PRINCIPAL LIFE STYLE FUND Unaudited Semi-Annual Report CONTENTS
Management and Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Manager’s report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . MANAGEMENT AND ADMINISTRATION MANAGER Principal Asset Management Company (Asia) Limited Units 1001-1003, Central Plaza 18 Harbour Road Wanchai Hong Kong TRUSTEE, CUSTODIAN AND REGISTRAR Principal Trust Company (Asia) Limited Units 1001-1003, Central Plaza 18 Harbour Road Wanchai Hong Kong DELEGATES OF THE MANAGER Principal Global Investors, LLC 801 Grand Avenue Des Moines IA 50392, USA LEGAL ADVISORS TO THE MANAGER Baker & McKenzie 14th Floor, Hutchison House 10 Harcourt Road Central Hong Kong AUDITORS KPMG 8th Floor, Prince’s Building 10 Chater Road, Central Hong Kong MANAGER’S REPORT United States The US equity markets got off to a good start in 2004, buoyed by improving economic and corporate news. However, stocks suffered setbacks and concerns about slow jobs growth and renewed worries about terrorism in March. Consumer confidence rose in January to its highest level in almost two and a half years, but fell in February attributed to consumer gloom about the difficult jobs markets. There was a modest increase in the number of works, but well below the consensus forecast. In 2Q 2004, stocks gained on improved outlook on economic growth and anticipation of good 2Q corporate earnings. Europe During the later part of 2003, the overall prospects for the European economies remained uninspiring. The strengthening of the euro, risks of deflation and the lack of stimulatory monetary policy have overshadowed the euro economy. However, European equities advanced in January 2004 and rose to their highest level since 2002 in February, boosted by increased merger activity. In March, fears about the strength of the eurozone’s recovery, along with the impact of terrorist bombings in Madrid had lead to its first monthly loss in 2004. In 2Q 2004, stocks gained on improved outlook of global economic growth. Japan Japanese equities began 2004 in a relatively buoyant atmosphere, supported by expectations of good earnings results. However, the market succumbed to selling in the final week of January when investors began to take profits and positive mood wilting as the yen continued to gain ground against the US dollar. The market started to recover in February and rallied in March, as investors welcomed signs that the recovery was broadening from exports to improving domestic demand. In March, shares in companies more oriented to Japan’s local economy, such as banks, real estate and retail, had the most significant gains, because of expectations that growing capital expenditure and exports would fuel consumer spending. In 2Q 2004, stocks continued to post gain, particularly during the month of June. Asia ex-Japan region In 1H04, the China stock market dropped considerably as investors were concerned about the Chinese government’s tightening policy in view of the overheated economy. The HK market also suffered due to worries about China’s tightening policy and overall weak performance of major global equity markets. The Taiwanese market followed the falling outlook for global technology companies, such as Intel and Motorola. The market is affected by downward revisions in expected demand for computer notebooks, TFT-LCD displays, and computer memory computer chips. In Korea, the IT sector was weighed down by Samsung Electronics while the financial sector was affected by concerns about problematic loans. Bond markets In late 2003, the global bond markets sold off after third quarter U. S. gross domestic product (GDP) came in at a surprising 7.2% and was later revised upward to 8.2%. However, Fed members convinced the markets that the Fed would continue its lose monetary policy for longer than usual due to the output gap and the “jobless” recovery. The Bank of Japan (BoJ) also made similar statements that indicated it would continue with its zero interest rate policy.
But in March and April 2004, the release of a series of strong economic data indicated that the recovery of theUS economy would be stronger than originally expected. The Fed raised the Fed Fund Rate by 0.25% in Junefrom its lowest level in decades. The market in general expected that more interest rate rise to come in theremainder of 2004 as global inflation rate shows sign of picking up, amid a recovering world economy and thesharp rise in oil prices. INVESTMENT REPORT PORTFOLIO STATEMENT AS AT 30 JUNE 2004 Principal Asian Equity Fund Principal Asian Equity Fund (continued) Listed Investments Quantity Listed Investments Quantity
