Monetta Family of Mutual Funds
Dear Fellow Shareholders: July 29, 1998
The stock market, during the second quarter, was volatile with very mixed
investment results. On the surface, it would appear to be a solid performance
quarter, but it was significantly impacted by a handful of large capitalization
stocks. In fact, 66% of all common stocks declined during the quarter.
Especially noteworthy was that 15% of all NYSE common stocks and 27% of NASDAQ
stocks declined more than 20%.
In terms of sector performance, the larger capitalization stocks significantly
outperformed the smaller capitalization stocks. This large cap dominance is a
trend that started in 1994 reflecting moderate economic growth and rising
consumer confidence. Also, based on an extended economic cycle, investors are
willing to pay up for higher EPS stability and predictability.
Small-cap stocks are currently trading near their multiple lows reached early
in the 1990 recession. And, similar to Sylvester Stallone's near knock-out in
the movie "Rocky," the question is, can small stocks overcome their beating
against the large capitalization stocks to come out on top? We think they can,
as they offer good fundamental value and strong earnings growth opportunities.
What is needed is a period of accelerating economic growth and for investors
not to "throw in the towel" when valuations are so compelling.
Our Family of Funds mirrored the performance disparity between the major market
indices since year-end. The Mid-Cap and Large-Cap Funds outperformed the
Small-Cap Funds while the Balanced and Bond Funds posted solid returns. The
investment strategy has been to dollar average into our stronger holdings
during market pullbacks, thereby creating a focused portfolio that should
benefit from further market rallies.
In terms of industry sector weightings we generally increased exposure to the
Industrial and Consumer areas. Concurrently, we reduced the weighting in
Technology and Financial sectors. The shift was mostly due to valuation
concerns and robust U.S. economic growth, despite Asian problems. Although
early, we are beginning to emphasize the Energy area as the demand/supply
situation should improve later this year as we anticipate moderate economic
growth.
The major issues for investors today are valuation and liquidity. It appears
that the large capitalization stocks are reasonably valued; not overly
expensive, but no great bargain either. There appears to be many investment
opportunities in the mid and small-cap areas which could benefit from the
valuation discrepancies between the capitalization sectors.
Overall, money flows into the market continue to be very positive; and the
strong dollar is attracting foreign funds into the U.S. market, which suggest
we have a long time to go before pronouncing this bull market dead.
Thank you for being one of our valued shareholders.
Best Personal Regards,
Robert S. Bacarella
President and Founder
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Performance Highlights
<S> <C>
Monetta Fund 3
Monetta Small-Cap Equity Fund 4
Monetta Mid-Cap Equity Fund 5
Monetta Large-Cap Equity Fund 6
Monetta Balanced Fund 7
Monetta Intermediate Bond Fund 8
Monetta Government Money Market Fund 9
Schedule of Investments
Monetta Fund 10
Monetta Small-Cap Equity Fund 11
Monetta Mid-Cap Equity Fund 12
Monetta Large-Cap Equity Fund 13
Monetta Balanced Fund 14
Monetta Intermediate Bond Fund 16
Monetta Government Money Market Fund 16
Financial Statements
Statements of Assets & Liabilities 17
Statements of Operations 18
Statements of Changes in Net Assets 19
Notes to Financial Statements 21
</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. Historically, small company stocks have been
more volatile than large company stocks, U. S. Government Bonds, and Treasury
Bills. An investment in the Government Money Market Fund is neither insured
nor 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.
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. Fund holdings are subject to change. Since indices are
unmanaged, it is not possible to invest in them. Sources for performance
data include Lipper Analytical Services, Inc., and Frank Russell Company.
<PAGE>
Monetta Fund Period ended 6/30/98
Investment Objective: Market Capitalization Range Total Net Assets:
Capital Appreciation/Income $50 million - $1 billion $155.2 million
<TABLE>
<CAPTION>
Performance: Average Annual Total Return
1 Year 5 Year 10 Year
<S> <C> <C> <C>
Monetta Fund 14.0% 10.8% 13.0%
Russell 2000* 16.5% 16.1% 13.6%
NASDAQ Composite* 31.4% 21.9% 17.0%
</TABLE>
*Source Lipper Analytical Services, Inc.
[Performance Graph Appears Here]
<TABLE>
<CAPTION>
Measurment Period Monetta Russell
(Fiscal Year Covered) Fund 2000 NASDAQ
<S> <C> <C> <C>
9/88 10,233 9,906 9,824
12/88 10,285 9,840 9,664
3/89 10,606 10,598 10,307
6/89 11,454 11,273 11,030
9/89 11,996 12,034 11,983
12/89 11,851 11,439 11,524
3/90 12,486 11,186 11,035
6/90 13,964 11,617 11,713
9/90 11,270 8,767 8,729
12/90 13,198 9,207 9,471
3/91 15,643 11,945 12,219
6/91 16,112 11,760 12,058
9/91 18,292 12,719 13,349
12/91 20,575 13,448 14,856
3/92 20,706 14,456 15,297
6/92 19,385 13,470 14,280
9/92 19,961 13,856 14,779
12/92 21,704 15,923 17,152
3/93 20,265 16,604 17,486
6/93 20,415 16,966 17,836
9/93 22,003 18,450 19,327
12/93 21,812 18,934 19,683
3/94 21,236 18,431 18,838
6/94 20,085 17,714 17,888
9/94 21,499 18,943 19,366
12/94 20,456 18,589 19,054
3/95 22,428 19,446 20,707
6/95 23,978 21,269 23,652
9/95 26,965 23,370 26,441
12/95 26,189 23,876 26,659
3/96 26,592 25,094 27,907
6/96 27,416 26,350 30,025
9/96 27,367 26,439 31,088
12/96 26,612 27,814 32,714
3/97 24,680 26,376 30,957
6/97 29,754 30,651 36,541
9/97 35,702 35,213 42,713
12/97 33,581 34,033 39,792
3/98 37,275 37,456 46,517
6/98 33,931 35,711 48,014
</TABLE>
Past performance is no guarantee of future results. The graph above to the
right compares the change in value of a $10,000 investment in the Monetta Fund,
the Russell 2000 Stock Index, and the NASDAQ Composite Index with dividend and
capital gains reinvested. The Russell 2000 Stock Index is a broad measure
representative of the general market, while the NASDAQ measures performance of
stocks in the over-the-counter market. Since the S & P 500 and the Russell
2500 are not appropriate indices, they are no longer reflected on the above
graph. Had they been reflected, the value of a $10,000 investment at the end
of 10 years per the S & P 500 and the Russell 2500 indices would be $53,507 and
$40,765, respectively. Please refer to footnote at bottom of Page 2.
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION TOP 5 EQUITY HOLDINGS:
% of Net Assets
<S> <C>
Styling Technology Corp. 2.3%
Budget Group, Inc. - CL A 2.1%
SteriGenics Int'l, Inc. 2.0%
Aeroflex, Inc. 2.0%
D&K Healthcare Resources, Inc. 2.0%
Total Top 5 Holdings 10.4%
</TABLE>
COMMENTARY
The Monetta Fund posted a return of 1.0% for the first six months of 1998,
compared to the Russell 2000 benchmark return of 4.7%. Over the previous 12-
month period, the Monetta Fund reported a return of 14.0%, which is in line
with the Russell 2000 return of 16.5%.
Despite a conscious decision to limit our exposure to groups directly related
to the Asian situation such as telecommunications equipment, semiconductors and
electronic products, we suffered severe pullbacks in several stocks in these
groups. In addition, the energy sector continues to perform poorly due to the
drop in crude oil prices. Strong performance in our medical technology,
housing and retail stocks was not enough to offset the stocks which declined
due to any real or perceived impact from the Asian crisis.
We continue to follow our investment discipline of focusing on early-stage
growth companies with strong fundamentals at reasonable valuation levels. The
top five holdings listed above are a good representation of the types of
exciting high-growth companies in our portfolio. With the exception of Budget
Group, which is familiar to most people as one of the large car rental
companies, our companies are not well-known to the lay person - or Wall Street
for that matter. For example, Styling Technology Corporation markets high
quality salon products and is growing rapidly, but it is not widely followed on
Wall Street. We are convinced that these types of companies will become
household names as they grow, and we take satisfaction in discovering them
early. You will notice that several of our companies have graduated to our
mid-cap portfolio as they have grown.
As we move into the second half of 1998, we are very excited about the
positioning of the securities in the Monetta Fund. In anticipation of strong
earnings reports, we have taken the opportunity to add to our positions which
have pulled back along with the small-cap market. As always, we continue to
sell or reduce positions which have reached our predetermined price targets
without an appreciable improvement in company fundamentals.
There has been a lot of talk in the press about whether small-cap stocks are
dead and never to be heard from again. This is encouraging to us because when
the general press picks up on the poor relative performance of small-cap stocks
versus the larger companies it may mean that we are at a positive inflection
point for small-cap stocks. Relative valuations on small-cap stocks are at a
10 year low versus the big-caps, and many industry experts feel that there may
never be a better time to move money into the small-cap arena.
<PAGE>
Monetta Small-Cap Equity Fund Period ended 6/30/98
Investment Objective: Market Capitalization Range: Total Net Assets:
Capital Appreciation under $1 billion $3.8 million
<TABLE>
<CAPTION>
Performance: Average Annual Total Return
Since Inception
1 Year 2/1/97
<S> <C> <C>
Monetta Small-Cap Equity Fund 29.6% 35.5%
Russell 2000* 16.5% 17.7%
</TABLE>
*Source Lipper Analytical Services, Inc.
[Performance Graph Appears Here]
<TABLE>
<CAPTION>
Measurement Period Small-Cap Russell
(Fiscal Year Covered) Fund 2000
<S> <C> <C>
12/96 10,000 10,000
3/97 9,490 9,297
6/97 11,820 10,804
9/97 15,089 12,412
12/97 14,716 11,996
3/98 15,956 13,203
6/98 15,317 12,588
</TABLE>
Past performance is no guarantee of future results. The graph above to the
right compares the change in value of a $10,000 investment in the Monetta Fund,
the Russell 2000 Stock Index, and the NASDAQ Composite Index with dividend and
capital gains reinvested. The Russell 2000 Stock Index is a broad measure
representative of the general market, while the NASDAQ measures performance of
stocks in the over-the-counter market. Since the S & P 500 and the Russell
2500 are not appropriate indices, they are no longer reflected on the above
graph. Had they been reflected, the value of a $10,000 investment at the end
of 10 years per the S & P 500 and the Russell 2500 indices would be $53,507 and
$40,765, respectively. Please refer to footnote at bottom of Page 2.
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION TOP 5 EQUITY HOLDINGS:
% of Net Assets
<S> <C>
Styling Technology Corp. 2.3%
Budget Group, Inc. - CL A 2.1%
SteriGenics Int'l, Inc. 2.0%
Aeroflex, Inc. 2.0%
D&K Healthcare Resources, Inc. 2.0%
Total Top 5 Holdings 10.4%
</TABLE>
COMMENTARY
The Monetta Small-Cap Equity Fund continues to post strong results, recording a
29.6% one-year return, compared to the Russell 2000 benchmark return of 16.5%.
For the first six months of 1998, the Monetta Small-Cap Fund posted a 4.1%
return, which was comparable to the Russell 2000 return of 4.7%.
