[100% NO-LOAD COUNCIL LOGO]
C/FUNDS GROUP, INC.
[C/FUNDS LOGO]
o C/Fund
o C/Growth Stock Fund
o Adams Equity Fund
o C/Government Fund
o C/C.A.R. Fund
1998 Annual Report
Table of Contents
Letter to Shareholders 1
Comparative Performance 2
Portfolios of Investments 4
Audited Financial Statements 10
Notes to Financial Statements 14
Report of Independent Certified
Public Accounts 16
LETTER TO SHAREHOLDERS
Despite three consecutive years of above-average increases in stock
prices, 1998 again surprised both professionals and average investors with
another calendar year of total returns in excess of 20%. And again, the
managers of C/Funds Group portfolios feel obliged to caution all investors
that increases at these rates are not sustainable over an extended period
of years.
Our explanation is fairly simple for this excellent experience, i.e.,
the rise of stock prices since 1994 probably represents a one-time up-
valuation that reflects two major factors that greatly influence investor
behavior in general. One is the drop in inflation from the 6%+ level to at
or below 1% per year currently. The other factor is the stabilization of
tax rates at all levels of government. It is important to remind investors
that while tax rates can indeed go lower in this climate of government
budget surpluses, a further decline in inflation is now out of the
question. Thus absent a major reform of our tax system that significantly
lowers the tax burdens of individuals, businesses, and investors, another
major one-time adjustment in share prices seems increasingly remote. This
being so, it would be our expectation that stock prices will henceforth
move upward at a more normal average pace nearer the historic 8-12% annual
rate, albeit also likely that this kind of experience seems to us to be now
more sustainable and predictable than in the past.
The year was also notable for C/Funds Group in that its shareholders
approved the liquidation of two of its fund series, namely the C/Tax Free
Fund series, and the Beebe Fund series. These liquidations have been
completed and regulatory requirements have been met. The decisions that
led to the closing of these two funds were for different reasons. In the
first instance, the managers concluded that tax-frees as a class now
offered investors a relatively poor return versus the market risks looming;
and in the case of the Beebe Fund, it was because of the untimely and
unanticipated early death of Mr. Beebe, for which we all send heartfelt
thoughts to his family and friends.
Consistent with the excellent year in the stock markets, the C/Fund
and C/Growth Stock Fund both again achieved above 20% total returns for
shareholders. The Government Bond Fund and the Community Association
Reserve Fund likewise had good years of NAV per share stability, while
paying shareholders a monthly yield at or in excess of investments similar
to the government securities in which they both invest. The Adams Equity
Fund, which follows a different style of investing, after its stellar 1997
performance, was unable to achieve a favorable result in 1998.
While the customary detailed performance data and other company and
fund portfolio financials are provided to shareholders on the following
pages, we wish to point out one actual, historical experience which we
believe is more revealing than all the statistics put together. In March,
1985, Mr. Howard Sievers of Venice, Florida invested $5,000 in the then
Caldwell Fund, which today is called the C/Fund. He neither added to, nor
withdrew any money or dividends from, the account from that date through
December 31, 1998. His statement as of February 3, 1999 showed the total
value of his $5,000 investment to be $29,074.35! Need we tell anyone that
this is just under six times the value of his original investment? Enough
said for buying and holding through all markets, good and bad.
Congratulations, Howard, and we are pleased to give you a great big public
thank you for allowing us to tell your story and for your confidence in
what we do.
As always, we wish to thank all staff members, shareholders, directors
and officers for their contribution to the company's success this past
year.
Respectfully Submitted:
