Combined semi-annual report for
Marketvest Equity Fund
Marketvest Pennsylvania Intermediate
Municipal Bond Fund
Marketvest Short-Term Bond Fund
Marketvest Intermediate U.S.
Government Bond Fund
-------------------
AUGUST 1996
[LOGO OF MARKETVEST FUNDS]
Table of Contents
- --------------------------------------------------------------------------------
PRESIDENT'S MESSAGE........................................................ 1
- --------------------------------------------------------------------------------
INVESTMENT REVIEWS......................................................... 2
- --------------------------------------------------------------------------------
PORTFOLIOS OF INVESTMENTS.................................................. 9
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES....................................... 28
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS................................................... 29
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS........................................ 30
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS....................................................... 32
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS.............................................. 34
- --------------------------------------------------------------------------------
DIRECTORS/TRUSTEES AND OFFICERS............................................ 38
- --------------------------------------------------------------------------------
President's Message
Dear Shareholder:
I am pleased to present the first Semi-Annual Report of the Marketvest Group of
Funds.
On the following pages, you will find complete financial information for your
Marketvest fund investment, including discussions with the portfolio managers, a
list of fund holdings, and the financial statements.
Please note that this report covers the five-month period from April 1,
1996--the date of initial public investment in the funds--through August 31,
1996. With that in mind, it is important to remember that the true measure of
fund performance is over the long term.
Each fund is managed by experts at Dauphin Deposit Bank and Trust Company to
bring you and other shareholders professionally managed, diversified investment
opportunities from key financial markets. I suggest that you take time to review
this report and familiarize yourself with your fund's strategy and holdings.
And, remember to keep focused on the long term.
Thank you for selecting the Marketvest Group of Funds to pursue your financial
goals. You have our commitment to keep you up-to-date on a regular basis through
the highest level of service.
Sincerely,
Edward C. Gonzales
President
September 15, 1996
1
Investment Reviews
MARKETVEST EQUITY FUND
Q
After an extremely rewarding, almost euphoric 1995, the stock market
experienced a degree of volatility in 1996. What is your comment on the
market's direction this year?
A
We are maintaining a strategy to reflect an underweighting in consumer
non-durables and the interest rate-sensitive sectors. Selective
capital-intermediate goods issues and technology representation remain
overweighted, while the energy sector level is approximately the same as the
Standard & Poor's 500 Index ("S&P 500")* weighting.
Within our philosophy to buy and hold stocks selling at discount valuation
levels, we overweight and underweight selective groups based on our evaluation
of their ability to perform on a market value basis relative to the S&P 500.
We have expected that volatility would result from many divergent political and
economic cross-currents as we progress through 1996. On May 8, 1996, for the
first time ever, the New York Stock Exchange's** so-called "fifty-point circuit
breaker system," which constrains program trading, was triggered both going down
and going up, on the same day. On July 16, 1996, the S&P 500 plunged to an
intraday low of 606, down from the 670 level on June 28, 1996. This volatility
is not unexpected. When coupled with a higher interest rate theme, and a stock
market that has not experienced a down year since 1990, a corrective phase
within an extended bull market is not an unexpected scenario.
Q
Marketvest Equity Fund is managed to pursue long-term growth opportunities
by focusing on value stocks, which appear to be selling for less than their
"true" worth. Can you review your process for selecting these stocks?
A
Our equity selection process and portfolio management focus is
"value-driven." We quantify "value" as the relationship between the current
price of an issue and the company's future earnings prospects. Our goal is
to buy and hold securities that are attractively priced relative to prospective
earnings and the overall market. Some of the screening processes used in
implementing this strategy include: identifying issues with below-average
price/earnings ratios and price/book values. Dividend returns are typically
above the peer group, with the ability to continue future procession of dividend
increases. Long-term debt of issuers is invariably less than 50% of total
capitalization.
* Standard & Poor's 500 Index is an unmanaged broad-based index measuring
changes in stock market conditions based on the average performance of 500
widely held common stocks. Investments cannot be made in an index.
** The New York Stock Exchange Composite or Component Indices are unmanaged
indices of all industrial, utilities, transportation, and finance stocks
listed on the New York Stock Exchange. Investments cannot be made in an
index.
2
Can you single out and comment on a few of the fund's holdings that
exemplify this approach?
A
Mobil Corp., Dow Chemical Co., Tenneco Inc., would be a few examples of the
types of issues currently held in the portfolio.
Q
Considering the current level of stock prices, where are you finding value
in the market?
A
With the equity market at current lofty levels (the S&P 500 is at 665), we
have been finding it increasingly more difficult to identify a
broad-spectrum of issues that qualify as buy candidates within our
screening register. We have, however, been able to qualify selective issues
within the capital- intermediate goods area and some companies in the technology
sector that reflect the necessary qualifications to be identified as "buys."
Q
What is your outlook for stocks as we enter the second half of 1996?
A
As we move through the balance of 1996, we will likely experience periods
of continued volatility, in our opinion. The sharp July 1996 downside
consolidation has already more than washed-out many of the excesses that
became so obvious within the technology-dominated NASDAQ.*** This index was
positive 12.9% for the April and May of 1996 periods, compared with 4.1% for the
S&P 500. Obviously, speculation was at a very high pitch. This action often
precedes and/or signals the topping phase of a maturing bull market. While we
would not be surprised by a regulation of upside momentum over the short-term,
it is our assumption that between now and February 1997, the stock market will
likely experience a more noteworthy corrective phase than we have witnessed in
recent months.
*** National Association of Securities Dealers Automated Quotations system
(NASDAQ) is a computerized system that provides brokers and dealers with
price quotations for securities traded over the counter as well as for many
New York Stock Exchange listed securities. Investments cannot be made in an
index.
3
Marketvest Pennsylvania Intermediate Municipal Bond Fund
Q
How have municipal bonds fared in 1996?
A
Municipal bond rates increased through 1996, though not to the degree of
the taxable bond market. The average increase across the municipal yield
curve is approximately 30 basis points since the beginning of 1996.
Overall, the municipal market has outperformed the taxable bond market
throughout the year.
Demand for tax-free bonds continues to exceed supply, giving strength to prices
and downward pressure on rates. As a response, the fund has lengthened duration
and average life in an effort to increase yield and total return.
Q
Has the issue of tax reform, which has gained particular prominence amid
presidential election campaigning, impacted the municipal bond market?
A
Tax reform, particularly the question of a flat federal income tax rate,
caused a stir in the municipal markets this year. The uncertainty of tax
rates and brackets in the future led many investors to be hesitant to
purchase longer-term tax-free securities. The reduction in demand put pressure
on prices and moderately increased yield. The fund recognized this as a buying
opportunity, locking in higher yields.
Q
Marketvest Pennsylvania Intermediate Municipal Bond Fund helps state
residents earn double-tax-free income* by investing primarily in high-grade
Pennsylvania municipal securities with an average maturity of three to ten
years. What is your current target for the fund's average maturity, and what
does this area of the municipal yield curve offer investors?
A
The fund's current average life of 6.72 years and modified duration of 5.2
years seeks to offer the investor a balance between attractive yields and
relative price stability. Throughout 1996, we have continued to move out
the yield curve to offer investors higher current income potential. The fund has
been an active buyer in the 10-15 year maturity range and plans to continue with
this strategy.
Q
What particular factors shaped your investment strategy for the fund over
the reporting period?
A
Supply of tax-free issues dominated the municipal markets over the last
several months. With attractive yields on the longer end, the fund locked
in larger trading positions and extended its average maturity. Our overall
confidence in the market has rewarded investors with an improved income stream.
* Income may be subject to the federal alternative minimum tax.
4
Marketvest Short-Term Bond Fund
Q
After a positive economic environment for bonds in 1995, the market was
adversely impacted by rising rates early in 1996. With 1996 past its
midpoint, what is your brief review of the economy and its impact on the
short-term bond market?
A
As we entered 1996, there was a general expectation of weak economic growth
and subdued inflation. This perception was underscored as the Federal
Reserve Board (the "Fed") lowered the Fed Funds rate at the end of January
1996 to 5.25%. February 1996 brought surprising evidence that the economy was in
fact strengthening, leading to popular perception expecting the Fed to tighten
rates. The bond market declined substantially in this environment, with long
maturities especially hard hit. Even short maturities were affected, as the
yield of the 2-year U.S. Treasury Note rose from this past January's low of
4.94% to 5.46% in February 1996. Further support of economic growth appeared in
April and May of 1996 leading to additional pressure on the bond market. By the
end of June 1996, the 2-year Treasury Note yield stood at 6.12%. While the spike
in interest rates provided an opportunity to invest in securities with
unexpectedly high yields, existing positions were depressed in value by the
upward movement of rates.
Q
Marketvest Short-Term Bond Fund gives shareholders a relatively
conservative way to pursue income because it invests primarily in U.S.
government securities with an average maturity of one to three years. Can
you describe the fund's advantages compared to money market funds and
longer-term bond funds?
A
Money market funds, with average lives of 30-45 days, offer the investor a
non-fluctuating value instrument.* In return for safety of principal, the
investor receives a lower yield than available with longer-term bonds.
Moving beyond money market funds into bond funds adds the opportunity for higher
yields with corresponding higher risk. The fund's value changes daily based on
changes in interest rates, market conditions, economic news, and on the quality
and maturity of the underlying securities. An inverse relationship exists
between interest rates and prices of bonds; as interest rates increase, the
value of the underlying securities decreases, and vice versa. Also, longer
maturities normally offer higher yields than shorter maturities (credit quality
being the same). On the downside, the change in value due to movements in
interest rates is amplified with longer maturities, when compared to shorter
maturities. The Marketvest Short-Term Bond Fund, with an average life of one to
three years, is designed to pursue a higher yield than is available from money
market funds, but with less fluctuation of principal value when compared to a
long-term bond fund.
* Although money market funds seek to maintain a stable net asset value per
share, there is no assurance that they will be able to do so. An investment in
money market funds is neither insured nor guaranteed by the U.S. government.
5
Q
How were the fund's total investments allocated at the end of the reporting
period and why?
A
The allocations were as follows:
<TABLE>
<S> <C>
U.S. Treasury Notes 26.5%
U.S. Government Agencies 37.0%
Mortgage Backed Securities 3.7%
Corporate Bonds 28.7%
Short Term Cash Equivalents 4.1%
</TABLE>
The liquid aspect of the Treasury Notes and Government Agency issues provide the
opportunity to rebalance the portfolio as conditions warrant. The corporate bond
and mortgage-related issues add incremental value from an income aspect.
Q
What is your outlook for interest rates for the balance of 1996, and do you
anticipate making any portfolio adjustments in response?
A
For the balance of 1996, we anticipate that the Fed will be on hold due to
the upcoming Presidential election. Unless inflationary trends signal a
change in investor sentiment, we will maintain our neutral stance to our
index and search for issues offering a yield advantage.
6
Marketvest Intermediate U.S. Government Bond Fund
Q
With 1996 past its midpoint, what is your brief review of the economy and
its impact on the intermediate-term government bond market?
A
Interest rates in the government bond sector have risen throughout 1996.
The intermediate portion of the yield curve has seen an increase of over
100 basis points through mid-year. This has translated into an opportunity
to purchase higher coupons and deliver more attractive income potential.
However, price volatility remains a major concern in the market. Speculation
continues that a rate increase may be in the offing before year end.
Q
Marketvest Intermediate U.S. Government Bond Fund invests primarily in U.S.
government securities with an average maturity of three to ten years. What
is your current target for the fund's average maturity, and what does this
area of the yield curve offer investors?
