CUFUND
================================================================================
- --------------------------------------------------------------------------------
Short-Term Maturity Portfolio
[bullet]
Adjustable Rate Portfolio
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
TO
SHAREHOLDERS
11/30/98
THIS INFORMATION MUST BE PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS.
SOUTHWEST CORPORATE FEDERAL CREDIT UNION
INVESTMENT ADVISER
- --------------------------------------------------------------------------------
<PAGE>
CUFUND
THE CREDIT UNION FAMILY OF FUNDS
To Our Shareholders:
CUFUND, the Credit Union Family of Funds, has been serving natural person credit
union investment needs since its inception in June 1992. During this period, the
Short-Term Maturity Portfolio and the Adjustable Rate Portfolio have given
credit unions an excellent investment option.
CUFUND remains unique among mutual funds as 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 changes of
natural person credit unions, as well as the continually changing regulatory
environment. As the regulatory environment becomes more complex, we believe that
the flexibility and investment expertise inherent to the portfolios of CUFUND
will allow credit unions to continue to take advantage of all types of
securities available to them in one easy package.
CUFUND has maintained a strong performance record since its inception. Over the
past six years it has been our pleasure, Southwest Corporate Federal Credit
Union, the adviser, SEI Investments Mutual Funds Services, the administrator and
SEI Investments Distribution Co., the distributor, to offer CUFUND. We thank all
credit unions for their support of and participation in CUFUND.
Sincerely
/S/SIGNATURE
MARK NAGLE
President
<PAGE>
STATEMENT OF NET ASSETS CUFUND
November 30, 1998 (Unaudited)
SHORT-TERM MATURITY PORTFOLIO
- --------------------------------------------------------------------------------
Par Value
Description (000) (000)
- --------------------------------------------------------------------------------
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS (70.6%)
FHLMC Pool #L73564 CMO
5.000%, 03/01/01 $ 496 $ 490
FHLMC Pool #L73582 CMO
5.000%, 04/01/01 19 19
FHLMC Pool #L73595 CMO
5.000%, 03/01/01 275 272
FHLMC Pool #L73633 CMO
5.000%, 04/01/01 230 227
FHLMC Series 1481,
Class E REMIC
6.200%, 11/15/16 559 558
FHLMC Series 1490,
Class PE REMIC
5.750%, 07/15/06 651 651
FHLMC Series 1496,
Class G REMIC
4.000%, 03/15/19 1,120 1,075
FHLMC Series 1590,
Class D REMIC
5.500%, 06/15/13 11 11
FHLMC Series 1611,
Class D REMIC
5.250%, 01/15/16 84 84
FHLMC Series 1640,
Class F REMIC
5.713%, 10/15/07 (A) 217 217
FHLMC Series 1671,
Class D REMIC
5.750%, 11/15/16 283 283
FHLMC Series 1678,
Class A REMIC
5.500%, 10/15/07 444 443
FHLMC Series 1679,
Class A REMIC
5.250%, 09/15/06 278 277
FHLMC Series 1734,
Class E REMIC
6.000%, 10/15/06 2,000 2,015
FHLMC Series 2055,
Class OA REMIC
6.000%, 03/15/02 1,000 1,008
FHLMC Series 2078,
Class CA REMIC
6.500%, 01/15/00 166 167
FNMA Series 1626,
Class PN REMIC
5.800%, 01/15/06 971 974
FNMA Series 1992-150,
Class FV REMIC
5.899%, 05/25/21 (A) 1,000 994
FNMA Series 1992-155,
Class E REMIC
6.700%, 08/25/04 652 652
- --------------------------------------------------------------------------------
