June 25, 1998
To Shareholders of the following series of the Exeter Fund:
Defensive Series
Blended Asset Series I
Blended Asset Series II
Maximum Horizon Series
Flexible Yield Series I, II, and III
Tax Managed Series
Dear Shareholder:
Enclosed are copies of the Semi-Annual Reports for each of the above Series of
the Exeter Fund in which you owned shares as of April 30, 1998. The reports
include information about the Series' performance as well as portfolio
listings as of that date.
As of February 27, 1998, the name of the Fund was changed from Manning &
Napier Fund, Inc. to Exeter Fund, Inc. At the same time, the Fund's
investment advisor was changed to Exeter Asset Management. Manning & Napier
Advisors, Inc. acts as sub-advisor to Exeter Asset Management, and the various
series of the Fund are managed with the same strategies and by the same team
members as they were prior to the change. These changes were made to more
clearly distinguish the mutual fund portion of the firm's business from other
services we provide.
Please contact our Fund Services department at 1-800-466-3863 or your Client
Consultant if you have any questions about your holdings in the Exeter Fund.
Sincerely,
Amy J. Williams
Fund Services Manager
<PAGE>
<PAGE>
Exeter Fund, Inc.
Blended Asset Series I
Semi-Annual Report
April 30, 1998
<PAGE>
Management Discussion and Analysis (unaudited)
Dear Shareholders:
While all seemed well for the stock market on the surface over the past few
months, a closer look reveals that underneath the still-rising price levels,
earnings growth had slowed and sales growth had virtually ground to a halt.
So, while inflation remains low and the economy continues to grow at a
moderate pace, market valuations for U.S. stocks remain very high, reflecting
all the good news and none of the potential risk in the current environment.
As a result of what is happening with the U.S. economy and stock market, we
have kept a significant portion of the stock in the portfolio invested in
foreign companies at more attractive valuations. This also comes at a time
when other countries around the world are improving their competitive
advantages relative to the U.S., due in part to their cost-cutting efforts and
to currency movements. On the domestic side, we have continued to look for
stocks that are less likely to be hit as hard by a correction and that can
lead in a recovery, basing investments on the fundamentals rather than the
fanfare.
On the bond side, the market gained some ground over the period with slightly
falling interest rates, but held a relatively cautious stance overall. The
yield on the U.S. Treasury bond dropped 20 basis points (0.20%) from where it
was six months ago, with most of the ground gained during the last couple of
months in 1997. The fixed income portion of the portfolio still maintains a
focus on high quality, long-term securities, while the low-inflation
globally-competitive environment continues to provide a positive backdrop for
bonds.
1
<PAGE>
Management Discussion and Analysis (unaudited)
In conclusion, as we continue to witness the exuberance in the stock market,
we maintain our philosophy of patient long-term investing and managing risk
based on our long-term overview. Investment selections are being made
cautiously, focusing on their prospects of weathering a long period of
potentially mediocre market returns, or recovering in the event of a
correction.
As always, it is a privilege to serve you.
Sincerely,
Exeter Asset Management
[graphic]
<pie chart>
Data for pie chart to follow:
<TABLE>
<CAPTION>
<S> <C>
Asset Allocation - As of 4/30/98
Bonds 52%
Stocks 42%
Cash & Equivalents 6%
</TABLE>
2
<PAGE>
Performance Update as of April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Exeter Fund, Inc.
Blended Asset Series I
Total Return
-------------
Through Growth of $10,000 Average
04/30/98 Investment Cumulative Annual
- ----------------- ----------------------- ------------- --------
One Year $ 11,806 18.06% 18.06%
Inception2 $ 15,657 56.57% 10.17%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Lehman Brothers Intermediate Bond Index
Total Return
-------------
Through Growth of $10,000 Average
04/30/98 Investment Cumulative Annual
- ---------------------------------- ------------------ ------------- --------
One Year $ 10,894 8.94% 8.94%
Inception2 $ 12,998 29.98% 5.83%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
30 - 70 Blended Index
Total Return
-------------
Through Growth of $10,000 Average
04/30/98 Investment Cumulative Annual
- --------------------- ------------------ ------------- --------
One Year $ 11,824 18.24% 18.24%
Inception2 $ 16,279 62.79% 11.11%
</TABLE>
The value of a $10,000 investment in the
Exeter Fund, Inc. - Blended
Asset Series I from its inception (9/15/93)
to present (4/30/98) as compared to the
Lehman Brothers Intermediate Bond Index
and a 30-70 Blended Index.1
[graphic]
<line chart>
Data for line chart to follow:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Exeter Lehman Brothers
Blended Asset Series I Intermediate Bond Index 30-70 Blended Index
Date
09/15/93 $10,000 $10,000 $10,000
12/31/93 10,092 10,032 10,081
12/31/94 10,012 9,838 9,986
12/31/95 12,123 11,347 12,151
10/31/96 12,806 11,728 13,040
10/31/97 14,472 12,606 14,965
04/30/98 15,657 12,998 16,279
</TABLE>
1 The Lehman Brothers Intermediate Bond Index is a market value weighted
measure of approximately 4,080 corporate and government securities. The Index
is comprised of investment grade securities with maturities greater than one
year but less than ten years. The 30-70 Blended Index is 30% Standard &
Poor's (S&P) 500 Total Return Index and 70% Lehman Brothers Intermediate Bond
Index. The S&P 500 Total Return Index is an unmanaged capitalization-weighted
measure of 500 widely held common stocks listed on the New York Stock
Exchange, American Stocks Exchange, and Over-the-Counter market. Both
Indices' returns assume reinvestment of income and, unlike Fund returns, do
not reflect any fees or expenses.
2 Performance numbers for the Fund and Indices are calculated from September
15, 1993, the Fund's inception date. The Fund's performance is historical and
may not be indicative of future results.
3
<PAGE>
Investment Portfolio - April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
VALUE
SHARES (NOTE 2)
COMMON STOCK - 41.52%
AGRICULTURAL PRODUCTION - 0.03%
Sylvan, Inc.* 675 $ 10,209
-----------
AMUSEMENT & RECREATION SERVICES - 0.59%
Resorts World Bhd. - ADR (Note 7) 17,900 172,298
-----------
APPAREL - 0.06%
Novel Denim Holdings, Ltd* 750 18,938
-----------
BUSINESS SERVICES - 1.06%
National Data Corp. 7,600 310,175
-----------
CHEMICAL & ALLIED PRODUCTS - 4.76%
Cypress Bioscience, Inc.* 1,900 6,531
Mallinckrodt, Inc. 17,850 575,663
Orion-Yhtyma OY - B Shares (Finland) (Note 7) 630 19,570
Pharmacia & Upjohn, Inc. 18,620 783,204
PT Tri Polyta Indonesia - ADR (Note 7) 1,775 3,994
-----------
1,388,962
-----------
COMPUTER EQUIPMENT - 1.96%
Bell & Howell Co.* 950 26,244
International Game Technology 19,700 547,906
-----------
574,150
-----------
COMPUTER INTEGRATED SYSTEMS DESIGN - 0.08%
Apache Medical Systems, Inc.* 700 2,187
DAOU Systems, Inc.* 1,100 19,800
-----------
21,987
-----------
CRUDE PETROLEUM & NATURAL GAS - 3.59%
Petroleo Brasileiro SA (Petrobras) -
ADR (Note 7) 22,600 571,904
Union Texas Petroleum Holdings, Inc. 23,600 476,425
-----------
1,048,329
-----------
DIAMONDS - 0.99%
De Beers Centenary AG - ADR (Note 7) 11,235 289,301
-----------
DISTRIBUTION- WHOLESALE - 0.06%
Philip Services Corp.* 2,200 16,638
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
Investment Portfolio - April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
VALUE
SHARES (NOTE 2)
ELECTRONICS & ELECTRICAL EQUIPMENT - 2.43%
Firearms Training Systems, Inc.* 1,525 $ 13,344
Harman International Industries, Inc. 350 15,050
Motorola, Inc. 11,700 650,813
Scientific-Atlanta, Inc. 725 17,309
Ultralife Batteries, Inc.* 825 10,364
---------
706,880
---------
FOOD & BEVERAGES - 4.14%
Diageo plc- ADR (Note 7) 14,796 711,133
Unilever plc - ADR (Note 7) 11,700 494,325
---------
1,205,458
---------
GLASS PRODUCTS - 0.06%
Libbey, Inc. 500 18,875
---------
HEALTH SERVICES - 1.91%
MedPartners, Inc.* 54,488 558,502
---------
INDUSTRIAL & COMMERCIAL MACHINERY - 1.18%
Comfort Systems USA, Inc.* 700 16,362
NN Ball & Roller, Inc. 1,350 16,706
York International Corp. 6,315 311,408
---------
344,476
---------
MOTION PICTURE PRODUCTION - 0.03%
Group AB SA - ADR* (Note 7) 1,350 8,016
---------
PAPER MILLS - 0.07%
Schweitzer-Mauduit International, Inc. 600 19,950
---------
PRIMARY METAL INDUSTRIES - 0.14%
Gibraltar Steel Corp.* 900 21,600
Wolverine Tube Inc.* 500 19,688
---------
41,288
---------
PRINTING & PUBLISHING - 0.09%
Scholastic Corp.* 700 26,075
---------
RESTAURANTS - 2.06%
McDonald's Corp. 9,695 599,878
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
Investment Portfolio - April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
VALUE
SHARES (NOTE 2)
RETAIL - 0.68%
APPAREL & ACCESSORY STORES- 0.06%
Loehmanns, Inc.* 1,175 $ 4,994
Talbots, Inc. 600 11,400
---------
16,394
---------
SPECIALTY STORES - 0.62%
Hancock Fabrics, Inc. 10,625 158,047
Zale Corp.* 750 22,594
---------
180,641
---------
197,035
---------
SOFTWARE - 0.08%
Broderbund Software, Inc.* 550 9,831
HCIA, Inc.* 1,200 13,425
---------
23,256
---------
TECHNICAL INSTRUMENTS & SUPPLIES - 8.71%
MEASURING & CONTROLLING DEVICES - 4.65%
Millipore Corp. 23,900 824,550
Teradyne, Inc.* 14,600 532,900
---------
1,357,450
---------
OPTICAL SUPPLIES - 0.07%
Sola International, Inc.* 450 19,125
---------
PHOTOGRAPHIC EQUIPMENT & SUPPLIES - 3.98%
Eastman Kodak Co. 16,100 1,162,219
---------
SURGICAL & MEDICAL INSTRUMENTS - 0.01%
CardioGenesis Corp.* 575 3,666
---------
2,542,460
---------
TELECOMMUNICATION SERVICES - 3.66%
Compania Anonima Nacional Telefonos de
Venezuela (CANTV) - ADR (Note 7) 11,405 382,067
Telecomunicacoes Brasileiras S.A. (Telebras) -
ADR (Note 7) 5,625 685,195
---------
1,067,262
---------
TEXTILE MILL PRODUCTS - 0.06%
Albany International Corp. - Class A 650 18,525
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
Investment Portfolio - April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
Shares/Principal Value
Amount (Note 2)
TRANSPORTATION - 3.04%
EQUIPMENT - 0.09%
Federal Signal Corp. 700 $ 15,006
Miller Industries, Inc.* 1,250 9,844
----------
24,850
----------
RAILROAD - 2.92%
Canadian National Railway Co. - ADR (Note 7) 13,100 852,319
----------
WATER - 0.03%
Trico Marine Services, Inc.* 450 10,181
----------
887,350
----------
TOTAL COMMON STOCK
(Identified Cost $11,790,465) 12,116,273
----------
U.S. TREASURY SECURITIES - 51.35%
U.S. TREASURY BONDS - 16.20%
U.S. Treasury Bond, 9.875%, 11/15/2015 $ 20,000 28,331
U.S. Treasury Bond, 7.25%, 5/15/2016 45,000 51,103
U.S. Treasury Bond, 8.75%, 5/15/2020 455,000 604,013
U.S. Treasury Bond, 7.25%, 8/15/2022 230,000 265,075
U.S. Treasury Bond, 7.50%, 11/15/2024 3,060,000 3,650,963
U.S. Treasury Bond, 6.50%, 11/15/2026 120,000 127,800
----------
TOTAL U.S. TREASURY BONDS
(Identified Cost $4,279,349) 4,727,285
----------
U.S. TREASURY NOTES - 35.15%
U.S. Treasury Note, 6.875%, 8/31/1999 1,250,000 1,270,313
U.S. Treasury Note, 7.75%, 12/31/1999 1,495,000 1,544,990
U.S. Treasury Note, 7.75%, 1/31/2000 60,000 62,100
U.S. Treasury Note, 6.25%, 4/30/2001 2,485,000 2,526,934
U.S. Treasury Note, 6.625%, 7/31/2001 3,335,000 3,429,841
U.S. Treasury Note, 6.25%, 6/30/2002 5,000 5,103
U.S. Treasury Note, 5.875%, 9/30/2002 1,070,000 1,077,691
U.S. Treasury Note, 6.50%, 5/15/2005 325,000 339,117
----------
TOTAL U.S. TREASURY NOTES
(Identified Cost $10,161,012) 10,256,089
----------
TOTAL U.S. TREASURY SECURITIES
(Identified Cost $14,440,361) 14,983,374
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
Investment Portfolio - April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
Principal Value
Amount/Shares (Note 2)
U.S. GOVERNMENT AGENCIES - 0.30%
MORTGAGE BACKED SECURITIES
GNMA, Pool #174225, 9.50%, 8/15/2016 $ 1,969 $ 2,130
GNMA, Pool #286310, 9.00%, 2/15/2020 21,832 23,374
GNMA, Pool #385753, 9.00%, 7/15/2024 58,257 62,372
----------
TOTAL U.S. GOVERNMENT AGENCIES
(Identified Cost $85,326) 87,876
----------
SHORT-TERM INVESTMENTS - 3.34%
Dreyfus Treasury Cash Management Fund 973,950 973,950
(Identified Cost $973,950) ----------
TOTAL INVESTMENTS - 96.51%
(Identified Cost $27,290,102) 28,161,473
OTHER ASSETS, LESS LIABILITIES - 3.49% 1,018,525
-----------
NET ASSETS - 100% $29,179,998
============
</TABLE>
*Non-income producing security
<TABLE>
<CAPTION>
<S> <C>
FEDERAL TAX INFORMATION:
At April 30, 1998, the net unrealized appreciation based on identified cost
for federal income tax purposes of $27,290,102 was as follows:
Aggregate gross unrealized appreciation for all investments in
which there was an excesss of value over tax costs $ 1,547,699
Aggregate gross unrealized depreciation for all investments in
which there was an excesss of value over tax costs (676,328)
--------------
Unrealized appreciation - net $ 871,371
</TABLE> ==============
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
Statement of Assets and Liabilities (unaudited)
<TABLE>
<CAPTION>
<S> <C>
APRIL 30, 1998
ASSETS:
Investments, at value (identified cost $27,290,102)(Note 2) $28,161,473
Cash 33,769
Receivable for securities sold 714,677
Interest receivable 259,212
Dividends receivable 50,912
-----------
TOTAL ASSETS 29,220,043
-----------
LIABILITIES:
Accrued management fees (Note 3) 25,852
Accrued Directors' fees (Note 3) 1,728
Payable for fund shares repurchased 7,500
Audit fee payable 4,456
Other payables and accrued expenses 509
-----------
TOTAL LIABILITIES 40,045
-----------
NET ASSETS FOR 2,447,852 SHARES OUTSTANDING $29,179,998
===========
NET ASSETS CONSIST OF:
Capital stock $ 24,479
Additional paid-in-capital 26,421,195
Undistributed net investment income 344,427
Accumulated net realized gain on investments 1,518,523
Net unrealized appreciation on investments 871,374
-----------
TOTAL NET ASSETS $29,179,998
===========
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
($29,179,998/2,447,852 shares) $ 11.92
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
Statement of Operations (unaudited)
<TABLE>
<CAPTION>
<S> <C>
FOR THE SIX MONTHS ENDED APRIL 30, 1998
INVESTMENT INCOME:
Interest $ 413,725
Dividends 203,897
-----------
Total Investment Income 617,622
-----------
EXPENSES:
Management fees (Note 3) 131,334
Directors' fees (Note 3) 4,317
Transfer agent fees (Note 3) 3,152
Audit fee 8,411
Custodian fee 4,339
Registration and filing fees 3,645
Miscellaneous 2,679
-----------
Total Expenses 157,877
Less Reduction of Expenses (Note 3) (482)
-----------
Net Expenses 157,395
-----------
NET INVESTMENT INCOME 460,227
-----------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments (identified cost basis) 1,519,834
Net change in unrealized appreciation on investments 140,617
-----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS 1,660,451
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $2,120,678
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
<S> <C> <C>
For the Six
Months Ended For the
4/30/98 Year Ended
(unaudited) 10/31/97
-------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 460,227 $ 682,532
Net realized gain on investments 1,519,834 1,431,876
Net change in unrealized appreciation on investments 140,617 342,311
-------------- ------------
Net increase in net assets from operations 2,120,678 2,456,719
-------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2):
From net investment income (390,568) (730,167)
From net realized gain on investments (1,427,315) (296,105)
-------------- ------------
Total distributions to shareholders (1,817,883) (1,026,272)
-------------- ------------
CAPITAL STOCK ISSUED AND REPURCHASED:
Net increase in net assets from capital share
transactions (Note 5) 6,946,713 2,706,535
-------------- ------------
Net increase in net assets 7,249,508 4,136,982
NET ASSETS:
Beginning of period 21,930,490 17,793,508
-------------- ------------
END OF PERIOD (including undistributed net investment
income of $344,427 and $274,768, respectively) $ 29,179,998 $21,930,490
============== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
For the Six For the For the Period
Months For the Ten For the For the 9/15/93
Ended Year Months Year Year (commencement
4/30/98 Ended Ended Ended Ended of operations)
(unaudited) 10/31/97 10/31/96 12/31/95 12/31/94 to 12/31/93
------------ --------- --------- ---------- --------- ------------
Per share data (for a share outstanding
throughout each period):
NET ASSET VALUE - BEGINNING OF PERIOD $ 11.97 $ 11.20 $ 10.72 $ 9.72 $ 10.05 $ 10.00
----------- ---------- --------- ---------- --------- ---------
Income from investment operations:
Net investment income 0.199 0.390 0.293 0.342 0.200 0.045
Net realized and unrealized gain (loss)
on investments 0.717 1.010 0.307 1.698 (0.280) 0.045
----------- ---------- --------- ---------- --------- ---------
Total from investment operations 0.916 1.400 0.600 2.040 (0.080) 0.090
----------- ---------- --------- ---------- --------- ---------
Less distributions to shareholders:
From net investment income (0.208) (0.442) (0.092) (0.342) (0.203) (0.040)
In excess of net investment income - - - (0.005) - -
From net realized gain on investment (0.758) (0.188) (0.028) (0.693) (0.040) -
In excess of net realized gain on investments - - - - (0.007) -
----------- ---------- --------- ---------- --------- ---------
Total distributions to shareholders (0.966) (0.630) (0.120) (1.040) (0.250) (0.040)
----------- ---------- --------- ---------- --------- ---------
NET ASSET VALUE - END OF PERIOD $ 11.92 $ 11.97 $ 11.20 $ 10.72 $ 9.72 $ 10.05
=========== ========== ========= ========== ========= =========
Total return1 8.18% 13.01% 5.64% 21.08% (0.80%) 0.93%
Ratios (to average net assets) / Supplemental Data:
Expenses * 1.20%2 1.20% 1.20%2 1.20% 1.20% 1.20%2
Net investment income * 3.50%2 3.39% 3.69%2 3.64% 3.40% 2.47%2
Portfolio turnover 30% 50% 85% 72% 45% 1%
Average commission rate paid 3 $ 0.0486 $ 0.0418 $ 0.0515 $ 0.0689 - -
NET ASSETS - END OF PERIOD (000's omitted) $ 29,180 $ 21,930 $ 17,794 $ 9,518 $ 4,519 $ 475
=========== ========== ========= ========== ========= =========
</TABLE>
*The investment advisor did not impose all or a portion of its management fee
and in some periods paid a portion of the Fund's expenses. If these expenses
had been incurred by the Fund, and had 1994 and 1993 expenses been limited to
that allowed by state securities law, the net investment income per share and
the ratios would be as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net investment income $ 0.198 $0.385 $0.284 $0.031 $0.124 $0.021
Ratios (to average net assets):
Expenses 1.20%2 1.24% 1.31%2 1.53% 2.50% 2.50%2
Net investment income 3.50%2 3.35% 3.58%2 3.31% 2.10% 1.17%2
1 Represents aggregate total return for the period indicated.
2 Annualized.
3 Average commission rate is calculated for funds with fiscal years beginning on or after January 1, 1995.
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
Notes to Financial Statements (unaudited)
1. ORGANIZATION
Blended Asset Series I (the "Fund") is a no-load diversified series of
Exeter Fund, Inc.(the "Corporation"), formerly known as Manning & Napier
Fund, Inc. The Corporation is organized in Maryland and is registered
under the Investment Company Act of 1940, as amended, as an open-end
management investment company.
The total authorized capital stock of the Corporation consists of one
billion shares of common stock each having a par value of $0.01. As of
April 30, 1998, 940 million shares have been designated in total among 19
series, of which 37.5 million have been designated as Blended Asset Series
I Class A Common Stock.
2. SIGNIFICANT ACCOUNTING POLICIES
SECURITY VALUATION
Portfolio securities, including domestic equities, foreign equities,
options and corporate bonds, listed on an exchange are valued at the
latest quoted sales price of the exchange on which the security is traded
most extensively. Securities not traded on valuation date or securities
not listed on an exchange are valued at the latest quoted bid price.
Debt securities, including government bonds and mortgage backed
securities, will normally be valued on the basis of evaluated bid prices
provided by the Fund's pricing service.
Securities for which representative valuations or prices are not
available from the Fund's pricing service are valued at fair value as
determined in good faith by the Advisor under procedures established by
and under the general supervision and responsibility of the Fund's Board
of Directors.
Short-term investments that mature in sixty days or less are valued at
amortized cost.
SECURITY TRANSACTIONS, INVESTMENT INCOME AND EXPENSES
Security transactions are accounted for on the date the securities are
purchased or sold. Dividend income is recorded on the ex-dividend date.
Interest income and expenses are recorded on an accrual basis.
Most expenses of the Corporation can be attributed to a specific fund.
Expenses which cannot be directly attributed are apportioned among the
funds in the Corporation.
FEDERAL INCOME TAXES
The Fund's policy is to comply with the provisions of the Internal
Revenue Code applicable to regulated investment companies. The Fund is
not subject to federal income or excise tax to the extent the Fund
distributes to shareholders each year its taxable income, including any
net realized gains on investments in accordance with requirements of the
Internal Revenue Code. Accordingly, no provision for federal income tax or
excise tax has been made in the financial statements.
13
<PAGE>
Notes to Financial Statements (unaudited)
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
FEDERAL INCOME TAXES (continued)
The Fund uses the identified cost method for determining realized gain or
loss on investments for both financial statement and federal income
tax reporting purposes.
DISTRIBUTIONS OF INCOME AND GAINS
Distributions to shareholders of net investment income are made
semi-annually. Distributions are recorded on the ex-dividend date.
Distributions of net realized gains are distributed annually. An
additional distribution may be necessary to avoid taxation of the Fund.
The timing and characterization of certain income and capital gains are
determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principles. The differences may
be a result of deferral of certain losses, foreign denominated
investments, character reclassification between net income and net gains,
or other tax adjustments. As a result, net investment income (loss) and
net investment gain (loss) on investment transactions for a reporting
period may differ significantly from distributions to shareholders during
such period. As a result, the Fund may periodically make
reclassifications among its capital accounts without impacting the Fund's
net asset value.
FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund are maintained in U.S. dollars.
Foreign currency amounts are translated into U.S. dollars on the following
basis: a) investment securities, other assets and liabilities are
converted to U.S. dollars based upon current exchange rates; and b)
purchases and sales of securities and income and expenses are converted
into U.S. dollars based upon the currency exchange rates prevailing on the
respective dates of such transactions.
Gains and losses attributable to foreign currency exchange rates are
recorded for financial statement purposes as net realized gains and losses
on investments. The portion of both realized and unrealized gains and
losses on investments that result from fluctuations in foreign currency
exchange rates is not separately stated.
MULTIPLE CLASSES OF SHARES
The Fund is authorized to issue five classes of shares (Class A, Class B,
Class C, Class D, and Class E). Currently, only Class A shares have been
issued. The five classes of shares differ in their respective
distribution and service fees. All shareholders bear the common expenses
of the Fund pro rata based on the average daily net assets of each class,
without distinction between share classes. Dividends are declared
separately for each class. No class has preferential dividend rights;
differences in per share dividend rates are generally due to
differences in separate class expenses.
