41
Registration No. 33-99520
File Number: 811-09134
United States
Securities and Exchange Commission
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No.
Post-Effective Amendment No. 2 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF
1940 X
Amendment No. 2 [X]
Exact name of Registrant as Specified in Charter:
Manor Investment Funds, Inc.
Address of Principal Executive Offices:
15 Chester Commons
Malvern, PA 19355
610-722-0900
Name and Address of Agent for Service:
Daniel A. Morris
15 Chester Commons
Malvern, PA 19355
Approximate Date of Proposed Public Offering:
As soon as practible after the Registration
Statement becomes effective.
It is proposed that this filing will become effective:
X immediately upon filing pursuant to paragraph (b)
on 3/31/97 pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)
on (date) pursuant to paragraph (a) of rule 485
Calculation of Registration Fee Under the Securities Act of
1933
No additional shares are being registered at this time.
Pursuant to the requirements of (the Securities Act of
1933 and) the Investment Company Act of 1940 the Registrant
(certifies that it meets all of the requirements for
effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and) has duly
caused this Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorized, in the
Borough of Malvern, and State of Pennsylvania on the 31st
day of March, 1997.
Manor Investment Funds, Inc.
by Daniel A. Morris, President
MANOR INVESTMENT FUNDS, INC.
CROSS REFERENCE SHEET
(Pursuant to Rule 481 showing the location in the
Prospectus and the Statement of Additional Information of
the responses to the Items of Parts A and B of Form N-1A.)
Part A INFORMATION REQUIRED IN A PROSPECTUS
Captions in Filing
Item Cover Page Cover Page
1.
Item Synopsis Expense Information
2.
Item Condensed Financial Financial Highlights;
3. Information Performance Information
Item General Description of Introduction; Investment
4. Registrant Objective and Policies
Item Management of the Fund Management of the Fund;
5. Capital Structure
Item Management's Discussion of Performance Information
5A. Fund Performance
Item Capital Stock and other Capitalization; Shareholder
6. Securities Reports
Item Purchase of Securities Being Shareholder Transactions
7. Offered
Item Redemption or Repurchase Shareholder Transactions
8.
Item Legal Proceedings Not Applicable
9.
Part B INFORMATION REQUIRED IN A STATEMENT OF
ADDITIONAL INFORMATION
Item Cover Page Cover Page
10.
Item Table of Contents Table of Contents
11.
Item General Information and Not Applicable
12. History
Item Investment Objectives and Investment Restrictions
13. Policies
Item Management of the Registrant Officers & Directors of the
14. Fund
Item Control Persons and Principal Shareholders
15. Principal Holders
of Securities
Item Investment Advisory & Other Included in Prospectus under
16. Services "Management of the Fund";
Investment Adviser;
Custodian; Independent
Accountants
Item Brokerage Allocation Brokerage
17.
Item Capital Stock & Other Included in Prospectus under
18. Securities "Capital Structure"
Item Purchase, Redemption & Included in Prospectus under
19. Pricing of "Shareholder Transactions";
Securities Being Offered Determination of Net Asset
Value and Performance
Item Tax Status Tax Status
20.
Item Underwriters Not Applicable
21.
Item Calculation of Performance Determination of Net Asset
22. Data Value and Performance
Item Financial Statements Financial Statements
23.
Part C OTHER INFORMATION
Item Financial Statements & Financial Statements &
24. Exhibits Exhibits
Item Persons Controlled by or Control Persons
25. Under
Common Control
Item Number of Holders of Number of Shareholders
26. Securities
Item Indemnification Indemnification
27.
Item Business & Other Connections Activities of Investment
28. of Advisor
Investment Advisors
Item Principal Underwriters Principal Underwriter
29.
Item Location of Accounts & Location of Accounts &
30. Records Records
Item Management Services Not Applicable
31.
Item Undertakings Not Applicable
32.
SIGNATURES
SIGNATURES
SUMMARY PROSPECTUS Not
Applicable
CODE OF ETHICS Code of
Ethics
Manor
Investment Funds, Inc. Prospectus
Malvern, PA 19355 March 31, 1997
610-722-0900
800-787-3334
The Fund & Investment Objective
Manor Investment Funds, Inc. is an open-end non-diversified
management investment company whose primary objective is
capital appreciation. A secondary objective is to provide a
moderate level of current income. The Fund seeks to achieve
its objectives primarily by investing in common stocks and
securities convertible into common stocks.
Fund Share Purchase
Capital shares of the Fund may only be purchased directly
from the Fund at net asset value as next determined after
receipt of order. The minimum initial purchase is $1,000
and the minimum subsequent purchase is $100.
Additional Information
This Prospectus, which should be retained for future
reference, is designed to set forth concisely the
information that you should know before you invest. This
Prospectus does not set forth all of the information
included in the Registration Statement and Exhibits thereto
which the Fund has filed with the Securities and Exchange
Commission. A Statement of Additional Information, dated
March 15, 1997, which is part of the Registration Statement
is incorporated by reference in this Prospectus. A copy of
the Statement may be obtained without charge, by writing or
calling the Fund directly at 610-722-0900.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Manor Investment Funds, Inc.
Table of Contents
Expense Information 2
Introduction 3
Financial Highlights 3
Investment Objective 3
and Policies
Investment Risks 4
Tax Status 4
Investment Adviser 5
Capital Structure 6
Shareholder 6
Transactions
Retirement Plans 7
Pricing of Shares 7
Brokerage 8
Management of Fund 8
Reports to Shareholders 8
Share Purchase 9
Application
Performance Information 11
EXPENSE INFORMATION
The following illustrates all expenses and fees that a
shareholder of Manor Investment Funds, Inc. will incur. The
expenses and fees set forth are estimates based on the
expected operating expenses of the Fund for its first full
year of operation.
Shareholder Transaction
Expenses
Sales load imposed on purchases No
ne
Sales load imposed on No
reinvested dividends ne
Redemption fees No
ne
Exchange fees No
ne
IRA Trustee fees No
ne
Annual Fund Operating Expenses
Management and advisory 1.
expenses 0%
12 b-1 fees No
ne
All other expenses 0.
5%
Total operating expenses 1.
5%
The purpose of this table is to assist investors in
understanding the various costs and expenses that an
investor in the Fund will bear directly and indirectly. The
following example illustrates the expenses paid on a $1,000
investment over various time periods assuming (1) a 5%
annual rate of return and (2) redemption at the end of each
time period. As noted above, the fund charges no redemption
fees.
1 Year 3 Years
$15 $47
This example should not be considered a representation of
past or future expenses or performance. Actual expenses may
be greater or less than those shown.
INTRODUCTION
Manor Investment Funds, Inc. (the "Fund") is an open-end non-
diversified management investment company. The Fund was
incorporated in Pennsylvania on September 13, 1995. The
Fund's registered office is 15 Chester Commons, Malvern, PA
19355.
