THE LINDBERGH SIGNATURE FUND
SEMI-Annual Report
February 29, 2000
(Unaudited)
<PAGE>
April 24, 2000
Dear Fellow Shareholders:
As the Lindbergh Signature Fund proceeds through its first year, every event is
naturally a milestone. I am, thus, very pleased to write the first of the many
letters that will accompany the fund's reports!
Much of our time during the fund's first semiannual period was spent on
operational details. While the Signature Fund was declared effective on
September 30, 1999, it didn't accept investments from outside shareholders until
mid-February. Why the delay?
In early November, Charles Schwab & Company notified us that they would consider
making the fund available through their Mutual Fund MarketPlace(R). Given the
advantages of working with Schwab, we decided to delay investments in the fund
until arrangements with Schwab were in place.
Schwab approved the fund for inclusion in its fund marketplace in early
December. However, because of Y2K considerations and other new year issues,
Schwab temporarily stopped adding to its system all recently approved funds,
including the Lindbergh Signature Fund. In late January, Schwab removed the hold
and we were notified that Signature Fund shares were available for purchase
through Schwab.
With the Schwab arrangement in place, Signature Fund shares were offered to
outside investors. As a result, the vast majority of the fund shares were
purchased the last few weeks of February just as the first semiannual period was
coming to an end on February 29th. Given this fact, there's little need to delve
into the specifics of the fund's performance other than to say it is performing
as expected.
In managing the fund's investment portfolio, the most important consideration at
this point is the Federal Reserve's effort to slow economic growth through a
more restrictive monetary policy. History shows that similar cycles of monetary
restraint have, at the very least, generated considerable market turmoil and, in
many instances, have precipitated steep stock market downturns. Whether history
repeats itself in the current cycle, only time will tell.
Nevertheless, the historical experience suggests that, in the current policy
environment, a less aggressive portfolio structure offers the best potential for
realizing the fund's capital appreciation objective. This view is further
confirmed by the score of Lindbergh's Market Meter(TM), which is in the "Sell"
mode.
For these reasons, the fund's portfolio is more defensively structured.
Currently, equities and equity equivalents, such as stock index future
contracts, comprise around 25% of fund assets. Most of the remaining assets are
invested in the safety of U.S. Treasury bills.
In conclusion, these are interesting times demanding careful attention. But with
the Signature Fund as our vehicle, we'll be proceeding on this journey together.
While this is the first report, I look forward to many more as we track the
fund's progress towards its financial objective.
Respectfully yours,
Dewayne Wiggins, President
Lindbergh Funds
<PAGE>
SCHEDULE OF INVESTMENTS
As of February 29, 2000 (Unaudited)
COMMON STOCKS - 9.72%
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Number of shares Market value
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Banks - 0.51%
1,290 Citigroup Inc................................ $ 66,435
Communication - 0.49%
1,430 MCI Worldcom Inc.*............................ 63,814
Computer Services and Software - 3.14%
1,010 Cisco Systems Inc.*........................... 133,509
1,110 EMC Corp.*.................................... 132,090
700 Microsoft Corp.*.............................. 62,562
1,080 Oracle Corp.*................................. 80,190
Diversified Conglomerate - 0.51%
1,740 TYCO International ........................... 66,011
Drugs & Healthcare - 0.94%
860 Johnson & Johnson............................ 61,705
1,750 Schering-Plough Corp.......................... 61,250
Electronic Equipment - 0.54%
410 Motorola Inc.................................. 69,905
Entertainment - 0.24%
1,100 Carnival Corp................................. 31,694
Insurance - 0.52%
770 American International Group.................. 68,097
Marketing - 0.47%
1,510 Interpublic Group of Co. Inc.................. 60,683
Medical Instruments - 0.78%
2,060 Biomet, Inc................................... 67,980
1,200 Teleflex Inc.................................. 33,900
Retail Stores - 1.58%
1,480 Gap Inc....................................... 71,503
1,390 WalMart Stores, Inc........................... 67,676
2,550 Walgreen Company.............................. 65,822
Total Common Stock (Cost $1,262,538).......... 1,264,826
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* Non-income producing securities.
The accompanying notes are an integral part of these financial statements.
<PAGE>
SCHEDULE OF INVESTMENTS
As of February 29, 2000 (Unaudited)
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<S> <C> <C>
U.S. Government Securities - 88.69%
11,720,000 U.S. Treasury 5.59%, 06/08/2000................................. 11,540,540
Total U.S. Government Securities (Cost $11,540,540)............. 11,540,540
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Short-term Investments - 1.20%
156,246 UMB Money Market Fiduciary Fund................................. 156,246
Total Short-Term Investments (Cost $156,246).................... 156,246
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TOTAL INVESTMENTS - 99.61% (Identified Cost $12,959,324)........ $ 12,961,612
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OTHER ASSETS AND LIABILITIES, NET - 0.39% ..................... 50,377
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Net Assets - 100% ........................................ $ 13,011,989
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</TABLE>
* Non-income producing securities.
