MONTEREY
MUTUAL
FUND
Annual Report
November 30, 1997
<PAGE>
Dear Shareholder:
November 30, 1997 marked the end of an eventful year for your family of mutual
funds. In December of 1996 shareholders approved a number of changes in the
Funds' administrative structure; a number of Funds changed their names at that
time to reflect modifications in investment focus. Then in March of 1997 the
family changed its name from Monitrend to Monterey. Also in March the family
added an eighth series, the PIA Global Bond Fund.
Despite these changes, some very fundamental aspects of the fund family have
stayed the same. The Funds continue to be managed by experienced investment
management firms and serviced by industry leaders in the fields of custody,
transfer agency and administration. Shareholder servicing facilities have been
upgraded and will continue to offer shareholders current investment options,
including the new Roth IRA and Simple IRA account applications.
The investment management of the Funds is performed by three different firms.
Pacific Income Advisers, Inc. of Santa Monica, California, acts as investment
adviser to the Government Fund, the Equity Fund, the Short-Term Government Fund
and the Global Bond Fund. (Camborne Advisors, Inc. of Dallas, Texas, acts as
sub-adviser to the Government Fund.) Murphy Investment Management, Inc. of Half
Moon Bay, California acts as investment adviser of the Technology Fund, the
Biotechnology Fund and the Convertibles Fund. Orrell Capital Management, a
division of Orrell and Company of San Francisco, California, acts as investment
adviser to the Gold Fund.
The following pages provide detailed information regarding your Fund's schedule
of investments, statement of assets and liabilities, operating results and
financial highlights. We trust you will find the information useful. We
appreciate your continued support of Monterey Mutual Fund.
Lloyd McAdams
Chairman of the Board
-2-
<PAGE>
FOLLOWING, IS A BRIEF DESCRIPTION AND SUMMARY OF VOTING ON PROPOSALS THAT WERE
PUT BEFORE THE SHAREHOLDERS AT A SPECIAL MEETING OF THE SHAREHOLDERS HELD ON
DECEMBER 13, 1996
BIOTECHNOLOGY SERIES
(FORMERLY GAMING AND LEISURE SERIES)
FOR AGAINST ABSTAIN
--- ------- -------
1. ELECTION OF TRUSTEES 21,939 0 0
2. PROPOSAL TO APPROVE A CHANGE IN THE
INVESTMENT OBJECTIVE OF THE GAMING &
LEISURE FUND AND RELATED CHANGE IN
ITS INVESTMENT RESTRICTIONS TO
REQUIRE IT TO CONCENTRATE ITS
INVESTMENTS IN THE GROUP OF
INDUSTRIES CONSTITUTING THE
BIOTECHNOLOGY SECTOR 19,370 1,503 1,066
3. PROPOSAL TO APPROVE CHANGE IN THE
INVESTMENT RESTRICTIONS OF THE
GAMING AND LEISURE FUND TO PERMIT IT
TO EFFECT
SHORT SALES 19,968 1,373 598
4. PROPOSAL TO APPROVE A CHANGE IN THE
INVESTMENT RESTRICTIONS OF THE
GAMING AND LEISURE FUND TO PERMIT IT
TO PURCHASE
RESTRICTED SECURITIES 19,002 1,745 1,192
5. PROPOSAL TO APPROVE A CHANGE IN THE
INVESTMENT RESTRICTIONS OF THE
GAMING AND LEISURE FUND TO PERMIT IT
TO PURCHASE
FOREIGN SECURITIES AND CURRENCIES 19,981 1,958 0
6. PROPOSAL TO APPROVE CHANGE IN THE
INVESTMENT RESTRICTIONS OF THE
GAMING AND LEISURE FUND TO PERMIT IT
TO LEND ITS
PORTFOLIO SECURITIES 19,500 2,439 0
7. PROPOSAL FOR A NEW INVESTMENT
ADVISORY AGREEMENT BETWEEN MONITREND
MUTUAL FUND AND MURPHY INVESTMENT
MANAGEMENT, INC
WITH RESPECT TO THE GAMING & LEISURE FUND 18,752 2,569 468
-3-
<PAGE>
TECHNOLOGY SERIES
FOR AGAINST ABSTAIN
--- ------- -------
1. ELECTION OF TRUSTEES 20,128 975 0
2. PROPOSAL TO APPROVE A NEW INVESTMENT
ADVISORY AGREEMENT BETWEEN MONITREND
MUTUAL FUND AND MURPHY INVESTMENT
MANAGEMENT, INC. WITH RESPECT TO THE
TECHNOLOGY FUND 18,546 975 1,582
GOVERNMENT SERIES
1. ELECTION OF TRUSTEES 53,620 0 0
2. PROPOSAL TO APPROVE A CHANGE IN THE
INVESTMENT RESTRICTIONS OF THE
PIA-MONITREND GOVERNMENT INCOME FUND
TO PERMIT IT TO
PURCHASE FOREIGN SECURITIES AND CURRENCIES 36,813 16,807 0
3. PROPOSAL TO APPROVE A NEW INVESTMENT
ADVISORY AGREEMENT BETWEEN MONITREND
MUTUAL FUND AND PACIFIC INCOME
ADVISERS, INC. WITH RESPECT T THE
PIA-MONITREND
GOVERNMENT INCOME FUND 52,567 0 1,053
4. PROPOSAL TO APPROVE A NEW
SUB-ADVISORY AGREEMENT BETWEEN
PACIFIC INCOME ADVISERS, INC. AND
CAMBORNE ADVISORS, INC. WITH RESPECT
TO THE PIA-MONITREND
GOVERNMENT INCOME FUND 53,620 0 0
-4-
<PAGE>
GOLD SERIES
FOR AGAINST ABSTAIN
--- ------- -------
1. ELECTION OF TRUSTEES 93,336 0 0
2. PROPOSAL TO APPROVE A CHANGE IN THE
INVESTMENT RESTRICTIONS OF THE GOLD
FUND TO PERMIT IT TO PURCHASE
RESTRICTED
SECURITIES 91,744 1,417 175
3. PROPOSAL TO APPROVE A CHANGE IN THE
INVESTMENT RESTRICTIONS OF THE GOLD
FUND TO PERMIT IT TO PURCHASE GOLD,
SILVER, PLATINUM AND
PALLADIUM 93,056 203 77
4. PROPOSAL TO APPROVE A NEW INVESTMENT
ADVISORY AGREEMENT BETWEEN MONITREND
MUTUAL FUND AND ORRELL AND COMPANY
INC. WITH RESPECT TO THE GOLD FUND. 87,966 203 5,167
SHORT-TERM GOVERNMENT SERIES
(FORMERLY PIA ADJUSTABLE RATE GOVT. SEC. SERIES)
1. ELECTION OF TRUSTEES 344,852 0 0
2. PROPOSAL TO APPROVE CHANGE IN THE
INVESTMENT OBJECTIVE OF THE PIA
ADJUSTABLE RATE GOVERNMENT SECURITIES
FUND 344,852 0 0
3. PROPOSAL TO APPROVE CHANGE IN THE
INVESTMENT RESTRICTIONS OF THE PIA
ADJUSTABLE RATE FUND TO PERMIT IT TO
PURCHASE AND SELL FUTURES CONTRACTS
ON DEBT SECURITIES AND PURCHASE AND
WRITE PUT AND CALL OPTIONS ON DEBT
SECURITIES AND FUTURES
CONTRACTS ON DEBT SECURITIES 344,852 0 0
4. PROPOSAL TO APPROVE A NEW INVESTMENT
ADVISORY AGREEMENT BETWEEN MONITREND
MUTUAL FUND AND PACIFIC INCOME
ADVISERS, INC. WITH RESPECT TO THE
PIA ADJUSTABLE RATE
GOVERNMENT SECURITIES FUND 344,852 0 0
-5-
<PAGE>
EQUITY SERIES
(FORMERLY GROWTH SERIES)
FOR AGAINST ABSTAIN
--- ------- -------
1. ELECTION OF TRUSTEES 18,959 0 0
3. PROPOSAL TO APPROVE A NEW INVESTMENT
ADVISORY AGREEMENT BETWEEN MONITREND
AND PACIFIC INCOME ADVISERS 17,467 1,492 0
TECHNOLOGY CONVERTIBLES SERIES
(FORMERLY GROWTH AND INCOME SERIES)
1. ELECTION OF TRUSTEES 41,673 720 0
2. PROPOSAL TO APPROVE A CHANGE IN THE
INVESTMENT RESTRICTIONS OF THE
GROWTH & INCOME FUND TO PERMIT IT TO
EFFECT
SHORT SALES 31,041 4,397 6,754
3. PROPOSAL TO APPROVE A CHANGE IN THE
INVESTMENT RESTRICTIONS OF THE
GROWTH & INCOME FUND TO PERMIT IT TO
PURCHASE
RESTRICTED SECURITIES 29,547 4,194 8,652
4. PROPOSAL TO APPROVE A CHANGE IN THE
INVESTMENT RESTRICTIONS OF THE
GROWTH & INCOME FUND TO PERMIT IT TO
PURCHASE AND WRITE PUT AND CALL
OPTIONS AND PURCHASE AND SELL
FUTURES CONTRACTS ON STOCK
INDICES AND DEBT SECURITIES 31,796 3,844 6,753
5. PROPOSAL TO APPROVE A CHANGE IN THE
SUBCLASSIFICATION OF THE GROWTH &
INCOME FUND FROM THAT OF A
"DIVERSIFIED COMPANY"
TO THAT OF A "NON-DIVERSIFIED COMPANY" 31,728 1,436 8,462
6. PROPOSAL TO APPROVE A NEW INVESTMENT
ADVISORY AGREEMENT BETWEEN MONITREND
MUTUAL FUND AND MURPHY INVESTMENT
MANAGEMENT, INC. WITH RESPECT TO THE
GROWTH & INCOME FUND 33,912 1,342 6,747
-6-
<PAGE>
<TABLE>
<CAPTION>
MONTEREY MUTUAL FUND
Schedules of Investments - November 30, 1997
MURPHY NEW WORLD TECHNOLOGY
CONVERTIBLE FUND
- --------------------------------------------------------------------------------
Principal
Value Value
- --------------------------------------------------------------------------------
LONG TERM INVESTMENTS 52.30%
CONVERTIBLE BONDS 52.30%
<C> <S> <C>
300,000 Convex Computer Corp Convertible,
6.00%, due 3/01/12 ..................................... $ 294,375
426,000 Glycomed Inc Convertible,
7.50%, due 01/01/03 .................................... 378,607
75,000 Macneal-Schwendler Corp Convertible,
7.875%, due 8/18/04 .................................... 77,344
-------
750,326
-------
TOTAL LONG TERM INVESTMENTS
(cost $746,525) ........................................... 750,326
LONG OPTIONS 2.43%
15 S&P 500 Index Opt Put Dec/960
(cost $61,575) .......................................... 34,875
SHORT TERM INVESTMENTS 4.88%
70,000 Star Treasury Fund
(cost $70,000) .......................................... 70,000
-------
TOTAL INVESTMENTS
(cost $878,100) .............. 59.61% 855,201
Other assets less liabilities ............ 40.39% 579,395
-------
TOTAL NET ASSETS ........................ 100.00% $ 1,434,596
===========
OCM GOLD FUND
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS 88.59%
MAJOR GOLD PRODUCERS 36.61%
6,500 Barrick Gold Corp. ........................... $107,656
12,500 Homestake Mining Co. ......................... 131,250
8,000 Newmont Mining Corp. ......................... 240,500
9,500 Placer Dome Inc. ............................. 116,375
------
595,781
-------
INTERMEDIATE GOLD PRODUCERS 10.75%
16,000 Amax Gold Inc.* .............................. 35,000
5,000 Ashanti Goldfields Ltd. ...................... 35,938
13,000 Battle Mountain Gold Co. ..................... 65,813
3,000 WMC Ltd. ..................................... 38,250
-------
175,001
-------
MID-TIER GOLD PRODUCERS 10.32%
1,000 Getchell Gold Corp.* ......................... 26,250
18,000 Goldcorp Class A* ............................ 54,000
10,000 Kinross Gold Corp.* .......................... 28,750
10,000 Meridian Gold Inc.* .......................... 22,500
12,500 Pegasus Gold Inc.* ........................... 10,156
10,000 TVX Gold Inc.* ............................... 26,250
-------
167,906
-------
JUNIOR GOLD PRODUCERS 7.33%
8,000 Alta Gold Co.* ............................... 12,750
10,000 Dayton Mining.Inc.* .......................... 17,212
4,000 Miramar Mining Corp.* ........................ 7,306
25,000 Richmont Mines Inc.* ......................... 58,837
10,000 River Gold Mines Ltd. ........................ 23,183
-------
119,288
-------
* Non income producing security
See notes to financial statements
-7-
<PAGE>
MONTEREY MUTUAL FUND
Schedules of Investments - November 30, 1997
OCM GOLD FUND (continued)
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
EXPLORATION AND DEVELOPMENT
COMPANIES 7.46%
20,000 Britannia Gold Corp.* ........................ $4,075
5,000 Crown Resources Corp.* ....................... 21,719
30,000 Franc-Or Resources Corp.* .................... 8,430
20,000 Gold Standard Inc.* .......................... 14,375
10,000 Golden Queen Mining Ltd.* .................... 4,215
12,438 New Venoro Gold Corp.* ....................... 1,311
25,000 Omni Resources Inc.* ......................... 3,688
100,000 Silver Eagle Resources* ...................... 18,968
30,000 South American Gold & Copper Ltd.* ........... 3,372
30,000 U.S. Gold Corp.* ............................. 22,500
3,500 Sutton Resources* ............................ 18,813
-------
121,466
-------
PRIMARY SILVER PRODUCERS 7.69%
3,500 Coeur D'Alene Mines Corp.* ................... 30,187
10,000 Hecia Mining Co.* ............................ 49,375
5,000 Pan American Silver Corp.* ................... 45,625
-------
125,187
-------
PLATINUM/PALLADIUM PRODUCERS 4.49%
4,000 Stillwater Mining Co.* ....................... 73,000
-------
GOLD MINING ROYALTY COMPANIES 3.94%
6,000 Euro-Nevada Mining* .......................... 64,070
-------
NON-FERROUS METAL 0%
100,000 Banner Mining Corp.* ......................... 0
TOTAL COMMON STOCKS
(cost $ 2,693,772) ............................ 1,441,699
----------
SHORT TERM INVESTMENTS 4.92%
80,000 Star Treasury Fund (cost $80,000) ............ 80,000
-----------
TOTAL INVESTMENTS
(cost $2,773,772) ..................... 93.51% 1,521,699
OTHER ASSETS LESS LIABILITIES ......................... 6.49% 105,621
