<PAGE>
SEMI-ANNUAL REPORT
TO
SHAREHOLDERS
11/30/95
<PAGE>
CUFUND
THE CREDIT UNION FAMILY OF FUNDS
To Our Shareholders:
The total assets of the Short-Term Maturity Portfolio and the Adjustable Rate
Portfolio have remained relatively stable during the first half of the year as
the liquidity needs of credit unions have diminished. Approximately 80 credit
unions have invested in CUFUND since inception.
CUFUND remains unique among mutual funds because it is the only mutual fund to
be advised by a credit union, Southwest Corporate Federal Credit Union. As a
result, CUFUND is uniquely positioned to respond to the concerns and
expectations of natural person credit unions, as well as the continuing
regulatory changes. We believe that Southwest Corporate Federal Credit Union's
familiarity with credit unions will make CUFUND an excellent investment choice.
It has been a very good year for the bond market, and CUFUND has maintained a
strong performance record. Southwest Corporate Federal Credit Union, the
advisor of the fund, SEI Financial Management Corporation, the administrator
and SEI Financial Services Company, the distributor, thank you for your
continued support and confidence in CUFUND.
Sincerely,
/s/David G. Lee
David G. Lee
President
<PAGE>
CUFUND
INVESTMENT ADVISORY REPORT
ADJUSTABLE RATE PORTFOLIO--LINDA K. BOWERS
SOUTHWEST CORPORATE FEDERAL CREDIT UNION
NOVEMBER 30, 1995
The investment objective of the Adjustable Rate Portfolio is to seek higher
current income while reducing principal volatility. The treasury yield curve
(2-30 year) shifted downward by nearly 50 basis points over the last six
months. Economic data shows continued softness and market participants expect
the Federal Reserve Board (the Fed) to begin an easing process over the next
few months. The remainder of the year will focus on the outcome of the budget
process and the credibility of the deficit reduction package. This should cause
some volatility before year-end. Prepayments remain a concern as the long end
of the yield curve is sharply lower in the last few months. This will encourage
adjustable rate mortgage (ARM) holders to refinance into fixed rate mortgages.
The current attributes of the portfolio as of November 30, 1995 break down as
follows. The weighted average life of the portfolio is 2.39 years with a
weighted average lifetime cap of 12.56%. The weighted effective duration of the
portfolio is approximately 0.50 years. Thirty-seven percent (by aggregate
principal balance) of the securities reset semi-annually, another 46% (by
aggregate principal balance) reset monthly and the remaining 17% (by aggregate
principal balance) are in short term (maturity of under 90 days) securities.
Fifty-two percent (by aggregate principal balance) of the securities are issued
by government agencies, 42% (by aggregate principal balance) are AAA rated
whole loan securities, 5% (by aggregate principal balance) are AA rated whole
loan securities and 1% (by aggregate principal balance) of the fund is invested
in SEI money funds. The short term fixed holdings decreased to 18% (by
aggregate principal balance) during the period.
The 30-day yield of the Adjustable Rate portfolio ranged from 5.91% to 6.27%
over the last six-month period. The 30-day yield as of November 30, 1995 was
6.08%. The London Interbank Offered Rate (LIBOR) and the rate the Fed charges
on loans to depository institutions (the Fed Funds rate) have remained steady
during the third calendar quarter, hence the steadiness of the portfolio yield.
The portfolio's net asset value (NAV) increased from 9.94 on May 31, 1995 to
9.99 on November 30, 1995. The advisor expects the yield to hold steady as long
as the Fed does not raise rates because the majority of the six month LIBOR
ARMs are becoming fully indexed. The NAV may continue to creep upward depending
on the supply/demand scenario of the adjustable rate market and the absolute
level and shape of the yield curve.
The adjustable rate market is still extremely cognizant of increasing
prepayment speeds. The flattening of the yield curve has enticed adjustable
rate mortgage holders to refinance into lower coupon fixed rate mortgages. The
supply of adjustable rate products has been extremely thin for the same reason.