Philippine Long Distance Telephone — ADR
INVESTMENT REPORT PORTFOLIO STATEMENT AS AT 30 JUNE 2004 (continued) Principal Asian Equity Fund (continued) Principal International Equity Fund Listed Investments Quantity Listed Investments Quantity Total investments Other net assets Total net asset value Total listed investment at cost INVESTMENT REPORT PORTFOLIO STATEMENT AS AT 30 JUNE 2004 (continued) Principal International Equity Fund (continued) Principal International Equity Fund (continued) Listed Investments Quantity Listed Investments Quantity INVESTMENT REPORT PORTFOLIO STATEMENT AS AT 30 JUNE 2004 (continued) Principal International Equity Fund (continued) Principal International Equity Fund (continued) Listed Investments Quantity Listed Investments Quantity Total investments Other net assets Total net asset value Total listed investment at cost INVESTMENT REPORT PORTFOLIO STATEMENT AS AT 30 JUNE 2004 (continued) Principal International Bond Fund Principal International Bond Fund (continued) Listed Investments Maturity Quantity Listed Investments Maturity Quantity
Hsbc Capital Funding Lp 5.3687% Dec-24-2049
Province of British Columbia 6.25% Dec-01-2009
Michelin Finance Luxemb 6.125% Apr-16-2009
Banque Nationale De Paris 5.25% Jan-23-2014
Pemex Proj Fdg Master Tr 6.625% Apr-04-2010
Telefonica Europe, Bv-Mtn 5.875% Feb-14-2033
Corp Andina De Fomento 6.375% Jun-18-2009
Anglo American Capital Plc 5.125% Dec-15-2010
Ford Credit Canada 7.25% 12/7/07 Dec-07-2007
European Investment Bank 2.625% Oct-15-2007
General Motors Nova Fin 8.375% Dec-07-2015
French Treasury Note 07/09 3.5% Jul-12-2009
INVESTMENT REPORT PORTFOLIO STATEMENT AS AT 30 JUNE 2004 (continued) Principal International Bond Fund (continued) Principal International Bond Fund (continued) Listed Investments Maturity Quantity Listed Investments Maturity Quantity Denominated in US Dollars (continued)
Asset Backed Funding Cert 1.49% Feb-25-2030
AT&T Wireless 7.875% 03/01/11 Mar-01-2011
Dsl Bank (Deutsche Postbk) 1.75% Oct-07-2009 25,000,000
Bear Stearns Alt-A Tt S2004 1.87% Jun-25-2034
General Elec Cap Corp-Mtn 1.4% Nov-02-2006 10,000,000
Chase Credit Card Master 1.439% May-15-2009
Toyota Motor Credit Corp 0.75% Jun-09-2008
Corp Andina De Fomento 6.875% Mar-15-2012
Corp Nacional Del Cobre De 5.5% Oct-15-2013
COX Communications Inc 4.625% Jun-01-2013
Credit Suisse First Boston 3.875% Jan-15-2009
CS Frist Boston Mort S2004 1.7% Jun-25-2034
Ameriquest Mortgage Security 1.5% Apr-25-2034
Anadarko Petroleum Corp 5.375% Mar-01-2007
Devon Financing Corp Ulc 7.875% Sep-30-2031
INVESTMENT REPORT PORTFOLIO STATEMENT AS AT 30 JUNE 2004 (continued) Principal International Bond Fund (continued) Principal International Bond Fund (continued) Listed Investments Maturity Quantity Listed Investments Maturity Quantity Denominated in US Dollars (continued)Denominated in US Dollars (continued)
Dlj Commercial Mort Corp 7.62% Jun-10-2033
Dlj Mortgage Acceptance Corp 6.99% Oct-15-2030
Duke Energy Field Services 7.875% Aug-16-2010
Goldman Sachs Group Inc 1.379% Jan-21-2009
Long Beach Mortgage Loan 1.83% Jun-25-2034
General Motors Accept Corp 6.875% Sep-15-2011
Long Beach Mortgage Loan 2.83% Jun-25-2034
General Motors Accepts Corp 5.625% May-15-2009
McDonalds Corporation 4/30/7 5.375% Apr-30-2007
Metropolitan Life Global Fund 1.71% Mar-17-2009
New Century Home Equity 2.02% Jan-25-2034
Nexen-Canadian Occidental 7.875% Mar-15-2032
INVESTMENT REPORT PORTFOLIO STATEMENT AS AT 30 JUNE 2004 (continued) Principal International Bond Fund (continued) Principal International Bond Fund (continued) Listed Investments Maturity Quantity Listed Investments Maturity Quantity Denominated in US Dollars (continued)Denominated in US Dollars (continued)
Option One Mortgage Loan 2.35% May-25-2034
Pemex Proj Fdg Master Tr 6.125% Aug-15-2008
Total investment
Southern California Edison Co 5% Jan-15-2014
Other net assets Total net asset value Total listed investment at cost
Tyco International Group 6.375% Oct-15-2011
