MONUMENT FUNDS GROUP, INC.
Monument Series Fund, Inc.
Monument Internet Fund
Monument Medical Sciences Fund
Monument Telecommunications Fund
Semi-Annual Report To Shareholders
For the Six Months Ended
April 30, 2000
<PAGE>
MONUMENT INTERNET FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
April 30, 2000
(Unaudited)
Number
of Market
Shares Security Description Value
------- --------------------- -------------
Common Stock: 78.2%
Access: 3.0%
39,000 Covad Communications Group* $ 1,082,250
18,000 Global Crossing Ltd.* 567,000
35,000 Metrocall* 210,000
20,000 Metromedia Fiber Network*(a) 617,500
48,750 Winstar Communications Inc.* 1,943,905
------------
4,420,655
------------
E-Commerce: 2.3%
20,000 Amazon.com Inc.* 1,103,750
15,000 eBay Inc.* 2,387,813
------------
3,491,563
------------
Hub/Virtual Community: 8.4%
100,500 America Online* 6,011,156
30,200 VerticalNet Inc.* 1,630,800
37,600 Yahoo Inc.* 4,897,400
------------
12,539,356
------------
Infrastructure: 30.2%
55,000 Alcatel ADR 2,499,062
22,000 Broadcom Corp* 3,792,250
74,000 Cisco Systems Inc.* 5,130,279
40,500 Clarent Corp* 2,754,000
45,500 Entrust Technologies*(a) 2,235,188
47,500 Intel Corp. 6,023,594
7,000 JDS Uniphase Corp* 726,250
14,000 Network Solutions A* 2,072,000
50,000 Nortel Networks Corp. 5,662,500
5,000 Oracle Corporation* 399,688
5,000 PMC Sierra* 959,375
78,400 Sun Microsystems Inc.* 7,207,900
10,000 Sycamore Networks* 785,000
19,750 USInternetworking Inc.* 491,281
15,000 Verisign Inc.* 2,090,625
7,000 Veritas Software* 750,859
10,000 Vitesse Semiconductors*(a) 680,625
20,000 Wind River Systems* 853,750
------------
45,114,226
------------
Internet Technology: 24.4%
45,000 Ariba Inc*.(a) 3,338,438
78,300 Broadvision Inc.*(a) 3,440,306
10,000 Checkpoint Software* 1,730,000
36,000 Inktomi Corp.* 5,541,750
8,000 Lernout Hauspic* 774,000
30,000 Macromedia Inc.* 2,610,000
32,000 Microsoft Corp.* 2,232,000
40,000 Network Associates* 1,017,500
43,000 Phone.com Inc.* 3,612,000
70,200 Real Networks Inc.*(a) 3,343,275
52,100 S 1 Corporation*(a) 2,829,681
84,000 Vignette Corporation* 4,047,750
108,450 Vocaltec Comm Ltd.* 1,924,988
------------
36,441,688
------------
Media/Content: 3.9%
19,600 Homestore.com Inc.* 357,700
75,000 Infospace.com Inc.*(a) 5,385,938
------------
5,743,638
------------
Services: 6.0%
54,000 CMG Information Services*(a) 3,847,500
38,000 Doubleclick Inc.*(a) 2,883,250
7,000 Exodus Communication* 619,063
45,200 Proxicom Inc.* 1,545,275
------------
8,895,088
------------
Total Common Stock:
(Cost:$95,948,136) 116,646,214
------------
Principal
-------------
U.S. Government Securities: 3.3%
5,000,000 U.S. Treasury Bill
matures 06/01/00
(Cost: $4,976,018) 4,977,440
------------
Short-term Investments: 18.9%
28,203,122 Star Treasury Fund
(Cost:$28,203,122) 28,203,122
------------
Total Investments:
(Cost:$129,127,276)** 100.4% $149,826,776
Other assets, net -0.4% (668,648)
------- ------------
Net Assets 100.0% $149,158,128
======= ============
-----------------
* Non-income producing
** Cost for Federal income tax purposes is $129,127,276 and net unrealized
appreciation consists of:
Gross unrealized appreciation $ 32,847,869
Gross unrealized depreciation $(12,148,369)
------------
Net unrealized appreciation $ 20,699,500
============
ADR - Security represented is held by the custodian bank in the form of American
Depository Receipt.
<PAGE>
MONUMENT INTERNET FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
April 30, 2000
(Unaudited)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
April 30, 2000 Unrealized
Contract Strike Number of Premium Market Value Appreciation
Issue Month Price Contracts received (Unaudited) (Depreciation)
----- ------- ----- --------- -------- ------------- ------------
CALL OPTION CONTRACTS
Ariba Inc., May-00 75.0 100 $ 119,371 $ 63,750 $ 55,621
Broadvision May-00 45.0 100 59,373 42,500 16,873
CMG Info Systems May-00 65.0 200 78,747 180,000 (101,253)
Double Click May-00 60.0 150 119,059 264,375 (145,316)
Entrust Techs Inc. May-00 45.0 200 103,747 175,000 (71,253)
Infospace May-00 60.0 100 120,171 160,000 (39,829)
Metromedia Fiber Net May-00 25.0 200 85,622 142,500 (56,878)
Real Networks May-00 42.5 100 60,873 62,500 (1,627)
S 1 Corporation May-00 50.0 426 344,124 410,025 (65,901)
Vitesse Semiconductor May-00 65.0 100 60,710 71,250 (10,540)
---------- --------- ---------
$1,151,797 $1,571,900 $(420,103)
========== ========== =========
April 30, 2000 Unrealized
Contract Strike Number of Premium Market Value Appreciation
Issue Month Price Contracts received (Unaudited) (Depreciation)
----- ------- ----- --------- -------- ------------- ------------
PUT OPTION CONTRACTS
Exodus Communication May-00 80.0 100 $ 119,371 $ 63,750 $ 55,621
JDS Uniphase Corp. May-00 65.0 100 50,623 3,750 46,873
Phone.com Inc. May-00 55.0 200 198,743 22,500 176,243
--------- --------- ---------
$ 368,737 $ 90,000 $ 278,737
========= ========= =========
</TABLE>
(a) A portion of this security is subject to call options written. See Note 6
See Notes to Financial Statements
<PAGE>
MONUMENT INTERNET FUND
Statement of Assets and Liabilities
April 30, 2000 (Unaudited)
ASSETS
Investments at value (identified
cost of $129,127,276)(Notes 1 & 3) $149,826,776
Capital stock sold 592,917
Securities sold 526,618
Interest receivable 89,174
Prepaid expenses 11,402
Other assets 11,355
------------
TOTAL ASSETS 151,058,242
------------
LIABILITIES
Options written at value (proceed
$1,520,534) $1,661,900
Investment management fees 99,020
12b-1 fees Class A shares 51,145
12b-1 fees Class B shares 19,664
Accrued expenses 68,385
----------
TOTAL LIABILITIES 1,900,114
------------
NET ASSETS $149,158,128
============
Class A Shares
Net assets (9,626,385 shares outstanding) $124,721,162
============
Net asset value and redemption price per share
($124,721,162/9,626,385 shares outstanding) $ 12.96
============
Offering price per share ($12.96 x 100/94.25) $ 13.75
============
Class B Shares
Net assets (1,896,689 shares outstanding) $ 24,436,966
============
Net asset value and offering price per Class B Share
($24,436,966/1,896,689 shares outstanding) $ 12.88
============
Redemption price per share ($12.88 x .95) $ 12.24
============
Net assets consist of:
Paid in capital $135,171,577
Accumulated undistributed net investment loss (1,406,362)
Accumulated undistributed realized
loss on investments and options (5,165,221)
