RNC
MUTUAL FUND
GROUP, INC.
Dear Shareholder:
We are pleased to present the semi-annual report on the operations of
the RNC Money Market Fund for the six month period ended March 31, 1997. Your
Fund has continued to exhibit a strong performance record. We sincerely
appreciate the confidence you have placed in your Fund's management and extend a
special welcome to all new shareholders.
The average dollar-weighted portfolio maturity of your Fund on March
31, 1997 was 42 days. Purchases continue to be high quality, highly liquid
investments which allow adjustment to the portfolio's maturity in the event of a
change in the interest rate forecast. Each issue is monitored to assure that it
meets our demanding standards of creditworthiness.
The Fund's portfolio diversification and maturity range will continue
to be adjusted based upon the interest rate forecast under fluctuating market
conditions.
We assure you of our continuing dedication to achieve superior
investment results, and look forward to continued service to you. If you have
any questions concerning your investment, please feel free to contact us.
Sincerely,
ERIC M. BANHAZL DANIEL J. GENTER
President President
RNC Mutual Fund Group, Inc. RNC Capital Management Co.
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RNC MONEY MARKET FUND
<TABLE>
<CAPTION>
INVESTMENT PORTFOLIO at March 31, 1997 (Unaudited)
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Principle Amount COMMERCIAL PAPER: 69.28% Market Value
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$1,500,000 Allomon Funding Corp., 5.39%, 4/21/97................................... $ 1,495,508
2,000,000 Amcor Ltd., 5.70%, 4/24/97.............................................. 1,992,717
2,000,000 Arco British Ltd., 5.32%, 4/3/97........................................ 1,999,409
2,000,000 CC (USA), 5.34%, 4/4/97................................................. 1,999,110
1,500,000 Coop Track "A", 5.35%, 4/10/97.......................................... 1,497,994
1,500,000 Delaware Funding Corp., 5.45%, 5/13/97.................................. 1,490,462
1,753,000 Holland Limited Securitization, 5.38%, 4/1/97........................... 1,753,000
1,500,000 JHM Funding, 5.35%, 4/11/97............................................. 1,497,771
1,500,000 KZH Holding Co., 5.31%, 4/21/97......................................... 1,495,575
2,000,000 Liberty Mutual, 5.57%, 5/20/97.......................................... 1,984,837
2,000,000 Merrill Lynch, 5.53%, 5/21/97........................................... 1,984,639
2,000,000 Omnibus Funding Series S (A1), 5.48%, 4/17/97........................... 1,995,129
2,000,000 Receivables Capital Corp., 5.61%, 4/29/97............................... 1,991,273
2,000,000 Reliaster Mortgage Company, 5.30%, 4/1/97............................... 2,000,000
2,000,000 Rose Funding Limited, 5.37%, 4/1/97..................................... 2,000,000
2,000,000 Three Rivers Funding, 5.37%, 4/7/97..................................... 1,998,210
2,000,000 Transamerica Financial, 5.62%, 4/21/97.................................. 1,984,701
2,000,000 Triple A-1 Funding Corp., 5.49%, 4/21/97................................ 1,993,900
2,000,000 Woodstreet Funding, 5.36%, 4/14/97...................................... 1,996,129
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35,150,364
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FEDERAL AGENCY SECURITIES: 6.05%
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2,000,000 Student Loan Marketing Association, 5.52%, 2/17/98...................... 2,000,000
1,070,000 Student Loan Marketing Association, 5.57%, 1/21/98...................... 1,070,308
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3,070,308
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CORPORATE BONDS: 19.95%
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1,000,000 Associates Corp. North America, 7.00%, 5/15/97.......................... 1,001,465
815,000 Fleet Financial Group, 7.25%, 10/15/97.................................. 821,878
500,000 General Motors Acceptance Corp., 7.00%, 8/15/97......................... 501,467
1,000,000 General Motors Acceptance Corp. Medium Term Note,
7.45%, 6/2/97........................................................ 1,002,180
1,000,000 Golden West Financial, 10.25%, 5/15/97.................................. 1,005,019
</TABLE>
See accompanying notes to financial statements.