FINANCIAL HIGHLIGHTS
Year Since
Ending Inception
9/30/95
1996 1995
PER SHARE OPERATING
PERFORMANCE:
Net Asset Value, beginning $ 9.97 $ 10.00
Net Investment Income (loss) 0.07 0.02
Net Realized and Unrealized - 0 - 0 -
gain (loss) -
Total from 0.07 0.02
Operations
Dividends from net 0.07 0.03
investment income
Dividends from net realized - 0 0 -
gains -
0.07
0.07
Net Asset Value, ending $ 11.13 $ 9.97
Total Investment Return 11.98 % - 0.3 %
Ratios/Supplemental Data:
Net assets, end of year $ $
394,670 111,063
Ratio of expenses to average 1.50 % 0.38 % *
net assets
Ratio of Net Investment 0.67 % 0.34 % *
Income to Aveage Assets
Portfolio Turnover rate 14 % - 0 -
Average commission rate paid $ 0.17 - - -
* 1.24% and 1.50%, respectively when annualized
INVESTMENT OBJECTIVE AND POLICIES
Objective: The primary objective of the Fund is capital
appreciation. A secondary objective is to provide a
moderate level of current income. The Fund seeks to achieve
its objectives primarily by investing in common stocks and
securities convertible into common stocks. It must be
realized, as is true of almost all securities, there can be
no assurance that the Fund will obtain its ongoing objective
of capital appreciation and moderate income.
Investment Policies
The Fund will invest primarily in common stock of large U.S.
corporations. The Fund will not invest in foreign
securities, and no more than 5% of the Fund's net assets
will be invested in companies that do not have three years
of continuous operations. The Fund will utilize information
obtained from various sources including earnings
expectations, fundamental securities valuation and
securities price trends.
The Fund invests primarily in securities which provide
favorable growth prospects and some level of current
income. The Fund may also invest in securities which provide
favorable growth prospects but do not provide some level of
current income. The Fund may also invest in government and
corporate bonds, or short-term interest bearing securities,
when the adviser believes market conditions warrant a
defensive position.
Portfolio Turnover Policy: The Fund does not propose to
purchase securities for short term trading in the ordinary
course of operations. Accordingly, it is expected that the
annual turnover rate will not exceed 50%, wherein turnover
is computed by dividing the lesser of the Fund's total
purchases or sales of securities within the period by the
average monthly portfolio value of the Fund during such
period. There may be times when management deems it
advisable to substantially alter the composition of the
portfolio, in which event, the portfolio turnover rate might
substantially exceed 50%; this would only result from
special circumstances and not from the Fund's normal
operations.
Nondiversitfication Policy: The Fund is classified as being
non-diversified which means that it may invest a relatively
high percentage of its assets in the obligations of a
limited number of issuers. The Fund, therefore, may be more
susceptible than a more widely diversified fund to any
single economic, political, or regulatory occurrence. The
policy of the Fund, in the hope of achieving its objective
as stated above, is, therefore, one of selective investments
rather than broad diversification. The Fund seeks only
enough diversification for adequate representation among
what it considers to be the best performing securities and
to maintain its federal non-taxable status under Sub-Chapter
M of the Internal Revenue Code.
INVESTMENT RISKS
Market Risk: The Fund invests in common stocks which can
decline in price over short or even extended periods. For
five year timeperiods from 1926-1994 the stock market, as
measured by the S&P 500 returned an average of 10.2%, with a
high of 23.9% and a low of -12.5%.
Inflation Risk: Inflation represents a risk to an investment
portfolio because it reduces the real return of a portfolio
over time. Historically, inflation averaged 3.1%,
offsetting most of the returns from money market investments
and bonds. Using the illustration above, average inflation
reduced the returns from the stock market by approximately
one third.
TAX STATUS
The Fund will endeavor to qualify annually for and elect tax
treatment applicable to a regulated investment company under
Subchapter M of the Internal Revenue Code (the "Code "). To
qualify as a "regulated investment company" under Sub-
Chapter M, at least 90% of the Fund's income must be derived
from dividends, interest and gains from securities
transactions, no more than 30% of the Fund's profits may be
derived from sales of securities held less than three
months, and no more than 50% of the Fund's assets may be in
security holdings of any issuer that exceed 5% of the total
assets of the Fund at the time of purchase. Pursuant to the
requirements of the Code, the Funds intends to distribute
annually, to its stockholders, substantially all of its net
investment income and realized capital gains, if any, less
any available capital loss carry-over, to avoid paying
income tax on its net investment income and net realized
capital gains of being subject to a federal excise tax on
undistributed net investment income and net realized capital
gains.
Distribution of any net long term capital gains realized by
the fund will be taxable to the shareholder as long term
capital gains, regardless of the length of time Fund shares
have been held by the investor. All income realized by the
Fund including short term capital gains, will be taxable to
the shareholder as ordinary income. Dividends from net
income will be made annually or more frequently at the
discretion of the Fund's Board of Directors. Dividends
received shortly after purchase of shares by an investor
will have the effect of reducing the per share net asset
value of his shares by the amount of such dividends or
distributions and, although in effect a return of capital,
are subject to federal income taxes.
The Fund is required by Federal law to withhold 31% of
reportable payments (which may include dividends, capital
gains, distributions and redemptions) paid to shareholders
who have not complied with IRS regulations. In order to
avoid this withholding requirement, you must certify on a W-
9 tax form supplied by the Fund that your Social Security or
Taxpayer Identification Number provided is correct and that
you are not currently subject to back-up withholding, or
that you are exempt from back-up withholding.
INVESTMENT ADVISER
Morris Capital Advisors, Inc., 15 Chester Commons, Malvern,
PA is a Pennsylvania corporation that acts as sole
Investment Adviser to the Fund. Mr. Daniel A. Morris owns
all outstanding shares of Morris Capital Advisors, Inc. He
is the director and officer of the Investment Adviser and is
also president of the Fund. Mr. Morris has been a
shareholder, executive officer and portfolio manager for
investment advisors to mutual funds and other investors
since 1981.
On September 18, 1995 the shareholders of the Fund approved
a management and advisory contract with Morris Capital
Advisors, Inc., to act as Investment Adviser of the Fund,
which was unanimously approved by the Board of Directors.
This agreement will continue on a year to year basis
provided that approval is voted at least annually by a
majority of the directors of the Fund who are neither
parties to the agreement nor interested persons as defined
in the Investment Company Act of 1940 at a meeting called
for the purpose of voting on such approval.
Under the agreement, the Investment Adviser will direct the
purchase or sale of investment securities in accordance with
the stated objectives of the Fund, under the review of the
Directors of the Fund. The Agreement may be terminated at
any time, without the payment of any penalty, by the Board
of Directors or by vote of a majority of the outstanding
voting securities of the Fund on not more than 60 days'
written notice to the Investment Adviser. In the event of
its assignment, the Agreement will terminate automatically.
For these services the Fund has agreed to pay to Morris
Capital Advisors, Incorporated a fee of 1% per year on the
net assets of the Fund. This rate of the advisory fee is
generally higher than that paid by most mutual funds. All
fees are computed on the average daily closing net asset
value of the Fund and are payable monthly. The Investment
Adviser will forego all or a portion of its fees in order to
hold the total expenses of the Fund to no more than 1.5% of
averaged assets.
Pursuant to its contract with the Fund, the Investment
Adviser is required to render research, statistical, and
advisory services to the Fund; and to make specific
recommendations based on the Fund's investment requirements.
