MARINER MUTUAL FUNDS TRUST
- - -------------------------------------------------------------------------------
NEW YORK TAX-FREE BOND FUND
HSBC Asset Management [Logo]
- - -------------------------------------------------------------------------------
SEMI-ANNUAL REPORT (UNAUDITED)
June 30, 1995
Managed by:
HSBC ASSET MANAGEMENT AMERICAS INC.
Sponsored and distributed by:
MARINER FUNDS SERVICES
<PAGE>
MARINER MUTUAL FUNDS TRUST
- - -------------------------------------------------------------------------------
NEW YORK TAX-FREE BOND FUND
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HSBC Asset Management [Logo]
- - -------------------------------------------------------------------------------
July 21, 1995
Dear Shareholder:
For the six months ended June 30, 1995, the New York Tax-Free Bond Fund paid a
total of $0.28 per share tax-exempt dividend, and generated a total return of
7.47%, assuming reinvestment of dividends. The Fund's net asset value on June
30, 1995, was $10.68 per share.
After a major rally during the first quarter of 1995, the municipal market
suffered a setback. This was due to several factors. Demand for municipal bonds
dropped when individual buyers experienced rate shock as rates dropped through
6% by the end of the first quarter. With the stock market hitting new highs, and
with the memory of last year's abysmal municipal market performance, many
municipal investors reportedly switched their investments to the stock market.
In addition, Orange County's bankruptcy and imminent default loomed over the
market. Lastly, tax reform proposals in Congress were a further depressant on
the market.
The yield curve steepened considerably in June, after flattening at the
beginning of the year. Short rates held reasonably steady as expectations of Fed
easing predominated. Long rates, however, rose due to the increasing
uncertainties confronting the municipal market which argued for shorter, more
defensive paper. In addition, many fund managers were sellers of longer
maturities as municipal bond mutual funds experienced withdrawals over the month
of June. Consequently, the two to thirty year yield spread steepened by 50 basis
points to 190 basis points by quarter's end. For the quarter as a whole, high
coupon, defensive prerefunded bonds with 7-8 year maturities outperformed other
sectors. However, for the entire first half of 1995, longer durations
outperformed due to the strength of the rally during the first quarter as the
economy slowed and rates dropped. For the six month period, the Lehman Municipal
Index, reflecting the national market, returned 9.65%, as compared to the Lehman
New York Index of 9.29%.
Surprisingly during the second quarter the New York market outperformed the
national municipal market even though credit concerns abounded. These credit
concerns were possibly offset by lack of supply. After a two month delay beyond
the deadline, the State finally passed a budget which incorporated a number of
nonrecurring items needed to balance the budget. New York City passed its budget
on time, but also resorted to some one-shot gimmicks to balance the budget.
Through quarter-end, the City remained on credit watch with negative
implications. Subsequently, on July 10, 1995 Standard & Poor's downgraded New
York City's long term credit rating to "BBB+". There was no change in the market
price of New York City bonds after the announcement because the downgrade had
already been discounted by the market.
<PAGE>
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
- - -------------------------------------------------------------------------------
The Fund's total return for the quarter was 2.34% which underperformed the
Lehman New York Index of 2.59% by 24 basis points. However, as compared to the
peer group average return of 1.93%, represented by the Lipper New York Mutual
Fund universe, the Fund outperformed by 42 basis points, placing it in the 29th
percentile.
Although the market was quite volatile during the second quarter, the timing of
our trades was excellent, allowing us to improve the performance of the Fund.
The security selection for the Fund also contributed to the outperformance.
However, the Fund's performance during the first quarter trailed the Index and
pulled down the six months' performance. This was due to our defensive stance on
the market. We did not anticipate the abrupt slowing of the economy which fueled
the first quarter rally. Our average maturity and duration were too short to
benefit fully from the rally. Overall for the first six months of 1995, the
Fund's total return was 7.47%, compared to the Lipper average return of 9.00%
and the Lehman New York Index return of 9.29%.
OUTLOOK
- - -------------------------------------------------------------------------------
The outlook for the municipal market is positive for the near term. Municipal
yields were historically cheap to Treasuries. Long insured New York bond yields
reached 93% of Treasury yields.
