BOND FUNDS MULTI-ASSET FUND STOCK FUNDS
MASON STREET FUNDS
SEMI-ANNUAL REPORT
SEPTEMBER 30, 1999
<PAGE>
This report is submitted for the general information of shareholders of Mason
Street Funds/R. It is not authorized for distribution to prospective investors
unless accompanied or preceded by a current Prospectus for the Funds, which
contains more information concerning the Funds' investment policies, as well as
fees and expenses and other pertinent information. Read the Prospectus carefully
before investing.
<PAGE>
SEPTEMBER 30, 1999
LETTER TO SHAREHOLDERS
(PHOTO)
JAMES D. ERICSON
The six months from April through September of 1999 can perhaps be characterized
as a period of nervousness in markets and the economy. The economy and
markets were generally strong during the second calendar quarter of 1999, as the
U.S. economy continued to expand and there was increasing evidence of recovery
in Asia and Europe. The previously narrow market appeared to broaden to include
names beyond large growth companies and technology issues.
The third quarter was quite different, with strongly negative market reactions
to any hint of earnings disappointment or other bad news. The apparent market
broadening of the previous quarter fizzled as investors flocked back to a few
favorite names. The dollar began to weaken against the Euro and the yen, and the
improving economy in Japan attracted investors that had previously preferred the
relative safety of U.S. markets.
Meantime, the U.S. economy remained strong, driven by consumers who continued to
buy homes, cars and other goods despite higher interest rates. Signals regarding
inflation are mixed. Although rises in the Consumer Price Index have been quite
modest, surveys of manufacturers indicate that inflation is inching up, largely
because of a tight labor market. With two increases in interest rates in the
last six months, and frequent warnings that further increases are possible, the
Federal Reserve has demonstrated determination to slow economic growth at any
sign of inflation.
Many thoughtful observers believe that information technology is transforming
the economy of America and much of the world, making a higher long-term growth
rate sustainable. It is still necessary to question how rapidly the economy can
grow without igniting inflation. With the population of the United States
growing at about 1% and measured productivity now expanding at a rate of about
2%, many economists believe that a long-term, non-inflationary economic growth
rate as high as 3% is possible. That compares with an average of 2% to 2.5% for
the prior two decades.
The Federal Reserve appears to be trying to rein in growth to the new 3% trend
line. One reason consumer spending has remained strong for so long is that
consumers feel wealthy and optimistic when stock prices are increasing. The
stock market has now been essentially flat for six months, though with many ups
and downs. If moderation in asset growth causes consumers to spend less, the
result is likely to be a moderation from the torrid growth rate of the last two
years. This would certainly be a far more positive outcome than the recessions
that have traditionally followed periods of above-trend growth. In a survey in
late September, the consensus forecast of the members of the National
Association of Business Economics was real growth of 3.8% in 1999 and 2.7% in
2000, with inflation of 2.1% this year and 2.3% next year. If this set of
predictions is accurate, the outcome would appear to be just what the Federal
Reserve is trying to achieve.
In managing the Mason Street Funds/R, we invest always for the long term, making
adjustments as appropriate for current conditions in the markets and the
economy. In recent months we have introduced two new funds, which provide our
investors a wider choice of investment objectives. The new Small Cap Growth
Stock Fund is managed in a style similar to that of the Aggressive Growth Stock
Fund, but with an emphasis on smaller-capitalization stocks. The Index 400 Stock
Fund provides an opportunity to participate in the middle-capitalization segment
of the market through a Fund designed to mirror the performance of the S&P 400
MidCap Index.
The next time you receive a report of this type from us, we will have celebrated
the beginning of a new millennium. Between now and then, businesses, governments
and individuals throughout the world will be taking precautions to avoid
possible disruptions caused by computer problems. We have been preparing for the
computer requirements associated with the approaching turn of the century since
early 1997. We believe that our systems are ready for the year 2000, and realize
issues in this area carry the risk of unforeseen problems. Performance of the
economy and investments of all types could be affected by year 2000 issues.
It seems a little early for greetings of the new year and the new millennium,
but we have always favored a forward-thinking attitude and planning for the
future. So we wish all our investors a safe passage into the new century, and we
hope you will continue to invest in the Mason Street Funds/R for many years.
Mason Street Funds/R
/s/JAMES D. ERICSON
JAMES D. ERICSON
President
<PAGE>
M A S O N S T R E E T F U N D S
TABLE OF CONTENTS
PERFORMANCE SUMMARY 3
- ----------------------------------------
OVERVIEW AND OUTLOOK 4
- ----------------------------------------
SMALL CAP GROWTH STOCK FUND 6
- ----------------------------------------
AGGRESSIVE GROWTH STOCK FUND 9
- ----------------------------------------
INTERNATIONAL EQUITY FUND 13
- ----------------------------------------
INDEX 400 STOCK FUND 17
- ----------------------------------------
GROWTH STOCK FUND 23
- ----------------------------------------
GROWTH AND INCOME STOCK FUND 27
- ----------------------------------------
INDEX 500 STOCK FUND 30
- ----------------------------------------
ASSET ALLOCATION FUND 37
- ----------------------------------------
HIGH YIELD BOND FUND 45
- ----------------------------------------
MUNICIPAL BOND FUND 50
- ----------------------------------------
SELECT BOND FUND 53
- ----------------------------------------
FINANCIAL STATEMENTS 58
- ----------------------------------------
NOTES TO FINANCIAL STATEMENTS 91
- ----------------------------------------
DIRECTORS AND OFFICERS 95
- ----------------------------------------
<PAGE>
SEPTEMBER 30, 1999
PERFORMANCE SUMMARY
For the Periods Ended September 30, 1999
<TABLE>
<CAPTION>
CLASS A - WITHOUT INITIAL SALES CHARGE
Small Cap Aggressive Index Growth and
Growth Growth International 400 Growth Income Index 500 Asset High Yield Municipal Select
Total Return<F1> Stock Stock Equity Stock Stock Stock Stock Allocation Bond Bond Bond
(as of 9/30/99) Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
One Year N/A 45.37% 23.27% N/A 30.08% 16.79% 27.03% 21.76% 2.77% -0.49% 4.82%
- ----------------------------------------------------------------------------------------------------------------------------------
Since Inception 3.90%<F2> 72.93% 5.12% -9.20%<F2> 74.54% 49.20% 72.51% 45.17% 14.10% 16.17% 18.24%
- ----------------------------------------------------------------------------------------------------------------------------------
Annualized N/A 24.48% 2.02% N/A 24.94% 17.35% 24.36% 16.07% 5.41% 6.17% 6.93%
- ----------------------------------------------------------------------------------------------------------------------------------
CLASS A<F3> - WITH INITIAL SALES CHARGE
Small Cap Aggressive Index Growth and
Growth Growth International 400 Growth Income Index 500 Asset High Yield Municipal Select
Total Return<F1> Stock Stock Equity Stock Stock Stock Stock Allocation Bond Bond Bond
(as of 9/30/99) Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------------------
One Year N/A 38.44% 17.36% N/A 23.91% 11.23% 20.98% 15.98% -2.09% -5.23% -0.13%
- -----------------------------------------------------------------------------------------------------------------------------------
Since Inception -1.05%<F2> 64.70% 0.12% -13.52%<F2> 66.23% 42.10% 64.29% 38.26% 8.67% 10.64% 12.61%
- -----------------------------------------------------------------------------------------------------------------------------------
Annualized N/A 22.07% 0.05% N/A 22.53% 15.08% 21.96% 13.83% 3.38% 4.12% 4.86%
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS B - WITHOUT CONTINGENT DEFERRED SALES CHARGE
Small Cap Aggressive Index Growth and
Growth Growth International 400 Growth Income Index 500 Asset High Yield Municipal Select
Total Return<F1> Stock Stock Equity Stock Stock Stock Stock Allocation Bond Bond Bond
(as of 9/30/99) Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------------------
One Year N/A 44.48% 22.39% N/A 29.19% 16.08% 26.25% 20.90% 1.99% -1.14% 4.14%
- -----------------------------------------------------------------------------------------------------------------------------------
Since Inception 3.80%<F2> 70.24% 3.57% -9.30%<F2> 71.73% 46.83% 69.81% 42.80% 12.05% 14.20% 16.27%
- -----------------------------------------------------------------------------------------------------------------------------------
Annualized N/A 23.70% 1.41% N/A 24.13% 16.60% 23.58% 15.31% 4.65% 5.45% 6.21%
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS B<F4> - WITH CONTINGENT DEFERRED SALES CHARGE
Small Cap Aggressive Index Growth and
Growth Growth International 400 Growth Income Index 500 Asset High Yield Municipal Select
Total Return<F1> Stock Stock Equity Stock Stock Stock Stock Allocation Bond Bond Bond
(as of 9/30/99) Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------------------
One Year N/A 39.48% 17.39% N/A 24.19% 11.08% 21.25% 15.90% -2.54% -5.85% -0.73%
- -----------------------------------------------------------------------------------------------------------------------------------
Since Inception -1.20%<F2> 67.24% 0.69% -13.84%<F2> 68.73% 43.83% 66.81% 39.80% 9.53% 11.20% 13.44%
- -----------------------------------------------------------------------------------------------------------------------------------
Annualized N/A 22.82% 0.28% N/A 23.26% 15.64% 22.70% 14.33% 3.71% 4.33% 5.17%
- -----------------------------------------------------------------------------------------------------------------------------------
<F1> Returns shown include fee waivers in effect and deductions for all Fund
expenses. In the absence of fee waivers, total return would be reduced.
Past performance is not predictive of future performance. Investment return
and principal value will fluctuate, so that your shares, when redeemed, may
be worth more or less than their original cost.
<F2> Inception date of 7/12/1999. Reflects total return for the period 7/12/99 -
9/30/99. Returns are not annualized.
<F3> Class A performance reflects the maximum sales charge of 4.75%.
<F4> Class B performance reflects a contingent deferred sales charge (CDSC) of
5% for One Year and 3% for Since Inception.
N/A - Not Applicable
</TABLE>
<PAGE>
M A S O N S T R E E T F U N D S
OVERVIEW AND OUTLOOK
- -----------
THE ECONOMY
- -----------
The current period of economic growth in the United States has now been in place
since 1991, making it the longest peacetime expansion ever. Based on continued
strength in the first half of the year, with real growth at a 4.3% pace in the
first quarter and 1.6% in the second, it now appears that the growth rate for
the full year will be not far below the 3.9% recorded in 1998. The international
economy is increasingly strong, with conditions in Japan improving and Europe
fairly strong.
Inflation remains a concern, particularly with unemployment at a very low level.
Wholesale prices posted their greatest increase in nine years in September,
fueled by big hikes in energy and food costs. With both warnings and actions,
the Federal Reserve continues a vigilant approach to dealing with inflation;
most observers expect that the rate increases in June and August will be
followed by another upward move in November.
Economic performance in the fourth quarter of 1999 and the first quarter of 2000
may be distorted by the Y2K concerns. An effort by many companies to build
inventories during the fourth quarter to avoid possible disruptions may be
followed by a period of inventory liquidation in the early months of 2000. The
first quarter of 2000 may therefore report some artificially weak performance.
ECONOMIC GROWTH AND INFLATION
Year % Change
- ------------------------------
Real GDP CPI-U
1989 3.4% 4.6%
1990 1.2% 6.1%
1991 -0.9% 3.1%
1992 2.7% 2.9%
1993 2.3% 2.7%
1994 3.5% 2.7%
1995 2.3% 2.5%
1996 3.4% 3.3%
1997 3.9% 1.9%
1998 3.9% 1.7%
Source: U.S. Department of Commerce. Year-to-year percentage change in Real
Gross Domestic Product is used for real economic growth. December-to-December
percentage change in the Consumer Price Index - Urban is used for the inflation
rate.
- -----------------
THE EQUITY MARKET
- -----------------
The six months from April through September can be divided into two very
different periods for the equity market. In the second calendar quarter, the
market continued its upward movement, and the strength broadened to include
stocks beyond the large growth stocks and technology favorites that previously
had been driving market performance. Both the S&P 500/R Index and the Nasdaq
Composite ended June at record levels. Most foreign markets were strong, as
well, benefiting from stability in Europe and a pronounced recovery from the
Asian financial crisis.
The third quarter presented a sharply different picture, with increased
volatility and a return to a situation with upward movement confined to a few
favorite names. All major domestic stock indices recorded negative returns in
the September quarter; only the EAFE Index of international stocks was positive,
as international markets responded to improved economies in Asia and Europe. The
narrowness of the domestic stock market is illustrated by a comparison of
returns for the capitalization-weighted S&P 500/R Index, with total return of
- -6.25% for the quarter, versus the same 500 names equally weighted, which
experienced a drop of 11% for the same period.
ANNUAL TOTAL RETURNS FROM S&P 500/R INDEX
Year
Ended
12/31/89 31.7%
12/31/90 -3.1%
12/31/91 30.5%
12/31/92 7.6%
12/31/93 10.1%
12/31/94 1.2%
12/31/95 37.4%
12/31/96 22.8%
12/31/97 33.4%
12/31/98 28.5%
Source: Standard & Poor's
<PAGE>
- ---------------
THE BOND MARKET
- ---------------
During the first nine months of 1999, interest rates have moved up fairly
steadily: by the end of September, the yield on 30-year Treasury bonds was
6.127%, up from 5.1% at the beginning of the year. This movement was driven
largely by the market's nervousness about higher inflation, which has been
fueled by continued strong economic growth and exacerbated by a doubling of oil
prices. The Federal Reserve's interest rate increases in June and August
provided the most visible sign of inflation worries. Since bond prices move in
the opposite direction from interest rates, the result for the bond market has
been the worst year since 1994 and the second-worst year on record.
As the U.S. Treasury has been running a surplus and issuing fewer securities,
the supply/demand relationship has caused the spread to widen between Treasury
yields and yields of other securities. In addition, lower quality bonds have
been affected by investors' worries about disruptions as the year 2000
approaches. Some investors believe that Treasuries and other top-quality bonds
will become increasingly popular in the coming months as investors move to the
lowest-risk securities they can find. If millennium-related problems prove to be
minimal, a rally in the bond market could occur in early 2000.
ANNUAL TOTAL RETURNS FROM
MERRILL LYNCH DOMESTIC MASTER INDEX
Year
Ended
12/31/89 14.2%
12/31/90 9.1%
12/31/91 15.9%
12/31/92 7.6%
12/31/93 10.0%
12/31/94 -2.8%
12/31/95 18.5%
12/31/96 3.6%
12/31/97 9.7%
12/31/98 8.9%
Source: Merrill Lynch. The Merrill Lynch Domestic Master Index is an unmanaged
market value weighted index comprised of U.S. Government, mortgage and
investment-grade corporate bonds.
<PAGE>
M A S O N S T R E E T F U N D S
SMALL CAP GROWTH STOCK FUND
- ---------------------------
SMALL CAP GROWTH STOCK FUND
- ---------------------------
- -------------------------------------------------------------------------------
OBJECTIVE: To achieve long-term growth of capital primarily by investing in the
common stocks of companies that can reasonably be expected to increase their
sales and earnings at a pace that will exceed the growth rate of the U.S.
economy over an extended period.
PORTFOLIO: Primarily common stocks of small-capitalization companies.
STRATEGY: To locate and invest in companies with above-average potential for
growth.
NET ASSETS: $5.5 million
- ------------------------------------------------------------------------------
The Small Cap Growth Stock Fund owns the stocks of emerging growth companies,
with the objective of maintaining a median market capitalization of $1 billion.
The range of market capitalization will normally be between $200 million and $3
billion. The investment process involves detailed studies of individual
companies. Factors evaluated include the growth rates of revenues and earnings,
opportunities for margin expansion, financial strength and quality of
management. Since growth stock portfolios tend to react strongly to changes in
financial and economic markets, as well as to changes in the prospects for
individual companies, returns of this Fund can vary considerably from time to
time. A higher level of risk (with risk defined as variability of returns over
time) is accepted for the potential of greater long-term returns.
In the short time since its establishment on July 12, 1999, the Small Cap Growth
Stock Fund has performed quite well, beating the S&P 600 Stock Fund Index and
Russell 2000 Stock Fund Index. The Fund benefited especially from participation
in a number of initial public offerings (IPOs) which experienced almost
immediate appreciation; in selecting holdings of these newly-public companies,
the focus is on profitability rather than simply on revenue growth. Management
estimates that these IPO holdings contributed 2.49% of the total return of 3.9%
since the Fund's inception.
The Fund is concentrated in the broadly-defined technology industry, where there
are many opportunities for growth. Major technology holdings include Clarify,
CBT and Advent, all of which are software developers and marketers, and
Whittman-Hart, Inc., a software services company. Other areas of moderate
concentration include media, where the emphasis is on small-cap broadcasting
companies, and consumer cyclicals, particularly specialty retailers. Many of the
retail holdings also have an element of technology, as the Internet becomes
increasingly important to the retail industry.
SECTOR ALLOCATION
9/30/99
Technology 39%
Consumer 19%
Energy 9%
Business and Communication Services 8%
Healthcare 5%
Finance 5%
Transportation 4%
S&P Index Futures 4%
Cash Equivalents 4%
Basic Materials/ Capital Goods 3%
TOP 10 EQUITY HOLDINGS
9/30/99
Company % Net Assets
- ---------------------------------------------
Clarify, Inc. 3.1%
Kent Electronics Corporation 2.9%
CBT Group Public Limited Company 2.5%
Cymer, Inc. 2.4%
Advent Software, Inc. 2.4%
Whittman-Hart, Inc. 2.3%
The Corporate Executive Board Company 2.3%
Stone Energy Corporation 2.2%
Getty Images, Inc. 2.1%
Semtech Corporation 2.1%
<PAGE>
SEPTEMBER 30, 1999
SMALL CAP GROWTH STOCK FUND
PERFORMANCE RELATIVE TO RELEVANT INDICES
7/12/99 9/30/99
- ---------------------------------------------------------------
SMALL CAP GROWTH STOCK FUND CLASS A 9,524 9,895
SMALL CAP GROWTH STOCK FUND CLASS B 10,000 10,380
SMALL CAP GROWTH STOCK FUND CLASS B
REDEMPTION VALUE 10,000 9,880
S&P 600 STOCK FUND INDEX 10,000 9,399
RUSSELL 2000 STOCK FUND INDEX 10,000 9,334
TOTAL RETURN
Since
For the periods ended September 30, 1999 Inception<F1>
- ----------------------------------------------------------
Small Cap Growth Stock Fund
(Class A - without initial sales charge) 3.90%
- ----------------------------------------------------------
S&P 600 Stock Fund Index (6.01)%
- ----------------------------------------------------------
Russell 2000 Stock Fund Index (6.66)%
- ----------------------------------------------------------
<F1>Fund inception date is 7/12/99. Reflects total return for the period 7/12/99
- - 9/30/99. Returns are not annualized.
The Standard & Poor's SmallCap 600 Index is an unmanaged index of 600 selected
common stocks of smaller U.S. based companies compiled by Standard & Poor's
Corporation. As of September 30, 1999, the 600 companies in the composite had a
median market capitalization of $450 million and total market value of $331
billion. The SmallCap 600 represents approximately 2% of the market value of
S&P's database of over 8,200 equities.
The Russell 2000 Index measures the performance of the 2,000 smallest companies
in the Russell 3000 Index. The Russell 3000 Index measures the performance of
the 3,000 largest U.S. companies based on total market capitalization. These
3,000 companies represent approximately 98% of the investable U.S. equity
market. As of the latest reconstitution, the average market capitalization of
companies in the Russell 3000 was $4.5 billion; the median market capitalization
was $723 million. Market capitalization of companies in the Index ranged from
$432.7 billion to $27.8 million. The Russell 2000 Index represents approximately
8% of the total market capitalization of the Russell 3000. As of the latest
reconstitution, the average market capitalization of companies in the Russell
2000 was approximately $533 million; the median market capitalization was
approximately $428 million. The largest company in the index had a total market
capitalization of approximately $3.4 billion.
This graph assumes an initial investment of $10,000 made in Class A and Class B
shares, with all sales charges on July 12, 1999 (commencement of operations).
Returns shown include fee waivers and deductions for all Fund expenses. In the
absence of fee waivers, total return would be reduced. Past performance is not
predictive of future performance. Investment return and principal value will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. Returns on p. 3 reflect the maximum sales charge for Class
A and a 5% contingent deferred sales charge for Class B Since Inception.
Stocks of smaller or newer companies, such as those held in this Fund, are more
likely to realize more substantial growth as well as suffer more significant
losses than larger or more established issuers. Investments in such companies
can be both more volatile and more speculative.
SCHEDULE OF INVESTMENTS
Shares/Par Market Value
--------------------------------------------------------------
COMMON STOCK (91.8%)
BASIC MATERIALS (0.7%)
Cambrex Corporation 1,400 $37,013
--------------------------------------------------------------
BUSINESS SERVICES (3.2%)
<F1> The Corporate Executive
Board Company 3,100 126,325
<F1> Steiner Leisure, Ltd. 2,100 52,500
--------------------------------------------------------------
TOTAL 178,825
--------------------------------------------------------------
CAPITAL GOODS (2.6%)
<F1> Dycom Industries Inc. 1,400 59,063
Kaydon Corporation 2,100 52,237
<F1> Power-One Inc. 1,200 30,600
--------------------------------------------------------------
TOTAL 141,900
--------------------------------------------------------------
COMMUNICATION SERVICES (5.0%)
<F1> Crown Castle International Co. 4,600 86,106
<F1> Pinnacle Holdings Inc. 4,100 107,113
<F1> Tessco Technologies Inc. 4,800 81,600
--------------------------------------------------------------
TOTAL 274,819
--------------------------------------------------------------
CONSUMER CYCLICAL (11.7%)
<F1> 1-800-FLOWERS.COM, INC. 4,000 57,750
<F1> 99 Cents Only Stores 600 21,675
<F1> Catalina Marketing Corporation 1,000 84,813
<F1> David's Bridal, Inc. 3,600 26,774
<F1> Dollar Tree Stores, Inc. 900 35,943
Fastenal Company 1,700 80,112
<F1> Getty Images, Inc. 4,900 118,213
<F1> Linens `N Things, Inc. 900 30,375
<F1> Sonic Automotive, Inc. 5,000 65,000
<F1> Tower Automotive, Inc. 3,800 75,288
<F1> Wild Oats Markets Inc. 1,400 55,300
--------------------------------------------------------------
TOTAL 651,243
--------------------------------------------------------------
CONSUMER STAPLES (6.5%)
<F1> American Italian Pasta Co. - Class A 3,100 88,737
<F1> Citadel Communications Corp. 3,100 105,788
<F1> Salem Communications Corporation 2,300 58,650
<F1> Westwood One, Inc. 2,500 112,813
--------------------------------------------------------------
TOTAL 365,988
--------------------------------------------------------------
ENERGY (9.0%)
<F1> Barrett Resources Corporation 2,600 96,038
<F1> Basin Exploration, Inc. 4,800 115,200
<F1> Global Industries, Ltd. 7,600 61,750
<F1> Nabors Industries, Inc. 4,100 102,500
<F1> Stone Energy Corporation 2,400 122,100
--------------------------------------------------------------
TOTAL 497,588
--------------------------------------------------------------
<PAGE>
M A S O N S T R E E T F U N D S
SMALL CAP GROWTH STOCK FUND
Shares/Par Market Value
--------------------------------------------------------------
FINANCE (4.5%)
Investors Financial Services Corp. 2,500 $85,938
Radian Group, Inc. 1,900 81,581
Waddell & Reed Financial, Inc. 3,800 84,312
--------------------------------------------------------------
TOTAL 251,831
--------------------------------------------------------------
HEALTHCARE (5.2%)
<F1> Patterson Dental Company 2,100 104,081
<F1> Priority Healthcare Corporation 1,500 46,312
<F1> Sybron International Corporation 3,300 88,688
<F1> Wesley Jessen VisionCare, Inc. 1,500 46,781
--------------------------------------------------------------
TOTAL 285,862
--------------------------------------------------------------
TECHNOLOGY (39.1%)
<F1> Advent Software, Inc. 2,100 130,725
<F1> Ancor Communications, Incorporated 3,600 87,300
<F1> Broadbase Software, Inc. 2,000 31,875
<F1> CBT Group Public Limited
Company, ADR 5,600 137,900
<F1> CDW Computer Centers, Inc. 2,000 97,750
<F1> Clarify, Inc. 3,400 171,063
<F1> Copper Mountain Networks 400 35,050
<F1> Cymer, Inc. 3,800 131,813
<F1> Dionex Corporation 2,000 85,500
<F1> Engage Technologies, Inc. 3,100 116,831
<F1> Etec Systems, Inc. 2,800 105,350
<F1> Great Plains Software, Inc. 1,400 72,100
<F1> Inet Technologies, Inc. 1,500 59,859
<F1> Internap Network Services Corporation 900 40,163
<F1> Kent Electronics Corporation 8,600 159,100
<F1> Northpoint Communications Group, Inc. 1,700 31,450
<F1> PMC-Sierra, Inc. 1,000 92,500
<F1> Qlogic Corporation 1,400 97,825
<F1> Scient Corporation 600 38,400
<F1> Semtech Corporation 3,200 117,200
<F1> TIBCO Software, Inc. 1,400 42,131
<F1> Trintech Group PLC, ADR 400 5,250
<F1> Viant Corporation 1,500 72,562
<F1> Visio Corporation 1,900 74,575
<F1> Whittman-Hart, Inc. 3,300 127,978
--------------------------------------------------------------
TOTAL 2,162,250
--------------------------------------------------------------
TRANSPORTATION (4.3%)
C.H. Robinson Worldwide, Inc. 3,200 107,800
<F1> Knight Transportation, Inc. 3,500 50,750
<F1> Swift Transportation Co., Inc. 3,900 76,781
--------------------------------------------------------------
TOTAL 235,331
--------------------------------------------------------------
TOTAL COMMON STOCK 5,082,650
==============================================================
Shares/Par Market Value
--------------------------------------------------------------
MONEY MARKET INVESTMENTS (7.2%)
FEDERAL GOVERNMENT AND AGENCIES (1.8%)
<F2> Federal Home Loan Mortgage
Corp., 5.51%, 1/10/00 100,000 $98,378
--------------------------------------------------------------
FINANCE LESSOR (5.4%)
Variable Funding Capital Corp.,
5.6%, 10/1/99 300,000 300,000
--------------------------------------------------------------
TOTAL MONEY MARKET INVESTMENTS 398,378
==============================================================
TOTAL INVESTMENTS (99.0%)
(Cost $5,417,778)<F3> 5,481,028
==============================================================
OTHER ASSETS, LESS LIABILITIES (1.0%) 55,268
==============================================================
TOTAL NET ASSETS (100.0%) $5,536,296
==============================================================
<F1> Non-Income Producing
ADR - American Depository Receipt
<F2> Partially held by the custodian in a segregated account as
collateral for open futures positions. Information regarding open futures
contracts as of September 30, 1999 is summarized below:
Number of Expiration Unrealized
Issuer Contracts Date Depreciation
- -----------------------------------------------------------------------
Russell 2000 Future Index
(Total notional value at
9/30/99, $220,275) 1 12/99 $5,525
<F3> At September 30, 1999, the aggregate cost of securities for federal income
tax purposes was $5,417,778 and the net unrealized appreciation of
investments based on that cost was $63,250 which is comprised of $451,791
aggregate gross unrealized appreciation and $388,541 aggregate gross
unrealized depreciation.
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
SEPTEMBER 30, 1999
AGGRESSIVE GROWTH STOCK FUND
- ----------------------------
AGGRESSIVE GROWTH STOCK FUND
- ----------------------------
- -----------------------------------------------------------------------------
OBJECTIVE: To seek long-term growth of capital primarily by investing in the
common stocks of companies that can be expected to increase their sales and
earnings at a pace that will exceed the growth rate of the U.S. economy over an
extended period.
PORTFOLIO: Primarily common stocks of medium- and small-sized companies.
STRATEGY: To identify and invest in companies with above-average potential for
growth.
NET ASSETS: $59.3 million
- ------------------------------------------------------------------------------
The Aggressive Growth Stock Fund owns the stocks of emerging growth companies
with market capitalizations generally in the range of $1 billion to $10 billion.
Since growth stock portfolios tend to react strongly to changes in financial and
economic markets, as well as to changes in the prospects for individual
companies, returns of this Fund can vary considerably from time to time. A
higher level of risk (with risk defined as variability of returns over time) is
accepted for the potential of greater long-term returns.
Over the six months ended September 30, 1999, the Fund achieved a total return
of 18.57%, compared with 4.58% for the S&P MidCap 400 Index.
The Fund's focus in stock selection is on the individual companies' ability to
generate revenue, expand profit margins and maintain solid balance sheets;
industry sector selection is of secondary importance. However, because
opportunities tend to cluster in certain industry groups, there is a significant
concentration in the technology sector, with a secondary concentration in
consumer cyclicals, particularly in the retail industry. Within the technology
sector, the emphasis is on telecommunications equipment, semiconductors and
semiconductor capital equipment. Internet participation is focused on names such
as Vignette and VeriSign, which have very credible business models and are
within a year of achieving profitability while maintaining a very rapid growth
pace. Besides their inherent merit, many companies in the technology sector have
the potential to merge as technology companies seek to broaden their product
offerings; one major holding, Visio Corporation, has reached an agreement to be
acquired by Microsoft.
SECTOR ALLOCATION
9/30/99
Technology 44%
Consumer 22%
Healthcare 8%
Energy 7%
Capital Goods 6%
Business Services 5%
Cash Equivalents 3%
S&P Index Futures 2%
Finance 2%
Transportation 1%
TOP 10 EQUITY HOLDINGS
9/30/99
Company % Net Assets
- ---------------------------------------------
Comverse Technology, Inc. 3.4%
Sanmina Corporation 2.7%
Gemstar International Group Limited 2.7%
Lamar Advertising Company 2.4%
Jabil Circuit, Inc. 2.3%
Synopsys, Inc. 2.3%
Visio Corporation 2.2%
Bausch & Lomb, Inc. 2.1%
JDS Uniphase Corporation 2.1%
Microchip Technology, Inc. 1.9%
<PAGE>
M A S O N S T R E E T F U N D S
AGGRESSIVE GROWTH STOCK FUND
PERFORMANCE RELATIVE TO RELEVANT INDICES
<TABLE>
<CAPTION>
3/31/97 9/30/97 3/31/98 9/30/98 3/31/99 9/30/99
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
AGGRESSIVE GROWTH STOCK FUND CLASS A 9,524 13,152 14,436 11,329 13,890 16,470
AGGRESSIVE GROWTH STOCK FUND CLASS B 10,000 13,770 15,059 11,783 14,404 17,024
AGGRESSIVE GROWTH STOCK FUND CLASS B
REDEMPTION VALUE 16,724
WILSHIRE SMALL CAP INDEX 10,000 13,503 14,644 10,730 12,662 14,164
WILSHIRE NEXT 1750 INDEX 10,000 13,454 14,580 11,115 12,517 13,602
S&P 400 STOCK INDEX 10,000 13,313 14,903 12,475 14,969 15,650
</TABLE>
TOTAL RETURN Average
Annual
One Since
For the periods ended September 30, 1999 Year Inception<F1>
- -------------------------------------------------------------------
Aggressive Growth Stock Fund
(Class A - without initial sales charge) 45.37% 24.48%
- -------------------------------------------------------------------
Wilshire Small Cap Index 32.00% 14.93%
- -------------------------------------------------------------------
Wilshire Next 1750 Index 22.38% 13.09%
- -------------------------------------------------------------------
S&P MidCap 400 Index 25.48% 19.61%
- -------------------------------------------------------------------
<F1>Fund inception date is 3/31/97. Returns are annualized.
Since the Fund invests primarily in medium-capitalization (Mid Cap) issues, the
index that best reflects the Fund's performance is the S&P MidCap 400 Index.
This is a capitalization-weighted index that measures the performance of the
mid-range sector of the U.S. stock market. As of September 30, 1999, the 400
companies in this composite had a median market capitalization of $1.6 billion
and a total market value of $825 billion. The MidCap 400 represents
approximately 6% of the market value of S&P's database of over 8,200 equities.
Because the average market capitalization of the Aggressive Growth Stock Fund
has recently increased, the S&P MidCap 400 Index is more representative of the
current composition of this Portfolio than the Wilshire Next 1750 Index and
Wilshire Small Cap Index, which are the small-capitalization indices used in the
past.
The Wilshire Next 1750 is an unmanaged, equally weighted index. Included in this
index are those stocks which are ranked 750 to 2500 by market capitalization in
the Wilshire 5000. The largest sectors represented in this index are technology,
energy and utilities. Its average market capitalization is approximately $1.0
billion as of September 30, 1999.
The Wilshire Small Cap Index is a subset of the Wilshire Next 1750 and includes
250 stocks chosen based upon their size, sector and liquidity characteristics.
Each stock is equally weighted in this unmanaged index. The largest sectors
represented in this index are technology, materials and services, and finance.
Its average market capitalization is approximately $1.1 billion as of September
30, 1999.
This graph assumes an initial investment of $10,000 made in Class A and Class B
shares, with all sales charges on March 31, 1997 (commencement of operations).
Returns shown include fee waivers and deductions for all Fund expenses. In the
absence of fee waivers, total return would be reduced. Past performance is not
predictive of future performance. Investment return and principal value will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. Returns on p. 3 reflect the maximum sales charge for Class
A and a 5% contingent deferred sales charge for Class B One Year and 3% for
Since Inception.
Stocks of smaller or newer companies, such as those held in this Fund, are more
likely to realize more substantial growth as well as suffer more significant
losses than larger or more established issuers. Investments in such companies
can be both more volatile and more speculative.
<PAGE>
SEPTEMBER 30, 1999
AGGRESSIVE GROWTH STOCK FUND
SCHEDULE OF INVESTMENTS
Shares/Par Market Value
----------------------------------------------------------------------
COMMON STOCK (94.8%)
BUSINESS SERVICES (5.1%)
<F1> The Corporate Executive
Board Company 22,300 $908,725
<F1> Interim Services, Inc. 18,200 298,025
<F1> Navigant Consulting, Inc. 20,100 932,138
<F1> Steiner Leisure, Ltd. 18,200 455,000
<F1> Waters Corporation 7,300 442,106
----------------------------------------------------------------------
TOTAL 3,035,994
----------------------------------------------------------------------
CAPITAL GOODS (5.6%)
<F1> Jabil Circuit, Inc. 27,600 1,366,200
Kaydon Corporation 14,300 355,712
<F1> Sanmina Corporation 20,900 1,617,138
----------------------------------------------------------------------
TOTAL 3,339,050
----------------------------------------------------------------------
COMMUNICATION SERVICES (0.6%)
<F1> Crown Castle International Co. 18,000 336,938
----------------------------------------------------------------------
CONSUMER CYCLICAL (15.2%)
<F1> 99 Cents Only Stores 6,225 224,878
<F1> Abercrombie & Fitch Co. 19,600 667,625
<F1> Catalina Marketing Corporation 9,500 805,719
Cintas Corporation 14,400 832,500
<F1> Dollar Tree Stores, Inc. 10,200 407,362
Fastenal Company 13,900 655,038
Galileo International, Inc. 20,300 817,075
<F1> Getty Images, Inc. 38,100 919,163
<F1> Kohl's Corporation 14,500 958,813
<F1> Linens `N Things, Inc. 14,300 482,625
<F1> O'Reilly Automotive, Inc. 16,700 795,859
Royal Caribbean Cruises Ltd. 10,500 472,500
<F1> Sonic Automotive, Inc. 32,800 426,400
<F1> Tower Automotive, Inc. 26,900 532,956
----------------------------------------------------------------------
TOTAL 8,998,513
----------------------------------------------------------------------
CONSUMER STAPLES (6.4%)
<F1> American Tower Corporation 11,900 232,794
<F1> AMFM Inc. 14,300 870,512
<F1> Clear Channel Communications, Inc. 14,000 1,118,250
<F1> Insight Communications 5,700 163,163
<F1> Lamar Advertising Company 28,800 1,425,600
----------------------------------------------------------------------
TOTAL 3,810,319
----------------------------------------------------------------------
Shares/Par Market Value
----------------------------------------------------------------------
ENERGY (7.5%)
Anadarko Petroleum Corporation 18,200 $556,237
<F1> BJ Services Company 27,400 871,663
<F1> Global Industries, Ltd. 35,200 286,000
<F1> Nabors Industries, Inc. 31,700 792,500
Santa Fe International Corp. 47,300 1,019,906
<F1> Weatherford International, Inc. 28,800 921,600
----------------------------------------------------------------------
TOTAL 4,447,906
----------------------------------------------------------------------
FINANCE (2.1%)
Investors Financial Services Corp. 21,100 725,312
<F1> Knight/Trimark Group, Inc. 15,500 459,188
----------------------------------------------------------------------
TOTAL 1,184,500
----------------------------------------------------------------------
HEALTHCARE (7.6%)
Bausch & Lomb, Inc. 19,300 1,272,594
<F1> Elan Corp. PLC, ADR 28,900 969,956
<F1> Lincare Holdings, Inc. 7,500 199,922
<F1> Patterson Dental Company 19,650 973,903
<F1> Province Healthcare Company 12,600 144,900
<F1> Sybron International Corporation 35,700 959,438
----------------------------------------------------------------------
TOTAL 4,520,713
----------------------------------------------------------------------
TECHNOLOGY (43.8%)
<F1> Acxiom Corporation 26,600 522,856
<F1> Altera Corporation 18,200 789,425
<F1> Bluestone Software, Inc. 1,500 34,687
<F1> CBT Group Public Limited
Company, ADR 2,400 59,100
<F1> CDW Computer Centers, Inc. 18,100 884,637
<F1> Comverse Technology, Inc. 21,250 2,004,141
<F1> Concord EFS, Inc. 39,225 809,016
<F1> Conexant Systems, Inc. 10,700 777,422
<F1> Copper Mountain Networks 4,200 368,025
<F1> DST Systems, Inc. 15,900 904,312
<F1> Electronic Arts Inc. 6,300 455,962
<F1> Etec Systems, Inc. 14,800 556,850
<F1> Fiserv, Inc. 22,950 745,875
<F1> Gemstar International Group Limited 20,300 1,585,937
<F1> Great Plains Software, Inc. 12,200 628,300
<F1> Internap Network Services Corporation 11,400 508,725
<F1> JDS Uniphase Corporation 11,000 1,251,937
<F1> Microchip Technology, Inc. 21,900 1,125,112
<F1> Network Appliance Inc. 9,700 694,762
<F1> Northpoint Communications 8,100 149,850
<F1> Novellus Systems, Inc. 10,200 687,863
Paychex, Inc. 21,000 716,625
<F1> Peregrine Systems, Inc. 22,400 912,800
<F1> PMC-Sierra, Inc. 10,400 962,000
<PAGE>
M A S O N S T R E E T F U N D S
AGGRESSIVE GROWTH STOCK FUND
Shares/Par Market Value
----------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
<F1> Proxicom, Inc. 4,100 $239,850
<F1> Qlogic Corporation 11,300 789,588
<F1> Sapient Corporation 5,300 499,525
<F1> Scient Corporation 4,400 281,600
<F1> Semtech Corporation 20,600 754,475
<F1> Synopsys, Inc. 24,300 1,364,597
<F1> Tellabs, Inc. 17,400 990,713
<F1> VeriSign, Inc. 4,100 436,650
<F1> Viant Corporation 7,600 367,650
<F1> Vignette Corporation 9,000 814,500
<F1> Visio Corporation 32,900 1,291,325
----------------------------------------------------------------------
TOTAL 25,966,692
----------------------------------------------------------------------
TRANSPORTATION (0.9%)
<F1> Swift Transportation Co., Inc. 28,175 554,695
----------------------------------------------------------------------
TOTAL COMMON STOCK 56,195,320
======================================================================
MONEY MARKET INVESTMENTS (5.9%)
FEDERAL AND GOVERNMENT AGENCIES (0.5%)
<F2> Federal Home Loan Mortgage Corp.,
5.39%, 1/20/00 300,000 294,657
----------------------------------------------------------------------
FINANCE LESSOR (2.2%)
Variable Funding Capital Corp.,
5.43%, 10/13/99 1,300,000 1,297,647
----------------------------------------------------------------------
PERSONAL CREDIT INSTITUTIONS (2.2%)
General Electric Capital Corporation,
5.31%, 10/13/99 1,300,000 1,297,699
----------------------------------------------------------------------
PHONE COMMUNICATIONS (1.0%)
U.S. West Communications Group,
5.60%, 10/1/99 600,000 600,000
----------------------------------------------------------------------
TOTAL MONEY MARKET INVESTMENTS 3,490,003
======================================================================
TOTAL INVESTMENTS (100.7%)
(Cost $47,111,494)<F3> 59,685,323
======================================================================
OTHER ASSETS, LESS LIABILITIES (-0.7%) (410,523)
======================================================================
TOTAL NET ASSETS (100.0%) $59,274,800
======================================================================
<F1> Non-Income Producing
ADR - American Depository Receipt
<F2> Partially held by the custodian in a segregated account as collateral for
open futures positions. Information regarding open futures contracts as of
September 30, 1999 is summarized below:
Number of Expiration Unrealized
Issuer Contracts Date Depreciation
- ----------------------------------------------------------------------------
MidCap 400 Stock Index
(Total notional value at
9/30/99, $1,627,825) 8 12/99 $86,225
<F3> At September 30, 1999, the aggregate cost of securities for federal income
tax purposes was $47,111,494 and the net unrealized appreciation of
investments based on that cost was $12,573,829 which is comprised of
$14,243,446 aggregate gross unrealized appreciation and $1,669,617
aggregate gross unrealized depreciation.
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
SEPTEMBER 30, 1999
INTERNATIONAL EQUITY FUND
- -------------------------
INTERNATIONAL EQUITY FUND
- -------------------------
- -------------------------------------------------------------------------------
OBJECTIVE: To seek long-term appreciation of capital by investing primarily in
the common stocks of companies outside the United States.
PORTFOLIO: Primarily common stocks of companies in foreign countries.