R. G. "Kelly" Caldwell, Jr.
President
February 25, 1999
C/Fund
Illustration of a $10,000 Investment
[graphic]
C/Growth Stock Fund
Illustration of a $10,000 Investment
[graphic]
Adams Equity Fund
Illustration of a $10,000 Investment
[graphic]
C/Government Fund
Illustration of a $10,000 Investment
[graphic]
C/Community Association Reserve Fund
Illustration of a $10,000 Investment
[graphic]
Performance Summary
As of December 31, 1998
Since
1 Year 5 Year 10 Year Inception
C/Fund 21.39% 16.31% 14.39% 13.63%
C/Growth Stock Fund 21.25% 23.35% n/a 12.54%
Adams Equity Fund -8.35% n/a n/a 9.57%
C/Government Fund 7.89% 6.22% n/a 6.35%
C/C.A.R. Fund 5.70% 6.08% n/a 5.75%
C/FUND
PORTFOLIO OF INVESTMENTS
December 31, 1998
Shares Value
EQUITIES 77.4%
Automotive(2.7%)
Ford Motor Company 2,000 $117,500
General Motors 2,000 140,625
Sector Total 258,125
Building Supplies(1.9%)
Home Depot 3,000 183,562
Chemicals(12.3% )
American Home Products 4,000 225,500
Bristol Myer Squibb 2,000 266,125
Colgate Palmolive 2,000 186,875
Dow Chemical 1,000 91,000
DuPont 1,500 84,562
Merck 1,000 147,688
Proctor & Gamble 1,500 138,469
Union Carbide Corp. 875 37,406
Sector Total 1,177,625
Communications (0.8%)
AT&T 1,000 76,375
Computer/Office Equipment (3.95)
IBM 2,000 370,625
Diversified Investment Trust (10.6%)
Diamonds Trust Series 1 11,000 1,014,750
Diversified Manufacturing (1.5%)
Minnesota Mining & 2,000 147,875
Manufacturing
Eating & Drinking Places (0.7%)
McDonald's 875 67,922
Electronics (4.5%)
General Electric 1,500 152,719
Hewlett Packard 875 60,047
Lucent Technologies 2,000 220,875
Sector Total 433,641
Financial (2.6%)
American Express 875 90,563
Citigroup Inc. 1,312 65,600
J. P. Morgan 875 92,750
Sector Total 248,913
Food (7.8%)
Archer-Daniels-Midland 8,244 139,118
Coca Cola Co. 1,225 81,922
Lancaster Colony Corp. 3,000 96,000
PepsiCo 4,000 163,000
Philip Morris 5,000 269,687
Sector Total 749,727
Food Stores (2.0%)
Albertsons 3,000 191,250
Health Care (1.8%)
Johnson & Johnson 875 73,500
Gillette 2,000 96,750
Sector Total $170,250
C/FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1998
Shares Value
Industrial Machinery (3.5%)
Black & Decker 3,000 $170,625
Caterpillar, Inc. 1,500 70,875
Parker Hannefin Corp. 3,000 97,125
Sector Total 338,625
Instruments (2.8%)
Eastman Kodak 2,000 145,125
Emerson Electric 2,000 124,875
Sector Total 270,000
Leisure/Entertainment (0.8%)
Walt Disney Co. 2,625 78,914
Metal (0.7%)
ALCOA 875 65,461
Paper (1.5%)
International Paper Co. 875 39,320
Kimberly-Clark 2,000 108,750
Sector Total 148,070
Petroleum & Coal (5.05)
Amoco 2,000 116,000
Chevron Corp. 875 72,625
Exxon Corp. 4,000 293,750
Sector Total 482,375
Railroad (1.4%)
CSX Corp. 1,000 41,500
Union Pacific 2,000 90,500
Sector Total 132,000
Retail (4.3%)
Sears. Roebuck 2,000 85,500
Wal-Mart 4,000 325,750
Sector Total 411,250
Rubber & Plastics (0.55)
Goodyear Tire & Rubber 875 44,133
Transportaiton Equipment (2.2%)
Allied Signal 1,500 66,750
Boeing Co. 1,500 49,312
United Technologies 825 90,183
Sector Total 206,245
Transportation Services (1.65)
GATX Corp. 4,000 152,000
TOTAL EQUITIES (77.4%) 7,419,713
GOVERNMENTS (13.5%)
U. S. Treasury Notes 8% 1,200,000 1,289,250
due 05/15/2001
CASH AND EQUIVALENTS (9.1%) 874,911
TOTAL INVESTMENTS (100%) $9,583,874
C/GROWTH STOCK FUND
PORTFOLIO OF INVESTMENTS
December 31, 1998
Shares Value
EQUITIES 83.4%
Apparel & Textiles (0.6%)
Abercrombie & Fitch A 200 $14,175
Buckle & Co, Inc. 200 4,775
Sector Total 18,950
Automotive (1.1%)
Autozone, Inc. 1,000 33,000
Building Supplies (3.9%)
Home Depot 2,000 122,375
Business Services (7.3%)
America Online 400 58,700