New products that represent value for the investor have been difficult to find.
As pieces become available, the advisor will invest, lowering the high balance
of short term funds.
<PAGE>
CUFUND
INVESTMENT ADVISORY REPORT
SHORT-TERM MATURITY PORTFOLIO--BRUCE M. FOX
SOUTHWEST CORPORATE FEDERAL CREDIT UNION
NOVEMBER 30, 1995
The investment objective of the Short-Term Maturity Portfolio is to seek a high
level of income consistent with safety of capital. The primary investment
strategy undertaken by the adviser of the portfolio was a "buy and hold"
strategy. The assets of the Portfolio were distributed between U.S. Agency and
various mortgage-backed securities (MBS). Usually, the securities in the Short-
Term Maturity Portfolio maintain an average-weighted maturity of three years or
less.
The Federal Reserve Board (the Fed) decreased the rate it charges on loans to
depository institutions (the Fed Funds rate) by 25 basis points, putting the
Fed Funds rate at 5.75% in July, and has held rates steady since. The bond
market continued to rally in the second half of 1995 as interest rates
decreased approximately 40 to 50 basis points across the treasury yield curve.
The yield curve remains extremely flat, with term interest rates below the Fed
Funds rate from thirty days through ten years. Market participants expect
further Fed easing in the coming months; however the timing of the next Fed
action will depend in part on a resolution of the federal budget debate.
During the second and third calendar quarters of 1995 the advisor adopted a
neutral position by maintaining the interest rate sensitivity of the portfolio.
The average weighted maturity of the securities in the portfolio was 1.22 years
as of November 30, 1995. The portfolio had approximately 10% of its total
assets (by aggregate principal balance) in cash or cash equivalents. The NAV
per share has increased from $9.73 on May 31, 1995 to $9.82 on November 30,
1995.
The advisor will maintain a neutral strategy, focusing on maintaining or
slightly increasing the portfolio's current interest rate sensitivity. A
portion of the cash or cash equivalents will be extended in longer duration
holdings as market conditions warrant.
<PAGE>
STATEMENT OF NET ASSETS CUFUND
November 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) ADJUSTABLE RATE PORTFOLIO (000)
- --------------------------------------------------------------------------------
<C> <S> <C>
AGENCY MORTGAGE-BACKED OBLIGATIONS (34.3%)
FHLMC
$ 5,678 Class #1329 FA, 5.610%, 08/15/99 (A) CMO .................. $ 5,534
3,053 Class #1512 M, 5.561%, 05/15/08 (A) CMO ................... 2,962
8,056 Class #1611 G, 6.380%, 05/15/21 (A) CMO ................... 8,076
4,894 Pool #97003, 7.544%, 01/01/23 (A) (B) ..................... 4,975
9,676 Pool #970021, 7.579%, 01/01/23 (A) (B) .................... 9,876
FNMA
1,470 Class #92-28F, 6.344%, 05/25/07 (A) CMO ................... 1,474
16,500 Class #92-112 FC, 6.544%, 06/25/18 (A) CMO ................ 16,647
876 Pool #165655, 7.805%, 05/01/22 (A) (B) .................... 897
3,550 Pool #166291, 7.831%, 06/01/22 (A) (B) .................... 3,618
767 Pool #169164, 8.078%, 06/01/22 (A) (B) .................... 783
- --------------------------------------------------------------------------------
Total Agency Mortgage-Backed Obligations (Cost $54,889) ..... 54,842
- --------------------------------------------------------------------------------
NON-AGENCY MORTGAGE-BACKED OBLIGATIONS (47.3%)
Capstead Securities IV
3,394 Class #92-9 A, 7.125%, 07/25/22 (A) (B) ................... 3,343
Citicorp Mortgage Securities
875 Class #92-9 A4, 6.725%, 04/25/21 (A) CMO .................. 878
DLJ Mortgage Acceptance
4,928 Class #94-Q1 1A1, 6.819%, 03/25/24 (A) (B) ................ 4,980
Fund America Investor II
2,909 Class #93-J M, 7.945%, 12/25/23 (A) (B) ................... 2,970
Merrill Lynch Mortgage Investments
7,400 Class #91-F A2, 6.653%, 06/15/16 (A) (B) .................. 7,473
7,000 Class #92-C A2, 6.662%, 06/15/17 (A) (B) .................. 7,000
Prudential Home Mortgage Securities
