Registration No. 33-99520
File Number: 811-09134
United States
Securities and Exchange Commission
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No.
Post-Effective Amendment No. 7 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 7 [X]
Exact name of Registrant as Specified in Charter:
Manor Investment Funds, Inc.
Address of Principal Executive Offices:
15 Chester Commons
Malvern, PA 19355
610-722-0900
Name and Address of Agent for Service:
Daniel A. Morris
15 Chester Commons
Malvern, PA 19355
Approximate Date of Proposed Public Offering:
As soon as practical after the Registration Statement becomes
effective.
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)
X on June 30, 1999 pursuant to paragraph (a) of rule 485
M Manor
Investment Funds, Inc. Prospectus
Malvern, PA 19355 April 30, 1999
610-722-0900
800-787-3334
Manor Investment Funds, Inc.
Manor Investment Funds, Inc. (the "Fund") is an open-end management
investment company. The Fund was incorporated in Pennsylvania on September
13, 1995. The Fund's registered office is 15 Chester Commons, Malvern, PA
19355. The company currently issues shares in three series, which we call
"Funds". Each series has distinct investment objectives and policies, and
a shareholder's interest is limited to the series in which he or she owns
shares. The series are the Manor Fund, Growth Fund, and Bond Fund. Each
is a "no-load" fund, and there are no sales or 12b-1 charges.
Manor Fund For Conservative Growth & Income
Growth Fund For long-term Growth
Bond Fund For Intermediate-term Fixed Income
The funds are designed for long-term investors, including those who wish to
use shares of one or more series as a funding vehicle for tax-deferred
plans, including tax-qualified retirement plans and Individual Retirement
Account (IRA) plans.
Fund Share Purchase
Shares of the Funds may only be purchased from the Fund at net asset value
as next determined after receipt of order. The minimum initial purchase is
$1,000 and the minimum subsequent purchase is $100.
These securities have not been approved or disapproved by the Securities
and Exchange Commission, nor has it passed upon the accuracy or adequacy of
this prospectus. Any representation to the contrary is a criminal offense.
Manor Investment Funds, Inc.
Table of Contents
Investments, Risks, and Performance
Investment Objectives 3
Principal Investment Strategies 3
Principal Risks 3
Performance Information 4
Fee Table
Fee Table 5
Investment Objectives, Principal Investment
Strategies & Related Risks
Investment Objectives 6
Principal Investment Strategies 6
Related Risks 8
Year 2000 8
Management, Organization & Capital Structure
Management 9
Investment Advisor 9
Capital Structure 10
Voting Rights 10
Shareholder Information
Pricing of Shares 10
Purchasing Shares 10
Dividends and Distributions 10
Redemptions 11
Taxes 11
Reports to Shareholders 12
Retirement Accounts 12
Distribution
Distribution 12
Financial Highlights
Financial Highlights 15
INVESTMENTS, RISKS, AND PERFORMANCE
Investment Objectives
The Manor Fund seeks long-term capital appreciation and a moderate level
of income.
The Growth Fund seeks long-term capital appreciation.
The Bond Fund seeks to provide current income.
Principal Investment Strategies
The Manor Fund invests primarily in the common stock of large
corporations with an average market capitalization of approximately
$50 billion, or more. The Manor Fund generally invests in companies
with growing earnings and dividends, a high level of free cash flow
available to finance growth or repurchase outstanding shares, and a
strong financial structure to support future growth. The portfolio
manager uses growth and earnings information from industry sources
and applies his own proprietary analysis to project future
valuations. The portfolio manager invests in companies that he
believes have the opportunity to double in value over five years
based on their current price relative to future cash flows and the
underlying value of the firm's assets. The Manor Fund generally
holds individual investments for three to five years.
The Growth Fund invests primarily in the common stock of large to mid-
sized corporations with an average market capitalization of
approximately $2 billion, or more. The Growth Fund generally invests
in companies that have strong growth in earnings or revenues, the
potential to maintain above average growth, and a reasonable
valuation relative to the growth potential. The portfolio manager
uses growth and earnings information from industry sources and
applies his own proprietary analysis to project future valuations.
The portfolio manager invests in companies that he believes have the
opportunity to more than double in value over five years based on
their current price relative to future cash flows and the underlying
value of the firm's assets. The Growth Fund generally holds
individual investments for three to five years.
The Bond Fund invests primarily in income producing securities issued by
the U.S. Government or Agencies of the U.S. Government, such as U.S.
Treasury bills, notes and bonds, or GNMA's, FNMA's and FHLB's. The
Bond Fund generally maintains an average maturity of three to seven
years, depending upon the interest rate and economic environment.
Principal Risks
An investor could lose money through their investment in the funds. The
Funds are intended for long-term investors who can accept fluctuations in
value and other risks associated with seeking the investment objectives of
each Fund.
Risks in the Manor Fund include:
. the possibility of a general decline in the stock market,
. the possibility that a shift in economic conditions will adversely
impact large corporations,
. or that the Fund manager will be unsuccessful in identifying
attractive investments.
Risks in the Growth Fund include:
. the possibility of a general decline in the stock market,
. the possibility that a shift in economic conditions will adversely
impact companies with high growth rates,
. or that the Fund manager will be unsuccessful in identifying
attractive investments.
Risks in the Bond Fund include:
. the possibility that a rise in interest rates or inflation
expectations will result in a decline in the value of portfolio
investments,
. or that the portfolio manager will be unsuccessful in structuring
the portfolio to take advantage of shifts in the interest rate
markets.
In addition to the risks outlined above each Fund carries the risk that,
Daniel A. Morris, the portfolio manager will be unable to perform his
duties due to death or disability.
Performance Information
The bar chart and table below provide an indication of the risk of
investing in the Fund. The Bar chart shows the Fund's performance in each
calendar year since inception. The table shows how the Fund's average
annual returns compare to a broad-based securities index and an average of
other Funds in a peer group. Keep in mind that past performance does not
indicate how the Fund will perform in the future. The calculation assumes
reinvestment of all dividends and distributions and reflects the effect of
all recurring fees but ignores individual income tax consequences to
stockholders.
During the period shown in the bar chart above the lowest return for a
calendar quarter for the Manor Fund was _15.5% during the 3rd Quarter of
1998, the highest return was 16.7% during the 4th Quarter of 1998.
Average Annual Total Returns for the Years Ended December 31, 1998
Since
1 Year 3 Years Inception
9/25/95
Manor Fund 13.65 % 16.88 % 15.52 %
Lipper Growth & Income Fund Index 13.58 % 19.70 % 19.51 %
S&P 500 Index 28.57 % 28.22 % 28.08 %
The primary index for comparison is the Lipper Growth & Income Fund Index.
This index, compiled by Lipper Analytical, Inc., is comprised of other
mutual funds managed using similar investment objectives as the Manor Fund.
The S&P 500 is a broad market index of large capitalization stocks.
FEE TABLE
The following table describes the fees and expenses that are incurred when
you buy, hold or sell shares of the fund. The expenses shown under Annual
Fund Operating Expenses are based upon those incurred in the fiscal year
ending December 31, 1998 for the Manor Fund.
Manor Growth Bond
Fund Fund Fund
Annual Fund Operating Expenses
(expenses that are deducted from fund assets)
Management fees 1.0% 1.0% 0.5%
All other expenses 0.5% 0.5% 0.5%
------- ------ ------
Total operating expenses * 1.5% 1.5% 1.0%
==== ==== ====
* The expenses shown for the Growth Fund and the Bond Fund are estimates
based on the expected operating expenses of those Funds for their first
full year of operation.
Example
This example is intended to help you compare the cost of investing in each
Fund with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time
periods indicated and then redeem all of your shares at the end of those
periods. The Example also assumes that your investment has a 5% return
each year and that the Fund's operating expenses remain the same. Although
your actual costs may be higher or lower, based on these assumptions your
costs would be:
Fund 1 Year 3 Years 5 Years 10 Years
Manor Fund $ 156 $ 488 $ 843 $ 1,628
Growth Fund $ 156 $ 488 NA NA
Bond Fund $ 105 $ 327 NA NA
This example should not be considered a representation of past or future
expenses or performance. Actual expenses may be greater or less than those
shown.
The Growth Fund and the Bond Fund are new funds. It is expected that the
Growth Fund will not incur operating expenses greater than 1.5% during its
first year of operation. It is expected that the Bond Fund will not incur
operating expenses greater than 1.0% during its first year of operation.
INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES & RELATED RISKS
Investment Objectives
The Manor Fund seeks long-term capital appreciation and a moderate level
of income.
The Growth Fund seeks long-term capital appreciation.
The Bond Fund seeks to provide current income.
Principal Investment Strategies
The Manor Fund invests primarily in the common stock of large
corporations with an average market capitalization of approximately
$50 billion, or more. The fund may also invest in the preferred
stock or the corporate fixed income securities of these companies
that are convertible into common stock. The primary consideration in
the selection of stock investments for the Manor Fund is the current
price of the shares relative to the earnings and potential growth of
earnings for each company. The Manor Fund generally invests in
companies with growing earnings and dividends, a high level of free
cash flow available to finance growth or repurchase outstanding
shares, and a strong financial structure to support future growth.
The portfolio manager uses growth and earnings information from
industry sources and applies his own proprietary analysis to project
future valuations. The portfolio manager invests in companies that
he believes have the opportunity to double in value over five years
based on their current price relative to future cash flows and the
underlying value of the firm's assets.
Under normal market conditions, the Manor Fund should be fully
invested. To the extent that investments meeting a Fund's criteria
for investment are not available, or when the Advisor considers a
temporary defensive posture advisable, the Fund may invest without
limitation in high-quality corporate debt obligations of U.S.
companies, U.S. government and agency obligations, or money market
instruments.