H B O & Co. 200 5,750
Keane Inc. 200 8,000
Metris Companies 1,000 49,875
Omnicom Group, Inc. 500 28,875
Robert Half, International, Inc. 500 22,313
Triad Guaranty Inc. 2,100 46,331
Excite Inc. 200 8,537
Sector Total 228,381
Chemicals (2.5%)
Biogen 200 16,463
Centocor Inc. 200 9,025
Medco Research 2,000 52,250
Sector Total 77,738
Communication (0.5%)
Airtouch Communications 200 14,513
Computer & Networking Euqipment (18.85)
Ascend Communications 200 13,088
3COM Corp 200 9,025
Cisco Systems 1,500 139,313
Compaq Computer 3,200 135,600
Crystal Systems Solutions 4,400 45,100
Dell Computer 200 14,613
Gateway 200 10,250
International Business Machines 800 148,250
Legato Systems 200 13,275
Lucent 200 22,087
Lexmark International 200 19,662
Sun Microsystems 200 17,212
Sector Total 587,475
Eating & Drinking Places (0.3%)
Papa John's International 200 8,825
Electronics (8.3%)
American Power Conversion 3,000 145,313
ADC Telecommunications 2000 7,000
DSP Communications 3,000 45,000
Radica Games Ltd. 3,000 41,625
Sanmina 200 12,412
Vitessa Semiconductor 200 9,050
Sector Total 260,400
Financial (5.9%)
Americredit Corp. 3,400 46,113
Commercial Bankshares 3,150 72,450
Countrywide Credit 1,300 65,406
Sector Total $183,969
C/GROWTH STOCK FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1998
Shares Value
Food Stores (1.7%)
Food Lion 5,000 $52,812
Furniture (3.0%)
Hillenbrand Industries 1,500 85,313
Bed, Bath & Beyond 200 6,875
Sector Total 92,188
Industrial Machinery & Equipment (0.5%)
EMC Corporation 200 17,000
Instruments (6.25)
Guidant Corp. 400 43,775
Genentech Inc Spl Com 200 15,937
Sofamor/Danek Group 200 24,350
Stryker Corp. 2,000 110,125
Sector Total 194,187
Insurance (3.0%)
American International Group 300 28,913
Express Scripts "A" 200 13,100
Medical Assurance 200 6,625
Prepaid Legal Services 1,400 46,112
Sector Total 94,750
Leisure/Entertainment (4.6%)
Carnival Corp Class 'A' 2,000 96,125
Steiner Leisure LTD 1,500 47,812
Sector Total 143,937
Metal (1.6%)
Omniquip International 3,400 51,000
Retail (2.3%)
C D W Computer Centers 200 19,450
Kohls Corp. 200 12,287
Wal-Mart Stores 500 40,719
Sector Total 72,456
Software (9.6%)
BMC Software 200 8,900
Computer Associates 1,500 64,031
Check Point Software 1,100 50,050
Compuware Corp. 200 15,625
Citrix Systems 200 19,475
Microsoft 200 27,825
Neomagic Corp. 2,000 44,125
PeopleSoft 200 3,788
Summit Design, Inc. 5,200 47,450
Tech Data Corp. 200 8,200
Veritas Software 200 12,000
Sector Total 301,469
Special Trade Contractor (1.7%)
Cal Dive International 2,600 53,950
TOTAL EQUITIES (83.4%) 2,609,375
CASH AND EQUIVALENTS (16.6%) 518,256
TOTAL INVESTMENTS (100%) $3,127,631
ADAMS EQUITY FUND
PORTFOLIO OF INVESTMENTS
December 31, 1998
Shares Value
EQUITIES 98.5%
Automotive (15.1%)
Daimler Chrysler Benz 500 $47,969
Kellstrom Industries 3,000 84,750
Sector Total 132,719
Building Contractors (6.4%)
Standard Pacific Corp 4,000 56,500
Business Services (10.8%)
Barra, Inc. 1,500 35,062
Investors Financial Service 1,000 60,625
Sector Total 95,687
Computers & Technology (2.1%)
Trans-Lux 2,000 18,250
Diversified Manufacturing (2.5%)
Leggett & Platt Inc 1,000 21,750
Electronics (14.8%)
C and D Technologies 2,700 70,200
Del Global Technologies 4,000 46,000
Porta Systems Inc. 7,000 14,000
Sector Total 130,200
Financial (6.9%)
Conseco, Inc. 2,000 61,125
Industrial Machinery (9.4%)
DT Industries 2,000 31,500
Gleason Corp 500 9,063
Nortek Inc. 1,500 42,562
Sector Total 83,125
Metal (9.0%)
Amcast 2,500 47,813
Wyman Gordon 3,000 31,312
Sector Total 79,125
Paper (10.3%)
Drypers Corp 9,000 29,250
Shorwood Packaging Co. 3,000 61,313
