Muhlenkamp Fund
Intelligent Investment Management
SEMI - ANNUAL REPORT
June 30, 2000
Phone: 1-800-860-3863
E/-mail: [email protected]
Web Site: WWW.MUHLENKAMP.COM
This report is not authorized for distribution to prospective investors unless
preceded or accompanied by a currently effective prospectus of the Muhlenkamp
Fund. Please call 1-800-860-3863 for a free prospectus. Read it carefully before
you invest.
THE MUHLENKKAMP
(A Portfolio of the Wexford Trust)
Dear Fellow Shareholders:
The Trustees and Management of the Muhlenkamp Fund are pleased to present this
semi-annual report of your Fund.
The past six months have seen big changes in the securities markets, some of
which we have been anticipating for the better part of a year.
We have been saying for a year that the market's fear of inflation was driving
up long-term interest rates and that the majority of stocks would have trouble
doing well as long as long-term rates were rising. From late 1998 through
January 2000, long-term Treasury rates rose from 4.8% to 6.7%. Since late
January long-term rates have fallen from 6.7% to less than 6% even as the Fed
continued to raise short-term rates. We judge this action in the bond market to
indicate that the fear of rising inflation is dissipating. As a result,
financial stocks (banks & brokers) particularly the biggest and the best, have
demonstrated strong performance.
We have also been saying that as long as the popular speculative stocks were
uniformly in up-trends, there would be little incentive for the public to look
elsewhere for investment ideas. That momentum has now been broken. The "hype"
stocks (internet, telecom, and biotech) peaked in March and suffered a severe
correction. Since then, many other speculative stocks have joined the crowd on
the downside. Momentum is now driving down the same stocks it drove up. Our
suspicion is that it took a lot of "New Economy" believers by surprise and it
will take a while to sort through the rubble.
Meanwhile, the economy (old and new) is doing just fine, thank you, exhibiting
strong growth with modest inflation. We see no evidence that inflation is about
to pick up substantially or that we are about to enter a recession. As
investors, we monitor the risk of inflation and recession as the two big risks
to our assets. In the past 18 months, economists, the Fed, and the markets have
reacted to fears of both of these risks but neither has become reality. While a
third shoe can always drop, only the fear of war carries the impact of recession
or inflation, and it looks unlikely.
While the Fed has the capability of creating a recession, recent action in the
markets suggest that they will take an even more gradual approach. To the extent
that Mr. Greenspan and company have been battling "irrational exuberance" and
the "wealth effect" their fears too should now be dissipating.
So where are we today? The American consumer and the American economy are in
good shape. Fears of rising inflation and attendant long-term interest rates
have peaked. The bubble in speculative stocks has popped. Most companies are
doing quite well and are reasonably priced. We are finding more and better
values than any time since late 1994. We think it's a good opportunity to put
your money to work in those values.
Sincerely,
/S/Ronald H. Muhlenkamp
Ronald H. Muhlenkamp
President
August 25, 2000
THE MUHLENKAMP FUND
(A portfolio of the Wexford Trust)
TOTAL RETURN % CUMULATIVE RETURN %
Muhlenkamp S&P Muhlenkamp S&P
Period Ending Fund 500 Fund 500
--------------------------------------------------------------------------------
12/31/91 45.4 30.5 45.4 30.5
12/31/92 15.8 7.6 68.4 40.4
12/31/93 18.1 10.1 98.9 54.6
12/31/94 (7.2) 1.3 84.6 56.6
12/31/95 33.0 37.6 145.4 115.5
12/31/96 30.0 23.0 219.0 164.9
12/31/97 33.3 33.4 325.2 253.3
12/31/98 3.2 28.6 338.9 354.3
12/31/99 11.4 21.0 388.9 449.9
6/30/00 12.9 (0.4) 451.9 447.6
Line Graph Plot Points
A $10,000 Investment in The Muhlenkamp Fund
Muhlenkamp S&P
Date Fund 500
12/31/90 10,000 10,000
12/31/91 14,539 13,047
12/31/92 16,836 14,041
12/31/93 19,887 15,457
12/31/94 18,457 15,661
12/31/95 24,540 21,546
12/31/96 31,898 26,493
12/31/97 42,520 35,331
12/31/98 43,889 45,428
12/31/99 48,892 54,986
6/30/00 55,194 54,755
The Standard & Proor's 500 Stock Index (S&P) is a capital-weighted index,
representing the aggregate market value of the common equity of 500 stocks
primarily traded on the New York Stock Exchange. This chart assumes an initial
gross investment of $10,00 made on 12/31/90. Returns shown include the
reinvestment of all dividends. The Fund's past performance is not necessarily
an indication of its future performance. It may perform better in the future.