5,477 Class #93-5 A7, 6.544%, 03/25/00 (A) CMO .................. 5,517
Residential Funding Mortgage Securities I
517 Class #92-S33 A4, 6.694%, 09/25/19 (A) CMO ................ 518
Resolution Trust
2,967 Class #92-M4 A4, 6.675%, 09/25/21 (A) CMO ................. 2,970
1,946 Class #92-6 B9, 6.860%, 11/25/26 (A) CMO .................. 1,932
2,016 Class #92-3 A4, 6.425%, 09/25/30 (A) CMO .................. 2,033
Ryland Mortgage Securities
2,566 Class #92-L6 A2, 7.925%, 05/25/22 (A) (B) ................. 2,616
2,629 Class #92-L9 A2, 7.925%, 07/25/22 (A) (B) ................. 2,659
5,000 Class #92-L9 A1B, 7.925%, 07/25/22 (A) (B) ................ 5,088
Salomon Brothers Mortgage Securities VII
3,825 Class #92-2 A4, 7.550%, 06/25/22 (A) (B) .................. 3,883
2,596 Class #92-4 A5, 7.630%, 09/25/22 (A) (B) .................. 2,660
4,413 Class #92-6 A1, 7.575%, 11/25/22 (A) (B) .................. 4,515
Saxon Mortgage Securities
843 Pool #92-1 A2, 7.925%, 09/25/22 (A) (B) ................... 849
</TABLE>
<PAGE>
STATEMENT OF NET ASSETS CUFUND
November 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) ADJUSTABLE RATE PORTFOLIO (concluded) (000)
- --------------------------------------------------------------------------------
<C> <S> <C>
$ 2,800 Pool #92-3 A1, 7.875%, 11/25/22 (A) (B) .................. $ 2,821
4,533 Pool #93-1 A1, 7.945%, 02/25/23 (A) (B) .................. 4,578
Sears Mortgage Securities
1,918 Class #93-3 F, 6.794%, 07/25/20 (A) CMO .................. 1,921
Securitized Assets Sales
4,441 Class #93-8 A2, 7.890%, 12/26/23 (A) CMO ................. 4,530
- --------------------------------------------------------------------------------
Total Non-Agency Mortgage-Backed Obligations
(Cost $75,553) ....................................... 75,734
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (17.6%)
FFCB Discount Note
7,000 5.650%, 12/08/95 ......................................... 6,991
FHLB Discount Note
7,500 5.670%, 12/12/95 ......................................... 7,485
7,000 5.630%, 01/03/96 ......................................... 6,963
1,000 5.600%, 01/29/96 ......................................... 991
FNMA Discount Note
5,800 5.580%, 02/14/96 ......................................... 5,732
- --------------------------------------------------------------------------------
Total U.S. Government Agency Obligations (Cost $28,167). 28,162
- --------------------------------------------------------------------------------
CASH EQUIVALENTS (0.6%)
169 SEI Liquid Asset Trust Government Portfolio................. 169
725 SEI Liquid Asset Trust Treasury Money Market Portfolio...... 725
- --------------------------------------------------------------------------------
Total Cash Equivalents (Cost $894) ..................... 894
- --------------------------------------------------------------------------------
Total Investments (99.8%) (Cost $159,503) .............. 159,632
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (0.2%)
- --------------------------------------------------------------------------------
Total Other Assets and Liabilities ..................... 375
- --------------------------------------------------------------------------------
NET ASSETS:
Portfolio shares (unlimited authorization--no par value)
based on 16,019,000 outstanding shares of beneficial
interest................................................... 160,510
Distributions in excess of Net Investment Income ........... (20)
Accumulated Net Realized Loss on Investments ............... (612)
Net Unrealized Appreciation of Investments ................. 129
- --------------------------------------------------------------------------------
TOTAL NET ASSETS: (100.0%) ............................. $160,007
- --------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER
SHARE .................................................. $9.99
- --------------------------------------------------------------------------------
</TABLE>
(A) Adjustable Rate Features. Rate shown on the Statement of Net Assets is the
rate in effect on November 30, 1995.
