MURPHY
NEW WORLD
FUNDS
- Murphy New World Technology
- Murphy New World Biotechnology
- Murphy New World Technology
Convertibles
[LOGO]
SEMI-ANNUAL REPORT
(UNAUDITED)
MAY 31, 2000
<PAGE>
Dear Shareholder:
The year 2000 has been a tricky, difficult period for technology investing with
a sharp run up early in the year (approaching a mania in Internet and biotech
stocks), a sharp drop and a quick, although selective, recovery. Presidential
election years normally turn quiet during the second half until the election,
during which stock picking counts for more than anticipating market swings.
The Murphy New World Biotechnology Fund has been the star this year as portfolio
manager Lissa Morgenthaler rode the mania up early in the year, went to cash
before the sharp decline in these stocks and then reinvested for the recovery.
As a result the June 26 issue of BusinessWeek ranked the Biotech Fund #1 in the
country for the first half of 2000. Lissa has the Fund well positioned for the
rest of the year.
The Technology and Convertible Technology Funds also raised cash, although about
a month before the peak, and then reinvested, but before the bottom. IOve had a
large exposure to Internet software infrastructure stocks that have not
performed well yet, although I remain convinced that this is where much of the
real value will be added in the next stage of building out the Internet.
The December quarter normally is a good one for technology stocks - November to
February is an especially strong period. Our fiscal year ends in November and
IOm continuing to work towards that date to produce good results for the year as
a whole.
Very truly yours,
Michael Murphy, CFA
Chief Investment Officer
<PAGE>
<TABLE>
<CAPTION>
MONTEREY FUNDS
Schedules of Investments - May 31, 2000
(Unaudited)
MURPHY NEW WORLD TECHNOLOGY FUND
--------------------------------------------------------------------------------
Shares Value(degree)
--------------------------------------------------------------------------------
COMMON STOCKS 85.70%
BIOTECHNOLOGY 9.29%
<C> <S> <C>
3,600 PE Corp-Celera Genomics Group* ............... $ 200,250
1,500 Protein Design Labs Inc.* .................... 159,984
----------
360,234
----------
COMPUTERS 7.64%
2,300 Cisco Systems Inc.* .......................... 130,884
2,300 Oracle Corp.* ................................ 165,313
----------
296,197
----------
COMPUTER SERVICES 3.15%
3,800 Safeguard Scientifics Inc.* .................. 122,313
----------
ELECTRONIC COMPONENTS 3.53%
8,000 C-Cube Microsystems Inc-New* ................. 137,000
----------
FINANCIAL 5.07%
12,600 E*Trade Group Inc.* .......................... 196,481
----------
INTERNET SOFTWARE 12.34%
1,500 Digital Insight Corp. * ...................... 57,656
45,000 Healthcentral.com* ........................... 161,719
15,500 Persistence Software* ........................ 259,141
----------
478,516
----------
NETWORKING PRODUCTS 3.02%
2,800 3Com Corp.* .................................. 117,075
----------
RETAIL INTERNET 2.25%
3,500 Rowecom Inc.* ................................ 15,859
9,000 Sciquest.com Inc.* ........................... 71,438
----------
87,297
----------
SEMI-CONDUCTORS 8.06%
1,800 Applied Materials Inc.* ...................... 150,356
1,300 Intel Corp. .................................. 162,134
----------
312,490
----------
SOFTWARE 27.26%
27,000 Blaze Software Inc.* ......................... $ 227,813
20,000 Calico Commerce Inc.* ........................ 245,625
7,500 Microsoft Corp.* ............................. 468,984
15,000 Omnis Technology Corp.* ...................... 114,375
----------
1,056,797
----------
TELECOMMUNICATIONS 4.09%
1,800 JDS Uniphase Corp.* .......................... 158,400
----------
TOTAL COMMON STOCKS
(cost $5,268,747) ............................ 3,322,800
----------
SHORT TERM INVESTMENTS 5.14%
MUTUAL FUNDS 4.14%
160,352 Firstar Treasury Fund
(cost $160,352) .............................. 160,352
REPURCHASE AGREEMENTS 1.00%
$ 39,000 Firstar Bank Repurchase Agreement,
4.25%, due June 1, 2000
collateralized by FHA/VA Pool,
6.50%, due 08/15/11 ($39,787)
(cost $39,000) ............................. 39,000
----------
* Non-income producing security
0 See Note 2 in Notes to Financial Statements.
See notes to financial statements
-1-
<PAGE>
MONTEREY FUNDS
Schedules of Investments - May 31, 2000
(Unaudited)
MURPHY NEW WORLD TECHNOLOGY FUND (continued)
--------------------------------------------------------------------------------
Shares Value(degree)
--------------------------------------------------------------------------------
TOTAL SHORT TERM INVESTMENTS................................... $ 199,352
----------
TOTAL INVESTMENTS
(cost $5,468,099)....................... 90.84% 3,522,152
Other assets less liabilities .......................... 9.16% 354,993
------- ----------
TOTAL NET ASSETS 100.00% $3,877,145
======= ==========
MURPHY NEW WORLD BIOTECHNOLOGY FUND
--------------------------------------------------------------------------------
Shares Value(degree)
--------------------------------------------------------------------------------
COMMON STOCKS 82.86%
BIOTECHNOLOGY 58.54%
5,000 Aastrom Biosciences Inc.* .................... $ 13,203
4,000 Abgenix Inc.* ................................ 315,375
5,500 Affymetrix Inc.* ............................. 653,984
5,000 Alkermes Inc.* ............................... 182,969
8,000 Alteon Inc.* ................................. 12,750
7,000 Biogen Inc.* ................................. 381,281
14,000 Celera Genomics* ............................. 778,750
2,000 Cell Genesys Inc.* ........................... 35,812
3,000 Corixa Corp.* ................................ 95,344
1,800 Corvas International Inc.* ................... 11,362
5,000 Diversa Corp.* ............................... 109,375
3,000 EntreMed Inc.* ............................... 65,531
10,000 Gene Logic Inc.* ............................. 211,563
6,000 Genetech Inc.* ............................... 644,250
8,000 Geron Corp.* ................................. 144,750
7,000 Human Genome Sciences Inc.* .................. 614,688
3,000 Ilex Oncology Inc.* .......................... 74,906
4,000 Imclone Systems, Inc.* ....................... 283,500
8,000 Immunex Corp.* ............................... 206,750
5,000 Invitrogen Corp.* ............................ 198,906
5,000 Maxygen Inc.* ................................ 212,500
3,000 Medarex Inc.* ................................ 136,594
2,000 Myriad Genetics, Inc.* ....................... 156,813
2,000 Pathogenesis Corp.* .......................... 30,188
5,000 PE Corp-PE Biosystem ......................... 277,656
6,000 Protein Design Labs Inc.* .................... 639,937
1,000 Sepracor Inc.* ............................... 95,687
6,000 Sequenom Inc.* ............................... 122,438
20,000 Serologicals Corp.* .......................... 80,938
5,000 Vaxgen Inc.* ................................. 68,750
----------
6,856,550
----------
* Non-income producing security
0 See Note 2 in Notes to Financial Statements.
See notes to financial statements
-2-
<PAGE>
MONTEREY FUNDS
Schedules of Investments - May 31, 2000
(Unaudited)
MURPHY NEW WORLD BIOTECHNOLOGY FUND (continued)
--------------------------------------------------------------------------------
Shares Value(degree)
--------------------------------------------------------------------------------
HEALTHCARE FACILITIES 1.65%
30,000 Healthsouth Corp.* ........................... $ 193,125
----------
INSURANCE 2.66%
30,000 Humana Inc.* ................................. 168,750
34,000 Sierra Health Services* ...................... 142,375
----------
311,125
----------
MEDICAL EQUIPMENT & SUPPLIES 2.98%
10,000 Boston Scientific Corp.* ..................... 256,250
6,000 Eclipse Surgical Technologies Inc.* .......... 20,625
10,000 KeraVision, Inc.* ............................ 52,813
5,000 Vasomeical Inc.* ............................. 19,844
----------
349,532
----------
PHARMACEUTICALS 11.93%
6,000 Alexion Pharmaceuticals Inc.* ................ 223,687
10,000 Cortex Pharmaceuticals Inc.* ................. 28,750
2,000 Coulter Pharmaceutical Inc.* ................. 37,187
1,000 Gilead Sciences Inc.* ........................ 54,938
3,000 King Pharmaceuticals Inc.* ................... 161,250
3,000 Medimmune Inc.* .............................. 466,031
4,000 Millennium Pharmaceuticals* .................. 334,375
1,000 Progenics Pharmaceuticals Inc.* .............. 10,406
5,000 Skye Pharma plc ADR .......................... 68,437
2,000 Triangle Pharmaceuticals, Inc.* .............. 12,750
----------
1,397,811
----------
THERAPEUTICS 3.36%
15,000 Avant Immunotherapeutics Inc.* ............... 73,125
1,500 Cor-Therapeutics Inc.* ....................... 95,016
15,000 Nexell Therapeutics Inc.* .................... 51,797
1,000 QLT PhotoTherapeutic Inc.* ................... 49,000
5,000 Transkaryotic Therapies Inc.* ................ 125,156
----------
394,094
----------
Shares/Principal Value
--------------------------------------------------------------------------------
SERVICES 0.34%
5,000 MediaLogic Inc.* ............................. $ 39,531
----------
SCIENTIFIC & Technical Instruments 1.40%
4,000 Caliper Technologies Corp.* .................. 164,125
----------
TOTAL COMMON STOCKS
(cost $10,396,554) .................... 9,705,893
----------
SHORT TERM INVESTMENTS 2.68%
U.S. GOVERNMENT SECURITIES 2.56%
$ 300,000 U.S. Treasury Bill 4.90%, 6/1/2000
(cost $300,000) ....................... 300,000
MUTUAL FUNDS 0.12%
13,946 Firstar Treasury Fund
(cost $13,946) ........................ 13,946
----------
TOTAL SHORT TERM INVESTMENTS .................................. 313,946
----------
TOTAL INVESTMENTS
(cost $10,710,500).............. 85.54% 10,019,839
OTHER ASSETS LESS LIABILITIES........................... 14.46% 1,694,015
------- -----------
TOTAL NET ASSETS........................................100.00% $11,713,854
======= ===========
* Non-income producing security
0 See Note 2 in Notes to Financial Statements.
ADR -- American Depositary Receipts.
See notes to financial statements
-3-
<PAGE>
MONTEREY FUNDS
Schedules of Investments - May 31, 2000
(Unaudited)
MURPHY NEW WORLD TECHNOLOGY CONVERTIBLES FUND
--------------------------------------------------------------------------------
Shares Value(degree)
--------------------------------------------------------------------------------
COMMON STOCKS 21.82%
BIOTECHNOLOGY 2.71%
500 Protein Design Labs Inc.* .................... $ 53,328
-----------
COMPUTER EQUIPMENT & Software 7.69%
1,500 Microsoft Corp.* ............................. 93,797
800 Oracle Corp.* ................................ 57,450
-----------
151,247
-----------
COMPUTER NETWORKS 2.60%
900 Cisco Systems* ............................... 51,216
-----------
SEMICONDUCTORS 6.14%
700 Applied Materials Inc.* ...................... 58,472
500 Intel Corp. .................................. 62,359
-----------
120,831
-----------
TELECOMMUNICATIONS 2.68%
600 JDS Uniphase Corp.* .......................... 52,800
-----------
TOTAL COMMON STOCKS
(cost $449,059) .............................. 429,422
-----------
PREFERRED STOCKS 19.95%
TELECOMMUNICATIONS 19.95%
1,600 Global Crossing Pfd Convertible* ............. 392,400
-----------
TOTAL PREFERRED STOCKS
(cost $406,800) ............................... 392,400
-----------
Shares/Principal Value
--------------------------------------------------------------------------------
CONVERTIBLE BONDS 54.54%
BIOTECHNOLOGY 35.45%
$ 135,000 Affymetrix Inc., 4.75%, due 02/15/07 $ 92,812
426,000 Glycomed Inc., 7.50%, due 01/01/03 298,200
100,000 Millennium Pharmaceuticals Inc.,
5.50%, due 01/15/07 ................... 116,250
100,000 Protein Design Labs Inc.,
5.50%, due 02/15/07 ................... 91,500
-----------
598.762
-----------
ELECTRONICS 9.35%
125,000 Conexant Systems Inc., 4.00%,
due 02/15/07 .......................... 88,594
100,000 Cymer Inc., 3.50%, due 08/06/04 .............. 98,875
120,000 Vitesse Semiconductor Inc., 4.00%,
due 03/15/05. ......................... 95,250
-----------
282,719
-----------
FINANCIAL SERVICES 7.38%
165,000 E Trade Group, 6.00%, due 02/02/07 ........... 145,200
-----------
SOFTWARE 0.19%
60,000 System Software Associates Inc.,
7.00%, due 09/15/02 ................... 3,600
-----------
SPECIALTY MATERIALS 2.17%
60,000 Hexcel Corp., 7.00%, due 08/01/11 ............ 42,600
-----------
TOTAL CONVERTIBLE BONDS
($1,301,062) ................................. 1,072,881
-----------
TOTAL INVESTMENTS
(cost $2,156,921)...................... 96.31% 1,894,703
OTHER ASSETS LESS LIABILITIES........................... 3.69% 72,563
------- -----------
TOTAL NET ASSETS........................................100.00% $ 1,967,266
======= ===========
<FN>
* Non-income producing security.
