Certified Annual Shareholder Report for Management Investment Companies (n-csr)

 

ITEM 1.    REPORTS TO STOCKHOLDERS.

 

The Annual Report to Shareholders follows:

 

DECEMBER 31, 2012

Annual Report of Mutual of America Institutional Funds

This report is not to be construed as an offering for sale. No offering is made except in conjunction with a prospectus which must precede or accompany this report.

ALL AMERICA FUND EQUITY INDEX FUND MID-CAP EQUITY INDEX FUND SMALL CAP VALUE FUND SMALL CAP GROWTH FUND BOND FUND MONEY MARKET FUND

MUTUAL OF AMERICA
INSTITUTIONAL FUNDS, INC.

CONTENTS

				Page
President's Message					1
Performance Discussion					4
Asset Allocations					11
Expense Example					13
Summary Portfolios or Portfolios of Investments in Securities:
All America Fund					18
Equity Index Fund					20
Mid-Cap Equity Index Fund					22
Small Cap Value Fund					24
Small Cap Growth Fund					25
Bond Fund					26
Money Market Fund					28
Footnotes to Summary Portfolio of Investments in Securities					29
Statements of Assets and Liabilities					30
Statements of Operations					32
Statements of Changes in Net Assets					34
Financial Highlights					36
Notes to Financial Statements					40
Report of Independent Registered Public Accounting Firm					49
Additional Information					50

MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC.
320 PARK AVENUE, NEW YORK, NEW YORK 10022

Dear Shareholder:

We are pleased to present to you the Mutual of America Institutional Funds, Inc. (the "Investment Company") Annual Report for the year ended December 31, 2012. This Annual Report includes important information regarding the performance and financial positions of the Investment Company's funds during 2012.

The Year in Review

In 2012, the economy and equity markets followed similar patterns to those experienced in 2010 and 2011. Each year began with a continuation of a rally spawned by the announcement and implementation of a new, incremental, quantitative easing (QE) program by the Federal Reserve in mid- to late-summer of the prior year. That was followed by a downturn in the early spring caused by worries about outstanding and long-term macroeconomic issues, including the European sovereign debt crisis, deteriorating U.S. economic statistics, global economic implications of a Chinese growth slowdown and angst over high U.S. deficits and growing national debt, as well as extreme partisanship in Congress.

During the summer months, policy decisions were implemented regarding the European debt crisis (2010 and 2011) and the U.S. debt issue (2011), which effectively worked to calm fears. Then, in mid- to late summer, a new, more extensive QE program occurred in the form of government bond purchases — thus injecting more money into the economic system to stimulate lending, borrowing, spending and thus growth. Finally, near the end of each year, U.S. economic data turned more positive than it had since the spring.

Bond markets, as represented by U.S. treasury securities, showed a similar pattern, responding to the QE programs with falling prices and rising yields as investors anticipated that the new stimulus would lead to accelerating growth and ultimately higher inflation. This trend would subsequently reverse though, with bond prices rising and interest rates falling, as the data continued to support low inflation and, at best, sluggish growth.

Issues in Europe and China Continue to Impact U.S.

However, 2012 witnessed some significant differences than the prior two years that portend a brighter future for the global economy. The most significant was the mid-year announcement by Mario Draghi, the Chairman of the European Central Bank (ECB), that the ECB would do "whatever it takes" to resolve the European sovereign debt crisis. In September, he backed that promise with the initiation of an ECB quantitative easing program that was designed to be "open-ended," unlike those of the U.S. Federal Reserve, which had a definite limit in the amount of bonds that the Fed would buy. The almost immediate response was a rapid and dramatic decline in European sovereign bond yields, especially those of Spain, Italy and even Greece — a signal that the crisis phase had passed, at least for the time being.

In addition, serious discussions began regarding establishing a Eurozone-wide banking regulator, a comparable role played by the Federal Reserve in the U.S. At the same time, policy leaders began to float the idea of ultimately establishing some form of centralized administration of Eurozone-wide fiscal policy, with the implicit relinquishment of some individual sovereign independence. All of these actions signaled a firm commitment to the preservation of the European Union and its currency, the Euro. The fear of the consequences of the dissolution of the Eurozone and abandonment of the Euro had been the source of equity market corrections and dangerously rising sovereign yields in the most troubled Eurozone countries.