------------
TOTAL NET ASSETS ..................................... 100.00% $ 1,627,320
============
CAMBORNE GOVERNMENT
INCOME FUND
- --------------------------------------------------------------------------------
Principal
Value Value
- --------------------------------------------------------------------------------
LONG TERM INVESTMENTS 101.25%
ASSET BACKED 7.68%
28,880 Prudential 1993-59 A5 7.125%, due 12/25/00 ... $28,772
38,853 Travelers Mortgage Sec, 12.00%, due 03/01/14 . 45,014
-------
73,786
-------
CORPORATE 22.29%
85,000 W.R. Berkley, 9.875%, due 05/15/08 ........... 105,088
100,000 Westvaco Corp, 10.125%, 06/01/19 ............. 109,137
-------
214,225
-------
GOVERNMENT AGENCIES 39.41%
16,451 GNMA 9.50%, due 09/15/19 ..................... 17,900
36,400 GNMA ARM 6.00%, due 10/15/27 ................. 36,639
162,605 FNMA CMO 11.00%, due 04/25/07 ................ 179,993
145,000 FHR 1617 PN 6.50%, due 11/15/23 .............. 144,217
-------
378,749
-------
U.S. GOVERNMENT SECURITIES 31.87%
170,000 U.S. Treasury Notes 6.625%, due 05/15/07 ..... 178,606
50,000 U.S. Treasury Notes 5.750%, due 11/30/02 ..... 49,863
75,000 U.S. Treasury Notes 6.375%, due 08/15/27 ..... 77,859
-------
306,328
-------
TOTAL LONG TERM INVESTMENTS
(cost $ 910,478) .............................. 973,088
-------
SHORT TERM INVESTMENTS 4.78%
46,000 Star Treasury Fund (cost 46,000) ............. 46,000
-------
TOTAL INVESTMENTS
(cost $956,478) ....................... 106.03% 1,019,088
---------
OTHER ASSETS LESS LIABILITIES ......................... (6.03)% (57,990)
---------
TOTAL NET ASSETS 100.00% $ 961,098
=========
*Non income producing security
See notes to financial statements
-8-
<PAGE>
MONTEREY MUTUAL FUND
Schedules of Investments - November 30, 1997
PIA EQUITY FUND
- --------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
COMMON STOCKS 98.35%
AUTO PARTS 5.13%
1,460 Arvin Industries Inc. ........................ $50,370
1,400 OEA Inc. ..................................... 43,575
1,930 Standard Products Co. ........................ 48,491
-------
142,436
-------
BANKING & FINANCIAL SERVICE 2.09%
1,700 Trans Financial Inc. ......................... 58,013
-------
BUILDING & CONSTRUCTION 5.62%
2,510 Kaufman & Broad Home Corp. ................... 54,436
1,000 Lone Star Industries ......................... 52,125
2,600 Republic Group Inc. .......................... 49,562
-------
156,123
-------
CAPITAL GOODS 2.41%
2,100 Callaway Golf ................................ 66,938
-------
CHEMICALS 1.95%
1,100 Fuller (H.B.) Co. ............................ 54,175
-------
COMMUNICATION 2.32%
1,400 Century Telephone Enterprise ................. 64,488
-------
FOOD & RELATED 3.42%
2,200 Herbalife International Inc. ................. 43,175
1,700 Hormel Foods Corp. ........................... 51,850
-------
95,025
-------
INSURANCE 9.53%
1,000 Capital Re Corp. ............................. 56,062
1,100 Fremont General Corp ......................... 50,600
900 Mid-Ocean Ltd Ord A .......................... 55,800
1,000 Protective Life Corp. ........................ 56,125
910 Selective Insurance Group .................... 46,126
-------
264,713
-------
PIA EQUITY FUND (continued)
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
MACHINERY 5.60%
1,800 Agco Corp. ................................... $49,275
1,100 Blount Intl Inc., Class A .................... 55,619
1,520 Idex Corp. ................................... 50,635
-------
155,529
-------
MANUFACTURING 6.85%
2,000 Brush Wellman Inc ............................ 47,500
1,020 Carpenter Technology ......................... 48,067
1,400 Flowserve Corp ............................... 37,625
3,285 Mascotech Inc. ............................... 56,872
-------
190,064
-------
MEDICAL 4.99%
2,100 American Health Properties ................... 54,600
1,700 ICN Pharmacauticals Inc. ..................... 84,044
-------
138,644
-------
METALS & MINING 1.76%
1,130 Cleveland-Cliffs Inc. ........................ 48,731
-------
48,731
-------
OIL, ENERGY & NATURAL GAS 10.07%
1,430 Eastern Enterprises .......................... 57,557
2,050 Piedmont Natural Gas Co. ..................... 67,009
3,220 Quaker State Corp. ........................... 49,507
1,500 Ultramar Diamond Shamrock Corp. .............. 45,656
1,300 Wicor Inc., .................................. 59,963
-------
279,692
-------
PUBLISHING 6.04%
1,900 Banta Corp. .................................. 47,975
1,940 Lee Enterprises Inc. ......................... 53,714
2,300 McClatchy Newspapers ......................... 66,125
-------
167,814
-------
See notes to financial statements
-9-
<PAGE>
MONTEREY MUTUAL FUND
Schedules of Investments - November 30, 1997
PIA EQUITY FUND (continued)
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
REAL ESTATE & MORTGAGE RELATED 8.37%
2,400 Duke Realty Investment Inc. .................. $55,200
1,300 Felcor Suite Hotels Inc. ..................... 47,206
1,200 Macerich Company The ......................... 32,550
4,000 Tower Realty Trust Inc.* ..................... 97,500
-------
232,456
-------
RESTAURANTS 2.02%
2,790 Bob Evans Farms .............................. 56,149
-------
RETAIL 5.42%
1,530 American Greetings Corp: CL A ................ 56,132
2,400 Ross Stores Inc. ............................. 94,200
-------
150,332
-------
TECHNOLOGY 1.81%
1,200 Tektronix Inc. ............................... 50,325
-------
TRANSPORTATION &
EQUIPMENT 10.93%
1,200 Caliber System Inc ........................... 64,125
800 GATX Corporation ............................. 48,600
1,760 Illinois Central Corp., Ser A ................ 63,470
2,200 Roadway Express Inc. ......................... 59,675
2,200 USFreightways Corp ........................... 67,581
-------
303,451
-------
UTILITIES 2.02%
2,740 Public Service Co., of NM .................... 55,999
-------
TOTAL COMMON STOCKS
(Cost $2,591,611) ......................... 2,731,097
---------
SHORT TERM INVESTMENTS 4.90%
136,000 Star Treasury Fund (Cost $136,000) ........... 136,000
---------
PIA EQUITY FUND (continued)
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS
(Cost $2,727,611) .................. 103.25% $ 2,867,097
OTHER ASSETS LESS LIABILITIES ........................ (3.25)% (90,148)
-----------
TOTAL NET ASSETS ..................................... 100.00% $2,776,949
===========
MURPHY NEW WORLD
BIOTECHNOLOGY FUND
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS 68.85%
BIOCHEMISTRY 11.19%
10,000 Ambi Inc.* ................................... 24,688
2,000 Arqule Inc.* ................................. 41,875
3,000 Arris Pharmaceutical Corp. * ................. 28,687
1,600 Sequana Therspeutics Inc.* ................... 19,900
1,700 Synaptic Pharmaceutiacl Corp.* ............... 21,303
25,000 Trega Blosciences Inc.* ...................... 92,188
2,500 Vical Inc.* .................................. 34,688
-------
263,329
-------
BIOTECHNOLOGY 54.94%
10,000 Alteon Inc.* ................................. 57,813
7,000 Amylin Pharmaceutical Inc.* .................. 47,469
2,200 Anergen Inc.* ................................ 5,775
6,000 Cephalon Inc.* ............................... 61,125
2,200 Chiron Corp.* ................................ 40,081
1,500 Cocensys Inc.* ............................... 5,156
6,000 Cor-Therapeutice Inc.* ....................... 136,875
1,800 Corvas International Inc.* ................... 8,100
2,500 Cytel Corp.* ................................. 4,961
4,600 Geron Corp.* ................................. 39,387
500 Gulford Pharmaceuticals Inc.* ................ 11,281
3,600 Idec Pharmaceuticals Inc.* ................... 125,888
1,400 ISIS Pharmaceuticals* ........................ 20,650
See notes to financial statements
-10-
<PAGE>
MONTEREY MUTUAL FUND
Schedules of Investments - November 30, 1997
MURPHY NEW WORLD
BIOTECHNOLOGY FUND (continued)
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
3,100 Ligand Pharmaceuticals Inc. CL B* ............ 40,106
30,000 Neurobiological Technology* .................. 58,125
4,600 Neurocrine* .................................. 40,538
1,700 Ribozyme Pharmaceuticals Inc.* ............... 15,406
7,000 Scios* ....................................... 53,156
2,900 Sugen Inc.* .................................. 40,600
70,000 Xoma Corp.* .................................. 480,156
---------
1,292,648
---------
MEDICAL DEVICES 2.72%
14,000 Insite Vision Inc.* .......................... 49,875
600 Pharmacyclles Inc.* .......................... 14,250
---------
64,125
---------
TOTAL COMMON STOCKS
(Cost $1,496,572) .......................... 1,620,102
---------
LONG OPTIONS 1.48%
15 S&P 500 Index Opt Put Dec/960 (Cost $61,575) . 34,875
---------
SHORT TERM INVESTMENTS 4.85%
114,000 Star Treasury Fund (Cost $114,000) ........... 114,000
---------
TOTAL INVESTMENTS
(Cost $1,672,147) .............. 75.18% 1,768,977
OTHER ASSETS LESS LIABILITIES. ......................... 24.82% 584,012
---------
TOTAL NET ASSETS ...................................... 100.00% $ 2,352,989
===========
MURPHY NEW WORLD
TECHNOLOGY FUND
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS 81.03%
BIOCHEMISTRY 12.30%
1,500 Arris Pharmaceutical Corp. * ................. $14,344
1,500 Sequana Therspeutics Inc.* ................... 18,656
4,200 Synaptic Pharmaceutiacl Corp.* ............... 52,631
18,000 Trega Blosciences Inc.* ...................... 66,375
1,800 Vical Inc.* .................................. 24,975
---------
176,981
---------
BIOTECHNOLOGY 22.06%
1,000 Amylin Pharmaceuticals Inc.* ................. 6,781
5,000 Anergen Inc.* ................................ 13,125
4,000 Celrix Pharmaceuticals Inc.* ................. 9,562
4,000 Cephalon Inc.* ............................... 40,750
2,000 Cocensys Inc.* ............................... 6,875
800 Cortex Pharmaceuticals Inc.* ................. 1,975
2,000 Corvas International Inc.* ................... 9,000
5,000 Cytel Corp.* ................................. 9,922
1,500 ISIS Pharmaceuticals* ........................ 22,125
1,500 Ligand Pharmaceuticals Inc. CL B* ............ 19,406
22,000 Neurobiological Tech.* ....................... 42,625
2,000 Ribozyme Pharmaceuticals Inc.* ............... 18,125
2,000 Sugen Inc.* .................................. 28,000
13,000 Xoma Corp.* .................................. 89,172
---------
317,443
---------
COMMUNICATIONS 1.74%
6,200 Sync Resh Inc.* .............................. 24,994
---------
COMPUTERS 13.18%
8,000 Diamond Multimedia Systems Inc.* ............. 79,250
2,500 Euphonix, Inc.* .............................. 3,906
15,000 Intelligent Electronics Inc.* ................ 77,344
1,000 Seagate Technology Inc.* ..................... 22,687
1,000 Sonic Solutions* ............................. 6,563
---------
189,750
---------
MEDICAL DEVICES 1.98%
8,000 InSite Vision Inc.* .......................... 28,500
---------
See notes to financial statements
-11-
<PAGE>
MONTEREY MUTUAL FUND
Schedules of Investments - November 30, 1997
MURPHY NEW WORLD
TECHNOLOGY FUND (continued)
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
SEMI-CONDUCTORS 13.94%
1,000 Cirrus Logic Inc.* ........................... $13,312
2,000 Cypress Semiconductors Corp.* ................ 21,875