Par Value
Description (000) (000)
- --------------------------------------------------------------------------------
FNMA Series 1992-175,
Class PE REMIC
6.500%, 10/25/04 $ 513 $ 513
FNMA Series 1993-138,
Class E REMIC
5.750%, 12/25/16 771 771
FNMA Series 1993-199,
Class E REMIC
5.850%, 05/25/19 878 878
FNMA Series 1993-204,
Class PD REMIC
5.600%, 05/25/18 862 861
FNMA Series 1993-212,
Class C REMIC
6.000%, 11/25/00 631 631
FNMA Series 1993-212,
Class E REMIC
5.300%, 11/25/00 1,634 1,629
FNMA Series1994-12,
Class PE REMIC
5.750%, 04/25/07 491 492
FNMA Series 1994-27,
Class PK REMIC
6.500%, 06/25/00 704 705
FNMA Series 1994-72,
Class E REMIC
6.000%, 11/25/17 550 552
FNMA Series 1994-86,
Class PD REMIC
6.000%, 06/25/04 273 273
FNMA Series 1994-88,
Class PD REMIC
7.150%, 04/25/16 1,035 1,035
FNMA Series 2031,
Class PA REMIC
5.750%, 02/15/07 769 769
GNMA Series 1994-1,
Class PC REMIC
7.250%, 12/16/16 515 519
--------
Total U.S. Agency Mortgage-
Backed Obligations
(Cost $20,024) 20,045
--------
NON-AGENCY MORTGAGE-BACKED OBLIGATIONS (19.8%)
Countrywide Mortgage
Securities Series 1994-D,
Class A1 REMIC
5.781%, 03/25/24 (A) 291 292
General Electric Mortgage
Services Series 1994-7,
Class A4 REMIC
5.500%, 02/25/09 200 199
<PAGE>
STATEMENT OF NET ASSETS CUFUND
November 30, 1998 (Unaudited)
SHORT-TERM MATURITY PORTFOLIO (concluded)
- --------------------------------------------------------------------------------
Par/Shares Value
Description (000) (000)
- --------------------------------------------------------------------------------
General Electric Mortgage
Services Series 1994-8,
Class A3 REMIC
6.000%, 02/25/24 $2,000 $ 1,993
General Electric Mortgage
Services Series 1994-13,
Class A1 REMIC
6.500%, 04/25/24 610 610
Prudential Home Mortgage
Securities Series 1993-43,
Class A1 REMIC
5.400%, 10/25/23 333 330
Prudential Home Mortgage
Securities Series 1993-54,
Class A21 REMIC
5.500%, 01/25/24 1,531 1,522
Residential Funding Mortgage
Securities Series 1993-S40,
Class A1 REMIC
5.713%, 11/25/23 (A) 466 465
Residential Funding Mortgage
Securities Series 1993-S45,
Class A3 REMIC
6.750%, 12/25/23 203 203
------
Total Non-Agency Mortgage-
Backed Obligations
(Cost $5,635) 5,614
------
U.S. GOVERNMENT AGENCY OBLIGATIONS (8.0%)
FFCB*
5.065%, 12/01/98 213 213
FHLMC*
4.792%, 12/10/98 500 499
4.870%, 12/10/98 390 389
FNMA
6.250%, 06/16/00 1,000 1,020
SLMA*
4.931%, 12/02/98 144 144
------
Total U.S. Government
Agency Obligations
(Cost $2,247) 2,265
------
CASH EQUIVALENT (1.5%)
SEI Daily Income Trust
Treasury Fund 443 443
------
Total Cash Equivalent
(Cost $443) 443
------
- --------------------------------------------------------------------------------
Value
Description (000)
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS (99.9%)
(Cost $28,349) $ 28,367
--------
OTHER ASSETS AND LIABILITIES,
NET (0.1%) 32
--------
NET ASSETS:
Portfolio Shares (unlimited
authorization -- no par value)
based on 2,864,475 outstanding
shares of beneficial interest 29,041
Undistributed net investment income 2
Accumulated net realized loss
on investments (662)
Net unrealized appreciation
of investments 18
--------
TOTAL NET ASSETS (100.0%) $ 28,399
========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE $ 9.91
========
*The rate shown is the effective yield at date of purchase.
