Manor Investment Funds, Inc.
15 Chester Commons
Malvern, PA 19355
September 30, 1999
Dear Fellow Shareholders:
I am pleased to report that Manor Investment Funds, Inc. has grown
with the addition of two new fund portfolios, the Growth Fund and the
Bond Fund. The new portfolios, opened on June 30, grew through new
accounts and contributions from existing shareholders. With over $3.6
million in total assets, our fund family is up substantially since the
beginning of the year.
Each of the Funds performed well compared to the market indices and
other comparable mutual funds, despite a difficult time in the investment
markets. The information in this report provides a listing of fund assets
for each portfolio, top holdings, industry sectors, a chart of performance
and a performance table for each fund.
The Manor Fund outperformed both the S&P 500 and the Lipper Growth &
Income Fund index during the quarter, declining 5.8% compared to declines
of 6.2% and 9.0%. The Fund was helped by strong performance from Intel,
Masco Corp. and Cisco Systems. Intel rose because investors value their
dominance of the microprocessor market. Masco rose after they broadened
their product offerings with the purchase of several companies including
Mills Pride, a manufacturer of kitchen and bathroom cabinets. Cisco
Systems continues to benefit from the growth of the Internet because its
computer networking hubs and routers are the backbone of Internet
communications. The fund was hurt by poor performance from Allstate,
PepsiCo, and Gillette. Pricing pressures in the property and casualty
industry hurt Allstate, while PepsiCo and Gillette were hurt as the weak
dollar offset improvement in their international sales.
The Growth Fund also outperformed both the S&P Mid-cap index and the
Lipper Growth Fund index for the quarter, declining 3.3% compared to
declines of 8.4% and 5.2%. The Fund was helped by strong performance from
Sun Microsystems, BMC Software, and Intel. The growth of the Internet
benefits Sun Micro because their servers and Java programming language are
used widely. BMC Software rebounded on strong business fundamentals as
investors realized that a previous sell off was overdone. The fund was
hurt by poor performance from Bergen Brunswig, Allied Waste, and Bear
Stearns. Bergen was hurt as the new Medicare reimbursement system
pressured the profits of the entire health care provider industry. Allied
Waste stumbled after an expensive acquisition, while Bear Stearns declined
as increasing interest rates hurt financial stocks.
The Bond Fund rose 0.4% during the quarter, less than the 1.1% return
of the Lehman Intermediate Government index, but in line with the 0.4%
return of the Lipper US Government Fund index. The portfolio is
conservative at this time, given uncertainty regarding interest rates and
Y2K related year-end liquidity concerns. With an average yield of 5.7% and
an average maturity of 3.5 years, the fund offers some protection in a
rising interest rate environment. This should serve investors well until
after year-end .
I expect the markets to remain volatile through year-end as investors
struggle with the uncertainty of Fed interest rate hikes, 3rd Quarter
corporate earnings, and normal year-end issues compounded by Y2K concerns.
Since I remain a believer in the long-term potential of the markets, I
continue to view any stock market pullback as a long-term buying
opportunity.
Sincerely,
Daniel A. Morris
Manor
Investment
Funds, Inc.
3rdQuarter Report
1999
Fund Office:
15 Chester Commons
Malvern, PA 19355
610-722-0900 800-787-3334
Managed By:
Morris Capital Advisors, Inc.
