Welcome To OneAmerica Funds

A Message From The Fund President

Welcome to the OneAmerica Funds website. OneAmerica Funds, Inc. has been in operation since 1989 and currently offers five portfolios: Value, Money Market, Investment Grade Bond, Asset Director and Socially Responsive. This website includes financial information, prospectuses and annual reports for each portfolio as well as insights from each portfolio's investment managers. I trust that you will find this information useful as you review your investments.

Although 2012 began on an optimistic note, by the second quarter investors adopted a more cautious stance. Contagion risk from a broader deterioration in Europe continued to plague our investment markets. In addition, the United States is facing its own fiscal crisis. The U.S. economy continued to grow over the reporting period, but at a relatively sluggish pace. Unfortunately, a substantial fiscal austerity program will commence in January 2013. Barring any significant legislation from Congress, this drag could be sufficient to push our U.S. economy into a recession.

The Federal Reserve has responded by maintaining an accommodative monetary policy. They recently announced they would extend “Operation Twist” through the end of 2012 and would keep short-term rates near zero through late 2014. Chairman Bernanke also emphasized the downside risks to the economic outlook and confirmed the Fed’s willingness to take further action as appropriate.

As we progressed through the first half of the year, there was a marked shift in investor sentiment. We started off the year with the strongest first quarter performance for the S&P 500 since 1998. However, investors became more pessimistic during the second quarter. Despite second quarter weakness, this index still advanced 9.5 percent during the first six months of the year.

Renewed anxiety about the potential contagion in Europe also impacted the fixed income markets. Increased risk aversion caused 10-year Treasury yields to fall to their all-time lows. Meanwhile, credit spreads narrowed somewhat during the first half of the year, although they remained wider than their long-term averages.

As we move into the second half of 2012, investors will be closely watching for any indication that U.S. economic growth is deteriorating. Investors are also aware that Europe’s fiscal issues are far from resolved. Until such time the market is provided with improved clarity on these issues, investor sentiment may change frequently, causing potential disruptions to financial markets.

Investment performance for each portfolio in OneAmerica Funds, Inc. for the first half of 2012 has been listed below.

Portfolio	Class O	Advisor Class
Value Portfolio	5.9%	5.7%
Money Market Portfolio	0.0%	0.0%
Investment Grade Bond Portfolio	2.4%	2.3%
Asset Director Porfolio	5.0%	4.9%
Socially Responsive Portfolio	5.0%	4.8%

Performance numbers for the OneAmerica portfolios are net of investment advisory fees and other expenses paid by each portfolio, but do not reflect specified contract, mortality and expense risk charges.

As always, I am grateful for the confidence you have placed in us and your continued investment in OneAmerica Funds, Inc.

J. Scott Davison
President
OneAmerica Funds, Inc.

August 10, 2012