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
As of February 29, 2000 (Unaudited)
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<S> <C> <C>
ASSETS
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Amount
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Investments, At Value (Cost $12,959,324) .................................. $ 12,961,612
Interest Receivable........................................................ 20,260
Dividend Receivable........................................................ 5
Other Assets............................................................... 36,450
Due From Adviser .......................................................... 354
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Total Assets .............................................................. 13,018,681
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LIABILITIES
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Amount
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Accrued Expenses........................................................... 5,419
Other Liabilities.......................................................... 1,273
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Total Liabilities ......................................................... 6,692
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Net Assets ................................................................ 13,011,989
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SOURCES OF NET ASSETS
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Amount
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At February 29, 2000, Net Assets Consist of:
Paid-In Capital ........................................................... 12,939,840
Accumulated Undistributed Net Investment Income ........................... 17,077
Unrealized Appreciation In Value of Investments ........................... 47,741
Accumulated Undistributed Net Realized Gain on Investments ................ 7,331
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Net Assets ................................................................ $ 13,011,989
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Shares of Capital Stock Outstanding (No Par Value, Unlimited Shares Authorized) 126,733
Net Asset Value, Offering and Redemption Price Per Share (13,011,989/126,733 Shares) $ 102.67
========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENT OF OPERATIONS
For the period October 1, 1999 to February 29, 2000 (Unaudited)
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<S> <C> <C>
INVESTMENT INCOME
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Amount
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Interest .................................................................. $ 43,557
Dividends ................................................................. 5
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Total Income .............................................................. 43,562
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EXPENSES
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Amount
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Investment Advisory Fees (Note 3).......................................... 5,419
Transfer Agent Fees........................................................ 2,250
Administration Fees ....................................................... 3,000
Accounting Fees............................................................ 3,000
Custody Fees............................................................... 370
Out of Pocket Fees......................................................... 493
Insurance Fees............................................................. 1,100
Legal Fees ................................................................ 22,245
Audit Fees ................................................................ 1,050
Trustee Fees .............................................................. 2,250
Registration Expense ...................................................... 2,445
Miscellaneous Expense ..................................................... 2,672
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Total Expenses............................................................. 46,294
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Expenses Waived and Reimbursement by Adviser (Note 3)...................... (41,884)
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Net Expenses .............................................................. 4,410
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Net Investment Income...................................................... 39,152
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REALIZED AND UNREALIZED GAIN ON INVESTMENTS
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Amount
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Net Realized Gain on Investments........................................... 22
Net Realized Gain on Futures Contracts..................................... 7,308
Change In Unrealized Appreciation of Investments .......................... 47,741
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Net Realized and Unrealized Gain on Investments............................ 55,071
Increase In Net Assets Resulting From Operations .......................... $ 94,223
=======
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the period October 1, 1999 to February 29, 2000 (Unaudited)
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<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
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Period ended
Feb. 29, 2000
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Operations:
Net Investment Income ................................... $ 39,152
Net Change In Unrealized Appreciation of Investments ... 47,741
Net Realized Gain (Loss) on Investments ................. 7,330
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Increase In Net Assets Resulting From Operations ........ 94,223
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Distributions to Shareholders
Net Realized Gains ...................................... (125)
Net Investment Income.................................... (21,950)
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Total Net Increase ..................................... 72,148
Capital Share Transactions:
Proceeds From Shares Sold ............................... 12,817,766
Dividend Reinvested ..................................... 22,075
Cost of Shares Redeemed.................................. ---
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Increase (Decrease) in Net Assets Resulting From Capital
Share Transactions....................................... 12,839,841
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Total Increase In Net Assets............................. 12,911,989
Net Assets:
Beginning of Period ..................................... 100,000
End of Period
(Including Accumulated Undistributed Net Investment
Income of $39,152) ............................... $ 13,011,989
==========
Transactions In Fund Shares:
Shares Sold ............................................. 126,519
Shares Reinvested........................................ 214
Shares Redeemed.......................................... ---
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Net Increase In Number of Shares Outstanding ............ 126,733
=======
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
FINANCIAL HIGHLIGHTS
(Unaudited)
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<S> <C> <C>
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Period ended
Feb. 29, 2000 (A)
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Per Share Operating Performance:
Net Asset Value, Beginning .............................. $ 100.00
Income From Investment Operations:
Net Investment Income .................................. 2.53
Net Realized and Unrealized Gain (Loss) on Investments... 1.86
----
Total From Investment Operations......................... 4.39
Less Distributions:
Dividends From Realized Gains ........................... (0.01)
Dividend From Net Investment Income...................... (1.71)
------
Total Distribution ...................................... (1.72)
Net Asset Value At End of Period ........................ $ 102.67
======
Total Return (C)........................................ 4.38%
Ratios/Supplemental Data:
Net Assets, End of Period................................ $ 13,011,989
Ratio of Expenses to Average Net Assets:
Before Reimbursement of Expenses by Adviser (B).......... 5.58%
After Reimbursement of Expenses by Adviser (B)........... 0.53%
Ratio of Net Investment Income to Average Net Assets:
Before Reimbursement of Expenses by Adviser (B).......... (0.32)%
After Reimbursement of Expenses by Adviser (B)........... 4.72%
Portfolio Turnover ...................................... 0.00%
(A) For the period October 1, 1999 (Commencement of Operations) to February 29, 2000.
