[ ] MARSHALL FUNDS
Dear Shareholder:
Here is the Marshall Funds Semi-Annual Report for the period ended February 28,
1995. This report gives you financial details regarding the Funds, including
investment reviews written by each Fund manager.
We hope this information is useful in reviewing your Marshall Funds
investments. You may also find it interesting to read the commentaries and
review the portfolios of Marshall Funds you do not currently own. Our Funds
offer conservative investment management and competitive performance. Given the
breadth of our Fund offerings, it's likely there is more than one Marshall Fund
that could help meet your investment goals.
We are especially pleased with the performance rankings many of our Funds are
earning. Five of our funds have achieved "A" or "B" one-year performance
rankings in The Wall Street Journal*. Our Money Market Fund continues to be a
top performer. Other Marshall Funds have also demonstrated improved
performance. For example, during the six-month period ended March 31, 1995, the
Marshall Mid-Cap Stock Fund realized a total rate of return of 7.55%. This is
compared with a 5.40% return for the Fund's benchmark, the Standard & Poor's
Mid-Cap 400 Index.**
Please call an investment representative of Marshall Funds Investor Services at
800-236-8554 for more information about any of the Marshall Funds.
Thank you for your confidence in the Marshall Funds.
Very truly yours,
James F. Duca, II President
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the FDIC, the Federal Reserve Board,
or any other government agency. Investment in mutual funds involves risk,
including possible loss of principal.
- ------
*For the one-year period ended March 31, 1995, the Value Equity Fund was
awarded an "A" rating indicating total return performance in the top 20% of its
category, Growth and Income Funds, which consists of 318 funds. For the same
period, the following Marshall Funds were awarded a "B" rating, indicating a
total return performance in the top 40% of their respective categories:
Marshall Equity Income Fund (Equity Income Funds category, which consists of
102 funds), Marshall Government Income Fund (Mortgage Funds category, which
consists of 258 funds), Marshall Short-Term Income Fund (Short-Term Taxable
Bond Funds category, which consists of 355 funds), and Marshall Short-Term Tax-
Free Fund (Short-Term Municipal Bond Funds category, which consists of 46
funds). During the period covered by these rankings, the Funds' investment
adviser waived all or part of its fee and/or reimbursed the Funds for some of
their expenses. By taking this action, the Funds' income increases, resulting
in a higher return to investors. Otherwise, total return would have been lower.
Past performance is no guarantee of future results.
**Total return for the Mid-Cap Stock Fund for the one-year period ended March
31, 1995 was 7.44%, and the annualized total return since the Fund's inception
on October 1, 1993 to March 31, 1995 was 1.90%.
INVESTMENT REVIEW
STOCK FUND
The Marshall Stock Fund (the "Fund") invests in large capitalization stocks
with a growth and income orientation. The Fund holdings are well diversified,
with representation in most sectors of the economy. Companies held generally
have long records of successful operations. Yield is of secondary concern, as
emphasis is placed on total return, largely through capital appreciation.
During the first half of the Fund's fiscal year, investors weighed the effects
of steadily higher interest rates on the economy. The Federal Reserve Board's
(the "Fed") attempts to dampen future inflationary pressures thus far has not
perceptibly slowed business activity. Some signs are emerging, however, that
point to slower economic growth in the second half of 1995. This glimmer of a
slowdown, coupled with the belief that the Fed is near the end of its discount
rate hikes, has allowed both the bond and equity markets to rally. Further
impetus to the rally has perhaps come from crises in foreign markets, notably
Mexico.
The Fund posted a total return of 2.75% during the first half of the fiscal
year (9/1/94 to 2/28/95).* During this period, the Standard & Poor's Daily
Stock Price Index of 500 Common Stocks (the "S&P 500")** had a total return of
3.97%. While the Fund is broadly diversified, the portfolio continues to
emphasize industrial sectors of the economy as opposed to consumer-oriented
sectors. The Fund's investment in technology stocks, in particular, continues
to be overweighted, reflecting that industry's growth characteristics. Given
the potential for an economic slowdown in the months ahead, several more
traditional growth stocks have recently been added to the Fund's portfolio,
such as Merck, General Mills, Tambrands and Philip Morris.***
Looking forward, the continuing direction of the economy will be watched
closely by the financial markets. If the Fed succeeds in slowing economic
activity we believe that earnings growth will increasingly be rewarded by the
market. Accordingly, the Fund's focus will continue to be on identifying those
companies exhibiting the potential for accelerating earnings growth within the
context of our quality and investment parameters.
[Graphic representation "A1" omitted. See Appendix.]
*Performance quoted represents past performance. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than their original cost.
** The S&P 500 is an unmanaged index. Actual investments may not be made in an
index.
*** As of February 28, 1995 the percentage of total fund net assets represented
by these stocks was: Merck & Co., Inc., 1.36%; General Mills, Inc., 0.78%;
Tambrands, Inc., 1.11%; and Phillip Morris, 1.55%.
VALUE EQUITY FUND
The Marshall Value Equity Fund (the "Fund"), introduced on September 30, 1993,
invests in value-oriented stocks, as measured principally by a low price-to-
book value ratio. In addition, stocks in the Fund have a historically low
price-to-earnings ratio and tend to be out of favor with investors.
Total return for the Fund over the six-month period ended February 28, 1995 was
(1.02%)* versus 3.97% for the S&P 500 and 2.16% for the S&P/BARRA Value In-
dex.** The Fund's performance for the preceding six-month period was substan-
tially above these indices, so some pullback was to be expected. Essentially,
two shifts in the market accounted for most of the underperformance. The market
moved away from value stocks to growth stocks and there was a broad shift out
of economically sensitive stocks as a whole. Both reasons explain the
underperformance to the S&P 500, and the second reason explains the
underperformance to the S&P/BARRA Value Index.
