<PAGE>
MAP-EQUITY FUND
To Our Shareholders:
PERFORMANCE AND RECOGNITION
For the six months ending June 30, 1998, MAP-Equity Fund returned 13.6% after
expenses versus the Standard & Poor's 500 Index ("S&P 500") return of 17.7%. The
S&P 500 is a generally accepted index of unmanaged securities, unburdened by
expenses. We estimate that the risk level of the portfolio was 88.3% of the
market for the period.
MAP-Equity continues to earn Morningstar's highest 5-star (*****) rating as well
as public recognition of its historical performance. The Fund maintained its
overall five-star rating as of June 30, 1998 for the last 3-, 5-, and 10-year
periods.(1) (Note: There are 2,545, 1,462, and 707 funds in Morningstar's
domestic equity category for the 3-, 5-, and 10-year periods, respectively.)
MAP-Equity was featured as one of "The Money 100--The World's Best Mutual Funds"
in the June issue of MONEY magazine. In July of this year, MONEY also named
MAP-Equity number 27 in its list of the "Top 50 Stock Funds of the Bull Market."
IMPORTANT ORGANIZATIONAL DEVELOPMENTS
Very recently, you received a "sticker" supplement to your MAP-Equity prospectus
dated August 6. This notice announced the proposed sale of most of the life
insurance and annuity businesses of MAP-Equity's current sponsor, MBL Life
Assurance Corporation, to Anchor National Life Insurance Company, a subsidiary
of SunAmerica, Inc. The supplement also described the possible effects of that
transaction on MAP-Equity, on its investment adviser, Markston Investment
Management, and on its distributor, First Priority Investment Corporation. I
want to further discuss what this announcement and related actions may mean for
MAP-Equity and for you as an investor in the Fund, including the future
directions currently being considered by MAP-Equity's Board of Directors.
THE BOARD IS EXPLORING ALL POSSIBLE OPTIONS FOR CONTINUING THE FUND, BUT
ADMINISTRATIVE AND ORGANIZATIONAL CHANGES WILL BE NECESSARY.
MBL Life indirectly holds a 51 percent partnership interest in Markston
Investment Management; the remaining 49% is held by the portfolio managers. As
it now stands, MBL Life and SunAmerica are currently negotiating a possible sale
of MBL Life's interest. If there is a change of control of Markston, the Board
of Directors and shareholders will be asked to approve a new investment advisory
agreement.
In any event, the distributor, First Priority, which is an indirectly owned
subsidiary of MBL Life, will most likely be dissolved at some point in 1999. MBL
Life will also cease to be the Fund's sponsor at that time.
In light of these facts, the Board is also considering other steps it might
take, including continuing the current investment advisory relationship with
Markston, retaining a new investment adviser, affiliating with a new
distributor, and hiring a third-party organization to provide administrative
services. Of course, you will be asked to approve any new investment advisory
and/or distribution agreements.
The sale of MBL Life's insurance businesses will effect a resolution to the
Mutual Benefit Life Rehabilitation. As a result, MBL Life, which owns 49 percent
of the outstanding shares of MAP-Equity, will redeem its shares completely. This
will be done through a pro rata distribution of assets, without creating taxable
gain, loss, or income for the Fund. This large withdrawal will affect the Fund's
operating costs to a certain degree. To
- ---------
(1)Morningstar's proprietary ratings reflect risk-adjusted performance and are
subject to change each month. Overall ratings are calculated from the Fund's 3-,
5-, and 10-year average annual returns in excess of 90-day T-bills with
appropriate fee adjustments and a risk factor that reflects fund performance
below 90-day T-bill returns. The top 10% of funds in an investment category
receive five stars. For a copy of the current Morningstar report, including its
analysis, please call First Priority Investment Corporation.
<PAGE>
lessen the impact on the remaining shareholders through the end of this year,
First Priority will assume the operating expenses of the Fund (with some
exceptions) to the extent the expenses exceed one percent (on an annualized
basis) of daily net assets.
As the important issues related to MAP-Equity's future organization are
resolved, shareholders will receive timely notice and will have the opportunity
to approve certain proposed changes. In evaluating any alternatives, you should
know that the Board is committed to maintaining the Fund's record of superior
investment performance, reasonable expense levels and high quality shareholder
services. In the meantime, we appreciate your continued support and welcome your
comments and observations.