Sector Total 90,563
Rubber & Plastics (7.5%)
Wynn's International Inc. 3,000 66,000
Transportation Equipment (3.7%)
R&B Inc. 4,000 32,750
TOTAL EQUITIES (98.5%) 867,794
CASH AND EQUIVALENTS (1.5%) 12,923
TOTAL INVESTMENTS (100%) $880,717
C/GOVERNMENT FUND
PORTFOLIO OF INVESTMENTS
December 31, 1998
Par Value Value
GOVERNMENTS (92.7%)
U.S. Treasury Notes 11.75% 500,000 $570,781
due 02/15/2001
U.S. Treasury Notes 5.875% 500,000 506,406
due 02/15/2000
U.S. Treasury Notes 5.875% 1,000,000 1,055,000
due 02/15/2004
U.S. Treasury Notes 6.25% 1,000,000 1,057,188
due 02/15/2003
U.S. Treasury Notes 6.25% 1,000,000 1,050,938
due 08/31/2002
U.S. Treasury Notes 6.5% 1,000,000 1,109,375
due 10/15/2006
U.S. Treasury Notes 6.5% 1,000,000 1,095,625
due 05/15/2005
U.S. Treasury Notes 6.75% 500,000 505,156
due 06/1999
U.S. Treasury Notes 7.625% 1,000,000 1,080,625
due 02/15/2007
U.S. Treasury Notes 8% due 1,000,000 1,074,375
05/15/2001
TOTAL GOVERNMENTS (92.7%) 9,105,469
CASH AND EQUIVALENTS (7.3%) 717,478
TOTAL INVESTMENTS (100%) $9,822,947
C/COMMUNITY ASSOCIATION RESERVE FUND
PORTFOLIO OF INVESTMENTS
December 31, 1998
Par Value Value
GOVERNMENTS (93.0%)
U.S. Treasury Notes 5.875% 50,000 $50,156
due 03/31/1999
U.S. Treasury Notes 6.00% 150,000 151,500
due 10/15/1999
U.S. Treasury Notes 6.875% 200,000 205,188
due 03/31/2000
U.S. Treasury Notes 7.00% 150,000 150,984
due 04/15/1999
U.S. Treasury Notes 8.00% 100,000 107,438
due 05/15/2001
TOTAL GOVERNMENTS (93.0%) 665,266
CASH AND EQUIVALENTS (7.0%) 49,700
TOTAL INVESTMENTS (100%) $714,966
C/FUNDS GROUP, INC.
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1998
C/Comm
unity
Associa
C/Growth C/Govern tion Adams
Stock ment Reserve Equity
C/Fund Fund Fund Fund Fund
Securities at Cost $6,337,453 $2,095,215 $9,547,012 $711,271 $834,294
ASSETS
Securities value $9,583,875 $3,127,631 $9,822,947 $714,966 $880,717
Receivables
Dividends & interest 20,449 2,703 163,301 9,529 555
Investment securities
sold 0 22 0 0 8,778
9,604,323 3,130,356 9,986,248 724,495 890,050
LIABILITES
Advisor fee & other
payables 5,103 1,716 3,693 263 492
Investment securities
purchased 739,150 46,910 0 0 0
744,253 48,626 3,693 263 492
NET ASSETS APPLICABLE TO OUTSTANDING SHARES
$8,860,070 $3,081,730 $9,982,555 $724,232 $889,558
CAPITAL SHARES 372,377 194,538 975,821 72,179 69,830
NET ASSET VALUE PER SHARE $23.79 $15.84 $10.23 $10.03 $12.74
C/FUNDS GROUP, INC.
STATEMENTS OF OPERATIONS
For the Year Ending December 31, 1998
C/Comm
unity
Associa
C/Growth C/Govern tion Adams
Stock ment Reserve Equity
C/Fund Fund Fund Fund Fund
INVESTMENT INCOME
Dividends $103,611 $14,858 $0 $0 $8,593
Interest 130,451 18,647 489,519 51,105 2,250
234,062 33,505 489,519 51,105 10,843
OPERATING EXPENSES
Investment advisory fee 79,410 27,174 38,399 4,120 12,214
Professional fees 13,966 4,177 3,998 776 2,033
Registration fees 2,778 810 728 77 380
Custodian fees 27,069 9,845 26,070 2,518 3,922
Directors fees 6,484 2,166 1,692 215 1,091
Printing 684 522 492 86 235
Miscellaneous 2,958 1,039 939 105 465
133,349 45,733 72,318 7,897 20,340
NET INVESTMENT INCOME (LOSS) 100,713 (12,228) 417,201 43,208 (9,497)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Change in unrealized appreciation (depreciation) in value of investments
for the year 1,108,922 414,834 222,195 (354) (144,540)
Net realized gain (loss) on investments
335,753 132,755 0 437 (12,064)
NET GAIN (LOSS) ON INVESTMENTS
1,444,675 547,589 222,195 83 (156,604)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FORM OPERATIONS
$1,545,888 $535,361 $639,396 $43,291 ($166,101)
C/FUNDS GROUP, INC.
