<PAGE>
As filed with the Securities and Exchange Commission on February 26, 1997
Securities Act registration no. 33-1398
Investment Company Act file no. 811-4466
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 18
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 20
----------------------------
MONETTA FUND, INC.
(Registrant)
1776-A South Naperville Road, Suite 207
Wheaton, Illinois 60187-8133
Telephone number: 630/462-9800
----------------------------
Robert S. Bacarella Janet D. Olsen
Monetta Fund, Inc. Bell, Boyd & Lloyd
1776-A South Naperville Road, #207 Three First National Plaza, #3300
Wheaton, Illinois 60187-8133 Chicago, Illinois 60602
(Agents for service)
----------------------------
Amending Parts A, B and C and filing exhibits.
It is proposed that this filing will become effective:
X
--- immediately upon filing pursuant to rule 485(b)
--- On ---------------- pursuant to rule 485(b)
--- 60 days after filing pursuant to rule 485(a)(1)
--- on ---------------- pursuant to rule 485(a)(1)
--- 75 days after filing pursuant to rule 485(a)(2)
--- on ---------------- pursuant to rule 485(a)(2)
Registrant has elected to register an indefinite number of its shares of common
stock pursuant to Rule 24f-2. Registrant expects to file its Rule 24f-2 Notice
for the fiscal year ended December 31, 1996 on or before February 28, 1997.
<PAGE>
MONETTA FUND, INC.
Cross-reference sheet pursuant to rule 495(a) of Regulation C
Item Location or caption*
-------- --------------------------------
Part A (Prospectus)
-------------------
1(a)-(b) Front Cover
2(a) Fund Expenses
(b)-(c) Summary
3(a) Financial Highlights
(b) Not Applicable
(c) Investment Return
4(a)(i) Other Information
(a)(ii)&(b) Investment Objectives and Policies; Risks and Investment
Considerations; Investment Restrictions
(c) Investment Objectives and Policies; Risks and Investment
Considerations
5(a) Management of the Funds
(b) Management of the Funds; Rear Cover; Fund Expenses
(c) Management of the Funds
(d) Not Applicable
(e) How To Purchase Shares; How to Redeem Shares; Other Information
(f) Management of the Funds; Fund Expenses
(g) Management of the Funds
5A The required information is included in registrant's annual
report to shareholders
6(a) Other Information
(b)-(d) Not Applicable
(e) Other Information
(f)-(g) Dividends, Distributions and Federal Taxes
(h) Not Applicable
7 How to Purchase Shares
(a) Management of the Funds
(b) How to Purchase Shares; Determination of Net Asset Value
(c)-(d) How to Purchase Shares; Shareholder Services
(e)-(f) Management of the Funds
8(a)-(d) How to Redeem Shares
9 Not Applicable
i
<PAGE>
Item Location or caption*
- -------- --------------------------------
Part B (Statement of Additional Information)
--------------------------------------------
10(a)-(b) Front Cover
11 Table of Contents
12 Not Applicable
13(a)-(c) Investment Objectives and Policies; Risks and Investment
Considerations; Investment Restrictions
(d) Portfolio Transactions
14(a)-(b) Directors/Trustees and Officers
(c) Not Applicable
15(a)-(c) Directors/Trustees and Officers
16(a) Investment Adviser; Directors/Trustees and Officers
(b) Investment Adviser
(c)-(e) Not Applicable
(f) Service and Distribution Plan
(g) Not Applicable
(h) Custodian; Independent Auditors
(i) Not Applicable
17(a)-(d) Portfolio Transactions; Investment Adviser
(e) Not Applicable
18(a)-(b) Not Applicable
19(a)-(c) Purchasing and Redeeming Shares; More Information About Net
Assets Value
20 Tax Status
21(a) Distributor
(b) Not Applicable
(c) Distributor
22(a)-(b) Performance Information
23 Front Cover
ii
<PAGE>
Item Location or caption*
-------- ----------------------------
Part C (Other Information)
--------------------------
24 Financial statements and exhibits
25 Persons controlled by or under common control with
registrant
26 Number of holders of securities
27 Indemnification
28 Business and other connections of investment advisor
29 Principal underwriters
30 Location of accounts and records
31 Management services
32 Undertakings
- ----------------------------
* References are to captions within the part of the registration statement
to which the particular item relates except as otherwise indicated.
iii
<PAGE>
This post-effective amendment no. 18 to the registration statement of Monetta
Fund, Inc. (1933 Act No. 33-1398) does not affect the prospectus and statement
of additional information of Monetta Fund, Inc. dated February 3, 1997 as
contained in post-effective amendment no. 17 to the registration statement. That
prospectus and statement of additional information are therefore not included in
this post-effective amendment no. 18.
<PAGE>
PART C -- OTHER INFORMATION
---------------------------
Item 24. Financial Statement and Exhibits
- ------- --------------------------------
(a) Financial statements:
(1) Financial statements included in Part A of this registration
statement:
None
(2) Financial statements included in Part B of this amendment:
The following financial statements, but no other part of the
report, are incorporated by reference to the following
portions of Monetta Fund's annual report to shareholders
for the year ended December 31, 1996:
Schedule of Investments at December 31, 1996
Statement of Assets and Liabilities at December 31, 1996
Statement of Operations for the year ended December 31, 1996
Statement of Changes in Net Assets for the year ended
December 31, 1996 and the year ended December 31, 1995
C-1
<PAGE>
Notes to financial statements
Independent Auditors' Report
Note: The following schedules have been omitted for the
following reasons:
Schedule I - The required information is presented
in the schedule of investments at December 31, 1996.
Schedules II, III, IV and V - the required information
is not present
(b) Exhibits:
NOTE: As used herein the term "Registration Statement" refers to the
registration statement of registrant on form N-1A, no. 33-1398.
1.1 Amended and restated charter of registrant (2)
1.2 Articles supplementary dated February 4, 1992 (2)
1.3 Articles of amendment dated February 14, 1992 (2)
2 Bylaws of registrant (amended and restated 11/10/88) (2)
3 None
4 Form of stock certificate (2)
5 Investment Advisory Agreement with Monetta Financial Services, Inc.
dated November 10, 1988 (2)
6 Distribution Agreement with Funds Distributor, Inc. (2)
7 None
8 Custody agreement with Firstar Trust Company (formerly First
Wisconsin Trust Company) (2)
9 Transfer Agent Agreement dated October 28, 1995 (2)
10 Opinion of counsel (2)
11 Consent of independent auditors
12 None
13 Subscription agreement (2)
14.1 Monetta Funds Individual Retirement Account Prototype Plan,
disclosure statement and application (2)
14.2 Monetta prototype defined contribution retirement plan (2)
14.3 Monetta prototype section 403(b)(7) retirement plan (2)
14.4 Monetta SIMPLE-IRA Supplement
15 None
C-2
<PAGE>
16 Schedule for computation of performance quotations (1)
17 Financial Data Schedule
- ------------
(1) Incorporated by reference to the exhibit of the same number filed with
post-effective amendment no. 4 to the Registration Statement.
(2)
Incorporated by reference to the exhibit of the same number filed with
post-effective amendment no. 17 to the Registration Statement
Item 25. Persons Controlled By or Under Common Control with Registrant
- ------- -------------------------------------------------------------
The registrant does not consider that there are any persons directly
or indirectly controlling, controlled by, or under common control with, the
registrant within the meaning of this item. The information in the prospectus
under the caption "Management of the Fund" and in the Statement of Additional
Information under the captions "Investment Adviser" and "Directors/Trustees and
Officers" is incorporated by reference.
Item 26. Number of Holders of Securities
- ------- -------------------------------
As of December 31, 1996 there were 49,842 record holders of capital
stock of the registrant. The registrant has no other class of securities
outstanding.
Item 27. Indemnification
- ------- ---------------
Section 2-418 of the General Corporation Law of Maryland authorizes
the registrant to indemnify its directors and officers under specified
circumstances. Section 9.01 of Article IX of the bylaws of the registrant
(exhibit 2 to this amendment, which is incorporated herein by reference)
provides in effect that the registrant shall provide certain indemnification of
its directors and officers. In accordance with section 17(h) of the Investment
Company Act, this provision of the bylaws shall not protect any person against
any liability to the registrant or its shareholders to which he would otherwise
be subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office.
C-3
<PAGE>
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser
- ------- ----------------------------------------------------
Monetta Financial Services, Inc. ("MFSI"), registrant's investment
adviser, also acts as investment adviser to Monetta Trust and to individual and
institutional clients. The directors and officers of MFSI are: Robert S.
Bacarella, Chairman and Director; Albert A. Pisterzi, President and Director;
William M. Valiant, Director; John P. Rozinsky, Vice President; and Maria C.
DeNicolo, Controller, Secretary and Treasurer. The information in the Statement
of Additional Information under the heading "Directors/Trustees and Officers"
describing the principal occupations and other affiliations of Mr. Bacarella,
Mr. Pisterzi, Mr. Valiant, Mr. Rozinsky and Ms. DeNicolo is incorporated herein
by reference. Mr. Valiant, who is now retired, was Vice President and Treasurer,
Borg-Warner Corporation, until July 1990.
Item 29. Principal Underwriters
- ------- ----------------------
(a) Funds Distributor, Inc. (the "Distributor") also acts as principal
underwriter for the following investment companies.
BJB Investment
Burridge Funds
Foreign Fund, Inc.
Fremont Mutual Funds, Inc.
Harris Insight Funds Trust
HT Insight Funds, Inc. d/b/a Harris Insight Funds
The JPM Advisor Funds
The JPM Institutional Funds
The JPM Pierpont Funds
LKCM Fund
The Munder Funds Trust
The Munder Funds, Inc.
The PanAgora Institutional Funds
RCM Capital Funds, Inc.
RCM Equity Funds, Inc.
St. Clair Money Market Fund
Skyline Funds
Waterhouse Investors Cash Management Fund, Inc.
Funds Distributor is registered with the Securities and Exchange Commission as a
broker-dealer and is a member of the National Association of Securities Dealers.
Funds Distributor is an indirect wholly-owned subsidiary of Boston Institutional
Group, Inc., a holding company all of whose outstanding shares are owned by key
employees.
(b) The information required by this Item 29(b) with respect to each
director, officer, or partner of Funds Distributor is incorporated by reference
to Schedule A of Form BD filed by Funds Distributor with the Securities and
Exchange Commission pursuant to the Securities Act of 1934 (File No. 8-20518).
C-4
<PAGE>
(c) Not applicable
Item 30. Location of Accounts and Records
- ------- --------------------------------
Robert S. Bacarella
Monetta Fund, Inc.
1776-A South Naperville Road,
Suite 207
Wheaton, Illinois 60187-8133
Item 31. Management Services
- ------- -------------------
None
Item 32. Undertakings
- ------- ------------
(a) Not applicable.
(b) Not applicable
(c) Registrant undertakes to furnish each person to whom a prospectus
is delivered with a copy of Registrant's latest annual report to
shareholders, upon request and without charge.
C-5
<PAGE>
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the registrant certifies that it meets all of
the requirements for effectiveness of this registration statement pursuant to
rule 485(b) under the Securities Act of 1933 and has duly caused this amendment
to its registration statement to be signed on its behalf by the undersigned duly
authorized officer of Monetta Fund, Inc.
MONETTA FUND, INC.
By: /s/ Robert S. Bacarella
------------------------------
Robert S. Bacarella, President
Pursuant to the requirements of the Securities Act of 1933, this
amendment to the registration statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<C> <S> <C>
/s/ Robert S. Bacarella Director and President )
- -------------------------- (principal executive officer) )
Robert S. Bacarella )
)
)
)
/s/ John W. Bakos Director )
- -------------------------- )
John W. Bakos )
)
)
)
/s/ Paul W. Henry Director )
- -------------------------- )
Paul W. Henry )
)
) January 28, 1997
)
/s/ Mark F. Ogan Director )
- -------------------------- )
Mark F. Ogan )
)
)
)
/s/ Richard D. Russo Director )
- -------------------------- )
Richard D. Russo )
)
)
)
/s/ Maria Cesario DeNicolo Treasurer )
- -------------------------- (principal financial officer) )
Maria Cesario DeNicolo )
</TABLE>
<PAGE>
[MONETTA LOGO] FAMILY OF FUNDS
Dear Fellow Shareholders: January 17, 1997
During the past year, the financial markets continued to benefit from a
moderately growing economy, low interest rates and stable inflationary
expectations. The stock market, as measured by the S & P 500 Index, was up a
healthy 23%. The large capitalization or blue-chip stocks led the way,
significantly outperforming small-cap issues.
Last year was a very volatile period. Uncertainty over the strength of the
economy, due to conflicting data, confused investors which resulted in
significant market fluctuations.
The most recent example of the market's volatility was investors' focus on the
Federal Reserve monetary policy and the fear of rising interest rates. The
uneasiness created in November by Federal Reserve Chairman Alan Greenspan, as he
warned about "irrational exuberance" in the financial markets, sent stock prices
plummeting. Investors viewed this as a buying opportunity and as a result,
stocks quickly rebounded, confirming the market's volatility.
FUND PERFORMANCE. Generally, we were very pleased with our funds' performances
last year. The Balanced Fund, with a 25.9% return, ranked FIRST in its category
of 272 funds, and the Intermediate Bond Fund, with a return of 6.5%, ranked
SECOND within its category of 176 funds as measured by Lipper Analytical
Services. The Large-Cap and Mid-Cap funds posted returns of 28.2% and 24.2%
respectively, which not only exceeded their benchmarks but, also ranked in the
upper quartile, in their respective category of funds as measured by Lipper
Analytical Services. The Government Money Market Fund, with a return of 5.12%,
ranked 13th of 115 comparable funds as measured by Lipper Analytical Services.
Our one area of disappointment was the Monetta Fund. The fund suffered from its
poor timing of investments in the very volatile technology sector. We have
addressed the problem as outlined in the Monetta Fund's performance highlight
section. We believe that these changes should have a positive impact on future
investment performance.
MARKET OUTLOOK. The new year has begun with investor anxiety at high levels and
looking aggressively for what could go wrong in 1997. Most likely, this
backdrop will create a volatile market environment with the ultimate market
direction dependent on the resiliency of economic growth.
We currently anticipate slow economic growth, coupled with moderate inflation
and relatively low interest rates. It's hard to imagine a more positive
environment for the stock market. Overall corporate profits look fairly good
and there continues to be a large flow of investment funds into the market. As
long as interest rates remain low, stocks should remain the preferred investment
choice.
1997 should be an exciting year for the Monetta Family of Funds. I would like
to thank you for the support you have placed in us with your investment dollars.
Best personal regards,
/s/ Robert S. Bacarella
ROBERT S. BACARELLA
President and Founder
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PERFORMANCE HIGHLIGHTS
<S> <C>
Monetta Fund.................................................. 3
Monetta Mid-Cap Equity Fund................................... 4
Monetta Large-Cap Equity Fund................................. 5
Monetta Balanced Fund......................................... 6
Monetta Intermediate Bond Fund................................ 7
Monetta Government Money Market Fund.......................... 8
INDEPENDENT AUDITORS REPORT........................................ 9
SCHEDULE OF INVESTMENTS
Monetta Fund.................................................. 10
Monetta Mid-Cap Equity Fund................................... 14
Monetta Large-Cap Equity Fund................................. 16
Monetta Balanced Fund......................................... 17
Monetta Intermediate Bond Fund................................ 20
Monetta Government Money Market Fund.......................... 21
FINANCIAL STATEMENTS
Statements of Assets and Liabilities.......................... 22
Statements of Operations...................................... 24
Statements of Changes in Net Assets........................... 26
Notes to Financial Statements................................. 28
</TABLE>
FOOTNOTE:
Past performance is no guarantee of future results. The principal value and
return on your investment will fluctuate and on redemption may be worth more or
less than your original cost.
References to individual securities are the views of the Advisor at the date of
this report and may change. References are not a recommendation to buy or sell
any security.