In the U.S., the Federal Reserve took the lead of the ECB and launched its own open-ended QE program. This suggested tacit cooperation, if not coordination, of monetary policy between these two globally important economic blocs. The Fed took the additional step of stating that QE would continue until the unemployment rate was down to at least 6.5%. This was the first time it used a specific target for the measure of success of the policy. However, the most significant observation is that although the Fed's QE policy has been and continues to consist of regular and large purchases of U.S. Treasury securities, the ECB has not had to buy a single Eurozone sovereign bond. Nevertheless, sovereign yields have dropped to levels that have encouraged private investors to purchase new sovereign debt issues of Spain, Italy, Portugal and even Greece. The verbal commitment of doing whatever it takes has proven sufficient to calm the markets and return them to functionality. In short, the sovereigns can fund themselves without bailouts from the ECB or the emergency backup fund.

Another issue during 2012 that had been of major concern to the markets was the slowdown in China. After peaking near 12% on an annualized basis about two years ago, China's Gross Domestic Product (GDP) growth

decelerated to around 7.5% over the past two years as policy initiatives aimed at reducing rapidly rising inflation were put into effect. However, evidence over the past six months suggested that the growth slowdown had at least bottomed. Given that China's growth was the prime driver of global growth over the past decade, the risks to the global economy of a continued slowing in the Chinese economy would only exacerbate resolution of the other long-term issues we've discussed.

U.S. Economy Showing Signs of Improvement

Here in the U.S., the economic data has become increasingly more positive than negative, especially in housing, consumer spending, bank lending and job creation. Unemployment has fallen from a peak of over 10% several years ago to 7.9% in January 2013 according to the Bureau of Labor Statistics. Similarly, claims for unemployment have recently continued to drop after having stalled over the past year. The number of jobs created has steadily, though very slowly, risen over that same time period, approaching levels that in the past have proven to be indicators of a self-sustaining recovery.

The -0.1% GDP report for the 4th quarter of 2012 was disappointing and below consensus, and was dragged down by slower export growth, lower inventories and a large drop in defense spending. However, on the positive side, personal consumer spending and residential investment were both strong, and capital spending, especially for equipment and software, was firm. Collectively, these positive contributions offset the negative factors. The inventory decline actually sets up a stronger first quarter, and the GDP deflator, a measure of inflation, rose only 0.6% at an annualized rate. Looking at real final demand, which excludes net exports, the economy grew approximately 1.5% in the 4th quarter, in line with the steady though sluggish average of the past couple of years.

The key exception to these positive indicators has been anemic manufacturing output. The culprits seem to have been a hesitancy by business leaders to commit to expansion — given the uncertainties over the presidential and congressional elections in November of last year — as well as the so-called "fiscal cliff," which was scheduled to hit with full force on January 1, 2013, with the expected impact of a reduction in GDP growth of up to 3.5%.

The reelection of President Obama and the loss of seats by the Republicans in both houses of Congress proved nonproblematic for the markets. A potential replay of the partisan stalemate in the 2011 deficit/debt debate was ultimately avoided when the Republicans accepted President Obama's insistence on income tax increases for the "rich" (i.e., singles earning over $400,000 per year and couples earning over $450,000), and offered suspension of the debt ceiling and deferral of discussions on spending cuts for several months, choosing to defer the battle for another day.

All of these indicators of forward progress on longer-term macro issues and a turn in global economic prospects gave hope that the worst consequences of the 2008 financial crisis would ultimately be resolved. As a result, the markets rallied, reaching cycle highs through year-end and nearing all-time highs early in 2013.

Outlook for 2013 Cautiously Optimistic, with Caveats

At this moment (early February 2013), equity markets are probably extended and due for a modest pullback, but should continue to advance over the course of this year depending on the continued progress on issues discussed above. Of course, despite progress, any one of these issues — the European sovereign debt crisis and the U.S. deficit — could once again spiral into a problem because no final resolutions have yet occurred.

That said, if global growth continues to pick up even only modestly, markets should continue their advance for an extended period of time as corporate profits reaccelerate and confidence in continued progress on macro issues improves. Rising confidence in the future raises the possibility that the financial markets will accord a higher price/earnings (P/E) multiple to future earnings because growth would be viewed as sustainable. Given earnings per share expectations of $105 to $110 and the potential for modest expansion of the P/E multiple, stocks could see a solid positive return in 2013 despite the very strong 16% gain achieved in 2012.

Under these assumptions for growth, the odds are that bond yields would rise, although credit spreads could remain about the same because growth would support corporate credit worthiness. However, given the staggering amount of liquidity central banks have created over the past five years — with more to come — continued global expansion will sooner or later prompt fears of an inflationary spiral. That fear alone will drive rates up rapidly and substantially across the board while credit spreads will widen. But that's a problem for another day.

