<PAGE> 1
[PROVIDENT MUTUAL LETTERHEAD]
FEBRUARY, 2000
Dear Policyholder:
We are pleased to send you the annual report for one of the fund groups from
your variable life insurance policy or variable annuity contract. In additional
mailings, you will also receive the annual reports of other fund groups in which
you have invested. The investments available through your variable policies or
contracts are managed by some of the best fund management companies in the
country.
Your variable insurance product is unique in that it combines the protection and
tax advantages of traditional insurance with the growth potential of equity
investments. A leader in the variable products marketplace, Provident Mutual
Life Insurance Company can trace its roots back more than two centuries. Our
financial strength enables us to continually offer a variety of life insurance
policies and annuity contracts designed to help you meet your needs as you move
through the various stages of your life.
We are proud to serve you as one of our policyholders, and we appreciate your
business. If you have a question about your policy, or would like more
information about our products and services, please contact your local agent or
our Customer Service Center at 1-800-688-5177.
Sincerely,
/s/ Robert W. Kloss
Robert W. Kloss
President, Chairman and CEO
Securities offered through 1717 Capital Management Company, A Registered
Investment Adviser. Member NASD, SIPC.
[LOGO]
<PAGE> 2
- --------------------------------------------------------------------------------
To Our Variable Life Policyholders and Variable Annuity Contractholders:
- --------------------------------------------------------------------------------
We are pleased to send you the 1999 Annual Report for the Market Street Fund,
Inc., its Growth, Money Market, Bond, Managed, Aggressive Growth, International,
Sentinel Growth, All Pro Large Cap Growth, All Pro Large Cap Value, All Pro
Small Cap Growth and All Pro Small Cap Value Portfolios. This year we are
pleased to report the outstanding performance of the All Pro Small Cap Growth
Portfolio, which returned 92.14% for the year ended December 31, 1999, compared
to 52.55% for the Wilshire Small Cap Growth Index, the style benchmark with
which we compare the Portfolio's performance. In an effort to continuously
expand our menu of investment choices, we look forward to the introduction in
early February 2000 of the Market Street Fund Equity 500 Portfolio.
Economic Overview and Investment Perspective
During 1999, the U.S. economy continued to prove its resilience and defied
economists' forecasts of lower growth. Despite fears of inflation and increasing
interest rates, the economy expanded 4%. Continuing to drive the economy forward
was consumer spending and business investment. Inflation, as measured by the
Consumer Price Index, rose 2.7% for the year. Although that was higher than the
1.6% increase of 1998, most of the runup was due to higher energy prices. At the
end of 1999, unemployment stood at 4.1%. In the financial markets, 1999 will be
remembered for the large divergence of returns between bonds and equities.
Domestic and international equities posted sharp increases, while bonds suffered
their second worst year in 25 years as interest rates rose sharply.
Fueled by fears of inflation and worries about Y2K disruptions, the U.S. fixed
income markets saw ever-increasing interest rates and continuing declines in
prices. In an effort to prevent the economy form overheating, the Federal
Reserve instituted three hikes in the Federal Funds rate. The first 25 basis
point increase occurred in June followed by two additional increases of 25 basis
points each in August and November. These rate increases completely reversed the
rate cuts implemented in 1998. The Lehman Aggregate Bond Index, a benchmark for
all types of bonds fell 0.8% in 1999. U.S. Treasuries were the worst performers,
with the yield on the 30-year U.S. Treasury bond increasing from 5.1% to 6.5%,
producing a total return of -14.78% for the year.
U.S. domestic equity markets surged in 1999 and returned 23.6% as measured by
the Wilshire 5000 Equity Index. Other indices posted record returns. Led by
technology and Internet related stocks, the NASDAQ Composite Index produced a
record return of 85.6% and the Russell 2000 Index of small capitalization
stocks, a once moribund index, posted a 21.4% return. The S&P 500 Index rose
21.1%, the fifth consecutive year of double digit returns. However, not all
stocks shared equally in the strong rally. The divergence of returns within
equities was even more pronounced than that between equities and bonds. Fueled
by the technology and Internet related sectors, growth stocks continued to
out-perform value stocks across all capitalization levels. The Wilshire Large
Cap Growth Index returned 34.7% for the year as compared to an 8.3% return for
the Wilshire Large Cap Value Index. Meanwhile, the Wilshire Small Cap Growth
Index returned 52.6% as compared to -1.4% return for the Wilshire Small Cap
Value Index.
For the first time in five years, international equities outperformed U.S.
equities in 1999. Total return of international equities as measured by the
Morgan Stanley Capital International (MSCI) EAFE Index, was 27.3% for the year,
6.2% higher than the S&P 500 Index. As in the U.S., growth stocks in the
technology and telecommunications sectors dominated and ac-
1
<PAGE> 3
counted for most of the gains. The impressive returns were powered by impressive
rebounds in the Japanese, Asian, and Latin American stock markets. The biggest
surprise was the resurgence of emerging markets, which led the way, producing a
total return of 68.8% as measured by the MSCI Emerging Markets Index. The Asian
emerging markets rebounded after economic growth improved quicker than expected.
Another surprise was Japan. Corporate restructuring and steps taken by the
Japanese government to shore up the financial system and spur the economy
reversed the downward trend experienced for most of the 1990s. In Europe,
developed markets posted a respectable gain, but were held back by a weak Euro,
while Russian markets recovered strongly from currency devaluation suffered in
1998.
Looking forward into the year 2000, caution is key because volatility will
continue. Once again, the forecast is for moderate U.S. economic expansion and
continuing world economic recovery and productivity gains. The Federal Reserve
continues to identify inflation as its biggest concern and has hinted that it
will raise rates to slow the continued drop in unemployment and prevent the
economy from overheating. Will interest rates finally peak and make bonds the
better performers? Given the historically high valuations of U.S. and
international equities, and the concentration of performance in such a narrow
band of the market, it is prudent that diversification be the primary strategy
going forward. The Market Street Fund is positioned to provide you with the
investment options necessary to achieve a well balanced diversified portfolio.
Review of Fund Portfolio Performance
The annual reviews and performance charts* for each portfolio (other than the
Money Market Portfolio) contained in this Annual Report show the growth of
$10,000 over the period shown, assuming reinvestment of all dividends. The
performance is then compared to a relevant index. As always, it is important to
recall in interpreting these results that the advisers and sub-advisers of the
portfolios of the Market Street Fund do not engage in market timing. That is to
say that in all but times of great market turmoil, they endeavor to keep the
vast majority of portfolio assets fully invested. Thus, they attempt to add
value by security selection utilizing the methods and in the markets specified
in the Fund Prospectus. The performance of the portfolios should be judged
according to how well the portfolios do relative to market indices measuring the
same type activity.
We appreciate the opportunity to have served you in the past and look forward to
serving you in 2000 and many years into the future.
/s/ Rosanne Gatta
Rosanne Gatta
President
The Market Street Fund, Inc.
*Past performance is not predictive of future results. Moreover, the
relationship between the performance of the Fund Portfolios and the actual
increases or decreases in a policy's cash value is not directly proportional
due to certain charges deducted from premiums and under the policies which are
not reflected in the returns shown. Please see the current prospectus for an
explanation of these charges and for illustrations that take these charges into
account in calculating cash values.
2
<PAGE> 4
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Report of Independent Accountants
- --------------------------------------------------------------------------------
To the Shareholders and Board of Directors of
Market Street Fund, Inc.:
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Market Street Fund, Inc.,
comprising of the Growth, Money Market, Bond, Managed, Aggressive Growth,
International, Sentinel Growth, All Pro Large Cap Growth, All Pro Large Cap
Value, All Pro Small Cap Growth and All Pro Small Cap Value Portfolios (the
"Fund") at December 31, 1999, and the results of each of their operations for
the year then ended, the changes in each of their net assets for each of the two
years in the period then ended and the financial highlights for each of the five
years in the period then ended, in conformity with accounting principles
generally accepted in the United States. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at December
31, 1999 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
PRICEWATERHOUSECOOPERS LLP
2400 Eleven Penn Center
Philadelphia, Pennsylvania
January 28, 2000
3
<PAGE> 5
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Growth Portfolio
1999 Annual Review
Sentinel Advisors Company
- --------------------------------------------------------------------------------
The Market Street Fund Growth Portfolio produced a total return of 3.0% for
the year ended December 31, 1999. This compares to a 6.4% annual return for the
average Morningstar Large Capitalization Value Fund and 11.2% for the average
Lipper Large-Cap Value Fund. The total returns were substantially below the
21.1% for the S&P 500 Index, the benchmark index with which we compare the
Portfolio's performance.
Although the returns registered for the S&P 500 Index were again very
strong, returns for the technology and Internet laden NASDAQ Composite Index
were truly spectacular during this twelve month period. The stock markets were
strong at the very beginning of the year, and we witnessed an abrupt shift into
more economically sensitive and reasonably valued cyclical stocks during April.
However, as the year wore on, technology, telecommunications and Internet-
related issues began to dominate index returns. For a portfolio managed with an
emphasis on value, this has been an unusually difficult period in which to keep
up with benchmarks that have seen their returns inflated by a number of very
highly valued technology issues.
The domestic economy has remained quite robust. As a result, the Federal
Reserve raised interest rates throughout the year, entirely reversing the
previous year's rate cuts that were designed to prevent international economic
upheaval from derailing the U.S. expansion. Increasing evidence of an enduring
recovery in international economies led us to increase our exposure to basic
industries, energy and global consumer staples companies during 1999. We also
expected a moderation in the increases in domestic consumer spending, and as a
result we reduced exposure to areas, such as retailing, that face an
increasingly leveraged consumer. Although utilities have been poor relative
performers in 1999, we continue to believe that certain well-positioned
companies in this sector merit inclusion in the Portfolio.
The concentrated nature of the markets' recent advance in technology shares
may not be sustainable. While a meaningful correction in these areas is
possible, we are also struck by the compelling value proposition that exists in
a number of the solid companies in which the Portfolio is invested.
We continue to believe that a diversified portfolio of reasonably valued,
high quality stocks will produce attractive risk adjusted returns. After an
unusually long period of growth stock out-performance, a number of factors
suggest to us that a value stock focus may be particularly rewarding to
investors in the year 2000.
Van Harissis, CFA
Daniel J. Manion, CFA
Hilary T. Roper, CFA
4
<PAGE> 6
[MARKET STREET FUND GROWTH PORTFOLIO PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
FUND INDEX+
---- ------
<S> <C> <C>
Start 9995.00 10000.00
85 10177.00 10077.00
86 11325.00 11941.00
87 11511.00 12540.00
88 13348.00 14580.00
89 17794.00 19131.00
90 18220.00 18485.00
91 21590.00 24115.00
92 22614.00 25948.00
93 24924.00 28558.00
94 25522.00 28933.00
95 33279.00 39811.00
96 39794.00 48928.00
97 49472.00 65260.00
98 56250.00 84003.00
99 57926.00 101694.00
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5 YEAR 10 YEAR SINCE INCEPTION*
<S> <C> <C> <C>
2.98% 17.81% 12.53% 13.31%
</TABLE>
Past performance is not predictive of future performance.
+ The Index is the S&P 500, an unmanaged index of 500 U.S. common stocks that
includes reinvestment of dividends.
* Inception date was December 12, 1985.
5
<PAGE> 7
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Growth Portfolio
Statement of Net Assets, December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- -----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK -- 97.7%
Aerospace & Defense -- 0.5%
Boeing Co. ............................................... 35,000 $ 1,454,687
------------
Automobiles -- 2.3%
Ford Motor Co. ........................................... 130,000 6,946,875
------------
Banks -- 5.0%
Bank of America Corp. .................................... 62,238 3,123,570
Bank of New York Co., Inc. ............................... 163,600 6,544,000
Chase Manhattan Corp. .................................... 50,000 3,884,375
Wells Fargo Co. .......................................... 35,000 1,415,312
------------
14,967,257
------------
Beverages -- 3.1%
Pepsico, Inc. ............................................ 264,400 9,320,100
------------
Broadcasting & Publishing -- 2.1%
McGraw-Hill, Inc. ........................................ 105,000 6,470,625
------------
Business & Consumer Services -- 5.4%
Automatic Data Processing, Inc. .......................... 115,000 6,195,625
Electronic Data Systems Corp. ............................ 65,000 4,350,937
Omnicom Group, Inc. ...................................... 57,400 5,740,000
------------
16,286,562
------------
Chemicals & Allied Products -- 3.4%
Du Pont (E.I.) de Nemours & Co. .......................... 37,855 2,493,698
Monsanto Co. ............................................. 215,000 7,659,375
------------
10,153,073
------------
Communications -- 7.3%
AT&T Corp. ............................................... 80,000 4,060,000
Comcast Corp. Special Class A Non-Voting.................. 45,000 2,261,250
*General Instrument Corp. ................................ 40,000 3,400,000
GTE Corp. ................................................ 122,000 8,608,625
Motorola, Inc. ........................................... 8,143 1,199,057
SBC Communications, Inc. ................................. 60,536 2,951,130
------------
22,480,062
------------
Computers -- 3.1%
Compaq Computer Corp. .................................... 36,500 987,781
Hewlett Packard Co. ...................................... 26,000 2,962,375
International Business Machines Corp. .................... 51,000 5,508,000
------------
9,458,156
------------
Consumer Products -- 4.9%
Fortune Brands, Inc. ..................................... 90,400 2,988,850
Kimberly-Clark Corp. ..................................... 180,000 11,745,000
------------
14,733,850
------------
</TABLE>
6
<PAGE> 8
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Growth Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- -----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Cosmetics and Toiletries -- 0.8%
Gillette Co. ............................................. 60,000 $ 2,471,250
------------
Drugs & Health Care -- 9.2%
Aetna, Inc. .............................................. 28,000 1,562,750
American Home Products Corp. ............................. 225,500 8,893,156
Baxter International, Inc. ............................... 40,000 2,512,500
Becton, Dickinson & Co. .................................. 48,300 1,292,025
Bristol-Myers Squibb Co. ................................. 22,000 1,412,125
Johnson & Johnson......................................... 58,000 5,401,250
Pharmacia & Upjohn, Inc. ................................. 100,000 4,500,000
*Tenet Healthcare Corp. .................................. 36,000 846,000
United Healthcare Corp. .................................. 14,000 743,750
*Watson Pharmaceuticals, Inc. ............................ 30,000 1,074,375
------------
28,237,931
------------
Electronics -- 2.0%
Emerson Electric Co. ..................................... 25,000 1,434,375
General Electric Co. ..................................... 29,000 4,487,750
------------
5,922,125
------------
Energy -- 3.8%
Chevron Corp. ............................................ 43,500 3,768,187
FPL Group, Inc. .......................................... 45,000 1,926,562
Royal Dutch Petroleum Co. ................................ 58,500 3,535,594
Williams Cos., Inc. ...................................... 78,000 2,383,875
------------
11,614,218
------------
Entertainment -- 0.8%
Walt Disney Co. .......................................... 86,000 2,515,500
------------
Finance -- 4.0%
American Express Co. ..................................... 30,300 5,037,375
Citigroup, Inc. .......................................... 127,500 7,084,219
------------
12,121,594
------------
Finance - Investment & Other -- 1.2%
Fannie Mae................................................ 56,400 3,521,475
------------
Food & Food Distributors -- 6.1%
Bestfoods, Inc. .......................................... 113,700 5,976,356
Kroger Co. ............................................... 286,000 5,398,250
McCormick & Co., Inc. .................................... 115,400 3,433,150
Sara Lee Corp. ........................................... 160,000 3,530,000
------------
18,337,756
------------
</TABLE>
7
<PAGE> 9
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Growth Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- -----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Industrial Diversified -- 1.9%
Parker-Hannifin Corp. .................................... 109,000 $ 5,593,062
------------
Insurance -- 5.9%
Allstate Corp. ........................................... 115,000 2,760,000
American General Corp. ................................... 63,000 4,780,125
American International Group, Inc. ....................... 58,125 6,284,766
Jefferson-Pilot Corp. .................................... 56,700 3,869,775
------------
17,694,666
------------
Lodging -- 1.4%
Marriott International, Inc. Class A...................... 129,500 4,087,344
------------
Machinery & Heavy Equipment -- 0.5%
Dover Corp................................................ 35,000 1,588,125
------------
Manufacturing -- 2.5%
Alcoa, Inc. .............................................. 70,000 5,810,000
Tyco International Ltd. .................................. 41,500 1,613,313
------------
7,423,313
------------
Medical & Medical Services -- 0.6%
*Manor Care, Inc. ........................................ 106,700 1,707,200
------------
Oil & Gas -- 6.2%
Burlington Resources, Inc. ............................... 80,000 2,645,000
Conoco, Inc. Class B...................................... 168,327 4,187,134
Exxon Mobil Corp. ........................................ 121,989 9,827,739
Santa Fe International Corp. ............................. 67,000 1,733,625
Transocean Sedco Forex, Inc. ............................. 13,552 456,533
------------
18,850,031
------------
Oil Field Equipment & Services -- 2.6%
Halliburton Co. .......................................... 97,500 3,924,375
Schlumberger Ltd. ........................................ 70,000 3,937,500
------------
7,861,875
------------
Paper & Forest Products -- 2.1%
International Paper Co. .................................. 111,000 6,264,563
------------
Railroads -- 1.0%
Union Pacific Corp., Series A............................. 66,000 2,879,250
------------
Real Estate -- 1.5%
Weyerhaeuser Co. ......................................... 62,500 4,488,281
------------
</TABLE>
8
<PAGE> 10
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Growth Portfolio
Statement of Net Assets, December 31, 1999 -- Concluded
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MATURITY SHARES
DESCRIPTION AND PERCENTAGE OF PORTFOLIO DATE OR PAR VALUE
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK (CONTINUED)
Semiconductors -- 0.5%
Intel Corp. ............................................................ 11,000 $ 905,438
*National Semiconductor Corp............................................ 16,100 689,281
------------
1,594,719
------------
Software -- 1.0%
*BMC Software, Inc...................................................... 17,000 1,358,938
Computer Associates International, Inc. ................................ 25,500 1,783,406
------------
3,142,344
------------
Tobacco -- 0.5%
Philip Morris Cos., Inc. ............................................... 68,000 1,576,750
------------
Utilities -- 4.5%
Duke Power Co........................................................... 125,000 6,265,625
Enron Corp.............................................................. 162,000 7,188,750
------------
13,454,375
------------
TOTAL COMMON STOCK (COST $243,579,825)................................ 295,218,994
------------
COMMERCIAL PAPER -- 2.3%
General Motors Acceptance Corp., 6.44%.................... 01/12/2000 $7,000,000 6,986,226
------------
TOTAL COMMERCIAL PAPER (COST $6,986,226)................ 6,986,226
------------
SHORT TERM INVESTMENTS -- 0.0%
Temporary Investment Fund, Inc. -- TempCash............... 100,792 100,792
------------
TOTAL SHORT TERM INVESTMENTS (COST $100,792)............ 100,792
------------
TOTAL INVESTMENTS -- 100.0% (COST $250,666,843)......... 302,306,012
LIABILITIES IN EXCESS OF OTHER ASSETS -- 0.0%............... (44,376)
------------
NET ASSETS -- 100.0%
(Equivalent to $18.94 per share based on 15,959,821 shares
of capital stock outstanding)........................... $302,261,636
============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
($302,261,636/15,959,821 shares outstanding).............. $ 18.94
============
</TABLE>
*Non-Income Producing.
See accompanying notes to financial statements.
9
<PAGE> 11
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Money Market Portfolio
Statement of Net Assets, December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MATURITY
DESCRIPTION AND PERCENTAGE OF PORTFOLIO DATE PAR VALUE
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BANKERS ACCEPTANCE -- 2.1%
Finance -- 2.1%
Bank of New York, 5.55%................................... 02/18/2000 $2,500,000 $ 2,481,500
------------
TOTAL BANKERS ACCEPTANCE (COST $2,481,500).............. 2,481,500
------------
COMMERCIAL PAPER -- 92.7%
Agricultural Services -- 8.7%
Deere & Co., 5.86%........................................ 01/25/2000 5,000,000 4,980,467
Monsanto Co., 6.10%....................................... 02/18/2000 5,200,000 5,157,707
------------
10,138,174
------------
Automobiles -- 7.3%
Ford Motor Credit Co., 6.03%.............................. 01/11/2000 5,500,000 5,490,787
General Motors Acceptance Corp., 6.21%.................... 01/07/2000 3,000,000 2,996,895
------------
8,487,682
------------
Banking -- 17.3%
Bank of America, 5.80%.................................... 01/05/2000 4,000,000 3,997,422
Morgan (J.P.) & Co., Inc., 6.00%.......................... 01/18/2000 5,000,000 4,985,833
Northern Trust Co. (Chicago), 6.10%....................... 01/27/2000 5,500,000 5,500,000
Wells Fargo & Co., 6.03%.................................. 01/12/2000 5,750,000 5,739,406
------------
20,222,661
------------
Brokerage -- 4.3%
Merrill Lynch & Co., Inc., 6.00%.......................... 01/19/2000 5,000,000 4,985,000
------------
Communications -- 4.7%
Bell Atlantic Network Funding, 5.85%...................... 01/26/2000 5,500,000 5,477,656
------------
Finance -- 32.7%
American Express Co., 5.80%............................... 01/31/2000 4,500,000 4,478,250
American General Finance Corp., 5.78%..................... 01/28/2000 5,000,000 4,978,325
Caterpillar Financial Services, 6.05%..................... 02/16/2000 2,300,000 2,282,220
C.I.T. Financial Corp., 5.95%............................. 02/25/2000 2,400,000 2,378,183
Citicorp, 5.95%........................................... 01/13/2000 4,000,000 3,992,067
IBM Credit Corp., 6.03%................................... 02/01/2000 5,700,000 5,670,403
Met Life Funding Corp., 5.82%............................. 01/21/2000 5,000,000 4,983,833
Prudential Funding Corp., 5.95%........................... 01/14/2000 4,000,000 3,991,405
Transamerica Financial Corp., 6.00%....................... 01/24/2000 5,500,000 5,478,917
------------
38,233,603
------------
Oil -- 9.7%
Chevron, 6.40%............................................ 01/28/2000 5,800,000 5,772,160
Texaco, Inc., 5.96%....................................... 01/10/2000 5,600,000 5,591,656
------------
11,363,816
------------
</TABLE>
10
<PAGE> 12
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Money Market Portfolio
Statement of Net Assets, December 31, 1999 -- Concluded
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MATURITY SHARES
DESCRIPTION AND PERCENTAGE OF PORTFOLIO DATE OR PAR VALUE
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMERCIAL PAPER (CONTINUED)
Utilities -- 8.0%
GTE Funding, Inc., 6.12%.................................. 02/08/2000 $5,500,000 $ 5,464,470
Virginia Electric & Power, 5.85%.......................... 01/20/2000 4,000,000 3,987,650
------------
9,452,120
------------
TOTAL COMMERCIAL PAPER (COST $108,360,712).............. 108,360,712
------------
SHORT TERM INVESTMENTS -- 5.7%
Temporary Investment Fund, Inc. -- TempCash............... 6,632,340 6,632,340
------------
TOTAL SHORT TERM INVESTMENTS (COST $6,632,340).......... 6,632,340
------------
TOTAL INVESTMENTS -- 100.5% (COST $117,474,552)......... 117,474,552
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.5)%............. (587,114)
------------
NET ASSETS -- 100.0%
(Equivalent to $1.00 per share based on 116,887,504 shares
of capital stock outstanding)........................... $116,887,438
============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
($116,887,438/116,887,504 shares outstanding)............. $ 1.00
============
</TABLE>
See accompanying notes from financial statements.
11
<PAGE> 13
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Bond Portfolio
1999 Annual Review
Sentinel Advisors Company
- --------------------------------------------------------------------------------
The Market Street Fund Bond Portfolio's total return for the year ended
December 31, 1999 was -3.32% compared to -0.82% for the Lehman Aggregate Bond
Index, the benchmark index with which we compare the Portfolio's performance.
The disparity between the performance of the Portfolio and the Index was mostly
attributable to the Portfolio's longer duration relative to that of the Index
during much of the year. This hurt the Portfolio's performance as interest rates
rose over the course of the year.
Interest rates continued to climb as investors began to unwind the
flight-to-quality trades that followed the Russian financial crisis and the near
collapse of a major hedge fund in the Fall of 1998. The Federal Reserve was
becoming increasingly concerned about the inflationary pressures that seemed to
be building in the economy. GDP growth remained robust and commodity prices,
particularly oil, began trending upward. A 25-basis point increase in the Fed
Funds rate in June was followed by two more 25-basis point hikes, one in August
and another in November. Together, these increases amounted to a full reversal
of the 75-basis point reduction in the Fed Funds rate implemented in 1998.
After tightening in the first quarter, corporate bond spreads widened
significantly in the second and third quarters as the market became flooded with
new corporate issues. This heavy new issue supply in the middle part of the year
was driven by historically low interest rates as well as the accelerated
financing activities of corporate treasurers worried that Year 2000 concerns
would limit access to the capital markets in the latter part of the year. Supply
of corporate bonds towards the end of the year all but evaporated, leading to a
sharp tightening of corporate spreads in the fourth quarter.
During the first three-quarters of the year, we reduced the Portfolio's
duration during some of the bond market's brief rally periods. Thus, as the
general level of rates continued to rise, the price impact on the Portfolio's
holdings was less detrimental to the Fund's performance. Beginning in mid to
late summer, we implemented some timely increases to the Fund's corporate
exposure, as we began to sense that new issue supply would slow. When supply
actually did slow down, corporate bond spreads tightened meaningfully as
investors chased bonds in the secondary market and the Portfolio's performance
benefited accordingly. We continue to view corporate bonds as an attractive
asset class relative to Treasury bonds and intend maintaining a heavy corporate
weighting as we move in 2000.