Page 2
<PAGE>
MONETTA FUND PERIOD ENDED 12/31/96
Investment Objective: Market Capitalization Range: Total Net Assets:
Capital Appreciation/Income $50 million - $1 billion $212 million
- --------------------------------------------------------------------------------
PERFORMANCE: AVERAGE ANNUAL TOTAL RETURN
1 Year 5 Years 10 Years
------ ------- --------
MONETTA FUND 1.6% 5.3% 12.4%
RUSSELL 2500 19.0% 16.0% 13.9%
NASDAQ COMPOSITE* 22.7% 17.1% 14.0%
S&P 500* 23.0% 15.2% 15.3%
*Source Lipper Analytical Services, Inc.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement Period Monetta Fund S&P 500 NASDAQ Russell 2500
- ------------------ ------------ ------- ------ ------------
<S> <C> <C> <C> <C>
3/31/87 $11,510 $12,135 $12,328 $12,204
6/30/87 11,592 12,744 12,174 12,276
9/30/87 11,216 13,585 12,736 12,878
12/31/87 10,154 10,525 9,473 9,532
3/31/88 10,784 11,122 10,740 11,060
6/30/88 12,148 11,861 11,313 11,811
9/30/88 12,431 11,901 11,114 11,713
12/31/88 12,494 12,268 10,933 11,699
3/31/89 12,884 13,138 11,660 12,603
6/30/89 13,913 14,295 12,479 13,559
9/30/89 14,573 15,823 13,557 14,549
12/31/89 14,396 16,147 13,038 13,972
3/31/90 15,168 15,661 12,485 13,583
6/30/90 16,963 16,645 13,251 14,117
9/30/90 13,690 14,360 9,875 11,015
12/31/90 16,033 15,645 10,715 11,893
3/31/91 19,002 17,913 13,824 14,921
6/30/91 19,572 17,870 13,641 14,893
9/30/91 22,220 18,825 15,102 16,173
12/31/91 24,993 20,400 16,807 17,447
3/31/92 25,153 19,886 17,307 18,193
6/30/92 23,549 20,264 16,156 17,367
9/30/92 24,248 20,902 16,719 17,841
12/31/92 26,365 21,951 19,405 20,270
3/31/93 24,617 22,909 19,783 21,231
6/30/93 24,799 23,019 20,179 21,676
9/30/93 26,728 23,612 21,866 23,209
12/31/93 26,496 24,160 22,268 23,623
3/31/94 25,796 23,245 21,313 23,099
6/30/94 24,398 23,342 20,238 22,281
9/30/94 26,116 24,481 21,909 23,879
12/31/94 24,849 24,476 21,557 23,374
3/31/95 27,245 26,858 23,427 25,101
6/30/95 29,127 29,417 26,758 27,338
9/30/95 32,757 31,768 29,914 29,966
12/31/95 31,813 33,655 30,160 30,784
3/31/96 32,303 35,462 31,572 32,588
6/30/96 33,305 37,051 33,968 33,944
9/30/96 33,245 38,196 35,171 34,710
12/31/96 32,327 41,378 37,010 36,644
</TABLE>
The graph above to the right compares the change in value of a $10,000
investment in the Monetta Fund, the S&P 500 Composite Index, and the NASDAQ
Composite Index and the Russell 2500 Stock Index. The S&P 500 and the Russell
2500 indices are a broad measure representative of the general market, while
the NASDAQ measures performance of stocks in the over-the-counter market.
Please refer to footnote on the bottom of page 2.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION: TOP 5 EQUITY HOLDING:
% OF NET ASSETS
Brightpoint, Inc. 2.5%
[PIE CHART APPEARS HERE Transocean Offshore, Inc. 1.8%
SHOWING % OF HOLDINGS] Titanium Metals Corp. 1.6%
P-Com, Inc. 1.4%
Comverse Technology, Inc. 1.3%
------
TOTAL TOP 5 HOLDINGS 8.6%
======
- --------------------------------------------------------------------------------
COMMENTARY:
The Monetta Fund appreciated 1.6% for the year ended December 31, 1996, versus a
19.0% return for the Russell 2500 Index.
A number of holdings posted very strong returns. Among these were APAC
Teleservices, Brightpoint, Ensco Int'l, St. John Knits and Qiagen. At the same
time, many of our companies demonstrated poor relative performance.
We were disturbed by the fact that our overall performance lagged our peer
indices. The largest single contributor to our poor performance was the
technology sector. A combination of the extreme volatility exhibited by most
technology stocks and problems in identifying an appropriate purchase point
resulted in several stocks being sold at a substantial loss.
To address this problem we have modified our stock screening process to identify
companies earlier in their growth cycle. On the sell side we are now letting
stocks appreciate until their growth reaches a plateau. If a stock declines 20%
from the highest price since purchased, it is extensively reviewed and is a
candidate for sale. This provides the dual benefit of enjoying the full price
appreciation of successful growth stocks, while reducing the stock price
volatility often associated with maturing growth companies.
We thank you for your support and patience, and are more excited than ever as we
enter 1997. At this point we have the system and personnel in place to take
advantage of the opportunities which await us, and look forward to keeping you
abreast of our progress.
Page 3
<PAGE>
MONETTA MID-CAP EQUITY FUND PERIOD ENDED 12/31/96
Investment Objective: Market Capitalization Range: Total Net Assets:
Capital Appreciation $1 billion - $5 billion $17.3 million
- --------------------------------------------------------------------------------
PERFORMANCE: AVERAGE ANNUAL TOTAL RETURN
Since Incept.
1 Year 3 Years (3/1/93)
------ ------- --------
MONETTA MID-CAP
EQUITY FUND 24.2% 16.5% 22.0%
S&P 400* 19.2% 14.6% 15.2%
S&P 500* 23.0% 19.7% 17.3%
*Source Lipper Analytical Services, Inc.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Monetta
Mid Cap
Measurement Period Fund S&P 500 S&P 400
- ------------------ ------- ------- -------
<S> <C> <C> <C>
3/01/93 10,000 10,000 10,000
3/31/93 11,670 10,080 10,220
6/30/93 11,880 10,120 10,455
9/30/93 13,120 10,383 10,978
12/31/93 13,540 10,622 11,274
3/31/94 13,475 10,218 10,793
6/30/94 13,109 10,258 10,399
9/30/94 13,887 10,759 11,103
12/31/94 13,835 10,757 10,817
3/31/95 14,835 11,804 11,692
6/30/95 16,536 12,929 12,723
9/30/95 17,603 13,955 13,965
12/31/95 17,233 14,785 14,165
3/31/96 18,717 15,579 15,037
6/30/96 19,106 16,277 15,470
9/30/96 19,855 16,779 15,920
12/31/96 21,402 18,177 16,885
</TABLE>
The graph above to the right compares the change in value of a $10,000
investment in the Monetta Trust Mid-Cap Equity Fund to the S&P 500 and 400. The
S&P 500 and 400 indices are a broad measure representative of the general
market. Please refer to footnote on the bottom of page 2.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION: TOP 5 EQUITY HOLDING:
% OF NET ASSETS
GreenPoint Financial Corp. 2.7%
York Int'l Corp. 2.7%
[PIE CHART APPEARS HERE Danaher Corp. 2.7%
SHOWING % OF HOLDINGS] First Tennessee Nat'l 2.6%
Kerr McGee Corp. 2.5%
------
TOTAL TOP 5 HOLDINGS 13.2%
======
- --------------------------------------------------------------------------------
COMMENTARY:
The Mid-Cap Equity Fund once again posted solid investment results for its
shareholders. For the year ended December 31, 1996, the Fund gained 24.2%, well
ahead of its benchmark index, the S&P 400 Mid-Cap Index, which was up 19.2%.
Among its peers, the Fund ranked in the top 20% of like funds as measured by
Lipper Analytical Services, which provided an average return of 17.9%.
Financial was one of the Fund's best performing sector throughout much of the
year. Two of the names that added to this year's performance were GreenPoint
Financial Corp. and Associated First Capital.
In addition, the industrial sector was overweighted in the portfolio and
performed well. In particular, Danaher Corp. was a top performer due to its
strong product line of tools and opportunistic acquisitions which produced
strong earnings per share growth.
During the 4th quarter, approximately 10% of the Fund's assets were re-deployed
from cash and equivalents into common stocks, leaving the Fund 96.5% invested in
equities at year end.
A number of companies with strong and improving growth prospects were added to
the Fund during the quarter, including Sterling Commerce, Dura Pharmaceutical,
CVS Corporation and Reynolds & Reynolds. At the same time, stocks with slowing
growth rates (e.g. Black & Decker, Autozone, and Input/Output) were sold.
The economic environment couldn't be better for common stock investing. We
believe the Fund is appropriately positioned to benefit from higher stock
prices.
Page 4
<PAGE>
MONETTA LARGE-CAP EQUITY FUND PERIOD ENDED 12/31/96
Investment Objective: Market Capitalization Range: Total Net Assets:
Capital Appreciation $5 billion + $2.3 million
- --------------------------------------------------------------------------------
PERFORMANCE: AVERAGE ANNUAL TOTAL RETURN
Since Inception
1 Year (9/1/95)
------ --------
MONETTA LARGE-CAP FUND 28.2% 25.6%
S&P 500* 23.0% 25.8%
*Source Lipper Analytical Services, Inc.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Monetta
Large-Cap S&P
Measurement Period Fund 500
- ------------------ --------- -----
<S> <C> <C>
9/01/95 10,000 10,000
9/30/95 10,000 10,482
12/31/95 10,574 11,105
3/31/96 11,344 11,701
6/30/96 11,923 12,225
9/30/96 12,864 12,603
12/31/96 13,555 13,653
</TABLE>
The S&P 500 is a broad measure representative of the general market. Please
refer to footnote on the bottom of page 2.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION: TOP 5 EQUITY HOLDING:
% OF NET ASSETS
Intel Corp. 3.4%
[PIE CHART APPEARS HERE Associated First Capital 2.9%
SHOWING % OF HOLDINGS] Eli Lilly & Co. 2.9%
Boeing Co. 2.8%
USA Waste Services, Inc. 2.8%
------
TOTAL TOP 5 HOLDINGS 14.8%
======
- --------------------------------------------------------------------------------
COMMENTARY:
The Large-Cap Equity Fund posted an outstanding return of 28.2% for the year
ended December 31, 1996. With this return, the Fund outperformed its benchmark
index, the S&P 500 Index, which appreciated 23.0%. The Fund was ranked 41 among
669 growth funds (top 7%) as ranked by Lipper Analytical Services, with the
average growth fund generating a 19.2% annual return.
Among the industry sector, those companies in the technology area provided some
of the strongest returns. Holdings in this area included Intel and Microsoft,
which continued their dominance of personal computer microprocessors and
operating systems, respectively.
Another area of success was Financial. Particularly strong were, Household
International, a consumer lender and Associated First Capital-CL A, which
benefited from strong loan growth from its diversified product line.
Overall, the Fund remained underweighted in Retail and Healthcare, which were
two of the worst performing sectors last year.
The growing sense of uncertainty about the economy has resulted in excessive
market volatility and an emphasis on the part of investors to favor more stable
quality companies. To capitalize on this environment, we will continue to
concentrate on a bottom-up security selection process, emphasizing those
companies that dominate their business franchise to produce strong and
sustainable earnings growth.
Page 5
<PAGE>
MONETTA BALANCED FUND PERIOD ENDED 12/31/96
Investment Objective: Market Capitalization Average Total
Range: Maturity: Net Assets:
Capital Appreciation/
Income $50 million + 3.7 Years $2.3 million
- --------------------------------------------------------------------------------
PERFORMANCE: AVERAGE ANNUAL TOTAL RETURN
Since Inception
1 Year (9/1/95)
------ --------
MONETTA BALANCED FUND 25.9% 24.3%
S&P 500* 23.0% 25.8%
LEHMAN GOVT/CORP BOND
INDEX 2.9% 6.5%
*Source Lipper Analytical Services, Inc.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Lehman
Government/ Lehman
Monetta Corporate Government/
Balanced 500 Intermediate Corporate
Measurement Period Fund S&P Bond Index Bond Index
- ------------------ -------- ------ ------------ -----------
<S> <C> <C> <C> <C>
9/01/95 10,000 10,000 10,000 10,000
9/30/95 10,000 10,482 10,000 10,000
12/31/95 10,616 11,105 10,427 10,573
3/31/96 11,131 11,701 10,340 10,326
6/30/96 11,913 12,225 10,406 10,374
9/30/96 12,547 12,603 10,590 10,557
12/31/96 13,369 13,653 10,849 10,880
</TABLE>
The S&P 500 is a broad measure representative of the general market. Please
refer to footnote on the bottom of page 2.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION: TOP 5 EQUITY HOLDINGS:
% OF NET ASSETS
[PIE CHART APPEARS HERE Intel Corp. 1.7%
SHOWING % OF HOLDINGS] Eli Lilly & Co. 1.6%
Sterling Commerce, Inc. 1.4%
Fluor Corp. 1.3%
Sigma Aldrich Corp. 1.3%
-----
TOTAL TOP 5 HOLDINGS 7.3%
=====
- --------------------------------------------------------------------------------
COMMENTARY:
The Balanced Fund had a spectacular year. For the year ended December 31, 1996,
the Fund's 25.9% return ranked it #1 among 272 like funds as ranked by Lipper
Analytical Services, almost doubling the 13.8% return of the average balanced
fund. The return compared favorably to the 23.0% of the S&P 500 Index, 19.0% of
the Russell 2500 Index and 2.9% return of the Lehman Govt/Corp Bond Index.
Throughout most of the year, the Fund maintained approximately 62% of its assets
in common stocks. Approximately 40% of the equity exposure was in large
capitalization stocks, with 30% in mid-cap issues and 30% in small-cap issues.
Our stock picks, up more than 40%, performed extremely well. Among the best
performing securities were Qiagen, CKE Restaurants, Ensco Int'l, TJX, Intel and
Microsoft. During the fourth quarter new stocks purchased included P-Com, Inc.,
Medquist, Foamex Int'l, Inc. and Sterling Commerce, Inc.
Approximately 35% of the Fund was invested in high grade corporate and treasury
securities with an emphasis on short-term maturities. These securities provide
income and stability to counterbalance the generally more volatile common stock
portion of the portfolio.
Page 6
<PAGE>
MONETTA INTERMEDIATE BOND FUND PERIOD ENDED 12/31/96
Investment Objective: 30-Day SEC Yield: Average Maturity: Total
Capital Appreciation/ Net Assets:
Income 5.65% 4.4 Years $2.8 million
- --------------------------------------------------------------------------------
PERFORMANCE: AVERAGE ANNUAL TOTAL RETURN
Since Incept.
1 Year 3 Years (3/1/93)
------ ------- --------
MONETTA INTERMEDIATE
BOND FUND 6.5% 6.6% 7.3%
LEHMAN GOVT/CORP
INTERMEDIATE
BOND INDEX* 4.1% 5.6% 5.7%
*Source Lipper Analytical Services, Inc.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Monetta Trust Lehman Government/Corporate
Measurement Period Intermediate Bond Fund Intermediate Bond Index
- ------------------ ---------------------- ---------------------------
<S> <C> <C>
3/01/93 $10,000 $10,000
3/31/93 10,000 10,028
6/30/93 10,399 10,255
9/30/93 10,732 10,486
12/31/93 10,817 10,504
3/31/94 10,585 10,291
6/30/94 10,494 10,229
9/30/94 10,613 10,313
12/31/94 10,705 10,302
3/31/95 11,270 10,754
6/30/95 11,866 11,292
9/30/95 12,046 11,479
12/31/95 12,282 11,883
3/31/96 12,245 11,784
6/30/96 12,428 11,859
9/30/96 12,702 12,068
12/31/96 13,074 12,364
</TABLE>
The graph above to the right compares the change in value of a $10,000
investment in the Monetta Trust Intermediate Bond Fund to the Lehman
Government/Corporate Intermediate Bond Index. The Lehman Government/Corporate
Intermediate Bond Index measures that specific segment of the bond market.
Please refer to footnote on the bottom of page 2.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION: MATURITY PROFILE:
1 Year or Less 25.7%
1 - 3 Years 9.2%
4 - 6 Years 30.2%
[PIE CHART APPEARS HERE 7 - 10 Years 34.3%
SHOWING % OF HOLDINGS] Over 10 Years 0.6%
-------
100.0%
=======
- --------------------------------------------------------------------------------
COMMENTARY:
Building on the Fund's first three quarters of strong performance, the Fund
posted impressive returns in the fourth quarter as well.
For the year ended December 31, 1996 the Fund's 6.5% return ranked it SECOND
among the 176 comparable funds in its category as measured by Lipper Analytical
Services, which averaged a return of 3.1%.
The Fund's 30-day SEC yield at December 31, 1996 was 5.65%. During the year, the
Fund paid out dividends to average a 5.7% income return.