(B) Pass-Through Security
CMO--Collateralized Mortgage Obligation
FFCB--Federal Farm Credit Bank
FHLB--Federal Home Loan Bank
FHLMC--Federal Home Loan Mortgage Corporation
FNMA--Federal National Mortgage Association
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATEMENT OF NET ASSETS CUFUND
November 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) SHORT-TERM MATURITY PORTFOLIO (000)
- --------------------------------------------------------------------------------
<C> <S> <C>
AGENCY MORTGAGE-BACKED OBLIGATIONS (49.2%)
FHLMC
$ 558 Class #1275 VK, 7.000%, 01/15/97 CMO ........................ $ 560
278 Class #1539 PC, 4.500%, 04/15/99 CMO ........................ 277
176 Class #1655 A, 4.750%, 08/15/99 CMO ......................... 176
91 Class #1631 A, 4.750%, 09/15/04 CMO ......................... 91
429 Class #1640 F, 6.280%, 10/15/07 (A) CMO ..................... 428
2,500 Class #1714 B, 5.250%, 05/15/09 CMO ......................... 2,484
1,000 Class #1611 C, 5.000%, 03/15/13 CMO ......................... 986
1,450 Class #1543 TC, 5.400%, 06/15/13 CMO ........................ 1,441
64 Class #1392 AA, 6.250%, 03/15/15 CMO ........................ 64
1,000 Class #1671 D, 5.750%, 11/15/16 CMO ......................... 996
1,000 Class #1650 D, 5.400%, 04/15/24 CMO ......................... 986
FNMA
342 Class #92-131 GA, 7.000%, 05/25/97 CMO ...................... 343
222 Class #93-186 A, 5.000%, 04/25/00 CMO ....................... 221
451 Class #93-11 C, 5.750%, 04/25/02 CMO ........................ 448
2,000 Class #92-155 E, 6.700%, 08/25/04 CMO ....................... 2,005
664 Class #93-99 PB, 4.500%, 06/25/08 CMO ....................... 659
600 Class #G93-9 C, 5.500%, 03/25/10 CMO ........................ 596
1,000 Class #93-207 B, 4.850%, 06/25/10 CMO ....................... 983
1,094 Class #93-20 C, 5.700%, 08/25/12 CMO ........................ 1,084
800 Class #92-132 PE, 7.250%, 07/25/15 CMO ...................... 803
560 Class #92-28 A, 6.250%, 12/25/16 CMO ........................ 557
26 Class #91-82 PH, 8.000%, 11/25/18 CMO ....................... 26
535 Class #90-106 H, 8.500%, 01/25/19 CMO ....................... 535
- --------------------------------------------------------------------------------
Total Agency Mortgage-Backed Obligations (Cost $16,852) ... 16,749
- --------------------------------------------------------------------------------
NON-AGENCY MORTGAGE-BACKED OBLIGATIONS (34.5%)
Countrywide Mortgage Backed Securities
652 Class #94-D A1, 6.344%, 03/25/24 (A) CMO .................... 648
First Boston Mortgage Securities
98 Class #93-5 A13, 7.300%, 10/25/97 CMO ....................... 99
General Electric Mortgage Services
1,500 Class #94-7 A4, 5.500%, 02/25/09 CMO ........................ 1,483
Housing Securities
256 Class #94-1 A4, 5.500%, 07/25/02 CMO ........................ 254
Prudential Home Mortgage Securities
1,240 Class #93-43 A1, 5.400%, 10/25/23 CMO ....................... 1,219
1,500 Class #93-57 A2, 5.500%, 12/25/23 CMO ....................... 1,481
3,000 Class #93-54 A21, 5.500%, 01/25/24 CMO ...................... 2,955
</TABLE>
<PAGE>
STATEMENT OF NET ASSETS CUFUND
November 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) SHORT-TERM MATURITY PORTFOLIO (concluded) (000)
- --------------------------------------------------------------------------------
<C> <S> <C>
Residential Funding Mortgage Securities I
$ 343 Class #92-S30 A5, 7.000%, 04/25/97 CMO .................... $ 342
1,183 Class #93-S40 A1, 6.244%, 11/25/23 (A) CMO ................ 1,168
1,348 Class #93-S45 A3, 6.750%, 12/25/23 CMO .................... 1,356
729 Class #94-S1 A1, 4.750%, 01/25/24 CMO ..................... 723
- --------------------------------------------------------------------------------
Total Non-Agency Mortgage-Backed Obligations
(Cost $11,840) ........................................ 11,728
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (6.8%)
Farmer Mac Discount Note
2,000 5.670%, 12/15/95 .......................................... 1,995
FNMA Discount Note
320 5.650%, 12/08/95 .......................................... 320
- --------------------------------------------------------------------------------