(B) Annualized.
(C) Not annualized
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
February 29, 2000 (Unaudited)
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Note 1 - GENERAL
The Lindbergh Signature Fund (the "Fund") is organized as a series of Lindbergh
Funds, a Massachusetts business trust, pursuant to a trust agreement dated June
16, 1999. The Lindbergh Signature Fund's primary objective is to increase the
value of your investment over the long-term through capital appreciation and
earned income. Capital preservation is an important but secondary objective. The
Fund seeks to achieve this objective by investing in common stocks, bonds and
money market instruments in proportions consistent with their expected returns
and risk as assessed by the Fund's adviser, Lindbergh Capital Management, Inc.
(the "Adviser"). In evaluating potential risk and return tradeoffs, the Adviser
reviews general macro-economic conditions, Federal Reserve policy and employs
various analytical models.
When, in the Adviser's judgement, conditions are favorable for stock investment,
the fund will normally be fully invested in commons stocks. If however, in the
Adviser's view, stock market conditions are less favorable for investors, all or
a portion of the fund assets will be shifted out of stocks and into such fixed
income investments as bonds and cash. The Fund is permitted to be 100% invested
in any one of the three asset classes - stocks, bonds, or cash.
The Fund may enter into "Futures contracts" and financial indexes. The Fund
invests in index futures contracts for several reasons, including their use as a
tool when reallocating assets among stocks, bonds and cash investments. The use
of futures contracts and options may involve risks, such as the possibility of
illiquid markets or imperfect correlation between the value of the contracts and
the underlying securities, or that the counterparty will fail to perform its
obligation.
Note 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies followed by
the Fund in the preparation of its financial statements.
A) PORTFOLIO VALUATIONS
Securities which are traded on any exchange or on the NASDAQ over-the-counter
market, are valued at the last quoted sale price. Lacking a last sale price, a
security is valued at its last bid price except when, in the Adviser's opinion,
the last bid price does not accurately reflect the current value of the
security. All other securities for which over-the-counter market quotations are
readily available are valued at their last bid price. When market quotations are
not readily available, when the Adviser determines the last bid price does not
accurately reflect the current value or when restricted securities are being
valued, such securities are valued as determined in good faith by the Adviser,
subject to review of the Board of Trustees of the Trust.
Future contracts are marked to market daily, and the resultant variation margin
is recorded as an unrealized gain or loss.
B) PORTFOLIO TRANSACTIONS AND RELATED INCOME
Investment transactions are recorded on a trade date. Realized gains and losses
from investment transactions are recorded on the identified cost basis. Interest
income is recorded on the accrual basis and dividend income is recorded on the
ex-dividend date.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (cont.)
February 29, 2000 (Unaudited)
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C) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
The Fund intends to distribute substantially all of its net investment income as
dividends to its shareholders on an annual basis, and intends to distribute its
net long-term capital gains and its short-term capital gains at least once a
year. However, to the extent that net realized gains of the Fund could be
reduced by any capital loss carry-overs, such gains will not be distributed.
D) FEDERAL INCOME TAXES
It is the policy of the Fund to meet the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to its shareholders.
E) EXPENSES
There are no organizational costs to be amortized.
F) ESTIMATES
Preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
Note 3 - AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund retains Lindbergh Capital Management, Inc., (the "Adviser") to manage
the Fund's investments. The Fund pays all of the operating expenses of the Fund
except, taxes, interest, and extraordinary expenses. Actual total expenses will
not exceed 0.75% because the Adviser's contract with the Fund requires it to pay
fund expenses to maintain total annual fund operating expenses at 0.75% through
August 31, 2000, and to inform the Fund prior to that date, if the commitment is
to continue. For the six months ended February 29, 2000, the Adviser was paid
$0.00.
The Fund retains Unified Fund Services, Inc., (the "Administrator") to manage
the Fund's business affairs and provide the Fund with administrative services,
including all regulatory reporting and necessary office equipment, personnel and
facilities. The Fund also retains Unified Fund Services, Inc. (the "Transfer
Agent") to serve as transfer agent, dividend paying agent and shareholder
service agent. The Fund retains Unified Management Corporation, (the
"Distributor") to act as the principal distributor of the Fund's shares.
Note 4 - SECURITIES TRANSACTIONS
For the six months ended February 29, 2000, purchases and sales proceeds from
investment securities, excluding short-term investments were as follows:
Purchases Sales
---------- ------
The Lindbergh Signature Fund $ 1,262,536 $ 0.00
<PAGE>
NOTES TO FINANCIAL STATEMENTS (cont.)
February 29, 2000 (Unaudited)
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Note 5 - UNREALIZED APPRECIATION (DEPRECIATION)
At February 29, 2000, the cost for federal income tax purposes is $12,959,324
and the composition of gross unrealized appreciation (depreciation) of
investment securities is as follows:
<TABLE>
<S> <C> <C> <C> <C>
Appreciation Depreciation Net
Appreciation
The Lindbergh Signature Fund $29,619 ($27,331) $2,288
</TABLE>