Fees of the custodian, registrar, and transfer agents shall
be paid by the Fund. The Fund pays all other expenses,
including fees and expenses of directors not affiliated with
the Adviser, if any; legal and accounting fees; interest,
taxes, and brokerage commissions, recordkeeping and the
expense of operating its offices. The Investment Adviser
has paid the initial organizational costs of the Fund and
will reimburse the Fund for any and all losses incurred
because of rescinded purchases.
CAPITAL STRUCTURE
Description of Common Stock: The authorized capitalization
of the Fund consists of 10,000,000 shares of common stock of
$.001 par value per share. Each share has equal dividend,
distribution and liquidation rights. There are no
conversion or pre-emptive rights applicable to any shares of
the Fund. All shares issued are fully paid and non-
accessible.
Voting Rights: Each holder of common stock has one vote for
each share held. Voting rights are non-cumulative, which
means that the holders of a majority of shares of common
stock can elect all the directors of the Fund if they so
choose, and the holders of the remaining shares will not be
able to elect any person as a director.
SHAREHOLDER TRANSACTIONS
The offering price of the shares offered by the Fund is at
the net asset value per share next determined after receipt
of the purchase order by the Fund and is computed in the
manner described under the caption "PRICING OF SHARES" in
this prospectus. The Fund reserves the right at its sole
discretion to terminate the offering of its shares made by
this Prospectus at any time and to reject purchase
applications when, in the judgment of the management such
termination or rejection is in the best interests of the
Fund. Whole shares may be purchased from the Fund. No
fractional shares will be issued. The Fund will maintain an
account for each shareholder of shares for which no
certificates have been issued.
Purchases: Initial purchase of shares of the Fund must be
made by application to the Fund. To purchase shares
complete the application form included in this prospectus
and mail to Manor Investment Funds, 15 Chester Commons,
Malvern, PA 19355. For additional information contact the
Fund at 610-722-0900. Subsequent purchases may be made by
mail or in person. The minimum is $100, but less may be
accepted under special circumstances.
Reinvestments: The Fund will automatically retain and
reinvest dividends and capital gain distributions and
purchase additional shares for the shareholder at net asset
value as of the close of business on the distribution date.
Any surplus over whole shares will be paid in cash. A
shareholder may at any time by letter or forms supplied by
the Fund direct the fund to pay dividend and/or capital
gains distributions, if any, to such shareholder in cash.
Redemptions: The Fund will redeem all or any portion of the
total amount of the shares of any shareholder who tenders a
written request for redemption signed by the shareholder.
If certificates have been issued the shareholder must submit
properly executed certificates for redemption. In either
case, proper endorsements guaranteed either by a national
bank or a member firm of the New York Stock Exchange will be
required unless the shareholder is known to management.
The redemption price is the net asset value per share next
determined after notice is received by the Fund for
redemption of shares. The proceeds received by the
shareholder may be more or less than his cost of such
shares, depending upon the net asset value per share at the
time of redemption and the difference should be treated by
the shareholder as a capital gain or loss for federal income
tax purposes.
Payment by the Fund will ordinarily be made by check within
seven days after tender. The Fund may suspend the right of
redemption or postpone the date of payment if: The New York
Stock Exchange is closed for other than customary weekend or
holiday closings, or when trading on the New York Stock
Exchange is restricted as determined by the Securities and
Exchange Commission or when the Securities and Exchange
Commission has determined that an emergency exists, making
disposal of fund securities or valuation of net assets not
reasonably practicable.
To redeem shares send your written request to Manor
Investment Funds, 15 Chester Commons, Malvern, PA 19355.
For additional information contact the Fund at 610-722-0900.
RETIREMENT PLANS
Individual Retirement Account: Individuals who have
compensation, but who are either not covered by existing
qualified retirement plans, or are covered and do not have
incomes which exceed certain amounts, may contribute tax-
deductible dollars to an IRA. Individuals who are covered
by existing retirement plans, and whose incomes exceed the
applicable amounts, are not permitted to deduct their IRA
contributions for federal income tax purposes. However,
whether an individual's contributions are deductible or not,
the earnings on his or her IRA are not taxed until the
account is distributed.
A Disclosure Statement is required by U.S. Treasury
Regulations. This Statement describes the general
provisions of the IRA and is forwarded to all prospective
IRA's. There is no charge to open and maintain a Manor
Investment Funds IRA. This policy may be changed by the
Board of Directors if they deem it to be in the best
interests of all shareholders. All IRA's may be revoked
within 7 days of their establishment with no penalty.
PRICING OF SHARES
The net asset value of the Fund's shares are determined as
of the close of trading on the New York Stock Exchange on
each business day of which that Exchange is open (presently
4:00 p.m.) Monday through Friday exclusive of Washington's
Birthday, Good Friday, Memorial Day, 4th of July, Labor Day,
Thanksgiving, Christmas and New Years.
The price is determined by dividing the value of its
securities, plus any cash and other assets less all
liabilities, by the number of shares outstanding. The
market value of securities listed on a national exchange is
determined to be the last recent sales price on such
exchange. Listed securities that have not recently traded
and over-the-counter securities are valued at the last bid
price in such market. Short term paper (debt obligations
that mature in less than 60 days) are valued at amortized
cost which approximates market value. Other assets are
valued at fair value as determined in good faith by the
Board of Directors.
BROKERAGE
The Fund requires all brokers to effect transactions in
portfolio securities in such a manner as to get prompt
execution of the orders at the most favorable price. Where
consistent with best price and execution and in light of its
limited resources, the Fund will deal with primary market
makers in placing over-the-counter portfolio orders.
The Fund places all orders for purchase and sale of its
portfolio securities through the Fund President who is
answerable to the Fund Board of Directors. He may select
brokers who, in addition to meeting the primary requirements
of execution and price, have furnished statistical or other
factual information and services, which, in the opinion of
management, are helpful or necessary to the Fund's normal
operations. Those services may include economic studies,
industry studies, security analysis and reports, sales
literature and statistical services furnished either
directly to the Fund or to the Adviser. No effort is made
in any given circumstance to determine the value of these
materials or services or the amount by which they might have
reduced expenses of the Adviser.
Other than set forth above, the Fund has no fixed policy,
formula, method or criteria which it uses in allocating
brokerage business to brokers furnishing materials and
services. The Board of Directors evaluates and reviews the
reasonableness of brokerage commissions paid semiannually.
MANAGEMENT OF THE FUND
Shareholders meet annually to elect all members of the Board
of Directors, select an independent auditor, and vote on any
other items deemed pertinent by the incumbent Board. The
Directors supervise the operation of the Fund in accordance
with its stated objectives, policies, and investment
restrictions. The Board appoints the officers to run the
Fund and selects an Investment Adviser to provide investment
advice (See Investment Adviser, pg. 5). It meets six times
a year to review Fund progress and status. In addition, a
non-interested Director performs an independent audit
whenever requested by the Board.
REPORTS TO SHAREHOLDERS
The Fund sends all shareholders annual reports containing
certified financial statements and other periodic reports,
at least semiannually, containing unaudited financial
statements.
Manor Investment Funds, Inc.
New Account Application
Use this form for individual, custodial, trust, profit-
sharing or pension plan accounts. For any additional
information please contact the Fund at 610-722-0900 or 800-
787-3334.
1. Investments
Initial Investment: $
___________________________
(Minimum initial investment
$1,000)
Make your check payable to: Manor Investment
Funds, Inc.