Technical factors for July are very favorable. New issue supply in July is
estimated at $9 billion, which is below average. In addition, a large portion of
the approximately $40 billion in cash flow from coupon payments, maturities, and
call schedules is expected to be reinvested in the municipal market. Tax reform,
which had depressed prices in June, appears to be on the back burner until the
balanced budget legislation is passed. This vote is projected to take place late
in the fall. If and when tax reform takes center stage, we will become more
defensive and shorten up our average maturity and duration. Even though the tax
reform proposals are unlikely to be enacted, it will create an uncertain
environment which may affect the market adversely over the medium term.
Currently, fundamental factors are also positive for the municipal market. The
economy appears sluggish, inflation is moderate, and the dollar is stable.
Therefore, we are comfortable remaining a year long the Index for the near
future. We will continue to search for value in sectors and specific securities,
analyzing historical spread relationships and changing credit factors.
Sincerely,
[GRAPHIC OMITTED]
/s/W. Robert Alexander
W. Robert Alexander
PRESIDENT
2
<PAGE>
COMPARISON OF CHANGES IN VALUE OF $10,000 INVESTMENT IN
NEW YORK TAX-FREE BOND FUND VS. LEHMAN MUNICIPAL BOND INDEX
Average Annual Total Return
- - ------------------------------------------------------
1 Year 5 Years Inception
- - ------------------------------------------------------
Offering Price(1) (0.11)% 6.84% 6.91%
NAV(2) 4.91% 7.88 7.75%
[Graphic omitted]
FUND(1) LEHMAN MUNI FUND(2)
MAR 1989 10000 10000 10000
DEC 1989 10203 11005 10713
DEC 1990 10829 11807 11370
DEC 1991 12192 13242 12802
DEC 1992 13492 14409 14167
DEC 1993 15417 16178 16188
DEC 1994 14161 15340 14869
JUNE 1995 15219 16822 15980
Past performance is not predictive of future performance
(1) Includes the maximum sales charge
(2) Excludes the maximum sales charge
The above illustration compares a $10,000 investment in the New York Tax-Free
Bond Fund on March 21, 1989, to a $10,000 investment in the Lehman Municipal
Bond Index on that date. All dividends and capital gain distributions are
reinvested.
The performance takes into account all applicable fees and expenses. The Lehman
Municipal Bond Index is a widely accepted unmanaged index of overall municipal
bond market performance and does not take into account charges, fees and other
expenses.
3
<PAGE>
BOARD OF TRUSTEES
JOHN P. PFANN* CHAIRMAN OF THE BOARD; Chairman and President,
JPP Equities, Inc.
WOLFE J. FRANKL* Former Director, North America, Berlin Economic
Development Corporation
WILLIAM L. KUFTA Chief Investment Officer, Beacon Trust Company
ROBERT A. ROBINSON* Trustee, Henrietta and B. Frederick H. Bugher
Foundation
*Member of the Audit and Nominating Committees
- - -------------------------------------------------------------------------------
OFFICERS
W. ROBERT ALEXANDER PRESIDENT
STEVEN R. HOWARD SECRETARY
MARK A. POUGNET VICE PRESIDENT AND TREASURER
4
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS AS OF JUNE 30, 1995 (UNAUDITED)
NEW YORK TAX-FREE BOND FUND
CREDIT
RATING* PRINCIPAL
MDY/S&P AMOUNT VALUE
- - ------------ ------------ ----------
<C> <S> <C> <C>
INVESTMENTS IN NEW YORK MUNICIPAL
SECURITIES-85.1%
(Aaa/AAA) Battery Park City Authority New York Revenue,
6.50%, 05/01/99 ........................................... $2,000,000 $2,146,801
(Aaa/AAA) Bethlehem, New York CSD GO (AMBAC Insurance),
7.10%, 11/01/07 ........................................... 200,000 230,312
(Aaa/AAA) Islip GO (AMBAC Insured) 7.10%, 06/15/98 ..................... 150,000 160,666
(Baa1/BBB) Metropolitan Transportation Authority of New York
Commuter Facilities--Series P, (MBIA Insurance)
5.75%, 07/01/15 ........................................... 2,000,000 1,869,403
(A1/AA-) Monroe County, New York GO 7.00%, 06/01/04 ................... 50,000 54,620