A
The fund's current average life is 4.45 years and has a modified duration
of 3.33 years. This is a defensive stance and remains neutral to the
market. The volatility of this portion of the yield curve can be daunting,
particularly when short-term rates increase without corresponding movement in
longer-term issues. However, higher current yields in the Treasury and Agency
markets allow investors to increase yield potential while incurring reduced
credit risk.
Q
How were the fund's total investments allocated among Treasury, Agency and
Corporate bonds at the end of the period and why?
A
The allocation is:
<TABLE>
<S> <C>
Treasuries 60.7%
Agencies 29.1%
Mortgages 0.8%
Corporate 8.2%
Cash Equivalents 1.2%
</TABLE>
Our limited exposure to the Corporate markets reflects a concern over small
differences in spread relative to the Government markets and their greater
credit quality. The Agency sector, however, can offer higher yields without
sacrificing much in credit quality, leading the fund to increase its weighting
there.
7
Q
What is your outlook for rates through the rest of 1996, and do you
anticipate making any major portfolio adjustments in response?
A
With a Presidential election in the offing, we believe a defensive position
is appropriate. Recent activity by the Federal Reserve Board reflects their
comfort with inflation statistics and interest rates, yet there is still a
measure of doubt about the strength of the economy. With this in mind, we will
continue to add to the Treasury, Agency and Mortgage-Backed sectors, balancing
high, current yields with minimal credit risk.
8
MARKETVEST GROUP OF FUNDS
Portfolios of Investments August 31, 1996 (unaudited)
MARKETVEST EQUITY FUND
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS91.7%
Capital & Intermediate
Goods22.3%
Aerospace4.1%
48,200 Lockheed Martin Corp. $ 4,054,825
95,900 Raytheon Co. 4,938,850
108,100 Rockwell International
Corp. 5,621,200
36,600 United Technologies Corp. 4,126,650
-----------
Total 18,741,525
-----------
Chemicals5.0%
73,400 Dow Chemical Co. 5,853,650
77,600 Du Pont (E.I.) de Nemours
& Co. 6,372,900
171,000 Monsanto Co. 5,493,375
107,800 PPG Industries, Inc. 5,322,625
-----------
Total 23,042,550
-----------
Diversified/Miscellaneous
3.5%
53,000 Allied-Signal, Inc. 3,272,750
141,700 Pentair, Inc. 3,861,325
41,300 TRW, Inc. 3,820,250
103,300 Tenneco, Inc. 5,139,175
-----------
Total 16,093,500
-----------
Electrical Equipment1.8%
52,900 Emerson Electric Co. 4,430,375
45,900 General Electric Co. 3,815,438
-----------
Total 8,245,813
-----------
Machinery &
Equipment2.0%
116,900 Deere & Co. 4,646,775
101,700 Ingersoll-Rand Co. 4,347,675
-----------
Total 8,994,450
-----------
Manufacturing/
Distribution1.1%
70,300 Johnson Controls, Inc. 4,956,150
-----------
Mining/Metals1.8%
135,200 Alcan Aluminum Ltd. 4,241,900
64,400 Phelps Dodge Corp. 3,896,200
-----------
Total 8,138,100
-----------
<CAPTION>
Shares Value
<C> <S> <C>
Paper/Forest
Products3.0%
112,000 International Paper Co. $ 4,480,000
62,600 Kimberly-Clark Corp. 4,906,275
101,500 Weyerhaeuser Co. 4,529,438
-----------
Total 13,915,713
-----------
TOTAL CAPITAL &
INTERMEDIATE GOODS 102,127,801
-----------
Consumer ProductsNon
Durable26.2%
Beverages2.6%
86,700 Anheuser-Busch Cos., Inc. 6,567,524
189,600 PepsiCo, Inc. 5,451,000
-----------
Total 12,018,524
-----------
Cosmetics1.1%
121,900 Tambrands, Inc. 5,180,750
-----------
Drugs2.7%
80,300 (a)Amgen, Inc. 4,677,475
20,000 Merck & Co., Inc. 1,312,500
77,500 Mylan Laboratories, Inc. 1,269,063
87,100 Schering Plough Corp. 4,866,713
-----------
Total 12,125,751
-----------
Food1.8%
266,445 Archer-Daniels-Midland
Co. 4,729,396
116,000 Heinz (H.J.) Co. 3,654,000
-----------
Total 8,383,396
-----------
Health Care3.6%
67,900 Abbott Laboratories 3,063,988
117,200 American Home Products
Corp. 6,944,099
75,400 Bristol-Myers Squibb Co. 6,616,350
-----------
Total 16,624,437
-----------
Household Products3.1%
52,500 Clorox Co. 4,915,313
46,900 Colgate-Palmolive Co. 3,810,625
38,000 Unilever N.V., ADR 5,453,000
-----------
Total 14,178,938
-----------
Houseware/Home
Furnishings1.2%
177,000 Newell Co. 5,509,125
-----------
</TABLE>
(See Notes to Portfolio of Investments)
9
MARKETVEST EQUITY FUND (continued)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
Medical Equipment/
Supplies2.8%
131,000 Bausch & Lomb, Inc. $ 4,339,375
112,800 Baxter International,
Inc. 5,033,700
96,800 Diagnostic Products Corp. 3,593,700
-----------
Total 12,966,775
-----------
Merchandise-Mass1.9%
88,600 Penney (J.C.) Co., Inc. 4,684,725
152,400 Wal-Mart Stores, Inc. 4,038,600
-----------
Total 8,723,325
-----------
Publishing/Printing2.1%
75,400 Dunn & Bradstreet Corp. 4,344,925
75,300 Gannett Co., Inc. 5,045,100
-----------
Total 9,390,025
-----------
Restaurant1.3%
127,600 McDonald's Corp. 5,917,450
-----------
Retailers0.9%
89,300 May Department Stores Co. 4,063,150
-----------
Textiles1.1%
84,800 V.F. Corp. 4,982,000
-----------
Total Consumer Products
Non Durable 120,063,646
-----------
Consumer Products
Durable4.6%
Automobile Manufacturer
1.4%
48,000 Chrysler Corp. 1,398,000
150,200 Ford Motor Co. 5,031,700
-----------
Total 6,429,700
-----------
Appliances/Furnishing0.9%
85,900 Whirlpool Corp. 4,209,100
-----------
Automobile Parts0.6%
49,100 Eaton Corp. 2,718,913
-----------
Hardware/Tools0.6%
61,600 Snap-On Tools Corp. 2,810,500
-----------
Tire/Rubber1.1%
107,800 Goodyear Tire & Rubber
Co. 4,918,375
-----------
Total Consumer Products
Durable 21,086,588
-----------
<CAPTION>
Shares Value
<C> <S> <C>
Energy7.7%
Domestic Oils3.3%
47,100 Atlantic Richfield Co. $ 5,498,925
217,800 Occidental Petroleum
Corp. 5,063,850
182,800 Sun Co., Inc. 4,318,650
-----------
Total 14,881,425
-----------
International Oils3.4%
80,900 Amoco Corp. 5,582,100
47,300 Exxon Corp. 3,849,038
56,300 Mobil Corp. 6,347,824
-----------
Total 15,778,962
-----------
Oil Services1.0%
150,400 Dresser Industries, Inc. 4,361,600
-----------
Total Energy 35,021,987
-----------
Interest Sensitive12.4%
Banks-Money Center1.9%
52,600 Bankers Trust New York
Corp. 4,089,650
54,900 Citicorp 4,570,425
-----------
Total 8,660,075
-----------
BanksReg2.9%
108,460 BancOne Corp. 4,162,153
72,500 Barnett Banks, Inc. 4,757,813
114,500 Norwest Corp. 4,308,063
-----------
Total 13,228,029
-----------
Insurance1.1%
43,000 CIGNA Corp. 4,993,375
-----------
Misc(Financial Svs)0.5%
75,000 Federal National Mortgage
Association 2,325,000
-----------
UtilitiesGas3.0%
162,000 Panenergy Corp. 5,366,250
90,200 Questar Corp. 3,269,750
109,200 Williams Cos., Inc. (The) 5,446,350
-----------
Total 14,082,350
-----------
UtilitiesTelephone3.0%
127,000 BellSouth Corp. 4,603,750
117,500 GTE Corp. 4,626,563
40,600 SBC Communications, Inc. 1,892,975
84,700 U.S. West, Inc. 2,498,650
-----------
Total 13,621,938
-----------
TOTAL INTEREST SENSITIVE 56,910,767
-----------
</TABLE>
(See Notes to Portfolio of Investments)
10
MARKETVEST EQUITY FUND (continued)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
Technology17.7%
Electronics2.5%
104,700 Avnet, Inc. $ 4,894,725
148,000 Hewlett-Packard Co. 6,474,999
-----------
Total 11,369,724
-----------
EDP & Office Equipment
6.8%
125,600 (a)Compaq Computer Corp. 7,112,099
123,000 (a)Dell Computer Corp. 8,256,375
40,600 International Business
Machines Corp. 4,643,625
110,500 (a)Seagate Technology,
Inc. 5,304,000
107,100 Xerox Corp. 5,877,113
-----------
Total 31,193,212
-----------
Mini Computers0.5%
100,000 Micron Technology, Inc. 2,275,000
-----------
Semi-Conductors/
Related4.9%
91,300 Intel Corp. 7,286,880
272,000 (a)LSI Logic Corp. 5,950,000
94,200 Motorola, Inc. 5,027,925
88,100 Texas Instruments, Inc. 4,118,675
-----------
Total 22,383,480
-----------
Software & Services1.2%
106,350 Computer Associates
International, Inc. 5,583,375
-----------
Tele-Communication1.8%
66,700 AT&T Corp. 3,501,750
115,700 Sprint Corp. 4,700,313
-----------
Total 8,202,063
-----------
TOTAL TECHNOLOGY 81,006,854
-----------
Transportation0.8%
Railroads0.8%
42,500 Burlington Northern Santa
Fe 3,400,000
-----------
TOTAL COMMON STOCKS
(IDENTIFIED COST