STRATEGY: To identify and invest in the stocks of foreign companies offering
the greatest discounts to their long-term values.
NET ASSETS: $34.1 million
- -------------------------------------------------------------------------------
The International Equity Fund offers investors the opportunity to participate in
the growth of companies in countries throughout the world. The Fund is managed
with a disciplined approach to long-term value, with special attention to
balance sheet quality. Investments are selected based mainly on the
attractiveness of individual securities and geographic regions; industry focus
is a secondary consideration.
International equity indices moved higher during the six months ended September
30, with Japanese stocks accounting for most of the increase. Although the Fund
was underweighted in the Japanese market, it benefited from large positions in
several leading Japanese companies including Nomura Securities and Sony which
performed especially well. Despite recent weakness in Asia, some of the Fund's
best performers were Asian companies, including Korea Electric Power
Corporation. With renewed unrest, Indonesia shares fell, providing the
opportunity to increase exposure to Asia Pulp & Paper, as that stock sank along
with the Indonesian market.
After posting generally strong performance in the first quarter of 1999, most
Latin American stocks moved lower in the second quarter. The Fund added to
positions in several Latin American telecommunications companies at attractive
prices, including Embratel, the Brazilian long-distance company controlled by
MCI WorldCom, which offers tremendous growth potential amidst deregulation and
exploding Internet usage in Brazil.
European markets were mixed during the period, as investors weighed the
likelihood of an economic rebound. The Fund benefited from its holdings of
European companies with cyclical exposure including Stora Enzo, a Finnish forest
product company, and British steel producer Corus Group. Holdings in Somerfield
and Marks & Spencer, two British retailers, hurt performance as investors sold
down shares in economically-sensitive British stocks on concerns that rising
interest rates in that country will dampen economic activity. As gold prices
moved up, the Fund benefited from a higher weighting in gold mining stocks,
including Kinross Gold in Canada and Anglogold in South Africa.
The International Equity Fund is managed for Northwestern Mutual Investment
Services, LLC by Templeton Investment Counsel, Inc. The Fund's management
remains committed to its value-oriented approach, based on the belief that
buying quality stocks at bargain prices is the key to long-term investment
success. The current two-tiered market environment, with performance
concentrated in large growth companies, provides an excellent opportunity to
take profits in overvalued stocks and to reinvest in attractive stocks with
compelling valuations.
ASSET ALLOCATION
9/30/99
Continental Europe 33%
United Kingdom 21%
Asia 17%
Latin America 10%
North America 7%
Australia/New Zealand 5%
Short-term Investments 5%
Other Regions 2%
TOP 10 EQUITY HOLDINGS
9/30/99
Company % Net Assets
- ---------------------------------------------
Stora Enso OYJ - R Shares 2.4%
The Nomura Securities Co., Ltd. 2.1%
Merita Limited A 1.7%
The Weir Group PLC 1.7%
Unidanmark A/S, A, Registered 1.7%
Volvo Aktiebolaget, B Free 1.6%
Sony Corporation 1.6%
British Steel PLC 1.6%
Rhone Poulenc SA, Series A 1.6%
Shell Transport & Trading Company PLC 1.6%
<PAGE>
M A S O N S T R E E T F U N D S
INTERNATIONAL EQUITY FUND
PERFORMANCE RELATIVE TO EAFE INDEX
<TABLE>
<CAPTION>
3/31/97 9/30/97 3/31/98 9/30/98 3/31/99 9/30/99
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INTERNATIONAL EQUITY FUND CLASS A 9,524 10,476 10,304 8,122 9,392 10,012
INTERNATIONAL EQUITY FUND CLASS B 10,000 10,970 10,749 8,462 9,742 10,357
INTERNATIONAL EQUITY FUND CLASS B
REDEMPTION VALUE 10,069
EAFE INDEX 10,000 11,234 11,893 10,326 12,651 13,560
</TABLE>
TOTAL RETURN Average
Annual
One Since
For the periods ended September 30, 1999 Year Inception<F1>
- ----------------------------------------------------------------------
International Equity Fund
(Class A - without initial sales charge) 23.27% 2.02%
- ----------------------------------------------------------------------
EAFE Index 31.32% 12.95%
- ----------------------------------------------------------------------
<F1>Fund inception date is 3/31/97. Returns are annualized.
As depicted in the graph, the International Equity Fund is compared against the
Morgan Stanley Capital International EAFE ("Europe-Australasia-Far East") Index.
The index is composed of approximately 1,100 companies in 20 countries in Europe
and the Pacific Basin. The objective of the index is to reflect the movements of
stock markets in these countries by representing an unmanaged (indexed)
portfolio within each country. The indices are constructed so that companies
chosen represent about 60% of market capitalization in each market; industry
composition of the market is reflected; and a cross section of large-, medium-,
and small-capitalization stocks is included, taking into account liquidity
concerns. The index is calculated in U.S. dollars. The index cannot be invested
in directly and does not include sales charges.
This graph assumes an initial investment of $10,000 made in Class A and Class B
shares, with all sales charges on March 31, 1997 (commencement of operations).
Returns shown include fee waivers and deductions for all Fund expenses. In the
absence of fee waivers, total return would be reduced. Past performance is not
predictive of future performance. Investment return and principal value will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. Returns on p. 3 reflect the maximum sales charge for Class
A and a 5% contingent deferred sales charge for Class B One Year and 3% for
Since Inception.
Investors should be aware of the risks of investments in foreign securities,
particularly investments in securities of companies in developing nations. These
include the risks of currency fluctuation, of political and economic instability
and of less well-developed government supervision and regulation of business and
industry practices, as well as differences in accounting standards.
SCHEDULE OF INVESTMENTS
Country Shares/Par Market Value
----------------------------------------------------------------------
COMMON STOCK (95.0%)
CAPITAL EQUIPMENT (7.4%)
Alcatel, ADR France 11,400 $316,350
Alcatel, DG France 1,500 206,707
Hong Kong Aircraft
& Engineering Hong Kong 135,000 245,050
Koninklijke Philips
Electronics N.V. Netherlands 2,760 277,760
New Holland NV Netherlands 15,000 240,000
Rolls-Royce PLC United Kingdom 129,200 448,419
Sirti SPA Italy 39,300 204,659
The Weir Group PLC United Kingdom 126,200 580,892
----------------------------------------------------------------------
TOTAL 2,519,837
----------------------------------------------------------------------
CONSUMER GOODS (12.5%)
Autoliv, Inc. Sweden 14,400 541,800
Fiat SPA Ord. Italy 8,492 283,063
Medeva PLC United Kingdom 176,000 391,292
Nycomed Amersham PLC United Kingdom 75,525 462,746
Ono Pharmaceutical
Co., Ltd. Japan 9,000 333,897
Rhone Poulenc SA,
Series A France 10,600 547,491
Sony Corporation Japan 3,700 552,898
Tate & Lyle, PLC United Kingdom 34,500 213,060
Teva Pharmaceutical
Industries Ltd., ADR Israel 7,400 372,313
Volvo Aktiebolaget, B Free Sweden 19,600 553,476
----------------------------------------------------------------------
TOTAL 4,252,036
----------------------------------------------------------------------
ENERGY (15.3%)
Elf Aquitaine SA France 2,800 489,025
Endesa S.A. Spain 13,900 264,082
EVN Energie Versorgung Austria 1,500 191,643
Gener S.A., ADR Chile 12,500 190,625
Hong Kong Electric
Holdings Ltd. Hong Kong 106,000 328,870
Iberdrola S.A. Spain 31,000 459,547
Korea Electric Power
Corp., ADR Republic of Korea 12,800 420,880
National Power PLC United Kingdom 60,400 470,989
Petroleo Brasileiro S.A. -
Petrobras Brazil 1,339,000 200,153
Ranger Oil Limited Canada 45,400 195,788
Renaissance Energy Ltd. Canada 26,500 378,700
Repsol S.A. Spain 17,400 340,769
Shell Transport &
Trading Company PLC United Kingdom 72,700 543,556
Thames Water United Kingdom 21,083 330,019
Veba AG Germany 7,700 421,896
----------------------------------------------------------------------
TOTAL 5,226,542
----------------------------------------------------------------------
<PAGE>
SEPTEMBER 30, 1999
INTERNATIONAL EQUITY FUND
Country Shares/Par Market Value
----------------------------------------------------------------------
FINANCE (19.2%)
Australia & New Zealand
Bank Group Australia 61,000 $408,038
Axa China Region
Limited Hong Kong 295,000 193,684
AXA S.A. France 4,100 518,716
Banco Bradesco S.A. Brazil 27,950,000 133,782
Banco Itau S.A. Brazil 940,000 48,958
Bangkok Bank Public
Company Limited Thailand 74,900 147,329
Compagnie Financiere
de Paribas France 3,000 333,542
Deutsche Bank AG Germany 5,333 356,949
Hang Lung Development Hong Kong 133,000 150,673
HSBC Holdings PLC Hong Kong 27,600 315,340
ING Groep N.V. Netherlands 8,800 477,950
Merita Limited A Finland 106,000 596,032
The Nomura Securities
Co., Ltd. Japan 47,200 731,474
PartnerRe Ltd. Bermuda 11,500 399,625
<F2> Peregrine Investments
Holdings Limited Hong Kong 66,000 0
Scor France 6,000 290,732
Unibanco Uniao de Bancos Brazil 1,579,000 56,745
Unidanmark A/S, A,
Registered Denmark 8,500 575,986
XL Capital Ltd. Bermuda 8,400 378,000
Zurich Versicherungs-
Gesellschaft Switzerland 820 457,377
----------------------------------------------------------------------
TOTAL 6,570,932
----------------------------------------------------------------------
GOLD MINES (2.9%)
AngloGold Limited, ADR South Africa 11,700 367,819
Barrick Gold Corporation Canada 19,200 418,101
Kinross Gold Corporation Canada 73,500 206,070
----------------------------------------------------------------------
TOTAL 991,990
----------------------------------------------------------------------
MATERIALS (13.9%)
Agrium, Inc. Canada 22,700 225,581
Akzo Nobel N.V. Netherlands 7,400 313,649
Asia Pulp & Paper
Company Ltd. Singapore 23,400 137,475
Bayer AG Germany 8,800 350,965
Boehler-Uddeholm AG Austria 6,344 283,754
British Steel PLC United Kingdom 217,100 551,492
Companhia Vale do
Rio Doce, ADR Brazil 17,900 378,317
Grupo Mexico, B shares Mexico 73,700 302,007
Hepworth PLC United Kingdom 58,200 200,320
Country Shares/Par Market Value
----------------------------------------------------------------------
MATERIALS (CONTINUED)
Hoechst AG Germany 5,600 $243,916
Pioneer International Ltd. Australia 203,200 502,320
Stora Enso OYJ - R shares Finland 61,000 808,776
Williams PLC United Kingdom 80,800 430,134
----------------------------------------------------------------------
TOTAL 4,728,706
----------------------------------------------------------------------
MULTI-INDUSTRY (3.9%)
Elementis PLC United Kingdom 68,280 114,696
Hutchinson Whampoa
Limited Hong Kong 38,000 352,223
Pilkington PLC United Kingdom 290,500 487,978
Swire Pacific Limited,
A shares Hong Kong 36,000 170,550
Swire Pacific Limited,
B shares Hong Kong 296,000 217,205
----------------------------------------------------------------------
TOTAL 1,342,652
----------------------------------------------------------------------
SERVICES (19.9%)
Best Denki Co., Ltd. Japan 12,000 124,542
British Airways PLC United Kingdom 85,200 478,463
Cable & Wireless
Optus Limited Australia 116,160 250,160
Cia. de Telecomunicaciones
de Chile S.A., ADR Chile 13,100 236,619
Compania Anonima
Nacional Telefonos
de Venezuela Venezuela 9,400 252,038
Embratel Participacoes S.A. Brazil 11,400 130,388
<F1> Korea Telecom Corporation Republic of Korea 4,800 177,600
KPN NV Netherlands 3,600 157,762
Kurita Water Industries Ltd. Japan 20,000 405,748
Laidlaw Transportation
Limited Canada 46,965 317,014
Marks & Spencer PLC United Kingdom 51,800 269,143
Mayne Nickless Ltd. Australia 72,600 194,253
Moebel Walther AG PFD Germany 5,056 64,074
News Corporation
Limited, Pfd. Australia 49,000 322,972
Nippon Telephone &
Telegraph Corporation
(NTT) Japan 35 430,638
The Peninsular & Oriental
Steam Navigation
Company United Kingdom 23,000 346,958
Philippine Long Distance
Telephone Company,
ADR Philippines 6,000 130,500
Portugal Telecom SA Portugal 3,900 162,311
<PAGE>
M A S O N S T R E E T F U N D S
INTERNATIONAL EQUITY FUND
Country Shares/Par Market Value
----------------------------------------------------------------------
SERVICES (CONTINUED)
Pt Indostat, ADR Indonesia 19,000 $256,500
J Sainsbury PLC United Kingdom 55,600 347,031
SK Telecom Co., Ltd., ADR Republic of Korea 375 3,867
Somerfield PLC United Kingdom 40,000 85,635
South China Morning
Post Ltd. Hong Kong 47,000 31,765
Storehouse PLC United Kingdom 150,900 221,174
Telefonica de Argentina
S.A., ADR Argentina 17,400 458,925
Telefonica del Peru S.A.,
B shares, ADR Peru 17,500 235,156
Telefonos de Mexico
SA, ADR Mexico 7,600 541,500
Telesp Participacoes
S.A., ADR Brazil 10,300 162,224
----------------------------------------------------------------------
TOTAL 6,794,960
----------------------------------------------------------------------
TOTAL COMMON STOCK 32,427,655
======================================================================
MONEY MARKET INVESTMENTS (4.4%)
FINANCE LESSORS (2.9%)
Receivables Capital,
5.46%, 10/13/99 United States 1,000,000 998,180
----------------------------------------------------------------------
PERSONAL CREDIT INSTITUTION (1.5%)
Variable Funding,
5.6%, 10/1/99 United States 500,000 499,922
----------------------------------------------------------------------
TOTAL MONEY MARKET INVESTMENTS 1,498,102
======================================================================
TOTAL INVESTMENTS (99.4%)
(Cost $34,600,032)<F3> 33,925,757
======================================================================
OTHER ASSETS, LESS LIABILITIES (0.6%) 203,463
======================================================================
TOTAL NET ASSETS (100.0%) $34,129,220
======================================================================
<F1> Non-Income Producing
<F2> Defaulted Security
GDR - Global Depository Receipt
ADR - American Depository Receipt
<F3> At September 30, 1999, the aggregate cost of securities for federal income
tax purposes was $34,600,032 and the net unrealized depreciation of
investments based on that cost was $674,275 which is comprised of
$3,563,664 aggregate gross unrealized appreciation and $4,237,939 aggregate
gross unrealized depreciation.
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
INVESTMENT PERCENTAGES BY COUNTRY:
United Kingdom 20.43%
France 7.92%
Japan 7.56%
Hong Kong 5.88%
Canada 5.10%
Australia 4.92%
Netherlands 4.30%
Other 43.89%
------------------------------------
TOTAL 100.00%
====================================
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
SEPTEMBER 30, 1999
INDEX 400 STOCK FUND
- --------------------
INDEX 400 STOCK FUND
- --------------------
- ------------------------------------------------------------------------------
OBJECTIVE: To seek investment results that approximate the performance of the
S&P MidCap 400 Index, by investing in stocks included in the S&P MidCap
400 Index.
PORTFOLIO: Stocks included in the S&P MidCap 400 Index, most of which have a
market value in the range of $750 million to $5 billion.
STRATEGY: To capture mid-cap market performance, at low cost, by investing in
a portfolio modeled after a mid-cap stock index in proportion to their
weightings in the index.
NET ASSETS: $24.8 million
- -------------------------------------------------------------------------------
The Index 400 Stock Fund was added to the Mason Street Funds/R family of funds
during 1999 to provide investors a low-cost way to invest in the middle-
capitalization sector of the equity market. Rather than being managed in the
traditional sense, using economic, financial and market analysis, a computer
program is used to determine which stocks should be purchased or sold to achieve
the Fund's objective of matching performance of the S&P MidCap 400 Index.
Because the S&P 400 Index is an unmanaged index, its return does not reflect the
deduction of expenses that exist with a mutual fund. In its early months of
operation, the Fund achieved its objective of matching performance of the S&P
MidCap 400 Index before expenses.
SECTOR ALLOCATION
9/30/99
Technology 20%
Consumer Cyclical 15%
Basic Materials/Capital Goods 12%
Other Industries 12%
Finance 11%
Healthcare 9%
Index Futures and Other Assets 9%
Consumer Staples 7%
Energy 5%
TOP 10 EQUITY HOLDINGS
9/30/99
Company % Net Assets
- --------------------------------------------------
VERITAS Software Corporation 1.4%
Biogen, Inc. 1.3%
Xilinx, Inc. 1.0%
Linear Technology Corporation 1.0%
Analog Devices, Inc. 1.0%
Altera Corporation 0.9%
Maxim Integrated Products, Inc. 0.9%
Harley-Davidson, Inc. 0.8%
Univision Communications, Inc. 0.8%
Vitesse Semiconductor Corporation 0.7%
PERFORMANCE RELATIVE TO S&P 400 INDEX
<TABLE>
<CAPTION>
7/12/99 9/30/99
- ----------------------------------------------------------------------
<C> <C> <C>
INDEX 400 STOCK FUND CLASS A $9,524 $8,648
INDEX 400 STOCK FUND CLASS B 10,000 9,070
INDEX 400 STOCK FUND CLASS B REDEMPTION VALUE 8,617
S&P MidCap 400 INDEX 10,000 9,051
</TABLE>
TOTAL RETURN
Since
For the periods ended September 30, 1999 Inception<F1>
- ----------------------------------------------------------------
Index 400 Stock Fund
(Class A - without initial sales charge) (9.20)%
- ----------------------------------------------------------------
S&P MidCap 400 Index (9.49)%
- ----------------------------------------------------------------
<F1> Fund inception date is 7/12/99. Reflects total return for the period
7/12/99 - 9/30/99. Returns are not annualized.
The S&P MidCap 400 Index is a capitalization-weighted index that measures the
performance of the mid-range sector of the U.S. stock market. As of September
30, 1999, the 400 companies in the composite had a median market capitalization
of $1.6 billion and a total market value of $825 billion. The MidCap 400
represents approximately 6% of the market value of S&P's database of over 8,200
equities.
This graph assumes an initial investment of $10,000 made in Class A and Class B
shares, with all sales charges on July 12, 1999 (commencement of operations).
Returns shown include fee waivers and deductions for all Fund expenses. In the
absence of fee waivers, total return would be reduced. Past performance is not
predictive of future performance. Investment return and principal value will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. Returns on p. 3 reflect the maximum sales charge for Class
A and a 5% contingent deferred sales charge for Class B Since Inception.
<PAGE>
M A S O N S T R E E T F U N D S
INDEX 400 STOCK FUND
SCHEDULE OF INVESTMENTS
Shares/Par Market Value
-----------------------------------------------------------------------
COMMON STOCK (91.1%)
BASIC MATERIALS (4.8%)
A. Schulman, Inc. 900 $15,580
<F1> Airgas Inc. 1,900 22,088
AK Steel Holding Corp. 1,600 29,200
Albemarle Corporation 1,300 26,163
Bowater Inc. 1,400 73,500
Cabot Corp. 1,800 42,750
Carpenter Technology 600 14,700
Chesapeake Corp. 600 18,150
Cleveland-Cliffs Inc. 300 9,338
Consolidated Papers, Inc. 2,500 67,188
Crompton & Knowles Corporation 3,278 47,735
<F1> Cytec Industries Inc. 1,200 28,800
Dexter Corp. 600 22,388
Ethyl Corp. 2,300 8,912
Ferro Corp. 1,000 21,313
Georgia Gulf Corp. 800 14,100
Georgia-Pacific Corporation
(Timber Group) 2,300 52,613
H.B. Fuller Company 400 24,350
IMC Global Inc. 3,100 45,144
Kennametal Inc. 800 20,700
Longview Fibre Co. 1,400 17,413
Lubrizol Corp. 1,500 38,531
Lyondell Chemical Company 3,100 41,463
M.A. Hanna Company 1,400 15,925
Martin Marietta Materials 1,300 51,918
<F1> Maxxam Inc. 200 10,275
Minerals Technologies Inc. 600 29,137
Olin Corp. 1,200 16,350
Oregon Steel Mills Inc. 700 7,830
P.H. Glatfelter Company 1,200 19,725
Rayonier Inc. 800 33,600
RPM, Inc. 3,000 36,562
Ryerson Tull Inc. 700 16,188
Solutia Inc. 3,000 53,625
Sonoco Products Co. 2,800 63,875
Southdown Inc. 1,000 53,500
<F1> Ucar International Inc. 1,200 27,375
Universal Corporation 900 23,513
Wausau-Mosinee Paper Corp. 1,400 16,975
----------------------------------------------------------------------
TOTAL 1,178,492
----------------------------------------------------------------------
CAPITAL GOODS (7.7%)
Agco Corp. 1,600 20,800
Albany International Corp. 800 12,100
<F1> American Power Conversion 5,200 98,800
<F1> American Standard Companies 1,900 72,913
Shares/Par Market Value
-----------------------------------------------------------------------
CAPITAL GOODS (CONTINUED)
Ametek Inc. 900 $17,831
Carlisle Cos. Inc. 800 31,600
Cordant Technologies Inc. 1,000 30,438
Diebold Inc. 1,900 43,938
Donaldson Co. Inc. 1,300 30,144
Federal Signal Corp. 1,200 23,850
Flowserve Corp. 1,000 16,625
Gencorp Inc. 1,100 20,144
Granite Construction Inc. 700 18,244
Harsco Corp. 1,100 30,387
Herman Miller, Inc. 2,200 52,594
Hillenbrand Industries 1,800 47,475
HON Industries 1,700 32,725
Hubbell Inc. 1,800 57,375
<F1> Jabil Circuit, Inc. 2,200 108,900
<F1> Jacobs Engineering Group Inc. 700 22,750
Kaydon Corporation 900 22,387
<F1> Magnetek Inc. 900 8,044
Molex Inc. 4,200 152,775
Newport News Shipbuilding 1,000 32,312
Nordson Corp. 500 24,500
Pentair Inc. 1,200 48,150
Precision Castparts Corp. 700 21,350
Premark International Inc. 1,700 85,850
Reynolds & Reynolds 2,100 42,788
<F1> Sanmina Corporation 1,600 123,800
<F1> SCI Systems Inc. 2,000 88,875
<F1> Sensormatic Electronics Corp. 2,100 26,643
<F1> Sequa Corp. 300 18,900
<F1> SPX Corp. 800 72,600
Standard Register Co. 800 18,800
Stewart & Stevenson Services 800 10,500
Symbol Technologies Inc. 2,400 80,700
Tecumseh Products Co. 600 30,075
Teleflex, Inc. 1,000 39,437
Trinity Industries 1,200 37,050
<F1> Vishay Intertechnology Inc. 2,300 54,625
Wallace Computer Services, Inc. 1,100 22,275
Watts Industries 700 15,225
York International Corp. 1,100 39,531
----------------------------------------------------------------------
TOTAL 1,906,825
----------------------------------------------------------------------
COMMUNICATION SERVICES (1.1%)
Cincinnati Bell Inc. 3,800 73,863
Comsat Corp. 1,400 41,475
Telephone & Data Systems Inc. 1,700 150,981
----------------------------------------------------------------------
TOTAL 266,319
----------------------------------------------------------------------
<PAGE>
SEPTEMBER 30, 1999
INDEX 400 STOCK FUND
Shares/Par Market Value
-----------------------------------------------------------------------
CONSUMER CYCLICALS (15.2%)
A.H. Belo Corporation 3,200 $61,200
<F1> Abercrombie & Fitch Co. 2,800 95,375
<F1> AC Nielsen Corporation 1,600 36,300
<F1> Apollo Group Inc. 2,100 44,363
Arvin Industries Inc. 700 21,655
Bandag Inc. 600 19,200
<F1> Barnes & Noble, Inc. 1,900 49,400
<F1> Bed Bath & Beyond Inc. 3,800 132,763
<F1> BJ's Wholesale Club, Inc. 2,000 59,125
<F1> Blyth Industries Inc. 1,300 36,480
<F1> Borders Group Inc. 2,100 30,844
Borg-Warner Automotive, Inc. 700 30,100
<F1> Burlington Industries, Inc. 1,500 6,655
Callaway Golf Company 2,100 25,594
Cintas Corp. 3,000 173,438
Claire's Stores Inc. 1,400 23,188
Clayton Homes Inc. 3,900 33,881
<F1> Compusa Inc. 2,500 15,312
<F1> Convergys Corp. 4,200 83,213
<F1> Dollar Tree Stores, Inc. 1,700 67,894
Enesco Group Inc. 400 6,150
Family Dollar Stores 4,700 99,287
Fastenal Co. 1,000 47,125
<F1> Federal-Mogul Corp. 1,900 52,369
<F1> Furniture Brands International Inc. 1,400 27,563
<F1> Gtech Holdings Corporation 1,000 21,438
Harley-Davidson, Inc. 4,200 210,262
Harte-Hanks Communications 1,900 47,856
Heilig-Meyers Co. 1,600 7,600
Houghton Mifflin Co. 800 32,500
International Game Technology 2,700 48,600
<F1> Jones Apparel Group, Inc. 3,300 94,875
Kelly Services Inc. 1,000 30,125
Lancaster Colony Corp. 1,100 35,200
<F1> Land's End Inc. 800 52,800
<F1> Lear Corporation 1,800 63,337
Lee Enterprises 1,200 32,850
Leggett & Platt Inc. 5,400 106,313
<F1> Mandalay Resort Group 2,500 49,375
Manpower Inc. 2,200 64,075
Mark IV Industries Inc. 1,300 25,675
Media General Inc. 1,400 71,750
Meritor Automotive Inc. 1,900 39,662
<F1> Micro Warehouse Inc. 1,000 12,063
Modine Manufacturing Co. 800 18,650
<F1> Modis Professional Services Inc. 2,600 34,450
<F1> Mohawk Industries Inc. 1,700 33,894
<F1> Navigant Consulting Co. 1,200 55,650
Shares/Par Market Value
------------------------------------------------------------------------
CONSUMER CYCLICALS (CONTINUED)
NCH Corp. 100 $4,519
<F1> Officemax Inc. 3,100 18,019
Ogden Corp. 1,300 13,000
Olsten Corp. 2,200 22,962
<F1> Payless Shoesource Inc. 900 45,450
Pittston Brink's Group 1,100 25,506
<F1> Premier Parks Inc. 2,100 60,900
<F1> Promus Hotel Corp. 2,300 74,894
The Reader's Digest Association, Inc. 2,900 84,825
<F1> Robert Half International, Inc. 2,500 60,000
Rollins Inc. 800 12,350
Ross Stores Inc. 2,600 52,325
<F1> Saks Incorporated 3,900 59,231
<F1> Scholastic Corp. 400 20,000
Shaw Industries Inc. 3,800 60,325
<F1> Snyder Communications Inc. 2,000 30,375
Sotheby's Holdings 1,600 41,300
Stewart Enterprises, Inc. 3,000 18,188
Superior Industries International 700 19,600
<F1> Sylvan Learning Systems Inc. 1,400 27,125
<F1> Tech Data Corp. 1,400 32,594
Tiffany & Co. 1,900 113,881
<F1> Unifi Inc. 1,600 17,600
USG Corp. 1,400 66,500
Viad Corp. 2,700 79,650
Warnaco Group 1,600 29,200
Washington Post 300 153,188
Wellman Inc. 900 16,256
Westpoint Stevens Inc. 1,500 35,438
----------------------------------------------------------------------
TOTAL 3,762,675
----------------------------------------------------------------------
CONSUMER STAPLES (7.1%)
Banta Corp. 800 17,850
Bergen Brunswig Corp. 3,700 38,388
Bob Evans Farms, Inc. 1,100 22,412
<F1> Brinker International Inc. 1,800 48,825
<F1> Buffets Inc. 1,200 13,950
Carter-Wallace Inc. 1,200 21,450
CBRL Group Inc. 1,600 24,800
<F1> Chris-Craft Industries Inc. 900 50,513
Church & Dwight Inc. 1,100 27,500
Dean Foods Co. 1,100 47,918
Dial Corp. 2,800 71,400
Dole Food Company 1,600 30,400
Dreyer's Grand Ice Cream Inc. 800 13,900
Flowers Industries Inc. 2,700 36,619
Hannaford Brothers Co. 1,200 84,525
<F1> Hispanic Broadcasting Corp. 1,300 98,962
<PAGE>
M A S O N S T R E E T F U N D S
INDEX 400 STOCK FUND
Shares/Par Market Value
-----------------------------------------------------------------------
CONSUMER STAPLES (CONTINUED)
Hormel Foods Corp. 2,000 $82,625
IBP Inc. 2,500 61,719
International Multifoods Corp. 500 11,500
Interstate Bakeries 1,900 43,700
The J.M. Smucker Company 800 16,900
Lance Inc. 800 10,450
<F1> Lone Star Steakhouse & Saloon 1,000 7,688
McCormick & Co. 1,900 62,819
<F1> Outback Steakhouse Inc. 2,000 50,937
<F1> Papa John's International Inc. 800 33,000
<F1> Perrigo Company 2,000 15,750
<F1> PSS World Medical, Inc. 1,900 16,981
RJ Reynolds Tobacco Holdings Inc. 3,000 81,000
Ruddick Corp. 1,300 20,638
<F1> Starbucks Corp. 5,000 123,905
<F1> Suiza Foods Corp. 900 33,750
Tyson Foods Inc. 6,300 103,556
<F1> U.S. Foodservice 2,700 48,600
Universal Foods Corp. 1,400 32,113
<F1> Univision Communications, Inc. 2,500 203,438
<F1> Vlasic Foods International 1,200 8,325
Whitman Corp. 2,400 34,200
----------------------------------------------------------------------
TOTAL 1,753,006
----------------------------------------------------------------------
ENERGY (4.7%)
<F1> BJ Services Company 1,900 60,444
Devon Energy Corporation 1,900 78,731
Ensco International Inc. 3,700 66,831
<F1> Global Marine Inc. 4,700 77,255
Murphy Oil Corp. 1,200 64,875
<F1> Nabors Industries, Inc. 2,900 72,500
Noble Affiliates Inc. 1,600 46,400
<F1> Noble Drilling Corp. 3,600 78,750
<F1> Ocean Energy Inc. 4,500 45,844
Pennzoil-Quaker State Company 2,100 26,513
<F1> Pioneer Natural Resources Co. 2,700 28,688
<F1> Santa Fe Snyder Corp. 4,900 44,100
<F1> Smith International Inc. 1,300 52,650
Tidewater Inc. 1,500 38,250
Tosco Corporation 4,200 106,050
Transocean Offshore Inc. 2,700 82,687
Ultramar Diamond Shamrock Corp. 2,400 61,200
Valero Energy Corp. 1,500 28,875
<F1> Varco International Inc. 1,800 21,938
<F1> Weatherford International, Inc. 2,700 86,400
----------------------------------------------------------------------
TOTAL 1,168,981
----------------------------------------------------------------------
Shares/Par Market Value
-----------------------------------------------------------------------
FINANCE (10.9%)
A.G. Edwards, Inc. 2,600 $68,575
Allmerica Financial Corp. 1,500 71,438
Ambac Financial Group, Inc. 1,900 90,013
American Financial Group Inc. 1,600 44,900
Associated Banc-Corp 1,700 61,519
Astoria Financial Corporation 1,500 46,125
CCB Financial Corp. 1,100 45,788
Charter One Financial Inc. 4,730 109,381
City National Corp. 1,200 40,275
Compass Bancshares Inc. 3,100 77,500
Dime Bancorp, Inc. 3,000 52,500
<F1> E<F1>TRADE Group Inc. 6,400 150,400
Everest Reinsurance Holdings, Inc. 1,300 30,956
Finova Group Inc. 1,700 62,050
First Security Corporation 5,300 126,041
First Tennessee National Corp. 3,600 101,250
First Virginia Banks Inc. 1,400 60,987
GreenPoint Financial Corp. 3,000 79,687
Hibernia Corp. 4,400 51,150
Horace Mann Educators 1,100 28,394
HSB Group Inc. 800 28,150
Keystone Financial Inc. 1,300 30,875
Marshall & Ilsley Corp. 2,900 165,481
Mercantile Bankshares Corp. 1,900 58,781
North Fork Bancorporation 3,800 74,100
Old Kent Financial Corp. 3,200 118,800
Old Republic International Corporation 3,600 51,975
Pacific Century Financial Corporation 2,200 44,962
The PMI Group, Inc. 1,200 49,050
Protective Life Corp. 1,800 52,200
Provident Financial Group, Inc. 1,200 43,875
Reliastar Financial Corp. 2,400 79,800
Sovereign Bancorp Inc. 4,900 44,559
T. Rowe Price Associates, Inc. 3,300 90,544
TCF Financial Corp. 2,300 65,694
Unitrin Inc. 2,000 69,500
Webster Financial Corp. 1,000 25,500
Westamerica Bancorporation 1,100 33,275
Wilmington Trust Corporation 900 43,706
Zions Bancorporation 2,200 121,275
-------------------------------------------------------------------------
TOTAL 2,691,031
-------------------------------------------------------------------------
HEALTHCARE (9.0%)
<F1> Acuson Corp. 700 8,925
<F1> Apria Healthcare Group Inc. 1,400 23,450
Beckman Coulter Inc. 800 36,100
<F1> Beverly Enterprises Inc. 2,800 11,900
<F1> Biogen, Inc. 4,100 323,131
<PAGE>
SEPTEMBER 30, 1999
INDEX 400 STOCK FUND
Shares/Par Market Value
-----------------------------------------------------------------------
HEALTHCARE (CONTINUED)
<F1> Centocor Inc. 1,900 $111,269
<F1> Chiron Corp. 5,000 138,437
<F1> Covance Inc. 1,600 15,500
Dentsply International Inc. 1,400 31,850
<F1> First Health Group Corp. 1,400 31,413
<F1> Forest Laboratories, Inc. 2,300 96,887
<F1> Foundation Health Systems 3,300 31,144
<F1> Genzyme Corporation (General Division) 2,300 103,644
<F1> Gilead Sciences Inc. 1,100 70,606
<F1> Health Management Associates Inc. 6,900 50,887
ICN Pharmaceuticals, Inc. 2,100 36,094
<F1> Ivax Corp. 3,000 49,500
<F1> Lincare Holdings, Inc. 1,600 42,650
<F1> Medimmune Inc. 1,500 149,484
<F1> Millennium Pharmaceuticals 1,000 65,000
<F1> Minimed Inc. 800 78,600
Mylan Laboratories 3,500 64,313
Omnicare Inc. 2,500 24,063
<F1> Oxford Health Plans 2,200 27,500
<F1> Pacificare Health Systems 1,200 51,900
<F1> Quintiles Transnational Corp. 3,100 58,997
<F1> Quorum Health Group, Inc. 2,000 14,063
<F1> Sepracor Inc. 900 67,950
<F1> Steris Corp. 1,900 26,125
<F1> Stryker Corp. 2,600 132,925
<F1> Sybron International Corporation 2,800 75,250
<F1> Total Renal Care Holdings 2,200 16,362
<F1> Trigon Healthcare Inc. 1,200 34,650
<F1> Ventiv Health, Inc. 666 6,577
<F1> VISX, Inc. 1,700 134,459
----------------------------------------------------------------------
TOTAL 2,241,605
----------------------------------------------------------------------
TECHNOLOGY (20.0%)
<F1> Adtran Inc. 1,100 42,144
<F1> Affiliated Computer Services, Inc. 1,300 52,813
<F1> Altera Corporation 5,400 234,225
<F1> Analog Devices, Inc. 4,700 240,875
<F1> Arrow Electronics Inc. 2,600 45,825
<F1> Atmel Corp. 2,700 91,293
Avnet Inc. 1,000 42,000
<F1> Cadence Design Systems Inc. 6,600 87,450
<F1> Cambridge Technology Partners Inc. 1,600 23,200
<F1> Cirrus Logic Inc. 1,700 18,700
<F1> Citrix Systems Inc. 2,400 148,650
Comdisco Inc. 4,100 79,181
<F1> Comverse Technology, Inc. 1,900 179,193
<F1> Concord EFS, Inc. 5,250 108,281
<F1> Cypress Semiconductor Corp. 2,800 60,200
Shares/Par Market Value
------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
<F1> DST Systems, Inc. 1,700 $96,688
<F1> Electronic Arts Inc. 1,700 123,038
<F1> Fiserv, Inc. 3,400 110,500
Gartner Group Inc. 2,400 40,050
<F1> Imation Corporation 1,000 31,000
<F1> Informix Corp. 5,200 41,275
<F1> Integrated Device Technology Inc. 2,400 44,400
<F1> Intuit Inc. 1,700 149,016
<F1> Investment Technology Group Inc. 800 18,400
<F1> Keane Inc. 2,000 45,625
<F1> Legato Systems Inc. 2,200 95,906
Linear Technology Corporation 4,200 246,880
<F1> Litton Industries Inc. 1,200 65,700
<F1> Maxim Integrated Products, Inc. 3,700 233,447
<F1> Mentor Graphics Corp. 1,800 15,413
<F1> Microchip Technology, Inc. 1,400 71,925
<F1> NCR Corporation 2,700 89,269
<F1> Network Associates Inc. 3,800 72,675
<F1> NOVA Corporation 2,000 50,000
<F1> Policy Management Systems Corporation 1,000 31,625
<F1> Qlogic Corporation 1,000 69,875
<F1> Quantum Corporation 4,600 64,688
<F1> Rational Software Corp. 2,300 67,347
<F1> Siebel Systems Inc. 2,500 166,563
<F1> Sterling Commerce Inc. 2,400 44,550
<F1> Sterling Software, Inc. 2,300 46,000
<F1> Storage Technology Corp. 2,700 51,975
<F1> Structural Dynamics Research 1,000 15,030
<F1> Sungard Data Systems Inc. 3,100 81,569
<F1> Symantec Corp. 1,500 53,953
<F1> Synopsys, Inc. 1,900 106,697
<F1> Teradyne Inc. 4,600 162,150
<F1> Transaction Systems Architects, Inc. 900 24,244
<F1> VERITAS Software Corp. 4,500 341,719
<F1> Vitesse Semiconductor Corporation 2,100 179,288
<F1> Waters Corp. 1,700 102,956
<F1> Xilinx, Inc. 3,900 255,572
-------------------------------------------------------------------------
TOTAL 4,961,038
-------------------------------------------------------------------------
TRANSPORTATION (1.2%)
Airborne Freight Corp. 1,300 27,381
<F1> Alaska Airgroup Inc. 700 28,481
Alexander & Baldwin Inc. 1,200 28,650
Arnold Industries Inc. 700 8,837
CNF Transportation Inc. 1,300 48,425
Comair Holdings Inc. 2,700 45,056
Gatx Corp. 1,300 40,381
J.B. Hunt Transport Services, Inc. 1,000 13,875
<PAGE>
M A S O N S T R E E T F U N D S
INDEX 400 STOCK FUND
Shares/Par Market Value
-----------------------------------------------------------------------
TRANSPORTATION (CONTINUED)
Overseas Shipholding Group 1,000 $15,438
<F1> Swift Transportation Co., Inc. 1,700 33,469
<F1> Wisconsin Central Transport 1,400 19,163
----------------------------------------------------------------------
TOTAL 309,156
----------------------------------------------------------------------
UTILITIES (9.4%)
AGL Resources Inc. 1,600 26,000
Allegheny Energy Inc. 3,200 101,800
Alliant Energy Corp. 2,100 58,144
American Water Works Inc. 2,600 75,238
Black Hills Corp. 600 13,987
<F1> Calpine Corp. 700 59,544
Cleco Corporation 600 19,463
CMP Group Inc. 900 23,737
Conectiv Inc. 2,500 49,063
DPL Inc. 4,300 75,788
El Paso Energy Corporation 3,300 131,381
Energy East Corp. 3,200 76,000
Hawaiian Electric Industries, Inc. 900 31,668
Idacorp Inc. 1,000 30,125
Illinova Corp. 1,900 53,318
Indiana Energy Inc. 800 16,050
Ipalco Enterprises Inc. 2,300 44,706
K N Energy, Inc. 1,900 42,631
Kansas City Power & Light 1,700 41,118
KeySpan Corporation 3,900 111,638
LG&E Energy Corp. 3,500 74,375
MCN Energy Group Inc. 2,300 39,531
<F1> Midamerican Energy Holdings Co. 1,600 47,200
Minnesota Power Inc. 2,000 35,125
Montana Power Co. 3,000 91,313
National Fuel Gas Co. 1,100 51,906
New England Electric System 1,600 83,000
NiSource Inc. 3,400 75,225
<F1> Northeast Utilities 3,600 66,150
OGE Energy Corp. 2,100 46,725
Pinnacle West Capital Corp. 2,300 83,663
Potomac Electric Power 3,200 81,400
Public Service Company of New Mexico 1,100 20,075
Puget Sound Energy Inc. 2,300 51,606
Questar Corp. 2,300 41,688
Scana Corp. 2,800 67,725
Sierra Pacific Resources 2,158 48,016
Teco Energy Inc. 3,600 76,050
Utilicorp United Inc. 2,500 52,656
Washington Gas Light Co. 1,300 35,263
Wisconsin Energy Corporation 3,200 75,000
----------------------------------------------------------------------
TOTAL 2,325,091
----------------------------------------------------------------------
TOTAL COMMON STOCK 22,564,219
======================================================================
Shares/Par Market Value
-----------------------------------------------------------------------
MONEY MARKET INVESTMENTS (7.2%)
FEDERAL GOVERNMENT AND AGENCIES (0.4%)
<F2> Federal Home Loan Mortgage Corp.,
5.51%, 1/10/00 100,000 $98,378
----------------------------------------------------------------------
FINANCE LESSOR (2.8%)
Variable Funding Capital Corp.,
5.60%, 10/1/99 700,000 700,000
----------------------------------------------------------------------
PERSONAL CREDIT INSTITUTIONS (4.0%)
General Electric Capital Corporation,
5.31%, 10/13/99 1,000,000 998,230
----------------------------------------------------------------------
TOTAL MONEY MARKET INVESTMENTS 1,796,608
======================================================================
TOTAL INVESTMENTS (98.3%)
(Cost $26,819,875)<F3> 24,360,827
======================================================================
OTHER ASSETS, LESS LIABILITIES (1.7%) 430,689
======================================================================
TOTAL NET ASSETS (100.0%) $24,791,516
======================================================================
<F1> Non-Income Producing
<F2> Partially held by the custodian in a segregated account as collateral for
open futures positions. Information regarding open futures contracts as of
September 30, 1999 is summarized below:
Number of Expiration Unrealized
Issuer Contracts Date Depreciation
-----------------------------------------------------------------------
MidCap 400 Stock Index
(Total notional value at
9/30/99, $1,826,737) 9 12/99 $92,437
<F3> At September 30, 1999, the aggregate cost of securities for federal income
tax purposes was $26,819,875 and the net unrealized depreciation of
investments based on that cost was $2,459,048 which is comprised of
$802,187 aggregate gross unrealized appreciation and $3,261,235 aggregate
gross unrealized depreciation.
