Combined semi-annual report for
Marketvest Equity Fund
Marketvest International
Equity Fund
Marketvest Pennsylvania Intermediate
Municipal Bond Fund
Marketvest Short-Term Bond Fund
Marketvest Intermediate U.S.
Government Bond Fund
August 1997
[LOGO]
MARKETVEST FUNDS
Table of Contents
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PRESIDENT'S MESSAGE........................................................ 1
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INVESTMENT REVIEWS......................................................... 3
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SHAREHOLDER VOTING RESULTS................................................. 11
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PORTFOLIOS OF INVESTMENTS.................................................. 12
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STATEMENTS OF ASSETS AND LIABILITIES....................................... 29
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STATEMENTS OF OPERATIONS................................................... 30
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STATEMENTS OF CHANGES IN NET ASSETS........................................ 31
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FINANCIAL HIGHLIGHTS....................................................... 34
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NOTES TO FINANCIAL STATEMENTS.............................................. 36
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DIRECTORS/TRUSTEES AND OFFICERS............................................ 41
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President's Message
Dear Shareholder:
I am pleased to present the Semi-Annual Report of the Marketvest Group of Funds,
which covers the six-month period from March 1, 1997 through August 31,
1997--the first six months of the Funds' fiscal year.
This report contains complete financial information for your Marketvest fund
investment, including a discussion with the portfolio manager, a list of fund
holdings, and the financial statements. Also included is a breakdown of the
voting results from the Special Meeting of Shareholders of Marketvest Group of
Funds held on June 30, 1997.
Please note the following highlights for each Marketvest fund over the six-month
reporting period:
. Consistent with a continued highly favorable stock market climate, MARKETVEST
EQUITY FUND achieved a strong total return for the six months ended August 31,
1997 of 16.52%.* Contributing to the total return were capital gains totaling
$0.27 per share, income totaling $0.08 per share, and a 13% increase in net
asset value. By August 31, 1997, shareholders entrusted the fund with more
than $612 million in assets.
. The newest addition to the Marketvest fund family, MARKETVEST INTERNATIONAL
EQUITY FUND, began operation on April 1, 1997. In its first five months of
activity, the fund produced a total return by August 31, 1997 of 6.10%*,
through an increase in share price. By August 31, 1997, the fund had attracted
more than $42 million in assets.**
. MARKETVEST PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND rewarded
tax-sensitive Pennsylvania investors with double-tax-free dividends totaling
$0.22 per share.*** The fund's net asset value increased by $0.03 during the
six-month reporting period. The fund's total return for the six months ended
August 31, 1997 was 2.55%.* Tax-sensitive Pennsylvania residents had invested
more than $211 million in the fund by August 31, 1997.
. MARKETVEST SHORT-TERM BOND FUND, which offers a relatively conservative
approach to bond investing, paid dividends totaling $0.29 per share, while
producing a total return for the six months ended August 31, 1997 of 2.93%.*
At the end of the reporting period, its net asset value was $9.95, unchanged
from the net asset value on the first day of the reporting period. Net assets
stood at $143 million on August 31, 1997.
- ---------
* Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate, so an
investor's shares, when redeemed, may be worth more or less than their
original cost. The total returns for the period based on offering price for
Marketvest Equity Fund, Marketvest International Equity Fund, Marketvest
Pennsylvania Intermediate Municipal Bond Fund, and Marketvest Short-Term
Bond Fund were 11.02%, 4.53%, -1.08%, and -0.66%, respectively.
** Foreign investing involves special risks including currency risk, increased
volatility of foreign securities, and differences in auditing and other
financial standards.
*** Income may be subject to the federal alternative minimum tax.
. MARKETVEST INTERMEDIATE U.S. GOVERNMENT BOND FUND, a portfolio of
intermediate-maturity government securities, paid dividends totaling $0.36 per
share. The fund's total return for the six months ended August 31, 1997 was
2.98%.* Net asset value declined slightly from $9.82 on the first day of the
reporting period to $9.75 on the last day of the reporting period. On August
31, 1997, the fund's net assets stood at $280 million.
Thank you for putting your money to work toward your financial goals through the
Marketvest Group of Funds. We will continue to provide the highest level of
service as we keep you up-to-date on a regular basis.
Sincerely,
[LOGO]
Edward C. Gonzales
President
October 15, 1997
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* Performance quoted represents past performance and is not indicative of future
results. Investment return and principal value will fluctuate, so an
investor's shares, when redeemed, may be worth more or less than their
original cost. The fund's total return based on offering price for the period
was -0.66%.
Investment Reviews
MARKETVEST EQUITY FUND
Q
During the six-month reporting period, the Dow Jones Industrial Average
("DJIA")* broke the 8000 barrier, but not without volatility as the market
experienced days of 100 point advances and declines. How did Marketvest
Equity Fund perform in this environment versus the market overall and other
growth funds?
A
April 1997 through July 1997 was generally a very favorable time period for
equities. From April through June, the fund lagged the Standard & Poor's
500 Index ("S&P 500")* by several percentage points. However, during
August, which was a down month for the major indicies, the fund defended itself
much better than the overall market. Accordingly, the fund's period performance
exceeded that of its benchmarks. For the six-month period ended August 31, 1997,
the fund reported a total return of 16.52%** versus total returns of 11.85% for
the DJIA, 15.23% for the Lipper Growth Fund Average* and 14.78% for the S&P 500.
Q
Where did you find value in this highly valued market?
A
In keeping with extreme market volatility, we used attractive opportunities
for trading when available. As we have stated in the past, we continue to
believe that overall valuations are exceedingly excessive, and accordingly,
postured the portfolio to defend against a down-side correction. When
opportunities presented themselves, we were buyers of Healthcare, technology and
energy related issues on sell-offs.
* The DJIA is an unmanaged index which represents share prices of selected blue
chip industrial corporations as well as public utility and transportation
companies. The DJIA indicates daily changes in the average price of stocks in
any of its categories. It also reports total sales for each group of
industries. Because it represents the top corporations of America, the DJIA's
index movements are leading economic indicators for the stock market as a
whole. The S&P 500 is an unmanaged broad-based index measuring changes in
stock market conditions based on the average performance of 500 widely held
common stocks. Lipper Growth Fund Average is an average of the total returns
for 580 growth funds tracked by Lipper Analytical Services, Inc., an
independent mutual fund rating service. Investments cannot be made in an
index.
** Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate, so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. The quoted total return for the fund does not reflect the
sales charge some customers may incur.
Q
What were the fund's weightings among the different market sectors at the
end of the reporting period?
A
As of August 31, 1997, the fund's holdings were allocated among the
different market sectors as follows:
Consumer Non Durables............................................... 27.2%
Capital and Intermediate Goods...................................... 18.9%
Technology.......................................................... 16.4%
Interest Sensitive.................................................. 14.2%
Energy.............................................................. 11.4%
Consumer Durables................................................... 6.6%
Cash Equivalents.................................................... 5.3%
Transportation...................................................... 0.6%
Q
What notable holdings were either added to the portfolio or significantly
changed the fund's position?
A
As valuations became extended over the past six months, liquidations of
either partial or whole positions were exercised. The more excessive the
valuations appeared to become, the more those issues were scaled back or,
in some instances, eliminated. This strategy was rewarded during the corrective
phase in August when reserves were redeployed as issues sold off. Johnson and
Johnson, Lowes, Eaton, Abbott Labs, Allied Signal, IBM, LSI Logic and Micron
Technology were among those names being acquired during that acquisition
program.
Q
Overall, the six-month period offered an ideal economic climate for stocks,
and the market marches on. What are your thoughts on the market as 1997
draws to a close?
A
As we progress through the balance of 1997, the equity market will likely
present an even more challenging environment than we have witnessed thus
far. As 100 point moves in the DJIA have become somewhat commonplace,
volatility has increased substantially and it is becoming increasingly more
difficult to understand what is ahead for stocks. Despite the heady gains
already registered from equity funds this year, many strategists remain
enthusiastic relative to year end results. As we have recited during recent
reviews, two very basic influences should continue to affect the direction of
equity prices: interest rate levels and liquidity.
MARKETVEST INTERNATIONAL EQUITY FUND
Q
While not matching the continued torrid pace of the U.S. stock market,
international stocks nevertheless delivered relatively strong performance.
What is your analysis of the international stock market?
A
When comparing domestic and foreign returns, it is important to keep in
mind the performance of the dollar versus foreign currencies. Investors
continue to be impressed with the double digit domestic equity returns they
have earned. However, in local currencies, most foreign markets have equaled or
exceeded by as much as 40% to 50% our U.S. equity returns. Due to the strong
dollar this year, these robust foreign returns have translated into less than
50% of domestic returns.
The international equity markets continue to provide an important vehicle for
diversification of domestic portfolios. While linked to U.S. equity markets with
respect to some issues, we believe markets abroad still provide ample investment
opportunity in many areas as world economic and political events drive market
forces.
Q
As a "fund of funds," Marketvest International Equity Fund invests its
assets in international mutual funds, which offers an extremely high level
of diversification. How were the fund's holdings weighted among different
regions at the end of the period as compared to its benchmark, the Europe,
Australia and Far East Index ("EAFE Index")*?
A
The largest difference between the fund's regional weightings and that of
the EAFE Index continues to be the respective exposure to Japan. The EAFE
Index exposure to Japan is currently almost 2.5 times larger than that of
the fund. The fund is overweighted with respect to the Pacific Rim and evenly
weighted to Europe.
The fund also has exposure to Latin America whereas the EAFE Index has none.
* The EAFE Index is a standard unmanaged foreign securities index representing
major non-U.S. stock markets, as monitored by Morgan Stanley Capital
International. EAFE returns are in U.S. dollars. Investments cannot be made
in an index.
Q
As 1997 draws to a close, do you continue to see a relatively favorable
climate overall for international stocks?
A
Looking forward, the opportunity for appreciation in international equity
investments remains favorable. The general outlook for most foreign
economies is an expectation of growth which will continue into 1998. When
compared to U.S. markets, our foreign counterparts generally continue to be less
expensive on a valuation basis. This is the foundation of our favorable market
outlook. However, this is not a blanket statement for the entire foreign arena.
Foreign investors must still be wary of such items as specific country
valuations, regional problems such as the Southeast Asian situation, and the
frailty of the Japanese markets and economy.
Other factors which may affect foreign equity returns are:
. Domestic and foreign interest rates.
. Currency values.
. The extent to which corporate restructuring in Europe has peaked.
. The Japanese trade surplus with the U.S.
. Rising economic activity and growth leading to inflation.
. The ease with which EMU completion continues.
Marketvest Pennsylvania Intermediate Municipal Bond Fund
Q
The market environment for municipal bonds was relatively favorable during
the reporting period, which included new tax legislation that left
municipal bonds unscathed. Can you comment?
A
The market for municipal bonds continues to perform well, with returns
lagging slightly behind taxable bonds. Supply and demand issues continue to
dominate the municipal market. Although new tax legislation was enacted,
the effect of a lower capital gains tax had little impact on municipal bond
buyers. Lower taxation rates will have some impact on the market as the spreads
between taxable and tax exempt issues narrow.
Q
How did Marketvest Pennsylvania Intermediate Municipal Bond Fund perform in
this environment in terms of tax-free income stream and total return?
A
During the reporting period the fund was an active buyer of higher coupon
issues to increase current income to our participants. The fund's current
income steadily increased due to these moves and the 30-day yield stood at
3.89%* on August 31, 1997. The fund's total return performed well, in line with
its benchmarks, at 2.55%* on August 31, 1997.