CMO -- Collateralized Mortgage Obligation
FFCB -- Federal Farm Credit Bank
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
GNMA -- Government National Mortgage Association
SLMA -- Student Loan Marketing Association
REMIC -- Real Estate Mortgage Investment Conduit
(A) Adjustable Rate Features. Rate shown on the Statement of Net Assets is the
rate in effect on November 30, 1998.
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENT OF NET ASSETS CUFUND
November 30, 1998 (Unaudited)
ADJUSTABLE RATE PORTFOLIO
- --------------------------------------------------------------------------------
Par Value
Description (000) (000)
- --------------------------------------------------------------------------------
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS (71.4%)
FHLMC Pool # 970003 CMO
7.266%, 01/01/23 (A) $2,107 $ 2,123
FHLMC Pool # 970021 CMO
7.382%, 01/01/23 (A) 3,970 4,028
FHLMC Series 1393,
Class C REMIC
6.000%, 01/15/04 1,498 1,499
FHLMC Series 1476,
Class F REMIC
5.649%, 02/15/08 (A) 3,196 3,173
FHLMC Series 1491,
Class E REMIC
5.000%, 02/15/17 363 362
FHLMC Series 1500,
Class E REMIC
6.000%, 08/15/16 650 651
FHLMC Series 1506,
Class PE REMIC
5.650%, 07/15/05 365 365
FHLMC Series 1512,
Class M REMIC
5.349%, 05/15/08 (A) 885 871
FHLMC Series 1541,
Class KM REMIC
5.799%, 08/15/22 (A) 191 191
FHLMC Series 1546,
Class FC REMIC
5.938%, 12/15/21 (A) 5,019 5,035
FHLMC Series 1598,
Class E REMIC
5.600%, 11/15/05 (A) 816 816
FHLMC Series 1611,
Class G REMIC
5.813%, 05/15/21 (A) 3,848 3,860
FHLMC Series 1671,
Class J REMIC
5.713%, 12/15/22 (A) 5,104 5,111
FHLMC Series 1695,
Class AK REMIC
5.713%, 01/15/24 (A) 368 370
FHLMC Series 1933,
Class PA REMIC
5.000%, 01/15/13 919 917
FHLMC Series 2055,
Class OA REMIC
6.000%, 03/15/02 2,000 2,015
FNMA Pool # 165655 CMO
7.430%, 05/01/22 (A) 474 479
FNMA Pool # 166291 CMO
7.290%, 06/01/22 (A) 1,689 1,712
FNMA Pool # 169164 CMO
7.764%, 06/01/22 (A) 369 378
FNMA Pool # 354900 CMO
7.635%, 08/01/26 (A) 743 760
- --------------------------------------------------------------------------------
Par Value
Description (000) (000)
- --------------------------------------------------------------------------------
FNMA Pool # 359751 CMO
7.837%, 09/01/26 (A) $1,095 $ 1,143
FNMA Pool # 364612 CMO
7.687%, 11/01/26 (A) 772 797
FNMA Series 1992-28,
Class F REMIC
6.188%, 05/25/07 (A) 588 590
FNMA Series 1992-150,
Class FV REMIC
5.899%, 05/25/21 (A) 2,000 1,989
FNMA Series 1992-175,
Class PE REMIC
6.500%, 10/25/04 908 907
FNMA Series 1993-14,
Class G REMIC
6.000%, 06/25/19 1,000 998
FNMA Series 1993-58,
Class E REMIC
5.500%, 07/25/18 356 354
FNMA Series 1993-72,
Class F REMIC
5.799%, 05/25/08 (A) 1,000 988
FNMA Series 1993-95,
Class PD REMIC
6.000%, 12/25/06 1,147 1,149
FNMA Series 1993-115,
Class E REMIC
5.500%, 04/25/19 839 837
FNMA Series 1993-116,
Class FA REMIC
5.399%, 07/25/22 (A) 4,665 4,624
FNMA Series 1993-127,
Class EA REMIC
5.650%, 10/25/16 927 923
FNMA Series 1993-138,
Class E REMIC
5.750%, 12/25/16 1,620 1,619
FNMA Series 1993-168,
Class PE REMIC
6.000%, 08/25/17 2,156 2,158
FNMA Series 1993-209,
Class E REMIC
5.750%, 07/25/05 448 448
FNMA Series 1993-209,
Class FG REMIC
5.782%, 08/25/08 (A) 2,680 2,651
FNMA Series 1993-210,
Class FB REMIC
6.090%, 10/25/22 2,654 2,661
FNMA Series 1993-212,
Class E REMIC
5.300%, 11/25/00 3,268 3,258
FNMA Series 1993-221,
Class F REMIC
5.732%, 03/25/08 (A) 2,718 2,687
<PAGE>
STATEMENT OF NET ASSETS CUFUND
November 30, 1998 (Unaudited)
ADJUSTABLE RATE PORTFOLIO (continued)
- --------------------------------------------------------------------------------
Par Value
Description (000) (000)
- --------------------------------------------------------------------------------
FNMA Series 1994-42,
Class FN REMIC
5.399%, 03/25/23 (A) $3,424 $ 3,364
FNMA Series 1994-86,
Class PD REMIC
6.000%, 06/25/04 547 546