Net unrealized appreciation on investments
and options 20,558,134
------------
Net Assets $149,158,128
============
See Notes to Financial Statements
<PAGE>
MONUMENT INTERNET FUND
Statement of Operations
Six months ended April 30, 2000 (Unaudited)
INVESTMENT INCOME
Interest $366,245
Dividends 5,276
--------
Total investment income $ 371,521
EXPENSES
Investment management fees 645,750
12b-1 fee - Class A shares 367,633
12b-1 fee - Class B shares 102,728
Recordkeeping and administrative services 167,448
Custodian and accounting fees 59,529
Registration fees 68,388
Transfer agent fees 187,589
Legal and audit fees 73,131
Shareholder servicing and reports 49,659
Miscellaneous 56,028
---------
Total expenses 1,777,883
-----------
Net investment (1,406,362)
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on investments and options (5,102,445)
Net change in unrealized appreciation
on investments and options 12,489,193
-----------
Net gain on investments and options 7,386,748
-----------
Net increase in net assets resulting from operations $ 5,980,386
===========
See Notes to Financial Statements
<PAGE>
MONUMENT INTERNET FUND
Statement of Changes in Net Assets
Six months ended
April 30, 2000 Period ended
(Unaudited) October 31, 1999
---------------- ----------------
OPERATIONS
Net investment loss $(1,406,362) $ (697,707)
Net realized loss on
investments and options (5,102,445) (39,686)
Net change in unrealized
appreciation of investments
and options 12,489,193 8,068,941
----------- ---------
Net increase in net assets
resulting from operations 5,980,386 7,331,548
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income ($- and
$- per share, respectively) -- --
Capital gains ($ .00265 and $-
per share, respectively) (23,090) --
CAPITAL SHARE TRANSACTIONS
Net increase in net assets
resulting from capital
share transactions** 77,903,644 57,965,640
----------- ----------
Net increase in net assets 83,860,940 65,297,188
Net assets at beginning of
period 65,297,188 --
----------- ----------
NET ASSETS at the end of period $149,158,128 $65,297,188
=========== ==========
**A summary of capital share transactions follows:
Six Months Ended
April 30, 2000 Period Ended
(Unaudited) October 31, 1999
----------------------- ----------------------
Class A Shares Shares Value Shares Value
-------------- ---------- ----------- --------- -----------
Shares sold 12,318,648 $126,548,167 2,793,649 $73,316,704
Shares reinvested from
distributions 1,346 19,942 -- --
Shares redeemed (4,819,799) (76,486,818) (667,459) (16,837,026)
---------- ----------- --------- -----------
Net increase 7,500,195 $ 50,081,291 2,126,190 $56,479,678
========== =========== ========= ===========
Class B Shares Shares Value Shares Value
-------------- ---------- ----------- --------- -----------
Shares sold 2,316,945 $35,285,485 51,834 $1,485,962
Shares reinvested from
distributions 115 1,706 -- --
Shares redeemed (472,205) (7,464,838) -- --
---------- ----------- --------- -----------
Net increase 1,844,855 $27,822,353 1,834 $1,485,962
========== =========== ========= ===========
*Commencement of operations November 16, 1998 for A shares and October 6, 1999
for B shares.
See Notes to Financial Statements
<PAGE>
MONUMENT INTERNET FUND
Financial Highlights
For a Share Outstanding Throughout The Period
<TABLE>
<S> <C> <C> <C> <C>
Class A Share Class B Share
----------------------------------- -----------------------------------
Six Months Ended Period Ended Six Months Ended Period Ended
April 30, 2000 October 31, April 30, 2000 October 31,
(Unaudited) 1999* (Unaudited) 1999*
--------------- ------------ ---------------- -------------
Per Share Operating
Performance
Net asset value,
beginning of period $9.99(a) $10.00 $9.98(a) $27.09
------ ------ ------ ------
Income from investment
operations-
Net investment loss (0.20) (0.58) (0.09) (0.06)
Net realized and unrealized
gain on investments 3.17 20.56 2.99 2.92
------ ------ ------ ------
Distributions from net
investment income -- -- -- --
Distributions from realized
gains on investments -- -- -- --
------ ------ ------ ------
Total distributions -- -- -- --
------ ------ ------ ------
Total from investment
operations 2.97 19.98 2.90 2.86
------ ------ ------ ------
Net asset value, end
of period $12.96 $29.98 $12.88 $29.95
====== ====== ====== ======
Total Return 29.76%*** 185.53%*** 29.08%*** 10.55%***
Ratios/Supplemental Data
Net assets, end of period
(000's) $124,721 $63,745 $24,437 $1,552
Ratio to average net assets
Expenses 2.06%** 2.76%** 2.56%** 2.40%**
Expenses including soft
dollars 2.14%** 2.84%** 2.64%** 2.40%**
Net investment loss (1.72%)** (2.45%)** (1.18%)** (3.23%)**
Portfolio turnover rate 58.49%*** 112.00%*** 58.49%*** 112.00%***
</TABLE>
-------------
*Commencement of operations November 16, 1998 for A shares and October 6,
1999 for B shares.
** Annualized
***Not annualized
(a)Net asset values, beginning of period, have been restated to reflect a 3 for
1 stock split to shareholders of record October 29, 1999,
payable November 1, 1999.
Average shares method used to calculate the financial highlights for Class A and
B shares.
See Notes to Financial Statements
<PAGE>
Monument Internet Fund
Notes to Financial Statements (Unaudited)
Note 1-SIGNIFICANT ACCOUNTING POLICIES- Monument Internet Fund (the
"Internet Fund") is a series of Monument Series Fund, Inc. ("MSF")
which is registered under the Investment Company Act of 1940, as
amended, as a non-diversified open-end management company. The Fund was
established on November 16, 1998 as a series of MSF which has allocated
750,000,000 shares of its 2,000,000,000 shares of $.001 par value common
stock. Prior to October 5, 1999, the fund added Class B shares which
have a contingent deferred sales charge ("CDSC"). Each class is also
subject to different 12b-1 Plan expenses.
The following is a summary of significant accounting policies followed by
the Internet Fund. The policies are in conformity with generally accepted
accounting principles.
A. Use of Estimates- The process of preparing financial statements in
conformity with generally accepted accounting principles require
management to make estimates and assumptions that affect the reported
amount of assets and liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements, as well as the
reported amounts of revenue and expenses during the reporting period.
Actual results could differ from these estimates.
