2015   2,102,440      
  4,300,000 Virginia Housing Development Authority, Commonwealth                                                       
              Mortgage Bonds, 1994 Series H, Subseries H-2                           6.5%    1/1/2014   4,352,073      
  2,000,000 Winchester Industrial Development Authority, Virginia                                                      
              (Winchester Medical Center), Hospital Revenue Bonds                  8.125%    1/1/2014   2,086,560 (b)  
                                                                                                     -------------     
                                                                                                       15,774,123      
                                                                                                     -------------     
            Washington - 5.3%                                                                                          
  1,655,000 Douglas County, Washington, Public Utility District #1,                                                    
              Wells Hydroelectric Revenue Bonds, Series A                           8.75%    9/1/2018   2,169,109 (b)  
  1,395,000 Douglas County, Washington, Public Utility District #1,                                                    
              Wells Hydroelectric Revenue Bonds, Series A                           8.75%    9/1/2018   1,732,297      
  2,000,000 Grant County, Washington, Public Utility District #2,                                                      
              Columbia River, Second Revenue Bonds, Series A                         5.0%    1/1/2023   1,668,180 (f)  
  5,000,000 King County, Washington, Unlimited Tax General Obligation                                                  
              Bonds, Series A                                                       6.75%   12/1/2009   5,395,550      
  2,015,000 Tacoma, Washington, Utilities Refuse Revenue Bonds                     6.625%   12/1/2011   2,106,138 (c)  
  2,400,000 Washington State, Unlimited Tax General Obligation Bonds                 6.7%    6/1/2016   2,598,240 (b)  
  1,500,000 Washington State, Unlimited Tax General Obligation Bonds,                                                  
              Series A                                                              6.25%    2/1/2011   1,548,495      
  2,500,000 Washington State, Various Purpose General Obligation Bonds              6.25%    6/1/2010   2,591,475      
  2,000,000 Washington State, Unlimited Tax General Obligation Bonds                 6.0%    6/1/2012   2,004,120      
  3,000,000 Washington State, Unlimited Tax General Obligation Bonds,                                                  
              Series 1993-A                                                         5.75%   10/1/2012   2,910,030      
  5,000,000 Washington State Public Power Supply System                                                                
              (Nuclear Project No. 1), Revenue Refunding Bonds                       7.5%    7/1/2015   5,365,150      
  1,000,000 Washington State Public Power Supply System                                                                
              (Nuclear Project No. 3), Revenue Refunding Bonds                      7.25%    7/1/2015   1,103,820 (b,d)
  2,500,000 Washington State Public Power Supply System                                                                
              (Nuclear Project No. 3), Revenue Refunding Bonds Series B      Zero Coupon     7/1/2010     992,400 (c)  
                                                                                                     -------------     
                                                                                                       32,185,004      
                                                                                                     -------------     
            Wisconsin - 0.3%                                                                                           
  2,000,000 Wisconsin Health and Education Facilities Authority, Revenue                                               
              Bonds, (Sisters of the Sorrowful Mother-Ministry Corporation),                                           
              Series 1993-D                                                          5.4%   8/15/2013   1,826,260 (c)  
                                                                                                     -------------     
            Wyoming - 0.4%                                                                                             
  2,500,000 State of Wyoming Farm Loan Board, Capital Facilities Revenue                                               
              Bonds, Series 1994                                                     6.1%    4/1/2024   2,473,025      
                                                                                                     -------------     
              Total Long-Term Municipal Securities (cost $587,132,169)                                606,582,217      
            ----------------                                                                                           

            SHORT-TERM MUNICIPAL SECURITIES - 0.9% (a,k)                                                               
    100,000 Berkeley County, South Carolina, (Amoco Chemical                                                           
              Company Project)                                                       4.9%    5/1/1995     100,000      
    100,000 Hammond, Indiana, Pollution Control Revenue Refunding Bonds,                                               
              (Amoco Oil Company Project), Series 1994                               4.9%    5/1/1995     100,000      
  1,200,000 Lake Charles Harbor & Terminal District, Louisiana                                                         
              (Conoco, Inc.)                                                         5.0%    5/1/1995   1,200,000      
    900,000 Maricopa County, Arizona, Pollution Control Corporation,                                                   
              Pollution Control Revenue Refunding Bonds (Arizona Public                                                
              Service Company Palo Verde Project), Series 1994 B                     4.9%    5/1/1995     900,000      
  1,900,000 Maricopa County, Arizona, Pollution Control Corporation,                                                   
              Pollution Control Revenue Refunding Bonds (Arizona Public                                                
              Service Company Palo Verde Project), Series 1994 E                     5.0%    5/1/1995   1,900,000      
    840,000 Peninsula Ports Authority, Virginia                                      5.0%    5/1/1995     840,000      
    300,000 Sublette County, Wyoming (Exxon Project, Series 1985)                    4.9%    5/1/1995     300,000      
                                                                                                     -------------     
              Total Short-Term Municipal Securities (at amortized cost)                                 5,340,000      
                                                                                                     -------------     
              Total Investments (cost $592,472,169)                                                  $611,922,217 (l)  
                                                                                                     =============     

See accompanying notes to portfolio of investments.                                                                    

Notes to Portfolio of Investments:                                                                                     
(a) The categories of investments are shown as a percentage of total                                                   
investments of the Lutheran Brotherhood Municipal Bond Fund.                                                           
(b) Denotes securities that have been pre-refunded or escrowed to maturity.                                            
Under such an arrangement, money is deposited into an irrevocable escrow                                               
account and is used to purchase U.S. Treasury securities or Government                                                 
Agency securities with maturing principal and interest earnings sufficient                                             
to pay all debt service requirements of the pre-refunded bonds. Because the                                            
original bonds assume a quality rating equivalent to the escrowed U.S.                                                 
Government securities, they are considered to be U.S. Government securities                                            
for purposes of portfolio diversification requirements.                                                                
(c) Insured by Municipal Bond Investors Assurance Corp.                                                                
(d) Insured by Financial Guaranty Insurance Co.                                                                        
(e) Insured by Financial Security Assurance, Inc.                                                                      
(f) Insured by AMBAC Indemnity Corp.                                                                                   
(g) Insured by Connie Lee Insurance Co.                                                                                
(h) Denotes variable rate obligations for which the interest rate varies                                               
inversly with movements in short-term tax-exempt yields.                                                               
(i) Insured by Federal Housing Administration.                                                                         
(j) Insured by Permanent School Fund Guarantee.                                                                        
(k) Denotes variable rate obligations for which the current yield and the                                              
next scheduled interest reset date are shown.                                                                          
(l) At April 30, 1995, the aggregate cost of securities for federal income                                             
tax purposes was $592,472,169 and the net unrealized appreciation of                                                   
investments based on that cost was $19,450,048 which is comprised of                                                   
$26,570,086 aggregate gross unrealized appreciation and $7,120,038                                                     
aggregate gross unrealized depreciation.                                                                               

The accompanying notes are an integral part of the financial statements.                                               

                                                        [Enlarge/Download Table]

                                Lutheran Brotherhood Money Market Fund                                              
                                       Portfolio of Investments                                                     
                                            April 30, 1995                                                          
                                             (Unaudited)                                                            

 Principal                                                                                Maturity                  
   Amount                                                                       Rate        Date        Value       
------------                                                                -------------------------------------   
                                                                                                                    
            BANKER'S ACCEPTANCES - 4.1% (a)                                                                         
 $4,522,749 Banker's Trust Co., Canada                                             6.11%  10/10/1995  $4,398,396    
  5,000,000 First Bank, N.A., Minneapolis                                          6.52%   6/13/1995   4,961,061    
  3,000,000 First Bank, N.A., Minneapolis                                          6.02%    5/9/1995   2,995,987    
                                                                                                    -------------   
              Total Banker's Acceptances                                                              12,355,444    
                                                                                                    -------------   

            COMMERCIAL PAPER - 84.1% (a)                                                                            
            Banking-Domestic - 4.9%                                                                                 
  5,000,000 AES Barbers Point, Inc., Bank of America, Direct Pay                                                    
              Letter of Credit                                                     6.02%   5/12/1995   4,990,803    
  5,000,000 Norwest Corp.                                                          6.02%   5/23/1995   4,981,606    
  5,000,000 Norwest Corp.                                                          6.02%    6/9/1995   4,967,392    
                                                                                                    -------------   
                                                                                                      14,939,801    
                                                                                                    -------------   
            Banking-Foreign - 14.0%                                                                                 
  5,000,000 Accor S.A. (Banque National de Paris, Direct Pay                                                        
              Letter of Credit)                                                    6.08%    6/7/1995   4,968,756    
  5,000,000 Accor S.A. (Banque National de Paris, Direct Pay                                                        
              Letter of Credit)                                                    6.06%    6/1/1995   4,973,908    
  1,000,000 Accor S.A. (Banque National de Paris, Direct Pay                                                        
              Letter of Credit)                                                    6.05%   5/23/1995     996,303    
  6,000,000 Centerior Fuel Corp., (Barclay's Bank, PLC, Direct Pay                                                  
              Letter of Credit)                                                    6.05%    5/3/1995   5,997,983    
  5,000,000 Finance One Funding Corp., (Credit Suisse, Direct Pay                                                   
              Letter of Credit)                                                    6.07%   5/19/1995   4,984,825    
  3,000,000 Finance One Funding Corp., (Credit Suisse, Direct Pay                                                   
              Letter of Credit)                                                    6.08%   6/30/1995   2,969,600    
  5,000,000 PEMEX Capital, Inc., (Credit Suisse, Direct Pay Letter of Credit       5.96%   5/24/1995   4,980,961    
  5,000,000 U.S. Prime Property, Inc., (ABN AMRO Bank, N.V.,                                                        
              Direct Pay Letter of Credit)                                         6.07%    7/7/1995   4,943,515    
  4,000,000 U.S. Prime Property, Inc., (ABN AMRO Bank, N.V.,                                                        
              Direct Pay Letter of Credit)                                         6.07%   6/19/1995   3,966,952    
  4,000,000 U.S. Prime Property, Inc., (ABN AMRO Bank, N.V.,                                                        
              Direct Pay Letter of Credit)                                         6.06%   6/26/1995   3,962,293    
                                                                                                    -------------   
                                                                                                      42,745,096    
            Computer & Office Equipment - 3.3%                                                      -------------   

