Manor
Investment Funds, Inc.
Semi-Annual Report
December 31, 1997
Fund Office:
15 Chester Commons
Malvern, PA 19355
610-722-0900 800-787-3334
Managed by:
Morris Capital Advisors, Inc.
Manor Investment Funds, Inc.
15 Chester Commons
Malvern, PA 19355
December 31, 1997
Dear Fellow Shareholders:
I am pleased to report that the Manor Fund continued to
grow during this recent quarter, ending the year with $1.5
million in total assets. This growth is the result of new
shareholder contributions and market performance. I thank
each of you for contribution to our success.
The Fund posted a positive return for the quarter, and
rose 25.54% for the full year. On December 29, the Board of
Directors declared a dividend of $0.20 per share, of that
total $0.04 was net investment income and $0.16 was realized
capital gains. Additional information on the dividend is
contained on your year-end statement and in the dividend
notice mailed to all shareholders.
The 4th Quarter was difficult for most investors as
Asian currency problems triggered market declines. The
declines made dramatic headlines in the US, causing a knee-
jerk reaction in our markets. I used the market pullback
during the quarter to invest in Gillette, Merck, and Pfizer,
and to add to some existing Fund positions. Despite these
purchases, the Fund ended the year with a relatively high
cash position, which should benefit the Fund in a market
decline. I intend to invest some of the cash in the market
as opportunities arise.
The problems in Asia could be a blessing in disguise
because it will slow economic growth and keep inflation low,
which should help to reduce interest rates. By year-end,
long-term treasury rates declined to 5.92% from a high of
7.18% in mid-April. This decline in rates will reduce the
attractiveness of fixed income investments relative to
stocks.
I remain cautiously optimistic on the stock market at
this time. I think that interest rates will continue to
remain low and that companies will report better earnings
than many expect. I continue to believe that the stock
market provides the best return for long-term investors.
Sincerely,
Daniel A. Morris
Manor Investment Funds, Inc.
Portfolio of Investments
December 31, 1997
Market
Value
Common & 89.1 %
Perferred
Stock
Consumer Staples 7.9%
750 Coca Cola 50,016
680 Gillette 68,298
118,314
Retail 7.3%
850 Kmart Preferred 43,880
Class T
940 McDonalds 44,885
460 Sears, Roebuck & 20,815
Co.
109,580
Medical 7.1%
430 Merck 45,580
810 Pfizer 60,396
105,976
Automobile 9.7%
1,500 Chrysler Corp. 52,780
930 General Motors 56,498
560 Goodyear Tire 35,630
144,908
Basic Materials 4.0%
1,000 DuPont 60,062
60,062
Construction 5.0%
1,460 Masco 74,278
74,278
Multi-Industry 10.3%
1,860 Allied Signal 72,190
1,120 General Electric 82,180
154,370
Computer 11.4%
980 Hewlett-Packard 61,128
700 Int. Bus. Machines 73,238
520 Intel 36,530
170,896
Aerospace 0.2%
59 Raytheon 2,913
2,913
Oils 3.5%
680 Chevron 52,318
52,318
Finance 19.1%
870 Allstate Insurance 78,735
2,970 MBNA Corp. 81,304
1,470 Travelers, Inc. 79,196
2,150 US F&G Corp. 47,435
286,670
Transportation 3.7%
460 Delta Airlines 54,740
54,740
Total Common Stock 1,335,025
Cash and Cash 10.9%
Equivalents
FNB West Chester 982
Demand Deposit
FNB West Chester 80,165
Investor's Choice
FNB West Chester 83,011
Money Market
164,158
Total Portfolio $ 1,499,183
Statement of Assets & Liabilities
Manor Investment Funds, Inc.
December 31, 1997
Assets
Investments at market value $
(cost: $ 1,341,924.76) 1,499,182.83
Receivable for:
Dividends 588.70
Interest 266.44
855.14
1,500,037.97
Liabilities and Net Assets
Payable for:
Expenses 635.86
Payable to - 0 -
shareholders
635.86
$ 1,499,402.11
Fund Shares outstanding 108,925.953
Pricing of Shares
Net Asset Value per share $ 13.77
Statement of Operations
Manor Investment Funds, Inc.
December 31, 1997
Investment Income
Dividends $12,516.92
Interest 3,475.57
Accrued 189.50
Income change
$ 16,181.99
Expenses
Trustee Fee 2,224.35
Management 5,411.57
Fee
Misc. Fee 4,117.60
Accrued 232.24
Expense change
11,985.76
Net Investment Income 4,196.23
Realized and unrealized gain
on investments:
Realized gain on securities
transactions:
Proceeds from sales 228,627.23
Cost of securities sold 211,107.04
17,520.19
Unrealized
appreciation(depreciation)
of investments:
Beginning of period 19,064.87
End of period 157,258.07
138,193.20
Net realized and unrealized 155,713.39
gain on investments
Net increase in net assets $ 159.909.62
from operations
Statement of Changes in Net Assets
Manor Investment Funds, Inc.
December 31, 1997
From Operations:
Net Investment income 4,196.23
Net realized gain 17,520.19
from security sales
Net change in 138,193.20
unrealized appreciation
Net increase in net assets from 159,909.62
operations
Deductions to shareholders from:
Net investment income - 3,941.61
Net realized short term gain -12,072.30
Net realized long term gain - 5,447.89
-21,461.80
From Fund share transactions:
Reinvestment of dividends and gain distributions 21,461.80
Proceeds from shares sold 1,096,963.19
Payments for shares redeeemed - 152,324.04
Residual cash change 196.56
Net increase in net assets from Fund share transactions 966,297.51
Total increase in net assets 1,104,745.33
Net assets:
Beginning of period 394,656.78
End of period $ 1,499,402.11
Top Five Holdings December 31, 1997
Company Industry % of Net
Assets
General Multi-Industry 5.5 %
Electric
MBNA Corp. Finance 5.5 %
Travelers Finance 5.4 %
Allstate Finance 5.3 %
Insurance
Int. Bus. Computer 4.9 %
Machines
Top Five Industries December 31, 1997
Industry % of Net
Assets
Finance 19.1 %
Computer 11.4 %
Multi-Industry 10.3 %
Automobile 9.7 %
Retail 7.3 %
Annualized
Total Full Total
Return Year Return
3 1997 Since
Months Inception
Manor Investment 0.53 % 25.54 % 16.36 %
Funds
Lipper Growth & 0.98 % 26.86 % 22.24 %
Income Fund Index
S&P 500 Index 2.76 % 33.36 % 27.86 %