capital international funds – class i filecapital international funds – class i capital...

Capital International Funds –Class I

Capital International – Global Discovery

Capital International – International Equity

Capital International – U.S. Equity

Capital International – U.S. Small Cap

Capital International – Global Small Cap

Semi-annual reportfor the six months endedJune 30, 2005

Capital International – Global DiscoveryNumber Percentageof shares/ of total netFace Average Market assets atvalue Issuer cost ($) value ($) market (%)

EQUITY INVESTMENTSEUROPEAN MONETARY UNIONAustria

200 Raiffeisen International Bank-Holding AG 12,918 15,662

3,008 Telekom Austria AG 53,961 71,682 66,879 87,344 0.7

Finland3,500 Nokia OYJ 65,824 71,884 0.6

France

2,600 France Telecom SA 78,281 93,151 750 Societe Generale 70,963 93,590

1,500 Veolia Environnement 60,139 69,111 209,383 255,852 2.3

Germany

3,100 Bayerische Hypo- und Vereinsbank AG 100,397 98,882 0.9

Netherlands

5,631 ABN AMRO Holding NV 143,230 169,928 35,500 Hagemeyer NV 116,320 103,181 11,000 Koninklijke (Royal) KPN NV 104,275 113,205 12,300 Koninklijke Ahold NV 117,490 124,031

481,315 510,345 4.5 Spain

2,400 Banco Bilbao Vizcaya Argentaria SA 47,669 45,413 4,887 Banco Santander Central Hispano SA 64,050 69,498 2,912 Telefonica SA 43,172 58,469

154,891 173,380 1.5 Total European Monetary Union 1,078,689 1,197,687 10.5

OTHER EUROPENorway

8,000 Telenor ASA 70,110 78,338 0.7United Kingdom

4,562 HSBC Holdings PLC 80,135 89,571 15,200 Kingfisher PLC 107,336 82,16425,000 Rentokil Initial PLC 88,428 87,757 25,000 Vodafone Group PLC 74,923 74,711

350,822 334,203 3.0Total Other Europe 420,932 412,541 3.7

PACIFIC BASINAustralia

28,545 Qantas Airways Limited 88,678 89,805 0.8Indonesia

398,000 PT Telekomunikasi Indonesia Tbk Series B 130,497 249,912 2.2

Japan

2,100 Alfresa Holdings Corporation 95,220 114,8789,000 Mitsui Trust Holdings Inc. 118,560 113,386

700 Nidec Corporation 99,524 90,8202,200 Nitto Denko Corp. 101,971 154,630

415,275 473,714 4.2Korea

983 NHN Corp. 103,076 124,742 1.1Malaysia

19,000 Malayan Banking Berhad 64,333 66,80121,200 Tenaga Nasional Berhad 74,147 71,800

138,480 138,601 1.2Singapore

63,240 MobileOne Limited 76,539 100,163140,000 Singapore Post Limited 90,636 101,206

167,175 201,369 1.8

Taiwan

38,812 Taiwan Semiconductor Manufacturing Company Limited 66,401 82,832 0.7

Thailand

120,000 Siam City Bank Public Company Limited 100,157 93,395 0.8Total Pacific Basin 1,209,739 1,454,370 12.8

North AmericaMexico

13,250 Grupo Financiero Banorte SA de CV Series O 94,002 107,039

2,800 Wal-Mart de Mexico SA de CV Series V 10,255 13,916

104,257 120,955 1.1United States

2,600 Altera Corp. 111,129 63,1631,800 Amazon.com, Inc. 79,154 72,9832,600 American International Group, Inc. 329,806 185,1545,000 Andrew Corp. 74,767 78,2002,100 Automatic Data Processing, Inc. 119,605 108,0301,400 Baker Hughes Inc. 66,347 87,7901,700 Best Buy Co. Inc. 109,023 142,8371,600 Capital One Financial Corp. 121,023 156,9092,400 Caremark Rx, Inc. 83,121 130,9643,000 CarMax, Inc. 98,665 97,9952,200 Carnival Corporation 82,964 147,0962,000 CenturyTel, Inc. 86,804 84,8927,500 Cisco Systems, Inc. 238,944 175,6741,698 Citigroup Inc. 97,286 96,2161,200 City National Corp. 82,502 105,4748,600 Compuware Corp. 76,414 75,7901,500 Costco Wholesale Corp. 64,836 82,4042,400 eBay Inc. 49,358 97,1051,050 Electronic Data Systems Corporation 89,662 24,7741,400 Express Scripts, Inc. Cl. A 55,294 85,765

750 Fannie Mae 94,601 53,6863,353 First Data Corporation 199,886 164,9661,725 Freddie Mac 164,416 137,9181,700 Garmin Ltd. 107,530 89,0783,200 HCA Inc. 178,705 222,2736,700 IAC/InterActiveCorp 217,794 197,503

500 International Business Machines Corporation 81,945 45,4731,800 Intuit Inc. 95,752 99,5241,250 Jabil Circuit, Inc. 38,393 47,082

650 Liberty Global, Inc. Series A 31,162 37,18217,800 Liberty Media Corporation Series A 271,630 222,3206,600 Limited Brands 183,341 173,2804,700 Lowe's Companies, Inc. 267,812 335,3931,800 Maxim Integrated Products, Inc. 146,492 84,3016,980 Microsoft Corporation 263,428 212,516

13,000 Novell, Inc. 85,816 98,7912,500 Novellus Systems, Inc. 81,560 75,7182,000 Outback Steakhouse, Inc. 113,596 110,9012,000 Paychex, Inc. 131,217 79,769

25,000 Qwest Communications International Inc. 113,167 113,6848,500 Reader's Digest Association Inc.

Cl. A Non-Voting 159,972 171,9043,000 Robert Half International Inc. 100,187 91,8172,000 Ross Stores Inc. 84,012 70,8701,200 Schlumberger Limited 102,167 111,6963,300 Sirva Inc. 95,362 34,4212,400 Southwest Airlines Co. 57,809 40,9785,700 Symbol Technologies, Inc. 103,570 68,9573,900 Target Corporation 224,377 260,0921,400 Telephone & Data Systems, Inc. 65,434 67,9104,900 Texas Instruments Incorporated 281,692 168,5873,000 The Walt Disney Company 90,556 92,589

C A P I TA L I N T E R N AT I O N A L F U N D S S t a t e m e n t s o f I n v e s t m e n t P o r t f o l i o s a s a t J u n e 3 0 , 2 0 0 5 – u n a u d i t e d

1

Number Percentageof shares/ of total netFace Average Market assets atvalue Issuer cost ($) value ($) market (%)

EQUITY INVESTMENTS (continued)

PACIFIC BASIN (continued)


5,000 Time Warner Inc. 164,514 102,4071,000 United Stationers Inc. 51,469 60,1821,550 W. R. Berkley Corporation 59,210 67,7862,900 Walgreen Co. 132,464 163,4731,600 Wells Fargo & Company 118,563 120,766

880 Williams-Sonoma, Inc. 37,368 42,6812,000 Xilinx, Inc. 113,720 62,5112,700 Yahoo! Inc. 42,059 114,670

7,069,452 6,614,870 58.4Total North America 7,173,709 6,735,825 59.5

CONVERTIBLE PREFERREDS

80,000 Lucent Technologies Inc. 114,514 100,753 0.9Total Equity Investments 9,997,583 9,901,176 87.4

SHORT-TERM INVESTMENTS100,000 Government of Canada

Treasury Bills 2.33% Jul 14/05 99,917 99,91714,000 Government of Canada

Treasury Bills 2.34% Jul 14/05 13,988 13,9881,100,000 Government of Canada

Treasury Bills 2.35% Jul 14/05 1,099,081 1,099,081Total Short-term Investments 1,212,986 1,212,986 10.7Total Investments 11,210,569 11,114,162 98.1Other Assets, Less Liabilities 214,104 1.9Total Net Asset Value 11,328,266 100.0

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

Capital International –International EquityNumber Percentageof shares/ of total netFace Average Market assets atvalue Issuer cost ($) value ($) market (%)

EQUITY INVESTMENTSEUROPEAN MONETARY UNIONAustria

4,800 Erste Bank der Oesterreichischen Sparkassen AG 244,700 294,471

1,600 Raiffeisen International Bank-Holding AG 100,680 125,300

10,179 Telekom Austria AG 236,580 242,569581,960 662,340 0.5

Belgium

6,000 Fortis 209,350 204,01915,600 SES Global SA 262,761 283,384

5,000 UCB SA 313,109 297,991785,220 785,394 0.6

Finland

14,800 Stora Enso OYJ 274,721 232,200 0.2France

9,100 Accor SA 511,608 523,1828,900 Axa SA 281,525 272,801

29,800 BNP Paribas 2,096,834 2,505,61733,400 Bouygues SA 1,599,764 1,696,872

4,200 Carrefour SA 266,267 249,7523,400 Compagnie Generale des

Etablissements Michelin Cl. B 251,504 253,8603,700 Essilor International SA 229,351 310,0036,800 Groupe Danone 668,318 733,0922,900 Lafarge SA 367,661 324,038

3,000 L'Air Liquide SA 572,751 626,8275,800 L'Oréal SA 568,686 510,4631,900 Renault SA 129,954 205,398

36,200 Sanofi-Aventis 3,471,211 3,644,9671,584 Sanofi-Aventis 144,438 159,727

12,500 Schneider Electric SA 1,073,621 1,155,7443,200 Societe Generale 327,762 399,3181,000 TOTAL SA 282,674 288,1303,600 Vivendi Universal SA 167,182 139,121

13,011,111 13,998,912 10.5Germany

6,700 Allianz AG 1,084,495 943,57513,900 Bayer AG 562,376 568,69819,100 Bayerische Hypo- und Vereinsbank AG 487,068 609,2416,200 Bayerische Motoren Werke (BMW) AG 346,755 346,891

10,800 DaimlerChrysler AG 649,808 537,7994,000 Deutsche Bank AG 363,604 383,8375,300 Deutsche Boerse AG 404,188 508,8209,200 Deutsche Post AG 281,637 263,579

11,600 E.ON AG 1,186,600 1,267,42728,800 Infineon Technologies AG 531,022 329,7056,100 SAP AG 1,181,448 1,302,6802,500 SAP AG ADR 117,990 132,682

14,900 Siemens AG 1,289,460 1,333,2355,100 TUI AG 122,181 154,963

10,800 Volkswagen AG 599,759 605,7049,208,391 9,288,836 7.0

Ireland

17,200 CRH PLC 456,901 555,012 0.4Italy

17,050 Eni SPA 368,238 538,794 0.4Netherlands

65,824 ABN AMRO Holding NV 1,663,458 1,986,38764,851 AEGON NV 2,073,873 1,029,9639,500 ASML Holding NV 295,032 183,4216,400 Euronext NV 260,798 265,643

43,375 Heineken Holding NV Cl. A 1,633,409 1,485,8225,700 Heineken NV 254,719 215,879

32,323 ING Groep NV 971,865 1,120,174165,500 Koninklijke (Royal) KPN NV 1,568,163 1,703,228

4,300 Reed Elsevier NV 69,638 73,45827,400 Royal Dutch Petroleum Company 2,044,942 2,194,1168,000 Royal Dutch Petroleum Company NY Shares 494,593 636,3844,700 Royal Numico NV 170,710 230,557

11,300 STMicroelectronics NV 412,594 222,1977,900 TPG NV 223,988 245,4293,500 Unilever NV 294,206 278,454

15,078 VNU NV 626,755 515,83013,058,743 12,386,942 9.3

Portugal

17,100 Portugal Telecom SGPS, SA 241,348 198,805 0.1Spain

5,000 Altadis SA 249,821 257,06383,900 Banco Bilbao Vizcaya Argentaria SA 1,488,523 1,587,55277,300 Banco Santander Central Hispano SA 1,081,710 1,099,29314,400 Iberdrola SA 415,629 465,94317,100 Industria de Diseno Textil SA 498,378 539,61446,200 Repsol YPF, SA 1,482,261 1,449,682

100,112 Telefonica SA 1,828,410 2,010,1117,044,732 7,409,258 5.6

Total European Monetary Union 45,031,365 46,056,493 34.6OTHER EUROPEDenmark

6,400 Novo Nordisk A/S Cl. B 374,864 399,23113,100 TDC A/S 646,649 688,149

1,021,513 1,087,380 0.8

2



NORTH AMERICA (continued)