STATEMENTS OF CHANGES IN NET ASSETS
For the Year Ending December 31, 1998
C/Comm
unity
Associa
C/Growth C/Govern tion Adams
Stock ment Reserve Equity
C/Fund Fund Fund Fund Fund
INCREASE (DECREASE) IN NET ASSETS
From Operations:
Net investment income (loss)
$100,713 ($12,228) $417,201 $43,208 ($9,497)
Net realized gain (loss) on investments
335,753 132,755 0 437 (12,064)
Unrealized appreciation (depreciation) in value of investments for the year
1,108,922 414,834 222,195 (354) (144,540)
Net increase (decrease) in net assets from operations
1,545,388 535,361 639,396 43,291 (166,101)
DISTRIBUTIONS TO SHAREHOLDERS
Investment income - net (99,926) 0 (417,200) (43,207) 0
Net realized gain on investments
(334,943) (132,387) 0 0 0
(434,869) (132,387) (417,200) (43,207) 0
CAPITAL SHARE TRANSACTIONS
Shares sold 1,814,668 328,020 8,532,493 475,625 164,405
Reinvested distributions 416,606 127,950 363,296 43,207 0
Shares redeemed (1,619,121) (318,564)(3,678,135) (648,518) (385,388)
612,153 137,406 5,217,654 (129,686) (220,983)
Net increase (decrease) in net assets
$1,722,672 $540,380 $5,439,850 ($129,602) ($387,084)
NET ASSETS
Beginning of year 7,137,398 2,541,350 4,542,705 853,834 1,276,642
End of year $8,860,070 $3,081,730 $9,982,555 $724,232 $889,558
UNDISTRIBUTED INVESTMENT GAIN (LOSS)
$2,755 $358 ($163,912) $180 ($16,601)
C/FUNDS GROUP, INC.
STATEMENTS OF CHANGES IN NET ASSETS
For the Year Ending December 31, 1997
C/Comm
unity
Associa
C/Growth C/Govern tion Adams
Stock ment Reserve Equity
C/Fund Fund Fund Fund Fund
INCREASE (DECREASE) IN NET ASSETS
From Operations:
Net investment income (loss)
$77,409 ($15,997) $254,823 $43,474 ($8,178)
Net realized gain (loss) on investments
190,158 326,059 3 486 (4,536)
Unrealized appreciation (depreciation) in value of investments for the year
882,869 206,979 60,849 (288) 156,438
Net increase in net assets from operations
1,150,436 517,041 315,675 43,672 143,724
DISTRIBUTIONS TO SHAREHOLDERS
Investment income - net (82,342) (25,711) (254,824) (43,818) 0
Net realized gain on investments
(185,102) (284,311) 0 0 0
(267,444) (310,022) (254,824) (43,818) 0
CAPITAL SHARE TRANSACTIONS
Shares sold 1,360,777 140,465 3,195,844 641,261 972,475
Reinvested distributions 258,335 295,689 221,437 43,818 0
Shares redeemed (786,612) (313,644) (3,672,863) (379,259) 93,349)
832,500 122,510 (255,582) 305,820 879,126
Net increase (decrease) in net assets
$1,715,492 $329,529 ($194,731) $305,674 $1,022,850
NET ASSETS
Beginning of year 5,421,906 2,211,821 4,737,436 548,160 253,792
End of year $7,137,398 $2,541,350 $4,542,705 $853,834 $1,276,642
UNDISTRIBUTED INVESTMENT GAIN (LOSS)
$1,159 $41 ($163,912) $0 ($4,536)
C/FUNDS GROUP, INC.
SUPPLEMENTARY INFORMATION - SELECTED PER SHARE DATA AND RATIOS (1)
For the Periods Ended December 31, 1998, 1997, 1996, 1995, and 1994
Net Dis
Rea tribu
lised tions
Dis and from Net
tribu Unrea Net Dis Asset
tions lized Rea tribu Value Net
Net from Gain lized tions at Asset
Opera Invest Net (Loss) Gains from Begin Value
Invest ting ment Invest on on Return Total ning End
ment Expe Income ment Invest Invest of Cap Net of of
Income nses (Loss) Income ments ments ital Change Period Period
C/Fund
1998 .66 (.38) .28 (.72) 4.12 (.50) .00 3.18 $20.61 $23.79