Sincerely,
[SIGNATURE]
KATHLEEN M. KOERBER
PRESIDENT
August 10, 1998
2
<PAGE>
REPORT OF THE INVESTMENT ADVISER
Dear Fellow Shareholders:
For the first six months of 1998, the MAP-Equity Fund posted appreciation of
13.6% and maintained its five star rating (*****) from Morningstar. During this
period, the Fund carried a risk level that was 88.3% of the market. In addition,
Morningstar cited MAP-Equity as one of the most under appreciated funds of 1997.
Recent market volatility has served as a wake-up call for many investors. The
relatively smooth ride they have come to enjoy and expect appears to have hit a
bump in the road. While not able to predict the future, we continue to strive to
deliver long-term appreciation of capital coupled with a moderate level of risk.
Some of our better performers during the first half include Allmerica Financial,
Harte-Hanks, Pharmacia & Upjohn, National Computer Systems and Time Warner.
ALLMERICA appreciated 30% during the first half. It is a former mutual insurance
company that has been transformed by Jack O'Brien, formerly #2 to Ned Johnson at
Fidelity. Under O'Brien, Allmerica has emerged as one of the fastest growing
sellers of annuities in the U.S.
HARTE-HANKS also helped appreciating 39% in the first half. Harte-Hanks is the
leading domestic provider of marketing services, as well as the largest
publisher of weekly shoppers. Both businesses enjoy above average internal
growth and above average cash margins. This has enabled Harte-Hanks to further
enhance its growth by acquiring complementary small marketing companies. All of
this became apparent after Harte-Hanks sold its slow growing newspapers in
October 1997. In our view, Wall Street is just beginning to recognize the
positive changes.
PHARMACIA & UPJOHN increased 26% during the first half of 1998. It has posted
surprisingly positive results while it continues to pursue new product
opportunities and move toward a performance based culture.
NATIONAL COMPUTER SYSTEMS (NLCS) also helped performance by appreciating 36%
during the first half. The new CEO at NLCS, Russ Gullotti, has changed the
culture at the company and narrowed its focus to the domestic education market.
The company's competitive position has been strengthened through a series of
small acquisitions which have made NLCS one of the leaders in supplying software
and services to the Kindergarten through 12(th) grade market. All of this is
happening against a culture wide move toward higher expectations from our
schools. The change in cultural expectations shows up in the statewide testing
contracts NLCS is receiving to measure the competency of our schools. NLCS
dominates this business. Overall, we expect the company to post 15% to 17%
internal growth over the next three to five years.
There were several reasons TIME WARNER appreciated 38% during the first half.
AT&T's purchase of Telecommunications, Inc. stock highlighted the value placed
on cable systems. Time Warner's systems are well clustered and already have
undergone significant upgrades. As a result of these capital investments, net
capital spending (capital spending minus depreciation) should be flat through
2001, resulting in surging free cash flow which will be used to pay down debt
and repurchase shares. We would not be surprised to see Time Warner enter a
strategic alliance with a long distance carrier to further leverage the value of
their cable systems.
Two of our poorer performers during the first half were MedPartners and Global
DirectMail.
MEDPARTNERS stock price continued to drop despite a new management team that is
heavily incentivized with stock options. There are several issues management
must deal with. One is relations with key physician
3
<PAGE>
groups in the aftermath of the stock decline. Many physicians received stock
when they sold their practices to MedPartners, which subsequently declined
dramatically. There may be ill-will towards the company. Another issue is the
degree to which management can renegotiate unprofitable contracts. It is not in
HMO's interest to have a financially unstable provider of services which could
potentially compromise the quality of care. A third issue is whether the company
can sell non strategic assets at an attractive price.