United States (continued)


EQUITY INVESTMENTSEUROPEAN MONETARY UNION (continued)

France (continued)

Norway

22,200 DnB Holding ASA 149,378 283,9556,800 Norske Skogindustrier Cl. A 197,715 137,315

347,093 421,270 0.3Sweden

18,900 Atlas Copco AB 346,541 368,0684,700 Svenska Cellulosa Aktiebolaget SCA 234,762 184,5376,100 Telefonaktiebolaget LM Ericsson ADR 236,101 238,883

275,000 Telefonaktiebolaget LM Ericsson Cl. B 1,057,555 1,084,0541,874,959 1,875,542 1.4

Switzerland

3,800 Adecco SA 257,283 212,05938,837 Compagnie Financiere Richemont AG Cl. A 1,289,964 1,599,49218,332 Credit Suisse Group 854,285 885,503

310 Geberit AG 272,684 242,90423,284 Holcim Ltd. 1,513,325 1,735,447

5,470 Nestlé SA 1,848,342 1,714,43244,837 Novartis AG 2,628,009 2,615,660

6,528 Roche Holding AG 922,808 1,011,78914,236 Swiss Re 1,792,225 1,071,947

1,595 Swisscom AG 704,916 637,0831,406 Syngenta AG 149,786 177,2116,138 UBS AG 433,180 586,524

12,666,807 12,490,051 9.4United Kingdom

12,600 Anglo American PLC 325,710 362,42131,200 ARM Holdings PLC 209,064 77,64248,600 AstraZeneca PLC 3,464,282 2,473,91120,409 BHP Billiton PLC 159,573 319,30536,600 Bradford & Bingley PLC 283,132 263,38821,200 Brambles Industries PLC 160,297 142,54825,900 Diageo PLC 426,055 468,38517,700 Hanson PLC 218,250 208,66490,300 HBOS PLC 1,557,762 1,707,42839,300 HSBC Holdings PLC 679,887 768,57517,900 Johnston Press PLC 243,525 189,09346,900 Lloyds TSB Group PLC 514,805 487,458

7,800 Next PLC 281,355 258,63514,800 Northern Rock PLC 277,832 258,54374,600 Pearson PLC 1,273,024 1,077,800

7,500 Reckitt Benckiser PLC 272,815 271,101107,300 Reed Elsevier PLC 1,238,860 1,260,234

34,600 Rolls-Royce Group PLC 220,140 218,39417,000 Scottish and Southern Energy PLC 361,933 378,409

103,400 Shell Transport & Trading Company PLC 981,938 1,233,17338,700 Standard Chartered PLC 728,284 867,39139,000 Tesco PLC 285,516 273,16161,700 The Royal Bank of Scotland Group PLC 2,448,189 2,285,84392,900 Unilever PLC 1,160,750 1,099,272

1,443,800 Vodafone Group PLC 4,739,862 4,314,69012,100 Wolseley PLC 202,777 312,14510,000 Xstrata PLC 216,699 236,657

22,932,316 21,814,266 16.4Total Other Europe 38,842,688 37,688,509 28.3


36,400 Amcor Limited 290,175 227,67511,608 Australia and New Zealand Banking

Group Limited 180,599 235,69822,200 Brambles Industries Limited 152,818 169,32251,200 Insurance Australia Group Limited 234,890 287,26665,200 Promina Group Limited 226,367 286,68779,381 Qantas Airways Limited 273,639 249,73949,364 Rinker Group Limited 409,939 645,176

8,400 Wesfarmers Limited 208,079 313,75330,290 Woolworths Limited 356,509 466,859

2,333,015 2,882,175 2.2

Hong Kong

37,900 Esprit Holdings Ltd. 206,925 336,205111,000 Hang Lung Group Limited 241,213 239,82190,000 Hang Lung Properties Ltd. 165,023 162,514

108,000 Hong Kong & China Gas Company Limited 259,761 269,958174,500 Johnson Electric Holdings Limited 329,318 196,763240,000 Li & Fung Ltd. 456,350 611,26159,000 PCCW Limited 44,921 45,36018,000 Sun Hung Kai Properties Limited 218,146 217,86825,000 Swire Pacific Limited Cl. A 216,768 271,054

2,138,425 2,350,804 1.8India

1,300 Infosys Technologies Ltd. ADR 88,360 123,441 0.1Japan

9,000 Advantest Corporation 897,365 814,59242,000 AEON Co., Ltd. 687,704 784,8862,925 Aiful Corp. 244,213 267,328

13,600 Astellas Pharma Inc. 600,945 569,6287,000 Bridgestone Corp. 164,610 165,1629,000 Canon Inc. 551,743 580,8569,100 Chubu Electric Power Co., Inc. 265,001 267,5086,400 Daito Trust Construction Company Ltd. 339,549 293,523

16,000 Daiwa House Industry Co., Ltd. 169,479 224,73932 East Japan Railway Company 204,117 201,576

11,600 Fanuc Ltd. 890,641 903,7762,400 Hirose Electric Co., Ltd. 255,532 323,8472,500 Hoya Corporation 224,036 353,642

28,000 Japan Airlines System Corporation 117,213 92,5229,000 Kao Corporation 265,263 260,092

900 Keyence Corporation 252,579 247,26262 Millea Holdings Inc. 1,091,244 1,020,919

49,700 Mitsubishi Corporation 639,636 828,269111,000 Mitsubishi Estate Company, Limited 1,555,957 1,497,79448,000 Mitsubishi Heavy Industries Ltd. 216,708 153,834

92 Mitsubishi Tokyo Financial Group, Inc. 920,840 956,73324,000 Mitsui & Co. 246,514 278,49315,000 Mitsui Fudosan Co. Ltd. 196,632 206,38329,000 Mitsui Sumitomo Insurance

Company, Limited 287,639 320,16793 Mizuho Financial Group, Inc. 506,658 515,941

3,400 Murata Manufacturing Company, Ltd. 371,690 212,2962,400 Nidec Corporation 295,694 311,382

19,000 Nikon Corporation 322,680 263,7283,100 Nintendo Co., Ltd. 382,412 397,405

17,000 Nippon Electric Glass Co., Ltd. 298,554 314,874187 Nippon Telegraph and Telephone

Corporation 971,534 981,63295,000 Nissan Motor Co., Ltd. 1,027,457 1,152,7615,400 Nitto Denko Corp. 280,242 379,5467,500 Omron Corporation 248,688 202,6535,500 Orix Corporation 677,652 1,011,415

22,000 Ricoh Co., Ltd. 493,294 421,3424,500 Rohm Company Limited 831,157 532,120

27,000 Sankyo Company, Limited 618,036 635,56041,000 Sekisui House, Ltd. 477,248 507,9292,000 Shimamura Co., Ltd. 178,345 206,8803,500 Shin-Etsu Chemical Co., Ltd. 163,970 162,841

17,000 Shionogi & Co., Ltd. 420,237 268,8455,900 SMC Corporation 824,041 788,953

17,600 SOFTBANK Corporation 862,990 846,08822,900 Sompo Japan Insurance Inc. 266,651 283,4444,300 Sony Corporation 326,094 181,5299,000 Sumitomo Chemical Company Ltd. 47,511 50,725

74,000 Sumitomo Corp. 756,727 727,021333 Sumitomo Mitsui Financial Group Inc. 2,436,794 2,760,063

50,500 Suzuki Motor Corporation 961,974 972,7523,300 T&D Holdings, Inc. 206,637 190,370

12,700 Takeda Pharmaceutical Company Limited 730,530 771,933


3



OTHER EUROPE (continued)




3,300 TDK Corporation 310,570 275,70819,000 The Furukawa Electric Co. 92,844 90,28920,900 The Kanzai Electric Power

Company, Incorporated 499,154 515,0684,600 Tohoku Electric Power Co., Inc. 107,012 120,227

12,300 Tokyo Electron Limited 1,132,241 797,91568,000 Tokyo Gas Co., Ltd. 340,936 311,868

5,800 Toyota Motor Corporation 252,431 254,4674,500 Trend Micro Incorporated 192,995 196,437

296 UFJ Holdings, Inc. 1,825,623 1,890,7454,200 Uni-Charm Corp. 254,870 207,013

93 Yahoo! Japan Corporation 171,304 239,4717,600 Yamada Denki Co., Ltd. 385,069 535,856

42,400 Yamato Transport Co. Ltd. 866,553 721,60633,702,259 33,822,229 25.4

Korea

6,445 Samsung Electronics Co., Ltd. GDR 1,037,899 1,889,989 1.4Singapore

637,140 Singapore Telecommunications Limited 982,160 1,282,245 1.0

Taiwan

22,999 Hon Hai Precision Industry Co.,Ltd. GDR 256,644 291,765

73,419 Taiwan Semiconductor Manufacturing Company Limited ADR 1,001,087 820,706

1,257,731 1,112,471 0.8Total Pacific Basin 41,539,849 43,463,354 32.7

NORTH AMERICAMexico

20,700 America Movil SA de CV Series L ADR 1,020,449 1,512,425 1.1

United States

9,538 News Corporation CDI Cl. A 196,452 190,0172,710 Synthes, Inc. 289,640 364,353

486,092 554,370 0.4Total North America 1,506,541 2,066,795 1.5

OTHERBrazil

5,400 Companhia Vale do Rio Doce ADR 70,590 193,7981,900 Companhia Vale do Rio Doce

Preferred ADR 22,872 59,15293,462 252,950 0.2

Russia

2,300 YUKOS ADR 143,410 6,428 0.0South Africa

20,900 Sasol 633,128 693,500 0.5Total Other 870,000 952,878 0.7

CONVERTIBLE PREFERREDS

66,000 Credit Suisse Group 6.00% Dec 23/05 65,625 86,622 0.1 Total Equity Investments 127,856,068 130,314,651 97.9

SHORT-TERM INVESTMENTS

1,979,000 State Street Trust Company Canada 1.50% Jul 04/05 1,979,000 1,979,000 1.5 Total Investment Portfolio 129,835,068 132,293,651 99.4Forward and Spot Contracts (Schedule) – 158,339 0.1 Total Investments 129,835,068 132,451,990 99.5Other Assets, Less Liabilities 657,065 0.5 Total Net Asset Value 133,109,055 100.0

Schedule of Forward and Spot ContractsRating of the

Market Counter- counter-Contracts Pay Receive Due date value party party(1)

Forward foreign currency exchange contracts

1 484,698 Euro 624,000 U.S. Dollar 07/07/05 45,898 Mellon Bank AA-1 83,390,000 Japanese Yen 775,000 U.S. Dollar 07/07/05 27,756 Morgan Stanley A+1 63,751,839 Japanese Yen 597,000 U.S. Dollar 07/20/05 25,902 Morgan Stanley A+1 1,023,908 South African

Rand 126,633 Euro 07/13/05 211 Bank of America AA-1 549,440 Swiss Franc 239,627 Pound Sterling 09/28/05 (3,508) Mellon Bank AA-1 784,133 Swiss Franc 340,779 Pound Sterling 09/28/05 (7,639) Morgan Stanley A+1 323,123 Swiss Franc 269,000 U.S. Dollar 07/07/05 20,791 Morgan Stanley A+1 377,792 Swiss Franc 278,000 U.S. Dollar 08/18/05 16,761 Morgan Stanley A+1 622,840 Swiss Franc 514,000 U.S. Dollar 09/20/05 31,055 Mellon Bank AA-1 251,653 U.S. Dollar 323,123 Swiss Franc 07/07/05 468 Morgan Stanley A+

$157,695

Spot Contracts

1 48,394 Canadian Dollar 306,954 Hong Kong Dollar 07/05/05 14 Bank of America AA-1 45,172 Canadian Dollar 4,085,166 Japanese Yen 07/05/05 (26) Morgan Stanley A+1 13,847 Canadian Dollar 14,466 Swiss Franc 07/05/05 (24) Morgan Stanley A+1 435,050 Euro 645,919 Canadian Dollar 07/05/05 778 Mellon Bank AA-1 41,122 Euro 60,914 Canadian Dollar 07/05/05 (66) Mellon Bank AA-1 44,360 Euro 65,751 Canadian Dollar 07/05/05 (32) Mellon Bank AA-