1997 .60 (.36) .24 (.26) 3.50 (.58) .00 2.90 17.71 20.61
1996 .53 (.34) .19 (.19) 2.56 (1.58) (6)(.10) .88 16.83 17.71
1995 .50 (.29) .21 (.21) 3.42 (.54) .00 2.88 13.95 16.83
1994 .59 (.25) .34 (.36) (.55) (.49) (6)(.06) (1.12) 15.07 13.95
C/Growth Stock Fund
1998 .18 (.24) (.06) .00 2.96 (.71) .00 2.19 $13.65 $15.84
1997 .16 (.26) (.10) (.15) 3.20 (1.68) .00 1.27 12.38 13.65
1996 .18 (.23) (.05) .00 2.24 (1.08) (6)(.01) 1.10 11.28 12.38
1995 .22 (.20) .02 (.02) 2.13 (.19) .00 1.94 9.34 11.28
1994(4) .18 (.19) (.01) (.01) (.90) 0 (6)(.01) (.93) 10.27 9.34
C/Government Fund
1998 .64 (.10) .54 (.55) .22 .00 .00 .22 $10.01 $10.23
1997 .67 (.10) .57 (.57) .14 .00 .00 .14 9.87 10.01
1996 .66 (.10) .56 (.56) (.15) .00 .00 (.15) 10.02 9.87
1995 .64 (.10) .54 (.54) .58 .00 .00 .58 9.44 10.02
1994 .53 (.09) .44 (.44) (.47) .00 (6)(.02) (.49) 9.93 9.44
C/Community Association Reserve Fund(5)
1998 .62 (.10) .52 (.52) .03 .00 .00 .03 $10.00 $10.03
1997 .61 (.05) .56 (.60) .04 .00 .00 .00 10.00 10.00
1996 .58 .00 .58 (.58) .00 .00 .00 .00 10.00 10.00
1995 .60 .00 .60 (.60) .00 .00 .00 .00 10.00 10.00
1994 .59 .00 .59 (.59) .00 .00 .00 .00 10.00 10.00
Adams Equity Fund
1998 .12 (.23) (.11) .00 (1.05) .00 .00 (1.16) $13.90 $12.74
1997 .13 (.23) (.10) .00 2.18 .00 .00 2.08 11.82 13.90
1996 .17 (.15) .02 .00 2.62 (.64) .00 2.00 9.82 11.82
1995(2)(3).06(.03) .03 (.02) (.19) .00 .00 (.18) 10.00 9.82
(1)Selected data for a share of capital stock outstanding throughout the year.
(2)Inception of fund is October, 1995.
(3)Ratio of operating expenses to average net assets has been annualized.
(4)Adjusted to reflect elimination of expense reimbursement from Advisor.
(5)See Footnote I.
(6)Fund paid dividend by return of principal.
C/FUNDS GROUP, INC.
SUPPLEMENTARY INFORMATION - SELECTED PER SHARE DATA AND RATIOS (1)
For the Periods Ended December 31, 1998, 1997, 1996, 1995, and 1994
Net
Operating Investment Shares
Expenses Income to Portfolio Outstanding
to Average Average Turnover at End of
Net ASsets Net Assets Rate Period
C/Fund
1998 1.68% 1.27% 17.58% 372,377
1997 1.79% 1.24% 10.28% 346,376
1996 1.90% 1.05% 11.38% 306,141
1995 1.85% 1.36% 5.46% 258,646
1994 1.83% 2.53% 23.84% 272,891
C/Growth Stock Fund
1998 1.68% (.45%) 88.47% 194,538
1997 1.81% (.68%) 51.11% 186,130
1996 1.90% (.45%) 4.26% 178,680
1995 1.85% .20% 16.46% 184,398
1994(4) 1.87% (.16%) 37.23% 147,699
C/Government Fund
1998 .96% 5.55% .00% 975,821
1997 1.01% 5.74% 22.05% 453,930
1996 1.02% 5.60% 59.95% 479,954
1995 .99% 5.54% 124.70% 396,280
1994 1.15% 5.75% 122.48% 554,009
C/Community Association Reserve Fund(5)
1998 .96% 5.28% 14.20% 72,179
1997 .14% 6.21% 52.64% 85,402
1996 .00% 5.83% 9.61% 54,820
1995 .00% 5.96% 41.35% 42,960
1994 .00% 8.76% .00% 5,875
Adams Equity Fund
1998 1.70% (.79%) 70.86% 69,830
1997 1.74% (.75%) 48.17% 91,852
1996 1.36% .18% 65.00% 21,468
1995(2)(3) 1.16% .32% .00% 14,935
(1)Selected data for a share of capital stock outstanding throughout the year.
(2)Inception of fund is October, 1995.
(3)Ratio of operating expenses to average net assets has been annualized.
(4)Adjusted to reflect elimination of expense reimbursement from Advisor.
(5)See Footnote I.
C/FUNDS GROUP, INC.