William C. Kane, CFA
12
<PAGE> 14
[Market Street Fund Bond Portfolio Performance Graph]
<TABLE>
<CAPTION>
FUND INDEX+
---- ------
<S> <C> <C>
Start 9998.00 10000.00
85 10225.00 10187.00
86 11864.00 11742.00
87 11583.00 12066.00
88 12083.00 13018.00
89 13633.00 14909.00
90 14683.00 16245.00
91 16728.00 18844.00
92 17724.00 20239.00
93 19553.00 22564.00
94 18454.00 21892.00
95 22228.00 25941.00
96 22863.00 26883.00
97 25036.00 29477.00
98 27093.00 32039.00
99 26196.00 31776.00
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5 YEAR 10 YEAR SINCE INCEPTION*
<S> <C> <C> <C>
-3.31% 7.26% 6.75% 7.09%
</TABLE>
Past performance is not predictive of future performance.
+ The Index is the Lehman Aggregate Bond Index, an unmanaged index of bonds
reflecting average prices in the bond market.
* Inception date was December 12, 1985.
13
<PAGE> 15
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Bond Portfolio
Statement of Net Assets, December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MATURITY
DESCRIPTION AND PERCENTAGE OF PORTFOLIO DATE PAR VALUE
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. TREASURY BONDS -- 11.9%
U.S. Treasury Bonds, 7.25%................................ 05/15/2016 $1,000,000 $ 1,045,293
U.S. Treasury Bonds, 6.00%................................ 02/15/2026 2,500,000 2,286,591
U.S. Treasury Bonds, 6.125%............................... 08/15/2029 1,250,000 1,190,981
-----------
TOTAL U.S. TREASURY BONDS (COST $5,037,511)............. 4,522,865
-----------
U.S. TREASURY NOTES -- 11.1%
U.S. Treasury Notes, 5.25%................................ 05/15/2004 2,000,000 1,915,103
U.S. Treasury Notes, 4.75%................................ 11/15/2008 1,000,000 882,149
U.S. Treasury Notes, 5.50%................................ 05/15/2009 1,500,000 1,397,913
-----------
TOTAL U.S. TREASURY NOTES (COST $4,366,191)............. 4,195,165
-----------
AGENCY OBLIGATIONS -- 21.9%
Federal Home Loan Mortgage Corp., 8.500%.................. 06/15/2003 1,000,000 1,029,146
Federal Home Loan Mortgage Corp., 8.00%................... 11/01/2008 227,414 231,820
Federal Home Loan Mortgage Corp., 8.00%................... 03/01/2017 15,764 16,070
Federal National Mortgage Association, 10.50%............. 11/01/2017 485,163 519,882
Federal National Mortgage Association, 8.00%.............. 03/01/2022 428,200 431,411
Federal National Mortgage Association, 7.5%............... 03/01/2026 384,203 379,881
Federal National Mortgage Association, 8.5%............... 09/01/2026 923,299 946,381
Federal National Mortgage Association, 6.00%.............. 04/01/2028 1,020,714 933,954
Federal National Mortgage Association, 8.50%.............. 04/01/2028 920,048 943,049
Federal National Mortgage Association, 7.00%.............. 09/01/2028 904,930 874,672
Federal National Mortgage Association, 7.00%.............. 11/01/2028 305,242 295,035
Government National Mortgage Association, 7.50%........... 09/15/2023 1,304,570 1,289,894
Government National Mortgage Association, 7.50%........... 10/15/2029 486,489 481,016
-----------
TOTAL AGENCY OBLIGATIONS (COST $8,592,085).............. 8,372,211
-----------
CORPORATE BONDS -- 48.1%
Aerospace & Defense -- 2.3%
Lockheed Martin, 8.50%.................................... 12/01/2029 500,000 499,375
Raytheon Co., 7.00%....................................... 11/01/2028 500,000 431,875
-----------
931,250
-----------
Airlines -- 1.8%
Delta Air Lines 144A, 8.30%............................... 12/15/2029 750,000 725,625
-----------
Automobiles -- 2.1%
Ford Motor Co. 6.375%..................................... 02/01/2029 1,000,000 840,000
-----------
Automotive & Equipment -- 0.6%
Lear Corp., 7.96%......................................... 05/15/2005 250,000 239,687
-----------
Banks -- 0.6%
Sanwa Bank Ltd, 8.35%..................................... 07/15/2009 250,000 251,562
-----------
</TABLE>
14
<PAGE> 16
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Bond Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MATURITY
DESCRIPTION AND PERCENTAGE OF PORTFOLIO DATE PAR VALUE
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CORPORATE BONDS (CONTINUED)
Chemicals & Allied Products -- 0.6%
Rohm and Haas Co., 7.40%.................................. 07/15/2009 $ 250,000 $ 247,187
-----------
Communications -- 5.9%
Comsat Corp. Medium Term Note, 8.55%...................... 12/13/2006 500,000 521,660
Sprint Capital Corp., 6.875%.............................. 11/15/2028 1,000,000 891,250
Worldcom, Inc., 6.40%..................................... 08/15/2005 1,000,000 960,000
-----------
2,372,910
-----------
Computers -- 1.2%
Sun Microsystems, Inc., 7.00%............................. 08/15/2002 500,000 498,125
-----------
Consumer Services -- 0.5%
Service Corp. International, 6.00%........................ 12/15/2005 250,000 188,750
-----------
Containers -- 1.8%
Crown Cork & Seal Co., Inc., 7.125%....................... 09/01/2002 750,000 737,812
-----------
Finance -- 10.8%
Ahold Finance USA, Inc., 6.25%............................ 05/01/2009 500,000 454,375
Aristar, Inc., 6.30%...................................... 10/01/2002 500,000 488,125
Duke Capital Corp., 7.50%................................. 10/01/2009 500,000 495,000
ERAC USA Finance Co., 6.625%.............................. 05/15/2006 750,000 703,125
Finova Capital Corp., 7.25%............................... 11/08/2004 1,000,000 988,750
Household Finance Corp., 7.20%............................ 07/15/2006 750,000 734,063
Socgen Real Estate L.L.C., 7.64%.......................... 12/29/2049 500,000 458,125
-----------
4,321,563
-----------
Foods -- 1.9%
Safeway, Inc., 7.00%...................................... 09/15/2002 750,000 743,438
-----------
Foreign Financial Institutions -- 1.2%
Banque Nationale de Paris, 7.738%......................... 12/31/2049 500,000 462,500
-----------
Industrial -- 3.6%
CMS Energy, 6.75%......................................... 01/15/2004 250,000 231,875
IMC Global, Inc., 7.40%................................... 11/01/2002 500,000 496,875
Owens Corning, 7.50%...................................... 05/01/2005 750,000 717,188
-----------
1,445,938
-----------
Manufacturing -- 1.2%
Tyco International Group, 6.875%.......................... 09/05/2002 500,000 491,875
-----------
Oil & Gas -- 2.4%
KN Energy, Inc., 6.45%.................................... 03/01/2003 500,000 484,375
Union Pacific Resources Group, 7.30%...................... 04/15/2009 500,000 476,875
-----------
961,250
-----------
</TABLE>
15
<PAGE> 17
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Bond Portfolio
Statement of Net Assets, December 31, 1999 -- Concluded
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MATURITY SHARES
DESCRIPTION AND PERCENTAGE OF PORTFOLIO DATE OR PAR VALUE
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CORPORATE BONDS (CONTINUED)
Real Estate -- 1.8%
Simon Property Group LP, Inc., 6.625%..................... 06/15/2003 $ 750,000 $ 711,563
-----------
Retail Merchandising -- 1.2%
Penney (J.C.) & Co. Notes, 7.25%.......................... 04/01/2002 500,000 488,750
-----------
Tobacco -- 0.4%
Dimon, Inc. Senior Notes, 8.875%.......................... 06/01/2006 200,000 178,500
-----------
Transportation -- 1.4%
Laidlaw, Inc., 7.65%...................................... 05/15/2006 600,000 558,750
-----------
Utilities -- 4.8%
Calenergy Co., Inc. Senior Notes, 7.52%................... 09/15/2008 750,000 729,375
Cleveland Electric Toledo Edison, 7.67%................... 07/01/2004 250,000 246,250
US West Capital Funding, 6.25%............................ 07/15/2005 1,000,000 940,000
-----------
1,915,625
-----------
TOTAL CORPORATE BONDS (COST $20,144,024)................ 19,312,660
-----------
COMMERCIAL PAPER -- 4.5%
Chevron USA, Inc., 5.78%.................................. 02/14/2000 1,800,000 1,786,778
-----------
TOTAL COMMERCIAL PAPER (COST $1,787,284)................ 1,786,778
-----------
SHORT TERM INVESTMENTS -- 3.4%
Temporary Investment Fund, Inc. -- TempCash............... 1,351,514 1,351,514
-----------
TOTAL SHORT TERM INVESTMENTS (COST $1,351,514).......... 1,351,514
-----------
TOTAL INVESTMENTS -- 103.5% (COST $41,278,609).......... 39,541,193
LIABILITIES IN EXCESS OF OTHER ASSETS -- (3.5%)............. (1,358,928)
-----------
NET ASSETS -- 100.0%
(Equivalent to $10.58 per share based on 3,607,685 shares
of capital stock outstanding)........................... $38,182,265
===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
($38,182,265/3,607,685 shares outstanding)................ $ 10.58
===========
</TABLE>
See accompanying notes to financial statements.
16
<PAGE> 18
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Managed Portfolio
1999 Annual Review
Sentinel Advisors Company
- --------------------------------------------------------------------------------
The Market Street Fund Managed Portfolio produced a total return of 0.8%
for the year ended December 31, 1999 compared to an 8.7% annual return for the
average Lipper Balanced Fund. The returns were substantially below the 21.1%
total return for the S&P 500 Index, but ahead of the -0.82% return for the
Lehman Aggregate Bond Index. The S&P 500 Index and the Lehman Aggregate Bond
Index are the two benchmark indices with which we compare the Portfolio's
performance.
Returns for the major stock market indices continued to be dominated by the
technology, telecommunications, and internet-related areas. In essence, returns
for these stocks surpassed those for every other sector of the stock market. The
technology-heavy Nasdaq composite index had truly staggering returns over the
past twelve months. The relative standing of most balanced portfolios over the
past year can be directly tied to exposure to the technology sector. While the
Portfolio holds a number of technology stocks, the weighting in this sector has
not been high enough for it to keep pace with returns for some equity market
benchmarks. Additionally, within the technology sector, the strongest
performance has come from those issues with the highest multiples, making it
difficult for a disciplined value investor to participate in this sector's
upside.
Interest rates rose steadily over the year as concerns grew over the
prospect of higher inflation levels in the U.S. economy. In addition, surging
commodity prices and a weakening U.S. dollar contributed to bond investor
anxiety. Yields on the 30-year U.S. Treasury Bond rose 139 basis points to
6.48%. Defensive sectors of the fixed-income market, in particular
mortgage-backed securities, outperformed those of comparable duration U.S.
Treasuries, completely reversing the late 1998 trend.
The Portfolio began the year with a mix of 61% stocks, 37% bonds and 2%
cash. As the stock market advance accelerated towards the end of the year and
long-term interest rates moved towards recent highs, we began to increase the
fixed-income exposure of the Portfolio, believing the total return potential for
bonds was relatively attractive versus the risks that existed in the equity
markets. As of December 31, 1999, the Market Street Managed Portfolio's asset
allocation was 56% stocks, 42% bonds and 2% cash.
Looking ahead to the year 2000, we expect interest rates to remain under
pressure until the Federal Reserve finishes their tightening mode in monetary
policy. There still exists potential for a significant bond market rally should
U.S. economic growth slow significantly. The fixed income segment of the
Portfolio remains focused on quality investments in the government, corporate
and mortgage-backed sectors. Corporate bonds appear to offer good relative value
at current historically wide spread levels. We believe that a diversified
portfolio of reasonably valued, high quality stocks and an actively managed bond
component will produce attractive risk adjusted total returns.
David M. Brownlee, CFA
Van Harissis, CFA
Daniel J. Manion, CFA
17
<PAGE> 19
[Market Street Fund Managed Portfolio Performance Graph]
<TABLE>
<CAPTION>
FUND LA INDEX*
---- ---------
<S> <C> <C>
Start 10265.00 10000.00
85 10299.00 10187.00
86 11543.00 11742.00
87 11481.00 12066.00
88 12468.00 13018.00
89 14482.00 14909.00
90 13235.00 16245.00
91 15947.00 18844.00
92 17854.00 20239.00
93 19928.00 22564.00
94 19566.00 21892.00
95 24346.00 25941.00
96 27238.00 26883.00
97 33020.00 29477.00
98 37161.00 32039.00
99 37440.00 31776.00
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5 YEAR 10 YEAR SINCE INCEPTION**
<S> <C> <C> <C>
0.75% 13.86% 9.96% 9.64%
</TABLE>
Past performance is not predictive of future performance.
* The Index is the Lehman Aggregate Bond index, an unmanaged Index of bonds
reflecting average prices in the bond market.
** Inception date was December 12, 1985.
18
<PAGE> 20
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Managed Portfolio
Statement of Net Assets, December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- -------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK -- 55.4%
Aerospace & Defense--0.4%
Boeing Co. ............................................... 4,900 $ 203,656
-----------
Automobiles -- 1.2%
Ford Motor Co. ........................................... 16,000 855,000
-----------
Banks -- 2.9%
Bank of America Corp. .................................... 9,052 454,297
Bank of New York Co., Inc. ............................... 20,900 836,000
Chase Manhattan Corp. .................................... 7,500 582,656
Wells Fargo Co. .......................................... 6,500 262,844
-----------
2,135,797
-----------
Beverages -- 1.8%
Pepsico, Inc. ............................................ 38,500 1,357,125
-----------
Broadcasting & Publishing -- 1.2%
McGraw-Hill, Inc. ........................................ 14,200 875,075
-----------
Business & Consumer Services -- 2.9%
Automatic Data Processing, Inc. .......................... 14,200 765,025
Electronic Data Systems Corp. ............................ 9,000 602,437
Omnicom Group, Inc. ...................................... 7,900 790,000
-----------
2,157,462
-----------
Chemicals & Allied Products -- 1.9%
Du Pont (E.I.) de Nemours & Co. .......................... 7,371 485,565
Monsanto Co. ............................................. 26,600 947,625
-----------
1,433,190
-----------
Communications -- 4.5%
AT&T Corp. ............................................... 11,500 583,625
Comcast Corp. Special Class A Non-Voting.................. 9,000 452,250
*General Instrument Corp. ................................ 5,600 476,000
GTE Corp. ................................................ 16,000 1,129,000
Motorola, Inc. ........................................... 1,884 277,419
SBC Communications, Inc. ................................. 8,422 410,572
-----------
3,328,866
-----------
Computers -- 1.8%
Compaq Computer Corp. .................................... 5,100 138,019
Hewlett Packard Co. ...................................... 3,700 421,569
International Business Machines Corp. .................... 7,400 799,200
-----------
1,358,788
-----------
</TABLE>
19
<PAGE> 21
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Managed Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- -------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Consumer Products -- 2.2%
Kimberly-Clark Corp. ..................................... 25,000 $ 1,631,250
-----------
Cosmetics and Toiletries -- 0.5%
Gillette Co. ............................................. 9,000 370,687
-----------
Drugs & Health Care -- 5.1%
Aetna, Inc. .............................................. 3,600 200,925
American Home Products Corp. ............................. 32,800 1,293,550
Baxter International, Inc. ............................... 4,500 282,656
Becton, Dickinson & Co. .................................. 7,400 197,950
Bristol-Myers Squibb Co. ................................. 2,700 173,306
Johnson & Johnson......................................... 8,000 745,000
Pharmacia & Upjohn, Inc. ................................. 10,400 468,000
*Tenet Healthcare Corp. .................................. 5,000 117,500
United Healthcare Corp. .................................. 1,800 95,625
*Watson Pharmaceuticals, Inc. ............................ 5,500 196,969
-----------
3,771,481
-----------
Electronics -- 1.3%
Emerson Electric Co. ..................................... 6,500 372,937
General Electric Co. ..................................... 3,800 588,050
-----------
960,987
-----------
Energy -- 2.1%
Chevron Corp. ............................................ 5,100 441,787
FPL Group, Inc. .......................................... 5,800 248,312
Royal Dutch Petroleum Co. ................................ 8,000 483,500
Williams Cos., Inc. ...................................... 11,300 345,356
-----------
1,518,955
-----------
Entertainment -- 0.3%
Walt Disney Co. .......................................... 8,000 234,000
-----------
Finance -- 2.0%
American Express Co. ..................................... 4,000 665,000
Citigroup, Inc. .......................................... 15,000 833,437
-----------
1,498,437
-----------
Finance - Investment & Other -- 0.7%
Fannie Mae................................................ 8,200 511,987
-----------
</TABLE>
20
<PAGE> 22
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Managed Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- -------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Food & Food Distributors -- 3.7%
Bestfoods, Inc. .......................................... 14,800 $ 777,925
Kroger Co. ............................................... 41,900 790,862
McCormick & Co., Inc. .................................... 27,400 815,150
Sara Lee Corp. ........................................... 17,000 375,063
-----------
2,759,000
-----------
Industrial Diversified -- 1.1%
Parker-Hannifin Corp. .................................... 15,300 785,081
-----------
Insurance -- 3.1%
Allstate Corp. ........................................... 15,000 360,000
American General Corp. ................................... 8,200 622,175
American International Group, Inc. ....................... 7,562 817,641
Jefferson-Pilot Corp. .................................... 7,500 511,875
-----------
2,311,691
-----------
Lodging -- 0.8%
Marriott International, Inc. Class A...................... 18,500 583,906
-----------
Machinery & Heavy Equipment -- 0.3%
Dover Corp. .............................................. 4,500 204,188
-----------
Manufacturing -- 1.5%
Alcoa, Inc. .............................................. 9,400 780,200
Tyco International Ltd. .................................. 8,000 311,000
-----------
1,091,200
-----------
Medical & Medical Services -- 0.3%
*Manor Care, Inc. ........................................ 15,700 251,200
-----------
Oil & Gas -- 3.5%
Burlington Resources, Inc. ............................... 11,800 390,138
Conoco, Inc. Class B...................................... 21,595 537,176
Exxon Mobil Corp. ........................................ 16,781 1,351,919
Santa Fe International Corp. ............................. 10,100 261,338
Transocean Sedco Forex, Inc. ............................. 1,549 52,175
-----------
2,592,746
-----------
Oil Field Equipment & Services -- 1.4%
Halliburton Co. .......................................... 15,000 603,750
Schlumberger Ltd. ........................................ 8,000 450,000
-----------
1,053,750
-----------
Paper & Forest Products -- 1.1%
International Paper Co. .................................. 14,900 840,919
-----------
</TABLE>
21
<PAGE> 23
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Managed Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- -------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Railroads -- 0.6%
Union Pacific Corp., Series A............................. 10,000 $ 436,250
-----------
Real Estate -- 1.2%
Weyerhaeuser Co. ......................................... 12,500 897,656
-----------
Semiconductors -- 0.5%
Intel Corp. .............................................. 3,000 246,938
*National Semiconductor Corp. ............................ 2,300 98,469
-----------
345,407
-----------
Software -- 0.6%
*BMC Software, Inc. ...................................... 2,300 183,856
Computer Associates International, Inc. .................. 3,600 251,775
-----------
435,631
-----------
Tobacco -- 0.3%
Philip Morris Cos., Inc. ................................. 9,000 208,688
-----------
Utilities -- 2.6%
Duke Power Co. ........................................... 18,500 927,313
Enron Corp. .............................................. 23,000 1,020,625
-----------
1,947,938
-----------
TOTAL COMMON STOCK (COST $31,760,268)................... 40,947,994
-----------
</TABLE>
22
<PAGE> 24
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Managed Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MATURITY
DESCRIPTION AND PERCENTAGE OF PORTFOLIO DATE PAR VALUE
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. TREASURY NOTES -- 5.7%
U.S. Treasury Notes, 5.50%................................ 05/15/2009 $3,000,000 $ 2,795,826
U.S. Treasury Notes, 6.00%................................ 08/15/2009 1,500,000 1,453,195
-----------
TOTAL U.S. TREASURY NOTES (COST $4,404,985)............. 4,249,021
-----------
U.S. TREASURY BONDS -- 7.2%
U.S. Treasury Bonds, 7.25%................................ 05/15/2016 1,000,000 1,045,293
U.S. Treasury Bonds, 8.875%............................... 02/15/2019 1,000,000 1,216,948
U.S. Treasury Bonds, 6.125%............................... 08/15/2029 3,250,000 3,096,552
-----------
U.S. TREASURY BONDS (COST $5,617,934)................... 5,358,793
-----------
AGENCY OBLIGATIONS -- 12.8%
Collateralized Mortgage Obligation, 6.70%................. 01/25/2026 1,000,000 939,302
Federal Home Loan Mortgage Corp., 9.00%................... 08/01/2004 563,693 581,661
Federal Home Loan Mortgage Corp., 9.00%................... 12/01/2004 505,097 521,197
Federal Home Loan Mortgage Corp., 9.50%................... 08/01/2005 522,636 548,278
Federal Home Loan Mortgage Corp., 9.50%................... 03/01/2006 94,912 99,094
Federal Home Loan Mortgage Corp., 8.00%................... 11/01/2008 227,414 231,820
Federal National Mortgage Association, 7.00%.............. 03/01/2008 235,879 233,225
Federal National Mortgage Association, 7.75%.............. 03/01/2008 127,916 127,677
Federal National Mortgage Association, 7.75%.............. 05/01/2008 83,539 83,383
Federal National Mortgage Association, 10.50%............. 03/01/2018 365,954 392,143
Federal National Mortgage Association, 8.50%.............. 09/01/2026 923,299 946,381
Federal National Mortgage Association, 8.50%.............. 10/01/2026 917,235 940,166
Federal National Mortgage Association, 8.00%.............. 10/01/2027 632,881 637,627
Federal National Mortgage Association, 8.00%.............. 01/01/2028 661,500 666,461
Federal National Mortgage Association, 7.50%.............. 05/01/2028 468,354 463,085
Federal National Mortgage Association, 8.00%.............. 11/01/2014 500,994 510,857
Federal National Mortgage Association, 8.00%.............. 12/01/2014 449,249 458,094
Government National Mortgage Association, 8.00%........... 03/15/2007 187,563 191,490
Government National Mortgage Association, 7.50%........... 11/15/2007 575,935 569,815
Government National Mortgage Association, 8.00%........... 08/15/2008 304,476 310,851
-----------
TOTAL AGENCY OBLIGATIONS (COST $9,566,842).............. 9,452,607
-----------
CORPORATE BONDS -- 16.2%
Aerospace & Defense -- 1.9%
Lockheed Martin, 8.50%.................................... 12/01/2029 1,000,000 998,750
Raytheon Co., 7.00%....................................... 11/02/2028 500,000 431,875
-----------
1,430,625
-----------
Automobiles -- 0.6%
Ford Motor Co., 6.375%.................................... 02/01/2029 500,000 420,000
-----------
</TABLE>
23
<PAGE> 25
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Managed Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MATURITY
DESCRIPTION AND PERCENTAGE OF PORTFOLIO DATE PAR VALUE
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CORPORATE BONDS (CONTINUED)
Automotive & Equipment -- 1.0%
Lear Corp., 7.96%......................................... 05/15/2005 $ 250,000 $ 239,688
TRW, Inc., 7.125%......................................... 06/01/2009 500,000 472,500
-----------
712,188
-----------
Communications -- 2.6%
AT&T Canada, Inc., 7.65%.................................. 09/15/2006 500,000 496,875
Comsat Corp. Medium Term Note, 8.55%...................... 12/13/2006 500,000 521,661
Sprint Capital Corp., 6.875%.............................. 11/15/2028 500,000 445,625
Worldcom, Inc., 6.40%..................................... 08/15/2005 500,000 480,000
-----------
1,944,161
-----------
Computers -- 0.3%
Sun Microsystems, Inc., 7.00%............................. 08/15/2002 250,000 249,063
-----------
Consumer Services -- 0.5%
Service Corp. International, 6.00%........................ 12/15/2005 500,000 377,500
-----------
Containers -- 0.7%
Crown Cork & Seal Co., Inc., 7.125%....................... 09/01/2002 500,000 491,875
-----------
Finance -- 2.1%
Duke Capital Corp., 7.50%................................. 10/01/2009 500,000 495,000
ERAC USA Finance Co., 6.625%.............................. 05/15/2006 500,000 468,750
Finova Capital Corp., 7.25%............................... 11/08/2004 500,000 494,375
-----------
1,458,125
-----------
Food & Food Distributors -- 0.6%
Archer-Daniels-Midland, 6.625%............................ 05/01/2029 500,000 428,750
-----------
Foreign Financial Institutions -- 0.3%
Banque Nationale de Paris, 7.738%......................... 12/31/2049 250,000 231,250
-----------
Industrial -- 2.0%
CMS Energy, 6.75%......................................... 01/15/2004 250,000 231,875
IMC Global, Inc., 7.40%................................... 11/01/2002 500,000 496,875
Nabors Industrial, 6.80%.................................. 04/15/2004 250,000 240,938
Owens Corning, 7.50%...................................... 05/01/2005 500,000 478,125
-----------
1,447,813
-----------
Oil & Gas -- 0.6%
Union Pacific Resources Group, 7.30%...................... 04/15/2009 500,000 476,875
-----------
Real Estate -- 0.6%
Simon Property Group LP, Inc., 6.625%..................... 06/15/2003 500,000 474,375
-----------
Retail Merchandising -- 1.3%
Penney (J.C.) & Co. Notes, 7.25%.......................... 04/01/2002 1,000,000 977,500
-----------
</TABLE>
24
<PAGE> 26
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Managed Portfolio
Statement of Net Assets, December 31, 1999 -- Concluded
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MATURITY SHARES
DESCRIPTION AND PERCENTAGE OF PORTFOLIO DATE OR PAR VALUE
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CORPORATE BONDS (CONTINUED)
Tobacco -- 0.2%
Dimon, Inc. Senior Notes, 8.875%.......................... 06/01/2006 $ 200,000 $ 178,500
-----------
Transportation -- 0.6%
Laidlaw, Inc., 7.65%...................................... 05/15/2006 500,000 465,625
-----------
Utilities -- 0.3%
Cleveland Electric Toledo Edison, 7.67%................... 07/01/2004 250,000 246,250
-----------
TOTAL CORPORATE BONDS (COST $12,477,855)................ 12,010,475
-----------
COMMERCIAL PAPER -- 8.3%
Household Finance Corp., 5.83%............................ 02/10/2000 3,700,000 3,676,222
Northern Trust Co. (Chicago), 5.88%....................... 01/31/2000 2,500,000 2,487,270
-----------
TOTAL COMMERCIAL PAPER (COST $6,163,782)................ 6,163,492
-----------
SHORT TERM INVESTMENTS -- 1.9%
Temporary Investment Fund, Inc. -- TempCash............... 1,386,909 1,386,909
-----------
TOTAL SHORT TERM INVESTMENTS (COST $1,386,909).......... 1,386,909
-----------
TOTAL INVESTMENTS -- 107.5% (COST $71,378,575).......... 79,569,291
LIABILITIES IN EXCESS OF OTHER ASSETS -- (7.5%)............. (5,583,459)
-----------
NET ASSETS -- 100.0%
(Equivalent to $16.79 per share based on 4,407,274 shares
of capital stock outstanding)........................... $73,985,832
===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
($73,985,832/4,407,274 shares outstanding)................ $ 16.79
===========
</TABLE>
*Non-Income Producing.