The Fund's investments in intermediate term Treasury Notes made significant
contributions to total return throughout the year. Also, the emphasis on high
coupon corporate bonds provided higher yields in a relatively stable interest
environment.
By investing primarily in government securities, investment "quality" risk was
minimized and the Fund was able to generate a competitive return with low
volatility. This is consistent with our investment strategy.
The Fund's average maturity of 4.4 years is on the short-end of the spectrum.
The Fund is well positioned to take advantage of a rising interest rate
environment while providing a competitive return in a stable interest rate
environment.
Page 7
<PAGE>
MONETTA GOVERNMENT MONEY MARKET FUND PERIOD ENDED 12/31/96
Investment Objective: 7-Day Yield: Average Days to Maturity: Total Net Assets:
Income and Capital
Preservation 5.12% 72 Days $6.2 million
- --------------------------------------------------------------------------------
PERFORMANCE: AVERAGE ANNUAL TOTAL RETURN
1 Year 3 Years Since Incep. (3/1/93)
------ ------- ---------------------
MONETTA GOVERNMENT MONEY
MARKET FUND 5.1%** 5.0%** 4.5%**
LIPPER U.S. GOV'T MONEY MARKET
FUNDS AVG.* 4.8% 4.6% 4.1%
*Source Lipper Analytical Services, Inc.
**Total returns are net of advisory fees waived and voluntary absorption of all
or part of the Fund's operating expenses by the Advisor. Please refer to
footnote on the bottom of page 34.
An investment in the Monetta Government Money Market Fund is neither insured or
guaranteed by the U.S. Government. There can be no assurance that the Fund will
be able to maintain a stable $1.00 per share net asset value. Please refer to
footnote on the bottom of page 2.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION: ALLOCATION:
% OF NET ASSETS
U.S. Treasuries 34.2%
Government Agencies 66.6%
[PIE CHART APPEARS HERE --------
SHOWING % OF HOLDINGS] Total Investments 100.8%
Other Assets & Liabilities (0.8)%
--------
TOTAL 100.00%
========
- --------------------------------------------------------------------------------
COMMENTARY:
For the year ended December 31, 1996, the Government Money Market fund posted a
return of 5.1%. The Fund was ranked 13th of 115 comparable funds as measured by
Lipper Analytical Services. The average return of the 115 funds was 4.75%.
As of December 31, 1996, the Fund's 7-day yield was 5.12% versus the third
quarter yield of 5.17%. Average days to maturity was reduced to 72 days from 82
days on September 30.
We believe that short-term rates will be stable to moderately lower during the
first half of 1997.
Page 8
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Boards of Directors and Trustees and the Shareholders of
Monetta Fund, Inc. and Monetta Trust:
We have audited the accompanying statements of assets and liabilities of Monetta
Fund, Inc. and Monetta Trust (comprising, respectively, the Mid-Cap Equity Fund,
Large-Cap Equity Fund, Balanced Fund, Intermediate Bond Fund and Government
Money Market Fund), collectively referred to as the "Funds", including the
schedules of investments, as of December 31, 1996, and the related statements of
operations for the period then ended, the statements of changes in net assets
for each of the periods presented in the two-year period then ended, and the
financial highlights for each of the periods presented in the ten-year period
then ended. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material mistatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned, as of
December 31, 1996, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Monetta Fund, Inc. and each of the respective funds constituting the Monetta
Trust as of December 31, 1996, the results of their operations for the period
then ended, the changes in their net assets for each of the periods presented in
the two-year period then ended, and the financial highlights for each of the
periods presented in the ten-year period then ended, in conformity with
generally accepted accounting principles.
KPMG PEAT MARWICK LLP
Chicago, Illinois
January 17, 1997
Page 9
<PAGE>
SCHEDULE OF INVESTMENTS
December 31, 1996
MONETTA FUND
Quoted
Shares or Market
Principal Value
Amount (In Thousands)
- --------- --------------
COMMON STOCKS - 85.7%
CONSUMER RELATED - 25.0% $52,979
BROADCASTING/CABLE TV - 2.5%
*25,000 American Radio
Systems Corp. $ 681
*90,000 Chancellor Corp. - CL A 2,138
*36,800 Metro Networks, Inc. 929
*50,000 SFX Broadcasting, Inc.- CL A 1,487
------
5,235
------
FOOD PROCESSING - 0.4%
*40,000 Morningstar Group, Inc. 785
------
RECREATION/ENTERTAINMENT - 2.4%
*50,000 Carmike Cinemas, Inc. 1,269
100,000 International Game Tech. 1,825
*37,500 Regal Cinemas, Inc. 1,153
*100,000 West Coast
Entertainment Corp. 875
------
5,122
------
RESTAURANTS/LODGING - 3.5%
50,000 CKE Restaurants, Inc. 1,800
*40,000 Doubletree Corp. 1,800
54,000 Innkeepers USA Trust 749
*35,000 Outback Steakhouse, Inc. 936
30,000 Patriot American Hospitality,
Inc. 1,294
*50,000 Planet Hollywood Int'l, Inc. 988
------
7,567
RETAIL MANUFACTURERS & DISTRIBUTION - 0.3%
*30,000 Hirsch Int'l Corp. - CL A 555
* 5,600 Quaker Fabric Corp. 78
------
633
------
RETAIL TRADES - 10.8%
*70,000 AnnTaylor Stores Corp. 1,225
*75,000 Bed Bath & Beyond 1,819
*50,000 Domnick's Supermarkets,
Inc. 1,087
40,000 Ethan Allen Interiors 1,540
*65,000 Friedmans's, Inc. - CL A 959
*75,000 Furniture Brands Int'l 1,050
*50,000 Goody's Family Clothing,
Inc. 894
*50,000 Nine West Group, Inc. 2,319
*80,000 Officemax, Inc. 850
*10,000 Proffitt's, Inc. 369
*50,000 Quiksilver, Inc. 1,069
40,000 Ross Stores, Inc. 2,000
*50,000 Ross Systems, Inc. 481
50,000 St. John Knits, Inc. 2,175
*50,000 Stage Stores, Inc. 912
*30,000 The Buckle, Inc. 750
*80,000 The Sports Authority, Inc. 1,740
*125,000 Vans, Inc. 1,562
------
22,801
------
MISCELLANEOUS - 5.1%
* 25,000 American Business Info. 556
*100,000 American Eco Corp. 687
* 70,000 CKS Group, Inc. 1,951
* 20,000 Caribiner Int'l, Inc. 1,005
* 5,000 Consolidated Graphics, Inc. 280
* 80,000 May & Speh, Inc. 980
* 40,000 Printrak International, Inc 340
* 40,000 U S Office Products Co 1,365
* 80,000 United Waste Systems, Inc. 2,750
* 55,000 Warrantech Corp. 633
* 15,000 World Color Press 289
------
10,836
------
Page 10
<PAGE>
SCHEDULE OF INVESTMENTS
December 31, 1996
- ------------------------
MONETTA FUND (CONTINUED)
- ------------------------
<TABLE>
<CAPTION>
Quoted
Shares or Market
Principal Value
Amount (In Thousands)
- --------- --------------
FINANCIAL RELATED - 11.6% $24,553
FINANCIAL SERVICES - 11.6%
<C> <S> <C>
50,000 Advanta Corp. - CL B $ 2,044
20,000 American Bankers Insr., Grp. 1,022
*50,000 Americredit Corp. 1,025
*60,000 BA Merchant Svcs, Inc.- CL A 1,073
12,800 W.R. Berkley Corp. 650
*40,000 Billing Information Concept 1,150
50,000 Capmac Holdings, Inc. 1,656
*100,000 Concord EFS, Inc. 2,825
30,000 Excel Realty Trust, Inc. 761
30,000 Executive Risk, Inc. 1,110
77,000 Fidelity National Fin'l, Inc. 1,165
30,000 Frontier Insur. Group, Inc. 1,148
30,000 Horace Mann Educators 1,211
*60,000 Imperial Credit Industries 1,260
*35,000 Life USA Holding, Inc. 420
30,000 National Data Corp. 1,305
*40,000 Oxford Resources
Corp. - CL A 1,235
45,000 Penncorp Financial Grp. 1,620
40,500 United Cos. Financial Corp. 1,078
30,000 Washington Federal, Inc. 795
-------
24,553
-------
INDUSTRIAL RELATED - 26.6% $56,196
ENERGY RESOURCES & SERVICES - 7.7%
*10,000 Atwood Oceanics, Inc. $ 635
*30,000 B.J. Services Co. 1,530
*100,000 Belco Oil & Gas Corp. 2,738
*50,000 Ensco Int'l 2,425
*50,000 Houston Exploration Co 875
*50,000 Newpark Resources, Inc. 1,863
*30,000 Seitel, Inc. 1,200
*100,000 Titan Exploration, Inc. 1,200
60,000 Transocean Offshore, Inc. 3,757
-------
16,223
-------
HOUSING - 0.7%
*25,000 American Homestar Corp. 569
43,000 T.J. International, Inc. 1,000
-------
1,569
-------
INDUSTRIAL & ELECTRONICS PRODUCTS - 12.3%
10,000 AAR Corporation 303
*40,000 AFC Cable Systems, Inc. 955
*60,000 Advanced Lighting Tech.,
Inc. 1,455
*65,000 BE Aerospace, Inc. 1,763
*25,000 Berg Electronics Corp. 734
10,000 Chart Industires, Inc. 171
*43,300 Checkpoint Systems, Inc. 1,072
*25,000 Coherent, Inc. 1,056
45,500 DT Industries, Inc. 1,593
*87,000 Foamex Int'l, Inc. 1,436
*45,000 Genrad, Inc. 1,046
20,000 Harman Int'l Industries, Inc. 1,113
50,000 Harnischfeger Industries,
Inc. 2,406
*27,200 JPM Company 476
*25,000 Lecroy Corp. 938
*40,000 Mohawk Industries 880
*50,000 O'Sullivan Industries
Holdings, Inc. 700
20,000 Precision Castparts Corp. 992
*50,000 Quad Systems Corp. 500
80,000 Spartech Corp. 890
*70,000 U.S. Filter Corp. 2,222
*50,000 Waters Corp. 1,519
*25,000 Wolverine Tube, Inc. 881
*40,000 Wyman-Gordon Co. 890
-------
25,991
-------
</TABLE>
Page 11
<PAGE>
SCHEDULE OF INVESTMENTS
December 31, 1996
MONETTA FUND (CONTINUED)
<TABLE>
<CAPTION>
Quoted
Shares or Market
Principal Value
Amount (In Thousands)
- --------- --------------
<C> <S> <C>
MINING/MINERAL RESOURCES - 2.7%
*75,000 Oregon Metallurgical Corp. 2,419
*100,000 Titanium Metals Corp. 3,287
-------
5,706
-------
TRANSPORTATION - 2.0%
35,000 Expeditors International of
Washington, Inc. 805
*50,000 Railtex, Inc. 1,263
*45,000 Swift Transportation 1,058
40,000 US Freightways Corp. 1,097
-------
4,223
-------
MISCELLANEOUS - 1.2%
*55,000 Alternative Resources Corp. 955
*40,000 Nichols Research Corp. 1,020
*18,500 Rental Service Corp. 509
-------
2,484
-------
MEDICAL RELATED - 10.3% $21,829
MEDICAL SUPPLIES - 1.6%
50,000 Ballard Medical Products $ 931
50,000 Fisher Scientific Int'l 2,356
-------
3,287
MEDICAL TECHNOLOGY - 1.3% -------
50,000 ADAC Laboratories 1,194
*20,000 Cohr, Inc. 540
*45,000 VISX, Inc. 995
-------
2,729
-------
PHARMACEUTICALS - 4.7%
*45,000 Applied Analytical Ind., Inc. 860
*100,000 Capstone Pharmacy
Services, Inc. 1,137
*75,000 ChiRex, Inc. 900
*45,000 Dura Pharmaceuticals, Inc. 2,149
30,000 Jones Medical Ind., Inc. 1,099
*21,000 Medicis Pharmaceutical
Corp. - CL A 924
*40,000 Parexel Int'l Corp. 2,065
*20,000 Watson Pharmaceuticals,
Inc. 899
-------
10,033
-------
PHYSICIAN SERVICES - 2.7%
*50,000 American Medical
Response, Inc. 1,625
*21,100 Medquist, Inc. 522
*70,000 Phycor, Inc. 1,987
*30,000 Renal Treatment Cntrs, Inc. 765
*150,000 Sheridan Healthcare, Inc. 881
-------
5,780
-------
TECHNOLOGY RELATED - 12.2% $25,757
COMPUTER SOFTWARE & SYSTEMS - 1.6%
*30,000 Acxiom Corp. $ 720
24,300 Logicon, Inc. 887
*45,400 Smallworldwide PLC 539
*50,000 Technology Modeling Assc.,
Inc. 663
20,000 Unison Software Inc. 535
-------
3,344
-------
COMPUTER & OFFICE EQUIPMENT - 2.9%
*30,000 Black Box Corp. 1,237
*75,000 Comverse Technology, Inc. 2,836
*20,000 Encad, Inc. 825
*50,000 Vanstar Corp. 1,225
-------
6,123
-------
SEMICONDUCTORS - 1.5%
*30,000 Microchip Technology, Inc. 1,526
*50,000 Quickturn Design Systems,
Inc. 1,025
*40,000 S3, Inc. 650
-------
3,201
-------
</TABLE>
Page 12
<PAGE>
SCHEDULE OF INVESTMENTS
December 31, 1996
- ------------------------------------------------------
MONETTA FUND (CONTINUED)
Quoted
Shares or Market
Principal Value
Amount (In Thousands)
- --------- --------------
TELECOMMUNICATIONS & EQUIPMENT - 6.2%
* 20,000 Boston Technology, Inc. 575
*180,000 Brightpoint, Inc. 5,355
* 62,000 Electromagnetic Sciences,
Inc. 1,194
* 75,000 Intermedia Communications,
Inc. 1,931
* 24,400 LCC Int'l, Inc. 451
*100,000 P-Com, Inc. 2,963
* 80,000 RMH Teleservices, Inc. 620
-------
13,089
-------
TOTAL COMMON STOCKS
(COST $163,187)(A) 181,314
-------
VARIABLE DEMAND NOTES - 1.5%
3,054,000 Eli Lilly - 5.33% 3,054
-------
COMMERCIAL PAPER - 15.3%
3,000,000 Ford Motor Credit 3,000
5.600% Due 01/02/97
7,000,000 Ford Motor Credit 6,998
5.500% Due 01/03/97
4,000,000 Merrill Lynch 3,996
6.150% Due 01/07/97
6,000,000 United Parcel Service 5,992
5.850% Due 01/09/97
4,000,000 Merrill Lynch 3,994
5.550% Due 01/10/97
2,500,000 Snap on Tool
5.750% Due 01/13/97 2,495
6,000,000 Manufacturers Inv. Corp.
5.900% Due 01/15/97 5,986
-------
TOTAL COMMERCIAL PAPER 32,461
-------
TOTAL SHORT-TERM INVESTMENTS 35,515
-------
TOTAL INVESTMENTS - 102.5%
(COST $198,702)(A) 216,829
-------
OTHER ASSETS LESS LIABILITIES - (2.5)% (5,312)
-------
NET ASSETS - 100% $211,517
=======
(a) Cost is identical for book and tax purposes; the aggregate gross unrealized
appreciation is $25,292 and aggregate gross unrealized depreciation is $7,165,
resulting in net unrealized appreciation of $18,127 (in thousands).