During the period, investors began to show considerable concern that a
recession was in the near future and, as mentioned, aggressively shifted
strategy accordingly. Our belief, on the other hand, was that economic growth,
although slowing, would continue for several more quarters; thus, such a
concern would be premature. Further, we believed
[ ] MARSHALL FUNDS
basic commodity companies, such as paper, steel, and chemical manufacturers,
would continue to experience positive pricing opportunities, and thus, possible
better earnings. During the period, paper and forest product stocks rebounded
strongly due to good earnings reports, leading the Fund to take profits in
several positions.
Currently, concerns about the health of the economy remain, and investors
continue to shift away from value stocks. However, we believe signs of economic
growth remain. Corporate earnings look strong in our view, mainly due to cost
cutting and the cyclical recovery in many basic industry companies. We believe
these companies should continue to benefit from cost efficiencies and
productivity gains for several more quarters. In addition, we believe U.S.
exports should remain strong, as our overseas trading partners see further
economic growth. We believe these factors bode well for a positive economic and
investment environment.
[Graphic representation "A2" omitted. See Appendix.]
* Performance quoted represents past performance. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than their original cost.
** The S&P/BARRA Value Index is an unmanaged index. Actual investments may not
be made in an index.
EQUITY INCOME FUND
Both the bond and stock markets have recently performed relatively well. The
bond market rallied on the suspicion the Federal Reserve Board (the "Fed") has
eased to accommodate the Mexican peso crisis and the Orange County bankruptcy.
The stock market rallied to new highs, aided by a flight to quality in the wake
of the Mexican peso crisis and the Barings Bank insolvency. Thanks to the stock
market's recent strength, the Marshall Equity Income Fund (the "Fund") ended
the first half of its fiscal year (9/1/94-2/28/95) with a total return of
3.18%* vs. 3.97% for the S&P 500.**
In pursuing above-average performance, the Fund invests in a diversified
portfolio of common and preferred stocks selected for their attractive total
return potential. It is a primary goal of the Fund to construct a portfolio of
stocks that have an average dividend yield greater than the dividend yield of
the S&P 500 by at least 1%. On February 28, 1995, the average yield of the
stocks held in the Fund was 4.29% and the average 30-day yield of the Fund was
3.44%.* The S&P 500 had a yield of 2.71%.
Within this high yield framework, we make strategic value judgments between
industries and individual stocks. To pursue the Fund's yield objective, the
portfolio may have major investments in those stock groups having traditionally
provided higher yield (utilities, financials, and energy).
Currently, the U.S. economy is operating at a high level of capacity
utilization. We believe the operating leverage of many industrial cyclicals is
favorable and we anticipate positive earnings surprises for several more
quarters. Therefore, in January and February, we increased the Fund's
investment in chemical stocks from 3% to 7%. We also increased the Fund's
investment in energy stocks from 13% to 17%. Many oil companies also have major
chemical operations.
We reduced the Fund's exposure to electric utilities, banks, and drug stocks.
Each of these groups has performed well recently, and we chose to reduce our
weightings. Drug stocks have been particularly strong, with the S&P Health Care
Index** showing a total return of 21.1% and 37.7% for the past six and twelve
months, respectively. Six months ago, the Fund invested over 13% of its net
assets in the health care sector. Today, the valua- tions in this group are no
longer as compelling. Therefore, we have reduced this sector to a market
weighting of about 8%.
Going forward, the current business news suggests the economy is cooling. This
has raised hopes that the Fed is done raising interest rates. However, we
believe that this clouds the outlook for corporate earnings. We feel that
utilities and other interest-sensitive issues have been weak since early
February, and this decline could broaden to other interest rate sensitive
groups, especially if the dollar remains weak.
(continued)
INVESTMENT REVIEW
[Graphic representation "A3" omitted. See Appendix.]
* Performance quoted represents past performance. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than their original cost. Current net yield is
calculated by dividing the net investment income per share for the prior
thirty days by the maximum offering price per share during that period. The
figure is then compounded and annualized. Total return represents the change
in value of an investment after reinvesting all income and capital gains.
** The S&P 500 and S&P Health Care indices are unmanaged indices. Actual
investments may not be made in an index.
MID-CAP STOCK FUND
The objective of the Marshall Mid-Cap Stock Fund (the "Fund") is to seek
capital appreciation through investment in companies with market
capitalizations between $200 million and approximately $7.5 billion. In
addition, the Fund seeks investments in companies exhibiting strong financial
characteristics and expected growth significantly above the average
corporation. This selection process may yield above- average results over time,
although there will be times when events may cause periods of underperformance.
For the six months ended February 28, 1995, the Fund produced a total return of
3.61%* vs. 1.67% for the Standard & Poor's Midcap 400 Stock Price Index (the
"S&P 400").** The total return for the last three months was 7.72% for the Fund
vs. 7.32% for the S&P 400. Positive influences on performance were attributed
to the Fund's overweighting in technology, telecommunications, and commercial
services stocks. In technology, significant gains were achieved in companies
such as Micron Technology, Integrated Devices Technology, and Atmel.
Telecommunications returns were driven by Tellabs and ADC Telecommunications.
Commercial services were above average due to Medaphis and Informix.
Near term, we anticipate a reduction in the Fund's technology weighting, with
proceeds moving into services and more interest-sensitive growth issues such as
credit card processors or specialty finance companies. These actions are
predicated on our expectations of a further slide in interest rates, as factors
such as Mexico, Federal Reserve Board tightening, and cautious consumer
spending cause slower economic activity.