The Manor Fund generally holds individual investments for three to
five years. The Fund will not borrow or invest in foreign
securities, and no more than 5% of the Fund's net assets will be
invested in companies that do not have three years of continuous
operations. The Fund may also invest in exchange traded securities
that track the value of an underlying basket of securities such as
the S&P 500 Index or the S&P Mid-Cap Index.
In seeking to achieve its investment objective, the Manor Fund
ordinarily invests on a long-term basis. Occasionally, securities
may be sold within 12 months of purchase if circumstances of a
particular company, industry, or the general market should change.
The Fund does not propose to purchase securities for short term
trading in the ordinary course of operations. Accordingly, it is
expected that the annual turnover rate will not exceed 50%. There
may be times when management deems it advisable to substantially
alter the composition of the portfolio, in which event, the portfolio
turnover rate might substantially exceed 50%; this would only result
from special circumstances and not from the Fund's normal operations.
The Growth Fund invests primarily in the common stock of large to mid-
sized corporations with an average market capitalization of
approximately $2 billion, or more. The Growth Fund generally invests
in companies that have strong growth in earnings or revenues, the
potential to maintain above average growth, and a reasonable
valuation relative to the growth potential. The Growth Fund
generally invests in companies with a high level of free cash flow
available to finance growth or repurchase outstanding shares, and
products or services that provide a comparative advantage over
competitors. The portfolio manager uses growth and earnings
information from industry sources and applies his own proprietary
analysis to project future valuations. The portfolio manager invests
in companies that he believes have the opportunity to more than
double in value over five years based on their current price relative
to future cash flows and the underlying value of the firm's assets.
Under normal market conditions, the Growth Fund should be fully
invested. To the extent that investments meeting a Fund's criteria
for investment are not available, or when the Advisor considers a
temporary defensive posture advisable, the Fund may invest without
limitation in high-quality corporate debt obligations of U.S.
companies, U.S. government and agency obligations, or money market
instruments.
The Growth Fund generally holds individual investments for three to
five years. The Fund will not borrow or invest in foreign
securities, and no more than 5% of the Fund's net assets will be
invested in companies that do not have three years of continuous
operations. The Fund may also invest in exchange traded securities
that track the value of an underlying basket of securities such as
the S&P 500 Index or the S&P Mid-Cap Index.
In seeking to achieve its investment objective, the Growth Fund
ordinarily invests on a long-term basis. Occasionally, securities
may be sold within 12 months of purchase if circumstances of a
particular company, industry, or the general market should change.
The Fund does not propose to purchase securities for short term
trading in the ordinary course of operations. Accordingly, it is
expected that the annual turnover rate will not exceed 50%. There
may be times when management deems it advisable to substantially
alter the composition of the portfolio, in which event, the portfolio
turnover rate might substantially exceed 50%; this would only result
from special circumstances and not from the Fund's normal operations.
The Bond Fund invests primarily in income producing securities issued by
the U.S. Government or Agencies of the U.S. Government, such as U.S.
Treasury bills, notes and bonds, or GNMA's, FNMA's and FHLB's. The
Bond Fund generally maintains an average maturity of three to seven
years, depending upon the interest rate and economic environment.
The Bond Fund generally maintains an overall credit rating of A or
better for portfolio securities, as measured by Moodys or S&P. The
Fund may also invest in short term securities issued at a discount to
face value such as U.S. Treasury bills. Zero coupon securities with
maturities greater than one year will not generally comprise more
than 10% of the portfolio.
The Bond Fund will generally hold investments to maturity; however,
positions may be liquidated to shift the interest rate sensitivity of
the portfolio in response to changing market and economic conditions.
The portfolio manager will actively manage the average maturity of
the portfolio by reducing the maturity of portfolio securities in
anticipation of rising interest rate environments and extending the
maturity of portfolio securities in anticipation of falling interest
rate environments. The Fund may also invest up to 35% of the
portfolio in corporate debt instruments if these investments provide
attractive return potential.
Related Risks
In addition to the risks associated with the investment strategy for any
particular fund an investor is subject to risk from general market
fluctuations, interest rate shifts, credit risk, and the effect of
inflation.
Market Risk
In the event of a general market decline the value of the funds could
decline even if the manager has moved to a defensive position. The values
of investments may change, and possibly decrease, perhaps severely, in
response to fluctuations in the stock market generally.
Interest Rate Risk
If interest rates increase the value of portfolio investments could decline
as the market adjusts to the reduced demand for stock and long term bond
investments. The potential for fluctuations in bond prices is primarily
due to changes in interest rates. Bonds with longer maturities have
greater interest rate risk than bonds of shorter maturities.
Credit Risk
Credit risk could impact the value of specific stock or bond investments,
or an entire industry sector, if investors become concerned abut the
ability of creditors to continue debt service on an ongoing basis. Credit
risk is the chance that the issuer of a bond will default on its promise to
pay interest and or principal at maturity. Credit ratings are an attempt
to assess this risk. Generally, the lower a bond's credit rating the
higher the interest the bond must pay to attract investors and compensate
them for taking additional risk.
Inflation Risk
Inflation is the impact of rising prices over time, it has the effect of
reducing the future value of financial assets due to decreased purchasing
power. For an investor to be better off their portfolio must increase in
value faster than the rate of inflation. Inflation, and investor's
expectation of future inflation, also effects the current value of
portfolio investments. If investors expect inflation to rise in the future
they will demand a higher return to compensate for the increase. This will
force the price of fixed income securities lower, raising yields. The
increase in yields will increase the financing costs for companies, thereby
reducing earnings. The reduction in earnings could then lead to lower
stock prices.
Year 2000
Some computer systems used today are unable to process date-related
information because they are not programmed to distinguish between the year
2000 and the year 1900. The portfolio manager takes into consideration the
impact that this problem could have on each investment in the fund. In
addition, the smooth operation of the Funds depends on the ability of the
Funds' custodian and the other service providers to the Funds to provide
services without interruption. The Adviser, like many other businesses, is
taking steps to ensure that the computer systems on which the smooth
operation of the Funds depends will continue to function properly. The
Adviser is working with the service providers to the Funds, such as the
custodian and various broker-dealers through which portfolio securities of
the Funds are traded, to arrange for testing of internal and external
systems. Based on the information currently available, the Adviser does
not anticipate any material impact on the delivery of services currently
provided. There can be no guarantee, however, that the steps taken by the
Adviser in preparation for the year 2000 will be sufficient to avoid any
adverse impact on the Funds.
MANAGEMENT, ORGANIZATION & CAPITAL STRUCTURE
Management
Shareholders meet annually to elect all members of the Board of Directors,
select an independent auditor, and vote on any other items deemed pertinent
by the incumbent Board. The Directors supervise the operation of the Fund
in accordance with its stated objectives, policies, and investment
restrictions. The Board appoints the officers to run the Fund and selects
an Investment Adviser to provide investment advice. It meets four times a
year to review Fund progress and status. In addition, a non-interested
Director performs an independent audit whenever requested by the Board.
Investment Adviser
Morris Capital Advisors, Inc., 15 Chester Commons, Malvern, PA is a
Pennsylvania corporation that acts as sole Investment Adviser to the Fund.
Mr. Daniel A. Morris owns all outstanding shares of Morris Capital
Advisors, Inc. He is the director and officer of the Investment Adviser
and is also president of the Fund.
Daniel A. Morris is responsible for security analysis and portfolio
management decisions on a day-to-day basis. Mr. Morris has been a
shareholder, executive officer and portfolio manager for investment
advisors to mutual funds and other investors since 1981.
On September 18, 1995 the shareholders of the Fund approved a management
and advisory contract with Morris Capital Advisors, Inc., to act as
Investment Adviser of the Fund, which was unanimously approved by the Board
of Directors. This agreement will continue on a year to year basis
provided that approval is voted at least annually by a majority of the
directors of the Fund who are neither parties to the agreement nor
interested persons as defined in the Investment Company Act of 1940.
Under the agreement, the Investment Adviser will direct the purchase or
sale of investment securities in accordance with the stated objectives of
the Fund, under the review of the Directors of the Fund. The Agreement
may be terminated at any time, without the payment of any penalty, by the
Board of Directors or by vote of a majority of the outstanding voting
securities of the Fund on not more than 60 days' written notice to the
Investment Adviser. In the event of its assignment, the Agreement will
terminate automatically. For these services the Fund has agreed to pay
to Morris Capital Advisors, Incorporated a fee of 1% per year on the net
assets of the Funds (0.5% for the Bond Fund). This rate of the advisory
fee is generally higher than that paid by most mutual funds. All fees are
computed on the average daily closing net asset value of the Fund and are
payable monthly. The Investment Adviser will forego all or a portion of
its fees in order to hold the total expenses of the Funds to no more than
1.5% of averaged assets (1.0% for the Bond Fund).
Pursuant to its contract with the Fund, the Investment Adviser is required
to render research, statistical, and advisory services to the Fund; and to
make specific recommendations based on the Fund's investment requirements.
Fees of the custodian, registrar, and transfer agents shall be paid by the
Fund. The Fund pays all other expenses, including fees and expenses of
directors not affiliated with the Adviser, if any; legal and accounting
fees; interest, taxes, and brokerage commissions, record keeping and the
expense of operating its offices. The Investment Adviser has paid the
initial organizational costs of the Fund and will reimburse the Fund for
any and all losses incurred because of rescinded purchases.
Capital Structure
The authorized capitalization of the Funds is 10,000,000 shares of common
stock of $.001 par value per share. Each Fund share has equal dividend,
distribution and liquidation rights of that Fund.
Voting Rights
Each holder of common stock has one vote for each share held. Voting
rights are non-cumulative, which means that the holders of a majority of
shares of common stock can elect all the directors of the Fund if they so
choose, and the holders of the remaining shares will not be able to elect
any person as a director. Issues specific to a particular Fund are voted
only by shareholders of that Fund.