14
<PAGE>
Notes to Financial Statements (unaudited)
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
OTHER
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
the disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
3. TRANSACTIONS WITH AFFILIATES
The Fund has an investment advisory agreement with Manning & Napier
Advisors, Inc.(the Advisor), for which the Fund pays the Advisor a fee,
computed daily and payable monthly, at an annual rate of 1.0% of the
Fund's average daily net assets. The fee amounted to $131,334 for the six
months ended April 30, 1998.
Under the Fund's Investment Advisory Agreement (the "Agreement"),
personnel of the Advisor provide the Fund with advice and assistance in
the choice of investments and the execution of securities transactions,
and otherwise maintain the Fund's organization. The Advisor also provides
the Fund with necessary office space and portfolio accounting and
bookkeeping services. The salaries of all officers of the Fund and of all
Directors who are "affiliated persons" of the Fund or of the Advisor, and
all personnel of the Fund or of the Advisor performing services
relating to research, statistical and investment activities are paid
by the Advisor.
The Advisor has voluntarily agreed to waive its fee and, if necessary,
pay other expenses of the Fund in order to maintain total expenses for the
Fund at no more than 1.20% of average daily net assets each year.
Accordingly, the Advisor waived fees of $482 for the six months ended
April 30, 1998, which is reflected as a reduction of expenses on the
Statement of Operations. The fee waiver and assumption of expenses by the
Advisor is voluntary and may be terminated at any time.
The Advisor also acts as the transfer, dividend paying and shareholder
servicing agent for the Fund. For these services, the Fund pays a fee
which is calculated as a percentage of the average daily net assets at an
annual rate of 0.024%; this fee amounted to $3,152 for the six months
ended April 30, 1998.
Manning & Napier Investor Services, Inc., a registered broker-dealer
affiliate of the Advisor, acts as distributor for the Fund's shares. The
services of Manning & Napier Investor Services, Inc. are provided at no
additional cost to the Fund.
The compensation of the non-affiliated Directors totaled $4,317 for the
six months ended April 30, 1998.
15
<PAGE>
Notes to Financial Statements (unaudited)
4. PURCHASES AND SALES OF SECURITIES
For the six months ended April 30, 1998, purchases and sales of
securities, other than United States Government securities and short-term
securities, were $6,723,219 and $5,619,394, respectively. Purchases and
sales of United States Government securities were $4,449,213 and
$1,838,958, respectively.
5. CAPITAL STOCK TRANSACTIONS
Transactions in shares of Blended Asset Series I Class A Common Stock
were:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
For the Six Months For the Year
Ended 4/30/98 Ended 10/31/97
------------------ ------------------
Shares Amount Shares Amount
---------- ----------- --------- -----------
Sold 750,610 $ 8,590,976 514,345 $ 5,851,791
Reinvested 160,956 1,799,483 91,051 1,011,493
Repurchased (295,457) (3,443,746) (362,106) (4,156,749)
---------- ----------- --------- -----------
Net increase 616,109 $ 6,946,713 243,290 $ 2,706,535
========== =========== ========= ===========
</TABLE>
6. FINANCIAL INSTRUMENTS
The Fund may trade in financial instruments with off-balance sheet risk
in the normal course of its investing activities to assist in managing
exposure to various market risks. These financial instruments include
written options, forward foreign currency exchange contracts, and futures
contracts and may involve, to a varying degree, elements of risk in excess
of the amounts recognized for financial statement purposes. No such
investments were held by the Fund on April 30, 1998.
7. FOREIGN SECURITIES
Investing in securities of foreign companies and foreign governments
involves special risks and considerations not typically associated with
investing in securities of domestic companies and the United States
Government. These risks include revaluation of currencies and future
adverse political and economic developments. Moreover, securities of
foreign companies and foreign governments may be less liquid and their
prices more volatile than those of securities of comparable domestic
companies and the United States Government.
16
<PAGE>
Exeter Fund, Inc.
Blended Asset Series II
Semi-Annual Report
April 30, 1998
<PAGE>
Management Discussion and Analysis (unaudited)
Dear Shareholders:
While all seemed well for the stock market on the surface over the past few
months, a closer look reveals that underneath the still-rising price levels,
earnings growth had slowed and sales growth had virtually ground to a halt.
So, while inflation remains low and the economy continues to grow at a
moderate pace, market valuations for U.S. stocks remain very high, reflecting
all the good news and none of the potential risk in the current environment.
As a result of what is happening with the U.S. economy and stock market, we
have kept a significant portion of the stock in the portfolio invested in
foreign companies at more attractive valuations. This also comes at a time
when other countries around the world are improving their competitive
advantages relative to the U.S., due in part to their cost-cutting efforts and
to currency movements. On the domestic side, we have continued to look for
stocks that are less likely to be hit as hard by a correction and that can
lead in a recovery, basing investments on the fundamentals rather than the
fanfare.
On the bond side, the market gained some ground over the period with slightly
falling interest rates, but held a relatively cautious stance overall. The
yield on the U.S. Treasury bond dropped 20 basis points (0.20%) from where it
was six months ago, with most of the ground gained during the last couple of
months in 1997. The fixed income portion of the portfolio still maintains a
focus on high quality, long-term securities, while the low-inflation
globally-competitive environment continues to provide a positive backdrop for
bonds.
1
<PAGE>
Management Discussion and Analysis (unaudited)
In conclusion, as we continue to witness the exuberance in the stock market,
we maintain our philosophy of patient long-term investing and managing risk
based on our long-term overview. Investment selections are being made
cautiously, focusing on their prospects of weathering a long period of
potentially mediocre market returns, or recovering in the event of a
correction.
As always, it is a privilege to serve you.
Sincerely,
Exeter Asset Management
[graphic]
<pie chart>
Data for pie chart to follow:
<TABLE>
<CAPTION>
<S> <C>
Asset Allocation 4/30/98
Stocks 61%
Bonds 34%
Cash & Equivalents 5%
</TABLE>
2
<PAGE>
Performance Update as of April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Exeter Fund, Inc.
Blended Asset Series II
Total Return
-------------
Through Growth of $10,000 Average
04/30/98 Investment Cumulative Annual
- ----------------- ------------------------ ------------- --------
One Year $ 12,227 22.27% 22.27%
Inception2 $ 19,591 95.91% 15.91%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Lehman Brothers Intermediate Bond Index
Total Return
-------------
Through Growth of $10,000 Average
04/30/98 Investment Cumulative Annual
- --------------------------------------- ------------------ ------------- --------
One Year $ 10,894 8.94% 8.94%
Inception2 $ 12,900 29.00% 5.75%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
50-50 Blended Index
Total Return
-------------
Through Growth of $10,000 Average
04/30/98 Investment Cumulative Annual
- ------------------- ------------------ ------------- --------
One Year $ 12,566 25.66% 25.66%
Inception2 $ 18,998 89.98% 15.14%
</TABLE>
The value of a $10,000 investment in the
Exeter Fund, Inc. - Blended
Asset Series II from its inception (10/12/93)
to present (4/30/98) as compared to the
Lehman Brothers Intermediate Bond Index
and a 50-50 Blended Index.1
[graphic]
<line chart>
Data for line chart to follow:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Exeter Fund Blended Asset Series II Lehman Brothers Intermediate Bond Index 50-50 Blended Index
Date
10/12/93 10,000 10,000 10,000
12/31/93 9,982 9,956 10,056
12/31/94 10,333 9,764 9,978
12/31/95 13,707 11,261 12,743
10/31/96 15,078 11,639 13,978
10/31/97 18,047 12,510 16,832
04/30/98 19,591 12,900 18,998
</TABLE>
1 The Lehman Brothers Intermediate Bond Index is a market value weighted
measure of approximately 4,080 corporate and government securities. The Index
is comprised of investment grade securities with maturities greater than one
year but less than ten years. The 50-50 Blended Index is 50% Standard & Poor's
(S&P) 500 Total Return Index and 50% Lehman Brothers Aggregate Bond Index. The
S&P 500 Total Return Index is an unmanaged capitalization-weighted measure of
500 widely held common stocks listed on the New York Stock Exchange, American
Stock Exchange, and Over-the-Counter market. The Lehman Brothers
Aggregate Bond Index is a market value weighted measure of approximately
6,602 corporate, government, and mortgage backed securities. The Index is
comprised of investment grade securities with maturities greater than one
year. Both Indices' returns assume reinvestment of income and, unlike Fund
returns, do not reflect any fees or expenses.
2 Performance numbers for the Fund and Indices are calculated from October 12,
1993, the Fund's inception date. The Fund's performance is historical and may
not be indicative of future results.
3
<PAGE>
Investment Portfolio - April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
VALUE
SHARES (NOTE 2)
COMMON STOCK - 61.18%
AGRICULTURAL PRODUCTION - 0.05%
Sylvan, Inc.* 2,400 $ 36,300
-----------
AMUSEMENT & RECREATION SERVICES - 0.85%
Resorts World Bhd. - ADR (Note 7) 61,550 592,456
-----------
APPAREL - 0.09%
Novel Denim Holdings Ltd* 2,400 60,600
-----------
BUSINESS SERVICES - 1.24%
National Data Corp. 21,300 869,306
-----------
CHEMICAL & ALLIED PRODUCTS - 8.07%
Cypress Bioscience, Inc.* 6,000 20,625
Mallinckrodt, Inc. 40,975 1,321,444
Orion-Yhtyma OY - B Shares (Finland) (Note 7) 2,320 72,068
Pharmacia & Upjohn, Inc. 47,330 1,990,818
PT Tri Polyta Indonesia - ADR (Note 7) 11,250 25,312
R.P. Scherer Corp.* 30,425 2,221,025
-----------
5,651,292
-----------
COMPUTER EQUIPMENT - 3.78%
Bell & Howell Co.* 28,850 824,606
International Game Technology 65,600 1,824,500
-----------
2,649,106
-----------
COMPUTER INTEGRATED SYSTEMS DESIGN - 0.13%
Apache Medical Systems, Inc.* 10,550 32,969
DAOU Systems, Inc.* 3,200 57,600
-----------
90,569
-----------
CRUDE PETROLEUM & NATURAL GAS - 6.02%
Petroleo Brasileiro S.A. (Petrobras) -
ADR (Note 7) 84,900 2,148,437
Union Texas Petroleum Holdings, Inc. 68,675 1,386,377
YPF Sociedad Anonima - ADR (Note 7) 19,550 681,806
-----------
4,216,620
-----------
DIAMONDS - 0.83%
De Beers Centenary AG - ADR (Note 7) 22,670 583,752
-----------
DISTRIBUTION - WHOLESALE - 0.08%
Philip Services Corp.* 7,100 53,694
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
Investment Portfolio - April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
VALUE
SHARES (NOTE 2)
ELECTRONICS & ELECTRICAL EQUIPMENT - 3.72%
Firearms Training Systems, Inc.* 5,575 $ 48,781
Harman International Industries, Inc. 1,225 52,675
Motorola, Inc. 43,400 2,414,125
Scientific-Atlanta, Inc. 2,300 54,912
Ultralife Batteries, Inc.* 2,700 33,919
---------
2,604,412
---------
FOOD & BEVERAGES - 4.20%
Allied Domecq plc - ADR (Note 7) 158,800 1,638,213
Unilever plc - ADR (Note 7) 30,900 1,305,525
---------
2,943,738
---------
GLASS PRODUCTS - 1.98%
Corning, Inc. 33,300 1,332,000
Libbey, Inc. 1,400 52,850
---------
1,384,850
---------
HEALTH SERVICES - 2.90%
MedPartners, Inc.* 198,096 2,030,484
---------
INDUSTRIAL & COMMERCIAL MACHINERY - 1.36%
Comfort Systems USA, Inc.* 2,400 56,100
NN Ball & Roller, Inc. 5,425 67,134
York International Corp. 16,845 830,669
---------
953,903
---------
LEATHER & LEATHER PRODUCTS - 1.97%
Gucci Group 29,600 1,378,250
---------
MOTION PICTURE PRODUCTION - 0.04%
Groupe AB SA- ADR* (Note 7) 5,025 29,836
---------
PAPER MILLS - 1.83%
Asia Pulp & Paper Co. Ltd. -ADR (Note 7) 83,900 1,221,794
Schweitzer-Mauduit International, Inc. 1,850 61,512
---------
1,283,306
---------
PRIMARY METAL INDUSTRIES - 0.19%
Gibraltar Steel Corp.* 2,750 66,000
Wolverine Tube Inc.* 1,725 67,922
---------
133,922
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
Investment Portfolio - April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
VALUE
SHARES (NOTE 2)
PRINTING & PUBLISHING - 0.12%
Scholastic Corp.* 2,250 $ 83,812
---------
RESTAURANTS - 2.54%
McDonald's Corp. 28,825 1,783,547
---------
RETAIL - 0.64%
APPAREL & ACCESSORY STORES - 0.09%
Loehmanns, Inc.* 4,150 17,638
Talbots, Inc. 2,325 44,175
---------
61,813
---------
SPECIALTY STORES - 0.55%
Hancock Fabrics, Inc. 21,200 315,350
Zale Corp.* 2,250 67,781
---------
383,131
---------
444,944
---------
SOFTWARE - 0.13%
Broderbund Software, Inc.* 2,375 42,453
HCIA, Inc.* 4,225 47,267
---------
89,720
---------
TECHNICAL INSTRUMENTS & SUPPLIES - 10.07%
MEASURING & CONTROLLING DEVICES - 5.02%
Millipore Corp. 61,875 2,134,688
Teradyne, Inc.* 37,900 1,383,350
---------
3,518,038
---------
OPTICAL SUPPLIES - 0.10%
Sola International, Inc.* 1,625 69,063
---------
PHOTOGRAPHIC EQUIPMENT & SUPPLIES - 4.92%
Eastman Kodak Co. 47,750 3,446,953
---------
SURGICAL & MEDICAL INSTRUMENTS - 0.03%
CardioGenesis Corp.* 3,025 19,284
---------
7,053,338
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
Investment Portfolio - April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
Shares/Principal Value
Amount (Note 2)
TELECOMMUNICATION SERVICE - 4.26%
Compania Anonima Nacional Telefonos de
Venezuela (CANTV) - ADR (Note 7) 39,025 $1,307,337
Telecomunicacoes Brasileiras S.A. (Telebras) -
ADR (Note 7) 13,740 1,673,704
----------
2,981,041
----------
TEXTILE MILL PRODUCTS - 0.09%
Albany International Corp. - Class A 2,325 66,263
----------
TRANSPORTATION - 3.03%
EQUIPMENT - 0.14%
Federal Signal Corp. 2,525 54,130
Miller Industries, Inc.* 5,875 46,266
----------
100,396
----------
RAILROAD - 2.84%
Canadian National Railway Co. - ADR (Note 7) 30,600 1,990,912
----------
WATER - 0.05%
Trico Marine Services, Inc.* 1,500 33,938
----------
2,125,246
----------
UTILITIES-ELECTRIC - 0.97%
Enersis S.A. - ADR (Note 7) 23,150 681,478
----------
TOTAL COMMON STOCK
(Identified Cost $40,326,994) 42,855,785
----------
U.S. TREASURY SECURITIES - 33.86%
U.S. TREASURY BONDS - 17.98%
U.S. Treasury Bond, 6.50%, 5/15/2005 $ 105,000 109,561
U.S. Treasury Bond, 8.75%, 5/15/2020 125,000 165,937
U.S. Treasury Bond, 7.25%, 8/15/2022 65,000 74,913
U.S. Treasury Bond, 7.50%, 11/15/2024 3,065,000 3,656,928
U.S. Treasury Bond, 6.875%, 8/15/2025 6,200,000 6,895,566
U.S. Treasury Bond, 6.50%, 11/15/2026 1,585,000 1,688,025
----------
TOTAL U.S. TREASURY BONDS
(Identified Cost $11,402,834) 12,590,930
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
Investment Portfolio - April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
Principal Value
Amount/Shares (Note 2)
U.S. TREASURY SECURITIES (continued)
U.S. TREASURY NOTES - 15.88%
U.S. Treasury Note, 6.25%, 6/30/2002 $3,110,000 $ 3,174,144
U.S. Treasury Note, 5.875%, 9/30/2002 2,370,000 2,387,036
U.S. Treasury Note, 5.625%, 12/31/2002 5,570,000 5,557,818
-----------
TOTAL U.S. TREASURY NOTES
(Identified Cost $11,089,101) 11,118,998
-----------
TOTAL U.S. TREASURY SECURITIES
(Identified Cost $22,491,935) 23,709,928
-----------
SHORT-TERM INVESTMENTS - 4.08%
U.S. Treasury Bill, 5/21/1998 2,000,000 1,994,511
Dreyfus Treasury Cash Management Fund 861,985 861,985
-----------
TOTAL SHORT-TERM INVESTMENTS
(Identified Cost $2,856,496) 2,856,496
-----------
TOTAL INVESTMENTS - 99.12%
(Identified Cost $65,675,425) 69,422,209
OTHER ASSETS, LESS LIABILITIES - 0.88% 614,789
-----------
NET ASSETS - 100% $70,036,998
===========
</TABLE>
*Non-income producing security
<TABLE>
<CAPTION>
<S> <C>
FEDERAL TAX INFORMATION:
At April 30, 1998, the net unrealized appreciation based on identified cost for
federal income tax purposes of $65,675,425 was as follows:
Aggregate gross unrealized appreciation for all investments in
which there was an excess of value over tax cost $ 5,599,775
Aggregate gross unrealized depreciation for all investments in
which there was an excess of tax cost over value (1,852,991)
------------
UNREALIZED APPRECIATION - NET $ 3,746,784
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
Statement of Assets and Liabilities (unaudited)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments, at value (identified cost $65,675,425)(Note 2) $69,422,209
Cash 365,893
Interest receivable 432,548
Dividends receivable 122,100
Receivable for fund shares sold 23,225
Prepaid expenses 935
----------
TOTAL ASSETS 70,366,910
----------
LIABILITIES:
Accrued management fees (Note 3) 57,251
Accrued Directors' fees (Note 3) 1,728
Payable for securities purchased 245,594
Payable for fund shares repurchased 25,000
Other payables and accrued expenses 339
--------
TOTAL LIABILITIES 329,912
--------
NET ASSETS FOR 5,049,271 SHARES OUTSTANDING $70,036,998
===========
NET ASSETS CONSIST OF:
Capital stock $50,492
Additional paid-in-capital 62,542,311
Undistributed net investment income 623,210
Accumulated net realized gain on investments 3,074,209
Net unrealized appreciation on investments 3,746,776
----------
TOTAL NET ASSETS $70,036,998
============
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
($70,036,998/5,049,271 shares) $13.87
</TABLE> =======
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
Statement of Operations (unaudited)
<TABLE>
<CAPTION>
<S> <C>
FOR THE SIX MONTHS ENDED APRIL 30, 1998
INVESTMENT INCOME:
Interest $ 666,153
Dividends 488,611
----------
Total Investment Income 1,154,764
----------
EXPENSES:
Management fees (Note 3) 299,214
Directors' fees (Note 3) 4,317
Transfer agent fees (Note 3) 7,181
Audit fee 8,975
Custodian fee 6,836
Registration and filing fees 3,942
Miscellaneous 5,615
----------
Total Expenses 336,080
----------
NET INVESTMENT INCOME 818,684
----------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on investments (identified cost basis) 3,074,554
Net change in unrealized appreciation on investments 1,237,094
----------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS 4,311,648
----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $5,130,332
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
<S> <C> <C>
For the Six
Months For the
Ended Year
4/30/98 Ended
(unaudited) 10/31/97
------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 818,684 $ 1,034,045
Net realized gain on investments 3,074,554 6,250,473
Net change in unrealized appreciation on investments 1,237,094 48,699
------------- ------------
Net increase in net assets from operations 5,130,332 7,333,217
------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2):
From net investment income (633,405) (1,092,397)
From net realized gain on investments (6,231,121) (1,048,673)
------------- ------------
Total distributions to shareholders (6,864,526) (2,141,070)
------------- ------------
CAPITAL STOCK ISSUED AND REPURCHASED:
Net increase in net assets from capital share
transactions (Note 5) 20,848,826 12,731,521
------------- ------------
Net increase in net assets 19,114,632 17,923,668
NET ASSETS:
Beginning of period 50,922,366 32,998,698
------------- ------------
END OF PERIOD (including undistributed net
investment income of $623,210 and $437,931 respectively) $ 70,036,998 $50,922,366
============= ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
For the
Six For the For the Period
Months For the Ten For the For the 10/12/93
Ended Year Months Year Year (commencement
4/30/98 Ended Ended Ended Ended of operations)
(unaudited) 10/31/97 10/31/96 12/31/95 12/31/94 to 12/31/93
------------ ---------- ---------- ---------- ---------- -------------
Per share data (for a share outstanding
throughout each period):
NET ASSET VALUE - BEGINNING OF PERIOD $ 14.69 $ 13.04 $ 11.95 $ 10.12 $ 9.98 $ 10.00
------------ ---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income 0.163 0.325 0.227 0.238 0.108 0.014
Net realized and unrealized gain (loss)
on investments 0.924 2.130 0.963 3.052 0.243 (0.032)
------------ ---------- ---------- ---------- ---------- ----------
Total from investment operations 1.087 2.455 1.190 3.290 0.351 (0.018)
------------ ---------- ---------- ---------- ---------- ----------
Less distributions to shareholders:
From net investment income (0.176) (0.393) (0.040) (0.237) (0.119) (0.002)
From net realized gain on investments (1.731) (0.412) (0.060) (1.223) (0.092) -
------------ ---------- ---------- ---------- ---------- ----------
Total distributions to shareholders (1.907) (0.805) (0.100) (1.460) (0.211) (0.002)
------------ ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE - END OF PERIOD $ 13.87 $ 14.69 $ 13.04 $ 11.95 $ 10.12 $ 9.98
============ ========== ========== ========== ========== ==========
Total return1 8.55% 19.69% 10.01% 32.64% 3.52% (0.18%)
Ratios (to average net assets) / Supplemental Data:
Expenses 1.12%2 1.15% 1.20%2* 1.20%* 1.20%* 1.20%2*
Net investment income 2.74%2 2.45% 2.51%2* 2.53%* 2.12%* 1.94%2*
Portfolio turnover 27% 63% 57% 63% 19% 0%
Average commission rate paid(3) $ 0.0475 $ 0.0436 $ 0.0524 $ 0.0635 - -
NET ASSETS - END OF PERIOD (000's omitted) $ 70,037 $ 50,922 $ 32,999 $ 20,519 $ 7,214 $ 475
============ ========== ========== ========== ========== ===========
</TABLE>
* The investment advisor did not impose all or a portion of its management fee
and in some periods paid a portion of the Fund's expenses. If these expenses
had been incurred by the Fund and had 1993 expenses been limited to that
allowed by state securities law, the net investment income per share and the
ratios would have been as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net investment income N/A N/A $ 0.225 $ 0.226 $ 0.051 $ 0.005
Ratios (to average net assets):
Expenses N/A N/A 1.22%2 1.33% 2.31% 2.50%2
Net investment income N/A N/A 2.49%2 2.40% 1.01% .64%2
1 Represents aggregate total return for the period indicated.
2 Annualized.
3 Average commission rate is calculated for funds with fiscal years beginning on or after January 1, 1995.
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
Notes to Financial Statements (unaudited)
1. ORGANIZATION
Blended Asset Series II (the "Fund") is a no-load diversified series of
Exeter Fund, Inc. (the Corporation), formerly known as Manning & Napier
Fund, Inc. The Corporation is organized in Maryland and is registered
under the Investment Company Act of 1940, as amended, as an open-end
management investment company.
The total authorized capital stock of the Corporation consists of one
billion shares of common stock each having a par value of $0.01. As of
April 30, 1998, 940 million shares have been designated in total among 19
series, of which 37.5 million have been designated as Blended Asset Series
II Class A Common Stock.
2. SIGNIFICANT ACCOUNTING POLICIES
SECURITY VALUATION
Portfolio securities, including domestic equities, foreign equities,
options and corporate bonds, listed on an exchange are valued at the
latest quoted sales price of the exchange on which the security is traded
most extensively. Securities not traded on valuation date or securities
not listed on an exchange are valued at the latest quoted bid price.
Debt securities, including government bonds and mortgage backed
securities, will normally be valued on the basis of evaluated bid prices
provided by the Fund's pricing service.
Securities for which representative valuations or prices are not
available from the Fund's pricing service are valued at fair value as
determined in good faith by the Advisor under procedures established by
and under the general supervision and responsibility of the Fund's Board
of Directors.
Short-term investments that mature in sixty days or less are valued at
amortized cost.
SECURITY TRANSACTIONS, INVESTMENT INCOME AND EXPENSES
Security transactions are accounted for on the date the securities are
purchased or sold. Dividend income is recorded on the ex-dividend date.
Interest income and expenses are recorded on an accrual basis.
Most expenses of the Corporation can be attributed to a specific fund.
Expenses which cannot be directly attributed are apportioned among the
funds in the Corporation.