--------------------------------------------------------------------------------
THE MUHLENKAMP FUND
(A Portfolio of the Wexford Trust)
STATEMENT OF ASSETS & LIABILITIES
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
ASSETS
--------------------------------------------------------------------------------
INVESTMENTS, AT VALUE(Cost $146,884,642) $ 204,096,639
RECEIVABLE FOR FUND SHARES SOLD 442,088
DIVIDENDS RECEIVABLE 105,769
INTEREST RECEIVABLE 57,524
OTHER ASSETS 78,189
------------
Total assets 204,780,209
============
--------------------------------------------------------------------------------
LIABILITIES
--------------------------------------------------------------------------------
OPTIONS WRITTEN, AT VALUE 1,719,250
(Premiums received $1,954,225)
PAYABLE FOR FUND SHARES PURCHASED 11,219
PAYABLE TO ADVISOR 163,259
ACCRUED EXPENSES AND OTHER LIABILITIES 438,355
------------
Total liabilities 2,332,083
NET ASSETS $ 202,448,126
============
--------------------------------------------------------------------------------
NET ASSETS
--------------------------------------------------------------------------------
PAID IN CAPITAL $ 130,289,406
ACCUMULATED NET REALIZED GAIN ON INVESTMENTS 14,711,748
NET UNREALIZED APPRECIATION OF:
Investments 57,211,997
Written options 234,975
------------
NET ASSETS $ 202,448,126
============
SHARES OF BENEFICIAL INTEREST OUTSTANDING
(unlimited number of shares authorized, $.001 par value) 4,361,871
NET ASSET VALUE PER SHARE $ 46.41
============
See notes to financial statements.
--------------------------------------------------------------------------------
THE MUHLENKAMP FUND
(A Portfolio of the Wexford Trust)
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 780,965
Interest 137,355
------------
Total investment income 918,320
============
EXPENSES:
Investment advisory fees 937,392
Shareholder servicing and accounting costs 221,970
Reports to shareholders 46,488
Federal & state registration fees 15,700
Custody fees 5,634
Administration fees 53,162
Directors' fees and expenses 2,026
Professional fees 8,546
Other 166
------------
Total operating expenses before expense reductions 1,291,084
Expense reductions (see Note 7) (54,410)
------------
Total expenses 1,236,674
------------
NET INVESTMENT LOSS (318,354)
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Realized gain (loss) on:
Investments 15,011,659
Written options (310,803)
------------
Net realized gain 14,700,856
Change in unrealized appreciation (depreciation) on:
Investments 5,205,010
Written options 2,623,245
------------
Net unrealized gain 7,828,255
------------
Net realized and unrealized gain on investments 22,529,111
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 22,210,757
============
See notes to financial statements.