SHAREHOLDER INFORMATION
Pricing of Shares
The net asset value of the Fund's shares are determined as of the close of
trading (presently 4:00 p.m.) on the New York Stock Exchange on each
business day the Exchange is open. The Exchange is closed on most national
holidays. The net asset value is not calculated if the New York Stock
Exchange is closed for trading. The price is determined by dividing the
value of its securities, plus any cash and other assets less all
liabilities, by the number of shares outstanding. The market value of
securities listed on a national exchange is determined to be the last
recent sales price on such exchange. Listed securities that have not
recently traded and over-the-counter securities are valued at the last bid
price in such market. Short term paper (debt obligations that mature in
less than 60 days) are valued at amortized cost which approximates market
value. Other assets are valued at fair value as determined in good faith
by the Board of Directors.
Purchasing Shares
The offering price of shares is the net asset value per share next
determined after receipt of the purchase order by the Fund and is computed
in the manner described under the caption "PRICING OF SHARES" in this
prospectus. The Fund reserves the right at its sole discretion to
terminate the offering of its shares made by this Prospectus at any time
and to reject purchase applications when, in the judgment of the management
such termination or rejection is in the best interests of the Fund. The
Fund will maintain an account for each shareholder.
Initial purchase of shares of the Fund must be made by application to the
Fund. To purchase shares mail a check payable to Manor Investment Funds,
Inc., complete the application form included in this prospectus, and mail
to Manor Investment Funds, 15 Chester Commons, Malvern, PA 19355. For
additional information contact the Fund at 610-722-0900. Subsequent
purchases may be made by mail or in person. The minimum is $100, but less
may be accepted under special circumstances. Shareholders may also
authorize the fund to automatically debit their bank account to purchase
shares by completing the necessary information on their account
application. Shareholders may also purchase shares of any Fund by
directing a transfer from another Fund by telephone. Shares can also be
purchased by automatic payroll deduction, or by automatic deduction from an
account that you specify.
Dividends and Distributions
The Fund will automatically retain and reinvest dividends and capital gain
distributions and purchase additional shares for the shareholder at net
asset value as of the close of business on the distribution date. A
shareholder may at any time by letter or forms supplied by the Fund direct
the fund to pay dividend and/or capital gains distributions, if any, to
such shareholder in cash.
Redemptions
The Fund will redeem all or any portion of the total amount of the shares
of any shareholder upon written request for redemption signed by the
shareholder. Proper endorsements guaranteed either by a national bank or a
member firm of the New York Stock Exchange may be required unless
management knows the shareholder.
Shares are redeemed at the net asset value per share next determined after
notice is received by the Fund. The proceeds received by the shareholder
may be more or less than the cost of such shares, depending upon the net
asset value per share at the time of redemption; the difference should be
treated by the shareholder as a capital gain or loss for federal income tax
purposes.
Payment by the Fund will ordinarily be made by check within seven days
after tender. The Fund may suspend the right of redemption or postpone the
date of payment if: The New York Stock Exchange is closed for other than
customary weekend or holiday closings, or when trading on the New York
Stock Exchange is restricted as determined by the Securities and Exchange
Commission or when the Securities and Exchange Commission has determined
that an emergency exists, making disposal of fund securities or valuation
of net assets not reasonably practicable.
To redeem shares send your written request to Manor Investment Funds, 15
Chester Commons, Malvern, PA 19355. For additional information contact
the Fund at 610-722-0900.
Taxes
The Fund will endeavor to qualify annually for and elect tax treatment
applicable to a regulated investment company under Subchapter M of the
Internal Revenue Code (the "Code").
Distribution of any net long-term capital gains realized by the fund will
be taxable to the shareholder as long-term capital gains, regardless of the
length of time Fund shares have been held by the investor. All income
realized by the Fund including short-term capital gains, will be taxable to
the shareholder as ordinary income. Dividends from net income will be made
annually or more frequently at the discretion of the Fund's Board of
Directors. Dividends received shortly after purchase of shares by an
investor will have the effect of reducing the per share net asset value of
his shares by the amount of such dividends or distributions and, although
in effect a return of capital, are subject to federal income taxes.
The Fund is required by Federal law to withhold 31% of reportable payments
(which may include dividends, capital gains, distributions and redemptions)
paid to shareholders who have not complied with IRS regulations. In order
to avoid this withholding requirement, you must certify on the application
form supplied by the Fund that your Social Security or Taxpayer
Identification Number provided is correct and that you are not currently
subject to back-up withholding, or that you are exempt from back-up
withholding.
Reports to Shareholders
The Fund sends shareholders quarterly reports showing the value of their
account and the performance of the Fund. Shareholders also receive annual
reports containing certified financial statements and other periodic
reports, at least semiannually, containing unaudited financial statements.
Retirement Accounts
The Fund maintains Individual Retirement Accounts that allow you to invest
in a Regular IRA, Roth IRA or SIMPLE IRA on a tax deferred basis. You may
also "roll over" or transfer a lump sum distribution from a qualified
pension or profit-sharing plan to your IRA, thereby postponing federal
income tax on the distribution. If your employer has a Simplified Employee
Pension Plan (SEP), you may establish a Regular IRA with the Fund to which
your employer may contribute, subject to special rules designed to avoid
discrimination.
There is no charge to open and maintain an IRA account with Manor
Investment Funds. The Board of Directors may change this policy if they
deem it to be in the best interests of all shareholders. All IRA's may be
revoked within 7 days of their establishment with no penalty. A Disclosure
Statement describing the general provisions of the retirement account is
provided for all prospective account holders, as required by U.S. Treasury
Regulations.
DISTRIBUTION
The Fund acts as transfer agent for its own shares. First National Bank of
West Chester acts as trustee for the Fund.
Manor Investment Funds, Inc.
New Account Application
Use this form for individual, custodial, trust, profit sharing or pension
plan accounts. For any additional information please contact the Fund at
610-722-0900 or 800-787-3334.
6. Investments Fund Selection:(must total 100%)
Initial Investment:
$ ______________________
(Minimum initial investment $1,000) Manor Fund %
Make your check payable to:
Manor Investment Funds, Inc. Growth Fund %
15 Chester Commons,
Malvern, PA 19355
Bond Fund %
2. Registration (please print)
Individual _________ ___ ____________ _______________ _____________
First Name MI Last Name SocialSecurity # Birthdate
Joint Owner* __________ __ _____________ ______________ _____________
First Name MI Last Name SocialSecurity # Birthdate
* Registration will be Joint Tenancy with Rights of
survivorship (JTWROS) unless otherwise specified.
Gift to Minors _________________________ _____ _________________________
Custodian's First Name MI Last Name
_________________________ _____ _________________________
Minor's First Name MI Last Name
________________________ _____________________ _______________
Minor's SocialSecurity # Minor's Birthdate State of Residence
Corporation ___________________________________________________
Trust, Estate Name of Trustees(If to be included in registration)
Pension Plan
Partnership ___________________________________________________
Name
Other Entity ____________________________ ________________________
Social Security # or Tax ID # Date of Agreement
**Corporate Resolution is required.
*** Additional documentation and certification may be required.
3. Mailing Address (please print)
____________________________________________ _____________
Street Apt./Suite
________________________________ _______ ______________
City State Zip
______________________________ ______________________________
Daytime Phone # Evening Phone #
Application continued on next page.
4. Distribution Options
Dividends and capital gains will be reinvested if no option is selected.
___Pay all income in cash.____Pay all capital gains in cash.
5. Signature and Certification required by the Internal Revenue Service
Neither the Fund nor its transfer agent will be responsible
for the authenticity of transaction instructions received by
telephone, provided that reasonable security procedures have
been followed.
Under the penalty of perjury, I certify that (1) the Social
Security Number or Taxpayer Identification Number shown on
this form is my correct Taxpayer Identification Number, and
(2) I am not subject to backup withholding either as a
result of a failure to report all interest or dividends, or
the IRS has notified me that I am no longer subject to
backup withholding. The IRS does not require your consent
to any provision of the document other than the
certifications required to avoid backup withholding.
_________________________________________________ __________________
Signature of Owner or Custodian Date
_________________________________________________ __________________
Signature of Co-owner Date
If shares are to be registered in (1) joint names, both
persons should sign, (2) a custodian for a minor, the
custodian should sign, (3) a trust, the trustee(s) should
sign, or (4) a corporation or other entity, an officer
should sign and print name and title on the space provided
below.
Print name and title of officer signing for a corporation or
other entity
6. Automatic Deposit Authorization
I authorize Manor Investment Funds, Inc. to instruct my
bank/savings institution to make withdrawals from the
account listed below to be deposited in my account with the
Fund. I understand this authorization may be revoked by me
at any time by providing Manor Investment Funds, Inc. with a
written notice to discontinue my automatic payments.
Monthly Quarterly
Amount: ___________________ 15th day of the month Last business day
of the month
Financial Institution: _________________ Bank phone number:______________
Your Account Number: _______________ Bank routing number:________________
Signature:___________________________ Date:____________________
Signature:___________________________ Date:____________________
Please include a voided check.
FINANCIAL HIGHLIGHTS INFORMATION
The financial highlights table is intended to help you understand
the Fund's financial performance since inception. Certain
information reflects financial results for a single Fund share.
The total returns in the table represent the rate that an
investor would have earned on an investment in the Fund (assuming
reinvestment of all dividends and distributions). This
information has been audited by Claude B. Granese, CPA, whose
report, along with the Fund's financial statements, are included
in the Statement of Additional Information and the Annual Report,
which is available upon request.