13
<PAGE>
Notes to Financial Statements (unaudited)
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
FEDERAL INCOME TAXES
The Fund's policy is to comply with the provisions of the Internal
Revenue Code applicable to regulated investment companies. The Fund is
not subject to federal income or excise tax to the extent the Fund
distributes to shareholders each year its taxable income, including any
net realized gains on investments in accordance with requirements of the
Internal Revenue Code. Accordingly, no provision for federal income tax or
excise tax has been made in the financial statements.
The Fund uses the identified cost method for determining realized gain or
loss on investments for both financial statement and federal income tax
reporting purposes.
DISTRIBUTIONS OF INCOME AND GAINS
Distributions to shareholders of net investment income are made
semi-annually. Distributions are recorded on the ex-dividend date.
Distributions of net realized gains are distributed annually. An
additional distribution may be necessary to avoid taxation of the Fund.
The timing and characterization of certain income and capital gains are
determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principles. The differences may
be a result of deferral of certain losses, foreign denominated
investments, character reclassification between net income and net gains,
or other tax adjustments. As a result, net investment income (loss) and
net investment gain (loss) on investment transactions for a reporting
period may differ significantly from distributions to shareholders during
such period. As a result, the Fund may periodically make
reclassifications among its capital accounts without impacting the Fund's
net asset value.
FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund are maintained in U.S. dollars.
Foreign currency amounts are translated into U.S. dollars on the following
basis: a) investment securities, other assets and liabilities are
converted to U.S. dollars based upon current exchange rates; and b)
purchases and sales of securities and income and expenses are converted
into U.S. dollars based upon the currency exchange rates prevailing on the
respective dates of such transactions.
Gains and losses attributable to foreign currency exchange rates are
recorded for financial statement purposes as net realized gains and losses
on investments. The portion of both realized and unrealized gains and
losses on investments that result from fluctuations in foreign currency
exchange rates is not separately stated.
14
<PAGE>
Notes to Financial Statements (unaudited)
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
MULTIPLE CLASSES OF SHARES OF BENEFICIAL INTEREST
The Fund is authorized to issue five classes of shares (Class A, Class B,
Class C, Class D, and Class E shares). Currently, only Class A shares
have been issued. The five classes of shares differ in their respective
distribution and service fees. All shareholders bear the common expenses
of the Fund pro rata based on the average daily net assets of each class,
without distinction between share classes. Dividends are declared
separately for each class. No class has preferential dividend rights;
differences in per share dividend rates are generally due to differences
in separate class expenses.
OTHER
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
the disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
3. TRANSACTIONS WITH AFFILIATES
The Fund has an investment advisory agreement with Manning & Napier
Advisors, Inc.(the Advisor), for which the Fund pays the Advisor a fee,
computed daily and payable monthly, at an annual rate of 1.0% of the
Fund's average daily net assets. The fee amounted to $299,214 for the six
months ended April 30, 1998.
Under the Fund's Investment Advisory Agreement (the "Agreement"),
personnel of the Advisor provide the Fund with advice and assistance in
the choice of investments and the execution of securities transactions,
and otherwise maintain the Fund's organization. The Advisor also provides
the Fund with necessary office space and portfolio accounting and
bookkeeping services. The salaries of all officers of the Fund and of all
Directors who are "affiliated persons" of the Fund or of the Advisor, and
all personnel of the Fund or of the Advisor performing services
relating to research, statistical and investment activities are paid
by the Advisor.
The Advisor also acts as the transfer, dividend paying and shareholder
servicing agent for the Fund. For these services, the Fund pays a fee
which is calculated as a percentage of the average daily net assets at an
annual rate of 0.024%; this fee amounted to $7,181 for the six months
ended April 30, 1998.
Manning & Napier Investor Services, Inc., a registered broker-dealer
affiliate of the Advisor, acts as distributor for the Fund's shares. The
services of Manning & Napier Investor Services, Inc. are provided at no
additional cost to the Fund.
The compensation of the non-affiliated Directors totaled $4,317 for the
six months ended April 30, 1998.
15
<PAGE>
Notes to Financial Statments (unaudited)
4. PURCHASES AND SALES OF SECURITIES
For the six months ended April 30, 1998, purchases and sales of
securities, other than United States Government securities and short-term
securities, were $20,182,798 and $12,414,638, respectively. Purchases and
sales of United States Government securities were $7,648,989 and
$3,451,902 respectively.
5. CAPITAL STOCK TRANSACTIONS
Transactions in shares of Blended Asset Series II Class A Common Stock
were:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
For the Six Months For the Year
Ended 4/30/98 Ended 10/31/97
------------------- ---------------
Shares Amount Shares Amount
------------------- ------------ --------------- ------------
Sold 1,317,114 $17,667,347 1,218,144 $16,655,310
Reinvested 536,937 6,840,578 163,874 2,138,523
Repurchased (271,455) (3,659,099) (445,116) (6,062,312)
------------------- ------------ --------------- ------------
Net increase 1,582,596 $20,848,826 936,902 $12,731,521
=================== ============ =============== ============
</TABLE>
6. FINANCIAL INSTRUMENTS
The Fund may trade in financial instruments with off-balance sheet risk
in the normal course of its investing activities to assist in managing
exposure to various market risks. These financial instruments include
written options, forward foreign currency exchange contracts, and futures
contracts and may involve, to a varying degree, elements of risk in excess
of the amounts recognized for financial statement purposes. No such
investments were held by the Fund on April 30, 1998.
7. FOREIGN SECURITIES
Investing in securities of foreign companies and foreign governments
involves special risks and considerations not typically associated with
investing in securities of domestic companies and the United States
Government. These risks include revaluation of currencies and future
adverse political and economic developments. Moreover, securities of
foreign companies and foreign governments and their markets may be less
liquid and their prices more volatile than those of securities of
comparable domestic companies and the United States Government.
16
<PAGE>
Exeter Fund, Inc.
Flexible Yield Series I
Semi-Annual Report
April 30, 1998
<PAGE>
Management Discussion and Analysis (unaudited)
Dear Shareholder:
Given the roller coaster action of the bond market over the past few years,
the last six months (October through April) have been unique in that interest
rates have remained remarkably steady. Yields on three month Treasury Bills
have hovered around 5%, yields on two year Treasury Notes started and ended
the period at about 5.6%, ten year notes saw their yields decline modestly,
and thirty year bonds, which began the period yielding slightly above 6%,
finished the quarter slightly lower, at 6%. Just as roller coasters may level
out for a moment to let riders catch their breath, the markets seem to have
hit an uneventful stretch. Even so, considering the somewhat conflicting
underlying economic fundamentals, it is safe to say that the tension level of
the market has started to rise.
On the economic front, strong consumer spending and business investment has
been countered by limited government spending and a deteriorating U.S. trade
balance. On the inflation front, accelerating monetary growth has raised
concerns that have so far been calmed by low Consumer Price Index growth and
declining Producer Prices.
The net outcome of the mixed signals has been relatively stable interest
rates. As was mentioned earlier, rates barely changed over the last six
months. But dont let the calm on the surface lull you into a false sense of
security. Just when the ride seems calm, the roller coaster is most likely to
surprise you.
The magic of roller coasters is that they allow you to experience sensations
that can be found nowhere else. However, rational people only ride them
because they come equipped with a restraining device to keep the rider from
flying out as they rocket you along the way. Investing also offers safety
devices, although they are less apparent. If an investor wants to survive the
quarterly and annual fluctuations that are part and parcel of the financial
markets, they have to invest based on an understanding of the long-term
1
<PAGE>
Management Discussion and Analysis (unaudited)
investment dynamics. The global economy, its impact on the level of
competition, and the disciplining force of the financial markets is what has
allowed us to smooth the ride for bond investors.
As always, it is a privilege to serve you.
Sincerely,
Exeter Asset Management
[graphic]
<pie chart>
Data for pie chart to follow:
<TABLE>
<CAPTION>
<S> <C>
Effective Maturity - As of 04/30/98
Less than 1 year 9%
1-2 years 23%
2-3 years 25%
3-4 years 9%
More than 4 years 34%
</TABLE>
2
<PAGE>
Performance Update as of April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Exeter Fund, Inc. - Flexible Yield Series I
Total Return
-------------
Through Growth of $10,000 Average
04/30/98 Investment Cumulative Annual
- ------------------------------------------- ------------------ ------------- --------
One Year $ 10,713 7.13% 7.13%
Inception2 $ 12,329 23.29% 5.10%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Merrill Lynch U.S. Treasury Short-Term Index
Total Return
-------------
Through Growth of $10,000 Average
04/30/98 Investment Cumulative Annual
- -------------------------------------------- ------------------ ------------- --------
One Year $ 10,714 7.14% 7.14%
Inception2 $ 12,707 27.07% 5.86%
</TABLE>
The value of a $10,000 investment in the
Exeter Fund, Inc. - Flexible Yield
Series I from its inception (2/15/94) to
present (4/30/98) as compared to the Merrill
Lynch U.S. Treasury Short-Term Index.1
[graphic]
<line chart>
Data for line chart to follow:
<TABLE>
<CAPTION>
<S> <C> <C>
Exeter Fund Flexible Yield Series I Merrill Lynch U.S. Treasury Short-Term Index
date
02/15/94 $10,000 $10,000
12/31/94 9,924 10,030
12/31/95 10,995 11,133
10/31/96 11,441 11,598
10/31/97 12,025 12,350
04/30/98 12,329 12,707
</TABLE>
1 The Merrill Lynch U.S. Treasury Short-Term Index is a market
value weighted measure of approximately 59 U.S. Treasury Securities.
The Index is comprised of U.S. Treasury securities with maturities
greater than one year but less than three years. The Index returns assume
reinvestment of coupons and, unlike Fund returns, do not reflect any fees or
expenses.
2 The Fund and Index performance are calculated from February 15, 1994, the
Fund's inception date. The Fund's performance is historical and may not be
indicative of future results.
3
<PAGE>
Investment Portfolio - April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
PRINCIPAL VALUE
AMOUNT/SHARES (NOTE 2)
U.S. TREASURY SECURITIES - 89.1%
U.S. TREASURY NOTES
U.S.Treasury Note, 6.125%, 5/15/1998 $ 40,000 $ 40,012
U.S.Treasury Note, 6.50%, 4/30/1999 65,000 65,589
U.S.Treasury Note, 6.00%, 6/30/1999 40,000 40,188
U.S.Treasury Note, 5.625%, 12/31/1999 20,000 20,006
U.S.Treasury Note, 6.875%, 3/31/2000 30,000 30,675
U.S.Treasury Note, 6.75%, 4/30/2000 20,000 20,419
U.S.Treasury Note, 5.875%, 6/30/2000 40,000 40,213
U.S.Treasury Note, 6.625%, 6/30/2001 40,000 41,112
U.S.Treasury Note, 6.25%, 10/31/2001 25,000 25,453
U.S.Treasury Note, 6.25%, 1/31/2002 40,000 40,763
U.S.Treasury Note, 6.25%, 6/30/2002 15,000 15,309
U.S.Treasury Note, 5.625%, 12/31/2002 75,000 74,836
---------
TOTAL U.S. TREASURY SECURITIES
(Identified Cost $451,980) 454,575
---------
SHORT-TERM INVESTMENTS - 4.0%
Dreyfus Treasury Cash Management Fund
(Identified Cost $20,671) 20,671 20,671
---------
TOTAL INVESTMENTS - 93.1%
(Identified Cost $472,651) 475,246
OTHER ASSETS, LESS LIABILITIES - 6.9% 35,179
---------
NET ASSETS - 100% $510,425
=========
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
FEDERAL TAX INFORMATION:
At April 30, 1998, the net unrealized appreciation based on identified cost for
federal income tax purposes of $472,651 was as follows:
Aggregate gross unrealized appreciation for all investments in which
there was an excess of value over tax cost $ 3,771
Aggregate gross unrealized depreciation for all investments in which
there was an excess of tax cost over value (1,176)
--------
UNREALIZED APPRECIATION - NET $ 2,595
========
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
Statement of Assets and Liabilities (unaudited)
<TABLE>
<CAPTION>
<S> <C>
APRIL 30, 1998
ASSETS:
Investments, at value (identified cost $472,651)(Note 2) $475,246
Receivable for fund shares sold 30,000
Interest receivable 6,519
Receivable from investment advisor (Note 3) 9,635
--------
TOTAL ASSETS 521,400
--------
LIABILITIES:
Accrued Directors' fees (Note 3) 3,395
Transfer agent fees payable (Note 3) 68
Audit fee payable 3,831
Other payables and accrued expenses 3,681
--------
TOTAL LIABILITIES 10,975
--------
NET ASSETS FOR 49,647 SHARES OUTSTANDING $510,425
========
NET ASSETS CONSIST OF:
Capital stock $ 496
Additional paid-in-capital 500,669
Undistributed net investment income 4,421
Accumulated net realized gain on investments 2,244
Net unrealized appreciation on investments 2,595
--------
TOTAL NET ASSETS $510,425
========
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
($510,425/49,647 shares) $ 10.28
========
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
Statement of Operations (unaudited)
<TABLE>
<CAPTION>
<S> <C>
FOR THE SIX MONTHS ENDED APRIL 30, 1998
INVESTMENT INCOME:
Interest $ 16,541
---------
EXPENSES:
Management fee (Note 3) 985
Directors' fees (Note 3) 4,317
Transfer agent fees (Note 3) 68
Audit fee 4,355
Registration and filing fees 2,108
Custodian fee 243
Miscellaneous 513
---------
Total Expenses 12,589
Less Reduction of Expenses (Note 3) (10,620)
---------
Net Expenses 1,969
---------
NET INVESTMENT INCOME 14,572
---------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain on investments (identified cost basis) 4,937
Net change in unrealized appreciation on investments (5,245)
---------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (308)
---------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 14,264
=========
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
<S> <C> <C>
For the Six
Months Ended For the
4/30/98 Year Ended
(unaudited) 10/31/97
-------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 14,572 $ 33,077
Net realized gain (loss) on investments 4,937 (2,250)
Net change in unrealized appreciation
(depreciation) on investments (5,245) 4,259
-------------- ------------
Net increase in net assets from operations 14,264 35,086
-------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2):
From net investment income (20,993) (28,418)
From net realized gain on investments -- (1,988)
-------------- ------------
Total distributions to shareholders (20,993) (30,406)
-------------- ------------
CAPITAL STOCK ISSUED AND REPURCHASED:
Net increase (decrease) in net assets from
capital share transactions (Note 5) (132,678) 152,255
-------------- ------------
Net increase (decrease) in net assets (139,407) 156,935
NET ASSETS:
Beginning of period 649,832 492,897
-------------- ------------
END OF PERIOD (including undistributed net
investment income of $4,421, and $10,842
respectively) $ 510,425 $ 649,832
============== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
For the
Period
For the Six For the 2/15/94
Ended For the For the Ten Year (commencement
4/30/98 Year Ended Months Ended Ended of operations)
(unaudited) 10/31/97 10/31/96 12/31/95 to 12/31/94
----------- ---------- ------------ ---------- -------------
Per share data (for a share outstanding
throughout each period)
NET ASSET VALUE - BEGINNING OF PERIOD $ 10.39 $ 10.27 $ 10.26 $ 9.69 $ 10.00
----------- ----------- ------------ ---------- -------------
Income from investment operations:
Net investment income 0.283 0.505 0.411 0.464 0.241
Net realized and unrealized gain (loss)
on investments (0.026) 0.099 (0.101) 0.566 (0.317)
----------- ----------- ------------ ---------- -------------
Total from investment operations 0.257 0.604 0.310 1.030 (0.076)
----------- ----------- ------------ ---------- -------------
Less distributions to shareholders:
From net investment income (0.367) (0.456) (0.300) (0.460) (0.234)
From net realized gain on investments -- (0.028) -- -- --
Total distributions to shareholders (0.367) (0.484) (0.300) (0.460) (0.234)
----------- ----------- ------------ ---------- -------------
NET ASSET VALUE - END OF PERIOD $ 10.28 $ 10.39 $ 10.27 $ 10.26 $ 9.69
=========== =========== ============ ========== =============
Total return 1 2.53% 6.07% 3.11% 10.79% (0.76)%
Ratios (to average net assets) / Supplemental Data:
Expenses* 0.70%2 0.70% 0.70%2 0.70% 0.70%2
Net investment income* 5.18%2 5.29% 5.25%2 4.99% 4.41%2
Portfolio turnover
18% 77% 36% 60% 38%
NET ASSETS - END OF PERIOD
(000's omitted) $ 510 $ 650 $ 493 $ 256 $ 231
=========== =========== ============ ========== =============
</TABLE>
* The investment advisor did not impose its management fee and paid a portion
of the Fund's expenses. If these expenses had been incurred by the Fund, and
had 1994, 1995, and 1996 expenses been limited to that allowed by state
securities law, the net investment income per share and the ratios would have
been as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Net investment income $ 0.077 $0.206 $ 0.270 $0.297 $ 0.143
Ratios (to average net assets):
Expenses 4.47%2 3.83% 2.50%2 2.50% 2.50%2
Net investment income 1.41%2 2.16% 3.45%2 3.19% 2.61%2
1 Represents aggregate total return for the period indicated.
2 Annualized.
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
Notes to Financial Statements (unaudited)
1. ORGANIZATION
Flexible Yield Series I (the "Fund") is a no-load diversified series of
Exeter Fund, Inc. (the "Corporation"), formerly Manning & Napier Fund,
Inc. The Corporation is organized in Maryland and is registered under the
Investment Company Act of 1940, as amended, as an open-end management
investment company.
The total authorized capital stock of the Corporation consists of one
billion shares of common stock each having a par value of $0.01. As of
April 30, 1998, 940 million shares have been designated in total among 19
series, of which 37.5 million have been designated as Flexible Yield
Series I Class A Common Stock.
2. SIGNIFICANT ACCOUNTING POLICIES
SECURITY VALUATION
Portfolio securities listed on an exchange are valued at the latest
quoted sales price of the exchange on which the security is traded most
extensively. Securities not traded on valuation date or securities not
listed on an exchange are valued at the latest quoted bid price.
Debt securities, including government bonds and mortgage backed
securities, will normally be valued on the basis of evaluated bid prices
provided by the Fund's pricing service.
Securities for which representative valuations or prices are not
available from the Fund's pricing service are valued at fair value as
determined in good faith by the Advisor under procedures established by and
under the general supervision and responsibility of the Fund's Board of
Directors.
Short-term investments that mature in sixty days or less are valued at
amortized cost.
SECURITY TRANSACTIONS, INVESTMENT INCOME AND EXPENSES
Security transactions are accounted for on the date the securities are
purchased or sold. Dividend income is recorded on the ex-dividend date.
Interest income and expenses are recorded on an accrual basis.
Most expenses of the Corporation can be attributed to a specific fund.
Expenses which cannot be directly attributed are apportioned among the
funds in the Corporation.
FEDERAL INCOME TAXES
The Fund's policy is to comply with the provisions of the Internal
Revenue Code applicable to regulated investment companies. The Fund is not
subject to federal income or excise tax to the extent the Fund distributes
to shareholders each year its taxable income, including any net realized
gains on investments in accordance with requirements of the Internal
Revenue Code. Accordingly, no provision for federal income tax or excise
tax has been made in the financial statements.
9
<PAGE>
Notes to Financial Statements (unaudited)
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
FEDERAL INCOME TAXES (continued)
The Fund uses the identified cost method for determining realized gain or
loss on investments for both financial statement and federal income tax
reporting purposes.
DISTRIBUTIONS OF INCOME AND GAINS
Distributions to shareholders of net investment income are made
quarterly. Distributions are recorded on the ex-dividend date.
Distributions of net realized gains are distributed annually. An
additional distribution may be necessary to avoid taxation of the Fund.
The timing and characterization of certain income and capital gains are
determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principles. The differences may
be a result of deferral of certain losses, character reclassification
between net income and net gains, or other required tax adjustments. As a
result, net investment income (loss) and net investment gain (loss) on
investment transactions for a reporting period may differ significantly
from distributions to shareholders during such period. As a result, the
Fund may periodically make reclassifications among its capital accounts
without impacting the Fund's net asset value.
MULTIPLE CLASSES OF SHARES OF BENEFICIAL INTEREST
The Fund is authorized to issue five classes of shares (Class A, Class B,
Class C, Class D, and Class E shares). Currently, only Class A shares have
been issued. The five classes of shares differ in their respective
distribution and service fees. All shareholders bear the common expenses
of the Fund pro rata based on the average daily net assets of each class,
without distinction between share classes. Dividends are declared
separately for each class. No class has preferential dividend rights;
differences in per share dividend rates are generally due to differences
in separate class expenses.
OTHER
The preparation of the 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
the disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
3. TRANSACTIONS WITH AFFILIATES
The Fund has an investment advisory agreement with Manning & Napier
Advisors, Inc. (the "Advisor"), for which the Fund pays the Advisor a
fee, computed daily and payable monthly, at an annual rate of 0.35% of
the Fund's average daily net assets. The fee amounted to $985 for the
six months ended April 30, 1998.
10
<PAGE>
Notes to Financial Statements (unaudited)
3. TRANSACTIONS WITH AFFILIATES (continued)
Under the Fund's Investment Advisory Agreement (the "Agreement"),
personnel of the Advisor provide the Fund with advice and assistance in
the choice of investments and the execution of securities transactions,
and otherwise maintain the Fund's organization. The Advisor also
provides the Fund with necessary office space and portfolio accounting
and bookkeeping services. The salaries of all officers of the Fund and
of all Directors who are "affiliated persons" of the Fund or of the
Advisor, and all personnel of the Fund or of the Advisor performing
services relating to research, statistical and investment activities
are paid by the Advisor.
The Advisor has voluntarily agreed to waive its fee and, if necessary,
pay other expenses of the Fund in order to maintain total expenses for the
Fund at no more than 0.70% of average daily net assets each year.
Accordingly, the Advisor did not impose any of its fee and paid expenses
amounting to $9,635 for the six months ended April 30, 1998, which is
reflected as a reduction of expenses on the Statement of Operations.
The fee waiver and assumption of expenses by the Advisor is voluntary
and may be terminated at any time.
The Advisor also acts as the transfer, dividend paying and shareholder
servicing agent for the Fund. For these services, the Fund pays a fee
which is calculated as a percentage of the average daily net assets at
an annual rate of 0.024%; this fee amounted to $68 for the six months
ended April 30, 1998.
Manning & Napier Investor Services, Inc., a registered broker-dealer
affiliate of the Advisor, acts as distributor for the Fund's shares. The
services of Manning & Napier Investor Services, Inc. are provided at no
additional cost to the Fund.
The compensation of the non-affiliated Directors totaled $4,317 for
the six months ended April 30, 1998.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of United States Government securities, other
than short-term securities, were $96,088 and $241,131, respectively, for
the six months ended April 30, 1998.
11
<PAGE>
Notes to Financial Statements (unaudited)
5. CAPITAL STOCK TRANSACTIONS
Transactions in shares of Flexible Yield Series I Class A Common
Stock were:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
For the Six Months For the Year
Ended 4/30/98 Ended 10/31/97
------------------- ------------------
Shares Amount Shares Amount
------------------- ---------- ------------- ----------
Sold 69,522 $ 715,274 53,796 $ 552,351
Reinvested 2,060 20,993 2,812 28,563
Repurchased (84,474) (868,945) (42,043) (428,659)
------------------- ---------- ------------- ----------
Net increase(decrease) (12,892) $(132,678) 14,565 $ 152,255
=================== ========== ============= ==========
</TABLE>
The Advisor owned 12,724 shares on April 30, 1998 and 12,280 shares
on October 31, 1997.
6. FINANCIAL INSTRUMENTS
The Fund may trade in financial instruments with off-balance sheet risk
in the normal course of its investing activities to assist in
managing exposure to various market risks. These financial instruments
include written options and futures contracts and may involve, to a
varying degree, elements of risk in excess of the amounts recognized for
financial statement purposes. No such investments were held by the Fund
on April 30, 1998.
12
<PAGE>
Exeter Fund, Inc.
Flexible Yield II
Semi-Annual Report
April 30, 1998
<PAGE>
Management Discussion and Analysis (unaudited)
Dear Shareholder:
Given the roller coaster action of the bond market over the past few years,
the last six months (October through April) have been unique in that interest
rates have remained remarkably steady. Yields on three month Treasury Bills
have hovered around 5%, yields on two year Treasury Notes started and ended
the period at about 5.6%, ten year notes saw their yields decline modestly,
and thirty year bonds, which began the period yielding slightly above 6%,
finished the quarter slightly lower, at 6%. Just as roller coasters may level
out for a moment to let riders catch their breath, the markets seem to have
hit an uneventful stretch. Even so, considering the somewhat conflicting
underlying economic fundamentals, it is safe to say that the tension level of
the market has started to rise.
On the economic front, strong consumer spending and business investment has
been countered by limited government spending and a deteriorating U.S. trade
balance. On the inflation front, accelerating monetary growth has raised
concerns that have so far been calmed by low Consumer Price Index growth and
declining Producer Prices.
The net outcome of the mixed signals has been relatively stable interest
rates. As was mentioned earlier, rates barely changed over the last six
months. But dont let the calm on the surface lull you into a false sense of
security. Just when the ride seems calm, the roller coaster is most likely to
surprise you.