--------------------------------------------------------------------------------
THE MUHLENKAMP FUND
(A Portfolio of the Wexford Trust)
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31, 1999
(UNAUDITED)
OPERATIONS:
Net investment loss $ (318,354) $ (483,790)
Net realized gain on investments
sold and option contracts expired
or closed 14,700,856 3,671,407
Change in unrealized appreciation
(depreciation) of investments and
written options 7,828,255 16,047,892
------------- -------------
Net increase in net assets
resulting from operations 22,210,757 19,235,509
-------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM NET REALIZED GAINS - (3,428,553)
-------------- -------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 36,655,522 54,891,294
Proceeds from shares issued to holders
in reinvestment of dividends - 3,348,810
Cost of shares redeemed (35,017,558) (90,409,255)
------------- -------------
Net increase (decrease) in net
assets resulting from capital share
transactions 1,637,964 (32,169,151)
------------- -------------
Total increase (decrease)
in net assets 23,848,721 (16,362,195)
NET ASSETS:
Beginning of year 178,599,405 194,961,600
End of year $ 202,448,126 $ 178,599,405
============== ===============
See notes to financial statements.
--------------------------------------------------------------------------------
THE MUHLENKAMP FUND
(A Portfolio of the Wexford Trust)
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended YEAR ENDED DECEMBER 31,
June 30, 2000 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
(Unaudited)
NET ASSET VALUE, BEGINNING OF YEAR $ 41.11 $ 37.65 $ 36.55 $ 27.52 $ 21.26 $ 16.23
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.07)(1) (0.11) 0.08 (2) 0.18 (2) 0.14 (2) 0.21(2)
Net realized and unrealized gains
on investments 5.37 4.37 1.10 8.98 6.23 5.14
-------- -------- -------- -------- -------- --------
Total from investment operations 5.30 4.26 1.18 9.16 6.37 5.35
LESS DISTRIBUTIONS:
From net investment income 0.00 0.00 (0.08) (0.13) (0.11) (0.21)
From net realized gains 0.00 (0.80) 0.00 0.00 0.00 (0.11)
-------- -------- -------- -------- -------- --------
Total distributions 0.00 (0.80) (0.08) (0.13) (0.11) (0.32)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 46.41 $ 41.11 $ 37.65 $ 36.55 $ 27.52 $ 21.26
======== ======== ======== ======== ======== ========
TOTAL RETURN 12.89% 11.40% 3.22% 33.28% 29.96% 32.96%
NET ASSETS, END OF PERIOD (in thousands) $ 202,448 $ 178,599 $ 194,962 $ 125,461 $ 42,039 $ 23,571
RATIO OF OPERATING EXPENSES TO AVERAGE NET ASSETS 1.32%(3)(4)(5) 1.35%(4) 1.32%(4) 1.33%(4) 1.54%(4) 1.35%(4)
RATIO OF NET INVESTMENT INCOME (LOSS)
TO AVERAGE NET ASSETS (0.34%) (3) (0.26%) 0.21% 0.53% 0.58% 1.10%
PORTFOLIO TURNOVER RATE 13.87% 14.52% 27.03% 13.89% 16.90% 22.70%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share is calculated using ending balances prior to
consideration of adjustments for permanent book and tax differences.
(2) Net investment income per share represents net investment income for the
respective period divided by the monthly average shares of beneficial
interest outstanding throughout each period.
(3) Annualized.
(4) The operating expense ratio includes expense reductions for soft dollar
credits. The ratios excluding expense reductions for the six months ending
June 30, 2000, and the years ended December 31, 1999, 1998, 1997, 1996 and
1995, were 1.35%, 1.38%, 1.36%, 1.44%, 1.56% and 1.40%, respectively.
(5) The operating expense ratio includes expense reductions due to minimum
account maintenance fees deposited into the Fund. The ratio excluding this
expense reduction for the six months ended June 30, 2000 was 1.35%.
See notes to financial statements.