See accompanying notes to financial statements
* Non-income producing security
Page 13
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
December 31, 1996
- --------------------------------------------------------------------------------
MONETTA MID-CAP EQUITY FUND
Quoted
Shares or Market
Principal Value
Amount (In Thousands)
- --------- --------------
COMMON STOCKS - 96.5%
CONSUMER RELATED - 22.4% $3,877
FOOD PROCESSING - 2.2%
<C> <S> <C>
*10,000 Smithfield Foods, Inc. $ 380
------
RECREATION/ENTERTAINMENT - 1.5%
14,000 International Game Tech. 256
------
RESTAURANTS/LODGING - 1.6%
*6,000 Doubletree Corp. 270
------
RETAIL MANUFACTURERS & DISTRIBUTION - 3.9%
12,000 Avery-Dennison Corp. 425
8,000 Newell Company 252
------
677
------
RETAIL TRADES - 8.3%
7,000 CVS Corporation 290
*12,600 Domnick's Supermarkets, Inc. 274
*6,000 Nine West Group, Inc. 278
*8,000 Safeway, Inc. 342
5,500 T J X Companies, Inc. 260
------
1,444
------
MISCELLANEOUS - 4.9%
*3,300 Computer Sciences Corp. 271
10,000 Reynolds & Reynolds - CL A 260
*10,000 U.S.A. Waste Services, Inc. 319
------
850
------
FINANCIAL RELATED - 22.1% $3,832
FINANCIAL SERVICES - 22.1%
4,300 Aon Corp. 267
4,400 Associated First Cap. Corp. 194
*10,000 BA Merchant Svcs., Inc.- CL A 179
5,000 Compass Bancshares, Inc. 199
3,500 Crestar Financial Corp. 260
*20,000 Dime Bancorp, Inc. 295
4,050 Fifth Third Bancorp. 254
12,000 First Tennessee National 450
10,000 Green Tree Financial Corp. 386
10,000 Greenpoint Financial Corp. 474
10,000 PHH Corp. 430
10,000 Roosevelt Fin'l Group, Inc. 210
6,000 Union Planters Corp. 234
------
3,832
------
INDUSTRIAL RELATED - 37.3% $6,461
ENERGY RESOURCES & SERVICES - 6.5%
*1,600 Belco Oil & Gas Corp. 44
*6,000 Ensco Int'l 291
6,000 Kerr McGee Corp. 432
8,000 Tidewater, Inc. 362
------
1,129
------
HOUSING - 1.6%
12,000 Oakwood Homes 275
------
INDUSTRIAL & ELECTRONICS PRODUCTS - 24.5%
18,000 AMETEK, Inc. 401
10,000 Applied Power, Inc. - CL A 396
9,000 DT Industries, Inc. 315
</TABLE>
Page 14
<PAGE>
<TABLE>
<CAPTION>
Schedule of Investments
December 31, 1996
- --------------------------------------------------------------------------------
MONETTA MID-CAP EQUITY
FUND (CONTINUED)
Quoted
Shares or Market
Principal Value
Amount (In Thousands)
- --------- --------------
<S> <C>
10,000 Danaher Corp. 466
*14,000 Gulfstream Aerospace Corp 339
7,000 Harnischfeger Industries, Inc. 337
2,625 Molex, Inc. 103
8,000 Precision Castparts Corp. 397
6,000 Sigma-Aldrich Corp. 375
7,000 Sundstrand Corp. 297
14,400 Tri Mas Corp. 344
8,400 York Int'l Corp. 469
-------
4,239
-------
Transportation - 3.2%
*18,000 Knight Transportation, Inc. 342
*9,000 Swift Transportation Co., Inc. 212
-------
554
-------
Miscellaneous - 1.5%
5,000 Tyco Int'l, Ltd. 264
-------
Medical Related - 6.7% $ 1,158
Medical Supplies - 1.8%
6,800 Fisher Scientific Int'l $ 320
-------
Pharmaceuticals - 3.1%
*5,500 Dura Pharmaceuticals, Inc. 263
*8,000 Elan Corp PLC-ADR 266
-------
529
-------
Physician Services - 1.8%
*8,000 HEALTHSOUTH Corp. 309
-------
Technology Related - 8.0% $ 1,395
Computer Software & Systems - 4.4%
*4,000 Ceridian Corp. $ 162
*5,000 Parametric Technology Corp. 257
*10,000 Sterling Commerce, Inc. 352
-------
771
-------
Telecommunications & Equipment - 3.6%
*12,800 ADC Telecommunications, Inc. 398
*6,000 Tellabs, Inc. 226
-------
624
-------
Total Common Stocks
(Cost $13,540)(a) 16,723
-------
Variable Demand Notes - 3.6%
619,900 Sara Lee - 5.49% 620
-------
Total Investments - 100.1%
(Cost $14,160)(a) 17,343
-------
Other Assets Less Liabilities - (0.1)% (5)
-------
Net Assets - 100% $17,338
=======
</TABLE>
(a) Cost is identical for book and tax purposes; the aggregate gross unrealized
appreciation is $3,268 and aggregate gross unrealized depreciation is $85,
resulting in net unrealized appreciation of $3,183 (in thousands).
See accompanying notes to financial statements
* Non-income producing security
Page 15
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
December 31, 1996
- --------------------------------------------------------------------------
MONETTA LARGE-CAP EQUITY FUND
Quoted
Shares or Market
Principal Value
Amount (In Thousands)
- --------- --------------
<S> <C>
COMMON STOCKS - 87.1%
Consumer Related - 24.3% $558
Food Processing - 1.9%
600 Ralston-Ralston Purina Grp. $ 44
----
Retail Manufacturers & Distribution - 2.2%
1,000 Estee Lauder Co. - CL A 51
----
Retail Trades - 12.7%
1,200 CVS Corporation 50
1,700 Gap, Inc. 51
1,100 Home Depot, Inc. 55
1,200 J.C. Penney Co., Inc. 58
*600 Safeway, Inc. 26
1,100 Sears Roebuck, & Co. 51
----
291
----
Miscellaneous - 7.5%
1,400 Alco Standard Corp. 59
*600 Computer Sciences Corp. 49
*2,000 USA Waste Services, Inc. 64
----
172
----
Financial Related - 13.5% $310
Financial Services - 13.5%
1,500 Associated First Cap. Corp. $ 66
600 Fifth Third Bancorp 38
1,600 First Data Corp. 59
800 Fleet Financial Group 40
600 Household Int'l Inc. 55
1,200 Norwest Corp. 52
----
310
----
Industrial Related - 23.8% $543
Chemicals - 2.4%
1,400 Monsanto Co. $ 54
----
Energy Resources & Services - 8.9%
1,000 Coastal Corp. 49
500 Schlumberger, Ltd. 50
700 Transocean Offshore, Inc. 44
2,100 Union Pacific Resources 61
----
204
----
Industrial & Electronics Products - 2.1%
600 Illinois Tool Works, Inc. 48
----
Transportation - 5.4%
600 Boeing Co. 64
900 United Technologies Corp. 59
----
123
----
Miscellaneous - 5.0%
900 Fluor Corp. 56
700 Minnesota Mining & Mfg, Co. 58
----
114
----
Medical Related - 8.5% $194
Pharmaceuticals - 6.8%
900 Eli Lilly & Co. $ 65
800 Johnson & Johnson Co. 40
600 Pfizer, Inc. 50
----
155
----
Physician Services - 1.7%
*1,000 HEALTHSOUTH Corp. 39
----
Technology Related - 17.0% $388
Computer Software & Systems - 4.2%
950 Computer Associates Int'l, Inc. $ 47
*600 Microsoft Corp. 50
----
97
----
</TABLE>
Page 16
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
December 31, 1996
- ------------------------------------------------------------------------------
MONETTA LARGE-CAP EQUITY FUND (CONTINUED)
Quoted
Shares or Market
Principal Value
Amount (In Thousands)
- --------- --------------
<S> <C>
COMPUTER & OFFICE EQUIPMENT - 5.2%
*1,800 EMC Corporation 60
1,100 Xerox Corp. 58
--------------
118
--------------
SEMICONDUCTORS - 3.5%
600 Intel Corp. 79
--------------
TELECOMMUNICATIONS & EQUIPMENT - 4.1%
800 Northern Telecom, Ltd. 49
*1,200 Tellabs, Inc. 45
--------------
94
--------------
TOTAL COMMON STOCKS
(COST $1,783)(a) 1,993
--------------
VARIABLE DEMAND NOTES - 15.3%
61,700 Eli Lilly-5.33% 62
80,500 Johnson Controls-5.53% 80
42,600 Pitney Bowes-5.51% 43
95,600 Sara Lee-5.49% 96
69,400 Southwestern Bell-5.49% 69
--------------
TOTAL VARIABLE DEMAND NOTES 350
--------------
TOTAL INVESTMENTS - 102.4%
(COST $2,133)(a) 2,343
--------------
OTHER ASSETS LESS LIABILITIES - (2.4)% (55)
--------------
NET ASSETS - 100% $ 2,288
==============
</TABLE>
MONETTA BALANCED FUND
<TABLE>
<CAPTION>
Quoted
Shares or Market
Principal Value
Amount (In Thousands)
- --------- --------------
<S> <C>
COMMON STOCKS - 61.0%
CONSUMER RELATED - 17.3% $405
BROADCASTING/CABLE TV - 0.7%
*400 SFX Broadcasting, Inc. - CL A $ 12
*100 Univision Communications 4
--------------
16
--------------
FOOD PROCESSING - 1.2%
400 Ralston-Ralston Purina Grp. 29
--------------
RECREATION/ENTERTAINMENT - 1.0%
1,300 International Game Tech. 24
--------------
RESTAURANTS/LODGING - 1.2%
*600 Doubletree Corp. 27
--------------
RETAIL MANUFACTURERS & DISTRIBUTION - 3.5%
400 Avery-Dennison Corp. 14
400 Estee Lauder Cos - CL A 20
*1,500 Hirsch Int'l Corp - CL A 28
*1,400 Quaker Fabric Corp. 20
--------------
82
--------------
RETAIL TRADES - 4.9%
*1,200 AnnTaylor Stores Corp. 21
600 CVS Corporation 25
*1,100 Domnick's Supermarkets, Inc. 24
900 Gap, Inc. 27
200 Home Depot, Inc. 10
*200 Safeway, Inc. 8
--------------
115
--------------
</TABLE>
(a) Cost is identical for book and tax purposes; the aggregate gross unrealized
appreciation is $240 and aggregate gross unrealized depreciation is $30,
resulting in net unrealized appreciation of $210 (in thousands).
See accompanying notes to financial statements
* Non-income producing security
Page 17
<PAGE>
SCHEDULE OF INVESTMENTS
December 31, 1996
- -----------------------------------------------------------------------------
MONETTA BALANCED FUND (CONTINUED)
<TABLE>
<CAPTION>
Quoted
Shares or Market
Principal Value
Amount (In Thousands)
- --------- --------------
<S> <C>
MISCELLANEOUS - 4.8%
600 Alco Standard Corp. 25
*300 Computer Sciences, Inc. 25
*1,400 May & Speh, Inc. 17
1,000 Reynolds & Reynolds - CL A 26
*600 U.S.A. Waste Service 19
--------------
112
--------------
FINANCIAL RELATED - 6.3% $147
FINANCIAL SERVICES - 6.3%
*400 Associates First Cap. Corp. $ 18
*1,200 BA Merchant Svcs., Inc. - CL A 21
*1,200 Dime Bancorp, Inc. 18
400 First Data Corp. 15
500 Green Tree Financial Corp. 19
600 Greenpoint Financial Corp. 28
300 Household Int'l, Inc. 28
--------------
147
--------------
INDUSTRIAL RELATED - 23.9% $558
CHEMICALS - 1.0%
600 Monsanto Corp. $ 23
--------------
ENERGY RESOURCES & SERVICES - 6.0%
*100 Belco Oil & Gas Corp. 3
*600 Ensco Int'l 29
*600 Newpark Resources, Inc. 22
200 Schlumberger, Ltd. 20
*1,200 Titan Exploration, Inc. 15
400 Transocean Offshore, Inc. 25
900 Union Pacific Resources Grp. 26
--------------
140
--------------
HOUSING - 1.1%
1,100 T.J. International 26
--------------
INDUSTRIAL & ELECTRONICS PRODUCTS - 9.2%
*1,000 AFC Cable Systems, Inc. 24
*1,200 Advanced Lighting Tech. Inc. 29
*800 BE Aerospace, Inc. 22
1,100 Chart Industries, Inc. 19
800 DT Industries, Inc. 28
*1,500 Foamex Int'l, Inc. 25
100 Illinois Tool Works, Inc. 8
500 Sigma Aldrich Corp. 31
200 Sundstrand Corp. 8
400 York Int'l Corp. 22
--------------
216
--------------
TRANSPORTATION - 4.2%
200 Boeing Co. 21
*1,100 Railtex, Inc. 28
*900 Swift Transportation Co., Inc. 21
400 United Technologies Corp. 27
--------------
97
--------------
MISCELLANEOUS - 2.4%
500 Fluor Corp. 31
300 Minnesota Mining & Mfg 25
--------------
56
--------------
MEDICAL RELATED - 6.1% $143
MEDICAL SUPPLIES - 1.2%
600 Fisher Scientific Int'l $ 28
--------------
PHARMACEUTICALS - 3.6%
*500 Dura Pharmaceuticals, Inc. 24
500 Eli Lilly & Co. 36
300 Pfizer, Inc. 25
--------------
85
--------------
PHYSICIAN SERVICES - 1.3%
*1,200 Medquist, Inc. 30
--------------
</TABLE>
Page 18
<PAGE>
SCHEDULE OF INVESTMENTS
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONETTA BALANCED FUND
(CONTINUED)
Quoted
Shares or Market
Principal Value
Amount (In Thousands)
- --------- --------------
<S> <C>
TECHNOLOGY RELATED - 7.4% $173
COMPUTER SOFTWARE & SYSTEMS - 3.2%
*500 Citrix Systems, Inc. $ 19
*300 Microsoft Corp. 25
*900 Sterling Commerce, Inc. 32
-------
76
-------
SEMICONDUCTORS - 1.7%
300 Intel Corp. 39
-------
TELECOMMUNICATIONS - 2.5%
400 Northern Telecom, Ltd. 25
*600 P-Com, Inc. 18
*400 Tellabs, Inc. 15
-------
58
-------
TOTAL COMMON STOCKS
(COST $1,311)(A) 1,426
-------
U.S. TREASURY NOTES - 31.8%
100,000 6.000% Due 05/31/98 100
100,000 6.000% Due 10/15/99 100
100,000 5.750% Due 10/31/00 99
100,000 6.500% Due 08/31/01 101
100,000 6.375% Due 08/15/02 101
100,000 5.750% Due 08/15/03 97
150,000 5.875% Due 02/15/04 146
-------
TOTAL US TREASURY NOTES 744
-------
VARIABLE DEMAND NOTES - 9.1%
110,000 Eli Lilly - 5.33% 110
101,700 Johnson Controls - 5.53% 102
-------
TOTAL VARIABLE DEMAND NOTES 212
-------
TOTAL INVESTMENTS - 101.9%
(COST $2,267)(A) 2,382
-------
OTHER ASSETS LESS LIABILITIES - (1.9)% (46)
-------
NET ASSETS - 100% $ 2,336
=======
</TABLE>
(a) Cost is identical for book and tax purposes; the aggregate gross unrealized
appreciation is $139 and aggregate gross unrealized depreciation is $24,
resulting in net unrealized appreciation of $115 (in thousands).
See accompanying notes to financial statements
* Non-income producing security
Page 19
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
December 31, 1996
- --------------------------------------------------------------------------------
MONETTA INTERMEDIATE
BOND FUND
Quoted
Shares or Market
Principal Value
Amount (In Thousands)
- --------- --------------
<S> <C>
Treasury Notes - 54.0%
300,000 6.250% Due 01/31/97 $ 300
200,000 5.500% Due 04/15/00 197
100,000 7.500% Due 11/15/01 105
200,000 6.375% Due 08/15/02 201
200,000 5.750% Due 08/15/03 194
200,000 5.875% Due 02/15/04 195
200,000 6.500% Due 05/15/05 202
100,000 6.500% Due 08/15/05 101
------
1,495
------
GOVERNMENT AGENCY - 1.5%
40,000 Sheboygan, WI TIF#6
8.25% Due 03/15/03 43
------
CORPORATE BONDS - 31.3%
100,000 Delta Airlines, 7.730%
Due 05/14/97 101
50,000 American Airlines, 8.700%
Due 01/15/98 51
50,000 Salomon, Inc., 9.375%
Due 04/15/98 52
100,000 Chase Manhatten Corp, 8.800%
Due 02/01/00 100
50,000 ADT Operations, 8.250%
Due 08/01/00 52
50,000 American Standard, 9.875%
Due 06/01/01 53
50,000 Dayton-Hudson, 9.750%
Due 07/01/02 57
100,000 IBM Corp., 7.250%
Due 11/01/02 103
100,000 RJR Nabisco, Inc., 8.625%
Due 12/01/02 103
100,000 Webb, Del E., 9.750%
Due 03/01/03 100
100,000 Salomon, Inc., 6.750%
Due 01/15/06 95
------
867
------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 3.5%
100,000 Federal Home Loan Bank,
6.44% Due 11/28/05 96
------
MORTGAGE OBLIGATIONS - .6%
15,302 GNMA, 8.50%,
Due 07/15/21 16
------
DEMAND NOTES - 7.3%
102,200 Eli Lilly - 5.33% 102
100,000 Sara Lee - 5.49% 100
------
202
------
TOTAL INVESTMENTS - 98.2%
(COST $2,732)(A) 2,719
------
OTHER ASSETS LESS LIABILITIES - 1.8% 50
------
NET ASSETS - 100% $2,769
======
</TABLE>
(a) Cost is identical for book and tax purposes; the aggregate gross unrealized
appreciation is $11 and aggregate gross unrealized depreciation is $24,
resulting in net unrealized depreciation of $13 (in thousands).