The total return performance for each of the Mutual of America Institutional Funds is reflected below:

Total Returns — Year Ended December 31, 2012

All America Fund					+14.26%
Equity Index Fund					+16.07%
Mid-Cap Equity Index Fund					+17.89%
Small Cap Value Fund					+14.79%
Small Cap Growth Fund					+ 5.04%
Bond Fund					+ 4.30%
Money Market Fund					+ 0.04%

All Fund performance information presented throughout this report is historical, reflects the full reinvestment of dividends paid, and should not be considered indicative of future results.

The pages which immediately follow include brief discussions of each Fund's performance for the year ended December 31, 2012 compared with its relevant index. Also presented are graphs and tables for each Fund (except the Money Market Fund) which illustrates each Fund's respective:

•   Historical total return achieved over specified periods, expressed as an average annual rate and as a cumulative rate;

•   Value in dollars of a $10,000 hypothetical investment at the beginning of each specified period; and

•   Historical performance compared to an index.

Following the discussions and graphs are graphical representations of the asset allocations of each Fund and an illustration of each Fund's operating expenses. The summarized portfolios of each Fund and financial statements are presented in the pages which then follow.

Thank you for your continued investment in our Funds.

Sincerely,

John R. Greed
Chairman of the Board, President
and Chief Executive Officer
Mutual of America Institutional Funds, Inc.

The views expressed in this Annual Report are subject to change at any time based on market and other conditions and should not be construed as a recommendation. This Report contains forward-looking statements, which speak only as of the date they were made and involve a number of risks and uncertainties that could cause actual results to differ materially from those expressed herein. Readers are cautioned not to place undue reliance on our forward-looking statements, as we assume no obligation to update these forward-looking statements. Readers assume any and all responsibility for any investment decision made as a result of the views expressed herein.

ALL AMERICA FUND

The investment objective of the All America Fund is to outperform the S&P 500 ^® Index (the "S&P 500"). The All America Fund is approximately 60% invested in the 500 stocks that comprise the S&P 500, with the remaining 40% actively managed, using three different investment approaches. The actively managed portion of the All America Fund is close to being equally distributed between large cap stocks and small cap stocks, with the small cap stocks in turn equally distributed between small cap value and small cap growth stocks.

For the year ended December 31, 2012, the S&P 500 of large capitalization stocks increased by 16.00% on a total return basis, while the Russell 2000 ^® Growth Index was up 14.59% and the Russell 2000 ^® Value Index was up 18.05%.

The All America Fund's return for the year ended December 31, 2012, was 14.26% versus the benchmark return of 16.00%. The underperformance of the Fund was entirely the result of the underperformance of the Small Cap Growth component of the Fund. The Equity Index, Large Cap and Small Cap Value components each outperformed the benchmark.

All America Fund

Period				Growth				Total Return
Ended 12/31/12				of $10,000				Cumu- lative				Average Annual
1 Year				$	11,426				14.26	%			14.26	%
5 Years				$	10,775				7.75	%			1.50	%
10 Years				$	19,381				93.81	%			6.84	%

S & P 500 INDEX

Period				Growth				Total Return
Ended 12/31/12				of $10,000				Cumu- lative				Average Annual
1 Year				$	11,600				16.00	%			16.00	%
5 Years				$	10,857				8.57	%			1.66	%
10 Years				$	19,854				98.5	%			7.10	%

The line representing the performance return of the All America Fund includes expenses, such as transaction costs and management fees that reduce returns, while the performance return line of the Index does not.

Past performance is not indicative of future results. The graph and table do not reflect the deduction of any taxes that an investor may pay on fund distributions or the redemption of fund shares

EQUITY INDEX FUND

The Equity Index Fund's objective is to replicate the performance of the S&P 500 ^® Index (the "S&P 500"), which consists of 500 stocks chosen by Standard & Poor's for market size, liquidity and industry group representation. The S&P 500 is a market-weighted index of 500 stocks traded on the New York Stock Exchange, American Stock Exchange and NASDAQ, with each stock's weight in the index proportionate to its market value. The weightings make each company's influence on the S&P 500's performance directly proportional to that company's market value.