Manor Fund
Portfolio of Investements September 30, 1999
Common and Preferred Stock 95.1 % Market Value
Consumer Staples 5.9 %
1,870 Gillette $ 63,463
3,560 Pepsico 108,580
172,043
Retail 7.9 %
1,660 Kmart Preferred Class T 79,058
3,480 McDonalds 150,510
229,568
Medical 7.3 %
1,600 Merck 103,700
2,970 Pfizer 106,549
210,249
Automobile 4.3 %
1,181 Delphi Automotive 18,970
1,690 General Motors 106,364
125,334
Basic Materials 4.3 %
2,050 DuPont 124,025
124,025
Construction 4.5 %
4,210 Masco 130,510
130,510
Multi-Industry 12.5 %
2,610 Allied Signal 156,437
1,750 General Electric 207,484
363,921
Computer 26.1 %
830 America Online 86,372
2,670 Cisco Systems 183,062
980 Hewlett-Packard 88,935
2,160 Intel 160,515
1,980 Intl. Bus. Machines 239,580
758,464
Oils 6.9 %
1,770 Ashland Oil 59,516
1,600 Chevron 142,000
201,516
Finance 12.2 %
2,720 Allstate Insurance 67,830
2,100 Citigroup 92,400
9,630 Elder Trust 74,632
3,560 Mellon Bank 119,705
354,567
Transportation 2.1 %
1,260 Delta Airlines 61,110
61,110
Other 1.1 %
250 S&P 500 Dep. Receipt 32,188
32,188
2,763,495
Cash and Cash Equivalents 4.9 %
FNB WC Demand Deposit 20
FNB WC Investor Choice 143,493
143,513
Total Portfolio $ 2,907,008
Manor Fund
Top Five Holdings Top Five Industries
September 30, 1999 September 30, 1999
Company Industry % of Net Industry % of Net
Assets Assets
IBM Computer 8.2 % Computer 26.1 %
General Elec Multi-Industry 7.1 % Multi-Industry 12.5 %
Cisco Systems Computer 6.3 % Finance 12.2 %
Intel Computer 5.5 % Retail 7.9 %
Allied Signal Multi-Industry 5.4 % Medical 7.3 %
Total Total Total
Return Return Return
3 Months 6 Since
Months Inception
Manor Investment Funds -5.80 % 4.08 % 13.27 %
Lipper Growth & -8.03 % 2.66 % 16.34 %
Income Fund Index
S&P 500 Index -6.25 % 5.36 % 23.88 %
Growth Fund
Portfolio of Investments September 30,1999
Common and Preferred Stock 70.0 % Market Value
Consumer Staples 3.2 %
350 Jones New York $ 10,063
270 Warnaco Group 4,927
14,990
Consumer Discretionary 1.5 %
100 Cablevision 7,275
7,275
Retail 3.1 %
1,400 Bergen Brunswig 14,525
14,525
Medical 6.4 %
380 Biogen 29,949
29,949
Automobile 0.9 %
120 Lear Corp 4,223
4,223
Industrial Products 2.0 %
820 Allied Waste 9,584
9,584
Computer 26.7 %
350 BMC Software 25,047
390 Dell Computer 16,307
200 Intel 14,863
240 Microsoft Corp. 21,735
280 Sun Microsystems 26,040
330 Xilinx 21,625
125,617
Oils 5.5 %
940 Global Marine 15,451
400 Ultramar Dia. Shamrock 10,200
25,651
Finance 4.1 %
250 Bear Stearns 9,609
1,260 Elder Trust 9,765
19,374
Utilities 6.4 %
640 CTC Communications 10,520
270 MCI Worldcom, Inc 19,406
29,926
Transportation 3.6 %
300 Tidewater 7,650
300 Trinity Industries 9,262
16,912
Other 6.6 %
220 Mid Cap SPDR Trust 15,799
120 S&P 500 Dep. Receipt 15,450
31,249
329,275
Cash and Cash Equivalents 30.0 %
FNB WC Investor Choice 140,952
Total Portfolio $ 470,227
Growth Fund
Top Five Holdings September 30, 1999
Company Industry % of Net
Assets
Biogen Medical 6.4 %
Sun Microsystens Computer 5.5 %
BMC Software Computer 5.3 %
Microsoft Corp Computer 4.6 %
Xilinx Computer 4.6 %
Top Five Industries September 30, 1999
Industry % of Net
Assets
Computer 26.7 %
Medical 6.4 %
Utilities 6.4 %
Oils 5.5 %
Finance 4.1 %
Total Return Total Return
3 Months Since Inception
Growth Fund -3.30 % -3.30 %
Lipper Growth Fund Index -5.24 % -5.24 %
S&P Mid Cap Index -8.41 % -8.41 %
Bond Fund
Portfolio of Investments September 30, 1999
Government Bonds 97.3 % Market Value
US Treasury Note 87.6 %
30,000 Due 5/31/2001 $ 29,822
100,000 Due 7/31/2001 99,750
30,000 Due 5/31/2004 29,334
100,000 Due 11/05/2005 99,469
Accrued Interest 4,165
262,540
Treasury Bills 9.7 %
30,000 US T-Bill 6/22/2000 28,926
28,926
Total Bonds 291,466
Cash and Cash Equivalents 2.7 %
FNB WC Investor Choice 8,208
Total Portfolio $ 299,674
Bond Fund
Top Holdings September 30, 1999
Company % of Net Assets
US Treasury Note 7/01 33.3 %
US Treasury Note 11/05 33.2 %
US Treasury Note 5/01 10.0 %
US Treasury Note 5/04 9.8 %
US T-Bill 6/22/00 9.7 %
Total Return Total Return
3 Months Since Inception
Bond Fund 0.40 % 0.40 %
Lipper US Government 0.38 % 0.38 %
Lehman Intermediate Government 1.10 % 1.10 %
