<PAGE>
MAP-EQUITY FUND
To Our Shareholders:
MAP-Equity Fund returned 17.2% during the last six months of 1995 and 32.5% for
the full year (including reinvestment of dividends but not deducting the maximum
sales charge). Comparable performance for the Standard & Poor's 500 Index, a
generally accepted index of unmanaged securities, was 14.4% for the six month
period and 37.5% for the year.
Capital gains realized during 1995 remained high as the Fund's assets were
reallocated among individual members of the management team. This is in keeping
with our advisor's long-established policy of trying to provide shareholders
increased exposure to the most successful managers. Better than average risk-
adjusted performance for our shareholders continues to be our management team's
primary objective.
Recently, the Fund's low risk posture and competitive returns have been
acknowledged by the financial press. In this regard, MAP-Equity Fund and its
managers were the subject of an interview featured as the cover story in the
February, 1996 issue of the DOW JONES INVESTMENT ADVISOR magazine. MAP-Equity
Fund was also cited in the year-end Mutual Fund issue of BARRON'S as the best
performing Growth and Income Fund in the fourth quarter of 1995 and in the NEW
YORK TIMES, November 12, 1995 Business Section, for excellent performance over
the long-term.
On December 19, 1995 the Board of Directors declared a dividend from net
investment income of $.20 per share and a capital gain distribution of $1.87 per
share payable to shareholders of record on December 22, 1995. Total 1995 income
and capital gains distributions were $.43 and $2.21, respectively.
The Board of Directors continues to invite you to mail your comments and
suggestions to them and thanks you for your continued support and confidence in
the Fund.
Sincerely,
EUGENE J. CIARKOWSKI
PRESIDENT
February 15, 1996
<PAGE>
REPORT OF THE INVESTMENT ADVISER
Dear Shareholders:
Several stocks made important contributions during the second half of 1995.
CCH INC. (formerly known as Commerce Clearing House) appreciated better than
100% during the second half of 1995 after the family that controlled it agreed
in November 1995 to sell out to Wolters Kluwer at $55.50 per share. CCH's CEO
had publicly stated in a speech in late June 1995 that he thought the private
market value of his company was materially higher than the public market value,
and that he was trying to close the gap. That speech, as well as stock
repurchases by the company and some insider buying by management, contributed to
our decision to maintain a large holding in CCH.
MEREDITH was also a standout performer, appreciating 65% during the second half.
Meredith's magazine results continue to improve, franchising activities account
for an increasing contribution to the bottom line and the company has a deal
with Reader's Digest that should cure its book publishing losses. However, we
suspect that the increase in the stock price is also due to other factors.
Recent industry acquisitions have focused attention on the value of Meredith's
TV stations, and the "content" of company publications may make it a beneficiary
of expanded interactive services.
DIGITAL EQUIPMENT also helped performance, increasing 57% during the second
half. This occurred as Digital continued its dramatic earnings turnaround,
driven by reduced employment and selective asset sales. Also helping is the
growing acceptance of its state-of-the-art 64 bit Alpha architecture, giving it
a preeminent position for the next generation of computing.
SHARED MEDICAL SYSTEM appreciated 35% in the second half in a reaction to a
positive top management change. Also helping was the market's willingness to pay
a higher multiple for its earnings in a period of slow growth. The fact that
President Clinton fought hard to protect Medicare and Medicaid from Republican
cutbacks may have also helped.
RITE AID, another large position, appreciated 33% in the second half when it got
the two largest holders and the management of REVCO to agree to a merger. Such a
merger would materially strengthen Rite Aid's share of its traditional market,
as well as lower the price at which it could buy pharmaceuticals. Rite Aid's
experience with the FTC in two previous mergers lent credibility to the
proposition that compromises would be reached with government regulators that
would allow the merger to proceed.
Our poorer performers for the last six months include Caldor, Edison Brothers
Stores, Quaker State and National Computer Systems.
Caldor and Edison Brothers Stores, both of which have been eliminated from the
portfolio, negatively impacted full year portfolio performance. Culminating a
rapid sequence of events, CALDOR declared bankruptcy after lenders began to
withhold financing for inventories. We had been attracted to Caldor by its
unique and growing retail presence in dense urban areas along the Atlantic
seaboard. In those stores competition was minimal, sales were strong and
shrinkage was improving. However, fierce competition in some traditional
suburban markets quickly soured the environment for a substantial number of
Caldor stores and those of many other retailers.