15 Chester Commons, Malvern , PA
19355
2. Registration (please print)
Individual _________________________ ____
_________________________ _____________________
_____________
First Name
M.I. Last Name Social
Security # Birthdate
Joint Owner * _________________________ ____
_________________________ _____________________
_____________
First Name
M.I. Last Name Social
Security # Birthdate
* Registration will be Joint Tenancy with Rights
of Survivorship (JTWROS) unless otherwise specified.
Gift to Minors _________________________ _____
_________________________
Custodian's First Name
M.I. Last Name
__________________________ _____
_________________________
Minor's First Name
M.I. Last Name
__________________________
_________________________ _____________________
Minor's Social Security #
Minor's Birthdate State of
Residence
Corporation
____________________________________________________________
___________
Trust, Estate Name of Trustees (If to be
included in registration)
Pension Plan
Partnership
____________________________________________________________
___________
Name
Other Entity ______________________________
______________________________________
Social Security #/Tax ID# Date of
Agreement
**Corporate Resolution is required.
*** Additional documentation and certification may be
required.
3. Mailing Address (please print)
_______________________________________________________
_____________
Street
Apt./Suite
__________________________________ _______
______________
City
State Zip
__________________________________
_____________________________
Daytime Phone #
Evening Phone #
Application continued on next page.
4. Distribution Options
Dividends and captial gains will be reinvested if no
option is selected.
_____ Pay all income in cash. _____
Pay all capital gains in cash.
5. Signature and Certification required by the Internal
Revenue Service
Neither the Fund nor its transger agent will be
respornsible for the authenticity of transactions
instructions received by telephone, privided that
reasonable security porcedures have been followed.
Under the penalty of perjury, I certify that (1) the
Social Security Nimber or Taxpayer Identification
Number shown on this form is my correct Taxpayer
Identification Number, and (2) I am not subject to
backup withholding either as a result of a failure to
report all interest or dividends, or the IRS has
notified me that I am no longer subject to backup
withholding. The IRS does not require your consent to
any provision of the document other than the
certifications required to avoid backup withholding.
______________________________________________________
__________________
Signature of Owner
Date
______________________________________________________
__________________
Signature of Co-owner
Date
If shares are to be registered in (1) joint names,
bothe persons should sign, (2) a custodian for a minor,
the custodian should sign, (3) a trust, the trustee(s)
should sign, or (4) a corporation or other entity, an
officer should sign and print name and title on the
space provided below.
_______________________________________________________
_____________________
Print name and title of officer signing for a
corporation or other entity
PERFORMANCE INFORMATION
The Fund's average annual compounded rate of return is the
rate of return which, if applied to an initial investment in
the Fund at the beginning of a stated period and compounded
annually over the period, would result in redeemabel value
of the investment in the Fund at the end of the stated
period. The calculation assumes reinvestment of all
dividends and distributions and reflects the effect of all
recurring fees but ignores individual income tax
consequences to stockholders.
Annualized
Total Total Total
Return Return Return
3 1996 Since
Months Inception
Manor Investment 6.63 % 11.90 % 9.50 %
Funds
Lipper Growth & 7.80 % 20.69 % 18.67 %
Income Fund Index
S&P 500 Index 8.34 % 22.96 % 24.07 %
The principal factor affecting the Fund's performance for
the year ended September 30, 1996 was the selection and
purchase by the Adviser of stocks of companies with above
average long-term growth potential. The 11.90% increase in
share value reflected the strong growth of the core holdings
of the Fund and the contribution of undervalued companies as
well. The braoder based large capitalization S&P 500 Index
rose 22.96%, while the more income oriented Lipper Growth &
Income Fund Index rose 20.69%.
The Fund invests primarily in companies that are priced
attractivly relative the their earnings growth and financial
structure. The favorable market for these types of
companies and the high level of contributions into the Fund
during the last quarter of 1996 resulted in a low portfolio
turnover of 14%.
CUSTODIAN FREDERICK L. MYERS
FIRST NATIONAL BANK OF WEST Myers & Associates, CPA's
CHESTER West Chester, PA
9 North High Street
West Chester, PA 19381 ALAN WEINTRAUB
Computer Science
TRANSFER AGENT Corporation, Inc.
MANOR INVESTMENT FUNDS, Berwyn, PA
INC.
15 Chester Commons
Malvern, PA 19355
INDEPENDENT ACCOUNTS
CLAUDE B. GRANESE, CPA
1108 N. Bethlehem Pike
Spring House, PA
LEGAL COUNSEL
LAVERTY, NILSEN & REED
810 Downingtown Pike
West Chester, PA 19380
BOARD OF DIRECTORS
EDWARD ERLICHMAN
President, Kara Aerospace,
Inc.
Bedford, PA
RICHARD A. KUND, JR.
The Medical Phone Company
Blue Bell, PA
BRUCE LAVERTY
Laverty, Nilsen & Reed
West Chester, PA
DANIEL A. MORRIS
President, Morris Capital
Advisors, Inc.
Malvern, PA
Malvern, PA 19355
PROSPECTUS
Manor Investment Funds,
Inc.
Malvern, PA 19355
610-722-0900
800-787-3334
The primary objective of
the Fund is capital
appreciation. A secondary
objective is to provide a
moderate level of current
income. The Fund seeks to
achieve its objectives
primarily by investing in
common stocks and
securities convertible into
common stocks.
INVESTMENT ADVISER
MORRIS CAPITAL ADVISORS,
INC.
15 Chester Commons
FORM N-1A
PART C - OTHER INFORMATION
Item 24. Financial Statements and Exhibits
a. Financial Statements - Financial highlights are included
in Part A and all other financial statements are presented
in Part B.
Manor Investment Funds, Inc.
Statement of Net Assets as of December 31, 1996
Statement of Operations for the Year Ended December 31,
1996
Statement of Changes in Net Assets for the Years Ended
December 31, 1995 and 1996
Financial Highlights for the Years Ended December 31,
1995 and 1996
Notes to financial Statements
b. Exhibits
(1) Registrant's Articles of Incorporation , Exhibit 1 to
Registrant's Registration Statement of Form N-1A is
incorporated by reference pursuant to Rule 411 under the
Securities Act of 1933.
(2) Registrant's By-Laws; Exhibit 2 to Registrant's
Registration Statement of Form N-1A is incorporated by
reference pursuant to Rule 411 under the Securities Act
of 1933.
(3) Voting Trust Agreement (None)
(4) Stock Certificate; Exhibit 4 to Registrant's
Registration Statement of Form N-1A is incorporated by
reference pursuant to Rule 411 under the Securities Act
of 1933.
(5) Investment Advisory Contract; Exhibit 5 to
Registrant's Registration Statement of Form N-1A is
incorporated by reference pursuant to Rule 411 under the
Securities Act of 1933.
(6) Underwriting Agreements (None)
(7) Reimbursement Agreements with Officers and/or
Directors; Exhibit 7 to Registrant's Registration
Statement of Form N-1A is incorporated by reference
pursuant to Rule 411 under the Securities Act of 1933.
(8) Custodian Agreement; with First National Bank of West
Chester; Exhibit 8 to Registrant's Registration Statement
of Form N-1A is incorporated by reference pursuant to
Rule 411 under the Securities Act of 1933.