See accompanying notes to financial statements.
25
<PAGE> 27
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Aggressive Growth Portfolio
1999 Annual Review
Sentinel Advisors Company
- --------------------------------------------------------------------------------
The Market Street Fund Aggressive Growth Portfolio achieved a return of
16.0% for the year ended December 31, 1999. This performance lagged the 21.4%
return of the Russell 2000 Index, the benchmark index with which we compare the
Portfolio's performance, and the 17.15% return of the median fund in the Lipper
Small-Cap Core category.
For a year when many investors have apparently abandoned caution and
discipline in the pursuit of Internet-related riches, our disciplined small
company investment approach was at a clear disadvantage. Instead of rewarding
our discipline for buying highly profitable small companies at a reasonable
price, or at a discount to their market values, the small-cap marketplace
favored companies with negative earnings.
The Portfolio is invested in Internet-related companies that are expected
to benefit greatly from this worldwide phenomenon. The Portfolio's investments
in selected fast growing communications-related companies especially wireless
component manufacturers were particularly rewarding. Mergers and acquisitions
also contributed favorably to this year's results.
Looking forward to 2000, we will continue to search for attractively valued
small companies that are solving problems or creating competitive advantages for
their customers. Companies with products or services that provide real solutions
to customers' needs or problems should enjoy the increasingly rare ability to
increase unit volume and preserve pricing power. Of course, we also will
continue to seek exposure to those attractively valued small companies that are
poised to benefit from important long-term trends like the exploding demand for
mobile communications, telecommunications bandwidth and data storage.
In closing, we feel strongly that many small company stocks continue to
present compelling relative value and outstanding risk/reward ratios. We
appreciate your continued confidence in our efforts on your behalf.
Scott T. Brayman, CFA
Robert L. Lee, CFA
26
<PAGE> 28
[MARKET STREET FUND AGGRESSIVE GROWTH PORTFOLIO PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
FUND INDEX+
---- ------
<S> <C> <C>
Start 10194.00 10000.00
89 10558.00 10340.00
90 11695.00 8324.00
91 18283.00 12161.00
92 18755.00 14399.00
93 19722.00 17120.00
94 19730.00 16808.00
95 22389.00 21599.00
96 27091.00 25171.00
97 32837.00 30767.00
98 35461.00 30078.00
99 41121.00 36503.00
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5 YEAR 10 YEAR SINCE INCEPTION*
<S> <C> <C> <C>
15.96% 15.82% 14.56% 13.95%
</TABLE>
Past performance is not predictive of future performance.
+ The Index is the Russell 2000 Index, an unmanaged stock index of small
capitalization companies which includes reinvestment of all income.
* Inception date was May 1, 1989.
27
<PAGE> 29
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Aggressive Growth Portfolio
Statement of Net Assets, December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK -- 92.5%
Aerospace & Defense -- 2.0%
AAR Corp.................................................. 38,000 $ 681,625
Goodrich (B.F.) Co........................................ 20,000 550,000
-----------
1,231,625
-----------
Banks -- 1.0%
Cullen Frost Bankers, Inc. ............................... 8,000 206,000
Mercantile Bankshares Corp................................ 6,000 191,625
Wilmington Trust Corp..................................... 5,000 241,250
-----------
638,875
-----------
Beverages -- 0.8%
*Robert Mondavi Corp., Class A............................ 15,000 521,250
-----------
Broadcasting & Publishing -- 1.9%
*IDG Books Worldwide, Inc. ............................... 18,000 208,125
Meredith Corp............................................. 24,000 1,000,500
-----------
1,208,625
-----------
Building - Maintenance & Service -- 0.5%
American Building Maintenance Industries.................. 15,000 305,625
-----------
Business & Consumer Services -- 10.5%
*Acxiom Corp.............................................. 48,000 1,152,000
*Administaff, Inc......................................... 15,000 453,750
Affiliated Computer Services, Inc......................... 36,000 1,656,000
Analysts International Corp............................... 46,000 575,000
*Caci International, Inc.................................. 23,000 520,375
*Catalina Marketing Corp.................................. 12,000 1,389,000
Healthcare Services Group................................. 41,700 291,900
Unifirst Corp. ........................................... 48,000 606,000
-----------
6,644,025
-----------
Chemicals & Allied Products -- 5.1%
*Bush Boake Allen, Inc.................................... 42,600 1,046,362
Cambrex Corp.............................................. 62,000 2,135,125
-----------
3,181,487
-----------
Communications -- 2.8%
*Dynatech Corp. .......................................... 7,000 47,250
*Tekelec, Inc............................................. 36,000 810,000
True North Communications................................. 20,000 893,750
-----------
1,751,000
-----------
Computers -- 1.6%
Ciber, Inc................................................ 36,000 990,000
-----------
</TABLE>
28
<PAGE> 30
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Aggressive Growth Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Consumer Products -- 0.7%
Kimberly-Clark Corp. ..................................... 7,000 $ 456,750
-----------
Containers -- 1.4%
Bemis Co., Inc. .......................................... 25,000 871,875
-----------
Cosmetics and Toiletries -- 1.6%
Alberto-Culver Co. Class A................................ 45,000 978,750
-----------
Drugs & Health Care -- 5.5%
*Barr Laboratories, Inc. ................................. 18,000 564,750
*Covance, Inc............................................. 68,000 735,250
Jones Pharma, Inc. ....................................... 12,000 521,250
*Medicis Pharmaceutical Corp. Class A..................... 17,000 723,562
*Monarch Dental Corp. .................................... 26,000 44,687
Shire Pharmaceuticals Group............................... 11,469 334,035
*Watson Pharmaceuticals, Inc. ............................ 14,000 501,375
-----------
3,424,909
-----------
Electronics -- 15.6%
Applied Power, Inc. Class A............................... 38,000 1,396,500
*Burr-Brown Corp. ........................................ 19,500 704,437
*C-COR Electronics, Inc. ................................. 5,000 383,125
*C-Cube Microsystems, Inc. ............................... 18,000 1,120,500
*Cable Design Technologies, Inc. ......................... 35,000 805,000
CTS Corp.................................................. 12,000 904,500
Harman International Industries, Inc. .................... 29,000 1,627,625
Methode Electronics, Inc. Class A......................... 58,000 1,863,250
*Sawtek, Inc. ............................................ 14,000 931,875
-----------
9,736,812
-----------
Energy -- 1.0%
MidAmerican Energy Holdings Co. .......................... 18,000 606,375
-----------
Environmental Control -- 2.6%
Donaldson Co., Inc........................................ 46,000 1,106,875
*Tetra Technologies, Inc. ................................ 68,000 493,000
-----------
1,599,875
-----------
Financial -- 4.2%
Duff & Phelps Credit Rating Co. .......................... 16,000 1,423,000
Waddell & Reed Financial, Inc. ........................... 30,000 813,750
Waddell & Reed Financial, Inc. Class B.................... 15,000 376,875
-----------
2,613,625
-----------
</TABLE>
29
<PAGE> 31
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Aggressive Growth Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Food & Food Distributors -- 3.4%
Smart & Final, Inc. ...................................... 25,000 $ 181,250
*Whole Foods Market, Inc. ................................ 42,000 1,947,750
-----------
2,129,000
-----------
Insurance -- 2.3%
Enhance Financial Services Group, Inc. ................... 33,000 536,250
HCC Insurance Holdings, Inc. ............................. 69,000 909,937
-----------
1,446,187
-----------
Manufacturing -- 4.1%
AptarGroup, Inc. ......................................... 43,000 1,080,375
*Gardner Denver Machinery, Inc. .......................... 16,000 267,000
*Plexus Corp. ............................................ 19,000 836,000
Robbins & Myers, Inc. .................................... 16,000 362,000
-----------
2,545,375
-----------
Medical Equipment & Supplies -- 3.6%
Diagnostic Products Corp. ................................ 7,000 171,500
Mentor Corp. ............................................. 39,900 1,029,919
Minntech Corp. ........................................... 40,000 385,000
*Orthodontic Centers of America, Inc. .................... 38,000 453,625
*STARR Surgical Co. ...................................... 24,000 234,000
-----------
2,274,044
-----------
Oil & Gas -- 1.0%
*Cal Dive International, Inc. ............................ 10,000 331,250
Santa Fe International Corp. ............................. 12,000 310,500
-----------
641,750
-----------
Oil Equipment & Services -- 1.1%
CARBO Ceramics, Inc. ..................................... 12,000 262,500
*Oceaneering International, Inc. ......................... 29,000 433,188
-----------
695,688
-----------
Personal Services -- 0.3%
Strayer Education, Inc. .................................. 8,300 163,925
-----------
Railroads -- 0.5%
*Railtex, Inc. ........................................... 18,000 321,750
-----------
Real Estate -- 2.5%
Chateau Communities, Inc. ................................ 46,000 1,193,125
Liberty Property Trust.................................... 15,000 363,750
-----------
1,556,875
-----------
</TABLE>
30
<PAGE> 32
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Aggressive Growth Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Restaurants -- 3.9%
Applebee's International, Inc. ........................... 27,000 $ 796,500
*Jack in the Box, Inc. ................................... 28,000 579,250
Ruby Tuesday, Inc. ....................................... 60,000 1,091,250
-----------
2,467,000
-----------
Retail Merchandising -- 2.9%
Casey General Stores, Inc. ............................... 46,000 480,125
Ethan Allen Interiors, Inc. .............................. 35,000 1,122,188
*Wet Seal (The), Inc., Class A............................ 16,000 196,000
-----------
1,798,313
-----------
Semiconductors -- 2.4%
Dallas Semiconductor Corp. ............................... 22,800 1,469,175
-----------
Software -- 1.8%
*Filenet Corp. ........................................... 44,000 1,122,000
-----------
1,122,000
-----------
Transportation -- 3.9%
Air Express International Corp. .......................... 27,000 872,438
*Eagle USA Airfreight, Inc. .............................. 13,500 582,188
Robinson (C.H.) Worldwide, Inc. .......................... 24,000 954,000
-----------
2,408,626
-----------
TOTAL COMMON STOCK (COST $48,257,470)................... 57,801,191
-----------
</TABLE>
31
<PAGE> 33
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Aggressive Growth Portfolio
Statement of Net Assets, December 31, 1999 -- Concluded
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MATURITY SHARES
DESCRIPTION AND PERCENTAGE OF PORTFOLIO DATE OR PAR VALUE
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CORPORATE BONDS -- 0.1%
Phoenix Investment Partners Ltd., 6.00%................... 11/01/2015 $ 62,500 $ 63,516
-----------
TOTAL CORPORATE BOND (COST $65,394)..................... 63,516
-----------
COMMERCIAL PAPER -- 4.4%
Ford Motor Credit Co., 6.50%.............................. 01/04/2000 1,287,000 1,286,303
General Electric Capital Corp., 5.60%..................... 02/14/2000 1,500,000 1,489,733
-----------
TOTAL COMMERCIAL PAPER (COST $2,776,036)................ 2,776,036
-----------
SHORT TERM INVESTMENTS -- 3.4%
Temporary Investment Fund, Inc. -- TempCash........................... 2,100,072 2,100,072
-----------
TOTAL SHORT TERM INVESTMENTS (COST $2,100,072)...................... 2,100,072
-----------
TOTAL INVESTMENTS -- 100.4% (COST $53,198,972)...................... 62,740,815
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.4%)......................... (228,468)
-----------
NET ASSETS -- 100.0%
(Equivalent to $21.97 per share based on 2,845,165 shares of capital
stock outstanding).................................................. $62,512,347
===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
($62,512,347/2,845,165 shares outstanding)............................ $ 21.97
===========
</TABLE>
*Non-Income Producing.
See accompanying notes to financial statements.
32
<PAGE> 34
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The International Portfolio
1999 Annual Review
The Boston Company Asset Management, Inc.
- --------------------------------------------------------------------------------
The Market Street Fund International Portfolio's total return for the year
ended December 31, 1999 was 29.3% compared to the 27.0% return for the MSCI EAFE
Index, the benchmark index with which we compare the Portfolio's performance.
The Japanese market dominated the MSCI EAFE Index this year, contributing
over 50% of the return. Japan returned 60% for the year. The Portfolio benefited
as most of its top-performing stocks this year were in Japan. Murata, a
manufacturer of electronic components, was the best performing stock in the
Portfolio rising over 130% in the fourth quarter and 436% for the year. Murata
manufactures equipment for the wireless phone industry, and they have seen
unprecedented growth over the past year.
Around the world, telecommunications and technology companies were the key
themes this year. The Portfolio was well positioned to take advantage of this,
owning most of the major telecommunications stocks. The best performing telecom
stock was KPN, the Dutch company, returning 91% for the year as it continued to
focus on restructuring itself in favor of wireless communications. In Europe,
technological equipment manufacturers also performed extremely well.
This year we added to our emerging market exposure. Value opportunities
were found in Brazil, Mexico and South Korea. We purchased stocks of major
telecommunications companies in Latin America, stock of a Brazilian oil concern.
Economic growth, corporate restructuring, and a focus on profitability
should serve to buoy equities in Continental Europe as the next year begins. In
Japan, positive liquidity and continued corporate reorganization should set an
optimistic tone. We continue to search for undervalued securities with sound
fundamentals and good growth potential for the Portfolio. We are confident that
value investing will continue to provide you, our client, with the opportunity
to invest in a risk adverse and disciplined investment process that has a proven
track record.
Sandor Cseh, CFA
Kirk Henry, CFA
33
<PAGE> 35
[Market Street Fund International Portfolio Performance Graph]
<TABLE>
<CAPTION>
FUND INDEX+
---- ------
<S> <C> <C>
Start 9991.00 10000.00
91 9712.00 10030.00
92 9003.00 8806.00
93 12254.00 11677.00
94 12286.00 12585.00
95 14044.00 13994.00
96 15573.00 14834.00
97 17078.00 15101.00
98 18808.00 18121.00
99 24324.00 23008.00
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5 YEAR 10 YEAR SINCE INCEPTION*
<S> <C> <C> <C>
29.33% 14.64% n/a 11.50%
</TABLE>
Past performance is not predictive of future performance.
+ The Index is the Morgan Stanley Capital International Europe, Australia, Far
East (EAFE) Index, an unmanaged index of more than 900 companies from these
regions. The EAFE Index reflects the prices of these common stocks translated
into U.S. dollars with dividends reinvested net of any foreign taxes.
* Inception date was November 1, 1991.
34
<PAGE> 36
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The International Portfolio
Statement of Net Assets, December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON AND PREFERRED STOCK -- 95.9%
Australia -- 2.1%
Australia & New Zealand Bank Group Ltd.................... 145,924 $ 1,062,358
Boral Ltd................................................. 1 2
Goodman Fielder Ltd....................................... 385,571 344,515
Pacific Dunlop Ltd. ...................................... 301,642 427,273
-----------
1,834,148
-----------
Austria -- 0.6%
Bank Austria AG........................................... 10,150 572,464
-----------
Brazil -- 0.9%
Petroleo Brasileiro SA ADR................................ 13,500 346,248
Telecomunicacoes Brasileiras SA ADR....................... 3,611 464,013
-----------
810,261
-----------
Denmark -- 0.7%
Jyske Bank................................................ 31,450 633,575
-----------
Finland -- 0.6%
Kesko Oyj................................................. 42,600 540,598
-----------
France -- 9.5%
Alstom SA................................................. 12,315 410,541
Assurances Generales de France............................ 14,580 790,013
Banque Nationale de Paris................................. 12,600 1,162,413
Bongrain.................................................. 1,227 406,940
*Dexia Belgium............................................ 4,510 745,837
*Dexia Strips............................................. 4,510 --
L'Air Liquide............................................. 6,437 1,077,477
Michelin-(CGDE)........................................... 19,153 752,308
PSA Peugeot Citroen....................................... 1,910 433,592
Societe Generale.......................................... 2,018 469,491
Thomson CSF............................................... 24,219 799,820
Total Fina SA ADR......................................... 13,661 946,024
Usinor Sacilor............................................ 21,400 401,964
-----------
8,396,420
-----------
Germany -- 10.1%
*Aventis AG............................................... 4,351 252,414
Bayer AG.................................................. 26,300 1,244,939
Deutsche Bank AG.......................................... 12,777 1,079,012
Deutsche Lufthansa AG..................................... 36,000 837,547
Hugo Boss AG.............................................. 2,530 323,608
Merck KGAA................................................ 31,289 970,592
Metallgesellschaft AG..................................... 14,165 283,899
ProSieben Media AG........................................ 7,700 447,467
</TABLE>
35
<PAGE> 37
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The International Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON AND PREFERRED STOCK (CONTINUED)
Germany (Continued)
Rheinmetall AG............................................ 13,900 $ 146,994
Siemens AG................................................ 7,600 966,744
Veba AG................................................... 21,800 1,059,372
Viag AG................................................... 16,260 298,048
Volkswagen AG............................................. 18,150 1,022,754
-----------
8,933,390
-----------
Greece -- 1.3%
Hellenic Telecommunications............................... 93,755 1,119,200
-----------
Hong Kong -- 1.6%
CDL Hotels International Ltd.............................. 322,000 128,411
Henderson Investment Ltd.................................. 353,000 367,827
Hong Kong Electric........................................ 286,896 896,838
-----------
1,393,076
-----------
Italy -- 3.5%
Banca Popolare di Bergamo Credito Varesino SpA............ 21,400 494,857
*Beni Stabili SpA......................................... 23,512 8,288
ENI SpA................................................... 46,400 255,156
Ente Nazionale Idrocarburi SpA............................ 17,000 937,125
Istituto Bancario San Paolo di Torino SpA................. 34,912 474,331
Telecom Italia SpA........................................ 158,300 964,563
-----------
3,134,320
-----------
Japan -- 27.8%
77 Bank Ltd............................................... 70,000 733,777
Aiful Corp................................................ 3,000 367,035
Canon, Inc................................................ 39,000 1,549,770
Credit Saison Co.......................................... 45,500 792,698
Dai-Tokyo Fire and Marine Insurance....................... 143,000 583,645
Fuji Machine.............................................. 21,000 1,693,648
Honda Motor Co. Ltd....................................... 18,000 669,472
Mabuchi Motors............................................ 9,700 1,692,777
Marubeni Corp............................................. 270,000 1,133,699
Matsumotokiyoshi.......................................... 15,600 1,207,752
Mineba Co. Ltd............................................ 87,000 1,492,718
Mitsubishi Heavy Industries Ltd........................... 110,000 367,133
Murata Manufacturing Co. Ltd.............................. 3,000 704,708
Namco Ltd................................................. 21,500 1,393,070
Nichiei................................................... 14,100 306,372
Nippon Express Company Ltd................................ 200,000 1,106,000
Nippon Telegraph & Telephone Corp......................... 250 428,208
</TABLE>
36
<PAGE> 38
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The International Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON AND PREFERRED STOCK (CONTINUED)
Japan (Continued)
Nishimatsu Construction................................... 80,000 $ 321,034
Rinnai Corp............................................... 32,000 595,087
Rohm Co. Ltd.............................................. 5,000 2,094,548
Sankyo Company Ltd. ...................................... 25,000 513,849
Sekisui Chemical Co. ..................................... 75,000 332,534
Shin-Etsu Chemical Company Limited........................ 8,000 344,524
Sony Corp................................................. 7,400 2,194,578
Toyota Motor Corp......................................... 21,000 1,017,422
Yamanouchi Pharmaceuticals................................ 29,000 1,013,311
-----------
24,649,369
-----------
Korea -- 0.8%
Korea Electric Power ADR.................................. 26,400 442,200
Pohang Iron & Steel Co. Ltd. ADR.......................... 8,000 280,000
-----------
722,200
-----------
Mexico -- 0.3%
Telefonos de Mexico SA ADR................................ 2,308 259,650
-----------
Netherlands -- 6.9%
ABN Amro Holding.......................................... 43,620 1,089,512
AKZO N.V. ADR............................................. 15,500 771,125
Buhrmann N.V. ............................................ 45,085 678,841
Hollandsche Beton......................................... 37,826 361,917
Hunter Douglas N.V. ...................................... 26,319 715,694
ING Groep N.V. ........................................... 17,087 1,031,519
KPN ADS................................................... 5,383 517,441
Stork N.V. ............................................... 37,053 541,110
Vedior N.V. .............................................. 42,400 435,573
-----------
6,142,732
-----------
New Zealand -- 0.9%
Fletcher Challenge Paper.................................. 427,822 299,540
Telecom Corporation of New Zealand Ltd.................... 114,600 538,907
-----------
838,447
-----------
Norway -- 1.1%
Norsk Hydro............................................... 9,700 406,612
Orkla..................................................... 32,000 550,933
-----------
957,545
-----------
Peru -- 0.4%
Telefonica del Peru S.A. ADR.............................. 27,000 361,125
-----------
</TABLE>
37
<PAGE> 39
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The International Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON AND PREFERRED STOCK (CONTINUED)
Portugal -- 1.3%
Electricidade de Portugal SA.............................. 14,500 $ 253,082
Portugal Telecom SA....................................... 82,870 908,908
-----------
1,161,990
-----------
Singapore -- 1.9%
Creative Technology Ltd. ADR.............................. 30,700 533,413
Overseas Chinese Banking Corp............................. 44,000 404,203
United Overseas Bank Ltd.................................. 87,544 772,679
-----------
1,710,295
-----------
Spain -- 4.1%
Argentaria, Caja Postal y Banco Hipotecario de Espana
SA...................................................... 26,000 610,918
Banco Popular Espanol SA.................................. 12,500 815,163
Endesa SA................................................. 57,086 1,133,211
Repsol ADR................................................ 45,200 1,050,900
-----------
3,610,192
-----------
Sweden -- 0.8%
Autoliv, Inc. SDR......................................... 25,500 746,298
-----------
Switzerland -- 4.0%
Barry Callebaut AG - Registered Shares................... 4,018 584,166
Forbo Holding AG - Registered Shares...................... 1,330 626,452
Sulzer AG - Registered Shares............................. 830 539,503
Swisscom AG - Registered Shares........................... 1,750 707,781
United Bank of Switzerland - Registered Shares............ 4,170 1,126,107
-----------
3,584,009
-----------
United Kingdom -- 14.7%
Barclays Plc.............................................. 24,442 703,554
BOC Group Plc............................................. 31,060 667,277
British Aerospace Plc..................................... 157,830 1,045,265
British Airways Plc....................................... 64,680 422,090
Bunzl Plc................................................. 213,599 1,176,540
Laird Group Ordinary...................................... 100,000 395,749
Medeva Plc................................................ 2,248 6,391
Morgan Crucible Co. Plc................................... 202,215 948,883
Powergen UK Plc........................................... 91,000 654,116
Rexam Plc................................................. 193,300 780,594
Rio Tinto Plc............................................. 46,845 1,131,247
Royal & Sun Alliance Insurance Group...................... 132,768 1,011,180
Royal Bank of Scotland Group Plc.......................... 47,487 842,229
Safeway Plc............................................... 220,244 754,211
Scottish and Southern Energy Plc.......................... 65,500 522,927
</TABLE>
38
<PAGE> 40
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The International Portfolio
Statement of Net Assets, December 31, 1999 -- Concluded
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON AND PREFERRED STOCK (CONTINUED)
United Kingdom (Continued)
Tomkins Plc............................................... 181,728 $ 587,090
Unilever Plc.............................................. 65,000 478,250
Wolseley Plc.............................................. 119,200 914,102
-----------
13,041,695
-----------
TOTAL COMMON AND PREFERRED STOCK (COST $71,298,159)..... 85,152,999
-----------
SHORT TERM INVESTMENTS -- 1.6%
Temporary Investment Fund, Inc. -- TempCash............... 1,409,425 1,409,425
-----------
TOTAL SHORT TERM INVESTMENTS (COST $1,409,425).......... 1,409,425
-----------
TOTAL INVESTMENTS -- 97.5% (COST $72,707,584)........... 86,562,424
OTHER ASSETS IN EXCESS OF LIABILITIES -- 2.5%............... 2,233,140
-----------
NET ASSETS -- 100.0%
(Equivalent to $16.68 per share based on 5,324,220 shares
of capital stock outstanding)........................... $88,795,564
===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
($88,795,564/5,324,220 shares outstanding)................ $ 16.68
===========
</TABLE>
*Non-Income Producing.
See accompanying notes to financial statements.
39
<PAGE> 41
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Sentinel Growth Portfolio
1999 Annual Review
Sentinel Advisors Company
- --------------------------------------------------------------------------------
The Market Street Fund Sentinel Growth Portfolio earned a total return of
38.8% during the year ended December 31, 1999. Over the same period, the S&P 500
Index, the benchmark index with which we compare the Portfolio's performance,
produced a 21.1% return and the S&P 400 Mid Cap Index produced a 14.7% return.