$644

(1) Source: Standard & Poor’s Credit Rating Agency


Capital International – U.S. EquityNumber Percentageof shares/ of total netFace Average Market assets atvalue Issuer cost ($) value ($) market (%)

EQUITY INVESTMENTSENERGYEnergy equipment and services

10,800 Baker Hughes Inc. 563,275 677,2347,000 BJ Services Company 321,870 450,273

28,500 Schlumberger Limited 1,983,169 2,652,77117,200 Transocean Inc. 732,139 1,137,79817,400 Weatherford International Ltd. 1,021,891 1,236,551

4,622,344 6,154,627 3.5Oil and gas

23,000 Exxon Mobil Corporation 1,425,667 1,620,1434,743 Kinder Morgan Management, LLC 200,741 267,4416,921 Kinder Morgan, Inc. 559,520 705,7924,600 Noble Energy, Inc. 381,417 426,532

44,400 Royal Dutch Petroleum Company NY Shares 3,129,643 3,531,929

18,600 Shell Transport & Trading Company PLC ADR 1,013,428 1,323,654

32,600 Unocal Corp. 1,691,595 2,599,2578,402,011 10,474,748 5.8

Total Energy 13,024,355 16,629,375 9.3


4




Japan (continued)


Chemicals

11,000 Air Products and Chemicals Inc. 793,247 813,00721,800 Dow Chemical Company 1,257,780 1,189,854

6,800 E.I. du Pont de Nemours and Company 418,354 358,47814,300 Huntsman Corporation 399,299 355,283

2,868,680 2,716,622 1.6Metals and mining

34,700 Alcoa Inc. 1,434,819 1,111,3564,000 Arch Coal, Inc. 214,535 267,056

1,649,354 1,378,412 0.7Paper and forest products

12,700 International Paper Co. 676,800 470,261 0.3Total Materials 5,194,834 4,565,295 2.6

INDUSTRIALSAerospace and defence

7,700 Boeing Company 540,034 622,90139,600 United Technologies Corporation 2,072,564 2,492,413

2,612,598 3,115,314 1.7Air freight and couriers

10,400 United Parcel Service, Inc. Cl. B 926,153 881,602 0.5Building products

33,900 American Standard Companies Inc. 1,242,376 1,741,828 1.0Commercial services and supplies

46,200 Allied Waste Industries, Inc. 495,974 449,05510,300 Monster Worldwide Inc. 535,486 362,077

1,031,460 811,132 0.5Construction and engineering

22,900 Fluor Corporation 1,219,139 1,616,467 0.9Electrical equipment

16,300 Cooper Industries Ltd. Cl. A 1,313,231 1,276,6535,000 Emerson Electric Co. 414,259 383,828

1,727,490 1,660,481 0.9Industrial conglomerates

9,200 3M Co. 916,393 815,287110,000 General Electric Company 5,415,820 4,671,757

4,300 Siemens AG 402,417 382,90315,400 Tyco International Ltd. 721,897 551,173

7,456,527 6,421,120 3.6Machinery

8,300 Danaher Corporation 562,014 532,47112,000 Illinois Tool Works Inc. 1,269,452 1,171,966

3,800 Ingersoll-Rand Company Cl. A 252,908 332,3242,084,374 2,036,761 1.2

Road and rail

5,200 Union Pacific Corporation 433,706 413,012 0.2Total Industrials 18,733,823 18,697,717 10.5

CONSUMER DISCRETIONARYAuto components

66,000 Delphi Corporation 363,833 376,168 0.2Hotels, restaurants and leisure

8,800 Carnival Corporation 378,092 588,3857,500 Las Vegas Sands Corp. 373,912 328,6417,500 Starwood Hotels & Resorts

Worldwide, Inc. 382,376 538,4201,134,380 1,455,446 0.8

Household durables

15,600 Leggett & Platt, Incorporated 542,760 508,234 0.3Internet and catalog retail

5,000 Amazon.com, Inc. 100,632 202,73125,600 eBay Inc. 551,866 1,035,785

652,498 1,238,516 0.7Leisure equipment and products

15,000 Mattel, Inc. 371,050 336,455 0.2

Media

8,594 Cablevision Systems Corporation New York Group Cl. A 392,218 339,184

14,300 Clear Channel Communications, Inc. 548,474 542,12611,000 Comcast Corporation Cl. A 490,867 413,91942,183 DIRECTV Group, Inc. 892,557 801,4084,500 Knight-Ridder Inc. 412,744 338,3303,700 Omnicom Group Inc. 381,324 362,1733,600 The Walt Disney Company 105,623 111,107

119,700 Time Warner Inc. 3,830,147 2,451,63010,200 Viacom Inc. Cl. B Non-Voting 619,322 400,319

7,673,276 5,760,196 3.2Multiline retail

28,500 Dollar Tree Stores, Inc. 912,011 838,37922,400 Target Corporation 1,393,068 1,493,864

2,305,079 2,332,243 1.3Specialty retail

13,700 AutoNation, Inc. 271,717 344,57446,800 Lowe's Companies, Inc. 2,999,446 3,339,66115,800 RadioShack Corporation 728,999 448,71216,200 Williams-Sonoma, Inc. 595,132 785,716

4,595,294 4,918,663 2.8Total Consumer Discretionary 17,638,170 16,925,921 9.5

CONSUMER STAPLESBeverages

28,900 Anheuser-Busch Companies, Inc. 1,962,432 1,620,59010,400 Pepsi Bottling Group Inc. 301,962 364,70028,500 PepsiCo, Inc. 1,945,107 1,883,908

4,209,501 3,869,198 2.2Food and staples retailing

30,200 Costco Wholesale Corp. 1,467,816 1,659,06427,600 Sysco Corp. 1,257,717 1,224,284

2,725,533 2,883,348 1.6Food products

23,900 Campbell Soup Co. 995,757 901,3847,300 H.J. Heinz Company 460,529 316,924

29,600 Kraft Foods Inc. Cl. A 1,220,076 1,154,09017,100 Unilever NV 1,370,769 1,358,803

4,047,131 3,731,201 2.1Household products

5,000 Kimberly-Clark Corporation 348,235 383,5835,800 Procter & Gamble Company 368,701 375,003

716,936 758,586 0.4Tobacco

29,200 Altria Group, Inc. 1,884,117 2,314,211 1.3Total Consumer Staples 13,583,218 13,556,544 7.6

HEALTH CAREBiotechnology

21,600 Amgen Inc. 1,710,652 1,600,6865,900 ImClone Systems Incorporated 491,418 223,964

42,900 Millennium Pharmaceuticals, Inc. 737,580 487,4402,939,650 2,312,090 1.3

Health care equipment and supplies

28,800 Applera Corporation – Applied Biosystems Group 1,012,543 694,354

26,400 Baxter International Inc. 1,127,518 1,200,50018,237 Guidant Corporation 1,329,853 1,504,3646,200 Medtronic, Inc. 394,882 393,570

3,864,796 3,792,788 2.1Health care providers and services

14,400 AmerisourceBergen Corporation 1,074,966 1,220,50420,200 DaVita, Inc. 998,904 1,126,04626,500 Lincare Holdings Inc. 1,193,477 1,326,52711,400 Mckesson Corporation 608,055 625,8508,100 Tenet Healthcare Corporation 123,877 121,521

19,200 WellPoint Inc. 1,256,056 1,638,8695,255,335 6,059,317 3.3


5



CONSUMER DISCRETIONARY (continued)



MATERIALS

Pharmaceuticals

36,400 Allergan, Inc. 3,526,263 3,803,025129,200 AstraZeneca PLC ADR 8,569,987 6,533,955

29,700 Eli Lilly and Company 2,938,557 2,028,02891,600 Forest Laboratories, Inc. 5,635,121 4,361,85118,000 IVAX Corporation 434,861 474,34617,200 Medco Health Solutions, Inc. 785,502 1,124,93825,000 Pfizer Inc. 1,462,094 845,1216,600 Sepracor Inc. 475,456 485,458

23,827,841 19,656,722 10.9Total Health Care 35,887,622 31,820,917 17.6

FINANCIALSBanks

34,000 Hudson City Bancorp, Inc. 424,116 475,498 0.3Capital markets

18,600 State Street Corporation 1,097,815 1,100,005 0.6Commercial banks

35,800 Wells Fargo & Company 2,729,023 2,702,135 1.5Consumer finance

13,300 AmeriCredit Corp. 389,673 415,69671,100 SLM Corp. 3,179,195 4,427,083

3,568,868 4,842,779 2.7Diversified financial services

101,172 J.P. Morgan Chase & Co. 4,596,142 4,379,912 2.4Insurance

22,600 American International Group, Inc. 1,829,630 1,609,41819 Berkshire Hathaway Inc. Cl. A 2,108,560 1,944,574

8,600 Chubb Corporation 741,457 902,4173,800 Hartford Financial Services Group 345,860 348,3006,500 XL Capital Ltd. Cl. A 935,372 592,908

5,960,879 5,397,617 3.0Real estate

19,800 General Growth Properties Inc. 539,136 997,208 0.6Thrifts and mortgage finance

36,300 Fannie Mae 3,379,548 2,598,38723,800 Freddie Mac 1,932,126 1,902,868

7,800 Golden West Financial Corporation 505,536 615,50317,400 PMI Group, Inc. 981,985 831,33489,750 Washington Mutual, Inc. 4,978,169 4,476,169

11,777,364 10,424,261 5.8Total Financials 30,693,343 30,319,415 16.9

INFORMATION TECHNOLOGYCommunications equipment

105,200 Cisco Systems, Inc. 2,584,079 2,464,11426,400 Corning Incorporated 380,479 537,79889,500 JDS Uniphase Corporation 473,244 166,74423,100 QUALCOMM Incorporated 550,340 934,635

3,988,142 4,103,291 2.3Computers and peripherals

23,776 Hewlett-Packard Company 711,013 685,1346,900 International Business Machines Corporation 878,851 627,5349,900 Lexmark International Inc. Cl. A 922,538 786,675

19,600 Seagate Technology 408,875 421,617160,800 Sun Microsystems, Inc. 841,156 735,156

3,762,433 3,256,116 1.7Electronic equipment and instruments

52,900 Agilent Technologies, Inc. 1,956,498 1,492,60728,400 Avnet, Inc. 580,914 784,26749,800 Flextronics International Ltd. 850,849 806,33737,600 Jabil Circuit, Inc. 1,252,715 1,416,233

4,640,976 4,499,444 2.4Internet software and services

2,000 Google Inc. Cl. A 308,959 721,07930,000 IAC/InterActiveCorp 1,103,653 884,34321,700 VeriSign, Inc. 756,887 764,950

2,169,499 2,370,372 1.3

IT services

12,200 Accenture Ltd. Cl. A 358,399 338,99740,800 Affiliated Computer Services, Inc. Cl. A 2,714,966 2,555,43810,100 Automatic Data Processing, Inc. 509,711 519,57111,000 CheckFree Holdings Corp. 358,310 459,221

3,941,386 3,873,227 2.2Semiconductors and semiconductor equipment

72,000 Altera Corp. 1,774,915 1,749,124170,400 Applied Materials, Inc. 4,675,135 3,379,34484,800 Applied Micro Circuits Corp. 810,787 266,08511,100 ASML Holding NV NY Shares 242,340 213,05920,700 Credence Systems Corporation 528,901 229,61624,400 Fairchild Semiconductor International, Inc. 457,063 441,13045,700 Freescale Semiconductor Inc. Cl. A 1,026,188 1,176,86533,800 Intel Corporation 1,191,760 1,079,63149,000 KLA-Tencor Corporation 3,246,111 2,624,59214,300 Linear Technology Corporation 742,140 643,0848,600 Novellus Systems, Inc. 396,660 260,469

10,100 Silicon Laboratories Inc. 356,154 324,46928,000 Teradyne, Inc. 1,041,565 410,80625,200 Xilinx, Inc. 946,877 787,635

17,436,596 13,585,909 7.6Software

26,500 BMC Software, Inc. 512,106 583,03575,600 Microsoft Corporation 3,257,399 2,301,74839,400 SAP AG ADR 1,873,663 2,091,070

