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August 20, 1998
Dear Fellow Shareholders:
We are pleased to provide our first Annual Report to Shareholders. Our
Marathon Fund is off to a great start! We have selected 39 of the best companies
in the four sectors of the economy, which we believe will outperform the overall
market over the next 3 to 5 years. Our four sectors are pharmaceuticals,
technology, financial services, and retail. We even managed to beat the Dow
Jones Industrial Average, the Russell 2000, and the Standard & Poor's 500 Index
in the quarter ending June 30, 1998. In addition, we have no taxable capital
gains to pass on to our shareholders, so your tax adjusted return should compare
favorably to other mutual funds with similar performance but high portfolio
turnover. Please refer to the performance chart below to see the relative return
of an investment of $10,000 in the S & P 500 and the Marathon Fund.
Through the first half of 1998, the stocks of companies in our four
sectors rose an average of 25.77% verses the overall market rise of 16.26%
(according to the Wall Street Journal). We remain comfortable with these sectors
and we believe that they will continue to outperform the overall market. As of
June 30, 1998, our weighting by sector was 34% technology, 29% financial
services, 16% pharmaceuticals, and 17% retail; we also had 4% in cash. Over the
next few months, our weighting will increase in pharmaceuticals and retail and
will decrease in technology. Our weighting in financial services will remain
about the same. Cash will decrease as we approach a fully invested position.
The outlook is good for stocks of companies in our four sectors of the
economy. Low interest rates and new products will help technology and
pharmaceutical companies expand. Low interest rates are favorable for financial
service companies and retailers. Low unemployment, low inflation, high consumer
confidence, the Federal budget surplus, state budget surpluses, and emerging
capitalism around the world provide a favorable environment for investment in
the stocks of companies in our four sectors.
We want to thank our team members - - our Transfer Agent, our
Custodian Bank, our independent auditor, and our outside lawyers - - for helping
us get a solid start. We also thank our shareholders for their confidence and
trust.
You can reach us (toll free) at 1-888-88-BOYLE or through our website
at "www.BoyleFund.com".
Respectfully submitted,
______________________
Michael and Joanne Boyle
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Boyle Marathon Fund
Schedule of Investments
June 30,1998
- --------------------------------------------------------------------------------
Shares/Principal Amount Cost Market % of Assets
Value
- --------------------------------------------------------------------------------
Technology
5,000 Applied Signal Technology* 61,891 59,375
900 Cisco Systems Inc.* 70,813 82,856
500 Compaq Computer Corp. 14,470 14,187
600 Dell Computer Corp.* 47,607 55,688
2,000 Digital Microware Corp.* 26,714 14,500
100 Excite, Inc.* 8,950 9,350
300 Intel Corp. 25,710 22,238
150 Microsoft Corp.* 12,863 16,255
1,000 Peoplesoft Inc.* 44,485 47,000
100 Quantam Corp.* 2,354 2,075
50 Yahoo!, Inc.* 5,118 7,875
------- -------
320,975 331,399 33.64%
Retail
1,000 CompUSA Inc.* 16,525 18,125
800 Gap Inc. 40,843 49,300
400 Home Depot Inc. 31,175 33,225
200 K Mart Corp.* 3,564 3,850
1,000 Preview Travel, Inc.* 26,497 34,375
500 Ross Stores, Inc. 21,338 21,500
100 Starbucks Corp.* 4,668 5,344
200 U.S. Home And Garden, Inc.* 1,266 1,288
100 Walgreen Co. 3,498 4,131
------- -------
149,374 171,138 17.37%
Pharmaceuticals
50 Bristol Myers Squibb Co. 5,355 5,747
50 Johnson & Johnson 3,518 3,688
350 Lilly, Eli & Co. 22,887 23,122
700 McKesson Corp. 52,645 56,875
250 Merck & Co. Inc. 30,647 33,437
250 Pfizer Inc. 24,885 27,156
100 Watson Pharmaceuticals, Inc.* 3,892 4,669
------- -------
143,829 154,694 15.70%
Financial Services
200 Donaldson, Lufkin & Jenrette 9,585 10,162
2,000 E Trade Group.* 42,108 45,875
100 Fedl National Mortgage Assoc. 6,135 6,125
150 Franklin Resources Inc. 8,047 8,100
1,000 Hambrecht & Quist Group, Inc.* 29,058 36,313
100 Merrill Lynch & Co. Inc. 8,838 9,225
1,200 Pre-Paid Legal Services, Inc.* 39,833 37,875
100 John Nuveen Corp. 3,604 3,969
100 Providian Corp. 6,347 7,856
800 Robert Half International* 41,473 44,700
2,000 Schwab (Charles) Corp. 68,180 65,000
200 Silicon Valley Bancshares* 6,670 7,119
------- -------
269,878 282,319 28.65%
Cash and Equivalents
112,061 Star Bank Treasury 112,061 112,061 11.37%
Total Investments 996,117 1,051,611 106.73%
Other Assets Less Liabilities (66,352) -6.73%
Net Assets - Equivalent to $10.31 per share on 985,259 100.00%
The accompanying notes are an integral part of the financial statements.