(9) Other Contracts (None)
(10) Opinion of Counsel Concerning Fund Securities; Exhibit
10 to Registrant's Registration Statement of Form N-1A is
incorporated by reference pursuant to Rule 411 under the
Securities Act of 1933.
(11) Consent of Claude B. Granese, CPA
(12) Other Financial Statements (None)
(13) Powers of Attorney (None)
(14) Initial Capital Arrangement Agreements (None)
(15) Code of Ethics; Exhibit 15 to Registrant's
Registration Statement of Form N-1A is incorporated by
reference pursuant to Rule 411 under the Securities Act
of 1933.
2. Control Persons
Mr. Daniel A. Morris is the sole owner, director and officer
of the Investment Adviser and is also president of the
Fund. As of December 31, 1996 Mr. Morris and his wife
Anne own 31.7% of the outstanding shares of the Fund.
3. Number of Shareholders
There were 25 shareholders of the Manor Investment Funds as
of December 31, 1996.
4. Indemnification
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant, the
registrant has been advised that, in the opinion of the
Securities and Exchange Commission, such indemnification
is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the registrant of expenses paid by a
director, officer or controlling person of the
registrant in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or
controlling person in connection with the securities
being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such
issue.
5. Activities of Investment Adviser
The activity of Morris Capital Advisors, Inc., at the
present time is performance of the Investment Advisory
Contract with the Manor Investment Funds and for
individual and corporate clients on an individual
account basis.
6. Principal Underwriter
The Fund acts as its own underwriter.
7. Location of Accounts & Records
All Fund records are held in corporate headquarters, 15
Chester Commons, Malvern, PA 19355.
8. Management Services
Not Applicable.
9. Distribution Expenses
The Fund currently bears no distribution expenses.
10. Undertakings
None.
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the inclusion by reference in the Registration
Statement of Form N-1A for Manor Investment Funds, Inc. of our
report dated December 31, 1996 on our examination of the
Financial Statements of such Company. We also consent to the
reference to our firm in such Registration Statement.
____________________________________________
Claude B. Granese, CPA
Spring House, Pennsylvania
March 31, 1997
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, Manor Investment Funds, Inc.
certifies that it meets all of the requirements for effectiveness
of this Registration Statement and has duly caused this
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Borough of West
Chester and State of Pennsylvania, on the 31st day March.
Manor Investment Funds, Inc.
By:
_________________________________
Daniel A. Morris, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signature Title Date
___________________ President, Chief 3/31/97
______ Executive Officer
Daniel A. Morris and Director
___________________ Secretary 3/31/97
______
Bruce Laverty
___________________ Treasurer 3/31/97
______
James McFadden
___________________ Director 3/31/97
______
Edward Erlichman
___________________ Director 3/31/97
______
Richard A. Kund,
Jr.
___________________ Director 3/31/97
______
Fred Myers
___________________ Director 3/31/97
______
Alan Weintraub
EXHIBIT INDEX
(1) Registrant's Articles of Incorporation *
(2) Registrant's By-Laws *
(3) Voting Trust Agreement (None)
(4) Stock Certificate *
(5) Investment Advisory Contract *
(6) Underwriting Agreements (None)
(7) Reimbursement Agreements with Officers and/or Directors *
(8) Custodian Agreement *
(9) Other Contracts (None)
(10) Opinion of Counsel Concerning Fund Securities *
(11) Consent of Claude B. Granese, CPA
(12) Other Financial Statements (None)
(13) Powers of Attorney (None)
(14) Initial Capital Arrangement Agreements (None)
(15) Code of Ethics *
* Incorporated by reference.
PART B
STATEMENT OF ADDITIONAL INFORMATION
March 31, 1997
Manor Investment Funds, Inc.
Malvern, PA 19355
610-722-0900
800-787-3334
This Statement of Additional Information is not a
Prospectus, and should be read in conjunction with the Fund's
current Prospectus (dated March 31, 1997). To obtain the
Prospectus, please write the Fund or call either of the telephone
numbers that are shown above.
TABLE OF CONTENTS
Investment Restrictions 1
Officers and Directors of the 2
Fund
Principal Shareholders 3
Investment Adviser 3
Determination of Net Asset Value 4
and Performance
Allocation of Portfolio 5
Brokerage
Custodian 5
Tax Status 5
Shareholder Meetings 6
Independent Accountants 6
Litigation 6
Financial Statements 8
No person has been authorized t give any information or to
make any representations other than those contained in this
Statement of Additional Information and the Prospectus dated
March 31, 1997 and, if given or made, such information or
representations may not be relied upon as having been authorized
by Manor Investment Funds, Inc.
This Statement of Additional Information does not constitute
an offer to sell securities.
INVESTMENT RESTRICTIONS
The By-Laws of the Fund provide the following fundamental
investment restrictions; the Fund may not, except by the approval
of a majority of the outstanding shares:
(a) Act as underwriter for securities of other issuers except
insofar as the Fund may be deemed an underwriter in disposing
of its own portfolio.
(b) Issue senior securities, borrow money, or purchase securities
on margin, but may obtain such short term credit as may be
necessary for clearance of purchases and sales of securities
for temporary or emergency purposes in an amount not exceeding
5% of the value of its total assets.
(c) Sell securities short.
(d) Invest in securities of other investment companies except as
part of a merger, consolidation, or purchase of assets approved
by the Fund's shareholders or by purchases with no more that
10% of the Fund's assets in the open market involving only
customary brokers commissions.
(e) Invest more that 25% of its assets at the time of purchase in
any one industry.
(f) Make investments in commodities, commodity contracts or real
estate although the Fund may purchase and sell securities of
companies which deal in real estate or interests therein.
(g) Make loans. The purchase of a portion of a readily
marketable issue of publicly distributed bonds, debentures or
other debt securities will not be considered the making of a
loan.
(h) Acquire more than 10% of the securities of any class of
another issuer, treating all preferred securities of an issuer
as a single class and all debt securities as a single class, or
acquire more than 10% of the voting securities of another
issuer.
(i) Invest in companies for the purpose of acquiring control.
(j) Purchase or retain securities of any issuer if the officers
and directors of the Fund or its Investment Adviser owning
individually more than 1/2 of 1% of any class of security,
collectively own more than 5% of such class of securities of
such issuer.
(k) Pledge, mortgage or hypothecate any of its assets.
(l) Invest in securities which may be subject to registration
under the Securities Act of 1933 prior to sale to the public or
which are not at the time of purchase readily salable.
(m) Invest more than 5% of the total Fund assets, taken at market
value at the time of purchase, in securities of companies with
less than three years' continuous operation, including the
operations of any predecessor.
OFFICERS AND DIRECTORS OF THE FUND
The Officers and Directors of the Fund have agreed to serve
without compensation, their addresses, principal occupations
during the past five years are:
DANIEL A. MORRIS
Mr. Morris is President of the Fund and President of
Morris Capital Advisors, Inc., investment adviser to
the Fund. Prior to founding Morris Capital Advisors,
Inc., he was Senior Vice President of Consistent Asset
Management Company, an investment adviser for separate
accounts and registered investment companies. Mr.
Morris resides at 304 Albermarle Grove, West Chester,
PA. As President of the Fund, he is considered an
Interested Director.
