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SEMI ANNUAL REPORT
APRIL 30, 2000
[GRAPHIC]
U.S. TREASURY MONEY FUND
THE CHAPMAN FUNDS, INC.
<PAGE>
THE CHAPMAN FUNDS, INC.
U.S. TREASURY MONEY FUND
Schedule Of Investments - April 30, 2000 (Unaudited)
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(Showing Percentage of Total Value of Net Assets)
<TABLE>
<CAPTION>
Principal Value
Amount (Note B)
-------------- ---------------
<S> <C> <C>
U.S. GOVERNMENT - 51.6%
U.S. Treasury Bills 4.50%, Due 05/4/00 $ 21,000,000 $ 20,992,125
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20,992,125
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REPURCHASE AGREEMENTS - 48.8%
Societe Generale, dated 04/28/00, 5.69% agreement to
repurchase at $9,827,657 on 05/01/00 (collateralized by
U.S. Treasury Notes, 7.500%, due 11/15/2001, $10,019,460
Market value) 9,823,000 9,823,000
Morgan Stanley, dated 04/28/00, 5.60% agreement to
repurchase at $10,004,666 on 05/01/00 (collateralized by
U.S. Treasury Notes, 8.750%, due 11/15/2008, $10,197,000
market value) 10,000,000 10,000,000
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19,823,000
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Total Investment (Cost $40,815,125)* - 100.4% 40,815,125
Other Assets and Liabilities - (0.4%) (181,389)
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NET ASSETS - 100.0% $ 40,633,736
===============
</TABLE>
*Cost for federal income tax purposes
See notes to financial statements
1
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THE CHAPMAN FUNDS, INC.
U.S. TREASURY MONEY FUND
Statement of Assets and Liabilities - April 30, 2000 (Unaudited)
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<TABLE>
<S> <C>
ASSETS:
Investments in securities at value
(Including repurchase agreements of $19,823,000)
(Amortized cost $40,815,125) $ 40,815,125
Cash 510
Interest Receivable 9,324
Other assets 9,938
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Total assets 40,834,897
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LIABILITIES:
Accrued expenses 39,589
Distribution payable 161,572
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Total liabilities 201,161
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NET ASSETS $ 40,633,736
(Equivalent to $1.00 per share on 40,633,736 shares of common stock ===============
outstanding)
NET ASSETS CONSIST OF:
Capital stock $ 40,634
Paid-in-capital applicable to 40,633,766 shares outstanding 40,593,102
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Net assets $ 40,633,766
===============
NET ASSET VALUE PER SHARE $ 1.00
===============
</TABLE>
See notes to financial statements
2
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THE CHAPMAN FUNDS, INC.
U.S. TREASURY MONEY FUND
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STATEMENT OF OPERATIONS - FOR SIX MONTHS ENDING APRIL 30, 2000 - (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $ 1,159,428
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EXPENSES:
Management and administrative fees 127,729
Professional fees 18,718
Transfer and dividend disbursing agent's fees 16,246
Rating fees 11,267
Custodian fees 9,892
Director's fees 2,424
Other 17,098
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Total expenses before reimbursement 203,374
Reimbursement of expenses (70,770)
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Net expenses 132,604
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INCREASE IN NET ASSETS FROM OPERATIONS $ 1,026,824
==================
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
Six months ended
April 30, 2000 Year ended
(Unaudited) October 31, 1999
------------------ ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 1,026,824 $ 3,622,465
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Increase in net assets from operations 1,026,824 3,622,465
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DISTRIBUTION TO SHAREHOLDERS:
From net investment income ($0.0242 and $.0415
per share, respectively) (1,026,824) (3,622,465)
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CAPITAL SHARE TRANSACTIONS ($1 PER SHARE):
Shares sold 95,433,028 154,067,807
Shares reinvested 927,029 2,647,792
Shares redeemed (171,767,077) (117,153,832)
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(Decrease)/increase in net assets from
capital share transactions (75,407,020) 39,561,767
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Total (decrease)/increase in net assets during period (75,407,020) 39,561,767
NET ASSETS:
Beginning of period 116,040,756 76,478,989
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End of period $ 40,633,736 $ 116,040,756
================== ==================
</TABLE>
See notes to financial statements
3
<PAGE>
THE CHAPMAN FUNDS, INC.