In 1998, we have had strong performance in the pharmaceutical and medical
technology sectors. In particular, D&K Healthcare and SteriGenics each
representing 2% of the portfolio have performed extremely well. Our lagging
sectors were telecommunications and semiconductors, due in large part to
earnings disappointments resulting from the Asian crisis.
As we have communicated to you in prior reports, the Monetta Small-Cap Fund is
a focused portfolio of small capitalization stocks. You will notice that the
top five holdings represent approximately 23% of the portfolio. The relatively
small asset size of the Fund allows us to concentrate the number of holdings,
and we plan to continue to hold approximately 25-35 positions in the Fund.
While we have posted very strong results, small-cap stocks, in general, have
badly lagged larger capitalization stocks. A number of industry pundits have
been saying for the past six to nine months that they expect this situation to
reverse shortly. To date, this still has not occurred. The liquidity and
perceived safety of investing in big-cap stocks has continued to push these
high-priced stocks to even higher levels.
We continue to find value in the small-cap arena, and we are having little
difficulty finding what we consider to be solid, high-growth companies at
reasonable valuation levels. This is an exciting time to be investing in small
capitalization companies which we expect will be the fuel for the growth of our
economy. Since the Monetta Small-Cap Fund's inception in February 1997, we
have posted very strong returns and look forward to building on this solid
foundation.
<PAGE>
Monetta Mid-Cap Equity Fund Period ended 6/30/98
Investment Objective: Market Capitalization Range: Total Net Assets:
Capital Appreciation $1 billion - $5 billion $22.4 million
<TABLE>
<CAPTION>
Performance: Average Annual Total Return
Since Inception
1 Year 5 Year 3/1/93
<S> <C> <C> <C>
Monetta Mid-Cap Equity Fund 20.9% 19.8% 22.4%
S & P 400* 27.1% 18.5% 18.5%
</TABLE>
*Source Lipper Analytical Services, Inc.
[Performance Graph Appears Here]
<TABLE>
<CAPTION>
Mearsurement Period Mid-Cap
(Fiscal Year Covered) Fund S & P 400 S & P 500
<S> <C> <C> <C>
3/1/93 10,000 10,000 10,000
3/93 11,670 10,220 10,080
6/93 11,880 10,455 10,120
9/93 13,120 10,978 10,383
12/93 13,540 11,274 10,622
3/94 13,475 10,793 10,218
6/94 13,109 10,399 10,258
9/94 13,887 11,103 10,759
12/94 13,835 10,817 10,757
3/95 14,835 11,692 11,804
6/95 16,536 12,723 12,929
9/95 17,603 13,965 13,955
12/95 17,233 14,165 14,785
3/96 18,717 15,037 15,579
6/96 19,106 15,470 16,277
9/96 19,855 15,920 16,779
12/96 21,402 16,885 18,177
3/97 21,314 16,634 18,666
6/97 24,277 19,085 21,922
9/97 27,761 22,145 23,563
12/97 27,639 22,329 24,240
3/98 30,239 24,787 27,619
6/98 29,362 24,257 28,536
</TABLE>
Past performance is no guarantee of future results. The graph above to the
right compares the change in value of a $10,000 investment in the Monetta Mid-
Cap Equity Fund to the S & P 400. The S & P 400 index is a broad measure
representative of the general market. Since the S & P 500 is not an
appropriate index, it is no longer reflected on the above graph. Had it been
reflected, the value of a $10,000 investment since inception per the S & P 500
index would be $28,536. Please refer to footnote at bottom of Page 2.
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION TOP 5 EQUITY HOLDINGS:
% of Net Assets
<S> <C>
Budget Group, Inc. - CL A 3.3%
Newcourt Credit Group, Inc. 3.1%
Hertz Corp. - CL A 3.0%
Applied Power, Inc. - CL A 2.9%
SPS Technologies, Inc. 2.9%
Total Top 5 Holdings 15.2%
</TABLE>
COMMENTARY
The Monetta Mid-Cap Equity Fund posted a 6.2% gain during the first half of
1998 following a 2.9% decline in the second quarter. By comparison, the S&P
400 index gained 8.6% for the six months and dipped 2.1% for the second
quarter.
The variance in the fund's performance, since year-end can be attributed to
its under weighting in the technology sector as we realized profits in this
sector due to valuation and earnings concerns. As a result, the Fund did
not participate in the sharp rally in technology shares late in the second
quarter.
Despite the solid year-to-date gains, the market continues to follow its
recent script with wide price swings being a constant. A solid first quarter
was followed up by an April correction and a sharp June rebound. Investors
continued to hunger for liquidity, causing larger stocks to outperform
mid-cap stocks, which in turn outperformed small-cap stocks.
We continue to select stocks for the Mid-Cap Fund with substantial return
potential by virtue of rapid rates of earnings growth while having limited
downside risk. One of our largest sector weighting is in the consumer
discretionary area where we find many issues with attractive growth rates due
to strong domestic employment trends and limited exposure to Southeast Asia.
For example, we recently increased our exposure to the rental car group, which
exhibits strong and improving growth rates at attractive entry points and is
one of the few groups enjoying the flexibility to raise prices. Conversely, we
decreased our weighting in technology stocks, which are rife with earnings
disappointments amid increased competition and slowing overseas demand.
We remain confident that the Mid-Cap Fund is well-positioned to produce strong
returns in a bull market while cushioning its shareholders against inevitable
market volatility.
<PAGE>
Monetta Large-Cap Equity Fund Period ended 6/30/98
Investment Objective: Market Capitalization Range: Total Net Assets:
Capital Appreciation $5 billion + $4.3 million
<TABLE>
<CAPTION>
Performance: Average Annual Total Return
Since Inception
1 Year 2 Year 9/1/95
<S> <C> <C> <C>
Monetta Large-Cap Equity Fund 15.2% 22.9% 23.1%
S & P 500* 30.2% 32.4% 30.6%
</TABLE>
*Source Lipper Analytical Services, Inc.
[Performance Graph Appears Here]
<TABLE>
<CAPTION>
Measurment Period Large-Cap
(Fiscal Year Covered) Fund S & P 500
<S> <C> <C>
9/95 10,000 10,482
12/95 10,574 11,105
3/96 11,344 11,701
6/96 11,923 12,225
9/96 12,864 12,603
12/96 13,555 13,653
3/97 13,842 14,020
6/97 15,621 16,465
9/97 17,333 17,699
12/97 17,167 18,207
3/98 18,413 20,745
6/98 18,008 21,433
</TABLE>
Past performance is no guarantee of future results. The graph above to the
right compares the change in value of a $10,000 investment in the Monetta
Large-Cap Equity Fund to the S & P 500. The S & P 500 Composite index is a
broad measure representative of the general market. Please refer to footnote
at bottom of Page 2.
[CAPTION]
<TABLE>
PORTFOLIO COMPOSITION TOP 5 EQUITY HOLDINGS:
% of Net Assets
<S> <C>
Kmart Corp. 4.5%
Galileo Int'l, Inc.. 3.9%
B.F. Goodrich Co. 3.5%
Newcourt Credit Group, Inc. 3.4%
B.J Services Co. 3.4%
Total Top 5 Holdings 18.7%
</TABLE>
COMMENTARY
The Monetta Large-Cap Equity Fund gained 4.9% for the six months ended June
1998, despite a 2.2% decline for the second quarter. This compares to the
17.7% return of the S&P 500 year-to-date and the 3.3% increase for the second
quarter.
During the first half, our focus on risk control caused us to avoid many of
these "nifty-fify" stocks which performed so well. In addition, we carried
an over weighting in the energy sector, which was significantly impacted by
plunging oil prices particularly in the second quarter. These two factors
comprise the bulk of the Fund's variance versus the S&P 500 year-to-date.
The S&P 500 continues to churn out gains that are exceptional by historical
standards, but these returns are driven by an increasingly narrow group of
stocks. For example, the biggest 10% of the issues in the S&P 500 comprise
about half of the weight of the index, and these 50 stocks collectively
gained close to 30% in the first half of 1998. Armed with the conviction
that the earnings of these companies will not disappoint and the knowledge
that liquidity is abundant, investors continue to bid these "nifty fifty"
stocks to levels unprecedented in recent memory.
However, the basic laws of finance have not been repealed. Such high returns
do not come without an equal dose of risk. While we maintain core positions in
a handful of these stocks, our discipline of risk control allows us to largely
focus on those stocks with similarly strong growth rates which have not yet
been bid up to lofty levels.
Our top five holdings highlight some of these names: Galileo, a dominant
provider of computer reservation services to the travel industry, which is
growing earnings and cash flow rapidly and is a business with pricing power;
Newcourt Credit, which is growing operating earnings 50% and is attracting
research coverage since gaining a NYSE listing in 1997; and Kmart, the
discounter with a new management focus that is producing impressive margin
expansion.
Our philosophy of bottom-up stock selection focuses on both appreciation of
capital and risk control. With the influx of domestic and overseas money into
the very biggest stocks, 1998 has certainly not been a "stock-pickers" market
so far. However, we are confident that our practice of preserving capital,
as well as producing positive returns, will continue to add value to
shareholders over the long haul.
<PAGE>
Monetta Balanced Fund Period ended 6/30/98
Investment Objective: Market Capitalization Range: Average Maturity:
Capital Appreciation $50 million+ 6.6 Years
Total Net Assets:
$15.7 million
<TABLE>
<CAPTION>
Performance: Average Annual Total Return
Since Inception
1 Year 2 Year 9/1/95
<S> <C> <C> <C>
Monetta Balanced Fund 15.5% 19.2% 20.4%
Benchmark* 23.6% 24.4% 22.7%
</TABLE>
[CAPTION]
<TABLE>
Measurement Period Balanced
(Fiscal Year Covered) Fund Benchmark
<S> <C> <C>
9/95 10,000 10,313
12/95 10,616 10,919
3/96 11,131 11,220
6/96 11,913 11,577
9/96 12,547 11,887
12/96 13,369 12,682
3/97 13,358 12,888
6/97 14,642 14,615
9/97 16,431 15,554
12/97 16,205 16,014
3/98 17,321 17,727
6/98 16,923 18,254
</TABLE>
Past performance is no guarantee of future results. The graph above to the
right compares the change in value of a $10,000 investment in the Monetta
Balanced Fund to the Benchmark with dividends and capital gains reinvested.
*The Benchmark is a composite blend of two indices, 65% S & P (stock index),
and 35% Lehman Gov't/Corp Bond (bond index). It is a hypothetical
benchmark. Source Lipper Analytical Services, Inc. Please refer to
footnote at bottom of Page 2.
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION TOP 5 EQUITY HOLDINGS:
% of Net Assets
<S> <C>
Hertz Corp - CL A 1.7%
Schawk, Inc. 1.7%
Budget Group, Inc. - CL A 1.6%
Kmart Corp. 1.6%
Applied Power, Inc. - CL A 1.5%
Total Top 5 Holdings 8.1%
</TABLE>
COMMENTARY
The Monetta Balanced Fund gained 4.4% for the first half of 1998 following a
2.3% drop in the second quarter. This compares to the benchmark index which
was up 13.0% year-to-date and 3.1% in the second quarter.