  5,000,000 IBM Credit Corp.                                                       6.05%    7/5/1995   4,945,382    
  5,000,000 IBM Credit Corp.                                                       6.05%    7/7/1995   4,943,701    
                                                                                                    -------------   
                                                                                                       9,889,083    
                                                                                                    -------------   
            Cosmetics & Toiletries - 2.7%                                                                           
  3,500,000 Unilever Capital Corp.                                                  6.4%   7/24/1995   3,447,733    
  5,000,000 Unilever Capital Corp.                                                  6.1%   10/5/1995   4,866,986    
                                                                                                    -------------   
                                                                                                       8,314,719    
                                                                                                    -------------   
            Education - 3.9%                                                                                        
 12,000,000 Harvard University                                                     5.92%    5/1/1995  12,000,000    
                                                                                                    -------------   
            Finance-Automotive - 4.0%                                                                               
  4,300,000 Ford Motor Credit Co                                                   6.07%    5/8/1995   4,294,925    
  3,000,000 Ford Motor Credit Co                                                   6.04%   6/14/1995   2,977,853    
  5,000,000 Ford Motor Credit Co                                                   6.04%    5/5/1995   4,996,644    
                                                                                                    -------------   
                                                                                                      12,269,422    
                                                                                                    -------------   
            Finance-Commercial - 4.2%                                                                               
  5,000,000 CIT Group Holdings, Inc.                                               6.04%   9/15/1995   4,885,072    
  3,000,000 General Electric Capital Corp.                                         6.27%    5/2/1995   2,999,477    
  5,000,000 General Electric Capital Corp.                                          6.0%   5/22/1995   4,982,500    
                                                                                                    -------------   
                                                                                                      12,867,049    
                                                                                                    -------------   
            Finance-Consumer - 7.2%                                                                                 
  5,000,000 American General Finance Corp.                                         5.98%   6/12/1995   4,965,117    
  5,000,000 American General Finance Corp.                                         6.06%    6/2/1995   4,973,067    
  5,000,000 Associates Corp. of North America                                       6.1%   7/12/1995   4,939,000    
  5,000,000 Associates Corp. of North America                                      6.03%    5/1/1995   5,000,000    
  2,000,000 AVCO Financial Services, Inc.                                          5.99%   6/13/1995   1,985,691    
                                                                                                    -------------   
                                                                                                      21,862,875    
                                                                                                    -------------   
            Finance-Structured - 14.4%                                                                              
  5,000,000 Ciesco, L.P.                                                            6.1%   5/15/1995   4,988,139    
  5,000,000 Corporate Asset Funding Co.                                            5.97%   5/25/1995   4,980,100    
  5,000,000 CXC, Inc.                                                              5.98%    5/9/1995   4,993,356    
  5,000,000 CXC, Inc.                                                              6.02%   5/17/1995   4,986,622    
  4,005,000 Delaware Funding Corp.                                                 5.96%   5/22/1995   3,991,076    
  5,010,000 Delaware Funding Corp.                                                  6.0%    7/5/1995   4,955,725    
  5,000,000 New Center Asset Trust                                                 6.27%   7/17/1995   4,932,946    
  5,000,000 New Center Asset Trust                                                 6.14%   5/16/1995   4,987,208    
  5,000,000 Preferred Receivables Funding Corp.                                    6.02%   6/26/1995   4,953,178    
                                                                                                    -------------   
                                                                                                      43,768,350    
                                                                                                    -------------   
            Financial Services - 6.5%                                                                               
  1,000,000 American Express Credit Corp.                                           6.0%   6/20/1995     991,667    
  4,000,000 American Express Credit Corp.                                          6.04%   6/20/1995   3,966,444    
  5,000,000 American Express Credit Corp.                                          6.08%    6/6/1995   4,969,600    
  5,000,000 USAA Capital Corp.                                                     5.98%    6/1/1995   4,974,253    
  5,000,000 U.S. Central Credit Union                                              6.04%   6/15/1995   4,962,250    
                                                                                                    -------------   
                                                                                                      19,864,214    
                                                                                                    -------------   
            Food & Beverage - 0.3%                                                                                  
  1,000,000 Heinz, H.J. Co.                                                         6.0%    5/5/1995     999,333    
                                                                                                    -------------   
            Household Products - 3.3%                                                                               
 10,000,000 Colgate Palmolive Co.                                                  6.02%   5/19/1995   9,969,900    
                                                                                                    -------------   
            Industrial - 8.1%                                                                                       
  5,000,000 Du Pont (E.I.) de Nemours and Co.                                      6.01%   7/25/1995   4,929,049    
  5,000,000 Du Pont (E.I.) de Nemours and Co.                                      6.02%   8/16/1995   4,910,536    
  5,000,000 Great Lakes Chemical Corp.                                             6.03%    5/2/1995   4,999,162    
  5,000,000 Monsanto Co.                                                           6.15%   7/24/1995   4,928,250    
  5,000,000 Monsanto Co.                                                           6.05%    8/3/1995   4,921,014    
                                                                                                    -------------   
                                                                                                      24,688,011    
                                                                                                    -------------   
            Insurance - 3.3%                                                                                        
  5,000,000 Metlife Funding, Inc.                                                  6.05%   6/27/1995   4,952,104    
  5,000,000 Metlife Funding, Inc.                                                   6.1%   5/12/1995   4,990,681    
                                                                                                    -------------   
                                                                                                       9,942,785    
                                                                                                    -------------   
            Petroleum - 4.0%                                                                                        
 12,200,000 Koch Industries, Inc.                                                  5.93%    5/1/1995  12,200,000    
                                                                                                    -------------   
              Total Commericial Paper                                                                256,320,638    
                                                                                                    -------------   

            VARIABLE RATE NOTES - 11.8% (a,b)                                                                       
  9,000,000 Federal Home Loan Bank, Float Rate Notes                               6.03%    7/3/1995   8,997,393    
 10,000,000 Illinois Student Assistance Commission (Student Loan                                                    
              Marketing Association, Direct Pay Letter of Credit)                  6.07%    5/5/1995  10,000,000    
  7,000,000 Leland H. Stanford Jr. University                                      6.05%    5/1/1995   7,000,000    
 10,000,000 PNC Bank, Pittsburgh, N.A., Medium Term Bank Notes                     5.97%    5/2/1995   9,998,486    
                                                                                                    -------------   
              Total Variable Rate Notes                                                               35,995,879    
                                                                                                    -------------   
              Total Investments (at amortized cost)                                                 $304,671,961 (c)
                                                                                                    =============   

See accompanying notes to portfolio of investments.                                                                 

Notes to Portfolio of Investments:                                                                                  
(a) The categories of investments are shown as a percentage of total                                                
investments of the Lutheran Brotherhood Money Market Fund.                                                          
(b) Denotes variable rate obligations for which the current yield and                                               
the next scheduled interest reset date are shown.                                                                   
(c) Also represents cost for federal income tax purposes.                                                           

The accompanying notes are an integral part of the financial statements.                                            

Lutheran Brotherhood Opportunity Growth Fund          
Financial Statements          

                                                                [Download Table]

                    Statement of Assets and Liabilities                        
                              April 30, 1995                                   
                                (unaudited)                                    
                                                                               
ASSETS:                                                                        
   Investments in securities, at value                                         
      (cost, $110,987,919)                                        $122,739,032 
   Cash                                                                384,030 
   Receivable for investment securities sold                         3,931,792 
   Dividend and interest receivable                                      2,547 
   Unamortized organization costs                                       26,622 
                                                                  ------------ 
         Total assets                                              127,084,023 
                                                                  ------------ 
LIABILITIES:                                                                   
   Payable for investment securities purchased                       6,498,433 
   Accrued expenses                                                     95,557 
                                                                  ------------ 
         Total liabilities                                           6,593,990 
                                                                  ------------ 
NET ASSETS                                                        $120,490,033 
                                                                  ============ 

NET ASSETS CONSIST OF:                                                         
Trust capital (10,602,271 shares of beneficial                                 
   interest outstanding)                                          $103,465,593 
Undistributed net investment income                                   (406,201)
Accumulated net realized gain from                                ------------ 
   sale of investments                                               5,679,528 
Unrealized net appreciation of investments                          11,751,113 
                                                                  ------------ 
NET ASSETS                                                        $120,490,033 
                                                                  ============ 

Net asset value and redemption price per share                                 
   ($120,490,033 (divided by) 10,602,271 shares of                             
   beneficial interest outstanding).                                    $11.36 
                                                                        ====== 

Maximum public offering price per share                                        
   ($11.36 (divided by) 0.95 for a 5% sales charge)                     $11.96 
                                                                        ====== 
              --------------------------------------------------               

                                                                [Download Table]

                          Statement of Operations                               
                      Six Months Ended April 30, 1995                           
                                (unaudited)                                     
                                                                                
