N-CSRS 1 c53236_n-csrs.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES

Investment Company Act file number 811-21788

Seligman TargetHorizon ETF Portfolios, Inc.
(Exact name of Registrant as specified in charter)

100 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip code)

Lawrence P. Vogel
100 Park Avenue
New York, New York 10017
(Name and address of agent for service)

Registrant’s telephone number, including area code:                                    (212) 850-1864

Date of fiscal year end:                         9/30
     
Date of reporting period:   3/31/08


FORM N-CSR

ITEM 1. REPORTS TO STOCKHOLDERS.

 
 
 
 
    Seligman
      TargetHorizon ETF Portfolios, Inc.          

          TargETFund Core
     TargETFund 2015
     TargETFund 2025
     TargETFund 2035
     TargETFund 2045

 
 
 
 
 
 
 
 

Mid-Year Report
March 31, 2008


Asset Allocation Strategies
Seeking to Manage Risk
Over Time

 

 

 


J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED
1864
100 Park Avenue, New York, NY 10017

               
     
     
 
 
     



 

Experience

Seligman has been in business for more than 140 years, at times playing a central role in the financial development of the country and its markets. Over that time, the firm has managed clients’ wealth through dramatic market changes and has remained a consistent, reliable presence on Wall Street. Today, Seligman is drawing on its long history and long-term perspective as we focus on the future and on developing investment solutions that help clients arrive at their goals.

Insight

Asset management is driven by insight — into the direction of the economy, how companies will perform, how markets will behave, and how investors will respond. Portfolio managers at the firm have been in the investment business, on average, for more than 20 years. Over that time, they have refined their ability to assess a company’s prospects, management, and products, while also weighing the impact of economic and market cycles, new trends, and developing technologies.

Solutions

Seligman’s commitment to the development of innovative investment products — including the nation’s first growth mutual fund, pioneering single-state municipal funds, and one of the country’s premier technology funds — defines our past and informs our future. Our ongoing research into the nature of investment risk — begun in the early 1990s — has resulted in the Seligman Time Horizon Matrix® asset allocation strategy that redefines the relationship between risk and reward over time. The strategy offers investors a variety of investment solutions for goals ranging from college savings to retirement planning. Whether you select Seligman for one investment product, or as a comprehensive asset manager, we believe we can help you reach your goals.

  Table of Contents    
       
  To The Shareholders   1
       
  Performance and    
  Portfolio Overview   2
       
  Understanding and    
  Comparing Your    
  Fund’s Expenses   9
       
  Portfolios of Investments .   11
       
  Statements of    
  Assets and Liabilities   16
       
  Statements of    
  Operations   18
       
  Statements of    
  Changes in Net Assets   19
       
  Notes to Financial    
  Statements   22
       
  Financial Highlights   35
       
  Matters Relating to the    
  Directors’ Consideration    
  of the Continuance of the    
  Management Agreement  
48
       
  Board of Directors   53
       
  Executive Officers   54
       
  Additional Series    
  Information   55



To The Shareholders

 

Your mid-year shareholder report for Seligman TargetHorizon ETF Portfolios, Inc. follows this letter. The report contains each Fund’s investment results, portfolio of investments, and financial statements.

For the six months ended March 31, 2008, based on the net asset value of Class A shares, Seligman TargetETFund Core posted a total return of –6.4% . Its benchmark, the Dow Jones Target Today Index, returned 2.3% and its peer group, the Lipper Mixed-Asset Target Allocation Moderate Funds Average, returned –6.3% . Seligman TargetETFund 2015 posted a total return of –10.0% . Its benchmark, the Dow Jones Target 2015 Index, returned –1.7% and its peer group, the Lipper Mixed-Asset Target 2020 Funds Average, returned –7.8% . Seligman TargetETFund 2025 ended the six months with a total return of –11.6% . Its benchmark, the Dow Jones Target 2025 Index, returned –6.5% and its peer group, the Lipper Mixed-Asset Target 2030 Funds Average, returned –10.4% . Seligman TargetETFund 2035 returned –11.8% . Its benchmark, the Dow Jones Target 2035 Index, returned –9.7% . Seligman TargetETFund 2045 posted a total return of –11.7% . Its benchmark, the Dow Jones Target 2045 Index, returned –10.4% . The Lipper Mixed-Asset Target 2030+ Funds Average, which is Seligman TargetETFund 2035’s and Seligman TargetETFund 2045’s peer group, returned –11.6% .

Please note that, on May 16, 2008, Class D shares of the Fund were converted to Class C shares at their respective net asset values. The conversion did not affect individual shareholder account values. Effective at the close of business on May 16, 2008, Class D shares are no longer offered by the Funds.

Thank you for your continued support of Seligman TargetHorizon ETF Portfolios. We look forward to many more years of providing you with the investment experience, insight, and solutions you need to seek your financial goals.

By order of the Board of Directors,

 
     
William C. Morris   Brian T. Zino
Chairman   President
 
May 20, 2008    
 
Manager   Shareholder Service Agent   Important Telephone Numbers
J. & W. Seligman & Co.   Seligman Data Corp.   (800) 221-2450 Shareholder Services
Incorporated   100 Park Avenue   (800) 445-1777 Retirement Plan
100 Park Avenue   New York, NY 10017                                 Services
New York, NY 10017       (212) 682-7600 Outside the
    Mail Inquiries To:                                 United States
General Distributor   P.O. Box 9759   (800) 622-4597 24-Hour Automated
Seligman Advisors, Inc.   Providence, RI 02940-9759                                 Telephone Access
100 Park Avenue                                     Service
New York, NY 10017   General Counsel    
    Sullivan & Cromwell LLP    

1



Performance and Portfolio Overview

This section of the report is intended to help you understand the performance of each Fund of Seligman TargetHorizon ETF Portfolios, Inc. (the “Series”) and to provide a summary of each Fund’s portfolio characteristics.

Performance data quoted in this report represents past performance and does not guarantee or indicate future investment results. The rates of return will vary and the principal value of an investment will fluctuate. Shares, if redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Total returns of the Funds (except for Class I shares) as of the most recent month end will be made available at www.seligman.com1 by the seventh business day following that month end. Calculations assume reinvestment of distributions, if any. Performance data quoted does not reflect the deduction of taxes that an investor may pay on distributions or the redemption of shares. Since the Funds’ inceptions, J. & W. Seligman & Co. Incorporated (the “Manager”) has contractually undertaken to waive its management fee and/or to reimburse each Fund’s expenses to the extent that the Fund’s “other expenses” (i.e., those expenses other than management fees, 12b-1 fees, interest on borrowings, and extraordinary expenses, including litigation expenses) exceed 0.23% (0.11% for Class I shares) per annum of each Fund’s average daily net assets. Such an undertaking will remain in effect until at least January 31, 2015. Similar fee waiver/reimbursement arrangements were in effect since the Funds’ inceptions. The Manager also has voluntarily reimbursed certain additional class-specific expenses of TargETFund 2035 and TargETFund 2045 from time-to-time in order to maintain the same net asset values per share for the corresponding share classes of those funds. Effective November 1, 2007, the Manager has discontinued making such reimbursements. Absent such management fee waivers/expense reimbursements, returns would have been lower.

Returns for Class A shares are calculated with and without the effect of the initial 5.75% maximum sales charge. Returns for Class C, Class D and Class R shares are calculated with and without the effect of the 1% contingent deferred sales charge (“CDSC”), charged on redemptions made within one year of purchase. Effective June 4, 2007, there is no initial sales charge on investments in Class C shares. Returns for Class C shares are presented without an initial sales charge, and such returns would have been lower for periods prior to June 4, 2007 if the 1% initial sales charge then in effect was incurred. Class I shares do not have sales charges, and returns are calculated accordingly. On May 16, 2008, Class D shares of the Funds were converted to Class C shares at their respective net asset values. Effective at the close of business on May 16, 2008, Class D shares are no longer offered by the Funds.

An investment in a Fund is not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.


1      The website reference is an inactive textual reference and information contained in or otherwise accessible through the website does not form a part of this report or the Seligman TargetHorizon ETF Portfolios’ prospectuses or statement of additional information.
 

2



Performance and Portfolio Overview

Investment Results
TargETFund Core

Total Returns            
For Periods Ended March 31, 2008            
        Average Annual
    Six   One   Since Inception
    Months   Year   10/3/05*
Class A            
With Sales Charge     (11.75)%     (9.08)%     2.16%
Without Sales Charge   (6.36)   (3.53)   4.63
Class C            
With 1% CDSC   (7.63)   (5.20)     n/a
Without CDSC   (6.71)   (4.26)   3.90
Class D            
With 1% CDSC   (7.63)   (5.20)    n/a
Without CDSC   (6.71)   (4.26)   3.90
Class I   (6.22)   (3.17)   4.98
Class R            
With 1% CDSC   (7.40)   (4.69)    n/a
Without CDSC   (6.48)   (3.75)   4.35
Benchmarks***            
Dow Jones Target Today Index   2.32   5.80   5.93
Lipper Fund of Funds Unaffiliated Average   (7.82)   (2.38)   5.65
Lipper Mixed-Asset Target Allocation Moderate Funds Average   (6.29)   (1.68)   4.67
 
Net Asset Value Per Share            
    3/31/08   9/30/07   3/31/07
Class A   $7.55   $8.18   $8.02
Class C   7.55   8.18   8.02
Class D   7.55   8.18   8.02
Class I   7.55   8.18   8.02
Class R   7.54   8.17   8.00
Portfolio Allocation to Exchange-Traded Funds       Percent of Total
        3/31/08   9/30/07††
Fixed-Income Funds       35.0   35.0
US Large-Cap Funds       30.0   30.0
International Large-Cap Funds       10.0   10.1
REIT Funds       10.0   10.0
US Large- and Mid-Cap Funds       10.0   9.9
US Mid-Cap Funds       5.0   5.0
Total       100.0      100.0   


See footnotes on page 8.

