Manor Investment Funds, Inc.
15 Chester Commons
Malvern, PA 19355
June 30, 2000
Dear Fellow Shareholders:
I am pleased to report that shareholder assets invested
in Manor Investment Funds, Inc. have grown to over $5.5
million, a 20% increase since year-end. The increase in
assets was driven by shareholder investment in our funds and
investment performance. I thank each and every one of you
for contributing to our success.
This report provides a listing of fund assets for each
portfolio, financial statements for each fund since year-
end, top holdings, industry sectors, a chart of performance
and a performance table for each fund.
Late Inning Rally
The stock market improved in the closing weeks of the
quarter, trimming earlier losses and positioning itself for
a future rally. Like slumping hitters facing a weak
bullpen, the comeback started slowly. It doesn't take much
to score runs with a couple of walks and timely base hits.
With some smart base running the comeback can turn into a
full-fledged rally.
The stock market was way behind after suffering sharp
declines during March. Problems continued in the second
quarter, as the market could not string together enough good
news to get a rally going, despite several attempts. Every
rebound seemed to be thwarted by bad news from individual
companies or investor jitters. After swinging back and
forth from a high of 11,400 to a low of 10,200 the Dow
managed to close above 10,450 by the end of the quarter.
Whenever the market needed a big hit, somebody threw a
curveball. First it was the Fed, raising interest rates and
slowing the economy. At the same time gasoline prices
spiked to new highs, spreading the fear of inflation. Then
Judge Jackson proposed harsh penalties in the Microsoft
antitrust litigation while regulators raised opposition to
several large merger proposals. It is not surprising that
investors were hesitant to swing for the fences.
But all things considered, the stock market didn't
strike out completely. The gut wrenching volatility typical
of previous declines was absent this time. Within the
decline, stocks seemed to show strength by not making
substantial new lows. In the end, the small rebound at
quarter-end could be the beginning of a second half rally,
if corporate profits do not deteriorate, and if economic
growth and inflation pressures moderate, allowing the Fed to
end the string of interest rate hikes.
The Manor Fund
The Manor Fund is positive for the year-to-date, and
continues to outperform the S&P 500, despite losing some
ground in this difficult quarter. The Fund was helped by
strong performance from Pfizer, Mellon Bank, and Merck.
Pfizer and Merck performed well because of their strong
product portfolios, and the fact that drug stocks are viewed
as defensive investments in difficult markets. Mellon
performed well in an environment that was unfavorable for
financial stocks. These stocks do not do well when interest
rates are rising because their cost of borrowing increases.
Mellon also has substantial investment management and mutual
fund divisions, which struggle when the financial markets
decline. It is interesting that Mellon and several of the
other financial holdings in the fund portfolios did well;
indicating that the string of interest rate hikes by the Fed
may be nearing an end.
The Manor Fund portfolio was hurt by poor performance
by Cisco Systems, Honeywell, and General Motors. Cisco
declined after a strong run up over the past two quarters.
Honeywell seems to be having trouble digesting its merger
with Allied Signal, and the stock price was hurt when they
pre-announced an earnings shortfall recently. General
Motors is an economically sensitive company whose stock
suffers when the Fed raises interest rates to slow the
economy.
The Growth Fund
The Growth Fund is also positive for the year-to-date,
and continues to outperform the S&P 500, despite losing some
ground in this difficult quarter. This portfolio now has a
full year of performance and continues to outperform its
peer group of mutual funds, the S&P 500 and the S&P Mid-Cap
index, since inception. The Fund was helped by strong
performance from Ivax, Global Marine, and T. Rowe Price.
Ivax rallied on strong earnings growth, a result of new
products in the market place. Global Marine rebounded when
higher oil prices provided an incentive for additional
oilfield exploration which was deferred last year when oil
prices were at their lows. T. Rowe Price, a distributor of
mutual funds, rallied despite the difficult market as
investors recognized the benefits of their consistent cash
flow.
Global Crossing, Microsoft, and Sensormatic Electronics
hurt the Growth Fund portfolio. Global Crossing declined
when investors became concerned by increased competition in
the long distance voice and data communications market.
Microsoft declined after an unfavorable ruling in the
ongoing antitrust case. Sensormatic declined as part of the
general decline in technology stocks.
The Bond Fund
The Bond Fund rose 1.39% during the quarter, in line
with other mutual funds in the Lipper US Government Fund
Index. The Fund's portfolio of US Treasury Notes continues
to be somewhat conservative with an average yield of 5.84%
and average maturity of 3.4 years. I expect to extend the
average maturity of the portfolio now that the Fed rate
hikes have pushed yields to more attractive levels.
Bonus Ball
The recent market activity has some positive benefits.
Stock valuations are more reasonable relative to earnings.