5,643,168 4,975,853 2.8Total Information Technology 41,582,200 36,664,212 20.3

TELECOMMUNICATION SERVICESDiversified telecommunication services

80,400 Qwest Communications International Inc. 426,206 365,60711,000 SBC Communications Inc. 579,866 320,215

111,750 Sprint Corporation 2,521,925 3,436,62817,000 Verizon Communications Inc. 782,982 719,915

4,310,979 4,842,365 2.7Wireless telecommunication services

13,600 American Tower Corporation Cl. A 304,036 350,393 0.2Total Telecommunication Services 4,615,015 5,192,758 2.9

UTILITIESElectric utilities

91,100 Calpine Corporation 376,482 379,648 0.2Multi-utilities and unregulated power

71,800 AES Corporation 1,683,618 1,441,52729,800 Duke Energy Corporation 804,250 1,085,914

2,487,868 2,527,441 1.4Total Utilities 2,864,350 2,907,089 1.6 Total Investment Portfolio 183,816,930 177,279,243 98.8 Spot Contracts (Schedule) – (478) – Total Investments 183,816,930 177,278,765 98.8 Other Assets, Less Liabilities 2,140,899 1.2Total Net Asset Value 179,419,664 100.0

Schedule of Spot Contracts

Rating of the


1 530,699 U.S. Dollar 650,000 Canadian Dollar 07/05/05 (478) Bank of America AA-$(478)




6



HEALTH CARE (continued)



INFORMATION TECHNOLOGY (continued)



EQUITY INVESTMENTSENERGYEnergy equipment services

2,000 Helmerich & Payne, Inc. 85,580 115,020600 Hydril 19,795 39,970

10,900 Newpark Resources, Inc. 86,202 100,201300 SEACOR Holdings Inc. 20,402 23,644

211,979 278,835 2.5Oil and gas

2,100 Delta Petroleum Corporation 33,553 36,3442,300 Energy Partners, Ltd. 55,685 73,8891,000 St. Mary Land & Exploration Company 26,226 35,521

600 Swift Energy Company 21,602 26,343137,066 172,097 1.5

Total Energy 349,045 450,932 4.0 MATERIALSChemicals

1,700 Georgia Gulf Corporation 69,047 64,6981,000 Lubrizol Corporation 40,466 51,4929,700 Methanex Corporation 133,409 195,817

242,922 312,007 2.8Containers and packaging

2,000 AptarGroup, Inc. 99,358 124,5312,600 Jarden Corp. 126,523 171,8333,700 Packaging Corp of America 99,321 95,464

325,202 391,828 3.5Metals and mining

2,600 Alpha Natural Resources, Inc. 77,413 76,101 0.7Paper and forest products

3,700 P.H. Glatfelter Company 63,864 56,235 0.5Total Materials 709,401 836,171 7.5

INDUSTRIALSAerospace and defence

5,700 Orbital Sciences Corporation 71,768 69,166 0.6Airlines

15,300 Delta Air Lines, Inc. 172,742 70,5122,700 JetBlue Airways Corporation 60,359 67,6446,800 Northwest Airlines Corporation 88,069 38,0064,400 Pinnacle Airlines Corp. 81,491 46,327

402,661 222,489 1.9Building products

2,000 Jacuzzi Brands, Inc. 23,866 26,304 0.2Commercial services and supplies

400 CoStar Group Inc. 15,560 21,3761,200 G & K Services, Inc. Cl. A 62,750 55,495

300 Laureate Education Inc. 12,157 17,5983,600 Resources Connection Incorporated 91,728 102,5032,600 Tetra Tech, Inc. 53,426 43,1183,300 The Princeton Review, Inc. 22,100 23,581

400 United Stationers Inc. 21,247 24,0733,200 West Corporation 101,406 150,614

380,374 438,358 3.9Electrical equipment

2,300 Actuant Corporation 105,501 135,1481,300 Albany International Corp. Cl. A 52,799 51,1652,800 Astec Industries, Inc. 80,369 79,5872,000 Columbus McKinnon Corporation 29,194 26,8551,900 ESCO Technologies Inc. 189,936 234,7464,300 Power-One, Inc. 74,346 33,2571,600 Tennant Company 77,474 69,443

609,619 630,201 5.6

Road and rail

1,100 Celadon Group, Inc. 23,274 22,9752,000 Pacer International, Inc. 40,901 53,416

64,175 76,391 0.7Total Industrials 1,552,463 1,462,909 12.9

CONSUMER DISCRETIONARYAuto components

400 BorgWagner, Inc. 12,081 26,313 0.2Hotels, restaurants and leisure

3,800 California Pizza Kitchen, Inc. 118,182 127,0141,500 Fairmont Hotels & Resorts Inc. 47,845 64,0371,100 Four Seasons Hotels Inc. Limited Voting 62,985 89,1213,500 Orient-Express Hotel Ltd. Cl. A 89,993 135,8631,000 P.F. Chang's China Bistro, Inc. 65,257 72,2924,100 Scientific Games Corporation Cl. A 121,903 135,333

10,200 Six Flags Inc. 66,985 58,135600 Texas Roadhouse, Inc. Cl. A 25,668 25,556

598,818 707,351 6.2Household durables

1,500 Beazer Homes USA, Inc. 56,833 105,0735,500 Furniture Brands International, Inc. 177,277 145,6811,600 Libbey Inc. 65,086 31,005

299,196 281,759 2.5Internet and catalog retail

4,600 Alloy, Inc. 54,065 28,980600 Blue Nile, Inc. 24,106 24,041

2,400 ValueVision Media, Inc. Cl. A 48,481 35,330126,652 88,351 0.8

Media

2,000 ADVO, Inc. 79,232 78,0772,800 Arbitron Inc. 141,013 147,2311,200 Citadel Broadcasting Company 25,766 16,841

600 Entercom Communication Corp. 34,337 24,4821,100 Radio One, Inc. Cl. A 24,792 17,1645,200 Radio One, Inc. Cl. D Non-Voting 107,814 81,3925,500 Reader's Digest Association Inc.

Cl. A Non-Voting 101,188 111,232514,142 476,419 4.3

Specialty retail

1,000 Borders Group, Inc. 27,265 31,022900 Lithia Motors, Inc. 25,628 31,825505 OfficeMax Inc. 20,207 18,427

1,800 PETCO Animal Supplies, Inc. 56,056 64,6886,400 Restoration Hardware Incorporated 43,784 64,168

500 Sports Authority, Inc. 26,688 19,489500 Steiner Leisure Ltd. 11,982 22,718

6,100 Tweeter Home Entertainment Group, Inc. 45,022 18,692256,632 271,029 2.6

Textiles, apparel and luxury goods

700 Fossil, Inc. 23,169 19,4773,200 Warnaco Group, Inc. 75,318 91,192

98,487 110,669 1.0Total Consumer Discretionary 1,906,008 1,961,891 17.6

CONSUMER STAPLESFood and staples retailing

4,000 Performance Food Group Company 156,494 148,114 1.3Food products

500 Central Garden & Pet Company 19,056 30,1031,400 Del Monte Foods Company 17,031 18,4811,100 Fresh Del Monte Produce Inc. 37,780 36,2966,000 Interstate Bakeries Corporation 61,933 51,5531,138 Tootsie Roll Industries, Inc. 55,864 40,799

191,664 177,232 1.6Household products

600 WD-40 Company 27,168 20,540 0.2Total Consumer Staples 375,326 345,886 3.1


7



INDUSTRIALS (continued)

HEALTH CAREBiotechnology

3,900 Amylin Pharmaceuticals Inc. 94,566 100,0502,500 Cotherix, Inc. 23,117 31,225

600 Cytokinetics, Incorporated 12,842 5,1111,200 ID Biomedical Corporation 23,923 24,0341,400 QIAGEN NV 11,862 19,8021,900 Renovis, Inc. 32,851 35,5611,500 Rigel Pharmaceuticals, Inc. 34,867 36,6244,400 Vicuron Phamaceuticals Inc. 94,012 150,467

328,040 402,874 3.5Health care equipment and supplies

3,600 Candela Corporation 47,028 46,1111,900 Greatbatch, Inc. 74,088 55,659

500 SonoSite, Inc. 11,227 19,0233,700 Wright Medical Group, Inc. 106,501 121,087

238,844 241,880 2.2Health care providers and services

400 American Healthways, Inc. 14,241 20,7243,944 AMN Healthcare Services Incorporated 83,773 72,6581,200 Magellan Health Services, Inc. 49,623 51,9355,000 Option Care, Inc. 84,403 86,4122,800 VistaCare, Inc. 59,225 63,388

291,265 295,117 2.7Pharmaceuticals

800 Alnylam Pharmaceuticals Inc. 4,708 7,1582,000 AtheroGenics, Inc. 48,297 39,1732,300 Pharmion Corp. 65,880 65,432

118,885 111,763 1.0Total Health Care 977,034 1,051,634 9.4

FINANCIALSCapital markets

2,500 American Capital Strategies, Ltd. 93,231 110,6502,800 National Financial Partners Corporation 106,747 134,327

199,978 244,977 2.2Commercial banks

2,310 BOK Financial Corporation 83,706 130,5831,300 Cullen/Frost Bankers, Inc. 65,521 75,9261,675 First Midwest Bancorp, Inc. 61,333 72,2062,496 Fulton Financial Corporation 46,309 55,074

900 Placer Sierra Bancshares 23,261 30,082800 South Financial Group, Inc. 29,107 27,867

4,100 Sterling Bancshares, Inc. 83,335 78,1953,300 Umpqua Holdings Corporation 95,361 95,215

487,933 565,148 5.0Consumer finance

5,000 AmeriCredit Corp. 72,565 156,277 1.4Diversified financial services

2,100 Federal Agricultural Mortgage Corporation Cl. C Non-Voting 57,142 56,756

2,200 Medallion Financial Corp. 35,352 25,48292,494 82,238 0.7

Insurance

400 Endurance Specialty Holdings Limited 13,766 18,542600 First American Corporation 20,454 29,520

1,200 Max Re Capital Ltd. 30,187 33,682800 Zenith National Insurance Corp. 34,186 66,541

98,593 148,285 1.4Real estate

1,000 American Financial Realty Trust 17,016 18,8514,800 Annaly Mortgage Management Inc. 93,941 105,4894,600 Anthracite Capital, Inc. 73,718 66,8132,700 Gramercy Capital Corp. 61,346 80,948

800 LaSalle Hotel Properties 30,244 32,1723,600 MeriStar Hospitality Corporation 67,324 37,9483,000 MFA Mortgage Investments, Inc. 40,725 27,394

600 Pan Pacific Retail Properties, Inc. 33,392 48,817

1,500 SL Green Realty Corp. 75,151 118,5873,100 Trammell Crow Company 59,083 92,104

551,940 629,123 5.5Thrifts and mortgage finance

1,600 Franklin Bank Corporation 36,693 36,7912,000 Saxon Capital Inc. 54,775 41,845

91,468 78,636 0.7Total Financials 1,594,971 1,904,684 16.9

INFORMATION TECHNOLOGYCommunications equipment

9,800 Brocade Communications Systems, Inc. 80,196 46,6061,400 NETGEAR, Inc. 30,835 31,9171,900 Polycom Incorporated 43,229 34,723

154,260 113,246 1.0Computers and peripherals

9,100 Dot Hill Systems Corp. 128,856 58,44625,700 Gateway, Inc. 146,646 103,9521,100 Intergraph Corporation 35,088 46,4613,900 Novatel Wireless, Inc. 85,540 59,6093,000 Overland Storage, Inc. 69,467 35,080

465,597 303,548 2.6Electronic equipment and instruments

2,100 Benchmark Electronics, Inc. 79,472 78,3003,200 Electro Scientific Industries, Inc. 117,685 70,1302,100 National Instruments Corporation 64,555 54,568

300 OSI Systems, Inc. 7,267 5,8065,900 Plexus Corp. 85,522 102,9065,500 Spatialight, Inc. 33,566 38,2241,800 SYNNEX Corporation 35,065 38,6324,900 Veeco Instruments Inc. 189,624 97,7771,200 X-Rite, Incorporated 21,090 16,929