C/FUND, C/GROWTH STOCK FUND, C/GOVERNMENT FUND,
C/COMMUNITY ASSOCIATION RESERVE FUND, AND ADAMS EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
NOTE A - ORGANIZATION
C/FUNDS Group, Inc. (the Company), formerly Caldwell Fund, Inc., is
registered under the Investment Company Act of 1940, as amended, as an open-
end diversified investment company. Effective July 2, 1985, C/FUNDS Group,
Inc., shares were registered under Section 8(a) of the Securities Act of
1933. The Caldwell Fund was the only fund offered by the Company through
June, 1992. Effective July, 1992, four new funds were made available and
the Caldwell Fund was renamed C/Fund. The Adams Equity Fund was made
available in October, 1995. Effective December, 1997, an additional fund,
the Beebe Fund, was made available. In December, 1998, the C/Tax-Free Fund
and the Beebe Fund were closed. A separate Financial Statement is available
for these closed funds. The primary investments of the five open funds are
listed as follows:
FUNDS PRIMARY INVESTMENTS
C/Fund Stocks and Fixed Income
formerly Caldwell Fund Securities
C/Growth Stock Fund Common Stocks or Equivalents
formerly Caldwell Growth Stock Fund
C/Government Fund Obligations of the U.S.
formerly Caldwell Government Fund Government
C/Community Association Reserve Fund Obligations of the U.S.
formerly Caldwell Community Government
Association Reserve Fund
Adams Equity Fund Stocks
NOTE B - SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies are in accordance with
accounting policies generally accepted in the investment company industry.
Security Valuation - Investments in securities traded on a national
exchange are stated at the last reported sales price on the day of
valuation; other securities traded in over-the-counter market and listed
securities for which no sale was reported on that date are stated at the
last quoted bid price. Restricted securities and other securities for which
quotations are not readily available are valued at fair value as determined
by the Board of Directors.
Investment Income - Dividend income is recorded as of the ex-dividend date.
Interest income is recognized on the accrual basis. Discounts and
premiums on securities purchased are not amortized over the life of the
respective security. Realized gains and losses are determined on the
identified cost basis.
Distributions to shareholders - Dividends to shareholders are recorded on
the ex-dividend date.
Income Tax Status - No provision for income taxes is included in the
accompanying financial statements as the Company regularly distributes to
shareholders its taxable investment income and realized gains under
provision of the Internal Revenue Code applicable to regulated investment
companies.
Security Transactions - The Company follows industry practice and records
security transactions on the trade date.
Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those estimates.
NOTE C - INVESTMENT ADVISORY AGREEMENT
Each fund has a written agreement (the "Agreements") for management and
investment advisory services with Omnivest Research Corporation (the
"Advisor") which is owned 100% by Trust Companies of America, Inc. (TCA),
which is controlled by its President and his family. The Agreements provide
for advisor fees to be computed on the average daily net asset value. Under
terms of the agreements, each Fund's total expenses cannot exceed 2% of the
Fund's average daily net asset value in any one year. Expenses in excess of
2% shall be paid by the Advisor. Annual percentage rates provided by the
Agreements in computing investment advisory fees and the fees incurred in
1998 are as follows:
ANNUAL INVESTMENT
FUND % RATE ADVISORY FEES
C/Fund 1.0 $79,410
C/Growth Stock Fund 1.0 27,174
C/Government Fund .5 38,399
C/Community Association Reserve Fund .5 4,120
Adams Equity Fund 1.0 12,214
C/FUNDS GROUP, INC.
C/FUND, C/GROWTH STOCK FUND, C/GOVERNMENT FUND,
C/COMMUNITY ASSOCIATION RESERVE FUND, AND ADAMS EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
NOTE D - FUND SHARE TANSACTONS AND DISTRIBUTIONS
As of December 31, 1998 and 1997 there were 5,000,000 shares of .01 par
value capital shares authorized. Transactions of the Funds were as
follows:
C/Comm
unity
Associa
C/Growth C/Govern tion Adams
Stock ment Reserve Equity
C/Fund Fund Fund Fund Fund
Period ended December 31, 1998
Shares sold 80,660 22,220 849,231 47,089 11,757
Reinvested distributions 17,565 8,078 35,803 4,304 0
Shares redeemed (72,224) (21,890) (363,143) (64,616) (33,779)
Net increase (decrease) 26,001 8,408 521,891 (13,223) (22,022)
Period ended December 31, 1997
Shares sold 67,712 10,049 323,575 64,126 76,975
Reinvested distributions 12,551 21,662 22,449 4,382 0
Shares redeemed (40,028) (24,261) (372,048) (37,926) (6,591)
Net increase (decrease) 40,235 7,450 (26,024) 30,582 70,384
NOTE E - INVESTMENT TRANSACTIONS
Purchases and sales of investment securities and the accumulated unrealized
gain (loss) of the funds were as follows for 1998:
C/Comm
unity
Associa
C/Growth C/Govern tion Adams
Stock ment Reserve Equity
C/Fund Fund Fund Fund Fund
Common Stocks
Purchases $2,220,935 $2,067,972 $0 $0 $818,287
Sales 756,412 2,155,650 0 0 1,063,314
Municipal Bonds
Purchases 0 0 0 0 0
Sales 0 0 0 0 0
U.S. Government Obligations
Purchases 0 0 5,219,524 106,548 0
Sales 586,340 0 0 250,194 0
Unrealized appreciation (depreciation) of securities
$3,246,421 $1,032,416 $275,935 $3,695 $46,423
NOTE F - TRANSACTIONS WITH AFFILIATES
In addition to the investment advisory fees discussed in NOTE C, the Funds
pay fees to other related entities, all of which are 100% owned by TCA,
primarily for custodianship of assets and computer processing and
programming. Total fees paid to TCA subsidiaries for services other than
investment advising aggregated approximately $73,600 for 1998.