B. Investment Valuation- Equity securities listed on an established
securities exchange or on the NASDAQ National Market System are valued at
their last sale price on the exchange where primarily traded or, if there
is no reported sale, at the mean between the closing bid and asked price
on that day. Over-the-counter portfolio securities are valued at the mean
between the last bid and asked prices based upon quotes furnished by
market markers for such securities. Exchange listed convertible debt
securities are valued at the mean between the last bid and asked prices
obtained from broker-dealers or a comparable alternative, such as
Bloomberg or Telerate.
Other securities for which market quotes are readily available are valued
at the current market price, which may be obtained from a pricing service.
Securities and other assets for which market prices are not readily
available are valued at fair value as determined following procedures
approved by the Board of Directors.
<PAGE>
C. Investment Transactions- All securities are recorded on a trade date
basis. Dividend income is recorded on the ex-dividend date and interest
income is recorded on the accrual basis. Realized gains and losses on
sales of securities are determined on the basis of identified cost.
D. Federal Income Taxes- The Internet Fund is treated as a separate entity
for Federal tax purposes. The Internet Fund intends to qualify each year
as a regulated investment company under Subchapter M of the Internal
Revenue Code, as amended. By so qualifying, the Internet Fund will not be
subject to Federal income taxes to the extent that it distributes all
taxable income, including realized capital gains. In addition, by
distributing during each calendar year substantially all net investment
income, capital gains and certain other amounts, if any, the Internet Fund
will not be subject to a Federal income excise tax.
E. Dividends and Distributions to Shareholders- The Internet Fund intends
to pay an annual dividend to shareholders of record representing its
entire net investment income and to distribute all of its realized net
capital gains at least annually. Distributions are recorded on the
ex-dividend date. Income distributions and capital gains distributions are
determined in accordance with Federal income tax regulations, which may
differ from generally accepted accounting principles.
Note 2-INVESTMENT MANAGEMENT AND DISTRIBUTION AGREEMENTS- Monument
Advisors, Ltd. ("Monument Advisors"), a wholly-owned subsidiary of the
Monument Group, Inc. has been retained under an Investment Advisory
Agreement (the "Advisory Agreement") to supervise the management and the
investment program of the Internet Fund. As full compensation for its
services under the Agreement, the Internet Fund will pay the Advisor a
monthly fee, equal to an annualized rate of 1.00% of the monthly average
net assets through $50 million in net assets; 0.75% of the monthly average
net assets greater than $50 million through $100 million in net assets;
and 0.625% of the average monthly net assets exceeding $100 million in net
assets.
<PAGE>
The Internet Fund has adopted a plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended, whereby the Internet Fund or
Monument Distributors, Inc. ("Monument Distributors") may finance
activities which are primarily intended to result in the sale of the
Internet Fund's shares, including, but not limited to, advertising,
printing of prospectuses and reports for other than existing shareholders,
preparation and distribution of advertising materials and sales
literature, and payments to dealers and shareholders servicing agents who
enter into agreements with the Internet Fund or Monument Distributors. The
Internet Fund may incur such distribution expenses at the rate of 0.50%
for its Class A Shares and 1.00% for its Class B Shares per annum on each
class's average net assets. For the six months ended April 30, 2000 the
Internet Fund paid $367,633 for its Class A Shares and $102,728 for its
Class B Shares for such expenses.
Note 3--SOFT DOLLAR ARRANGEMENTS- In January 1999, Monument Advisors entered
into a soft dollar arrangement with a broker-dealer who makes a market in
many of the securities in the Fund's portfolio. Under this arrangement,
Monument Advisors received equipment, conferencing, and trade journals.
For the six months ended April 30, 2000, the value of these arrangements
was $81,627.
Note 4--STOCK SPLIT- The Fund effected a three-to-one stock split for
shareholders of record on October 29, 1999, payable November 1, 1999.
Note 5--INVESTMENTS- Purchases and sales of securities for the Internet Fund,
other than short-term investments aggregated $130,580,046 and $83,098,503
respectively.
Note 6--OPEN COVERED CALL/PUT OPTIONS WRITTEN As of April 30, 2000, portfolio
securities valued at $10,655,588 were pledged by the custodian as cover
for call options written by the Fund. Cash in the amount of $5,000,000 has
been pledged as cover for put options written by the Fund.
Transactions in call options written during the six months ended April 30,
2000 are summarized as follows:
Option Contracts
---------------------
Number of Premiums
Contracts Received
--------- ----------
Beginning of Period 0 $ 0
Written 2,051 1,440,698
Closed (25) (35,780)
Exercised 0 0
Expired (350) (253,121)
------- ----------
End of Period 1,676 $1,151,797
Transactions in put options written during the six months ended April 30,
2000 are summarized as follows:
Option Contracts
---------------------
Number of Premiums
Contracts Received
--------- ----------
Beginning of Period 0 $ 0
Written 1,115 694,914
Closed 0 0
Exercised (405) (238,936)
Expired (310) (87,241)
------ ----------
End of Period 400 $368,737
====== ==========
<PAGE>
MONUMENT MEDICAL SCIENCES FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
April 30, 2000 (Unaudited)
Number Market
of Shares Security Description Value
--------- -------------------- ----------
Common Stock: 70.0%
Biologics: 32.0%
8,000 Alexion Pharmaceutical Inc.* $ 357,000
4,000 Alkermes Inc.* 213,000
20,000 Amgen Inc.* 1,120,000
17,000 Biochem Pharma Inc.* 391,000
8,100 Biogen Inc.* 476,380
22,500 Biomarin Pharmaceutical Inc.* 400,780
22,000 Chiron Corp.* 995,500
13,500 COR Therapeutics Inc.* 1,028,530
5,500 Genentech, Inc.* 643,500
17,000 Genzyme Corp.* 829,813
7,500 Gilead Sciences Inc.* 406,406
6,300 IDEC Pharmaceticals Corp.* 403,200
19,500 Immunex Corp.* 767,813
8,800 Inhale Therapeutic Sys Inc.* 544,500
5,000 Medimmune Inc.* 799,688
17,000 QLT Phototherapeutics Inc.* 944,563
14,000 Vertex Pharmaceticals Inc.* 731,500
-----------
11,053,173
-----------
Diagnostics: 5.3%
8,000 Agilient Tech* 709,000
10,000 Invitrogen Corp.* 623,750
8,000 PE Corp. PE Bio 480,000
-----------
1,812,750
-----------
Genetics: 5.6%
4,000 Human Genome Sciences Inc.* 306,250
5,500 Incyte Pharmaceuticals Inc.* 423,500
15,000 Millennium Pharmaceuticals* 1,190,625
-----------
1,920,375
-----------
Medical Devices: 5.0%
10,500 Guidant Corp.* 602,438
15,000 Medtronic Inc. 779,063
10,800 St Jude Medical Inc.* 336,825
-----------
1,718,326
-----------
Medical Information Sys 0.6%
7,000 Medical Manager Corporation* 224,000
-----------
Pharmaceuticals: 21.5%
10,000 Abbott Laboratories 384,375
8,000 Astrazeneca PLC ADR 337,000
11,000 Aventis ADR 618,750
12,000 Celgene Corp.* 564,750
12,000 Elan Corp PLC ADR* 514,500
26,000 Geltex Pharmaceutical* 414,375
5,300 Glaxo Wellcome PLC ADR 332,906
8,000 Lilly (Eli) & Co. 618,500
8,000 Merck & Co., Inc. 556,000
11,500 Pfizer Inc. 484,438
10,000 Pharmacopia, Inc.* 411,250
12,000 Sepracor Inc.* 1,104,000
15,000 Schering Plough 604,688
14,000 Supergen Inc.* 463,750
-----------
7,409,282
-----------
Total Common Stock:
(Cost:$25,012,026) 24,137,906
-----------
Principal
---------
Short-term Investments: 29.1%
10,057,847 Star Treasury Fund
(Cost:$10,057,847) 10,057,847
-----------
Total Investments:
(Cost:$35,069,873)** 99.1% $34,195,753
Other assets, net 0.9% 309,497
----- -----------
Net Assets 100.0% $34,505,250
===== ===========
* Non-income producing
** Cost for Federal income tax purposes is $35,069,873 and net
unrealized depreciation consists of:
Gross unrealized appreciation $3,270,704
Gross unrealized depreciation (4,144,824)
----------
Net unrealized depreciation $ (874,120)
==========
ADR - Security represented is held by the custodian bank in the form of American
Depository Receipt.
