MARINER FUND GROUP
- -------------------------------------------------------------------------------
MONEY MARKET FUNDS
HSBC Asset Management [Logo]
- -------------------------------------------------------------------------------
Tax-Free Money Market Fund
New York Tax-Free Money Market Fund
SEMI-ANNUAL REPORT (UNAUDITED)
June 30, 1995
Managed by:
HSBC ASSET MANAGEMENT AMERICAS INC.
Sponsored and distributed by:
MARINER FUNDS SERVICES
<PAGE>
MARINER FUND GROUP
MONEY MARKET FUNDS
- -------------------------------------------------------------------------------
HSBC Asset Management [Logo]
Tax-Free Money Market Fund
New York Tax-Free Money Market Fund
July 21,1995
Dear Shareholder:
The first half of 1995 witnessed the Federal Reserve's seventh tightening since
February 1994 which saw short term interest rates double from 3% to 6%. However,
the tax-exempt sector reacted more strongly to a supply problem, which saw a
continuing decrease in municipal issuance from prior years.
Another event of note was the downgrade of New York City's long term debt rating
to BBB+ from A- by Standard and Poor's. However, this downgrade didn't effect
New York City's short term rating which remained at SP-1 (S&P) and MIG -1
(Moody's).
As we enter the remainder of the year, the management of the Mariner Funds
expects to continue to deliver the highest level of professional investment
management to our shareholders.
Management appreciates your participation and reaffirms our commitment to
provide safety, performance and service to our shareholders as we enter the
second half of 1995.
Sincerely,
[GRAPHIC OMITTED]
/s/W. Robert Alexander
W. Robert Alexander
PRESIDENT
<PAGE>
BOARD OF TRUSTEES
JOHN P. PFANN* CHAIRMAN OF THE BOARD; Chairman and President,
JPP Equities, Inc.
WOLFE J. FRANKL* Former Director, North America, Berlin Economic
Development Corporation
WILLIAM L. KUFTA Chief Investment Officer, Beacon Trust Company
ROBERT A. ROBINSON* Trustee, Henrietta and B. Frederick H. Bugher
Foundation
*Member of the Audit and Nominating Committees
- -------------------------------------------------------------------------------
Officers
W. ROBERT ALEXANDER PRESIDENT
STEVEN R. HOWARD SECRETARY
MARK A. POUGNET VICE PRESIDENT AND TREASURER
2
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS AS OF JUNE 30, 1995 (UNAUDITED)
TAX-FREE MONEY MARKET FUND
CREDIT
RATING** PRINCIPAL
MDY/S&P AMOUNT VALUE
------------ ---------- ---------
SHORT-TERM MUNICIPAL SECURITIES-96.6%
ARIZONA-1.8%
<C> <S> <C> <C>
VMIG-1/A-1+ Maricopa County, Arizona IDA Samaritan Health Hospital
(MBIA LOC) 4.20%*, 07/03/95 ................................ $300,000 $300,000
--------
DISTRICT OF COLUMBIA-4.3%
VMIG-1/A-1+ District of Columbia GO (National Westminister LOC)
4.40%*, 07/03/95 .......................................... 300,000 300,000
VMIG-1/A-1+ District of Columbia Ref. A-3 (Toronto Dominion Bank LOC)
4.40%*, 07/03/95 ........................................... 400,000 400,000
--------
700,000
--------
FLORIDA-4.8%
VMIG-1/A+ Dade County Florida IDA 4.20%*, 07/03/95 ...................... 100,000 100,000
Aa3/A-1 Pinellas County Florida Hospital Facilities (Chemical Bank LOC)
4.20%*, 07/03/95 ........................................... 200,000 200,000
VMIG-1/A1 Sarasota Florida CP, 3.55%, 08/02/95 .......................... 485,000 485,000
--------
785,000
--------
GEORGIA-5.4%
A1/A-1 Housing Authority of Fulton County (Sumitomo Bank LOC)
4.45%*, 07/07/95 ........................................... 900,000 900,000
--------
ILLINOIS-0.6%
AA+/A-1+ Illinois Development Finance Authority Olin Corp. Project-
Series D (Credit Suisse LOC) 4.40%*, 07/03/95 ............. 100,000 100,000
--------
Indiana-5.4%
VMIG-1/A-1+ Jasper County CP (Barclays Bank LOC) 4.15%, 07/07/95 .......... 900,000 900,000
--------
LOUISIANA-3.7%
VMIG-1/A-1+ St. Charles Parish Louisana Pollution Control-Shell Oil
Company Project, 4.20%*, 07/03/95 .......................... 300,000 300,000
AAA/A-1+ St. Charles Parish Louisana Pollution Control-Shell Oil
Company Project, 3.70%*, 07/07/95 .......................... 300,000 300,000