Q
What was the average life of the fund's holdings at the end of the
reporting period?
A
As of August 31, 1997, the fund's average life was 7.5 years and the
duration was 5.8 years.
Q
Municipal bonds were among the better-performing fixed income investments
during the reporting period. Do you foresee a continued positive
environment?
A
The municipal market has performed well within a declining rate
environment. As long as demand exceeds supply, we believe the markets
should continue to have great returns. The Pennsylvania market has been
strong and looks to continue to remain that way through year end due to
declining rates and thin supply of new issues.
* Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate, so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. The quoted total return for the fund does not reflect the
sales charge some customers may incur.
MARKETVEST SHORT-TERM BOND FUND
Q
What is your analysis of the bond market during the six-month reporting
period?
A
During the December 1996 Congressional testimony, Federal Reserve Board
(the "Fed") Chairman, Alan Greenspan, voiced concern over the threat of
higher inflation and that a "pre-emptive policy tightening" may be
necessary even before any inflationary pressures exist. At the March 1997
Federal Open Market Committee meeting, the Fed acted on this unexpected strength
by raising short-term interest rates by a quarter point. With employment growth
strong, real income growing faster than consumption, capacity utilization rates
hovering at levels typically foreshadowing higher prices, unemployment at the
lowest level since December 1973, and consumer confidence rising, the prospect
exists for further Fed tightening later in 1997.
As expected, economic activity during the first quarter came through at a strong
4.9% increase. For the second quarter of 1997, economic activity slowed to an
annual rate of 3.3%, better for long-term price stability but still above Fed
targets. On the positive side, inflation remained subdued. The Gross Domestic
Product implicit price deflator, an indication of inflation, rose at an annual
rate of just 1.4% in July, the smallest increase since the second quarter of
1964. Many believe that high-tech investment is boosting productivity growth and
holding inflation in check by increasing efficiency and controlling costs.
Although volatility was the order of the day in the bond market during the
reporting period, short-term rates declined slightly. The extremely short end of
the curve (six months and under) was unchanged for the reporting period; rates
in the 1-3 year range fell 11- to-14 basis points.
Q
How did Marketvest Short-Term Bond Fund's short-term portfolio perform in
terms of income and total return?
A
The Marketvest Short-Term Bond Fund with an average life of 1-3 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
longer-term bond funds. For the six-month period, the 30-day yield of the fund
was 5.50%** which surpassed short-term investment vehicles by approximately 25
basis points. On the volatility front, the fund's unit value fluctuated in a
narrower range when compared with longer term bond funds. For the six-month
period ended August 31, 1997, the fund's total return was 2.93%.**
* Unlike money market funds, the share value of the fund will fluctuate.
** Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate, so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. The quoted total return for the fund does not reflect the
sales charge some customers may incur.
8
How were the fund's assets allocated among Treasury, mortgage-backed and
asset-backed holdings at the end of the period?
A
The fund's asset allocation among Treasury, mortgage-backed and asset
backed holdings at August 31, 1997, was:
Treasuries/Agencies 39.6%
Mortgage-backed securities 4.7%
Asset-backed securities 12.2%
Q
As we move toward the end of 1997, do you see any signs that may point to a
clearer direction for the bond market?
A
With the economy in its seventh year of expansion, economic growth for 1997
has been quite remarkable. With extremely low levels of unemployment, high
consumer confidence, and capacity utilization reaching almost a two year
high, one would expect a pick up in inflation. However, inflation has remained
quite tame. As the economy typically accelerates during the fourth quarter
holiday shopping season, inflationary pressures may develop. Under this
scenario, the Fed may opt to slow things down by raising rates towards the end
of 1997 or early 1998.
MARKETVEST INTERMEDIATE U.S. GOVERNMENT BOND FUND
Q
What is your analysis of the bond market during the six-month reporting
period, which saw modest growth and benign inflation--and no inclination by
the Federal Reserve Board to raise rates?
A
Although August itself had negative returns for all sectors in the bond
market, the period as a whole registered positive returns. The market
appears to believe that the Federal Reserve Board will not move to increase
rates until year end or into early 1998. Factors such as moderate inflation and
controlled growth bear well for positive returns through year end. Certain
sectors including mortgage or mortgage-backed instruments, have come under
pressure with declining rates. Other sectors, such as Treasuries, have performed
well due to their non-callable nature. We have maintained a neutral stance to
our Lipper peer group and under weighted in the mortgage sector to avail
ourselves of these trends.
Q
How did Marketvest Intermediate U.S. Government Bond Fund perform in terms
of income and total return in this environment?
A
With the bond market rallying through the reporting period, the current
30-day yield for the fund declined slightly to 5.40%*, but the total return
remained positive at 2.98%* by August 31, 1997. The fund's duration was at 4.02
years and the average life was 6.3 years at the end of the period.
Q
How were the fund's assets allocated among Treasury, agency and corporate
bonds at the end of the period?
A
As of August 31, 1997, the allocations were as follows:
Treasuries.......................................... 63.70%
Agencies............................................ 1.15%
CMOs................................................ 15.70%
Asset Backed........................................ 1.00%
Corporate Bonds..................................... 15.25%
Preferred Stock..................................... 0.40%
Cash................................................ 2.80%
* Performance quoted represents past performance and is not indicative of future
results. Investment return and principal value will fluctuate, so that an
investor's shares, when redeemed, may be worth more or less than their
original cost. The quoted total return for the fund does not reflect the sales
charge some customers may incur.
Shareholder Voting Results
A Special Meeting of Shareholders of the Marketvest Group of Funds was held on
June 30, 1997. On May 29, 1997, the record date for shareholders voting at the
meeting, the total outstanding shares of each Fund were: Marketvest Equity
Fund--44,750,150 shares; Marketvest Intermediate U.S. Government Bond
Fund--27,337,888 shares; Marketvest Short-Term Bond Fund--14,492,479 shares;
Marketvest Pennsylvania Intermediate Municipal Bond Fund--21,433,067 shares; and
Marketvest International Equity Fund--4,025,778 shares. The following items were
considered by shareholders and the results of their voting were as follows:
1. Proposal to approve a New Investment Advisory Agreement on behalf of the Fund
between Marketvest Funds, Inc. (the "Corporation") and Dauphin Deposit Bank
and Trust Company ("Dauphin Deposit"), the terms and fees of which are
identical to the existing investment advisory agreement between the
Corporation and Dauphin Deposit, subject to and effective upon the
consummation of the merger of Dauphin Deposit Corporation with and into First
Maryland Bancorp.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ABSTENTIONS WITHHELD
AND BROKER AUTHORITY TO
FUND FOR AGAINST NON-VOTES VOTE
- ---- --- ------- ----------- ------------
Marketvest Equity Fund 44,671,919 0 0 0
Marketvest Intermediate U.S.
Government Bond Fund 22,317,632 0 0 0
Marketvest Short-Term Bond Fund 14,592,045 0 0 0
</TABLE>
2. Proposal to approve a New Investment Advisory Agreement on behalf of the Fund
between Marketvest Funds (the "Trust") and Dauphin Deposit Bank and Trust
Company ("Dauphin Deposit"), the terms and fees of which are identical to the
existing investment advisory agreement between the Trust and Dauphin Deposit,
subject to and effective upon the consummation of the merger of Dauphin Deposit
Corporation with and into First Maryland Bancorp.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ABSTENTIONS WITHHELD
AND BROKER AUTHORITY TO
FUND FOR AGAINST NON-VOTES VOTE
- ---- --- ------- ----------- ------------
Marketvest Pennsylvania
Intermediate Municipal Bond Fund 21,418,067 0 0 0
Marketvest International
Equity Fund 4,025,778 0 0 0
</TABLE>
MARKETVEST GROUP OF FUNDS
Portfolios of Investments August 31, 1997 (unaudited)
MARKETVEST EQUITY FUND
- -----------------------------------------------------
Shares Value
- -----------------------------------------------------
COMMON STOCKS-95.3%
Capital & Intermediate
Goods-18.9%
Aerospace-4.1%
55,538 Lockheed Martin Corp. $ 5,758,644