--------------------------------------------------------------------------------
THE MUHLENKAMP FUND
(A Portfolio of the Wexford Trust)
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
-------------------------------------------------------------------------------
NAME OF THE ISSUER OR TITLE OD ISSUE SHARES VALUE
COMMON STOCK - 90.3%+
Aerospace - 1.0%+
BE Aerospace, Inc.* 272,600 $ 1,874,125
Teledyne Technologies Incorporated* 5,714 95,710
----------
1,969,835
Airlines - 0.2%+
AMR Corporation 14,000 370,125
----------
Appliances - 1.5%+
Salton, Inc.* 84,200 3,104,875
Autos and Recreational Vehicles - 5.4%+
Ford Motor Company 112,000 4,816,000
Monaco Coach Corporation* 45,000 613,125
National R.V. Holdings, Inc.* 224,500 2,357,250
Superior Industries International, Inc. 98,180 2,528,136
Visteon Corporation 14,664 177,807
Winnebago Industries, Inc. 40,000 522,500
----------
11,014,818
----------
Banks - 8.7%+
The Chase Manhattan Corporation 36,000 1,658,250
Citigroup Inc. 180,000 10,845,000
Mellon Financial Corporation 140,000 5,101,250
----------
17,604,500
----------
Brokerage - 10.5%+
Merrill Lynch & Co., Inc. 102,000 11,730,000
Southwest Securities Group, Inc.# 254,598 9,483,776
----------
21,213,776
Building Products - 3.5%+
Owens Corning 34,000 314,500
Southdown, Inc. 60,000 3,465,000
Texas Industries, Inc. 111,900 3,231,113
----------
7,010,613
----------
Capital Goods - 2.3%+
Graco Inc. 105,825 3,439,313
IDEX Corporation 41,250 1,301,953
Water Pik Technologies, Inc.* 2,000 12,500
----------
4,753,766
----------
Finance - 9.2%+
Fannie Mae 74,400 3,882,750
Morgan Stanley Dean Witter & Co. 163,000 13,569,750
Washington Mutual, Inc. 41,125 1,187,484
----------
18,639,984
----------
Furniture - 3.3%+
Stanley Furniture Company, Inc.* 305,500 $ 6,721,000
----------
Homebuilding - 4.4%+
American Woodmark Corporation 112,200 2,300,100
Beazer Homes USA, Inc.* 27,400 500,050
Crossmann Communities, Inc.* 180,000 2,970,000
NVR, Inc.* 53,600 3,055,200
----------
8,825,350
----------
Industrial Equipment - 0.6%+
JLG Industries, Inc. 68,100 808,688
Parker-Hannifin Corporation 13,501 462,409
----------
1,271,097
----------
Insurance - 5.5%+
Conseco, Inc. 684,608 6,674,928
Fidelity National Financial, Inc. 238,881 4,374,508
Reliance Group Holdings, Inc. 52,500 39,375
----------
11,088,811
----------
Medical - 1.6%+
D & K Healthcare Resources, Inc.* 17,500 182,656
Eclipse Surgical Technologies, Inc.* 14,200 62,125
Orthodontic Centers of America, Inc.* 105,000 2,375,625
Scios Inc.* 120,000 675,000
----------
3,295,406
----------
Metal - 1.3%+
Allegheny Technologies Incorporated 20,000 360,000
RTI International Metals, Inc.* 204,200 2,322,775
----------
2,682,775
----------
Oils, Natural Gas and Energy Related - 11.8%+
Calpine Corporation*# 146,000 9,599,500
The Coastal Corporation 115,000 7,000,625
Conoco Inc. - Class A 200,000 4,400,000
The Houston Exploration Company* 20,000 502,500
OMNI Energy Services Corp.* 185,600 139,200
Union Pacific Resources Group Inc. 100,000 2,200,000
----------
23,841,825
----------
Retail Jewelry - 0.1%+
Piercing Pagoda, Inc.* 10,000 145,000
----------
Technology - 17.6%+
ATMI, Inc.* 160,100 7,444,650
Applied Materials, Inc.*# 140,000 12,687,500
Computer Associates International, Inc. 125,000 6,398,437
Intel Corporation 68,000 9,090,750
----------
35,621,337
----------
Tobacco - 0.5%+
Philip Morris Companies Inc. 35,280 $ 937,125
----------
Transportation - 1.2%+
Arkansas Best Corporation* 230,300 2,288,606
Rush Enterprises, Inc.* 18,100 100,681
----------
2,389,287
----------
Travel Services - 0.1%+
Sabre Holdings Corporation* 10,117 288,335
----------
Total Common Stocks (Cost $125,991,345) 182,789,640
----------
--------------------------------------------------------------------------------
CONTRACTS
(100 SHARES PER CONTRACT) VALUE
--------------------------------------------------------------------------------
CALL OPTIONS PURCHASED - 0.0%+
Southwest Securities Group, Inc.