3,300 LSI Logic Corp.* ............................. 76,725
25,000 Seeq Technology Inc.* ........................ 88,672
---------
200,584
---------
SEMI CONDUCTOR EQUIPMENT 5.12%
2,500 Genus Inc.* .................................. 10,703
6,000 Mattson Technology Inc.* ..................... 58,688
2,000 Trikon Technologies Inc.* .................... 4,313
---------
73,704
---------
SOFTWARE 10.71%
500 Adobe Systems Inc.* .......................... 20,969
4,000 Informix Corp.* .............................. 26,625
6,900 Macromedia Inc.* ............................. 69,323
10,000 Ross Systems Inc.* ........................... 37,188
---------
154,105
---------
TOTAL COMMON STOCKS
(Cost $1,252,560) 1,166,061
---------
LONG OPTIONS 2.42%
15 S&P 500 Index Opt Put Dec/960 (Cost $61,575) . 34,875
---------
SHORT TERM INVESTMENTS 5.41%
77,822 Star Treasury Fund (Cost $77,822) ............ 77,822
---------
MURPHY NEW WORLD
TECHNOLOGY FUND (continued)
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS
(Cost $1,391,956) .................. 88.86% 1,278,758
COMMON STOCKS SOLD SHORT
-200 Qualcomm Inc. (Proceeds $6,823) ....... (.94%) (13,575)
OTHER ASSETS LESS LIABILITIES. ........................ 12.08% 173,839
---------
TOTAL NET ASSETS ......................................100.00% $ 1,439,022
===========
PIA SHORT TERM GOVERNMENT FUND
- --------------------------------------------------------------------------------
Principal
Value Value
- --------------------------------------------------------------------------------
LONG TERM INVESTMENTS 91.95%
ASSET BACKED 1.01%
220,450 Prudential Home Ser 1993-59, due 12/25/00 .... $219,899
314,260 Resident Asset Sec. Tr., due 09/25/26 ........ 317,081
---------
536,980
---------
GOVERNMENT AGENCIES 19.56%
500,000 FHLB L-1998, due 01/15/98 .................... 498,594
22 FHLMC 1444E, due 01/15/00 .................... 22
90,226 FHLMC 1295 E, due 03/15/04 ................... 89,994
539,273 FHLMC Arm 755204, due 08/01/15 ............... 560,844
145,124 FHLMC CMO 1210 F, due 01/15/18 ............... 145,581
27,189 FHLMC CMO 1492FD, due 03/15/23 ............... 27,226
430,113 FHLMC 609231, due 02/01/24 ................... 440,866
1,500,000 FNMA MTN, due 01/06/98 ....................... 1,495,781
68,633 FNMA 1991-91 F due 07/25/98 .................. 68,796
39,990 FNMA 91-79, due 07/25/98 ..................... 40,086
39,463 FNMA 91-121 F, due 09/25/98 .................. 39,539
685,749 FNMA CMO 91-113 F, 5.189%, due 03/25/02 681,934
56,393 FNMA 92-143 G, 6.75%, due 10/25/18 ........... 56,442
4,402,725 GNMA ARM 80013, due 11/20/26 ................. 4,498,748
705,700 GNMA ARM TBA, due 10/15/27 ................... 710,331
1,000,000 SALLIE MAE, due 02/11/98 ..................... 996,563
----------
10,351,347
----------
See notes to financial statements
-12-
<PAGE>
MONTEREY MUTUAL FUND
Schedules of Investments - November 30, 1997
PIA SHORT TERM GOVERNMENT FUND
- --------------------------------------------------------------------------------
Principal (continued)
Value Value
- --------------------------------------------------------------------------------
U.S. TREASURY NOTES 71.38%
6,785,000 U.S. Treasury Note 5.625%, due 01/31/98 ............... $6,785,007
6,000,000 U.S. Treasury Note 8.875%, due 02/15/99 ............... 6,213,756
4,800,000 U.S. Treasury Note 6.00%, due 08/15/99 ................ 4,815,005
1,500,000 U.S. Treasury Note 6.00%, due 08/15/00 ................ 1,507,032
3,850,000 U.S. Treasury Note 5.50%, due 12/31/00 ................ 3,811,500
2,700,000 U.S. Treasury Note 7.75%, due 02/15/01 ................ 2,847,658
1,450,000 U.S. Treasury Note 5.625%, due 02/28/01 ............... 1,440,033
4,930,000 U.S. Treasury Note 6.125%, due 12/31/01 ............... 4,971,599
1,700,000 U.S. Treasury Note 6.25%, due 02/28/02 ................ 1,722,314
1,500,000 U.S. Treasury Note 6.625%, due 04/30/02 ............... 1,542,189
1,010,000 U.S. Treasury Note 6.25%, due 06/30/02 ................ 1,024,520
1,070,000 U.S. Treasury Note 6.25%, due 08/31/02 ................ 1,085,716
----------
37,766,329
----------
TOTAL LONG TERM INVESTMENTS
(cost $48,396,141) ............................. 48,654,656
----------
SHORT TERM INVESTMENTS 8.21%
700,000 American Express Credit Corp.,
5.50% due 12/23/9 ..................................... 697,647
1,237,000 Star Bank Repo, 4.80%, due 12/01/97 ................... 1,237,000
2,500,000 U.S. Treasury Bill, 5.28% due 08/20/98 ................ 2,405,390
3,518 Star Tresury Fund ..................................... 3,518
---------
(cost $4,342,463) ..................................... 4,343,555
---------
TOTAL INVESTMENTS
(cost $52,738,604) .......................... 100.16% 52,998,211
Other assets less liabilities ............................. (.16)% (85,925)
---------
TOTAL NET ASSETS ......................................... 100.00% $52,912,286
==========
PIA GLOBAL BOND FUND
- --------------------------------------------------------------------------------
Principal
Value** Value
- --------------------------------------------------------------------------------
LONG TERM INVESTMENTS 91.78%
FOREIGN GOVERNMENT OBLIGATIONS 39.38%
CANADA
1,200,000 Canadian Government Bond, 7.00%, due 09/01/01 ......... $900,055
GERMANY
1,400,000 Bundes Obligation 114, 6.50%, due 03/15/00 ............ 828,731
800,000 Bundes Republic Deutschland, 6.00%, due 07/04/07 ...... 470,612
---------
1,299,343
---------
2,199,398
---------
U.S. GOVERNMENT AGENCIES 1.87%
105,000 FHLMC CMO, 6.50%, due 11/15/23 ........................ 104,433
----------
U.S. GOVERNMENT SECURITIES 50.53%
995,000 U.S. Treasury Notes, 6.00%, due 08/15/00 .............. 999,664
250,000 U.S. Treasury Notes, 5.75%, due 11/30/02 .............. 249,102
1,545,000 U.S. Treasury Notes, 6.125%, due 08/15/07 ............. 1,573,487
---------
2,822,253
---------
TOTAL LONG TERM INVESTMENTS
(cost $5,140,840) 5,126,084
---------
SHORT TERM INVESTMENTS 4.98%
278,000 Star Treasury Fund (cost $278,000) .................... 278,000
---------
TOTAL INVESTMENTS
(cost $5,418,840) ......................... 96.76% 5,404,084
OTHER ASSETS LESS LIABILITIES ........................... 3.24% 180,803
-----------
TOTAL NET ASSETS ........................................ 100.00% $ 5,584,887
===========
<FN>
* Non income producing security
** Currency of Country indicated
</FN>
</TABLE>
See notes to financial statements
-13-
<PAGE>
<TABLE>
<CAPTION>
MONTEREY MUTUAL FUND
Statements of Assets and Liabilites - November 30, 1997
Murphy
New World Camborne
Technology OCM Government PIA
Convertibles Gold Income Equity
------------ ---- ------ ------
ASSETS
<S> <C> <C> <C> <C>
Investments in securities, at value
(See Note 5) ............................. $ 855,201 $1,521,699 $1,019,088 $2,867,097
Cash ............................................. 559,321 122,614 25,141 93,681
Receivable for fund shares sold .................. 1,000 0 0 0
Income receivable ................................ 19,365 1,517 11,594 5,704
Due from investment advisor ...................... 9,838 3,400 1,511 151
Prepaid expenses and other ....................... 12,279 7,468 8,422 2,227
--------- --------- --------- ---------
Total Assets ............................. 1,457,004 1,656,698 1,065,756 2,968,860
--------- --------- --------- ---------
LIABILITIES
Securities sold short, at value .................. 0 0 0 0
Payable for securities purchased ................. 0 8,805 86,843 172,627
Payable for securities redeemed .................. 0 0 0 0
Accrued expenses and other ....................... 22,408 20,573 16,919 19,284
Dividends payable ................................ 0 0 896 0
Due to investment advisor ........................ 0 0 0 0
--------- --------- --------- ---------
Total Liabilities ........................ 22,408 29,378 104,658 191,911
--------- --------- --------- ---------
NET ASSETS
Capital stock, no par value; unlimited shares
authorized; shares outstanding ........... 2,281,475 4,960,866 1,217,178 2,307,769
Undistributed net investment income .............. 11,730 0 2,581 0
Accumulated net realized gain (loss) on
investments and foreign currencies ............... (835,710) (2,081,473) (321,271) 329,694
Net unrealized appreciation (depreciation)
on investments and foreign currencies .... (22,899) (1,252,073) 62,610 139,486
--------- --------- --------- ---------
Net Assets ....................................... $1,434,596 $1,627,320 $ 961,098 $2,776,949
========== ========== ========== ==========
CALCULATION OF MAXIMUM OFFERING PRICE
Net asset value and redemption price per share ... $ 26.52 $ 5.09 $ 14.00 $ 20.79
Maximum sales charge (4.50% of offering price
for Camborne Government Income,
OCM Gold, PIA Equity) .................... 0.00 0.24 0.66 0.98
--------- --------- --------- ---------
Offering price to public ......................... $ 26.52 $ 5.33 $ 14.66 $ 21.77
========= ========= ========= =========
Shares Outstanding ............................... 54,104 319,957 68,665 133,589
</TABLE>
See notes to financial statements
-14-
<PAGE>
<TABLE>
<CAPTION>
PIA
Murphy Murphy Short Term
New World New World Government PIA
Biotechnology Technology Securities Global Bond
------------- ---------- ---------- -----------
ASSETS
<S> <C> <C> <C> <C>
Investments in securities, at value
(See Note 5) ............................ $ 1,768,977 $ 1,278,758 $52,998,211 $ 5,404,084
Cash ............................................ 576,776 122,872 0 312,733
Receivable for fund shares sold ................. 400 28,300 0 0
Income receivable ............................... 417 350 877,954 116,016
Due from investment advisor ..................... 9,617 6,815 0 4,718
Prepaid expenses and other ...................... 13,841 28,959 8,656 4,932
----------- ----------- ----------- -----------
Total Assets ............................ 2,370,028 1,466,054 53,884,821 5,842,483
----------- ----------- ----------- -----------
LIABILITIES
Securities sold short, at value ................. 0 13,575 0 0
Payable for securities purchased ................ 0 0 716,785 249,356
Payable for securities redeemed ................. 540 0 0 0
Accrued expenses and other ...................... 16,499 13,457 18,606 7,332
Dividends payable ............................... 0 0 236,370 908
Due to investment advisor ....................... 0 0 774 0
----------- ----------- ----------- -----------
Total Liabilities ....................... 17,039 27,032 972,535 257,596
----------- ----------- ----------- -----------
NET ASSETS
Capital stock, no par value; unlimited shares
authorized; shares outstanding .......... 2,361,657 1,336,212 52,608,166 5,620,164
Undistributed net investment income ............. 0 0 0 4,094
Accumulated net realized gain (loss) on
investments and foreign currencies .............. (105,498) 222,761 44,513 (23,939)
Net unrealized appreciation (depreciation)
on investments and foreign currencies ... 96,830 (119,951) 259,607 (15,432)
----------- ----------- ----------- -----------
Net Assets ...................................... $ 2,352,989 $ 1,439,022 $52,912,286 $ 5,584,887
=========== =========== =========== ===========
CALCULATION OF MAXIMUM OFFERING PRICE
Net asset value and redemption price per share .. $ 8.07 $ 19.18 $ 10.26 $ 20.33
Maximum sales charge (4.50% of offering price