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
SEPTEMBER 30, 1999
GROWTH STOCK FUND
- ------------------
GROWTH STOCK FUND
- ------------------
- --------------------------------------------------------------------------------
OBJECTIVE: To seek long-term growth of capital by investing in companies
believed to have above-average earnings growth potential; current income is
secondary.
PORTFOLIO: A diversified mix of high-quality growth stocks in medium and large
companies.
STRATEGY: To analyze economic trends to determine their impact on various
sectors and industries and to select high-quality stocks from industries with
the best earnings potential.
NET ASSETS: $55.5 million
- --------------------------------------------------------------------------------
The Growth Stock Fund is invested in high-quality companies of large- to medium-
capitalization with strong financial characteristics and the ability to generate
internal growth. A key factor in stock selection is the choice of industries
with good earnings potential, based on analysis of economic trends to determine
their impact on various sectors of the economy. Stock selection is made through
"top down" analysis: first industry and market sector choices are made based on
the economic environment, and then the most promising companies within each
sector are selected as holdings. The Fund remains close to fully invested, with
S&P futures used at times to maintain the desired degree of market exposure.
During the first six months of the fiscal year, the Growth Stock Fund provided
total return of 1.64%, compared with return of 0.35% for the S&P 500/R Index,
its principal benchmark. The Fund's major themes continue to be technology and
consumer stocks, and these two groups are increasingly converging, as retailers
expand into electronic commerce via the Internet. Technology holdings were
increased during the last six months, with the emphasis on high-quality
companies that have already become profitable and have excellent growth
prospects. The largest technology companies are among the industry leaders:
Microsoft, IBM and Cisco Systems. Retail stocks such as Kohl's, Costco, Dayton-
Hudson and Wal-Mart experienced a modest dip in the late summer, then recovered
by the end of the third calendar quarter. Exposure to media stocks has been
increased to take advantage of a very strong advertising environment driven by
the continued strong economy and bolstered by Internet companies that are
spending heavily to attract consumers to their Web sites.
SECTOR ALLOCATION
9/30/99
Technology 21%
Consumer Cyclicals 14%
Consumer Staples 13%
Index Futures 12%
Basic Materials/Capital Goods 9%
Healthcare 7%
Finance 7%
Other Industries 5%
Communication Services 5%
Energy 4%
Cash Equivalents 3%
TOP 10 EQUITY HOLDINGS
9/30/99
Company % Net Assets
- ---------------------------------------------------
Microsoft Corporation 2.8%
General Electric Company 2.6%
International Business Machines Corporation 2.5%
Cisco Systems, Inc. 2.1%
Fiserv, Inc. 2.1%
Kohl's Corporation 2.0%
Enron Corp. 1.8%
Tyco International Ltd. 1.8%
Wal-Mart Stores, Inc. 1.7%
Tribune Company 1.7%
<PAGE>
M A S O N S T R E E T F U N D S
GROWTH STOCK FUND
PERFORMANCE RELATIVE TO S&P 500/R INDEX
<TABLE>
<CAPTION>
3/31/97 9/30/97 3/31/98 9/30/98 3/31/99 9/30/99
- -------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
GROWTH STOCK FUND CLASS A 9,524 11,829 13,817 12,779 16,355 16,623
GROWTH STOCK FUND CLASS B 10,000 12,380 14,412 13,293 16,958 17,173
GROWTH STOCK FUND CLASS B REDEMPTION VALUE 16,873
S&P 500/R INDEX 10,000 12,618 14,787 13,747 17,503 17,564
</TABLE>
TOTAL RETURN Average
Annual
One Since
For the periods ended September 30, 1999 Year Inception<F1>
- -------------------------------------------------------------------------
Growth Stock Fund
(Class A - without initial sales charge) 30.08% 24.94%
- -------------------------------------------------------------------------
S&P 500/R Index 27.77% 25.26%
- ------------------------------------------------------------------------
<F1> Fund inception date is 3/31/97. Returns are annualized.
The Standard & Poor's 500 Composite Stock Price Index is an unmanaged index of
500 selected common stocks, most of which are listed on the New York Stock
Exchange. The index is heavily weighted toward stocks with large market
capitalizations and represents approximately two-thirds of the total market
value of all domestic common stocks. The index cannot be invested in directly
and does not include sales charges.
This graph assumes an initial investment of $10,000 made in Class A and Class B
shares, with all sales charges on March 31, 1997 (commencement of operations).
Returns shown include fee waivers and deductions for all Fund expenses. In the
absence of fee waivers, total return would be reduced. Past performance is not
predictive of future performance. Investment return and principal value will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. Returns on p. 3 reflect the maximum sales charge for Class
A and a 5% contingent deferred sales charge for Class B One Year and 3% for
Since Inception.
SCHEDULE OF INVESTMENTS
Shares/Par Market Value
-----------------------------------------------------------------------
COMMON STOCK (85.3%)
BASIC MATERIALS (2.0%)
Ecolab, Inc. 21,000 $716,625
The Mead Corporation 5,500 189,063
PPG Industries, Inc. 3,400 204,000
-----------------------------------------------------------------------
TOTAL 1,109,688
-----------------------------------------------------------------------
CAPITAL GOODS (7.3%)
AlliedSignal, Inc. 7,300 437,543
Avery Dennison Corporation 13,800 727,950
Emerson Electric Co. 3,300 208,519
General Electric Company 12,400 1,470,175
<F1> Republic Services, Inc. 21,100 229,463
Tyco International Ltd. 9,500 980,875
Waste Management, Inc. 1,000 19,250
------------------------------------------------------------------------
TOTAL 4,073,775
------------------------------------------------------------------------
COMMUNICATION SERVICES (4.8%)
Ameritech Corporation 4,400 295,624
AT&T Corporation 21,028 914,718
GTE Corporation 6,500 499,688
<F1> MCI WorldCom, Inc. 8,048 578,450
<F1> Nextel Communications, Inc. 5,900 400,094
------------------------------------------------------------------------
TOTAL 2,688,574
------------------------------------------------------------------------
CONSUMER CYCLICALS (13.9%)
<F1> Amazon.com, Inc. 1,600 127,900
<F1> barnesandnoble.com Inc. 8,200 158,363
Borg-Warner Automotive, Inc. 3,600 154,800
Centex Corporation 4,900 144,856
<F1> Costco Wholesale Corporation 6,200 446,400
Dayton Hudson Corporation 7,500 450,469
Ford Motor Company 6,800 341,275
Gap, Inc. 3,650 116,800
Harley-Davidson, Inc. 17,700 886,106
The Interpublic Group
of Companies, Inc. 5,800 238,525
<F1> Kohl's Corporation 16,400 1,084,450
Lennar Corporation 5,200 82,875
The McGraw-Hill Companies Inc. 4,400 212,850
The New York Times Company 19,400 727,500
Omnicom Group Inc. 3,400 269,238
The Servicemaster Company 25,500 409,594
Tribune Company 18,800 935,300
Wal-Mart Stores, Inc. 20,100 956,005
------------------------------------------------------------------------
TOTAL 7,743,306
------------------------------------------------------------------------
<PAGE>
SEPTEMBER 30, 1999
GROWTH STOCK FUND
Shares/Par Market Value
------------------------------------------------------------------------
CONSUMER STAPLES (12.8%)
Anheuser-Busch Companies, Inc. 7,400 $518,463
The Dial Corporation 20,900 532,950
Hershey Foods Corporation 4,100 199,619
<F1> Keebler Foods Company 22,700 678,163
Kimberly-Clark Corporation 8,100 425,250
McDonald's Corporation 12,600 541,800
The Pepsi Bottling Group, Inc. 16,900 288,356
PepsiCo, Inc. 18,000 544,500
Procter & Gamble Company 7,800 731,250
The Quaker Oats Company 5,900 365,063
Time Warner Inc. 5,300 321,975
Unilever N.V. 8,125 553,515
<F1> Viacom, Inc. 7,600 321,100
Walgreen Company 35,700 905,887
Wendy's International, Inc. 6,000 158,250
------------------------------------------------------------------------
TOTAL 7,086,141
------------------------------------------------------------------------
ENERGY (4.5%)
BP Amoco PLC, ADR 4,600 509,738
Chevron Corporation 1,700 150,875
Conoco Inc. 14,500 396,938
EOG Resources, Inc. 8,000 170,000
Exxon Corporation 5,800 440,438
Mobil Corporation 3,100 312,325
Schlumberger Limited 2,100 130,855
Texaco, Inc. 3,900 246,187
Transocean Offshore Inc. 2,800 85,750
------------------------------------------------------------------------
TOTAL 2,443,106
------------------------------------------------------------------------
FINANCE (6.9%)
Ambac Financial Group, Inc. 7,000 331,625
American International Group, Inc. 800 69,550
Bank of America Corporation 1,400 77,963
Bank of New York Company, Inc. 12,700 424,656
Chase Manhattan Corporation 8,400 633,150
Citigroup, Inc. 9,175 403,700
Fifth Third Bancorp 6,700 407,653
The Goldman Sachs Group, Inc. 5,700 347,700
<F1> Labranche & Co, Inc. 23,600 264,025
Morgan Stanley, Dean Witter,
Discover & Co. 7,700 686,744
U.S. Bancorp 6,000 181,125
------------------------------------------------------------------------
TOTAL 3,827,891
------------------------------------------------------------------------
Shares/Par Market Value
------------------------------------------------------------------------
HEALTHCARE (7.2%)
Bristol-Myers Squibb Company 11,500 $776,250
Eli Lilly & Company 5,200 332,800
<F1> Guidant Corporation 6,000 321,750
Johnson & Johnson 5,800 532,875
Medtronic, Inc. 18,400 653,200
Merck & Co., Inc. 7,200 466,650
Pfizer, Inc. 12,300 442,031
Pharmacia & Upjohn, Inc. 3,700 183,613
Warner-Lambert Company 4,400 292,050
------------------------------------------------------------------------
TOTAL 4,001,219
------------------------------------------------------------------------
TECHNOLOGY (20.9%)
<F1> Amdocs Limited 2,500 52,500
<F1> America Online, Inc. 3,900 405,600
<F1> Cisco Systems, Inc. 16,900 1,158,706
<F1> Concord EFS, Inc. 20,100 414,563
Electronic Data Systems Corporation 12,600 667,013
<F1> EMC Corporation 2,800 200,025
<F1> Fiserv, Inc. 35,325 1,148,063
Hewlett-Packard Company 6,200 570,400
Intel Corporation 10,700 795,144
International Business
Machines Corporation 11,300 1,371,538
Lucent Technologies, Inc. 12,700 823,913
<F1> Microsoft Corporation 17,200 1,557,675
Nortel Networks Corporation 14,600 744,600
<F1> Sun Microsystems, Inc. 3,500 325,500
Texas Instruments, Incorporated 6,600 542,850
<F1> TIBCO Software, Inc. 14,100 424,321
W.W. Grainger, Inc. 8,500 408,530
------------------------------------------------------------------------
TOTAL 11,610,941
------------------------------------------------------------------------
TRANSPORTATION (3.2%)
<F1> AMR Corporation 7,400 403,300
Canadian National Railway Company 14,000 424,375
<F1> FDX Corporation 7,400 286,750
<F1> Midwest Express Holdings, Inc. 12,750 333,891
Southwest Airlines Co. 21,150 321,214
------------------------------------------------------------------------
TOTAL 1,769,530
------------------------------------------------------------------------
UTILITIES (1.8%)
Enron Corp. 24,400 1,006,500
------------------------------------------------------------------------
TOTAL COMMON STOCK 47,360,671
========================================================================
<PAGE>
M A S O N S T R E E T F U N D S
GROWTH STOCK FUND
Shares/Par Market Value
------------------------------------------------------------------------
MONEY MARKET INVESTMENTS (14.5%)
Federal Government and Agencies (1.1%)
<F2> Federal Home Loan Mortgage Corp.,
5.54%, 1/20/00 600,000 $589,314
FINANCE LESSOR (8.2%)
<F2> Asset Securitization,
5.33%, 10/20/99 1,300,000 1,296,343
<F2> National Rural Cooperative
Finance Corp., 5.80%, 1/25/00 1,300,000 1,275,807
Receivable Capital Trust,
5.46%, 10/13/99 1,000,000 998,180
Triple A One Funding,
5.40%, 10/6/99 1,000,000 999,250
------------------------------------------------------------------------
TOTAL 4,569,580
------------------------------------------------------------------------
PERSONAL CREDIT INSTITUTIONS (2.9%)
<F2> General Electric Capital
Corporation, 5.30%, 10/28/99 1,100,000 1,095,628
Variable Funding Capital Corp.,
5.60%, 10/1/99 500,000 500,000
------------------------------------------------------------------------
TOTAL 1,595,628
------------------------------------------------------------------------
PHONE COMMUNICATIONS (2.3%)
<F2> U.S. West Communications,
5.37%, 10/14/99 1,300,000 1,297,479
------------------------------------------------------------------------
TOTAL MONEY MARKET INVESTMENTS 8,052,001
=========================================================================
TOTAL INVESTMENTS (99.8%)
(Cost $41,916,970)<F3> 55,412,672
=========================================================================
OTHER ASSETS, LESS LIABILITIES (0.2%) 95,890
=========================================================================
TOTAL NET ASSETS (100.0%) $55,508,562
=========================================================================
<F1> Non-Income Producing
<F2> Partially held by the custodian in a segregated account as collateral for
open futures positions. Information regarding open futures contracts as of
September 30, 1999 is summarized below:
Number of Expiration Unrealized
Issuer Contracts Date Depreciation
-----------------------------------------------------------------------
S&P 500/R Stock Index
(Total notional value at
9/30/99, $7,131,400) 21 12/99 $315,850
<F3> At September 30, 1999, the aggregate cost of securities for federal income
tax purposes was $41,916,970 and the net unrealized appreciation of
investments based on that cost was $13,495,702 which is comprised of
$14,888,508 aggregate gross unrealized appreciation and $1,392,806
aggregate gross unrealized depreciation.
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
SEPTEMBER 30, 1999
GROWTH AND INCOME STOCK FUND
M A S O N S T R E E T F U N D S
- ----------------------------
GROWTH AND INCOME STOCK FUND
- ----------------------------
- -------------------------------------------------------------------------------
OBJECTIVE: To seek long-term growth of capital and income by investing
primarily in dividend-paying common stocks.
PORTFOLIO: Primarily common stocks of medium and large companies identified as
strong candidates for significant long-term returns.
STRATEGY: To actively manage a portfolio of selected equity securities with a
goal of out-performing the total return of the Standard & Poor's 500 Composite
Stock Price Index ("S&P 500/R Index").
NET ASSETS: $49.0 million
- -------------------------------------------------------------------------------
The Growth and Income Fund invests mainly in large-capitalization stocks, with a
focus on seeking the best values in the market based on long-term earnings
forecasts. A sector balance very close to that of the S&P 500/R Index is
normally maintained, with the emphasis on undervalued stocks within each sector;
a valuation discipline mandates the sale of stocks regarded as overvalued.
The Growth and Income Stock Fund has posted disappointing performance over the
last year. Market trends, with performance concentrated in technology stocks and
large growth companies have been at odds with this Fund's value-oriented
investment style, which focuses on selecting the securities within each industry
group that appear to be most undervalued. In addition, several major holdings
have experienced major earnings problems and consequent stock declines.
In response to this situation, the Fund's managers have modified the portfolio,
while remaining true to the overall value orientation. The mix of holdings is
being altered to improve the overall quality of holdings. The present emphasis
on the large-capitalization names that are prominent in the market indices will
be maintained, particularly in the technology area. Other selections will be
made from stocks that are undervalued because of temporary earnings problems or
other situations that seem likely to be reversed, with a sharp focus on high-
quality companies with long-term potential for profitable growth.
The Growth and Income Stock Fund is managed for Northwestern Mutual Investment
Services, LLC by J. P. Morgan Investment Management, Inc.
SECTOR ALLOCATION
9/30/99
Technology 21%
Finance 16%
Basic Materials/ Capital Goods 15%
Consumer Staples 11%
Consumer Cyclicals 8%
Communication Services 8%
Healthcare 7%
Energy 7%
Other Industries 5%
Short-term Investments 2%
TOP 10 EQUITY HOLDINGS
9/30/99
Company % Net Assets
- --------------------------------------------------
Microsoft Corporation 4.6%
Tyco International Ltd. 4.2%
Sun Microsystems, Inc. 2.6%
Cisco Systems, Inc. 2.6%
Philip Morris Companies, Inc. 2.5%
Mobil Corporation 2.4%
Bank of America Corporation 2.3%
U.S. Bancorp 2.3%
Intel Corporation 2.3%
MCI WorldCom, Inc. 2.2%
<PAGE>
M A S O N S T R E E T F U N D S
GROWTH AND INCOME STOCK FUND
PERFORMANCE RELATIVE TO S&P 500/R INDEX
<TABLE>
<CAPTION>
3/31/97 9/30/97 3/31/98 9/30/98 3/31/99 9/30/99
- -------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
GROWTH & INCOME STOCK FUND CLASS A 9,524 12,152 13,514 12,167 15,013 14,210
GROWTH & INCOME STOCK FUND CLASS B 10,000 12,720 14,096 12,649 15,563 14,683
GROWTH & INCOME STOCK FUND CLASS B REDEMPTION VALUE 14,383
S&P 500/R INDEX 10,000 12,618 14,787 13,747 17,503 17,564
</TABLE>
TOTAL RETURN Average
Annual
One Since
For the periods ended September 30, 1999 Year Inception<F1>
- -------------------------------------------------------------------------
Growth and Income Stock Fund
(Class A - without initial sales charge) 16.79% 17.35%
- -------------------------------------------------------------------------
S&P 500/R Index 27.77% 25.26%
- -------------------------------------------------------------------------
<F1>Fund inception date is 3/31/97. Returns are annualized.
The Standard & Poor's 500 Composite Stock Price Index is an unmanaged index of
500 selected common stocks, most of which are listed on the New York Stock
Exchange. The index is heavily weighted toward stocks with large market
capitalizations and represents approximately two-thirds of the total market
value of all domestic common stocks. The index cannot be invested in directly
and does not include sales charges.
This graph assumes an initial investment of $10,000 made in Class A and Class B
shares, with all sales charges on March 31, 1997 (commencement of operations).
Returns shown include fee waivers and deductions for all Fund expenses. In the
absence of fee waivers, total return would be reduced. Past performance is not
predictive of future performance. Investment return and principal value will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. Returns on p. 3 reflect the maximum sales charge for Class
A and a 5% contingent deferred sales charge for Class B One Year and 3% for
Since Inception.
SCHEDULE OF INVESTMENTS
Shares Market Value
-----------------------------------------------------------------------
COMMON STOCK (97.5%)
BASIC MATERIALS (7.7%)
Allegheny Teledyne, Inc. 23,800 $401,625
Bowater Inc. 4,100 215,250
Monsanto Company 28,500 1,017,094
Rohm and Haas Company 21,700 783,913
<F1> Smurfit-Stone Container Corporation 31,402 679,068
Temple-Inland Inc. 3,300 199,650
USEC Inc. 22,700 232,675
USX Corporation 9,700 249,775
----------------------------------------------------------------------
TOTAL 3,779,050
----------------------------------------------------------------------
CAPITAL GOODS (7.3%)
Cooper Industries, Inc. 10,800 504,900
Deere & Company 6,000 232,125
<F1> Republic Services, Inc. 42,100 457,838
Tyco International Ltd. 19,728 2,036,916
Waste Management, Inc. 17,805 342,746
----------------------------------------------------------------------
TOTAL 3,574,525
----------------------------------------------------------------------
COMMUNICATION SERVICES (8.3%)
Ameritech Corporation 9,900 665,156
AT&T Corporation 11,000 478,500
Bell Atlantic Corporation 5,100 343,294
GTE Corporation 7,600 584,250
<F1> Level 3 Communications, Inc. 3,600 187,988
<F1> MCI WorldCom, Inc. 14,670 1,054,406
SBC Communications, Inc. 14,500 740,406
----------------------------------------------------------------------
TOTAL 4,054,000
----------------------------------------------------------------------
CONSUMER CYCLICALS (8.4%)
<F1> Abercrombie & Fitch Co. 8,800 299,750
<F1> Cendant Corporation 18,159 322,322
<F1> Federated Department Stores, Inc. 7,200 314,550
Gap, Inc. 5,100 163,200
International Game Technology 18,700 336,600
<F1> Jones Apparel Group, Inc. 15,100 434,125
<F1> Lear Corporation 8,000 281,500
Mattel, Inc. 21,800 414,200
The News Corporation Limited, ADR 17,200 489,125
Service Corporation International 11,100 117,244
TJX Companies, Inc. 12,000 336,750
Wal-Mart Stores, Inc. 12,400 589,775
----------------------------------------------------------------------
TOTAL 4,099,141
----------------------------------------------------------------------
CONSUMER STAPLES (10.9%)
Clorox Company 4,000 153,000
Coca Cola Enterprises Inc. 10,400 234,650
Gillette Company 11,500 390,281
<PAGE>
SEPTEMBER 30, 1999
GROWTH AND INCOME STOCK FUND
Shares Market Value
------------------------------------------------------------------------
CONSUMER STAPLES (CONTINUED)
Kimberly-Clark Corporation 7,000 $367,500
PepsiCo, Inc. 28,800 871,200
Philip Morris Companies, Inc. 35,700 1,220,494
Procter & Gamble Company 7,300 684,375
<F1> Safeway Inc. 6,700 255,019
The Seagram Company Ltd. 14,200 646,100
<F1> Tele-Communications, Inc. 14,400 534,600
----------------------------------------------------------------------
TOTAL 5,357,219
----------------------------------------------------------------------
ENERGY (6.8%)
Conoco Inc. 27,600 755,550
<F1> Cooper Cameron Corp. 5,400 203,850
<F1> Input/Output, Inc. 42,300 280,238
Mobil Corporation 11,700 1,178,775
Shell Transport & Trading
Company ADR 6,900 313,950
Tosco Corporation 21,500 542,875
----------------------------------------------------------------------
TOTAL 3,275,238
----------------------------------------------------------------------
FINANCE (15.6%)
Aon Corporation 16,200 478,913
Bank of America Corporation 20,563 1,145,102
The CIT Group, Inc. 100 2,056
Citigroup, Inc. 11,500 506,000
Dime Bancorp, Inc. 10,000 175,000
Federal National Mortgage Association 4,500 282,093
First Union Corporation 18,000 640,124
Goldman Sachs Group, Inc. 2,300 140,300
KeyCorp 17,800 459,463
Marsh & McLennan Companies, Inc. 9,400 643,900
Newcourt Credit Group Inc. 54,200 707,988
U.S. Bancorp 37,400 1,129,013
Unumprovident Corp. 19,455 572,707
Washington Mutual, Inc. 17,400 508,950
XL Capital Ltd. 6,200 279,000
----------------------------------------------------------------------
TOTAL 7,670,609
----------------------------------------------------------------------
HEALTHCARE (6.8%)
Abbott Laboratories Inc. 11,900 437,325
American Home Products Corporation 7,800 323,700
Bristol-Myers Squibb Company 9,300 627,750
Eli Lilly & Company 6,200 396,800
<F1> Forest Laboratories, Inc. 14,200 598,175
<F1> Genzyme Corporation (General Division) 6,600 297,413
<F1> HEALTHSOUTH Corporation 14,500 87,905
Warner-Lambert Company 8,700 577,463
----------------------------------------------------------------------
TOTAL 3,346,531
----------------------------------------------------------------------
Shares Market Value
----------------------------------------------------------------------
TECHNOLOGY (21.2%)
<F1> America Online, Inc. 2,800 $291,200
<F1> Applied Materials, Inc. 4,800 373,800
<F1> BMC Software, Inc. 3,800 271,938
<F1> Cisco Systems, Inc. 18,650 1,278,690
<F1> Dell Computer Corp. 5,500 229,969
<F1> EMC Corporation 5,200 371,475
<F1> Intel Corporation 15,000 1,114,688
International Business
Machines Corporation 7,200 873,900
Lucent Technologies, Inc. 7,550 489,806
<F1> Microsoft Corporation 25,000 2,264,062
Motorola, Inc. 3,000 264,000
<F1> Oracle Corporation 11,050 502,775
<F1> Quantum Corporation 7,200 101,250
<F1> Sun Microsystems, Inc. 13,800 1,283,400
Texas Instruments, Incorporated 8,500 699,125
---------------------------------------------------------------------------
TOTAL 10,410,078
---------------------------------------------------------------------------
TRANSPORTATION (2.1%)
CNF Transportation Inc. 6,200 230,950
Union Pacific Corporation 17,100 821,869
----------------------------------------------------------------------
TOTAL 1,052,819
----------------------------------------------------------------------
UTILITIES (2.4%)
Columbia Energy Group 12,500 692,187
Dominion Resources Inc. 6,600 297,824
Northern States Power Company 5,600 120,750
P P & L Resources, Inc. 3,100 83,894
----------------------------------------------------------------------
TOTAL 1,194,655
----------------------------------------------------------------------
TOTAL COMMON STOCK 47,813,865
======================================================================
MONEY MARKET INVESTMENTS (1.4%)
PERSONAL CREDIT INSTITUTIONS (1.4%)
General Electric Capital Corporation,
5.31%, 10/13/99 700,000 698,761
----------------------------------------------------------------------
TOTAL INVESTMENTS (98.9%)
(Cost $48,856,093)<F2> 48,512,626
======================================================================
OTHER ASSETS, LESS LIABILITIES (1.1%) 515,744
======================================================================
TOTAL NET ASSETS (100.0%) $49,028,370
======================================================================
<F1> Non-Income Producing
ADR - American Depository Receipt
<F2> At September 30, 1999, the aggregate cost of securities for federal income
tax purposes was $48,856,093 and the net unrealized depreciation of
investments based on that cost was $343,467 which is comprised of
$5,321,735 aggregate gross unrealized appreciation and $5,665,202 aggregate
gross unrealized depreciation.
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
M A S O N S T R E E T F U N D S
INDEX 500 STOCK FUND
- --------------------
INDEX 500 STOCK FUND
- --------------------
- ------------------------------------------------------------------------------
OBJECTIVE: To seek investment results that approximate the performance of the
S&P 500/R Index, by investing in stocks included in the S&P 500/R Index. Because
the S&P 500/R Index is an unmanaged index, its return does not reflect the
deduction of expenses that would exist with a mutual fund.
FOCUS: To capture broad market performance, at low cost, by investing in a
portfolio modeled after a broadly based stock index.
NET ASSETS: $98.2 million
- ------------------------------------------------------------------------------
The Index 500/R Stock Fund is designed to achieve results that approximate the
performance of the Standard & Poor's 500/R Composite Stock Price Index. This
composite of 500 stocks of large companies, compiled by Standard & Poor's
Corporation, is generally regarded as a good proxy for the overall U.S. equity
market. The Fund therefore enables investors to participate in overall
performance of the U.S. equity market. The Fund continues to achieve the
objective of matching the results of the S&P 500/R before expenses.
SECTOR ALLOCATION
9/30/99
Technology 24%
Finance 14%
Consumer Staples 12%
Other Industries 12%
Basic Materials/Capital Goods 12%
Healthcare 10%
Consumer Cyclicals 9%
Energy 6%
Index Futures and Other Assets 1%
TOP 10 EQUITY HOLDINGS
9/30/99
Company % Net Assets
- ---------------------------------------------------
Microsoft Corporation 4.3%
General Electric Company 3.6%
Intel Corporation 2.3%
International Business Machines Corporation 2.1%
Cisco Systems, Inc. 2.1%
Wal-Mart Stores, Inc. 2.0%
Lucent Technologies, Inc. 1.9%
Exxon Corporation 1.7%
Merck & Co., Inc. 1.4%
Citigroup, Inc. 1.4%
PERFORMANCE RELATIVE TO S&P 500/R INDEX
<TABLE>
<CAPTION>
3/31/97 9/30/97 3/31/98 9/30/98 3/31/99 9/30/99
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
INDEX 500 STOCK FUND CLASS A 9,524 11,952 13,938 12,933 16,429 16,429
INDEX 500 STOCK FUND CLASS B 10,000 12,510 14,544 13,450 17,042 16,981
INDEX 500 STOCK FUND CLASS B
REDEMPTION VALUE 16,681
S&P 500/R INDEX 10,000 12,618 14,787 13,747 17,503 17,564
</TABLE>
TOTAL RETURN Average
Annual
One Since
For the periods ended September 30, 1999 Year Inception<F1>
- -------------------------------------------------------------------
Index 500 Stock Fund
(Class A - without initial sales charge) 27.03% 24.36%
- -------------------------------------------------------------------
S&P 500/R Index 27.77% 25.26%
- -------------------------------------------------------------------
<F1>Fund inception date is 3/31/97. Returns are annualized.
The Standard & Poor's 500 Composite Stock Price Index is an unmanaged index of
500 selected common stocks, most of which are listed on the New York Stock
Exchange. The index is heavily weighted toward stocks with large market
capitalizations and represents approximately two-thirds of the total market
value of all domestic common stocks. The index cannot be invested in directly
and does not include sales charges.
This graph assumes an initial investment of $10,000 made in Class A and Class B
shares, with all sales charges on March 31, 1997 (commencement of operations).
Returns shown include fee waivers and deductions for all Fund expenses. In the
absence of fee waivers, total return would be reduced. Past performance is not
predictive of future performance. Investment return and principal value will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. Returns on p. 3 reflect the maximum sales charge for Class
A and a 5% contingent deferred sales charge for Class B One Year and 3% for
Since Inception.