INVESTMENT INCOME:                                                              
Income--                                                                        
   Dividend income                                                  $    32,520 
   Interest income                                                      372,757 
                                                                    ----------- 
      Total income                                                      405,277 
                                                                    ----------- 
Expenses--                                                                      
   Investment advisory fee                                              392,963 
   Transfer agent services                                              262,160 
   Custodian fee                                                         46,876 
   Administrative personnel and services                                 14,758 
   Printing and postage                                                  53,817 
   Trust share registration costs                                        24,687 
   Auditing fees                                                          3,920 
   Legal fees                                                               333 
   Trustees' fees                                                         4,252 
   Amortization of organization costs                                     4,887 
   Miscellaneous                                                          2,825 
                                                                    ----------- 
      Total expenses                                                    811,478 
                                                                    ----------- 
      Net investment loss                                              (406,201)
                                                                    ----------- 
REALIZED AND UNREALIZED GAIN                                                    
   (LOSS) ON INVESTMENTS:                                                       
Net realized gain on investment transactions                          8,264,022 
Net change in unrealized appreciation of investments                 (1,572,331)
                                                                    ----------- 
      Net gain on investments                                         6,691,691 
                                                                    ----------- 
      Net increase in net assets resulting                                      
         from operations                                            $ 6,285,490 
                                                                    =========== 
              --------------------------------------------------                

                                                        [Enlarge/Download Table]

                                 Statement of Changes in Net Assets                                     
                                                                            Six Months                  
                                                                              Ended                     
                                                                             4/30/95        Year Ended  
                                                                           (unaudited)       10/31/94   
                                                                         --------------   --------------
                                                                                                        
INCREASE (DECREASE) IN NET ASSETS:                                                                      
OPERATIONS--                                                                                            
Net investment loss                                                        $   (406,201)    $  (578,480)
Net realized gain (loss) on investments                                       8,264,022      (2,536,890)
Net change in unrealized appreciation or depreciation                                                   
   of investments                                                            (1,572,331)      6,777,510 
                                                                           ------------     ----------- 
      Net increase in net assets resulting from operations                    6,285,490       3,662,140 
                                                                           ------------     ----------- 
TRUST SHARE TRANSACTIONS--                                                                              
Net proceeds from sale of shares                                             20,996,604      60,409,075 
Cost of shares redeemed                                                      (6,368,480)     (5,340,158)
                                                                           ------------     ----------- 
      Net increase in net assets from trust share transactions               14,628,124      55,068,917 
                                                                           ------------     ----------- 
      Net increase in net assets                                             20,913,614      58,731,057 
NET ASSETS:                                                                                             
Beginning of period                                                          99,576,419      40,845,362 
                                                                           ------------     ----------- 
End of period                                                              $120,490,033     $99,576,419 
                                                                           ============     =========== 
The accompanying notes are an integral part of the financial statements.                                

Lutheran Brotherhood Fund                     
Financial Statements                    

                                                                [Download Table]

              Statement of Assets and Liabilities                           
                         April 30, 1995                                     
                          (unaudited)                                       
                                                                            
ASSETS:                                                                     
   Investments in securities, at value                                      
      (cost, $568,287,200)                                      $616,709,721
   Cash                                                               14,027
   Receivable for investment securities sold                       6,789,530
   Receivable for capital stock sold                                 207,649
   Dividend and interest receivable                                  839,476
                                                                ------------
          Total assets                                           624,560,403
                                                                ------------
LIABILITIES:                                                                
   Payable for investment securities purchased                    52,047,319
   Accrued expenses                                                  265,723
                                                                ------------
         Total liabilities                                        52,313,042
                                                                ------------
NET ASSETS                                                      $572,247,361
                                                                ============

NET ASSETS CONSIST OF:                                                      
Trust capital (30,758,983 shares of beneficial                              
   interest outstanding)                                        $520,534,377
Undistributed net investment income                                  949,232
Accumulated net realized gain from                                          
   sale of investments                                             2,341,231
Unrealized net appreciation of investments                        48,422,521
                                                                ------------
NET ASSETS                                                      $572,247,361
                                                                ============

Net asset value and redemption price per share                              
   ($572,247,361 (divided by) 30,758,983 shares of                          
   beneficial interest outstanding)                                   $18.60
                                                                      ======

Maximum public offering price per share                                     
   ($18.60 (divided by) 0.95 for a 5% sales charge)                   $19.58
                                                                      ======
             -----------------------------------------------                

                                                                [Download Table]

                                Statement of Operations                      
                            Six Months Ended April 30, 1995                  
                                     (unaudited)                             
                                                                             
INVESTMENT INCOME:                                                           
Income--                                                                     
   Dividend income                                                $ 4,527,851
   Interest income                                                  2,028,204
                                                                  -----------
      Total income                                                  6,556,055
                                                                  -----------
Expenses--                                                                   
   Investment advisory fee                                          1,732,980
   Transfer agent services                                            722,947
   Custodian fee                                                       84,882
   Administrative personnel and services                               66,742
   Printing and postage                                               152,268
   Trust share registration costs                                      21,371
   Auditing fees                                                       13,575
   Legal fees                                                           2,267
   Trustees' fees                                                       8,203
   Miscellaneous                                                       12,622
                                                                  -----------
      Total expenses                                                2,817,857
                                                                  -----------
      Net investment income                                         3,738,198
                                                                  -----------
REALIZED AND UNREALIZED GAIN                                                 
   (LOSS) ON INVESTMENTS:                                                    
Net realized gain on investment transactions                        3,895,676
Net realized gain on closed or expired option                                
   contracts written                                                   25,620
                                                                  -----------
Net realized gain on investments                                    3,921,296
Net change in unrealized appreciation of investments               24,320,502
                                                                  -----------
      Net gain on investments                                      28,241,798
                                                                  -----------
      Net increase in net assets resulting                                   
         from operations                                          $31,979,996
                                                                  ===========
             -----------------------------------------------                 

                                                        [Enlarge/Download Table]

                             Statement of Changes in Net Assets                                       
                                                                           Six Months                 
                                                                             Ended                    
                                                                            4/30/95        Year Ended 
                                                                          (unaudited)       10/31/94  
                                                                         --------------  -------------
                                                                                                      
INCREASE (DECREASE) IN NET ASSETS:                                                                    
OPERATIONS--                                                                                          
Net investment income                                                    $  3,738,198    $  5,841,017 
Net realized gain on investments                                            3,921,296         618,391 
Net change in unrealized appreciation or depreciation                                                 
   of investments                                                          24,320,502      (6,424,063)
                                                                         ------------    ------------ 
      Net increase in net assets resulting from operations                 31,979,996          35,345 
                                                                         ------------    ------------ 
DISTRIBUTIONS TO SHAREHOLDERS--                                                                       
Net investment income                                                      (3,395,915)     (5,815,515)
Net realized gain on investments                                              (88,151)    (27,442,253)
                                                                         ------------    ------------ 
      Total distributions                                                  (3,484,066)    (33,257,768)
                                                                         ------------    ------------ 
TRUST SHARE TRANSACTIONS--                                                                            
Net proceeds from sale of shares                                           26,312,871      69,538,644 
Reinvested dividend distributions                                           3,403,869      32,585,242 
Cost of shares redeemed                                                   (34,550,856)    (47,593,035)
                                                                         ------------    ------------ 
      Net change in net assets from trust share transactions               (4,834,116)     54,530,851 
                                                                         ------------    ------------ 
      Net increase in net assets                                           23,661,814      21,308,428 
                                                                         ------------    ------------ 
NET ASSETS:                                                                                           
Beginning of period                                                       548,585,547     527,277,119 
                                                                         ------------    ------------ 
End of period (including undistributed net investment                                                 
   income of $949,232 and $606,949, respectively)                        $572,247,361    $548,585,547 
                                                                         ============    ============ 
The accompanying notes are an integral part of the financial statements.                              

Lutheran Brotherhood High Yield Fund                
Financial Statements                

                                                                [Download Table]

                Statement of Assets and Liabilities                             
                          April 30, 1995                                        
                            (unaudited)                                         
                                                                                
ASSETS:                                                                         
   Investments in securities, at value                                          
      (cost, $559,178,846)                                         $540,684,239 
   Cash                                                                 102,296 
   Receivable for investment securities sold                         16,227,827 
   Interest and dividend receivable                                   8,147,299 
                                                                   ------------ 
         Total assets                                               565,161,661 
                                                                   ------------ 
LIABILITIES:                                                                    
   Payable for investment securities purchased                       21,398,337 
   Accrued expenses                                                     171,006 
                                                                   ------------ 
         Total liabilities                                           21,569,343 
                                                                   ------------ 
NET ASSETS                                                         $543,592,318 
                                                                   ============ 

NET ASSETS CONSIST OF:                                                          
Trust capital (62,006,376 shares of beneficial                                  
   interest outstanding)                                           $565,327,379 
Undistributed net investment income                                     958,643 
Accumulated net realized loss from                                              
   sale of investments                                               (4,199,097)
Unrealized net depreciation of investments                          (18,494,607)
                                                                   ------------ 
NET ASSETS                                                         $543,592,318 
                                                                   ============ 

Net asset value and redemption price per share                                  
   ($543,592,318 (divided by) 62,006,376 shares of                              
   beneficial interest outstanding)                                       $8.77 
                                                                          ===== 

Maximum public offering price per share                                         
   ($8.77 (divided by) 0.95 for a 5% sales charge)                        $9.23 
                                                                          ===== 
              -------------------------------------------                       

                                                                [Download Table]

                               Statement of Operations                      
                          Six Months Ended April 30, 1995                   
                                   (unaudited)                              
                                                                            
INVESTMENT INCOME:                                                          
Income--                                                                    
   Interest income                                              $25,028,113 
   Dividend income                                                2,022,205 
                                                                ----------- 
      Total income                                               27,050,318 
                                                                ----------- 
Expenses--                                                                  
   Investment advisory fee                                        1,646,436 
   Transfer agent services                                          456,881 
   Custodian fee                                                     74,467 
   Administrative personnel and services                             64,584 
   Printing and postage                                             103,770 
   Trust share registration costs                                    31,162 
   Auditing fees                                                     11,041 
   Legal fees                                                         1,965 
   Trustees' fees                                                     5,973 
   Miscellaneous                                                     11,493 
                                                                ----------- 
      Total expenses                                              2,407,772 
                                                                ----------- 
      Net investment income                                      24,642,546 
                                                                ----------- 
REALIZED AND UNREALIZED GAIN                                                
   (LOSS) ON INVESTMENTS:                                                   
Net realized loss on investment transactions                     (3,925,646)
Net change in unrealized depreciation of investments              4,100,267 
                                                                ----------- 
   Net gain on investments                                          174,621 
                                                                ----------- 
   Net increase in net assets resulting                                     
      from operations                                           $24,817,167 
                                                                =========== 
              -------------------------------------------                   