See Notes to Financial Statements
<PAGE>
MONUMENT MEDICAL SCIENCES FUND
Statement of Assets and Liabilities
April 30, 2000 (Unaudited)
ASSETS
Investments at value (identified
cost of $35,069,873)(Notes 1 & 3) $34,195,753
Securities sold 267,381
Interest receivable 35,323
Dividends receivable 5,806
Prepaid expenses 4,424
Deferred organization costs (Note 1) 48,269
-----------
TOTAL ASSETS 34,556,956
-----------
LIABILITIES
Investment management fees (Note 8,038
12b-1 fees - Class B Shares (Note 10,339
Accrued expenses 33,329
------
TOTAL LIABILITIES 51,706
-----------
NET ASSETS $34,505,250
===========
Class A Shares
Net assets (863,212 shares outstanding) $21,948,620
===========
Net asset value and redemption price per
Class A Share
($21,948,620/863,212 shares outstanding) $ 25.43
===========
Offering price per share ($25.43 x 100/94.25) $ 26.98
===========
Class B Shares
Net assets (495,681 shares outstanding) $12,556,630
===========
Net asset value and offering price per
Class B Share
($12,556,630/495,681 shares outstanding) $ 25.33
===========
Redemption price per share ($25.33 x .95) $ 24.07
===========
Net assets consist of:
Paid in capital $38,215,074
Accumulated net investment loss (94,556)
Accumulated undistributed realized
loss on investments and options (2,741,148)
Net unrealized depreciation on investments (874,120)
-----------
Net Assets $34,505,250
===========
See Notes to Financial Statements
<PAGE>
MONUMENT MEDICAL SCIENCES FUND
Statement of Operations
Six Months Ended April 30, 2000(Unaudited)
INVESTMENT INCOME
Dividends $ 15,748
Interest 92,908
----------
Total investment income $ 108,656
EXPENSES
Investment management fees (Note 2) 94,708
12b-1 fee - Class A (Note 2) 30,896
12b-1 fee - Class B (Note 2) 33,879
Recordkeeping and administrative services 18,942
Custodian and accounting fees 25,738
Registration fees 26,919
Transfer agent fees 28,971
Legal and audit fees 3,697
Organization cost amortization 8,965
Shareholder servicing and reports 6,127
Miscellaneous 3,681
----------
Total expenses 282,523
Reimbursed expenses and waived fees (Note 2) (85,112)
-----------
Expenses, net 197,411
-----------
Net investment loss (88,755)
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND OPTIONS
Net realized loss on investments and options (2,738,360)
Net change in unrealized depreciation on
investments (973,315)
-----------
Net loss on investments and options (3,711,675)
-----------
Net decrease in net assets resulting from operations $(3,800,430)
===========
See Notes to Financial Statements
<PAGE>
MONUMENT MEDICAL SCIENCES FUND
Statement of Changes in Net Assets
Six months ended
April 30, 2000 Period ended
(Unaudited) October 31, 1999*
---------------- ----------------
OPERATIONS
Net investment loss $ (88,755) $ (5,985)
Net realized gain (loss)
on investments and options (2,738,360) 79,912
Net change in unrealized
appreciation (depreciation)
of investments (973,315) 95,953
----------- ---------
Net increase (decrease) in
net assets resulting from
operations (3,800,430) 169,880
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income ($.0036
and $- per share, respectively) (583) --
Capital gains ($ .43 and $- per
share, respectively) (68,831) --
CAPITAL SHARE TRANSACTIONS
Net increase in net assets
resulting from capital share
transactions** 36,949,561 1,041,204
----------- ---------
Net increase in net assets 33,079,717 1,211,084
Net assets at beginning
of period 1,425,533 214,449
----------- ---------
NET ASSETS at the end of
the period $34,505,250 $1,425,533
=========== ==========
**A summary of capital share transactions follows:
Six Months Ended
April 30, 2000 Period Ended
(Unaudited) October 31, 1999
----------------------- ----------------------
Class A Shares Shares Value Shares Value
-------------- ---------- ----------- --------- -----------
Shares sold 996,761 $28,748,854 77,108 $ 1,181,978
Shares reinvested from
dividends 3,021 52,168 -- --
Shares redeemed (223,490) (6,084,712) (10,972) (166,535)
---------- ----------- --------- -----------
Net increase 776,292 $22,716,310 66,136 $ 1,015,443
========== =========== ========= ===========
Class A Shares Shares Value Shares Value
-------------- ---------- ----------- --------- -----------
Shares sold 617,169 $17,705,966 1,554 $ 25,761
Shares reinvested from
dividends 904 15,601 -- --
Shares redeemed (123,946) (3,488,316) -- --
---------- ----------- --------- -----------
Net increase 494,127 $14,233,251 1,554 $ 25,761
========== =========== ========= ===========
* Commencement of operations January 6, 1998 for Class A shares and October
12,1999 for Class B shares.