Manor Fund
Year Year Year Since
Ending Ending Ending Inception
1998 1997 1996 9/30/95
PER SHARE OPERATING
PERFORMANCE:
Net Asset Value, beginning $13.77 $11.13 $ 9.97 $ 10.00
Net Investment Income 0.03 0.06 0.03 0.02
(loss)
Net Realized & Unrealized 1.85 2.78 1.16 - 0.02
Gain(loss)
------ ------ ------ ------
Total from Operations 1.88 2.84 1.19 0.00
Dividends from net 0.03 0.04 0.03 0.03
investment income
Dividends from net 0.16 0.16 - 0 - - 0 -
realized gains
------ ------ ------ ------
0.19 0.20 0.03 0.03
Net Asset Value, ending $15.46 $13.77 $11.13 $ 9.97
====== ====== ====== ======
Total Investment Return 13.65% 25.52% 11.98% - 0.3 %
====== ====== ====== ======
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of year $ 2,659 $1,499 $ 395 $ 111
(000's)
Ratio of expenses to 1.50 % 1.42 % 1.50 % 0.38 %
average net assets
Ratio of Net Investment
Income to Average Assets 0.22 % 0.50 % 0.67 % 0.34 %
Portfolio Turnover rate 23 % 27 % 14 % - 0 -
* 1.24% and 1.50%, respectively when annualized
PROSPECTUS
M
Manor Investment Funds, Inc.
Malvern, PA 19355
610-722-0900
800-787-3334
A no-load open-end management investment company issuing shares
in three series,
the Manor Fund, Growth Fund, and Bond Fund. The Funds are
designed for long-term investors.
Additional Information
Additional information about the Fund's investments is available
in the Fund's annual and semi-annual reports to shareholders. In
the Fund's annual report you will find a discussion of the market
conditions and investment strategies that significantly affected
the Fund's performance during its last fiscal year.
This Prospectus, which should be retained for future reference,
is designed to set forth concisely the information that you
should know before you invest. A Statement of Additional
Information (SAI), dated April 30, 1999, is incorporated by
reference into this prospectus. This means that it is legally
part of this Prospectus. A copy of the SAI may be obtained
without charge by writing or calling the Fund directly at 800-
787-3334. Annual and Semi-annual reports are also available upon
request.
Information about the Fund (including the SAI) can be reviewed
and copied at the Commission's Public Reference Room in
Washington, D.C. Information on the operation of the public
reference room may be obtained by calling the Commission at 1-
800-SEC-0330. Reports and other information about the Fund are
available on the Commission's Internet site at
http:\\www.sec.gov. Copies may be obtained, upon payment of a
duplicating fee, by writing the Public Reference Section of the
SEC, Washington, DC 20549-6009.
Investment Company Act File No. 811-09134
FORM N-1A
PART B
STATEMENT OF ADDITIONAL INFORMATION
April 30, 1999
Manor Investment Funds, Inc.
Malvern, PA 19355
610-722-0900
800-787-3334
This Statement of Additional Information is not a
Prospectus, and should be read in conjunction with the Fund's
current Prospectus (dated April 30, 1999). To obtain the
Prospectus, please write the Fund or call either of the telephone
numbers that are shown above.
TABLE OF CONTENTS
Fund History 1
Description of the Fund and its Investments & Risks 2
Management of the Fund 5
Control Persons and Principal Holders of Securities 6
Investment Advisory and Other Services 6
Brokerage Allocation and Other Practices 7
Capital Stock and Other Securities 7
Purchase, Redemption and Pricing of Shares 7
Taxation of the Fund 8
Underwriters 9
Calculation of Performance Data 9
Financial Statements 10
No person has been authorized to give any information or to
make any representations other than those contained in this
Statement of Additional Information and the Prospectus dated
April 30, 1999 and, if given or made, such information or
representations may not be relied upon as having been authorized
by Manor Investment Funds, Inc.
This Statement of Additional Information does not constitute
an offer to sell securities.
FUND HISTORY
Manor Investment Funds, Inc. (the "Fund") is an open-end
management investment company. The Fund was incorporated in
Pennsylvania on September 13, 1995. The Fund's registered office
is 15 Chester Commons, Malvern, PA 19355. The company currently
issues shares in three series, which we call "Funds". Each
series has distinct investment objectives and policies, and a
shareholder's interest is limited to the series in which he or
she owns shares. The series are the Manor Fund, Growth Fund, and
Bond Fund. Each is a "no-load" fund, and there are no sales or
12b-1 charges.
DISCRIPTION OF THE FUNDS AND ITS INVESTMENTS AND RISKS
The mutual funds offered are the Manor Fund, Growth Fund, and
Bond Fund. Each of the Funds is a no-load "mutual fund." There
is no commission or charge when shares are purchased, and no 12b-
1 charges. The Funds are a series of Manor Investment Funds,
Inc., and each Fund is a separate portfolio of securities and
other assets, with its own investment objective and policies.
Morris Capital Advisors, Inc. provides investment advisory and
administrative services to the Funds.
Investment Objectives
The Manor Fund seeks long-term capital appreciation and a
moderate level of income.
The Growth Fund seeks long-term capital appreciation.
The Bond Fund seeks to provide current income.
Principal Investment Strategies
The Manor Fund invests primarily in the common stock of large
corporations with an average market capitalization of
approximately $50 billion, or more. The fund may also
invest in the preferred stock or the corporate fixed income
securities of these companies that are convertible into
common stock. The primary consideration in the selection of
stock investments for the Manor Fund is the current price
of the shares relative to the earnings and potential growth
of earnings for each company. The Manor Fund generally
invests in companies with growing earnings and dividends, a
high level of free cash flow available to finance growth or
repurchase outstanding shares, and a strong financial
structure to support future growth. The portfolio manager
uses growth and earnings information from industry sources
and applies his own proprietary analysis to project future
valuations. The portfolio manager invests in companies
that he believes have the opportunity to double in value
over five years based on their current price relative to
future cash flows and the underlying value of the firm's
assets.
Under normal market conditions, the Manor Fund should be
fully invested. To the extent that investments meeting a
Fund's criteria for investment are not available, or when
the Advisor considers a temporary defensive posture
advisable, the Fund may invest without limitation in high-
quality corporate debt obligations of U.S. companies, U.S.
government and agency obligations, or money market
instruments.
The Manor Fund generally holds individual investments for
three to five years. The Fund will not borrow or invest in
foreign securities, and no more than 5% of the Fund's net
assets will be invested in companies that do not have three
years of continuous operations. The Fund may also invest in
exchange traded securities that track the value of an
underlying basket of securities such as the S&P 500 Index
or the S&P Mid-Cap Index.
In seeking to achieve its investment objective, the Manor
Fund ordinarily invests on a long-term basis.
Occasionally, securities may be sold within 12 months of
purchase if circumstances of a particular company,
industry, or the general market should change. The Fund
does not propose to purchase securities for short term
trading in the ordinary course of operations. Accordingly,
it is expected that the annual turnover rate will not
exceed 50%. There may be times when management deems it
advisable to substantially alter the composition of the
portfolio, in which event, the portfolio turnover rate
might substantially exceed 50%; this would only result from
special circumstances and not from the Fund's normal
operations.
The Growth Fund invests primarily in the common stock of large
to mid-sized corporations with an average market
capitalization of approximately $2 billion, or more. The
Growth Fund generally invests in companies that have strong
growth in earnings or revenues, the potential to maintain
above average growth, and a reasonable valuation relative
to the growth potential. The Growth Fund generally invests
in companies with a high level of free cash flow available
to finance growth or repurchase outstanding shares, and
products or services that provide a comparative advantage
over competitors. The portfolio manager uses growth and
earnings information from industry sources and applies his
own proprietary analysis to project future valuations. The
portfolio manager invests in companies that he believes
have the opportunity to more than double in value over five
years based on their current price relative to future cash
flows and the underlying value of the firm's assets.
Under normal market conditions, the Growth Fund should be
fully invested. To the extent that investments meeting a
Fund's criteria for investment are not available, or when
the Advisor considers a temporary defensive posture
advisable, the Fund may invest without limitation in high-
quality corporate debt obligations of U.S. companies, U.S.
government and agency obligations, or money market
instruments.
The Growth Fund generally holds individual investments for
three to five years. The Fund will not borrow or invest in
foreign securities, and no more than 5% of the Fund's net
assets will be invested in companies that do not have three
years of continuous operations. The Fund may also invest in
exchange traded securities that track the value of an
underlying basket of securities such as the S&P 500 Index
or the S&P Mid-Cap Index.
In seeking to achieve its investment objective, the Growth
Fund ordinarily invests on a long-term basis.
Occasionally, securities may be sold within 12 months of
purchase if circumstances of a particular company,
industry, or the general market should change. The Fund
does not propose to purchase securities for short term
trading in the ordinary course of operations. Accordingly,
it is expected that the annual turnover rate will not
exceed 50%. There may be times when management deems it
advisable to substantially alter the composition of the
portfolio, in which event, the portfolio turnover rate
might substantially exceed 50%; this would only result from
special circumstances and not from the Fund's normal
operations.
The Bond Fund invests primarily in income producing securities
issued by the U.S. Government or Agencies of the U.S.
Government, such as U.S. Treasury bills, notes and bonds,
or GNMA's, FNMA's and FHLB's. The Bond Fund generally
maintains an average maturity of three to seven years,
depending upon the interest rate and economic environment.
The Bond Fund generally maintains an overall credit rating
of A or better for portfolio securities, as measured by
Moodys or S&P. The Fund may also invest in short term
securities issued at a discount to face value such as U.S.
Treasury bills. Zero coupon securities with maturities
greater than one year will not generally comprise more than
10% of the portfolio.
The Bond Fund will generally hold investments to maturity;
however, positions may be liquidated to shift the interest
rate sensitivity of the portfolio in response to changing
market and economic conditions. The portfolio manager will
actively manage the average maturity of the portfolio by
reducing the maturity of portfolio securities in
anticipation of rising interest rate environments and
extending the maturity of portfolio securities in
anticipation of falling interest rate environments. The
Fund may also invest up to 35% of the portfolio in
corporate debt instruments if these investments provide
attractive return potential.