2
<PAGE>
We saw in EDISON BROTHERS STORES an opportunity in the young men's market which
most mall-based retailers avoid. The company had also begun to invest in
arcade-based entertainment, a logical expansion. However, shopping mall traffic
fell and a critical number of Edison's apparel stores faced serious difficulties
when fashion tastes moved away from the company's offerings.
QUAKER STATE declined 16% during the second half. We attribute this to extensive
restructuring which delayed a move into a period of rapid earnings growth.
During the year we reduced our holding in Quaker State.
Another poor performer was NATIONAL COMPUTER SYSTEMS which declined 9% during
the second half of 1995. This company continues to be in a fundamental
turnaround led by a new and focused management in whom we have confidence. The
company is a major subcontractor to the Department of Education and may have
suffered from the federal budget uncertainty.
Sincerely,
[SIGNATURE]
MICHAEL J. MULLARKEY
FOR MARKSTON INVESTMENT MANAGEMENT
February 15, 1996
3
<PAGE>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE MAP-EQUITY FUND
AND THE STANDARD & POOR'S 500 INDEX
FOR THE TEN YEAR PERIOD ENDED DECEMBER 31, 1995
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
<S> <C> <C>
1 Year 5 Year 10 Year
26.21% 14.74% 13.89%
MAP - Equity Fund S&P 500
1985 9,525 10000
1986 11640 11870
1987 11123 12464
1988 14451 14532
1989 18524 19125
1990 17581 18532
1991 22449 24166
1992 24813 26002
1993 26965 28628
1994 27709 29003
1995 36715 39888
</TABLE>
THE GRAPH ABOVE DEPICTS THE PERFORMANCE OF MAP-EQUITY FUND VERSUS THE STANDARD &
POOR'S 500 INDEX (AN UNMANAGED INDEX OF STOCKS CONSIDERED REPRESENTATIVE OF THE
OVERALL STOCK MARKET). IT IS IMPORTANT TO NOTE THAT MAP-EQUITY FUND IS A
PROFESSIONALLY MANAGED MUTUAL FUND WHILE THE INDEX IS NOT AVAILABLE FOR
INVESTMENT, IS UNMANAGED AND IS SHOWN FOR COMPARISON ONLY.
THIS GRAPH ASSUMES AN INITIAL INVESTMENT OF $10,000, THE MAXIMUM 4.75% SALES
CHARGE ON FUND SHARES, AS WELL AS REINVESTMENT OF DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS. PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT, WHEN REDEEMED, AN INVESTOR'S
SHARES MAY BE WORTH MORE OR LESS THAN WHEN ORIGINALLY PURCHASED.
4
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and
Board of Directors of
MAP-Equity Fund
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of portfolio 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 MAP-Equity Fund (the "Fund") at
December 31, 1995, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended and
the financial highlights for each of the three years in the period then ended,
in conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's 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 generally
accepted auditing standards 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 December 31, 1995 by
correspondence with the custodian and brokers and the application of alternative
auditing procedures where confirmations from brokers were not received, provide
a reasonable basis for the opinion expressed above. The financial highlights for
each of the seven years in the period ended December 31, 1992 were audited by
other independent accountants whose report dated February 12, 1993 expressed an
unqualified opinion on those statements.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
February 13, 1996
5
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
MAP-EQUITY FUND
DECEMBER 31, 1995
<TABLE>
<S> <C>
ASSETS
Investments -- Note D:
Common stocks (cost $34,152,837)....... $50,275,100
Preferred stocks (cost $41,091)........ 48,351
Corporate bonds (cost $195,713)........ 234,465
Short-term investments................. 10,083,843
-----------
60,641,759
Cash..................................... 86,280
Receivable for investment securities
sold................................... 81,959
Receivable for Fund shares sold.......... 310
Dividends and interest receivable........ 133,193
Other assets............................. 8,462
-----------
Total Assets..................... $60,951,963
-----------
-----------
LIABILITIES
Payable for investment securities
purchased.............................. $ 228,830
Accrued investment advisory fee -- Note
B...................................... 45,121
Distributions payable.................... 160,340
Accounts payable and accrued expenses.... 50,391
-----------
Total Liabilities................ 484,682
NET ASSETS
Capital stock -- 3,123,558 shares of
$1.00 par value capital stock
outstanding (21,000,000 shares
authorized)............................ 3,123,558
Capital paid-in.......................... 41,504,241
Accumulated undistributed net investment
income................................. 75,933
Capital gain distributions required for
federal income tax purposes over
amounts recorded for financial
reporting purposes..................... (404,726)
Net unrealized appreciation of
investments............................ 16,168,275
-----------
Total Net Assets................. 60,467,281
-----------
Total Liabilities and Net
Assets......................... $60,951,963
-----------
-----------
Net asset value and redemption price per
share ($60,467,281 DIVIDED BY
3,123,558 shares of capital stock
outstanding)........................... $19.36
Computation of maximum public offering
price per share -- 100 DIVIDED BY
95.25 of $19.36 (on sales of $50,000 or
more, the maximum sales charge and,
accordingly, the offering price, is
reduced)............................... $20.33
See notes to financial statements.