The S&P 500 had an overall strong first half of 2012, returning 16% including dividends. The S&P 500 reached its high of 1465 on September 14, 2012. The market hovered between 1420 and 1460 for the next month and then began a correction in mid October of about 8 percent, reaching an intra-quarter low of 1343 on November 15, 2012. Concerns over sovereign defaults in Europe, the U.S. "fiscal cliff" and a potential slowdown in corporate earnings weighed on the market. Despite no resolution to fiscal concerns in Europe and minimal improvement to domestic economic conditions, the market recovered and rallied 6% into the end of 2012. Financials, Consumer Discretionary and Healthcare were the best performing sectors for the year, returning 26.3%, 21.9% and 15.2%, respectively. Utilities and Energy were the worst performing, with returns of -2.9% and 2.3% respectively

The Equity Index Fund's performance for the year ended December 31, 2012, was 16.07%, in line with the benchmark return of 16.00%. Note that the Equity Index Fund's performance includes expenses, such as transaction costs and management fees, which are not applicable to the benchmark.

Equity Index Fund

Period				Growth				Total Return
Ended 12/31/12				of $10,000				Cumu- lative				Average Annual
1 Year				$	11,607				16.07	%			16.07	%
5 Years				$	10,794				7.94	%			1.54	%
10 Years				$	19,640				96.40	%			6.98	%

S & P 500 Index

Period				Growth		Total Return
Ended 12/31/12				of $10,000				Cumu- lative				Average Annual
1 Year				$	11,600				16.00	%			16.00	%
5 Years				$	10,857				8.57	%			1.66	%
10 Years				$	19,854				98.54	%			7.10	%

The line representing the performance return of the Equity Index Fund includes expenses, such as transaction costs and management fees that reduce returns, while the performance return line of the Index does not.

Past performance is not indicative of future results. The graph and table do not reflect the deduction of any taxes that an investor may pay on fund distributions or the redemption of fund shares

MID-CAP EQUITY INDEX FUND

The Mid-Cap Equity Index Fund invests in the 400 stocks that comprise the S&P MidCap 400 ^® Index (the "S&P MidCap 400"). The S&P MidCap 400 is a market-weighted index of 400 stocks traded on the New York Stock Exchange, American Stock Exchange and NASDAQ. The weightings make each company's influence on the S&P MidCap 400's performance directly proportional to that company's market value. The companies included in the S&P MidCap 400 tend to be typical of this asset class, the medium-capitalized sector of the U.S. securities market.

The S&P MidCap 400 outperformed the S&P 500 ^® for the full year in 2012. The outperformance occurred in the second half of the year when the S&P MidCap 400 returned 9.3% and the S&P 500 returned 6%. This was a reversal of the respective performance during 2011 and was driven by investor demand for growth and in anticipation of increased merger and acquisition activity in 2013. Within the S&P MidCap 400, the Healthcare sector was extremely strong, up 26.3%. Consumer Discretionary, Industrials and Materials also outperformed and were up 21.5%, 20.5% and 20%, respectively. As was the case with the S&P 500, Energy and Utilities were the worst performing sectors with returns of -1.4% and 1.7% respectively.

The Mid-Cap Equity Index Fund's performance for the year ended December 31, 2012, was 17.89%, in line with the 17.88% return of the S&P MidCap 400.

Mid-Cap Equity Index Fund

Period				Growth				Total Return
Ended 12/31/12				of $10,000				Cumu- lative				Average Annual
1 Year				$	11,789				17.89	%			17.89	%
5 Years				$	12,766				27.66	%			5.00	%
10 Years				$	26,842				168.4	%			10.38	%

S & P Mid-Cap 400 Index

Period				Growth				Total Return
Ended 12/31/12				of $10,000				Cumu- lative				Average Annual
1 Year				$	11,788				17.88	%			17.88	%
5 Years				$	12,851				28.51	%			5.15	%
10 Years				$	27,225				172.2	%			10.53	%

The line representing the performance return of the Mid-Cap Equity Index Fund includes expenses, such as transaction costs and management fees that reduce returns, while the performance return line of the Index does not.

Past performance is not indicative of future results. The graph and table do not reflect the deduction of any taxes that an investor may pay on fund distributions or the redemption of fund shares

SMALL CAP VALUE FUND

The investment objective of the Small Cap Value Fund is to outperform the Russell 2000 ^® Value Index. The Small Cap Value Fund generally invests in companies that are below $3 billion in market capitalization and have lower price-to-book characteristics than the overall market.

For the year ended December 31, 2012, the Small Cap Value Fund returned 14.79% versus an 18.05% return for the Russell 2000 Value Index. Stock selection was the primary driver of negative performance versus the benchmark. Sectors contributing to Fund performance included Healthcare, Industrials and Utilities, while sectors detracting from Fund performance included Technology and Retail.