[Graphic representation "A4" omitted. See Appendix.]
* Performance quoted represents past performance. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than their original cost.
** The S&P 400 is an unmanaged index. Actual investments may not be made in an
index.
SHORT-TERM INCOME FUND
For the six-month period ended February 28, 1995, the Marshall Short-Term
Income Fund (the "Fund") provided a total return of 2.32%*. As interest rates
rose dramatically through 1994, the best offense for an income fund was good
defense. We believe that the best defense was to shorten the Fund's average
maturity/duration. Shorter bonds suffer less price depreciation than longer
bonds during periods of rising interest rates. While the Fund's defensive
posture throughout 1994 allowed it to perform in a difficult environment,
market sentiment turned from negative to positive in 1995 and the Fund's
duration was extended to participate in the strong bond market this year.
Duration moved from .83 years on December 31, 1994 to 1.13 years on February
28, 1995.
In our opinion, market momentum is positive, as signs the economy has slowed
from its torrid pace have convinced market participants that inflation is not a
problem. While this year's rally can continue, given weak economic data, there
are still
[ ] MARSHALL FUNDS
signs of economic strength and inflation in the pipeline. As the strength of
the current rally fades, yield will again become the dominant component of
return. To this end, the Fund will emphasize yield in the current strategy and
maintain a more neutral duration of approximately one year.
[Graphic representation "A5" omitted. See Appendix.]
* Performance quoted represents past performance. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than their original cost.
INTERMEDIATE BOND FUND
For the six-month period ended February 28, 1995, total return for the Marshall
Intermediate Bond Fund (the "Fund") was 2.28%* versus the Lehman Intermediate
Government/Corporate Bond Index return of 2.72%.** Since the Federal Reserve
Board's (the "Fed") action to raise interest rates .75% in November 1994, the
bond market has performed well. Bonds with the longest durations benefitted the
most in December, as the yield curve flattened dramatically between 2 years and
30 years. Belief that the Fed was staying ahead of perceived inflationary
pressures made yields attractive to investors in the longer bonds. The Fed
raised rates another .50% in February, igniting a rally in bonds across the
entire maturity spectrum based on the view that this latest tightening cycle
was nearly complete after seven rate hikes totaling 3.0%.
The difference in performance between the Fund and the index with which it is
being compared resulted from the Fund's shorter duration and underweighting in
the intermediate maturities. The Fund was structured to capture the performance
from a bearish flattening bond market. This occurs when rates rise overall and
short-term rates rise more than long-term rates. The yield curve actually
steepened in January and February, reflecting the belief the Fed was done
raising interest rates.
In our view, the Fed will need to raise interest rates again, as data in the
first quarter of 1995 gives evidence the economy is still growing and inflation
risks still exist, with high capacity utilization rates and a weak U.S. dollar.
We expect the yield curve to flatten, with shorter maturities giving back some
of the gains from early 1995 as higher short-term interest rates are factored
into the market. With the light supply of corporate bonds, we have allocated
9.5% to asset-backed securities as a substitute and 18.5% to mortgage-backed
securities. New issue corporates at attractive levels will be added to enhance
the Fund's yield.
[Graphic representation "A6" omitted. See Appendix.]
* Performance quoted represents past performance. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than their original cost.
** The Lehman Intermediate Government/Corporate Bond Index is an unmanaged
index. Actual investments may not be made in an index.
GOVERNMENT INCOME FUND
For the six-month period ended February 28, 1995, total return for the Marshall
Government Income Fund (the "Fund") was 3.22%* versus the Lehman Brothers
Mortgage-Backed Securities Index return of 3.70%.** Since the Federal Reserve
Board's (the "Fed") action to raise interest rates .75% in November 1994, the
bond market has performed well. Bonds with the longest durations benefitted the
most in December, as long rates declined while short-term rates rose. Belief
that the Fed was staying ahead of perceived inflationary pressures made yields
attractive to investors in the longer bonds. The Fed raised rates another .50%
in February, igniting a rally in bonds across the entire maturity
(continued)
INVESTMENT REVIEW
spectrum based on the view that this latest tightening cycle was nearly
complete after seven rate hikes totaling 3.0%.
As a sector, mortgage-related securities performed well during the rally. A
lack of supply of new mortgages protected the sector from the typical
underperformance that occurs as interest rates fall and prepayment fears enter
the market. We believe that mortgages should maintain their relative value
unless the economy slows and interest rates drop significantly from current
levels.
In our view, the economy should continue to grow at a healthy, although slower
pace in 1995, and inflation could still become a problem given high capacity
utilization rates and a weak U.S. dollar. The Fed may need to raise interest
rates again in late summer to early fall if new economic data indicates a
strong economy. We feel that the yield curve is likely to flatten, with shorter
maturities giving back some of their gains from early 1995 as higher short-term
rates are again factored into the market. Our strategy calls for an increased
allocation to higher coupon, premium mortgages and an overweighting in
Government National Mortgage Association 30-year mortgages. We believe that the
higher coupon mortgages should outperform in a rising interest rate
environment, and the 30-year mortgages should benefit from a flattening yield
curve.
[Graphic representation "A7" omitted. See Appendix.]
* Performance quoted represents past performance. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than their original cost. U.S. government bonds,
unlike mutual funds, are guaranteed by the U.S. government.
** The Lehman Brothers Mortgage-Backed Securities Index is an unmanaged index.
Actual investments may not be made in an index.