See Notes to Financial Statements
<PAGE>
MONUMENT MEDICAL SCIENCES FUND
Financial Highlights
For a Share Outstanding Throughout The Period
<TABLE>
<S> <C> <C> <C> <C> <C>
Class A Share Class B Share
-------------------------------------------------- -----------------------------------
Six Months Ended Period Ended Period Ended Six Months Ended Period Ended
April 30, 2000 October 31, October 31, April 30, 2000 October 31,
(Unaudited) 1999 1998* (Unaudited) 1999*
--------------- ------------ ------------ ---------------- -------------
Per Share Operating
Performance
Net asset value,
beginning of period $16.11 $10.32 $10.00 $16.11 $16.95
------ ------ ------ ------ ------
Income from investment
operations-
Net investment income (loss) -- (0.10) 0.04 (0.08) (0.01)
Net realized and unrealized
gain (loss) on investments 9.75 5.89 0.28 9.73 (0.83)
------ ------ ------ ------ ------
Total from investment
operations 9.75 5.79 0.32 9.65 (0.84)
------ ------ ------ ------ ------
Distributions from net
invest income -- -- -- -- --
Distributions from realized
gains on investments (0.43) -- -- (0.43) --
------ ------ ------ ------ ------
Total distributions (0.43) -- -- (0.43) --
------ ------ ------ ------ ------
Net asset value, end of period $25.43 $16.11 $10.32 $25.33 $16.11
====== ====== ====== ====== ======
Total Return 61.77%*** 56.11% 3.20%*** 61.13%*** (4.98%)***
Ratios/Supplemental Data
Net assets, end of period (000s) $21,949 $1,401 $ 214 $12,557 $ 25
Ratio to average net assets-
Expenses 2.80%** 16.73% 51.07%** 3.30%** 17.43%**
Expenses including soft dollars 2.88%** 16.81% 0.00% 3.38%** 17.43%**
Expenses-net 1.90%** 1.87% 0.00% 2.40%** 2.40%**
Net investment income (loss) (0.80%)** (1.00%) 0.66%** (1.16%)** (1.51%)**
Portfolio turnover rate 46.96%*** 61.00% 82.00% 46.96%*** 61.00%***
</TABLE>
* Commencement of operations January 6, 1998 for Class A shares and October
12,1999 for Class B shares.
** Annualized
***Not annualized
Average shares method used to calculate the finnacial highlights for Class B
shares.
See Notes to Financial Statements
<PAGE>
Monument Medical Sciences Fund
Notes to Financial Statements
Note 1-SIGNIFICANT ACCOUNTING POLICIES- Monument Medical Sciences Fund (the
"Medical Sciences Fund") (formerly the Monument Washington Regional
Growth Fund) is a series of Monument Series Fund, Inc. ("MSF") which is
registered under the Investment Company Act of 1940, as amended, as a
non-diversified open-end management company. The Medical Sciences Fund
was established on January 6, 1998 as a series of MSF which has
allocated 300,000,000 shares of its 2,000,000,000 shares of $.001 par
value common stock. Prior to October 9, 1999, the fund added Class B
shares which have a contingent deferred sales charge ("CDSC"). Each
class is also subject to different 12b-1 Plan expenses.
The following is a summary of significant accounting policies followed by
the Medical Sciences Fund. The policies are in conformity with generally
accepted accounting principles.
A. Use of Estimates- The process of preparing financial statements in
conformity with generally accepted accounting principles require
management to make estimates and assumptions that affect the reported
amount of assets and liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements, as well as the
reported amounts of revenue and expenses during the reporting period.
Actual results could differ from these estimates.
B. Investment Valuation- Equity securities listed on an established
securities exchange or on the NASDAQ National Market System are valued at
their last sale price on the exchange where primarily traded or, if there
is no reported sale, at the mean between the closing bid and asked price
on that day. Over-the-counter portfolio securities are valued at the mean
between the last bid and asked prices based upon quotes furnished by
market markers for such securities. Exchange listed convertible debt
securities are valued at the mean between the last bid and asked prices
obtained from broker-dealers or a comparable alternative, such as
Bloomberg or Telerate.
Other securities for which market quotes are readily available are valued
at the current market price, which may be obtained from a pricing service.
Securities and other assets for which market prices are not readily
available are valued at fair value as determined following procedures
approved by the Board of Directors.
<PAGE>
C. Investment Transactions- All securities are recorded on a trade date
basis. Dividend income is recorded on the ex-dividend date and interest
income is recorded on the accrual basis. Realized gains and losses on
sales of securities are determined on the basis of identified cost.
D. Organization Expenses- All expenses incurred in connection with the
organization and initial registration have been assumed by the series of
MSF. The organizational expenses allocable to the Medical Sciences Fund
are being amortized over a period of sixty months from the date it
commenced investment operations. The Medical Sciences Fund has agreed with
the Investment Advisor that if any of the initial shares are redeemed
during the amortization period, the Medical Sciences Fund will reduce the
redemption proceeds for the then unamortized organizational expenses in
the same ratio as the number of redeemed shares bears to the number of
initial shares at the time of such redemption.
E. Federal Income Taxes- The Medical Sciences Fund is treated as a
separate entity for Federal tax purposes. The Medical Sciences Fund
intends to qualify each year as a regulated investment company under
Subchapter M of the Internal Revenue Code, as amended. By so qualifying,
the Medical Sciences Fund will not be subject to Federal income taxes to
the extent that it distributes all taxable income, including realized
capital gains. In addition, by distributing during each calendar year
substantially all net investment income, capital gains and certain other
amounts, if any, the Medical Sciences Fund will not be subject to a
Federal income excise tax.
F. Dividends and Distributions to Shareholders- The Medical Sciences Fund
intends to pay an annual dividend to shareholders of record representing
its entire net investment income and to distribute all of its realized net
capital gains at least annually. Distributions are recorded on the
ex-dividend date. Income distributions and capital gains distributions are
determined in accordance with Federal income tax regulations, which may
differ from generally accepted accounting principles.
Note 2-INVESTMENT MANAGEMENT AND DISTRIBUTION AGREEMENTS- Monument
Advisors, Ltd. ("Monument Advisors"), a wholly-owned subsidiary of the
Monument Group, Inc. has been retained under an Investment Advisory
Agreement (the "Advisory Agreement") to supervise the management and the
investment program of the Medical Sciences Fund. As full compensation for
its services under the Agreement, the Medical Sciences Fund will pay the
Advisor a monthly fee, equal to an annualized rate of 1.00% of the monthly
average net assets through $50 million in net assets; 0.75% of the monthly
average net assets greater than $50 million through $100 million in net
assets; and 0.625% of the average monthly net assets exceeding $100
million in net assets.
<PAGE>
The Medical Sciences Fund has adopted a plan pursuant to Rule 12b-1 under
the Investment Company Act of 1940, as amended, whereby the Medical
Sciences Fund or Monument Distributors, Inc. ("Monument Distributors") may
finance activities which are primarily intended to result in the sale of
the Medical Sciences Fund's shares, including, but not limited to,
advertising, printing of prospectuses and reports for other than existing
shareholders, preparation and distribution of advertising materials and
sales literature, and payments to dealers and shareholders servicing
agents who enter into agreements with the Medical Sciences Fund or
Monument Distributors. The Medical Sciences Fund may incur such
distribution expenses at the rate of 0.50% for its Class A Shares and
1.00% for its Class B Shares per annum on each class's average net assets.
For the six months ended April 30, 2000, the Medical Sciences Fund paid
$30,896 for its Class A Shares and $33,879 for its Class B Shares for such
expenses.