(Aa3-/AA) New York City GO (Dai-Ichi Kangyo LOC) 4.45%, 07/03/95*** .... 500,000 500,000
(Aaa/AAA) New York City GO (FGIC Insurance) 4.50%, 07/03/95*** ......... 1,300,000 1,300,000
(Baa1/A-) New York City GO Series A
7.75%, 08/15/04 ........................................... 600,000 660,657
7.75%, 08/15/07 ........................................... 3,500,000 3,831,235
(Baa1/A-) New York City GO Series B 7.50%, 02/01/07 .................... 1,000,000 1,080,499
(Baa1/A-) New York City GO Series D 7.65%, 02/01/06 .................... 630,000 689,346
(Baa1/A-) New York City GO Series F 8.40%, 11/15/05 .................... 300,000 343,997
(Aaa/AAA) New York City Trust For Cultural Research (AMBAC Insurance)
6.40%, 01/01/04 ........................................... 350,000 378,743
(A/A-) New York City Water Authority 6.00%, 06/15/09 ................ 2,000,000 2,047,474
(A/A) New York City IDA Special Facility 6.125%, 01/01/24 .......... 2,500,000 2,437,500
(A/A ) New York State Assistance Corp--Series C 5.50%, 04/01/18 ..... 2,000,000 1,860,153
(Baa1/BBB+) New York State Dormitory Authority--City University,
5.75%, 07/01/18 ........................................... 2,370,000 2,220,924
(AAA) New York State Dormitory Authority Revenue--Culinary Institute
of America (Connie Lee Insurance), 6.00%, 07/01/22 ........ 1,000,000 996,027
(Baa1/BBB+) New York State Dormitory Authority--State University EDL
Series B 5.25%, 05/15/10................................... 2,440,000 2,245,573
(Baa1/BBB+) New York State Dormitory Authority--State University EDL
Series D 7.125%, 05/15/17 ................................. 2,000,000 2,225,552
(Aaa/AAA) New York State Energy Research & Development Facilities
(MBIA LOC), 5.60%, 06/01/25 ............................... 2,500,000 2,312,771
(Aa/A) New York State Environmental Facilities Corp., Water Pollution
Control Revolving Fund, 7.00%, 06/15/12 ................... 300,000 323,594
(Aa/AA-1) New York State Environmental Facilities Corp., Water Pollution
Control Revolving Fund Series B, 7.50%, 03/15/11 .......... 250,000 272,298
(Aa/A+) New York State Environmental Facilities Corp., Water Pollution
Control Revolving Fund Series 1990 C, 7.20%, 03/15/11 .... 200,000 216,491
(Aa/AA) New York State HFA Multi-Family Series A (HFA Insurance),
7.00%, 08/15/22 ........................................... 900,000 941,858
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS AS OF JUNE 30, 1995 (CONTINUED)
NEW YORK TAX-FREE BOND FUND
CREDIT
RATING* PRINCIPAL
MDY/S&P AMOUNT VALUE
- - ------------ ------------ ----------
<C> <S> <C> <C>
INVESTMENTS IN NEW YORK MUNICIPAL
SECURITIES-(continued)
(Aaa/AAA) New York State Medical Care Facility Series A (FGIC Insurance)
5.50%, 08/15/21 ........................................... $ 2,000,000 $ 1,858,799
(Aaa/AAA) New York State Medical Care Mental Health (CAPGTY and FGIC
Insurance) 7.70%, 02/15/18 ................................ 115,000 123,646
(Aaa/AAA) New York State Medical Care Facility--Series A 8.00%, 08/15/97 2,000,000 2,196,360
(Aaa/AAA) New York State Thruway Authority-Emergency Highway
(FSA Insurance), 6.00%, 03/01/02 .......................... 800,000 849,016
(Baa1/BBB) New York State Urban Development Corp., 7.50%, 04/01/20 ...... 2,500,000 2,671,290
(A/A-) New York State GO 5.70%, 03/15/13 ............................ 2,000,000 1,958,351
(Aaa/AAA) Oyster Bay, New York Public Improvement GO (FGIC Insurance)
6.60%, 02/15/98 ........................................... 200,000 211,032
(A1/AA-) Port Authority of New York / New Jersey (FGIC Insurance)
5.75%, 06/15/30 ........................................... 2,700,000 2,526,422
NR Syracuse, New York GO 6.70%, 02/15/01 ....................... 300,000 335,536
------------
TOTAL NEW YORK MUNICIPAL SECURITIES (Cost-$42,932,776) .............. 44,076,946
------------
INVESTMENTS IN OTHER MUNICIPAL SECURITIES-11.0%
(Baa1/A) Puerto Rico Commonwealth Highway and Transportation
5.25%, 07/01/20 ........................................... 2,000,000 1,764,658