SHORT-TERM TAX-FREE FUND
The investment objective of the Marshall Short-Term Tax-Free Fund (the "Fund")
is to provide current income which is exempt from federal income tax.* Though
clearly important, investors in any bond fund were recently reminded that
income is only part of total return performance. Price performance awareness,
as tracked by the fluctuations in net asset value per share, became a critical
element in the successful management of bond funds during the past six months.
During the six months ended February 28, 1995, there were two distinct interest
rate patterns. For the first half of the period, interest rates rose
dramatically, as investors were continually surprised and worried about
reported robust economic activity. Inflationary fears remained the focus even
as the Federal Reserve Board (the "Fed") tightened monetary policy. As a
result, short-term municipal bond yields were forced higher to remain
competitive compared with taxable securities.
From mid-November 1994 to the end of February 1995, bond investors envisioned
the desired slowdown of the U.S. economy as a viable scenario, given the
aggressive nature of recent Fed policy. Consequently, the bond market performed
better as interest rates declined, although convincing evidence of the desired
moderation in economic activity remains wishful not factual. Overall, the last
six months provided investors in the Fund with a positive total return of
1.79%.** This return compares favorably with the Lehman Brothers Three-Year
State General Obligations Bonds Index total return of 1.46%*** during the same
time period. As we approach the peak of this latest economic cycle, we will
gradually extend the average maturity of the Fund. Up to now, it has been
prudent to stay relatively defensive in an effort to not "fight the Fed."
[ ] MARSHALL FUNDS
[Graphic representation "A8" omitted. See Appendix.]
* Income may be subject to the federal alternative minimum tax and state and
local taxes.
** Performance quoted represents past performance. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than their original cost. U.S. government bonds,
unlike mutual funds, are guaranteed by the U.S. government.
*** The Lehman 3-year GO Index is an unmanaged index. Actual investments may
not be made in an index.
INTERMEDIATE TAX-FREE FUND
The investment objective of the Marshall Intermediate Tax-Free Fund (the
"Fund") is to provide as high a level of income which is exempt from federal
income tax consistent with preservation of capital.* Over the six months ended
February 28, 1995, most investors became painfully aware of how difficult it
can be to preserve capital when the predominant trend is toward higher interest
rates. Specifically, these six months provided Fund shareholders with a total
return of 1.82%**. This compares favorably to the Lehman Brothers Five-Year
State General Obligations Bonds Index,*** which had a total return of 1.32%
over the same time period.
Fortunately, the bond market has just recently realized that higher interest
rates are beginning to slow the economy. It may be that we have already seen
the peak in long-term interest rates for this cycle. The average maturity of
the holdings in the Fund has been lengthened in order to take advantage of an
anticipated friendlier market during the balance of 1995. This does not mean
the bond market will improve throughout the entire year, but we expect it to be
more profitable than the year just completed.
Technically, we believe that the municipal bond market is well poised to keep
pace with taxable bonds, since the level of new issue supply remains light in
comparison to the demand for tax-free investments. The heyday of new issue
volume crested in 1993, as refinancing of existing debt accounted for the bulk
of new issuance. For now, we will continue to scour the market for those bonds
offering the best combination of potential income and price appreciation,
consistent with the Fund's investment objective.
[Graphic representation "A9" omitted. See Appendix.]
*Income may be subject to the federal alternative minimum tax and state and
local taxes.
** Performance quoted represents past performance. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than their original cost.
*** The Lehman 5-year GO Index is an unmanaged index. Actual investments may
not be made in an index.
MONEY MARKET FUND
For the six-month period ended February 28, 1995, the Marshall Money Market
Fund (the "Fund") provided a total return of 2.57% for Class A shares (formerly
Trust shares) and 2.42% for Class B shares (formerly Investment shares). The
seven-day yield began the period at 4.31% for Class A shares and 4.01% for
Class B shares, and ended the period at 5.83% for Class A shares and 5.53% for
Class B shares.* The increase in money market yields resulted from the series
of interest rate hikes by the Federal Reserve Board (the "Fed"). Over the last
six months, the Fed raised the Fed Funds rate 1.25%, from 4.75% to 6.00%. Even
though the economic data has shown few signs of final goods inflation, the Fed
has been acting preemptively to ensure a low inflation environment.
(continued)
INVESTMENT REVIEW
With signs pointing to slower economic growth, it remains to be seen how much
further the Fed is willing to raise rates. Most economists generally believe it
takes about 12 months for the economy to feel the effects of higher rates. With
the first tightening of this interest rate cycle having taken place in February
1994, many market participants feel the economy is just starting to see Fed
policy take hold. Given the prospects for slower growth, the average dollar-
weighted maturity of the Fund is now 40 days, which is up from 32 days at the
beginning of the period. With the expectation that the Fed will tighten rates
at a slower pace than last year, the average maturity of the Fund is likely to
increase as the year progresses.
[Graphic representation "A10" omitted. See Appendix.]
*Performance quoted represents past performance and is not indicative of future
results. Yield will vary.