56,300 Northrop Corp. 6,590,619
120,400 Raytheon Co. 6,622,000
98,400 Rockwell International
Corp. 5,904,000
-----------
Total 24,875,263
-----------
Chemicals-3.4%
73,400 Dow Chemical Co. 6,495,900
106,000 Lubrizol Corp. 4,644,125
107,800 PPG Industries, Inc. 6,791,400
-----------
Total 17,931,425
-----------
Diversified/Miscellaneous-
2.9%
40,000 Allied-Signal, Inc. 3,334,275
153,000 Pentair, Inc. 5,450,625
134,600 Tenneco, Inc. 6,536,513
108,600 TRW, Inc. 5,660,775
-----------
Total 20,982,188
-----------
Electric Equipment-2.6%
105,800 Emerson Electric Co. 5,785,937
91,800 General Electric Co. 5,737,500
67,400 Honeywell, Inc. 4,659,025
-----------
Total 16,182,462
-----------
Machinery & Equipment-
2.2%
109,900 Deere & Co. 6,154,400
120,400 Ingersoll-Rand Co. 7,239,050
-----------
Total 13,393,450
-----------
Manufacturing/
Distribution-1.1%
140,600 Johnson Controls, Inc. 6,704,863
-----------
Mining/Metals-0.8%
135,200 Alcan Aluminum, Ltd. 4,723,550
-----------
Paper/Forest
Products-1.8%
106,000 Kimberly-Clark Corp. 5,028,375
- -----------------------------------------------------
- -----------------------------------------------------
Shares Value
- -----------------------------------------------------
101,500 Weyerhaeuser Co. $ 5,861,625
-----------
Total 10,890,000
-----------
TOTAL CAPITAL &
INTERMEDIATE GOODS 115,683,201
-----------
Consumer Products-Non
Durable27.2%
Beverages-2.3%
173,400 Anheuser-Busch Cos., Inc. 7,391,175
189,600 PepsiCo, Inc. 6,825,600
-----------
Total 14,216,775
-----------
Drugs-3.2%
158,300 (a)Amgen, Inc. 7,845,744
321,500 Mylan Laboratories, Inc. 6,831,875
102,200 Schering Plough Corp. 4,905,600
-----------
Total 19,583,219
-----------
Food-2.0%
154,000 Heinz (H.J.) Co. 6,410,250
140,600 Sara Lee Corp. 5,659,150
-----------
Total 12,069,400
-----------
Healthcare-4.8%
107,400 Abbott Laboratories 6,437,287
87,200 American Home Products
Corp. 6,278,400
148,000 Becton, Dickinson & Co. 7,094,750
79,400 Bristol-Myers Squibb Co. 6,034,400
63,000 Johnson & Johnson 3,571,313
-----------
Total 29,416,150
-----------
Household Products-2.0%
93,800 Colgate-Palmolive Co. 5,885,950
31,200 Unilever N.V., ADR 6,279,000
-----------
Total 12,164,950
-----------
Houseware/Home
Furnishings-1.2%
177,000 Newell Co. 6,969,375
-----------
Medical Equipment/
Supplies-3.4%
100,900 Bausch & Lomb, Inc. 4,143,206
108,600 Baxter International,
Inc. 5,776,162
214,800 Diagnostic Products Corp. 5,960,700
- -----------------------------------------------------
(See Notes to Portfolios of Investments)
MARKETVEST EQUITY FUND (continued)
- -----------------------------------------------------
Shares Value
- -----------------------------------------------------
Medical Equipment/
Supplies-continued
58,200 Medtronic, Inc. $ 5,259,825
-----------
Total 21,139,893
-----------
Merchandise-Mass-1.9%
107,900 Penney (J.C.) Co., Inc. 6,474,000
152,400 Wal-Mart Stores, Inc. 5,410,200
-----------
Total 11,884,200
-----------
Non-Hazardous Waste
Disposal-0.6%
106,000 Waste Management, Inc. 3,392,000
-----------
Publishing/Printing-0.8%
50,300 Gannett Co., Inc. 4,901,106
-----------
Restaurant-0.7%
95,600 McDonald's Corp. 4,523,075
-----------
Retailers-3.0%
152,000 Albertsons, Inc. 5,225,000
136,200 Lowe's Cos., Inc. 4,707,413
89,300 May Department Stores Co. 4,805,456
67,000 Nike, Inc., Class B 3,576,125
-----------
Total 18,313,994
-----------
Textiles-1.2%
84,800 V.F. Corp. 7,494,200
-----------
TOTAL CONSUMER
PRODUCTS-NON DURABLE 166,068,337
-----------
Consumer Products-
Durable6.6%
Appliances/
Furnishings-1.1%
113,300 Whirlpool Corp. 6,486,425
-----------
Automobile Manufacturer-
1.9%
149,500 Chrysler Corp. 5,251,187
150,200 Ford Motor Co. 6,458,600
-----------
Total 11,709,787
-----------
Automobile Parts-1.9%
69,700 Eaton Corp. 6,277,356
140,300 Echlin, Inc. 5,199,869
-----------
Total 11,477,225
-----------
- -----------------------------------------------------
- -----------------------------------------------------
Shares Value
- -----------------------------------------------------
Hardware/Tools-0.6%
92,400 Snap-On Tools Corp. $ 3,880,800
-----------
Tire/Rubber-1.1%
107,800 Goodyear Tire & Rubber
Co. 6,643,175
-----------
Total Consumer Products-
Durable 40,197,412
-----------
Energy-11.4%
Domestic Oils-6.9%
113,400 Atlantic Richfield Co. 8,505,000
84,400 Chevron Corp. 6,535,725
169,192 Duke Energy Co. 8,195,237
217,800 Occidental Petroleum
Corp. 5,104,688
152,100 Phillips Petroleum Co. 7,234,256
167,800 Sun Co., Inc. 6,523,225
-----------
Total 42,098,131
-----------
International Oils-3.5%
80,900 Amoco Corp. 7,650,106
94,600 Exxon Corp. 5,788,338
112,600 Mobil Corp. 8,191,650
-----------
Total 21,630,094
-----------
Oil Services-1.0%
150,400 Dresser Industries, Inc. 6,279,200
-----------
Total Energy 70,007,425
-----------
Interest Sensitive-14.2%
Banks-Money Center2.1%
70,200 Bankers Trust New York
Corp. 7,283,250
35,700 Citicorp 4,556,212
52,000 J.P. Morgan & Co., Inc. 5,577,000
-----------
Total 17,416,462
-----------
Banks-Regular2.8%
138,200 Banc One Corp. 7,410,975
100,000 Norwest Corp. 5,743,750
-----------
Total 13,154,725
-----------
Insurance-2.1%
31,500 CIGNA Corp. 5,776,312
113,500 Travelers Group, Inc. 7,207,250
-----------
Total 12,983,562
-----------
- -----------------------------------------------------
(See Notes to Portfolios of Investments)
MARKETVEST EQUITY FUND (continued)
- -----------------------------------------------------
Shares Value
- -----------------------------------------------------
Misc (Financial Svs)-1.1%
146,800 Federal National Mortgage
Association $ 6,459,200
-----------
Utilities-Gas2.8%
52,606 El Paso Natural Gas 2,959,087
168,900 Questar Corp. 6,756,000
163,800 Williams Cos., Inc. (The) 7,626,938
-----------
Total 17,342,025
-----------
Utilities-Telephone3.3%
127,000 BellSouth Corp. 5,588,000
117,500 GTE Corp. 5,236,094
117,200 SBC Communications, Inc. 6,372,750
84,700 U.S. West, Inc. 3,033,319
-----------
Total 20,230,163
-----------
TOTAL INTEREST SENSITIVE 87,586,137
-----------
Technology-16.4%
Electronics-2.5%
104,700 Avnet, Inc. 7,243,931
135,000 Hewlett-Packard Co. 8,277,188
-----------
Total 15,521,119
-----------
EDP & Office Equipment-
6.9%
145,750 (a)Compaq Computer Corp. 9,546,625
69,400 (a)Dell Computer Corp. 5,695,137
217,600 Electronic Data Systems
Corp. 8,228,000
51,600 International Business
Machines Corp. 5,205,150
179,900 (a)Seagate Technology,
Inc. 6,869,931
90,000 Xerox Corp. 6,795,000
-----------
Total 42,339,843
-----------
Mini Computers-1.6%
130,000 (a)Advanced Micro
Devices, Inc. 4,866,875
115,000 Micron Technology, Inc. 5,124,688
-----------
Total 9,991,563
-----------
- -----------------------------------------------------
- -----------------------------------------------------
Shares or
Principal
Amount Value
- -----------------------------------------------------
Semi-Conductors/Related-
2.3%
88,000 Intel Corp. $ 8,107,000
85,900 Motorola, Inc. 6,302,913
-----------
Total 14,409,913
-----------
Software & Services-2.2%
113,000 Computer Associates
International, Inc. 7,556,875
155,000 (a)Sterling Software,
Inc. 5,318,438
-----------
Total 12,875,313
-----------
Tele-Communication-0.9%
115,700 Sprint Corp. 5,437,900
-----------
TOTAL TECHNOLOGY 100,575,651
-----------
Transportation-0.6%
Railroads-0.6%
42,500 Burlington Northern
Santa Fe 3,896,719
-----------
TOTAL COMMON STOCKS
(IDENTIFIED COST
$439,804,537) 584,014,882
-----------
(b)COMMERCIAL PAPER-5.3%
$32,437,000 Merrill Lynch,
Pierce,Fenner & Smith,
Inc., 5.55%,
due 9/2/1997
(at amortized cost) 32,437,000
-----------
TOTAL INVESTMENTS
(IDENTIFIED COST
$472,241,537) $616,451,882
============
- -----------------------------------------------------
(See Notes to Portfolios of Investments)
MARKETVEST INTERNATIONAL
EQUITY FUND
- -----------------------------------------------------
Shares Value
- -----------------------------------------------------
LONG-TERM MUTUAL
FUNDS-98.4%
272,480 American EuroPacific
Growth Fund $ 7,520,459
87,466 GAM International Fund 2,404,449
251,892 Harbor International Fund 9,239,400
320,447 Hotchkis & Wiley
International Fund 7,492,047
506,477 T Rowe Price
International Stock Fund 7,273,012
677,790 Templeton Foreign Fund,
Class I 7,726,804
-----------
TOTAL LONG-TERM MUTUAL
FUNDS AT MARKET VALUE
(COST $39,614,277) 41,656,171
-----------
SHORT-TERM MUTUAL
FUND-1.6%
680,272 Temporary Investment
Fund, Inc. (at net asset
value) 680,272
-----------
TOTAL INVESTMENTS AT
MARKET VALUE (COST
$40,294,549)(A) $42,336,443
===========
- -----------------------------------------------------
(See Notes to Portfolios of Investments)
MARKETVEST PENNSYLVANIA INTERMEDIATE
MUNICIPAL BOND FUND
- ---------------------------------------------------------------
Principal Credit
Amount Rating(c) Value
- ---------------------------------------------------------------
LONG-TERM MUNICIPAL
SECURITIES-97.0%
General Obligation-
35.8%
$1,000,000 Allegheny County, PA
Institution District,
UT GO Refunding Bonds
(Series 18), 6.70%
(MBIA INS), 4/1/1999 AAA $ 1,039,708
5,000,000 Allegheny County, PA,
GO UT Bonds (Series
C-45), 5.10% (FGIC
INS), 10/1/2007 AAA 5,094,455
1,390,000 Bensalem Township, PA,
GO UT Bonds, 5.55%
(FGIC INS),
12/1/2010 AAA 1,435,397
1,015,000 Bensalem Township, PA,
GO UT Bonds, 5.70%
(FGIC INS),
12/1/2012 AAA 1,052,555