--------
600,000
--------
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS AS OF JUNE 30, 1995 (CONTINUED)
TAX-FREE MONEY MARKET FUND
CREDIT
RATING** PRINCIPAL
MDY/S&P AMOUNT VALUE
------------ ------------ ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES-(continued)
MARYLAND-5.4%
A1/VMIG-1 Maryland Health & Higher Education Series A Pooled Loan
(First National Bank LOC) 5.40%*, 07/07/95 .................... $ 900,000 $ 900,000
-----------
MICHIGAN-5.4%
SP-1+ Michigan Municipal Authority-Series A, 5.00%, 05/03/96 .......... 900,000 905,428
-----------
MISSISSIPPI-1.8%
VMIG-1/NR Jackson County Mississippi Pollution Control-Chevron Project
(Chevron Obligor LOC) 4.05%*, 07/03/95 ........................ 300,000 300,000
-----------
MISSOURI-1.8%
AA-/A-1+ Missouri Health & Education Facility (Morgan Guaranty
Trust LOC) 3.95%*, 07/07/95 ................................... 300,000 300,000
-----------
NEW YORK-18.3%
VMIG-1/A-1+ Metropolitan Transportation Authority of New York-Series 1991
(J.P. Morgan LOC) 3.75%*, 07/03/95 ........................... 700,000 700,000
VMIG-1/A-1+ New York City GO Series B (Union Bank of Switzerland LOC)
3.85%*, 07/03/95 .............................................. 600,000 600,000
VMIG-1/A-1 New York City HFA Normandie Court I Project (Societe General
LOC) 3.90%*, 07/07/95 ......................................... 900,000 900,000
AA/A-1+ New York State ERDA Pollution Control (Niagara Mohawk
Power Corp.) Series A (Toronto Dominion Bank LOC)
4.55%*, 07/03/95 .............................................. 400,000 400,000
VMIG-1/A-1 Triborough Bridge & Tunnel Authority Special Obligation-
Series 1994 (FGIC Insurance), 3.75%*, 07/07/95 ................ 400,000 400,000
-----------
3,000,000
-----------
OHIO-4.8%
VMIG-1/A-1+ Akron Sanitation & Sewer System Revenue Bond Series 1994
(Credit Suisse LOC) 4.15%*, 07/07/95 .......................... 300,000 300,000
A1/VMIG-1 Cuyahoga County, Ohio Hospital Revenue Bond
(Dai-Ichi Kangyo LOC) 4.20%*, 07/03/95 ........................ 500,000 500,000
------------
800,000
------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS AS OF JUNE 30, 1995 (CONTINUED)
TAX-FREE MONEY MARKET FUND
CREDIT
RATING** PRINCIPAL
MDY/S&P AMOUNT VALUE
------------ ------------ ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES-(continued)
OKLAHOMA-5.4%
A1/VMIG-1 University of Tulsa, Series 1985 A (Fuji Bank, Ltd. LOC)
4.25%*, 07/07/95 ............................................. $ 900,000 $ 900,000
-----------
SOUTH DAKOTA-5.4%
AA-/A-1+ Lawrence County, South Dakota Pollution Control (Homestake
Mining Co.) (Bank of Nova Scotia LOC) 4.25%*, 07/07/95 ........ 900,000 900,000
-----------
TENNESSEE-5.4%
A+/A-1 Winchester IDB-CKR Industries Series 1985 (Industrial Bank
of Japan LOC) 4.50%*, 07/07/95 ................................ 900,000 900,000
-----------
TEXAS-14.5%
VMIG-1 Lufkin, Texas Health Facility-Memorial Medical Center East Texas
Project (Texas Commerce LOC) 4.15%*, 07/07/95 ................. 900,000 900,000
A-1/VMIG-1 Tarrant County, Texas Health Facilities-Harris Methodist Health
Systems (Fuji Bank LOC) 4.15%*, 07/03/95 ...................... 700,000 700,000
P-1/A-1 Tyler Health Facilities CP (Banque Paribas LOC)
4.45%, 07/15/95 ............................................... 800,000 800,000
-----------
2,400,000
-----------
VIRGINIA-0.6%
P-1/A-1 Peninsula Port Authority of Virginia Coal-Dominion Terminal
Associates Project Series D (Barclays Bank LOC),
4.25%*, 07/03/95 .............................................. 100,000 100,000
-----------
WYOMING-1.8%
Aa2/VMIG-1 Uinta County, Wyoming Pollution Control (Chevron)
4.05%*, 07/03/95 .............................................. 100,000 100,000
Aa2/P-1 Uinta County, Wyoming Pollution Control (Chevron) Series A,
4.05%*, 07/03/95 .............................................. 200,000 200,000
-----------
300,000
-----------
TOTAL INVESTMENTS-96.6%
(Cost--$15,990,428)*** ...................................................... 15,990,428