2
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RNC MONEY MARKET FUND
<TABLE>
<CAPTION>
INVESTMENT PORTFOLIO at March 31, 1997 (Unaudited)
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Principle Amount CORPORATE BONDS, continued Market Value
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$1,000,000 International Lease Finance Corp., 7.12%, 1/15/98....................... $ 1,012,542
750,000 NationsBank Corp., 6.625%, 1/15/98...................................... 754,341
1,000,000 Paccar Financial Corp., 7.14%, 3/20/98.................................. 1,009,772
1,000,000 PepsiCo, Inc., 6.875%, 5/15/97.......................................... 1,001,131
1,000,000 PNC Bank N.A., Floating Rate Note, 5.483%, 5/8/97....................... 1,000,000
1,000,000 Sears Roebuck Co., 9.25%, 8/1/97........................................ 1,010,549
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10,120,344
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REPURCHASE AGREEMENT: 4.50%
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2,282,000 Seattle NW Government Repurchase Agreement, 6.60%,
dated 3/31/97, due 4/1/97, collateralized by $2,300,000
United States Treasury Bond, 6.50%, due 5/31/01......................... 2,282,000
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Total investment portfolio: 99.78%...................................... 50,623,016
Other assets less liabilities: 0.22%.................................... 113,784
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Net assets: 100.00%..................................................... $50,736,800
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</TABLE>
See accompanying notes to financial statements.
3
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RNC MONEY MARKET FUND
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES - March 31, 1997 (Unaudited)
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<S> <C>
ASSETS:
Investment portfolio (cost of $50,623,016)............................................. $50,623,016
Cash................................................................................... 135
Interest receivable.................................................................... 254,706
Other assets........................................................................... 67,526
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Total assets............................................................... 50,945,383
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LIABILITIES:
Dividends payable...................................................................... 190,494
Investment advisory fees............................................................... 10,414
Other accrued expenses................................................................. 7,675
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Total liabilities.......................................................... 208,583
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NET ASSETS (equivalent to $1.00 per share based on 50,736,800 shares
of capital stock outstanding........................................................... $50,736,800
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</TABLE>
See accompanying notes to financial statements.
4
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RNC MONEY MARKET FUND
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS - For the Six Months Ended March 31, 1997 (Unaudited)
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INVESTMENT INCOME
Income interest........................................................................ $ 1,028,695
Expenses:
Advisory fees (Note 2)........................................................... 52,351
Administration fees (Note 2)..................................................... 22,440
Professional fees................................................................ 14,419
Registration expense............................................................. 11,967
Fund accounting expense.......................................................... 8,623
Custodian expense................................................................ 7,541
Audit fees....................................................................... 6,980
Directors' fees.................................................................. 4,205
Transfer agent fees.............................................................. 4,174
Insurance expense................................................................ 1,700
Printing & other expenses........................................................ 708
Miscellaneous expenses........................................................... 3,350
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Total expenses............................................................. 138,458
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Net investment income...................................................... 890,237
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Net increase in net assets resulting from operations....................... $ 890,237
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</TABLE>
See accompanying notes to financial statements.
5
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RNC MONEY MARKET FUND
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<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
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Six Months
Ended Year Ended
March 31, 1997# September 30, 1996
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Net increase in net assets resulting from operations................... $ 890,237 $ 1,551,704
Distributions to shareholders from net investment income............... (890,237) (1,551,704)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold........................................ 85,672,846 127,532,902
Proceeds from shares reinvested.................................. 170,912 288,093
Cost of shares redeemed.......................................... (72,850,622) (121,143,373)
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Total increase from capital share transactions............. 12,993,136 6,677,622
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Total increase in net assets............................... 12,993,136 6,677,622
NET ASSETS:
Beginning of the period................................................ 37,743,664 31,066,042
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End of period.......................................................... $50,736,800 $37,743,664
=========== ===========
CHANGE IN SHARES:
Shares sold ........................................................... 85,672,846 127,532,902
Shares reinvested...................................................... 170,912 288,093
Shares redeemed........................................................ (72,850,622) (121,143,373)
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Net increase........................................................... 12,993,136 6,677,622
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#Unaudited.
</TABLE>
See accompanying notes to financial statements.
6
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RNC MONEY MARKET FUND
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<CAPTION>
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period
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Six Months For the Years Ended September 30,
ended ---------------------------------
March 31, 1997# 1996 1995 1994 1993 1992
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Net asset value at beginning
of period......................... $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
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Income from investment operations:
Net investment income............. .024 .047 .051 .032 .026 .038
Less distributions:
From net investment income........ (.024) (.047) (.051) (.032) (.026) (.038)
Net asset value at end of period........ $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
====== ====== ====== ====== ====== ======
Total return............................ 4.80%* 4.70% 5.10% 3.20% 2.65% 3.83%
Ratios/supplemental data:
Net assets, end of period (000's)....... $50,737 $37,744 $31,066 $43,686 $29,527 $46,563
Ratio of expenses to average
net assets........................ 0.70%* 0.90% 0.80% 0.70% 0.70% 0.80%
Ratio of net investment income to
average net assets................ 4.70%* 4.70% 5.00% 3.20% 2.60% 3.90%
#Unaudited.