0 See Note 2 in Notes to Financial Statements.
See notes to finanical statements
</FN>
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
MONTEREY FUNDS
Statements of Assets and Liabilities - May 31, 2000
(Unaudited)
MURPHY
MURPHY MURPHY NEW WORLD
NEW WORLD NEW WORLD TECHNOLOGY
TECHNOLOGY BIOTECHNOLOGY CONVERTIBLES
----------------------------------------------
ASSETS
<S> <C> <C> <C>
Investments in securities, at value
(cost $5,468,099, $10,710,500, and $2,156,921, respectively) $ 3,522,152 $ 10,019,839 $ 1,894,703
Receivable for securities sold ..................................... 326,749 1,969,644 256,805
Receivable for fund shares sold .................................... 21,548 23,520 50,200
Income receivable .................................................. 691 3,085 31,722
Due from investment adviser (Note 3) ............................... 3,025 0 7,144
Due from broker .................................................... 385 0 2,101
Prepaid expenses and other ......................................... 13,986 30,503 11,599
------------ ------------ ------------
Total assets ............................................... 3,888,536 12,046,591 2,254,274
------------ ------------ ------------
LIABILITIES
Payable to custodian ............................................... 0 0 89,524
Payable for securities purchased ................................... 0 203,917 183,639
Due to investment adviser (Note 3) ................................. 0 10,157 0
Due to broker ...................................................... 0 102,194 0
Accrued expenses and other ......................................... 11,391 16,469 13,845
------------ ------------ ------------
Total liabilities .......................................... 11,391 332,737 287,008
------------ ------------ ------------
Total net assets ........................................... $ 3,877,145 $ 11,713,854 $ 1,967,266
============ ============ ============
NET ASSETS
Shares of beneficial interest, no par value;
unlimited shares authorized ................................ $ 4,817,900 $ 9,370,510 $ 2,243,720
Undistributed net investment income (loss) ......................... (24,919) (9,385) 24,363
Accumulated net realized gain (loss) on
investments ................................................ 1,030,111 3,043,390 (38,599)
Net unrealized appreciation (depreciation)
on investments ............................................. (1,945,947) (690,661) (262,218)
------------ ------------ ------------
Net assets ......................................................... $ 3,877,145 $ 11,713,854 $ 1,967,266
============ ============= ============
Net asset value, offering and redemption price per share ........... $ 16.14 $ 11.21 $ 28.58
------------ ------------ ------------
Shares Outstanding ................................................. 240,177 1,045,244 68,822
============ ============= ============
See notes to financial statements
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
MONTEREY FUNDS
Statements of Operations - For The Six Months Ended May 31, 2000
(Unaudited)
MURPHY
MURPHY MURPHY NEW WORLD
NEW WORLD NEW WORLD TECHNOLOGY
TECHNOLOGY BIOTECHNOLOGY CONVERTIBLES
------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Interest .......................................................... $ 12,996 $ 68,007 $ 42,457
Dividends ......................................................... 39 3,772 15
----------- ----------- -----------
Total investment income ................................... 13,035 71,779 42,472
----------- ----------- -----------
EXPENSES
Adviser fees (Note 3) ............................................. 19,073 41,110 5,775
Distribution fees (Note 4) ........................................ 4,768 10,278 2,310
Transfer agent fees ............................................... 8,416 9,872 8,832
Administrative fees (Note 3) ...................................... 8,252 8,551 8,958
Custodian fees .................................................... 3,233 3,863 2,009
Audit fees ........................................................ 4,033 4,011 4,011
Legal fees ........................................................ 5,207 5,257 5,204
Registration fees ................................................. 9,020 8,977 10,764
Trustees' fees .................................................... 634 630 632
Printing expense .................................................. 1,472 1,796 1,681
Postage expense ................................................... 539 887 732
Other expenses .................................................... 854 858 782
----------- ----------- -----------
Total expenses ............................................ 65,501 96,090 51,690
Less: Expense reimbursement from adviser (Note 3) ................. (27,546) (13,926) (33,308)
----------- ----------- -----------
Net expenses .............................................. 37,955 82,164 18,382
----------- ----------- -----------
Net investment income (loss) .............................. (24,920) (10,385) 24,090
----------- ----------- -----------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss) on investments ........................... 1,022,091 3,051,819 83,563
Net change in unrealized appreciation (depreciation) on investments (2,351,867) (556,833) (144,901)
----------- ----------- -----------
Net gain (loss) on investments .................................... (1,329,776) 2,494,986 (61,338)
----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations ................................. $(1,354,696) $ 2,484,601 $ (37,248)
=========== =========== ===========
See notes to financial statements
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
MONTEREY FUNDS
Statements of Changes in Net Assets
MURPHY MURPHY
NEW WORLD NEW WORLD
TECHNOLOGY BIOTECHNOLOGY
---------------------------------------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED
MAY 31, NOV. 30, MAY 31, NOV. 30,
2000 1999 2000 1999
---------------------------------------------------------------
(UNAUDITED) (UNAUDITED)
OPERATIONS
<S> <C> <C> <C> <C>
Net investment income (loss) .......... $ (24,920) $ (19,713) $ (10,385) $ 999
Net realized gain (loss) on investments 1,022,091 115,284 3,051,819 345,002
Net change in unrealized appreciation
(depreciation) on investments .... (2,351,867) 847,028 (556,833) 363,720
------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations ........ (1,354,696) 942,599 2,484,601 709,721
------------ ------------ ------------ ------------
DIVIDENDS PAID TO SHAREHOLDERS
Dividends from net investment income .. 0 0 0 0
Distributions from net realized gain .. (30,244) 0 (128,662) 0
------------ ------------ ------------ ------------
(30,244) 0 (128,662) 0
------------ ------------ ------------ ------------
FUND SHARE TRANSACTIONS
Net proceeds from shares sold ......... 4,739,463 2,777,662 7,531,599 1,082,198
Dividends reinvested .................. 26,928 0 128,453 0
Payment for shares redeemed ........... (2,009,306) (2,230,800) (2,960,042) (1,092,448)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets
from fund share transactions ..... 2,757,085 546,862 4,700,010 (10,250)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets . 1,372,145 1,489,461 7,055,949 699,471
NET ASSETS, BEGINNING OF PERIOD ....... 2,505,000 1,015,539 4,657,905 3,958,434
------------ ------------ ------------ ------------
NET ASSETS, END OF PERIOD ............. $ 3,877,145 $ 2,505,000 $ 11,713,854 $ 4,657,905
============ ============ ============ ============
UNDISTRIBUTED NET
INVESTMENT INCOME (LOSS)
AT END OF PERIOD ................. (24,919) 0 (9,385) 999
============ ============ ============ ============
CHANGES IN SHARES OUTSTANDING
Shares sold ........................... 202,114 172,509 691,882 156,398
Shares issued on reinvestment
of dividends ..................... 1,176 0 17,572 0
Shares redeemed ....................... (81,468) (141,404) (277,047) (162,600)
------------ ------------ ------------ ------------
Net increase (decrease) in
Shares outstanding ............... 121,822 31,105 432,407 (6,202)
============ ============ ============ ============
MURPHY
NEW WORLD
TECHNOLOGY
CONVERTIBLES
-------------------------------
FOR THE SIX
MONTHS ENDED YEAR ENDED
MAY 31, NOV. 30,
2000 1999
-------------------------------
(UNAUDITED)
OPERATIONS
Net investment income (loss) .......... $ 24,090 $ 53,260
Net realized gain (loss) on investments 83,563 248,844
Net change in unrealized appreciation
(depreciation) on investments .... (144,901) 72,890
------------ ------------
Net increase (decrease) in net assets
resulting from operations ........ (37,248) 374,994
------------ ------------
DIVIDENDS PAID TO SHAREHOLDERS
Dividends from net investment income .. (52,386) (56,712)
Distributions from net realized gain .. 0 0
------------ ------------
(52,386) (56,712)
------------ ------------
FUND SHARE TRANSACTIONS
Net proceeds from shares sold ......... 739,306 2,397,905
Dividends reinvested .................. 48,541 52,619
Payment for shares redeemed ........... (194,802) (2,428,098)
------------ ------------
Net increase (decrease) in net assets
from fund share transactions ..... 593,045 22,426
------------ ------------
Net increase (decrease) in net assets . 503,411 340,708
NET ASSETS, BEGINNING OF PERIOD ....... 1,463,855 1,123,147
------------ ------------
NET ASSETS, END OF PERIOD ............. $ 1,967,266 $ 1,463,855
============ ============
UNDISTRIBUTED NET
INVESTMENT INCOME (LOSS)
AT END OF PERIOD ................. 24,363 52,659
============ ============
CHANGES IN SHARES OUTSTANDING
Shares sold ........................... 22,586 96,131
Shares issued on reinvestment
of dividends ..................... 1,797 2,452
Shares redeemed ....................... (6,285) (98,588)
------------ ------------
Net increase (decrease) in
Shares outstanding ............... 18,098 (5)
============ ============
See notes to financial statements
</TABLE>
-7-
<PAGE>
MONTEREY FUNDS
Notes to Financial Statements - May 31, 2000
(Unaudited)
NOTE 1. ORGANIZATION
Monterey Mutual Fund (the "Trust"), formerly Monitrend Mutual Fund, is
registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company. The Trust was organized as
a Massachusetts business trust on January 6, 1984 and consists of nine series of
shares: the PIA Short Term Government Securities Fund, the PIA Income Fund
(formerly the Camborne Government Income Fund), the OCM Gold Fund, the PIA
Equity Fund, the Murphy New World Biotechnology Fund, the Murphy New World
Technology Fund, the Murphy New World Technology Convertibles Fund, the PIA
Global Bond Fund and the PIA Total Return Bond Fund (collectively the "Funds"),
each of which has separate assets and liabilities and differing investment
objectives. The investment objective for each of the Fund's presented herein
are: the Murphy New World Technology Fund, (the "Technology Fund"), 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; the Murphy New World Technology
Biotechnology Fund, ("Biotechnology Fund"), 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; the Murphy New World Technology Convertibles Fund,
("Convertibles Fund"), to maximize total return through a combination of capital
appreciation and income.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Funds 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 Trust'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 Technology Fund, the Biotechnology Fund and the
Convertibles Fund 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 Fund 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 Fund 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 Fund as unrealized gains or losses. When the
futures contract expires or is closed by the Fund, it realizes a gain or loss.
-8-
<PAGE>
MONTEREY FUNDS
Notes to Financial Statements - May 31, 2000 (continued)
(Unaudited)
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 Trust'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
Trust's hedging strategy unsuccessful and could result in a loss to the Trust.
Futures contracts are purchased only on exchanges. The exchange acts as the
counterparty to the Trust's futures transactions; therefore the Trust's credit
risk is limited to failure of the exchange.
Subsequent market fluctuations of securities sold short may require a Trust
to purchase securities at prices which exceed the value reflected on the
Statement of Assets and Liabilities.
FEDERAL INCOME TAXES - It is each 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
Funds paid no Federal Income taxes and no Federal income tax provision was
required. At May 31, 2000, the Convertibles Fund had a capital loss carryforward
of approximately $122,000, which expires in varying amounts through 2002, 2005,
2006.
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 Technology Fund and Biotechnology Fund each have an investment advisory
agreement with Murphy Investment Management, Inc. ("Murphy"), whereby each Fund
pays Murphy a fee, computed daily and payable monthly, at the annual rate of
1.00% of their respective net assets.
The Convertibles Fund also has an investment advisory agreement with
Murphy. The Convertibles Fund 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%
For the six months ended May 31, 2000 Murphy agreed to reimburse the Funds
for expenses in excess of 1.99% of average net assets.
The Trust 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 0.1% of average daily net assets, subject to a
monthly minimum.
-9-
<PAGE>
MONTEREY FUNDS
Notes to Financial Statements - May 31, 2000 (continued)
(Unaudited)
NOTE 4. DISTRIBUTION AGREEMENT AND PLAN
Syndicated Capital, Inc. serves as the Distributor of each Fund's shares.
The President and sole shareholder of the Distributor is also a trustee of the
Trust.
The Trust has adopted a Distribution Plan (the "Plan") pursuant to Rule
12b-1 under the Investment Company Act of 1940. The Plan authorizes each Fund to
reimburse the Distributor for marketing expenses incurred in distributing shares
of each Fund, including the cost of printing sales material and making payments
to dealers in each Fund shares, in any fiscal year, subject to a limit of 0.25%.