<PAGE>
September 30, 1999
INDEX 500 STOCK FUND
SCHEDULE OF INVESTMENTS
Shares/Par Market Value
----------------------------------------------------------------------
COMMON STOCK (98.8%)
BASIC MATERIALS (3.2%)
Air Products & Chemicals, Inc. 2,100 $61,030
Alcan Aluminum Limited 2,100 65,624
Alcoa Inc. 3,400 211,012
Allegheny Teledyne, Inc. 1,800 30,374
Archer Daniels Midland Company 5,650 68,859
ASARCO, Inc. 400 10,725
Barrick Gold Corporation 3,600 78,300
Bemis Company, Inc. 500 16,938
<F1> Bethlehem Steel Corporation 1,200 8,850
Boise Cascade Corporation 500 18,219
Champion International 900 46,238
Cyprus Amax Minerals Co. 800 15,700
Dow Chemical Company 2,000 227,250
E.I. du Pont de Nemours & Company 9,000 547,875
Eastman Chemical Company 700 28,000
Ecolab, Inc. 1,200 40,950
Engelhard Corp. 1,200 21,825
<F1> FMC Corporation 300 14,475
<F1> Freeport-McMoRan Copper & Gold, Inc. 1,500 23,344
Georgia Pacific Corp. 1,600 64,800
Great Lakes Chemical 500 19,031
Hercules Inc. 1,000 28,625
Homestake Mining Company 2,400 22,050
<F1> Inco Limited 1,800 38,475
International Flavors & Fragrances, Inc. 1,000 34,500
International Paper Company 3,791 182,205
Louisiana Pacific Corporation 1,000 15,625
The Mead Corporation 900 30,938
Monsanto Company 5,800 206,988
Nalco Chemical Company 600 30,300
Newmont Mining Corporation 1,558 40,313
Nucor Corp. 800 38,100
Phelps Dodge Corporation 500 27,531
Pioneer Hi-Bred International 2,200 87,588
Placer Dome Inc. 3,000 44,625
Potlatch Corporation 300 12,356
PPG Industries, Inc. 1,600 96,000
Praxair 1,500 69,000
Reynolds Metals Company 600 36,225
Rohm and Haas Company 2,005 72,431
Sigma-Aldrich Corp. 900 28,575
Temple-Inland Inc. 500 30,250
Union Carbide Corporation 1,200 68,175
USX-U.S. Steel Group, Inc. 800 20,600
Vulcan Materials Company 900 32,963
<F1> W.R. Grace & Co. 600 9,638
Westvaco Corporation 900 23,063
Shares/Par Market Value
----------------------------------------------------------------------
BASIC MATERIALS (CONTINUED)
Weyerhaeuser Company 1,800 $103,725
Willamette Industries, Inc. 1,000 43,125
Worthington Industries 800 13,600
----------------------------------------------------------------------
TOTAL 3,107,008
----------------------------------------------------------------------
CAPITAL GOODS (8.7%)
<F1> Allied Waste Industries, Inc. 1,700 19,868
AlliedSignal, Inc. 5,100 305,680
Avery Dennison Corporation 1,000 52,750
B.F. Goodrich Company 1,000 29,000
Ball Corporation 300 13,219
Boeing Company 8,970 382,346
Briggs & Stratton Corporation 200 11,675
Case Corporation 700 34,869
Caterpillar, Inc. 3,300 180,881
Cooper Industries, Inc. 900 42,075
Corning, Inc. 2,200 150,838
Crane Co. 650 14,584
Crown Cork & Seal Company, Inc. 1,100 26,675
Cummins Engine Company, Inc. 400 19,925
Danaher Corporation 1,300 68,494
Deere & Company 2,100 81,244
Dover Corporation 2,000 81,750
Eaton Corporation 700 60,419
Emerson Electric Co. 4,000 252,750
Fluor Corporation 700 28,175
Foster Wheeler Corporation 400 4,825
General Dynamics Corporation 1,800 112,388
General Electric Company 30,100 3,568,731
Honeywell, Inc. 1,200 133,575
Illinois Tool Works, Inc. 2,300 171,494
<F1> Ingersoll-Rand Company 1,550 85,153
ITT Industries Inc. 800 25,450
Johnson Controls, Inc. 800 53,050
Lockheed Martin Corporation 3,600 117,675
McDermott International, Inc. 500 10,125
Milacron Inc. 300 5,325
Millipore Corp. 400 15,025
Minnesota Mining & Manufacturing Co. 3,700 355,431
NACCO Industries, Inc. 100 6,988
National Service Industries, Inc. 400 12,600
<F1> Navistar International Corporation 600 27,900
Northrop Grumman Corporation 600 38,138
<F1> Owens-Illinois, Inc. 1,400 27,738
Paccar Inc. 700 35,613
Pall Corporation 1,100 25,506
Parker-Hannifin Corporation 950 42,572
Pitney Bowes Inc. 2,500 152,344
<PAGE>
M A S O N S T R E E T F U N D S
INDEX 500 STOCK FUND
Shares/Par Market Value
----------------------------------------------------------------------
CAPITAL GOODS (CONTINUED)
Rockwell International Corp. 1,800 $94,500
<F1> Sealed Air Corporation 814 41,768
<F1> Solectron Corporation 2,500 179,531
Tenneco Inc. 1,600 27,200
Textron Inc. 1,400 108,325
<F1> Thermo Electron Corporation 1,500 20,156
Thomas & Betts Corporation 500 25,500
Timken Company 600 9,675
Tyco International Ltd. 7,510 775,408
United Technologies Corp. 4,400 260,975
Waste Management, Inc. 5,657 108,897
----------------------------------------------------------------------
TOTAL 8,536,798
----------------------------------------------------------------------
COMMUNICATION SERVICES (8.2%)
ALLTEL Corporation 2,800 197,050
Ameritech Corporation 10,100 678,593
AT&T Corporation 29,331 1,275,898
Bell Atlantic Corporation 14,270 960,549
Bellsouth Corporation 17,400 783,000
CenturyTel Inc. 1,300 52,813
<F1> Global Crossing Ltd. 3,280 86,920
GTE Corporation 9,000 691,875
<F1> MCI WorldCom, Inc. 17,148 1,232,513
<F1> Nextel Communications, Inc. 2,700 183,094
SBC Communications, Inc. 18,132 925,865
Sprint Corporation 8,000 434,000
<F1> Sprint PCS 4,050 301,978
US WEST, Inc. 4,681 267,110
----------------------------------------------------------------------
TOTAL 8,071,258
----------------------------------------------------------------------
CONSUMER CYCLICALS (8.8%)
American Greetings Corp. 600 15,450
Armstrong World Industries Inc. 400 17,974
<F1> Autozone, Inc. 1,400 39,287
<F1> Best Buy Co., Inc. 1,900 117,918
Black & Decker Corporation 800 36,550
Brunswick Corporation 800 19,900
Carnival Corporation 5,600 243,600
<F1> Cendant Corporation 6,572 116,652
Centex Corporation 500 14,780
Circuit City Stores, Inc. 1,900 80,155
<F1> Consolidated Stores Corporation 1,000 22,062
Cooper Tire & Rubber Company 700 12,337
<F1> Costco Wholesale Corp. 2,000 144,000
Dana Corporation 1,578 58,582
Dayton Hudson Corporation 4,100 246,256
Delphi Automotive Systems Corporation 5,204 83,589
Dillard's, Inc. 1,000 20,313
Shares/Par Market Value
----------------------------------------------------------------------
CONSUMER CYCLICALS (CONTINUED)
Dollar General Corp. 2,012 $62,121
Dow Jones & Company, Inc. 800 42,700
Dun & Bradstreet Corporation 1,500 44,813
<F1> Federated Department Stores, Inc. 1,900 83,006
Fleetwood Enterprises, Inc. 300 6,056
Ford Motor Company 11,200 562,100
<F1> Fruit of the Loom, Inc. 700 2,319
Gannet Company Inc. 2,600 179,888
Gap, Inc. 7,962 254,784
General Motors Corp. 6,000 377,625
Genuine Parts Company 1,650 43,828
Goodyear Tire & Rubber Company 1,400 67,375
H & R Block, Inc. 900 39,094
Harcourt General 700 29,138
<F1> Harrahs Entertainment 1,200 33,300
Hasbro Inc. 1,850 39,659
Hilton Hotels Corporation 2,400 23,700
Home Depot, Inc. 13,600 933,300
IMS Health Incorporated 2,900 66,156
The Interpublic Group
of Companies, Inc. 2,600 106,925
J.C. Penney Company, Inc. 2,400 82,500
Jostens, Inc. 300 5,738
Kaufman & Broad Home Corp. 400 8,250
<F1> Kmart Corporation 4,600 53,763
Knight-Ridder, Inc. 700 38,413
<F1> Kohl's Corporation 1,500 99,188
Laidlaw Transportation Limited 3,000 20,250
The Limited, Inc. 1,942 74,282
Liz Claiborne, Inc. 600 18,600
Lowe's Companies, Inc. 3,400 165,750
Marriott International 2,300 75,181
Masco Corporation 4,100 127,100
Mattel, Inc. 3,800 72,200
May Department Stores Company 3,050 111,134
Maytag Corporation 800 26,650
McGraw-Hill Companies Inc. 1,800 87,075
Meredith Corporation 500 18,156
<F1> Mirage Resorts, Incorporated 1,800 25,313
The New York Times Company 1,600 60,000
Nike, Inc. 2,600 147,875
Nordstrom, Inc. 1,300 35,100
<F1> Office Depot, Inc. 3,400 34,638
Omnicom Group Inc. 1,600 126,700
Owens Corning 500 10,844
Pep Boys - Manny, Moe & Jack 500 7,438
Pulte Corporation 400 8,700
<F1> Reebok International Ltd. 500 5,344
<PAGE>
September 30, 1999
INDEX 500 STOCK FUND
Shares/Par Market Value
----------------------------------------------------------------------
CONSUMER CYCLICALS (CONTINUED)
Russell Corp. 300 $4,256
Sears Roebuck & Co. 3,500 109,813
Service Corporation International 2,500 26,406
Sherwin-Williams Company 1,600 33,500
Snap-On Inc. 600 19,500
Springs Industries, Inc. 200 6,788
The Stanley Works 800 20,150
<F1> Staples, Inc. 4,300 93,794
Tandy Corporation 1,800 93,038
Times Mirror Company 700 46,069
TJX Companies, Inc. 3,000 84,188
<F1> Too, Inc. 263 4,718
<F1> Toys "R" Us, Inc. 2,300 34,500
Tribune Company 2,200 109,450
TRW, Inc. 1,100 54,725
VF Corporation 1,100 34,100
Wal-Mart Stores, Inc. 41,000 1,950,063
Whirlpool Corporation 700 45,719
----------------------------------------------------------------------
TOTAL 8,604,251
----------------------------------------------------------------------
CONSUMER STAPLES (11.9%)
Adolph Coors Co. 300 16,237
Alberto-Culver Company 500 11,562
Albertson's, Inc. 3,912 154,768
Anheuser-Busch Companies, Inc. 4,400 308,274
Avon Products, Inc. 2,400 59,550
BESTFOODS 2,600 126,100
Brown-Forman Corporation 600 37,424
Campbell Soup Company 4,000 156,500
Cardinal Health, Inc. 2,550 138,974
CBS Corporation 6,600 305,250
<F1> Clear Channel Communications, Inc. 3,100 247,612
Clorox Company 2,200 84,150
The Coca-Cola Company 22,700 1,091,019
Coca Cola Enterprises Inc. 3,900 87,994
Colgate-Palmolive Co. 5,400 247,050
Comcast Corporation 6,800 271,150
Conagra, Inc. 4,500 101,531
CVS Corporation 3,600 146,925
Darden Restaurant, Inc. 1,200 23,475
Deluxe Corp. 700 23,800
Fort James Corporation 2,000 53,375
Fortune Brands, Inc. 1,500 48,375
General Mills, Inc. 1,400 113,575
Gillette Company 10,200 346,163
Great Atlantic & Pacific Tea Co., Inc. 400 12,125
H.J. Heinz Company 3,300 141,900
Hershey Foods Corporation 1,300 63,294
Shares/Par Market Value
----------------------------------------------------------------------
CONSUMER STAPLES (CONTINUED)
Kellogg Company 3,700 $138,519
Kimberly-Clark Corporation 4,900 257,250
<F1> King World Productions, Inc. 700 26,250
<F1> The Kroger Co. 7,600 167,675
Longs Drug Stores Corp. 400 11,950
McDonald's Corporation 12,500 537,500
McKesson HBOC, Inc. 2,521 73,109
<F1> MediaOne Group, Inc. 5,600 382,550
Nabisco Group Holdings Corp. 3,000 45,000
Newell Rubbermaid Inc. 2,645 75,548
PepsiCo, Inc. 13,600 411,400
Philip Morris Companies, Inc. 22,200 758,963
Procter & Gamble Company 12,200 1,143,750
The Quaker Oats Company 1,200 74,250
R.R. Donnelley & Sons Company 1,200 34,650
Ralston Purina Group 3,000 83,438
Rite Aid Corporation 2,400 33,150
<F1> Safeway Inc. 4,600 175,088
Sara Lee Corporation 8,300 194,531
The Seagram Company Ltd. 3,900 177,450
Supervalue Inc. 1,300 28,356
Sysco Corporation 3,000 105,188
Time Warner Inc. 11,000 668,250
<F1> Tricon Global Restaurants, Inc. 1,430 58,541
Tupperware 500 10,125
Unilever N.V. 5,253 357,861
UST Incorporated 1,600 48,300
<F1> Viacom, Inc. 6,400 270,400
Walgreen Company 9,200 233,450
Walt Disney Company 19,000 491,625
Wendy's International, Inc. 1,100 29,013
Winn-Dixie Stores, Inc. 1,400 41,563
Wm. Wrigley Jr. Company 1,100 75,694
----------------------------------------------------------------------
TOTAL 11,638,539
----------------------------------------------------------------------
ENERGY (6.2%)
Amerada Hess Corporation 800 49,000
Anadarko Petroleum Corporation 1,100 33,618
Apache Corporation 1,000 43,187
Ashland, Inc. 700 23,537
Atlantic Richfield Company 3,000 265,874
Baker Hughes, Inc. 3,010 87,290
Burlington Resource, Inc. 1,605 58,984
Chevron Corporation 6,000 532,500
Conoco Inc. 5,800 158,775
Exxon Corporation 22,400 1,701,000
Halliburton Company 4,100 168,100
Helmerich & Payne, Inc. 500 12,656
<PAGE>
M A S O N S T R E E T F U N D S
INDEX 500 STOCK FUND
Shares/Par Market Value
----------------------------------------------------------------------
ENERGY (CONTINUED)
Kerr-McGee Corporation 795 $43,775
Mobil Corporation 7,200 725,400
Occidental Petroleum Corporation 3,200 74,000
Phillips Petroleum Company 2,300 112,125
<F1> Rowan Companies, Inc. 800 13,000
Royal Dutch Petroleum Co. 19,800 1,169,438
Schlumberger Limited 5,000 311,563
Sunoco, Inc. 800 21,900
Texaco Inc. 4,900 309,313
Union Pacific Resource Group 2,300 36,944
Unocal Corp. 2,200 81,538
USX-Marathon Group 2,800 81,900
----------------------------------------------------------------------
TOTAL 6,115,417
----------------------------------------------------------------------
FINANCE (14.0%)
Aflac Incorporated 2,500 104,687
Allstate Corporation 7,400 184,537
American Express Company 4,200 565,424
American General Corporation 2,310 145,962
American International Group, Inc. 14,246 1,238,511
AmSouth Bancorporation 1,600 37,500
Aon Corporation 2,325 68,732
Associates First Capital Corporation 6,744 242,783
Banc One Corporation 10,858 377,993
Bank of America Corp. 16,079 895,398
Bank of New York Company, Inc. 7,000 234,062
BankBoston Corporation 2,700 117,113
BB&T Corporation 2,900 93,888
The Bear Stearns Companies, Inc. 1,040 39,975
Capital One Financial Corporation 1,800 70,200
The Charles Schwab Corporation 7,500 252,656
Chase Manhattan Corporation 7,800 587,925
The Chubb Corporation 1,600 79,700
CIGNA Corporation 1,900 147,725
Cincinnati Financial Corporation 1,500 56,297
Citigroup, Inc. 31,145 1,370,380
Comerica, Inc. 1,450 73,406
Conseco Inc. 2,933 56,644
Countrywide Credit Industries, Inc. 1,000 32,250
Federal Home Loan Mortgage Corp. 6,400 332,800
Federal National Mortgage Association 9,400 589,263
Fifth Third Bankcorp 2,425 147,546
First Union Corporation 8,920 317,218
Firstar Corporation 9,236 236,673
Fleet Financial Group Inc. 5,300 194,113
Franklin Resources Inc. 2,300 70,725
Golden West Financial Corporation 500 49,125
Hartford Financial Services Group Inc. 2,100 85,838
Shares/Par Market Value
----------------------------------------------------------------------
FINANCE (CONTINUED)
Household International Inc. 4,419 $177,312
Huntington Bancshares, Inc. 2,102 55,834
J.P. Morgan & Company, Inc. 1,600 182,800
Jefferson-Pilot Corp. 1,000 63,188
KeyCorp 4,100 105,831
Lehman Brothers Holdings, Inc. 1,100 64,144
Lincoln National Corporation 1,800 67,613
Loews Corp. 1,000 70,188
Marsh & McLennan Companies, Inc. 2,400 164,400
MBIA, Inc. 900 41,963
MBNA Corp. 7,350 167,672
Mellon Bank Corporation 4,800 162,000
Merrill Lynch & Co. 3,400 228,438
MGIC Investment Corp. 1,000 47,750
Morgan Stanley, Dean Witter,
Discover & Co. 5,255 468,680
National City Corp. 5,800 154,788
Northern Trust Corp. 1,000 83,500
Paine Webber Group Inc. 1,300 47,125
PNC Bank Corp. 2,800 147,525
Progressive Corporation 700 57,181
Providian Financial Corporation 1,300 102,944
Regions Financial Corporation 2,100 63,000
Republic New York Corporation 1,000 61,438
SAFECO, Inc. 1,300 36,400
SLM Holding Corporation 1,500 64,500
SouthTrust Corporation 1,500 53,813
St. Paul Companies, Inc. 2,082 57,255
State Street Corporation 1,500 96,938
Summit Bancorp. 1,600 51,900
Suntrust Banks Inc. 3,000 197,250
Synovus Financial Corp. 2,450 45,784
Torchmark Corporation 1,200 31,050
U.S. Bancorp 6,659 201,019
Union Planters Corporation 1,300 52,975
UnumProvident Corporation 2,176 64,056
Wachovia Corporation 1,900 149,388
Washington Mutual, Inc. 5,486 160,466
Wells Fargo & Company 15,200 602,300
----------------------------------------------------------------------
TOTAL 13,747,457
----------------------------------------------------------------------
HEALTHCARE (10.1%)
Abbott Laboratories Inc. 14,000 514,500
Aetna, Inc. 1,300 64,024
Allergan Inc. 600 66,000
<F1> Alza Corporation 900 38,530
American Home Products Corporation 12,100 502,150
<F1> Amgen, Inc. 4,700 383,050
<PAGE>
September 30, 1999
INDEX 500 STOCK FUND
Shares/Par Market Value
----------------------------------------------------------------------
HEALTHCARE (CONTINUED)
Bausch & Lomb, Inc. 500 $32,969
Baxter International, Inc. 2,700 162,675
Becton, Dickinson & Company 2,300 64,544
Biomet, Inc. 1,000 26,313
<F1> Boston Scientific Corp. 3,600 88,875
Bristol-Myers Squibb Company 18,300 1,235,250
C.R. Bard, Inc. 500 23,531
Columbia/HCA Healthcare Corporation 5,200 110,175
Eli Lilly & Company 10,100 646,400
<F1> Guidant Corporation 2,800 150,150
<F1> HCR Manor Care Inc. 1,000 17,188
<F1> HEALTHSOUTH Corporation 3,800 23,038
<F1> Humana, Inc. 1,500 10,313
Johnson & Johnson 12,400 1,139,250
Mallinckrodt, Inc. 700 21,131
Medtronic, Inc. 10,800 383,400
Merck & Co., Inc. 21,700 1,406,431
Pfizer, Inc. 35,800 1,286,563
Pharmacia & Upjohn Inc. 4,700 233,238
Schering-Plough Corporation 13,600 593,300
<F1> St. Jude Medical, Inc. 800 25,200
<F1> Tenet Healthcare Corp. 2,900 50,931
United Healthcare Corp. 1,600 77,900
Warner-Lambert Company 7,800 517,725
<F1> Watson Pharmaceutical Inc. 900 27,506
<F1> Wellpoint Health Networks 600 34,200
----------------------------------------------------------------------
TOTAL 9,956,450
----------------------------------------------------------------------
TECHNOLOGY (24.1%)
<F1> 3COM Corporation 3,300 94,874
<F1> ADC Telecommunications, Inc. 1,200 50,324
Adobe Systems, Inc. 600 68,100
<F1> Advanced Micro Devices, Inc. 1,400 24,062
<F1> America Online, Inc. 10,000 1,040,000
<F1> Andrew Corporation 800 13,900
<F1> Apple Computer, Inc. 1,500 94,968
<F1> Applied Materials, Inc. 3,400 264,774
Autodesk, Inc. 500 10,937
Automatic Data Processing, Inc. 5,700 254,362
<F1> BMC Software, Inc. 2,200 157,437
<F1> Cabletron Systems, Inc. 1,600 25,100
<F1> Ceridian Corp. 1,300 32,337
<F1> Cisco Systems, Inc. 29,400 2,015,737
Compaq Computer Corporation 15,685 359,774
Computer Associates International, Inc. 4,900 300,124
<F1> Computer Sciences Corp. 1,500 105,469
<F1> Compuware Corporation 3,400 88,613
<F1> Data General Corporation 500 10,531
Shares/Par Market Value
----------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
<F1> Dell Computer Corp. 23,400 $978,413
EG&G, Inc. 400 15,925
Eastman Kodak Company 3,000 226,313
Electronic Data Systems Corporation 4,500 238,219
<F1> EMC Corporation 9,300 664,369
Equifax, Inc. 1,300 36,563
First Data Corporation 4,000 175,500
<F1> Gateway Inc. 2,900 128,869
<F1> General Instrument Corporation 1,600 77,000
Harris Corporation 700 19,338
Hewlett-Packard Company 9,300 855,600
Ikon Office Solutions 1,400 14,963
<F1> Intel Corporation 30,600 2,273,963
International Business
Machines Corporation 16,700 2,026,963
<F1> KLA-Tencor Corporation 800 52,000
<F1> Lexmark International Group, Inc. 1,200 96,600
<F1> LSI Logic Corp. 1,300 66,950
Lucent Technologies, Inc. 28,035 1,818,771
<F1> Micron Technology 2,300 153,094
<F1> Microsoft Corporation 47,000 4,256,438
Motorola, Inc. 5,600 492,800
<F1> National Semiconductor Corporation 1,500 45,750
<F1> Network Appliance, Inc. 700 50,138
Nortel Networks Corporation 12,260 625,260
<F1> Novell, Inc. 3,100 64,131
<F1> Oracle Corporation 13,275 604,013
<F1> Parametric Technology Company 2,500 33,750
Paychex, Inc. 2,250 76,781
PE Corp.-PE Biosystems Group 900 65,025
<F1> Peoplesoft, Inc. 2,200 37,263
Polaroid Corporation 400 10,400
<F1> Qualcomm Incorporated 1,400 264,863
Raytheon Company - Class B 3,100 153,838
Scientific-Atlanta, Inc. 700 34,694
<F1> Seagate Technology Inc. 2,100 64,706
Shared Medical Systems Corp. 200 9,350
<F1> Silicon Graphics 1,700 18,594
<F1> Sun Microsystems, Inc. 7,100 660,300
Tektronix, Inc. 400 13,400
<F1> Tellabs, Inc. 3,600 204,975
Texas Instruments, Incorporated 7,200 592,200
<F1> Unisys Corporation 2,600 117,325
W.W. Grainger, Inc. 900 43,256
Xerox Corporation 6,100 255,819
----------------------------------------------------------------------
TOTAL 23,725,905
----------------------------------------------------------------------
<PAGE>
M A S O N S T R E E T F U N D S
INDEX 500 STOCK FUND
Shares/Par Market Value
----------------------------------------------------------------------
TRANSPORTATION (0.8%)
<F1> AMR Corporation 1,400 $76,300
Burlington Northern Santa Fe 4,300 118,250
CSX Corporation 2,000 84,750
Delta Air Lines Inc. 1,300 63,050
<F1> FDX Corporation 2,720 105,400
Kansas City Southern Industries, Inc. 1,000 46,437
Norfolk Southern Corporation 3,500 85,750
Ryder System, Inc. 700 14,263
Southwest Airlines Co. 4,587 69,665
Union Pacific Corporation 2,300 110,544
<F1> USAir Group, Inc. 700 18,375
----------------------------------------------------------------------
TOTAL 792,784
----------------------------------------------------------------------
UTILITIES (2.8%)
<F1> The AES Corporation 1,800 106,200
Ameren Corporation 1,300 49,155
American Electric Power Co. Inc. 1,800 61,424
Carolina Power & Light Company 1,500 53,062
Central & South West Corporation 2,000 42,250
Cinergy Corporation 1,500 42,469
CMS Energy Corp. 1,100 37,331
Coastal Corp. 2,000 81,875
Columbia Energy Group 750 41,531
Consolidated Edison Co. of New York 2,100 87,150
Consolidated Natural Gas Company 900 56,138
Constellation Energy Group Inc. 1,400 39,375
Dominion Resources Inc. 1,800 81,225
DTE Energy Company 1,300 46,963
Duke Energy Corp. 3,331 183,621
Eastern Enterprises 200 9,288
Edison International 3,200 77,800
Enron Corporation 6,500 268,125
Entergy Corporation 2,300 66,556
FirstEnergy Corporation 2,200 56,100
Florida Progress Corporation 900 41,625
FPL Group, Inc. 1,700 85,638
GPU, Inc. 1,200 39,150
New Century Energies, Inc. 1,100 36,781
<F1> Niagra Mohawk Power Corporation 1,700 26,244
Nicor, Inc. 400 14,875
Northern States Power Company 1,400 30,188
ONEOK, Inc. 300 9,094
P P & L Resources, Inc. 1,498 40,540
PacifiCorp 2,700 54,338
PECO Energy Company 1,800 67,500
Peoples Energy Corporation 300 10,556
PG&E Corp. 3,500 90,563
Public Service Enterprise Group, Inc. 2,000 77,250
Shares/Par Market Value
----------------------------------------------------------------------
UTILITIES (CONTINUED)
Reliant Energy, Inc. 2,773 $75,044
Sempra Energy 2,251 46,849
Sonat Inc. 1,000 39,688
Southern Company 6,400 164,800
Texas Utilities Company 2,567 95,781
UNICOM Corporation 2,000 73,875
Williams Companies Inc. 4,000 149,750
----------------------------------------------------------------------
TOTAL 2,757,767
----------------------------------------------------------------------
TOTAL COMMON STOCK 97,053,634
======================================================================
MONEY MARKET INVESTMENTS (0.6%)
FEDERAL GOVERNMENT AND AGENCIES (0.6%)
<F2> Federal Home Loan Mortgage Corp.,
5.10%, 1/10/00 600,000 590,268
----------------------------------------------------------------------
TOTAL INVESTMENTS (99.4%)
(Cost $76,958,446)<F3> 97,643,902
======================================================================
OTHER ASSETS, LESS LIABILITIES (0.6%) 603,024
======================================================================
TOTAL NET ASSETS (100.0%) $98,246,926
======================================================================
<F1> Non-Income Producing
<F2> Partially held by the custodian in a segregated account as collateral for
open futures positions. Information regarding open futures contracts as of
September 30, 1999 is summarized below:
Number of Expiration Unrealized
Issuer Contracts Date Depreciation
- -------------------------------------------------------------------------
S&P 500/R Stock Index
(Total notional value at
9/30/99, $670,050) 2 12/99 $20,950
<F3> At September 30, 1999, the aggregate cost of securities for federal income
tax purposes was $76,958,446 and the net unrealized appreciation of
investments based on that cost was $20,685,456 which is comprised of
$24,376,329 aggregate gross unrealized appreciation and $3,690,873
aggregate gross unrealized depreciation.
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
September 30, 1999
ASSET ALLOCATION FUND
- ---------------------
ASSET ALLOCATION FUND
- ---------------------
- --------------------------------------------------------------------------------
OBJECTIVE: To seek to realize as high a level of total return, including
current income and capital appreciation, as is consistent with reasonable
investment risk. The Fund will follow a flexible policy for allocating assets
among common stocks, bonds and cash.
PORTFOLIO: The normal range of investments is 50-70% stocks, 25-35% bonds and
0-15% cash equivalents. Up to 50% of the stock allocation may be invested in
foreign stocks.
STRATEGY: To adjust the mix among asset sectors to capitalize on the changing
financial markets and
economic conditions.
NET ASSETS: $52.5 million
- ------------------------------------------------------------------------------
The Asset Allocation Fund invests in seven categories of assets: large-
capitalization stocks, small-capitalization stocks, foreign stocks, investment-
grade bonds, below investment-grade bonds, convertible securities and cash
equivalents. The proportion of the Fund in each category is adjusted as
appropriate to take advantage of market trends and opportunities, and securities
within each category are actively managed.
For the Asset Allocation Fund, a major key to performance is overexposure to
equities when the market is strong and a defensive posture during periods of
market weakness. For most of the first half of the Fund's fiscal year, the
posture has been defensive, with periods of strength in the equity market used
as opportunities to improve liquidity and reduce exposure to stocks. This
position has been taken because the Fund's equity valuation model indicated that
equities in general may be overvalued. At the beginning of the period, 51% of
the Fund's market value was invested in equities; at September 30, equity
holdings represented 49.6% of the Fund. A neutral weighting would be
approximately 55% in equities. This defensive posture has proven advantageous,
especially during the third calendar quarter, when all major domestic equity
indices recorded negative returns.
Within the equity portion of the Fund, the relative mix of large-cap, small-cap
and international holdings was essentially neutral. The small-capitalization
portion of the Fund benefited from selective purchases of Initial Public
Offerings; the Fund's relatively small size makes it possible to participate in
this volatile but often attractive segment of the market. Cash raised from the
sale of equities has been used to invest in short-term bonds; shorter maturities
are desirable in the current market environment, which anticipates further
increases in interest rates.
SECTOR ALLOCATION
9/30/99
Investment-Grade Bonds 34%
Large Cap Stocks 30%
Small Cap Stocks 11%
Foreign Stocks 9%
Cash Equivalents 8%
Below Invesment-Grade Bonds 7%
Preferred Stock 1%
<PAGE>
M A S O N S T R E E T F U N D S
ASSET ALLOCATION FUND
PERFORMANCE RELATIVE TO RELEVANT INDICES
<TABLE>
<CAPTION>
3/31/97 9/30/97 3/31/98 9/30/98 3/31/99 9/30/99
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
ASSET ALLOCATION FUND CLASS A 9,524 11,390 12,239 11,355 13,023 13,826
ASSET ALLOCATION FUND CLASS B 10,000 11,920 12,769 11,811 13,506 14,280
ASSET ALLOCATION FUND CLASS B
REDEMPTION VALUE 13,980
S&P 500/R INDEX 10,000 12,618 14,787 13,747 17,503 17,564
MERRILL LYNCH DOMESTIC MASTER INDEX 10,000 10,712 11,205 11,955 11,934 11,908
MERRILL LYNCH 91-DAY TREASURY BILL 10,000 10,272 10,536 10,824 11,061 11,333
</TABLE>
TOTAL RETURN Average
Annual
One Since
For the periods ended September 30, 1999 Year Inception<F1>
- ---------------------------------------------------------------------
Asset Allocation Fund
(Class A - without initial sales charge) 21.76% 16.07%
- ---------------------------------------------------------------------
S&P 500/R Index 27.77% 25.26%
- ---------------------------------------------------------------------
Merrill Lynch Domestic Master Index (0.39)% 7.23%
- ---------------------------------------------------------------------
Merrill Lynch 91-Day Treasury Bill 4.73% 5.13%
- ---------------------------------------------------------------------
<F1>Fund inception date is 3/31/97. Returns are annualized.
In the graph, the Fund is compared against three indices representing the three
major components of the Fund: equities, fixed income and cash equivalent
investments. The indices cannot be invested in directly and do not include sales
charges.
The Merrill Lynch Domestic Master Index is an unmanaged market value weighted
index comprised of U.S. government, mortgage and investment-grade corporate
bonds. The index measures the income provided by, and the price changes of, the
underlying securities.
The Standard & Poor's 500 Composite Stock Price Index is an unmanaged index of
500 selected common stocks, most of which are listed on the New York Stock
Exchange. The index is heavily weighted toward stocks with large market
capitalizations and represents approximately two-thirds of the total market
value of all domestic common stocks.
The Merrill Lynch 91-Day Treasury Bill index is comprised of a single issue
purchased at the beginning of each month and held for a full month. The issue
selected at each month-end rebalancing is the outstanding Treasury Bill that
matures closest to, but not beyond, three months from the rebalancing date.
This graph assumes an initial investment of $10,000 made in Class A and Class B
shares, with all sales charges on March 31, 1997 (commencement of operations).
Returns shown include fee waivers and deductions for all Fund expenses. In the
absence of fee waivers, total return would be reduced. Past performance is not
predictive of future performance. Investment return and principal value will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. Returns on p. 3 reflect the maximum sales charge for Class
A and a 5% contingent deferred sales charge for Class B One Year and 3% for
Since Inception.
Investors should be aware of the risks of investments in foreign securities,
particularly investments in securities of companies in developing nations. These
include the risks of currency fluctuation, of political and economic instability
and of less well-developed government supervision and regulation of business and
industry practices, as well as differences in accounting standards. Small-cap
stocks also may carry additional risk. Smaller or newer issuers are more likely
to realize more substantial growth as well as suffer more significant losses
than larger or more established issuers. Investments in such companies can be
both more volatile and more speculative.
SCHEDULE OF INVESTMENTS
Shares/Par Market Value
---------------------------------------------------------------------
COMMON STOCK (46.6%)
DOMESTIC COMMON STOCK (36.9%)
SMALL CAP COMMON STOCK (11.5%)
CAPITAL GOODS (0.8%)
<F1> Brooks Automation, Inc. 1,600 $28,100
Kaydon Corporation 3,900 97,012
<F1> Power-One Inc. 1,300 33,150
<F1> Sanmina Corporation 600 46,424
Teleflex, Inc. 2,900 114,369
<F1> Tetra Tech, Inc. 5,200 86,775
<F1> Triumph Group, Inc. 1,400 37,187
----------------------------------------------------------------------
TOTAL 443,017
----------------------------------------------------------------------
COMMUNICATION SERVICES (0.3%)
Telefonos de Mexico, S.A. de C.V. 2,500 178,125
----------------------------------------------------------------------
CONSUMER CYCLICAL (1.5%)
<F1> 1-800-FLOWERS.COM, Inc. 4,100 59,194
<F1> Catalina Marketing Corporation 1,700 144,181
<F1> David's Bridal, Inc. 2,700 20,081
Galileo International, Inc. 2,500 100,625
<F1> Getty Images, Inc. 2,000 48,250
<F1> Jones Apparel Group, Inc. 2,500 71,874
<F1> Michaels Stores, Inc. 4,000 118,000
<F1> O'Reilly Automotive, Inc. 4,700 223,984
----------------------------------------------------------------------
TOTAL 786,189
----------------------------------------------------------------------
CONSUMER STAPLES (0.3%)
<F1> Lamar Advertising Company 1,900 94,050
<F1> Salem Communications Corporation 1,500 38,250
----------------------------------------------------------------------
TOTAL 132,300
----------------------------------------------------------------------
ENERGY (0.9%)
<F1> Barrett Resources Corporation 1,900 70,181
<F1> BJ Services Company 4,600 146,337
<F1> Global Industries, Ltd. 5,200 42,250
<F1> Nabors Industries, Inc. 3,400 85,000
<F1> Stone Energy Corporation 1,300 66,137
<F1> Weatherford International, Inc. 2,100 67,200
----------------------------------------------------------------------
TOTAL 477,105
----------------------------------------------------------------------
FINANCE (0.9%)
Arcadia Financial Ltd. 500 500
Financial Security Assurance
Holdings Ltd. 2,900 149,894
Greenpoint Financial Corp. 2,842 75,491
Investors Financial Services Corp. 4,500 154,687
<F1> Knight/Trimark Group, Inc. 1,500 44,438
<F1> Trammell Crow Company 3,300 43,725
----------------------------------------------------------------------
TOTAL 468,735
----------------------------------------------------------------------
<PAGE>
September 30, 1999
ASSET ALLOCATION FUND
Shares/Par Market Value
----------------------------------------------------------------------
HEALTHCARE (1.4%)
Bausch & Lomb, Inc. 900 $59,344
<F1> Lincare Holdings, Inc. 4,300 114,622
<F1> Patterson Dental Company 4,250 210,641
<F1> Pediatrix Medical Group, Inc. 1,300 18,038
Province Healthcare Company 2,300 26,450
<F1> Quorum Health Group, Inc. 2,650 18,633
<F1> Sybron International Corporation 5,100 137,063
<F1> Wesley Jessen VisionCare, Inc. 4,500 140,344
----------------------------------------------------------------------
TOTAL 725,135
----------------------------------------------------------------------
MISCELLANEOUS (1.0%)
<F1> The Corporate Executive Board Company 1,800 73,350
<F1> Interim Services, Inc. 1,900 31,113
<F1> MIH Limited 8,500 245,438
<F1> Navigant Consulting, Inc. 1,750 81,156
<F1> Steiner Leisure Limited 3,750 93,750
----------------------------------------------------------------------
TOTAL 524,807
----------------------------------------------------------------------
TECHNOLOGY (4.0%)
<F1> Advent Software, Inc. 850 52,913
<F1> Ancor Communications, Incorporated 800 19,400
<F1> Broadbase Software, Inc. 2,000 31,875
<F1> CDW Computer Centers, Inc. 1,200 58,650
<F1> Computer Horizons Corporation 2,200 25,575
<F1> Comverse Technology, Inc. 1,600 150,900
<F1> DST Systems, Inc. 1,700 96,688
<F1> Engage Technologies, Inc. 1,700 64,069
<F1> Etec Systems, Inc. 1,100 41,388
<F1> GaSonics International Corporation 4,300 70,950
<F1> Great Plains Software, Inc. 1,100 56,650
<F1> Inet Technologies, Inc. 2,400 95,774
<F1> Internap Network Services Corporation 1,100 49,088
<F1> JDS Uniphase Corporation 1,800 204,863
KMC Telecom Holdings, Inc. 250 625
<F1> Microchip Technology, Inc. 1,000 51,375
<F1> Northpoint Communications Group, Inc. 2,500 46,250
Paychex, Inc. 1,700 58,013
<F1> PMC-Sierra, Inc. 1,600 148,000
<F1> Proxicom, Inc. 300 17,550
<F1> QLogic Corporation 1,600 111,800
<F1> Scient Corporation 100 6,400
<F1> Semtech Corporation 2,400 87,900
<F1> Stoneridge, Inc. 5,300 92,088
<F1> Synopsys, Inc. 1,200 67,388
<F1> Tellabs, Inc. 1,700 96,794
<F1> TIBCO Software, Inc. 4,500 135,422
<F1> Transaction Systems Architects, Inc. 2,000 53,875
<F1> Trintech Group PLC, ADR 400 5,250
Shares/Par Market Value
----------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
VeriSign, Inc. 300 $31,950
<F1> Viant Corporation 500 24,188
<F1> Visio Corporation 1,100 43,175
----------------------------------------------------------------------
TOTAL 2,096,826
----------------------------------------------------------------------
TRANSPORTATION (0.4%)
C.H. Robinson Worldwide, Inc. 900 30,319
<F1> Knight Transportation, Inc. 4,050 58,725
<F1> Swift Transportation Co., Inc. 5,950 117,140
----------------------------------------------------------------------
TOTAL 206,184
----------------------------------------------------------------------
TOTAL SMALL CAP COMMON STOCK 6,038,423
======================================================================
LARGE CAP COMMON STOCK (25.4%)
BASIC MATERIALS (0.6%)
Ecolab, Inc. 5,800 197,924
The Mead Corporation 1,600 55,000
PPG Industries, Inc. 800 48,000
----------------------------------------------------------------------
TOTAL 300,924
----------------------------------------------------------------------
CAPITAL GOODS (2.3%)
AlliedSignal, Inc. 1,700 101,894
Avery Dennison Corporation 3,800 200,450
Emerson Electric Co. 900 56,869
General Electric Company 3,500 414,969
<F1> Republic Services, Inc. 6,300 68,513
Tyco International Ltd. 3,400 351,050
Waste Management, Inc. 200 3,850
----------------------------------------------------------------------
TOTAL 1,197,595
----------------------------------------------------------------------
COMMUNICATION SERVICES (1.5%)
Ameritech Corporation 800 53,750
AT&T Corp. 5,895 256,433
<F1> Global TeleSystems Group, Inc. 3,000 59,156
GTE Corporation 1,800 138,375
<F1> MCI WorldCom, Inc. 2,485 178,608
<F1> Nextel Communications, Inc. 1,600 108,500
----------------------------------------------------------------------
TOTAL 794,822
----------------------------------------------------------------------
CONSUMER CYCLICAL (4.2%)
<F1> Amazon.com, Inc. 400 31,975
<F1> barnesandnoble.com, Inc. 2,300 44,419
Centex Corporation 1,400 41,388
<F1> Costco Wholesale Corporation 1,800 129,600
Dayton Hudson Corporation 2,100 126,131
Ford Motor Company 2,000 100,375
Gap, Inc. 1,100 35,200
Harley-Davidson, Inc. 4,200 210,263
<PAGE>
M A S O N S T R E E T F U N D S
ASSET ALLOCATION FUNDS
Shares/Par Market Value
----------------------------------------------------------------------
CONSUMER CYCLICAL (CONTINUED)
The Interpublic Group
of Companies, Inc. 1,600 $65,800
<F1> Kohl's Corporation 4,700 310,787
Lennar Corporation 1,600 25,500
The McGraw-Hill Companies, Inc. 2,600 125,775
The New York Times Company 5,600 210,000
Omnicom Group Inc. 1,000 79,188
The ServiceMaster Company 7,350 118,059
Tribune Company 5,600 278,600
Wal-Mart Stores, Inc. 5,700 271,106
----------------------------------------------------------------------
TOTAL 2,204,166
----------------------------------------------------------------------
CONSUMER STAPLES (3.6%)
Anheuser-Busch Companies, Inc. 2,100 147,131
The Dial Corporation 5,800 147,900
<F1> Keebler Foods Company 6,500 194,188
Kimberly-Clark Corporation 2,200 115,500
McDonald's Corporation 3,500 150,500
<F1> The Pepsi Bottling Group, Inc. 4,700 80,194
PepsiCo, Inc. 5,100 154,275
Procter & Gamble Company 2,600 243,750
The Quaker Oats Company 1,700 105,188
Time Warner, Inc. 1,500 91,125
Unilever NV 2,321 158,117
<F1> Viacom, Inc. 2,100 88,725
Walgreen Co. 7,100 180,163
Wendy's International, Inc. 1,700 44,838
----------------------------------------------------------------------
TOTAL 1,901,594
----------------------------------------------------------------------
ENERGY (1.5%)
BP Amoco PLC, ADR 1,200 132,975
Chevron Corporation 700 62,125
Conoco Inc. 4,200 114,975
EOG Resources, Inc. 2,200 46,750
Exxon Corporation 1,600 121,500
Mobil Corporation 1,000 100,750
Schlumberger Limited 600 37,387
Texaco, Inc. 1,100 69,438
Transocean Offshore Inc. 2,700 82,688
----------------------------------------------------------------------
TOTAL 768,588
----------------------------------------------------------------------
FINANCE (2.1%)
Ambac Financial Group, Inc. 2,000 94,750
American International Group, Inc. 200 17,388
Bank of America Corporation 400 22,275
The Bank of New York Company, Inc. 3,800 127,063
Chase Manhattan Corporation 2,400 180,900
Citigroup Inc. 2,750 121,000
Shares/Par Market Value
----------------------------------------------------------------------
FINANCE (CONTINUED)
Fifth Third Bankcorp 1,900 $115,603
The Goldman Sachs Group, Inc. 1,500 91,500
<F1> Labranche & Co, Inc. 6,900 77,194
Morgan Stanley, Dean Witter,
Discover & Co. 2,200 196,213
U.S. Bancorp 1,600 48,300
----------------------------------------------------------------------
TOTAL 1,092,186
----------------------------------------------------------------------
HEALTHCARE (2.2%)
Bristol-Myers Squibb Company 3,100 209,250
Eli Lilly & Company 1,600 102,400
<F1> Guidant Corporation 1,600 85,800
Johnson & Johnson 1,700 156,187
Medtronic, Inc. 5,200 184,600
Merck & Co., Inc. 2,000 129,625
Pfizer, Inc. 4,500 161,719
Pharmacia & Upjohn, Inc. 1,100 54,588
Warner-Lambert Company 1,200 79,650
----------------------------------------------------------------------
TOTAL 1,163,819
----------------------------------------------------------------------
TECHNOLOGY (6.0%)
<F1> Amdocs Limited 600 12,600
<F1> America Online, Inc. 1,100 114,400
<F1> Cisco Systems, Inc. 4,900 335,956
<F1> Concord EFS, Inc. 7,950 163,968
Electronic Data Systems Corporation 3,500 185,281
<F1> EMC Corporation 800 57,150
<F1> Fiserv, Inc. 10,125 329,063
Hewlett-Packard Company 1,600 147,200
Intel Corporation 2,700 200,644
International Business
Machines Corporation 3,200 388,400
Lucent Technologies, Inc. 3,600 233,550
<F1> Microsoft Corporation 5,000 452,813
Nortel Networks Corporation 3,200 163,200
<F1> Sun Microsystems Inc. 1,000 93,000
Texas Instruments, Incorporated 1,600 131,600
W.W. Grainger, Inc. 2,600 124,962
----------------------------------------------------------------------
TOTAL 3,133,787
----------------------------------------------------------------------
TRANSPORTATION (0.9%)
<F1> AMR Corporation 2,100 114,450
Canadian National Railway Company 4,000 121,250
<F1> FDX Corporation 1,800 69,750
<F1> Midwest Express Holdings, Inc. 3,750 98,203
Southwest Airlines Co. 6,000 91,125
----------------------------------------------------------------------
TOTAL 494,778
----------------------------------------------------------------------
<PAGE>
SEPTEMBER 30, 1999
ASSET ALLOCATION FUND
Shares/Par Market Value
----------------------------------------------------------------------
UTILITIES (0.5%)
Enron Corp. 6,800 $280,500
----------------------------------------------------------------------
TOTAL LARGE CAP COMMON STOCK 13,332,759
----------------------------------------------------------------------
TOTAL DOMESTIC COMMON STOCK 19,371,182
----------------------------------------------------------------------
Country Shares/Par Market Value
----------------------------------------------------------------------
FOREIGN COMMON STOCK (9.7%)
CAPITAL GOODS (0.7%)
British Aerospace United Kingdom 239 1,572
Clariant AG Switzerland 400 181,264
Falck A/S Denmark 2,000 187,787
----------------------------------------------------------------------
TOTAL 370,623
----------------------------------------------------------------------
COMMUNICATION SERVICES (2.7%)
<F1> Alcatel Alsthom France 700 96,467
KPN NV Netherlands 75 3,299
Nokia Oyj Finland 2,500 223,914
NTT Mobile
Communication
Network, Inc. Japan 200 394,488
<F1> Orange PLC United Kingdom 10,000 197,134
Sonera Group Oyj Finland 7,000 167,736
Telecom Italia SpA Italy 22,500 193,975
Telefonica S.A. Spain 9,180 146,942
----------------------------------------------------------------------
TOTAL 1,423,955
----------------------------------------------------------------------
CONSUMER CYCLICAL (0.2%)
Buhrmann NV Italy 5,000 83,602
----------------------------------------------------------------------
CONSUMER STAPLES (0.6%)
PrimaCom AG Germany 2,500 138,448
UPM-Kymmene Oyj Finland 5,500 187,438
----------------------------------------------------------------------
TOTAL 325,886
----------------------------------------------------------------------
ENERGY (0.9%)
British Energy - A shares United Kingdom 26,500 26,186
British Energy PLC United Kingdom 23,739 161,070
Elf Aquitaine France 1,050 183,391
Repsol SA Netherlands 6,000 117,511
----------------------------------------------------------------------
TOTAL 488,158
----------------------------------------------------------------------
FINANCE (2.4%)
Bank Sarasin & Cie Switzerland 65 114,356
Banque Nationale de Paris France 3,400 271,391
Christiania Bank
Og Kreditkasse Norway 50,000 269,134
<F1> Credit Lyonnais France 5,500 161,724
The Fuji Bank, Limited Japan 25,000 303,850
HSBC Holdings PLC United Kingdom 10,500 120,308
----------------------------------------------------------------------
TOTAL 1,240,763
----------------------------------------------------------------------
Country Shares/Par Market Value
----------------------------------------------------------------------
HEALTHCARE (0.2%)
SmithKline Beecham PLC United Kingdom 7,500 $87,080
----------------------------------------------------------------------
TECHNOLOGY (0.9%)
<F1> Fantastic Corporation Spain 2,000 110,759
<F1> Perlos Oyj Finland 10,000 134,721
Philips Electronics, Inc. Netherlands 2,300 232,210
----------------------------------------------------------------------
TOTAL 477,690
----------------------------------------------------------------------
TRANSPORTATION (1.1%)
<F1> Koninklije Luchtvaart
Maatschappij NV (KLM) Netherlands 4,500 116,457
Porsche AG Germany 85 230,384
Railtrack Group PLC United Kingdom 12,134 248,234
----------------------------------------------------------------------
TOTAL 595,075
----------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCK 5,092,832
----------------------------------------------------------------------
TOTAL COMMON STOCK 24,464,014
======================================================================
PREFERRED STOCK (1.1%)
Adelphia Communications 404 44,339
California Federal Pfd Capital 2,000 47,000
Crown Castle International Corporation 1,000 101,000
Primedia, Inc. 2,500 247,500
Sinclair Capital 1,500 150,000
----------------------------------------------------------------------
TOTAL PREFERRED STOCK 589,839
======================================================================
BONDS (40.7%)
INVESTMENT-GRADE BONDS (33.3%)
AUTO RELATED (1.1%)
DaimlerChrysler North America
Holdings, 6.9%, 9/1/04 300,000 301,114
Ford Motor Credit Corporation,
6.7%, 7/16/04 300,000 298,066
----------------------------------------------------------------------
TOTAL 599,180
----------------------------------------------------------------------
COMMERCIAL MORTGAGES (8.4%)
Asset Securitization Corporation,
1.25%, Class CS1, 11/13/26 IO 13,922,799 416,988
Blackrock Capital Finance,
Class B3, 7.25%, 11/25/28 (144A) 187,664 84,449
Commercial Mortgage Asset Trust,
7.35%, Class C, 8/17/13 500,000 475,315
Criimi Mae Commercial Mortgage
Trust, 7.00%, Class B, 11/2/11 339,000 256,581
EMAC Owner Trust, 1.378%,
1/15/23 (144A) IO 6,765,561 431,305
Health Care Receivable,
6.25%, 2/1/03 (144A) 125,000 122,109
Kmart CMBS Financing, Inc.,
5.58%, 3/1/07 1,000,000 995,480
<PAGE>
M A S O N S T R E E T F U N D S
ASSET ALLOCATION FUND
Shares/Par Market Value
----------------------------------------------------------------------
COMMERCIAL MORTGAGES (8.4%) (CONTINUED)
Merrill Lynch Mortgage Investors,
8.392%, Class E, 6/25/22 (144A) 500,000 $499,425
Midland Realty Acceptance Corp.,
1.389%, Class AEC,
1/25/29 IO (144A) 4,586,442 262,711
Mortgage Capital Funding, Inc.,
7.288%, Class A3, 3/20/07 100,000 100,826
Polaris Commercial Loan
Master Trust, 5.363%, 3/15/04 750,000 749,437
----------------------------------------------------------------------
TOTAL 4,394,626
----------------------------------------------------------------------
COSMETICS & TOILETRIES (1.0%)
Procter & Gamble Company,
6.875%, 9/15/09 500,000 501,186
----------------------------------------------------------------------
ELECTRIC SERVICES (1.7%)
Comed Transitional Funding Trust,
Class A7, 5.74%, 12/25/10 250,000 227,745
PECO Energy Company,
6.13%, 3/1/09 700,000 660,225
----------------------------------------------------------------------
TOTAL 887,970
----------------------------------------------------------------------
FEDERAL GOVERNMENT AND AGENCIES (17.4%)
Federal National Mortgage
Association, 6%, 5/1/11 966,112 933,645
Government National Mortgage
Association, 8.0%, 8/15/26 147,435 150,912
Government National Mortgage
Association, 8.0%, 10/15/26 370,748 379,493
Government National Mortgage
Association, 8.0%, 7/15/27 78,772 80,615
US Treasury, 0.00%, 2/15/19 PO 1,200,000 343,655
US Treasury, 4.875%, 3/31/01 1,620,000 1,602,788
US Treasury, 5.00%, 4/30/01 1,250,000 1,238,673
US Treasury, 5.25%, 5/15/04 350,000 342,016
US Treasury, 5.25%, 2/15/29 1,000,000 874,375
US Treasury, 5.625%, 12/31/02 500,000 497,812
US Treasury, 6.5%, 5/15/05 900,000 921,657
US Treasury, 7.5%, 2/15/05 1,200,000 1,282,500
US Treasury Inflation Index,
3.875%, 4/15/29 506,915 489,904
----------------------------------------------------------------------
TOTAL 9,138,045
----------------------------------------------------------------------
GENERAL MERCHANDISE STORES (0.9%)
Wal-Mart Stores, 6.55%, 8/10/04 450,000 451,462
----------------------------------------------------------------------
Shares/Par Market Value
----------------------------------------------------------------------
HEALTHCARE (0.5%)
Johnson & Johnson, 6.625%, 9/1/09 250,000 $248,414
----------------------------------------------------------------------
TELECOMMUNICATIONS (2.3%)
AT&T Corp., 5.625%, 3/15/04 500,000 479,382
AT&T Corp., 6.5%, 9/15/02 250,000 249,404
New England Telephone & Telegraph,
5.875%, 4/15/09 500,000 461,866
----------------------------------------------------------------------
TOTAL 1,190,652
----------------------------------------------------------------------
TOTAL INVESTMENT-GRADE BONDS 17,411,535
----------------------------------------------------------------------
BELOW INVESTMENT-GRADE BONDS (7.4%)
BASIC MATERIALS (0.3%)
METALS & MINING (0.2%)
Glencore Nickel Property, LTD,
9.0%, 12/1/14 50,000 42,500
Murrin Murrin Holdings,
9.375%, 8/31/07 50,000 43,500
----------------------------------------------------------------------
TOTAL 86,000
----------------------------------------------------------------------
STEEL (0.1%)
Republic Technologies, 13.75%, 7/15/09 50,000 47,500
----------------------------------------------------------------------
TOTAL BASIC MATERIALS 133,500
----------------------------------------------------------------------
CONSUMER STAPLES (1.0%)
FOODS (0.1%)
Global Health Sciences,
11.0%, 5/1/08 100,000 72,000
----------------------------------------------------------------------
GAMING (0.2%)
Hollywood Casino, 13%,
8/1/06 (144A) 100,000 103,000
----------------------------------------------------------------------
HEALTHCARE (0.6%)
Columbia/HCA Healthcare,
7.69%, 6/15/25 50,000 39,437
Fresenius Medical, 7.875%, 2/1/08 60,000 54,900
HEALTHSOUTH Corporation,
3.25%, 4/1/03 (144A) 100,000 77,375
Total Renal Care Holdings,
7.0%, 5/15/09 (144A) 200,000 130,750
----------------------------------------------------------------------
TOTAL 302,462
----------------------------------------------------------------------
MOVIE THEATERS (0.1%)
Cinemark USA, Inc., 9.625%, 8/1/08 50,000 43,000
----------------------------------------------------------------------
TOTAL CONSUMER STAPLES 520,462
----------------------------------------------------------------------
<PAGE>
SEPTEMBER 30, 1999
ASSET ALLOCATION FUND
Shares/Par Market Value
----------------------------------------------------------------------
CONSUMER CYCLICAL (0.5%)
AUTO & TRUCKS (0.3%)
AVIS Rent-A-Car, Inc., 11.0%,
5/1/09 (144A) 100,000 $102,500
Budget Group, Inc., 9.125%, 4/1/06 50,000 44,000
----------------------------------------------------------------------
TOTAL 146,500
----------------------------------------------------------------------
HOUSEHOLD FURNITURE, APPLIANCES (0.1%)
Renters Choice, 11.0%, 8/15/08 50,000 49,750
----------------------------------------------------------------------
LEISURE RELATED (0.1%)
Headstrom Corporation, 10.0%, 6/1/07 50,000 42,500
<F2> Headstrom Corporation, 12.0%, 6/1/09 50,000 20,000
----------------------------------------------------------------------
TOTAL 62,500
----------------------------------------------------------------------
TOTAL CONSUMER CYCLICAL 258,750
----------------------------------------------------------------------
ENERGY (1.0%)
EOTT Energy Partners L.P.,
11.0%, 10/1/09 50,000 50,687
Parker Drilling Company,
9.75%, 11/15/06 100,000 96,500
Port Authority Finance Corporation,
12.5%, 1/15/09 (144A) 100,000 100,000
Pride International, Inc., 10.0%, 6/1/09 100,000 102,000
R&B Falcon Corporation,
9.5%, 12/15/08 150,000 143,625
R&B Falcon Corporation,
12.25%, 3/15/06 50,000 52,750
----------------------------------------------------------------------
TOTAL ENERGY 545,562
----------------------------------------------------------------------
FINANCE COMPANIES (2.1%)
Americredit Corporation,
9.875%, 4/15/06 50,000 49,250
Arcadia Financial Ltd., 11.50%, 3/15/07 250,000 188,750
BF Saul Real Estate, 9.75%, 4/1/08 250,000 231,875
Metris Companies, Inc.,
10.125%, 7/15/06 (144A) 100,000 91,500
PDVSA Finance, Ltd., 9.75%,
2/15/10 (144A) 100,000 95,427
Superior National Capital Trust,
10.75%, 12/1/17 500,000 450,000
----------------------------------------------------------------------
TOTAL FINANCE COMPANIES 1,106,802
----------------------------------------------------------------------
REAL ESTATE (0.2%)
Crescent Real Estate Equity,
7.0%, 9/15/02 50,000 47,069
Crescent Real Estate Equity,
7.5%, 9/15/07 50,000 43,825
----------------------------------------------------------------------
TOTAL REAL ESTATE 90,894
----------------------------------------------------------------------
Shares/Par Market Value
----------------------------------------------------------------------
TECHNOLOGY (1.7%)
CABLE (0.8%)
Century Communications,
0.00%, 1/15/08 100,000 $43,000
<F2> Charter Communication Holdings,
LLC, 9.92%, 4/1/11 (144A) 100,000 59,625
<F2> NTL, Inc., 9.75%, 4/1/08 100,000 66,500
ONO Finance, PLC, 13.0%, 5/1/09 100,000 104,250
<F2> United International Holdings,
10.75%, 2/15/08 100,000 60,375
United Pan-Europe Communications
NV, 10.875%, 8/1/09 (144A) 100,000 101,000
----------------------------------------------------------------------
TOTAL 434,750
----------------------------------------------------------------------
ELECTRONICS (0.1%)
Amkor Technologies, Inc.,
9.25%, 5/1/06 (144A) 50,000 49,625
----------------------------------------------------------------------
TELECOMMUNICATIONS (0.7%)
Arch Communications, Inc.,
13.75%, 4/15/08 100,000 74,000
<F2> Call-Net Enterprises, Inc.,
10.8%, 5/15/09 50,000 26,000
<F2> KMC Telecommunication
Holdings, Inc., 12.5%, 2/15/08 100,000 54,000
KMC Telecommunication Holdings,
Inc., 13.5%, 5/15/09 (144A) 100,000 98,000
Northeast Optic Network,
12.75%, 8/15/08 50,000 51,000
Psinet, Inc., 11%, 0/1/09 (144A) 50,000 49,375
----------------------------------------------------------------------
TOTAL 352,375
----------------------------------------------------------------------
WIRELESS COMMUNICATION (0.1%)
<F2> Airgate PCS, Inc., 13.5%, 10/1/09 100,000 54,500
----------------------------------------------------------------------
TOTAL TECHNOLOGY 891,250
----------------------------------------------------------------------
TRANSPORT SERVICES (0.3%)
<F2> Decisionone Holdings, 11.5%, 8/1/08 400,000 2,000
Stena Line AB, 10.625%, 6/1/09 250,000 175,625
----------------------------------------------------------------------
TOTAL TRANSPORT SERVICES 177,625
----------------------------------------------------------------------
UTILITIES (0.3%)
GARBAGE DISPOSAL (0.2%)
Allied Waste North America,
7.875%, 1/1/09 100,000 87,500
Waste Management, Inc.,
7.125%, 10/1/07 50,000 44,998
----------------------------------------------------------------------
TOTAL 132,498
----------------------------------------------------------------------
<PAGE>
M A S O N S T R E E T F U N D S
ASSET ALLOCATION FUND
Shares/Par Market Value
----------------------------------------------------------------------
GAS (0.1%)
Western Gas Resources,
10.0%, 6/15/09 (144A) 50,000 $51,125
----------------------------------------------------------------------
TOTAL UTILITIES 183,623
----------------------------------------------------------------------
TOTAL BELOW INVESTMENT-GRADE BONDS 3,908,468
----------------------------------------------------------------------
TOTAL BONDS 21,320,003
======================================================================
SHORT-TERM INVESTMENTS (10.7%)
MONEY MARKET INVESTMENTS (6.3%)
FEDERAL GOVERNMENT AND AGENCIES (0.6%)
<F3> Federal Home Loan Mortgage
Corporation, 5.539%, 1/20/00 300,000 294,657
----------------------------------------------------------------------
PERSONAL CREDIT INSTITUTIONS (5.7%)
<F3> General Electric Capital Corporation,
5.3%, 10/28/99 1,300,000 1,294,833
Variable Funding Capital,
5.599%, 10/1/99 400,000 400,000
Variable Funding Capital,
5.349%, 10/12/99 1,300,000 1,297,875
----------------------------------------------------------------------
TOTAL 2,992,708
----------------------------------------------------------------------
TOTAL MONEY MARKET INVESTMENTS 3,287,365
======================================================================
ASSET-BACKED SECURITIES (4.4%)
FINANCE LESSORS (4.4%)
Asset Securitization, 5.33%, 10/20/99 1,300,000 1,296,342
Receivable Capital Trust,
5.46%, 10/13/99 1,000,000 998,180
----------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES 2,294,522
----------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS 5,581,887
======================================================================
TOTAL INVESTMENTS (99.1%)
(Cost $46,886,835)<F4> 51,955,743
======================================================================
OTHER ASSETS, LESS LIABILITIES (0.9%) 565,924
======================================================================
TOTAL NET ASSETS (100.0%) $52,521,667
======================================================================
ADR - American Depository Receipt
IO - Interest Only Security
PO - Principal Only Security
<F1> Non-Income Producing
144A after the name of a security represents a security exempt from
registration under Rule 144A of the Securities Act of 1933. These
securities may be resold as transactions exempt from registration,
normally to qualified institutional buyers.