GLOBAL DIRECTMAIL declined after it announced that sales in May were below
budget and that second quarter earnings were likely to come in at roughly half
of the previous expectations. We believe that this entrepreneurially run
enterprise will adjust operations to achieve acceptable profitability
Sincerely,
[SIGNATURE]
MICHAEL J. MULLARKEY
Managing Director
MARKSTON INVESTMENT MANAGEMENT
August 10, 1998
4
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
MAP-EQUITY FUND
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investments:
Common stocks (cost $59,841,528).............................................. $ 89,704,090
Preferred stocks (cost $183,286).............................................. 551,963
Short-term investments (cost $19,017,936)..................................... 19,017,936
------------
109,273,989
Cash............................................................................ 19,926
Receivable for investment securities sold....................................... 360,213
Receivable for Fund shares sold................................................. 94,925
Dividends and interest receivable............................................... 80,968
Other assets.................................................................... 6,415
------------
Total Assets............................................................ 109,836,436
------------
LIABILITIES
Payable for investment securities purchased..................................... 285,189
Accrued investment advisory fee................................................. 88,232
Accounts payable and accrued expenses........................................... 58,853
------------
Total Liabilities....................................................... 432,274
------------
Net Assets.............................................................. $109,404,162
------------
------------
NET ASSETS
Capital stock (4,238,414 shares of $1.00 par value capital stock outstanding,
21,000,000 shares authorized)................................................. $ 4,238,414
Paid-in capital................................................................. 65,054,671
Accumulated undistributed net investment income................................. 609,423
Accumulated undistributed net realized gain from security transactions.......... 9,270,415
Net unrealized appreciation of investments...................................... 30,231,239
------------
Net Assets.............................................................. $109,404,162
------------
------------
Net asset value and redemption price per share ($109,404,162 DIVIDED BY
4,238,414 shares of capital stock outstanding)................................ $25.81
------------
------------
Computation of maximum public offering price per share -- $25.81 DIVIDED BY
.9525 (on sales of $50,000 or more, the maximum sales charge and, accordingly,
the offering price, is reduced)............................................... $27.10
------------
------------
</TABLE>
STATEMENT OF OPERATIONS
MAP-EQUITY FUND
SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
Investment Income:
Dividends..................................................................... $ 590,025
Interest...................................................................... 298,137
------------
888,162
Expenses:
Investment advisory fee....................................................... 188,089
Transfer Agent................................................................ 39,304
Custodian..................................................................... 36,423
Audit......................................................................... 13,700
State taxes................................................................... 10,520
Legal......................................................................... 9,000
Filing fees................................................................... 8,488
Insurance expense............................................................. 6,989
Printing...................................................................... 6,718
Directors' fees............................................................... 4,000
Miscellaneous................................................................. 2,855
------------
326,086
------------
Net Investment Income................................................... 562,076
------------
Realized and Unrealized Gain on
Investments:
Net realized gain from security transactions.................................. 7,459,799
Increase in unrealized appreciation of investments............................ 4,760,264
------------
Net Gain on Investments..................................................... 12,220,063
------------
Net Increase in Net Assets Resulting from Operations........................ $ 12,782,139
------------
------------
</TABLE>
See notes to financial statements.
5
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
MAP-EQUITY FUND
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
1998 1997
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS
Net investment income..................................... $ 562,076 $ 1,004,104
Net realized gain from security transactions.............. 7,459,799 13,691,368
Increase in unrealized appreciation of investments........ 4,760,264 6,028,801
------------- -------------
Net Increase in Net Assets Resulting from Operations.... 12,782,139 20,724,273
------------- -------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income...................... 0 (1,043,783)
Distributions from net realized gain from security
transactions............................................ 0 (12,333,249)
------------- -------------
Total Distributions to Shareholders..................... 0 (13,377,032)
------------- -------------
FROM CAPITAL SHARE TRANSACTIONS
Net increase in net assets from capital share
transactions............................................ 2,449,833 13,234,335
------------- -------------
Net Increase in Net Assets.............................. 15,231,972 20,581,576
NET ASSETS
Beginning of period....................................... 94,172,190 73,590,614
------------- -------------
End of period (including undistributed net investment
income of $609,423 and $47,347, respectively)........... $109,404,162 $ 94,172,190
------------- -------------
------------- -------------
</TABLE>
See notes to financial statements.