The magic of roller coasters is that they allow you to experience sensations
that can be found nowhere else. However, rational people only ride them
because they come equipped with a restraining device to keep the rider from
flying out as they rocket you along the way. Investing also offers safety
devices, although they are less apparent. If an investor wants to survive the
quarterly and annual fluctuations that are part and parcel of the financial
1
<PAGE>
Management Discussion and Analysis (unaudited)
markets, they have to invest based on an understanding of the long-term
investment dynamics. The global economy, its impact on the level of
competition, and the disciplining force of the financial markets is what has
allowed us to smooth the ride for bond investors.
As always, it is a privilege to serve you.
Sincerely,
Exeter Asset Management
[graphic]
<pie chart>
Data for the pie chart to follow:
<TABLE>
<CAPTION>
<S> <C>
Effective Maturity - As of 4/30/98
Less than 1 Year 7%
1 - 2 Years 4%
2 - 3 Years 11%
3 - 5 Years 36%
5 - 7 Years 21%
More than 7 Years 21%
</TABLE>
2
<PAGE>
Performance Update as of April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Exeter Fund, Inc. - Flexible Yield Series II
Total Return
-------------
Through Growth of $10,000 Average
04/30/98 Investment Cumulative Annual
- -------------------------------------------- ------------------ ------------- --------
One Year $ 10,941 9.41% 9.41%
Inception2 $ 12,559 25.59% 5.56%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Merrill Lynch Corporate/Government Intermediate Index
Total Return
-------------
Through Growth of $10,000 Average
04/30/98 Investment Cumulative Annual
- ----------------------------------------------------- ------------------ ------------- --------
One Year $ 10,895 8.95% 8.95%
Inception2 $ 12,951 29.51% 6.34%
</TABLE>
The value of a $10,000 investment in the
Exeter Fund, Inc. - Flexible Yield
Series II from its inception (2/15/94) to
present (4/30/98) as compared to the Merrill
Lynch Corporate/Government Intermediate
Index. 1
[graphic]
<line chart>
Data for line chart to follow:
<TABLE>
<CAPTION>
<S> <C> <C>
Exeter Fund Flexible Yield Series II Merrill Lynch Corporate/Government Intermediate Index
Date
02/15/94 $10,000 $10,000
12/31/94 9,531 9,799
12/31/95 11,182 11,301
10/31/96 11,336 11,672
10/31/97 12,199 12,560
04/30/98 12,559 12,951
</TABLE>
1 The Merrill Lynch Corporate/Government Intermediate Index is a market value
weighted measure of approximately 4,318 corporate and government bonds. The
Index is comprised of investment grade bonds with maturities greater than one
year but less than ten years. The Index returns assume reinvestment of
coupons and, unlike Fund returns, do not reflect any fees or expenses.
2 The Fund and Index performance are calculated from February 15, 1994, the
Fund's inception date. The Fund's performance is historical and may not be
indicative of future results.
3
<PAGE>
Investment Portfolio - April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
PRINCIPAL VALUE
AMOUNT/SHARES (NOTE 2)
U.S. TREASURY SECURITIES - 95.0%
U.S. TREASURY NOTES
U.S. Treasury Note, 5.875%, 1/31/1999 $ 35,000 $ 35,087
U.S. Treasury Note, 6.00%, 6/30/1999 20,000 20,094
U.S. Treasury Note, 6.125%, 9/30/2000 55,000 55,619
U.S. Treasury Note, 7.875%, 8/15/2001 30,000 31,959
U.S. Treasury Note, 6.25%, 10/31/2001 15,000 15,272
U.S. Treasury Note, 6.25%, 1/31/2002 50,000 50,953
U.S. Treasury Note, 6.25%, 6/30/2002 45,000 45,928
U.S. Treasury Note, 6.25%, 2/15/2003 40,000 40,938
U.S. Treasury Note, 7.25%, 5/15/2004 100,000 107,750
U.S. Treasury Note, 6.50%, 10/15/2006 75,000 78,633
U.S. Treasury Note, 6.625%, 5/15/2007 30,000 31,819
---------
TOTAL U.S. TREASURY SECURITIES
(Identified Cost $490,456) 495,000 514,052
---------
SHORT-TERM INVESTMENTS - 3.7%
Dreyfus Treasury Cash Management Fund
(Identified Cost $19,865) 19,865 19,865
---------
TOTAL INVESTMENTS - 98.7%
(Identified Cost $510,321) 533,917
OTHER ASSETS, LESS LIABILITIES - 1.3% 7,142
---------
NET ASSETS - 100% $541,059
=========
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
FEDERAL TAX INFORMATION:
At April 30, 1998, the net unrealized appreciation based on identified cost for
federal income tax purposes of $510,321 was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost $23,596
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value 0
-------
UNREALIZED APPRECIATION - NET $23,596
=======
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
Statement of Assets and Liabilities (unaudited)
<TABLE>
<CAPTION>
<S> <C>
APRIL 30, 1998
ASSETS:
Investments, at value (identified cost $510,321)(Note 2) $533,917
Interest receivable 8,399
Receivable from investment advisor (Note 3) 9,436
--------
TOTAL ASSETS 551,752
--------
LIABILITIES:
Accrued Directors' fees (Note 3) 3,395
Transfer agent fees payable (Note 3) 68
Audit fee payable 3,944
Other payables and accrued expenses 3,286
--------
TOTAL LIABILITIES 10,693
--------
NET ASSETS FOR 53,795 SHARES OUTSTANDING $541,059
========
NET ASSETS CONSIST OF:
Capital stock $ 538
Additional paid-in-capital 508,424
Undistributed net investment income 4,428
Accumulated net realized gain on investments 4,073
Net unrealized appreciation on investments 23,596
--------
TOTAL NET ASSETS $541,059
========
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
($541,059/53,795 shares) $ 10.06
========
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
Statement of Operations (unaudited)
<TABLE>
<CAPTION>
<S> <C>
FOR THE SIX MONTHS ENDED APRIL 30, 1998
INVESTMENT INCOME:
Interest $ 17,340
---------
EXPENSES:
Management fees (Note 3) 1,274
Directors' fees (Note 3) 4,317
Transfer agent fees (Note 3) 68
Audit fee 4,475
Registration and filing fees 2,107
Custodian fee 221
Miscellaneous 513
---------
Total Expenses 12,975
Less Reduction of Expenses (Note 3) (10,710)
---------
Net Expenses 2,265
---------
NET INVESTMENT INCOME 15,075
---------
REALIZED AND UNREALIZED GAIN(LOSS)
ON INVESTMENTS:
Net realized gain on investments (identified cost basis) 4,501
Net change in unrealized appreciation on investments (3,594)
---------
NET REALIZED AND UNREALIZED GAIN(LOSS)
ON INVESTMENTS 907
---------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 15,982
=========
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
<S> <C> <C>
For the Six
Months Ended For the
4/30/98 Year Ended
(unaudited) 10/31/97
-------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income 15,075 35,136
Net realized gain on investments 4,501 5,404
Net change in unrealized appreciation
(depreciation) on investments (3,594) 11,090
-------------- ------------
Net increase in net assets from operations 15,982 51,630
-------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2):
From net investment income (19,216) (36,179)
From net realized gain on investments (4,875) (382)
-------------- ------------
Total distributions to shareholders (24,091) (36,561)
-------------- ------------
CAPITAL STOCK ISSUED AND REPURCHASED:
Net increase (decrease) in net assets from capital
share transactions (Note 5) (169,056) 221,861
-------------- ------------
Net increase(decrease) in net assets (177,165) 236,930
NET ASSETS:
Beginning of period 718,224 481,294
-------------- ------------
END OF PERIOD (including undistributed net investment
income of $4,428 and $8,569, respectively) $ 541,059 $ 718,224
============== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
For the For the Period
Six Months For the For the For the 2/15/94
Ended Year Ten Months Year (commencement
4/30/98 Ended Ended Ended of operations)
(unaudited) 10/31/97 10/31/96 12/31/95 to 12/31/94
------------ ---------- ------------ ---------- ---------------
Per share data (for a share outstanding
throughout each period):
NET ASSET VALUE -
BEGINNING OF PERIOD $ 10.23 $ 10.10 $ 10.30 $ 9.27 $ 10.00
------------ ---------- ------------ ---------- ---------------
Income from investment operations:
Net investment income 0.329 0.523 0.445 0.561 0.269
Net realized and unrealized gain (loss)
on investments (0.036) 0.212 (0.315) 1.019 (0.738)
------------ ---------- ------------ ---------- ---------------
Total from investment operations 0.293 0.735 0.130 1.580 (0.469)
------------ ---------- ------------ ---------- ---------------
Less distributions to shareholders:
From net investment income (0.369) (0.597) (0.270) (0.550) (0.261)
From net realized gain on investments (0.094) (0.008) (0.060) - -
------------ ---------- ------------ ---------- ---------------
Total distributions to shareholders (0.463) (0.605) (0.330) (0.550) (0.261)
------------ ---------- ------------ ---------- ---------------
NET ASSET VALUE - END OF PERIOD $ 10.06 $ 10.23 $ 10.10 $ 10.30 $ 9.27
============ ========== ============ ========== ===============
Total return 1 2.95% 7.61% 1.38% 17.33% (4.69%)
Ratios (to average net assets) / Supplemental Data:
Expenses* 0.80%2 0.80% 0.80%2 0.80% 0.80%2
Net investment income* 5.33%2 5.46% 5.55%2 5.38% 5.40%2
Portfolio turnover 0% 58% 5% 35% 0%
NET ASSETS - END OF PERIOD
(000's omitted) $ 541 $ 718 $ 481 $ 438 $ 396
============ ========== ============ ========== ===============
</TABLE>
* The investment advisor did not impose its management fee and paid a portion
of the Fund's expenses. If these expenses had been incurred by the Fund, and
1994, 1995, and 1996 expenses limited to that allowed by state
securities law, the net investment income per share and the ratios would have
been as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Net investment income $ 0.096 $0.243 $ 0.309 $0.384 $0.184
Ratios (to average net assets):
Expenses 4.58%2 3.72% 2.50%2 2.50% 2.50%2
Net investment income 1.55%2 2.54% 3.85%2 3.68% 3.70%2
1 Represents aggregate total return for the period indicated.
2 Annualized.
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
Notes to Financial Statements (unaudited)
1. ORGANIZATION
Flexible Yield Series II (the "Fund") is a no-load diversified series of
Exeter Fund, Inc. (the"Corporation"), formerly known as Manning & Napier
Fund, Inc. The Corporation is organized in Maryland and is registered
under the Investment Company Act of 1940, as amended, as an open-end
management investment company.
The total authorized capital stock of the Corporation consists of one
billion shares of common stock each having a par value of $0.01. As of
April 30, 1998, 940 million shares have been designated in total among 19
series, of which 37.5 million have been designated as Flexible Yield
Series II Class A Common Stock.
2. SIGNIFICANT ACCOUNTING POLICIES
SECURITY VALUATION
Portfolio securities listed on an exchange are valued at the latest
quoted sales price of the exchange on which the security is traded most
extensively. Securities not traded on valuation date or securities
not listed on an exchange are valued at the latest quoted bid price.
Debt securities, including government bonds and mortgage backed
securities, will normally be valued on the basis of evaluated bid
prices provided by the Fund's pricing service.
Securities for which representative valuations or prices are not
available from the Fund's pricing service are valued at fair value as
determined in good faith by the Advisor under procedures established by
and under the general supervision and responsibility of the Funds Board of
Directors.
Short-term investments that mature in sixty days or less are valued at
amortized cost.
SECURITY TRANSACTIONS, INVESTMENT INCOME AND EXPENSES
Security transactions are accounted for on the date the securities are
purchased or sold. Dividend income is recorded on the ex-dividend date.
Interest income and expenses are recorded on an accrual basis.
Most expenses of the Corporation can be attributed to a specific fund.
Expenses which cannot be directly attributed are apportioned among the
funds in the Corporation.
FEDERAL INCOME TAXES
The Fund's policy is to comply with the provisions of the Internal
Revenue Code applicable to regulated investment companies. The Fund
is not subject to federal income or excise tax to the extent the Fund
distributes to shareholders each year its taxable income, including
any net realized gains on investments in accordance with requirements of
the Internal Revenue Code. Accordingly, no provision for federal income
tax or excise tax has been made in the financial statements.
9
<PAGE>
Notes to Financial Statements (unaudited)
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
FEDERAL INCOME TAXES (continued)
The Fund uses the identified cost method for determining realized gain or
loss on investments for both financial statement and federal income
tax reporting purposes.
DISTRIBUTION OF INCOME AND GAINS
Distributions to shareholders of net investment income are made
quarterly. Distributions are recorded on the ex-dividend date.
Distributions of net realized gains are distributed annually. An
additional distribution may be necessary to avoid taxation of the Fund.
The timing and characterization of certain income and capital gains are
determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principles. The differences may
be a result of deferral of certain losses, or character reclassification
between net income and net gains, or other required tax adjustments.
As a result, net investment income (loss) and net investment gain (loss) on
investment transactions for a reporting period may differ significantly
from distributions to shareholders during such period. As a result, the
Fund may periodically make reclassifications among its capital
accounts without impacting the Fund's net asset value.
MULTIPLE CLASSES OF SHARES
The Fund is authorized to issue five classes of shares (Class A, Class B,
Class C, Class D, and Class E). Currently, only Class A shares have been
issued. The five classes of shares differ in their respective
distribution and service fees. All shareholders bear the common expenses
of the Fund pro rata based on the average daily net assets of each class,
without distinction between share classes. Dividends are declared
separately for each class. No class has preferential dividend rights;
differences in per share dividend rates are generally due to differences
in separate class expenses.
OTHER
The preparation of the 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 the disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
3. TRANSACTIONS WITH AFFILIATES
The Fund has an investment advisory agreement with Manning & Napier
Advisors, Inc. (the Advisor), for which the Fund pays the Advisor a fee,
computed daily and payable monthly, at an annual rate of 0.45% of the
Fund's average daily net assets. The fee amounted to $1,274 for the six
months ended April 30, 1998.
10
<PAGE>
Notes to Financial Statements (unaudited)
3. TRANSACTIONS WITH AFFILIATES (continued)
Under the Fund's Investment Advisory Agreement (the "Agreement"),
personnel of the Advisor provide the Fund with advice and assistance in
the choice of investments and the execution of securities transactions,
and otherwise maintain the Fund's organization. The Advisor also provides
the Fund with necessary office space and portfolio accounting and
bookkeeping services. The salaries of all officers of the Fund and of all
Directors who are "affiliated persons" of the Fund or of the Advisor, and
all personnel of the Fund or of the Advisor performing services
relating to research, statistical and investment activities are paid
by the Advisor.
The Advisor has voluntarily agreed to waive its fee and, if necessary,
pay other expenses of the Fund in order to maintain total expenses for the
Fund at no more than 0.80% of average daily net assets each year.
Accordingly, the Advisor did not impose any of its fee and paid expenses
amounting to $9,436 for the six months ended April 30, 1998, which is
reflected as a reduction of expenses on the Statement of Operations. The
fee waiver and assumption of expenses by the Advisor is voluntary and may
be terminated at any time.
The Advisor also acts as the transfer, dividend paying and shareholder
servicing agent for the Fund. For these services, the Fund pays a fee
which is calculated as a percentage of the average daily net assets at an
annual rate of 0.024%; this fee amounted to $68 for the six months ended
April 30, 1998.
Manning & Napier Investor Services, Inc., a registered broker-dealer
affiliate of the Advisor, acts as distributor for the Fund's shares. The
services of Manning & Napier Investor Services, Inc. are provided at no
additional cost to the Fund.
The compensation of the non-affiliated Directors totaled $4,317 for the
six months ended April 30, 1998.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of United States Government securities, other than
short-term securities, were $0 and $167,928 respectively, for the six
months ended April 30, 1998.
11
<PAGE>
Notes to Financial Statements (unaudited)
5. CAPITAL STOCK TRANSACTIONS
Transactions in shares of Flexible Yield Series II Class A Common Stock
were:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
For the Six Months For the Year
Ended 4/30/98 Ended 10/31/97
------------------- ---------------
Shares Amount Shares Amount
------------------- ----------- --------------- ----------
Sold 47 $ 480 46,530 $ 461,689
Reinvested 2,419 24,091 3,696 36,561
Repurchased (18,876) (193,627) (27,676) (276,389)
------------------- ----------- --------------- ----------
Net increase(decrease) (16,410) ($169,056) 22,550 $ 221,861
=================== =========== =============== ==========
</TABLE>
The Advisor owned 15,390 shares on April 30, 1998 and 14,700 shares on
October 31, 1997.
6. FINANCIAL INSTRUMENTS
The Fund may trade in financial instruments with off-balance sheet risk
in the normal course of its investing activities to assist in managing
exposure to various market risks. These financial instruments include
written options and futures contracts and may involve, to a varying
degree, elements of risk in excess of the amounts recognized for financial
statement purposes. No such investments were held by the Fund on April 30,
1998.
12
<PAGE>
Exeter Fund, Inc.
Flexible Yield Series III
Semi-Annual Report
April 30, 1998
<PAGE>
Management Discussion and Analysis (unaudited)
Dear Shareholder:
Given the roller coaster action of the bond market over the past few years,
the last six months(October through April) have been unique in that interest
rates have remained remarkably steady. Yields on three month Treasury Bills
have hovered around 5%, yields on two year Treasury Notes started and ended
the period at about 5.6%, ten year notes saw their yields decline modestly,
and thirty year bonds, which began the period yielding slightly above 6%,
finished the quarter slightly lower, at 6%. Just as roller coasters may level
out for a moment to let riders catch their breath, the markets seem to have
hit an uneventful stretch. Even so, considering the somewhat conflicting
underlying economic fundamentals, it is safe to say that the tension level of
the market has started to rise.
On the economic front, strong consumer spending and business investment has
been countered by limited government spending and a deteriorating U.S. trade
balance. On the inflation front, accelerating monetary growth has raised
concerns that have so far been calmed by low Consumer Price Index growth and
declining Producer Prices.
The net outcome of the mixed signals has been relatively stable interest
rates. As was mentioned earlier, rates barely changed over the last six
months. But dont let the calm on the surface lull you into a false sense of
security. Just when the ride seems calm, the roller coaster is most likely to
surprise you.
The magic of roller coasters is that they allow you to experience sensations
that can be found nowhere else. However, rational people only ride them
because they come equipped with a restraining device to keep the rider from
flying out as they rocket you along the way. Investing also offers safety
devices, although they are less apparent. If an investor wants to survive the
quarterly and annual fluctuations that are part and parcel of the financial
markets, they have to invest based on an understanding of the long-term
1
<PAGE>
Management Discussion and Analysis (unaudited)
investment dynamics. The global economy, its impact on the level of
competition, and the disciplining force of the financial markets is what has
allowed us to smooth the ride for bond investors.
As always, it is a privilege to serve you.
Sincerely,
Exeter Asset Management
[graphic]
<pie chart>
Data for pie chart to follow:
<TABLE>
<CAPTION>
<S> <C>
Effective maturity - As of 4/30/98
Less than 1 Year 3%
1 - 2 Years 5%
2 - 3 Years 9%
3 - 5 Years 16%
5 - 7 Years 12%
7 - 10 Years 22%
More than 10 Years 33%
</TABLE>
[graphic]
<pie chart>
Data for pie chart to follow:
<TABLE>
<CAPTION>
<S> <C>
Portfolio Composition - As of 04/30/98
U.S. Treasury Securities 93%
Mortgage Backed Securities 4%
Cash & Equivalents 3%
</TABLE>
2
<PAGE>
Performance Update as of April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Exeter Fund, Inc. - Flexible Yield Series III
Total Return
-------------
Through Growth of $10,000 Average
04/30/98 Investment Cumulative Annual
- --------------------------------------------- ------------------ ------------- --------
One Year $ 11,310 13.10% 13.10%
Inception 2 $ 12,998 29.98% 6.19%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Merrill Lynch Corporate/Government Bond Index
Total Return
-------------
Through Growth of $10,000 Average
04/30/98 Investment Cumulative Annual
- --------------------------------------------- ------------------ ------------- --------
One Year $ 11,125 11.25% 11.25%
Inception 2 $ 13,293 32.93% 6.74%
</TABLE>
The value of a $10,000 investment in the
Exeter Fund, Inc. - Flexible Yield
Series III from its inception (12/20/93) to
present (4/30/98)as compared to the Merrill
Corporate/Government Bond Index. 1
[graphic]
<line chart>
Data for line chart to follow:
<TABLE>
<CAPTION>
<S> <C> <C>
Exeter Fund Flexible Yield Series III Merrill Lynch Corporate/Government Bond Index
Date
12/20/93 $10,000 $10,000
12/31/93 9,960 10,013
12/31/94 9,380 9,686
12/31/95 11,451 11,532
10/31/96 11,431 11,778
10/31/97 12,542 12,832
04/30/98 12,998 13,293
</TABLE>
1 The Merrill Lynch Corporate/Government Bond Index is a market
value weighted measure of approximately 6,068 corporate and government bonds.
The Index is comprised of investment grade securities with maturities greater
than one year. The Index returns assume reinvestment of coupons and, unlike
Fund returns, do not reflect any fees or expenses.
2 The Fund and Index performance are calculated from December 20, 1993, the
Fund's inception date. The Fund's performance is historical and may not be
indicative of future results.