$393,761,431) 419,617,643
-----------
<CAPTION>
Principal
Amount Value
<C> <S> <C>
(b)REPURCHASE
AGREEMENT8.1%
$36,932,610 Bear, Stearns and Co.,
5.20%, dated 8/30/1996,
due 9/3/1996 (at amor-
tized cost) $36,932,610
-----------
TOTAL INVESTMENTS
(IDENTIFIED COST
$430,694,041) $456,550,253
-----------
-----------
</TABLE>
(See Notes to Portfolio of Investments)
11
MARKETVEST PENNSYLVANIA INTERMEDIATE
MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
Principal Credit
Amount Rating(c) Value
<C> <S> <C> <C>
LONG-TERM
MUNICIPAL
SECURITIES97.0%
Pennsylvania96.0%
$1,790,000 Allegheny County, PA,
HDA, Refunding Revenue
Bonds, 5.70% (Magee
Womens Hos-
pital)/(Original Issue
Yield: 5.85%),
10/1/2001 AAA $ 1,860,218
1,340,000 Allegheny County, PA,
HDA, Revenue Bonds,
4.70% (University of
Pittsburgh Medical
Center)/(MBIA INS)/
(Original Issue Yield:
4.75%), 12/1/2004 AAA 1,295,399
2,000,000 Allegheny County, PA,
HDA, Revenue Bonds,
4.80% (University of
Pittsburgh Medical
Center)/(MBIA INS)/
(Original Issue Yield:
4.85%), 12/1/2005 AAA 1,934,544
1,000,000 Allegheny County, PA,
Institution District,
UT GO Refunding Bonds
(Series 18), 6.60%
(MBIA INS), 4/1/1998 AAA 1,036,875
1,000,000 Allegheny County, PA,
Institution District,
UT GO Refunding Bonds
(Series 18), 6.70%
(MBIA INS), 4/1/1999 AAA 1,055,092
1,000,000 Allegheny County, PA,
UT GO Bonds (Series
C-36), 6.375%,
12/1/1997 AA 1,030,458
3,000,000 Allegheny County, PA,
UT GO Refunding Bonds
(Series C-42), 4.60%
(Original Issue Yield:
4.65%), 10/1/2003 AA 2,946,540
<CAPTION>
Principal Credit
Amount Rating(c) Value
<C> <S> <C> <C>
$1,175,000 Allentown, PA, Water,
UT GO Revenue Bonds,
4.60% (Allentown, PA,
Water GTD)/(FGIC INS)/
(Original Issue Yield:
4.65%), 10/15/2003 AAA $ 1,151,186
1,225,000 Allentown, PA, UT GO
Refunding Bonds, 4.80%
(FGIC INS)/ (Original
Issue Yield: 4.85%),
10/15/2005 AAA 1,196,635
1,595,000 Bangor, PA, Area School
District, GO UT Bonds,
5.35%, (FGIC INS)/
Original Issue Yield:
5.45%), 9/1/2010 AAA 1,579,879
1,085,000 Beaver County, PA, UT
GO Bonds, 5.80% (United
States Treasury
COL)/(FGIC INS)/
(Original Issue Yield:
5.90%), 12/1/2001 AAA 1,108,689
1,390,000 Bensalem Township, PA,
GO UT Bonds, 5.55%
(FGIC INS),
12/1/2010 AAA 1,385,135
1,015,000 Bensalem Township, PA,
GO UT Bonds, 5.70%
(FGIC INS),
12/1/2012 AAA 1,016,025
1,800,000 Berks County, PA, GO UT
Refunding Bonds (Second
Series), 4.90% (FGIC
INS)/(Original Issue
Yield: 5.00%),
5/15/2007 AAA 1,745,885
1,000,000 Berks County, PA, UT GO
Bonds, 5.55% (United
States Treasury
COL)/(FGIC INS),
11/15/1999 AAA 1,033,383
</TABLE>
(See Notes to Portfolio of Investments)
12
MARKETVEST PENNSYLVANIA INTERMEDIATE
MUNICIPAL BOND FUND (continued)
<TABLE>
<CAPTION>
Principal Credit
Amount Rating(c) Value
<C> <S> <C> <C>
Pennsylvaniacontinued
$1,450,000 Bethel Park, PA, School
District, UT GO
Refunding Bonds, 4.90%
(State Aid Withholding
GTD)/(FGIC
INS)/(Original Issue
Yield: 4.95%), 8/1/2002 AAA $ 1,459,564
1,000,000 Bethel Park, PA, School
District, UT GO
Refunding Bonds, 5.25%
(FGIC INS),
8/1/1999 AAA 1,022,461
1,000,000 Bethlehem, PA, Area
School District, GO UT
Bonds, 5.70% (MBIA
INS), 3/1/2009 AAA 1,019,092
1,000,000 Bethlehem, PA, Area
School District, GO UT
Bonds, 5.75% (MBIA
INS)/(Original Issue
Yield: 5.80%), 3/1/2010 AAA 1,016,828
1,545,000 Bethlehem, PA, Area
School District, GO UT
Bonds, 5.80% (MBIA
INS)/(Original Issue
Yield: 5.80%), 3/1/2011 AAA 1,570,942
1,635,000 Bethlehem, PA, Area
School District, GO UT
Bonds, 5.85% (MBIA
INS)/(Original Issue
Yield: 5.90%), 3/1/2012 AAA 1,658,786
1,000,000 Bethlehem, PA, Area
School District, UT GO
Bonds, 6.35% (United
States Treasury COL)/
(AMBAC INS), 9/ 1/1999 AAA 1,058,327
1,000,000 Bucks County, PA, UT GO
Bonds, 5.15% (Original
Issue Yield: 5.20%),
5/1/2004 AA 1,011,927
<CAPTION>
Principal Credit
Amount Rating(c) Value
<C> <S> <C> <C>
$1,000,000 Bucks County, PA, UT GO
Refunding Bonds (Series
A), 5.60%,
3/1/1998 AA $ 1,019,305
1,000,000 Bucks County, PA,
Technical School
Authority, Revenue
Bonds, 5.00% (AMBAC
INS), 8/15/2006 AAA 981,537
1,000,000 Central Bucks, PA,
School District, UT GO
Refunding Bonds, 6.30%,
2/1/2000 NR 1,054,471
3,045,000 Chester County, PA,
HEFA, Refunding Rev-
enue Bonds, 5.30% (Main
Line Health Sys-
tems)/(MBIA INS)/
(Original Issue Yield:
5.40%), 5/15/2007 AAA 3,020,217
965,000 Chester County, PA,
HEFA, Refunding Rev-
enue Bonds, 5.50%
(Chester County Hos-
pital, PA)/(MBIA INS)/
(Original Issue Yield:
5.70%), 7/1/2007 AAA 974,737
1,040,000 Chester County, PA, UT
GO Refunding Bonds,
4.85%, 12/15/2001 NR 1,049,101
1,000,000 Clinton County, PA,
Solid Waste Authority,
Revenue Bonds, 6.45%
(Clinton County, PA
Solid Waste Authority
GTD)/(AMBAC INS)/
(Original Issue Yield:
6.50%), 11/1/2001 AAA 1,047,174
1,000,000 Commonwealth of
Pennsylvania, GO UT
Bonds (Second Series
A), 6.875% (United
States Treasury PRF),
11/1/1999 (@101.5) AAA 1,084,077
</TABLE>
(See Notes to Portfolio of Investments)
13
MARKETVEST PENNSYLVANIA INTERMEDIATE
MUNICIPAL BOND FUND (continued)
<TABLE>
<CAPTION>
Principal Credit
Amount Rating(c) Value
<C> <S> <C> <C>
Pennsylvaniacontinued
$1,000,000 Commonwealth of
Pennsylvania, GO UT
Bonds (Second Series
A), 6.875% (United
States Treasury PRF),
11/1/1999 (@101.5) AAA $ 1,085,315
2,000,000 Commonwealth of
Pennsylvania, GO UT
Bonds (Series A),
5.80%, 11/15/2000 AA- 2,094,614
1,000,000 Commonwealth of
Pennsylvania, GO UT
Bonds (Third Series A),
6.50%, 10/15/1999 AA- 1,018,211
4,000,000 Commonwealth of
Pennsylvania, GO UT
Bonds, 5.375% (FGIC
INS), 5/15/2004 AAA 4,101,104
1,000,000 Commonwealth of
Pennsylvania, GO UT
Refunding Bond (Second
Series), 5.00% (MBIA
INS)/(Original Issue
Yield: 5.05%),
6/15/2002 AAA 1,011,448
1,000,000 Commonwealth of
Pennsylvania, GO UT
Refunding Bonds (First
Series A), 6.60%,
6/1/1999 AA- 1,056,364
3,000,000 Commonwealth of
Pennsylvania, GO UT
Refunding Bonds (First
Series), 4.80%
(Original Issue Yield:
4.85%),
4/15/2001 AA- 3,012,180
2,000,000 Commonwealth of
Pennsylvania, GO UT
Refunding Bonds (First
Series), 5.00%
(Original Issue Yield:
5.10%),
5/1/2003 AA- 2,011,124
<CAPTION>
Principal Credit
Amount Rating(c) Value
<C> <S> <C> <C>
$3,500,000 Commonwealth of
Pennsylvania, GO UT
Refunding Bonds (Sec-
ond Series), 4.75%
(MBIA INS), 6/15/1999 AAA $ 3,529,799
2,000,000 Commonwealth of
Pennsylvania, GO UT
Refunding Bonds (Sec-
ond Series), 5.30%
(Original Issue Yield:
5.40%), 7/1/1999 AA- 2,047,376
1,000,000 Commonwealth of
Pennsylvania, GO UT
Refunding Bonds (Sec-
ond Series), 5.40%
(Original Issue Yield:
5.50%), 7/1/2000 AA- 1,029,545
5,000,000 Commonwealth of
Pennsylvania, GO UT
Refunding Bonds, 5.375%
(FGIC INS),
11/15/2007 AAA 5,000,000
1,000,000 Cumberland Valley, PA,
School District, UT GO
Bonds, 6.50%, 9/1/2000 NR 1,008,987
1,000,000 Dauphin County, PA,
Hospital Authority,
Revenue Bonds, 4.60%
(Polyclinic Center
Project)/(MBIA INS),
8/15/2002 AAA 987,175
2,000,000 Dauphin County, PA,
Monthly VRDNs (AMBAC
INS) AAA 2,002,986
2,000,000 Dauphin County, PA,
4.70% (AMBAC INS),
6/1/2026 AAA 2,000,000
1,470,000 Dauphin County, PA, GO
UT Bonds, 4.75% (AMBAC
INS),
6/1/2026 AAA 1,486,335
</TABLE>
(See Notes to Portfolio of Investments)
14
MARKETVEST PENNSYLVANIA INTERMEDIATE
MUNICIPAL BOND FUND (continued)
<TABLE>
<CAPTION>
Principal Credit
Amount Rating(c) Value
<C> <S> <C> <C>
Pennsylvaniacontinued
$5,295,000 Dauphin County, PA,
Revenue Bonds (Sub-
seriesGGG), 5.00%
(AMBAC INS),
6/1/2026 AAA $ 5,419,014
1,000,000 Dauphin County, PA,
Revenue Bonds, 5.80%,
6/1/2026 A 1,004,306
975,000 Delaware County, PA, GO
UT Bonds, 5.30%,
10/1/2007 AA 977,974
1,000,000 Delaware County, PA, GO
UT Bonds, 5.35%,
10/1/2008 AA 999,067
4,550,000 Delaware River Port
Authority, PA, Revenue
Bonds, 5.40% (FGIC
INS)/(Original Issue
Yield: 5.50%),
1/1/2014 AAA 4,415,147
2,000,000 Delaware Valley, PA,
Regional Finance
Authority, Revenue
Bonds (Series A), 5.90%
(AMBAC INS)/ (Original
Issue Yield: 6.00%),
4/15/2016 AAA 2,000,000
1,000,000 Delaware Valley, PA,
School District, UT GO
Refunding Bonds (Series
A), 6.50% (MBIA INS),
4/1/2001 AAA 1,076,849
1,210,000 East Penn, PA, School
District, GO UT