6
<PAGE>
SCHEDULE OF PORTFOLIO INVESTMENTS
MAP-EQUITY FUND
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER
OF
SHARES MARKET VALUE
- -------------- -------------
<C> <S> <C>
COMMON STOCKS (81.99%)
COMPUTER SOFTWARE (0.02%)
1,800 Cirrus Logic, Inc.*................................................... $ 20,025
-------------
CONSUMER NON-DURABLES (8.93%)
61,780 Archer Daniels Midland Co............................................. 1,196,987
13,600 Bestfoods, Inc........................................................ 789,650
10,600 Clorox Co............................................................. 1,010,975
14,900 Coca-Cola Co.......................................................... 1,273,950
12,300 First Brands Corp..................................................... 315,187
28,576 Gillette Co........................................................... 1,619,902
37,000 National Service Industries, Inc...................................... 1,882,375
6,800 Newell Co............................................................. 338,725
22,400 Quaker Oats Co........................................................ 1,230,600
4,100 Tupperware Corp....................................................... 115,313
-------------
9,773,664
-------------
ENERGY (2.03%)
19,000 Amoco Corp............................................................ 790,875
1,774 Apache Corp........................................................... 55,881
4,900 Pennzoil Co........................................................... 248,063
2,000 Petroleum Helicopters, Inc., voting................................... 40,000
5,800 Petroleum Helicopters, Inc., non-voting............................... 116,000
17,600 Royal Dutch Petroleum Co.............................................. 964,700
-------------
2,215,519
-------------
FINANCIAL SERVICES (11.02%)
79,284 Allmerica Financial Corp.............................................. 5,153,460
8,400 American Express Co................................................... 957,600
5,600 Argonaut Group, Inc................................................... 177,100
29,500 Health Care Property Investors, Inc................................... 1,063,844
26,400 Northern Trust Corp................................................... 2,011,350
25,032 Popular, Inc.......................................................... 1,661,499
15,700 Reliance Group Holdings, Inc.......................................... 274,750
1,804 St. Paul Companies, Inc............................................... 75,881
48,900 United Dominion Realty Trust, Inc..................................... 678,488
-------------
12,053,972
-------------
HEALTH CARE (10.69%)
70,300 Access Health, Inc.*.................................................. 1,792,650
15,900 Biogen, Inc.*......................................................... 777,112
<CAPTION>
NUMBER
OF
SHARES MARKET VALUE
- -------------- -------------
<C> <S> <C>
HEALTH CARE (CONTINUED)
8,100 Cooper Companies, Inc.*............................................... $ 295,144
21,200 Humana, Inc.*......................................................... 661,175
4,000 Johnson & Johnson..................................................... 295,000
213,857 Medpartners, Inc.*.................................................... 1,710,856
100,600 Pharmacia & Upjohn, Inc............................................... 4,640,175
16,600 Schering-Plough Corp.................................................. 1,520,975
-------------
11,693,087
-------------
INDUSTRIAL (9.45%)
55,900 Commscope, Inc.*...................................................... 904,881
6,300 Cummins Engine, Inc................................................... 322,875
35,700 Dravo Corp.*.......................................................... 327,994
7,600 IMC Global, Inc....................................................... 228,950
14,700 Lone Star Industries, Inc............................................. 1,132,819
21,300 Minnesota Mining & Manufacturing Co................................... 1,750,594
19,600 Morgan Products Ltd.*................................................. 89,425
20,600 Ogden Corp............................................................ 570,363
34,088 Pentair, Inc.......................................................... 1,448,740
6,800 Valspar Corp.......................................................... 269,450
30,900 Vulcan Materials Co................................................... 3,296,644
-------------
10,342,735
-------------
MEDIA/ENTERTAINMENT/LEISURE (17.30%)
178,166 ACNielsen Corp.*...................................................... 4,498,691
17,500 Cognizant Corp........................................................ 1,102,500
24,000 Dun & Bradstreet Corp................................................. 867,000
22,700 Eastman Kodak Co...................................................... 1,658,519
218,200 Harte-Hanks Communications............................................ 5,632,287
9,600 Information Resources, Inc.*.......................................... 177,600
5,821 Mattel, Inc........................................................... 246,301
30,400 Meredith Corp......................................................... 1,426,900
19,900 Nelson, Thomas Inc.................................................... 266,162
30,300 Time Warner, Inc...................................................... 2,588,756