Approximately 58% of the assets of the Fund are invested in equities, which are
chosen from among the best ideas in the Monetta Fund, Mid-Cap Fund, and Large-
Cap Fund. The Balanced Fund remains our most diversified Fund since it
contains both equity and fixed income securities. Equity exposure is spread
among a number of industries, with the consumer discretionary sector
representing the largest weighting. The Fund is well-diversified with 55
equities at mid-year. Its top five holdings represent 8.1% of net assets,
including two from the Large-Cap category, two from the Mid-Cap category, and
one from the Small-Cap category. Small-cap stocks currently represent the
greatest weighting by capitalization (approximately 40%) given the
extraordinary return potential that we see in this sector.
The fixed income portion at 37% of assets is, as always, dominated by high
quality corporate issues and U. S. Treasury issues which produce income with
very little risk to principal. The remaining 5% of the Fund is in cash and
equivalents.
We highlight two stocks among our top five holdings. Schawk, Inc. is a
leading provider of digital pre-press services to consumer products and
advertising companies. As such, it plays a vital role in ensuring accuracy
and consistent appearance for packaging items such as Wheaties boxes. The
company is currently growing in excess of 30% on the strength of strong demand
from existing customers, new customer additions, acquisitions, and margin
expansion. Applied Power, also growing at greater than 30%, manufactures
motion control equipment, electrical contracting tools, and technical
enclosures for manufacturing, transportation, and high technology markets.
Enclosures represents a particularly lucrative market.
The Fund's blend of equity and fixed income securities continues to allow
conservative investors the opportunity to participate in rising stock prices
while generating income which cushions against inevitable market volatility.
<PAGE>
Monetta Intermediate Bond Fund Period ended 6/30/98
Investment Objective: 30-Day SEC Yield Average Maturity:
Capital Appreciation/Income 5.75% 4.6 Years
Total Net Assets:
$4.2 million
<TABLE>
<CAPTION>
Fund/Benchmark Average Annual Total Return
Since Inception
1 Year 5 Year (3/1/93)
<S> <C> <C> <C>
Monetta Intermediate Bond Fund 9.37% 7.25% 7.58%
Lehman Gov't/Corp
Intermediate Bond Index* 8.54% 6.11% 6.22%
</TABLE>
*Source Lipper Analytical Services, Inc.
[Performance Graph Appears Here]
<TABLE>
<CAPTION>
Measurment Period Intermediate
(Fiscal Year Covered) Bond Fund Lehman
<S> <C> <C>
3/1/93 10,000 10,007
3/93 10,000 10,028
6/93 10,399 10,255
9/93 10,732 10,486
12/93 10,817 10,504
3/94 10,585 10,291
6/94 10,494 10,229
9/94 10,613 10,313
12/94 10,705 10,302
3/95 11,270 10,754
6/95 11,866 11,292
9/95 12,046 11,479
12/95 12,282 11,883
3/96 12,245 11,784
6/96 12,428 11,859
9/96 12,702 12,068
12/96 13,074 12,364
3/97 13,041 12,350
6/97 13,485 12,715
9/97 13,908 13,058
12/97 14,238 13,338
3/98 14,443 13,546
6/98 14,748 13,800
</TABLE>
Past performance is no guarantee of future results. The graph above to the
right compares the change in value of a $10,000 investment in the Monetta
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 at bottom of
Page 2.
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION: MATURITY PROFILE
<S> <C>
1 Year or Less 5.2%
1 - 3 Years 38.1%
4 - 6 Years 41.3%
7 - 10 Years 15.1%
Over 10 Years 0.3%
Total 100.0%
</TABLE>
COMMENTARY
For the six-month period ended June 30, 1998, the Monetta Intermediate Bond
Fund returned 3.58%. The Fund outperformed its primary benchmark, the Lehman
Government Corporate Intermediate Bond index, by 11 basis points. The Fund's
30-day SEC yield at June 30, 1998, was 5.75%.
The Fund was able to achieve some moderate outperformance by overweighting the
corporate sectors for yield and some timely individual security upgrades. We
will continue to follow this approach into the second half of 1998 and firmly
believe that valuations will improve in the investment grade and high yield
markets.
In our 1997 Annual Report, we commented that 1998 would debut with many
questions and few answers. We were all wondering how the Asian drama would
play out. How would the European Monetary Union progress? And how this union
would affect the debt markets?
First, the bond market had some mild relief from "Asian Contagion" in the first
quarter before a second quarter relapse. The Asian crisis appears to be deeper
than most observers expected at year-end.
Secondly, European monetary union was launched in May 1998 with 11 member
states representing the second largest bond market in the world after the U. S.
We believe this market will provide greater depth and liquidity to the global
fixed income market as it will be expected to consume nearly $5.5 trillion of
new issues this year. In fact, the ability to digest this supply will be a
major factor in fixed income performance for the balance of 1998. The
corporate bond spreads generally steepened during the first six months of 1998
while trying to cope with the volume of new issues.
In the first half of 1998, rates did trend lower, and the curve flattened per
our expectation; but it was based on a "flight to quality" rather than
friendly economic data. The 2 yr. - 30 yr. curve at January 1, 1998, ranged
from 5.64% to 5.92%, a 28 basis point spread, and ended June 30, 1998, at 5.46%
to 5.63% range a 17 basis point spread.
The jury is still out on the impact of Asian affect on the fixed income markets
as we enter the second half. We do expect the U. S. economy to grow, albeit
slower, and are cautiously optimistic of the continuing decline of interest
rates. We believe the risk is more on the deflationary not the inflationary
side of the economy.
<PAGE>
Monetta Government Money Market Fund Period ended 6/30/98
Investment Objective: 7-Day Yield: Average Days to Maturity:
Income and Capital Preservation 5.17% 41 Day
Total Net Assets:
$4.9 million
<TABLE>
<CAPTION>
Fund/Benchmark Average Annual Total Return
Since Inception
1 Year 5 Year (3/1/93)
<S> <C> <C> <C>
Monetta Government Money
Market Fund 5.23%** 4.84%** 4.69%**
Lipper US Gov't Money
Market Funds Avg.* 5.0% 4.5% 4.4%
</TABLE>
*Source Lipper Analytical Services, Inc.
[Performance Graph Appears Here]
<TABLE>
<CAPTION>
Measurement Period Gov't Money- Lipper
(Fiscal Year Covered) Market Fund Average
<S> <C> <C>
3/1/93 10,000 10,000
3/93 10,013 10,023
6/93 10,072 10,088
9/93 10,147 10,154
12/93 10,224 10,222
3/94 10,301 10,290
6/94 10,396 10,374
9/94 10,507 10,475
12/94 10,637 10,597
3/95 10,788 10,738
6/95 10,950 10,885
9/95 11,110 11,030
12/95 11,262 11,174
3/96 11,401 11,309
6/96 11,539 11,440
9/96 11,683 11,579
12/96 11,832 11,711
3/97 11,977 11,846
6/97 12,126 11,988
9/97 12,281 12,135
12/97 12,441 12,284
3/98 12,599 12,433
6/98 12,760 12,585
</TABLE>
Past performance is no guarantee of future results. **Total returns are net of
advisory fees waived and voluntary absorption of all or part of the Fund's
operating expenses by the Advisor. Had the advisory fee not been waived, the
7-day SEC yield would have been 4.80%, versus 5.17%. 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 at
bottom of Page 2.
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION ALLOCATION:
<S> <C>
Government Agencies 99.9%
Short-Term Investments, Net 0.01%
Total 100.0%
</TABLE>
COMMENTARY
For the six months ending June 30, 1998, the Monetta Government Money Market
Fund continued its outstanding performance by posting a return of 2.57%. The
Fund was ranked 17 out of 112 funds in the U. S. Government Money Market Fund
Category, as measured by Lipper Analytical Services for the one year ended June
30, 1998. For the five year ended June 30, 1998, the Fund ranked 6 out of 84
funds. The average return of the Lipper U. S. Government Fund category was
2.45%. As of June 30, 1998, the Fund's seven-day yield was 5.17% with an
average maturity of 41 days.
At the present time, the flatness of the yield curve does not warrant a longer
maturity risk.
Money market yields declined slightly over the past six months as evidenced by
the 60-85 day Federal Farm Credit Yield Curve which declined from 5.52% on
December 31, 1997, to 5.45% on June 30, 1998.
The Federal Reserve has not seen fit to provide any additional liquidity to
ease monetary policy because the soft landing scenario from the Asian crisis
has not manifested itself - at least not as of first quarter Gross National
Product numbers. The U. S. financial markets should begin to focus on domestic
fundamentals as Japan begins to get its house in order. This should include a
reduction in the government's short-term financing needs primarily due to
surpluses. Also, the early report card on second quarter Gross National
Product reflects a softer U. S. economic activity.
Our story has not changed - we expect slow growth and low inflation to shift
the Fed's bias from a tightening to an easing monetary policy. This suggest
lower rates with a more positively-sloped yield curve before year-end.
<PAGE>
Schedule of Investments (unaudited) June 30, 1998
<TABLE>
<CAPTION>
MONETTA FUND
Shares or Quoted
Principle Market Value
Amount (In Thousands)
<S> <C> <C> <C>
COMMON STOCK - 94.5%
Consumer Related - 38.4% $59,635
Broadcasting/Cable TV - 2.7%
*46,000 Metro Networks, Inc. $ 1,984
*220,000 VDI Media 2,145
4,129
Recreation/Entertainment - 3.7%
*100,000 Avis Rent A Car, Inc. 2,475
*100,000 Budget Group, Inc. - CL A 3,194
5,669
Restaurants/Lodging - 5.0%
*95,300 Ark Restaurants Corp. 1,144
*100,000 Hospitality Worldwide Svcs., Inc. 900
70,000 Innkeepers USA Trust 884
*150,000 Landry's Seafood Restaurants, Inc. 2,714
*100,000 Logan's Roadhouse, Inc. 2,075
7,717
Retail Manufacturers & Distribution - 8.3%
*60,000 Central Garden and Pet Co. 1,867
*110,000 Home Products Int'l., Inc. 1,279
*150,000 Industrial Distribution Group, Inc. 2,325
*60,000 Performance Food Group Co. 1,192
*97,500 Quaker Fabric Corp. 1,408
*155,000 Styling Technology Corp. 3,565
*60,000 Tefron Ltd. 1,320
12,956
Retail Trades - 3.2%
*40,000 Furniture Brands Int'l., Inc. 1,123
*75,000 Just For Feet, Inc. 2,137
*40,000 Stage Stores, Inc. 1,810
5,070
Miscellaneous - 15.5%
*45,000 American Business Info., Inc. CL A 686
*55,000 American Business Info., Inc. CL B 880
*41,000 BHI Corp. 1,620
*45,000 CKS Group, Inc. 810
*50,000 Consolidated Graphics, Inc. 2,950
*20,000 F.Y.I., Inc. 570
*173,000 FTI Consulting, Inc. 2,941
*90,000 FirstService Corp. 1,147
*175,000 Headway Corporate Resources, Inc. 2,078
*94,700 MAXIMUS, Inc. 2,723
*30,000 QRS Corp. 1,129
*50,000 SOS Staffing Services, Inc. 878
200,000 Schawk, Inc. 3,000
*290,000 Vestcom Int'l., Inc. 2,682
24,094
Industrial Related - 24.1% $37,490
Energy Resources & Services - 6.4%
*30,000 Atwood Oceanics, Inc. $ 1,194
*100,000 Hanover Compressor Co. 2,706
*180,000 Newpark Resources, Inc. 2,003
*200,000 Parker Drilling Co. 1,412
*100,000 Quanta Services, Inc. 1,469
*50,000 The Houston Exploration Co. 1,147
9,931
Housing - 0.7%
*50,000 American Homestar Corp. 1,197
Industrial & Electronics Products - 14.2%
*82,000 AFC Cable Systems, Inc. 2,911
*40,000 Advanced Lighting Technologies, Inc. 930
80,000 Applied Power, Inc. - CL A 2,750
*150,000 CMC Industries, Inc. 1,106
45,000 Chart Industries, Inc. 1,074
*55,000 FiberMark, Inc. 880
*127,100 JPM Co. 1,517
80,000 MascoTech, Inc. 1,920
*39,000 Mettler-Toledo Int'l., Inc. 782
*150,000 Pentacon, Inc. 1,781
20,000 Precision Castparts Corp. 1,068
*45,000 SPS Technologies, Inc. 2,633
70,000 Spartech Corp. 1,501
*75,000 Zomax Optical Media, Inc. 1,153
22,006
Mining/Mineral Resources - 0.3%
*50,000 Horizon Offshore, Inc. 491
Transportation - 1.4%
50,000 Expeditors Int'l. of Washington, Inc. 2,200
Miscellaneous - 1.1%
*80,000 Waste Industries, Inc. 1,665
Financial Related - 4.3% $6,649
Financial Services - 4.3%
*40,000 Affiliated Managers Group, Inc. $ 1,485
*47,300 First Int'l Bancorp, Inc. 680
*40,000 Golf Trust of America, Inc. 1,375
*150,000 Imperial Credit Commercial Mtg.