BRUCE LAVERTY
Mr. Laverty is a Partner of the law firm Laverty,
Nilsen & Reed, legal counsel to the Fund. Mr. Laverty
resides at 568 Spring Oaks Road, West Chester, PA. As
Legal Counsel to the Fund, he is considered an
Interested Director.
ALAN WEINTRAUB
Mr. Weintraub is a Senior Consultant with Computer
Science Corporation, Inc. Mr. Weintraub resides at 305
Albermarle Grove, West Chester, PA.
JAMES MCFADDEN
Mr. McFadden is Vice President of Marketing for MBNA
Corporation. Mr. McFadden resides at 300 Devonshire
Circle, West Chester, PA.
FRED MYERS
Mr. Myers is founding Partner of the accounting firm of
Myers & Associates, CPA's. Mr. Myers resides at 302
Albermarle Grove, West Chester, PA.
RICHARD KUND, JR.
Mr. Kund is marketing manager of The Medical Phone
Company. Mr. Kund resides at 304 Hidden Creek Drive,
Hatboro, PA.
EDWARD ERLICHMAN
Mr. Erlichman is President of Kara Aerospace. Mr.
Erlichman resides at P.O. Box 513, Bedford, PA.
PRINCIPAL SHAREHOLDERS
As of December 31, 1996, Daniel A. Morris owned or
beneficially owned 11,170 shares of Common Stock, or 31.5% of the
then outstanding shares. At such date, Fred L. Myers owned or
beneficially owned 1,826 shares of Common Stock, or 5.1% of the
then outstanding shares. The officers and directors of the Fund
owned or beneficially owned as a group, 13,137 shares of Common
Stock, or 37.0% of the then outstanding shares.
Other than the foregoing, the Fund was not aware of any
person who, as of December 31, 1996, owned or beneficially owned
more than 5% of the shares of the Fund.
INVESTMENT ADVISER
Morris Capital Advisors, Inc., 15 Chester Commons Street,
Malvern, PA, is a Pennsylvania corporation that acts as sole
Investment Adviser to the Fund. Mr. Daniel A. Morris is the sole
owner, director and officer of the Investment Adviser and is also
president of the Fund. Mr. Morris owns all outstanding shares of
Morris Investment Management, Inc. and he is the largest
shareholder of Manor Investment Funds. Mr. Morris has been a
shareholder, executive officer and portfolio manager for
investment advisers to mutual funds and other investors since
1981.
On September 18, 1995 the shareholders of the Fund approved
a management and advisory contract with Morris Capital Advisors,
Inc., to act as Investment Adviser of the Fund, which was
unanimously approved by the Board of Directors. This agreement
will continue on a year to year basis provided that approval is
voted at least annually by a majority of the directors of the
Fund who are neither parties to the agreement nor interested
persons as defined in the Investment Company Act of 1940 at a
meeting called for the purpose of voting on such approval.
Under the agreement, the Investment Adviser will direct the
purchase or sale of investment securities in accordance with the
stated objectives of the Fund, under the review of the Directors
of the Fund. The Agreement may be terminated at any time,
without the payment of any penalty, by the Board of Directors or
by vote of a majority of the outstanding voting securities of the
Fund on not more than 60 days' written notice to the Investment
Adviser. In the event of its assignment, the Agreement will
terminate automatically. For these services the Fund has agreed
to pay to Morris Capital Advisors, Incorporated a fee of 1% per
year on the net assets of the Fund. This rate is generally
higher than that paid by most mutual funds. All fees are
computed on the average daily closing net asset value of the Fund
and are payable monthly. The Investment Adviser will forego all
or a portion of its fees in order to hold the total expenses of
the Fund to no more than 1.5% of averaged assets.
Pursuant to its contract with the Fund, the Investment
Adviser is required to render research, statistical, and advisory
services to the Fund; and to make specific recommendations based
on the Fund's investment requirements. Fees of the custodian,
registrar, and transfer agents shall be paid by the Fund. The
Fund pays all other expenses, including fees and expenses of
directors not affiliated with the Adviser, if any; legal and
accounting fees; interest, taxes, and brokerage commissions,
recordkeeping and the expense of operating its offices. The
Investment Adviser has paid the initial organizational costs of
the Fund and will reimburse the Fund for any and all losses
incurred because of rescinded purchases.
DETERMINATION OF NET ASSET VALUE AND PERFORMANCE
As set forth in the Prospectus under the caption
"Determination of Net Asset Value" the net asset value of the
Fund will be determined as of the close of trading on each day
the New York Stock Exchange is open for trading. The New York
Stock Exchange is open for trading Monday through Friday except
New Year's Day, Washington's Birthday, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
Additionally, if any of the aforementioned holidays falls on a
Saturday, the New York Stock Exchange will not be open for
trading on the preceding Friday and when any such holiday falls
on a Sunday, the New York Stock Exchange will not be open for
trading on the succeeding Monday, unless unusual business
conditions exist, such as the ending of a monthly or yearly
accounting period.
Any total rate of return quotation for the Fund will be for
a period of three or more months and will assume the reinvestment
of all dividends and capital gains distributions which were made
by the Fund during that period. Any period total rate of return
quotation of the fund will be calculated by dividing the net
change in value of a hypothetical shareholder account established
by an initial payment of $1,000 at the beginning of the period by
1,000. The net change in the value of a shareholder account is
determined by subtracting $1,000 from the product obtained by
multiplying the net asset value per share at the end of the
period by the sum obtained by adding (A) the number of shares
purchased at the beginning of the period plus (B) the number of
shares purchased during the period with reinvested dividends and
distributions. Any average annual compounded total rate of
return quotation of the Fund will be calculated by dividing the
redeemable value at the end of the period (i.e., the product
referred to in the preceding sentence) by $1,000. A root equal
to the period, measured in years, in question is then determined
and 1 is subtracted from such root to determine the average
annual compounded total rate of return.
The foregoing computation may also be expressed by the
following formula:
P(1+T)^n = ERV
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the
stated periods at the end of the stated periods.
BROKERAGE
The Fund requires all brokers to effect transactions in
portfolio securities in such a manner as to get prompt execution
of the orders at the most favorable price. Where consistent with
best price and execution and in light of its limited resources,
the Fund will deal with primary market makers in placing over-the-
counter portfolio orders.
The Fund places all orders for purchase and sale of its
portfolio securities through the Fund President who is answerable
to the Fund Board of Directors. He may select brokers who, in
addition to meeting the primary requirements of execution and
price, have furnished statistical or other factual information
and services, which, in the opinion of management, are helpful or
necessary to the Fund's normal operations. Those services may
include economic studies, industry studies, security analysis and
reports, sales literature and statistical services furnished
either directly to the Fund or to the Adviser. No effort is made
in any given circumstance to determine the value of these
materials or services or the amount by which they might have
reduced expenses of the Adviser.
Brokerage commissions for the year ended December 31, 1996
was $1,531. Other than set forth above, the Fund has no fixed
policy, formula, method or criteria which it uses in allocating
brokerage business to brokers furnishing materials and services.
The Board of Directors evaluates and reviews the reasonableness
of brokerage commissions paid semiannually.
CUSTODIAN
The First National Bank of West Chester, 9 North High
Street, West Chester, PA acts as custodian for the Fund.