1,000,000 Bethlehem, PA Area School District, GO UT BONDS, 5.70% (MBIA
INS), 3/1/2009 AAA 1,068,722
1,000,000 Bethlehem, PA Area School District, GO UT BONDS, 5.75% (MBIA
INS)/(Original Issue
Yield: 5.80%), 3/1/2010 AAA 1,072,193
3,000,000 Bethlehem, PA Area
School District, GO UT
Bonds, 5.50% (FGIC
INS), 9/1/2008 Aaa 3,119,352
1,545,000 Bethlehem, PA Area
School District, GO UT
Bonds, 5.80% (MBIA
INS)/(Original Issue
Yield: 5.80%), 3/1/2011 AAA 1,661,901
1,635,000 Bethlehem, PA Area
School District, GO UT
Bonds, 5.85% (MBIA
INS)/(Original Issue
Yield: 5.90%), 3/1/2012 AAA 1,764,386
- ---------------------------------------------------------------
- ---------------------------------------------------------------
Principal Credit
Amount Rating(c) Value
- ---------------------------------------------------------------
$1,000,000 Bethlehem, PA Area School District, UT GO Bonds, 6.35% (United
States Treasury COL)/ (AMBAC INS),
9/1/1999 AAA $ 1,043,090
4,000,000 Burrell, PA School District, GO UT School Improvements, 5.25%
(Original Issue Yield:
5.45%), 11/15/2010 AAA 4,044,256
1,000,000 Central Bucks, PA
School District, UT GO
Refunding Bonds, 6.30%,
2/1/2000 Aa 1,049,491
1,420,000 Coatsville, PA School
District, GO UT, 5.15%
(FSA INS)/(Original
Issue Yield: 5.25%),
4/1/2011 Aaa 1,431,694
2,000,000 Coatsville, PA School
District, GO UT, 5.40%
(FSA INS), 4/1/2013 Aaa 2,016,274
3,000,000 Commonwealth of
Pennsylvania, GO UT,
5.375% (FGIC INS),
5/15/2005 AAA 3,130,503
4,000,000 Commonwealth of
Pennsylvania, GO UT
Bonds, 5.375% (FGIC
INS), 5/15/2004 AAA 4,189,928
1,000,000 Commonwealth of Pennsylvania, GO UT Refunding Bonds (First Series
A), 6.60%,
6/1/1999 AA- 1,042,367
2,000,000 Commonwealth of Pennsylvania, GO UT Refunding Bonds (Second Series),
5.30% (Original Issue Yield:
5.40%), 7/1/1999 AA 2,041,978
- ---------------------------------------------------------------
(See Notes to Portfolios of Investments)
MARKETVEST PENNSYLVANIA INTERMEDIATE
MUNICIPAL BOND FUND (continued)
- ---------------------------------------------------------------
Principal Credit
Amount Rating(c) Value
- ---------------------------------------------------------------
General Obligation-
continued
$5,000,000 Commonwealth of
Pennsylvania, GO UT
Refunding Bonds, 5.125%
(AMBAC INS), 9/15/2005 AAA $ 5,125,735
5,000,000 Commonwealth of Pennsylvania, GO UT Refunding Bonds, 5.375% (FGIC
INS),
11/15/2007 AAA 5,211,140
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 2,076,478
1,000,000 Delaware Valley, PA School District, UT GO Refunding Bonds (Series
A), 6.50% (MBIA INS),
4/1/2001 AAA 1,071,022
1,000,000 Exeter Township, PA
School District, GO UT
Bonds, 4.80% (Original
Issue Yield: 4.90%),
7/15/2009 Aaa 969,996
1,000,000 Franklin, PA Regional
School District, GO UT
Refunding Bonds (Series
I), 6.25% (FGIC INS),
10/1/2001 AAA 1,001,592
2,000,000 Lehigh County, PA, GO UT Bonds (Series A), 5.50% (Original Issue
Yield: 5.60%),
11/15/2011 Aa3 2,044,242
2,100,000 Lehigh County, PA, GO
UT Bonds (Series A),
5.55% (Original Issue
Yield: 5.65%),
11/15/2012 Aa3 2,146,353
- ---------------------------------------------------------------
- ---------------------------------------------------------------
Principal Credit
Amount Rating(c) Value
- ---------------------------------------------------------------
$1,045,000 North Allegheny, PA
School District, Series
A GO UT Refunding
Bonds, 6.35% (AMBAC
INS)/(Original Issue
Yield: 6.498%),
11/1/2012 AAA $ 1,111,442
1,000,000 Pennridge, PA School
District, GO UT Bonds,
6.40%, 3/15/2001 A 1,061,918
5,000,000 Philadelphia, PA School District, GO UT Bonds (Series A), 5.35%
(MBIA
INS), 7/1/2003 AAA 5,192,375
2,000,000 Philadelphia, PA School District, GO UT Bonds (Series A), 5.85%,
7/1/2009 AAA 2,110,364
3,500,000 Philadelphia, PA School District, GO UT Refunding Bonds, 5.30% (MBIA
INS)/ (Original Issue Yield: 5.40%),
7/1/2004 AAA 3,623,445
2,000,000 Philadelphia, PA,
Series A Revenue Bonds,
6.00% (FGIC INS),
6/15/2004 AAA 2,160,428
1,000,000 Pocono Mountain, PA School District, UT GO Bonds, 6.80% (United
States Treasury COL)/ (AMBAC INS),
10/1/2000 AAA 1,002,252
1,000,000 Pocono Mountain, PA
School District, UT GO
Bonds, 6.90% (AMBAC
INS), 10/1/2001 AAA 1,002,339
650,000 South Western School District, PA York, UT GO Bonds, 5.00% (FGIC
INS), 6/15/1998 AAA 655,806
- ---------------------------------------------------------------
(See Notes to Portfolios of Investments)
MARKETVEST PENNSYLVANIA INTERMEDIATE
MUNICIPAL BOND FUND (continued)
- ---------------------------------------------------------------
Principal Credit
Amount Rating(c) Value
- ---------------------------------------------------------------
General Obligation-
continued
$1,000,000 Westmoreland County,
PA, UT GO Refunding
Bonds, 6.35% (AMBAC
INS), 12/1/1999 AAA $ 1,047,045
-----------
TOTAL GENERAL
OBLIGATION (IDENTIFIED
COST $73,847,370) 75,912,222
-----------
REVENUE-61.2%
College-University16.9%
1,550,000 Northampton County, PA
Higher Education
Authority, Refunding
Revenue Bonds, 6.75%
(Lehigh University)/
(MBIA INS), 11/15/1999 AAA 1,637,201
3,975,000 Northampton County, PA
Higher Education
Authority, Revenue
Bonds, 5.375% (Lehigh
University)/(Original
Issue Yield: 5.55%),
11/15/2016 AAA 3,984,616
2,710,000 Northampton County, PA
Higher Education
Authority, Revenue
Bonds, 5.75% (Lehigh
University)/(MBIA INS),
8/15/2003 AAA 2,883,882
5,020,000 Pennsylvania State
Higher Education
Assistance Agency,
Revenue Refunding
Bonds, 6.80% (FGIC
INS), 12/1/2000 AAA 5,340,552
- ---------------------------------------------------------------
- ---------------------------------------------------------------
Principal Credit
Amount Rating(c) Value
- ---------------------------------------------------------------
$3,000,000 Pennsylvania State
Higher Education
Facilities Authority,
Refunding Revenue Bonds
(Series A), 5.50%
(University of
Pennsylvania)/(Original
Issue Yield: 5.55%),
1/1/2009 AA $ 3,095,271
3,750,000 Pennsylvania State
Higher Education
Facilities Authority,
Revenue Refunding
Bonds, 5.35%
(Presbyterian Medical
Center)/(Original Issue
Yield: 5.45%), 1/1/2008 AA 3,873,045
3,035,000 Pennsylvania State
Higher Education
Facilities Authority,
Revenue Refunding
Bonds, 5.75% (Drexel
University)/(MBIA INS),
5/1/2003 AAA 3,221,288
5,000,000 Pennsylvania State
University, Refunding
Revenue Bonds, 5.30%
(Original Issue Yield:
5.40%), 8/15/2003 AA- 5,183,205
860,000 State Public School
Building Authority, PA,
Revenue Bonds, 6.10%
(Harrisburg Area
Community College-
D)/(MBIA INS),
4/1/1999 AAA 886,694
2,000,000 University of Pittsburgh, Refunding Revenue Bonds (Series B), 5.30%
(MBIA INS),
6/1/1999 AAA 2,041,482
- ---------------------------------------------------------------
(See Notes to Portfolios of Investments)
MARKETVEST PENNSYLVANIA INTERMEDIATE
MUNICIPAL BOND FUND (continued)
- ---------------------------------------------------------------
Principal Credit
Amount Rating(c) Value
- ---------------------------------------------------------------
College-University-
continued
$3,440,000 University of
Pittsburgh, Refunding
Revenue Bonds, 5.50%
(MBIA LOC), 6/1/2002 AAA $ 3,597,521
-----------
Total 35,744,757
-----------
Hospital-17.8%
1,790,000 Allegheny County, PA
HDA, Refunding Revenue
Bonds, 5.70% (Magee
Womens
Hospital)/(Original
Issue Yield: 5.85%),
10/1/2001 AAA 1,874,089
1,000,000 Allegheny County, PA HDA, Revenue Bonds, 5.20% (Magee Womens
Hospital)/(FGIC INS)/ (Original Issue Yield:
5.30%), 10/1/2005 AAA 1,031,242
2,800,000 Allegheny County, PA HDA, Revenue Bonds, 5.375% (Children's Hospital
of Pittsburgh)/(Original Issue Yield: 5.641%),
7/1/2017 AAA 2,756,149
2,665,000 Allentown, PA Area
Hospital Authority,
Refunding Revenue
Bonds, 6.50% (Original
Issue Yield: 6.65%),
11/15/2008 BBB 2,824,463
3,045,000 Chester County, PA HEFA, Refunding Revenue Bonds, 5.30% (Main Line
Health Systems)/(MBIA INS)/ (Original Issue Yield: 5.40%),
5/15/2007 AAA 3,102,167
- ---------------------------------------------------------------
- ---------------------------------------------------------------
Principal Credit
Amount Rating(c) Value
- ---------------------------------------------------------------
$ 965,000 Chester County, PA
HEFA, Refunding Revenue
Bonds, 5.50% (Chester
County Hospital,
PA)/(MBIA
INS)/(Original Issue
Yield: 5.70%), 7/1/2007 AAA $ 1,015,093
1,675,000 Chester County, PA
HEFA, Refunding Revenue
Bonds, 5.625% (Chester
County Hospital,
PA)/(MBIA
INS)/(Original Issue
Yield: 5.90%), 7/1/2010 AAA 1,728,394
1,985,000 Chester County, PA
HEFA, Refunding Revenue
Bonds, 5.625% (MBIA
INS)/(Original Issue
Yield: 5.85%),
7/1/2009 AAA 2,076,046
1,195,000 Delaware County
Authority, PA, Revenue
Refunding Bonds, 5.625%
(Dunwoody Village,
Inc.), 4/1/2009 A 1,215,193
1,000,000 Geisinger Authority, PA
Health System,
Refunding Revenue
Bonds, 5.70% (Original
Issue Yield: 5.75%),
7/1/2002 AA 1,049,818
3,000,000 Geisinger Authority, PA
Health System, Revenue
Bonds, 6.50% (Original
Issue Yield: 7.591%),
7/1/2007 AA 3,135,360
1,000,000 Lancaster County, PA
Hospital Authority,
Health Center Refunding
Revenue Bonds, 4.75%
(Masonic Homes),
11/15/2002 A+ 1,006,353
- ---------------------------------------------------------------
(See Notes to Portfolios of Investments)
MARKETVEST PENNSYLVANIA INTERMEDIATE
MUNICIPAL BOND FUND (continued)