U.S. TREASURY MONEY FUND
Financial Highlights
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THE FINANCIAL HIGHLIGHTS TABLE IS INTENDED TO HELP YOU UNDERSTAND THE FUND'S
FINANCIAL PERFORMANCE FOR THE PAST FIVE YEARS. CERTAIN INFORMATION REFLECTS
FINANCIAL RESULTS FOR A SINGLE FUND SHARE. THE TOTAL RETURNS IN THE TABLE
REPRESENT THE RATE THAT AN INVESTOR WOULD HAVE EARNED ON AN INVESTMENT IN THE
FUND (ASSUMING REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS). THIS
INFORMATION HAS BEEN AUDITED FOR THE YEARS ENDED OCTOBER 31. IT SHOULD BE READ
IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND NOTES THERETO.
<TABLE>
<CAPTION>
FOR THE YEARS ENDED OCTOBER 31,
-----------------------------------------------------------------------
Six months
ended
April 30,
2000
(Unaudited) 1999 1998 1997 1996 1995
-------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE:
Beginning of period $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
-------------- ----------- ----------- ----------- ----------- -----------
INVESTMENT OPERATIONS:
Net investment income 0.0242 0.0415 0.0477 0.0470 0.0464 0.0497
-------------- ----------- ----------- ----------- ----------- -----------
Total from investment
Operations 0.0242 0.0415 0.0477 0.0470 0.0464 0.0497
-------------- ----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS:
From net investment income (0.0242) (0.0415) (0.0477) (0.0470) (0.0464) (0.0497)
-------------- ----------- ----------- ----------- ----------- -----------
Total distributions (0.0242) (0.0415) (0.0477) (0.0470) (0.0464) (0.0497)
-------------- ----------- ----------- ----------- ----------- -----------
NET ASSET VALUE END OF PERIOD $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
============== =========== =========== =========== =========== ===========
TOTAL RETURN: 2.44%(1) 4.24% 4.88% 4.80% 4.74% 5.09%
RATIOS TO AVERAGE NET ASSETS:
Expenses(2) 0.62%(3) 0.65% 0.65% 0.67% 0.75% 0.75%
Expenses (prior to limitation) 0.95%(3) 0.80% 0.94% 0.93% 0.87% 0.97%
Net investment income 4.80%(3) 4.18% 4.75% 4.72% 4.63% 5.02%
SUPPLEMENTAL DATA:
Net Assets end of period
(000 omitted) $40,633 $116,041 $76,479 $60,210 $55,129 $34,371
</TABLE>
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(1) Total return for periods less than one year have not been annualized.
(2) Chapman Capital Management, Inc. (CCM), the Fund's investment adviser, has
contractually agreed to limit annual expenses (excluding income, excises and
other taxes and extraordinary expenses) in excess of .53% of average daily
net assets effective March 17, 2000 until at least December 31, 2009.
However, CCM's obligation is limited to the total of its advisory and
administration fees. Prior to March 17, 2000, CCM agreed to limit the Fund's
expenses to .65% of the average daily net assets on an annual basis.
(3) Annualized
4
<PAGE>
THE CHAPMAN FUNDS, INC.
U.S. TREASURY MONEY FUND
Notes to Financial Statements - April 30, 2000 (Unaudited)
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NOTE A - GENERAL
The Chapman Funds, Inc. (the "Company"), is an open-end management investment
company registered under the Investment Company Act of 1940 (the "1940 Act").
The Company currently offers six series; The Chapman U.S. Treasury Money Fund,
The Chapman Institutional Cash Management Fund, DEM Equity Fund, DEM Index Fund,
DEM Multi-Manager Equity Fund, and DEM Multi-Manager Bond Fund. These financial
statements pertain to the U.S. Treasury Money Fund (the "Fund").
The Fund is a diversified series that seeks to earn as high a level of current
income as is consistent with preservation of capital and maintenance of
liquidity. The Fund invests solely in short-term direct obligations of the U.S.
Government and repurchase agreements collateralized fully by direct obligations
of the U.S. Government.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Security Valuation - The Fund uses the amortized cost method, which approximates
market value, to value portfolio securities pursuant to Rule 2a-7 of the 1940
Act, provided the Fund complies with certain conditions. The amortized cost
valuation method involves valuing a security at its cost on the date of purchase
and thereafter assuming a constant amortization from date of purchase to date of
maturity of any discount or premium.