633,846 503,272 4.5Internet software and services

900 Altiris, Inc. 35,664 16,194833 Ariba, Inc. 50,198 5,922

1,700 Ask Jeeves, Inc. 48,092 62,9073,300 SupportSoft, Inc. 38,050 20,9925,500 United Online, Inc. 100,950 73,211

272,954 179,226 1.6IT services

1,300 Exponent, Inc. 42,670 45,5407,100 Sapient Corporation 64,480 69,0111,400 TNS Inc. 35,321 40,102

142,471 154,653 1.4Semiconductors and semiconductor equipment

8,300 Advanced Energy Industries, Inc. 198,801 79,9625,000 Applied Micro Circuits Corp. 21,383 15,6895,000 Atheros Communications 98,889 49,3967,700 Credence Systems Corporation 197,761 85,4134,900 Cymer, Inc. 216,805 158,2565,600 EMCORE Corporation 211,256 28,3483,200 Fairchild Semiconductor International, Inc. 52,609 57,8532,300 FEI Company 92,930 64,3041,100 Helix Technology Corporation 43,781 17,9059,700 Kulicke and Soffa Industries, Inc. 134,900 94,0448,200 LTX Corporation 174,749 49,8522,300 MIPS Technologies, Inc. Cl. A 20,694 20,2983,800 MKS Instruments, Inc. 89,579 78,6682,000 Netlogic Microsystems Inc. 27,981 43,463

14,100 ON Semiconductor Corporation 70,236 79,4992,200 Pixelworks Inc. 41,494 23,136

700 Power Integrations Inc. 13,702 18,5071,600 Rudolph Technologies, Inc. 38,412 28,1031,700 Semtech Corporation 41,236 34,694

700 Sigmatel Incorporated 20,417 14,723


8





FINANCIALS (continued)

Real estate (continued)

1,600 Silicon Laboratories Inc. 56,423 51,4018,600 TranSwitch Corporation 40,828 21,609

1,904,866 1,115,123 10.0Software

900 CallWave, Inc. 11,954 5,5161,200 Captiva Software Corporation 15,316 21,2391,100 Embarcadero Technologies, Inc. 8,772 7,5641,300 Moldflow Corporation 40,432 20,6351,500 Quest Software, Inc. 20,788 25,0593,600 SCO Group, Inc. 53,851 16,900

151,113 96,913 0.9Total Information Technology 3,725,107 2,465,981 22.0

TELECOMMUNICATION SERVICESDiversified telecommunication services

2,900 General Communication, Inc. Cl. A 33,028 35,083 0.3Total Telecommunication Services 33,028 35,083 0.3

UTILITIESElectric utilities

10,100 Calpine Corporation 34,891 42,0904,000 CMS Energy Corp. 43,101 73,8361,000 Westar Energy, Inc. 26,694 29,454

104,686 145,380 1.4Gas utilities

3,700 SEMCO Energy, Inc. 24,037 27,1651,200 Southwest Gas Corporation 39,281 37,521

63,318 64,686 0.5Total Utilities 168,004 210,066 1.9 Total Equity Investments 11,390,387 10,725,237 95.6


360,000 State Street Trust Company Canada 0.75% Jul 05/05 441,252 441,252 3.9 Total Investments 11,831,639 11,166,489 99.5 Other Assets, Less Liabilities 56,467 0.5 Total Net Asset Value 11,222,956 100.0




EQUITY INVESTMENTSEUROPEAN MONETARY UNIONFrance

3,722 Carbone Lorraine SA 234,186 216,6374,100 Elior SA 40,017 60,0099,876 Nexity 366,703 467,915

640,906 744,561 2.7Germany

3,700 Jungheinrich AG 65,532 98,7621,956 MTU Aero Engines Holding AG 62,736 73,1811,200 Pfleiderer AG Registered 7,873 25,447

136,141 197,390 0.7Greece

15,800 Babis Vovos International 295,185 295,6877,200 Fourlis SA 56,494 73,6714,200 Hyatt Regency Hotels and Tourism SA 61,652 56,428

413,331 425,786 1.5

Ireland

2,600 Jurys Doyle Hotel Group PLC 31,872 59,337 0.2Italy

2,000 Pirelli & C. Real Estate SPA 73,888 146,8382,100 Tod's SPA 102,013 122,789

175,901 269,627 0.9Netherlands

3,200 ASM International NV ADR 65,240 62,3643,157 Vedior NV 29,647 54,587

94,887 116,951 0.4Portugal

6,000 Media Capital, SGPS, SA 39,937 59,880 0.2Total European Monetary Union 1,532,975 1,873,532 6.6

OTHER EUROPEDenmark

6,600 Genmab A/S 123,539 140,519 0.5Norway

6,600 Aker Kvaerner ASA 158,676 328,3994,500 Ekornes ASA 89,622 107,105

248,298 435,504 1.6Sweden

43,600 Boliden AB 217,243 230,760 0.8Switzerland

28 Bank Sarasin & Cie AG 56,916 61,431133 Lindt & Spruengli AG 111,837 243,123300 Straumann AG 37,754 76,541

206,507 381,095 1.4United Kingdom

3,800 Acal PLC 45,571 27,9739,452 Alexon Group PLC 58,528 59,193

90,400 Babcock International Group PLC 316,485 336,6999,800 Benfield Group PLC 55,100 56,958

34,200 Dialog Semiconductor PLC 163,435 110,56089,500 Enodis PLC 220,603 227,14812,167 GCap Media PLC 93,748 72,6543,500 Green King PLC 57,920 97,904

12,700 Halma PLC 41,573 40,88323,100 Hunting PLC 57,999 127,9138,310 IG Group Holdings PLC 23,844 26,751

60,400 Premier Farnell PLC 283,294 214,34516,700 Punch Graphix PLC 37,646 48,98917,100 Taylor Nelson Sofres PLC 63,237 82,1965,300 Ulster Television PLC 49,449 54,562

1,568,432 1,584,728 5.7Total Other Europe 2,364,019 2,772,606 10.0


49,920 JB Hi-Fi Limited 122,325 165,90734,500 Just Group Limited 72,505 67,95878,402 Repco Corporation Limited 218,508 197,62023,298 Seek Limited 48,341 51,76514,802 Transpacific Industries Group Ltd. 34,761 52,09517,367 Toll Holdings Ltd. 97,898 211,742

594,338 747,087 2.7China

1,700 Sina Corp. 51,956 58,135 0.2Hong Kong

85,000 Great Eagle Holdings 236,459 261,39579,900 Moulin International Holdings Ltd. 59,243 –96,800 Noble Group Limited 38,464 101,976

334,166 363,371 1.3Japan

4,500 ABC-Mart, Inc. 161,227 171,571700 Aichi Bank, Ltd. 66,104 82,774

1,680 As One Corporation 46,423 42,42411,000 Bank of Nagoya, Ltd. 60,263 80,4761,000 Cawachi Limited 41,643 51,831


9



INFORMATION TECHNOLOGY (continued)

Semiconductors and semiconductor equipment (continued)



EUROPEAN MONETARY UNION (continued)

7,000 Century Leasing System, Inc. 88,739 88,8867,800 Chiyoda Corporation 64,948 118,525

15,000 Dainippon Screen MFG. Co., Ltd. 114,589 123,8307,200 DyDo Drinco, Inc. 212,654 306,3425,500 Enplas Corporation 203,526 182,3466,000 Espec Corp. 74,966 80,829

16,900 Exedy Corporation 259,448 364,7567,560 Fuji Seal, Inc. 329,120 294,0889,400 Glory Ltd. 208,204 184,495

12,000 Higo Bank, Ltd. 71,119 99,5941,700 Honeys. Co., Ltd. 43,229 65,380

400 Icom Incorporated 13,656 13,65911,100 Idec Izumi Corporation 104,132 172,351

2,600 Izumi Co., Ltd. 50,100 79,01722,000 Japan Transcity Corporation 92,585 107,706

2,900 Kahma Co., Ltd. 42,632 55,41214,000 Keiyo Bank, Ltd. 55,522 87,725

4,600 Kitagawa Industries Co., Ltd. 89,718 90,4881,300 Komeri Company Ltd. 47,398 42,9562,100 Mandom Corporation 63,125 66,8384,600 MISUMI Corporation 163,565 179,4513,400 Nakanishi Inc. 362,892 419,3316,800 Nissei Corporation 94,595 85,6705,000 Okumura Corporation 33,914 34,6465,400 SATO Corporation 151,013 147,999

11,000 Shiga Bank, Ltd. 74,638 79,50313,000 Shin-Etsu Polymer Co., Ltd. 101,033 127,002

4,000 Sumitomo Real Estate Sales Co., Ltd. 194,861 217,93214,000 The Kagawa Bank, Ltd. 95,082 101,18624,000 Tochigi Bank, Ltd. 178,188 204,493

2,700 Tokyo Tomin Bank, Limited 71,080 79,66923,500 Tsubaki Nakashima Co., Ltd. 356,110 361,5102,200 Zenrin Co., Ltd. 34,389 42,985

4,516,430 5,135,676 18.5Korea

46,800 Asiana Airlines, Inc. 248,256 245,32520,320 Daewoo Securities Co., Ltd. 114,576 206,287

6,800 Hyundai Development Company 61,897 195,97047,680 Korean Reinsurance Company 176,944 367,556

4,890 LG Cable Ltd. 103,395 127,87622,300 LG Insurance Co. Ltd. 157,901 208,932

4,400 NHN Corp. 463,873 558,35540,730 Pusan Bank 269,606 444,4023,010 Samsung Engineering Co. Ltd. 51,608 53,546

1,648,056 2,408,249 8.7Singapore

14,000 Pearl Energy Limited 9,898 17,49558,000 Singapore Exchange Limited 64,486 88,91329,300 Yellow Pages (Singapore) Limited 35,997 30,441

116,000 Unisteel Technology Limited 148,190 143,273258,571 280,122 1.0

Total Pacific Basin 7,403,517 8,992,640 32.4 NORTH AMERICACanada

5,500 Astral Media Inc. Cl. A 140,162 173,52550,200 CAE Inc. 287,878 329,814

9,400 ID Biomedical Corporation 184,736 188,26314,200 Inmet Mining Corp. 272,601 225,070

5,300 Northbridge Financial Corp. 86,564 159,000971,941 1,075,672 3.9

United States

3,100 Actuant Corporation Cl. A 143,529 182,15634,200 Advanced Energy Industries, Inc. 564,766 329,4839,250 ADVO, Inc. 381,330 361,1077,104 AMN Healthcare Services Incorporated 162,224 130,8723,500 Amylin Pharmaceuticals Inc. 93,198 89,7894,300 Anthracite Capital, Inc. 63,056 62,4562,600 AptarGroup, Inc. 136,272 161,8907,600 Arbitron Inc. 392,418 399,6274,300 Astec Industries, Inc. 123,505 122,2237,200 AtheroGenics, Inc. 152,966 141,0244,600 Atheros Communications 71,965 45,4441,800 Beazer Homes USA, Inc. 76,719 126,0884,600 Benchmark Electronics, Inc. 176,609 171,5156,900 California Pizza Kitchen, Inc. 181,664 230,6313,800 Citizens Banking Corporation 145,331 140,755

29,100 Credence Systems Corporation 361,796 322,7941,000 Cullen/Frost Bankers, Inc. 51,205 58,405

10,400 Cymer, Inc. 419,432 335,89161,600 Delta Air Lines, Inc. 523,396 283,89234,100 Dot Hill Systems Corp. 385,575 219,01313,500 Electro Scientific Industries, Inc. 347,746 295,8601,600 ESCO Technologies Inc. 164,194 197,681

12,500 Fairchild Semiconductor International,Inc. Cl. A 207,166 225,989

11,700 Federal Agricultural Mortgage Corporation Cl. C Non-Voting 305,611 316,212

4,800 FEI Company 121,090 134,19910,200 Furniture Brands International, Inc. 325,406 270,1714,600 G & K Services, Inc. Cl. A 232,789 212,730

83,800 Gateway, Inc. 418,248 338,95535,100 Global Alumina Corporation 75,257 53,7774,000 Gramercy Capital Corp. 90,463 119,9232,400 Greatbatch, Inc. 79,146 70,3064,700 Helix Technology Corporation 113,864 76,5031,800 Interstate Bakeries Corporation 17,576 15,4663,300 Jarden Corp. 188,149 218,096

31,900 Kulicke and Soffa Industries, Inc. 321,714 309,2805,800 Libbey Inc. 190,137 112,394

33,500 LTX Corporation 325,548 203,6623,500 Magellan Health Services, Inc. 143,248 151,478

13,500 MKS Instruments, Inc. 308,676 279,4783,000 National Financial Partners Corporation 120,259 143,922

16,000 Newpark Resources, Inc. 108,691 147,08441,400 Northwest Airlines Corporation Cl. A 450,821 231,39320,700 ON Semiconductor Corporation 109,039 116,7115,900 Option Care, Inc. 98,161 101,9664,700 Overland Storage, Inc. 98,644 54,9582,000 P.F. Chang's China Bistro, Inc. 129,212 144,584

10,500 P.H. Glatfelter Company 177,777 159,586400 Pan Pacific Retail Properties, Inc. 21,710 32,545

12,100 Performance Food Group Company 415,904 448,0443,800 Pharmion Corp. 108,843 108,1046,400 Pinnacle Airlines Corp. 126,235 67,384

13,300 Pixelworks Inc. 174,346 139,8701,900 Placer Sierra Bancshares 47,583 63,507

15,500 Plexus Corp. 220,861 270,3478,600 Radio One, Inc. Cl. D Non-Voting 188,617 134,6095,700 Reader's Digest Association Inc.

