BOND FUNDS MULTI-ASSET FUND STOCK FUNDS
(LOGO)
MASON STREET
FUNDS/R
SEMI-ANNUAL REPORT
SEPTEMBER 30, 2000
<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>
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SEPTEMBER 30, 2000
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LETTER TO SHAREHOLDERS
<PHOTO>
JAMES D. ERICSON
After several years of euphoria in the U.S. economy and equity markets, so far
in 2000 has proven to be a sobering time, perhaps a needed break from a period
of unrealistic expectations. At the end of the third quarter, stock market
averages are trading lower than at the beginning of the year for the first time
in several years. Bond investors are finally seeing returns higher than stocks
for some periods, perhaps reflecting the desire of some investors to reduce risk
in their portfolios.
Rising productivity, driven largely by new technologies, has been the main
engine of the current period of economic growth, which is the longest expansion
on record. The prospect of increased productivity has induced companies to
invest in high-tech equipment, and such investments have further supported the
economy's growth. Now such investments appear to be slowing a bit, just as
hundreds of new technology companies were gearing up to meet demand that was
previously exploding. Very weak performance of the technology sector of the
stock market this year, especially in the realm of newer Internet-focused
companies, has severely damaged the ability of these companies to raise the
capital they need. It now appears that the greatest beneficiaries of evolving
Internet technology may be established companies that develop the ability to use
the Internet to further advance productivity, rather than companies whose
operations are specifically Internet-focused.
The Federal Reserve continues to demonstrate a desire to keep the economy on
course, while also working to curb inflation. And it is important to note that
productivity has continued to improve in 2000. For the most part, U.S. companies
are still doing well, but it is becoming more difficult for them to meet the
high earnings expectations investors have developed. With wages and oil prices
rising, the ability to raise prices limited by competition, and European
earnings under pressure from the weak euro, many are finding it impossible to
generate growth at the pace of the last few years. Consumers seem to have curbed
their spending a bit, perhaps because the less buoyant stock market has slowed
growth in their wealth.
It is important to stress that the current situation has little in common with
the painful recessions the economy has experienced in the past. Growth has not
stopped; it has merely slowed a bit from an unsustainable pace. It appears
likely that the Federal Reserve's careful study of economic developments,
accompanied by a diligent drive to keep inflation at an acceptable level, will
produce the desired "soft landing" - a slower pace of growth without an actual
recession.
If you have been reading these reports for some time, you will recall that we
have stated consistently that the 20%-plus annual returns the equity market
provided between 1995 and 1999 are extraordinary. Newer investors may be
surprised by the weakness and volatility in the stock market this year.
Two hallmarks of the Mason Street Funds/R since they were launched have been a
long-term approach to investing and significant diversification of holdings. It
is important to understand that the diversification within the individual Funds
addresses only the asset classes appropriate for that Fund, as outlined in the
descriptions of each Fund. This means that trends affecting a certain type of
investment will most definitely have an impact on the Funds that own that type
of investment. For example, changes in interest rates or disruptions in the bond
market will affect returns from our bond Funds. More relevant to the current
situation, falling prices of many technology stocks have a pronounced effect on
the Aggressive Growth Stock and Small Cap Growth Stock Funds because technology
companies represent a significant portion of the value - as well as the
opportunity - represented by these asset classes.
As you consider which Funds within the Mason Street Family are best for you, you
should think carefully about your personal objectives and about how comfortable
you are with variations over time in the value and return of your own portfolio.
You may find that you prefer to invest some of your money for maximum growth
potential, while keeping a portion of your investment dollars in those funds
with lower anticipated returns and more stability. Your Registered
Representative can be very helpful as you make these important choices.
We are encouraged to see that money is still flowing into mutual funds during
this period of uncertainty in the economy and the market; this suggests to us
that investors are prudently taking a long term view. We hope that you will
continue to invest with us in the years ahead.
Mason Street Funds/R
/S/JAMES D. ERICSON
JAMES D. ERICSON
President
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M A S O N S T R E E T F U N D S
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TABLE OF CONTENTS
PERFORMANCE SUMMARY 3
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OVERVIEW AND OUTLOOK 4
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SMALL CAP GROWTH STOCK FUND 6
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AGGRESSIVE GROWTH STOCK FUND 9
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INTERNATIONAL EQUITY FUND 13
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INDEX 400 STOCK FUND 17
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GROWTH STOCK FUND 23
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GROWTH AND INCOME STOCK FUND 27
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INDEX 500 STOCK FUND 30
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ASSET ALLOCATION FUND 37
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HIGH YIELD BOND FUND 47
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MUNICIPAL BOND FUND 53
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SELECT BOND FUND 57
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FINANCIAL STATEMENTS 62
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NOTES TO FINANCIAL STATEMENTS 104
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DIRECTORS AND OFFICERS 108
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<PAGE>
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SEPTEMBER 30, 2000
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PERFORMANCE SUMMARY
<TABLE>
<CAPTION>
For the Periods Ended September 30, 2000
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 9/30/2000) Fund<F2> Fund Fund Fund<F2> Fund Fund Fund Fund Fund Fund Fund
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
One Year 84.74% 68.23% 6.22% 42.52% 26.52% 10.10% 12.83% 25.91% 1.88% 6.75% 6.16%
Three Year Cumulative N/A 110.66% 1.51% N/A 77.80% 28.74% 55.09% 52.83% -0.09% 15.08% 15.41%
Three Year Annualized N/A 28.19% 0.50% N/A 21.15% 8.78% 15.75% 15.19% -0.03% 4.79% 4.89%
Since Inception 91.94% 190.92% 11.67% 29.41% 120.82% 64.27% 94.64% 82.78% 16.25% 24.01% 25.52%
Annualized 70.71% 35.66% 3.20% 23.55% 25.39% 15.23% 20.95% 18.80% 4.39% 6.34% 6.71%
</TABLE>
<TABLE>
<CAPTION>
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 9/30/2000) Fund<F2> Fund Fund Fund<F2> Fund Fund Fund Fund Fund Fund Fund
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
One Year 75.93% 60.25% 1.21% 35.79% 20.53% 4.91% 7.46% 19.94% -2.97% 1.65% 1.12%
Three Year Cumulative N/A 100.63% -3.32% N/A 69.34% 22.59% 47.68% 45.52% -4.86% 9.57% 9.89%
Three Year Annualized N/A 26.12% -1.12% N/A 19.19% 7.02% 13.88% 13.32% -1.65% 3.09% 3.19%
Since Inception 82.80% 177.06% 6.35% 23.25% 110.31% 56.45% 85.37% 74.08% 10.71% 18.10% 19.54%
Annualized 64.01% 33.78% 1.77% 18.70% 23.65% 13.63% 19.28% 17.15% 2.95% 4.87% 5.23%
</TABLE>
<TABLE>
<CAPTION>
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 9/30/2000) Fund<F2> Fund Fund Fund<F2> Fund Fund Fund Fund Fund Fund Fund
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
One Year 83.55% 66.93% 5.64% 41.74% 25.76% 9.39% 12.12% 25.15% 1.21% 6.06% 5.47%
Three Year Cumulative N/A 106.37% -0.26% N/A 74.45% 26.28% 52.19% 49.93% -2.19% 12.82% 13.15%
Three Year Annualized N/A 27.32% -0.09% N/A 20.38% 8.09% 15.03% 14.45% -0.74% 4.10% 4.20%
Since Inception 90.53% 184.17% 9.41% 28.56% 115.96% 60.63% 90.39% 78.71% 13.40% 21.11% 22.63%
Annualized 69.68% 34.75% 2.60% 22.88% 24.59% 14.49% 20.19% 18.04% 3.66% 5.62% 6.00%
</TABLE>
<TABLE>
<CAPTION>
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 9/30/2000) Fund<F2> Fund Fund Fund<F2> Fund Fund Fund Fund Fund Fund Fund
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
One Year 78.55% 61.93% 0.64% 36.74% 20.76% 4.39% 7.12% 20.15% -3.40% 1.06% 0.57%
Three Year Cumulative N/A 103.37% -3.02% N/A 71.45% 23.55% 49.19% 46.93% -4.27% 9.90% 10.52%
Three Year Annualized N/A 26.70% -1.02% N/A 19.69% 7.30% 14.27% 13.68% -1.44% 3.20% 3.39%
Since Inception 86.53% 181.17% 6.41% 24.56% 112.96% 57.63% 87.39% 75.71% 11.08% 18.11% 19.86%
Annualized 66.75% 34.35% 1.79% 19.74% 24.10% 13.88% 19.65% 17.47% 3.05% 4.87% 5.31%
</TABLE>
<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. Class B performance reflects a contingent
deferred sales charge (CDSC) of 5% for One Year and 4% for Since Inception.
<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 Three Years and Since Inception.
N/A - Not applicable
<PAGE>
OVERVIEW AND OUTLOOK
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M A S O N S T R E E T F U N D S
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THE ECONOMY
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After a long period of growth at rates above what is generally considered to be
sustainable, the U.S. economy is finally showing signs of slowing, though many
statistics seem to send mixed signals. The latest revisions to the GDP data
indicate that the economy grew at a 5.6% annual rate in the second quarter,
fueled almost entirely by consumer spending. Industrial activity is less robust,
in part because the strong dollar is encouraging imports, which have a negative
effect on demand for similar domestic goods. Surveys of purchasing managers
indicate weakness in new orders, export demand and inventories in September.
The Fed has left rates unchanged at its last three meetings, apparently in the
belief that economic growth has moderated. However, the Fed has warned that it
is still concerned about inflationary pressures. The policymakers seem
especially worried that soaring oil prices could lift inflation expectations, a
trend that could become imbedded in wage and price decisions. On a more positive
note, recent Fed comments confirm the belief that productivity gains have raised
the rate at which the economy can grow without igniting inflation. The Fed's
challenge is to strike a policy balance that will slow economic growth enough to
keep inflation in check without precipitating a serious recession.
ECONOMIC GROWTH AND INFLATION
REAL GDP CPI-U
---------------------------------------------------------
1990 1.8% 6.1%
1991 -.5% 3.1%
1992 3.0% 2.9%
1993 2.7% 2.7%
1994 4.0% 2.7%
1995 2.7% 2.5%
1996 3.6% 3.3%
1997 4.2% 1.7%
1998 4.3% 1.6%
1999 4.2% 2.6%
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.
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THE EQUITY MARKET
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After five consecutive years of returns above 20%, driven largely by soaring
technology shares, the stock market has become nervous during 2000. In the first
quarter of the year, the market continued to move up, dominated by technology
stocks, which reached levels higher than most investors could have imagined.
Stock prices in the technology sector have fallen precipitously since then. The
most dramatic drops have been among the newer issues, but even industry leaders
such as Microsoft and Intel are far below their peaks. Warnings of disappointing
earnings or revenues are increasingly prevalent, and they often send stocks down
sharply. As slowing demand growth causes leading companies to miss earnings
projections, stock prices of one favorite after another have been hammered.
The most striking aspect of the equity market in 2000 is its volatility. At the
end of September, the broad S&P 500/R Index was only 5% below its peak level in
March, but the day-to-day and month-to-month swings over the last six months
have been quite dramatic. The S&P 500/R Index is more volatile than it has been
at any time since the 1930s, with volatility measured by the number of days on
which the index rises or falls by a percentage point or more. The drop in the
technology-heavy Nasdaq Composite has been far greater: by the end of September,
it had fallen almost 40% from its peak. In six of the first nine months of 2000,
the monthly change in the Nasdaq Composite (either up or down) was an all-time
record for that month.
ANNUAL TOTAL RETURNS FROM S&P 500/R INDEX
1990 -3.1%
1991 30.5%
1992 7.6%
1993 10.1%
1994 1.2%
1995 37.4%
1996 22.8%
1997 33.4%
1998 28.5%
1999 21.1%
Source: Standard & Poor's
<PAGE>
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SEPTEMBER 30, 2000
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THE BOND MARKET
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In the third quarter of 2000, bonds outperformed stocks. The total return of the
Merrill Lynch Domestic Master Index was 2.99%, versus (.95)% for the S&P 500.
Over the 12 months ending September, total return from bonds (as measured by the
Merrill Lynch Domestic Master Index) was 6.94%, compared with 13.39% for the S&P
500; however, for the six months ended September 2000, when the stock market was
weak and highly volatile, the bond index provided a return of 4.6%, versus
(3.7)% for the S&P 500.
In recent months, the bond market has been affected by two conflicting forces.
Concern about increasing inflation has pushed interest rates on intermediate and
long-term bonds somewhat higher, while the perception that the economy is
cooling is exerting downward pressure on short-term rates. Treasury yields are
still slightly inverted (meaning that short-term securities have higher yields
than longer term bonds) out to 10 years, but have returned to a more normal
positive slope from 10 to 30 years. Long-term bonds normally carry higher yields
than short-term instruments because higher income is necessary to induce
investors to commit for longer periods.
Higher yields on some bonds suggest that the market believes that inflation is
picking up. In fact, recent reports indicate an inflation rate close to 3.5%,
compared with rates below 3% for four of the last five years. Also, the Fed has
left rates unchanged for the last four months, following six increases beginning
in the middle of 1999. Short-term bond yields have declined in this environment.
Since bond prices move in the opposite direction of interest rates, two-year
bonds have outperformed 30-year instruments.
During the first half of 2000, Treasury securities provided higher total returns
than any other bonds, as prices were driven up as Treasury bonds were perceived
to be in short supply due to the U.S. Treasury buyback program. Since June,
corporate and mortgage-backed securities have performed better, as spreads (the
interest rate difference between low-risk Treasury securities and other bonds)
have narrowed from their 15-year highs.
ANNUAL TOTAL RETURNS FROM
MERRILL LYNCH DOMESTIC MASTER INDEX
1990 9.1%
1991 15.9%
1992 7.6%
1993 10.0%
1994 -2.8%
1995 18.5%
1996 3.6%
1997 9.7%
1998 8.9%
1999 -0.96%
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. The index measures the income provided by, and
the price changes of, the underlying securities.
<PAGE>
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M A S O N S T R E E T F U N D S
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SMALL CAP GROWTH STOCK FUND
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SMALL CAP GROWTH STOCK FUND
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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: $15.5 million
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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.
While not producing gains of the size of those produced by the mid cap index,
the S&P Small Cap 600 Index increased 4.35% during the last six months as
energy, financials, utilities and healthcare produced healthy gains. The Small
Cap Growth Stock Fund outperformed in the second calendar quarter, but lagged in
the third. The reason for the recent underperformance was due to a few factors:
first, our energy holdings underperformed along with consumer cyclicals. Second,
we had no exposure to utilities which contributed to the Index return. Lastly,
we were only half weighted in financials, another strong contributing sector. On
the positive side, our technology holdings did decline less than the technology
sector in the Index and our transportation holdings had a very good quarter.
Within these underweighted sectors, however, stock selection has been good. Good
performance was delivered by Nabors Industries, an oil field services company,
and by a new holding, CompuCredit, in financial services. Healthcare companies
Biovail and Universal Health Services also contributed to performance. We look
for improved performance from the small cap sector as this asset class is less
sensitive to the international currencies and economies.
SECTOR ALLOCATION
9/30/00
--------------------------------------------------------
Technology 33%
Consumer 19%
Healthcare 12%
Cash Equivalents 9%
Finance 7%
Energy 7%
Basic Materials/Capital Goods 6%
Transportation 5%
Communication Services 2%
TOP 10 EQUITY HOLDINGS
9/30/00
Company % Net Assets
--------------------------------------------------------
Advent Software, Inc. 3.1%
The Corporate Executive Board Company 2.9%
Nabors Industries, Inc. 2.3%
Biovail Corporation 2.2%
Priority Healthcare Corporation - Class B 2.0%
SmartForce Public Limited Company, ADR 2.0%
The Talbots, Inc. 2.0%
Radian Group, Inc. 2.0%
SkyWest, Inc. 1.8%
C.H. Robinson Worldwide, Inc. 1.8%
<PAGE>
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SEPTEMBER 30, 2000
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SMALL CAP GROWTH STOCK FUND
PERFORMANCE RELATIVE TO RELEVANT INDICES
SMALL CAP
GROWTH STOCK
SMALL CAP SMALL CAP FUND
GROWTH GROWTH CLASS B S&P RUSSELL
STOCK FUND STOCK FUND REDEMPTION 600 STOCK 2000 STOCK
CLASS A CLASS B VALUE FUND INDEX FUND INDEX
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7/12/99 9,524 10,000 10,000 10,000
9/30/99 9,895 10,380 9,399 9,334
3/31/00 17,287 18,095 11,185 11,839
9/30/00 18,280 19,053 18,653 11,670 12,422
TOTAL RETURN Average
Annual
One Since
For the periods ended September 30, 2000 Year Inception<F1>
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Small Cap Growth Stock Fund
(Class A - without initial sales charge) 84.74% 70.71%
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S&P 600 Stock Fund Index 24.17% 13.47%
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Russell 2000 Stock Fund Index 23.38% 19.42%
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<F1>Fund inception date is 7/12/99. Returns are annualized.
The Small Cap Growth Stock Fund's investment in Initial Public Offerings (IPOs)
had a significant impact on its performance for the periods shown. There can be
no assurance that IPOs will continue to have a positive effect on the Fund's
performance. Since the Fund is relatively small in asset size, it may be easier
to achieve higher returns than in a larger fund.
The Standard and 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, 2000, the 600 companies in the composite had a
median market capitalization of $469.7 million and total market value of $380.2
billion. The SmallCap 600 represents approximately 1.5% of the market value of
Compustat's database of over 10,000 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 $5.1 billion; the median market capitalization
$791.1 million. Market capitalization of companies in the Index ranged from $520
billion to $178 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 $580 million; the median market capitalization was
approximately $466 million. The largest company in the index had a total market
capitalization of approximately $1.5 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 an applicable contingent deferred sales charge for Class B.
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
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COMMON STOCK (90.8%)
BASIC MATERIALS (0.9%)
Cambrex Corporation 3,900 $144,300
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CAPITAL GOODS (5.4%)
<F1> APW Ltd. 4,700 229,124
<F1> Dycom Industries, Inc. 1,700 70,763
Federal Signal Corporation 7,700 153,038
Kaydon Corporation 4,900 112,700
<F1> MSC Industrial Direct Co., Inc. - Class A 5,500 83,875
<F1> Plexus Corp. 2,600 183,300
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TOTAL 832,800
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COMMUNICATION SERVICES (1.8%)
<F1> Pinnacle Holdings, Inc. 1,900 50,588
<F1> Tollgrade Communications, Inc. 1,600 222,100
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TOTAL 272,688
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CONSUMER CYCLICALS (15.8%)
<F1> Catalina Marketing Corporation 4,200 158,025
<F1> CDW Computer Centers, Inc. 3,600 248,400
<F1> Charles River Associates Incorporated 4,300 52,138
<F1> The Corporate Executive Board Company 11,000 442,749
<F1> Dollar Tree Stores, Inc. 3,350 135,884
<F1> Forrester Research, Inc. 3,600 229,500
<F1> Heidrick & Struggles International, Inc. 2,900 148,988
<F1> Hotel Reservations Network, Inc. - Class A 4,800 175,800
<F1> Jupiter Media Metrix, Inc. 6,784 108,120
<F1> O'Reilly Automotive, Inc. 15,200 222,300
The Talbots, Inc. 4,600 304,750
<F1> Tetra Tech, Inc. 8,200 234,213
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TOTAL 2,460,867
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CONSUMER STAPLES (3.6%)
<F1> Patterson Dental Company 7,300 164,250
<F1> Priority Healthcare Corporation - Class B 4,100 312,625
<F1> Westwood One, Inc. 3,600 77,175
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TOTAL 554,050
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M A S O N S T R E E T F U N D S
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SMALL CAP GROWTH STOCK FUND
Shares/Par Market Value
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ENERGY (6.6%)
<F1> Global Industries, Ltd. 14,200 $177,500
<F1> Grant Prideco, Inc. 10,000 219,375
<F1> Marine Drilling Companies, Inc. 7,600 217,075
<F1> Nabors Industries, Inc. 6,900 361,560
<F1> Stone Energy Corporation 900 49,500
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TOTAL 1,025,010
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FINANCE (6.6%)
<F1> CompuCredit Corporation 3,900 218,766
Investors Financial Services Corp. 4,200 265,125
Radian Group, Inc. 4,500 303,750
Waddell & Reed Financial, Inc. - Class A 7,400 229,400
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TOTAL 1,017,041
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HEALTHCARE (12.1%)
<F1> Biovail Corporation 4,100 333,893
<F1> CIMA Labs Inc. 1,100 57,269
<F1> Lincare Holdings, Inc. 6,800 195,075
<F1> Province Healthcare Company 6,900 275,568
<F1> Shire Pharmaceuticals Group PLC, ADR 4,200 216,825
<F1> Sonic Innovations, Inc. 3,900 40,950
<F1> Sybron International Corporation 4,200 100,800
<F1> Universal Health Services, Inc. - Class B 2,500 214,063
<F1> Varian, Inc. 3,500 150,719
<F1> Vascular Solutions, Inc. 9,000 168,891
<F1> Ventana Medical Systems, Inc. 5,100 129,413
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TOTAL 1,883,466
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TECHNOLOGY (33.0%)
<F1> ACT Manufacturing, Inc. 1,900 100,225
<F1> Advent Software, Inc. 6,800 475,149
<F1> Aspen Technology, Inc. 4,500 203,063
<F1> BARRA, Inc. 1,300 80,681
<F1> C-Cube Microsystems, Inc. 3,700 75,850
<F1> Copper Mountain Networks, Inc. 1,500 56,250
<F1> Cosine Communications, Inc. 1,400 77,788
<F1> Crown Castle International Corp. 3,800 118,038
<F1> Cymer, Inc. 4,200 128,888
<F1> Diversinet Corp. 7,900 46,413
<F1> Documentum, Inc. 2,200 178,613
<F1> Engage Technologies, Inc. 2,800 22,750
<F1> Exchange Applications, Inc. 4,400 19,938
<F1> EXFO Electro-Optical Engineering Inc. 1,100 47,919
<F1> Getty Images, Inc. 6,100 185,669
<F1> Inet Technologies, Inc. 4,000 117,000
<F1> Infonautics, Inc. - Class A 4,400 9,350
<F1> Inforte Corp. 4,400 154,550
<F1> Kent Electronics Corporation 4,500 107,438
Shares/Par Market Value
---------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
<F1> The Management Network Group, Inc. 7,300 $152,388
<F1> MCK Communications, Inc. 2,500 56,563
<F1> Metasolv Software, Inc. 3,600 147,150
<F1> MMC Networks, Inc. 1,800 227,699
<F1> Natural MicroSystems Corporation 3,800 204,428
<F1> Network Engines, Inc. 6,700 274,280
<F1> PMC-Sierra, Inc. 1,200 258,299
<F1> Power-One, Inc. 4,200 254,165
<F1> Predictive Systems, Inc. 4,300 83,044
<F1> PRI Automation, Inc. 2,900 52,925
<F1> QLogic Corporation 1,600 140,800
<F1> Semtech Corporation 5,400 232,874
<F1> SmartForce Public Limited Company, ADR 6,500 307,937
<F1> TESSCO Technologies Incorporated 6,400 163,200
<F1> TIBCO Software Inc. 1,400 118,213
<F1> UTStarcom, Inc. 5,500 115,156
<F1> Viasystems Group, Inc. 8,600 146,200
---------------------------------------------------------------------------
TOTAL 5,140,893
---------------------------------------------------------------------------
TRANSPORTATION (5.0%)
<F1> Atlantic Coast Airlines Holdings, Inc. 6,600 212,438
C.H. Robinson Worldwide, Inc. 4,900 276,161
SkyWest, Inc. 5,500 281,874
---------------------------------------------------------------------------
TOTAL 770,473
---------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $11,146,724) 14,101,588
===========================================================================
MONEY MARKET INVESTMENTS (7.1%)
CAPTIVE FINANCE COMPANIES (7.1%)
Daimler-Chrysler N.A. Holdings,
6.5%, 10/30/00 1,100,000 1,094,439
---------------------------------------------------------------------------
TOTAL MONEY MARKET INVESTMENTS
(COST $1,094,439) 1,094,439
===========================================================================
TOTAL INVESTMENTS (97.9%)
(COST $12,241,163)<F2> 15,196,027
===========================================================================
OTHER ASSETS, LESS LIABILITIES (2.1%) 319,189
===========================================================================
TOTAL NET ASSETS (100.0%) $15,515,216
===========================================================================
<F1> Non-Income Producing
ADR - American Depository Receipt
<F2> At September 30, 2000, the aggregate cost of securities for federal tax
purposes was $12,241,163 and the net unrealized appreciation of investments
based on that cost was $2,954,864 which is comprised of $3,994,748
aggregate gross unrealized appreciation and $1,039,884 aggregate gross
unrealized depreciation.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
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: $105.4 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.
In recent months, the Aggressive Growth Fund has underperformed its major
benchmark, the S&P MidCap 400 Index, but has outperformed the broader S&P 500/R
Index. Sector weightings were the major factor in the underperformance versus
the S&P MidCap 400. With its focus on high growth, the Fund was more heavily
invested than the Index in technology, a formerly strong sector that has been
very weak since April 2000. The Fund has been underweighted in energy, finance,
health-care and utilities, sectors that have performed relatively well recently.
However, within these underweighted sectors, good stock selection has
contributed significantly to the Fund's return. In the energy sector, Nabors
Industries and Dynegy, a deregulated utility that has become an independent
power producer, have performed very well. In the financial sector, Investors
Financial Services Corp. and Fiserv are service providers that are among the
Fund's largest and most successful holdings. One of the few good performers in
the technology group was MMC Networks, which appreciated significantly after
agreeing to be acquired by Applied Micro Circuits.
SECTOR ALLOCATION
9/30/00
--------------------------------------------------------
Technology 49%
Consumer 15%
Healthcare 11%
Energy 10%
Basic Materials/Capital Goods 5%
Finance 5%
Cash Equivalents 4%
Other Industries 1%
TOP 10 EQUITY HOLDINGS
9/30/00
Company % Net Assets
--------------------------------------------------------
Gemstar-TV Guide International, Inc. 2.7%
Network Appliance, Inc. 2.6%
Dynegy Inc. - Class A 2.6%
Paychex, Inc. 2.4%
Rational Software Corporation 2.3%
Sanmina Corporation 2.2%
Investors Financial Services Corp. 2.1%
Fiserv, Inc. 1.9%
BEA Systems, Inc. 1.9%
Jabil Circuit, Inc. 1.8%
<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
AGGRESSIVE
GROWTH STOCK
AGGRESSIVE AGGRESSIVE FUND
GROWTH GROWTH CLASS B S&P
STOCK FUND STOCK FUND REDEMPTION MIDCAP 400
CLASS A CLASS B VALUE INDEX
-----------------------------------------------------------------------------
3/31/97 9,524 10,000 10,000
9/30/97 13,152 13,770 13,313
3/31/98 14,436 15,059 14,903
9/30/98 11,329 11,783 12,475
3/31/99 13,890 14,404 14,969
9/30/99 16,470 17,024 15,650
3/31/00 26,510 26,810 20,669
9/30/00 27,706 28,417 28,117 22,414
TOTAL RETURN Average
Annual
One Since
For the periods ended September 30, 2000 Year Inception<F1>
--------------------------------------------------------------------------------
Aggressive Growth Stock Fund
(Class A - without initial sales charge) 68.23% 35.66%
--------------------------------------------------------------------------------
S&P MidCap 400 Index 43.21% 25.90%
--------------------------------------------------------------------------------
<F1> Fund inception date is 3/31/97. Returns are annualized.
The total return for the Aggressive Growth Stock Fund coincides with a period of
accelerated growth in the small-cap and mid-cap sectors of the stock market.
There can be no assurance that this accelerated growth will continue to have a
positive effect on the Fund's performance in the future. Since the Fund is
relatively small in asset size, it may be easier to achieve higher returns than
in a larger fund.
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. 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, 2000, the 400 companies in the composite had a median market capitalization
of $1.7 billion and a total market value of $963.7 billion. The MidCap 400
represents approximately 4% of the market value of the Compustat's database of
about 10,000 equities.
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 an applicable contingent deferred sales charge for Class B.
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 (96.1%)
CAPITAL GOODS (4.3%)
<F1> Jabil Circuit, Inc. 33,200 $1,884,100
Kaydon Corporation 14,300 328,900
<F1> Sanmina Corporation 24,444 2,288,570
---------------------------------------------------------------------------
TOTAL 4,501,570
---------------------------------------------------------------------------
COMMUNICATION SERVICES (0.7%)
<F1> Allegiance Telecom, Inc. 2,450 91,263
<F1> Level 3 Communications, Inc. 1,700 131,113
<F1> NTL Incorporated 11,300 523,330
---------------------------------------------------------------------------
TOTAL 745,706
---------------------------------------------------------------------------
CONSUMER CYCLICALS (11.1%)
<F1> Catalina Marketing Corporation 25,100 944,388
<F1> CDW Computer Centers, Inc. 23,500 1,621,499
Cintas Corporation 25,650 1,117,378
<F1> The Corporate Executive Board Company 37,838 1,522,980
<F1> Dollar Tree Stores, Inc. 18,750 760,547
<F1> Kohl's Corporation 21,400 1,234,513
<F1> Lamar Advertising Company - Class A 6,600 249,975
<F1> O'Reilly Automotive, Inc. 16,800 245,700
<F1> Robert Half International Inc. 42,400 1,470,750
<F1> Tech Data Corporation 26,200 1,120,050
<F1> TMP Worldwide Inc. 18,000 1,449,000
---------------------------------------------------------------------------
TOTAL 11,736,780
---------------------------------------------------------------------------
CONSUMER STAPLES (3.9%)
<F1> Clear Channel Communications, Inc. 4,762 269,053
<F1> Gemstar-TV Guide International, Inc. 32,082 2,797,149
<F1> Patterson Dental Company 45,700 1,028,250
---------------------------------------------------------------------------
TOTAL 4,094,452
---------------------------------------------------------------------------
ENERGY (8.1%)
<F1> BJ Services Company 16,300 996,338
<F1> Cooper Cameron Corporation 12,500 921,094
<F1> Grant Prideco, Inc. 35,600 780,975
<F1> Nabors Industries, Inc. 26,000 1,362,400
Santa Fe International Corporation 40,300 1,816,018
Tosco Corporation 29,100 907,556
<F1> Weatherford International, Inc. 41,100 1,767,300
---------------------------------------------------------------------------
TOTAL 8,551,681
---------------------------------------------------------------------------
FINANCE (4.6%)
ACE Limited 35,600 1,397,300
Investors Financial Services Corp. 35,700 2,253,562
<F1> Knight Trading Group, Inc. - Class A 10,400 374,400
Radian Group, Inc. 11,753 793,328
---------------------------------------------------------------------------
TOTAL 4,818,590
---------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
AGGRESSIVE GROWTH STOCK FUND
Shares/Par Market Value
---------------------------------------------------------------------------
HEALTHCARE (10.6%)
<F1> ALZA Corporation 10,500 $908,250
<F1> Elan Corporation PLC, ADR 29,000 1,587,750
<F1> Health Management Associates, Inc. - Class A 40,500 842,906
<F1> Lincare Holdings, Inc. 17,400 499,163
<F1> MedImmune, Inc. 17,300 1,336,425
PE Corporation-PE Biosystems Group 14,700 1,712,549
<F1> Province Healthcare Company 18,900 754,819
<F1> Sepracor, Inc. 9,200 1,128,725
<F1> Shire Pharmaceuticals Group PLC, ADR 13,000 671,125
Stryker Corporation 23,300 1,000,444
<F1> Sybron International Corporation 29,100 698,400
---------------------------------------------------------------------------
TOTAL 11,140,556
---------------------------------------------------------------------------
TECHNOLOGY (48.8%)
<F1> ADC Telecommunications, Inc. 37,200 1,000,331
<F1> Altera Corporation 24,000 1,146,000
<F1> American Tower Corporation - Class A 30,000 1,130,625
<F1> Applied Materials, Inc. 11,462 679,840
<F1> BEA Systems, Inc. 25,500 1,985,812
<F1> Bluestone Software, Inc. 5,800 100,775
<F1> Business Objects S.A., ADR 10,700 1,209,769
<F1> C-Cube Microsystems, Inc. 10,600 217,300
<F1> CIENA Corporation 9,400 1,154,438
<F1> Comverse Technology, Inc. 15,200 1,641,600
<F1> Concord EFS, Inc. 43,625 1,549,369
<F1> Conexant Systems, Inc. 11,500 481,563
<F1> Copper Mountain Networks, Inc. 12,100 453,750
<F1> Credence Systems Corporation 12,200 366,000
<F1> Crown Castle International Corp. 15,300 475,256
<F1> DST Systems, Inc. 13,600 1,598,000
<F1> Electronic Arts, Inc. 24,200 1,194,875
<F1> Fiserv, Inc. 33,286 1,992,998
<F1> Foundry Networks, Inc. 7,400 495,338
<F1> Getty Images, Inc. 41,700 1,269,244
<F1> Harmonic Inc. 10,284 246,816
<F1> Intuit, Inc. 25,900 1,476,300
<F1> JDS Uniphase Corporation 14,800 1,401,375
<F1> Macromedia, Inc. 8,700 703,069
<F1> Microchip Technology Incorporated 30,525 1,009,233
<F1> MMC Networks, Inc. 9,700 1,227,050
<F1> Network Appliance, Inc. 21,500 2,738,562
<F1> Novellus Systems, Inc. 31,100 1,448,094
Paychex, Inc. 47,572 2,497,529
<F1> Peregrine Systems, Inc. 32,300 611,681
Shares/Par Market Value
---------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
PerkinElmer, Inc. 8,700 $908,063
<F1> PMC-Sierra, Inc. 7,500 1,614,375
<F1> Portal Software, Inc. 19,900 796,000
<F1> PRI Automation, Inc. 3,900 71,175
<F1> QLogic Corporation 18,800 1,654,400
<F1> Rational Software Corporation 34,500 2,393,437
<F1> RSA Security Inc. 12,600 543,375
<F1> Sapient Corporation 12,400 504,525
<F1> Semtech Corporation 40,000 1,725,000
<F1> SilverStream Software, Inc. 3,300 99,413
<F1> Sycamore Networks, Inc. 7,800 842,400
<F1> Tellabs, Inc. 23,300 1,112,575
<F1> TIBCO Software Inc. 9,700 819,044
<F1> Turnstone Systems, Inc. 18,000 834,750
<F1> VeriSign, Inc. 8,200 1,661,013
<F1> Vignette Corporation 31,000 926,125
<F1> Waters Corporation 16,400 1,459,600
---------------------------------------------------------------------------
TOTAL 51,467,862
---------------------------------------------------------------------------
TRANSPORTATION (0.8%)
Expeditors International of Washington, Inc. 19,500 878,719
---------------------------------------------------------------------------
UTILITIES (2.6%)
Dynegy Inc. - Class A 47,300 2,696,100
---------------------------------------------------------------------------
VARIOUS OTHER HOLDINGS (0.6%)
<F1> NASDAQ-100 Trust, Series 1 6,800 603,075
---------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $64,324,565) 101,235,091
===========================================================================
MONEY MARKET INVESTMENTS (3.7%)
FEDERAL GOVERNMENT AND AGENCIES (0.3%)
Federal National Mortgage
Association, 6.39%, 11/30/00 300,000 296,724
---------------------------------------------------------------------------
FINANCE SERVICES (0.9%)
Asset Securitization, 6.49%, 11/15/00 1,000,000 992,068
---------------------------------------------------------------------------
PERSONAL CREDIT INSTITUTIONS (1.3%)
CXC Incorporated, 6.5%, 10/27/00 250,000 248,868
Ford Motor Credit Co.,
6.48%, 10/27/00 1,100,000 1,095,050
---------------------------------------------------------------------------
TOTAL 1,343,918
---------------------------------------------------------------------------
<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
---------------------------------------------------------------------------
SECURITY BROKERS AND DEALERS (1.2%)
Salomon Smith Barney Holdings, Inc.,
6.5%, 11/10/00 1,300,000 $1,290,846
---------------------------------------------------------------------------
TOTAL MONEY MARKET INVESTMENTS
(COST $3,923,690) 3,923,556
===========================================================================
TOTAL INVESTMENTS (99.8%)
(COST $68,248,255)<F2> 105,158,647
===========================================================================
OTHER ASSETS, LESS LIABILITIES (0.2%) 231,557
===========================================================================
TOTAL NET ASSETS (100.0%) $105,390,204
===========================================================================
<F1> Non-Income Producing
ADR - American Depository Receipt
<F2> At September 30, 2000, the aggregate cost of securities for federal tax
purposes was $68,248,255 and the net unrealized appreciation of investments
based on that cost was $36,910,392 which is comprised of $40,658,028
aggregate gross unrealized appreciation and $3,747,636 aggregate gross
unrealized depreciation.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
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: $38.1 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.
The Fund's value-driven management style has enabled it to outperform its major
benchmark, the EAFE Index, in recent months. Beginning in March 2000, there has
been a global shift in investment interest away from growth and toward the
fundamental analysis and value that have always guided the Fund's stock
selections. Performance benefited from reduced positions in telecommunications
and related equipment, as profit warnings from leading companies during the
third quarter created doubts over growth prospects. Weakness in the euro and the
pound sterling throughout 2000, attributable largely to stronger than expected
economic growth in the U.S., has created a drag on the European economy and
stock markets. European holdings are concentrated in companies that stand to
benefit from structural reforms in labor restrictions and reduced corporate tax
rates in Germany, France and Italy.
Asian markets have been mixed. Market pullbacks in Hong Kong and Korea during
the summer provided some buying opportunities. In Japan, the market continues to
be volatile and generally weak a full decade after the peak, as overinflated
expectations for Japanese companies and the economy continue to unravel. The
bankruptcy of a high profile retailer in the third quarter refocused attention
on Japan's historical problems with over-leveraged companies and poor banking
practices. The Fund's Japanese investment strategy is focused on companies that
are committed to restructuring, have strong balance sheets and are trading at
reasonable valuations. Major Japanese holdings include Nomura Securities, the
leading financial services company in Japan, and international electronics giant
Sony.
The International Equity Fund is managed for Northwestern Mutual Investment
Services, LLC by Templeton Investment Counsel, Inc.
ASSET ALLOCATION
9/30/00
--------------------------------------------------------
Continental Europe 34%
Asia 18%
United Kingdom 17%
Short-term Investments 12%
Latin America 7%
North America 5%
Australia/New Zealand 4%
Mid-East/Africa 3%
TOP 10 EQUITY HOLDINGS
9/30/00
Company % Net Assets
---------------------------------------------------------
Nomura Securities Co., Ltd. 2.3%
Teva Pharmaceutical Industries, Ltd. 2.3%
Nordic Baltic Holding AB 2.2%
Aventis S.A. 2.1%
E.on AG 2.0%
Wolters Kluwer NV 1.9%
Akzo Nobel NV 1.8%
Telefonos de Mexico S.A. (TELMEX) 1.8%
Sony Corp. 1.7%
BAE Systems PLC 1.7%
<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
INTERNATIONAL
EQUITY
INTERNATIONAL INTERNATIONAL FUND
EQUITY EQUITY CLASS B
FUND FUND REDEMPTION EAFE
CLASS A CLASS B VALUE INDEX
----------------------------------------------------------------
3/31/97 9,524 10,000 10,000
9/30/97 10,476 10,970 11,234
3/31/98 10,304 10,749 11,893
9/30/98 8,122 8,462 10,326
3/31/99 9,392 9,742 12,651
9/30/99 10,012 10,357 13,560
3/31/00 10,980 11,311 15,870
9/30/00 10,635 10,941 10,641 14,030
TOTAL RETURN Average
Annual
One Since
For the periods ended September 30, 2000 Year Inception<F1>
--------------------------------------------------------------------------------
International Equity Fund
(Class A - without initial sales charge) 6.22% 3.20%
--------------------------------------------------------------------------------
EAFE Index 3.43% 10.15%
--------------------------------------------------------------------------------
<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 an applicable contingent deferred sales charge for Class B.