- ---------------------------------------------------------------
Principal Credit
Amount Rating(c) Value
- ---------------------------------------------------------------
Hospital-continued
$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 $ 1,050,174
1,270,000 Lehigh County, PA
General Purpose
Authority, Hospital
Refunding Revenue Bonds
(Series 1996A), 5.75%
(Muhlenberg Hospital
Center)/ (Original
Issue Yield: 5.85%),
7/15/2010 A 1,295,641
1,730,000 Lehigh County, PA
General Purpose
Authority, Revenue
Bonds, 5.75%
(Muhlenberg Hospital
Center)/(Original Issue
Yield: 5.85%),
7/15/2010 A 1,764,929
3,250,000 Philadelphia, PA
Hospitals & Higher
Education Facilities
Authority, Refunding
Revenue Bonds (Series
A), 5.25% (Childrens
Hospital of
Philadelphia)/(Original
Issue Yield: 5.55%),
2/15/2007 AA 3,336,639
1,500,000 Philadelphia, PA
Hospitals & Higher
Education Facilities
Authority, Refunding
Revenue Bonds (Series
A), 5.625% (Children's
Hospital of
Philadelphia),
2/15/1999 AA 1,531,772
- ---------------------------------------------------------------
- ---------------------------------------------------------------
Principal Credit
Amount Rating(c) Value
- ---------------------------------------------------------------
$1,000,000 Philadelphia, PA
Hospitals & Higher
Education Facilities
Authority, Revenue
Refunding Bonds, 7.00%
(Magee Rehabilitation
Hospital)/(AMBAC
INS)/(Original Issue
Yield: 7.10%),
12/1/2010 AAA $ 1,106,956
1,350,000 Philadelphia, PA
Hospitals & Higher
Education Facilities
Authority, Revenue
Refunding Bonds, 7.625%
(Albert Einstein
Medical Center, PA)/
(Original Issue Yield:
7.767%), 4/1/2011 BBB+ 1,431,243
2,000,000 Scranton-Lackawanna, PA
Health & Welfare
Authority, Refunding
Revenue Bonds, 5.625%
(Mercy Health Care
Systems)/(MBIA INS)/
(Original Issue Yield:
5.75%), 1/1/2016 AAA 2,026,622
1,350,000 Scranton-Lackawanna, PA
Health & Welfare
Authority, Revenue
Bonds, 5.45% (Moses
Taylor Hospital
Project), 7/1/2003 BBB- 1,359,950
-----------
Total 37,718,293
-----------
Housing-0.7%
1,500,000 Pennsylvania Housing
Finance Authority,
Refunding Revenue
Bonds, 6.00%, 10/1/2013 AA+ 1,585,416
-----------
- ---------------------------------------------------------------
(See Notes to Portfolios of Investments)
MARKETVEST PENNSYLVANIA INTERMEDIATE
MUNICIPAL BOND FUND (continued)
- ---------------------------------------------------------------
Principal Credit
Amount Rating(c) Value
- ---------------------------------------------------------------
Industrial Development
Revenue-6.9%
$1,150,000 Pennsylvania Convention
Center Authority,
Revenue Refunding
Bonds, 6.75% (MBIA
INS)/ (Original Issue
Yield: 6.875%),
9/1/2019 AAA $ 1,291,256
1,000,000 Pennsylvania State IDA,
Refunding Revenue
Bonds, 5.80% (AMBAC
INS), 1/1/2008 AAA 1,071,409
3,000,000 Pennsylvania State IDA,
Revenue Bonds, 6.00%
(AMBAC INS),
7/1/2006 AAA 3,286,026
5,000,000 Pennsylvania State IDA,
Revenue Refunding
Bonds, 6.00% (AMBAC
INS), 7/1/2007 AAA 5,482,205
2,000,000 Philadelphia Authority
for Industrial
Development, Revenue
Bonds, 5.50% (Girard
Estate Coal Mining
Project)/(Original
Issue Yield: 5.75%),
11/15/2016 AA 2,014,184
1,365,000 Philadelphia Authority
for Industrial
Development, Revenue
Bonds, 6.00% (City of
Philadelphia Project)/
(MBIA INS), 2/15/2007 AAA 1,491,612
-----------
Total 14,636,692
-----------
Lease-2.9%
1,500,000 Erie County, PA Prison
Authority , Revenue
Bonds, 6.30% (United
States Treasury COL)/
(MBIA INS), 11/1/1999 AAA 1,567,493
- ---------------------------------------------------------------
- ---------------------------------------------------------------
Principal Credit
Amount Rating(c) Value
- ---------------------------------------------------------------
$4,095,000 Philadelphia, PA
Municipal Authority,
Lease Revenue Bonds,
7.10% (MBIA INS),
11/15/2006 AAA $ 4,565,151
-----------
Total 6,132,644
-----------
Pooled Loan-5.9%
5,000,000 Dauphin County, PA
General Authority
Revenue Bonds, 5.00%
TOBs (AMBAC INS),
6/1/2026 AAA 5,092,070
830,000 Dauphin County, PA
General Authority,
Revenue Refunding
Bonds, 5.10% (Pinnacle
Health System)/(MBIA
INS)/(Original Issue
Yield: 5.20%),
5/15/2008 AAA 839,502
910,000 Dauphin County, PA
General Authority,
Revenue Refunding
Bonds, 5.20% (Pinnacle
Health System)/(MBIA
INS)/(Original Issue
Yield: 5.30%),
5/15/2009 AAA 917,077
1,575,000 Pennsylvania
Infrastructure
Investment Authority,
5.35% (Pennvest),
9/1/2025 AA+ 1,640,128
2,720,000 Pennsylvania
Infrastructure
Investment Authority,
Revenue Bonds, 5.25%
(MBIA INS),
9/1/2007 AAA 2,814,158
1,000,000 Pennsylvania
Infrastructure
Investment Authority,
Revenue Bonds, 6.00%
(MBIA INS),
9/1/2006 AAA 1,093,789
-----------
Total 12,396,724
-----------
- ---------------------------------------------------------------
(See Notes to Portfolios of Investments)
MARKETVEST PENNSYLVANIA INTERMEDIATE
MUNICIPAL BOND FUND (continued)
- ---------------------------------------------------------------
Principal Credit
Amount Rating(c) Value
- ---------------------------------------------------------------
Special Tax-5.9%
$2,930,000 Pennsylvania
Intergovernmental Coop
Authority, Refunding
Revenue Bonds, 4.85%
(FGIC INS), 6/15/2003 AAA $ 2,983,100
2,145,000 Pennsylvania
Intergovernmental Coop
Authority, Refunding
Revenue Bonds, 5.40%
(FGIC INS), 6/15/2009 AAA 2,199,140
4,000,000 Pennsylvania
Intergovernmental Coop
Authority, Revenue
Bonds, 4.80%
(Philadelphia, PA)/
(Commonwealth of
Pennsylvania GTD)/
(Original Issue Yield:
4.90%), 6/15/2002 AAA 4,061,316
3,300,000 Pennsylvania
Intergovernmental Coop
Authority, Revenue
Bonds, 5.50%
(Philadelphia Funding
Program)/(FGIC INS)/
(Original Issue Yield:
5.65%), 6/15/2011 AAA 3,382,929
-----------
Total 12,626,485
-----------
Utilities-4.2%
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 1,037,370
- ---------------------------------------------------------------
- ---------------------------------------------------------------
Principal Credit
Amount Rating(c) Value
- ---------------------------------------------------------------
$1,000,000 Philadelphia, PA Water
& Wastewater System,
Refunding Revenue
Bonds, 5.50% (Original
Issue Yield: 5.61%),
6/15/2006 AAA $ 1,052,593
3,000,000 Philadelphia, PA Water
& Wastewater System,
Refunding Revenue
Bonds, 6.25% (MBIA
INS), 8/1/2007 AAA 3,350,103
2,150,000 Philadelphia, PA Water
& Wastewater System,
Revenue Refunding
Bonds, 6.25% (MBIA
INS), 8/1/2008 AAA 2,381,617
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 1,000,116
-----------
Total 8,821,799
-----------
TOTAL REVENUE
(IDENTIFIED COST
$127,006,847) 129,662,810
-----------
TOTAL LONG-TERM
MUNICIPALS
(IDENTIFIED COST
$200,854,217) 205,575,032
-----------
OPEN-ENDED INVESTMENT
COMPANY-3.5%
7,491,191 PNC Pennsylvania
Municipal Money Market
Portfolio (at net asset
value) 7,491,191
-----------
TOTAL INVESTMENTS
(IDENTIFIED COST
$208,345,408) $213,066,223
============
- ---------------------------------------------------------------
(See Notes to Portfolios of Investments)
MARKETVEST SHORT-TERM
BOND FUND
- ------------------------------------------------------
Principal
Amount Value
- ------------------------------------------------------
ASSET-BACKED
SECURITIES-12.2%
Finance-12.2%
$2,692,586 AFG Receivables Trust,
Series 1996-D, 6.65%,
10/15/2001 $ 2,721,639
1,860,819 AFG Receivables Trust,
Series 1996-C, 6.95%,
7/15/2001 1,871,873
2,924,452 Green Tree Home
Improvement Loan Trust,
Series 1995-B, 8.15%,
3/15/2015 3,011,308
2,000,000 Green Tree Home
Improvement Loan Trust,
Series 1995-F, 6.75%,
1/15/2021 1,989,660
2,000,000 Green Tree Home
Improvement Loan Trust,
Series 1996-F, 7.25%,
11/15/2027 1,982,500
625,000 Key Auto Finance Trust,
Series 1997-1, 6.40%,
4/15/2004 623,238
5,268,734 Securitized Asset Sales,
Inc., Series 1995-7,
Class A4, 7.00%,
1/25/2026 5,286,022
-----------
TOTAL ASSET-BACKED
SECURITIES (IDENTIFIED
COST $17,439,772) 17,486,240
-----------
COMMERCIAL PAPER-4.8%
Technology-4.8%
6,857,000 Lucent Technologies, Inc.
(at amortized cost) 6,855,945
-----------
CORPORATE BONDS-34.5%
Banking-0.7%
1,000,000 NBD Bank, N.A. Indiana,
Medium Term Note, 7.50%,
2/28/1998 1,008,236
-----------
- ------------------------------------------------------
- ------------------------------------------------------
Principal
Amount Value
- ------------------------------------------------------
Finance-23.1%
$1,000,000 American General Finance
Corp., Medium Term Note,
7.29%, 3/20/1998 $ 1,007,821
2,000,000 American General Finance
Corp., Sr. Note, 7.25%,
3/1/1998 2,013,424
2,000,000 Bankers Trust New York
Corp., Sr. Note, 6.625%,
7/30/1999 2,012,600
2,000,000 Chrysler Financial Corp.,
6.95%, 3/25/2002 2,025,686
1,000,000 Chrysler Financial Corp.,
Medium Term Note, 7.50%,
3/16/1998 1,008,779
3,000,000 Comdisco, Inc., 6.50%,
4/30/1999 3,014,250
3,000,000 Ford Motor Credit Corp.,
7.00%, 9/25/2001 3,045,906
2,000,000 General Motors Acceptance
Corp., Note, 6.45%,
4/15/1999 2,008,354
2,000,000 Lehman Brothers Holdings,
Inc., 6.625%, 11/15/2000 2,001,566
3,000,000 MacSaver Financial
Services, 7.875%,
8/1/2003 3,022,137
2,000,000 New England Educational
Loan Marketing Corp.,
Note, 6.125%, 7/17/1998 2,001,042
3,000,000 Salomon, Inc., 6.50%,
3/1/2000 2,994,816
2,000,000 Smith Barney Holdings,
Inc., 6.625%, 7/1/2002 1,994,310
2,000,000 Travelers Aetna Property
& Casualty Corp., Sr.
