Manor Investment
Funds, Inc.
3rd Quarter Report 1998
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
September 30,1998
Dear Fellow Shareholders:
"Mama said there would be times like this." The events
that have occurred in the financial markets since mid-summer
have shaken the confidence of many investors. The sharp
declines and dramatic interday price swings create an
atmosphere of uncertainty that has driven many away from the
markets entirely. But "Mama" understood the importance of
long-term investing, because in times like this losses are
incurred by those who panic, and great bargains are found by
those who invest wisely.
During the quarter we took some profits in the
portfolio by selling our holdings of Chrysler, and a portion
of our holdings of MBNA Corp. and Travelers, realizing gains
of over $57,000. We reinvested a portion of the proceeds by
purchasing Ashland Oil, Cisco Systems, and increasing our
cash position. Given the economic environment we are
focusing our investment on good defensive companies and
companies that are leaders in their particular industries.
Year-to-date our Fund gave up some of the advantage
that we had accumulated during the first half of the year.
At the end of the quarter, the Fund was down 2.61% for the
year-to-date, while the Lipper Growth & Income Mutual Fund
average was down 2.30%. You can be assured that we are
working diligently to improve that return during the
remainder of the year.
Going forward it is important for investors to realize
that the market will improve, despite this uncertain
environment. Declining interest rates will help the
economy, improve the prospects for corporate earnings, and
reduce the attractiveness of alternative investments. The
5.8% earnings yield of the Dow Jones Industrial Average
compares favorably to the 4.3% yield on T-bills and 5 year
Treasury notes. Remember "Mama's" advice and maintain the
discipline of long-term investing.
Sincerely,
Daniel A. Morris
Manor Investment Funds, Inc
Portfolio of Investments
September 30, 1998
Common and 90.4 % Market
Preferred Stock Value
Consumer Staples 6.2 %
1,100 Coca Cola $63,388
1,870 Gillette 71,527
134,915
Retail 9.5 %
1,160 Kmart Preferred Cl T 58,000
1,740 McDonalds 103,856
1,060 Sears, Roebuck & Co. 46,839
208,695
Medical 7.4 %
430 Merck 55,712
990 Pfizer 104,692
160,404
Automobile 5.5 %
1,190 General Motors 65,301
1,040 Goodyear Tire 53,560
118,861
Basic Materials 3.7 %
1,450 DuPont 81,563
81,563
Construction 4.8%
4,210 Masco 104,198
104,198
Multi-Industry 10.6 %
2,610 Allied Signal 92,329
1,750 General Electric 139,234
231,563
Computer 15.3 %
1,335 Cisco Systems 82,520
980 Hewlett-Packard 51,879
830 Intel 71,172
990 Intl. Bus. Machines 127,215
332,786
Oils 7.2 %
1,770 Ashland Oil 81,863
900 Chevron 75,656
157,519
Finance 17.4 %
2,720 Allstate Insurance 112,880
2,960 Conseco 90,465
2,150 MBNA Corp. 61,544
1,280 Mellon Bank 70,400
1,150 Travelers, Inc. 43,125
378,414
Transportation 2.8 %
630 Delta Airlines 61,268
61,268
Total Common and 1,970,185
Preferred Stock
Cash and Cash Equivalents 9.6 %
FNB West Chester 15,134
Demand Deposit
FNB West Chester 95,046
Investor's Choice
US T-Bill due 12/17/98 99,050
209,230
Total Portfolio $
2,179,415Top Five Holdings
Top Five Industries
September 30, 1998 September 30, 1998
% of % of
Company Industry Net Industry Net
Assets Assets
General Multi- 6.4 % Finance 17.4%
Electric Industry
Intl. Bus. Computer 5.8 % Computer 15.3%
Machines
Allstate Finance 5.2 % Multi- 10.6%
Ins. Industry
Pfizer Medical 4.8 % Retail 9.5 %
Masco Construction 4.8 % Medical 7.4 %
Total Year-to- Total
Return date Return
3 Months 1998 Since
Inception
Manor Investment -15.50% -2.61 % 11.05 %
Funds
Lipper Growth & -12.47% -2.30 % 15.36 %
Income Fund Index
S&P 500 Index -9.95 % 6.00 % 22.60 %