Total U.S. Government Agency Obligations (Cost $2,315)... 2,315
- --------------------------------------------------------------------------------
CASH EQUIVALENTS (9.5%)
1,609 SEI Liquid Asset Trust Government Portfolio ................. 1,609
1,625 SEI Liquid Asset Trust Treasury Portfolio ................... 1,625
- --------------------------------------------------------------------------------
Total Cash Equivalents (Cost $3,234) .................... 3,234
- --------------------------------------------------------------------------------
Total Investments (100.0%) (Cost $34,241) ............... 34,026
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (0.0%)
- --------------------------------------------------------------------------------
Total Other Assets and Liabilities, Net ................. 14
- --------------------------------------------------------------------------------
NET ASSETS:
Portfolio Shares (unlimited authorization--no par value)
based on 3,468,048 outstanding shares of beneficial interest. 34,976
Accumulated Net Realized Loss on Investments ................ (721)
Net Unrealized Depreciation of Investments .................. (215)
- --------------------------------------------------------------------------------
TOTAL NET ASSETS: (100.0%) .............................. $34,040
- --------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER
SHARE ................................................. $9.82
- --------------------------------------------------------------------------------
</TABLE>
(A) Adjustable Rate Features. Rate shown on the Statement of Net Assets is the
rate in effect on November 30, 1995.
CMO--Collateralized Mortgage Obligation
FHLMC--Federal Home Loan Mortgage Corporation
FNMA--Federal National Mortgage Association
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATEMENT OF OPERATIONS CUFUND
For the Period 06/01/95 to 11/30/95 (Unaudited)
<TABLE>
<CAPTION>
(IN THOUSANDS)
-----------------------------------
ADJUSTABLE RATE SHORT-TERM MATURITY
PORTFOLIO PORTFOLIO
- -------------------------------------------------------------------------------
<S> <C> <C>
Interest Income........................... $5,187 $ 992
- -------------------------------------------------------------------------------
Expenses:
Administrator Fee........................ 87 20
Investment Adviser Fee................... 258 56
Waiver of Investment Adviser Fee......... (112) (30)
Custodian Fees........................... 8 2
Professional Fees........................ 23 4
Registration Fees........................ 3 --
Insurance Fees........................... 2 1
Trustee Fees............................. 23 3
Printing................................. 8 1
Amortization of Deferred Organizational
Costs................................... 5 5
Other.................................... 7 2
- -------------------------------------------------------------------------------
Total Expenses.......................... 312 64
- -------------------------------------------------------------------------------
Net Investment Income.................... 4,875 928
- -------------------------------------------------------------------------------
Net Realized Gain (Loss) on Securities
Sold.................................... 41 (1)
- -------------------------------------------------------------------------------
Unrealized Appreciation of Investment
Securities.............................. 758 311
- -------------------------------------------------------------------------------
Net Gain on Investments................... 799 310
- -------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Operations............................... $5,674 $1,238
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS CUFUND
(Unaudited)
<TABLE>
<CAPTION>
(IN THOUSANDS)
-----------------------------------------------
ADJUSTABLE RATE SHORT-TERM MATURITY
PORTFOLIO PORTFOLIO
----------------------- -----------------------
06/01/95 06/01/94 06/01/95 06/01/94
TO 11/30/95 TO 05/31/95 TO 11/30/95 TO 05/31/95
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Activities:
Net Investment Income........ $ 4,875 $ 9,086 $ 928 $ 2,114