Monument Advisors has contractually agreed to waive its fees and to pay
expenses to the extent necessary to cap Class A Share total operating
expenses at 1.90%, and Class B Share total operating expenses at 2.40% of
the Medical Sciences Fund's average daily net assets until May 1, 2001.
For the six months ended April 30, 2000, waived fees and expense
reimbursements were $85,112.
Note 3--SOFT DOLLAR ARRANGEMENTS- In January 1999, Monument Advisors entered
into a soft dollar arrangement with a broker-dealer who makes a market in
many of the securities in the Fund's portfolio. Under this arrangement,
Monument received equipment, conferencing, and trade journals. For the six
months ended April 30, 2000, the value of these arrangements was $81,627.
.
Note 4-INVESTMENTS- Purchases and sales of securities for the Medical
Sciences Fund, other
than short-term investments aggregated $33,870,616 and $6,938,697,
respectively.
Note 5--PUT OPTIONS WRITTEN
Transactions in put options written during the six months ended April 30,
2000 are summarized as follows:
Option Contracts
---------------------
Number of Premiums
Contracts Received
--------- ----------
Beginning of Period 0 $ 0
Written 325 243,888
Closed 0 0
Exercised (200) (185,458)
Expired (125) (58,430)
---- --------
End of Period 0 $ 0
==== ========
<PAGE>
MONUMENT TELECOMMUNICATIONS FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
April 30, 2000 (Unaudited)
Number Market
of Shares Security Description Value
--------- -------------------- ----------
Common Stock: 94.3%
Carriers-Land-Based: 24.1%
9,000 AT&T Corp $ 420,187
16,000 Broadwing Inc.* 453,000
23,000 Charter Communications, Inc.* 337,812
30,000 Hellenic Telecommunications Org. ADR* 350,625
15,000 IBasis Inc.* 339,375
9,000 MPower Communications* 441,000
11,000 Primus Telecommunications Group.* 360,937
6,500 Qwest Communications Intl.* 281,937
20,000 SBC Communications Inc. 876,250
4,000 Telefonos De Mexico SA ADR 235,250
5,000 US West Inc. 355,937
9,500 Williams Communications Group, Inc.* 351,500
19,000 Worldcom, Inc.* 863,312
-----------
5,667,122
-----------
Carriers-Wireless: 9.2%
8,000 AT&T Wireless Group* 254,500
2,100 China Telecom (Hong Kong) Ltd.ADR* 308,043
7,000 Teligent, Inc.* 262,500
8,500 Vodafone Airtouch PLC ADR 399,500
3,500 VoiceStream Wireless Corp.* 346,500
12,000 Western Wireless Corp.* 596,250
-----------
2,167,293
-----------
Equipment-Wireline: 37.3%
13,000 ADC Telecommunications, Inc.* 789,750
14,000 Brooktrout Inc.* 378,000
9,500 Carrier Access Corp* 414,438
4,500 Ciena Corp.* 556,313
10,000 Cisco Systems, Inc.* 693,281
12,000 Com21, Inc.* 336,000
4,700 Copper Mountain Networks, Inc.* 391,863
11,000 ECI Telecom Ltd. 305,938
4,000 Efficient Networks, Inc.* 263,000
5,500 JDS Uniphase Corp* 570,625
7,000 Kemet Corp.* 521,500
5,000 Lucent Technologies, Inc. 310,938
19,000 Metalink Ltd* 542,688
7,500 Nortel Networks Corp. 849,375
3,600 PMC-Sierra, Inc.*(a) 690,750
7,000 Scientific-Atlanta, Inc. 455,438
27,000 Somera Communications, Inc.* 261,563
8,500 Tellabs, Inc.* 465,906
-----------
8,797,366
-----------
Equipment-Wireless: 11.3%
11,000 Adaptive Broadband Corp.* 357,500
6,000 Alpha Industries, Inc.*(a) 312,000
12,800 Nokia Oyj ADR "A" 728,000
4,500 Phone.com Inc.* 378,000
2,500 Powerwave Technologies, Inc. * 520,156
3,500 Qualcomm Inc.* 379,531
-----------
2,675,187
-----------
Equipment-Services&Software: 6.9%
7,000 724 Solutions, Inc.* 353,500
6,500 Interwoven, Inc.* 450,125
5,000 Micromuse Inc.* 490,625
8,500 Visual Networks, Inc.* 331,500
-----------
1,625,750
-----------
Data Services: 5.5%
20,000 CAIS Internet, Inc.* 265,000
5,000 Exodus Communications, Inc.* 442,188
16,000 PSINet, Inc.* 371,000
11,000 Rhythms Netconnections, Inc.* 227,563
-----------
1,305,751
-----------
Total Common Stock
(Cost: $22,829,174) 22,238,469
-----------
Principal
---------
Short-term Investments: 6.3%
1,484,417 Star Treasury Fund
(Cost: $1,484,417) $ 1,484,417
-----------
Total Investments:
(Cost: $24,313,591)** 100.6% $23,722,886
Other assets, net -0.6% (141,509)
----- -----------
Net Assets 100.0% $23,581,377
===== ===========
* Non-income producing
**Cost for Federal income tax purposes is $24,313,591 and net unrealized
depreciation consists of:
Gross unrealized appreciation $2,758,483
Gross unrealized depreciation (3,349,188)
----------
Net unrealized depreciation $ (590,705)
==========
ADR - Security represented is held by the custodian bank in the form of American
Depository Receipt.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
April 30, 2000 Unrealized
Contract Strike Number of Premium Market Value Appreciation
Issue Month Price Contracts received (Unaudited) (Depreciation)
----- ------- ----- --------- -------- ------------- ------------
CALL OPTION CONTRACTS
Alpha Inds Inc May-00 37.5 50 $24,843 $ 2,188 $22,655
PMC Sierra May-00 200.0 20 13,875 30,000 (16,125)
------- ------- -------
$38,718 $32,188 $ 6,530
======= ======= =======
</TABLE>
(a) A portion of this security is subject to call options written. See Note 5.