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 (85.5%)
CAPITAL EQUIPMENT (13.7%)
Alcatel France 5,380 $344,200
Alstom France 16,090 371,294
BAE SYSTEMS PLC United Kingdom 122,700 662,154
CNH Global N.V. Netherlands 15,000 150,000
FUJITSU LIMITED Japan 15,000 348,418
Hong Kong Aircraft
& Engineering Hong Kong 135,000 223,359
<F1> Hyundai Electronics
Industries Co. Republic of Korea 42,100 602,157
Kurita Water Industries, Ltd. Japan 20,000 369,239
Philips Electronics N.V. Netherlands 9,447 406,571
Rolls-Royce PLC United Kingdom 129,200 325,693
SONY CORPORATION Japan 6,600 669,406
The Weir Group PLC United Kingdom 126,200 372,240
Williams PLC United Kingdom 80,800 394,227
---------------------------------------------------------------------------
TOTAL 5,238,958
---------------------------------------------------------------------------
CONSUMER GOODS (10.2%)
Autoliv, Inc. United States 14,400 280,800
Aventis S.A. France 10,600 795,087
Mayne Nickless Ltd. Australia 72,600 162,770
Nycomed Amersham PLC United Kingdom 40,575 395,544
Ono Pharmaceutical Co., Ltd. Japan 9,000 369,795
Tate & Lyle, PLC United Kingdom 34,500 118,849
Teva Pharmaceutical
Industries Ltd., ADR Israel 12,340 903,134
Unilever PLC United Kingdom 87,300 565,340
Volvo AB - B Shares Sweden 19,600 316,392
---------------------------------------------------------------------------
TOTAL 3,907,711
---------------------------------------------------------------------------
ENERGY (12.9%)
E.On AG Germany 14,700 757,565
Endesa S.A. Spain 13,900 261,267
ENI S.P.A. Spain 70,840 375,077
EVN AG Austria 2,520 71,161
Gener S.A., ADR Chile 12,500 163,281
Hong Kong Electric
Holdings Limited Hong Kong 106,000 327,645
<F1> Husky Energy Inc. Canada 26,500 245,697
Iberdrola S.A. Spain 31,000 393,926
Korea Electric Power Corp. Republic of Korea 12,800 334,018
Repsol S.A. Spain 34,800 640,288
Shell Transport & Trading
Company PLC United Kingdom 72,700 592,253
Thames Water United Kingdom 21,083 378,730
Total Fina Elf S.A. France 2,570 376,017
---------------------------------------------------------------------------
TOTAL 4,916,925
---------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
INTERNATIONAL EQUITY FUND
Country Shares/Par Market Value
---------------------------------------------------------------------------
FINANCE (20.0%)
Allied Zurich PLC United Kingdom 36,300 $412,719
Australia & New Zealand
Bank Group Australia 76,000 546,576
AXA - UAP S.A. France 4,441 580,006
Banca Nazionale del Lavora Italy 114,400 385,638
<F1> Bangkok Bank Public
Company Limited Thailand 74,900 55,472
Deutsche Bank AG Germany 5,333 442,374
Hang Lung
Development Co. Hong Kong 133,000 134,760
HSBC Holdings PLC United Kingdom 27,600 387,618
ING Groep NV Netherlands 8,800 586,144
The Nomura Securities
Co., Ltd. Japan 40,200 874,237
<F1> Nordic Baltic Holding AB Sweden 8,994 63,299
<F1> Nordic Baltic Holding AB Sweden 108,120 765,192
PartnerRe Ltd. Bermuda 11,500 545,531
Scor France 6,000 262,088
Swiss Re Switzerland 250 477,320
Unibanco Uniao de Bancos Brazil 1,579,000 105,267
XL Capital Ltd. Bermuda 8,400 617,400
Zurich Versicherungs -
Gesellschaft Switzerland 820 379,067
---------------------------------------------------------------------------
TOTAL 7,620,708
---------------------------------------------------------------------------
MATERIALS (10.6%)
Agrium, Inc. Canada 22,700 232,675
Akzo Nobel N.V. Netherlands 16,800 708,642
AngloGold Limited, ADR South Africa 11,700 214,988
<F1> Asia Pulp & Paper
Company Ltd., ADR Singapore 9,400 16,450
Barrick Gold Corporation Canada 19,200 292,224
BASF AG Germany 12,030 425,166
Bayer AG Germany 8,800 325,377
Boehler-Uddeholm AG Austria 6,344 201,426
Celanese AG Germany 560 9,612
Companhia Vale do
Rio Doce, ADR Brazil 17,900 443,025
Corus Group PLC United Kingdom 217,100 164,503
Grupo Mexico, B Shares Mexico 73,700 280,940
Hepworth PLC United Kingdom 58,200 175,539
<F1> Kinross Gold Corporation Canada 88,200 50,413
Stora Enso OYJ - R Shares Finland 58,900 493,255
---------------------------------------------------------------------------
TOTAL 4,034,235
---------------------------------------------------------------------------
Country Shares/Par Market Value
---------------------------------------------------------------------------
MULTI-INDUSTRY (4.1%)
Elementis PLC United Kingdom 68,280 $69,909
Hanson PLC United Kingdom 20,320 113,263
Hutchison Whampoa Limited Hong Kong 41,800 554,878
Pilkington PLC United Kingdom 290,500 348,972
Swire Pacific Limited,
A Shares Hong Kong 36,000 224,398
Swire Pacific Limited,
B Shares Hong Kong 296,000 242,970
---------------------------------------------------------------------------
TOTAL 1,554,390
---------------------------------------------------------------------------
SERVICES (12.9%)
Best Denki Co., Ltd. Japan 34,000 221,192
British Airways PLC United Kingdom 85,200 359,954
Compania de
Telecomunicaciones de
Chile S.A., ADR Chile 13,100 227,613
J. Sainsbury PLC United Kingdom 55,600 306,623
Korea Telecom
Corporation, ADR Republic of Korea 4,800 161,400
Marks & Spencer PLC United Kingdom 51,800 155,470
Mothercare PLC United Kingdom 25,150 47,596
Nippon Telegraph &
Telephone Corporation Japan 66 647,418
The Peninsular & Oriental
Steam Navagation Company United Kingdom 23,000 202,333
Philippine Long Distance
Telephone, ADR Philippines 6,000 102,750
PT Indosat, ADR Indonesia 19,000 152,000
Telecom Corporation of
New Zealand Limited New Zealand 133,600 332,367
Telefonica, S.A., ADR Spain 9,297 552,602
Telefonos de Mexico
S.A., ADR Mexico 13,100 696,756
Wolters Kluwer NV Netherlands 36,770 746,297
---------------------------------------------------------------------------
TOTAL 4,912,371
---------------------------------------------------------------------------
UTILITIES (1.1%)
International Power PLC United Kingdom 60,400 419,717
---------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $34,090,652) 32,605,015
===========================================================================
<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
---------------------------------------------------------------------------
PREFERRED STOCK (3.5%)
ENERGY (1.0%)
Petroleo Brasileiro S.A. Brazil 13,390 $382,468
---------------------------------------------------------------------------
FINANCE (0.8%)
Banco Bradesco S.A. Brazil 27,950,000 231,174
Banco Itau S.A. Brazil 940,000 83,556
---------------------------------------------------------------------------
TOTAL 314,730
---------------------------------------------------------------------------
SERVICES (1.7%)
Moebel Walther AG Germany 5,056 43,724
The News Corporation
Limited Australia 49,000 585,861
---------------------------------------------------------------------------
TOTAL 629,585
---------------------------------------------------------------------------
TOTAL PREFERRED STOCK
(COST $917,074) 1,326,783
===========================================================================
MONEY MARKET INVESTMENTS (11.2%)
CAPTIVE FINANCE COMPANIES (3.4%)
Daimler-Chrysler
N.A. Holdings,
6.52%, 10/26/00 Germany 1,300,000 1,294,349
---------------------------------------------------------------------------
FINANCE SERVICES (3.1%)
Citicorp, 6.53%, 10/25/00 United States 1,200,000 1,194,994
---------------------------------------------------------------------------
PERSONAL CREDIT INSTITUTIONS (2.1%)
General Electric
Capital Corp.,
6.69%, 10/2/00 United States 800,000 800,000
---------------------------------------------------------------------------
SHORT-TERM BUSINESS CREDIT (2.6%)
Transamerica Financial
Corporation, 6.50%,
11/10/00 United States 1,000,000 992,958
---------------------------------------------------------------------------
TOTAL MONEY MARKET INVESTMENTS
(COST $4,282,301) 4,282,301
===========================================================================
TOTAL INVESTMENTS (100.2%)
(COST $39,290,027)<F2> 38,214,099
===========================================================================
OTHER ASSETS, LESS LIABILITIES (-0.2%) (78,959)
===========================================================================
TOTAL NET ASSETS (100.0%) $38,135,140
===========================================================================
<F1> Non-Income Producing
ADR - American Depository Receipt
<F2> At September 30, 2000, the aggregate cost of securities for federal tax
purposes was $39,290,027 and the net unrealized depreciation of investments
based on that cost was $1,075,928 which is comprised of $5,411,873
aggregate gross unrealized appreciation and $6,487,801 aggregate gross
unrealized depreciation.
INVESTMENT PERCENTAGES BY COUNTRY:
--------------------------------------
United Kingdom 18.2%
Japan 9.2%
Germany 8.6%
France 7.1%
Netherlands 6.8%
Other 50.1%
--------------------------------------
TOTAL 100.00%
--------------------------------------
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
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: $41.0 million
--------------------------------------------------------------------------------
The Index 400 Stock Fund is designed to achieve results that approximate the
performance of the Standard & Poor's MidCap 400 Index. The Fund provides
investors a low-cost way to invest in the middle-capitalization sector of the
equity market. The Fund invests in the stocks in the S&P MidCap 400 Index in
proportion to their weightings in the Index in order to attempt to achieve the
Fund's objective of matching the performance of the S&P MidCap 400 Index. The
S&P MidCap 400 Index is comprised of stocks of medium sized companies, generally
smaller than those included in the S&P 500/R Index. Because the S&P MidCap 400
Index is an unmanaged index, its return does not reflect the deduction of
expenses that exist with a mutual fund. The Fund continues to achieved its
objective of matching performance of the S&P MidCap 400 Index before expenses.
SECTOR ALLOCATION
9/30/00
--------------------------------------------------------
Technology 24%
Healthcare 13%
Consumer Cyclicals 12%
Basic Materials/Capital Goods 11%
Finance 11%
Utilities 11%
Energy 7%
Consumer Staples 6%
Other Industries 3%
Index Futures 2%
TOP 10 EQUITY HOLDINGS
9/30/00
Company % Net Assets
--------------------------------------------------------
Dynegy, Inc. - Class A 1.7%
Vitesse Semiconductor Corporation 1.7%
Calpine Corporation 1.5%
Millennium Pharmaceuticals, Inc. 1.4%
Rational Software Corporation 1.2%
Intuit, Inc. 1.2%
Waters Corporation 1.1%
Jabil Circuit, Inc. 1.1%
Forest Laboratories, Inc. 1.0%
Integrated Device Technology, Inc. 0.9%
PERFORMANCE RELATIVE TO S&P 400 INDEX
INDEX 400
INDEX 400 INDEX 400 STOCK FUND
STOCK FUND STOCK FUND CLASS B S&P MIDCAP
CLASS A CLASS B REDEMPTION VALUE 400 INDEX
--------------------------------------------------------------------------------
7/12/99 9,524 10,000 10,000
9/30/99 8,648 9,070 9,051
3/31/00 11,411 11,938 11,954
9/30/00 12,325 12,856 12,456 12,963
TOTAL RETURN Average
Annual
One Since
For the periods ended September 30, 2000 Year Inception<F1>
--------------------------------------------------------------------------------
Index 400 Stock Fund
(Class A - without initial sales charge) 42.52% 23.55%
--------------------------------------------------------------------------------
S&P MidCap 400 Index 43.21% 23.66%
--------------------------------------------------------------------------------
<F1>Fund inception date is 7/12/99. Returns are 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, 2000, the 400 companies in the composite had a median market capitalization
of $1.7 billion and a total market value of $963.7 billion. The MidCap 400
represents approximately 4% of the market value of the Compustat's database of
about 10,000 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 an applicable contingent deferred sales charge for Class B.
<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 (96.8%)
BASIC MATERIALS (3.5%)
A. Schulman, Inc. 1,200 $13,200
<F1> Airgas, Inc. 2,700 18,394
AK Steel Holding Corporation 4,600 43,125
Albemarle Corporation 1,900 38,356
Bowater Incorporated 2,100 97,518
Cabot Corporation 2,800 88,724
Carpenter Technology Corporation 900 26,213
Chesapeake Corporation 700 13,475
Cleveland-Cliffs, Inc. 400 9,150
Crompton Corporation 4,678 36,839
<F1> Cytec Industries, Inc. 1,700 56,844
Ethyl Corporation 3,400 4,888
Ferro Corporation 1,400 26,688
Georgia Gulf Corporation 1,300 14,869
Georgia-Pacific Corporation (Timber Group) 3,300 88,687
H.B. Fuller Company 600 17,250
IMC Global, Inc. 4,700 68,150
Kennametal, Inc. 1,300 33,475
Longview Fibre Company 2,100 25,200
The Lubrizol Corporation 2,200 43,313
Lyondell Chemical Company 4,800 56,700
Martin Marietta Materials, Inc. 1,900 72,731
<F1> MAXXAM, Inc. 300 5,963
Minerals Technologies, Inc. 800 36,800
Olin Corporation 1,800 29,138
P.H. Glatfelter Company 1,700 20,613
Rayonier, Inc. 1,100 39,531
RPM, Inc. 4,300 38,969
Ryerson Tull, Inc. 1,000 9,438
Solutia, Inc. 4,500 51,188
Sonoco Products Company 4,100 74,055
Southdown, Inc. 1,500 106,874
<F1> UCAR International, Inc. 1,800 22,838
Universal Corporation 1,200 35,250
The Valspar Corporation 1,800 41,382
Wausau-Mosinee Paper Corporation 2,100 16,275
---------------------------------------------------------------------------
TOTAL 1,422,103
---------------------------------------------------------------------------
CAPITAL GOODS (6.9%)
AGCO Corporation 2,400 28,500
<F1> Albany International Corp. - Class A 1,216 14,592
<F1> American Standard Companies, Inc. 2,900 128,869
AMETEK, Inc. 1,300 27,544
Carlisle Companies Incorporated 1,200 49,800
Diebold, Incorporated 2,900 77,031
Donaldson Company, Inc. 1,900 41,800
Shares/Par Market Value
---------------------------------------------------------------------------
CAPITAL GOODS (CONTINUED)
Federal Signal Corporation 1,900 $37,763
Flowserve Corporation 1,500 24,656
Granite Construction Incorporated 1,100 26,675
Harsco Corporation 1,600 35,300
Herman Miller, Inc. 3,200 102,600
Hillenbrand Industries, Inc. 2,600 116,350
HON INDUSTRIES, Inc. 2,500 61,563
Hubbell Incorporated - Class B 2,600 65,163
<F1> Jabil Circuit, Inc. 7,800 442,649
<F1> Jacobs Engineering Group, Inc. 1,100 44,344
Kaydon Corporation 1,200 27,600
<F1> MagneTek, Inc. 1,000 10,625
Newport News Shipbuilding, Inc. 1,300 56,388
Nordson Corporation 1,300 36,969
Pentair, Inc. 2,000 53,500
Precision Castparts Corp. 2,000 76,750
<F1> Quanta Services, Inc. 2,600 71,500
The Reynolds and Reynolds Company - Class A 3,200 63,600
<F1> SCI Systems, Inc. 6,000 245,999
<F1> Sensormatic Electronics Corporation 3,200 48,000
<F1> Sequa Corporation - Class A 400 17,000
<F1> SPX Corporation 1,300 184,519
The Standard Register Company 1,100 17,600
Stewart & Stevenson Services, Inc. 1,100 19,181
Symbol Technologies, Inc. 5,600 201,250
Tecumseh Products Company - Class A 800 33,500
Teleflex Incorporated 1,600 55,000
Trinity Industries, Inc. 1,600 37,400
<F1> Vishay Intertechnology, Inc. 5,700 175,275
Wallace Computer Services, Inc. 1,700 25,925
York International Corporation 1,600 39,800
---------------------------------------------------------------------------
TOTAL 2,822,580
---------------------------------------------------------------------------
COMMUNICATION SERVICES (1.5%)
<F1> Broadwing, Inc. 8,800 224,950
<F1> Powerwave Technologies, Inc. 2,500 94,922
Telephone and Data Systems, Inc. 2,500 276,750
---------------------------------------------------------------------------
TOTAL 596,622
---------------------------------------------------------------------------
CONSUMER CYCLICALS (12.5%)
A.H. Belo Corporation - Class A 4,900 90,344
<F1> Abercrombie & Fitch Co. - Class A 4,200 80,063
<F1> AC Nielsen Corporation 2,400 57,150
<F1> Acxiom Corporation 3,600 114,300
<F1> American Eagle Outfitters, Inc. 1,900 59,850
<F1> Apollo Group, Inc. - Class A 3,100 123,613
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
INDEX 400 STOCK FUND
Shares/Par Market Value
---------------------------------------------------------------------------
CONSUMER CYCLICALS (CONTINUED)
ArvinMeritor, Inc. 2,975 $43,695
Bandag, Incorporated 900 32,344
<F1> Barnes & Noble, Inc. 2,700 53,156
<F1> BJ's Wholesale Club, Inc. 3,000 102,375
Blyth Industries, Inc. 2,000 46,875
<F1> Borders Group, Inc. 3,200 44,600
Borg-Warner Automotive, Inc. 1,100 36,438
Callaway Golf Company 3,200 49,200
<F1> CDW Computer Centers, Inc. 3,600 248,399
Cintas Corporation 6,850 298,402
Claire's Stores, Inc. 2,100 37,800
Clayton Homes, Inc. 5,600 56,000
<F1> DeVry, Inc. 2,900 109,113
<F1> Dollar Tree Stores, Inc. 4,250 172,390
Family Dollar Stores, Inc. 7,000 134,749
Fastenal Company 1,600 92,200
Federal-Mogul Corporation 2,900 15,769
<F1> Furniture Brands International, Inc. 2,000 33,250
Galileo International, Inc. 3,800 58,900
<F1> GTECH Holdings Corporation 1,400 23,188
Harte-Hanks, Inc. 2,800 76,300
Houghton Mifflin Company 1,300 51,025
<F1> International Game Technology 3,000 100,875
International Speedway Corporation - Class A 2,200 85,800
<F1> Jones Apparel Group, Inc. 4,900 129,850
Kelly Services, Inc. - Class A 1,500 35,438
Lancaster Colony Corporation 1,600 39,300
<F1> Lands' End, Inc. 1,200 25,200
<F1> Lear Corporation 2,700 55,519
Lee Enterprises, Incorporated 1,800 51,975
Lennar Corporation 2,500 74,219
<F1> Mandalay Resort Group 3,200 82,000
Manpower, Inc. 3,100 99,006
Media General, Inc. - Class A 1,000 43,000
Modine Manufacturing Company 1,200 33,806
<F1> Modis Professional Services, Inc. 4,000 20,750
<F1> Mohawk Industries, Inc. 2,200 47,988
<F1> Navigant Consulting, Inc. 1,700 5,844
NCH Corporation 200 7,063
<F1> NCO Group, Inc. 1,000 11,875
<F1> The Neiman Marcus Group, Inc. - Class A 2,000 64,875
<F1> OfficeMax, Inc. 4,600 16,388
Ogden Corporation 2,000 27,125
<F1> Park Place Entertainment Corporation 12,500 189,062
<F1> Payless ShoeSource, Inc. 907 50,792
Pittston Brink's Group 2,100 32,550
Shares/Par Market Value
---------------------------------------------------------------------------
CONSUMER CYCLICALS (CONTINUED)
The Reader's Digest Association, Inc. - Class A 4,300 $151,843
<F1> Robert Half International Inc. 7,300 253,218
Rollins, Inc. 1,200 17,775
Ross Stores, Inc. 3,400 48,875
<F1> Saks Incorporated 5,900 58,263
<F1> Scholastic Corporation 700 55,694
Shaw Industries, Inc. 5,300 98,050
<F1> Six Flags, Inc. 3,200 49,600
Sotheby's Holdings, Inc. - Class A 2,400 59,700
Stewart Enterprises, Inc. - Class A 4,200 8,138
Superior Industries International, Inc. 1,100 33,000
<F1> Sylvan Learning Systems, Inc. 1,551 22,974
<F1> Tech Data Corporation 2,100 89,775
<F1> Unifi, Inc. 2,300 23,431
USG Corporation 1,900 47,619
Viad Corp. 3,900 103,594
The Warnaco Group, Inc. - Class A 2,200 8,800
The Washington Post Company - Class B 400 211,149
Wellman, Inc. 1,300 18,769
WestPoint Stevens, Inc. 2,000 24,500
<F1> Williams-Sonoma, Inc. 2,300 79,925
---------------------------------------------------------------------------
TOTAL 5,136,480
---------------------------------------------------------------------------
CONSUMER STAPLES (5.6%)
Banta Corporation 1,000 24,375
Bergen Brunswig Corporation - Class A 5,500 64,281
Bob Evans Farms, Inc. 1,500 27,750
<F1> Brinker International, Inc. 2,700 81,338
<F1> Buffets, Inc. 1,700 23,375
Carter-Wallace, Inc. 1,900 46,431
CBRL Group, Inc. 2,400 34,500
<F1> Chris-Craft Industries, Inc. 1,433 118,042
Church & Dwight Co., Inc. 1,600 29,400
Dean Foods Company 1,500 49,875
The Dial Corporation 3,900 45,338
Dole Food Company, Inc. 2,300 34,500
Dreyer's Grand Ice Cream, Inc. 1,200 25,875
<F1> Energizer Holdings, Inc. 4,100 100,449
Flowers Industries, Inc. 4,100 79,950
<F1> Hispanic Broadcasting Corporation -
Class A 4,500 125,437
Hormel Foods Corporation 5,800 96,788
IBP, Inc. 4,300 78,744
International Multifoods Corporation 800 13,900
Interstate Bakeries Corporation 2,700 39,488
The J.M. Smucker Company 1,000 24,313
Lance, Inc. 1,200 11,663
<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)
Lone Star Steakhouse & Saloon, Inc. 1,100 $8,113
McCormick & Company, Incorporated 2,800 83,300
<F1> Outback Steakhouse, Inc. 3,200 86,800
<F1> Papa John's International, Inc. 1,000 25,063
<F1> Perrigo Company 2,900 19,847
<F1> PSS World Medical, Inc. 2,800 10,150
R.J. Reynolds Tobacco Holdings, Inc. 4,300 138,674
Ruddick Corporation 1,900 26,363
<F1> Suiza Foods Corporation 1,200 60,825
Tyson Foods, Inc. - Class A 9,300 93,000
Universal Foods Corporation 2,000 40,750
<F1> Univision Communications, Inc. - Class A 8,500 317,687
<F1> Valassis Communications, Inc. 2,300 51,175
<F1> Westwood One, Inc. 4,600 98,613
Whitman Corporation 5,600 64,750
---------------------------------------------------------------------------
TOTAL 2,300,922
---------------------------------------------------------------------------
ENERGY (6.8%)
<F1> BJ Services Company 3,400 207,825
<F1> Cooper Cameron Corporation 2,200 162,113
ENSCO International Incorporated 5,700 218,025
<F1> Global Marine, Inc. 7,200 222,300
<F1> Grant Prideco, Inc. 4,500 98,719
<F1> Hanover Compressor Company 2,400 79,050
Helmerich & Payne, Inc. 2,000 72,250
Murphy Oil Corporation 1,900 123,144
<F1> Nabors Industries, Inc. 6,000 314,399
Noble Affiliates, Inc. 2,300 85,387
<F1> Noble Drilling Corporation 5,500 276,374
<F1> Ocean Energy, Inc. 6,900 106,519
Pennzoil-Quaker States Company 3,200 33,600
<F1> Pioneer Natural Resources Company 4,100 58,169
<F1> Smith International, Inc. 2,100 171,281
Tidewater, Inc. 2,500 113,750
Ultramar Diamond Shamrock Corporation 3,600 91,350
Valero Energy Corporation 2,300 80,931
<F1> Varco International, Inc. 3,767 78,401
<F1> Weatherford International, Inc. 4,500 193,500
---------------------------------------------------------------------------
TOTAL 2,787,087
---------------------------------------------------------------------------
FINANCE (11.0%)
A.G. Edwards, Inc. 3,400 177,862
Allmerica Financial Corporation 2,200 140,663
Ambac Financial Group, Inc. 2,900 212,424
American Financial Group, Inc. 2,400 55,650
Associated Banc-Corp 2,810 73,763
Astoria Financial Corporation 2,100 81,113
Banknorth Group, Inc. 6,100 109,038
Shares/Par Market Value
---------------------------------------------------------------------------
FINANCE (CONTINUED)
City National Corporation 2,000 $77,250
Compass Bancshares, Inc. 5,000 97,500
Dime Bancorp, Inc. 4,600 99,188
<F1> E*TRADE Group, Inc. 12,000 197,249
Everest Reinsurance Holdings, Inc. 1,900 94,050
The Finova Group, Inc. 2,400 17,400
First Security Corporation 8,100 132,131
First Tennessee National Corporation 5,300 108,319
First Virginia Banks, Inc. 2,000 85,250
FirstMerit Corporation 3,600 82,575
Greater Bay Bancorp 800 55,550
GreenPoint Financial Corp. 4,200 124,425
Hibernia Corporation - Class A 6,600 80,850
Horace Mann Educators Corporation 1,700 27,838
HSB Group, Inc. 1,200 48,150
Keystone Financial, Inc. 2,000 43,500
Legg Mason, Inc. 2,600 151,125
Marshall & Ilsley Corporation 4,300 215,537
Mercantile Bankshares Corporation 2,800 101,631
The MONY Group Inc. 1,900 75,763
National Commerce Bancorporation 8,320 165,879
North Fork Bancorporation, Inc. 7,100 153,538
Ohio Casualty Corporation 2,400 15,225
Old Republic International Corporation 4,900 117,906
Pacific Century Financial Corporation 3,300 56,513
The PMI Group, Inc. 1,800 121,950
Protective Life Corporation 2,700 80,663
Provident Financial Group, Inc. 2,000 58,750
Roslyn Bancorp, Inc. 2,700 60,413
SEI Investments Company 2,200 155,649
Sovereign Bancorp, Inc. 9,300 86,025
TCF Financial Corporation 3,300 124,163
Unitrin, Inc. 2,800 88,725
Waddell & Reed Financial, Inc. - Class A 3,400 105,400
Webster Financial Corporation 2,200 59,263
Westamerica Bancorporation 1,500 50,156
Wilmington Trust Corporation 1,300 69,713
Zions Bancorporation 3,500 178,991
---------------------------------------------------------------------------
TOTAL 4,514,716
---------------------------------------------------------------------------
HEALTHCARE (12.7%)
<F1> Acuson Corporation 1,100 25,025
<F1> Apria Healthcare Group, Inc. 2,100 29,269
Beckman Coulter, Inc. 1,200 92,550
<F1> Chiron Corporation 7,400 333,000
<F1> Covance, Inc. 2,300 18,831
DENTSPLY International, Inc. 2,100 73,369
<F1> Edwards Lifesciences Corporation 2,400 52,350
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
INDEX 400 STOCK FUND
Shares/Par Market Value
---------------------------------------------------------------------------
HEALTHCARE (CONTINUED)
<F1> Express Scripts, Inc. - Class A 1,600 $115,600
<F1> First Health Group Corp. 2,000 64,500
<F1> Forest Laboratories, Inc. 3,500 401,405
<F1> Foundation Health Systems, Inc. - Class A 5,000 83,125
<F1> Genzyme Corporation (General Division) 3,500 238,656
<F1> Gilead Sciences, Inc. 1,800 197,438
<F1> Health Management Associates, Inc. - Class A 10,300 214,369
ICN Pharmaceuticals, Inc. 3,300 109,725
<F1> IDEC Pharmaceuticals Corporation 1,800 315,647
<F1> Incyte Genomics, Inc. 2,600 106,925
<F1> IVAX Corporation 6,400 294,400
<F1> Lincare Holdings, Inc. 2,200 63,113
<F1> Millennium Pharmaceuticals, Inc. 3,800 555,037
<F1> MiniMed, Inc. 2,600 232,375
Mylan Laboratories, Inc. 5,300 142,769
Omnicare, Inc. 3,800 61,275
<F1> Oxford Health Plans, Inc. 3,400 104,497
<F1> Pacificare Health Systems, Inc. 1,400 48,738
<F1> Quest Diagnostics Incorporated 1,800 206,550
<F1> Quorum Health Group, Inc. 2,900 37,700
<F1> Sepracor, Inc. 3,000 368,062
<F1> Steris Corporation 2,800 33,600
Stryker Corporation 8,000 343,500
<F1> Sybron International Corporation 4,300 103,200
<F1> Trigon Healthcare, Inc. - Class A 1,500 78,844
<F1> VISX, Incorporated 2,500 67,344
---------------------------------------------------------------------------
TOTAL 5,212,788
---------------------------------------------------------------------------
TECHNOLOGY (23.7%)
<F1> 3Com Corporation 14,400 276,300
<F1> ADTRAN, Inc. 1,600 68,075
<F1> Affiliated Computer Services, Inc. - Class A 2,000 99,750
<F1> ANTEC Corporation 1,600 47,200
<F1> Arrow Electronics, Inc. 4,000 136,250
<F1> Atmel Corporation 18,300 277,931
Avnet, Inc. 3,600 102,150
<F1> Avocent Corporation 1,700 93,713
<F1> Cadence Design Systems, Inc. 10,100 259,444
<F1> Cambridge Technology Partners, Inc. 2,600 11,375
<F1> CheckFree Corporation 3,100 129,861
<F1> Cirrus Logic, Inc. 2,700 108,844
Comdisco, Inc. 6,300 120,094
<F1> CommScope, Inc. 2,100 51,450
<F1> Concord EFS, Inc. 8,750 310,761
<F1> Credence Systems Corporation 2,000 60,000
<F1> CSG Systems International, Inc. 2,100 60,900
<F1> Cypress Semiconductor Corporation 4,900 203,656
<F1> DSP Group, Inc. 1,100 41,113
Shares/Par Market Value
---------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
<F1> DST Systems, Inc. 2,600 $305,499
<F1> Electronic Arts, Inc. 5,300 261,688
<F1> Fiserv, Inc. 5,100 305,362
<F1> Gartner Group, Inc. - Class B 3,600 39,150
Harris Corporation 2,800 79,625
<F1> Imation Corp. 1,500 27,938
<F1> Informix Corporation 11,500 47,438
<F1> Integrated Device Technology, Inc. 4,200 380,099
<F1> International Rectifier Corporation 2,500 126,406
<F1> Intuit, Inc. 8,300 473,099
<F1> Investment Technology Group, Inc. 1,300 51,919
<F1> Keane, Inc. 2,900 50,460
<F1> L-3 Communications Holdings, Inc. 1,400 79,100
<F1> Lattice Semiconductor Corporation 2,200 118,250
<F1> Legato Systems, Inc. 3,600 48,375
<F1> Litton Industries, Inc. 1,900 84,906
<F1> Macromedia, Inc. 2,200 177,788
<F1> MarchFirst, Inc. 6,000 94,125
<F1> Mentor Graphics Corporation 2,600 61,263
<F1> Micrel, Incorporated 3,500 234,500
<F1> Microchip Technology Incorporated 4,800 158,700
<F1> Mynd Corporation 1,500 20,250
<F1> Network Associates, Inc. 5,700 128,963
<F1> NOVA Corporation 2,900 49,663
<F1> NVIDIA Corporation 2,600 212,875
<F1> Polycom, Inc. 2,900 194,209
<F1> QLogic Corporation 3,700 325,599
<F1> Quantum Corporation - DLT & Storage Systems 6,600 99,413
<F1> Rational Software Corporation 7,300 506,437
<F1> Sawtek, Inc. 1,700 65,477
<F1> Semtech Corporation 2,600 112,125
<F1> Storage Technology Corporation 4,100 55,606
<F1> Structural Dynamics Research Corporation 1,500 24,563
<F1> SunGard Data Systems, Inc. 5,400 231,188
<F1> Sybase, Inc. 3,700 85,100
<F1> Sykes Enterprises, Incorporated 1,700 9,138
<F1> Symantec Corporation 2,400 105,600
<F1> Synopsys, Inc. 2,900 109,838
<F1> The Titan Corporation 2,200 36,300
<F1> Transaction Systems Architects, Inc. - Class A 1,300 21,125
<F1> TranSwitch Corporation 3,300 210,375
<F1> TriQuint Semiconductor, Inc. 3,200 116,600
<F1> Vitesse Semiconductor Corporation 7,700 684,818
<F1> Waters Corporation 5,200 462,799
<F1> Wind River Systems, Inc. 3,000 143,813
---------------------------------------------------------------------------
TOTAL 9,676,431
---------------------------------------------------------------------------
<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 (1.2%)
Airborne Freight Corporation 2,000 $20,375
<F1> Alaska Air Group, Inc. 1,100 26,400
Alexander & Baldwin, Inc. 1,700 44,200
Arnold Industries, Inc. 1,000 16,875
<F1> Atlas Air, Inc. 1,500 63,375
C.H. Robinson Worldwide, Inc. 1,700 95,810
CNF Transportation, Inc. 2,000 44,500
GATX Corporation 2,000 83,750
<F1> J.B. Hunt Transport Services, Inc. 1,400 17,850
Overseas Shipholding Group, Inc. 1,400 38,325
<F1> Swift Transportation Co., Inc. 2,600 33,963
<F1> Wisconsin Central
Transportation Corporation 2,000 21,125
---------------------------------------------------------------------------
TOTAL 506,548
---------------------------------------------------------------------------
UTILITIES (11.4%)
AGL Resources, Inc. 2,200 44,138
Allegheny Energy, Inc. 4,500 171,843
ALLETE 3,000 66,375
Alliant Energy Corporation 3,300 96,938
American Water Works Company, Inc. 4,000 110,250
Black Hills Corporation 900 25,256
<F1> Calpine Corporation 5,700 594,937
Cleco Corporation 900 42,075
Conectiv, Inc. 3,700 66,138
DPL, Inc. 5,400 160,649
DQE, Inc. 2,400 96,300
Dynegy Inc. - Class A 12,500 712,499
Energy East Corporation 5,400 122,175
Hawaiian Electric Industries, Inc. 1,300 45,338
IDACORP, Inc. 1,500 69,375
IPALCO Enterprises, Inc. 3,500 80,063
Kansas City Power & Light Company 2,500 66,719
Kinder Morgan, Inc. 4,700 192,405
LG&E Energy Corp. 5,300 129,519
MCN Energy Group, Inc. 3,500 89,688
The Montana Power Company 4,300 143,512
National Fuel Gas Company 1,600 89,700
NiSource, Inc. 5,000 121,875
Northeast Utilities 6,100 132,294
NSTAR 2,300 92,575
OGE Energy Corp. 3,200 68,200
Potomac Electric Power Company 4,900 123,419
Public Service Company of New Mexico 1,600 41,400
Puget Sound Energy, Inc. 3,500 88,813
Questar Corporation 3,300 91,781
SCANA Corporation 4,300 132,763
Sierra Pacific Resources 3,258 58,644
Shares/Par Market Value
---------------------------------------------------------------------------
UTILITIES (CONTINUED)
TECO Energy, Inc. 5,200 $149,499
UtiliCorp United, Inc. 3,900 100,913
Vectren Corporation 2,500 50,781
Washington Gas Light Company 1,900 51,063
Western Resources, Inc. 2,900 62,713
Wisconsin Energy Corporation 5,000 99,688
---------------------------------------------------------------------------
TOTAL 4,682,313
---------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $35,964,331) 39,658,590
===========================================================================
MONEY MARKET INVESTMENTS (2.9%)
FEDERAL GOVERNMENT AND AGENCIES (1.2%)
<F2> Federal Home Loan Bank, 6.38%, 11/24/00 500,000 495,304
---------------------------------------------------------------------------
FINANCE SERVICES (0.2%)
<F2> Citicorp, 6.53%, 10/25/00 100,000 99,583
---------------------------------------------------------------------------
PERSONAL CREDIT INSTITUTIONS (1.5%)
General Electric Capital Corp.,
6.69%, 10/2/00 600,000 599,999
---------------------------------------------------------------------------
TOTAL MONEY MARKET INVESTMENTS
(COST $1,194,886) 1,194,886
===========================================================================
TOTAL INVESTMENTS (99.7%)
(COST $37,159,217)<F3> 40,853,476
===========================================================================
OTHER ASSETS, LESS LIABILITIES (0.3%) 121,970
===========================================================================
TOTAL NET ASSETS (100.0%) $40,975,446
===========================================================================
<F1> Non-Income Producing
<F2> Partially held in a segregated account as collateral for open futures
positions. Information regarding open futures contracts as of period end is
summarized below:
Unrealized
Number of Expiration Appreciation
Issuer Contracts Date (Depreciation)
--------------------------------------------------------------------------------
MidCap 400 Stock Index
(Total notional value at
9/30/00, $1,097,625) 4 12/00 $(7,025)
<F3> At September 30, 2000, the aggregate cost of securities for federal tax
purposes was $37,159,217 and the net unrealized appreciation of investments
based on that cost was $3,694,259 which is comprised of $8,073,546
aggregate gross unrealized appreciation and $4,379,287 aggregate gross
unrealized depreciation.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
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: $74.0 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/R Index Futures used at times to maintain the desired degree of market
exposure.
The Growth Stock Fund continues to outperform its principal benchmark, the S&P
500/R Index. Recent performance has benefited from many sectors including the
overweighted positions relative to the Index in energy and consumer cyclicalss.
In the consumer cyclicals group, large holdings that performed well include
Harley-Davidson and retail chains Walgreen's and Kohl's, both of which address
specific segments of the market and are rapidly expanding their store bases.
Financial services holdings including Fiserv and Citigroup have also pushed
performance, as has a large position in Enron, formerly a natural gas utility
company but now a sophisticated market maker in energy related commodities and
broadband capacity. Healthcare stocks held in the portfolio such as Pfizer and
Guidant were also strong contributors, as were consumer staple stocks including
Pepsico and Keebler.
In the current volatile market, the Fund's emphasis on quality and earnings
consistency has helped returns. As a measure of the quality of the stocks in the
Fund, the average S&P rating of stocks in the portfolio is A-. Diversification
has also been a key factor in performance and in keeping the turnover of
portfolio holdings relatively low as radical sector shifts have not been needed.
SECTOR ALLOCATION
9/30/00
--------------------------------------------------------
Technology 27%
Consumer Cyclicals 12%
Consumer Staples 10%
Finance 10%
Energy 9%
Basic Materials/Capital Goods 8%
S&P/R Index Futures 8%
Healthcare 7%
Cash Equivalents 5%
Communication Services 3%
Other Industries 1%
TOP 10 EQUITY HOLDINGS
9/30/00
Company % Net Assets
--------------------------------------------------------
General Electric Company 2.9%
Cisco Systems, Inc. 2.8%
Nortel Networks Corporation 2.4%
Fiserv, Inc. 2.2%
Enron Corp. 2.2%
Kohl's Corporation 1.9%
Walgreen Co. 1.8%
Harley-Davidson, Inc. 1.8%
Citigroup, Inc. 1.8%
Pfizer, Inc. 1.7%
<PAGE>
GROWTH STOCK FUND
PERFORMANCE RELATIVE TO S&P 500/R INDEX
GROWTH
GROWTH GROWTH STOCK FUND S&P
STOCK FUND STOCK FUND CLASS B 500/R
CLASS A CLASS B REDEMPTION VALUE INDEX
-------------------------------------------------------------------------------
3/31/97 9,524 10,000 10,000
9/30/97 11,829 12,380 12,618
3/31/98 13,817 14,412 14,787
9/30/98 12,779 13,293 13,747
3/31/99 16,355 16,958 17,503
9/30/99 16,623 17,173 17,564
3/31/00 20,899 21,539 20,650
9/30/00 21,031 21,596 21,296 19,915
TOTAL RETURN Average
Annual
One Since
For the periods ended September 30, 2000 Year Inception<F1>
--------------------------------------------------------------------------------
Growth Stock Fund
(Class A - without initial sales charge) 26.52% 25.39%
--------------------------------------------------------------------------------
S&P 500/R Index 13.39% 21.73%
--------------------------------------------------------------------------------
<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 an applicable contingent deferred sales charge for Class B.
