- --------------------------------------------------------------------------------
BOND FUNDS MULTI-ASSET FUND STOCK FUNDS
- --------------------------------------------------------------------------------
MASONSTREET
FUNDS/R
MARCH 31, 2000
ANNUAL REPORT
<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>
APRIL 19, 2000
LETTER TO SHAREHOLDERS
(PHOTO)
JAMES D. ERICSON
The U.S. economy and stock market entered the new millennium in an environment
of persistent economic strength and soaring stock prices. Rapidly advancing
technology and the improved productivity it is making possible are the dominant
forces behind both the economy and the stock market. The vital importance of
technology in today's world was driven home by concerns about how the change to
year 2000 dates would affect the computers that support utilities,
transportation, financial services and other aspects of our physical and
economic infrastructure. Careful preparation appears to have paid off, as Y2K
disruptions turned out to be essentially nonexistent.
Driven largely by consumer spending, the U.S. economy posted real growth above
4% for the fourth consecutive year in 1999, and there are few signs that growth
is slowing. As more and more individuals own stocks and mutual funds, trends in
the economy and the securities markets are increasingly interrelated. Consumers
feel wealthy and confident because jobs seem secure and they are making money in
the stock market. They therefore spend freely, fueling further economic growth.
During calendar year 1999, household net worth increased by an estimated 13.4%;
economists at Goldman, Sachs & Co. estimate that this increase in wealth added
1.5 percentage points to real consumer spending.
Recent reports indicate that the core rate of inflation may be increasing,
driven largely by rising oil prices and low unemployment. Recovering economies
around the world are creating demand for a variety of commodities, with the
attendant upward pressure on prices. At the same time, rising productivity may
be offsetting the inflationary impact of a tight U.S. labor market.
With five increases in interest rates in the last year and frequent warnings
that further increases are likely, the Federal Reserve has demonstrated its
determination to slow economic growth at any sign of inflation. However, the
formerly strong link between interest rates and economic growth appears to have
weakened because technology companies have been taking advantage of their
escalating stock prices to raise equity capital, rather than borrowing money to
fund growth. It is too early to tell whether the sharp drop in prices of
technology stocks in early April will hold and whether lower stock prices slow
growth in this key sector of the economy.
While hinting that rates are likely to go higher, Fed chairman Alan Greenspan
appears to remain bullish on the economy, stating recently, "I see no reason
that productivity growth cannot remain elevated, or even increase further, to
the undeniable benefit of businesses and workers." Investors' belief in the
Fed's ability to keep the economy on an even keel may be a factor in the
continuing strength of the stock market as a whole.
In recent months the market has become increasingly volatile by any measure,
with wide swings in the broad averages and breathtaking rises and falls in the
prices of individual stocks. Along with this volatility has come some evidence
of a change in investors' attitudes toward growth versus value. During the first
two months of 2000, technology stocks continued to dominate, as they have for
the last year. In March and April, the consumer and industrial stocks of the
"old economy," began to recover from the doldrums, especially on those days when
investors were bailing out of technology stocks. It is still too early to judge
whether there has been a lasting shift in market leadership, but it appears that
investors are beginning to experience disillusionment with the hope of soaring
earnings in the far-distant future, based on exciting but unproven concepts and
products. A renewed appreciation of the value inherent in assets, products and
current earnings seems to be developing, along with a realization that
underperforming stocks of some solid companies offer considerable value.
As long-term investors dedicated to a thoughtful, analytical approach to
selecting securities, we welcome this change. We continue to invest for the long
term, and we urge holders of the Mason Street Funds/R to take a long view, as
well. We offer a range of Funds to suit the needs of virtually any investor; the
objectives and performance of these Funds are summarized in the following pages.
One aspect of these Funds that is noteworthy is that even the most aggressive
ones hold securities in a mix of industry groups. While participating in market
sectors such as technology and telecommunications that seem to have especially
attractive prospects, we have avoided the temptation to become dependent on any
one industry group for performance, and we believe that this approach will
temper the volatility of these portfolios.
We encourage you to select funds based on their suitability for your long-term
goals, rather than being overly concerned with the short-term performance of any
fund or class of assets, and we hope that you will continue to invest in the
Mason Street Funds/R for many years to come.
Mason Street Funds/R
/s/ James D. Ericson
JAMES D. ERICSON
President
<PAGE>
M A S O N S T R E E T F U N D S
TABLE OF CONTENTS
PERFORMANCE SUMMARY 3
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OVERVIEW AND OUTLOOK 4
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SMALL CAP GROWTH STOCK FUND 6
- ---------------------------------------------------------------------------
AGGRESSIVE GROWTH STOCK FUND 9
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INTERNATIONAL EQUITY FUND 13
- ---------------------------------------------------------------------------
INDEX 400 STOCK FUND 17
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GROWTH STOCK FUND 23
- ---------------------------------------------------------------------------
GROWTH AND INCOME STOCK FUND 27
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INDEX 500 STOCK FUND 30
- ---------------------------------------------------------------------------
ASSET ALLOCATION FUND 37
- ---------------------------------------------------------------------------
HIGH YIELD BOND FUND 46
- ---------------------------------------------------------------------------
MUNICIPAL BOND FUND 51
- ---------------------------------------------------------------------------
SELECT BOND FUND 55
- ---------------------------------------------------------------------------
FINANCIAL STATEMENTS 60
- ---------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 93
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REPORT OF INDEPENDENT ACCOUNTANTS 98
- ---------------------------------------------------------------------------
DIRECTORS AND OFFICERS 99
- ---------------------------------------------------------------------------
<PAGE>
MARCH 31, 2000
PERFORMANCE SUMMARY
<TABLE>
<CAPTION>
For the Periods Ended March 31, 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 3/31/2000) Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
One Year N/A 87.53% 16.91% N/A 27.78% 9.95% 17.15% 31.38% 0.12% -0.10% 2.26%
- ------------------------------------------------------------------------------------------------------------------------------------
Since Inception 81.52%<F2> 173.50% 15.29% 19.81%<F2> 119.44% 73.32% 102.09% 79.65% 13.41% 18.79% 19.91%
- ------------------------------------------------------------------------------------------------------------------------------------
Annualized N/A 39.85% 4.86% N/A 29.95% 20.12% 26.43% 21.57% 4.29% 5.91% 6.24%
- ------------------------------------------------------------------------------------------------------------------------------------
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 3/31/2000) Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------------------------------
One Year N/A 78.68% 11.40% N/A 21.72% 4.70% 11.57% 25.17% -4.66% -4.84% -2.58%
- ------------------------------------------------------------------------------------------------------------------------------------
Since Inception 72.87%<F2> 160.47% 9.80% 14.11%<F2> 108.99% 65.06% 92.47% 71.10% 8.01% 13.13% 14.20%
- ------------------------------------------------------------------------------------------------------------------------------------
Annualized N/A 37.59% 3.17% N/A 27.85% 18.18% 24.39% 19.60% 2.60% 4.20% 4.53%
- ------------------------------------------------------------------------------------------------------------------------------------
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 3/31/2000) Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------------------------------
One Year N/A 86.13% 16.10% N/A 27.02% 9.28% 16.30% 30.47% -0.54% -0.75% 1.49%
- ------------------------------------------------------------------------------------------------------------------------------------
Since Inception 80.95%<F2> 168.10% 13.11% 19.38%<F2> 115.39% 70.07% 98.21% 76.21% 11.01% 16.39% 17.41%
- ------------------------------------------------------------------------------------------------------------------------------------
Annualized N/A 38.92% 4.19% N/A 29.14% 19.36% 25.61% 20.78% 3.54% 5.19% 5.50%
- ------------------------------------------------------------------------------------------------------------------------------------
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 3/31/2000) Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------------------------------
One Year N/A 81.13% 11.10% N/A 22.02% 4.28% 11.30% 25.47% -5.07% -5.49% -3.24%
- ------------------------------------------------------------------------------------------------------------------------------------
Since Inception 75.95%<F2> 165.10% 10.11% 14.38%<F2> 112.39% 67.07% 95.21% 73.21% 8.63% 13.39% 14.67%
- ------------------------------------------------------------------------------------------------------------------------------------
Annualized N/A 38.40% 3.26% N/A 28.54% 18.66% 24.98% 20.09% 2.80% 4.28% 4.67%
- ------------------------------------------------------------------------------------------------------------------------------------
</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. Reflects total return for the period 7/12/99 -
3/31/00. Returns are not annualized.
<F3> Class A performance reflects the maximum sales charge of 4.75%.
<F4> Class B performance reflects a contingent deferred sales charge (CDSC) of
5% for One Year and 3% for Since Inception.
N/A - Not Applicable
<PAGE>
M A S O N S T R E E T F U N D S
OVERVIEW AND OUTLOOK
- ------------
THE ECONOMY
- ------------
The current period of economic expansion in the United States, with its
unparalleled combination of rapid growth and low inflation, is the longest in
U.S. history. After nine boom years, and despite five interest rate hikes in the
last year, growth continues to race ahead. It now appears that annualized growth
in the first quarter of 2000 will be 5% or more, after three consecutive years
of real growth over 4%. For the full year, prevailing forecasts now call for
real economic growth between 4% and 5%, with inflation remaining below 3%.
Recent economic reports show that consumer spending, manufacturing, production
and productivity gains all remain strong. Consumer spending is being driven by
two key forces: exceptionally strong job markets and the wealth effect of
soaring stock prices. One or both of these influences will have to wane before
there will be any lasting slowdown in consumer demand.
Economists are divided on whether inflation is accelerating, as it would be
expected to do in the current very tight labor market. March reports of both
producer and consumer prices showed larger increases than in recent months, but
most of the increases were attributed to higher energy prices. Technological
advances continue to improve productivity, balancing the effect of low
unemployment and increasing prices of some commodities.
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% 2.7%
Source: U.S. Department of Commerce. Year-to-year percentage change in Real
Gross Domestic Product is used for real economic growth. December-to-December
percentage change in the Consumer Price Index - Urban is used for the inflation
rate.
- ------------------
THE EQUITY MARKET
- ------------------
In the first quarter of 2000, the stock market continued to move generally up,
but with greatly increased volatility and some changes in market leadership. For
the 12 months ended March 31, the broad S&P 500/R Index was up 16.5%; the blue-
chip Dow Jones Industrial Average gained 11.6%; and the technology-laden Nasdaq
index soared 85.8%. Through most of 1999, market performance was dominated by
technology stocks, especially internet-related companies, and a few favorite
large growth stocks. The market has been very nervous, driving individual stock
prices down precipitously at any hint of disappointing revenues or earnings.
After peaking on March 10, the market began to move generally downward with
dramatically increased volatility. On several days there were swings of several
hundred points in all the major averages. By the middle of April, more than half
the stocks in the S&P 500/R Index were down 30% or more from their 52-week
highs. The greatest drops were in previously high-flying technology stocks, many
of which lost 50% or more of their market value. As we go to press in mid-April,
it is too early to determine whether a bear market has begun, or whether we are
simply experiencing a pause in the long-term upward trend in stock prices. The
strength of "old economy" stocks relative to technology shares in this
turbulent market is a strong signal that investors are once again taking an
interest in the quality represented by companies with familiar products and real
earnings.
Market stability could be helped by strong earnings reports in the first quarter
and later in the year, especially if earnings are becoming more important to
investors. The consensus appears to be that 2000 will be another record-breaking
year for profits. Earnings of the technology sector are projected to be 35%
higher than last year, and estimates of earnings growth for the S&P 500/R Index
range from 12% to almost 18%. This rapid rate of earnings growth, following an
increase of 14% in 1999, is highly unusual in an expansion that has continued
for many years.
<PAGE>
MARCH 31, 2000
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
- ----------------
THE BOND MARKET
- ----------------
Interest rates on long-term bonds moved up significantly during 1999 and then
began to drop in January of this year. The yield on 30-year Treasury bonds was
6.19% on March 31, 2000, versus 6.5% at the end of 1999 and 5.1% at the
beginning of the year. Total return on long-term corporate bonds, measured by
the Merrill Lynch Domestic Master Index, was 1.95% for the 12 months ended March
31, 2000, as falling prices partially offset coupon income.
Over the last year, the Federal Reserve has steadily raised the Federal Funds
rate (the only rate it can control directly) with the intention to cool the
economy and suppress inflation by increasing interest rates in general. However,
the expectation of low inflation has increased demand and therefore prices of
long-term fixed-income securities. When the price of bonds goes up, their yield,
or interest rate, goes down. Rates on long-term bonds have therefore experienced
only a very modest net increase in the last year, even though short-term rates
are up more than a full percentage point. The result is a phenomenon called an
inverted yield curve, with long-term rates lower than short-term rates.
Ordinarily, yields on long-term bonds are higher than on short-term bonds
because investors require a premium to commit for a long time period, especially
if inflation is anticipated.
Several other factors are further complicating the bond market. The Treasury
Department has announced that it will buy back outstanding 30-year bonds, and
there have been hints that no new 30-year Treasury bonds will be issued. These
actions have the potential to reduce the supply of fixed-income securities at
the same time that the expectation of continued low inflation is increasing
demand. Even though the actual volume of government purchases is small relative
to the overall bond market, the perception of reduced supply of long-term
government bonds is resulting in higher prices and lower interest rates on long-
term government bonds. An even more important influence on the bond market is
the flight to the safety of Treasury bonds that has been spurred by the recent
statement that the U.S. Treasury does not necessarily back the debt of
government agencies such as FNMA and GNMA. This announcement, at a time when
agency debt was already cheap on a relative basis, has produced an unusually
wide spread between rates on government and agency securities. Spreads have also
increased between government and corporate bonds, which have moved in line with
agency securities.
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>
M A S O N S T R E E T F U N D S
SMALL CAP GROWTH STOCK FUND
- ----------------------------
SMALL CAP GROWTH STOCK FUND
- ----------------------------
- --------------------------------------------------------------------------------
OBJECTIVE: To achieve long-term growth of capital primarily by investing in the
common stocks of companies that can reasonably be expected to increase their
sales and earnings at a pace that will exceed the growth rate of the U.S.
economy over an extended period.
PORTFOLIO: Primarily common stocks of small-capitalization companies.
STRATEGY: To locate and invest in companies with above-average potential for
growth.
NET ASSETS: $12.0 million
- --------------------------------------------------------------------------------
The Small Cap Growth Stock Fund owns the stocks of emerging growth companies,
with the objective of maintaining a median market capitalization of $1 billion.
The range of market capitalization is generally 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.
Since it was launched in July 1999, the Small Cap Growth Stock Fund has
generated returns substantially higher than the indices with which it is
compared. The Fund benefited especially from participation in a number of
initial public offerings (IPOs) which experienced almost immediate appreciation;
in selecting holdings of these newly-public companies, the focus is on
profitability rather than simply on revenue growth. Out of a total return of
81.5% since the Fund's inception, management estimates that IPO holdings
contributed 37.8% of that total with the remaining 43.7% resulting from non-IPO
holdings. In several cases, total market values of small-capitalization stocks
have increased so much that it has become necessary to sell them in order to
maintain the portfolio's market capitalization target.
The largest concentration of holdings is in the broadly-defined technology
sector, where there are many opportunities for growth. Major current technology
holdings are Advent, a software developer, and Kent Electronics, a semiconductor
distributor and contract manufacturer. In this fast-growing industry, the Fund
has benefited from several buyouts of former holdings, including Clarify, which
was purchased by Northern Telecom and Etech, which was acquired by Applied
Materials. Several recent investments have been in the healthcare field, where
specialty pharmaceuticals, hospital management companies and well-established
biotech companies have substantial appeal. In the consumer sector, major
holdings include specialty retailers such as Talbots and MSC Industrial Direct.
SECTOR ALLOCATION
3/31/00
Technology 38%
Consumer 20%
Healthcare 10%
Business and Communication Services 8%
Basic Materials/Capital Goods 7%
Energy 6%
Finance 5%
Transportation 3%
Cash Equivalents 3%
TOP 10 EQUITY HOLDINGS
3/31/00
Company % Net Assets
- --------------------------------------------------
Advent Software, Inc. 2.4%
Waddell & Reed Financial, Inc. -
Class A 2.3%
SmartForce Public Limited
Company, ADR 2.3%
Kent Electronics Corporation 2.2%
Stone Energy Corporation 2.1%
The Corporate Executive Board Company 2.1%
MSC Industrial Direct Co., Inc. -
Class A 2.1%
Power-One, Inc. 2.1%
Applied Materials, Inc. 2.0%
The Talbots, Inc. 2.0%
<PAGE>
MARCH 31, 2000
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
- --------------------------------------------------------------------------------
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 17,595 11,185 11,839
TOTAL RETURN
Since
For the period ended March 31, 2000 Inception<F1>
- -------------------------------------------------------------------
Small Cap Growth Stock Fund
(Class A - without initial sales charge) 81.52%
- -------------------------------------------------------------------
S&P 600 Stock Fund Index 11.85%
- -------------------------------------------------------------------
Russell 2000 Stock Fund Index 18.39%
- -------------------------------------------------------------------
<F1> Fund inception date is 7/12/99. Reflects total return for the period
7/12/99 - 3/31/00. Returns are not annualized.
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 March 31, 2000, the 600 companies in the composite had a
median market capitalization of $459 million and total market value of $386
billion. The SmallCap 600 represents approximately 2.2% of the market value of
Compustat's database of over 8,100 equities.
The Russell 2000 Index measures the performance of the 2,000 smallest companies
in the Russell 3000 Index. The Russell 3000 Index measures the performance of
the 3,000 largest U.S. companies based on total market capitalization. These
3,000 companies represent approximately 98% of the investable U.S. equity
market. As of the latest reconstitution, the average market capitalization of
companies in the Russell 3000 was $4.5 billion; the median market capitalization
$723 million. Market capitalization of companies in the Index ranged from $432.7
billion to $27.8 million. The Russell 2000 Index represents approximately 8% of
the total market capitalization of the Russell 3000. As of the latest
reconstitution, the average market capitalization of companies in the Russell
2000 was approximately $533 million; the median market capitalization was
approximately $428 million. The largest company in the index had a total market
capitalization of approximately $3.4 billion.
This graph assumes an initial investment of $10,000 made in Class A and Class B
shares, with all sales charges on July 12, 1999 (commencement of operations).
Returns shown include fee waivers and deductions for all Fund expenses. In the
absence of fee waivers, total return would be reduced. Past performance is not
predictive of future performance. Investment return and principal value will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. Returns on p. 3 reflect the maximum sales charge for Class
A and a 5% contingent deferred sales charge for Class B Since Inception.
Stocks of smaller or newer companies, such as those held in this Fund, are more
likely to realize more substantial growth as well as suffer more significant
losses than larger or more established issuers. Investments in such companies
can be both more volatile and more speculative.
SCHEDULE OF INVESTMENTS
Shares/Par Market Value
-------------------------------------------------------------------------
COMMON STOCK (97.1%)
BASIC MATERIALS (1.2%)
Cambrex Corporation 3,400 $147,900
-------------------------------------------------------------------------
BUSINESS SERVICES (4.6%)
<F1> The Corporate Executive Board Company 5,000 253,750
<F1> Forrester Research, Inc. 3,200 173,600
Hooper Holmes, Inc. 2,000 68,625
<F1> Romac International, Inc. 6,000 54,375
-------------------------------------------------------------------------
TOTAL 550,350
-------------------------------------------------------------------------
CAPITAL GOODS (5.7%)
<F1> Dycom Industries Inc. 3,400 165,750
Kaydon Corporation 3,900 106,519
<F1> Power-One Inc. 4,100 247,537
<F1> Tetra Tech, Inc. 7,100 168,625
-------------------------------------------------------------------------
TOTAL 688,431
-------------------------------------------------------------------------
COMMUNICATION SERVICES (2.9%)
<F1> Crown Castle International Corp. 3,700 140,138
<F1> Pinnacle Holdings, Inc. 1,500 82,875
<F1> TESSCO Technologies Incorporated 6,200 127,875
-------------------------------------------------------------------------
TOTAL 350,888
-------------------------------------------------------------------------
CONSUMER CYCLICAL (15.2%)
<F1> Avenue A, Inc. 800 24,400
<F1> Catalina Marketing Corporation 1,100 111,375
<F1> David's Bridal, Inc. 6,200 74,788
<F1> Dollar Tree Stores, Inc. 1,800 93,825
<F1> Getty Images, Inc. 5,200 186,875
<F1> Heidrick & Struggles International, Inc. 1,300 52,163
<F1> Hotel Reservations Network, Inc. - Class A 4,000 71,000
<F1> Jupiter Communications, Inc. 4,200 96,600
<F1> Linens 'N Things, Inc. 2,600 89,050
<F1> MSC Industrial Direct Co., Inc. - Class A 13,800 248,400
<F1> The Management Network Group, Inc. 6,400 172,400
<F1> O'Reilly Automotive, Inc. 7,000 99,312
The Talbots, Inc. 4,100 241,387
<F1> Tower Automotive, Inc. 7,000 114,625
<F1> Whitehall Jewellers, Inc. 2,600 61,100
<F1> Wild Oats Markets, Inc. 4,500 92,250
-------------------------------------------------------------------------
TOTAL 1,829,550
-------------------------------------------------------------------------
CONSUMER STAPLES (4.8%)
<F1> Acme Communications, Inc. 5,700 130,387
<F1> American Italian Pasta Company - Class A 4,900 120,663
<F1> Citadel Communications Corporation 2,000 84,375
<F1> Westwood One, Inc. 6,500 235,624
-------------------------------------------------------------------------
TOTAL 571,049
-------------------------------------------------------------------------
<PAGE>
M A S O N S T R E E T F U N D S
SMALL CAP GROWTH STOCK FUND
Shares/Par Market Value
-------------------------------------------------------------------------
ENERGY (5.7%)
<F1> Global Industries, Ltd. 12,500 $182,812
<F1> Nabors Industries, Inc. 6,200 240,638
<F1> Stone Energy Corporation 5,200 256,100
-------------------------------------------------------------------------
TOTAL 679,550
-------------------------------------------------------------------------
FINANCE (5.1%)
<F1> Charles River Associates Incorporated 3,300 64,144
Investors Financial Services Corp. 2,200 129,525
Radian Group, Inc. 2,900 138,112
Waddell & Reed Financial, Inc. - Class A 6,600 279,263
-------------------------------------------------------------------------
TOTAL 611,044
-------------------------------------------------------------------------
HEALTHCARE (10.4%)
<F1> Aspect Medical Systems, Inc. 1,400 50,225
<F1> Biovail Corporation 4,000 177,250
<F1> Isis Pharmaceuticals, Inc. 6,100 85,781
<F1> Patterson Dental Company 3,300 126,225
<F1> Priority Healthcare Corporation - Class B 2,900 145,725
<F1> Province Healthcare Company 6,800 194,650
<F1> Shire Pharmaceuticals Group PLC, ADR 3,700 189,625
<F1> Sybron International Corporation 5,200 150,800
<F1> Universal Health Services, Inc. - Class B 1,000 49,000
<F1> Wesley Jessen VisionCare, Inc. 2,300 82,657
-------------------------------------------------------------------------
TOTAL 1,251,938
-------------------------------------------------------------------------
TECHNOLOGY (38.6%)
<F1> Advent Software, Inc. 6,200 284,425
<F1> Applied Materials, Inc. 2,596 244,673
<F1> Aspen Technology, Inc. 3,800 153,425
<F1> Avanex Corporation 500 75,875
<F1> CAIS Internet, Inc. 2,100 50,794
<F1> CDW Computer Centers, Inc. 2,100 177,319
<F1> Copper Mountain Networks, Inc. 1,500 122,906
<F1> Cymer, Inc. 3,700 185,000
<F1> Diversinet Corp. 5,400 96,525
<F1> Documentum, Inc. 1,000 78,000
<F1> Engage Technologies, Inc. 800 61,050
<F1> Eprise Corporation 1,300 20,475
<F1> Extensity, Inc. 1,500 72,000
<F1> FreeShop.com, Inc. 4,800 93,600
<F1> Great Plains Software, Inc. 2,700 144,112
<F1> Inet Technologies, Inc. 3,500 185,281
<F1> Infonautics, Inc. - Class A 5,400 44,550
<F1> Inforte Corp. 2,300 112,700
<F1> InterVoice-Brite, Inc. 4,600 132,825
<F1> Kent Electronics Corporation 8,900 259,769
<F1> MMC Networks, Inc. 2,100 69,300
<F1> Metasolv Software, Inc. 1,600 94,500
Shares/Par Market Value
-------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
<F1> Natural MicroSystems Corporation 1,600 $137,200
<F1> Neoforma.com, Inc. 3,300 54,037
<F1> PMC-Sierra, Inc. 1,100 224,056
<F1> Plexus Corp. 1,700 113,262
<F1> Predictive Systems, Inc. 1,500 68,344
<F1> QLogic Corporation 1,000 135,500
<F1> Scient Corporation 600 54,413
<F1> Semtech Corporation 2,700 172,969
<F1> SmartForce Public Limited Company, ADR 5,900 270,663
<F1> Telocity, Inc. 200 2,475
<F1> TIBCO Software, Inc. 1,200 97,800
<F1> Tollgrade Communications, Inc. 2,800 148,400
<F1> UTStarcom, Inc. 2,700 210,769
<F1> Viant Corporation 2,200 73,700
<F1> Viasystems Group, Inc. 7,500 116,250
-------------------------------------------------------------------------
TOTAL 4,638,942
-------------------------------------------------------------------------
TRANSPORTATION (2.9%)
C.H. Robinson Worldwide, Inc. 4,400 163,900
SkyWest, Inc. 4,800 187,800
-------------------------------------------------------------------------
TOTAL 351,700
-------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost $9,066,032) 11,671,342
=========================================================================
MONEY MARKET INVESTMENTS (6.6%)
FEDERAL GOVERNMENT AND AGENCIES (0.8%)
<F2> Federal Home Loan Bank,
5.68%, 4/20/00 100,000 99,700
-------------------------------------------------------------------------
FINANCE LESSOR (5.8%)
CXC Incorporated, 6.25%, 4/3/00 700,000 699,757
-------------------------------------------------------------------------
TOTAL MONEY MARKET INVESTMENTS
(Cost $799,457) 799,457
=========================================================================
TOTAL INVESTMENTS (103.7%)
(Cost $9,865,489)<F3> 12,470,799
=========================================================================
OTHER ASSETS, LESS LIABILITIES (-3.7%) (444,673)
=========================================================================
TOTAL NET ASSETS (100.0%) $12,026,126
=========================================================================
<F1> Non-Income Producing
ADR - American Depository Receipt
<F2> Securities segregated or earmarked as collateral for futures and delayed
settlements. There were no open futures contracts as of March 31, 2000.
<F3> At March 31, 2000, the aggregate cost of securities for federal income tax
purposes was $9,883,664 and the net unrealized appreciation of investments
based on that cost was $2,587,135 which is comprised of $2,919,246
aggregate gross unrealized appreciation and $332,111 aggregate gross
unrealized depreciation.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
MARCH 31, 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: $96.2 million
- --------------------------------------------------------------------------------
The Aggressive Growth Stock Fund owns the stocks of emerging growth companies
with market capitalizations generally in the range of $1 billion to $10 billion.
Since growth stock portfolios tend to react strongly to changes in financial and
economic markets, as well as to changes in the prospects for individual
companies, returns of this Fund can vary considerably from time to time. A
higher level of risk (with risk defined as variability of returns over time) is
accepted for the potential of greater long-term returns.
Over the 12 months ended March 2000, the Fund achieved a total return of 87.53%,
compared with 38.10% for the S&P MidCap 400 Index.
The Fund's focus in stock selection is on the individual companies' ability to
generate revenue, expand profit margins and maintain solid balance sheets;
industry sector selection is of secondary importance. However, because
opportunities tend to cluster in certain industry groups, there is a significant
concentration in the technology sector, with a secondary concentration in
consumer cyclicals, particularly in the retail industry. Within the technology
sector, holdings are selected from stocks that are either generating current
earnings or have the operating leverage to become profitable within a year.
Though less diverse than the broad S&P MidCap 400 Index, the Fund is more
diversified than many of the funds with which it is compared; this diversity has
proven valuable as the market has become increasingly volatile.
In recent months, new positions have been taken in established biotechnology
companies such as Medimmune and Sepracor. Participation in the energy sector has
been increased with holdings including Cooper Cameron, an oil service company,
and Dynegy, an independent power producer that is well positioned to take
advantage of deregulation in the electric utility industry.
SECTOR ALLOCATION
3/31/00
Technology 51%
Energy 12%
Consumer 9%
Cash Equivalents 8%
Capital Goods 7%
Healthcare 7%
Finance 3%
Business and Communication Services 2%
Transportation 1%
TOP 10 EQUITY HOLDINGS
3/31/00
Company % Net Assets
- ----------------------------------------------
Peregrine Systems, Inc. 2.7%
JDS Uniphase Corporation 2.7%
Gemstar International Group Limited 2.7%
Sanmina Corporation 2.7%
Comverse Technology, Inc. 2.6%
Jabil Circuit, Inc. 2.5%
Network Appliance, Inc. 2.4%
Microchip Technology Incorporated 2.2%
Dynegy, Inc. - Class A 2.2%
Weatherford International, Inc. 2.2%
<PAGE>
M A S O N S T R E E T F U N D S
AGGRESSIVE GROWTH STOCK FUND
PERFORMANCE RELATIVE TO RELEVANT INDICES
<TABLE>
<CAPTION>
AGGRESSIVE
GROWTH STOCK
AGGRESSIVE AGGRESSIVE FUND
GROWTH GROWTH CLASS B WILSHIRE WILSHIRE S&P
STOCK FUND STOCK FUND REDEMPTION SMALL CAP NEXT 1750 MIDCAP 400
CLASS A CLASS B VALUE INDEX INDEX INDEX
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
3/31/97 9,524 10,000 10,000 10,000 10,000
9/30/97 13,152 13,770 13,503 13,454 13,313
3/31/98 14,436 15,059 14,644 14,580 14,903
9/30/98 11,329 11,783 10,730 11,115 12,475
3/31/99 13,890 14,404 12,662 12,517 14,969
9/30/99 16,470 17,024 14,164 13,602 15,650
3/31/00 26,510 26,810 26,510 19,070 15,838 20,669
</TABLE>
TOTAL RETURN Average
Annual
One Since
For the periods ended March 31, 2000 Year Inception<F1>
- -----------------------------------------------------------------------------
Aggressive Growth Stock Fund
(Class A - without initial sales charge) 87.53% 39.85%
- -----------------------------------------------------------------------------
Wilshire Small Cap Index 43.48% 23.98%
- -----------------------------------------------------------------------------
Wilshire Next 1750 Index 43.59% 16.55%
- -----------------------------------------------------------------------------
S&P MidCap 400 Index 38.10% 27.35%
- -----------------------------------------------------------------------------
<F1> Fund inception date is 3/31/97. Returns are annualized.
Since the Fund invests primarily in medium-capitalization (Mid Cap) issues, the
index that best reflects the Fund's performance is the S&P MidCap 400 Index. 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 March 31,
2000, the 400 companies in the composite had a median market capitalization of
$1.7 billion and a total market value of $1,022.6 billion. The MidCap 400
represents approximately 6% of the market value of S&P's database of about 8,100
equities. Because the average market capitalization of the Aggressive Growth
Stock Fund has recently increased, the S&P MidCap 400 Index is more
representative of the current composition of this Portfolio than the Wilshire
Next 1750 Index and Wilshire Small Cap Index, which are the small-capitalization
indices used in the past.
The Wilshire Next 1750 is an unmanaged, equally weighted index. Included in this
index are those stocks which are ranked 750 to 2500 by market capitalization in
the Wilshire 5000. The largest sectors represented in this index are technology,
materials and services, and consumer non-durables. Its average market
capitalization is approximately $997 million as of March 31, 2000.
The Wilshire Small Cap Index is a subset of the Wilshire Next 1750 and includes
250 stocks chosen based upon their size, sector and liquidity characteristics.
Each stock is equally weighted in this unmanaged index. The largest sectors
represented in this index are technology, materials and services, and consumer
non-durables. Its average market capitalization is approximately $1.1 billion as
of March 31, 2000.
This graph assumes an initial investment of $10,000 made in Class A and Class B
shares, with all sales charges on March 31, 1997 (commencement of operations).
Returns shown include fee waivers and deductions for all Fund expenses. In the
absence of fee waivers, total return would be reduced. Past performance is not
predictive of future performance. Investment return and principal value will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. Returns on p. 3 reflect the maximum sales charge for Class
A and a 5% contingent deferred sales charge for Class B One Year and 3% for
Since Inception.
Stocks of smaller or newer companies, such as those held in this Fund, are more
likely to realize more substantial growth as well as suffer more significant
losses than larger or more established issuers. Investments in such companies
can be both more volatile and more speculative.
<PAGE>
MARCH 31, 2000
AGGRESSIVE GROWTH STOCK FUND
SCHEDULE OF INVESTMENTS
Shares/Par Market Value
-------------------------------------------------------------------------
COMMON STOCK (92.0%)
BUSINESS SERVICES (1.1%)
<F1> The Corporate Executive
Board Company 17,419 $884,014
<F1> Robert Half International, Inc. 3,200 151,800
-------------------------------------------------------------------------
TOTAL 1,035,814
-------------------------------------------------------------------------
CAPITAL GOODS (6.7%)
<F1> Credence Systems Corporation 4,600 575,575
<F1> Jabil Circuit, Inc. 55,200 2,387,400
Kaydon Corporation 14,300 390,569
<F1> RSA Security, Inc. 9,900 512,944
<F1> Sanmina Corporation 37,844 2,556,835
-------------------------------------------------------------------------
TOTAL 6,423,323
-------------------------------------------------------------------------
COMMUNICATION SERVICES (0.9%)
<F1> Allegiance Telecom, Inc. 1,950 157,219
<F1> Crown Castle International Corp. 15,300 579,487
<F1> Level 3 Communications, Inc. 1,300 137,475
-------------------------------------------------------------------------
TOTAL 874,181
-------------------------------------------------------------------------
CONSUMER CYCLICAL (6.0%)
<F1> Catalina Marketing Corporation 7,200 729,000
Cintas Corporation 22,350 875,840
<F1> Dollar Tree Stores, Inc. 10,200 531,675
<F1> Getty Images, Inc. 38,100 1,369,219
<F1> Kohl's Corporation 9,800 1,004,500
<F1> Linens 'N Things, Inc. 14,300 489,775
<F1> O'Reilly Automotive, Inc. 16,800 238,350
<F1> Tower Automotive, Inc. 33,882 554,818
-------------------------------------------------------------------------
TOTAL 5,793,177
-------------------------------------------------------------------------
CONSUMER STAPLES (3.1%)
<F1> American Tower Corporation - Class A 11,900 587,563
<F1> Clear Channel Communications, Inc. 10,262 708,720
<F1> Entercom Communications Corp. - Class A 15,000 765,000
<F1> Insight Communications
Company, Inc. - Class A 12,900 266,062
<F1> Lamar Advertising Company - Class A 14,300 650,650
-------------------------------------------------------------------------
TOTAL 2,977,995
-------------------------------------------------------------------------
ENERGY (12.5%)
Anadarko Petroleum Corporation 25,800 998,137
<F1> BJ Services Company 27,400 2,024,175
<F1> Cooper Cameron Corporation 16,100 1,076,688
Dynegy, Inc. - Class A 33,500 2,102,125
<F1> Nabors Industries, Inc. 31,700 1,230,356
Santa Fe International Corporation 47,300 1,750,100
Shares/Par Market Value
-------------------------------------------------------------------------
ENERGY (CONTINUED)
Tosco Corporation 23,300 $709,194
<F1> Weatherford International, Inc. 35,600 2,098,175
-------------------------------------------------------------------------
TOTAL 11,988,950
-------------------------------------------------------------------------
FINANCE (2.6%)
Investors Financial Services Corp. 21,100 1,242,262
<F1> Knight/Trimark Group, Inc. - Class A 15,500 790,500
Radian Group, Inc. 9,953 474,012
-------------------------------------------------------------------------
TOTAL 2,506,774
-------------------------------------------------------------------------
HEALTHCARE (7.4%)
<F1> Elan Corporation PLC, ADR 26,200 1,244,500
<F1> Health Management Associates, Inc. - Class A 32,200 458,850
<F1> Lincare Holdings, Inc. 12,400 351,850
<F1> MedImmune, Inc. 3,800 661,675
<F1> Patterson Dental Company 19,650 751,612
<F1> Province Healthcare Company 12,600 360,675
<F1> Sepracor, Inc. 6,600 480,563
<F1> Shire Pharmaceuticals Group PLC, ADR 21,200 1,086,500
Stryker Corporation 10,000 697,500
<F1> Sybron International Corporation 35,700 1,035,300
-------------------------------------------------------------------------
TOTAL 7,129,025
-------------------------------------------------------------------------
TECHNOLOGY (51.0%)
<F1> ADC Telecommunications, Inc. 23,300 1,255,287
<F1> Altera Corporation 18,200 1,624,350
<F1> Applied Materials, Inc. 11,162 1,052,018
<F1> BEA Systems, Inc. 7,200 528,300
<F1> Bluestone Software, Inc. 4,500 151,875
<F1> Business Objects S.A., ADR 3,300 328,350
<F1> C-Cube Microsystems, Inc. 9,000 655,312
<F1> CDW Computer Centers, Inc. 10,900 920,369
<F1> CIENA Corporation 6,200 781,975
<F1> Comverse Technology, Inc. 13,250 2,504,250
<F1> Concord EFS, Inc. 39,225 899,723
<F1> Conexant Systems, Inc. 10,800 766,800
<F1> Copper Mountain Networks, Inc. 12,300 1,007,831
<F1> DST Systems, Inc. 15,900 1,032,506
<F1> Electronic Arts, Inc. 8,900 633,569
<F1> Fiserv, Inc. 24,586 914,292
<F1> Foundry Networks, Inc. 5,500 790,625
<F1> Gemstar International Group Limited 30,082 2,587,052
W.W. Grainger, Inc. 12,400 672,700
<F1> Great Plains Software, Inc. 15,300 816,638
<F1> Intuit, Inc. 14,200 772,125
<F1> JDS Uniphase Corporation 21,500 2,592,094
<F1> Keane, Inc. 20,600 520,150
<PAGE>
M A S O N S T R E E T F U N D S
AGGRESSIVE GROWTH STOCK FUND
Shares/Par Market Value
-------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
<F1> MMC Networks, Inc. 13,600 $448,800
<F1> Microchip Technology Incorporated 32,850 2,159,888
<F1> NTL Incorporated 11,300 1,048,781
<F1> Network Appliance, Inc. 27,800 2,300,450
<F1> Novellus Systems, Inc. 30,600 1,717,425
PE Corp-PE Biosystems Group 12,000 1,158,000
<F1> PMC-Sierra, Inc. 8,900 1,812,819
Paychex, Inc. 29,515 1,545,848
<F1> Peregrine Systems, Inc. 39,300 2,635,556
<F1> QLogic Corporation 13,400 1,815,700
<F1> Rational Software Corporation 7,000 535,500
<F1> Register.com, Inc. 800 55,600
<F1> Sapient Corporation 4,700 394,213
<F1> Scient Corporation 4,700 426,231
<F1> Semtech Corporation 20,600 1,319,688
<F1> SilverStream Software, Inc. 2,500 184,688
<F1> TIBCO Software, Inc. 8,000 652,000
<F1> Tellabs, Inc. 20,800 1,310,075
<F1> VeriSign, Inc. 7,300 1,091,350
<F1> Viant Corporation 15,600 522,600
<F1> Vignette Corporation 9,000 1,442,250
<F1> Waters Corporation 7,300 695,325
-------------------------------------------------------------------------
TOTAL 49,080,978
-------------------------------------------------------------------------
TRANSPORTATION (0.7%)
Expeditors International of Washington, Inc. 17,200 683,700
-------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost $51,978,075) 88,493,917
=========================================================================
MONEY MARKET INVESTMENTS (4.8%)
FEDERAL GOVERNMENT AND AGENCIES (0.3%)
<F2> Federal National Mortgage
Association, 5.70%, 4/10/00 300,000 299,573
-------------------------------------------------------------------------
FINANCE LESSORS (2.7%)
Preferred Receivable Funding,
6.06%, 5/10/00 1,300,000 1,291,466
Triple A One Funding,
6.05%, 4/28/00 1,300,000 1,294,101
-------------------------------------------------------------------------
TOTAL 2,585,567
-------------------------------------------------------------------------
Shares/Par Market Value
-------------------------------------------------------------------------
PERSONAL CREDIT INSTITUTIONS (0.5%)
General Electric Capital Corporation,
6.18%, 4/3/00 500,000 $499,828
-------------------------------------------------------------------------
SHORT TERM BUSINESS CREDIT (1.3%)
American Express Credit,
6.03%, 5/1/00 1,300,000 1,293,467
-------------------------------------------------------------------------
TOTAL MONEY MARKET INVESTMENTS
(COST $4,678,435) 4,678,435
=========================================================================
TOTAL INVESTMENTS (96.8%)
(COST $56,656,510)<F3> 93,172,352
=========================================================================
OTHER ASSETS, LESS LIABILITIES (3.2%) 3,076,853
=========================================================================
TOTAL NET ASSETS (100.0%) $96,249,205
=========================================================================
<F1> Non-Income Producing
ADR - American Depository Receipt
<F2> Securities segregated or earmarked as collateral for futures and delayed
settlements. There were no open futures contracts as of March 31, 2000.