Cl. A Non-Voting 107,530 115,2776,300 Rudolph Technologies, Inc. 172,449 110,6552,600 Semtech Corporation 64,969 53,0613,400 Silicon Laboratories Inc. 107,493 109,227

24,000 Six Flags Inc. 149,258 136,78811,150 Sterling Bancshares, Inc. 240,676 212,6524,312 Tootsie Roll Industries, Inc. 182,227 154,592


1 0




Japan (continued)




9,700 Tweeter Home Entertainment Group, Inc. 69,445 29,7235,100 Umpqua Holdings Corporation 150,316 147,150

23,100 Veeco Instruments Inc. 595,274 460,9475,100 VistaCare, Inc. 112,209 115,4579,200 Warnaco Group, Inc. 227,299 262,1772,500 WD-40 Company 98,242 85,585

13,457,074 11,875,120 42.8Total North America 14,429,015 12,950,792 46.7Total Equity Investments 25,729,526 26,589,570 95.7


1,117,000 State Street Trust Company Canada 1.50% Jul 04/05 1,117,000 1,117,000 4.0 Total Investment Portolio 26,846,526 27,706,570 99.7 Spot Contracts (Schedule) – 85 –Total Investments 26,846,526 27,706,655 99.7Other Assets, Less Liabilities 72,990 0.3Total Net Asset Value 27,779,645 100.0

Schedule of Spot Contracts

Rating of the


1 1,307,487 Japanese Yen 14,542 Canadian Dollar 07/05/05 93 Mellon Bank AA-1 13,663 Canadian Dollar 1,235,651 Japanese Yen 07/05/05 (8) Morgan Stanley A+

$85




1 1




United States (continued)

C A P I TA L I N T E R N AT I O N A L F U N D S S t a t e m e n t s o f N e t A s s e t s

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Statements of Net Assets A s a t J u n e 3 0 , 2 0 0 5 – u n a u d i t e d a n d D e c e m b e r 3 1 , 2 0 0 4 – a u d i t e d

Capital International – Capital International – Capital International – Capital International – Capital International –Global Discovery International Equity U.S Equity U.S. Small Cap Global Small Cap

2005 2004 2005 2004 2005 2004 2005 2004 2005 2004

ASSETSInvestment portfolio, at market value $11,114,162 $11,917,884 $132,451,990 $130,869,999 $177,278,765 $186,143,879 $11,166,489 $11,053,122 $27,706,655 $25,994,567 Cash and cash equivalents 200,160 15,642 427,184 248,532 – 925 112,496 61,516 147,169 8,773 Receivable for portfolio securities sold 4,422 57,835 2,601,221 31,293 3,218,589 – 6,260 6,729 14,449 – Receivable for units subscribed – – 488,976 420,473 371,144 284,990 43,931 5,777 102,128 32,623 Dividends and interest receivable 11,710 10,965 336,237 247,735 190,368 166,427 15,463 18,790 18,439 12,758 Total assets 11,330,454 12,002,326 136,305,608 131,818,032 181,058,866 186,596,221 11,344,639 11,145,934 27,988,840 26,048,721 LIABILITIESPayable for portfolio securities purchased – 5,643 2,257,249 – 1,114,118 510,913 116,638 – 192,218 2,830 Payable for units redeemed – 3,925 879,072 88,697 477,417 100,075 1,265 5,785 6,353 –Accrued charges 1,088 570 40,832 18,917 23,839 12,626 919 493 8,963 4,376 Dividend and interest withholding

taxes payable 1,100 568 19,400 10,254 23,828 22,263 2,861 4,607 1,661 1,511 Total liabilities 2,188 10,706 3,196,553 117,868 1,639,202 645,877 121,683 10,885 209,195 8,717 NET ASSET VALUE REPRESENTED BY UNITHOLDERS’ EQUITY $11,328,266 $11,991,620 $133,109,055 $131,700,164 $179,419,664 $185,950,344 $11,222,956 $11,135,049 $27,779,645 $26,040,004 NET ASSET VALUE PER CLASS A UNIT $11.90 $12.04 $11.73 $11.79 $11.18 $11.20 n/a n/a $13.27 $13.13 NET ASSET VALUE PER CLASS A UNIT

– USD $9.71 $10.01 $9.57 $9.80 $9.12 $9.31 n/a n/a $10.83 $10.91 NET ASSET VALUE PER CLASS D UNIT $12.52 $12.64 $11.86 $11.89 $11.30 $11.30 n/a n/a $13.42 $13.25 NET ASSET VALUE PER CLASS D UNIT

– USD $10.21 $10.51 $9.68 $9.88 $9.22 $9.39 n/a n/a $10.95 $11.01NET ASSET VALUE PER CLASS F UNIT $12.14 $12.23 $11.99 $12.00 $11.44 $11.41 n/a n/a $13.62 $13.42 NET ASSET VALUE PER CLASS F UNIT

– USD $9.90 $10.17 $9.78 $9.97 $9.33 $9.48 n/a n/a $11.11 $11.15 NET ASSET VALUE PER CLASS H UNIT n/a n/a $9.84 $9.83 $9.51 $9.48 n/a n/a n/a n/aNET ASSET VALUE PER CLASS H UNIT

– USD n/a n/a $8.03 $8.17 $7.76 $7.88 n/a n/a n/a n/aNET ASSET VALUE PER CLASS I UNIT $8.35 $8.37 $7.53 $7.50 $8.61 $8.55 $8.65 $8.66 $8.75 $8.57 INVESTMENT PORTFOLIO,AVERAGE COST $11,210,569 $12,151,689 $129,835,068 $127,552,823 $183,816,930 $192,103,180 $11,831,639 $11,264,284 $26,846,526 $24,348,769


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Approved by the Board of Directors of Capital International Asset Management (Canada), Inc., Manager and Trustee

Director __________________________________________________________________

Director __________________________________________________________________

Statements of Operations F o r t h e s i x - m o n t h p e r i o d e n d e d J u n e 3 0 ( n o t e 1 ) – u n a u d i t e d


2005 2004 2005 2004 2005 2004 2005 2004 2005 2004

INCOME FROM INVESTMENTSDividends $78,569 $105,011 $2,352,680 $1,803,551 $1,371,642 $1,239,536 $53,957 $52,125 $204,440 $174,505 Less: Withholding taxes (10,805) (8,712) (345,775) (233,244) (193,785) (174,900) (10,106) (9,841) (26,015) (21,536) Interest 16,783 24,403 35,963 57,261 303,493 76,527 2,043 15,467 9,907 10,209

84,547 120,702 2,042,868 1,627,568 1,481,350 1,141,163 45,894 57,751 188,332 163,178 EXPENSESManagement fees 1,456 931 146,391 71,521 61,560 35,123 – – 36,628 16,650 Transfer agent 5,358 13,850 21,300 24,539 14,034 21,019 3,488 8,681 9,195 16,033 Legal and filing fees 21,624 17,498 27,029 16,098 27,029 16,098 5,406 4,375 21,623 17,498 Audit 16,800 19,000 21,000 17,100 21,000 17,100 4,200 19,000 16,800 19,000 Administration 50,748 55,552 159,147 172,787 211,473 281,891 47,871 54,079 65,093 64,659 Custody 1,326 1,177 28,446 22,765 – – – – 3,745 2,241 Bank charges 19 51 1,956 3,040 1,344 3,425 64 83 423 717 Other 2,740 1,753 5,083 1,753 4,303 1,753 561 174 3,260 1,753

100,071 109,812 410,352 329,603 340,743 376,409 61,590 86,392 156,767 138,551 Less: Expense reimbursement (93,835) (103,757) (173,484) (186,641) (199,462) (260,325) (56,229) (80,586) (104,821) (110,943)Net expenses 6,236 6,055 236,868 142,962 141,281 116,084 5,361 5,806 51,946 27,608 NET INVESTMENT INCOME 78,311 114,647 1,806,000 1,484,606 1,340,069 1,025,079 40,533 51,945 136,386 135,570 REALIZED AND UNREALIZED GAIN

(LOSS) ON INVESTMENTSChange in unrealized appreciation

(depreciation) in value of foreign currency 718 266 (21,219) (4,929) (8,055) 187 299 3,864 369 (723)

Realized gain (loss) on foreign currency transactions (3,701) (4,347) 266,161 (9,081) (118,721) 31,404 (4,304) (11,329) (3,508) (17,422)

Change in unrealized appreciation (depreciation) in value of investments 137,397 526,181 (700,254) 3,520,792 (578,865) 10,626,000 (453,989) 464,542 (785,669) 1,084,812

Net realized gain (loss) on investments (237,258) 110,568 (952,937) 592,061 580,781 682,512 400,635 8,881 1,128,052 659,008 Net gain (loss) on investments (102,844) 632,668 (1,408,249) 4,098,843 (124,860) 11,340,103 (57,359) 465,958 339,244 1,725,675 Increase (decrease) in net assets

from operations $(24,533) $747,315 $397,751 $5,583,449 $1,215,209 $12,365,182 $(16,826) $517,903 $475,630 $1,861,245 Earnings per Class A unit $(0.15) $0.39 $(0.09) $0.25 $(0.01) $0.22 n/a n/a $0.13 $0.53 Earnings per Class D unit $(0.12) $0.88 $(0.20) $0.10 $(0.04) $0.06 n/a n/a $0.15 $0.51 Earnings per Class F unit $(0.20) $0.28 $(0.03) $0.16 $0.01 $0.60 n/a n/a $0.21 $0.95 Earnings per Class H unit n/a n/a $(0.37) $(0.19) $0.04 $(0.03) n/a n/a n/a n/aEarnings per Class I unit $(0.02) $0.52 $0.03 $0.37 $0.06 $0.59 $(0.01) $0.40 $0.16 $0.73

C A P I TA L I N T E R N AT I O N A L F U N D S S t a t e m e n t s o f O p e r a t i o n s • S t a t e m e n t s o f C h a n g e s i n N e t A s s e t s

1 3

Statements of Changes in Net Assets For the s ix-month per iod ended June 30 (note 1) – unaudited


2005 2004 2005 2004 2005 2004 2005 2004 2005 2004

NET ASSET VALUE – BEGINNING OF PERIOD $11,991,620 $11,757,737 $131,700,164 $99,714,836 $185,950,344 $172,111,711 $11,135,049 $10,919,801 $26,040,004 $16,297,539Increase (decrease) in net assets

from operations (24,533) 747,315 397,751 5,583,449 1,215,209 12,365,182 (16,826) 517,903 475,630 1,861,245DISTRIBUTIONS TO UNITHOLDERSDistributions from net investment

income – – – – – – – – – – Distributions from realized gain

on sale of investments – – – – – – – – – – – – – – – – – – – –

CAPITAL UNIT TRANSACTIONSProceeds from sale of units 204,894 369,182 19,111,721 25,994,998 13,249,633 24,363,170 655,486 686,731 4,126,928 6,363,733Units redeemed (843,715) (310,708) (18,100,581) (6,452,431) (20,995,522) (11,473,168) (550,753) (381,596) (2,862,917) (423,632)

(638,821) 58,474 1,011,140 19,542,567 (7,745,889) 12,890,002 104,733 305,135 1,264,011 5,940,101NET ASSET VALUE – END OF PERIOD $11,328,266 $12,563,526 $133,109,055 $124,840,852 $179,419,664 $197,366,895 $11,222,956 $11,742,839 $27,779,645 $24,098,885


C A P I TA L I N T E R N AT I O N A L F U N D S N o t e s t o F i n a n c i a l S t a t e m e n t s J u n e 3 0 , 2 0 0 5 a n d 2 0 0 4 – u n a u d i t e d

1 4

1. Description of the FundsCapital International – Global Discovery, Capital International –International Equity, Capital International – U.S. Equity, CapitalInternational – U.S. Small Cap and Capital International – GlobalSmall Cap (the Funds) are open-ended mutual fund trustscreated under the laws of Ontario by declaration of trust datedDecember 1, 2000. The trustee of the Funds is CapitalInternational Asset Management (Canada), Inc.