SCHEDULE OF INVESTMENTS
Shares/Par Market Value
---------------------------------------------------------------------------
COMMON STOCK (86.7%)
BASIC MATERIALS (1.3%)
Ecolab, Inc. 21,000 $757,312
PPG Industries, Inc. 4,900 194,469
---------------------------------------------------------------------------
TOTAL 951,781
---------------------------------------------------------------------------
CAPITAL GOODS (5.5%)
Avery Dennison Corporation 16,700 774,463
General Electric Company 37,200 2,145,975
Illinois Tool Works, Inc. 6,800 379,950
Tyco International Ltd. 15,000 778,125
---------------------------------------------------------------------------
TOTAL 4,078,513
---------------------------------------------------------------------------
COMMUNICATION SERVICES (3.1%)
AT&T Corp. 18,928 556,010
<F1> AT&T Wireless Group 4,000 83,500
<F1> Nextel Communications, Inc. - Class A 14,400 673,200
SBC Communications, Inc. 5,790 289,500
Sprint Corporation 5,600 164,150
Verizon Communications 7,930 384,109
<F1> WorldCom, Inc. 4,272 129,762
---------------------------------------------------------------------------
TOTAL 2,280,231
---------------------------------------------------------------------------
CONSUMER CYCLICALS (11.5%)
<F1> Amazon.com, Inc. 4,200 161,438
<F1> Costco Wholesale Corporation 12,400 433,225
Ford Motor Company 11,887 300,890
Harley-Davidson, Inc. 28,000 1,340,499
The Interpublic Group of Companies, Inc. 9,000 306,563
<F1> Kohl's Corporation 24,900 1,436,418
The McGraw-Hill Companies, Inc. 14,100 896,230
The New York Times Company - Class A 19,400 762,663
Omnicom Group, Inc. 3,400 247,988
The ServiceMaster Company 25,500 251,813
Target Corporation 15,000 384,375
Tiffany & Co. 5,400 208,238
Tribune Company 18,800 820,150
Wal-Mart Stores, Inc. 20,100 967,312
---------------------------------------------------------------------------
TOTAL 8,517,802
---------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
GROWTH STOCK FUND
Shares/Par Market Value
---------------------------------------------------------------------------
CONSUMER STAPLES (8.9%)
Anheuser-Busch Companies, Inc. 17,400 $736,238
The Estee Lauder Companies, Inc. - Class A 18,600 681,225
Keebler Foods Company 22,700 953,399
Kimberly-Clark Corporation 10,700 597,194
McDonald's Corporation 12,600 380,363
PepsiCo, Inc. 16,400 754,400
The Quaker Oats Company 5,900 466,838
Time Warner, Inc. 8,500 665,125
Walgreen Co. 35,700 1,354,368
---------------------------------------------------------------------------
TOTAL 6,589,150
---------------------------------------------------------------------------
ENERGY (6.4%)
BP Amoco PLC, ADR 9,200 487,600
Chevron Corporation 1,700 144,925
Conoco Inc. - Class B 21,000 565,688
Diamond Offshore Drilling, Inc. 8,700 356,700
EOG Resources, Inc. 20,100 781,387
Exxon Mobil Corporation 9,892 881,624
Santa Fe International Corporation 9,400 423,588
Schlumberger Limited 4,100 337,481
Tosco Corporation 23,400 729,788
---------------------------------------------------------------------------
TOTAL 4,708,781
---------------------------------------------------------------------------
FINANCE (9.8%)
American International Group, Inc. 9,700 928,169
The Bank of New York Company, Inc. 12,700 711,994
The Chase Manhattan Corporation 8,400 387,975
CIGNA Corporation 7,300 762,120
Citigroup, Inc. 23,966 1,295,661
Fifth Third Bancorp 10,050 541,444
Household International, Inc. 7,400 419,025
Lehman Brothers Holdings, Inc. 7,000 1,034,250
Morgan Stanley Dean Witter & Co. 13,100 1,197,831
---------------------------------------------------------------------------
TOTAL 7,278,469
---------------------------------------------------------------------------
HEALTHCARE (7.4%)
Bristol-Myers Squibb Company 9,300 531,263
Eli Lilly and Company 6,200 502,975
<F1> Guidant Corporation 7,800 551,363
Johnson & Johnson 5,800 544,838
Medtronic, Inc. 15,600 808,275
Merck & Co., Inc. 7,200 535,950
Pfizer, Inc. 28,700 1,289,705
Schering-Plough Corporation 10,900 506,850
<F1> Watson Pharmaceuticals, Inc. 3,400 220,575
---------------------------------------------------------------------------
TOTAL 5,491,794
---------------------------------------------------------------------------
Shares/Par Market Value
---------------------------------------------------------------------------
TECHNOLOGY (29.2%)
<F1> Amdocs Limited 16,300 $1,016,713
<F1> America Online, Inc. 12,600 677,250
<F1> Atmel Corporation 34,800 528,525
<F1> Avanex Corporation 3,300 355,369
<F1> Axcelis Technologies, Inc. 7,800 92,625
<F1> Cisco Systems, Inc. 37,900 2,093,975
Corning Incorporated 3,600 1,069,200
<F1> Dell Computer Corporation 12,900 397,481
Electronic Data Systems Corporation 14,100 585,150
<F1> EMC Corporation 11,000 1,090,375
<F1> Fiserv, Inc. 27,725 1,660,034
Hewlett-Packard Company 3,100 300,700
Intel Corporation 29,600 1,230,250
International Business Machines Corporation 7,000 787,500
<F1> Internet Pictures Corporation 12,900 70,144
<F1> Lexmark International Group, Inc. - Class A 3,300 123,750
<F1> Microsoft Corporation 21,200 1,277,300
Nokia Corp., ADR 6,300 250,819
Nortel Networks Corporation 29,200 1,739,225
<F1> ONI Systems Corp. 7,500 647,344
<F1> Oracle Corporation 15,000 1,181,250
<F1> Palm, Inc. 16,697 883,897
<F1> Sun Microsystems, Inc. 8,100 945,675
<F1> Tellabs, Inc. 9,800 467,950
Texas Instruments Incorporated 13,200 622,875
<F1> TIBCO Software Inc. 9,200 776,825
<F1> Viacom Inc. - Class B 8,900 520,650
<F1> Williams Communications Group, Inc. - Class A 14,500 290,000
---------------------------------------------------------------------------
TOTAL 21,682,851
---------------------------------------------------------------------------
TRANSPORTATION (1.4%)
<F1> FedEx Corp. 7,400 328,116
<F1> Midwest Express Holdings, Inc. 10,350 208,294
Southwest Airlines Co. 21,150 512,887
---------------------------------------------------------------------------
TOTAL 1,049,297
---------------------------------------------------------------------------
UTILITIES (2.2%)
Enron Corp. 18,400 1,612,300
---------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $41,239,883) 64,240,969
==========================================================================
<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 (13.3%)
CAPTIVE FINANCE COMPANIES (1.3%)
Daimler-Chrysler N.A. Holdings,
6.5%, 10/30/00 1,000,000 $994,944
---------------------------------------------------------------------------
ELECTRONIC COMPUTERS (1.8%)
Hewlett Packard Co., 6.5%, 10/25/00 1,300,000 1,294,601
---------------------------------------------------------------------------
FEDERAL GOVERNMENT AND AGENCIES (0.8%)
Federal National Mortgage
Association, 6.39%, 11/30/00 600,000 593,448
---------------------------------------------------------------------------
FINANCE (1.7%)
<F2> The CIT Group, Inc.,
6.5%, 11/16/00 1,300,000 1,289,438
---------------------------------------------------------------------------
FINANCE LESSORS (1.5%)
<F2> Philip Morris Capital Company,
6.48%, 10/30/00 1,100,000 1,094,456
---------------------------------------------------------------------------
FINANCE SERVICES (3.3%)
<F2> Asset Securitization,
6.49%, 11/14/00 1,100,000 1,091,473
<F2> Citicorp, 6.53%, 10/25/00 1,300,000 1,294,577
---------------------------------------------------------------------------
TOTAL 2,386,050
---------------------------------------------------------------------------
PERSONAL CREDIT INSTITUTIONS (1.2%)
General Electric Capital Corp.,
6.69%, 10/2/00 900,000 900,000
---------------------------------------------------------------------------
SHORT-TERM BUSINESS CREDIT (1.7%)
<F2> Transamerica Financial Corporation,
6.5%, 11/10/00 1,300,000 1,290,846
---------------------------------------------------------------------------
TOTAL MONEY MARKET INVESTMENTS
(COST $9,844,051) 9,843,783
===========================================================================
TOTAL INVESTMENTS (100.0%)
(COST $51,083,934)<F3> 74,084,752
===========================================================================
OTHER ASSETS, LESS LIABILITIES (0.0%) (35,581)
===========================================================================
TOTAL NET ASSETS (100.0%) $74,049,171
===========================================================================
<F1> Non-Income Producing
ADR - American Depository Receipt
<F2> Partially held in a segregated account as collateral for open futures
positions. Information regarding open futures contracts as of period end
is summarized below.
Unrealized
Number of Expiration Appreciation/
Issuer Contracts Date (Depreciation)
-------------------------------------------------------------------------------
S&P 500/R Stock Index
(Total notional value at
9/30/00, $5,814,800) 16 12/00 $(329,550)
<F3> At September 30, 2000, the aggregate cost of securities for federal tax
purposes was $51,083,934 and the net unrealized appreciation of investments
based on that cost was $23,000,818 which is comprised of $25,589,493
aggregate gross unrealized appreciation and $2,588,675 aggregate gross
unrealized depreciation.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
GROWTH AND INCOME STOCK FUND
-----------------------------
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: $54.4 million
--------------------------------------------------------------------------------
The Growth and Income Stock 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 benefited in recent months from what
appears to be a shift in market sentiment: there has been renewal of interest in
value, after a long period of infatuation with growth, to the exclusion of other
factors that normally influence stock prices. This change is favorable for the
Fund's valuation-driven management style. Other factors in the Fund's improved
performance relative to its benchmark, the S&P 500/R Index, have been good stock
selection within industry groups and a slight industry tilt away from the
technology sector, which has been especially hard hit by the changed market
environment.
The largest holding in the Fund, Exxon Mobil, has been quite strong, as positive
results have been driven by rising oil prices and cost savings from the 1999
merger of Exxon and Mobil. Other holdings that have contributed to performance
are Pharmacia and ALZA in the healthcare sector; credit card leader Capital One;
and Sun Microsystems and Seagate, which have been among the best performers in
the weakening technology sector. Positions in some of these holdings have been
reduced to realize the profits; some of the proceeds have been used to take
advantage of good values created by falling stock prices of solid technology
companies such as Dell and Compaq, Nortel in the telecommunications area, and
Comcast in the cable television industry.
The Growth and Income Stock Fund is managed for Northwestern Mutual Investment
Services, LLC by J. P. Morgan Investment Management, Inc.
SECTOR ALLOCATION
9/30/00
--------------------------------------------------------
Technology 27%
Finance 16%
Basic Materials/Capital Goods 12%
Healthcare 11%
Consumer Staples 8%
Consumer Cyclicals 7%
Communication Services 6%
Energy 6%
Other Industries 4%
Short-term Investments 3%
TOP 10 EQUITY HOLDINGS
9/30/00
Company % Net Assets
--------------------------------------------------------
Exxon Mobil Corporation 4.0%
Cisco Systems, Inc. 3.6%
Tyco International Ltd. 3.4%
Sun Microsystems, Inc. 3.3%
General Electric Company 3.1%
Microsoft Corporation 2.9%
Intel Corporation 2.6%
Pharmacia Corporation 2.0%
Citigroup, Inc. 2.0%
EMC Corporation 1.9%
<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
GROWTH AND
GROWTH AND GROWTH AND INCOME STOCK
INCOME STOCK INCOME STOCK FUND CLASS B S&P
FUND FUND REDEMPTION 500/R
CLASS A CLASS B VALUE INDEX
-------------------------------------------------------------------------------
3/31/97 9,524 10,000 10,000
9/30/97 12,152 12,720 12,618
3/31/98 13,514 14,096 14,787
9/30/98 12,167 12,649 13,747
3/31/99 15,013 15,563 17,503
9/30/99 14,210 14,683 17,564
3/31/00 16,506 17,007 20,650
9/30/00 15,645 16,063 15,763 19,915
TOTAL RETURN Average
Annual
One Since
For the periods ended September 30, 2000 Year Inception<F1>
--------------------------------------------------------------------------------
Growth and Income Stock Fund
(Class A - without initial sales charge) 10.10% 15.23%
--------------------------------------------------------------------------------
S&P 500/R Index 13.39% 21.73%
--------------------------------------------------------------------------------
<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 an applicable contingent deferred sales charge for Class B.
SCHEDULE OF INVESTMENTS
Shares/Par Market Value
---------------------------------------------------------------------------
COMMON STOCK (97.0%)
BASIC MATERIALS (3.0%)
Alcoa, Inc. 9,840 $249,075
Allegheny Technologies Incorporated 12,550 227,469
Rohm and Haas Company 22,300 648,093
<F1> Smurfit-Stone Container Corporation 23,802 285,624
Temple-Inland, Inc. 5,700 215,888
---------------------------------------------------------------------------
TOTAL 1,626,149
---------------------------------------------------------------------------
CAPITAL GOODS (8.4%)
Cooper Industries, Inc. 10,800 380,700
General Electric Company 29,400 1,696,013
Honeywell International, Inc. 6,800 242,250
<F1> Sensormatic Electronics Corporation 13,000 195,000
Tyco International Ltd. 35,356 1,834,092
Waste Management, Inc. 11,805 205,850
---------------------------------------------------------------------------
TOTAL 4,553,905
---------------------------------------------------------------------------
COMMUNICATION SERVICES (6.4%)
<F1> Allegiance Telecom, Inc. 3,850 143,413
AT&T Corp. 14,400 423,000
<F1> Global Crossing Ltd. 10,800 334,800
<F1> Level 3 Communications, Inc. 3,500 269,938
<F1> Qwest Communications International Inc. 5,200 249,925
SBC Communications, Inc. 16,891 844,549
Verizon Communications 13,984 677,350
<F1> WorldCom, Inc. 17,005 516,527
---------------------------------------------------------------------------
TOTAL 3,459,502
---------------------------------------------------------------------------
CONSUMER CYCLICALS (6.9%)
<F1> Abercrombie & Fitch Co. - Class A 11,100 211,594
<F1> Cendant Corporation 18,759 204,004
<F1> Federated Department Stores, Inc. 8,600 224,675
Ford Motor Company 9,964 252,214
The Gap, Inc. 5,200 104,650
<F1> Jones Apparel Group, Inc. 7,000 185,500
<F1> Lear Corporation 10,200 209,738
The News Corporation Limited, ADR 15,400 863,362
Target Corporation 13,800 353,625
The TJX Companies, Inc. 19,300 434,250
Wal-Mart Stores, Inc. 14,200 683,375
---------------------------------------------------------------------------
TOTAL 3,726,987
---------------------------------------------------------------------------
CONSUMER STAPLES (8.1%)
The Clorox Company 7,300 288,806
The Coca-Cola Company 7,200 396,900
<F1> Comcast Corporation - Class A 16,200 663,188
<F1> Gemstar-TV Guide International, Inc. 2,800 244,125
The Gillette Company 15,700 484,738
Philip Morris Companies, Inc. 31,200 918,449
The Procter & Gamble Company 6,700 448,900
The Seagram Company Ltd. 8,200 470,988
Time Warner, Inc. 6,500 508,625
---------------------------------------------------------------------------
TOTAL 4,424,719
---------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
GROWTH AND INCOME STOCK FUND
Shares/Par Market Value
---------------------------------------------------------------------------
ENERGY (6.3%)
Baker Hughes Incorporated 8,900 $330,413
Exxon Mobil Corporation 24,138 2,151,298
<F1> Global Marine, Inc. 11,400 351,975
Royal Dutch Petroleum Company 3,400 203,788
Shell Transport & Trading Company, ADR 7,400 362,138
---------------------------------------------------------------------------
TOTAL 3,399,612
---------------------------------------------------------------------------
FINANCE (15.6%)
Ambac Financial Group, Inc. 12,800 937,599
Capital One Financial Corporation 9,700 679,606
CIGNA Corporation 4,400 459,360
The CIT Group, Inc. 17,320 303,100
Citigroup, Inc. 20,300 1,097,468
<F1> E*TRADE Group, Inc. 7,800 128,213
Federal National Mortgage Association 8,300 593,450
First Union Corporation 25,600 824,000
The Goldman Sachs Group, Inc. 7,200 820,350
KeyCorp 15,100 382,219
<F1> MetLife, Inc. 18,900 494,944
U.S. Bancorp 33,600 764,400
Washington Mutual, Inc. 14,000 557,375
XL Capital Ltd. - Class A 5,800 426,300
---------------------------------------------------------------------------
TOTAL 8,468,384
---------------------------------------------------------------------------
HEALTHCARE (11.1%)
<F1> ALZA Corporation 11,500 994,750
American Home Products Corporation 9,700 548,656
Bristol-Myers Squibb Company 11,100 634,088
Eli Lilly and Company 10,000 811,250
PE Corporation-PE Biosystems Group 3,300 384,450
Pfizer, Inc. 20,975 942,564
Pharmacia Corporation 18,371 1,105,704
Schering-Plough Corporation 13,600 632,400
---------------------------------------------------------------------------
TOTAL 6,053,862
---------------------------------------------------------------------------
TECHNOLOGY (27.1%)
<F1> America Online, Inc. 12,200 655,750
<F1> AT&T Corp. - Liberty Media Corporation 40,000 720,000
<F1> Cisco Systems, Inc. 35,100 1,939,274
<F1> Citrix Systems, Inc. 4,900 98,306
Compaq Computer Corporation 15,900 438,522
Computer Associates International, Inc. 13,500 340,031
<F1> Dell Computer Corporation 14,200 437,538
<F1> EMC Corporation 10,500 1,040,813
Intel Corporation 33,800 1,404,813
International Business Machines Corporation 3,300 371,250
<F1> Lattice Semiconductor Corporation 2,900 155,875
Shares/Par Market Value
---------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
Lucent Technologies, Inc. 10,050 $307,153
<F1> Microsoft Corporation 25,900 1,560,474
Motorola, Inc. 17,600 497,200
<F1> NCR Corporation 3,500 132,344
Nortel Networks Corporation 15,800 941,088
<F1> Oracle Corporation 6,000 472,500
<F1> Quantum Corporation - DLT & Storage Systems 7,700 115,981
<F1> Seagate Technology, Inc. 6,300 434,700
<F1> Sun Microsystems, Inc. 15,200 1,774,600
<F1> Tellabs, Inc. 4,400 210,100
Texas Instruments Incorporated 9,200 434,125
<F1> TyCom, Ltd. 7,700 295,488
---------------------------------------------------------------------------
TOTAL 14,777,925
---------------------------------------------------------------------------
TRANSPORTATION (1.2%)
Union Pacific Corporation 16,300 633,663
---------------------------------------------------------------------------
UTILITIES (2.9%)
Columbia Energy Group 8,500 603,500
DTE Energy Company 8,800 336,600
Dynegy Inc. - Class A 6,600 376,200
Entergy Corporation 7,500 279,375
---------------------------------------------------------------------------
TOTAL 1,595,675
---------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $49,088,892) 52,720,383
===========================================================================
MONEY MARKET INVESTMENTS (3.1%)
FINANCE SERVICES (2.2%)
Asset Securitization, 6.49%, 11/14/00 1,200,000 1,190,698
---------------------------------------------------------------------------
PERSONAL CREDIT INSTITUTIONS (0.9%)
General Electric Capital Corp.,
6.69%, 10/2/00 500,000 500,000
---------------------------------------------------------------------------
TOTAL MONEY MARKET INVESTMENTS
(COST $1,690,698) 1,690,698
===========================================================================
TOTAL INVESTMENTS (100.1%)
(COST $50,779,590)<F2> 54,411,081
===========================================================================
OTHER ASSETS, LESS LIABILITIES (-0.1%) (53,048)
===========================================================================
TOTAL NET ASSETS (100.0%) $54,358,033
===========================================================================
<F1> Non-Income Producing
ADR - American Depository Receipt
<F2> At September 30, 2000, the aggregate cost of securities for federal tax
purposes was $50,779,590 and the net unrealized appreciation of investments
based on that cost was $3,631,491 which is comprised of $10,340,121
aggregate gross unrealized appreciation and $6,708,630 aggregate gross
unrealized depreciation.
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
---------------------
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.
PORTFOLIO: The S&P 500/R Index is composed of 500 common stocks representing
approximately three-fourths of the total market value of all publicly-traded
common stocks in the United States.
STRATEGY: To capture broad market performance, at low cost, by investing in a
portfolio modeled after a broadly based stock index.
NET ASSETS: $91.4 million
--------------------------------------------------------------------------------
The Index 500 Stock Fund is designed to achieve results that approximate the
performance of the Standard & Poor's 500 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 Index before expenses.
SECTOR ALLOCATION
9/30/00
--------------------------------------------------------
Technology 30%
Finance 16%
Healthcare 12%
Consumer Staples 11%
Basic Materials/Capital Goods 11%
Other 7%
Consumer Cyclicals 7%
Energy 6%
TOP 10 EQUITY HOLDINGS
9/30/00
Company % Net Assets
---------------------------------------------------------
General Electric Company 4.7%
Cisco Systems, Inc. 3.2%
Microsoft Corporation 2.6%
Exxon Mobil Corporation 2.6%
Pfizer, Inc. 2.3%
Intel Corporation 2.3%
Citigroup, Inc. 2.0%
Oracle Corporation 1.8%
American International Group, Inc. 1.8%
EMC Corporation 1.8%
PERFORMANCE RELATIVE TO S&P 500/R INDEX
INDEX 500
INDEX 500 INDEX 500 STOCK FUND
STOCK FUND STOCK FUND CLASS B S&P 500/R
CLASS A CLASS B REDEMPTION VALUE INDEX
--------------------------------------------------------------------------
3/31/97 9,524 10,000 10,000
9/30/97 11,952 12,510 12,618
3/31/98 13,938 14,544 14,787
9/30/98 12,933 13,450 13,747
3/31/99 16,429 17,042 17,503
9/30/99 16,429 16,981 17,564
3/31/00 19,247 19,821 20,650
9/30/00 18,537 19,039 18,739 19,915
TOTAL RETURN Average
Annual
One Since
For the periods ended September 30, 2000 Year Inception<F1>
--------------------------------------------------------------------------------
Index 500 Stock Fund
(Class A - without initial sales charge) 12.83% 20.95%
S&P 500/R Index 13.39% 21.73%
--------------------------------------------------------------------------------
<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 an applicable contingent deferred sales charge for Class B.
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
INDEX 500 STOCK FUND
SCHEDULE OF INVESTMENTS
Shares/Par Market Value
---------------------------------------------------------------------------
COMMON STOCK (103.6%)
BASIC MATERIALS (1.8%)
Air Products and Chemicals, Inc. 1,700 $61,200
Alcan Aluminium Ltd. 1,600 46,300
Alcoa, Inc. 6,460 163,518
Allegheny Technologies Incorporated 600 10,875
Archer-Daniels-Midland Company 4,767 41,115
Barrick Gold Corporation 3,000 45,750
Bemis Company, Inc. 400 12,850
<F1> Bethlehem Steel Corporation 1,000 3,000
Boise Cascade Corporation 400 10,625
The Dow Chemical Company 5,100 127,181
E.I. du Pont de Nemours and Company 7,900 327,355
Eastman Chemical Company 600 22,163
Ecolab, Inc. 1,000 36,063
Engelhard Corporation 1,000 16,250
<F1> FMC Corporation 200 13,413
<F1> Freeport-McMoRan Copper & Gold, Inc. - Class B 1,200 10,575
Georgia-Pacific Corporation 1,300 30,550
Great Lakes Chemical Corporation 400 11,725
Hercules Incorporated 800 11,300
Homestake Mining Company 2,000 10,375
<F1> Inco Limited 1,400 22,575
International Flavors & Fragrances, Inc. 800 14,600
International Paper Company 3,586 102,873
Louisiana-Pacific Corporation 800 7,350
The Mead Corporation 800 18,700
Newmont Mining Corporation 1,258 21,386
Nucor Corporation 600 18,075
<F1> Pactiv Corporation 1,300 14,544
Phelps Dodge Corporation 596 24,883
Placer Dome, Inc. 2,500 23,594
Potlatch Corporation 200 6,325
PPG Industries, Inc. 1,300 51,594
Praxair, Inc. 1,200 44,850
Rohm and Haas Company 1,605 46,645
Sigma-Aldrich Corporation 600 19,800
Temple-Inland, Inc. 400 15,150
Union Carbide Corporation 1,000 37,750
USX-U.S. Steel Group 700 10,631
Vulcan Materials Company 800 32,150
<F1> W.R. Grace & Co. 500 3,438
Westvaco Corporation 800 21,350
Weyerhaeuser Company 1,700 68,638
Willamette Industries, Inc. 800 22,400
Worthington Industries, Inc. 600 5,625
---------------------------------------------------------------------------
TOTAL 1,667,109
---------------------------------------------------------------------------
Shares/Par Market Value
---------------------------------------------------------------------------
CAPITAL GOODS (9.0%)
<F1> Allied Waste Industries, Inc. 1,400 $12,863
<F1> American Power Conversion Corporation 1,500 28,781
Avery Dennison Corporation 800 37,100
The B.F. Goodrich Company 800 31,350
Ball Corporation 200 6,338
The Boeing Company 6,770 426,509
Briggs & Stratton Corporation 200 7,563
Caterpillar, Inc. 2,600 87,750
Cooper Industries, Inc. 700 24,675
Crane Co. 450 10,294
Crown Cork & Seal Company, Inc. 1,000 10,688
Cummins Engine Company, Inc. 300 8,981
Danaher Corporation 1,100 54,725
Deere & Company 1,800 59,850
Dover Corporation 1,500 70,406
Eaton Corporation 500 30,813
Emerson Electric Co. 3,200 214,399
Fluor Corporation 600 18,000
General Dynamics Corporation 1,500 94,219
General Electric Company 74,300 4,286,180
Honeywell International, Inc. 5,950 211,968
Illinois Tool Works, Inc. 2,300 128,513
Ingersoll-Rand Company 1,250 42,344
ITT Industries, Inc. 700 22,706
Johnson Controls, Inc. 600 31,913
Lockheed Martin Corporation 3,200 105,472
McDermott International, Inc. 500 5,500
Millipore Corporation 300 14,531
Minnesota Mining and Manufacturing Company 3,000 273,374
Molex Incorporated 1,450 78,934
National Service Industries, Inc. 300 5,869
<F1> Navistar International Corporation 500 14,969
Northrop Grumman Corporation 500 45,438
<F1> Owens-Illinois, Inc. 1,100 10,175
PACCAR, Inc. 600 22,238
Pall Corporation 900 17,944
Parker-Hannifin Corporation 850 28,688
Pitney Bowes, Inc. 1,900 74,931
Raytheon Company - Class B 2,600 73,938
Rockwell International Corporation 1,400 42,350
<F1> Sanmina Corporation 1,100 102,988
<F1> Sealed Air Corporation 614 27,784
<F1> Solectron Corporation 4,500 207,563
Textron, Inc. 1,100 50,738
<F1> Thermo Electron Corporation 1,300 33,800
Thomas & Betts Corporation 400 6,975
<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)
The Timken Company 500 $6,844
Tyco International Ltd. 12,720 659,849
United Technologies Corporation 3,500 242,374
Waste Management, Inc. 4,657 81,206
---------------------------------------------------------------------------
TOTAL 8,193,400
---------------------------------------------------------------------------
COMMUNICATION SERVICES (6.5%)
ALLTEL Corporation 2,400 125,250
AT&T Corp. 28,211 828,698
BellSouth Corporation 14,100 567,525
CenturyTel, Inc. 1,100 29,975
<F1> Global Crossing Ltd. 6,580 203,980
<F1> Nextel Communications, Inc. - Class A 5,700 266,475
<F1> Qwest Communications International Inc. 12,265 589,487
SBC Communications, Inc. 25,523 1,276,149
Sprint Corporation 6,600 193,463
<F1> Sprint Corporation (PCS Group) 6,900 241,931
Verizon Communications 20,432 989,675
<F1> WorldCom, Inc. 21,522 653,731
---------------------------------------------------------------------------
TOTAL 5,966,339
---------------------------------------------------------------------------
CONSUMER CYCLICALS (7.2%)
American Greetings Corporation - Class A 500 8,750
Armstrong Holdings, Inc. 300 3,581
<F1> AutoZone, Inc. 1,000 22,688
<F1> Bed Bath & Beyond, Inc. 2,100 51,220
<F1> Best Buy Co., Inc. 1,500 95,438
The Black & Decker Corporation 600 20,513
Brunswick Corporation 700 12,775
Carnival Corporation 4,500 110,812
<F1> Cendant Corporation 5,372 58,421
Centex Corporation 400 12,850
Circuit City Stores, Inc. 1,500 34,500
<F1> Consolidated Stores Corporation 800 10,800
<F1> Convergys Corporation 1,200 46,650
Cooper Tire & Rubber Company 600 6,038
<F1> Costco Wholesale Corporation 3,400 118,787
Dana Corporation 1,178 25,327
Delphi Automotive Systems Corporation 4,204 63,586
Dillard's, Inc. - Class A 700 7,438
Dollar General Corporation 2,490 41,708
Dow Jones & Company, Inc. 700 42,350
The Dun & Bradstreet Corporation 1,200 41,325
<F1> Federated Department Stores, Inc. 1,600 41,800
Ford Motor Company 14,069 356,121
Gannett Co., Inc. 2,000 106,000
The Gap, Inc. 6,362 128,034
General Motors Corporation 4,004 260,259
Shares/Par Market Value
---------------------------------------------------------------------------
CONSUMER CYCLICALS (CONTINUED)
Genuine Parts Company 1,350 $25,734
The Goodyear Tire & Rubber Company 1,200 21,600
H&R Block, Inc. 700 25,944
Harcourt General, Inc. 500 29,500
Harley-Davidson, Inc. 2,300 110,112
<F1> Harrah's Entertainment, Inc. 900 24,750
Hasbro, Inc. 1,250 14,297
Hilton Hotels Corporation 2,800 32,375
The Home Depot, Inc. 17,350 920,633
IMS Health Incorporated 2,200 45,650
The Interpublic Group of Companies, Inc. 2,300 78,344
J.C. Penney Company, Inc. 2,000 23,625
Kaufman and Broad Home Corporation 400 10,775
<F1> Kmart Corporation 3,600 21,600
Knight-Ridder, Inc. 600 30,488
<F1> Kohl's Corporation 2,500 144,218
Leggett & Platt, Incorporated 1,500 23,719
The Limited, Inc. 3,184 70,247
Liz Claiborne, Inc. 400 15,400
Lowe's Companies, Inc. 2,900 130,137
Marriott International, Inc. - Class A 1,800 65,588
Masco Corporation 3,400 63,325
Mattel, Inc. 3,200 35,800
The May Department Stores Company 2,450 50,225
Maytag Corporation 600 18,638
The McGraw-Hill Companies, Inc. 1,500 95,344
Meredith Corporation 400 11,800
The New York Times Company - Class A 1,300 51,106
NIKE, Inc. - Class B 2,100 84,131
Nordstrom, Inc. 1,000 15,563
<F1> Office Depot, Inc. 2,400 18,750
Omnicom Group, Inc. 1,300 94,819
Owens Corning 400 1,050
Pulte Corporation 300 9,900
RadioShack Corporation 1,400 90,475
<F1> Reebok International Ltd. 400 7,525
Russell Corporation 200 3,175
Sears, Roebuck & Co. 2,600 84,292
The Sherwin-Williams Company 1,200 25,650
Snap-on Incorporated 400 9,425
Springs Industries, Inc. - Class A 100 2,819
The Stanley Works 700 16,144
<F1> Staples, Inc. 3,600 51,075
Target Corporation 6,900 176,812
Tiffany & Co. 1,100 42,419
The TJX Companies, Inc. 2,300 51,750
<F1> Toys "R" Us, Inc. 1,600 26,000
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
INDEX 500 STOCK FUND
Shares/Par Market Value
---------------------------------------------------------------------------
CONSUMER CYCLICALS (CONTINUED)
Tribune Company 2,360 $102,955
TRW, Inc. 900 36,563
V. F. Corporation 900 22,219
Visteon Corporation 952 14,399
Wal-Mart Stores, Inc. 33,500 1,612,187
Whirlpool Corporation 500 19,438
Young & Rubicam, Inc. 500 24,750
---------------------------------------------------------------------------
TOTAL 6,563,030
---------------------------------------------------------------------------
CONSUMER STAPLES (9.7%)
Adolph Coors Company - Class B 300 18,956
Alberto-Culver Company - Class B 400 11,525
Albertson's, Inc. 3,212 67,452
Anheuser-Busch Companies, Inc. 6,800 287,725
Avon Products, Inc. 1,800 73,575
Bestfoods 2,000 145,500
Brown-Forman Corporation - Class B 500 27,375
Campbell Soup Company 3,200 82,800
Cardinal Health, Inc. 2,050 180,784
<F1> Clear Channel Communications, Inc. 4,400 248,600
The Clorox Company 1,800 71,213
The Coca-Cola Company 18,600 1,025,324
Coca-Cola Enterprises, Inc. 3,200 51,000
Colgate-Palmolive Company 4,300 202,960
<F1> Comcast Corporation - Class A 6,700 274,281
ConAgra, Inc. 4,000 80,250
CVS Corporation 2,900 134,306
Darden Restaurants, Inc. 900 18,731
Deluxe Corporation 500 10,156
Fort James Corporation 1,500 45,844
Fortune Brands, Inc. 1,200 31,800
General Mills, Inc. 2,200 78,100
The Gillette Company 7,800 240,825
The Great Atlantic & Pacific Tea Company, Inc. 300 3,319
H.J. Heinz Company 2,600 96,363
Hershey Foods Corporation 1,000 54,125
Kellogg Company 3,000 72,563
Kimberly-Clark Corporation 4,200 234,413
<F1> The Kroger Co. 6,300 142,144
Longs Drug Stores Corporation 300 5,738
McDonald's Corporation 10,000 301,875
McKesson HBOC, Inc. 2,121 64,823
Nabisco Group Holdings Corp. 2,500 71,250
Newell Rubbermaid, Inc. 2,045 46,652
PepsiCo, Inc. 10,800 496,800
Philip Morris Companies, Inc. 17,200 506,325
Shares/Par Market Value
---------------------------------------------------------------------------
CONSUMER STAPLES (CONTINUED)
The Procter & Gamble Company 9,800 $656,599
The Quaker Oats Company 1,000 79,125
R.R. Donnelley & Sons Company 900 22,106
Ralston-Ralston Purina Group 2,300 54,481
<F1> Safeway, Inc. 3,700 172,744
Sara Lee Corporation 6,500 132,031
The Seagram Company Ltd. 3,300 189,544
<F1> Starbucks Corporation 1,400 56,088
SUPERVALU INC. 1,000 15,063
SYSCO Corporation 2,500 115,781
Time Warner, Inc. 9,900 774,674
<F1> Tricon Global Restaurants, Inc. 1,130 34,606
Tupperware Corporation 400 7,200
UST, Inc. 1,200 27,450
Walgreen Co. 7,600 288,325
The Walt Disney Company 15,600 596,700
Wendy's International, Inc. 900 18,056
Winn-Dixie Stores, Inc. 1,100 15,813
Wm. Wrigley Jr. Company 900 67,388
---------------------------------------------------------------------------
TOTAL 8,829,246
---------------------------------------------------------------------------
ENERGY (6.3%)
Amerada Hess Corporation 700 46,856
Anadarko Petroleum Corporation 1,819 120,891
Apache Corporation 900 53,213
Ashland, Inc. 500 16,844
Baker Hughes Incorporated 2,510 93,184
Burlington Resources, Inc. 1,605 59,084
Chevron Corporation 4,900 417,725
Conoco Inc. - Class B 4,700 126,606
Devon Energy Corporation 1,000 60,150
Exxon Mobil Corporation 26,105 2,326,607
Halliburton Company 3,300 161,494
Kerr-McGee Corporation 695 46,044
Occidental Petroleum Corporation 2,800 61,075
Phillips Petroleum Company 1,900 119,225
<F1> Rowan Companies, Inc. 700 20,300
Royal Dutch Petroleum Company 16,100 964,993
Schlumberger Limited 4,300 353,944
Sunoco, Inc. 700 18,856
Texaco, Inc. 4,100 215,250
Tosco Corporation 1,100 34,306
Transocean Sedco Forex, Inc. 1,587 93,038
Unilever N V 4,253 205,207
Unocal Corporation 1,800 63,788
USX-Marathon Group 2,300 65,263
---------------------------------------------------------------------------
TOTAL 5,743,943
---------------------------------------------------------------------------
<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
---------------------------------------------------------------------------
FINANCE (16.2%)
AFLAC Incorporated 2,000 $128,125
The Allstate Corporation 5,600 194,600
American Express Company 10,000 607,499
American General Corporation 1,910 148,980
American International Group, Inc. 17,319 1,657,211
AmSouth Bancorporation 3,000 37,500
Aon Corporation 1,925 75,556
Associates First Capital Corporation - Class A 5,444 206,872
Bank of America Corporation 12,479 653,587
The Bank of New York Company, Inc. 5,500 308,344
Bank One Corporation 8,658 334,415
BB&T Corporation 2,900 87,363
The Bear Stearns Companies, Inc. 792 49,896
Capital One Financial Corporation 1,500 105,094
The Charles Schwab Corporation 10,200 362,100
Charter One Financial, Inc. 1,675 40,828
The Chase Manhattan Corporation 9,750 450,328
The Chubb Corporation 1,300 102,863
CIGNA Corporation 1,200 125,280
Cincinnati Financial Corporation 1,200 42,600
The CIT Group, Inc. 2,000 35,000
Citigroup, Inc. 33,793 1,826,933
Comerica Incorporated 1,150 67,203
Conseco, Inc. 2,433 18,552
Countrywide Credit Industries, Inc. 900 33,975
Federal Home Loan Mortgage Corporation 5,200 281,125
Federal National Mortgage Association 7,600 543,400
Fifth Third Bancorp 3,537 190,556
First Union Corporation 7,320 235,613
Firstar Corporation 7,336 164,143
FleetBoston Financial Corporation 6,797 265,083
Franklin Resources, Inc. 1,800 79,974
Golden West Financial Corporation 1,200 64,350
The Hartford Financial Services Group, Inc. 1,600 116,700
Household International, Inc. 3,519 199,263
Huntington Bancshares Incorporated 1,872 27,495
J.P. Morgan & Co. Incorporated 1,200 196,050
Jefferson-Pilot Corporation 800 54,300
KeyCorp 3,300 83,531
Lehman Brothers Holdings, Inc. 900 132,975
Lincoln National Corporation 1,400 67,375
Loews Corporation 700 58,363
Marsh & McLennan Companies, Inc. 2,000 265,500
MBIA, Inc. 700 49,788
MBNA Corporation 6,350 244,475
Mellon Financial Corporation 3,700 171,588
Shares/Par Market Value
---------------------------------------------------------------------------
FINANCE (CONTINUED)
Merrill Lynch & Co., Inc. 5,800 $382,800
MGIC Investment Corporation 800 48,900
Morgan Stanley Dean Witter & Co. 8,510 778,132
National City Corporation 4,600 101,775
Northern Trust Corporation 1,700 151,088
Old Kent Financial Corporation 1,050 30,384
Paine Webber Group, Inc. 1,100 74,938
The PNC Financial Services Group, Inc. 2,200 143,000
The Progressive Corporation 500 40,938
Providian Financial Corporation 1,100 139,700
Regions Financial Corporation 1,700 38,569
SAFECO Corporation 1,000 27,250
SouthTrust Corporation 1,300 40,869
The St. Paul Companies, Inc. 1,582 78,012
State Street Corporation 1,200 156,000
Stillwell Financial Inc. 1,700 73,950
Summit Bancorp. 1,300 44,850
SunTrust Banks, Inc. 2,300 114,569
Synovus Financial Corp. 2,150 45,553
T. Rowe Price Associates, Inc. 900 42,244
Torchmark Corporation 1,000 27,813
U.S. Bancorp 5,659 128,742
Union Planters Corporation 1,000 33,063
UnumProvident Corporation 1,776 48,396
USA Education, Inc. 1,200 57,825
Wachovia Corporation 1,500 85,031
Washington Mutual, Inc. 4,086 162,674
Wells Fargo & Company 12,100 555,844
---------------------------------------------------------------------------
TOTAL 14,845,260
---------------------------------------------------------------------------
HEALTHCARE (11.8%)
Abbott Laboratories 11,600 551,725
Aetna, Inc. 1,100 63,869
Allergan, Inc. 1,000 84,438
<F1> ALZA Corporation 900 77,850
American Home Products Corporation 9,800 554,313
<F1> Amgen, Inc. 7,700 537,677
Bausch & Lomb Incorporated 400 15,575
Baxter International, Inc. 2,200 175,588
Becton, Dickinson and Company 1,900 50,231
<F1> Biogen, Inc. 1,100 67,100
Biomet, Inc. 1,300 45,500
<F1> Boston Scientific Corporation 3,100 50,956
Bristol-Myers Squibb Company 14,800 845,449
C. R. Bard, Inc. 400 16,900
Eli Lilly and Company 8,500 689,563
<F1> Guidant Corporation 2,300 162,581
HCA - The Healthcare Company 4,200 155,925
<F1> HEALTHSOUTH Corporation 2,900 23,563
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
INDEX 500 STOCK FUND
Shares/Par Market Value
---------------------------------------------------------------------------
HEALTHCARE (CONTINUED)
<F1> Humana, Inc. 1,300 $13,975
Johnson & Johnson 10,400 976,949
Mallinckrodt, Inc. 500 22,813
<F1> Manor Care, Inc. 800 12,550
<F1> MedImmune, Inc. 1,600 123,600
Medtronic, Inc. 9,000 466,313
Merck & Co., Inc. 17,300 1,287,768
PE Corporation 1,600 186,400
Pfizer, Inc. 47,325 2,126,666
Pharmacia Corporation 9,503 571,962
<F1> Quintiles Transnational Corp. 900 14,344
Schering-Plough Corporation 11,000 511,500
<F1> St. Jude Medical, Inc. 600 30,600
<F1> Tenet Healthcare Corporation 2,300 83,663
UnitedHealth Group Incorporated 1,200 118,500
<F1> Watson Pharmaceuticals, Inc. 800 51,900
<F1> Wellpoint Health Networks, Inc. - Class A 500 48,000
---------------------------------------------------------------------------
TOTAL 10,816,306
---------------------------------------------------------------------------
TECHNOLOGY (31.1%)
<F1> Adaptec, Inc. 800 16,000
<F1> ADC Telecommunications, Inc. 5,100 137,142
Adobe Systems Incorporated 900 139,725
<F1> Advanced Micro Devices, Inc. 2,300 54,338
<F1> Agilent Technologies, Inc. 3,346 163,745
<F1> Altera Corporation 3,000 143,250
<F1> America Online, Inc. 17,300 929,874
<F1> Analog Devices, Inc. 2,700 222,919
<F1> Andrew Corporation 600 15,713
<F1> Apple Computer, Inc. 2,400 61,800
<F1> Applied Materials, Inc. 6,100 361,806
Autodesk, Inc. 400 10,150
Automatic Data Processing, Inc. 4,700 314,313
<F1> BMC Software, Inc. 1,800 34,425
<F1> Broadcom Corporation - Class A 1,600 390,000
<F1> Cabletron Systems, Inc. 1,400 41,125
<F1> Ceridian Corporation 1,100 30,869
<F1> Cisco Systems, Inc. 52,300 2,889,574
<F1> Citrix Systems, Inc. 1,400 28,088
Compaq Computer Corporation 12,785 352,610
Computer Associates International, Inc. 4,400 110,825
<F1> Computer Sciences Corporation 1,300 96,525
<F1> Compuware Corporation 2,700 22,613
<F1> Comverse Technology, Inc. 1,100 118,800
<F1> Conexant Systems, Inc. 1,600 67,000
Corning Incorporated 2,200 653,400
<F1> Dell Computer Corporation 19,300 594,681
Eastman Kodak Company 2,300 94,013
Electronic Data Systems Corporation 3,500 145,250
Shares/Par Market Value
---------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
<F1> EMC Corporation 16,312 $1,616,926
Equifax, Inc. 1,100 29,631
First Data Corporation 3,100 121,094
<F1> Gateway, Inc. 2,400 112,200
Hewlett-Packard Company 7,500 727,500
Intel Corporation 50,300 2,090,593
International Business Machines Corporation 13,300 1,496,249
<F1> JDS Uniphase Corporation 7,000 662,813
<F1> KLA-Tencor Corporation 1,400 57,663
<F1> Lexmark International Group, Inc. - Class A 1,000 37,500
Linear Technology Corporation 2,300 148,925
<F1> LSI Logic Corporation 2,300 67,275
Lucent Technologies, Inc. 24,435 746,795
<F1> Maxim Integrated Products, Inc. 2,100 168,919
<F1> Mercury Interactive Corporation 600 94,050
<F1> Micron Technology, Inc. 4,200 193,200
<F1> Microsoft Corporation 39,500 2,379,874
<F1> MIPS Technologies, Inc. - Class B 180 6,930
Motorola, Inc. 16,160 456,520
<F1> National Semiconductor Corporation 1,300 52,325
<F1> NCR Corporation 700 26,469
<F1> Network Appliance, Inc. 2,300 292,963
Nortel Networks Corporation 22,220 1,323,478
<F1> Novell, Inc. 2,500 24,844
<F1> Novellus Systems, Inc. 1,000 46,563
<F1> Oracle Corporation 21,350 1,681,312
<F1> Palm, Inc. 4,208 222,761
<F1> Parametric Technology Corporation 2,100 22,969
Paychex, Inc. 2,825 148,313
<F1> PeopleSoft, Inc. 2,100 58,669
PerkinElmer, Inc. 400 41,750
Polaroid Corporation 300 4,031
<F1> QUALCOMM Incorporated 5,600 399,000
Sabre Holdings Corporation - Class A 1,011 29,256
<F1> Sapient Corporation 900 36,619
Scientific-Atlanta, Inc. 1,200 76,350
<F1> Seagate Technology, Inc. 1,700 117,300
<F1> Siebel Systems, Inc. 3,000 333,938
<F1> Sun Microsystems, Inc. 11,900 1,389,324
<F1> SYNAVANT Inc. 105 702
Tektronix, Inc. 400 30,725
<F1> Tellabs, Inc. 3,100 148,025
<F1> Teradyne, Inc. 1,300 45,500
Texas Instruments Incorporated 13,000 613,438
<F1> Unisys Corporation 2,300 25,875
<F1> VERITAS Software Corporation 2,900 411,800
<F1> Viacom Inc. - Class B 11,431 668,714
<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
---------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
W.W. Grainger, Inc. 700 $18,419
Xerox Corporation 5,000 75,313
<F1> Xilinx, Inc. 2,400 205,500
<F1> Yahoo!, Inc. 4,100 373,100
---------------------------------------------------------------------------
TOTAL 28,400,575
---------------------------------------------------------------------------
TRANSPORTATION (0.6%)
<F1> AMR Corporation 1,100 35,956
Burlington Northern Santa Fe Corporation 3,200 69,000
CSX Corporation 1,600 34,900
Delta Air Lines, Inc. 900 39,938
<F1> FedEx Corp. 2,220 98,434
Norfolk Southern Corporation 2,900 42,413
Ryder System, Inc. 400 7,375
Southwest Airlines Co. 3,687 89,409
Union Pacific Corporation 1,900 73,863
<F1> US Airways Group, Inc. 500 15,219
---------------------------------------------------------------------------
TOTAL 506,507
---------------------------------------------------------------------------
UTILITIES (3.4%)
<F2><F1> The AES Corporation 3,400 232,899
Ameren Corporation 1,000 41,875
American Electric Power Company, Inc. 2,400 93,900
Cinergy Corp. 1,200 39,675
CMS Energy Corporation 800 21,550
The Coastal Corporation 1,600 118,600
Columbia Energy Group 550 39,050
Consolidated Edison, Inc. 1,600 54,600
Constellation Energy Group 1,100 54,725
CP&L Energy, Inc. 1,200 50,025
Dominion Resources, Inc. 1,742 101,145
DTE Energy Company 1,100 42,075
Duke Energy Corporation 2,731 234,182
Eastern Enterprises 200 12,763
Edison International 2,500 48,281
El Paso Energy Corporation 1,700 104,763
Enron Corp. 5,500 481,937
Entergy Corporation 1,700 63,325
FirstEnergy Corp. 1,700 45,794
Florida Progress Corporation 700 37,056
FPL Group, Inc. 1,300 85,475
GPU, Inc. 900 29,194
KeySpan Corporation 1,000 40,125
<F1> Niagara Mohawk Holdings, Inc. 1,300 20,475
NICOR, Inc. 300 10,856
ONEOK, Inc. 200 7,950
PECO Energy Company 1,300 78,731
Peoples Energy Corporation 300 10,013
PG&E Corporation 2,900 70,144
Shares/Par Market Value
---------------------------------------------------------------------------
UTILITIES (CONTINUED)
Pinnacle West Capital Corporation 600 $30,525
PPL Corporation 1,098 45,842
Public Service Enterprise Group Incorporated 1,600 71,500
Reliant Energy, Inc. 2,173 101,045
Sempra Energy 1,551 32,280
The Southern Company 4,900 158,944
TXU Corp. 1,967 77,942
Unicom Corporation 1,300 73,044
The Williams Companies, Inc. 3,300 139,425
XCEL Energy, Inc. 2,540 69,850
---------------------------------------------------------------------------
TOTAL 3,071,580
---------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $74,513,756) 94,603,295
===========================================================================
MONEY MARKET INVESTMENTS (4.3%)
FEDERAL GOVERNMENT AND AGENCIES (0.9%)
<F2> Federal National Mortgage Association,
6.39%, 11/30/00 800,000 791,264
---------------------------------------------------------------------------
FINANCE SERVICES (2.1%)
<F2> Asset Securitization, 6.49%, 11/14/00 1,300,000 1,289,922
<F2> Citicorp, 6.53%, 10/25/00 700,000 697,080
---------------------------------------------------------------------------
TOTAL 1,987,002
---------------------------------------------------------------------------
SECURITY BROKERS AND DEALERS (1.3%)
<F2> Salomon Smith Barney Holdings,
Inc., 6.5%, 11/10/00 1,200,000 1,191,550
---------------------------------------------------------------------------
TOTAL MONEY MARKET INVESTMENTS
(COST $3,970,174) 3,969,816
===========================================================================
TOTAL INVESTMENTS (107.9%)
(COST $78,483,930)<F3> 98,573,111
===========================================================================
OTHER ASSETS, LESS LIABILITIES (-7.9%) (7,200,175)
===========================================================================
TOTAL NET ASSETS (100.0%) $91,372,936
===========================================================================
<F1> Non-Income Producing
<F2> Partially held in a segregated account as collateral for open futures
positions. Information regarding open futures contracts as of period end
is summarized below.