See accompanying notes to financial statements
Page 20
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
December 31, 1996
MONETTA GOVERNMENT
MONEY MARKET FUND
Shares or
Principal VALUE
Amount (In Thousands)
- --------- --------------
<S> <C>
GOVERNMENT OBLIGATIONS - 34.2%
U.S. TREASURY BILLS - 34.2%
620,000 Due 03/06/97 $ 614
160,000 Due 03/20/97 158
420,000 Due 06/26/97 410
500,000 Due 07/24/97 485
480,000 Due 09/18/97 462
------
2,129
------
GOVERNMENT AGENCIES - 60.5%
FEDERAL FARM CREDIT
DISCOUNT NOTE - 6.9%
430,000 Due 01/27/97 428
------
FEDERAL AGRICULTURE MORTGAGE CORP
DISCOUNT NOTES - 14.6%
760,000 Due 01/02/97 760
150,000 Due 04/01/97 148
------
908
------
FEDERAL HOME LOAN BANK
DISCOUNT NOTE - 1.7%
110,000 Due 04/14/97 108
------
FEDERAL NATIONAL MORTGAGE ASSOCIATION
DISCOUNT NOTES - 25.2%
500,000 DUE 01/09/97 499
335,000 DUE 01/24/97 334
585,000 DUE 02/03/97 582
160,000 DUE 04/03/97 158
------
1,573
------
FEDERAL HOME LOAN MORTGAGE CORP
DISCOUNT NOTES - 12.1%
475,000 Due 01/15/97 474
80,000 Due 02/03/97 80
200,000 Due 02/18/97 199
------
753
------
REPURCHASE AGREEMENT - 6.1%
380,000 Dated 12/31/96, 3.50%
Due 01/02/97, with
Firstar Bank of Wisconsin,
collateralized by U.S.
Treasury Notes
(cost: $380,000) 380
------
TOTAL INVESTMENTS - 100.8%(A) 6,279
------
OTHER ASSETS LESS LIABILITIES - (0.8)% (47)
------
NET ASSETS - 100% $6,232
======
</TABLE>
(a) Cost is identical for book and tax purposes.
See accompanying notes to financial statements
Page 21
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1996
(In Thousands)
- ----------------------------------------------------------------------------------------------------------------------------------
MONETTA MID-CAP EQUITY
FUND FUND
-------------------------------------------------------
<S> <C> <C>
ASSETS:
Investments at market value (cost: $198,702; $14,160; $2,133;
$2,267; $2,732; $6,279)(Note 1) $216,829 $17,343
Cash 0 1
Interest and dividends receivable 101 14
Receivable for securities sold 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Total Assets 216,930 17,358
LIABILITIES:
Payables:
Custodial bank 455 0
Investment advisory fees (Note 2) 184 14
Investments purchased 4,606 0
Accrued expenses 168 6
- ----------------------------------------------------------------------------------------------------------------------------------
Total liabilities 5,413 20
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $211,517 $17,338
- ----------------------------------------------------------------------------------------------------------------------------------
ANALYSIS OF NET ASSETS:
Paid in capital (b) 196,446 13,986
Accumulated undistributed net investment income 0 1
Accumulated undistributed net realized gain (loss) (3,056) 168
Net unrealized appreciation (depreciation) on investments 18,127 3,183
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets $211,517 $17,338
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per share
(13,351.9 shares of capital stock and 1,170.4; 186.5; 184.8; 271.3; 6,232.2
shares of beneficial interest issued and outstanding respectively) $15.84 $14.81
- ----------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements
(a) Rounds to less than $1,000
(b) Amount for Monetta Fund represents $134 of $0.01 par value and $196,312 of
additional paid in capital, 100 million shares are authorized. Each fund
of Monetta Trust has an unlimited number of no par value shares of beneficial
interest authorized.
</TABLE>
Page 22
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
LARGE-CAP EQUITY BALANCED INTERMEDIATE BOND GOVERNMENT MONEY
FUND FUND FUND MARKET FUND
==========================================================================
<S> <C> <C> <C> <C>
$2,343 $2,382 $2,719 $6,279
(a) 21 0 0
4 15 53 (a)
3 7 2 0
- --------------------------------------------------------------------------
2,350 2,425 2,774 6,279
0 0 3 44
2 1 1 0
59 87 0 0
1 1 1 3
- --------------------------------------------------------------------------
62 89 5 47
- --------------------------------------------------------------------------
$2,288 $2,336 $2,769 $6,232
- --------------------------------------------------------------------------
2,066 2,210 2,786 6,232
(a) (a) (a) 0
12 11 (4) 0
210 115 (13) 0
- --------------------------------------------------------------------------
$2,288 $2,336 $2,769 $6,232
- --------------------------------------------------------------------------
$12.27 $12.64 $10.21 $1.00
- --------------------------------------------------------------------------
</TABLE>
Page 23
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
Year Ended December 31, 1996
(In Thousands)
- --------------------------------------------------------------------------------------------------------
Monetta Mid-Cap Equity
Fund Fund
--------------------------------
<S> <C> <C>
INVESTMENT INCOME AND EXPENSES:
Investment income:
Interest $2,168 $107
Dividend 330 144
Miscellaneous income 77 1
- --------------------------------------------------------------------------------------------------------
Total investment income 2,575 252
- --------------------------------------------------------------------------------------------------------
Expenses:
Investment advisory fee (Note 2) 2,946 162
Custodial fees and bank cash management fee 84 11
Transfer and shareholder servicing agent fee 1,034 27
Other 0 (a)
- --------------------------------------------------------------------------------------------------------
Total expenses 4,064 200
Expenses waived and reimbursed 0 0
- --------------------------------------------------------------------------------------------------------
Expenses net of waived and reimbursed expenses 4,064 200
- --------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) (1,489) 52
- --------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gains (loss) on investments:
Proceeds from sales 622,713 13,321
Cost of securities sold 624,708 12,898
- --------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments (1,995) 423
- --------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) on investments:
Beginning of period 9,405 293
End of period 18,127 3,183
- --------------------------------------------------------------------------------------------------------
Net change in net unrealized appreciation/depreciation on
investments during the period 8,722 2,890
- --------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 6,727 3,313
- --------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $5,238 $3,365
========================================================================================================
</TABLE>
See accompanying notes to financial statements
(a) Rounds to less than $1,000
Page 24
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
LARGE-CAP EQUITY BALANCED INTERMEDIATE BOND GOVERNMENT MONEY
FUND FUND FUND MARKET FUND
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
$12 $20 $206 $310
14 4 2 0
(a) 0 (a) 0
- -------------------------------------------------------------------------------
26 24 208 310
- -------------------------------------------------------------------------------
14 5 20 21
4 4 4 3
3 2 4 15
(a) (a) 0 0
- -------------------------------------------------------------------------------
21 11 28 39
0 0 10 21
- -------------------------------------------------------------------------------
21 11 18 18
- -------------------------------------------------------------------------------
5 13 190 292
- -------------------------------------------------------------------------------
1,876 879 1,257 35,411
1,716 803 1,261 35,411
- -------------------------------------------------------------------------------
160 76 (4) 0
- -------------------------------------------------------------------------------
63 21 (9) 0
210 115 (13) 0
- -------------------------------------------------------------------------------
147 94 (4) 0
- -------------------------------------------------------------------------------
307 170 (8) 0
- -------------------------------------------------------------------------------
$312 $183 $182 $292
===============================================================================
</TABLE>
Page 25
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended December 31, 1996 and Period Ended December 31, 1995
(In Thousands)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
MONETTA MID-CAP EQUITY
FUND FUND
--------------------------- --------------------------
1996 1995 1996 1995
-------------------------------------------------------
<S> <C> <C> <C> <C>
From investment activities:
Operations:
Net investment income (loss) $ (1,489) $ 647 $ 52 $ 59
Net realized gain (loss) on investments (1,995) 61,662 423 2,484
Net change in net unrealized appreciation
(depreciation) on investments during the period 8,722 26,918 2,890 316
- ------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations 5,238 89,227 3,365 2,859
Distribution from net investment income 0 (647) (52) (59)
Distribution in excess of net investment income 0 (59,578) 0 (2,897)
Distribution from net realized gains on securities 0 0 0 (19)
- ------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from investment activities 5,238 29,002 3,313 (116)
========================================================================================================================
From capital transactions (Note 3):
Proceeds from shares sold 19,940 22,913 5,820 2,203
Net asset value of shares issued through dividend
reinvestment (a) 59,595 50 2,930
Cost of shares repurchased (176,381) (113,702) (6,061) (2,538)
- ------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions (156,441) (31,194) (191) 2,595
========================================================================================================================
Total increase (decrease) in net assets (151,203) (2,192) 3,122 2,479
- ------------------------------------------------------------------------------------------------------------------------
Net assets at beginning of period 362,720 364,912 14,216 11,737
- ------------------------------------------------------------------------------------------------------------------------
Net assets at end of period* $ 211,517 $ 362,720 $17,338 $14,216
========================================================================================================================
</TABLE>
See accompanying notes to financial statements
(a) Rounds to less than $1,000
* Including undistributed net investment income of $1 thousand for the Mid-Cap
Equity Fund at December 31, 1996.
Page 26
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
Large-Cap Equity Balanced Intermediate Government Money
Fund Fund Bond Fund Market Fund
- ------------------- ----------------- -------------- ------------------
Period Period
Ending Ending
1996 12/31/95 1996 12/31/95 1996 1995 1996 1995
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 5 $ (a) $ 13 $ (a) $ 190 $ 213 $ 292 $ 205
160 (8) 76 (4) (4) 83 0 0
147 63 94 21 (4) 156 0 0
- -----------------------------------------------------------------------------
312 55 183 17 182 452 292 205
(4) (a) (13) (a) (190) (215) (292) (205)
0 0 0 (a) (17) (38) 0 0
(141) 0 (61) 0 0 0 0 0
- -----------------------------------------------------------------------------
167 55 109 17 (25) 199 0 0
=============================================================================
1,496 1,019 1,941 445 653 701 15,949 4,068
144 (a) 72 (a) 175 229 268 196
(591) (2) (196) (52) (1,623) (550) (14,378) (3,186)
- -----------------------------------------------------------------------------
1,049 1,017 1,817 393 (795) 380 1,839 1,078
=============================================================================
1,216 1,072 1,926 410 (820) 579 1,839 1,078
- -----------------------------------------------------------------------------
1,072 0 410 0 3,589 3,010 4,393 3,315
- -----------------------------------------------------------------------------
$2,288 $1,072 $2,336 $410 $2,769 $3,589 $6,232 $4,393
=============================================================================
</TABLE>
Page 27
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES:
Monetta Fund, Inc. ("Monetta Fund") is an open-end diversified management
investment company registered under the Investment Company Act of 1940, as
amended. The primary objective of Monetta Fund is capital appreciation by
investing primarily in equity securities believed to have growth potential. The
Fund generally invests in companies with a market capitalization range of $50
million to $1 billion.
Monetta Trust ("the Trust") is an open-end diversified management investment
company registered under the Investment Company Act of 1940, as amended. The
following funds are series of the Trust:
Mid-Cap Equity Fund. The primary objective of this fund is long-term capital
growth by investing in common stocks believed to have above average growth
potential. The Fund typically invests in companies within a market
capitalization range of $1 billion to $5 billion.
Large-Cap Equity Fund. The primary objective of this fund is to seek long-term
capital growth by investing in common stocks believed to have above average
growth potential. The Fund typically invests in companies with market
capitalization of greater than $5 billion.
Balanced Fund. The objective of this fund is to seek a favorable total rate of
return through capital appreciation and current income consistent with
preservation of capital, derived rom investing in a portfolio of equity and
fixed income securities.
Intermediate Bond Fund. The objective of this fund is to seek high current
income consistent with the preservation of capital by investing primarily in
marketable debt securities.
Government Money Market Fund. The primary objective of this fund is to seek
maximum current income consistent with safety of capital and maintenance of
liquidity. The Fund invests in U.S. Government securities maturing in thirteen
months or less from the date of purchase and repurchase agreements for U.S.
Government securities. U.S. Government securities include securities issued or
guaranteed by the U.S. Government or by its agencies or instrumentalities.
Monetta Family of Funds is comprised of Monetta Fund, Inc. and each of the
Trust Series and are collectively referred to as the "Funds". The following is a
summary of significant accounting policies followed by the Funds in the
preparation of their financial statements in accordance with generally accepted
accounting principles:
Page 28
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
- --------------------------------------------------------------------------------
(a) Securities Valuation
Investments are stated at market value based on the last reported sale price on
national securities exchanges, or the NASDAQ Market, on the last business day
of the period. Listed securities and securities traded on the over-the-counter
markets that did not trade on the last business day are valued at the mean
between the quoted bid and asked prices. Short-term securities, including all
securities held by the Government Money Market Fund, are stated at amortized
cost, which is substantially equivalent to market value.
(b) Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires the Funds' management to make estimates and
assumptions that affect reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the results of operations during the reporting period. Actual
results could differ from those estimates.
(c) Federal Income Taxes
It is each Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute
substantially all of its taxable income to its shareholders. Accordingly, no
provision for federal income taxes is required.
The Funds intend to utilize provisions of the federal income tax laws which
allow them to carry a realized capital loss forward for eight years following
the year of the loss and offset such losses against any future realized capital
gains. At December 31, 1996, Monetta Fund and the Intermediate Bond Fund had
accumulated capital loss carry forward for tax purposes of $2,873,526 and $3,497
respectively, which will expire on December 31, 2004. Net realized losses of the
funds may differ for financial statements and tax purposes because of the
deferral of post October 31 losses and wash sale losses for tax purposes.
(d) General
Security transactions are accounted for on a trade date basis. Daily realized
gains and losses from security transactions are reported on the first-in, first-
out cost basis. Interest income is recorded daily on the accrual basis and
dividend income on the ex-dividend date. Bond Discount/Premium is amortized on a
straight line basis over the life of each applicable security.
(e) Distributions of incomes and gains
Distributions to shareholders are recorded by the Funds (except for the
Government Money Market Fund) on the ex-dividend date. The Government Money
Market Fund declares dividends daily and automatically reinvests such dividends
daily. Due to inherent differences in the characterization of short-tern capital
gains under generally accepted accounting principles and for federal income tax
purposes, the amount of distributable net investment income for book and federal
income tax purposes may differ. These differences are permanent in nature, and
may result in distributions in excess of book basis net investment income for
certain periods.
Page 29
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
- -------------------------------------------------------------------------------
For the Monetta Fund, a permanent book and tax differences of $1,489,412 due to
the net operating loss for 1996 has been reclassified from accumulated
undistributed net investment income to paid in capital.
For the year ended December 31, 1996, Monetta Trust Large-Cap Equity Fund paid
long-term capital gains of $5,155.
2. RELATED PARTIES:
Robert S. Bacarella is an officer and director of the Funds and also an
officer, director and majority shareholder of the investment advisor, Monetta
Financial Services, Inc. "Advisor". For twelve months ended December 31, 1996,
remuneration required to be paid to all interested director or trustee has been
absorbed by the Advisor. Fees paid to outside Directors or Trustees have been
absorbed by the respective funds.
Each Fund pays an investment advisory fee to the Advisor, based on that
Fund's individual net assets, payable monthly at the annual rate of 1% for
Monetta Fund, Mid-Cap and Large-Cap Equity Fund; 0.65% for Balanced Fund; 0.60%
for Intermediate Bond Fund and 0.35% for the Government Money Market Fund. From
these fees the Advisor pays all the Fund's ordinary operating expenses other
than the advisory fee and charges of the Fund's custodian and transfer agent.
Investment advisory fees waived through December 31, 1996, for the Intermediate
Bond Fund were $9,915 of total fees of $19,829. Investment advisory fees waived
through December 31, 1996 for the Government Money Market Fund were $20,637.