for Camborne Government Income,
OCM Gold, PIA Equity) ................... 0.00 0.00 0.00 0.00
----------- ----------- ----------- -----------
Offering price to public ........................ $ 8.07 $ 19.18 $ 10.26 $ 20.33
=========== =========== =========== ===========
Shares Outstanding .............................. 291,588 75,012 5,159,215 274,760
</TABLE>
See notes to financial statements
-15-
<PAGE>
<TABLE>
<CAPTION>
MONTEREY MUTUAL FUND
Statements of Operations - For the Year Ended November 30, 1997
Murphy
New World Camborne
Technology OCM Government PIA
Convertibles Gold Income Equity
------------ ---- ------ ------
INVESTMENT INCOME
<S> <C> <C> <C> <C>
Interest ..................................... $ 34,899 $ 3,685 $ 72,011 $ 7,189
Dividends .................................... 10,848 8,537 0 27,026
Other Income ................................. 3,158 2,268 2,215 0
------- ------- ------- -------
Total Investment Income .............. 48,905 14,490 74,226 34,215
------- ------- ------- -------
EXPENSES
Distribution fees (Note 4) ................... 7,713 17,076 974 10,845
Adviser & sub-adviser fees (Note 3) .......... 9,617 17,249 3,896 14,391
Transfer agent fees .......................... 13,638 13,085 12,074 12,410
Administrative fees (Note 3) ................. 18,081 16,848 15,585 16,848
Custodian fees ............................... 1,809 1,809 1,809 1,809
Audit fees ................................... 9,278 8,778 7,282 8,255
Legal fees ................................... 9,600 8,723 8,757 8,723
Registration fees ............................ 22,796 6,120 6,463 12,854
Trustees' fees ............................... 1,971 2,106 1,971 1,971
Printing expense ............................. 6,658 5,370 4,274 4,488
Amortization of deferred organization expenses 0 0 0 0
Postage expense .............................. 1,095 1,095 1,095 1,095
Other expenses ............................... 2,235 1,408 3,709 3,284
------- ------- ------- -------
Total expenses ............................... 104,491 99,667 67,889 96,973
Less: Expense reimbursement from adviser and
sub-adviser .......................... (67,142) (57,581) (57,176) (61,859)
------- ------- ------- -------
Net expenses ................................. 37,349 42,086 10,713 35,114
------- ------- ------- -------
Net Investment Income (Loss) ................. 11,556 (27,596) 63,513 (899)
------- ------- ------- -------
REALIZED AND UNREALIZED GAIN
(Loss) on Investments
Net Realized Gain (Loss) on Investments
and foreign currencies ............... 336,435 19,533 (10,449) 325,095
Net Change in Unrealized Appreciation on
Investments and foreign currencies ... (351,081) (1,008,814) 33,537 (125,645)
------- ------- ------- -------
Net Gain (Loss) on Investments ............... (14,646) (989,281) 23,088 199,450
------- ------- ------- -------
Net Increase (Decrease) in Net Assets
Resulting from Operations ............ $ (3,090) $(1,016,877) $ 86,601 $ 198,551
========= =========== ======== =========
<FN>
* April 1, 1997 (Commencement of operations) through November 30, 1997
</FN>
</TABLE>
See notes to financial statements.
-16-
<PAGE>
<TABLE>
<CAPTION>
PIA
Murphy Murphy Short-Term
New World New World Government PIA
Biotechnology Technology Securities Global Bond*
------------- ---------- ---------- ------------
INVESTMENT INCOME
<S> <C> <C> <C> <C>
Interest ..................................... $ 2,507 $ 2,699 $ 1,861,208 $ 138,765
Dividends .................................... 0 383 0 0
Other Income ................................. 3,018 2,833 1,775 0
----- ----- --------- -------
Total Investment Income .............. 5,525 5,915 1,862,983 138,765
----- ----- --------- -------
EXPENSES
Distribution fees (Note 4) ................... 3,650 5,488 15,298 0
Adviser & sub-adviser fees (Note 3) .......... 11,584 12,512 71,513 10,607
Transfer agent fees .......................... 13,108 12,676 8,448 8,934
Administrative fees (Note 3) ................. 16,963 16,418 21,930 9,389
Custodian fees ............................... 1,809 1,809 14,461 4,096
Audit fees ................................... 5,282 5,282 5,282 5,000
Legal fees ................................... 8,723 8,723 8,752 6,482
Registration fees ............................ 23,783 26,031 13,712 5,707
Trustees' fees ............................... 1,971 1,971 1,905 1,250
Printing expense ............................. 5,540 5,945 4,274 738
Amortization of deferred organization expenses 2,033 2,033 0 161
Postage expense .............................. 1,095 575 420 26
Other expenses ............................... 2,012 2,380 2,817 2,173
------- ------- --------- -------
Total expenses ............................... 97,553 101,843 168,812 54,563
Less: Expense reimbursement from adviser and
sub-adviser .......................... (69,466) (71,313) (76,672) (40,963)
------- ------- --------- -------
Net expenses ................................. 28,087 30,530 92,140 13,600
------- ------- --------- -------
Net Investment Income (Loss) ................. (22,562) (24,615) 1,770,843 125,165
------- ------- --------- -------
REALIZED AND UNREALIZED GAIN
(Loss) on Investments
Net Realized Gain (Loss) on Investments
and foreign currencies ............... (41,445) 220,579 48,409 (23,939)
Net Change in Unrealized Appreciation on
Investments and foreign currencies ... 136,885 (230,396) 164,144 (15,432)
------- ------- --------- -------
Net Gain (Loss) on Investments ............... 95,440 (9,817) 212,553 (39,371)
------- ------- --------- -------
Net Increase (Decrease) in Net Assets
Resulting from Operations ............ $ 72,878 $ (34,432) $ 1,983,396 $ 85,794
========= ========= =========== =========
<FN>
* April 1, 1997 (Commencement of operations) through November 30, 1997
</FN>
</TABLE>
See notes to financial statements.
-17-
<PAGE>
<TABLE>
<CAPTION>
MONTEREY MUTUAL FUND
Statements of Changes in Net Assets
MURPHY NEW
WORLD TECHNOLOGY OCM
CONVERTIBLES GOLD
------------ ----
Year ended Year ended Year ended Year ended
Nov. 30, Nov. 30, Nov. 30, Nov. 30,
1997 1996 1997 1996
---- ---- ---- ----
OPERATIONS
<S> <C> <C> <C> <C>
Net investment income (loss) ................ $ 11,556 $ 553 $ (27,596) $ (21,724)
Net realized gain (loss) on
investments and foreign currencies .. 336,435 212,958 19,533 214,071
Net change in unrealized appreciation
on investments and foreign currencies (351,081) 106,973 (1,008,814) (126,563)
--------- --------- --------- -------
Net increase (decrease) in net assets
resulting from operations ........... (3,090) 320,484 (1,016,877) 65,784
--------- --------- --------- -------
Net equalization (debits) credits ........... 0 0 0 0
--------- --------- --------- -------
DIVIDENDS PAID TO SHAREHOLDERS
Dividends from net investment income ........ 0 (1,285) 0 0
Dividends from capital gain ................. 0 0 0 0
--------- --------- --------- -------
0 (1,285 0 0
--------- --------- --------- -------
FUND SHARE TRANSACTIONS
Net proceeds from shares sold ............... 153,112 326,564 2,054,956 2,501,816
Dividends reinvested ........................ 0 1,195 0 0
Payment for shares redeemed ................. (274,985) (464,611) (941,627) (1,457,789)
--------- --------- --------- -------
Net increase (decrease) in net assets
from fund share transactions ........ (121,873) (136,852) 1,113,329 1,044,027
--------- --------- --------- -------
Net increase (decrease) in net assets ....... (124,963) 182,347 96,452 1,109,811
NET ASSETS, Beginning of Period ............. 1,559,559 1,377,212 1,530,868 421,057
--------- --------- --------- -------
NET ASSETS, End of Period ................... $ 1,434,596 $ 1,559,559 $ 1,627,320 $ 1,530,868
=========== =========== =========== ===========
CHANGES IN SHARES OUTSTANDING
Shares sold ................................. 5,719 13,949 279,147 266,932
Shares issued on reinvestment
of dividends ........................ 0 56 0 0
Shares redeemed ............................. (10,154) (19,771) (143,814) (153,575)
--------- --------- --------- -------
Net Increase (decrease) in
shares outstanding .................. (4,435) (5,766) 135,333 113,357
=========== =========== =========== ===========
<FN>
*Commencement of Operations
</FN>
</TABLE>
See notes to financial statements
-18-
<PAGE>
<TABLE>
<CAPTION>
CAMBORNE MURPHY
GOVERNMENT PIA NEW WORLD
INCOME EQUITY BIOTECHNOLOGY
------ ------ -------------
Year ended Year ended Year ended Year ended Year ended Year ended
Nov. 30, Nov. 30, Nov. 30, Nov. 30, Nov. 30, Nov. 30,
1997 1996 1997 1996 1997 1996
---- ---- ---- ---- ---- ----
OPERATIONS
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss) ................ $ 63,513 $ 52,791 $ (899) $ (10,668) $ (22,562) $ (7,980)
Net realized gain (loss) on
investments and foreign currencies .. (10,449) (16,768) 325,095 89,453 (41,445) 49,534
Net change in unrealized appreciation
on investments and foreign currencies 33,537 7,296 (125,645) 41,380 136,885 (10,287)
--------- ------- ------- ------- ------- -------
Net increase (decrease) in net assets
resulting from operations ........... 86,601 43,319 198,551 120,165 72,878 31,267
--------- ------- ------- ------- ------- -------
Net equalization (debits) credits ........... (755) 1,072 0 0 0 0
--------- ------- ------- ------- ------- -------
DIVIDENDS PAID TO SHAREHOLDERS
Dividends from net investment income ........ (60,248) (54,239) 0 0 0 0
Dividends from capital gain ................. 0 0 (22,842) 0 0 0
--------- ------- ------- ------- ------- -------
(60,248) (54,239) (22,842) 0 0 0
--------- ------- ------- ------- ------- -------
FUND SHARE TRANSACTIONS
Net proceeds from shares sold ............... 24,703 453,736 2,289,022 246,344 2,665,166 55,339
Dividends reinvested ........................ 55,980 39,722 21,270 0 0 0
Payment for shares redeemed ................. (437,944) (137,564) (424,338) (177,649) (616,300) (255,567)
--------- ------- ------- ------- ------- -------
Net increase (decrease) in net assets
from fund share transactions ........ (357,261) 355,894 1,885,954 68,695 2,048,866 (200,228)
--------- ------- ------- ------- ------- -------
Net increase (decrease) in net assets ....... (331,663) 346,046 2,061,663 188,860 2,121,744 (168,961)
NET ASSETS, Beginning of Period ............. 1,292,761 946,715 715,286 526,426 231,245 400,206
--------- ------- ------- ------- ------- -------
NET ASSETS, End of Period ................... $ 961,098 $ 1,292,761 $ 2,776,949 $ 715,286 $ 2,352,989 $ 231,245
========== =========== =========== ========= =========== =========
CHANGES IN SHARES OUTSTANDING
Shares sold ................................. 1,837 34,168 118,526 13,446 342,349 7,403
Shares issued on reinvestment
of dividends ........................ 4,103 2,948 1,195 0 0 0
Shares redeemed ............................. (32,396) (10,221) (22,574) (11,283) (82,922) (34,577)
--------- ------- ------- ------- ------- -------
Net Increase (decrease) in
shares outstanding .................. (26,456) 26,895 97,147 2,163 259,427 (27,174)
========== =========== =========== ========= =========== =========
<FN>
*Commencement of Operations
</FN>
</TABLE>
<TABLE>
<CAPTION>
PIA
MURPHY SHORT-TERM
NEW WORLD GOVERNMENT PIA
TECHNOLOGY SECURITIES GLOBAL BOND
---------- ---------- -----------
For the Period
