MARINER MUTUAL FUNDS TRUST
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SMALL CAP FUND
HSBC Asset Management [Logo]
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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
SMALL CAP FUND
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HSBC Asset Management [Logo]
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July 21, 1995
Dear Shareholder:
After a lackluster year for small stocks in 1994, the first half of 1995 has
been more profitable for investors. However, small-cap stocks continued to
underperform larger-cap stocks. In the first half of 1995 the Russell 2000
returned 14.42%. This is compared to the 20.33% return for the S&P 500 Index and
20.33% for the Dow Jones Industrials. The NASDAQ Composite continued its
outperformance with a 24.14% return. However, this Index is really not
representative of small-cap stocks because it is influenced by some very large
companies that dominate the largest 100 names in the Index. For example, Apple
Computer, Microsoft, Intel and MCI Communications (all of which are in the
NASDAQ Composite) would hardly be considered small companies.
The best performing sectors of the small capitalization market (as defined and
measured by the Russell 2000 Index) in the first half were technology (up 28.1%)
and producer durables (up 20.2%). Financial services also made a good showing
with a 15.9% return. Within the technology sector, the semiconductor industry
was the standout leader. The worst performing sectors in the first half were
real estate investment trusts (down 0.1%), autos and transportation (up 6.3%)
and consumer discretionary (up 7.9%).
The decline in interest rates and good earnings were the main reasons equities
experienced positive returns in the first half. However, as was the case in
1994, a falling dollar and growing international economies resulted in quite a
few positive earnings surprises among large multinational companies. This helped
large-cap stocks (which tend to have a larger exposure to foreign economies) to
outperform small-cap stocks in the first half.
However, the market environment may be changing in the favor of small-cap
stocks. First, it appears the dollar may be bottoming. If the dollar is
bottoming or beginning to strengthen, this would be a positive for small-cap
stocks. Secondly, with the domestic economy slowing, investors will be looking
for companies that can continue to show good earnings growth in this type of
environment. This hunt for growth may lead investors to look at small companies
where above average growth is most likely to occur. Lastly, from a valuation
standpoint, small-cap stocks continue to be attractive versus large-cap stocks.
MANAGER'S DISCUSSION OF FUND PERFORMANCE:
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For the six months ended June 30, 1995, the Mariner Small Cap Fund posted a
positive return of 18.40%. This return was above its relevant benchmark, the
Russell 2000 Index, return of 14.42%. The second quarter accounted for most of
the outperformance, with the Fund recording a 14.37% positive return versus
9.37% for the Russell 2000 Index.
<PAGE>
During the first half of 1995, the Fund was positively influenced by the
outperformance in the holdings in the technology and financial services sectors.
Conversely, the Fund was hindered by the relative underperformance of the
consumer sector.
Currently the Mariner Small Cap Fund reflects several attractive
characteristics. The Fund has a higher projected growth in earnings, a higher
return on equity and a lower debt-to-capital than the general market. However,
for these attractive characteristics the Fund is valued (in terms of its price
earnings ratio) at a modest premium to the market.
As always, we continue to value your participation and interest in the Mariner
Small Cap Fund. Our objective is to strive to meet your expectations of a
quality fund that will meet your financial goals.
Sincerely,
[GRAPHIC OMITTED]
/s/W. Robert Alexander
W. Robert Alexander
PRESIDENT
2
<PAGE>
COMPARISON OF CHANGES IN VALUE OF $10,000 INVESTMENT IN
SMALL CAP FUND VS. RUSSELL 2000 INDEX
Average Annual Total Return
--------------------------------------
1 Year Inception
--------------------------------------
Offering Price(1) 27.17% 12.69%
NAV(2) 33.81% 15.04%
[GRAPHIC OMITTED]
FUND(1) RUSSELL FUND (2)
JAN 1993 10000 10000 10000
MAR 1993 9601 10426 10110
JUN 1993 10551 10653 11110
SEP 1993 11444 11585 12050
DEC 1993 11752 11889 12374
MAR 1994 11226 11574 11821
JUN 1994 10068 11122 10602
SEP 1994 11140 11894 11790
DEC 1994 11378 11673 11981
MAR 1995 11780 12211 12405
JUNE 1995 13473 13990 14187
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 Small Cap Fund on
January 4, 1993, to a $10,000 investment in the Russell 2000 Index on that date.
All dividends and capital gain distributions are reinvested.