3
<PAGE>
Investment Portfolio - April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
PRINCIPAL VALUE
AMOUNT (NOTE 2)
U.S. TREASURY SECURITIES - 93.2%
U.S. TREASURY BONDS - 26.9%
U.S. Treasury Bond, 5.625%, 2/15/2006 $ 70,000 $ 69,431
U.S. Treasury Bond, 7.25%, 8/15/2022 125,000 144,063
U.S. Treasury Bond, 6.875%, 8/15/2025 155,000 172,389
-----------
TOTAL U.S. TREASURY BONDS
(Identified Cost $331,484) 385,883
-----------
U.S. TREASURY NOTES - 60.0%
U.S. Treasury Note, 5.125%, 11/30/1998 35,000 34,934
U.S. Treasury Note, 6.00%, 6/30/1999 35,000 35,164
U.S. Treasury Note, 6.375%, 7/15/1999 15,000 15,136
U.S. Treasury Note, 7.75%, 11/30/1999 20,000 20,631
U.S. Treasury Note, 6.25%, 8/31/2000 30,000 30,413
U.S. Treasury Note, 5.375%, 2/15/2001 90,000 89,466
U.S. Treasury Note, 6.25%, 6/30/2002 50,000 51,031
U.S. Treasury Note, 6.375%, 8/15/2002 100,000 102,594
U.S. Treasury Note, 5.625%, 12/31/2002 75,000 74,836
U.S. Treasury Note, 5.875%, 2/15/2004 170,000 171,594
U.S. Treasury Note, 6.50%, 8/15/2005 55,000 57,423
U.S. Treasury Note, 6.50%, 10/15/2006 60,000 62,906
U.S. Treasury Note, 6.25%, 2/15/2007 50,000 51,687
U.S. Treasury Note, 6.625%, 5/15/2007 60,000 63,637
-----------
TOTAL U.S. TREASURY NOTES
(Identified Cost $832,576) 861,452
-----------
U.S. TREASURY STRIPPED SECURITIES- 6.3%
Interest Stripped - Principal Payment, 5/15/2014 98,000 37,325
Interest Stripped - Principal Payment, 8/15/2014 143,000 53,638
-----------
TOTAL U.S. TREASURY STRIPPED SECURITIES
(Identified Cost $89,695) 90,963
-----------
TOTAL U.S. TREASURY SECURITIES
(Identified Cost $1,253,755) 1,338,298
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
Investment Portfolio - April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
Principal Value
Amount/Shares (Note 2)
U.S. GOVERNMENT AGENCIES - 3.8%
MORTGAGE BACKED SECURITIES
GNMA, Pool #224199, 9.50%, 7/15/2018 $10,425 $ 11,276
GNMA, Pool #299164, 9.00%, 12/15/2020 10,938 11,711
GNMA, Pool #376345, 6.50%, 12/15/2023 30,995 30,715
----------
TOTAL U.S. GOVERNMENT AGENCIES
(Identified Cost $49,194) 53,702
----------
SHORT-TERM INVESTMENTS - 2.1%
Dreyfus Treasury Cash Management Fund
(Identified Cost $30,415) 30,415 30,415
----------
TOTAL INVESTMENTS - 99.1%
(Identified Cost $1,333,364) 1,422,415
OTHER ASSETS, LESS LIABILITIES - 0.9% 14,019
----------
NET ASSETS - 100% $1,436,434
==========
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
FEDERAL TAX INFORMATION:
At April 30, 1998, the net unrealized appreciation based on identified cost for
federal income tax purposes of $1,333,364 was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost $91,763
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value (2,712)
--------
UNREALIZED APPRECIATION - NET $89,051
========
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
Statement of Assets and Liabilities (unaudited)
<TABLE>
<CAPTION>
<S> <C>
APRIL 30, 1998
ASSETS:
Investments, at value (identified cost $1,333,364)(Note 2) $1,422,415
Interest receivable 18,168
Receivable from investment advisor (Note 3) 6,378
----------
TOTAL ASSETS 1,446,961
----------
LIABILITIES:
Accrued Directors' fees (Note 3) 3,395
Transfer agent fees payable (Note 3) 166
Audit fee payable 3,899
Other payables and accrued expenses 3,067
----------
TOTAL LIABILITIES 10,527
----------
NET ASSETS FOR 137,458 SHARES OUTSTANDING $1,436,434
==========
NET ASSETS CONSIST OF:
Capital stock $ 1,374
Additional paid-in-capital 1,324,437
Undistributed net investment income 11,586
Accumulated net realized gain on investments 9,986
Net unrealized appreciation on investments 89,051
----------
TOTAL NET ASSETS $1,436,434
==========
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
($1,436,434/137,458 shares) $ 10.45
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
Statement of Operations (unaudited)
<TABLE>
<CAPTION>
<S> <C>
FOR THE SIX MONTHS ENDED APRIL 30, 1998
INVESTMENT INCOME:
Interest $43,462
--------
EXPENSES:
Management fees (Note 3) 3,465
Directors' fees (Note 3) 4,317
Transfer agent fees (Note 3) 166
Audit fee 4,499
Registration and filing fees 2,108
Custodian fee 620
Miscellaneous 559
--------
Total Expenses 15,734
Less Reduction of Expenses (Note 3) (9,843)
--------
Net Expenses 5,891
--------
NET INVESTMENT INCOME 37,571
--------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments (identified cost basis) 10,054
Net change in unrealized appreciation on investments 2,458
--------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS 12,512
--------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $50,083
========
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<S> <C> <C>
For the
Six Months For the
Ended 4/30/98 Year Ended
(unaudited) 10/31/97
--------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 37,571 $ 72,788
Net realized gain on investments 10,054 1,966
Net change in unrealized appreciation on investments 2,458 48,709
--------------- ------------
Net increase (decrease) in net assets from operations 50,083 123,463
--------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2):
From net investment income (43,500) (73,237)
From net realized gain on investments (763) (4,865)
--------------- ------------
Total distributions to shareholders (44,263) (78,102)
--------------- ------------
CAPITAL STOCK ISSUED AND REPURCHASED:
Net increase in net assets from capital
share transactions (Note 5) 85,333 202,056
--------------- ------------
Net increase in net assets 91,153 247,417
NET ASSETS:
Beginning of period 1,345,281 1,097,864
--------------- ------------
END OF PERIOD (including undistributed net
investment income of $11,586 and $17,515 respectively) $ 1,436,434 $ 1,345,281
=============== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
For the
Six For the For the period
Months For the Ten Months For the For the 12/20/93
Ended Year Year Year (commencement
4/30/98 Ended Ended Ended Ended of operations)
(UNAUDITED) 10/31/97 10/31/96 12/31/95 12/31/94 to 12/31/93
------------ ---------- ------------ ---------- ---------- -----------
Per share data (for a share outstanding
throughout each period):
NET ASSET VALUE - BEGINNING OF PERIOD $ 10.41 $ 10.13 $ 10.51 $ 9.11 $ 9.95 $ 10.00
------------ ---------- ------------ ---------- ---------- -----------
Income from investment operations:
Net investment income 0.276 0.580 0.497 0.582 0.262 0.010
Net realized and unrealized gain (loss)
on investments 0.097 0.355 (0.532) 1.393 (0.841) (0.050)
------------ ---------- ------------ ---------- ---------- -----------
Total from investment operations 0.373 0.935 (0.035) 1.975 (0.579) (0.040)
------------ ---------- ------------ ---------- ---------- -----------
Less distributions to shareholders:
From net investment income (0.327) (0.610) (0.345) (0.575) (0.261) (0.010)
From net realized gain on investments (0.006) (0.045) -- -- -- --
------------ ---------- ------------ ---------- ---------- ----------
Total distributions to shareholders (0.333) (0.655) (0.345) (0.575) (0.261) (0.010)
------------ ---------- ------------ ---------- ---------- ----------
NET ASSET VALUE - END OF PERIOD $ 10.45 $ 10.41 $ 10.13 $ 10.51 $ 9.11 $ 9.95
============ ========== ============ ========== ========== =========
Total return 1 3.63% 9.73% (0.18%) 22.09% (5.83%) (0.40%)
Ratios (to average net assets)/Supplemental Data:
Expenses* 0.85%2 0.85% 0.85%2 0.85% 0.85% 0.85%2
Net investment income* 5.42%2 5.82% 5.98%2 6.13% 6.22% 3.85%2
Portfolio turnover 6% 51% 5% 6% 1% 0%
NET ASSETS - END OF PERIOD (000's omitted) $ 1,436 $ 1,345 $ 1,098 $ 1,159 $ 748 $ 75
============ ========== ============ ========== ========== =========
</TABLE>
* The investment advisor did not impose its management fee and paid a portion
of the Fund's expenses. If these expenses had been incurred by the Fund, and
had 1993, 1994 and 1996 expenses been limited to that allowed by state
securities law, the net investment income per share and the ratios would have
been as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net investment income $ 0.204 $0.437 $ 0.360 $0.429 $0.192 $ 0.010
Ratios(to average net assets):
Expenses 2.27%2 2.28% 2.50%2 2.46% 2.50% 2.50%2
Net investment income 4.00%2 4.39% 4.33%2 4.52% 4.57% 2.20%2
1 Represents aggregate total return for the period indicated.
2 Annualized.
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
Notes to Financial Statements (unaudited)
1. ORGANIZATION
Flexible Yield Series III (the "Fund") is a no-load diversified series of
Exeter Fund, Inc. (the "Corporation"), formerly known as Manning & Napier
Fund, Inc. The Corporation is organized in Maryland and is registered
under the Investment Company Act of 1940, as amended, as an open-end
management investment company.
The total authorized capital stock of the Corporation consists of one
billion shares of common stock each having a par value of $0.01. As of
April 30, 1998, 940 million shares have been designated in total among 19
series, of which 37.5 million have been designated as Flexible Yield
Series III Class A Common Stock.
2. SIGNIFICANT ACCOUNTING POLICIES
SECURITY VALUATION
Portfolio securities listed on an exchange are valued at the latest
quoted sales price of the exchange on which the security is traded most
extensively. Securities not traded on valuation date or securities not
listed on an exchange are valued at the latest quoted bid price.
Debt securities, including government bonds and mortgage backed
securities, will normally be valued on the basis of evaluated bid prices
provided by the Fund's pricing service.
Securities for which representative valuations or prices are not
available from the Fund's pricing service are valued at fair value as
determined in good faith by the Advisor under procedures established by
and under the general supervision and responsibility of the Fund's Board
of Directors.
Short-term investments that mature in sixty days or less are valued at
amortized cost.
SECURITY TRANSACTIONS, INVESTMENT INCOME AND EXPENSES
Security transactions are accounted for on the date the securities are
purchased or sold. Dividend income is recorded on the ex-dividend date.
Interest income and expenses are recorded on an accrual basis.
Most expenses of the Corporation can be attributed to a specific fund.
Expenses which cannot be directly attributed are apportioned among the
funds in the Corporation.
FEDERAL INCOME TAXES
The Fund's policy is to comply with the provisions of the Internal
Revenue Code applicable to regulated investment companies. The Fund is
not subject to federal income or excise tax to the extent the Fund
distributes to shareholders each year its taxable income, including any
net realized gains on investments in accordance with requirements of the
Internal Revenue Code. Accordingly, no provision for federal income tax or
excise tax has been made in the financial statements.
10
<PAGE>
Notes to Financial Statements (unaudited)
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
FEDERAL INCOME TAXES (continued)
The Fund uses the identified cost method for determining realized gain or
loss on investments for both financial statement and federal income tax
reporting purposes.
DISTRIBUTIONS OF INCOME AND GAINS
Distributions to shareholders of net investment income are made
quarterly. Distributions are recorded on the ex-dividend date.
Distributions of net realized gains are distributed annually. An
additional distribution may be necessary to avoid taxation of the Fund.
The timing and characterization of certain income and capital gains are
determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principles. The differences may
be a result of deferral of certain losses, character reclassification
between net income and net gains, or other tax adjustments. As a result,
net investment income (loss) and net investment gain (loss) on investment
transactions for a reporting period may differ significantly from
distributions to shareholders during such period. As a
result, the Fund may periodically make reclassifications among its
capital accounts without impacting the Fund's net asset value.
MULTIPLE CLASSES OF SHARES
The Fund is authorized to issue five classes of shares (Class A, Class B,
Class C, Class D, and Class E). Currently, only Class A shares have been
issued. The five classes of shares differ in their respective distribution
and service fees. All shareholders bear the common expenses of the Fund
pro rata based on the average daily net assets of each class, without
distinction between share classes. Dividends are declared separately for
each class. No class has preferential dividend rights; differences in per
share dividend rates are generally due to differences in separate class
expenses.
OTHER
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
the disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
3. TRANSACTIONS WITH AFFILIATES
The Fund has an investment advisory agreement with Manning & Napier
Advisors, Inc.(the "Advisor"), for which the Fund pays the Advisor a fee,
computed daily and payable monthly, at an annual rate of 0.50% of the
Fund's average daily net assets. The fee amounted to $3,465 for the
six months ended April 30, 1998.
11
<PAGE>
Notes to Financial Statements (unaudited)
3. TRANSACTIONS WITH AFFILIATES (continued)
Under the Fund's Investment Advisory Agreement (the "Agreement"),
personnel of the Advisor provide the Fund with advice and assistance in
the choice of investments and the execution of securities transactions,
and otherwise maintain the Fund's organization. The Advisor also provides
the Fund with necessary office space and portfolio accounting and
bookkeeping services. The salaries of all officers of the Fund and of all
Directors who are affiliated persons of the Fund or of the Advisor, and
all personnel of the Fund or of the Advisor performing services
relating to research, statistical and investment activities are paid
by the Advisor.
The Advisor has voluntarily agreed to waive its fee and, if necessary,
pay other expenses of the Fund in order to maintain total expenses for the
Fund at no more than 0.85% of average daily net assets each year.
Accordingly, the Advisor did not impose any of its fee and paid expenses
amounting to $6,378 for the six months ended April 30, 1998, which is
reflected as a reduction of expenses on the Statement of Operations. The
fee waiver and assumption of expenses by the Advisor is voluntary and may be
terminated at any time.
The Advisor also acts as the transfer, dividend paying and shareholder
servicing agent for the Fund. For these services, the Fund pays a fee
which is calculated as a percentage of the average daily net assets at an
annual rate of 0.024%; this fee amounted to $166 for the six months ended
April 30, 1998.
Manning & Napier Investor Services, Inc., a registered broker-dealer
affiliate of the Advisor, acts as distributor for the Fund's shares. The
services of Manning & Napier Investor Services, Inc. are provided at no
additional cost to the Fund.
The compensation of the non-affiliated Directors totaled $4,317 for the
six months ended April 30, 1998.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of United States Government securities, other than
short-term securities, were $164,953 and $74,071, respectively, for the
six months ended April 30, 1998.
12
<PAGE>
Notes to Financial Statements (unaudited)
5. CAPITAL STOCK TRANSACTIONS
Transactions in shares of Flexible Yield Series III Class A Common Stock
were:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
For the Six Months For the Year
Ended 4/30/98 Ended 10/31/97
------------------- ------------------
Shares Amount Shares Amount
------------------- ---------- ---------------- ----------
Sold 19,230 $ 201,730 76,364 $ 754,896
Reinvested 3,515 36,435 6,790 67,166
Repurchased (14,561) (152,832) (62,307) (620,006)
----------- ---------- ------------ -----------
Net increase 8,184 $ 85,333 20,847 $ 202,056
========= ========== ========== ===========
The Advisor owned 11,886 shares on April 30, 1998 and 11,513 shares on
October 31, 1997.
</TABLE>
6. FINANCIAL INSTRUMENTS
The Fund may trade in financial instruments with off-balance sheet risk
in the normal course of its investing activities to assist in managing
exposure to various market risks. These financial instruments include
written options and futures contracts and may involve, to a varying
degree, elements of risk in excess of the amounts recognized for financial
statement purposes. No such investments were held by the Fund on April 30,
1998.
13
<PAGE>
Exeter Fund, Inc.
Defensive Series
Semi-Annual Report
April 30, 1998
<PAGE>
Management Discussion and Analysis (unaudited)
Dear Shareholders:
While all seemed well for the stock market on the surface over the past few
months, a closer look reveals that underneath the still-rising price levels,
earnings growth had slowed and sales growth had virtually ground to a halt.
So, while inflation remains low and the economy continues to grow at a
moderate pace, market valuations for U.S. stocks remain very high, reflecting
all the good news and none of the potential risk in the current environment.
As a result of what is happening with the U.S. economy and stock market, we
have kept a significant portion of the stock in the portfolio invested in
foreign companies at more attractive valuations. This also comes at a time
when other countries around the world are improving their competitive
advantages relative to the U.S., due in part to their cost-cutting efforts and
to currency movements. On the domestic side, we have continued to look for
stocks that are less likely to be hit as hard by a correction and that can
lead in a recovery, basing investments on the fundamentals rather than the
fanfare.
On the bond side, the market gained some ground over the period with slightly
falling interest rates, but held a relatively cautious stance overall. The
yield on the U.S. Treasury bond dropped 20 basis points (0.20%) from where it
was six months ago, with most of the ground gained during the last couple of
months in 1997. The fixed income portion of the portfolio still maintains a
focus on high quality, long-term securities, while the low-inflation
globally-competitive environment continues to provide a positive backdrop for
bonds.
1
<PAGE>
Management Discussion and Analysis (unaudited)
In conclusion, as we continue to witness the exuberance in the stock market,
we maintain our philosophy of patient long-term investing and managing risk
based on our long-term overview. Investment selections are being made
cautiously, focusing on their prospects of weathering a long period of
potentially mediocre market returns, or recovering in the event of a
correction.
As always, it is a privilege to serve you.
Sincerely,
Exeter Asset Management
[graphic]
<pie chart>
Data for pie chart to follow:
<TABLE>
<CAPTION>
<S> <C>
Portfolio Composition - As of 4/30/98
Bonds 75%
Stocks 14%
Cash & Equivalents 11%
</TABLE>
2
<PAGE>
Performance Update as of April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Exeter Fund, Inc. - Defensive Series
Total Return
-------------
Through Growth of $10,000 Average
04/30/98 Investment Cumulative Annual
- ------------------------------------ ------------------ ------------- --------
One Year $ 11,127 11.27% 11.27%
Inception2 $ 11,910 19.10% 7.25%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Lehman Brothers Intermediate Bond Index
Total Return
-------------
Through Growth of $10,000 Average
04/30/98 Investment Cumulative Annual
- --------------------------------------- ------------------ ------------- --------
One Year $ 10,894 8.94% 8.94%
Inception2 $ 11,728 17.28% 6.59%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
15-85 Blended Index
Total Return
-------------
Through Growth of $10,000 Average
04/30/98 Investment Cumulative Annual
- ------------------- ------------------ ------------- --------
One Year $ 11,356 13.56% 13.56%
Inception2 $ 12,768 27.68% 10.27%
</TABLE>
The value of a $10,000 investment in the
Exeter Fund, Inc. - Defensive
Series from its inception (11/1/95) to present
(4/30/98) as compared to the Lehman
Brothers Intermediate Bond Index and a
15-85 Blended Index. 1
[graphic]
<line chart>
Data for line chart to follow:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Exeter Fund Lehman Brothers
Defensive Series Intermediate Bond Index 15-85 Blended Index
11/01/95 $10,000 $10,000 $10,000
04/30/96 10,116 10,116 10,301
10/31/96 10,494 10,581 10,847
04/30/97 10,704 10,765 11,243
10/31/97 11,411 11,374 12,052
04/30/98 11,910 11,728 12,768
</TABLE>
1 The Lehman Brothers Intermediate Bond Index is a market value weighted
measure of approximately 4,080 corporate and government securities. The Index
is comprised of investment grade securities with maturities greater than one
year but less than ten years. The 15-85 Blended Index is 15% Standard & Poor's
(S&P) 500 Total Return Index and 85% Lehman Brothers Intermediate Bond Index.
The S&P 500 Total Return Index is an unmanaged capitalization-weighted measure
of 500 widely held common stocks listed on the New York Stock Exchange,
American Stock Exchange, and Over-the-Counter market. Both Indices returns
assume reinvestment of income and, unlike Fund returns, do not reflect any fees
or expenses.
2 Performance numbers for the Fund and Indices are calculated from November 1,
1995, the Fund's inception date. The Fund's performance is historical and may
not be indicative of future results.
3
<PAGE>
Investment Portfolio - April 30 ,1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
VALUE
SHARES (NOTE 2)
COMMON STOCK - 13.94%
AGRICULTURAL PRODUCTION - 0.02%
Sylvan, Inc.* 50 $ 756
---------
AMUSEMENT & RECREATION SERVICES - 0.24%
Resorts World Bhd. - ADR (Note 7) 1,025 9,866
---------
APPAREL - 0.03%
Novel Denim Holdings, Ltd.* 50 1,263
---------
BUSINESS SERVICES - 0.40%
National Data Corp. 400 16,325
---------
CHEMICAL & ALLIED PRODUCTS - 0.61%
Cypress Bioscience, Inc.* 100 344
Pharmacia & Upjohn, Inc. 575 24,186
PT Tri Polyta Indonesia - ADR (Note 7) 175 394
---------
24,924
---------
COMPUTER EQUIPMENT - 0.51%
Bell & Howell Co.* 50 1,381
International Game Technology 700 19,469
---------
20,850
---------
COMPUTER INTEGRATED SYSTEMS DESIGN - 0.03%
Apache Medical Systems, Inc.* 100 312
DAOU Systems, Inc.* 50 900
---------
1,212
---------
CRUDE PETROLEUM & NATURAL GAS - 1.77%
Petroleo Brasileiro - S.A. (Petrobras) -
ADR (Note 7) 1,675 42,387
Union Texas Petroleum Holdings, Inc. 1,475 29,777
---------
72,164
---------
DIAMONDS - 0.71%
De Beers Centenary AG - ADR (Note 7) 1,125 28,969
---------
DISTRIBUTION - WHOLESALE - 0.33%
Philip Services Corp.* 125 945
Unisource Worldwide, Inc. 1,000 12,688
---------
13,633
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
Investment Portfolio - April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
Value
Shares (Note2)
ELECTRONICS & ELECTRICAL EQUIPMENT - 1.03%
Firearms Training Systems, Inc.* 100 $ 875
Harman International Industries, Inc. 25 1,075
Motorola, Inc. 700 38,938
Scientific-Atlanta, Inc. 25 597
Ultralife Batteries, Inc.* 50 628
------
42,113
------
FOOD & BEVERAGES - 0.48%
Diageo plc- ADR (Note 7) 404 19,417
------
GLASS PRODUCTS - 0.02%
Libbey, Inc. 25 944
------
HEALTH SERVICES - 0.69%
MedPartners, Inc.* 2,750 28,187
------
INDUSTRIAL & COMMERCIAL MACHINERY - 0.48%
Comfort Systems USA, Inc.* 50 1,169
NN Ball & Roller, Inc. 100 1,238
York International Corp. 350 17,259
------
19,666
------
MOTION PICTURE PRODUCTION - 0.01%
Group AB SA - ADR* (Note 7) 75 445
------
PAPER MILLS - 0.02%
Schweitzer-Mauduit International, Inc. 25 831
------
PRIMARY METAL INDUSTRIES - 0.06%
Gibraltar Steel Corp.* 50 1,200
Wolverine Tube Inc.* 25 984
------
2,184
------
PRINTING & PUBLISHING - 0.02%
Scholastic Corp.* 25 931
------
RESTAURANTS - 0.84%
McDonald's Corp. 550 34,031
------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
Investment Portfolio - April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
Value
Shares (Note2)
RETAIL - 0.17%
APPAREL & ACCESSORY STORES - 0.03%
Loehmanns, Inc.* 75 $ 319
Talbots, Inc. 50 950
-------
1,269
-------
SPECIALTY STORES - 0.14%
Hancock Fabrics, Inc. 325 4,834
Zale Corp.* 25 753
-------
5,587
-------
6,856
-------
SOFTWARE - 0.04%
Broderbund Software, Inc.* 50 894
HCIA, Inc.* 75 839
-------
1,733
-------
TECHNICAL INSTRUMENTS & SUPPLIES - 2.82%
CardioGenesis Corp.* 25 159
Eastman Kodak Co. 1,000 72,188
Millipore Corp.* 1,200 41,400
Sola International Inc.* 25 1,063
-------
114,810
-------
TELECOMMUNICATION SERVICE- 1.36%
Compania Anonima Nacional Telefonos de
Venezuela - (CANTV) ADR (Note 7) 600 20,100
Telecomunicacoes Brasileiras S.A. (Telebras) -
ADR (Note 7) 290 35,326
-------
55,426
-------
TEXTILE MILL PRODUCTS - 0.02%
Albany International Corp. - Class A 25 712
-------
TRANSPORTATION - 1.22%
EQUIPMENT - 0.05%
Federal Signal Corp. 50 1,072
Miller Industries, Inc.* 100 787
-------
1,859
-------
RAILROAD - 1.16%
Canadian National Railway Co. - ADR (Note 7) 725 47,170
-------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
Investment Portfolio - April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
Shares/Principal Value
Amount (Note 2)
TRANSPORTATION (continued)
WATER - 0.02%
Trico Marine Services, Inc.* 25 $ 566
---------
49,595
---------
TOTAL COMMON STOCK
(Identified Cost $552,148) 567,843
---------
U.S. TREASURY SECURITIES - 67.13%
U.S. TREASURY BONDS - 22.60%
U.S. Treasury Bond, 6.50%, 5/15/2005 $625,000 652,149
U.S. Treasury Bond, 5.50%, 2/15/2008 35,000 34,541
U.S. Treasury Bond, 6.875%, 8/15/2025 210,000 233,559
---------
TOTAL U.S. TREASURY BONDS
(Identified Cost $898,325) 920,249
---------
U.S. TREASURY NOTES - 44.53%
U.S. Treasury Note, 6.00%, 8/15/1999 295,000 296,475
U.S. Treasury Note, 6.125%, 9/30/2000 660,000 667,425
U.S. Treasury Bond, 5.625%, 2/28/2001 185,000 185,000
U.S. Treasury Note, 6.25%, 6/30/2002 150,000 153,094
U.S. Treasury Note, 5.875%, 9/30/2002 275,000 276,976
U.S. Treasury Note, 6.25%, 2/15/2003 155,000 158,633
U.S. Treasury Note, 5.875%, 2/14/2004 75,000 75,703
---------
TOTAL U.S. TREASURY NOTES
(Identified Cost $1,805,458) 1,813,306
---------
TOTAL U.S. TREASURY SECURITIES
(Identified Cost $2,703,783) 2,733,555
---------
U.S. GOVERNMENT AGENCIES - 7.76%
MORTGAGE BACKED SECURITIES
GNMA, Pool #365225 , 9.00%, 11/15/2024 45,598 48,819
GNMA, Pool #398655, 6.50%, 5/15/2026 46,754 46,331
GNMA, Pool #452826, 9.00%, 1/15/2028 206,221 220,786
---------
TOTAL U.S. GOVERNMENT AGENCIES
(Identified Cost $315,822) 315,936
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
Investment Portfolio - April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
Principal Value
Amount/Shares (Note 2)
SHORT-TERM INVESTMENTS - 9.80%
U.S. Treasury Bill, 5/14/1998 $ 150,000 $ 149,738
U.S. Treasury Bill, 5/28/1998 100,000 99,634
Dreyfus Treasury Cash Management Fund 149,762 149,762
----------
TOTAL SHORT-TERM INVESTMENTS
(Identified Cost $399,134) 399,134
----------
TOTAL INVESTMENTS - 98.63%
(Identified Cost $3,970,887) 4,016,468
OTHER ASSETS, LESS LIABILITIES - 1.37% 55,991
----------
NET ASSETS - 100% $4,072,459
==========
</TABLE>
*Non-income producing security
<TABLE>
<CAPTION>
<S> <C>
FEDERAL TAX INFORMATION:
At April 30, 1998, the net unrealized appreciation based on identified cost for
federal income tax purposes of $3,970,887 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of
value over tax cost $ 68,412
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax
cost over value (22,831)
---------
UNREALIZED APPRECIATION - NET $ 45,581
=========
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
Statement of Assets and Liabilities (unaudited)
<TABLE>
<CAPTION>
<S> <C>
APRIL 30, 1998
ASSETS:
Investments, at value (identified cost $3,970,887)(Note 2) $4,016,468
Cash 3,404
Interest receivable 40,540
Receivable for securities sold 18,709
Dividends receivable 2,381
Receivable from investment advisor (Note 3) 1,945
----------
TOTAL ASSETS 4,083,447
----------
LIABILITIES:
Accrued Directors' fees (Note 3) 3,395
Transfer agent fees payable (Note 3) 312
Audit fee payable 3,374
Other payables and accrued expenses 3,907
----------
TOTAL LIABILITIES 10,988
----------
NET ASSETS FOR 379,103 SHARES OUTSTANDING $4,072,459
==========
NET ASSETS CONSIST OF:
Capital stock $ 3,791
Additional paid-in-capital 3,957,534
Undistributed net investment income 43,107
Accumulated net realized gain on investments 22,446
Net unrealized appreciation on investments 45,581
----------
TOTAL NET ASSETS $4,072,459
==========
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
($4,072,459/379,103 shares) $ 10.74
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
Statement of Operations (unaudited)
<TABLE>
<CAPTION>
<S> <C>
FOR THE SIX MONTHS ENDED APRIL 30, 1998
INVESTMENT INCOME:
Interest $ 62,802
Dividends 6,661
---------
Total Investment Income 69,463
---------
EXPENSES:
Management fees (Note 3) 10,405
Directors' fees (Note 3) 4,317
Transfer agent fees (Note 3) 312
Audit fee 4,992
Registration and filing fees 2,728
Custodian fee 1,984
Miscellaneous 619
---------
Total Expenses 25,357
Less Reduction of Expenses (Note 3) (12,350)
---------
Net Expenses 13,007
---------
NET INVESTMENT INCOME 56,456
---------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments (identified cost basis) 29,216
Net change in unrealized appreciation on investments 19,601
---------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS 48,817
---------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $105,273
=========
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
<S> <C> <C>
For the Six
Months
Ended For the
4/30/98 Year Ended
(unaudited) 10/31/97
------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 56,456 $ 62,693
Net realized gain on investments 29,216 27,310
Net change in unrealized appreciation on investments 19,601 27,116
------------- ------------
Net increase in net assets from operations 105,273 117,119
------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2):
From net investment income (45,239) (41,851)
From net realized gain on investments (34,078) (6,511)
-------------- ------------
Total distribution to shareholders (79,317) (48,362)
-------------- ------------
CAPITAL STOCK ISSUED AND REPURCHASED:
Net increase in net assets from capital share
transactions (Note 5) 2,282,467 950,074
------------- ------------
Net increase in net assets 2,308,423 1,018,831
NET ASSETS:
Beginning of period 1,764,036 745,205
------------- ------------
END OF PERIOD (including undistributed net investment
income of $43,107 and $31,890, respectively) $ 4,072,459 $ 1,764,036
============= ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
<S> <C> <C> <C>
For the Six
Months Ended For the For the
4/30/98 Year Ended Year Ended
(unaudited) 10/31/97 10/31/96
-------------- ------------ ------------
Per share data (for a share outstanding throughout
each period):
NET ASSET VALUE - BEGINNING OF PERIOD $ 10.71 $ 10.29 $ 10.00
-------------- ------------ ------------
Income from investment operations:
Net investment income 0.162 0.426 0.349
Net realized and unrealized gain on investments 0.292 0.447 0.137
-------------- ------------ ------------
Total from investment operations 0.454 0.873 0.486
-------------- ------------ ------------
Less distributions to shareholders:
From net investment income (0.242) (0.385) (0.196)
From net realized gain on investments (0.182) (0.068) --
-------------- ------------ ------------
Total distribution to shareholders (0.424) (0.453) (0.196)
-------------- ------------ ------------
NET ASSET VALUE - END OF PERIOD $ 10.74 $ 10.71 $ 10.29
============== ============ ============
Total return1 4.38% 8.74% 4.94%
Ratios (to average net assets) / Supplemental Data:
Expenses* 1.00%2 1.00% 1.00%
Net investment income* 4.34%2 4.45% 4.26%
Portfolio turnover 9% 60% 30%
Average commission rate paid $ 0.0522 $ 0.0590 $ 0.0691
NET ASSETS - END OF PERIOD (000's omitted) $ 4,072 $ 1,764 $ 745
============== ============ ============
</TABLE>
*The investment advisor did not impose its management fee and paid a portion
of the Fund's expenses. If these expenses had been incurred by the Fund, and
had 1996 expenses been limited to that allowed by state securities law, the
net investment income per share and the ratios would have been as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Net investment income $ 0.127 $0.274 $0.226
Ratios (to average net assets):
