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Dear Shareholder
The first 6 months of 1998 can only be described as one of those unique periods,
which seem to occur every ten or fifteen years, in which the stock market
assumes a very noticeable split personality. The distinctive characteristics are
the participation of fewer companies in market rallies and generally
deteriorating fundamentals. We must look back to the spring of 1973 and summer
of 1987 to find comparable examples.
The very largest market capitalization companies drive the major market averages
such as the Dow Jones Industrials, the S&P 500 and the Russell 3000, because all
are capitalization weighted. Today, even the NASDAQ, dominated by Microsoft,
Cisco and Intel, has lost its emerging company character. Since the beginning of
1998, the performance of portfolios, which did not consist of most of the twenty
or so largest companies, generally fell far behind the market averages. One
noticeable exception was the Maxus Laureate Fund, which had an outstanding six
months.
All of the major market indices made most their gains in February when fourth
quarter 1997 earnings appeared to be stronger than expected and money fleeing
the deteriorating Asian economies sought the most recognizable and liquid names
available. As the large capitalization companies surged in value, their
dominance of the market averages became even more pronounced and the need to own
them appeared to be even more necessary.
What distinguishes recent months from comparable periods during the last 25
years is magnitude of divergence. The very large companies appeared
significantly overvalued on both the fundamental and historical standards while
the smaller companies appear to be significantly undervalued on both counts. The
Maxus Equity Fund, Maxus Aggressive Value Fund and the Maxus Ohio Heartland Fund
have been focused on the latter, with the expectation that in the months and
years ahead, stock market valuations will again reflect rational investment
decisions.
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Maxus Ohio Heartland Fund
Schedule of Investments
June 30,1998
Shares/Principal Amount Market Value % of Assets
Basic Materials
2,500 A. Schulman 48,906
2,500 Andersons 25,937
2,000 Brush Wellman 41,125
1,500 Hanna,(M.A.) 27,469
3,000 Hawk Group * 52,875
3,000 Olympic Steel * 37,500
1,200 Shiloh Industries * 24,300
258,112 12.14%
Industrial Products & Services
2,500 Applied Industrial Technologies, Inc. 51,406
3,750 Corrpro * 42,188
3,500 Lamson & Sessions * 21,656
2,000 Scott Technologies Inc. Cl A * 29,250
2,000 Stoneridge * 36,875
181,375 8.53%
Consumer Cyclical
2,000 Baldwin Piano * 30,000
1,800 Cooper Tire 37,350
7,500 International Total Service 52,500
2,000 Standard Register 70,750
190,600 8.97%
Consumer Staples
2,600 Bob Evans 55,088
2,400 Fabri-Centers of America Cl B * 56,850
3,800 Gibson Greetings * 95,000
3,000 Huffy 54,375
3,000 RG Barry Corp * 49,500
3,500 Rocky Shoes & Boots * 49,875
12,000 Royal Appliance * 75,000
12,500 Sun Television * 25,000
2,300 Wendy's 54,050
2,500 Worthington Foods 52,344
567,082 26.67%
Financial
3,000 Associated Estates Realty 56,062
3,000 Boykin Lodging 63,750
2,000 First Union Real Estate Equity & Mtg Invts 18,500
5,000 Great Lakes Bancorp * 68,750
1,000 State Auto Financial 31,875
238,937 11.24%
Health Care
10,000 Collaborative Clinical Research * 41,250
1,000 Invacare 25,625
66,875 3.15%
*Non-income producing securities.
The accompanying notes are an integral part of the financial statements.
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Technology
5,500 Allen Telecom Inc. * 63,937
2,000 Diebold 57,750
4,700 Keithley Instruments 34,956
5,500 Pioneer Standard 52,938
1,000 Structural Dynamics * 23,125
232,706 10.95%
Cash and Equivalents
388,695 Star Bank Treasury 388,695 18.28%
Total Investments 2,124,382 99.92%
Other Assets Less Liabilities 1,640 0.08%
Net Assets - Equivalent 2,126,022 100.00%
*Non-income producing securities.
The accompanying notes are an integral part of the financial statements.