Refunding Bonds, 4.80%
(MBIA INS),
10/1/2003 AAA 1,201,350
1,270,000 East Penn, PA, School
District, GO UT
Refunding Bonds, 4.90%
(MBIA INS),
10/1/2004 AAA 1,264,083
<CAPTION>
Principal Credit
Amount Rating(c) Value
<C> <S> <C> <C>
$1,500,000 Erie County, PA, Prison
Authority Lease, Reve-
nue Bonds, 6.30%
(United States Trea-
sury COL)/(MBIA INS),
11/1/1999 AAA $ 1,581,528
1,335,000 Fort Cherry, PA, School
District, GO UT
Refunding Bonds, 4.80%
(AMBAC INS)/ (Original
Issue Yield: 4.90%),
10/1/2007 AAA 1,280,597
1,000,000 Franklin, PA, Regional
School District, GO UT
Refunding Bonds (Series
I), 6.25% (FGIC INS),
10/1/2001 AAA 1,001,206
1,000,000 Geisinger Authority,
PA, Health System,
Refunding Revenue
Bonds, 5.70% (Original
Issue Yield: 5.75%),
7/1/2002 AA 1,039,592
1,600,000 Harrisburg, PA, Lease
Authority, Revenue
Bonds, 5.90% (CGIC
INS)/(Original Issue
Yield: 6.001%),
6/1/1998 AAA 1,644,288
1,000,000 Harrisburg, PA, Water
Authority, Refunding
Revenue Bonds (Series
B-1), 4.85% (FGIC
INS)/(Original Issue
Yield: 4.95%),
7/15/2000 AAA 1,007,317
1,100,000 Hempfield, PA, School
District, GO UT Bonds,
5.50% (FGIC INS),
8/15/1998 AAA 1,129,508
1,580,000 Hempfield, PA, School
District, GO UT
Refunding Bonds, 6.40%,
10/15/1997 NR 1,584,426
</TABLE>
(See Notes to Portfolio of Investments)
15
MARKETVEST PENNSYLVANIA INTERMEDIATE
MUNICIPAL BOND FUND (continued)
<TABLE>
<CAPTION>
Principal Credit
Amount Rating(c) Value
<C> <S> <C> <C>
Pennsylvaniacontinued
$1,170,000 Johnstown, PA, GO UT
Refunding Bonds, 4.875%
(FGIC INS)/ (Original
Issue Yield: 4.90%),
10/1/1999 AAA $ 1,186,674
1,000,000 Lancaster County, PA,
Hospital Authority,
Health Center Refunding
Revenue Bonds, 4.75%
(Masonic Homes),
11/15/2002 A+ 984,631
1,000,000 Lancaster County, PA,
Hospital Authority,
Refunding Revenue
Bonds, 5.60% (Lancas-
ter General Hospital)/
(AMBAC INS),
7/1/2000 AAA 1,033,311
1,010,000 Lancaster, PA, Higher
Education Authority,
College Revenue Bonds,
4.70% (Franklin and
Marshall College
Project)/(MBIA INS),
4/15/2000 AAA 1,014,289
1,090,000 Lancaster, PA, School
District, GO UT
Refunding Bonds, 5.50%
(FGIC INS)/ (United
States Treasury PRF),
11/1/1997 (@100) AAA 1,108,557
1,000,000 Lehigh County, PA,
General Purpose
Authority, GO UT
Refunding Bonds (Series
A), 6.60% (AMBAC
INS)/(United States
Treasury PRF),
10/15/1999 (@100) AAA 1,062,314
<CAPTION>
Principal Credit
Amount Rating(c) Value
<C> <S> <C> <C>
$2,000,000 Lehigh County, PA, GO
UT Bonds (Series A),
5.50% (Original Issue
Yield: 5.60%),
11/15/2011 NR $ 1,987,606
2,100,000 Lehigh County, PA, GO
UT Bonds (Series A),
5.55% (Original Issue
Yield: 5.65%),
11/15/2012 NR 2,079,895
2,520,000 Lehigh County, PA, GO
UT Bonds (Series B),
5.65% (Original Issue
Yield: 5.75%),
11/15/2014 NR 2,488,739
1,000,000 Mars, PA, Area School
District, GO UT Bonds
(Series A), 6.05% (MBIA
INS), 3/1/1998 AAA 1,029,905
1,000,000 Montgomery County, PA,
GO UT Bonds, 5.00%,
10/15/2000 NR 1,016,322
1,000,000 Montgomery County, PA,
UT GO Refunding Bonds
(Series B), 6.10%
(Original Issue Yield:
6.20%), 7/15/2000 NR 1,042,362
1,000,000 Northampton County, PA,
GO UT Bonds, 5.10%
(AMBAC INS),
8/1/2005 NR 1,000,666
1,000,000 Northampton County, PA,
GO UT Bonds, 5.20%
(AMBAC INS),
8/1/2006 NR 986,255
1,550,000 Northampton County, PA,
Higher Education
Authority, Refunding
Revenue Bonds, 6.75%
(Lehigh University)/
(MBIA INS), 11/15/1999 AAA 1,655,836
</TABLE>
(See Notes to Portfolio of Investments)
16
MARKETVEST PENNSYLVANIA INTERMEDIATE
MUNICIPAL BOND FUND (continued)
<TABLE>
<CAPTION>
Principal Credit
Amount Rating(c) Value
<C> <S> <C> <C>
Pennsylvaniacontinued
$1,450,000 Northumberland County,
PA, Commonwealth Lease
Authority, Revenue
Bonds, 6.00% (MBIA
INS)/ (Original Issue
Yield: 6.15%),
10/15/1997 AAA $ 1,486,182
1,200,000 Norwin, PA, School
District, GO UT
Refunding Bonds, 6.00%
(AMBAC INS),
8/1/1998 AAA 1,240,057
2,000,000 Penn Hills Township,
PA, GO UT Refunding
Bonds, 4.75% (AMBAC
INS)/(Original Issue
Yield: 4.80%),
12/1/2003 AAA 1,979,324
1,000,000 Pennridge, PA, School
District, GO UT Bonds,
6.40%, 3/15/2001 NR 1,062,477
2,000,000 Pennsbury Pennsylvania
School District, GO UT
Refunding Bonds, 5.40%
(Commonwealth of
Pennsylvania GTD)/
(Original Issue Yield:
5.50%), 8/15/2010 AAA 1,976,796
1,500,000 Pennsylvania Housing
Finance Authority,
Refunding Revenue
Bonds, 6.00%, 10/1/2013 AA+ 1,523,697
2,720,000 Pennsylvania
Infrastructure
Investment Authority,
Revenue Bonds, 5.25%
(MBIA INS), 9/1/2007 AAA 2,702,053
1,000,000 Pennsylvania
Infrastructure
Investment Authority,
Revenue Bonds, 5.30%
(Pennvest)/(MBIA INS),
9/1/2008 AAA 992,118
<CAPTION>
Principal Credit
Amount Rating(c) Value
<C> <S> <C> <C>
$1,000,000 Pennsylvania
Infrastructure
Investment Authority,
Revenue Bonds, 6.00%
(MBIA INS), 9/1/2006 AAA $ 1,058,582
2,930,000 Pennsylvania Intergov-
ernmental Co-op
Authority, Refunding
Revenue Bonds, 4.85%
(FGIC INS), 6/15/2003 AAA 2,918,066
2,145,000 Pennsylvania Intergov-
ernmental Co-op
Authority, Refunding
Revenue Bonds, 5.40%
(FGIC INS), 6/15/2009 AAA 2,136,976
540,000 Pennsylvania Intergov-
ernmental Co-op
Authority, Refunding
Revenue Bonds, 6.00%
(FGIC INS), 6/15/2005 AAA 573,254
4,000,000 Pennsylvania Intergov-
ernmental Co-op
Authority, Revenue
Bonds, 4.80% (Philadel-
phia, PA)/(Common-
wealth of Pennsylvania
GTD)/(Original Issue
Yield: 4.90%),
6/15/2002 AAA 3,993,716
3,300,000 Pennsylvania Intergov-
ernmental Co-op
Authority, Revenue
Bonds, 5.50% (Philadel-
phia Funding Pro-
gram)/(FGIC INS)/
(Original Issue Yield:
5.65%), 6/15/2011 AAA 3,260,268
</TABLE>
(See Notes to Portfolio of Investments)
17
MARKETVEST PENNSYLVANIA INTERMEDIATE
MUNICIPAL BOND FUND (continued)
<TABLE>
<CAPTION>
Principal Credit
Amount Rating(c) Value
<C> <S> <C> <C>
Pennsylvaniacontinued
$1,050,000 Pennsylvania State
Higher Education
Facilities Authority,
College & University
Revenue Bonds, 5.00%
(Philadelphia College
of Pharmacy & Sci-
ence)/(MBIA INS)/
(Original Issue Yield:
5.10%), 11/1/2007 AAA $ 1,021,038
1,000,000 Pennsylvania State
Higher Education
Facilities Authority,
Refunding Revenue Bonds
(Series A), 4.40%
(Thomas Jefferson
University),
11/1/2001 A+ 987,216
3,000,000 Pennsylvania State
Higher Education
Facilities Authority,
Refunding Revenue Bonds
(Series A), 5.50%
(Presbyterian Medical
Center)/(Original Issue
Yield: 5.55%), 1/1/2009 AA 3,022,413
1,265,000 Pennsylvania State
Higher Education
Facilities Authority,
Refunding Revenue Bonds
(Series B), 4.75%
(University of Pennsyl-
vania)/(Original Issue
Yield: 4.85%), 1/1/2002 AA 1,260,209
1,030,000 Pennsylvania State
Higher Education
Facilities Authority,
Refunding Revenue
Bonds, 4.65% (Philadel-
phia College of Phar-
macy & Science)/ (MBIA
INS), 11/1/2003 AAA 1,012,083
<CAPTION>
Principal Credit
Amount Rating(c) Value
<C> <S> <C> <C>
$ 855,000 Pennsylvania State
Higher Education
Facilities Authority,
Revenue Bonds (Series
14), 6.60% (AMBAC INS),
1/1/1997 AAA $ 863,001
1,165,000 Pennsylvania State
Higher Education
Facilities Authority,
Revenue Bonds (Series
A), 4.50% (Thomas
Jefferson University),
11/1/2002 A+ 1,144,628
1,000,000 Pennsylvania State
Higher Education
Facilities Authority,
Revenue Bonds (Series
E), 6.00% (State Sys-
tems)/(MBIA INS),
6/15/1997 AAA 1,017,951
1,000,000 Pennsylvania State
Higher Education
Facilities Authority,
Revenue Bonds (Series
I), 4.90% (Pennsylvania
State Higher Educa-
tion)/(AMBAC INS),
6/15/2002 AAA 1,002,927
2,455,000 Pennsylvania State
Higher Education
Facilities Authority,
Revenue Bonds (Series
K), 4.70% (State Sys-
tems)/(AMBAC INS)/
(Original Issue Yield:
4.80%), 6/15/2002 AAA 2,437,651
1,000,000 Pennsylvania State
Higher Education
Facilities Authority,
Revenue Bonds, 6.70%
(Hahnemann Univer-
sity)/(MBIA INS),
7/1/1998 AAA 1,042,940
</TABLE>
(See Notes to Portfolio of Investments)
18
MARKETVEST PENNSYLVANIA INTERMEDIATE
MUNICIPAL BOND FUND (continued)
<TABLE>
<CAPTION>
Principal Credit
Amount Rating(c) Value
<C> <S> <C> <C>
Pennsylvaniacontinued
$1,000,000 Pennsylvania State IDA,
Refunding Revenue
Bonds, 5.80% (AMBAC
INS), 1/1/2008 AAA $ 1,031,786
1,000,000 Pennsylvania State IDA,
Revenue Bonds, 5.00%