INVESTMENT REPORT PORTFOLIO STATEMENT AS AT 30 JUNE 2004 (continued) Principal Long Term Accumulation Fund Principal Long Term Accumulation Fund (continued) Listed Investments Quantity Listed Investments Quantity INVESTMENT REPORT PORTFOLIO STATEMENT AS AT 30 JUNE 2004 (continued) Principal Long Term Accumulation Fund (continued) Principal Long Term Accumulation Fund (continued) Listed Investments Quantity Listed Investments Quantity Total listed shares INVESTMENT REPORT PORTFOLIO STATEMENT AS AT 30 JUNE 2004 (continued) Principal Long Term Accumulation Fund (continued) Principal Long Term Accumulation Fund (continued) Listed Investments Maturity Quantity Listed Investments Maturity Quantity Denominated in US Dollars (continued)
American Genral Fin-Mtn 5.875% Jul-14-2006
Anadarko Petroleum Corp 5.375% Mar-01-2007
Devon Financing Corp Ulc 7.875% Sep-30-2031
Duke Energy Field Services 5.75% Nov-15-2006
Duke Energy Field Services 7.875% Aug-16-2010
Ford Motoer Co Corporate 7.45% Jul-16-2031
Burlington Northern Santa 6.875% Dec-01-2027
Cadbury Schweppes US Fin 3.875% Oct-01-2008
Corp Andina De Fomento 6.875% Mar-15-2012
Corp Nacional Del Cobre De 5.5% Oct-15-2013
COX Communications Inc 7.125% Oct-01-2012
Credit Suisse First Boston 3.875% Jan-15-2009
INVESTMENT REPORT PORTFOLIO STATEMENT AS AT 30 JUNE 2004 (continued) Principal Long Term Accumulation Fund (continued) Principal Long Term Accumulation Fund (continued) Listed Investments Maturity Quantity Listed Investments Maturity Quantity Denominated in US Dollars (continued)Denominated in US Dollars (continued)
Tyco International Group 6.375% Oct-15-2011
Nexen-Canadian Occidental 7.875% Mar-15-2032
Pemex Proj Fdg Master Tr 7.875% Feb-01-2009
Total bonds Total investment Other net assets Total net assets value
Southern California Edison Co 5% Jan-15-2014
Total listed investment at cost INVESTMENT REPORT PORTFOLIO STATEMENT AS AT 30 JUNE 2004 (continued) Principal Hong Kong Dollar Savings Fund Principal US Equity Fund Listed Investments Maturity Quantity Listed Investments Quantity
Hong Kong Mortgage Corp 0.24% Jan-03-2006
Cheung Kong Fin.Cayman 0.754% Jul-18-2005
Total investment Other net assets Total net asset value Total listed investment at cost INVESTMENT REPORT PORTFOLIO STATEMENT AS AT 30 JUNE 2004 (continued) Principal US Equity Fund (continued) Principal US Equity Fund (continued) Listed Investments Quantity Listed Investments Quantity INVESTMENT REPORT PORTFOLIO STATEMENT AS AT 30 JUNE 2004 (continued) Principal US Equity Fund (continued) Principal US Dollar Savings Fund Listed Investments Quantity Listed Investments Maturity Quantity
AT&T Wireless Services Inc 6.875% Apr-18-2005
Capital Auto Receivables-Abs 2.3% Apr-17-2006
Total investment Other net assets Total net asset value Total listed investment at cost
Constellation Energy Group 7.875% Apr-01-2005
INVESTMENT REPORT PORTFOLIO STATEMENT AS AT 30 JUNE 2004 (continued) Principal US Dollar Savings Fund (continued) Principal US Dollar Savings Fund (continued) Listed Investments Maturity Quantity Listed Investments Maturity Quantity Denominated in US Dollar (continued)Denominated in US Dollar (continued)
Corp Andina De Fomento 8.875% Jun-01-2005
Daimler Chrysler Auto Trust 3.78% Feb-06-2007
Daimler Chrysler Auto Trust 4.63% Dec-06-2006
Daimler Chrysler Auto Trust 5.4% Mar-06-2006
Daimler Chrysler Auto Trust 6.7% Mar-08-2006
Kinder Morgan Energy Partner 8% Mar-15-2005
Daimler Chrysler Auto Tt-Abs 5.32% Sep-06-2006
Daimler Chrysler Autott-Abs 2.93% Jun-06-2006
Marriott International Inc 8.125% Apr-01-2005
Discover Card Master Trust 1.53% Jul-15-2008
Mbna Credit Card Master 1.885% Dec-15-2008
Donaldson Lufkin & Jenrette Inc 8% Mar-01-2005
National Rural Util Coop Fin 5.5% Jan-15-2005
Northern Natural Gas Co 6.875% May-01-2005
Ford Credit Auto Owner Trus 1.40% Nov-15-2006
Ford Credit Auto Owner Trust 5.25% Sep-15-2005
General Motors Accepts Corp 5.75% Nov-05-2004
Tennessess Valley Authority 6.375% Jun-15-2005
Tennessess Valley Authority 4.75% Jul-15-2004
INVESTMENT REPORT PORTFOLIO STATEMENT AS AT 30 JUNE 2004 (continued) Principal US Dollar Savings Fund (continued) Listed Investments Maturity Quantity Denominated in US Dollar (continued)
Toyota Auto Owner 2001-A4 4.72% Sep-15-2008
Toyota Auto Receviable-Abs 1.28% Aug-15-2005
Total investment Total net asset value Total listed investment at cost
Int. J. Engng Ed. Vol. 20, No. 3, pp. 452±460, 2004ALICE M. AGOGINO, CATHERINE NEWMAN, MARISA BAUER and JENNIFER MANKOFFUniversity of California at Berkeley, Berkeley, CA 94720, USA. E-mail: [email protected] study to examine students' perceptions of the design process was conducted in the freshman/sophomore class E39D: Designing Technology for Girls and Women at the University of Cal
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