The Portfolio outperformed the key indices during the first half of the
year because of strong stock selection in technology and communications stocks.
In the technology sector, the Portfolio benefited from significant gains in
semiconductor equipment stocks, which recovered nicely in anticipation of
improving orders. In the communications area, explosive growth in the demand for
cellular phone handsets caused sharp gains in companies that provide key
components to cell phone manufacturers. Strong consumer confidence and consumer
spending led to significant gains for our holding in restaurant and retail
stocks.
During the second half of the year, investors' attention shifted toward
companies offering rapid potential earnings growth. The standout performers
during the second half of the year included technology, telecommunications,
Internet stocks, and technology-related initial public offerings.
The Portfolio benefited from significant overweighting in technology and
communications stocks. During the year, new positions were started in a number
of exciting new growth industries such as genomics (biotech), fixed wireless
communications, and the Internet industry. Companies in the field of genomics
are rapidly identifying and patenting applications based on the decoding of the
estimated 100,000 genes in the genetic code. These companies expect to earn
royalties from drugs that are later developed based on their discoveries. Fixed
wireless companies are providing a "last mile solution" for mid and small-sized
companies that cannot otherwise afford to connect to expensive optical fiber
networks.
As we enter the new millennium, our strategy for the Portfolio continues to
emphasize market-dominant companies with defensible "franchises" in rapidly
growing industries. These companies usually possess proprietary technology,
dominant brands, and superior products, and outstanding management.
Robert L. Lee, CFA
40
<PAGE> 42
[Market Street Fund Sentinel Growth Portfolio Performance Graph]
<TABLE>
<CAPTION>
FUND INDEX+
---- ------
<S> <C> <C>
Start 10000.00 10000.00
96 11140.00 11760.00
97 14658.00 15685.00
98 17000.00 20190.00
99 23596.00 24503.00
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5 YEAR 10 YEAR SINCE INCEPTION*
<S> <C> <C> <C>
38.80% n/a n/a 25.41%
</TABLE>
Past performance is not predictive of future performance.
+ The Index is the S&P 500, an unmanaged index of 500 U.S. common stocks that
includes reinvestment of dividends.
* Inception date was March 18, 1996.
41
<PAGE> 43
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Sentinel Growth Portfolio
Statement of Net Assets, December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK -- 94.6%
Aerospace & Defense -- 1.1%
Goodrich (B.F.) Co........................................ 8,400 $ 231,000
-----------
Building & Building Supplies -- 0.5%
Sherwin Williams Co. ..................................... 5,000 105,000
-----------
Business & Consumer Services -- 1.8%
America Online, Inc. ..................................... 4,000 301,750
Expedia, Inc. ............................................ 2,500 87,500
-----------
389,250
-----------
Chemicals & Allied Products -- 0.9%
Cambrex Corp. ............................................ 5,800 199,737
-----------
Communications -- 15.4%
Charter Communications, Inc. ............................. 7,500 164,062
General Instrument Corp. ................................. 9,800 833,000
*Global Crossing, Ltd. ................................... 1,500 75,000
*NEXTLINK Communications, Inc. ........................... 6,300 523,294
*Qualcomm, Inc. .......................................... 800 141,000
Scientific Atlanta, Inc. ................................. 9,400 522,875
*Teligent, Inc. .......................................... 3,000 185,250
True North Communications................................. 11,200 500,500
*WinStar Communications, Inc. ............................ 4,600 344,425
-----------
3,289,406
-----------
Computers -- 2.0%
*Cisco Systems, Inc. ..................................... 2,500 267,812
*Sun Microsystems, Inc. .................................. 2,000 154,875
-----------
422,687
-----------
Consumer Products -- 0.5%
Fortune Brands, Inc. ..................................... 3,500 115,719
-----------
Containers -- 1.2%
Bemis Co., Inc. .......................................... 7,300 254,587
-----------
Drugs & Health Care -- 9.1%
*Biogen, Inc. ............................................ 3,400 287,300
*Chiron Corp. ............................................ 4,000 169,500
*Genzyme Corp. ........................................... 3,000 135,000
*Human Genome Sciences, Inc. ............................. 3,500 534,187
Jones Pharma, Inc. ....................................... 4,000 173,750
*Millennium Pharmaceuticals, Inc. ........................ 2,900 353,800
*Watson Pharmaceuticals, Inc. ............................ 8,000 286,500
-----------
1,940,037
-----------
</TABLE>
42
<PAGE> 44
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Sentinel Growth Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Electronic Instruments -- 2.0%
*Analog Devices, Inc. .................................... 4,600 $ 427,800
-----------
Electronics -- 15.1%
Applied Power, Inc. Class A............................... 6,000 220,500
*Broadcom Corp., Class A.................................. 300 81,713
*C-Cube Microsystems, Inc. ............................... 11,100 690,975
*Cable Design Technologies, Inc. ......................... 5,700 131,100
CTS Corp. ................................................ 7,400 557,775
*JDS Uniphase Corp. ...................................... 4,000 645,250
Photronics, Inc........................................... 3,200 91,600
*Sawtek, Inc. ............................................ 12,000 798,750
-----------
3,217,663
-----------
Energy -- 1.2%
MidAmerican Energy Holdings Co. .......................... 7,600 256,025
-----------
Environmental Control -- 1.1%
Donaldson Co., Inc. ...................................... 10,000 240,625
-----------
Food & Food Distributors -- 4.2%
McCormick & Co., Inc. .................................... 12,600 374,850
*Whole Foods Market, Inc. ................................ 11,000 510,125
-----------
884,975
-----------
Insurance -- 0.9%
AFLAC, Inc. .............................................. 4,000 188,750
-----------
Medical Instruments -- 2.0%
Incyte Pharmaceuticals, Inc. ............................. 7,000 420,000
-----------
Oil & Gas -- 1.3%
*Cal Dive International, Inc. ............................ 8,500 281,563
-----------
Restaurants -- 4.4%
Applebee's International, Inc. ........................... 15,700 463,150
Outback Steakhouse, Inc. ................................. 6,700 173,781
Ruby Tuesday, Inc. ....................................... 16,800 305,550
-----------
942,481
-----------
Retail - Clothing and Apparel -- 2.1%
Lands' End, Inc. ......................................... 12,800 444,800
-----------
Retail Merchandising -- 2.2%
Ethan Allen Interiors, Inc. .............................. 14,250 456,891
-----------
Semiconductors -- 8.3%
*Applied Materials, Inc. ................................. 3,300 418,069
Dallas Semiconductor Corp. ............................... 9,300 599,269
</TABLE>
43
<PAGE> 45
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Sentinel Growth Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
*KLA-Tencor Corp. ........................................ 2,000 $ 222,750
*Novellus Systems, Inc. .................................. 4,300 526,884
-----------
1,766,972
-----------
Software -- 9.9%
*Ariba, Inc. ............................................. 800 141,900
Computer Associates International, Inc. .................. 5,000 349,688
*DoubleClick, Inc. ....................................... 1,000 253,062
*Inktomi Corp. ........................................... 1,200 106,500
*Lycos, Inc. ............................................. 2,000 159,125
Newbridge Networks Corp. ................................. 3,000 67,688
*Novell, Inc. ............................................ 15,500 617,094
*Oracle Corp. ............................................ 900 100,856
*Red Hat, Inc. ........................................... 1,500 316,875
-----------
2,112,788
-----------
Tobacco -- 0.5%
UST, Inc.................................................. 4,100 103,269
-----------
Transportation -- 6.8%
Air Express International Corp. .......................... 11,000 355,438
*Eagle USA Airfreight, Inc. .............................. 15,000 646,875
Robinson (C.H.) Worldwide, Inc. .......................... 11,400 453,150
-----------
1,455,463
-----------
TOTAL COMMON STOCK (COST $14,598,091)................... 20,147,488
-----------
</TABLE>
44
<PAGE> 46
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Sentinel Growth Portfolio
Statement of Net Assets, December 31, 1999 -- Concluded
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MATURITY SHARES
DESCRIPTION AND PERCENTAGE OF PORTFOLIO DATE OR PAR VALUE
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. AGENCY OBLIGATIONS -- 0.8%
Federal Home Loan Mortgage Corp., 5.25%................... 01/20/2000 $ 180,000 $ 179,501
-----------
TOTAL U.S. AGENCY OBLIGATIONS (COST $179,501)........... 179,501
-----------
SHORT TERM INVESTMENTS -- 4.5%
Temporary Investment Fund.-- TempCash................................... 947,781 947,781
-----------
TOTAL SHORT TERM INVESTMENTS (COST $947,781).......................... 947,781
-----------
TOTAL INVESTMENTS -- 99.9% (COST $15,725,373)......................... 21,274,770
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.1%............................. 22,607
-----------
NET ASSETS -- 100.0%
(Equivalent to $17.79 per share based on 1,196,980 shares of capital
stock outstanding)...................................................... $21,297,377
===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
($21,297,377/1,196,980 shares outstanding).............................. $ 17.79
===========
</TABLE>
*Non-Income Producing.
See accompanying notes to financial statements.
45
<PAGE> 47
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Large Cap Growth Portfolio
1999 Annual Review
Providentmutual Investment Management Company ("PIMC")
- --------------------------------------------------------------------------------
The total return for the All Pro Large Cap Growth Portfolio for the year
ended December 31, 1999 was 25.52%. This performance compares to the Portfolio's
large cap growth benchmark for the same period of 34.73%. The Wilshire Large Cap
Growth index is the style benchmark with which we compare the Portfolio's
performance.
PIMC has selected the following two sub-advisers to perform the day-to-day
management of the Portfolio, as well as the percentage of Portfolio assets to be
allocated to each of the subadvisers, as indicated below. These two firms
possess a large cap growth orientation and discipline.
<TABLE>
<CAPTION>
MANAGER APPROXIMATE PORTFOLIO %
- ------- -----------------------
<S> <C>
Geewax Terker & Co. 50%
Cohen, Klingenstein & Marks 50%
---
Total Portfolio 100%
</TABLE>
The U.S. stock market finished 1999 with a strong advance that began in the
fourth quarter. The majority of the performance for the year came in the fourth
quarter as investors' fears subsided approaching the year 2000. The Portfolio
benefited and advanced almost 24% in the fourth quarter alone. The Portfolio
easily beat the S&P 500 Index return of 21.1% for the year. This was the fifth
consecutive year of annual returns in excess of 20% for the broad market
average. As in 1998, the Portfolio's out-performance in 1999 was not broad-based
and was dominated by the large cap growth names, particularly technology
companies. The top 30 stocks in the S&P 500 Index accounted for 87% of the
return for the year. Interestingly, excluding technology stocks, the average
stock in the S&P 500 Index only rose 2.0% (on an equally weighted basis).
1999 was the sixth straight year in which growth has out performed value
strategies. Growth indices outperformed value indices by historically wide
margins. Looking more closely at 1999, the portfolio under-performed the
Wilshire Large Cap Growth index. A modest underweight in the technology sector
and certain weakness in consumer non-durable stocks contributed to this.
Importantly, the Portfolio was positioned more defensively in the second half of
the year by paring back on some of the stocks that had appreciated the most.
Certain of the highest price-earnings stocks and the highest market cap stocks
appeared to have excessive valuation levels. By taking gains where appropriate
and managing these risks, the Portfolio will be better positioned if a market
revaluation of high price-earnings stocks occurs. It is this type of risk
management that we believe will prevail over the long term.
46
<PAGE> 48
The largest sector holdings of the Portfolio include:
<TABLE>
<CAPTION>
SECTOR %
- ------ ----
<S> <C>
Drugs and Health Care 14.3%
Software 13.4%
Computer-Related 11.9%
Communications 9.4%
Electronics 6.3%
</TABLE>
Looking ahead to 2000, we believe that our positioning in high growth
industries will serve the Portfolio well. We expect to continue to be the
beneficiary of technology-related industries, given improving international
economies and the Internet.
We look forward to your support and our long-term goal of capital
appreciation.
Sarah C. Lange, CFA
[Market Street Fund All Pro Large Cap Growth Portfolio Performance Graph]
<TABLE>
<CAPTION>
FUND INDEX+
---- ------
<S> <C> <C>
Start 10194.00 10000.00
89 10558.00 10340.00
90 11695.00 8324.00
91 18283.00 12161.00
92 18755.00 14399.00
93 19722.00 17120.00
94 19730.00 16808.00
95 22389.00 21599.00
96 27091.00 25171.00
97 32837.00 30767.00
98 35461.00 30078.00
99 41121.00 36503.00
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5 YEAR 10 YEAR SINCE INCEPTION*
<S> <C> <C> <C>
25.52% n/a n/a 26.45%
</TABLE>
Past performance is not predictive of future performance.
+ The Index is the Wilshire Large Cap Growth Index, an unmanaged index of common
stocks that includes reinvestment of dividends.
* Inception date was May 4, 1998.
47
<PAGE> 49
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Large Cap Growth Portfolio
Statement of Net Assets, December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK -- 96.1%
Aerospace & Defense -- 0.2%
Honeywell International, Inc. ............................ 500 $ 28,844
*Howmet International, Inc. .............................. 220 3,974
United Technologies Corp. ................................ 800 52,000
-----------
84,818
-----------
Airlines -- 0.1%
*Midwest Express Holdings, Inc. .......................... 200 6,375
Southwest Airlines Co..................................... 2,675 43,302
-----------
49,677
-----------
Appliances -- 0.0%
Black & Decker Corp....................................... 200 10,450
-----------
Art Dealer & Auction House -- 0.0%
Sotheby's Holdings, Inc. Class A.......................... 300 9,000
-----------
Banks -- 1.5%
Fifth Third Bancorp....................................... 100 7,337
U.S. Bancorp.............................................. 22,900 545,306
Zions Bancorp............................................. 100 5,919
-----------
558,562
-----------
Beverages -- 1.7%
Coca Cola Co.............................................. 9,800 570,850
Pepsico, Inc.............................................. 2,500 88,125
-----------
658,975
-----------
Broadcasting & Publishing -- 0.2%
Central Newspapers, Inc. Class A.......................... 200 7,875
Dow Jones & Co., Inc. .................................... 300 20,400
*Infinity Broadcasting, Inc............................... 875 31,664
McGraw-Hill, Inc. ........................................ 200 12,325
Meredith Corp............................................. 150 6,253
-----------
78,517
-----------
Building & Building Supplies -- 0.2%
Centex Corp. ............................................. 200 4,937
Ecolab, Inc. ............................................. 700 27,387
Lowe's Cos., Inc.......................................... 500 29,875
-----------
62,199
-----------
</TABLE>
48
<PAGE> 50
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Large Cap Growth Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Business & Consumer Services -- 2.4%
*ACNielsen Corp. ......................................... 200 $ 4,925
*Affiliated Computer Services, Inc. ...................... 200 9,200
*America Online, Inc. .................................... 7,080 534,097
*BISYS Group, Inc. ....................................... 100 6,525
*Convergys Corp. ......................................... 300 9,225
*DST Systems.............................................. 100 7,631
Interpublic Group of Cos., Inc. .......................... 1,100 63,456
*Network Appliance, Inc. ................................. 800 66,450
Omnicom Group, Inc. ...................................... 850 85,000
*Safeguard Scientific, Inc. .............................. 125 20,258
*SEI Investments Co. ..................................... 100 11,902
*TMP Worldwide, Inc. ..................................... 100 14,200
*USWeb Corp. ............................................. 200 8,887
*VeriSign, Inc. .......................................... 325 61,994
*Whittman-Hart, Inc. ..................................... 100 5,362
-----------
909,112
-----------
Business Equipment -- 0.1%
*Lexmark International Group, Inc. Class A................ 300 27,150
-----------
Chemicals & Allied Products -- 0.0%
Valspar Corp.............................................. 100 4,187
-----------
</TABLE>
49
<PAGE> 51
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Large Cap Growth Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Communications -- 9.4%
*ADC Telecommunications, Inc.............................. 700 $ 50,794
*Adelphia Communications Corp. Class A.................... 300 19,688
*Allegiance Telecom, Inc. ................................ 330 30,442
ALLTEL Corp............................................... 600 49,612
Comcast Corp. Special Class A Non-Voting.................. 700 35,175
Corning Glass, Inc. ...................................... 1,100 141,831
General Instrument Corp. ................................. 200 17,000
*L-3 Communications Corp. ................................ 250 10,406
Lucent Technologies, Inc. ................................ 3,819 285,709
*MCI WorldCom, Inc. ...................................... 17,828 945,972
*McLeodUSA, Inc. ......................................... 600 35,325
Motorola, Inc. ........................................... 600 88,350
*Nextel Communications, Inc. Class A...................... 1,200 123,750
*Qualcomm, Inc. .......................................... 1,600 282,000
SBC Communications, Inc. ................................. 7,979 388,976
Scientific Atlanta, Inc. ................................. 100 5,562
*Sprint Corp. (PCS Group)................................. 8,775 899,437
*Tellabs, Inc. ........................................... 2,000 128,375
*Valassis Communications, Inc. ........................... 300 12,675
*Western Wireless Corp. Class A........................... 100 6,675
*WinStar Communications, Inc. ............................ 300 22,462
-----------
3,580,216
-----------
Computer Peripherals -- 0.8%
*Adaptec, Inc. ........................................... 400 19,950
*Comverse Technology, Inc. ............................... 600 86,850
*Veritas Software Corp. .................................. 1,270 181,769
-----------
288,569
-----------
Computers -- 11.1%
*CDW Computer Centers, Inc. .............................. 100 7,862
*Cisco Systems, Inc. ..................................... 17,080 1,829,694
*Dell Computer Corp. ..................................... 7,350 374,850
*EMC Corp. ............................................... 8,650 945,012
*Gateway, Inc. ........................................... 400 28,825
*Intuit, Inc. ............................................ 300 17,981
*Seagate Technology, Inc. ................................ 15,900 740,344
*Sun Microsystems, Inc. .................................. 3,600 278,775
-----------
4,223,343
-----------
</TABLE>
50
<PAGE> 52
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Large Cap Growth Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Consumer Products -- 1.2%
Estee Lauder Co. Class A.................................. 400 $ 20,175
Procter & Gamble Co. ..................................... 4,000 438,250
-----------
458,425
-----------
Cosmetics and Toiletries -- 1.3%
Avon Products, Inc. ...................................... 14,300 471,900
-----------
Diversified -- 0.1%
*Berkshire Hathaway, Inc. Class B......................... 20 36,600
-----------
Drugs & Health Care -- 14.3%
Abbott Laboratories....................................... 17,835 647,633
American Home Products Corp. ............................. 10,900 429,869
*Andrx Corp. ............................................. 300 12,694
Allergan, Inc. ........................................... 700 34,825
Bausch & Lomb, Inc. ...................................... 100 6,844
Becton, Dickinson & Co. .................................. 22,300 596,525
*Biogen, Inc. ............................................ 600 50,700
Bristol-Myers Squibb Co. ................................. 15,710 1,008,385
Colgate-Palmolive Co. .................................... 1,300 84,500
CVS Corp. ................................................ 900 35,944
*Express Scripts, Inc., Class A........................... 300 19,200
*IVAX Corp. .............................................. 300 7,725
Johnson & Johnson......................................... 4,650 433,031
Lilly (Eli) & Co. ........................................ 900 59,850
McKesson HBOC, Inc. ...................................... 25,675 579,292
*Medimmune, Inc. ......................................... 350 58,056
Merck & Co., Inc. ........................................ 16,310 1,093,789
Schering Plough Corp. .................................... 6,400 270,000
-----------
5,428,862
-----------
Electronic Instruments -- 0.3%
*Analog Devices, Inc. .................................... 900 83,700
*Conexant Systems, Inc. .................................. 400 26,550
-----------
110,250
-----------
</TABLE>
51
<PAGE> 53
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Large Cap Growth Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Electronics -- 6.3%
*American Power Conversion Corp. ......................... 350 $ 9,231
*Electronics For Imaging, Inc. ........................... 540 31,387
General Electric Co. ..................................... 9,810 1,518,097
*Gentex Corp. ............................................ 400 11,100
*JDS Uniphase Corp. ...................................... 600 96,787
Linear Technology Corp. .................................. 600 42,937
*Solectron Corp. ......................................... 200 19,025
Tandy Corp................................................ 10,700 526,306
Texas Instruments, Inc. .................................. 400 38,750
*Xilinx, Inc. ............................................ 2,400 109,125
-----------
2,402,745
-----------
Energy -- 0.1%
*AES Corp. ............................................... 100 7,475
*Calpine Corp. ........................................... 200 12,800
-----------
20,275
-----------
Environmental Services -- 0.1%
*Forest Laboratories, Inc. ............................... 400 24,575
-----------
Finance -- 5.5%
American Express Co. ..................................... 250 41,563
Charles Schwab Corp. ..................................... 2,000 76,750
Citigroup, Inc. .......................................... 8,775 487,561
*Concord EFS, Inc. ....................................... 1,200 30,900
Franklin Resources, Inc. ................................. 13,350 428,034
H & R Block, Inc. ........................................ 100 4,375
MBNA Corp. ............................................... 19,900 542,275
Paychex, Inc. ............................................ 725 29,000
Providian Financial Corp. ................................ 5,025 457,589
*Sabre Group Holdings, Inc. .............................. 100 5,125
-----------
2,103,172
-----------
Finance - Investment & Other -- 2.5%
Federated Investors, Inc., Class B........................ 250 5,016
Freddie Mac............................................... 350 16,472
S & P 400 Mid-Cap Depositary Receipts..................... 1,000 81,125
Standard & Poor's Depositary Receipts..................... 5,650 829,844
-----------
932,457
-----------
</TABLE>
52
<PAGE> 54
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Large Cap Growth Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Food & Food Distributors -- 0.4%
General Mills, Inc. ...................................... 1,200 $ 42,900
*Keebler Foods Co. ....................................... 500 14,063
Quaker Oats Co. .......................................... 400 26,250
Sysco Corp. .............................................. 1,300 51,431
-----------
134,644
-----------
Home Furnishings/Housewares -- 0.0%
*Mohawk Industries, Inc. ................................. 200 5,275
-----------
Hotel/Restaurants -- 0.0%
*MGM Grand, Inc. ......................................... 100 5,031
-----------
Industrial -- 0.1%
Danaher Corp. ............................................ 500 24,125
-----------
Insurance -- 1.5%
Conseco, Inc. ............................................ 32,000 572,000
-----------
Leasing -- 0.0%
Hertz Corp. (The), Class A................................ 100 5,013
-----------
Leisure & Amusements -- 0.1%
Harley-Davidson, Inc. .................................... 600 38,438
Mattel, Inc. ............................................. 200 2,625
*Pixar, Inc. ............................................. 200 7,075
-----------
48,138
-----------
Machinery & Heavy Equipment -- 0.0%
*SPX Corp. ............................................... 100 8,081
-----------
Manufacturing -- 0.1%
Millipore Corp. .......................................... 550 21,244
Symbol Technologies, Inc. ................................ 200 12,713
Textron, Inc. ............................................ 100 7,669
*Waters Corp. ............................................ 200 10,600
-----------
52,226
-----------
Medical & Medical Services -- 2.6%
*Amgen Corp. ............................................. 16,700 1,003,043
-----------
</TABLE>
53
<PAGE> 55
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Large Cap Growth Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Medical Instruments -- 1.9%
Beckman Coulter, Inc ..................................... 200 $ 10,175
Biomet, Inc. ............................................. 200 8,000
*Boston Scientific Corp. ................................. 27,300 597,187
*Guidant Corp. ........................................... 900 42,300
Stryker Corp. ............................................ 550 38,294
*Sybron International Corp. .............................. 300 7,406
-----------
703,362
-----------
Office Equipment & Supplies -- 1.7%
Avery-Dennison Corp. ..................................... 100 7,288
Pitney Bowes, Inc. ....................................... 600 28,988
*Staples, Inc. ........................................... 3,800 78,850
Xerox Corp. .............................................. 23,100 524,081
-----------
639,207
-----------
Oil Equipment & Services -- 0.0%
*BJ Services Co. ......................................... 100 4,181
-----------
Oil & Gas -- 0.1%
Apache Corp. ............................................. 100 3,694
Devon Energy Corp. ....................................... 100 3,288
Dynegy, Inc. ............................................. 200 4,863
*Noble Drilling Corp. .................................... 300 9,825
USX-Marathon Group, Inc. ................................. 200 4,938
-----------
26,608
-----------
Real Estate -- 0.0%
*Catellus Development Corp. .............................. 400 5,125
St. Joe (The) Co. ........................................ 200 4,863
-----------
9,988
-----------
Restaurants -- 1.1%
McDonald's Corp. ......................................... 10,000 403,125
-----------
Retail - Clothing and Apparel -- 1.5%
*American Eagle Outfitters, Inc. ......................... 500 22,500
Gap, Inc. ................................................ 10,950 503,700
*Jones Apparel Group, Inc. ............................... 200 5,425
Limited, Inc. ............................................ 200 8,663
*Linens 'N Things, Inc. .................................. 200 5,925
Ross Stores, Inc.......................................... 400 7,175
*Too, Inc. ............................................... 28 483
-----------
553,871
-----------
</TABLE>
54
<PAGE> 56
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Large Cap Growth Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Retail Merchandising -- 7.5%
*Barnes & Noble, Inc. .................................... 200 $ 4,125
*Bed, Bath & Beyond, Inc. ................................ 18,200 632,450
*BJ's Wholesale Club, Inc. ............................... 200 7,300
Circuit City Stores, Inc. ................................ 200 9,013
*Costco Wholesale Corp. .................................. 375 34,219
Dollar General Corp. ..................................... 20,750 472,063
*Dollar Tree Stores, Inc. ................................ 500 24,219
Home Depot, Inc. ......................................... 9,450 647,916
*Kohls Corp. ............................................. 600 43,313
*Ticketmaster Online-CitySearch, Inc. .................... 400 15,375
Wal-Mart Stores, Inc. .................................... 13,600 940,100
*Williams-Sonoma, Inc. ................................... 200 9,200
-----------
2,839,293
-----------
Semiconductors -- 4.7%
*Altera Corp. ............................................ 500 24,781
*Applied Materials, Inc. ................................. 2,060 260,976
*Applied Micro Circuits Corp. ............................ 200 25,450
*Atmel Corp. ............................................. 200 5,913
Intel Corp. .............................................. 16,150 1,329,347
*KLA-Tencor Corp. ........................................ 100 11,138
*LSI Logic Corp. ......................................... 150 10,125
*Microchip Technology, Inc. .............................. 100 6,844
*Novellus Systems, Inc. .................................. 100 12,253
*PMC-Sierra, Inc. ........................................ 100 16,031
*QLogic Corp. ............................................ 250 39,969
*Sanmina Corp. ........................................... 200 19,975
*SDL, Inc. ............................................... 100 21,800
*Vitesse Semiconductors Corp. ............................ 100 5,244
-----------
1,789,846
-----------
</TABLE>
55
<PAGE> 57
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Large Cap Growth Portfolio
Statement of Net Assets, December 31, 1999 -- Concluded
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Software -- 13.4%
Adobe Systems, Inc. ...................................... 400 $ 26,900
*BEA Systems, Inc. ....................................... 400 27,975
*BMC Software, Inc. ...................................... 600 47,963
*Citrix Systems, Inc. .................................... 300 36,900
Computer Associates International, Inc. .................. 7,700 538,519
*Compuware Corp. ......................................... 16,500 614,625
*Electronic Arts.......................................... 100 8,400
*Inktomi Corp. ........................................... 600 53,250
*Legato Systems, Inc. .................................... 600 41,287
*Lycos, Inc. ............................................. 500 39,781
*Macromedia, Inc. ........................................ 100 7,312
*Microsoft Corp. ......................................... 11,600 1,354,300
*Oracle Corp. ............................................ 9,600 1,075,801
*Parametric Technology Corp. ............................. 28,600 773,988
PE Corp. ................................................. 800 96,250
*Rational Software Corp. ................................. 700 34,388
*Scient Corp. ............................................ 100 8,644
*Symantec Corp. .......................................... 150 8,794
*Yahoo!, Inc. ............................................ 700 302,881
-----------
5,097,958
-----------
Transportation -- 0.0%
Expeditors International of Washington, Inc. ............. 100 4,381
-----------
Utilities -- 0.0%
Enron Corp. .............................................. 200 8,875
-----------
TOTAL COMMON STOCK (COST $29,221,996)................... 36,472,307
-----------
SHORT TERM INVESTMENTS -- 4.6%
Temporary Investment Fund, Inc. -- TempCash............... 1,760,874 1,760,874
-----------
TOTAL SHORT TERM INVESTMENTS (COST $1,760,874).......... 1,760,874
-----------
TOTAL INVESTMENTS -- 100.7% (COST $30,982,870).......... 38,233,181
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.7)%............. (272,162)
-----------
NET ASSETS -- 100.0%
(Equivalent to $14.77 per share based on 2,569,924 shares
of capital stock outstanding)........................... $37,961,019
===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
($37,961,019/2,569,924 shares outstanding)................ $ 14.77
===========
</TABLE>
*Non-Income Producing.