Additionally, brokerage commissions of $32,700 were paid by the Monetta Fund to
Monetta Brokerage, Inc. during the twelve months ended December 31, 1996.
<TABLE>
<CAPTION>
Shares Owned
by the Advisor
----------------------------
Shares % of Fund
------ ---------
<S> <C> <C>
Mid-Cap Fund 7,368 0.6%
Large-Cap Fund 11,048 5.9%
Balanced Fund 55,061 29.8%
Intermediate Bond Fund 74,014 27.3%
Government Money Market Fund 515,735 8.3%
</TABLE>
Page 30
<PAGE>
<TABLE>
<CAPTION>
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
- ----------------------------------------------------------------------------------------------------------------------------------
3. CAPITAL STOCK AND SHARE UNITS:
There are 100,000,000 shares of $0.01 par value capital stock authorized
for Monetta Fund. There is an unlimited number of no par value shares of
beneficial interest authorized for each series of the Trust.
- -----------------------------------------------------------------------------------------------------------------------------------
Monetta Mid-Cap Large-Cap Balanced Intermediate Government
(In Thousands) Fund Equity Fund Equity Fund Fund Bond Fund Money Market
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1995 Beginning shares 25,140 962 -- -- 313 3,315
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold 1,400 161 101 44 69 4,068
Shares issued upon dividend reinvestment 3,779 249 (a) (a) 22 196
Shares redeemed (7,054) (184) (a) (5) (54) (3,186)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in shares outstanding (1,875) 226 101 39 37 1,078
- -----------------------------------------------------------------------------------------------------------------------------------
1996 Beginning shares 23,265 1,188 101 39 350 4,393
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold 1,270 436 123 157 64 15,949
Shares issued upon dividend reinvestment 0 3 12 6 17 268
Shares redeemed (11,183) (457) (49) (17) (160) (14,378)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in shares outstanding (9,913) (18) 86 146 (79) 1,839
- -----------------------------------------------------------------------------------------------------------------------------------
Ending shares 13,352 1,170 187 185 271 6,232
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Rounds to less than 1,000 shares
4. PURCHASES AND SALES OF INVESTMENT SECURITIES:
The cost of purchases and proceeds from sales of securities for the twelve
months ended December 31, 1996, excluding short-term securities were:
Monetta Fund $520,227,594 and $622,713,282; Mid-Cap Fund $13,763,756 and
$13,320,927; Large-Cap Fund $2,598,595 and $1,876,618; Balanced Fund
$2,573,763 and $878,878; and Intermediate Bond Fund $810,500 and
$1,257,667. The cost of purchases and proceeds from the sales of government
securities included in the preceding numbers are as follows: Balanced Fund
$846,788 and $228,640; and Intermediate Bond Fund $500,500 and $605,641.
Page 31
<PAGE>
<TABLE>
<CAPTION>
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
- -------------------------------------------------------------------------------------------------------------------
5. FINANCIAL HIGHLIGHTS:
MONETTA FUND
Financial highlights for Monetta Fund for a share of capital stock outstanding throughout the period is
presented below:
1996 1995 1994 1993 1992
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period $15.591 $14.515 $15.539 $15.992 $15.731
- -------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.079) .029 (.026) .028 .006
Net realized and unrealized gain (loss)
on investments .330 4.075 (.938) .105 .855
- -------------------------------------------------------------------------------------------------------------------
Total from investment operations: .251 4.104 (.964) .077 .861
Less:
Distributions from net investment income 0 (.028) 0 0 (.006)
Distributions in excess of net investment
income 0 (3.000) (.060) (.475) (.594)
Distributions from net realized gains on
securities 0 0 0 (.055) 0
- -------------------------------------------------------------------------------------------------------------------
Total distributions 0 (3.028) (.060) (.530) (.600)
- -------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $15.842 $15.591 $14.515 $15.539 $15.992
- -------------------------------------------------------------------------------------------------------------------
Total return 1.60% 28.02% (6.21)% 0.49% 5.49%
Ratio to average net assets:
Expenses* 1.38% 1.36% 1.35% 1.38% 1.45%
Net investment income* (.51)% .18% (.15)% (.19)% .16%
Avg. comm. paid - per equity trade(a) $ .063 --- --- --- ---
Portfolio turnover 204.8% 272.0% 191.3% 226.9% 126.6%
Net assets (in millions) $ 211.5 $ 362.7 $ 364.9 $ 524.3 $ 408.0
===================================================================================================================
</TABLE>
* If certain expenses had not been assumed by the investment advisor in 1989,
the ratios of expenses and net investment income to average net assets would
have been 1.83% of 1.92%, respectively.
(a) Represents the average commissions paid on equity transactions entered into
during the period where commissions were applicable. This disclosure is not
applicable for periods prior to 1996.
The per share ratios are calculated using the weighted average number of shares
outstanding during the period.
Page 32
<PAGE>
<TABLE>
<CAPTION>
1991 1990 1989 1988 1987
- ----------------------------------------------------------
<S> <C> <C> <C> <C>
$10.963 $10.441 $ 9.933 $ 9.649 $ 9.670
- ----------------------------------------------------------
.081 .103 .219 .106 .113
6.037 1.106 1.274 2.158 .016
- ----------------------------------------------------------
6.118 1.209 1.493 2.264 .129
(.081) (.103) (.219) (.106) (.150)
(1.208) (.584) (.766) 1.874 0
(.061) 0 0 0 0
- ----------------------------------------------------------
(1.350) (.687) (.985) (1.980) (.150)
- ----------------------------------------------------------
$15.731 $10.963 $10.441 $ 9.933 $ 9.649
- ----------------------------------------------------------
55.90% 11.37% 15.20% 23.07% 1.54%
1.42% 1.50% 1.57% 1.50% 2.31%
.93% 1.09% 2.18% .96% 1.33%
-- -- -- -- --
153.8% 206.5% 258.4% 170.4% 333.5%
$57.1 $6.1 $3.5 $2.6 $2.1
- ----------------------------------------------------------
</TABLE>
Page 33
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
- --------------------------------------------------------------------------------
Financial highlights for each Fund of the Trust for a share outstanding
throughout the period is presented below:
<TABLE>
<CAPTION>
MID-CAP EQUITY LARGE-CAP EQUITY
FUND FUND
----------------------------------------- ----------------------------
3/1/93 9/1/95
Through Through
1996 1995 1994 12/31/93 1996 12/31/95
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period* $11.962 $12.199 $12.537 $10.000 $10.571 $10.000
- ------------------------------------------------------------------------------------------------------------------------
Net investment income .044 .059 .071 .006 .023 .005
Net realized and unrealized gain (loss)
on investments 2.852 2.874 .193 3.531 2.928 .570
- ------------------------------------------------------------------------------------------------------------------------
Total from investment operations 2.896 2.933 .264 3.537 2.951 .575
Less:
Distributions from net investment
income (.044) (.050) (.069) (.006) (.023) (.004)
Distributions in excess of net
investment income 0 (2.990) (.533) (.994) (1.188) 0
Distributions from net realized
gains on securities 0 (.130) 0 0 (.045) 0
- ------------------------------------------------------------------------------------------------------------------------
Total distributions (.044) (3.170) (.602) (1.000) (1.256) (.004)
- ------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $14.814 $11.962 $12.199 $12.537 $12.266 $10.571
- ------------------------------------------------------------------------------------------------------------------------
Total return* 24.20% 24.54% 2.17% 35.40% 28.20% 5.74%
Ratios to average net assets:
Expenses** 1.23% 1.25% 1.30% 1.12% 1.51% 0.69%
Net investment income** 0.32% 0.44% 0.57% 0.07% 0.31% 0.05%
Avg. comm paid-per equity trade(a) $ .066 -- -- -- $ .051 --
Portfolio turnover 93.3% 254.4% 210.0% 128.1% 152.7% 38.2%
Net assets (in thousands) $17,338 $14,216 $11,736 $ 9,841 $ 2,288 $ 1,072
========================================================================================================================
</TABLE>
* Ratios and total return for the year of inception are calculated from the
date of inception to the end of the period.
** If certain investment advisory fees and charges of the Trusts custodian and
transfer agent had not been assumed by the investment advisor, the ratios of
expenses and net income to average net assets would be as follows: for the
Intermediate Bond Fund, expenses would have been 0.85%, 0.75%, 0.88% and
0.75% for 1996, 1995, 1994 and 1993 respectively. For the Government Money
Market Fund, expenses would have been 0.67%, 0.59%, 0.66% and 0.69%, for
1996, 1995, 1994 and 1993 respectively. For the Intermediate Bond Fund, net
investment income would have been 5.45%, 5.46%, 5.34% and 3.66% for 1996,
1995, 1994 and 1993 respectively. For the Government Money Market Fund, the
investment income would have been 4.59%, 5.17%, 3.39% and 1.66% for 1996,
1995, 1994 and 1993 respectively.
(a)Represents the average commissions paid on equity transactions entered into
during the period where commissions were applicable. This disclosure is not
applicable for periods prior to 1996.
The per share ratios are calculated using the weighted average number of
shares outstanding during the period.
Page 34
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BALANCED INTERMEDIATE BOND GOVERNMENT MONEY MARKET
FUND FUND FUND
- --------------------- -------------------------------------------------- ----------------------------------------------
9/1/95 3/5/93 3/1/93
Through Through Through
1996 12/31/95 1996 1995 1994 12/31/93 1996 1995 1994 12/31/93
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$10.605 $10.000 $10.244 $ 9.624 $10.345 $10.000 $1.000 $1.000 $1.000 $1.000
- ---------------------------------------------------------------------------------------------------------------------------
.132 .009 .612 .655 .589 .357 .049 .059 .040 .023
2.598 .602 .019 .740 (.690) .447 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------
2.730 .611 .631 1.395 (.101) .804 .049 .059 .040 .023
(.132) (.004) (.612) (.655) (.580) (.357) (.049) (.059) (.040) (.023)
(.560) (.002) (.055) (.120) (.040) (.102) 0 0 0 0
0 0 0 0 0 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------
(.692) (.006) (.667) (.775) (.620) (.459) (.049) (.059) (.040) (.023)
- ---------------------------------------------------------------------------------------------------------------------------
$12.643 $10.605 $10.208 $10.244 $ 9.624 $10.345 $1.000 $1.000 $1.000 $1.000
- ---------------------------------------------------------------------------------------------------------------------------
25.94% 6.16% 6.46% 14.84% (1.04)% 8.17% 5.06% 5.87% 4.04% 2.21%
1.40% 0.91% 0.55% 0.27% 0.28% 0.28% 0.31% 0.07% 0.0% 0.03%
1.54% 0.08% 5.75% 5.94% 5.94% 4.13% 4.95% 5.69% 4.04% 2.32%
$ .056 -- N/A N/A N/A N/A N/A N/A N/A N/A
117.8% 54.8% 28.9% 75.1% 94.5% 32.3% N/A N/A N/A N/A
$ 2,336 $ 410 $ 2,769 $ 3,589 $ 3,010 $ 2,959 $6,232 $4,393 $3,315 $1,859
===========================================================================================================================
</TABLE>
Page 35
<PAGE>
ANNUAL REPORT
DECEMBER 31, 1996
MONETTA FAMILY OF FUNDS
MONETTA FUND, INC.
MONETTA MID-CAP EQUITY FUND
MONETTA LARGE-CAP EQUITY FUND
MONETTA BALANCED FUND
MONETTA INTERMEDIATE BOND FUND
MONETTA GOVERNMENT MONEY [LOGO OF MONETTA]
MARKET FUND
MONETTA FUNDS
1776-A SOUTH NAPERVILLE ROAD
SUITE 207
WHEATON, ILLINOIS 60187
1-800-MONETTA (666-3882)
<PAGE>
Index of Exhibits Filed with this Amendment
-------------------------------------------
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Page
- ------- ------------------------ ----
<C> <S> <C>
11 Consent of Independent Auditors
14.4 Monetta SIMPLE-IRA Supplement
17 Financial Data Schedule
</TABLE>
<PAGE>
[KPMG PEAT MARWICK LLP LETTERHEAD]
CONSENT OF INDEPENDENT AUDITORS
To the Board of Trustees and Shareholders
of Monetta Fund, Inc.
We consent to the use of our report which is incorporated by reference into the
Statement of Additional Information and to the reference to our Firm under the
headings "Financial Highlights" in the Prospectus and "Independent Auditors" in
the Statement of Additional Information.
/s/ KPMG Peat Marwick LLP
Chicago, Illinois
February 26, 1997
<PAGE>
MONETTA FUNDS SIMPLE-IRA SUPPLEMENT
January 1, 1997
1776-A S. Naperville Road, Suite 207 Wheaton, Illinois 60187-8133 1-800-MONETTA
INTRODUCTION
The documents contained in this packet may be used to establish a Salary
Incentive Match Plan IRA, also known as a SIMPLE-IRA. SIMPLE-IRAs are a new type
of individual retirement account that became available for the first time in
1997. A SIMPLE-IRA plan must be established by an employer (including a self-
employed person), and it enables all eligible employees of the employer to elect
to have up to $6,000 per year deducted from their paychecks on a before-tax
basis and deposited directly into a SIMPLE-IRA maintained for the individual
employee. The employer is also generally required to make contributions, as
described in more detail below.
Because of the differences between a SIMPLE-IRA and other types of IRAs, the
forms contained in the regular Monetta Funds IRA booklet cannot be used to
establish a SIMPLE-IRA. Instead, you must use the forms contained in this
booklet. However, the Disclosure Statement contained in the regular IRA booklet
includes important information that also applies to a SIMPLE-IRA. You should
carefully review the Disclosure Statement included in the Monetta Funds IRA
Booklet, before using the forms in this booklet to establish a SIMPLE-IRA.
WHAT IS A SIMPLE-IRA?
A SIMPLE-IRA is a special type of IRA, and is generally subject to the same
rules that apply to all IRAs. However, as an individual you cannot make
contributions directly to a SIMPLE-IRA (except for rollovers as described
below). Instead, your employer must establish a SIMPLE-IRA plan, and make
contributions to your SIMPLE-IRA on your behalf. An employer can establish a
SIMPLE-IRA plan in any year in which it has no more than 100 employees who
earned at least $5,000 in the prior year, and does not maintain any other tax-
qualified pension or profit-sharing plan (other than a frozen plan).
If your employer establishes a SIMPLE-IRA plan and you are an eligible employee,
you can elect to have up to $6,000 of your compensation in any year withheld and
deposited in a SIMPLE-IRA on your behalf. Amounts that you elect to have
deposited in your SIMPLE-IRA are not subject to federal income tax until you
withdraw them (although they are subject to Social Security tax). In addition to
the amount that you elect to have deposited in your SIMPLE-IRA, your employer
must generally make an additional contribution to match the amount that you have
withheld, up to a maximum of 3% of your compensation. The employer may elect to
lower the maximum matching contribution to as low as 1% in some years, but may
not lower the maximum match in more than two years out of every five. The
employer may also elect to make a contribution equal to 2% of compensation for
all eligible employees in any year instead of
<PAGE>
making matching contributions. All employees who have been paid at least $5,000
in two prior years and expect to be paid $5,000 in the current year must be
eligible to participate (excluding nonresident aliens and union workers whose
collective bargaining agreement does not provide for them to participate).
Although SIMPLE-IRAs can only be established under a plan set up by an employer,
each participating employee is the owner of his or her own SIMPLE-IRA account.
All amounts deposited in your SIMPLE-IRA account are fully vested, and can be
withdrawn at any time, as with any other type of IRA. However, amount withdrawn
are subject to tax, and tax penalties may also apply to amounts withdrawn before
you reach the age of 59 1/2, as described in the Disclosure Statement.
SIMPLE-IRA plans can generally be set up by any employer with not more than 100
eligible employees that does not maintain any other tax qualified plan,
including self-employed persons, nonprofits, and government agencies. However,
in determining whether an employer has more than 100 employees, the employees of
certain employers under common ownership must be combined. An employer that
establishes a SIMPLE-IRA plan when it has no more than 100 employees can
continue to maintain it for two years after the number of its employees
increases to more than 100.