7,400 Times Mirror Co., Series A............................................ 465,275
-------------
18,929,991
-------------
MISCELLANEOUS (0.60%)
12,700 Catalina Marketing Corp.*............................................. 659,606
-------------
PUBLISHING (0.08%)
26,600 R.H. Donnelley Corp.*................................................. 80,759
-------------
</TABLE>
7
<PAGE>
SCHEDULE OF PORTFOLIO INVESTMENTS -- CONTINUED
MAP-EQUITY FUND
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER
OF
SHARES MARKET VALUE
- -------------- -------------
<C> <S> <C>
RETAIL (8.11%)
66,980 Burlington Coat Factory Warehouse Corp................................ $ 1,507,050
83,246 CVS Corp.............................................................. 3,241,391
46,809 Cash America International, Inc....................................... 713,837
113,500 Charming Shoppes, Inc.*............................................... 535,578
32,624 Genovese Drug Stores, Inc., Class A................................... 640,246
7,900 Hartmarx Corp.*....................................................... 59,744
2,100 Meyer, Fred, Inc.*.................................................... 89,250
23,500 Oshkosh B'Gosh, Inc., Class A......................................... 1,045,750
67,900 Vicorp Restaurants, Inc.*............................................. 1,043,963
-------------
8,876,809
-------------
TECHNOLOGY (8.65%)
13,000 3-D Systems Corp.*.................................................... 127,563
26,700 Avid Technology, Inc.*................................................ 892,781
16,700 Bay Networks, Inc.*................................................... 538,575
1,600 Calcomp Technology, Inc.*............................................. 3,800
45,800 Checkpoint Systems, Inc.*............................................. 646,925
17,000 Electronic Data Systems Corp.......................................... 680,000
16,100 Glenayre Technologies, Inc.*.......................................... 173,075
76,600 Global Directmail Corp.*.............................................. 967,075
3,000 Motorola, Inc......................................................... 157,687
142,200 National Computer Systems, Inc........................................ 3,395,025
12,400 Shared Medical System Corp............................................ 910,625
4,000 Triquint Semiconductor, Inc.*......................................... 76,000
23,389 Vishay Intertechnology, Inc.*......................................... 419,540
30,600 Xircom, Inc.*......................................................... 474,300
-------------
9,462,971
-------------
UTILITIES (5.11%)
15,100 Cinergy Corp.......................................................... 528,500
5,412 Duke Power Co......................................................... 320,661
4,500 Eastern Utilities Assoc............................................... 118,125
<CAPTION>
NUMBER
OF
SHARES MARKET VALUE
- -------------- -------------
<C> <S> <C>
UTILITIES (CONTINUED)
20,000 GTE Corp.............................................................. $ 1,112,500
62,421 Houston Industries, Inc............................................... 1,927,248
9,150 Northwest Natural Gas Co.............................................. 255,628
5,000 Piedmont Natural Gas, Inc............................................. 168,125
15,530 Sprint Corp........................................................... 1,094,865
4,400 UniSource Energy Corp.*............................................... 69,300
-------------
5,594,952
-------------
TOTAL COMMON STOCKS................................................... 89,704,090
-------------
PREFERRED STOCKS (0.51%)
MEDIA/ENTERTAINMENT/LEISURE (0.44%)
17,004 News Corp. Ltd., limited voting*...................................... 480,363
-------------
MISCELLANEOUS (0.07%)
6,400 Craig Corp., Class A*................................................. 71,600
-------------
TOTAL PREFERRED STOCKS................................................ 551,963
-------------
<CAPTION>
PRINCIPAL
AMOUNT
- --------------
<C> <S> <C>
SHORT-TERM INVESTMENTS (17.38%)
$ 19,085,000 U.S. Treasury Bills, 4.59% to 4.95%,
due July 2 to August 13, 1998....................................... 19,017,936
-------------
TOTAL INVESTMENTS (99.88%)............................................ $ 109,273,989
-------------
-------------
</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.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS
MAP-EQUITY FUND (UNAUDITED)
NOTE A -- SIGNIFICANT 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.
DIVIDENDS AND INTEREST INCOME: Dividends from investment securities and
dividends to shareholders are recorded on the ex-dividend date and interest is
accrued as earned. Discounts or premiums on debt securities purchased are
accreted or amortized to interest income over the lives of the respective
securities.
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 investment advisory and service agreements 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
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% of net assets 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. For the period
ended June 30, 1998, the basic advisory fee amounted to $254,254. The actual fee
amounted to $188,089 which reflected a downward performance adjustment of
$66,165.