3



Performance and Portfolio Overview

Investment Results
TargETFund 2015

Total Returns            
For Periods Ended March 31, 2008            
        Average Annual
    Six   One   Since Inception
    Months   Year   10/3/05*
Class A            
With Sales Charge     (15.16)%     (11.70)%      2.95%
Without Sales Charge   (10.02)   (6.34)   5.44
Class C            
With 1% CDSC   (11.14)   (8.02)     n/a
Without CDSC   (10.25)   (7.10)   4.84
Class D            
With 1% CDSC   (11.14)   (8.02)     n/a
Without CDSC   (10.25)   (7.10)   4.84
Class I   (9.76)   (5.98)   5.80
Class R            
With 1% CDSC   (10.95)   (7.63)     n/a
Without CDSC   (10.07)   (6.71)   5.23
Benchmarks***            
Dow Jones Target 2015 Index   (1.68)   3.34   6.46
Lipper Fund of Funds Unaffiliated Average   (7.82)   (2.38)   5.65
Lipper Mixed-Asset Target 2020 Funds Average   (7.80)   (2.67)   4.94
 
Net Asset Value Per Share            
    3/31/08   9/30/07   3/31/07
Class A   $7.87     $8.91     $8.56  
Class C   7.81   8.85   8.55
Class D   7.81   8.85   8.55
Class I   7.92   8.95   8.59
Class R   7.85   8.89   8.57
 
Portfolio Allocation to Exchange-Traded Funds      
Percent of Total
        3/31/08   9/30/07††
US Large-Cap Funds       22.4   21.9
US Mid-Cap Funds       20.1   21.0
Fixed-Income Funds       16.3   15.0
US Small-Cap Funds       11.2   11.9
International Large-Cap Funds       10.0   10.1
REIT Funds       10.0   10.0
International Small-Cap Funds       3.8   4.1
Emerging Markets Funds       3.7   4.0
US Large- and Mid-Cap Funds       2.5   2.0
Total       100.0      100.0   


See footnotes on page 8.
4



Performance and Portfolio Overview

Investment Results
TargETFund 2025

Total Returns            
For Periods Ended March 31, 2008            
        Average Annual
    Six   One   Since Inception
    Months   Year   10/3/05*
Class A            
With Sales Charge     (16.67)%    (11.72)%     3.66%
Without Sales Charge   (11.63)   (6.37)   6.16
Class C            
With 1% CDSC   (12.78)   (7.97)   n/a
Without CDSC   (11.91)   (7.05)   5.53
Class D            
With 1% CDSC   (12.89)   (7.98)     n/a
Without CDSC   (12.02)   (7.06)   5.48
Class I   (11.51)   (5.95)   6.46
Class R            
With 1% CDSC   (12.57)   (7.45)     n/a
Without CDSC   (11.70)   (6.53)   5.98
Benchmarks***            
Dow Jones Target 2025 Index   (6.47)   (0.20)   7.32
Lipper Fund of Funds Unaffiliated Average   (7.82)   (2.38)   5.65
Lipper Mixed-Asset Target 2030 Funds Average   (10.39)   (4.33)   5.10
Net Asset Value Per Share            
    3/31/08   9/30/07   3/31/07
Class A   $8.08     $9.26     $8.74  
Class C   7.99   9.17   8.69
Class D   7.98   9.17   8.68
Class I   8.12   9.30   8.75
Class R   8.05   9.23   8.72
Portfolio Allocation to Exchange-Traded Funds       Percent of Total
        3/31/08   9/30/07
US Mid-Cap Funds       25.1   25.0
US Small-Cap Funds       22.4   22.8
US Large-Cap Funds       17.4   20.0
International Large-Cap Funds       10.0   10.1
Emerging Markets Funds        8.8    9.0
International Small-Cap Funds        8.8    9.1
Fixed-Income Funds        5.0    2.0
REIT Funds        2.5    2.0
Total        100.0       100.0   


See footnotes on page 8.

5



Performance and Portfolio Overview

Investment Results
TargETFund 2035

Total Returns            
For Periods Ended March 31, 2008            
        Average Annual
    Six   One   Since Inception
    Months   Year   10/2/06**
Class A            
With Sales Charge     (16.83)%     (11.16)%     0.41%
Without Sales Charge   (11.80)   (5.70)   4.41
Class C            
With 1% CDSC   (12.99)   (7.25)     n/a
Without CDSC   (12.12)   (6.32)   3.71
Class D            
With 1% CDSC   (12.99)   (7.25)     n/a
Without CDSC   (12.12)   (6.32)   3.71
Class I   (11.72)   (5.62)   4.51
Class R            
With 1% CDSC   (12.81)   (6.78)   n/a
Without CDSC   (11.94)   (5.85)   4.22
Benchmarks***            
Dow Jones Target 2035 Index   (9.70)   (2.77)   5.04
Lipper Fund of Funds Unaffiliated Average   (7.82)   (2.38)   3.82
Lipper Mixed-Asset Target 2030+ Funds Average   (11.58)   (5.06)   2.31
Net Asset Value Per Share            
    3/31/08   9/30/07   3/31/07
Class A   $8.51     $9.74     $9.11  
Class C   8.46   9.70   9.10
Class D   8.46   9.70   9.10
Class I   8.51   9.74   9.11
Class R   8.50   9.74   9.11
Portfolio Allocation to Exchange-Traded Funds       Percent of Total
        3/31/08   9/30/07
US Mid-Cap Funds       25.1   25.0
US Small-Cap Funds       25.0   24.7
US Large-Cap Funds       15.0   19.9
International Small-Cap Funds       10.0   10.1
International Large-Cap Funds       10.0   10.1
Emerging Markets Funds       10.0   10.2
Fixed-Income Funds       4.9  
Total       100.0      100.0   


See footnotes on page 8.

6



Performance and Portfolio Overview

Investment Results
TargETFund 2045

Total Returns            
For Periods Ended March 31, 2008            
        Average Annual
    Six   One   Since Inception
    Months   Year   10/2/06**
Class A            
With Sales Charge     (16.76)%     (11.08)%     0.47%
Without Sales Charge   (11.72)   (5.62)   4.47
Class C            
With 1% CDSC   (12.88)   (7.13)     n/a
Without CDSC   (12.00)   (6.20)   3.79
Class D            
With 1% CDSC   (12.98)   (7.24)     n/a
Without CDSC   (12.11)   (6.31)   3.71
Class I   (11.56)   (5.45)   4.63
Class R            
With 1% CDSC   (12.64)   (6.60)     n/a
Without CDSC   (11.77)   (5.67)   4.35
Benchmarks***            
Dow Jones Target 2045 Index   (10.44)   (3.39)   4.79
Lipper Fund of Funds Unaffiliated Average   (7.82)   (2.38)   3.82
Lipper Mixed-Asset Target 2030+ Funds Average   (11.58)   (5.06)   2.31
Net Asset Value Per Share            
    3/31/08   9/30/07   3/31/07
Class A   $8.52     $9.74     $9.11  
Class C   8.47   9.70   9.10
Class D   8.46   9.70   9.10
Class I   8.53   9.74   9.11
Class R   8.52   9.74   9.11
Portfolio Allocation to Exchange-Traded Funds       Percent of Total
        3/31/08   9/30/07
US Mid-Cap Funds       25.1   25.0
US Small-Cap Funds       24.9   24.8
US Large-Cap Funds       15.0   19.9
International Small-Cap Funds       10.1   10.1
International Large-Cap Funds       10.0   10.1
Emerging Markets Funds        9.9   10.1
Fixed-Income Funds        5.0  
Total       100.0      100.0   


See footnotes on page 8.

7



Performance and Portfolio Overview


Returns for periods of less than one year are not annualized.

††

Reclassified to conform to current period’s presentation.

*

Returns are from opening of business on October 3, 2005.

**

Returns are from the opening of business on October 2, 2006.

***     

Dow Jones Target Today Index, Dow Jones Target 2015 Index, Dow Jones Target 2025 Index, Dow Jones Target 2035 Index and Dow Jones Target 2045 Index (the “Dow Jones Target Date Indices”) and the Lipper Fund of Funds Unaffiliated Average, the Lipper Mixed-Asset Target Allocation Moderate Funds Average, the Lipper Mixed-Asset Target 2020 Funds Average, the Lipper Mixed-Asset Target 2030 Funds Average and the Lipper Mixed-Asset Target 2030+ Funds Average (the “Lipper Averages”) are unmanaged benchmarks that assume the reinvestment of all distributions. The Lipper Averages do not reflect any fees, taxes or sales charges, and the Dow Jones Target Date Indices do not reflect any taxes, fees, sales charges, and expenses. The Dow Jones Target Date Indices were designed to measure balanced and multi-asset-class portfolios with risk profiles that become more conservative over time (the Dow Jones Target Today Index aims to hold a low-risk portfolio of securities). Each index within the Dow Jones Target Date Indices allocates among stock, bond, and cash subindices on a monthly basis to measure predefined relative risk levels. Dow Jones equity indices make up the stock component and Lehman Brothers indices make up the bond and cash components. The asset classes are weighted within each Dow Jones Target Date Index to reflect a targeted level of risk. Over time, the weights are adjusted based on predetermined formulas to reduce the level of potential risk as the index’s maturity date approaches. As of April 1, 2008, the subindex allocation of each index represented: Dow Jones Target Today Index: 11.3% equity, 34.3% fixed income, and 54.5% cash; Dow Jones Target 2015 Index: 33.4% equity, 62.7% fixed income, and 4% cash; Dow Jones Target 2025 Index: 65.9% equity, 30.2% fixed income, and 4% cash; Dow Jones Target 2035 Index: 85.6% equity, 10.5% fixed income, and 4% cash; and Dow Jones Target 2045 Index: 89.4% equity, 6.7% fixed income and 3.9% cash. The Lipper Mixed-Asset Target Allocation Moderate Funds Average measures the performance of funds that, by portfolio practice, maintain a mix of between 40–60% equity securities, with the remainder invested in bonds, cash, and cash equivalents. The Lipper Mixed-Asset Target 2020 Funds Average measures the performance of funds that seek to maximize assets for retirement or other purposes with an expected time horizon not to exceed the year 2020. The Lipper Mixed-Asset Target 2030 Funds Average measures the performance of funds that seek to maximize assets for retirement or other purposes with an expected time horizon not to exceed the year 2030. The Lipper Mixed-Asset Target 2030+ Funds Average measures the performance of funds that seek to maximize assets for retirement or other purposes with an expected time horizon exceeding the year 2030. The Lipper Fund of Funds Unaffiliated Average measures the performance of funds that invest 80% or more of their assets in mutual funds that are not managed by an affiliated investment manager. Investors cannot invest directly in an average or index.

 

8



Understanding and Comparing
Your Fund’s Expenses

As a shareholder of a Fund of the Series, you incur ongoing expenses, such as management fees, distribution and service (12b-1) fees (if applicable), and other fund expenses. The information below is intended to help you understand your ongoing expenses (in dollars) of investing in a Fund and to compare them with the ongoing expenses of investing in other mutual funds. Please note that the expenses shown in the table are meant to highlight the ongoing Fund expenses only and do not reflect the operating expenses of the exchange-traded funds (“ETFs”) in which a Fund invests (the “Underlying ETFs”), or any transactional costs, such as sales charges (also known as loads) on certain purchases or redemptions. Therefore, the table is useful in comparing ongoing Fund expenses only, and will not help you to determine the relative total expenses of owning different funds. In addition, if Underlying ETF expenses and transactional costs were included, your total expenses would have been higher.