See accompanying notes to financial statements.
56
<PAGE> 58
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Large Cap Value Portfolio
1999 Annual Review
Providentmutual Investment Management Company ("PIMC")
- --------------------------------------------------------------------------------
The total return for the All Pro Large Cap Value Portfolio for the year
ended December 31, 1999 was 1.49%. This performance lagged the 8.27% return of
the Portfolio's large cap growth benchmark for the same period. The Wilshire
Large Cap Value index is the style benchmark with which we compare the
Portfolio's performance.
PIMC has selected the following sub-advisers to perform the day-to-day
management of the Portfolio, as well as the percentage of Portfolio assets to be
allocated to each of the subadvisers, as indicated below. These three firms
possess a large cap value orientation and discipline.
<TABLE>
<CAPTION>
MANAGER APPROXIMATE PORTFOLIO %
- ------- -----------------------
<S> <C>
Mellon Equity Advisors 45%
Equinox Capital 45%
Harris Associates 10%
---
Total Portfolio 100%
</TABLE>
The U.S. stock market finished 1999 with a strong advance that began in the
fourth quarter. The majority of the performance for the year came in the fourth
quarter as investors' fears subsided approaching the year 2000. This was the
fifth consecutive year of annual returns in excess of 20% for the broad market
average. As in 1998, the Portfolio's out-performance in 1999 was not broad-based
and was dominated by the large cap growth names, particularly technology
companies. The rally for the year was narrowly focused with over 60% of the
stocks on the NYSE down during the year!
In 1999, choosing between growth versus value stocks had a much greater
impact on returns than choosing between large and small cap styles. Growth
indices outperformed value indices by 25%-50%. This is the sixth straight year
in which value has under-performed growth. We do not believe this is a trend
that can persist for the long term. Many stocks now represent extremely
attractive buys.
The Portfolio posted positive returns in the fourth quarter after a
difficult first nine months in 1999. Certain company-specific events hurt
performance in 1999. Momentum stock investors can quickly sell stocks that fail
to meet consensus earnings estimates. These stocks can be down significantly in
one day. In this environment many value managers have abandoned their discipline
and have shifted to a more growth-like style. Our managers have responded by
improving their fundamental research efforts and enhancing their sell
disciplines. The value style discipline of this Portfolio remains the same.
57
<PAGE> 59
The largest sector holdings of the Portfolio include:
<TABLE>
<CAPTION>
SECTOR %
- ------ ----
<S> <C>
Finance 12.7%
Communications 11.6%
Banks 8.1%
Oil & Gas 7.3%
</TABLE>
We will continue to focus on under-valued investments with sustainable
earnings, and believe that our strategy of building a diversified portfolio
through disciplined stock selection will be rewarded over the long term. At some
point, the valuation discrepancy between value and growth styles is likely to
converge. Many value stocks should benefit from accelerating global growth. We
will not lose sight of our long-term investment horizon.
We look forward to your support and our long-term goal of capital
appreciation.
Sarah C. Lange, CFA
Market Street Fund
[All Pro Large Cap Value Portfolio Graph]
<TABLE>
<CAPTION>
FUND INDEX+
---- ------
<S> <C> <C>
Start 10000 10000
98 9900 10065
99 10048 10897
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
--------------------------------------
SINCE
1 YEAR 5 YEAR 10 YEAR INCEPTION*
------ ------ ------- ----------
<S> <C> <C> <C> <C>
1.49% n/a n/a 0.29%
</TABLE>
Past performance is not predictive of future performance.
+ The Index is the Wilshire Large Cap Value Index, an unmanaged index of common
stocks that includes reinvestment of dividends.
* Inception date was May 4, 1998.
58
<PAGE> 60
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Large Cap Value Portfolio
Statement of Net Assets, December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK -- 92.8%
Aerospace & Defense -- 2.5%
Boeing Co. ............................................... 2,400 $ 99,750
Honeywell International, Inc. ............................ 2,900 167,294
Lockheed Martin Corp. .................................... 2,900 63,437
Raytheon Co., Class B..................................... 5,500 146,094
United Technologies Corp. ................................ 2,023 131,495
-----------
608,070
-----------
Airlines -- 0.5%
*Alaska Air Group, Inc. .................................. 900 31,612
Delta Air Lines, Inc. .................................... 3,800 189,287
-----------
220,899
-----------
Apparel -- 0.3%
Nike, Inc. Class B........................................ 1,600 79,300
-----------
Appliances -- 0.4%
Black & Decker Corp. ..................................... 1,700 88,825
-----------
Automobiles -- 2.5%
Ford Motor Co. ........................................... 8,200 438,187
General Motors Corp. ..................................... 2,300 167,181
-----------
605,368
-----------
Banks -- 8.1%
Banc One Corp. ........................................... 8,230 263,875
Bank of America Corp. .................................... 9,723 487,973
Chase Manhattan Corp. .................................... 6,900 536,044
Firstar Corp. ............................................ 2,700 57,037
Morgan (J.P.) & Co., Inc. ................................ 2,000 253,250
PNC Bank Corp. ........................................... 5,700 253,650
Southtrust Corp. ......................................... 2,800 105,875
-----------
1,957,704
-----------
Beverages -- 0.5%
Pepsico, Inc. ............................................ 2,900 102,225
-----------
</TABLE>
59
<PAGE> 61
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Large Cap Value Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Broadcasting & Publishing -- 4.2%
*Fox Entertainment Group, Inc. ........................... 4,800 $ 119,700
Gannett, Inc. ............................................ 1,400 114,187
*Infinity Broadcasting, Inc. ............................. 1,300 47,044
Knight-Ridder, Inc. ...................................... 1,400 83,300
McGraw-Hill, Inc. ........................................ 2,300 141,737
*MediaOne Group, Inc. .................................... 2,600 199,712
Tribune Co. .............................................. 5,200 286,324
-----------
992,004
-----------
Building & Building Supplies -- 0.7%
Lafarge Corp. ............................................ 1,400 38,675
Lowe's Cos., Inc. ........................................ 800 47,800
Masco Corp. .............................................. 3,200 81,200
-----------
167,675
-----------
Business & Consumer Services -- 2.1%
Dun & Bradstreet Corp. ................................... 3,300 97,350
Electronic Data Systems................................... 4,700 314,606
XL Capital Ltd. .......................................... 1,900 98,562
-----------
510,518
-----------
Business Data Processing -- 0.2%
Reynolds & Reynolds Co. Class A........................... 2,100 47,250
-----------
Business Equipment -- 0.4%
*Lexmark International Group, Inc. Class A................ 1,000 90,500
-----------
Chemicals & Allied Products -- 2.8%
Dow Chemical Co. ......................................... 3,000 400,875
Du Pont (E.I.) de Nemours & Co. .......................... 3,751 247,097
Union Carbide Corp. ...................................... 500 33,375
-----------
681,347
-----------
</TABLE>
60
<PAGE> 62
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Large Cap Value Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Communications -- 11.6%
ALLTEL Corp. ............................................. 2,500 $ 206,719
AT&T Corp. ............................................... 13,650 692,737
Bell Atlantic Corp. ...................................... 6,200 381,688
BellSouth Corp. .......................................... 4,700 220,019
GTE Corp. ................................................ 2,300 162,294
Lucent Technologies, Inc. ................................ 1,100 82,294
*MCI WorldCom, Inc. ...................................... 11,250 596,953
Motorola, Inc. ........................................... 1,000 147,250
SBC Communications, Inc. ................................. 5,566 271,343
Telephone and Data Systems, Inc. ......................... 500 63,000
-----------
2,824,297
-----------
Computers -- 2.3%
International Business Machines Corp. .................... 2,800 302,400
*Unisys Corp. ............................................ 8,000 255,500
-----------
557,900
-----------
Consumer Products -- 0.5%
Fortune Brands, Inc. ..................................... 3,400 112,412
-----------
Drugs & Health Care -- 3.1%
Abbott Laboratories....................................... 1,200 43,575
Allergan, Inc. ........................................... 600 29,850
Bausch & Lomb, Inc. ...................................... 1,800 123,187
Baxter International, Inc. ............................... 3,100 194,719
Bristol-Myers Squibb Co. ................................. 2,800 179,725
Schering Plough Corp. .................................... 2,500 105,469
United Healthcare Corp. .................................. 1,300 69,063
-----------
745,588
-----------
Energy -- 2.3%
Chevron Corp. ............................................ 1,900 164,587
Consolidated Edison, Inc. ................................ 1,500 51,750
FPL Group, Inc. .......................................... 1,600 68,500
Royal Dutch Petroleum Co. ................................ 3,000 181,313
Southern Co. ............................................. 4,400 103,400
-----------
569,550
-----------
</TABLE>
61
<PAGE> 63
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Large Cap Value Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Finance -- 8.5%
Citigroup, Inc. .......................................... 12,800 $ 711,200
Comerica, Inc. ........................................... 2,800 130,725
Financial Security Assurance Holdings Ltd. ............... 900 46,912
First Data Corp. ......................................... 1,800 88,762
Fleet Boston Financial Corp. ............................. 9,300 323,756
GreenPoint Financial Corp. ............................... 2,000 47,625
Hartford Financial Services, Inc. ........................ 5,000 236,875
Household International, Inc. ............................ 1,500 55,875
H & R Block, Inc. ........................................ 1,900 83,125
MBNA Corp. ............................................... 3,900 106,275
Providian Financial Corp. ................................ 800 72,850
SLM Holding Corp. ........................................ 1,700 71,825
Washington Mutual, Inc. .................................. 3,850 100,100
-----------
2,075,905
-----------
Finance - Investment & Other -- 4.2%
Edwards (A.G.), Inc. ..................................... 2,900 92,981
Fannie Mae................................................ 5,600 349,650
Morgan Stanley Dean Witter & Co. ......................... 4,100 585,275
-----------
1,027,906
-----------
Food & Food Distributors -- 2.4%
General Mills, Inc. ...................................... 1,500 53,625
Heinz (H.J.) Co. ......................................... 1,800 71,663
IBP, Inc. ................................................ 900 16,200
Nabisco Holdings Corp., Class A........................... 2,300 72,738
Quaker Oats Co. .......................................... 800 52,500
Ralston Purina Group...................................... 4,300 119,863
*Safeway, Inc. ........................................... 4,400 156,475
Sara Lee Corp. ........................................... 1,800 39,712
-----------
582,776
-----------
Healthcare Services -- 1.5%
Columbia/HCA Healthcare Corp. ............................ 12,800 375,200
-----------
Hotel/Restaurants -- 0.3%
Host Marriott Corp. ...................................... 8,187 67,543
-----------
</TABLE>
62
<PAGE> 64
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Large Cap Value Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Insurance -- 5.5%
Allstate Corp. ........................................... 7,700 $ 184,800
Ambac Financial Group, Inc. .............................. 1,400 73,062
American General Corp. ................................... 2,900 220,038
American International Group, Inc. ....................... 2,400 259,500
Cigna Corp. .............................................. 1,400 112,787
ConAgra, Inc. ............................................ 2,000 45,125
Conseco, Inc. ............................................ 12,400 221,650
Marsh & McLennan Cos., Inc. .............................. 600 57,412
Old Republic International Corp. ......................... 2,300 31,337
Partner Re Ltd. .......................................... 2,400 77,850
St. Paul Companies, Inc. ................................. 1,500 50,531
-----------
1,334,092
-----------
Leisure & Amusements -- 0.4%
Mattel, Inc. ............................................. 7,400 97,125
-----------
Machinery & Heavy Equipment -- 1.7%
Caterpillar, Inc. ........................................ 2,200 103,538
Deere & Co. .............................................. 5,800 251,575
Dover Corp. .............................................. 1,500 68,062
-----------
423,175
-----------
Manufacturing -- 2.9%
Alcoa, Inc. .............................................. 2,400 199,200
Cummins Engine Co., Inc. ................................. 1,100 53,144
Eaton Corp. .............................................. 700 50,838
PPG Industries, Inc. ..................................... 2,400 150,150
Textron, Inc. ............................................ 2,300 176,381
Tyco International Ltd. .................................. 1,100 42,762
U.S. Industries, Inc. .................................... 2,100 29,400
-----------
701,875
-----------
Manufacturing Equipment -- 1.0%
Illinois Tool Works, Inc. ................................ 1,188 80,264
Ingersoll Rand Co. ....................................... 2,900 159,681
-----------
239,945
-----------
Medical Equipment & Supplies -- 0.2%
Cooper Industries, Inc. .................................. 1,200 48,525
-----------
Metals - Iron & Steel -- 0.2%
AK Steel Holding Corp. ................................... 2,100 39,638
-----------
Natural Gas -- 0.3%
Phillips Petroleum Co. ................................... 1,600 75,200
-----------
</TABLE>
63
<PAGE> 65
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Large Cap Value Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Oil & Gas -- 7.3%
Amerada Hess Corp. ....................................... 3,400 $ 192,950
BP Amoco Plc ADR.......................................... 1,600 94,900
Coastal Corp. ............................................ 5,400 191,362
Ensco International, Inc. ................................ 1,300 29,738
Exxon Mobil Corp. ........................................ 10,828 872,331
Texaco, Inc. ............................................. 2,000 108,625
Unocal Corp. ............................................. 5,700 191,306
USX-Marathon Group, Inc. ................................. 3,700 91,344
-----------
1,772,556
-----------
Oil Equipment & Services -- 0.7%
Diamond Offshore Drilling, Inc. .......................... 1,500 45,844
Kerr-McGee Corp. ......................................... 600 37,200
National Fuel Gas Co. .................................... 900 41,850
Tidewater, Inc. .......................................... 1,000 36,000
-----------
160,894
-----------
Paper & Forest Products -- 2.5%
Champion International Corp. ............................. 1,300 80,519
Fort James Corp. ......................................... 3,000 82,125
International Paper Co. .................................. 6,400 361,201
Temple Inland, Inc. ...................................... 1,200 79,125
-----------
602,970
-----------
Photography Equipment & Supplies -- 0.7%
Eastman Kodak Co. ........................................ 2,600 172,250
-----------
Railroads -- 0.9%
Union Pacific Corp., Series A............................. 5,200 226,850
-----------
Real Estate -- 0.3%
*Catellus Development Corp. .............................. 5,700 73,031
-----------
Restaurants -- 0.1%
Darden Restaurants, Inc. ................................. 1,200 21,750
-----------
Retail - Clothing and Apparel -- 0.4%
Limited, Inc. ............................................ 2,300 99,619
-----------
Retail Merchandising -- 0.8%
May Department Stores Co. ................................ 1,300 41,925
Sears, Roebuck & Co. ..................................... 2,900 88,269
TJX Companies, Inc. ...................................... 3,000 61,313
-----------
191,507
-----------
</TABLE>
64
<PAGE> 66
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Large Cap Value Portfolio
Statement of Net Assets, December 31, 1999 -- Concluded
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Semiconductors -- 1.8%
Cypress Semiconductor Corp. .............................. 1,300 $ 42,088
Intel Corp. .............................................. 3,164 260,437
*KLA-Tencor Corp. ........................................ 600 66,825
*Micron Technology, Inc. ................................. 800 62,200
-----------
431,550
-----------
Software -- 1.2%
*BMC Software, Inc. ...................................... 2,900 231,819
*Compuware Corp. ......................................... 1,400 52,150
-----------
283,969
-----------
Tobacco -- 0.3%
Philip Morris Cos., Inc. ................................. 3,000 69,563
-----------
Utilities -- 1.7%
Baltimore Gas & Electric Co. ............................. 2,900 84,100
DTE Energy Co. ........................................... 2,400 75,300
El Paso Energy Corp. ..................................... 1,000 38,813
Pinnacle West Capital Corp. .............................. 1,400 42,788
Public Service Enterprise Group, Inc. .................... 2,200 76,588
Texas Utilities Co. ...................................... 2,900 103,131
-----------
420,720
-----------
TOTAL COMMON STOCK (COST $22,482,529)................... 22,577,566
-----------
SHORT TERM INVESTMENTS -- 3.8%
Temporary Investment Fund, Inc. -- TempCash............... 916,007 916,007
-----------
TOTAL SHORT TERM INVESTMENTS (COST $916,007)............ 916,007
-----------
TOTAL INVESTMENTS -- 96.6% (COST $23,398,536)........... 23,493,573
OTHER ASSETS IN EXCESS OF LIABILITIES -- 3.4%............... 825,038
-----------
NET ASSETS -- 100.0%
(Equivalent to $9.98 per share based on 2,435,689 shares
of capital stock outstanding)........................... $24,318,611
===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
($24,318,611/2,435,689 shares outstanding)................ $ 9.98
===========
</TABLE>
*Non-Income Producing.
See accompanying notes to financial statements.
65
<PAGE> 67
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Small Cap Growth Portfolio
1999 Annual Review
Providentmutual Investment Management Company ("PIMC")
- --------------------------------------------------------------------------------
The total return for the All Pro Small Cap Growth Portfolio for the year
ended December 31, 1999 was 92.14%. This performance significantly surpassed the
Portfolio's small cap growth benchmark for the year of 52.56%. The Wilshire
Small Cap Growth Index is the style benchmark with which we compare the
Portfolio's performance.
PIMC has selected the following two sub-advisers to perform the day-to-day
management of the Portfolio, as well as the percentage of Portfolio assets to be
allocated to each of the subadvisers, as indicated below. These two firms
possess a small cap growth orientation and discipline.
<TABLE>
<CAPTION>
MANAGER APPROXIMATE PORTFOLIO %
- ------- -----------------------
<S> <C>
Husic Capital Management 60%
Standish, Ayer & Wood 40%
---
Total Portfolio 100%
</TABLE>
In 1999 for the first time in several years small cap growth stocks
significantly outperformed large cap growth stocks. Smaller cap stocks have
experienced more rapidly accelerating earnings growth. The outstanding
performance of the Portfolio in 1999 was driven by stock selection in the
Internet business services and broad based software sectors. For the second year
in a row, the overall market was led by the technology sector. The NASDAQ Index
turned in a stunning 85.6% return.
In the fourth quarter of 1999, the markets began to anticipate a smooth
transition through the Y2K milestone, and investors plowed money back into
technology stocks, triggering an explosive rise in growth stock prices. The
Portfolio outperformed its benchmark by a huge margin during this period and was
up over 55% for the quarter alone.
The largest sector holdings of the Portfolio include:
<TABLE>
<CAPTION>
SECTOR %
- ------ ----
<S> <C>
Electronics 18.9%
Communications 15.9%
Software 13.7%
Computers 10.7%
Business & Consumer Services 7.7%
</TABLE>
The investment process used for the Portfolio is intended to position it in
well-managed, emerging growth companies in high growth industries. We believe
that technology stocks, though volatile, will continue to perform well over the
long term. Electronic technology (the heaviest sector weighting in the
portfolio) is the key to more productivity improvement across corporate America
and there is broad-based spending in this area.
66
<PAGE> 68
We look forward to your support and to our long-term goal of capital
appreciation.
Sarah C. Lange, CFA
Market Street Fund
[All Pro Small Cap Growth Portfolio Performance Graph]
<TABLE>
<CAPTION>
FUND INDEX+
---- ------
<S> <C> <C>
Start 10000.00 10000.00
98 9800.00 9315.00
99 18830.00 14211.00
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
--------------------------------------
SINCE
1 YEAR 5 YEAR 10 YEAR INCEPTION*
------ ------ ------- ----------
<S> <C> <C> <C> <C>
92.14% n/a n/a 46.31%
</TABLE>
Past performance is not predictive of future performance.
+ The Index is in the Wilshire Small Cap Growth Index, an unmanaged index of
common stocks that includes reinvestment of dividends.
* Inception date was May 4, 1998.