-----------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS AS OF JUNE 30, 1995 (CONTINUED)
TAX-FREE MONEY MARKET FUND
VALUE
------------
<S> <C>
OTHER ASSETS (LIABILITIES)-0.4%
Cash .............................................................................................. $ 536,548
Interest receivable ............................................................................... 73,297
Other assets ...................................................................................... 27,149
Dividends payable ................................................................................. (40,240)
Accrued expenses .................................................................................. (24,117)
Due to affilitates ................................................................................ (9,544)
------------
Other assets in excess of liabilities-net ...................................................... 563,093
------------
NET ASSETS-100.0% ................................................................................. $ 16,553,521
============
NET ASSET VALUE PER SHARE-applicable to 16,553,521 shares
($0.001 par value) outstanding ................................................................. $1.00
=====
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS AS OF JUNE 30, 1995 (UNAUDITED)
NEW YORK TAX-FREE MONEY MARKET FUND
CREDIT
RATING** PRINCIPAL
MDY/S&P AMOUNT VALUE
------------ ------------ ------------
<C> <S> <C> <C>
NEW YORK MUNICIPAL SECURITIES-99.2%
SHORT-TERM NOTES-36.2%
MIG-1 City of Elmira, NY BAN 4.50%, 08/11/95 ......................... $ 2,500,000 $ 2,501,430
SP-1 Nassau, New York County RAN 4.25%, 03/15/96 ..................... 2,000,000 2,006,873
Aa/AA-1 New York City Municipal Assistance Corp. Series 66,
6.90%, 07/01/96 ............................................... 2,000,000 2,059,265
MIG-1/SP1+ New York City Municipal Water & Sewer System Revenue Bond-
Series A (MBIA Insurance), 6.75%, 06/15/96 .................... 1,850,000 1,937,330
Aa2 New York State ERDA-Rochester Gasand Electric
(Credit Suisse LOC) 4.40%, 11/15/95 ........................... 2,000,000 2,000,000
Aaa/AAA New York State Environmental Facilities Pollution Control-
Pooled Loan B, 3.50%, 05/15/96 ................................ 900,000 898,837
Aaa/AAA New York State Medical Care Facility Finance Agency-
Mt. Sinai Hospital (FHA LOC) 8.875%, 01/15/96 ................. 3,400,000 3,558,664
VMIG-1/A-1 New York State Power Authority, 4.40%, 09/01/95 ................. 2,500,000 2,500,000
MIG-1/SP1+ Suffolk County TAN (Westdeutche Bank LOC)
5.25%, 08/15/95 ............................................... 1,500,000 1,500,991
MIG-1 Suffolk County TAN (National Westminister LOC)
4.50%, 09/14/95 ............................................... 1,000,000 1,000,828
Aaa/AAA Triborough Bridge & Tunnel Authority-Series H
8.375%, 01/01/96 .............................................. 1,500,000 1,560,580
Aaa/AAA Westchester New York TAN 5.00%, 12/14/95 ........................ 2,000,000 2,004,400
------------
TOTAL SHORT-TERM NOTES (Cost-$23,529,198) ................................. 23,529,198
------------
VARIABLE RATE DEMAND NOTES*-60.5%
VMIG-1/A-1 New York City GO (Fuji Bank Ltd. LOC)
4.20%, 07/03/95 ............................................... 700,000 700,000
4.20%, 07/07/95 ............................................... 200,000 200,000
VMIG-1/A-1 New York City GO (Mitsubishi LOC) 3.95%, 07/07/95 ............... 600,000 600,000
VMIG-1/Aa3 New York City HDC-East 96th Street Project (Mitsubishi LOC)
3.75%, 07/07/95 ............................................... 2,000,000 2,000,000
VMIG-1/A-1 New York City HDC-Park Gate Towers (Citibank LOC)
3.85%, 07/07/95 ............................................... 2,785,000 2,785,000
VMIG-1/A-1 New York City HDC-Queenswood Apartments (Sumitomo
Bank LOC) 4.00%, 07/07/95 ..................................... 2,800,000 2,800,000
A+/A-1 New York City IDA-Columbia Grammar School Project
(Chemical Bank LOC) 3.80%, 07/05/95 ........................... 2,000,000 2,000,000
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS AS OF JUNE 30, 1995 (CONTINUED)