The table is based on an investment of $1,000 invested at the beginning of October 1, 2007 and held for the entire six-month period ended March 31, 2008.

Actual Expenses

The table below provides information about actual expenses and actual account values. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value at the beginning of the period by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid During Period” for the share class of the Fund that you own to estimate the expenses you paid on your account during the period.

Hypothetical Example for Comparison Purposes

The table also provides information about hypothetical expenses and hypothetical account values based on the actual expense ratios of each Fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of any Fund. The hypothetical expenses and account values may not be used to estimate the ending account value or the actual expenses you paid for the period. You may use this information to compare the ongoing expenses of investing in a Fund and other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other mutual funds.

            Actual   Hypothetical
    Beginning       Ending   Expenses Paid   Ending   Expenses Paid
    Account   Annualized   Account   During Period**   Account   During Period**
    Value    Expense   Value   10/1/07 to   Value   10/1/07 to
     10/1/07      Ratio*   3/31/08   3/31/08   3/31/08   3/31/08
TargETFund Core                    
Class A   $1,000.00      0.96%   $936.40     $4.65      1,020.20   $4.85  
Class C    1,000.00   1.73   932.90   8.36    1,016.35   8.72
Class D    1,000.00   1.73   932.90   8.36    1,016.35   8.72
Class I    1,000.00   0.61   937.80   2.96    1,021.95   3.08
Class R    1,000.00   1.23   935.20   5.95    1,018.85   6.21


See footnotes on page 10.  
(Continued on page 10.)

9



Understanding and Comparing Your Fund’s Expenses

            Actual   Hypothetical
    Beginning       Ending   Expenses Paid   Ending   Expenses Paid
    Account   Annualized   Account   During Period**   Account   During Period**
    Value   Expense   Value   10/1/07 to   Value   10/1/07 to
    10/1/07      Ratio*   3/31/08   3/31/08   3/31/08   3/31/08
TargETFund 2015                    
Class A   $1,000.00       0.96%   $899.80     $4.56     $1,020.20     $4.85  
Class C   1,000.00   1.73   897.50   8.21   1,016.35   8.72
Class D   1,000.00   1.73   897.50   8.21   1,016.35   8.72
Class I   1,000.00   0.61   902.40   2.90   1,021.95   3.08
Class R   1,000.00   1.23   899.30   5.84   1,018.85   6.21
TargETFund 2025                    
Class A   $1,000.00       0.96%   $883.70   $4.52     $1,020.20     $4.85  
Class C   1,000.00   1.73   880.90   8.13   1,016.35   8.72
Class D   1,000.00   1.73   879.80   8.13   1,016.35   8.72
Class I   1,000.00   0.61   884.90   2.87   1,021.95   3.08
Class R   1,000.00   1.23   883.00   5.79   1,018.85   6.21
TargETFund 2035                    
Class A   $1,000.00       0.98%   $882.00     $4.61     $1,020.10     $4.95  
Class C   1,000.00   1.73   878.80   8.13   1,016.35   8.72
Class D   1,000.00   1.73   878.80   8.13   1,016.35   8.72
Class I   1,000.00   0.61   882.80   2.87   1,021.95   3.08
Class R   1,000.00   1.23   880.60   5.78   1,018.85   6.21
TargETFund 2045                    
Class A   $1,000.00       0.95%   $882.80     $4.47     $1,020.25    $4.80  
Class C   1,000.00   1.68   880.00   7.90   1,016.60   8.47
Class D   1,000.00   1.69   878.90   7.94   1,016.55   8.52
Class I   1,000.00   0.59   884.40   2.78   1,022.05   2.98
Class R   1,000.00   1.19   882.30   5.60   1,019.05   6.01

   *   Expenses of Class C, Class D, Class I and Class R shares differ from the expenses of Class A shares due to the differences in 12b-1 fees and other class-specific expenses paid by each share class. See the Series’ prospectuses for a description of each share class and its fees, expenses and sales charges. Expenses, as presented in the table, do not include the expenses of the Underlying ETFs which, as of March 31, 2008, were 0.19%, 0.22%, 0.25%, 0.27% and 0.26% per annum for TargETF und Core, TargETF und 2015, TargETF und 2025, TargETF und 2035 and TargETF und 2045, respectively. Through at least January 31, 2015, the Manager has contractually undertaken to waive its management fee and/or reimburse each Fund’s expenses to the extent that the Fund’s “other expenses” (i.e., those expenses other than management fees, 12b-1 fees, interest on borrowings, and extraordinary expenses, including litigation expenses) exceed 0.23% (0.11% for Class I shares) per annum of each Fund’s average daily net assets. The Manager also has from time-to-time voluntarily reimbursed certain additional class-specific expenses of TargETF und 2035 and TargETF und 2045. Effective November 1, 2007, the Manager has discontinued making such reimbursements. Absent such waiver/expense reimbursements, the expense ratios and expenses paid by a shareholder for the period would have been higher.
   **   Expenses are equal to the Funds’ annualized expense ratios based on actual expenses for the period October 1, 2007 to March 31, 2008, multiplied by the average account value over the period, multiplied by 183/366 (number of days in the period).
 

10



Portfolios of Investments (unaudited)
March 31, 2008

TargETFund Core              
    Shares or        
    Principal        
    Amount   Value
Exchange-Traded Funds 99.8%              
Fixed-Income Funds 34.9%              
iShares iBoxx $ Investment Grade Corporate Bond Fund   88,872   shs.   $ 9,349,334  
iShares Lehman US Treasury Inflation Protected Securities Fund   127,479       14,009,942  
Vanguard Total Bond Market ETF Fund   119,600       9,345,544  
            32,704,820  
US Large-Cap Fund 29.9%              
SPDR Trust Series 1   212,700       28,070,019  
International Large-Cap Fund 10.0%              
Vanguard Europe Pacific ETF Fund   213,100       9,399,841  
REIT Fund 10.0%              
Dow Jones Wilshire REIT Fund   134,100       9,388,341  
US Large- and Mid-Cap Fund 10.0%              
iShares Dow Jones Select Dividend Index Fund   161,481       9,344,906  
US Mid-Cap Fund 5.0%              
iShares Russell Midcap Index Fund   50,264       4,702,197  
Total Exchange-Traded Funds (Cost $96,858,279)           93,610,124  
Repurchase Agreement 1.3%              
Fixed Income Clearing Corporation 1.8%, dated 3/31/2008, maturing              
4/1/2008, in the amount of $1,229,061, collateralized by: $1,195,000              
Federal Home Loan Bank 5.435%, 12/20/2022, with a fair market value              
of $1,266,700 (Cost $1,229,000)   1,229,000       1,229,000  
Total Investments (Cost $98,087,279) 101.1%           94,839,124  
Other Assets Less Liabilities (1.1)%           (1,006,378 )
Net Assets 100.0%         $ 93,832,746  


See Notes to Financial Statements.

11



Portfolios of Investments (unaudited)
March 31, 2008

TargETFund 2015                
    Shares or        
    Principal        
    Amount   Value
Exchange-Traded Funds 100.0%                
US Large-Cap Fund 22.5%                
SPDR Trust Series 1     68,275   shs.   $ 9,010,252  
US Mid-Cap Fund 20.1%                
iShares Russell Midcap Index Fund     86,249       8,068,594  
Fixed-Income Funds 16.2%                
iShares iBoxx $ Investment Grade Corporate Bond Fund     38,124       4,010,645  
iShares Lehman US Treasury Inflation Protected Securities Fund     13,500       1,483,650  
Vanguard Total Bond Market ETF Fund     12,850       1,004,099  
              6,498,394  
US Small-Cap Fund 11.2%                
iShares Russell 2000 Index Fund     65,842       4,510,835  
International Large-Cap Fund 10.0%                
Vanguard Europe Pacific ETF Fund     91,300       4,027,243  
REIT Fund 10.0%                
Dow Jones Wilshire REIT Fund     57,400       4,018,574  
International Small-Cap Fund 3.8%                
WisdomTree International SmallCap Dividend Fund     24,700       1,516,333  
Emerging Markets Fund 3.7%                
Vanguard Emerging Markets ETF Fund     15,900       1,495,077  
US Large- and Mid-Cap Fund 2.5%                
iShares Dow Jones Select Dividend Index Fund     17,100       989,577  
Total Exchange-Traded Funds (Cost $42,488,764)             40,134,879  
Repurchase Agreement 0.3%                
Fixed Income Clearing Corporation 1.8%, dated 3/31/2008, maturing                
4/1/2008, in the amount of $146,007, collateralized by: $145,000                
Federal Home Loan Bank 5.435%, 12/20/2022, with a fair market value                
of $153,700 (Cost $146,000)   $ 146,000       146,000  
Total Investments (Cost $42,634,764) 100.3%             40,280,879  
Other Assets Less Liabilities (0.3)%             (136,054 )
Net Assets 100.0%           $ 40,144,825  


See Notes to Financial Statements.

12


Portfolios of Investments (unaudited)
March 31, 2008

TargETFund 2025              
    Shares or        
    Principal        
    Amount   Value
Exchange-Traded Funds 99.9%              
US Mid-Cap Fund 25.1%              
iShares Russell Midcap Index Fund   112,201   shs.   $ 10,496,404  
US Small-Cap Fund 22.4%              
iShares Russell 2000 Index Fund   137,121       9,394,160  
US Large-Cap Fund 17.4%              
SPDR Trust Series 1   55,150       7,278,145  
International Large-Cap Fund 10.0%              
Vanguard Europe Pacific ETF Fund   94,900       4,186,039  
Emerging Markets Fund 8.8%              
Vanguard Emerging Markets ETF Fund   39,000       3,667,170  
International Small-Cap Fund 8.7%              
WisdomTree International SmallCap Dividend Fund   59,800       3,671,122  
Fixed-Income Fund 5.0%              
iShares iBoxx $ Investment Grade Corporate Bond Fund   19,800       2,082,960  
REIT Fund 2.5%              
Dow Jones Wilshire REIT Fund   14,900       1,043,149  
Total Exchange-Traded Funds (Cost $45,119,892)           41,819,149  
Repurchase Agreement 0.6%              
Fixed Income Clearing Corporation 1.8%, dated 3/31/2008, maturing              
4/1/2008, in the amount of $259,013, collateralized by: $255,000              
Federal Home Loan Bank 5.435%, 12/20/2022, with a fair market value              
of $270,300 (Cost $259,000)   $259,000       259,000  
Total Investments (Cost $45,378,892) 100.5%           42,078,149  
Other Assets Less Liabilities (0.5)%           (192,953 )
Net Assets 100.0%         $ 41,885,196  


See Notes to Financial Statements.