<F2> Deferred interest security that receives no coupon payments until a
predetermined date at which the stated coupon rate becomes effective.
<F3> Partially held by the custodian in a segregated account as collateral for
open futures positions. Information regarding open futures contracts as
of September 30, 1999 is summarized below:
Unrealized
Number of Expiration Appreciation/
Issuer Contracts Date (Depreciation)
- -----------------------------------------------------------------------
S&P 500/R Stock Index
(Total notional value at
9/30/99, $1,359,025) 4 12/99 $(60,825)
US Treasury Bond
(Total notional value at
9/30/99, $1,133,125) 10 12/99 $6,250
<F4> At September 30, 1999, the aggregate cost of securities for federal income
tax purposes was $46,886,835 and the net unrealized appreciation of
investments based on that cost was $5,068,908 which is comprised of
$7,032,125 aggregate gross unrealized appreciation and $1,963,217
aggregated gross unrealized depreciation.
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
SEPTEMBER 30, 1999
HIGH YIELD BOND FUND
- --------------------
HIGH YIELD BOND FUND
- --------------------
- ----------------------------------------------------------------------------
OBJECTIVE: To seek high current income and capital appreciation by investing
primarily in fixed income securities that are rated below investment-grade by
the major rating agencies.
PORTFOLIO: Diversified mix of below investment-grade fixed income securities,
commonly known as "junk bonds."
STRATEGY: To identify attractive investment opportunities through rigorous
industry and credit analysis and to generate superior performance by selecting
companies with stable or improving credit fundamentals.
NET ASSETS: $42.7 million
- ------------------------------------------------------------------------------
Investing in a portfolio of high yield bonds provides investors who can accept a
moderate level of risk with a high level of current income, coupled with the
opportunity for capital gains. Holdings of particular interest include solid
investments in entities that have the possibility of a positive event, such as a
significant improvement in credit rating or earnings or a change in ownership.
In a high yield portfolio, some defaults over time are inevitable; high coupons
and diversification across many holdings mitigate the impact of defaults on the
total portfolio.
High yield bonds often trade in sympathy with the stocks of the issuing
companies. During 1999, equity strength has been concentrated in a few large-
capitalization companies and technology stocks, while stocks of smaller
companies have been generally weak. Since many issuers of high yield bonds are
smaller companies, bonds of these issuers have performed sluggishly. In
addition, high yield bonds have been slow to recover from the shocks of the
Asian economic crisis in 1998. Further pressure on the high yield market has
come from a steady stream of new issues from telecommunications companies, as
they rush to modernize infrastructure to take advantage of rapidly growing
volume. These companies are relatively insensitive to interest rate increases
because their managements expect high future returns from their equities;
consequently they prefer to finance growth with debt, even high-cost debt,
rather than with equity issued at current prices. This combination of market
factors has temporarily held prices of high yield bonds down, hurting recent
performance, but also providing attractive buying opportunities.
Within this rather difficult environment, the High Yield Bond Fund has performed
relatively well, providing total return of 0.67% over the last six months,
compared with return of -0.94% for the Lehman Brothers High Yield Intermediate
Market Index. A larger than usual position in energy bonds early in the period
benefited performance, as higher oil and gas prices produced better earnings
prospects; after taking some profits, the energy position is now back to normal.
Holdings of emerging market securities have been eliminated for the present;
however, investments in this segment of the market are a possibility for the
future. After experiencing several credit problems during the first calendar
quarter, the portfolio has had no defaults in recent months.
As interest rates have increased over the last few months, the spread has
narrowed between higher and lower quality bonds. This trend has provided an
opportunity to increase the quality of the portfolio without a major sacrifice
in yield. With only modest positions in bonds of highly cyclical companies, the
Fund has been prepared to withstand any economic slowdown that may develop. The
Fund currently has an above-average cash position, which provides liquidity and
will facilitate taking advantage of future investment opportunities in the
market. Cash also enhances performance in a down market.
Investors should remember that, although the Fund's total return (defined as
income plus change in market value) has been rather low for the last six months,
interest payments have continued to provide steady cash flow. The Fund has an
SEC 30-day yield of 10.49% for A shares and 10.36% for B shares as of September
30, 1999. The average yield of invested assets in the Fund was 12.16% at the end
of the quarter, at a time when U.S. Treasury securities are yielding about 6%
and stock yields approximately 2%. In addition, investors in bonds have the
issuer's pledge that the bond will be paid off at face value at maturity; in
contrast, equity investors are buying participation in future earnings streams,
with no guarantees at all.
SECTOR ALLOCATION
9/30/99
Transportation 2%
Consumer/Healthcare 8%
Other 9%
Broadcasting/Media 9%
Cash Equivalents 9%
Leisure 9%
Finance 12%
Basic Materials/Energy 13%
Cable TV 14%
Telecommunications 15%
<PAGE>
M A S O N S T R E E T F U N D S
HIGH YIELD BOND FUND
PERFORMANCE RELATIVE TO LEHMAN BROTHERS
HIGH YIELD INTERMEDIATE MARKET INDEX
<TABLE>
<CAPTION>
3/31/97 9/30/97 3/31/98 9/30/98 3/31/99 9/30/99
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
HIGH YIELD BOND FUND CLASS A 9,524 11,082 11,710 10,573 10,788 10,867
HIGH YIELD BOND FUND CLASS B 10,000 11,595 12,209 10,987 11,161 11,205
HIGH YIELD BOND FUND CLASS B
REDEMPTION VALUE 10,953
LEHMAN BROTHERS HIGH YIELD
INTERMEDIATE MARKET INDEX 10,000 10,886 11,447 10,992 11,449 11,342
</TABLE>
TOTAL RETURN Average
Annual
One Since
For the periods ended September 30, 1999 Year Inception<F1>
- ------------------------------------------------------------------------
High Yield Bond Fund
(Class A - without initial sales charge) 2.77% 5.41%
- ------------------------------------------------------------------------
Lehman Brothers High Yield
Intermediate Market Index 3.17% 5.16%
- ------------------------------------------------------------------------
<F1>Fund inception date is 3/31/97. Returns are annualized.
The total return performance for the High Yield Bond Fund is shown in comparison
with the Lehman Brothers High Yield Intermediate Market Index. The Lehman
Brothers index is an appropriate measure of portfolio performance since it has a
quality and maturity profile that resembles the High Yield Bond Fund. The index
cannot be invested in directly and does not include sales charges.
The Lehman Brothers High Yield Intermediate Market Index is made up of dollar
denominated, nonconvertible, SEC publicly registered fixed rate noninvestment-
grade issues. The bonds will have remaining maturities of between one and ten
years and have an outstanding par value of at least $100 million. Yankee and
global bonds (SEC registered) of issuers in G-7 countries are included. Original
issue zero coupon bonds and step-up coupon structures are also included;
however, the index excludes pay-in kind (PIK) bonds. Each bond must be rated Ba1
or lower by Moody's Investor Service. If a Moody's rating is unavailable, the
bonds must be rated BB+ or lower by Standard & Poor's, or by Fitch if an S&P
rating is unavailable. A few unrated bonds are included in the index; to be
eligible they must have previously held a high yield rating or have been
associated with a high yield issuer. The index is an unmanaged market value
weighted index and measures the income provided by, and the price changes of,
the underlying securities.
This graph assumes an initial investment of $10,000 made in Class A and Class B
shares, with all sales charges on March 31, 1997 (commencement of operations).
Returns shown include fee waivers and deductions for all Fund expenses. In the
absence of fee waivers, total return would be reduced. Past performance is not
predictive of future performance. Investment return and principal value will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. Returns on p. 3 reflect the maximum sales charge for Class
A and a 5% contingent deferred sales charge for Class B One Year and 3% for
Since Inception.
Bonds and other debt obligations are affected by changes in interest rates and
the creditworthiness of their issuers. High yield bonds generally have greater
price swings and higher default risks than investment-grade bonds.
SCHEDULE OF INVESTMENTS
Shares/Par Market Value
----------------------------------------------------------------------
BONDS (76.2%)
BASIC MATERIALS (3.3%)
METALS & MINING (2.5%)
Glencore Nickel, LTD, 9%, 12/1/14 300,000 $255,000
Great Central Mines, Ltd.,
8.875%, 4/1/08 500,000 447,500
Murrin Murrin Holdings,
9.375%, 8/31/07 450,000 391,500
----------------------------------------------------------------------
TOTAL 1,094,000
----------------------------------------------------------------------
STEEL (0.8%)
Republic Technologies,
13.75%, 7/15/09 (144A) 350,000 332,500
----------------------------------------------------------------------
TOTAL BASIC MATERIALS 1,426,500
----------------------------------------------------------------------
BROADCASTING/MEDIA (2.9%)
BROADCASTING (1.6%)
<F2> Big City Radio, Inc., 11.25%, 3/15/05 1,000,000 685,000
----------------------------------------------------------------------
PRINTING AND PUBLISHING (1.3%)
Marvel Enterprises, Inc.,
12.0%, 6/15/09 600,000 546,000
----------------------------------------------------------------------
TOTAL BROADCASTING/MEDIA 1,231,000
----------------------------------------------------------------------
CABLE TELEVISION (9.3%)
Aldephia Communications, 0%, 1/15/08 550,000 236,500
<F2> Charter Communications Hlds, LLC,
9.92%, 4/1/11 (144A) 350,000 208,686
<F2> Falcon Holding Group, LP,
9.285%, 4/15/10 100,000 71,000
Insight Midwest,
9.75%, 10/1/09 (144A) 250,000 252,500
<F2> NTL, Inc., 9.75%, 4/1/08 1,350,000 897,750
NTL, Incorporated, 11.50%, 10/1/08 250,000 269,688
ONO Finance PLC,
13.0%, 5/1/09 (144A) 600,000 625,500
<F2> Telewest PLC, 9.25%, 4/15/09 (144A) 700,000 423,500
<F2> 21st Century Telecom,
12.25%, 2/15/08 (144A) 500,000 210,000
<F2> United International Holdings,
10.75%, 2/15/08 550,000 332,063
United Pan-Eur,
10.875%, 8/1/09 (144A) 450,000 454,500
----------------------------------------------------------------------
TOTAL CABLE TELEVISION 3,981,687
----------------------------------------------------------------------
CONSUMER RELATED (3.2%)
CONSUMER STAPLES (0.5%)
<F2> SF Holdings Group, Inc.,
12.75%, 3/15/08 475,000 211,375
----------------------------------------------------------------------
<PAGE>
SEPTEMBER 30, 1999
HIGH YIELD BOND FUND
Shares/Par Market Value
----------------------------------------------------------------------
FOODS/FOOD SERVICES (2.7%)
Global Health Sciences, Inc.,
11.0%, 5/1/08 700,000 $504,000
Iowa Select Farms L.P.,
10.75%, 12/1/05 (144A) 850,000 663,000
----------------------------------------------------------------------
TOTAL 1,167,000
----------------------------------------------------------------------
TOTAL CONSUMER RELATED 1,378,375
----------------------------------------------------------------------
ENERGY RELATED (8.9%)
OIL AND GAS INDEPENDENT (1.7%)
Chesapeake Energy, 9.625%, 5/1/05 250,000 239,375
Pioneer Natural Resources Inc.,
8.875%, 4/15/05 200,000 199,647
Pioneer Natural Resources Inc.,
8.25%, 8/15/07 100,000 96,055
Pioneer Natural Resources Inc.,
6.50%, 1/15/08 200,000 171,232
----------------------------------------------------------------------
TOTAL 706,309
----------------------------------------------------------------------
OIL FIELD SERVICES (4.3%)
Eott Energy, 11%, 10/1/09 400,000 405,500
Parker Drilling, 5.5%, 8/1/04 200,000 151,750
Parker Drilling, 9.75%, 11/15/06 500,000 482,500
Pride International, 10.0%, 6/1/09 300,000 306,000
R&B Falcon Corp., 12.25%, 3/15/06 150,000 158,250
R&B Falcon Corp., 9.5%, 12/15/08 350,000 335,125
----------------------------------------------------------------------
TOTAL 1,839,125
----------------------------------------------------------------------
REFINING (2.9%)
Clark Refining & Marketing, Inc.,
8.375%, 11/15/07 200,000 173,000
PDV America, Inc., 7.875%, 8/1/03 450,000 418,349
Port Authority Finance Corporation,
12.5%, 1/15/09 650,000 650,000
----------------------------------------------------------------------
TOTAL 1,241,349
----------------------------------------------------------------------
TOTAL ENERGY RELATED 3,786,783
----------------------------------------------------------------------
FINANCE (10.8%)
BANKS (0.8%)
B.F. Saul Real Estate, 9.75%, 4/1/08 350,000 324,625
----------------------------------------------------------------------
FINANCE COMPANIES (7.4%)
Americredit Corp., 9.875%, 4/15/06 300,000 295,500
Arcadia Financial, Ltd.,
11.5%, 3/15/07 1,350,000 1,019,250
Metris Companies, Inc.,
10.125%, 7/15/06 (144A) 800,000 732,000
PDV S.A. Finance,
9.75%, 2/15/10 (144A) 1,150,000 1,097,407
----------------------------------------------------------------------
TOTAL 3,144,157
----------------------------------------------------------------------
Shares/Par Market Value
----------------------------------------------------------------------
INSURANCE (2.6%)
Superior National Capital Trust I,
10.75%, 12/1/17 1,250,000 $1,125,000
----------------------------------------------------------------------
TOTAL FINANCE 4,593,782
----------------------------------------------------------------------
HEALTHCARE (4.5%)
Columbia/HCA Healthcare, Inc.,
7.69%, 6/15/25 400,000 315,492
HEALTHSOUTH Corporation,
3.25%, 4/1/03 (144A) 500,000 386,875
ICN Pharmaceuticals,
8.75%, 11/15/08 (144A) 350,000 322,438
Total Renal Care Holdings,
7.0%, 5/15/09 (144A) 1,400,000 915,250
----------------------------------------------------------------------
TOTAL HEALTHCARE 1,940,055
----------------------------------------------------------------------
LEISURE (8.0%)
GAMING (3.8%)
Circus Circus Enterprise,
7.625%, 7/15/13 450,000 379,125
Hollywood Casino, 13%, 8/1/06 (144A) 400,000 412,000
Hollywood Casino, 11.25%, 5/1/07 400,000 402,000
Sun International Hotel,
8.625%, 12/15/07 250,000 228,750
Trump Hotels & Casino Resorts,
15.50%, 6/15/05 200,000 197,000
----------------------------------------------------------------------
TOTAL 1,618,875
----------------------------------------------------------------------
LEISURE RELATED (1.5%)
<F2> Hedstrom Holdings Inc.,
10.00%, 6/1/07 100,000 85,000
<F2> Hedstrom Holdings Inc.,
12.00%, 6/1/09 1,360,000 544,000
----------------------------------------------------------------------
TOTAL 629,000
----------------------------------------------------------------------
LODGING/RESORTS (1.8%)
HMH Properties, Inc., 7.875%, 8/1/08 300,000 267,750
ITT Corp., 7.375%, 11/15/15 600,000 504,389
----------------------------------------------------------------------
TOTAL 772,139
----------------------------------------------------------------------
MOVIE THEATERS (0.9%)
Cinemark USA, 9.625%, 8/1/08 450,000 387,000
----------------------------------------------------------------------
TOTAL LEISURE 3,407,014
----------------------------------------------------------------------
OTHER INDUSTRIES (5.3%)
AUTO RELATED (2.0%)
AVIS Rent-a-Car, Inc.,
11%, 5/1/09 (144A) 450,000 461,250
Budget Group, Inc., 9.125%, 4/1/06 450,000 396,000
----------------------------------------------------------------------
TOTAL 857,250
----------------------------------------------------------------------
<PAGE>
M A S O N S T R E E T F U N D S
HIGH YIELD BOND FUND
Shares/Par Market Value
----------------------------------------------------------------------
HOUSEHOLD FURNISHINGS, APPLIANCES (0.7%)
Rent-A-Car, Inc., 11%, 8/15/08 300,000 $298,500
----------------------------------------------------------------------
REAL ESTATE (2.6%)
Crescent Real Estate, 7.00%, 9/15/02 300,000 282,414
Crescent Real Estate, 7.50%, 9/15/07 950,000 832,669
----------------------------------------------------------------------
TOTAL 1,115,083
----------------------------------------------------------------------
TOTAL OTHER INDUSTRIES 2,270,833
----------------------------------------------------------------------
SERVICES (1.1%)
Decisionone Holdings, 8.18%, 8/7/05 27,617 12,428
Decisionone Holdings, 8.18%, 8/7/05 39,769 17,896
Decisionone Holdings, 8.21%, 8/7/05 7,232 3,255
<F3> Decisionone Holdings, 9.75%, 8/1/07 325,000 9,750
<F2> Decisionone Holdings, 11.50%, 8/1/08 750,000 3,750
Federal Data Corp., 10.125%, 8/1/05 500,000 410,000
----------------------------------------------------------------------
TOTAL SERVICES 457,079
----------------------------------------------------------------------
TECHNOLOGY (0.7%)
Amkor Technology,
9.25%, 5/1/06 (144A) 300,000 297,750
----------------------------------------------------------------------
TELECOMMUNICATIONS (12.4%)
Arch Communications, 12.75%, 7/1/07 500,000 351,250
Arch Communications, 13.75%, 4/15/08 850,000 629,000
<F2> Bestel S.A. de C.V., 12.75%, 5/15/05 350,000 220,500
<F2> Call-Net Enterprises, 8.94%, 8/15/08 250,000 133,750
Call-Net Enterprises, 9.375%, 5/15/09 200,000 177,000
<F2> Call-Net Enterprises, 10.8%, 5/15/09 450,000 234,000
Hyperion Telecommunications,
12.25%, 9/1/04 450,000 472,500
<F2> KMC Telecommunication Hldgs,
12.50%, 2/15/08 400,000 216,000
KMC Telecommunication Hldgs,
13.50%, 5/15/09 (144A) 650,000 637,000
<F2> Nextel Communications,
9.95%, 2/15/08 500,000 353,750
Nextlink Communications,
10.75%, 6/1/09 250,000 250,625
Northeast Optic Network, Inc.,
12.75%, 8/15/08 350,000 357,000
Psinet Inc., 11%, 8/1/09 (144A) 450,000 444,375
Splitrock Services, Inc.,
11.75%, 7/15/08 150,000 135,000
<F2> Triton PCS Inc., 11%, 5/1/08 150,000 100,875
Verio, Inc., 11.25%, 12/1/08 400,000 409,000
Viatel, Inc., 11.25%, 4/15/08 200,000 185,000
----------------------------------------------------------------------
TOTAL TELECOMMUNICATIONS 5,306,625
----------------------------------------------------------------------
Shares/Par Market Value
----------------------------------------------------------------------
TRANSPORTATION (2.3%)
Stena AB, 10.50%, 12/15/05 150,000 $148,500
Stena AB, 8.75%, 6/15/07 300,000 271,500
Stena Line AB, 10.625%, 6/1/08 800,000 562,000
----------------------------------------------------------------------
TOTAL TRANSPORTATION 982,000
----------------------------------------------------------------------
UTILITIES (2.7%)
Allied Waste, 7.875%, 1/1/09 600,000 525,000
Allied Waste, 10%, 8/1/09 100,000 91,500
Waste Management, Inc.,
7.125%, 10/1/07 250,000 224,987
Western Gas Resources, 10%, 6/15/09 300,000 306,750
----------------------------------------------------------------------
TOTAL UTILITIES 1,148,237
----------------------------------------------------------------------
WIRELESS COMMUNICATIONS (0.8%)
<F2> Airgate PCS, 13.5%, 10/1/09 650,000 354,250
----------------------------------------------------------------------
TOTAL BONDS 32,561,970
======================================================================
PREFERRED STOCK (14.4%)
BANKS (0.6%)
California Fed Pfd Capital 12,000 282,000
----------------------------------------------------------------------
BROADCASTING/MEDIA (6.4%)
BROADCASTING (5.5%)
<F4> Crown Castle Intl. Corp. 3,500 353,500
<F4> Cumulus Media, Inc. 9,140 987,120
Sinclair Capital 10,000 1,000,000
----------------------------------------------------------------------
TOTAL 2,340,620
----------------------------------------------------------------------
PRINTING AND PUBLISHING (0.9%)
Primedia, Inc. 4,000 396,000
----------------------------------------------------------------------
TOTAL BROADCASTING/MEDIA 2,736,620
----------------------------------------------------------------------
CABLE TELEVISION (4.6%)
Aldephia Communications 3,000 329,250
<F4> CSC Holdings, Inc. 10,703 1,161,275
<F4> NTL, Inc. 3,290 349,563
<F4> 21st Century Telecom 3,660 150,060
----------------------------------------------------------------------
TOTAL CABLE TELEVISION 1,990,148
----------------------------------------------------------------------
ENERGY (0.5%)
<F4> R&B Falcon Corp. 2,070 196,650
----------------------------------------------------------------------
HEALTHCARE (0.4%)
Fresenius Medical, 7.875%, 2/1/08 200,000 183,000
----------------------------------------------------------------------
LEISURE RELATED (0.3%)
<F4> Samsonite Corp. 1,440 115,200
----------------------------------------------------------------------
<PAGE>
SEPTEMBER 30, 1999
HIGH YIELD BOND FUND
Shares/Par Market Value
----------------------------------------------------------------------
TELECOMMUNICATIONS (1.6%)
<F4> Hyperion Telecommunications 4,340 $386,260
<F4> Nextlink Communications 5,600 277,200
----------------------------------------------------------------------
TOTAL TELECOMMUNICATIONS 663,460
----------------------------------------------------------------------
TOTAL PREFERRED STOCK 6,167,078
======================================================================
COMMON STOCK AND WARRANTS (0.6%)
BASIC MATERIALS (0.0%)
Republic Technologies 3,500 3
----------------------------------------------------------------------
CABLE TELEVISION (0.0%)
ONO Finance PLC 600 0
<F1> 21st Century Telecom 3,000 6,000
----------------------------------------------------------------------
TOTAL CABLE TELEVISION 6,000
----------------------------------------------------------------------
CONSUMER STAPLES (0.0%)
<F1> SF Holdings Group, Inc. (144A) 950 10
----------------------------------------------------------------------
ENERGY (0.1%)
<F1> R&B Falcon Corp. (144A) 2,000 50,000
----------------------------------------------------------------------
FINANCE COMPANIES (0.0%)
<F1> Arcadia Financial LTD 1,000 1,000
----------------------------------------------------------------------
LEISURE (0.2%)
<F1> Hedstrom Holdings, Inc. (144A) 67,324 67,324
<F1> Samsonite Corp. 1,250 3,750
----------------------------------------------------------------------
TOTAL LEISURE 71,074
----------------------------------------------------------------------
PROFESSIONAL SERVICES (0.0%)
<F1> Decisionone Holdings 750 0
----------------------------------------------------------------------
TELECOMMUNICATIONS (0.3%)
<F1> Bestel S.A. de C.V. 350 1,050
<F1> KMC Telecom Holdings, Inc. (144A) 1,750 4,375
<F1> Splitrock Services, Inc. 450 32,400
<F1> Viatel, Inc. 2,840 83,957
----------------------------------------------------------------------
TOTAL TELECOMMUNICATIONS 121,782
----------------------------------------------------------------------
WIRELESS COMMUNICATIONS (0.0%)
Airgate PCS, Inc. 6,500 7
----------------------------------------------------------------------
TOTAL COMMON STOCK AND WARRANTS 249,876
======================================================================
MONEY MARKET INVESTMENTS (9.1.%)
PERSONAL CREDIT INSTITUTIONS (4.2%)
General Electric Capital Corporation,
5.31%, 10/13/99 1,000,000 998,230
Variable Funding Capital Corp.,
5.599%, 10/1/99 800,000 800,000
----------------------------------------------------------------------
TOTAL 1,798,230
----------------------------------------------------------------------
Shares/Par Market Value
----------------------------------------------------------------------
FINANCE LESSORS (4.9%)
Receivables Capital Trust,
5.459%, 10/13/99 1,100,000 $1,097,998
Triple A One Funding,
5.449%, 10/6/99 1,000,000 999,243
----------------------------------------------------------------------
TOTAL 2,097,241
----------------------------------------------------------------------
TOTAL MONEY MARKET INVESTMENTS 3,895,471
======================================================================
TOTAL INVESTMENTS (100.3%)
(Cost $46,362,719)<F5> 42,874,395
======================================================================
OTHER ASSETS, LESS LIABILITIES (-0.3%) (145,545)
======================================================================
TOTAL NET ASSETS (100.0%) $42,728,850
======================================================================
<F1> Non-Income Producing
<F2> Deferred interest security that presently receives no coupon payments. At a
predetermined date the stated coupon rate becomes effective.
<F3> Defaulted Security
<F4> PIK - Payment in Kind
144A after the name of a security represents a security exempt from
registration under Rule 144A of the Securities Act of 1933. These
securities may be resold as transactions exempt from registration, normally
to qualified institutional buyers.
<F5> At September 30, 1999, the aggregate cost of securities for federal income
tax purposes was $46,362,719 and the net unrealized depreciation of
investments based on that cost was $3,488,324 which is comprised of
$663,562 aggregate gross unrealized appreciation and $4,151,886 aggregated
gross unrealized depreciation.
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
M A S O N S T R E E T F U N D S
MUNICIPAL BOND FUND
- -------------------
MUNICIPAL BOND FUND
- -------------------
- ------------------------------------------------------------------------------
OBJECTIVE: To seek a high level of current income exempt from federal income
taxes, consistent with preservation of capital, by investing primarily in
investment-grade municipal obligations.
PORTFOLIO: Diversified investment-grade bonds, with the ability to invest up
to 20% of assets in lower-rated securities.
STRATEGY: To actively manage the portfolio to take advantage of changes in
interest rates, quality, sector and maturity of fixed income securities.
NET ASSETS: $33.7 million
- ------------------------------------------------------------------------------
The Municipal Bond Fund is managed with balanced focus on income, total return,
quality of securities and avoidance of federal income taxes. There are five
major classes of securities in the Fund: revenue bonds, general obligation
bonds, pre-refunded bonds, insured bonds, and money market investments, which
are cash equivalents. For revenue bonds, interest and principal is paid from
revenue from a specific source which the bonds fund, such as a tollway system or
a municipal power agency. General obligation bonds are secured by the general
credit of the issuing municipality, which can generally raise taxes as necessary
to meet obligations. Insured bonds are guaranteed by insurance companies such as
Municipal Bond Individual Assurance Corporation (MBIA) or the Financial Guaranty
Insurance Company (FGIC).<F1> Pre-refunded bonds are backed by an escrow of
securities, usually U.S. Treasury securities. The securities in the escrow are
selected to meet the interest payments and to pay off the pre-refunded bonds on
their first call date.
During the past 12 months, the Fund has outperformed its benchmark, the Lehman
Municipal Bond Index.
During 1999, Fund performance has benefited from a defensive posture relative to
interest rates and from holding few "market discount" bonds, which are discount
bonds valued a certain amount below their original issue price or par, whichever
is less. Due to a potential tax impact, market discounts experience a
particularly strong loss in value when interest rates rise as they have this
year. The Fund has avoided these poorly-performing market discount bonds.
The Fund has shifted to a neutral posture relative to interest rates as the end
of 1999 approaches. The average quality of bonds in the Fund has been reduced
somewhat in recent months in order to increase income and more closely match the
quality of the Fund's benchmark, the Lehman Brothers Municipal Bond Index.
However, quality is still high, with 59% of holdings either insured or pre-
refunded and 75% of the portfolio in bonds rated AA or higher.
Tax-exempt municipal bonds continue to be attractive relative to taxable bonds
because of heavy municipal supply. Despite more than a 20% drop in new issue
volume from 1998, 1999 is on track to be the third largest year in history for
municipal bond issuance.
<F1>Insurance applies only to the prompt payment of principal and interest of
the bonds in the Fund and does not remove the market risks associated with your
investment. There is also no guarantee that the insurer will be able to meet its
commitments.
PERCENTAGE HOLDINGS
9/30/99
General Obligation Bonds 9%
Pre-refunded Bonds 11%
Revenue Bonds 32%
Insured Bonds 48%
<PAGE>
SEPTEMBER 30, 1999
MUNICIPAL BOND FUND
PERFORMANCE RELATIVE TO LEHMAN BROTHERS
MUNICIPAL BOND INDEX
<TABLE>
<CAPTION>
3/31/97 9/30/97 3/31/98 9/30/98 3/31/99 9/30/99
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
MUNICIPAL BOND FUND CLASS A 9,524 10,263 10,641 11,118 11,324 11,064
MUNICIPAL BOND FUND CLASS B 10,000 10,735 11,093 11,552 11,728 11,420
MUNICIPAL BOND FUND CLASS B
REDEMPTION VALUE 11,120
LEHMAN BROTHERS MUNICIPAL
BOND INDEX 10,000 10,656 11,071 11,584 11,758 11,503
</TABLE>
TOTAL RETURN Average
Annual
One Since
For the periods ended September 30, 1999 Year Inception<F1>
- --------------------------------------------------------------------
Municipal Bond Fund
(Class A - without initial sales charge) (0.49)% 6.17%
- --------------------------------------------------------------------
Lehman Brothers Municipal
Bond Index (0.70)% 5.76%
- --------------------------------------------------------------------
<F1>Fund inception date is 3/31/97. Returns are annualized.
The total return performance for the Municipal Bond Fund is shown in comparison
with the Lehman Brothers Municipal Bond Index. The Lehman Brothers index is an
appropriate measure of portfolio performance since it has a quality and maturity
profile that resembles the Municipal Bond Fund. The index cannot be invested in
directly and does not include sales charges.
The Lehman Brothers Municipal Bond Index includes municipal bonds that have: a
minimum credit rating of Baa; been issued as part of an issuance of at least $50
million; a maturity value of at least $3 million; a maturity of at least one
year; and been issued after December 31, 1990. As of September 30, 1999, the
index included 51,753 issues totaling over $737 billion in market value. The
index represents approximately 50% of the municipal bond market capitalization.
This graph assumes an initial investment of $10,000 made in Class A and Class B
shares, with all sales charges on March 31, 1997 (commencement of operations).
Returns shown include fee waivers and deductions for all Fund expenses. In the
absence of fee waivers, total return would be reduced. Past performance is not
predictive of future performance. Investment return and principal value will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. Returns on p. 3 reflect the maximum sales charge for Class
A and a 5% contingent deferred sales charge for Class B One Year and 3% for
Since Inception.