</TABLE>
STATEMENT OF OPERATIONS
MAP-EQUITY FUND
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<S> <C>
Investment Income:
Dividends.............................. $ 1,250,583
Interest............................... 398,076
-----------
1,648,659
Expenses:
Investment advisory fee -- Note B...... 176,644
Custodian.............................. 69,587
Transfer Agent......................... 66,338
Audit.................................. 31,277
Legal.................................. 18,795
Registration and filing fees........... 17,164
Printing............................... 16,816
Insurance expense...................... 13,259
State taxes............................ 10,416
Directors' fees........................ 7,100
Miscellaneous.......................... 3,779
-----------
431,175
-----------
Net Investment Income............ 1,217,484
-----------
Realized and Unrealized Gain on
Investments -- Note D:
Net realized gain from security
transactions......................... 4,912,081
Increase in unrealized appreciation of
investments.......................... 9,049,889
-----------
Net Gain on Investments.............. 13,961,970
-----------
Net Increase in Net Assets Resulting
from Operations.................... $15,179,454
-----------
-----------
</TABLE>
6
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
MAP-EQUITY FUND
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1995 1994
-------------- --------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS
Net investment income...................................................... $ 1,217,484 $ 986,645
Net realized gain from security transactions ($5,320,112 and $4,793,206,
respectively, for federal income tax purposes)........................... 4,912,081 4,786,864
Increase (decrease) in unrealized appreciation of investments.............. 9,049,889 (4,455,240)
-------------- --------------
Net Increase in Net Assets Resulting from Operations..................... 15,179,454 1,318,269
-------------- --------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income ($.43 and $.37, per share,
respectively)............................................................ (1,212,694) (972,914)
Distributions from net realized gain from security transactions ($2.07 and
$1.59, per share, respectively).......................................... (5,842,295) (4,190,731)
Distribution required for tax purposes over amounts recorded for financial
reporting purposes ($.14 and $0, per share, respectively)................ (404,726) 0
-------------- --------------
Total Distributions to Shareholders...................................... (7,459,715) (5,163,645)
-------------- --------------
FROM CAPITAL SHARE TRANSACTIONS -- NOTE C
Net increase in net assets from capital share transactions................. 4,617,372 2,537,250
-------------- --------------
Net Increase (Decrease) in Net Assets.................................... 12,337,111 (1,308,126)
NET ASSETS
Beginning of year.......................................................... 48,130,170 49,438,296
-------------- --------------
End of year (including undistributed net investment income of $75,933 and
$71,143, respectively)................................................... $ 60,467,281 $ 48,130,170
-------------- --------------
-------------- --------------
</TABLE>
See notes to financial statements.