FNMA Series 1994-87,
Class F REMIC
5.544%, 03/25/09 (A) 1,248 1,258
FNMA Series 1994-88,
Class PD REMIC
7.150%, 04/25/16 2,417 2,414
FNMA Series 1997-20,
Class F REMIC
5.902%, 03/25/27 (A) 9,213 9,099
GNMA Series 31,
Class FC REMIC
5.463%, 08/25/23 (A) 1,907 1,913
------
Total U.S. Agency Mortgage-
Backed Obligations
(Cost $84,030) 84,091
------
NON-AGENCY MORTGAGE-BACKED OBLIGATIONS (22.6%)
DLJ Mortgage Acceptance
Series 1994-Q1,
Class 1A1 REMIC
7.986%, 03/25/24 (A) 1,238 1,239
Fund America Investors II
Series 1993-J,
Class M REMIC
8.035%, 11/25/23 (A) 758 758
General Electric Mortgage
Services Series 1994-8,
Class A3 REMIC
6.000%, 02/25/24 2,865 2,855
Merrill Lynch Mortgage
Investments Series 1991-F,
Class A2 REMIC
6.590%, 06/15/16 (A) 4,541 4,602
Merrill Lynch Mortgage
Investments Series 1992-C,
Class A2 REMIC
6.538%, 06/15/17 (A) 3,147 3,149
Prudential Home Mortgage
Securities Series 1993-5,
Class A7 REMIC
5.763%, 03/25/00 (A) 5,321 5,340
Resolution Trust Series 1992-3,
Class A4 REMIC
5.613%, 09/25/30 (A) 717 717
Resolution Trust Series 1992-16,
Class A4 REMIC
7.408%, 08/25/22 (A) 1,791 1,785
- --------------------------------------------------------------------------------
Par/Shares Value
Description (000) (000)
- --------------------------------------------------------------------------------
Resolution Trust Series 1992-M4,
Class A4 REMIC
5.925%, 09/25/21 (A) $1,140 $ 1,141
Salomon Brothers Mortgage
Securities VII Series 1992-2,
Class A4 REMIC
7.405%, 06/25/22 (A) 1,550 1,565
Salomon Brothers Mortgage
Securities VII Series 1992-4,
Class A5 REMIC
7.500%, 09/25/22 (A) 826 816
Salomon Brothers Mortgage
Securities VII Series 1992-6,
Class A1 REMIC
7.520%, 11/25/22 (A) 1,580 1,585
Securitized Assets Sales
Series 1993-8,
Class A2 REMIC
7.661%, 12/26/23 (A) 1,022 1,051
----------
Total Non-Agency Mortgage-
Backed Obligations
(Cost $26,506) 26,603
----------
U.S. GOVERNMENT AGENCY OBLIGATIONS (3.2%)
FFCB*
5.020%, 12/01/98 205 205
FHLB*
5.062%, 12/04/98 870 870
FHLMC*
4.951%, 12/02/94 1,648 1,648
FNMA*
4.850%, 12/18/98 240 239
4.850%, 12/22/99 750 747
----------
Total U.S. Government
Agency Obligations
(Cost $3,709) 3,709
----------
CASH EQUIVALENT (2.7%)
SEI Daily Income Trust
Treasury Fund 3,229 3,229
----------
Total Cash Equivalent
(Cost $3,229) 3,229
----------
TOTAL INVESTMENTS (99.9%)
(Cost $117,474) 117,632
----------
OTHER ASSETS AND LIABILITIES,
NET (0.1%) 62
----------
<PAGE>
STATEMENT OF NET ASSETS CUFUND
November 30, 1998 (Unaudited)
ADJUSTABLE RATE PORTFOLIO (concluded)
- --------------------------------------------------------------------------------
Value
Description (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Portfolio Shares (unlimited
authorization -- no par value)
based on 11,794,403 outstanding
shares of beneficial interest $118,213
Distributions in excess of net
investment income (3)
Accumulated net realized loss
on investments (674)
Net unrealized appreciation
on investments 158
--------
TOTAL NET ASSETS (100.0%) $117,694
========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE $ 9.98
========
*The rate shown is the effective yield at date of purchase.
CMO -- Collateralized Mortgage Obligation
DLJ -- Donaldson, Lufkin, & Jenrette
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
GNMA -- Government National Mortgage Association
REMIC -- Real Estate Mortgage Investment Conduit
(A) Adjustable Rate Features. Rate shown on the Statement of Net
Assets is the rate in effect on November 30, 1998.
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENT OF OPERATIONS CUFUND
For the period ended November 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
(IN THOUSANDS)
----------------------------------------------
SHORT-TERM MATURITY ADJUSTABLE RATE
PORTFOLIO PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Income $838 $3,671