                                                        [Enlarge/Download Table]

                             Statement of Changes in Net Assets                                    
                                                                      Six Months                   
                                                                         Ended                     
                                                                        4/30/95        Year Ended  
                                                                      (unaudited)       10/31/94   
                                                                     --------------  --------------
                                                                                                   
INCREASE (DECREASE) IN NET ASSETS:                                                                 
OPERATIONS--                                                                                       
Net investment income                                                $ 24,642,546     $ 42,426,404 
Net realized gain (loss) on investment transactions                    (3,925,646)       3,337,327 
Net change in unrealized appreciation or depreciation                                              
   of investments                                                       4,100,267      (48,907,187)
                                                                     ------------     ------------ 
      Net change in net assets resulting from operations               24,817,167       (3,143,456)
                                                                     ------------     ------------ 
DISTRIBUTIONS TO SHAREHOLDERS--                                                                    
Net investment income                                                 (26,126,680)     (41,113,817)
Net realized gain on investments                                       (3,034,747)        (910,565)
                                                                     ------------     ------------ 
      Total distributions                                             (29,161,427)     (42,024,382)
                                                                     ------------     ------------ 
TRUST SHARE TRANSACTIONS--                                                                         
Net proceeds from sale of shares                                       64,317,221      134,871,201 
Reinvested dividend distributions                                      19,829,800       29,484,219 
Cost of shares redeemed                                               (35,842,938)     (59,833,947)
                                                                     ------------     ------------ 
      Net increase in net assets from trust share transactions         48,304,083      104,521,473 
                                                                     ------------     ------------ 
      Net increase in net assets                                       43,959,823       59,353,635 
NET ASSETS:                                                                                        
Beginning of period                                                   499,632,495      440,278,860 
                                                                     ------------     ------------ 
End of period (including undistributed net investment                                              
   income of $958,643 and $2,332,777, respectively)                  $543,592,318     $499,632,495 
                                                                     ============     ============ 
The accompanying notes are an integral part of the financial statements.                           

Lutheran Brotherhood Income Fund
Financial Statements

                                                                [Download Table]

                         Statement of Assets and Liabilities               
                                    April 30, 1995                         
                                      (unaudited)                          
                                                                           
ASSETS:                                                                    
   Investments in securities, at value                                     
      (cost, $966,886,047)                                    $967,093,714 
   Cash                                                             44,747 
   Receivable for investment securities sold                     8,506,567 
   Interest receivable                                          14,146,151 
                                                              ------------ 
         Total assets                                          989,791,179 
                                                              ------------ 
LIABILITIES:                                                               
   Open options written, at value                                          
      (premium received $96,250)                                    68,750 
   Payable for investment securities purchased                  73,468,061 
   Accrued expenses                                                278,523 
                                                              ------------ 
         Total liabilities                                      73,815,334 
                                                              ------------ 
NET ASSETS                                                    $915,975,845 
                                                              ============ 

NET ASSETS CONSIST OF:                                                     
Trust capital (110,059,381 shares of beneficial                            
   interest outstanding)                                      $978,374,795 
Undistributed net investment income                              2,678,214 
Accumulated net realized loss from                                         
   sale of investments                                         (65,312,332)
Unrealized net appreciation of investments                         235,168 
                                                              ------------ 
NET ASSETS                                                    $915,975,845 
                                                              ============ 

Net asset value and redemption price per share                             
   ($915,975,845 (divided by) 110,059,381 shares of                        
   beneficial interest outstanding)                                  $8.32 
                                                                     ===== 

Maximum public offering price per share                                    
   ($832 (divided by) 0.95 for a 5% sales charge)                    $8.76 
                                                                     ===== 
              ----------------------------------------------               

                                                                [Download Table]

                           Statement of Operations                          
                       Six Months Ended April 30, 1995                      
                                 (unaudited)                                
                                                                            
INVESTMENT INCOME:                                                          
Income--                                                                    
   Interest income                                             $ 35,892,995 
   Dividend income                                                  281,675 
                                                               ------------ 
      Total income                                               36,174,670 
                                                               ------------ 
Expenses--                                                                  
   Investment advisory fee                                        2,644,668 
   Transfer agent services                                          700,027 
   Custodian fee                                                    101,422 
   Administrative personnel and services                             97,495 
   Printing and postage                                             168,974 
   Trust share registration costs                                    23,293 
   Auditing fees                                                     13,575 
   Legal fees                                                         4,145 
   Trustees' fees                                                    10,167 
   Miscellaneous                                                     22,603 
                                                               ------------ 
      Total expenses                                              3,786,369 
                                                               ------------ 
      Net investment income                                      32,388,301 
                                                               ------------ 
REALIZED AND UNREALIZED GAIN                                                
   (LOSS) ON INVESTMENTS:                                                   
Net realized loss on investment transactions                    (15,764,376)
Net realized loss on closed futures contracts                       (46,953)
                                                               ------------ 
Net realized loss on investments                                (15,811,329)
Net change in unrealized appreciation of investments             50,167,316 
                                                               ------------ 
   Net gain on investments                                       34,355,987 
                                                               ------------ 
   Net increase in net assets resulting                                     
      from operations                                          $ 66,744,288 
                                                               ============ 
              ----------------------------------------------                

                                                        [Enlarge/Download Table]

                               Statement of Changes in Net Assets                                      
                                                                         Six Months                    
                                                                           Ended                       
                                                                          4/30/95         Year Ended   
                                                                        (unaudited)        10/31/94    
                                                                      --------------   --------------  
                                                                                                       
INCREASE (DECREASE) IN NET ASSETS:                                                                     
OPERATIONS--                                                                                           
Net investment income                                                   $ 32,388,301    $   65,920,666 
Net realized loss on investment transactions                             (15,811,329)      (49,289,869)
Net change in unrealized appreciation or depreciation                                                  
   of investments                                                         50,167,316       (85,923,538)
                                                                        ------------    -------------- 
      Net change in net assets resulting from operations                  66,744,288       (69,292,741)
                                                                        ------------    -------------- 
DISTRIBUTIONS TO SHAREHOLDERS--                                                                        
Net investment income                                                    (32,461,997)      (63,237,709)
Net realized gain on investments                                                  --       (27,958,858)
                                                                        ------------    -------------- 
      Total distributions                                                (32,461,997)      (91,196,567)
                                                                        ------------    -------------- 
TRUST SHARE TRANSACTIONS--                                                                             
Net proceeds from sale of shares                                          22,383,057        95,303,536 
Reinvested dividend distributions                                         24,320,375        67,951,565 
Cost of shares redeemed                                                  (72,180,468)     (137,813,949)
                                                                        ------------    -------------- 
      Net change in net assets from trust share transactions             (25,477,036)       25,441,152 
                                                                        ------------    -------------- 
      Net change in net assets                                             8,805,255      (135,048,156)
NET ASSETS:                                                                                            
Beginning of period                                                      907,170,590     1,042,218,746 
                                                                        ------------    -------------- 
End of period (including undistributed net investment                                                  
   income of $2,678,214 and $2,751,910, respectively)                   $915,975,845    $  907,170,590 
                                                                        ============    ============== 
The accompanying notes are an integral part of the financial statements.                               

  Lutheran Brotherhood Municipal Bond Fund
Financial Statements

                                                                [Download Table]

                        Statement of Assets and Liabilities                    
                                 April 30, 1995                                
                                   (unaudited)                                 
                                                                               
ASSETS:                                                                        
   Investments in securities, at value                                         
      (cost, $592,472,169)                                        $611,922,217 
   Cash                                                                 16,895 
   Receivable for investment securities sold                         1,310,656 
   Interest receivable                                              11,229,357 
                                                                  ------------ 
         Total assets                                              624,479,125 
                                                                  ------------ 
LIABILITIES:                                                                   
   Payable for investment securities purchased                       9,353,263 
   Accrued expenses                                                    143,239 
                                                                  ------------ 
         Total liabilities                                           9,496,502 
                                                                  ------------ 
NET ASSETS                                                         614,982,623 
                                                                  ============ 

NET ASSETS CONSIST OF:                                                         
Trust capital (74,372,638 shares of beneficial                                 
   interest outstanding)                                           604,829,389 
Undistributed net investment income                                    265,412 
Accumulated net realized loss from                                             
   sale of investments                                              (9,562,226)
Unrealized net appreciation of investments                          19,450,048 
                                                                  ------------ 
NET ASSETS                                                        $614,982,623 
                                                                  ============ 

Net asset value and redemption price per share                                 
   ($614,982,623 (divided by) 74,372,638 shares of                             
   beneficial interest outstanding)                                      $8.27 
                                                                         ===== 

Maximum public offering price per share                                        
   ($8.27 (divided by) 0.95 for a 5% sales charge)                       $8.71 
                                                                         ===== 
              -----------------------------------------------                  

                                                                [Download Table]

                               Statement of Operations                     
                           Six Months Ended April 30, 1995                 
                                    (unaudited)                            
                                                                           