13



Portfolios of Investments (unaudited)
March 31, 2008

TargETFund 2035              
    Shares or        
    Principal        
    Amount   Value
Exchange-Traded Funds 99.8%              
US Mid-Cap Fund 25.0%              
iShares Russell Midcap Index Fund   18,300   shs.   $ 1,711,965  
US Small-Cap Fund 24.9%              
iShares Russell 2000 Index Fund   24,845       1,702,131  
US Large-Cap Fund 15.0%              
SPDR Trust Series 1   7,745       1,022,108  
International Small-Cap Fund 10.0%              
WisdomTree International SmallCap Dividend Fund   11,140       683,885  
International Large-Cap Fund 10.0%              
Vanguard Europe Pacific ETF Fund   15,500       683,705  
Emerging Markets Fund 10.0%              
Vanguard Emerging Markets ETF Fund   7,250       681,718  
Fixed-Income Fund 4.9%              
iShares iBoxx $ Investment Grade Corporate Bond Fund   3,200       336,640  
Total Exchange-Traded Funds (Cost $7,511,831)           6,822,151  
Repurchase Agreement 3.0%              
Fixed Income Clearing Corporation 1.8%, dated 3/31/2008, maturing              
4/1/2008, in the amount of $207,010, collateralized by: $205,000              
Federal Home Loan Bank 5.435%, 12/20/2022, with a fair market value              
of $217,300 (Cost $207,000)   $207,000       207,000  
Total Investments (Cost $7,718,831) 102.8%           7,029,151  
Other Assets Less Liabilities (2.8)%           (195,229 )
Net Assets 100.0%         $ 6,833,922  


See Notes to Financial Statements.

14



Portfolios of Investments (unaudited)
March 31, 2008

TargETFund 2045              
    Shares or        
    Principal        
    Amount   Value
Exchange-Traded Funds 99.4%              
US Mid-Cap Fund 24.9%              
iShares Russell Midcap Index Fund   12,695   shs.   $ 1,187,617  
US Small-Cap Fund 24.7%              
iShares Russell 2000 Index Fund   17,190       1,177,687  
US Large-Cap Fund 14.9%              
SPDR Trust Series 1   5,390       711,319  
International Small-Cap Fund 10.0%              
WisdomTree International SmallCap Dividend Fund   7,785       477,921  
International Large-Cap Fund 10.0%              
Vanguard Europe Pacific ETF Fund   10,775       475,285  
Emerging Markets Fund 9.9%              
Vanguard Emerging Markets ETF Fund   5,000       470,150  
Fixed-Income Fund 5.0%              
iShares iBoxx $ Investment Grade Corporate Bond Fund   2,275       239,330  
Total Exchange-Traded Funds (Cost $5,201,324)           4,739,309  
Repurchase Agreement 0.7%              
Fixed Income Clearing Corporation 1.8%, dated 3/31/2008, maturing              
4/1/2008, in the amount of $33,002, collateralized by: $35,000              
Federal Home Loan Bank 5.435%, 12/20/2022, with a fair market value              
of $37,100 (Cost $33,000)   $33,000       33,000  
Total Investments (Cost $5,234,324) 100.1%           4,772,309  
Other Assets Less Liabilities (0.1)%           (4,823 )
Net Assets 100.0%         $ 4,767,486  


See Notes to Financial Statements.

15



Statements of Assets and Liabilities (unaudited)
March 31, 2008

    TargETFund   TargETFund   TargETFund   TargETFund     TargETFund  
    Core   2015     2025     2035     2045  
Assets:                                        
Investments, at value:                                        
   Exchange-traded funds   $ 93,610,124     $ 40,134,879     $ 41,819,149     $ 6,822,151     $ 4,739,309  
   Short-term holdings     1,229,000       146,000       259,000       207,000       33,000  
Total investments*     94,839,124       40,280,879       42,078,149       7,029,151       4,772,309  
Cash     107,828       10,610       956       142       293  
Receivable for Capital Stock sold     283,808       148,790       69,406       26,417       7,047  
Dividend and interest receivable     244,406       89,903       44,893       4,790       3,430  
Receivable for securities sold     204,410       557,503       235,470             44,969  
Receivable from the Manager (Note 4) 8,758       5,220       831       2,258       3,836  
Expenses prepaid to shareholder                                        
service agent     4,818       2,346       2,663       444       254  
Other     10,474       6,480       6,205       3,571       3,465  
Total Assets     95,703,626       41,101,731       42,438,573       7,066,773       4,835,603  
 
Liabilities:                                        
Payable for securities purchased     1,033,545       516,019       409,242       211,340        
Payable for Capital Stock repurchased     709,028       374,878       80,515       17       48,674  
Distribution and service (12b-1)                                        
fees payable     51,600       21,239       20,666       1,790       830  
Management fee payable     39,035       16,978       17,317       2,786       1,999  
Accrued expenses and other     37,672       27,792       25,637       16,918       16,614  
Total Liabilities     1,870,880       956,906       553,377       232,851       68,117  
Net Assets   $ 93,832,746     $ 40,144,825     $ 41,885,196     $ 6,833,922     $ 4,767,486  
 
Composition of Net Assets:                                        
Capital Stock, at $0.001 par value:                                        
   Class A   $ 4,648     $ 2,271     $ 2,402     $ 472     $ 321  
   Class C     3,038       1,701       1,432       147       45  
   Class D     3,267       852       949       66       82  
   Class I     121       114       185       29       59  
   Class R     1,355       182       243       90       53  
Additional paid-in capital     95,082,761       40,851,593       42,846,200       7,473,393       5,173,672  
Undistributed/(dividends in excess of)                                        
net investment income     8,743       27,039       (37,643 )     (2,974 )     (2,168 )
Undistributed net realized gain     1,976,968       1,614,958       2,372,171       52,379       57,437  
Net unrealized depreciation of                                        
investments     (3,248,155 )     (2,353,885 )     (3,300,743 )     (689,680 )     (462,015 )
Net Assets   $ 93,832,746     $ 40,144,825     $ 41,885,196     $ 6,833,922     $ 4,767,486  


See footnotes on page 17.  
(Continued on page 17.)

16



Statements of Assets and Liabilities
(unaudited) (continued)
March 31, 2008

    TargETFund   TargETFund   TargETFund   TargETFund   TargETFund
    Core   2015   2025      2035      2045
Net Assets:                              
Class A   $ 35,086,554   $ 17,878,575   $ 19,414,988   $ 4,017,029   $ 2,736,227
Class C     22,938,190     13,282,030     11,434,746     1,244,080     384,734
Class D     24,669,428     6,650,752     7,576,613     560,524     690,033
Class I     917,431     903,593     1,503,159     250,940     503,310
Class R     10,221,143     1,429,875     1,955,690     761,349     453,182
 
Shares of Capital Stock Outstanding:                        
Class A     4,647,532     2,271,363     2,401,965     472,214     321,178
Class C     3,037,708     1,701,170     1,431,538     147,138     45,448
Class D     3,267,023     851,807     948,893     66,290     81,518
Class I     121,463     114,134     185,067     29,487     59,033
Class R     1,354,998     182,100     243,024     89,532     53,209
 
Net Asset Value Per Share:                              
Class A   $ 7.55   $ 7.87   $ 8.08   $ 8.51   $ 8.52
Class C     7.55     7.81     7.99     8.46     8.47
Class D     7.55     7.81     7.98     8.46     8.46
Class I     7.55     7.92     8.12     8.51     8.53
Class R     7.54     7.85     8.05     8.50     8.52


* Cost of total investments:   $ 98,087,279   $ 42,634,764   $ 45,378,892   $ 7,718,831   $ 5,234,324
See Notes to Financial Statements.                              

17



Statements of Operations (unaudited)
For the Six Months Ended March 31, 2008

    TargETFund   TargETFund   TargETFund   TargETFund   TargETFund
    Core   2015   2025   2035   2045
Investment Income:                                        
Dividends   $ 1,741,600     $ 601,819     $ 484,437     $ 60,105     $ 44,463  
Interest     12,364       4,456       10,117       2,070       1,940  
Total Investment Income     1,753,964       606,275       494,554       62,175       46,403  
 
Expenses:*                                        
Distribution and service (12b-1) fees     318,285       135,822       130,350       13,297       8,451  
Management fees     237,124       108,364       105,407       13,580       9,743  
Shareholder account services     100,496       49,459       49,855       6,782       4,289  
Registration     36,867       31,467       31,659       24,838       24,256  
Auditing and legal fees     23,152       13,541       13,234       6,265       5,919  
Shareholder reports and communications 10,407       6,074       6,042       2,601       2,544  
Custody and related services     7,289       7,093       5,535       2,346       2,694  
Directors’ fees and expenses     4,257       3,179       3,170       2,391       2,365  
Miscellaneous     5,269       3,399       3,209       2,448       3,069  
Total Expenses Before                                        
Reimbursement     743,146       358,398       348,461       74,548       63,330  
Reimbursement of expenses (Note 4)     (79,205 )     (64,908 )     (65,202 )     (41,620 )     (42,258 )
Total Expenses After Reimbursement 663,941       293,490       283,259       32,928       21,072  
Net Investment Income     1,090,023       312,785       211,295       29,247       25,331  
Net Realized and Unrealized                                        
Gain (Loss) on Investments and                                        
Capital Gain Distributions:                                        
Net realized gain on investments     2,023,316       1,666,965       2,412,629       53,113       57,495  
Capital gain distributions received                                        
from Underlying ETFs     8,229       5,276       3,778       452       332  
Net change in unrealized appreciation                                        
of investments     (9,603,667 )     (6,710,329 )     (8,020,377 )     (792,366 )     (547,927 )
Net Loss on Investments     (7,572,122 )     (5,038,088 )     (5,603,970 )     (738,801 )     (490,100 )
Decrease in Net Assets                                        
from Operations   $ (6,482,099 )   $ (4,725,303 )   $ (5,392,675 )   $ (709,554 )   $ (464,769 )


* Expenses do not include the fees and expenses of the Underlying ETFs in which the Funds invest. The Funds indirectly bear such expenses through their ownership of Underlying ETFs.

See Notes to Financial Statements.