SCHEDULE OF INVESTMENTS
Shares/Par Market Value
----------------------------------------------------------------------
MUNICIPAL BONDS (102.0%)
CALIFORNIA (2.9%)
California Housing Financing Agency,
5.75%, 2/1/29 RB, MBIA, AMT 1,000,000 $977,600
----------------------------------------------------------------------
COLORADO (3.4%)
Douglas County, Colorado School
District RE.1, 6.5%, 12/15/16
GO, PR, MBIA 1,050,000 1,154,570
----------------------------------------------------------------------
DISTRICT OF COLUMBIA (3.0%)
District of Columbia,
5.1%, 6/1/03 GO, AMBAC 1,000,000 1,017,820
----------------------------------------------------------------------
FLORIDA (3.3%)
Dade County, Florida, Seaport,
6.2%, 10/1/10 RB, MBIA 1,000,000 1,095,730
----------------------------------------------------------------------
GEORGIA (3.7%)
Cartersville Development Authority
Water & Waste Facility, 7.4%,
11/1/10 RB, AMT 1,000,000 1,131,790
Fulton County, Georgia Residential
Care Facility, 6.3%, 10/1/24 RB 125,000 124,221
----------------------------------------------------------------------
TOTAL 1,256,011
----------------------------------------------------------------------
ILLINOIS (21.0%)
Chicago, Illinois Public Building,
5.375%, 2/1/05 GO, FGIC 1,175,000 1,209,451
Chicago, Illinois Board of Education,
6.75%, 12/1/09 GO, AMBAC 1,000,000 1,124,920
Chicago, Illinois O'Hare International
Airport, 5.7%, 1/1/08 RB,
MBIA, AMT 1,000,000 1,032,130
Illinois State Sales Tax,
6.375%, 6/15/17 RB 1,450,000 1,546,918
Metropolitan Fair & Exposition
Illinois, 5.0%, 6/1/15 RB, BIGI
Insurance purchase by MBIA 1,000,000 923,630
Metropolitan Pier & Exposition,
Dedicated State Tax,
0.0%, 6/15/18 RB, FGIC 2,000,000 667,800
Metropolitan Pier & Exposition,
Dedicated State Tax,
0.0%, 12/15/12 RB, MBIA 1,140,000 550,357
----------------------------------------------------------------------
TOTAL 7,055,206
----------------------------------------------------------------------
INDIANA (0.3%)
Indiana State Toll Financial Authority,
6.0%, 7/1/15 RB 100,000 100,123
----------------------------------------------------------------------
<PAGE>
M A S O N S T R E E T F U N D S
MUNICIPAL BOND FUND
Shares/Par Market Value
----------------------------------------------------------------------
KENTUCKY (3.1%)
Louisville & Jefferson County,
Kentucky Regional Airport Authority,
6.5%, 7/1/17 RB, MBIA, AMT 1,000,000 $1,059,490
----------------------------------------------------------------------
MAINE (3.1%)
Regional Waste System Inc., Maine
Solid Waste Res Recovery
Rev, 6.25%, 7/1/11 RB, AMT 1,000,000 1,057,700
----------------------------------------------------------------------
MICHIGAN (6.2%)
Nice Community School District,
Michigan, Marquette & Baraga
Counties, 5.25%, 5/1/16 GO, MBIA 1,000,000 953,630
Pinckney Michigan Community
Schools, 7.25%, 5/1/06 GO, FGIC 1,000,000 1,136,770
----------------------------------------------------------------------
TOTAL 2,090,400
----------------------------------------------------------------------
NEBRASKA (3.1%)
Nebraska Investment Financial
Authority, Single Family Housing,
6.25%, 3/1/21 RB, GNMA,
FNMA, FHLMC, AMT 990,000 1,023,601
----------------------------------------------------------------------
NEW JERSEY (3.0%)
New Jersey Transportation Trust
Fd Authority, 5.625%, 6/15/14 RB 1,000,000 1,016,950
----------------------------------------------------------------------
NEW YORK (18.1%)
Metropolitan Transportation Authority,
5.625%, 7/1/25 RB, MBIA 1,000,000 979,920
New York City Municipal Water
Finance Authority, 5.75%,
6/15/29 RB 1,000,000 978,310
New York St. Dormitory Authority,
5.125%, 2/15/08 RB 1,000,000 993,220
Port Authority of New York and
New Jersey, 5.75%, 12/1/25 RB,
MBIA, AMT 1,000,000 1,004,110
The City of New York, 6.0%,
4/15/09 GO 1,000,000 1,055,190
Tribourough Bridge & Tunnel
Authority, 5.0%, 1/1/07 RB 1,080,000 1,092,625
----------------------------------------------------------------------
TOTAL 6,103,375
----------------------------------------------------------------------
PENNSYLVANIA (8.4%)
Allegheny County, Pennsylvania
County Hospital, 7.5%, 8/1/13 RB 1,690,000 1,656,200
Pennsylvania Higher Education
Authority, Variable Coupon,
9/1/26 RB, AMBAC, AMT 1,000,000 1,163,750
----------------------------------------------------------------------
TOTAL 2,819,950
----------------------------------------------------------------------
Shares/Par Market Value
----------------------------------------------------------------------
SOUTH CAROLINA (2.9%)
Medical University of South Carolina,
5.7%, 7/1/13 RB 1,000,000 $979,850
----------------------------------------------------------------------
TEXAS (13.3%)
Brazos, Texas, Higher Education
Authority, 5.5%, 6/1/02 RB,
GTD STD LNS, AMT 965,000 990,177
Harris County, Texas Health Facility,
Daily Foating Rate, 2/15/22
RB, MBIA 1,200,000 1,200,000
Hays, Texas, Consolidated
Independent School District,
5.875%, 8/15/22 GO, PSF 1,000,000 999,920
Odessa Texas Junior College District,
8.125%, 12/1/18 RB 1,100,000 1,297,318
----------------------------------------------------------------------
TOTAL 4,487,415
----------------------------------------------------------------------
WASHINGTON (3.2%)
Washington State Public Power
Supply System, 6.5%, 7/1/15,
RB, PR 1,000,000 1,074,920
----------------------------------------------------------------------
TOTAL MUNICIPAL BONDS 34,370,711
======================================================================
TOTAL INVESTMENTS (102.0%)
(Cost $34,486,218)<F1> 34,370,711
======================================================================
OTHER ASSETS, LESS LIABILITIES (-2.0%) (663,021)
======================================================================
TOTAL NET ASSETS (100.0%) $33,707,690
======================================================================
<F1> At September 30, 1999, the aggregate cost of securities for federal income
tax purposes was $34,486,218 and the net unrealized depreciation of
investments based on that cost was $115,507 which is comprised of $465,839
aggregate gross unrealized appreciation and $581,346 aggregate gross
unrealized depreciation.
CP = Commercial
RB = Revenue Bond
GO = General Obligation
PR = Pre-refunded security will be called on the first call date
(with certainty)
AMT = Subject to the Alternative Minimum Tax
Scheduled principal and interest payments are guaranteed by:
MBIA (Municipal Bond Insurance Organization)
AMBAC (AMBAC Indemnity Corporation)
BIGI (Bond Investors Guarantee Insurance)
GNMA (Government National Mortgage Association)
FNMA (Federal National Mortgage Association)
FHLMC (Federal Home Loan Mortgage Corporation)
FHA (Federal Housing Authority)
GTD STD LNS (Guaranteed Student Loans)
PSF (Permanent School Fund, State of Texas)
FGIC (Financial Guaranty Insurance Company)
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
SEPTEMBER 30, 1999
SELECT BOND FUND
- ----------------
SELECT BOND FUND
- ----------------
- -----------------------------------------------------------------------------
OBJECTIVE: To seek high income and capital appreciation, consistent with
preservation of capital.
PORTFOLIO: Diversified investment-grade corporate, mortgage-backed, Treasury
and government agency bonds, with maturities generally exceeding one year.
STRATEGY: To actively manage the portfolio to take advantage of changes in
interest rates, quality and maturity of fixed income securities.
NET ASSETS: $34.3 million
- -----------------------------------------------------------------------------
The Select Bond Fund invests in high-quality debt securities, primarily
government bonds, corporate bonds and mortgage-backed securities. Exposure to
market sectors is adjusted as yield spreads change among the various classes of
securities. Duration and maturity are altered with moderate adjustments in
recognition or anticipation of interest rate changes.
In a difficult environment for bonds in general, the Select Bond Fund has
performed well in recent months, significantly outperforming the indices with
which it is compared. Through most of 1999, the Fund has been managed with a
defensive posture toward interest rates, predicting correctly that rates were
likely to rise. At the beginning of the fourth calendar quarter, the Fund is in
a neutral position with regard to interest rates.
With interest rates now approximately 100 basis points (one percentage point)
higher than they were at the beginning of 1999, the bond market's expectation
that interest rates would rise has been realized. Although further rate
increases are possible, especially in light of recent reports that suggest
inflation is picking up, the market is now more focused on credit risk than on
interest rate risk. If an economic slowdown develops, the effect on the
financial strength of companies that issue bonds could cause concern about
credit risk to increase.
The Fund's focus in recent months has been on quality and liquidity, with
holdings concentrated in well-known names with ratings of AA or better. To take
advantage of the relatively wide spreads between corporate and U.S. government
bonds, a portion of the position in government securities is being replaced with
quality corporate issues. The Fund has a normal size position in mortgages,
which have minimal credit risk because of the implicit government guarantee that
backs them. Mortgages have recently become less attractive after a period of
excellent performance relative to corporate bonds; mortgages have performed well
as interest rates have increased, since higher rates reduce the risk of
prepayment.
PERCENTAGE HOLDINGS
9/30/99
Money Market Investments, Net of Other Assets 5%
Corporate Bonds 22%
Government and Government Agencies 32%
Mortgage-Backed and Asset-Backed Securities 41%
The Corporate Bonds sector includes bonds of companies headquartered outside the
United States. The Government and Government Agencies category includes taxable
bonds of domestic and foreign governments. Consistent with the Fund's stated
parameters, no more than 15% of the portfolio is invested in foreign securities,
and no more than 15% is invested in high yield securities.
<PAGE>
M A S O N S T R E E T F U N D S
SELECT BOND FUND
PERFORMANCE RELATIVE TO
MERRILL LYNCH DOMESTIC MASTER INDEX
<TABLE>
<CAPTION>
3/31/97 9/30/97 3/31/98 9/30/98 3/31/99 9/30/99
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
SELECT BOND FUND CLASS A 9,524 10,358 10,677 10,743 11,168 11,261
SELECT BOND FUND CLASS B 10,000 10,838 11,134 11,165 11,569 11,627
SELECT BOND FUND CLASS B
REDEMPTION VALUE 11,344
MERRILL LYNCH DOMESTIC
MASTER INDEX 10,000 10,712 11,205 11,955 11,934 11,908
</TABLE>
TOTAL RETURN Average
Annual
One Since
For the periods ended September 30, 1999 Year Inception<F1>
- ---------------------------------------------------------------------
Select Bond Fund
(Class A - without initial sales charge) 4.82% 6.93%
- ---------------------------------------------------------------------
Merrill Lynch
Domestic Master Index (0.39)% 7.23%
- ---------------------------------------------------------------------
<F1>Fund inception date is 3/31/97. Returns are annualized.
Since the Fund invests broadly in U.S. government, mortgage and corporate bonds,
the graph depicts an appropriate comparison to the Merrill Lynch Domestic Master
Index. The index is an unmanaged market value weighted index comprised of U.S.
government, mortgage and investment-grade corporate bonds. The index measures
the income provided by, and the price changes of, the underlying securities. The
index cannot be invested in directly and does not include sales charges.
This graph assumes an initial investment of $10,000 made in Class A and Class B
shares, with all sales charges on March 31, 1997 (commencement of operations).
Returns shown include fee waivers and deductions for all Fund expenses. In the
absence of fee waivers, total return would be reduced. Past performance is not
predictive of future performance. Investment return and principal value will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. Returns on p. 3 reflect the maximum sales charge for Class
A and a 5% contingent deferred sales charge for Class B One Year and 3% for
Since Inception.
SCHEDULE OF INVESTMENTS
Shares/Par Market Value
-----------------------------------------------------------------------
BONDS (94.9%)
CORPORATE BONDS (22.3%)
AUTO RELATED (4.5%)
DaimlerChrysler North America
Holdings, 6.9%, 9/1/04 550,000 $552,042
Ford Motor Credit Corporation,
5.57%, 7/16/02 300,000 299,217
Ford Motor Credit Corporation,
6.7%, 7/16/04 700,000 695,487
-----------------------------------------------------------------------
TOTAL 1,546,746
-----------------------------------------------------------------------
BANK HOLDING COMPANIES (1.4%)
NationsBank Lease Pass Thru Trust,
Class 1, 7.442%, 1/10/11 (144A) 500,000 497,630
-----------------------------------------------------------------------
COSMETICS & TOILETRIES (1.7%)
Procter & Gamble Company,
6.875%, 9/15/09 600,000 601,423
-----------------------------------------------------------------------
ELECTRIC SERVICES (5.0%)
Comed Transitional Funding Trust,
Class A7, 5.74%, 12/25/10 750,000 683,235
Comed Financing II, 8.5%, 1/15/27 250,000 257,185
PECO Energy Transition Trust,
Class A7, 6.13%, 3/1/09 800,000 754,544
-----------------------------------------------------------------------
TOTAL 1,694,964
-----------------------------------------------------------------------
GENERAL MERCHANDISE STORES (2.2%)
Wal-Mart Stores, Inc., 6.55%, 8/10/04 750,000 752,436
-----------------------------------------------------------------------
HEALTHCARE (2.0%)
Johnson & Johnson, 6.625%, 9/1/09 700,000 695,559
-----------------------------------------------------------------------
RETAILERS (1.4%)
LB Mortgage Trust - Class A3,
8.396%, 1/20/17 452,789 471,389
-----------------------------------------------------------------------
TELECOMMUNICATIONS (3.5%)
AT&T Corporation, 5.625%, 3/15/04 500,000 479,382
AT&T Corporation, 6.5%, 9/15/02 250,000 249,404
New England Telephone and Telegraph,
5.875%, 4/15/09 500,000 461,866
-----------------------------------------------------------------------
TOTAL 1,190,652
-----------------------------------------------------------------------
TEXTILES (0.6%)
<F1>Polysindo International Finance,
<F2> 11.375%, 6/15/06 800,000 200,000
-----------------------------------------------------------------------
TOTAL CORPORATE BONDS 7,650,799
-----------------------------------------------------------------------
<PAGE>
SEPTEMBER 30, 1999
SELECT BOND FUND
Shares/Par Market Value
-----------------------------------------------------------------------
GOVERNMENT BONDS
(DOMESTIC AND FOREIGN)
AND AGENCY BONDS (31.7%)
FEDERAL GOVERNMENT AND AGENCIES (31.7%)
Federal Home Loan Bank,
5.54%, 1/8/09 300,000 $272,355
Federal Home Loan Mortgage
Corporation, 7.5%, 10/1/27 970,805 976,931
Federal National Mortgage
Association, 5.97%, 10/1/08 393,981 374,204
Federal National Mortgage
Association, 6.07%, 10/1/08 247,406 239,589
Federal National Mortgage
Association, 6.22%, 2/1/06 481,440 468,715
Federal National Mortgage
Association, 6.265%, 10/1/08 247,501 239,134
Federal National Mortgage
Association, 6.39%, 4/1/08 489,069 477,408
Federal National Mortgage
Association, 6.96%, 10/1/07 294,878 297,190
Federal National Mortgage
Association, 7.36%, 4/1/11 475,004 490,604
Federal National Mortgage
Association, 10%, 10/1/17 33,414 35,636
Federal National Mortgage
Association, 11%, 12/1/12 33,164 36,042
Federal National Mortgage
Association, 11%, 9/1/17 255,852 281,033
Federal National Mortgage
Association, 11%, 12/1/17 74,571 81,658
Federal National Mortgage
Association, 11%, 2/1/18 96,252 105,399
Federal National Mortgage
Association, 11.5%, 4/1/18 157,544 175,062
Federal National Mortgage
Association, 12%, 9/1/12 249,615 279,326
Federal National Mortgage
Association, 12%, 12/1/12 48,862 54,359
Federal National Mortgage
Association, 12%, 9/1/17 80,740 90,953
Federal National Mortgage
Association, 12%, 10/1/17 93,767 105,533
Federal National Mortgage
Association, 12%, 12/1/17 75,838 85,436
Federal National Mortgage
Association, 12%, 2/1/18 84,540 95,159
Federal National Mortgage
Association, 12.25%, 1/1/18 41,915 47,139
Federal National Mortgage
Association, 12.5%, 4/1/18 68,188 77,246
Shares/Par Market Value
-----------------------------------------------------------------------
FEDERAL GOVERNMENT AND AGENCIES (CONTINUED)
Federal National Mortgage
Association, 13%, 11/1/07 154,661 $177,656
Federal National Mortgage
Association, 13%, 11/1/12 32,590 36,961
Federal National Mortgage
Association, 13%, 12/1/17 55,159 63,326
Federal National Mortgage
Association, 13%, 2/1/18 117,957 135,430
Federal National Mortgage
Association, 14%, 12/1/17 30,303 35,770
Government National Mortgage
Association, 7.5%, 6/15/28 310,610 311,768
Government National Mortgage
Association, 8%, 12/15/26 343,592 351,697
Government National Mortgage
Association, 8%, 7/15/27 210,875 215,810
Government National Mortgage
Association, 11%, 1/15/18 370,700 415,655
Treasury Inflation Index,
3.875%, 4/15/29 1,013,830 979,809
US Treasury, 4.75%, 11/15/08 850,000 774,031
US Treasury, 5.25%, 2/15/29 700,000 612,063
US Treasury, 5.5%, 8/15/28 200,000 179,000
US Treasury, 7.25%, 5/15/16 425,000 459,399
Vendee Mortgage Trust,
.495%, 6/15/23 IO 30,399,624 518,922
Vendee Mortgage Trust, Class E,
6.5%, 3/15/29 250,000 229,948
-----------------------------------------------------------------------
TOTAL 10,883,356
-----------------------------------------------------------------------
TOTAL GOVERNMENT AND AGENCY BONDS 10,883,356
-----------------------------------------------------------------------
MORTGAGE-BACKED AND ASSET-BACKED SECURITIES (40.9%)
COMMERCIAL MORTGAGES (28.8%)
Asset Securitization Corporation,
Class CS1, 1.257%, 11/13/26 IO 13,922,799 416,988
Asset Securitization Corporation,
Class A3, 7.119%, 2/14/41 450,000 417,987
<F2>Chase Commercial Mortgage
Securities Corp., Class A2,
6.6%, 12/12/29 500,000 486,035
<F2>Chase Commercial Mortgage
Securities Corp., Class B,
6.6%, 12/12/29 500,000 480,040
<F2>Commercial Mortgage Acceptance
Corporation, Class B,
6.644%, 12/15/07 500,000 484,675
Commercial Mortgage Asset Trust,
Class C, 7.35%, 8/17/13 750,000 712,973
<PAGE>
M A S O N S T R E E T F U N D S
SELECT BOND FUND
Shares/Par Market Value
-----------------------------------------------------------------------
COMMERCIAL MORTGAGES (CONTINUED)
Credit Suisse First Boston Mortgage
Securities Corp., Class B,
9.546%, 4/25/25 (144A) 457,000 $488,839
Credit Suisse First Boston Mortgage
Securities Corp., Class A2,
7.26%, 6/20/29 (144A) 240,349 240,419
<F2>Credit Suisse First Boston Mortgage
Securities Corp., Class B,
7.28%, 6/20/29 (144A) 250,000 251,858
<F2>Criimi Mae Commercial Mortgage
Trust, Class A1, 7%, 11/2/06 500,000 451,430
Criimi Mae Commercial Mortgage
Trust, Class B, 7%, 11/2/11 600,000 454,125
DLJ Mortgage Acceptance Corp.,
Class S, .3571%, 10/15/17
(144A) IO 29,406,316 620,289
DLJ Mortgage Acceptance Corp.,
Class S, .718%, 2/15/31 IO 19,983,185 730,585
DLJ Mortgage Acceptance Corp.,
Class A1, 8.1%, 6/18/04 288,767 301,519
DLJ Mortgage Acceptance Corp.,
Class A2, 8.1%, 6/18/04 350,000 364,973
Merrill Lynch Mortgage
Investors, Inc., Class E,
8.392%, 6/25/22 (144A) 500,000 499,425
Midland Realty Acceptance Corp.,
Class AEC, 1.389%, 1/25/29
(144A) IO 9,172,885 525,423
Morgan Stanley Capital,
Class A3, 7.3875%, 8/15/06 400,000 412,452
Mortgage Capital Funding, Inc.,
Class A3, 7.288%, 3/20/07 400,000 403,303
<F2>Nomura Asset Securities Corp.,
7.016%, 3/15/30 200,000 186,735
<F2>Nomura Asset Securities Corp.,
7.596%, 3/15/30 600,000 533,921
<F2>Red Mountain Funding L. L. C.,
Class E, 7.365%, 1/15/19 (144A) 176,000 143,837
<F2>Red Mountain Funding L. L. C.,
Class F, 7.471%, 1/15/19 (144A) 400,000 285,727
-----------------------------------------------------------------------
TOTAL 9,893,558
-----------------------------------------------------------------------
CREDIT CARD ASSET-BACKED (0.6%)
<F2>Iroquois Trust, Class A,
6.752%, 6/25/07 (144A) 216,050 214,533
-----------------------------------------------------------------------
Shares/Par Market Value
-----------------------------------------------------------------------
FRANCHISE LOAN RECEIVABLES (4.4%)
EMAC Owner Trust, 1.378%,
1/15/23 (144A) IO 13,531,122 $862,609
EMAC Owner Trust, Class A2,
6.38%, 4/15/07 (144A) 400,000 386,688
Global Franchise Trust, Class A1,
6.349%, 4/10/04 (144A) 271,227 266,459
-----------------------------------------------------------------------
TOTAL 1,515,756
-----------------------------------------------------------------------
HOME EQUITY LOAN (0.9%)
Amresco Residential Securities,
Class A2, 6.245%, 4/25/22 300,000 298,713
-----------------------------------------------------------------------
MANUFACTURED HOUSING (1.6%)
Mid-State Trust VI - Class A3,
7.54%, 7/1/35 553,393 549,270
-----------------------------------------------------------------------
OTHER ASSET-BACKED (3.5%)
FMAC Loan Receivables Trust
98 - A, 6.2%, 9/15/20 241,203 236,341
Harley-Davidson Eaglemark Trust,
Class A2, 5.87%, 4/15/04 300,000 294,765
<F2>Heilig Meyers Master Trust,
6.125%, 1/20/07 500,000 489,855
Newcourt Equipment - Class B,
6.764%, 9/20/04 (144A) 173,113 172,542
-----------------------------------------------------------------------
TOTAL 1,193,503
-----------------------------------------------------------------------
RESIDENTIAL MORTGAGES (1.1%)
BCF L L C Mortgage Pass Thru
Certificate, Class B3, 7.75%,
3/25/37 (144A) 323,600 152,092
Blackrock Capital Finance, Class B3,
7.25%, 11/25/28 (144A) 483,618 217,628
-----------------------------------------------------------------------
TOTAL 369,720
-----------------------------------------------------------------------
TOTAL MORTGAGE-BACKED
AND ASSET-BACKED SECURITIES 14,035,053
=======================================================================
TOTAL BONDS 32,569,208
=======================================================================
WARRANTS (0.0%)
FOREIGN GOVERNMENT (0.0%)
Republic of Argentina 600 600
-----------------------------------------------------------------------
MONEY MARKET INVESTMENTS (4.3%)
FEDERAL GOVERNMENT AND AGENCIES (1.4%)
<F2>Federal Home Loan Mortgage
Corporation, 5.539%, 1/20/00 500,000 491,095
-----------------------------------------------------------------------
<PAGE>
SEPTEMBER 30, 1999
SELECT BOND FUND
Shares/Par Market Value
-----------------------------------------------------------------------
PERSONAL CREDIT INSTITUTIONS (2.9%)
General Electric Capital Corporation,
5.31%, 10/13/99 1,000,000 $998,230
-----------------------------------------------------------------------
TOTAL MONEY MARKET INVESTMENTS 1,489,325
=======================================================================
TOTAL INVESTMENTS (99.2%)
(Cost $34,746,952)<F3> 34,059,133
=======================================================================
OTHER ASSETS, LESS LIABILITIES (0.8%) 257,598
=======================================================================
TOTAL NET ASSETS (100.0%) $34,316,731
=======================================================================
IO - Interest Only Security
<F1> Defaulted Security
144A after the name of a security represents a security exempt from
registration under Rule 144A of the Securities Act of 1933. These securities
may be resold as transactions exempt from registration, normally to qualified
institutional buyers.
<F2> Partially held by the custodian in a segregated account as collateral for
open futures positions. Information regarding open futures contracts as of
September 30, 1999 is summarized below:
Number of Expiration Unrealized
Issuers Contracts Date Appreciation
- -----------------------------------------------------------------------
90 Day Euro Futures
(Total notional value at
9/30/99, $(2,589,675)) 11 12/99 $3,713
<F3>At September 30, 1999, the aggregate cost of securities for federal income
tax purposes was $36,746,952 and the net unrealized depreciation of
investments based on that cost was $2,687,819 which is comprised of
$21,134 aggregate gross unrealized appreciation and $2,708,953 aggregate
gross unrealized depreciation.
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
M A S O N S T R E E T F U N D S
SMALL CAP GROWTH STOCK FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1999
- -------------------------------------------------------------------------------
ASSETS
Common Stocks (cost $5,019,324) $5,082,650
Money Market Investments (cost $398,454) 398,378
- -------------------------------------------------------------------------------
5,481,028
- -------------------------------------------------------------------------------
Cash 76,211
Due from Sale of Securities 33,044
Due from Investment Advisor 12,595
Due from Sale of Fund Shares 5,680
Futures Variation Margin 2,575
Dividends and Interest Receivable 245
- -------------------------------------------------------------------------------
TOTAL ASSETS 5,611,378
- -------------------------------------------------------------------------------
LIABILITIES
Due on Purchase of Securities 51,543
Other Accrued Liabilities 18,194
Accrued Registration Fees 3,747
Accrued Distribution Expense 1,160
Accrued Administrative Fees 438
- -------------------------------------------------------------------------------
TOTAL LIABILITIES 75,082
- -------------------------------------------------------------------------------
NET ASSETS $5,536,296
===============================================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 532,997 shares outstanding) $5,340,253
Undistributed Net Investment Loss (11,540)
Undistributed Accumulated Net
Realized Gain on Investments 149,858
Net Unrealized Appreciation (Depreciation) of:
Investment Securities 63,250
Index Futures Contracts (5,525)
- -------------------------------------------------------------------------------
NET ASSETS FOR 532,997
SHARES OUTSTANDING $5,536,296
===============================================================================
Per Share of Class A (Based on 472,299
Shares Issued and Outstanding):
OFFERING PRICE $10.91
===============================================================================
NET ASSET VALUE AND REDEMPTION PRICE $10.39
===============================================================================
Per Share of Class B (Based on 60,698
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $10.38
===============================================================================
STATEMENT OF OPERATIONS
For the Period July 12, 1999 through September 30, 1999<F1>
- -------------------------------------------------------------------------------
INVESTMENT INCOME
Income
Interest $4,813
Dividends 387
- -------------------------------------------------------------------------------
TOTAL INCOME 5,200
- -------------------------------------------------------------------------------
Expenses
Transfer Agent Fees 13,688
Management Fees 9,654
Registration Fees 9,154
Shareholder Reporting Expenses 5,675
Audit Fees 5,171
Custody Fees 4,380
Shareholder Servicing Fees 2,839
Distribution Fees:
Class A 1,014
Class B 916
Professional Fees 1,369
Administrative Fees 1,136
Directors Fees 830
Other Expenses 380
- -------------------------------------------------------------------------------
TOTAL EXPENSES 56,206
- -------------------------------------------------------------------------------
Less:
Expenses Reimbursed by Affiliates (39,466)
- -------------------------------------------------------------------------------
TOTAL NET EXPENSES 16,740
- -------------------------------------------------------------------------------
NET INVESTMENT LOSS (11,540)
- -------------------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Net Realized Gain on Investments:
Investment Securities 147,820
Futures Contracts 2,038
- -------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS
FOR THE PERIOD 149,858
- -------------------------------------------------------------------------------
Net Change in Unrealized Appreciation
(Depreciation) of:
Investment Securities 63,250
Futures Contracts (5,525)
- -------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
OF INVESTMENTS FOR THE PERIOD 57,725
- -------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS 207,583
- -------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $196,043
===============================================================================
<F1> Fund commenced operations on July 12, 1999.
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
SEPTEMBER 30, 1999
SMALL CAP GROWTH STOCK FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Period
July 12, 1999
through
September 30, 1999<F1>
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
INCREASE IN NET ASSETS
Operations
Net Investment Loss $(11,540)
Net Realized Gain on Investments 149,858
Net Change in Unrealized Appreciation of Investments for the Period 57,725
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations 196,043
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders from Net Investment Income -
Distributions to Class A Shareholders from Net Realized Gain on Investments -
Distributions to Class B Shareholders from Net Investment Income -
Distributions to Class B Shareholders from Net Realized Gain on Investments -
- -----------------------------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Distributions to Shareholders -
- -----------------------------------------------------------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 476,959 Shares 4,776,559
Payments for 5,160 Shares Redeemed (50,000)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class A Fund Share Transactions (471,799 shares) 4,726,559
- -----------------------------------------------------------------------------------------------------------------------------------
Class B
Proceeds from Sale of 60,248 Shares 604,212
Payments for 50 Shares Redeemed (518)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class B Fund Share Transactions (60,198 shares) 603,694
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 5,526,296
NET ASSETS
Beginning of Period 10,000
- -----------------------------------------------------------------------------------------------------------------------------------
END OF PERIOD (INCLUDES UNDISTRIBUTED NET INVESTMENT LOSS OF $11,540) $5,536,296
===================================================================================================================================
</TABLE>
<F1> Fund commenced operations on July 12, 1999.
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
M A S O N S T R E E T F U N D S
SMALL CAP GROWTH STOCK FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A CLASS B
-------------- ---------------
For the Period For the Period
July 12, 1999 July 12, 1999
through through
September 30, September 30,
1999<F1> 1999<F1>
(For a share outstanding throughout the period) (Unaudited) (Unaudited)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $10.00 $10.00
Income from Investment Operations:
Net Investment Loss (0.02) (0.03)
Net Realized and Unrealized Gains on Investments 0.41 0.41
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 0.39 0.38
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net Investment Income 0.00 0.00
Distributions from Realized Gains on Investments 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $10.39 $10.38
===================================================================================================================================
TOTAL RETURN<F2> 3.90%<F4> 3.80%<F4>
===================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $4,906,524 $629,772
===================================================================================================================================
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS 4.86%<F3> 5.52%<F3>
===================================================================================================================================
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS 1.40%<F3> 2.05%<F3>
===================================================================================================================================
RATIO OF NET INVESTMENT LOSS TO AVERAGE NET ASSETS (1.03)%<F3> (1.68)%<F3>
===================================================================================================================================
PORTFOLIO TURNOVER RATE 22.05% 22.05%
===================================================================================================================================
</TABLE>
<F1> Fund commenced operations on July 12, 1999.
<F2> Total return includes deductions for management and other Fund expenses;
excludes deductions for sales loads and contingent deferred sales charges.
Returns include fee waivers in effect. In the absence of fee waivers, total
return would be reduced.
<F3> Computed on an annualized basis.
<F4> Reflects total return for the period 7/12/99 - 9/30/99. Returns are not
annualized.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
SEPTEMBER 30, 1999
AGGRESSIVE GROWTH STOCK FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1999
- -------------------------------------------------------------------------------
ASSETS
Common Stocks (cost $43,621,272) $56,195,320
Money Market Investments (cost $3,490,222) 3,490,003
- -------------------------------------------------------------------------------
59,685,323
- -------------------------------------------------------------------------------
Cash 52,084
Due from Sale of Fund Shares 21,185
Unamortized Organizational Costs 10,327
Dividends and Interest Receivable 7,581
Futures Variation Margin 1,200
- -------------------------------------------------------------------------------
TOTAL ASSETS 59,777,700
- -------------------------------------------------------------------------------
LIABILITIES
Due on Purchase of Securities 436,490
Due to Investment Advisor 27,672
Other Accrued Liabilities 11,207
Due on Redemption of Fund Shares 10,701
Accrued Shareholder Servicing Fees 7,315
Accrued Distribution Expense 5,097
Accrued Administrative Fees 4,418
- -------------------------------------------------------------------------------
TOTAL LIABILITIES 502,900
- -------------------------------------------------------------------------------
NET ASSETS $59,274,800
===============================================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 3,645,911 shares outstanding) $40,198,785
Undistributed Net Investment Loss (973,464)
Undistributed Accumulated Net
Realized Gain on Investments 7,561,875
Net Unrealized Appreciation (Depreciation) of:
Investment Securities 12,573,829
Futures Contracts (86,225)
- -------------------------------------------------------------------------------
NET ASSETS FOR 3,645,911
SHARES OUTSTANDING $59,274,800
===============================================================================
Per Share of Class A (Based on 3,247,052
Shares Issued and Outstanding):
OFFERING PRICE $17.09
===============================================================================
NET ASSET VALUE AND REDEMPTION PRICE $16.28
===============================================================================
Per Share of Class B (Based on 398,859
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $16.05
===============================================================================
STATEMENT OF OPERATIONS
For the Six Months Ended September 30, 1999
- -------------------------------------------------------------------------------
INVESTMENT INCOME
Income
Interest $90,382
Dividends 24,211
- -------------------------------------------------------------------------------
TOTAL INCOME 114,593
- -------------------------------------------------------------------------------
Expenses
Management Fees 210,664
Shareholder Servicing Fees 70,221
Distribution Fees:
Class A 25,176
Class B 21,847
Transfer Agent Fees 37,852
Administrative Fees 28,088
Other Expenses 26,619
Registration Fees 12,027
Custody Fees 7,285
- -------------------------------------------------------------------------------
TOTAL EXPENSES 439,779
- -------------------------------------------------------------------------------
Less:
Custodian Fees Paid Indirectly (1,617)
Other Expenses Reimbursed by Affiliates (55,133)
- -------------------------------------------------------------------------------
TOTAL NET EXPENSES 383,029
- -------------------------------------------------------------------------------
NET INVESTMENT LOSS (268,436)
- -------------------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Net Realized Gain on Investments:
Investment Securities 5,463,927
Futures Contracts 14,952
- -------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS
FOR THE PERIOD 5,478,879
- -------------------------------------------------------------------------------
Net Change in Unrealized Appreciation
(Depreciation) of:
Investment Securities 3,930,939
Futures Contracts (86,225)
- -------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
OF INVESTMENTS 3,844,714
- -------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS 9,323,593
- -------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $9,055,157
===============================================================================
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
M A S O N S T R E E T F U N D S
AGGRESSIVE GROWTH STOCK FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Six
Months Ended For the
September 30, 1999 Year Ended
(Unaudited) March 31, 1999
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations
Net Investment Loss $(268,436) $(372,860)
Net Realized Gain on Investments 5,478,879 2,546,341
Net Change in Unrealized Appreciation (Depreciation) of Investments for the Period 3,844,714 (3,477,719)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations 9,055,157 (1,304,238)
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders from Net Realized Gain on Investments - (700,361)
Distributions to Class B Shareholders from Net Realized Gain on Investments - (69,963)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Distributions to Shareholders - (770,324)
- -----------------------------------------------------------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 118,503 and 416,459 Shares 1,862,448 5,382,644
Proceeds from Shares Issued on Reinvestment of Distributions Paid (0 and 50,009 shares) - 699,202
Payments for 64,027 and 145,127 Shares Redeemed (1,007,569) (1,845,647)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class A Fund Share Transactions (54,476 and 321,341 shares) 854,879 4,236,199
- -----------------------------------------------------------------------------------------------------------------------------------
Class B
Proceeds from Sale of 75,545 and 241,417 Shares 1,175,807 3,182,223
Proceeds from Shares Issued on Reinvestment of Distributions Paid (0 and 5,009 shares) - 69,331
Payments for 22,481 and 30,203 Shares Redeemed (345,976) (387,831)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class B Fund Share Transactions (53,064 and 216,223 shares) 829,831 2,863,723
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 10,739,867 5,025,360
NET ASSETS
Beginning of Period 48,535,685 43,510,325
- -----------------------------------------------------------------------------------------------------------------------------------
END OF PERIOD (INCLUDES UNDISTRIBUTED NET INVESTMENT LOSS OF
$973,464 AND $0, RESPECTIVELY) $59,275,552 $48,535,685
===================================================================================================================================
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
SEPTEMBER 30, 1999
AGGRESSIVE GROWTH STOCK FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A CLASS A CLASS A CLASS B CLASS B CLASS B
------------ ------------ ------------ ------------ ------------ ------------
For the Six For the For the For the Six For the For the
Months Ended Year Year Months Ended Year Year
September 30, Ended Ended September 30, Ended Ended
(For a share outstanding 1999 March 31, March 31, 1999 March 31, March 31,
throughout the period) (Unaudited) 1999 1998 (Unaudited) 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $13.73 $14.50 $10.00 $13.58 $14.43 $10.00
Income from Investment Operations:
Net Investment Loss (0.07) (0.11) (0.12)<F1> (0.11) (0.19) (0.21)<F1>
Net Realized and Unrealized Gains
(Losses) on Investments 2.62 (0.43) 5.18 2.58 (0.43) 5.18
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 2.55 (0.54) 5.06 2.47 (0.62) 4.97
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net
Investment Income 0.00 0.00 0.00 0.00 0.00 0.00
Distributions from Realized Gains
on Investments 0.00 (0.23) (0.56) 0.00 (0.23) (0.54)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.00 (0.23) (0.56) 0.00 (0.23) (0.54)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $16.28 $13.73 $14.50 $16.05 $13.58 $14.43
===================================================================================================================================
TOTAL RETURN<F2> 18.57%<F4> (3.78)% 51.57% 18.19%<F4> (4.35)% 50.59%
===================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $52,874,610 $43,840,289 $41,640,193 $6,400,190 $4,695,396 $1,870,132
===================================================================================================================================
RATIO OF GROSS EXPENSES TO
AVERAGE NET ASSETS 1.50%<F3> 1.62% 1.64% 2.15%<F3> 2.27% 2.29%
===================================================================================================================================
RATIO OF NET EXPENSES TO
AVERAGE NET ASSETS 1.30%<F3> 1.30% 1.30% 1.95%<F3> 1.95% 1.95%
===================================================================================================================================
RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS (0.89)%<F3> (0.80)% (0.96)% (1.54)%<F3> (1.45)% (1.61)%
===================================================================================================================================
PORTFOLIO TURNOVER RATE 43.69% 84.46% 64.91% 43.69% 84.46% 64.91%
===================================================================================================================================
</TABLE>
<F1> Calculated based on average shares outstanding.
<F2> Total return includes deductions for management and other Fund expenses;
excludes deductions for sales loads and contingent deferred sales charges.
Returns include fee waivers in effect. In the absence of fee waivers, total
return would be reduced.
<F3> Computed on an annualized basis.