Year ended Year ended Year ended Year ended April 1, 1997
Nov. 30, Nov. 30, Nov. 30, Nov. 30, to November 30,
1997 1996 1997 1996 1997
---- ---- ---- ---- ----
OPERATIONS
<S> <C> <C> <C> <C> <C>
Net investment income (loss) ................ $ (24,615)$ (11,928) $ 1,770,843 $ 300,274 $ 125,165
Net realized gain (loss) on
investments and foreign currencies .. 220,579 20,751 48,409 19,098 (23,939)
Net change in unrealized appreciation
on investments and foreign currencies (230,396) 87,955 164,144 87,797 (15,432)
--------- ------- ---------- ---------- ---------
Net increase (decrease) in net assets
resulting from operations ........... (34,432) 96,778 1,983,396 407,169 85,794
--------- ------- ---------- ---------- ---------
Net equalization (debits) credits ........... 0 0 0 0 0
--------- ------- ---------- ---------- ---------
DIVIDENDS PAID TO SHAREHOLDERS
Dividends from net investment income ........ 0 0 (1,770,843) (300,274) (121,071)
Dividends from capital gain ................. (25,966) (28,439) (19,653) (29,522) 0
--------- ------- ---------- ---------- ---------
(25,966) (28,439) (1,790,496) (329,796) (121,071)
--------- ------- ---------- ---------- ---------
FUND SHARE TRANSACTIONS
Net proceeds from shares sold ............... 1,284,920 604,440 34,947,791 17,827,441 5,400,000
Dividends reinvested ........................ 24,991 28,186 1,549,280 247,478 120,164
Payment for shares redeemed ................. (696,855) (95,434) (4,241,857) (1,093,071) 0
--------- ------- ---------- ---------- ---------
Net increase (decrease) in net assets
from fund share transactions ........ 613,056 537,192 32,255,214 16,981,848 5,520,164
--------- ------- ---------- ---------- ---------
Net increase (decrease) in net assets ....... 552,658 605,531 32,448,114 17,059,221 5,484,887
NET ASSETS, Beginning of Period ............. 886,364 280,833 20,464,172 3,404,951 100,000
--------- ------- ---------- ---------- ---------
NET ASSETS, End of Period ................... $ 1,439,022 $ 886,364 52,912,286 $ 20,464,172 $ 5,584,887
=========== =========== ========== ============ ===========
CHANGES IN SHARES OUTSTANDING
Shares sold ................................. 64,714 30,965 3,418,519 1,751,176 263,772
Shares issued on reinvestment
of dividends ........................ 1,245 1,551 151,712 24,510 5,988
Shares redeemed ............................. (34,173) (5,056) (414,658) (108,439) 0
--------- ------- ---------- ---------- ---------
Net Increase (decrease) in
shares outstanding .................. 31,786 27,460 3,155,573 1,667,247 269,760
=========== =========== ========== ============ ===========
<FN>
*Commencement of Operations
</FN>
</TABLE>
See notes to financial statements
-19-
<PAGE>
MONTEREY MUTUAL FUND
Notes to Financial Statements - November 30, 1997
NOTE 1. ORGANIZATION
Monterey Mutual Fund (the "Fund"), formerly Monitrend Mutual Fund, is
registered under the Investment Company Act of 1940, as amended, as an open-end
management investment company. The Fund was organized as a Massachusetts
business trust on January 6, 1984 and consists of eight series of shares: the
PIA Short Term Government Securities Series, the Camborne Government Income
Series (formerly Government Income), the OCM Gold Series (formerly Gold), the
PIA Equity Series (formerly Growth), the Murphy New World Biotechnology Series
(formerly Gaming and Leisure), the Murphy New World Technology Series (formerly
Technology), the Murphy New World Technology Convertibles Series (formerly
Growth & Income), and the PIA Global Bond Series (collectively the "Series"),
each of which has separate assets and liabilities and differing investment
objectives. The investment objective for each of the series are: (1) the PIA
Short-Term Government Securities Series, (the "Short-Term Government Series"),
to provide investors a high level of current income, consistent with low
volatility of principal through investing in short term, adjustable rate and
floating rate securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities; (2) the Camborne Government Income Series, (the
"Government Series"), growth of capital, whether over the short or long-term,
income and preservation of capital; (3) the OCM Gold Series, (the "Gold
Series"), long-term growth of capital through investing primarily in equity
securities of domestic and foreign companies engaged in activities related to
gold and precious metals; (4) the PIA Equity Series, (the "Equity Series"),
long-term growth of capital; (5) the Murphy New World Biotechnology Series, (the
"Biotechnology Series"), long-term growth of capital through investing primarily
in equity securities of companies that its investment adviser believes can
produce products or services that provide or benefit from advances in
biotechnology; (6) the Murphy New World Technology Series, (the "Technology
Series"), long-term growth of capital through investing primarily in equity
securities of companies that its investment adviser believes can produce
products or services that provide or benefit from advances in technology; (7)
the Murphy New World Technology Convertibles Series (the "Convertibles Series"),
to maximize total return through a combination of capital appreciation and
income; and (8) the PIA Global Bond Series, (the "Global Bond Series"), to
provide a high level of current income through investing in bonds denominated in
U.S. dollars and other currencies.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Series in the preparation of their financial statements.
SECURITY VALUATION--Portfolio securities that are listed on the national
securities exchanges are valued at the last sale price as of the close of such
securities exchanges, Eastern time, or, in the absence of recorded sales, at the
average of readily available closing bid and asked prices on such exchanges.
Unlisted securities are valued at the average of the quoted bid and asked prices
in the over-the-counter market. Securities and other assets for which market
quotations are not readily available are valued at fair market value as
determined in good faith by the Adviser under procedures established by and
under the general supervision and responsibility of the Fund's Board of
Trustees. Short-term investments which mature in less than 60 days are valued at
amortized cost (unless the Board of Trustees determines that this method does
not represent fair market value). Short-term investments which mature after 60
days are valued at market. Stock Index Futures, which are traded on commodities
exchanges, are valued at their last sales price as of the close of such
commodities exchanges.
OPTIONS--When a call is written, an amount equal to the premium received is
included in the Statement of Assets and Liabilities as an equivalent liability.
The amount of the liability is subsequently marked to market to reflect the
current market value of the option written. If an option which was written
either expires on its stipulated expiration date, or a closing purchase
transaction is entered into, a gain is realized (or loss if the cost of a
closing purchase transaction exceeds the premium received when the option was
sold) without regard to any unrealized gain or loss on the underlying security,
and the liability related to such option is extinguished. If a written call
option is exercised, a capital gain or loss is realized from the sale of the
underlying security and the proceeds from such sale are increased by the premium
originally received.
The premium paid for the purchase of a call or a put option is included in
the asset section of the Statement of Assets and Liabilities as an investment
and is subsequently adjusted to the current market value of the option. If a
purchased option expires on its stipulated expiration date, a loss is realized
in the amount of the cost of the option. If a closing sale transaction is
entered into, a gain or loss will be realized depending on whether the sales
proceeds from the closing sale transaction are greater or less than the cost of
the option. If a put option is exercised, a gain or loss will be realized from
the sale of the underlying security and the proceeds from such sale will be
decreased by the premium originally paid. If a call option is exercised, the
cost of the security purchased upon exercise will be increased by the premium
originally paid.
FUTURES CONTRACTS--The Equity Series, the Biotechnology Series, the
Technology Series, the Convertibles Series, the Government Series, and the
Global Bond Series may from time to time enter into futures contracts as a hedge
to provide protection against adverse movements in the prices of securities in
the portfolio. When a Series enters a futures contract, it is required to pledge
to the clearing broker an amount of cash and/or securities equal to
approximately 5% of the contract amount. This amount is known as the "initial
margin". Pursuant to the futures contract, the Series agrees to take or make
delivery of an amount of cash equal to a specified dollar amount times the
difference between the value at the close of the day and the price at which the
futures contract was originally struck. Such payments, known as the "variation
margin", are recorded by the Series
-20-
<PAGE>
MONTEREY MUTUAL FUND
Notes to Financial Statements - November 30, 1997 (continued)
as unrealized gains or losses. When the futures contract expires or is closed by
the Series, it realizes a gain or loss.
Financial Instruments with Off Balance Sheet Risk--Futures contracts involve
elements of market risk and credit risk in excess of the amounts reflected in
the Statement of Assets and Liabilities. The contract amounts of these futures
contracts reflect the extent of exposure to off balance sheet risk.
The predominant market risk is that movements in the prices of the Fund's
portfolio securities being hedged may not correlate perfectly with the movement
in the prices of the future contracts. The lack of correlation could render the
Fund's hedging strategy unsuccessful and could result in a loss to the Fund.
Futures contracts are purchased only on exchanges. The exchange acts as the
counterparty to the Fund's futures transactions; therefore the Fund's credit
risk is limited to the failure of the exchange.
Subsequent market fluctuations of securities sold short may require a Fund
to purchase securities at prices which exceed the value reflected on the
Statement of Assets and Liabilities.
FEDERAL INCOME TAXES--It is the Fund's policy to meet the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable net income to its shareholders. Therefore the
Series paid no Federal Income taxes and no Federal income tax provision was
required. At November 30, 1997, Convertibles had a capital loss carry forward of
$835,710 expiring as follows: $78,279 in 1998, $739,182 in 1999, and $18,249 in
2002. Gold had a capital loss carryover of $2,080,045 expiring as follows:
$173,743 in 1998, $95,110 in 1999, $335,282 in 2000, $348,419 in 2001,
$1,039,696 in 2002 and $87,795 in 2003. Government had a capital loss carry
forward of $314,800 expiring as follows: $281,460 in 1998, $12,593 in 2003,
$16,768 in 2004 and $3,979 in 2005. The Biotechnology Series had a capital loss
carry forward of $105,498 expiring as follows: $2,547 in 2002 and $61,506 in
2003 and $41,445 in 2005.