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Maxus Aggressive Value Fund
Schedule of Investments
June 30,1998
Shares/Principal Amount Market Value % of Assets
Metals & Mining
200,000 Campbell Resources * 75,000 2.11%
Industrial Products & Services
10,000 Airport Systems * 57,500
22,000 Catalina LTG Inc * 83,875
7,000 International Total Services * 49,000
5,000 Isco Inc 40,000
230,375 6.48%
Infrastructure & Environment
20,000 Foster L B * 103,750 2.92%
Consumer Products
10,000 Baldwin Piano * 150,000
20,000 Designs Inc. * 31,250
5,000 First Team Sports * 10,000
30,000 Martin Industries 150,000
50,000 Michael Anthony Jewelers * 128,125
47,500 Parlux Fragrance * 89,063
30,000 Royal Appliance * 187,500
30,000 Saucony Inc Cl A * 165,000
910,938 25.62%
Energy
24,000 Patina Oil & Gas 168,000 4.73%
Financial Services
4,700 Atlanta Sosnoff Capital Corp 45,825
16,500 Brantley Cap Corp * 156,750
17,300 GKN Holdings 51,900
10,000 Great Lakes Bancorp * 137,500
10,600 National Discount Brokers * 112,625
504,600 14.19%
Medical Products & Services
19,000 Collaborative Clinical Research * 78,375
10,000 Orthologic Corp * 51,250
129,625 3.65%
Wholesale Distribution
20,000 Scheid Vineyards Inc. Class A * 138,750
12,500 Strategic Distribution Inc. * 68,750
207,500 5.84%
Information Technology
10,000 Aydin * 87,500
22,500 Media 100 * 85,781
20,500 Open Systems * 23,703
5,000 Tech Sym Corp * 139,062
11,700 Trident Microsystems Inc. * 62,155
35,000 Xicor Inc. * 61,250
459,451 12.92%
*Non-income producing securities.
The accompanying notes are an integral part of the financial statements.
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Entertainment
5,000 Aztar Corporation * 34,063
31,820 Casino America Inc * 111,370
5,000 Trump Hotels Casino Resorts * 35,313
180,746 5.08%
Cash and Equivalents
599,679 Star Bank Treasury 599,679 16.87%
Total Investments 3,569,664 100.41%
Other Assets Less Liabilities (14,744) -0.41%
Net Assets - Equivalent 3,554,920 100.00%
*Non-income producing securities.
The accompanying notes are an integral part of the financial statements.
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Statement of Assets & Liabilities
Ohio Heartland & Aggressive Value Funds June 30, 1998 (unaudited)
Ohio
Heartland Aggressive
Fund Value Fund
Assets:
Investment Securities at Market Value 2,124,382 3,569,664
(Identified Costs - $2,179,145 and $3,503,782)
Cash 4,564 2,545
Receivables:
Receivable for investment securities sold - 20,999
Dividends and interest receivable 6,091 6,685
Unamortized organization costs 13,956 13,956
Total Assets 2,148,993 3,613,849
Liabilities:
Payable for investment purchased - 33,988
Payable for shareholder distributions - -
Accrued Expenses 22,971 24,941
Total Liabilities 22,971 58,929
2,126,022 3,554,920
Net Assets:
Capital Paid In 2,176,395 3,508,831
Undistributed Net Investment Income 61 (2,188)
Accumulated Realized Gain (Loss) on Investments - Net 4,329 (17,605)
Unrealized Appreciation in Value
of Investments Based on Identified Cost - Net (54,763) 65,882
Net Assets 2,126,022 3,554,920
Net Assets
Investors Shares 1,569,945 2,387,235
Institutional Shares 556,077 1,167,685
Total 2,126,022 3,554,920
Shares of capital stock
Investors Shares 158,642 465,230
Institutional Shares 56,112 227,240
Total 214,754 692,470
Net asset value
Investors Shares $9.90 $5.13
Institutional Shares $9.91 $5.14
The accompanying notes are an integral part of the financial statements.
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Statement of Operations
Ohio Heartland & Aggressive Value Funds June 30, 1998 (unaudited)
Ohio
Heartland Aggressive
Fund Value Fund
Investment Income:
Dividend income $6,028 1,840
Interest income 13,860 26,213
Total Income 19,888 28,053
Expenses:
Investment advisory fees (Note 2) 6,351 12,093
Distribution fees (Investor shares) 2,168 3,720
Distribution fees (Institutional shares) - -
Custodial fees 1,621 2,080
Organization costs 1,341 1,341
Transfer agent fees/Accounting and Pricing 1,757 3,347
Legal 3,361 3,617
Audit 2,347 2,347
Registration and filing fees 450 450
Printing & Other Miscellaneous 432 1,246
Gross Expenses 19,828 30,241
Net Investment Income (Loss) 60 (2,188)
Realized and Unrealized Gain (Loss) on Investments:
Realized Gain (Loss) on Investments 4,329 (17,605)
Distribution of Realized Capital Gains from other
Investment Companies - -
Unrealized Gain (Loss) from Appreciation (Depreciation)
on Investments (54,763) 65,882
Net Realized and Unrealized Gain (Loss) on Investments (50,434) 48,277
Net Increase (Decrease) in Net Assets from Operations $(50,374) 46,089
The accompanying notes are an integral part of the financial statements.