67
<PAGE> 69
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Small Cap Growth Portfolio
Statement of Net Assets, December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK -- 99.2%
Airlines -- 1.4%
*Atlantic Coast Airlines, Inc............................. 7,700 $ 182,875
*Mesa Airlines, Inc....................................... 4,700 22,324
*Ryanair Holdings Plc..................................... 6,400 352,800
SkyWest, Inc.............................................. 3,200 89,600
-----------
647,599
-----------
Automotive & Equipment -- 0.5%
Exide Corp................................................ 25,100 208,644
-----------
Banks -- 0.8%
*First Republic Bank, Inc................................. 10,600 249,100
Westamerica Bancorporation................................ 3,800 106,162
-----------
355,262
-----------
Broadcasting & Publishing -- 3.0%
*Ascent Entertainment Group............................... 19,400 246,137
*Citadel Communications Corp.............................. 5,100 330,862
*Emmis Broadcasting Corp. Class A......................... 3,300 411,314
*Scandinavian Broadcasting S.A............................ 7,800 379,762
-----------
1,368,075
-----------
Building & Building Supplies -- 0.4%
*Dycom Industries, Inc.................................... 4,400 193,875
-----------
Business & Consumer Services -- 7.7%
*CBT Group Plc ADR........................................ 7,900 264,650
*Corporate Executive Board Co............................. 2,300 128,512
*Ebenx, Inc............................................... 13,400 606,350
*Getty Images, Inc........................................ 4,000 195,500
*IT Group, Inc............................................ 34,500 316,969
*Liberty Digital, Inc. Class A............................ 15,200 1,128,600
*Sportsline USA, Inc...................................... 3,900 195,487
*TMP Worldwide, Inc....................................... 4,600 653,200
-----------
3,489,268
-----------
Chemicals & Allied Products -- 0.7%
Geon Co................................................... 10,200 331,500
-----------
</TABLE>
68
<PAGE> 70
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Small Cap Growth Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Communications -- 15.9%
*Acme Communications, Inc................................. 13,800 $ 458,850
*Adaptive Broadband Corp.................................. 5,400 398,587
*Adelphia Communications Corp. Class A.................... 8,600 564,375
*Harmonic Lightwaves, Inc................................. 3,100 294,306
*ICG Communications, Inc.................................. 25,100 470,625
*Insight Communications Co., Inc.......................... 9,400 278,475
*Leap Wireless International, Inc......................... 8,900 698,650
*Netoptix Corp............................................ 1,900 126,825
*Ortel Corp............................................... 3,000 360,000
*Osicom Technologies, Inc................................. 13,400 608,025
*Pinnacle Holdings, Inc................................... 7,000 296,625
*Voicestream Wireless Corp................................ 8,000 1,138,500
*Western Wireless Corp. Class A........................... 7,200 480,600
*Westwood One, Inc........................................ 3,300 250,800
*Wink Communications, Inc................................. 12,700 762,794
-----------
7,188,037
-----------
Computers -- 10.7%
*Applied Micro Circuits Corp.............................. 2,400 305,400
*Bottomline Technologies, Inc............................. 3,800 136,800
*Clarus Corp.............................................. 3,500 231,000
*Cybex Computer Products Corp............................. 4,300 174,150
*Data Return Corp......................................... 6,300 337,050
*Emulex Corp.............................................. 2,800 315,000
*Gadzoox Networks, Inc.................................... 2,900 126,331
*GetThere.Com, Inc........................................ 4,500 181,125
*Infospace.Com, Inc....................................... 1,000 214,000
*Media Metrix, Inc........................................ 7,100 253,825
*NBC Internet, Inc........................................ 8,300 641,175
*NetScout Systems, Inc.................................... 7,500 232,500
*SciQuest.Com, Inc........................................ 1,900 151,050
*Siebel Systems, Inc...................................... 5,400 453,600
*SmartDisk Corp........................................... 5,300 173,575
*VerticalNet, Inc......................................... 4,100 672,400
*Visual Networks, Inc..................................... 3,000 237,750
-----------
4,836,731
-----------
</TABLE>
69
<PAGE> 71
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Small Cap Growth Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Drugs & Health Care -- 5.6%
*Alkermes, Inc............................................ 3,700 $ 181,763
Bindley Western Industries, Inc........................... 13,200 198,825
*Cephalon, Inc............................................ 8,700 300,694
*COR Therapeutics, Inc.................................... 7,300 196,187
*Inhale Therapeutic Systems............................... 4,600 195,788
*Novoste Corp............................................. 6,000 99,000
*Pharmacyclics, Inc....................................... 3,100 127,875
*Priority Healthcare Corp. Class B........................ 16,774 485,398
*Progenics Pharmaceuticals, Inc........................... 3,500 171,062
*Protein Design Labs, Inc................................. 4,700 329,000
*Vical, Inc............................................... 8,800 263,450
-----------
2,549,042
-----------
Electrical Equipment -- 1.0%
*Micrel, Inc.............................................. 6,700 381,481
*Quanta Services, Inc..................................... 1,700 48,025
-----------
429,506
-----------
Electronic Instruments -- 1.1%
*ATMI, Inc................................................ 7,700 254,581
*Veeco Instruments, Inc................................... 5,300 248,106
-----------
502,687
-----------
Electronics -- 18.9%
*Burr-Brown Corp.......................................... 9,300 335,963
*Credence Systems Corp.................................... 4,400 380,600
*Cree Research, Inc....................................... 12,700 1,084,263
*Intertan, Inc............................................ 17,400 454,575
*LAM Research Corp........................................ 6,800 758,625
*Netsilicon, Inc.......................................... 31,000 621,937
*PLX Technology, Inc...................................... 15,300 289,744
*Photronics, Inc.......................................... 5,800 166,025
*Quicklogic Corp.......................................... 9,400 155,100
*SDL, Inc................................................. 4,500 981,000
*Semtech Corp............................................. 8,800 458,700
*Triquint Semiconductor, Inc.............................. 8,200 912,250
*Varian Semiconductor Equipment Associates, Inc........... 36,600 1,244,400
*Zoran Corp............................................... 12,200 680,150
-----------
8,523,332
-----------
</TABLE>
70
<PAGE> 72
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Small Cap Growth Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Finance -- 0.9%
*Golden State Bancorp, Inc................................ 7,600 $ 131,100
Jefferies Group, Inc...................................... 3,400 74,800
*Nextcard, Inc............................................ 7,300 210,787
-----------
416,687
-----------
Finance - Investment & Other -- 0.2%
*NCO Group, Inc........................................... 3,000 90,375
-----------
Hotel/Restaurants -- 1.0%
*Mandalay Resort Group.................................... 21,500 432,688
-----------
Leisure & Amusements -- 1.8%
*Bally Total Fitness Holding Corp......................... 14,200 378,963
*Cinar Films, Inc......................................... 12,500 306,250
*Tweeter Home Entertainment Group, Inc.................... 3,400 120,700
-----------
805,913
-----------
Manufacturing -- 1.1%
Kennametal, Inc........................................... 15,200 511,100
-----------
Metals - Iron & Steel -- 0.1%
*Mueller Industries, Inc.................................. 1,300 47,125
-----------
Oil & Gas -- 0.6%
*Cal Dive International, Inc.............................. 2,300 76,188
*Core Laboratories N.V.................................... 8,700 174,544
-----------
250,732
-----------
Oil Equipment & Services -- 5.6%
*BJ Services Co........................................... 14,100 589,556
*Marine Drilling.......................................... 30,800 691,075
*Oceaneering International, Inc........................... 9,900 147,881
*Rowan Cos., Inc.......................................... 28,200 611,588
*Smith International, Inc................................. 9,500 472,031
-----------
2,512,131
-----------
Real Estate -- 1.0%
*Costar Group............................................. 12,300 441,263
-----------
Retail Merchandising -- 0.7%
*1-800-Flowers.Com, Inc................................... 13,100 140,006
*RoweCom, Inc............................................. 4,300 195,113
-----------
335,119
-----------
</TABLE>
71
<PAGE> 73
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Small Cap Growth Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Semiconductors -- 3.3%
*Exar Corp................................................ 3,000 $ 176,625
*Globespan, Inc........................................... 2,200 143,275
*Integrated Device Technology, Inc........................ 25,000 725,000
*QLogic Corp.............................................. 2,800 447,650
-----------
1,492,550
-----------
Software -- 13.7%
*Bluestone Software, Inc.................................. 1,800 207,000
*Broadbase Software, Inc.................................. 13,100 1,473,750
*C-Bridge Internet Solutions.............................. 1,400 68,075
*Diamond Technology Partners, Inc......................... 1,450 124,609
*Digex, Inc............................................... 5,100 350,625
*Digimarc Corp............................................ 3,400 170,000
*Digital Island, Inc...................................... 8,600 818,075
*Digital River, Inc....................................... 3,500 116,594
*HNC Software, Inc........................................ 2,300 243,225
*Interwoven, Inc.......................................... 5,400 656,775
*InterVU, Inc............................................. 2,500 262,500
*Manugistics Group, Inc................................... 6,300 203,569
*Mercury Interactive Corp................................. 1,700 183,494
*Ondisplay, Inc........................................... 3,800 345,325
*Preview Systems, Inc..................................... 2,900 188,138
*TSI International Software Ltd........................... 5,200 294,450
*Viador, Inc.............................................. 3,000 127,125
*WorldGate Communications, Inc............................ 6,100 290,131
*Xcelera.Com, Inc......................................... 400 55,800
-----------
6,179,260
-----------
Transportation -- 1.3%
*Atlas Air, Inc........................................... 4,200 115,238
*Eagle USA Airfreight, Inc................................ 7,000 301,875
*Forward Air Corp......................................... 4,300 186,513
-----------
603,626
-----------
Waste Management -- 0.2%
*Waste Connections, Inc................................... 6,800 98,175
-----------
TOTAL COMMON STOCK (COST $27,953,339)................... 44,840,302
-----------
</TABLE>
72
<PAGE> 74
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Small Capital Growth Portfolio
Statement of Net Assets, December 31, 1999 -- Concluded
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
SHORT TERM INVESTMENTS -- 6.8%
Temporary Investment Fund, Inc. -- TempCash............... 3,075,488 $ 3,075,488
-----------
TOTAL SHORT TERM INVESTMENTS (COST $3,075,488).......... 3,075,488
-----------
TOTAL INVESTMENTS -- 106.0% (COST $31,028,827).......... 47,915,790
LIABILITIES IN EXCESS OF OTHER ASSETS -- (6.0%)............. (2,715,308)
-----------
NET ASSETS -- 0.0%
(Equivalent to $18.83 per share based on 2,400,329 shares
of capital stock outstanding)........................... $45,200,482
===========
NET ASSET VALUE, OFFERING, AND REDEMPTION PRICE PER SHARE
(45,200,482/2,400,329 shares outstanding.................. $ 18.83
===========
</TABLE>
*Non-Income Producing.
See accompanying notes to financial statements.
73
<PAGE> 75
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Small Cap Value Portfolio
1999 Annual Review
Providentmutual Investment Management Company ("PIMC")
- --------------------------------------------------------------------------------
The total return for the All Pro Small Cap Value Portfolio for the year
ended December 31, 1999 was -8.05% annualized. This performance lagged the
Portfolio's small cap value benchmark for the same period of -1.41%. The
Wilshire Small Cap Value Index is the style benchmark with which we compare the
Portfolio's performance.
PIMC has selected the following two sub-advisers to perform the day-to-day
management of the Portfolio, as well as the percentage of Portfolio assets to be
allocated to each of the subadvisers, as indicated below. These two firms
possess a small cap value orientation and discipline.
<TABLE>
<CAPTION>
MANAGER APPROXIMATE PORTFOLIO %
- ------- -----------------------
<S> <C>
Denver Investment Advisors 60%
Reams Asset Management Co. 40%
---
Total Portfolio 100%
</TABLE>
In 1999, small cap value continued to languish for lack of investor
interest. The low relative valuations of small cap value stocks stood in sharp
contrast to the somewhat lofty valuations of some of the large cap stocks. The
performance of the Portfolio in 1999 was disappointing. At the end of the fourth
quarter, PIMC replaced one of the investment managers with Reams Asset
Management Company. Reams has a successful long term performance track record in
what has been a difficult environment, in general, for small cap managers.
Reams, based in Columbus, Indiana has demonstrated a small cap value orientation
and discipline, and we believe will be a strong contributor to the Portfolio's
success going forward.
The largest sector holdings of the Portfolio include:
<TABLE>
<CAPTION>
SECTOR %
- ------ ---
<S> <C>
Electronics 7.3%
Manufacturing 6.6%
Real Estate 6.1%
Banks 5.5%
</TABLE>
We believe that individual stock valuation is extremely important in making
investment judgments. The stocks are chosen based on extensive fundamental
analysis and the Portfolio is broadly diversified by sector. The Portfolio
targets stable or improving businesses at low relative multiples of price to
earnings, price to book value, and price to cash flow. Today, valuation
inefficiencies appear to be extreme and the valuations of small cap stocks
appear increasingly compelling. The environment also appears ripe for mergers
and acquisitions, which should benefit some of our undervalued holdings.
74
<PAGE> 76
We look forward to your support and to our long-term goal of capital
appreciation.
Sarah C. Lange, CFA
Market Street Fund
[All Pro Small Cap Value Portfolio Performance Graph]
<TABLE>
<CAPTION>
FUND INDEX+
---- ------
<S> <C> <C>
Start 10000.00 10000.00
98 8250.00 8362.00
99 7586.00 8244.00
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
--------------------------------------
SINCE
1 YEAR 5 YEAR 10 YEAR INCEPTION*
------ ------ ------- ----------
<S> <C> <C> <C> <C>
-8.05% n/a n/a -15.31%
</TABLE>
Past performance is not predictive of future performance.
+ The Index is the Wilshire Small Cap Value Index, an unmanaged index of common
stocks that includes reinvestment of dividends.
* Inception date was May 4, 1998.
75
<PAGE> 77
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Small Cap Value Portfolio
Statement of Net Assets, December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK -- 92.7%
Aerospace & Defense -- 1.7%
AAR Corp. ................................................ 7,900 $ 141,706
*Kellstrom Industries, Inc. .............................. 3,100 28,287
Primex Technologies, Inc. ................................ 1,000 20,750
-----------
190,743
-----------
Airlines -- 0.3%
*America West Airlines, Inc. ............................. 1,600 33,200
-----------
Apparel -- 0.5%
*Unifi, Inc. ............................................. 4,700 57,869
-----------
Automobiles -- 0.5%
Winnebago Industries, Inc. ............................... 2,800 56,175
-----------
Automotive Equipment -- 1.6%
Arvin Industries, Inc. ................................... 1,000 28,375
*Dura Automotive Systems, Inc. ........................... 1,600 27,900
*Tower Automotive, Inc. .................................. 3,600 55,575
*Transportation Technologies Industries................... 2,200 39,737
*Wabash National Corp. ................................... 2,300 34,500
-----------
186,087
-----------
Banks -- 5.5%
Amcore Financial.......................................... 2,900 69,600
Andover Bancorp, Inc. .................................... 700 19,600
Bank United Corp., Class A................................ 1,300 35,425
Chittenden Corp. ......................................... 1,207 35,757
Colonial BancGroup, Inc. ................................. 4,600 47,725
Commercial Federal Corp. ................................. 6,000 106,875
Dime Community Bancorp, Inc. ............................. 550 10,175
East West Bancorp, Inc. .................................. 2,900 33,169
First Bell Bancorp, Inc. ................................. 3,800 57,950
Hudson United Bancorp..................................... 2,884 73,722
*Local Financial Corp. ................................... 3,500 36,312
Seacoast Financial Services Corp. ........................ 6,400 65,200
Sovereign Bancorp, Inc. .................................. 3,900 29,067
-----------
620,577
-----------
Beverages -- 0.9%
*Canandaigua Brands, Inc., Class A........................ 1,200 61,200
Coors Adolph Co. Class B.................................. 700 36,750
-----------
97,950
-----------
</TABLE>
76
<PAGE> 78
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Small Cap Value Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Building & Building Supplies -- 3.4%
BMC West Corp. ........................................... 2,720 $ 27,880
Florida Rock Industries, Inc. ............................ 500 17,219
*Jacobs Engineering Group, Inc. .......................... 3,100 100,750
Lafarge Corp. ............................................ 1,900 52,487
M.D.C. Holdings, Inc. .................................... 2,300 36,081
*Morrison Knudsen Corp. .................................. 6,100 47,656
Texas Industries, Inc. ................................... 1,400 59,587
*Toll Brothers, Inc. ..................................... 2,350 43,769
-----------
385,429
-----------
Business & Consumer Services -- 4.7%
*Interep National Radio Sales, Inc. ...................... 3,800 50,825
*Interim Services, Inc. .................................. 6,200 153,450
*Personnel Group of America, Inc. ........................ 5,800 58,725
*Seitel, Inc. ............................................ 3,700 24,975
*Sterling Software, Inc. ................................. 6,400 201,600
*Zomax Optical Media, Inc. ............................... 900 40,725
-----------
530,300
-----------
Chemicals & Allied Products -- 0.8%
*Ferro Corp. ............................................. 3,800 83,600
*International Speciality................................. 1,100 10,106
-----------
93,706
-----------
Communications -- 0.8%
*CommScope, Inc. ......................................... 1,400 56,437
Teltrend, Inc. ........................................... 1,000 30,250
-----------
86,687
-----------
Computers -- 2.0%
*In Focus Systems, Inc. .................................. 2,600 60,287
*InterVoice-Brite, Inc. .................................. 4,300 101,722
*Metamor Worldwide, Inc. ................................. 1,200 34,950
*Pomeroy Computer Resources, Inc. ........................ 2,200 29,150
-----------
226,109
-----------
Consumer Staples -- 0.5%
Church and Dwight, Inc. .................................. 2,100 56,044
-----------
Containers -- 0.3%
Ivex Packaging Corp. ..................................... 2,540 25,400
*US Can Corp. ............................................ 350 6,956
-----------
32,356
-----------
</TABLE>
77
<PAGE> 79
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Small Cap Value Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Drugs & Health Care -- 0.9%
Bindley Western Industries, Inc. ......................... 4,533 $ 68,278
*Medicis Pharmaceutical Corp. Class A..................... 800 34,050
-----------
102,328
-----------
Electrical Equipment -- 1.0%
*UCAR International, Inc. ................................ 6,640 118,275
-----------
Electronics -- 7.3%
Applied Power, Inc. Class A............................... 1,300 47,775
*Ardent Software, Inc. ................................... 3,400 132,600
*Arrow Electronics, Inc. ................................. 4,700 119,262
*Benchmark Electronics, Inc. ............................. 2,100 48,169
Burr-Brown Corp. ......................................... 1,740 62,857
*Cable Design Technologies, Inc. ......................... 2,200 50,600
Harman International Industries, Inc. .................... 2,400 134,700
*International Rectifier Corp. ........................... 5,500 143,000
*Stoneridge, Inc. ........................................ 1,200 18,525
*Telcom Semiconductor, Inc. .............................. 3,300 69,300
-----------
826,788
-----------
Energy -- 1.0%
*NSTAR.................................................... 1,450 58,725
RGS Energy Corp. ......................................... 2,400 49,350
-----------
108,075
-----------
Engineering -- 0.3%
*URS Corp. ............................................... 1,600 34,700
-----------
Finance -- 3.0%
Astoria Financial Corp. .................................. 2,200 66,962
Dain Rauscher Corp. ...................................... 1,100 51,150
Downey Financial Corp. ................................... 3,100 62,581
Golden State Bancorp, Inc. ............................... 4,500 77,625
Heller Financial, Inc. ................................... 3,300 66,206
MAF Bancorp, Inc. ........................................ 800 16,750
-----------
341,274
-----------
Finance - Investment & Other -- 0.2%
Advest Group, Inc. ....................................... 1,100 20,212
-----------
Foods -- 2.3%
*International Home Foods, Inc. .......................... 6,900 119,887
*Suiza Foods Corp. ....................................... 3,600 142,650
-----------
262,537
-----------
</TABLE>
78
<PAGE> 80
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Small Cap Value Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Food & Food Distributors -- 1.2%
*Ben & Jerry's Homemade, Inc. Class A..................... 1,100 $ 27,362
Earthgrains Co. .......................................... 3,900 62,887
*Smithfield Foods, Inc. .................................. 1,800 43,200
-----------
133,449
-----------
Healthcare Services -- 1.4%
*Trigon Healthcare, Inc. ................................. 5,270 155,465
-----------
Home Furnishings -- 0.4%
*LADD Furniture, Inc. .................................... 2,100 41,475
-----------
Home Furnishings/Housewares -- 1.8%
Bush Industries, Inc. Class A............................. 3,600 61,875
*Furniture Brands International, Inc. .................... 4,430 97,460
*Mohawk Industries, Inc. ................................. 2,000 52,750
-----------
212,085
-----------
Hotel/Restaurants -- 0.7%
Mandalay Resort Group..................................... 3,800 76,475
-----------
Insurance -- 3.3%
Chicago Title Corp. ...................................... 1,100 50,875
*Delphi Financial Group, Inc. Class A..................... 1,364 40,920
Enhance Financial Services Group, Inc. ................... 1,500 24,375
FBL Financial Group, Inc. ................................ 1,900 38,000
MONY Group Inc. .......................................... 1,000 29,187
PMI Group, Inc. .......................................... 1,300 63,456
Radian Group, Inc. ....................................... 1,000 47,750
Reinsurance Group, Inc. .................................. 2,900 80,475
-----------
375,038
-----------
Leasing -- 2.3%
Avis Rent A Car, Inc. .................................... 5,000 127,813
*Dollar Thrifty Automotive Group, Inc. ................... 2,200 52,663
*Rent Way, Inc. .......................................... 3,100 57,931
Rollins Truck Leasing..................................... 2,850 34,022
-----------
272,429
-----------
Machinery & Heavy Equipment -- 1.2%
Manitowoc Co., Inc. ...................................... 1,400 47,600
Oshkosh Truck Corp. ...................................... 1,300 38,106
*Terex Corp. ............................................. 1,900 52,725
-----------
138,431
-----------
</TABLE>
79
<PAGE> 81
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Small Cap Value Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Machinery & Instrumentation -- 0.6%
Regal-Beloit Corp. ....................................... 3,200 $ 66,000
-----------
Manufacturing -- 6.6%
Belden, Inc. ............................................. 6,700 140,700
*Clarcor, Inc. ........................................... 2,300 41,400
*Griffon Corp. ........................................... 12,600 98,437
Hon Industries, Inc. ..................................... 5,300 116,269
Monaco Coach Corp. ....................................... 3,225 82,439
*Moog, Inc. Class A....................................... 700 18,900
*Northwest Pipe Co. ...................................... 4,000 56,000
Quanex Corp. ............................................. 4,050 103,275
Smith (A.O.) Corp. ....................................... 1,200 26,250
Standex International Corp. .............................. 2,600 54,437
Velcro Industries N.V. ................................... 1,010 12,183
-----------
750,290
-----------
Manufacturing Equipment -- 0.3%
*Lawson Products, Inc. ................................... 1,400 32,375
-----------
Medical Equipment & Supplies -- 1.3%
*Haemonetics Corp. ....................................... 4,400 104,775
Varian Medical Systems, Inc. ............................. 1,700 50,681
-----------
155,456
-----------
Medical Instruments -- 0.7%
Dentsply International, Inc. ............................. 3,300 77,963
-----------
Medical & Medical Services -- 1.9%
*Bard (C.R.), Inc. ....................................... 800 42,400
*CONMED Corp. ............................................ 1,600 41,400
*Dura Pharmaceuticals, Inc. .............................. 5,000 69,688
*Medco Research, Inc. .................................... 1,000 30,063
*Polymedica Corp. ........................................ 1,600 37,000
-----------
220,551
-----------
Metals - Iron & Steel -- 0.6%
AK Steel Holding Corp. ................................... 1,000 18,875
*Ryerson Tull, Inc. ...................................... 2,400 46,650
-----------
65,525
-----------
Office Equipment & Supplies -- 0.5%
*United Stationers, Inc. ................................. 1,850 52,841
-----------
</TABLE>
80
<PAGE> 82
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Small Cap Value Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Oil -- 2.1%
Noble Affiliates, Inc. ................................... 3,400 $ 72,888
*Ocean Energy, Inc. ...................................... 5,100 39,525
*Santa Fe Snyder Corp. ................................... 15,700 125,600
-----------
238,013
-----------
Oil & Gas -- 1.3%
*Louis Dreyfus Natural Gas Co. ........................... 3,000 54,375
Pennzoil-Quaker State Co. ................................ 2,600 26,488
*Tesoro Petroleum Corp. .................................. 5,400 62,438
-----------
143,301
-----------
Oil Equipment & Services -- 0.4%
SEACOR SMIT, Inc. ........................................ 600 31,050
-----------
Paper & Forest Products -- 0.9%
Boise Cascade Corp. ...................................... 2,500 101,250
-----------
Printing & Publishing -- 1.6%
*Banta Corp. ............................................. 3,600 81,225
*Mail-Well, Inc. ......................................... 7,000 94,500
-----------
175,725
-----------
Real Estate -- 6.1%
Amli Residential.......................................... 1,700 34,319
Annaly Mortgage Management, Inc. ......................... 1,800 15,750
Bradley Real Estate, Inc. ................................ 1,200 20,925
Brandywine Realty Trust................................... 4,260 69,758
Chelsea GCA Realty, Inc. ................................. 1,370 40,758
Eastgroup Properties...................................... 3,200 59,200
Essex Property Trust, Inc. ............................... 1,600 54,400
Federal Realty Investment Trust........................... 1,400 26,338
First Industrial Realty Trust, Inc. ...................... 1,100 30,181
Great Lakes REIT, Inc. ................................... 2,800 40,250
Liberty Property Trust.................................... 3,000 72,750
Mack-Cali Realty Corp. ................................... 1,500 39,094
Mills Corp. .............................................. 1,500 26,813
Parkway Properties, Inc. ................................. 1,500 43,219
Prentiss Properties Trust................................. 4,600 96,600
Storage USA, Inc. ........................................ 1,000 30,250
-----------
700,605
-----------
</TABLE>
81
<PAGE> 83
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Small Cap Value Portfolio
Statement of Net Assets, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Restaurants -- 0.7%
O'Charleys, Inc. ......................................... 1,280 $ 16,800
*RARE Hospitality International, Inc. .................... 2,700 58,430
-----------
75,230
-----------
Retail - Clothing and Apparel -- 0.7%
Cato Corp. Class A........................................ 6,700 84,588
-----------
Retail Merchandising -- 4.5%
Haverty Furniture Companies, Inc. ........................ 2,700 34,088
Regis Corp. .............................................. 4,200 79,275
*Rex Stores Corp. ........................................ 2,500 87,500
*ShopKo Stores, Inc. ..................................... 4,100 94,300
*Zale Corp. .............................................. 4,300 208,013
-----------
503,176
-----------
Semiconductors -- 2.4%
Dallas Semiconductor Corp. ............................... 1,300 83,769
*Exar Corp. .............................................. 1,100 64,763
*Integrated Device Technology, Inc. ...................... 3,400 98,600
Pioneer-Standard Electronics, Inc. ....................... 1,800 25,988
-----------
273,120
-----------
Software -- 3.2%
*Best Software, Inc. ..................................... 3,400 100,300
*Midway Games, Inc. ...................................... 2,800 67,025
*Progress Software Corp. ................................. 1,400 79,450
*Symantec Corp. .......................................... 1,900 111,387
-----------
358,162
-----------
Transportation -- 2.5%
*American Freightways Corp. .............................. 400 6,475
*Arkansas Best Corp. ..................................... 3,900 46,800
Arnold Industries, Inc. .................................. 8,300 116,719
Roadway Express, Inc. .................................... 1,800 38,925
Stolt-Nielsen............................................. 2,600 37,050
USFreightways Corp. ...................................... 1,000 47,875
-----------
293,844
-----------
Utilities -- 1.4%
CH Energy Group, Inc. .................................... 1,200 39,600
Cleco Corp. .............................................. 2,300 73,744
United Illuminating Co. .................................. 800 41,100
-----------
154,444
-----------
</TABLE>
82
<PAGE> 84
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The All Pro Small Cap Value Portfolio
Statement of Net Assets, December 31, 1999 -- Concluded
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION AND PERCENTAGE OF PORTFOLIO SHARES VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
Waste Management -- 0.6%
Safety-Kleen Corp......................................... 4,675 $ 52,886
-----------
TOTAL COMMON STOCK (COST $10,276,986)................... 10,478,663
-----------
SHORT TERM INVESTMENTS -- 8.1%
Temporary Investment Fund, Inc. -- TempCash............... 920,392 920,392
-----------
TOTAL SHORT TERM INVESTMENTS (COST $920,392)............ 920,392
-----------
TOTAL INVESTMENTS -- 100.8% (COST $11,197,378).......... 11,399,055
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.8)%............. (98,749)
-----------
NET ASSETS -- 100.0%
(Equivalent to $7.57 per share based on 1,492,104 shares
of capital stock outstanding)........................... $11,300,306
===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
($11,300,306/1,492,104 shares outstanding)................ $ 7.57
===========
</TABLE>
*Non-Income Producing.
See accompanying notes to financial statements.