NOTE 5. PURCHASES AND SALES OF SECURITIES
The cost of purchases and sales of investment securities (other than
short-term investments) for the six months ended May 31, 2000, were as follows:
PURCHASES SALES
--------- -----
Technology Fund .................... $8,533,546 $6,294,883
Biotechnology Fund ................. 40,790,250 33,648,055
Convertibles Fund .................. 3,065,110 1,610,218
The cost for Federal income tax purposes for the Technology Fund is
$5,485,621, the Biotechnology Fund is $11,272,586 and the Convertibles Fund is
$2,165,000. Unrealized appreciation and depreciation on investments at May 31,
2000 based on cost for Federal income taxes are as follows:
UNREALIZED UNREALIZED
APPRECIATION DEPRECIATION NET
------------ ------------ ---
Technology Fund ........ $78,240 ($2,041,709) ($1,963,469)
Biotechnology Fund ..... 359,428 (1,612,175) (1,252,747)
Convertibles Fund. ..... 2,632 (272,929) (270,297)
-10-
<PAGE>
<TABLE>
<CAPTION>
MONTEREY FUNDS
MURPHY NEW WORLD TECHNOLOGY
Financial Highlights
(For a share outstanding throughout each period)
FOR THE SIX
MONTHS ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MAY 31, NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30,
2000 1999 1998 1997++ 1996* 1995*
-----------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .............. $ 21.17 $ 11.64 $ 19.18 $ 20.51 $ 17.81 $ 14.35
-------- -------- -------- ------- ------- -------
Income from investment operations
Net investment (loss) ............................. (0.15) (0.17) (0.31) (0.33) (0.40) (0.32)
Net realized and unrealized (loss)
on investments ............................ (4.65) 9.70 (4.77) (0.40) 4.86 4.19
-------- -------- -------- ------- ------- -------
Total from investment operations .................. (4.80) 9.53 (5.08) (0.73) 4.46 3.87
-------- -------- -------- ------- ------- -------
Less distributions
Dividends from net investment income .............. 0.00 0.00 0.00 0.00 0.00 0.00
Distributions from net realized gains ............. (0.23) 0.00 (2.46) (0.60) (1.76) (0.41)
-------- -------- -------- ------- ------- -------
Total distributions ............................... (0.23) 0.00 (2.46) (0.60) (1.76) (0.41)
-------- -------- -------- ------- ------- -------
Net asset value, end of period .................... $ 16.14 $ 21.17 $ 11.64 $ 19.18 $ 20.51 $ 17.81
======== ======== ======== ======= ======= =======
Total return** .................................... (22.99%) 81.87% (28.51%) (3.69%) 26.32% 26.95%
Ratios/supplemental data
Net assets, end of period (in 000's) .............. $ 3,877 $ 2,505 $ 1,016 $ 1,439 $ 886 $ 281
Ratio of expenses to average net assets ........... 1.99%+ 1.99% 2.44% 2.44% 2.34% 2.44%
Ratio of expenses to average net assets,
before reimbursement .............................. 3.44%+ 6.10% 7.14% 8.13% 10.44% 18.74%
Ratio of net investment income (loss) to
average net assets ................................ (1.31%)+ (1.32%) (2.20%) (1.96%) 2.06% 1.97%
Portfolio turnover rate ........................... 217.28% 434.84% 142.89% 57.01% 17.33% 40.77%
<FN>
-----------
* Based on average shares outstanding.
+ Annualized
** Not annualized for periods less than a year.
++ 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.
See notes to financial statements
</FN>
</TABLE>
-11-
<PAGE>
<TABLE>
<CAPTION>
MONTEREY FUNDS
MURPHY NEW WORLD BIOTECHNOLOGY
Financial Highlights
(For a share outstanding throughout each period)
FOR THE SIX
MONTHS ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MAY 31, NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30,
2000 1999 1998 1997++ 1996* 1995*
-------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .............. $ 7.60 $ 6.39 $ 8.07 $ 7.19 $ 6.74 $ 6.12
------- ------- ------- ------- ------- -------
Income from investment operations
Net investment (loss) ............................. (0.01) 0.00 (0.15) (0.16) (0.17) (0.15)
Net realized and unrealized (loss)
on investments ............................ 3.83 1.21 (1.53) 1.04 0.62 0.77
------- ------- ------- ------- ------- -------
Total from investment operations .................. 3.82 1.21 (1.68) 0.88 0.45 0.62
------- ------- ------- ------- ------- -------
Less distributions
Distributions from net realized gains ............. (0.21) 0.00 0.00 0.00 0.00 0.00
------- ------- ------- ------- ------- -------
Total distributions ............................... (0.21) 0.00 0.00 0.00 0.00 0.00
------- ------- ------- ------- ------- -------
Net asset value, end of period .................... $ 11.21 $ 7.60 $ 6.39 $ 8.07 $ 7.19 $ 6.74
======= ======= ======= ======= ======= =======
Total return** .................................... 51.74% 18.94% (20.82%) 12.24% 6.67% 10.13%
Ratios/supplemental data
Net assets, end of period (in 000's) .............. $11,714 $ 4,658 $ 3,958 $ 2,353 $ 231 $ 400
Ratio of expenses to average net assets ........... 1.99%+ 1.99% 2.44% 2.47% 2.65% 2.89%
Ratio of expenses to average net assets,
before reimbursement .............................. 2.33%+ 3.27% 3.79% 8.58% 15.28% 9.96%
Ratio of net investment income (loss) to
average net assets ................................ (0.25%)+ 0.02% (2.11%) (1.98%) (2.31%) (2.18%)
Portfolio turnover rate ........................... 675.01% 313.79% 458.56% 15.09% 2.79% 36.89%
<FN>
-------------------
+ Annualized
* Based on average shares outstanding.
++ 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.
** Not annualized for periods less than one year.
See notes to financial statements
</FN>
</TABLE>
-12-
<PAGE>
<TABLE>
<CAPTION>
MONTEREY FUNDS
MURPHY NEW WORLD TECHNOLOGY CONVERTIBLES
Financial Highlights
(For a share outstanding throughout each period)
FOR THE SIX
MONTHS ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MAY 31, NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30,
2000 1999 1998 1997++ 1996 1995
-------------------------------------------------------------------------------------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ... $ 28.86 $ 22.14 $ 26.52 $ 26.64 $ 21.42 $ 16.67
------- ------- ------- ------- ------- -------
Income from investment operations
Net investment (loss) .................. 0.41 1.05 1.19 0.21 0.01 0.02
Net realized and unrealized (loss)
on investments ................. 0.36 6.79 (5.27) (0.33) 5.23 4.82
------- ------- ------- ------- ------- -------
Total from investment operations ....... 0.77 7.84 (4.08) (0.12) 5.24 4.84
------- ------- ------- ------- ------- -------
Less distributions
Dividends from net investment income ... (1.05) (1.12) (0.30) 0.00 (0.02) (0.09)
------- ------- ------- ------- ------- -------
Total distributions .................... (1.05) (1.12) (0.30) 0.00 (0.02) (0.09)
------- ------- ------- ------- ------- -------
Net asset value, end of period ......... $ 28.58 $ 28.86 $ 22.14 $ 26.52 $ 26.66 $ 21.51
======= ======= ======= ======= ======= =======
Total return** ......................... 2.88% 37.16% (15.55%) (0.45%) 24.49% 29.19%
Ratios/supplemental data
Net assets, end of period (in 000's) ... $ 1,967 $ 1,464 $ 1,123 $ 1,435 $ 1,560 $ 1,377
Ratio of expenses to average net assets 1.99%+ 1.99% 2.44% 2.44% 2.26% 2.44%
Ratio of expenses to average net assets,
before reimbursement ................... 5.59%+ 6.91% 6.94% 6.83% 5.11% 6.08%
Ratio of net investment income (loss) to
average net assets ..................... 2.60%+ 3.99% 4.64% 0.76% 0.04% 0.10%
Portfolio turnover rate ................ 148.31% 156.08% 28.90% 85.91% 80.93% 151.86%
<FN>
--------------
+ Annualized
++ On 12/13/96 Murphy Investment Management 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.
** Not annualized for periods less than one year.
</FN>
</TABLE>
See notes to financial statements
-13-
<PAGE>
Monterey Mutual Funds
Distributed by:
Syndicated Capital, Inc.
1299 Ocean Avenue, Suite 210
Santa Monica, CA 90401
<PAGE>
MONTEREY
FUNDS
-OCM Gold
-PIA Income
-PIA Equity
Monterey
Mutual
Fund
Semi-Annual Report
(Unaudited)
May 31, 2000
<PAGE>
<TABLE>
<CAPTION>
MONTEREY FUNDS
Schedules of Investments - May 31, 2000
(Unaudited)
OCM GOLD FUND
--------------------------------------------------------------------------------
Shares Value**
--------------------------------------------------------------------------------
COMMON STOCKS 91.40%
MAJOR GOLD PRODUCERS 51.67%
<C> <S> <C>
31,500 Anglogold Ltd. ADR ....................................$ 619,172
32,000 Barrick Gold Corp. .................................... 578,000
15,000 Freeport-McMoRan Copper &
Gold Inc. Class B ..................................... 137,813
5,000 Freeport-McMoRan Copper & Gold Inc. ................... 44,687
100,000 Gold Fields Ltd. ADR .................................. 390,625
150,000 Homestake Mining Co. .................................. 1,012,500
75,000 Newmont Mining Corp. .................................. 1,729,687
130,000 Placer Dome Inc. ...................................... 1,072,500
----------
5,584,984
----------
INTERMEDIATE/MID-TIER
GOLD PRODUCERS 24.62%
35,000 Agnico-Eagle Mines .................................... 188,125
130,000 Battle Mountain Gold Co. .............................. 251,875
15,000 Compania de Minas Buenaventura - ADR .................. 225,938
75,000 Glamis Gold Ltd.* ..................................... 140,625
140,000 GoldCorp Inc. ......................................... 892,500
30,000 Harmony Gold Mining - ADR ............................. 147,656
300,000 Kinross Gold Corp.* ................................... 281,250
85,000 Meridian Gold Inc.* ................................... 462,187
125,000 TVX Gold Inc.* ........................................ 70,312
----------
2,660,468
----------
JUNIOR GOLD PRODUCERS 5.03%
55,000 Aurizon Mines, Ltd. ................................... 36,907
66,000 Golden Cycle Gold Corp.* .............................. 400,125
30,000 Miramar Mining Corp.* ................................. 16,025
55,000 Richmont Mines Inc.* .................................. 66,102
10,000 River Gold Mines Ltd.* ................................ 15,691
25,000 Viceroy Resources Corp. ............................... 9,181
----------
544,031
----------
<FN>
* Non-income producing security.
** See Note 2 in Notes to Financial Statements.
ADR - American Depositary Receipts.
</FN>
</TABLE>
<TABLE>
<CAPTION>
OCM GOLD FUND (continued)
--------------------------------------------------------------------------------
Shares Value**
--------------------------------------------------------------------------------
<C> <S> <C>
EXPLORATION AND DEVELOPMENT
COMPANIES 0.68%
200,000 Addwest Minerals International Ltd.* ..................$ 8,012
10,000 Crown Resources Corp. ................................. 7,188
100,000 Franc-Or Resources Corp. .............................. 16,692
10,000 Golden Queen Mining Ltd.* ............................. 1,936
185,500 New Guinea Gold Corp. ................................. 12,386
25,000 Omni Resources Inc. ................................... 1,085
100,000 Silver Eagle Resources Inc.* .......................... 26,708
----------
74,007
----------
PRIMARY SILVER PRODUCERS 0.85%
18,332 Coeur D'Alene Mines Corp. ............................. 44,684
45,000 Hecla Mining Co. ...................................... 47,812
----------
92,496
----------
PLATINUM/PALLADIUM
PRODUCERS 3.25%
12,500 Stillwater Mining Co.* ................................ 350,781
----------
GOLD MINING ROYALTY
COMPANIES 4.48%
40,000 Franco Nevada Mining Corp. ............................ 484,746
----------
NONMETALLIC MINERAL MINING 0.82%
15,000 Aber Resournces Ltd.* ................................. 88,125
----------
TOTAL COMMON STOCKS
(cost $12,111,266) ................................... 9,879,638
----------
PREFERRED STOCKS 0.16%
1,000 Placer Dome Inc. Series A
(cost $16,075) .............................. 17,188
----------
See notes to financial statements
-1-
<PAGE>
MONTEREY FUNDS
Schedules of Investments - May 31, 2000
(Unaudited)
OCM GOLD FUND (continued)
--------------------------------------------------------------------------------
Shares/Principal Value Value(degree)
--------------------------------------------------------------------------------
SHORT TERM INVESTMENTS 8.84%
MUTUAL FUNDS 5.05%
545,458 Firstar Treasury Fund
(cost $545,458) ......................... $ 545,458
----------
REPURCHASE AGREEMENTS 3.79%
$ 410,000 Firstar Bank Repurchase Agreement, 4.25%,
due June 1, 2000, collateralized
by FHA/VA Pool, 6.50%
due 08/15/11 ($418,279)
(cost $410,000) ................................. 410,000
----------
TOTAL SHORT TERM INVESTMENTS .................................... 955,458
----------
TOTAL INVESTMENTS
(cost $13,082,799) ...................... 100.40% 10,852,284
Liabilities less other assets ........................... (0.40%) (42,928)
------ -----------
TOTAL NET ASSETS ........................................ 100.00% $10,809,356
====== ===========
<FN>
* Non-income producing security.