Related Risks
In addition to the risks associated with the investment strategy
for any particular fund an investor is subject to risk from
general market fluctuations, interest rate shifts, credit risk,
and the effect of inflation.
Market Risk
In the event of a general market decline the value of the funds
could decline even if the manager has moved to a defensive
position. The values of investments may change, and possibly
decrease, perhaps severely, in response to fluctuations in the
stock market generally.
Interest Rate Risk
If interest rates increase the value of portfolio investments
could decline as the market adjusts to the reduced demand for
stock and long term bond investments. The potential for
fluctuations in bond prices is primarily due to changes in
interest rates. Bonds with longer maturities have greater
interest rate risk than bonds of shorter maturities.
Credit Risk
Credit risk could impact the value of specific stock or bond
investments, or an entire industry sector, if investors become
concerned abut the ability of creditors to continue debt service
on an ongoing basis. Credit risk is the chance that the issuer
of a bond will default on its promise to pay interest and or
principal at maturity. Credit ratings are an attempt to assess
this risk. Generally, the lower a bond's credit rating the
higher the interest the bond must pay to attract investors and
compensate them for taking additional risk.
Inflation Risk
Inflation is the impact of rising prices over time, it has the
effect of reducing the future value of financial assets due to
decreased purchasing power. For an investor to be better off
their portfolio must increase in value faster than the rate of
inflation. Inflation, and investor's expectation of future
inflation, also effects the current value of portfolio
investments. If investors expect inflation to rise in the future
they will demand a higher return to compensate for the increase.
This will force the price of fixed income securities lower,
raising yields. The increase in yields will increase the
financing costs for companies, thereby reducing earnings. The
reduction in earnings could then lead to lower stock prices.
Year 2000
Some computer systems used today are unable to process date-
related information because they are not programmed to
distinguish between the year 2000 and the year 1900. The
portfolio manager takes into consideration the impact that this
problem could have on each investment in the fund. In addition,
the smooth operation of the Funds depends on the ability of the
Funds' custodian and the other service providers to the Funds to
provide services without interruption. The Adviser, like many
other businesses, is taking steps to ensure that the computer
systems on which the smooth operation of the Funds depends will
continue to function properly. The Adviser is working with the
service providers to the Funds, such as the custodian and various
broker-dealers through which portfolio securities of the Funds
are traded, to arrange for testing of internal and external
systems. Based on the information currently available, the
Adviser does not anticipate any material impact on the delivery
of services currently provided. There can be no guarantee,
however, that the steps taken by the Adviser in preparation for
the year 2000 will be sufficient to avoid any adverse impact on
the Funds.
Other Strategies
Under normal market conditions, each Fund should be fully
invested in the types of securities described above. Within the
limitations described in this prospectus, the percentages of Fund
assets invested will vary in accordance with the judgement of the
Advisor. To the extent that investments meeting a Fund's
criteria for investment are not available, or when the Advisor
considers a temporary defensive posture advisable, the Fund may
invest without limitation in high-quality corporate debt
obligations of U.S. companies, U.S. government and agency
obligations, or money market instruments.
In seeking to achieve its investment objective, each Fund
ordinarily invests on a long-term basis. Occasionally,
securities purchased on a long-term basis may be sold within 12
months of purchase if circumstances of a particular company,
industry, or the general market should change.
Portfolio Turnover Policy
The Fund does not propose to purchase securities for short term
trading in the ordinary course of operations. Accordingly, it is
expected that the annual turnover rate will not exceed 50%, as
computed by dividing the lesser of the Fund's total purchases or
sales of securities within the period by the average monthly
portfolio value of the Fund during such period. There may be
times when management deems it advisable to substantially alter
the composition of the portfolio, in which event, the portfolio
turnover rate might substantially exceed 50%; this would only
result from special circumstances and not from the Fund's normal
operations.
Policies
The By-Laws of the Fund provide the following fundamental
investment restrictions; the Fund may not, except by the approval
of a majority of the outstanding shares:
(a) Act as underwriter for securities of other issuers except
insofar as the Fund may be deemed an underwriter in disposing
of its own portfolio.
(b) Issue senior securities, borrow money, or purchase securities
on margin, but may obtain such short term credit as may be
necessary for clearance of purchases and sales of securities
for temporary or emergency purposes in an amount not exceeding
5% of the value of its total assets.
(c) Sell securities short.
(d) Invest in securities of other investment companies except as
part of a merger, consolidation, or purchase of assets approved
by the Fund's shareholders or by purchases with no more that
10% of the Fund's assets in the open market involving only
customary brokers commissions.
(e) Invest more that 25% of its assets at the time of purchase in
any one industry.
(f) Make investments in commodities, commodity contracts or real
estate although the Fund may purchase and sell securities of
companies which deal in real estate or interests therein.
(g) Make loans. The purchase of a portion of a readily
marketable issue of publicly distributed bonds, debentures or
other debt securities will not be considered the making of a
loan.
(h) Acquire more than 10% of the securities of any class of
another issuer, treating all preferred securities of an issuer
as a single class and all debt securities as a single class, or
acquire more than 10% of the voting securities of another
issuer.
(i) Invest in companies for the purpose of acquiring control.
(j) Purchase or retain securities of any issuer if the officers
and directors of the Fund or its Investment Adviser owning
individually more than 1/2 of 1% of any class of security,
collectively own more than 5% of such class of securities of
such issuer.
(k) Pledge, mortgage or hypothecate any of its assets.
(l) Invest in securities which may be subject to registration
under the Securities Act of 1933 prior to sale to the public or
which are not at the time of purchase readily salable.
(m) Invest more than 5% of the total Fund assets, taken at market
value at the time of purchase, in securities of companies with
less than three years' continuous operation, including the
operations of any predecessor.
MANAGEMENT OF THE FUND
Board of Directors
The Officers and Directors of the Fund have agreed to serve
without compensation, their addresses, principal occupations
during the past five years are:
DANIEL A. MORRIS
Mr. Morris is President of the Fund and President of
Morris Capital Advisors, Inc., investment adviser to
the Fund. Prior to founding Morris Capital Advisors,
Inc., he was Senior Vice President of Consistent Asset
Management Company, an investment adviser for separate
accounts and registered investment companies. Mr.
Morris resides at 304 Albermarle Grove, West Chester,
PA. As President of the Fund, he is considered an
Interested Director.
BRUCE LAVERTY
Mr. Laverty is a Partner of the law firm Laverty, Muth
& Miller, legal counsel to the Fund. Mr. Laverty
resides at 568 Spring Oaks Road, West Chester, PA. As
Legal Counsel to the Fund, he is considered an
Interested Director.
ALAN WEINTRAUB
Mr. Weintraub is a Senior Consultant with The Gartner
Group, Stanford, CT. Mr. Weintraub resides at 305
Albermarle Grove, West Chester, PA.
JAMES MCFADDEN
Mr. McFadden is Vice President of Marketing for MBNA
Corporation. Mr. McFadden resides at 461 Crescent
Drive, West Chester, PA.
FRED MYERS
Mr. Myers is founding Partner of the accounting firm of
Myers & Associates, CPA's. Mr. Myers resides at 302
Albermarle Grove, West Chester, PA.
RICHARD KUND, JR.
Mr. Kund is marketing manager of Professional
Detailing, Inc. Mr. Kund resides at 304 Hidden Creek
Drive, Hatboro, PA.
EDWARD ERLICHMAN
Mr. Erlichman is President of Kara Aerospace. Mr.
Erlichman resides at P.O. Box 513, Bedford, PA.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of December 31, 1998, Daniel A. Morris owned or
beneficially owned 19,729 shares of Common Stock, or 11.5% of the
then outstanding shares. The officers and directors of the Fund
owned or beneficially owned as a group, 31,863 shares of Common
Stock, or 18.6% of the then outstanding shares.
As of December 31, 1998, four shareholders, in addition to
Mr. Morris, owned or beneficially owned more than 5% of the then
outstanding shares of the Fund. Daniel K. Schafer owned 22,129,
or 12.9% of the Fund, Marvin Tavel owned 9,213 shares, or 5.4%,
Bradley J. Allen owned 9,143, or 5.3%, and William P. Becker
owned 9,142.5 shares, or 5.3%. Other than the foregoing, the
Fund was not aware of any person who, as of December 31, 1998,
owned or beneficially owned more than 5% of the shares of the
Fund.
INVESTMENT ADVISORY AND OTHER SERVICES
Morris Capital Advisors, Inc., 15 Chester Commons Street,
Malvern, PA, is a Pennsylvania corporation that acts as sole
Investment Adviser to the Fund. Mr. Daniel A. Morris is the sole
owner, director and officer of the Investment Adviser and is also
president of the Fund. Mr. Morris owns all outstanding shares of
Morris Capital Advisors, Inc. and he is the largest shareholder
of Manor Investment Funds. Mr. Morris has been a shareholder,
executive officer and portfolio manager for investment advisers
to mutual funds and other investors since 1981.
On September 18, 1995 the shareholders of the Fund approved
a management and advisory contract with Morris Capital Advisors,
Inc., to act as Investment Adviser of the Fund, which was
unanimously approved by the Board of Directors. This agreement
will continue on a year to year basis provided that approval is
voted at least annually by a majority of the directors of the
Fund who are neither parties to the agreement nor interested
persons as defined in the Investment Company Act of 1940.