Investment 1,959
*65,000 LINC Capital, Inc. 1,150
6,649
Medical Related - 15.4% $23,837
Medical Supplies - 0.6%
50,000 Ballard Medical Products $ 900
Medical Technology - 3.4%
45,000 ADAC Laboratories 1,012
*60,000 SeaMED Corp. 1,065
*120,000 SteriGenics Int'l, Inc. 3,120
5,197
Pharmaceuticals - 7.1%
*120,000 ChiRex, Inc. 2,108
*141,600 D & K Healthcare Resources, Inc. 3,044
50,000 Jones Pharma, Inc. 1,656
*48,000 Medicis Pharmaceutical Corp. - CL A 1,752
*150,000 PharMerica, Inc. 1,809
*115,000 Vivus, Inc. 694
11,063
<PAGE>
Schedule of Investments (unaudited) June 30, 1998
MONETTA FUND (CONTINUED)
Shares or Quoted
Principle Market Value
Amount (In Thousands)
Physician Services - 4.3%
*150,000 Castle Dental Centers, Inc. 1,463
*87,000 Healthworld Corp. 1,077
*70,000 MedQuist, Inc. 2,021
*88,000 Sheridan Healthcare, Inc. 1,045
*63,000 Sterile Recoveries, Inc. 1,071
6,677
Technology Related - 12.3% $19,150
Computer Software and Systems - 0.9%
*65,000 Programmer's Paradise, Inc. $ 536
*30,000 QuadraMed Corp. 819
1,355
Computer/Office Equipment - 3.2%
*82,500 Norstan, Inc. 2,068
*150,000 ScanSource, Inc. 2,887
4,955
Semiconductors - 3.9%
*54,000 ATMI, Inc. 810
*75,500 Aavid Thermal Technologies, Inc. 2,208
*300,000 Aeroflex, Inc. 3,113
6,131
Telecommunications/Equipment - 4.3%
*50,000 Able Telcom Holding Corp. 900
*140,000 Comdial Corp. 1,698
*78,000 Dycom Industries, Inc. 2,632
*130,000 REMEC, Inc. 1,479
6,709
Total Common Stocks (Cost $129,386) (a) 146,761
Variable Demand Notes - 0.9%
67,100 General Mills - 5.27% 67
386,900 Johnson Controls - 5.27% 387
991,700 Warner Lambert - 5.25% 992
1,446
Commercial Paper - 5.5%
3,500,000 Merrill Lynch 5.53% Due 7/02/98 3,499
1,000,000 Merrill Lynch 5.53% Due 7/14/98 998
1,500,000 Banc One Funding 5.50% Due 7/15/98 1,497
1,500,000 Met Life Funding 5.51% Due 7/22/98 1,495
1,000,000 USAA Capital 5.50% Due 7/29/98 996
8,485
Total Short-Term Investments 9,931
Total Investments - 100.9% (Cost $139,317) (a) 156,692
Other Assets Less Liabilities - (0.9%) (1,468)
Net Assets - 100.0% $155,224
</TABLE>
(a) Cost is identical for book and tax purposes; the aggregate gross
unrealized appreciation is $24,656; and aggregate gross unrealized depreciation
is $7,281, resulting in net unrealized appreciation of $17,375 (in thousands).
See accompanying notes to financial statements.
*Non-income producing security.
<TABLE>
<CAPTION>
MONETTA SMALL-CAP EQUITY FUND
Shares or Quoted
Principle Market Value
Amount (In Thousands)
<S> <C> <C> <C>
COMMON STOCKS - 98.3%
Consumer Related - 42.1% $1,601
Broadcasting/Cable TV - 2.6%
*10,000 VDI Media $ 98
Recreation/Entertainment - 5.2%
*8,000 Avis Rent A Car, Inc. 198
Restaurants/Lodging - 4.3%
*9,000 Landry's Seafood Restaurants, Inc. 163
Retail Manufacturers & Distribution - 3.6%
*6,000 Styling Technology Corp. 138
Miscellaneous - 26.4%
*2,000 Consolidated Graphics, Inc. 118
*10,000 FTI Consulting, Inc. 170
*15,000 Headway Corporate Resources, Inc. 178
*5,000 MAXIMUS, Inc. 144
*6,000 SOS Staffing Services, Inc. 105
10,000 Schawk, Inc. 150
*15,000 Vestcom Int'l., Inc. 139
1,004
Industrial Related - 20.2% $770
Energy Resources & Services - 7.4%
*4,000 Hanover Compressor Co. $ 108
*5,000 Newpark Resources, Inc. 56
*8,000 Quanta Services, Inc. 117
281
Industrial & Electronics Products - 10.1%
*4,000 AFC Cable Systems, Inc. 142
*5,000 JPM Co. 60
*7,500 Pentacon, Inc. 89
*1,600 SPS Technologies, Inc. 94
385
Miscellaneous - 2.7%
*5,000 Waste Industries, Inc. 104
Medical Related - 18.6% $708
Medical Technology - 3.4%
*5,000 SteriGenics Int'l., Inc. $ 130
Pharmaceuticals - 12.6%
*7,000 ChiRex, Inc. 123
*7,000 D & K Healthcare Resources, Inc. 150
3,000 Jones Pharma, Inc. 99
*3,000 Medicis Pharmaceutical Corp.- CL A 109
481
Physician Services - 2.6%
*10,000 Castle Dental Centers, Inc. 97
Technology Related - 17.4% $660
Computer Software and Systems - 2.2%
*3,000 QuadraMed Corp. $ 82
<PAGE>
Schedule of Investments (unaudited) June 30, 1998
MONETTA SMALL-CAP EQUITY FUND
Shares or Quoted
Principle Market Value
Amount (In Thousands)
Computer/Office Equipment - 4.0%
*8,000 ScanSource, Inc. 154
Semiconductors - 4.1%
*15,000 Aeroflex, Inc. 156
Telecommunications/Equipment - 7.1%
*8,000 Comdial Corp. 97
*15,000 REMEC, Inc. 171
268
Total Common Stocks (Cost $3,492) (a) 3,739
Variable Demand Notes - 2.3%
53,700 Pitney Bowes - 5.27% 54
32,500 Warner Lambert - 5.25% 32
86
Total Investments - 100.6% (Cost $3,578) (a) 3,825
Other Assets Less Liabilities - (0.6)% (21)
Net Assets - 100.0% $3,804
</TABLE>
(a) Cost is identical for book and tax purposes; the aggregate gross
unrealized appreciation is $415, and aggregate gross unrealized depreciation is
$168, resulting in net unrealized appreciation of $247 (in thousands).
See accompanying notes to financial statements.
*Non-incoming producing security.
<TABLE>
<CAPTION>
MONETTA MID-CAP EQUITY FUND
Shares or Quoted
Principle Market Value
Amount (In Thousands)
<S> <C> <C> <C>
COMMON STOCK - 83.1%
Consumer Related - 31.2% $6,969
Food Processing - 1.5%
6,000 Dean Foods Co. $ 330
Recreation/Entertainment - 8.9%
*23,000 Budget Group, Inc. - CL A 734
*13,000 Galileo Int'l., Inc. 586
15,000 Hertz Corp. - CL A 665
1,985
Restaurants/Lodging - 3.1%
*25,000 Landry's Seafood Restaurants, Inc. 452
10,000 Patriot American Hospitality, Inc. 239
691
Retail Manufacturers & Distribution - 1.0%
*4,500 Revlon, Inc. - CL A 231
Retail Trades - 13.7%
*14,000 AutoZone, Inc. 447
6,000 Dillard's, Inc. - CL A 249
*10,000 Dominick's Supermarkets, Inc. 446
*15,000 Furniture Brands Int'l., Inc. 421
*20,000 Kmart Corp. 385
*14,000 Proffitt's, Inc. 565
*12,000 Stage Stores, Inc. 543
3,056
Miscellaneous - 3.0%
*3,700 Consolidated Graphics, Inc. 218
26,000 Shaw Industries, Inc. 458
676
Industrial Related - 34.7% $7,770
Chemicals - 1.8%
*20,000 NL Industries, Inc. $ 400
Energy Resources & Services - 11.7%
*22,000 BJ Services Co. 639
*20,000 Hanover Compressor Co. 541
*10,000 Input/Output, Inc. 178
*45,000 Newpark Resources, Inc. 501
*25,000 Parker Drilling Co. 177
*19,000 Sante Fe Int'l. Corp. 575
2,611
Industrial & Electronics Products - 15.0%
19,000 Applied Power, Inc. - CL A 653
10,500 B.F. Goodrich Co. 521
25,000 MascoTech, Inc. 600
*15,000 Mettler-Toledo Int'l., Inc. 301
12,000 Precision Castparts Corp. 641
*11,000 SPS Technologies, Inc. 643
3,359
Mining/Mineral Resources - 3.1%
*3,045 Alumax, Inc. 141
10,000 Reynolds Metals Co. 559
700
<PAGE>
Schedule of Investments (unaudited) June 30, 1998
MONETTA MID-CAP EQUITY FUND (CONTINUED)
Shares or Quoted
Principle Market Value
Amount (In Thousands)
Miscellaneous - 3.1%
8,000 Ball Corp. 322
8,000 Bowater, Inc. 378
700
Financial Related - 10.3% $2,295
Financial Services - 10.3%
*10,000 Affiliated Managers Group, Inc. $ 371
12,000 Bank United Corp. - CL A 575
*20,000 Imperial Credit Commercial Mtg. 261
Investment
14,000 Newcourt Credit Group, Inc. 689
*15,000 Security Capital Group Incorp. - CL A 399
2,295
Medical Related - 6.9% $1,553
Medical Supplies - 2.3%
10,000 Allegiance Corp. $ 513
Pharmaceuticals - 4.6%
*25,000 PharMerica, Inc. 302
*45,000 Vivus, Inc. 271
*10,000 Watson Pharmaceuticals, Inc. 467
1,040
Total Common Stocks (Cost $17,238) (a) $18,587
Variable Demand Notes - 3.3%
460,200 General Mills - 5.27% 460
60,300 Johnson Controls - 5.27% 60
216,100 Pitney Bowes - 5.27% 216
736
Commercial Paper - 19.2%
1,000,000 Progress Capital 5.52% Due 7/07/98 999
1,000,000 Met Life 5.49% Due 7/08/98 999
300,000 General Reinsurance Corp.