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Statement of Changes in Net Assets
Ohio Heartland & Aggressive Value Funds June 30, 1998 (unaudited)
Ohio Aggressive
Heartland Fund Value Fund
02/01/98 02/01/98
to to
06/30/98 06/30/98
From Operations:
Net Investment Income 60 (2,188)
Net Realized Gain (Loss) on Investments 4,329 (17,605)
Net Unrealized Appreciation (Depreciation) (54,763) 65,882
Increase (Decrease) in Net Assets from Operations (50,374) 46,089
Distributions to investor shareholders:
Net Investment Income - -
Net Realized Gain (Loss) from Security Transactions - -
Distributions to institutional shareholders:
Net Investment Income - -
Net Realized Gain (Loss) from Security Transactions - -
Change in net assets from distributions - -
From Capital Share Transactions:
Proceeds from sale of shares 2,221,454 3,543,965
Dividend reinvestment - -
Cost of shares redeemed (45,058) (35,134)
Change in net assets from capital transactions 2,176,396 3,508,831
Change in net assets 2,126,022 3,554,920
Net Assets:
Beginning of period - -
End of period 2,126,022 3,554,920
Share Transactions:
Issued 219,334 699,314
Reinvested - -
Redeemed (4,580) (6,844)
Net increase (decrease) in shares 214,754 692,470
Shares outstanding beginning of period - -
Shares outstanding end of period 214,754 692,470
The accompanying notes are an integral part of the financial statements.
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Financial Highlights
Ohio Heartland & Aggressive Value Funds
Ohio Heartland Fund Aggressive Value Fund
2/1/98 to 6/30/98 2/1/98 to 6/30/98
Investor Institutional Investor Institutional
Net Asset Value -
Beginning of Period 10.00 10.00 5.00 5.00
Net Investment Income - 0.01 - 0.01
Net Gains or Losses on Securities
(realized and unrealized) (0.10) (0.10) 0.13 0.13
Total from Investment Operations (0.10) (0.09) 0.13 0.14
Distributions
Net investment income - - - -
Capital gains - - - -
Return of capital - - - -
Total Distributions - - - -
Net Asset Value -
End of Period $9.90 $9.91 $5.13 $5.14
Total Return * -6.00% -5.40% 15.60% 16.80%
Ratios/Supplemental Data:
Net Assets at end of period
(thousands) 1,570 556 2,387 1,168
Ratio of expenses to average
net assets * 3.21% 2.71% 2.65% 2.15%
Ratio of net income to average
net assets * 0.01% 0.51% -0.38% 0.12%
Portfolio turnover rate * 4.32% 4.32% 54.88% 54.88%
Average commission per share 0.06349 0.06349 0.02831 0.02831
* Annualized
The accompanying notes are an integral part of the financial statements.
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NOTES TO FINANCIAL STATEMENTS
MAXUS OHIO HEARTLAND & AGGRESSIVE VALUE FUNDS
JUNE 30, 1998 (UNAUDITED)
1.)SIGNIFICANT ACCOUNTING POLICIES
Maxus Ohio Heartland Fund and Maxus Aggressive Value Fund (the "Funds") are
two separate diversified portfolios of MaxFund Trust (the "Trust"), an
open-end management investment company, organized as a Trust under the laws
of the State of Ohio by a Declaration of Trust dated November 7, 1997. The
investment objective of Maxus Ohio Heartland Fund is to obtain a total
return (a combination of capital appreciation and income). Under normal
circumstances, at least 80% of the value of the Fund's total assets will
consist of equity securities of companies headquartered in the State of
Ohio. The investment objective of Maxus Aggressive Value Fund is to obtain
capital appreciation. Under normal circumstances, at least 80% of the value
of the Fund's total assets will consist of equity securities of companies
who have a total market value of not less the $10,000,000 or more that
$200,000,000 as of the date of investment. Significant accounting policies
of the Fund are presented below:
SECURITY VALUATION:
Both Funds intend 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. Both Funds use 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 both Funds' 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 both Funds' policy to distribute annually, after the end
of the calendar 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 Trust has entered into an investment advisory and administration
agreement with Maxus Asset Management Inc. a wholly owned subsidiary of
Resource Management Inc. The Investment Advisor receives from each Fund as
compensation for its services to that Fund an annual fee of 1% on the first
$150,000,000 of the Fund's net assets, and 0.75% of the Fund's net assets
in excess of $150,000,000.