Under the agreement, the Investment Adviser will direct the
purchase or sale of investment securities in accordance with the
stated objectives of the Fund, under the review of the Directors
of the Fund. The Agreement may be terminated at any time,
without the payment of any penalty, by the Board of Directors or
by vote of a majority of the outstanding voting securities of the
Fund on not more than 60 days' written notice to the Investment
Adviser. In the event of its assignment, the Agreement will
terminate automatically. For these services the Fund has agreed
to pay to Morris Capital Advisors, Incorporated a fee of 1% per
year on the net assets of the Funds (0.5% for the Bond Fund).
This rate is generally higher than that paid by most mutual
funds. All fees are computed on the average daily closing net
asset value of the Fund and are payable monthly. The Investment
Adviser will forego all or a portion of its fees in order to hold
the total expenses of the Fund to no more than 1.5% of averaged
assets (1.0% for the Bond Fund).
Pursuant to its contract with the Fund, the Investment
Adviser is required to render research, statistical, and advisory
services to the Fund; and to make specific recommendations based
on the Fund's investment requirements. Fees of the custodian,
registrar, and transfer agents shall be paid by the Fund. The
Fund pays all other expenses, including fees and expenses of
directors not affiliated with the Adviser, if any; legal and
accounting fees; interest, taxes, and brokerage commissions,
recordkeeping and the expense of operating its offices. The
Investment Adviser has paid the initial organizational costs of
the Fund and will reimburse the Fund for any and all losses
incurred because of rescinded purchases.
BROKERAGE ALLOCATION AND OTHER PRACTICES
The Fund requires all brokers to effect transactions in
portfolio securities in such a manner as to get prompt execution
of the orders at the most favorable price. Where consistent with
best price and execution and in light of its limited resources,
the Fund will deal with primary market makers in placing over-
the-counter portfolio orders.
The Fund places all orders for purchase and sale of its
portfolio securities through the Fund President who is answerable
to the Fund Board of Directors. He may select brokers who, in
addition to meeting the primary requirements of execution and
price, have furnished statistical or other factual information
and services, which, in the opinion of management, are helpful or
necessary to the Fund's normal operations. Those services may
include economic studies, industry studies, security analysis and
reports, sales literature and statistical services furnished
either directly to the Fund or to the Adviser. No effort is made
in any given circumstance to determine the value of these
materials or services or the amount by which they might have
reduced expenses of the Adviser.
Brokerage commissions for the year ended December 31, 1998
was $3,223. Other than set forth above, the Fund has no fixed
policy, formula, method or criteria which it uses in allocating
brokerage business to brokers furnishing materials and services.
The Board of Directors evaluates and reviews the reasonableness
of brokerage commissions paid semiannually.
CAPITAL STOCK AND OTHER SECURITIES
The authorized capitalization of the Funds is 10,000,000 shares
of common stock of $.001 par value per share. Each Fund share
has equal dividend, distribution and liquidation rights of that
Fund.
Voting Rights
Each holder of common stock has one vote for each share held.
Voting rights are non-cumulative, which means that the holders of
a majority of shares of common stock can elect all the directors
of the Fund if they so choose, and the holders of the remaining
shares will not be able to elect any person as a director.
Issues specific to a particular Fund are voted only by
shareholders of that Fund.
PURCHASE, REDEMPTION AND PRICING OF SHARES
Purchasing Shares
The offering price of shares is the net asset value per share
next determined after receipt of the purchase order by the Fund
and is computed in the manner described under the caption
"PRICING OF SHARES" in this prospectus. The Fund reserves the
right at its sole discretion to terminate the offering of its
shares made by this Prospectus at any time and to reject purchase
applications when, in the judgment of the management such
termination or rejection is in the best interests of the Fund.
The Fund will maintain an account for each shareholder.
Initial purchase of shares of the Fund must be made by
application to the Fund. To purchase shares mail a check payable
to Manor Investment Funds, Inc., complete the application form
included in this prospectus, and mail to Manor Investment Funds,
15 Chester Commons, Malvern, PA 19355. For additional
information contact the Fund at 610-722-0900. Subsequent
purchases may be made by mail or in person. The minimum is $100,
but less may be accepted under special circumstances.
Shareholders may also authorize the fund to automatically debit
their bank account to purchase shares by completing the necessary
information on their account application. Shareholders may also
purchase shares of any Fund by directing a transfer from another
Fund by telephone. Shares can also be purchased by automatic
payroll deduction, or by automatic deduction from an account that
you specify.
Dividends and Distributions
The Fund will automatically retain and reinvest dividends and
capital gain distributions and purchase additional shares for the
shareholder at net asset value as of the close of business on the
distribution date. A shareholder may at any time by letter or
forms supplied by the Fund direct the fund to pay dividend and/or
capital gains distributions, if any, to such shareholder in cash.
Redemptions
The Fund will redeem all or any portion of the total amount of
the shares of any shareholder upon written request for redemption
signed by the shareholder. Proper endorsements guaranteed either
by a national bank or a member firm of the New York Stock
Exchange may be required unless management knows the shareholder.
Shares are redeemed at the net asset value per share next
determined after notice is received by the Fund. The proceeds
received by the shareholder may be more or less than the cost of
such shares, depending upon the net asset value per share at the
time of redemption; the difference should be treated by the
shareholder as a capital gain or loss for federal income tax
purposes.
Payment by the Fund will ordinarily be made by check within seven
days after tender. The Fund may suspend the right of redemption
or postpone the date of payment if: The New York Stock Exchange
is closed for other than customary weekend or holiday closings,
or when trading on the New York Stock Exchange is restricted as
determined by the Securities and Exchange Commission or when the
Securities and Exchange Commission has determined that an
emergency exists, making disposal of fund securities or valuation
of net assets not reasonably practicable.
To redeem shares send your written request to Manor Investment
Funds, 15 Chester Commons, Malvern, PA 19355. For additional
information contact the Fund at 610-722-0900.
Pricing of Shares
The net asset value of the Fund's shares are determined as of the
close of trading on the New York Stock Exchange on each business
day the Exchange is open (presently 4:00 p.m.). The net asset
value is not calculated if the New York Stock Exchange is closed
for trading. The price is determined by dividing the value of
its securities, plus any cash and other assets less all
liabilities, by the number of shares outstanding. The market
value of securities listed on a national exchange is determined
to be the last recent sales price on such exchange. Listed
securities that have not recently traded and over-the-counter
securities are valued at the last bid price in such market.
Short term paper (debt obligations that mature in less than 60
days) are valued at amortized cost which approximates market
value. Other assets are valued at fair value as determined in
good faith by the Board of Directors.
TAXATION OF THE FUND
The Fund will endeavor to qualify annually for and elect tax
treatment applicable to a regulated investment company under
Subchapter M of the Internal Revenue Code (the "Code"). To
qualify as a "regulated investment company" under Subchapter M,
at least 90% of the Fund's income must be derived from dividends,
interest and gains form securities transactions, and no more than
50% of the Fund's assets may be in security holdings of any
issuer that exceed 5% of the total assets of the Fund at the time
of purchase.
Distribution of any net long-term capital gains realized by
the fund will be taxable to the shareholder as long-term capital
gains, regardless of the length of time Fund shares have been
held by the investor. All income realized by the Fund including
short-term capital gains, will be taxable to the shareholder as
ordinary income. Dividends from net income will be made annually
or more frequently at the discretion of the Fund's Board of
Directors. Dividends received shortly after purchase of shares
by an investor will have the effect of reducing the per share net
asset value of his shares by the amount of such dividends or
distributions and, although in effect a return of capital, are
subject to federal income taxes.
The Fund is required by Federal law to withhold 31% of
reportable payments (which may include dividends, capital gains,
distributions and redemptions) paid to shareholders who have not
complied with IRS regulations. In order to avoid this
withholding requirement, you must certify on the application form
supplied by the Fund that your Social Security or Taxpayer
Identification Number provided is correct and that you are not
currently subject to back-up withholding, or that you are exempt
from back-up withholding.
UNDERWRITERS
The Fund acts as its own underwriter.
CALCULATION OF PERFORMANCE DATA
Any total rate of return quotation for the Fund will be for
a period of three or more months and will assume the reinvestment
of all dividends and capital gains distributions which were made
by the Fund during that period. Any period total rate of return
quotation of the fund will be calculated by dividing the net
change in value of a hypothetical shareholder account established
by an initial payment of $1,000 at the beginning of the period by
1,000. The net change in the value of a shareholder account is
determined by subtracting $1,000 from the product obtained by
multiplying the net asset value per share at the end of the
period by the sum obtained by adding (A) the number of shares
purchased at the beginning of the period plus (B) the number of
shares purchased during the period with reinvested dividends and
distributions. Any average annual compounded total rate of
return quotation of the Fund will be calculated by dividing the
redeemable value at the end of the period (i.e., the product
referred to in the preceding sentence) by $1,000. A root equal
to the period, measured in years, in question is then determined
and 1 is subtracted from such root to determine the average
annual compounded total rate of return.
The foregoing computation may also be expressed by the
following formula:
P(1+T)^n = ERV
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the stated periods
at the end of the stated periods.
MANOR INVESTMENT FUNDS, INC.
MALVERN, PENNSYLVANIA
Financial Statements
for the Year Ended
December 31, 1998
and
Independent Auditor's Report
Independent Auditor's Report
To the Shareholders and
Board of Directors
Manor Investment Funds, Inc.
I have audited the accompanying statement of assets and
liabilities of Manor Investment Funds, Inc. (the Fund), including
the schedule of investments, as of December 31, 1998, and the
related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in
the period then ended, and selected per share data, total
investment return, ratios and turnover for the years ended
December 31, 1998, 1997 and 1996 and for the period ended
December 31, 1995. These financial statements, schedules, and per
share data, total investment return, ratios and turnover
(hereafter referred to collectively as "financial statements")
are the responsibility of the Fund's management. My
responsibility is to express an opinion on these financial
statements based on my audits.