Note, 6.75%, 4/15/2001 2,008,324
3,000,000 Xerox Credit Corp.,
Medium Term Note, 7.125%,
4/1/1998 3,021,288
-----------
Total 33,180,303
-----------
- ------------------------------------------------------
(See Notes to Portfolios of Investments)
MARKETVEST SHORT-TERM
BOND FUND (continued)
- ---------------------------------------------------------
Principal
Amount Value
- ---------------------------------------------------------
Industrial Services-2.1%
$ 3,000,000 Sears Roebuck Acceptance
Corp., 6.80%, 5/3/2001 $ 3,020,631
------------
Producer Manufacturing-2.3%
3,000,000 Joy Technologies, Inc.,
10.25%, 9/1/2003 3,244,227
------------
Retail Trade-1.4%
2,000,000 Rite Aid Corp., 6.70%,
12/15/2001 2,004,220
------------
Services-3.8%
3,000,000 Hertz Corp., 7.00%,
4/15/2001 3,042,936
------------
2,500,000 Scholastic Corp., 7.00%,
12/15/2003 2,499,920
------------
Total 5,542,856
------------
Utilities-1.1%
1,500,000 Massachusetts Electric Co.,
7.80%, 2/13/1998 1,511,960
------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST
$46,420,231) 49,512,433
------------
MORTGAGE BACKED
SECURITIES-4.7%
Finance-4.7%
2,800,000 Contimortgage Home Equity
Loan Trust 1997-2, 6.77%,
10/15/2013 2,816,212
2,534,790 Prudential Home Mortgage
Securities 1992-45, 6.50%,
1/25/2000 2,535,550
1,353,152 Prudential Home Mortgage
Securities, Class A3, 6.25%,
3/25/2000 1,352,570
------------
TOTAL MORTGAGE BACKED
SECURITIES (IDENTIFIED COST
$6,658,167) 6,704,332
------------
U.S. GOVERNMENT
AGENCIES-25.5%
Federal Farm Credit
Bank-1.1%
1,500,000 7.51%, 2/13/1998 1,512,038
------------
- ---------------------------------------------------------
- ---------------------------------------------------------
Principal
Amount Value
- ---------------------------------------------------------
Federal Home Loan Bank-2.5%
$ 2,000,000 7.31%, 6/20/2005 $ 2,000,874
1,500,000 7.54%, 2/13/1998 1,511,558
------------
Total 3,512,432
------------
Federal Home Loan
Mortgage Corporation-2.6%
1,207,085 5.50%, 10/1/1998 1,205,672
2,000,000 7.00%, 8/7/2000 2,015,316
557,457 7.50%, 2/1/1998 559,462
------------
Total 3,780,450
------------
Federal Home Loan
Mortgage Corporation
REMIC-3.9%
1,444,256 Series 1509-A, 6.50%,
10/15/2000 1,452,734
3,000,000 Series 1397-C, 7.00%,
6/15/2020 3,023,970
1,163,627 Series 193-D, 9.00%,
11/15/2021 1,168,792
------------
Total 5,645,496
------------
Federal National Mortgage
Association ARM-2.1%
2,986,890 (e)6.713%, 4/1/2027 3,007,440
------------
Federal National Mortgage
Association-11.8%
2,000,000 6.02%, 1/20/1998 2,002,980
2,000,000 6.23%, 11/29/2001 1,976,104
3,000,000 6.30%, 12/3/2001 2,974,323
2,000,000 6.375%, 10/7/1999 2,001,372
2,000,000 6.58%, 10/26/2001 2,000,078
3,000,000 7.02%, 9/17/2001 3,042,327
3,000,000 7.36%, 9/29/1999 3,004,521
------------
Total 17,001,705
------------
Federal National Mortgage
Association REMIC-1.5%
2,126,723 Series 1991-141-PX, 8.00%,
7/25/2018 2,164,615
------------
TOTAL GOVERNMENT AGENCIES
(IDENTIFIED COST
$36,625,976) 36,624,176
------------
- ---------------------------------------------------------
(See Notes to Portfolios of Investments)
MARKETVEST SHORT-TERM
BOND FUND (continued)
- ---------------------------------------------------------
Principal
Amount Value
- ---------------------------------------------------------
U.S. TREASURY
OBLIGATIONS-14.1%
U.S. Treasury Notes-14.1%
$ 3,000,000 6.25%, 5/31/2000 $ 3,015,000
5,000,000 6.375%, 5/15/1999 5,034,375
3,000,000 6.50%, 5/31/2001 3,032,811
2,000,000 6.75%, 6/30/1999 2,028,124
3,000,000 6.875%, 3/31/2000 3,058,125
4,000,000 6.875%, 8/31/1999 4,068,748
------------
TOTAL U.S. TREASURY
OBLIGATIONS (IDENTIFIED
COST $23,232,640) 20,237,183
------------
(b) REPURCHASE
AGREEMENT-7.0%
10,000,000 Merrill Lynch & Co., Inc.,
5.55%, dated 8/29/1997,
due 9/2/1997 (at
amortized cost) 10,000,000
------------
TOTAL INVESTMENTS
(IDENTIFIED COST
$147,232,731) $147,420,309
============
- ---------------------------------------------------------
(See Notes to Portfolios of Investments)
MARKETVEST INTERMEDIATE
U.S. GOVERNMENT BOND FUND
- ---------------------------------------------------------
Principal
Amount Value
- ---------------------------------------------------------
U.S. GOVERNMENT AGENCY
OBLIGATIONS-16.8%
Federal Home Loan
Mortgage REMIC-4.0%
$6,296,502 7.00%, 9/15/2023, Series
1930-B $ 6,142,578
5,000,000 7.50%, 2/15/2020, Series
1339-PI 5,099,785
-----------
Total 11,242,363
-----------
Federal National Mortgage
Association-1.1%
2,000,000 7.875%, 2/24/2005 2,157,990
1,000,000 9.05%, 4/10/2000 1,068,928
-----------
Total 3,226,918
-----------
Federal National Mortgage
Association REMIC-11.7%
8,500,000 6.50%, 10/25/2023, Series
1993-204-EB 8,256,968
11,806,000 6.50%, 6/25/2022, Series
1994-104-PH 11,568,699
13,000,000 7.15%, 8/25/2020, Series
1992-185-G 12,860,731
-----------
Total 32,686,398
-----------
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS
(IDENTIFIED COST
$47,500,834) 47,155,679
-----------
ASSET-BACKED
SECURITIES-1.1%
Finance-1.1%
3,000,000 Fleet Finance, Inc.
1993-1, 7.30%, 3/20/2023
(identified cost
$2,998,125) 3,051,780
-----------
CORPORATE BONDS-14.9%
Energy Minerals-0.4%
1,000,000 Occidental Petroleum
Corp., 8.27%, 12/2/2002 1,039,069
-----------
- ---------------------------------------------------------
- ---------------------------------------------------------
Shares or
Principal
Amount Value
- ---------------------------------------------------------
Finance-11.2%
$1,000,000 Banco Santander, 7.875%,
4/15/2005 $ 1,051,883
3,000,000 Bankers Trust New York
Corp., 7.15%, 8/14/2012 2,924,067
5,765,000 Central Fidelity Banks,
Inc., 8.15%, 11/15/2002 6,092,440
2,000,000 Conseco, Inc., 8.125%,
2/15/2003 2,088,408
3,000,000 Ford Motor Credit Corp.,
8.375%, 1/15/2000 3,131,601
2,000,000 Green Tree Financial
Corp., 10.25%, 6/1/2002 2,269,770
3,500,000 MacSaver Financial
Services, 7.60%-7.875%,
8/1/2003-8/1/2007 3,463,537
5,000,000 Merrill Lynch & Co.,
Inc., 7.15%, 7/30/2012 5,015,530
4,000,000 PaineWebber Group, Inc.,
8.25%, 5/1/2002 4,228,088
1,000,000 Societe Generale, New
York, 7.40%, 6/1/2006 1,020,723
-----------
Total 31,286,047
-----------
Retail Trade-2.2%
2,000,000 Dayton-Hudson Corp.,
7.25%, 9/1/2004 2,032,954
4,000,000 Limited, Inc., 9.125%,
2/1/2001 4,270,780
-----------
Total 6,303,734
-----------
Services-0.7%
2,000,000 Hilton Hotels Corp.,
7.00%, 7/15/2004 1,978,222
-----------
Utilities-0.4%
1,000,000 Union Electric Co.,
8.75%, 12/1/2021 1,090,639
-----------
TOTAL CORPORATE BONDS
(IDENTIFIED COST
$41,662,311) 41,697,711
-----------
- ---------------------------------------------------------
(See Notes to Portfolios of Investments)
MARKETVEST INTERMEDIATE
U.S. GOVERNMENT BOND FUND (continued)
- ---------------------------------------------------------
Shares or
Principal
Amount Value
- ---------------------------------------------------------
CORPORATE NOTE-0.3%
Services-0.3%
$1,000,000 Scholastic Corp., 7.00%,
12/15/2003 (identified
cost $1,007,080) $ 999,968
-----------
PREFERRED STOCKS-- 0.4%
Finance-0.2%
20,000 Bank of New York Capital
Trust II, 7.80% 507,500
-----------
Utilities-Telephone-0.2%
20,000 MCI Capital I, 8.00% 510,000
-----------
TOTAL PREFERRED STOCKS
(IDENTIFIED COST
$996,250) 1,017,500
-----------
U.S. TREASURY
OBLIGATIONS-63.7%
U.S. Treasury Bonds-25.4%
34,000,000 11.75%, 2/15/2001 39,865,000
20,000,000 8.875%, 8/15/2017 24,806,240
5,000,000 9.25%, 2/15/2016 6,365,625
-----------
Total 71,036,865
-----------
U.S. Treasury Notes-38.3%
12,000,000 7.25%, 8/15/2004 12,611,244
21,000,000 7.50%, 11/15/2001 21,990,927
20,000,000 8.75%, 8/15/2000 21,412,500
31,000,000 9.125%, 5/15/1999 32,579,047
18,000,000 9.25%, 8/15/1998 18,568,116
-----------
Total 107,161,834
-----------
TOTAL U.S. TREASURY
OBLIGATIONS (IDENTIFIED
COST $178,960,156) 178,198,699
-----------
COMMERCIAL PAPER-2.5%
Finance-2.5%
6,885,000 Merrill Lynch & Co., Inc., 5.55%, 9/2/97
(at amortized cost) 6,885,000
-----------
TOTAL INVESTMENTS
(IDENTIFIED COST
$280,009,756) $279,006,337
============
- ---------------------------------------------------------
(See Notes to Portfolios of Investments)
MARKETVEST GROUP OF FUNDS
Notes to Portfolios of Investments August 31, 1997 (unaudited)
(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 this portfolio:
ADR -- American Depositary Receipt
AMBAC -- American Municipal Bond Assurance Corporation
ARM -- Adjustable Rate Mortgage
COL -- Collateralized
FGIC -- Financial Guaranty Insurance Company
FSA -- Financial Security Assurance
GO -- General Obligation
GTD -- Guaranteed
HDA -- Hospital Development Authority
HEFA -- Health and Education Facilities Authority
IDA -- Industrial Development Authority
INS -- Insured
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance
PRF -- Prerefunded
REMIC -- Real Estate Mortgage Investment Conduit
TOBs -- Tender Option Bonds
UT -- Unlimited Tax
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
COST OF
INVESTMENTS NET UNREALIZED GROSS GROSS TOTAL
FOR FEDERAL TAX APPRECIATION UNREALIZED UNREALIZED NET
FUND PURPOSES (DEPRECIATION) APPRECIATION DEPRECIATION ASSETS*
- -------------------------------------------------------------------------------------------------------------------------------
Marketvest Equity Fund $472,241,537 $144,210,345 $146,779,107 $2,568,762 $612,984,147
Marketvest International Equity Fund $40,294,549 $ 2,041,894 $ 2,041,894 -- $42,337,045
Marketvest Pennsylvania Intermediate
Municipal Bond Fund $208,345,408 $ 4,720,815 $ 4,896,545 $ 175,730 $211,904,916
Marketvest Short-Term Bond Fund $147,232,731 $ 187,578 $ 530,432 $ 342,854 $143,548,999
Marketvest Intermediate U.S. Government
Bond Fund $280,009,756 $(1,003,419) $ 479,006 $1,482,425 $279,907,239
* The categories of investments are shown as a percentage of net assets at
August 31, 1997.
(See Notes which are an integral part of the Financial Statements)
MARKETVEST GROUP OF FUNDS
Statements of Assets and Liabilities August 31, 1997 (unaudited)
- -------------------------------------------------------------------------------------------------------------------------------
MARKETVEST MARKETVEST
PENNSYLVANIA INTERMEDIATE
MARKETVEST INTERMEDIATE MARKETVEST U.S.