18



Statements of Changes in Net Assets

(unaudited)

    TargETFund Core   TargETFund 2015
    Six Months           Six Months        
    Ended   Year Ended   Ended   Year Ended
    3/31/08   9/30/07   3/31/08   9/30/07
Operations:                                
Net investment income   $ 1,090,023     $ 1,227,673     $ 312,785     $ 282,752  
Net realized gain on investments     2,023,316       80,420       1,666,965       318,650  
Capital gain distributions received from                                
Underlying ETFs     8,229       25,179       5,276       13,280  
Net change in unrealized appreciation of investments     (9,603,667 )     4,683,455       (6,710,329 )     3,463,749  
Increase (Decrease) in Net Assets from                                
Operations     (6,482,099 )     6,016,727       (4,725,303 )     4,078,431  
Distributions to Shareholders:                                
Net investment income:                                
   Class A     (452,391 )     (563,422 )     (206,034 )     (99,945 )
   Class C     (229,963 )     (258,354 )     (133,312 )     (51,226 )
   Class D     (267,547 )     (350,895 )     (71,896 )     (30,498 )
   Class I     (13,621 )     (20,610 )     (11,090 )     (8,186 )
   Class R     (117,132 )     (67,019 )     (13,132 )     (118 )
Total     (1,080,654 )     (1,260,300 )     (435,464 )     (189,973 )
Net realized gain on investments and                                
capital gain distributions:                                
   Class A     (33,451 )     (47,137 )     (147,807 )     (17,798 )
   Class C     (24,205 )     (39,387 )     (115,771 )     (17,999 )
   Class D     (28,837 )     (55,032 )     (62,436 )     (10,715 )
   Class I     (915 )     (1,939 )     (7,247 )     (1,330 )
   Class R     (9,338 )     (4,762 )     (9,738 )     (27 )
Total     (96,746 )     (148,257 )     (342,999 )     (47,869 )
Decrease in Net Assets From Distributions     (1,177,400 )     (1,408,557 )     (778,463 )     (237,842 )
Capital Share Transactions:                                
Net proceeds from sales of shares     22,343,256       58,455,371       6,400,672       25,061,657  
Exchanged from associated funds     1,561,337       8,742,019       357,795       1,820,614  
Investment of distributions     1,015,243       1,423,579       707,660       220,554  
Total     24,919,836       68,620,969       7,466,127       27,102,825  
Cost of shares repurchased     (17,104,656 )     (20,739,108 )     (6,629,824 )     (7,770,339 )
Exchanged into associated funds     (2,167,427 )     (1,540,602 )     (1,317,575 )     (755,531 )
Total     (19,272,083 )     (22,279,710 )     (7,947,399 )     (8,525,870 )
Increase (Decrease) in Net Assets from                                
Capital Share Transactions     5,647,753       46,341,259       (481,272 )     18,576,955  
Increase (Decrease) in Net Assets     (2,011,746 )     50,949,429       (5,985,038 )     22,417,544  
Net Assets:                                
Beginning of period     95,844,492       44,895,063       46,129,863       23,712,319  
End of Period*   $ 93,832,746     $ 95,844,492     $ 40,144,825     $ 46,129,863  


                               
* Including undistributed/accumulated net investment                                
  income (loss) as follows:   $ 8,743     $ (626 )   $ 27,039     $ 148,192  
See Notes to Financial Statements.                                

19



Statements of Changes in Net Assets

(unaudited) (continued)

    TargETFund 2025   TargETFund 2035
    Six Months           Six Months   10/2/06*
    Ended   Year Ended   Ended   to
    3/31/08   9/30/07   3/31/08   9/30/07
Operations:                                
Net investment income   $ 211,295     $ 52,664     $ 29,247     $ 17,111  
Net realized gain (loss) on investments     2,412,629       356,154       53,113       (734 )
Capital gain distributions received from                                
Underlying ETFs     3,778       1,061       452        
Net change in unrealized appreciation of investments     (8,020,377 )     4,103,717       (792,366 )     102,686  
Increase (Decrease) in Net Assets from                                
Operations     (5,392,675 )     4,513,596       (709,554 )     119,063  
Distributions to Shareholders:                                
Net investment income:                                
   Class A     (103,481 )     (20,415 )     (26,430 )     (133 )
   Class C     (50,645 )     (15,313 )     (8,792 )     (651 )
   Class D     (38,504 )     (12,069 )     (3,741 )     (32 )
   Class I     (10,196 )     (4,823 )     (3,431 )     (492 )
   Class R     (7,916 )     (44 )     (2,743 )     (43 )
Total     (210,742 )     (52,664 )     (45,137 )     (1,351 )
Dividends in excess of net investment income:                                
   Class A     (20,130 )           (2,007 )      
   Class C     (9,852 )           (667 )      
   Class D     (7,491 )           (284 )      
   Class I     (1,984 )           (260 )      
   Class R     (1,540 )           (208 )      
Total     (40,997 )           (3,426 )      
Net realized gain on investments and                                
capital gain distributions:                                
   Class A     (113,136 )     (40,154 )            
   Class C     (77,782 )     (32,965 )            
   Class D     (59,137 )     (25,982 )            
   Class I     (9,965 )     (9,190 )            
   Class R     (9,118 )     (86 )            
Total     (269,138 )     (108,377 )            
Decrease in Net Assets From Distributions     (520,877 )     (161,041 )     (48,563 )     (1,351 )
Capital Share Transactions:                                
Net proceeds from sales of shares     10,943,295       23,616,633       3,814,819       3,834,631  
Exchanged from associated funds     1,306,654       1,226,263       39,705       204,614  
Investment of distributions     470,293       149,160       40,136       1,312  
Total     12,720,242       24,992,056       3,894,660       4,040,557  
Cost of shares repurchased     (5,277,455 )     (6,468,007 )     (350,888 )     (152,156 )
Exchanged into associated funds     (701,705 )     (1,114,176 )     (10,496 )      
Total     (5,979,160 )     (7,582,183 )     (361,384 )     (152,156 )
Increase in Net Assets from                                
Capital Share Transactions     6,741,082       17,409,873       3,533,276       3,888,401  
Increase in Net Assets     827,530       21,762,428       2,775,159       4,006,113  
Net Assets:                                
Beginning of period     41,057,666       19,295,238       4,058,763       52,650  
End of Period**   $ 41,885,196     $ 41,057,666     $ 6,833,922     $ 4,058,763  


 * Commencement of operations.                                
** Including undistributed/(net of dividends in excess of)                                
   net investment income as follows:   $ (37,643 )   $ (553 )   $ (2,974 )   $ 15,890  
See Notes to Financial Statements.                                

20



Statements of Changes in Net Assets
(unaudited) (continued)

    TargETFund 2045
    Six Months     10/2/06*
    Ended     to  
    3/31/08   9/30/07
Operations:                
Net investment income   $ 25,331     $ 5,732  
Net realized gain on investments     57,495       5,963  
Capital gain distributions received from Underlying ETFs     332        
Net change in unrealized appreciation of investments     (547,927 )     85,912  
Increase (Decrease) in Net Assets from Operations     (464,769 )     97,607  
Distributions to Shareholders:                
Net investment income:                
   Class A     (15,758 )     (251 )
   Class C     (2,451 )     (32 )
   Class D     (4,447 )     (32 )
   Class I     (4,892 )     (353 )
   Class R     (2,865 )     (43 )
Total     (30,413 )     (711 )
Dividends in excess of net investment income:                
   Class A     (1,295 )      
   Class C     (201 )      
   Class D     (366 )      
   Class I     (402 )      
   Class R     (236 )      
Total     (2,500 )      
Net realized gain on investments and capital gain distributions:                
   Class A     (1,993 )      
   Class C     (379 )      
   Class D     (687 )      
   Class I     (574 )      
   Class R     (388 )      
Total     (4,021 )      
Decrease in Net Assets From Distributions     (36,934 )     (711 )
Capital Share Transactions:                
Net proceeds from sales of shares     3,204,205       2,510,925  
Exchanged from associated funds     76,218       309,371  
Investment of distributions     24,041       711  
Total     3,304,464       2,821,007  
Cost of shares repurchased     (639,940 )     (148,808 )
Exchanged into associated funds     (13,121 )     (203,959 )
Total     (653,061 )     (352,767 )
Increase in Net Assets from                
Capital Share Transactions     2,651,403       2,468,240  
Increase in Net Assets     2,149,700       2,565,136  
Net Assets:                
Beginning of period     2,617,786       52,650  
End of Period**   $ 4,767,486     $ 2,617,786  
 


 * Commencement of operations.                
** Including undistributed/(net of dividends in excess of) net investment income as follows:   $ (2,168 )   $ 5,082  
See Notes to Financial Statements.                

21



Notes to Financial Statements (unaudited)

1.       Organization Seligman TargetHorizon ETF Portfolios, Inc. (the “Series”) is registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended (the “1940 Act”), as a diversified open-end management investment company, or mutual fund, and consists of five separate and distinct funds (each, a “Fund” of the Series): Seligman TargETF und Core (“TargETF und Core”), Seligman TargETF und 2015 (“TargETF und 2015”), Seligman TargETF und 2025 (“TargETF und 2025”), Seligman TargETF und 2035 (“TargETF und 2035”) and Seligman TargETF und 2045 (“TargETF und 2045”). The Series was incorporated under the laws of the state of Maryland on July 6, 2005. TargETF und Core, TargETF und 2015 and TargETF und 2025 had no operations prior to October 3, 2005 (commencement of operations) other than those relating to organizational matters and, for each Fund, the sale and issuance to Seligman Advisors, Inc. (the “Distributor”) of 1,870 Class A shares of Capital Stock for $13,352 and 700 shares for each of Class C, Class D, Class I and Class R shares, each at a cost of $4,998 on September 9, 2005, and 9,500 Class A shares, each at a cost of $67,830 on September 30, 2005.
 
  On October 2, 2006, the Series added two new Funds: TargETF und 2035 and TargETF und 2045. Prior to October 2, 2006, the new Funds had no operations other than those relating to organizational matters and, for each new fund on September 21, 2006, the sale and issuance to the Distributor of 2,500 Class A shares of Capital Stock for $20,250 and 1,000 shares for each of Class C, Class D, Class I and Class R shares, each at a cost of $8,100.
 
2.      Multiple Classes of Shares Through May 16, 2008, each Fund of the Series offered five classes of shares. Certain of these shares are offered only to certain types of investors. Class B shares were authorized by the Board of Directors but are not currently offered.
 
  Class A shares are subject to a continuing service fee of up to 0.25% on an annual basis and, through January 6, 2008, were sold with an initial sales charge of up to 4.75% (5.75% effective January 7, 2008). Class A shares purchased in an amount of $1,000,000 or more are sold without an initial sales charge but are subject to a contingent deferred sales charge (“CDSC”) of 1% on redemptions within 18 months of purchase. Effective January 7, 2008, eligible employee benefit plans that have at least $2,000,000 in plan assets may purchase Class A shares at net asset value, but, in the event of plan termination, will be subject to a CDSC of 1% on redemption of shares purchased within 18 months prior to plan termination.
 