Small Cap Value Fund

Period				Growth				Total Return
Ended 12/31/12				of $10,000				Cumu- lative				Annualized
1 Year				$	11,479				14.79	%			14.79	%
5 Years				$	13,272				32.72	%			5.82	%
Since 5/1/07 (Inception)				$	12,010				20.10	%			3.28	%

Russell 2000 Value Index

Period				Growth				Total Return
Ended 12/31/12				of $10,000				Cumu- lative				Annualized
1 Year				$	11,805				18.05	%			18.05	%
5 Years				$	11,903				19.03	%			3.55	%
Since 5/1/07 (Inception)				$	10,477				4.77	%			0.83	%

The line representing the performance return of the Small Cap Value Fund includes expenses, such as transaction costs and management fees that reduce returns, while the performance return line of the Index does not.

Past performance is not indicative of future results. The graph and table do not reflect the deduction of any taxes that an investor may pay on fund distributions or the redemption of fund shares

SMALL CAP GROWTH FUND

The investment objective of the Small Cap Growth Fund is capital appreciation. The Small Cap Growth Fund invests in growth stocks within the small capitalization marketplace. The Fund returned 5.04% during the year ended December 31, 2012. The Fund's benchmark, the Russell 2000 ^® Growth Index, returned 14.59% for the period.

The year ended December 31, 2012, was a difficult one for active small cap growth managers with less than half outperforming their benchmark, the Russell 2000 Growth Index. Both the Technology and Healthcare sectors had particularly disappointing investment results relative to the returns shown by the benchmark. These two sectors combined accounted for more than half of the Fund's underperformance during the year. The Technology sector, which is usually a leading performer, lagged the benchmark in 2012 due to concerns about enterprise spending and capital expenditures. More specifically, we were particularly challenged in the internet software and services industry. The Healthcare sector was led by the biotechnology industry, which historically generates little profitability. We were too conservative with our stock selections in that industry.

Our best performance was in the Energy and Telecommunication sectors. With our bottom-up stock selection approach, we remain focused on companies that have sustainable top-line growth as opposed to those that have benefited from policy stimulus or margin expansion (reduced operating expenses).

Small Cap Growth Fund

Period				Growth				Total Return
Ended 12/31/12				of $10,000				Cumu- lative				Annualized
1 Year				$	10,504				5.04	%			5.04	%
5 Years				$	11,443				14.43	%			2.73	%
Since 5/1/07 (Inception)				$	11,456				14.56	%			2.42	%

Russell 2000 Growth Index

Period				Growth				Total Return
Ended 12/31/12				of $10,000				Cumu- lative				Annualized
1 Year				$	11,459				14.59	%			14.59	%
5 Years				$	11,868				18.68	%			3.49	%
Since 5/1/07 (Inception)				$	12,082				20.82	%			3.39	%

The line representing the performance return of the Small Cap Growth Fund includes expenses, such as transaction costs and management fees that reduce returns, while the performance return line of the Index does not.

Past performance is not indicative of future results. The graph and table do not reflect the deduction of any taxes that an investor may pay on fund distributions or the redemption of fund shares

BOND FUND

The Bond Fund's primary investment objective is to provide as high a level of current income over time as is believed to be consistent with prudent investment risk by investing primarily in investment grade, publicly traded debt securities. A secondary objective is preservation of capital. The Bond Fund primarily invests in corporate, U.S. government agency and mortgage-backed securities, all of which normally yield more than U.S. Treasury issues.

The Federal Reserve continued to emphasize low short-term rates in order to stimulate the economy, re-liquefy the banking system and support the mortgage market. This has also reduced long-term rates to the three percent level as the government made massive purchases of longer-dated issues.

The corporate bond market performed well due to the decline in absolute yields as well as a continuing tightening of the spreads between government and corporate bonds. This was created by a supply/demand imbalance that left investors desperate for quality investments with reasonable income.

The Bond Fund's strategy was to maintain a slightly shorter duration than its benchmark, emphasize relatively short corporate bonds with high yields, establish extreme credit diversification and take a market weight in mortgage-related securities.

The Bond Fund's return for the year ended December 31, 2012, was 4.30%. This compares favorably to the Barclays Capital U.S. Aggregate Bond Index, which returned 4.21% for the year. Note that the Bond Fund's performance includes expenses, such as transaction costs and management fees, which are not applicable to the benchmark. The Fund's emphasis on higher-yielding corporate issues was a major contributor to its performance.