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Statement of Assets and Liabilites
June 30, 1998
Assets:
Investment Securities at Market Value 1,051,611
(Identified Cost - $996,117)
Cash 100
Receivables:
Advisor 2,123
Dividends and Interest 1,059
Other Assets 9,206
Total Assets 1,064,099
Liabilities
Payables:
Investment Securities Purchased 60,812
Shareholder Distributions -
Accrued Expenses 18,028
Total Liabilities 78,840
Net Assets 985,259
Net Assets Consist of:
Capital Paid In 932,962
Undistributed Net Investment Income (3,197)
Accumulated Realized Gain (Loss) on Investments - Net -
Unrealized Appreciation in Value
of Investments Based on Identified Cost - Net 55,494
Net Assets, for 95,569 Shares Outstanding 985,259
Net Asset Value and Redemption Price
Per Share ($985,259/95,569 shares) 10.31
Offering Price Per Share 10.31
Statement of Operations
Feburary 23 to June 30, 1998
Investment Income:
Dividends 460
Interest 5,164
Total Investment Income 5,624
Expenses
Management Fees (Note 2) 3,232
Administration Fee 2,155
Audit 8,127
Organizational Costs 694
Total Expenses 14,208
Reimbursed Fees (5,387)
Total Expenses after Reimbursements 8,821
Net Investment Income (3,197)
Realized and Unrealized Gain (Loss) on Investments:
Realized Gain (Loss) on Investments -
Distribution of Realized Capital Gains from other Investment Companies -
Unrealized Gain (Loss) from Appreciation
(Depreciation) on Investments 55,494
Net Realized and Unrealized Gain (Loss) on Investments 55,494
Net Increase (Decrease) in Net Assets from Operations 52,297
The accompanying notes are an integral part of the financial statements.
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Statement of Changes in Net Assets
2/23/98
to
6/30/98
From Operations:
Net Investment Income (3,197)
Net Realized Gain (Loss) on Investments -
Net Unrealized Appreciation (Depreciation) 55,494
Increase (Decrease) in Net Assets from Operations 52,297
From Distributions to Shareholders
Net Investment Income -
Net Realized Gain (Loss) from Security Transactions -
Net Increase (Decrease) from Distributions -
From Capital Share Transactions:
Proceeds From Sale of 95,569 Shares 932,962
Net Asset Value of 0 Shares Issued on
Reinvestment of Dividends -
Cost of 0 Shares Redeemed -
932,962
Net Increase in Net Assets 985,259
Net Assets at Beginning of Period
(including undistributed net investment income of $0) -
Net Assets at End of Period
(including undistributed net investment income of $237) 985,259
Financial Highlights
Selected data for a share of common stock
outstanding throughout the period: 2/23/98
to
6/30/98
Net Asset Value -
Beginning of Period 10.00
Net Investment Income (0.05)
Net Gains or Losses on Securities
(realized and unrealized) 0.36
Total from Investment Operations 0.31
Dividends
(from net investment income) 0.00
Distributions (from capital gains) 0.00
Return of Capital 0.00
Total Distributions 0.00
Net Asset Value -
End of Period 10.31
Total Return * 8.84%
Ratios/Supplemental Data
Net Assets - End of Period (Thousands) 985
Before reimbursments
Ratio of Expenses to Average Net Assets* 6.59%
Ratio of Net Income to Average Net Assets* (3.98)%
After reimbursments
Ratio of Expenses to Average Net Assets* 4.09%
Ratio of Net Income to Average Net Assets* (1.48)%
Portfolio Turnover Rate 0.00%
Average commission per share 0.04404
*Annualized
The accompanying notes are an integral part of the financial statements.
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BOYLE MARATHON FUND
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
1.)SIGNIFICANT ACCOUNTING POLICIES
The Fund is a open-end management investment company, organized as a Trust
under the laws of the State of Delaware by a Declaration of Trust in
October 1997. The Fund's investment objective is long-term capital
appreciation. The Fund intends to invest primarily in securities of
companies in the high technology, financial services, pharmaceutical, and
retail fields. The Fund intends to focus on companies with headquarters of
with large operations is the San Francisco/Silicon Valley area. Significant
accounting policies of the Fund are presented below:
SECURITY VALUATION:
The Fund intends to invest in a wide variety of equity and debt securities.