5.49% Due 7/10/98 300
1,000,000 Merrill Lynch 5.54% Due 7/13/98 998
1,000,000 New England Electric 5.51% Due 7/23/98 997
4,293
Total Short-Term Investments 5,029
Total Investments - 105.6% (Cost $22,267) (a) 23,616
Other Assets Less Liabilities (5.6%) (1,243)
Net Assets - 100.0% $22,373
</TABLE>
(a) Cost is identical for book and tax purposes; the aggregate gross
unrealized appreciation is $2,501, and the aggregate gross unrealized
depreciation is $1,152, resulting in net unrealized appreciation of $1,349 (in
thousands).
<TABLE>
<CAPTION>
MONETTA LARGE-CAP EQUITY FUND
Shares or Quoted
Principle Market Value
Amount (In Thousands)
<S> <C> <C> <C>
COMMON STOCK - 90.2%
Consumer Related - 29.9% $1,288
Broadcasting/Cable TV - 1.2%
600 Time Warner, Inc. $ 51
Food Processing - 0.6%
300 Coca-Cola Co. 26
Recreation/Entertainment - 7.0%
*3,700 Galileo Int'l., Inc. 167
3,000 Hertz Corp. - CL A 133
300
Restaurants/Lodging - 0.7%
400 McDonald's Corp. 28
Retail Manufacturers & Distribution - 3.3%
300 Procter & Gamble Co. 27
*1,000 Revlon, Inc. - CL A 51
2,000 Rubbermaid, Inc. 66
144
Retail Trades - 14.9%
*4,000 AutoZone, Inc. 128
800 CVS Corp. 31
*1,300 Fred Meyer, Inc. 55
500 Gap, Inc. 31
*10,000 Kmart Corp. 192
*500 Kohls Corp. 26
4,000 Limited, Inc. 132
*2,000 Toys 'R' Us, Inc. 47
642
Miscellaneous - 2.2%
2,000 Browning-Ferris Industries, Inc. 70
300 General Electric Co. 27
97
Industrial Related - 37.6% $1,623
Energy Resources & Services - 14.1%
*5,000 BJ Services Co. $ 145
1,000 Coastal Corp. 70
2,000 Diamond Offshore Drilling, Inc. 80
*4,000 Sante Fe Int'l. Corp. 121
1,000 Schlumberger Ltd. 68
2,000 Transocean Offshore, Inc. 89
2,100 Union Pacific Resources Group, Inc. 37
610
Industrial & Electronics Products - 9.5%
3,000 B.F. Goodrich Co. 149
2,400 Precision Castparts Corp. 128
1,900 Whirlpool Corp. 131
408
Mining/Mineral Resources - 6.7%
1,800 Aluminum Company of America 119
1,000 Nucor Corp. 46
2,200 Reynolds Metals Co. 123
288
<PAGE>
Schedule of Investments (unaudited) June 30, 1998
MONETTA LARGE-CAP EQUITY FUND (CONT.)
Shares or Quoted
Principle Market Value
Amount (In Thousands)
Miscellaneous - 7.3%
1,400 Georgia-Pacific Group 83
2,700 International Paper Co 116
3,100 Tenneco, Inc. 118
317
Financial Related - 5.9% $254
Financial Services - 5.9%
3,000 Newcourt Credit Group, Inc. $ 148
*4,000 Security Capital Group Incorp. - CL A 106
254
Medical Related - 5.9% $256
Medical Supplies - 2.3%
2,000 Allegiance Corp. $ 102
Pharmaceuticals - 3.6%
300 Pfizer, Inc. 33
400 Warner-Lambert Co. 28
*2,000 Watson Pharmaceuticals, Inc. 93
154
Technology Related - 10.9% $472
Computer Software and Systems - 0.8%
* 300 Microsoft Corp. $ 33
Computer/Office Equipment - 1.2%
500 Xerox Corp. 51
Semiconductors - 2.0%
*2,000 Applied Materials, Inc. 59
400 Intel Corp. 30
89
Telecommunications/Equipment - 6.9%
2,400 AT & T Corp. 137
*2,200 AirTouch Communications, Inc. 129
400 Lucent Technologies, Inc. 33
299
Total Common Stock (Cost $3,703) (a) $3,893
Variable Demand Notes - 6.8%
170,200 General Mills - 5.27% 170
102,300 Johnson Controls - 5.27% 102
19,900 Pitney Bowes - 5.27% 20
292
Commercial Paper - 4.6%
200,000 Merrill Lynch 5.54% Due 7/20/98 199
Total Short-Term Investments 491
Total Investments - 101.6% (Cost $4,194) (a) 4,384
Other Assets Less Liabilities (1.6%) (71)
Net Assets - 100.0% $4,313
</TABLE>
(a) Cost is identical for book and tax purposes; the aggregate gross
unrealized appreciation is $394, and aggregate gross unrealized depreciation is
$204, resulting in net unrealized appreciation of $190 (in thousands).
See accompanying notes to financial statements.
*Non-income producing security.
<TABLE>
<CAPTION>
MONETTA BALANCED FUND
Shares or Quoted
Principle Market Value
Amount (In Thousands)
<S> <C> <C> <C>
COMMON STOCK - 58.1%
Consumer Related - 23.2% $3,650
Broadcasting/Cable TV - 1.3%
*21,000 VDI Media $ 205
Food Processing - 0.5%
1,500 Dean Foods Co. 82
Recreation/Entertainment - 6.1%
*9,000 Avis Rent A Car, Inc. 223
*8,000 Budget Group, Inc. - CL A 255
*4,800 Galileo Int'l., Inc. 216
6,000 Hertz Corp. - CL A 266
960
Restaurants/Lodging - 0.8%
*7,000 Landry's Seafood Restaurants, Inc. 127
Retail Manufacturers & Distribution - 3.0%
*8,000 Industrial Distribution Group, Inc. 124
*10,000 Styling Technology Corp. 230
*5,000 Tefron Ltd. 110
464
Retail Trades - 2.8%
*6,000 AutoZone, Inc. 192
*13,000 Kmart Corp. 250
442
Miscellaneous - 8.7%
*2,500 BHI Corp. 99
*12,500 FTI Consulting, Inc. 213
*10,000 FirstService Corp. 127
*15,000 Headway Corporate Resources, Inc. 178
*3,500 MAXIMUS, Inc. 101
17,500 Schawk, Inc. 262
9,000 Shaw Industries, Inc. 159
*25,000 Vestcom Int'l., Inc. 231
1,370
Industrial Related - 20.0% $3,152
Energy Resources & Services - 7.3%
*5,000 BJ Services Co. $ 145
4,000 Diamond Offshore Drilling, Inc. 160
*6,000 Hanover Compressor Co. 162
*16,000 Newpark Resources, Inc. 178
*10,000 Quanta Services, Inc. 147
*5,000 Sante Fe Int'l. Corp. 151
4,600 Transocean Offshore, Inc. 205
1,148
Industrial & Electronics Products - 9.3%
*4,000 AFC Cable Systems, Inc. 142
7,000 Applied Power, Inc. - CL A 241
3,300 B.F. Goodrich Co. 164
*12,000 JPM Co. 143
6,000 MascoTech, Inc. 144
*6,000 Mettler-Toledo Int'l., Inc. 120
*10,000 Pentacon, Inc. 119
3,000 Precision Castparts Corp. 160
*4,000 SPS Technologies, Inc. 234
1,467
<PAGE>
Schedule of Investments (unaudited) June 30, 1998
MONETTA BALANCED FUND (CONTINUED)
Shares or Quoted
Principle Market Value
Amount (In Thousands)
Mining/Mineral Resources - 1.8%
2,000 Aluminum Company of America 132
2,600 Reynolds Metals Co. 145
277
Miscellaneous - 1.6%
2,500 International Paper Co. 108
4,000 Tenneco, Inc. 152
260
Financial Related - 3.9% $620
Financial Services - 3.9%
*3,500 Affiliated Managers Group, Inc. $ 130
*10,000 Imperial Credit Commercial
Mortgage Investment 131
4,600 Newcourt Credit Group, Inc. 226
*5,000 Security Capital Group Incorp.- CL A 133
620
Medical Related - 4.7% $742
Medical Supplies - 1.1%
3,500 Allegiance Corp. $ 179
Medical Technology - 1.0%
*6,000 SteriGenics Int'l, Inc. 156
Pharmaceuticals - 2.0%
*5,500 ChiRex, Inc. 97
*6,000 D & K Healthcare Resources, Inc. 129
*14,000 Vivus, Inc. 84
310
Physician Services - 0.6%
*10,000 Castle Dental Centers, Inc. 97
Technology Related - 6.2% $977
Computer/Office Equipment - 1.2%
*10,000 ScanSource, Inc. $ 192
Semiconductors - 1.5%
*23,000 Aeroflex, Inc. 239
Telecommunications/Equipment - 3.5%
4,000 AT & T Corp. 229
*12,000 Comdial Corp. 146
*15,000 REMEC, Inc. 171
546
Total Common Stock (Cost $8,646) (a) 9,141
Variable Demand Notes - 5.0%
166,300 American Family - 5.25% 166
93,800 General Mills - 5.27% 94
166,100 Johnson Controls - 5.27% 166
364,700 Pitney Bowes - 5.27% 365
791
U.S. Treasury Notes - 7.8%
100,000 6.000% Due 10-15-99 101
900,000 5.750% Due 11-15-00 905
220,000 6.250% Due 02-15-03 226
1,232
Corporate Bonds - 21.5%
450,000 Chase Manhattan Corp. 500
9.750% Due 11-01-01
300,000 ONT- Global Bond 317
7.375% Due 01-27-03
550,000 Eli Lilly 616
8.375% Due 02-07-05
500,000 U.S. West Capital Funding 503
6.295% Due 07-15-05
500,000 General Motors 532
7.100% Due 03-15-06
500,000 Dupont 572
8.250% Due 09-15-06
300,000 Bank United Corp 335
8.875% Due 05-01-07
3,375
Government Obligations - 5.1%
775,000 HUD Housing Urban Development
6.410% Due 08-01-05 806
Mortgage Obligations - 2.6%
400,000 Green Tree Home Imprv. Mortg.
6.780% Due 06-15-28 409
Total Investments - 100.1% (Cost $15,155) (a) 15,754
Other Assets Less Liabilities - (0.1%) (23)
Net Assets - 100.0% $15,731
</TABLE>
(a) Cost is identical for book and tax purposes; the aggregate gross
unrealized appreciation is $1,095; and aggregate gross unrealized depreciation
is $496; resulting in net unrealized appreciation of $599 (in thousands).
See accompanying notes to financial statements.
*Non-income producing securities.