Expiration Septemeber 2000,
Exercise Price $45.00 100 21,250
Total Call Options Purchased ----------
(Cost $70,300) 21,250
----------
--------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE
--------------------------------------------------------------------------------
CORPORATE BONDS - 0.8%+
General Motors Acceptance Corporation
0.000%, 6/15/2015, principal only $5,000,000 1,587,655
----------
Total Corporate Bonds (Cost $1,124,903) 1,587,655
----------
SHORT-TERM INVESTMENTS - 9.7%+
MONEY MARKET MUTUAL FUNDS - 9.7%+
Firstar Stellar Treasury Fund 19,698,094 19,698,094
----------
Total Short-Term Investments (Cost $19,698,094) 19,698,094
----------
TOTAL INVESTMENTS - 100.8%+
(Cost $146,884,642) $ 204,096,639
==========
* Non income producing security.
+ Investments are shown as a percentage of net assets at June 30, 2000.
# All or a portion of the shares have been committed as collateral for written
option contracts.
-------------------------------------------------------------------------------
THE MUHLENKAMP TRUST
(A Portfolio of the Wexford Trust)
SCHEDULE OF OPTIONS WRITTEN
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
CONTRACTS
(100 SHARES PER CONTRACT) VALUE
CALL OPTIONS
Applied Materials, Inc.:
Expiration July 2000,
Exercise Price $82.50 400 $ 410,000
Expiration July 2000,
Exercise Price $90.00 200 102,500
Expiration July 2000,
Exercise Price $92.50 100 40,000
Expiration July 2000,
Exercise Price $95.00 200 53,750
Expiration January 2002,
Exercise Price $60.00 100 453,750
Asyst Technologies, Inc.
Expiration December 2000,
Exercise Price $65.00 100 32,500
Calpine Corporation
Expiration July 2000,
Exercise Price $47.50 40 93,000
Southwest Securities Group, Inc.
Expiration January 2002,
Exercise Price $50.00 100 101,250
PUT OPTIONS
Asyst Technologies, Inc.
Expiration December 2000,
Exercise Price $55.00 100 241,250
Southwest Securities Group, Inc.
Expiration January 2002,
Exercise Price $50.00 100 191,250
---------
TOTAL OPTIONS WRITTEN $ 1,719,250
=========
(Premiums received $1,954,225)
--------------------------------------------------------------------------------
See notes to financial statements.
THE MUHLENKAMP FUND
(A Portfolio of the Wexford Trust
NOTES TO FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2000 (UNAUDITED)
1. ORGANIZATION
The Wexford Trust (the "Trust") was organized as a Massachusetts Business Trust
on September 21, 1987 and operations commenced on November 1, 1988. The Trust is
registered under the Investment Company Act of 1940, as amended. The Muhlenkamp
Fund (the "Fund") is a portfolio of the Trust and is currently the only fund in
the Trust.
The Fund operates as a diversified open-end mutual fund that continuously offers
its shares for sale to the public. The Fund will manage its assets to seek a
maximum total return to its shareholders, primarily through a combination of
interest and dividends and capital appreciation by holding a diversified list of
publicly traded stocks. The Fund may acquire and hold fixed-income or debt
investments as market conditions warrant and when, in the opinion of its
advisor, it is deemed desirable or necessary in order to attempt to achieve its
investment objective.
The primary focus of the Fund is long-term and the investment options diverse.
This allows for greater flexibility in the daily management of Fund assets.