<F4> Reflects total return for the period; not annualized.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
M A S O N S T R E E T F U N D S
INTERNATIONAL EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1999
- -------------------------------------------------------------------------------
ASSETS
Common Stocks (cost $33,101,930) $32,427,655
Money Market Investments (cost $1,498,102) 1,498,102
- -------------------------------------------------------------------------------
33,925,757
- -------------------------------------------------------------------------------
Due from Sale of Securities 1,562,071
Dividends Receivable 173,618
Due from Purchase of Fund Shares 28,163
Unamortized Organizational Costs 10,316
Prepaid Registration Fees 85
- -------------------------------------------------------------------------------
TOTAL ASSETS 35,700,010
- -------------------------------------------------------------------------------
LIABILITIES
Due on Purchase of Securities 1,508,068
Due to Investment Advisor 40,181
Accrued Administrative Fees 12,229
Other Accrued Liabilities 4,179
Accrued Shareholder Servicing Fees 3,336
Accrued Distribution Expense 2,797
- -------------------------------------------------------------------------------
TOTAL LIABILITIES 1,570,790
- -------------------------------------------------------------------------------
NET ASSETS $34,129,220
===============================================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 3,525,505 shares outstanding) $34,964,801
Undistributed Net Investment Income 427,014
Undistributed Accumulated Net
Realized Loss on Investments (586,052)
Net Unrealized Depreciation of:
Investment Securities (674,275)
Foreign Currency Transactions (2,268)
- -------------------------------------------------------------------------------
NET ASSETS FOR 3,525,505
SHARES OUTSTANDING $34,129,220
===============================================================================
Per Share of Class A (Based on
3,173,899 Shares Issued and Outstanding):
OFFERING PRICE $10.17
===============================================================================
NET ASSET VALUE AND REDEMPTION PRICE $9.69
===============================================================================
Per Share of Class B (Based on 351,606
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $9.60
===============================================================================
STATEMENT OF OPERATIONS
For the Six Months Ended September 30, 1999
- -------------------------------------------------------------------------------
INVESTMENT INCOME
Income
Dividends (less foreign dividend tax of $55,145) $630,562
Interest 47,111
- -------------------------------------------------------------------------------
TOTAL INCOME 677,673
- -------------------------------------------------------------------------------
Expenses
Management Fees 144,835
Shareholder Servicing Fees 42,599
Transfer Agent Fees 33,489
Distribution Fees:
Class A 15,447
Class B 11,946
Custody Fees 17,093
Administrative Fees 17,042
Registration Fees 11,265
Audit Fees 9,274
Shareholder Reporting Expenses 5,565
Directors Fees 3,622
Other Expenses 2,286
Professional Fees 1,347
- -------------------------------------------------------------------------------
TOTAL EXPENSES 315,810
- -------------------------------------------------------------------------------
Less:
Expenses Reimbursed by Affiliates (24,303)
- -------------------------------------------------------------------------------
TOTAL NET EXPENSES 291,507
- -------------------------------------------------------------------------------
NET INVESTMENT INCOME 386,166
- -------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCIES
Net Realized Gain (Loss) on:
Investment Securities 622,044
Foreign Currency Transactions (22,320)
- -------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS
FOR THE PERIOD 599,724
- -------------------------------------------------------------------------------
Net Change in Unrealized Appreciation
(Depreciation) of:
Investment Securities 1,058,036
Foreign Currency Transactions (4,072)
- -------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED
APPRECIATION FOR THE PERIOD 1,053,964
- -------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS 1,653,688
- -------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $2,039,854
===============================================================================
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
SEPTEMBER 30, 1999
INTERNATIONAL EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Six
Months Ended For the
September 30, 1999 Year Ended
(Unaudited) March 31, 1999
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations
Net Investment Income $386,166 $524,302
Net Realized Gain (Loss) on Investments 599,724 (165,221)
Net Unrealized Appreciation (Depreciation) of Investments and
Foreign Currency Transactions 1,053,964 (3,151,666)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations 2,039,854 (2,792,585)
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders from Net Investment Income - (488,292)
Distributions to Class A Shareholders from Net Realized Gain on Investments - (1,103,595)
Distributions to Class B Shareholders from Net Investment Income - (34,474)
Distributions to Class B Shareholders from Net Realized Gain on Investments - (101,379)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Distributions to Shareholders - (1,727,740)
- -----------------------------------------------------------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 72,573 and 268,605 Shares 718,997 2,576,879
Proceeds from Shares Issued on Reinvestment of Distributions Paid (0 and 177,719 shares) - 1,588,807
Payments for 39,511 and 88,775 Shares Redeemed (385,956) (830,681)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class A Fund Share Transactions (33,062 and 357,549 shares) 333,041 3,335,005
- -----------------------------------------------------------------------------------------------------------------------------------
Class B
Proceeds from Sale of 63,809 and 173,803 Shares 625,332 1,643,961
Proceeds from Shares Issued on Reinvestment of Distributions Paid (0 and 15,136 shares) - 134,559
Payments for 13,352 and 24,956 Shares Redeemed (130,681) (228,283)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class B Fund Share Transactions (50,457 and 163,983 shares) 494,651 1,550,237
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 2,867,546 364,917
NET ASSETS
Beginning of Period 31,261,674 30,896,757
- -----------------------------------------------------------------------------------------------------------------------------------
END OF PERIOD (INCLUDES UNDISTRIBUTED NET INVESTMENT INCOME OF $427,014 AND $72,169) $34,129,220 $31,261,674
===================================================================================================================================
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
M A S O N S T R E E T F U N D S
INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A CLASS A CLASS A CLASS B CLASS B CLASS B
------------ ------------ ------------ ------------ ------------ ------------
For the Six For the For the For the Six For the For the
Months Ended Year Year Months Ended Year Year
September 30, Ended Ended September 30, Ended Ended
(For a share outstanding 1999 March 31, March 31, 1999 March 31, March 31,
throughout the period) (Unaudited) 1999 1998 (Unaudited) 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $9.09 $10.58 $10.00 $9.03 $10.53 $10.00
Income from Investment Operations:
Net Investment Income 0.11 0.19<F2> 0.24<F1> 0.07 0.14<F2> 0.10<F1>
Net Realized and Unrealized Gains
(Losses) on Investments 0.49 (1.13) 0.56 0.50 (1.13) 0.63
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 0.60 (0.94) 0.80 0.57 (0.99) 0.73
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net
Investment Income 0.00 (0.17) (0.22) 0.00 (0.13) (0.20)
Distributions from Realized Gains
on Investments 0.00 (0.38) 0.00 0.00 (0.38) 0.00
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.00 (0.55) (0.22) 0.00 (0.51) (0.20)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $9.69 $9.09 $10.58 $9.60 $9.03 $10.53
===================================================================================================================================
TOTAL RETURN<F5> 6.60%<F4> (8.85)% 8.19% 6.31%<F4> (9.36)% 7.49%
===================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $30,755,360 $28,543,601 $29,451,833 $3,373,860 $2,718,073 $1,444,924
===================================================================================================================================
RATIO OF GROSS EXPENSES TO
AVERAGE NET ASSETS 1.75%<F3> 1.91% 2.13% 2.44%<F3> 2.56% 2.78%
===================================================================================================================================
RATIO OF NET EXPENSES TO
AVERAGE NET ASSETS 1.65%<F3> 1.65% 1.65% 2.30%<F3> 2.30% 2.30%
===================================================================================================================================
RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS 2.65%<F3> 2.34% 2.34% 2.00%<F3> 1.69% 1.69%
===================================================================================================================================
PORTFOLIO TURNOVER RATE 18.51% 70.31% 10.07% 18.51% 70.31% 10.07%
===================================================================================================================================
</TABLE>
<F1> Calculated based on average shares outstanding.
<F2> Calculated prior to adjustment for certain book and tax income differences.
<F3> Computed on an annualized basis.
<F4> Reflects total return for the period; not annualized.
<F5> Total return includes deductions for management and other Fund expenses;
excludes deductions for sales loads and contingent deferred sales charges.
Returns include fee waivers in effect. In the absence of fee waivers, total
return would be reduced.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
SEPTEMBER 30, 1999
INDEX 400 STOCK FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1999
- -------------------------------------------------------------------------------
ASSETS
Common Stocks (cost $25,023,191) $22,564,219
Money Market Investments (cost $1,796,684) 1,796,608
- -------------------------------------------------------------------------------
24,360,827
- -------------------------------------------------------------------------------
Cash 83,610
Due from Sale of Fund Shares 332,741
Due from Sale of Securities 23,298
Dividends and Interest Receivable 20,873
Due from Investment Advisor 8,661
Futures Variation Margin 1,350
- -------------------------------------------------------------------------------
TOTAL ASSETS 24,831,360
- -------------------------------------------------------------------------------
LIABILITIES
Other Accrued Liabilities 25,422
Accrued Registration Fees 5,438
Accrued Shareholder Servicing Fees 3,702
Accrued Distribution Fees 3,221
Accrued Administrative Fees 2,061
- -------------------------------------------------------------------------------
TOTAL LIABILITIES 39,844
- -------------------------------------------------------------------------------
NET ASSETS $24,791,516
===============================================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 2,729,289 shares outstanding) $27,224,361
Undistributed Net Investment Income 23,058
Undistributed Accumulated Net
Realized Gain on Investments 95,582
Net Unrealized Depreciation of:
Investment Securities (2,459,048)
Index Futures Contracts (92,437)
- -------------------------------------------------------------------------------
NET ASSETS FOR 2,729,289
SHARES OUTSTANDING $24,791,516
===============================================================================
Per Share of Class A (Based on 2,527,998
Shares Issued and Outstanding):
OFFERING PRICE $9.53
===============================================================================
NET ASSET VALUE AND REDEMPTION PRICE $9.08
===============================================================================
Per Share of Class B (Based on 201,291
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $9.07
===============================================================================
STATEMENT OF OPERATIONS
For the Period July 12, 1999 through September 30, 1999<F1>
- -------------------------------------------------------------------------------
INVESTMENT INCOME
Income
Dividends $65,017
Interest 12,417
- -------------------------------------------------------------------------------
TOTAL INCOME 77,434
- -------------------------------------------------------------------------------
Expenses
Management Fees 22,100
Shareholder Servicing Fees 13,810
Transfer Agent Fees 13,688
Registration Fees 10,846
Distribution Fees:
Class A 5,257
Class B 2,008
Custody Fees 7,098
Shareholder Reporting Expenses 6,627
Administrative Fees 5,525
Audit Fees 5,171
Other Expenses 5,101
Professional Fees 1,369
Directors Fees 830
- -------------------------------------------------------------------------------
TOTAL EXPENSES 99,430
- -------------------------------------------------------------------------------
Less:
Expenses Reimbursed by Affiliates (45,055)
- -------------------------------------------------------------------------------
TOTAL NET EXPENSES 54,375
- -------------------------------------------------------------------------------
NET INVESTMENT INCOME 23,059
- -------------------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net Realized Gain (Loss) on:
Investment Securities 101,846
Index Futures Contracts (6,264)
- -------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS
FOR THE PERIOD 95,582
- -------------------------------------------------------------------------------
Net Change in Unrealized Depreciation of:
Investment Securities (2,459,049)
Index Futures Contracts (92,437)
- -------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED DEPRECIATION
OF INVESTMENTS FOR THE PERIOD (2,551,486)
- -------------------------------------------------------------------------------
NET LOSS ON INVESTMENTS (2,455,904)
- -------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS $(2,432,845)
===============================================================================
<F1> Fund commenced operations on July 12, 1999.
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
M A S O N S T R E E T F U N D S
INDEX 400 STOCK FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Period
July 12, 1999
through
September 30, 1999<F1>
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
INCREASE IN NET ASSETS
Operations
Net Investment Income $23,059
Net Realized Gain on Investments 95,582
Net Change in Unrealized Depreciation of Investments for the Period (2,551,486)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Operations (2,432,845)
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders from Net Investment Income -
Distributions to Class A Shareholders from Net Realized Gain on Investments -
Distributions to Class B Shareholders from Net Investment Income -
Distributions to Class B Shareholders from Net Realized Gain on Investments -
- -----------------------------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Distributions to Shareholders -
- -----------------------------------------------------------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 2,527,498 Shares 25,263,009
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class A Fund Share Transactions (2,527,498 shares) 25,263,009
- -----------------------------------------------------------------------------------------------------------------------------------
Class B
Proceeds from Sale of 201,555 Shares 1,958,606
Payments for 764 Shares Redeemed (7,254)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class B Fund Share Transactions (200,791 shares) 1,951,352
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 24,781,516
NET ASSETS
Beginning of Period 10,000
- -----------------------------------------------------------------------------------------------------------------------------------
END OF PERIOD (INCLUDES UNDISTRIBUTED NET INVESTMENT INCOME OF $23,058) $24,791,516
===================================================================================================================================
</TABLE>
<F1> Fund commenced operations on July 12, 1999.
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
SEPTEMBER 30, 1999
INDEX 400 STOCK FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A CLASS B
-------------- ---------------
For the Period For the Period
July 12, 1999 July 12, 1999
through through
September 30, September 30,
1999<F1> 1999<F1>
(For a share outstanding throughout the period) (Unaudited) (Unaudited)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $10.00 $10.00
Income from Investment Operations:
Net Investment Income 0.01 0.00
Net Realized and Unrealized Losses on Investments (0.93) (0.93)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS (0.92) (0.93)
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net Investment Income 0.00 0.00
Distributions from Realized Gains on Investments 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $9.08 $9.07
===================================================================================================================================
TOTAL RETURN<F2> (9.20)%<F4> (9.30)%<F4>
===================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $22,965,026 $1,826,490
===================================================================================================================================
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS 1.76%<F3> 2.43%<F3>
===================================================================================================================================
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS 0.95%<F3> 1.60%<F3>
===================================================================================================================================
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 0.20%<F3> (0.46)%<F3>
===================================================================================================================================
PORTFOLIO TURNOVER RATE 7.92% 7.92%
===================================================================================================================================
</TABLE>
<F1> Fund commenced operations on July 12, 1999.
<F2> Total return includes deductions for management and other Fund expenses;
excludes deductions for sales loads and contingent deferred sales charges.
Returns include fee waivers in effect. In the absence of fee waivers, total
return would be reduced.
<F3> Computed on an annualized basis.
<F4> Reflects total return for the period 7/12/99 - 9/30/99. Returns are not
annualized.
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
M A S O N S T R E E T F U N D S
GROWTH STOCK FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1999
- -------------------------------------------------------------------------------
ASSETS
Common Stocks (cost $33,864,635) $47,360,671
Money Market Investments (cost $8,052,335) 8,052,001
- -------------------------------------------------------------------------------
55,412,672
- -------------------------------------------------------------------------------
Cash 39,218
Due from Sale of Securities 282,896
Futures Variation Margin 96,075
Due from Sale of Fund Shares 74,745
Dividends and Interest Receivable 34,219
Unamortized Organizational Costs 10,327
- -------------------------------------------------------------------------------
TOTAL ASSETS 55,950,152
- -------------------------------------------------------------------------------
LIABILITIES
Due on Purchase of Securities 391,491
Due to Investment Advisor 26,281
Other Accrued Liabilities 14,597
Accrued Distribution Expense 4,265
Accrued Administrative Fees 4,179
Due on Redemption of Fund Shares 777
- -------------------------------------------------------------------------------
TOTAL LIABILITIES 441,590
- -------------------------------------------------------------------------------
NET ASSETS $55,508,562
===============================================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 3,447,705 shares outstanding) $38,505,206
Undistributed Net Investment Income 88,709
Undistributed Accumulated Net
Realized Gain on Investments 3,734,795
Net Unrealized Appreciation (Depreciation) of:
Investment Securities 13,495,702
Index Futures Contracts (315,850)
- -------------------------------------------------------------------------------
NET ASSETS FOR 3,447,705
SHARES OUTSTANDING $55,508,562
===============================================================================
Per Share of Class A (Based on
3,166,375 Shares Issued and Outstanding):
OFFERING PRICE $16.92
===============================================================================
NET ASSET VALUE AND REDEMPTION PRICE $16.12
===============================================================================
Per Share of Class B (Based on 281,330
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $15.93
===============================================================================
STATEMENT OF OPERATIONS
For the Six Months Ended September 30, 1999
- -------------------------------------------------------------------------------
INVESTMENT INCOME
Income
Dividends (less foreign dividend tax of $12,158) $261,144
Interest 242,601
- -------------------------------------------------------------------------------
TOTAL INCOME 503,745
- -------------------------------------------------------------------------------
Expenses
Management Fees 210,510
Shareholder Servicing Fees 70,170
Distribution Fees:
Class A 25,993
Class B 15,564
Transfer Agent Fees 35,443
Administrative Fees 28,068
Registration Fees 11,827
Other Expenses 11,258
Shareholder Reporting Expenses 9,872
Custody Fees 8,945
Directors Fees 2,627
Professional Fees 1,347
- -------------------------------------------------------------------------------
TOTAL EXPENSES 431,624
- -------------------------------------------------------------------------------
Less:
Custodian Fees Paid Indirectly (1,679)
Expenses Reimbursed by Affiliates (52,712)
- -------------------------------------------------------------------------------
TOTAL NET EXPENSES 377,233
- -------------------------------------------------------------------------------
NET INVESTMENT INCOME 126,512
- -------------------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Net Realized Gain on:
Investment Securities 2,243,945
Futures Contracts 74,370
- -------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS
FOR THE PERIOD 2,318,315
- -------------------------------------------------------------------------------
Net Change in Unrealized Depreciation of:
Investment Securities (1,464,846)
Index Futures Contracts (199,713)
- -------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED DEPRECIATION
OF INVESTMENTS FOR THE PERIOD (1,664,559)
- -------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS 653,756
- -------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $780,268
===============================================================================
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
SEPTEMBER 30, 1999
GROWTH STOCK FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Six
Months Ended For the
September 30, 1999 Year Ended
(Unaudited) March 31, 1999
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations
Net Investment Income $126,512 $171,762
Net Realized Gain on Investments 2,318,315 2,507,887
Net Change in Unrealized Appreciation (Depreciation) of Investments for the Period (1,664,559) 5,203,817
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations 780,268 7,883,466
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders from Net Investment Income - (164,011)
Distributions to Class A Shareholders from Net Realized Gain on Investments - (2,145,825)
Distributions to Class B Shareholders from Net Investment Income - (1,201)
Distributions to Class B Shareholders from Net Realized Gain on Investments - (114,146)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Distributions to Shareholders - (2,425,182)
- -----------------------------------------------------------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 99,544 and 259,874 Shares 1,651,848 3,785,341
Proceeds from Shares Issued on Reinvestment of Distributions Paid (0 and 151,179 shares) - 2,303,970
Payments for 26,448 and 29,649 Shares Redeemed (438,044) (440,425)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class A Fund Share Transactions (73,096 and 381,404 shares) 1,213,804 5,648,886
- -----------------------------------------------------------------------------------------------------------------------------------
Class B
Proceeds from Sale of 67,910 and 169,083 Shares 1,118,763 2,461,603
Proceeds from Shares Issued on Reinvestment of Distributions Paid (0 and 7,480 shares) - 113,195
Payments for 10,090 and 10,793 Shares Redeemed (165,578) (156,222)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class B Fund Share Transactions (57,820 and 165,770 shares) 953,185 2,418,576
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 2,947,257 13,525,746
NET ASSETS
Beginning of Period 52,561,305 39,035,559
- -----------------------------------------------------------------------------------------------------------------------------------
END OF PERIOD (INCLUDES UNDISTRIBUTED NET INVESTMENT INCOME OF
$88,709 AND $31,661, RESPECTIVELY) $55,508,562 $52,561,305
===================================================================================================================================
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
M A S O N S T R E E T F U N D S
GROWTH STOCK FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A CLASS A CLASS A CLASS B CLASS B CLASS B
------------ ------------ ------------ ------------ ------------ ------------
For the Six For the For the For the Six For the For the
Months Ended Year Year Months Ended Year Year
September 30, Ended Ended September 30, Ended Ended
(For a share outstanding 1999 March 31, March 31, 1999 March 31, March 31,
throughout the period) (Unaudited) 1999 1998 (Unaudited) 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $15.86 $14.10 $10.00 $15.73 $14.03 $10.00
Income from Investment Operations:
Net Investment Income (Loss) 0.04 0.04 0.04<F1> (0.01) (0.01) (0.05)<F1>
Net Realized and Unrealized Gains
on Investments 0.22 2.52 4.41 0.21 2.46 4.41
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 0.26 2.56 4.45 0.20 2.45 4.36
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net
Investment Income 0.00 (0.06) (0.05) 0.00 (0.01) (0.03)
Distributions from Realized Gains
on Investments 0.00 (0.74) (0.30) 0.00 (0.74) (0.30)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.00 (0.80) (0.35) 0.00 (0.75) (0.33)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $16.12 $15.86 $14.10 $15.93 $15.73 $14.03
===================================================================================================================================
TOTAL RETURN<F2> 1.64%<F4> 18.36% 45.08% 1.27%<F4> 17.66% 44.12%
===================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $51,026,408 $49,045,112 $38,224,386 $4,482,154 $3,516,193 $811,173
===================================================================================================================================
RATIO OF GROSS EXPENSES TO
AVERAGE NET ASSETS 1.49%<F3> 1.57% 1.63% 2.14%<F3> 2.29% 2.28%
===================================================================================================================================
RATIO OF NET EXPENSES TO
AVERAGE NET ASSETS 1.30%<F3> 1.30% 1.30% 1.95%<F3> 1.95% 1.95%
===================================================================================================================================
RATIO OF NET INVESTMENT INCOME (LOSS)
TO AVERAGE NET ASSETS 0.82%<F3> 0.42% 0.29% 0.17%<F3> (0.23)% (0.36)%
===================================================================================================================================
PORTFOLIO TURNOVER RATE 11.30% 32.00% 37.52% 11.30% 32.00% 37.52%
===================================================================================================================================
</TABLE>
<F1> Calculated based on average shares outstanding.
<F2> Total return includes deductions for management and other Fund expenses;
excludes deductions for sales loads and contingent deferred sales charges.
Returns include fee waivers in effect. In the absence of fee waivers, total
return would be reduced.
<F3> Computed on an annualized basis.
<F4> Reflects total return for the period; not annualized.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
SEPTEMBER 30, 1999
GROWTH AND INCOME STOCK FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1999
- -------------------------------------------------------------------------------
ASSETS
Common Stocks (cost $48,157,332) $47,813,865
Money Market Investments (cost $698,761) 698,761
- -------------------------------------------------------------------------------
48,512,626
- -------------------------------------------------------------------------------
Cash 51,498
Due from Sale of Securities 860,405
Due from Sale of Fund Shares 73,954
Dividends and Interest Receivable 61,976
Unamortized Organizational Costs 10,327
- -------------------------------------------------------------------------------
TOTAL ASSETS 49,570,786
- -------------------------------------------------------------------------------
LIABILITIES
Due on Purchase of Securities 480,907
Due on Redemption of Fund Shares 19,706
Due to Investment Advisor 17,954
Other Accrued Liabilities 10,026
Accrued Shareholder Servicing Fees 5,976
Accrued Distribution Fees 4,129
Accrued Administrative Fees 3,718
- -------------------------------------------------------------------------------
TOTAL LIABILITIES 542,416
- -------------------------------------------------------------------------------
NET ASSETS $49,028,370
===============================================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 4,338,003 shares outstanding) $46,467,382
Overdistributed Net Investment Income (46,833)
Undistributed Accumulated Net
Realized Gain on Investments 2,951,288
Net Unrealized Depreciation of
Investment Securities (343,467)
- -------------------------------------------------------------------------------
NET ASSETS FOR 4,338,003
SHARES OUTSTANDING $49,028,370
===============================================================================
Per Share of Class A (Based on
3,884,446 Shares Issued and Outstanding):
OFFERING PRICE $11.88
===============================================================================
NET ASSET VALUE AND REDEMPTION PRICE $11.32
===============================================================================
Per Share of Class B (Based on 453,557
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $11.18
===============================================================================
STATEMENT OF OPERATIONS
For the Six Months Ended September 30, 1999
- -------------------------------------------------------------------------------
INVESTMENT INCOME
Income
Dividends (less foreign dividend tax of $4,785) $360,373
Interest 15,976
- -------------------------------------------------------------------------------
TOTAL INCOME 376,349
- -------------------------------------------------------------------------------
Expenses
Management Fees 171,590
Shareholder Servicing Fees 65,996
Distribution Fees:
Class A 23,869
Class B 18,937
Transfer Agent Fees 33,401
Administrative Fees 26,399
Registration Fees 12,281
Custody Fees 10,021
Shareholder Reporting Expense 9,359
Audit Fee Expense 8,273
Directors Fees and Expenses 3,622
Other Expenses 3,386
Professional Fees 1,347
- -------------------------------------------------------------------------------
TOTAL EXPENSES 388,481
- -------------------------------------------------------------------------------
Less:
Custodian Fees Paid Indirectly (2,204)
Expenses Reimbursed by Affiliates (54,771)
- -------------------------------------------------------------------------------
TOTAL NET EXPENSES 331,506
- -------------------------------------------------------------------------------
NET INVESTMENT INCOME 44,843
- -------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net Realized Gain on Investments 701,625
Net Change in Unrealized Depreciation
of Investments for the Period (3,596,540)
- -------------------------------------------------------------------------------
NET LOSS ON INVESTMENTS (2,894,915)
- -------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS $(2,850,072)
===============================================================================
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
M A S O N S T R E E T F U N D S
GROWTH AND INCOME STOCK FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Six
Months Ended For the
September 30, 1999 Year Ended
(Unaudited) March 31, 1999
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations
Net Investment Income $44,843 $65,444
Net Realized Gain on Investments 701,625 6,155,592
Net Change in Unrealized Depreciation of Investments for the Period (3,596,540) (1,313,276)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations (2,850,072) 4,907,760
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders from Net Investment Income - (117,640)
Distributions to Class A Shareholders from Net Realized Gain on Investments - (5,828,791)
Distributions to Class B Shareholders from Net Investment Income - (1,006)
Distributions to Class B Shareholders from Net Realized Gain on Investments - (483,341)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Distributions to Shareholders - (6,430,778)
- -----------------------------------------------------------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 110,589 and 330,443 Shares 1,367,062 4,055,376
Proceeds from Shares Issued on Reinvestment of Distributions Paid (0 and 507,846 shares) - 5,942,527
Payments for 41,996 and 60,751 Shares Redeemed (521,310) (731,924)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class A Fund Share Transactions (68,593 and 777,538 shares) 845,752 9,265,979
- -----------------------------------------------------------------------------------------------------------------------------------
Class B
Proceeds from Sale of 105,341 and 237,668 Shares 1,290,792 2,839,000
Proceeds from Shares Issued on Reinvestment of Distributions Paid (0 and 38,833 shares) - 450,878
Payments for 15,969 and 35,912 Shares Redeemed (192,320) (428,239)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class B Fund Share Transactions (89,372 and 240,589 shares) 1,098,472 2,861,639
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (905,848) 10,604,600
NET ASSETS
Beginning of Period 49,934,218 39,329,618
- -----------------------------------------------------------------------------------------------------------------------------------
END OF PERIOD (INCLUDES OVERDISTRIBUTED NET INVESTMENT INCOME OF
$46,833 AND $0, RESPECTIVELY) $49,028,370 $49,934,218
===================================================================================================================================
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
SEPTEMBER 30, 1999
GROWTH AND INCOME STOCK FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A CLASS A CLASS A CLASS B CLASS B CLASS B
------------ ------------ ------------ ------------ ------------ ------------
For the Six For the For the For the Six For the For the
Months Ended Year Year Months Ended Year Year
September 30, Ended Ended September 30, Ended Ended
(For a share outstanding 1999 March 31, March 31, 1999 March 31, March 31,
throughout the period) (Unaudited) 1999 1998 (Unaudited) 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $11.96 $12.44 $10.00 $11.85 $12.37 $10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss) 0.01 0.01 0.04<F1> (0.02) (0.03) (0.03)<F1>
Net Realized and Unrealized Gains
(Losses) on Investments (0.65) 1.33 3.90 (0.65) 1.28 3.88
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS (0.64) 1.34 3.94 (0.67) 1.25 3.85
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net
Investment Income 0.00 (0.04) (0.06) 0.00 0.00 (0.04)
Distributions from Realized Gains
on Investments 0.00 (1.78) (1.44) 0.00 (1.77) (1.44)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.00 (1.82) (1.50) 0.00 (1.77) (1.48)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $11.32 $11.96 $12.44 $11.18 $11.85 $12.37
===================================================================================================================================
TOTAL RETURN<F4> (5.35)%<F3> 11.09% 41.90% (5.65)%<F3> 10.41% 40.96%
===================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $43,959,556 $45,619,789 $37,800,412 $5,068,814 $4,314,429 $1,529,206
===================================================================================================================================
RATIO OF GROSS EXPENSES TO
AVERAGE NET ASSETS 1.41%<F2> 1.52% 1.57% 2.06%<F2> 2.17% 2.22%
===================================================================================================================================
RATIO OF NET EXPENSES TO
AVERAGE NET ASSETS 1.20%<F2> 1.20% 1.20% 1.85%<F2> 1.85% 1.85%
===================================================================================================================================
RATIO OF NET INVESTMENT INCOME (LOSS)
TO AVERAGE NET ASSETS 0.50%<F2> 0.20% 0.37% (0.15)%<F2> (0.45)% (0.28)%
===================================================================================================================================
PORTFOLIO TURNOVER RATE 56.98% 156.92% 140.29% 56.98% 156.92% 140.29%
===================================================================================================================================
</TABLE>
<F1> Calculated based on average shares outstanding.
<F2> Computed on an annualized basis.
<F3> Reflects total return for the period; not annualized.
<F4> Total return includes deductions for management and other Fund expenses;
excludes deductions for sales loads and contingent deferred sales charges.
Returns include fee waivers in effect. In the absence of fee waivers, total
return would be reduced.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
M A S O N S T R E E T F U N D S
INDEX 500 STOCK FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1999
- -------------------------------------------------------------------------------
ASSETS
Common Stocks (cost $76,367,721) $97,053,634
Money Market Investments (cost $590,725) 590,268
- -------------------------------------------------------------------------------
97,643,902
- -------------------------------------------------------------------------------
Cash 263,579
Due from Sale of Fund Shares 279,769
Dividends and Interest Receivable 115,273
Prepaid Registration Fees 12,786
Unamortized Organizational Costs 10,327
Futures Variation Margin 9,150
Due from Sale of Securities 5,606
- -------------------------------------------------------------------------------
TOTAL ASSETS 98,340,392
- -------------------------------------------------------------------------------
LIABILITIES
Other Accrued Liabilities 34,161
Due on Redemption of Fund Shares 24,350
Due from Investment Advisor 15,045
Accrued Shareholder Servicing Fees 12,341
Accrued Administrative Fees 7,569
- -------------------------------------------------------------------------------
TOTAL LIABILITIES 93,466
- -------------------------------------------------------------------------------
NET ASSETS $98,246,926
===============================================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 5,864,554 shares outstanding) $75,533,001
Undistributed Net Investment Income 531,431
Undistributed Accumulated Net
Realized Gain on Investments 1,517,988
Net Unrealized Appreciation (Depreciation) of:
Investment Securities 20,685,456
Index Futures Contracts (20,950)
- -------------------------------------------------------------------------------
NET ASSETS FOR 5,864,554
SHARES OUTSTANDING $98,246,926
===============================================================================
Per Share of Class A (Based on
4,496,192 Shares Issued and Outstanding):
OFFERING PRICE $17.64
===============================================================================
NET ASSET VALUE AND REDEMPTION PRICE $16.80
===============================================================================
Per Share of Class B (Based on 1,368,362
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $16.59
===============================================================================
STATEMENT OF OPERATIONS
For the Six Months Ended September 30, 1999
- -------------------------------------------------------------------------------
INVESTMENT INCOME
Income
Dividends (less foreign dividend tax of $9,809) $626,798
Interest 109,923
- -------------------------------------------------------------------------------
TOTAL INCOME 736,721
- -------------------------------------------------------------------------------
Expenses
Management Fees 146,049
Shareholder Servicing Fees 121,707
Distribution Fees:
Class A 38,044
Class B 79,742
Administrative Fees 48,683
Transfer Agent Fees 42,800
Registration Fees 15,343
Custody Fees 15,310
Shareholder Reporting Expenses 13,654
Other Expenses 9,759
Audit Fees 8,273
Directors Fees 3,622
Professional Fees 1,347
- -------------------------------------------------------------------------------
TOTAL EXPENSES 544,333
- -------------------------------------------------------------------------------
Less:
Custodian Fees Paid Indirectly (1,985)
Expenses Reimbursed by Affiliates (60,780)
- -------------------------------------------------------------------------------
TOTAL NET EXPENSES 481,568
- -------------------------------------------------------------------------------
NET INVESTMENT INCOME 255,153
- -------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net Realized Gain (Loss) on:
Investment Securities 586,982
Index Futures Contracts (44,557)
- -------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS FOR THE PERIOD 542,425
- -------------------------------------------------------------------------------
Net Change in Unrealized Appreciation
(Depreciation) of:
Investment Securities (1,299,308)
Index Futures Contracts 32,700
- -------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED DEPRECIATION
OF INVESTMENTS FOR THE PERIOD (1,266,608)
- -------------------------------------------------------------------------------
NET LOSS ON INVESTMENTS (724,183)
- -------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS $(469,030)
===============================================================================
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
SEPTEMBER 30, 1999
INDEX 500 STOCK FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Six
Months Ended For the
September 30, 1999 Year Ended
(Unaudited) March 31, 1999
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations
Net Investment Income $255,153 $484,221
Net Realized Gain on Investments 542,425 1,238,728
Net Change in Unrealized Appreciation (Depreciation) of Investments for the Period (1,266,608) 9,723,362
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations (469,030) 11,446,311
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders from Net Investment Income - (228,819)
Distributions to Class A Shareholders from Net Realized Gain (Loss) on Investments - (492,288)
Distributions to Class B Shareholders from Net Investment Income - (17,026)
Distributions to Class B Shareholders from Net Realized Gain (Loss) on Investments - (111,777)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Distributions to Shareholders - (849,910)
- -----------------------------------------------------------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 440,534 and 1,243,043 Shares 7,718,210 19,256,340
Proceeds from Shares Issued on Reinvestment of Distributions Paid (0 and 44,680 shares) - 716,707
Payments for 113,107 and 138,873 Shares Redeemed (2,007,262) (2,128,916)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class A Fund Share Transactions (327,427 and 1,148,850 shares) 5,710,948 17,844,131
- -----------------------------------------------------------------------------------------------------------------------------------
Class B
Proceeds from Sale of 348,624 and 814,757 Shares 6,017,403 12,206,936
Proceeds from Shares Issued on Reinvestment of Distributions Paid (0 and 7,919 shares) - 126,087
Payments for 49,750 and 49,118 Shares Redeemed (848,995) (751,091)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class B Fund Share Transactions (298,874 and 773,558 shares) 5,168,408 11,581,932
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 10,410,326 40,022,464
NET ASSETS
Beginning of Period 87,836,600 47,814,136
- -----------------------------------------------------------------------------------------------------------------------------------
END OF PERIOD (INCLUDES UNDISTRIBUTED NET INVESTMENT INCOME OF
$531,431 AND $347,027) $98,246,926 $87,836,600
===================================================================================================================================
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
M A S O N S T R E E T F U N D S
INDEX 500 STOCK FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A CLASS A CLASS A CLASS B CLASS B CLASS B
------------ ------------ ------------ ------------ ------------ ------------
For the Six For the For the For the Six For the For the
Months Ended Year Year Months Ended Year Year
September 30, Ended Ended September 30, Ended Ended
(For a share outstanding 1999 March 31, March 31, 1999 March 31, March 31,
throughout the period) (Unaudited) 1999 1998 (Unaudited) 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $16.80 $14.43 $10.00 $16.65 $14.35 $10.00
Income from Investment Operations:
Net Investment Income 0.06 0.10 0.13<F1> 0.00 0.03 0.05<F1>
Net Realized and Unrealized Gains
(Losses) on Investments (0.06) 2.47 4.48 (0.06) 2.43 4.47
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 0.00 2.57 4.61 (0.06) 2.46 4.52
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net
Investment Income 0.00 (0.06) (0.11) 0.00 (0.02) (0.10)
Distributions from Realized Gains
on Investments 0.00 (0.14) (0.07) 0.00 (0.14) (0.07)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.00 (0.20) (0.18) 0.00 (0.16) (0.17)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $16.80 $16.80 $14.43 $16.59 $16.65 $14.35
===================================================================================================================================
TOTAL RETURN<F2> 0.00%<F4> 17.88% 46.35% (0.36)%<F4> 17.17% 45.44%
===================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $75,541,028 $70,034,287 $43,567,584 $22,705,898 $17,802,313 $4,246,552
===================================================================================================================================
RATIO OF GROSS EXPENSES TO
AVERAGE NET ASSETS 0.97%<F3> 1.15% 1.30% 1.62%<F3> 1.80% 1.95%
===================================================================================================================================
RATIO OF NET EXPENSES TO
AVERAGE NET ASSETS 0.85%<F3> 0.85% 0.85% 1.50%<F3> 1.50% 1.50%
===================================================================================================================================
RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS 0.67%<F3> 0.88% 1.04% 0.02%<F3> 0.23% 0.39%
===================================================================================================================================
PORTFOLIO TURNOVER RATE 1.12% 3.83% 2.47% 1.12% 3.83% 2.47%
===================================================================================================================================
</TABLE>
<F1> Calculated based on average shares outstanding.
<F2> Total return includes deductions for management and other Fund expenses;
excludes deductions for sales loads and contingent deferred sales charges.
Returns include fee waivers in effect. In the absence of fee waivers, total
return would be reduced.
<F3> Computed on an annualized basis.
<F4> Reflects total return for the period; not annualized.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
SEPTEMBER 30, 1999
ASSET ALLOCATION FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1999
- -------------------------------------------------------------------------------
ASSETS
Bonds (cost $22,299,582) $21,320,003
Common Stocks (cost $14,232,020) 19,371,182
Money Market Investments (cost $5,582,106) 5,581,887
Foreign Common Stock (cost $4,187,384) 5,092,832
Preferred Stock (cost $585,743) 589,839
- -------------------------------------------------------------------------------
51,955,743
- -------------------------------------------------------------------------------
Cash 300,665
Dividends and Interest Receivable 370,832
Due from Securities Sold 251,225
Due from Sale of Fund Shares 149,913
Due from Sale of Foreign Currency 66,690
Futures Variation Margin 26,425
Unamortized Organizational Costs 10,327
- -------------------------------------------------------------------------------
TOTAL ASSETS 53,131,820
- -------------------------------------------------------------------------------
LIABILITIES
Due on Purchase of Securities 450,450
Due on Purchase of Foreign Currency 94,950
Due to Investment Advisor 23,526
Other Accrued Liabilities 17,585
Due on Redemption of Fund Shares 8,516
Accrued Shareholder Servicing Fees 6,349
Accrued Distribution Expense 4,918
Accrued Administrative Fees 3,859
- -------------------------------------------------------------------------------
TOTAL LIABILITIES 610,153
- -------------------------------------------------------------------------------
NET ASSETS $52,521,667
===============================================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 3,968,751 shares outstanding) $42,868,012
Undistributed Net Investment Income 970,897
Undistributed Accumulated Net
Realized Gain on Investments 3,668,124
Net Unrealized Appreciation (Depreciation) of:
Investment Securities 5,068,908
Futures Contracts (54,575)
Foreign Currency Transactions 301
- -------------------------------------------------------------------------------
NET ASSETS FOR 3,968,751
SHARES OUTSTANDING $52,521,667
===============================================================================
Per Share of Class A (Based on
3,370,127 Shares Issued and Outstanding):
OFFERING PRICE $13.92
===============================================================================
NET ASSET VALUE AND REDEMPTION PRICE $13.26
===============================================================================
Per Share of Class B (Based on 598,624
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $13.10
===============================================================================
STATEMENT OF OPERATIONS
For the Six Months Ended September 30, 1999
- -------------------------------------------------------------------------------
INVESTMENT INCOME
Income
Interest $904,207
Dividends (less foreign dividend tax of $10,160) 182,534
- -------------------------------------------------------------------------------
TOTAL INCOME 1,086,741
- -------------------------------------------------------------------------------
Expenses
Management Fees 175,924
Shareholder Servicing Fees 62,830
Distribution Fees:
Class A 21,719
Class B 25,598
Transfer Agent Fees 32,583
Other Expenses 29,429
Administrative Fees 25,132
Custody Fees 20,056
Registration Fees 12,127
- -------------------------------------------------------------------------------
TOTAL EXPENSES 405,398
- -------------------------------------------------------------------------------
Less:
Custodian Fees Paid Indirectly (3,091)
Expenses Reimbursed by Affiliates (43,410)
- -------------------------------------------------------------------------------
TOTAL NET EXPENSES 358,897
- -------------------------------------------------------------------------------
NET INVESTMENT INCOME 727,844
- -------------------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net Realized Gain (Loss) on:
Investment Securities 2,554,484
Futures Contracts 82,329
Foreign Currency Transactions (173)
- -------------------------------------------------------------------------------
NET REALIZED GAIN FOR THE PERIOD 2,636,640
- -------------------------------------------------------------------------------
Net Change in Unrealized Depreciation of:
Investment Securities (480,927)
Futures Contracts (32,313)
Foreign Currency Transactions (262)
- -------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED DEPRECIATION
OF INVESTMENTS FOR THE PERIOD (513,502)
- -------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS 2,123,138
- -------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $2,850,982
===============================================================================
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
M A S O N S T R E E T F U N D S
ASSET ALLOCATION FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Six
Months Ended For the
September 30, 1999 Year Ended
(Unaudited) March 31, 1999
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations
Net Investment Income $727,844 $1,136,197
Net Realized Gain on Investments 2,636,640 1,573,508
Net Change in Unrealized Appreciation (Depreciation) of Investments
and Foreign Currency Transactions (513,502) 41,823
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations 2,850,982 2,751,528
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders from Net Investment Income - (947,806)
Distributions to Class A Shareholders from Net Realized Gain on Investments - (889,863)
Distributions to Class B Shareholders from Net Investment Income - (109,624)
Distributions to Class B Shareholders from Net Realized Gain on Investments - (118,298)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Distributions to Shareholders - (2,065,591)
- -----------------------------------------------------------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 196,212 and 347,269 Shares 2,493,380 4,216,962
Proceeds from Shares Issued on Reinvestment of Distributions Paid (0 and 148,053 shares) - 1,822,522
Payments for 49,510 and 78,315 Shares Redeemed (566,552) (958,017)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class A Fund Share Transactions (146,702 and 417,007 shares) 1,926,828 5,081,467
- -----------------------------------------------------------------------------------------------------------------------------------
Class B
Proceeds from Sale of 153,093 and 347,283 Shares 1,990,886 4,226,850
Proceeds from Shares Issued on Reinvestment of Distributions Paid (0 and 17,717 shares) - 216,682
Payments for 24,833 and 22,663 Shares Redeemed (322,547) (268,668)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class B Fund Share Transactions (128,260 and 342,337 shares) 1,668,339 4,174,864
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 6,446,149 9,942,268
NET ASSETS
Beginning of Period 46,075,518 36,133,250
- -----------------------------------------------------------------------------------------------------------------------------------
END OF PERIOD (INCLUDES UNDISTRIBUTED NET INVESTMENT INCOME OF
$970,897 AND $311,695, RESPECTIVELY) $52,521,667 $46,075,518
===================================================================================================================================
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
SEPTEMBER 30, 1999
ASSET ALLOCATION FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A CLASS A CLASS A CLASS B CLASS B CLASS B
------------ ------------ ------------ ------------ ------------ ------------
For the Six For the For the For the Six For the For the
Months Ended Year Year Months Ended Year Year
September 30, Ended Ended September 30, Ended Ended
(For a share outstanding 1999 March 31, March 31, 1999 March 31, March 31,
throughout the period) (Unaudited) 1999 1998 (Unaudited) 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $12.49 $12.32 $10.00 $12.39 $12.26 $10.00
Income from Investment Operations:
Net Investment Income 0.19 0.32 0.31<F1> 0.14 0.24 0.23<F1>
Net Realized and Unrealized Gains
on Investments 0.58 0.46 2.50 0.57 0.46 2.50
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 0.77 0.78 2.81 0.71 0.70 2.73
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net
Investment Income 0.00 (0.31) (0.24) 0.00 (0.27) (0.22)
Distributions from Realized Gains
on Investments 0.00 (0.30) (0.25) 0.00 (0.30) (0.25)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.00 (0.61) (0.49) 0.00 (0.57) (0.47)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $13.26 $12.49 $12.32 $13.10 $12.39 $12.26
===================================================================================================================================
TOTAL RETURN<F2> 6.16%<F4> 6.41% 28.51% 5.73%<F4> 5.77% 27.69%
===================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $44,681,577 $40,249,915 $34,564,169 $7,840,090 $5,825,603 $1,569,081
===================================================================================================================================
RATIO OF GROSS EXPENSES TO
AVERAGE NET ASSETS 1.52%<F3> 1.62% 1.67% 2.17%<F3> 2.27% 2.32%
===================================================================================================================================
RATIO OF NET EXPENSES TO
AVERAGE NET ASSETS 1.35%<F3> 1.35% 1.35% 2.00%<F3> 2.00% 2.00%
===================================================================================================================================
RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS 3.09%<F3> 2.89% 2.67% 2.44%<F3> 2.24% 2.02%
===================================================================================================================================
PORTFOLIO TURNOVER RATE 46.90% 79.71% 65.67% 46.90% 79.71% 65.67%
===================================================================================================================================
</TABLE>
<F1> Calculated based on average shares outstanding.