<F3> At March 31, 2000, the aggregate cost of securities for federal income tax
purposes was $56,713,493 and the net unrealized appreciation of investments
based on that cost was $36,458,859 which is comprised of $38,168,839
aggregate gross unrealized appreciation and $1,709,980 aggregate gross
unrealized depreciation.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
MARCH 31, 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: $38.4 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.
As in the United States, prices of international technology, communication and
media stocks have increased dramatically over the last 12 months, while stock
prices in almost every other sector have been sluggish and, in many cases, down
significantly. This extreme divergence between "new economy" and "old economy"
equities has been the main reason the International Equity Fund, which is
managed with a strong focus on value, has underperformed its benchmark, the EAFE
Index. In addition, the Fund has been underweighted in Japan and other Asian
markets, which have recovered from the problems of two years ago far more
rapidly than seems warranted by underlying economic conditions.
Balancing this underweighting in certain rising markets, selection of well-
performing stocks contributed to returns. The two largest holdings in the
portfolio, Nomura and Sony, are Japanese stocks that have performed very well.
Telefonos de Mexico and other telecommunications companies in Latin America and
elsewhere have also contributed to performance.
The majority of the portfolio is positioned in Europe, where there are many
companies that have significant opportunities for sustainable earnings growth.
Many European companies are improving competitiveness and profitability by
reducing excess capacity, cost cutting and restructuring. Holdings include
stocks that offer particular value in industries such as insurance and
aerospace.
The International Equity Fund is managed for Northwestern Mutual Investment
Services, LLC by Templeton Investment Counsel, Inc. The Fund's management
remains committed to its value-oriented approach, based on the belief that
buying quality stocks at bargain prices is the key to long-term investment
success.
ASSET ALLOCATION
3/31/00
Continental Europe 28%
United Kingdom 16%
Latin America 13%
Other Asia 11%
Short-term Investments 9%
Japan 9%
Australia/New Zealand 6%
North America 6%
Other Regions 2%
TOP 10 EQUITY HOLDINGS
3/31/00
Company % Net Assets
- ----------------------------------------------
The Nomura Securities Co., Ltd. 2.7%
Sony Corporation 2.4%
Telefonos de Mexico S.A. 2.3%
Aventis S.A. 2.1%
Alcatel S.A. 2.0%
Celltech Group PLC 2.0%
Hyundai Electronics Industries Co. 1.9%
Hutchison Whampoa, Ltd. 1.8%
Telefonica de Argentina S.A. 1.8%
Nycomed Amersham PLC 1.6%
<PAGE>
M A S O N S T R E E T F U N D S
INTERNATIONAL EQUITY FUND
PERFORMANCE RELATIVE TO EAFE INDEX
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 11,011 15,870
TOTAL RETURN Average
Annual
One Since
For the periods ended March 31, 2000 Year Inception<F1>
- ------------------------------------------------------------------------
International Equity Fund
(Class A - without initial sales charge) 16.91% 4.86%
- ------------------------------------------------------------------------
EAFE Index 25.40% 16.63%
- ------------------------------------------------------------------------
<F1> Fund inception date is 3/31/97. Returns are annualized.
As depicted in the graph, the International Equity Fund is compared against the
Morgan Stanley Capital International EAFE ("Europe-Australasia-Far East") Index.
The index is composed of approximately 1,100 companies in 20 countries in Europe
and the Pacific Basin. The objective of the index is to reflect the movements of
stock markets in these countries by representing an unmanaged (indexed)
portfolio within each country. The indices are constructed so that companies
chosen represent about 60% of market capitalization in each market; industry
composition of the market is reflected; and a cross section of large-, medium-,
and small-capitalization stocks is included, taking into account liquidity
concerns. The index is calculated in U.S. dollars. The index cannot be invested
in directly and does not include sales charges.
This graph assumes an initial investment of $10,000 made in Class A and Class B
shares, with all sales charges on March 31, 1997 (commencement of operations).
Returns shown include fee waivers and deductions for all Fund expenses. In the
absence of fee waivers, total return would be reduced. Past performance is not
predictive of future performance. Investment return and principal value will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. Returns on p. 3 reflect the maximum sales charge for Class
A and a 5% contingent deferred sales charge for Class B One Year and 3% for
Since Inception.
Investors should be aware of the risks of investments in foreign securities,
particularly investments in securities of companies in developing nations. These
include the risks of currency fluctuation, of political and economic instability
and of less well-developed government supervision and regulation of business and
industry practices, as well as differences in accounting standards.
SCHEDULE OF INVESTMENTS
Country Shares/Par Market Value
--------------------------------------------------------------------------
COMMON STOCK (90.6%)
CAPITAL EQUIPMENT (8.2%)
Alcatel France 1,300 $285,242
Alcatel, ADR France 11,400 499,463
CNH Global N.V. Netherlands 15,000 148,125
Hong Kong Aircraft
& Engineering Hong Kong 135,000 214,987
Hyundai Electronics
Industries Co. Republic of Korea 32,200 716,689
Koninklijke Philips
Electronics N.V. Netherlands 2,760 463,767
Rolls-Royce PLC United Kingdom 129,200 418,924
The Weir Group PLC United Kingdom 126,200 389,567
--------------------------------------------------------------------------
TOTAL 3,136,764
--------------------------------------------------------------------------
CONSUMER GOODS (13.8%)
Autoliv, Inc. United States 14,400 432,000
Aventis S.A. France 10,600 580,188
<F1> Aventis S.A. Germany 4,201 229,136
<F1> Celltech Group PLC United Kingdom 42,740 774,560
Fiat SPA Ord. Italy 8,492 223,871
Nycomed Amersham PLC United Kingdom 75,525 621,977
Ono Pharmaceutical
Co., Ltd. Japan 9,000 318,530
Sony Corporation Japan 3,300 466,533
<F1> Sony Corporation - New Japan 3,300 469,751
Tate & Lyle, PLC United Kingdom 34,500 120,395
Teva Pharmaceutical
Industries Ltd., ADR Israel 14,800 552,225
Volvo Aktiebolaget, B Free Sweden 19,600 528,565
--------------------------------------------------------------------------
TOTAL 5,317,731
--------------------------------------------------------------------------
ENERGY (6.1%)
Petroleo Brasileiro
S.A. - Petrobras Brazil 1,339,000 362,182
Ranger Oil Limited Canada 45,400 175,925
<F1> Renaissance Energy LTD Canada 26,500 201,698
Repsol S.A. Spain 17,400 381,453
Shell Transport &
Trading Company PLC United Kingdom 72,700 603,087
Total Fina S.A. France 4,085 611,749
--------------------------------------------------------------------------
TOTAL 2,336,094
--------------------------------------------------------------------------
FINANCE (17.9%)
Australia & New Zealand
Bank Group Australia 61,000 385,081
AXA-UAP S.A. France 4,100 581,039
Banco Bradesco S.A. Brazil 27,950,000 230,327
<PAGE>
MARCH 31, 2000
INTERNATIONAL EQUITY FUND
Country Shares/Par Market Value
--------------------------------------------------------------------------
FINANCE (CONTINUED)
Banco Itau S.A. Brazil 940,000 $83,496
Bangkok Bank Public
Company Limited Thailand 74,900 128,762
Banque Nationale de Paris France 4,350 343,407
<F1> Banque Nationale de
Paris, Warrants France 1,950 13,696
Deutsche Bank AG Germany 5,333 354,414
Hang Lung
Development Co. Hong Kong 133,000 109,317
HSBC Holdings Hong Kong 27,600 322,558
ING Groep N.V. Netherlands 8,800 476,613
The Nomura Securities
Co., Ltd. Japan 32,200 1,051,723
Nordic Baltic Holding
(NBH) AB Finland 108,120 569,030
PartnerRe Ltd. Bermuda 11,500 423,344
Scor France 6,000 281,731
Unibanco Uniao de Bancos Brazil 1,579,000 98,631
Unidanmark A/S,
A Registered Denmark 8,500 545,145
XL Capital Ltd. Bermuda 8,400 465,150
Zurich Versicherungs-
Gesellschaft Switzerland 820 413,280
--------------------------------------------------------------------------
TOTAL 6,876,744
--------------------------------------------------------------------------
GOLD MINES (1.9%)
AngloGold Limited, ADR South Africa 11,700 280,800
Barrick Gold Corporation Canada 19,200 297,562
<F1> Kinross Gold Corporation Canada 88,200 136,085
--------------------------------------------------------------------------
TOTAL 714,447
--------------------------------------------------------------------------
MATERIALS (9.5%)
Agrium, Inc. Canada 22,700 183,019
Akzo Nobel N.V. Netherlands 7,400 315,815
Asia Pulp & Paper
Company Ltd. ADR Singapore 23,400 172,575
Bayer AG Germany 8,800 394,932
Boehler-Uddeholm AG Austria 6,344 267,105
<F1> Celanese AG Germany 560 11,307
Companhia Vale do
Rio Doce, ADR Brazil 17,900 476,588
Corus Group PLC United Kingdom 217,100 353,266
Grupo Mexico, B shares Mexico 73,700 344,637
Hepworth PLC United Kingdom 58,200 147,626
Pioneer International Ltd. Australia 203,200 553,807
Stora Enso OYJ - R shares Finland 41,800 447,982
--------------------------------------------------------------------------
TOTAL 3,668,659
--------------------------------------------------------------------------
Country Shares/Par Market Value
--------------------------------------------------------------------------
MULTI-INDUSTRY (5.0%)
Elementis PLC United Kingdom 68,280 $107,293
Hutchinson Whampoa
Limited Hong Kong 38,000 685,674
Pilkington PLC United Kingdom 290,500 338,307
Swire Pacific Limited,
A shares Hong Kong 36,000 185,398
Swire Pacific Limited,
B shares Hong Kong 296,000 205,278
Williams PLC United Kingdom 80,800 409,258
--------------------------------------------------------------------------
TOTAL 1,931,208
--------------------------------------------------------------------------
SERVICES (21.4%)
Best Denki Co., Ltd. Japan 34,000 223,761
British Airways PLC United Kingdom 85,200 447,855
Cia de Telecomunicaciones
de Chile S.A. Chile 13,100 298,025
Compania Anonima
Nacional Telefonos
de Venezuela Venezuela 9,400 272,600
Embratel Participacoes
S.A., ADR Brazil 11,400 292,125
J Sainsbury PLC United Kingdom 55,600 251,017
Koninklijke KPN NV Netherlands 3,600 412,175
Korea Telecom
Corporation, ADR Republic of Korea 4,800 210,000
Kurita Water
Industries, Ltd. Japan 20,000 388,047
Laidlaw Transportation
Limited Canada 46,965 67,512
Marks & Spencer PLC United Kingdom 51,800 207,005
Mayne Nickless Ltd. Australia 72,600 148,069
Moebel Walther AG PFD Germany 5,056 56,654
News Corporation Ltd. Australia 49,000 579,989
Nippon Telephone &
Telegraph Corporation
(NTT) Japan 35 556,233
The Peninsular and
Oriental Steam
Navigation Company United Kingdom 23,000 239,048
Philippine Long Distance
Telephone Company,
ADR Philippines 6,000 131,625
Portugal Telecom S.A. Portugal 19,500 250,038
Pt Indosat, ADR Indonesia 19,000 326,563
Storehouse PLC United Kingdom 150,900 89,070
Telecom Corporation of
New Zealand Limited New Zealand 133,000 601,817
Telecomunicacoes de
Sao Paulo S.A. Brazil 10,300 305,781
<PAGE>
M A S O N S T R E E T F U N D S
INTERNATIONAL EQUITY FUND
Country Shares/Par Market Value
--------------------------------------------------------------------------
SERVICES (CONTINUED)
Telefonica de Argentina
S.A., ADR Argentina 17,400 $682,950
Telefonica del Peru S.A.
B shares, ADR Peru 17,500 297,500
Telefonos de Mexico
S.A., ADR Mexico 13,100 877,700
------------------------------------------------------------------------
TOTAL 8,213,159
------------------------------------------------------------------------
UTILITIES (6.8%)
Endesa S.A. Spain 13,900 318,823
EVN AG Austria 840 92,348
Gener S.A., ADR Chile 12,500 168,750
Hong Kong Electric
Holdings Ltd Hong Kong 106,000 319,913
Iberdrola S.A. Spain 31,000 404,319
Korea Electric Power
Corp., ADR Republic of Korea 12,800 364,804
National Power PLC United Kingdom 60,400 302,799
Thames Water United Kingdom 21,083 238,631
Veba AG Germany 7,700 393,458
--------------------------------------------------------------------------
TOTAL 2,603,845
--------------------------------------------------------------------------
TOTAL COMMON STOCK (90.6%)
(Cost $33,059,201) 34,798,651
==========================================================================
MONEY MARKET INVESTMENTS (9.5%)
FINANCE LESSORS (2.6%)
Triple A One Funding,
6.01%, 4/17/00 United States 1,000,000 997,329
--------------------------------------------------------------------------
FINANCE SERVICES (5.1%)
Merrill Lynch,
6.04%, 5/15/00 United States 1,000,000 992,618
Preferred Receivable
Funding, 6.06%,
5/10/00 United States 1,000,000 993,435
--------------------------------------------------------------------------
TOTAL 1,986,053
--------------------------------------------------------------------------
SHORT-TERM BUSINESS CREDIT (1.8%)
CXC Incorporated,
6.25%, 4/3/00 United States 700,000 699,757
--------------------------------------------------------------------------
TOTAL MONEY MARKET INVESTMENTS
(COST $3,683,139) 3,683,139
==========================================================================
TOTAL INVESTMENTS (100.1%)
(Cost $36,742,340)<F2> 38,481,790
==========================================================================
OTHER ASSETS, LESS LIABILITIES (-0.1%) (52,529)
==========================================================================
TOTAL NET ASSETS (100.0%) $38,429,261
==========================================================================
<F1> Non-Income Producing
ADR - American Depository Receipt
<F2> At March 31, 2000, the aggregate cost of securities for federal income tax
purposes was $36,742,465 and the net unrealized appreciation of investments
based on that cost was $1,739,325 which is comprised of $7,221,538
aggregate gross unrealized appreciation and $5,482,213 aggregate gross
unrealized depreciation.
INVESTMENT PERCENTAGES BY COUNTRY:
United Kingdom 15.75%
Japan 9.03%
France 8.31%
Hong Kong 5.31%
Australia 4.33%
Other 57.27%
-----------------------------------------
TOTAL 100.00%
-----------------------------------------
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
MARCH 31, 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: $35.6 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. During the fiscal year ended March 31,
2000, the Fund achieved its objective of matching performance of the S&P MidCap
400 Index before expenses.
SECTOR ALLOCATION
3/31/00
Technology 24%
Consumer Cyclical 13%
Basic Materials/Capital Goods 12%
Utilities 9%
Healthcare 9%
Finance 9%
Index Futures and Other Assets 8%
Consumer Staples 7%
Energy 6%
Other Industries 3%
TOP 10 EQUITY HOLDINGS
3/31/00
Company % Net Assets
- ---------------------------------------------
Siebel Systems, Inc. 2.2%
Maxim Integrated Products, Inc. 1.9%
Altera Corporation 1.7%
Vitesse Semiconductor Corporation 1.4%
MedImmune, Inc. 1.1%
Univision Communications, Inc. -
Class A 1.1%
Atmel Corporation 1.1%
Intuit, Inc. 1.0%
QLogic Corporation 1.0%
Chiron Corporation 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 11,438 11,954
TOTAL RETURN
Since
For the period ended March 31, 2000 Inception<F1>
- ------------------------------------------------------------------------------
Index 400 Stock Fund
(Class A - without initial sales charge) 19.81%
- ------------------------------------------------------------------------------
S&P MidCap 400 Index 19.54%
- ------------------------------------------------------------------------------
<F1> Fund inception date is 7/12/99. Reflects total return for the period
7/12/99 - 3/31/00. Returns are not annualized.
The S&P MidCap 400 Index is a capitalization-weighted index that measures the
performance of the mid-range sector of the U.S. stock market. As of March 31,
2000, the 400 companies in the composite had a median market capitalization of
$1.7 billion and a total market value of $1,022.6 billion. The MidCap 400
represents approximately 6% of the market value of S&P's database of about 8,100
equities.
This graph assumes an initial investment of $10,000 made in Class A and Class B
shares, with all sales charges on July 12, 1999 (commencement of operations).
Returns shown include fee waivers and deductions for all Fund expenses. In the
absence of fee waivers, total return would be reduced. Past performance is not
predictive of future performance. Investment return and principal value will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. Returns on p. 3 reflect the maximum sales charge for Class
A and a 5% contingent deferred sales charge for Class B Since Inception.
<PAGE>
M A S O N S T R E E T F U N D S
INDEX 400 STOCK FUND
SCHEDULE OF INVESTMENTS
Shares/Par Market Value
-------------------------------------------------------------------------
COMMON STOCK (91.2%)
BASIC MATERIALS (4.1%)
<F1> Airgas, Inc. 2,400 $19,950
AK Steel Holding Corporation 3,500 36,313
Albemarle Corporation 1,600 33,200
Bowater Incorporated 1,800 96,075
Cabot Corporation 2,200 67,100
Carpenter Technology Corporation 700 14,569
Chesapeake Corporation 600 17,738
CK Witco Corporation 4,078 41,545
Cleveland-Cliffs, Inc. 400 9,525
Consolidated Papers Inc. 3,100 119,156
<F1> Cytec Industries, Inc. 1,400 42,875
The Dexter Corporation 800 42,400
Ethyl Corporation 2,800 8,575
Ferro Corporation 1,200 21,375
H.B. Fuller Company 500 19,969
Georgia Gulf Corporation 1,100 28,600
Georgia-Pacific Corporation
(Timber Group) 2,800 71,750
P.H. Glatfelter Company 1,400 14,875
IMC Global, Inc. 3,900 57,281
Kennametal, Inc. 1,000 30,062
Longview Fibre Company 1,800 26,550
The Lubrizol Corporation 1,900 54,744
Lyondell Chemical Company 4,000 59,000
M. A. Hanna Company 1,700 19,231
Martin Marietta Materials, Inc. 1,600 76,000
<F1> MAXXAM, Inc. 200 5,700
Minerals Technologies, Inc. 700 31,194
Olin Corporation 1,500 26,625
Oregon Steel Mills, Inc. 900 3,487
Rayonier, Inc. 900 43,875
RPM, Inc 3,700 40,700
Ryerson Tull, Inc. 800 12,400
A. Schulman, Inc. 1,100 14,575
Solutia, Inc. 3,700 49,487
Sonoco Products Company 3,500 82,250
Southdown, Inc. 1,200 70,800
<F1> UCAR International, Inc. 1,500 19,781
Universal Corporation 1,100 16,569
Wausau-Mosinee Paper Corporation 1,700 21,994
-------------------------------------------------------------------------
TOTAL 1,467,895
-------------------------------------------------------------------------
CAPITAL GOODS (8.1%)
AGCO Corporation 2,000 22,750
<F1> Albany International Corp. - Class A 1,016 15,050
<F1> American Power Conversion Corporation 6,500 278,688
Shares/Par Market Value
-------------------------------------------------------------------------
CAPITAL GOODS (CONTINUED)
<F1> American Standard Companies, Inc. 2,400 $88,800
AMETEK, Inc. 1,100 21,175
Carlisle Companies Incorporated 1,000 40,000
Cordant Technologies, Inc. 1,200 67,875
Diebold, Incorporated 2,300 63,250
Donaldson Company, Inc. 1,600 36,100
Federal Signal Corporation 1,600 28,900
Flowserve Corporation 1,300 16,738
Granite Construction Incorporated 900 24,300
Harsco Corporation 1,400 40,513
Herman Miller, Inc. 2,700 75,600
Hillenbrand Industries, Inc. 2,200 74,800
HON INDUSTRIES, Inc. 2,100 54,075
Hubbell Incorporated - Class B 2,200 60,225
<F1> Jabil Circuit, Inc. 6,000 259,500
<F1> Jacobs Engineering Group, Inc. 900 29,025
Kaydon Corporation 1,000 27,313
<F1> MagneTek, Inc. 800 7,300
Newport News Shipbuilding, Inc. 1,100 33,275
Nordson Corporation 600 27,638
Pentair, Inc. 1,600 59,300
Precision Castparts Corp. 800 29,200
The Reynolds and Reynolds Company - Class A 2,600 70,200
<F1> Sanmina Corporation 4,200 283,763
<F1> SCI Systems, Inc. 4,900 263,681
<F1> Sensormatic Electronics Corporation 2,600 58,338
<F1> Sequa Corporation - Class A 400 15,850
<F1> SPX Corporation 1,100 125,331
The Standard Register Company 900 11,587
Stewart & Stevenson Services, Inc. 1,000 11,250
Symbol Technologies, Inc. 3,000 246,937
Tecumseh Products Company - Class A 700 30,800
Teleflex Incorporated 1,300 46,150
Trinity Industries, Inc. 1,300 30,794
<F1> Vishay Intertechnology, Inc. 2,900 161,312
Wallace Computer Services, Inc. 1,400 16,537
York International Corporation 1,300 30,387
-------------------------------------------------------------------------
TOTAL 2,884,307
-------------------------------------------------------------------------
COMMUNICATION SERVICES (1.5%)
Broadwing, Inc. 7,300 271,469
COMSAT Corporation 1,777 36,650
Telephone and Data Systems, Inc. 2,100 233,100
-------------------------------------------------------------------------
TOTAL 541,219
-------------------------------------------------------------------------
<PAGE>
MARCH 31, 2000
INDEX 400 STOCK FUND
Shares/Par Market Value
-------------------------------------------------------------------------
CONSUMER CYCLICAL (13.0%)
A.H. Belo Corporation - Class A 4,000 $71,500
<F1> Abercrombie & Fitch Co. - Class A 3,500 56,000
<F1> AC Nielsen Corporation 2,000 45,000
<F1> Acxiom Corporation 2,900 96,425
<F1> American Eagle Outfitters, Inc. 1,600 60,700
<F1> Apollo Group, Inc. - Class A 2,600 73,288
Arvin Industries, Inc. 900 20,363
Bandag, Incorporated 700 16,100
<F1> Barnes & Noble, Inc. 2,400 55,200
<F1> BJ's Wholesale Club, Inc. 2,500 96,563
<F1> Blyth Industries, Inc. 1,600 43,700
<F1> Borders Group, Inc. 2,700 46,406
Borg-Warner Automotive, Inc. 900 35,438
<F1> Burlington Industries, Inc. 1,800 7,875
Callaway Golf Company 2,600 40,300
<F1> CDW Computer Centers, Inc. 1,500 126,656
Cintas Corporation 5,650 221,409
Claire's Stores, Inc. 1,700 34,106
Clayton Homes, Inc. 4,800 48,600
<F1> Convergys Corporation 5,200 200,850
<F1> DeVry, Inc. 2,400 73,200
<F1> Dollar Tree Stores, Inc. 2,100 109,463
Family Dollar Stores, Inc. 5,900 122,794
Fastenal Company 1,300 62,238
Federal-Mogul Corporation 2,500 41,719
<F1> Furniture Brands International, Inc. 1,700 31,981
<F1> GTECH Holdings Corporation 1,200 22,275
Harte-Hanks, Inc. 2,300 52,181
Heilig-Meyers Company 2,000 7,875
Houghton Mifflin Company 1,100 46,681
<F1> International Game Technology 2,500 54,219
International Speedway
Corporation - Class A 1,800 80,888
<F1> Jones Apparel Group, Inc. 4,200 133,875
Kelly Services, Inc. - Class A 1,200 28,725
Lancaster Colony Corporation 1,400 42,788
<F1> Land's End, Inc. 1,000 61,500
<F1> Lear Corporation 2,300 64,687
Lee Enterprises, Incorporated 1,500 39,187
<F1> Mandalay Resort Group 3,100 52,312
Manpower, Inc. 2,600 92,300
Mark IV Industries, Inc. 1,600 35,300
Media General, Inc. - Class A 900 47,137
Meritor Automotive, Inc. 2,300 36,369
Modine Manufacturing Company 1,000 25,125
<F1> Modis Professional Services, Inc. 3,300 40,837
<F1> Mohawk Industries, Inc. 2,100 46,987
<F1> Navigant Consulting, Inc. 1,400 15,400
Shares/Par Market Value
-------------------------------------------------------------------------
CONSUMER CYCLICAL (CONTINUED)
NCH Corporation 200 $9,062
<F1> NCO Group, Inc. 900 28,744
<F1> The Neiman Marcus
Group, Inc. - Class A 1,700 47,281
<F1> OfficeMax, Inc. 3,900 25,350
Ogden Corporation 1,700 20,294
<F1> Park Place Entertainment Corporation 10,400 120,250
<F1> Payless ShoeSource, Inc. 1,100 57,131
Pittston Brink's Group 1,700 28,900
<F1> Premier Parks, Inc. 2,700 56,700
The Reader's Digest Association, Inc. - Class A 3,600 127,350
<F1> Robert Half International, Inc. 3,000 142,312
Rollins, Inc. 1,000 14,875
Ross Stores, Inc. 3,100 74,594
<F1> Saks Incorporated 4,900 71,050
<F1> Scholastic Corporation 600 32,362
Shaw Industries, Inc. 4,500 68,344
Sotheby's Holdings, Inc. - Class A 2,000 36,875
Stewart Enterprises, Inc. - Class A 3,700 18,269
Superior Industries International, Inc. 900 28,519
<F1> Sylvan Learning Systems, Inc. 1,700 27,094
<F1> Tech Data Corporation 1,800 59,175
Tiffany & Co. 2,500 209,062
<F1> Unifi, Inc. 2,000 17,875
USG Corporation 1,700 71,294
Viad Corp. 3,200 73,200
The Warnaco Group, Inc. - Class A 1,900 22,444
The Washington Post Company 300 162,300
Wellman, Inc. 1,200 23,775
WestPoint Stevens, Inc. 1,800 34,200
<F1> Williams-Sonoma, Inc. 1,900 58,900
-------------------------------------------------------------------------
TOTAL 4,632,103
-------------------------------------------------------------------------
CONSUMER STAPLES (7.1%)
Banta Corporation 900 16,538
Bergen Brunswig Corporation - Class A 4,600 31,050
Bob Evans Farms 1,300 16,250
<F1> Brinker International, Inc. 2,200 65,313
<F1> Buffets, Inc. 1,400 12,644
Carter-Wallace, Inc. 1,500 28,125
CBRL Group, Inc. 2,000 20,000
<F1> Chris-Craft Industries, Inc. 1,133 72,158
Church & Dwight Co., Inc. 1,300 22,344
Dean Foods Company 1,300 34,775
The Dial Corporation 3,600 49,500
Dole Food Company, Inc. 1,900 36,931
Dreyer's Grand Ice Cream, Inc. 900 23,175
<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)
Flowers Industries, Inc. 3,400 $51,637
Hannaford Brothers Co. 1,400 103,250
<F1> Hispanic Broadcasting Corporation - Class A 1,800 203,850
Hormel Foods Corporation 4,900 80,544
IBP, Inc. 3,600 56,700
International Multifoods Corporation 600 8,025
Interstate Bakeries Corporation 2,400 34,200
Lance, Inc. 1,000 10,625
<F1> Lone Star Steakhouse & Saloon, Inc. 1,100 11,206
McCormick & Company, Incorporated 2,400 77,400
<F1> Outback Steakhouse, Inc. 2,500 80,156
<F1> Papa John's International, Inc. 1,000 33,000
<F1> Perrigo Company 2,500 18,984
<F1> PSS World Medical, Inc. 2,400 16,275
R.J. Reynolds Tobacco Holdings, Inc. 3,700 62,900
Ruddick Corporation 1,600 17,500
The J. M. Smucker Company - Class A 1,000 18,375
<F1> Starbucks Corporation 6,200 277,837
<F1> Suiza Foods Corporation 1,100 44,275
Tyson Foods, Inc. - Class A 7,800 86,775
<F1> U.S. Foodservice 3,400 87,550
Universal Foods Corporation 1,700 36,337
<F1> Univision Communications, Inc. - Class A 3,500 395,500
<F1> Valassis Communications, Inc. 1,900 63,294
<F1> Westwood One, Inc. 3,800 137,750
Whitman Corporation 4,800 66,900
-------------------------------------------------------------------------
TOTAL 2,509,648
-------------------------------------------------------------------------
ENERGY (5.7%)
<F1> BJ Services Company 2,400 177,300
Devon Energy Corporation 2,900 140,831
ENSCO International Incorporated 4,700 169,788
<F1> Global Marine, Inc. 5,900 149,713
<F1> Hanover Compressor Company 1,000 56,875
Helmerich & Payne, Inc. 1,700 52,700
Murphy Oil Corporation 1,500 86,438
<F1> Nabors Industries, Inc. 4,700 182,419
Noble Affiliates, Inc. 1,900 62,344
<F1> Noble Drilling Corporation 4,500 186,469
<F1> Ocean Energy, Inc. 5,700 81,937
Pennzoil-Quaker State Company 2,600 27,137
<F1> Pioneer Natural Resources Company 3,400 36,125
<F1> Santa Fe Snyder Corporation 6,300 60,637
<F1> Smith International, Inc. 1,700 131,750
Tidewater, Inc. 1,900 60,444
Ultramar Diamond Shamrock Corporation 2,900 73,587
Valero Energy Corporation 1,900 58,187
Shares/Par Market Value
-------------------------------------------------------------------------
ENERGY (CONTINUED)
<F1> Varco International, Inc. 2,200 $27,775
<F1> Weatherford International, Inc. 3,700 218,069
-------------------------------------------------------------------------
TOTAL 2,040,525
-------------------------------------------------------------------------
FINANCE (9.1%)
Allmerica Financial Corporation 1,800 91,800
Ambac Financial Group, Inc. 2,400 120,900
American Financial Group, Inc. 2,000 57,250
Associated Banc-Corp 2,200 65,725
Astoria Financial Corporation 1,800 51,075
CCB Financial Corporation 1,400 61,950
Charter One Financial, Inc. 7,230 151,830
City National Corporation 1,500 50,531
Compass Bancshares, Inc. 3,900 77,756
Dime Bancorp, Inc. 3,800 70,300
<F1> E*TRADE Group, Inc. 9,500 286,188
A.G. Edwards, Inc. 3,100 124,000
Everest Reinsurance Holdings, Inc. 1,600 52,200
The Finova Group, Inc. 2,100 35,306
First Security Corporation 6,700 80,400
First Tennessee National Corporation 4,400 89,375
First Virginia Banks, Inc. 1,700 63,856
FirstMerit Corporation 3,100 57,156
GreenPoint Financial Corp. 3,700 72,613
Hibernia Corporation - Class A 5,400 56,700
Horace Mann Educators Corporation 1,400 25,813
HSB Group, Inc. 1,000 28,938
Keystone Financial, Inc. 1,700 31,238
Legg Mason, Inc. 1,900 82,175
Marshall & Ilsley Corporation 3,600 207,900
Mercantile Bankshares Corporation 2,300 70,294
National Commerce Bancorporation 3,700 68,450
North Fork Bancorporation, Inc. 6,000 107,250
Ohio Casualty Corporation 2,000 35,750
Old Republic International Corp. 4,300 59,125
Pacific Century Financial Corporation 2,700 54,844
The PMI Group, Inc. 1,500 71,156
Protective Life Corporation 2,200 69,850
Provident Financial Group Inc. 1,600 54,500
ReliaStar Financial Corp. 3,000 101,625
Sovereign Bancorp, Inc. 7,400 55,962
TCF Financial Corporation 2,800 66,675
Unitrin, Inc. 2,500 99,375
Webster Financial Corporation 1,500 34,500
Westamerica Bancorporation 1,300 36,075
Wilmington Trust Corporation 1,100 53,487
Zions Bancorporation 2,900 120,712
-------------------------------------------------------------------------
TOTAL 3,252,605
-------------------------------------------------------------------------
<PAGE>
MARCH 31, 2000
INDEX 400 STOCK FUND
Shares/Par Market Value
-------------------------------------------------------------------------
HEALTHCARE (8.9%)
<F1> Acuson Corporation 900 $13,331
<F1> Apria Healthcare Group, Inc. 1,800 25,988
Beckman Coulter, Inc. 1,000 64,188
<F1> Beverly Enterprises, Inc. 3,500 12,906
<F1> Chiron Corporation 6,200 309,225
<F1> Covance, Inc. 2,000 21,500
DENTSPLY International, Inc. 1,800 51,075
<F1> Express Scripts, Inc. - Class A 1,300 54,600
<F1> First Health Group Corp. 1,700 53,763
<F1> Forest Laboratories, Inc. 2,800 236,600
<F1> Foundation Health Systems, Inc. - Class A 4,200 33,600
<F1> Gentiva Health Services, Inc. 650 4,652
<F1> Genzyme Corporation (General Division) 2,900 145,362
<F1> Gilead Sciences, Inc. 1,500 95,062
<F1> Health Management Associates, Inc. - Class A 8,600 122,550
ICN Pharmaceuticals, Inc. 2,700 73,575
<F1> IVAX Corporation 5,400 147,150
<F1> Lincare Holdings, Inc. 1,800 51,075
<F1> MedImmune, Inc. 2,300 400,487
<F1> Millennium Pharmaceuticals, Inc. 1,500 194,812
<F1> MiniMed, Inc. 1,100 142,450
Mylan Laboratories, Inc. 4,400 121,000
Omnicare, Inc. 3,100 37,394
<F1> Oxford Health Plans, Inc. 2,800 42,700
<F1> Pacificare Health Systems, Inc. 1,500 74,812
<F1> Quorum Health Group, Inc. 2,400 24,150
<F1> Sepracor, Inc. 2,300 167,469
<F1> Steris Corporation 2,300 23,575
Stryker Corporation 3,300 230,175
<F1> Sybron International Corporation 3,500 101,500
<F1> Total Renal Care Holdings, Inc. 2,800 8,750
<F1> Trigon Healthcare, Inc. - Class A 1,300 46,475
<F1> VISX, Incorporated 2,200 40,150
-------------------------------------------------------------------------
TOTAL 3,172,101
-------------------------------------------------------------------------
TECHNOLOGY (23.7%)
<F1> ADTRAN, Inc. 1,300 77,269
<F1> Affiliated Computer Services, Inc. - Class A 1,700 64,600
<F1> Altera Corporation 6,800 606,900
<F1> Arrow Electronics, Inc. 3,300 116,325
<F1> Atmel Corporation 7,500 387,188
Avnet, Inc. 1,400 88,200
<F1> Cadence Design Systems, Inc. 8,300 172,225
<F1> Cambridge Technology Partners, Inc. 2,100 28,481
<F1> CheckFree Holdings Corporation 1,900 133,950
Shares/Par Market Value
-------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
<F1> Cirrus Logic, Inc. 2,200 $40,150
Comdisco, Inc. 5,200 229,450
<F1> Concord EFS, Inc. 6,950 159,416
<F1> CSG Systems International, Inc. 1,800 87,863
<F1> Cypress Semiconductor Corporation 3,700 182,456
<F1> DST Systems, Inc. 2,200 142,863
<F1> Electronic Arts, Inc. 2,100 149,494
<F1> Fiserv, Inc. 4,200 156,188
<F1> Gartner Group, Inc. - Class B 3,000 39,938
Harris Corporation 2,300 79,494
<F1> Imation Corp. 1,200 32,025
<F1> Informix Corporation 9,100 154,131
<F1> Integrated Device Technology, Inc. 3,100 122,838
<F1> Intuit, Inc. 6,600 358,875
<F1> Investment Technology Group, Inc. 1,100 38,775
<F1> Keane, Inc. 2,400 60,600
<F1> L-3 Communications Holdings, Inc. 1,100 57,200
<F1> Legato Systems, Inc. 2,900 129,412
<F1> Litton Industries, Inc. 1,500 66,281
<F1> Maxim Integrated Products, Inc. 9,300 660,881
<F1> Mentor Graphics Corporation 2,200 33,275
<F1> Microchip Technology Incorporated 2,600 170,950
<F1> Network Associates, Inc. 4,700 151,575
<F1> NOVA Corporation 2,500 72,812
<F1> Novellus Systems, Inc. 4,000 224,500
<F1> NVIDIA Corporation 1,000 84,484
<F1> Policy Management Systems Corporation 1,200 14,400
<F1> Polycom, Inc. 1,100 87,106
<F1> QLogic Corporation 2,500 338,750
<F1> Quantum Corporation - DLT & Storage Systems 5,600 66,850
<F1> Rational Software Corporation 3,000 229,500
<F1> Sawtek, Inc. 1,400 73,587
<F1> Siebel Systems, Inc. 6,500 776,344
<F1> Sterling Software, Inc. 2,700 82,350
<F1> Storage Technology Corporation 3,400 54,187
<F1> Structural Dynamics Research Corporation 1,200 16,200
<F1> SunGard Data Systems, Inc. 4,400 166,100
<F1> Sybase, Inc. 2,800 56,875
<F1> Sykes Enterprises, Incorporated 1,400 26,687
<F1> Symantec Corporation 2,000 150,250
<F1> Synopsys, Inc. 2,400 117,000
<F1> Transaction Systems Architects, Inc. - Class A 1,100 31,762
<F1> TriQuint Semiconductor, Inc. 1,300 95,550
<F1> Vitesse Semiconductor Corporation 5,200 500,500
<F1> Waters Corporation 2,100 200,025
-------------------------------------------------------------------------
TOTAL 8,445,087
-------------------------------------------------------------------------
<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 (1.1%)
Airborne Freight Corporation 1,700 $40,800
<F1> Alaska Air Group, Inc. 900 27,056
Alexander & Baldwin, Inc. 1,500 30,938
Arnold Industries, Inc. 800 10,250
C.H. Robinson Worldwide, Inc. 1,400 52,150
CNF Transportation, Inc. 1,600 44,400
GATX Corporation 1,700 64,600
<F1> J.B. Hunt Transport Services, Inc. 1,200 16,425
Overseas Shipholding Group, Inc. 1,100 25,231
<F1> Swift Transportation Co., Inc. 2,200 45,100
<F1> Wisconsin Central Transportation Corporation 1,700 20,825
-------------------------------------------------------------------------
TOTAL 377,775
-------------------------------------------------------------------------
UTILITIES (8.9%)
AGL Resources, Inc. 1,900 34,913
Allegheny Energy, Inc. 3,800 104,738
Alliant Energy Corporation 2,700 82,181
American Water Works Company, Inc. 3,300 78,375
Black Hills Corporation 700 15,444
<F1> Calpine Corporation 2,100 197,400
Cleco Corporation 800 26,600
CMP Group, Inc. 1,100 32,038
Conectiv, Inc. 3,200 56,000
DPL, Inc. 4,500 99,844
DQE, Inc. 2,600 118,300
Dynegy, Inc. - Class A 4,900 307,475
Energy East Corporation 4,200 83,212
Hawaiian Electric Industries, Inc. 1,100 34,994
IDACORP, Inc. 1,300 45,175
Indiana Energy, Inc. 1,000 19,500
IPALCO Enterprises, Inc. 2,900 56,550
Kansas City Power & Light 2,100 60,900
KeySpan Corporation 4,500 124,312
Kinder Morgan, Inc. 3,800 131,100
LG&E Energy Corp. 4,400 100,650
MCN Energy Group, Inc. 2,900 72,500
Minnesota Power, Inc. 2,500 41,562
The Montana Power Company 3,700 236,800
National Fuel Gas Company 1,300 57,931
NiSource, Inc. 4,200 70,875
Northeast Utilities 4,900 105,350
NSTAR 2,000 84,000
OGE Energy Corp. 2,600 49,887
Potomac Electric Power Company 4,000 90,500
Public Service Company of New Mexico 1,400 22,050
Puget Sound Energy, Inc. 2,900 64,344
Questar Corporation 2,800 51,975
Shares/Par Market Value
-------------------------------------------------------------------------
UTILITIES (CONTINUED)
SCANA Corporation 3,500 $85,969
Sierra Pacific Resources 2,658 33,225
TECO Energy, Inc. 4,400 85,525
UtiliCorp United, Inc. 3,200 57,800
Washington Gas Light Company 1,600 43,500
Wisconsin Energy Corporation 4,000 79,750
-------------------------------------------------------------------------
TOTAL 3,143,244
-------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost $29,182,113) 32,466,509
=========================================================================
MONEY MARKET INVESTMENTS (2.0%)
FEDERAL GOVERNMENT AND AGENCIES (0.6%)
<F2> Federal Home Loan Bank,
5.80%, 4/24/00 100,000 99,629
<F2> Federal National Mortgage
Association, 5.70%, 4/10/00 100,000 99,858
-------------------------------------------------------------------------
TOTAL 199,487
-------------------------------------------------------------------------
FINANCE LESSOR (1.4%)
CXC Incorporated, 6.25%, 4/3/00 500,000 499,826
-------------------------------------------------------------------------
TOTAL MONEY MARKET INVESTMENTS
(COST $699,313) 699,313
=========================================================================
TOTAL INVESTMENTS (93.2%)
(COST $29,881,426)<F3> 33,165,822
=========================================================================
OTHER ASSETS, LESS LIABILITIES (6.8%) 2,438,531
=========================================================================
TOTAL NET ASSETS (100.0%) $35,604,353
=========================================================================
<F1> Non-Income Producing
<F2> Securities segregated or earmarked as collateral for futures and delayed
settlements. Information regarding open futures contracts as of March 31,
2000 is summarized below:
Number of Expiration Unrealized
Issuer Contracts Date Appreciation
- --------------------------------------------------------------------------------
MidCap 400 Stock Index
(Total notional value at
3/31/00, $735,100) 3 6/00 $22,925
<F3> At March 31, 2000, the aggregate cost of securities for federal income tax
purposes was $29,881,426 and the net unrealized appreciation of investments
based on that cost was $3,284,396 which is comprised of $6,671,469
aggregate gross unrealized appreciation and $3,387,073 aggregate gross
unrealized depreciation.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
MARCH 31, 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: $71.9 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, especially during times of active flows of cash into the Fund.