NEW YORK TAX-FREE MONEY MARKET FUND
CREDIT
RATING** PRINCIPAL
MDY/S&P AMOUNT VALUE
------------ ------------ ------------
<C> <S> <C> <C>
VARIABLE RATE DEMAND NOTES*-(continued)
VMIG-1/A-1+ New York City Municipal Water & Sewer System Revenue
Bond-Series 1992-C (FGIC Insurance), 4.25%, 07/03/95 .......... $ 600,000 $ 600,000
VMIG-1/A-1+ New York City Municipal Water Financial Authority
(FGIC Insurance) 4.10%, 07/03/95 .............................. 200,000 200,000
VMIG-1/A-1 New York City Trust For Cultural Resources-Carnegie Hall
(Dai-Ichi Kangyo LOC) 4.05%, 07/07/95 ......................... 2,600,000 2,600,000
VMIG-1/A-1 New York City Trust For Cultural Resources-Museum of
Broadcasting (Sumitomo Bank Ltd. LOC) 4.00%, 07/07/95 ........ 1,000,000 1,000,000
VMIG-1/A-1+ New York Local Government Assistance Corporation Series A
(Credit Suisse LOC) 3.70%, 07/07/95 ........................... 1,400,000 1,400,000
VMIG-1/A-1 New York Metropolitan Transportation Authority Commuter
Facilities-Series 1991 (Morgan Guarantee Trust LOC)
3.75%, 07/07/95 ............................................... 900,000 900,000
VMIG-1/A-1 New York State Dormitory Authority-Mirian Osborne Memorial
Home Series A (Banque Paribas LOC) 4.05%, 07/07/95 ............ 2,000,000 2,000,000
Aa2/VMIG-1 New York State Dormitory Authority-Oxford University Press
(Wachovia Bank LOC) 5.25%, 07/03/95 .......................... 1,300,000 1,300,000
A1/VMIG-1 New York State Dormitory Authority-Series 1994
(Banque Paribas LOC) 4.10%, 07/03/95 .......................... 900,000 900,000
VMIG-1/A-1+ New York State ERDA Pollution Control-Orange and Rockland
Project (Societe Generale LOC) 3.95%, 07/03/95 ................ 2,000,000 2,000,000
NR/A-1+ New York State ERDA Pollution Control Niagara Mohawk Power
Corp. (Toronto Dominum Bank LOC) 4.20%, 07/03/95 .............. 100,000 100,000
AA/A-1+ New York State ERDA Pollution Control Niagara Mohawk Power-
Series A (Toronto Dominion Bank LOC) 4.55%, 07/03/95 .......... 600,000 600,000
Aa/A-1+ New York State ERDA Pollution Control Niagara Mohawk
Power-Series C (Canadian Imperial Bank LOC)
4.20%, 07/03/95 ............................................... 100,000 100,000
VMIG-1/A-1+ New York City GO (FGIC Insurance) 4.20%, 07/03/95 ............... 800,000 800,000
VMIG-1/A-1 New York City GO (Dai-Ichi Kangyo LOC) 4.55%, 07/03/95 .......... 500,000 500,000
VMIG-1/A-1+ New York City GO (FGIC Insurance) 4.50%, 07/03/95 ............... 300,000 300,000
VMIG-1/A-1+ New York State GO Series B (FGIC Insurance) 4.50%, 07/03/95 .... 200,000 200,000
VMIG-/A-1 New York State HFA-Liberty View Apartments (Chemical Bank
LOC) 4.00%, 07/07/95 ......................................... 2,700,000 2,700,000
VMIG-1/A-1+ New York State HFA-Pleasant Creek Meadows (AMBAC
Insurance) 3.75%, 07/07/95 .................................... 1,000,000 1,000,000
VMIG-1/A-1+ New York State HFA-Normandie Court Project (Societe General
LOC) 3.90%, 07/07/95 .......................................... 600,000 600,000
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS AS OF JUNE 30, 1995 (CONTINUED)
NEW YORK TAX-FREE MONEY MARKET FUND
CREDIT
RATING** PRINCIPAL
MDY/S&P AMOUNT VALUE
------------ ------------ ------------
<C> <S> <C> <C>
VARIABLE RATE DEMAND NOTES*-(continued)
A-1+ New York State HFA-Series A-Sloane Kettering
4.05%, 07/07/95 ............................................... $ 1,100,000 $ 1,100,000
VMIG-1/A-1 New York State Job Development Authority Series C
(Sumitomo LOC) 3.60%, 07/03/95 ................................ 235,000 235,000
VMIG-1/A-1 New York State Job Development Authority Series D
(Sumitomo LOC) 3.60%, 07/03/95 ................................ 535,000 535,000
VMIG-1/A-1 New York State Job Development Authority Series E
(Sumitomo LOC) 3.60%, 07/03/95 ................................ 545,000 545,000
VMIG-1/A-1 New York State Job Development Authority Series H
(Sumitomo LOC) 3.60%, 07/03/95 ................................ 750,000 750,000
VMIG-1/A-1+ New York State Local Government Assistance Corp.