The names of the Funds and the date of commencement ofoperations for each of the classes are shown below:

Capital International – Class A Class D Class F Class H Class IGlobal Discovery Nov. 1, 2002 Nov. 1, 2002 Nov. 1, 2002 n/a Dec. 15, 2000International Equity Nov. 1, 2002 Nov. 1, 2002 Nov. 1, 2002 May 3, 2004 Dec. 15, 2000U.S. Equity Nov. 1, 2002 Nov. 1, 2002 Nov. 1, 2002 May 3, 2004 Dec. 15, 2000U.S. Small Cap n/a n/a n/a n/a Dec. 15, 2000Global Small Cap Nov. 1, 2002 Nov. 1, 2002 Nov. 1, 2002 n/a Dec. 15, 2000

Capital International – International Equity and CapitalInternational – U.S. Equity each offer five distinct classes of units,Class A, D, F, H and I units. Capital International – GlobalDiscovery and Capital International – Global Small Cap each offerfour distinct classes of units, Class A, D, F and I units. CapitalInternational – U.S. Small Cap offers one class of units, Class I.The different classes have different management fee structures.

These financial statements and accompanying notes to thefinancial statements presented herein are for the Class I units.Separate financial statements have also been issued for the ClassA, D, F and H units. The financial statements for the Class A, D, Fand H units are available upon request by writing to the fundmanager at the address contained in note 11.

2. Summary of significant accounting policies

These financial statements, prepared in accordance withCanadian generally accepted accounting principles, includeestimates and assumptions by management that affect thereported amount of assets, liabilities, income and expenses duringthe reporting period. Actual results may differ from estimates. Thefollowing is a summary of significant accounting policies followedby the Funds.

Investments and investment income

Investments in securities are recorded at closing market prices onnational or foreign securities exchanges at the valuation date.Securities not traded on that date are generally valued at thelatest available sale price or at a price within the latest availablebid and ask prices. Valuations of securities for which no recentmarket quotations are readily available are determined by the fundmanager in such a manner as it deems appropriate to reflect fairvalue.

Short-term investments are carried at amortized cost, whichapproximates market value.

Investment transactions are accounted for on the trade date.Interest income is accrued as it is earned. Realized gains (losses)on the sale of investments are calculated on an average cost basis.

Dividend income is recorded on the ex-dividend date net of foreignwithholding taxes. Amounts that may be reclaimed are recorded astax reclaim receivable.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and overnightdeposits that are readily convertible to known amounts of cashwhich are subject to an insignificant risk of changes in value.

Foreign currency translation

Assets and liabilities of the Funds are translated into Canadiandollars at the exchange rates in effect at the valuation date.Purchases and sales of investments and revenue and expenses aretranslated at the rates of exchange prevailing on the respectivedates of such transactions.

Reported net realized gains (losses) from foreign currencytransactions arise from sales of foreign currencies, currency gains(losses) realized between the trade and settlement dates onsecurities transactions, and the difference between the amountsof dividends, interest and foreign withholding taxes initiallyrecorded and the Canadian dollar equivalent of the amountsactually received or paid. Net unrealized foreign exchange gains(losses) arise from changes in the value of assets and liabilitiesexcluding investments in securities at the fiscal year-end,resulting from changes in the exchange rates.

Forward foreign currency exchange contracts

The Funds may enter into forward foreign currency exchangecontracts to hedge foreign currency exposure on investments.

A forward foreign currency exchange contract is a commitment topurchase or sell a foreign currency at a future date at a negotiatedexchange rate. The gain (loss) arising from the differencebetween the original contract and the closing of such contract isincluded in realized gain (loss) on foreign currency transactions.The difference between the value of the contract on the valuationdate and the date the contract originated is recorded asunrealized appreciation (depreciation) of investments.

The maximum credit risk is the aggregate value of contracts withpositive value as shown on the Schedule of Spot/ ForwardContracts.

Net asset value per unit by class

The unit price of each class of units of a fund is calculated bydividing the market value of net assets of a fund allocated to thatclass (the value of the proportionate share of the assets of the

fund allocated to that class less the liabilities of that class and theproportionate share of the common liabilities of the fundallocated to that class) by the total number of outstanding unitsof that class.


1 5

3. Unitholders’ equityThe authorized equity of the Funds consists of an unlimited number of classes of units, and an unlimited number of units of each class.Currently, the Funds offer up to five classes of units designated as Class A, D, F, H and I units. Units of the Funds are offered on acontinuous basis. Unitholders’ requests to make additional subscriptions in or redemptions from the Funds received by the trustee by 4:00 p.m. EST on the valuation day will be valued at the purchase price per unit determined on that valuation day.

Summary of units outstanding:

Capital International – Global DiscoveryClass A Class D Class F Class I

2005 2004 2005 2004 2005 2004 2005 2004Units outstanding – Beginning of period 7,983 2,206 1,405 1,000 8,116 3,365 1,407,509 1,424,341Subscriptions (including reinvested distributions) 6,014 4,693 – 404 2,752 4,749 12,411 28,108Redemptions (1,981) (1,606) – – (5,005) (45) (91,735) (33,510)Units outstanding – End of period 12,016 5,293 1,405 1,404 5,863 8,069 1,328,185 1,418,939

Capital International – International EquityClass A Class D Class F Class H Class I

2005 2004 2005 2004 2005 2004 2005 2004 2005 2004Units outstanding – Beginning of period 863,896 328,819 19,726 2,356 613,529 145,858 1,003 – 15,193,264 13,195,027Subscriptions (including reinvested distributions) 269,922 370,059 28,433 9,505 266,397 256,558 36,909 1,000 1,571,714 2,424,328Redemptions (174,246) (36,845) (1,043) – (173,397) (5,610) (134) – (1,837,296) (782,604)Units outstanding – End of period 959,572 662,033 47,116 11,861 706,529 396,806 37,778 1,000 14,927,682 14,836,751

Capital International – U.S. EquityClass A Class D Class F Class H Class I

2005 2004 2005 2004 2005 2004 2005 2004 2005 2004Units outstanding – Beginning of period 459,163 104,081 112,373 2,375 216,397 132,059 1,001 – 20,715,578 20,070,764Subscriptions (including reinvested distributions) 68,792 282,626 3,703 74,774 180,019 38,935 – 1,000 1,222,556 2,160,790Redemptions (64,168) (6,227) (12,937) – (158,455) (969) – – (2,153,698) (1,257,902)Units outstanding – End of period 463,787 380,480 103,139 77,149 237,961 170,025 1,001 1,000 19,784,436 20,973,652

Capital International – U.S. Small CapClass I

2005 2004Units outstanding – Beginning of period 1,285,909 1,265,585Subscriptions (including reinvested distributions) 78,363 74,901Redemptions (66,310) (41,932)Units outstanding – End of period 1,297,962 1,298,554

Capital International – Global Small CapClass A Class D Class F Class I

2005 2004 2005 2004 2005 2004 2005 2004Units outstanding – Beginning of period 208,198 31,170 13,882 1,000 64,918 35,082 2,596,817 1,943,810Subscriptions (including reinvested distributions) 38,615 102,041 1,022 7,385 17,393 29,419 389,305 530,422Redemptions (27,424) (409) (1,252) – (4,804) (658) (286,987) (47,966)Units outstanding – End of period 219,389 132,802 13,652 8,385 77,507 63,843 2,699,135 2,426,266

4. Net realized gain (loss) oninvestments and foreign currency transactions

For the six-month period Capital International – Capital International –ended June 30 Global Discovery International Equity

2005 2004 2005 2004Proceeds from sale of

investments* $ 2,319,659 $ 1,997,056 $ 29,450,904 $ 12,531,496Cost of investments –

Beginning of period* 10,778,200 11,308,344 122,976,823 95,865,286Cost of investments

purchased during the period* 1,776,300 1,771,055 35,283,086 31,954,130

12,554,500 13,079,399 158,259,909 127,819,416Cost of investments –

End of period* (9,997,583) (11,192,911) (127,856,068) (115,879,981)Cost of investments sold

during the period* 2,556,917 1,886,488 30,403,841 11,939,435Realized gain (loss) on

investments sold (237,258) 110,568 (952,937) 592,061Realized gain (loss) on

short-term investments (8) – – –Realized gain (loss) on

foreign currency transactions (3,701) (4,347) 266,161 (9,081)Net realized gain (loss) on

investments and foreign currency transactions $ (240,967) $ 106,221 $ (686,776) $ 582,980

* Excludes cost of short-term investments

For the six-month period Capital International – Capital International –ended June 30 U.S. Equity U.S. Small Cap

2005 2004 2005 2004Proceeds from sale of

investments* $ 31,875,538 $ 14,383,526 $ 2,712,161 $ 2,358,024Cost of investments –

Beginning of period* 185,465,000 176,101,882 11,047,726 10,797,449Cost of investments

purchased during the period* 29,646,687 25,631,342 2,654,187 2,753,917

215,111,687 201,733,224 13,701,913 13,551,366Cost of investments –

End of period* (183,816,930) (188,032,210) (11,390,387) (11,202,223)Cost of investments sold

during the period* 31,294,757 13,701,014 2,311,526 2,349,143Realized gain (loss) on

investments sold 580,781 682,512 400,635 8,881Realized gain (loss) on

short-term investments 285,923 – 665 –Realized gain (loss) on

foreign currency transactions (118,721) 31,404 (4,304) (11,329)Net realized gain (loss) on

investments and foreign currency transactions $ 747,983 $ 713,916 $ 396,996 $ (2,448)


For the six-month period Capital International –ended June 30 Global Small Cap

2005 2004Proceeds from sale of

investments* $ 5,319,726 $ 3,996,436Cost of investments –

Beginning of period* 23,386,769 14,051,330Cost of investments

purchased during the period* 6,534,431 9,683,703

29,921,200 23,735,033Cost of investments –

End of period* (25,729,526) (20,397,605)Cost of investments sold

during the period* 4,191,674 3,337,428Realized gain (loss) on

investments sold 1,128,052 659,008Realized gain (loss) on

short-term investments – –Realized gain (loss) on

foreign currency transactions (3,508) (17,422)Net realized gain (loss) on

investments and foreign currency transactions $ 1,124,544 $ 641,586


5. Fund management and feesCapital International Asset Management (Canada), Inc. is thefund manager, pursuant to a master management agreementdated December 1, 2000, and amended October 4, 2002. TheFunds are responsible for all reasonable expenses of theiradministration, management and operation. No management feeis payable by the Class I unitholders, as each investor pays anegotiated fee directly to the fund manager. Expenses as set outin the Statements of Operations are comprised of fees incurred forthe administration and management of the Funds, includingcustodian, transfer agent, legal, audit and GST.

The trustee of the Funds holds sole legal title to all property ofthe Funds in trust for the unitholders.

State Street Trust Company Canada has been appointed by thetrustee to provide fund accounting services. The portfolio assetsof the Funds are held under the custodianship of State StreetTrust Company Canada. In addition, the trustee has appointedIFDS Limited as the registrar and transfer agent of the Funds.