Unrealized
Number of Expiration Appreciation/
Issuer Contracts Date (Depreciation)
--------------------------------------------------------------------------------
S&P 500/R Stock Index
(Total notional value at
9/30/00, $4,134,800) 11 12/00 $(137,125)
--------------------------------------------------------------------------------
<F3> At September 30, 2000, the aggregate cost of securities for federal tax
purposes was $78,483,930 and the net unrealized appreciation of investments
based on that cost was $20,089,181 which is comprised of $26,616,250
aggregate gross unrealized appreciation and $6,527,069 aggregate gross
unrealized depreciation.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
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: $70.5 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 investments in each category is adjusted as
appropriate to take advantage of market trends and opportunities, and securities
within each category are actively managed. The Fund is managed to maintain broad
diversification, while blending asset classes to achieve both capital
appreciation and current income. During 2000, both sector allocation and
selection of individual securities have contributed to the Fund's strong
performance.
A major key to performance is overexposure to equities when the market is strong
and a defensive posture during periods of market weakness. The Fund's managers
took advantage of market strength in the first quarter of 2000 to reduce
exposure to the equity market. Since then the equity market has been highly
volatile, with no strong direction. At the end of September, the Fund is
positioned defensively, with 52% stocks, 41% bonds and 7% cash. Although the
major equity indices have fallen well below their peak levels early this year,
equity prices are still high based on historical standards. The liquidity
provided by the cash position would provide the opportunity to take advantage of
any equity correction that may occur in the fourth quarter.
SECTOR ALLOCATION
9/30/00
--------------------------------------------------------
Investment-Grade Bonds 33%
Large-Cap Stocks 28%
Small-Cap Stocks 14%
Foreign Stocks 10%
Below Investment-Grade Bonds 7%
Cash Equivalents 7%
Convertible Securities 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
ASSET
ALLOCATION MERRILL MERRILL
ASSET ASSET FUND LYNCH LYNCH
ALLOCATION ALLOCATION CLASS B DOMESTIC 91-DAY
FUND FUND REDEMPTION S&P 500/R MASTER TREASURY
CLASS A CLASS B VALUE INDEX INDEX BILL
-----------------------------------------------------------------------------
3/31/97 9,524 10,000 10,000 10,000 10,000
9/30/97 11,390 11,920 12,618 10,712 10,272
3/31/98 12,239 12,769 14,787 11,205 10,536
9/30/98 11,355 11,811 13,747 11,955 10,824
3/31/99 13,023 13,506 17,503 11,934 11,061
9/30/99 13,826 14,280 17,564 11,908 11,333
3/31/00 17,110 17,621 20,650 12,167 11,634
9/30/00 17,408 17,871 17,571 19,915 12,733 11,989
TOTAL RETURN Average
Annual
One Since
For the periods ended September 30, 2000 Year Inception<F1>
--------------------------------------------------------------------------------
Asset Allocation Fund
(Class A - without initial sales charge) 25.91% 18.80%
--------------------------------------------------------------------------------
S&P 500/R Index 13.39% 21.73%
--------------------------------------------------------------------------------
Merrill Lynch Domestic Master Index 6.94% 7.14%
--------------------------------------------------------------------------------
Merrill Lynch 91-Day Treasury Bill 5.78% 5.31%
--------------------------------------------------------------------------------
<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 an applicable contingent deferred sales charge for Class B.
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
---------------------------------------------------------------------------
DOMESTIC COMMON STOCKS AND WARRANTS (36.9%)
LARGE CAP COMMON STOCK (22.6%)
BASIC MATERIALS (0.3%)
Ecolab, Inc. 5,000 $180,313
PPG Industries, Inc. 800 31,750
---------------------------------------------------------------------------
TOTAL 212,063
---------------------------------------------------------------------------
CAPITAL GOODS (1.5%)
Avery Dennison Corporation 4,100 190,138
General Electric Company 9,600 553,799
Illinois Tool Works, Inc. 1,700 94,988
Tyco International Ltd. 3,700 191,937
---------------------------------------------------------------------------
TOTAL 1,030,862
---------------------------------------------------------------------------
COMMUNICATION SERVICES (0.7%)
AT&T Corp. 4,795 140,853
<F1> AT&T Wireless Group 900 18,788
<F1> Nextel Communications, Inc. - Class A 4,000 186,999
Sprint Corporation 1,400 41,038
Verizon Communications 2,196 106,369
<F1> WorldCom, Inc. 1,077 32,714
---------------------------------------------------------------------------
TOTAL 526,761
---------------------------------------------------------------------------
CONSUMER CYCLICALS (2.8%)
<F1> Amazon.com, Inc. 1,100 42,281
Ford Motor Company 3,146 79,633
Harley-Davidson, Inc. 7,000 335,124
The Interpublic Group of Companies, Inc. 2,200 74,938
<F1> Kohl's Corporation 6,300 363,430
The McGraw-Hill Companies, Inc. 3,500 222,469
The New York Times Company - Class A 5,100 200,494
Omnicom Group, Inc. 900 65,644
Target Corporation 3,800 97,375
Tiffany & Co. 1,200 46,275
Tribune Company 5,100 222,488
Wal-Mart Stores, Inc. 5,200 250,249
---------------------------------------------------------------------------
TOTAL 2,000,400
---------------------------------------------------------------------------
CONSUMER STAPLES (2.4%)
Anheuser-Busch Companies, Inc. 4,400 186,175
The Estee Lauder Companies, Inc. - Class A 4,700 172,138
Keebler Foods Company 5,900 247,799
Kimberly-Clark Corporation 3,000 167,438
McDonald's Corporation 3,200 96,600
PepsiCo, Inc. 4,100 188,600
The Quaker Oats Company 1,500 118,688
Time Warner, Inc. 2,200 172,150
<F1> Viacom Inc. - Class B 2,200 128,700
Walgreen Co. 6,500 246,594
---------------------------------------------------------------------------
TOTAL 1,724,882
---------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
ASSET ALLOCATION FUND
Shares/Par Market Value
---------------------------------------------------------------------------
ENERGY (1.7%)
BP Amoco PLC, ADR 2,200 $116,600
Chevron Corporation 600 51,150
Conoco Inc. - Class B 5,400 145,463
Diamond Offshore Drilling, Inc. 2,200 90,200
EOG Resources, Inc. 5,100 198,263
Exxon Mobil Corporation 2,620 233,508
Santa Fe International Corporation 2,400 108,150
Schlumberger Limited 1,000 82,313
Tosco Corporation 5,900 184,006
---------------------------------------------------------------------------
TOTAL 1,209,653
---------------------------------------------------------------------------
FINANCE (2.7%)
American International Group, Inc. 2,550 244,003
The Bank of New York Company, Inc. 3,400 190,613
The Chase Manhattan Corporation 2,250 103,922
CIGNA Corporation 1,800 187,920
Citigroup, Inc. 6,666 360,381
Fifth Third Bancorp 2,550 137,381
Household International, Inc. 1,900 107,588
Lehman Brothers Holdings, Inc. 1,900 280,725
Morgan Stanley Dean Witter & Co. 3,200 292,600
---------------------------------------------------------------------------
TOTAL 1,905,133
---------------------------------------------------------------------------
HEALTHCARE (2.0%)
Bristol-Myers Squibb Company 2,400 137,100
Eli Lilly and Company 1,600 129,800
<F1> Guidant Corporation 1,900 134,306
Johnson & Johnson 1,500 140,906
Medtronic, Inc. 3,900 202,068
Merck & Co., Inc. 1,800 133,988
Pfizer, Inc. 7,325 329,166
Schering-Plough Corporation 3,000 139,500
<F1> Watson Pharmaceuticals, Inc. 900 58,388
---------------------------------------------------------------------------
TOTAL 1,405,222
---------------------------------------------------------------------------
TECHNOLOGY (7.6%)
<F1> Amdocs Limited 4,900 305,638
<F1> America Online, Inc. 3,100 166,625
<F1> Atmel Corporation 9,400 142,763
<F1> Axcelis Technologies, Inc. 2,000 23,750
<F1> Cisco Systems, Inc. 9,500 524,875
Corning Incorporated 900 267,300
<F1> Dell Computer Corporation 3,600 110,925
Electronic Data Systems Corporation 3,500 145,250
<F1> EMC Corporation 2,800 277,550
<F1> EXFO Electro-Optical Engineering Inc. 600 26,138
<F1> Fiserv, Inc. 6,925 414,633
Hewlett-Packard Company 700 67,900
Shares/Par Market Value
---------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
Intel Corporation 7,400 $307,562
International Business Machines Corporation 1,800 202,500
<F1> Internet Pictures Corporation 3,200 17,400
<F1> Lexmark International Group, Inc. - Class A 900 33,750
<F1> Microsoft Corporation 5,300 319,324
Nortel Networks Corporation 6,400 381,199
<F1> ONI Systems Corp. 1,900 163,994
<F1> Oracle Corporation 3,800 299,250
<F1> Palm, Inc. 4,286 226,890
<F1> PMC-Sierra, Inc. 1,000 215,250
<F1> SmartForce Public Limited Company, ADR 1,400 66,325
<F1> Sun Microsystems, Inc. 2,000 233,500
Texas Instruments Incorporated 3,600 169,875
<F1> TIBCO Software Inc. 2,300 194,206
<F1> Williams Communications Group, Inc. - Class A 3,700 74,000
---------------------------------------------------------------------------
TOTAL 5,378,372
---------------------------------------------------------------------------
TRANSPORTATION (0.3%)
<F1> FedEx Corp. 1,800 79,812
Southwest Airlines Co. 5,500 133,374
---------------------------------------------------------------------------
TOTAL 213,186
---------------------------------------------------------------------------
UTILITIES (0.6%)
Enron Corp. 4,600 403,075
---------------------------------------------------------------------------
TOTAL LARGE CAP COMMON STOCK 16,009,609
---------------------------------------------------------------------------
SMALL CAP COMMON STOCK (14.3%)
CAPITAL GOODS (0.8%)
<F1> APW Ltd. 1,400 68,250
Kaydon Corporation 4,500 103,500
<F1> MSC Industrial Direct Co., Inc. - Class A 3,200 48,800
<F1> Sanmina Corporation 1,300 121,713
<F1> Stoneridge, Inc. 4,900 47,163
Teleflex Incorporated 4,200 144,375
---------------------------------------------------------------------------
TOTAL 533,801
---------------------------------------------------------------------------
COMMUNICATION SERVICES (0.4%)
Telefonos de Mexico SA 5,000 265,937
---------------------------------------------------------------------------
CONSUMER CYCLICALS (3.3%)
<F1> Catalina Marketing Corporation 5,400 203,175
<F1> CDW Computer Centers, Inc. 2,700 186,300
<F1> Charles River Associates Incorporated 3,200 38,800
Cintas Corporation 3,900 169,894
<F1> The Corporate Executive Board Company 3,400 136,850
<F1> Costco Wholesale Corporation 3,300 115,294
<PAGE>
--------------------------------------------------------------------------------
M A S O N S T R E E T F U N D S
--------------------------------------------------------------------------------
ASSET ALLOCATION FUND
Shares/Par Market Value
---------------------------------------------------------------------------
CONSUMER CYCLICALS (CONTINUED)
<F1> Heidrick & Struggles International, Inc. 2,000 $102,750
<F1> Hotel Reservations Network, Inc. - Class A 2,400 87,900
<F1> JAKKS Pacific, Inc. 1,400 13,169
<F1> Jones Apparel Group, Inc. 3,400 90,100
<F1> Jupiter Media Metrix, Inc. 2,365 37,692
<F1> Lamar Advertising Company - Class A 2,100 79,538
Leggett & Platt, Incorporated 5,200 82,225
<F1> Michaels Stores, Inc. 4,400 176,000
<F1> O'Reilly Automotive, Inc. 13,900 203,288
<F1> Robert Half International Inc. 3,800 131,813
The Talbots, Inc. 2,500 165,625
<F1> Tetra Tech, Inc. 7,900 225,643
<F1> TMP Worldwide Inc. 1,200 96,600
<F1> Whitehall Jewellers, Inc. 2,200 17,463
---------------------------------------------------------------------------
TOTAL 2,360,119
---------------------------------------------------------------------------
CONSUMER STAPLES (0.4%)
<F1> Patterson Dental Company 9,500 213,750
<F1> Steiner Leisure Limited 2,750 61,531
---------------------------------------------------------------------------
TOTAL 275,281
---------------------------------------------------------------------------
ENERGY (1.1%)
Anadarko Petroleum Corporation 1,500 99,690
<F1> BJ Services Company 4,000 244,499
<F1> Global Industries, Ltd. 5,700 71,250
<F1> Grant Prideco, Inc. 2,300 50,456
<F1> Nabors Industries, Inc. 3,700 193,880
<F1> Stone Energy Corporation 400 22,000
<F1> Weatherford International, Inc. 2,300 98,900
---------------------------------------------------------------------------
TOTAL 780,675
---------------------------------------------------------------------------
FINANCE (0.9%)
GreenPoint Financial Corp. 3,442 101,969
Investors Financial Services Corp. 6,200 391,374
<F1> Knight Trading Group, Inc. - Class A 1,900 68,400
<F1> Trammell Crow Company 3,800 57,000
---------------------------------------------------------------------------
TOTAL 618,743
---------------------------------------------------------------------------
HEALTHCARE (2.1%)
<F1> Biovail Corporation 1,900 154,731
<F1> Elan Corporation PLC, ADR 3,500 191,625
<F1> Health Management Associates, Inc. - Class A 5,900 122,794
<F1> Lincare Holdings, Inc. 6,000 172,125
<F1> Province Healthcare Company 4,350 173,728
<F1> Quorum Health Group, Inc. 4,850 63,050
<F1> Renal Care Group, Inc. 2,700 50,288
<F1> Sonic Innovations, Inc. 1,100 11,550
Shares/Par Market Value
---------------------------------------------------------------------------
HEALTHCARE (CONTINUED)
<F1> Sybron International Corporation 2,500 $60,000
<F1> Total Renal Care Holdings, Inc. 14,000 105,000
<F1> Universal Health Services, Inc. - Class B 1,000 85,625
<F1> Varian, Inc. 2,200 94,738
<F1> Vascular Solutions, Inc. 5,800 108,841
<F1> Wesley Jessen VisionCare, Inc. 1,500 57,656
---------------------------------------------------------------------------
TOTAL 1,451,751
---------------------------------------------------------------------------
TECHNOLOGY (4.9%)
<F1> ACT Manufacturing, Inc. 1,000 52,750
<F1> Advent Software, Inc. 1,900 132,763
<F1> Applied Materials, Inc. 687 40,748
<F1> Aspen Technology, Inc. 2,000 90,250
<F1> Autonomy Corporation PLC, ADR 3,000 165,000
<F1> Avanex Corporation 800 86,150
<F1> BARRA, Inc. 800 49,650
<F1> C-Cube Microsystems, Inc. 2,300 47,150
<F1> Comverse Technology, Inc. 2,000 216,000
<F1> Concord EFS, Inc. 5,550 197,112
<F1> Cosine Communications, Inc. 800 44,450
<F1> Cymer, Inc. 2,000 61,375
<F1> DST Systems, Inc. 1,600 188,000
<F1> GaSonics International Corporation 4,800 58,800
<F1> Getty Images, Inc. 2,200 66,963
<F1> Harmonic Inc. 988 23,712
<F1> Inet Technologies, Inc. 900 26,325
<F1> Infonautics, Inc. - Class A 400 850
<F1> JDS Uniphase Corporation 1,300 123,094
<F1> Keane, Inc. 1,600 27,840
<F1> Macromedia, Inc. 800 64,650
<F1> The Management Network Group, Inc. 2,200 45,925
<F1> MCK Communications, Inc. 2,300 52,038
<F1> Metasolv Software, Inc. 1,200 49,050
<F1> Microchip Technology Incorporated 2,400 79,350
<F1> MMC Networks, Inc. 600 75,900
<F1> Network Engines, Inc. 1,200 49,125
Paychex, Inc. 3,050 160,125
PerkinElmer, Inc. 800 83,500
<F1> Power-One, Inc. 4,600 278,372
<F1> PRI Automation, Inc. 1,800 32,850
<F1> QLogic Corporation 1,500 132,000
<F1> Rational Software Corporation 1,400 97,125
<F1> Semtech Corporation 4,800 207,000
<F1> Tellabs, Inc. 4,300 205,325
<F1> Turnstone Systems, Inc. 1,600 74,200
<F1> UTStarcom, Inc. 3,700 77,469
<F1> VeriSign, Inc. 400 81,025
---------------------------------------------------------------------------
TOTAL 3,544,011
---------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
ASSET ALLOCATION FUND
Country Shares/Par Market Value
---------------------------------------------------------------------------
TRANSPORT SERVICES (0.0%)
<F1> Decisionone Corporation 88 $495
---------------------------------------------------------------------------
TRANSPORTATION (0.4%)
C.H. Robinson Worldwide, Inc. 1,400 78,903
Expeditors International of
Washington, Inc. 2,000 90,125
<F1> Knight Transportation, Inc. 5,050 78,591
<F1> Swift Transportation Co., Inc. 1,400 18,288
---------------------------------------------------------------------------
TOTAL 265,907
---------------------------------------------------------------------------
TOTAL SMALL CAP COMMON STOCK 10,096,720
---------------------------------------------------------------------------
TOTAL DOMESTIC COMMON STOCKS AND WARRANTS
(COST $17,091,590) 26,106,329
===========================================================================
FOREIGN COMMON STOCK (9.6%)
BANK HOLDING COMPANIES (0.3%)
ABN AMRO Holding NV Netherlands 1,100 25,626
Dresdner Bank AG Germany 5,000 219,943
---------------------------------------------------------------------------
TOTAL 245,569
---------------------------------------------------------------------------
CAPITAL GOODS (0.1%)
<F1> Finmeccanica S.P.A., Italy 60,000 71,476
---------------------------------------------------------------------------
COMMUNICATION SERVICES (1.6%)
<F1> Alcatel Alsthom France 3,500 223,915
Nippon Telegraph and
Telephone Corporation Japan 9 88,284
Nokia Oyj Finland 5,000 202,604
NTT DoCoMo, Inc. Japan 100 286,878
Reuters Group PLC United Kingdom 1,000 19,058
Sonera Group Oyj Finland 2,500 63,534
<F1> Tecnomen Oyj Finland 5,000 38,606
<F1> Telefonica S.A. Spain 9,363 185,485
---------------------------------------------------------------------------
TOTAL 1,108,364
---------------------------------------------------------------------------
CONSUMER CYCLICALS (0.4%)
Buhrmann NV Netherlands 11,239 282,650
---------------------------------------------------------------------------
CONSUMER STAPLES (1.7%)
Altadis, SA. Spain 10,000 322,085
Diageo PLC United Kingdom 25,000 223,130
Koninklijke Ahold NV Netherlands 7,070 200,450
<F1> MIH Ltd. Netherlands 5,000 149,688
<F1> Nestle SA Switzerland 100 208,280
<F1> PrimaCom AG Germany 2,500 68,829
---------------------------------------------------------------------------
TOTAL 1,172,462
---------------------------------------------------------------------------
Country Shares/Par Market Value
---------------------------------------------------------------------------
ENERGY (0.7%)
<F1> British Energy - A shares United Kingdom 26,500 $0
Leica Geosystems AG Switzerland 100 31,300
Total Fina Elf S.A. France 1,520 222,653
Vestas Wind Systems A/S Denmark 4,500 229,983
---------------------------------------------------------------------------
TOTAL 483,936
---------------------------------------------------------------------------
FINANCE (1.3%)
Banco Santander Central
Hispano SA Spain 9,000 98,796
Bank Sarasin & Cie Switzerland 65 218,680
Banque Nationale de Paris France 3,400 299,724
DBS Group Holdings
Limited Singapore 8,000 88,262
HSBC Holdings PLC United Kingdom 10,500 146,789
Skandia Forsakrings AB Sweden 4,500 89,224
---------------------------------------------------------------------------
TOTAL 941,475
---------------------------------------------------------------------------
HEALTHCARE (0.2%)
<F1> QIAGEN N.V. Germany 1,556 74,145
SmithKline Beecham PLC United Kingdom 7,500 101,810
---------------------------------------------------------------------------
TOTAL 175,955
---------------------------------------------------------------------------
TECHNOLOGY (2.6%)
Canon, Inc. Japan 4,000 177,309
<F1> Epcos AG Germany 3,000 243,549
<F1> F-Secure Oyj Finland 12,500 82,065
<F1> Fantastic Corporation Switzerland 10,000 50,386
<F1> Freenet.de AG Germany 1,000 63,093
<F1> GEO Interactive Media
Group PLC United Kingdom 6,000 109,557
Pace Micro
Technology PLC United Kingdom 2,400 25,016
<F1> Perlos Oyj Finland 7,000 184,691
Philips Electronics N.V. Netherlands 8,924 384,052
<F1> PopNet Internet AG Germany 6,000 96,361
Tecan AG Switzerland 300 319,364
---------------------------------------------------------------------------
TOTAL 1,735,443
---------------------------------------------------------------------------
TRANSPORTATION (0.7%)
Porsche AG Germany 85 314,650
Railtrack Group PLC United Kingdom 12,271 200,839
---------------------------------------------------------------------------
TOTAL 515,489
---------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCK
(COST $4,731,430) 6,732,819
===========================================================================
<PAGE>
--------------------------------------------------------------------------------
M A S O N S T R E E T F U N D S
--------------------------------------------------------------------------------
ASSET ALLOCATION FUND
Shares/Par Market Value
---------------------------------------------------------------------------
PREFERRED SECURITIES (0.7%)
BANKS (0.1%)
California Federal Preferred Capital 4,000 $90,500
---------------------------------------------------------------------------
BROADCASTING (0.2%)
Crown Castle International Corp. 1,120 113,120
Sinclair Capital 500 47,500
---------------------------------------------------------------------------
TOTAL 160,620
---------------------------------------------------------------------------
PRINTING AND PUBLISHING (0.4%)
Primedia, Inc. 2,500 235,000
---------------------------------------------------------------------------
TOTAL PREFERRED SECURITIES
(COST $500,339) 486,120
===========================================================================
INVESTMENT-GRADE BONDS (31.3%)
AUTO RELATED (0.1%)
General Motors Acceptance Corporation,
7.5%, 7/15/05 100,000 101,312
---------------------------------------------------------------------------
COMMERCIAL MORTGAGES (4.9%)
Asset Securitization Corporation,
Series 1996-MD6, Class CS1,
1.6317%, 11/13/26 IO 11,020,732 256,246
Blackrock Capital Finance L.P.,
Series 1997-R3, Class B3,
7.25%, 11/25/28 (144A) 184,484 57,190
Comed Transitional Funding Trust,
Series 1998-1, Class A7,
5.74%, 12/25/10 250,000 231,298
Criimi Mae Commercial
Mortgage, Series 1998-C1, Class B,
7%, 11/2/11 339,000 281,370
Enterprise Mortgage Acceptance
Company, Series 1998-1, Class IO,
1.3704%, 1/15/23 (144A) 6,542,957 417,375
Health Care Receivables,
6.25%, 2/1/03 (144A) 125,000 122,776
Kmart CMBS Financing, Inc.,
Series 1997-1, Class B,
7.0275%, 3/1/07 (144A) 1,000,000 998,649
Midland Realty Acceptance
Corporation, Series 1996-C2,
Class AEC, 1.3534%, 1/25/29 (144A) 4,328,546 228,591
Mortgage Capital Funding, Inc.,
Series 1997-MC1, Class A3,
7.288%, 3/20/07 100,000 100,929
Peco Energy Transition Trust,
Series 1999-A, Class A7, 3/1/09 700,000 667,485
---------------------------------------------------------------------------
TOTAL 3,361,909
---------------------------------------------------------------------------
Shares/Par Market Value
---------------------------------------------------------------------------
CONSUMER STAPLES (1.5%)
Anheuser-Busch Companies, Inc.,
7%, 12/1/25 280,000 $254,897
Anheuser-Busch Companies, Inc.,
7.5%, 3/15/12 375,000 382,755
Philip Morris Companies Inc.,
7.75%, 1/15/27 500,000 445,936
---------------------------------------------------------------------------
TOTAL 1,083,588
---------------------------------------------------------------------------
ENERGY (0.7%)
Chevron Corporation, 6.625%, 10/1/04 250,000 248,534
Scottish Power PLC, 5.65%, 11/1/06 300,000 276,794
---------------------------------------------------------------------------
TOTAL 525,328
---------------------------------------------------------------------------
FEDERAL GOVERNMENT AND AGENCIES (19.0%)
Aid-Israel, 0%, 11/1/24 1,000,000 209,389
Federal National Mortgage
Association, 6%, 5/1/11 847,210 825,403
Government National Mortgage
Association, 8%, 8/15/26 141,997 144,893
Government National Mortgage
Association, 8%, 10/15/26 322,143 328,712
Government National Mortgage
Association, 8%, 7/15/27 68,833 70,185
U.S. Treasury, 4.875%, 3/31/01 770,000 764,466
U.S. Treasury, 5%, 4/30/01 1,250,000 1,240,625
U.S. Treasury, 5.25%, 5/15/04 100,000 97,844
U.S. Treasury, 5.75%, 8/15/10 233,000 232,054
U.S. Treasury, 5.875%, 11/15/04 3,300,000 3,296,907
U.S. Treasury, 6%, 8/15/09 559,000 561,271
U.S. Treasury, 6.125%, 8/15/29 480,000 490,200
U.S. Treasury, 6.5%, 5/15/05 700,000 717,500
U.S. Treasury, 6.5%, 2/15/10 1,172,000 1,220,345
U.S. Treasury, 6.75%, 5/15/05 1,645,000 1,704,118
U.S. Treasury, 7.5%, 2/15/05 640,000 679,000
U.S. Treasury Inflation Index Bond,
3.875%, 4/15/29 152,109 156,561
U.S. Treasury Inflation Index Bond,
6.25%, 5/15/30 200,000 210,250
U.S. Treasury Strips, 0%, 2/15/19 1,200,000 392,303
---------------------------------------------------------------------------
TOTAL 13,342,026
---------------------------------------------------------------------------
FINANCE (0.7%)
Bank One Corporation, 8%, 4/29/27 500,000 499,363
---------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
ASSET ALLOCATION FUND
Shares/Par Market Value
---------------------------------------------------------------------------
GENERAL MERCHANDISE STORES (1.6%)
The Home Depot, Inc., 6.5%, 9/15/04 600,000 $596,053
Wal-Mart Stores, Inc., 6.55%, 8/10/04 150,000 149,705
Wal-Mart Stores, Inc., 6.875%, 8/1/02 350,000 351,200
Wal-Mart Stores, Inc., 6.875%, 8/10/09 50,000 49,373
---------------------------------------------------------------------------
TOTAL 1,146,331
---------------------------------------------------------------------------
HEALTHCARE (1.5%)
Johnson & Johnson, 6.625%, 9/1/09 250,000 245,414
Merck & Co., Inc. 5.95%, 12/1/28 938,000 798,838
---------------------------------------------------------------------------
TOTAL 1,044,252
---------------------------------------------------------------------------
MISCELLANEOUS (0.1%)
Security Cap U.S. Realty,
2%, 5/22/03 (144A) 100,000 84,500
---------------------------------------------------------------------------
PUBLISHING (0.4%)
Times Mirror Company, 7.45%, 10/15/09 300,000 299,321
---------------------------------------------------------------------------
TRANSPORTATION (0.8%)
United Parcel Service, 8.375%, 4/1/20 500,000 553,086
---------------------------------------------------------------------------
TOTAL INVESTMENT-GRADE BONDS
(COST $22,141,911) 22,041,016
===========================================================================
BELOW INVESTMENT-GRADE BONDS (8.5%)
BASIC MATERIALS (0.3%)
METALS & MINING (0.3%)
Glencore Nickel, LTD, 9%, 12/1/14 50,000 41,438
Great Central Mines, Ltd., 8.875%, 4/1/08 100,000 86,499
USEC Inc., 6.625%, 1/20/06 100,000 82,895
---------------------------------------------------------------------------
TOTAL 210,832
---------------------------------------------------------------------------
PAPER (0.0%)
APP China Group Ltd.,
14%, 3/15/10 (144A) 50,000 23,000
---------------------------------------------------------------------------
TOTAL BASIC MATERIALS 233,832
---------------------------------------------------------------------------
CAPITAL GOODS (0.2%)
Building One Services, 10.5%, 5/1/09 50,000 43,813
Integrated Electrical Services, Series B,
9.375%, 2/1/09 50,000 45,125
United Rentals, Inc., 8.8%, 8/15/08 50,000 43,750
---------------------------------------------------------------------------
TOTAL CAPITAL GOODS 132,688
---------------------------------------------------------------------------
CONSUMER CYCLICALS (1.4%)
APPAREL, TEXTILE (0.0%)
Tommy Hilfiger, 6.85%, 6/1/08 50,000 33,451
---------------------------------------------------------------------------
Shares/Par Market Value
---------------------------------------------------------------------------
AUTO & TRUCKS (0.1%)
Avis Group Holdings, Inc., 11%, 5/1/09 50,000 $54,250
Budget Group, Inc., 9.125%, 4/1/06 50,000 36,000
---------------------------------------------------------------------------
TOTAL 90,250
---------------------------------------------------------------------------
AUTO RELATED (0.1%)
Tower Automotive, Inc., 5%, 8/1/04 100,000 79,500
---------------------------------------------------------------------------
HOME CONSTRUCTION (0.1%)
Lennar Corporation, 9.95%, 5/1/10 50,000 51,375
---------------------------------------------------------------------------
HOUSEHOLD APPLIANCES (0.1%)
Rent-A-Center, Inc., 11%, 8/15/08 50,000 49,500
---------------------------------------------------------------------------
LEISURE RELATED (0.2%)
Bally Total Fitness Holdings, Series D,
9.875%, 10/15/07 50,000 47,500
Royal Caribbean Cruises Ltd.,
6.75%, 3/15/08 50,000 43,365
Royal Caribbean Cruises Ltd.,
7%, 10/15/07 68,000 60,363
---------------------------------------------------------------------------
TOTAL 151,228
---------------------------------------------------------------------------
LODGING/RESORTS (0.2%)
Felcor Lodging LP, 9.5%, 9/15/08 (144A) 100,000 99,250
John Q. Hammons Hotels, Inc.,
8.875%, 2/15/04 50,000 47,500
---------------------------------------------------------------------------
TOTAL 146,750
---------------------------------------------------------------------------
PRINTING & PUBLISHING (0.5%)
Jostens, Inc., 12.75%, 5/1/10 (144A) 50,000 51,500
Mail-Well, Inc., 5%, 11/1/02 149,000 116,964
Ziff Davis Media, 12%, 7/15/10 (144A) 100,000 99,000
---------------------------------------------------------------------------
TOTAL 267,464
---------------------------------------------------------------------------
RETAIL - GENERAL (0.1%)
Buhrmann US, Inc., 12.25%, 11/1/09 100,000 103,500
---------------------------------------------------------------------------
TOTAL CONSUMER CYCLICALS 973,018
---------------------------------------------------------------------------
CONSUMER STAPLES (0.8%)
DRUGS (0.1%)
ICN Pharmaceuticals, Inc.,
8.75%, 11/15/08 (144A) 50,000 49,875
---------------------------------------------------------------------------
FOOD SERVICE (0.1%)
Host Marriot LP, 8.375%, 2/15/06 100,000 96,000
---------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
M A S O N S T R E E T F U N D S
--------------------------------------------------------------------------------
ASSET ALLOCATION FUND
Shares/Par Market Value
---------------------------------------------------------------------------
GAMING (0.3%)
Hollywood Casino Corporation,
13%, 8/1/06 55,000 $58,850
Jupiters Limited, 8.5%, 3/1/06 50,000 48,000
Mandalay Resort Group,
9.5%, 8/1/08 (144A) 100,000 102,000
---------------------------------------------------------------------------
TOTAL 208,850
---------------------------------------------------------------------------
HEALTHCARE (0.3%)
Hanger Orthopedic Group, Inc.,
11.25%, 6/15/09 50,000 44,250
HEALTHSOUTH Corporation,
3.25%, 4/1/03 50,000 41,625
HEALTHSOUTH Corporation,
10.75, 10/1/08 (144A) 50,000 50,145
Renal Treatment Centers, Inc.,
5.625%, 7/15/06 75,000 54,375
---------------------------------------------------------------------------
TOTAL 190,395
---------------------------------------------------------------------------
TOTAL CONSUMER STAPLES 545,120
---------------------------------------------------------------------------
ENERGY (0.9%)
COAL (0.1%)
P&L Coal Holdings Corporation,
8.785%, 5/15/08 50,000 49,375
---------------------------------------------------------------------------
ENERGY (0.7%)
Amerada Hess Corporation,
7.875%, 10/1/29 250,000 249,064
Tosco Corporation, 8.125%, 2/15/30 250,000 252,523
---------------------------------------------------------------------------
TOTAL 501,587
---------------------------------------------------------------------------
REFINING (0.1%)
Conproca S.A., 12%, 6/16/10 (144A) 50,000 54,000
---------------------------------------------------------------------------
TOTAL ENERGY 604,962
---------------------------------------------------------------------------
FINANCE (1.3%)
BANKS (0.2%)
Sovereign Bancorp, 10.5%, 11/15/06 50,000 50,875
Sovereign Real Estate Investment Trust,
12%, 8/29/49 (144A) 100,000 89,500
---------------------------------------------------------------------------
TOTAL 140,375
---------------------------------------------------------------------------
FINANCE COMPANIES (0.9%)
EOP Operating LP, 8.1%, 8/1/10 250,000 251,517
Metris Companies, Inc., 10.125%, 7/15/06 100,000 96,000
PDVSA Finance Ltd. 1999-I,
9.75%, 2/15/10 100,000 100,750
Post Apartment Homes, 8.125%, 6/15/05 250,000 253,939
---------------------------------------------------------------------------
TOTAL 702,206
---------------------------------------------------------------------------
Shares/Par Market Value
---------------------------------------------------------------------------
FINANCIAL SERVICES (0.1%)
Labranche & Company Inc., 12%, 3/2/07 50,000 $53,500
---------------------------------------------------------------------------
INSURANCE (0.1%)
Willis Corroon Corp., 9%, 2/1/09 50,000 46,125
---------------------------------------------------------------------------
TOTAL FINANCE 942,206
---------------------------------------------------------------------------
MISCELLANEOUS (0.3%)
R.E.I.T. (0.1%)
Macerich Company,
7.25%, 12/15/02 (144A) 50,000 43,938
---------------------------------------------------------------------------
REAL ESTATE (0.2%)
Crescent Real Estate, 7%, 9/15/02 50,000 46,998
Crescent Real Estate Equities,
7.5%, 9/15/07 50,000 42,066
JDN Realty Corporation, 6.95%, 8/1/07 60,000 45,913
---------------------------------------------------------------------------
TOTAL 134,977
---------------------------------------------------------------------------
TOTAL MISCELLANEOUS 178,915
---------------------------------------------------------------------------
TECHNOLOGY (2.0%)
BROADCASTING (0.2%)
Echostar Broadband Corp.,
10.375%, 10/1/07 (144A) 50,000 49,750
XM Satellite Radio Holdings Inc.,
14%, 3/15/10 (144A) 100,000 70,000
---------------------------------------------------------------------------
TOTAL 119,750
---------------------------------------------------------------------------
CABLE (0.6%)
Adelphia Communications,
10.875%, 10/1/10 50,000 49,000
<F2> Charter Communications Holdings, LLC,
9.92%, 4/1/11 50,000 29,250
<F2> Charter Communications Holdings, LLC,
11.75%, 1/15/10 50,000 29,000