See Notes to Financial Statements
<PAGE>
MONUMENT TELECOMMUNICATIONS FUND
Statement of Assets and Liabilities
April 30, 2000 (Unaudited)
ASSETS
Investments at value (identified cost of $24,313,591)
(Notes 1 & 3) $23,722,886
Capital stock sold 211,785
Securities sold 240,617
Interest receivable 7,607
Dividends receivable 10,633
Due from manager 8,334
Prepaid expenses 6,897
Deferred organization costs (Note 1) 48,269
Other assets 916
-----------
TOTAL ASSETS 24,257,944
-----------
LIABILITIES
Securities purchased $610,740
Options written at value (proceeds $38,718) 32,188
12b-1 fees - Class B shares (Note 7,379
Accrued expenses 26,260
--------
TOTAL LIABILITIES 676,567
-----------
NET ASSETS $23,581,377
===========
Class A Shares
Net assets (522,393 shares outstanding) $14,227,410
===========
Net asset value and redemption price per
Class A Share
($14,227,410 /522,393 shares outstanding) $ 27.24
===========
Offering price per share ($27.24 x 100/94.25) $ 28.90
===========
Class B Shares
Net assets (345,132 shares outstanding) $ 9,353,967
===========
Net asset value and offering price per
Class B Share
($9,353,967/345,132 shares outstanding) $ 27.10
===========
Redemption price per share ($27.10 x .95) $ 25.75
===========
Net assets consist of:
Paid in capital $24,976,033
Accumulated net investment loss (77,552)
Accumulated undistributed realized
loss on investments and options (732,929)
Net unrealized depreciation on investments and (584,175)
-----------
Net Assets $23,581,377
===========
See Notes to Financial Statements
<PAGE>
MONUMENT TELECOMMUNICATIONS FUND
Statement of Operations
Six months ended April 30, 2000 (Unaudited)
INVESTMENT INCOME
Dividends $15,017
Interest 29,769
-------
Total investment income $ 44,786
EXPENSES
Investment management fees (Note 2) 57,288
12b-1 fee - Class A (Note 2) 19,350
12b-1 fee - Class B (Note 2) 19,288
Recordkeeping and administrative services 11,458
Custodian and accounting fees 27,094
Registration fees 22,276
Transfer agent fees 20,530
Legal and audit fees 1,777
Organization cost amortization 8,965
Shareholder servicing and reports 4,186
Miscellaneous 4,881
-------
Total expenses 197,093
Reimbursed expenses and waived fees (Note 2) (78,272)
-----------
Expenses, net 118,821
-----------
Net investment loss (74,035)
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND OPTIONS
Net realized loss on investments and options (724,273)
Net change in unrealized depreciation on
investments and options (670,520)
-----------
Net loss on investments (1,394,793)
-----------
Net decrease in net assets resulting from operations $(1,468,828)
===========
See Notes to Financial Statements
<PAGE>
MONUMENT TELECOMMUNICATIONS FUND
Statement of Changes in Net Assets
Six months ended
April 30, 2000 Period ended
(Unaudited) October 31, 1999*
---------------- ----------------
OPERATIONS
Net investment loss $ (74,035) $ (3,692)
Net realized gain (loss) on
investments and options (724,273) 118,345
Net change in unrealized
depreciation of investments
and options (670,520) 81,187
----------- -----------
Net increase (decrease) in net
assets resulting from operations (1,468,828) 195,840
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income ($.004 and
$- per share, respectively) (413) --
Capital gains ($1.45 and $- per
share, respectively) (118,344) --
CAPITAL SHARE TRANSACTIONS
Net increase in net assets
resulting from capital share
transactions** 24,510,757 281,206
----------- -----------
Net increase in net assets 22,923,172 477,046
Net assets at beginning of period 658,205 181,159
----------- -----------
NET ASSETS at the end of the period $23,581.377 $ 658,205
=========== ===========
--------------
**A summary of capital share transactions follows:
Six Months Ended
April 30, 2000 Period Ended
(Unaudited) October 31, 1999
----------------------- ----------------------
Class A Shares Shares Value Shares Value
-------------- ---------- ----------- --------- -----------
Shares sold 562,793 $16,323,313 29,967 $ 461,054
Shares reinvested from
dividends 3,853 90,015 -- --
Shares redeemed (73,966) (2,208,396) (17,064) (238,058)
------- ----------- ------ ---------
Net increase 492,680 $14,204,932 12,903 $ 222,996
======= =========== ====== =========
Class B Shares Shares Value Shares Value
-------------- ---------- ----------- --------- -----------
Shares sold 357,539 $10,775,171 3,247 $ 58,210
Shares reinvested from
dividends 1,110 25,901 -- --
Shares redeemed (16,764) (495,247) -- --
------- ----------- ------ ----------
Net increase 341,885 $10,305,825 3,247 $ 58,210
======= =========== ====== ==========
* Commencement of operations January 6, 1998 for Class A shares and October 9,
1999 for Class B shares.
See Notes to Financial Statements
<PAGE>
MONUMENT TELECOMMUNICATIONS FUND
Financial Highlights
For a Share Outstanding Throughout The Period
<TABLE>
<S> <C> <C> <C> <C> <C>
Class A Share Class B Share
-------------------------------------------------- -----------------------------------
Six Months Ended Period Ended Period Ended Six Months Ended Period Ended
April 30, 2000 October 31, October 31, April 30, 2000 October 31,
(Unaudited) 1999 1998* (Unaudited) 1999*
--------------- ------------ ------------ ---------------- -------------
Per Share Operating
Performance
Net asset value,
beginning of period $ 19.97 $ 10.78 $ 10.00 $ 19.97 $ 17.65
------- ------- ------- ------- -------
Income from investment
operations-
Net investment income (loss) 0.02 (0.14) 0.04 (0.06) (0.02)
Net realized and unrealized
gain on investments 8.40 9.33 0.74 8.34 2.34
------- ------- ------- ------- -------
Total from investment
operations 8.42 9.19 0.78 8.28 2.32
------- ------- ------- ------- -------
Distributions from net
investment income -- -- -- -- --
Distributions from realized
gains on investments (1.15) -- -- (1.15) --
------- ------- ------- ------- -------
Total distributions (1.15) -- -- (1.15) --
------- ------- ------- ------- -------
Net asset value, end of period $ 27.24 $ 19.97 $ 10.78 $ 27.10 $ 19.97
======= ======= ======= ======= =======
Total Return 43.12%*** 85.24% 7.80%*** 42.39%*** 13.17%***
Ratios/Supplemental Data
Net assets, end of period (000's) $14,227 $ 593 $ 181 $ 9,354 $ 65
Ratio to average net assets-
Expenses 3.26%** 37.06% 58.25%** 3.76%** 37.15%**
Expenses including soft dollars 3.35%** 37.15% 58.25%** 3.85%** 37.15%**
Expenses-net 1.90%** 1.84% 0.00% 2.40%** 2.40%**
Net investment income (loss) (1.11%)** (1.40%) 0.70%** (1.66%)** (1.95%)**
Portfolio turnover rate 24.96%*** 250.00% 88.00%*** 24.96%*** 250.00%***
</TABLE>
-------------------------
* Commencement of operations January 6, 1998 for Class A shares and October 9,
1999 for Class B shares.
** Annualized
***Not annualized
Average shares method used to calculate the financial highlights for Class B
shares.
See Notes to Financial Statements
<PAGE>
Monument Telecommunications Fund
Notes to Financial Statements (Unaudited)
Note 1-SIGNIFICANT ACCOUNTING POLICIES- Monument Telecommunications Fund (the
"Telecommunications Fund") (formerly the Monument Washington Regional
Aggressive Growth Fund) is a series of Monument Series Fund, Inc. ("MSF")
which is registered under the Investment Company Act of 1940, as amended,
as a non-diversified open-end management company. The Telecommunications
Fund was established on January 6, 1998 as a series of MSF which has
allocated 300,000,000 shares of its 2,000,000,000 shares of $.001 par
value common stock. Prior to October 5, 1999, the fund added Class B
shares which have a contingent deferred sales charge ("CDSC"). Each class
is also subject to different 12b-1 Plan expenses.