(Economic Develop-
ment)/(AMBAC INS)/
(Original Issue Yield:
5.10%), 1/1/2000 AAA 1,011,253
1,000,000 Pennsylvania State
Turnpike Commission,
Revenue Bonds (Series
D), 6.60% (United
States Treasury COL)/
(FGIC INS), 12/1/1996 AAA 1,007,675
1,150,000 Pennsylvania State
Turnpike Commission,
Revenue Bonds (Series
J), 6.00% (United
States Treasury
COL)/(FGIC INS),
12/1/1997 AAA 1,181,081
1,000,000 Pennsylvania State
Turnpike Commission,
Revenue Bonds (Series
L), 6.15% (MBIA INS),
6/1/1999 AAA 1,043,768
1,000,000 Pennsylvania State Uni-
versity, Refunding
Revenue Bonds, 5.00%,
3/1/1997 AA- 1,005,571
1,000,000 Pennsylvania State
University, Second
Refunding Revenue
Bonds, 4.95% (Original
Issue Yield: 5.05%),
8/15/2000 AA- 1,009,990
<CAPTION>
Principal Credit
Amount Rating(c) Value
<C> <S> <C> <C>
$1,850,000 Philadelphia, PA, Hos-
pitals & Higher Educa-
tion Facilities Author-
ity, Refunding Revenue
Bonds (Series A), 5.25%
(Childrens Hospital of
Philadelphia)/
(Original Issue Yield:
5.55%), 2/15/2007 AA $ 1,819,301
1,500,000 Philadelphia, PA, Hos-
pitals & Higher Educa-
tion Facilities Author-
ity, Refunding Revenue
Bonds (Series A),
5.625% (Children's
Hospital of Philadel-
phia), 2/15/1999 AA 1,533,746
2,000,000 Philadelphia, PA,
School District, GO UT
Bonds (Series A),
5.85%,
7/1/2009 AAA 2,047,004
1,000,000 Philadelphia, PA,
School District, GO UT
Bonds, 5.375% (Original
Issue Yield: 5.45%),
7/1/2005 AAA 1,017,516
1,000,000 Philadelphia, PA, Water
& Wastewater System,
Refunding Revenue
Bonds, 5.50% (Original
Issue Yield: 5.61%),
6/15/2006 AAA 1,019,630
2,000,000 Philadelphia, PA, GO UT
Bonds, 5.00% (MBIA
INS)/(Original Issue
Yield: 5.20%),
5/15/2009 AAA 1,893,500
1,000,000 Pittsburgh, PA, School
District, UT GO
Refunding Bonds (Series
C), 5.25% (United
States Treasury
COL)/(FGIC INS),
8/1/1998 AAA 1,011,229
</TABLE>
(See Notes to Portfolio of Investments)
19
MARKETVEST PENNSYLVANIA INTERMEDIATE
MUNICIPAL BOND FUND (continued)
<TABLE>
<CAPTION>
Principal Credit
Amount Rating(c) Value
<C> <S> <C> <C>
Pennsylvaniacontinued
$2,000,000 Pittsburgh, PA, Water &
Sewer Authority,
Refunding Revenue Bonds
(Series A), 4.60% (FGIC
INS),
9/1/2003 AAA $ 1,960,150
2,690,000 Pittsburgh, PA, Water &
Sewer Authority,
Refunding Revenue Bonds
(Series A), 4.70% (FGIC
INS),
9/1/2004 AAA 2,630,368
1,000,000 Pittsburgh, PA, Water &
Sewer Authority,
Refunding Revenue Bonds
(Series A), 6.00%
(United States Treasury
COL)/(FGIC
INS)/(Original Issue
Yield: 6.10%), 9/1/1997 AAA 1,022,733
2,000,000 Pittsburgh, PA, Water &
Sewer Authority, Water
and Sewer System
Revenue Bonds (Series
A), 4.90% (FGIC INS),
9/1/2007 AAA 1,929,094
1,100,000 Pocono Mountain, PA,
School District, GO UT
Revenue Bonds (Series
A), 4.75% (FGIC INS),
11/15/2005 AAA 1,070,332
1,000,000 Pocono Mountain, PA,
School District, GO UT
Revenue Bonds (Series
A), 4.875% (FGIC INS)/
(Original Issue Yield:
4.95%), 11/15/2007 AAA 964,749
1,000,000 Pocono Mountain, PA,
School District, UT GO
Bonds, 6.80% (United
States Treasury COL)/
(AMBAC INS),
10/1/2000 AAA 1,029,531
<CAPTION>
Principal Credit
Amount Rating(c) Value
<C> <S> <C> <C>
$1,000,000 Pocono Mountain, PA,
School District, UT GO
Bonds, 6.90% (AMBAC
INS), 10/1/2001 AAA $ 1,030,583
1,610,000 Pocono Mountain, PA,
School District, UT GO
Refunding Bonds (Series
AA), 5.25% (AMBAC INS),
10/1/1998 AAA 1,644,334
1,000,000 Pocono Mountain, PA,
School District, UT GO
Refunding Bonds (Series
AA), 5.45% (AMBAC INS),
10/1/1999 AAA 1,029,368
1,000,000 Reading, PA, GO UT
Refunding Bonds (Sec-
ond Series), 5.00%
(AMBAC INS),
11/15/1999 AAA 1,017,106
1,000,000 Schuylkill, PA,
Redevelopment
Authority, Commonwealth
Lease Revenue Bonds
(Series A), 6.35% (FGIC
INS), 6/1/1998 AAA 1,033,318
1,145,000 South Allegheny, PA,
School District, UT GO
Refunding Bonds, 5.10%
(MBIA INS)/ (Original
Issue Yield: 5.20%),
10/1/2007 AAA 1,126,872
1,270,000 South Western School
District, York, PA, UT
GO Bonds, 5.00% (FGIC
INS), 6/15/1998 AAA 1,287,936
1,590,000 Springfield, PA, School
District, GO UT Bonds,
4.60% (AMBAC INS),
3/15/2006 AAA 1,516,612
</TABLE>
(See Notes to Portfolio of Investments)
20
MARKETVEST PENNSYLVANIA INTERMEDIATE
MUNICIPAL BOND FUND (continued)
<TABLE>
<CAPTION>
Principal Credit
Amount Rating(c) Value
<C> <S> <C> <C>
Pennsylvaniacontinued
$1,255,000 State Public School
Building Authority, PA,
College, Revenue Bonds,
6.10% (Harrisburg Area
Community
College-D)/(MBIA INS),
4/1/1999 AAA $ 1,305,312
1,000,000 Stroudsburg, PA, Area
School District, UT GO
Bonds, 5.00% (FGIC
INS)/(Original Issue
Yield: 5.05%),
10/1/2005 AAA 991,322
2,000,000 University of
Pittsburgh, PA, Higher
Education, Refunding
Revenue Bonds (Series
B), 5.30% (MBIA INS),
6/1/1999 AAA 2,043,962
2,000,000 Washington County, PA,
IDA Pollution Control,
Revenue Bonds, 4.95%
(West Penn Power Co.)/
(MBIA INS), 3/1/2003 AAA 1,991,214
1,115,000 West View, PA, Munici-
pal Authority , Water
Revenue Bonds, 4.90%
(FGIC INS)/(Original
Issue Yield: 5.00%),
11/15/2007 AAA 1,074,842
1,095,000 West View, PA, Munici-
pal Authority, Water
Revenue Bonds, 5.00%
(FGIC INS)/(Original
Issue Yield: 5.10%),
11/15/2008 AAA 1,059,069
1,000,000 Westmoreland County,
PA, UT GO Refunding
Bonds, 6.35% (AMBAC
INS), 12/1/1999 AAA 1,057,795
<CAPTION>
Principal
Amount Credit
or Shares Rating(c) Value
<C> <S> <C> <C>
$1,010,000 Wyomissing, PA, School
District, UT GO Bonds,
5.40% (FGIC INS),
5/1/1999 AAA $ 1,026,053
1,500,000 Wyomissing, PA, School
District, UT GO
Refunding Bonds, 4.80%
(FGIC INS),
5/1/2003 AAA 1,489,772
1,000,000 York County, PA, UT GO
Refunding Bonds, 5.15%
(FGIC INS),
10/1/1999 AAA 1,020,804
-----------
Total 216,912,570
-----------
Puerto Rico1.0%
2,220,000 Commonwealth of Puerto
Rico, GO UT Bonds,
5.00% (Original Issue
Yield: 5.10%),
7/1/2001 A 2,240,721
-----------
TOTAL LONG-TERM
MUNICIPAL SECURITIES
(IDENTIFIED COST
$216,746,094) 219,153,291
-----------
OPEN-ENDED INVESTMENT
COMPANY1.5%
3,447,840 PA Municipal Money
Market Portfolio PNC
(at net asset value) 3,447,840
-----------
TOTAL INVESTMENTS
(IDENTIFIED COST
$220,193,934) $222,601,131
-----------
-----------
</TABLE>
(See Notes to Portfolio of Investments)
21
MARKETVEST SHORT-TERM
BOND FUND
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C> <C>
CORPORATE BONDS28.6%
Banking0.7%
$1,000,000 NBD Bank, N.A. Indiana,
Medium Term Note, 7.50%,
2/28/1998 $ 1,014,570
-----------
Finance20.5%
1,000,000 American General Finance
Corp., Medium Term Note,
7.29%, 3/20/1998 1,011,996
2,000,000 American General Finance
Corp., Sr. Note, 7.25%,
3/1/1998 2,022,792
2,000,000 Associates Corp. North
America, Sr. Note,
6.375%, 8/15/1998 1,992,790
2,000,000 Bankers Trust New York
Corp., Sr. Note, 6.625%,
7/30/1999 1,986,000
1,050,000 Beneficial Corp., Medium
Term Notes, 6.21%,
9/11/1997 1,050,094
2,000,000 CIT Group Holdings, Inc.,
Medium Term Note, 6.125%,
9/1/1998 1,984,274
1,450,000 Caterpiller Financial
Services, Note, 7.15%,
3/10/1997 1,459,618
1,000,000 Chrysler Financial Corp.,
Medium Term Note, 7.50%,
3/16/1998 1,013,983
3,000,000 Ford Motor Credit Co.,
Note, 6.85%, 8/15/2000 2,973,339
2,000,000 GMAC, Medium Term Note,
6.45%, 4/15/1999 1,980,060
2,000,000 GMAC, Note, 6.20%,
5/11/1998 1,987,976
2,000,000 Lehman Brothers, Inc.,
Sr. Sub. Note, 7.00%,
5/15/1997 2,010,482
2,000,000 New England Educational
Loan Marketing Corp.,
Note, 6.125%, 7/17/1998 1,978,066
<CAPTION>
Principal
Amount Value
<C> <S> <C> <C>
$1,500,000 Norwest Corp., Sr. Note,
7.70%, 11/15/1997 $ 1,524,019
2,000,000 Travelers Aetna Property
& Casualty, Sr. Note,
6.75%, 4/15/2001 1,969,048
3,000,000 Xerox Credit Corp.,
Medium Term Note, 7.125%,
4/1/1998 3,030,309
-----------
Total 29,974,846
-----------
Industrial Services2.7%
3,000,000 Sears Roebuck Acceptance
Corp., Medium Term Note,
Series 2, 6.54%,
5/6/1999 2,982,201
1,000,000 Southwestern Bell Capital
Corp., Medium Term Notes,
7.75%, 10/30/1997 1,015,271
-----------
Total 3,997,472
-----------
Technology0.7%
1,000,000 International Business
Machines Corp., Unsecured
Note, 6.375%, 11/1/1997 1,001,299
-----------
Telecommunications1.0%
1,500,000 GTE South, Inc., Deb.,
6.25%, 11/15/1997 1,497,849