<PAGE>
Schedule of Investments (unaudited) June 30, 1998
<TABLE>
<CAPTION>
MONETTA INTERMEDIATE BOND FUND
Shares or Quoted
Principle Market Value
Amount (In Thousands)
<S> <C> <C> <C>
Preferred Stock - 2.6%
4,000 SI Financing
9.5% Due 06/30/26 108
Treasury Notes - 18.9%
200,000 5.500% Due 04/15/00 200
200,000 6.625% Due 04/30/02 208
100,000 6.000% Due 07/31/02 102
200,000 5.750% Due 08/15/03 202
75,000 6.500% Due 05/15/05 79
791
Municipal Taxable Bond - 1.0%
40,000 Sheboygan, WI TIF #6
8.250% Due 03/15/03 43
Corporate Bonds - 64.6%
260,000 Pacific Gas & Electric
8.750% Due 01/01/01 276
150,000 First Chicago Corp.
11.250% Due 02/20/01 169
300,000 Chase Manhattan
9.750% Due 11/01/01 334
150,000 Smithkline Beech
6.625% Due 01/28/02 152
175,000 Associates Corp NA
6.875% Due 06/20/02 179
50,000 Dayton Hudson
9.750% Due 07/01/02 56
100,000 National Rural Utility
6.500% Due 09/15/02 102
100,000 RJR Nabisco, Inc.
8.625% Due 12/01/02 104
100,000 ONT-Global Bond
7.375% Due 01/27/03 106
125,000 Texaco Capital 8.500% Due 02/15/03 138
100,000 Webb, Del E.
9.750% Due 03/01/03 103
200,000 Money Store 8.375% Due 04/15/04 221
100,000 Niagara Mohawk Power
8.00% Due 06/01/04 108
125,000 Eli Lilly 8.375% Due 02/07/05 140
200,000 U.S. West Capital Fund
6.250% Due 07/15/05 201
100,000 Salomon, Inc. 6.750% Due 01/15/06 103
100,000 Bank United Corp. 8.875% Due 05/01/07 112
100,000 LCI Int'l., Inc. 7.250% Due 06/15/07 100
2,704
U. S. Government Agencies - 8.6%
250,000 HUD Housing Urban Development,
6.360% Due 08/01/04 258
100,000 Federal Home Loan Bank,
6.440% Due 11/28/05 104
362
Mortgage Obligations - 0.3%
12,763 GNMA 8.500% Due 07/15/21 14
Variable Demand Notes - 2.5%
13,000 American Family - 5.25% 13
40,600 Johnson Controls - 5.27% 40
50,700 Pitney Bowes - 5.27% 51
104
Total Investments - 98.5% (Cost $4,056) (a) 4,126
Other Assets and Liabilities - 1.5% 61
Net Assets - 100.0% $4,187
</TABLE>
(a) Cost is identical for book and tax purposes; the aggregate gross
unrealized appreciation is $70, and aggregate gross unrealized depreciation is
less than $1 thousand, resulting in net unrealized appreciation of $70 (in
thousands).
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
MONETTA GOVERNMENT MONEY MARKET FUND
Shares or Quoted
Principle Market Value
Amount (In Thousands)
<S> <C> <C> <C>
GOVERNMENT OBLIGATIONS - 99.9%
Federal Home Loan Bank - 31.8%
290,000 Due 07/13/98 $ 289
355,000 Due 08/03/98 353
260,000 Due 08/05/98 259
660,000 Due 09/08/98 653
1,554
Federal National Mortgage Assoc. - 32.6%
695,000 Due 07/06/98 695
507,000 Due 08/10/98 504
279,000 Due 09/16/98 276
122,000 Due 09/28/98 120
1,595
Federal Home Loan Mortgage Corp. - 35.5%
198,000 Due 07/08/98 198
220,000 Due 07/15/98 219
620,000 Due 08/17/98 616
100,000 Due 08/21/98 99
610,000 Due 08/27/98 605
1,737
Total Investments - 99.9% (Cost $4,886) (a) 4,886
Other Assets Less Liabilities - 0.1% 1
Net Assets - 100.0% $4,887
</TABLE>
(a) Cost is identical for book and tax purposes
See accompanying notes to financial statements.
<PAGE>
Statements of Assets and Liabilities
June 30, 1998 (unaudited)
(In Thousands)
<TABLE>
<CAPTION>
Small-Cap Mid-Cap
Monetta Equity Equity
Fund Fund Fund
Assets:
<S> <C> <C> <C>
Investments at market value (cost: $139,317;
$3,578; $22,267; $4,194; $15,155; $4,056;
$4,886) (Note 1) $156,692 $3,825 $23,616
Cash 0 (a) 0
Interest and dividends receivable 54 1 14
Receivable for securities sold 598 52 0
Total Assets 157,344 3,878 23,630
Liabilities:
Payables:
Custodial bank 524 0 26
Investment advisory fees (Note 2) 129 3 14
Distribution and service charges payable 0 2 62
Investments purchased 1,309 63 1,148
Fund shares redeemed 0 0 0
Accrued expenses 158 6 7
Total liabilities 2,120 74 1,257
Net assets $155,224 $3,804 $22,373
Analysis of net assets:
Paid in capital (b) 124,475 3,578 17,221
Accumulated undistributed net investment
income (loss) (532) (31) (25)
Accumulated undistributed net realized gain 13,906 10 3,778
Net unrealized appreciation on investments 17,375 247 1,349
Net assets $155,224 $3,804 $22,373
Net asset value, offering price, and redemption
price per share (8,894 shares of capital stock
and 263; 1,407; 308; 1,081; 397; 4,887 shares
of beneficial interest issued and outstanding
respectively) $17.45 $14.47 $15.91
</TABLE>
<TABLE>
<CAPTION>
Large-Cap Inter. Gov't
Equity Balanced Bond Money Market
Fund Fund Fund Fund
Assets:
<S> <C> <C> <C> <C>
Investments at market value (cost: $139,317;
$3,578; $22,267; $4,194; $15,155; $4,056;
$4,886) (Note 1) $4,384 $15,754 $4,126 $4,886
Cash (a) 0 0 7
Interest and dividends receivable 5 104 67 0
Receivable for securities sold 0 129 0 0
Total Assets 4,389 15,987 4,193 4,893
Liabilities:
Payables:
Custodial bank 0 38 1 0
Investment advisory fees (Note 2) 2 5 1 0
Distribution and service charges payable 8 18 2 0
Investments purchased 62 189 0 0
Fund shares redeemed 0 1 0 0
Accrued expenses 4 5 2 6
Total liabilities 76 256 6 6
Net assets $4,313 $15,731 $4,187 $4,887
Analysis of net assets:
Paid in capital (b) 3,626 14,455 4,097 4,887
Accumulated undistributed net investment
income (loss) (a) 7 5 0
Accumulated undistributed net realized gain 497 670 15 0
Net unrealized appreciation on investments 190 599 70 0
Net assets $4,313 $15,731 $4,187 $4,887
Net asset value, offering price, and redemption
price per share (8,894 shares of capital stock
and 263; 1,407; 308; 1,081; 397; 4,887 shares
of beneficial interest issued and outstanding
respectively) $14.01 $14.55 $10.53 $1.00
</TABLE>
See accompanying notes to financial statements.
(a) Rounds to less than $1,000.
(b) Amount for Monetta Fund represents $89 of $0.01 par value and $124,386 of
additional paid in capital, 100 million shares are authorized. Each fund of
Monetta Trust has an unlimited number of no par value share of beneficial
interest authorized.
<PAGE>
Statements of Operations
Six Months Ended June 30, 1998 (unaudited)
(In Thousands)
<TABLE>
<CAPTION>
Small-Cap Mid-Cap
Monetta Equity Equity
Fund Fund Fund
<S> <C> <C> <C>
Investment income and expenses:
Investment income:
Interest $321 $4 $106
Dividend 227 1 47
Other income 52 0 4
Total investment income 600 5 157
Expenses:
Investment advisory fee (Note 2) 832 12 84
Distribution expense 0 4 28
Custodial fees and bank cash management fee 26 1 5
Transfer & shareholder servicing agent fee 274 19 15
Other 0 0 0
Total expenses 1,132 36 132
Expenses waived and reimbursed 0 0 0
Expenses net of waived and reimbursed
expenses 1,132 36 132
Net investment income (loss) (532) (31) 25
Realized and unrealized gain on investments:
Realized gains on investments:
Proceeds from sales 84,828 2,546 15,658
Cost of securities sold 76,297 2,566 13,649
Net realized gain (loss) on investments 8,531 (20) 2,009
Net unrealized appreciation on investments:
Beginning of period 23,225 117 2,041
End of period 17,375 247 1,349
Net change in net unrealized appreciation
(depreciation) on investments during the
period (5,850) 130 (692)
Net realized and unrealized gain on
investments 2,681 110 1,317
Net increase in net assets from
operations $2,149 $79 $1,342
</TABLE>
<TABLE>
<CAPTION>
Large-Cap Inter. Gov't
Equity Balanced Bond Money Market
Fund Fund Fund Fund
<S> <C> <C> <C> <C>
Investment income and expenses:
Investment income:
Interest $20 $207 $132 $135
Dividend 17 22 3 0
Other income 0 0 (a) (a)
Total investment income 37 229 135 135
Expenses:
Investment advisory fee (Note 2) 16 30 7 6
Distribution expense 5 19 5 3
Custodial fees and bank cash
management fee 2 4 1 1
Transfer and shareholder servicing
agent fee 14 9 2 8
Other (a) (a) 0 0
Total expenses 37 62 16 18
Expenses waived and reimbursed 0 0 (4) (9)
Expenses net of waived and
reimbursed expenses 37 62 12 9
Net investment income (loss) (a) 167 123 126
Realized and unrealized gain on investments:
Realized gains on investments:
Proceeds from sales 3,043 6,305 847 13,943
Cost of securities sold 2,815 6,085 832 13,943
Net realized gain (loss) on
investments 228 220 15 0
Net unrealized appreciation on investments:
Beginning of period 199 351 57 0
End of period 190 599 70 0
Net change in net unrealized appreciation (depreciation)
on investments during the period (9) 248 13 0
Net realized and unrealized gain on
investments 219 468 28 0
Net increase in net assets from
operations $219 $635 $151 $126
</TABLE>
See accompanying notes to financial statements.
(a) Rounds to less than $1,000.
<PAGE>
Statements of Changes in Net Assets
Six Months Ended June 30, 1998 (unaudited) and Year Ended December 31, 1997
(In Thousands)
<TABLE>
<CAPTION>
Small-Cap Mid-Cap
Monetta Equity Equity
Fund Fund Fund
1998 1997 1998 1997** 1998 1997
<S> <C> <C> <C> <C> <C> <C>
From investment activities:
Operations:
Net investment income (loss) $(532) $(396) $(31) $(11) $25 $(56)
Net realized gain (loss) on
investments 8,531 31,669 (20) 140 2,009 6,384
Net change in net unrealized
appreciation (depreciation)
on investment during
the period (5,850) 5,097 130 117 (692) (1,142)
Net increase (decrease) in net
assets from operations 2,149 36,370 79 246 1,342 5,186
Distribution from net
investment income 0 0 0 0 0 (a)
Distribution from short-term
capital gains, net (b) 0 (15,860) 0 (99) 0 (1,696)
Distribution from net
realized gains 0 (6,981) 0 0 0 (3,032)
Increase (decrease) in net assets
from investment activities 2,149 13,529 79 147 1,342 458
From capital transactions (Note 3):
Proceeds from shares sold 5,728 13,641 1,460 2,498 1,034 5,590
Net asset value of shares issued
through dividend reinvestment 0 22,534 0 95 0 4,686
Cost of shares redeemed (16,068) (97,806) (253) (222) (1,911) (6,164)
Increase (decrease) in net assets
from capital transactions (10,340) (61,631) 1,207 2,371 (877) 4,112
Total increase (decrease)
in net assets (8,191) (48,102) 1,286 2,518 465 4,570
Net assets at beginning of
period 163,415 211,517 2,518 0 21,908 17,338
Net assets at end of period* $155,224 $163,415 $3,804 $2,518 $22,373 $21,908
</TABLE>
See accompanying notes to financial statements.