The Growth Stock Fund performed quite well over the last year, achieving total
return almost 10 percentage points higher than its major benchmark, the S&P
500/R Index. Several factors drove this strong performance, including a
slightly overweighted position in technology stocks, which represented 33% of
the total portfolio, versus 30% for the S&P/R 500 Index, and good stock
selection within this rapidly growing industry. Technology positions are
concentrated in industry leaders with broad customer bases and records of
earnings growth, such as Cisco Systems, Intel and Microsoft. In addition,
the portfolio continues to have a strongly overweighted position in consumer
cyclicals; large positions in Harley-Davidson and in Kohl's, a highly
profitable retailer that is expanding rapidly, were key factors in
performance in this sector.
While participating in these high-growth sectors, the portfolio maintained a
balance of holdings across other industries including energy and capital goods;
the result was reduced volatility during periods of decline in the high-flying
technology sector. The Fund continues to reduce overall risk through
diversification. The portfolio also benefited from an underweighted position in
finance stocks throughout the year.
SECTOR ALLOCATION
3/31/00
Technology 33%
Consumer Cyclicals 13%
Consumer Staples 8%
Basic Materials/Capital Goods 8%
S&P/R Index Futures 8%
Finance 8%
Healthcare 5%
Energy 5%
Communication Services 5%
Other Industries 4%
Cash Equivalents 3%
TOP 10 EQUITY HOLDINGS
3/31/00
Company % Net Assets
- ---------------------------------------------
Cisco Systems, Inc. 3.6%
Intel Corporation 2.7%
General Electric Company 2.7%
Nortel Networks Corporation 2.6%
Microsoft Corporation 2.5%
Enron Corp. 2.2%
Amdocs Limited 2.2%
Kohl's Corporation 2.1%
TIBCO Software, Inc. 2.0%
Harley-Davidson, Inc. 2.0%
<PAGE>
M A S O N S T R E E T F U N D S
GROWTH STOCK FUND
Performance Relative to S&P 500/R Index
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 21,239 20,650
TOTAL RETURN Average
Annual
One Since
For the periods ended March 31, 2000 Year Inception<F1>
- --------------------------------------------------------------------------------
Growth Stock Fund
(Class A - without initial sales charge) 27.78% 29.95%
- --------------------------------------------------------------------------------
S&P 500/R Index 17.98% 27.31%
- --------------------------------------------------------------------------------
<F1> Fund inception date is 3/31/97. Returns are annualized.
The Standard & Poor's 500 Composite Stock Price Index is an unmanaged index
of 500 selected common stocks, most of which are listed on the New York
Stock Exchange. The index is heavily weighted toward stocks with large
market capitalizations and represents approximately two-thirds of the total
market value of all domestic common stocks. The index cannot be invested in
directly and does not include sales charges.
This graph assumes an initial investment of $10,000 made in Class A and
Class B shares, with all sales charges on March 31, 1997 (commencement of
operations).
Returns shown include fee waivers and deductions for all Fund expenses.
In the absence of fee waivers, total return would be reduced. Past
performance is not predictive of future performance. Investment
return and principal value will fluctuate, so that your shares, when
redeemed, may be worth more or less than their original cost. Returns on
p.3 reflect the maximum sales charge for Class A and a 5% contingent
deferred sales charge for Class B One Year and 3% for Since Inception.
SCHEDULE OF INVESTMENTS
Shares/Par Market Value
-------------------------------------------------------------------------
COMMON STOCK (88.3%)
BASIC MATERIALS (1.7%)
Ecolab, Inc. 21,000 $770,438
The Mead Corporation 5,500 192,156
PPG Industries, Inc. 4,900 256,331
-------------------------------------------------------------------------
TOTAL 1,218,925
-------------------------------------------------------------------------
CAPITAL GOODS (6.6%)
Avery Dennison Corporation 13,800 842,662
Corning Incorporated 4,600 892,400
General Electric Company 12,400 1,924,325
Illinois Tool Works, Inc. 6,800 375,700
Tyco International Ltd. 15,000 748,125
-------------------------------------------------------------------------
TOTAL 4,783,212
-------------------------------------------------------------------------
COMMUNICATION SERVICES (4.7%)
AT&T Corp. 18,928 1,064,700
GTE Corporation 6,500 461,500
<F1> MCI WorldCom, Inc. 12,072 547,013
<F1> Nextel Communications, Inc. - Class A 7,200 1,067,400
SBC Communications, Inc. 5,790 243,180
-------------------------------------------------------------------------
TOTAL 3,383,793
-------------------------------------------------------------------------
CONSUMER CYCLICAL (13.2%)
<F1> Amazon.com, Inc. 4,200 281,400
<F1> barnesandnoble.com, inc. - Class A 8,200 77,388
<F1> Costco Wholesale Corporation 12,400 651,775
<F1> eToys, Inc. 7,900 69,866
Ford Motor Company 6,800 312,375
Harley-Davidson, Inc. 17,700 1,404,938
The Interpublic Group of Companies, Inc. 10,800 510,300
<F1> Kohl's Corporation 14,800 1,517,000
The McGraw-Hill Companies, Inc. 14,100 641,550
The New York Times Company - Class A 19,400 832,987
Omnicom Group, Inc. 3,400 317,687
The ServiceMaster Company 25,500 286,875
Target Corporation 7,500 560,625
Tiffany & Co. 2,700 225,787
Tribune Company 18,800 687,375
Wal-Mart Stores, Inc. 20,100 1,115,550
-------------------------------------------------------------------------
TOTAL 9,493,478
-------------------------------------------------------------------------
<PAGE>
MARCH 31, 2000
GROWTH STOCK FUND
Shares/Par Market Value
-------------------------------------------------------------------------
CONSUMER STAPLES (7.7%)
Anheuser-Busch Companies, Inc. 4,400 $273,900
The Coca-Cola Company 12,000 563,250
Keebler Foods Company 22,700 651,206
Kimberly-Clark Corporation 10,700 599,200
McDonald's Corporation 12,600 473,288
PepsiCo, Inc. 9,500 328,344
Procter & Gamble Company 7,800 438,750
The Quaker Oats Company 5,900 357,687
Time Warner, Inc. 5,300 530,000
<F1> Viacom, Inc. - Class B 7,600 400,900
Walgreen Company 35,700 919,275
-------------------------------------------------------------------------
TOTAL 5,535,800
-------------------------------------------------------------------------
ENERGY (4.7%)
BP Amoco PLC, ADR 9,200 488,175
Chevron Corporation 1,700 157,144
Conoco, Inc. - Class B 21,000 538,125
EOG Resources, Inc. 27,000 572,063
Exxon Mobil Corporation 9,892 769,721
Schlumberger Limited 4,100 313,650
Tosco Corporation 17,900 544,831
-------------------------------------------------------------------------
TOTAL 3,383,709
-------------------------------------------------------------------------
FINANCE (7.8%)
American International Group, Inc. 2,600 284,700
Bank of New York Company, Inc. 12,700 527,844
Chase Manhattan Corporation 8,400 732,375
Citigroup, Inc. 17,975 1,066,142
Fifth Third Bancorp 6,700 422,100
The Goldman Sachs Group, Inc. 5,700 599,213
<F1> LaBranche & Co., Inc. 2,700 34,087
Lehman Brothers Holdings, Inc. 7,000 679,000
Morgan Stanley Dean Witter & Co. 15,400 1,256,062
-------------------------------------------------------------------------
TOTAL 5,601,523
-------------------------------------------------------------------------
HEALTHCARE (4.9%)
Bristol-Myers Squibb Company 9,300 537,075
Eli Lilly and Company 7,100 447,300
<F1> Guidant Corporation 3,000 176,438
Johnson & Johnson 5,800 406,362
Medtronic, Inc. 17,900 920,731
Merck & Co., Inc. 7,200 447,300
Pfizer, Inc. 3,500 127,969
Warner-Lambert Company 4,400 429,000
-------------------------------------------------------------------------
TOTAL 3,492,175
-------------------------------------------------------------------------
Shares/Par Market Value
-------------------------------------------------------------------------
TECHNOLOGY (33.3%)
<F1> 3Com Corporation 5,100 $283,688
<F1> Agilent Technologies, Inc. 2,500 260,000
<F1> Amdocs Limited 21,000 1,547,438
<F1> America Online, Inc. 9,800 659,050
<F1> Atmel Corporation 14,000 722,750
<F1> Avanex Corporation 3,300 500,775
<F1> Cisco Systems, Inc. 33,800 2,613,163
<F1> Concord EFS, Inc. 20,100 461,044
<F1> Dell Computer Corporation 12,900 695,794
Electronic Data Systems Corporation 14,100 905,044
<F1> EMC Corporation 5,500 687,500
<F1> Fiserv, Inc. 35,325 1,313,648
Hewlett-Packard Company 6,200 821,887
Intel Corporation 14,800 1,952,675
International Business Machines Corporation 4,900 578,200
<F1> Lexmark International Group, Inc. - Class A 6,600 697,950
<F1> Microsoft Corporation 17,200 1,827,500
Motorola, Inc. 4,000 569,500
Nortel Networks Corporation 14,600 1,839,600
<F1> Oracle Corporation 11,400 889,912
<F1> Sun Microsystems, Inc. 8,400 787,106
<F1> Tellabs, Inc. 5,100 321,220
Texas Instruments, Incorporated 6,600 1,056,000
<F1> TIBCO Software, Inc. 17,400 1,418,100
<F1> Williams Communications Group, Inc. - Class A 10,800 559,575
-------------------------------------------------------------------------
TOTAL 23,969,119
-------------------------------------------------------------------------
TRANSPORTATION (1.5%)
<F1> FedEx Corp. 7,400 288,600
<F1> Midwest Express Holdings, Inc. 12,750 326,719
Southwest Airlines Co. 21,150 440,184
-------------------------------------------------------------------------
TOTAL 1,055,503
-------------------------------------------------------------------------
UTILITIES (2.2%)
Enron Corp. 21,400 1,602,325
-------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $37,682,753) $63,519,562
=========================================================================
<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 (11.8%)
COMMUNICATIONS EQUIPMENT (1.8%)
Motorola Credit Corporation,
6.04%, 4/20/00 1,300,000 $1,295,856
-------------------------------------------------------------------------
FEDERAL GOVERNMENT AND AGENCIES (0.8%)
<F2> Federal Home Loan Bank,
5.68%, 4/20/00 600,000 598,202
-------------------------------------------------------------------------
FINANCE LESSOR (3.6%)
<F2> Preferred Receivable Funding,
6.07%, 5/11/00 1,300,000 1,291,232
<F2> Triple A One Funding,
6.04%, 4/27/00 1,300,000 1,294,329
-------------------------------------------------------------------------
TOTAL 2,585,561
-------------------------------------------------------------------------
MISCELLANEOUS BUSINESS
CREDIT INSTITUTIONS (1.3%)
Quincy Capital Corporation,
6.05%, 4/20/00 900,000 897,126
-------------------------------------------------------------------------
OFFICE MACHINES (1.8%)
<F2> Xerox Corporation, 6.03%, 4/26/00 1,300,000 1,294,556
-------------------------------------------------------------------------
PERSONAL CREDIT INSTITUTIONS (0.7%)
General Electric Capital
Corporation, 6.18%, 4/3/00 500,000 499,829
-------------------------------------------------------------------------
SECURITY BROKER (1.8%)
<F2> Merrill Lynch, 6.04%, 5/15/00 1,300,000 1,290,403
-------------------------------------------------------------------------
TOTAL MONEY MARKET INVESTMENTS
(COST $8,461,533) 8,461,533
=========================================================================
TOTAL INVESTMENTS (100.1%)
(COST $46,144,286)<F3> 71,981,095
=========================================================================
OTHER ASSETS, LESS LIABILITIES (-0.1%) (88,124)
=========================================================================
TOTAL NET ASSETS (100.0%) $71,892,971
=========================================================================
<F1> Non-Income Producing
ADR - American Depository Receipt
<F2> Securities segregated or earmarked as collateral for futures and delayed
settlements. Information regarding open futures contracts as of March 31,
2000 is summarized below:
Number of Expiration Unrealized
Issuer Contracts Date Appreciation
--------------------------------------------------------------------------
S&P 500/R Stock Index
(Total notional value at
3/31/00, $5,593,700) 16 6/00 $467,500
<F3> At March 31, 2000, the aggregate cost of securities for federal income tax
purposes was $46,144,286 and the net unrealized appreciation of investments
based on that cost was $25,836,809 which is comprised of $27,414,993
aggregate gross unrealized appreciation and $1,578,184 aggregate gross
unrealized depreciation.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
MARCH 31, 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: $57.7 million
- --------------------------------------------------------------------------------
The Growth and Income Fund invests mainly in large-capitalization stocks, with a
focus on seeking the best values in the market based on long-term earnings
forecasts. A sector balance very close to that of the S&P 500/R Index is
normally maintained, with the emphasis on undervalued stocks within each sector;
a valuation discipline mandates the sale of stocks regarded as overvalued.
The Growth and Income Stock Fund has posted disappointing performance over the
last year. Market trends, with performance concentrated in technology stocks and
a few large growth companies have been at odds with this Fund's value-oriented
investment style.
In recent months, the Fund's managers have modified the portfolio to participate
more fully in the stronger sectors of the market while remaining true to the
value orientation. There is an increasing focus on maintaining balance between
the technology-focused "new economy" and the more traditional sectors of the
economy, including consumer and industrial companies, where many quality names
are now relatively cheap. This revised approach is beginning to produce the
desired results; the portfolio outperformed its major benchmark, the S&P 500/R
Index, for the first calendar quarter of 2000.
Large positions in leading technology names such as Cisco Systems, Intel,
Microsoft and Sun Microsystems have contributed to performance in recent months.
Liberty Media, a tracking stock for AT&T's media holdings is a relatively new
holding that has performed well. Energy stocks, especially drilling companies
such as Tosco and Cooper Cameron, have benefited from rising oil prices. In
addition, the market has broadened somewhat during the first quarter of 2000, as
investors have seemed to recognize the value inherent in formerly neglected
stocks. The result has been strong performance of holdings such as Tyco
International, a multi-industry company.
The Growth and Income Stock Fund is managed for Northwestern Mutual Investment
Services, LLC by J. P. Morgan Investment Management, Inc.
SECTOR ALLOCATION
3/31/00
Technology 32%
Basic Materials/ Capital Goods 14%
Finance 13%
Consumer Cyclicals 9%
Consumer Staples 8%
Healthcare 7%
Communication Services 7%
Energy 6%
Other Industries 3%
Short-term Investments 1%
TOP 10 EQUITY HOLDINGS
3/31/00
Company % Net Assets
- ---------------------------------------------
Cisco Systems, Inc. 4.9%
Microsoft Corporation 4.5%
Intel Corporation 3.8%
Tyco International Ltd. 3.6%
Sun Microsystems, Inc. 3.1%
Exxon Mobil Corporation 2.6%
General Electric Company 2.1%
Monsanto Company 1.9%
Liberty Media Corporation 1.8%
Rohm and Haas Company 1.8%
<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 12,187 12,649 13,747
3/31/99 15,013 15,583 17,503
9/30/99 14,210 14,683 17,564
9/31/00 16,506 17,007 16,707 20,650
TOTAL RETURN Average
Annual
One Since
For the periods ended March 31, 2000 Year Inception<F1>
- -------------------------------------------------------------------------
Growth and Income Stock Fund
(Class A - without initial sales charge) 9.95% 20.12%
- -------------------------------------------------------------------------
S&P 500/R Index 17.98% 27.31%
- -------------------------------------------------------------------------
<F1> Fund inception date is 3/31/97. Returns are annualized.
The Standard & Poor's 500 Composite Stock Price Index is an unmanaged index of
500 selected common stocks, most of which are listed on the New York Stock
Exchange. The index is heavily weighted toward stocks with large market
capitalizations and represents approximately two-thirds of the total market
value of all domestic common stocks. The index cannot be invested in directly
and does not include sales charges.
This graph assumes an initial investment of $10,000 made in Class A and Class B
shares, with all sales charges on March 31, 1997 (commencement of operations).
Returns shown include fee waivers and deductions for all Fund expenses. In the
absence of fee waivers, total return would be reduced. Past performance is not
predictive of future performance. Investment return and principal value will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. Returns on p. 3 reflect the maximum sales charge for Class
A and a 5% contingent deferred sales charge for Class B One Year and 3% for
Since Inception.
SCHEDULE OF INVESTMENTS
Shares/Par Market Value
-------------------------------------------------------------------------
COMMON STOCK (98.4%)
BASIC MATERIALS (5.9%)
Allegheny Technologies Incorporated 12,750 $255,797
Monsanto Company 21,700 1,117,550
Reynolds Metals Company 4,600 307,625
Rohm and Haas Company 23,200 1,035,300
<F1> Smurfit-Stone Container Corporation 24,202 409,921
Temple-Inland Inc. 5,800 288,913
-------------------------------------------------------------------------
TOTAL 3,415,106
-------------------------------------------------------------------------
CAPITAL GOODS (8.1%)
Cooper Industries, Inc. 10,700 374,500
Deere & Company 6,300 239,400
General Electric Company 7,700 1,194,944
Honeywell International Inc. 9,300 489,994
<F1> Sensormatic Electronics Corporation 7,000 157,063
Tyco International Ltd. 41,156 2,052,655
Waste Management, Inc. 12,005 164,318
-------------------------------------------------------------------------
TOTAL 4,672,874
-------------------------------------------------------------------------
COMMUNICATION SERVICES (7.4%)
<F1> Allegiance Telecom, Inc. 2,250 181,406
AT&T Corporation 14,600 821,250
Bell Atlantic Corporation 3,800 232,275
<F1> Global Crossing Ltd. 8,300 339,781
GTE Corporation 8,100 575,100
<F1> Level 3 Communications, Inc. 3,500 370,125
<F1> MCI WorldCom, Inc. 17,105 775,070
SBC Communications, Inc. 16,691 701,022
<F1> Sprint Corporation (PCS Group) 4,200 274,313
-------------------------------------------------------------------------
TOTAL 4,270,342
-------------------------------------------------------------------------
CONSUMER CYCLICAL (8.8%)
<F1> Abercrombie & Fitch Co. 11,000 176,000
<F1> Cendant Corporation 19,059 352,592
Circuit City Stores, Inc. 6,100 371,338
<F1> Federated Department Stores, Inc. 8,400 350,700
Ford Motor Company 6,200 284,813
The Gap, Inc. 5,100 254,044
<F1> Jones Apparel Group, Inc. 15,800 503,625
<F1> Lear Corporation 8,700 244,687
Mattel, Inc. 22,600 235,887
The News Corporation Limited, ADR 15,100 849,375
Target Corporation 4,100 306,475
The TJX Companies, Inc. 19,000 421,562
Wal-Mart Stores, Inc. 12,900 715,950
-------------------------------------------------------------------------
TOTAL 5,067,048
-------------------------------------------------------------------------
CONSUMER STAPLES (8.0%)
The Clorox Company 4,500 146,250
The Coca-Cola Company 4,900 229,994
The Gillette Company 13,000 489,937
<PAGE>
MARCH 31, 2000
GROWTH AND INCOME STOCK FUND
Shares/Par Market Value
-------------------------------------------------------------------------
CONSUMER STAPLES (CONTINUED)
Kimberly-Clark Corporation 4,000 $224,000
<F1> Liberty Media Corporation 18,000 1,066,500
Philip Morris Companies, Inc. 35,200 743,600
The Procter & Gamble Company 6,600 371,250
The Seagram Company Ltd. 13,300 791,350
Time Warner Inc. 5,700 570,000
-------------------------------------------------------------------------
TOTAL 4,632,881
-------------------------------------------------------------------------
ENERGY (6.0%)
Conoco, Inc. 24,900 638,063
<F1> Cooper Cameron Corp. 1,400 93,625
Exxon Mobil Corporation 18,938 1,473,613
<F1> Global Marine Inc. 11,300 286,737
Shell Transport & Trading Company, ADR 7,300 358,156
Tosco Corporation 21,300 648,319
-------------------------------------------------------------------------
TOTAL 3,498,513
-------------------------------------------------------------------------
FINANCE (12.8%)
Ambac Financial Group, Inc. 10,300 518,863
Aon Corporation 13,200 425,700
Bank of America Corporation 12,463 653,529
Capital One Financial Corporation 8,800 421,850
The CIT Group, Inc. 13,320 259,740
Citigroup, Inc. 12,400 735,475
Dime Bancorp, Inc. 10,400 192,400
Federal National Mortgage Association 4,300 242,681
First Union Corporation 25,200 938,700
The Goldman Sachs Group, Inc. 5,700 599,212
KeyCorp 14,800 281,200
Marsh & McLennan Companies, Inc. 3,500 386,094
U.S. Bancorp 29,500 645,312
Washington Mutual, Inc. 19,800 524,700
XL Capital Ltd. 10,000 553,750
-------------------------------------------------------------------------
TOTAL 7,379,206
-------------------------------------------------------------------------
HEALTHCARE (6.7%)
<F1> ALZA Corporation 16,300 612,269
American Home Products Corporation 10,700 573,787
Bristol-Myers Squibb Company 11,000 635,250
Eli Lilly and Company 10,200 642,600
<F1> Forest Laboratories, Inc. 3,500 295,750
Pharmacia & Upjohn, Inc. 900 53,325
<F1> Tenet Healthcare Corporation 12,900 296,700
Warner-Lambert Company 7,600 741,000
-------------------------------------------------------------------------
TOTAL 3,850,681
-------------------------------------------------------------------------
TECHNOLOGY (31.5%)
<F1> America Online, Inc. 12,000 807,000
<F1> Applied Materials, Inc. 4,800 452,400
<F1> BMC Software, Inc. 4,000 197,500
<F1> Cisco Systems, Inc. 36,500 2,821,906
<F1> Citrix Systems, Inc. 3,600 238,500
Shares/Par Market Value
-------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
Compaq Computer Corporation 13,300 $354,113
Computer Associates International, Inc. 11,800 698,413
<F1> Dell Computer Corporation 7,600 409,925
<F1> EMC Corporation 5,200 650,000
Intel Corporation 16,800 2,216,550
International Business Machines Corporation 4,300 507,400
Lucent Technologies, Inc. 14,150 859,613
<F1> Microsoft Corporation 24,500 2,603,125
<F1> MicroStrategy Incorporated 1,100 95,769
Motorola, Inc. 5,400 768,825
<F1> Oracle Corporation 8,100 632,306
<F1> Parametric Technology Company 2,300 48,444
PE Corporation 3,300 318,450
<F1> Quantum Corporation 7,600 90,725
<F1> Seagate Technology, Inc. 6,200 373,550
<F1> Siebel Systems, Inc. 2,200 262,762
<F1> Sun Microsystems, Inc. 19,000 1,780,359
Texas Instruments, Incorporated 6,400 1,024,000
-------------------------------------------------------------------------
TOTAL 18,211,635
-------------------------------------------------------------------------
TRANSPORTATION (1.2%)
Union Pacific Corporation 17,200 672,950
-------------------------------------------------------------------------
UTILITIES (2.0%)
Columbia Energy Group 8,600 509,550
DTE Energy Company 8,600 249,400
Dynegy Inc. 3,000 188,250
PG&E Corporation 10,300 216,300
-------------------------------------------------------------------------
Total 1,163,500
-------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $49,250,054) 56,834,736
=========================================================================
MONEY MARKET INVESTMENTS (1.4%)
Finance (1.4%)
CXC Incorporated, 6.25%, 4/3/00 800,000 799,722
-------------------------------------------------------------------------
TOTAL MONEY MARKET INVESTMENTS
(Cost $799,722) 799,722
=========================================================================
TOTAL INVESTMENTS (99.8%)
(Cost $50,049,776)<F2> 57,634,458
=========================================================================
OTHER ASSETS, LESS LIABILITIES (0.2%) 114,131
=========================================================================
TOTAL NET ASSETS (100.0%) $57,748,589
=========================================================================
<F1> Non-Income Producing
ADR - American Depository Receipt
<F2> At March 31, 2000, the aggregate cost of securities for federal income tax
purposes was $50,520,971 and the net unrealized appreciation of investments
based on that cost was $7,113,487 which is comprised of $12,214,975
aggregate gross unrealized appreciation and $5,101,488 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: $97.9 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
3/31/00
Technology 31%
Finance 12%
Other Industries 10%
Basic Materials/Capital Goods 10%
Consumer Staples 9%
Healthcare 8%
Consumer Cyclicals 8%
Index Futures and Other Assets 7%
Energy 5%
TOP 10 EQUITY HOLDINGS
3/31/00
Company % Net Assets
- -------------------------------------------------
Microsoft Corporation 4.0%
Cisco Systems, Inc. 3.9%
General Electric Company 3.7%
Intel Corporation 3.2%
Exxon Mobil Corporation 2.0%
Wal-Mart Stores, Inc. 1.8%
Oracle Corporation 1.6%
International Business Machines Corporation 1.6%
Citigroup, Inc. 1.5%
Lucent Technologies, Inc. 1.4%
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 19,521 20,650
TOTAL RETURN Average
Annual
One Since
For the periods ended March 31, 2000 Year Inception<F1>
- ---------------------------------------------------------------------
Index 500 Stock Fund
(Class A - without initial sales charge) 17.15% 26.43%
- ---------------------------------------------------------------------
S&P 500/R Index 17.98% 27.31%
- ---------------------------------------------------------------------
<F1>Fund inception date is 3/31/97. Returns are annualized.
The Standard & Poor's 500 Composite Stock Price Index is an unmanaged index of
500 selected common stocks, most of which are listed on the New York Stock
Exchange. The index is heavily weighted toward stocks with large market
capitalizations and represents approximately two-thirds of the total market
value of all domestic common stocks. The index cannot be invested in directly
and does not include sales charges.
This graph assumes an initial investment of $10,000 made in Class A and Class B
shares, with all sales charges on March 31, 1997 (commencement of operations).
Returns shown include fee waivers and deductions for all Fund expenses. In the
absence of fee waivers, total return would be reduced. Past performance is not
predictive of future performance. Investment return and principal value will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. Returns on p. 3 reflect the maximum sales charge for Class
A and a 5% contingent deferred sales charge for Class B One Year and 3% for
Since Inception.