The performance takes into account all applicable fees and expenses. The Russell
2000 Index is a widely accepted unmanaged index of overall market performance of
many of the smallest publicly traded companies in the U.S. 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
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS AS OF JUNE 30, 1995 (UNAUDITED)
SMALL CAP FUND
NUMBER
OF SHARES VALUE
- - ------------ ------------
<C> <S> <C>
STOCKS-94.0%
BEVERAGES-2.9%
15,900 * Canandaigua Wine Co., Inc. ........................ $ 711,525
----------
BROADCAST MEDIA-1.6%
24,400 * International Family Entertainment Inc., Class B .. 384,300
----------
COMMERCIAL SERVICES-8.7%
20,325 Paychex, Inc. ..................................... 736,781
16,750 Sensormatic Electronics Corp. ..................... 594,625
32,700 * Verifone, Inc. .................................... 779,100
----------
2,110,506
----------
COMPUTER SOFTWARE-5.6%
25,800 * Emulex Corporation ................................ 622,425
27,400 * Network General Corp. ............................. 746,650
----------
1,369,075
----------
COMPUTER SYSTEMS-9.0%
19,300 * Cisco System, Inc. ................................ 975,856
16,500 * Proxima Corp. ..................................... 393,937
29,600 * Xylogics, Inc. .................................... 821,400
----------
2,191,193
----------
DATA PROCESSING-1.1%
32,100 * Envoy Corp. ....................................... 272,850
----------
DEPARTMENT STORES-3.1%
25,000 * Proffitts, Inc. ................................... 743,750
----------
ELECTRONICS-3.8%
22,900 Harman International Industries, Inc. ............. 927,450
----------
FINANCE-CONSUMER LOANS-3.8%
26,050 The Money Store, Inc. ............................. 932,916
----------
FINANCIAL SERVICES-6.0%
24,000 Advanta Corp., Class B ............................ 1,000,500
8,050 First Data Corp. .................................. 457,844
----------
1,458,344
----------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS AS OF JUNE 30, 1995 (CONTINUED)
SMALL CAP FUND
NUMBER
OF SHARES VALUE
- - ------------ ------------
<C> <S> <C>
STOCKS-(CONTINUED)
HEALTH CARE-DRUGS-2.4%
13,100 * Forest Laboratories, Inc., Class A $ 581,312
-----------
MACHINERY-5.2%
22,100 * Electroglas, Inc. ................. 1,265,225
-----------
MEDICAL SERVICES-2.2%
15,600 * Healthsource, Inc. ................ 546,000
-----------
OFFICE EQUIPMENT & SUPPLIES-5.3%
32,700 * Silicon Graphics, Inc. ............ 1,303,914
-----------
PERSONAL CARE PRODUCTS-1.0%
31,600 * Drypers Corp. ..................... 237,000
-----------
RECREATION AND ENTERTAINMENT-3.0%
20,700 * Movie Gallery, Inc. ............... 725,794
-----------
RESTAURANTS-3.8%
41,000 * Davco Restaurant .................. 533,000
30,700 * O Charley's, Inc. ................. 399,100
-----------
932,100
-----------
RETAIL-SPECIALTY-10.1%
20,200 * Discount Auto Parts, Inc. ......... 512,575
35,675 * Office Depot, Inc. ................ 1,003,359
23,800 * Petco Animal Supplies ............. 553,350
28,100 * Rex Stores Corporation ............ 393,400
-----------
2,462,684
-----------
TELECOMMUNICATION-EQUIPMENT-10.3%
19,000 * Cidco, Inc ........................ 596,125
12,300 U.S. Robotics, Inc. ............... 1,340,700
26,800 * Symmetricon, Inc. ................. 582,900
-----------
2,519,725
-----------
WHOLESALE TRADE-5.1%
11,725 Cardinal Health Distribution ........ 554,006
20,700 Fisher Scientific International, Inc. 685,687
-----------
1,239,693
-----------
Total Stocks (Cost-$15,309,161) ..... 22,915,356
-----------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS AS OF JUNE 30, 1995 (CONTINUED)
SMALL CAP FUND
PRINCIPAL
AMOUNT VALUE
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<C> <S> <C>
SHORT-TERM INVESTMENTS-6.4%
$ 768,000 Federated Prime Obligation, 5.970%, On Demand .. $ 768,000
798,000 Merrill Lynch & Co., 6.040%, On Demand .......... 798,000
-----------
Total Short-Term Investments (Cost $1,566,000) .. 1,566,000
-----------
TOTAL INVESTMENTS-100.4%
(Cost-$16,875,161)** ......................... 24,481,356
-----------
OTHER ASSETS (LIABILITIES)-(0.4%)
Cash ............................................ 575
Organizational costs, net ....................... 23,522
Dividends receivable ............................ 2,969
Due from affiliate .............................. 19,773
Other assets .................................... 1,658
Payable for capital stock redeemed .............. (125,723)
Accrued expense ................................. (6,887)
Due to affiliates ............................... (17,113)
-----------
Liabilities in excess of other assets--net ...... (101,226)
-----------
NET ASSETS-100 .................................. $24,380,130
===========
NET ASSET VALUE PER SHARE-applicable to 1,729,743
shares ($0.001 par value) outstanding ........... $14.09
======
<FN>
* Non-income producing security.