MARKETVEST INTERNATIONAL MUNICIPAL SHORT-TERM GOVERNMENT
EQUITY FUND EQUITY FUND BOND FUND BOND FUND BOND FUND
- -------------------------------------------------------------------------------------------------------------------------------
ASSETS:
Total Investments in securities,
at value $616,451,882 $42,336,443 $213,066,223 $147,420,309 $279,006,337
Cash 26 -- 337 503
Income receivable 1,438,188 2,625 2,921,549 2,218,432 2,738,723
Receivable for shares sold 120,115 -- -- -- --
--------------- --------------- --------------- --------------- ---------------
Total assets 618,010,211 42,339,068 215,987,772 149,639,078 281,745,563
--------------- --------------- --------------- --------------- ---------------
LIABILITIES:
Payable for investments purchased 4,519,090 -- 3,179,095 5,289,095 --
Income distribution payable -- -- 773,396 691,592 1,661,515
Accrued expenses 506,974 2,023 130,365 109,392 176,809
--------------- --------------- --------------- --------------- ---------------
Total liabilities 5,026,064 2,023 4,082,856 6,090,079 1,838,324
--------------- --------------- --------------- --------------- ---------------
NET ASSETS CONSIST OF:
Paid in capital 432,139,907 39,886,582 207,090,736 143,597,043 285,004,204
Net unrealized appreciation
(depreciation) of investments 144,210,345 2,041,894 4,720,815 187,578 (1,003,419)
Accumulated net realized gain (loss)
on investments 36,657,600 112,740 93,365 (230,975) (4,095,133)
Undistributed net investment
income/Distributions in excess of
net investment income (23,705) 295,829 -- (4,647) 1,587
--------------- --------------- --------------- --------------- ---------------
Total Net Assets $612,984,147 $42,337,045 $211,904,916 $143,548,999 $279,907,239
--------------- --------------- --------------- --------------- ---------------
NET ASSET VALUE PER SHARE, AND
REDEMPTION PROCEEDS PER SHARE
(net assets / shares outstanding) $13.50 $10.61 $10.12 $9.95 $9.75
--------------- --------------- --------------- --------------- ---------------
Offering Price Per Share**** $14.17* $10.77*** $10.49** $10.31** $10.10**
--------------- --------------- --------------- --------------- ---------------
SHARES OUTSTANDING: 45,422,215 3,991,613 20,943,710 14,423,080 28,702,532
--------------- --------------- --------------- --------------- ---------------
Investments at identified cost $ 472,241,537 $ 40,294,549 $ 208,345,408 $ 147,232,731 $ 280,009,756
=============== =============== =============== =============== ===============
Investments at tax cost $ 472,241,537 $ 40,294,549 $ 208,345,408 $ 147,232,731 $ 280,009,756
=============== =============== =============== =============== ===============
- -------------------------------------------------------------------------------------------------------------------------------
* Computation of offering price: 100/95.25 of net asset value.
** Computation of offering price: 100/96.50 of net asset value.
*** Computation of offering price: 100/98.50 of net asset value.
**** See "What Shares Cost" in the Prospectus.
(See Notes which are an integral part of the Financial Statements)
MARKETVEST GROUP OF FUNDS
Statements of Operations Six Months Ended August 31, 1997 (unaudited)
- -------------------------------------------------------------------------------------------------------------------------------
MARKETVEST MARKETVEST
PENNSYLVANIA INTERMEDIATE
MARKETVEST INTERMEDIATE MARKETVEST U.S.
MARKETVEST INTERNATIONAL MUNICIPAL SHORT-TERM GOVERNMENT
EQUITY FUND EQUITY FUND(A) BOND FUND BOND FUND BOND FUND
- -------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 5,678,773 $ 376,775 $ -- $ -- $ 19,316
Interest 962,478 52,545 5,639,037 4,795,598 10,825,361
--------------- --------------- --------------- --------------- ---------------
Total income 6,641,251 429,320 5,639,037 4,795,598 10,844,677
--------------- --------------- --------------- --------------- ---------------
EXPENSES:
Investment advisory fee 2,901,947 115,692 812,694 548,988 1,008,567
Administrative personnel
and services fee 435,292 31,288 162,539 109,798 201,714
Custodian fees 31,904 5,675 15,320 19,750 19,185
Transfer and dividend disbursing
agent fees and expenses 15,817 6,372 13,226 10,975 15,393
Directors'/Trustees' fees 5,390 4,311 5,389 5,389 5,389
Auditing fees 8,067 -- 8,066 8,067 8,067
Legal fees 2,558 1,593 1,779 1,397 2,447
Portfolio accounting fees 59,009 17,698 42,444 26,459 39,168
Share registration costs 10,535 16,538 11,250 5,738 7,499
Printing and postage 7,467 3,868 6,500 3,062 3,514
Insurance premiums 3,073 1,251 710 1,280 813
Taxes 30,377 -- -- 4,500 11,817
Miscellaneous 9,676 3,470 9,227 6,588 7,607
--------------- --------------- --------------- --------------- ---------------
Total expenses 3,521,112 207,756 1,089,144 751,991 1,331,180
--------------- --------------- --------------- --------------- ---------------
Waivers and Reimbursements--
Waiver of investment advisory fee (580,389) (26,698) (162,539) (109,798) (201,714)
Waiver of administrative personnel
and services fee -- (12,613) (48,375) (32,681) (60,096)
Reimbursement of other operating
expenses -- (34,954) -- -- --
--------------- --------------- --------------- --------------- ---------------
Total waivers and reimbursements (580,389) (74,265) (210,914) (142,479) (261,810)
--------------- --------------- --------------- --------------- ---------------
Net expenses 2,940,723 133,491 878,230 609,512 1,069,370
--------------- --------------- --------------- --------------- ---------------
Net investment income 3,700,528 295,829 4,760,807 4,186,086 9,775,307
--------------- --------------- --------------- --------------- ---------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) on
investments 36,656,265 112,740 458,942 (227,394) (3,146,733)
Net change in unrealized appreciation/
depreciation of investments 47,342,235 2,041,894 120,445 338,839 1,502,492
--------------- --------------- --------------- --------------- ---------------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS 83,998,500 2,154,634 579,387 111,445 (1,644,241)
--------------- --------------- --------------- --------------- ---------------
CHANGE IN NET ASSETS RESULTING
FROM OPERATIONS $87,699,028 $2,450,463 $5,340,194 $ 4,297,531 $8,131,066
=============== =============== =============== =============== ===============
- -------------------------------------------------------------------------------------------------------------------------------
(a) For the period from April 1, 1997 (date of initial public investment) to
August 31, 1997.
(See Notes which are an integral part of the Financial Statements)
MARKETVEST GROUP OF FUNDS
Statements of Changes in Net Assets Six Months Ended August 31, 1997 (unaudited)
- -------------------------------------------------------------------------------------------------------------------------------
MARKETVEST MARKETVEST
PENNSYLVANIA INTERMEDIATE
MARKETVEST INTERMEDIATE MARKETVEST U.S.
MARKETVEST INTERNATIONAL MUNICIPAL SHORT-TERM GOVERNMENT
EQUITY FUND EQUITY FUND(A) BOND FUND BOND FUND BOND FUND
- -------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATION:
Net investment income $ 3,700,528 $ 295,829 $ 4,760,807 $ 4,186,086 $ 9,775,307
Net realized gain (loss) on investment
transactions 36,656,265 112,740 458,942 (227,394) (3,146,733)
Net change in unrealized appreciation/
depreciation 47,342,235 2,041,894 120,445 338,839 1,502,492
--------------- --------------- --------------- --------------- ---------------
Change in net assets resulting
from operations 87,699,028 2,450,463 5,340,194 4,297,531 8,131,066
--------------- --------------- --------------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment
income (3,775,560) -- (4,760,807) (4,196,096) (9,775,307)
Distributions from net realized gain
on investments (12,096,715) -- -- -- --
--------------- --------------- --------------- --------------- ---------------
Change in net assets resulting from
distributions to shareholders (15,872,275) -- (4,760,807) (4,196,096) (9,775,307)
--------------- --------------- --------------- --------------- ---------------
SHARE TRANSACTIONS:
Proceeds from sale of shares 34,460,923 45,757,676 17,739,006 14,376,893 39,785,345
Net asset value of shares issued to
shareholders in payment of
distributions declared 7,780,217 -- 9,764 1,856,246 2,257,392
Cost of shares redeemed (41,972,470) (5,871,094) (27,816,355) (18,963,392) (19,533,080)
--------------- --------------- --------------- --------------- ---------------
Change in net assets resulting from
share transactions 268,670 39,886,582 (10,067,585) (2,730,253) 22,509,657
--------------- --------------- --------------- --------------- ---------------
Change in net assets 72,095,423 42,337,045 (9,488,198) (2,628,818) 20,865,416
NET ASSETS:
Beginning of period 540,888,724 -- 221,393,114 146,177,817 259,041,823
--------------- --------------- --------------- --------------- ---------------
End of period $612,984,147 $42,337,045 $211,904,916 $143,548,999 $279,907,239
--------------- --------------- --------------- --------------- ---------------
Undistributed net investment income -- $ 295,829 -- -- $ 1,587
=============== =============== =============== =============== ===============
Net realized gain (loss) as computed
for federal income tax purposes $36,656,265 $ 112,740 $ 458,942 $ (227,394) $(3,146,733)
=============== =============== =============== =============== ===============
- -------------------------------------------------------------------------------------------------------------------------------
(a) For the period from April 1, 1997 (date of initial public investment) to
August 31, 1997.
(See Notes which are an integral part of the Financial Statements)
MARKETVEST GROUP OF FUNDS
Statements of Changes in Net Assets Period Ended February 28, 1997 (a)
- -------------------------------------------------------------------------------------------------------------------------------
MARKETVEST MARKETVEST
PENNSYLVANIA INTERMEDIATE
INTERMEDIATE MARKETVEST U.S.
MARKETVEST MUNICIPAL SHORT-TERM GOVERNMENT
EQUITY FUND BOND FUND BOND FUND BOND FUND
- -------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATION:
Net investment income $ 5,939,224 $ 9,060,687 $ 6,513,471 $13,729,812
Net realized gain (loss) on investment transactions 21,301,868 (365,577) (3,581) (948,400)
Net change in unrealized appreciation/depreciation 96,868,110 4,600,370 (151,261) (2,505,911)
--------------- --------------- --------------- ---------------
Change in net assets resulting from operations 124,109,202 13,295,480 6,358,629 10,275,501
--------------- --------------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income (5,887,897) (9,060,687) (6,508,108) (13,728,225)
Distributions from net realized gain on investments (8,725,186) -- -- --
--------------- --------------- --------------- ---------------
Change in net assets resulting from
distributions to shareholders (14,613,083) (9,060,687) (6,508,108) (13,728,225)
--------------- --------------- --------------- ---------------
SHARE TRANSACTIONS:
Proceeds from sale of shares 471,399,997 246,896,507 166,519,656 279,905,103
Net asset value of shares issued to shareholders
in payment of distributions declared 6,978,053 5,376 3,233,858 3,481,126
Cost of shares redeemed (46,985,445) (29,843,562) (23,426,218) (20,991,682)
--------------- --------------- --------------- ---------------
Change in net assets resulting from
share transactions 431,392,605 217,058,321 146,327,296 262,394,547
--------------- --------------- --------------- ---------------
Change in net assets 540,888,724 221,293,114 146,177,817 258,941,823
NET ASSETS:
Beginning of period -- 100,000 -- 100,000
--------------- --------------- --------------- ---------------
End of period $540,888,724 $221,393,114 $146,177,817 $259,041,823
=============== =============== =============== ===============
Undistributed net investment income $ 51,327 -- $ 5,363 $ 1,587
=============== =============== =============== ===============
Net realized gain (loss) as computed
for federal income tax purposes $21,301,868 ($ 365,577) ($ 3,581) ($ 923,712)
=============== =============== =============== ===============
- -------------------------------------------------------------------------------------------------------------------------------
(a) For the period from April 1, 1996 (date of initial public investment) to
February 28, 1997.