Expenses 1.95%2 2.59% 2.50%
Net investment income 3.39%2 2.86% 2.76%
1 Represents aggregate total return for the period indicated.
2 Annualized.
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
Notes to Financial Statements (unaudited)
1. ORGANIZATION
Defensive Series (the "Fund") is a no-load diversified series of Exeter
Fund, Inc. (the "Corporation"), formerly known as Manning & Napier Fund,
Inc. The Corporation is organized in Maryland and is registered under
the Investment Company Act of 1940, as amended, as an open-end management
investment company.
The total authorized capital stock of the Corporation consists of one
billion shares of common stock each having a par value of $0.01. As of
April 30, 1998, 940 million shares have been designated in total among 19
series, of which 37.5 million have been designated as Defensive Series
Class A Common Stock.
2. SIGNIFICANT ACCOUNTING POLICIES
SECURITY VALUATION
Portfolio securities, including domestic equities, foreign equities,
options and corporate bonds, listed on an exchange are valued at the
latest quoted sales price of the exchange on which the security is traded
most extensively. Securities not traded on valuation date or securities
not listed on an exchange are valued at the latest quoted bid price.
Debt securities, including government bonds and mortgage backed
securities, will normally be valued on the basis of evaluated bid prices
provided by the Fund's pricing service.
Securities for which representative valuations or prices are not
available from the Fund's pricing service are valued at fair value as
determined in good faith by the Advisor under procedures established by
and under the general supervision and responsibility of the Fund's Board
of Directors.
Short-term investments that mature in sixty days or less are valued at
amortized cost.
SECURITY TRANSACTIONS, INVESTMENT INCOME AND EXPENSES
Security transactions are accounted for on the date the securities are
purchased or sold. Dividend income is recorded on the ex-dividend date.
Interest income and expenses are recorded on an accrual basis.
Most expenses of the Corporation can be attributed to a specific fund.
Expenses which cannot be directly attributed are apportioned among the
funds in the Corporation.
FEDERAL INCOME TAXES
The Fund's policy is to comply with the provisions of the Internal
Revenue Code applicable to regulated investment companies. The Fund is
not subject to federal income or excise tax to the extent the Fund
distributes to shareholders each year its taxable income, including any
net realized gains on investments in accordance with requirements of the
Internal Revenue Code. Accordingly, no provision for federal income tax
or excise tax has been made in the financial statements.
13
<PAGE>
Notes to Financial Statements (unaudited)
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
FEDERAL INCOME TAXES (continued)
The Fund uses the identified cost method for determining realized gain or
loss on investments for both financial statement and federal income tax
reporting purposes.
DISTRIBUTIONS OF INCOME AND GAINS
Distributions to shareholders of net investment income are made
semi-annually. Distributions re recorded on the ex-dividend date.
Distributions of net realized gains are distributed annually. An
additional distribution may be necessary to avoid taxation of the Fund.
The timing and characterization of certain income and capital gains are
determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principles. The differences may
be a result of deferral of certain losses, foreign denominated
investments, character reclassification between net income and net gains,
or other tax adjustments. As a result, net investment income (loss) and
net investment gain (loss) on investment transactions for a reporting
period may differ significantly from distributions to shareholders during
such period. As a result, the Fund may periodically make
reclassifications among its capital accounts without impacting the Fund's
net asset value.
MULTIPLE CLASSES OF SHARES OF BENEFICIAL INTEREST
The Fund is authorized to issue five classes of shares (Class A, Class B,
Class C, Class D, and Class E shares). Currently, only Class A shares
have been issued. The five classes of shares differ in their respective
distribution and service fees. All shareholders bear the common expenses
of the Fund pro rata based on the average daily net assets of each class,
without distinction between share classes. Dividends are declared
separately for each class. No class has preferential dividend rights;
differences in per share dividend rates are generally due to differences
in separate class expenses.
OTHER
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
the disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
3. TRANSACTIONS WITH AFFILIATES
The Fund has an investment advisory agreement with Manning & Napier
Advisors, Inc. (the Advisor), for which the Fund pays the Advisor a fee,
computed daily and payable monthly, at an annual rate of 0.8% of the
Fund's average daily net assets. The fee amounted to $10,405 for the six
months ended April 30, 1998.
14
<PAGE>
Notes to Financial Statements (unaudited)
3. TRANSACTIONS WITH AFFILIATES (continued)
Under the Fund's Investment Advisory Agreement (the "Agreement"),
personnel of the Advisor provide the Fund with advice and assistance in
the choice of investments and the execution of securities transactions,
and otherwise maintain the Fund's organization. The Advisor also provides
the Fund with necessary office space and portfolio accounting and
bookkeeping services. The salaries of all officers of the Fund and of all
Directors who are "affiliated persons" of the Fund or of the Advisor, and
all personnel of the Fund or of the Advisor performing services
relating to research, statistical and investment activities are paid
by the Advisor.
The Advisor has voluntarily agreed to waive its fee and, if necessary,
pay other expenses of the Fund in order to maintain total expenses for the
Fund at no more than 1.0% of average daily net assets each year.
Accordingly, the Advisor did not impose any of its fee and paid expenses
amounting to $1,945 for the six months ended April 30, 1998, which is
reflected as a reduction of expenses on the Statement of Operations. The
fee waiver and assumption of expenses by the Advisor is voluntary and may
be terminated at any time.
The Advisor also acts as the transfer, dividend paying and shareholder
servicing agent for the Fund. For these services, the Fund pays a fee
which is calculated as a percentage of the average daily net assets at an
annual rate of 0.024%; this fee amounted to $312 for the six months ended
April 30, 1998.
Manning & Napier Investor Services, Inc., a registered broker-dealer
affiliate of the Advisor, acts as distributor for the Fund's shares. The
services of Manning & Napier Investor Services, Inc. are provided at no
additional cost to the Fund.
The compensation of the non-affiliated Directors totaled $4,317 for the
six months ended April 30, 1998.
4. PURCHASES AND SALES OF SECURITIES
For the six months ended April 30, 1998, purchases and sales of
securities, other than United States Government securities and short-term
securities, were $359,717 and $124,432, respectively. Purchases and sales
of United States Government securities were $1,741,963 and $95,392,
respectively.
15
<PAGE>
Notes to Financial Statements (unaudited)
5. CAPITAL STOCK TRANSACTIONS
Transactions in shares of Defensive Series Class A Common Stock were:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
For the Six Months For the Year
Ended 4/30/98 Ended 10/31/97
------------------- ---------------
Shares Amount Shares Amount
------------------- ----------- ------------- -----------
Sold 225,775 $2,405,226 166,901 $1,715,330
Reinvested 7,641 79,318 4,719 48,362
Repurchased (18,962) (202,077) (79,413) (813,618)
--------------- ----------- --------------- -----------
Net Increase 214,454 $2,282,467 92,207 950,074
=================== =========== =============== ===========
The Advisor owned 35,296 shares on April 30, 1998 and 33,910 shares on
October 31, 1997.
</TABLE>
6. FINANCIAL INSTRUMENTS
The Fund may trade in financial instruments with off-balance sheet risk
in the normal course of its investing activities to assist in managing
exposure to various market risks. These financial instruments include
written options, forward foreign currency exchange contracts, and futures
contracts and may involve, to a varying degree, elements of risk in excess
of the amounts recognized for financial statement purposes. No such
investments were held by the Fund on April 30, 1998.
7. FOREIGN SECURITIES
Investing in securities of foreign companies and foreign governments
involves special risks and considerations not typically associated with
investing in securities of domestic companies and the United States
Government. These risks include revaluation of currencies and potential
adverse political and economic developments. Moreover, securities of
foreign companies and foreign governments may be less liquid and their
prices more volatile that those of securities of comparable domestic
companies and the United States Government.
16
<PAGE>
Exeter Fund, Inc.
Maximum Horizon Series
Semi-Annual Report
April 30, 1998
<PAGE>
Manangement Discussion and Analysis (unaudited)
Dear Shareholders:
While all seemed well for the stock market on the surface over the past few
months, a closer look reveals that underneath the still-rising price levels,
earnings growth had slowed and sales growth had virtually ground to a halt.
So, while inflation remains low and the economy continues to grow at a
moderate pace, market valuations for U.S. stocks remain very high, reflecting
all the good news and none of the potential risk in the current environment.
As a result of what is happening with the U.S. economy and stock market, we
have kept a significant portion of the stock in the portfolio invested in
foreign companies at more attractive valuations. This also comes at a time
when other countries around the world are improving their competitive
advantages relative to the U.S., due in part to their cost-cutting efforts and
to currency movements. On the domestic side, we have continued to look for
stocks that are less likely to be hit as hard by a correction and that can
lead in a recovery, basing investments on the fundamentals rather than the
fanfare.
On the bond side, the market gained some ground over the period with slightly
falling interest rates, but held a relatively cautious stance overall. The
yield on the U.S. Treasury bond dropped 20 basis points (0.20%) from where it
was six months ago, with most of the ground gained during the last couple of
months in 1997. The fixed income portion of the portfolio still maintains a
focus on high quality, long-term securities, while the low-inflation
globally-competitive environment continues to provide a positive backdrop for
bonds.
1
<PAGE>
Manangement Discussion and Analysis (unaudited)
In conclusion, as we continue to witness the exuberance in the stock market,
we maintain our philosophy of patient long-term investing and managing risk
based on our long-term overview. Investment selections are being made
cautiously, focusing on their prospects of weathering a long period of
potentially mediocre market returns, or recovering in the event of a
correction.
As always, it is a privilege to serve you.
Sincerely,
Exeter Asset Management
[graphic]
<pie chart>
Data for pie chart to follow:
<TABLE>
<CAPTION>
<S> <C>
Portfolio Composition - As of 4/30/98
Stocks 88%
Bonds 6%
Cash & Equivalents 6%
</TABLE>
2
<PAGE>
Performance Update as of April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Exeter Fund, Inc. - Maximum Horizon Series
Total Return
-------------
Through Growth of $10,000 Average
04/30/98 Investment Cumulative Annual
- ------------------------------------------ ------------------ ------------- --------
One Year $ 13,000 30.00% 30.00%
Inception2 $ 16,365 63.65% 21.79%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Standard & Poor's 500 Total Return Index
Total Return
-------------
Through Growth of $10,000 Average
04/30/98 Investment Cumulative Annual
- ---------------------------------------- ------------------ ------------- --------
One Year $ 14,104 41.04% 41.04%
Inception2 $ 20,076 100.76% 32.17%
</TABLE>
The value of a $10,000 investment in the
Exeter Fund, Inc. - Maximum
Horizon Series from its inception (11/1/95)
to present (4/30/98) as compared to the
Standard & Poor's (S&P) 500 Total Return
Index. 1
[graphic]
<line chart>
Data for line chart to follow:
<TABLE>
<CAPTION>
<C> <S> <C>
Exeter Fund Maximum Horizon Series Standard & Poors Total Return Index
11/01/95 10,000 10,000
04/30/96 10,753 11,376
10/31/96 11,521 12,408
04/30/97 12,589 14,233
10/31/97 14,604 16,392
04/30/98 16,365 20,076
</TABLE>
1 The Standard & Poor's (S&P) 500 Total Return Index is an unmanaged
capitalization-weighted measure of approximately 500 widely held common stocks
listed on the New York Stock Exchange, American Stock Exchange, and
Over-the-Counter market. The Index returns assume reinvestment of income and,
unlike Fund returns, do not reflect any fees or expenses.
2 The Fund and Index performance are calculated from November 1, 1995, the
Fund's inception date. The Fund's performance is historical and may not be
indicative of future results.
3
<PAGE>
Investment Portfolio - April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
VALUE
SHARES (NOTE 2)
------ -----------
COMMON STOCK - 87.99%
AGRICULTURAL PRODUCTION - 0.09%
Sylvan, Inc.* 1,050 $ 15,881
-----------
AMUSEMENT & RECREATION SERVICES - 0.90%
Resorts World Bhd - ADR (Note 7) 17,050 164,116
-----------
APPAREL - 0.14%
Novel Denim Holdings Ltd.* 1,000 25,250
-----------
BUSINESS SERVICES - 2.26%
National Data Corp. 10,100 412,206
-----------
CHEMICAL & ALLIED PRODUCTS - 8.37%
Celltech plc* (United Kingdom) (Note 7) 86,350 495,852
Cypress Bioscience, Inc.* 2,600 8,938
Mallinckrodt, Inc. 4,475 144,319
Orion-Yhtyma OY - B Shares (Finland) (Note 7) 700 21,745
Pharmacia & Upjohn, Inc. 10,925 459,533
PT Tri Polyta Indonesia - ADR (Note 7) 4,700 10,575
R.P. Scherer Corp.* 5,275 385,075
-----------
1,526,037
-----------
COMPUTER EQUIPMENT - 8.55%
Bell & Howell Co.* 29,125 804,578
International Game Technology 27,150 755,109
-----------
1,559,687
-----------
COMPUTER INTEGRATED SYSTEMS DESIGN - 3.63%
Apache Medical Systems, Inc.* 4,600 14,375
DAOU Systems, Inc.* 1,400 25,200
HBO & Co. 10,400 622,050
-----------
661,625
-----------
CRUDE PETROLEUM & NATURAL GAS - 8.85%
Petroleo Brasileiro S.A. (Petrobras) -
ADR (Note 7) 27,700 700,962
Union Texas Petroleum Holdings, Inc. 35,850 723,722
YPF Sociedad Anonima - ADR (Note 7) 5,425 189,197
-----------
1,613,881
-----------
DIAMONDS - 1.14%
De Beers Centenary AG - ADR (Note 7) 8,045 207,159
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
Invesment Portfolio - April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
VALUE
SHARES (NOTE 2)
------ -----------
DISTRIBUTION - WHOLESALE - 1.82%
Philip Services Corp.* 3,100 $ 23,444
Unisource Worldwide, Inc. 24,365 309,131
-------
332,575
-------
ELECTRONICS & ELECTRICAL EQUIPMENT - 4.73%
Firearms Training Systems, Inc.* 2,350 20,563
Harman International Industries, Inc. 525 22,575
Motorola, Inc. 14,145 786,816
Scientfic-Atlanta, Inc. 800 19,100
Ultralife Batteries, Inc.* 1,200 15,075
-------
864,129
-------
FOOD & BEVERAGES - 3.29%
Allied Domecq plc - ADR (Note 7) 36,800 379,636
Unilever plc - ADR (Note 7) 5,200 219,700
-------
599,336
-------
GLASS PRODUCTS - 2.19%
Corning, Inc. 9,700 388,000
Libbey, Inc. 300 11,325
-------
399,325
-------
HEALTH SERVICES - 3.87%
MedPartners, Inc.* 68,940 706,635
-------
HOTELS & LODGING PLACES - 1.60%
CDL Hotels International Ltd. - ADR (Note 7) 95,200 291,883
-------
INDUSTRIAL & COMMERCIAL MACHINERY - 1.80%
Comfort Systems USA, Inc.* 975 22,791
NN Ball & Roller, Inc. 2,375 29,391
York International Corp. 5,615 276,890
-------
329,072
-------
MOTION PICTURE PRODUCTION - 0.07%
Group AB SA - ADR* (Note 7) 2,100 12,469
-------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
Invesment Portfolio - April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
VALUE
SHARES (NOTE 2)
------ -----------
PAPER MILLS - 9.53%
Aracruz Celulose S.A. - ADR (Note 7) 46,600 $ 733,950
Asia Pulp & Paper Co. Ltd. - ADR (Note 7) 41,200 599,975
Kimberly-Clark Corp. 7,375 374,281
Schweitzer-Mauduit International, Inc. 875 29,094
---------
1,737,300
---------
PRIMARY METAL INDUSTRIES - 0.26%
Gibraltar Steel Corp.* 1,300 31,200
Wolverine Tube Inc.* 425 16,734
---------
47,934
---------
PRINTING & PUBLISHING - 0.18%
Scholastic Corp.* 900 33,525
---------
RESTAURANTS - 4.91%
McDonald's Corp. 9,585 593,072
Viad Corp. 11,700 302,006
---------
. 895,078
---------
RETAIL - 0.73%
APPAREL & ACCESSORY STORES - 0.14%
Loehmanns, Inc.* 1,750 7,438
Talbots, Inc. 950 18,050
---------
25,488
---------
SPECIALITY STORES - 0.59%
Hancock Fabrics, Inc. 5,525 82,184
Zale Corp.* 825 24,853
---------
107,037
---------
132,525
---------
SOFTWARE - 0.22%
Broderbund Software, Inc.* 1,125 20,109
HCIA, Inc.* 1,775 19,858
---------
39,967
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
Invesment Portfolio - April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
VALUE
SHARES (NOTE 2)
------ -----------
TECHNICAL INSTRUMENTS & SUPPLIES - 11.66%
MEASURING & CONTROLLING DEVICES- 6.23%
Millipore Corp. 20,200 $ 696,900
Teradyne, Inc.* 12,025 438,912
----------
1,135,812
----------
OPTICAL SUPPLIES - 0.10%
Sola International, Inc.* 425 18,062
----------
PHOTOGRAPHIC EQUIPMENT & SUPPLIES - 5.28%
Eastman Kodak Co. 13,340 962,981
----------
SURGICAL & MEDICAL INSTRUMENTS - 0.05%
CardioGenesis Corp.* 1,325 8,447
----------
2,125,302
----------
TELECOMMUNICATION SERVICES - 3.78%
Compania Anonima Nacional Telefonos de
Venezuela (CANTV) - ADR (Note 7) 12,720 426,120
Telecomunicacoes Brasileiras S.A.(Telebras) -
ADR (Note 7) 2,175 264,942
----------
691,062
----------
TEXTILE MILL PRODUCTS - 0.14%
Albany International Corp. - Class A 900 25,650
----------
TRANSPORTATION - 3.16 %
EQUIPMENT - 0.23%
Federal Signal Corp. 1,075 23,045
Miller Industries, Inc.* 2,475 19,491
----------
42,536
----------
RAILROAD - 2.85%
Canadian National Railway Co. - ADR (Note 7) 8,000 520,500
----------
WATER - 0.08%
Trico Marine Services, Inc.* 650 14,706
----------
577,742
----------
UTILITIES-ELECTRIC - 0.12%
Enersis S.A.- ADR (Note 7) 725 21,342
----------
TOTAL COMMON STOCK
(Identified Cost $15,443,939) 16,048,693
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
Invesment Portfolio - April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
Principal Value
Amount/Shares (Note 2)
U.S. TREASURY SECURITIES - 6.27%
U.S. TREASURY BONDS
U.S. Treasury Bond, 6.875%, 8/15/2025 $210,000 $ 233,559
U.S. Treasury Bond, 6.50%, 11/15/2026 855,000 910,575
------------
TOTAL U.S. TREASURY SECURITIES
(Identified Cost $1,153,546) 1,144,134
------------
SHORT-TERM INVESTMENTS - 6.65%
Federal National Mortgage Association
Discount Note, 5/08/1998 550,000 549,422
U.S. Treasury Bill, 5/21/1998 350,000 349,003
Dreyfus Treasury Cash Management Fund 313,710 313,710
------------
TOTAL SHORT-TERM INVESTMENTS
(Identified Cost $1,212,135) 1,212,135
------------
TOTAL INVESTMENTS - 100.91%
(Identified Cost $17,809,620) 18,404,962
LIABILITIES, LESS OTHER ASSETS - (0.91%) (166,028)
------------
NET ASSETS - 100% $18,238,934
============
</TABLE>
*Non-income producing security
<TABLE>
<CAPTION>
<S> <C>
FEDERAL TAX INFORMATION:
At April 30, 1998, the net unrealized appreciation based on identified cost for
federal income tax purposes of $17,809,620 was as follows:
Aggregate gross unrealized appreciation for all investments in $1,403,548
which there was an excess of value over tax cost
Aggregate gross unrealized depreciation for all investments in
which there was an excess of tax cost over value (808,206)
-----------
UNREALIZED APPRECIATION - NET $ 595,342
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
Statement of Assets and Liabilities (unaudited)
<TABLE>
<CAPTION>
<S> <C>
APRIL 30, 1998
ASSETS:
Investments, at value (identified cost $17,809,620)(Note 2) $18,404,962
Cash 6,386
Dividends receivable 42,638
Interest receivable 28,630
Receivable for fund shares sold 27,747
-----------
TOTAL ASSETS 18,510,363
-----------
LIABILITIES:
Accrued management fees (Note 3) 17,577
Accrued Directors' fees (Note 3) 1,728
Transfer agent fees payable (Note 3) 95
Payable for securities purchased 248,527
Audit fee payable 3,071
Other payables and accrued expenses 431
-----------
TOTAL LIABILITIES 271,429
-----------
NET ASSETS FOR 1,256,907 SHARES OUTSTANDING $18,238,934
===========
NET ASSETS CONSIST OF:
Capital stock $ 12,569
Additional paid-in-capital 16,540,950
Undistributed net investment income 99,596
Accumulated net realized gain on investments 990,570
Net unrealized appreciation on investments 595,249
-----------
TOTAL NET ASSETS $18,238,934
===========
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
($18,238,934/1,256,907 shares) $ 14.51
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
Statement of Operations (unaudited)
<TABLE>
<CAPTION>
<S> <C>
FOR THE SIX MONTHS ENDED APRIL 30, 1998
INVESTMENT INCOME:
Dividends $ 146,400
Interest 41,695
-----------
Total Investment Income 188,095
-----------
EXPENSES:
Management fees (Note 3) 68,721
Directors' fees (Note 3) 4,317
Transfer agent fees (Note 3) 1,649
Audit fee 5,582
Custodian fee 4,374
Registration and filing fees 2,727
Miscellaneous 1,239
-----------
Total Expenses 88,609
Less Reduction of Expenses (Note 3) (6,144)
-----------
Net Expenses 82,465
-----------
NET INVESTMENT INCOME 105,630
-----------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on investments (identified cost basis) 993,601
Net change in unrealized appreciation on investments 621,051
-----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS 1,614,652
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $1,720,282
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
<S> <C> <C>
For the Six
Months Ended For the
4/30/98 Year Ended
(unaudited) 10/31/97
------------- ----------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 105,630 $ 52,531
Net realized gain on investments 993,601 1,008,486
Net change in unrealized appreciation (depreciation)
on investments 621,051 (64,888)
------------- ----------------------
Net increase in net assets from operations 1,720,282 996,129
------------- ----------------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2):
From net investment income (35,473) (26,434)
From net realized gain on investments (1,010,011) (11,941)
------------- ----------------------
Total distributions to shareholders (1,045,484) (38,375)
------------- ----------------------
CAPITAL STOCK ISSUED AND REPURCHASED:
Net increase in net assets from capital share
transactions (Note 5) 7,712,442 7,319,949
------------- ----------------------
Net increase in net assets 8,387,240 8,277,703
NET ASSETS:
Beginning of period 9,851,694 1,573,991
------------- ----------------------
END OF PERIOD (Including undistributed
net investment income of $99,596 and
29,439 respectively) $ 18,238,934 $ 9,851,694
============= ======================
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
<S> <C> <C> <C>
For the Six Months For the For the
Ended 4/30/98 Year Ended Year Ended
(unaudited) 10/31/97 10/31/96
--------------- --------------- -------------
Per share data (for a share outstanding throughout
each period):
NET ASSET VALUE - BEGINNING OF PERIOD $ 14.24 $ 11.38 $ 10.00
--------------- --------------- -------------
Income from investment operations:
Net investment income 0.079 0.101 0.155
Net realized and unrealized gain on investments 1.450 2.919 1.356
--------------- --------------- -------------
Total from investment operations 1.529 3.020 1.511
--------------- --------------- -------------
Less distributions to shareholders:
From net investment income (0.043) (0.082) (0.131)
From net realized gain on investments (1.216) (0.078) --
--------------- --------------- -------------
Total distributions to shareholders (1.259) (0.160) (0.131)
--------------- --------------- -------------
NET ASSET VALUE - END OF PERIOD $ 14.51 $ 14.24 $ 11.38
=============== =============== =============
Total return 1 12.06% 26.77% 15.21%
Ratios (to average net assets) / Supplemental Data:
Expenses 1.20%2 1.20% 1.20%
Net investment income 1.54%2 0.94% 1.71%
Portfolio turnover 31% 115% 95%
Average commission rate paid $ 0.0443 $ 0.0486 $ 0.0655
NET ASSETS - END OF PERIOD (000's omitted) $ 18,239 $ 9,852 $ 1,574
=============== =============== =============
</TABLE>
* The investment advisor did not impose all or a portion of its management fee
and in some periods paid a portion of the Fund's expenses. If these expenses
had been incurred by the Fund, and had 1996 expenses been limited to that
allowed by state securities law, the net investment income per share and the
ratios would have been as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Net investment income $ 0.074 $0.063 $0.037
Ratios (to average net assets):