I conducted my audits in accordance with generally accepted
auditing standards. Those standards require that I plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. My
procedures included confirmation of securities owned as of
December 31, 1998, by correspondence with the custodian. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. I believe that my
audits provide a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Manor
Investment Funds, Inc. as of December 31, 1998, the results of
its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and
the selected per share data, total investment return, ratios and
turnover for the years ended December 31, 1998, 1997 and 1996,
and the period ended December 31, 1995, in conformity with
generally accepted accounting principles.
Claude B. Granese, CPA
Spring House, Pennsylvania
January 15, 1999
MANOR INVESTMENT FUNDS, INC.
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1998
ASSETS
Investments in securities, at fair value
(identified cost $2,122,420) (Notes 2 and 5) $ 2,478,569
Cash 295,792
Interest receivable 429
------------
Total Assets 2,774,790
LIABILITIES
Payable for investment securities purchased 115,767
Accrued expenses 6,697
-----------
Total Liabilities 122,464
NET ASSETS
Net assets (equivalent to $15.46 per share
based on 171,522 shares of capital stock
outstanding) (Note 4) $ 2,652,326
The accompanying notes are an integral part
of the financial statements.
MANOR INVESTMENT FUNDS, INC.
SCHEDULE OF INVESTMENTS
December 31, 1998
Market
COMMON STOCK (Shares) 89.0 % Cost Value
Automobile
1,190 General Motors 3.4% $ 68,660 $ 85,159
1,040 Goodyear Tire 2.1% 63,853 52,455
-------- ------------- ------------
5.5% 132,513 137,614
Basic Materials
2,050 DuPont 4.4% 123,938 108,778
-------- ------------- ------------
Computer
1,335 Cisco Systems 5.0% 82,257 123,905
980 Hewlett-Packard 2.7% 55,083 66,946
830 Intel 4.0% 65,932 98,407
990 IBM 7.4% 96,750 182,531
-------- ------------- ------------
19.1% 300,022 471,789
-------- ------------- ------------
Construction
4,210 Masco 4.9% 96,704 121,037
-------- ------------- ------------
Consumer Staples
1,870 Gillette 3.6% 91,570 89,409
2,560 PepsiCo 4.2% 99,405 104,640
-------- ------------- ------------
7.8% 190,975 194,049
-------- ------------- ------------
Finance
2,720 Allstate Insurance 4.2% 103,852 104,720
1,150 Citigroup 2.3% 66,084 57,141
1,280 Mellon Bank 3.6% 94,822 88,000
-------- ------------- ------------
10.1% 264,758 249,861
-------- ------------- ------------
Schedule continued on next page.
MANOR INVESTMENT FUNDS, INC.
SCHEDULE OF INVESTMENTS (continued)
December 31, 1998
Market
COMMON STOCK (Shares) Cost Value
Medical
680 Merck 4.0% $ 78,634 $ 100,300
990 Pfizer 5.0% 77,962 123,750
-------- ------------- ------------
9.0% 156,596 224,050
-------- ------------- ------------
Multi-Industry
2,610 Allied Signal 4.7% 103,267 115,656
1,750 General Electric 7.2% 119,294 178,500
-------- ------------- ------------
11.9% 222,561 294,156
-------- ------------- ------------
Oil
1,770 Ashland Oil 3.5% 84,193 85,624
900 Chevron 3.0% 67,755 74,644
-------- ------------- ------------
6.5% 151,948 160,268
-------- ------------- ------------
Retail
1,740 McDonalds 5.4% 94,687 133,654
1,060 Sears 1.8% 59,289 45,050
-------- ------------- ------------
7.2% 153,976 178,704
-------- ------------- ------------
Transportation
1,260 Delta Airlines 2.6% 61,368 65,520
-------- ------------- ------------
TOTAL COMMON STOCK 89.0% 1,855,359 2,205,826
PREFERRED STOCK (Shares) 3.9%
1,660 Kmart Pref. Class T 95,689 96,176
------------- ------------
INDEXED SECURITIES (Shares) 3.1%
630 S&P 500 Dep. Receipts 72,437 77,687
------------- ------------
SHORT-TERM NOTES 4.0%
($100,000 Par)
U.S. T Bill,4.52%, 3/25/99 98,935 98,880
------------- ------------
TOTAL INVESTMENTS IN SECURITIES $2,122,420 $2,478,569
============= ============
The accompanying notes are an integral part of the
Financial statements.
MANOR INVESTMENT FUNDS, INC.
STATEMENT OF OPERATIONS
Year Ended December 31, 1998
Investment Income
Dividends $ 28,901
Interest 7,637
---------
Total investment income $ 36,538
Expenses
Advisory and management fee (Note 6) 22,267
Custodian fee (Note 7) 2,434
Professional fees 9,188
Other 3,286
----------
Total expenses 37,175
Fees waived (Note 6) (5,375)
----------
Net expenses 31,800
----------
Net Investment Income 4,738
Realized and Unrealized Gain
on Investments (Note 5)
Net realized gain on investments 26,880
Change in unrealized appreciation
of investments for the year 198,891
----------
Net gain on investments 225,771
---------
Net Increase in Net Assets Resulting
from Operations $230,509
=========
The accompanying notes are an integral part of the
financial statements.
MANOR INVESTMENT FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
Years Ended December 31, 1998 and 1997
1998 1997
Increase in Net Assets from Operations
Investment income-net $ 4,738 $ 4,196
Net realized gain on investments 26,880 17,520
Change in unrealized appreciation 198,891 138,193
--------- ---------
Net increase in net assets
resulting from operations 230,509 159,909
Distributions to Shareholders from
Investment income-net (4,738) (3,942)
Net realized gain on investments (26,880) (17,520)
Capital Share Transactions (Note 4) 954,033 966,285
--------- --------
Total Increase 1,152,924 1,104,732
Net Assets
Beginning of year 1,499,402 394,670
--------- ---------
End of year $2,652,326 $1,499,402
=========== ==========
The accompanying notes are an integral part of the
financial statements.
MANOR INVESTMENT FUNDS, INC.
FINANCIAL HIGHLIGHTS
Years Ended December 31, 1998, 1997 and 1996
Period Ended December 31, 1995
PER SHARE DATA (1) 1998 1997 1996 1995
Investment income $ 0.26 $ 0.25 $ 0.22 $ 0.07
Expenses 0.23 0.19 0.15 0.04
-------- -------- -------- -------
Investment income-net 0.03 0.06 0.07 0.03
Distribution of net
Investment income (0.03) (0.06) (0.07) (0.03)
Net realized and unrealized
gain (loss) on investments 1.69 2.64 1.16 (0.03)
Initial capitalization of Fund - - - 10.00
-------- -------- -------- -------
Net increase in net asset value 1.69 2.64 1.16 9.97
Net asset value
Beginning of period 13.77 11.13 9.97 -
-------- -------- -------- -------
End of period $ 15.46 $ 13.77 $ 11.13 $ 9.97
======== ======= ======= ======
(1)Selected data based on weighted average shares outstanding.
TOTAL INVESTMENT RETURN 13.65% 25.52% 11.98% -0.30%
======== ======= ======= ======
RATIOS (to Average Net Assets)
(2)
Investment income-net 0.22% 0.50% 0.67% 0.34%
======== ======= ======= ======
Expenses 1.50% 1.42% 1.50% 0.38%
======== ======= ======= ======
(2) 1.24 % and 1.50 %, respectively when annualized.
TURNOVER 23% 27% 15% 0%
======== ======= ======= ======
The accompanying notes are an integral part of the
financial statements.
MANOR INVESTMENT FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
Note 1-Organization
Manor Investment Funds, Inc. (the Fund) was incorporated in
Pennsylvania on September 13, 1995. The Fund was in the initial
stages of development until January 27, 1996 when it began to
sell shares of its stock to the public. It is an open-end, non-
diversified management investment company that is registered
under the Investment Company Act of 1940.
The Fund's primary investment objective is capital appreciation.
It invests primarily in common stock of large U. S. corporations.
Note 2-Significant Accounting Policies
The following significant accounting policies are in conformity
with generally accepted accounting principles for investment
companies:
Security Valuation-Investments in securities traded on a national
securities exchange (or reported on the NASDAQ national market)
are stated at the last reported sales price on the day of
valuation. U. S. Treasury Bills are stated at market value, which
approximates cost plus accretion.
Cash-Cash consists of checking and money market accounts with the
custodian. As financial instruments, such accounts potentially
subject the Fund to concentration of credit risk. The carrying
value of these accounts approximates market value due to their
short-term nature.
Federal Income Taxes-The Fund's policy is to continue to comply
with the requirements of the Internal Revenue Code that are
applicable to regulated investment companies and distribute all
of its taxable income to its shareholders. Therefore, no federal
income tax provision is required.
Distributions-Distributions to shareholders, which are determined
in accordance with income tax regulations, are recorded on the
ex-dividend date.
Development Stage-During its development stage there was
virtually no change in net assets from net investment income and
unrealized securities losses.
Other-The Fund follows industry practice and records security
transactions on the trade date. Dividend income is recognized on
the ex-dividend date, and interest income is recognized on the
accrual basis. Discounts on short-term U. S. government
obligations are accreted over the life of the obligation.
MANOR INVESTMENT FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1998
Accounting Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual results could differ
from those estimates.
Note 3-Distributions to Shareholders
On December 28, 1998, a distribution of $.19 per share,
aggregating $31,618, was declared from net investment income and
realized gains. The dividend was paid on December 28, 1998 to
shareholders of record on December 24, 1998.
On December 29, 1997, a distribution of $.20 per share,
aggregating $21,462 was declared from net investment income and
realized gains. The dividend was paid on December 29, 1997 to
shareholders of record on December 27, 1997.