INVESTMENT INCOME:                                                         
Income--                                                                   
   Interest income                                             $19,045,785 
                                                               ----------- 
Expenses--                                                                 
   Investment advisory fee                                       1,703,425 
   Transfer agent services                                         257,016 
   Custodian fee                                                    75,759 
   Administrative personnel and services                            72,726 
   Printing and postage                                             65,305 
   Trust share registration costs                                   21,617 
   Auditing fees                                                    13,575 
   Legal fees                                                        2,629 
   Trustees' fees                                                    8,203 
   Miscellaneous                                                    15,253 
                                                               ----------- 
      Total expenses                                             2,235,508 
                                                               ----------- 
      Net investment income                                     16,810,277 
                                                               ----------- 
REALIZED AND UNREALIZED GAIN                                               
   (LOSS) ON INVESTMENTS:                                                  
Net realized loss on investment transactions                    (1,165,218)
Net realized loss on closed futures contracts                     (703,268)
                                                               ----------- 
Net realized loss on investments                                (1,868,486)
Net change in unrealized appreciation of investments            30,705,442 
                                                               ----------- 
   Net gain on investments                                      28,836,956 
                                                               ----------- 
   Net increase in net assets resulting                                    
      from operations                                          $45,647,233 
                                                               =========== 
              -----------------------------------------------              

                                                        [Enlarge/Download Table]

                                   Statement of Changes in Net Assets                                  
                                                                           Six Months                  
                                                                             Ended                     
                                                                            4/30/95        Year Ended  
                                                                          (unaudited)       10/31/94   
                                                                         --------------  --------------
                                                                                                       
INCREASE (DECREASE) IN NET ASSETS:                                                                     
OPERATIONS--                                                                                           
Net investment income                                                     $ 16,810,277    $ 33,749,852 
Net realized loss on investment transactions                                (1,868,486)     (5,413,232)
Net change in unrealized appreciation or depreciation                                                  
   of investments                                                           30,705,442     (65,720,253)
                                                                          ------------    ------------ 
      Net change in net assets resulting from operations                    45,647,233     (37,383,633)
                                                                          ------------    ------------ 
DISTRIBUTIONS TO SHAREHOLDERS--                                                                        
Net investment income                                                      (16,994,633)    (33,607,416)
Net realized gain on investments                                                    --     (11,100,939)
                                                                          ------------    ------------ 
      Total distributions                                                  (16,994,633)    (44,708,355)
                                                                          ------------    ------------ 
TRUST SHARE TRANSACTIONS--                                                                             
Net proceeds from sale of shares                                            18,552,662      76,123,051 
Reinvested dividend distributions                                           12,863,979      33,891,528 
Cost of shares redeemed                                                    (40,272,627)    (62,418,135)
                                                                          ------------    ------------ 
      Net change in net assets from trust share transactions                (8,855,986)     47,596,444 
                                                                          ------------    ------------ 
      Net change in net assets                                              19,796,614     (34,495,544)
NET ASSETS:                                                                                            
Beginning of period                                                        595,186,009     629,681,553 
                                                                          ------------    ------------ 
End of period (including undistributed net investment                                                  
   income of $265,412 and $449,768, respectively)                         $614,982,623    $595,186,009 
                                                                          ============    ============ 
The accompanying notes are an integral part of the financial statements.                               

              Lutheran Brotherhood Money Market Fund
        Financial Statements

                                                                [Download Table]

                          Statement of Assets and Liabilities              
                                     April 30, 1995                        
                                      (unaudited)                          
                                                                           
ASSETS:                                                                    
   Investments in securities, at amortized                                 
      cost and value                                           $304,671,961
   Cash                                                             203,436
   Interest receivable                                              136,992
                                                               ------------
         Total assets                                           305,012,389
                                                               ------------
LIABILITIES:                                                               
   Dividends payable                                                116,888
   Accrued expenses                                                 246,480
                                                               ------------
         Total liabilities                                          363,368
                                                               ------------
NET ASSETS                                                     $304,649,021
                                                               ============

NET ASSETS CONSIST OF:                                                     
Trust capital (304,649,021 shares of                                       
   beneficial interest outstanding)                            $304,649,021
                                                               ============

Net asset value, offering price and                                        
   redemption price per share                                              
   ($304,649,021 (divided by) 304,649,021 shares of                        
   beneficial interest outstanding)                                   $1.00
                                                                      =====
                  --------------------------------------                   

                                                                [Download Table]

                                 Statement of Operations                  
                              Six Months Ended April 30, 1995             
                                      (unaudited)                         
                                                                          
INVESTMENT INCOME:                                                        
Income--                                                                  
   Interest income                                             $8,482,659 
                                                               ---------- 
Expenses--                                                                
   Investment advisory fee                                        717,452 
   Transfer agent services                                        606,520 
   Custodian fee                                                  162,815 
   Administrative personnel and services                           44,645 
   Printing and postage                                           197,675 
   Trust share registration costs                                  29,926 
   Auditing fees                                                    5,969 
   Legal fees                                                       1,190 
   Trustees' fees                                                   5,237 
   Miscellaneous                                                    7,175 
                                                               ---------- 
      Total expenses before expense reimbursement               1,778,604 
Expense reimbursement from investment advisor                    (200,210)
                                                               ---------- 
   Net expenses                                                 1,578,394 
                                                               ---------- 
   Net investment income                                       $6,904,265 
                                                               ========== 
                  --------------------------------------                  

                                                        [Enlarge/Download Table]

                               Statement of Changes in Net Assets                                       
                                                                           Six Months                   
                                                                              Ended                     
                                                                             4/30/95        Year Ended  
                                                                           (unaudited)       10/31/94   
                                                                         --------------   --------------
                                                                                                        
INCREASE (DECREASE) IN NET ASSETS:                                                                      
OPERATIONS--                                                                                            
Net investment income                                                      $  6,904,265    $  7,835,288 
                                                                           ------------    ------------ 
DISTRIBUTIONS TO SHAREHOLDERS--                                                                         
Net investment income                                                        (6,904,265)     (7,835,288)
                                                                           ------------    ------------ 
TRUST SHARE TRANSACTIONS--                                                                              
Proceeds from sale of shares                                                265,136,620     441,490,068 
Reinvested dividend distributions                                             6,635,632       7,385,807 
Cost of shares redeemed                                                    (243,991,249)   (447,132,825)
                                                                           ------------    ------------ 
   Net increase in net assets from trust share transactions                  27,781,003       1,743,050 
                                                                           ------------    ------------ 
   Net increase in net assets                                                27,781,003       1,743,050 
NET ASSETS:                                                                                             
Beginning of period                                                         276,868,018     275,124,968 
                                                                           ------------    ------------ 
End of period                                                              $304,649,021    $276,868,018 
                                                                           ============    ============ 
The accompanying notes are an integral part of the financial statements.                                

                                                        [Enlarge/Download Table]

                                 The Lutheran Brotherhood Family of Funds                                    
                                           Financial Highlights                                              
                              For a share outstanding throughtout each period                                

                                                       Six Months                           For the Period   
                                                         Ended                Year         January 8, 1993   
Lutheran Brotherhood                                    4/30/95              Ended       (effective date) to 
Opportunity Growth Fund (a)                           (unaudited)           10/31/94       October 31, 1993  
                                                     --------------      --------------  --------------------
                                                                                                             
Net asset value, beginning of period                     $10.76              $10.66              $ 8.43      
                                                        -------              ------              ------      
Income From Investment Operations--                                                                          
Net investment income                                     (0.04)              (0.06)              (0.07)     
Net realized and unrealized gain (loss)                                                                      
   on investments                                          0.64                0.16                2.30      
                                                        -------              ------              ------      
   Total from investment operations                        0.60                0.10                2.23      
                                                        -------              ------              ------      
Net asset value, end of period                           $11.36              $10.76              $10.66      
                                                        =======              ======              ======      
Total investment return at net asset value (b)             5.67%               0.94%              26.45%     
Net assets, end of period ($ millions)                   $120.5                $99.6               $40.8     
Ratio of expenses to average net assets                   1.54%(c)             1.66%               2.33%(c)  
Ratio of net investment income to                                                                            
   average net assets                                    -0.77%               -0.83%              -1.76%     
Portfolio turnover rate                                     84%                  64%                 97%     

                                                        [Enlarge/Download Table]

                                                     Six Months                                                               
                                                       Ended        Year        Nine Months       Years Ended January 31,     
                                                      4/30/95       Ended          Ended      ------------------------------  
Lutheran Brotherhood Fund (a)                       (unaudited)   10/31/94       10/31/93      1993         1992        1991  
                                                      ------        ------        ------      ------       ------      ------ 
                                                                                                                              
Net asset value, beginning of period                  $17.67        $18.85        $18.53      $19.14       $17.10      $15.83 
                                                      ------        ------        ------      ------       ------      ------ 
Income From Investment Operations--                                                                                           
Net investment income                                   0.12          0.19          0.29        0.27         0.32        0.37 
Net realized and unrealized gain                                                                                              
   (loss) on investments                                0.92         (0.20)         1.04        1.42         3.90        1.34 
                                                      ------        ------        ------      ------       ------      ------ 
   Total from investment operations                     1.04         (0.01)         1.33        1.69         4.22        1.71 
                                                      ------        ------        ------      ------       ------      ------ 
Less Distributions--                                                                                                          
Dividends from net investment income                   (0.11)        (0.20)        (0.28)      (0.27)       (0.31)      (0.38)
Distributions from net realized gain                                                                                          
   on investments                                         --         (0.97)        (0.73)      (2.03)       (1.87)      (0.06)
                                                      ------        ------        ------      ------       ------      ------ 
Total distributions                                    (0.11)        (1.17)        (1.01)      (2.30)       (2.18)      (0.44)
                                                      ------        ------        ------      ------       ------      ------ 
Net asset value, end of period                        $18.60        $17.67        $18.85      $18.53       $19.14      $17.10 
                                                      ======        ======        ======      ======       ======      ====== 
Total investment return at net asset value (b)         5.93%        -0.11%        7.41%        9.47%       24.67%      10.92% 
Net assets, end of period ($ millions)                $572.2        $548.6       $527.3       $460.9       $380.3      $303.4 
Ratio of expenses to average net assets                1.05%(c)      1.04%        1.01%(c)     0.97%        1.00%       1.05% 
Ratio of net investment income to                                                                                             
   average net assets                                  1.39%(c)      1.10%        2.15%(c)     1.44%        1.69%       2.21% 
Portfolio turnover rate                                  76%          234%         237%         249%         175%        148% 
                                           See accompanying notes to the financial highlights.                                