The Fed has started to see the impact of its series of rate
hikes, and seems to be evaluating carefully as to the need
for another. Oil prices stopped their rise, reducing
inflationary pressures, while at the same time contributing
to the slowdown in economic growth. If we get some decent
earnings reports during the month of July the market could
rally back with some nice gains, and position itself to win
the game with better returns through the latter portion of
the year.
Sincerely,
Daniel A. Morris
Manor Fund Portfolio of Investments June 30, 2000
Shares Market
COMMON AND PREFERRED STOCK 96.3 % Value
Consumer Staples 4.6 %
Pepsico 1,560 $69,323
Tribune Co. 1,710 59,850
129,173
Retail 5.2 %
McDonalds 3,030 99,801
RadioShack Corp 1,000 47,375
147,176
Medical 9.4 %
Merck 1,600 122,600
Pfizer 2,970 142,560
265,160
Automobile 3.5 %
General Motors 1,690 98,126
98,126
Basic Materials 3.2%
Dupont 2,050 89,687
89,687
Industrial Products 3.8 %
Tyco Intl Ltd. 2,240 106,120
106,120
Construction 2.7%
Masco 4,210 76,043
76,043
Multi-Industry 11.9 %
General Electric 4,650 246,450
Honeywell Corporation 2,610 87,924
334,374
Computer 36.6 %
America Online 1,660 87,565
Cisco Systems 4,940 313,999
Hewlett- Packard 980 122,377
Intel 2,160 288,765
Intl. Bus. Machines 1,980 216,934
1,029,640
Oils 1.8 %
Chevron 600 50,888
50,888
Finance 11.3 %
Allstate Insurance 2,720 60,520
Citigroup 2,100 126,525
Mellon Bank 3,560 129,717
316,762
Transportation 2.3 %
Delta Airlines 1,260 63,709
63,709
________
$2,706,858
Cash and Cash Equivalents 3.7 %
FNB CC Demand Deposit 20
FNB CC Investor Choice 102,802
102,822
__________
Total Portfolio 100 % $2,809,680
Manor Fund
Top Five Holdings June 30, 2000
Company Industry % of Net Assets
Cisco Systems Computer 11.2 %
Intel Computer 10.3 %
General Multi-Industry 8.8 %
IBM Computer 7.7 %
Pfizer Medical 5.1 %
Top Five Industries June 30, 2000
Industry % of Net Assets
Computer 36.6 %
Multi-Industry 11.9 %
Finance 11.3 %
Medical 9.4 %
Retail 5.2 %
Total Total Total
Return Return Return
3 Months 6 Months Since Inception
Manor Fund -5.04 % 0.47 % 13.32 %
Lipper Large-Cap Core -2.88 % 1.26 % 16.47 %
S&P 500Index -2.65 % -0.41 % 24.14 %
Growth Fund Portfolio of Investments June 30,2000
Shares Market
Value
COMMON AND PREFERRED STOCK 87.8%
Consumer Staples 1.0 %
Jones New York 780 $18,330
18,330
Consumer Discretionary 0.8 %
Cablevision 220 14,932
14,932
Retail 1.4 %
Bergen Brunswig 1,900 10,450
Charming Shoppes 2,730 13,906
Homeseekers.com 770 2,334
26,690
Medical 12.0 %
Biogen 980 63,210
Ivax Corp 3,985 165,378
228,588
Automobile 0.8 %
Lear Corp 740 14,800
14,800
Industrial Products 3.3 %
Sensormatic Electronics 3,940 62,301
62,301
Computer 36.8 %
BMC Softwar 1,500 54,726
Cisco Systems 620 39,409
Dell Computer 1,570 77,420
Intel 990 132,351
Microsoft Corp. 960 76,800
Oracle 860 72,294
Sun Microsystems 1,220 110,944
Xilinx 1,600 132,100
696,044
Oils 4.4 %
Global Marine 2,500 70,469
Ultramar Dia. Shamrock 550 13,647
84,116
Finance 3.9 %
Bear Stearns 950 39,544
T. Rowe Price 790 33,575
73,119
Utilities 8.6 %
CTC Communications 1,860 66,960
Global Crossing Ltd 1,890 49,731
Worldcom, Inc 1,040 47,710
164,401
Transportation 1.0 %
Tidewater 500 18,000
18,000
Other 8.5 %
Mid Cap SPDR Trust 640 56,800
Nasdaq 100 Dep. Trust 520 48,457
S&P 500 SPYDER 380 55,207
160,464
__________
1,561,785
Cash and Cash Equivalents 12.2 %
FNB CC InvestorChoice 231,578
Tsy Note 5.750% Due 11-15-00 100,000 99,781
Accrued Interest 719
332,078
_________
Total Portfolio 100 % $ 1,893,863
Growth Fund
Top Five Holdings June 30, 2000
Company Industry % of Net Assets
Ivax Medical 8.7 %
Intel Computer 7.0 %
Xilinx Computer 7.0 %
Sun Microsystems Computer 5.9 %
Microsoft Computer 4.1 %