(See Notes which are an integral part of the Financial Statements)
THIS PAGE INTENTIONALLY LEFT BLANK
Financial Highlights
(For a share outstanding throughout each period)
DISTRIBUTIONS
TO
SHAREHOLDERS
NET ASSET NET REALIZED AND DISTRIBUTIONS TO FROM NET
VALUE, NET UNREALIZED TOTAL FROM SHAREHOLDERS FROM REALIZED
BEGINNING INVESTMENT GAIN/(LOSS) ON INVESTMENT NET INVESTMENT GAIN ON TOTAL
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME INVESTMENTS DISTRIBUTIONS
- -------------------------------------------------------------------------------------------------------------------------------
MARKETVEST EQUITY FUND
2/28/97(a) $10.00 0.14 2.10 2.24 (0.14) (0.19) (0.33)
8/31/97(b) $11.91 0.08 1.86 1.94 (0.08) (0.27) (0.35)
MARKETVEST INTERNATIONAL EQUITY FUND
8/31/97(c) $10.00 0.07 0.54 0.61 -- -- --
MARKETVEST PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
2/28/97(a) $10.00 0.40 0.09 0.49 (0.40) -- (0.40)
8/31/97(b) $10.09 0.22 0.03 0.25 (0.22) -- (0.22)
MARKETVEST SHORT-TERM BOND FUND
2/28/97(a) $10.00 0.49 (0.05) 0.44 (0.49) -- (0.49)
8/31/97(b) $ 9.95 0.29 -- 0.29 (0.29) -- (0.29)
MARKETVEST INTERMEDIATE U.S. GOVERNMENT BOND FUND
2/28/97(a) $10.00 0.59 (0.18) 0.41 (0.59) -- (0.59)
8/31/97(b) $ 9.82 0.36 (0.07) 0.29 (0.36) -- (0.36)
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from April 1, 1996 (date of initial
public investment) to February 28, 1997.
(b) Six Months Ended August 31, 1997. (unaudited)
(c) Reflects operations for the period from April 1, 1997 (date of initial
public investment) to August 31, 1997.
(d) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(e) Computed on an annualized basis.
(f) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(g) Represents total commissions paid on portfolio securities divided by total
portfolio shares purchased or sold on which commissions were charged.
(See Notes which are an integral part of the Financial Statements)
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS
----------------------------
NET ASSETS,
END OF
NET ASSET NET EXPENSE PERIOD PORTFOLIO AVERAGE
VALUE, TOTAL INVESTMENT WAIVER/ (000 TURNOVER COMMISSION
END OF PERIOD RETURN(D) EXPENSES INCOME REIMBURSEMENT(F) OMITTED) RATE RATE PAID(G)
- --------------------------------------------------------------------------------------------------------------
$11.91 22.77% 1.05%(e) 1.48%(e) 0.21%(e) $540,889 37% $ 0.0616
$13.50 16.52% 1.02%(e) 1.29%(e) 0.20%(e) $612,984 17% $ 0.0607
$10.61 6.10% 0.75%(e) 1.67%(e) 0.41%(e) $ 42,337 4% --
$10.09 5.03% 0.83%(e) 4.41%(e) 0.19%(e) $221,393 86% --
$10.12 2.55% 0.81%(e) 4.39%(e) 0.19%(e) $211,905 34% --
$ 9.95 4.49% 0.90%(e) 5.47%(e) 0.18%(e) $146,178 112% --
$ 9.95 2.93% 0.83%(e) 5.72%(e) 0.19%(e) $143,549 46% --
$ 9.82 4.18% 0.85%(e) 6.54%(e) 0.18%(e) $259,042 255% --
$ 9.75 2.98% 0.80%(e) 7.27%(e) 0.19%(e) $279,907 230% --
</TABLE>
MARKETVEST GROUP OF FUNDS
Notes to Financial Statements August 31, 1997 (unaudited)
(1) ORGANIZATION
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 five
portfolios (individually referred to as the "Fund" or collectively as the
"Funds") which are presented herein:
<TABLE>
<CAPTION>
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
Portfolio Name Diversification Investment Objective
- -----------------------------------------------------------------------------------------------------------------
Marketvest Equity Fund* diversified Provide growth of principal.
("Equity Fund")
- -----------------------------------------------------------------------------------------------------------------
Marketvest International Equity Fund** diversified Provide long-term capital
("International Equity Fund") appreciation by investing
primarily in shares of other
mutual funds.
- -----------------------------------------------------------------------------------------------------------------
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.
(2) SIGNIFICANT ACCOUNTING POLICIES
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 service deems relevant. U.S. government securities, listed
corporate bonds, other fixed income and asset-backed securities, and
unlisted securities 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.
At February 28, 1997, Intermediate U.S. Government Bond Fund, Pennsylvania
Intermediate Municipal Bond Fund, and Short-Term Bond Fund, for federal
tax purposes, had capital loss carryforwards, as noted below, which will
reduce each Fund's taxable income arising from future net realized gains
on investments, if any, to the extent permitted by the Code, and thus will
reduce the amount of the distributions to shareholders which would
otherwise be necessary to relieve the Funds of any liability for federal
tax.
- --------------------------------------------------------------------------
Total Tax-Loss
Fund Carryforward
- --------------------------------------------------------------------------
Intermediate U.S. Government Bond Fund $923,712
Pennsylvania Intermediate Municipal Bond Fund $365,577
Short-Term Bond Fund $ 3,581
- --------------------------------------------------------------------------
Pursant to the Code, such capital loss carryforwards will expire as follows:
- ----------------------------------------------------------------------------
Intermediate U.S. Government Pennsylvania Intermediate Municipal
Bond Fund Bond Fund
- ----------------------------------------------------------------------------
Expiration Expiration
Expiration Year Amount Expiration Year Amount
- ----------------------------------------------------------------------------
2005 $923,712 2005 $365,577
- ----------------------------------------------------------------------------
- ---------------------------------------
Short-Term Bond Fund
- ---------------------------------------
Expiration Year Expiration Amount
- ---------------------------------------
2005 $3,581
- ---------------------------------------
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.
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires 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:
- ---------------------------------------------------------------------------
Authorized
Fund Shares Par Value
- ---------------------------------------------------------------------------
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
- ---------------------------------------------------------------------------
The Declaration of Trust permits the Trustees of Pennsylvania Intermediate
Municipal Bond Fund and the International Equity 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>
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Pennsylvania
Intermediate
Equity Fund Municipal Bond Fund
----------------------------------------------------------------------
Six Months Six Months
Ended Period Ended Ended Period Ended
August 31, February 28, August 31, February 28,
1997 1997* 1997 1997*
- ------------------------------------------------------------------------------------------------------------------
Shares sold 2,657,056 49,148,379 17,739,006 24,915,809
Shares issued to shareholders in payment
of distributions declared 612,157 626,699 9,764 535
Shares redeemed (3,280,642) (4,341,434) (27,816,355) (2,978,392)
-------------- ----------------- -------------- -----------------
Net change resulting from share
transactions (11,429) 45,433,644 (10,067,585) 21,937,952
============== ================= ============== =================
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Intermediate
U.S. Government
Short-Term Bond Fund Bond Fund
----------------------------------------------------------------------
Six Months Six Months
Ended Period Ended Ended Period Ended
August 31, February 28, August 31, February 28,
1997 1997* 1997 1997*
- ------------------------------------------------------------------------------------------------------------------
Shares sold 1,445,946 16,727,339 4,083,741 28,154,162
Shares issued to shareholders in payment
of distributions declared 186,903 324,445 232,121 351,509
Shares redeemed (1,907,903) (2,353,650) (2,005,715) (2,123,286)
-------------- ----------------- -------------- -----------------
Net change resulting from share
transactions (275,054) 14,698,134 2,310,147 26,382,385
============== ================= ============== =================
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
* For the period from April 1, 1996 (date of initial public investment) to
February 28, 1997.
<TABLE>
<CAPTION>
<S> <C>
- ---------------------------------------------------------------------------------------------
International
Equity Fund
-----------------
Period Ended
August 31,
1997**
- ---------------------------------------------------------------------------------------------
Shares sold 4,527,225
Shares issued to shareholders in payment of distributions declared --
Shares redeemed (535,612)
----------------
Net change resulting from share
transactions 3,991,613
================
- ---------------------------------------------------------------------------------------------
</TABLE>
** For the period from April 1, 1997 (date of initial public investment) to
August 31, 1997.
(4) INVESTMENT ADVISORY FEE AND OTHER
TRANSACTIONS WITH AFFILIATES
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:
- --------------------------------------------------------------------------------
Annual
Fund Rate
- --------------------------------------------------------------------------------
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%
International Equity Fund 0.65%
The Adviser may voluntarily choose to waive a portion of its fee and/or
reimburse certain operating expenses of the Fund. The Adviser can modify or
terminate this voluntary waiver and/or reimbursement 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. FAS can modify or terminate
this voluntary waiver at any time at its sole discretion.
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 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 as follows:
- -------------------------------------------------------------------------------
Expenses of
Organizing Expenses
Fund the Funds Reimbursed
- -------------------------------------------------------------------------------
Equity Fund $32,052 $2,137
Pennsylvania Intermediate Municipal Bond Fund $38,575 $2,572
Short-Term Bond Fund $30,839 $2,056
Intermediate U.S. Government Bond Fund $30,886 $2,059
International Equity Fund $ 5,703 --
- -------------------------------------------------------------------------------
INTERFUND TRANSACTIONS--During the period ended August 31, 1997, the
Corporation and Trust engaged in purchase transactions with trust funds that
have a common investment adviser (or affiliated investment advisers), common
Directors/Trustees, and/or common Officers. These purchase transactions were
made at current market value or cost pursuant to Rule 17a-7 under the Act.
Interfund transactions were as follows:
- ------------------------------------------------------------------------------
Fund Purchases Sales
- ------------------------------------------------------------------------------
International Equity Fund $32,051,537 $0
- ------------------------------------------------------------------------------
GENERAL--Certain of the Officers and Directors or Trustees of the Corporation
and Trust are Officers and Directors or Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended August 31, 1997, were as follows:
- ------------------------------------------------------------------------------
Fund Purchases Sales
- ------------------------------------------------------------------------------
Equity Fund $ 90,319,059 $109,477,966
Pennsylvania Intermediate Municipal Bond Fund $ 71,668,160 $ 83,679,287
Short-Term Bond Fund $ 59,968,828 $ 66,243,683
Intermediate U.S. Government Bond Fund $614,555,137 $586,674,310
International Equity Fund $ 41,001,537 $ 1,500,000
- ------------------------------------------------------------------------------
(6) CONCENTRATION OF CREDIT RISK
Since 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, 1997, 65.3%
of the securities in Pennsylvania Intermediate Municipal Bond Fund were 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 27.1% of total investments.
International Equity Fund invests in equity and fixed income securities of
non-U.S. issuers. Although the Fund maintains a diversified investment
portfolio, the political or economic developments within a particular country
or region may have an adverse effect on the ability of domiciled issuers to
meet their obligations. Additionally, political or economic developments may
have an effect on the liquidity and volatility of portfolio securities and
currency holdings.
MARKETVEST GROUP OF FUNDS
------------------------------------------------
DIRECTORS/TRUSTEES AND OFFICERS
- ------------------------------------ ------------------------------------
DIRECTORS/TRUSTEES OFFICERS
EDWARD C. GONZALES
MARTIN B. EBBERT, JR. Chairman, President and Treasurer
EDWARD C. GONZALES JEFFREY W. STERLING
Vice President and Assistant Treasurer
CLYDE M. MCGEARY VICTOR R. SICLARI
Secretary
GEORGE A. OMINSKI TIMOTHY S. JOHNSON
Assistant Secretary
RICHARD SEIDEL
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.
Combined semi-annual
report for
Marketvest Equity Fund
Marketvest International
Equity Fund
Marketvest Pennsylvania Intermediate
Municipal Bond Fund
Marketvest Short-Term Bond Fund
Marketvest Intermediate U.S.
Government Bond Fund
[LOGO] Dauphin Deposit Bank August 1997
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 is a
subsidiary of Federated Investors. [LOGO]
CUSIP 57061D107 MARKETVEST FUNDS
CUSIP 57061E105
CUSIP 57061E204
CUSIP 57061E303
CUSIP 57061D206
G01834-01(10/97)