<PAGE>
MARCH 31, 2000
INDEX 500 STOCK FUND
SCHEDULE OF INVESTMENTS
Shares/Par Market Value
-------------------------------------------------------------------------
COMMON STOCK (92.5%)
BASIC MATERIALS (2.4%)
Air Products and Chemicals, Inc. 1,600 $45,500
Alcan Aluminum Ltd. 1,600 54,200
Alcoa, Inc. 2,700 189,675
Allegheny Technologies Incorporated 700 14,044
Arch Coal, Inc. 147 1,029
Archer-Daniels-Midland Company 4,350 45,131
Barrick Gold Corporation 2,800 43,925
Bemis Company, Inc. 400 14,750
<F1> Bethlehem Steel Corporation 900 5,400
Boise Cascade Corporation 400 13,900
Champion International Corporation 700 37,275
Dow Chemical Company 1,600 182,400
E.I. du Pont de Nemours & Co. 7,500 396,563
Eastman Chemical Company 500 22,750
Ecolab, Inc. 900 33,019
Engelhard Corporation 900 13,613
<F1> FMC Corporation 200 11,300
<F1> Freeport-McMoRan Copper &
Gold, Inc. - Class B 1,200 14,475
Georgia Pacific Corp. 1,300 51,431
Great Lakes Chemical Corporation 400 13,600
Hercules Incorporated 800 12,900
Homestake Mining Company 1,900 11,400
<F1> Inco Limited 1,400 25,638
International Flavors & Fragrances, Inc. 800 28,050
International Paper Company 2,991 127,865
Louisiana-Pacific Corporation 800 11,100
Mead Corporation 700 24,456
Monsanto Company 4,500 231,750
Newmont Mining Corporation 1,258 28,226
Nucor Corporation 600 30,000
<F1> Pactiv Corporation 1,300 11,375
Phelps Dodge Corporation 496 23,560
Placer Dome, Inc. 2,300 18,688
Potlatch Corporation 200 8,600
PPG Industries, Inc. 1,300 68,006
Praxair, Inc. 1,200 49,950
Reynolds Metals Company 500 33,437
Rohm and Haas Company 1,605 71,623
Sigma-Aldrich Corporation 700 18,812
Temple-Inland, Inc. 400 19,925
Union Carbide Corporation 900 52,481
USX-U.S. Steel Group, Inc. 600 15,000
Vulcan Materials Company 700 32,069
<F1> W.R. Grace & Co. 600 7,613
Westvaco Corporation 700 23,362
Weyerhaeuser Company 1,700 96,900
Willamette Industries, Inc. 800 32,100
Shares/Par Market Value
-------------------------------------------------------------------------
BASIC MATERIALS (CONTINUED)
Worthington Industries, Inc. 600 $7,425
-------------------------------------------------------------------------
TOTAL 2,326,291
-------------------------------------------------------------------------
CAPITAL GOODS (7.6%)
<F1> Allied Waste Industries, Inc. 1,300 8,531
Avery Dennison Corporation 800 48,850
Ball Corporation 200 6,913
B.F. Goodrich Company 800 22,950
Boeing Company 6,870 260,631
Briggs & Stratton Corporation 200 8,225
Caterpillar, Inc. 2,600 102,538
Cooper Industries, Inc. 700 24,500
Corning Incorporated 2,000 388,000
Crane Co. 550 12,959
Crown Cork & Seal Company, Inc. 900 14,400
Cummins Engine Company, Inc. 300 11,269
Danaher Corporation 1,000 51,000
Deere & Company 1,600 60,800
Dover Corporation 1,500 71,813
Eaton Corporation 600 46,800
Emerson Electric Co. 3,100 163,913
Fluor Corporation 500 15,500
General Dynamics Corporation 1,400 69,650
General Electric Company 23,500 3,646,906
Honeywell International, Inc. 5,650 297,684
Illinois Tool Works, Inc. 2,200 121,550
Ingersoll-Rand Company 1,150 50,888
ITT Industries, Inc. 600 18,638
Johnson Controls, Inc. 600 32,438
Lockheed Martin Corporation 2,800 57,225
McDermott International, Inc. 400 3,675
Milacron, Inc. 200 2,887
Millipore Corporation 300 16,931
Minnesota Mining and
Manufacturing Company 2,900 256,831
Molex Incorporated 1,350 79,312
NACCO Industries, Inc. - Class A 100 4,794
National Service Industries, Inc. 300 6,319
<F1> Navistar International Corporation 500 20,062
Northrop Grumman Corporation 500 26,469
<F1> Owens-Illinois, Inc. 1,100 18,562
PACCAR, Inc. 500 25,000
Pall Corporation 900 20,194
Parker-Hannifin Corporation 850 35,116
Pitney Bowes, Inc. 1,900 84,906
Rockwell International Corporation 1,300 54,356
<F1> Sealed Air Corporation 614 33,348
<F1> Solectron Corporation 4,200 168,262
Textron, Inc. 1,100 66,962
<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)
<F1> Thermo Electron Corporation 1,200 $24,450
Thomas & Betts Corporation 400 11,300
The Timken Company 500 8,125
Tyco International Ltd. 12,120 604,485
United Technologies Corporation 3,400 214,837
Waste Management, Inc. 4,457 61,005
-------------------------------------------------------------------------
TOTAL 7,462,759
-------------------------------------------------------------------------
COMMUNICATION SERVICES (7.0%)
ALLTEL Corporation 2,300 145,044
AT&T Corp. 22,931 1,289,869
Bell Atlantic Corporation 11,170 682,766
BellSouth Corporation 13,500 634,500
CenturyTel, Inc. 1,000 37,125
<F1> Global Crossing Ltd. 5,380 220,244
GTE Corporation 6,900 489,900
<F1> MCI WorldCom, Inc. 20,322 920,841
<F1> Nextel Communications, Inc. - Class A 2,600 385,450
SBC Communications, Inc. 24,323 1,021,566
Sprint Corporation (FON Group) 6,200 390,600
<F1> Sprint Corporation (PCS Group) 6,200 404,937
US WEST, Inc. 3,681 267,332
-------------------------------------------------------------------------
TOTAL 6,890,174
-------------------------------------------------------------------------
CONSUMER CYCLICALS (7.6%)
American Greetings Corporation - Class A 500 9,125
Armstrong World Industries, Inc. 300 5,363
<F1> AutoZone, Inc. 1,000 27,750
<F1> Bed Bath & Beyond, Inc. 1,000 39,375
<F1> Best Buy Co., Inc. 1,500 129,000
Black & Decker Corporation 600 22,538
Brunswick Corporation 600 11,363
Carnival Corporation 4,500 111,656
<F1> Cendant Corporation 5,072 93,832
Centex Corporation 400 9,525
Circuit City Stores-Circuit City Group 1,500 91,313
<F1> Consolidated Stores Corporation 800 9,100
Cooper Tire & Rubber Company 500 6,281
<F1> Costco Wholesale Corporation 3,200 168,200
Dana Corporation 1,178 33,205
Delphi Automotive Systems Corporation 4,104 65,664
Dillard's, Inc. - Class A 800 13,150
Dollar General Corporation 1,912 51,385
Dow Jones & Company, Inc. 600 43,088
Dun & Bradstreet Corporation 1,200 34,350
<F1> Federated Department Stores, Inc. 1,500 62,625
Ford Motor Company 8,700 399,656
Gannet Co., Inc. 2,000 140,750
Gap, Inc. 6,162 306,945
Shares/Par Market Value
-------------------------------------------------------------------------
CONSUMER CYCLICALS (CONTINUED)
General Motors Corporation 4,600 $380,938
Genuine Parts Company 1,250 29,844
Goodyear Tire & Rubber Company 1,100 25,644
H&R Block, Inc. 700 31,325
Harcourt General, Inc. 600 22,350
Harley-Davidson, Inc. 1,100 87,313
<F1> Harrah's Entertainment, Inc. 900 16,706
Hasbro, Inc. 1,350 22,275
Hilton Hotels Corporation 2,700 20,925
Home Depot, Inc. 16,550 1,067,475
IMS Health Incorporated 2,200 37,263
Interpublic Group of Companies, Inc. 2,000 94,500
J.C. Penney Company, Inc. 1,900 28,262
Jostens, Inc. 200 4,875
Kaufman and Broad Home Corporation 300 6,431
<F1> Kmart Corporation 3,500 33,906
Knight-Ridder, Inc. 600 30,562
<F1> Kohl's Corporation 1,200 123,000
Leggett & Platt, Incorporated 1,400 30,100
The Limited, Inc. 1,542 64,957
Liz Claiborne, Inc. 400 18,325
Lowe's Companies, Inc. 2,700 157,612
Marriott International, Inc. - Class A 1,800 56,700
Masco Corporation 3,200 65,600
Mattel, Inc. 3,100 32,356
May Department Stores Company 2,350 66,975
Maytag Corporation 600 19,875
McGraw-Hill Companies, Inc. 1,400 63,700
Meredith Corporation 400 11,075
<F1> Mirage Resorts, Incorporated 1,400 27,125
The New York Times Company - Class A 1,300 55,819
NIKE, Inc. - Class B 2,000 79,250
Nordstrom, Inc. 1,000 29,500
<F1> Office Depot, Inc. 2,300 26,594
Omnicom Group, Inc. 1,200 112,125
Owens Corning 400 7,750
Pep Boys - Manny, Moe & Jack 400 2,375
Pulte Corporation 300 6,262
<F1> Reebok International Ltd. 400 3,700
Russell Corporation 200 2,862
Sears, Roebuck & Co. 2,700 83,362
Service Corporation International 2,500 7,500
Sherwin-Williams Company 1,200 26,325
Snap-on, Incorporated 400 10,475
Springs Industries, Inc. - Class A 200 7,600
The Stanley Works 600 15,825
<F1> Staples, Inc. 3,400 68,000
Tandy Corporation 1,400 71,050
Target Corporation 3,100 231,725
<PAGE>
MARCH 31, 2000
INDEX 500 STOCK FUND
Shares/Par Market Value
-------------------------------------------------------------------------
CONSUMER CYCLICALS (CONTINUED)
Times Mirror Company - Class A 400 $37,175
TJX Companies, Inc. 2,200 48,812
<F1> Toys "R" Us 1,700 25,181
Tribune Company 1,700 62,156
TRW, Inc. 900 52,650
V. F. Corporation 900 21,656
Wal-Mart Stores, Inc. 31,800 1,764,900
Whirlpool Corporation 600 35,175
Young & Rubicam, Inc. 500 23,500
-------------------------------------------------------------------------
TOTAL 7,482,537
-------------------------------------------------------------------------
CONSUMER STAPLES (9.1%)
Adolph Coors Company - Class B 200 9,563
Alberto-Culver Company - Class B 400 9,525
Albertson's, Inc. 3,012 93,372
Anheuser-Busch Companies, Inc. 3,400 211,650
Avon Products, Inc. 1,700 49,406
Bestfoods 2,000 93,625
Brown-Forman Corporation - Class B 500 27,219
Campbell Soup Company 3,000 92,250
Cardinal Health, Inc. 1,950 89,456
<F1> CBS Corporation 5,467 309,569
<F1> Clear Channel Communications, Inc. 2,400 165,750
Clorox Company 1,700 55,250
The Coca-Cola Company 17,600 826,100
Coca-Cola Enterprises, Inc. 3,000 64,688
Colgate-Palmolive Company 4,100 231,138
<F1> Comcast Corporation - Class A 6,300 273,263
ConAgra, Inc. 3,500 63,438
CVS Corporation 2,800 105,175
Darden Restaurants, Inc. 900 16,031
Deluxe Corporation 600 15,900
Fort James Corporation 1,600 35,200
Fortune Brands, Inc. 1,200 30,000
General Mills, Inc. 2,200 79,612
Gillette Company 7,600 286,425
Great Atlantic & Pacific Tea Co., Inc. 300 5,850
H.J. Heinz Company 2,600 90,675
Hershey Foods Corporation 1,000 48,750
Kellogg Company 2,900 74,312
Kimberly-Clark Corporation 3,900 218,400
<F1> Kroger Company 5,900 103,619
Longs Drug Stores Corporation 300 6,825
McDonald's Corporation 9,700 364,356
McKesson HBOC, Inc. 2,021 42,441
<F1> MediaOne Group, Inc. 4,400 356,400
Nabisco Group Holdings Corp. 2,300 27,600
Newell Rubbermaid, Inc. 1,945 48,260
PepsiCo, Inc. 10,400 359,450
Philip Morris Companies, Inc. 16,900 357,012
Shares/Par Market Value
-------------------------------------------------------------------------
CONSUMER STAPLES (CONTINUED)
Procter & Gamble Company 9,400 $528,750
The Quaker Oats Company 900 54,562
R.R. Donnelley & Sons Company 900 18,844
Ralston Purina Company 2,200 60,225
Rite Aid Corporation 1,900 10,450
<F1> Safeway, Inc. 3,700 167,425
Sara Lee Corporation 6,500 117,000
The Seagram Company Ltd. 3,100 184,450
SUPERVALU, INC. 1,000 18,937
SYSCO Corporation 2,300 82,081
Time Warner, Inc. 9,200 920,000
<F1> Tricon Global Restaurants, Inc. 1,130 35,101
Tupperware Corporation 400 6,325
Unilever NV 4,053 195,051
UST, Inc. 1,300 20,312
<F1> Viacom, Inc. - Class B 5,000 263,750
Walgreen Co. 7,200 185,400
Walt Disney Company 14,700 608,213
Wendy's International, Inc. 900 18,169
Winn-Dixie Stores, Inc. 1,100 21,381
Wm. Wrigley Jr. Company 900 69,131
-------------------------------------------------------------------------
TOTAL 8,923,112
-------------------------------------------------------------------------
ENERGY (5.0%)
Amerada Hess Corporation 600 38,775
Anadarko Petroleum Corporation 900 34,819
Apache Corporation 800 39,800
Ashland, Inc. 600 20,063
Atlantic Richfield Company 2,400 204,000
Baker Hughes Incorporated 2,310 69,878
Burlington Resources, Inc. 1,605 59,385
Chevron Corporation 4,700 434,456
Conoco, Inc. - Class B 4,400 112,750
Exxon Mobil Corporation 24,705 1,922,358
Halliburton Company 3,100 127,100
Kerr-McGee Corporation 595 34,361
Occidental Petroleum Corporation 2,700 56,025
Phillips Petroleum Company 1,800 83,250
<F1> Rowan Companies, Inc. 600 17,663
Royal Dutch Petroleum Company 15,400 886,462
Schlumberger Limited 3,900 298,350
Sunoco, Inc. 600 16,425
Texaco, Inc. 4,000 214,500
Tosco Corporation 1,000 30,437
Transocean Sedco Forex, Inc. 1,487 76,302
Union Pacific Resources Group, Inc. 1,800 26,100
Unocal Corporation 1,700 50,575
USX-Marathon Group 2,200 57,337
-------------------------------------------------------------------------
TOTAL 4,911,171
-------------------------------------------------------------------------
<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 (12.0%)
AFLAC, Inc. 1,900 $86,569
Allstate Corporation 5,800 138,113
American Express Company 3,200 476,600
American General Corporation 1,810 101,586
American International Group, Inc. 11,046 1,209,537
AmSouth Bancorporation 2,800 41,825
Aon Corporation 1,825 58,856
Associates First Capital
Corporation - Class A 5,144 110,275
Bank of America Corporation 12,279 643,880
Banc One Corporation 8,258 283,869
Bank of New York Company, Inc. 5,200 216,125
BB&T Corporation 2,500 70,156
The Bear Stearns Companies, Inc. 892 40,698
Capital One Financial Corporation 1,400 67,113
Chase Manhattan Corporation 5,900 514,406
The Chubb Corporation 1,200 81,075
CIGNA Corporation 1,400 106,050
Cincinnati Financial Corporation 1,200 45,150
Citigroup, Inc. 24,145 1,432,100
Comerica Incorporated 1,150 48,156
Conseco, Inc. 2,333 26,684
Countrywide Credit Industries, Inc. 800 21,800
Fannie Mae 7,300 411,994
Fifth Third Bancorp 2,225 140,175
First Union Corporation 7,020 261,495
Firstar Corporation 6,936 159,095
FleetBoston Financial Corporation 6,597 240,791
Franklin Resources, Inc. 1,800 60,188
Freddie Mac 5,000 220,937
Golden West Financial Corporation 1,200 37,425
Hartford Financial Services Group, Inc. 1,600 84,400
Household International Inc. 3,419 127,571
Huntington Bancshares, Inc. 1,602 35,845
J.P. Morgan & Co. Incorporated 1,300 171,275
Jefferson-Pilot Corporation 800 53,250
KeyCorp 3,200 60,800
Lehman Brothers Holdings, Inc. 900 87,300
Lincoln National Corporation 1,400 46,900
Loews Corporation 800 40,000
Marsh & McLennan Companies, Inc. 1,900 209,594
MBIA, Inc. 700 36,444
MBNA Corporation 5,750 146,625
Mellon Financial Corporation 3,700 109,150
Merrill Lynch & Co., Inc. 2,700 283,500
MGIC Investment Corporation 800 34,900
Morgan Stanley Dean Witter & Co. 7,910 645,159
National City Corporation 4,500 92,812
Northern Trust Corporation 1,600 108,100
Old Kent Financial Corporation 900 29,081
Shares/Par Market Value
-------------------------------------------------------------------------
FINANCE (CONTINUED)
Paine Webber Group, Inc. 1,000 $44,000
The PNC Financial Services Group, Inc. 2,100 94,631
Progressive Corporation 600 45,637
Providian Financial Corporation 1,000 86,625
Regions Financial Corporation 1,600 36,500
SAFECO Corporation 900 23,906
Schwab Charles Corp New 5,900 335,194
SLM Holding Corporation 1,200 39,975
SouthTrust Corporation 1,200 30,525
St. Paul Companies, Inc. 1,582 53,986
State Street Corporation 1,200 116,250
Summit Bancorp. 1,200 31,500
SunTrust Banks, Inc. 2,300 132,825
Synovus Financial Corp. 1,950 36,806
T. Rowe Price Associates, Inc. 900 35,550
Torchmark Corporation 900 20,812
U.S. Bancorp 5,159 112,853
Union Planters Corporation 1,000 30,812
UnumProvident Corp. 1,676 28,492
Wachovia Corporation 1,500 101,344
Washington Mutual, Inc. 4,086 108,279
Wells Fargo & Company 11,800 483,062
-------------------------------------------------------------------------
TOTAL 11,784,993
-------------------------------------------------------------------------
HEALTHCARE (8.3%)
Abbott Laboratories 11,000 387,063
Aetna, Inc. 1,100 61,256
Allergan, Inc. 900 45,000
<F1> ALZA Corporation 700 26,294
American Home Products Corporation 9,400 504,075
<F1> Amgen, Inc. 7,300 448,038
Bausch & Lomb Incorporated 400 20,875
Baxter International, Inc. 2,100 131,644
Becton, Dickinson and Company 1,800 47,363
<F1> Biogen, Inc. 1,100 76,863
Biomet, Inc. 800 29,100
<F1> Boston Scientific Corporation 3,000 63,938
Bristol-Myers Squibb Company 14,200 820,050
C. R. Bard, Inc. 400 15,475
Columbia/HCA Healthcare Corporation 4,100 103,781
Eli Lilly and Company 7,800 491,400
<F1> Guidant Corporation 2,200 129,388
<F1> HEALTHSOUTH Corporation 2,700 15,019
<F1> Humana, Inc. 1,200 8,775
Johnson & Johnson 9,900 693,619
Mallinckrodt, Inc. 500 14,375
<F1> Manor Care, Inc. 700 9,450
Medtronic, Inc. 8,600 442,363
Merck & Co., Inc. 16,700 1,037,487
Pfizer, Inc. 27,700 1,012,781
<PAGE>
MARCH 31, 2000
INDEX 500 STOCK FUND
Shares/Par Market Value
-------------------------------------------------------------------------
HEALTHCARE (CONTINUED)
Pharmacia & Upjohn, Inc. 3,700 $219,225
<F1> Quintiles Transnational Corp. 900 15,356
Schering-Plough Corporation 10,500 385,875
<F1> St. Jude Medical, Inc. 600 15,487
Tenet Healthcare Corporation 2,300 52,900
United Healthcare Corporation 1,300 77,512
Warner-Lambert Company 6,200 604,500
<F1> Watson Pharmaceuticals, Inc. 700 27,781
<F1> Wellpoint Health Networks, Inc. - Class A 500 34,937
-------------------------------------------------------------------------
TOTAL 8,069,045
-------------------------------------------------------------------------
TECHNOLOGY (30.7%)
<F1> 3Com Corporation 2,500 139,063
<F1> Adaptec, Inc. 700 27,038
<F1> ADC Telecommunications, Inc. 2,100 113,138
Adobe Systems Incorporated 900 100,181
<F1> Advanced Micro Devices, Inc. 1,000 57,063
<F1> America Online, Inc. 15,900 1,069,275
<F1> Analog Devices, Inc. 2,500 201,406
<F1> Andrew Corporation 600 13,725
<F1> Apple Computer, Inc. 1,200 162,975
<F1> Applied Materials, Inc. 5,500 518,375
Autodesk, Inc. 400 18,200
Automatic Data Processing, Inc. 4,400 212,300
<F1> BMC Software, Inc. 1,700 83,938
<F1> Cabletron Systems, Inc. 1,200 35,175
<F1> Ceridian Corporation 1,000 19,188
<F1> Cisco Systems, Inc. 49,000 3,788,313
<F1> Citrix Systems, Inc. 1,200 79,500
Compaq Computer Corporation 12,185 324,426
Computer Associates International, Inc. 3,800 224,913
<F1> Computer Sciences Corporation 1,200 94,950
<F1> Compuware Corporation 2,600 54,762
<F1> Comverse Technology, Inc. 500 94,500
<F1> Conexant Systems, Inc. 1,400 99,400
<F1> Dell Computer Corporation 18,100 976,269
Eastman Kodak Company 2,300 124,919
Electronic Data Systems Corporation 3,400 218,237
<F1> EMC Corporation 7,356 919,500
Equifax, Inc. 1,000 25,250
First Data Corporation 3,000 132,750
<F1> Gateway, Inc. 2,300 121,900
Hewlett-Packard Company 7,300 967,706
IKON Office Solutions, Inc. 1,100 6,806
Intel Corporation 23,900 3,153,306
International Business
Machines Corporation 12,900 1,522,200
<F1> KLA-Tencor Corporation 1,200 101,100
<F1> Lexmark International
Group, Inc. - Class A 900 95,175
Shares/Par Market Value
-------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
<F1> LSI Logic Corporation 2,100 $152,512
Lucent Technologies, Inc. 22,335 1,356,851
<F1> Micron Technology, Inc. 2,000 252,000
<F1> Microsoft Corporation 36,800 3,910,000
Motorola, Inc. 5,120 728,960
<F1> National Semiconductor Corporation 1,300 78,812
<F1> NCR Corporation 700 28,087
<F1> Network Appliance, Inc. 2,200 182,050
Nortel Networks Corporation 9,360 1,179,360
<F1> Novell, Inc. 2,400 68,700
<F1> Oracle Corporation 20,350 1,588,572
<F1> Parametric Technology Company 1,900 40,019
Paychex, Inc. 1,750 91,656
PE Corp-PE Biosystems Group 1,400 135,100
<F1> PeopleSoft, Inc. 2,000 40,000
PerkinElmer, Inc. 300 19,950
Polaroid Corporation 300 7,125
<F1> QUALCOMM, Inc. 4,900 731,631
Raytheon Company - Class B 2,400 42,600
Sabre Holdings Corporation - Class A 711 26,263
Scientific-Atlanta, Inc. 1,000 63,437
<F1> Seagate Technology, Inc. 1,500 90,375
Shared Medical Systems Corporation 100 5,187
<F1> Silicon Graphics, Inc. 1,300 13,731
<F1> Sun Microsystems, Inc. 11,100 1,040,105
Tektronix, Inc. 300 16,800
<F1> Tellabs, Inc. 2,900 182,655
<F1> Teradyne, Inc. 1,300 106,925
Texas Instruments, Incorporated 5,800 928,000
<F1> Unisys Corporation 2,200 56,100
W.W. Grainger, Inc. 700 37,975
Xerox Corporation 4,800 124,800
<F1> Xilinx, Inc. 2,300 190,469
<F1> Yahoo!, Inc. 3,700 634,087
-------------------------------------------------------------------------
TOTAL 30,047,816
-------------------------------------------------------------------------
TRANSPORTATION (0.6%)
<F1> AMR Corporation 1,100 35,063
Burlington Northern Santa Fe Corporation 3,300 73,013
CSX Corporation 1,600 37,600
Delta Air Lines, Inc. 900 47,925
<F1> FedEx Corp. 2,120 82,680
Kansas City Southern Industries, Inc. 800 68,750
Norfolk Southern Corporation 2,700 38,812
Ryder System, Inc. 500 11,344
Southwest Airlines Co. 3,587 74,654
Union Pacific Corporation 1,800 70,425
<F1> US Airways Group, Inc. 600 16,687
-------------------------------------------------------------------------
TOTAL 556,953
-------------------------------------------------------------------------
<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
-------------------------------------------------------------------------
UTILITIES (2.2%)
<F1> The AES Corporation 1,500 $118,125
Ameren Corporation 1,000 30,938
American Electric Power Company, Inc. 1,400 41,738
Carolina Power & Light Company 1,200 38,925
Central and South West Corporation 1,500 25,594
Cinergy Corp. 1,200 25,800
CMS Energy Corp. 900 16,313
Coastal Corp. 1,600 73,600
Columbia Energy Group 550 32,588
Consolidated Edison, Inc. 1,600 46,400
Constellation Energy Group 1,100 35,063
Dominion Resources, Inc. 1,742 66,958
DTE Energy Company 1,000 29,000
Duke Energy Corporation 2,631 138,128
Eastern Enterprises 100 5,988
Edison International 2,500 41,406
El Paso Energy Corporation 1,600 64,600
Enron Corp. 5,200 389,350
Entergy Corporation 1,800 36,338
FirstEnergy Corp. 1,600 33,000
Florida Progress Corporation 700 32,112
FPL Group, Inc. 1,200 55,275
GPU, Inc. 900 24,637
New Century Energies, Inc. 900 27,056
<F1> Niagara Mohawk Holdings, Inc. 1,300 17,550
NICOR, Inc. 300 9,881
Northern States Power Company 1,100 21,862
ONEOK, Inc. 200 5,000
PECO Energy Company 1,300 47,937
Peoples Energy Corporation 200 5,487
PG&E Corporation 2,700 56,700
Pinnacle West Capital Corporation 600 16,912
PPL Corporation 998 20,896
Public Service Enterprise
Group Incorporated 1,600 47,400
Reliant Energy, Inc. 2,073 48,586
Sempra Energy 1,451 24,304
Southern Company 4,800 104,400
Texas Utilities Company 1,967 58,395
Unicom Corporation 1,600 58,400
Williams Companies, Inc. 3,100 136,206
-------------------------------------------------------------------------
TOTAL 2,108,848
-------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $65,881,007) 90,563,699
=========================================================================
Shares/Par Market Value
-------------------------------------------------------------------------
MONEY MARKET INVESTMENTS (7.1%)
COMMUNICATIONS EQUIPMENT (1.3%)
Motorola Credit Corporation,
6.04%, 4/20/00 1,300,000 $1,295,856
-------------------------------------------------------------------------
FEDERAL GOVERNMENT AND AGENCIES (0.6%)
<F2> Federal Home Loan Bank,
5.68%, 4/20/00 600,000 598,201
-------------------------------------------------------------------------
FINANCE LESSOR (2.6%)
Preferred Receivable Funding,
6.07%, 5/11/00 1,300,000 1,291,232
<F2> Triple A One Funding,
6.06%, 4/28/00 1,200,000 1,194,546
-------------------------------------------------------------------------
TOTAL 2,485,778
-------------------------------------------------------------------------
MISCELLANEOUS BUSINESS
CREDIT INSTITUTIONS (1.3%)
Quincy Capital Corporation,
6.05%, 4/20/00 1,300,000 1,295,849
-------------------------------------------------------------------------
SECURITY BROKER (1.3%)
<F2> Merrill Lynch, 6.04%, 5/15/00 1,300,000 1,290,404
-------------------------------------------------------------------------
TOTAL MONEY MARKET INVESTMENTS
(COST $6,966,088) 6,966,088
=========================================================================
TOTAL INVESTMENTS (99.6%)
(COST $72,847,095)<F3> 97,529,787
=========================================================================
OTHER ASSETS, LESS LIABILITIES (0.4%) 387,933
=========================================================================
TOTAL NET ASSETS (100.0%) $97,917,720
=========================================================================
<F1> Non-Income Producing
<F2> Securities segregated or earmarked as collateral for futures and delayed
settlements. Information regarding open futures contracts as of March 31,
2000 is summarized below:
Number of Expiration Unrealized
Issuer Contracts Date Appreciation
- ----------------------------------------------------------------------
S&P 500/R Stock Index
(Total notional value at
3/31/00, $6,451,365) 18 6/00 $367,485
<F3> At March 31, 2000, the aggregate cost of securities for federal income tax
purposes was $72,869,778 and the net unrealized appreciation of
investments based on that cost was $24,660,009 which is comprised of
$30,237,019 aggregate gross unrealized appreciation and $5,577,010
aggregate gross unrealized depreciation.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
MARCH 31, 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: $67.4 million
- ------------------------------------------------------------------------------
The Asset Allocation Fund invests in seven categories of assets: large-
capitalization stocks, small-capitalization stocks, foreign stocks, investment-
grade bonds, below investment-grade bonds, convertible securities and cash
equivalents. The proportion of the Fund in each category is adjusted as
appropriate to take advantage of market trends and opportunities, and securities
within each category are actively managed.
The Asset Allocation Fund recorded outstanding performance for the 2000 fiscal
year, with a total return of 31.38%, far above any of the indices used as
benchmarks. Accordingly, the Fund received an "A" rating<F1> for one year
performance in The Wall Street Journal's March 31 review of mutual funds.
The most important factor in this unusually strong performance was selection of
individual equities, especially some newer technology issues whose stock prices
have soared in value. The overall equity exposure has been maintained in a
conservative to neutral position near 50%. The mix of equity holdings has been
shifted in recent months toward the small-capitalization and foreign segments of
the market, which have outperformed large-cap stocks. Cash inflows have
generally been placed in short-term bonds, in order to maintain the desired
asset mix as stock prices have increased. Shorter maturities are desirable in
the current market environment, which anticipates further increases in interest
rates.
<F1> Funds are ranked by investment objectives defined by The Wall Street
Journal. "A" = top 20%.
SECTOR ALLOCATION
3/31/00
Investment-Grade Bonds 34%
Large-Cap Stocks/Index Futures 26%
Small-Cap Stocks 13%
Foreign Stocks 12%
Cash Equivalents 8%
Below Investment-Grade Bonds 6%
Preferred Stock 1%
<PAGE>
M A S O N S T R E E T F U N D S
ASSET ALLOCATION FUND
PERFORMANCE RELATIVE TO RELEVANT INDICES
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 17,321 20,650 12,167 11,634
TOTAL RETURN Average
Annual
One Since
For the periods ended March 31, 2000 Year Inception<F1>
- ----------------------------------------------------------------------------
Asset Allocation Fund
(Class A - without initial sales charge) 31.38% 21.57%
- ----------------------------------------------------------------------------
S&P 500/R Index 17.98% 27.31%
- ----------------------------------------------------------------------------
Merrill Lynch Domestic Master Index 1.95% 6.75%
- ----------------------------------------------------------------------------
Merrill Lynch 91-Day Treasury Bill 5.20% 5.17%
- ----------------------------------------------------------------------------
<F1>Fund inception date is 3/31/97. Returns are annualized.
In the graph, the Fund is compared against three indices representing the three
major components of the Fund: equities, fixed income and cash equivalent
investments. The indices cannot be invested in directly and do not include sales
charges.
The Merrill Lynch Domestic Master Index is an unmanaged market value weighted
index comprised of U.S. government, mortgage and investment-grade corporate
bonds. The index measures the income provided by, and the price changes of, the
underlying securities.
The Standard & Poor's 500 Composite Stock Price Index is an unmanaged index of
500 selected common stocks, most of which are listed on the New York Stock
Exchange. The index is heavily weighted toward stocks with large market
capitalizations and represents approximately two-thirds of the total market
value of all domestic common stocks.
The Merrill Lynch 91-Day Treasury Bill index is comprised of a single issue
purchased at the beginning of each month and held for a full month. The issue
selected at each month-end rebalancing is the outstanding Treasury Bill that
matures closest to, but not beyond, three months from the rebalancing date.
This graph assumes an initial investment of $10,000 made in Class A and Class B
shares, with all sales charges on March 31, 1997 (commencement of operations).
Returns shown include fee waivers and deductions for all Fund expenses. In the
absence of fee waivers, total return would be reduced. Past performance is not
predictive of future performance. Investment return and principal value will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. Returns on p. 3 reflect the maximum sales charge for Class
A and a 5% contingent deferred sales charge for Class B One Year and 3% for
Since Inception.
Investors should be aware of the risks of investments in foreign securities,
particularly investments in securities of companies in developing nations. These
include the risks of currency fluctuation, of political and economic instability
and of less well-developed government supervision and regulation of business and
industry practices, as well as differences in accounting standards. Small-cap
stocks also may carry additional risk. Smaller or newer issuers are more likely
to realize more substantial growth as well as suffer more significant losses
than larger or more established issuers. Investments in such companies can be
both more volatile and more speculative.
Schedule of Investments
Shares/Par Market Value
-------------------------------------------------------------------------
COMMON STOCK AND WARRANTS (48.7%)
DOMESTIC COMMON STOCK AND WARRANTS (36.8%)
SMALL CAP COMMON STOCK AND WARRANTS (13.1%)
CAPITAL GOODS (0.7%)
Kaydon Corporation 4,200 $114,713
<F1> MSC Industrial Direct Co. 2,900 52,200
<F1> Sanmina Corporation 1,200 81,075
<F1> Stoneridge, Inc. 5,800 66,700
Teleflex Incorporated 3,200 113,600
-------------------------------------------------------------------------
TOTAL 428,288
-------------------------------------------------------------------------
COMMUNICATION SERVICES (0.5%)
Telefonos de Mexico SA 5,000 335,000
-------------------------------------------------------------------------
CONSUMER CYCLICAL (2.4%)
<F1> Avenue A, Inc. 800 24,400
<F1> CDW Computer Centers, Inc. 1,300 109,769
<F1> Catalina Marketing Corporation 1,800 182,250
<F1> Charles River Associates Incorporated 3,400 66,087
Cintas Corporation 1,500 58,781
<F1> The Corporate Executive Board Company 1,600 81,200
<F1> David's Bridal, Inc. 3,600 43,425
<F1> Heidrick & Struggles International, Inc. 1,000 40,125
<F1> Hotel Reservations
Network, Inc. - Class A 2,100 37,275
<F1> JAKKS Pacific, Inc. 2,000 43,125
<F1> Jones Apparel Group, Inc. 3,200 102,000
<F1> Lamar Advertising Company 1,900 86,450
Leggett & Platt, Incorporated 3,000 64,500
<F1> Michaels Stores, Inc. 4,300 175,225
<F1> O'Reilly Automotive, Inc. 13,400 190,113
<F1> Robert Half International, Inc. 300 14,231
The Talbots, Inc. 2,400 141,300
<F1> Tetra Tech, Inc. 5,700 135,375
<F1> Whitehall Jewelers, Inc. 1,700 39,950
-------------------------------------------------------------------------
TOTAL 1,635,581
-------------------------------------------------------------------------
CONSUMER STAPLES (0.5%)
<F1> Acme Communications, Inc. 3,600 82,350
<F1> Patterson Dental Company 4,650 177,862
<F1> Steiner Leisure Limited 2,450 47,163
-------------------------------------------------------------------------
TOTAL 307,375
-------------------------------------------------------------------------
ENERGY (1.2%)
Anadarko Petroleum Corporation 2,000 77,375
<F1> Arcadia Financial, Ltd. 500 500
<F1> BJ Services Company 4,000 295,500
<F1> Global Industries, Ltd. 5,700 83,363
<F1> Nabors Industries, Inc. 3,700 143,606
<F1> Stone Energy Corporation 1,500 73,875
<F1> Weatherford International, Inc. 2,300 135,556
-------------------------------------------------------------------------
TOTAL 809,775
-------------------------------------------------------------------------
<PAGE>
MARCH 31, 2000
ASSET ALLOCATION FUND
Shares/Par Market Value
-------------------------------------------------------------------------
FINANCE (1.0%)
Financial Security Assurance
Holdings Ltd. 3,200 $235,000
GreenPoint Financial Corp. 3,142 61,662
Investors Financial Services Corp. 4,800 282,600
<F1> Knight/Trimark Group, Inc. 1,700 86,700
<F1> Trammell Crow Company 3,300 36,506
-------------------------------------------------------------------------
TOTAL 702,468
-------------------------------------------------------------------------
HEALTHCARE (1.2%)
<F1> Aspect Medical Systems, Inc. 700 25,112
<F1> Biovail Corporation 2,100 93,056
Hooper Holmes, Inc. 900 30,881
<F1> Lincare Holdings, Inc. 5,800 164,575
<F1> Neoforma.com, Inc. 1,900 31,113
<F1> Province Healthcare Company 1,900 54,388
<F1> Quorum Health Group, Inc. 3,750 37,734
<F1> Sybron International Corporation 5,800 168,200
<F1> Total Renal Care Holdings, Inc. 6,900 21,563
<F1> Universal Health Services, Inc. - Class B 300 14,700
<F1> Wesley Jessen VisionCare, Inc. 4,700 168,906
-------------------------------------------------------------------------
TOTAL 810,228
-------------------------------------------------------------------------
TECHNOLOGY (5.2%)
<F1> Advent Software, Inc. 1,700 77,988
<F1> Applied Materials, Inc. 1,687 159,000
<F1> Aspen Technology, Inc. 1,700 68,637
<F1> Avanex Corporation 1,100 166,925
<F1> C-Cube Microsystems, Inc. 900 65,531
<F1> Comverse Technology, Inc. 1,200 226,800
<F1> Computer Horizons Corp. 2,500 42,813
<F1> Cymer, Inc. 900 45,000
<F1> DST Systems, Inc. 1,900 123,381
<F1> Eprise Corporation 500 7,875
<F1> Extensity, Inc. 1,000 48,000
<F1> GaSonics International Corporation 4,600 182,419
<F1> Getty Images, Inc. 2,000 71,875
<F1> Great Plains Software, Inc. 1,200 64,050
<F1> Inet Technologies, Inc. 800 42,350
<F1> Infonautics, Inc. 2,800 23,100
<F1> JDS Uniphase Corporation 1,900 229,069
<F1> Jupiter Communications, Inc. 1,700 39,100
<F1> Keane, Inc. 1,400 35,350
<F1> KMC Telecom Holdings, Inc. (144A) 250 750
<F1> MMC Networks, Inc. 600 19,800
<F1> The Management Network Group, Inc. 2,000 53,875
<F1> Metasolv Software, Inc. 1,000 59,062
<F1> Microchip Technology Incorporated 1,500 98,625
<F1> PMC-Sierra, Inc. 1,000 203,688
Paychex, Inc. 1,900 99,512
Shares/Par Market Value
-------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
<F1> Power-One, Inc. 2,900 $175,088
<F1> QLogic Corporation 1,700 230,350
<F1> Rational Software Corporation 600 45,900
<F1> Semtech Corporation 2,500 160,156
<F1> SmartForce Public Limited Company 1,300 59,637
<F1> Tellabs, Inc. 3,000 188,953
<F1> Telocity, Inc. 100 1,238
<F1> Transaction Systems
Architects, Inc. - Class A 1,400 40,425
<F1> UTStarcom, Inc. 3,800 296,637
<F1> VeriSign, Inc. 400 59,800
-------------------------------------------------------------------------
TOTAL 3,512,759
-------------------------------------------------------------------------
TRANSPORTATION (0.4%)
C.H. Robinson Worldwide, Inc. 1,300 48,425
Expeditors International of
Washington, Inc. 1,800 71,550
<F1> Knight Transportation, Inc. 4,650 81,375
<F1> Swift Transportation Co., Inc. 4,400 90,200
-------------------------------------------------------------------------
TOTAL 291,550
-------------------------------------------------------------------------
TOTAL SMALL CAP COMMON STOCK
AND WARRANTS 8,833,024
-------------------------------------------------------------------------
LARGE CAP COMMON STOCK (23.7%)
BASIC MATERIALS (0.4%)
Ecolab, Inc. 5,000 183,437
The Mead Corporation 1,400 48,913
PPG Industries, Inc. 800 41,850
-------------------------------------------------------------------------
TOTAL 274,200
-------------------------------------------------------------------------
CAPITAL GOODS (1.8%)
Avery Dennison Corporation 3,400 207,613
Corning Incorporated 1,100 213,400
General Electric Company 3,200 496,600
Illinois Tool Works, Inc. 1,700 93,925
Tyco International Ltd. 3,700 184,537
-------------------------------------------------------------------------
TOTAL 1,196,075
-------------------------------------------------------------------------
COMMUNICATION SERVICES (1.3%)
AT&T Corp. 4,795 269,719
GTE Corporation 1,800 127,800
<F1> MCI WorldCom, Inc. 3,577 162,083
<F1> Nextel Communications, Inc. - Class A 2,000 296,500
-------------------------------------------------------------------------
TOTAL 856,102
-------------------------------------------------------------------------
CONSUMER CYCLICAL (3.4%)
<F1> Amazon.com, Inc. 1,100 73,700
<F1> Costco Wholesale Corporation 3,300 173,456
<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 CYCLICAL (CONTINUED)
<F1> eToys, Inc. 2,200 $19,456
Ford Motor Company 1,800 82,688
Harley-Davidson, Inc. 3,800 301,625
The Interpublic Group of Companies, Inc. 2,600 122,850
<F1> Kohl's Corporation 3,800 389,500
The McGraw-Hill Companies, Inc. 3,500 159,250
The New York Times Company - Class A 5,100 218,981
Omnicom Group, Inc. 900 84,094
Target Corporation 1,900 142,025
Tiffany & Co. 600 50,175
Tribune Company 5,100 186,469
Wal-Mart Stores, Inc. 5,200 288,600
-------------------------------------------------------------------------
TOTAL 2,292,869
-------------------------------------------------------------------------
CONSUMER STAPLES (1.9%)
Anheuser-Busch Companies, Inc. 1,100 68,475
The Coca-Cola Company 1,500 70,406
Keebler Foods Company 5,900 169,256
Kimberly-Clark Corporation 3,000 168,000
McDonald's Corporation 3,200 120,200
PepsiCo, Inc. 2,900 100,231
The Procter & Gamble Company 2,300 129,375
The Quaker Oats Company 1,500 90,938
Time Warner, Inc. 1,300 130,000
<F1> Viacom, Inc. - Class B 1,900 100,225
Walgreen Co. 6,500 167,375
-------------------------------------------------------------------------
TOTAL 1,314,481
-------------------------------------------------------------------------
ENERGY (1.3%)
BP Amoco PLC, ADR 2,200 116,738
Chevron Corporation 600 55,462
Conoco, Inc. - Class B 5,400 138,375
EOG Resources, Inc. 6,900 146,194
Exxon Mobil Corporation 2,620 203,869
Schlumberger Limited 1,000 76,500
Tosco Corporation 4,400 133,925
-------------------------------------------------------------------------
TOTAL 871,063
-------------------------------------------------------------------------
FINANCE (2.2%)
American International Group, Inc. 700 76,650
The Bank of New York Company, Inc. 3,400 141,312
The Chase Manhattan Corporation 2,200 191,813
Citigroup, Inc. 5,750 341,047
Fifth Third Bancorp 1,700 107,100
The Goldman Sachs Group, Inc. 1,300 136,662
Lehman Brothers Holdings, Inc. 1,900 184,300
Morgan Stanley, Dean Witter, & Co. 4,000 326,250
-------------------------------------------------------------------------
TOTAL 1,505,134
-------------------------------------------------------------------------
Shares/Par Market Value
-------------------------------------------------------------------------
HEALTHCARE (1.4%)
Bristol-Myers Squibb Company 2,400 $138,600
<F1> Guidant Corporation 900 52,931
<F1> Health Management
Associates, Inc. - Class A 1,300 18,525
Johnson & Johnson 1,500 105,094
Eli Lilly and Company 1,800 113,400
Medtronic, Inc. 4,500 231,469
Merck & Co., Inc. 1,800 111,825
Pfizer, Inc. 900 32,906
Warner-Lambert Company 1,100 107,250
-------------------------------------------------------------------------
TOTAL 912,000
-------------------------------------------------------------------------
TECHNOLOGY (9.0%)
<F1> Amdocs Limited 5,900 434,756
<F1> America Online, Inc. 2,800 188,300
<F1> Atmel Corporation 3,800 196,175
<F1> Cisco Systems, Inc. 9,000 695,812
<F1> Concord EFS, Inc. 7,950 182,353
<F1> Dell Computer Corporation 3,600 194,175
<F1> EMC Corporation 1,500 187,500
Electronic Data Systems Corporation 3,500 224,656
<F1> Fiserv, Inc. 10,125 376,523
Hewlett-Packard Company 1,400 185,588
Intel Corporation 3,700 488,169
International Business
Machines Corporation 1,400 165,200
<F1> Lexmark International
Group, Inc. - Class A 1,800 190,350
<F1> Microsoft Corporation 4,600 488,750
Motorola, Inc. 1,000 142,375
Nortel Networks Corporation 3,200 403,200
<F1> Oracle Corporation 3,200 249,800
<F1> Sun Microsystems, Inc. 2,200 206,147
Texas Instruments Incorporated 1,800 288,000
<F1> 3Com Corporation 1,300 72,313
<F1> TIBCO Software, Inc. 4,800 391,200
<F1> Williams Communications
Group, Inc. - Class A 3,000 155,438
-------------------------------------------------------------------------
TOTAL 6,106,780
-------------------------------------------------------------------------
TRANSPORTATION (0.3%)
<F1> FedEx Corp. 1,800 70,200
Southwest Airlines Co. 5,500 114,468
-------------------------------------------------------------------------
TOTAL 184,668
-------------------------------------------------------------------------
UTILITIES (0.7%)
Enron Corp. 6,000 449,250
-------------------------------------------------------------------------
TOTAL LARGE CAP COMMON STOCK 15,962,622
-------------------------------------------------------------------------
TOTAL DOMESTIC COMMON
STOCK AND WARRANTS 24,795,646
========================================================================
<PAGE>
MARCH 31, 2000
ASSET ALLOCATION FUND
Country Shares/Par Market Value
-------------------------------------------------------------------------
FOREIGN COMMON STOCK (11.9%)
CAPITAL GOODS (1.0%)
Clariant AG Switzerland 400 $150,599
<F1> Epcos AG Germany 3,000 396,146
Invensys PLC United Kingdom 32,500 144,395
-------------------------------------------------------------------------
TOTAL 691,140
-------------------------------------------------------------------------
COMMUNICATION SERVICES (3.1%)
<F1> Alcatel Alsthom France 700 153,588
<F1> Nippon Television and
Telephone Corporation Japan 9 143,031
Nokia Oyj Finland 2,000 422,938
NTT Mobile
Communication
Network, Inc. Japan 15 615,707
Reuters Group PLC United Kingdom 1,000 20,292
Sonera Group Oyj Finland 7,000 477,576