<PAGE>
[This Page Intentionally Left Blank]
February 28, 1995 (Unaudited)
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
STOCK FUND
<TABLE>
- -------------------------------------------------------------
<CAPTION>
Description Shares Value
- -------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- 96.3%
BASIC INDUSTRIES -- .8%
CHEMICALS
PPG Industries, Inc. 50,000 $ 1,837,500
------------
CAPITAL GOODS -- 24.2%
COMPUTER SERVICES
(c)Computer Sciences Corp. 165,000 8,105,625
------------
DEFENSE
(c)Litton Industries, Inc. 25,000 912,500
------------
ELECTRONICS
AMP, Inc. 30,000 2,250,000
(c)Cisco Systems, Inc. 30,000 1,012,500
Harris Corp. 60,000 2,700,000
Intel Corp. 40,000 3,190,000
Motorola, Inc. 35,000 2,012,500
(c)Solectron Corp. 75,000 1,809,375
(c)STB Systems, Inc. 100,000 1,362,500
Texas Instruments, Inc. 30,000 2,362,500
------------
Total 16,699,375
------------
ELECTRICAL EQUIPMENT
General Electric Co. 125,000 6,859,375
------------
MACHINERY/EQUIPMENT
Parker Hannifin Corp. 50,000 2,337,500
------------
OFFICE EQUIPMENT
Apple Computer, Inc. 50,000 1,975,000
(c)Indigo 125,000 3,703,125
(c)Lotus Development Corp. 50,000 2,087,500
------------
Total 7,765,625
------------
OTHER CAPITAL GOODS
(c)ADC Telecommunications, Inc. 50,000 2,787,500
Alco Standard Corp. 70,000 4,760,000
Ericsson L. M. Telephone Co. 55,000 3,128,125
Minnesota Mining & Manufacturing Co. 60,000 3,285,000
------------
Total 13,960,625
------------
Total Capital Goods 56,640,625
------------
CONSUMER DURABLES -- 4.0%
AUTOMOTIVE AND RELATED
Exide Corp. 40,000 2,060,000
Hayes Wheels International, Inc. 90,000 1,530,000
Mark IV Industries, Inc. 110,000 2,200,000
------------
Total 5,790,000
------------
OTHER CONSUMER DURABLES
(c)American Homestar Corp. 85,000 807,500
Shaw Industries, Inc. 175,000 2,734,375
------------
Total 3,541,875
------------
Total Consumer Durables 9,331,875
------------
CONSUMER NON-DURABLES -- 37.7%
BEVERAGE AND FOODS
General Mills, Inc. 30,000 1,818,750
Kellogg Co. 30,000 1,623,750
McDonalds Corp. 175,000 5,818,750
------------
Total 9,261,250
------------
COSMETICS/TOILETRIES
Procter & Gamble Co. 37,000 2,460,500
Tambrands, Inc. 60,000 2,595,000
------------
Total 5,055,500
------------
</TABLE>
<------------------------------------------------------------
[CAPTION]
Description Shares Value
------------------------------------------------------------
[S] [C] [C]
COMMON STOCKS (Continued)
CONSUMER NON-DURABLES (Continued)
HEALTH CARE
(c)Amgen, Inc. 20,000 $ 1,380,000
Bergen Brunswig Corp. 70,000 1,907,500
Cardinal Health, Inc. 140,000 6,930,000
(c)Coram Healthcare Corp. 200,000 4,700,000
IVAX Corp. 175,000 3,784,375
Merck & Co., Inc. 75,000 3,178,125
------------
Total 21,880,000
------------
MEDIA
(c)British Sky Broadcast Grp. 100,000 2,412,500
Capital Cities ABC, Inc. 75,000 6,637,500
CBS, Inc. 40,000 2,580,000
McGraw-Hill, Inc. 35,000 2,467,500
(c)Telecommunications, Inc. 50,000 1,137,500
Time Warner, Inc. 60,000 2,317,500
------------
Total 17,552,500
------------
RETAIL
(c)Federated Dept Stores, Inc. 150,000 3,300,000
Home Depot, Inc. 75,000 3,365,625
(c)Kohls Corp. 70,000 2,870,000
Mercantile Stores, Inc. 80,000 3,330,000
(c)Nine West Group, Inc. 80,000 2,250,000
(c)Price Costco, Inc. 200,000 2,725,000
------------
Total 17,840,625
------------
SERVICES
Browning-Ferris Industries, Inc. 150,000 4,668,750
(c)Federal Express Corp. 35,000 2,279,375
(c)GTECH Holdings, Inc. 80,000 1,590,000
------------
Total 8,538,125
------------
TOBACCO
Philip Morris Cos., Inc. 60,000 3,645,000
RJR Nabisco Holdings Corp. 800,000 4,500,000
------------
Total 8,145,000
------------
Total Consumer Non-Durables 88,273,000
------------
ENERGY -- 10.0%
INTERNATIONAL OIL AND GAS
Mobil Corp. 50,000 4,350,000
Royal Dutch Petroleum Co. 71,700 8,039,362
------------
Total 12,389,362
------------
OIL AND GAS PRODUCTS
Anadarko Pete Corp. 50,000 2,193,750
Enron Corp. 125,000 4,125,000
Noble Affiliates, Inc. 100,000 2,550,000
------------
Total 8,868,750
------------
OIL AND GAS SERVICE
Schlumberger, Ltd. 40,000 2,275,000
------------
Total Energy 23,533,112
------------
FINANCIAL -- 13.3%
BANKS
First Chicago Corp. 100,000 5,062,500
------------
INSURANCE
American International Group, Inc. 65,000 6,743,750
General Re Corp. 30,000 3,907,500
MGIC Investment Corp. 160,000 6,100,000
------------
Total 16,751,250
------------
(See Notes which are an integral part of the Financial Statements)
[ ] MARSHALL FUNDS
<TABLE>
- ----------------------------------------------------------------------------
<CAPTION>
Shares or
Principal
Description Amount Value
- ----------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (continued)
FINANCIAL (Continued)
OTHER FINANCIAL
Capstone Cap Corp. 60,000 $ 997,500
First Financial Management Corp. 100,000 6,912,500
Regency Realty Corp. 90,000 1,485,000
------------
Total 9,395,000
------------
Total Financial 31,208,750
------------
UTILITIES -- 5.4%
OTHER UTILITIES
Enron Global Pwr Pipelines 100,000 2,337,500
------------
TELECOMMUNICATIONS
Ameritech Corp. 100,000 4,287,500
Southwestern Bell Corp. 90,000 3,746,250
(c)Telewest Communications 80,000 2,340,000
------------
Total 10,373,750
------------
Total Utilities 12,711,250
------------
TRANSPORTATION -- 0.9%
RAILROAD
Conrail, Inc. 40,000 2,210,000
------------
TOTAL COMMON STOCKS (identified cost $210,058,602) 225,746,112
------------
(B)REPURCHASE AGREEMENT -- 3.9%
Barclays de Zoete Wedd Securities, Inc.,
6.00%, dated 2/28/1995,
due 3/1/1995 $9,202,000 9,202,000
------------
TOTAL INVESTMENTS
(identified cost $219,260,602) $234,948,112
============
</TABLE>
- --------------------------------------------------------------------------------
VALUE EQUITY FUND
<TABLE>
- -----------------------------------------------
<CAPTION>
Description Shares Value
- -----------------------------------------------
<S> <C> <C>
COMMON STOCKS -- 87.1%
CAPITAL GOODS -- 8.6%
AEROSPACE AND RELATED
Raytheon Co. 68,950 $4,860,975
----------
ELECTRONICS
Avnet, Inc. 124,800 4,836,000
(c,d)Borland 192,800 1,542,400
International, Inc.