7
<PAGE>
SCHEDULE OF PORTFOLIO INVESTMENTS
MAP-EQUITY FUND
DECEMBER 31, 1995
<TABLE>
<CAPTION>
NUMBER
OF MARKET
SHARES VALUE
- ----------- -----------
<C> <S> <C>
COMMON STOCKS (83.14%)
AEROSPACE AND DEFENSE (1.51%)
35,600 Teledyne, Inc.................. $ 912,250
-----------
AUTOMOTIVE (1.64%)
20,800 First Brands Corp.............. 990,600
-----------
BANKING AND FINANCE (6.29%)
62,200 American Express Co............ 2,573,525
15,239 BanPonce Corp.................. 590,511
9,900 Northern Trust Corp............ 548,213
2,900 Wilmington Trust Corp.......... 89,175
-----------
3,801,424
-----------
BUILDING (1.06%)
5,700 Lone Star Industries, Inc...... 142,099
5,600 Morgan Products Ltd.*.......... 32,900
8,100 Vulcan Materials Co............ 466,763
-----------
641,762
-----------
CHEMICALS (0.72%)
15,600 Lubrizol Corp.................. 434,850
-----------
COMPUTERS AND COMPUTING (4.48%)
12,100 Cray Research, Inc.*........... 299,475
12,400 Digital Equipment Corp.*....... 795,150
10,500 Intel Corp..................... 595,875
55,300 National Computer Systems,
Inc.......................... 1,009,225
4,000 Summagraphics Corp.*........... 8,250
-----------
2,707,975
-----------
CONGLOMERATES (1.56%)
14,200 Minnesota Mining &
Manufacturing Co............. 940,750
-----------
CONSUMER GOODS AND SERVICES (13.14%)
16,800 American Greetings Corp., Class
A............................ 464,100
14,000 Clorox Co...................... 1,002,750
18,700 Eastman Kodak Co............... 1,252,900
20,588 Gillette Co.................... 1,073,149
11,600 Hasbro, Inc.................... 359,600
9,897 Mattel, Inc.................... 304,333
54,300 National Service Industries,
Inc.......................... 1,757,963
34,600 Time Warner, Inc............... 1,310,475
9,400 Valspar Corp................... 419,475
-----------
7,944,745
-----------
ELECTRICAL AND ELECTRONICS (0.03%)
2,400 Data I/O Corp.*................ 15,900
-----------
<CAPTION>
NUMBER
OF MARKET
SHARES VALUE
- ----------- -----------
<C> <S> <C>
FOOD AND BEVERAGES (8.96%)
10,600 CPC International, Inc......... $ 727,425
14,100 Coca-Cola Co................... 1,046,925
13,300 Kellogg Co..................... 1,027,425
18,500 Luby's Cafeterias, Inc......... 411,625
26,400 McDonald's Corp................ 1,191,300
21,900 Quaker Oats Co................. 755,550
21,700 Showbiz Pizza Time, Inc.*...... 260,400
-----------
5,420,650
-----------
HEALTHCARE AND MEDICAL (2.25%)
24,200 Caremark International, Inc.... 438,625
25,200 Cooper Companies, Inc.*........ 189,000
6,100 NextHealth, Inc.*.............. 19,063
400 Rhone-Poulenc Rorer, Inc....... 21,300
12,800 Shared Medical System Corp..... 691,200
-----------
1,359,188
-----------
INDUSTRIAL SERVICES (0.81%)
23,000 Ogden Corp..................... 491,625
-----------
INSURANCE (1.54%)
27,200 Allmerica Property & Casualty
Co........................... 734,400
6,000 Argonaut Group, Inc............ 195,000
-----------
929,400
-----------
INVESTMENT COMPANIES (1.20%)
6,200 Emerging Tigers Fund, Inc.*.... 80,600
5,900 Global Government Plus Fund,
Inc.......................... 43,512
73,200 Global Total Return Fund,
Inc.......................... 603,900
-----------
728,012
-----------
OIL AND GAS (5.34%)
7,274 Apache Corp.................... 214,583
58,397 Panhandle Eastern Corp......... 1,627,816
2,200 Petroleum Helicopters, Inc.,
voting....................... 30,250
5,800 Petroleum Helicopters, Inc.,
non-voting................... 75,400
5,000 Piedmont Natural Gas, Inc...... 116,250
11,200 Quaker State Corp.............. 141,400
7,100 Royal Dutch Petroleum Co....... 1,001,988
1,500 Western Gas Resources, Inc..... 24,188
-----------
3,231,875
-----------
PAPER AND FOREST PRODUCTS (1.51%)
18,394 Pentair, Inc................... 915,102
-----------
</TABLE>
8
<PAGE>
SCHEDULE OF PORTFOLIO INVESTMENTS -- CONTINUED
MAP-EQUITY FUND
DECEMBER 31, 1995
<TABLE>
<CAPTION>
NUMBER
OF MARKET