(Credit Suisse LOC) 3.70%, 07/07/95 ........................... 400,000 400,000
Aa3/VMIG-1 New York State Medical Care Facilities Finance Agency-Lenox
Hill Hospital Project (Chemical Bank LOC) 3.90%, 07/07/95 ..... 1,000,000 1,000,000
AA-/A-1+ Onondaga County, New York IDA-Pass & Seymore Project
(Banque National de Paris LOC) 3.30%, 07/07/95 ................ 1,200,000 1,200,000
A-1/ P-1 Otsego County IDA- Regal Textile Corp. (Deutsche Bank LOC)
4.95%, 07/07/95 ............................................... 820,000 820,000
VMIG-1 Suffolk County IDA Photronics Corp. (Morgan Guaranty
Trust LOC) 4.10%, 07/03/95 .................................... 200,000 200,000
Aa2/P1 Uinta County New York Pollution Control 5.05%, 7/03/95 .......... 100,000 100,000
Aa2/VMIG-1 Wallkill New York Pollution Control IDA-Reynolds Metal
Project (National Westminster LOC) 4.25%, 07/07/95 ............ 500,000 500,000
A1/VMIG-1 Yonkers New York IDA-Consumers Union Facility (Industrial
Bank of Japan LOC) 3.95%, 07/07/95 ............................ 1,000,000 1,000,000
------------
TOTAL VARIABLE RATE DEMAND NOTES (Cost-$39,270,000) ............. 39,270,000
------------
OTHER MUNICIPAL SECURITIES*-2.5%
VMIG-1/AA- Dade County Florida IDA Exempt Facilities Revenue
Refunding Bond, 4.20%, 07/03/95 700,000 700,000
VMIG-1 Puerto Rico Municipal Finance Agency 4.75,%, 07/03/95 920,000 920,000
------------
TOTAL OTHER MUNICIPAL SECURITIES (Cost-$1,620,000) 1,620,000
------------
TOTAL INVESTMENTS-99.2%
(Cost-$64,419,198)*** ....................................................... 64,419,198
------------
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS AS OF JUNE 30, 1995 (CONTINUED)
NEW YORK TAX-FREE MONEY MARKET FUND
VALUE
------------
<S> <C>
OTHER ASSETS (LIABILITIES)-0.8%
Cash ............................................................................................... $ 7,610
Interest receivable ................................................................................ 691,288
Other assets ....................................................................................... 25,663
Dividends payable .................................................................................. (158,485)
Accrued expenses ................................................................................... (21,418)
Due to affiliates .................................................................................. (18,143)
------------
Other assets in excess of liabilities-net ....................................................... 526,515
------------
NET ASSETS-100% .................................................................................... $ 64,945,713
============
NET ASSET VALUE PER SHARE-applicable to 64,945,851 shares
($0.001 par value) outstanding .................................................................. $1.00
=====
<FN>
ABBREVIATIONS AND NOTES USED IN THESE STATEMENTS:
AMBAC ...........................AMBAC Indemnity Corporation
BAN .............................Bank Anticipation Note
CP ..............................Commercial Paper
ERDA ............................Energy Research Development Authority
FGIC ............................Financial Guaranty Insurance Company
GO ..............................General Obligations
HDC .............................Housing Development Corporation
HFA .............................Housing Finance Agency
IDA .............................Industrial Development Authority
IDB .............................Industrial Development Board
LOC .............................Letter of Credit
MBIA ............................Municipal Bond Investors Assurance
RAN .............................Revenue Anticipation Note
TAN .............................Tax Anticipation Note
NR Not Rated. In the opinion of the Investment Adviser, instrument judged to be
of comparable investment quality to rated securities which may be purchased by
the Funds.
* Variable Rate Demand Note: stated interest rate as of June 30, 1995; maturity date reflects date of next rate change.
** Credit Ratings were obtained from Standard & Poor's Corporation and Moody's Investors Service, Inc.
*** Also represents cost for Federal income tax purposes.
Institutions shown in parenthesis have entered into credit support agreements with the issuer.
</FN>
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 (UNAUDITED)
NEW YORK
TAX-FREE TAX-FREE
MONEY MARKET MONEY MARKET
FUND FUND
------------ ------------
<S> <C> <C>
INVESTMENT INCOME:
Income:
Interest ........................................... $ 413,571 $ 1,184,802
--------- -----------
Expenses:
Advisory fees ...................................... 36,653 107,664
Legal fees ......................................... 20,923 21,315
Transfer agent fees ................................ 13,128 18,589
Administrative services fee ........................ 10,473 30,762
Co-administrative and shareholder servicing fees ... 7,332 21,533
Printing ........................................... 5,917 6,816
Distribution expenses .............................. 5,342 22,081
Trustees' fees and expenses ........................ 4,283 4,283
Custodian fee ...................................... 4,068 4,923
Miscellaneous expenses ............................. 257 11,598
--------- -----------
Total expenses ................................... 108,376 249,564
Less expense waivers / reimbursements .............. (13,149) (52,735)
--------- -----------
Net expenses ..................................... 95,227 196,829
--------- -----------
Net investment income .............................. 318,344 987,973
--------- -----------
NET REALIZED LOSS ON INVESTMENTS:
Net realized loss on investments ................... -- (138)
--------- -----------
Net increase in net assets resulting from operations $ 318,344 $ 987,835
========= ===========
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
TAX-FREE MONEY MARKET FUND
FOR THE
SIX MONTHS ENDED FOR THE
JUNE 30, 1995 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1994
--------------- -----------------
<S> <C> <C>
OPERATIONS:
Net investment income ................................ $ 318,344 $ 994,503
Net realized loss on investments ..................... -- (54,219)
------------ ------------
Net increase in net assets resulting from operations 318,344 940,284