General Electric Co. 27,600 1,514,550
(d)International Business
Machines 23,320 1,754,830
----------
Total 9,647,780
----------
MACHINERY AND MACHINE
TOOLS
Giddings & Lewis, Inc. 182,650 3,105,050
----------
Total Capital Goods 17,613,805
----------
CONSUMER DURABLES -- 5.0%
AUTOMOTIVE AND RELATED
Eaton Corp. 63,700 3,192,963
----------
BUILDING AND FOREST
PRODUCTS
Georgia-Pacific Corp. 47,000 3,519,125
----------
HOUSEHOLD PRODUCTS/WARES
Premark International, 84,000 3,633,000
Inc.
----------
Total Consumer Durables 10,345,088
----------
CONSUMER NON-DURABLES--
19.8%
BEVERAGES AND FOODS
(d)Fleming Companies, 209,000 4,075,500
Inc.
International Multifoods 61,600 1,147,300
Corp.
PepsiCo., Inc. 35,300 1,381,113
Supervalu, Inc. 5,200 133,900
----------
Total 6,737,813
----------
PHARMACEUTICALS AND
HEALTH CARE
(c)Acuson Corp. 115,400 1,428,075
(d)Caremark 209,850 3,672,375
International, Inc.
(d)Mallinckrodt Group, 179,050 5,863,887
Inc.
National Medical 76,200 1,181,100
Enterprises
----------
Total 12,145,437
----------
PHOTOGRAPHY
Eastman Kodak Co. 45,200 2,305,200
----------
RETAIL
(c,d)Federated Department 151,500 3,333,000
Stores, Inc.
K-Mart Corp. 244,400 3,116,100
Limited, Inc. 123,000 2,152,500
Melville Corp. 16,000 520,000
(c,d)Price Costco, Inc. 213,000 2,902,125
(d)Sears, Roebuck & Co. 131,800 6,491,150
----------
Total 18,514,875
----------
SERVICES
(d)Fluor Corp. 19,000 926,250
----------
Total Consumer Non-
Durables 40,629,575
----------
ENERGY -- 11.8%
INTERNATIONAL OIL
British Petroleum PLC 32,150 2,459,475
Royal Dutch Petroleum 25,400 2,847,975
Co.
----------
Total 5,307,450
----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
February 28, 1995 (Unaudited)
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
VALUE EQUITY FUND (continued)
<TABLE>
----------------------------------------------------------------
<CAPTION>
Description Shares Value
----------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (Continued)
ENERGY (Continued)
OIL & GAS EQUIPMENT AND SERVICES
(d)Baker Hughes, Inc. 187,900 $ 3,617,075
(d)Schlumberger, Ltd. 19,000 1,080,625
Tidewater, Inc. 203,500 3,993,688
-----------
Total 8,691,388
-----------
OIL & GAS PRODUCTS
Coastal Corp. 21,000 601,125
Exxon Corp. 33,300 2,131,200
Mobil Corp. 23,700 2,061,900
Occidental Petroleum Corp. 68,000 1,351,500
USX-Marathon Group 252,120 4,096,950
-----------
Total 10,242,675
-----------
Total Energy 24,241,513
-----------
FINANCIAL -- 14.6%
BANKS
Ahmanson (H.F.) & Co. 55,900 1,027,162
BancOne Corp. 102,620 3,014,462
(d)PNC Bank Corp. 150,400 3,835,200
-----------
Total 7,876,824
-----------
INSURANCE
American General Corp. 135,500 4,285,187
Cigna Corp. 62,750 4,753,313
MBIA, Inc. 40,000 2,480,000
Torchmark Corp. 24,400 1,021,750
UNUM Corp. 33,600 1,428,000
Washington Mutual, Inc. 54,800 1,102,850
-----------
Total 15,071,100
-----------
OTHER FINANCIAL
American Express Co. 69,060 2,330,775
Bear Stearns Companies, Inc. 85,900 1,610,625
Franklin Resources, Inc. 26,000 1,007,500
Painewebber Group, Inc. 62,400 1,084,200
Student Loan Marketing Assoc. 27,600 1,017,750
-----------
Total 7,050,850
-----------
Total Financial 29,998,774
-----------
RAW MATERIALS/INTERMEDIATE GOODS -- 16.6%
CHEMICALS
Calgon Carbon Corp. 314,000 3,297,000
(d)Eastman Chemical Co. 103,075 5,643,356
(d)IMC Global, Inc. 87,100 4,071,925
(d)Imperial Chemical Industries
PLC 110,250 4,919,906
Pegasus Gold, Inc. 56,500 600,313
-----------
Total 18,532,500
-----------
INTERMEDIATE GOODS
(d)Hanson PLC 204,100 3,826,875
-----------
METALS
Bethlehem Steel Corp. 230,500 3,601,562
Horsham Corp. 357,950 4,474,375
(c)LTV Corp. 242,300 3,725,363
-----------
Total 11,801,300
-----------
Total Raw Materials/
Intermediate Goods 34,160,675
-----------
</TABLE>
<TABLE>
------------------------------------------------------------------------------
<CAPTION>
Shares or
Principal