Bond Fund

Period				Growth				Total Return
Ended 12/31/12				of $10,000				Cumu- lative				Average Annual
1 Year				$	10,430				4.30	%			4.30	%
5 Years				$	13,336				33.36	%			5.93	%
10 Years				$	16,360				63.60	%			5.05	%

Barclays Capital Aggregate Bond Index

Period				Growth				Total Return
Ended 12/31/12				of $10,000				Cumu- lative				Average Annual
1 Year				$	10,421				4.21	%			4.21	%
5 Years				$	13,347				33.47	%			5.95	%
10 Years				$	16,572				65.72	%			5.18	%

The line representing the performance return of the Bond Fund includes expenses, such as transaction costs and management fees that reduce returns, while the performance return line of the Index does not.

Past performance is not indicative of future results. The graph and table do not reflect the deduction of any taxes that an investor may pay on fund distributions or the redemption of fund shares

MONEY MARKET FUND

The Money Market Fund's investment objective is to realize current income while maintaining liquidity, investment quality and stability of capital through investing in high-quality commercial paper issued by U.S. corporations and securities issued by the U.S. government and its agencies. The Money Market Fund returned 0.13% before expenses and 0.04% after expenses for the year ended December 31, 2012, compared to a 0.07% return for the Citigroup 3-Month Treasury Bill Index. Note that the benchmark performance does not reflect any expenses.

The Federal Reserve maintained a near-zero interest rate policy throughout 2012. This caused money market returns to be extremely low by historical standards. In addition, the supply of eligible investments continued to decrease. The Fund's strategy continued to focus on quality, liquidity and maintaining a relatively short weighted average maturity.

The seven-day effective yield as of February 12, 2013, was 0.02%. As with all performance reporting, this yield is not necessarily indicative of future annual yields. Neither the Federal Deposit Insurance Corporation nor any other U.S. government agency insures or guarantees investments in shares of the Money Market Fund.

MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC.
ASSET ALLOCATIONS AS OF DECEMBER 31, 2012 (Unaudited)

  

  

  

MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC.
ASSET ALLOCATIONS AS OF DECEMBER 31, 2012 (Unaudited) (Continued)

  

MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC.
EXPENSE EXAMPLE (Unaudited)

EXAMPLE

As a shareholder of one of the Mutual of America Institutional Funds, Inc. Funds, you incur ongoing costs, including management fees and other Fund expenses. You do not incur transactional costs, such as sales charges (loads), redemption fees or exchange fees. Additionally, through December 31, 2012, Mutual of America Capital Management Corporation, the Funds' Adviser, contractually agreed to limit the Equity Index and Mid-Cap Equity Index Funds' total operating expenses to their respective investment management fees. Effective January 1, 2013, a new contractual agreement limits all Funds' total operating expenses to their respective investment management fees. This contractual obligation is in effect through April 30, 2014 and will continue for succeeding 12 month periods ending April 30th unless the Funds' Adviser gives notice to the Investment Company within 45 days before the next May 1st in which case the agreement will terminate on the next May 1st.

In addition, the Adviser to the Money Market Fund has agreed to waive as much of its investment management fee and reimburse as much of the other fund operating expenses as necessary in order to cause the cumulative monthly total investment return of the Money Market Fund, net of fees and expenses, to be no less than zero. This resulted in an effective investment management fee of 0.09% for the Money Market Fund during the year ended December 31, 2012 and resulted in the Fund being reimbursed for all other operating expenses during that period.

This Example is intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at July 1, 2012 and held for the entire period ending December 31, 2012 under the expense limitations in effect during that period as described above. See Footnote (1) on Page 15 for comparable amounts as if the January 1, 2013 contractual expense limitation described above had been in effect during the six months ended December 31, 2012.

ACTUAL EXPENSES

The first line of the tables below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000=8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

The second line of the tables below provides information about hypothetical account values and hypothetical expenses based on each Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund with other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning other funds, which may also charge transactional costs, such as sales charges (loads), redemption fees or exchange fees.

All America Fund

				Beginning Account Value July 1, 2012				Ending Account Value December 31, 2012				Expenses Paid During Period* July 1 – December 31, 2012
Actual				$	1,000.00			$	1,069.31			$	5.72
Hypothetical (5% return before expenses)				$	1,000.00			$	1,019.18			$	5.58

*  Expenses are equal to the Fund's annual expense ratio of 1.10%, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).