The investments in securities are carried at market value. The market
quotation used for common stocks, including those listed on the NASDAQ
National Market System, is the last sale price on the date on which the
valuation is made or, in the absence of sales, at the closing bid price.
Over-the-counter securities will be valued on the basis of the bid price at
the close of each business day. Short-term investments are valued at
amortized cost, which approximates market. Securities for which market
quotations are not readily available will be valued at fair value as
determined in good faith pursuant to procedures established by the Board of
Directors.
SECURITY TRANSACTION TIMING
Security transactions are recorded on the dates transactions are entered
into (the trade dates). Dividend income and distributions to shareholders
are recorded on the ex-dividend date. Interest income is recorded as
earned. The Fund uses the identified cost basis in computing gain or loss
on sale of investment securities. Discounts and premiums on securities
purchased are amortized over the life of the respective securities.
INCOME TAXES:
It is the Fund's policy to distribute annually, prior to the end of the
calendar year, dividends sufficient to satisfy excise tax requirements of
the Internal Revenue Service. This Internal Revenue Service requirement may
cause an excess of distributions over the book year-end accumulated income.
In addition, it is the Fund's policy to distribute annually, after the end
of the fiscal year, any remaining net investment income and net realized
capital gains.
ESTIMATES:
The preparation of 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 and
disclosure of contingent 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.
2.)INVESTMENT ADVISORY AGREEMENT
The Fund has entered into an investment advisory and administration
agreement with Boyle Management and Research, Inc. The Investment Advisor
receives from the Fund as compensation for its services an annual fee of
1.5% on the Fund's net assets. Boyle Management and Research, Inc. receives
form the fund as compensation for its administrative services an annual fee
of 1.0% of the fund's net assets. Boyle Management and Research, Inc. has
agreed to be responsible for payment of all operation expenses of the fund
except for brokerage and commission expenses, expenses of the trustees who
are not officers of the Investment Adviser, annual independent audit
expenses and any extraordinary and non-recurring expenses. From time to
time, Boyle Management and Research, Inc. may waive some or all of the
fees. During the fiscal year ending June 30, 1998 all management and
administrative fees have been waived.
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3.)RELATED PARTY TRANSACTIONS
Certain owners of Boyle Management and Research, Inc. are also owners
and/or directors of the Boyle Marathon Fund. These individuals may receive
benefits from any management and or administration fees paid to the
Advisor.
4.)CAPITAL STOCK AND DISTRIBUTION
At June 30, 1998 an indefinite number of shares of capital stock ($.10 par
value) were authorized, and paid-in capital amounted to $932,962.
Transactions in common stock were as follows:
Shares sold 95,569
Shares issued to shareholders in reinvestment of dividends 0
------
95,569
Shares redeemed 0
------
Net Increase 95,569
Shares Outstanding:
Beginning of Period 0
------
End of Period 95,569
======
5.)PURCHASES AND SALES OF SECURITIES
During the period from inception to June 30, 1998, purchases and sales of
investment securities other than U.S. Government obligations and short-term
investments aggregated $884,056 and $0 respectively. Purchases and sales of
U.S. Government obligations aggregated $0 and $0 respectively.
6.)FINANCIAL INSTRUMENTS DISCLOSURE
There are no reportable financial instruments that have any off-balance
sheet risk as of June 30, 1998.
7.)SECURITY TRANSACTIONS
For Federal income tax purposes, the cost of investments owned at June 30,
1998 was the same as identified cost. At June 30, 1998, the composition of
unrealized appreciation (the excess of value over tax cost) and
depreciation (the excess of tax cost over value) was as follows:
Appreciation (Depreciation) Net Appreciation (Depreciation)
86,297 (30,803) 55,494
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INDEPENDENT AUDITOR'S REPORT
To The Shareholders and
Board of Directors
Boyle Marathon Fund
We have audited the accompanying statement of assets and liabilities of Boyle
Marathon Fund, including the schedule of portfolio investments, as of June 30,
1998, and the related statement of operations for the year then ended, the
statement of changes in net assets for the year then ended, and financial
highlights for the period from February 23, 1998 (commencement of operations) to
June 30, 1998 in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments and cash held by
the custodian as of June 30, 1998 by correspondence with the custodian and
broker. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Boyle
Marathon Fund as of June 30, 1998, the results of its operations for the year
then ended, the changes in its net assets for the year then ended, and the
financial highlights for the period from February 23, 1998 (commencement of
operations) to June 30, 1998 in the period then ended, in conformity with
generally accepted accounting principles.
McCurdy & Associates CPA's, Inc.
Westlake, Ohio 44145
July 20, 1998
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