ORGANIZATIONAL COSTS--These costs have been capitalized and are being
amortized using the straight-line method over a period of sixty months beginning
on commencement of operations
OTHER--Securities transactions are recorded no later than the first business
day after the trade date. Discounts and premiums on securities purchased are
amortized over the life of the respective security. Realized gains and losses on
sales of securities are calculated on the identified cost basis. Dividend income
is recorded on the ex-dividend date. Interest income is recorded on an accrual
basis.
USE OF 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 increases and decreases in net assets
from operations during the reporting period. Actual results could differ from
those estimates.
NOTE 3. INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENTS
The Convertibles Series has an investment advisory agreement with Murphy
Investment Management, Inc. ("Murphy"). The Convertibles Series pays Murphy a
fee computed daily and payable monthly, at the following annual rate based upon
daily net assets:
ASSETS FEE RATE
------ --------
0 to $150 million ............. 0.625%
$150 million to $250 million... 0.500%
Over $250 million ............. 0.375%
The Biotechnology Series and Technology Series also have an investment
advisory agreement with Murphy. Each Series pays Murphy a fee, computed daily
and payable monthly, at an annual rate of 1.00% of their respective net assets.
The Gold Series has an advisory agreement with Orrell Capital Management, a
division of Orrell and Company, Inc. ("Orrell"). Under the agreement, the Gold
Series pays Orrell a fee computed daily and payable monthly, at the following
annual rates based upon daily net assets:
ASSETS FEE RATE
------ --------
0 to $50 million .............. 1.000%
$50 million to $75 million .... 0.875%
$75 million to $100 million ... 0.750%
$100 million to $150 million .. 0.625%
$150 million to $250 million .. 0.500%
Over $250 million ............. 0.375%
The Equity Series has an investment advisory agreement with Pacific Income
Advisors, Inc. ("PIA"). Equity pays PIA a fee computed daily and payable
monthly, at the following annual rate based upon daily net assets:
-21-
<PAGE>
MONTEREY MUTUAL FUND
Notes to Financial Statements - November 30, 1997 (continued)
ASSETS FEE RATE
------ --------
0 to $50 million .............. 1.000%
$50 million to $75 million .... 0.875%
$75 million to $100 million ... 0.750%
$100 million to $150 million .. 0.625%
$150 million to $250 million .. 0.500%
Over $250 million ............. 0.375%
The Short-Term Government Series and Global Bonds Series each has an
investment advisory agreement with PIA. Each Series pays PIA a fee, computed
daily and payable monthly, at an annual rate of 0.20% and .40%, respectively, of
their net assets.
The Government Series has both an investment advisory agreement and a
sub-advisory agreement with PIA. Under the agreements, Government pays PIA fees,
computed daily and payable monthly, at an annual rate of 0.40% of the Government
Fund's daily net assets; and PIA pays Camborne Advisors, Inc. a fee computed
daily and paid monthly at an annual rate of 0.20% of the Government Fund's daily
net assets.
During the year ended November 30, 1997 the advisers agreed to reimburse the
series for expenses in excess of 2.44% of average net assets (for the Gold,
Equity, Biotechnology, Technology and Convertibles Series), 1.10% of average net
assets for the Government Series, 0.51% of average net assets of the Global Bond
Series and 0.30% of average net assets of the Short-Term Government Series. The
amounts reimbursed by the advisers in 1997 are set forth in the Statement of
Operations.
The Series has a fund accounting and administrative agreement with American
Data Services, Inc. ("ADS"). ADS receives a fee, computed daily and payable
monthly, at an annual rate of .1% of average daily net assets, subject to a
monthly minimum.
NOTE 4. DISTRIBUTION AGREEMENT AND PLAN
Syndicated Capital, Inc. serves as the Distributor of each Series's shares.
The President and sole shareholder of the Distributor is also the Chairman and
majority shareholder of PIA, as well as a trustee of the Fund.
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1
under the Investment Company Act of 1940. The Plan authorizes each Series, exept
the Global Bond Series, to reimburse the Distributor for marketing expenses
incurred in distributing shares of each Series, including the cost of printing
sales material and making payments to dealers in each Series shares, in any
fiscal year, subject to a limit of 0.99% for the Gold, 0.25% for the Equity
Series, Biotechnology, Technology and Convertibles Series, 0.10% for the
Government Series, and 0.05% for the Short-Term Government Series. Distribution
fees incurred by each Series are set forth in the Statement of Operations.
NOTE 5. PURCHASES AND SALES OF SECURITIES
The cost of purchases and sales of investment securities (other than
short-term investments) for the year ended November 30, 1997, were as follows:
PURCHASES SALES
--------- -----
Convertibles Series ...........$ 794,698 $ 1,524,285
Gold Series ................... 1,241,058 273,468
Government Series ............. 1,014,976 1,025,609
Equity Series ................. 3,679,427 1,823,119
Biotechnology Series .......... 1,555,669 127,393
Technology Series ............. 949,930 585,574
Short-Term Government Series .. 50,335,247 17,197,227
Global Bond Series ............ 8,227,021 3,072,717
Unrealized appreciation and depreciation on investments at November 30, 1997
based on cost for Federal income taxes, are as follows:
UNREALIZED UNREALIZED
APPRECIATION DEPRECIATION NET
------------ ------------ ---
Convertibles Series ...........$ 4,029 ($ 26,928) ($ 22,899)
Gold Series ................... 9,700 (1,261,773) (1,252,073)
Government Series ............. 64,053 (1,443) 62,610
Equity Series ................. 203,888 (64,402) 139,486
Biotechnology Series .......... 300,946 (204,116) 96,830
Technology Series ............. 154,624 (274,575) (119,951)
Short-Term Government Series .. 279,599 (19,992) 259,607
Global Bond Series ............ 49,462 (64,218) (14,756)
-22-
<PAGE>
<TABLE>
<CAPTION>
MONTEREY MUTUAL FUND
MURPHY NEW WORLD TECHNOLOGY CONVERTIBLES
Financial Highlights
(For a share outstanding throughout each period)
For the Year Ended November 30,
1997* 1996 1995 1994 1993
----- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .......................... $ 26.64 $ 21.42 $ 16.67 $ 17.20 $ 18.53
--------- ---------- ------------ ---------- -----------
INCOME FROM INVESTMENT OPERATIONS
Net investment income ................. .21 0.01 0.02 0.09 0.07
Net realized and unrealized gain (loss)
on investments ..................... (.33) 5.23 4.82 (0.58) (1.22)
--------- ---------- ------------ ---------- -----------
Total from investment operations ...... (.12) 5.24 4.84 (0.49) (1.15)
--------- ---------- ------------ ---------- -----------
LESS DISTRIBUTIONS
Dividends from net investment income .. 0 (0.02) (0.09) (0.04) (0.18)
--------- ---------- ------------ ---------- -----------
Total distributions ................... 0 (0.02) (0.09) (0.04) (0.18)
--------- ---------- ------------ ---------- -----------
Net asset value, end of period ........ $ 26.52 $ 26.64 $ 21.42 $ 16.67 $ 17.20
========= ========== ============ ========== ===========
Total return** ........................ (.45%) 24.49% 29.19% (2.86%) (6.26%)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) .. 1,435 1,560 1,377 1,573 2,538
Ratio of expenses to average
net assets# ........................ 2.44% 2.26% 2.44% 2.44% 2.44%
Ratio of net investment income
(loss) to average net assets ....... .76% 0.04% 0.10% 0.46% 0.21%
Portfolio turnover rate ............... 85.91% 80.93% 151.86% 0.00% 1.59%
Average commission rate per share ..... $ 0.1155 $ 0.1385
<FN>
** Excluding sales charge.
# Net of expense reimbursement. If the expense reimbursement had not been in
effect, the ratios of expenses to average net assets would have been 6.83%,
5.11%, 6.08%, 5.46% and 4.39% respectively.
* On 12/31/96 Murphy Investment Management, Inc. became the Fund's investment
adviser. From 2/1/95 to 12/31/96 MidCap Associates, Inc. was the Fund's
investment adviser. Prior to 2/1/95, Monitrend Investment Management, Inc.,
was the Fund's investment adviser.
</FN>
</TABLE>
See notes to financial statements
-23-
<PAGE>
<TABLE>
<CAPTION>
MONTEREY MUTUAL FUND, OCM GOLD
Financial Highlights
(For a share outstanding throughout each period)
For the Year Ended November 30,
1997++ 1996* 1995* 1994 1993
------ ----- ----- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ............................. $ 8.29 $ 5.91 $ 5.87 $ 11.94 $ 9.84
---------- -------------- ---------- ------------ ------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income ................. (.09) (0.15) (0.09) (0.15) (0.09)
Net realized and unrealized gain (loss)
on investments ........................ (3.11) 2.53 0.13 (5.92) 2.20
---------- -------------- ---------- ------------ ------------
Total from investment operations ...... (3.20) 2.38 0.04 (6.07) 2.11
---------- -------------- ---------- ------------ ------------
LESS DISTRIBUTIONS
Dividends from net investment
income ................................ 0.00 0.00 0.00 0.00 (0.01)
---------- -------------- ---------- ------------ ------------
Total distributions ................... 0.00 0.00 0.00 0.00 (0.01)
---------- -------------- ---------- ------------ ------------
Net asset value, end of period ........ $ 5.09 $ 8.29 $ 5.91 $ 5.87 $ 11.94
========== ============== ========== ============ ============
Total return** ........................ (38.60%) 40.27% 0.68% (50.84%) 21.47%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) ............................ 1,627 1,531 421 1,274 3,147
Ratio of expenses to average
net assets# ........................... 2.44% 2.37% 2.44% 2.45% 2.43%
Ratio of net investment income
(loss) to average net assets .......... (1.60%) (1.72)% (1.57)% (1.26%) (0.84%)
Portfolio turnover rate ............... 17.68% 35.70% 15.57% 229% 969%
Average commission rate per share ..... $ .0291 $ .0548
<FN>
* Based on average shares outstanding.
** Excluding sales charge.
# Net of expense reimbursement. If the expense reimbursement had not been in
effect, the ratios of expenses to average net assets would have been 5.78%,
6.15%, 12.52%, 5.58% and 4.55% respectively.
++ On 12/13/96 Orrell and Company, Inc. became the Fund's investment adviser.
Prior to 12/31/96 Monitrend Investment Management, Inc. was the Fund's
investment adviser except during the period between February 1, 1991 to
August 17, 1994 when the investment adviser was Kensington Capital
Management Inc.
</FN>
</TABLE>
See notes to financial statements
-24-
<PAGE>
<TABLE>
<CAPTION>
MONTEREY MUTUAL FUND
CAMBORNE GOVERNMENT INCOME
Financial Highlights
(For a share outstanding throughout each period)
For the Year Ended November 30,
1997++ 1996 1995 1994 1993
------ ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ........................... $ 13.59 $ 13.88 $ 12.76 $ 14.16 $ 13.13
---------- ------------ ---------- ---------- ------------
INCOME FROM INVESTMENT OPERATIONs
Net investment income ................. 0.89 0.73 0.81 0.87 0.72
Net realized and unrealized gain (loss)
on investments ...................... 0.38 (0.28) 1.12 (1.39) 1.08
---------- ------------ ---------- ---------- ------------
Total from investment operations ...... 1.27 0.45 1.93 (0.52) 1.80
---------- ------------ ---------- ---------- ------------
LESS DISTRIBUTIONS
Dividends from net investment income .. (0.86) (0.74) (0.81) (0.88) (0.77)
---------- ------------ ---------- ---------- ------------
Total distributions ................... (0.86) (0.74) (0.81) (0.88) (0.77)
---------- ------------ ---------- ---------- ------------
Net asset value, end of period ........ $ 14.00 $ 13.59 $ 13.88 $ 12.76 $ 14.16
========== ============ ========== ========== ============
Total return** ........................ 9.70% 3.42% 15.56% (3.75%) 13.96%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) .......................... 961 1,293 947 882 1,280
Ratio of expenses to average
net assets# ......................... 1.10% 1.07% 1.10% 1.10% 1.10%
Ratio of net investment income
(loss) to average net assets ........ 6.53% 5.35% 6.04% 6.47% 5.14%
Portfolio turnover rate ............... 111.26% 129.17% 91.03% 66.36% 118%
<FN>
** Excluding sales charge.
# Net of expense reimbursement. If the expense reimbursement had not been in
effect, the ratios of expenses to average net assets would have been 6.98%,
5.68%, 5.73%, 5.52% and 3.66% respectively.