Description Amount Value
------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (Continued)
TELECOMMUNICATIONS -- 4.0%
SERVICES
GTE Corp. 86,000 $ 2,870,250
(d)MCI Communications Corp. 140,000 2,817,500
(d)US West, Inc. 68,000 2,635,000
------------
Total Telecommunications 8,322,750
------------
TRANSPORTATION -- 5.5%
OTHER TRANSPORTATION
Alexander & Baldwin, Inc. 137,250 2,985,188
American President Cos., Ltd. 116,100 2,641,275
------------
Total 5,626,463
------------
RAILROADS
Canadian Pacific, Ltd. 163,000 2,282,000
Conrail, Inc. 61,000 3,370,250
------------
Total 5,652,250
------------
Total Transportation 11,278,713
------------
UTILITIES -- 1.2%
ELECTRIC DISTRIBUTION
Entergy Corp. 107,500 2,405,312
------------
TOTAL COMMON STOCKS
(identified cost $182,818,123) 178,996,205
------------
PREFERRED STOCKS -- 0.8%
CONVERTIBLE PREFERRED STOCK
Ford Motor Co., Series A, Convertible, 12/31/2049 18,500 1,570,188
------------
TOTAL PREFERRED STOCKS
(identified cost $1,799,125) 1,570,188
------------
(e)COLLATERAL FOR SECURITIES LENDING -- 18.4%
BancOne Student Loan Trust, Series 1994-A, Class
A1, 6.138%, 3/27/1995 $ 1,147,819 1,147,819
Beta Financial, 6.02%, 3/7/1995 2,812,500 2,812,500
Carco Auto Trust, Series 1993-2, Class A1,
6.187%, 3/15/1995 2,811,621 2,811,621
Donaldson, Lufkin & Jenrette Securities Corp.,
6.375%, 4/4/1995 4,687,500 4,687,500
Federal Street, 6.14%, 4/4/1995 2,812,500 2,812,500
General Electric Co., 4.716%, 5/5/1995 937,500 937,500
GMAC, 6.06%, 3/2/1995 4,000,000 4,000,000
Goldman, Sachs & Co., 6.035%, due 3/2/1995 13,571,219 13,571,219
Premiere Auto Trust, Series 1993-3, Class A2,
6.275%, 3/15/1995 248,415 248,415
Premiere Auto Trust, Series 1994-3, Class A2,
6.16%, 3/2/1995 1,938,086 1,938,086
</TABLE>
(See Notes which are an integral part of the Financial Statements)
[ ] MARSHALL FUNDS
<TABLE>
- -------------------------------------------------------------------------------
<CAPTION>
Principal
Description Amount Value
- -------------------------------------------------------------------------------
<S> <C> <C>
COLLATERAL FOR SECURITIES LENDING (Continued)
Sears, Roebuck & Co., 6.01%, 3/7/1995 $2,812,500 $ 2,812,500
------------
TOTAL COLLATERAL FOR SECURITIES LENDING (identified
cost $37,779,660) 37,779,660
------------
(b)REPURCHASE AGREEMENT -- 13.2%
Barclays de Zoete Wedd Securities, Inc., 6.00%, dated
2/28/1995, due 3/1/1995 (at amortized cost) 27,174,000 27,174,000
------------
TOTAL INVESTMENTS
(identified cost $249,570,908) $245,520,053
============
</TABLE>
- --------------------------------------------------------------------------------
EQUITY INCOME FUND
<TABLE>
-------------------------------------------------------
<CAPTION>
Description Shares Value
-------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- 89.0%
CAPITAL GOODS -- 9.4%
ELECTRICAL EQUIPMENT
General Electric Co. 58,200 $ 3,193,725
------------
MACHINERY AND MACHINE TOOLS
Briggs & Stratton Corp. 11,000 382,250
Eaton Corp. 15,500 776,937
------------
Total 1,159,187
------------
OFFICE EQUIPMENT
Xerox Corp. 5,300 587,637
------------
OTHER CAPITAL GOODS
Minnesota Mining & Mfg. Co. 18,000 985,500
Ogden Corp. 25,100 536,512
Tenneco, Inc. 14,900 677,950
------------
Total 2,199,962
------------
Total Capital Goods 7,140,511
------------
CONSUMER DURABLES -- 3.0%
APPLIANCES
Maytag Corp. 21,600 356,400
------------
AUTOMOTIVE AND RELATED
Ford Motor Co. 72,000 1,881,000
Strattec Sec Corp. 2,200 28,050
------------
Total 1,909,050
------------
Total Consumer Durables 2,265,450
------------
CONSUMER NON-DURABLES -- 18.5%
HEALTH CARE
American Home Products Corp. 9,700 693,550
Baxter International, Inc. 10,000 311,250
Bristol Myers Squibb Co. 20,800 1,289,600
Merck & Co., Inc. 43,100 1,826,362
Schering Plough Corp. 7,300 572,138
Upjohn Co. 6,600 232,650
Warner Lambert Co. 8,400 641,550
------------
Total 5,567,100
------------
PHOTOGRAPHY
