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Manor
Investment Funds, Inc.
Semi-Annual Report
December 31, 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
December 31, 1998
Dear Fellow Shareholders:
I am pleased to report that the Manor Fund continued to
grow, ending the year with $2.7 million in total assets, up
almost $1.2 million since year-end 1997. This growth is the
result of new shareholder contributions and investment
performance. I thank each of you for contributing to our
success.
Your Fund rose 13.65% for the year, outperforming the
average fund in our peer group for the year, as measured by
the Lipper Growth & Income Fund Index. On December 28, the
Board of Directors declared a dividend of $0.19 per share,
for shareholders of record as of December 24, 1998. Of the
total dividend $0.03 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 shareholders.
Our performance was due, in part, to strong returns
from Cisco Systems, IBM, Pfizer, Intel and McDonalds.
Cisco, a recent addition to the Fund, rose on the continued
growth of Internet commerce, while IBM reaped the benefits
of growing revenues from service contracts on mainframe
computers. Pfizer continued to grow based on the popularity
of its blockbuster drug Viagra. Intel and McDonalds
rebounded as the markets recognized their dominant positions
in their respective industries.
We recently sold our entire position in Coca-Cola due
to concerns over declining unit growth and a very high
valuation relative to the market. To replace Coke we
purchased PepsiCo, with a lower relative valuation to the
market, better growth prospects and greater efficiencies as
a result of a recently announced corporate restructuring.
During the final quarter of the year we also added to some
holdings that we felt represented reasonable values, such as
Merck, Kmart and duPont. Towards year-end we closed out
some unprofitable positions to reduce the impact of capital
gains realized during the year.
As we begin a new year, the final year of this decade
and millennium, we face both challenges and opportunities.
The new European currency, the Euro, will rival the dollar
for foreign trade; the Y2K issue will create uncertainty for
government agencies, corporations and investors; and slowing
EPS growth could put pressure on the markets. But the
creation of regional economic systems could stimulate growth
in both Europe and Asia, a stable dollar and strong demand
for US goods could improve exports, and developing
technologies will improve communication, spawn new products,
and open new avenues for commerce. The Manor Fund will
continue to seek these opportunities for the benefit of all
our shareholders.
Sincerely,
Daniel A. Morris
Manor Investment Portfolio of December 31, 1998
Funds Inc. Investments
Market
Value
Common & Preferred Stock 89.5 %
Consumer Staples 7.3 %
1,870 Gillette 89,409
2,560 Pepsico 104,640
194,049
Retail 10.3 %
1,660 Kmart Preferred ClT 96,176
1,740 McDonalds 133,654
1,060 Sears, Roebuck & Co. 45,050
274,880
Medical 8.4 %
680 Merck 100,300
990 Pfizer 123,750
224,050
Automobile 5.2 %
1,190 General Motors 85,159
1,040 Goodyear Tire 52,455
137,614
Basic Materials 4.1 %
2,050 DuPont 108,778
108,778
Construction 4.6 %
4,210 Masco 121,037
121,037
Multi-Industry 11.1 %
2,610 Allied Signal 115,656
1,750 General Electric 178,500
294,156
Computer 17.7 %
1,335 Cisco Systems 123,905
980 Hewlett-Packard 66,946
830 Intel 98,407
990 International Business Machines 182,531
471,789
Oils 6.0 %
1,770 Ashland Oil 85,624
900 Chevron 74,644
160,268
Finance 9.4 %
2,720 Allstate Insurance 104,720
1,150 Citigroup 57,141
1,280 Mellon Bank 88,000
249,861
Transportation 2.5 %
1,260 Delta Airlines 65,520
65,520
Other 2.9 %
630 S&P 500 Depository Receipt 77,687
77,687
Total Common & Preferred Stock 2,379,689
Cash and Cash Equivalents 10.5 %
FNB West Chester 180,024
US T-bill due 3/25/99 98,880
278,904
Total Portfolio $ 2,658,593
Statement of Assets & Liabilities
Manor Investment Funds, Inc.
December 31, 1998
Assets
Investments at market value (cost: $ 2,302,444.02) 2,658,593.29
Receivable for:
Dividends - 0 -
Interest 429.47
429.47
2,659,022.76
Liabilities and Net Assets
Payable for:
Expenses 6,696.83
Payable to shareholders - 0 -
6,696.83
$ 2,652,325.93
Fund Shares outstanding 171,521.851
Pricing of Shares
Net Asset Value per share $ 15.46
Statement of Operations
Manor Investment Funds, Inc.
December 31, 1998
Investment Income
Dividends $ 28,901.17
Interest 7,473.54
Accrued Income change 163.03
$ 36,537.74
Expenses
Trustee Fee 2,266.76
Management Fee 20,100.67
Misc. Fee 3,371.20
Accrued Expense change 6,060.97
31,799.60
Net Investment Income 4,738.14
Realized and unrealized gain on investments:
Realized gain on securities transactions:
Proceeds from sales 491,213.94
Cost of securities sold 464,333.88
26,880.06
Unrealized appreciation(depreciation) of investments:
Beginning of period 157,258.07
End of period 356,149.27
198,891.20
Net realized and unrealized gain on investments 225,771.26
Net increase in net assets from operations $ 230,509.40
Statement of Changes in Net Assets
Manor Investment Funds, Inc.
December 31, 1998
From Operations:
Net Investment income $ 4,738.14
Net realized gain from security sales 26,880.06
Net change in unrealized appreciation 198,891.20
Net increase in net assets from operations 230,509.40
Deductions to shareholders from:
Net investment income 5,241.13
Net realized short term gain - 38,134.82
Net realized long term gain 64,533.88
31,640.19
From Fund share transactions:
Reinvestment of dividends and gain distributions 31,640.19
Proceeds from shares sold 1,255,398.94
Payments for shares redeemed - 332,984.52
Net increase in net assets from Fund share transactions 954,054.61
Total increase in net assets 1,152,923.82
Net assets:
Beginning of period 1,499,402.11
End of period $ 2,652,325.93
Top Five Holdings December 31, 1998
Company Industry % of Net
Assets
IBM Computer 6.9 %
General Electric Multi-Industry 6.7 %
McDonalds Retail 5.0 %
Cisco Systems Computer 4.7 %
Pfizer Medical 4.7 %
Top Five Industries December 31, 1998
Industry % of Net
Assets
Computer 17.7 %
Multi-Industry 11.1 %
Retail 10.3 %
Finance 9.4 %
Medical 8.4 %
Annualized
Total Return Full Year Total Return
3 Months 1998 Since Inception
Manor Investment Funds 16.70 % 13.65 % 15.52 %
Lipper Growth & Income Fund Index 16.25 % 13.58 % 19.51 %
S&P 500 Index 21.29 % 28.57 % 28.08 %
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