Telefonica S.A. Spain 9,363 236,523
-------------------------------------------------------------------------
TOTAL 2,069,655
-------------------------------------------------------------------------
CONSUMER CYCLICAL (0.4%)
Buhrmann NV Italy 11,000 278,929
-------------------------------------------------------------------------
CONSUMER STAPLES (0.7%)
<F1> MIH Ltd. Netherlands 5,000 305,000
PrimaCom AG Germany 2,500 191,375
-------------------------------------------------------------------------
TOTAL 496,375
-------------------------------------------------------------------------
ENERGY (0.7%)
British Energy - A Shares United Kingdom 26,500 42
British Energy PLC United Kingdom 23,739 73,564
Scottish Power PLC United Kingdom 20,000 162,003
Total Fina Elf France 1,520 229,803
-------------------------------------------------------------------------
TOTAL 465,412
-------------------------------------------------------------------------
FINANCE (1.4%)
Bank Sarasin & Cie Switzerland 65 179,828
Banque Nationale de Paris France 3,400 268,403
DBS Group
Holdings Limited Singapore 8,000 105,698
The Fuji Bank, Limited Japan 25,000 235,217
HSBC Holdings PLC United Kingdom 10,500 122,712
-------------------------------------------------------------------------
TOTAL 911,858
-------------------------------------------------------------------------
HEALTHCARE (0.2%)
<F1> QIAGEN N.V. Germany 389 55,834
SmithKline Beecham PLC United Kingdom 7,500 99,068
-------------------------------------------------------------------------
TOTAL 154,902
-------------------------------------------------------------------------
Country Shares/Par Market Value
-------------------------------------------------------------------------
TECHNOLOGY (3.6%)
<F1> Fantastic Corporation Spain 10,000 $296,344
<F1> Freenet.de AG Germany 2,000 221,995
<F1> F-Secure Oyj Finland 5,000 358,445
<F1> Jazztel PLC Spain 5,000 404,687
<F1> Perlos Oyj Finland 10,000 355,957
Philips Electronics, Inc. Netherlands 2,300 386,462
<F1> PopNet Internet AG Germany 6,000 218,741
Tecan AG Switzerland 300 210,742
-------------------------------------------------------------------------
TOTAL 2,453,373
-------------------------------------------------------------------------
TRANSPORTATION (0.8%)
Porsche AG Germany 85 235,869
Railtrack Group PLC United Kingdom 12,271 143,590
Stagecoach Holdings PLC United Kingdom 75,000 145,372
-------------------------------------------------------------------------
TOTAL 524,831
-------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCK 8,046,475
-------------------------------------------------------------------------
TOTAL COMMON STOCK AND WARRANTS
(COST $19,137,611) 32,842,121
=========================================================================
PREFERRED SECURITIES (1.0%)
BANKS (0.1%)
California Federal Pfd Capital 4,000 87,500
-------------------------------------------------------------------------
BROADCASTING/MEDIA (0.7%)
BROADCASTING (0.3%)
Crown Castle Intl. Corp. 1,060 104,940
Sinclair Capital 1,000 95,000
-------------------------------------------------------------------------
TOTAL 199,940
-------------------------------------------------------------------------
PRINTING AND PUBLISHING (0.4%)
Primedia, Inc. 2,500 233,750
-------------------------------------------------------------------------
TOTAL BROADCASTING/MEDIA 433,690
-------------------------------------------------------------------------
CABLE TELEVISION (0.1%)
Adelphia Communications 404 43,430
-------------------------------------------------------------------------
HEALTHCARE (0.1%)
Fresenius Medical Care Holdings,
7.875%, 2/1/08 100,000 88,000
-------------------------------------------------------------------------
TOTAL PREFERRED SECURITIES
(Cost $679,104) 652,620
=========================================================================
BONDS (40.4%)
INVESTMENT-GRADE BONDS (34.2%)
AUTO RELATED (0.7%)
Ford Motor Credit Corporation,
7.375%, 10/28/09 200,000 195,660
General Motors Acceptance
Corporation, 7.75%, 1/19/10 250,000 250,185
-------------------------------------------------------------------------
TOTAL 445,845
-------------------------------------------------------------------------
<PAGE>
M A S O N S T R E E T F U N D S
ASSET ALLOCATION FUND
Shares/Par Market Value
-------------------------------------------------------------------------
COMMERCIAL MORTGAGES (6.2%)
Asset Securitization Corporation,
1.257%, 11/13/26 IO 12,461,226 $331,344
Blackrock Capital Finance,
Class B3, 7.25%, 11/25/28 (144A) 186,108 87,471
Comed Transitional Trust,
5.74%, 12/25/10 250,000 222,790
Criimi Mae Commercial Mortgage
Trust, 7.0%, 11/2/11 339,000 261,030
EMAC Owner Trust,
1.378%, 1/15/23 (144A) IO 6,659,551 433,204
Health Care Receivable,
6.25%, 2/1/03 (144A) 125,000 121,113
Kmart CMBS Financing, Inc.,
5.58%, 3/1/07 1,000,000 998,190
Midland Realty Acceptance Corp.,
1.389%, 1/25/29 (144A) IO 4,475,952 244,118
Mortgage Capital Funding, Inc.,
7.288%, 3/20/07 100,000 97,872
Peco Energy Transition Trust,
6.13%, 3/1/09 700,000 644,224
Polaris Commercial Loan Master
Trust, 5.363%, 3/15/04 750,000 749,483
-------------------------------------------------------------------------
TOTAL 4,190,839
-------------------------------------------------------------------------
CONSUMER STAPLES (0.4%)
Anheuser-Busch Companies, Inc.,
7.5%, 3/15/12 250,000 250,903
-------------------------------------------------------------------------
COSMETICS & TOILETRIES (0.7%)
Procter & Gamble Company,
6.875%, 9/15/09 500,000 486,822
-------------------------------------------------------------------------
ENERGY (0.8%)
Chevron Corporation, 6.625%, 10/1/04 250,000 244,824
Scottish Power PLC, 5.65%, 11/1/06 300,000 270,280
-------------------------------------------------------------------------
TOTAL 515,104
-------------------------------------------------------------------------
FEDERAL GOVERNMENT AND AGENCIES (20.6%)
Aid-Israel, 0.0%, 11/1/24 1,000,000 214,969
Federal National Mortgage
Association, 6.0%, 5/1/11 914,103 861,798
Government National Mortgage
Association, 8.0%, 8/15/26 146,645 148,539
Government National Mortgage
Association, 8.0%, 10/15/26 350,167 354,690
Government National, Mortgage
Association, 8.0%, 7/15/27 73,848 74,709
Shares/Par Market Value
-------------------------------------------------------------------------
FEDERAL GOVERNMENT AND AGENCIES (CONTINUED)
US Treasury, 0.0%, 2/15/19 PO 1,200,000 $384,779
US Treasury, 4.875%, 3/31/01 920,000 906,200
US Treasury, 5.0%, 4/30/01 1,250,000 1,231,250
US Treasury, 5.25%, 5/15/04 100,000 96,000
US Treasury, 5.25%, 2/15/29 530,000 474,847
US Treasury, 5.625%, 12/31/02 500,000 489,375
US Treasury, 5.875%, 11/15/04 6,103,000 5,992,383
US Treasury, 6.0%, 8/15/09 559,000 551,838
US Treasury, 6.5%, 5/15/05 700,000 704,594
US Treasury, 7.5%, 2/15/05 640,000 670,400
US Treasury Inflation Index Bond,
3.875%, 4/15/29 760,347 763,274
-------------------------------------------------------------------------
TOTAL 13,919,645
-------------------------------------------------------------------------
FINANCIAL SERVICES (0.5%)
General Electric Capital Corporation,
8.75%, 5/21/07 300,000 323,685
-------------------------------------------------------------------------
GENERAL MERCHANDISE STORES (0.9%)
Home Depot, Inc., 6.5%, 9/15/04 450,000 442,102
Wal-Mart Stores, 6.55%, 8/10/04 150,000 146,999
Wal-Mart Stores, 6.875%, 8/10/09 50,000 48,675
-------------------------------------------------------------------------
TOTAL 637,776
-------------------------------------------------------------------------
HEALTHCARE (0.4%)
Johnson & Johnson,
6.625%, 9/1/09 250,000 241,657
-------------------------------------------------------------------------
MANUFACTURING (0.4%)
Honeywell International, 7.5%, 3/1/10 275,000 277,968
-------------------------------------------------------------------------
PUBLISHING (0.4%)
Times Mirror Company,
7.45%, 10/15/09 300,000 295,294
-------------------------------------------------------------------------
TELECOMMUNICATIONS (1.4%)
New England Telephone & Telegraph,
5.875%, 4/15/09 500,000 448,217
Vodafone Airtouch PLC,
7.75%, 2/15/10 (144A) 500,000 503,956
-------------------------------------------------------------------------
TOTAL 952,173
-------------------------------------------------------------------------
TRANSPORTATION (0.8%)
United Parcel Service, 8.375%, 4/1/20 500,000 552,069
-------------------------------------------------------------------------
TOTAL INVESTMENT-GRADE BONDS 23,089,780
=========================================================================
<PAGE>
MARCH 31, 2000
ASSET ALLOCATION FUND
Shares/Par Market Value
-------------------------------------------------------------------------
BELOW INVESTMENT-GRADE BONDS (6.2%)
BASIC MATERIALS (0.3%)
METALS & MINING (0.2%)
Glencore Nickel Property, Ltd.,
9.0%, 12/1/14 50,000 $42,000
Great Central Mines, Ltd.,
8.875%, 4/1/08 50,000 44,750
Murrin Murrin Holdings,
9.325%, 8/31/07 50,000 42,000
-------------------------------------------------------------------------
TOTAL 128,750
-------------------------------------------------------------------------
PAPER (0.1%)
APP China Group, Ltd., 14.0%, 3/15/10 50,000 43,250
-------------------------------------------------------------------------
TOTAL BASIC MATERIALS 172,000
-------------------------------------------------------------------------
CAPITAL GOODS (0.1%)
Laidlaw, Inc., 7.65%, 5/15/06 50,000 26,500
United Rentals, Inc., 8.8%, 8/15/08 50,000 43,750
-------------------------------------------------------------------------
TOTAL CAPITAL GOODS 70,250
-------------------------------------------------------------------------
CONSUMER STAPLES (0.6%)
HEALTHCARE (0.4%)
Columbia/HCA Healthcare,
7.69%, 6/15/25 50,000 41,031
Healthsouth Corporation,
3.25%, 4/1/03 100,000 78,125
Tenet Healthcare Corporation,
6.0%, 12/1/05 75,000 60,375
Total Renal Care Holdings,
7.0%, 5/15/09 (144A) 200,000 116,000
-------------------------------------------------------------------------
TOTAL 295,531
-------------------------------------------------------------------------
GAMING (0.2%)
Hollywood Casino,
13.0%, 8/1/06 (144A) 100,000 106,000
International Game Technology,
8.375%, 5/15/09 50,000 45,500
-------------------------------------------------------------------------
TOTAL 151,500
-------------------------------------------------------------------------
TOTAL CONSUMER STAPLES 447,031
-------------------------------------------------------------------------
CONSUMER CYCLICAL (0.9%)
AUTO & TRUCKS (0.2%)
Avis Rent-A-Car, Inc., 11.0%, 5/1/09 50,000 49,625
Budget Group, Inc., 9.125%, 4/1/06 100,000 80,000
-------------------------------------------------------------------------
TOTAL 129,625
-------------------------------------------------------------------------
HOUSEHOLD FURNITURE, APPLIANCES (0.1%)
Home Interiors & Gifts, 10.125%, 6/1/08 50,000 40,000
-------------------------------------------------------------------------
Shares/Par Market Value
-------------------------------------------------------------------------
LEISURE RELATED (0.1%)
Bally Total Fitness Holdings,
9.875%, 10/15/07 50,000 $45,750
Boyds Collection, Ltd., 9.0%, 5/15/08 50,000 45,000
-------------------------------------------------------------------------
TOTAL 90,750
-------------------------------------------------------------------------
LODGING/RESORTS (0.3%)
Hilton Hotels Corporation, 5.0%, 5/15/06 50,000 38,000
HMH Properties, Inc., 8.45%, 12/01/08 100,000 86,875
Lodgian Financing Corporation,
12.25%, 7/15/09 100,000 88,000
-------------------------------------------------------------------------
TOTAL 212,875
-------------------------------------------------------------------------
PRINTING & PUBLISHING (0.2%)
Mail-Well, Inc., 5.0%, 11/1/02 99,000 79,571
WRC Media Corporation,
12.75%, 11/15/09 (144A) 50,000 48,750
-------------------------------------------------------------------------
TOTAL 128,321
-------------------------------------------------------------------------
TOTAL CONSUMER CYCLICAL 601,571
-------------------------------------------------------------------------
ENERGY (0.1%)
EOTT Energy Partners L.P.,
11.0%, 10/1/09 50,000 50,000
-------------------------------------------------------------------------
FINANCE COMPANIES (1.3%)
BF Saul Real Estate, 9.75%, 4/1/08 250,000 216,875
Labranche & Company,
12.0%, 3/1/07 (144A) 50,000 49,250
Metris Companies, Inc.,
10.125%, 7/15/06 100,000 94,500
Olympic Financial, Ltd.,
11.5%, 3/15/07 250,000 271,250
PDVSA Finance, Ltd.,
9.75%, 2/15/10 (144A) 100,000 95,937
Sovereign Bancorp, 10.5%, 11/15/06 100,000 98,875
Willis Corroon Corporation,
9.0%, 2/1/09 50,000 37,000
-------------------------------------------------------------------------
TOTAL FINANCE COMPANIES 863,687
-------------------------------------------------------------------------
MISCELLANEOUS (0.3%)
Crescent Real Estate Equity,
7.0%, 9/15/02 50,000 45,715
Crescent Real Estate Equity,
7.5%, 9/15/07 50,000 42,190
Macerich Company,
7.25%, 12/15/02 (144A) 50,000 41,250
Security Cap. U.S. Realty,
2.0%, 5/22/03 (144A) 100,000 76,000
-------------------------------------------------------------------------
TOTAL MISCELLANEOUS 205,155
-------------------------------------------------------------------------
<PAGE>
M A S O N S T R E E T F U N D S
ASSET ALLOCATION FUND
Shares/Par Market Value
-------------------------------------------------------------------------
TECHNOLOGY (1.7%)
BROADCASTING (0.1%)
Spectrasite Holdings, Inc.,
10.75%, 3/15/10 (144A) 50,000 $47,375
-------------------------------------------------------------------------
CABLE (0.3%)
<F2> Charter Communication Holdings,
LLC, 9.92%, 4/1/11 (144A) 50,000 27,564
<F2> Charter Communication Holdings,
LLC, 9.92%, 4/1/11 50,000 27,750
<F2> NTL, Inc., 9.75%, 4/1/08 100,000 63,250
<F2> Unitedglobalcom, Inc.,
10.75%, 2/15/08 100,000 69,000
United Pan-Europe Communications
NV, 10.875%, 8/1/09 50,000 46,000
-------------------------------------------------------------------------
TOTAL 233,564
-------------------------------------------------------------------------
ELECTRONICS (0.1%)
Amkor Technologies, Inc.,
9.25%, 5/1/06 (144A) 50,000 48,250
-------------------------------------------------------------------------
OFFICE EQUIPMENT (0.2%)
Buhrmann U.S., Inc.,
12.25%, 11/1/09 (144A) 100,000 101,500
-------------------------------------------------------------------------
TELECOMMUNICATIONS (1.0%)
Arch Communications, Inc.,
13.75%, 4/15/08 100,000 84,000
<F2> Call-Net Enterprises, Inc.,
10.8%, 5/15/09 50,000 21,500
Flag Telecom Holding, Ltd.,
11.625%, 3/30/10 (144A) 50,000 47,250
Global Crossing Holding, Ltd.,
9.5%, 11/15/09 (144A) 50,000 48,250
- - GT Group Telecom,
13.25%, 2/1/10 (144A) 100,000 55,000
- - KMC Telecommunication
Holdings, Inc., 12.5%, 2/15/08 50,000 26,000
KMC Telecommunication
Holdings, Inc., 13.5%, 5/15/09 100,000 99,500
Level 3 Communications,
11.0%, 3/15/08 (144A) 50,000 47,750
Nextel Communications,
9.375%, 11/15/09 50,000 46,000
<F2> Nextel Communications,
9.95%, 2/15/08 50,000 33,750
Nextlink Communications,
10.75%, 6/1/09 100,000 95,500
Shares/Par Market Value
-------------------------------------------------------------------------
TELECOMMUNICATIONS (CONTINUED)
PSINET, Inc., 11.0%, 8/1/09 50,000 $48,500
Williams Communication
Group, Inc., 10.875%, 10/1/09 50,000 49,375
-------------------------------------------------------------------------
TOTAL 702,375
-------------------------------------------------------------------------
TOTAL TECHNOLOGY 1,133,064
-------------------------------------------------------------------------
TRANSPORT SERVICES (0.4%)
TRUCKING & SHIPPING (0.2%)
<F2> Decisionone Holdings, 11.5%, 8/1/08 400,000 2,000
North America Van Lines,
13.375%, 12/1/09 (144A) 50,000 47,500
Stena Line AB, 10.5%, 12/15/05 50,000 44,000
Vectura Group, Inc., 10.25%, 6/30/08 50,000 42,500
-------------------------------------------------------------------------
TOTAL 136,000
-------------------------------------------------------------------------
PROFESSIONAL SERVICES (0.2%)
Building One Services, 10.5%, 5/1/09 50,000 46,000
Integrated Electrical Services,
9.375%, 2/1/09 50,000 43,000
Service Corp. International,
7.7%, 4/15/09 55,000 26,950
-------------------------------------------------------------------------
TOTAL 115,950
-------------------------------------------------------------------------
TOTAL TRANSPORT SERVICES 251,950
-------------------------------------------------------------------------
UTILITIES (0.5%)
ELECTRIC (0.1%)
AES Corporation, 8.5%, 11/1/07 100,000 87,500
-------------------------------------------------------------------------
GARBAGE DISPOSAL (0.4%)
Allied Waste North America,
7.875%, 1/1/09 100,000 79,500
Allied Waste North America,
10.0%, 8/1/09 100,000 76,000
Waste Management, Inc.,
4.0%, 2/1/02 100,000 87,625
Waste Management, Inc.,
7.125%, 10/1/07 50,000 43,562
-------------------------------------------------------------------------
TOTAL 286,687
-------------------------------------------------------------------------
TOTAL UTILITIES 374,187
-------------------------------------------------------------------------
TOTAL BELOW INVESTMENT-GRADE BONDS 4,168,895
-------------------------------------------------------------------------
TOTAL BONDS
(Cost $28,080,058) 27,258,675
=========================================================================
<PAGE>
MARCH 31, 2000
ASSET ALLOCATION FUND
Shares/Par Market Value
-------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (9.3%)
FEDERAL GOVERNMENT AND AGENCIES (0.8%)
<F3> Federal National Mortgage
Association, 5.7%, 4/10/00 500,000 $499,287
-------------------------------------------------------------------------
FINANCE LESSORS (4.7%)
<F3> Merrill Lynch, 6.04%, 5/15/00 1,300,000 1,290,403
<F3> Preferred Receivable Funding,
6.06%, 5/10/00 1,300,000 1,291,466
Salomon Smith Barney,
5.97%, 4/19/00 600,000 598,209
-------------------------------------------------------------------------
TOTAL 3,180,078
-------------------------------------------------------------------------
OFFICE MACHINES (3.8%)
Xerox Corporation, 6.03%, 4/26/00 1,300,000 1,294,556
Xerox Corporation, 6.06%, 4/27/00 1,300,000 1,294,311
-------------------------------------------------------------------------
TOTAL 2,588,867
-------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(COST $6,268,232) 6,268,232
=========================================================================
TOTAL INVESTMENTS (99.4%)
(COST $54,165,005)<F4> 67,021,648
=========================================================================
OTHER ASSETS, LESS LIABILITIES (0.6%) 412,659
=========================================================================
TOTAL NET ASSETS (100.0%) $67,434,307
=========================================================================
ADR - American Depository Receipt
IO - Interest Only Security
PO - Principal Only Security
<F1> Non-Income Producing
144A after the name of a security represents a security exempt from
registration under Rule 144A of the Securities Act of 1933. These
securities may be resold as transactions exempt from registration,
normally to qualified institutional buyers.
<F2> Step Bond security that presently receives no coupon payments. At a
predetermined date the stated coupon rate becomes effective.
<F3> Securities segregated or earmarked as collateral for futures and delayed
settlements. Information regarding open futures contracts as of March 31,
2000 is summarized below:
Unrealized
Number of Expiration Appreciation/
Issuer Contracts Date (Depreciation)
- ---------------------------------------------------------------------------
S&P 500/R Stock Index
(Total notional value at
3/31/00, $1,389,425) 4 6/00 $116,875
US Treasury Bond
(Total notional value at
3/31/00, $287,656) 3 6/00 $(5,406)
---------
$111,469
=========
<F4> At March 31, 2000, the aggregate cost of securities for federal income tax
purposes was $54,225,676 and the net unrealized appreciation of investments
based on that cost was $12,795,972 which is comprised of $14,776,321
aggregate gross unrealized appreciation and $1,980,349 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
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: $39.3 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 last year has been a difficult period for bond holders, including high yield
investors. A series of interest rate increases by the Federal Reserve has put
downward pressure on most bond prices. For long-term Treasury securities,
however, the effect of generally higher interest rates has been offset by the
U.S. Treasury's announcement that it will repurchase outstanding long-term bonds
and indications that it may cease issuing new 30-year bonds. The result has been
a shortage of these very liquid instruments, which financial institutions
frequently use to hedge exposure to other bond positions. In addition, retail
investors have been moving money from bond funds into equity funds, especially
those that participate in the technology sector. These factors have combined to
hurt prices and severely limit liquidity in the market for corporate bonds,
especially high yield bonds, a category in which many issues have just a few
large holders.
In this environment for high yield bonds, the Fund's managers have adopted some
defensive strategies: liquidity has been increased by concentrating on larger
issues that are easier to trade; average quality has been increased to reduce
credit problems; highly cyclical issues have been avoided; and a very stringent
sell discipline has been adopted relative to marginal credit situations. In
addition, unlike many of last year's leading high yield funds, the portfolio has
been managed without active purchases of equities. While equities can be used by
aggressive managers to inflate short-term returns in funds such as this, we have
refrained from employing those strategies and have delivered a true fixed-income
product.
The High Yield Portfolio outperformed the Lehman High Yield Intermediate Index
over the last 12 months, mainly because of improved credit experience, strong
performance in the energy sector early in the year, and a strong showing in the
telecom and cable sectors. An overweighted position in energy bonds early in the
period benefited performance, as higher oil and gas prices produced better
earnings prospects; after taking some profits, the energy position is now at a
normal level. Recent investment activity has focused on the fast-growing
telecommunications industry and on environmental control, an industry with high
barriers to entry that is currently consolidating.
Investors should remember that, although the Fund's total return (defined as
income plus change in market value) has been rather low in recent periods,
interest payments have continued to provide steady cash flow for dollar
averaging. The Fund has an SEC 30-day yield of 10.63% for A shares and 10.50%
for B shares as of March 31, 2000. The average yield of invested assets in the
Fund was 12.22% at the end of the quarter, at a time when U.S. Treasury
securities of comparable maturities were yielding under 6%<F1> and the dividend
yield of the Dow Jones Industrial Average was roughly 1.5%. Perhaps the recent
volatility in the equity markets will increase investors' interest in the
potentially attractive long-term attributes that an intermediate risk, income-
generating asset such as high yield bonds can provide within diversified and
well-balanced portfolios.
<F1> U.S. government securities are guarnateed as to the timely payment of
principal and interest if held to maturity. Corporate bond prices depend
on current market interest rates as well as the underlying credit of the
corporation.
SECTOR ALLOCATION
3/31/00
Technology/Telecommunications 19%
Finance 14%
Other Industries 10%
Cable TV 10%
Broadcasting/Media 10%
Leisure 9%
Environmental Control/Utilities 7%
Consumer/Healthcare 7%
Basic Materials/Energy 6%
Real Estate/REITs 5%
Cash Equivalents 3%
<PAGE>
MARCH 31, 2000
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 10,863 11,252
TOTAL RETURN Average
Annual
One Since
For the periods ended March 31, 2000 Year Inception<F1>
- -----------------------------------------------------------------------
High Yield Bond Fund
(Class A - without initial sales charge) 0.12% 4.29%
- -----------------------------------------------------------------------
Lehman Brothers High Yield
Intermediate Market Index (1.72)% 4.01%
- -----------------------------------------------------------------------
<F1> Fund inception date is 3/31/97. Returns are annualized.
The total return performance for the High Yield Bond Fund is shown in comparison
with the Lehman Brothers High Yield Intermediate Market Index. The Lehman
Brothers index is an appropriate measure of portfolio performance since it has a
quality and maturity profile that resembles the High Yield Bond Fund. The index
cannot be invested in directly and does not include sales charges.
The Lehman Brothers High Yield Intermediate Market Index is made up of dollar
denominated, nonconvertible, SEC publicly registered fixed rate noninvestment-
grade issues. The bonds will have remaining maturities of between one and ten
years and have an outstanding par value of at least $100 million. Yankee and
global bonds (SEC registered) of issuers in G-7 countries are included. Original
issue zero coupon bonds and step-up coupon structures are also included;
however, the index excludes pay-in kind (PIK) bonds. Each bond must be rated Ba1
or lower by Moody's Investor Service. If a Moody's rating is unavailable, the
bonds must be rated BB+ or lower by Standard & Poor's, or by Fitch if an S&P
rating is unavailable. A few unrated bonds are included in the index; to be
eligible they must have previously held a high yield rating or have been
associated with a high yield issuer. The index is an unmanaged market value
weighted index and measures the income provided by, and the price changes of,
the underlying securities.
This graph assumes an initial investment of $10,000 made in Class A and Class B
shares, with all sales charges on March 31, 1997 (commencement of operations).
Returns shown include fee waivers and deductions for all Fund expenses. In the
absence of fee waivers, total return would be reduced. Past performance is not
predictive of future performance. Investment return and principal value will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. Returns on p. 3 reflect the maximum sales charge for Class
A and a 5% contingent deferred sales charge for Class B One Year and 3% for
Since Inception.
Bonds and other debt obligations are affected by changes in interest rates and
the creditworthiness of their issuers. High yield bonds generally have greater
price swings and higher default risks than investment-grade bonds.
SCHEDULE OF INVESTMENTS
Shares/Par Market Value
-------------------------------------------------------------------------
BONDS (82.8%)
BASIC MATERIALS (3.6%)
METALS & MINING (3.0%)
Glencore Nickel, LTD, 9.0%, 12/1/14 300,000 $252,000
Great Central Mines, Ltd.,
8.875%, 4/1/08 600,000 537,000
Murrin Murrin Holdings,
9.375%, 8/31/07 450,000 378,000
-------------------------------------------------------------------------
TOTAL 1,167,000
-------------------------------------------------------------------------
PAPER (0.6%)
APP China Group LTD,
14.0%, 3/15/10 (144A) 300,000 259,503
-------------------------------------------------------------------------
TOTAL BASIC MATERIALS 1,426,503
-------------------------------------------------------------------------
BROADCASTING/MEDIA (4.5%)
BROADCASTING (1.5%)
Spectrasite Holdings, Inc.,
10.75%, 3/15/10 (144A) 250,000 236,875
<F2> Spectrasite Holdings, Inc.,
12.875%, 3/15/10 (144A) 200,000 97,500
XM Satellite Radio, Inc.,
14.0%, 3/15/10 (144A) 250,000 237,503
-------------------------------------------------------------------------
TOTAL 571,878
-------------------------------------------------------------------------
PRINTING AND PUBLISHING (3.0%)
Mail-Well Inc., 5.0%, 11/1/02 500,000 401,875
Marvel Enterprises, Inc.,
12.0%, 6/15/09 600,000 510,000
WRC Media Inc., 12.75%,
11/15/09 (144A) 300,000 292,500
-------------------------------------------------------------------------
TOTAL 1,204,375
-------------------------------------------------------------------------
TOTAL BROADCASTING/MEDIA 1,776,253
-------------------------------------------------------------------------
CABLE TELEVISION (6.3%)
<F2> NTL, Inc., 9.75%, 4/1/08 1,350,000 853,875
NTL Incorporated, 11.5%, 10/1/08 250,000 256,250
<F2> Telewest PLC, 9.25%, 4/15/09 (144A) 300,000 174,000
<F2> United International Holdings,
10.75%, 2/15/08 850,000 586,500
United Pan-Europe Co.,
10.875%, 8/1/09 350,000 322,000
United Pan-Europe Co.,
11.25%, 2/1/10 (144A) 200,000 192,000
<F2> United Pan-Europe Co.,
13.75%, 2/1/10 (144A) 200,000 100,000
-------------------------------------------------------------------------
TOTAL CABLE TELEVISION 2,484,625
-------------------------------------------------------------------------
<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
-------------------------------------------------------------------------
CONSUMER RELATED (0.7%)
Boyds Collection Ltd., 9.0%, 5/15/08 250,000 $225,000
Global Health Sciences, Inc.,
11.0%, 5/1/08 100,000 47,000
-------------------------------------------------------------------------
TOTAL CONSUMER RELATED 272,000
-------------------------------------------------------------------------
ENERGY RELATED (2.1%)
OIL FIELD SERVICES (1.0%)
EOTT Energy Partners L.P.,
11.0%, 10/1/09 400,000 400,000
-------------------------------------------------------------------------
REFINING (1.1%)
PDV America, Inc., 7.875%, 8/1/03 450,000 423,208
-------------------------------------------------------------------------
TOTAL ENERGY RELATED 823,208
-------------------------------------------------------------------------
FINANCE (12.8%)
BANKS (2.0%)
BF Saul Real Estate, 9.75%, 4/1/08 350,000 303,625
Sovereign Bancorp Inc.,
10.5%, 11/15/06 500,000 494,375
-------------------------------------------------------------------------
TOTAL 798,000
-------------------------------------------------------------------------
FINANCE COMPANIES (9.7%)
Arcadia Financial Ltd.,
11.5%, 3/15/07 1,450,000 1,573,250
Labranche & Company,
12.0%, 3/1/07 (144A) 400,000 394,000
Metris Companies, Inc.,
10.125%, 7/15/06 800,000 756,000
PDV SA Finance, Ltd. 99-I,
9.75%, 2/15/10 (144A) 1,150,000 1,103,275
-------------------------------------------------------------------------
TOTAL 3,826,525
-------------------------------------------------------------------------
INSURANCE (1.1%)
Willis Corroon Corp., 9.0%, 2/1/09 550,000 407,000
-------------------------------------------------------------------------
TOTAL FINANCE 5,031,525
-------------------------------------------------------------------------
HEALTHCARE (5.5%)
Columbia/HCA Healthcare,
7.69%, 6/15/25 400,000 328,244
Healthsouth Co.,
3.25%, 4/1/03 (144A) 1,050,000 820,313
Tenet Healthcare, 6.0%, 12/1/05 150,000 120,750
Total Renal Care Holdings,
7.0%, 5/15/09 (144A) 1,550,000 899,000
-------------------------------------------------------------------------
TOTAL HEALTHCARE 2,168,307
-------------------------------------------------------------------------
LEISURE (8.6%)
GAMING (3.1%)
Circus Circus Enterprise,
7.625%, 7/15/13 450,000 355,500
Shares/Par Market Value
-------------------------------------------------------------------------
GAMING (CONTINUED)
Hollywood Casino,
13.0%, 8/1/06 (144A) 400,000 $424,000
International Game Technology,
8.375%, 5/15/09 150,000 136,500
Park Place Entertainment,
9.375%, 2/15/07 (144A) 300,000 293,679
-------------------------------------------------------------------------
TOTAL 1,209,679
-------------------------------------------------------------------------
HOTELS AND OTHER LODGING PLACES (4.4%)
HMH Properties, Inc., 7.875%, 8/1/08 300,000 252,750
HMH Properties, Inc., 8.45%, 12/1/08 200,000 173,750
Hilton Hotels Corporation,
5.0%, 5/15/06 600,000 456,000
ITT Corp., 7.375%, 11/15/15 600,000 498,739
Lodgian Financing Corp.,
12.25%, 7/15/09 400,000 352,000
-------------------------------------------------------------------------
TOTAL 1,733,239
-------------------------------------------------------------------------
LEISURE RELATED (1.1%)
Bally Total Fitness, 9.875%, 10/15/07 500,000 457,500
-------------------------------------------------------------------------
TOTAL LEISURE 3,400,418
-------------------------------------------------------------------------
OTHER INDUSTRIES (17.4%)
AUTO RELATED (1.5%)
Budget Group, Inc., 9.125%, 4/1/06 750,000 600,000
-------------------------------------------------------------------------
BUILDING AND CONSTRUCTION (0.7%)
United Rentals Inc., 8.8%, 8/15/08 300,000 262,500
-------------------------------------------------------------------------
ENVIRONMENTAL CONTROL (6.7%)
Allied Waste of North America,
7.875%, 1/1/09 600,000 477,000
Allied Waste of North America,
10.0%, 8/1/09 800,000 608,000
IT Group Inc., 11.25%, 4/1/09 450,000 425,250
Laidlaw Inc., 6.7%, 5/1/08 200,000 108,000
Laidlaw Inc., 7.65%, 5/15/06 200,000 106,000
USA Waste Services, 7.125%, 10/1/07 500,000 435,612
Waste Management, Inc., 4.0%, 2/1/02 550,000 481,937
-------------------------------------------------------------------------
TOTAL 2,641,799
-------------------------------------------------------------------------
OFFICE EQUIPMENT (1.6%)
Buhrmann U.S., Inc.,
12.25%, 11/1/09 (144A) 600,000 609,000
-------------------------------------------------------------------------
HOUSEHOLD FURNISHINGS, APPLIANCES (0.6%)
Home Interiors & Gifts,
10.125%, 6/1/08 300,000 240,000
-------------------------------------------------------------------------
<PAGE>
MARCH 31, 2000
HIGH YIELD BOND FUND
Shares/Par Market Value
-------------------------------------------------------------------------
REAL ESTATE (2.7%)
Crescent Real Estate, 7.0%, 9/15/02 300,000 $274,290
Crescent Real Estate, 7.5%, 9/15/07 950,000 801,601
-------------------------------------------------------------------------
TOTAL 1,075,891
-------------------------------------------------------------------------
REIT (2.7%)
Macerich Co., 7.25%, 12/15/02 (144A) 750,000 618,750
Security Capital U.S. Realty,
2.0%, 5/22/03 (144A) 600,000 456,000
-------------------------------------------------------------------------
TOTAL 1,074,750
-------------------------------------------------------------------------
TRANSPORT SERVICES (0.9%)
Vectura Group Inc., 10.25%, 6/30/08 400,000 340,000
-------------------------------------------------------------------------
TOTAL OTHER INDUSTRIES 6,843,940
-------------------------------------------------------------------------
SERVICES (2.3%)
Building One Services Co.,
10.5%, 5/1/09 450,000 414,000
<F2> Decisionone Holdings, 11.50%, 8/1/08 750,000 3,752
<F3> Decisionone Holdings, 9.75%, 8/1/07 325,000 813
Decisionone Holdings, 8.29%, 8/7/05 7,232 3,327
Decisionone Holdings, 7.98%, 8/7/05 39,770 18,294
Decisionone Holdings, 7.94%, 8/7/05 27,618 12,704
Integrated Electrical Services,
9.375%, 2/1/09 400,000 344,000
Service Corp. International,
7.7%, 4/15/09 200,000 98,000
-------------------------------------------------------------------------
TOTAL SERVICES 894,890
-------------------------------------------------------------------------
TECHNOLOGY (1.3%)
Amkor Technologies, Inc.,
9.25%, 5/1/06 300,000 289,500
<F2> Charter Communications,
9.92%, 4/1/11 200,000 111,000
<F2> Charter Communications,
11.75%, 1/15/10 (144A) 200,000 110,250
-------------------------------------------------------------------------
TOTAL TECHNOLOGY 510,750
-------------------------------------------------------------------------
TELECOMMUNICATIONS (15.0%)
Arch Communications, 12.75%, 7/1/07 300,000 244,500
Arch Escrow Corp, 13.75%, 4/15/08 850,000 714,000
<F2> Call-Net Enterprises, Inc.,
10.80%, 5/15/09 450,000 193,500
Call-Net Enterprises, Inc.,
9.375%, 5/15/09 350,000 262,500
Flag Telecom Holdings LTD,
11.625%, 3/30/10 (144A) 200,000 189,000
Global Crossing Holding,
9.5%, 11/15/09 (144A) 300,000 289,500
Shares/Par Market Value
-------------------------------------------------------------------------
TELECOMMUNICATIONS (CONTINUED)
<F2> GT Group Telecom Inc.,
13.25%, 2/1/10 (144A) 400,000 $220,004
<F2> Intermedia Communication,
12.5%, 5/15/06 150,000 139,500
KMC Telecommunication Holdings,
13.5%, 5/15/09 750,000 746,250
<F2> KMC Telecommunication Holdings,
12.5%, 2/15/08 200,000 104,000
Level 3 Communications,
11.0%, 3/15/08 (144A) 500,000 477,500
Metrocall, Inc., 11.0%, 9/15/08 250,000 206,250
Metrocall, Inc., 9.75%, 11/1/07 100,000 83,000
<F2> Nextel Communications, 9.95%, 2/15/08 300,000 202,500
Nextel Communications,
9.375%, 11/15/09 150,000 138,000
Nextlink Communications,
10.75%, 6/1/09 150,000 143,250
Northeast Optic Network,
12.75%, 8/15/08 300,000 312,000
PSINET Inc., 11.0%, 8/1/09 200,000 194,000
Viatel, Inc., 11.25%, 4/15/08 200,000 184,000
Williams Communications,
10.875%, 10/1/09 650,000 641,875
Winstar Communications,
12.5%, 4/15/08 (144A) 200,000 195,000
-------------------------------------------------------------------------
TOTAL TELECOMMUNICATIONS 5,880,129
-------------------------------------------------------------------------
TRANSPORTATION (2.1%)
North American Van Lines,
13.375%, 12/1/09 (144A) 450,000 427,500
Stena AB, 10.5%, 12/15/05 450,000 396,000
-------------------------------------------------------------------------
TOTAL TRANSPORTATION 823,500
-------------------------------------------------------------------------
UTILITIES (0.6%)
AES Corp., 8.5%, 11/1/07 250,000 218,750
-------------------------------------------------------------------------
TOTAL BONDS
(Cost $34,888,250) 32,554,798
=========================================================================
PREFERRED STOCK (13.1%)
BANKS (1.2%)
California Fed Pfd Capital 22,000 481,250
-------------------------------------------------------------------------
BROADCASTING/MEDIA (5.1%)
BROADCASTING (4.2%)
<F4> Crown Castle Intl. Corp. 3,720 368,280
<F4> Cumulus Media, Inc. 6,540 608,220
Sinclair Capital 7,000 665,000
-------------------------------------------------------------------------
TOTAL 1,641,500
-------------------------------------------------------------------------
<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
-------------------------------------------------------------------------
PRINTING AND PUBLISHING (0.9%)
Primedia, Inc. 4,000 $374,000
-------------------------------------------------------------------------
TOTAL BROADCASTING/MEDIA 2,015,500
-------------------------------------------------------------------------
CABLE TELEVISION (4.0%)
Adelphia Communications 3,000 322,500
<F4> CSC Holdings, Inc. 11,340 1,227,555
-------------------------------------------------------------------------
TOTAL CABLE TELEVISION 1,550,055
-------------------------------------------------------------------------
HEALTHCARE (0.6%)
Fresenius Medical, 7.875%, 2/1/08 250,000 220,000
-------------------------------------------------------------------------
LEISURE RELATED (0.3%)
<F4> Samsonite Corp. 1,530 122,400
-------------------------------------------------------------------------
TELECOMMUNICATIONS (1.9%)
<F4> Adelphia Business Solutions 4,610 456,390
<F4> Nextlink Communications 5,998 305,898
-------------------------------------------------------------------------
TOTAL TELECOMMUNICATIONS 762,288
-------------------------------------------------------------------------
TOTAL PREFERRED SECURITIES
(COST $5,350,576) 5,151,493
=========================================================================
COMMON STOCK AND WARRANTS (0.7%)
CABLE TELEVISION (0.0%)
<F1> 21st Century Telecom 3,000 7,500
-------------------------------------------------------------------------
FINANCE COMPANIES (0.0%)
Arcadia Financial Ltd. 1,000 1,000
-------------------------------------------------------------------------
LEISURE (0.0%)
<F1> Hedstrom Holdings, Inc. 67,324 673
<F1> Samsonite Corp. 1,250 3,750
-------------------------------------------------------------------------
TOTAL LEISURE 4,423
-------------------------------------------------------------------------
TELECOMMUNICATIONS (0.7%)
<F1> KMC Telecom Holdings, Inc. 1,750 5,250
<F1> McLeodUSA Incorporated 1,369 116,108
<F1> Viatel, Inc. 2,840 142,533
-------------------------------------------------------------------------
TOTAL TELECOMMUNICATIONS 263,891
-------------------------------------------------------------------------
TOTAL COMMON STOCK AND WARRANTS
(COST $311,399) 276,814
=========================================================================
Shares/Par Market Value
-------------------------------------------------------------------------
MONEY MARKET INVESTMENTS (5.1%)
SECURITY BROKER (2.5%)
Merrill Lynch, 6.06%, 5/15/00 1,000,000 $992,593
-------------------------------------------------------------------------
SHORT TERM BUSINESS CREDIT (2.6%)
CXC Incorporated, 6.25%, 4/3/00 1,000,000 999,653
-------------------------------------------------------------------------
TOTAL MONEY MARKET INVESTMENTS
(COST $1,992,246) 1,992,246
=========================================================================
TOTAL INVESTMENTS (101.7%)
(COST $42,542,471)<F5> 39,975,351
=========================================================================
OTHER ASSETS, LESS LIABILITIES (-1.7%) (656,428)
=========================================================================
TOTAL NET ASSETS (100.0%) $39,318,923
=========================================================================
<F1> Non-Income Producing
<F2> Step Bond security that presently receives no coupon payments. At a
predetermined date the stated coupon rate becomes effective.
<F3> Defaulted Security
<F4> PIK - Payment in Kind
144A after the name of a security represents a security exempt from
registration under Rule 144A of the Securities Act of 1933. These
securities may be resold as transactions exempt from registration, normally
to qualified institutional buyers.