** See Note 2 in Notes to Financial Statements.
</FN>
</TABLE>
<TABLE>
<CAPTION>
PIA INCOME FUND
--------------------------------------------------------------------------------
Principal
Value Value(degree)
--------------------------------------------------------------------------------
LONG TERM INVESTMENTS 93.82%
CORPORATE 19.47%
<C> <S> <C>
$ 30,000 Rochester Gas & Electric Corp.,
9.375%, 04/01/21 ..............................$ 30,614
40,000 Rohm & Haas Holdings Co.,
9.80%, 04/15/20 ............................... 44,780
85,000 W.R. Berkley Corp., 9.875%,
05/15/08 ................................... 86,007
----------
161,401
----------
MORTGAGE-BACKED SECURITIES 3.75%
502 FNMA CMO 199-192 CL-SA,
11.00%, 04/25/07 ................................ 501
7,451 GNMA, 9.50%, 09/15/19 ................................. 7,787
2,916 Prudential 1993-59 A5,
7.125%, 12/25/00 ................................ 2,905
18,925 Traveler's Mortgage Securities
Corp., 12.00%, 03/01/14 ..................... 19,950
----------
31,143
----------
U.S. GOVERNMENT SECURITIES 70.60%
135,000 U.S. Treasury Bonds,
7.25%, 08/15/04 ............................. 137,953
----------
135,000 U.S. Treasury Bonds,
6.50%, 10/15/06 ............................. 134,199
----------
100,000 U.S. Treasury Bonds,
6.00%, 08/15/09 ............................. 97,406
----------
25,000 U.S. Treasury Bonds,
6.375%, 08/15/27 ............................ 25,281
----------
85,000 U.S. Treasury Bonds,
6.125%, 11/15/27 ............................ 83,300
----------
25,000 U.S. Treasury Bonds,
5.50%, 08/15/28 ............................. 22,516
----------
85,000 U.S. Treasury Bonds,
6.125%, 08/15/29 ............................ 84,681
----------
585,336
----------
</TABLE>
See notes to financial statements
-2-
<PAGE>
MONTEREY FUNDS
Schedules of Investments - May 31, 2000
(Unaudited)
PIA INCOME FUND (continued)
--------------------------------------------------------------------------------
Shares/Principal Value Value(degree)
--------------------------------------------------------------------------------
TOTAL LONG TERM INVESTMENTS
(cost $796,098) .......................................$ 777,880
----------
SHORT TERM INVESTMENTS 2.68%
22,265 Firstar Treasury Fund
(cost $22,265) .............................. 22,265
----------
TOTAL INVESTMENTS
(cost $818,363) .......................... 96.50% 800,145
Other assets less liabilities .......................... 3.50% 28,985
------- ----------
TOTAL NET ASSETS 100.00% $ 829,130
======= ==========
* Non-income producing security.
0 See Note 2 in Notes to Financial Statements.
CMO - Collateralized Mortgage Obligation
FNMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
PIA EQUITY
--------------------------------------------------------------------------------
Shares/Principal Value Value(degree)
--------------------------------------------------------------------------------
COMMON STOCKS 46.49%
BANKING 2.15%
2,150 Cullen/Frost Bankers Inc. ........................ $ 56,975
--------
CAPITAL GOODS 2.64%
3,850 Callaway Golf .................................... 69,781
--------
COMPUTERS/SOFTWARE 3.28%
3,500 Concord Communication Inc.* ...................... 86,625
--------
COSMETICS & Toiletries 2.24%
2,250 Alberto-Culver Co. ............................... 59,203
--------
DRUGS WHOLESALE 3.44%
17,550 Bergen Brunswig Corp. ............................ 91,040
--------
ELECTRONICS 1.55%
1,400 Tweeter Home Entertainment Group Inc.* ........... 40,994
--------
HOME FURNISHINGS STORES 1.83%
5,700 Pier 1 Imports Inc. .............................. 48,450
NETWORK & COMMUNICATION DEVICES 3.22%
7,750 Netrix Corp.* .................................... 85,008
--------
OIL & Gas Equipment Services 3.01%
1,500 Lone Star Technologies Inc.* ..................... 79,500
--------
REAL ESTATE INVESTMENT TRUSTS 7.41%
5,000 Crescent Real Estate Equities Co. ................ 102,188
4,350 Duke Realty Investments Inc. ..................... 93,797
--------
195,985
--------
See notes to financial statements
-3-
<PAGE>
PIA EQUITY (continued)
--------------------------------------------------------------------------------
Shares/Principal Value Value(degree)
--------------------------------------------------------------------------------
RETAIL 7.38%
9,375 Ames Department Stores Inc.* ..................... $ 111,035
4,400 Children's Place Retail Stores Inc.* ............. 84,150
----------
195,185
----------
RUBBER & PLASTICS 2.60%
15,200 U.S. Plastic Lumber Corp.* ....................... 68,875
----------
SPECIALTY CHEMICALS 3.45%
3,500 Cabot Corp. ...................................... 91,219
----------
SEMICONDUCTOR 2.29%
2,800 Microsemi Corp.* ................................. 60,637
----------
TOTAL COMMON STOCKS
(cost $1,476,499) 1,229,477
----------
SHORT TERM INVESTMENTS 55.05%
MUTUAL FUNDS 5.66%
149,560 Firstar Treasury Fund (cost $149,560) ............ 149,560
----------
REPURCHASE AGREEMENTS 49.39%
$1,306,000 Firstar Bank Repurchase Agreement 4.25%
due June 1, 2000 collateralized by
FHA/VA Pool, 6.50%,
due 08/15/11 ($1,332,371)
(cost $1,306,000) ....................... 1,306,000
----------
TOTAL SHORT TERM INVESTMENTS .................................... 1,455,560
----------
* Non-income producing security.
0 See Note 2 in Notes to Financial Statements.
PIA EQUITY (continued)
--------------------------------------------------------------------------------
Shares/Principal Value Value(degree)
--------------------------------------------------------------------------------
TOTAL INVESTMENTS
(cost $2,932,059) ...................101.54% $ 2,685,037
LIABILITIES LESS OTHER ASSETS ...................... (1.54%) (40,943)
------- -----------
TOTAL NET ASSETS .................................. 100.00% $ 2,644,094
======= ===========
See notes to financial statements
-4-
<PAGE>
MONTEREY FUNDS
Statements of Assets and Liabilities - May 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
OCM PIA PIA
GOLD INCOME EQUITY
----------------------------------------------
ASSETS
<S> <C> <C> <C>
Investments in securities, at value
($13,082,799, $818,363 and $1,626,059, respectively) $ 10,852,284 $ 800,145 $ 1,379,037
Repurchase agreements, at value (cost $1,306,000) .......... 0 0 1,306,000
Receivable for fund shares sold ............................ 43,347 0 0
Income receivable .......................................... 5,805 10,596 3,545
Due from investment adviser (Note 3) ....................... 0 11,126 1,050
Prepaid expenses and other ................................. 6,992 15,591 16,187
------------ ------------ ------------
Total assets ....................................... 10,908,428 837,458 2,705,819
------------ ------------ ------------
LIABILITIES
Payable for securities purchased ........................... 0 0 50,385
Payable for fund shares redeemed ........................... 63,251 0 3,640
Accrued expenses and other ................................. 30,057 7,982 7,700
Dividends payable .......................................... 0 346 0
Due to investment adviser (Note 3) ......................... 5,764 0 0
------------ ------------ ------------
Total liabilities .................................. 99,072 8,328 61,725
------------ ------------ ------------
Total net assets ................................... $ 10,809,356 $ 829,130 $ 2,644,094
============ ============ ============
NET ASSETS
Shares of beneficial interest, no par value;
unlimited shares authorized ........................ $ 15,949,364 $ 894,543 $ 2,315,073
Undistributed net investment (loss) ........................ (60,699) (139) (3,271)
Accumulated net realized gain (loss) on
investments ........................................ (2,848,795) (47,055) 579,314
Net unrealized appreciation (depreciation)
on investments ..................................... (2,230,514) (18,219) (247,022)
------------ ------------ ------------
Net assets ......................................... $ 10,809,356 $ 829,130 $ 2,644,094
============ ============ ============
CALCULATION OF MAXIMUM OFFERING PRICE
Net asset value, offering and redemption price per share ... $ 4.12 $ 12.99 $ 20.32
Maximum sales charge (4.50% of offering price) ............. 0.19 0.61 0.96
------------ ------------ ------------
Offering price to public ................................... $ 4.31 $ 13.60 $ 21.28
------------ ------------ ------------
Shares Outstanding ................................. 2,620,541 63,825 130,151
============ ============ ============
See notes to financial statements
</TABLE>
-5-
<PAGE>
<TABLE>
<CAPTION>
MONTEREY FUNDS
Statements of Operations - For The Six Months Ended May 31, 2000
(Unaudited)
OCM PIA PIA
GOLD INCOME EQUITY
------------------------------------------
INVESTMENT INCOME
<S> <C> <C> <C>
Interest ......................................................... $ 21,543 $ 28,540 $ 14,447
Dividends ........................................................ 52,929 0 5,410
----------- ----------- -----------
Total investment income .................................. 74,472 28,540 19,857
----------- ----------- -----------
EXPENSES
Adviser & sub adviser fees (Note 3) .............................. 55,398 1,687 14,609
Distribution fees (Note 4) ....................................... 54,844 1,085 3,652
Administrative fees (Note 3) ..................................... 8,619 8,551 8,105
Transfer agent fees .............................................. 10,480 8,142 8,721
Custodian fees ................................................... 5,240 1,860 2,873
Audit fees ....................................................... 4,011 4,011 3,911
Legal fees ....................................................... 2,069 3,641 3,007
Registration fees ................................................ 13,203 2,503 3,651
Trustees' fees ................................................... 634 760 634
Printing expense ................................................. 3,698 1,034 1,547
Postage expense .................................................. 1,464 501 366
Other expenses ................................................... 1,141 540 1,234
----------- ----------- -----------
Total expenses ........................................... 160,801 34,315 52,310
Less: Expense reimbursement from adviser & sub-adviser (Note 3) .. (25,630) (29,632) (25,977)
----------- ----------- -----------
Net expenses ............................................. 135,171 4,683 26,333
----------- ----------- -----------
Net investment income (loss) ............................. (60,699) 23,857 (6,476)
----------- ----------- -----------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss) on investments .......................... (4,489) (6,476) 626,879
Net change in unrealized appreciation (deprecation) on investments (1,526,706) (13,056) (318,975)
----------- ----------- -----------
Net gain (loss) on investments ................................... (1,531,195) (19,532) 307,904
----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations ................................ $(1,591,894) $ 4,325 $ 301,428
=========== =========== ===========
See notes to financial statements
</TABLE>
-6-
<PAGE>
<TABLE>
<CAPTION>
MONTEREY FUNDS
Statements of Changes in Net Assets
OCM PIA
GOLD INCOME
---------------------------------------------------------------------
For the six For the six
months ended Year ended months ended Year ended
May 31, Nov. 30, May 31, Nov. 30,
2000 1999 2000 1999
----------------------------------------------------------------------
(Unaudited) (Unaudited)
Operations
<S> <C> <C> <C> <C>
Net investment income (loss) .......... $ (60,699) $ (99,883) $ 23,857 $ 51,646
Net realized gain (loss) on investments (4,489) (667,419) (6,476) (769)
Net change in unrealized appreciation
(depreciation) on investments . (1,526,706) 339,128 (61,369) (61,369)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations ..... (1,591,894) (428,174) 4,325 (10,492)
------------ ------------ ------------ ------------
Net equalization (debits) credits ..... 0 0 98 (142)
------------ ------------ ------------ ------------
Dividends Paid to Shareholders
Dividends from net investment income .. 0 0 (24,493) (51,616)
Distributions from realized gains ..... 0 0 0 0
------------ ------------ ------------ ------------
0 0 (24,493) (51,616)
------------ ------------ ------------ ------------
Fund Share Transactions
Net proceeds from shares sold ......... 1,566,765 4,601,404 65,494 98,544
Dividends reinvested .................. 0 0 22,568 47,613
Payment for shares redeemed ........... (964,610) (625,395) (105,703) (238,969)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets
from fund share transactions .. 602,155 3,976,009 (17,641) (92,812)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets . (989,739) 3,547,835 (37,711) (155,062)
NET ASSETS, Beginning of Period ....... 11,799,095 8,251,260 866,841 1,021,903
------------ ------------ ------------ ------------
NET ASSETS, End of Period ............. $ 10,809,356 $ 11,799,095 $ 829,130 $ 866,841
============ ============ ============ ============
Undistributed net
investment income (loss)
at end of period .............. $ (60,699) $ 0 $ (139) $ 496
============ ============ ============ ============
Changes in Shares Outstanding
Shares sold ........................... 353,925 963,359 4,975 7,329
Shares issued on reinvestment
of dividends .................. 0 0 1,721 3,471
Shares redeemed ....................... (219,093) (134,176) (7,994) (17,255)
------------ ------------ ------------ ------------
Net increase (decrease) in
Shares outstanding ............ 134,832 829,183 (1,298) (6,455)
============ ============ ============ ============
PIA
EQUITY
---------------------------------------
For the six
months ended Year ended
May 31, Nov. 30,
2000 1999
---------------------------------------
(Unaudited)
Operations
Net investment income (loss) .......... $ (6,476) $ 5,166
Net realized gain (loss) on investments 626,879 (32,920)
Net change in unrealized appreciation
(depreciation) on investments . (318,975) 249,715
------------ ------------
Net increase (decrease) in net assets
resulting from operations ..... 301,428 221,961
------------ ------------
Net equalization (debits) credits ..... 0 0
------------ ------------
Dividends Paid to Shareholders
Dividends from net investment income .. 0 (9,651)
Distributions from realized gains ..... 0 (200,251)
------------ ------------
0 (209,902)
------------ ------------
Fund Share Transactions
Net proceeds from shares sold ......... 650,362 1,632,677
Dividends reinvested .................. 0 209,901
Payment for shares redeemed ........... (379,336) (2,039,792)
------------ ------------
Net increase (decrease) in net assets
from fund share transactions .. 271,026 (197,214)
------------ ------------
Net increase (decrease) in net assets . 572,454 (185,155)
NET ASSETS, Beginning of Period ....... 2,071,640 2,256,795
------------ ------------
NET ASSETS, End of Period ............. $ 2,644,094 $ 2,071,640
============ ============
Undistributed net
investment income (loss)
at end of period .............. $ (3,271) $ 3,204
============ ============
Changes in Shares Outstanding
Shares sold ........................... 31,324 107,096
Shares issued on reinvestment
of dividends .................. 0 13,490
Shares redeemed ....................... (18,365) (132,037)
------------ ------------
Net increase (decrease) in
Shares outstanding ............ 12,959 (11,451)
============ ============
See notes to financial statements
</TABLE>
-7-
<PAGE>
MONTEREY FUNDS
Notes To Financial Statements - May 31, 2000
(Unaudited)
NOTE 1. ORGANIZATION
Monterey Mutual Fund (the "Trust"), formerly Monitrend Mutual Fund, is
registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company. The Trust was organized as
a Massachusetts business trust on January 6, 1984 and consists of nine series of
shares: the PIA Short Term Government Securities Fund, the PIA Income Fund
(formerly the Camborne Government Income Fund), the OCM Gold Fund, the PIA
Equity Fund, the Murphy New World Biotechnology Fund, the Murphy New World
Technology Fund, the Murphy New World Technology Convertibles Fund, the PIA
Global Bond Fund and the PIA Total Return Bond Fund (collectively the "Funds"),
each of which has separate assets and liabilities and differing investment
objectives. The investment objective for each of the Fund's presented herein
are: the OCM Gold Fund, (the "Gold Fund"), 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; the PIA Income Fund,
(the "Income Fund") growth of capital, whether over the short or long-term,
income and preservation of capital; the PIA Equity Fund, (the "Equity Fund"),
long-term growth of capital.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
by the Funds 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 Trust'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 Income Fund and Equity Fund 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 Fund
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 Fund 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 Fund as
unrealized gains or losses. When the futures contract expires or is closed by
the Fund 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.