Ekabel Hessen Gmbh,
14.5%, 9/1/10, (144A) 50,000 50,000
NTL Communications Corp.,
11.5%, 10/1/08 100,000 96,500
<F2> NTL, Inc., 9.75%, 4/1/08 50,000 30,500
Telewest Communications PLC,
9.875%, 2/1/10 (144A) 50,000 45,750
<F2> United Global Communications, Inc.,
Series B, 1.75%, 2/15/08 100,000 68,500
United Pan-Europe Communications N.V.,
10.875%, 8/1/09 50,000 42,500
---------------------------------------------------------------------------
TOTAL 441,000
---------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
ASSET ALLOCATION FUND
Shares/Par Market Value
---------------------------------------------------------------------------
TELECOMMUNICATIONS (1.2%)
Adelphia Business Solutions, Inc.,
12.25%, 9/1/04 100,000 $90,500
Arch Communications, 13.75%, 4/15/08 100,000 70,750
Dobson Communications Corporation,
10.875%, 7/1/10 50,000 48,875
Dobson/Sygnet Communications,
12.25%, 12/15/08 50,000 49,875
Exodus Communications, Inc.,
11.625%, 7/15/10 (144A) 50,000 50,125
FLAG Telecom Holdings Limited,
11.625%, 3/30/10 50,000 42,750
<F2> GT Group Telecom Inc.,
13.25%, 2/1/10 100,000 43,000
<F2> Horizon PCS Inc., Step - Unit,
14%, 10/1/10 (144A) 50,000 25,500
KMC Telecommunications Hldgs,
13.5%, 5/15/09 100,000 69,000
Level 3 Communications, Inc.,
11%, 3/15/08 50,000 47,750
<F2> Nextel Communications, Inc.,
9.95%, 2/15/08 50,000 38,250
Nextel Communications, Inc.,
9.375%, 11/15/09 50,000 48,875
Nextlink Communications, Inc.,
10.75%, 6/1/09 100,000 92,500
TeleCorp PCS, Inc., 10.625%,
7/15/10 (144A) 100,000 100,999
Williams Communications Group,
10.875%, 10/1/09 50,000 45,750
Williams Communications Group,
11.7%, 8/1/08, (144A) 50,000 47,750
---------------------------------------------------------------------------
TOTAL 912,249
---------------------------------------------------------------------------
TOTAL TECHNOLOGY 1,472,999
---------------------------------------------------------------------------
TRANSPORT SERVICES (0.5%)
PROFESSIONAL SERVICES (0.1%)
Interim Services, 4.5%, 6/1/05 100,000 66,125
---------------------------------------------------------------------------
RAILROADS (0.1%)
Kansas City Southern Railway,
9.5%, 10/1/08 (144A) 50,000 50,375
Railamerica Transportation Corp.,
12.875%, 8/15/10 (144A) 50,000 47,375
---------------------------------------------------------------------------
TOTAL 97,750
---------------------------------------------------------------------------
Shares/Par Market Value
---------------------------------------------------------------------------
TRUCKING & SHIPPING (0.3%)
North American Van Lines,
13.375%, 12/1/09 (144A) 100,000 $92,000
Stena AB, 8.75%, 6/15/07 50,000 43,250
Ventura Group Inc., Series B,
10.25%, 6/30/08 50,000 42,500
---------------------------------------------------------------------------
TOTAL 177,750
---------------------------------------------------------------------------
TOTAL TRANSPORT SERVICES 341,625
---------------------------------------------------------------------------
UTILITIES (0.8%)
UTILITY - ELECTRIC (0.3%)
AES Corporation, 9.375%, 9/15/10 100,000 101,500
Orion Power Holdings Inc.,
12%, 5/1/10 (144A) 100,000 107,000
---------------------------------------------------------------------------
TOTAL 208,500
---------------------------------------------------------------------------
UTILITY - GARBAGE DISPOSAL (0.3%)
Allied Waste North America, Inc.,
7.625%, 1/1/06 50,000 44,750
Allied Waste North America, Inc.,
7.875%, 1/1/09 50,000 43,625
IT Group, Series B, 11.25%, 4/1/09 50,000 43,750
Waste Management, Inc., 4%, 2/1/02 50,000 46,438
Waste Management, Inc., 7.125%, 10/1/07 50,000 46,606
---------------------------------------------------------------------------
TOTAL 225,169
---------------------------------------------------------------------------
UTILITY - GAS (0.1%)
EOTT Energy Partners, L.P., 11%, 10/1/09 50,000 52,750
---------------------------------------------------------------------------
UTILITY - WATER (0.1%)
Azurix Corp., 10.75%, 2/15/10 (144A) 50,000 46,000
---------------------------------------------------------------------------
TOTAL UTILITIES 532,419
---------------------------------------------------------------------------
TOTAL BELOW INVESTMENT-GRADE BONDS
(COST $6,095,830) 5,957,784
===========================================================================
OTHER SECURITIES (0.0%)
TECHNOLOGY (0.0%)
BROADCASTING (0.0%)
XM Satellite Radio Inc. 100 14,000
---------------------------------------------------------------------------
TELECOMMUNICATIONS (0.0%)
GT Group Telecom Inc. 100 8,000
<F1> KMC Telecom Holdings Inc. 250 500
---------------------------------------------------------------------------
TOTAL 8,500
---------------------------------------------------------------------------
TOTAL OTHER SECURITIES
(COST $57,815) 22,500
===========================================================================
<PAGE>
--------------------------------------------------------------------------------
M A S O N S T R E E T F U N D S
--------------------------------------------------------------------------------
ASSET ALLOCATION FUND
Shares/Par Market Value
---------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (12.7%)
ASSET-BACKED SECURITIES (CMO'S) (1.4%)
Asset Securitization, 6.49%, 11/15/00 1,000,000 $992,068
---------------------------------------------------------------------------
CAPTIVE FINANCE COMPANIES (1.7%)
Daimler-Chrysler N.A. Holdings,
6.5%, 10/30/00 1,200,000 1,193,933
---------------------------------------------------------------------------
FEDERAL AND FEDERALLY-SPONSORED CREDIT (0.7%)
Federal National Mortgage Association,
6.39%, 11/30/00 500,000 494,540
---------------------------------------------------------------------------
FINANCE LESSORS (1.8%)
<F3> Philip Morris Capital Company,
6.49%, 11/15/00 1,300,000 1,289,688
---------------------------------------------------------------------------
FINANCE SERVICES (1.8%)
<F3> Citicorp, 6.53%, 10/25/00 1,300,000 1,294,576
---------------------------------------------------------------------------
PERSONAL CREDIT INSTITUTIONS (3.9%)
<F3> CIT Group, Inc., 6.5%, 11/16/00 1,100,000 1,091,063
<F3> General Electric Capital Corp.,
6.69%, 10/2/00 300,000 300,000
<F2> Variable Funding Capital,
6.51%, 11/9/00 1,300,000 1,291,067
---------------------------------------------------------------------------
TOTAL 2,682,130
---------------------------------------------------------------------------
SHORT-TERM BUSINESS CREDIT (1.4%)
American Express Credit,
6.49%, 10/27/00 1,000,000 995,493
---------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(COST $8,942,652) 8,942,428
===========================================================================
TOTAL INVESTMENTS (99.7%)
(COST $59,561,567)<F4> 70,288,996
===========================================================================
OTHER ASSETS, LESS LIABILITIES (0.3%) 177,213
===========================================================================
TOTAL NET ASSETS (100.0%) $70,466,209
===========================================================================
ADR - American Depository Receipt
<F1> Non-Income Producing
<F2> Step bond security that presently receives no coupon payments. At the
predetermined date the stated coupon rate becomes effective.
<F3> Partially held in a segregated account as collateral for open futures
positions. Information regarding open futures contracts as of period
end is summarized below.
Unrealized
Number of Expiration Appreciation/
Issuers Contracts Date (Depreciation)
--------------------------------------------------------------------------------
S&P 500/R Stock Index
(Total notional value at
9/30/00, $3,840,225) 10 12/00 $(205,975)
US Treasury Bond
(Total notional value at
9/30/00, $985,625) 10 12/00 $(938)
<F4> At September 30, 2000, the aggregate cost of securities for federal tax
purposes was $59,561,567 and the net unrealized appreciation of investments
based on that cost was $10,727,429 which is comprised of $12,821,578
aggregate gross unrealized appreciation and $2,094,149 aggregate gross
unrealized depreciation.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
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: $40.9 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.
The Fund performed significantly better than its benchmark, the Lehman Brothers
High Yield Intermediate Market Index, for the quarter and the 12 months ended
September 2000. As an asset class, however, high yield bonds continue to provide
lower returns than investment-grade bonds, as prices of high yield bonds have
been held down by several factors. A relatively high level of defaults of bonds
issued two to four years ago, when the market was very bullish and credit
standards became somewhat lax, has made investors wary. A tightening Fed has put
pressure on bond prices already hurt by limited demand from investors. On the
positive side, volatility has been less than in the equity market. The current
wide yield spreads should allow high yield bonds to perform better in the months
ahead.
In this rather difficult environment, the High Yield Bond Fund has benefited
from careful selection of individual securities and a bias toward high quality:
almost 10% of holdings are rated investment grade by either Moody's or S&P, the
two major rating services. The Fund has experienced no defaults since November
1999. Performance has been boosted by several positive credit events, including
the acquisitions of issuers of several bonds in the portfolio by larger,
stronger companies. The Fund's industry mix is conservative: the emphasis is on
industries with positive fundamentals, including broadcasting, utilities, hotels
and casinos, and printing and publishing; holdings in highly cyclicals
industries such as paper, autos and steel are minimal. The quality level and
industry mix position the Fund well to withstand any economic slowdown that may
develop, while broad diversification reduces the impact of volatility in
individual issues.
SECTOR ALLOCATION
9/30/00
--------------------------------------------------------
Broadcasting/Media/Cable TV 16%
Technology/Telecommunications 14%
Basic Materials/Capital Goods/Energy 11%
Lodging/Leisure/Food Service 9%
Utilities 9%
Cash Equivalents 9%
Consumer/Healthcare 9%
Finance 8%
Real Estate/REIT 7%
Other Industries 5%
Printing/Publishing 3%
<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
HIGH YIELD LEHMAN BROTHERS
BOND FUND HIGH YIELD
HIGH YIELD HIGH YIELD CLASS B INTERMEDIATE
BOND FUND BOND FUND REDEMPTION MARKET
CLASS A CLASS B VALUE INDEX
-----------------------------------------------------------------------------
3/31/97 9,524 10,000 10,000
9/30/97 11,082 11,595 10,886
3/31/98 11,710 12,209 11,447
9/30/98 10,573 10,987 10,992
3/31/99 10,788 11,161 11,449
9/30/99 10,867 11,205 11,342
3/31/00 10,801 11,101 11,252
9/30/00 11,071 11,340 11,108 11,429
TOTAL RETURN Average
Annual
One Since
For the periods ended September 30, 2000 Year Inception<F1>
--------------------------------------------------------------------------------
High Yield Bond Fund
(Class A - without initial sales charge) 1.88% 4.39%
--------------------------------------------------------------------------------
Lehman Brothers High Yield
Intermediate Market Index 0.77% 3.89%
--------------------------------------------------------------------------------
<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 an applicable contingent deferred sales charge for Class B.
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 (85.3%)
BASIC MATERIALS (3.8%)
METALS & MINING (3.5%)
Centaur Mining & Exploration
Limited, 11%, 12/1/07 100,000 $63,000
Glencore Nickel, Ltd, 9%, 12/1/14 300,000 248,625
Great Central Mines, Ltd., 8.875%, 4/1/08 700,000 605,500
USEC Inc., 6.625%, 1/20/06 600,000 497,368
---------------------------------------------------------------------------
TOTAL 1,414,493
---------------------------------------------------------------------------
PAPER (0.3%)
APP China Group Ltd.,
14%, 3/15/10 (144A) 300,000 138,000
---------------------------------------------------------------------------
TOTAL BASIC MATERIALS 1,552,493
---------------------------------------------------------------------------
CAPITAL GOODS (2.5%)
Building One Services, 10.5%, 5/1/09 450,000 394,313
Integrated Electrical Services,
Series B, 9.375%, 2/1/09 400,000 361,000
United Rentals, Inc., 8.8%, 8/15/08 300,000 262,500
---------------------------------------------------------------------------
TOTAL CAPITAL GOODS 1,017,813
---------------------------------------------------------------------------
CONSUMER CYCLICALS (15.2%)
APPAREL, TEXTILE (0.5%)
Tommy Hilfiger U.S.A., 6.85%, 6/1/08 300,000 200,703
---------------------------------------------------------------------------
AUTO AND TRUCKS (1.2%)
Avis Group Holdings, Inc., 11%, 5/1/09 300,000 325,500
Budget Group Inc., 9.125%, 4/1/06 250,000 180,000
---------------------------------------------------------------------------
TOTAL 505,500
---------------------------------------------------------------------------
AUTO RELATED (1.3%)
Tower Automotive, Inc., 5%, 8/1/04 650,000 516,750
---------------------------------------------------------------------------
HOME CONSTRUCTION (0.9%)
Lennar Corporation,
9.95%, 5/1/10 350,000 359,625
---------------------------------------------------------------------------
HOUSEHOLD APPLIANCES (0.6%)
Rent-A-Center, Inc., 11%, 8/15/08 250,000 247,500
---------------------------------------------------------------------------
LEISURE RELATED (2.4%)
Bally Total Fitness Holdings,
Series D, 9.875%, 10/15/07 500,000 475,000
Royal Caribbean Cruises Ltd.,
6.75%, 3/15/08 450,000 390,282
Royal Caribbean Cruises Ltd.,
7%, 10/15/07 150,000 133,154
---------------------------------------------------------------------------
TOTAL 998,436
---------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
HIGH YIELD BOND FUND
Shares/Par Market Value
---------------------------------------------------------------------------
LODGING/RESORTS (2.4%)
Felcor Lodging LP,
9.5%, 9/15/08 (144A) 450,000 $446,625
John Q. Hammons Hotels, Inc.,
8.875%, 2/15/04 200,000 190,000
Starwood Hotels & Resorts,
7.375%, 11/15/15 400,000 357,874
---------------------------------------------------------------------------
TOTAL 994,499
---------------------------------------------------------------------------
PRINTING AND PUBLISHING (3.4%)
Jostens, Inc., 12.75%, 5/1/10 (144A) 250,000 257,500
Mail-Well, Inc., 5%, 11/1/02 800,000 627,999
Marvel Enterprises, Inc., 12%, 6/15/09 100,000 80,250
Ziff Davis Media, 12%, 7/15/10 (144A) 400,000 396,000
---------------------------------------------------------------------------
TOTAL 1,361,749
---------------------------------------------------------------------------
RETAIL - GENERAL (2.5%)
Buhrmann US, Inc., 12.25%, 11/1/09 600,000 621,000
Coinmach Corporation,
11.75%, 11/15/05 400,000 400,000
---------------------------------------------------------------------------
TOTAL 1,021,000
---------------------------------------------------------------------------
TOTAL CONSUMER CYCLICALS 6,205,762
---------------------------------------------------------------------------
CONSUMER STAPLES (9.1%)
DRUGS (0.8%)
ICN Pharmaceuticals, Inc.,
8.75%, 11/15/08 (144A) 200,000 199,500
ICN Pharmaceuticals, Inc.,
9.25%, 08/15/05 150,000 147,750
---------------------------------------------------------------------------
TOTAL 347,250
---------------------------------------------------------------------------
FOOD SERVICE (0.5%)
Host Marriot L.P., 8.375%, 2/15/06 200,000 192,000
---------------------------------------------------------------------------
GAMING (3.6%)
Hollywood Casino Corporation,
13%, 8/1/06 500,000 535,000
Jupiters Limited, 8.5%, 3/1/06 250,000 240,000
Mandalay Resort Group,
7.625%, 7/15/13 450,000 373,500
Mandalay Resort Group,
9.5%, 8/1/08 (144A) 300,000 306,000
---------------------------------------------------------------------------
TOTAL 1,454,500
---------------------------------------------------------------------------
Shares/Par Market Value
---------------------------------------------------------------------------
HEALTHCARE (4.2%)
Hanger Orthopedic Group, Inc.,
11.25%, 6/15/09 400,000 $354,000
---------------------------------------------------------------------------
HEALTHSOUTH Corporation,
3.25%, 4/1/03 550,000 457,875
---------------------------------------------------------------------------
HEALTHSOUTH Corporation,
10.75%, 10/1/08 (144A) 500,000 501,452
Renal Treatment Centers, Inc.,
5.625%, 7/15/06 300,000 217,500
Total Renal Care Holdings, Inc.,
7%, 5/15/09 250,000 177,500
---------------------------------------------------------------------------
TOTAL 1,708,327
---------------------------------------------------------------------------
TOTAL CONSUMER STAPLES 3,702,077
---------------------------------------------------------------------------
ENERGY (2.5%)
COAL (0.6%)
P&L Coal Holdings Corporation,
8.785%, 5/15/08 250,000 246,875
---------------------------------------------------------------------------
REFINING (1.9%)
Conproca S.A., 12%, 6/16/10 (144A) 300,000 324,000
PDV America, Inc., 7.875%, 8/1/03 450,000 432,143
---------------------------------------------------------------------------
TOTAL 756,143
---------------------------------------------------------------------------
TOTAL ENERGY 1,003,018
---------------------------------------------------------------------------
FINANCE (7.2%)
BANKS (2.0%)
Sovereign Bancorp, 10.5%, 11/15/06 500,000 508,750
Sovereign Real Estate Investment
Trust, 12%, 8/29/49 (144A) 350,000 313,250
---------------------------------------------------------------------------
TOTAL 822,000
---------------------------------------------------------------------------
FINANCE COMPANIES (3.6%)
Metris Companies, Inc.,
10.125%, 7/15/06 800,000 768,000
PDVSA Finance Ltd. 1999-i,
9.75%, 2/15/10 700,000 705,250
---------------------------------------------------------------------------
TOTAL 1,473,250
---------------------------------------------------------------------------
FINANCIAL SERVICES (0.9%)
Labranche & Company Inc.,
12%, 3/2/07 350,000 374,500
---------------------------------------------------------------------------
<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
---------------------------------------------------------------------------
INSURANCE (0.7%)
Willis Corroon Corp., 9%, 2/1/09 300,000 $276,750
---------------------------------------------------------------------------
TOTAL FINANCE 2,946,500
---------------------------------------------------------------------------
MISCELLANEOUS (5.7%)
R.E.I.T. (2.6%)
Macerich Company,
7.25%, 12/15/02 (144A) 550,000 483,313
Security Cap U.S. Realty,
2%, 5/22/03 (144A) 700,000 591,500
---------------------------------------------------------------------------
TOTAL 1,074,813
---------------------------------------------------------------------------
REAL ESTATE (3.1%)
Crescent Real Estate Equities,
7%, 9/15/02 300,000 281,992
Crescent Real Estate Equities,
7.5%, 9/15/07 950,000 799,254
JDN Realty Corporation, 6.95%, 8/1/07 250,000 191,303
---------------------------------------------------------------------------
TOTAL 1,272,549
---------------------------------------------------------------------------
TOTAL MISCELLANEOUS 2,347,362
---------------------------------------------------------------------------
TECHNOLOGY (24.8%)
BROADCASTING (2.5%)
CD Radio Inc., 14.5%, 5/15/09 250,000 221,875
Crown Castle International Corp.,
10.75%, 8/1/11 250,000 256,875
Echostar Broadband Corp.,
10.375%, 10/1/07 (144A) 300,000 298,500
XM Satellite Radio Holdings Inc.,
14%, 3/15/10 (144A) 350,000 245,000
---------------------------------------------------------------------------
TOTAL 1,022,250
---------------------------------------------------------------------------
CABLE (8.8%)
Adelphia Communications,
10.875%, 10/1/10 500,000 490,000
Charter Communications
Holdings, LLC, 8.625%, 4/1/09 200,000 179,500
<F2> Charter Communications
Holdings, LLC, 9.92%, 4/1/11 200,000 117,000
<F2> Charter Communications
Holdings, LLC, 11.75%, 1/15/10 200,000 116,000
Ekabel Hessen Gmbh,
14.5%, 9/1/10 (144A) 400,000 400,000
NTL Communications Corp.,
11.5%, 10/1/08 600,000 579,000
<F2> NTL, Inc., 9.75%, 4/1/08 750,000 457,500
<F2> Telewest Communications PLC,
9.25%, 4/15/09 300,000 160,500
Shares/Par Market Value
---------------------------------------------------------------------------
CABLE (CONTINUED)
Telewest Communications PLC,
9.875%, 2/1/10 (144A) 100,000 $91,500
<F2> United Global Communications, Inc.,
Series B, 1.75%, 2/15/08 900,000 616,500
United Pan-Europe Communications
N.V., 10.875%, 8/1/09 350,000 297,500
<F2> United Pan-Europe Communications
N.V., 13.75%, 2/1/10 200,000 90,500
---------------------------------------------------------------------------
TOTAL 3,595,500
---------------------------------------------------------------------------
CABLE/CELLULAR/BROADCASTING (0.6%)
<F2> Airgate PCS Inc., 13.5%, 10/1/09 200,000 120,500
<F2> US Unwired Inc., 13.375%, 11/1/09 200,000 107,000
---------------------------------------------------------------------------
TOTAL 227,500
---------------------------------------------------------------------------
TELECOMMUNICATIONS (12.9%)
Adelphia Business Solutions, Inc.,
12.25%, 9/1/04 450,000 407,250
<F2> Alamosa PCS Holdings, Inc.,
12.875%, 2/15/10 200,000 108,000
Arch Communications, Inc.,
13.75%, 4/15/08 850,000 601,375
Dobson Communications Corporation,
10.875%, 7/1/10 300,000 293,250
Dobson/Sygnet Communications,
12.25%, 12/15/08 250,000 249,375
Exodus Communications, Inc.,
11.625%, 7/15/10 (144A) 400,000 401,000
FLAG Telecom Holdings Limited,
11.625%, 3/30/10 200,000 171,000
<F2> GT Group Telecom Inc.,
13.25%, 2/1/10 400,000 172,000
<F2> Horizon PCS Inc., 14%, 10/1/10 (144A) 550,000 280,500
<F2> Intermedia Communications, Inc.,
12.5%, 5/15/06 150,000 143,250
KMC Telecommunications Holdings,
13.5%, 5/15/09 450,000 310,500
Level 3 Communications, Inc.,
11%, 3/15/08 300,000 286,500
<F2> Nextel Communications, Inc.,
9.95%, 2/15/08 300,000 229,500
Nextel Communications, Inc.,
9.375%, 11/15/09 300,000 293,250
NEXTLINK Communications,
Incorporated, 10.75%, 6/1/09 250,000 231,250
TeleCorp PCS, Inc.,
10.625%, 7/15/10 (144A) 400,000 404,000
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
HIGH YIELD BOND FUND
Shares/Par Market Value
---------------------------------------------------------------------------
TELECOMMUNICATIONS (CONTINUED)
Voicestream Wireless Corporation,
10.375%, 11/15/09 100,000 $108,000
Williams Communications Group,
10.875%, 10/1/09 250,000 228,750
Williams Communications Group,
11.7%, 8/1/08 (144A) 400,000 382,000
---------------------------------------------------------------------------
TOTAL 5,300,750
---------------------------------------------------------------------------
TOTAL TECHNOLOGY 10,146,000
---------------------------------------------------------------------------
TRANSPORT SERVICES (5.4%)
PROFESSIONAL SERVICES (1.0%)
Interim Services Inc., 4.5%, 6/1/05 600,000 396,750
---------------------------------------------------------------------------
RAILROADS (1.7%)
Kansas City Southern Railway,
9.5%, 10/1/08 (144A) 300,000 302,250
Railamerica Transportation Corp.,
12.875%, 8/15/10 (144A) 400,000 379,000
---------------------------------------------------------------------------
TOTAL 681,250
---------------------------------------------------------------------------
TRUCKING - SHIPPING (2.7%)
North American Van Lines,
13.375%, 12/1/09 (144A) 500,000 460,000
Stena AB, 8.75%, 6/15/07 400,000 346,000
Vectura Group Inc., Series B,
10.25%, 6/30/08 400,000 340,000
---------------------------------------------------------------------------
TOTAL 1,146,000
---------------------------------------------------------------------------
TOTAL TRANSPORT SERVICES 2,224,000
---------------------------------------------------------------------------
UTILITIES (9.1%)
UTILITY - ELECTRIC (2.9%)
AES Corporation, 9.375%, 9/15/10 450,000 456,750
Aes Drax Energy Ltd.,
11.5%, 8/30/10 (144A) 300,000 317,250
Orion Power Holdings Inc.,
12%, 5/1/10 (144A) 400,000 428,000
---------------------------------------------------------------------------
TOTAL 1,202,000
---------------------------------------------------------------------------
UTILITY - GARBAGE DISPOSAL (4.3%)
Allied Waste North America, Inc.,
7.625%, 1/1/06 650,000 581,750
Allied Waste North America, Inc.,
7.875%, 1/1/09 400,000 349,000
Allied Waste North America, Inc.,
Series B, 10%, 8/1/09 100,000 87,250
IT Group, Series B, 11.25%, 4/1/09 300,000 262,500
Waste Management, Inc., 4%, 2/1/02 300,000 278,625
Shares/Par Market Value
---------------------------------------------------------------------------
UTILITY - GARBAGE DISPOSAL (CONTINUED)
Waste Management, Inc.,
7.125%, 10/1/07 200,000 $186,424
---------------------------------------------------------------------------
TOTAL 1,745,549
---------------------------------------------------------------------------
UTILITY - GAS (1.0%)
EOTT Energy Partners, L.P.,
11%, 10/1/09 400,000 422,000
---------------------------------------------------------------------------
UTILITY - WATER (0.9%)
Azurix Corp., 10.75%, 2/15/10 (144A) 400,000 368,000
---------------------------------------------------------------------------
TOTAL UTILITIES 3,737,549
---------------------------------------------------------------------------
TOTAL BONDS
(COST $35,680,541) 34,882,574
===========================================================================
PREFERRED STOCK (5.6%)
CONSUMER CYCLICALS (0.9%)
Primedia, Inc. 4,000 376,000
---------------------------------------------------------------------------
FINANCE (1.2%)
California Federal Preferred Capital 22,000 497,750
---------------------------------------------------------------------------
TECHNOLOGY (3.5%)
BROADCASTING (2.8%)
<F3> Crown Castle International Corp. 3,950 398,950
<F3> Cumulus Media, Inc. 5,380 414,260
Sinclair Capital 3,500 332,500
---------------------------------------------------------------------------
TOTAL 1,145,710
---------------------------------------------------------------------------
TELECOMMUNICATIONS (0.7%)
<F3> NEXTLINK Communications Incorporated 6,424 282,656
---------------------------------------------------------------------------
TOTAL TECHNOLOGY 1,428,366
---------------------------------------------------------------------------
TOTAL PREFERRED STOCK
(COST $2,565,624) 2,302,116
===========================================================================
COMMON STOCK AND WARRANTS (0.5%)
CONSUMER CYCLICALS (0.0%)
HOUSEHOLD APPLIANCES (0.0%)
<F1> Samsonite Corporation 1,250 3,750
---------------------------------------------------------------------------
LEISURE RELATED (0.0%)
<F1> Hedstrom Holdings, Inc. 67,324 673
---------------------------------------------------------------------------
TOTAL CONSUMER CYCLICALS 4,423
---------------------------------------------------------------------------
TECHNOLOGY (0.5%)
BROADCASTING (0.1%)
XM Satellite Radio Holdings Inc. 350 49,000
<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
---------------------------------------------------------------------------
TELECOMMUNICATIONS (0.4%)
GT Group Telecom Inc. 400 $32,000
<F1> KMC Telecom Holdings, Inc. 1,750 3,500
<F1> McLeodUSA Incorporated 4,107 58,780
<F1> RCN Corporation 922 19,132
<F1> Viatel, Inc. 2,840 29,110
---------------------------------------------------------------------------
TOTAL 142,522
---------------------------------------------------------------------------
TOTAL TECHNOLOGY 191,522
---------------------------------------------------------------------------
TRANSPORT SERVICES (0.0%)
<F1> Decisionone Corporation 923 5,195
---------------------------------------------------------------------------
TOTAL TRANSPORT SERVICES 5,195
---------------------------------------------------------------------------
TOTAL COMMON STOCK AND WARRANTS
(COST $1,145,163) 201,140
===========================================================================
TEMPORARY CASH INVESTMENTS (7.6%)
CAPTIVE FINANCIAL SUBSIDIARIES (1.5%)
General Electric Capital Corp.,
6.69%, 10/2/00 600,000 600,000
---------------------------------------------------------------------------
TOTAL CAPTIVE FINANCIAL SUBSIDIARIES 600,000
---------------------------------------------------------------------------
CONSUMER CYCLICALS (3.2%)
Daimler-Chrysler N.A. Holdings,
6.5%, 10/30/00 1,300,000 1,293,427
---------------------------------------------------------------------------
TOTAL CONSUMER CYCLICALS 1,293,427
---------------------------------------------------------------------------
FINANCE (2.9%)
Citicorp, 6.53%, 10/25/00 1,200,000 $1,194,994
---------------------------------------------------------------------------
TOTAL FINANCE 1,194,994
---------------------------------------------------------------------------
TOTAL TEMPORARY CASH INVESTMENTS
(COST $3,088,421) 3,088,421
===========================================================================
TOTAL INVESTMENTS (99.0%)
(COST $42,479,749)<F4> 40,474,251
===========================================================================
OTHER ASSETS, LESS LIABILITIES (1.0%) 420,899
===========================================================================
TOTAL NET ASSETS (100.0%) $40,895,150
===========================================================================
<F1> Non-Income Producing
<F2> Step Bond security that presently receives no coupon payments. At the
predetermined date the stated coupon rate becomes effective.
<F3> 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.
<F4> At September 30, 2000, the aggregate cost of securities for federal tax
purposes was $42,479,749 and the net unrealized depreciation of investments
based on that cost was $2,005,498 which is comprised of $878,422 aggregate
gross unrealized appreciation and $2,883,920 aggregate gross unrealized
depreciation.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
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: $35.6 million
--------------------------------------------------------------------------------
The Municipal Bond Fund is managed with a 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 usually 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.
The Fund continues to outperform its main benchmark, the Lehman Brothers
Municipal Bond Index, benefiting from its relatively high credit quality and a
substantial position in revenue bonds, which have performed better than general
obligation bonds during 2000. Selection of individual securities also
contributed to the strong performance. These positive factors were partially
offset by a defensive position with regard to changes in interest rates. A
slowing economy led to a decline in interest rates, driving bond prices higher.
In retrospect, an aggressive interest rate position would have been
advantageous.
During 2000 the supply of new municipal bond issues has been approximately 20%
lower than in the prior year, because of a decline in the refunding of exiting
issues. Interest rates are not low enough to encourage new bond issuance to
refund existing issues. There was substantial demand for municipal bonds from
individual buyers, who may have been motivated by the volatile stock market to
move money into less risky securities. This trend was especially pronounced in
California, where some profits from technology stocks appeared to move into the
municipal bond market. Property and casualty companies have been net sellers of
tax-exempt bonds in recent months. On a risk-adjusted basis, bonds maturing in
five to ten years outperformed bonds maturing in more than ten years, since the
largest buyers during the period, individual investors, tend to focus in the
five to ten year range.
The Fund benefited from an underweighted position in hospital and below
investment-grade bonds, as these categories underperformed the market. However,
performance was boosted by one large holding of a below investment-grade
hospital bond, which was selling at a significant discount until it was refunded
at par when the issuer merged with a stronger hospital system.
<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
9/30/00
--------------------------------------------------------
Insured Bonds 43%
Revenue Bonds 31%
Bonds with Other Credit Support 12%
Pre-refunded Bonds 10%
General Obligation Bonds 4%
<PAGE>
--------------------------------------------------------------------------------
M A S O N S T R E E T F U N D S
--------------------------------------------------------------------------------
MUNICIPAL BOND FUND
PERFORMANCE RELATIVE TO LEHMAN BROTHERS
MUNICIPAL
BOND FUND LEHMAN BROTHERS
MUNICIPAL MUNICIPAL CLASS B MUNICIPAL
BOND FUND BOND FUND REDEMPTION BOND
CLASS A CLASS B VALUE INDEX
---------------------------------------------------------------------------
3/31/97 9,524 10,000 10,000
9/30/97 10,263 10,735 10,656
3/31/98 10,641 11,093 11,071
9/30/98 11,118 11,552 11,584
3/31/99 11,324 11,728 11,758
9/30/99 11,064 11,420 11,503
3/31/00 11,313 11,639 11,747
9/30/00 11,810 12,111 11,811 12,214
TOTAL RETURN Average
Annual
One Since
For the periods ended September 30, 2000 Year Inception<F1>
--------------------------------------------------------------------------------
Municipal Bond Fund
(Class A - without initial sales charge) 6.75% 6.34%
--------------------------------------------------------------------------------
Lehman Brothers Municipal
Bond Index 6.17% 5.87%
--------------------------------------------------------------------------------
<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, 2000 the
index included 39,196 issues totaling over $720 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 an applicable contingent deferred sales charge for Class B.