9
<PAGE>
NOTE B -- INVESTMENT ADVISORY AND SERVICE AGREEMENTS -- CONTINUED
In addition, the Fund has a distribution agreement with First Priority
Investment Corporation ("FPIC"), a wholly-owned subsidiary of MBLLAC Holding
Corporation. During the period ended June 30, 1998, the Fund was advised that
FPIC received $78,062 as distributor of the Fund's shares. FPIC paid this amount
to its sales force.
The compensation of each disinterested director is paid by the Fund at the rate
of $400 per meeting attended, plus an annual retainer of $1,200. Aggregate fees
paid during the period to the Fund's disinterested directors amounted to $2,600.
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.
NOTE C -- RELATED PARTY TRANSACTIONS
As of June 30, 1998, MBL Life owned 2,087,581 or 49% of the outstanding shares
of the Fund.
On July 15, 1998, MBL Life entered into an agreement with Anchor National Life
Insurance Company, a subsidiary of SunAmerica, Inc. ("SunAmerica"), for the
purchase of the individual life and individual and group annuity businesses of
MBL Life (the "Acquisition"). In accordance with the Plan of Rehabilitation of
The Mutual Benefit Life Insurance Company (the predecessor in interest to MBL
Life), the Acquisition is subject to certain judicial and regulatory approvals.
Assuming that the necessary approvals are obtained, it is currently anticipated
that the Acquisition will occur no later than December 31, 1998 (the "Closing").
The Acquisition will effect a resolution to the proceedings associated with the
Plan of Rehabilitation.
In connection with the resolution of the proceedings associated with the Plan of
Rehabilitation, MBL Life has indicated its intent to redeem its entire interest
in the Fund. Redemptions of Fund shares by MBL Life will cause the Fund's ratio
of expenses to average net assets to increase. However, FPIC has agreed to
assume the operating expenses of the Fund (excluding taxes, interest, brokerage
commissions and extraordinary expenses) to the extent such daily expenses exceed
1.00% on an annualized basis of the Fund's daily net assets through December 31,
1998.
At present, MBL Life's interest in Adviser will not be included in the
Acquisition. However, Sun America and MBL Life have agreed to negotiate for a
sale of MBL Life's interest in Adviser during the sixty day period beginning on
July 15, 1998. Also, under the terms of the Acquisition, MBL Life's interest in
FPIC will not be included in the assets of MBL Life that are transferred to
Anchor National. At the present time, it is anticipated that FPIC will begin the
process of terminating all business operations at some point in time after the
Closing.
10
<PAGE>
NOTE D -- CAPITAL STOCK
A summary of capital share transactions follows:
<TABLE>
<CAPTION>
Six Months Ended June 30, 1998 Year Ended December 31, 1997
--------------------------------- ---------------------------------
Shares Amount Shares Amount
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Shares sold................................. 150,120 $ 3,798,462 133,282 $ 3,080,596
Shares issued in reinvestment of income
dividends and capital gain
distributions............................. 0 0 563,972 12,915,669
------------- ------------- ------------- -------------
150,120 3,798,462 697,254 15,996,265
Less shares repurchased..................... (54,681) (1,348,629) (116,774) (2,761,930)
------------- ------------- ------------- -------------
Net increase in number of shares outstanding
and net assets resulting from capital
share transactions........................ 95,439 $ 2,449,833 580,480 $ 13,234,335
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
NOTE E -- PURCHASES AND SALES OF INVESTMENTS
Purchases and proceeds from sales of investments during the period ended June
30, 1998, other than short-term investments, aggregated $13,338,787 and
$18,740,573, respectively.
The identified cost of investments owned at June 30, 1998 for federal income tax
purposes was $79,042,750. At June 30, 1998, gross unrealized appreciation of
investments was $32,630,344 and gross unrealized depreciation was $2,399,105
resulting in net unrealized appreciation of $30,231,239 for federal income tax
purposes.
NOTE F -- DISTRIBUTIONS AND DIVIDENDS
A capital gain distribution and income dividend of $0.43 and $0.14 per share,
respectively, was declared by the Board of Directors on August 20, 1998, payable
on September 1, 1998 to shareholders of record on August 20, 1998.