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3.)RELATED PARTY TRANSACTIONS
Resource Management, Inc. has three wholly owned subsidiaries which provide
services to the Fund. These subsidiaries are Maxus Asset Management Inc,
Maxus Securities Corp, and Maxus Information Systems Inc. Maxus Asset
Management was paid $6,516 by Maxus Ohio Heartland Fund and $12,374 by
Maxus Aggressive Value Fund in investment advisory fees during the five
months ended June 30, 1998. Maxus Securities, who served as the national
distributor of the Fund's shares, was reimbursed $2,228 by Maxus Ohio
Heartland Fund and $3,812 by Maxus Aggressive Value Fund for distribution
expenses. Maxus Information Systems received fees totaling $1,522 From
Maxus Ohio Heartland Fund and $3,184 from Maxus Aggressive Value Fund for
services rendered to the Fund for the five months ended June 30, 1998.
Maxus Securities is a registered broker-dealer. Maxus Securities effected
substantially all of the investment portfolio transactions for the Fund.
For this service Maxus Securities received commissions of $6,750 from Maxus
Ohio Heartland Fund and $22,899 from Maxus Aggressive Value Fund for the
five months ending June 30, 1998.
At June 30, 1998, Resource Management owned 10,000 shares in Maxus Ohio
Heartland Fund and 100,000 shares in Maxus Aggressive Value Fund.
Certain officers and/or trustees of the Fund are officers and/or directors
of the Investment Advisor and Administrator. Each director who is not an
"affiliated person" receives an attendance fee of $100 per Fund per
meeting.
4.)CAPITAL STOCK AND DISTRIBUTION
At June 30, 1998 an indefinite number of shares of capital stock ($.10 par
value) were authorized, and paid-in capital amounted to $2,176,395 for the
Maxus Ohio Heartland Fund and $3,508,831 for the Maxus Aggressive Value
Fund.
Distributions to shareholders are recorded on the ex-dividend date.
Payments in excess of net investment income or of accumulated net realized
gains reported in the financial statements are due primarily to book/tax
differences. Payments due to permanent differences have been charged to
paid in capital. Payments due to temporary differences have been charged to
distributions in excess of net investment income or realized gains.
5.)PURCHASES AND SALES OF SECURITIES
The table below displays information describing purchases and sales of
investment securities, both U.S. Government obligations and non U.S.
Government obligations made during the five months ended June 30, 1998.
Maxus Ohio Maxus Aggressive
Heartland Fund Value Fund
Type of obligation
Purchase of non U.S. Government * 1,814,180 28,059
Sale of non U.S. Government * 3,600,791 679,083
Purchase of U.S. Government 0 0
Sale of U.S. Government 0 0
* This value includes short-term investments.
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.
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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:
Maxus Ohio Maxus Aggressive
Heartland Fund Value Fund
Appreciation 83,646 188,273
(Depreciation) (138,409) (122,391)
Net Appreciation (Depreciation) (54,763) 65,882
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THE MAXUS FUNDS
1301 East Ninth Street, Suite 3600, Cleveland, OH 44114
(216) 687-1000
INVESTMENT ADVISOR
Maxus Asset Management Inc
1301 East Ninth Street
Cleveland, Ohio 44114
BOARD OF TRUSTEES
Denis J. Amato
Richard A. Barone
Burton D. Morgan
Michael A. Rossi
Jerry Murphy
OFFICERS
Richard A. Barone, Chairman
Robert J. Conrad, Vice-President
Robert W. Curtin, Secretary
CUSTODIAN
Star Bank, N. A.
425 Walnut Street
P. O. Box 1118
Cincinnati, Ohio 45201-1118
TRANSFER AGENT
Maxus Information Systems Inc
1301 East Ninth Street
Cleveland, Ohio 44114
DISTRIBUTOR
Maxus Securities Corp
1301 East Ninth Street
Cleveland, Ohio 44114
LEGAL COUNSEL
Benesch, Friedlander, Coplan & Aronoff
2300 BP America Building
200 Public Square
Cleveland, Ohio 44114-2378
AUDITOR
McCurdy & Associates CPA's Inc
27955 Clemens Road
Westlake, Ohio 44145
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