(a) Rounds to less than $1,000.
(b) Distributions of short-term capital gains are included as ordinary income
for tax purposes.
*Including undistributed net investment income at the beginning of the period
of $1 thousand, for the Mid-Cap Equity Fund.
**For period from 2/1/97 through 12/31/97.
<PAGE>
Statements of Changes in Net Assets
Six Months Ended June 30, 1998 (unaudited) and Year Ended December 31, 1997
(In Thousands)
<TABLE>
<CAPTION>
Large-Cap Intermediate Government
Equity Balanced Bond Money Market
Fund Fund Fund Fund
1998 1997 1998 1997 1998 1997 1998 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C>
From investment
activities:
Operations:
Net investment income
(loss) $(a) $(2) $167 $156 $123 $182 $126 $267
Net realized gain (loss) on
investments 228 831 220 1,171 15 18 0 0
Net change in net unrealized appreciation
(depreciation) on investments during
the period (9) (11) 248 236 13 70 0 0
Net increase (decrease) in net assets
from operations 219 818 635 1,563 151 270 126 267
Distribution from net investment
income 0 0 (162) (154) (119) (181) (126) (267)
Distribution from short-term capital
gains,net (b) 0 (296) 0 (676) 0 (14) 0 0
Distribution from net realized
gains 0 (275) 0 (56) 0 (a) 0 0
Increase (decrease) in net assets
from investment
activities 219 247 473 677 32 75 0 0
From capital transactions (Note 3):
Proceeds from shares
sold 483 2,135 4,280 9,742 829 1,371 3,376 6,338
Net asset value of shares issued
through dividend
reinvestment 0 559 91 618 109 170 122 252
Cost of shares
redeemed (654) (964) (1,167) (1,319) (716) (452) (3,074) (8,358)
Increase (decrease) in net
assets from capital
transactions (171) 1,730 3,204 9,041 222 1,089 424 (1,768)
Total increase (decrease) in net
assets 48 1,977 3,677 9,718 254 1,164 424 (1,768)
Net assets at beginning of
period 4,265 2,288 12,054 2,336 3,933 2,769 4,463 6,232
Net assets at end of
period* $4,313 $4,265 $15,731 $12,054 $4,187 $3,933 $4,887 $4,464
</TABLE>
See accompanying notes to financial statements.
(a) Rounds to less than $1,000.
(b) Distributions of short-term capital gains are included as ordinary income
for tax purposes.
*Including undistributed net investment income at the beginning of the period
of $2 thousand, for the Balanced Fund.
<PAGE>
Notes to Financial Statements June 30, 1998
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 the 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:
Small-Cap Equity Fund. The primary objective of this fund is capital
appreciation. The Fund typically invests in companies with a market
capitalization of less than $1 billion.
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 from 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 Mutual Funds is comprised of Monetta Fund, Inc., and each of
the Trust Series and is 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:
(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.
(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.
Other income primarily represents income received, as a member of a class of
plaintiffs, from the favorable settlement of class action suits, which arose in
connection with security holdings of the Funds in prior periods.
(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-term
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.
Distributions from net realized gains for book purposes may include short-term
capital gains, which are included as ordinary income for tax purposes.
<PAGE>
Notes to Financial Statements
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 the six months ended June 30, 1998,
remuneration required to be paid to all interested Directors or Trustees 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 1.0% for Monetta
Fund, 0.75% for the Small-Cap, Mid-Cap, and Large-Cap Equity Funds; 0.40% for
the Balanced Fund; 0.35% for Intermediate Bond Fund; and 0.25% for the
Government Money Market Fund. From these fees the Advisor pays all the Fund's
ordinary operating expenses other than the advisory fee, distribution charges
(Trust only) and charges of the Fund's custodian and transfer agent.
Investment advisory fees waived for the six months ended June 30, 1998, for the
Intermediate Bond Fund were $4,244 of total fees of $7,427. Investment
advisory fees waived, 12B-1 fees waived, and expenses paid by the Advisor
through June 30, 1998, for the Government Money Market Fund were $6,131, $2,452
and $330, respectively. Additionally, brokerage commissions of $2,765 were
paid by the Monetta Fund, to Monetta Investment Services, L.L.C. during the six
months ended June 30, 1998.
Shares Owned by the Advisor
<TABLE>
<CAPTION>
Monetta Small-Cap Mid-Cap Large-Cap
Fund Fund Fund Fund
<S> <C> <C> <C> <C>
Number of Shares 3.338 17,946 9,407 12,850
% of Fund 0.04% 6.82% 0.67% 4.17%
</TABLE>
<TABLE>
<CAPTION>
Balanced Intermediate Bond Government Money
Fund Fund Fund
<S> <C> <C> <C>
Number of Shares 60,525 80,956 525,180
% of Fund 5.60% 20.37% 10.75%
3.CAPITAL STOCK AND SHARE UNITS:
There are 100,000,000 shares of $0.01 par value capital stock authorized for
the Monetta Fund. There is an unlimited number of no par value shares of
beneficial interest authorized for each series of the Trust.
</TABLE>
<TABLE>
<CAPTION>
Small-Cap Mid-Cap Large-Cap Inter. Gov't Money
Monetta Equity Equity Equity Balanced Bond Market
(In Thousands) Fund Fund* Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C> <C>
1997 beginning shares 13,352 0 1,170 187 185 271 6,232
Shares sold 752 190 341 161 723 133 6,338
Shares issued upon
dividend reinvestment 1,289 7 315 42 43 17 252
Shares redeemed (5,933) (16) (363) (71) (95) (44) (8,358)
Net increase (decrease) in
shares outstanding (3,892) 181 293 132 671 106 (1,768)
1998 beginning shares 9,460 181 1,463 319 856 377 4,464
Shares sold 312 99 65 35 298 79 3,375
Shares issued upon
dividend reinvestment 0 0 0 0 6 10 122
Shares redeemed (878) (17) (121) (46) (79) (68) (3,074)
Net increase (decrease) in
shares outstanding (566) 82 (56) (11) 225 21 423
Ending shares 8,894 263 1,407 308 1,081 397 4,887
</TABLE>
* Inception date February 1, 1997
4. PURCHASES AND SALES OF INVESTMENT SECURITIES:
The cost of purchases and proceeds from sales of securities for the six months
ended June 30, 1998, excluding short-term securities were: Monetta Fund
$72,454,712 and $84,828,133; Small-Cap Fund $3,738,268 and $2,546,400;
Mid-Cap Fund $12,458,894 and $15,658,112; Large-Cap Fund $2,783,011 and
$3,042,739; Balanced Fund $9,372,043 and $6,304,931; and Intermediate Bond
Fund $2,223,833 and $846,887. The costof purchases and proceeds from the
sales of government securities included in the preceding numbers were as
follows: Balanced Fund $0 and $455,766; and Intermediate Bond Fund $79,875
and $221,438.
5. DISTRIBUTION PLAN:
The Trust and its shareholders have adopted a service and distribution plan
(the "Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940.
The Plan permits the participating Funds to pay certain expenses associated
with the distribution of their shares. Annual fees under the Plan of up to
0.25% for the Small-Cap, Mid-Cap, Large-Cap, Balanced, and Intermediate Funds
and up to 0.10% for the Government Money Market Fund are accrued daily. The
distributor is Funds Distributor, Inc.
<PAGE>
Notes to Financial Statements
6. FINANCIAL HIGHLIGHTS:
Financial highlights for Monetta Fund for a share of capital stock outstanding
throughout the period is presented below:
<TABLE>
<CAPTION>
MONETTA FUND
Six Months
Ended 6/30/98
(unaudited) 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net asset value at
beginning of period $17.274 $15.842 $15.591 $14.515 $15.539
Net investment income
(loss) (0.058) (0.041) (0.079) 0.029 (0.026)
Net realized and
unrealized gain (loss)
on investments 0.236 4.223 0.330 4.075 (0.938)
Total from investment
operations: 0.178 4.182 0.251 4.104 (0.964)
Less:
Distributions from net
investment income 0.000 0.000 0.000 (0.028) 0.000
Distributions from short-
term capital gains,net(a) 0.000 (1.910) 0.000 (3.000) (0.060)
Distributions from net
realized gains 0.000 (0.840) 0.000 0.000 0.000
Total distributions 0.000 (2.750) 0.000 (3.028) (0.060)
Net asset value at end of
period $17.452 $17.274 $15.842 $15.591 $14.515
Total return 1.04%** 26.18% 1.60% 28.02% (6.21%)
Ratio to average net assets:
Expenses* 1.37% 1.48% 1.38% 1.36% 1.35%
Net investment income* (0.32%) (0.24%) (0.51%) 0.18% (0.15%)
Portfolio turnover 47.0%** 97.8% 204.8% 272.0% 191.3%
Net assets ($ millions) $155.2 $163.4 $211.5 $362.7 $364.9
</TABLE>
<TABLE>
<CAPTION>
MONETTA FUND
1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C>
Net asset value at
beginning of period $15.992 $15.731 $10.963 $10.441 $9.933 $9.649
Net investment
income (loss) (0.28) 0.006 0.081 0.103 0.219 0.106
Net realized and unrealized
gain (loss) on investments 0.105 0.855 6.037 1.106 1.274 2.158
Total from investment
operations: 0.077 0.861 6.118 1.209 1.493 2.264
Less:
Distributions from net
investment income 0.000 (0.006) (0.081) (0.103) (0.219) (0.106)
Distributions from short-term
capital gains, net(a) (0.475) (0.594) (1.208) (0.584) (0.766) (1.874)
Distributions from net
realized gains (0.055) 0.000 (0.061) 0.000 0.000 0.000
Total Distribution (0.530 (0.600) (1.350) (0.687) (0.985) (1.980)
Net assest value at
end of period $15.539 $15.992 $15.731 $10.963 $10.441 $9.933
Total return 0.49% 5.49% 55.90% 11.37% 15.20% 23.07%
Ratio to average net assets:
Expenses* 1.38% 1.45% 1.42% 1.50% 1.57% 1.50%
Net Investment income* (0.19%) 0.16% 0.93% 1.09% 2.18% 0.96%
Portfolio turnover 226.9% 126.6% 153.8% 206.5% 258.4% 170.4%
Net assets ($millions) $524.3 $408.0 $57.1 $6.1 $3.5 $2.6
</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% and 1.92%, respectively.
** Not annualized.
(a) Distributions of short-term capital gains are included as ordinary income
for tax purposes.
(b) 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, except distributions which are based on shares
outstanding at record date.