SETTING UP A SIMPLE-IRA PLAN
It is important to keep in mind the distinction between a SIMPLE-IRA plan and
SIMPLE-IRA accounts. A SIMPLE-IRA plan is a written document established by an
employer that specifies which employees are eligible to make contributions to
SIMPLE-IRAs. SIMPLE-IRA accounts are the separate accounts established by each
participating employee to hold and invest the contributions made on their
behalf. An employer that wishes to establish a SIMPLE-IRA plan can use Form 5304
- -SIMPLE, which has been issued by the IRS for this purpose. Use of this forms
is not mandatory, and an employer can also use a customized plan document. (The
IRS has also issued Form 5305-SIMPLE, but this form can only be used if all
employees are required to initially deposit their SIMPLE-IRA contributions with
the same designated financial institution.)
This packet includes a Form 5304-SIMPLE that can be used by an employer that
wishes to establish a SIMPLE-IRA plan. The employer will need to complete this
Form to determine which employees will be eligible to participate, and how often
employees will be able to make and change withholding elections. After
completing the Form 5304-SIMPLE, the employer should execute the Form and retain
it in its files. In addition, as discussed below, copies must be furnished to
each eligible employee. Do not file Form 5304-SIMPLE with the IRS.
Once the employer has established a SIMPLE-IRA plan, it must notify all eligible
employees of their right to elect to have a portion of their compensation
deferred under the plan. Each employee must be permitted to make a deferral
election at least during the 60 day period immediately preceding the first day
of the year (i.e., during the period from November 2 through December 31 of the
preceding year). However, if the employer establishes the plan later in the
year, the 60 day period can precede the effective date of the plan. The employer
may permit
2
<PAGE>
longer or more frequent election periods if it wishes to do so, but the 60 day
election period prior to the beginning of the year is required.
The employer must notify each employee of his or her right to make a deferral
election immediately prior to the beginning of the required 60 day election
period, and must also give each eligible employee a summary description of the
plan. A model notice that can be given to each eligible employee is included
with the materials immediately following Form 5304-SIMPLE, and the summary
description requirement can be satisfied by attaching a copy of the completed
Form 5304-SIMPLE to the notice. This notice and summary description must be
given each year, NOT just in the first year in which the plan is established.
In addition, an employer that establishes a SIMPLE-IRA plan must also furnish
all participating employees with information regarding the procedures for
withdrawing funds from their SIMPLE-IRA accounts, and the consequences of such
withdrawals. Monetta Funds will furnish this information directly to the
participating employees who establish their SIMPLE-IRA accounts with Monetta
Funds.
ESTABLISHING A SIMPLE-IRA ACCOUNT
Although the employer establishes the SIMPLE-IRA plan, each participating
employee must establish his or her own SIMPLE-IRA account to hold the
contributions under the plan. Each employee is the absolute owner of his or her
own account, and has the right to make withdrawals at any time. Enclosed with
these materials are a copy of the Monetta Funds SIMPLE-IRA Account Agreement,
which is used to establish a Monetta Funds SIMPLE-IRA. The Monetta Funds SIMPLE-
IRA Account Agreement is in the form of IRS Form 5305-SA, which is automatically
deemed acceptable by the Internal Revenue Service. The approval by the IRS
relates only to the form of the account and not to the merits of using the
account as a retirement plan.
In order to establish a Monetta Funds SIMPLE-IRA, a participant must
complete the Monetta Funds SIMPLE-IRA Application Form, which is included in
this booklet. If the employer has designated Monetta Funds as the designated
financial institution under the plan, then all SIMPLE-IRAs under the plan will
automatically be established with Monetta Funds, and participants need only
complete the Application Form. If any participant fails to complete an
Application Form, the employer may complete the form for the employee.
If an employee is establishing a SIMPLE-IRA account under the plan of an
employer that has NOT named Monetta Funds as the designated financial
institution, the employee will need to complete the application form, and will
also need to notify his or her employer to send all contributions to Monetta
Funds. The employer establishing the plan should furnish the employee with the
necessary forms to accomplish this notification.
ROLLOVERS AND DIRECT TRANSFERS
Amounts which are held in other SIMPLE-IRAs can also be transferred to a Monetta
Funds SIMPLE-IRA, either by rollover or direct transfer. Rollovers and direct
transfers to a SIMPLE-
3
<PAGE>
IRA can NOT be made from any other kind of IRA, or from a qualified plan or tax-
deferred annuity.
In order to make a rollover or direct transfer to a Monetta Funds SIMPLE-IRA
from another SIMPLE-IRA, you will need to complete an application form if you do
not already have a Monetta Funds SIMPLE-IRA. If the funds are being transferred
by direct transfer, you will also need to complete the Transfer Form that
immediately follows the application form in this booklet. If the transfer is a
rollover, you will need to send your check made payable to Monetta Funds not
later than 60 days after you receive the distribution from the other SIMPLE-IRA.
For more information on direct transfers and rollovers, including the limits on
the frequency of rollovers, see the Disclosure Statement.
The Monetta Funds Custodial Account for SIMPLE-IRAs is sponsored by Monetta
Funds and Monetta Trust. This brief outline of the Account is not intended as a
full explanation of the Account, but we hope that we have answered some of the
questions that occur to you.
WE URGE YOU TO READ THE ENCLOSED MATERIAL THOROUGHLY.
4
<PAGE>
Form 5305-SA
(December 1996)
Department of the Treasury
Internal Revenue Service
MONETTA FUNDS CUSTODIAL ACCOUNT
FOR SIMPLE-IRAS
(Under Sections 408(a) and 408(p) of the Internal Revenue Code)
(January 1, 1997)
ARTICLE I
The Custodian will accept cash contributions on behalf of the Participant
by the Participant's employer under the terms of a SIMPLE plan described in
408(p). In addition, the Custodian will accept transfers or rollovers from other
SIMPLE IRAs of the Participant. No other contributions will be accepted by the
Custodian.
ARTICLE II
The Participant's interest in the balance in the Custodial Account is
nonforfeitable.
ARTICLE III
1. No part of the custodial funds may be invested in life insurance
contracts, nor may the assets of the Custodial Account be commingled with other
property except in a common trust fund or common investment fund (within the
meaning of section 408(a)(5)).
2. No part of the custodial funds may be invested in collectibles (within
the meaning of section 408(m)) except as otherwise permitted by section
408(m)(3), which provides an exception for certain gold and silver coins and
coins issued under the laws of any state.
ARTICLE IV
1. Notwithstanding any provision of this agreement to the contrary, the
distribution of the Participant's interest in the Custodial Account shall be
made in accordance with the following requirements and shall otherwise comply
with section 408(a)(6) and Proposed Regulations section 1.408-8, including the
incidental death benefit provisions of Proposed Regulations section 1.401(a)(9)-
2, the provisions of which are incorporated by reference.
2. Unless otherwise elected by the time distributions are required to
begin to the Participant under paragraph 3, or to the surviving spouse under
paragraph 4, other than in the case of a life annuity, life expectancies shall
be recalculated annually. Such election shall be irrevocable as to the
Participant and the surviving spouse and shall apply to all subsequent years.
The life expectancy of a nonspouse beneficiary may not be recalculated.
3. The Participant's entire interest in the Custodial Account must be, or
begin to be, distributed by the Participant's required beginning date (April 1
following the calendar year end in which the Participant reaches age 70 1/2). By
that date, the Participant may elect, in a manner acceptable to the Custodian,
to have the balance in the Custodial Account distributed in:
(a) A single sum payment.
(b) An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the life of the Participant.
1
<PAGE>
(c) An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the joint and last survivor lives of the
Participant and his or her designated beneficiary.
(d) Equal or substantially equal annual payments over a specified period
that may not be longer than the Participant's life expectancy.
(e) Equal or substantially equal annual payments over a specified period
that may not be longer than the joint life and last survivor expectancy of the
Participant and his or her designated beneficiary.
4. If the Participant dies before his or her entire interest is
distributed to him or her, the entire remaining interest will be distributed as
follows:
(a) If the Participant dies on or after distribution of his or her interest
has begun, distribution must continue to be made in accordance with paragraph
3.
(b) If the Participant dies before distribution of his or her interest has
begun, the entire remaining interest will, at the election of the Participant
or, if the Participant has not so elected, at the election of the beneficiary
or beneficiaries, either
(i) Be distributed by December 31 of the year containing the fifth
anniversary of the Participant's death, or
(ii) Be distributed in equal or substantially equal payments over the
life or life expectancy of the designated beneficiary or
beneficiaries starting by December 31 of the year following the
year of the Participant's death. If, however, the beneficiary is
the Participant's surviving spouse, then this distribution is not
required to begin before December 31 of the year in which the
Participant would have reached age 70 1/2.
(c) Except where distribution in the form of an annuity meeting the
requirements of section 408(b)(3) and its related regulations has irrevocably
commenced, distributions are treated as having begun on the Participant's
required beginning date, even though payments may actually have been made before
that date.
(d) If the Participant dies before his or her entire interest has been
distributed and if the beneficiary is other than the surviving spouse, no
additional cash contributions or rollover contributions may be accepted in the
account.
5. In the case of a distribution over life expectancy in equal or
substantially equal annual payments, to determine the minimum annual payment for
each year, divide the Participant's entire Interest in the Custodial Account as
of the close of business on December 31 of the preceding year by the life
expectancy of the Participant (or the joint life and last survivor expectancy of
the Participant and the Participant's designated beneficiary, or the life
expectancy of the designated beneficiary, whichever applies). In the case of
distributions under paragraph 3, determine the initial life expectancy (or joint
life and last survivor expectancy) using the attained ages of the Participant
and designated beneficiary as of their birthdays in the year the Participant
reaches age 70 1/2. In the case of a distribution in accordance with paragraph
4(b)(ii), determine life expectancy using the attained age of the designated
beneficiary as of the beneficiary's birthday in the year distributions are
required to commence.
6. The owner of two or more individual retirement accounts may use the
"alternative method" described in Notice 88-38, 1988-1 C.B. 524, to satisfy the
minimum distribution requirements described above. This method permits an
individual to satisfy these requirements by taking from one individual
retirement account the amount required to satisfy the requirement for another.
2
<PAGE>
ARTICLE V
1. The Participant agrees to provide the Custodian with information
necessary for the Custodian to prepare any reports required under sections
408(i) and 408(l)(2) and Regulations sections 1.408-5 and 1.408-6.
2. The Custodian agrees to submit reports to the Internal Revenue Service
and the Participant prescribed by the Internal Revenue Service.
3. The Custodian also agrees to provide the Participant's employer the
summary description described in section 408(l)(2) unless this SIMPLE IRA is a
transfer SIMPLE IRA.
ARTICLE VI
Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through III and this sentence will be controlling. Any
additional articles that are not consistent with section 408(a) and 408(p) and
related regulations will be invalid.
ARTICLE VII
This agreement will be amended from time to time to comply with the
provisions of the Code and related regulations. Other amendments may be made
with the consent of the persons whose signatures appear below.
ARTICLE VIII
1. Definitions.
"Investment Company" shall mean an investment company as defined in
Internal Revenue Code Section 851(a), shares of which Monetta Fund, Inc. or
Monetta Trust have agreed to offer for investment under this Account.
"Investment Company Shares" or "Shares" shall mean shares of beneficial interest
or capital stock of the Investment Company.
2. Investment of Account Assets.
(a) Each contribution forwarded by the Participant to the Custodian shall
identify the Participant's account number and be accompanied by a statement
signed by the Participant identifying the Investment Company Shares in which
that contribution is to be invested. The Custodian may return to the
Participant, without liability for interest thereon, any contributions which are
not accompanied by adequate account identification or an appropriate signed
statement directing investment of those contributions.
(b) Contributions shall be invested in whole and fractional Investment
Company Shares at the price and in the manner in which such shares are then
being publicly offered by the Investment Company. All distributions received on
Investment Company Shares held in the Custodial Account shall be reinvested in
like Shares and credited to such Account. If any distribution of Investment
Company Shares may be received at the election of the shareholder in additional
like Shares or in cash or other property, the Custodian shall elect to receive
such distribution in additional like Investment Company Shares.
(c) All Investment Company Shares acquired by the Custodian shall be
registered in the name of the Custodian or its registered nominee. The
Participant shall be the beneficial owner of all Investment Company Shares held
in the Custodial Account and the Custodian shall not vote any of such shares,
except upon written direction of the Participant. The Custodian agrees to
forward to every Participant a then current Prospectus, reports, notices,
proxies and related proxy soliciting materials applicable to Investment Company
Shares received by the Custodian.
3
<PAGE>
(d) The Participant may at any time, by a manually signed direction
delivered to the Custodian, redeem any number of Investment Company Shares held
for his account and reinvest the proceeds in the Shares of any other Investment
Company. Telephone redemptions and reinvestments shall be done at the price and
in the manner in which such Shares are then being redeemed or offered by the
respective Investment Companies.
3. Amendment and Termination.
(a) Monetta Trust may, with the written approval of the Custodian, amend
the Custodial Account in whole or in part (including retroactive amendments) by
delivering to the Participant written notice of such amendment setting forth the
substance and effective date of the amendment. The Participant shall be deemed
to have consented to any such amendments not objected to in writing by the
Participant within thirty (30) days of receipt of the notice, provided that no
amendment shall cause or permit any part of the assets of the Custodial Account
to be diverted to purposes other than for the exclusive benefit of the
Participant or his beneficiaries, nor shall any amendment be made except in
accordance with the applicable law and regulations affecting this Custodial
Account.
(b) The Participant may at any time terminate the Custodial Account by
delivering to the Custodian a written notice of such termination setting forth
the effective date thereof, together with any required withholding information.
(c) The Custodial Account created by this Agreement shall automatically
terminate upon distribution to the Participant or the beneficiary designated
under Paragraph 6 of Article VIII hereof of the entire balance in the Custodial
Account.
(d) The Custodian may be removed by the Participant at any time upon thirty
(30) days written notice to the Custodian. The Custodian may elect to terminate
the Custodial Account upon thirty (30) days written notice to the Participant.
(e) In the event that the assets of any Investment Company in which the
Custodial Account is invested are transferred to or acquired by any other
investment company or other commingled investment fund which is a permissible
investment for an individual retirement account, by merger or otherwise, the
Custodian may make such amendments to this Agreement, or take such other action,
as it may determined to be necessary or appropriate to accomplish such
transaction and the exchange of Investment Company Shares for shares or other
appropriate units of ownership in such successor fund. The consent of the
Participant shall not be required for any such amendment or action, but the
Participant shall be promptly notified thereof, and shall have the right to
withdraw the funds in the Custodial Account without fee, charge, load or penalty
of any kind.
4. Taxes and Custodial Fees. Any income taxes or other taxes of any kind
whatsoever that may be levied or assessed upon or in respect of the assets of
the Custodial Account, or the income arising therefrom, any transfer taxes
incurred, all other administrative expenses incurred by the Custodian in the
performance of its duties, including fees for legal services rendered to the
Custodian, and the Custodian's compensation, shall be paid from the Custodial
Account. Unusual administrative responsibilities not contemplated by the fee
schedule will result in such additional charges as will reasonably compensate
the Custodian for the services performed.
The custodian fee listed in the fee schedule will be deducted by the
Custodian from the initial contribution received from the Participant. The
annual maintenance fee will be deducted on the last business day in September
for each year and enough fund shares will be redeemed to cover this fee. Fees as
listed on the fee schedule will be deducted from the refund or redemption
proceeds at the time of distribution or redemption and the remaining balance
will be remitted to the Participant in the case of distribution, or will be
reinvested in accordance with the Participant's instructions.
4
<PAGE>
5. Reports and Notices.
(a) The Custodian shall keep adequate records of transactions it is
required to perform hereunder. No later than sixty (60) days after the close of
each calendar year, or after the Custodian's resignation or removal pursuant to
Article VIII, Paragraph 3, the Custodian shall render to Participant a written
report or reports reflecting the transactions effected by it during such period
and the assets and liabilities of the Custodial Account at the close of the
period.
(b) All communications or notices required or permitted to be given herein
shall be deemed to be given upon receipt by the Custodian at P.O. Box 701,
Milwaukee, Wisconsin 53201-0701, the Investment Company and Monetta Fund and/or
Monetta Trust at P.O. Box 701, Milwaukee, Wisconsin 53201-0701, or the
Participant at his most recent address shown in the Custodian's records. The
Participant agrees to advise the Custodian promptly, in writing, of any change
of address.
6. Designation of Beneficiary. The Participant shall have the right, by
written notice to the Custodian, to designate a beneficiary or beneficiaries,
primary and contingent, to receive any benefit to which such Participant may be
entitled in the event of his death prior to the complete distribution of such
benefit. In the event the Participant has not designated any beneficiaries, or
if all beneficiaries shall predecease the Participant, the following persons
shall take in the order named:
(a) Spouse of the Participant;
(b) If the spouse shall predecease the Participant, then in equal shares to
any children surviving the Participant and to the descendants then living of a
deceased child, by the right of representation, or
(c) If the Participant shall leave neither spouse nor descendants
surviving, then to the personal representative of the Participant's estate.