SHARES VALUE
- ----------- -----------
PRINTING AND PUBLISHING
(14.93%)
<C> <S> <C>
98,300 CCH, Inc., Class A............. $ 5,431,075
18,300 CCH, Inc., Class B............. 1,008,787
7,900 Dun & Bradstreet Corp.......... 511,525
33,400 Meredith Corp.................. 1,398,625
20,000 Times Mirror Co., Series A..... 677,500
-----------
9,027,512
-----------
REAL ESTATE INVESTMENT (2.65%)
23,900 Health Care Property Investors,
Inc.......................... 839,487
50,900 United Dominion Realty Trust,
Inc.......................... 763,500
-----------
1,602,987
-----------
RETAIL TRADE (6.91%)
70,818 Genovese Drug Stores, Inc.,
Class A...................... 796,702
8,400 Grossman's, Inc.*.............. 9,450
20,583 Revco D.S., Inc.*.............. 581,470
62,100 Rite Aid Corp.................. 2,126,925
25,300 Smith's Food & Drug Centers,
Inc., Class B................ 638,825
5,600 Universal International,
Inc.*........................ 26,600
-----------
4,179,972
-----------
TEXTILE & APPAREL (0.07%)
2,500 Oshkosh B'Gosh, Inc., Class
A............................ 41,875
-----------
UTILITIES -- ELECTRIC AND GAS (1.74%)
16,800 Cinergy Corp................... 514,500
6,500 Eastern Utilities Assoc........ 153,562
20,900 Noram Energy Corp.............. 185,488
6,100 Northwest Natural Gas Co....... 198,250
-----------
1,051,800
-----------
UTILITIES -- TELEPHONE (4.40%)
33,114 Alltel Corp.................... 976,863
22,900 GTE Corp....................... 1,007,600
17,030 Sprint Corp.................... 679,071
-----------
2,663,534
-----------
<CAPTION>
NUMBER
OF MARKET
SHARES VALUE
- ----------- -----------
<C> <S> <C>
VOCATIONAL TRAINING (0.40%)
29,700 National Education Corp.*...... $ 241,312
-----------
Total Common Stocks............ 50,275,100
-----------
PREFERRED STOCKS (0.08%)
AEROSPACE AND DEFENSE (0.03%)
1,372 Teledyne, Inc., Series E....... 19,551
-----------
CONSUMER GOODS AND SERVICES
(0.05%)
3,200 Craig Corp., Class A*.......... 28,800
-----------
Total Preferred Stocks......... 48,351
-----------
<CAPTION>
PRINCIPAL
AMOUNT
- -----------
<C> <S> <C>
CORPORATE BONDS (0.39%)
INSURANCE (0.19%)
$ 129,000 CII Financial, Inc., 7.50%
conv. sub. deb., due
September 15, 2001........... 112,230
-----------
VOCATIONAL TRAINING (0.20%)
174,000 National Education Corp., 6.50%
conv. sub. deb., due May 15,
2011......................... 122,235
-----------
Total Corporate Bonds.......... 234,465
-----------
SHORT-TERM INVESTMENTS (16.68%)
10,125,000 U.S. Treasury Bills, 4.48% to
5.39%, due January 4 to
February 15, 1996............ 10,083,843
-----------
Total Investments (100.29%).... 60,641,759
-----------
Cash, receivables and other
assets, less payables
(-0.29%)..................... (174,478)
-----------
Net Assets (100.00%)........... $60,467,281
-----------
-----------
</TABLE>
- ---------
* Non-income producing security.
The percentage shown for each investment category is the total value of that
category expressed as a percentage of the total net assets of the Fund.
See notes to financial statements.
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS
MAP-EQUITY FUND
NOTE A -- ACCOUNTING POLICIES
MAP-Equity Fund (the "Fund") is a diversified, open-end, management investment
company registered under the Investment Company Act of 1940, as amended.
Significant accounting policies of the Fund are as follows:
INVESTMENTS: Investments, except for short-term investments which are stated at
amortized cost which approximates market value, are valued at closing prices on
national securities exchanges. Securities traded on a national securities
exchange for which there are no sales on the valuation date and securities
traded over-the-counter, are valued at closing bid prices. Investment security
transactions are recorded on the date of purchase or sale. Realized gains and
losses on investment transactions are determined on the basis of identified
cost.