Capital International Asset Management (Canada), Inc. hasagreed to reimburse a portion of the Funds’ operating expensesfor the six months ended June 30, as follows:

2005 2004Capital International – Global Discovery $ 93,835 $ 103,757Capital International – International Equity 173,484 186,641Capital International – U.S. Equity 199,462 260,325Capital International – U.S. Small Cap 56,229 80,586Capital International – Global Small Cap 104,821 110,943


1 6

The fund manager expects to voluntarily reimburse the Funds forsome of their expenses for the foreseeable future, but may decideto terminate such reimbursement at any time.

For the six months ended June 30, 2005 and the year endedDecember 31, 2004, the ratio of gross expenses to average netassets with expense reimbursements for Class I unitholders wereas follows:

2005 2004Capital International – Global Discovery 0.08% 0.08%Capital International – International Equity 0.11% 0.11%Capital International – U.S. Equity 0.08% 0.09%Capital International – U.S. Small Cap 0.10% 0.08%Capital International – Global Small Cap 0.09% 0.10%

For the six months ended June 30, 2005 and the year endedDecember 31, 2004, the ratio of gross expenses to average netassets without expense reimbursements for Class I unitholderswould have been:

2005 2004Capital International – Global Discovery 1.01% 1.04%Capital International – International Equity 0.30% 0.35%Capital International – U.S. Equity 0.24% 0.28%Capital International – U.S. Small Cap 1.15% 1.22%Capital International – Global Small Cap 0.60% 0.74%

6. Income taxesThe Funds qualify as mutual fund trusts, under the Income TaxAct (Canada). The Funds distribute sufficient taxable netinvestment income and net realized taxable capital gains, less theamount required to enable the Funds to utilize any available taxcredit attributable to redemptions during the period, to theirunitholders. Such income is taxable in the hands of theunitholders. Accordingly, no provision for income taxes has beenrecorded in these financial statements.

There are capital loss carry-forwards available to the Funds whichmay be applied to reduce future net realized capital gains as atDecember 31, 2004, as follows:

2004Capital International – Global Discovery $ 2,104,408Capital International – International Equity 8,888,936Capital International – U.S. Equity 20,314,482Capital International – U.S. Small Cap 1,416,020Capital International – Global Small Cap 3,486,958

7. Brokerage commissionsThe total commissions paid to dealers in connection with portfoliotransactions were as follows:

2005 2004Capital International – Global Discovery $ 6,300 $ 6,049Capital International – International Equity 63,838 60,315Capital International – U.S. Equity 64,975 33,204Capital International – U.S. Small Cap 9,718 10,090Capital International – Global Small Cap 19,532 23,298

8. Redemption of unitsUnitholders may redeem their units of the Funds on any valuationday by delivering a written request (Redemption Request) to thedealer through whom the investment in the units was made. If aRedemption Request is received by a dealer on any valuation dayprior to 4:00 p.m. EST, then the units being redeemed will beprocessed at the net asset value per unit calculated on thatvaluation day. A Redemption Request received after such time willbe processed at the net asset value per unit calculated on the nextvaluation day. Unitholders must complete a redemption applicationand submit all required supporting documentation before theredemption will be made and redemption proceeds paid.

Signatures may be required to be guaranteed by a Canadianchartered bank or trust company or by a member of a recognizedstock exchange or any other guarantor acceptable to the fundmanager on a Redemption Request with proceeds in excess of$10,000 or where redemption proceeds are to be paid to someoneother than the registered unitholder or to an address other thanthat of the registered address of the unitholder. If the unitholder isa corporation, partnership, agent, fiduciary or surviving joint owner,additional documentation will be required.

9. Historical net asset value perunit by class

The net asset value per Class I unit at the end of the six-monthperiod ended June 30, 2005 and each of the five years endedDecember 31, based on the number of units outstanding at theperiod-end, was as follows:

2005 2004 2003 2002 2001 2000Capital International – Global Discovery $8.35 $8.37 $8.20 $6.86 $9.44 $9.72Capital International – International Equity 7.53 7.50 7.15 6.46 7.90 9.51Capital International – U.S. Equity 8.61 8.55 8.44 7.55 10.26 9.88Capital International – U.S. Small Cap 8.65 8.66 8.63 7.35 10.07 9.60Capital International – Global Small Cap 8.75 8.57 7.95 6.72 7.69 9.17


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10. Generally accepted accounting principles

The Canadian Institute of Chartered Accountants (“CICA”) issuedSection 1100, Generally Accepted Accounting Principles (“GAAP”)of the CICA Handbook – Accounting, which establishes standardsfor financial reporting. Section 1100 applies to all entities, withthe exception of rate-regulated operations, for fiscal yearsbeginning on or after October 1, 2003.

As a result, certain disclosures previously considered GAAP byvirtue of general use in the investment funds industry, are nolonger considered GAAP. This section primarily impacts thedisclosure of an investment fund’s financial statements, andaccordingly, has no impact on the valuation of a fund or in thecalculation of the net asset value per unit or share of a fund.

11. Portfolio transactionsA copy of the statement of portfolio transactions (unaudited) forthe Funds for the six months ended June 30, 2005 is availablewithout charge upon written request to the fund manager, CapitalInternational Asset Management (Canada), Inc., Bay WellingtonTower, BCE Place, 181 Bay Street, Toronto, Ontario M5J 2T3.


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Financial Highlights – Class I F o r t h e p e r i o d s e n d e d J u n e 3 0 , 2 0 0 5 a n d D e c e m b e r 3 1

Capital International – Global Discovery

DATA PER UNIT 2005 2004 2003 2002 2001 2000

NET ASSET VALUE PER CLASS I UNIT – at inception $10.00NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS –

formation of portfolio (0.08)

NET ASSET VALUE PER CLASS I UNIT – BEGINNING OF PERIOD $8.37 $8.20 $6.86 $9.44 $9.72 $9.92INCOME (LOSS) FROM INVESTMENT OPERATIONS1

Net investment income (loss) for the period 0.06 0.14 0.09 0.09 0.14 0.01Net realized and unrealized gain (loss) on investments (0.08) 0.17 1.34 (2.58) (0.39) (0.21)

(0.02) 0.31 1.43 (2.49) (0.25) (0.20) DISTRIBUTIONSDistribution per Unit – from income – (0.14) (0.09) (0.09) (0.03) – Distribution per Unit – from net realized gains – – – – – –

– (0.14) (0.09) (0.09) (0.03) – NET ASSETS VALUE PER CLASS I UNIT – END OF PERIOD $8.35 $8.37 $8.20 $6.86 $9.44 $9.72

RATIOS AND SUPPLEMENTAL DATATotal net assets – End of period $11,096,505 $11,778,483 $11,679,354 $9,925,905 $12,949,013 $9,568,803 Average net assets $11,364,458 $11,897,444 $10,390,881 $11,261,936 $12,110,049 $9,472,409 Ratio of net expenses to average net assets2 0.08% 0.08% 0.08% 0.08% 0.08% 0.06%Portfolio turnover rate3 0.17 0.36 0.47 0.40 0.20 – Rate of return -0.16% 3.79% 20.9% -26.4% -2.6% –

Capital International – International Equity

DATA PER UNIT 2005 2004 2003 2002 2001 2000



NET ASSET VALUE PER CLASS I UNIT – BEGINNING OF PERIOD $7.50 $7.15 $6.46 $7.90 $9.51 $9.82 INCOME (LOSS) FROM INVESTMENT OPERATIONS1

Net investment income (loss) for the period 0.11 0.14 0.12 0.13 0.17 –Net realized and unrealized gain (loss) on investments (0.08) 0.34 0.69 (1.46) (1.70) (0.31)

0.03 0.48 0.81 (1.33) (1.53) (0.31) DISTRIBUTIONSDistribution per Unit – from income – (0.13) (0.12) (0.11) (0.08) – Distribution per Unit – from net realized gains – – – – – –


RATIOS AND SUPPLEMENTAL DATATotal net assets – End of period $112,451,122 $113,907,201 $94,317,023 $81,067,516 $46,607,516 $15,254,432 Average net assets $116,833,554 $107,865,831 $81,057,101 $86,377,022 $25,838,872 $15,099,013 Ratio of net expenses to average net assets2 0.11% 0.11% 0.11% 0.11% 0.11% 0.11%Portfolio turnover rate3 0.22 0.25 0.24 0.39 0.46 – Rate of return 0.47% 6.69% 12.5% -16.8% -16.0% –

1 Net investment income per unit is calculated based on the daily average number of units outstanding.2 Ratio of expenses to average net assets represents the aggregate expenses attributable to Class I units for the period divided by the daily average net asset value of Class I units of the Fund.

The ratio has been annualized for periods less than one year.3 Portfolio turnover rate equals the lesser of purchases or sales divided by the average value of the portfolio securities, excluding short-term investments.

C A P I TA L I N T E R N AT I O N A L F U N D S F i n a n c i a l H i g h l i g h t s C l a s s I ( u n a u d i t e d )

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Capital International – U.S. Equity

DATA PER UNIT 2005 2004 2003 2002 2001 2000




Net investment income (loss) for the period 0.07 0.09 0.05 0.11 0.12 –Net realized and unrealized gain (loss) on investments (0.01) 0.12 0.90 (2.70) 0.33 (0.10)

0.06 0.21 0.95 (2.59) 0.45 (0.10) DISTRIBUTIONSDistribution per Unit – from income – (0.10) (0.06) (0.12) (0.04) – Distribution per Unit – from net realized gains – – – – (0.03) –


RATIOS AND SUPPLEMENTAL DATATotal net assets – End of period $170,338,188 $177,059,964 $169,437,132 $153,661,362 $108,457,284 $9,651,975 Average net assets $175,688,910 $180,733,947 $159,217,108 $156,475,913 $42,459,012 $9,523,248 Ratio of net expenses to average net assets2 0.08% 0.08% 0.08% 0.08% 0.08% 0.09%Portfolio turnover rate3 0.16 0.26 0.32 0.37 0.30 – Rate of return 0.73% 2.34% 12.6% -25.2% 4.6% –


DATA PER UNIT 2005 2004 2003 2002 2001 2000




Net investment income (loss) for the period 0.03 0.07 0.03 0.05 0.07 –Net realized and unrealized gain (loss) on investments (0.04) 0.03 1.28 (2.71) 0.42 (0.12)

(0.01) 0.10 1.31 (2.66) 0.49 (0.12) DISTRIBUTIONSDistribution per Unit – from income – (0.07) (0.03) (0.06) (0.02) – Distribution per Unit – from net realized gains – – – – – –


RATIOS AND SUPPLEMENTAL DATATotal net assets – End of period $11,222,956 $11,135,049 $10,919,801 $9,157,736 $11,347,980 $9,331,182 Average net assets $10,811,412 $11,078,848 $9,486,187 $10,473,119 $10,195,986 $9,140,004 Ratio of net expenses to average net assets2 0.10% 0.10% 0.10% 0.10% 0.10% 0.10%Portfolio turnover rate3 0.25 0.39 0.42 0.36 0.43 0.01 Rate of return -0.15% 1.12% 17.7% -26.4% 5.2% –




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DATA PER UNIT 2005 2004 2003 2002 2001 2000




Net investment income (loss) for the period 0.06 0.09 0.10 0.08 0.08 –Net realized and unrealized gain (loss) on investments 0.12 0.60 1.22 (1.01) (1.49) (0.70)

0.18 0.69 1.32 (0.93) (1.41) (0.70) DISTRIBUTIONSDistribution per Unit – from income – (0.07) (0.09) (0.04) (0.07) – Distribution per Unit – from net realized gains – – – – – –


RATIOS AND SUPPLEMENTAL DATATotal net assets – End of period $23,629,942 $22,250,848 $15,460,781 $11,576,556 $13,167,511 $14,588,079 Average net assets $23,442,106 $19,676,768 $12,304,831 $12,578,465 $13,242,497 $14,620,552 Ratio of net expenses to average net assets2 0.09% 0.09% 0.09% 0.09% 0.09% 0.07%Portfolio turnover rate3 0.20 0.42 0.83 0.67 0.65 – Rate of return 2.17% 8.62% 19.7% -12.0% 15.4% –




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