-----------
Transportation0.7%
1,000,000 CSX Transportation, Inc.,
Series A, 7.53%,
11/15/1997 1,014,056
-----------
Utilities2.3%
1,500,000 Massachusetts Electric
Co., 7.80%, 2/13/1998 1,523,787
1,977,000 Central Power & Light
Co., 6.625%, 1/1/1998 1,979,125
-----------
Total 3,502,912
-----------
TOTAL CORPORATE BONDS
(IDENTIFIED COST
$42,119,435) 42,003,004
-----------
</TABLE>
(See Notes to Portfolio of Investments)
22
MARKETVEST SHORT-TERM
BOND FUND (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C> <C>
MORTGAGE BACKED
SECURITIES3.7%
Finance3.7%
$2,515,418 Prudential Home Mortgage
Securities, Class A3,
6.25%, 3/25/2000 $ 2,498,713
3,000,000 Prudential Home Mortgage
Securities, Series
1992-45, Class A4, 6.50%,
1/25/2000 2,958,117
-----------
TOTAL MORTGAGE BACKED
SECURITIES (IDENTIFIED
COST $5,478,102) 5,456,830
-----------
U.S. GOVERNMENT
AGENCIES37.0%
Federal Farm Credit
Bank1.0%
1,500,000 7.51%, 2/13/1998 1,526,402
-----------
Federal Home Loan
Bank7.1%
2,000,000 5.94%, 3/19/1998 1,989,848
3,000,000 6.23%, 11/14/1997 2,989,317
2,000,000 6.55%, 4/30/1999 1,989,006
2,000,000 6.55%, 9/19/2003 1,978,437
1,500,000 7.54%, 2/13/1998 1,525,143
-----------
Total 10,471,751
-----------
Federal Home Loan
Bank, Floating Rate
Notes(d)3.4%
1,000,000 5.75%, 3/14/1997 998,815
1,030,000 (e)6.238%, 6/11/1999 1,024,621
3,000,000 (e)6.25%, 6/26/1998 2,989,908
-----------
Total 5,013,344
-----------
Federal Home Loan Bank,
PC2.0%
1,653,498 5.50%, 10/1/1998 1,627,438
1,324,236 7.50%, 2/1/1998 1,338,311
-----------
Total 2,965,749
-----------
<CAPTION>
Principal
Amount Value
<C> <S> <C> <C>
Federal Home Loan Mort-
gage Corporation10.2%
$1,000,000 6.14%, 3/18/1999 $ 984,727
2,000,000 6.747%, 8/23/2001 1,966,940
1,000,000 6.79%, 4/10/2001 984,996
3,000,000 6.80%, 5/14/1999 2,996,277
3,000,000 6.925%, 6/30/1999 3,006,360
2,000,000 7.00%, 8/7/2000 1,989,928
2,000,000 7.188%, 9/15/1999 2,002,506
1,000,000 7.86%, 1/21/1997 1,008,890
-----------
Total 14,940,624
-----------
Federal Home Loan
Mortgage Corporation,
PC1.5%
2,141,774 6.50%, 10/15/2000 2,141,515
-----------
Federal National Mortgage
Association9.8%
2,224,537 6.00%, 11/1/2000 2,166,208
2,000,000 6.02%, 1/20/1998 1,995,376
3,000,000 6.375%, 10/13/2000 2,927,904
2,000,000 7.00%, 4/24/2001 1,968,734
2,250,000 7.17%, 6/12/2001 2,239,799
3,000,000 7.36%, 9/29/1999 3,022,608
-----------
Total 14,320,629
-----------
Federal National Mortgage
Association, REMIC2.0%
2,851,945 8.00%, 7/25/2018 2,899,655
-----------
TOTAL U.S. GOVERNMENT
AGENCIES (IDENTIFIED COST
$54,470,122) 54,279,669
-----------
U.S. TREASURY
OBLIGATIONS26.6%
U.S. Treasury Notes26.6%
2,000,000 5.75%, 9/30/1997 1,996,250
2,000,000 5.875%, 7/31/1997 2,000,000
3,000,000 5.875%, 8/15/1998 2,973,750
3,000,000 6.00%, 11/30/1997 2,996,250
2,000,000 6.125%, 12/31/1996 2,005,000
5,000,000 6.125%, 3/31/1998 4,993,750
3,000,000 6.25%, 4/30/2001 2,944,683
3,000,000 6.25%, 8/31/2000 2,954,058
3,000,000 6.375%, 1/15/2000 2,981,250
</TABLE>
(See Notes to Portfolio of Investments)
23
MARKETVEST SHORT-TERM
BOND FUND (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C> <C>
U.S. Treasury
Notescontinued
$5,000,000 6.375%, 5/15/1999 $ 4,985,930
3,000,000 6.50%, 5/31/2001 2,972,808
2,000,000 6.75%, 6/30/1999 2,013,750
3,000,000 7.125%, 10/15/1998 3,045,000
-----------
TOTAL U.S. TREASURY
OBLIGATIONS (IDENTIFIED
COST $39,120,242) 38,862,479
-----------
(b)REPURCHASE
AGREEMENT4.1%
6,068,447 Bear, Stearns & Co.,
Inc., 5.20%, dated
8/30/1996, due 9/3/1996
(at amortized cost) $ 6,068,447
-----------
TOTAL INVESTMENTS
(IDENTIFIED COST
$147,256,348 ) $146,670,429
-----------
-----------
</TABLE>
(See Notes to Portfolio of Investments)
24
MARKETVEST INTERMEDIATE
U.S. GOVERNMENT BOND FUND
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C> <C>
U.S. GOVERNMENT AGENCY
OBLIGATIONS28.8%
Federal Home Loan
Bank4.6%
$1,500,000 7.25%, 6/27/2005 $ 1,450,173
1,000,000 7.415%, 10/23/2001 994,037
4,700,000 8.00%, 6/3/2011 4,591,642
4,000,000 8.08%, 8/27/2010 3,929,520
-----------
Total 10,965,372
-----------
Federal Home Loan Bank,
Floating Rate Note0.4%
1,000,000 (d)7.0%, 7/3/1997 989,060
-----------
Federal Home Loan Mort-
gage Corporation6.6%
2,000,000 7.00%, 8/15/2021 1,914,538
2,500,000 7.06%, 10/4/2005 2,431,908
1,000,000 7.41%, 5/18/2005 979,719
1,500,000 7.52%, 4/21/2006 1,483,119
1,500,000 7.84%, 6/9/2006 1,492,989
2,000,000 8.00%, 7/18/2011 1,989,410
3,500,000 8.06%, 3/24/2010 3,522,271
2,000,000 8.325%, 7/15/2009 2,008,094
-----------
Total 15,822,048
-----------
Federal National Mortgage
Association13.8%
2,000,000 7.22%, 7/6/2001 2,000,000
4,000,000 7.27%, 4/24/2003 3,929,444
5,000,000 7.52%, 4/26/2006 4,916,850
2,000,000 7.75%, 5/26/2006 1,955,684
2,000,000 7.875%, 2/24/2005 2,078,892
1,500,000 7.90%, 4/10/2002 1,497,632
1,000,000 8.00%, 5/15/2006 993,828
3,000,000 8.00%, 5/25/2011 2,976,375
1,500,000 8.00%, 6/12/2006 1,477,809
3,000,000 8.08%, 7/17/2006 2,993,505
3,000,000 8.13%, 7/8/2011 2,961,444
4,000,000 8.32%, 3/2/2005 4,115,016
1,000,000 9.05%, 4/10/2000 1,070,151
-----------
Total 32,966,630
-----------
<CAPTION>
Principal
Amount Value
<C> <S> <C> <C>
Federal National Mortgage
Association, Floating
Rate Note1.7%
$4,000,000 (d)7.20%, 7/24/1997 $ 3,958,412
-----------
Student Loan Marketing
Association0.4%
1,000,000 7.67%, 3/8/2000 1,005,452
-----------
Tennessee Valley
Authority1.3%
3,000,000 8.375%, 10/1/1999 3,127,263
-----------
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS (IDEN-
TIFIED COST $69,508,433) 68,834,237
-----------
U.S. TREASURY
OBLIGATIONS59.8%
U.S. Treasury Notes59.8%
3,000,000 5.875%, 8/15/1998 2,973,750
12,500,000 6.125%, 5/15/1998 12,468,750
6,500,000 6.25%, 5/31/2000 6,414,687
5,500,000 6.375%, 1/15/1999 5,496,562
4,500,000 6.375%, 8/15/2002 4,411,399
10,250,000 6.50%, 4/30/1999 10,259,594
5,000,000 6.50%, 5/15/2005 4,862,500
14,500,000 7.125%, 9/30/1999 14,731,072
15,000,000 7.25%, 8/15/2004 15,314,040
10,500,000 7.375%, 11/15/1997 10,654,203
3,000,000 7.50%, 5/15/2002 3,105,933
9,000,000 7.75%, 1/31/2000 9,309,375
4,500,000 7.875%, 11/15/2004 4,762,962
3,000,000 8.00%, 1/15/1997 3,027,183
1,000,000 8.00%, 10/15/1996 1,003,436
3,750,000 8.00%, 8/15/1999 3,895,312
8,500,000 8.25%, 7/15/1998 8,778,893
1,500,000 8.50%, 5/15/1997 1,528,125
9,000,000 8.875%, 11/15/1998 9,452,799
10,000,000 9.125%, 5/15/1999 10,637,500
-----------
TOTAL U.S. TREASURY OBLI-
GATIONS (IDENTIFIED COST
$144,589,971) 143,088,075
-----------
</TABLE>
(See Notes to Portfolio of Investments)
25
MARKETVEST INTERMEDIATE
U.S. GOVERNMENT BOND FUND (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C> <C>
CORPORATE BONDS8.1%
Banking2.1%
$3,000,000 Bankamerica Corp.,
7.625%, 6/15/2004 $ 3,018,921
2,000,000 Republic NY Corp., 7.75%,
5/15/2002 2,050,662
-----------
Total 5,069,583
-----------
Finance4.8%
1,000,000 Associates Corp. of North
America, 8.125%,
1/15/1998 1,022,507
1,000,000 Commercial Credit Co.,
6.75%, 5/15/2000 991,441
3,000,000 Ford Motor Credit Co.,
8.375%, 1/15/2000 3,123,006
2,500,000 General Motors Accept-
ance Corp., 7.125%,
5/1/2003 2,463,040
2,000,000 Salomon, Inc., 7.00%,
5/15/1999 1,990,260
2,000,000 Travelers/Aetna Property
& Casualty, 6.75%,
4/15/2001 1,969,048
-----------
Total 11,559,302
-----------
Industrial Services0.4%
1,000,000 Texaco Capital, Inc.,
8.65%, 1/30/1998 1,029,783
-----------
Securities0.8%
1,750,000 Merrill Lynch & Co.,
Inc., 9.00%, 5/1/1998 1,816,566
-----------
TOTAL CORPORATE BONDS
(IDENTIFIED COST
$19,671,310 ) 19,475,234
-----------
<CAPTION>
Principal
Amount Value
<C> <S> <C> <C>
MORTGAGE-BACKED
SECURITY0.8%
$2,000,000 Corestates Home Equity
Trust, 7.00%, 12/15/2009
(identified cost
$1,980,313) $ 1,955,000
-----------
(b)REPURCHASE AGREE-
MENT1.2%
2,937,213 Bear, Stearns & Co.,
Inc., 5.20%, dated
8/30/1996, due 9/3/1996
(at amortized cost) 2,937,213
-----------
TOTAL INVESTMENTS
(IDENTIFIED COST
$238,687,240) $236,289,759
-----------
-----------
</TABLE>
(See Notes to Portfolio of Investments)
<TABLE>
<S> <C>
MARKETVEST GROUP OF FUNDS
Notes to Portfolios of Investments
August 31, 1996 (unaudited)
</TABLE>
(a) Non-income producing security.
