Manor
Investment Funds, Inc.
Semi-Annual Report
June 30, 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
June 30, 1998
Dear Fellow Shareholders:
I am pleased to report that the Manor Fund continued to
grow, ending the quarter with $2.4 million in total assets.
This growth is the result of new shareholder contributions
and market performance. I thank each of you for
contributing to our success.
Your Fund performed well, rising 1.99% during the 2nd
Quarter, and 15.25% for the year-to-date. We outperformed
the average mutual fund in our category by 1.79% during the
quarter and 3.63% for the year-to-date.
Our strong performance was due, in part, to holdings in
Chrysler, McDonalds, and K-Mart. Chrysler rose dramatically
after the merger offer from Daimler-Benz, while McDonalds
and K-Mart rose on the improving performance of their
underlying businesses. The Fund also enjoyed strong returns
from Pfizer, duPont and Delta Airlines.
We used the cash inflow from shareholder purchases to
add to many of our core holdings during the quarter. We
elected not to add to the positions of some of our stronger
performers because their growth raised their weightings in
the Fund without the additional purchases. During the
quarter we sold Raytheon, received in a spin-off from
General Motors, and we sold the St. Paul Companies, received
in the merger with US F&G. We used the proceeds of the sale
of St. Paul to purchase Mellon Bank.
The 2nd Quarter was a period of uncertainty for many
investors following the tremendous run-up earlier in the
year. The market declined through much of the quarter, and
then, despite concerns about lower corporate profits,
rallied. While it is impossible to predict the future, the
market seems to believe that the effect of the slowdown in
Asia will be offset by a strong domestic economy, low
inflation, and declining interest rates.
I have been asked several times lately if this is the
time to sell and move money out of the stock market. My
answer is the same as at the beginning of the year. We are
in this for the long-term, and despite the day-to-day market
fluctuations, the companies that we hold in the Manor Fund
continue to be good investments. Don't expect unending
double digit returns, but your investment in the Manor Fund
should do well over the long-term, and you will avoid
unnecessary capital gains taxes trying to time the stock
market.
Sincerely,
Daniel A. Morris
Manor Investment Portfolio of June 30, 1998
Funds Inc. Investments
Market
Value
Common & Preferred Stock 92.7 %
Consumer Staples 8.4%
1,100 Coca Cola 94,050
1,870 Gillette
106,356
200,406
Retail 10.5%
970 Kmart Preferred 67,900
Class T
1,740 McDonalds 120,060
1,060 Sears, Roebuck &
Co. 64,726
252,686
Medical 6.1%
430 Merck 57,512
810 Pfizer 88,037
145,549
Automobile 9.7%
1,500 Chrysler Corp. 84,562
1,190 General Motors 79,507
1,040 Goodyear Tire 67,015
231,084
Basic Materials 4.5%
1,450 DuPont 108,297
108,297
Construction 4.2%
1,660 Masco 100,430
100,430
Multi-Industry 10.5%
2,610 Allied Signal 115,819
1,480 General Electric 134,495
250,314
Computer 9.0%
980 Hewlett-Packard 58,678
830 Int. Bus. Machines 95,294
830 Intel 61,524
215,496
Oils 3.2%
900 Chevron 75,375
75,375
Finance 24.1%
1,360 Allstate Insurance 124,525
2,010 Conseco 94,219
3,980 MBNA Corp. 131,589
1,280 Mellon Bank 89,200
2,270 Travelers, Inc. 137,619
577,152
Transportation 2.5%
460 Delta Airlines 59,455
59,455
Total Common & 2,216,244
Preferred Stock
Cash and Cash 7.2%
Equivalents
FNB West Chester 14,949
Demand Deposit
FNB West Chester 60,082
Investor's Choice
US T-bill due
9/17/98 98,958
173,989
Total Portfolio $2,390,233
Statement of Assets & Liabilities
Manor Investment Funds, Inc.
June 30, 1998
Assets
Investments at market value $ 2,390,232.79
(cost: $ 1,984,475.74)
Receivable for:
Dividends - 0 -
Interest 379.91
379.91
2,390,612.70
Liabilities and Net Assets
Payable for:
Expenses 2,324.70
Payable to - 0 -
shareholders
2,324.70
$ 2,388,288.00
Fund Shares outstanding 150,511.277
Pricing of Shares
Net Asset Value per share $ 15.87
Statement of Operations
Manor Investment Funds, Inc.
June 30, 1998
Investment Income
Dividends $11,179.93
Interest 2,596.82
Accrued Income change 113.47
$ 13,890.22
Expenses
Trustee Fee 1,098.12
Management Fee 8,653.54
Misc. Fee 2,398.39
Accrued Expense change 1,688.84
13,838.89
Net Investment Income 51.33
Realized and unrealized gain on investments:
Realized gain on securities transactions:
Proceeds from sales 53,936.71
Cost of securities sold 49,216.67
4,720.04
Unrealized appreciation(depreciation) of investments:
Beginning of period 157,258.07
End of period 405,757.05
248,498.98
Net realized and unrealized gain on investments: 253,219.02
Net increase in net assets from operations $ 253,270.35
Statement of Changes in Net Assets
Manor Investment Funds, Inc.
June 30, 1998
From Operations:
Net Investment income $ 51.33
Net realized gain from security sales 4,720.04
Net change in unrealized appreciation 248,498.98
Net increase in net assets from operations 253,270.35
Deductions to shareholders from:
Net investment income - 0 -
Net realized short term gain - 0 -
Net realized long term gain - 0 -
- 0 -
From Fund share transactions:
Reinvestment of dividends and - 0 -
gain distributions
Proceeds from shares sold 729,452.01
Payments for shares redeemed -93,836.47
Net increase in net assets from Fund share transactions 635,615.54
Total increase in net assets 888,885.89
Net assets:
Beginning of period 1,499,402.11
End of period $ 2,388,288.00
Top Five Holdings June 30, 1998
Company Industry % of Net Assets
Travelers Finance 5.8 %
General Electric Multi-Industry 5.6 %
MBNA Corp. Finance 5.5 %
Allstate Insurance Finance 5.2 %
Mc Donalds Retail 5.0 %
Top Five Industries June 30, 1998
Industry % of Net Assets
Finance 24.1 %
Retail 10.5 %
Multi-Industry 10.5 %
Automobile 9.7 %
Computer 9.0 %
Annualized
Total Return Year to Date Total Return
3 Months 1998 Since Inception
Manor Investment Funds 1.99 % 15.25 % 19.19 %
Lipper Growth & 0.20 % 11.62 % 22.67 %
Income Fund Index
S&P 500 Index 3.30 % 17.71 % 29.74 %