Top Five Industries June 30, 2000
Industry % of Net Assets
Computer 36.8%
Medical 12.0 %
Utilities 8.6 %
Oils 4.4 %
Finance 3.9 %
Total Total Total
Return Return Return
3 Months 6 Months Since
Inception
Growth Fund -5.62 % 4.52 % 22.50 %
Lipper Multi-Cap Growth -6.83 % 6.55 % 21.03 %
S&P Mid Cap Index -3.30 % 8.97 % 16.97 %
Bond Fund Portfolio of Investments June 30, 2000
Shares Market Value
Government Bonds 82.6%
US Treasury Notes
5.750 % Due 11/15/2000 100,000 $99,781
5.250 % Due 5/31/2001 130,000 128,619
5.500 % Due 7/31/2001 100,000 99,000
5.250 % Due 5/15/2004 30,000 29,681
5.875 % Due 11/15/2005 100,000 98,250
5.500 % Due 5/15/2009 100,000 95,688
6.000 % Due 8/15/2009 100,000 99,250
Accrued Interest 7,420
_________
Total Bonds $657,689
Cash and Cash Equivalents 17.4 %
FNB WC Investor Choice 138,332
_________
Total Portfolio 100 %
$ 796,021
Bond Fund Top Holdings June 30, 2000
Security % of Net
Assets
US Treasury Note 5.25% due 5/01 16.2 %
US Treasury Note 5.75% due 11/00 12.6 %
US Treasury Note 6% due 8/09 12.5 %
US Treasury Note 5.5% due 7/01 12.4 %
US Treasury Note 5.875% due 11/05 12.3 %
Total Total Total
Return Return Return
Since
3 Months 6 Months Inception
Bond Fund 1.39 % 3.33 % 3.57 %
Lipper
US Government 1.43 % 3.95 % 4.28 %
Lehman Intermediate
Government 1.80 % 3.54 % 4.61 %
Manor Investment Funds, Inc.
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000
Manor Fund Growth Fund Bond Fund
ASSETS
Investments in
Securities, at
fair value $2,706,858 $1,662,2885 $657,68
Cash 102,822 231,578 138,332
Dividends & Interest
Receivable 184 922 553
Total Assets 2,809,864 1,894,785 796,574
LIABILITIES
Accrued expenses (2,321) (4,674) (80)
________ _________ ________
Total Liabilities (2,321) (4,674) (80)
________ _________ ________
NET ASSETS
Net assets $2,812,185 $1,899,459 $796,654
Manor Investment Funds, Inc.
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000
Manor Growth Bond
Fund Fund Fund
Investment Income
Dividends $ 16,279 $ 2,413 -
Interest 1,110 4,620 13,078
Accrued Income 87 809 326
Total Investment
Income $ 17,476 $ 7,842 $ 13,404
Expenses
Advisory &
Management Fee $ 14,542 $ 7,108 $ 1,409
Custodian Fee 579 1,251 480
Professional Fee 11,351 8,609 1,816
Accrued Expense
Change (4,871) (5,012) (564)
Total Expenses 21,601 11,956 3,141
________ _________ ________
Net Investment Income
Realized & Unrealized
Gain/(Loss) on
Investments (4,125) (4,114) 10,263
Net Realized Gain/
(Loss)on Investments (44,089) (22,242) -
Change in unrealized
appreciation of
investments 56,140 88,459 11,843
Net gain on
investments 12,051 66,217 11,843
________ _________ ________
Net Increase in Net
Assets resulting
from operations $ 7,926 $62,103 $22,106
Manor Investment Funds, Inc.
STATEMENT OF CHANGES IN NET ASSETS
June 30, 2000
Manor Fund Growth Fund Bond Fund
Increase (Decrease)in Net
Assets from Operations
Investment income-net $ (4,125) $ (4,114) $10,263
Net realized (loss)gain (44,089) (22,242) -
on investments
Change in unrealized
appreciation 56,140 88,460 11,843
Net increase in net 7,926 62,104 22,106
assets resulting from
operations
Distributions to Shareholders
from
Investment income-net - - -
Net realized gain on
investments - - -
Capital Share Transactions
Proceeds from shares sold 259,363 749,572 418,514
Payments for shares
redeemed (411,052) (49,669) (71,385)
Total Increase (143,763) 762,007 369,235
Net Assets
Beginning of period 2,955,948 1,137,452 427,419
End of period $ 2,812,185 $ 1,899,459 $796,654
Manor Investment Funds, Inc.
15 Chester Commons, Malvern, PA 19355
610-722-0900 800-787-3334
Semi-Annual Report
June 30, 2000
Fund Office:
15 Chester Commons
Malvern, PA 19355
610-722-0900 800-787-3334
www.manorfunds.com
Managed by:
Morris Capital Advisors, Inc.