Net Realized Gain (Loss) on
Securities Sold............. 41 (638) (1) (599)
Unrealized Appreciation of
Investment Securities....... 758 78 311 999
- -------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations.... 5,674 8,526 1,238 2,514
- -------------------------------------------------------------------------------
Distributions to Shareholders:
Net Investment Income........ (4,876) (9,024) (926) (2,115)
- -------------------------------------------------------------------------------
Capital Share Transactions:
Proceeds from Sales.......... -- 5,700 600 8,200
Reinvestment of
Distributions............... 360 1,004 78 579
Payments for Redemptions..... (3,298) (27,545) (2,000) (15,865)
- -------------------------------------------------------------------------------
Decrease in Net Assets from
Capital Share Transactions... (2,938) (20,841) (1,322) (7,086)
- -------------------------------------------------------------------------------
Total Decrease in Net
Assets..................... (2,140) (21,339) (1,010) (6,687)
- -------------------------------------------------------------------------------
Net Assets:
Beginning of Period.......... 162,147 183,486 35,050 41,737
- -------------------------------------------------------------------------------
End of Period (1)............ $160,007 $162,147 $34,040 $35,050
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Capital Share Transactions:
Shares Issued............... -- 574 62 855
Shares Issued in Lieu of
Cash Distributions......... 36 101 8 61
Shares Redeemed............. (331) (2,782) (205) (1,663)
- -------------------------------------------------------------------------------
Net Capital Share
Transactions................. (295) (2,107) (135) (747)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
(1) Including distributions in excess of net investment income (000) of $(20)
and $(19) for Adjustable Rate Portfolio, $(0) and $(2) for Short-Term
Maturity Portfolio at November 30, 1995 and May 31, 1995, respectively.
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
<PAGE>
FINANCIAL HIGHLIGHTS CUFUND
(Unaudited)
FOR THE PERIODS ENDED
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
Ratio of
Net Net Net Net Ratio Expenses
Asset Gain Dividends Asset Assets Ratio of of Net to Average
Value Net (Loss) on from Net Capital Value End of Expenses Income Net Assets
Beginning Investment Investment Investment Gain End of Total Period to Average to Average (Excluding
of Period Income Securities Income Distributions Period Return (000) Net Assets Net Assets Waivers)
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Adjustable Rate Portfolio
For the six month period ended November 30,:
1995 $ 9.94 0.30 0.05 (0.30) -- $ 9.99 3.58+ $160,007 0.39%* 6.05%* 0.53%*
For the years ended May 31,:
1995 $ 9.96 0.53 (0.02) (0.53) -- $ 9.94 5.25% $162,147 0.38% 5.34% 0.51%
1994 $10.02 0.37 (0.06) (0.37) -- $ 9.96 3.19% $183,486 0.38% 3.70% 0.51%
1993(1) $10.00 0.38 0.02 (0.38) -- $10.02 4.22% $172,953 0.39% 3.94% 0.55%
Short-Term Maturity Portfolio
For the six month period ended November 30,:
1995 $ 9.73 0.26 0.09 (0.26) -- $ 9.82 3.63+ $ 34,040 0.37%* 5.31%* 0.54%*
For the years ended May 31,:
1995 $ 9.59 0.50 0.14 (0.50) -- $ 9.73 6.92% $ 35,050 0.38% 5.24% 0.51%
1994 $10.00 0.41 (0.38) (0.41) (0.03) $ 9.59 0.23% $ 41,737 0.38% 4.23% 0.55%
1993(1) $10.00 0.44 0.01 (0.45) -- $10.00 4.77% $ 20,288 0.39% 4.69% 0.64%
- --------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Ratio of
Net Income
to Average
Net Assets Portfolio
(Excluding Turnover
Waivers) Rate
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Adjustable Rate Portfolio
For the six month period ended November 30,:
1995 5.91%* 4%
For the years ended May 31,:
1995 5.21% 4%
1994 3.57% 67%
1993(1) 3.78% 71%
Short-Term Maturity Portfolio
For the six month period ended November 30,:
1995 5.14%* 15%
For the years ended May 31,:
1995 5.11% 53%
1994 4.06% 148%
1993(1) 4.44% 188%
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Adjustable Rate Portfolio and Short-Term Maturity Portfolio commenced
operations on June 15, 1992. Ratios and total returns for this period have
been annualized.