However, with flexibility also comes the risk that assets will be invested in
various classes of securities at the wrong time and price.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of significant accounting policies applied by management in the
preparation of the accompanying financial statements follows.
a. INVESTMENT VALUATIONS -- Stocks and Bonds are valued at the latest sales
price on the last business day of the fiscal period as reported by the
securities exchange on which the issue is traded. If no sale is reported, the
security is valued at the last quoted bid price.
b. INVESTMENT TRANSACTIONS AND RELATED INVESTMENT INCOME -- Investment
transactions are accounted for on the trade date. Dividend income is recorded on
the ex-dividend date. Interest income is recorded daily on the yield to maturity
basis. Discounts and premiums on securities are amortized over the life of the
respective securities. The Fund uses the specific identification method in
computing gain or loss on the sale of investment securities.
c. FEDERAL TAXES -- It is the Fund's policy to comply with the requirements of
the Internal Revenue Code that are applicable to regulated investment companies
and to distribute substantially all of its taxable income to its shareholders.
Therefore, no federal tax provision is required. In addition, the Fund will make
sufficient distributions of its income and realized gains, if any, to avoid the
payment of any federal excise taxes. Generally accepted accounting principles
require that permanent differences between financial reporting and tax reporting
be reclassified between various components of net assets.
d. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS OF BENEFICIAL INTEREST --
Dividends from net investment income, if any, are declared and paid annually.
Distributions of net realized capital gains, if any, will be declared and paid
at least annually.
e. USE OF ESTIMATES -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reported period. Actual results could differ from those estimates.
f. OPTIONS TRANSACTIONS -- The Fund may write put and call options only if it
(i) owns an offsetting position in the underlying security or (ii) maintains
cash or other liquid assets in an amount equal to or greater than its obligation
under the option. When the Fund writes a call or put option, an amount equal to
the premium received is included in the statement of assets and liabilities as a
liability. The amount of the liability is subsequently marked-to-market to
reflect the current market value of the option. If an option expires on its
stipulated expiration date or if the Fund enters into a closing purchase
transaction, a gain or loss is realized. If a written call option is exercised,
a gain or loss is realized for the sale of the underlying security and the
proceeds from the sale are increased by the premium originally received. If a
written put option is exercised, the cost of the security acquired is decreased
by the premium originally received. As writer of an option, the Fund has no
control over whether the underlying securities are subsequently sold (call) or
purchased (put) and, as a result, bears the market risk of an unfavorable change
in the price of the security underlying the written option.
The Fund may purchase put and call options. When the Fund purchases a call or
put option, an amount equal to the premium paid is included in the Fund's
statement of assets and liabilities as an investment, and is subsequently
marked-to-market to reflect the current market value of the option. If an option
expires on the stipulated expiration date or if the Fund enters into a closing
sale transaction, a gain or loss is realized. If the Fund exercises a call, the
cost of the security acquired is increased by the premium paid for the call. If
the Fund exercises a put option, a gain or loss is realized from the sale of the
underlying security, and the proceeds from such a sale are decreased by the
premium originally paid. Written and purchased options are non-income producing
securities.
3. INVESTMENT ADVISORY AND OTHER AGREEMENTS
Muhlenkamp & Co., Inc. (the "Advisor"), an officer/stockholder of which is a
trustee of the Trust, receives a fee for investment management. The fee is
computed and accrued daily based on the net asset value at the close of
business and is equal to 1% per annum. Firstar Mutual Fund Services, LLC serves
as transfer agent, administrator and accounting services agent for the Fund.
Firstar Bank, N.A. serves as custodian for the Fund.