** Also cost for Federal income tax purposes. As of June 30, 1995, unrealized
appreciation for Federal income tax purposes aggregated $7,606,195 of which
$8,225,744 related to appreciated securities and $619,549 related to depreciated
securities.
</FN>
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 (UNAUDITED)
SMALL CAP FUND
<S> <C>
INVESTMENT INCOME:
Income:
Dividends ...................................... $ 46,857
-----------
Expenses:
Advisory fees .................................. 82,592
Administrative services fee .................... 11,799
Audit fee ...................................... 11,783
Co-administrative and shareholder servicing fees 8,261
Distribution expenses .......................... 7,576
Legal fees ..................................... 7,273
Transfer agent fees ............................ 6,949
Amortization of organizational costs ........... 5,655
Printing ....................................... 3,386
Trustees' fees and expenses .................... 3,175
Custodian fee .................................. 894
Miscellaneous expenses ......................... 1,801
-----------
Total expenses ............................. 151,144
Less expense waivers/reimbursements ............ (3,496)
-----------
Net expenses ............................... 147,648
-----------
Net investment loss ............................ (100,791)
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments ................... 1,364,643
Net change in unrealized appreciation on investments 2,780,127
-----------
Net gain on investments ............................ 4,144,770
-----------
Net increase in net assets resulting from operations $ 4,043,979
===========
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
SMALL CAP FUND
For the
Six Months ended For the
June 30, 1995 Year ended
(Unaudited) December 31, 1994
--------------- -----------------
<S> <C> <C>
OPERATIONS:
Net investment loss .................................................. $ (100,791) $ (147,610)
Net realized gain (loss) on investments .............................. 1,364,643 (2,230,327)
Net change in unrealized appreciation on investments ................. 2,780,127 1,830,241
------------ ------------
Net increase (decrease) in net assets resulting from operations .... 4,043,979 (547,696)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sales of 50,670 and 823,619 shares, respectively ....... 616,858 9,625,604
Net asset value of -0- and 225 shares, issued in reinvestment
of distributions, respectively ....................................... -- 2,763
Payments for redemptions of 364,430 and 217,556 shares, respectively . (4,588,286) (2,431,794)
------------ ------------
Net increase(decrease) in net assets from capital share transactions (3,971,428) 7,196,573
------------ ------------
Total increase in net assets ........................................... 72,551 6,648,877
------------ ------------
NET ASSETS:
Beginning of period .................................................. 24,307,579 17,658,702
------------ ------------
End of period ........................................................ $ 24,380,130 $ 24,307,579
============ ============
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Mariner Small Cap 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.
SECURITIES VALUATION: Investments in securities traded on an exchange
are valued at the last quoted sales price for a given day, or if a sale
is not reported for that day, at the mean between the most recent bid
and asked prices. The bid price is used when no asked price is
available. Securities for which no quotations are readily available are
valued at fair value under procedures established by the Board of
Trustees. 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 gains to its shareholders for each taxable year.
Therefore, no provision is required for Federal income tax.
The Fund has available a $2,230,327 capital loss carryforward which, if
not utilized, will expire in the year 2002.
DIVIDENDS AND DISTRIBUTIONS: The Fund intends to pay, as a semi-annual
dividend, substantially all of its net investment income. Net capital
gains, if any, are distributed at least annually.
For the year ended December 31, 1994, the Fund reclassified $147,610
from accumulated net investment loss to paid-in capital. Net assets
were not affected by this change.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Security transactions
are recorded on the trade date. Identified cost of investments sold is
used for both financial statements and Federal income tax purposes.
Dividend income is recorded on the ex-dividend date. 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.
ORGANIZATIONAL COSTS: Costs incurred in connection with the
organization of the Fund are being amortized on a straight-line basis
over a five year period from the date operations commenced.