FEDERAL INCOME TAXES: The Fund does not provide for federal income taxes since
it intends to continue to qualify as a "regulated investment company" under the
Internal Revenue Code and to maintain this qualification by distributing each
year substantially all of its taxable net income and net realized capital gains
to its shareholders. Income dividends and capital gain distributions are
determined in accordance with Federal income tax regulations which may differ
from generally accepted accounting principles. Dividends and distributions which
exceed net investment income and net realized capital gains for financial
reporting purposes, but not for tax purposes are reported as distributions in
excess of net investment income and distributions in excess of net realized
capital gains. During the year ended December 31, 1995, the Fund realized
$404,726 of capital losses which for federal income tax purposes are treated as
if they occurred on January 1, 1996.
DIVIDENDS: Dividends receivable on investment securities and dividends payable
to shareholders are recorded on the ex-dividend date.
ESTIMATES: The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
NOTE B -- INVESTMENT ADVISORY AND SERVICE AGREEMENTS
The Fund has an investment advisory and a service agreement with Markston
Investment Management ("Adviser"), a partnership between Markston International,
Inc. ("Markston") and MBL Sales Corporation ("MBL Sales"). Markston is a 49%
general partner of Adviser, and MBL Sales is a 51% general partner. MBL Sales is
a wholly-owned subsidiary of MBLLAC Holding Corporation which is a wholly-owned
subsidiary of the MBL Life Assurance Corporation ("MBL Life"). Under the
investment advisory and service agreements, the Fund pays Adviser a periodic fee
(basic fee) at the annual rate of .50% of the first $200,000,000 of the Fund's
total net assets, .45% of the next $100,000,000 of such value, .40% of the next
$100,000,000 of such value, and .35% of such value in excess of $400,000,000.
The basic fee may be adjusted by an amount determined according to a formula
based on the Fund's performance in relation to the Standard & Poor's 500 Index
("Index"). The formula provides for a weekly increase or decrease in the basic
fee by an amount equal to .05% per annum for each full two percentage points
that the Fund's investment performance, over a 24-month period, is better or
worse than that of the Index. The maximum adjustment is .30%. The fee is
computed and accrued daily and paid quarterly. Based on the formula, for the
24-month period ended December 31, 1995, the Fund's investment performance was
3.19 percentage points worse than that of the Index, resulting in a downward
adjustment to the basic fee of 0.05%.
10
<PAGE>
NOTE B -- INVESTMENT ADVISORY AND SERVICE AGREEMENTS -- CONTINUED
In the event operating expenses of the Fund, exclusive of taxes and interest,
but including the investment advisory fee, exceed 1.5% of the first $30,000,000
of the Fund's average daily net asset value and 1% of the Fund's average daily
net asset value in excess of $30,000,000 for any fiscal year related thereto,
Adviser will reimburse the Fund promptly after the end of the fiscal year for
such excess. No reimbursement was required for the year ended December 31, 1995.
In addition, the Fund has a distribution agreement with First Priority
Investment Corporation ("FPIC"), a wholly-owned subsidiary of MBLLAC Holding
Corporation. During the year ended December 31, 1995, the Fund was advised that
FPIC received $27,388 as distributor of the Fund's shares. From this amount,
FPIC paid commissions to its sales force, as well as the cost of printing
prospectuses, advertising and other sales literature.
The compensation of each disinterested director is paid by the Fund at the rate
of $400 per meeting attended, plus an annual retainer of $900. Aggregate fees
paid during the year to the Fund's disinterested directors amounted to $7,100.
Two of the directors of the Fund and all officers of the Fund are either
officers or employees of MBL Life. The compensation of the directors, officers
and any employees of the Fund affiliated with Adviser or FPIC is paid by the
affiliated entities.
At December 31, 1995, MBL Life owned 1,546,555 Fund shares.
NOTE C -- CAPITAL STOCK
A summary of capital share transactions follows:
<TABLE>
<CAPTION>
Year Ended December 31, Year Ended December 31,
1995 1994
------------------------- ------------------------
Shares Amount Shares Amount
---------- ------------- ---------- ------------
<S> <C> <C> <C> <C>
Shares sold.................................. 47,046 $ 862,252 37,817 $ 687,005
Shares issued in reinvestment of income
dividends and capital gain distributions... 378,061 7,251,403 298,182 5,046,080
---------- ------------- ---------- ------------
425,107 8,113,655 335,999 5,733,085
Less shares repurchased...................... (189,308) (3,496,283) (175,571) (3,195,835)
---------- ------------- ---------- ------------
Net increase in number of shares outstanding
and net assets resulting from capital share
transactions............................... 235,799 $ 4,617,372 160,428 $ 2,537,250
---------- ------------- ---------- ------------
---------- ------------- ---------- ------------
</TABLE>
NOTE D -- PURCHASES AND SALES OF INVESTMENTS
Purchases and proceeds from sales of investments during the year ended December
31, 1995, other than short-term investments, aggregated $18,177,888 and
$23,964,909, respectively.