SCHEDULE OF INVESTMENTS
Shares/Par Market Value
---------------------------------------------------------------------------
REVENUE BOND (90.1%)
MUNICIPAL BONDS - REVENUE (90.1%)
ARIZONA (2.0%)
Maricopa County, Arizona Pollution
Control Corp., 5.5%, 5/1/29 RB 700,000 $700,000
---------------------------------------------------------------------------
CALIFORNIA (5.9%)
California Housing Financing Agency,
5.75%, 2/1/29 RB, MBIA, AMT 1,000,000 1,001,970
Sacramento County, California
Sanitation District, 6%, 12/1/15 RB 1,000,000 1,097,970
---------------------------------------------------------------------------
TOTAL 2,099,940
---------------------------------------------------------------------------
CONNECTICUT (3.3%)
Hartford, Connecticut Package
System, 6.4%, 7/1/20 RB 1,170,000 1,175,745
---------------------------------------------------------------------------
FLORIDA (2.5%)
Lee County, Florida Water & Sewer,
4.75%, 10/1/23 RB, AMBAC 1,000,000 872,710
---------------------------------------------------------------------------
GEORGIA (3.3%)
Cartersville Development Authority
Water & Waste Facility,
7.4%, 11/1/10 RB, AMT 1,000,000 1,171,900
---------------------------------------------------------------------------
ILLINOIS (9.9%)
Chicago, Illinois O'Hare International
Airport, 5.7%, 1/1/08 RB,
MBIA, AMT 1,000,000 1,026,260
Illinois State Sales Tax,
6.375%, 6/15/17 RB 1,450,000 1,529,808
Metropolitan Fair & Exposition
Illinois, 5%, 6/1/15 RB, BIGI 1,000,000 951,470
---------------------------------------------------------------------------
TOTAL 3,507,538
---------------------------------------------------------------------------
INDIANA (0.3%)
Indiana State Toll Financial Authority,
6%, 7/1/15 RB 100,000 100,030
---------------------------------------------------------------------------
IOWA (2.8%)
Iowa Finance Authority, Hospital
Authority, 5.875%, 2/15/20
RB, AMBAC 1,000,000 1,009,200
---------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
MUNICIPAL BOND FUND
Shares/Par Market Value
---------------------------------------------------------------------------
KENTUCKY (9.0%)
Kentucky Higher Education Student
Loan Corp., 5.15%, 6/1/02
RB, GTD STD LNS 1,130,000 $1,140,091
Louisville & Jefferson County,
Kentucky Regional Airport
Authority, 6.5%, 7/1/17
RB, MBIA, AMT 1,000,000 1,073,100
Russell County, Kentucky School
District Finance Corp.,
5.6%, 3/1/18 RB 520,000 524,560
Russell County, Kentucky School
District Finance Corp.,
5.6%, 3/1/19 RB 465,000 467,902
---------------------------------------------------------------------------
TOTAL 3,205,653
---------------------------------------------------------------------------
MAINE (3.0%)
Regional Waste System Inc.,
Maine Solid Waste Res Recovery,
6.25%, 7/1/11 RB, AMT 1,000,000 1,056,160
---------------------------------------------------------------------------
NEBRASKA (2.8%)
Nebraska Investment Financial
Authority, Single Family Housing,
6.25%, 3/1/21 RB, GNMA,
FNMA, FHLMC, AMT 990,000 1,007,681
---------------------------------------------------------------------------
NEW YORK (12.6%)
Metropolitan Transportation Authority,
5.625%, 7/1/25 RB, MBIA 1,000,000 990,670
New York City Municipal
Water Finance Authority,
5.75%, 6/15/29 RB 1,000,000 1,000,830
New York State Dormitory Authority,
5.125%, 2/15/08 RB 1,000,000 1,011,570
TSASC, Inc., New York,
6%, 7/15/19 RB 1,500,000 1,505,895
---------------------------------------------------------------------------
TOTAL 4,508,965
---------------------------------------------------------------------------
NORTH CAROLINA (4.0%)
North Carolina Eastern Municipal
Power Agency System,
4.5%, 1/1/24 RB, PR 730,000 627,223
North Carolina Eastern Municipal
Power Agency System,
4%, 1/1/18 RB, PR 940,000 788,266
---------------------------------------------------------------------------
TOTAL 1,415,489
---------------------------------------------------------------------------
Shares/Par Market Value
---------------------------------------------------------------------------
OHIO (2.5%)
Ohio Housing Financial Agency,
6.2%, 9/1/14 RB, GNMA 855,000 $888,465
---------------------------------------------------------------------------
PENNSYLVANIA (3.4%)
Pennsylvania Higher Education
Authority, Variable Coupon,
9/1/26 RB, AMBAC, AMT 1,000,000 1,192,500
---------------------------------------------------------------------------
RHODE ISLAND (2.9%)
Providence, Rhode Island Public
Building Authority,
5.5%, 12/15/12 RB, AMBAC 1,000,000 1,031,600
---------------------------------------------------------------------------
SOUTH CAROLINA (3.1%)
South Carolina State Public
Service Authority,
5.342%, 6/30/06 RB, MBIA 1,100,000 1,118,810
---------------------------------------------------------------------------
TEXAS (11.2%)
Brazos, Texas Higher
Education Authority, 5.5%, 6/1/02
RB, GTD STD LNS, AMT 965,000 977,284
Harris County, Texas Health Facility,
5.55%, 2/15/22 RB, MBIA 200,000 200,000
Harris County, Texas Toll Road,
6%, 8/1/09 RB, FGIC 1,500,000 1,610,190
Odessa Texas Junior College District,
8.125%, 12/1/18 RB, PR 1,075,000 1,239,905
---------------------------------------------------------------------------
TOTAL 4,027,379
---------------------------------------------------------------------------
WASHINGTON (2.8%)
Port Seattle, Washington Passenger
Facility, 5%, 12/1/05
RB, AMBAC, AMT 1,000,000 1,008,770
---------------------------------------------------------------------------
WYOMING (2.8%)
Lincoln County, Wyoming
Pollution Control, 5.5%, 11/1/24
RB, AMBAC 1,000,000 1,000,000
---------------------------------------------------------------------------
TOTAL REVENUE BOND
(COST $31,732,462) 32,098,535
===========================================================================
GENERAL OBLIGATION UNLIMITED (13.2%)
MUNICIPAL BOND - GENERAL OBLIGATION (13.2%)
COLORADO (3.2%)
Douglas County, Colorado School
District RE.1, 6.5%, 12/15/16
GO, PR, MBIA 1,050,000 1,136,048
---------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
M A S O N S T R E E T F U N D S
--------------------------------------------------------------------------------
MUNICIPAL BOND FUND
Shares/Par Market Value
---------------------------------------------------------------------------
DISTRICT OF COLUMBIA (4.5%)
District of Columbia,
5.1%, 6/1/03 GO, AMBAC 1,000,000 $1,011,249
District of Columbia, Variable
Coupon, 6/1/03 GO 600,000 600,000
---------------------------------------------------------------------------
TOTAL 1,611,249
---------------------------------------------------------------------------
ILLINOIS (1.8%)
Chicago, Illinois Capital
Appreciation - City Colleges,
0%, 1/1/28 GO, FGIC 3,170,000 636,187
---------------------------------------------------------------------------
NEW YORK (3.0%)
New York, New York Series I,
6%, 4/15/09 GO 1,000,000 1,066,190
---------------------------------------------------------------------------
WASHINGTON (0.7%)
Clark County, Washington School
District #37, 4%, 12/1/08 GO 250,000 231,873
---------------------------------------------------------------------------
TOTAL GENERAL OBLIGATION UNLIMITED
(COST $4,533,800) 4,681,547
===========================================================================
TOTAL INVESTMENTS (103.3%)
(COST $36,266,262)<F1> 36,780,082
===========================================================================
OTHER ASSETS, LESS LIABILITIES (-3.3%) (1,185,156)
===========================================================================
TOTAL NET ASSETS (100.0%) $35,594,926
===========================================================================
<F1> At September 30, 2000, the aggregate cost of securities for federal tax
purposes was $36,266,262 and the net unrealized appreciation of investments
based on that cost was $513,820 which is comprised of $681,003 aggregate
gross unrealized appreciation and $167,183 aggregate gross unrealized
depreciation.
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:
AMBAC (AMBAC Indemnity Corporation)
BIGI (Bond Investors Guarantee Insurance)
FGIC (Financial Guaranty Insurance Company)
FHLMC (Federal Home Loan Mortgage Corporation)
FNMA (Federal National Mortgage Association)
GNMA (Government National Mortgage Association)
GTD STD LNS (Guaranteed Student Loans)
MBIA (Municipal Bond Insurance Organization)
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
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: $37.3 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 maturities are altered with moderate adjustments in
recognition or anticipation of interest rate changes.
In recent months, the Select Bond Fund has essentially matched the performance
of its benchmark, the Merrill Lynch Domestic Master Index and has provided
higher returns than the stock market. The focus has been on quality and
liquidity, with holdings concentrated in well-known names with ratings of A or
better. To take advantage of unusually wide spreads between corporate and U.S.
government bonds, some government securities were replaced during the second
quarter of the calendar year with high-quality corporate issues. This
anticipation of the narrowing spread was partially offset by less favorable
positioning with regard to the yield curve, as conflicting signals regarding
economic growth and inflation expectations have produced an unusually steep
yield curve.
At the end of September, the Fund's emphasis is on corporate and mortgage bonds,
rather than Treasury securities, in anticipation of the higher interest rates
that are likely to result from higher inflation.
PERCENTAGE HOLDINGS
9/30/00
-------------------------------------------------------
Corporate Bonds 34%
Mortgage-Backed and Asset-Backed Securities 29%
Government and Government Agencies 26%
Money Market Investments, Net of Other Assets 11%
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
SELECT
BOND FUND MERRILL
SELECT SELECT CLASS B LYNCH DOMESTIC
BOND FUND BOND FUND REDEMPTION MASTER
CLASS A CLASS B VALUE INDEX
------------------------------------------------------------------------
3/31/97 9,524 10,000 10,000
9/30/97 10,358 10,838 10,712
3/31/98 10,677 11,134 11,205
9/30/98 10,743 11,165 11,955
3/31/99 11,168 11,569 11,934
9/30/99 11,261 11,627 11,908
3/31/00 11,420 11,741 12,167
9/30/00 11,954 12,263 11,986 12,733
TOTAL RETURN Average
Annual
One Since
For the periods ended September 30, 2000 Year Inception<F1>
--------------------------------------------------------------------------------
Select Bond Fund
(Class A - without initial sales charge) 6.16% 6.71%
--------------------------------------------------------------------------------
Merrill Lynch
Domestic Master Index 6.94% 7.14%
--------------------------------------------------------------------------------
<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 an applicable contingent deferred sales charge for Class B.
SCHEDULE OF INVESTMENTS
Shares/Par Market Value
---------------------------------------------------------------------------
CORPORATE BONDS (33.6%)
AUTOMOBILES AND OTHER MOTOR VEHICLES (1.2%)
Ford Motor Credit Company,
6.3%, 7/16/02 300,000 $300,495
General Motors Acceptance
Corporation, 7.5%, 7/15/05 150,000 151,968
---------------------------------------------------------------------------
TOTAL 452,463
---------------------------------------------------------------------------
BANK HOLDING COMPANIES (3.3%)
Bank One Corporation, 8%, 4/29/27 750,000 749,043
Nationsbank Lease Pass
Through Trust, Series 1997-A,
Class 1, 1/10/11 (144A) 479,347 478,700
---------------------------------------------------------------------------
TOTAL 1,227,743
---------------------------------------------------------------------------
BEVERAGES, MALT BEVERAGES (2.8%)
Anheuser-Busch Companies, Inc.,
7.5%, 3/15/12 375,000 382,755
Anheuser-Busch Companies, Inc.,
7%, 12/1/25 720,000 655,450
---------------------------------------------------------------------------
TOTAL 1,038,205
---------------------------------------------------------------------------
BROAD WOVEN FABRIC MILLS, MANMADE (0.3%)
<F1> Polysindo International Finance,
11.375%, 6/15/06 800,000 104,000
---------------------------------------------------------------------------
BUILDING MATERIALS & GARDEN SUPPLIES (2.5%)
The Home Depot, Inc., 6.5%, 9/15/04 950,000 943,753
---------------------------------------------------------------------------
ELECTRIC & OTHER SERVICES COMBINED (6.0%)
Comed Transitional Funding Trust,
Series 1998-1, Class A7,
5.74%, 12/25/10 750,000 693,893
Peco Energy Transition Trust,
Series 1999-A, Class A7, 3/1/09 800,000 762,839
Scottish Power PLC, 5.65%, 11/1/06 550,000 507,455
South Carolina Electric & Gas,
6.125%, 3/1/09 250,000 229,622
---------------------------------------------------------------------------
TOTAL 2,193,809
---------------------------------------------------------------------------
NEWSPAPERS (2.1%)
Times Mirror Company,
7.45%, 10/15/09 800,000 798,188
---------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
SELECT BOND FUND
Shares/Par Market Value
---------------------------------------------------------------------------
OIL AND GAS EXTRACTION (4.0%)
Amerada Hess Corporation,
7.875%, 10/1/29 500,000 $498,128
Chevron Corporation, 6.625%, 10/1/04 500,000 497,068
Tosco Corporation, 8.125%, 2/15/30 500,000 505,046
---------------------------------------------------------------------------
TOTAL 1,500,242
---------------------------------------------------------------------------
PHARMACEUTICALS (4.0%)
Johnson & Johnson, 6.625%, 9/1/09 700,000 687,160
Merck & Co., Inc. 5.95%, 12/1/28 937,000 797,986
---------------------------------------------------------------------------
TOTAL 1,485,146
---------------------------------------------------------------------------
RESIDENTIAL MORTGAGES (2.0%)
EOP Operating LP, 8.1%, 8/1/10 375,000 377,275
Post Apartment Homes,
8.125%, 6/15/05 375,000 380,908
---------------------------------------------------------------------------
TOTAL 758,183
---------------------------------------------------------------------------
RETAIL - MISCELLANEOUS SHOPPING GOODS STORES (1.5%)
Wal-Mart Stores, Inc., 6.55%, 8/10/04 250,000 249,507
Wal-Mart Stores, Inc., 6.875%, 8/1/02 150,000 150,514
Wal-Mart Stores, Inc., 6.875%, 8/10/09 150,000 148,118
---------------------------------------------------------------------------
TOTAL 548,139
---------------------------------------------------------------------------
TOBACCO PRODUCTS (1.7%)
Philip Morris Companies Inc.,
7.75%, 1/15/27 700,000 624,310
---------------------------------------------------------------------------
TRANSPORTATION SERVICES (2.2%)
United Parcel Service, 8.375%, 4/1/20 750,000 829,629
---------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(COST $13,305,101) 12,503,810
===========================================================================
MORTGAGE-BACKED AND
ASSET-BACKED SECURITIES (28.8%)
ASSET-BACKED SECURITIES (CMO'S) (3.7%)
Amresco Residential Securities,
Series 1998-2, Class A2,
6.245%, 4/25/22 204,606 203,279
Heilig-Meyers Master Trust,
Series 1998-1A, Class A,
6.125%, 1/20/07 479,173 470,502
Iroquois Trust, Series 1997-2,
Class A, 6.752%, 6/25/07 (144A) 126,070 124,857
LB Mortgage Trust, Series 1991-2,
Class A3, 8.3962%, 1/20/17 475,954 493,522
Newcourt Equipment Receivables,
Series 1997-A, Class B,
6.764%, 9/20/04 (144A) 79,459 78,650
---------------------------------------------------------------------------
TOTAL 1,370,810
---------------------------------------------------------------------------
Shares/Par Market Value
---------------------------------------------------------------------------
COMMERCIAL MORTGAGES (18.1%)
Asset Securitization Corporation,
Series 1996-MD6, Class CS1,
1.6317%, 11/13/26 IO 11,020,732 $256,246
Asset Securitization Corporation,
Series 1997-D5, Class A3,
7.1141%, 2/14/41 450,000 426,924
Chase Commercial Mortgage Securities
Corporation, Series 1997-2,
Class A2, 6.6%, 11/19/07 500,000 487,811
Chase Commercial Mortgage Securities
Corporation, Series 1997-2, Class B,
6.6%, 11/19/07 500,000 482,088
Commercial Mortgage Acceptance
Corporation, Series 1997-ML1,
Class B, 6.6437%, 12/15/07 500,000 483,878
Credit Suisse First Boston Mortgage
Securities Corporation,
Series 1997-C1, Class A2,
7.26%, 6/20/07 (144A) 235,341 233,425
Credit Suisse First Boston Mortgage
Securities Corporation,
Series 1997-C1, Class B, 7.28%,
6/20/07 (144A) 250,000 246,727
Criimi Mae Commercial Mortgage
Trust, Series 1998-C1, Class A1,
7%, 11/2/06 (144A) 500,000 474,081
Criimi Mae Commercial Mortgage
Trust, Series 1998-C1, Class B,
7%, 11/2/11 (144A) 600,000 498,000
DLJ Commercial Mortgage Corporation,
Series 1998-CF1, Class S,
.7003%, 1/15/18 IO 19,742,370 684,469
DLJ Mortgage Acceptance Corp.,
Series 1994-MF11, Class A2,
8.1%, 6/18/04 350,000 360,483
DLJ Mortgage Acceptance Corporation,
Series 1994-MF11, Class A1,
8.1%, 6/18/04 215,812 222,949
DLJ Mortgage Acceptance Corporation,
Series 1997-CF2, Class S,
.3516%, 10/15/17 IO (144A) 28,830,688 576,614
Midland Realty Acceptance
Corporation, Series 1996-C2,
Class AEC, 1.3534%, 1/25/29
IO (144A) 8,657,092 457,181
Mortgage Capital Funding, Inc.,
Series 1997-MC1, Class A3,
7.288%, 3/20/07 400,000 403,718
<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)
Nomura Asset Securities Corporation,
Series 1998-D6, Class A2,
6.9931%, 3/17/28 200,000 $192,009
RMF Commercial Mortgage
Pass-Through, Series 1997-1,
Class F, 7.471%, 1/15/19 (144A) 400,000 279,536
---------------------------------------------------------------------------
TOTAL 6,766,139
---------------------------------------------------------------------------
FRANCHISE LOAN RECEIVABLES (4.3%)
Enterprise Mortgage Acceptance
Company, Series 1998-1, Class A2,
6.38%, 4/15/07 (144A) 400,000 385,428
Enterprise Mortgage Acceptance
Company, Series 1998-1, Class IO,
1.3704%, 1/15/23 (144A) IO 13,085,914 834,750
FMAC Loan Receivables Trust,
Series 1998-A, Class A1,
6.2%, 9/15/20 (144A) 197,625 193,704
Global Franchise Trust, Series 1998-1,
Class A1, 6.349%, 4/10/04 (144A) 176,983 173,361
---------------------------------------------------------------------------
TOTAL 1,587,243
---------------------------------------------------------------------------
MANUFACTURED HOUSING (1.3%)
Mid-State Trust, Series 6, Class A3,
7.54%, 7/1/35 501,740 490,034
---------------------------------------------------------------------------
MOTORCYCLE DEALERS (0.8%)
Harley-Davidson Eaglemark Motorcycle
Trust, Series 1998-2, Class A2,
5.87%, 4/15/04 300,000 297,501
---------------------------------------------------------------------------
RESIDENTIAL MORTGAGES (0.6%)
Blackrock Capital Finance L.P.,
Series 1997-R1, Class B3,
7.75%, 3/25/37 (144A) 317,905 92,192
Blackrock Capital Finance L.P.,
Series 1997-R3, Class B3,
7.25%, 11/25/28 (144A) 475,421 147,381
---------------------------------------------------------------------------
TOTAL 239,573
---------------------------------------------------------------------------
TOTAL MORTGAGE-BACKED AND
ASSET-BACKED SECURITIES
(COST $11,980,445) 10,751,300
===========================================================================
Shares/Par Market Value
---------------------------------------------------------------------------
GOVERNMENT (DOMESTIC AND FOREIGN)
AND AGENCY BONDS (26.2%)
FEDERAL GOVERNMENT AND AGENCIES (26.2%)
Aid-Israel, 0%, 11/1/24 1,500,000 $314,084
Federal Home Loan Bank,
5.54%, 1/8/09 300,000 272,315
Federal Home Loan Mortgage
Corporation, 7.5%, 10/1/27 843,784 845,232
Federal National Mortgage Association,
5.97%, 10/1/08 386,992 367,655
Federal National Mortgage Association,
6.22%, 2/1/06 475,210 462,881
Federal National Mortgage Association,
6.265%, 10/1/08 244,597 235,907
Federal National Mortgage Association,
6.39%, 4/1/08 480,672 468,244
Federal National Mortgage Association,
7.36%, 4/1/11 462,711 473,464
Federal National Mortgage Association,
10%, 10/1/17 24,604 26,513
Federal National Mortgage Association,
11%, 12/1/12 12,640 13,971
Federal National Mortgage Association,
11%, 9/1/17 169,420 188,967
Federal National Mortgage Association,
11%, 12/1/17 52,315 58,027
Federal National Mortgage Association,
11%, 2/1/18 74,419 82,516
Federal National Mortgage Association,
11.5%, 4/1/18 94,554 106,344
Federal National Mortgage Association,
12%, 9/1/12 159,807 180,468
Federal National Mortgage Association,
12%, 12/1/12 34,495 39,158
Federal National Mortgage Association,
12%, 9/1/17 47,065 53,992
Federal National Mortgage Association,
12%, 10/1/17 52,129 60,019
Federal National Mortgage Association,
12%, 12/1/17 53,044 60,520
Federal National Mortgage Association,
12%, 2/1/18 52,751 60,091
Federal National Mortgage Association,
12.25%, 1/1/18 25,814 29,439
Federal National Mortgage Association,
12.5%, 4/1/18 39,581 45,492
Federal National Mortgage Association,
13%, 11/1/12 26,656 30,778
Federal National Mortgage Association,
13%, 11/1/17 86,098 100,366
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
SELECT BOND FUND
Shares/Par Market Value
---------------------------------------------------------------------------
FEDERAL GOVERNMENT AND AGENCIES (CONTINUED)
Federal National Mortgage Association,
13%, 12/1/17 33,294 $38,760
Federal National Mortgage Association,
13%, 2/1/18 70,904 82,567
Federal National Mortgage Association,
14%, 12/1/17 20,134 24,116
Government National Mortgage
Association, 7.5%, 6/15/28 296,267 297,458
Government National Mortgage
Association, 8%, 12/15/26 302,318 308,482
Government National Mortgage
Association, 8%, 7/15/27 184,268 187,888
Government National Mortgage
Association, 11%, 1/15/18 285,751 312,701
US Treasury, 5.75%, 8/15/10 565,000 562,705
US Treasury, 6%, 8/15/09 253,000 254,028
US Treasury, 6.125%, 8/15/29 480,000 490,200
<F2> US Treasury, 6.5%, 2/15/10 1,299,000 1,352,584
<F2> US Treasury, 6.75%, 5/15/05 585,000 606,024
US Treasury Inflation Index Bond,
3.875%, 4/15/29 456,278 469,634
Vendee Mortgage Trust, Series 1998-3,
Class E, 6.5%, 3/15/29 250,000 230,105
---------------------------------------------------------------------------
TOTAL GOVERNMENT
(DOMESTIC AND FOREIGN)
AND AGENCY BONDS
(COST $9,936,677) 9,793,695
===========================================================================
MONEY MARKET INVESTMENTS (10.9%)
FEDERAL GOVERNMENT AND AGENCIES (1.3%)
<F2> Federal Home Loan Bank,
6.38%, 11/24/00 500,000 495,304
---------------------------------------------------------------------------
FINANCE SERVICES (3.5%)
<F2> Citicorp, 6.53%, 10/25/00 1,300,000 1,294,576
---------------------------------------------------------------------------
PERSONAL CREDIT INSTITUTIONS (6.1%)
<F2> CXC Incorporated, 6.5%, 10/27/00 1,300,000 1,294,132
General Electric Capital Corp.,
6.69%, 10/2/00 1,000,000 1,000,000
---------------------------------------------------------------------------
TOTAL 2,294,132
---------------------------------------------------------------------------
TOTAL MONEY MARKET INVESTMENTS
(COST $4,084,012) 4,084,012
===========================================================================
TOTAL INVESTMENTS (99.5%)
(COST $39,306,235)<F3> 37,132,817
===========================================================================
OTHER ASSETS, LESS LIABILITIES (0.5%) 181,502
===========================================================================
TOTAL NET ASSETS (100.0%) $37,314,319
===========================================================================
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.
<F1> Defaulted Security
<F2> Partially held in a segregated account as collateral for open futures
positions. Information regarding open futures contracts as of period end is
summarized below:
Unrealized
Number of Expiration Appreciation/
Issuers Contracts Date (Depreciation)
-------------------------------------------------------------------------------
90 Day Euro
(Total notional value at
9/30/00, $2,801,250) 12 3/01 $(2,550)
US Treasury Bond
(Total notional value at
9/30/00, $2,956,875) 30 12/00 $(2,812)
<F3> At September 30, 2000, the aggregate cost of securities for federal tax
purposes was $39,306,235 and the net unrealized depreciation of investments
based on that cost was $2,173,418 which is comprised of $121,700 aggregate
gross unrealized appreciation and $2,295,118 aggregate gross unrealized
depreciation.
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
--------------------------------------------------------------------------------
SMALL CAP GROWTH STOCK FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2000
--------------------------------------------------------------------------------
ASSETS
Common Stocks (cost $11,146,724) $14,101,588
Money Market Investments (cost $1,094,439) 1,094,439
--------------------------------------------------------------------------------
15,196,027
--------------------------------------------------------------------------------
Cash 53,021
Due from Sale of Securities 334,187
Due from Sale of Fund Shares 103,572
Due from Investment Advisor 8,671
Dividends Receivable 1,151
--------------------------------------------------------------------------------
TOTAL ASSETS 15,696,629
--------------------------------------------------------------------------------
LIABILITIES
Due on Purchase of Securities 88,212
Other Accrued Liabilities 55,864
Due on Redemption of Fund Shares 24,642
Accrued Distribution Fees 10,066
Accrued Administrative Fees 2,629
--------------------------------------------------------------------------------
TOTAL LIABILITIES 181,413
--------------------------------------------------------------------------------
NET ASSETS $15,515,216
================================================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 834,948 shares outstanding) $10,143,744
Undistributed Net Investment Loss (66,556)
Undistributed Accumulated Net
Realized Gain on Investments 2,483,164
Net Unrealized Appreciation of
Investment Securities 2,954,864
--------------------------------------------------------------------------------
NET ASSETS FOR 834,948
SHARES OUTSTANDING $15,515,216
================================================================================
Per Share of Class A (Based on 692,184
Shares Issued and Outstanding):
OFFERING PRICE $19.53
================================================================================
NET ASSET VALUE AND REDEMPTION PRICE $18.60
================================================================================
Per Share of Class B (Based on 142,764
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $18.50
================================================================================
STATEMENT OF OPERATIONS
For the Six Months Ended September 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME
Income
Interest $26,279
Dividends 7,585
--------------------------------------------------------------------------------
TOTAL INCOME 33,864
--------------------------------------------------------------------------------
Expenses
Management Fees 58,059
Transfer Agent Fees 44,723
Registration Fees 18,543
Shareholder Servicing Fees 17,076
Distribution Fees:
Class A 5,703
Class B 8,454
Audit Fees 8,215
Shareholder Reporting Expenses 7,832
Administrative Fees 6,830
Custodian Fees 5,316
Directors Fees 5,281
Professional Fees 2,636
Other Expenses 785
--------------------------------------------------------------------------------
TOTAL EXPENSES 189,453
--------------------------------------------------------------------------------
Less:
Expenses Reimbursed by Affiliates (86,407)
Custodian Fees Paid Indirectly (2,626)
--------------------------------------------------------------------------------
TOTAL NET EXPENSES 100,420
--------------------------------------------------------------------------------
NET INVESTMENT LOSS (66,556)
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
NET REALIZED GAIN ON INVESTMENTS
FOR THE PERIOD 488,967
--------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
OF INVESTMENTS FOR THE PERIOD 349,554
--------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS 838,521
--------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $771,965
================================================================================
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
SMALL CAP GROWTH STOCK FUND
STATEMENT OF CHANGES IN NET ASSETS
For the Six For the Period
Months Ended July 12, 1999<F1>
September 30, 2000 through
(Unaudited) March 31, 2000
--------------------------------------------------------------------------------
INCREASE IN NET ASSETS
Operations
Net Investment Loss $(66,556) $(54,926)
Net Realized Gain on Investments 488,967 2,287,364
Net Change in Unrealized Appreciation
of Investments for the Period 349,554 2,605,310
--------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations 771,965 4,837,748
--------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders
from Net Investment Income - (5,156)
Distributions to Class A Shareholders
from Net Realized Gain on Investments - (233,827)
Distributions to Class B Shareholders
from Net Investment Income - -
Distributions to Class B Shareholders
from Net Realized Gain on Investments - (30,179)
--------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting
from Distributions to Shareholders - (269,162)
--------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 142,553
and 626,286 Shares 2,593,194 6,897,912
Proceeds from Shares Issued on
Reinvestment of Distributions Paid
(0 and 16,684 shares) - 236,250
Payments for 26,508 and 67,331
Shares Redeemed (500,826) (1,007,191)
--------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Class A Fund
Share Transactions (116,045 and
575,639 shares) 2,092,368 6,126,971
--------------------------------------------------------------------------------
Class B
Proceeds from Sale of 37,886
and 106,798 Shares 673,136 1,320,550
Proceeds from Shares Issued on
Reinvestment of Distributions Paid
(0 and 2,131 shares) - 30,159
Payments for 2,829 and 1,722
Shares Redeemed (48,379) (30,140)
--------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Class B Fund Share Transactions
(35,057 and 107,207 shares) 624,757 1,320,569
--------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 3,489,090 12,016,126
NET ASSETS
Beginning of Period 12,026,126 10,000
--------------------------------------------------------------------------------
END OF PERIOD (INCLUDES UNDISTRIBUTED
NET INVESTMENT LOSS OF
$66,556 AND $0, RESPECTIVELY) $15,515,216 $12,026,126
================================================================================
<F1> Fund commenced operations on July 12, 1999.
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
--------------------------------------------------------------------------------
SMALL CAP GROWTH STOCK FUND
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
CLASS A CLASS A CLASS B CLASS B
-------- -------- -------- --------
For the Six For the Period For the Six For the Period
Months Ended July 12, 1999<F1> Months Ended July 12, 1999<F1>
September 30, 2000 through September 30, 2000 through
(For a share outstanding throughout the period) (Unaudited) March 31, 2000 (Unaudited) March 31, 2000
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $17.59 $10.00 $17.57 $10.00
Income from Investment Operations:
Net Investment Loss (0.15) (0.08)<F4> (0.18) (0.10)<F4>
Net Realized and Unrealized Gains on Investments 1.16 8.12 1.11 8.09
------------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 1.01 8.04 0.93 7.99
------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net Investment Income - (0.01) - -
Distributions from Realized Gains on Investments - (0.44) - (0.42)
------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - (0.45) - (0.42)
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $18.60 $17.59 $18.50 $17.57
====================================================================================================================================
TOTAL RETURN<F2> 5.74%<F5> 81.52%<F5> 5.29%<F5> 80.95%<F5>
====================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $12,873,980 $10,133,996 $2,641,236 $1,892,130
====================================================================================================================================
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS 2.66%<F3> 3.31%<F3> 3.31%<F3> 3.89%<F3>
====================================================================================================================================
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS 1.40%<F3> 1.40%<F3> 2.05%<F3> 2.05%<F3>
====================================================================================================================================
RATIO OF NET INVESTMENT LOSS TO AVERAGE NET ASSETS (0.90)% <F3> (0.92)% <F3> (1.55)% <F3> (1.57)%<F3>
====================================================================================================================================
PORTFOLIO TURNOVER RATE 36.87% 89.96% 36.87% 89.96%
====================================================================================================================================
</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> Calculated prior to adjustment for certain book and tax income differences.
<F5> Reflects total return for the period; not annualized.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
AGGRESSIVE GROWTH STOCK FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2000
--------------------------------------------------------------------------------
ASSETS
Common Stocks (cost $64,324,565) $101,235,091
Money Market Investments (cost $3,923,690) 3,923,556
--------------------------------------------------------------------------------
105,158,647
--------------------------------------------------------------------------------
Cash 143,221
Due from Sale of Securities 346,867
Due from Sale of Fund Shares 55,408
Dividends and Interest Receivable 10,159
Unamortized Organizational Costs 6,172
--------------------------------------------------------------------------------
TOTAL ASSETS 105,720,474
--------------------------------------------------------------------------------
LIABILITIES
Other Accrued Liabilities 109,666
Due to Investment Advisor 108,997
Accrued Distribution Fees 56,034
Due on Redemption of Fund Shares 38,335
Accrued Administrative Fees 17,238
--------------------------------------------------------------------------------
TOTAL LIABILITIES 330,270
--------------------------------------------------------------------------------
NET ASSETS $105,390,204
================================================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 4,274,816 shares outstanding) $52,393,012
Undistributed Net Investment Loss (391,327)
Undistributed Accumulated Net
Realized Gain on Investments 16,478,127
Net Unrealized Appreciation of
Investment Securities 36,910,392
--------------------------------------------------------------------------------
NET ASSETS FOR 4,274,816
SHARES OUTSTANDING $105,390,204
================================================================================
Per Share of Class A (Based on 3,725,319
Shares Issued and Outstanding):
OFFERING PRICE $25.95
================================================================================
NET ASSET VALUE AND REDEMPTION PRICE $24.72
================================================================================
Per Share of Class B (Based on 549,497
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $24.23
================================================================================
STATEMENT OF OPERATIONS
For the Six Months Ended September 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME
Income
Interest $235,248
Dividends 39,703
--------------------------------------------------------------------------------
TOTAL INCOME 274,951
--------------------------------------------------------------------------------
Expenses
Management Fees 363,407
Shareholder Servicing Fees 121,136
Distribution Fees:
Class A 42,506
Class B 44,615
Transfer Agent Fees 56,057
Administrative Fees 48,454
Custodian Fees 13,040
Audit Fees 8,804
Registration Fees 8,169
Other Expenses 4,154
Shareholder Reporting Fees 3,039
Directors Fees 2,708
Professional Fees 2,200
--------------------------------------------------------------------------------
TOTAL EXPENSES 718,289
--------------------------------------------------------------------------------
Less:
Expenses Reimbursed by Affiliates (49,716)
Custodian Fees Paid Indirectly (2,295)
--------------------------------------------------------------------------------
TOTAL NET EXPENSES 666,278
--------------------------------------------------------------------------------
NET INVESTMENT LOSS (391,327)
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
NET REALIZED GAIN ON INVESTMENTS
FOR THE PERIOD 6,388,353
--------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
OF INVESTMENTS FOR THE PERIOD 394,550
--------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS 6,782,903
--------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $6,391,576
================================================================================
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
For the Six
Months Ended For the
September 30, 2000 Year Ended
(Unaudited) March 31, 2000
--------------------------------------------------------------------------------
INCREASE IN NET ASSETS
Operations
Net Investment Loss $(391,327) $(594,934)
Net Realized Gain on Investments 6,388,353 16,585,769
Net Change in Unrealized Appreciation
of Investments for the Period 394,550 27,872,951
--------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Operations 6,391,576 43,863,786
--------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders
from Net Realized Gain on Investments - (6,860,994)
Distributions to Class B Shareholders
from Net Realized Gain on Investments - (860,509)
--------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting
from Distributions to Shareholders - (7,721,503)
--------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 133,619 and
258,390 Shares 3,027,241 4,740,641
Proceeds from Shares Issued on
Reinvestment of Distributions Paid
(0 and 350,616 shares) - 6,850,878
Payments for 60,213 and 149,669 Shares
Redeemed (1,384,688) (2,807,737)
--------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Class A Fund Share
Transactions (73,406 and
459,337 shares) 1,642,553 8,783,782
--------------------------------------------------------------------------------
Class B
Proceeds from Sale of 75,791 and
150,124 Shares 1,673,350 2,665,164
Proceeds from Shares Issued on
Reinvestment of Distributions Paid
(0 and 43,399 shares) - 835,907
Payments for 25,012 and
40,600 Shares Redeemed (566,480) (713,616)
--------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Class B Fund Share
Transactions (50,779 and
152,923 shares) 1,106,870 2,787,455
--------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 9,140,999 47,713,520
NET ASSETS
Beginning of Period 96,249,205 48,535,685
--------------------------------------------------------------------------------
END OF PERIOD (INCLUDES UNDISTRIBUTED
NET INVESTMENT LOSS OF $391,327
AND $0) $105,390,204 $96,249,205
================================================================================
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
AGGRESSIVE GROWTH STOCK FUND
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
CLASS A CLASS A CLASS A CLASS A
-------- -------- -------- --------
For the Six
Months Ended For the For the For the
September 30, 2000 Year Ended Year Ended Year Ended
(For a share outstanding throughout the period) (Unaudited) March 31, 2000 March 31, 1999 March 31, 1998
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $23.23 $13.73 $14.50 $10.00
Income from Investment Operations:
Net Investment Loss (0.22) (0.21)<F4> (0.11) (0.12)<F1>
Net Realized and Unrealized Gains (Losses)
on Investments 1.71 11.82 (0.43) 5.18
------------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 1.49 11.61 (0.54) 5.06
------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Realized Gains on Investments - (2.11) (0.23) (0.56)
------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - (2.11) (0.23) (0.56)
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $24.72 $23.23 $13.73 $14.50
====================================================================================================================================
TOTAL RETURN<F2> 6.37%<F5> 87.53% (3.78)% 51.57%
====================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $92,074,488 $84,847,655 $43,840,289 $41,640,193
====================================================================================================================================
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS 1.40%<F3> 1.50% 1.62% 1.64%
====================================================================================================================================
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS 1.30%<F3> 1.30% 1.30% 1.30%
====================================================================================================================================
RATIO OF NET INVESTMENT LOSS TO AVERAGE NET ASSETS (0.73)%<F3> (0.82)% (0.80)% (0.96)%
====================================================================================================================================
PORTFOLIO TURNOVER RATE 22.41% 92.54% 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> Calculated prior to adjustment for certain book and tax income differences.
<F5> 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
AGGRESSIVE GROWTH STOCK FUND
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B CLASS B CLASS B CLASS B
-------- -------- -------- --------
For the Six
Months Ended For the For the For the
September 30, 2000 Year Ended Year Ended Year Ended
(For a share outstanding throughout the period) (Unaudited) March 31, 2000 March 31, 1999 March 31, 1998
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $22.86 $13.58 $14.43 $10.00
Income from Investment Operations:
Net Investment Loss (0.26) (0.27)<F4> (0.19) (0.21)<F1>
Net Realized and Unrealized Gains (Losses)
on Investments 1.63 11.59 (0.43) 5.18
------------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 1.37 11.32 (0.62) 4.97
------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Realized Gains on Investments - (2.04) (0.23) (0.54)
------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - (2.04) (0.23) (0.54)
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $24.23 $22.86 $13.58 $14.43
====================================================================================================================================
TOTAL RETURN<F2> 5.99%<F5> 86.13% (4.35)% 50.59%
====================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $13,315,716 $11,401,550 $4,695,396 $1,870,132
====================================================================================================================================
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS 2.05%<F3> 2.15% 2.27% 2.29%
====================================================================================================================================
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS 1.95%<F3> 1.95% 1.95% 1.95%
====================================================================================================================================
RATIO OF NET INVESTMENT LOSS TO AVERAGE NET ASSETS (1.38)%<F3> (1.47)% (1.45)% (1.61)%
====================================================================================================================================
PORTFOLIO TURNOVER RATE 22.41% 92.54% 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> Calculated prior to adjustment for certain book and tax income differences.