-8-
<PAGE>
MONTEREY FUNDS
Notes To Financial Statements - May 31, 2000 (continued)
(Unaudited)
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 failure of the exchange.
FEDERAL INCOME TAXES - It is each 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 Funds paid no Federal Income taxes and no Federal income tax
provision was required. At May 31, 2000, the Gold Fund and Income Fund has
capital loss carryovers of approximately $2,706,000 and $41,000, respectively,
which expire in varying amounts through 2003 and 2005, respectively.
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 Gold Fund has an advisory agreement with Orrell Capital Management,
a division of Orrell and Company, Inc. ("Orrell"). Under the agreement, the Gold
Fund 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 $200 million ........ 0.500%
Over $250 million ................... 0.375%
The Income Fund has an investment advisory agreement with Pacific
Income Advisers, Inc. ("PIA"), and PIA had a sub-advisory agreement with
Camborne Advisors Inc. Effective on January 7, 2000, Camborne Advisers resigned
as sub-adviser. Under the agreement, the Income Fund pays PIA a fee computed
daily and payable monthly, at an annual rate of 0.40% of the Income Fund's daily
net assets; and until January 7, 2000, PIA paid Camborne Advisors, Inc. a
sub-advisory fee computed daily and paid monthly at an annual rate of 0.20% of
the Income Fund's daily net assets.
The Equity Fund has an investment advisory agreement with PIA. The
Equity Fund pays PIA a fee computed daily and payable monthly, at the following
annual rate 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 $200 million ........ 0.500%
Over $250 million ................... 0.375%
During the six months ended May 31, 2000 the advisers agreed to
reimburse the Funds for expenses in excess of 2.44% of average net assets for
the Gold Fund, 1.80% for the Equity Fund and 1.10% of average net assets for the
Income Fund. The amounts reimbursed by the advisers in 2000 are set forth in the
Statement of Operations.
-9-
<PAGE>
MONTEREY FUNDS
Notes To Financial Statements - May 31, 2000 (continued)
(Unaudited)
The Fund 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 0.10% 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 Funds'
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 Trust.
The Trust has adopted a Distribution Plan (the "Plan") pursuant to Rule
12b-1 under the Investment Company Act of 1940. The Plan authorizes each Fund to
reimburse the Distributor for marketing expenses incurred in distributing shares
of each Fund, including the cost of printing sales material and making payments
to dealers in each Fund shares, in any fiscal year, subject to a limit of 0.99%
for the Gold Fund, 0.10% for the Income Fund and 0.25% for the Equity Fund.
Distribution fees incurred by each Fund 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 six months ended May 31,2000, were as follows:
PURCHASES SALES
--------- -----
Gold Fund ............. $1,225,719 $ 68,786
Income Fund ........... 506,367 534,995
Equity Fund ........... 7,427,408 8,401,249
The cost for Federal income tax purposes for the Gold Fund is
$13,394,025, the Income Fund is $818,363 and the Equity Fund is $2,932,059.
Unrealized appreciation and depreciation on investments at May 31, 2000 based on
cost for Federal income taxes are as follows:
Unrealized Unrealized
Appreciation Depreciation Net
------------ ------------ ---
Gold Fund $ 558,880 ($3,100,621) ($2,541,741)
Income Fund 5,418 (23,636) (18,218)
Equity Fund 47,620 (294,642) (247,022)
-10-
<PAGE>
MONTEREY FUNDS
OCM GOLD
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
For the six Year Year Year Year Year
months ended ended ended ended ended ended
May 31, Nov. 30, Nov. 30, Nov. 30, Nov. 30, Nov. 30,
2000 1999 1998 1997++ 1996* 1995*
---------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......... $ 4.75 $ 4.98 $ 5.09 $ 8.29 $ 5.91 $ 5.87
------- ------- ------- -------- -------- --------
Income From Investment Operations
Net investment loss ........................... (0.02) (0.04) (0.03) (0.09) (0.15) (0.09)
Net realized and unrealized gain/(loss)
on investments ................................ (0.61) (0.19) (0.08) (3.11) 2.53 0.13
------- ------- ------- -------- -------- --------
Total from investment operations .............. (0.63) (0.23) (0.11) (3.20) 2.38 0.04
------- ------- ------- -------- -------- --------
Less Distributions
Dividends from net investment income .......... 0.00 0.00 0.00 0.00 0.00 0
------- ------- ------- -------- -------- --------
Total distributions ........................... 0.00 0.00 0.00 0.00 0.00 0
------- ------- ------- -------- -------- --------
Net asset value, end of period ................ $ 4.12 $ 4.75 $ 4.98 $ 5.09 $ 8.29 $ 5.91
======= ======= ======= ======== ======= ========
Total return** ................................ (13.26%) (4.62%) (2.16%) (38.60%) 40.27% 0.68%
Ratios/Supplemental Data
Net assets, end of period (in 000's) .......... $10,809 $11,799 $ 8,251 $ 1,627 $ 1,531$ 421
Ratio of expenses to average net assets ....... 2.44%+ 2.44% 2.44% 2.44% 2.37% 2.44%
Ratio of expenses to average net
assets, before reimbursement .......... 2.90%+ 3.02% 3.32% 5.78% 6.15% 12.52%
Ratio of net investment income (loss) to
average net assets ............................ (1.10%)+ (1.03%) (0.96%) (1.60%) (1.72%) (1.57%)
Portfolio turnover rate ....................... 0.70% 9.03% 1.73% 17.68% 35.70% 15.57%
<FN>
+ Annualized
* Based on average shares outstanding.
** Excluding sales charge. Not annualized for periods less than a year.
++ 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.
See notes to financial statements
</FN>
</TABLE>
-11-
<PAGE>
<TABLE>
<CAPTION>
MONTEREY FUNDS
PIA INCOME
Financial Highlights
(For a share outstanding throughout each period)
For the six Year Year Year Year Year
months ended ended ended ended ended ended
May 31, Nov. 30, Nov. 30, Nov. 30, Nov. 30, Nov. 30,
2000 1999 1998 1997 1996 1995
---------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............ $ 13.31 $ 14.28 $ 14.00 $ 13.59 $ 13.88 $ 12.76
-------- -------- ------- -------- --------- -------
Income From Investment Operations
Net investment income ........................... 0.38 0.81 0.87 0.89 0.73 0.81
Net realized and unrealized gain/(loss)
on investments .................................. (0.32) (0.97) 0.31 0.38 (0.28) 1.12
-------- -------- ------- -------- --------- -------
Total from investment operations ................ 0.06 (0.16) 1.18 1.27 0.45 1.93
-------- -------- ------- -------- --------- -------
Less Distributions
Dividends from net investment income ............ (0.38) (0.81) (0.90) (0.86) (0.74) (0.81)
-------- -------- ------- -------- --------- -------
Total distributions ............................. (0.38) (0.81) (0.90) (0.86) (0.74) (0.81)
-------- -------- ------- -------- --------- -------
Net asset value, end of period .................. $ 12.99 $ 13.31 $ 14.28 $ 14.00 $ 13.59 $ 13.88
======== ======== ======= ======== ========= =======
Total return* ................................... 0.46% (1.15%) 8.68% 9.70% 3.42% 15.56%
Ratios/Supplemental Data
Net assets, end of period (in 000's) ............ $ 829 $ 867 $ 1,022 $ 961 $ 1,293 $ 947
Ratio of expenses to average net assets ......... 1.10%+ 1.10% 1.10% 1.10% 1.07% 1.10%
Ratio of expenses to average net
assets, before reimbursement .................... 8.14%+ 6.50% 4.73% 6.98% 5.68% 5.73%
Ratio of net investment income (loss)
to average net assets ........................... 5.66%+ 5.88% 6.15% 6.53% 5.35% 6.04%
Portfolio turnover rate ......................... 57.21% 103.24% 122.44% 111.26% 129.17% 91.03%
<FN>
+ Annualized
* Excluding sales charge.
</FN>
</TABLE>
See notes to financial statements
-12-
<PAGE>
<TABLE>
<CAPTION>
MONTEREY FUNDS
PIA EQUITY
Financial Highlights
(For a share outstanding throughout each period)
For the six Year Year Year Year Year
months ended ended ended ended ended ended
May 31, Nov. 30, Nov. 30, Nov. 30, Nov. 30, Nov. 30,
2000 1999 1998 1997++ 1996* 1995*
---------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .............. $ 17.68 $ 17.54 $ 20.79 $ 19.63 $ 15.36 $ 11.12
Income From Investment Operations
Net investment income/(loss) ...................... (0.05) 0.05 0.06 (1.21) (0.37) (0.24)
Net realized and unrealized gain/(loss)
on investments .................................... 2.69 1.83 (0.91) 3.05 4.64 4.48
Total from investment operations .................. 2.64 1.88 (0.85) 1.84 4.27 4.24
Less Distributions
Dividends from net investment income .............. 0.00 (0.08) 0.00 0.00 0.00 0.00
Distributions from realized gains ................. 0.00 (1.66) (2.40) (0.68) 0.00 0.00
Total distributions ............................... 0.00 (1.74) (2.40) (0.68) 0.00 0.00
Net asset value end of period ..................... $ 20.32 $ 17.68 $ 17.54 $ 20.79 $ 19.63 $ 15.36
Total return** .................................... 14.93% 12.07% (4.86%) 9.96% 27.80% 38.13%
Ratios/Supplemental Data
Net assets, end of period (in 000's) .............. $ 2,644 $ 2,072 $ 2,257 $ 2,777$ 715$ 526
Ratio of expenses to average net assets ........... 1.80%+ 1.80% 2.14% 2.43% 2.25% 2.44%
Ratio of expenses to average net
assets, before reimbursement ...................... 3.58%+ 5.36% 3.21% 6.71% 11.73% 11.44%
Ratio of net investment income (loss)
to average net assets ............................. (0.44%)+ .30% .23% (0.06%) (2.07%) (2.21%)
Portfolio turnover rate ........................... 362.70% 276.17% 135.49% 139.57% 41.22% 23.75%
<FN>
+ Annualized
* Based on average shares outstanding.
** Excluding sales charge.
++ 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.
See notes to financial statements
</FN>
</TABLE>
-13-
<PAGE>
Monterey Mutual Funds Distributed by:
Syndicated Capital, Inc.