*Annualized.
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
RNC MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS - March 31, 1997 (Unaudited)
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1. Significant Accounting Policies.
RNC Money Market Fund ("the Fund"), formerly the RNC Liquid Assets
Fund, Inc., is a series of the RNC Mutual Fund Group, Inc., which is registered
under the Investment Company Act of 1940 as a diversified, open-end management
investment company. The following is a summary of significant accounting
policies followed by the Fund. The Fund's investment objective is high current
income consistent with preservation of capital and liquidity.
Portfolio Valuation. Portfolio securities are valued using the
amortized cost method, which approximates market value.
Federal Income Tax. It is the Fund's policy to continue to
comply with the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute
all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to its
shareholders. Therefore, no federal income tax provision is
required.
Distributions to Shareholders. Distributions to shareholders
are declared daily from the total of net investment income and
net realized gains on investments, if any.
Use of Estimates in Financial Statements. In preparing
financial statements in conformity with generally accepted
accounting principles, management makes estimates and
assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements, as well
as the reported amounts of income and expenses during the
reported period. Actual results may differ from these
estimates.
Other. As is customary in the mutual fund industry, securities
transactions are accounted for on the date the securities are
purchased or sold. Realized gains and losses from securities
transactions are reported on an identified cost basis.
Interest income is recognized on the accrual basis.
2. Investment Advisory Fees and Other Transactions with Affiliates.
The investment advisory fee of $52,351 was paid pursuant to an
agreement with RNC Capital Management Co. (RNC). Under the agreement, RNC is
responsible for the management of the Fund's portfolio and also provides
personnel, facilities, equipment and other services necessary to the management
of the Fund. The agreement provides for monthly fees computed at an annual rate
of .41% of the Fund's average daily net assets. For the six months ended March
31, 1997, RNC voluntarily waived a portion of the fee, which amounted to .13% of
the Fund's average daily net assets.
Investment Company Administration Corporation (the "Administrator")
acts as the Fund's Administrator under an Administration Agreement. The
Administrator prepares various federal and state regulatory filings, reports and
returns for the Fund; prepares reports and materials to be supplied to the
trustees; monitors the
8
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RNC MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS, continued
- --------------------------------------------------------------------------------
activities of the Fund's custodian, transfer agent and accountants; coordinates
the preparation and payment of Fund expenses and reviews the Fund's expense
accruals. For its services, the Administrator receives a monthly fee at the
folowing rate:
Under $40 million $40,000
$40 to $100 million 0.10% of average net assets
$100 to $200 million 0.05% of average net assets
over $200 million 0.03% of average net assets
The Fund paid the Administrator $22,440 for the six months ended March
31, 1997.
First Fund Distributors, Inc. (the "Underwriter") acts as the Fund's
principal underwriter in a continuous public offering of the Fund's shares. The
Underwriter is an affiliate of the Administrator.
Certain officers of the Fund are also officers of the Underwriter and
Administrator.
Midvale Securities Corporation (MSC), an affiliate of RNC, waived all
fees, in its capacity as Shareholder Servicing Agent, for shareholder related
servicing undertaken pursuant to a shareholder-approved plan. The maximum amount
of payment to MSC under this plan is 0.25% of the Fund's average daily net
assets.
9
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<S> <C>
RNC MONEY
MARKET FUND
ADVISER SEMI-ANNUAL
RNC Capital Management Co. REPORT
11601 Wilshire Boulevard
25th Floor
Los Angeles, California 90025
CUSTODIAN
Star Bank, N.A.
425 Walnut Street
Cincinnati, Ohio 45202
TRANSFER AGENT
American Data Services, Inc.
24 West Carver Street, 2nd Floor
Huntington, New York 11743
LEGAL COUNSEL
Heller, Ehrman, White & McAuliffe
333 Bush Street
San Francisco, California 94104 RNC
MUTUAL FUND
AUDITORS GROUP, INC.
Tait, Weller & Baker
Two Penn Center Plaza
Philadelphia, PA 19102
March 31, 1997
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