++ On 12/13/96 Camborne Investment Corp. became the Fund's investment
sub-adviser. Prior to 12/13/96, Pacific Income Advisers, Inc., was the
Fund's investment adviser.
</FN>
</TABLE>
See notes to financial statements
-25-
<PAGE>
<TABLE>
<CAPTION>
MONTEREY MUTUAL FUND, PIA EQUITY
Financial Highlights
(For a share outstanding throughout each period)
Year ended Year ended Year ended Year ended Year ended
Nov. 30, Nov. 30, Nov. 30, Nov. 30, Nov. 30,
1997++ 1996* 1995* 1994 1993
------ ----- ----- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........... $ 19.63 $ 15.36 $ 11.12 $ 13.35 $ 13.59
---------- ------------ ---------- ---------- ------------
INCOME FROM INVESTMENT OPERATIONS
Net investment (loss) .......................... (1.21) (0.37) (0.24) (0.52) (0.20)
Net realized and unrealized gain (loss)
on investments ............................... 3.05 4.64 4.48 (1.71) (0.04)
---------- ------------ ---------- ---------- ------------
Total from investment operations ............... 1.84 4.27 4.24 (2.23) (0.24)
---------- ------------ ---------- ---------- ------------
LESS DISTRIBUTIONS
Dividends from net investment income ........... 0.00 0.00 0.00 0.00 0.00
---------- ------------ ---------- ---------- ------------
Dividends from Capital Gains ................... (0.68) 0.00 0.00 0.00 0.00
---------- ------------ ---------- ---------- ------------
Total distributions ............................ (0.68) 0.00 0.00 0.00 0.00
---------- ------------ ---------- ---------- ------------
Net asset value, end of period ................. $ 20.79 $ 19.63 $ 15.36 $ 11.12 $ 13.35
========== ============ ========== ========== ============
Total return** ................................. 9.96% 27.80% 38.13% (16.70%) (1.77%)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) ........... 2,777 715 526 610 1,261
Ratio of expenses to average net assets# ....... 2.43% 2.25% 2.44% 2.44% 2.44%
Ratio of net investment income (loss) to average
net assets ................................... (0.06%) (2.07%) (2.21%) (2.22%) (2.02%)
Portfolio turnover rate ........................ 139.57% 41.22% 23.75% 26.57% 26%
Average commission rate per share .............. $ .0600 $ .1054
<FN>
* Based on average shares outstanding.
** Excluding sales charge.
# Net of expense reimbursement. If the expense reimbursement had not been in
effect, the ratio of expenses to average net assets would have been 6.71%,
11.73%, 11.44%, 8.52% and 6.44% respectively.
++ On 12/13/96 Pacific Income Advisers, Inc. became the Fund's investment
adviser. Prior to 12/13/96, Monitrend Investment Management, Inc. was the
Fund's investment adviser.
</FN>
</TABLE>
See notes to financial statements
-26-
<PAGE>
<TABLE>
<CAPTION>
MONTEREY MUTUAL FUND
MURPHY NEW WORLD BIOTECHNOLOGY
Financial Highlights
(For a share outstanding throughout each period)
Year ended Year ended Year ended Year ended Oct. 21 thru
Nov. 30, Nov. 30, Nov. 30, Nov. 30, Nov. 30,
1997*++ 1996* 1995* 1994 1993
------- ----- ----- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........... $ 7.19 $ 6.74 $ 6.12 $ 7.99 $ 8.00
--------- ------------ ---------- ---------- ----------
Income from investment operations
Net investment (loss) .......................... (0.16) (0.17) (0.15) (0.08) (0.01)
Net realized and unrealized gain
on investments ................................. 1.04 0.62 0.77 (1.79) 0.00
--------- ------------ ---------- ---------- ----------
Total from investment operations ............... 0.88 0.45 0.62 (1.87) (0.01)
--------- ------------ ---------- ---------- ----------
Less distributions
Dividends from net investment income ........... 0.00 0.00 0.00 0.00 0.00
--------- ------------ ---------- ---------- ----------
Total distributions ............................ 0.00 0.00 0.00 0.00 0.00
--------- ------------ ---------- ---------- ----------
Net asset value, end of period ................. $ 8.07 $ 7.19 $ 6.74 $ 6.12 $ 7.99
========= ============ ========== ========== ==========
Total return** ................................. 12.24% 6.67% 10.13% (23.40%) (0.13%)
Ratios/supplemental data
Net assets, end of period (in 000's) ........... 2353 231 400 824 634
Ratio of expenses to average net assets # ...... 2.47% 2.65% 2.89% 2.89% 2.70%+
Ratio of net investment income (loss) to average
net assets ..................................... (1.98%) (2.31%) (2.18%) (1.18%) (2.03%)+
Portfolio turnover rate ........................ 15.09% 02.79% 36.89% 26.58% 0%
Average commission rate per share .............. $ .0635$ .0961
<FN>
* Based on average shares outstanding.
** Excluding sales charge.
# Net of expense reimbursement. If the expense reimbursement had not been in
effect, the ratio of expenses to average net assets would have been 8.58%,
15.28%, 9.96%, 6.40% and 5.19%, respectively.
++ On 12/20/96 Murphy Investment Management became the Fund's investment
adviser. Prior to 12/20/96, Monitrend Investment Management, Inc. was the
Fund's investment adviser.
</FN>
</TABLE>
See notes to financial statements
-27-
<PAGE>
<TABLE>
<CAPTION>
MONTEREY MUTUAL FUND
MURPHY NEW WORLD TECHNOLOGY
Financial Highlights
(For a share outstanding throughout each period)
Year ended Year ended Year ended Year ended Oct. 21 thru
Nov. 30, Nov. 30, Nov. 30, Nov. 30, Nov. 30,
1997++ 1996* 1995* 1994 1993
------ ----- ----- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........... $ 20.51 $ 17.81 $ 14.35 $ 14.82 $ 15.00
--------- -------------- ---------- ---------- ----------
Income from investment operations
Net investment (loss) .......................... (0.33) (0.40) (0.32) (0.18) (0.01)
Net realized and unrealized (loss)
on investments ................................. (0.40) 4.86 4.19 (0.29) (0.17)
--------- -------------- ---------- ---------- ----------
Total from investment operations ............... (0.73) 4.46 3.87 (0.47) (0.18)
--------- -------------- ---------- ---------- ----------
Less distributions
Dividends from net investment income ........... 0.00 0.00 0.00 0.00 0.00
Dividends from Capital Gains ................... (0.60) (1.76) (0.41) 0.00 0.00
--------- -------------- ---------- ---------- ----------
Total distributions ............................ (0.60) (1.76) (0.41) 0.00 0.00
--------- -------------- ---------- ---------- ----------
Net asset value, end of period ................. $ 19.18 $ 20.51 $ 17.81 $ 14.35 $ 14.82
========= ============== ========== ========== ==========
Total return** ................................. (3.69%) 26.32% 26.95% (3.17%) (1.20%)
Ratios/supplemental data
Net assets, end of period (in 000's) ........... 1439 886 281 283 38
Ratio of expenses to average net assets# ....... 2.44% 2.34% 2.44% 2.44% 1.70%+
Ratio of net investment income (loss) to average
net assets ..................................... (1.96%) (2.06%) (1.97%) (1.79%) (1.63%)+
Portfolio turnover rate ........................ 57.01% 17.33% 40.77% 29.26% 0%
Average commission rate per share .............. $ .0696 $ .07989
<FN>
+ Annualized.
* Based on average shares outstanding.
** Excluding sales charge. Not annualized for periods less than a year.
# Net of expense reimbursement. If the expense reimbursement had not been in
effect, the ratio of expenses to average net assets would have been 8.13%,
10.44%, 18.74%, 11.19% and 30.48%, respectively.
++ On 12/13/96 Murphy Investment Management became the Fund's investment
adviser. Prior to 12/13/96, Monitrend Investment Management Inc. was the
Fund's investment adviser.
</FN>
</TABLE>
See notes to financial statements
-28-
<PAGE>
<TABLE>
<CAPTION>
MONTEREY MUTUAL FUND
PIA SHORT-TERM GOVERNMENT SECURITIES
Financial Highlights
(For a share outstanding each period)
Year ended Year ended Year ended April 22,1994 thru
Nov. 30, Nov. 30, Nov. 30, Nov. 30,
1997 1996* 1995* 1994
---- ----- ----- ----
<S> <C> <C> <C> <C>
Net asset value, beginning of period ........... $ 10.21 $ 10.12 $ 9.98 $ 10.00
--------- ------------- ------------ ------------
Income from investment operations
Net investment (loss) .......................... .61 0.56 0.57 0.27
Net realized and unrealized gain
on investments ................................. 0.06 0.19 0.14 (0.02)
--------- ------------- ------------ ------------
Total from investment operations ............... 0.67 0.75 0.71 0.25
--------- ------------- ------------ ------------
Less distributions
Dividends from net investment income ........... (0.61) (0.56) (0.57) (0.27)
Dividends from capital gains ................... (0.01) (0.10) 0 0
--------- ------------- ------------ ------------
Total distributions ............................ (0.62) (0.66) (0.57) (0.27)
--------- ------------- ------------ ------------
Net asset value, end of period ................. $ 10.26 $ 10.21 $ 10.12 $ 9.98
========= ============= ============ ============
Total return** ................................. 6.56% 7.68% 7.50% 2.50%
Ratios/supplemental data
Net assets, end of period (in 000's) ........... 52,912 20,464 3,405 2,041
Ratio of expenses to average net assets# ....... .30% 0.44% 0.46% 0.44%+
Ratio of net investment income (loss) to average
net assets ..................................... 5.77% 5.51% 5.71% 4.68%+
Portfolio turnover rate ........................ 63.08% 21.54% 163.55% 209.94%+
<FN>
+ Annualized.
** Excluding sales charge. Not annualized for periods less than a year.
# Net of expense reimbursement. If the expense reimbursement had not been in
effect, the ratio of expenses to average net assets would have been .55%,
1.19%, 2.01% and 3.46%, respectively.
* Based on average shares outstanding
</FN>
</TABLE>
See notes to financial statements
-29-
<PAGE>
<TABLE>
<CAPTION>
MONTEREY MUTUAL FUND, PIA GLOBAL BOND
Financial Highlights
(For a share outstanding throughout each period)
April 1, 1997
(Commencement of Operations)
through Nov. 30, 1997
---------------------
<S> <C>
Net asset value, beginning
of period ........................... $ 20.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .................. 0.50
Net realized and unrealized gain (loss)
on investments and foreign currencies 0.32
--------
Total from investment operations ....... 0.82
--------
LESS DISTRIBUTIONS
Dividends from net investment income ... (0.49)
--------
Total distributions .................... (0.49)
--------
Net asset value, end of period ......... $ 20.33
========
Total return** ......................... 4.15%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) .......................... 5,585
Ratio of expenses to average
net assets .......................... 0.51%+
Ratio of net investment income
(loss) to average net assets ........ 4.71%+
Portfolio turnover rate ................ 82.47%
<FN>
+ Annualized
# Net of expense reimbursement. If the expense reimbursement had not been in
effect, the ratio of expenses to average net assets would have been 2.05%.
** Not annualized for periods less than a year.
</FN>
</TABLE>
See notes to financial statements
-30-
<PAGE>
INDEPENDENT AUDITOR'S REPORT
The Board of Trustees and Shareholders of
Monterey Mutual Fund
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments of the Murphy New World Technology
Convertible Series, the OCM Gold Series, the Camborne Government Income Series,
the PIA Equity Series, the Murphy New World Biotechnology Series, the Murphy New
World Tecnology Series, the PIA Short-Term Government Securities and the PIA
Global Bond Series (each series of Monterey Mutual Fund, the "Fund") as of
November 30, 1997 and the related statements of operations and changes in net
assets and financial highlights for the periods indicated in the accompanying
financial statements. These financial statements and financial highlights are
the responsibility of the Fund management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
November 30, 1997, by correspondence with the custodian and with brokers as to
securities purchased but not received, or other auditing procedures where
confirmations from brokers were not received. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of as of November 30, 1997 and the results of their operations, the
changes in their net assets, and their financial highlights for the periods
indicated, in conformity with generally accepted accounting principles.