  Class C shares and Class D shares are sold without an initial sales charge but are subject to a distribution fee of up to 0.75% and a service fee of up to 0.25% on an annual basis, and a CDSC, if applicable, of 1% imposed on redemptions made within one year of purchase.
 
  The Board of Directors of the Series approved the automatic conversion of all of the Funds’ outstanding Class D shares to Class C shares at their respective net asset values. The conversion was implemented on May 16, 2008. Effective at the close of business on May 16, 2008, the Funds no longer offer Class D shares. The conversion did not affect individual shareholder account values.
 
  Class I shares are offered to certain institutional clients and other investors, as described in the Series’ Class I shares prospectus. Class I shares are sold without any sales charges and are not subject to distribution or service fees.
 
  Class R shares are offered to certain employee benefit plans and are not available to all investors. They are sold without an initial sales charge, but are subject to a distribution fee of up to 0.25% and a service fee of up to 0.25% on an annual basis, and a CDSC, if applicable, of 1% on redemptions made within one year of a plan’s initial purchase of Class R shares.
 
  All classes of shares of a Fund represent interests in the same portfolio of investments, have the same rights and are generally identical in all respects except that each class bears its own class-specific expenses, and has exclusive voting rights with respect to any matter on which a separate vote of any class is required.
 

22



Notes to Financial Statements (unaudited)

3.       Significant Accounting Policies The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results may differ from these estimates. These unaudited interim financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim period presented. All such adjustments are of a normal recurring nature. The following summarizes the significant accounting policies of the Series:
 
  a.       Security Valuation and Risk Securities traded on an exchange are valued at the last sales price on the primary exchange or market on which they are traded. Securities not listed on an exchange or security market, or securities for which there is no last sales price, are valued at the mean of the most recent bid and asked prices or are valued by J. & W. Seligman & Co. Incorporated (the “Manager”) based on quotations provided by primary market makers in such securities. Securities for which market quotations are not readily available (or are otherwise no longer valid or reliable) are valued at fair value determined in accordance with procedures approved by the Board of Directors. This can occur in the event of, among other things, natural disasters, acts of terrorism, market disruptions, intra-day trading halts, and extreme market volatility. The determination of fair value involves subjective judgments. As a result, using fair value to price a security may result in a price materially different from the prices used by other mutual funds to determine net asset value or the price that may be realized upon the actual sale of the security. Short-term holdings that mature in 60 days or less are valued at current market quotations or amortized cost if the Manager believes it approximates fair value. Short-term holdings that mature in more than 60 days are valued at current market quotations until the 60th day prior to maturity and are then valued as described above for securities maturing in 60 days or less.
 
    The following risks apply to some or all of the exchange-traded funds (“ETFs”) in which the Funds invest. An ETF may concentrate its investments in stocks of large-, medium- or small-capitalization companies. At times, one or more of these groups of stocks has experienced periods of volatility and negative performance. During such periods, the value of such stocks may decline and the performance of the ETF may be negatively affected. The products of technology companies may be subject to severe competition and rapid obsolescence, and technology stocks may be subject to greater price fluctuation, government regulation, and limited liquidity as compared to other investments. There are specific risks associated with global investing, such as currency fluctuations, foreign taxation, differences in financial reporting practices, and rapid changes in political and economic conditions. Because of the special risks involved with investing in securities of emerging market companies, investing in such companies should be considered speculative. Investments in real estate securities (e.g., REITs) may be subject to specific risks, such as risks to general and local economic conditions, and risks related to individual properties. To the extent that the Funds have a substantial percentage of its assets exposed to an industry or sector through its investment in ETFs, the Funds’ performance may be negatively affected if that industry or sector falls out of favor. A portfolio with fewer holdings may be subject to greater volatility than a portfolio with a greater number of holdings. US government and other fixed income securities are subject to interest rate risk, credit risk, prepayment risk and market risk. Securities that are not guaranteed by the US Government may have increased credit risk, including, but not limited to, the risk of non-payment of principal or interest. High-yield securities are subject to higher volatility in yield and market value and a greater risk of loss of principal and interest than higher-rated, investment grade fixed income securities.
 
  b.      Repurchase Agreements Each Fund may enter into repurchase agreements. Generally, securities received as collateral subject to repurchase agreements are deposited with the Series’ custodian and, pursuant to the terms of the repurchase agreements, must have an aggregate market value greater than or equal to the repurchase price, plus accrued interest, at all times. On a daily basis, the market value of securities held as collateral for repurchase agreements is monitored to ensure the existence of the proper level of collateral.
 

23



Notes to Financial Statements (unaudited)

  c.      Multiple Class Allocations For each Fund, all income, expenses (other than class-specific expenses), and realized and unrealized gains or losses are allocated daily to each class of shares based upon the relative value of the shares of each class. Class-specific expenses, which include distribution and service fees and any other items that are specifically attributable to a particular class, are charged directly to such class. For the six months ended March 31, 2008, distribution and service fees, shareholder account services, and registration expenses were class-specific expenses.
 
  d.      Security Transactions and Related Investment Income Investment transactions are recorded on trade dates. Identified cost of investments sold is used for both financial statement and federal income tax purposes. Interest income is recorded on an accrual basis. Dividends receivable are recorded on ex- dividend dates. Distributions received from the Series’ investments are initially recorded as dividend income as reported by the issuers. Portions of these distributions will be appropriately recharacterized as capital gains or returns of capital based on reporting from the issuers received after the end of the calendar year.
 
  e.      Distributions to Shareholders Dividends and other distributions to shareholders are recorded on ex-dividend date.
 
  f.      Taxes There is no provision for federal income tax. Each Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all taxable net income and net gain realized.
 
   On October 1, 2007, the Funds adopted Financial Accounting Standards Board (“FASB”) Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109.” FIN 48 requires the Funds to recognize in their financial statements the impact of a tax position taken (or expected to be taken) on an income tax return if such position will more likely than not be sustained upon examination based on the technical merits of the position. Based upon their review of tax positions, the Funds have determined that FIN 48 did not have a material impact on the Funds’ financial statements for the six months ended March 31, 2008.
 
4.      Management Fee, Distribution Services, and Other Transactions The Manager manages the affairs of the Series and provides the necessary personnel and facilities. Compensation of all officers of the Series, all directors of the Series who are employees of the Manager, and all personnel of the Series and the Manager, is paid by the Manager. The Manager receives a fee, calculated daily and payable monthly, equal to 0.50% per annum of the first $500 million of each Fund’s average daily net assets, 0.45% per annum of the next $500 million of each Fund’s average daily net assets and 0.40% per annum of each Fund’s average daily net assets in excess of $1 billion. The management fee reflected in the Statements of Operations for each Fund was 0.50% per annum of the average daily net assets of each of the Funds.
 
  The Manager has contractually agreed through at least January 31, 2015 to waive its fees and/or reimburse each Fund’s expenses to the extent that the Fund’s “other expenses” (i.e., those expenses other than management fees, 12b-1 fees, interest on borrowings, and extraordinary expenses, including litigation expenses) exceed 0.23% (0.11% for Class I shares) per annum of each Fund’s average daily net assets. The Manager also has voluntarily reimbursed certain additional class-specific expenses of TargETF und 2045 in order to maintain the same net asset values per share for the corresponding share classes of TargETF und 2035. Effective November 1, 2007, the Manager has discontinued making such reimbursements. For the six months ended March 31, 2008, the amount of expenses reimbursed by the Manager and the amount receivable at March 31, 2008 were as follows:
 
                   Receivable
    Contractual   Voluntary   from
Fund   Reimbursements   Reimbursement   Manager
TargETF und Core   $79,205           —   $8,758  
TargETF und 2015   64,908         —   5,220
TargETF und 2025   65,202         —      831
TargETF und 2035   41,620         —   2,258
TargETF und 2045   40,926  

$1,332

  3,836

24



Notes to Financial Statements (unaudited)

For the six months ended March 31, 2008, the Distributor, agent for the distribution of the Series’ shares and an affiliate of the Manager, received commissions and concessions for sales of Class A shares; and commissions were paid to dealers for sales of Class A shares as follows:

    Commissions and Concessions   Dealer
Fund   Retained by Affiliate   Commissions
TargETF und Core   $9,168   $66,193
TargETF und 2015     5,724     44,381
TargETF und 2025     6,970     50,979
TargETF und 2035        603       4,731
TargETF und 2045        623       4,835

Each Fund of the Series has an Administration, Shareholder Services and Distribution Plan (the “Plan”) with respect to distribution of its shares. Under the Plan, with respect to Class A shares, service organizations can enter into agreements with the Distributor and receive a continuing fee of up to 0.25% on an annual basis, payable monthly, of average daily net assets of Class A shares attributable to the particular service organizations for providing personal services and/or the maintenance of shareholder accounts. The Distributor charges such fees to a Fund pursuant to the Plan. For the six months ended March 31, 2008, fees incurred by TargETFund Core, TargETFund 2015, TargETFund 2025, TargETFund 2035 and TargETFund 2045 aggregated $38,800, $21,696, $20,979, $3,766 and $2,620, respectively, or 0.25% (0.23%, in the case of TargETFund Core, TargETFund 2015 and TargETFund 2025) per annum of average daily net assets of each Fund’s Class A shares.

Under the Plan, with respect to Class C shares, Class D shares and Class R shares, service organizations can enter into agreements with the Distributor and receive a continuing fee for providing personal services and/or the maintenance of shareholder accounts of up to 0.25% on an annual basis of the average daily net assets of the Class C, Class D, and Class R shares for which the organizations are responsible; and fees for providing other distribution assistance of up to 0.75% (0.25%, in the case of Class R shares) on an annual basis of such average daily net assets. Such fees are paid monthly by the Series to the Distributor pursuant to the Plan.