The determination of the Custodian as to the person entitled to receive any
distribution from the Custodial Account following the death of the Participant,
if made in good faith, shall be conclusive and binding on all persons claiming
an interest in the Participant Account; provided that nothing provided herein
shall be construed to preclude the Custodian from filing an action in the nature
of interpleader or other appropriate proceeding in a court of competent
jurisdiction to determine the person entitled to receive such distribution. Any
expenses incurred by the Custodian in determining the person entitled to receive
a distribution from the Custodial Account, including without limitation
attorneys fees in any such action, shall be reimbursed from the Custodial
Account.
7. Inalienability of Benefits. The benefits provided hereunder shall not
be subject to alienation, assignment, garnishment, attachment, execution or levy
of any kind of any attempt to cause such benefits to be so subjected shall not
be recognized except to the extent as may be required by law.
8. Rollover Contributions. The Custodian may receive rollover
contributions as described in section 408(d)(3) and regulations promulgated
thereunder, but only from other SIMPLE-IRAs. If any property is transferred to
the Custodian as a rollover contribution, such property shall be sold by the
Custodian and the proceeds reinvested as provided in section 2 of this Article
VIII. The Custodian reserves the right to refuse to accept any contributions
which are not in the form of cash.
9. Conflict in Provisions. To the extent that any of the provisions of
Article VIII shall conflict with the provisions of Articles IV, V, or VII, the
provisions of Article VIII shall prevail.
10. Status of Participants. Neither the Participant nor any other person
shall have any legal or equitable right against the Custodian or the Investment
Company except as provided herein. The Participant agrees to indemnify and hold
the Custodian harmless from and against any liability that the Custodian may
incur in the administration of the Account unless arising from the Custodian's
own negligence or misconduct.
5
<PAGE>
11. Loss of Exemption. If the Custodian receives notice that the
Participant's Account has lost its tax-exempt status under section 408 of the
Code for any reason, including by reason of a transaction prohibited by section
4975 of the Code, the Custodian shall distribute to the Participant the entire
balance in the Account, in cash or in kind, in the sole discretion of the
Custodian no later than 90 days after the date the Custodian receives such
notice.
12. Applicable State Law. This Custodial Account shall be construed,
administered and enforced according to the laws of the State of Wisconsin except
to the extent Federal law supersedes Wisconsin law.
13. Distributions to Surviving Spouse. If distributions from the Custodial
Account are to be made to the Participant's surviving spouse, or to a trust of
which the Participant's surviving spouse is the income beneficiary, the amount
which the surviving spouse (or such trust) is entitled to receive in each year
shall not be less than the income of the Custodial Account (or of the portion of
the Custodial Account with respect to which the surviving spouse or such trust
is the beneficiary) for such year, as determined under section 2056(b)(7) of the
Code.
14. Minimum Distributions; Election not to Recalculate Life Expectancies.
The following provisions supplement the provisions of Article IV with respect to
minimum required distributions, and shall control over the provisions of Article
IV in the event of any inconsistency. All paragraph references in this paragraph
14 are to paragraphs of Article IV unless otherwise provided.
(a) If the Participant fails to withdraw the entire balance in the
Custodial Account by the April 1 of the year following the year in which he
attains age 70 1/2, he shall be deemed to have elected to receive payments under
paragraph 3(d) or, if he has a designated beneficiary (as determined under Part
D of Proposed Regulations section 1.401(a)(9)-1) under paragraph 3(e). A
beneficiary shall be deemed to have elected the method described in paragraph
4(b)(ii) if either he withdraws the minimum amount required for the first year
under the method described in paragraph 4(b)(ii) and does not specifically elect
the method described in paragraph 4(b)(i) by the end of such year, or if the
date specified in paragraph 4(b)(i) occurs first and he has not withdrawn the
entire balance in the Custodial Account by that time; otherwise, the beneficiary
shall be deemed to have elected the method described in paragraph 4(b)(i).
(b) If there is more than one beneficiary entitled to receive distributions
on equal priority upon the death of the Participant or a prior beneficiary then,
to the extent permitted by Proposed Regulations section 1.401(a)(9)-1, Q&A H-2,
and subject to such requirements and limitations as the Custodian may establish,
the Custodial Account may be divided into separate accounts for purposes of
Article IV and this paragraph.
(c) Notwithstanding the references to "equal or substantially equal"
payments, if the Participant or a beneficiary is receiving distributions under
paragraph 3(d), 3(e), or 4(b)(ii), he may withdraw amounts that exceed the
minimum amount required by paragraph 5 in any year, provided that any excess
shall not be credited against the minimum amount required to be withdrawn in
subsequent years. Withdrawals may also be made at irregular intervals, provided
that the minimum amount required for each year shall be withdrawn by the last
day of such year, except that the minimum amount for the year in which the
Participant attains age 70 1/2, but no subsequent year, may be withdrawn by
April 1 of the following year.
(d) In lieu of the methods of recalculating life expectancies annually as
specified in paragraph 2, the Participant may elect for purposes of paragraph
3(c) or 3(d), and the Participant's surviving spouse may elect for purposes of
paragraph 4(b)(ii), to have his life expectancy, or his and his designated
beneficiary's joint and last survivor life expectancy, or the surviving spouse's
life expectancy, initially calculated in the year specified in paragraph 5 and
thereafter reduced by one year in each subsequent year. All elections described
in this paragraph 14(d) shall be made in writing in accordance with procedures
established by the Custodian and the Proposed Regulations or successors thereto.
Such elections must be made and, if made, shall be irrevocable after the date
upon which distributions are required to commence under paragraph 3 or 4(b)(ii).
(e) All references to the Proposed Regulations section 1.401(a)(9)-1 and
1.401(a)(9)-2 contained in Article IV and this paragraph 14 include the
applicable provisions of Proposed Regulations section 1.408-8 applying
6
<PAGE>
such Proposed Regulations to individual retirement accounts, any subsequent
amendments to any such Proposed Regulations, and the applicable provisions of
the permanent Regulations, when issued, all of which are incorporated by
reference and shall control over any contrary provision of this Agreement.
Reference to specific provisions of the Proposed Regulations shall not be
construed to limit reference to other provisions where appropriate in the
interpretation of Article IV and this paragraph 14.
(f) Distributions will be made only upon the request of the Participant
(or the Participant's authorized agent, beneficiary, executor, or
administrator), in such form and manner as is acceptable to the Custodian. For
such distributions, life expectancy and joint-life and last-survivor expectancy
are calculated based on information provided by the Participant (or the
Participant's authorized agent, beneficiary, executor, or administrator) using
the expected return multiples under Treasury Regulations Section 1.72-9. The
Custodian will not be liable for errors in such calculations resulting Form its
reliance on such information. If any assets held on the Participant's behalf in
a Custodial Account are transferred directly to a trustee or Custodian of
another individual retirement account described in Code Section 408(a)
established for the Participant, it shall be the Participant's responsibility to
ensure that any requested minimum distribution required by Article IV is made
prior to giving the Custodian such transfer instructions.
7
<PAGE>
MONETTA FUNDS SIMPLE-IRA APPLICATION
COMPLETE THIS APPLICATION AND SEND IT TO: FIRSTAR TRUST COMPANY, Attn: Monetta
Funds, P.O. Box 701, Milwaukee, Wisconsin, 53201-0701.
1. SIMPLE-IRA APPLICANT
Name of Individual: Social Security No.:
------------------------------------------ ------------------------------
Street Address: Birth Date:
------------------------------------------ ------------------------------
City: State: Zip Code:
-------------------------- ---------------- -------------------
Home Phone: ( ) Business Phone: ( )
---------------------------------- ------------------------------------
2. CONTRIBUTION TYPE. Check the appropriate box below. This Application
Form can only be used to establish a SIMPLE-IRA, which receives
contributions under a Savings Incentive Match Plan (SIMPLE)
established by your employer. You can also make rollover or direct
transfer contributions from another SIMPLE-IRA to this SIMPLE-IRA. If
you wish to establish another type of IRA, you should obtain a regular
IRA application form from Monetta Funds.
[_] Contributions under a SIMPLE-IRA plan. If your employer has
established a SIMPLE -IRA plan check here and insert the name and
address of your employer:____________________________________________
_____________________________________________________________________
Your employer must also sign below. You can either include your
employer's check payable to Firstar Trust Company, or arrange to have
your employer send its check directly to Firstar Trust Company,
Attention: Monetta Funds, P.O. Box 701, Milwaukee, Wisconsin 53201-
0701.
[_] Rollover from another SIMPLE-IRA. If you are rolling over a
distribution that you received within the past 60 days from another
SIMPLE-IRA, check here and include your check payable to Firstar Trust
Company.
[_] Direct transfer from another SIMPLE-IRA. If this is a direct transfer
from another SIMPLE-IRA, check here and complete the attached Transfer
Form.
3. INVESTMENT OF CONTRIBUTIONS
(1) If you do not choose a Fund, all of your contributions will
be invested in the Monetta Government Money Market Fund.
(2) Initial Investment Minimums: $250 Per Fund Account.
(3) Subsequent Investment Minimums: $50 Per Fund Account.
(4) There is an Annual Maintenance Fee charged by the Custodian of $12.50
per Fund account. This fee is paid automatically by redeeming shares
from your account unless you add the fee to your contribution check
or enclose a separate check for your fee made payable to Firstar
Trust Company. Please see the Plan Booklet for further information on
Custodian Fees.
Fund Dollar Amount to be Invested
MONETTA FUND $---------------------
MONETTA MID-CAP EQUITY FUND $---------------------
MONETTA LARGE-CAP EQUITY FUND $---------------------
MONETTA BALANCED FUND $---------------------
MONETTA INTERMEDIATE BOND FUND $---------------------
MONETTA GOVERNMENT MONEY MARKET FUND $---------------------
Total Contributions $=====================
Total Fees ($12.50 per Fund Account) $=====================
Total $====================
---------------------------------
Application continued on reverse.
---------------------------------
<PAGE>
MONETTA FUNDS SIMPLE-IRA APPLICATION (Continued)
5. TELEPHONE EXCHANGE The telephone exchange privilege offered by the
Monetta Funds is automatically available unless you check the box
below. The exchange privilege authorizes the Funds and their transfer
agent to act on telephone instructions from any person to make an
exchange.
[_] I do not authorize telephone exchanges
6. BENEFICIARY DESIGNATION I hereby designate the following as my
Beneficiary(ies) under my Monetta Funds Individual Retirement Account
(SIMPLE-IRA):
- -------------------------------------------- ------------------------------
Name Relationship
- -------------------------------------------- ------------------------------
Street Address Social Security No.
- ---------------- ----- -------- ----------
City State Zip Code Birth Date
Every payment under my SIMPLE-IRA by reason of my death shall be made to my
Beneficiary if he or she is living at the time such payment becomes due; and if
there is no designated Beneficiary living at the time any such payment becomes
due, the payment shall be made to my estate.
A Beneficiary Designation shall be valid only if dated, signed and filed
with the Custodian under the Plan before my death. I understand that I may
change my beneficiary designation by completing a "Change of Beneficiary" form
that I can obtain by calling 1-800-MONETTA and returning it to the Custodian.
SIGNATURE OF APPLICANT:
I hereby adopt the Monetta Funds Custodial Agreement for SIMPLE-IRAs. I
appoint Firstar Trust Company as Custodian and agree to be bound by the
provisions of the Custodial Agreement. I certify that the foregoing information
is correct and that I received a copy of the Disclosure Statement relating to
the Account and custodian fees, as well as a copy of the current prospectus(es)
of the Fund(s) in which my initial investment is to be made. The terms,
provisions and limitations of the Custodial Agreement, as amended from time to
time, are controlling and shall always govern all rights of myself, my
Beneficiaries and all persons claiming under, by or through them, or any of
them.
- ------------------- -------------------------------------------------------
Date Signature of Applicant
SIGNATURE OF EMPLOYER:
The undersigned, as the employer sponsoring the SIMPLE under which the
foregoing SIMPLE-IRA account is established, represents to Firstar Trust
Company, Monetta Funds and the Monetta Trust that it will furnish the account
owner with the information required by paragraphs (1) through (4) of Q&A H-1 of
IRS Notice 97-6 or any successor thereto, and releases Firstar Trust Company,
Monetta Funds, and the Monetta Trust from any obligation to provide such
information to the undersigned. By accepting contributions to such account,
Firstar Trust Company, Monetta Funds and the Monetta Trust, represent to the
undersigned that they will provide the information required by paragraph (5)
thereof directly to the account owner.
- ------------------ -----------------------------------------------
Date Signature of Employer
THIS DOCUMENT WILL BE RETAINED BY FIRSTAR TRUST COMPANY.
<PAGE>
-------------
TRANSFER FORM
-------------
COMPLETE THIS FORM
TO TRANSFER AN EXISTING SIMPLE-IRA BALANCE
TO A MONETTA FUNDS SIMPLE-IRA
- ------
PART I (To be completed by investor and mailed to Firstar Trust
- ------ Company, Attention: Monetta Funds, P.O. Box 701, Milwaukee,
Wisconsin 53201-0701. If you are opening a new account,
enclose a Monetta Funds SIMPLE-IRA application.)
TO: FIRSTAR TRUST COMPANY:
The assets received are to be invested in:
[_] My existing Monetta Funds SIMPLE-IRA in Account No.
------------- ------
(Fund name)
[_] My new Monetta Funds SIMPLE-IRA. (A signed SIMPLE-IRA Application must be
completed and returned with this Transfer Form.)
- ------------------------------------------- ------------------------------
Investor's Name Daytime Phone
- ---------------------- ------------------- ----------- ------------------
Street City State Zip Code
Investor's Signature Date
--------------------- ------------------------
TO: NAME OF PRESENT CUSTODIAN/TRUSTEE:
Mutual Fund (if applicable) Acct. No.
-------------------------
Address Phone No.
------------------------- -------------------------
Street
------------------------- ------------- -----------------
City: State: Zip Code:
Present Custodian/Trustee:
I have established an account under the Monetta Funds Individual Retirement
Account. Please transfer the assets (cash only) indicated below to Firstar Trust
Company as successor custodian.
[_] All Assets [_] $ only [_] At maturity date of
---------- ----------
[_] Immediately (I am aware of any penalties which may occur)
- --------------------------------------------------------------------------------
- -------
PART II
- -------
(To be completed by Firstar Trust Company)
TO: THE ABOVE-NAMED CUSTODIAN/TRUSTEE:
Firstar Trust Company accepts its appointment as custodian for the above
account. Please forward a check, as directed above by the investor, payable to:
Firstar Trust Company, FBO
------------------------------------------------
Mail check and accompanying documents, if any, to:
Firstar Trust Company, P.O. Box 701, Milwaukee, Wisconsin 53201-0701
FIRSTAR TRUST COMPANY
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND> This schedule contains summary financial information extracted from the
audited Annual Report of the Registrant dated December 31, 1996 and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> Dec-31-1996
<INVESTMENTS-AT-COST> 198,702
<INVESTMENTS-AT-VALUE> 216,829
<RECEIVABLES> 101
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 216,930
<PAYABLE-FOR-SECURITIES> 4,606
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 807
<TOTAL-LIABILITIES> 5,413
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 196,446
<SHARES-COMMON-STOCK> 13,352
<SHARES-COMMON-PRIOR> 23,265
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (3,056)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 18,127
<NET-ASSETS> 211,517
<DIVIDEND-INCOME> 330
<INTEREST-INCOME> 2,168
<OTHER-INCOME> 77
<EXPENSES-NET> 4,064
<NET-INVESTMENT-INCOME> (1,489)
<REALIZED-GAINS-CURRENT> (1,995)
<APPREC-INCREASE-CURRENT> 8,722
<NET-CHANGE-FROM-OPS> 5,238
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,270
<NUMBER-OF-SHARES-REDEEMED> 11,183
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (151,203)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (1,061)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,946
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,064
<AVERAGE-NET-ASSETS> 294,084
<PER-SHARE-NAV-BEGIN> 15.59
<PER-SHARE-NII> (.08)
<PER-SHARE-GAIN-APPREC> .33
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.84
<EXPENSE-RATIO> 1.38
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