1299 Ocean Avenue, Suite 210
Santa Monica, CA 90401
<PAGE>
MONTEREY
FUNDS
- PIA Short-Term Government Securities
- PIA Total Return Bond
- PIA Global Bond
[LOGO]
SEMI-ANNUAL REPORT
(UNAUDITED)
MAY 31, 2000
<PAGE>
<TABLE>
<CAPTION>
MONTEREY FUNDS
Schedules of Investments - May 31, 2000
(Unaudited)
PIA SHORT-TERM GOVERNMENT SECURITIES FUND
--------------------------------------------------------------------------------
Principal
Value Value(degree)
--------------------------------------------------------------------------------
<C> <S> <C>
DEBT SECURITIES 97.08%
MORTGAGE BACKED 25.04%
$1,251,077 Bear Stearns Mortgage Sec. Inc., 7.00%,
due 11/25/10 ................................. $ 1,187,265
477,426 Centex Home Equity, 7.55%, due 04/25/10 .......... 475,027
1,000,000 CIT Group Inc., 7.375%, due on 4/25/10 ........... 984,217
520,000 Contimortgage Home Equity Loan Tr.,
6.28%, due 12/25/19 .......................... 501,225
710,000 Countrywide 2000-2 AF-1, 8.18%, due 06/26/20 ..... 709,985
754,643 Countrywide Home Loans, Inc., 8.00%,
due 08/25/27 ................................. 746,723
960,111 Fairbanks Capital Inc., 5.81%, due 05/25/28 ...... 966,112
355,432 Green Tree Recreational Corp., 6.55%,
due 07/15/28 ................................. 348,058
682,084 GS MTG SEC 2000-1 A, 6.533%, due 03/20/23 ........ 682,084
489,727 LB Commercial Conduit Mortgage Tr.,
7.20%, due 08/25/04 .......................... 486,188
184,667 Norwest Asset Sec. Corp., 7.00%, due 04/25/12 .... 183,699
22,261 Prudential Home Ser 1993-59, 7.125%,
due 12/25/00 ................................. 22,157
1,000,000 Prudential Home Ser 1993-9, 7.50%, due 03/25/08 .. 998,968
833,291 RASC 2000 - KS1 AI1 OF 900,000, 7.615%,
due 01/25/15 ................................. 831,598
703,460 Residential Accredited Loans, 6.875%,
due 11/25/27 ................................. 698,525
864,264 Resolution Trust Corp., 8.00%, due 06/25/26 ...... 860,846
500,000 Salomon Brothers 1997-LB6, 6.91%, due 12/25/27 ... 492,402
242,087 Security National Mortgage Loan Tr., 7.171%,
due 02/25/06 ................................. 235,102
-----------
11,410,181
-----------
GOVERNMENT AGENCIES 41.65%
303,037 FHLMC L80215, 6.50%, due 08/01/03 ................ 289,955
226,102 FHLMC L80218, 6.50%, due 09/01/03 ................ 216,341
421,062 FHLMC M80409, 6.00%, due 01/01/03 ................ 396,771
443,758 FHLMC M80478, 7.00%, due 06/01/04 ................ 432,155
100,200 FHLMC N96340, 6.00%, due 04/01/03 ................ 94,420
160,305 FHLMC N96342, 6.00%, due 04/01/03 ................ 151,057
151,454 FHLMC N96369, 6.00%, due 04/01/03 ................ 142,717
313,134 FHLMC N96446, 6.50%, due 04/01/03 ................ 299,617
124,538 FHLMC N96415, 6.50%, due 05/01/03 ................ 119,162
122,265 FHLMC N96779, 6.50%, due 08/01/03 ................ 116,987
793,800 FHLMC 1232F, 7.50%, due 09/15/06 ................. 796,281
119,289 FHLMC 609231, 5.61%, due 02/01/24 ................ 121,802
302,988 FHLMC ARM 755204, 8.60%, due 08/01/15 ............ 310,419
0 See Note 2 in Notes to Financial Statements.
See notes to financial statements
-1-
<PAGE>
MONTEREY FUNDS
Schedules of Investments - May 31, 2000
(Unaudited)
PIA SHORT-TERM GOVERNMENT SECURITIES FUND
--------------------------------------------------------------------------------
Principal
Value Value(degree)
--------------------------------------------------------------------------------
GOVERNMENT AGENCIES 41.65% (continued)
$ 479,403 FHLMC ARM POOL 635206, 6.89%, due 10/01/22 ....... $ 485,827
1,601,634 FNMA ARM 323802, 6.92%, due 04/01/27 ............. 1,589,867
415,007 FNMA CMO 415842, 11.00%, due 01/01/13 ............ 444,022
1,000,000 FNMA FNR 1992-22 HA, 7.00%, due 11/25/05 ......... 996,985
1,000,000 FNMA 1992-180 FG, 6.76%, due 01/25/22 ............ 1,022,103
1,455,691 GNMA ARM 80013, 7.00%, due 11/20/26 .............. 1,465,792
1,072,381 GNMA ARM 80021, 6.13%, due 12/20/26 .............. 1,066,339
375,478 GNMA ARM 80029, 6.38%, due 01/20/27 .............. 373,754
712,631 GNMA ARM 80122, 6.13%, due 10/20/27 .............. 707,925
777,784 GNMA ARM 80143, 6.00%, due 12/20/27 .............. 783,211
3,607,570 GNMA ARM 80154, 6.38%, due 01/20/28 .............. 3,599,345
1,955,193 GNMA ARM 8062, 6.13%, due 10/20/22 ............... 1,954,511
284,994 GNMA ARM 8871, 6.13%, due 11/20/21 ............... 285,003
710,000 GSMS 2000-GSFL A, 6.17%, due 08/15/12 ............ 710,000
-----------
18,972,368
-----------
--------------------------------------------------------------------------------
Shares/Principal
Value Value(degree)
--------------------------------------------------------------------------------
U.S. TREASURY NOTES 30.39%
4,200,000 U.S. Treasury Note, 6.25%, due 04/30/2001 ........ 4,184,250
2,200,000 U.S. Treasury Note, 6.625%, due 06/30/01 ......... 2,197,939
1,000,000 U.S. Treasury Note, 6.625%, due 06/30/01 ......... 998,125
6,500,000 U.S. Treasury Note, 6.375%, due 09/30/01 ......... 6,467,500
-----------
13,847,814
-----------
TOTAL DEBT SECURITIES
(cost $44,779,590) ............................... 44,230,363
-----------
SHORT TERM INVESTMENTS 3.68%
1,677,334 Firstar Treasury Fund
(cost $1,677,334) ................................ 1,677,334
-----------
TOTAL INVESTMENTS
(cost $46,456,924) ...................... 100.76% 45,907,697
LIABILITIES LESS OTHER ASSETS ....................... (0.76%) (346,843)
------- -----------
TOTAL NET ASSETS .................................... 100.00% $45,560,854
======= ===========
0 See Note 2 in Notes to Financial Statements.
FHLMC -- Federal Home Loan Mortgage Company.
FHLMC ARM -- Federal Home Loan Mortgage Company Adjustable Rate Mortgage.
FNMA -- Federal National Mortgage Association.
FNMA ARM -- Federal National Mortgage Association Adjustable Rate Mortgage.
GNMA -- Government National Mortgage Association.
See notes to financial statements
-2-
<PAGE>
MONTEREY FUNDS
Schedules of Investments - May 31, 2000
(Unaudited)
PIA TOTAL RETURN BOND FUND
--------------------------------------------------------------------------------
Shares Value(degree)
--------------------------------------------------------------------------------
PREFERRED STOCK 1.52%
15,300 New Plan Excel Realty Trust Inc. Pfd B ........... $ 292,613
7,500 Thornburg Mortgage Asset Corp. Series A .......... 147,656
-----------
TOTAL PREFERRED STOCK
(cost $525,507) .............................. 440,269
-----------
Principal
Value Value(degree)
--------------------------------------------------------------------------------
LONG TERM INVESTMENTS 95.66%
MORTGAGE BACKED SECURITIES 14.46%
$ 307,544 BA Mortgage Securities Inc., due 10/25/27 ........ 292,350
257,402 Blackrock Capital Finance L.P. 1997 R1,
due 03/25/37 ................................. 257,081
177,961 CAPCO 1998-D7-A-1A, due 09/16/30 ................. 165,448
175,000 Carousel Center Finance Inc. A1, due 11/15/07 .... 171,538
280,000 Chase Mortgage Finance Corp., due 06/25/25 ....... 259,612
480,000 Countrywide 00-1 A2, due 02/25/30 ................ 445,701
250,000 Countrywide 00-R183, due 12/28/27 ................ 190,547
378,076 DLJ Mortgage Acceptance Corp., 1994-MF11 A1,
due 06/18/04 ................................. 382,970
2,200 FBC Mortgage Securities B2, due 08/20/09 ......... 2,197
61,833 FDIC Remic Trust 1996-C1 1A, due 05/25/26 ........ 60,351
216,227 Lehman Structured Securities Corp., 7.995%,
due 06/25/26 ................................. 217,910
15,585 Prudential Home Mortgage 1993-59 A5,
due 12/25/00 ................................. 15,512
120,469 SASCO 1995-C4 D, due 06/25/26 .................... 117,872
479,051 SASCO 1998-C3A E, due 06/25/01 ................... 477,437
130,608 Security National Mortgage Loan Trust,
due 02/25/06 ................................. 126,839
800,000 Structured Asset Securities Corp., 1996-CFL C,
due 02/25/28 ................................. 795,280
221,865 Structured Settlements 99-A A, due 10/20/15 ...... 215,140
-----------
4,193,785
-----------
ASSET BACKED SECURITIES 5.38%
365,000 California Infrastructure PG&E, 1997-A7,
due 09/25/08 ................................. 348,296
200,000 Cigna CBO 1996-1 A2, due 11/15/08 ................ 201,438
500,000 Rhyno CBO Delaware Corp., 1997-1 A2,
due 09/15/09 ................................. 488,594
370,000 Team Fleet Financial 1998--3 A, due 10/25/04 ..... 350,927
170,370 UCFC Home Equity Loan 1995-A1, A5,
due 01/10/20 ................................. 170,899
-----------
1,560,154
-----------
CORPORATE BONDS 34.42%
AEROSPACE/DEFENSE 1.63%
346,357 Airplanes Passthrough Trust, 8.15%, due 03/15/19 . 313,309
175,000 Lockheed Martin Marietta, 7.00%, due 03/15/11 .... 158,862
-----------
472,171
-----------
AIRLINES 0.08%
25,000 Southwest Air, 7.375%, due 03/01/27 .............. 22,753
-----------
0 See Note 2 in Notes to Financial Statements.
See notes to financial statements
-3-
<PAGE>
MONTEREY FUNDS
Schedules of Investments - May 31, 2000
(Unaudited)
PIA TOTAL RETURN BOND FUND (continued)
--------------------------------------------------------------------------------
Principal
Value Value(degree)