2. CAPITAL
The Trust is authorized to issue an unlimited number of shares of
beneficial interest each with a par value of $0.001. At June 30, 1995,
the composition of net assets of the Fund was as follows:
Paid-in capital ............................ $ 17,740,410
Net investment loss ........................ (100,791)
Accumulated net realized loss on investments (865,684)
Net unrealized appreciation on investments . 7,606,195
------------
Total net assets ......................... $ 24,380,130
============
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 $3,085,000 and $5,112,000, 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 policies
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 $400 million ............................. 0.700%
In excess of $400 million but not exceeding $800 million 0.645%
In excess of $800 million but not exceeding $1.2 billion 0.590%
In excess of $1.2 billion but not exceeding $1.6 billion 0.535%
In excess of $1.6 billion but not exceeding $2 billion . 0.480%
In excess of $2 billion ................................ 0.415%
HSBC Americas retains Investment Concepts, Inc. ("ICI") to serve as
sub-adviser to the Fund. As sub-adviser, ICI provides micro-and
macroeconomic research, advice and recommendations, and economic and
statistical data, with respect to the Fund's investments, subject to
the overall review by HSBC Americas and the Board of Trustees. ICI is a
subsidiary of BancOklahoma Trust Company ("BOTC"). BOTC is a subsidiary
of Bank of Oklahoma, N.A. ("BOK") which, in turn, is a subsidiary of
BOK Corporation.
As compensation for its services, HSBC Americas pays ICI a monthly fee
at an annual rate not to exceed 0.50% of average daily net assets up to
$400 million. The fee is reduced at several breakpoints for average
daily net assets in excess of $400 million up to $2 billion, at which
point it becomes 0.290% of the average daily net assets in excess of $2
billion.
For the six months ended June 30, 1995, HSBC Americas earned
approximately $82,600 in advisory fees, of which approximately
$59,000 was paid to ICI.
As Administrator, 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
$10,600, net of waivers of approximately $1,200, in administrative
services fees.
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 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, HSBC
Americas paid the Fund's entire custodian fee of approximately $900.
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 $8,300. Of that total, HSBC Americas waived
approximately $1,400 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.
One state in which the shares of the Fund are qualified for sale
imposes limitations on the expenses of the Fund. The Advisory Contract
and the Administrative Services Contract with HSBC Americas provide
that if, in any fiscal year, the total expenses of the Fund (excluding
taxes, interest, distribution expenses, brokerage commissions and other
portfolio transaction expenses, other expenditures which are
capitalized in accordance with generally accepted accounting principles
and extraordinary expenses, but including the advisory and
administrative services fees) exceed the expense limitation applicable
to the Fund imposed by the securities regulations of such state, HSBC
Americas will pay or reimburse the Fund in amounts equal to the excess.
Although there is no certainty that this limitation will be in effect
in the future, the effective limitation on an annual basis with respect
to the Fund is currently 2.5% per annum of the first $30 million of
average net assets, 2.0% of the next $70 million of average net assets
and 1.5% of average net assets in excess of $100 million. For the six
months ended June 30, 1995, there were no payments or reimbursements
required as a result of this expense limitation.
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
SMALL CAP FUND
For the Period
For the January 4, 1993
Six Months ended For the (Commencement of
June 30, 1995 Year ended Operations) to
(Unaudited) December 31, 1994 December 31, 1993
---------------- ----------------- -----------------
<S> <C> <C> <C>
Net asset value, beginning of period .................. $ 11.90 $ 12.29 $ 10.00
---------- ---------- ----------
Income from Investment Operations:
Net investment loss .............................. (0.05) (0.07) (0.05)
Net realized and unrealized gain (loss)
on investments ................................. 2.24 (0.32) 2.42
---------- ---------- ----------
Total from investment operations ................. 2.19 (0.39) 2.37
---------- ---------- ----------
Less Distributions from:
Net realized gain ................................ -- -- (0.08)
---------- ---------- ----------
Net asset value, end of period ........................ $ 14.09 $ 11.90 $ 12.29
========== ========== ==========
Total return (a) ...................................... 18.40%(c) (3.17%) 23.74%(c)
Ratios/Supplemental Data
Net assets (000), end of period .................. $ 24,380 $ 24,308 $ 17,659
Ratio of expenses (net of fee waivers ) to average
net assets* .................................... 1.26%(b) 1.23% 1.12%(b)
Ratio of net investment loss (net of fee waivers)
to average net assets* ......................... (0.85%)(b) (0.68%) (0.51%)(b)
Portfolio turnover rate .......................... 13.62%(c) 20.17% 5.96%(c)
- - --------------
<FN>
(a) Exclusive of sales charge.
(b) Annualized.
(c) Not annualized.
* The ratios of net investment loss and expenses to average net assets for the
six months ended June 30, 1995 reflect a decrease of 0.03% or $0.03 per share
(1994--0.05% or $0.006) (1993--0.46% or $0.05) due to fee waivers.
</FN>
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
===============================================================================
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.
===============================================================================