- ---------------------------------------------------------------------------------------------------------------------------
Expenses:
Investment Advisory Fees 47 196
Waiver of Investment Advisory Fees (30) (120)
Administrator Fees 22 87
Custodian Fees 1 6
Professional Fees 8 31
Registration Fees -- 2
Trustee Fees 4 18
Printing Fees 3 12
Transfer Agent Fees -- 2
Other 2 5
- ---------------------------------------------------------------------------------------------------------------------------
Total Expenses 57 239
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income 781 3,432
- ---------------------------------------------------------------------------------------------------------------------------
Net Realized Gain on Investments 158 --
- ---------------------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation/(Depreciation) of Investments 3 (292)
- ---------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain/(Loss) on Investments 161 (292)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations 942 3,140
===========================================================================================================================
<FN>
Amounts designated as "--" are either $0 or have been rounded to $0.
</FN>
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS CUFUND
(Unaudited)
<TABLE>
<CAPTION>
(IN THOUSANDS)
----------------------------------------------------------------
SHORT-TERM MATURITY ADJUSTABLE RATE
PORTFOLIO PORTFOLIO
----------------------------- -----------------------------
06/01/98 06/01/97 06/01/98 06/01/97
TO 11/30/98 TO 05/31/98 TO 11/30/98 TO 05/31/98
- ------------------------------------------------------------------------------------------------------------------------------------
Investment Activities:
<S> <C> <C> <C> <C>
Net Investment Income $ 781 $ 1,590 $ 3,432 $ 7,282
Net Realized Gain/(Loss) on Investments 158 -- -- (16)
Net Unrealized Appreciation/(Depreciation) of Investments 3 179 (292) (64)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations 942 1,769 3,140 7,202
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders:
Net Investment Income (771) (1,596) (3,386) (7,295)
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions:
Proceeds from Shares Issued -- -- -- 900
Shares Issued in Lieu of Cash Distributions 46 114 290 565
Cost of Shares Redeemed (1,363) (410) (7,748) (24,934)
- ------------------------------------------------------------------------------------------------------------------------------------
Decrease in Net Assets from Capital Share Transactions (1,317) (296) (7,458) (23,469)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Decrease in Net Assets (1,146) (123) (7,704) (23,562)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets:
Beginning of Period 29,545 29,668 125,398 148,960
- ------------------------------------------------------------------------------------------------------------------------------------
End of Period (1) $28,399 $29,545 $117,694 $125,398
====================================================================================================================================
Capital Share Transactions:
Shares Issued -- -- -- 90
Shares Issued in Lieu of Cash Distributions 4 12 29 56
Shares Redeemed (137) (42) (774) (2,488)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Capital Share Transactions (133) (30) (745) (2,342)
====================================================================================================================================
<FN>
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) Including undistributed net investment income (distributions in excess of
net investment income) (000) of $2 and $(7) for Short-Term Maturity
Portfolio, $(3) and $(50) for Adjustable Rate Portfolio at November 30, 1998
and May 31, 1998, respectively.