For the six months ended March 31, 2008, fees incurred under the Plan of up to 1% per annum of the average daily net assets of Class C and Class D shares, and up to 0.50% per annum of the average daily net assets of Class R shares, were as follows:

    Class C   Class D   Class R
          % of Average         % of Average         % of Average
Fund   Amount   Net Assets   Amount   Net Assets   Amount   Net Assets
TargETF und Core   $ 117,742   1.00 %   $ 139,015   1.00 %   $ 22,728   0.50 %
TargETF und 2015     72,077   1.00       38,957   1.00       3,092   0.50  
TargETF und 2025     60,538   1.00       45,259   1.00       3,574   0.50  
TargETF und 2035     6,128   1.00       2,463   1.00       940   0.50  
TargETF und 2045     1,926   1.00       2,978   1.00       927   0.50  

The Distributor and Seligman Services, Inc., also an affiliate of the Manager, are eligible to receive distribution and service fees pursuant to the Plan. For the six months ended March 31, 2008, the Distributor and Seligman Services, Inc. received the following distribution and service fees:

    Distribution and       Distribution and
Fund   Service Fees   Fund   Service Fees
TargETF und Core   $894   TargETF und 2035   $155
TargETF und 2015     274   TargETF und 2045     218
TargETF und 2025     459        

25



Notes to Financial Statements (unaudited)

The Distributor is entitled to retain any CDSC imposed on certain redemptions of Class A, Class C, Class D, and Class R shares. For the six months ended March 31, 2008, such charges were as follows:

Fund   Amount     Fund   Amount  
TargETF und Core   $11,624     TargETF und 2035   $359  
TargETF und 2015   7,000     TargETF und 2045   277  
TargETF und 2025   3,729            

For the six months ended March 31, 2008, Seligman Data Corp., which is owned by certain associated investment companies, charged at cost for shareholder account services the following amounts:

Fund   Amount   Fund   Amount  
TargETF und Core   $100,496   TargETF und 2035   $6,782  
TargETF und 2015   49,459   TargETF und 2045   4,289  
TargETF und 2025   49,855            

These charges are determined in accordance with a methodology approved by the Series’ directors. Class I shares receive more limited shareholder services than a Fund’s other classes of shares (the “Retail Classes”). Seligman Data Corp. does not allocate to Class I the costs of any of its departments that do not provide services to the Class I shareholders.

For each Fund, costs of Seligman Data Corp. directly attributable to the Retail Classes were charged to those classes in proportion to their respective net asset values. Costs directly attributable to Class I shares were charged to Class I. The remaining charges were allocated to the Retail Classes and Class I by Seligman Data Corp. pursuant to a formula based on their net assets, shareholder transaction volumes and number of shareholder accounts.

Certain officers and directors of the Series are officers or directors of the Manager, the Distributor, Seligman Services, Inc., and/or Seligman Data Corp.

The Series has a compensation arrangement under which directors who receive fees may elect to defer receiving such fees. Directors may elect to have their deferred fees accrue interest or earn a return based on the performance of selected Funds of the Series or other funds in the Seligman Group of Investment Companies. Deferred fees and related accrued earnings are not deductible by a Fund for federal income tax purposes until such amounts are paid. The cost of such fees and earnings/loss accrued thereon is included in directors’ fees and expenses, and the accumulated balances thereof at March 31, 2008 are included in accrued expenses and other liabilities as follows:

Fund   Amount   Fund   Amount  
TargETF und Core   $940   TargETF und 2035   $624  
TargETF und 2015   808   TargETF und 2045   620  
TargETF und 2025   771            

5.       Purchases and Sales of Securities Purchases and sales of portfolio securities, excluding US Government obligations and short-term investments, for the six months ended March 31, 2008, were as follows:
 
  Fund   Purchases   Sales
TargETF und Core   $25,865,213   $20,517,830
TargETF und 2015   10,990,027   11,678,059
TargETF und 2025   16,963,147   10,439,593
TargETF und 2035   5,172,597   1,646,766
TargETF und 2045   3,778,542   1,038,371

26



Notes to Financial Statements (unaudited)

6.       Federal Tax Information Certain components of income, expense and realized capital gain and loss are recognized at different times or have a different character for federal income tax purposes and for financial reporting purposes. Where such differences are permanent in nature, they are reclassified in the components of net assets based on their characterization for federal income tax purposes. Any such reclassifications will have no effect on net assets, results of operations or net asset value per share of a Fund. As a result of the differences described above, the treatment for financial reporting purposes of distributions made during the period from net investment income or net realized gains may differ from their ultimate treatment for federal income tax purposes. Further, the cost of investments also can differ for federal income tax purposes.
 
  The tax basis information presented is based on operating results for the six months ended March 31, 2008, and will vary from the final tax information as of the Funds’ year end.
 
  For the TargETF und Core, the TargETF und 2015, the TargETF und 2025, the TargETF und 2035 and the TargETF und 2045, the tax basis cost was greater than the cost for financial reporting purposes due to the tax deferral of losses on wash sales of $124,608, $87,088, $118,260, $69,076 and $27,507, respectively. At March 31, 2008, the cost of investments for federal income tax purposes for each Fund was as follows:
 
Fund   Tax Basis Cost Fund   Tax Basis Cost
TargETF und Core   $98,211,887 TargETF und 2035   $7,787,907
TargETF und 2015   42,721,852 TargETF und 2045   5,261,831
TargETF und 2025   45,497,152        

The tax basis components of accumulated earnings at March 31, 2008 are presented below. Undistributed ordinary income primarily consists of net investment income and net realized short-term gain.

    TargETFund   TargETFund   TargETFund   TargETFund   TargETFund
    Core   2015   2025   2035   2045
Gross unrealized appreciation                                        
of portfolio securities   $ 1,442,138     $ 139,816     $ 10,950     $ 2,559      $ 697  
Gross unrealized depreciation                                        
of portfolio securities     (4,814,901 )     (2,580,789 )     (3,429,953 )     (761,315 )     (490,219 )
Net unrealized depreciation                                        
of portfolio securities     (3,372,763 )     (2,440,973 )     (3,419,003 )     (758,756 )     (489,522 )
Undistributed ordinary income     540,073       27,847       28,900       35,085       73,627  
Unistributed net realized gain     1,571,186       1,702,047       2,424,661       84,020       9,769  
Total accumulated earnings   $ (1,261,504 )   $ (711,079 )   $ (965,442 )   $ (639,651 )    $ (406,126 )

For the six months ended March 31, 2008 and the year ended September 30, 2007, the tax characterization of distributions paid to shareholders was as follows:

    Six Months   Year       Six Months   Year
    Ended   Ended       Ended   Ended
Fund   3/31/08   9/30/07 Fund   3/31/08   9/30/07
Ordinary Income:             Long-term Gain:          
TargETF und Core   $ 1,080,654   $ 1,408,557 TargETF und Core   $ 96,746  
TargETF und 2015     529,009     237,842 TargETF und 2015     249,454  
TargETF und 2025     461,085     161,041 TargETF und 2025     59,792  
TargETF und 2035     48,563     1,351 TargETF und 2035      
TargETF und 2045     36,934     711 TargETF und 2045      

27



Notes to Financial Statements (unaudited)

7.      Capital Share Transactions The Board of Directors of the Series, at its discretion, may classify any unissued shares of Capital Stock among any Fund of the Series. At March 31, 2008, each Fund of the Series had authorized 600,000,000 shares of Capital Stock all at a par value of $0.001. Transactions in shares of Capital Stock were as follows:
 
 
TargETFund Core
 
    Six Months Ended   Year Ended
    3/31/08     9/30/07  
Class A   Shares     Amount   Shares     Amount
Net proceeds from sales of shares   1,169,646     $ 9,121,202     2,395,214     $ 19,188,873  
Exchanged from associated funds   70,960       556,284     949,618       7,541,465  
Investment of distributions   56,029       436,142     79,526       633,580  
Total   1,296,635       10,113,628     3,424,358       27,363,918  
Cost of shares repurchased   (638,415 )     (5,014,757 )   (1,305,201 )     (10,440,190 )
Exchanged into associated funds   (106,158 )     (834,479 )   (63,222 )     (506,745 )
Total   (744,573 )     (5,849,236 )   (1,368,423 )     (10,946,935 )
Increase   552,062     $ 4,264,392     2,055,935     $ 16,416,983  
Class C   Shares     Amount   Shares     Amount
Net proceeds from sales of shares   418,835     $ 3,301,131     1,573,508     $ 12,563,695  
Exchanged from associated funds   87,377       684,194     60,518       483,779  
Investment of distributions   28,409       221,945     36,232       288,144  
Total   534,621       4,207,270     1,670,258       13,335,618  
Cost of shares repurchased   (240,527 )     (1,856,377 )   (300,351 )     (2,402,271 )
Exchanged into associated funds   (156,188 )     (1,214,506 )   (93,944 )     (743,225 )
Total   (396,715 )     (30,070,883 )   (394,295 )     (3,145,496 )
Increase   137,906     $ 1,136,387     1,275,963     $ 10,190,122  
Class D   Shares     Amount   Shares     Amount
Net proceeds from sales of shares   537,081     $ 4,248,405     2,423,925     $ 19,339,739  
Exchanged from associated funds   24,328       190,106     88,814       716,775  
Investment of distributions   34,826       272,219     50,188       399,356  
Total   596,235       4,710,730     2,562,927       20,455,870  
Cost of shares repurchased   (1,060,809 )     (8,303,248 )   (772,159 )     (6,248,172 )
Exchanged into associated funds   (15,115 )     (118,442 )   (34,675 )     (276,958 )
Total   (1,075,924 )     (8,421,690 )   (806,834 )     (6,525,130 )
Increase (decrease)   (479,689 )   $ (3,710,960 )   1,756,093     $ 13,930,740  
Class I   Shares     Amount   Shares     Amount
Net proceeds from sales of shares   12,071     $ 95,062     36,816     $ 293,442  
Exchanged from associated funds   1,750       13,621            
Investment of distributions   116       915     3,226       25,673  
Total   13,937       109,598     40,042       319,115  
Cost of shares repurchased   (2,401 )     (19,076 )   (16,873 )     (133,522 )
Increase   11,536     $ 90,522     23,169     $ 185,593  

28


Notes to Financial Statements (unaudited)

TargETFund Core (continued)                            
    Six Months Ended   Year Ended
    3/31/08   9/30/07
Class R   Shares     Amount   Shares     Amount
Net proceeds from sales of shares   711,551     $ 5,577,456     880,914     $ 7,069,622  
Exchanged from associated funds   15,067       117,132            
Investment of distributions   11,180       84,022     9,613       76,826  
Total   737,798       5,778,610     890,527       7,146,448  
Cost of shares repurchased   (247,754 )     (1,911,198 )   (187,497 )     (1,514,953 )
Exchanged into associated funds             (1,681 )     (13,674 )
Total   (247,754 )     (1,911,198 )   (189,178 )     (1,528,627 )
Increase   490,044     $ 3,867,412     701,349     $ 5,617,821  
 