(*) Ratios for this period have been annualized.
(+) Returns are for the period indicated and have not been annualized. Amounts
designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS CUFUND
November 30, 1995 (Unaudited)
1. Organization:
CUFUND (the "Trust") was organized as a Massachusetts business trust under a
Declaration of Trust dated November 22, 1991 and had no operations through June
14, 1992 other than those related to organizational matters and the sale of
initial shares of beneficial interest to SEI Financial Management Corporation
(the "Administrator") on January 16, 1992.
The Trust is registered under the Investment Company Act of 1940, as amended,
as a diversified open-end investment company with two portfolios: the
Adjustable Rate Portfolio and the Short-Term Maturity Portfolio.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the
Trust in the preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles.
Securities Valuation--Investment securities of the Adjustable Rate
Portfolio and the Short-Term Maturity Portfolio which are listed on a
securities exchange for which market quotations are available are valued at
the last quoted sales prices for such securities on each business day, or,
if there is no such reported sales price on the valuation date, at the most
recently quoted bid price. Unlisted securities for which market quotations
are readily available are valued at the most recently quoted price. Debt
obligations with sixty days or less remaining until maturity may be valued
at their amortized cost. Under this valuation method, purchase discounts
and premiums are accreted and amortized ratably to maturity and are
included in interest income. Securities for which quotations are not
readily available are valued at fair value using methods determined in good
faith by the Board of Trustees.
Security Transactions and Related Income--Security transactions are
accounted for on the trade date of the security purchase or sale. Costs
used in determining net realized capital gains and losses on the sale of
securities are those of the specific securities sold, adjusted for the
accretion and amortization of purchase discounts and premiums during the
respective holding period. Gains and losses realized on sales of securities
are determined on a first-in first-out (FIFO) basis. Interest income and
expenses are recognized on the accrual basis. Purchase discounts and
premiums are accreted and amortized over the life of each security and
recorded as interest income.
Distributions to Shareholders--Distributions of net investment income for
each Portfolio are declared daily and paid monthly on the first business
day. Any net realized capital gains will be distributed at least annually.
Federal Income Taxes--The Trust's policy is to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies
and to distribute all of its taxable income to its Shareholders.
Accordingly, no provision for Federal Income Taxes is required in the
financial statements.
Organization Costs--The Trust incurred organization costs in connection
with their start-up. These costs have been deferred in the accounts of the
Portfolios and are being amortized on a straight line basis over a period
of sixty months commencing with operations. In the event any of the initial
shares of the Trust are redeemed by any holder thereof during the period
that the Trust is amortizing its organizational costs, the redemption
proceeds payable to the holder thereof by the Trust will be reduced by the
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued) CUFUND
November 30, 1995 (Unaudited)
unamortized organizational costs in the same ratio as the number of initial
shares being redeemed bears to the number of initial shares outstanding at
the time of redemption.
Other--Expenses that are directly related to one of the Portfolios are
charged directly to that Portfolio. Other operating expenses of the Trust
are prorated to the Portfolios on the basis of relative net assets.