TAX STATUS
The Fund will endeavor to qualify annually for and elect tax
treatment applicable to a regulated investment company under
Subchapter M of the Internal Revenue Code (the "Code"). To
qualify as a "regulated investment company" under Subchapter M,
at least 90% of the Fund's income must be derived from dividends,
interest and gains form securities transactions, no more that 30%
of the Fund's profits may be derived from sales of securities
held less than three months, and no more than 50% of the Fund's
assets may be in security holdings of any issuer that exceed 5%
of the total assets of the Fund at the time of purchase.
Distribution of any net long term capital gains realized by
the fund will be taxable to the shareholder as long term capital
gains, regardless of the length of time Fund shares have been
held by the investor. All income realized by the Fund including
short term capital gains, will be taxable to the shareholder as
ordinary income. Dividends from net income will be made annually
or more frequently at the discretion of the Fund's Board of
Directors. Dividends received shortly after purchase of shares
by an investor will have the effect of reducing the per share net
asset value of his shares by the amount of such dividends or
distributions and, although in effect a return of capital, are
subject to federal income taxes.
The Fund is required by Federal law to withhold 31% of
reportable payments (which may include dividends, capital gains,
distributions and redemptions) paid to shareholders who have not
complied with IRS regulations. In order to avoid this
withholding requirement, you must certify on a W-9 tax form
supplied by the Fund that your Social Security or Taxpayer
Identification Number provided is correct and that you are not
currently subject to back-up withholding, or that you are exempt
from back-up withholding.
SHAREHOLDER MEETINGS
Shareholders meet annually to elect all members of the Board
of Directors, select and independent auditor, and vote on any
other items deemed pertinent by the incumbent Board. The
Directors supervise the operation of the Fund in accordance with
its stated objectives, policies, and investment restrictions.
The Board appoints the officers to run the Fund and selects an
Investment Adviser to provide investment advice (see Investment
Adviser). It meets six times a year to review Fund progress and
status. In addition, a non-interested Director performs an
independent audit whenever requested by the Board.
INDEPENDENT ACCOUNTANT
Claude Granese, Certified Public Accountant, Spring House,
PA has been selected as the independent accountant and auditor of
the Fund. Claude Granese has no direct or indirect financial
interest in the Fund or the Adviser.
LITIGATION
As of the date of this Statement of Additional Information,
there was no pending or threatened litigation involving the Fund
in any capacity whatsoever.
MANOR INVESTMENT FUNDS, INC.
WEST CHESTER, PENNSYLVANIA
Financial Statements
for the Year Ended
December 31, 1996
and
Independent Auditor's Report
Independent Auditor's Report
To the Shareholders and
Board of Directors
Manor Investment Funds, Inc.
I have audited the accompanying statement of assets and
liabilities of Manor Investment Funds, Inc. (the Fund), including
the schedule of investments, as of December 31, 1996, the related
statement of operations for the year then ended, and the
statements of changes in net assets and selected per share data
and ratios for the year then ended and for the period ended
December 31, 1995. These financial statements, schedules, and
per share data and ratios (hereafter referred to collectively as
"financial statements") are the responsibility of the Fund's
management. My responsibility is to express an opinion on these
financial statements based on my audits.
I conducted my audits in accordance with generally accepted
auditing standards. Those standards require that I plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. My
procedures included confirmation of securities owned as of
December 31, 1996, by correspondence with the custodian. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. I believe that my
audits provide a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Manor
Investment Funds, Inc. as of December 31, 1996, the results of
its operations for the year then ended, and the changes in its
net assets and the selected per share data and ratios for the
year then ended and the period ended December 31, 1995, in
conformity with generally accepted accounting principles.
Claude B. Granese, CPA
Spring House, Pennsylvania
January 10, 1997
MANOR INVESTMENT FUNDS, INC.
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
ASSETS
Investments in securities, at value
(identified cost $281,660) (notes 2 and 5) $300,725
Cash equivalents (note 2) 75,079
Receivable for sold investment securities 19,466
Total
Assets
$395,270
LIABILITIES
Accounts payable $____600
NET ASSETS
Net assets (equivalent to $11.13 per share based on
35,466 shares of capital stock outstanding) (Note 4) $394,670
The accompanying notes are an integral part of these financial
statements.
MANOR INVESTMENT FUNDS, INC.
SCHEDULE OF INVESTMENTS
December 31, 1996
MARKET
COMMON STOCK (Shares) 72.1% COST VALUE
Automobile 8.1%
300 General Motors $ 15,763 $ 16,725
300 Goodyear 14,250 15,413
30,013 32,138
Basic Materials 6.3%
580 CyprusAmax Minerals 14,237 13,630
120 DuPont 11,530 11,295
25,767 24,925
Computer 4.4%
350 Hewlett-Packard 17,519 17,587
Construction 3.5%
380 Masco 11,270 13,680
Consumer Discretionary 3.5%
540 Sunbeam 11,179 13,770
Consumer Staples 3.7%
280 Coca Cola 13,404 14,735
Finance 15.5%
220 Allstate Insurance 9,970 12,733
450 MBNA Corp. 15,269 18,731
333 Travelers, Inc. 11,075 15,121
700 USF&G 11,860 14,612
48,174 61,197
Medical 1.2%
1,000 Integra Life Sciences 7,437 4,625
Multi-Industry 8.4%
200 Allied Signal 12,362 13,400
200 General Electric 16,738 19,775
29,100 33,175
Schedule continued on next page
MANOR INVESTMENT FUNDS, INC.
SCHEDULE OF INVESTMENTS (continued)
December 31, 1996
Oil 4.9%
300 Chevron 18,987 19,500
Retail 9.0%
420 McDonalds 19,947 19,058
360 Sears, Roebuck & Co. 17,645 16,560
37,592 35,618
Transportation 3.6%
200 Delta Airlines 14,475 _14,175
TOTAL COMMON STOCK $264,917 $285,125
PREFERRED STOCK (Shares) 4.0%
320 Kmart Preferred 16,743 15,600
TOTAL INVESTMENTS IN SECURITIES $281,660 $300,725
The accompanying notes are an integral part of these financial
statements.
MANOR INVESTMENT FUNDS, INC.
STATEMENT OF OPERATIONS
Year Ended December 31, 1996
Investment income
Dividends $ 2,617
Interest 1,037
Total investment income $ 3,654
Expenses
Custodian (note 7) 1,249
Other (note 6) 1,225
Total expenses 2,474
Net investment income 1,180
Realized and unrealized gain (loss)
on investments (note 5)
Net realized loss on investments (11)
Change in unrealized appreciation of
investments for the year 19,367
Net gain on investments 19,356
Net increase in net assets resulting
from operations $20,536
The accompanying notes are an integral part of these financial
statements.
MANOR INVESTMENT FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended December 31, 1996
Period Ended December 31, 1995
1996 1995__
Increase (decrease) in net assets
from operations
Investment income-net $ 1,180 $ 373
Net realized loss on investments (11)
- -
Change in unrealized appreciation 19,367 (302)
Net increase in net assets resulting
from operations 20,536 71
Distributions to shareholders from
Investment income-net (1,180) (366)
Net realized loss on investments 11 -
Capital share transactions (note 4) 264,240
111,358
Total increase 283,607 111,063
Net assets
Beginning of period 111,063 -
End of period $394,670 $111,063
The accompanying notes are an integral part of these financial
statements.