<F2> Total return includes deductions for management and other Fund expenses;
excludes deductions for sales loads and contingent deferred sales charges.
Returns include fee waivers in effect. In the absence of fee waivers, total
return would be reduced.
<F3> Computed on an annualized basis.
<F4> Reflects total return for the period; not annualized.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
M A S O N S T R E E T F U N D S
HIGH YIELD BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1999
- -------------------------------------------------------------------------------
ASSETS
Bonds (cost $35,728,562) $32,561,970
Preferred Stock (cost $6,403,441) 6,167,078
Money Market Investments (cost $3,895,471) 3,895,471
Common Stock (cost $335,245) 249,876
- -------------------------------------------------------------------------------
42,874,395
- -------------------------------------------------------------------------------
Dividends and Interest Receivable 912,977
Due from Sale of Securities 838,564
Unamortized Organizational Costs 10,327
Due from Sale of Fund Shares 1,629
- -------------------------------------------------------------------------------
TOTAL ASSETS 44,637,892
- -------------------------------------------------------------------------------
LIABILITIES
Due on Purchase of Securities 1,481,904
Income Dividend Payable 383,089
Due to Investment Advisor 16,526
Other Accrued Liabilities 15,354
Accrued Shareholder Servicing Fees 4,994
Accrued Distribution Fees 3,625
Accrued Administrative Fees 3,089
Due on Redemption of Fund Shares 461
- -------------------------------------------------------------------------------
TOTAL LIABILITIES 1,909,042
- -------------------------------------------------------------------------------
NET ASSETS $42,728,850
===============================================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 5,088,422 shares outstanding) $50,487,471
Overdistributed Net Investment Income (5,561)
Undistributed Accumulated Net
Realized Loss on Investments (4,264,736)
Net Unrealized Depreciation of
Investment Securities (3,488,324)
- -------------------------------------------------------------------------------
NET ASSETS FOR 5,088,422
SHARES OUTSTANDING $42,728,850
===============================================================================
Per Share of Class A (Based on
4,460,398 Shares Issued and Outstanding):
OFFERING PRICE $8.82
===============================================================================
NET ASSET VALUE AND REDEMPTION PRICE $8.40
===============================================================================
Per Share of Class B (Based on 628,024
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $8.39
===============================================================================
STATEMENT OF OPERATIONS
For the Six Months Ended September 30, 1999
- -------------------------------------------------------------------------------
INVESTMENT INCOME
Income
Interest $2,112,755
Dividends 358,329
- -------------------------------------------------------------------------------
TOTAL INCOME 2,471,084
- -------------------------------------------------------------------------------
Expenses
Management Fees 163,218
Shareholder Servicing Fees 54,406
Distribution Fees:
Class A 19,173
Class B 19,419
Transfer Agent Fees 26,617
Administrative Fees 21,762
Registration Fees 13,271
Custody Fees 13,035
Audit Fees 8,775
Other Expenses 8,552
Shareholder Reporting Expenses 7,882
Directors Fees 3,622
Professional Fees 1,347
- -------------------------------------------------------------------------------
TOTAL EXPENSES 361,079
- -------------------------------------------------------------------------------
Less:
Custodian Fees Paid Indirectly (1,308)
Expenses Reimbursed by Affiliates (60,919)
- -------------------------------------------------------------------------------
TOTAL NET EXPENSES 298,852
- -------------------------------------------------------------------------------
NET INVESTMENT INCOME 2,172,232
- -------------------------------------------------------------------------------
REALIZED AND UNREALIZED
LOSS ON INVESTMENTS
Net Realized Loss on Investments (3,013,469)
Net Change in Unrealized Appreciation
of Investments for the Period 1,141,768
- -------------------------------------------------------------------------------
NET LOSS ON INVESTMENTS (1,871,701)
- -------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $300,531
===============================================================================
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
SEPTEMBER 30, 1999
HIGH YIELD BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Six
Months Ended For the
September 30, 1999 Year Ended
(Unaudited) March 31, 1999
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations
Net Investment Income $2,172,232 $4,044,762
Net Realized Loss on Investments (3,013,469) (1,280,132)
Net Change in Unrealized Appreciation (Depreciation) of Investments for the Period 1,141,768 (5,811,136)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations 300,531 (3,046,506)
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders from Net Investment Income (1,929,350) (3,730,343)
Distributions to Class A Shareholders from Net Realized Gain on Investments - (741,685)
Distributions to Class B Shareholders from Net Investment Income (242,882) (314,419)
Distributions to Class B Shareholders from Net Realized Gain on Investments - (79,109)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Distributions to Shareholders (2,172,232) (4,865,556)
- -----------------------------------------------------------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 78,059 and 1,028,931 Shares 683,138 9,935,472
Proceeds from Shares Issued on Reinvestment of Distributions Paid
(203,740 and 439,864 shares) 1,781,673 4,226,546
Payments for 90,014 and 241,682 Shares Redeemed (781,870) (2,317,174)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class A Fund Share Transactions (191,785 and 1,227,113 shares) 1,682,941 11,844,844
- -----------------------------------------------------------------------------------------------------------------------------------
Class B
Proceeds from Sale of 104,805 and 405,492 Shares 918,603 3,957,486
Proceeds from Shares Issued on Reinvestment of Distributions Paid
(22,647 and 34,096 shares) 197,893 322,079
Payments for 34,157 and 31,028 Shares Redeemed (297,121) (286,353)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class B Fund Share Transactions (93,295 and 408,560 shares) 819,375 3,993,212
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 630,615 7,925,994
NET ASSETS
Beginning of Period 42,098,235 34,172,241
- -----------------------------------------------------------------------------------------------------------------------------------
END OF PERIOD (INCLUDES (OVERDISTRIBUTED) UNDISTRIBUTED NET INVESTMENT INCOME OF
$(5,561) AND $63,116, RESPECTIVELY) $42,728,850 $42,098,235
===================================================================================================================================
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
M A S O N S T R E E T F U N D S
HIGH YIELD BOND FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A CLASS A CLASS A CLASS B CLASS B CLASS B
------------ ------------ ------------ ------------ ------------ ------------
For the Six For the For the For the Six For the For the
Months Ended Year Year Months Ended Year Year
September 30, Ended Ended September 30, Ended Ended
(For a share outstanding 1999 March 31, March 31, 1999 March 31, March 31,
throughout the period) (Unaudited) 1999 1998 (Unaudited) 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $8.77 $10.79 $10.00 $8.76 $10.79 $10.00
Income from Investment Operations:
Net Investment Income 0.43 1.00 1.01<F1> 0.39 0.93 0.93<F1>
Net Realized and Unrealized Gains
(Losses) on Investments (0.36) (1.82) 1.19 (0.35) (1.83) 1.20
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 0.07 (0.82) 2.20 0.04 (0.90) 2.13
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net
Investment Income (0.44) (1.02) (1.00) (0.41) (0.95) (0.93)
Distributions from Realized Gains
on Investments 0.00 (0.18) (0.41) 0.00 (0.18) (0.41)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (0.44) (1.20) (1.41) (0.41) (1.13) (1.34)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $8.40 $8.77 $10.79 $8.39 $8.76 $10.79
===================================================================================================================================
TOTAL RETURN<F2> 0.73%<F4> (7.87)% 22.95% 0.39%<F4> (8.48)% 22.09%
===================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $37,458,232 $37,414,394 $32,811,316 $5,270,618 $4,683,841 $1,360,925
===================================================================================================================================
RATIO OF GROSS EXPENSES TO
AVERAGE NET ASSETS 1.58%<F3> 1.65% 1.66% 2.23%<F3> 2.30% 2.31%
===================================================================================================================================
RATIO OF NET EXPENSES TO
AVERAGE NET ASSETS 1.30%<F3> 1.30% 1.30% 1.95%<F3> 1.95% 1.95%
===================================================================================================================================
RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS 10.28%<F3> 10.51% 9.30% 9.63%<F3> 9.86% 8.65%
===================================================================================================================================
PORTFOLIO TURNOVER RATE 111.73% 178.63% 178.61% 111.73% 178.63% 178.61%
===================================================================================================================================
</TABLE>
<F1> Calculated based on average shares outstanding.
<F2> Total return includes deductions for management and other Fund expenses;
excludes deductions for sales loads and contingent deferred sales charges.
Returns include fee waivers in effect. In the absence of fee waivers, total
return would be reduced.
<F3> Computed on an annualized basis.
<F4> Reflects total return for the period; not annualized.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
SEPTEMBER 30, 1999
MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1999
- -------------------------------------------------------------------------------
ASSETS
Bonds (cost $34,486,218) $34,370,711
- -------------------------------------------------------------------------------
Cash 123,929
Due from Sale of Securities 2,671,228
Interest Receivable 502,797
Prepaid Registration Fees 14,545
Unamortized Organizational Costs 10,327
Due from Sale of Fund Shares 5,880
- -------------------------------------------------------------------------------
TOTAL ASSETS 37,699,417
- -------------------------------------------------------------------------------
LIABILITIES
Due on Purchase of Securities 3,826,752
Income Dividend Payable 123,521
Due on Redemption of Fund Shares 18,617
Other Accrued Liabilities 12,951
Accrued Shareholder Servicing Fees 3,964
Accrued Administrative Fees 2,402
Accrued Distribution Expense 1,932
Due to Investment Advisor 1,588
- -------------------------------------------------------------------------------
TOTAL LIABILITIES 3,991,727
- -------------------------------------------------------------------------------
NET ASSETS $33,707,690
===============================================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 3,318,551 shares outstanding) $33,636,553
Overdistributed Net Investment Income (36,550)
Undistributed Net
Realized Gain on Investments 223,194
Net Unrealized Depreciation of
Investment Securities (115,507)
- -------------------------------------------------------------------------------
NET ASSETS FOR 3,318,551
SHARES OUTSTANDING $33,707,690
===============================================================================
Per Share of Class A (Based on
3,230,901 Shares Issued and Outstanding):
OFFERING PRICE $10.67
===============================================================================
NET ASSET VALUE AND REDEMPTION PRICE $10.16
===============================================================================
Per Share of Class B (Based on 87,650
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $10.16
===============================================================================
STATEMENT OF OPERATIONS
For the Six Months Ended September 30, 1999
- -------------------------------------------------------------------------------
INVESTMENT INCOME
Income
Interest $882,580
- -------------------------------------------------------------------------------
Expenses
Management Fees 50,826
Shareholder Servicing Fees 42,356
Transfer Agent Fees 20,222
Distribution Fees:
Class A 16,485
Class B 3,429
Administrative Fees 16,942
Registration Fees 11,339
Audit Fees 8,775
Shareholder Reporting Expenses 6,180
Other Expenses 5,792
Directors Fees 3,622
Professional Fees 1,347
Custody Fees 1,107
- -------------------------------------------------------------------------------
TOTAL EXPENSES 188,422
- -------------------------------------------------------------------------------
Less:
Custodian Fees Paid Indirectly (2,739)
Expenses Reimbursed by Affiliates (41,235)
- -------------------------------------------------------------------------------
TOTAL NET EXPENSES 144,448
- -------------------------------------------------------------------------------
NET INVESTMENT INCOME 738,132
- -------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net Realized Gain on:
Investment Securities 66,287
Futures Contracts 17,043
- -------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS
FOR THE PERIOD 83,330
- -------------------------------------------------------------------------------
Net Change in Unrealized Depreciation of
Investment Securities (1,632,680)
- -------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED DEPRECIATION
OF INVESTMENTS FOR THE PERIOD (1,632,680)
- -------------------------------------------------------------------------------
NET LOSS ON INVESTMENTS (1,549,350)
- -------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS $(811,218)
===============================================================================
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
M A S O N S T R E E T F U N D S
MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Six
Months Ended For the
September 30, 1999 Year Ended
(Unaudited) March 31, 1999
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations
Net Investment Income $738,132 $1,275,087
Net Realized Gain on Investments 83,330 547,755
Net Change in Unrealized Appreciation (Depreciation) of Investments for the Period (1,632,680) 78,672
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations (811,218) 1,901,514
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders from Net Investment Income (721,213) (1,249,869)
Distributions to Class A Shareholders from Net Realized Gain on Investments - (386,253)
Distributions to Class B Shareholders from Net Investment Income (16,919) (25,191)
Distributions to Class B Shareholders from Net Realized Gain on Investments - (10,382)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Distributions to Shareholders (738,132) (1,671,695)
- -----------------------------------------------------------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 102,969 and 286,927 Shares 1,075,454 3,057,973
Proceeds from Shares Issued on Reinvestment of Distributions Paid
(64,756 and 150,658 shares) 676,037 1,602,959
Payments for 11,377 and 34,207 Shares Redeemed (117,614) (365,717)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class A Fund Share Transactions (156,348 and 403,378 shares) 1,633,877 4,295,215
- -----------------------------------------------------------------------------------------------------------------------------------
Class B
Proceeds from Sale of 21,861 and 79,084 Shares 226,183 840,371
Proceeds from Shares Issued on Reinvestment of Distributions Paid
(1,076 and 2,266 shares) 11,239 24,127
Payments for 15,168 and 46,259 Shares Redeemed (155,815) (492,568)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class B Fund Share Transactions (7,769 and 35,091 shares) 81,607 371,930
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 166,134 4,896,964
NET ASSETS
Beginning of Period 33,541,556 28,644,592
- -----------------------------------------------------------------------------------------------------------------------------------
END OF PERIOD (INCLUDES (OVERDISTRIBUTED) UNDISTRIBUTED NET INVESTMENT INCOME OF
$(36,550) AND $29,775, RESPECTIVELY) $33,707,690 $33,541,556
===================================================================================================================================
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
SEPTEMBER 30, 1999
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A CLASS A CLASS A CLASS B CLASS B CLASS B
------------ ------------ ------------ ------------ ------------ ------------
For the Six For the For the For the Six For the For the
Months Ended Year Year Months Ended Year Year
September 30, Ended Ended September 30, Ended Ended
(For a share outstanding 1999 March 31, March 31, 1999 March 31, March 31,
throughout the period) (Unaudited) 1999 1998 (Unaudited) 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $10.63 $10.55 $10.00 $10.63 $10.55 $10.00
Income from Investment Operations:
Net Investment Income 0.22 0.42 0.46<F1> 0.19 0.36 0.38<F1>
Net Realized and Unrealized Gains
(Losses) on Investments (0.69) 0.25 0.69 (0.66) 0.23 0.70
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS (0.47) 0.67 1.15 (0.47) 0.59 1.08
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net
Investment Income 0.00 (0.45) (0.47) 0.00 (0.37) (0.40)
Distributions from Realized Gains
on Investments 0.00 (0.14) (0.13) 0.00 (0.14) (0.13)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.00 (0.59) (0.60) 0.00 (0.51) (0.53)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $10.16 $10.63 $10.55 $10.16 $10.63 $10.55
===================================================================================================================================
TOTAL RETURN<F2> (2.30)%<F4> 6.42% 11.73% (2.62)%<F4> 5.72% 10.93%
===================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $32,817,428 $32,692,209 $28,172,205 $890,262 $849,347 $472,387
===================================================================================================================================
RATIO OF GROSS EXPENSES TO
AVERAGE NET ASSETS 1.09%<F3> 1.17% 1.24% 1.73%<F3> 1.82% 1.89%
===================================================================================================================================
RATIO OF NET EXPENSES TO
AVERAGE NET ASSETS 0.85%<F3> 0.85% 0.85% 1.50%<F3> 1.50% 1.50%
===================================================================================================================================
RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS 4.39%<F3> 4.18% 4.38% 3.74%<F3> 3.53% 3.73%
===================================================================================================================================
PORTFOLIO TURNOVER RATE 90.49% 344.11% 169.37% 90.49% 344.11% 169.37%
===================================================================================================================================
</TABLE>
<F1> Calculated based on average shares outstanding.
<F2> Total return includes deductions for management and other Fund expenses;
excludes deductions for sales loads and contingent deferred sales charges.
Returns include fee waivers in effect. In the absence of fee waivers, total
return would be reduced.
<F3> Computed on an annualized basis.
<F4> Reflects total return for the period; not annualized.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
M A S O N S T R E E T F U N D S
SELECT BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1999
- -------------------------------------------------------------------------------
ASSETS
Bonds (cost $35,256,663) $32,569,208
Other Investments (cost $1,490,289) 1,489,925
- -------------------------------------------------------------------------------
34,059,133
- -------------------------------------------------------------------------------
Cash 115,013
Interest Receivable 353,589
Futures Variation Margin 16,600
Prepaid Registration Fees 14,445
Unamortized Organizational Costs 10,327
Due from Sale of Fund Shares 9,205
Due from Investment Advisor 472
- -------------------------------------------------------------------------------
TOTAL ASSETS 34,578,784
- -------------------------------------------------------------------------------
LIABILITIES
Income Dividend Payable 192,375
Due on Redemption of Fund Shares 46,900
Other Accrued Liabilities 13,876
Accrued Shareholder Servicing Fees 4,017
Accrued Distribution Expense 2,462
Accrued Administrative Fees 2,423
- -------------------------------------------------------------------------------
TOTAL LIABILITIES 262,053
- -------------------------------------------------------------------------------
NET ASSETS $34,316,731
===============================================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 3,643,558 shares outstanding) $36,369,042
Undistributed Net Investment Income 32,053
Undistributed Accumulated Net
Realized Gain on Investments 599,742
Net Unrealized Appreciation (Depreciation) of:
Investment Securities (2,687,819)
Futures Contracts 3,713
- -------------------------------------------------------------------------------
NET ASSETS FOR 3,643,558
SHARES OUTSTANDING $34,316,731
===============================================================================
Per Share of Class A (Based on 3,369,844
Shares Issued and Outstanding):
OFFERING PRICE $9.89
===============================================================================
NET ASSET VALUE AND REDEMPTION PRICE $9.42
===============================================================================
Per Share of Class B (Based on 273,714
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $9.42
===============================================================================
STATEMENT OF OPERATIONS
For the Six Months Ended September 30, 1999
- -------------------------------------------------------------------------------
INVESTMENT INCOME
Income
Interest $1,274,886
- -------------------------------------------------------------------------------
Expenses
Management Fees 51,282
Shareholder Servicing Fees 42,736
Distribution Fees:
Class A 15,814
Class B 9,605
Transfer Agent Fees 23,448
Other Expenses 22,926
Administrative Fees 17,094
Registration Fees 11,646
Custody Fees 9,683
- -------------------------------------------------------------------------------
TOTAL EXPENSES 204,234
- -------------------------------------------------------------------------------
Less:
Custodian Fees Paid Indirectly (2,739)
Expenses Reimbursed by Affiliates (54,400)
- -------------------------------------------------------------------------------
TOTAL NET EXPENSES 147,095
- -------------------------------------------------------------------------------
NET INVESTMENT INCOME 1,127,791
- -------------------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net Realized Gain (Loss) on:
Investment Securities (100,998)
Futures Contracts 726,660
Foreign Currency Transactions (2,687)
- -------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS
FOR THE PERIOD 622,975
- -------------------------------------------------------------------------------
Net Change in Unrealized Appreciation
(Depreciation) of:
Investment Securities (1,468,681)
Futures Contracts 2,126
Foreign Currency Transactions 3,132
- -------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED DEPRECIATION
FOR THE PERIOD (1,463,423)
- -------------------------------------------------------------------------------
NET LOSS ON INVESTMENTS (840,448)
- -------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $287,343
===============================================================================
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
SEPTEMBER 30, 1999
SELECT BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Six
Months Ended For the
September 30, 1999 Year Ended
(Unaudited) March 31, 1999
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations
Net Investment Income $1,127,791 $2,241,979
Net Realized Gain on Investments 622,975 88,199
Net Change in Unrealized Depreciation of Investments and
Foreign Currency Transactions for the Period (1,463,423) (874,757)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations 287,343 1,455,421
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders from Net Investment Income (1,054,639) (2,097,576)
Distributions to Class A Shareholders from Net Realized Gain on Investments - (275,628)
Distributions to Class B Shareholders from Net Investment Income (76,905) (102,222)
Distributions to Class B Shareholders from Net Realized Gain on Investments - (17,034)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Distributions to Shareholders (1,131,544) (2,492,460)
- -----------------------------------------------------------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 49,558 and 440,741 Shares 472,221 4,312,671
Proceeds from Shares Issued on Reinvestment of Distributions Paid
(109,373 and 239,883 shares) 1,041,839 2,354,967
Payments for 49,432 and 289,128 Shares Redeemed (472,532) (2,825,781)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class A Fund Share Transactions (109,499 and 391,496 shares) 1,041,528 3,841,857
- -----------------------------------------------------------------------------------------------------------------------------------
Class B
Proceeds from Sale of 50,237 and 209,025 Shares 477,690 2,055,500
Proceeds from Shares Issued on Reinvestment of Distributions Paid
(7,259 and 10,850 shares) 69,127 106,236
Payments for 34,953 and 33,197 Shares Redeemed (331,283) (323,437)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class B Fund Share Transactions (22,543 and 186,678 shares) 215,534 1,838,299
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 412,861 4,643,117
NET ASSETS
Beginning of Period 33,903,870 29,260,753
- -----------------------------------------------------------------------------------------------------------------------------------
END OF PERIOD (INCLUDES (OVERDISTRIBUTED) UNDISTRIBUTED NET INVESTMENT INCOME OF
$32,053 AND $(10,530), RESPECTIVELY) $34,316,731 $33,903,870
===================================================================================================================================
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
M A S O N S T R E E T F U N D S
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A CLASS A CLASS A CLASS B CLASS B CLASS B
------------ ------------ ------------ ------------ ------------ ------------
For the Six For the For the For the Six For the For the
Months Ended Year Year Months Ended Year Year
September 30, Ended Ended September 30, Ended Ended
(For a share outstanding 1999 March 31, March 31, 1999 March 31, March 31,
throughout the period) (Unaudited) 1999 1998 (Unaudited) 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $9.66 $9.98 $10.00 $9.66 $9.98 $10.00
Income from Investment Operations:
Net Investment Income 0.31 0.61 0.71<F1> 0.28 0.56 0.66<F1>
Net Realized and Unrealized Gains
(Losses) on Investments (0.55) (0.16) 0.46 (0.52) (0.18) 0.44
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS (0.24) 0.45 1.17 (0.24) 0.38 1.10
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net
Investment Income 0.00 (0.68) (0.71) 0.00 (0.61) (0.64)
Distributions from Realized Gains
on Investments 0.00 (0.09) (0.48) 0.00 (0.09) (0.48)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.00 (0.77) (1.19) 0.00 (0.70) (1.12)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $9.42 $9.66 $9.98 $9.42 $9.66 $9.98
===================================================================================================================================
TOTAL RETURN<F2> 0.83%<F4> 4.60% 12.11% 0.50%<F4> 3.91% 11.34%
===================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $31,738,837 $31,478,811 $28,617,421 $2,577,894 $2,425,059 $643,332
===================================================================================================================================
RATIO OF GROSS EXPENSES TO
AVERAGE NET ASSETS 1.17%<F3> 1.26% 1.29% 1.82%<F3> 1.91% 1.94%
===================================================================================================================================
RATIO OF NET EXPENSES TO
AVERAGE NET ASSETS 0.85%<F3> 0.85% 0.85% 1.50%<F3> 1.50% 1.50%
===================================================================================================================================
RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS 6.71%<F3> 7.03% 6.93% 6.06%<F3> 6.38% 6.28%
===================================================================================================================================
PORTFOLIO TURNOVER RATE 25.32% 252.44% 362.32% 25.32% 252.44% 362.32%
===================================================================================================================================
</TABLE>
<F1> Calculated based on average shares outstanding.
<F2> Total return includes deductions for management and other Fund expenses;
excludes deductions for sales loads and contingent deferred sales charges.
Returns include fee waivers in effect. In the absence of fee waivers, total
return would be reduced.
<F3> Computed on an annualized basis.
<F4> Reflects total return for the period; not annualized.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
September 30, 1999
NOTES TO FINANCIAL STATEMENTS
- ------
NOTE 1
- ------
Mason Street Funds, Inc. was incorporated under the laws of the state of
Maryland on August 30, 1996 as an open-end investment company under the
Investment Company Act of 1940. Mason Street Funds/R consist of the Aggressive
Growth Stock Fund, International Equity Fund, Growth Stock Fund, Growth and
Income Stock Fund, Index 500 Stock Fund, Asset Allocation Fund, High Yield Bond
Fund, Municipal Bond Fund and the Select Bond Fund, collectively known as "the
Funds." The Funds commenced operations on March 31, 1997 at $10.00 per share
with 1,200 shares in each of the Funds owned by Northwestern Mutual Life
Insurance Company ("Northwestern Mutual"). On April 1, 1997, Northwestern Mutual
invested an additional $225 million in Mason Street Funds/R; $25 million in the
Class A shares in each of the Funds.
On July 12, 1999, two new funds commenced operations: Small Cap Growth Stock
Fund and Index 400 Stock Fund. These two new funds were each organized with
300,000,000 authorized shares of Common Stock. The par value is $.001 per share.
Northwestern Mutual purchased 2,601,000 shares at $10.00 per share of the Index
400 Stock Fund and 501,000 shares of the Small Cap Growth Stock Fund.
Each Fund offers two classes of shares: Class A shares with an initial sales
charge up to 4.75% and Class B shares with contingent deferred sales charge of
5.0% to 0% over a period of up to six years. Each class of shares has equal
rights with respect to voting privileges.
Organizational costs and initial registration expenses are being deferred and
amortized over the period of benefit, but not to exceed 60 months from the
Funds' commencement of operations. These costs, totaling $417,215, were advanced
by Northwestern Mutual and were reimbursed by the Funds equally.
- ------
NOTE 2
- ------
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
Principal accounting policies are summarized in the following Notes.
- ------
NOTE 3
- ------
Bonds are valued on the basis of prices furnished by a service which determines
prices for normal institutional size trading units of bonds, without regard to
exchange or over-the-counter prices. When quotations are not readily available,
bonds are valued using procedures approved by the Board of Directors. Stocks
listed on a national or foreign stock exchange are valued at the final sale
price, or final bid price in absence of a sale. Stocks not listed on a national
or foreign stock exchange are valued at the closing bid price on the over-the-
counter market. Money market investments with maturities exceeding 60 days but
generally not exceeding one year are valued by marking to market on the basis of
an average of the most recent bid prices or yields. Money market investments
with maturities of 60 days or less are valued on an amortized cost basis or, if
the current market value differs substantially from the amortized cost, by
marking to market.
- ------
NOTE 4
- ------
Securities and other assets and liabilities denominated in foreign currencies
are translated into U.S. dollar amounts on the date of valuation. Purchases and
sales of securities and income items denominated in foreign currencies are
translated into U.S. dollar amounts on the respective dates of such
transactions. When the International Equity Fund, Asset Allocation Fund and
Select Bond Fund purchase or sell a foreign security they may enter into a
foreign exchange currency contract to minimize market risk from the trade date
to the settlement date of such transaction. Such foreign exchange currency
contracts are marked to market daily.
The Funds may enter into forward foreign currency contracts to hedge against
exchange rate risk arising from investments in securities denominated in foreign
currencies. Contracts are valued at the contractual forward rate and are marked
to market daily, with the change in market value recorded as an unrealized gain
or loss. When the contracts are closed, a realized gain or loss is incurred.
Risks may arise from changes in market value of underlying instruments and from
the possible inability of counter parties to meet the terms of their contracts.
The International Equity Fund, Asset Allocation Fund and Select Bond Fund do not
separately report the results of operations due to changes in foreign exchange
rates on investments from the fluctuations arising from changes in market prices
of securities held. Such fluctuations are included with the net realized or
unrealized gain or loss from investments.
Net realized and unrealized foreign exchange gains or losses arise from sales of
foreign currencies, currency gains or losses realized between the trade date and
the settlement date on security transactions, and the differences between the
amounts of dividends and foreign withholding taxes recorded on the Funds' books
and the U.S. dollar equivalent of the amounts actually received or paid.
<PAGE>
M A S O N S T R E E T F U N D S
- ------
NOTE 5
- ------
The Small Cap Growth Stock Fund, Aggressive Growth Stock Fund, Index 400 Stock
Fund, Growth Stock Fund, Index 500 Stock Fund, Asset Allocation Fund, Municipal
Bond Fund and the Select Bond Fund invest in futures contracts as an alternative
to investing in individual securities. The Small Cap Growth Stock Fund,
Aggressive Growth Stock Fund, Index 400 Stock Fund, Growth Stock Fund, Index 500
Stock Fund, Asset Allocation Fund, Municipal Bond Fund and the Select Bond Fund
could be exposed to market risk due to changes in the value of the underlying
securities or due to an illiquid secondary market. Futures contracts are marked
to market daily based upon quoted settlement prices. The Funds receive from or
pay to brokers an amount of cash equal to the daily fluctuation in the value of
the contracts. Such receipts or payments, known as the "variation margin," are
recorded by the Funds as unrealized gains or losses. When the contract is
closed, the Funds record a realized gain or loss equal to the difference between
the value of the contract at the time it was opened and the value at the time it
was closed.
For federal income tax purposes, net unrealized appreciation (depreciation) on
open futures contracts is generally required to be treated as realized gains
(losses).
- ------
NOTE 6
- ------
Income, Fund expenses, realized and unrealized gains and losses are allocated
daily to each class of shares based on the value of shares outstanding for the
Small Cap Growth Stock Fund, Aggressive Growth Stock Fund, International Equity
Fund, Index 400 Stock Fund, Growth Stock Fund, Growth and Income Stock Fund,
Index 500 Stock Fund and Asset Allocation Fund. Dividends and other
distributions are calculated in a similar manner and are declared and
distributed to shareholders annually for these Funds. For the High Yield Bond
Fund, Municipal Bond Fund and Select Bond Fund, income and Fund expenses are
allocated daily to each class of shares based on the value of settled shares.
Realized and unrealized gains and losses are allocated daily to each class of
shares based on the value of shares outstanding. Dividends and other
distributions are calculated in a similar manner. Income dividends are declared
daily, paid monthly. Capital gain dividends are declared and distributed
annually for these Funds.
- --------------------------------------------------------------------------------
- ------
NOTE 7
- ------
Interest income and discounts earned are recorded daily on the accrual basis and
dividend income is recorded on the ex-dividend date or as soon as information
from foreign issuers is available. Where applicable, dividends are recorded net
of foreign dividend tax. Discounts on securities purchased in the Funds are
amortized over the life of the respective securities using the effective
interest method. Premiums for the Municipal Bond Fund are amortized to the
remaining life or earlier call date, whichever is earlier. Securities
transactions are accounted for on trade date. The basis for determining cost on
sale of securities is identified cost. For the six months ended September 30,
1999, transactions in securities other than money market investments were:
<TABLE>
<CAPTION>
Total Security U.S. Gov't. Security Total Security U.S. Gov't. Security
Fund Purchases Purchases Sales/Maturities Sales/Maturities
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
SMALL CAP GROWTH STOCK FUND $6,115,981 _ $1,244,477 _
- -------------------------------------------------------------------------------------------------------------------------------
AGGRESSIVE GROWTH STOCK FUND 28,808,753 _ 28,485,322 _
- -------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL EQUITY FUND 6,623,907 _ 5,937,696 _
- -------------------------------------------------------------------------------------------------------------------------------
INDEX 400 STOCK FUND 26,922,980 _ 2,001,634 _
- -------------------------------------------------------------------------------------------------------------------------------
GROWTH STOCK FUND 11,292,560 _ 7,457,583 _
- -------------------------------------------------------------------------------------------------------------------------------
GROWTH AND INCOME STOCK FUND 31,042,736 _ 29,988,397 _
- -------------------------------------------------------------------------------------------------------------------------------
INDEX 500 STOCK FUND 15,018,797 _ 1,620,239 _
- -------------------------------------------------------------------------------------------------------------------------------
ASSET ALLOCATION FUND 27,040,668 9,746,405 23,550,129 9,168,032
- -------------------------------------------------------------------------------------------------------------------------------
HIGH YIELD BOND FUND 44,597,416 _ 42,586,092 _
- -------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BOND FUND 32,223,624 _ 30,534,286 _
- -------------------------------------------------------------------------------------------------------------------------------
SELECT BOND FUND 11,529,099 6,436,010 8,333,812 4,334,822
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
September 30, 1999
- ------
NOTE 8
- ------
Northwestern Mutual Investment Services, LLC ("NMIS") serves as investment
advisor to each of the Funds, with certain of the Funds also being served by a
subadvisor. Each Fund pays NMIS an annual fee for investment advisory services
based on average daily net assets of the Fund according to the following
schedule:
Fund Fee
- ---------------------------------------------
SMALL CAP GROWTH STOCK FUND 0.85%
- ---------------------------------------------
AGGRESSIVE GROWTH STOCK FUND 0.75%
- ---------------------------------------------
INTERNATIONAL EQUITY FUND 0.85%
- ---------------------------------------------
INDEX 400 STOCK FUND 0.40%
- ---------------------------------------------
GROWTH STOCK FUND 0.75%
- ---------------------------------------------
GROWTH AND INCOME STOCK FUND 0.65%
- ---------------------------------------------
INDEX 500 STOCK FUND 0.30%
- ---------------------------------------------
ASSET ALLOCATION FUND 0.70%
- ---------------------------------------------
HIGH YIELD BOND FUND 0.75%
- ---------------------------------------------
MUNICIPAL BOND FUND 0.30%
- ---------------------------------------------
SELECT BOND FUND 0.30%
- ---------------------------------------------
J.P. Morgan Investment Management Inc. ("J.P. Morgan") and Templeton Investment
Counsel, Inc. ("Templeton") have been retained under investment subadvisory
agreements to provide investment advice and, in general, to conduct the
management investment program of the Growth and Income Stock Fund and the
International Equity Fund, respectively. Of the amounts received from the Growth
and Income Stock Fund, NMIS pays J.P. Morgan 0.45% on the first $100 million of
the combined net assets for all funds managed for Northwestern Mutual by J.P.
Morgan, 0.40% on the next $100 million, 0.35% on the next $200 million and 0.30%
on the combined net assets in excess of $400 million. Of the amounts received
from the International Equity Fund, NMIS pays Templeton 0.50% on the first $100
million of the combined net assets for all funds managed for Northwestern Mutual
by Templeton and 0.40% on the combined net assets in excess of $100 million.
Robert W. Baird & Co. Incorporated ("Baird") serves as the Distributor of the
Funds. Baird is an affiliate of Northwestern Mutual and NMIS. The Funds have a
12b-1 distribution plan and shareholder services agreement with Baird pursuant
to which a 0.35% and a 1.00% annual fee for Class A and Class B, respectively,
is calculated based on daily net assets.
The 0.35% fee for Class A is comprised of a 0.25% shareholder servicing fee and
a 0.10% distribution fee paid to Baird for various distribution expenses. The
1.00% fee for Class B is comprised of a 0.25% shareholder servicing fee and a
0.75% distribution fee. Of the 1.00%, 0.35% is paid to Baird for distribution
expenses; the remaining 0.65% is paid to Northwestern Mutual for reimbursement
of commissions paid to agents.
Baird received $271,261 of dealer allowances, Northwestern Mutual received
$85,954 of underwriting concessions from Class A sales charges and Northwestern
Mutual received $43,350 of contingent deferred sales charges from Class B shares
for the six months ended September 30, 1999.
Each Fund also pays the administrator, Northwestern Mutual, a monthly fee at an
annual rate of 0.10% plus costs for pricing securities. This administration fee
is for services including recordkeeping, preparation of reports and fund
accounting (except for the International Equity Fund). For the International
Equity Fund, Northwestern Mutual waives a portion of its fee equal to the fund
accounting fee paid to Brown Brothers Harriman & Co.
In addition, each Fund pays transfer agent and custodian fees, outside
professional and auditing fees, registration fees, trademark fees,
organizational costs, insurance premiums, Directors' fees and expenses, and the
printing and mailing costs of sending reports and other information to existing
shareholders.
Certain Funds pay a portion of their custodian fees indirectly through expense
offset arrangements. Custodian fees are reduced for maintaining compensating
balances in non-interest bearing accounts. The Funds could have invested the
assets used to pay for the custodian fees, had the assets not been used in the
expense offset arrangements.
NMIS and affiliates have agreed to waive their fees and absorb certain other
operating expenses for the next five years beginning March 31, 1999, to the
extent necessary so that Total Operating Expenses will not exceed the following
amounts:
Fund Class A Class B
- ------------------------------------------------------------
SMALL CAP GROWTH STOCK FUND 1.40% 2.05%
- ------------------------------------------------------------
AGGRESSIVE GROWTH STOCK FUND 1.30% 1.95%
- ------------------------------------------------------------
INTERNATIONAL EQUITY FUND 1.65% 2.30%
- ------------------------------------------------------------
INDEX 400 STOCK FUND 0.95% 1.60%
- ------------------------------------------------------------
GROWTH STOCK FUND 1.30% 1.95%
- ------------------------------------------------------------
GROWTH AND INCOME STOCK FUND 1.20% 1.85%
- ------------------------------------------------------------
INDEX 500 STOCK FUND 0.85% 1.50%
- ------------------------------------------------------------
ASSET ALLOCATION FUND 1.35% 2.00%
- ------------------------------------------------------------
HIGH YIELD BOND FUND 1.30% 1.95%
- ------------------------------------------------------------
MUNICIPAL BOND FUND 0.85% 1.50%
- ------------------------------------------------------------
SELECT BOND FUND 0.85% 1.50%
- ------------------------------------------------------------
<PAGE>
M A S O N S T R E E T F U N D S
NMIS and affiliates have waived the following fees for the period ended
September 30, 1999:
Distribution Fees
-----------------
Fund Class A Class B Other Total
- ---------------------------------------------------------------------------
SMALL CAP GROWTH STOCK FUND $1,014 _ $38,452 $39,466
- ---------------------------------------------------------------------------
AGGRESSIVE GROWTH STOCK FUND 61 _ 55,072 55,133
- ---------------------------------------------------------------------------
INTERNATIONAL EQUITY FUND _ $15 24,288 24,303
- ---------------------------------------------------------------------------
INDEX 400 STOCK FUND 3,401 217 41,437 45,055
- ---------------------------------------------------------------------------
GROWTH STOCK FUND _ 21 52,691 52,712
- ---------------------------------------------------------------------------
GROWTH AND INCOME STOCK FUND 25 _ 54,746 54,771
- ---------------------------------------------------------------------------
INDEX 500 STOCK FUND 16 _ 60,764 60,780
- ---------------------------------------------------------------------------
ASSET ALLOCATION FUND _ 3 43,407 43,410
- ---------------------------------------------------------------------------
HIGH YIELD BOND FUND 1,016 _ 59,903 60,919
- ---------------------------------------------------------------------------
MUNICIPAL BOND FUND 990 _ 40,245 41,235
- ---------------------------------------------------------------------------
SELECT BOND FUND 481 _ 53,919 54,400
- ---------------------------------------------------------------------------
TOTAL $7,004 $256 $524,924 $532,184
===========================================================================
The Aggressive Growth Stock Fund and Small Cap Growth Stock Fund paid
commissions on Fund transactions to an affiliated broker in the amount of $2,220
and $270, respectively, during the six months ended September 30, 1999.
As permitted under Rule 10f-3 of the Investment Company Act of 1940, the Board
of Directors of the Funds has adopted a plan which will allow the Funds, under
certain conditions described in the Rule, to aquire newly-issued securities from
syndicates in which the Distributor is a member.
- --------------------------------------------------------------------------------
- ------
NOTE 9
- ------
Each Fund intends to comply with the requirements of the Internal Revenue Code
necessary to qualify as a regulated investment company and to make the requisite
distributions of income and capital gains to its shareholders sufficient to
relieve it from all or substantially all federal income taxes. Accordingly, no
provisions have been made for federal taxes.
Taxable distributions from net investment income and realized capital gains in
the Funds differ from book amounts earned during the period due to differences
in the timing of capital recognition, and due to the reclassification of certain
gains or losses from capital to income. The differences between cost amounts for
book purposes and tax purposes are due to deferred losses.
It is the policy of the Fund to reclassify the net effect of permanent
differences between book and taxable income to capital accounts on the
statements of assets and liabilities.
After October 31, 1998, the International Equity Fund, High Yield Bond Fund and
Select Bond Fund had losses in the amounts of $1,160,491, $575,353 and $224,058,
respectively. These amounts are deferred and deemed to have occurred in the next
fiscal year. The High Yield Bond Fund also has a capital loss carryforward in
the amount of $640,754. This amount can be used to offset realized
gains in future years, and will expire in the fiscal year ended
March 31, 2007.
<PAGE>
September 30, 1999
DIRECTORS AND OFFICERS
- ---------
DIRECTORS
- ---------
JAMES D. ERICSON
President and Chief Executive Officer
Northwestern Mutual, Milwaukee
MARTIN F. STEIN
Founder
Stein Optical, Milwaukee
JOHN K. MACIVER
Senior Partner
Michael Best & Friedrich LLC, Milwaukee
STEPHEN N. GRAFF
Retired Partner
Arthur Andersen LLP, Milwaukee
WILLIAM J. BLAKE
Chairman
Blake Investment Corp., Milwaukee
WILLIAM A. MCINTOSH
Retired Division Head - U.S. Fixed Income
Salomon Brothers, Chicago
- --------
OFFICERS
- --------
JAMES D. ERICSON
President
MARK G. DOLL
Vice President and Treasurer
MERRILL C. LUNDBERG
Secretary
BARBARA E. COURTNEY
Controller
<PAGE>
This page intentionally left blank.
<PAGE>
(back cover)
MASON STREET FUNDS/R
P.O. BOX 219419
KANSAS CITY, MO 64121-9419
1-888-MASONST (1-888-627-6678)
WWW.MASONSTREETFUNDS.COM
94-1002
Robert W. Baird & Co. Incorporated, Distributor 11/97 (Rev. 11/99)
Robert W. Baird & Co. Incorporated. Member New York Stock Exchange and other
principal exchanges, member SIPC.