                                                        [Enlarge/Download Table]

                                 The Lutheran Brotherhood Family of Funds                                                      
                                           Financial Highlights                                                                
                              For a share outstanding throughtout each period                                                  
                                              (continued)                                                                      

                                                         Six Months                                                            
                                                            Ended        Year    Nine Months        Years Ended January 31,    
Lutheran Brotherhood                                       4/30/95       Ended      Ended       ------------------------------ 
High Yield Fund (a)                                      (unaudited)   10/31/94    10/31/93      1993        1992        1991  
                                                         -----------   --------    --------     ------      ------       ----- 
                                                                                                                               
Net asset value, beginning of period                         $8.86       $9.73       $9.12       $8.45       $6.72       $7.93 
                                                            ------      ------      ------      ------      ------       ----- 
Income From Investment Operations--                                                                                            
Net investment income                                         0.41        0.83        0.61        0.88        0.93        0.92 
Net realized and unrealized gain                                                                                               
   (loss) on investments                                     (0.01)      (0.86)       0.60        0.68        1.72       (1.21)
                                                            ------      ------      ------      ------      ------       ----- 
   Total from investment operations                           0.40       (0.03)       1.21        1.56        2.65       (0.29)
                                                            ------      ------      ------      ------      ------       ----- 
Less Distributions--                                                                                                           
Dividends from net investment income                         (0.44)      (0.82)      (0.60)      (0.89)      (0.92)      (0.92)
Distributions from net realized                                                                                                
   gain on investments                                       (0.05)      (0.02)         --          --          --          -- 
                                                            ------      ------      ------      ------      ------       ----- 
   Total distributions                                       (0.49)      (0.84)      (0.60)      (0.89)      (0.92)      (0.92)
                                                            ------      ------      ------      ------      ------       ----- 
Net asset value, end of period                               $8.77       $8.86       $9.73       $9.12       $8.45       $6.72 
                                                            ======      ======      ======      ======      ======       ===== 
Total investment return at net asset value (b)                4.82%      -0.47%      13.72%      19.51%      41.59%      -3.98%
Net assets, end of period ($ millions)                       $543.6      $499.6      $440.3      $330.2      $217.0      $137.0
Ratio of expenses to average net assets                       0.95%(c)    0.95%       0.94%(c)    0.99%       1.16%       1.23%
Ratio of net investment income to                                                                                              
   average net assets                                         9.72%(c)    8.92%       8.72%(c)   10.04%      11.95%      12.51%
Portfolio turnover rate                                         37%         50%         66%         86%        145%        120%

                                                        [Enlarge/Download Table]

                                                           Six Months                                                            
                                                              Ended       Year     Nine Months        Years Ended January 31,    
Lutheran Brotherhood                                         4/30/95      Ended       Ended       ------------------------------ 
Income Fund (a)                                            (unaudited)   10/31/94    10/31/93      1993        1992        1991  
                                                           -----------   --------    --------      -----       -----       ----- 
                                                                                                                                 
Net asset value, beginning of period                           $8.01       $9.43       $9.10       $8.79       $8.35       $8.47 
                                                               -----       -----       -----       -----       -----       ----- 
Income From Investment Operations--                                                                                              
Net investment income                                           0.29        0.58        0.47        0.66        0.72        0.78 
Net realized and unrealized gain                                                                                                 
   (loss) on investments                                        0.31       (1.19)       0.33        0.31        0.44       (0.11)
                                                               -----       -----       -----       -----       -----       ----- 
   Total from investment operations                             0.60       (0.61)       0.80        0.97        1.16        0.67 
                                                               -----       -----       -----       -----       -----       ----- 
Less Distributions--                                                                                                             
Dividends from net investment income                           (0.29)      (0.56)      (0.47)      (0.66)      (0.72)      (0.79)
Distributions from net realized                                                                                                  
   gain on investments                                            --       (0.25)         --          --          --          -- 
                                                               -----       -----       -----       -----       -----       ----- 
Total distributions                                            (0.29)      (0.81)      (0.47)      (0.66)      (0.72)      (0.79)
                                                               -----       -----       -----       -----       -----       ----- 
Net assets, end of period                                      $8.32       $8.01       $9.43       $9.10       $8.79       $8.35 
                                                               =====       =====       =====       =====       =====       ===== 
Total investment return at net asset value (b)                  7.67%      -6.81%       8.97%      11.50%      14.48%       8.39%
Net assets, end of period ($ millions)                        $916.0       $907.2    $1,042.2      $944.6      $819.5      $736.5
Ratio of expenses to average net assets                        0.84%(c)     0.82%       0.80%(c,d)  0.90%       0.97%       1.02%
Ratio of net investment income to                                                                                                
   average net assets                                          7.21%(c)     6.77%       6.87%(c,d)  7.40%       8.38%       9.35%
Portfolio turnover rate                                          60%         155%         84%        104%        117%        118%
                                           See accompanying notes to financial highlights.                                       

                                                        [Enlarge/Download Table]

                                 The Lutheran Brotherhood Family of Funds                                                      
                                           Financial Highlights                                                                
                              For a share outstanding throughtout each period                                                  
                                              (continued)                                                                      

                                                          Six Months                                                           
                                                             Ended       Year    Nine Months       Years Ended January 31,     
Lutheran Brotherhood                                        4/30/95     Ended       Ended    --------------------------------- 
Municipal Bond Fund (a)                                   (unaudited)  10/31/94    10/31/93      1993        1992        1991  
                                                          -----------  --------    --------      -----       -----       ----- 
                                                                                                                               
Net asset value, beginning of period                         $7.88       $9.00       $8.52       $8.45       $8.32       $8.15 
                                                             -----       -----       -----       -----       -----       ----- 
Income From Investment Operations--                                                                                            
Net investment income                                         0.23        0.46        0.37        0.53        0.56        0.58 
Net realized and unrealized gain                                                                                               
   (loss) on investments                                      0.39       (0.96)       0.51        0.28        0.29        0.16 
                                                             -----       -----       -----       -----       -----       ----- 
   Total from investment operations                           0.62       (0.50)       0.88        0.81        0.85        0.74 
                                                             -----       -----       -----       -----       -----       ----- 
Less Distributions--                                                                                                           
Dividends from net investment income                         (0.23)      (0.46)      (0.37)      (0.52)      (0.56)      (0.57)
Distributions from net realized                                                                                                
   gain on investments                                          --       (0.16)      (0.03)      (0.22)      (0.16)         -- 
                                                             -----       -----       -----       -----       -----       ----- 
Total distributions                                          (0.23)      (0.62)      (0.40)      (0.74)      (0.72)      (0.57)
                                                             -----       -----       -----       -----       -----       ----- 
Net asset value, end of period                               $8.27       $7.88       $9.00       $8.52       $8.45       $8.32 
                                                             =====       =====       =====       =====       =====       ===== 
Total investment return at net asset value (b)                7.97%      -5.93%      10.73%       9.96%      10.64%       9.54%
Net assets, end of period ($ millions)                      $615.0       $595.2      $629.7      $532.6      $448.4      $382.5
Ratio of expenses to average net assets                      0.75%(c)     0.75%       0.74%(c,e)  0.80%       0.83%       0.86%
Ratio of net investment income to                                                                                              
   average net assets                                        5.66%(c)     5.44%       5.69%(c,e)  6.22%       6.65%       7.06%
Portfolio turnover rate                                        21%          38%         46%         77%         78%         68%

                                                        [Enlarge/Download Table]

                                                            Six Months                                                            
                                                               Ended        Year    Nine Months         Years Ended January 31,   
Lutheran Brotherhood                                          4/30/95      Ended       Ended       ------------------------------ 
Money Market Fund (a)                                       (unaudited)   10/31/94    10/31/93      1993        1992        1991  
                                                            -----------   --------    --------      -----       -----       ----- 
                                                                                                                                  
Net asset value, beginning of period                            $1.00       $1.00       $1.00       $1.00       $1.00       $1.00 
                                                                -----       -----       -----       -----       -----       ----- 
Net investment income from investment operations                 0.02        0.03        0.02        0.03        0.05        0.07 
Less: Dividends from net investment income                      (0.02)      (0.03)      (0.02)      (0.03)      (0.05)      (0.07)
                                                                -----       -----       -----       -----       -----       ----- 
Net asset value, end of period                                  $1.00       $1.00       $1.00       $1.00       $1.00       $1.00 
                                                                -----       -----       -----       -----       -----       ----- 
Total investment return at net asset value (b)                   2.40%       2.89%       1.63%       2.77%       5.10%       7.40%
Net assets, end of period ($ millions)                         $304.6       $276.9      $275.1      $317.0      $412.3      $473.4
Ratio of expenses to average net assets                         1.10%(c,f)   1.10%(f)    1.10%(c,f)  1.10%(f)    1.08%       1.07%
Ratio of net investment income to                                                                                                 
   average net assets                                           4.81%(c,f)   2.85%(f)    2.16%(c,f)  2.76%(f)    5.01%       7.16%

Notes to Financial Highlights:                                                                                                    
------------------------------                                                                                                    
(a)  All per share amounts have been rounded to the nearest cent.                                                                 

(b)  Total investment return assumes dividend reinvestment and does not                                                           
reflect the effect of sales charges.                                                                                              

(c)  Computed on an annualized basis.                                                                                             