The number of shares held by the President of the Company, employees of the
Advisor, and other affiliated persons at December 31, 1998 are as follows:
SHARES VALUE
C/Fund 39,218 $933,000
C/Growth Stock Fund 7,359 $116,569
C/Government Fund 23,770 $243,165
Adams Equity Fund 15,818 $201,517
NOTE G - MARKET RISK
The Fund is exposed to credit risk on the amount invested in marketable
securities. The maximum amount of loss the Fund would incur is limited to
the amount recorded in the 1998 financial statements. The Fund does not
hold any collateral on the marketable securities. This exposure to risk is
customary for all entities which have invested in financial instruments.
NOTE H - BROKER ALLOCATIONS
The placement of orders for the purchase and sale of portfolio securities
is made under the control of the Advisor, subject to the overall
supervision of the Board of Directors. The Advisor is permitted to and does
select broker-dealer firms, which provide economic, corporate, and
investment research service. Commissions paid to firms supplying such
research include the cost of such services. The value of such services,
for the Company, aggregated $40,957 for the year ended December 31, 1998.
NOTE I - C/COMMUNITY ASSOCIATION RESERVE FUND
Through 1997, the investment advisor absorbed substantially all investment
expenses of the C/C.A.R. Fund, including their advisory fees. In addition,
the advisor guaranteed a $10 per share value. Since inception, an asset or
liability to the investment advisor was accrued by the C/C.A.R. Fund to the
extent necessary to maintain the $10 per share value. At December 31, 1997
the fund reflected a $3,732 liability to the investment advisor. Effective
February 13, 1998 the Fund began calculating its NAV at actual and the
Fund's liability to the investment advisor was forgiven. Appropriate
adjustments were made to net assets and to shareholder accounts.
REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
To The Shareholders and Board of Directors
C/FUNDS Group, Inc.
Venice, Florida
We have audited the statements of assets and liabilities, including the
portfolio of investments, of the C/Fund, C/Growth Stock Fund, C/Government
Fund, C/Community Association Reserve Fund, and Adams Equity Fund (five of
the portfolios constituting the C/FUNDS Group, Inc.) as of December 31,
1998, and the related statements of operations for the period then ended,
the statements of changes in net assets for each of the two periods in the
period then ended, and the selected per share data and ratios for each of
the five periods in the period then ended. These financial statements and
per share data and ratios are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and per share data and ratios based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements and per
share data and ratios are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 1998, by correspondence with the
custodian, and examination of supporting documentation for unsettled
security purchases. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and selected per share data and
ratios referred to above present fairly, in all material respects, the
financial position of the C/Fund, C/Growth Stock Fund, C/Government Fund,
C/Community Association Reserve Fund, and Adams Equity Fund portfolios of
the C/FUNDS Group, Inc. as of December 31, 1998, the results of their
operations for the period then ended, the changes in their net assets for
each of the two periods in the period then ended, and the selected per
share data and ratios for each of the five periods in the period then
ended, in conformity with generally accepted accounting principles.
GREGORY, SHARER & STUART
St. Petersburg, Florida
January 22, 1999
Investment Advisor
Omnivest Research Corporation
250 Tampa Avenue West
Venice, FL 34285
(941) 493-4295
Custodian
Caldwell Trust Company
201 Center Road Suite 2
Venice, FL 34292
(941) 493-3600
Auditors
Gregory Sharer & Stuart
Certified Public Accountants
100 Second Avenue South
St. Petersburg, FL 33701-4383
(727) 821-6161
Investment Advisory Board
Arthur B. Laffer, Ph.D., Economist
Alan Reynolds, Economist
Alvin Moscow, Author
Ted C. Van Antwerp, Philanthropist
Willet J. Worthy, Jr., Vintner
Manuel Johnson, Ph.D., Economist
Charles G. Callard, Research Analyst
Christopher J. Pecheux, Research Analyst
This report has been prepared for the information of shareholders of
the Funds and is not authorized for distribution to Investors unless
preceded or accompanied by an effective Prospectus which includes
information regarding the Funds' objectives, policies, management,
records, and other information.