83
<PAGE> 85
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Statement of Operations for the Year Ended December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY
GROWTH MARKET BOND
PORTFOLIO PORTFOLIO PORTFOLIO
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends................................................. $ 5,051,008 $ -- $ --
Interest.................................................. 716,096 5,447,990 2,432,364
Less: foreign taxes withheld............................ (13,960) -- --
------------ ---------- -----------
Total Investment Income................................. 5,753,144 5,447,990 2,432,364
------------ ---------- -----------
EXPENSES:
Investment advisory fee................................... 1,003,377 261,012 126,876
Administration fee........................................ 236,297 79,064 27,385
Directors' fee............................................ 25,266 7,953 2,803
Transfer agent fee........................................ 8,560 4,022 2,463
Custodian fee............................................. 34,295 13,018 6,203
Legal fees................................................ 66,322 20,534 7,533
Audit fees................................................ 38,475 11,253 3,913
Printing.................................................. 83,213 21,599 7,514
Insurance................................................. 9,660 2,718 1,054
Miscellaneous............................................. 5,267 1,557 1,214
------------ ---------- -----------
1,510,732 422,730 186,958
Less: expenses waived by Administrator and/or reimbursed
by affiliated insurance company......................... -- -- --
------------ ---------- -----------
Total expenses.......................................... 1,510,732 422,730 186,958
------------ ---------- -----------
Net investment income (loss)............................ 4,242,412 5,025,260 2,245,406
------------ ---------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
Net realized gain (loss) from:
Investments............................................. 18,946,927 (8) (916,673)
Foreign Currency related transactions................... -- -- --
------------ ---------- -----------
18,946,927 (8) (916,673)
------------ ---------- -----------
Net change in unrealized appreciation (depreciation) from:
Investments............................................. (13,385,176) -- (2,503,249)
Foreign currency related transactions................... -- -- --
------------ ---------- -----------
(13,385,176) -- (2,503,249)
------------ ---------- -----------
Net gain (loss) on investments and foreign currency
transactions.......................................... 5,561,751 (8) (3,419,922)
------------ ---------- -----------
Net increase (decrease) in net assets resulting from
operations............................................ $ 9,804,163 $5,025,252 $(1,174,516)
============ ========== ===========
</TABLE>
See accompanying notes to financial statements.
84
<PAGE> 86
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Statement of Operations for the Year Ended December 31, 1999 -- (Concluded)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE SENTINEL ALL PRO ALL PRO ALL PRO ALL PRO
MANAGED GROWTH INTERNATIONAL GROWTH LARGE CAP LARGE CAP SMALL CAP SMALL CAP
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO GROWTH VALUE GROWTH VALUE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 703,795 $ 421,805 $ 1,830,290 $ 81,385 $ 154,426 $ 366,112 $ 16,839 $ 117,780
2,075,832 218,321 69,258 34,289 44,223 46,676 93,332 34,157
(1,708) -- (128,268) -- -- (340) -- --
----------- ---------- ----------- ---------- ---------- --------- ----------- -----------
2,777,919 640,126 1,771,280 115,674 198,649 412,448 110,171 151,937
----------- ---------- ----------- ---------- ---------- --------- ----------- -----------
296,660 225,914 568,324 74,269 174,315 145,234 180,903 85,907
54,798 41,725 74,538 11,300 19,074 15,686 15,662 7,219
5,767 3,595 5,989 1,092 1,539 1,274 1,281 592
3,274 2,886 3,368 1,993 2,246 2,126 2,155 1,870
10,034 9,434 46,974 4,871 9,881 13,387 12,809 13,692
15,086 11,704 15,818 3,136 4,202 3,353 3,699 1,577
8,608 5,146 9,275 1,607 2,577 2,199 1,953 1,002
15,050 11,449 15,673 5,364 5,103 4,274 4,095 1,968
2,065 1,792 2,253 378 688 697 311 301
1,437 976 2,120 825 1,226 1,210 1,210 1,169
----------- ---------- ----------- ---------- ---------- --------- ----------- -----------
412,779 314,621 744,332 104,835 220,851 189,440 224,078 115,297
-- -- -- -- -- -- -- (564)
----------- ---------- ----------- ---------- ---------- --------- ----------- -----------
412,779 314,621 744,332 104,835 220,851 189,440 224,078 114,733
----------- ---------- ----------- ---------- ---------- --------- ----------- -----------
2,365,140 325,505 1,026,948 10,839 (22,202) 223,008 (113,907) 37,204
----------- ---------- ----------- ---------- ---------- --------- ----------- -----------
3,592,195 5,142,814 10,153,870 1,716,433 1,617,492 349,009 2,250,696 (1,022,439)
-- -- (25,013) -- -- -- -- --
----------- ---------- ----------- ---------- ---------- --------- ----------- -----------
3,592,195 5,142,814 10,128,857 1,716,433 1,617,492 349,009 2,250,696 (1,022,439)
----------- ---------- ----------- ---------- ---------- --------- ----------- -----------
(5,655,271) 3,132,350 8,880,224 3,864,968 4,532,937 (614,959) 15,609,185 316,627
-- -- (10,680) -- -- -- -- --
----------- ---------- ----------- ---------- ---------- --------- ----------- -----------
(5,655,271) 3,132,350 8,869,544 3,864,968 4,532,937 (614,959) 15,609,185 316,627
----------- ---------- ----------- ---------- ---------- --------- ----------- -----------
(2,063,076) 8,275,164 18,998,401 5,581,401 6,150,429 (265,950) 17,859,881 (705,812)
----------- ---------- ----------- ---------- ---------- --------- ----------- -----------
$ 302,064 $8,600,669 $20,025,349 $5,592,240 $6,128,227 $ (42,942) $17,745,974 $ (668,608)
=========== ========== =========== ========== ========== ========= =========== ===========
</TABLE>
85
<PAGE> 87
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1999
MONEY AGGRESSIVE
GROWTH MARKET BOND MANAGED GROWTH INTERNATIONAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss)........... $ 4,242,412 $ 5,025,260 $ 2,245,406 $ 2,365,140 $ 325,505 $ 1,026,948
Net realized gain (loss) on investments
and foreign currency related
transactions.......................... 18,946,927 (8) (916,673) 3,592,195 5,142,814 10,128,857
Net change in unrealized appreciation
(depreciation) on investments and
foreign currency translations......... (13,385,176) -- (2,503,249) (5,655,271) 3,132,350 8,869,544
------------ ------------ ----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations............. 9,804,163 5,025,252 (1,174,516) 302,064 8,600,669 20,025,349
Distributions:
From net investment income............. (1,058,688) (5,025,260) (506,981) (499,598) (293,724) (813,330)
From net realized gains................ (6,184,504) -- (398,338) (3,406,936) (7,283,996) (4,172,939)
Capital share transactions:
Net contributions from affiliated life
insurance companies................... (15,597,856) 25,434,525 3,416,178 9,784,991 4,994,083 2,393,275
------------ ------------ ----------- ----------- ----------- -----------
Total increase in net assets.......... (13,036,885) 25,434,517 1,336,343 6,180,521 6,017,032 17,432,355
NET ASSETS
Beginning of period...................... 315,298,521 91,452,921 36,845,922 67,805,311 56,495,315 71,363,209
------------ ------------ ----------- ----------- ----------- -----------
End of Period............................ $302,261,636 $116,887,438 $38,182,265 $73,985,832 $62,512,347 $88,795,564
============ ============ =========== =========== =========== ===========
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1998
MONEY AGGRESSIVE
GROWTH MARKET BOND MANAGED GROWTH INTERNATIONAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss)............ $ 4,452,995 $ 4,067,363 $ 1,728,246 $ 1,980,933 $ 293,724 $ 1,035,342
Net realized gain (loss) on investments
and foreign currency related
transactions........................... 6,148,289 -- 398,338 3,402,294 7,283,996 4,178,860
Net change in unrealized appreciation
(depreciation) on investments and
foreign currency translations.......... 26,998,570 -- 132,450 1,925,076 (3,566,325) 1,085,410
------------ ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations.............. 37,599,854 4,067,363 2,259,034 7,308,303 4,011,395 6,299,612
Distributions:
From net investment income.............. (4,464,024) (4,067,363) (1,551,787) (1,940,488) (391,790) (478,318)
From net realized gains................. (35,634,593) -- (3,599) (2,699,617) (3,740,193) (4,341,196)
Capital share transactions:
Net contributions from affiliated life
insurance companies.................... 50,407,953 27,114,010 12,791,904 9,069,604 8,041,798 7,369,655
------------ ----------- ----------- ----------- ----------- -----------
Total increase in net assets........... 47,909,190 27,114,010 13,495,552 11,737,802 7,921,210 8,849,753
NET ASSETS
Beginning of period....................... 267,389,331 64,338,911 23,350,370 56,067,509 48,574,105 62,513,456
------------ ----------- ----------- ----------- ----------- -----------
End of Period............................. $315,298,521 $91,452,921 $36,845,922 $67,805,311 $56,495,315 $71,363,209
============ =========== =========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
86
<PAGE> 88
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Statements of Changes in Net Assets -- (Concluded)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1999
SENTINEL ALL PRO ALL PRO ALL PRO ALL PRO
GROWTH LARGE CAP LARGE CAP SMALL CAP SMALL CAP
PORTFOLIO GROWTH VALUE GROWTH VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss)............................. $ 10,839 $ (22,202) $ 223,008 $ (113,907) $ 37,204
Net realized gain (loss) on investments and foreign
currency related transactions........................... 1,716,433 1,617,492 349,009 2,250,696 (1,022,439)
Net change in unrealized appreciation (depreciation) on
investments and foreign currency translations........... 3,864,968 4,532,937 (614,959) 15,609,185 316,627
----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net assets resulting from
operations.............................................. 5,592,240 6,128,227 (42,942) 17,745,974 (668,608)
Distributions:
From net investment income............................... (23,574) (3,102) (105,080) -- (17,055)
From net realized gains.................................. (537,394) -- -- -- --
Capital share transactions:
Net contributions from affiliated life insurance
companies............................................... 4,099,126 17,529,239 8,850,732 17,769,243 3,912,710
----------- ----------- ----------- ----------- -----------
Total increase in net assets............................ 9,130,398 23,654,364 8,702,710 35,515,217 3,227,047
NET ASSETS
Beginning of period........................................ 12,166,979 14,306,655 15,615,901 9,685,265 8,073,259
----------- ----------- ----------- ----------- -----------
End of Period.............................................. $21,297,377 $37,961,019 $24,318,611 $45,200,482 $11,300,306
=========== =========== =========== =========== ===========
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEAR OR PERIOD ENDED DECEMBER 31, 1998
SENTINEL ALL PRO ALL PRO ALL PRO ALL PRO
GROWTH LARGE CAP LARGE CAP SMALL CAP SMALL CAP
PORTFOLIO GROWTH* VALUE* GROWTH* VALUE*
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss)............................. $ 23,575 $ 3,102 $ 105,080 $ (5,142) $ 17,080
Net realized gain (loss) on investments and foreign
currency related transactions........................... 537,394 (331,257) (614,547) (783,976) (649,795)
Net change in unrealized appreciation (depreciation) on
investments and foreign currency translations........... 1,001,393 2,717,374 709,996 1,277,778 (114,950)
----------- ----------- ----------- ---------- ----------
Net increase (decrease) in net assets resulting from
operations.............................................. 1,562,362 2,389,219 200,529 488,660 (747,665)
Distributions:
From net investment income............................... (25,069) -- -- -- --
From net realized gains.................................. (1,668,898) -- -- -- --
Capital share transactions:
Net contributions from affiliated life insurance
companies............................................... 3,936,595 11,917,436 15,415,372 9,196,605 8,820,924
----------- ----------- ----------- ---------- ----------
Total increase in net assets............................ 3,804,990 14,306,655 15,615,901 9,685,265 8,073,259
NET ASSETS
Beginning of period........................................ 8,361,989 -- -- -- --
----------- ----------- ----------- ---------- ----------
End of Period.............................................. $12,166,979 $14,306,655 $15,615,901 $9,685,265 $8,073,259
=========== =========== =========== ========== ==========
</TABLE>
*Commencement of operations was May 4, 1998
See accompanying notes to financial statements.
87
<PAGE> 89
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout the periods:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH PORTFOLIO
- ----------------------------------------------------------------------------------------------------------------------
01/01/99 01/01/98 01/01/97 01/01/96 01/01/95
TO TO TO TO TO
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........................ $18.82 $19.46 $18.10 $16.36 $14.00
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income....................................... .27 .27 .35 .46 .47
Net realized and unrealized gain (loss) on investments...... .28 1.97 3.49 2.54 3.41
------- ------- ------- ------- -------
Total from investment operations......................... .55 2.24 3.84 3.00 3.88
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends to shareholders from net investment income........ (.06) (.29) (.38) (.48) (.46)
Dividends to shareholders from net capital gains............ (.37) (2.59) (2.10) (.78) (1.06)
------- ------- ------- ------- -------
Total Distributions...................................... (.43) (2.88) (2.48) (1.26) (1.52)
------- ------- ------- ------- -------
Net asset value, end of period.............................. $18.94 $18.82 $19.46 $18.10 $16.36
======= ======= ======= ======= =======
Total return............................................. 2.98% 13.70% 24.32% 19.58% 30.39%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period $(000)............................ 302,262 315,299 267,389 198,948 161,899
Ratios of expenses to average net assets(1)................. .48% .46% .43% .50% .61%
Ratios of net investment income to average net assets....... 1.35% 1.53% 2.01% 2.80% 3.20%
Portfolio turnover.......................................... 46% 30% 108% 72% 61%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1.) Expense ratios for the Growth Portfolio before reimbursement of expense by
affiliated insurance company for the years ended December 31, 1999, 1998,
1997, 1996 and 1995 were as follows: 0.48%, 0.47%, 0.43%, 0.50% and 0.61%
respectively.
See accompanying notes to financial statements.
88
<PAGE> 90
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Financial Highlights -- Continued
- --------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout the periods:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
- ----------------------------------------------------------------------------------------------------------------------
01/01/99 01/01/98 01/01/97 01/01/96 01/01/95
TO TO TO TO TO
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........................ $1.00 $1.00 $1.00 $1.00 $1.00
------- ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income....................................... .05 .05 .05 .05 .05
------- ------ ------ ------ ------
Total from investment operations......................... .05 .05 .05 .05 .05
------- ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends to shareholders from net investment income........ (.05) (.05) (.05) (.05) (.05)
------- ------ ------ ------ ------
Total Distributions...................................... (.05) (.05) (.05) (.05) (.05)
------- ------ ------ ------ ------
Net asset value, end of period.............................. $1.00 $1.00 $1.00 $1.00 $1.00
======= ====== ====== ====== ======
Total return............................................. 4.91% 5.29% 5.33% 5.15% 5.61%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period $(000)............................ 116,887 91,453 64,339 54,197 34,165
Ratios of expenses to average net assets(1)................. .40% .40% .39% .44% .50%
Ratios of net investment income to average net assets....... 4.81% 5.15% 5.21% 5.03% 5.47%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1.) Expense ratios for the Money Market Portfolio before reimbursement of
expense by affiliated insurance company for the years ended December 31,
1999, 1998, 1997, 1996 and 1995 were as follows: 0.40%, 0.40%, 0.42%, 0.39%
and 0.44% respectively.
See accompanying notes to financial statements.
89
<PAGE> 91
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Financial Highlights -- Continued
- --------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout the periods:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BOND PORTFOLIO
- ----------------------------------------------------------------------------------------------------------------------
01/01/99 01/01/98 01/01/97 01/01/96 01/01/95
TO TO TO TO TO
12/30/99 12/31/98 12/31/97 12/31/96 12/31/95
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........................ $11.22 $10.98 $10.67 $11.00 $9.73
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income....................................... .62 .63 .64 .63 .65
Net realized and unrealized gain (loss) on investments...... (.99) .25 .33 (.34) 1.27
------ ------ ------ ------ ------
Total from investment operations......................... (.37) .88 .97 .29 1.92
------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends to shareholders from net investment income........ (.15) (.64) (.66) (.62) (.65)
Dividends to shareholders from net capital gains............ (.12) (.00) (.00) (.00) (.00)
------ ------ ------ ------ ------
Total Distributions...................................... (.27) (.64) (.66) (.62) (.65)
------ ------ ------ ------ ------
Net asset value, end of period.............................. $10.58 $11.22 $10.98 $10.67 $11.00
====== ====== ====== ====== ======
Total return............................................. (3.31)% 8.22% 9.50% 2.86% 20.45%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period $(000)............................ 38,182 36,846 23,350 17,087 14,402
Ratios of expenses to average net assets(1)................. .52% .53% .57% .56% .60%
Ratios of net investment income to average net assets....... 6.19% 6.03% 6.24% 6.08% 6.36%
Portfolio turnover.......................................... 202% 163% 105% 133% 206%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1.) Expense ratios for the Bond Portfolio before reimbursement of expense by
affiliated insurance company for the years ended December 31, 1999, 1998,
1997, 1996 and 1995 were as follows: 0.52%, 0.51%, 0.55%, 0.57%, 0.56% and
0.60% respectively.
See accompanying financial statements.
90
<PAGE> 92
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Financial Highlights -- Continued
- --------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout the periods:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MANAGED PORTFOLIO
- ----------------------------------------------------------------------------------------------------------------------
01/01/99 01/01/98 01/01/97 01/01/96 01/01/95
TO TO TO TO TO
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........................ $17.68 $17.06 $14.68 $14.19 $11.94
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income....................................... .54 .54 .54 .51 .55
Net realized and unrealized gain (loss) on investments...... (.41) 1.45 2.49 1.07 2.28
------ ------ ------ ------ ------
Total from investment operations......................... .13 1.99 3.03 1.58 2.83
------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends to shareholders from net investment income........ (.13) (.55) (.53) (.51) (.57)
Dividends to shareholders from net capital gains............ (.89) (.82) (.12) (.58) (.01)
------ ------ ------ ------ ------
Total Distributions...................................... (1.02) (1.37) (.65) (1.09) (.58)
------ ------ ------ ------ ------
Net asset value, end of period.............................. $16.79 $17.68 $17.06 $14.68 $14.19
====== ====== ====== ====== ======
Total return............................................. 0.75% 12.54% 21.23% 11.88% 24.43%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period $(000)............................ 73,986 67,805 56,068 43,431 36,002
Ratios of expenses to average net assets(1)................. .57% .57% .58% .60% .66%
Ratios of net investment income to average net assets....... 3.25% 3.22% 3.47% 3.68% 4.22%
Portfolio turnover.......................................... 156% 203% 99% 106% 130%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1.) Expense ratios for the Managed Portfolio before reimbursement of expense by
affiliated insurance company for the years ended December 31, 1999, 1998,
1997, 1996 and 1995 were as follows: 0.57%, 0.58%, 0.58%, 0.60% and 0.66%,
respectively.
See accompanying financial statements.
91
<PAGE> 93
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Financial Highlights -- Continued
- --------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout the periods:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH PORTFOLIO
- ----------------------------------------------------------------------------------------------------------------------
01/01/99 01/01/98 01/01/97 01/01/96 01/01/95
TO TO TO TO TO
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........................ $21.91 $22.19 $18.52 $17.38 $15.45
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income....................................... .11 .11 .17 .17 .20
Net realized and unrealized gain on investments............. 2.89 1.50 3.72 3.03 1.86
------ ------ ------ ------ ------
Total from investment operations......................... 3.00 1.61 3.89 3.20 2.06
------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends to shareholders from net investment income........ (.11) (.18) (.18) (.19) (.00)
Dividends to shareholders from net capital gains............ (2.83) (1.71) (.04) (1.87) (.13)
------ ------ ------ ------ ------
Total Distributions...................................... (2.94) (1.89) (.22) (2.06) (.13)
------ ------ ------ ------ ------
Net asset value, end of period.............................. $21.97 $21.91 $22.19 $18.52 $17.38
====== ====== ====== ====== ======
Total return............................................. 15.96% 7.99% 21.21% 21.00% 13.48%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period $(000)............................ 62,513 56,495 48,574 34,098 23,822
Ratios of expenses to average net assets(1)................. .57% .61% .63% .68% .76%
Ratios of net investment income to average net assets....... .59% .56% .95% 1.14% 1.32%
Portfolio turnover.......................................... .46% 41% 37% 47% 89%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1.) Expense ratios for the Aggressive Growth Portfolio before reimbursement of
expense by affiliated insurance company for the years ended December 31,
1999, 1998, 1997, 1996 and 1995 were as follows: 0.57%, 0.57%, 0.62%,
0.63%, 0.68% and 0.76% respectively.
See accompanying notes to financial statements.
92
<PAGE> 94
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Financial Highlights -- Continued
- --------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout the periods:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL PORTFOLIO
- ----------------------------------------------------------------------------------------------------------------------
01/01/99 01/01/98 01/01/97 01/01/96 01/01/95
TO TO TO TO TO
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........................ $13.85 $13.61 $13.41 $12.86 $11.63
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income....................................... .19 .15 .11 .11 .16
Net realized and unrealized gain (loss) on investments...... 3.61 1.14 1.08 1.23 1.45
------ ------ ------ ------ ------
Total from investment operations......................... 3.80 1.29 1.19 1.34 1.61
------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends to shareholders from net investment income........ (.16) (.10) (.11) (.16) (.07)
Dividends to shareholders from net capital gains............ (.81) (.95) (.88) (.63) (.31)
------ ------ ------ ------ ------
Total Distributions...................................... (.97) (1.05) (.99) (.79) (.38)
------ ------ ------ ------ ------
Net asset value, end of period.............................. $16.68 $13.85 $13.61 $13.41 $12.86
====== ====== ====== ====== ======
Total return............................................. 29.33% 10.13% 9.66% 10.89% 14.31%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period $(000)............................ 88,796 71,363 62,513 50,955 36,642
Ratios of expenses to average net assets(1)................. .98% 1.00% 1.02% 1.05% 1.15%
Ratios of net investment income to average net assets....... 1.32% 1.18% 1.13% 1.08% 1.21%
Portfolio turnover.......................................... 41% 37% 37% 35% 45%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1.) Expense ratios for the International Portfolio before reimbursement of
expense by affiliated insurance company for the years ended December 31,
1999, 1998, 1997, 1996, and 1995 were as follows: .98%, 1.00%, 1.02%, 1.05%
and 1.15%, respectively.
See accompanying notes to financial statements.
93
<PAGE> 95
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Financial Highlights -- Continued
- --------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout the periods:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SENTINEL GROWTH PORTFOLIO
- -----------------------------------------------------------------------------------------------------------
01/01/99 01/01/98 01/01/97 03/18/96(2)
TO TO TO TO
12/31/99 12/31/98 12/31/97 12/31/96
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period........................ $13.43 $14.59 $11.14 $10.00
------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income....................................... .01 .03 .04 .05
Net realized and unrealized gain (loss) on investments...... 4.97 1.76 3.47 1.09
------ ------ ------ ------
Total from investment operations......................... 4.98 1.79 3.51 1.14
------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends to shareholders from net investment income........ (.03) (.04) (.05) (.00)
Dividends to shareholders from net capital gains............ (.59) (2.91) (.01) (.00)
------ ------ ------ ------
Total Distributions...................................... (.62) (2.95) (.06) (.00)
------ ------ ------ ------
Net asset value, end of period.............................. $17.79 $13.43 $14.59 $11.14
====== ====== ====== ======
Total return............................................. 38.80% 15.98% 31.58% 11.40%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period $(000)............................ 21,297 12,167 8,362 5,664
Ratios of expenses to average net assets (annualized)(1).... .71% .82% .90% .90%
Ratios of net investment income to average net assets
(annualized)............................................... .07% .23% .36% .57%
Portfolio turnover.......................................... 110% 87% 155% 75%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(1.) Expense ratios for the Sentinel Growth Portfolio before reimbursement of
expense by affiliated insurance company for the years ended December 31,
1999, 1998 and 1997 and the period ended December 31, 1996 were as follows:
0.71%, 0.83%, 1.35% and 1.51% (annualized), respectively.
(2.) Commencement of operations.
(3.) Total returns for periods less than one year are not annualized.
See accompanying notes to financial statements.
94
<PAGE> 96
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Financial Highlights -- Continued
- --------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout the periods:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ALL PRO ALL PRO
LARGE CAP LARGE CAP
GROWTH VALUE
PORTFOLIO PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------
01/01/99 05/04/98(2) 01/01/99 05/04/98(2)
TO TO TO TO
12/31/99 12/31/98 12/31/99 12/31/98
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period........................ $11.77 $10.00 $9.90 $10.00
------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................ (.01) .00 .09 .07
Net realized and unrealized gain (loss) on investments...... 3.01 1.77 .06 (.17)
------ ------ ------ ------
Total from investment operations......................... 3.00 1.77 .15 (.10)
------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends to shareholders from net investment income........ (.00) (.00) (.07) (.00)
Dividends to shareholders from net capital gains............ (.00) (.00) (.00) (.00)
------ ------ ------ ------
Total Distributions...................................... (.00) (.00) (.07) (.00)
------ ------ ------ ------
Net asset value, end of period.............................. $14.77 $11.77 $9.98 $9.90
====== ====== ====== ======
Total return............................................. 25.52% 17.70%(3) 1.49% (1.00)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period $(000)............................ 37,961 14,307 24,319 15,616
Ratios of expenses to average net assets (annualized)(1).... .89% .90% .91% .95%
Ratios of net investment income to average net assets
(annualized)............................................... (.09)% .04% 1.07% 1.31%
Portfolio turnover.......................................... 83% 64% 64% 39%
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1.) Expense ratios for the All Pro Large Cap Growth Portfolio before
reimbursement of expense by affiliated insurance company for the year ended
December 31, 1999 and the period ended December 31, 1998 were as follows:
0.89% and 0.92% (annualized), respectively. Expense ratios for the All Pro
Large Cap Value Portfolio before reimbursement of expense by affiliated
insurance company for the year ended December 31, 1999 and the period ended
December 31, 1998 were as follows: 0.91% and 0.97% (annualized),
respectively.
(2.) Commencement of operations.
(3.) Total returns for periods less than one year are not annualized.
See accompanying notes to financial statements.