(d)  During the nine month period ended October 31, 1993, Lutheran                                                                
Brotherhood Research Corp. (LBRC) undertook a voluntary reduction of the                                                          
Income Fund's investment advisory fee equal to 0.10% of average daily                                                             
net assets. Had LBRC not undertaken such action, the ratio of expenses                                                            
to average net assets would have been 0.90% and the ratio of net                                                                  
investment income to average net assets would have been 6.77%.                                                                    

(e)  During the nine month period ended October 31, 1993, LBRC undertook                                                          
a voluntary reduction of the Municipal Bond Fund's investment advisory                                                            
fee equal to 0.05% of average daily net assets. Had LBRC not undertaken                                                           
such action, the ratio of expenses to average net assets would have been                                                          
0.79% and the ratio of net investment income to average net assets would                                                          
have been 5.64%.                                                                                                                  

(f)  Effective February 1, 1992, LBRC has voluntarily undertaken to                                                               
limit the Money Market Fund's expense ratio to 1.10%. Had LBRC not                                                                
undertaken such action, the ratio of expenses to average net assets                                                               
would have been 1.24%, 1.36%, 1.44% and 1.23% and the ratio of net                                                                
investment income to average net assets would have been 4.67%, 2.59%,                                                             
1.82% and 2.63%, respectively, for the six months ended April 30, 1995,                                                           
the year ended October 31, 1994, the nine month period ended October 31,                                                          
1993 and the year ended January 31, 1993.                                                                                         

The accompanying notes are an integral part of the financial statements.                                                          

The Lutheran Brotherhood Family of Funds              
Notes to Financial Statements               
April 30, 1995                
(Unaudited)                 

(1) Organization                                                                

The Lutheran Brotherhood Family of Funds (the "Trust") is a Delaware            
business trust and a diversified, open-end investment company registered        
under the Investment Company Act of 1940. The Trust is divided into six         
series (the "Fund(s)"), each with its own investment objective and              
policies. The six Funds of the Trust are: Lutheran Brotherhood                  
Opportunity Growth Fund, Lutheran Brotherhood Fund, Lutheran Brotherhood        
High Yield Fund, Lutheran Brotherhood Income Fund, Lutheran Brotherhood         
Municipal Bond Fund and Lutheran Brotherhood Money Market Fund.                 

(2) Significant Accounting Policies                                             

Investment Security Valuations                                                  

Securities traded on national securities exchanges are valued at the            
last quoted sales price at the close of each business day; securities           
traded on the over-the-counter market and listed securities for which no        
price is readily available are valued at the mean between bid and asked         
price as determined by an independent pricing service. The pricing              
service, in determining values of securities, takes into consideration          
such factors as current quotations by broker/dealers, coupon, maturity,         
quality, type of issue, trading characteristics, and other yield and            
risk factors it deems relevant in determining valuations. Exchange              
listed options and futures contracts are valued at the last quoted sales        
price. For all Funds other than the Money Market Fund, short-term               
securities with maturities of 60 days or less are valued at amortized           
cost; those with maturities greater than 60 days are valued at the mean         
between bid and asked price. Short-term securities held by the Money            
Market Fund are valued on the basis of amortized cost (which                    
approximates market value), whereby a portfolio security is valued at           
its cost initially, and thereafter valued to reflect a constant                 
amortization to maturity of any discount or premium. The Money Market           
Fund follows procedures necessary to maintain a constant net asset value        
of $1.00 per share. All other securities for which market values are not        
readily available are appraised at fair value as determined in good             
faith by or under the direction of the Board of Directors.                      

Repurchase Agreements                                                           

The Funds may engage in repurchase agreement transactions in pursuit of         
their investment objectives. When a fund engages in such transactions,          
it is policy to require the custodian bank to take possession of all            
securities held as collateral in support of repurchase agreement                
investments. In addition, the Fund monitors the market value of the             
underlying collateral on a daily basis. If the seller defaults or if            
bankruptcy proceedings are initiated with respect to the seller, the            
realization or retention of the collateral may be subject to legal              
proceedings.                                                                    

Investment Income                                                               

Interest income is determined on the basis of interest or discount              
earned on any short-term investments and interest earned on all other           
debt securities, including accrual of original issue discount. Interest         
earned on debt securities also includes amortization of premium for the         
Opportunity Growth, LB Fund, High Yield and Municipal Bond Funds and the        
accrual of market discount for the Opportunity Growth, LB Fund and High         
Yield Funds. Market discount, if any, is recognized for tax purposes            
when bonds are sold for the Income and Municipal Bond Funds. Dividend           
income is recorded on the ex- dividend date. For payment-in-kind                
securities, income is recorded on the ex-dividend date in the amount of         
the value received.                                                             

Options and Financial Futures Transactions                                      

All Funds except the Money Market Fund may utilize futures and options          
contracts. Option contracts are valued daily and unrealized appreciation        
or depreciation is recorded. The Fund will realize a gain or loss upon          
expiration or closing of the option transaction. When an option is              
exercised, the proceeds on sale for a written call option or the cost of        
a security for purchased put and call options is adjusted by the amount         
of premium received or paid.                                                    

Upon buying or selling a futures contract, the Fund is required to              
deposit either cash or securities in an amount (initial margin) equal to        
a certain percentage of the contract value. Subsequent payments                 
(variation margin) are made or received by the Fund each day. The               
variation margin payments are equal to the daily changes in the contract        
value and are recorded as unrealized gains and losses. The Fund realizes        
a gain or loss when the contract is closed or expires.                          

Federal Income Taxes                                                            

It is the policy of each Fund to comply with the provisions of the              
Internal Revenue Code applicable to regulated investment companies and          
to distribute to shareholders each year substantially all of their              
taxable income on a timely basis, including any net realized gain on            
investments each year. It is also the intention of the Funds to                 
distribute an amount sufficient to avoid imposition of any federal              
excise tax. Accordingly, no provision for federal income tax is                 
necessary. Each Fund is treated as a separate taxable entity for federal        
income tax purposes.                                                            

When-Issued and Delayed Delivery Transactions                                   

The Funds may engage in when-issued or delayed delivery transactions. To        
the extent that a Fund engages in such transactions, it will do so for          
the purpose of acquiring securities consistent with its investment              
objectives and policies and not for the purpose of investment leverage          
or to speculate on interest rate changes. On the trade date, assets of          
the Fund are segregated on the Fund's records in a dollar amount                
sufficient to make payment for the securities to be purchased. Income is        
not accrued until settlement date.                                              

Dollar Roll Transactions                                                        

The Income Fund enters into dollar roll transactions, with respect to           
mortgage securities issued by GNMA, FNMA and FHLMC, in which the Fund           
sells mortgage securities and simultaneously agrees to repurchase               
substantially similar (same type, coupon and maturity) securities at a          
later date at an agreed upon price. During the period between the sale          
and repurchase, the Fund forgoes principal and interest paid on the             
mortgage securities sold. The Fund is compensated by the interest earned        
on the cash proceeds of the initial sale and from negotiated fees paid          
by brokers offered as an inducement to the Fund to "roll over" its              
purchase commitments. For the six months ended April 30, 1995, the              
Income Fund earned $327,852 from such fees.                                     

Organization Costs                                                              

Organization costs incurred by the Opportunity Growth Fund to prepare           
its initial registration statement and register shares are capitalized          
and will be amortized over a period of 60 months from its commencement          
date. If any initial shares are redeemed during the amortization period,        
the redemption proceeds will be reduced by a pro-rata portion of the            
unamortized balance at the time of redemption, in the same proportion           
that the number of initial shares being redeemed bears to the number of         
initial shares outstanding at the time of redemption.                           

Distribution to Shareholders                                                    

Dividends from net investment income, if available, are declared and            
paid annually for the Opportunity Growth Fund, declared and paid                
quarterly for the LB Fund, declared and paid monthly for the High Yield,        
Income and Municipal Bond Funds, and declared daily (including short-           
term net realized gains and losses) and paid monthly for the Money              
Market Fund. Net realized gains from securities transactions, if any,           
are distributed at least annually, after the close of the Fund's fiscal         
year. Dividends and capital gain distributions to shareholders are              
recorded on the ex-dividend date.                                               

The character of distributions made during the year from net investment         
income or net realized gains may differ from their ultimate                     
characterization for federal income tax purposes. Also, due to timing of        
dividend distributions, the fiscal year in which amounts are distributed        
may differ from the year that the income or net realized gains were             
recorded by the Fund.                                                           

Other                                                                           

Security transactions are accounted for on the date the securities are          
purchased or sold. Realized gains and losses are determined on the              
identified cost basis. Each Fund is charged for the operating expenses          
that are directly attributable to it. Fund operating expenses that              
cannot be directly attributable to a Fund are either shared equally or          
allocated among them based on the relative net assets of each Fund or           
via other methodologies.                                                        

(3) Fees and Compensation Paid to Affiliates                                    

Investment Advisory Fees                                                        

Each Fund pays Lutheran Brotherhood Research Corp. (LBRC), the Trust's          
investment advisor, a fee for its advisory services. The fees are               
accrued daily and paid monthly. The fees are based on the following             
annual rates of average daily net assets: Opportunity Growth Fund, 0.75%        
for the first $100 million in assets, 0.65% for the next $150 million in        
assets, 0.60% for the next $250 million in assets, 0.55% for the next           
$500 million in assets, and 0.50% for assets over $1 billion; LB Fund           
and High Yield Fund, 0.65% for the first $500 million in assets, 0.60%          
for the next $500 million, and 0.55% for assets over $1 billion; Income         
Fund, 0.60% for the first $500 million in assets, 0.575% for the next           
$500 million in assets, and 0.55% for assets over $1 billion; Municipal         
Bond Fund, 0.575% for the first $500 million in assets, 0.5625% for the         
next $500 million, and 0.55% for assets over $1 billion; Money Market           
Fund, 0.50% for the first $500 million in assets, 0.475% for the next           
$500 million, 0.45% for the next $500 million, 0.425% for the next $500         
million, and 0.40% for assets over $2 billion. During the six months            
ended April 30, 1995 the Money Market Fund advisory fees totaled                
$717,452 of which $200,210 were voluntarily waived by LBRC to limit the         
Money Market Fund's expense ratio to 1.10% of average daily net assets.         
LBRC can terminate its voluntary waiver of expenses at any time at its          
discretion.                                                                     