------------ ------------
DIVIDENDS PAID TO SHAREHOLDERS FROM NET
INVESTMENT INCOME ...................................... (314,125) (994,503)
------------ ------------
CONTRIBUTION BY AFFILIATE .............................. -- 50,000
------------ ------------
NET DECREASE IN NET ASSETS FROM CAPITAL SHARE
TRANSACTIONS ........................................... (15,230,341) (32,469,787)
------------ ------------
Total decrease in net assets ....................... (15,226,122) (32,474,006)
------------ ------------
NET ASSETS:
Beginning of period ................................ 31,779,643 64,253,649
------------ ------------
End of period ...................................... $ 16,553,521 $ 31,779,643
============ ============
</TABLE>
<TABLE>
<CAPTION>
NEW YORK TAX-FREE MONEY MARKET FUND
FOR THE
SIX MONTHS ENDED FOR THE
JUNE 30, 1995 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1994
-------------- ----------------
<S> <C> <C>
OPERATIONS:
Net investment income ................................ $ 987,973 $ 1,303,999
Net realized loss on investments ..................... (138) --
------------ ------------
Net increase in net assets resulting from operations 987,835 1,303,999
------------ ------------
DIVIDENDS PAID TO SHAREHOLDERS FROM NET
INVESTMENT INCOME ...................................... (987,973) (1,303,999)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL
SHARE TRANSACTIONS ..................................... 11,407,554 (5,855,702)
------------ ------------
Total increase (decrease) in net assets ............ 11,407,416 (5,855,702)
------------ ------------
NET ASSETS:
Beginning of period ................................ 53,538,297 59,393,999
------------ ------------
End of period ....................................... $ 64,945,713 $ 53,538,297
============ ============
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Mariner Funds Trust (the "Trust") was organized on October 31, 1985 as
a Massachusetts business trust and is a no-load, open-end, diversified
investment company which currently has five separate investment
portfolios, including Mariner Tax-Free Money Market Fund and Mariner
New York Tax-Free Money Fund (collectively, the "Funds").
The Mariner New York Tax-Free Money Market Fund follows an investment
policy of investing primarily in New York municipal obligations.
Economic changes affecting the state and certain of its public bodies
and municipalities may affect the ability of issuers within the state
to pay interest on, or repay principal of, municipal obligations held
by the Fund.
SECURITIES VALUATION: Investment securities are valued at amortized
cost which approximates market value. In the event that a deviation of
1/2 of 1% or more exists between a Fund's $1.00 per share net asset
value, calculated at amortized cost, and the net asset value calculated
by reference to market-based values, or if there is any other deviation
which the Board of Trustees believes would result in a material
dilution to shareholders or purchasers, the Board of Trustees will
promptly consider what action should be taken.
TAXES: It is the Funds' policy to comply with the provisions of the
Internal Revenue Code, as amended, applicable to regulated investment
companies, and to distribute substantially all of their taxable income
and net realized capital gains to their shareholders for each taxable
year. Therefore, no provision is required for Federal income tax.
DIVIDENDS AND DISTRIBUTIONS: The Funds intend to declare as a dividend
substantially all of their net investment income, which includes
realized gains and losses, if any, at the end of each business day and
to pay within five business days after the end of each month.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions
are recorded on trade date. Identified cost of investments sold is used
for both financial statement and Federal income tax purposes. Interest
income, including the amortization of discount or premium, is recorded
as earned.
EXPENSE ALLOCATION: Expenses directly attributable to each Fund in the
Trust are charged to that Fund's operations; expenses which are
applicable to all Funds are allocated among them.
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. CAPITAL
The Trust has authorized an unlimited number of shares of beneficial
interest with a par value $0.001 per share. Transactions in shares of
beneficial interest at $1.00 per share were as follows:
TAX-FREE MONEY MARKET FUND
----------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1995 DECEMBER 31, 1994
---------------- ----------------
Sold ................................... 17,520,918 121,600,626
Issued in reinvestment of dividends .... 58,528 124,734
------------ ------------
17,579,446 121,725,360
Redeemed ............................... (32,809,787) (154,195,147)
------------ ------------
Decrease in shares ..................... (15,230,341) (34,469,787)
============ ============
NEW YORK TAX-FREE MONEY MARKET FUND
------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1995 DECEMBER 31, 1994
--------------- ----------------
Sold ................................... 52,016,658 96,106,539
Issued in reinvestment of dividends .... 589,612 713,846
------------ ------------
52,606,270 96,820,385
Redeemed ............................... (41,198,716) (102,676,087)
------------ ------------
Increase (decrease) in shares .......... 11,407,554 (5,855,702)
============ ============
At June 30, 1995, each Fund's composition of net assets was as follows:
TAX-FREE NEW YORK TAX-FREE
MONEY MARKET FUND MONEY MARKET FUND
----------------- -----------------
Paid-in capital ........................ $ 16,553,521 $ 64,945,851
Net realized loss on investments ....... -- (138)
------------ ------------
Total net assets ....................... $ 16,553,521 $ 64,945,713
============ ============
3. AGREEMENTS
The Trust retains HSBC Asset Management Americas Inc. ("HSBC Americas")
to act as Investment Adviser for the Funds. HSBC Americas is the North
American investment affiliate of HSBC Holdings plc (Hong Kong and
Shanghai Banking Corporation). As Investment Adviser, HSBC Americas
furnishes investment guidance and policy direction in connection with
the management of the portfolio of the Funds, subject to policy
established by the Board of Trustees.