(Baa/A-) Puerto Rico Electric Power Agency Series S 6.125%, 07/01/09 .. 2,000,000 2,060,782
(Aaa/AAA) Puerto Rico Public Building Authority (AMBAC LOC)
5.50%, 07/01/21 ........................................... 2,000,000 1,881,666
------------
TOTAL OTHER MUNICIPAL SECURITIES (Cost-$5,650,091) ................. 5,707,106
------------
TOTAL MUNICIPAL SECURITIES
(Cost-$48,582,867) ................................................... 49,784,052
------------
SHORT-TERM INVESTMENTS-8.5%
Goldman New York Tax-Exempt Money Market Fund, 3.73%,
On Demand .............................................. 2,075,000 2,075,000
Provident New York Money Market Fund 3.79%, On Demand ..... 2,319,000 2,319,000
------------
TOTAL SHORT-TERM INVESTMENTS (Cost-$4,394,000) ..................... 4,394,000
------------
TOTAL INVESTMENTS-104.6%
(Cost-$52,976,867)** ................................................ 54,178,052
------------
</TABLE>
6
<PAGE>
STATEMENT OF NET ASSETS AS OF JUNE 30, 1995 (CONTINUED)
<TABLE>
<CAPTION>
NEW YORK TAX-FREE BOND FUND
Value
------------
<S> <C>
OTHER ASSETS (LIABILITIES)-(4.6%)
Receivable for securities sold ........................................................... $ 2,242,083
Interest and dividends receivable ........................................................ 831,038
Receivable for fund shares sold .......................................................... 109
Other assets ............................................................................. 4,175
Liabilities for securities purchased ..................................................... (4,337,607)
Overdraft payable ........................................................................ (1,002,192)
Due to affiliates ........................................................................ (17,500)
Accrued expenses ......................................................................... (46,919)
Dividends payable ........................................................................ (81,730)
------------
Liabilities in excess of other assets-net ............................................. (2,408,543)
------------
NET ASSETS-100% .......................................................................... $ 51,769,509
============
NET ASSET VALUE PER SHARE-applicable to 4,848,862 shares
($0.001 par value) outstanding ........................................................ $10.68
======
<FN>
ABBREVIATIONS USED IN THIS STATEMENT:
AMBAC ....................................American Municipal Bond Assurance Corp.
CAPGTY ...................................Capital Guaranty
CSD ......................................Central School District
EDL ......................................Educational Facilities
FGIC .....................................Financial Guaranty Insurance Corporation
FSA ......................................Financial Security Association
GO .......................................General Obligations
HFA ......................................Housing Finance Agency
IDA ......................................Industrial Development Authority
LOC ......................................Letter of Credit
MBIA .....................................Municipal Bond Insurance Association
NR Not Rated--In the opinion of the Investment Adviser, the instrument judged
to be of comparable investment quality to rated securities which may be
purchased by the Funds. Institutions shown in parentheses have entered into
credit support agreements with the issuer.
* Credit Ratings were obtained from Standards & Poor's Corporation ("S&P") and Moody's Investors
Services, Inc. ("MDY").
** Also cost for Federal income tax purposes. As of June 30, 1995, net unrealized
appreciation for Federal income tax purposes
aggregated $1,201,185 of which $1,450,531 related to appreciated securities and $249,346 related
to depreciated securities.
*** Variable Rate Demand Note: Stated interest rate as of 06/30/95; maturity date reflects next rate
change.