</FN>
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
FINANCIAL HIGHLIGHTS CUFUND
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
NET
NET REALIZED AND NET NET RATIO OF NET
ASSET UNREALIZED DIVIDENDS ASSET ASSETS RATIO OF INVESTMENT
VALUE NET GAINS FROM NET CAPITAL VALUE END OF EXPENSES INCOME
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT GAINS END OF TOTAL PERIOD TO AVERAGE TO AVERAGE
OF PERIOD INCOME INVESTMENTS INCOME DISTRIBUTIONS PERIOD RETURN (000) NET ASSETS NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
Short-Term Maturity Portfolio
For the six month period ended November 30:(Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998* $ 9.86 0.26 0.05 (0.26) -- $ 9.91 3.18% $28,399 0.39% 5.32%
For the years ended May 31:
1998 9.80 0.53 0.06 (0.53) -- 9.86 6.17 29,545 0.39 5.37
1997 9.76 0.52 0.04 (0.52) -- 9.80 5.90 29,668 0.39 5.33
1996 9.73 0.52 0.03 (0.52) -- 9.76 5.73 30,633 0.38 5.27
1995 9.59 0.50 0.14 (0.50) -- 9.73 6.92 35,050 0.38 5.24
1994 10.00 0.41 (0.38) (0.41) (0.03) 9.59 0.23 41,737 0.38 4.23
Adjustable Rate Portfolio
For the six month period ended November 30:(Unaudited)
1998* $10.00 0.28 (0.02) (0.28) -- $ 9.98 2.60% $117,694 0.39% 5.60%
For the years ended May 31:
1998 10.01 0.56 (0.01) (0.56) -- 10.00 5.63 125,398 0.39 5.58
1997 9.96 0.57 0.05 (0.57) -- 10.01 6.36 148,960 0.39 5.66
1996 9.94 0.59 0.02 (0.59) -- 9.96 6.29 153,760 0.39 5.92
1995 9.96 0.53 (0.02) (0.53) -- 9.94 5.25 162,147 0.38 5.34
1994 10.02 0.37 (0.06) (0.37) -- 9.96 3.19 183,486 0.38 3.70
- ------------------------------------------------------------------------------------------------------------------------------------
RATIO OF NET
RATIO OF INVESTMENT
EXPENSES INCOME
TO AVERAGE TO AVERAGE
NET ASSETS NET ASSETS PORTFOLIO
(EXCLUDING (EXCLUDING TURNOVER
WAIVERS) WAIVERS) RATE
- ------------------------------------------------------------------------------------------------------------------------------------
Short-Term Maturity Portfolio
For the six month period ended November 30:(Unaudited)
1998* 0.59% 5.12% 76%
For the years ended May 31:
1998 0.59 5.17 76
1997 0.58 5.14 63
1996 0.61 5.04 42
1995 0.51 5.11 53
1994 0.55 4.06 148
Adjustable Rate Portfolio
For the six month period ended November 30:(Unaudited)
1998* 0.59% 5.40% 17%
For the years ended May 31:
1998 0.59 5.38 31
1997 0.56 5.49 17
1996 0.53 5.78 23
1995 0.51 5.21 4
1994 0.51 3.57 67
<FN>
Amounts designated as "--" are either $0 or have been rounded to $0.