<F5> At March 31, 2000, the aggregate cost of securities for federal income tax
purposes was $42,605,419 and the net unrealized depreciation of investments
based on that cost was $2,630,068 which is comprised of $862,202 aggregate
gross unrealized appreciation and $3,492,270 aggregate gross unrealized
depreciation.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
MARCH 31, 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: $34.4 million
- ------------------------------------------------------------------------------
The Municipal Bond Fund is managed with balanced focus on income, total return,
quality of securities and avoidance of federal income taxes. There are six major
classes of securities in the Fund: revenue bonds, general obligation bonds, pre-
refunded bonds, insured bonds, bonds with other credit support, and money market
investments, which are cash equivalents. For revenue bonds, interest and
principal is paid from revenue from a specific source which the bonds fund, such
as a tollway system or a municipal power agency. General obligation bonds are
secured by the general credit of the issuing municipality, which can generally
raise taxes as necessary to meet obligations. Insured bonds are guaranteed by
insurance companies such as Municipal Bond Individual Assurance Corporation
(MBIA) and 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. Bonds with other credit
support are backed by agencies such as GNMA, FNMA or have other guarantees that
support the issuer's ability to repay the debt.
Over the 12 months ended March 31, 2000, the Fund performed in line with its
major benchmark, the Lehman Brothers Municipal Bond Index. When prices of
municipal bonds are down, as they have been over the last year, the index tends
to perform better than most funds because it is less aggressively positioned
with respect to changes in interest rates and bond prices.
In recent months, as the spread between higher and lower quality bonds has
become wider, the Fund has benefited from holding very few bonds rated BBB or
lower; more than 70% of the bonds in the portfolio are rated AA or higher. The
Fund benefited also from its avoidance of market discount bonds, which
experience greater losses than other bonds when interest rates rise because of a
potential tax impact.
During 1998 and 1999, a very large supply of new municipal bonds kept prices
attractive, as states and municipalities took advantage of low interest rates to
issue new debt and refinance older higher-cost bonds. In the early months of
2000, the supply of new bonds is much lower than in the prior year, and supply
is expected to continue low for two reasons: there is less refunding of older
issues, and issuers have less need of new debt because the strong economy is
generating strong tax revenues.
The current stance with regard to interest rates is neutral, meaning that
investments are made with no strong expectation of either rising or falling
interest rates. Although short-term rates have been rising as the Federal
Reserve has raised the Federal Funds Rate, long-term rates have fallen, in part
because of the U.S. Treasury's announced plans to buy back Treasury bonds and
the potential for reduced Treasury bond issuance.
The market for U.S. Treasury bonds is therefore experiencing an unusual
phenomenon called an "inverted yield curve," which means that yields on bonds
with the longest maturities are lower than yields on short-term bonds. Normally,
yields on long-term bonds are higher than on short-term bonds because investors
require a premium to commit for a long time period. The municipal bond yield
curve has never been inverted, but it is currently flatter than normal, and it
is expected to continue to flatten. The portfolio is therefore positioned to
perform well in a flattening yield-curve environment.
<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
3/31/00
Insured Bonds 36%
Revenue Bonds 24%
Bonds with Other Credit Support 14%
Pre-refunded Bonds 10%
Cash Equivalents 10%
General Obligation Bonds 6%
<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 INDEX
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
9/31/99 11,064 11,420 11,503
3/31/00 11,313 11,639 11,339 11,747
TOTAL RETURN Average
Annual
One Since
For the periods ended March 31, 2000 Year Inception<F1>
- -------------------------------------------------------------------------
Municipal Bond Fund
(Class A - without initial sales charge) (0.10)% 5.91%
- -------------------------------------------------------------------------
Lehman Brothers Municipal
Bond Index (0.08)% 5.51%
- -------------------------------------------------------------------------
<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 March 31, 2000, the index
included 38,846 issues totaling over $706 billion in market value. The index
represents approximately 50% of the municipal bond market capitalization.
This graph assumes an initial investment of $10,000 made in Class A and Class B
shares, with all sales charges on March 31, 1997 (commencement of operations).
Returns shown include fee waivers and deductions for all Fund expenses. In the
absence of fee waivers, total return would be reduced. Past performance is not
predictive of future performance. Investment return and principal value will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. Returns on p. 3 reflect the maximum sales charge for Class
A and a 5% contingent deferred sales charge for Class B One Year and 3% for
Since Inception.
SCHEDULE OF INVESTMENTS
Shares/Par Market Value
-------------------------------------------------------------------------
MUNICIPAL BONDS (105.4%)
ARIZONA (0.6%)
Maricopa County, Arizona Pollution
Control Corp., Variable Coupon,
5/1/29 RB 200,000 $200,000
-------------------------------------------------------------------------
CALIFORNIA (2.8%)
California Housing Financing Agency,
5.75%, 2/1/29 RB, MBIA, AMT 1,000,000 975,180
-------------------------------------------------------------------------
COLORADO (3.3%)
Douglas County, Colorado School
District RE.1, 6.5%, 12/15/16
GO, PR, MBIA 1,050,000 1,131,543
-------------------------------------------------------------------------
DISTRICT OF COLUMBIA (3.5%)
District of Columbia,
5.1%, 6/1/03 GO, AMBAC 1,000,000 1,005,880
District of Columbia,
Variable Coupon, 6/1/03 GO 200,000 200,000
-------------------------------------------------------------------------
TOTAL 1,205,880
-------------------------------------------------------------------------
FLORIDA (2.5%)
Lee County, Florida Water & Sewer,
4.75%, 10/1/23 RB, AMBAC 1,000,000 866,770
-------------------------------------------------------------------------
GEORGIA (8.9%)
Atlanta, Georgia Airport,
5.5%, 1/1/26 RB, FGIC 1,000,000 961,370
Cartersville Development Authority
Water & Waste Facility,
7.4%, 11/1/10 RB, AMT 1,000,000 1,133,220
Columbia County, Georgia Water &
Sewer, 5.5%, 6/1/25 RB, FGIC 1,000,000 964,940
-------------------------------------------------------------------------
TOTAL 3,059,530
-------------------------------------------------------------------------
ILLINOIS (16.2%)
Chicago, Illinois Capital
Appreciation - City Colleges,
0.0%, 1/1/28 GO, FGIC 3,170,000 605,565
Chicago, Illinois O'Hare
International Airport,
5.7%, 1/1/08 RB, MBIA, AMT 1,000,000 1,022,610
Illinois Health FACS,
Variable Coupon, 8/1/26 RB, MBIA 900,000 900,000
Illinois State Sales Tax,
6.375%, 6/15/17 RB 1,450,000 1,524,052
Metropolitan Fair & Exposition
Illinois, 5.0%, 6/1/15 RB, BIGI 1,000,000 938,660
<PAGE>
MARCH 31, 2000
MUNICIPAL BOND FUND
Shares/Par Market Value
-------------------------------------------------------------------------
ILLINOIS (CONTINUED)
Insurance purchase by MBIA
Metropolitan Pier & Exposition,
Dedicated State Tax,
0.0%, 12/15/12 RB, MBIA 1,140,000 $570,741
-------------------------------------------------------------------------
TOTAL 5,561,628
-------------------------------------------------------------------------
INDIANA (0.3%)
<F1> Indiana State Toll Financial Authority,
6.0%, 7/1/15 RB 100,000 100,102
-------------------------------------------------------------------------
KENTUCKY (9.3%)
Kentucky Higher Education Student
Loan Corp., 5.15%, 6/1/02
RB, GTD STD LNS 1,130,000 1,138,554
Louisville & Jefferson County,
Kentucky Regional Airport
Authority, 6.5%, 7/1/17
RB, MBIA, AMT 1,000,000 1,064,250
Russell County, Kentucky School
District Finance Corp.,
5.6%, 3/1/19 RB 465,000 465,093
Russell County, Kentucky School
District Finance Corp.,
5.6%, 3/1/18 RB 520,000 523,255
-------------------------------------------------------------------------
TOTAL 3,191,152
-------------------------------------------------------------------------
MAINE (3.0%)
Regional Waste System Inc.,
Maine Solid Waste Res Recovery,
6.25%, 7/2/11 1,000,000 1,045,460
-------------------------------------------------------------------------
NEBRASKA (2.9%)
Nebraska Investment Financial
Authority, Single Family, Housing,
6.25%, 3/1/21 RB, GNMA,
FNMA, FHLMC, AMT 990,000 1,000,177
-------------------------------------------------------------------------
NEW YORK (17.3%)
Metropolitan Transportation Authority,
5.625%, 7/1/25 RB, MBIA 1,000,000 973,620
New York City Municipal Water
Finance Authority,
5.75%, 6/15/29 RB 1,000,000 979,810
New York, New York Series I,
6.0%, 4/15/09 GO 1,000,000 1,050,280
New York St Dormitory Authority,
5.125%, 2/15/08 RB 1,000,000 976,540
New York, New York,
Variable Coupon, 10/1/21 GO 200,000 200,000
Shares/Par Market Value
-------------------------------------------------------------------------
NEW YORK (CONTINUED)
New York, New York,
Variable Coupon, 8/15/18 GO 300,000 $300,000
TSASC, Inc., New York,
6.0%, 7/15/19 RB 1,500,000 1,475,460
-------------------------------------------------------------------------
TOTAL 5,955,710
-------------------------------------------------------------------------
NORTH CAROLINA (0.3%)
North Carolina Eastern Municipal
Power Agency System,
4.0%, 1/1/18 RB, PR 145,000 118,467
-------------------------------------------------------------------------
OHIO (7.1%)
Ohio Housing Financial Agency,
6.2%, 9/1/14 RB, GNMA 910,000 931,485
Ohio State Air Quality Development
Authority, Variable Coupon,
10/1/27 RB, AMBAC 1,500,000 1,500,000
-------------------------------------------------------------------------
TOTAL 2,431,485
-------------------------------------------------------------------------
PENNSYLVANIA (11.2%)
Allegheny County, Pennsylvania
County Hospital, 7.5%, 8/1/13 RB 1,690,000 1,570,585
Lehigh County, Pennsylvania
General Purpose,
9.5%, 11/1/16 RB, PR 1,000,000 1,092,670
Pennsylvania Higher Education
Authority, Variable Coupon, 9/1/26
RB, AMBAC, AMT 1,000,000 1,182,500
-------------------------------------------------------------------------
TOTAL 3,845,755
-------------------------------------------------------------------------
RHODE ISLAND (3.0%)
Providence, Rhode Island Public
Building Authority,
5.5%, 12/15/12 RB, AMBAC 1,000,000 1,023,770
-------------------------------------------------------------------------
TEXAS (10.3%)
Brazos, Texas, Higher Education
Authority, 5.5%, 6/1/02
RB, GTD STD LNS, AMT 965,000 976,995
Harris County, Texas Health Facility,
Daily Floating Rate,
2/15/22 RB, MBIA 200,000 200,000
Odessa Texas Junior College District,
8.125%, 12/1/18 RB, PR 1,100,000 1,239,496
Round Rock, Texas Independent
School District, 6.5%, 8/1/10
GO, PSF, GTD STD LNS 1,000,000 1,106,620
-------------------------------------------------------------------------
TOTAL 3,523,111
-------------------------------------------------------------------------
<PAGE>
M A S O N S T R E E T F U N D S
MUNICIPAL BOND FUND
Shares/Par Market Value
-------------------------------------------------------------------------
WASHINGTON (2.9%)
Port Seattle, Washington Passenger
Facility, 5.0 %, 12/1/05
RB, AMBAC, AMT 1,000,000 $994,820
-------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS 36,230,540
=========================================================================
TOTAL INVESTMENTS (105.4%)
(COST $36,342,173)<F2> 36,230,540
=========================================================================
OTHER ASSETS, LESS LIABILITIES (-5.4%) (1,866,150)
=========================================================================
TOTAL NET ASSETS (100.0%) $34,364,390
=========================================================================
<F1> Securities segregated or earmarked as collateral for futures and delayed
settlements. There were no open futures contracts as of March 31, 2000.
<F2> At March 31, 2000, the aggregate cost of securities for federal income
tax purposes was $36,402,790 and the net unrealized depreciation of
investments based on that cost was $172,250 which is comprised of
$411,420 aggregate gross unrealized appreciation and $583,670 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)
PSF (Permanent School Fund, State of Texas)
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
MARCH 31, 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: $34.7 million
- -----------------------------------------------------------------------------
The Select Bond Fund invests in high-quality debt securities, primarily
government bonds, corporate bonds and mortgage-backed securities. Exposure to
market sectors is adjusted as yield spreads change among the various classes of
securities. Duration and maturity are altered with moderate adjustments in
recognition or anticipation of interest rate changes.
The recent market environment has been challenging for bond funds in general
because investors have shunned the modest but relatively secure returns offered
by bonds in favor of the excitement and uncertain but potentially high returns
of technology stocks. The result has been a net outflow of cash from most bond
funds. In this difficult environment, the Select Bond Fund has performed well
over the last year, outperforming the indices with which it is compared.
Throughout 1999, the Fund was managed with a defensive posture toward interest
rates, predicting correctly that rates were likely to rise. A neutral position
with regard to interest rates at the end of October locked in these gains
through March 31, as rates on long-term bonds began to fall in January.
The Fund's focus in recent months has been on quality and liquidity, with
holdings concentrated in well-known names with ratings of AA or better. To take
advantage of the relatively wide spreads between corporate and U.S. government
bonds, some government securities have recently been replaced with high-quality
corporate issues. During the first quarter of 2000 the position in mortgages was
reduced because mortgages appeared somewhat rich relative to corporate bonds.
PERCENTAGE HOLDINGS
3/31/00
Corporate Bonds 33%
Mortgage-Backed and Asset-Backed Securities 32%
U.S. Agencies 20%
Money Market Investments, Net of Other Assets 8%
U.S. Treasury Securities 7%
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 11,467 12,167
TOTAL RETURN Average
Annual
One Since
For the periods ended March 31, 2000 Year Inception<F1>
- --------------------------------------------------------------------
Select Bond Fund
(Class A - without initial sales charge) 2.26% 6.24%
- --------------------------------------------------------------------
Merrill Lynch
Domestic Master Index 1.95% 6.75%
- --------------------------------------------------------------------
<F1> Fund inception date is 3/31/97. Returns are annualized.
Since the Fund invests broadly in U.S. government, mortgage and corporate bonds,
the graph depicts an appropriate comparison to the Merrill Lynch Domestic Master
Index. The index is an unmanaged market value weighted index comprised of U.S.
government, mortgage and investment-grade corporate bonds. The index measures
the income provided by, and the price changes of, the underlying securities. The
index cannot be invested in directly and does not include sales charges.
This graph assumes an initial investment of $10,000 made in Class A and Class B
shares, with all sales charges on March 31, 1997 (commencement of operations).
Returns shown include fee waivers and deductions for all Fund expenses. In the
absence of fee waivers, total return would be reduced. Past performance is not
predictive of future performance. Investment return and principal value will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. Returns on p. 3 reflect the maximum sales charge for Class
A and a 5% contingent deferred sales charge for Class B One Year and 3% for
Since Inception.
SCHEDULE OF INVESTMENTS
Shares/Par Market Value
-------------------------------------------------------------------------
BONDS (92.0%)
CORPORATE BONDS (33.1%)
AUTOMOTIVE (3.2%)
Ford Motor Credit Company,
6.3%, 7/16/02 300,000 $300,534
Ford Motor Credit Company,
7.375%, 10/28/09 300,000 293,490
General Motors Acceptance
Corporation, 7.75%, 1/19/10 500,000 500,370
-------------------------------------------------------------------------
TOTAL 1,094,394
-------------------------------------------------------------------------
BANK HOLDING COMPANIES (1.4%)
Nationsbank Lease Pass Through
Trust, Series 1997-A,
7.442%, 1/10/11 479,347 470,699
-------------------------------------------------------------------------
CONSUMER PRODUCTS (3.6%)
Johnson & Johnson, 6.625%, 9/1/09 700,000 676,640
Procter & Gamble Company,
6.875%, 9/15/09 600,000 584,186
-------------------------------------------------------------------------
TOTAL 1,260,826
-------------------------------------------------------------------------
ELECTRIC SERVICES (6.1%)
Comed Transitional Funding Trust,
Series 1998-1, Class A7,
5.74%, 12/25/10 750,000 668,370
Peco Energy Transition Trust,
Series 1999-A, Class A7,
6.13%, 3/1/09 800,000 736,256
Scottish Power PLC, 5.65%, 11/1/06 550,000 495,513
South Carolina Electric & Gas,
6.125%, 3/1/09 250,000 227,985
-------------------------------------------------------------------------
TOTAL 2,128,124
-------------------------------------------------------------------------
FINANCE (2.2%)
General Electric Capital Corporation,
8.75%, 5/21/07 700,000 755,265
-------------------------------------------------------------------------
FOOD AND BEVERAGE (2.2%)
Anheuser-Busch Companies, Inc.,
7.5%, 3/15/12 750,000 752,708
-------------------------------------------------------------------------
GENERAL MERCHANDISE STORES (3.8%)
The Home Depot, Inc., 6.5%, 9/15/04 950,000 933,327
Wal-Mart Stores, Inc., 6.55%, 8/10/04 250,000 244,998
Wal-Mart Stores, Inc., 6.875%, 8/10/09 150,000 146,025
-------------------------------------------------------------------------
TOTAL 1,324,350
-------------------------------------------------------------------------
INTEGRATED OIL COMPANIES (1.4%)
Chevron Corporation,
6.625%, 10/1/04 500,000 489,649
-------------------------------------------------------------------------
<PAGE>
MARCH 31, 2000
SELECT BOND FUND
Shares/Par Market Value
-------------------------------------------------------------------------
MANUFACTURING (1.3%)
Honeywell International, Inc.,
7.5%, 3/1/10 455,000 $459,911
-------------------------------------------------------------------------
PUBLISHING (2.3%)
Times Mirror Company,
7.45%, 10/15/09 800,000 787,450
-------------------------------------------------------------------------
TELECOMMUNICATIONS (2.7%)
New England Telephone and Telegraph,
5.875%, 4/15/09 500,000 448,217
Vodafone AirTouch PLC, Series 144A,
7.75%, 2/15/10 500,000 503,956
-------------------------------------------------------------------------
TOTAL 952,173
-------------------------------------------------------------------------
TEXTILES (0.5%)
<F1> Polysindo International Finance,
11.375%, 6/15/06 800,000 168,000
-------------------------------------------------------------------------
TRANSPORTATION SERVICES (2.4%)
United Parcel Service, 8.375%, 4/1/20 750,000 828,104
-------------------------------------------------------------------------
TOTAL CORPORATE BONDS 11,471,653
-------------------------------------------------------------------------
GOVERNMENT BONDS
(DOMESTIC AND FOREIGN)
AND AGENCY BONDS (26.7%)
FEDERAL GOVERNMENT AND AGENCIES (26.7%)
Aid-Israel, 0.0%, 11/1/24 1,500,000 322,454
Federal Home Loan Bank,
5.54%, 1/8/09 300,000 265,174
Federal National Mortgage
Association, 5.97%, 10/1/08 390,543 359,857
Federal National Mortgage
Association, 6.22%, 2/1/06 478,381 451,949
Federal National Mortgage
Association, 6.265%, 10/1/08 246,073 230,502
Federal National Mortgage
Association, 6.39%, 4/1/08 484,944 458,594
Federal National Mortgage
Association, 6.96%, 10/1/07 293,410 286,197
Federal National Mortgage
Association, 7.36%, 4/1/11 468,985 469,576
Federal National Mortgage
Association, 7.5%, 10/1/27 901,309 888,914
Federal National Mortgage
Association, 10.0%, 10/1/17 24,966 26,670
Federal National Mortgage
Association, 11.0%, 12/1/12 13,919 15,189
Federal National Mortgage
Association, 11.0%, 9/1/17 201,930 224,144
Shares/Par Market Value
-------------------------------------------------------------------------
FEDERAL GOVERNMENT AND AGENCIES (CONTINUED)
Federal National Mortgage
Association, 11.0%, 12/1/17 60,252 $66,257
Federal National Mortgage
Association, 11.0%, 2/1/18 77,496 85,194
Federal National Mortgage
Association, 11.5%, 4/1/18 105,879 118,099
Federal National Mortgage
Association, 12.0%, 9/1/12 196,838 220,697
Federal National Mortgage
Association, 12.0%, 12/1/12 39,543 44,315
Federal National Mortgage
Association, 12.0%, 9/1/17 61,367 69,305
Federal National Mortgage
Association, 12.0%, 10/1/17 64,752 73,117
Federal National Mortgage
Association, 12.0%, 12/1/17 61,130 69,155
Federal National Mortgage
Association, 12.0%, 2/1/18 70,386 79,570
Federal National Mortgage
Association, 12.25%, 1/1/18 33,448 37,869
Federal National Mortgage
Association, 12.5%, 4/1/18 47,328 53,940
Federal National Mortgage
Association, 13.0%, 11/1/12 29,448 33,574
Federal National Mortgage
Association, 13.0%, 11/1/17 120,502 139,295
Federal National Mortgage
Association, 13.0%, 12/1/17 33,558 38,756
Federal National Mortgage
Association, 13.0%, 2/1/18 80,348 92,819
Federal National Mortgage
Association, 14.0%, 12/1/17 22,778 27,057
Government National Mortgage
Association, 7.5%, 6/15/28 308,959 306,391
Government National Mortgage
Association, 8.0%, 12/15/26 329,170 333,422
Government National Mortgage
Association, 8.0%, 7/15/27 197,694 199,998
Government National Mortgage
Association, 11.0%, 1/15/18 319,414 349,769
US Treasury, 5.875%, 11/15/04 705,000 692,222
US Treasury, 6.0%, 8/15/09 523,000 516,299
U.S. Treasury Inflation Index Bond,
3.875%, 4/15/29 1,368,635 1,373,901
Vendee Mortgage Trust, Series 1998-3,
Class E, 6.5%, 3/15/29 250,000 221,203
-------------------------------------------------------------------------
TOTAL 9,241,444
-------------------------------------------------------------------------
TOTAL GOVERNMENT AND AGENCY BONDS 9,241,444
-------------------------------------------------------------------------
<PAGE>
M A S O N S T R E E T F U N D S
SELECT BOND FUND
Shares/Par Market Value
-------------------------------------------------------------------------
MORTGAGE-BACKED AND ASSET-BACKED SECURITIES (32.2%)
COMMERCIAL MORTGAGES (21.0%)
Asset Securitization Corporation,
Series 1996-MD6, Class CS1, IO,
1.29356%, 11/13/26 12,461,226 $331,344
Asset Securitization Corporation,
Series 1997-D5, Class A3,
6.61906%, 2/14/41 450,000 415,840
Chase Commercial Mortgage Securities
Corp., Series 1997-2, Class A2,
6.6%, 11/19/07 500,000 473,828
Chase Commercial Mortgage Securities
Corp., Series 1997-2, Class B,
6.6%, 11/19/07 500,000 470,034
Commercial Mortgage Acceptance
Corporation, Series 1997-ML1,
Class B, 6.48918%, 12/15/07 500,000 475,035
Credit Suisse First Boston Mortgage
Securities Corp., Series 1997-C1,
Class A2, 7.26%, 6/20/07 237,843 229,179
Credit Suisse First Boston Mortgage
Securities Corp., Series 1997-C1,
Class B, 7.28%, 6/20/07 250,000 239,117
Criimi Mae Commercial Mortgage
Trust, Series 1998-C1, Class A1,
7.0%, 11/2/06 500,000 449,880
Criimi Mae Commercial Mortgage
Trust, Series 1998-C1, Class B,
7.0%, 11/2/11 600,000 462,000
DLJ Commercial Mortgage
Corporation, Series 1998-CF1,
Class S, IO, .37894%, 1/15/18 19,866,316 694,924
DLJ Mortgage Acceptance
Corporation, Series 1997-CF2,
Class S, IO, .27459%, 10/15/17 29,227,235 607,378
DLJ Mortgage Acceptance
Corporation, Series 1994-MF11,
Class A1, 8.1%, 6/18/04 252,547 257,880
DLJ Mortgage Acceptance
Corporation, Series 1994-MF11,
Class A2, 8.1%, 6/18/04 350,000 356,696
LB Mortgage Trust, Series 1991-2,
Class A3, 8.3962%, 1/20/17 464,227 479,500
Midland Realty Acceptance
Corporation, Series 1996-C2,
Class AEC, IO, 1.3534%, 1/25/29 8,951,904 488,237
Mortgage Capital Funding, Inc.,
Series 1997-MC1, Class A3,
7.288%, 3/20/07 400,000 391,488
Shares/Par Market Value
-------------------------------------------------------------------------
COMMERCIAL MORTGAGES (CONTINUED)
Nomura Asset Securities Corporation,
Series 1998-D6, Class A2,
6.5488%, 3/17/28 200,000 $185,381
RMF Commercial Mortgage
Pass-Through, Series 1997-1,
Class F, 7.471%, 1/15/19 400,000 275,212
-------------------------------------------------------------------------
TOTAL 7,282,953
-------------------------------------------------------------------------
CREDIT CARD ASSET BACKED (0.4%)
Iroquois Trust, Series 1997-2, Class A,
6.752%, 6/25/07 156,015 154,187
-------------------------------------------------------------------------
FRANCHISE LOAN RECEIVABLES (4.2%)
Enterprise Mortgage Acceptance
Company, Series 1998-1, Class IO,
1.37036%, 1/15/23 13,319,103 866,408
Enterprise Mortgage Acceptance
Company, Series 1998-1, Class A2,
6.38%, 4/15/07 400,000 374,236
Global Franchise Trust, Series 1998-1,
Class A1, 6.349%, 4/10/04 221,774 215,779
-------------------------------------------------------------------------
TOTAL 1,456,423
-------------------------------------------------------------------------
HOME EQUITY LOAN (0.9%)
Amresco Residential Securities,
Series 1998-2, Class A2,
6.245%, 4/25/22 300,000 297,585
-------------------------------------------------------------------------
MANUFACTURED HOUSING (1.4%)
Mid-State Trust, Series 6, Class A3,
7.54%, 7/1/35 524,530 501,262
-------------------------------------------------------------------------
OTHER ASSET BACKED (3.2%)
FMAC Loan Receivables Trust,
Series 1998-A, Class A1,
6.2%, 9/15/20 219,469 212,988
Harley-Davidson Eaglemark
Motorcycle Trust, Series 1998-2,
Class A2, 5.87%, 4/15/04 300,000 294,735
Heilig-Meyers Master Trust,
Series 1998-1A, Class A,
6.125%, 1/20/07 500,000 478,245
Newcourt Equipment Receivables,
Series 1997-A, Class B,
6.764%, 9/20/04 122,221 119,925
------------------------------------------------------------------------
TOTAL 1,105,893
-------------------------------------------------------------------------
<PAGE>
MARCH 31, 2000
SELECT BOND FUND
Shares/Par Market Value
-------------------------------------------------------------------------
RESIDENTIAL MORTGAGES (1.1%)
Blackrock Capital Finance L.P.,
Series 1997-R3, Class B3,
7.25%, 11/25/28 479,608 $225,416
Blackrock Capital Finance L.P.,
Series 1997-R1, Class B3,
7.75%, 3/25/37 320,818 150,786
-------------------------------------------------------------------------
TOTAL 376,202
-------------------------------------------------------------------------
TOTAL MORTGAGE-BACKED
AND ASSET-BACKED SECURITIES 11,174,505
-------------------------------------------------------------------------
TOTAL BONDS
(COST $34,356,074) 31,887,602
=========================================================================
MONEY MARKET INVESTMENTS (7.2%)
FEDERAL GOVERNMENT AND AGENCIES (1.5%)
<F2> Federal Home Loan Bank,
5.68%, 4/20/00 500,000 498,501
-------------------------------------------------------------------------
PERSONAL CREDIT INSTITUTIONS (3.7%)
Preferred Funding, 6.06%, 5/10/00 1,300,000 1,291,466
-------------------------------------------------------------------------
SHORT TERM BUSINESS CREDIT (2.0%)
CXC Incorporated, 6.25%, 4/3/00 700,000 699,757
-------------------------------------------------------------------------
TOTAL MONEY MARKET INVESTMENTS
(COST $2,489,724) 2,489,724
=========================================================================
TOTAL INVESTMENTS (99.2%)
(COST $36,845,798)<F3> 34,377,326
=========================================================================
OTHER ASSETS, LESS LIABILITIES (0.8%) 288,648
=========================================================================
TOTAL NET ASSETS (100.0%) $34,665,974
=========================================================================
IO - Interest Only Security
<F1> Defaulted Security
144A after the name of a security represents a security exempt from
registration under Rule 144A of the Securities Act of 1933. These
securities may be resold as transactions exempt from registration, normally
to qualified institutional buyers.
<F2> Securities segregated or earmarked as collateral for futures and delayed
settlements. Information regarding open futures contracts as of March 31,
2000 is summarized below:
Number of Expiration Unrealized
Issuers Contracts Date Appreciation
- -------------------------------------------------------------------------
90 Day Euro Futures
(Total notional value at
3/31/00, $2,802,600) 12 6/00 $2,250
<F3> At March 31, 2000, the aggregate cost of securities for federal income
tax purposes was $36,875,087 and the net unrealized depreciation of
investments based on that cost was $2,497,761 which is comprised of
$122,714 aggregate gross unrealized appreciation and $2,620,475
aggregate gross unrealized depreciation.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
<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
March 31, 2000
ASSETS
- --------------------------------------------------------------
Common Stocks (cost $9,066,032) $11,671,342
Money Market Investments (cost $799,457) 799,457
- --------------------------------------------------------------
12,470,799
- --------------------------------------------------------------
Cash 402,082
Due from Sale of Securities 118,365
Due from Sale of Fund Shares 32,593
Due from Investment Advisor 7,347
Dividends and Interest Receivable 886
- --------------------------------------------------------------
TOTAL ASSETS 13,032,072
- --------------------------------------------------------------
LIABILITIES
Due on Purchase of Securities 965,495
Other Accrued Liabilities 18,104
Due on Redemption of Fund Shares 17,228
Accrued Registration Fees 2,099
Accrued Distribution Expense 1,961
Accrued Administrative Fees 1,059
- --------------------------------------------------------------
TOTAL LIABILITIES 1,005,946
- --------------------------------------------------------------
NET ASSETS $12,026,126
==============================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 683,846 shares outstanding) $7,426,619
Undistributed Accumulated Net
Realized Gain on Investments 1,994,197
Net Unrealized Appreciation of
Investment Securities 2,605,310
- --------------------------------------------------------------
NET ASSETS FOR 683,846
SHARES OUTSTANDING $12,026,126
==============================================================
Per Share of Class A (Based on 576,139
Shares Issued and Outstanding):
OFFERING PRICE $18.47
==============================================================
NET ASSET VALUE AND REDEMPTION PRICE $17.59
==============================================================
Per Share of Class B (Based on 107,707
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $17.57
==============================================================
STATEMENT OF OPERATIONS
For the Period July 12, 1999<F1> through March 31, 2000
- --------------------------------------------------------------
INVESTMENT INCOME
Income
Interest $22,904
Dividends 4,042
- --------------------------------------------------------------
TOTAL INCOME 26,946
- --------------------------------------------------------------
Expenses
Management Fees 47,936
Registration Fees 33,937
Transfer Agent Fees 30,396
Audit Fees 15,061
Shareholder Servicing Fees 14,099
Shareholder Reporting Expenses 11,723
Distribution Fees:
Class A 4,927
Class B 5,341
Custody Fees 9,281
Professional Fees 6,534
Administrative Fees 5,640
Directors Fees 4,955
Other Expenses 1,018
- --------------------------------------------------------------
TOTAL EXPENSES 190,848
- --------------------------------------------------------------
Less:
Custodian Fees Paid Indirectly (1,710)
Expenses Reimbursed by Affiliates (107,266)
- --------------------------------------------------------------
TOTAL NET EXPENSES 81,872
- --------------------------------------------------------------
NET INVESTMENT LOSS (54,926)
- --------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Net Realized Gain on:
Investment Securities 2,245,316
Futures Contracts 42,048
- --------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS
FOR THE PERIOD 2,287,364
- --------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
OF INVESTMENTS FOR THE PERIOD 2,605,310
- --------------------------------------------------------------
NET GAIN ON INVESTMENTS 4,892,674
- --------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $4,837,748
==============================================================
<F1> Fund commenced operations on July 12, 1999.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
MARCH 31, 2000
SMALL CAP GROWTH STOCK FUND
STATEMENT OF CHANGES IN NET ASSETS
For the Period
July 12, 1999<F1>
through
March 31, 2000
- -------------------------------------------------------------------------
INCREASE IN NET ASSETS
Operations
Net Investment Loss $(54,926)
Net Realized Gain on Investments 2,287,364
Net Change in Unrealized Appreciation of
Investments for the Period 2,605,310
- ----------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations 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 626,286 Shares 6,897,912
Proceeds from Shares Issued on Reinvestment of
Distributions Paid (16,684 shares) 236,250
Payments for 67,331 Shares Redeemed (1,007,191)
- ----------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class A Fund Share Transactions (575,639 shares) 6,126,971
- ----------------------------------------------------------------------
Class B
Proceeds from Sale of 106,798 Shares 1,320,550
Proceeds from Shares Issued on Reinvestment of
Distributions Paid (2,131 shares) 30,159
Payments for 1,722 Shares Redeemed (30,140)
- ----------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class B Fund Share Transactions (107,207 shares) 1,320,569
- ----------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 12,016,126
NET ASSETS
Beginning of Period 10,000
- ----------------------------------------------------------------------
END OF PERIOD $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
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A CLASS B
-------- --------
For the Period For the Period
July 12, 1999<F1> July 12, 1999<F1>
through through
(For a share outstanding throughout the period) March 31, 2000 March 31, 2000
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $10.00 $10.00
Income from Investment Operations:
Net Investment Income (Loss) (0.08)<F4> (0.10)<F4>
Net Realized and Unrealized Gains (Losses) on Investments 8.12 8.09
- --------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 8.04 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 $17.59 $17.57
==========================================================================================================================
TOTAL RETURN<F2> 81.52%<F5> 80.95%<F5>
==========================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $10,133,996 $1,892,130
==========================================================================================================================
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS 3.31%<F3> 3.89%<F3>
==========================================================================================================================
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS 1.40%<F3> 2.05%<F3>
==========================================================================================================================
RATIO OF NET INVESTMENT LOSS TO AVERAGE NET ASSETS (0.92)%<F3> (1.57)%<F3>
==========================================================================================================================
PORTFOLIO TURNOVER RATE 89.96% 89.96%
==========================================================================================================================
<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 7/12/99 - 3/31/00. Returns are not
annualized.
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
MARCH 31, 2000
AGGRESSIVE GROWTH STOCK FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2000
- --------------------------------------------------------------
ASSETS
Common Stocks (cost $51,978,075) $88,493,917
Money Market Investments (cost $4,678,435) 4,678,435
- --------------------------------------------------------------
93,172,352
- --------------------------------------------------------------
Cash 230,989
Due from Sale of Securities 4,548,772
Due from Sale of Fund Shares 85,999
Unamortized Organizational Costs 8,255
Dividends and Interest Receivable 3,653
- --------------------------------------------------------------
TOTAL ASSETS 98,050,020
- --------------------------------------------------------------
LIABILITIES
Due on Purchase of Securities 1,665,004
Other Accrued Liabilities 56,347
Due to Investment Advisor 33,839
Due on Redemption of Fund Shares 28,520
Accrued Distribution Expense 8,631
Accrued Administrative Fees 7,940
Accrued Shareholder Servicing Fees 534
- --------------------------------------------------------------
TOTAL LIABILITIES 1,800,815
- --------------------------------------------------------------
NET ASSETS $96,249,205
==============================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 4,150,631 shares outstanding) $49,644,742
Undistributed Accumulated Net
Realized Gain on Investments 10,088,621
Net Unrealized Appreciation of
Investment Securities 36,515,842
- --------------------------------------------------------------
NET ASSETS FOR 4,150,631
SHARES OUTSTANDING $96,249,205
==============================================================
Per Share of Class A (Based on 3,651,913
Shares Issued and Outstanding):
OFFERING PRICE $24.39
==============================================================
NET ASSET VALUE AND REDEMPTION PRICE $23.23
==============================================================
Per Share of Class B (Based on 498,718
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $22.86
==============================================================
STATEMENT OF OPERATIONS
For the Year Ended March 31, 2000
- --------------------------------------------------------------
INVESTMENT INCOME
Income
Interest $275,854
Dividends 47,910
- --------------------------------------------------------------
TOTAL INCOME 323,764
- --------------------------------------------------------------
Expenses
Management Fees 504,716
Shareholder Servicing Fees 168,239
Distribution Fees:
Class A 59,896
Class B 55,123
Transfer Agent Fees 90,891
Administrative Fees 67,295
Other Expenses 59,716
Custody Fees 24,556
Registration Fees 24,054
- --------------------------------------------------------------
TOTAL EXPENSES 1,054,486
- --------------------------------------------------------------
Less:
Custodian Fees Paid Indirectly (3,538)
Other Expenses Reimbursed by Affiliates (132,250)
- --------------------------------------------------------------
TOTAL NET EXPENSES 918,698
- --------------------------------------------------------------
NET INVESTMENT LOSS (594,934)
- --------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Net Realized Gain (Loss) on Investments:
Investment Securities 16,621,258
Futures Contracts (35,489)
- --------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS
FOR THE PERIOD 16,585,769
- --------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
OF INVESTMENTS FOR THE PERIOD 27,872,951
- --------------------------------------------------------------
NET GAIN ON INVESTMENTS 44,458,720
- --------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $43,863,786
==============================================================
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
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the For the
Year Ended Year Ended
March 31, 2000 March 31, 1999
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations
Net Investment Loss $(594,934) $(372,860)
Net Realized Gain on Investments 16,585,769 2,546,341
Net Change in Unrealized Appreciation (Depreciation) of Investments for the Period 27,872,951 (3,477,719)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations 43,863,786 (1,304,238)
- ---------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders from Net Realized Gain on Investments (6,860,994) (700,361)
Distributions to Class B Shareholders from Net Realized Gain on Investments (860,509) (69,963)
- ---------------------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Distributions to Shareholders (7,721,503) (770,324)
- ---------------------------------------------------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 258,390 and 416,459 Shares 4,740,641 5,382,644
Proceeds from Shares Issued on Reinvestment of Distributions Paid
(350,616 and 50,009 shares) 6,850,878 699,202
Payments for 149,669 and 145,127 Shares Redeemed (2,807,737) (1,845,647)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class A Fund Share Transactions (459,337 and 321,341 shares) 8,783,782 4,236,199
- ---------------------------------------------------------------------------------------------------------------------------
Class B
Proceeds from Sale of 150,124 and 241,417 Shares 2,665,164 3,182,223
Proceeds from Shares Issued on Reinvestment of Distributions Paid
(43,399 and 5,009 shares) 835,907 69,331
Payments for 40,600 and 30,203 Shares Redeemed (713,616) (387,831)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class B Fund Share Transactions (152,923 and 216,223 shares) 2,787,455 2,863,723
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 47,713,520 5,025,360
NET ASSETS
Beginning of Period 48,535,685 43,510,325
- ---------------------------------------------------------------------------------------------------------------------------
END OF PERIOD $96,249,205 $48,535,685
===========================================================================================================================
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
MARCH 31, 2000
AGGRESSIVE GROWTH STOCK FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A CLASS A CLASS A CLASS B CLASS B CLASS B
-------- ------- ------- -------- -------- --------
For the For the For the For the For the For the
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
(For a share March 31, March 31, March 31, March 31, March 31, March 31,
outstanding throughout the year) 2000 1999 1998 2000 1999 1998
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $13.73 $14.50 $10.00 $13.58 $14.43 $10.00
Income from Investment Operations:
Net Investment Loss (0.21)<F3> (0.11) (0.12)<F1> (0.27)<F3> (0.19) (0.21)
Net Realized and Unrealized Gains
(Losses) on Investments 11.82 (0.43) 5.18 11.59 (0.43) 5.18
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 11.61 (0.54) 5.06 11.32 (0.62) 4.97
- --------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net
Investment Income _ _ _ _ _ _
Distributions from Realized Gains
on Investments (2.11) (0.23) (0.56) (2.04) (0.23) (0.54)
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (2.11) (0.23) (0.56) (2.04) (0.23) (0.54)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $23.23 $13.73 $14.50 $22.86 $13.58 $14.43
================================================================================================================================
TOTAL RETURN,<F2> 87.53% (3.78)% 51.57% 86.13% (4.35)% 50.59%
================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $84,847,655 $43,840,289 $41,640,193 $11,401,550 $4,695,396 $1,870,132
================================================================================================================================
RATIO OF GROSS EXPENSES TO
AVERAGE NET ASSETS 1.50% 1.62% 1.64% 2.15% 2.27% 2.29%
================================================================================================================================
RATIO OF NET EXPENSES TO
AVERAGE NET ASSETS 1.30% 1.30% 1.30% 1.95% 1.95% 1.95%
================================================================================================================================
RATIO OF NET INVESTMENT LOSS TO
AVERAGE NET ASSETS (0.82)% (0.80)% (0.96)% (1.47)% (1.45)% (1.61)%
================================================================================================================================
PORTFOLIO TURNOVER RATE 92.54% 84.46% 64.91% 92.54% 84.46% 64.91%
================================================================================================================================
<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> Calculated prior to adjustment for certain book and tax income differences.