</FN>
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 (UNAUDITED)
NEW YORK TAX-FREE BOND FUND
<S> <C>
INVESTMENT INCOME:
Income:
Interest ....................................... $ 1,587,231
Dividends ...................................... 27,384
-----------
1,614,615
-----------
Expenses:
Advisory fees .................................. 116,236
Distribution expenses .......................... 66,808
Transfer agent fees ............................ 33,918
Administrative services fee .................... 25,830
Co-administrative and shareholder servicing fees 18,081
Audit fee ...................................... 12,014
Printing ....................................... 9,215
Legal fees ..................................... 7,254
Trustees' fees and expenses .................... 4,325
Custodian fee .................................. 4,170
Miscellaneous expenses ......................... 9,897
-----------
Total expenses ............................. 307,748
Less expense waivers/reimbursements ............ (57,182)
-----------
Net expenses ............................... 250,566
-----------
Net investment income .......................... 1,364,049
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments ................... 856,026
Net change in unrealized appreciation on investments 1,495,622
-----------
Net gain on investments ............................ 2,351,648
-----------
Net increase in net assets resulting from operations $ 3,715,697
===========
</TABLE>
See Notes to Financial Statements
8
<PAGE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets (Unaudited)
NEW YORK TAX-FREE BOND FUND
For the
Six Months ended For the
June 30, 1995 Year ended
(Unaudited) December 31, 1994
-------------- -----------------
<S> <C> <C>
OPERATIONS:
Net investment income ........................................... $ 1,364,049 $ 2,871,468
Net realized gain (loss) on investments ......................... 856,026 (3,921,804)
Change in unrealized appreciation (depreciation) on investments . 1,495,622 (4,072,001)
------------ ------------
Net increase (decrease) in net assets resulting from operations 3,715,697 (5,122,337)
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ........................................... (1,364,049) (2,871,468)
Net realized gain on investments ................................ -- (146,190)
------------ ------------
Total distributions ........................................... (1,364,049) (3,017,658)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sales of 211,142 and 893,014 shares, respectively . 2,232,550 9,854,233
Net asset value of 77,995 and 269,021 shares issued in
reinvestment of distributions, respectively ..................... 825,598 2,976,621
Payments for redemptions of 409,561 and 1,469,467
shares, respectively ............................................ (4,351,650) (15,719,063)
------------ ------------
Net decrease in net assets from capital share transactions .... (1,293,502) (2,888,209)
------------ ------------
Total increase (decrease) in net assets ........................... 1,058,146 (11,028,204)
------------ ------------
NET ASSETS:
Beginning of period ............................................. 50,711,363 61,739,567
------------ ------------
End of period ................................................... $ 51,769,509 $ 50,711,363
============ ============
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Mariner New York Tax-Free Bond Fund (the "Fund") is an investment
portfolio of Mariner Mutual Funds Trust (the "Trust"). The Trust is a
Massachusetts business trust and is an open-end, diversified investment
company with multiple investment portfolios, including the Fund.
The Fund follows an investment policy of investing primarily in New
York municipal obligations. Economic changes affecting the state and
certain of its public bodies and municipalities may affect the ability
of issuers within the state to pay interest on, or repay principal of,
municipal obligations held by the Fund.
SECURITIES VALUATION: Portfolio securities for which market quotations
are readily available are valued at the quoted bid price. Securities
for which market quotations are not readily available are valued at
fair value as determined in good faith by or under the supervision of
the Trust's officers in accordance with guidelines which have been
adopted by the Board of Trustees. Such procedures include the use of
independent pricing services which use prices based on yields or prices
of securities of comparable quality, coupon, maturity and type,
indicators as to value from dealers and general market conditions.
Short-term obligations having a maturity of 60 days or less are valued
at amortized cost which approximates market value.
TAXES: It is the Fund's policy to comply with the provisions of the
Internal Revenue Code, as amended, applicable to regulated investment
companies, and to distribute substantially all of its taxable income
and net realized capital gains to its shareholders for each taxable
year. Therefore, no provision is required for Federal income tax.
The Fund has available a $3,921,804 capital loss carryforward which, if
not utilized, will expire in the year 2002.