--------------------------------------------------------------------------------
AUTOMOTIVE 1.44%
$ 210,000 Ford Motor Credit, 9.14%, due 12/30/14 ........... $ 217,168
210,000 General Motors Acceptance Corp., 5.875%,
due 01/22/03 ................................. 200,628
-----------
417,796
-----------
BANKING & Financial Services 9.54%
135,000 Banc One Corp., 7.625%, due 10/15/26 ............. 123,570
175,000 BankBoston, 6.375%, due 03/25/08 ................. 158,155
340,000 Bankers Trust, 8.125%, due 04/01/02 .............. 341,593
185,000 Bear Stearns Co., 7.00%, due 03/01/07 ............ 169,979
335,000 Countrywide Home Loan, 7.26%, due 05/10/04 ....... 322,920
160,000 Fairfax Financial Holdings 144A, 7.375%,
due 03/15/06 ................................. 135,326
160,000 First Bank System, 7.625%, due 05/01/05 .......... 157,716
270,000 Freemont General Corp. 144A, 7.875%,
due 03/17/09 ................................. 114,750
255,000 General Electric Capital, 8.875%, due 05/15/09 ... 275,450
225,000 Lehman Brothers Holdings, 6.50%, due 10/01/02 .... 218,027
280,000 Merit Securities Corp., 7.88%, due 12/28/33 ...... 275,625
170,000 Morgan Stanley Group, 6.875%, due 03/01/07 ....... 159,364
315,000 PNC Bank Corp., 7.875%, due 04/15/05 ............. 314,986
-----------
2,767,461
-----------
CHEMICALS 0.66%
205,000 Eastman Chemical Co., 6.375%, due 01/15/04 ....... 192,457
-----------
COMPUTERS/SOFTWARE 0.55%
175,000 Computer Associates International, 6.375%,
due 04/15/05 ................................. 160,327
-----------
CRUISELINES 1.04%
180,000 Carnival Corp., 6.15%, due 04/15/08 .............. 158,548
165,000 Royal Caribbean Cruises, 7.00%, due 10/15/07 ..... 142,585
-----------
301,133
-----------
DIVERSIFIED MINERALS 0.63%
200,000 American Re Corp., 7.45%, due 10/15/26 ........... 182,989
-----------
ELECTRONIC COMPONENTS/SEMICONDUCTORS 1.15%
180,000 Applied Materials, 6.75%, due 10/15/07 ........... 167,779
180,000 Thomas & Betts Corp., 6.625%, due 05/07/08 ....... 166,201
-----------
333,980
-----------
HOTELS 1.25%
220,000 Marriott International 144A, 6.875%,
due 11/15/05 ................................. 205,208
175,000 Mirage Resorts Inc., 7.25%, due 10/15/06 ......... 157,786
-----------
362,994
-----------
INSURANCE 2.57%
205,000 Aetna Services Inc., 7.125%, due 08/15/06 ........ 191,067
170,000 CNA Financial Corp., 6.50%, due 04/15/05 ......... 151,590
0 See Note 2 in Notes to Financial Statements.
See notes to financial statements
-4-
<PAGE>
MONTEREY FUNDS
Schedules of Investments - May 31, 2000
(Unaudited)
PIA TOTAL RETURN BOND FUND (continued)
--------------------------------------------------------------------------------
Principal
Value Value(degree)
--------------------------------------------------------------------------------
INSURANCE 2.57% (continued)
$ 215,000 Conseco Inc., 6.40%, due 06/15/01 ................ $ 162,325
110,000 First Security Corp., 6.875%, due 11/15/06 ....... 103,077
140,000 ITT Hartford Group, 6.375%, due 11/01/02 ......... 135,314
-----------
743,373
-----------
MULTIMEDIA 0.62%
190,000 Time Warner Entertainment, 7.25%, due 09/01/08 ... 179,556
-----------
PIPELINE 0.62%
175,000 Questar Pipeline Corp., 9.375%, due 06/01/21 ..... 179,167
-----------
REAL ESTATE & Mortgage Related 4.03%
270,000 Health Care Properties Inc., 6.50%, due 02/15/06 . 231,109
191,000 Kimco Realty Corp., 6.50%, due 10/01/03 .......... 180,506
150,000 Nationwide Health Properties Inc., 8.67%,
due 03/10/05 ................................. 140,667
205,000 Security Cap. Industrial, 7.625%, due 07/01/17 ... 182,843
160,000 Southern Investments UK, 6.80%, due 12/01/06 ..... 145,797
310,000 United Dominion Realty Trust Inc., 7.95%,
due 07/12/06 ................................. 288,191
-----------
1,169,113
-----------
RETAIL 1.65%
350,000 Ikon Office Solutions Inc., 6.75%, due 11/01/04 .. 318,887
190,000 J.C. Penney & Co., 7.60%, due 04/01/07 ............ 159,581
-----------
478,468
-----------
TELECOMMUNICATIONS 2.51%
175,000 Airtouch Communications, 6.65%, due 05/01/08 ..... 159,146
240,000 AT&T Corp., 6.00%, due 03/15/09 .................. 209,591
205,000 Frontier Corp., 7.25%, due 05/15/04 .............. 194,142
165,000 Worldcom Inc., 7.55%, due 04/01/04 ............... 164,110
-----------
726,989
-----------
TRANSPORTATION 2.04%
170,000 AMR Corp., 10.05%, due 03/07/06 .................. 179,943
165,000 Canadian National Railway, 7.00%, due 03/15/04 ... 160,342
278,047 Federal Express Etc., 6.845%, due 01/15/19 ....... 251,776
-----------
592,061
-----------
UTILITIES 2.41%
300,000 AES Ironwood LLC, 8.857%, due 11/30/25 ........... 286,432
180,000 Southern California Edison, 6.65%, due 04/01/29 .. 147,574
260,000 Virginia Electric & Power, 8.75%, due 04/01/21 ... 264,522
-----------
698,528
-----------
0 See Note 2 in Notes to Financial Statements.
See notes to financial statements
-5-
<PAGE>
MONTEREY FUNDS
Schedules of Investments - May 31, 2000
(Unaudited)
PIA TOTAL RETURN BOND FUND (continued)
--------------------------------------------------------------------------------
Principal
Value Value(degree)
--------------------------------------------------------------------------------
U.S. Government Securities 41.40%
Government Agencies 28.41%
$ 120,000 Fannie Mae X-130A H, 6.30%, due 09/25/18 ......... $ 118,472
340,000 Fannie Mae, 7.125%, due 01/15/30 ................. 331,415
290,000 Fannie Mae, 7.25%, due 05/15/30 .................. 287,535
322,000 FHG 42 I, 8.00%, due 10/17/24 .................... 322,224
250,000 FHLMC 1312 I, 8.00%, due 07/15/22 ................ 247,480
100,000 FHLMC 1704 E, 6.50%, due 03/15/09 ................ 93,409
821,904 FNMA #533167, 7.50%, due 04/01/30 ................ 798,855
4,450 FNMA 1992-12 SA, 9.334%, due 01/25/22 ............ 4,341
849,494 FNMA 429618, 6.50%, due 07/01/28 ................. 786,151
89,330 FNMA 443589, 6.50%, due 10/01/28 ................. 82,669
70,233 FNMA 5313317, 7.50%, due 04/01/30 ................ 68,264
604,864 FNMA Pool 313947, 7.00%, due 01/01/28 ............ 574,216
1,468,850 FNMA Pool 495378, 6.00%, due 04/01/29 ............ 1,318,717
1,370,082 FNMA Pool 502454, 6.50%, due 07/01/29 ............ 1,267,922
411 GNMA 175288, 8.75%, due 09/15/01 ................. 413
406 GNMA 198340, 8.75%, due 02/15/02 ................. 409
540,000 GNMA 1996-4 N, 7.00%, due 04/16/26 ............... 507,131
568,763 GNMA 501569, 7.50%, due 03/15/29 ................. 558,950
905,065 GNMA 5036003, 7.00%, due 04/15/29 ................ 868,823
-----------
8,237,396
-----------
U.S. TREASURY NOTES 12.99%
470,000 U.S. Treasury Note, 5.25%, due 08/15/03 .......... 451,347
500,000 U.S. Treasury Note, 6.50%, due 10/15/06 .......... 1,491,095
370,000 U.S. Treasury Note, 6.00% due 08/15/09 ........... 360,403
530,000 U.S. Treasury Note, 6.125%, due 11/15/27 ......... 519,400
300,000 U.S. Treasury Note, 5.25%, due 11/15/28 .......... 261,094
590,000 U.S. Treasury Note, 5.50%, due 08/15/28 .......... 531,369
175,000 U.S. Treasury Note, 5.25%, due 02/15/29 .......... 152,906
-----------
3,767,614
-----------
TOTAL LONG TERM INVESTMENTS
(cost $29,470,646) ............................... 27,740,265
-----------
SHORT TERM INVESTMENTS 1.87%
543,059 Star Treasury Fund
(cost $543,059) .............................. 543,059
-----------
TOTAL INVESTMENTS
(cost $30,539,212) ........... 99.06% 28,723,593
Other assets less liabilities ................ 0.94% 271,442
------- -----------
TOTAL NET ASSETS ............................. 100.00% $28,995,035
======= ===========
0 See Note 2 in Notes to Financial Statements.
See notes to financial statements
-6-
<PAGE>
MONTEREY FUNDS
Schedules of Investments - May 31, 2000
(Unaudited)
PIA GLOBAL BOND FUND (continued)
--------------------------------------------------------------------------------
Shares/Principal
Value Value(degree)
--------------------------------------------------------------------------------
LONG TERM INVESTMENTS 90.86%
FOREIGN GOVERNMENT OBLIGATIONS 7.83%
ENGLAND7.83%
$ 60,000 Credit Suisse FB, 8.50%, due 11/18/04 ............ $ 56,395
-----------
MORTGAGE-BACKED SECURITIES 28.78%
7,483 FRN 97-27A, 7.00%, due 09/18/21 ................. 7,466
100,000 HRFT Properties Trust, 6.56%, due 7/10/00 ........ 100,011
100,000 Prudential Home Mortgage Securities,
7.50%, 03/25/08 .............................. 99,897
-----------
207,374
-----------
U.S. TREASURY NOTES 54.25%
110,000 U.S. Treasury Notes, 7.25%, due 08/15/04 ......... 112,406
110,000 U.S. Treasury Notes, 6.50%, due 10/15/06 ......... 109,347
160,000 U.S. Treasury Notes, 5.25%, due 11/15/28 ......... 139,250
30,000 U.S. Treasury Notes, 6.125%, due 08/15/29 ........ 29,887
-----------
390,890
-----------
TOTAL LONG TERM INVESTMENTS
(cost $664,446) .................................. 654,659
-----------
SHORT TERM INVESTMENTS 9.33%
MUTUAL FUNDS 5.30%
38,206 Firstar Treasury Fund (cost $38,206) ............. 38,206
-----------
REPURCHASE AGREEMENTS 4.03%
29,000 Firstar Bank Repurchase Agreement 3.75%,
due June 1, 2000 collateralized by:
FHA/VA Pool, 6.50%, due 08/15/11 ($29,586)
(cost $29,000) ............................... 29,000
-----------
TOTAL SHORT TERM INVESTMENTS
(cost $67,206) ................................... 67,206
-----------
TOTAL INVESTMENTS
(cost $731,652) .................... 100.19% 721,865
Liabilities less other assets .................. (0.19%) (1,357)
------- -----------
TOTAL NET ASSETS ............................... 100.00% $ 720,508
======= ===========
See notes to financial statements
-7-
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MONTEREY FUNDS
Statements of Assets and Liabilities - May 31, 2000
(Unaudited)
PIA PIA
SHORT TERM TOTAL PIA
GOVERNMENT RETURN GLOBAL
SECURITIES BOND BOND
----------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments in securities, at value
(cost $46,456,924, $30,539,212 and
$731,652,respectively) ............................. $ 45,907,697 $ 28,723,593 $ 721,865
Cash ....................................................... 0 94,294 1,207
Receivable for securities sold ............................. 64,097 8,829 0
Receivable for fund shares sold ............................ 38,072 0 0
Income receivable .......................................... 370,828 237,080 11,329
Due from investment adviser (Note 3) ....................... 0 0 7,884
Prepaid expenses and other ................................. 3,158 4,398 6,180
------------ ------------ ------------
Total assets ....................................... 46,383,852 29,068,194 748,465
------------ ------------ ------------
LIABILITIES
Payable to custodian ....................................... 16,167 0 0
Payable for securities purchased ........................... 714,664 0 0
Dividends payable .......................................... 62,475 54,982 11,633
Due to investment adviser (Note 3) ......................... 456 6,407 0
Accrued expenses and other ................................. 29,236 11,770 16,324
------------ ------------ ------------
Total liabilities .................................. 822,998 73,159 27,957
------------ ------------ ------------
Total net assets ................................... $ 45,560,854 $ 28,995,035 $ 720,508
------------ ------------ ------------
NET ASSETS
Shares of beneficial interest, no par value;
unlimited shares authorized ........................ $ 46,419,758 $ 31,353,963 $ 1,276,758
Undistributed net investment income ........................ 34,011 10,088 4,650
Accumulated net realized (loss)on
investments and foreign currencies ................. (343,688) (553,398) (542,119)
Net unrealized (depreciation)
on investments and foreign currencies .............. (549,227) (1,815,618) (18,781)
------------ ------------ ------------
Net assets ......................................... $ 45,560,854 $ 28,995,035 $ 720,508
============ ============ ============
CALCULATION OF OFFERING PRICE
Net asset value, offering and redemption price per share ... $ 9.99 $ 18.44 $ 18.70
============ ============ ============
Shares Outstanding ......................................... 4,558,621 1,572,706 38,533
============ ============ ============
</TABLE>
See notes to financial satements
-8-
<PAGE>
<TABLE>
<CAPTION>
MONTEREY FUNDS
Statements of Assets and Liabilities - May 31, 2000
(Unaudited)
PIA PIA
SHORT TERM TOTAL PIA
GOVERNMENT RETURN GLOBAL
SECURITIES BOND BOND
---------------------------------------------------
INVESTMENT INCOME
<S> <C> <C> <C>
Interest ................................................... $ 1,517,853 $ 999,208 $ 136,896
Dividend ................................................... 0 13,351 0
----------- ----------- -----------
Total investment income ............................ 1,517,853 1,012,559 136,896
----------- ----------- -----------
EXPENSES
Adviser fees (Note 3) ...................................... 46,644 43,217 9,574
Distribution fees (Note 4) ................................. 11,661 0 0
Transfer agent fees ........................................ 4,252 4,392 7,804
Administrative fees (Note 3) ............................... 21,151 17,905 8,927
Custodian fees ............................................. 13,125 11,628 4,244
Audit fees ................................................. 4,011 4,011 3,989
Legal fees ................................................. 3,083 2,827 2,439
Registration fees .......................................... 4,485 2,165 0
Trustees' fees ............................................. 634 760 652
Printing expense ........................................... 1,381 640 399
Amortization of deferred organization expenses ............. 0 0 120
Postage expense ............................................ 271 233 412
Other expenses ............................................. 3,202 1,843 86
----------- ----------- -----------
Total expenses ..................................... 113,900 89,621 38,646
Less: Expense reimbursement from adviser (Note 3) .......... (44,053) (31,706) (29,052)
----------- ----------- -----------
Net expenses ....................................... 69,847 57,915 9,594
----------- ----------- -----------
Net investment income (loss) ....................... 1,448,006 954,644 127,302
----------- ----------- -----------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss) on investments
and foreign currencies ............................. (160,270) (27,393) (476,188)
Net change in unrealized appreciation (depreciation) on
investments and foreign currencies ................. (191,355) (693,900) 309,445