Sales Charges and Other Fees                                                    

For the six months ended April 30, 1995, Lutheran Brotherhood Securities        
Corp. (LBSC), the Trust's distributor, received sales charges paid by           
purchasers of Fund shares of: Opportunity Growth Fund, $1,271,918; LB           
Fund, $837,093; High Yield Fund, $651,502; Income Fund, $678,530; and           
Municipal Bond Fund, $491,953. Sales charges are not an expense of the          
Trust and are not reflected in the financial statements of any of the           
Funds. LBSC also received fees pursuant to an agreement to provide              
certain administrative personnel and services to the Funds. Effective           
January 1, 1995, a new agreement went into effect where by LBSC will            
receive an annual fee equal to 0.025% of average daily net assets. LBSC         
received the following compensation for the six months ended April 30,          
1995: Opportunity Growth Fund, $14,758; LB Fund, $66,742; High Yield            
Fund, $64,584; Income Fund, $97,495; Municipal Bond Fund, $72,726; and          
Money Market Fund, $44,645. In addition, LBSC provides the Funds with           
transfer agent services pursuant to an agreement and received the               
following compensation: Opportunity Growth Fund, $262,160; LB Fund,             
$722,947; High Yield Fund, $456,881; Income Fund, $700,027; Municipal           
Bond Fund, $257,016; and Money Market Fund, $606,520. Certain officers          
and non-independent trustees of the Fund are officers and directors of          
LBRC and LBSC.                                                                  

(4) Securities Lending                                                          

To generate additional income, the Funds may participate in a securities        
lending program administered by the Fund's custodian bank. Securities           
are periodically loaned to brokers, banks or other institutional                
borrowers of securities, for which collateral in the form of cash, U.S.         
government securities, or letter of credit is received by the custodian         
in an amount at least equal to the market value of securities loaned.           
Collateral received in the form of cash is invested in short-term               
investments by the custodian from which earnings are shared between the         
borrower, the custodian and the Fund at negotiated rates. The risks to          
the Fund are that it may experience delays in recovery or even loss of          
rights in the collateral should the borrower of securities fail                 
financially. At April 30, 1995, there were no security loans                    
outstanding.                                                                    

(5) Distributions From Capital Gains                                            

During the six months ended April 30, 1995, distributions from net              
realized capital gains of $88,151, and $3,034,747, were paid by the LB          
Fund and LB High Yield Fund, respectively. These distributions related          
to net capital gains realized during the prior fiscal year ended October        
31, 1994.                                                                       

(6) Capital Loss Carryover                                                      

At October 31, 1994 the Opportunity Growth Fund, Income Fund and                
Municipal Bond Fund had accumulated net realized capital loss carryovers        
of $2,547,602, $48,987,208 and $6,406,278 respectively (expiring in             
2002). To the extent these Funds realize future net capital gains,              
taxable distributions will be reduced by any unused capital loss                
carryovers.                                                                     

(7) Investment Transactions                                                     

Purchases and Sales of Investment Securities                                    

For the six months ended April 30, 1995, the cost of purchases and the          
proceeds from sales of investment securities other than U.S. Government         
and short term securities were as follows:                                      

      ($thousands)
       -----------------------------------
Fund                        Purchases              Sales                        
------------------        --------------       --------------                   
Opportunity Growth          $ 99,698              $ 80,577                      
LB Fund                      420,653               370,263                      
High Yield                   222,218               173,199                      
Income                       249,888               254,113                      
Municipal Bond               125,378               126,508                      
LB Fund                      $     --             $  1,890                      
Income                        448,304              260,314                      

Investments in Restricted Securities                                            

The High Yield Fund owns restricted securities that were purchased in           
private placement transactions without registration under the Securities        
Act of 1933. Unless such securities subsequently become registered, they        
generally may be resold only in privately negotiated transactions with a        
limited number of purchasers. The aggregate value of restricted                 
securities was $5,253,403 at April 30, 1995 which represented 1.0% of           
net assets of the High Yield Fund.                                              

Investments in High Yielding Securities                                         

The High Yield Fund invests primarily in high yielding fixed income             
securities. These securities will typically be in the lower rating              
categories or will be non-rated and generally will involve more risk            
than securities in the higher rating categories. Lower rated or unrated         
securities are more likely to react to developments affecting market            
risk and credit risk than are more highly rated securities, which react         
primarily to movements in the general level of interest rates.                  

Investments in Options and Futures Contracts                                    

All Funds except the Money Market Fund may buy put and call options,            
write covered call options and buy and sell futures contracts as hedges         
to provide protection against adverse movements in prices of securities         
in the portfolio or to facilitate buying and selling securities.                

The movement in the price of the instrument underlying an option or             
futures contract may not correlate perfectly with the movement in the           
prices of the portfolio securities being hedged. A lack of correlation          
could render the Fund's hedging strategy unsuccessful and could result          
in a loss to the Fund. In the event that a liquid secondary market would        
not exist, the Fund could be prevented from entering into a closing             
transaction which could result in additional losses to the Fund.                

Open Option Contracts                                                           

The number of contracts and premium amounts associated with call option         
contracts written during the six month period ended April 30, 1995 were         
as follows:                                                                     

                                                        [Enlarge/Download Table]

                                       LB Fund                      Income Fund       
                             ---------------------------   ---------------------------
                             Number of           Premium   Number of           Premium
                             Contracts            Amount   Contracts            Amount
                             ---------         ---------   ---------         ---------
                                                                                      
Balance at October 31, 1994        539          $ 43,618          --                --
Opened                             450            27,564           1          $ 96,250
Closed                            (196)          (19,577)         --                --
Expired                           (482)          (36,669)         --                --
Exercised                         (311)          (14,937)         --                --
                             ---------         ---------   ---------         ---------
Balance at April 30, 1995           --                --           1          $ 96,250
                             =========         =========   =========         =========

(8) Shares of Beneficial Interest                                               

The Master Trust Agreement permits the Trustees to issue an unlimited           
number of full and fractional shares of beneficial interest ($0.001 par         
value) of all of the Funds. Transactions in Fund shares were as follows:        

                                                        [Enlarge/Download Table]


                                        Opportunity                 High          Income     Municipal       Money     
                                          Growth       LB Fund      Yield          Fund         Bond         Market    
                                        ----------   -----------  -----------   -----------  ----------   ------------ 
                                                                                                                       
Shares outstanding at                                                                                                  
     October 31, 1993                    3,832,452   27,965,971   45,249,704   110,473,555   69,984,767    275,124,968 
     Shares sold                         5,950,178    3,943,939   14,381,578    10,973,573    8,943,485    441,490,067 
     Shares issued on reinvestment                                                                                     
        of dividends and distributions          --    1,839,470    3,161,025     7,825,510    3,994,426      7,385,807 
     Shares redeemed                      (531,608)  (2,711,349)  (6,399,979)  (16,082,912)  (7,434,277)  (447,132,824)
                                        ----------   -----------  -----------   -----------  ----------   ------------ 
Shares outstanding at                                                                                                  
     October 31, 1994                    9,251,022   31,038,031   56,392,328   113,189,726   75,488,401    276,868,018 
     Shares sold                         1,939,610    1,494,832    7,471,334     2,757,351    2,315,620    265,136,620 
     Shares issued on reinvestment                                                                                     
        of dividends and distributions          --      192,323    2,325,983     3,005,146    1,606,889      6,635,632 
     Shares redeemed                      (588,361)  (1,966,203)  (4,183,269)   (8,892,842)  (5,038,272)  (243,991,249)
                                        ----------   -----------  -----------   -----------  ----------   ------------ 
Shares outstanding at                                                                                                  
     April 30, 1995                     10,602,271    30,758,983   62,006,376   110,059,381  74,372,638    304,649,021 
                                        ==========   ===========  ===========   ===========  ==========   ============ 

The Lutheran Brotherhood Family of Funds                  
Lutheran Brotherhood Opportunity Growth Fund                  
Lutheran Brotherhood Fund                       
Lutheran Brotherhood High Yield Fund                        
Lutheran Brotherhood Income Fund                      
Lutheran Brotherhood Municipal Bond Fund                    
Lutheran Brotherhood Money Market Fund                      

Trustees                                                                        

Rolf F. Bjelland                                                                
Charles W. Arnason                                                              
Herbert F. Eggerding, Jr.                                                       
Connie M. Levi                                                                  
Ruth E. Randall                                                                 

Officers                                                                        

Rolf F. Bjelland                                 Wade M. Voigt                  
Chairman and President                           Treasurer                      

James R. Olson                                   Rand E. Mattsson               
Vice President                                   Assistant Treasurer            

James M. Walline                                 James M. Odland                
Vice President                                   Assistant Secretary            

Otis F. Hilbert                                  Randall L. Wetherille          
Secretary and Vice President                     Assistant Secretary            

This report is authorized for distribution to prospective                       
investors only when preceded or accompanied by the                              
current prospectuses.                                                           

Lutheran Brotherhood Family of Funds                                            
25 Years & Growing Logo Goes Here                                               

58                                                                              

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘N-30B-2’ Filing		Date		Other Filings
Filed on:		6/29/95
For Period End:		4/30/95		NSAR-A
		1/1/95
		10/31/94		NSAR-B
		10/31/93
		1/31/93
		1/8/93
		2/1/92
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