DIVIDENDS AND DISTRIBUTIONS: The Fund intends to declare as a dividend
substantially all of its net investment income at the end of each
business day and to pay within five business days after the end of each
month. For purposes of distributions, net investment income consists of
interest, discount and dividends earned on investment securities, less
amortization of any market premium and accrued expenses. Net capital
gains, if any, will be distributed annually.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Security transactions
are recorded on the trade date. Identified cost of investments sold is
used for both financial statement and Federal income tax purposes.
Interest income is recorded as earned.
EXPENSE ALLOCATION: Expenses directly attributed to each Fund in the
Trust are charged to that Fund's operations; expenses which are
applicable to all Funds are allocated among them.
2. CAPITAL
The Trust is authorized to issue an unlimited number of shares of
beneficial interest each with a par value $0.001 per share. At June 30,
1995, the composition of net assets of the Fund was as follows:
Paid-in capital ............................ $ 53,634,170
Accumulated net realized loss on investments (3,065,846)
Net unrealized appreciation on investments . 1,201,185
------------
Total net assets ......................... $ 51,769,509
============
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. PORTFOLIO SECURITIES
The cost of securities purchased and proceeds from securities sold
(excluding short-term securities) for the six months ended June 30,
1995 were approximately $56,040,000 and $12,165,000, respectively.
4. AGREEMENTS
The Trust retains HSBC Asset Management Americas Inc.("HSBC Americas")
to act as Investment Adviser for the Fund. HSBC Americas is the North
American investment affiliate of HSBC Holdings plc (Hong Kong and
Shanghai Banking Corporation). As Investment Adviser, HSBC Americas
furnishes investment guidance and policy direction in connection with
the management of the portfolio of the Fund, subject to policy
established by the Board of Trustees.
As compensation for its services, HSBC Americas is paid monthly
advisory fees at the following annual rates:
Advisory
Portion of the Fund's average daily net assets Fee Rate
------------------------------------------------------- --------
Not exceeding $300 million ............................. 0.450%
In excess of $300 million but not exceeding $600 million 0.420%
In excess of $600 million but not exceeding $1 billion . 0.385%
In excess of $1 billion but not exceeding $1.5 billion . 0.350%
In excess of $1.5 billion but not exceeding $2 billion . 0.315%
In excess of $2 billion ................................ 0.280%
For the six months ended June 30, 1995, HSBC Americas earned
approximately $64,500 in advisory fees, net of fee waivers of
approximately $51,700.
As Administrator, PFPC Inc. ("PFPC") is paid a monthly asset based fee
of 0.10% of the Fund's first $200 million of average net assets;
0.075% of the Fund's next $200 million of average net assets; 0.05% of
the Fund's next $200 million of average net assets; and 0.03% of the
Fund's average net assets in excess of $600 million; exclusive of
out-of-pocket expenses. PFPC has agreed to waive 10% and 5% of its fee
during the first and second year of its administration, respectively.
For the six months ended June 30, 1995, PFPC earned approximately
$23,300, net of fee waivers of approximately $2,500, in administrative
services fees.
HSBC Americas may enter into agreements (the "Service Agreements") with
certain banks, financial institutions and corporations ("Service
Organizations") whereby each Service Organization handles recordkeeping
and provides certain administrative services for its customers who
invest in the Fund through accounts maintained at that Service
Organization. Each Service Organization will receive monthly payments,
which are based upon expenses that the Service Organization has
incurred in the performance of its services under the Service
Agreement. The payments from the Fund on an annual basis will not
exceed 0.25% of the average value of the Fund's shares held in the
subaccounts of the Service Organizations.
Marine Midland Bank, N.A. ("Marine Midland"), an affiliate of the
Adviser, serves as custodian for the Fund. For furnishing custodian
services, Marine Midland is paid a monthly fee with respect to the Fund
for safekeeping its assets plus certain transaction charges and
out-of-pocket expenses. For the six months ended June 30, 1995, Marine
Midland earned approximately $4,200 in custodian fees.
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
HSBC Americas earned co-administration and shareholder servicing fees
of 0.03% and 0.04% of the Fund's average net assets, respectively,
totaling approximately $18,100. Of that total, HSBC Americas waived
approximately $3,000 of these fees for the month of January 1995.