Expenses 1.29%2 1.55% 2.50%
Net investment income 1.45%2 0.59% 0.41%
1 Represents aggregate total return for the period indicated.
2 Annualized.
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
Notes to Financial Statements (unaudited)
1. ORGANIZATION
Maximum Horizon Series (the "Fund") is a no-load diversified series of
Exeter Fund, Inc. (the "Corporation"), formerly known as Manning & Napier
Fund, Inc. The Corporation is organized in Maryland and is registered
under the Investment Company Act of 1940, as amended, as an open-end
management investment company.
The total authorized capital stock of the Corporation consists of one
billion shares of common stock each having a par value of $0.01. As of
April 30, 1998, 940 million shares have been designated in total among 19
series, of which 75 million have been designated as Maximum Horizon Series
Class A Common Stock.
2. SIGNIFICANT ACCOUNTING POLICIES
SECURITY VALUATION
Portfolio securities, including domestic equities, foreign equities,
options and corporate bonds, listed on an exchange are valued at the latest
quoted sales price of the exchange on which the security is traded most
extensively. Securities not traded on valuation date or securities not
listed on an exchange are valued at the latest quoted bid price.
Debt securities, including government bonds and mortgage backed
securities, will normally be valued on the basis of evaluated bid prices
provided by the Fund's pricing service.
Securities for which representative valuations or prices are not
available from the Fund's pricing service are valued at fair value as
determined in good faith by the Advisor under procedures established by and
under the general supervision and responsibility of the Funds Board of
Directors.
Short-term investments that mature in sixty days or less are valued at
amortized cost.
SECURITY TRANSACTIONS, INVESTMENT INCOME AND EXPENSES
Security transactions are accounted for on the date the securities are
purchased or sold. Dividend income is recorded on the ex-dividend date.
Interest income and expenses are recorded on an accrual basis.
Most expenses of the Corporation can be attributed to a specific fund.
Expenses which cannot be directly attributed are apportioned among the
funds in the Corporation.
FEDERAL INCOME TAXES
The Fund's policy is to comply with the provisions of the Internal
Revenue Code applicable to regulated investment companies. The Fund is not
subject to federal income or excise tax to the extent the Fund distributes
to shareholders each year its taxable income, including any net realized
gains on investments in accordance with requirements of the Internal
Revenue Code. Accordingly, no provision for federal income tax or excise
tax has been made in the financial statements.
13
<PAGE>
Notes to Financial Statements (unaudited)
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
FEDERAL INCOME TAXES (continued)
The Fund uses the identified cost method for determining realized gain or
loss on investments for both financial statement and federal income tax
reporting purposes.
DISTRIBUTIONS OF INCOME AND GAINS
Distributions to shareholders of net investment income are made
semi-annually. Distributions are recorded on the ex-dividend date.
Distributions of net realized gains are distributed annually. An
additional distribution may be necessary to avoid taxation of the Fund.
The timing and characterization of certain income and capital gains are
determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principles. The differences
may be a result of deferral of certain losses, foreign denominated
investments, character reclassification between net income and net gains,
or other tax adjustments. As a result, net investment income (loss) and
net investment gain (loss) on investment transactions for a reporting
period may differ significantly from distributions to shareholders during
such period. As a result, the Fund may periodically make reclassifications
among its capital accounts without impacting the Fund's net asset value.
FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund are maintained in U.S. dollars.
Foreign currency amounts are translated into U.S. dollars on the following
basis: a) investment securities, other assets and liabilities are
converted to U.S. dollars based upon current exchange rates; and b)
purchases and sales of securities and income and expenses are converted
into U.S. dollars based upon the currency exchange rates prevailing on the
respective dates of such transactions.
Gains and losses attributable to foreign currency exchange rates are
recorded for financial statement purposes as net realized gains and losses
on investments. The portion of both realized and unrealized gains and
losses on investments that result from fluctuations in foreign currency
exchange rates is not separately stated.
MULTIPLE CLASSES OF SHARES OF BENEFICIAL INTEREST
The Fund is authorized to issue five classes of shares (Class A, Class B,
Class, C, Class D, and Class E shares). Currently, only Class A shares
have been issued. The five classes of shares differ in their respective
distribution and service fees. All shareholders bear the common expenses
of the Fund pro rata based on the average daily net assets of each class,
without distinction between share classes. Dividends are declared
separately for each class. No class has preferential dividend rights;
differences in per share dividend rates are generally due to differences in
separate class expenses
14
<PAGE>
Notes to Financial Statements (unaudited)
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
OTHER
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
3. TRANSACTIONS WITH AFFILIATES
The Fund has an investment advisory agreement with Manning & Napier
Advisors, Inc. (the "Advisor"), for which the Fund pays the Advisor a fee,
computed daily and payable monthly, at an annual rate of 1.0% of the Fund's
average daily net assets. The fee amounted to $68,721 for the six months
ended April 30, 1998.
Under the Fund's Investment Advisory Agreement (the "Agreement"),
personnel of the Advisor provide the Fund with advice and assistance in the
choice of investments and the execution of securities transactions, and
otherwise maintain the Fund's organization. The Advisor also provides the
Fund with necessary office space and portfolio accounting and bookkeeping
services. The salaries of all officers of the Fund and of all Directors
who are "affiliated persons" of the Fund or of the Advisor, and all
personnel of the Fund or of the Advisor performing services relating to
research, statistical and investment activities are paid by the Advisor.
The Advisor has voluntarily agreed to waive its fee and, if necessary,
pay other expenses of the Fund in order to maintain total expenses for the
Fund at no more than 1.20% of average daily net assets each year.
Accordingly, the Advisor waived fees of $6,144 for the six months ended
April 30, 1998, which is reflected as a reduction of expenses on the
Statement of Operations. The fee waiver and assumption of expenses by the
Advisor is voluntary and may be terminated at any time.
The Advisor also acts as the transfer, dividend paying and shareholder
servicing agent for the Fund. For these services, the Fund pays a fee
which is calculated as a percentage of the average daily net assets at an
annual rate of 0.024%; this fee amounted to $1,649 for the six months
ended April 30, 1998.
Manning & Napier Investor Services, Inc., a registered broker-dealer
affiliate of the Advisor, acts as distributor for the Fund's shares. The
services of Manning & Napier Investor Services, Inc. are provided at no
additional cost to the Fund.
The compensation of the non-affiliated Directors totaled $4,317 for the
six months ended April 30, 1998.
15
<PAGE>
Notes to Financial Statements (unaudited)
4. PURCHASES AND SALES OF SECURITIES
For the six months ended April 30, 1998, purchases and sales of
securities, other than United States Government securities and short-term
securities, were $8,322,160 and $3,545,763, respectively. Purchases and
sales of United States Government securities were $1,690,825 and $610,050,
respectively.
5. CAPITAL STOCK TRANSACTIONS
Transactions in shares of Maximum Horizon Series Class A Common Stock
were:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
For the Six Months For the Year
Ended 4/30/98 Ended 10/31/97
------------------- ---------------
Shares Amount Shares Amount
------------------- ------------ --------------- -----------
Sold 563,028 $ 7,762,781 604,488 $8,008,694
Reinvested 82,609 1,042,528 2,983 38,375
Repurchased (80,471) (1,092,867) (54,012) (727,120)
------------------- ------------ --------------- -----------
Net Increase 565,166 $ 7,712,442 553,459 $7,319,949
=================== ============ =============== ===========
</TABLE>
The Advisor owned 14,098 shares on April 30, 1998 and 12,820 shares on
October 31, 1997.
6. FINANCIAL INSTRUMENTS
The Fund may trade in financial instruments with off-balance sheet risk
in the normal course of its investing activities to assist in managing
exposure to various market risks. These financial instruments include
written options, forward foreign currency exchange contracts, and futures
contracts and may involve, to a varying degree, elements of risk in excess
of the amounts recognized for financial statement purposes. No such
investments were held by the Fund on April 30, 1998.
7. FOREIGN SECURITIES
Investing in securities of foreign companies and foreign governments
involves special risks and considerations not typically associated with
investing in securities of domestic companies and the United States
Government. These risks include revaluation of currencies and future
adverse political and economic developments. Moreover, securities of
foreign companies and foreign governments may be less liquid and their
prices more volatile than those of securities of comparable domestic
companies and the United States Government.
16
<PAGE>
Exeter Fund, Inc.
Tax Managed Series
Semi-Annual Report
April 30, 1998
<PAGE>
Management Discussion and Analysis (unaudited)
Dear Shareholders:
The Tax Managed Series continues to balance its goals of maintaining stock
exposure while seeking to reduce the tax liability of equity gains. Often,
this means foregoing opportunities by taking losses to match up with gains.
Despite this, the portfolio has earned consistently strong returns, without
subjecting shareholders to the full tax liability of those gains.
The other noteworthy development is that as a result of what is happening with
the U.S. economy and stock market, we have kept a significant portion of the
portfolio invested in foreign stocks at more attractive valuations. This also
comes at a time when other countries around the world are improving their
competitive advantages relative to the U.S., due in part to their cost-cutting
efforts and to currency movements. The U.S. market has had a tremendous run,
but investors must be alert to changes in trends. Earnings growth has slowed
and sales growth has ground virtually to a halt, while prices have continued
to escalate. The more the market is driven by fanfare rather than
fundamentals, the greater the risk becomes.
We've responded to an over-valued environment by being very selective, which
has led us to choose a growing number of foreign stocks. We anticipate a
volatile market environment - which in turn will create further opportunities
to manage your tax liability.
As always, it is a privilege to serve you.
Sincerely,
Exeter Asset Management
1
<PAGE>
Portfolio Composition (unaudited)
[graphic]
<pie chart>
Data for pie chart to follow:
<TABLE>
<CAPTION>
<S> <C>
PORTFOLIO COMPOSITION - AS OF 4/30/98
Cash & Equivalents - 6%
Chemical & Allied Products - 13%
Computer Equipment - 8%
Crude Petroleum & Natural Gas - 3%
Diamonds - 4%
Electronics & Electrical Equipment - 4%
Food & Beverages - 7%
Glass Products - 3%
Health Services - 3%
Miscellaneous* - 11%
Paper & Allied Products - 10%
Restaurants - 5%
Retail - 6%
Technical Instruments & Supplies - 7%
Telecommunication Service - 7%
Utilities - Electric - 3%
*Miscellaneous includes:
Air Transportation
Business Services
Design
Computer Integrated Systems Design
Distribution-Wholesale
Primary Metal Industries
Software
</TABLE>
2
<PAGE>
Performance Update as of April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Exeter Fund, Inc. - Tax Managed Series
Total Return
-------------
Through Growth of $10,000 Average
04/30/98 Investment Cumulative Annual
- ---------------------------------- ------------------ ------------- --------
One Year $ 13,081 30.81% 30.81%
Inception2 $ 17,228 72.28% 24.32%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Standard & Poor's 500 Total Return
Total Return
-------------
Through Growth of $10,000 Average
04/30/98 Investment Cumulative Annual
- ---------------------------------- ------------------ ------------- --------
One Year $ 14,104 41.04% 41.04%
Inception2 $ 20,076 100.76% 32.17%
</TABLE>
The value of a $10,000 investment in the
Exeter Fund, Inc. - Tax Managed
Series from its inception (11/1/95) to present
(4/30/98) as compared to the Standard &
Poor's (S&P) 500 Total Return Index. 1
[graphic]
<line chart>
Data for line chart to follow:
<TABLE>
<CAPTION>
<S> <C> <C>
Exeter Fund Tax Managed Series Standard & Poors 500 Total Return Index
11/01/95 10,000 10,000
04/30/96 10,980 11,376
10/31/96 11,630 12,408
04/30/97 13,170 14,233
10/31/97 15,200 16,392
04/30/98 17,228 20,076
</TABLE>
1The Standard & Poor's (S&P) 500 Total Return Index is an unmanaged
capitalization-weighted measure of 500 widely held common stocks
listed on the New York Stock Exchange, American Stock Exchange,
and the Over-the-Counter Market. The Index returns assume
reinvestment of income and, unlike Fund returns, do not reflect any fees
or expenses.
2 The Fund and Index performance are calculated from November 1,
1995, the Fund's inception date. The Fund's performance is historical
and may not be indicative of future results.
3
<PAGE>
Investment Portfolio - April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
VALUE
SHARES (NOTE 2)
COMMON STOCK - 93.76%
AIR TRANSPORTATION - 1.75%
FDX Corp.* 200 $ 13,600
---------
BUSINESS SERVICES - 1.83%
National Data Corp 348 14,203
---------
CHEMICAL & ALLIED PRODUCTS - 12.88%
Celltech plc* (United Kingdom) (Note 7) 3,500 20,098
Johnson & Johnson 175 12,491
Mallinckrodt, Inc. 750 24,188
Pharmacia & Upjohn, Inc. 375 15,773
R.P. Scherer Corp.* 375 27,375
---------
99,925
---------
COMPUTER EQUIPMENT - 7.50%
Bell & Howell Co.* 1,250 34,531
International Game Technology 850 23,641
---------
58,172
---------
Computer Integrated Systems Design - 2.50%
HBO & Co. 325 19,439
---------
CRUDE PETROLEUM & NATURAL GAS - 2.93%
Petroleo Brasileiro S.A. (Petrobras) -
ADR (Note 7) 900 22,775
---------
DIAMONDS - 4.15%
De Beers Centenary AG - ADR (Note 7) 1,250 32,187
---------
DISTRIBUTION - WHOLESALE - 1.09%
IKON Office Solutions, Inc. 350 8,466
---------
ELECTRONICS & ELECTRICAL EQUIPMENT - 3.94%
Motorola, Inc. 550 30,594
---------
FOOD & BEVERAGES - 7.09%
Allied Domecq plc - ADR (Note 7) 2,000 20,632
Diageo plc- ADR (Note 7) 453 21,772
Unilever plc - ADR (Note 7) 300 12,675
---------
55,079
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
VALUE
SHARES (NOTE 2)
GLASS PRODUCTS - 2.80%
Corning, Inc. 425 $17,000
Libbey, Inc. 125 4,719
------
21,719
HEALTH SERVICES - 3.43%
MedPartners, Inc.* 2,600 26,650
--------
PAPER & ALLIED PRODUCTS - 9.76%
Aracruz Celulose S.A - ADR (Note 7) 1,400 22,050
Asia Pulp & Paper Co. Ltd. -ADR (Note 7) 1,300 18,931
Fort James Corp. 240 11,910
Kimberly-Clark Corp. 450 22,838
------
75,729
------
PRIMARY METAL INDUSTRIES - 2.35%
American Superconductor Corp.* 1,000 13,437
Gibraltar Steel Corp.* 200 4,800
------
18,237
------
RESTAURANTS - 5.18%
McDonald's Corp. 650 40,219
------
RETAIL - SPECIALTY STORES - 5.82%
Fingerhut Companies, Inc. 500 14,813
Home Depot, Inc. 150 10,444
Tandy Corp. 400 19,900
------
45,157
------
SOFTWARE - 1.93%
Broderbund Software, Inc.* 350 6,256
Symantec Corp.* 300 8,700
------
14,956
------
TECHNICAL INSTRUMENTS & SUPPLIES - 6.85%
Eastman Kodak Co. 450 32,484
Millipore Corp. 600 20,700
------
53,184
------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
Investment Portfolio - April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
VALUE
SHARES (NOTE 2)
TELECOMMUNICATION SERVICE - 6.95%
Compania Anonima Nacional Telefonos de
Venezuela (CANTV) - ADR (Note 7) 700 $ 23,450
Telecomunicacoes Brasileiras S.A. (Telebras) -
ADR (Note 7) 250 30,453
---------
53,903
---------
UTILITIES-ELECTRIC - 3.03%
Enersis S.A. - ADR (Note 7) 800 23,550
---------
TOTAL COMMON STOCK
(Identified Cost $595,785) 727,744
---------
SHORT-TERM INVESTMENTS - 6.42%
Dreyfus Treasury Cash Management Fund
(Identified Cost $49,803) 49,803 49,803
---------
TOTAL INVESTMENTS - 100.18%
(Identified Cost $645,588) 777,547
LIABILITIES, LESS OTHER ASSETS - (0.18)% (1,478)
---------
NET ASSETS - 100% $776,069
=========
</TABLE>
*Non-income producing security
<TABLE>
<CAPTION>
<S> <C>
FEDERAL TAX INFORMATION:
At April 30, 1998, the net unrealized appreciation based on identified cost for
federal income tax purposes of $645,588 was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost $140,853
Aggregate gross unrealized depreciation for all investments in
which there was an excess of tax cost over value (8,894)
---------
UNREALIZED APPRECIATION - NET $131,959
=========
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
Statement of Assets and Liabilities (unaudited)
<TABLE>
<CAPTION>
<S> <C>
APRIL 30, 1998
ASSETS:
Investments, at value (identified cost $645,588)(Note 2) $777,547
Dividends receivable 2,453
Receivable from investment advisor (Note 3) 9,912
--------
TOTAL ASSETS 789,912
--------
LIABILITIES:
Accrued Directors' fees (Note 3) 3,394
Transfer agent fees payable (Note 3) 77
Audit fee payable 3,226
Other payables and accrued expenses 7,146
--------
TOTAL LIABILITIES 13,843
--------
NET ASSETS FOR 46,273 SHARES OUTSTANDING $776,069
========
NET ASSETS CONSIST OF:
Capital stock $ 463
Additional paid-in-capital 598,103
Undistributed net investment income 4,447
Accumulated net realized gain on investments 41,097
Net unrealized appreciation on investments 131,959
--------
TOTAL NET ASSETS $776,069
========
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
($776,069/46,273 shares) $ 16.77
========
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
Statement of Operations (unaudited)
<TABLE>
<CAPTION>
<S> <C>
FOR THE SIX MONTHS ENDED APRIL 30, 1998
INVESTMENT INCOME:
Dividends $ 7,044
Interest 1,257
---------
Total Investment Income 8,301
---------
EXPENSES:
Management fees (Note 3) 3,211
Directors' fees (Note 3) 4,317
Transfer agent fees (Note 3) 77
Audit fee 4,710
Registration and filing fees 2,962
Custodian fee 1,116
Miscellaneous 584
---------
Total Expenses 16,977
Less Reduction of Expenses (Note 3) (13,123)
---------
Net Expenses 3,854
---------
NET INVESTMENT INCOME 4,447
---------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments (identified cost basis) 41,099
Net change in unrealized appreciation on investments 42,351
---------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS 83,450
---------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 87,897
=========
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
<S> <C> <C>
For the For the
Six Months Ended Year
4/30/98 Ended
(unaudited) 10/31/97
------------------- ----------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income (loss) 4,447 ($289)
Net realized gain on investments 41,099 14,448
Net change in unrealized appreciation on investments 42,351 58,457
------------------- ----------
Net increase in net assets from operations 87,897 72,616
------------------- ----------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2):
From net realized gain on investments (14,205) --
------------------- ----------
CAPITAL STOCK ISSUED AND REPURCHASED:
Net increase in net assets from capital share
transactions (Note 5) 178,180 227,201
------------------- ----------
Net increase in net assets 251,872 299,817
NET ASSETS:
Beginning of period 524,197 224,380
------------------- ----------
END OF PERIOD (including undistributed net investment
income of $4,447 and $0, respectively) $ 776,069 $ 524,197
=================== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
<S> <C> <C> <C>
For the
Six Months For the For the Year
Ended 4/30/98 Year Ended Ended
(unaudited) 10/31/97 10/31/96
--------------- ------------- --------------
Per share data (for a share outstanding throughout
each period):
NET ASSET VALUE - BEGINNING OF PERIOD $ 15.20 $ 11.63 $ 10.00
--------------- ------------- --------------
Income from investment operations:
Net investment income (loss) 0.096 (0.008) (0.020)
Net realized and unrealized gain (loss)
on investments 1.871 3.578 1.650
--------------- ------------- --------------
Total from investment operations 1.967 3.570 1.630
--------------- ------------- --------------
Less distributions to shareholders:
From net realized gain on investments (0.397) -- --
--------------- ------------- --------------
NET ASSET VALUE - END OF PERIOD $ 16.77 $ 15.20 $ 11.63
=============== ============= ==============
Total return 1 13.34% 30.70% 16.30%
Ratios (to average net assets) / Supplemental Data:
Expenses* 1.20%2 1.20% 1.20%
Net investment income (loss)* 1.38%2 (0.09%) (0.21%)
Portfolio turnover 32% 103% 78%
Average commission rate paid $ 0.0502 $ 0.0625 $ 0.0757
NET ASSETS - END OF PERIOD (000's omitted) $ 776 $ 524 $ 224
=============== ============= ==============
</TABLE>
* The investment advisor did not impose its management fee and paid a portion
of the Fund's expenses. If these expenses had been incurred by the Fund, and
had 1996 expenses been limited to that allowed by state securities law, the
net investment income per share and the ratios would have been as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Net investment income (loss) ($0.189) ($0.620) ($0.144)
Ratios (to average net assets):
Expenses 5.29%2 8.08% 2.50%
Net investment (loss) (2.71%)2 (6.97%) (1.51%)
1 Represents aggregate total return for the period indicated.
2 Annualized.
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
Notes to Financial Statments (unaudited)
1. ORGANIZATION
Tax Managed Series (the "Fund") is a no-load diversified series of Exeter
Fund, Inc. (the "Corporation"), formerly known as Manning & Napier Fund,
Inc. The Corporation is organized in Maryland and is registered under
the Investment Company Act of 1940, as amended, as an open-end management
investment company.