<F5> Reflects total return for the period; not annualized.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
INTERNATIONAL EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2000
--------------------------------------------------------------------------------
ASSETS
Common Stocks (cost $35,007,726) $33,931,798
Money Market Investments (cost $4,282,301) 4,282,301
--------------------------------------------------------------------------------
38,214,099
--------------------------------------------------------------------------------
Due from Foreign Currency Contracts 775,040
Due from Sale of Securities 359,673
Dividends and Interest Receivable 96,772
Due from Purchase of Fund Shares 16,168
Unamortized Organizational Costs 6,218
--------------------------------------------------------------------------------
TOTAL ASSETS 39,467,970
--------------------------------------------------------------------------------
LIABILITIES
Due on Foreign Currency Contracts 796,401
Due on Purchase of Securities 296,457
Other Accrued Liabilities 181,694
Accrued Distribution Expense 20,431
Due on Sale of Fund Shares 19,292
Accrued Administrative Fees 12,420
Due to Investment Advisor 6,135
--------------------------------------------------------------------------------
TOTAL LIABILITIES 1,332,830
--------------------------------------------------------------------------------
NET ASSETS $38,135,140
================================================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 3,756,029 shares outstanding) $37,225,941
Undistributed Net Investment Income 285,122
Undistributed Accumulated Net
Realized Gain on Investments 1,720,691
Net Unrealized Appreciation (Depreciation) of:
Investment Securities (1,075,928)
Foreign Currency Transactions (20,686)
--------------------------------------------------------------------------------
NET ASSETS FOR 3,756,029
SHARES OUTSTANDING $38,135,140
================================================================================
Per Share of Class A (Based on
3,336,427 Shares Issued and Outstanding):
OFFERING PRICE $10.67
================================================================================
NET ASSET VALUE AND REDEMPTION PRICE $10.16
================================================================================
Per Share of Class B (Based on 419,602
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $10.06
================================================================================
STATEMENT OF OPERATIONS
For the Six Months Ended September 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME
Income
Dividends (less foreign dividend tax of $47,756) $514,804
Interest 113,844
--------------------------------------------------------------------------------
TOTAL INCOME 628,648
--------------------------------------------------------------------------------
Expenses
Management Fees 165,741
Shareholder Servicing Fees 48,748
Transfer Agent Fees 40,252
Distribution Fees:
Class A 17,383
Class B 15,869
Custody Fees 31,381
Administrative Fees 19,499
Registration Fees 18,074
Other Expenses 10,425
Shareholder Reporting Fees 4,345
Professional Fees 2,877
Trustee Fees 2,712
Organizational Fees 2,083
--------------------------------------------------------------------------------
TOTAL EXPENSES 379,389
--------------------------------------------------------------------------------
Less:
Expenses Reimbursed by Affiliates (43,812)
--------------------------------------------------------------------------------
TOTAL NET EXPENSES 335,577
--------------------------------------------------------------------------------
NET INVESTMENT INCOME 293,071
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCIES
Net Realized Gain (Loss) on:
Investment Securities 1,414,913
Foreign Currency Transactions (67,016)
--------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS
FOR THE PERIOD 1,347,897
--------------------------------------------------------------------------------
Net Change in Unrealized Depreciation of:
Investment Securities (2,815,378)
Foreign Currency Transactions (19,720)
--------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED
DEPRECIATION FOR THE PERIOD (2,835,098)
--------------------------------------------------------------------------------
NET LOSS ON INVESTMENTS (1,487,201)
--------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS $(1,194,130)
================================================================================
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
--------------------------------------------------------------------------------
INTERNATIONAL EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
STATEMENT OF CHANGES IN NET ASSETS
For the Six
Months Ended For the
September 30, 2000 Year Ended
(Unaudited) March 31, 2000
--------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net Investment Income $293,071 $354,927
Net Realized Gain on Investments 1,347,897 1,556,223
Net Change in Unrealized Appreciation
(Depreciation) of Investments and
Foreign Currency Transactions for
the Period (2,835,098) 3,468,990
--------------------------------------------------------------------------------
Net Increase (Decrease) in Net
Assets Resulting from Operations (1,194,130) 5,380,140
--------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders
from Net Investment Income - (420,036)
Distributions to Class A Shareholders
from Net Realized Gain on Investments - (21,353)
Distributions to Class B Shareholders
from Net Investment Income - (29,161)
Distributions to Class B Shareholders
from Net Realized Gain on Investments - (2,499)
--------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting
from Distributions to Shareholders - (473,049)
--------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 121,861 and
303,113 Shares 1,251,314 3,079,273
Proceeds from Shares Issued on
Reinvestment of Distributions Paid
(0 and 41,838 shares) - 440,989
Payments for 62,162 and 209,060
Shares Redeemed (646,409) (2,144,063)
--------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Class A Fund Share Transactions
(59,699 and 135,891 shares) 604,905 1,376,199
--------------------------------------------------------------------------------
Class B
Proceeds from Sale of 47,759 and
136,345 Shares 486,780 1,354,747
Proceeds from Shares Issued on
Reinvestment of Distributions Paid
(0 and 2,900 shares) - 30,366
Payments for 18,608 and 49,943
Shares Redeemed (191,676) (500,816)
--------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Class B Fund Share
Transactions (29,151 and
89,302 shares) 295,104 884,297
--------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (294,121) 7,167,587
NET ASSETS
Beginning of Period 38,429,261 31,261,674
--------------------------------------------------------------------------------
END OF PERIOD (INCLUDES (OVER)
UNDISTRIBUTED NET INVESTMENT INCOME OF
$285,122 AND $(8,186), RESPECTIVELY) $38,135,140 $38,429,261
================================================================================
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS A CLASS A CLASS A CLASS A
-------- -------- -------- --------
For the Six
Months Ended For the For the For the
September 30, 2000 Year Ended Year Ended Year Ended
(For a share outstanding throughout the period) (Unaudited) March 31, 2000 March 31, 1999 March 31, 1998
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $10.49 $9.09 $10.58 $10.00
Income from Investment Operations:
Net Investment Income 0.06 0.15<F4> 0.19<F4> 0.24<F1>
Net Realized and Unrealized Gains
(Losses) on Investments (0.39) 1.39 (1.13) 0.56
------------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS (0.33) 1.54 (0.94) 0.80
------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net Investment Income - (0.13) (0.17) (0.22)
Distributions from Realized Gains on Investments - (0.01) (0.38) -
------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - (0.14) (0.55) (0.22)
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $10.16 $10.49 $9.09 $10.58
====================================================================================================================================
TOTAL RETURN<F2> (3.15)%<F5> 16.91% (8.85)% 8.19%
====================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $33,912,855 $34,368,631 $28,543,601 $29,451,833
====================================================================================================================================
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS 1.88%<F3> 1.86% 1.91% 2.13%
====================================================================================================================================
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS 1.65%<F3> 1.65% 1.65% 1.65%
====================================================================================================================================
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 1.57%<F3> 1.07% 2.34% 2.34%
====================================================================================================================================
PORTFOLIO TURNOVER RATE 16.81% 23.99% 70.31% 10.07%
====================================================================================================================================
</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> Calculated prior to adjustment for certain book and tax income differences.
<F5> 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
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B CLASS B CLASS B CLASS B
-------- -------- -------- --------
For the Six
Months Ended For the For the For the
September 30, 2000 Year Ended Year Ended Year Ended
(For a share outstanding throughout the period) (Unaudited) March 31, 2000 March 31, 1999 March 31, 1998
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $10.40 $9.03 $10.53 $10.00
Income from Investment Operations:
Net Investment Income 0.01 0.07<F4> 0.14<F4> 0.10<F1>
Net Realized and Unrealized Gains
(Losses) on Investments (0.35) 1.39 (1.13) 0.63
------------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS (0.34) 1.46 (0.99) 0.73
------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net Investment Income - (0.08) (0.13) (0.20)
Distributions from Realized Gains on Investments - (0.01) (0.38) -
------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - (0.09) (0.51) (0.20)
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $10.06 $10.40 $9.03 $10.53
====================================================================================================================================
TOTAL RETURN<F2> (3.27)%<F5> 16.10% (9.36)% 7.49%
====================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $4,222,285 $4,060,630 $2,718,073 $1,444,924
====================================================================================================================================
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS 2.51%<F3> 2.51% 2.56% 2.78%
====================================================================================================================================
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS 2.30%<F3> 2.30% 2.30% 2.30%
====================================================================================================================================
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 0.92%<F3> 0.42% 1.69% 1.69%
====================================================================================================================================
PORTFOLIO TURNOVER RATE 16.81% 23.99% 70.31% 10.07%
====================================================================================================================================
</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> Calculated prior to adjustment for certain book and tax income differences.
<F5> Reflects total return for the period; not annualized.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
INDEX 400 STOCK FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2000
--------------------------------------------------------------------------------
ASSETS
Common Stocks (cost $35,964,331) $39,658,590
Money Market Investments (cost $1,194,886) 1,194,886
--------------------------------------------------------------------------------
40,853,476
--------------------------------------------------------------------------------
Cash 68,741
Due from Sale of Fund Shares 97,971
Due from Sale of Securities 56,250
Dividends and Interest Receivable 31,586
Due from Investment Advisor 1,996
--------------------------------------------------------------------------------
TOTAL ASSETS 41,110,020
--------------------------------------------------------------------------------
LIABILITIES
Other Accrued Liabilities 90,983
Accrued Distribution Fees 21,992
Futures Variation Margin 8,400
Accrued Administrative Fees 6,699
Due on Redemption of Fund Shares 6,500
--------------------------------------------------------------------------------
TOTAL LIABILITIES 134,574
--------------------------------------------------------------------------------
NET ASSETS $40,975,446
================================================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 3,199,857 shares outstanding) $32,346,503
Undistributed Net Investment Income 127,824
Undistributed Accumulated Net
Realized Gain on Investments 4,813,885
Net Unrealized Appreciation (Depreciation) of:
Investment Securities 3,694,259
Index Futures Contracts (7,025)
--------------------------------------------------------------------------------
NET ASSETS FOR 3,199,857
SHARES OUTSTANDING $40,975,446
================================================================================
Per Share of Class A (Based on 2,814,593
Shares Issued and Outstanding):
OFFERING PRICE $13.45
================================================================================
NET ASSET VALUE AND REDEMPTION PRICE $12.81
================================================================================
Per Share of Class B (Based on 385,264
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $12.75
================================================================================
STATEMENT OF OPERATIONS
For the Six Months Ended September 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME
Income
Dividends $192,031
Interest 93,483
--------------------------------------------------------------------------------
TOTAL INCOME 285,514
--------------------------------------------------------------------------------
Expenses
Management Fees 74,149
Shareholder Servicing Fees 46,343
Distribution Fees:
Class A 16,472
Class B 15,486
Transfer Agent Fees 27,149
Registration Fees 23,978
Custodian Fees 19,567
Administrative Fees 18,537
Professional Fees 17,510
Shareholder Reporting Expense 9,611
Audit Fees 8,215
Directors Fees 3,952
Other Expenses 1,087
--------------------------------------------------------------------------------
TOTAL EXPENSES 282,056
--------------------------------------------------------------------------------
Less:
Expenses Reimbursed by Affiliates (92,365)
Custodian Fees Paid Indirectly (2,297)
--------------------------------------------------------------------------------
TOTAL NET EXPENSES 187,394
--------------------------------------------------------------------------------
NET INVESTMENT INCOME 98,120
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net Realized Gain on:
Investment Securities 2,306,055
Index Futures Contracts 221,065
--------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS
FOR THE PERIOD 2,527,120
--------------------------------------------------------------------------------
Net Change in Unrealized Appreciation
(Depreciation) of:
Investment Securities 409,863
Index Futures Contracts (29,950)
--------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
OF INVESTMENTS FOR THE PERIOD 379,913
--------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS 2,907,033
--------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $3,005,153
================================================================================
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
For the Six For the Period
Months Ended July 12, 1999<F1>
September 30, 2000 through
(Unaudited) March 31, 2000
--------------------------------------------------------------------------------
INCREASE IN NET ASSETS
Operations
Net Investment Income $98,120 $103,102
Net Realized Gain on Investments 2,527,120 2,457,218
Net Change in Unrealized Appreciation
of Investments for the Period 379,913 3,307,321
--------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Operations 3,005,153 5,867,641
--------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders
from Net Investment Income - (121,350)
Distributions to Class A Shareholders
from Net Realized Gain on Investments - (151,071)
Distributions to Class B Shareholders
from Net Investment Income - (7,132)
Distributions to Class B Shareholders
from Net Realized Gain on Investments - (15,442)
--------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting
from Distributions to Shareholders - (294,995)
--------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 139,065 and
2,703,436 Shares 1,669,395 27,085,881
Proceeds from Shares Issued on
Reinvestment of Distributions
Paid (0 and 26,393 shares) - 272,899
Payments for 22,980 and 31,821
Shares Redeemed (268,942) (331,447)
--------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Class A Fund Share
Transactions (116,085 and
2,698,008 shares) 1,400,453 27,027,333
--------------------------------------------------------------------------------
Class B
Proceeds from Sale of 82,316 and
304,402 Shares 980,551 3,001,735
Proceeds from Shares Issued on
Reinvestment of Distributions Paid
(0 and 2,142 shares) - 22,125
Payments for 1,229 and 2,867
Shares Redeemed (15,064) (29,486)
--------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Class B Fund Share Transactions
(81,087 and 303,677 shares) 965,487 2,994,374
--------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 5,371,093 35,594,353
NET ASSETS
Beginning of Period 35,604,353 10,000
--------------------------------------------------------------------------------
END OF PERIOD (INCLUDES UNDISTRIBUTED
NET INVESTMENT INCOME OF
$127,824 AND $29,538, RESPECTIVELY) $40,975,446 $35,604,353
================================================================================
<F1> Fund commenced operations on July 12, 1999.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
INDEX 400 STOCK FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
CLASS A CLASS A CLASS B CLASS B
-------- -------- -------- --------
For the Six For the Period For the Six For the Period
Months Ended July 12, 1999<F1> Months Ended July 12, 1999<F1>
September 30, 2000 through September 30, 2000 through
(For a share outstanding throughout the period) (Unaudited) March 31, 2000 (Unaudited) March 31, 2000
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $11.86 $10.00 $11.84 $10.00
Income from Investment Operations:
Net Investment Income (Loss) 0.02 0.04<F4> (0.01) -<F4>
Net Realized and Unrealized Gains on Investments 0.93 1.93 0.92 1.93
------------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 0.95 1.97 0.91 1.93
------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net Investment Income - (0.05) - (0.03)
Distributions from Realized Gains on Investments - (0.06) - (0.06)
------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - (0.11) - (0.09)
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $12.81 $11.86 $12.75 $11.84
====================================================================================================================================
TOTAL RETURN<F2> 8.01%<F5> 19.81%<F5> 7.69%<F5> 19.38%<F5>
====================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $36,061,362 $32,001,909 $4,914,084 $3,602,444
====================================================================================================================================
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS 1.45%<F3> 1.61%<F3> 2.10%<F3> 2.24%<F3>
====================================================================================================================================
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS 0.95%<F3> 0.95%<F3> 1.60%<F3> 1.60%<F3>
====================================================================================================================================
RATIO OF NET INVESTMENT INCOME (LOSS) TO
AVERAGE NET ASSETS 0.59%<F3> 0.55%<F3> (0.06)%<F3> (0.10)%<F3>
====================================================================================================================================
PORTFOLIO TURNOVER RATE 20.89% 35.40% 20.89% 35.40%
====================================================================================================================================
</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> Calculated prior to adjustment for certain book and tax income differences.
<F5> 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
--------------------------------------------------------------------------------
GROWTH STOCK FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2000
--------------------------------------------------------------------------------
ASSETS
Common Stocks (cost $41,239,883) $64,240,969
Money Market Investments (cost $9,844,051) 9,843,783
--------------------------------------------------------------------------------
74,084,752
--------------------------------------------------------------------------------
Due from Sale of Securities 502,467
Dividends and Interest Receivable 35,081
Unamortized Organizational Costs 6,172
--------------------------------------------------------------------------------
TOTAL ASSETS 74,628,472
--------------------------------------------------------------------------------
LIABILITIES
Due on Purchase of Securities 288,571
Futures Variation Margin 89,200
Other Accrued Liabilities 85,299
Due to Investment Advisor 58,384
Accrued Distribution Fees 37,012
Accrued Administrative Fees 12,474
Due on Redemption of Fund Shares 8,361
--------------------------------------------------------------------------------
TOTAL LIABILITIES 579,301
--------------------------------------------------------------------------------
NET ASSETS $74,049,171
================================================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 3,875,358 shares outstanding) $46,015,441
Undistributed Net Investment Income 31,346
Undistributed Accumulated Net
Realized Gain on Investments 5,331,116
Net Unrealized Appreciation (Depreciation) of:
Investment Securities 23,000,818
Index Futures Contracts (329,550)
--------------------------------------------------------------------------------
NET ASSETS FOR 3,875,358
SHARES OUTSTANDING $74,049,171
================================================================================
Per Share of Class A (Based on
3,502,075 Shares Issued and Outstanding):
OFFERING PRICE $20.09
================================================================================
NET ASSET VALUE AND REDEMPTION PRICE $19.13
================================================================================
Per Share of Class B (Based on 373,283
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $18.86
================================================================================
STATEMENT OF OPERATIONS
For the Six Months Ended September 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME
Income
Interest $310,414
Dividends 219,309
--------------------------------------------------------------------------------
TOTAL INCOME 529,723
--------------------------------------------------------------------------------
Expenses
Management Fees 276,091
Shareholder Servicing Fees 92,030
Distribution Fees:
Class A 33,444
Class B 25,263
Transfer Agent Fees 47,145
Administrative Fees 36,812
Custodian Fees 9,857
Audit Fees 8,780
Registration Fees 8,063
Shareholder Reporting Expenses 6,690
Other Expenses 3,852
Directors Fees 3,605
Professional Fees 2,453
--------------------------------------------------------------------------------
TOTAL EXPENSES 554,085
--------------------------------------------------------------------------------
Less:
Expenses Reimbursed by Affiliates (53,631)
Custodian Fees Paid Indirectly (2,246)
--------------------------------------------------------------------------------
TOTAL NET EXPENSES 498,208
--------------------------------------------------------------------------------
NET INVESTMENT INCOME 31,515
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net Realized Gain on:
Investment Securities 3,709,438
Index Futures Contracts 370,782
--------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS
FOR THE PERIOD 4,080,220
--------------------------------------------------------------------------------
Net Change in Unrealized Depreciation of:
Investment Securities (2,835,991)
Index Futures Contracts (797,050)
--------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED DEPRECIATION
OF INVESTMENTS FOR THE PERIOD (3,633,041)
--------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS 447,179
--------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $478,694
================================================================================
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
GROWTH STOCK FUND
STATEMENT OF CHANGES IN NET ASSETS
For the Six
Months Ended For the
September 30, 2000 Year Ended
(Unaudited) March 31, 2000
--------------------------------------------------------------------------------
INCREASE IN NET ASSETS
Operations
Net Investment Income $31,515 $140,461
Net Realized Gain on Investments 4,080,220 3,736,467
Net Change in Unrealized Appreciation
(Depreciation) of Investments for
the Period (3,633,041) 11,459,898
--------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Operations 478,694 15,336,826
--------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders
from Net Investment Income - (186,205)
Distributions to Class A Shareholders
from Net Realized Gain on Investments - (3,555,397)
Distributions to Class B Shareholders
from Net Investment Income - -
Distributions to Class B Shareholders
from Net Realized Gain on Investments - (334,657)
--------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting
from Distributions to Shareholders - (4,076,259)
--------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 87,654 and
221,522 Shares 1,634,852 3,795,699
Proceeds from Shares Issued on
Reinvestment of Distributions Paid
(0 and 211,312 shares) - 3,739,765
Payments for 35,248 and 76,337
Shares Redeemed (665,678) (1,330,281)
--------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Class A Fund Share
Transactions (52,406 and
356,497 shares) 969,174 6,205,183
--------------------------------------------------------------------------------
Class B
Proceeds from Sale of 54,039 and
151,030 Shares 1,009,071 2,569,344
Proceeds from Shares Issued on
Reinvestment of Distributions Paid
(0 and 18,774 shares) - 329,283
Payments for 15,779 and 58,378
Shares Redeemed (300,739) (1,032,711)
--------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Class B Fund Share
Transactions (38,260 and
111,426 shares) 708,332 1,865,916
--------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 2,156,200 19,331,666
NET ASSETS
Beginning of Period 71,892,971 52,561,305
--------------------------------------------------------------------------------
END OF PERIOD (INCLUDES UNDISTRIBUTED
NET INVESTMENT INCOME OF
$31,346 AND $0, RESPECTIVELY) $74,049,171 $71,892,971
--------------------------------------------------------------------------------
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
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
CLASS A CLASS A CLASS A CLASS A
-------- -------- -------- --------
For the Six
Months Ended For the For the For the
September 30, 2000 Year Ended Year Ended Year Ended
(For a share outstanding throughout the period) (Unaudited) March 31, 2000 March 31, 1999 March 31, 1998
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $19.01 $15.86 $14.10 $10.00
Income from Investment Operations:
Net Investment Income 0.01 0.05<F4> 0.04 0.04<F1>
Net Realized and Unrealized Gains on Investments 0.11 4.27 2.52 4.41
------------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 0.12 4.32 2.56 4.45
------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net Investment Income - (0.06) (0.06) (0.05)
Distributions from Realized Gains on Investments - (1.11) (0.74) (0.30)
------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - (1.17) (0.80) (0.35)
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $19.13 $19.01 $15.86 $14.10
====================================================================================================================================
TOTAL RETURN<F2> 0.63%<F5> 27.78% 18.36% 45.08%
====================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $67,008,140 $65,591,773 $49,045,112 $38,224,386
====================================================================================================================================
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS 1.45%<F3> 1.50% 1.57% 1.63%
====================================================================================================================================
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS 1.30%<F3> 1.30% 1.30% 1.30%
====================================================================================================================================
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 0.14%<F3> 0.28% 0.42% 0.29%
====================================================================================================================================
PORTFOLIO TURNOVER RATE 15.47% 35.34% 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> Calculated prior to adjustment for certain book and tax income differences.
<F5> Reflects total return for the period; not annualized.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
GROWTH STOCK FUND
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B CLASS B CLASS B CLASS B
-------- -------- -------- --------
For the Six
Months Ended For the For the For the
September 30, 2000 Year Ended Year Ended Year Ended
(For a share outstanding throughout the period) (Unaudited) March 31, 2000 March 31, 1999 March 31, 1998
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $18.81 $15.73 $14.03 $10.00
Income from Investment Operations:
Net Investment Loss (0.04) (0.05)<F4> (0.01) (0.05)<F1>
Net Realized and Unrealized Gains on Investments 0.09 4.22 2.46 4.41
------------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 0.05 4.17 2.45 4.36
------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net Investment Income - - (0.01) (0.03)
Distributions from Realized Gains on Investments - (1.09) (0.74) (0.30)
------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - (1.09) (0.75) (0.33)
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $18.86 $18.81 $15.73 $14.03
====================================================================================================================================
TOTAL RETURN<F2> 0.27%<F5> 27.02% 17.66% 44.12%
====================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $7,041,031 $6,301,198 $3,516,193 $811,173
====================================================================================================================================
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS 2.10%<F3> 2.15% 2.22% 2.28%
====================================================================================================================================
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS 1.95%<F3> 1.95% 1.95% 1.95%
====================================================================================================================================
RATIO OF NET INVESTMENT LOSS TO AVERAGE NET ASSETS (0.51)%<F3> (0.37)% (0.23)% (0.36)%
====================================================================================================================================
PORTFOLIO TURNOVER RATE 15.47% 35.34% 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> Calculated prior to adjustment for certain book and tax income differences.
<F5> 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
--------------------------------------------------------------------------------
GROWTH AND INCOME STOCK FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2000
--------------------------------------------------------------------------------
ASSETS
Common Stocks (cost $49,088,892) $52,720,383
Money Market Investments (cost $1,690,698) 1,690,698
--------------------------------------------------------------------------------
54,411,081
--------------------------------------------------------------------------------
Cash 42,677
Due from Sale of Securities 156,974
Dividends and Interest Receivable 44,444
Due from Sale of Fund Shares 11,697
Unamortized Organizational Costs 6,172
--------------------------------------------------------------------------------
TOTAL ASSETS 54,673,045
--------------------------------------------------------------------------------
LIABILITIES
Other Accrued Liabilities 98,043
Due to Investment Advisor 84,007
Due on Redemption of Fund Shares 54,914
Due on Purchase of Securities 31,011
Accrued Distribution Fees 28,883
Accrued Administrative Fees 18,154
--------------------------------------------------------------------------------
TOTAL LIABILITIES 315,012
--------------------------------------------------------------------------------
NET ASSETS $54,358,033
================================================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 4,616,079 shares outstanding) $49,658,273
Undistributed Net Investment Income 66,230
Undistributed Accumulated Net
Realized Gain on Investments 1,002,039
Net Unrealized Appreciation of
Investment Securities 3,631,491
--------------------------------------------------------------------------------
NET ASSETS FOR 4,616,079
SHARES OUTSTANDING $54,358,033
================================================================================
Per Share of Class A (Based on
4,088,406 Shares Issued and Outstanding):
OFFERING PRICE $12.39
================================================================================
NET ASSET VALUE AND REDEMPTION PRICE $11.80
================================================================================
Per Share of Class B (Based on 527,673
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $11.57
================================================================================
STATEMENT OF OPERATIONS
For the Six Months Ended September 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME
Income
Dividends (less foreign dividend tax of $56) $305,589
Interest 36,764
--------------------------------------------------------------------------------
TOTAL INCOME 342,353
--------------------------------------------------------------------------------
Expenses
Management Fees 179,894
Shareholder Servicing Fees 69,190
Distribution Fees:
Class A 24,625
Class B 22,883
Transfer Agent Fees 37,303
Administrative Fees 27,676
Custodian Fees 16,339
Audit Fees 9,057
Registration Fees 8,572
Shareholder Reporting Expense 4,250
Other Expenses 3,971
Directors Fees 2,708
Professional Fees 2,453
--------------------------------------------------------------------------------
TOTAL EXPENSES 408,921
--------------------------------------------------------------------------------
Less:
Expenses Reimbursed by Affiliates (56,976)
Custodian Fees Paid Indirectly (2,338)
--------------------------------------------------------------------------------
TOTAL NET EXPENSES 349,607
--------------------------------------------------------------------------------
NET INVESTMENT LOSS (7,254)
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
NET REALIZED GAIN ON INVESTMENTS
FOR THE PERIOD 936,366
--------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED DEPRECIATION
OF INVESTMENTS FOR THE PERIOD (3,953,191)
--------------------------------------------------------------------------------
NET LOSS ON INVESTMENTS (3,016,825)
--------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS $(3,024,079)
================================================================================
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
GROWTH AND INCOME STOCK FUND
STATEMENT OF CHANGES IN NET ASSETS
For the Six
Months Ended For the
September 30, 2000 Year Ended
(Unaudited) March 31, 2000
--------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net Investment Income (Loss) $(7,254) $71,399
Net Realized Gain on Investments 936,366 769,017
Net Change in Unrealized Appreciation
(Depreciation) of Investments
for the Period (3,953,191) 4,331,609
--------------------------------------------------------------------------------
Net Increase (Decrease) in Net
Assets Resulting from Operations (3,024,079) 5,172,025
--------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders
from Net Realized Gain on Investments - (2,599,897)
Distributions to Class B Shareholders
from Net Realized Gain on Investments - (330,856)
--------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting
from Distributions to Shareholders - (2,930,753)
--------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 59,650 and
228,242 Shares 705,135 2,750,360
Proceeds from Shares Issued on
Reinvestment of Distributions Paid
(0 and 218,636 shares) - 2,595,196
Payments for 107,258 and 126,717
Shares Redeemed (1,279,548) (1,526,675)
--------------------------------------------------------------------------------
Net Increase (Decrease) in Net
Assets Resulting from
Class A Fund Share Transactions
((47,608) and 320,161 shares) (574,413) 3,818,881
--------------------------------------------------------------------------------
Class B
Proceeds from Sale of 60,399
and 204,927 Shares 697,190 2,446,475
Proceeds from Shares Issued on
Reinvestment of Distributions Paid
(0 and 26,703 shares) - 312,157
Payments for 41,838 and 86,703
Shares Redeemed (489,254) (1,004,414)
--------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Class B Fund Share
Transactions (18,561 and
144,927 shares) 207,936 1,754,218
--------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (3,390,556) 7,814,371
NET ASSETS
Beginning of Period 57,748,589 49,934,218
--------------------------------------------------------------------------------
END OF PERIOD (INCLUDES UNDISTRIBUTED
NET INVESTMENT INCOME OF
$66,230 AND $73,487, RESPECTIVELY) $54,358,033 $57,748,589
--------------------------------------------------------------------------------
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 AND INCOME STOCK FUND
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
CLASS A CLASS A CLASS A CLASS A
-------- -------- -------- --------
For the Six
Months Ended For the For the For the
September 30, 2000 Year Ended Year Ended Year Ended
(For a share outstanding throughout the period) (Unaudited) March 31, 2000 March 31, 1999 March 31, 1998
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $12.45 $11.96 $12.44 $10.00
Income from Investment Operations:
Net Investment Income - 0.02<F4> 0.01 0.04<F1>
Net Realized and Unrealized Gains
(Losses) on Investments (0.65) 1.14 1.33 3.90
------------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS (0.65) 1.16 1.34 3.94
------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net Investment Income - - (0.04) (0.06)
Distributions from Realized Gains on Investments - (0.67) (1.78) (1.44)
------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - (0.67) (1.82) (1.50)
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $11.80 $12.45 $11.96 $12.44
====================================================================================================================================
TOTAL RETURN<F2> (5.22)%<F5> 9.95% 11.09% 41.90%
====================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $48,254,480 $51,513,192 $45,619,789 $37,800,412
====================================================================================================================================
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS 1.41%<F3> 1.44% 1.52% 1.57%
====================================================================================================================================
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS 1.20%<F3> 1.20% 1.20% 1.20%
====================================================================================================================================
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 0.04%<F3> 0.19% 0.20% 0.37%
====================================================================================================================================
PORTFOLIO TURNOVER RATE 19.34% 89.66% 156.92% 140.29%
====================================================================================================================================
</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> Calculated prior to adjustment for certain book and tax income differences.
<F5> Reflects total return for the period; not annualized.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
GROWTH AND INCOME STOCK FUND
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B CLASS B CLASS B CLASS B
-------- -------- -------- --------
For the Six
Months Ended For the For the For the
September 30, 2000 Year Ended Year Ended Year Ended
(For a share outstanding throughout the period) (Unaudited) March 31, 2000 March 31, 1999 March 31, 1998
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $12.25 $11.85 $12.37 $10.00
Income from Investment Operations:
Net Investment Loss (0.03) (0.04)<F4> (0.03) (0.03)<F1>
Net Realized and Unrealized Gains
(Losses) on Investments (0.65) 1.11 1.28 3.88
------------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS (0.68) 1.07 1.25 3.85
------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net Investment Income - - (0.00) (0.04)
Distributions from Realized Gains on Investments - (0.67) (1.77) (1.44)
------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - (0.67) (1.77) (1.48)
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $11.57 $12.25 $11.85 $12.37
====================================================================================================================================
TOTAL RETURN<F2> (5.55)%<F5> 9.28% 10.41% 40.96%
====================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $6,103,553 $6,235,397 $4,314,429 $1,529,206
====================================================================================================================================
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS 2.06%<F3> 2.10% 2.17% 2.22%
====================================================================================================================================
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS 1.85%<F3> 1.85% 1.85% 1.85%
====================================================================================================================================
RATIO OF NET INVESTMENT LOSS TO AVERAGE NET ASSETS (0.61)%<F3> (0.46)% (0.45)% (0.28)%
====================================================================================================================================
PORTFOLIO TURNOVER RATE 19.34% 89.66% 156.92% 140.29%
====================================================================================================================================
</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> Calculated prior to adjustment for certain book and tax income differences.
<F5> 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
--------------------------------------------------------------------------------
INDEX 500 STOCK FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2000
--------------------------------------------------------------------------------
ASSETS
Common Stocks (cost $74,513,756) $94,603,295
Money Market Investments (cost $3,970,174) 3,969,816
--------------------------------------------------------------------------------
98,573,111
--------------------------------------------------------------------------------
Cash 137,870
Dividends and Interest Receivable 82,283
Due from Sale of Fund Shares 65,857
Unamortized Organizational Costs 6,172
--------------------------------------------------------------------------------
TOTAL ASSETS 98,865,293
--------------------------------------------------------------------------------
LIABILITIES
Due on Redemption of Fund Shares 7,139,614
Other Accrued Liabilities 171,468
Accrued Distribution Fees 96,196
Futures Variation Margin 61,325
Accrued Administrative Fees 16,506
Due to Investment Advisor 7,248
--------------------------------------------------------------------------------
TOTAL LIABILITIES 7,492,357
--------------------------------------------------------------------------------
NET ASSETS $91,372,936
================================================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 4,954,772 shares outstanding) $69,677,855
Undistributed Net Investment Income 401,784
Undistributed Accumulated Net
Realized Gain on Investments 1,341,241
Net Unrealized Appreciation (Depreciation) of:
Investment Securities 20,089,181
Index Futures Contracts (137,125)
--------------------------------------------------------------------------------
NET ASSETS FOR 4,954,772
SHARES OUTSTANDING $91,372,936
================================================================================
Per Share of Class A (Based on
3,151,885 Shares Issued and Outstanding):
OFFERING PRICE $19.46
================================================================================
NET ASSET VALUE AND REDEMPTION PRICE $18.54
================================================================================
Per Share of Class B (Based on 1,802,887
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $18.27
================================================================================
STATEMENT OF OPERATIONS
For the Six Months Ended September 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME
Income
Dividends (less foreign dividend tax of $3,981) $556,855
Interest 256,836
--------------------------------------------------------------------------------
TOTAL INCOME 813,691
--------------------------------------------------------------------------------
Expenses
Distribution Fees:
Class A 33,228
Class B 122,481
Management Fees 148,677
Shareholder Servicing Fees 123,897
Transfer Agent Fees 75,500
Administrative Fees 49,559
Custodian Fees 20,443
Registration Fees 10,247
Audit Fees 8,354
Professional Fees 7,495
Other Expenses 6,091
Shareholder Reporting Expenses 5,316
Directors Fees 2,708
--------------------------------------------------------------------------------
TOTAL EXPENSES 613,996
--------------------------------------------------------------------------------
Less:
Expenses Reimbursed by Affiliates (86,593)
Custodian Fees Paid Indirectly (3,005)
--------------------------------------------------------------------------------
TOTAL NET EXPENSES 524,398
--------------------------------------------------------------------------------
NET INVESTMENT INCOME 289,293
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net Realized Gain on:
Investment Securities 883,877
Index Futures Contracts 153,572
--------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS
FOR THE PERIOD 1,037,449
--------------------------------------------------------------------------------
Net Change in Unrealized Depreciation of:
Investment Securities (4,593,511)
Index Futures Contracts (504,610)
--------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED DEPRECIATION
OF INVESTMENTS FOR THE PERIOD (5,098,121)
--------------------------------------------------------------------------------
NET LOSS ON INVESTMENTS (4,060,672)
--------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS $(3,771,379)
--------------------------------------------------------------------------------
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
INDEX 500 STOCK FUND
STATEMENT OF CHANGES IN NET ASSETS
For the Six
Months Ended For the
September 30, 2000 Year Ended
(Unaudited) March 31, 2000
--------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net Investment Income $289,293 $440,031
Net Realized Gain on Investments 1,037,449 13,164,839
Net Change in Unrealized Appreciation
(Depreciation) of Investments for
the Period (5,098,121) 3,119,063
--------------------------------------------------------------------------------
Net Increase (Decrease) in Net
Assets Resulting from Operations (3,771,379) 16,723,933
--------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders
from Net Investment Income - (603,740)
Distributions to Class A Shareholders
from Net Realized Gain on Investments - (1,327,954)
Distributions to Class B Shareholders
from Net Investment Income - (72,915)
Distributions to Class B Shareholders
from Net Realized Gain on Investments - (441,245)
--------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting
from Distributions to Shareholders - (2,445,854)
--------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 255,018 and
828,935 Shares 4,795,670 14,756,441
Proceeds from Shares Issued on
Reinvestment of Distributions Paid
(0 and 102,410 shares) - 1,923,080
Payments for 548,398 and 1,654,845
Shares Redeemed (10,200,381) (31,325,709)
--------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting
from Class A Fund Share
Transactions ((293,380) and
(723,500) shares) (5,404,711) (14,646,188)
--------------------------------------------------------------------------------
Class B
Proceeds from Sale of 215,481 and
740,906 Shares 4,012,720 13,048,720
Proceeds from Shares Issued on
Reinvestment of Distributions Paid
(0 and 27,200 shares) - 505,932
Payments for 74,161 and 176,027
Shares Redeemed (1,381,414) (3,105,423)
--------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Class B Fund Share
Transactions (141,320 and
592,079 shares) 2,631,306 10,449,229
--------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (6,544,784) 10,081,120
NET ASSETS
Beginning of Period 97,917,720 87,836,600
--------------------------------------------------------------------------------
END OF PERIOD (INCLUDES UNDISTRIBUTED
NET INVESTMENT INCOME OF $401,784
AND $112,491, RESPECTIVELY) $91,372,936 $97,917,720
--------------------------------------------------------------------------------
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
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
CLASS A CLASS A CLASS A CLASS A
-------- -------- -------- --------
For the Six
Months Ended For the For the For the
September 30, 2000 Year Ended Year Ended Year Ended
(For a share outstanding throughout the period) (Unaudited) March 31, 2000 March 31, 1999 March 31, 1998
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $19.25 $16.80 $14.43 $10.00
Income from Investment Operations:
Net Investment Income 0.09 0.10<F4> 0.10 0.13<F1>
Net Realized and Unrealized Gains
(Losses) on Investments (0.80) 2.77 2.47 4.48
------------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS (0.71) 2.87 2.57 4.61
------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net Investment Income - (0.13) (0.06) (0.11)
Distributions from Realized Gains
(Losses) on Investments - (0.29) (0.14) (0.07)
------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - (0.42) (0.20) (0.18)
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $18.54 $19.25 $16.80 $14.43
====================================================================================================================================
TOTAL RETURN<F2> (3.69)%<F5> 17.15% 17.88% 46.35%
====================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $58,436,902 $66,308,048 $70,034,287 $43,567,584
====================================================================================================================================
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS 1.03%<F3> 1.04% 1.15% 1.30%
====================================================================================================================================
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS 0.85%<F3> 0.85% 0.85% 0.85%
====================================================================================================================================
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 0.79%<F3> 0.57% 0.88% 1.04%
====================================================================================================================================
PORTFOLIO TURNOVER RATE 3.69% 19.61% 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> Calculated prior to adjustment for certain book and tax income differences.