Repurchase Agreements - The Fund's custodian takes possession, through the
Federal Book Entry System, of the collateral pledged for investments in
repurchase agreements. The underlying collateral is valued daily to ensure that
the value, including accrued interest, is at least equal to the repurchase
price. In the event of default, the Fund has the right to liquidate the
collateral and apply the proceeds in satisfaction of the obligation, however,
the Fund might be delayed in, or prevented from, selling the collateral for its
benefit.
Distributions to Shareholders - Dividends to shareholders of the Fund are
declared daily from net investment income, which consists of accrued interest
and earned discount (including both original issue and market discount), less
amortization of premium and the accrued expenses applicable to the dividend
period.
Federal Income Taxes - No provision for federal income taxes has been made since
the Fund intends to qualify as a Regulated Investment Company under Subchapter M
of the Internal Revenue Code and distribute all of its taxable income.
Securities Transactions and Investment Income - Securities transactions are
recorded on the trade date. Interest income is recorded on the accrual basis.
Use of Estimates in the Preparation of Financial Statements - 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 at the date of the financial statements and
5
<PAGE>
THE CHAPMAN FUNDS, INC.
U.S. TREASURY MONEY FUND
Notes to Financial Statements - April 30, 2000
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the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
NOTE C - CAPITAL STOCK
The Company is authorized to issue 10 billion full and fractional shares of
common stock, par value $.001 per share, of which 1 billion shares are
designated as U.S. Treasury Money Fund shares.
NOTE D - MANAGEMENT ADVISORY AND ADMINISTRATIVE FEES
Chapman Capital Management, Inc. ("CCM") acts as the investment adviser and
administrator for the Fund. The investment advisory and administrative fees are
based on the average daily net assets of the Fund computed at annual rates of
.5% and .1%, respectively.
CCM also serves as Transfer and Dividend Disbursing Agent for the Fund pursuant
to a Shareholder Services Agreement. For its services, CCM is compensated $18
per account subject to a monthly minimum of $1,500, excluding out-of-pocket
expenses.
CCM, has contractually agreed to limit annual expenses (excluding income, excise
and other taxes and extraordinary expenses) in excess of .53% of average daily
net assets effective March 17, 2000. However, CCM's obligation is limited to the
total of its advisory and administration fees. Prior to March 17, 2000, CCM
agreed to limit the Fund's expenses to .65% of average daily net assets on an
annual basis.
At April 30, 2000, approximately $11,000, was due from CCM pursuant to the above
agreements.
NOTE E - DIRECTORS' FEES AND RELATED PARTIES
Certain officers and directors of the Company are "affiliated persons", as
defined in the Investment Company Act of 1940, of the adviser. For the six
months ended April 30, 2000, these "affiliated persons" did not receive any
compensation from the Company.
Those directors who are not officers of the Company receive $1,000 compensation
plus certain expenses from the Company for each Board of Directors meeting they
attend.
6
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THIS REPORT IS AUTHORIZED FOR DISTRIBUTION ONLY TO SHAREHOLDERS AND TO OTHERS
WHO HAVE RECEIVED A COY OF THE U.S. TREASURY FUND PROSPECTUS
[GRAPHIC]
INVESTMENT ADVISOR
TRANSFER AND DIVIDEND PAYING AGENT
AND
ACCOUNTING AGENT:
CHAPMAN CAPITAL MANAGEMENT, INC.
WORLD TRADE CENTER - BALTIMORE
401 EAST PRATT STREET, 28TH FLOOR
BALTIMORE, MARYLAND 21202
(410) 625-9656
CUSTODIAN:
UMB BANK, N.A.
928 GRAND AVENUE
KANSAS CITY, MISSOURI 64141-6226
DISTRIBUTOR:
THE CHAPMAN COMPANY
WORLD TRADE CENTER - BALTIMORE
401 EAST PRATT STREET, 28TH FLOOR
BALTIMORE, MARYLAND 21202
(410) 625-9656
FOR SHAREHOLDER INQUIRIES CALL 1-800-752-1013