4. CAPITAL SHARE TRANSACTIONS
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest with a par value of $.001 per
share. Transactions in capital shares of the Fund were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31, 1999
<S> <C> <C>
Shares outstanding, beginning of period 4,344,743 5,178,767
Share sold 817,156 1,361,481
Shares issued to shareholders in reinvestment
of dividends - 84,183
Share redeemed (800,028) (2,279,688)
----------- -------------
Shares, outstanding, end period 4,361,871 4,344,743
=========== =============
</TABLE>
5. OPTION CONTRACTS WRITTEN
The number of option contracts written and the premiums received by the
Muhlenkamp Fund during the six months ended June 30, 2000, were as follows:
NUMBER OF CONTRACTS PREMIUMS RECEIVED
Options outstanding, beginning
of period 1,000 589,480
Options written 2,850 3,287,800
Options exercised (728) (404,644)
Options expired (510) (422,531)
Options closed (1,172) (1,095,880)
-------- ------------
Options outstanding, end of period 1,440 1,954,225
========= ============
6. INVESTMENT TRANSACTIONS
Purchases and sales of investment securities, excluding short-term securities,
for the six months ended June 30, 2000 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
---------------------------- -------------------------- -------------------------- --------------------------
<S> <C> <C> <C>
U.S. GOVERNMENT OTHER U.S GOVERNMENT OTHER
---------------------------- -------------------------- -------------------------- --------------------------
0 25,566,768 3,099,102 39,493,021
</TABLE>
The components of the net unrealized appreciation in the value of the
investments held at June 30, 2000 for both financial reporting and tax purposes
are as follows:
Gross unrealized appreciation of investments $79,850,184
Gross unrealized depreciation of investments (22,638,187)
--------------
Net unrealized appreciation of investments $57,211,997
==============
At June 30, 2000, the cost of investments for federal income tax purposes was
$146,884,642.
7. EXPENSE REDUCTIONS
The Fund has a directed business arrangement with Capital Institution Services,
Inc. ("CIS"). Upon the purchase and/or sale of investment securities at best
price and execution, the Fund pays a brokerage commission to CIS. These
commission payments generate nonrefundable cumulative credits which are
available to pay certain expenses of the Fund, such as performance measurements,
pricing information, custodian and record keeping services, legal, accounting
and other administrative costs. Shareholders benefit under this arrangement as
the net expenses of the Muhlenkamp Fund do not include such fees. For the six
months ended June 30, 2000, the Muhlenkamp Fund's expenses were reduced $25,875
by utilizing directed brokerage credits resulting in a decrease in the expense
ratio being charged to shareholders of 0.03%. In accordance with Securities and
Exchange Commission requirements, such amount is required to be shown as an
expense and has been included in each of the expenses in the Statement of
Operations. Expenses are also reduced through the deposit of minimum account
maintenance fees into the Fund. By November 30th of each year, all accounts
without net investments (purchases less redemptions) totaling $1,500 or more; an
account value greater than $1,500, or having an account enrolled in the
Automatic Investment Program, are charged a $15 fee. These fees are used to
lower the Fund's expense ratio. For the six months ended June 30, 2000, the
Fund's expenses were reduced $28,535 by utilizing minimum account maintenance
fees, resulting in a decrease in the expense ratio being charged to shareholders
of 0.03%.
8. CHANGE OF AUDITORS
On June 9, 2000, the Board of Trustees ratified the termination of Deloitte and
Touche LLP as the Fund's independent accountants. For the years ended December
31, 1995 and December 31, 1996, Schneider Downs & Co., Inc. expressed an
unqualified opinion on the Fund's financial statements. For the years ended
December 31, 1997 through December 31, 1999, Deloitte and Touche LLP expressed
an unqualified opinion on the Fund's financial statements. There were no
disagreements between Fund management and Deloitte and Touche LLP prior to their
termination. The Board of Trustees approved the termination of Deloitte and
Touche LLP and the appointment of PricewaterhouseCoopers LLP as the Fund's
independent accountants.
INVESTMENT ADVISOR
Muhlenkamp & Company, Inc.
12300 Perry Highway
Wexford, PA 15090
ADMINISTRATOR AND TRANSFER AGENT
Firstar Mutual Fund Services, LLC
615 E. Michigan Street
Milwaukee, WI 53202
CUSTODIAN
Firstar Bank, N.A.
425 Walnut Street
Cincinnati, OH 45201
AUDITORS
PricewaterhouseCoopers LLP
100 E. Wisconsin Avenue
Milwaukee, WI 53202