The identified cost of investments owned at December 31, 1995 for federal income
tax purposes was $44,484,122. At December 31, 1995, gross unrealized
appreciation of investments was $16,588,149 and gross unrealized depreciation
was $430,512 resulting in net unrealized appreciation of $16,157,637 for federal
income tax purposes.
------------------------------------------------------------------------------
11
<PAGE>
FINANCIAL HIGHLIGHTS
MAP-EQUITY FUND
Selected data for each share of capital stock outstanding throughout the years
indicated:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
----------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of
Year.......... $ 16.67 $ 18.13 $ 20.02 $ 19.66 $ 15.84 $ 17.46 $ 14.27 $ 11.65 $ 13.65 $ 12.89
Net investment
income........ 0.43 0.37 0.36 0.42 0.49 0.52 0.36 0.32 0.33 0.28
Net realized and
unrealized
gain (loss) on
investments... 4.90 0.13 1.32 1.65 3.87 (1.41) 3.68 3.13 (0.825) 2.455
----------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Net increase
(decrease) in
net assets
from
operations.... 5.33 0.50 1.68 2.07 4.36 (0.89) 4.04 3.45 (0.495) 2.735
Dividends from
net investment
income........ (0.43) (0.37) (0.36) (0.43) (0.49) (0.54) (0.41) (0.31) (0.475) (0.315)
Distributions
from net
realized gain
from security
transactions... (2.07) (1.59) (3.21) (1.28) (0.05) (0.19) (0.44) (0.52) (1.03) (1.66)
Distribution
required for
tax purposes
over amounts
recorded for
financial
reporting
purposes...... (0.14 ) -- -- -- -- -- -- -- -- --
----------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Total
distributions... (2.64 ) (1.96) (3.57) (1.71) (0.54) (0.73) (0.85) (0.83) (1.505) (1.975)
----------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Net Asset Value,
End of Year... $ 19.36 $ 16.67 $ 18.13 $ 20.02 $ 19.66 $ 15.84 $ 17.46 $ 14.27 $ 11.65 $ 13.65
----------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
----------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Total
Return(1)..... 32.50% 2.76% 8.67% 10.53% 27.69% -5.09% 28.18% 29.92% -4.44% 22.21%
----------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
----------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Ratios/Supplemental
Data:
Net Assets, End
of Year
(thousands)... $ 60,467 $ 48,130 $ 49,438 $ 48,602 $ 46,228 $ 37,148 $ 35,947 $ 20,752 $ 14,401 $ 15,541
----------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
----------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Ratio of
Expenses to
Average Net
Assets........ 0.81% 1.07% 1.04% 1.01% 0.85% 1.01% 1.45% 1.52% 1.34% 1.32%
----------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
----------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Ratio of Net
Investment
Income to
Average Net
Assets........ 2.30% 2.03% 1.76% 2.01% 2.69% 3.32% 2.47% 2.57% 2.29% 2.25%
----------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
----------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Portfolio
Turnover
Rate.......... 39.40% 39.31% 19.55% 17.60% 9.12% 6.22% 14.34% 16.85% 20.84% 48.47%
----------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
----------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
</TABLE>
- -------------
(1) Total return does not reflect the sales commission (maximum 4.75%) charged
on Fund shares.
See notes to financial statements.
12
<PAGE>
RECORD OF PERFORMANCE (UNAUDITED)
The primary investment objective of MAP-Equity Fund is long-term appreciation of
capital, and this can only be achieved over a period of time. The performance of
the Fund should not be judged over the short-term, but should be considered in
light of its investment policies and objectives. Following is a tabular
illustration of the Fund's history since shares of the Fund were first offered
for sale on January 21, 1971.