----------- ----------- -----------
Net income (loss) on investments ........................... (351,625) (721,293) (166,743)
----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations .......................... $ 1,096,381 $ 233,351 $ (39,441)
=========== =========== ===========
</TABLE>
See notes to financial statements
-9-
<PAGE>
<TABLE>
<CAPTION>
MONTEREY FUNDS
Statements of Changes in Net Assets
PIA
SHORT TERM PIA
GOVERNMENT TOTAL PIA
SECURITIES RETURN BOND GLOBAL BOND
--------------------------------------------------------------------------------
For the six For the six For the six
months ended Year ended months ended Year ended months ended Year ended
May 31, Nov. 30, May 31, Nov. 30, May 31, Nov. 30,
2000 1999 2000 1999 2000 1999
(Unaudited) (Unaudited) (Unaudited)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net investment income (loss) ........... $ 1,448,006 $ 2,776,642 $ 954,644 $ 1,712,044 $ 127,302 $ 290,555
Net realized gain (loss) on
investments and foreign
currencies ..................... (160,270) (157,319) (27,393) (526,006) (476,188) (58,284)
Net change in unrealized appreciation
(depreciation) on investments and
foreign currencies ..................... (191,355) (1,118,845) (693,900) (1,341,055) 309,445 (538,923)
----------- ------------ ----------- ----------- ----------- ----------
Net increase (decrease) in net assets
resulting from operations ...... 1,096,381 1,500,478 233,351 (155,017) (39,441) (306,652)
----------- ------------ ----------- ----------- ----------- ----------
DIVIDENDS PAID TO SHAREHOLDERS
Dividends from net investment income ... (1,420,576) (2,770,061) (951,796) (1,705,557) (122,652) (296,220)
Distributions from net realized gains .. 0 (305,161) 0 (49,227) 0 (33,883)
----------- ------------ ----------- ----------- ----------- ----------
(1,420,576) (3,075,222) (951,796) (1,754,784) (122,652) (330,103)
----------- ------------ ----------- ----------- ----------- ----------
FUND SHARE TRANSACTIONS
Net proceeds from shares sold .......... 7,239,980 10,442,572 2,423,425 9,966,142 0 714,990
Dividends reinvested ................... 1,154,801 2,739,662 651,594 1,193,499 101,735 317,390
Payment for shares redeemed ............ (9,964,986) (21,141,334) (3,013,570) (4,541,644) (4,930,075) (742,405)
----------- ------------ ----------- ----------- ----------- ----------
Net increase (decrease) in net assets
from fund share transactions ... (1,570,205) (7,959,100) 61,449 6,617,997 (4,828,340) 289,975
----------- ------------ ----------- ----------- ----------- ----------
Net increase (decrease) in net assets .. (1,894,400) (9,533,844) (656,996) 4,708,196 (4,990,433) (346,780)
NET ASSETS, BEGINNING OF PERIOD ........ 47,455,254 56,989,098 29,652,031 24,943,835 5,710,941 6,057,721
----------- ------------ ----------- ----------- ----------- ----------
NET ASSETS, END OF PERIOD .............. $45,560,854 $ 47,455,254 $28,995,035 $29,652,031 $ 720,508 $5,710,941
=========== ============ =========== =========== =========== ==========
Undistributed net investment
income (loss) at end of period.. $ 34,011 $ 6,581 $ 10,088 $ 7,241 $ 4,650 $ 0
=========== ============ =========== =========== =========== ==========
CHANGES IN SHARES OUTSTANDING
Shares sold ............................ 720,704 1,024,239 129,981 509,738 0 34,047
Shares issued on reinvestment
of dividends ................... 115,227 269,057 34,948 61,491 5,390 15,668
Shares redeemed ........................ (991,615) (2,069,018) (159,666) (234,458) (263,646) (37,144)
----------- ------------ ------------ ----------- ----------- ----------
Net increase (decrease) in
Shares outstanding ............. (155,684) (775,722) 5,263 336,771 (258,256) 12,571
=========== ============ ============ =========== =========== =========
</TABLE>
See notes to financial statements
-10-
<PAGE>
MONTEREY FUNDS
Notes to Financial Statements - May 31, 2000
(Unaudited)
NOTE 1. ORGANIZATION
Monterey Mutual Fund (the "Trust"), formerly Monitrend Mutual Fund, is
registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company. The Trust was organized as
a Massachusetts business trust on January 6, 1984 and consists of nine series of
shares: the PIA Short Term Government Securities Fund, the PIA Income Fund,
(formerly Camborne Government Income), the OCM Gold Fund, the PIA Equity Fund,
the Murphy New World Biotechnology Fund, the Murphy New World Technology Fund,
the Murphy New World Technology Convertibles Fund, the PIA Global Bond Fund and
the PIA Total Return Bond Fund (collectively the "Funds"), each of which has
separate assets and liabilities and differing investment objectives. The
investment objective for each of the Funds presented herein are: the PIA Short
Term Government Securities Fund, (the "Short-Term Government Fund"), 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; the PIA Global Bond Fund, (the "Global Bond Fund"), to
provide a high level of current income through investing in bonds denominated in
U.S. dollars and other currencies; and the PIA Total Return Bond Fund, (the
"Total Return Bond Fund"), to maximize total return through investing in bonds
while minimizing risk as compared to the market.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Fund 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 Trust'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 Global Bond Fund and the Total Return Bond Fund 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
Fund 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 Fund 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 Fund as
unrealized gains or losses. When the futures contract expires or is closed by
the Fund 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 Trust'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
Trust's hedging strategy unsuccessful and could result in a loss to the Trust.
-11-
<PAGE>
MONTEREY FUNDS
Notes to Financial Statements - May 31, 2000
(Unaudited)
Futures contracts are purchased only on exchanges. The exchange acts as the
counterparty to the Trust's futures transactions; therefore the Trust's credit
risk is limited to failure of the exchange.
FEDERAL INCOME TAXES - It is each Trust'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 Fund
paid no Federal Income taxes and no Federal income tax provision was required.
At May 31, 2000, the Short-Term Government Securities Fund and the Total Return
Bond Fund have capital loss carryovers of approximately $157,000 and $498,000,
respectively.
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 Short-Term Government Fund, the Total Return Bond Fund and the Global
Bond Fund each has an investment advisory agreement with PIA. Each Fund pays PIA
a fee, computed daily and payable monthly, at the annual rate of 0.20%, 0.30%
and 0.40%, respectively, of their net assets.
For the six months ended May 31, 2000 the advisers agreed to reimburse the
Funds for expenses (except distribution fees) in excess of 0.30% of average net
assets of the Short-Term Government Fund, 0.40% of average net assets of Total
Return Bond Fund, and 0.51% of average net assets for the Global Bond Fund.
The Fund 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 0.1% 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 Funds' 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 Trust.
The Trust has adopted a Distribution Plan (the "Plan") pursuant to Rule
12b-1 under the Investment Company Act of 1940. The Plan authorizes the PIA
Short-Term Government Securities Fund to reimburse the Distributor for marketing
expenses incurred in distributing shares of each Fund, including the cost of
printing sales material and making payments to dealers in each Fund shares, in
any fiscal year, subject to a limit of 0.05% for the Short-Term Government Fund.
NOTE 5. PURCHASES AND SALES OF SECURITIES
The cost of purchases and sales of investment securities (other than
short-term investments) for the six months ended May 31, 2000, were as follows:
PURCHASES SALES
--------- -----
Short-Term Government Fund ...... $28,438,129 $30,009,897
Total Return Bond Fund .......... 5,052,571 5,148,315
Global Bond Fund ................ 3,727,314 8,459,602
Unrealized appreciation and depreciation on investments at May 31, 2000 based on
cost for Federal income taxes, are as follows:
UNREALIZED UNREALIZED
APPRECIATION DEPRECIATION NET
------------ ------------ ---
Short-Term Government Fund ...... $ 22,383 ($ 571,610) ($ 549,227)
Total Return Bond Fund .......... 48,290 (1,863,909) ( 1,815,619)
Global Bond Fund ................ 1,936 (11,723) (9,787)
-12-
<PAGE>
<TABLE>
<CAPTION>
MONTEREY FUNDS
PIA SHORT-TERM GOVERNMENT SECURITIES
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
FOR THE SIX
MONTHS ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MAY 31, NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30,
2000 1999 1998 1997 1996* 1995*
-----------------------------------------------------------------------------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...... $ 10.07 $ 10.38 $ 10.26 $ 10.21 $ 10.12 $ 9.98
---------- ---------- --------- --------- ---------- ---------
Income from investment operations
Net investment income ..................... 0.31 0.55 0.57 0.61 0.56 0.57
Net realized and unrealized gain (loss)
on investments .................... (0.08) (0.25) 0.13 0.06 0.19 0.14
---------- ---------- --------- --------- ---------- ---------
Total from investment operations .......... 0.23 0.30 0.70 0.67 0.75 0.71
---------- ---------- --------- --------- ---------- ---------
Less distributions
Dividends from net investment income ...... (0.31) (0.55) (0.57) (0.61) (0.56) (0.57)
Distributions from net realized gains ..... 0.00 (0.06) (0.01) (0.01) (0.10) 0.00
---------- ---------- --------- --------- ---------- ---------
Total distributions ....................... (0.31) (0.61) (0.58) (0.62) (0.66) (0.57)
---------- ---------- --------- --------- ---------- ---------
Net asset value, end of period ............ $ 9.99 $ 10.07 $ 10.38 $ 10.26 $ 10.21 $ 10.12
========== ========== ========= ========= ========== =========
Total return** ............................ 2.31% 3.00% 6.99% 6.56% 7.68% 7.50%
Ratios/supplemental data
Net assets, end of period (in 000's) ...... $ 45,561 $ 47,455 $ 56,989 $ 52,912 $ 20,464 $ 3,405
Ratio of expenses to average net assets ... 0.30%+ 0.30% 0.30% 0.30% 0.44% 0.46%
Ratio of expenses to average net assets,
before reimbursement .............. 0.49%+ 0.47% 0.46% 0.55% 1.19% 2.01%
Ratio of net investment income (loss)
to average net assets ............. 6.21%+ 5.40% 5.51% 5.77% 5.51% 5.71%
Portfolio turnover rate ................... 62.67% 110.15% 138.44% 63.08% 21.54% 163.55%
<FN>
----------
+ Annualized
** Not annualized for periods less than a year.
* Based on average shares outstanding
</FN>
</TABLE>
See notes to financial statements
-13-
<PAGE>
<TABLE>
<CAPTION>
MONTEREY FUNDS
PIA TOTAL RETURN BOND
Financial Highlights
(For a share outstanding throughout each period)
FOR THE SIX
MONTHS ENDED YEAR ENDED SEPT. 1, 1998
MAY 31, NOV. 30, (COMMENCEMENT OF OPERATIONS)
2000 1999 THROUGH NOV. 30, 1998
--------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C>
Net asset value, beginning of period ... $ 18.92 $ 20.27 $ 20.00
------------- ------------- -----------
Income from investment operations
Net investment income .................. 0.62 1.16 0.27
Net realized and in unrealized
gain (loss) on investments ..... (0.48) (1.31) 0.26
------------- ------------- -----------
Total from investment operations ....... 0.14 (0.15) 0.53
------------- ------------- -----------
Less distributions
Dividends from net investment income ... (0.62) (1.16) (0.26)
Distributions from net realized gains .. 0.00 (0.04) 0.00
------------- ------------- -----------
Total distributions .................... (0.62) (1.20) (0.26)
------------- ------------- -----------
Net asset value, end of period ......... $ 18.44 $ 18.92 $ 20.27
============= ============= ===========
Total return** ......................... 0.75% (0.74%) 2.65%
Ratios/supplemental data
Net assets, end of period (in 000's) ... $ 28,995 $ 29,652 $ 24,944
Ratio of expenses to average net assets 0.40%+ 0.40% 0.40%+
Ratio of expenses to average net assets,
before reimbursement ........... 0.62%+ 0.63% 0.63%+
Ratio of net investment income
(loss) to average net assets ... 6.63%+ 6.06% 5.49%+
Portfolio turnover rate ................ 17.77% 104.13% 13.22%
<FN>
+ Annualized
** Not annualized for periods less than a year.
</FN>
</TABLE>
See notes to financial statements
-14-
<PAGE>
<TABLE>
<CAPTION>
MONTEREY FUNDS
PIA GLOBAL BOND
Financial Highlights
(For a share outstanding throughout each period)
FOR THE SIX APRIL 1, 1997
MONTHS ENDED YEAR ENDED YEAR ENDED (COMMENCEMENT OF
MAY 31, NOV. 30, NOV. 30, OPERATIONS)
2000 1999 1998 THROUGH NOV. 30, 1997
----------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C>
Net asset value, beginning of period ........ $ 19.24 $ 21.31 $ 20.33 $ 20.00
------- --------- --------- ---------
Income from investment operations
Net investment income ....................... 0.51 0.90 0.99 0.50
Net realized and in unrealized gain (loss) on
investments and foreign currencies .. (0.42) (1.89) 1.03 0.32
------- --------- --------- ---------
Total from investment operations ............ 0.09 (0.99) 2.02 0.82
------- --------- --------- ---------
Less distributions
Dividends from net investment income ........ (0.63) (0.96) (1.04) (0.49)
Distributions from realized gains ........... 0.00 (0.12) 0.00 0.00
------- --------- --------- ---------
Total distributions ......................... (0.63) (1.08) (1.04) (0.49)
------- --------- --------- ---------
Net asset value, end of period .............. $ 18.70 $ 19.24 $ 21.31 $ 20.33
======= ========= ========= =========
Total return** .............................. 0.49% (4.78%) 10.23% 4.15%
Ratios/supplemental data
Net assets, end of period (in 000's) ........ $ 721 $ 5,711 $ 6,058 $ 5,585
Ratio of expenses to average net assets ..... 0.51%+ 0.51% 0.52% 0.51%+
Ratio of expenses to average net
assets, before reimbursement ........ 1.61%+ 1.37% 1.38% 2.05%+
Ratio of net investment income
(loss) to average net assets ........ 5.31%+ 4.68% 4.80% 4.71%+
Portfolio turnover rate ..................... 80.06% 86.40% 176.66% 82.47%
<FN>
----------
+ Annualized
** Not annualized for periods less than a year.
</FN>
</TABLE>
See notes to financial statements
-15-
<PAGE>
Monterey Mutual Funds
Distributed by:
Syndicated Capital, Inc.
1299 Ocean Avenue, Suite 210
Santa Monica, CA 90401