Note 4-Capital Share Transactions
At December 31, 1998, there were 10,000,000 shares of $.001 par
value capital stock authorized and paid-in capital totaled
$2,296,177. Daniel A. Morris (see note 6), President of the Fund,
and his wife own 19,729 shares of the Fund's outstanding stock
with a value of $305,017.
Note 4-Capital Share Transactions (Continued)
Transactions in capital stock were as follows:
Shares Amount
1998 1997 1998 1997
Shares sold 96,232 90,932 $1,468,246 $1,203,905
Shares issued in reinvestment 2,044 1,586 31,618 21,462
of dividends
------ ------- -------- --------
98,276 92,518 1,499,864 1,225,367
Shares redeemed 35,680 19,058 545,831 259,082
------ ------- -------- --------
Net increase 62,596 73,460 $ 954,033 $ 966,285
MANOR INVESTMENT FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1998
Note 5-Investment Transactions
Purchases of investment securities (excluding short-term U.S.
government obligations) aggregated $1,310,051 in 1998; sales
aggregated $491,214. Net gain on investments for the year ended
December 31, 1998 was $225,771. That amount represents the net
increase in value of investments held during the year. Net
unrealized gains of $356,149 on securities are the same for
financial reporting and tax reporting.
Note 6-Investment Advisory Fee
The Fund has an investment management and advisory services
agreement (the Agreement) with Morris Capital Advisors, Inc.
(Morris). Morris' sole shareholder, officer and director is
Daniel A. Morris.
Monthly, the Fund is required to pay Morris a fee (aggregating
$22,267 in 1998) equivalent to one percent per annum of the daily
average net assets of the Fund. The Fund bears expenses necessary
and incidental to the conduct of its business. However, Morris
has absorbed a portion of expenses ($5,375 in 1998) to maintain
total Fund expenses at no more than 1.5% annually of average
assets.
The Agreement must be approved annually by a majority vote of the
Fund's non-interested Board of Directors.
Note 7-Custody Agreement
Under an agreement, The First National Bank of West Chester (FNB)
acts as the Fund's custodian. FNB's fees are charged in
accordance with its standard rates for such services, payable
monthly. Such fees were $2,434 for the year ended December 31,
1998.
To the Shareholders and
Board of Directors
Manor Investment Funds, Inc.
In planning and performing my audit of the financial statements
and selected per share data, ratios and turnover (hereafter
referred to collectively as the "financial statements") of Manor
Investment Funds, Inc. (the Fund), for the year ended December
31, 1998, I considered its internal control, including control
activities for safeguarding securities. I did so to determine my
auditing procedures for the purpose of expressing my opinion on
the financial statements, and to comply with the requirements of
Form N-SAR, not to provide assurance on internal control.
The management of the Fund is responsible for establishing and
maintaining internal control. In fulfilling this responsibility,
estimates and judgments by management are required to assess the
expected benefits and related costs of controls. Generally,
controls that are relevant to an audit pertain to the entity's
objective of preparing financial statements for external purposes
that are fairly presented in conformity with generally accepted
accounting principles. Those controls include the safeguarding of
assets against unauthorized acquisition, use, or disposition.
Because of inherent limitations in internal control, error or
fraud may occur and not be detected. Also, projection of any
evaluation of internal control to future periods is subject to
the risk that it may become inadequate because of changes in
conditions or that the effectiveness of the design and operation
may deteriorate.
My consideration of internal control would not necessarily
disclose all matters in internal control that might be material
weaknesses, under standards established by the American Institute
of Certified Public Accountants. A material weakness is a
condition in which the design or operation of the specific
internal control components does not reduce to a relatively low
level the risk that misstatements caused by error or fraud in
amounts that would be material in relation to the financial
statements being audited may occur and not be detected within a
timely period by employees in the normal course of performing
their assigned functions. However, I noted no matters involving
internal control and its operation, including controls for
safeguarding securities that I consider to be a material weakness
as defined above as of December 31, 1998.
This report is intended solely for the information and use of
management and the Securities and Exchange Commission.
Mr. Claude B. Granese, CPA
January 15, 1999
FORM N-1A
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
a. Financial Statements - Financial highlights are included
in Part A and all other financial statements are presented
in Part B.
Manor Investment Funds, Inc.
Statement of Net Assets as of December 31, 1998
Statement of Operations for the Year Ended December 31, 1998
Statement of Changes in Net Assets for the Years Ended
December 31, 1997 and 1998
Financial Highlights for the Years Ended December 31,
1995, 1996, 1997 and 1998
Notes to Financial Statements
b. Exhibits
(a) Registrant's Articles of Incorporation, Exhibit 1 to
Registrant's Registration Statement of Form N-1A is
incorporated by reference pursuant to Rule 411 under the
Securities Act of 1933.
(b) Registrant's By-Laws; Exhibit 2 to Registrant's
Registration Statement of Form N-1A is incorporated by
reference pursuant to Rule 411 under the Securities Act
of 1933.
(c) Voting Trust Agreement (None)
(d) Stock Certificate; Exhibit 4 to Registrant's
Registration Statement of Form N-1A is incorporated by
reference pursuant to Rule 411 under the Securities Act
of 1933.
(e) Investment Advisory Contract; Exhibit 5 to
Registrant's Registration Statement of Form N-1A is
incorporated by reference pursuant to Rule 411 under the
Securities Act of 1933.
(f) Underwriting Agreements (None)
(g) Reimbursement Agreements with Officers and/or
Directors; Exhibit 7 to Registrant's Registration
Statement of Form N-1A is incorporated by reference
pursuant to Rule 411 under the Securities Act of 1933.
(h) Custodian Agreement; with First National Bank of West
Chester; Exhibit 8 to Registrant's Registration Statement
of Form N-1A is incorporated by reference pursuant to
Rule 411 under the Securities Act of 1933.
(i) Other Contracts (None)
(j) Opinion of Counsel Concerning Fund Securities
(k) Consent of Claude B. Granese, CPA
(l) Other Financial Statements (None)
(m) Powers of Attorney (None)
(n) Initial Capital Arrangement Agreements (None)
(o) Code of Ethics; Exhibit 15 to Registrant's Registration
Statement of Form N-1A is incorporated by reference
pursuant to Rule 411 under the Securities Act of 1933.
2. Control Persons
Mr. Daniel A. Morris is the sole owner, director and officer
of the Investment Adviser and is also president of the
Fund. As of December 31, 1998 Mr. Morris and his wife
Anne own 11.5% of the outstanding shares of the Fund.
3. Number of Shareholders
There were 114 shareholders of the Manor Investment Funds as
of December 31, 1998.
4. Indemnification
The registrant has been advised that, in the opinion of the
Securities and Exchange Commission, indemnification for
liability arising under the Securities Act of 1933 for
directors, officers and controlling persons of the
registrant is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses
paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or
controlling person in connection with the securities
being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such
issue.
5. Activities of Investment Adviser
The activity of Morris Capital Advisors, Inc., at the
present time is performance of the Investment Advisory
Contract with the Manor Investment Funds and for
individual and corporate clients on an individual
account basis.
6. Principal Underwriter
The Fund acts as its own underwriter.
7. Location of Accounts & Records
All Fund records are held in corporate headquarters, 15
Chester Commons, Malvern, PA 19355.
8. Management Services
Not Applicable.
9. Distribution Expenses
The Fund currently bears no distribution expenses.
10. Undertakings
None.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signature Title Date
Daniel A. Morris President, Chief Executive 4/30/99
Officer and Director
Bruce Laverty Secretary 4/30/99
James McFadden Director 4/30/99
Edward Erlichman Director 4/30/99
Richard A. Kund, Jr. Director 4/30/99
Fred Myers Director 4/30/99
Alan Weintraub Director 4/30/99
CONSENT OF CERTIFIED PUBLIC ACCOUNTANT
I consent to the inclusion of my report, dated January 15,
1999 on my audit of the financial statements of Manor
Investment Funds, Inc. (the Fund), in the registration
statement Form N-1A, Amendment Number 7 of the Fund. I
also consent to the reference of my firm in such
registration statement.
Claude B. Granese, CPA
Spring House, Pennsylvania
January 15, 1999
April 30, 1999
Manor Investment Funds, Inc.
15 Chester Commons
Malvern, PA 19355
Gentlemen:
We have been asked to provide this opinion in connection with the
registration under the Securities Act of 1933 ("Securities Act") of 10,000,000
shares of the common capital stock (par value 0.001 per share) of Manor
Invesment Funds, Inc. ("Fund").
We have examined the Articles of Incorporation of the Fund; the
By-Laws of the Fund; various pertinent corporate proceedings; and such other
items considered to be material to determine the legality of the sale of the
authorized but unissued shares of the Fund's common capital stock. With
respect to the good standings of the Fund, we are advised that the Fund is in
good standing with the Commonwealth of Pennsylvania, its state of
incorporation, and that all taxes due have been paid.
Based upon the foregoing, it is our opinion that upon effectiveness of
the Initial Registration Securities Act Registration Statement of the Fund as
amended and filed pursuant to the provisions of Section 24(c) of the
Investment Company Act of 1940 and during such time as such Registration
Statement is in effect, the Fund will be autherized to solicit and cause to
be solicited share purchase orders and to issue its shares for a cash
consideration, as described in the Fund's currently effective Prospectus and
Statements of Additional Informantion, which shares so issued will be validly
issued, fully paid and non-assessable shares.
We offer no opinion with respect to the offer and sale of the Fund's
securities under the securities laws of several states, the District of
Columbia, any territory of the United States or of any foreign country.
We consent to the inclusion of this opinion as a exhibit to the
Securities Act Registration Statement of the Fund as amended and to the
reference in the Fund's Prospectus and/or Statement of Additional Information
to the Fact that this opinion concerning the legality of the issue on behalf
of the Fund, as issurer, has been rendered by us.
Bruce W. Laverty, Esquire