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
As compensation for its services, HSBC Americas is paid monthly
advisory fees at the following annual rates:
Advisory
Portion of each Fund's average daily net assets Fee Rate
------------------------------------------------------ --------
Not exceeding $500 million ........................... 0.350%
In excess of $500 million but not exceeding $1 billion 0.315%
In excess of $1 billion but not exceeding $1.5 billion 0.280%
In excess of $1.5 billion ............................ 0.245%
For the six months ended June 30, 1995, HSBC Americas earned
approximately $26,200 and $61,600 in advisory fees, net of fee waivers
of approximately $10,500 and $46,100, for Tax-Free Money Market Fund
and New York Tax-Free Money Market Fund, respectively.
As administrator, PFPC Inc. ("PFPC") is paid a monthly asset based fee
of 0.10% Of each Fund's first $200 million of average net assets;
0.075% Of each Fund's next $200 million of average net assets; 0.05% Of
each Fund's next $200 million of average net assets; and 0.03% of each
funds average net assets in excess of $600 million; exclusive of
out-of-pocket expenses. PFPC has agreed to waive 10% and 5% of its fee
during the first and second year of its administration, respectively.
For the six months ended June 30, 1995, PFPC earned approximately
$9,500 and $27,800, net of fee waivers of approximately $1,000 and
$3,000, for Tax Free-Money Market Fund and New York Tax Free-Money
Market Fund, respectively.
HSBC Americas may enter into agreements (the "Service Agreements") with
certain banks, financial institutions and corporations ("Service
Organizations") so that each Service Organization handles recordkeeping
and provides certain administrative services for its customers who
invest in the Funds through accounts maintained at that Service
Organization. Each Service Organization will receive monthly payments,
which are based upon expenses that the Service Organization has
incurred in the performance of its services under the Service
Agreement. The payments from each Fund on an annual basis will not
exceed 0.25% of the average value of each Fund's shares held in the
subaccounts of the Service Organizations.
Marine Midland Bank, N.A. ("Marine Midland"), an affiliate of the
Adviser, serves as custodian for the Funds. For furnishing custodian
services, Marine Midland is paid a monthly fee with respect to the
Funds for safekeeping their assets plus certain transaction charges and
out-of-pocket expenses. For the six months ended June 30, 1995, Marine
Midland earned approximately $4,100 and $4,900 for Tax-Free Money
Market Fund and New York Tax-Free Money Market Fund, respectively, in
custodian fees.
HSBC Americas earned co-administration and shareholder servicing fees
of 0.03% and 0.04% of each Fund's average net assets, respectively,
totaling approximately $7,300 and $21,500 for Tax-Free Money Market
Fund and New York Tax-Free Money Market Fund, respectively. Of that
total, HSBC Americas waived approximately $1,600 and $3,600 of these
fees for the month of January 1995 for Tax-Free Money Market Fund and
New York Tax-Free Money Market Fund, respectively.
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Funds have adopted a Distribution Plan and Agreement (the "Plan")
pursuant to Rule 12b-1 of the Investment Company Act of 1940, as
amended. The Plan provides for a monthly payment by each Fund to
Mariner Funds Services for expenses incurred in connection with
distribution services provided to each Fund not to exceed an annual
rate of 0.20% of the average daily value of each Fund's net assets
during the preceding month.
One state in which the shares of the Tax-Free Money Market Fund are
qualified for sale imposes limitations on the expenses of the Fund. The
Advisory Contract and the Administrative Services Contract with HSBC
Americas provide that if, in any fiscal year, the total expenses of the
Fund (excluding taxes, interest, distribution expenses, brokerage
commissions and other portfolio transaction expenses, other
expenditures which are capitalized in accordance with generally
accepted accounting principles and extraordinary expenses, but
including the advisory and administrative services fees) exceed the
expense limitation applicable to the Fund imposed by the securities
regulations of such state, HSBC Americas will pay or reimburse the Fund
in amounts equal to the excess. Although there is no certainty that
this limitation will be in effect in the future, the effective
limitation on an annual basis with respect to the Fund is currently
2.5% per annum of the first $30 million of average net assets, 2.0% of
the next $70 million of average net assets and 1.5% of average net
assets in excess of $100 million. For the six months ended June 30,
1995, there were no payments or reimbursements required as a result of
this expense limitation.
A partner of Baker & McKenzie, legal counsel to the Trust, serves as
Secretary of the Trust. For the six months ended June 30, 1995, each
Fund paid legal fees of approximately $43,000 to Fund counsel.
4. OTHER RELATED PARTY TRANSACTIONS
During 1994, an affiliate of the Adviser purchased a security from the
Tax-Free Money Market Fund at an amount $50,000 in excess of the
security's fair value. The Tax-Free Money Market Fund recorded a
realized loss on the sale and an offsetting capital contribution from
the affiliate.