<F5> Reflects total return for the period; not annualized.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
INDEX 500 STOCK FUND
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B CLASS B CLASS B CLASS B
-------- -------- -------- --------
For the Six
Months Ended For the For the For the
September 30, 2000 Year Ended Year Ended Year Ended
(For a share outstanding throughout the period) (Unaudited) March 31, 2000 March 31, 1999 March 31, 1998
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $19.02 $16.65 $14.35 $10.00
Income from Investment Operations:
Net Investment Income (Loss) 0.02 (0.01)<F4> 0.03 0.05<F1>
Net Realized and Unrealized Gains
(Losses) on Investments (0.77) 2.72 2.43 4.47
------------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS (0.75) 2.71 2.46 4.52
------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net Investment Income - (0.05) (0.02) (0.10)
Distributions from Realized Gains on Investments - (0.29) (0.14) (0.07)
------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - (0.34) (0.16) (0.17)
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $18.27 $19.02 $16.65 $14.35
====================================================================================================================================
TOTAL RETURN<F2> (3.94)%<F5> 16.30% 17.17% 45.44%
====================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $32,936,034 $31,609,672 $17,802,313 $4,246,552
====================================================================================================================================
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS 1.68%<F3> 1.72% 1.80% 1.95%
====================================================================================================================================
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS 1.50%<F3> 1.50% 1.50% 1.50%
====================================================================================================================================
RATIO OF NET INVESTMENT INCOME (LOSS)TO
AVERAGE NET ASSETS 0.14%<F3> (0.08)% 0.23% 0.39%
====================================================================================================================================
PORTFOLIO TURNOVER RATE 3.69% 19.61% 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> Calculated prior to adjustment for certain book and tax income differences.
<F5> 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
--------------------------------------------------------------------------------
ASSET ALLOCATION FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2000
--------------------------------------------------------------------------------
ASSETS
Bonds (cost $28,295,556) $28,021,300
Domestic Common Stocks (cost $17,091,590) 26,106,329
Money Market Investments (cost $8,942,652) 8,942,428
Foreign Common Stock (cost $4,731,430) 6,732,819
Preferred Stock (cost $500,339) 486,120
--------------------------------------------------------------------------------
70,288,996
--------------------------------------------------------------------------------
Cash 87,469
Due from Sale of Securities 1,426,865
Dividends and Interest Receivable 548,220
Due from Sale of Fund Shares 77,125
Unamortized Organizational Costs 6,172
Due from Sale of Foreign Currency 114
--------------------------------------------------------------------------------
TOTAL ASSETS 72,434,961
--------------------------------------------------------------------------------
LIABILITIES
Due on Purchase of Securities 1,620,098
Other Accrued Liabilities 106,847
Due to Investment Advisor 91,235
Futures Variation Margin 57,313
Accrued Distribution Fees 44,924
Due on Redemption of Fund Shares 36,752
Accrued Administrative Fees 11,583
--------------------------------------------------------------------------------
TOTAL LIABILITIES 1,968,752
--------------------------------------------------------------------------------
NET ASSETS $70,466,209
================================================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 4,650,853 shares outstanding) $52,318,880
Undistributed Net Investment Income 1,377,197
Undistributed Accumulated Net
Realized Gain on Investments 6,250,547
Net Unrealized Appreciation (Depreciation) of:
Investment Securities 10,727,429
Futures Contracts (206,913)
Foreign Currency Transactions (931)
--------------------------------------------------------------------------------
NET ASSETS FOR 4,650,853
SHARES OUTSTANDING $70,466,209
================================================================================
Per Share of Class A (Based on
3,828,679 Shares Issued and Outstanding):
OFFERING PRICE $15.95
================================================================================
NET ASSET VALUE AND REDEMPTION PRICE $15.19
================================================================================
Per Share of Class B (Based on 822,174
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $14.97
================================================================================
STATEMENT OF OPERATIONS
For the Six Months Ended September 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME
Income
Interest $1,321,986
Dividends (less foreign dividend tax of $3,999) 140,922
--------------------------------------------------------------------------------
TOTAL INCOME 1,462,908
--------------------------------------------------------------------------------
Expenses
Management Fees 241,623
Shareholder Servicing Fees 86,294
Distribution Fees:
Class A 28,661
Class B 43,926
Transfer Agent Fees 35,872
Administrative Fees 34,518
Custodian Fees 28,321
Other Expenses 12,686
Registration Fees 9,924
Audit Fees 9,026
Shareholder Reporting Expenses 7,688
Directors Fees 3,605
Professional Fees 2,879
--------------------------------------------------------------------------------
TOTAL EXPENSES 545,023
--------------------------------------------------------------------------------
Less:
Expenses Reimbursed by Affiliates (40,965)
Custodian Fees Paid Indirectly (3,219)
--------------------------------------------------------------------------------
TOTAL NET EXPENSES 500,839
--------------------------------------------------------------------------------
NET INVESTMENT INCOME 962,069
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net Realized Gain (Loss) on:
Investment Securities 2,348,061
Futures Contracts 318,893
Foreign Currency Transactions (799)
--------------------------------------------------------------------------------
NET REALIZED GAIN FOR THE PERIOD 2,666,155
--------------------------------------------------------------------------------
Net Change in Unrealized Depreciation of:
Investment Securities (2,102,339)
Futures Contracts (318,382)
Foreign Currency Transactions (494)
--------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED DEPRECIATION
OF INVESTMENTS FOR THE PERIOD (2,421,215)
--------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS 244,940
--------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $1,207,009
--------------------------------------------------------------------------------
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
ASSET ALLOCATION FUND
STATEMENT OF CHANGES IN NET ASSETS
For the Six
Months Ended For the
September 30, 2000 Year Ended
(Unaudited) March 31, 2000
--------------------------------------------------------------------------------
INCREASE IN NET ASSETS
Operations
Net Investment Income $962,069 $1,548,732
Net Realized Gain on Investments 2,666,155 6,498,709
Net Change in Unrealized Appreciation
(Depreciation) of Investments
for the Period (2,421,215) 7,439,572
--------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations 1,207,009 15,487,013
--------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders
from Net Investment Income - (1,255,848)
Distributions to Class A Shareholders
from Net Realized Gain on Investments - (3,354,503)
Distributions to Class B Shareholders
from Net Investment Income - (190,335)
Distributions to Class B Shareholders
from Net Realized Gain on Investments - (619,819)
--------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting
from Distributions to Shareholders - (5,420,505)
--------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 116,065 and
313,966 Shares 1,726,188 4,244,555
Proceeds from Shares Issued on
Reinvestment of Distributions Paid
(0 and 334,388 shares) - 4,607,799
Payments for 65,382 and 93,783
Shares Redeemed (979,193) (1,296,649)
--------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Class A Fund Share
Transactions (50,683 and
554,571 shares) 746,995 7,555,705
--------------------------------------------------------------------------------
Class B
Proceeds from Sale of 103,454 and
287,133 Shares 1,510,741 3,856,025
Proceeds from Shares Issued on
Reinvestment of Distributions Paid
(0 and 55,818 shares) - 761,351
Payments for 29,281 and 65,314
Shares Redeemed (432,843) (880,800)
--------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Class B Fund Share Transactions
(74,173 and 277,637 shares) 1,077,898 3,736,576
--------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 3,031,902 21,358,789
NET ASSETS
Beginning of Period 67,434,307 46,075,518
--------------------------------------------------------------------------------
END OF PERIOD (INCLUDES UNDISTRIBUTED
NET INVESTMENT INCOME OF $1,377,197
AND $416,361, RESPECTIVELY) $70,466,209 $67,434,307
--------------------------------------------------------------------------------
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
--------------------------------------------------------------------------------
ASSET ALLOCATION FUND
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
CLASS A CLASS A CLASS A CLASS A
-------- -------- -------- --------
For the Six
Months Ended For the For the For the
September 30, 2000 Year Ended Year Ended Year Ended
(For a share outstanding throughout the period) (Unaudited) March 31, 2000 March 31, 1999 March 31, 1998
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $14.93 $12.49 $12.32 $10.00
Income from Investment Operations:
Net Investment Income 0.22 0.39<F4> 0.32 0.31<F1>
Net Realized and Unrealized Gains on Investments 0.04 3.41 0.46 2.50
------------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 0.26 3.80 0.78 2.81
------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net Investment Income - (0.37) (0.31) (0.24)
Distributions from Realized Gains on Investments - (0.99) (0.30) (0.25)
------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - (1.36) (0.61) (0.49)
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $15.19 $14.93 $12.49 $12.32
====================================================================================================================================
TOTAL RETURN<F2> 1.74%<F5> 31.38% 6.41% 28.51%
====================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $58,158,013 $56,394,478 $40,249,915 $34,564,169
====================================================================================================================================
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS 1.47%<F3> 1.57% 1.62% 1.67%
====================================================================================================================================
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS 1.35%<F3> 1.35% 1.35% 1.35%
====================================================================================================================================
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 2.89%<F3> 2.90% 2.89% 2.67%
====================================================================================================================================
PORTFOLIO TURNOVER RATE 70.49% 115.67% 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> Calculated prior to adjustment for certain book and tax income differences.
<F5> Reflects total return for the period; not annualized.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
ASSET ALLOCATION FUND
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B CLASS B CLASS B CLASS B
-------- -------- -------- --------
For the Six
Months Ended For the For the For the
September 30, 2000 Year Ended Year Ended Year Ended
(For a share outstanding throughout the period) (Unaudited) March 31, 2000 March 31, 1999 March 31, 1998
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $14.76 $12.39 $12.26 $10.00
Income from Investment Operations:
Net Investment Income 0.12 0.32<F4> 0.24 0.23<F1>
Net Realized and Unrealized Gains on Investments 0.09 3.35 0.46 2.50
------------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 0.21 3.67 0.70 2.73
------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net Investment Income - (0.31) (0.27) (0.22)
Distributions from Realized Gains on Investments - (0.99) (0.30) (0.25)
------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - (1.30) (0.57) (0.47)
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $14.97 $14.76 $12.39 $12.26
====================================================================================================================================
TOTAL RETURN<F2> 1.42%<F5> 30.47% 5.77% 27.69%
====================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $12,308,196 $11,039,829 $5,825,603 $1,569,081
====================================================================================================================================
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS 2.12%<F3> 2.22% 2.27% 2.32%
====================================================================================================================================
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS 2.00%<F3> 2.00% 2.00% 2.00%
====================================================================================================================================
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 2.24%<F3> 2.25% 2.24% 2.02%
====================================================================================================================================
PORTFOLIO TURNOVER RATE 70.49% 115.67% 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> Calculated prior to adjustment for certain book and tax income differences.
<F5> Reflects total return for the period; not annualized.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2000
--------------------------------------------------------------------------------
ASSETS
Bonds (cost $35,680,541) $34,882,574
Money Market Investments (cost $3,088,421) 3,088,421
Preferred Stock (cost $2,565,624) 2,302,116
Common Stock (cost $1,145,163) 201,140
--------------------------------------------------------------------------------
40,474,251
--------------------------------------------------------------------------------
Cash 248,766
Due from Sale of Securities 918,689
Dividends and Interest Receivable 872,548
Due from Sale of Fund Shares 21,809
Unamortized Organizational Costs 6,172
--------------------------------------------------------------------------------
TOTAL ASSETS 42,542,235
--------------------------------------------------------------------------------
LIABILITIES
Due on Purchase of Securities 1,154,849
Income Dividend Payable 301,769
Other Accrued Liabilities 92,153
Due to Investment Advisor 58,783
Accrued Distribution Fees 21,086
Accrued Administrative Fees 13,160
Due on Redemption of Fund Shares 5,285
--------------------------------------------------------------------------------
TOTAL LIABILITIES 1,647,085
--------------------------------------------------------------------------------
NET ASSETS $40,895,150
================================================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 5,285,545 shares outstanding) $51,973,572
Undistributed Net Investment Income 65,215
Undistributed Accumulated Net
Realized Loss on Investments (9,138,139)
Net Unrealized Depreciation of
Investment Securities (2,005,498)
--------------------------------------------------------------------------------
NET ASSETS FOR 5,285,545
SHARES OUTSTANDING $40,895,150
================================================================================
Per Share of Class A (Based on
4,706,534 Shares Issued and Outstanding):
OFFERING PRICE $8.12
================================================================================
NET ASSET VALUE AND REDEMPTION PRICE $7.74
================================================================================
Per Share of Class B (Based on 579,011
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $7.73
================================================================================
STATEMENT OF OPERATIONS
For the Six Months Ended September 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME
Income
Interest $2,092,261
Dividends 173,901
--------------------------------------------------------------------------------
TOTAL INCOME 2,266,162
--------------------------------------------------------------------------------
Expenses
Management Fees 150,969
Shareholder Servicing Fees 50,323
Distribution Fees:
Class A 17,833
Class B 17,222
Transfer Agent Fees 33,952
Administrative Fees 20,129
Custodian Fees 12,738
Audit Fees 9,564
Other Expenses 7,458
Registration Fees 6,479
Shareholder Reporting Expenses 3,347
Directors Fees 2,965
Professional Fees 2,879
--------------------------------------------------------------------------------
TOTAL EXPENSES 335,858
--------------------------------------------------------------------------------
Less:
Expenses Reimbursed by Affiliates (59,252)
Custodian Fees Paid Indirectly (1,501)
--------------------------------------------------------------------------------
TOTAL NET EXPENSES 275,105
--------------------------------------------------------------------------------
NET INVESTMENT INCOME 1,991,057
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCIES
Net Realized Loss on:
Investment Securities (1,568,043)
Foreign Currency Transactions (15)
--------------------------------------------------------------------------------
NET REALIZED LOSS FOR THE PERIOD (1,568,058)
--------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
OF INVESTMENTS FOR THE PERIOD 561,622
--------------------------------------------------------------------------------
NET LOSS ON INVESTMENTS (1,006,436)
--------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $984,621
================================================================================
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
HIGH YIELD BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
For the Six
Months Ended For the
September 30, 2000 Year Ended
(Unaudited) March 31, 2000
--------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net Investment Income $1,991,057 $4,268,895
Net Realized Loss on Investments (1,568,058) (6,289,754)
Net Change in Unrealized Appreciation
of Investments for the Period 561,622 2,062,972
--------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations 984,621 42,113
--------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders
from Net Investment Income (1,777,361) (3,788,131)
Distributions to Class B Shareholders
from Net Investment Income (213,684) (480,855)
--------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting
from Distributions to Shareholders(1,991,045) (4,268,986)
--------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 180,033 and
197,261 Shares 1,405,584 1,673,803
Proceeds from Shares Issued on
Reinvestment of Distributions Paid
(218,586 and 410,273 shares) 1,707,077 3,489,184
Payments for 63,752 and 504,480
Shares Redeemed (499,985) (4,165,018)
--------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Class A Fund Share
Transactions (334,867 and
103,054 shares) 2,612,676 997,969
--------------------------------------------------------------------------------
Class B
Proceeds from Sale of 40,428 and
138,154 Shares 314,819 1,193,847
Proceeds from Shares Issued on
Reinvestment of Distributions Paid
(21,998 and 45,340 shares) 171,724 385,397
Payments for 66,162 and 135,476
Shares Redeemed (516,568) (1,129,652)
--------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Class B Fund Share
Transactions ((3,736) and
48,018 shares) (30,025) 449,592
--------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 1,576,227 (2,779,312)
NET ASSETS
Beginning of Period 39,318,923 42,098,235
--------------------------------------------------------------------------------
END OF PERIOD (INCLUDES UNDISTRIBUTED
NET INVESTMENT INCOME OF $65,215 AND
$65,113, RESPECTIVELY) $40,895,150 $39,318,923
================================================================================
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
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
CLASS A CLASS A CLASS A CLASS A
-------- -------- -------- --------
For the Six
Months Ended For the For the For the
September 30, 2000 Year Ended Year Ended Year Ended
(For a share outstanding throughout the period) (Unaudited) March 31, 2000 March 31, 1999 March 31, 1998
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $7.94 $8.77 $10.79 $10.00
Income from Investment Operations:
Net Investment Income 0.38 0.85<F4> 1.00 1.01<F1>
Net Realized and Unrealized Gains
(Losses) on Investments (0.19) (0.83) (1.82) 1.19
------------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 0.19 0.02 (0.82) 2.20
------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net Investment Income (0.39) (0.85) (1.02) (1.00)
Distributions from Realized Gains on Investments - - (0.18) (0.41)
------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (0.39) (0.85) (1.20) (1.41)
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $7.74 $7.94 $8.77 $10.79
====================================================================================================================================
TOTAL RETURN<F2> 2.50%<F5> 0.12% (7.87)% 22.95%
====================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $36,396,684 $34,696,895 $37,414,394 $32,811,316
====================================================================================================================================
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS 1.59%<F3> 1.60% 1.65% 1.66%
====================================================================================================================================
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS 1.30%<F3> 1.30% 1.30% 1.30%
====================================================================================================================================
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 9.96%<F3> 10.05% 10.51% 9.30%
====================================================================================================================================
PORTFOLIO TURNOVER RATE 77.68% 193.63% 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> Calculated prior to adjustment for certain book and tax income differences.
<F5> Reflects total return for the period; not annualized.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
SEPTEMBER 30, 2000
HIGH YIELD BOND FUND
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B CLASS B CLASS B CLASS B
-------- -------- -------- --------
For the Six
Months Ended For the For the For the
September 30, 2000 Year Ended Year Ended Year Ended
(For a share outstanding throughout the period) (Unaudited) March 31, 2000 March 31, 1999 March 31, 1998
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $7.93 $8.76 $10.79 $10.00
Income from Investment Operations:
Net Investment Income 0.37 0.80<F4> 0.93 0.93<F1>
Net Realized and Unrealized Gains
(Losses) on Investments (0.20) (0.83) (1.83) 1.20
------------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 0.17 (0.03) (0.90) 2.13
------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net Investment Income (0.37) (0.80) (0.95) (0.93)
Distributions from Realized Gains on Investments - - (0.18) (0.41)
------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (0.37) (0.80) (1.13) (1.34)
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $7.73 $7.93 $8.76 $10.79
====================================================================================================================================
TOTAL RETURN<F2> 2.16%<F5> (0.54)% (8.48)% 22.09%
====================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $4,498,466 $4,622,028 $4,683,841 $1,360,925
====================================================================================================================================
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS 2.24%<F3> 2.25% 2.30% 2.31%
====================================================================================================================================
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS 1.95%<F3> 1.95% 1.95% 1.95%
====================================================================================================================================
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 9.31%<F3> 9.40% 9.86% 8.65%
====================================================================================================================================
PORTFOLIO TURNOVER RATE 77.68% 193.63% 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> Calculated prior to adjustment for certain book and tax income differences.
<F5> 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
--------------------------------------------------------------------------------
MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2000
--------------------------------------------------------------------------------
ASSETS
Bonds (cost $36,266,262) $36,780,082
--------------------------------------------------------------------------------
Cash 155,559
Due from Sale of Securities 1,032,173
Dividends and Interest Receivable 497,486
Unamortized Organizational Costs 6,172
Due from Sale of Fund Shares 125
--------------------------------------------------------------------------------
TOTAL ASSETS 38,471,597
--------------------------------------------------------------------------------
LIABILITIES
Due on Purchase of Securities 2,614,213
Income Dividend Payable 137,652
Other Accrued Liabilities 82,241
Due to Investment Advisor 18,657
Accrued Distribution Fees 12,383
Accrued Administrative Fees 11,525
--------------------------------------------------------------------------------
TOTAL LIABILITIES 2,876,671
--------------------------------------------------------------------------------
NET ASSETS $35,594,926
================================================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 3,465,164 shares outstanding) $35,033,394
Undistributed Net Investment Income 33,521
Undistributed Accumulated Net Realized
Gain on Investments 14,191
Net Unrealized Appreciation of
Investment Securities 513,820
--------------------------------------------------------------------------------
NET ASSETS FOR 3,465,164
SHARES OUTSTANDING $35,594,926
================================================================================
Per Share of Class A (Based on
3,384,101 Shares Issued and Outstanding):
OFFERING PRICE $10.78
================================================================================
NET ASSET VALUE AND REDEMPTION PRICE $10.27
================================================================================
Per Share of Class B (Based on 81,063
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $10.27
================================================================================
STATEMENT OF OPERATIONS
For the Six Months Ended September 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME
Income
Interest $963,859
--------------------------------------------------------------------------------
Expenses
Management Fees 52,826
Shareholder Servicing Fees 44,021
Transfer Agent Fees 22,771
Distribution Fees:
Class A 17,182
Class B 3,200
Administrative Fees 17,608
Registration Fees 12,212
Audit Fees 9,564
Other Expenses 6,927
Shareholder Reporting Expenses 5,366
Professional Fees 4,805
Custodian Fees 4,543
Directors Fees 2,708
--------------------------------------------------------------------------------
TOTAL EXPENSES 203,733
--------------------------------------------------------------------------------
Less:
Expenses Reimbursed by Affiliates (51,287)
Custodian Fees Paid Indirectly (3,078)
--------------------------------------------------------------------------------
TOTAL NET EXPENSES 149,368
--------------------------------------------------------------------------------
NET INVESTMENT INCOME 814,491
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net Realized Gain (Loss) on:
Investment Securities 72,477
Futures Contracts (1,469)
--------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS
FOR THE PERIOD 71,008
--------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
OF INVESTMENTS FOR THE PERIOD 625,453
--------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS 696,461
--------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $1,510,952
--------------------------------------------------------------------------------
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
For the Six
Months Ended For the
September 30, 2000 Year Ended
(Unaudited) March 31, 2000
--------------------------------------------------------------------------------
INCREASE IN NET ASSETS
Operations
Net Investment Income $814,491 $1,534,532
Net Realized Gain on Investments 71,008 52,610
Net Change in Unrealized Appreciation
(Depreciation) of Investments
for the Period 625,453 (1,628,806)
--------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations 1,510,952 (41,664)
--------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders
from Net Investment Income (797,927) (1,498,709)
Distributions to Class A Shareholders
from Net Realized Gain on Investments - (242,842)
Distributions to Class B Shareholders
from Net Investment Income (17,023) (35,354)
Distributions to Class B Shareholders
from Net Realized Gain on Investments - (6,448)
--------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting
from Distributions to Shareholders (814,950) (1,783,353)
--------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 83,621 and
123,222 Shares 844,031 1,279,858
Proceeds from Shares Issued on
Reinvestment of Distributions Paid
(0 and 159,699 shares) - 1,619,932
Payments for 24,535 and 32,459
Shares Redeemed (249,518) (327,630)
--------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Class A Fund Share
Transactions (59,086 and
250,462 shares) 594,513 2,572,160
--------------------------------------------------------------------------------
Class B
Proceeds from Sale of 1,966 and
32,121 Shares 19,912 327,841
Proceeds from Shares Issued on
Reinvestment of Distributions Paid
(0 and 2,424 shares) - 24,622
Payments for 8,027 and 27,302
Shares Redeemed (79,891) (276,772)
--------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Class B Fund Share
Transactions ((6,061) and
7,243 shares) (59,979) 75,691
--------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 1,230,536 822,834
NET ASSETS
Beginning of Period 34,364,390 33,541,556
--------------------------------------------------------------------------------
END OF PERIOD (INCLUDES UNDISTRIBUTED
NET INVESTMENT INCOME OF $33,521 AND
$34,006, RESPECTIVELY) $35,594,926 $34,364,390
================================================================================
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
--------------------------------------------------------------------------------
MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
CLASS A CLASS A CLASS A CLASS A
-------- -------- -------- --------
For the Six
Months Ended For the For the For the
September 30, 2000 Year Ended Year Ended Year Ended
(For a share outstanding throughout the period) (Unaudited) March 31, 2000 March 31, 1999 March 31, 1998
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $10.07 $10.63 $10.55 $10.00
Income from Investment Operations:
Net Investment Income 0.23 0.46<F4> 0.42 0.46<F1>
Net Realized and Unrealized Gains
(Losses) on Investments (0.03) (0.49) 0.25 0.69
------------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 0.20 (0.03) 0.67 1.15
------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net Investment Income - (0.46) (0.45) (0.47)
Distributions from Realized Gains on Investments - (0.07) (0.14) (0.13)
------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - (0.53) (0.59) (0.60)
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $10.27 $10.07 $10.63 $10.55
====================================================================================================================================
TOTAL RETURN<F2> 4.40%<F5> (0.10)% 6.42% 11.73%
====================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $34,762,260 $33,486,954 $32,692,209 $28,172,205
====================================================================================================================================
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS 1.14%<F3> 1.14% 1.17% 1.24%
====================================================================================================================================
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS 0.85%<F3> 0.85% 0.85% 0.85%
====================================================================================================================================
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 4.62%<F3> 4.55% 4.18% 4.38%
====================================================================================================================================
PORTFOLIO TURNOVER RATE 70.12% 184.70% 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> Calculated prior to adjustment for certain book and tax income differences.
<F5> Reflects total return for the period; not annualized.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B CLASS B CLASS B CLASS B
-------- -------- -------- --------
For the Six
Months Ended For the For the For the
September 30, 2000 Year Ended Year Ended Year Ended
(For a share outstanding throughout the period) (Unaudited) March 31, 2000 March 31, 1999 March 31, 1998
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $10.07 $10.63 $10.55 $10.00
Income from Investment Operations:
Net Investment Income 0.21 0.40<F4> 0.36 0.38<F1>
Net Realized and Unrealized Gains
(Losses) on Investments (0.01) (0.49) 0.23 0.70
------------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 0.20 (0.09) 0.59 1.08
------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net Investment Income - (0.40) (0.37) (0.40)
Distributions from Realized Gains on Investments - (0.07) (0.14) (0.13)
------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - (0.47) (0.51) (0.53)
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $10.27 $10.07 $10.63 $10.55
====================================================================================================================================
TOTAL RETURN<F2> 4.06%<F5> (0.75)% 5.72% 10.93%
====================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $832,666 $877,436 $849,347 $472,387
====================================================================================================================================
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS 1.79%<F3> 1.78% 1.82% 1.89%
====================================================================================================================================
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS 1.50%<F3> 1.50% 1.50% 1.50%
====================================================================================================================================
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 3.97%<F3> 3.90% 3.53% 3.73%
====================================================================================================================================
PORTFOLIO TURNOVER RATE 70.12% 184.70% 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> Calculated prior to adjustment for certain book and tax income differences.
<F5> 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, 2000
--------------------------------------------------------------------------------
ASSETS
Bonds (cost $35,222,223) $33,048,805
Money Market Investments (cost $4,084,012) 4,084,012
--------------------------------------------------------------------------------
37,132,817
--------------------------------------------------------------------------------
Due from Sale of Securities 1,119,458
Dividends and Interest Receivable 486,162
Due from Sale of Fund Shares 7,461
Unamortized Organizational Costs 6,172
Due from Investment Advisor 5,556
--------------------------------------------------------------------------------
TOTAL ASSETS 38,757,626
--------------------------------------------------------------------------------
LIABILITIES
Due on Purchase of Securities 1,098,948
Income Dividend Payable 209,621
Other Accrued Liabilities 107,585
Accrued Distribution Fees 15,548
Accrued Administrative Fees 5,867
Futures Variation Margin 5,588
Due on Redemption of Fund Shares 150
--------------------------------------------------------------------------------
TOTAL LIABILITIES 1,443,307
--------------------------------------------------------------------------------
NET ASSETS $37,314,319
================================================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 4,037,579 shares outstanding) $39,903,518
Undistributed Net Investment Income 3,920
Undistributed Accumulated Net
Realized Loss on Investments (414,339)
Net Unrealized Depreciation of:
Investment Securities (2,173,418)
Futures Contracts (5,362)
--------------------------------------------------------------------------------
NET ASSETS FOR 4,037,579
SHARES OUTSTANDING $37,314,319
================================================================================
Per Share of Class A (Based on 3,783,220
Shares Issued and Outstanding):
OFFERING PRICE $9.70
================================================================================
NET ASSET VALUE AND REDEMPTION PRICE $9.24
================================================================================
Per Share of Class B (Based on 254,359
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $9.24
================================================================================
STATEMENT OF OPERATIONS
For the Six Months Ended September 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME
Income
Interest $1,369,891
--------------------------------------------------------------------------------
Expenses
Management Fees 54,421
Shareholder Servicing Fees 45,351
Transfer Agent Fees 27,704
Distribution Fees:
Class A 16,980
Class B 8,704
Administrative Fees 18,140
Shareholder Reporting Fees 14,438
Other Expenses 11,577
Registration Fees 10,561
Custodian Fees 10,505
Audit Fees 9,562
Professional Fees 3,847
Directors Fees 2,965
--------------------------------------------------------------------------------
TOTAL EXPENSES 234,755
--------------------------------------------------------------------------------
Less:
Expenses Reimbursed by Affiliates (73,017)
Custodian Fees Paid Indirectly (3,193)
--------------------------------------------------------------------------------
TOTAL NET EXPENSES 158,545
--------------------------------------------------------------------------------
NET INVESTMENT INCOME 1,211,346
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net Realized Gain on:
Investment Securities 4,124
Futures Contracts 181,661
--------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS
FOR THE PERIOD 185,785
--------------------------------------------------------------------------------
Net Change in Unrealized Appreciation
(Depreciation) of:
Investment Securities 295,054
Futures Contracts (7,612)
--------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
OF INVESTMENTS FOR THE PERIOD 287,442
--------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS 473,227
--------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $1,684,573
================================================================================
The Accompanying Notes are an Integral Part of the Financial Statements.
(Prepared from Unaudited Figures)
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
SELECT BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
For the Six
Months Ended For the
September 30, 2000 Year Ended
(Unaudited) March 31, 2000
--------------------------------------------------------------------------------
INCREASE IN NET ASSETS
Operations
Net Investment Income $1,211,346 $2,286,702
Net Realized Gain (Loss) on Investments 185,785 (283,558)
Net Change in Unrealized Appreciation
(Depreciation) of Investments for
the Period 287,442 (1,245,539)
--------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Operations 1,684,573 757,605
--------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders
from Net Investment Income (1,140,877) (2,135,884)
Distributions to Class A Shareholders
from Net Realized Gain on Investments - (362,939)
Distributions to Class B Shareholders
from Net Investment Income (70,462) (154,885)
Distributions to Class B Shareholders
from Net Realized Gain on Investments - (29,176)
--------------------------------------------------------------------------------
Net Decrease in Net Assets
Resulting from Distributions
to Shareholders (1,211,339) (2,682,884)
--------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 147,667 and
182,584 Shares 1,346,558 1,698,931
Proceeds from Shares Issued on
Reinvestment of Distributions Paid
(122,860 and 265,043 shares) 1,119,461 2,468,940
Payments for 36,671 and 158,608
Shares Redeemed (334,787) (1,477,474)
--------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Class A Fund Share Transactions
(233,856 and 289,019 shares) 2,131,232 2,690,397
--------------------------------------------------------------------------------
Class B
Proceeds from Sale of 35,836 and
83,972 Shares 328,427 788,090
Proceeds from Shares Issued on
Reinvestment of Distributions Paid
(7,067 and 18,156 shares) 64,381 168,995
Payments for 38,115 and 103,728
Shares Redeemed (348,929) (960,099)
--------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Class B Fund
Share Transactions (4,788 and
(1,600) shares) 43,879 (3,014)
--------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 2,648,345 762,104
NET ASSETS
Beginning of Period 34,665,974 33,903,870
--------------------------------------------------------------------------------
END OF PERIOD (INCLUDES UNDISTRIBUTED
NET INVESTMENT INCOME OF
$3,920 AND $3,918, RESPECTIVELY) $37,314,319 $34,665,974
================================================================================
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
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
CLASS A CLASS A CLASS A CLASS A
-------- -------- -------- --------
For the Six
Months Ended For the For the For the
September 30, 2000 Year Ended Year Ended Year Ended
(For a share outstanding throughout the period) (Unaudited) March 31, 2000 March 31, 1999 March 31, 1998
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $9.13 $9.66 $9.98 $10.00
Income from Investment Operations:
Net Investment Income 0.30 0.68<F4> 0.61 0.71<F1>
Net Realized and Unrealized Gains (Losses) on Investments (0.19) (0.47) (0.16) 0.46
------------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 0.11 0.21 0.45 1.17
------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net Investment Income - (0.63) (0.68) (0.71)
Distributions from Realized Gains on Investments - (0.11) (0.09) (0.48)
------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - (0.74) (0.77) (1.19)
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $9.24 $9.13 $9.66 $9.98
====================================================================================================================================
TOTAL RETURN<F2> 4.68%<F5> 2.26% 4.60% 12.11%
====================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $34,963,653 $32,388,650 $31,478,811 $28,617,421
====================================================================================================================================
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS 1.25%<F3> 1.26% 1.26% 1.29%
====================================================================================================================================
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS 0.85%<F3> 0.85% 0.85% 0.85%
====================================================================================================================================
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 6.70%<F3> 6.70% 7.03% 6.93%
====================================================================================================================================
PORTFOLIO TURNOVER RATE 86.72% 92.12% 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> Calculated prior to adjustment for certain book and tax income differences.
<F5> Reflects total return for the period; not annualized.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
SELECT BOND FUND
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B CLASS B CLASS B CLASS B
-------- -------- -------- --------
For the Six
Months Ended For the For the For the
September 30, 2000 Year Ended Year Ended Year Ended
(For a share outstanding throughout the period) (Unaudited) March 31, 2000 March 31, 1999 March 31, 1998
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $9.12 $9.66 $9.98 $10.00
Income from Investment Operations:
Net Investment Income 0.27 0.60<F4> 0.56 0.66<F1>
Net Realized and Unrealized Gains (Losses) on Investments (0.15) (0.46) (0.18) 0.44
------------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 0.12 0.14 0.38 1.10
------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net Investment Income - (0.57) (0.61) (0.64)
Distributions from Realized Gains on Investments - (0.11) (0.09) (0.48)
------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - (0.68) (0.70) (1.12)
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $9.24 $9.12 $9.66 $9.98
====================================================================================================================================
TOTAL RETURN<F2> 4.45%<F5> 1.49% 3.91% 11.34%
====================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $2,350,666 $2,277,324 $2,425,059 $643,332
====================================================================================================================================
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS 1.90%<F3> 1.90% 1.91% 1.94%
====================================================================================================================================
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS 1.50%<F3> 1.50% 1.50% 1.50%
====================================================================================================================================
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 6.05%<F3> 6.05% 6.38% 6.28%
====================================================================================================================================
PORTFOLIO TURNOVER RATE 86.72% 92.12% 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> Calculated prior to adjustment for certain book and tax income differences.
<F5> Reflects total return for the period; not annualized.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
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 initially consisted 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." 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. 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. Subsequently, Northwestern Mutual
transferred some of its shares to an affiliate. During the fiscal year ended
March 31, 2000, the Index 500 Stock Fund made a redemption-in-kind to this
affiliate, resulting in a net realized gain of $12,067,409 for financial
reporting purposes which, for tax purposes, is not recognized.
On July 12, 1999, two new portfolios commenced operations in the Funds: Small
Cap Growth Stock Fund and Index 400 Stock Fund. These two new funds, along with
the original nine funds, are now collectively known as "the Funds." 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% decreasing to 0% over a period of up to six years. Each class of shares has
equal rights with respect to voting privileges.
--------
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>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
-------
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,
2000, transactions in securities other than money market investments were:
<TABLE>
<CAPTION>
U.S. Gov't. U.S. Gov't.
Total Security Security Total Security Security
Fund Purchases Purchases Sales/Maturities Sales/Maturities
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SMALL CAP GROWTH STOCK FUND $6,269,441 - $4,677,720 -
------------------------------------------------------------------------------------------------------------------------------------
AGGRESSIVE GROWTH STOCK FUND 25,975,886 - 20,412,540 -
------------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL EQUITY FUND 7,474,833 - 6,397,242 -
------------------------------------------------------------------------------------------------------------------------------------
INDEX 400 STOCK FUND 11,653,217 - 7,177,117 -
------------------------------------------------------------------------------------------------------------------------------------
GROWTH STOCK FUND 9,828,654 - 10,140,360 -
------------------------------------------------------------------------------------------------------------------------------------
GROWTH AND INCOME STOCK FUND 10,445,804 - 11,648,533 -
------------------------------------------------------------------------------------------------------------------------------------
INDEX 500 STOCK FUND 10,986,255 - 3,349,513 -
------------------------------------------------------------------------------------------------------------------------------------
ASSET ALLOCATION FUND 41,021,217 $13,150,883 41,053,898 $14,049,038
------------------------------------------------------------------------------------------------------------------------------------
HIGH YIELD BOND FUND 28,477,305 - 29,070,865 -
------------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BOND FUND 25,885,464 - 24,189,185 -
------------------------------------------------------------------------------------------------------------------------------------
SELECT BOND FUND 29,345,831 13,710,478 27,709,416 12,821,637
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
--------------------------------------------------------------------------------
M A S O N S T R E E T F U N D S
--------------------------------------------------------------------------------
-------
NOTE 8
-------
Northwestern Mutual Investment Services, Inc. ("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 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
and shareholder servicing expenses; the remaining 0.65% is paid to Northwestern
Mutual for reimbursement of commissions paid to agents.
Baird received $221,600 of dealer allowances, Northwestern Mutual received
$86,955 of underwriting concessions from Class A sales charges and Northwestern
Mutual received $84,902 of contingent deferred sales charges from Class B shares
for the six months ended September 30, 2000.
Each Fund also pays the administrator, Northwestern Mutual, a monthly fee at an
annual rate of 0.10% of daily net assets 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, insurance
premiums, Directors' fees and expenses, and the
printing and mailing costs of sending reports and other information
to existing shareholders.
The 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 through March 31, 2004 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>
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
NMIS and affiliates have waived the following fees for the six months ended
September 30, 2000:
Distribution Fees
-----------------
Fund Class A Class B Other Total
--------------------------------------------------------------------------------
SMALL CAP GROWTH STOCK FUND $3,731 $712 $81,964 $86,407
--------------------------------------------------------------------------------
AGGRESSIVE GROWTH STOCK FUND _ 24 49,692 49,716
--------------------------------------------------------------------------------
INTERNATIONAL EQUITY FUND _ 8 43,804 43,812
--------------------------------------------------------------------------------
INDEX 400 STOCK FUND _ _ 92,365 92,365
--------------------------------------------------------------------------------
GROWTH STOCK FUND 441 _ 53,190 53,631
--------------------------------------------------------------------------------
GROWTH AND INCOME STOCK FUND _ 45 56,931 56,976
--------------------------------------------------------------------------------
INDEX 500 STOCK FUND 458 _ 86,135 86,593
--------------------------------------------------------------------------------
ASSET ALLOCATION FUND _ _ 40,965 40,965
--------------------------------------------------------------------------------
HIGH YIELD BOND FUND _ _ 59,252 59,252
--------------------------------------------------------------------------------
MUNICIPAL BOND FUND _ _ 51,287 51,287
--------------------------------------------------------------------------------
SELECT BOND FUND _ _ 73,017 73,017
--------------------------------------------------------------------------------
TOTAL $4,630 $789 $688,602 $694,021
--------------------------------------------------------------------------------
The Small Cap Growth Stock Fund, Aggressive Growth Stock Fund and Asset
Allocation Fund paid commissions on Fund transactions to an affiliated broker in
the amount of $996, $786 and $54, respectively, during the six months ended
September 30, 2000.
-------
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 treatment of passive foreign
investment companies and deferred wash 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, 1999, the International Equity Fund, Asset Allocation Fund,
High Yield Bond Fund, Municipal Bond Fund and Select Bond Fund had losses in the
amounts of $8,189, $2,575, $3,110,583, $32,512, and $569,885, respectively.
These amounts are deferred and deemed to have occurred in the next fiscal year.
The High Yield Bond Fund and Select Bond Fund also have a net capital loss of
$3,822,792 and $1,625, respectively, expiring in 2008. The High Yield Bond Fund
also has a net realized capital loss of $640,754, which expires in 2007. These
amounts will be carried forward to offset future net realized capital gains.
<PAGE>
--------------------------------------------------------------------------------
M A S O N S T R E E T F U N D S
--------------------------------------------------------------------------------
DIRECTORS AND OFFICERS
-----------
DIRECTORS
-----------
JAMES D. ERICSON
Chairman 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
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OFFICERS
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JAMES D. ERICSON
President
MARK G. DOLL
Vice President and Treasurer
MERRILL C. LUNDBERG
Secretary
BARBARA E. COURTNEY
Controller