<TABLE>
<CAPTION>
Per share
----------------------------
<S> <C> <C> <C>
Dividends
Net asset from net Capital
value investment gains
Year ended per share income distributions
- -----------------------------------------------------------------
December 31, 1971 $ 10.81 $ .09 --
December 31, 1972 11.27 .10 $ .02
December 31, 1973 8.98 .08 --
December 31, 1974 6.52 .17 --
December 31, 1975 8.26 .155 --
December 31, 1976 9.70 .18 --
December 31, 1977 9.05 .225 --
December 31, 1978 8.86 .33 --
December 31, 1979 9.46 .43 --
December 31, 1980 10.77 .53 --
December 31, 1981 10.55 .45 --
December 31, 1982 11.60 .775 1.39
December 31, 1983 13.93 .37 .28
December 31, 1984 11.08 .39 2.51
December 31, 1985 12.89 .38 1.01
December 31, 1986 13.65 .315 1.66
December 31, 1987 11.65 .475 1.03
December 31, 1988 14.27 .31 .52
December 31, 1989 17.46 .41 .44
December 31, 1990 15.84 .54 .19
December 31, 1991 19.66 .49 .05
December 31, 1992 20.02 .43 1.28
December 31, 1993 18.13 .36 3.21
December 31, 1994 16.67 .37 1.59
December 31, 1995 19.36 .43 2.21
- -----------------------------------------------------------------
</TABLE>
PORTFOLIO CHANGES (UNAUDITED)
For the year ended December 31, 1995:
INVESTMENTS ADDED
Allmerica Property & Casualty Co.
American Express Co.
Apache Corp.
Cinergy Corp.
Cooper Companies, Inc.
Cray Research, Inc.
Dave & Buster's, Inc.
Digital Equipment Corp.
Dun & Bradstreet Corp.
Eastman Chemical Co.
Emerging Tigers Fund, Inc.
Global Government Plus Fund, Inc.
Global Income Plus Fund, Inc.
Global Total Return Fund, Inc.
GT Greater Europe Fund
Intel Corp.
Lone Star Industries, Inc.
Luby's Cafeterias, Inc.
National Education Corp.
NextHealth, Inc.
Oshkosh B'Gosh, Inc., Class A
Quaker Oats Co.
Teledyne, Inc., Series E (preferred)
Times Mirror Co., Series A
INVESTMENTS ELIMINATED
Americana Hotels & Realty Corp.
Archer-Daniels-Midland Co.
Avnet, Inc.
Caldor Corp.
Dave & Buster's, Inc.
DEKALB Energy Co., Class B
DEKALB Genetics Corp., Class B
Eastman Chemical Co.
Edison Brothers Stores, Inc.
First Union Real Estate Equity & Mortgage Investments
Global Income Plus Fund, Inc.
GT Greater Europe Fund
International Dairy Queen, Inc.
IRT Property Co.
Jundt Growth Fund, Inc.
KeyCorp
McWhorter Technologies, Inc.
Murphy Oil Corp.
National Presto Industries, Inc.
Occidental Petroleum Corp.
Pacific Enterprises
Phoenix Technologies, Ltd.
Questar Corp.
Santa Cruz Operation, Inc.
Sierra Tucson Co., Inc.
Stanhome, Inc.
State of the Art, Inc.
Sunshine Mining Co. (preferred)
United States Shoe Corp.
Westwood One, Inc.
13
<PAGE>
MAP-EQUITY FUND
520 Broad Street
Newark, New Jersey 07102-3111
1-800-559-5535
FUND DIRECTORS
Eugene J. Ciarkowski
Horace J. DePodwin
Herbert M. Groce Jr.
Kathleen M. Koerber
Jerome M. Scheckman
INVESTMENT ADVISER
Markston Investment Management
1 North Lexington Avenue
White Plains, New York 10601-1702
DISTRIBUTOR
First Priority Investment Corporation
520 Broad Street
Newark, New Jersey 07102-3111
1-800-559-5535
CUSTODIAN and TRANSFER AGENT
State Street Bank & Trust Co.
P.O. Box 8500
Boston, Massachusetts 02266-8500
1-800-343-0529
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
THIS REPORT HAS BEEN PREPARED FOR THE SHAREHOLDERS OF THE FUND. IT IS NOT
AUTHORIZED FOR OTHER DISTRIBUTION UNLESS PRECEDED OR ACCOMPANIED BY A CURRENT
PROSPECTUS, WHICH INCLUDES INFORMATION CONCERNING THE FUND AND THE SALES
COMMISSION CHARGED ON FUND SHARES.
[LOGO]
ANNUAL REPORT
DECEMBER 31, 1995
FS-306 (2-96)
15152
-------------------------------
<PAGE>