The following is a summary of significant accounting policies followed by
the Telecommunications Fund. The policies are in conformity with generally
accepted accounting principles.
A. Use of Estimates- The process of preparing financial statements in
conformity with generally accepted accounting principles require
management to make estimates and assumptions that affect the reported
amount of assets and liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements, as well as the
reported amounts of revenue and expenses during the reporting period.
Actual results could differ from these estimates.
B. Investment Valuation- Equity securities listed on an established
securities exchange or on the NASDAQ National Market System are valued at
their last sale price on the exchange where primarily traded or, if there
is no reported sale, at the mean between the closing bid and asked price
on that day. Over-the-counter portfolio securities are valued at the mean
between the last bid and asked prices based upon quotes furnished by
market markers for such securities. Exchange listed convertible debt
securities are valued at the mean between the last bid and asked prices
obtained from broker-dealers or a comparable alternative, such as
Bloomberg or Telerate.
Other securities for which market quotes are readily available are valued
at the current market price, which may be obtained from a pricing service.
Securities and other assets for which market prices are not readily
available are valued at fair value as determined following procedures
approved by the Board of Directors.
<PAGE>
C. Investment Transactions- All securities are recorded on a trade date
basis. Dividend income is recorded on the ex-dividend date and interest
income is recorded on the accrual basis. Realized gains and losses on
sales of securities are determined on the basis of identified cost.
D. Organization Expenses- All expenses incurred in connection with the
organization and initial registration have been assumed by the series of
MSF. The organizational expenses allocable to the Telecommunications Fund
are being amortized over a period of sixty months from the date it
commenced investment operations. The Telecommunications Fund has agreed
with the Investment Advisor that if any of the initial shares are redeemed
during the amortization period, the Telecommunications Fund will reduce
the redemption proceeds for the then unamortized organizational expenses
in the same ratio as the number of redeemed shares bears to the number of
initial shares at the time of such redemption.
E. Federal Income Taxes- The Telecommunications Fund is treated as a
separate entity for Federal tax purposes. The Telecommunications Fund
intends to qualify each year as a regulated investment company under
Subchapter M of the Internal Revenue Code, as amended. By so qualifying,
the Telecommunications Fund will not be subject to Federal income taxes to
the extent that it distributes all taxable income, including realized
capital gains. In addition, by distributing during each calendar year
substantially all net investment income, capital gains and certain other
amounts, if any, the Telecommunications Fund will not be subject to a
Federal income excise tax.
F. Dividends and Distributions to Shareholders- The Telecommunications
Fund intends to pay an annual dividend to shareholders of record
representing its entire net investment income and to distribute all of its
realized net capital gains at least annually. Distributions are recorded
on the ex-dividend date. Income distributions and capital gains
distributions are determined in accordance with Federal income tax
regulations, which may differ from generally accepted accounting
principles.
Note 2-INVESTMENT MANAGEMENT AND DISTRIBUTION AGREEMENTS- Monument Advisors,
Ltd. ("Monument Advisors"), a wholly-owned subsidiary of the Monument
Group, Inc. has been retained under an Investment Advisory Agreement (the
"Advisory Agreement") to supervise the management and the investment
program of the Telecommunications Fund. As full compensation for its
services under the Agreement, the Telecommunications Fund will pay the
Advisor a monthly fee, equal to an annualized rate of 1.00% of the monthly
average net assets through $50 million in net assets; 0.75% of the monthly
average net assets greater than $50 million through $100 million in net
assets; and 0.625% of the average monthly net assets exceeding $100
million in net assets.
<PAGE>
The Telecommunications Fund has adopted a plan pursuant to Rule 12b-1
under the Investment Company Act of 1940, as amended, whereby the
Telecommunications Fund or Monument Distributors, Inc. ("Monument
Distributors") may finance activities which are primarily intended to
result in the sale of the Telecommunications Fund's shares, including, but
not limited to, advertising, printing of prospectuses and reports for
other than existing shareholders, preparation and distribution of
advertising materials and sales literature, and payments to dealers and
shareholders servicing agents who enter into agreements with the
Telecommunications Fund or Monument Distributors. The Telecommunications
Fund may incur such distribution expenses at the rate of 0.50% for its
Class A Shares and 1.00% for its Class B Shares per annum on each class's
average net assets. For the six months ended April 30,2000 the
Telecommunications Fund paid $19,350 for its Class A Shares and $19,288
for its Class B Shares for such expenses. Monument Advisors has
contractually agreed to waive its fees and to pay expenses to the extent
necessary to cap Class A Share total operating expenses to 1.90%, and
Class B Share total operating expenses at 2.40% of the Telecommunications
Fund's average daily net assets until May 1, 2001. For the six months
ended April 30, 2000, waived fees and expense reimbursements were $78,272.
Note 3--SOFT DOLLAR ARRANGEMENTS- In January 1999, Monument Advisors entered
into a soft dollar arrangement with a broker-dealer who makes a market in
many of the securities in the Fund's portfolio. Under this arrangement,
Monument received equipment, conferencing, and trade journals. For the six
months ended April 30, 2000, the value of these arrangements was $81,627.
Note 4--INVESTMENTS-Purchases and sales of securities for the Telecom-
munications Fund, other than short-term investments aggregated $25,791,348
and $2,648,205, respectively.
Note 5--OPEN COVERED CALL OPTIONS WRITTEN-As of April 30, 2000, portfolio
securities valued at $643,750 were pledged by the custodian as cover for
call options written by the Fund.
Transactions in call options written during the six months ended April 30,
2000 are summarized as follows:
Option Contracts
---------------------
Number of Premiums
Contracts Received
--------- ----------
Beginning of Period 0 $ 0
Written 20 13,875
Closed 0 0
Exercised 0 0
Expired 0 0
-- --------
End of Period 20 $ 13,875
== ========
Transactions in put options written during the six months ended April 30,
2000 are summarized as follows:
Option Contracts
---------------------
Number of Premiums
Contracts Received
--------- ----------
Beginning of Period 0 $ 0
Written 70 38,718
Closed 0 0
Exercised (20) (13,875)
Expired 0 0
-- --------
End of Period 50 $ 24,843
== ========
<PAGE>
INVESTMENT ADVISOR:
Monument Advisors, Ltd.
7920 Norfolk Ave., Suite 500
Bethesda, MD 20814
DISTRIBUTOR:
Monument Distributors, Inc.
7920 Norfolk Ave., Suite 500
Bethesda, MD 20814
INDEPENDENT AUDITORS:
Deloitte and Touche, LLP
117 Campus Dr., University Square
Princeton, NJ 08540
TRANSFER AGENT:
For account information, wire purchases or redemptions, call or write Monument
Series Fund, Inc.'s Transfer Agent:
Fund Services, Inc.
P.O. Box 26305
Richmond, VA 23260
(800) 628-4077 Toll Free
MORE INFORMATION:
For 24 hour, 7 days a week price information, and for information on any series
of Monument Series Fund, Inc., investment plans, and other shareholder services
call (888) 520-8637 Toll Free