TargETFund 2015                            
 
Class A   Shares     Amount   Shares     Amount
Net proceeds from sales of shares   274,796     $ 2,294,839     1,417,940     $ 12,319,543  
Exchanged from associated funds   12,012       100,648     50,304       433,697  
Investment of distributions   40,109       337,717     13,207       110,351  
Total   326,917       2,733,204     1,481,451       12,863,591  
Cost of shares repurchased   (302,997 )     (2,512,383 )   (347,994 )     (2,999,250 )
Exchanged into associated funds   (44,329 )     (386,902 )   (44,415 )     (382,670 )
Total   (347,326 )     (2,899,285 )   (392,409 )     (3,381,920 )
Increase (decrease)   (20,409 )   $ (166,081 )   1,089,042     $ 9,481,671  
Class C   Shares     Amount   Shares     Amount
Net proceeds from sales of shares   201,976     $ 1,691,694     860,732     $ 7,275,601  
Exchanged from associated funds   10,155       85,742     82,817       705,973  
Investment of distributions   27,481       230,011     7,500       62,626  
Total   239,612       2,007,447     951,049       8,044,200  
Cost of shares repurchased   (196,095 )     (1,624,896 )   (265,384 )     (2,291,748 )
Exchanged into associated funds   (75,650 )     (592,939 )   (37,748 )     (323,157 )
Total   (271,745 )     (2,217,835 )   (303,132 )     (2,614,905 )
Increase (decrease)   (32,133 )   $ (210,388 )   647,917     $ 5,429,295  
Class D   Shares     Amount   Shares     Amount
Net proceeds from sales of shares   143,461     $ 1,243,962     518,512     $ 4,385,737  
Exchanged from associated funds   18,527       147,183     78,993       680,944  
Investment of distributions   14,681       122,879     4,534       37,916  
Total   176,669       1,514,024     602,039       5,104,597  
Cost of shares repurchased   (288,756 )     (2,402,738 )   (245,922 )     (2,133,871 )
Exchanged into associated funds   (32,098 )     (264,406 )   (5,700 )     (49,704 )
Total   (320,854 )     (2,667,144 )   (251,622 )     (2,183,575 )
Increase (decrease)   (144,185 )   $ (1,153,120 )   350,417     $ 2,921,022  

29



Notes to Financial Statements (unaudited)

TargETFund 2015 (continued)                            
    Six Months Ended   Year Ended
    3/31/08   9/30/07
Class I   Shares     Amount   Shares   Amount
Net proceeds from sales of shares   12,782     $ 107,744     45,502     $ 387,580  
Exchanged from associated funds   1,311       11,090            
Investment of distributions   857       7,247     1,137       9,516  
Total   14,950       126,081     46,639       397,096  
Cost of shares repurchased   (1,489 )     (12,707 )   (32,264 )     (283,011 )
Increase   13,461     $ 113,374     14,375     $ 114,085  
Class R   Shares     Amount   Shares   Amount
Net proceeds from sales of shares   125,831     $ 1,062,433     78,287     $ 693,196  
Exchanged from associated funds   1,561       13,132            
Investment of distributions   1,166       9,806     17       145  
Total   128,558       1,085,371     78,304       693,341  
Cost of shares repurchased   (10,022 )     (77,100 )   (7,156 )     (62,459 )
Exchanged into associated funds   (9,585 )     (73,328 )          
Total   (19,607 )     (150,428 )   (7,156 )     (62,459 )
Increase   108,951     $ 934,943     71,148     $ 630,882  
 
TargETFund 2025                            
 
Class A   Shares     Amount   Shares   Amount
Net proceeds from sales of shares   703,141     $ 6,039,010     1,207,523     $ 10,755,009  
Exchanged from associated funds   94,276       856,862     59,591       517,035  
Investment of distributions   25,433       225,082     6,648       56,529  
Total   822,850       7,120,954     1,273,762       11,328,573  
Cost of shares repurchased   (179,292 )     (1,523,982 )   (277,500 )     (2,488,028 )
Exchanged into associated funds   (18,672 )     (161,810 )   (52,790 )     (449,975 )
Total   (197,964 )     (1,685,792 )   (330,290 )     (2,938,003 )
Increase   624,886     $ 5,435,162     943,472     $ 8,390,570  
Class C   Shares     Amount   Shares   Amount
Net proceeds from sales of shares   189,607     $ 1,641,765     708,094     $ 6,182,584  
Exchanged from associated funds   41,169       371,765     74,099       624,650  
Investment of distributions   15,477       135,575     5,453       46,194  
Total   246,253       2,149,105     787,646       6,853,428  
Cost of shares repurchased   (132,554 )     (1,116,590 )   (228,181 )     (2,012,762 )
Exchanged into associated funds   (23,082 )     (188,659 )   (35,972 )     (321,320 )
Total   (155,636 )     (1,305,249 )   (264,153 )     (2,334,082 )
Increase   90,617     $ 843,856     523,493     $ 4,519,346  

30



Notes to Financial Statements (unaudited)

TargETFund 2025 (continued)                            
    Six Months Ended   Year Ended
    3/31/08   9/30/07
Class D   Shares     Amount   Shares     Amount
Net proceeds from sales of shares   153,292     $ 1,339,760     570,989     $ 4,909,426  
Exchanged from associated funds   6,572       56,392     10,207       84,578  
Investment of distributions   10,337       90,552     3,808       32,293  
Total   170,201       1,486,704     585,004       5,026,297  
Cost of shares repurchased   (265,947 )     (2,209,001 )   (111,947 )     (1,010,717 )
Exchanged into associated funds   (40,134 )     (351,236 )   (38,385 )     (342,881 )
Total   (306,081 )     (2,560,237 )   (150,332 )     (1,353,598 )
Increase (decrease)   (135,880 )   $ (1,073,533 )   434,672     $ 3,672,699  
Class I   Shares     Amount   Shares     Amount
Net proceeds from sales of shares   23,408     $ 205,338     109,258     $ 940,641  
Exchanged from associated funds   1,371       12,180            
Investment of distributions   1,122       9,966     1,647       14,012  
Total   25,901       227,484     110,905       954,653  
Cost of shares repurchased   (35,318 )     (312,586 )   (69,833 )     (618,025 )
Increase (decrease)   (9,417 )   $ (85,102 )   41,072     $ 336,628  
Class R   Shares     Amount   Shares     Amount
Net proceeds from sales of shares   196,139     $ 1,717,422     93,308     $ 828,973  
Exchanged from associated funds   1,073       9,455            
Investment of distributions   1,035       9,118     16       132  
Total   198,247       1,735,995     93,324       829,105  
Cost of shares repurchased   (13,092 )     (115,296 )   (37,186 )     (338,475 )
Increase   185,155     $ 1,620,699     56,138     $ 490,630  
 
TargETFund 2035                            
    Six Months Ended  
10/2/06* to
    3/31/08  
9/30/07
Class A   Shares     Amount   Shares     Amount
Net proceeds from sales of shares   224,541     $ 1,998,651     252,987     $ 2,431,150  
Exchanged from associated funds   1,258       12,063     8,742       79,970  
Investment of distributions   2,955       27,597     15       134  
Total   228,754       2,038,311     261,744       2,511,254  
Cost of shares repurchased   (12,299 )     (110,201 )   (7,441 )     (70,820 )
Exchanged into associated funds   (1,044 )     (10,429 )          
Total   (13,343 )     (120,630 )   (7,441 )     (70,820 )
Increase   215,411     $ 1,917,681     254,303     $ 2,440,434  


* Commencement of operations.

31



Notes to Financial Statements (unaudited)

TargETFund 2035 (continued)                          
 
Six Months Ended
 
10/2/06* to
 
3/31/08
 
9/30/07
Class C Shares     Amount   Shares   Amount
Net proceeds from sales of shares 38,654         $ 365,156               104,534         $ 972,870  
Exchanged from associated funds 2,347       21,000     3,589       33,874  
Investment of distributions 993       9,235     70       611  
Total 41,994       395,391     108,193       1,007,355  
Cost of shares repurchased (1,955 )     (18,821 )   (2,094 )     (20,124 )
Increase 40,039     $ 376,570     106,099     $ 987,231  
Class D Shares     Amount   Shares   Amount
Net proceeds from sales of shares 43,473     $ 412,769     14,844     $ 137,005  
Exchanged from associated funds           9,646       90,770  
Investment of distributions 355       3,304     4       32  
Total 43,828       416,073     24,494       227,807  
Cost of shares repurchased (2,080 )     (18,938 )   (952 )     (8,830 )
Increase 41,748     $ 397,135     23,542     $ 218,977  
Class I Shares     Amount   Shares   Amount
Net proceeds from sales of shares 22,147     $ 218,588     25,349     $ 228,081  
Exchanged from associated funds 395       3,691            
Investment of distributions           56       492  
Total 22,542       222,279     25,405       228,573  
Cost of shares repurchased (14,072 )     (119,240 )   (5,388 )     (52,382 )
Increase 8,470     $ 103,039     20,017     $ 176,191  
Class R Shares     Amount   Shares   Amount
Net proceeds from sales of shares 91,129     $ 819,655     6,938     $ 65,525  
Exchanged from associated funds 316       2,951            
Investment of distributions           5       43  
Total 91,445       822,606     6,943       65,568  
Cost of shares repurchased (9,848 )     (83,688 )          
Exchanged into associated funds (8 )     (67 )          
Total (9,856 )     (83,755 )          
Increase 81,589     $ 738,851     6,943     $ 65,568  
 
* Commencement of operations.                          

32



Notes to Financial Statements (unaudited)

TargETFund 2045                          
 
Six Months Ended
 
10/2/06* to
 
3/31/08
 
9/30/07
Class A
Shares
        Amount             Shares   Amount
Net proceeds from sales of shares 200,707     $ 1,786,653     139,786         $ 1,339,030  
Exchanged from associated funds 3,545       32,666     24,278       221,975  
Investment of distributions 1,823       17,025     29       251  
Total 206,075       1,836,344     164,093       1,561,256  
Cost of shares repurchased (25,029 )     (217,840 )   (4,946 )     (49,159 )
Exchanged into associated funds           (21,515 )     (203,959 )
Total (25,029 )     (217,840 )   (26,461 )     (253,118 )
Increase 181,046    
$
1,618,504     137,632     $ 1,308,138  
Class C
Shares
    Amount   Shares   Amount
Net proceeds from sales of shares 4,078     $ 37,882     36,294     $ 345,424  
Exchanged from associated funds 3,945       33,658     2,819       27,171  
Investment of distributions 326       3,030     4       32  
Total 8,349       74,570     39,117       372,627  
Cost of shares repurchased (3,016 )     (27,428 )   (2 )     (19 )
Increase 5,333     $ 47,142     39,115     $ 372,608  
Class D
Shares
    Amount   Shares   Amount
Net proceeds from sales of shares 63,377     $ 598,624     18,997     $ 178,929  
Exchanged from associated funds 149       1,500     6,516       60,225  
Investment of distributions 325       3,024     3       32