MANOR INVESTMENT FUNDS, INC.
SUPPLEMENTARY INFORMATION
Year Ended December 31, 1996
Period Ended December 31, 1995
PER SHARE DATA (1) 1996 1995
Investment income $ .22
$.07
Expenses .15 .04
Investment income-net .07
.03
Distribution of net investment income (.07)
(.03)
Net realized and unrealized gain
(loss) on investments 1.16
(.03)
Initial capitalization of Fund -
10.00
Net increase in net asset value 1.16
9.97
Net asset value
Beginning of period 9.97
- -
End of period $11.13 $ 9.97
(1)Selected data based on weighted average shares outstanding.
RATIOS (to Average Net Assets)
Investment income-net .67%
.34%(2)
Expenses 1.50%
.38%(2)
(2)1.24% and 1.50%, respectively when annualized.
TURNOVER 15% 0%
The accompanying notes are an integral part of these financial
statements.
MANOR INVESTMENT FUNDS, INC.
NOTES TO STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
Note 1-Organization
Manor Investment Funds, Inc. (the Fund) was incorporated in
Pennsylvania on September 13, 1995. The Fund was in the initial
stages of development until January 27, 1996 when it began to
sell shares of its stock to the public. It is an open-end, non-
diversified management investment company which is registered
under the Investment Company Act of 1940.
The Fund's primary objective is capital appreciation. It invests
primarily in common stock of large U. S. corporations.
Note 2-Significant Accounting Policies
The following significant accounting policies are in conformity
with generally accepted accounting principles for investment
companies:
Security Valuation-Common stocks are valued at the latest quoted
sales price at the close of the New York Stock Exchange on the
valuation date.
Cash Equivalents-Cash equivalents consist of a money market
account, at cost which approximates market value, with the
custodian.
Federal Income Taxes-The Fund qualifies as a regulated investment
company and distributes all of its taxable income. Accordingly,
no provision for federal income taxes is required in these
financial statements.
Distributions-Dividends to shareholders are recorded on the ex-
dividend date.
Development Stage-During its development stage there was
virtually no change in net assets from net investment income and
unrealized securities losses.
MANOR INVESTMENT FUNDS, INC.
NOTES TO STATEMENT OF ASSETS AND LIABILITIES (Continued)
December 31, 1996
Other-The Fund follows industry practice and records security
transactions on the trade date. Dividend income is recognized on
the ex-dividend date, and interest income is recognized on the
accrual basis.
Note 3-Distributions to Shareholders
On December 26, 1996, a distribution of $.035 per share,
aggregating $1,180 was declared from net investment income. The
dividend was paid on December 27, 1996 to shareholders of record
on December 26, 1996.
Note 4-Capital Share Transactions
At December 31, 1996, there were 10,000,000 shares of $.001 par
value capital stock authorized and paid-in capital totaled
$375,598. Daniel A. Morris (see note 6), President of the Fund,
and his wife own 11,170 shares of the Fund's outstanding stock
with a value of $124,322.
Transactions in capital stock were as follows:
Shares Amount
1996 1995_ 1996 1995_
Shares sold 24,232 11,099 $263,128
$110,992
Shares issued in reinvestment
of dividends 98 37 1,112
366
Net increase 24,330 11,136 $264,240
$111,358
None of the Fund's shares were redeemed in 1996 or 1995.
MANOR INVESTMENT FUNDS, INC.
NOTES TO STATEMENT OF ASSETS AND LIABILITIES (Continued)
December 31, 1996
Note 5-Investment Transactions
Purchases and sales of investments in common and preferred stock
aggregated $270,635 and $58,674, respectively. Net gain on
investments for the year ended December 31, 1996 was $19,356.
That amount represents the net increase in value of investments
held during the year. Net unrealized gains of $19,065 on
securities are the same for financial reporting and tax
reporting.
Note 6-Investment Advisory Fee
The Fund has an investment management and advisory services
agreement (the Agreement) with Morris Capital Advisors, Inc.,
formerly Morris Investment Management Services, Inc. (Morris).
Morris' sole shareholder, officer and director is Daniel A.
Morris.
Monthly, the Fund is required to pay Morris a fee equivalent to
one percent per annum of the daily average net assets of the
Fund. The Fund bears expenses necessary and incidental to the
conduct of its business. However, Morris has foregone a portion
of its fees to maintain total Fund expenses at no more than 1.5%
annually of averaged assets. Accordingly, Morris has incurred
expenditures of $10,635 ($2,982 in 1996) on behalf of the Fund,
for which it will not be reimbursed.
The Agreement must be approved annually by a majority vote of the
Fund's non-interested Board of Directors.
Note 7-Custody Agreement
Under an agreement, The First National Bank of West Chester (FNB)
acts as the Fund's custodian. FNB's fees are charged in
accordance with its standard rates for such services, payable
monthly. Such fees were $1,249 for the year ended December 31,
1996.
To the Shareholders and
Board of Directors
Manor Investment Funds, Inc.
In planning and performing my audit of the financial statements
and selected per share data and ratios (hereafter referred to
collectively as the "financial statements") of Manor Investment
Funds, Inc. (the Fund), for the year ended December 31, 1996, I
considered its internal control structure, including procedures
for safeguarding securities. I did so to determine my auditing
procedures for the purpose of expressing my opinion on the
financial statements, and to comply with the requirements of Form
N-SAR, not to provide assurance on the internal control
structure.
The management of the Fund is responsible for establishing and
maintaining an internal control structure. In fulfilling this
responsibility, estimates and judgments by management are
required to assess the expected benefits and related costs of
internal control structure policies and procedures. Two of the
objectives of an internal control structure are to provide
management with reasonable, but not absolute, assurance that
assets are safeguarded against loss from unauthorized use or
disposition and that transactions are executed in accordance with
management's authorization and recorded properly to permit
preparation of financial statements in conformity with generally
accepted accounting principles.
Because of inherent limitations in any internal control
structure, errors or irregularities may occur and not be
detected. Also, projection of any evaluation of the structure to
future periods is subject to the risk that it may become
inadequate because of changes in conditions or that the
effectiveness of the design and operation may deteriorate.
My consideration of the internal control structure would not
necessarily disclose all matters in the internal control
structure that might be material weaknesses, under standards
established by the American Institute of Certified Public
Accountants. A material weakness is a condition in which the
design or operation of the specific internal control structure
elements does not reduce to a relatively low level the risk that
errors or irregularities in amounts that would be material in
relation to the financial statements being audited may occur and
not be detected within a timely period by employees in the normal
course of performing their assigned functions. However, I noted
no matters involving the internal control structure, including
procedures for safeguarding securities, that I consider to be a
material weakness as defined above as of December 31, 1996.
This report is intended solely for the information and use of
management and the Securities and Exchange Commission.
Claude B. Granese, CPA
January 10, 1997
CONSENT OF CERTIFIED PUBLIC ACCOUNTANT
I consent to the inclusion of my report, dated January 10,
1997 on my examination of the financial statements of Manor
Investment Funds, Inc. (the Fund), in the registration
statement Form N-1A, Amendment Number 2 of the Fund. I also
consent to the reference of my firm in such registration
statement.
____________________________________________
Claude B. Ganese, CPA
Spring House, Pennsylvania
August 31, 1995