* Ratios for the period have been annualized.
Returns are for the period indicated and have not been annualized.
</FN>
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS CUFUND
November 30, 1998 (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 Investments Mutual Funds Services
(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
Short-Term Maturity Portfolio and the Adjustable Rate Portfolio (the
"Portfolios"). The Trust's prospectus provides a description of each
Portfolio's investment objectives, policies and strategies.
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--Pursuant to policies established by the Board of
Trustees of the Trust, the Administrator values the securities of each
Portfolio based upon valuations provided by brokers or an independent
pricing service. The pricing services rely primarily on prices of actual
market transactions as well as trader quotations. However, the service
may also use a matrix system to determine valuations of fixed income
securities, which considers such factors as security prices, yields,
maturities, call features, ratings and developments relating to specific
securities in arriving at valuation. Debt obligations with sixty days or
less remaining until maturity may be valued at their amortized cost.
Investment securities for which market prices are either (i) not readily
available or not obtained, or (ii)deemed by the advisor to be materially
inaccurate, are valued at fair value as determined in good faith under
procedures established 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 using a method which approximates the
effective interest method.
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 and net capital gains to its
shareholders. Accordingly, no provision for Federal income taxes is
required in the financial statements.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS--The
preparation of financial statements, in conformity with generally accepted
accounting principles,requires management to make estimates and assumptions
that affect the reported amount of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenue and expenses during the reporting
period.Actual results could differ from those estimates.
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.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (concluded) CUFUND
November 30, 1998 (Unaudited)
3. Administrative and Distribution Agreements:
The Trust and the Administrator 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. Effective October 26, 1998 the
minimum annual fee of $214,000 was increased to $250,000. 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 Investments Distribution Co. (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 all or a portion of its fees and
reimburse expenses in order to limit the total operating expenses of each
Portfolio to not more than .39% of each Portfolio's average daily net assets.
The Adviser reserves the right, in its sole discretion, to terminate this
voluntary fee waiver at any time. At November 30, 1998, the Adviser is the
record owner of 84.19% and 90.04% of the outstanding shares of the Short-Term
Maturity and Adjustable Rate Portfolios, respectively.
The Trust and First Union National Bank, (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 six month period ended November 30, 1998, purchases and sales of
investment securities and United States Government Obligations (other than
short-term securities) were as follows (000):
U.S. GOVERNMENT OTHER INVESTMENT
SECURITIES SECURITIES
--------------- ----------------
PURCHASES SALES PURCHASES SALES
--------- ----- --------- -----
Short-Term
Maturity
Portfolio $ 9,056 $10,151 $1,420 $3,293
Adjustable
Rate
Portfolio $11,405 $20,019 $ -- $8,195
The total cost of securities held for federal income tax purposes at November
30, 1998 for the Short-Term Maturity Portfolio and the Adjustable Rate Portfolio
was not materially different from amounts reported for financial reporting
purposes. The Short-Term Maturity Portfolio had net unrealized appreciation of
$17,883, which was composed of gross unrealized appreciation of $57,723 and
gross unrealized depreciation of ($39,840) for tax purposes. The Adjustable Rate
Portfolio had net unrealized appreciation of $158,170, which was composed of
gross unrealized appreciation of $346,693 and gross unrealized depreciation of
($188,523) for tax purposes.
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.
<PAGE>
NOTES
<PAGE>
INVESTMENT ADVISER
Southwest Corporate Federal Credit Union
7920 Belt Line Road, Suite 1100
Dallas, TX 75240
ADMINISTRATOR
SEI Investments Mutual Funds Services
One Freedom Valley Drive
Oaks, PA 19456
DISTRIBUTOR
SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, PA 19456
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, PA 19103-6993
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP
1601 Market Street
Philadelphia, PA 19103-2499
CUF-F-009-03