(b) The repurchase agreement is fully collateralized by U.S. Government and/or
agency obligations based on market prices at the date of the portfolio.
(c) Please refer to the Appendix of the Statement of Additional Information for
an explanation of the credit ratings.
(d) Floating rate note with current rate and next reset date shown.
(e) Represents step-up bond.
The following acronyms are used throughout these portfolios:
<TABLE>
<S> <C>
ADR -- American Depositary Receipt
AMBAC -- American Municipal Bond Assurance Corporation
CGIC -- Capital Guaranty Insurance Corporation
COL -- Collateralized
FGIC -- Financial Guaranty Insurance Company
GO -- General Obligation
GTD -- Guaranteed
HDA -- Hospital Development Authority
HEFA -- Health and Education Facilities Authority
IDA -- Industrial Development Authority
INS -- Insured
MBIA -- Municipal Bond Investors Assurance
PC -- Participation Certificate
PRF -- Prerefunded
REMIC -- Real Estate Mortgage Investment Conduit
UT -- Unlimited Tax
VRDNs -- Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
NET UNREALIZED GROSS GROSS
COST OF APPRECIATION UNREALIZED UNREALIZED
INVESTMENTS (DEPRECIATION) APPRECIATION DEPRECIATION TOTAL
FOR FEDERAL TAX FOR FEDERAL TAX FOR FEDERAL TAX FOR FEDERAL TAX NET
FUND PURPOSES PURPOSES PURPOSES PURPOSES ASSETS*
<S> <C> <C> <C> <C> <C>
Marketvest Equity Fund $430,694,041 $25,856,212 $35,263,158 $ 9,406,946 $457,533,783
Marketvest Pennsylvania Intermediate
Municipal Bond Fund $220,193,934 $ 2,407,197 $ 3,272,167 $ 864,970 $225,987,953
Marketvest Short-Term Bond Fund $147,256,348 $ (585,919) $ 46,512 $ 632,431 $146,687,996
Marketvest Intermediate U.S. Government
Bond Fund $238,687,240 $(2,397,481) $ 68,226 $ 2,465,707 $239,416,588
</TABLE>
* The categories of investments are shown as a percentage of net assets at
August 31, 1996.
(See Notes which are an integral part of the Financial Statements)
<TABLE>
<S> <C>
MARKETVEST GROUP OF FUNDS
Statements of Assets and Liabilities
August 31, 1996 (unaudited)
</TABLE>
<TABLE>
<CAPTION>
MARKETVEST MARKETVEST
PENNSYLVANIA INTERMEDIATE
INTERMEDIATE MARKETVEST U.S.
MARKETVEST MUNICIPAL SHORT-TERM GOVERNMENT
EQUITY FUND BOND FUND BOND FUND BOND FUND
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities, at value $456,550,253 $222,601,131 $146,670,429 $236,289,759
Income receivable 1,305,894 3,308,442 2,396,634 4,152,757
Receivable for investments sold -- 2,672,397 -- --
Receivable for shares sold 17,126 -- -- --
--------------- --------------- --------------- ---------------
Total assets 457,873,273 228,581,970 149,067,063 240,442,516
--------------- --------------- --------------- ---------------
LIABILITIES:
Payable for investments purchased -- 1,582,250 1,978,437 --
Income distribution payable -- 850,668 308,231 883,882
Accrued expenses 339,490 161,099 92,399 142,046
--------------- --------------- --------------- ---------------
Total liabilities 339,490 2,594,017 2,379,067 1,025,928
--------------- --------------- --------------- ---------------
NET ASSETS CONSIST OF:
Paid in capital 429,916,444 224,226,913 147,399,713 243,087,400
Net unrealized appreciation (depreciation)
of investments 25,856,212 2,407,197 (585,919) (2,397,481)
Accumulated net realized gain (loss)
on investments 1,733,948 (646,157) (125,798) (1,273,331)
Undistributed net investment income 27,179 -- -- --
--------------- --------------- --------------- ---------------
Total Net Assets $457,533,783 $225,987,953 $146,687,996 $239,416,588
--------------- --------------- --------------- ---------------
NET ASSET VALUE PER SHARE, AND REDEMPTION PROCEEDS PER
SHARE (net assets / shares outstanding) $10.11 $9.98 $9.91 $9.80
--------------- --------------- --------------- ---------------
Offering Price Per Share*** $10.61 * $10.34 ** $10.27 ** $10.16 **
--------------- --------------- --------------- ---------------
SHARES OUTSTANDING 45,239,160 22,651,356 14,807,953 24,436,860
--------------- --------------- --------------- ---------------
Investments, at identified and tax cost $ 430,694,041 $ 220,193,934 $ 147,256,348 $ 238,687,240
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
</TABLE>
* Computation of offering price: 100/95.25 of net asset value.
** Computation of offering price: 100/96.50 of net asset value.
*** See "What Shares Cost" in the Prospectus.
(See Notes which are an integral part of the Financial Statements)
<TABLE>
<S> <C>
MARKETVEST GROUP OF FUNDS
Statements of Operations
Period Ended August 31, 1996 (a) (unaudited)
</TABLE>
<TABLE>
<CAPTION>
MARKETVEST MARKETVEST
PENNSYLVANIA INTERMEDIATE
INTERMEDIATE MARKETVEST U.S.
MARKETVEST MUNICIPAL SHORT-TERM GOVERNMENT
EQUITY FUND BOND FUND BOND FUND BOND FUND
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 3,466,590 $ -- $ -- $ --
Interest 466,807 4,888,944 2,896,619 5,971,152
--------------- --------------- --------------- ---------------
Total income 3,933,397 4,888,944 2,896,619 5,971,152
--------------- --------------- --------------- ---------------
EXPENSES:
Investment advisory fee 1,490,546 711,883 349,666 638,837
Administrative personnel and services fee 170,141 109,280 50,827 96,643
Custodian fees 15,191 15,278 6,744 10,599
Transfer and dividend disbursing agent fees
and expenses 6,553 6,281 6,258 6,507
Directors'/Trustees' fees 3,422 2,510 1,821 1,821
Legal fees 1,593 1,593 1,593 1,593
Portfolio accounting fees 40,283 37,322 24,460 28,847
Share registration costs 57,632 36,447 23,109 32,524
Printing and postage 6,826 6,598 6,598 6,598
Insurance premiums 3,640 3,277 2,832 3,277
Taxes 36,692 -- 11,085 18,735
Miscellaneous 2,955 2,549 2,538 3,206
--------------- --------------- --------------- ---------------
Total expenses 1,888,805 966,169 506,652 880,378
--------------- --------------- --------------- ---------------
Waivers--
Waiver of investment advisory fee (298,109) (142,376) (69,933) (127,767)
- --------------- --------------- --------------- ---------------
Net expenses 1,537,365 790,642 417,598 721,420
--------------- --------------- --------------- ---------------
Net investment income 2,396,032 4,098,302 2,479,021 5,249,732
--------------- --------------- --------------- ---------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments 1,733,948 (646,157) (125,798) (1,273,331)
Net change in unrealized appreciation (depreciation)
of investments 25,856,212 2,407,197 (585,919) (2,397,481)
--------------- --------------- --------------- ---------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 27,590,160 1,761,040 (711,717) (3,670,812)
--------------- --------------- --------------- ---------------
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS $29,986,192 $5,859,342 $1,767,304 $ 1,578,920
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
</TABLE>
(a) For the period from April 1, 1996 (date of initial public investment) to
August 31, 1996.
(See Notes which are an integral part of the Financial Statements)
<TABLE>
<S> <C>
MARKETVEST GROUP OF FUNDS
Statements of Changes in Net Assets
Period Ended August 31, 1996 (a) (unaudited)
</TABLE>
<TABLE>
<CAPTION>
MARKETVEST
PENNSYLVANIA MARKETVEST
INTERMEDIATE MARKETVEST INTERMEDIATE
MARKETVEST MUNICIPAL SHORT-TERM U.S. GOVERNMENT
EQUITY FUND BOND FUND BOND FUND BOND FUND
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 2,396,032 $ 4,098,302 $ 2,479,021 $ 5,249,732
Net realized gain (loss) on investment transactions 1,733,948 (646,157) (125,798) (1,273,331)
Net change in unrealized appreciation (depreciation) 25,856,212 2,407,197 (585,919) (2,397,481)
--------------- --------------- --------------- ---------------
Change in net assets resulting from operations 29,986,192 5,859,342 1,767,304 1,578,920
--------------- --------------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income (2,368,853) (4,098,302) (2,479,021) (5,249,732)
--------------- --------------- --------------- ---------------
SHARE TRANSACTIONS:
Proceeds from sale of shares 443,133,395 238,461,805 155,749,299 249,959,168
Net asset value of shares issued to shareholders in
payment of distributions declared 872,540 1,903 1,082,136 1,022,529
Cost of shares redeemed (14,089,491) (14,336,795) (9,431,722) (7,994,297)
--------------- --------------- --------------- ---------------
Change in net assets resulting from
share transactions 429,916,444 224,126,913 147,399,713 242,987,400
--------------- --------------- --------------- ---------------
Change in net assets 457,533,783 225,887,953 146,687,996 239,316,588
NET ASSETS:
Beginning of period -- 100,000 -- 100,000
--------------- --------------- --------------- ---------------
End of period $457,533,783 $225,987,953 $146,687,996 $239,416,588
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
Undistributed net investment income $ 27,179 $ -- $ -- $ --
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
Net realized gain (loss) for federal income tax
purposes $ 1,733,948 $ (646,157) $ (125,798) $(1,273,331)
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
</TABLE>
(a) For the period from April 1, 1996 (date of initial public investment) to
August 31, 1996.
(See Notes which are an integral part of the Financial Statements)
<TABLE>
<S> <C>
Financial Highlights
</TABLE>
<TABLE>
<CAPTION>
(For a share outstanding throughout the period)
PERIOD NET ASSET NET REALIZED AND DISTRIBUTIONS TO
ENDED VALUE, NET UNREALIZED TOTAL FROM SHAREHOLDERS FROM NET ASSET
AUGUST 31, BEGINNING INVESTMENT GAIN/(LOSS) ON INVESTMENT NET INVESTMENT VALUE,
1996(A) OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME END OF PERIOD
<S> <C> <C> <C> <C> <C> <C>
MARKETVEST EQUITY FUND
$ 10.00 0.07 0.11 0.18 (0.07) $ 10.11
MARKETVEST PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
$ 10.00 0.18 (0.02) 0.16 (0.18) $ 9.98
MARKETVEST SHORT-TERM BOND FUND
$ 10.00 0.21 (0.09) 0.12 (0.21) $ 9.91
MARKETVEST INTERMEDIATE U.S. GOVERNMENT BOND FUND
$ 10.00 0.25 (0.20) 0.05 (0.25) $ 9.80
</TABLE>
(a) Reflects operations for the period from April 1, 1996 (date of initial
public investment) to August 31, 1996 (unaudited).