95
<PAGE> 97
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Financial Highlights -- Concluded
- --------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout the periods:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ALL PRO ALL PRO
SMALL CAP SMALL CAP
GROWTH VALUE
PORTFOLIO PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------
01/01/99 05/04/98(2) 01/01/99 05/04/98(2)
TO TO TO TO
12/31/99 12/31/98 12/31/99 12/31/98
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period........................ $9.80 $10.00 $8.25 $10.00
------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................ (.04) (.01) .02 .02
Net realized and unrealized gain (loss) on investments...... 9.07 (.19) (.68) (1.77)
------ ------ ------ ------
Total from investment operations......................... 9.03 (.20) (.66) (1.75)
------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends to shareholders from net investment income........ (.00) (.00) (.02) (.00)
Dividends to shareholders from net capital gains............ (.00) (.00) (.00) (.00)
------ ------ ------ ------
Total Distributions...................................... (.00) (.00) (.02) (.00)
------ ------ ------ ------
Net asset value, end of period.............................. $18.83 $9.80 $7.57 $8.25
====== ====== ====== ======
Total return............................................. 92.14% (2.00)%(3) (8.05)% (17.50)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period $(000)............................ 45,200 9,685 11,300 8,073
Ratios of expenses to average net assets (annualized)(1).... 1.11% 1.24% 1.20% 1.28%
Ratios of net investment income to average net assets
(annualized)............................................... (.57)% (.14)% .39% .48%
Portfolio turnover.......................................... 114% 82% 114% 38%
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1.) Expense ratios for the All Pro Small Cap Growth Portfolio before
reimbursement of expense by affiliated insurance company for the year ended
December 31, 1999 and the period ended December 31, 1998 were as follows:
1.11% and 1.25% (annualized), respectively. Expense ratios for the All Pro
Small Cap Value Portfolio before reimbursement of expense by affiliated
insurance company for the year ended December 31, 1999 and the period ended
December 31, 1998 were as follows: 1.21% and 1.36% (annualized),
respectively.
(2.) Commencement of operations.
(3.) Total returns for periods less than one year are not annualized.
See accompanying notes to financial statements.
96
<PAGE> 98
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Notes to Financial Statements, December 31, 1999
- --------------------------------------------------------------------------------
1. ORGANIZATION
The Market Street Fund, Inc. (Fund) is registered as an open-end diversified
management company under the Investment Company Act of 1940, as amended. As a
"series" type of mutual fund, the Fund issues separate classes (or series) of
stock currently consisting of the Growth Portfolio, Money Market Portfolio, Bond
Portfolio, Managed Portfolio, Aggressive Growth Portfolio, International
Portfolio, Sentinel Growth Portfolio, All Pro Large Cap Growth Portfolio, All
Pro Large Cap Value Portfolio, All Pro Small Cap Growth Portfolio, and All Pro
Small Cap Value Portfolio. The Fund serves as an investment medium for modified
premium and flexible premium adjustable variable life insurance policies and
individual flexible premium deferred variable annuity contracts (Policies)
issued by Provident Mutual Life Insurance Company (PMLIC) and for flexible
premium deferred variable annuity contracts issued by Providentmutual Life and
Annuity Company of America (PLACA) and policies issued by National Life
Insurance Company of Vermont (NLICV). The Fund also serves as the investment
medium for single premium and scheduled premium variable life insurance policies
which are no longer being issued.
2. ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by each
Fund in preparation of its financial statements. The preparation of financial
statements in accordance with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from
those estimates.
Valuation of Investments
Bonds are carried at market value based on the last bid price on a national
securities exchange or on quoted prices from a third-party pricing service.
Investments in common and preferred stocks primarily traded on recognized U.S.
or foreign securities exchanges are valued at the close of regular trading on
the New York Stock Exchange, currently 4:00 p.m. New York time on the last
business day of the period, or, if there was no sale, at the last bid price on
that day. Short-term investments with maturities of less than 90 days and Money
Market Portfolio investments are valued at amortized cost which approximates
market value.
Investments
Security transactions are accounted for on the trade date. The cost of
investment securities sold is determined by use of the specific identification
method for both financial reporting and income tax purposes. Interest income is
recorded on the accrual basis; dividend income is recorded on the ex-dividend
date.
Dollar Rolls
The Bond and Managed Portfolios may enter into dollar rolls in which the
Portfolio sells securities for delivery and simultaneously contracts to
repurchase the same security at a fixed price on a specified future date. During
the roll period the Portfolio forgoes accrued interest paid on the securities.
The Portfolio will be compensated by the interest earned on the cash proceeds of
the initial sale (which are invested in short-term investments) and by the lower
repurchase price at the future date (the "drop"). The drop, which is recorded as
deferred income, is amortized over the period between the trade date and the
settlement date. All realized gains are recorded at the
97
<PAGE> 99
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Notes to Financial Statements, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
beginning of each roll. A portfolio engages in dollar rolls for the purpose of
enhancing its yield. Dollar Rolls involve a risk of loss if the value of the
security to be repurchased declines prior to settlement date, which risk is in
addition to the risk of decline in the value of a Portfolio's other assets. The
balance of dollar rolls outstanding during the period ended December 31, 1999
was $2,466,633 in the Bond Portfolio and $6,207,211 in the Managed Portfolio.
Foreign Currency Translations
Foreign currency amounts are translated into U.S. Dollars on the following
bases:
(i) Market value of investment securities, assets and liabilities, at the
daily rate of exchange;
(ii) Purchases and sales of investment securities, at the rate of exchange
prevailing on the respective dates of such transactions. Exchange gains or
losses are recognized upon settlement;
(iii) Income and expenses, at the rate of exchange prevailing on the
respective dates of such transactions. Exchange gains or losses are
recognized upon ultimate receipt or disbursement.
Foreign security and currency transactions may involve certain considerations
and risks not typically associated with those of U.S. dollar denominated
transactions as a result of, among other factors, the lack of governmental
supervision and regulation of foreign securities markets and the possibility of
political or economic instability.
The Fund does not isolate that portion of the results of operations derived from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are included
with the net realized and unrealized gain or loss from investments.
Dividends to Shareholders
Dividends of investment income of the Money Market Portfolio are declared daily
and paid monthly. The Growth Portfolio, Bond Portfolio, Managed Portfolio,
Aggressive Growth Portfolio, International Portfolio, Sentinel Growth Portfolio,
All Pro Large Cap Growth Portfolio, All Pro Large Cap Value Portfolio, All Pro
Small Cap Growth Portfolio, and All Pro Small Cap Value Portfolio declare and
pay dividends of investment income annually. For all Portfolios, distributions
of capital gains are declared and paid annually.
Federal Income Taxes
No provision is made for Federal taxes as it is the Fund's intention to have
each Portfolio continue to qualify as a regulated investment company and to make
the requisite distributions to its shareholders which will be sufficient to
relieve it from Federal income taxes.
3. INVESTMENT ADVISORY FEES AND RELATED PARTY TRANSACTIONS
Investment advisory agreements have been approved, whereby Sentinel Advisors
Company (SAC), a Vermont General Partnership, is adviser for the Growth, Money
Market, Bond, Managed, Aggressive Growth and Sentinel Growth Portfolios. With
respect to the Growth Portfolio, SAC is compensated monthly at an effective
annual rate of 0.50% of the first $20 million of the average daily net assets of
the portfolio, 0.40% of the next $20 million and 0.30% of net assets in excess
of $40 million. SAC is compensated monthly at an effective annual rate of 0.25%
of the average daily
98
<PAGE> 100
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Notes to Financial Statements, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
net assets of the Money Market Portfolio. With respect to the Bond Portfolio,
SAC is compensated monthly at the effective annual rate of 0.35% of the first
$100 million of the average daily net assets of the portfolio and 0.30% of net
assets in excess of $100 million. With respect to the Managed Portfolio, SAC is
compensated monthly at the effective annual rate of 0.40% of the first $100
million of the average daily net assets of the portfolio and 0.35% of net assets
in excess of $100 million. With respect to the Aggressive Growth Portfolio, SAC
is compensated monthly at the effective annual rate of 0.50% of the first $20
million of the average daily net assets of the portfolio, 0.40% of the next $20
million and 0.30% of net assets in excess of $40 million. With respect to the
Sentinel Growth Portfolio, SAC is compensated monthly at an effective annual
rate of 0.50% of the first $20 million of the average daily net assets of the
portfolio, 0.40% of the next $20 million and 0.30% of the net assets in excess
of $40 million. Provident Mutual Investment Management Co. (PIMC) is the adviser
for the International, All Pro Large Cap Growth, All Pro Large Cap Value, All
Pro Small Cap Growth, and All Pro Small Cap Value Portfolios. With respect to
the All Pro Large Cap Growth Portfolio and the All Pro Large Cap Value
Portfolio, PIMC is compensated monthly at an effective annual rate of 0.70% of
the average daily net assets. With respect to the All Pro Small Cap Growth
Portfolio and the All Pro Small Cap Value Portfolio, PIMC is compensated monthly
at an effective annual rate of 0.90% of the average daily net assets. With
respect to the International Portfolio, PIMC is compensated monthly at an
effective annual rate of 0.75% of the first $500 million of the average daily
net assets of the portfolio and 0.60% of assets in excess of $500 million.
PMLIC agrees to reimburse the Growth, Money Market, Bond, Managed, Aggressive
Growth, All Pro Large Cap Growth, All Pro Large Cap Value, All Pro Small Cap
Growth, and All Pro Small Cap Value Portfolios for operating expenses, excluding
investment advisory fees, and costs of litigation and indemnification not
covered by insurance, in excess of an annual rate of 0.40% of the average daily
net asset values. The International Portfolio is reimbursed for such expenses in
excess of an annual rate of 0.75% of the average daily net asset value. NLICV
agrees to reimburse Sentinel Growth Portfolio for operating expenses, excluding
investment advisory fees and costs of litigation and indemnification not covered
by insurance, in excess of an annual rate of .40% of the average net asset
values.
99
<PAGE> 101
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Notes to Financial Statements, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
4. NET ASSETS
At December 31, 1999, the Portfolios' net assets consisted of:
<TABLE>
<CAPTION>
MONEY
GROWTH MARKET BOND MANAGED
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net contribution from shareholders.......................... $299,605,298 $116,887,504 $38,590,948 $59,837,780
Undistributed net investment income......................... 4,242,412 -- 2,245,406 2,365,140
Undistributed net realized gain............................. 18,946,927 -- -- 3,592,195
Accumulated loss on investment transactions................. -- (66) (916,673) --
Net unrealized appreciation (depreciation) on investments
and foreign currency....................................... 49,466,999 -- (1,737,416) 8,190,717
------------ ------------ ----------- -----------
$302,261,636 $116,887,438 $38,182,265 $73,985,832
============ ============ =========== ===========
</TABLE>
<TABLE>
<CAPTION>
AGGRESSIVE SENTINEL
GROWTH INTERNATIONAL GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net contribution from shareholders.......................... $47,502,186 $63,852,808 $14,020,708
Undistributed net investment income......................... 325,505 1,001,935 10,839
Undistributed net realized gain............................. 5,142,814 10,082,880 1,716,433
Accumulated loss on investment transactions................. -- -- --
Net unrealized appreciation (depreciation) on investments
and foreign currency....................................... 9,541,842 13,857,942 5,549,397
----------- ----------- -----------
$62,512,347 $88,795,565 $21,297,377
=========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
ALL PRO ALL PRO ALL PRO ALL PRO
LARGE CAP LARGE CAP SMALL CAP SMALL CAP
GROWTH VALUE GROWTH VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net contribution from shareholders.......................... $29,424,473 $24,266,104 $26,846,798 $12,733,634
Undistributed net investment Income (loss).................. -- 223,008 -- 37,204
Undistributed net realized gain............................. 1,286,235 -- 1,466,720 --
Accumulated loss on investment transactions................. -- (265,538) -- (1,672,209)
Net unrealized appreciation (depreciation) on investments
and foreign currency....................................... 7,250,311 95,037 16,886,964 201,677
----------- ----------- ----------- -----------
$37,961,019 $24,318,611 $45,200,482 $11,300,306
=========== =========== =========== ===========
</TABLE>
100
<PAGE> 102
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Notes to Financial Statements, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
5. PURCHASES AND SALES OF INVESTMENTS (EXCLUDING SHORT-TERM SECURITIES)
Purchases and proceeds on sales of investments for the portfolios, for the
period ended December 31, 1999, were as follows:
<TABLE>
<CAPTION>
MONEY AGGRESSIVE
GROWTH MARKET BOND MANAGED GROWTH INTERNATIONAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PURCHASES
U.S. Gov't Obligations.................... $ -- $ -- $49,329,499 $ 84,109,351 $ -- $ --
Corporate Bonds........................... -- -- 27,501,167 14,596,760 -- --
Common and Preferred Stock................ 136,505,295 -- -- 21,292,779 23,373,119 30,409,286
------------ ----------- ----------- ------------ ----------- -----------
Total Purchases........................... $136,505,295 -- $76,830,666 $119,998,890 $23,373,119 $30,409,286
============ =========== =========== ============ =========== ===========
SALES
U.S. Gov't Obligations.................... $ -- $ -- $47,032,265 $ 77,359,553 $ -- $ --
Corporate Bonds........................... -- -- 22,199,250 9,646,767 -- --
Common and Preferred Stock................ 147,378,141 -- -- 22,301,421 23,787,060 32,582,338
------------ ----------- ----------- ------------ ----------- -----------
Total Sales............................... $147,378,141 -- $69,231,515 $109,307,741 $23,787,060 $32,582,338
============ =========== =========== ============ =========== ===========
</TABLE>
<TABLE>
<CAPTION>
ALL PRO ALL PRO ALL PRO ALL PRO
SENTINEL LARGE CAP LARGE CAP SMALL CAP SMALL CAP
GROWTH GROWTH VALUE GROWTH VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PURCHASES
U.S. Gov't Obligations...................................... $ -- $ -- $ -- $ -- $ --
Corporate Bonds............................................. -- -- -- -- --
Common and Preferred Stock.................................. 18,687,142 35,842,297 20,630,400 39,576,345 13,968,264
----------- ----------- ----------- ----------- -----------
Total Purchases............................................. $18,687,142 $35,842,297 $20,630,400 $39,576,345 $13,968,264
=========== =========== =========== =========== ===========
SALES
U.S. Gov't Obligations...................................... $ -- $ -- $ -- $ -- $ --
Corporate Bonds............................................. -- -- -- -- --
Common and Preferred Stock.................................. 15,678,708 19,895,483 12,731,386 21,825,763 10,237,676
----------- ----------- ----------- ----------- -----------
Total Sales................................................. $15,678,708 $19,895,483 $12,731,386 $21,825,763 $10,237,676
=========== =========== =========== =========== ===========
</TABLE>
101
<PAGE> 103
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Notes to Financial Statements, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
6. TAX BASIS OF INVESTMENTS
Investment information based on the cost of the securities for Federal income
tax purposes held at December 31, 1999 is as follows:
<TABLE>
<CAPTION>
MONEY AGGRESSIVE
GROWTH MARKET BOND MANAGED GROWTH INTERNATIONAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aggregate gross unrealized appreciation... $ 63,039,699 $ -- $ 9,850 $10,467,676 $14,975,545 $20,859,383
Aggregate gross unrealized depreciation... (11,401,069) -- (1,747,266) (2,276,960) (5,433,702) (7,075,533)
------------ ------------ ----------- ----------- ----------- -----------
Net unrealized appreciation
(depreciation)........................... $ 51,638,630 $ -- $(1,737,416) $ 8,190,716 $ 9,541,843 $13,783,850
============ ============ =========== =========== =========== ===========
Aggregate cost of securities for federal
income tax purposes...................... $250,666,843 $117,474,552 $41,278,609 $71,378,575 $53,198,972 $72,778,574
============ ============ =========== =========== =========== ===========
Capital loss carryover (available to
offset possible future gains.) The
carryover expires as follows Money Market
Portfolio -- $57 in 2005, $9 in 2007;
Bond Portfolio -- $916,674 in 2007....... $ -- $ 66 $ 916,674 $ -- $ -- $ --
============ ============ =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
ALL PRO ALL PRO ALL PRO ALL PRO
SENTINEL LARGE CAP LARGE CAP SMALL CAP SMALL CAP
GROWTH GROWTH VALUE GROWTH VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Aggregate gross unrealized appreciation...... $ 5,881,600 $ 9,004,635 $ 1,934,244 $17,819,715 $ 962,428
Aggregate gross unrealized depreciation...... (332,203) (1,946,348) (1,889,442) (974,333) (807,751)
----------- ----------- ----------- ----------- -----------
Net unrealized appreciation (depreciation)... $ 5,549,397 $ 7,250,287 $ 44,802 $16,845,382 $ 154,677
=========== =========== =========== =========== ===========
Aggregate cost of securities for federal
income tax purposes......................... $15,725,373 $31,174,894 $23,448,771 $31,070,408 $11,244,378
=========== =========== =========== =========== ===========
Capital loss carryover (available to offset
possible future gains.) The carryover
expires as follows: Large Cap
Value -- $215,505 in 2006; Small Cap
Value -- $630,374 in 2006, $994,835 in
2007........................................ $ -- $ -- $ 215,505 $ -- $ 1,625,209
=========== =========== =========== =========== ===========
</TABLE>
7. AUTHORIZED CAPITAL STOCK AND CAPITAL STOCK TRANSACTIONS
On December 31, 1999, there were 1.2 billion shares of $0.01 par value capital
stock authorized for the Fund. The shares of capital stock are divided into
eleven series: Growth Portfolio, Money Market Portfolio, Bond Portfolio, Managed
Portfolio, Aggressive Growth Portfolio, International Portfolio, Sentinel Growth
Portfolio, Large Cap Growth Portfolio, Large Cap Value Portfolio, Small Cap
Growth Portfolio and Small Cap Value Portfolio. The Growth Portfolio consists of
75 million shares, the Money Market Portfolio consists of 150 million shares;
for the All Pro Large Cap Growth, All Pro Large Cap Value, All Pro Small Cap
Growth and All Pro Small Cap Value Portfolios consist of 50 million shares and
each of the other series consists of 5 million shares.
102
<PAGE> 104
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Notes to Financial Statements, December 31, 1999 -- Continued
- --------------------------------------------------------------------------------
On December 31, 1999, Provident Mutual Life Insurance Company owned 976,130
shares of All Pro Large Cap Value, 244,088 shares of All Pro Small Cap Growth
and 400,853 shares of All Pro Small Cap Value.
Transactions in capital stock for the period ended December 31, 1999 were as
follows:
<TABLE>
<CAPTION>
MONEY MARKET
GROWTH PORTFOLIO PORTFOLIO BOND PORTFOLIO
- -------------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold.............. 1,329,197 $ 25,247,128 212,282,834 $ 212,282,834 1,037,876 $11,071,232
Shares redeemed.......... (2,509,410) (48,088,176) (191,715,270) (191,715,270) (798,215) (8,560,373)
Shares reinvested........ 390,679 7,243,192 4,866,961 4,866,961 83,209 905,319
---------- ------------ ------------ ------------- --------- -----------
Net contributions from
affiliated insurance
companies............... (789,534) $(15,597,856) 25,434,525 $ 25,434,525 322,870 $ 3,416,178
========== ============ ============ ============= ========= ===========
<CAPTION>
MANAGED PORTFOLIO
- ------------------------- ------------------------
SHARES AMOUNT
- ------------------------- ------------------------
<S> <C> <C>
Shares sold.............. 1,048,895 $ 17,883,810
Shares redeemed.......... (709,970) (12,005,353)
Shares reinvested........ 233,644 3,906,534
--------- ------------
Net contributions from
affiliated insurance
companies............... 572,569 $ 9,784,991
========= ============
</TABLE>
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH INTERNATIONAL SENTINEL GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold.......................................... 623,914 $ 12,068,240 656,302 $ 9,459,577 269,528 $3,849,774
Shares redeemed...................................... (760,128) (14,651,877) (864,123) (12,052,571) (21,904) (311,615)
Shares reinvested.................................... 403,285 7,577,720 380,631 4,986,269 43,352 560,968
---------- ------------ -------- ------------ ------- ----------
Net contributions from affiliated insurance
companies........................................... 267,071 $ 4,994,083 172,810 $ 2,393,275 290,976 $4,099,127
========== ============ ======== ============ ======= ==========
</TABLE>
<TABLE>
<CAPTION>
ALL PRO LARGE CAP ALL PRO LARGE CAP ALL PRO SMALL CAP
GROWTH PORTFOLIO VALUE PORTFOLIO GROWTH PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold..................... 2,444,764 $ 31,491,954 1,197,996 $12,240,796 1,770,700 $22,608,975
Shares redeemed................. (1,090,487) (13,965,817) (349,648) (3,495,144) (358,525) (4,839,732)
Shares reinvested............... 258 3,102 10,603 105,080 0 0
---------- ------------ --------- ----------- --------- -----------
Net contributions from
affiliated insurance
companies...................... 1,354,535 $ 17,529,239 858,951 $ 8,850,732 1,412,175 $17,769,243
========== ============ ========= =========== ========= ===========
<CAPTION>
ALL PRO SMALL CAP
VALUE PORTFOLIO
- -------------------------------- -----------------------
SHARES AMOUNT
- -------------------------------- -----------------------
<S> <C> <C>
Shares sold..................... 1,054,394 $ 7,986,704
Shares redeemed................. (543,349) (4,091,049)
Shares reinvested............... 2,087 17,055
--------- -----------
Net contributions from
affiliated insurance
companies...................... 513,132 $ 3,912,710
========= ===========
</TABLE>
Transactions in capital stock for the year ended December 31, 1998 were as
follows:
<TABLE>
<CAPTION>
MONEY MARKET
GROWTH PORTFOLIO PORTFOLIO BOND PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold................ 1,837,947 $ 32,406,592 165,155,447 $ 165,155,447 1,435,423 $15,864,807
Shares redeemed............ (1,249,358) (22,097,256) (142,035,980) (142,035,980) (417,928) (4,628,289)
Shares reinvested.......... 2,418,983 40,098,617 3,994,543 3,994,543 140,681 1,555,386
---------- ------------ ------------ ------------- --------- -----------
Net contributions from
affiliated insurance
companies................. 3,007,572 $ 50,407,953 27,114,010 $ 27,114,010 1,158,176 $12,791,904
========== ============ ============ ============= ========= ===========
<CAPTION>
MANAGED PORTFOLIO
- --------------------------- ----------------------
SHARES AMOUNT
- --------------------------- ----------------------
<S> <C> <C>
Shares sold................ 623,703 $10,481,421
Shares redeemed............ (360,939) (6,051,923)
Shares reinvested.......... 285,692 4,640,106
-------- -----------
Net contributions from
affiliated insurance
companies................. 548,456 $ 9,069,604
======== ===========
</TABLE>
103
<PAGE> 105
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Notes to Financial Statements, December 31, 1999 -- Concluded
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH INTERNATIONAL SENTINEL GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold.............................................. 493,256 $10,260,111 796,247 $10,834,572 240,467 $2,911,418
Shares redeemed.......................................... (309,019) (6,350,296) (615,500) (8,284,431) (56,545) (668,790)
Shares reinvested........................................ 205,061 4,181,983 378,012 4,819,514 148,986 1,693,967
-------- ----------- -------- ----------- ------- ----------
Net contributions from affiliated insurance companies.... 389,298 $ 8,041,798 558,760 $ 7,369,655 332,909 $3,936,595
======== =========== ======== =========== ======= ==========
</TABLE>
<TABLE>
<CAPTION>
ALL PRO LARGE CAP ALL PRO LARGE CAP ALL PRO SMALL CAP ALL PRO SMALL CAP
GROWTH PORTFOLIO VALUE PORTFOLIO GROWTH PORTFOLIO VALUE PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold................ 1,711,101 $17,230,972 1,685,241 $16,459,223 1,153,905 $10,747,921 1,084,795 $9,720,129
Shares redeemed............ (495,712) (5,313,536) (108,503) (1,043,850) (165,750) (1,551,316) (105,824) (899,205)
Shares reinvested.......... 0 0 0 0 0 0 0 0
--------- ----------- --------- ----------- --------- ----------- --------- ----------
Net contributions from
affiliated insurance
companies................. 1,215,389 $11,917,436 1,576,738 $15,415,372 988,155 $ 9,196,605 978,971 $8,820,924
========= =========== ========= =========== ========= =========== ========= ==========
</TABLE>
8. PRINCIPAL UNDERWRITER
1717 Capital Management Company serves, without compensation, as the principal
underwriter for sale of the Fund shares to the Accounts. 1717 Capital Management
Company is an indirect wholly-owned subsidiary of PMLIC.
9. SUBSEQUENT DIVIDEND
On December 29, 1999, the Board of Directors declared the following net
investment income and capital gain dividends to shareholders of record on
December 31, 1999, ex-dividend date January 10, 2000, payable on January 11,
2000 as follows:
<TABLE>
<CAPTION>
TOTAL PER SHARE
------------------------ --------------------
NET NET
INVESTMENT CAPITAL INVESTMENT CAPITAL
PORTFOLIO INCOME GAIN INCOME GAIN
- --------- ---------- ----------- ---------- -------
<S> <C> <C> <C> <C>
Growth............... $4,242,412 $18,946,927 $.2658 $1.1872
Bond................. 2,245,406 -- .6224 --
Managed.............. 2,365,140 3,592,195 .5366 .8151
Aggressive Growth.... 1,768,905 3,699,413 .6217 1.3002
International........ 2,245,981 8,909,824 .4218 1.6735
Sentinel Growth...... 1,235,191 492,082 1.0319 .4111
All Pro Large Cap
Growth.............. 819,069 636,988 .3187 .2479
All Pro Large Cap
Value............... 223,008 -- .0916 --
All Pro Small Cap
Growth.............. 1,190,602 203,793 .4960 .0849
All Pro Small Cap
Value............... 37,204 -- .0249 --
</TABLE>
104
<PAGE> 106
Form 16169 12.99
[provident mutual logo]
[U.S. Postage Logo]
