[C]
SECURITIES AND EXCHANGE COMMISSION ------------------------
WASHINGTON, D.C. 20549 OMB Approval
FORM N-17f-2 ------------------------
OMB Number 3235-0360
Certificate of Accounting of Securities and Similar Expires: July 31, 1994
Investments in the Custody of Estimated average burden
Management Investment Companies hours per response. 0.05
Pursuant to Rule 17f-2 [17 CFR 270.17f-2]
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1. Investment Company Act File Number:
811-06696
Date examination completed: November 28, 1997
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2. State identification Number: N/A
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AL AK AZ AR CA CO
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CT DE DC FL GA HI
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ID IL IN IA KS KY
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LA ME MD MA MI MN
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MS MO MT NE NV NH
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NJ NM NY NC ND OH
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OK OR PA RI SC SD
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TN TX UT VT VA WA
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WV WI WY PUERTO RICO
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Other (specify):
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3. Exact name of investment company as specified in registration statement:
MarketWatch Funds
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4. Address of principal executive office (number, street, city, state, zip code)
3435 Stelzer Rd, Ste 1000, Columbus, OH, 43219
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EXHIBIT 23
To the Board of Directors of
the MarketWatch Funds
and the
Securities and Exchange Commission:
We have examined management's assertion about the MarketWatch Funds'
(the Funds) compliance with the requirements of subsection (b) and (c)
of Rule 17f-2 under the Investment Company Act of 1940 as of
November 28, 1997 and for the period August 29, 1997 through
November 28, 1997, included in the accompanying Management Statement
regarding Compliance with Certain Provisions of the Investment Company
Act of 1940. Management is responsible for the Funds' compliance with
those requirements. Our responsibility is to express an opinion on
management's assertion about the Funds' compliance based on our examination.
Our examination was made in accordance with standards established by the
American Institute of Certified Public Accountants and, accordingly,
included examining, on a test basis, evidence about the Funds' compliance
with those requirements and performing such other procedures as we
considered necessary in the circumstances. Included among our procedures
were the following tests performed as of November 28, 1997 and for the
period August 29, 1997 (the date of our last examination) through
November 28, 1997, with respect to securities transactions, without
prior notice to management:
* Confirmation of all securities held as of November 28, 1997 by
institutions in book entry form at the Federal Reserve Bank, The
Depository Trust Company and Dreyfus Government Securities Cash
Management Fund;
* Verification of all securities purchased/sold but not received/delivered
and securities in transit as of November 28, 1997 via examination of
underlying trade ticket or brokerage confirmation;
* Reconciliation of all such securities to the books and records of the
Funds and Central Fidelity Bank;
* Confirmation of all repurchase agreements with brokers/banks and agreement
of underlying collateral with Central Fidelity Bank records as of
November 28, 1997; and
* Agreement of selected security purchases/security sales or maturities
since our last report date from the books and records of the Company to
broker confirmations.
We believe that our examination provides a reasonable basis for our
opinion. Our examination does not provide a legal determination on the
Funds' compliance with specified requirements.
In our opinion, management's assertion that the Funds were in compliance
with the above mentioned provisions of Rule 17f-2 of the Investment Company
Act of 1940 as of November 28, 1997 and for the period from August 29, 1997
through November 28, 1997 is fairly stated, in all material respects.
This report is intended solely for the information and use of management
of the MarketWatch Funds and the Securities and Exchange Commission and
should not be used for any other purpose.
/S/ KPMG PEAT MARWICK LLP
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KPMG Peat Marwick LLP
Columbus, Ohio
January 9, 1998
January 9, 1998
Management Statement Regarding Compliance with
Certain Provisions of the Investment Company Act of 1940
We, as members of management of The MarketWatch Funds (the Funds), are
responsibile for complying with the requirements of subsections (b) and (c)
of Rule 17f-2, Custody of Investments by Registered Management Investment
Companies, of the Investment Company Act of 1940. We are also responsible
for establishing and maintaining effective intrnal controls over compliance
with Rule 17f-2 requirements. We have performed an evaluation of the Funds'
compliance with the requirments of subsections (b) and (c) of Rule 17f-2 as
of November 28, 1997.
Based on this evaluation, we assert that the Funds were in compliance with
the requirements of subsections (b) and (c) of Rule 17f-2 of the Investment
Company Act of 1940 as of November 28, 1997 and for the period from
August 29, 1997 through November 28, 1997, with respect to securities
reflected in the investment accounts of The MarketWatch Funds.
Sincerely,
/s/ WALTER B GRIMM
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Walter B. Grimm
Chairman and President