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS(C)
NET ASSETS,
END OF
NET PERIOD PORTFOLIO AVERAGE
TOTAL INVESTMENT EXPENSE (000 TURNOVER COMMISSION
RETURN(B) EXPENSES INCOME WAIVER(D) OMITTED) RATE RATE PAID
<C> <C> <C> <C> <C> <C> <C> <S>
1.76% 1.03% 1.61% 0.20% $ 457,534 18% $ 0.0649
1.60% 0.83% 4.32% 0.15% $ 225,988 40% --
1.26% 0.90% 5.32% 0.15% $ 146,688 71% --
0.54% 0.85% 6.16% 0.15% $ 239,417 54% --
</TABLE>
<TABLE>
<S> <C>
MARKETVEST GROUP OF FUNDS
Notes to Financial Statements
August 31, 1996 (unaudited)
</TABLE>
<TABLE>
<S> <C>
(1) ORGANIZATION
</TABLE>
The Marketvest Group of Funds consists of Marketvest Funds, Inc. (the
"Corporation") and Marketvest Funds (the "Trust") which are registered under
the Investment Company Act of 1940, as amended (the "Act"), as open-end
management investment companies. The Corporation and the Trust consist of four
portfolios (individually referred to as the "Fund" or collectively as the
"Funds") which are presented herein:
<TABLE>
<CAPTION>
Portfolio Name Diversification Investment Objective
<S> <C> <C> <C>
Marketvest Equity Fund* diversified Provide growth of principal.
("Equity Fund")
Marketvest Pennsylvania Intermediate Municipal Bond Fund** non-diversified Provide current income which is
("Pennsylvania Intermediate Municipal Bond Fund") exempt from federal regular
income tax and the personal and
corporate income taxes imposed by
the Commonwealth of Pennsylvania.
Marketvest Short-Term Bond Fund* diversified Provide current income.
("Short-Term Bond Fund")
Marketvest Intermediate U.S. Government Bond Fund* diversified Provide current income.
("Intermediate U.S. Government Bond Fund")
</TABLE>
*A portfolio of Marketvest Funds, Inc.
**A portfolio of Marketvest Funds.
The assets of each portfolio are segregated and a shareholder's interest is
limited to the portfolio in which shares are held.
<TABLE>
<S> <C>
(2) SIGNIFICANT ACCOUNTING POLICIES
</TABLE>
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--Municipal bonds are valued by an independent
pricing service, taking into consideration yield, liquidity, risk, credit
quality, coupon, maturity, type of issue, and any other factors or market
data the pricing service deems relevant. U.S. government securities,
listed corporate bonds, other fixed income and asset-backed securities,
and unlisted and private placement securities are generally valued at the
mean of the latest bid and asked price as furnished by an independent
pricing service. Listed equity securities are valued at the last sale
price reported on a national securities exchange. Short-term debt
securities are valued at the prices provided by an independent pricing
service. However, short-term debt securities with remaining maturities of
sixty days or less at the time of purchase may be valued at amortized
cost, which approximates fair market value. Investments in other open-end
regulated investment companies are valued at net asset value.
REPURCHASE AGREEMENTS--It is the policy of the Funds to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Funds to monitor, on a daily basis, the market value of each
repurchase agreement's collateral to
ensure that the value of collateral at least equals the repurchase price
to be paid under the repurchase agreement transaction.
The Funds will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are
deemed by the Funds' adviser to be creditworthy pursuant to the guidelines
and/or standards reviewed or established by the Board of
Directors/Trustees (the "Directors/ Trustees"). Risks may arise from the
potential inability of counterparties to honor the terms of the repurchase
agreement. Accordingly, the Funds could receive less than the repurchase
price on the sale of collateral securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and
expenses are accrued daily. Bond premium and discount, if applicable, are
amortized as required by the Internal Revenue Code, as amended (the
"Code"). Dividend income and distributions to shareholders are recorded on
the ex-dividend date.
FEDERAL TAXES--It is the Funds' policy to comply with the provisions of
the Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of their income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Funds may engage in
when-issued or delayed delivery transactions. The Funds record when-issued
securities on the trade date and maintain security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on
the settlement date.
CONCENTRATION OF CREDIT RISK--Since the Pennsylvania Intermediate
Municipal Bond Fund invests a substantial portion of its assets in issuers
located in one state, it will be more susceptible to factors adversely
affecting issuers of that state than would be a comparable tax-exempt
mutual fund that invests nationally. In order to reduce the credit risk
associated with such factors, at August 31, 1996, 77.34% of the securities
in Pennsylvania Intermediate Municipal Bond Fund are backed by letters of
credit or bond insurance of various financial institutions and financial
guaranty assurance agencies. The value of investments insured by or
supported (backed) by a letter of credit from any one institution or
agency did not exceed 22.37% of total investments.
USE OF ESTIMATES--The preparation of financial statements is in conformity
with generally accepted accounting principles which require management to
make estimates and assumptions that affect the amounts of assets,
liabilities, expenses and revenues reported in the financial statements.
Actual results could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
(3) SHARE TRANSACTIONS
The Articles of Incorporation permit the Directors of the Corporation to issue
full and fractional shares of common stock in each Fund as follows:
<TABLE>
<CAPTION>
Authorized
Fund Shares Par Value
<S> <C> <C>
Equity Fund 1,000,000,000 $ 0.0001
Short-Term Bond Fund 1,000,000,000 $ 0.0001
Intermediate U.S. Government Bond Fund 1,000,000,000 $ 0.0001
</TABLE>
The Declaration of Trust permits the Trustees of Pennsylvania Municipal Bond
Fund to issue an unlimited number of full and fractional shares of beneficial
interest (without par value).
Transactions in shares were as follows:
<TABLE>
<CAPTION>
Pennsylvania Intermediate
Intermediate Short-Term U.S. Government
Equity Fund* Bond Fund* Bond Fund* Bond Fund*
<S> <C> <C> <C> <C>
Shares sold 46,535,393 24,076,179 15,648,571 25,133,986
Shares issued to shareholders in payment of
distributions declared 87,099 191 108,985 103,870
Shares redeemed (1,383,332) (1,435,014) (949,603) (810,996)
-------------- -------------- -------------- ---------------
Net change resulting from share
transactions 45,239,160 22,641,356 14,807,953 24,426,860
-------------- -------------- -------------- ---------------
-------------- -------------- -------------- ---------------
</TABLE>
*For the period from April 1, 1996 (date of initial public investment) to
August 31, 1996.
<TABLE>
<S> <C>
(4) INVESTMENT ADVISORY FEE AND OTHER
TRANSACTIONS WITH AFFILIATES
</TABLE>
INVESTMENT ADVISORY FEE--Dauphin Deposit Bank and Trust Company, the Funds'
investment adviser (the "Adviser"), receives for its services an annual
investment advisory fee based on a percentage of each Fund's average daily net
assets as follows:
<TABLE>
<CAPTION>
Annual
Fund Rate
<S> <C>
Equity Fund 1.00%
Pennsylvania Intermediate Municipal Bond Fund 0.75%
Short-Term Bond Fund 0.75%
Intermediate U.S. Government Bond Fund 0.75%
</TABLE>
The Adviser may voluntarily choose to waive a portion of its fee. The Adviser
can modify or terminate this voluntary waiver at any time at its sole
discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the
Funds with certain administrative personnel and services. The fee paid to FAS
is based on a percentage of each Fund's average daily net assets. FAS may
voluntarily choose to waive a portion of its fee.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated Services
Company ("FServ"), through its subsidiary, Federated Shareholder Services
Company ("FSSC") serves as transfer and dividend disbursing agent for the
Funds. The fee paid to FSSC is based on the size, type, and number of accounts
and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Funds' accounting records for
which it receives a fee. The fee is based on the level of the each Fund's
average daily net assets for the period, plus out-of-pocket expenses.
CUSTODIAN FEES--Dauphin Deposit Bank and Trust Company is the Funds'
custodian. The fee is based on the level of each Fund's average daily net
assets for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses were borne initially by FAS.
The Funds have agreed to reimburse FAS for the organizational expenses during
the five year period following each Fund's effective date. Each Fund's initial
organizational expenses are estimated to be as follows:
<TABLE>
<CAPTION>
Expenses of
Organizing
Fund the Funds
<S> <C>
Equity Fund $ 32,489
Pennsylvania Intermediate Municipal Bond Fund $ 38,575
Short-Term Bond Fund $ 30,839
Intermediate U.S. Government Bond Fund $ 30,886
</TABLE>
INTERFUND TRANSACTIONS--During the period ended August 31, 1996, the
Corporation and Trust engaged in purchase and sale transactions with trust
funds that have a common investment adviser (or affiliated investment
advisers), common Directors/Trustees, and/or common Officers. These purchase
and sale transactions were made at current market value or cost pursuant to
Rule 17a-7 under the Act. Interfund transactions were as follows:
<TABLE>
<CAPTION>
Fund Purchases Sales
<S> <C> <C>
Equity Fund $394,984,267 $ 0
Pennsylvania Intermediate Municipal Bond Fund $221,136,687 $ 0
Short-Term Bond Fund $113,502,054 $ 0
Intermediate U.S. Government Bond Fund $199,579,460 $ 0
</TABLE>
GENERAL--Certain of the Officers and Directors or Trustees of the Corporation
and Trust are Officers and Directors or Trustees of the above companies.
<TABLE>
<S> <C>
(5) INVESTMENT TRANSACTIONS
</TABLE>
Purchases and sales of investments, excluding short-term securities, for the
period ended August 31, 1996, were as follows:
<TABLE>
<CAPTION>
Fund Purchases Sales
<S> <C> <C>
Equity Fund $448,639,542 $57,090,691
Pennsylvania Intermediate Municipal Bond Fund $306,061,685 $90,248,763
Short-Term Bond Fund $212,034,055 $70,720,355
Intermediate U.S. Government Bond Fund $340,548,942 $103,525,583
</TABLE>
MARKETVEST GROUP OF FUNDS
------------------------------------------------
DIRECTORS/TRUSTEES AND OFFICERS
- ------------------------------------ ------------------------------------
<TABLE>
<S> <C> <C>
DIRECTORS/TRUSTEES OFFICERS
EDWARD C. GONZALES EDWARD C. GONZALES
GEORGE D. MCKEON Chairman, President and Treasurer
CLYDE M. MCGEARY JEFFREY W. STERLING
RICHARD SEIDEL Vice President and Assistant Treasurer
VICTOR R. SICLARI
Secretary
C. TODD GIBSON
Assistant Secretary
MUTUAL FUNDS ARE NOT BANK DEPOSITS OR OBLIGATIONS, ARE NOT GUARANTEED BY ANY BANK, AND ARE
NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN
MUTUAL FUNDS INVOLVES INVESTMENT RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
THIS REPORT IS AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY WHEN PRECEDED OR
ACCOMPANIED BY THE FUNDS' PROSPECTUS WHICH CONTAINS FACTS CONCERNING THEIR OBJECTIVES AND
POLICIES, MANAGEMENT FEES, EXPENSES AND OTHER INFORMATION.
</TABLE>
Combined semi-annual
report for
Marketvest Equity Fund
Marketvest Pennsylvania
Intermediate Municipal Bond Fund
Marketvest Short-Term Bond Fund
Marketvest Intermediate U.S.
Government Bond Fund
-------------------
AUGUST 1996
[LOGO OF DAUPHIN DEPOSIT BANK
AND TRUST COMPANY]
Investment Adviser
EDGEWOOD SERVICES, INC.
--------------------
Federated Investors Tower
Pittsburgh, PA 15222-3779
Edgewood Services, Inc. is the distributor of the funds
and a subsidiary of Federated Investors.
CUSIP 57061E105
CUSIP 57061E204
CUSIP 57061E303
CUSIP 57061D107
G01831-01 (9/96)
[Logo of Marketvest Funds]