/s/ McGladrey & Pullen, LLP
New York, New York
December 29, 1997
- 31 -
<PAGE>
MONTEREY MUTUAL FUND
Performance Results - Year Ended November 30,1997
(All performance measurements reflect the maximum sales load charged, for each
period shown.)
MURPHY NEW WORLD
TECHNOLOGY CONVERTIBLES FUND
AVERAGE ANNUAL TOTAL RETURNS VALUE ON 11/30/97
- ---------------------------- -----------------
1 year (0.45%) Tech Convertibles $15,489
5 years 7.83% S&P 500 $46,589
Inception 4.55%
$10,000 Investment made 2/3/88 (Inception Date)
TOTAL TOTAL
RETURN RETURN
YEAR S&P 500 MURPHY NEW WORLD TECHNOLOGY CONVERTIBLES FUND
- ---- ------- ---------------------------------------------
1988 10,508.25 9,550
1989 13,747.44 10,938
1990 13,272.22 10,627
1991 15,971.68 11,053
1992 18,608.01 10,625
1993 20,483.63 9,960
1994 20,698.13 9,647
1995 28,352.76 12,499
1996 36,252.29 15,560
1997 46,589.48 15,489
Past performance is not predictive of future performance.
The S&P 500 Index is a broad unmanaged index generally considered to be
representative of the US equity market.
The MURPHY NEW WORLD TECHNOLOGY CONVERTIBLES FUND showed a small loss for the
year of 0.45%. I kept a substantial percentage of the portfolio in cash until
after the end of the fiscal year, when I was able to buy technology convertible
bonds at what I considered attractive prices due to the Asian crisis. Cash has a
low yield relative to the yields available on convertible bonds.
OCM GOLD FUND
AVERAGE ANNUAL TOTAL RETURNS VALUE ON 11/30/97
- ---------------------------- -----------------
1 year (41.36%) OCM Gold $2,804
5 years (13.13%) S&P 500 $46,589
Inception (12.14%)
$10,000 Investment made 2/3/88 (Inception Date)
TOTAL TOTAL
RETURN RETURN
YEAR S&P 500 OCM GOLD FUND
- ---- ------- -------------
1988 10,508.25 9,126
1989 13,747.44 10,566
1990 13,272.22 8,559
1991 15,971.68 7,966
1992 18,608.01 5,416
1993 20,483.63 6,572
1994 20,698.13 3,234
1995 28,352.76 3,256
1996 36,252.29 4,567
1997 46,589.48 2,804
Past performance is not predictive of future performance.
The S&P 500 Index is a broad unmanaged index generally considered to be
representative of the US equity market.
To say the past year was a bad year for gold and gold shares would be an
understatement. Over the report period ending 11/30/97, the gold price declined
20.06%$, as strong financial asset (stocks and bonds) markets and fear of
central bank gold sales combined to create a negative environment for gold and
gold shares. Strong demand for physical bullion, especially in India where
import duties were cut, failed to overcome selling by commodity and hedge funds
who aggressively sold gold short. In addition, the gold mining industry suffered
a blow as a reported multi million ounce gold find in Indonesia turned out to be
nothing more than a major fraud by a junior Canadian exploration company, Bre-X
Minerals. Your fund did not own any Bre-X Minerals. Unfortunately, the Bre-X
scandal affected the credibility of the entire junior exploration sector in
which your fund allocates a small percentage of its assets. The Gold Fund's
overall performance measured a decline of 38.68% in NAV (41.36% after maximum
sales charge) for the fiscal year ending 11/30/97 versus a loss of 41.08% for
the XAU (Philadelphia Stock Exchange gold and silver share index). The Gold
Fund's advisor anticipates continued strong demand for physical bullion along
with the realization central banks are not selling as much gold as feared, will
create a more positive price environment for gold in `98. The fund anticipates
maintaining its tiered portfolio approach of owning senior, intermediate ,
mid-tier and junior producers along with a small percentage of junior
exploration companies over the coming year.
-32-
<PAGE>
MONTEREY MUTUAL FUND
Performance Results - Year Ended November 30, 1997
(All performance measurements reflect the maximum sales load charged, for each
period shown.)
CAMBORNE GOVERNMENT
INCOME FUND
AVERAGE ANNUAL TOTAL RETURNS VALUE ON 11/30/97
- ---------------------------- -----------------
1 year 4.76% Camborne Gov't. $13,765
5 years 6.55% Lehman Index $14,366
Inception 6.49%
$10,000 Investment made 10/31/92 (Inception Date)
TOTAL TOTAL
RETURN RETURN
LEHMAN CAMBORNE
GOVERNMENT GOVERNMENT
YEAR INDEX FUND
- ---- ----- ----
1992 10,017.00 9,572
1993 11,228.06 10,909
1994 10,824.97 10,500
1995 12,708.51 12,134
1996 13,382.06 12,549
1997 14,365.65 13,765
Past performance is not predictive of future performance.
The Lehman Government Index is an unmanaged index consisting of all US Treasury
& Agency bonds weighted according to market capitalization.
The CAMBORNE GOVERNMENT INCOME FUND finished the year with a total return of
9.70% (excluding sales charge), placing it among some of the top performing U.S.
Government bond funds in the country. The manager has balanced the portfolio
holdings among U.S. Treasury securities, U.S. Government Agency mortgage-backed
securities and corporate bonds. The manager will continue active maturity
management and sector rotation of the fund to attempt to capitalize on
investment opportunities.
PIA EQUITY FUND
AVERAGE ANNUAL TOTAL RETURNS VALUE ON 11/30/97
- ---------------------------- -----------------
1 year 5.01% PIA Equity $17,177
5 years 8.68% S&P 500 $26,529
Inception 10.01%
$10,000 Investment made 4/1/92 (Inception Date)
RETURN RETURN
S&P 500 PIA EQUITY
YEAR INDEX FUND
- ---- ----- ----
1992 10,595.85 10,815
1993 11,663.87 10,624
1994 11,786.01 8,850
1995 16,144.74 12,224
1996 20,642.92 15,622
1997 26,529.17 17,177
Past Performance is not predictive of future performance.
The S&P 500 Index is a broad unmanaged index generally considered to be
representative of the US equity market.
The PIA EQUITY FUND generated an annual return of 9.96% (excluding sales
charge), having performed weakly during the first half of the period but
recovering nicely in the second half of the period. The improvement was due to
two strategies employed by the manager. First, the manager increased the fund's
level of diversification, increasing from about twenty holdings at the beginning
of the period to about forty holdings by the middle of the period. Second, the
manager shifted the portfolio holdings to small- and mid-cap companies which
demonstrate strong relative value. Although underperforming the market over the
period, the fund generated a reasonable return and is positioned to do well in
the next period.
- 33 -
<PAGE>
MONTEREY MUTUAL FUND
Performance Results - Year Ended November 30, 1997
(All performance measurements reflect the maximum sales load charged, for each
period shown.)
MURPHY NEW WORLD
BIOTECHNOLOGY FUND
AVERAGE ANNUAL TOTAL RETURNS VALUE ON 11/30/97
- ---------------------------- -----------------
1 year 12.24% Biotech $10,088
Inception 0.21% S&P 500 $22,529
$10,000 Investment made 10/20/93 (Inception Date)
RETURN RETURN
S&P 500 MURPHY NEW WORLD
YEAR INDEX BIOTECHNOLOGY FUND
- ---- ----- ------------------
1993 9,905.12 10,485.00
1994 10,008.85 7,649.00
1995 13,710.34 8,425.00
1996 17,530.26 8,988.00
1997 22,528.94 10,088.00
Past performance is not predictive of future performance.
The S&P 500 Index is a broad unmanaged index generally considered to be
representative of the US equity market.
The MURPHY NEW WORLD BIOTECHNOLOGY FUND rose 12.24% for the fiscal year compared
to a gain of 6.73% for the NASDAQ Biotechnology Index. Although the fund
outperformed the Index, I am not satisfied with the absolute performance figure.
Biotechnology stocks were hard-hit by the Asian crisis, even though I do not see
a logical connection between the two. As more companies receive FDA approvals, I
expect the group to show substantially better performance.
MURPHY NEW WORLD
TECHNOLOGY FUND
AVERAGE ANNUAL TOTAL RETURNS VALUE ON 11/30/97
- ---------------------------- -----------------
1 year (3.69%) Technology $14,868
Inception 10.12% S&P 500 $22,529
$10,000 Investment made 10/20/93 (Inception Date)
RETURN RETURN
S&P 500 MURPHY NEW WORLD
YEAR INDEX TECHNOLOGY FUND
- ---- ----- ------------------
1993 9,905.12 9,880.00
1994 10,008.85 9,566.00
1995 13,710.34 12,222.00
1996 17,530.26 15,437.00
1997 22,528.94 14,868.00
Past performance is not predictive of future performance.
The S&P 500 Index is a broad unmanaged index generally considered to be
representative of the US equity market.
The MURPHY NEW WORLD TECHNOLOGY FUND declined 3.69% in the fiscal year,
substantially underperforming the Standard & Poor's 500 Index. I made two
strategic mistakes at the beginning of the year. The first was overweighting
smaller capitalization companies in the belief that after a long period of
outperformance by large cap companies, there were better relative values in the
smaller stocks. As it turned out, large cap again outperformed substantially.
Recently, I have been taking advantage of the general decline in technology
stocks that followed the crisis in Asia to buy some larger cap companies. The
second mistake was to overweight biotechnology relative to electronics. Although
some of our biotech companies had clinical success or even FDA approvals during
the year, the sector as a whole did not benefit from a "halo" effect. I remain
overweighted in these stocks in the belief 1998 will be an excellent year for
the group.
- 34 -
<PAGE>
MONTEREY MUTUAL FUND
Performance Results - Year Ended November 30, 1997
(All performance measurements reflect the maximum sales load charged, for each
period shown.)
PIA SHORT TERM
GOVERNMENT FUND
AVERAGE ANNUAL TOTAL RETURNS VALUE ON 11/30/97
- ---------------------------- -----------------
1 year 6.56% PIA ST Gov't. $12,635
Inception 6.69% Lehman Index $13,246
$10,000 Investment made 4/22/94 (Inception Date)
RETURN RETURN
LEHMAN PIA SHORT TERM
U.S. GOVERNMENT GOVERNMENT
YEAR INDEX FUND
- ---- ----- ----
1994 9,981.00 10,243.00
1995 11,717.69 11,010.00
1996 12,338.73 11,732.00
1997 13,245.63 12,635.00
Past performance is not predictive of future performance.
The Lehman Government Index is an unmanaged index consisting of all US Treasury
& Agency bonds weighted according to market capitalization.
The PIA SHORT TERM GOVERNMENT FUND achieved its goal of generating a high level
of current income consistent with low volatility of principal. The fund has
grown dramatically in the period, giving the manager additional investment
opportunities. The manager's strategy of investing primarily in short-term
adjustable rate and floating rate U.S. government securities was the major
contributing factor in the fund's ability to maintain its low volatility in the
midst of a volatile fixed-income market.
PIA GLOBAL BOND FUND
AVERAGE ANNUAL TOTAL RETURNS VALUE ON 11/30/97
- ---------------------------- -----------------
Inception 6.27% PIA Global $10,413
Lehman Index $10,926
$10,000 Investment made 4/1/97 (Inception Date)
TOTAL TOTAL
RETURN RETURN
LEHMAN PIA
U.S. GOVERNMENT GLOBAL
YEAR INDEX FUND
- ---- ----- ----
1997 10,926.00 10,413.00
Past performance is not predictive of future performance.
The Lehman Government Index is an unmanaged index consisting of all US Treasury
& Agency bonds weighted according to market capitalization.
The PIA GLOBAL BOND FUND completed its first partial year with a return for the
eight month period of 6.27%. The portfolio is currently diversified across three
of the major industrialized nations, holding bonds issued by the governments of
Canada, Germany and the United States. As the fund grows in size, the manager
will continue to pursue its strategy of investing in bonds denominated in US
dollars and other currencies in order to capitalize on both interest rate and
exchange rate opportunities.
- 35 -
<PAGE>
Monterey Mutual Funds
Distributed by:
Syndicated Capital, Inc.
1299 Ocean Avenue, Suite 210
Santa Monica, CA 90401