<PAGE>
Notes to Financial Statements
Financial highlights for each Fund of the Trust for a share outstanding
throughout the period are as follows:
<TABLE>
<CAPTION>
Small-Cap Mid-Cap
Equity Fund Equity Fund
Six Months 2/1/97 Six Months
Ended 6/30/98 Through Ended 6/30/98
(unaudited) 12/31/97 (unaudited)
<S> <C> <C> <C>
Net asset value at beginning of period $13.900 $10.000 $14.975
Net investment income (loss) (0.139) (0.148) (0.018)
Net realized and unrealized gain (loss)
on investments 0.705 4.878 0.912
Total from investment operations 0.566 4.730 0.930
Less:
Distributions from net investment
income 0.000 0.000 0.000
Distributions from short-term capital
gains, net (a) 0.000 (0.830) 0.000
Distributions from net realized gains 0.000 0.000 0.000
Total distributions 0.000 (0.830) 0.000
Net asset value at end of period 14.466 $13.900 15.905
Total return* 4.10%** 47.17% 6.21%**
Ratios to average net assets:
Expenses 2.26% 1.75% 1.18%
Net investment income (0.95%)** (1.13%) 0.11%**
Portfolio turnover 83.1%** 138.8% 66.5%
Net assets ($ thousands) $3,804 $2,518 $22,373
</TABLE>
<TABLE>
<CAPTION>
Mid-Cap
Equity Fund
3/1/93
Through
1997 1996 1995 1994 12/31/93
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period $14.814 $11.962 $12.199 $12.537 $10.000
Net investment income (loss) (0.045) 0.044 0.059 0.071 0.006
Net realized and unrealized gain (loss)
on investments 4.296 2.852 2.874 0.193 3.531
Total from investment operations 4.251 2.896 2.933 0.264 3.537
Less:
Distributions from net investment
income 0.000 (0.044) (0.050) (0.069) (0.006)
Distributions from short-term capital
gains, net (a) (1.452) 0.000 (2.990) (0.533) (0.994)
Distributions from net realized gains (2.638) 0.000 (0.130) 0.000 0.000
Total distributions (4.090) (0.044) (3.170) (0.602) (1.000)
Net asset value at end of period $14.975 $14.814 $11.962 $12.199 $12.537
Total return* 29.14% 24.20% 24.54% 2.17% 35.40%
Ratios to average net assets:
Expenses 1.26% 1.23% 1.25% 1.30% 1.12%
Net investment income (0.28%) 0.32% 0.44% 0.57% 0.07%
Portfolio turnover 137.8% 93.3% 254.4% 210.0% 128.1%
Net assets ($ thousands) $21,908 $17,338 $14,216 $11,736 $9,841
</TABLE>
* Ratios and total return for the year of inception are calculated from the
date of inception to the end of the period.
** Not annualized.
(a) Distributions of short-term capital gains are included as ordinary income
for tax purposes.
(b) 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, except distributions that are based on shares
outstanding at record date.
<PAGE>
Notes to Financial Statements
Monetta Trust Continued:
<TABLE>
<CAPTION>
Large-Cap
Equity Fund
Six Months 9/1/95
Ended 6/30/98 Through
(unaudited) 1997 1996 12/31/95
<S> <C> <C> <C> <C>
Net asset value at beginning of period $13.359 $12.266 $10.571 $10.000
Net investment income (0.001) (0.007) 0.023 0.005
Net realized and unrealized gain (loss)
on investments 0.649 3.250 2.928 0.570
Total from investment operations 0.648 3.243 2.951 0.575
Less:
Distributions from net investment
income 0.000 0.000 (0.023) (0.004)
Distributions from short-term capital
gains, net (a) 0.000 (1.113) (1.188) 0.000
Distributions from net realized gains 0.000 (1.037) (0.045) 0.000
Total distributions 0.000 (2.150) (1.256) (0.004)
Net asset value at end of period 14.007 $13.359 $12.266 $10.571
Total return* 4.87%** 26.64% 28.20% 5.74%
Ratios to average net assets:
Expenses 1.71% 1.51% 1.51% 0.69%
Net investment income (0.01%)** (0.05%) 0.31% 0.05%
Portfolio turnover 74.8%** 123.2% 152.7% 38.2%
Net assets ($ thousands) $4,313 $4,265 $2,288 $1,072
</TABLE>
<TABLE>
<CAPTION>
Balanced
Fund
Six Months 9/1/95
Ended 6/30/98 Through
(unaudited) 1997 1996 12/31/95
<S> <C> <C> <C> <C>
Net asset value at beginning of period $14.078 $12.643 $10.605 $10.000
Net investment income 0.161 0.264 0.132 0.009
Net realized and unrealized gain (loss)
on investments 0.466 2.398 2.598 0.602
Total from investment operations 0.627 2.662 2.730 0.611
Less:
Distributions from net investment
income (0.150) (0.224) (0.132) (0.004)
Distributions from short-term capital
gains, net (a) 0.000 (0.927) (0.560) (0.002)
Distributions from net realized gains 0.000 (0.076) 0.000 0.000
Total distributions (0.150) (1.227) (0.692) (0.006)
Net asset value at end of period $14.555 $14.078 $12.643 $10.605
Total return* 4.39%** 21.21% 25.94% 6.16%
Ratios to average net assets:
Expenses 0.83% 1.02% 1.40% 0.91%
Net investment income 1.10%** 1.88% 1.54% 0.08%
Portfolio turnover 46.0%** 115.9% 117.8% 54.8%
Net assets ($ thousands) $15,731 $12,054 $2,336 $410
</TABLE>
*Ratios and total return for the year of inception are calculated from the date
of inception to the end of the period.
** Not annualized.
(a) Distributions of short-term capital gains are included as ordinary income
for tax purposes.
(b) 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, except distributions that are based on shares
outstanding at record date.
<PAGE>
Notes to Financial Statements
Monetta Trust Continued:
<TABLE>
<CAPTION>
Intermediate
Bond Fund
Six Months 3/5/93
Ended 6/30/98 Through
(unaudited) 1997 1996 1995
<S> <C> <C> <C> <C>
Net asset value at beginning of period 10.445 $10.208 $10.244 $9.624
Net investment income 0.302 0.599 0.612 0.655
Net realized and unrealized gain (loss)
on investments 0.077 0.278 0.019 0.740
Total from investment operations 0.379 0.877 0.631 1.395
Less:
Distributions from net
investment income (0.290) (0.592) (0.612) (0.655)
Distributions from short-term capital
gains, net (a) 0.000 (0.047) (0.055) (0.120)
Distributions from net
realized gains 0.000 (0.001) 0.000 0.000
Total distributions (0.290) (0.640) (0.667) (0.775)
Net asset value at end of period $10.534 $10.445 $10.208 $10.244
Total return* 3.58%** 8.91% 6.46% 14.84%
Ratios to average net assets:
Expenses - Net 0.54% 0.65% 0.55% 0.27%
Expenses - Gross (b) 0.64% 0.87% 0.85% 0.75%
Net investment income 2.87%** 5.82% 5.75% 5.94%
Net investment income-Gross (b) 2.77%** 5.60% 5.45% 5.46%
Portfolio turnover 16.3%** 96.7% 28.9% 75.1%
Net assets ($ thousands) $4,187 $3,933 $2,769 $3,589
</TABLE>
<TABLE>
<CAPTION>
Intermediate
Bond Fund
Continued
3/05/93
Through
1994 12/31/93
<S> <C> <C>
Net asset value at beginning of period $10.345 $10.000
Net investment income 0.589 0.357
Net realized and unrealized gain (loss)
on investments (.690) 0.447
Total from investment operations (0.101) 0.804
Less:
Distributions from net investment income (0.580) (0.357)
Distributions from short-term capital (0.040) (0.102)
Distributions from net realized gains 0.000 0.000
Total distributions (0.620) (0.459)
Net asset value at end of period $9.624 $10.345
Total return* (1.04%) 8.17%
Ratios to average net assets:
Expenses - Net 0.28% 0.28%
Expenses - Gross (b) 0.88% 0.75%
Net investment income 5.94% 4.13%
Net investment income - Gross (b) 5.34% 3.66%
Portfolio turnover 94.5% 32.3%
Net assets ($ thousands) $3,010 $2,959
</TABLE>
* Ratios and total return for year of inception are calculated from date of
inception to the end of the period.
** Not annualized.
(a) Distributions of short-term capital gains are included as ordinary income
for tax purposes.
(b) Ratios of expenses and net income adjusted to reflect investment advisory
fees and charges of the Trust's custodian and transfer agent assumed by the
investment advisor.
The per share rates are calculated using the weighted average number of shares
outstanding during the period, except distributions which are based on shares
outstanding at record date.
<PAGE>
Notes To Financial Statements
Monetta Trust Continued:
<TABLE>
<CAPTION>
Government Money
Market Fund
Six Months 3/1/93
Ended 6/30/98 Through
(unaudited) 1997 1996 1995 1994 12/31/93
<S> <C> <C> <C> <C> <C> <C>
Net asset value at
beginning of period 1.000 $1.000 $1.000 $1.000 $1.000 $1.000
Net investment income 0.025 0.050 0.049 0.059 0.040 0.023
Net realized and
unrealized gain (loss)
on investments 0.000 0.000 0.000 0.000 0.000 0.000
Total from investment
operations 0.025 0.050 0.049 0.059 0.040 0.023
Less:
Distributions from net
investment income (0.025) (0.050) (0.049) (0.059) (0.040) (0.023)
Distributions from
short-term capital
gains, net 0.000 0.000 0.000 0.000 0.000 0.000
Distributions from
net realized gains 0.000 0.000 0.000 0.000 0.000 0.000
Total distributions (0.025) (0.050) (0.049) (0.059) (0.040) (0.023)
Net asset value at
end of period $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
Total return* 2.57%** 5.15% 5.06% 5.87% 4.04% 2.21%
Ratios to average net assets:
Expenses - Net 0.37% 0.39% 0.31% 0.07% 0.0% 0.03%
Expenses - Gross (a) 0.73% 0.76% 0.67% 0.59% 0.66% 0.69%
Net investment income 2.54%** 5.02% 4.95% 5.69% 4.04% 2.32%
Net investment
income - Gross (a) 2.36%** 4.65% 4.59% 5.17% 3.39% 1.66%
Net assets ($ thousands) $4,887 $4,464 $6,232 $4,393 $3,315 $1,859
</TABLE>
* Ratios and total return for year of inception are calculated from date of
inception to the end of the period.
** Not annualized.
(a) Ratios of expenses and net income adjusted to reflect investment advisory
fees and charges of the Trust's custodian and transfer agent assumed by the
investment advisor.
The per share rates are calculated using the weighted average number of shares
outstanding during the period, except distributions which are based on shares
outstanding at record date.
<PAGE>
Semi-Annual Report
June 30, 1998
MONETTA FAMILY OF MUTUAL FUNDS
Monetta Fund, Inc.
Monetta Small-Cap Equity Fund
Monetta Mid-Cap Equity Fund
Monetta Large-Cap Equity Fund
Monetta Balanced Fund
Monetta Intermediate Bond Fund
Monetta Government Money Market Fund
No-Load
Mutual Funds
Monetta Family of Mutual Funds
1776-A South Naperville Road
Suite 100
Wheaton, Illinois 60187
1-800-MONETTA (666-3882)
www.monetta.com
Distributed by Funds Distributor, Inc.