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
M A S O N S T R E E T F U N D S
INTERNATIONAL EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2000
- --------------------------------------------------------------
ASSETS
Common Stocks (cost $33,059,201) $34,798,651
Money Market Investments (cost $3,683,139) 3,683,139
- --------------------------------------------------------------
38,481,790
- --------------------------------------------------------------
Cash 94,397
Dividends Receivable 99,049
Due from Sale of Fund Shares 36,413
Unamortized Organizational Costs 8,301
- --------------------------------------------------------------
TOTAL ASSETS 38,719,950
- --------------------------------------------------------------
LIABILITIES
Due on Redemption of Fund Shares 236,492
Other Accrued Liabilities 25,438
Due to Investment Advisor 16,276
Accrued Shareholder Servicing Fees 5,172
Accrued Administrative Fees 4,248
Accrued Distribution Expense 3,063
- --------------------------------------------------------------
TOTAL LIABILITIES 290,689
- --------------------------------------------------------------
NET ASSETS $38,429,261
==============================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 3,667,179 shares outstanding) $36,326,180
Overdistributed Net Investment Income (8,186)
Undistributed Accumulated Net
Realized Gain on Investments 372,783
Net Unrealized Appreciation (Depreciation) of:
Investment Securities 1,739,450
Foreign Currency Transactions (966)
- --------------------------------------------------------------
NET ASSETS FOR 3,667,179
SHARES OUTSTANDING $38,429,261
==============================================================
Per Share of Class A (Based on
3,276,728 Shares Issued and Outstanding):
OFFERING PRICE $11.01
==============================================================
NET ASSET VALUE AND REDEMPTION PRICE $10.49
==============================================================
Per Share of Class B (Based on 390,451
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $10.40
==============================================================
STATEMENT OF OPERATIONS
For the Year Ended March 31, 2000
- --------------------------------------------------------------
INVESTMENT INCOME
Income
Dividends (less foreign dividend tax of $80,942) $847,479
Interest 113,387
- --------------------------------------------------------------
TOTAL INCOME 960,866
- --------------------------------------------------------------
Expenses
Management Fees 300,821
Shareholder Servicing Fees 88,477
Transfer Agent Fees 67,902
Other Expenses 60,057
Distribution Fees:
Class A 31,861
Class B 26,119
Custody Fees 45,402
Administrative Fees 35,391
Registration Fees 23,878
- --------------------------------------------------------------
TOTAL EXPENSES 679,908
- --------------------------------------------------------------
Less:
Expenses Reimbursed by Affiliates (73,969)
- --------------------------------------------------------------
TOTAL NET EXPENSES 605,939
- --------------------------------------------------------------
NET INVESTMENT INCOME 354,927
- --------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCIES
Net Realized Gain (Loss) on:
Investment Securities 1,584,628
Foreign Currency Transactions (28,405)
- --------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS
FOR THE PERIOD 1,556,223
- --------------------------------------------------------------
Net Change in Unrealized Appreciation
(Depreciation) of:
Investment Securities 3,471,760
Foreign Currency Transactions (2,770)
- --------------------------------------------------------------
NET CHANGE IN UNREALIZED
APPRECIATION FOR THE PERIOD 3,468,990
- --------------------------------------------------------------
NET GAIN ON INVESTMENTS 5,025,213
- --------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $5,380,140
==============================================================
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
MARCH 31, 2000
INTERNATIONAL EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the For the
Year Ended Year Ended
March 31, 2000 March 31, 1999
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations
Net Investment Income $354,927 $524,302
Net Realized Gain (Loss) on Investments 1,556,223 (165,221)
Net Change in Unrealized Appreciation (Depreciation) of Investments and
Foreign Currency Transactions for the Period 3,468,990 (3,151,666)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations 5,380,140 (2,792,585)
- ---------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders from Net Investment Income (420,036) (488,292)
Distributions to Class A Shareholders from Net Realized Gain on Investments (21,353) (1,103,595)
Distributions to Class B Shareholders from Net Investment Income (29,161) (34,474)
Distributions to Class B Shareholders from Net Realized Gain on Investments (2,499) (101,379)
- ---------------------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Distributions to Shareholders (473,049) (1,727,740)
- ---------------------------------------------------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 303,113 and 268,605 Shares 3,079,273 2,576,879
Proceeds from Shares Issued on Reinvestment of Distributions Paid
(41,838 and 177,719 shares) 440,989 1,588,807
Payments for 209,060 and 88,775 Shares Redeemed (2,144,063) (830,681)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class A Fund Share Transactions (135,891 and 357,549 shares) 1,376,199 3,335,005
- ---------------------------------------------------------------------------------------------------------------------------
Class B
Proceeds from Sale of 136,345 and 173,803 Shares 1,354,747 1,643,961
Proceeds from Shares Issued on Reinvestment of Distributions Paid
(2,900 and 15,136 shares) 30,366 134,559
Payments for 49,943 and 24,956 Shares Redeemed (500,816) (228,283)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class B Fund Share Transactions (89,302 and 163,983 shares) 884,297 1,550,237
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 7,167,587 364,917
NET ASSETS
Beginning of Period 31,261,674 30,896,757
- ---------------------------------------------------------------------------------------------------------------------------
END OF PERIOD (INCLUDES (OVER) UNDISTRIBUTED NET INVESTMENT INCOME OF
$(8,186) AND $72,169, RESPECTIVELY) $38,429,261 $31,261,674
===========================================================================================================================
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
M A S O N S T R E E T F U N D S
INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A CLASS A CLASS A CLASS B CLASS B CLASS B
-------- -------- -------- -------- -------- --------
For the For the For the For the For the For the
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
(For a share March 31, March 31, March 31, March 31, March 31, March 31,
outstanding throughout the year) 2000 1999 1998 2000 1999 1998
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $9.09 $10.58 $10.00 $9.03 $10.53 $10.00
Income from Investment Operations:
Net Investment Income 0.15<F3> 0.19<F3> 0.24<F1> 0.07<F3> 0.14<F3> 0.10<F1>
Net Realized and Unrealized Gains
(Losses) on Investments 1.39 (1.13) 0.56 1.39 (1.13) 0.63
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 1.54 (0.94) 0.80 1.46 (0.99) 0.73
- --------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net
Investment Income (0.13) (0.17) (0.22) (0.08) (0.13) (0.20)
Distributions from Realized Gains
on Investments (0.01) (0.38) 0.00 (0.01) (0.38) 0.00
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (0.14) (0.55) (0.22) (0.09) (0.51) (0.20)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $10.49 $9.09 $10.58 $10.40 $9.03 $10.53
================================================================================================================================
TOTAL RETURN<F2> 16.91% (8.85)% 8.19% 16.10% (9.36)% 7.49%
================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $34,368,631 $28,543,601 $29,451,833 $4,060,630 $2,718,073 $1,444,924
================================================================================================================================
RATIO OF GROSS EXPENSES TO
AVERAGE NET ASSETS 1.86% 1.91% 2.13% 2.51% 2.56% 2.78%
================================================================================================================================
RATIO OF NET EXPENSES TO
AVERAGE NET ASSETS 1.65% 1.65% 1.65% 2.30% 2.30% 2.30%
================================================================================================================================
RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS 1.07% 2.34% 2.34% 0.42% 1.69% 1.69%
================================================================================================================================
PORTFOLIO TURNOVER RATE 23.99% 70.31% 10.07% 23.99% 70.31% 10.07%
================================================================================================================================
<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> Calculated prior to adjustment for certain book and tax income differences.
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
MARCH 31, 2000
INDEX 400 STOCK FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2000
- --------------------------------------------------------------
ASSETS
Common Stocks (cost $29,182,113) $32,466,509
Money Market Investments (cost $699,313) 699,313
- --------------------------------------------------------------
33,165,822
- --------------------------------------------------------------
Cash 41,481
Due from Sale of Securities 2,301,123
Due from Sale of Fund Shares 66,788
Futures Variation Margin 31,725
Dividends and Interest Receivable 26,135
Due from Investment Advisor 10,595
- --------------------------------------------------------------
TOTAL ASSETS 35,643,669
- --------------------------------------------------------------
LIABILITIES
Other Accrued Liabilities 19,605
Accrued Registration Fees 7,571
Accrued Distribution Fees 4,356
Accrued Shareholder Servicing Fees 4,274
Accrued Administrative Fees 2,863
Due on Redemption of Fund Shares 647
- --------------------------------------------------------------
TOTAL LIABILITIES 39,316
- --------------------------------------------------------------
NET ASSETS $35,604,353
==============================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 3,002,685 shares outstanding) $29,976,789
Undistributed Net Investment Income 29,538
Undistributed Accumulated Net
Realized Gain on Investments 2,290,705
Net Unrealized Appreciation of:
Investment Securities 3,284,396
Index Futures Contracts 22,925
- --------------------------------------------------------------
NET ASSETS FOR 3,002,685
SHARES OUTSTANDING $35,604,353
==============================================================
Per Share of Class A (Based on 2,698,508
Shares Issued and Outstanding):
OFFERING PRICE $12.45
==============================================================
NET ASSET VALUE AND REDEMPTION PRICE $11.86
==============================================================
Per Share of Class B (Based on 304,177
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $11.84
==============================================================
STATEMENT OF OPERATIONS
For the Period July 12, 1999<F1> through March 31, 2000
- --------------------------------------------------------------
INVESTMENT INCOME
Income
Dividends $220,453
Interest 83,345
- --------------------------------------------------------------
TOTAL INCOME 303,798
- --------------------------------------------------------------
Expenses
Management Fees 80,979
Shareholder Servicing Fees 50,612
Custody Fees 40,021
Registration Fees 39,409
Distribution Fees:
Class A 18,634
Class B 12,079
Transfer Agent Fees 29,544
Administrative Fees 20,245
Audit Fees 15,061
Shareholder Reporting Expense 11,717
Other Expenses 11,672
Directors Fees 4,910
Professional Fees 1,615
- --------------------------------------------------------------
TOTAL EXPENSES 336,498
- --------------------------------------------------------------
Less:
Custodian Fees Paid Indirectly (2,098)
Expenses Reimbursed by Affiliates (133,704)
- --------------------------------------------------------------
TOTAL NET EXPENSES 200,696
- --------------------------------------------------------------
NET INVESTMENT INCOME 103,102
- --------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Net Realized Gain on:
Investment Securities 2,067,062
Index Futures Contracts 390,156
- --------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS
FOR THE PERIOD 2,457,218
- --------------------------------------------------------------
Net Change in Unrealized Appreciation of:
Investment Securities 3,284,396
Index Futures Contracts 22,925
- --------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
OF INVESTMENTS FOR THE PERIOD 3,307,321
- --------------------------------------------------------------
NET GAIN ON INVESTMENTS 5,764,539
- --------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $5,867,641
==============================================================
<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
INDEX 400 STOCK FUND
STATEMENT OF CHANGES IN NET ASSETS
For the Period
July 12, 1999<F1>
through
March 31, 2000
- ---------------------------------------------------------------------------
INCREASE IN NET ASSETS
Operations
Net Investment Income $103,102
Net Realized Gain on Investments 2,457,218
Net Change in Unrealized Appreciation of Investments
for the Period 3,307,321
- ---------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations 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 2,703,436 Shares 27,085,881
Proceeds from Shares Issued on Reinvestment of
Distributions Paid (26,393 shares) 272,899
Payments for 31,821 Shares Redeemed (331,447)
- ---------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class A Fund Share Transactions (2,698,008 shares) 27,027,333
- ---------------------------------------------------------------------------
Class B
Proceeds from Sale of 304,402 Shares 3,001,735
Proceeds from Shares Issued on Reinvestment of
Distributions Paid (2,142 shares) 22,125
Payments for 2,867 Shares Redeemed (29,486)
- ---------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class B Fund Share Transactions (303,677 shares) 2,994,374
- ---------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 35,594,353
NET ASSETS
Beginning of Period 10,000
- ---------------------------------------------------------------------------
END OF PERIOD (INCLUDES UNDISTRIBUTED NET INVESTMENT
INCOME OF $29,538) $35,604,353
===========================================================================
<F1> Fund commenced operations on July 12, 1999.
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
MARCH 31, 2000
INDEX 400 STOCK FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A CLASS B
-------- --------
For the Period For the Period
July 12, 1999<F1> July 12, 1999<F1>
through through
(For a share outstanding throughout the period) March 31, 2000 March 31, 2000
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $10.00 $10.00
Income from Investment Operations:
Net Investment Income 0.04<F4> 0.00<F4>
Net Realized and Unrealized Gains on Investments 1.93 1.93
- -----------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 1.97 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 $11.86 $11.84
=======================================================================================================================
TOTAL RETURN<F2> 19.81%<F5> 19.38%<F5>
=======================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $32,001,909 $3,602,444
=======================================================================================================================
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS 1.61%<F3> 2.24%<F3>
=======================================================================================================================
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS 0.95%<F3> 1.60%<F3>
=======================================================================================================================
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS 0.55%<F3> (0.10)%<F3>
=======================================================================================================================
PORTFOLIO TURNOVER RATE 35.40% 35.40%
=======================================================================================================================
<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 7/12/99 - 3/31/00. Returns are not
annualized.
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
M A S O N S T R E E T F U N D S
GROWTH STOCK FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2000
- --------------------------------------------------------------
ASSETS
Common Stocks (cost $37,682,753) $63,519,562
Money Market Investments (cost $8,461,533) 8,461,533
- --------------------------------------------------------------
71,981,095
- --------------------------------------------------------------
Due from Sale of Securities 122,438
Due from Sale of Fund Shares 53,259
Futures Variation Margin 44,000
Dividends and Interest Receivable 35,302
Unamortized Organizational Costs 8,255
- --------------------------------------------------------------
TOTAL ASSETS 72,244,349
- --------------------------------------------------------------
LIABILITIES
Due on Purchase of Securities 276,352
Other Accrued Liabilities 31,811
Due to Investment Advisor 21,297
Due on Redemption of Fund Shares 10,935
Accrued Administrative Fees 5,502
Accrued Distribution Expense 5,481
- --------------------------------------------------------------
TOTAL LIABILITIES 351,378
- --------------------------------------------------------------
NET ASSETS $71,892,971
==============================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 3,784,692 shares outstanding) $44,338,327
Undistributed Accumulated Net
Realized Gain on Investments 1,250,335
Net Unrealized Appreciation of:
Investment Securities 25,836,809
Index Futures Contracts 467,500
- --------------------------------------------------------------
NET ASSETS FOR 3,784,692
SHARES OUTSTANDING $71,892,971
==============================================================
Per Share of Class A (Based on
3,449,669 Shares Issued and Outstanding):
OFFERING PRICE $19.96
==============================================================
NET ASSET VALUE AND REDEMPTION PRICE $19.01
==============================================================
Per Share of Class B (Based on 335,023
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $18.81
==============================================================
STATEMENT OF OPERATIONS
For the Year Ended March 31, 2000
- --------------------------------------------------------------
INVESTMENT INCOME
Income
Dividends (less foreign dividend tax of $13,909) $476,283
Interest 471,892
- --------------------------------------------------------------
TOTAL INCOME 948,175
- --------------------------------------------------------------
Expenses
Management Fees 450,344
Shareholder Servicing Fees 150,115
Distribution Fees:
Class A 55,167
Class B 36,304
Transfer Agent Fees 77,602
Administrative Fees 60,046
Other Expenses 25,013
Registration Fees 23,655
Custody Fees 23,415
Shareholder Reporting Expenses 18,286
Directors Fees 6,333
Professional Fees 6,114
- --------------------------------------------------------------
TOTAL EXPENSES 932,394
- --------------------------------------------------------------
Less:
Custodian Fees Paid Indirectly (3,865)
Expenses Reimbursed by Affiliates (120,815)
- --------------------------------------------------------------
TOTAL NET EXPENSES 807,714
- --------------------------------------------------------------
NET INVESTMENT INCOME 140,461
- --------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Net Realized Gain on:
Investment Securities 3,567,071
Futures Contracts 169,396
- --------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS
FOR THE PERIOD 3,736,467
- --------------------------------------------------------------
Net Change in Unrealized Appreciation of:
Investment Securities 10,876,261
Index Futures Contracts 583,637
- --------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
OF INVESTMENTS FOR THE PERIOD 11,459,898
- --------------------------------------------------------------
NET GAIN ON INVESTMENTS 15,196,365
- --------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $15,336,826
==============================================================
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
MARCH 31, 2000
GROWTH STOCK FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the For the
Year Ended Year Ended
March 31, 2000 March 31, 1999
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations
Net Investment Income $140,461 $171,762
Net Realized Gain on Investments 3,736,467 2,507,887
Net Change in Unrealized Appreciation of Investments for the Period 11,459,898 5,203,817
- ------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations 15,336,826 7,883,466
- ------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders from Net Investment Income (186,205) (164,011)
Distributions to Class A Shareholders from Net Realized Gain on Investments (3,555,397) (2,145,824)
Distributions to Class B Shareholders from Net Investment Income _ (1,201)
Distributions to Class B Shareholders from Net Realized Gain on Investments (334,657) (114,146)
- ------------------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Distributions to Shareholders (4,076,259) (2,425,182)
- ------------------------------------------------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 221,522 and 259,874 Shares 3,795,699 3,785,341
Proceeds from Shares Issued on Reinvestment of Distributions Paid
(211,312 and 151,179 shares) 3,739,765 2,303,970
Payments for 76,337 and 29,649 Shares Redeemed (1,330,281) (440,425)
- ------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class A Fund Share Transactions (356,497 and 381,404 shares) 6,205,183 5,648,886
- ------------------------------------------------------------------------------------------------------------------------
Class B
Proceeds from Sale of 151,030 and 169,083 Shares 2,569,344 2,461,603
Proceeds from Shares Issued on Reinvestment of Distributions Paid
(18,774 and 7,480 shares) 329,283 113,195
Payments for 58,378 and 10,793 Shares Redeemed (1,032,711) (156,222)
- ------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class B Fund Share Transactions (111,426 and 165,770 shares) 1,865,916 2,418,576
- ------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 19,331,666 13,525,746
NET ASSETS
Beginning of Period 52,561,305 39,035,559
- ------------------------------------------------------------------------------------------------------------------------
END OF PERIOD (INCLUDES UNDISTRIBUTED NET INVESTMENT INCOME OF
$0 AND $31,661, RESPECTIVELY) $71,892,971 $52,561,305
========================================================================================================================
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
M A S O N S T R E E T F U N D S
GROWTH STOCK FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A CLASS A CLASS A CLASS B CLASS B CLASS B
-------- -------- -------- -------- -------- --------
For the For the For the For the For the For the
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
(For a share March 31, March 31, March 31, March 31, March 31, March 31,
outstanding throughout the year) 2000 1999 1998 2000 1999 1998
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $15.86 $14.10 $10.00 $15.73 $14.03 $10.00
Income from Investment Operations:
Net Investment Income (Loss) 0.05<F3> 0.04 0.04<F1> (0.05)<F3> (0.01) (0.05)<F1>
Net Realized and Unrealized Gains
on Investments 4.27 2.52 4.41 4.22 2.46 4.41
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 4.32 2.56 4.45 4.17 2.45 4.36
- --------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net
Investment Income (0.06) (0.06) (0.05) _ (0.01) (0.03)
Distributions from Realized Gains
on Investments (1.11) (0.74) (0.30) (1.09) (0.74) (0.30)
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (1.17) (0.80) (0.35) (1.09) (0.75) (0.33)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $19.01 $15.86 $14.10 $18.81 $15.73 $14.03
================================================================================================================================
TOTAL RETURN<F2> 27.78% 18.36% 45.08% 27.02% 17.66% 44.12%
================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $65,591,773 $49,045,112 $38,224,386 $6,301,198 $3,516,193 $811,173
================================================================================================================================
RATIO OF GROSS EXPENSES TO
AVERAGE NET ASSETS 1.50% 1.57% 1.63% 2.15% 2.22% 2.28%
================================================================================================================================
RATIO OF NET EXPENSES TO
AVERAGE NET ASSETS 1.30% 1.30% 1.30% 1.95% 1.95% 1.95%
================================================================================================================================
RATIO OF NET INVESTMENT INCOME (LOSS)
TO AVERAGE NET ASSETS 0.28% 0.42% 0.29% (0.37)% (0.23)% (0.36)%
================================================================================================================================
PORTFOLIO TURNOVER RATE 35.34% 32.00% 37.52% 35.34% 32.00% 37.52%
================================================================================================================================
<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> Calculated prior to adjustment for certain book and tax income differences.
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
MARCH 31, 2000
GROWTH AND INCOME STOCK FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2000
- --------------------------------------------------------------
ASSETS
Common Stocks (cost $49,250,054) $56,834,736
Money Market Investments (cost $799,722) 799,722
- --------------------------------------------------------------
57,634,458
- --------------------------------------------------------------
Cash 30,301
Due from Sale of Securities 368,580
Dividends and Interest Receivable 54,013
Due from Sale of Fund Shares 11,377
Unamortized Organizational Costs 8,255
- --------------------------------------------------------------
TOTAL ASSETS 58,106,984
- --------------------------------------------------------------
LIABILITIES
Due on Purchase of Securities 289,971
Other Accrued Liabilities 34,675
Due to Investment Advisor 12,554
Due on Redemption of Fund Shares 6,238
Accrued Shareholder Servicing Fees 6,100
Accrued Distribution Fees 4,607
Accrued Administrative Fees 4,250
- --------------------------------------------------------------
TOTAL LIABILITIES 358,395
- --------------------------------------------------------------
NET ASSETS $57,748,589
==============================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 4,645,126 shares outstanding) $50,026,691
Undistributed Net Investment Income 73,487
Undistributed Accumulated Net
Realized Gain on Investments 63,729
Net Unrealized Appreciation of
Investment Securities 7,584,682
- --------------------------------------------------------------
NET ASSETS FOR 4,645,126
SHARES OUTSTANDING $57,748,589
==============================================================
Per Share of Class A (Based on
4,136,014 Shares Issued and Outstanding):
OFFERING PRICE $13.07
==============================================================
NET ASSET VALUE AND REDEMPTION PRICE $12.45
==============================================================
Per Share of Class B (Based on 509,112
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $12.25
==============================================================
STATEMENT OF OPERATIONS
For the Year Ended March 31, 2000
- --------------------------------------------------------------
INVESTMENT INCOME
Income
Dividends (less foreign dividend tax of $5,848) $697,539
Interest 39,243
- --------------------------------------------------------------
TOTAL INCOME 736,782
- --------------------------------------------------------------
Expenses
Management Fees 343,687
Shareholder Servicing Fees 132,187
Distribution Fees:
Class A 47,417
Class B 40,680
Transfer Agent Fees 69,892
Administrative Fees 52,875
Custody Fees 31,027
Registration Fees 24,562
Audit Fees 18,111
Shareholder Reporting Expense 17,033
Other Expenses 7,387
Directors Fees 6,333
Professional Fees 6,113
- --------------------------------------------------------------
TOTAL EXPENSES 797,304
- --------------------------------------------------------------
Less:
Custodian Fees Paid Indirectly (3,970)
Expenses Reimbursed by Affiliates (127,951)
- --------------------------------------------------------------
TOTAL NET EXPENSES 665,383
- --------------------------------------------------------------
NET INVESTMENT INCOME 71,399
- --------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS
NET REALIZED GAIN ON INVESTMENTS
FOR THE PERIOD 769,017
- --------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
OF INVESTMENTS FOR THE PERIOD 4,331,609
- --------------------------------------------------------------
NET GAIN ON INVESTMENTS 5,100,626
- --------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $5,172,025
==============================================================
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 CHANGES IN NET ASSETS
<TABLE>
For the For the
Year Ended Year Ended
March 31, 2000 March 31, 1999
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations
Net Investment Income $71,399 $65,444
Net Realized Gain on Investments 769,017 6,155,592
Net Change in Unrealized Appreciation (Depreciation) of Investments for the Period 4,331,609 (1,313,276)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations 5,172,025 4,907,760
- ---------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders from Net Investment Income _ (117,640)
Distributions to Class A Shareholders from Net Realized Gain on Investments (2,599,897) (5,828,791)
Distributions to Class B Shareholders from Net Investment Income _ (1,006)
Distributions to Class B Shareholders from Net Realized Gain on Investments (330,856) (483,341)
- ---------------------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Distributions to Shareholders (2,930,753) (6,430,778)
- ---------------------------------------------------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 228,242 and 330,443 Shares 2,750,360 4,055,376
Proceeds from Shares Issued on Reinvestment of Distributions Paid
(218,636 and 507,846 shares) 2,595,196 5,942,527
Payments for 126,717 and 60,751 Shares Redeemed (1,526,675) (731,924)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class A Fund Share Transactions (320,161 and 777,538 shares) 3,818,881 9,265,979
- ---------------------------------------------------------------------------------------------------------------------------
Class B
Proceeds from Sale of 204,927 and 237,668 Shares 2,446,475 2,839,000
Proceeds from Shares Issued on Reinvestment of Distributions Paid
(26,703 and 38,833 shares) 312,157 450,878
Payments for 86,703 and 35,912 Shares Redeemed (1,004,414) (428,239)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class B Fund Share Transactions (144,927 and 240,589 shares) 1,754,218 2,861,639
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 7,814,371 10,604,600
NET ASSETS
Beginning of Period 49,934,218 39,329,618
- ---------------------------------------------------------------------------------------------------------------------------
END OF PERIOD (INCLUDES UNDISTRIBUTED NET INVESTMENT INCOME OF
$73,487 AND $0, RESPECTIVELY) $57,748,589 $49,934,218
===========================================================================================================================
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
MARCH 31, 2000
GROWTH AND INCOME STOCK FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A CLASS A CLASS A CLASS B CLASS B CLASS B
-------- -------- -------- -------- -------- -------
For the For the For the For the For the For the
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
March 31, March 31, March 31, March 31, March 31, March 31,
(For a share outstanding throughout the year) 2000 1999 1998 2000 1999 1998
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $11.96 $12.44 $10.00 $11.85 $12.37 $10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss) 0.02<F3> 0.01 0.04<F1> (0.04)<F3> (0.03) (0.03)<F1>
Net Realized and Unrealized Gains
(Losses) on Investments 1.14 1.33 3.90 1.11 1.28 3.88
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 1.16 1.34 3.94 1.07 1.25 3.85
- --------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net
Investment Income _ (0.04) (0.06) _ (0.00) (0.04)
Distributions from Realized Gains
on Investments (0.67) (1.78) (1.44) (0.67) (1.77) (1.44)
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (0.67) (1.82) (1.50) (0.67) (1.77) (1.48)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $12.45 $11.96 $12.44 $12.25 $11.85 $12.37
===============================================================================================================================
TOTAL RETURN<F2> 9.95% 11.09% 41.90% 9.28% 10.41% 40.96%
===============================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $51,513,192 $45,619,789 $37,800,412 $6,235,397 $4,314,429 $1,529,206
===============================================================================================================================
RATIO OF GROSS EXPENSES TO
AVERAGE NET ASSETS 1.44% 1.52% 1.57% 2.10% 2.17% 2.22%
===============================================================================================================================
RATIO OF NET EXPENSES TO
AVERAGE NET ASSETS 1.20% 1.20% 1.20% 1.85% 1.85% 1.85%
===============================================================================================================================
RATIO OF NET INVESTMENT INCOME (LOSS)
TO AVERAGE NET ASSETS 0.19% 0.20% 0.37% (0.46)% (0.45)% (0.28)%
===============================================================================================================================
PORTFOLIO TURNOVER RATE 89.66% 156.92% 140.29% 89.66% 156.92% 140.29%
===============================================================================================================================
<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> Calculated prior to adjustment for certain book and tax income differences.
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
M A S O N S T R E E T F U N D S
INDEX 500 STOCK FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2000
- --------------------------------------------------------------
ASSETS
Common Stocks (cost $65,881,007) $90,563,699
Money Market Investments (cost $6,966,088) 6,966,088
- --------------------------------------------------------------
97,529,787
- --------------------------------------------------------------
Due from Sale of Fund Shares 309,713
Dividends and Interest Receivable 105,026
Futures Variation Margin 49,500
Due from Investment Advisor 44,001
Unamortized Organizational Costs 8,255
- --------------------------------------------------------------
TOTAL ASSETS 98,046,282
- --------------------------------------------------------------
LIABILITIES
Other Accrued Liabilities 49,413
Due on Redemption of Fund Shares 42,534
Accrued Shareholder Servicing Fees 12,631
Accrued Distribution Expense 13,988
Accrued Administrative Fees 8,710
Due on Purchase of Securities 1,286
- --------------------------------------------------------------
TOTAL LIABILITIES 128,562
- --------------------------------------------------------------
NET ASSETS $97,917,720
==============================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 5,106,832 shares outstanding) $72,451,814
Undistributed Net Investment Income 112,491
Undistributed Accumulated Net
Realized Gain on Investments 303,238
Net Unrealized Appreciation of:
Investment Securities 24,682,692
Index Futures Contracts 367,485
- --------------------------------------------------------------
NET ASSETS FOR 5,106,832
SHARES OUTSTANDING $97,917,720
==============================================================
Per Share of Class A (Based on
3,445,265 Shares Issued and Outstanding):
OFFERING PRICE $20.21
=============================================================
NET ASSET VALUE AND REDEMPTION PRICE $19.25
=============================================================
Per Share of Class B (Based on 1,661,567
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $19.02
=============================================================
STATEMENT OF OPERATIONS
For the Year Ended March 31, 2000
- --------------------------------------------------------------
INVESTMENT INCOME
Income
Dividends (less foreign dividend tax of $10,687) $1,247,623
Interest 225,519
- --------------------------------------------------------------
TOTAL INCOME 1,473,142
- --------------------------------------------------------------
Expenses
Management Fees 311,095
Distribution Fees:
Class A 79,351
Class B 182,081
Shareholder Servicing Fees 259,246
Transfer Agent Fees 150,841
Administrative Fees 103,699
Custody Fees 48,686
Registration Fees 30,685
Shareholder Reporting Expenses 26,235
Other Expenses 21,688
Audit Fees 17,336
Directors Fees 6,389
Professional Fees 5,612
- --------------------------------------------------------------
TOTAL EXPENSES 1,242,944
- --------------------------------------------------------------
Less:
Custodian Fees Paid Indirectly (5,533)
Expenses Reimbursed by Affiliates (204,300)
- --------------------------------------------------------------
TOTAL NET EXPENSES 1,033,111
- --------------------------------------------------------------
NET INVESTMENT INCOME 440,031
- --------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net Realized Gain (Loss) on:
Investment Securities 13,183,109
Index Futures Contracts (18,270)
- --------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS
FOR THE PERIOD 13,164,839
- --------------------------------------------------------------
Net Change in Unrealized Appreciation of:
Investment Securities 2,697,928
Index Futures Contracts 421,135
- --------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
OF INVESTMENTS FOR THE PERIOD 3,119,063
- --------------------------------------------------------------
NET GAIN ON INVESTMENTS 16,283,902
- --------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $16,723,933
==============================================================
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
MARCH 31, 2000
INDEX 500 STOCK FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the For the
Year Ended Year Ended
March 31, 2000 March 31, 1999
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations
Net Investment Income $440,031 $484,221
Net Realized Gain on Investments 13,164,839 1,238,728
Net Change in Unrealized Appreciation of Investments for the Period 3,119,063 9,723,362
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations 16,723,933 11,446,311
- ---------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders from Net Investment Income (603,740) (228,819)
Distributions to Class A Shareholders from Net Realized Gain on Investments (1,327,954) (492,288)
Distributions to Class B Shareholders from Net Investment Income (72,915) (17,026)
Distributions to Class B Shareholders from Net Realized Gain on Investments (441,245) (111,777)
- ---------------------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Distributions to Shareholders (2,445,854) (849,910)
- ---------------------------------------------------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 828,935 and 1,243,043 Shares 14,756,441 19,256,340
Proceeds from Shares Issued on Reinvestment of Distributions Paid
(102,410 and 44,680 shares) 1,923,080 716,707
Payments for 1,654,845 and 138,873 Shares Redeemed (31,325,709) (2,128,916)
- ---------------------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from
Class A Fund Share Transactions ((723,500) and 1,148,850 shares) (14,646,188) 17,844,131
- ---------------------------------------------------------------------------------------------------------------------------
Class B
Proceeds from Sale of 740,906 and 814,757 Shares 13,048,720 12,206,936
Proceeds from Shares Issued on Reinvestment of Distributions Paid
(27,200 and 7,919 shares) 505,932 126,087
Payments for 176,027 and 49,118 Shares Redeemed (3,105,423) (751,091)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class B Fund Share Transactions (592,079 and 773,558 shares) 10,449,229 11,581,932
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 10,081,120 40,022,464
NET ASSETS
Beginning of Period 87,836,600 47,814,136
- ---------------------------------------------------------------------------------------------------------------------------
END OF PERIOD (INCLUDES UNDISTRIBUTED NET INVESTMENT INCOME OF
$112,491 AND $347,027, RESPECTIVELY) $97,917,720 $87,836,600
===========================================================================================================================
The Accompanying Notes are an Integral Part of the Financial Statements.
</TABLE>
<PAGE>
M A S O N S T R E E T F U N D S
INDEX 500 STOCK FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A CLASS A CLASS A CLASS B CLASS B CLASS B
-------- -------- -------- -------- -------- -------
For the For the For the For the For the For the
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
March 31, March 31, March 31, March 31, March 31, March 31,
(For a share outstanding throughout the year) 2000 1999 1998 2000 1999 1998
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $16.80 $14.43 $10.00 $16.65 $14.35 $10.00
Income from Investment Operations:
Net Investment Income (Loss) 0.10<F3> 0.10 0.13<F1> (0.01)<F3> 0.03 0.05<F1>
Net Realized and Unrealized Gains
on Investments 2.77 2.47 4.48 2.72 2.43 4.47
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 2.87 2.57 4.61 2.71 2.46 4.52
- -------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net
Investment Income (0.13) (0.06) (0.11) (0.05) (0.02) (0.10)
Distributions from Realized Gains
on Investments (0.29) (0.14) (0.07) (0.29) (0.14) (0.07)
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (0.42) (0.20) (0.18) (0.34) (0.16) (0.17)
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $19.25 $16.80 $14.43 $19.02 $16.65 $14.35
===============================================================================================================================
TOTAL RETURN<F2> 17.15% 17.88% 46.35% 16.30% 17.17% 45.44%
===============================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $66,308,048 $70,034,287 $43,567,584 $31,609,672 $17,802,313 $4,246,552
===============================================================================================================================
RATIO OF GROSS EXPENSES TO
AVERAGE NET ASSETS 1.04% 1.15% 1.30% 1.72% 1.80% 1.95%
===============================================================================================================================
RATIO OF NET EXPENSES TO
AVERAGE NET ASSETS 0.85% 0.85% 0.85% 1.50% 1.50% 1.50%
===============================================================================================================================
RATIO OF NET INVESTMENT INCOME (LOSS)
TO AVERAGE NET ASSETS 0.57% 0.88% 1.04% (0.08)% 0.23% 0.39%
===============================================================================================================================
PORTFOLIO TURNOVER RATE 19.61% 3.83% 2.47% 19.61% 3.83% 2.47%
===============================================================================================================================-
<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> Calculated prior to adjustment for certain book and tax income differences.
The Accompanying Notes are an Integral Part of the Financial Statements.