------------------------------------------------------------------------------
11
<PAGE>
FINANCIAL HIGHLIGHTS
MAP-EQUITY FUND
(UNAUDITED)
Selected data for each share of capital stock outstanding throughout the periods
indicated:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, ----------------------------------
1998 1997 1996 1995 1994
----------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period............................ $ 22.73 $ 20.66 $ 19.36 $ 16.67 $ 18.13
----------- ------- ------- ------- -------
Net investment income............... 0.13 0.28 0.36 0.43 0.37
Net realized and unrealized gain on
investments....................... 2.95 5.49 4.16 4.90 0.13
----------- ------- ------- ------- -------
Net increase in net assets from
operations........................ 3.08 5.77 4.52 5.33 0.50
----------- ------- ------- ------- -------
Dividends from net investment
income............................ -- (0.29) (0.36) (0.43) (0.37)
Distributions from net realized gain
from security transactions........ -- (3.41) (2.86) (2.07) (1.59)
Distribution in excess of net
investment income (see Note A).... -- -- -- (0.14) --
----------- ------- ------- ------- -------
Total distributions................. -- (3.70) (3.22) (2.64) (1.96)
----------- ------- ------- ------- -------
Net Asset Value, End of Period...... $ 25.81 $ 22.73 $ 20.66 $ 19.36 $ 16.67
----------- ------- ------- ------- -------
----------- ------- ------- ------- -------
Total Return(1)..................... 13.55% 27.99% 23.82% 32.50% 2.76%
----------- ------- ------- ------- -------
----------- ------- ------- ------- -------
Ratios/Supplemental Data:
Net Assets, End of Period
(thousands)....................... $109,404 $94,172 $73,591 $60,467 $48,130
----------- ------- ------- ------- -------
----------- ------- ------- ------- -------
Ratio of Expenses to Average Net
Assets............................ 0.32% 0.82% 0.74% 0.81% 1.07%
----------- ------- ------- ------- -------
----------- ------- ------- ------- -------
Ratio of Net Investment Income to
Average Net Assets................ 0.54% 1.18% 1.82% 2.30% 2.03%
----------- ------- ------- ------- -------
----------- ------- ------- ------- -------
Portfolio Turnover Rate............. 14.51% 57.57% 52.88% 39.40% 39.31%
----------- ------- ------- ------- -------
----------- ------- ------- ------- -------
Average Commission Rate Paid........ $0.0232 $0.0235 $0.0261 -- --
----------- ------- ------- ------- -------
----------- ------- ------- ------- -------
</TABLE>
- ----------
(1) Total return does not reflect the sales commission (maximum 4.75%) charged
on Fund shares.
See notes to financial statements.
12
<PAGE>
NET ASSET VALUES AND PAYOUTS
(UNAUDITED)
Following is a tabular illustration of the Fund's history since shares of the
Fund were first offered for sale on January 21, 1971. Prior to May 1, 1995, the
Fund was known as the Mutual Benefit Fund.
<TABLE>
<CAPTION>
Per share
--------------------------
Dividends
Net asset from net Capital
value investment gains
Period ended per share income distributions
- ----------------------------------------------------------
<S> <C> <C> <C>
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
December 31, 1996 20.66 .36 2.86
December 31, 1997 22.73 .29 3.41
June 30, 1998 25.81 -- --
- ----------------------------------------------------------
</TABLE>
PORTFOLIO CHANGES (UNAUDITED)
For the period ended June 30, 1998:
INVESTMENTS ADDED
Cirrus Logic, Inc.
Commscope, Inc.
Information Resources, Inc.
Johnson & Johnson
Meyer, Fred, Inc.
Pennzoil Co.
R.H. Donnelley Corp.
St. Paul Companies, Inc.
Triquint Semiconductor, Inc.
INVESTMENTS ELIMINATED
Adobe Systems, Inc.
CII Financial, Inc. (bonds)
Hasbro, Inc.
Imation Corp.
Integrated Systems, Inc.
Intel Corp.
Lubrizol Corp.
Mazel Stores, Inc.
McDonald's Corp.
National Education Corp. (bonds)
Olsten Corp.
Pete's Brewing Co.
Stanhome, Inc.
Storage Technology Corp.
USF&G Corp.
13
<PAGE>
MAP-EQUITY FUND
520 Broad Street
Newark, New Jersey 07102-3111
1-800-559-5535
FUND DIRECTORS
William G. Clark
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
PricewaterhouseCoopers 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.
FS-306 (8-98)
15152
[LOGO]
MAP-
EQUITY FUND
SEMIANNUAL REPORT
JUNE 30, 1998
--------------------