The total authorized capital stock of the Corporation consists of one
billion shares of common stock each having a par value of $0.01. As of
April 30, 1998, 940 million shares have been designated in total among 19
series, of which 37.5 million have been designated as Tax Managed Series
Class A Common Stock.
2. SIGNIFICANT ACCOUNTING POLICIES
SECURITY VALUATION
Portfolio securities, including domestic equities, foreign equities,
options and corporate bonds, listed on an exchange are valued at the
latest quoted sales price of the exchange on which the security is traded
most extensively. Securities not traded on valuation date or securities
not listed on an exchange are valued at the latest quoted bid price.
Debt securities, including government bonds and mortgage backed
securities, will normally be valued on the basis of evaluated bid prices
provided by the Fund's pricing service.
Securities for which representative valuations or prices are not
available from the Fund's pricing service are valued at fair value as
determined in good faith by the Advisor under procedures established by
and under the general supervision and responsibility of the Fund's Board
of Directors.
Short-term investments that mature in sixty days or less are valued at
amortized cost.
SECURITY TRANSACTIONS, INVESTMENT INCOME AND EXPENSES
Security transactions are accounted for on the date the securities are
purchased or sold. Dividend income is recorded on the ex-dividend date.
Interest income and expenses are recorded on an accrual basis.
Most expenses of the Corporation can be attributed to a specific fund.
Expenses which cannot be directly attributed are apportioned among the
funds in the Corporation.
FEDERAL INCOME TAXES
The Fund's policy is to comply with the provisions of the Internal
Revenue Code applicable to regulated investment companies. The Fund is
not subject to federal income or excise tax to the extent the Fund
distributes to shareholders each year its taxable income, including any
net realized gains on investments in accordance with requirements of the
Internal Revenue Code. Accordingly, no provision for federal income tax
or excise tax has been made in the financial statements.
11
<PAGE>
Notes to Financial Statements (unaudited)
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
FEDERAL INCOME TAXES (continued)
The Fund uses the identified cost method for determining realized gain or
loss on investments for both financial statement and federal income
tax reporting purposes.
DISTRIBUTIONS OF INCOME AND GAINS
Distributions to shareholders of net investment income are made annually.
Distributions are recorded on the ex-dividend date. Distributions of net
realized gains are distributed annually. An additional distribution may
be necessary to avoid taxation of the Fund.
The timing and characterization of certain income and capital gains are
determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principles. The differences may
be a result of deferral of certain losses, character reclassification
between net income and net gains, or other tax adjustments. As a result,
net investment income (loss) and net investment gain (loss) on investment
transactions for a reporting period may differ significantly from
distributions to shareholders during such period. As a result, the Fund
may periodically make reclassifications among its capital accounts
without impacting the Fund's net asset value.
MULTIPLE CLASSES OF SHARES OF BENEFICIAL INTEREST
The Fund is authorized to issue five classes of shares (Class A,
Class B, Class C, Class D, and Class E shares). Currently, only Class A
shares have been issued. The five classes of shares differ in their
respective distribution and service fees. All shareholders bear the
common expenses of the Fund pro rata based on the average daily net assets
of each class, without distinction between share classes. Dividends are
declared separately for each class. No class has preferential dividend
rights; differences in per share dividend rates are generally due to
differences in separate class expenses.
OTHER
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
12
<PAGE>
Notes to Financial Statements (unaudited)
3. TRANSACTIONS WITH AFFILIATES
The Fund has an investment advisory agreement with Manning & Napier
Advisors, Inc.(the "Advisor"), for which the Fund pays the Advisor a fee,
computed daily and payable monthly, at an annual rate of 1.0% of the
Fund's average daily net assets. The fee amounted to $3,211 for the
six months ended April 30, 1998.
Under the Fund's Investment Advisory Agreement (the "Agreement"),
personnel of the Advisor provide the Fund with advice and assistance in
the choice of investments and the execution of securities transactions,
and otherwise maintain the Fund's organization. The Advisor also provides
the Fund with necessary office space and portfolio accounting and
bookkeeping services. The salaries of all officers of the Fund and of all
Directors who are "affiliated persons" of the Fund or of the Advisor, and
all personnel of the Fund or of the Advisor performing services
relating to research, statistical and investment activities are paid
by the Advisor.
The Advisor has voluntarily agreed to waive its fee and, if necessary,
pay other expenses of the Fund in order to maintain total expenses for the
Fund at no more than 1.2% of average daily net assets each year.
Accordingly, the Advisor did not impose any of its fee and paid expenses
amounting to $9,912 for the six months ended April 30, 1998, which is
reflected as a reduction of expenses on the Statement of Operations. The
fee waiver and assumption of expenses by the Advisor is voluntary and may
be terminated at any time.
The Advisor also acts as the transfer, dividend paying and shareholder
servicing agent for the Fund. For these services, the Fund pays a fee
which is calculated as a percentage of the average daily net assets at an
annual rate of 0.024%; this fee amounted to $77 for the six months ended
April 30, 1998.
Manning & Napier Investor Services, Inc., a registered broker-dealer
affiliate of the Advisor, acts as distributor for the Fund's shares. The
services of Manning & Napier Investor Services, Inc. are provided at no
additional cost to the Fund.
The compensation of the non-affiliated Directors totaled $4,317 for the
six months ended April 30, 1998.
4. PURCHASES AND SALES OF SECURITIES
For the six months ended April 30, 1998, purchases and sales of
securities, other than United States Government securities and short-term
securities, were $372,661 and $191,564, respectively.
13
<PAGE>
Notes to Financial Statements (unaudited)
5. CAPITAL STOCK TRANSACTIONS
Transactions in shares of Tax Managed Series Class A Common Stock were:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
For the Six Months For the Year
Ended 4/30/98 Ended 10/31/97
------------------- ---------------
Shares Amount Shares Amount
------------------- --------- --------------- ---------
Sold 16,614 $247,377 16,041 $239,934
Reinvested 962 13,996 - -
Repurchased (5,794) (83,193) (850) (12,733)
------------------ ---------- -------------- ---------
Net increase 11,782 $178,180 15,191 $227,201
</TABLE> ======== ========= ======== =========
The Advisor owned 12,841 shares on April 30, 1998 and 12,500 shares on
October 31, 1997.
6. FINANCIAL INSTRUMENTS
The Fund may trade in financial instruments with off-balance sheet risk
in the normal course of its investing activities to assist in managing
exposure to various market risks. These financial instruments include
written options, forward foreign currency exchange contracts, and futures
contracts and may involve, to a varying degree, elements of risk in excess
of the amounts recognized for financial statement purposes. No such
investments were held by the Fund on April 30, 1998.
7. FOREIGN SECURITIES
Investing in securities of foreign companies and foreign governments
involves special risks and considerations not typically associated with
investing in securities of domestic companies and the United States
Government. These risks include revaluation of currencies and future
adverse political and economic developments. Moreover, securities of
foreign companies and foreign governments may be less liquid and their
prices more volatile than those of securities of comparable domestic
companies and the United States Government.
14
<PAGE>
[ARTICLE] 6
[LEGEND]
[RESTATED]
[CIK] 0000751173
[NAME] EXETER FUND, INC.
[SERIES]
[NAME] BLENDED ASSET SERIES I
[NUMBER] 11
[MULTIPLIER] 1
[CURRENCY] 1
[FISCAL-YEAR-END] OCT-31-1998
[PERIOD-START] NOV-01-1997
[PERIOD-END] APRIL-30-1998
[PERIOD-TYPE] SEMI
[EXCHANGE-RATE] 1
[INVESTMENTS-AT-COST] 27,290,102
[INVESTMENTS-AT-VALUE] 28,161,473
[RECEIVABLES] 1,024,801
[ASSETS-OTHER] 33,769
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 29,220,043
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 40,045
[TOTAL-LIABILITIES] 40,045
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 26,445,674
[SHARES-COMMON-STOCK] 2,447,852
[SHARES-COMMON-PRIOR] 1,831,743
[ACCUMULATED-NII-CURRENT] 344,427
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 1,518,523
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 871,374
[NET-ASSETS] 29,179,998
[DIVIDEND-INCOME] 203,897
[INTEREST-INCOME] 413,725
[OTHER-INCOME] 0
[EXPENSES-NET] 157,395
[NET-INVESTMENT-INCOME] 460,227
[REALIZED-GAINS-CURRENT] 1,519,834
[APPREC-INCREASE-CURRENT] 140,617
[NET-CHANGE-FROM-OPS] 2,120,678
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 390,568
[DISTRIBUTIONS-OF-GAINS] 1,427,315
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 750,610
[NUMBER-OF-SHARES-REDEEMED] 295,457
[SHARES-REINVESTED] 160,956
[NET-CHANGE-IN-ASSETS] 7,249,508
[ACCUMULATED-NII-PRIOR] 274,768
[ACCUMULATED-GAINS-PRIOR] 1,426,004
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 131,334
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 157,877
[AVERAGE-NET-ASSETS] 26,540,320
[PER-SHARE-NAV-BEGIN] 11.97
[PER-SHARE-NII] 0.199
[PER-SHARE-GAIN-APPREC] 0.717
[PER-SHARE-DIVIDEND] 0.208
[PER-SHARE-DISTRIBUTIONS] 0.758
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 11.92
[EXPENSE-RATIO] 1.20
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
[ARTICLE] 6
[LEGEND]
[RESTATED]
[CIK] 0000751173
[NAME] EXETER FUND, INC.
[SERIES]
[NAME] BLENDED ASSET SERIES II
[NUMBER] 12
[MULTIPLIER] 1
[CURRENCY] 1
[FISCAL-YEAR-END] OCT-31-1998
[PERIOD-START] NOV-01-1997
[PERIOD-END] APRIL-30-1998
[PERIOD-TYPE] SEMI
[EXCHANGE-RATE] 1
[INVESTMENTS-AT-COST] 65,675,425
[INVESTMENTS-AT-VALUE] 69,422,209
[RECEIVABLES] 578,808
[ASSETS-OTHER] 365,893
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 70,366,910
[PAYABLE-FOR-SECURITIES] 245,594
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 84,318
[TOTAL-LIABILITIES] 329,912
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 62,592,803
[SHARES-COMMON-STOCK] 5,049,271
[SHARES-COMMON-PRIOR] 3,466,675
[ACCUMULATED-NII-CURRENT] 623,210
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 3,074,209
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 3,746,776
[NET-ASSETS] 70,036,998
[DIVIDEND-INCOME] 488,611
[INTEREST-INCOME] 666,153
[OTHER-INCOME] 0
[EXPENSES-NET] 336,080
[NET-INVESTMENT-INCOME] 818,684
[REALIZED-GAINS-CURRENT] 3,074,554
[APPREC-INCREASE-CURRENT] 1,237,094
[NET-CHANGE-FROM-OPS] 5,130,332
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 633,405
[DISTRIBUTIONS-OF-GAINS] 6,231,121
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 1,317,114
[NUMBER-OF-SHARES-REDEEMED] 271,455
[SHARES-REINVESTED] 536,937
[NET-CHANGE-IN-ASSETS] 19,114,632
[ACCUMULATED-NII-PRIOR] 437,931
[ACCUMULATED-GAINS-PRIOR] 6,230,776
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 299,214
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 336,080
[AVERAGE-NET-ASSETS] 60,515,684
[PER-SHARE-NAV-BEGIN] 14.69
[PER-SHARE-NII] 0.163
[PER-SHARE-GAIN-APPREC] 0.924
[PER-SHARE-DIVIDEND] 0.176
[PER-SHARE-DISTRIBUTIONS] 1.731
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 13.87
[EXPENSE-RATIO] 1.12
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
[ARTICLE] 6
[LEGEND]
[RESTATED]
[CIK] 0000751173
[NAME] EXETER FUND, INC.
[SERIES]
[NAME] DEFENSIVE SERIES
[NUMBER] 2
[MULTIPLIER] 1
[CURRENCY] 1
[FISCAL-YEAR-END] OCT-31-1998
[PERIOD-START] NOV-01-1997
[PERIOD-END] APRIL-30-1998
[PERIOD-TYPE] SEMI
[EXCHANGE-RATE] 1
[INVESTMENTS-AT-COST] 3,970,887
[INVESTMENTS-AT-VALUE] 4,016,468
[RECEIVABLES] 63,575
[ASSETS-OTHER] 3,404
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 4,083,447
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 10,988
[TOTAL-LIABILITIES] 10,988
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 3,961,325
[SHARES-COMMON-STOCK] 379,103
[SHARES-COMMON-PRIOR] 164,649
[ACCUMULATED-NII-CURRENT] 43,107
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 22,446
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 45,581
[NET-ASSETS] 4,072,459
[DIVIDEND-INCOME] 6,661
[INTEREST-INCOME] 62,802
[OTHER-INCOME] 0
[EXPENSES-NET] 13,007
[NET-INVESTMENT-INCOME] 56,456
[REALIZED-GAINS-CURRENT] 29,216
[APPREC-INCREASE-CURRENT] 19,601
[NET-CHANGE-FROM-OPS] 105,273
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 45,239
[DISTRIBUTIONS-OF-GAINS] 34,078
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 225,775
[NUMBER-OF-SHARES-REDEEMED] 18,962
[SHARES-REINVESTED] 7,641
[NET-CHANGE-IN-ASSETS] 2,308,423
[ACCUMULATED-NII-PRIOR] 31,890
[ACCUMULATED-GAINS-PRIOR] 27,308
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 10,405
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 25,357
[AVERAGE-NET-ASSETS] 2,661,265
[PER-SHARE-NAV-BEGIN] 10.71
[PER-SHARE-NII] 0.162
[PER-SHARE-GAIN-APPREC] 0.292
[PER-SHARE-DIVIDEND] 0.242
[PER-SHARE-DISTRIBUTIONS] 0.182
[RETURNS-OF-CAPITAL] 0.00
[PER-SHARE-NAV-END] 10.74
[EXPENSE-RATIO] 1.00
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
[ARTICLE] 6
[LEGEND]
[RESTATED]
[CIK] 0000751173
[NAME] EXETER FUND, INC.
[SERIES]
[NAME] MAXIMUM HORIZON SERIES
[NUMBER] 5
[MULTIPLIER] 1
[CURRENCY] 1
[FISCAL-YEAR-END] OCT-31-1998
[PERIOD-START] NOV-01-1997
[PERIOD-END] APRIL-30-1998
[PERIOD-TYPE] SEMI
[EXCHANGE-RATE] 1
[INVESTMENTS-AT-COST] 17,809,620
[INVESTMENTS-AT-VALUE] 18,404,962
[RECEIVABLES] 99,015
[ASSETS-OTHER] 6,386
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 18,510,363
[PAYABLE-FOR-SECURITIES] 248,527
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 22,902
[TOTAL-LIABILITIES] 271,429
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 16,553,519
[SHARES-COMMON-STOCK] 1,256,907
[SHARES-COMMON-PRIOR] 691,741
[ACCUMULATED-NII-CURRENT] 99,596
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 990,570
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 595,249
[NET-ASSETS] 18,238,934
[DIVIDEND-INCOME] 146,400
[INTEREST-INCOME] 41,695
[OTHER-INCOME] 0
[EXPENSES-NET] 82,465
[NET-INVESTMENT-INCOME] 105,630
[REALIZED-GAINS-CURRENT] 993,601
[APPREC-INCREASE-CURRENT] 621,051
[NET-CHANGE-FROM-OPS] 1,720,282
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 35,473
[DISTRIBUTIONS-OF-GAINS] 1,010,011
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 563,028
[NUMBER-OF-SHARES-REDEEMED] 80,471
[SHARES-REINVESTED] 82,609
[NET-CHANGE-IN-ASSETS] 8,387,240
[ACCUMULATED-NII-PRIOR] 29,439
[ACCUMULATED-GAINS-PRIOR] 1,006,980
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 68,721
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 88,609
[AVERAGE-NET-ASSETS] 13,919,881
[PER-SHARE-NAV-BEGIN] 14.24
[PER-SHARE-NII] 0.079
[PER-SHARE-GAIN-APPREC] 1.450
[PER-SHARE-DIVIDEND] 0.043
[PER-SHARE-DISTRIBUTIONS] 1.216
[RETURNS-OF-CAPITAL] 0.00
[PER-SHARE-NAV-END] 14.51
[EXPENSE-RATIO] 1.20
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
[ARTICLE] 6
[LEGEND]
[RESTATED]
[CIK] 0000751173
[NAME] EXETER FUND, INC.
[SERIES]
[NAME] FLEXIBLE YIELD SERIES I
[NUMBER] 13
[MULTIPLIER] 1
[CURRENCY] 1
[FISCAL-YEAR-END] OCT-31-1998
[PERIOD-START] NOV-01-1997
[PERIOD-END] APRIL-30-1998
[PERIOD-TYPE] SEMI
[EXCHANGE-RATE] 1
[INVESTMENTS-AT-COST] 472,651
[INVESTMENTS-AT-VALUE] 475,246
[RECEIVABLES] 46,154
[ASSETS-OTHER] 0
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 521,400
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 10,975
[TOTAL-LIABILITIES] 10,975
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 501,165
[SHARES-COMMON-STOCK] 49,647
[SHARES-COMMON-PRIOR] 62,539
[ACCUMULATED-NII-CURRENT] 4,421
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 2,244
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 2,595
[NET-ASSETS] 510,425
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 16,541
[OTHER-INCOME] 0
[EXPENSES-NET] 1,969
[NET-INVESTMENT-INCOME] 14,572
[REALIZED-GAINS-CURRENT] 4,937
[APPREC-INCREASE-CURRENT] (5,245)
[NET-CHANGE-FROM-OPS] 14,264
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 20,993
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 69,522
[NUMBER-OF-SHARES-REDEEMED] 84,474
[SHARES-REINVESTED] 2,060
[NET-CHANGE-IN-ASSETS] (139,407)
[ACCUMULATED-NII-PRIOR] 10,842
[ACCUMULATED-GAINS-PRIOR] (2,963)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 985
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 12,589
[AVERAGE-NET-ASSETS] 572,916
[PER-SHARE-NAV-BEGIN] 10.39
[PER-SHARE-NII] 0.283
[PER-SHARE-GAIN-APPREC] (0.026)
[PER-SHARE-DIVIDEND] 0.367
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 10.28
[EXPENSE-RATIO] 0.70
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
[ARTICLE] 6
[LEGEND]
[RESTATED]
[CIK] 0000751173
[NAME] EXETER FUND, INC.
[SERIES]
[NAME] FLEXIBLE YIELD SERIES II
[NUMBER] 14
[MULTIPLIER] 1
[CURRENCY] 1
[FISCAL-YEAR-END] OCT-31-1998
[PERIOD-START] NOV-01-1997
[PERIOD-END] APRIL-30-1998
[PERIOD-TYPE] SEMI
[EXCHANGE-RATE] 1
[INVESTMENTS-AT-COST] 510,321
[INVESTMENTS-AT-VALUE] 533,917
[RECEIVABLES] 17,835
[ASSETS-OTHER] 0
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 551,752
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 10,693
[TOTAL-LIABILITIES] 10,693
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 508,962
[SHARES-COMMON-STOCK] 53,795
[SHARES-COMMON-PRIOR] 70,205
[ACCUMULATED-NII-CURRENT] 4,428
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 4,073
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 23,596
[NET-ASSETS] 541,059
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 17,340
[OTHER-INCOME] 0
[EXPENSES-NET] 2,265
[NET-INVESTMENT-INCOME] 15,075
[REALIZED-GAINS-CURRENT] 4,501
[APPREC-INCREASE-CURRENT] (3,594)
[NET-CHANGE-FROM-OPS] 15,982
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 19,216
[DISTRIBUTIONS-OF-GAINS] 4,875
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 47
[NUMBER-OF-SHARES-REDEEMED] 18,876
[SHARES-REINVESTED] 2,419
[NET-CHANGE-IN-ASSETS] (177,165)
[ACCUMULATED-NII-PRIOR] 8,569
[ACCUMULATED-GAINS-PRIOR] 4,447
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 1,274
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 12,975
[AVERAGE-NET-ASSETS] 589,830
[PER-SHARE-NAV-BEGIN] 10.23
[PER-SHARE-NII] 0.329
[PER-SHARE-GAIN-APPREC] (0.036)
[PER-SHARE-DIVIDEND] 0.369
[PER-SHARE-DISTRIBUTIONS] 0.094
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 10.06
[EXPENSE-RATIO] 0.80
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
[ARTICLE] 6
[LEGEND]
[RESTATED]
[CIK] 0000751173
[NAME] EXETER FUND, INC.
[SERIES]
[NAME] FLEXIBLE YIELD SERIES III
[NUMBER] 15
[MULTIPLIER] 1
[CURRENCY] 1
[FISCAL-YEAR-END] OCT-31-1998
[PERIOD-START] NOV-01-1997
[PERIOD-END] APRIL-30-1998
[PERIOD-TYPE] SEMI
[EXCHANGE-RATE] 1
[INVESTMENTS-AT-COST] 1,333,364
[INVESTMENTS-AT-VALUE] 1,422,415
[RECEIVABLES] 24,546
[ASSETS-OTHER] 0
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 1,446,961
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 10,527
[TOTAL-LIABILITIES] 10,527
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 1,325,811
[SHARES-COMMON-STOCK] 137,458
[SHARES-COMMON-PRIOR] 129,274
[ACCUMULATED-NII-CURRENT] 11,586
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 9,986
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 88,051
[NET-ASSETS] 1,436,434
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 43,462
[OTHER-INCOME] 0
[EXPENSES-NET] 5,891
[NET-INVESTMENT-INCOME] 37,571
[REALIZED-GAINS-CURRENT] 10,054
[APPREC-INCREASE-CURRENT] 2,458
[NET-CHANGE-FROM-OPS] 50,083
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 43,500
[DISTRIBUTIONS-OF-GAINS] 763
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 19,230
[NUMBER-OF-SHARES-REDEEMED] 14,561
[SHARES-REINVESTED] 3,515
[NET-CHANGE-IN-ASSETS] 91,153
[ACCUMULATED-NII-PRIOR] 17,515
[ACCUMULATED-GAINS-PRIOR] 695
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 3,465
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 15,734
[AVERAGE-NET-ASSETS] 1,394,499
[PER-SHARE-NAV-BEGIN] 10.41
[PER-SHARE-NII] 0.276
[PER-SHARE-GAIN-APPREC] 0.097
[PER-SHARE-DIVIDEND] 0.327
[PER-SHARE-DISTRIBUTIONS] 0.006
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 10.45
[EXPENSE-RATIO] 0.85
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
[ARTICLE] 6
[LEGEND]
[RESTATED]
[CIK] 0000751173
[NAME] EXETER FUND, INC.
[SERIES]
[NAME] TAX MANAGED SERIES
[NUMBER] 8
[MULTIPLIER] 1
[CURRENCY] 1
[FISCAL-YEAR-END] OCT-31-1998
[PERIOD-START] NOV-01-1997
[PERIOD-END] APRIL-30-1998
[PERIOD-TYPE] SEMI
[EXCHANGE-RATE] 1
[INVESTMENTS-AT-COST] 645,588
[INVESTMENTS-AT-VALUE] 777,574
[RECEIVABLES] 12,365
[ASSETS-OTHER] 0
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 789,912
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 13,843
[TOTAL-LIABILITIES] 13,843
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 598,566
[SHARES-COMMON-STOCK] 46,273
[SHARES-COMMON-PRIOR] 34,491
[ACCUMULATED-NII-CURRENT] 4,447
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 41,097
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 131,959
[NET-ASSETS] 776,069
[DIVIDEND-INCOME] 7,044
[INTEREST-INCOME] 1,257
[OTHER-INCOME] 0
[EXPENSES-NET] 3,854
[NET-INVESTMENT-INCOME] 4,447
[REALIZED-GAINS-CURRENT] 41,099
[APPREC-INCREASE-CURRENT] 42,351
[NET-CHANGE-FROM-OPS] 87,897
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] 14,205
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 16,614
[NUMBER-OF-SHARES-REDEEMED] 5,794
[SHARES-REINVESTED] 962
[NET-CHANGE-IN-ASSETS] 251,872
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 14,203
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 3,211
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 16,977
[AVERAGE-NET-ASSETS] 639,157
[PER-SHARE-NAV-BEGIN] 15.20
[PER-SHARE-NII] 0.096
[PER-SHARE-GAIN-APPREC] 1.871
[PER-SHARE-DIVIDEND] 0.00
[PER-SHARE-DISTRIBUTIONS] 0.397
[RETURNS-OF-CAPITAL] 0.00
[PER-SHARE-NAV-END] 16.77
[EXPENSE-RATIO] 1.20
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