16
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
TAX-FREE MONEY MARKET FUND
FOR THE
SIX MONTHS ENDED FOR THE YEAR ENDED DECEMBER 31,
JUNE 30, 1995 -----------------------------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990
------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ....... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------------ ------------ ------------ ------------ ------------ ------------
Income from Investment
Operations:
Net investment income ... 0.015 0.022 0.020 0.025 0.040 0.054
Net realized loss ....... -- (0.002) -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
0.015 0.020 0.020 0.025 0.040 0.054
Less Distributions from:
Net investment income ... (0.015) (0.022) (0.020) (0.025) (0.040) (0.054)
------------ ------------ ------------ ------------ ------------ ------------
Contribution by affiliate .... -- 0.002 -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Net asset value,
end of period ......... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
============ ============ ============ ============ ============ ============
Total return ................. 1.50%(a) 2.25% 1.98% 2.55% 4.08% 5.59%
Ratios/Supplemental Data
Net assets (000),
end of period ......... $ 16,554 $ 31,780 $ 64,254 $ 78,963 $ 89,101 $ 132,974
Ratio of expenses
(net of fee waivers) to
average net assets* ... 0.91%(b) 0.66% 0.59% 0.62% 0.60% 0.46%
Ratio of net investment
income(net of fee
waivers) to average
net assets* ........... 3.04%(b) 2.12% 1.95% 2.52% 4.00% 5.44%
- -----------
<FN>
* The ratio of net investment income and expenses to average net assets for the
six months ended June 30, 1995 reflects a decrease of 0.12% or $0.001 per share
(1994--0.11% or $0.001) (1993--0.11% or $0.001) (1992--0.12% or $0.001)
(1991--0.12% or $0.001) and (1990--0.12% or $0.001) for the Tax-Free Money
Market Fund due to fee waivers.
(a) Not annualized.
(b) Annualized.
</FN>
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
NEW YORK TAX-FREE MONEY MARKET FUND
FOR THE
SIX MONTHS ENDED FOR THE YEAR ENDED DECEMBER 31,
JUNE 30, 1995 ------------------------------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990
------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ....... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------------ ------------ ------------ ------------ ------------ ------------
Income from Investment
Operations:
Net investment income ... 0.016 0.022 0.018 0.024 0.038 0.051
------------ ------------ ------------ ------------ ------------ ------------
Less Distributions from:
Net investment income ... (0.016) (0.022) (0.018) (0.024) (0.038) (0.051)
------------ ------------ ------------ ------------ ------------ ------------
Net asset value,
end of period ......... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
============ ============ ============ ============ ============ ============
Total return ................. 1.60%(a) 2.23% 1.86% 2.44% 3.85% 5.25%
Ratios/Supplemental Data
Net assets (000),
end of period ......... $ 64,946 $ 53,538 $ 59,394 $ 56,386 $ 75,850 $ 121,433
Ratio of expenses
(net of fee waivers) to
average net assets* ... 0.65%(b) 0.57% 0.55% 0.56% 0.51% 0.40%
Ratio of net investment
income (net of fee
waivers) to average
net assets* ........... 3.21%(b) 2.20% 1.85% 2.41% 3.78% 5.12%
- ---------
<FN>
* The ratio of net investment income and expenses to average net assets for the
six months ended June 30, 1995 reflects a decrease of 0.17% or $0.001 per share
(1994--0.16% or $0.003) (1993--0.17% or $0.002) (1992--0.17% or $0.002)
(1991--0.17% or $0.002) and (1990--0.18% or $0.002) for the New York Tax-Free
Money Market Fund due to fee waivers.
(a) Not annualized.
(b) Annualized.
</FN>
</TABLE>
See Notes to Financial Statements.
18
<PAGE>
===============================================================================
MARINER FUNDS TRUST
370 17th Street, Suite 2700
Denver, Colorado 80202
GENERAL INFORMATION:
(800) 753-4462
INVESTMENT ADVISER AND CO-ADMINISTRATOR
HSBC Asset Management Americas Inc.
250 Park Avenue
New York, New York 10177
SPONSOR AND DISTRIBUTOR
MarinerSM Funds Services
370 17th Street, Suite 2700
Denver, Colorado 80202
ADMINISTRATOR, TRANSFER
AND DIVIDEND DISBURSING AGENT
PFPC, Inc.
400 Bellevue Parkway
Wilmington, Delaware 19809
CUSTODIAN
Marine Midland Bank, N.A.
140 Broadway
New York, New York 10015
LEGAL COUNSEL
Baker & McKenzie
805 Third Avenue
New York, New York 10022
INDEPENDENT AUDITORS
Ernst & Young LLP
787 Seventh Avenue
New York, New York 10019
This report is for the information of the shareholders of Mariner Funds Trust.
Its use in connection with any offering of the Trust's shares is authorized only
in the case of a concurrent or prior delivery of the Trust's current prospectus.
===============================================================================