</TABLE>
<PAGE>
MARCH 31, 2000
ASSET ALLOCATION FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2000
- -------------------------------------------------------------------
ASSETS
Bonds (cost $28,080,058) $27,258,675
Domestic Common Stocks (cost $15,037,527) 24,795,646
Foreign Common Stock (cost $4,100,084) 8,046,475
Money Market Investments (cost $6,268,232) 6,268,232
Preferred Stock (cost $679,104) 652,620
- -------------------------------------------------------------------
67,021,648
- -------------------------------------------------------------------
Cash 82,673
Due from Securities Sold 1,083,886
Dividends and Interest Receivable 562,640
Due from Sale of Fund Shares 66,353
Futures Variation Margin 9,500
Unamortized Organizational Costs 8,255
- -------------------------------------------------------------------
TOTAL ASSETS 68,834,955
- -------------------------------------------------------------------
LIABILITIES
Due on Purchase of Securities 1,312,800
Other Accrued Liabilities 34,418
Due on Redemption of Fund Shares 27,742
Accrued Shareholder Servicing Fees 7,530
Accrued Distribution Expense 6,497
Due to Investment Advisor 6,446
Accrued Administrative Fees 5,215
- -------------------------------------------------------------------
TOTAL LIABILITIES 1,400,648
- -------------------------------------------------------------------
NET ASSETS $67,434,307
===================================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 4,525,997 shares outstanding) $50,495,789
Undistributed Net Investment Income 416,361
Undistributed Accumulated Net
Realized Gain on Investments 3,554,449
Net Unrealized Appreciation (Depreciation) of:
Investment Securities 12,856,643
Futures Contracts 111,469
Foreign Currency Transactions (404)
- -------------------------------------------------------------------
NET ASSETS FOR 4,525,997
SHARES OUTSTANDING $67,434,307
===================================================================
Per Share of Class A (Based on
3,777,996 Shares Issued and Outstanding):
OFFERING PRICE $15.67
===================================================================
NET ASSET VALUE AND REDEMPTION PRICE $14.93
===================================================================
Per Share of Class B (Based on 748,001
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $14.76
===================================================================
STATEMENT OF OPERATIONS
For the Year Ended March 31, 2000
- -------------------------------------------------------------------
INVESTMENT INCOME
Income
Interest $2,003,774
Dividends (less foreign dividend tax of $20,583) 333,390
- -------------------------------------------------------------------
TOTAL INCOME 2,337,164
- -------------------------------------------------------------------
Expenses
Management Fees 385,162
Shareholder Servicing Fees 137,558
Distribution Fees:
Class A 46,916
Class B 60,558
Transfer Agent Fees 65,463
Custody Fees 65,442
Administrative Fees 55,023
Other Expenses 26,063
Registration Fees 24,255
Audit Fees 18,200
Shareholder Reporting Expenses 16,724
Directors Fees 6,333
Professional Fees 6,114
- -------------------------------------------------------------------
TOTAL EXPENSES 913,811
- -------------------------------------------------------------------
Less:
Custodian Fees Paid Indirectly (6,425)
Expenses Reimbursed by Affiliates (118,954)
- -------------------------------------------------------------------
TOTAL NET EXPENSES 788,432
- -------------------------------------------------------------------
NET INVESTMENT INCOME 1,548,732
- -------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Net Realized Gain on:
Investment Securities 6,432,885
Futures Contracts 65,795
Foreign Currency Transactions 29
- -------------------------------------------------------------------
NET REALIZED GAIN FOR THE PERIOD 6,498,709
- -------------------------------------------------------------------
Net Change in Unrealized Appreciation
(Depreciation) of:
Investment Securities 7,306,808
Futures Contracts 133,731
Foreign Currency Transactions (967)
- -------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
OF INVESTMENTS FOR THE PERIOD 7,439,572
- -------------------------------------------------------------------
NET GAIN ON INVESTMENTS 13,938,281
- -------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $15,487,013
===================================================================
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>
STATEMENT OF CHANGES IN NET ASSETS
For the For the
Year Ended Year Ended
March 31, 2000 March 31, 1999
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations
Net Investment Income $1,548,732 $1,136,197
Net Realized Gain on Investments 6,498,709 1,573,508
Net Change in Unrealized Appreciation of Investments
and Foreign Currency Transactions for the Period 7,439,572 41,823
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations 15,487,013 2,751,528
- ---------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders from Net Investment Income (1,255,848) (947,806)
Distributions to Class A Shareholders from Net Realized Gain on Investments (3,354,503) (889,863)
Distributions to Class B Shareholders from Net Investment Income (190,335) (109,624)
Distributions to Class B Shareholders from Net Realized Gain on Investments (619,819) (118,298)
- ---------------------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Distributions to Shareholders (5,420,505) (2,065,591)
- ---------------------------------------------------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 313,966 and 347,269 Shares 4,244,555 4,216,962
Proceeds from Shares Issued on Reinvestment of Distributions Paid
(334,388 and 148,053 shares) 4,607,799 1,822,522
Payments for 93,783 and 78,315 Shares Redeemed (1,296,649) (958,017)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class A Fund Share Transactions (554,571 and 417,007 shares) 7,555,705 5,081,467
- ---------------------------------------------------------------------------------------------------------------------------
Class B
Proceeds from Sale of 287,133 and 347,283 Shares 3,856,025 4,226,850
Proceeds from Shares Issued on Reinvestment of Distributions Paid
(55,818 and 17,717 shares) 761,351 216,682
Payments for 65,314 and 22,663 Shares Redeemed (880,800) (268,668)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class B Fund Share Transactions (277,637 and 342,337 shares) 3,736,576 4,174,864
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 21,358,789 9,942,268
NET ASSETS
Beginning of Period 46,075,518 36,133,250
- ---------------------------------------------------------------------------------------------------------------------------
END OF PERIOD (INCLUDES UNDISTRIBUTED NET INVESTMENT INCOME OF
$416,361 AND $311,695, RESPECTIVELY) $67,434,307 $46,075,518
===========================================================================================================================
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
MARCH 31, 2000
ASSET ALLOCATION FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A CLASS A CLASS A CLASS B CLASS B CLASS B
-------- -------- -------- -------- -------- --------
For the For the For the For the For the For the
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
March 31, March 31, March 31, March 31, March 31, March 31,
(For a share outstanding throughout the year) 2000 1999 1998 2000 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $12.49 $12.32 $10.00 $12.39 $12.26 $10.00
Income from Investment Operations:
Net Investment Income 0.39<F3> 0.32 0.31<F1> 0.32<F3> 0.24 0.23<F1>
Net Realized and Unrealized Gains
on Investments 3.41 0.46 2.50 3.35 0.46 2.50
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 3.80 0.78 2.81 3.67 0.70 2.73
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net
Investment Income (0.37) (0.31) (0.24) (0.31) (0.27) (0.22)
Distributions from Realized Gains
on Investments (0.99) (0.30) (0.25) (0.99) (0.30) (0.25)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (1.36) (0.61) (0.49) (1.30) (0.57) (0.47)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $14.93 $12.49 $12.32 $14.76 $12.39 $12.26
===================================================================================================================================
TOTAL RETURN<F2> 31.38% 6.41% 28.51% 30.47% 5.77% 27.69%
===================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $56,394,478 $40,249,915 $34,564,169 $11,039,829 $5,825,603 $1,569,081
===================================================================================================================================
RATIO OF GROSS EXPENSES TO
AVERAGE NET ASSETS 1.57% 1.62% 1.67% 2.22% 2.27% 2.32%
===================================================================================================================================
RATIO OF NET EXPENSES TO
AVERAGE NET ASSETS 1.35% 1.35% 1.35% 2.00% 2.00% 2.00%
===================================================================================================================================
RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS 2.90% 2.89% 2.67% 2.25% 2.24% 2.02%
===================================================================================================================================
PORTFOLIO TURNOVER RATE 115.67% 79.71% 65.67% 115.67% 79.71% 65.67%
===================================================================================================================================
<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> Calculated prior to adjustment for certain book and tax income differences.
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
M A S O N S T R E E T F U N D S
HIGH YIELD BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2000
- --------------------------------------------------------------------
ASSETS
Bonds (cost $34,888,250) $32,554,798
Preferred Stock (cost $5,350,576) 5,151,493
Money Market Investments (cost $1,992,246) 1,992,246
Common Stock (cost $311,399) 276,814
- --------------------------------------------------------------------
39,975,351
- --------------------------------------------------------------------
Dividends and Interest Receivable 999,702
Due from Sale of Securities 632,509
Unamortized Organizational Costs 8,255
Due from Sale of Fund Shares 3,160
- --------------------------------------------------------------------
TOTAL ASSETS 41,618,977
- --------------------------------------------------------------------
LIABILITIES
Due on Purchase of Securities 1,397,117
Due on Redemption of Fund Shares 482,404
Income Dividend Payable 369,985
Other Accrued Liabilities 29,601
Due to Investment Advisor 13,843
Accrued Shareholder Servicing Fees 4,061
Accrued Administrative Fees 3,043
- --------------------------------------------------------------------
TOTAL LIABILITIES 2,300,054
- --------------------------------------------------------------------
NET ASSETS $39,318,923
====================================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 4,954,414 shares outstanding) $49,390,816
Undistributed Net Investment Income 65,113
Undistributed Accumulated Net
Realized Loss on Investments (7,569,886)
Net Unrealized Depreciation of
Investment Securities (2,567,120)
- --------------------------------------------------------------------
NET ASSETS FOR 4,954,414
SHARES OUTSTANDING $39,318,923
====================================================================
Per Share of Class A (Based on
4,371,667 Shares Issued and Outstanding):
OFFERING PRICE $8.34
====================================================================
NET ASSET VALUE AND REDEMPTION PRICE $7.94
====================================================================
Per Share of Class B (Based on 582,747
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $7.93
====================================================================
STATEMENT OF OPERATIONS
For the Year Ended March 31, 2000
- --------------------------------------------------------------------
INVESTMENT INCOME
Income
Interest $4,165,530
Dividends 690,924
- --------------------------------------------------------------------
TOTAL INCOME 4,856,454
- --------------------------------------------------------------------
Expenses
Management Fees 321,268
Shareholder Servicing Fees 107,089
Distribution Fees:
Class A 37,679
Class B 38,458
Transfer Agent Fees 59,488
Administrative Fees 42,836
Custody Fees 25,209
Registration Fees 23,112
Audit Fees 19,711
Other Expenses 16,818
Shareholder Reporting Expenses 14,010
Directors Fees 6,333
Professional Fees 6,114
- --------------------------------------------------------------------
TOTAL EXPENSES 718,125
- --------------------------------------------------------------------
Less:
Custodian Fees Paid Indirectly (2,257)
Expenses Reimbursed by Affiliates (128,309)
- --------------------------------------------------------------------
TOTAL NET EXPENSES 587,559
- --------------------------------------------------------------------
NET INVESTMENT INCOME 4,268,895
- --------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
NET REALIZED LOSS ON INVESTMENTS
FOR THE PERIOD (6,289,754)
- --------------------------------------------------------------------
NET CHANGE IN UNREALIZED DEPRECIATION
OF INVESTMENTS FOR THE PERIOD 2,062,972
- --------------------------------------------------------------------
NET LOSS ON INVESTMENTS (4,226,782)
- --------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $42,113
====================================================================
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
MARCH 31, 2000
HIGH YIELD BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
For the For the
Year Ended Year Ended
March 31, 2000 March 31, 1999
- ------------------------------------------------------------------------------
INCREASE IN NET ASSETS
Operations
Net Investment Income $4,268,895 $4,044,762
Net Realized Loss on Investments (6,289,754) (1,280,132)
Net Change in Unrealized Appreciation
(Depreciation) of Investments for the Period 2,062,972 (5,811,136)
- ------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations 42,113 (3,046,506)
- ------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders from
Net Investment Income (3,788,131) (3,730,343)
Distributions to Class A Shareholders from
Net Realized Gain on Investments _ (741,685)
Distributions to Class B Shareholders from
Net Investment Income (480,855) (314,419)
Distributions to Class B Shareholders from
Net Realized Gain on Investments _ (79,109)
- ------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting
from Distributions to Shareholders (4,268,986) (4,865,556)
- ------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 197,261 and 1,028,931
Shares 1,673,803 9,935,472
Proceeds from Shares Issued on Reinvestment
of Distributions Paid
(410,273 and 439,864 shares) 3,489,184 4,226,546
Payments for 504,480 and 241,682
Shares Redeemed (4,165,018) (2,317,174)
- ------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class A Fund Share Transactions (103,054
and 1,227,113 shares) 997,969 11,844,844
- ------------------------------------------------------------------------------
Class B
Proceeds from Sale of 138,154 and 405,492
Shares 1,193,847 3,957,486
Proceeds from Shares Issued on Reinvestment
of Distributions Paid
(45,340 and 34,096 shares) 385,397 322,079
Payments for 135,476 and 31,028
Shares Redeemed (1,129,652) (286,353)
- ------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class B Fund Share Transactions
(48,018 and 408,560 shares) 449,592 3,993,212
- ------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (2,779,312) 7,925,994
NET ASSETS
Beginning of Period 42,098,235 34,172,241
- ------------------------------------------------------------------------------
END OF PERIOD (INCLUDES UNDISTRIBUTED
NET INVESTMENT INCOME OF
$65,113 AND $63,116, RESPECTIVELY) $39,318,923 $42,098,235
==============================================================================
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
M A S O N S T R E E T F U N D S
HIGH YIELD BOND FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A CLASS A CLASS A CLASS B CLASS B CLASS B
-------- -------- -------- -------- -------- --------
For the For the For the For the For the For the
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
March 31, March 31, March 31, March 31, March 31, March 31,
(For a share outstanding throughout the year) 2000 1999 1998 2000 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $8.77 $10.79 $10.00 $8.76 $10.79 $10.00
Income from Investment Operations:
Net Investment Income 0.85<F3> 1.00 1.01<F1> 0.80<F3> 0.93 0.93<F1>
Net Realized and Unrealized Gains
(Losses) on Investments (0.83) (1.82) 1.19 (0.83) (1.83) 1.20
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 0.02 (0.82) 2.20 (0.03) (0.90) 2.13
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net
Investment Income (0.85) (1.02) (1.00) (0.80) (0.95) (0.93)
Distributions from Realized Gains
on Investments _ (0.18) (0.41) _ (0.18) (0.41)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (0.85) (1.20) (1.41) (0.80) (1.13) (1.34)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $7.94 $8.77 $10.79 $7.93 $8.76 $10.79
==================================================================================================================================
TOTAL RETURN<F2> 0.12% (7.87)% 22.95% (0.54)% (8.48)% 22.09%
==================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $34,696,895 $37,414,394 $32,811,316 $4,622,028 $4,683,841 $1,360,925
==================================================================================================================================
RATIO OF GROSS EXPENSES TO
AVERAGE NET ASSETS 1.60% 1.65% 1.66% 2.25% 2.30% 2.31%
==================================================================================================================================
RATIO OF NET EXPENSES TO
AVERAGE NET ASSETS 1.30% 1.30% 1.30% 1.95% 1.95% 1.95%
==================================================================================================================================
RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS 10.05% 10.51% 9.30% 9.40% 9.86% 8.65%
==================================================================================================================================
PORTFOLIO TURNOVER RATE 193.63% 178.63% 178.61% 193.63% 178.63% 178.61%
==================================================================================================================================
<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> Calculated prior to adjustment for certain book and tax income differences.
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
MARCH 31, 2000
MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2000
- ---------------------------------------------------------------
ASSETS
Bonds (cost $36,342,173) $36,230,540
- ---------------------------------------------------------------
Due from Sale of Securities 5,681,655
Interest Receivable 503,337
Unamortized Organizational Costs 8,255
Due from Investment Advisor 5,425
Due from Sale of Fund Shares 2,025
- ---------------------------------------------------------------
TOTAL ASSETS 42,431,237
- ---------------------------------------------------------------
LIABILITIES
Due on Purchase of Securities 7,900,484
Income Dividend Payable 140,212
Other Accrued Liabilities 18,342
Accrued Shareholder Servicing Fees 3,397
Accrued Administrative Fees 2,515
Accrued Distribution Expense 1,897
- ---------------------------------------------------------------
TOTAL LIABILITIES 8,066,847
- ---------------------------------------------------------------
NET ASSETS $34,364,390
===============================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 3,412,139 shares outstanding) $34,499,082
Undistributed Net
Investment Income 34,006
Undistributed Accumulated Net Realized
Loss on Investments (57,065)
Net Unrealized Depreciation of
Investment Securities (111,633)
- ---------------------------------------------------------------
NET ASSETS FOR 3,412,139
SHARES OUTSTANDING $34,364,390
===============================================================
Per Share of Class A (Based on
3,325,015 Shares Issued and Outstanding):
OFFERING PRICE $10.57
===============================================================
NET ASSET VALUE AND REDEMPTION PRICE $10.07
===============================================================
Per Share of Class B (Based on 87,124
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $10.07
===============================================================
STATEMENT OF OPERATIONS
For the Year Ended March 31, 2000
- ---------------------------------------------------------------
INVESTMENT INCOME
Income
Interest $1,821,849
- ---------------------------------------------------------------
Expenses
Management Fees 101,337
Shareholder Servicing Fees 84,447
Transfer Agent Fees 49,221
Distribution Fees:
Class A 32,849
Class B 6,808
Administrative Fees 33,779
Registration Fees 23,392
Audit Fees 19,111
Shareholder Reporting Expenses 11,063
Other Expenses 10,302
Directors Fees 6,361
Professional Fees 6,114
Custody Fees 4,918
- ---------------------------------------------------------------
TOTAL EXPENSES 389,702
- ---------------------------------------------------------------
Less:
Custodian Fees Paid Indirectly (5,512)
Expenses Reimbursed by Affiliates (96,873)
- ---------------------------------------------------------------
TOTAL NET EXPENSES 287,317
- ---------------------------------------------------------------
NET INVESTMENT INCOME 1,534,532
- ---------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net Realized Gain (Loss) on:
Investment Securities 134,022
Futures Contracts (81,412)
- ---------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS
FOR THE PERIOD 52,610
- ---------------------------------------------------------------
NET CHANGE IN UNREALIZED DEPRECIATION
OF INVESTMENTS FOR THE PERIOD (1,628,806)
- ---------------------------------------------------------------
NET LOSS ON INVESTMENTS (1,576,196)
- ---------------------------------------------------------------
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS $(41,664)
===============================================================
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 CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the For the
Year Ended Year Ended
March 31, 2000 March 31, 1999
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations
Net Investment Income $1,534,532 $1,275,087
Net Realized Gain on Investments 52,610 547,755
Net Change in Unrealized Appreciation (Depreciation) of Investments for the Period (1,628,806) 78,672
- ---------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations (41,664) 1,901,514
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders from Net Investment Income (1,498,709) (1,249,869)
Distributions to Class A Shareholders from Net Realized Gain on Investments (242,842) (386,253)
Distributions to Class B Shareholders from Net Investment Income (35,354) (25,191)
Distributions to Class B Shareholders from Net Realized Gain on Investments (6,448) (10,382)
- ---------------------------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Distributions to Shareholders (1,783,353) (1,671,695)
- ---------------------------------------------------------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 123,222 and 286,927 Shares 1,279,858 3,057,973
Proceeds from Shares Issued on Reinvestment of Distributions Paid
(159,699 and 150,658 shares) 1,619,932 1,602,959
Payments for 32,459 and 34,207 Shares Redeemed (327,630) (365,717)
- ---------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class A Fund Share Transactions (250,462 and 403,378 shares) 2,572,160 4,295,215
- ---------------------------------------------------------------------------------------------------------------------------------
Class B
Proceeds from Sale of 32,121 and 79,084 Shares 327,841 840,371
Proceeds from Shares Issued on Reinvestment of Distributions Paid
(2,424 and 2,266 shares) 24,622 24,127
Payments for 27,302 and 46,259 Shares Redeemed (276,772) (492,568)
- ---------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class B Fund Share Transactions (7,243 and 35,091 shares) 75,691 371,930
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 822,834 4,896,964
NET ASSETS
Beginning of Period 33,541,556 28,644,592
- ---------------------------------------------------------------------------------------------------------------------------------
END OF PERIOD (INCLUDES UNDISTRIBUTED NET INVESTMENT INCOME OF
$34,006 AND $29,775, RESPECTIVELY) $34,364,390 $33,541,556
=================================================================================================================================
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
MARCH 31, 2000
TOTAL LIABILITIES 1,541,215
- --------------------------------------------------------------
NET ASSETS $34,665,974
==============================================================
REPRESENTED BY:
Aggregate Paid-in Capital
(300,000,000 shares authorized, $.001 par
value; 3,798,935 shares outstanding) $37,729,073
Undistributed Net Investment Income 3,918
Undistributed Accumulated Net
Realized Loss on Investments (600,795)
Net Unrealized Appreciation (Depreciation) of:
Investment Securities (2,468,472)
Futures Contracts 2,250
- --------------------------------------------------------------
NET ASSETS FOR 3,798,935
SHARES OUTSTANDING $34,665,974
==============================================================
Per Share of Class A (Based on 3,549,364
Shares Issued and Outstanding):
OFFERING PRICE $9.59
==============================================================
NET ASSET VALUE AND REDEMPTION PRICE $9.13
==============================================================
Per Share of Class B (Based on 249,571
Shares Issued and Outstanding):
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE $9.12
==============================================================
STATEMENT OF OPERATIONS
For the Year Ended March 31, 2000
- --------------------------------------------------------------
INVESTMENT INCOME
Income
Interest $2,590,074
- --------------------------------------------------------------
Expenses
Management Fees 102,994
Shareholder Servicing Fees 85,829
Other Expenses 60,952
Transfer Agent Fees 54,547
Distribution Fees:
Class A 31,754
Class B 19,159
Administrative Fees 34,332
Custody Fees 34,299
Registration Fees 23,292
- --------------------------------------------------------------
TOTAL EXPENSES 447,158
- --------------------------------------------------------------
Less:
Custodian Fees Paid Indirectly (4,854)
Expenses Reimbursed by Affiliates (138,932)
- --------------------------------------------------------------
TOTAL NET EXPENSES 303,372
- --------------------------------------------------------------
NET INVESTMENT INCOME 2,286,702
- --------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net Realized Gain (Loss) on:
Investment Securities (821,354)
Futures Contracts 540,483
Foreign Currency Transactions (2,687)
- --------------------------------------------------------------
NET REALIZED LOSS ON INVESTMENTS
FOR THE PERIOD (283,558)
- --------------------------------------------------------------
Net Change in Unrealized Appreciation
(Depreciation) of:
Investment Securities (1,249,334)
Futures Contracts 663
Foreign Currency Transactions 3,132
- --------------------------------------------------------------
NET CHANGE IN UNREALIZED DEPRECIATION
FOR THE PERIOD (1,245,539)
- --------------------------------------------------------------
NET LOSS ON INVESTMENTS (1,529,097)
- --------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $757,605
==============================================================
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
MARCH 31, 2000
SELECT BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the For the
Year Ended Year Ended
March 31, 2000 March 31, 1999
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations
Net Investment Income $2,286,702 $2,241,979
Net Realized Gain on Investments (283,558) 88,199
Net Change in Unrealized Depreciation of Investments and
Foreign Currency Transactions for the Period (1,245,539) (874,757)
- ----------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations 757,605 1,455,421
- ----------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
Distributions to Class A Shareholders from Net Investment Income (2,135,884) (2,097,576)
Distributions to Class A Shareholders from Net Realized Gain on Investments (362,939) (275,628)
Distributions to Class B Shareholders from Net Investment Income (154,885) (102,222)
Distributions to Class B Shareholders from Net Realized Gain on Investments (29,176) (17,034)
- ----------------------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Distributions to Shareholders (2,682,884) (2,492,460)
- ----------------------------------------------------------------------------------------------------------------------------
Fund Share Transactions
Class A
Proceeds from Sale of 182,584 and 440,741 Shares 1,698,931 4,312,671
Proceeds from Shares Issued on Reinvestment of Distributions Paid
(265,043 and 239,883 shares) 2,468,940 2,354,967
Payments for 158,608 and 289,128 Shares Redeemed (1,477,474) (2,825,781)
- ----------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Class A Fund Share Transactions (289,019 and 391,496 shares) 2,690,397 3,841,857
- ----------------------------------------------------------------------------------------------------------------------------
Class B
Proceeds from Sale of 83,972 and 209,025 Shares 788,090 2,055,500
Proceeds from Shares Issued on Reinvestment of Distributions Paid
(18,156 and 10,850 shares) 168,995 106,236
Payments for 103,728 and 33,197 Shares Redeemed (960,099) (323,437)
- ----------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from
Class B Fund Share Transactions ((1,600) and 186,678 shares) (3,014) 1,838,299
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 762,104 4,643,117
NET ASSETS
Beginning of Period 33,903,870 29,260,753
- ----------------------------------------------------------------------------------------------------------------------------
END OF PERIOD (INCLUDES (OVER) UNDISTRIBUTED NET INVESTMENT INCOME OF
$3,918 AND $(10,530), RESPECTIVELY) $34,665,974 $33,903,870
============================================================================================================================
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
<PAGE>
M A S O N S T R E E T F U N D S
SELECT BOND FUND
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
CLASS A CLASS A CLASS A CLASS B CLASS B CLASS B
------- ------- -------- -------- -------- --------
For the For the For the For the For the For the
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
(For a share March 31, March 31, March 31, March 31, March 31, March 31,
outstanding throughout the year) 2000 1999 1998 2000 1999 1998
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
Net Asset Value, Beginning of Period $9.66 $9.98 $10.00 $9.66 $9.98 $10.00
Income from Investment Operations:
Net Investment Income 0.68<F3> 0.61 0.71<F1> 0.60<F3> 0.56 0.66<F1>
Net Realized and Unrealized Gains
(Losses) on Investments (0.47) (0.16) 0.46 (0.46) (0.18) 0.44
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 0.21 0.45 1.17 0.14 0.38 1.10
- ----------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from Net
Investment Income (0.63) (0.68) (0.71) (0.57) (0.61) (0.64)
Distributions from Realized Gains
on Investments (0.11) (0.09) (0.48) (0.11) (0.09) (0.48)
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (0.74) (0.77) (1.19) (0.68) (0.70) (1.12)
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $9.13 $9.66 $9.98 $9.12 $9.66 $9.98
==================================================================================================================================
TOTAL RETURN<F2> 2.26% 4.60% 12.11% 1.49% 3.91% 11.34%
==================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $32,388,650 $31,478,811 $28,617,421 $2,277,324 $2,425,059 $643,332
==================================================================================================================================
RATIO OF GROSS EXPENSES TO
AVERAGE NET ASSETS 1.26% 1.26% 1.29% 1.90% 1.91% 1.94%
==================================================================================================================================
RATIO OF NET EXPENSES TO
AVERAGE NET ASSETS 0.85% 0.85% 0.85% 1.50% 1.50% 1.50%
==================================================================================================================================
RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS 6.70% 7.03% 6.93% 6.05% 6.38% 6.28%
==================================================================================================================================
PORTFOLIO TURNOVER RATE 92.12% 252.44% 362.32% 92.12% 252.44% 362.32%
==================================================================================================================================
<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> Calculated prior to adjustment for certain book and tax income differences.
The Accompanying Notes are an Integral Part of the Financial Statements.
</TABLE>
<PAGE>
MARCH 31, 2000
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." 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 current fiscal year,
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 funds 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 at $10.00 per share 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 a 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.
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 nine initial Funds equally.
- --------
NOTE 2
- --------
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
Principal accounting policies are summarized in the following Notes.
- --------
NOTE 3
- --------
Bonds are valued on the basis of prices furnished by a service which determines
prices for normal institutional size trading units of bonds, without regard to
exchange or over-the-counter prices. When quotations are not readily available,
bonds are valued using procedures approved by the Board of Directors. Stocks
listed on a national or foreign stock exchange are valued at the final sale
price, or final bid price in absence of a sale. Stocks not listed on a national
or foreign stock exchange are valued at the closing bid price on the over-the-
counter market. Money market investments with maturities exceeding 60 days but
generally not exceeding one year are valued by marking to market on the basis of
an average of the most recent bid prices or yields. Money market investments
with maturities of 60 days or less are valued on an amortized cost basis or, if
the current market value differs substantially from the amortized cost, by
marking to market.
- --------
NOTE 4
- --------
Securities and other assets and liabilities denominated in foreign currencies
are translated into U.S. dollar amounts on the date of valuation. Purchases and
sales of securities and income items denominated in foreign currencies are
translated into U.S. dollar amounts on the respective dates of such
transactions. When the International Equity Fund, Asset Allocation Fund and
Select Bond Fund purchase or sell a foreign security they may enter into a
foreign exchange currency contract to minimize market risk from the trade date
to the settlement date of such transaction. Such foreign exchange currency
contracts are marked to market daily.
The Funds may enter into forward foreign currency contracts to hedge against
exchange rate risk arising from investments in securities denominated in foreign
currencies. Contracts are valued at the contractual forward rate and are marked
to market daily, with the change in market value recorded as an unrealized gain
or loss. When the contracts are closed, a realized gain or loss is incurred.
Risks may arise from changes in market value of underlying instruments and from
the possible inability of counterparties to meet the terms of their contracts.
The International Equity Fund, Asset Allocation Fund and Select Bond Fund do not
separately report the results of operations due to changes in foreign exchange
rates on investments from the fluctuations arising from changes in market prices
of securities held. Such fluctuations are included with the net realized or
unrealized gain or loss from investments.
Net realized and unrealized foreign exchange gains or losses arise from sales of
foreign currencies, currency gains or losses realized between the trade date and
the settlement date on security transactions, and the differences between the
amounts of dividends and foreign withholding taxes recorded on the Funds' books
and the U.S. dollar equivalent of the amounts actually received or paid.
<PAGE>
M A S O N S T R E E T F U N D S
- --------
NOTE 5
- --------
The Small Cap Growth Stock Fund, Aggressive Growth Stock Fund, Index 400 Stock
Fund, Growth Stock Fund, Index 500 Stock Fund, Asset Allocation Fund, Municipal
Bond Fund and the Select Bond Fund invest in futures contracts as an alternative
to investing in individual securities. The Small Cap Growth Stock Fund,
Aggressive Growth Stock Fund, Index 400 Stock Fund, Growth Stock Fund, Index 500
Stock Fund, Asset Allocation Fund, Municipal Bond Fund and the Select Bond Fund
could be exposed to market risk due to changes in the value of the underlying
securities or due to an illiquid secondary market. Futures contracts are marked
to market daily based upon quoted settlement prices. The Funds receive from or
pay to brokers an amount of cash equal to the daily fluctuation in the value of
the contracts. Such receipts or payments, known as the "variation margin," are
recorded by the Funds as unrealized gains or losses. When the contract is
closed, the Funds record a realized gain or loss equal to the difference between
the value of the contract at the time it was opened and the value at the time it
was closed.
For federal income tax purposes, net unrealized appreciation (depreciation) on
open futures contracts is generally required to be treated as realized gains
(losses).
- --------
NOTE 6
- --------
Income, Fund expenses, realized and unrealized gains and losses are allocated
daily to each class of shares based on the value of shares outstanding for the
Small Cap Growth Stock Fund, Aggressive Growth Stock Fund, International Equity
Fund, Index 400 Stock Fund, Growth Stock Fund, Growth and Income Stock Fund,
Index 500 Stock Fund and Asset Allocation Fund. Dividends and other
distributions are calculated in a similar manner and are declared and
distributed to shareholders annually for these Funds. For the High Yield Bond
Fund, Municipal Bond Fund and Select Bond Fund, income and Fund expenses are
allocated daily to each class of shares based on the value of settled shares.
Realized and unrealized gains and losses are allocated daily to each class of
shares based on the value of shares outstanding. Dividends and other
distributions are calculated in a similar manner. Income dividends are declared
daily, paid monthly. Capital gain dividends are declared and distributed
annually for these Funds.
- --------
NOTE 7
- --------
Interest income and discounts earned are recorded daily on the accrual basis and
dividend income is recorded on the ex-dividend date or as soon as information
from foreign issuers is available. Where applicable, dividends are recorded net
of foreign dividend tax. Discounts on securities purchased in the Funds are
amortized over the life of the respective securities using the effective
interest method. Premiums for the Municipal Bond Fund are amortized to the
remaining life or the earliest call date, if callable. Securities transactions
are accounted for on trade date. The basis for determining cost on sale of
securities is identified cost. For the year ended March 31, 2000, transactions
in securities other than money market investments were:
Total U.S. Gov't.
Total U.S. Gov't. Security Security
Security Security Sales/ Sales/
Fund Purchases Purchases Maturities Maturities
- -------------------------------------------------------------------------------
SMALL CAP GROWTH STOCK
FUND $13,715,874 _ $6,895,179 _
- -------------------------------------------------------------------------------
AGGRESSIVE GROWTH STOCK
FUND 57,683,311 _ 59,765,804 _
- -------------------------------------------------------------------------------
INTERNATIONAL EQUITY
FUND 8,211,098 _ 8,419,324 _
- -------------------------------------------------------------------------------
INDEX 400 STOCK FUND 36,664,737 _ 9,549,080 _
- -------------------------------------------------------------------------------
GROWTH STOCK FUND 24,479,783 _ 18,150,104 _
- -------------------------------------------------------------------------------
GROWTH AND INCOME STOCK
FUND 48,749,011 _ 46,669,358 _
- -------------------------------------------------------------------------------
INDEX 500 STOCK FUND 19,184,148 _ 28,868,453 _
- -------------------------------------------------------------------------------
ASSET ALLOCATION FUND 59,320,518 $19,703,925 53,064,241 $14,222,083
- -------------------------------------------------------------------------------
HIGH YIELD BOND FUND 79,086,363 _ 76,042,079 _
- -------------------------------------------------------------------------------
MUNICIPAL BOND FUND 61,039,815 _ 60,757,229 _
- -------------------------------------------------------------------------------
SELECT BOND FUND 33,943,436 13,031,112 29,668,155 11,806,909
<PAGE>
MARCH 31, 2000
- -------
NOTE 8
- -------
Northwestern Mutual Investment Services, LLC ("NMIS") serves as investment
advisor to each of the Funds, with certain of the Funds also being served by a
subadvisor. Each Fund pays NMIS an annual fee for investment advisory services
based on average daily net assets of the Fund according to the following
schedule:
Fund Fee
- ---------------------------------------------
SMALL CAP GROWTH STOCK FUND 0.85%
- ---------------------------------------------
AGGRESSIVE GROWTH STOCK FUND 0.75%
- ---------------------------------------------
INTERNATIONAL EQUITY FUND 0.85%
- ---------------------------------------------
INDEX 400 STOCK FUND 0.40%
- ---------------------------------------------
GROWTH STOCK FUND 0.75%
- ---------------------------------------------
GROWTH AND INCOME STOCK FUND 0.65%
- ---------------------------------------------
INDEX 500 STOCK FUND 0.30%
- ---------------------------------------------
ASSET ALLOCATION FUND 0.70%
- ---------------------------------------------
HIGH YIELD BOND FUND 0.75%
- ---------------------------------------------
MUNICIPAL BOND FUND 0.30%
- ---------------------------------------------
SELECT BOND FUND 0.30%
- ---------------------------------------------
J.P. Morgan Investment Management Inc. ("J.P. Morgan") and Templeton Investment
Counsel, Inc. ("Templeton") have been retained under investment subadvisory
agreements to provide investment advice and, in general, to conduct the
management investment program of the Growth and Income Stock Fund and the
International Equity Fund, respectively. Of the amounts received from the Growth
and Income Stock Fund, NMIS pays J.P. Morgan 0.45% on the first $100 million of
the combined net assets for all funds managed for Northwestern Mutual by J.P.
Morgan, 0.40% on the next $100 million, 0.35% on the next $200 million and 0.30%
on the combined net assets in excess of $400 million. Of the amounts received
from the International Equity Fund, NMIS pays Templeton 0.50% on the first $100
million of the combined net assets for all funds managed for Northwestern Mutual
by Templeton and 0.40% on the combined net assets in excess of $100 million.
Robert W. Baird & Co. Incorporated ("Baird") serves as the Distributor of the
Funds. Baird is an affiliate of Northwestern Mutual and NMIS. The Funds have a
12b-1 distribution plan and shareholder services agreement with Baird pursuant
to which a 0.35% and a 1.00% annual fee for Class A and Class B, respectively,
is calculated based on daily net assets.
The 0.35% fee for Class A is comprised of a 0.25% shareholder servicing fee and
a 0.10% distribution fee paid to Baird for various distribution expenses. The
1.00% fee for Class B is comprised of a 0.25% shareholder servicing fee and a
0.75% distribution fee. Of the 1.00%, 0.35% is paid to Baird for distribution
and shareholder servicing expenses; the remaining 0.65% is paid to Northwestern
Mutual for reimbursement of commissions paid to agents.
Baird received $528,451 of dealer allowances and Northwestern Mutual received
$173,301 of underwriting concessions from Class A sales charges. Northwestern
Mutual received $137,225 of contingent deferred sales charges from Class B
shares for the year ended March 31, 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>
M A S O N S T R E E T F U N D S
NMIS and affiliates have waived the following fees for the year ended March 31,
2000:
Distribution Fees
------------------
Fund Class A Class B Other Total
- ------------------------------------------------------------------------------
SMALL CAP GROWTH STOCK FUND $4,927 $487 $101,852 $107,266
- ------------------------------------------------------------------------------
AGGRESSIVE GROWTH STOCK FUND 113 _ 132,137 132,250
- ------------------------------------------------------------------------------
INTERNATIONAL EQUITY FUND _ 122 73,847 73,969
- ------------------------------------------------------------------------------
INDEX 400 STOCK FUND 18,634 1,309 113,761 133,704
- ------------------------------------------------------------------------------
GROWTH STOCK FUND _ 80 120,735 120,815
- ------------------------------------------------------------------------------
GROWTH AND INCOME STOCK FUND _ 246 127,705 127,951
- ------------------------------------------------------------------------------
INDEX 500 STOCK FUND _ 5,675 198,625 204,300
- ------------------------------------------------------------------------------
ASSET ALLOCATION FUND _ 531 118,423 118,954
- ------------------------------------------------------------------------------
HIGH YIELD BOND FUND 1,439 _ 126,870 128,309
- ------------------------------------------------------------------------------
MUNICIPAL BOND FUND 1,160 _ 95,713 96,873
- ------------------------------------------------------------------------------
SELECT BOND FUND 1,602 4 137,326 138,932
- ------------------------------------------------------------------------------
TOTAL $27,875 $8,454 $1,346,994 $1,383,323
- ------------------------------------------------------------------------------
The Small Cap Growth Stock Fund, Aggressive Growth Stock Fund, Growth Stock Fund
and Asset Allocation Fund paid commissions on Fund transactions to an affiliated
broker in the amount of $738, $6,017, $96 and $159, respectively, during the
year ended March 31, 2000.
As permitted under Rule 10f-3 of the Investment Company Act of 1940, the Board
of Directors of the Funds has adopted a plan which will allow the Funds, under
certain conditions described in the Rule, to acquire newly-issued securities
from syndicates in which the Distributor is a member.
- --------
NOTE 9
- --------
Each Fund intends to comply with the requirements of the Internal Revenue Code
necessary to qualify as a regulated investment company and to make the requisite
distributions of income and capital gains to its shareholders sufficient to
relieve it from all or substantially all federal income taxes. Accordingly, no
provisions have been made for federal taxes.
Taxable distributions from net investment income and realized capital gains in
the Funds differ from book amounts earned during the period due to differences
in the timing of capital recognition, and due to the reclassification of certain
gains or losses from capital to income. The differences between cost amounts for
book purposes and tax purposes are due to deferred losses.
It is the policy of the Funds 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.
- ---------------------------
DISTRIBUTIONS (UNAUDITED)
- ---------------------------
Dividends distributed during the twelve months which were derived from interest
on U.S. government securities which is generally exempt from state income tax
are as follows:
- ------------------------------------
Small Cap Growth Stock Fund 13%
- ------------------------------------
Index 400 Stock Fund 2%
- ------------------------------------
Growth Stock Fund 4%
- ------------------------------------
Asset Allocation Fund 18%
- ------------------------------------
Select Bond Fund 9%
- ------------------------------------
<PAGE>
MARCH 31, 2000
Under IRC 854(b)(2) of the Internal Revenue Code, the Funds hereby
designate the following percentages of ordinary income dividends
(including short-term capital gain distributions) paid by each Fund as
income qualifying for the dividends received deduction for the year
ended March 31, 2000:
- ------------------------------------
Aggressive Growth Stock Fund 1%
- ------------------------------------
Index 400 Stock Fund 9%
- ------------------------------------
Growth Stock Fund 30%
- ------------------------------------
Growth and Income Stock Fund 11%
- ------------------------------------
Index 500 Stock Fund 100%
- ------------------------------------
Asset Allocation Fund 7%
- ------------------------------------
High Yield Bond Fund 16%
- ------------------------------------
The International Equity Fund elects to pass foreign taxes through to the Fund's
shareholders. During the year ended March 31, 2000, the amount was $80,942. In
addition, for the year ended March 31, 2000, net income derived from sources
within foreign countries amounted to $308,094 for the International Equity Fund.
The following distributions through the year ended March 31, 2000 are designated
as long-term capital gains:
Aggressive Growth Stock Fund $3,720,414
- ---------------------------------------------
International Equity Fund 23,854
- ---------------------------------------------
Index 400 Stock Fund 19,011
- ---------------------------------------------
Growth Stock Fund 2,628,303
- ---------------------------------------------
Growth and Income Stock Fund 510,255
- ---------------------------------------------
Index 500 Stock Fund 1,508,802
- ---------------------------------------------
Asset Allocation Fund 2,024,110
- ---------------------------------------------
Municipal Bond Fund 102,220
- ---------------------------------------------
Select Bond Fund 31,046
- ---------------------------------------------
The data is informational only. Every year in January, shareholders are sent a
Form 1099-DIV representing their portion of the capital gain distributions on a
calendar year basis to be reported on their income tax return.
<PAGE>
M A S O N S T R E E T F U N D S
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of
Mason Street Funds/R, Inc.
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of 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, Asset
Allocation Fund, High Yield Bond Fund, Municipal Bond Fund and Select Bond Fund
(constituting Mason Street Funds/R, Inc., hereafter referred to as the "Funds")
at March 31, 2000, the results of each of their operations for the year or
period then ended, the changes in each of their net assets and the financial
highlights for the years or periods indicated, in conformity with accounting
principles generally accepted in the United States. These financial statements
and financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at March 31,
2000 by correspondence with the custodians and brokers, provide a reasonable
basis for the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
Milwaukee, Wisconsin
May 4, 2000
<PAGE>
MARCH 31, 2000
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
- ----------
Officers
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JAMES D. ERICSON
President
MARK G. DOLL
Vice President and Treasurer
MERRILL C. LUNDBERG
Secretary
BARBARA E. COURTNEY
Controller
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MASON STREET FUNDS/R
P.O. BOX 219419
KANSAS CITY, MO 64121-9419
1-888-MASONST (1-888-627-6678)
WWW.MASONSTREETFUNDS.COM
94-1002
Robert W. Baird & Co. Incorporated, Distributor 11/97 (Rev. 5/00)
Robert W. Baird & Co. Incorporated. Member New York
Stock Exchange and other principal exchanges, member SIPC,
and a subsidiary of The Northwestern Mutual Life Insurance Company.