The Fund has adopted a Distribution Plan and Agreement (the "Plan")
pursuant to Rule 12b-1 of the Investment Company Act of 1940, as
amended. The Plan provides for a monthly payment by the Fund to Mariner
Funds Services for expenses incurred in connection with distribution
services provided to the Fund not to exceed an annual rate of 0.35% of
the average daily value of the Fund's net assets during the preceding
month.
A partner of Baker & McKenzie, legal counsel to the Trust, serves as
Secretary of the Trust. For the six months ended June 30, 1995, the
Fund paid legal fees of approximately $9,300 to Fund counsel.
12
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios For a Share Outstanding Throughout Each Period
NEW YORK TAX-FREE BOND FUND
For the
Six Months ended For the Year ended December 31,
June 30, 1995 ------------------------------------------------------------------------
(Unaudited) 1994 1993 1992 1991 1990
---------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ............ $ 10.20 $ 11.70 $ 11.01 $ 10.66 $ 10.14 $ 10.20
---------- ---------- ---------- ---------- ---------- ----------
Income From Investment
Operations
Net investment income ........ 0.28 0.53 0.59 0.66 0.66 0.64
Net realized and
unrealized gain (loss)
on securities .............. 0.48 (1.47) 0.95 0.44 0.57 (0.04)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment
operations ................. 0.76 (0.94) 1.54 1.10 1.23 0.60
---------- ---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net investment income ........ (0.28) (0.53) (0.59) (0.66) (0.66) (0.64)
Net realized gain ............ -- (0.03) (0.26) (0.09) (0.05) (0.02)
---------- ---------- ---------- ---------- ---------- ----------
Total distributions .......... (0.28) (0.56) (0.85) (0.75) (0.71) (0.66)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value,
end of period .................. $ 10.68 $ 10.20 $ 11.70 $ 11.01 $ 10.66 $ 10.14
========== ========== ========== ========== ========== ==========
Total Return(a) ................... 7.47%(b) (8.13%) 14.27% 10.66% 12.59% 6.13%
Ratios/Supplemental Data
Net assets (000),
end of period .............. $ 51,770 $ 50,711 $ 61,740 $ 32,407 $ 14,929 $ 7,268
Ratio of expenses
(net of fee waivers)
to average net assets* ..... 0.98%(c) 0.84% 0.63% 0.38% 0.34% 0.50%
Ratio of net investment
income (net of fee
waivers) to average
net assets* ................ 5.20%(c) 4.93% 4.98% 6.04% 6.36% 6.38%
Portfolio turnover rate ...... 24.35%(b) 122.43% 70.36% 66.44% 110.27% 88.48%
- - --------------
<FN>
(a) Excludes sales charge.
(b) Not Annualized.
(c) Annualized.
* The ratios of net investment income and expenses to average net assets for
the six months ended June 30, 1995 reflect a decrease of 0.22% or $0.01 per
share (1994-0.26% or $0.03) (1993-0.43% or $0.05) (1992-0.79% or $0.08)
(1991-0.98% or $0.10) (1990-1.03% or $0.10) due to fee waivers.
</FN>
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
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MARINERSM MUTUAL FUNDS TRUST
370 17th Street, Suite 2700
Denver, Colorado 80202
GENERAL INFORMATION:
(800) 753-4462
INVESTMENT ADVISER AND CO-ADMINISTRATOR
HSBC Asset Management Americas Inc.
250 Park Avenue
New York, New York 10177
SPONSOR AND DISTRIBUTOR
MarinerSM Funds Services
370 17th Street, Suite 2700
Denver, Colorado 80202
ADMINISTRATOR, TRANSFER
AND DIVIDEND DISBURSING AGENT
PFPC, Inc.
400 Bellevue Parkway
Wilmington, Delaware 19809
CUSTODIAN
Marine Midland Bank, N.A.
140 Broadway
New York, New York 10015
Legal Counsel
BAKER & MCKENZIE
805 THIRD AVENUE
NEW YORK, NEW YORK 10022
INDEPENDENT AUDITORS
Ernst & Young LLP
787 Seventh Avenue
New York, New York 10019
This report is for the information of the shareholders of Mariner Mutual Funds
Trust. Its use in connection with any offering of the Trust's shares is
authorized only in the case of a concurrent or prior delivery of the Trust's
current prospectus.
===============================================================================