3. Administrative and Distribution Agreements:
The Trust and SEI Financial Management Corporation are parties to an
administrative agreement dated May 1, 1992 under which the Administrator
provides services for a fee that is computed daily and payable monthly, at an
annual rate which is the greater of .09% of the average daily net assets of the
Trust up to $750 million, and .0725% of the average daily net assets of the
Trust exceeding $750 million or $214,000. Certain officers of the Trust are
also officers of the Administrator and/or Distributor. Such officers are paid
no fees by the Trust for serving in their respective roles.
SEI Financial Services Company (the "Distributor") acts as the Distributor of
the shares of the Trust. No compensation is paid to the Distributor for
distribution services.
4. Investment Advisory and Custodian Agreements:
The Trust and Southwest Corporate Federal Credit Union (the "Adviser") are
parties to an investment advisory agreement dated May 1, 1992, under which the
Adviser receives an annual fee, which is calculated daily and paid monthly, at
an annual rate of .32% of the average daily net assets of each Portfolio. The
Adviser has voluntarily agreed to waive its fee and reimburse the Trust for
other expenses to the extent necessary to limit the annual operating expenses
of each Portfolio to .39%.
The Trust and CoreStates Bank, N.A. (the "Custodian"), are parties to a
custodial agreement dated May 1, 1992 under which the Custodian holds cash,
securities and other assets of the Trust as required by the Investment Company
Act of 1940. The Custodian plays no role in determining the investment policies
of the Trust or which securities are to be purchased or sold in the Portfolios.
5. Investment Transactions:
For the period ended November 30, 1995, purchases and sales of investment
securities and United States Government Obligations (other than short-term
securities) were as follows (000):
<TABLE>
<CAPTION>
U.S. GOVERNMENT OTHER INVESTMENT
SECURITIES SECURITIES
---------------- -----------------
PURCHASES SALES PURCHASES SALES
--------- ------ --------- -------
<S> <C> <C> <C> <C>
Adjustable Rate Portfolio $ 0 $4,789 $5,097 $17,929
Short-Term Maturity Portfolio $1,656 $3,960 $1,412 $ 970
</TABLE>
The total cost of securities held for Federal Income Tax purposes at November
30, 1995 for the Adjustable Rate Portfolio and the Short-Term Maturity
Portfolio was not materially different from amounts reported for financial
reporting purposes. The Adjustable Rate Portfolio had net unrealized
appreciation of $128,709, which was composed of gross unrealized appreciation
of $545,605 and gross unrealized depreciation of $416,896 for tax purposes. The
Short-Term Maturity Portfolio had net unrealized depreciation of $214,839,
which was composed of gross unrealized appreciation of $15,193 and gross
unrealized depreciation of $230,032 for tax purposes.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (concluded) CUFUND
November 30, 1995 Unaudited
6. Variable Rate Financial Instruments
The Adjustable Rate Portfolio's investment policies include investing, under
normal circumstances, at least 65% of its assets in adjustable rate mortgage
securities or other adjustable rate securities that have interest rates that
reset at periodic intervals. Such securities may experience less price
volatility due to changes in market interest rates than other debt securities.
These investments include securities subject to interest rate caps as well as
certain securities that adjust based upon an index whose movements may not
correlate directly with market movements. Both of these items may influence the
pricing of the security. As with other securities, the market values are
adjusted on a daily basis.
<PAGE>
INVESTMENT ADVISER
Southwest Corporate Federal Credit Union
7920 Belt Line Road, Suite 1100
Dallas, TX 75240
ADMINISTRATOR
SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087-1658
DISTRIBUTOR
SEI Financial Services Company
680 East Swedesford Road
Wayne, PA 19087-1658
LEGAL COUNSEL
Morgan, Lewis & Bockius
2000 One Logan Square
Philadelphia, PA 19103
INDEPENDENT ACCOUNTANTS
Arthur Andersen LLP
1601 Market Street
Philadelphia, PA 19103-2499
CUF-F-007-02
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<PAGE>
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<NAME> CUFUNDS
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