Eastman Kodak Co. 13,000 663,000
------------
MEDIA
Times Mirror Co-Cl A 17,000 314,500
------------
RETAIL
K Mart Corp. 45,000 573,750
Penney J C Inc. 17,000 728,875
Sears Roebuck & Co. 18,500 911,125
------------
Total 2,213,750
------------
SERVICES
Dun & Bradstreet Corp. 10,900 562,712
------------
TOBACCO
American Brands, Inc. 16,700 624,163
Philip Morris Cos., Inc. 44,400 2,697,300
RJR Nabisco Holdings, Pfd C 132,000 742,500
UST, Inc. 16,700 496,825
------------
Total 4,560,788
</TABLE>
(See Notes which are an integral part of the Financial Statements)
February 28, 1995 (Unaudited)
PORTFOLIO OF INVESTMENTS
<TABLE>
- -----------------------------------------------------------
<CAPTION>
Description Shares Value
- -----------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (Continued)
CONSUMER NON-DURABLES (Continued)
WHOLESALE
Supervalu, Inc. 7,000 $ 180,250
------------
Total Consumer Non-Durables 14,062,100
------------
ENERGY -- 17.9%
DOMESTIC AND INTERNATIONAL OIL
Atlantic Richfield Co. 5,500 602,938
Amoco Corp. 15,700 930,225
Ashland, Inc. 16,000 518,000
Chevron Corp. 26,100 1,239,750
Exxon Corp. 45,300 2,899,200
Mobil Corp. 13,000 1,131,000
Occidental Petroleum Corp. 36,600 727,425
Royal Dutch Petroleum Co. 15,000 1,681,875
Shell Trans & Trading PLC 21,000 1,407,000
Sun Co., Inc. 12,000 349,500
Texaco, Inc. 10,500 669,375
USX - Marathon Group 66,000 1,072,500
------------
Total 13,228,788
------------
OIL SERVICE
Dresser Industries, Inc. 18,000 371,250
------------
Total Energy 13,600,038
------------
FINANCIAL -- 16.5%
BANKS
Banc One Corp. 29,450 865,094
Bankamerica Corp. 12,900 620,812
Baybanks 5,500 345,125
Chase Manhattan Corp. 17,000 609,875
Citicorp 8,000 360,000
Crestar Financial Corp. 6,900 297,562
Integra Financial Corp. 7,300 312,075
Michigan National Corp. 10,000 1,018,750
Nationsbank Corp. 19,000 947,625
UJB Financial Corp. 14,000 395,500
Victoria Bankshares, Inc. 6,400 166,400
------------
Total 5,938,818
------------
INSURANCE
Aetna Life & Casualty Co. 9,300 499,875
American General Corp. 33,500 1,059,437
Cigna Corp. 13,400 1,015,050
Lincoln National Corp. 13,100 528,913
Marsh & McLennan Cos. 6,900 565,800
Safeco Corp. 6,500 357,500
Transamerica Corp. 11,400 622,725
------------
Total 4,649,300
------------
SERVICES
Federal National Mortgage Assn. 13,700 1,056,613
Storage Trust Realty 50,000 937,500
------------
Total 1,994,113
------------
Total Financial 12,582,231
------------
RAW MATERIALS/INTERMEDIATE GOODS -- 10.0%
CHEMICALS
Dow Chemical Co. 11,600 777,200
Du Pont (E.I.) DeNemours 42,900 2,407,763
Goodrich B.F. Co. 12,600 560,700
</TABLE>
<TABLE>
- -----------------------------------------------------------------------------
<CAPTION>
Shares or
Principal
Description Amount Value
- -----------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (Continued)
RAW MATERIALS/INTERMEDIATE GOODS (Continued)
CHEMICALS (Continued)
Monsanto Co. 9,500 $ 752,875
PPG Industries, Inc. 18,400 676,200
-----------
Total 5,174,738
-----------
PAPERS
Kimberly Clark Corp. 9,200 478,400
Temple Inland, Inc. 15,800 772,225
Union Camp Corp. 8,500 437,750
-----------
Total 1,688,375
-----------
OTHER RAW MATERIALS
Hanson PLC 41,600 780,000
-----------
Total Raw Materials/
Intermediate Goods 7,643,113
-----------
UTILITIES -- 13.7%
GAS DISTRIBUTION
Enron Corp. 24,300 801,900
Enron Global Power & Pipelines 15,000 350,625
Sonat, Inc. 18,900 548,100
-----------
Total 1,700,625
-----------
ELECTRIC
Cinergy Corp. 16,000 396,000
Entergy Corp. 25,200 563,850
New England Electric System 11,100 366,300
Nipsco Industries, Inc. 10,000 316,250
Pinnacle West Capital 15,000 322,500
SCE Corp. 22,400 366,800
Texas Utilities Co. 11,000 361,625
Wisconsin Energy Corp. 13,900 385,725
WPS Resources Corp. 9,100 267,313
-----------
Total 3,346,363
-----------
TELECOMMUNICATIONS
AT&T Corp. 11,000 569,250
Alltel Corp. 21,700 621,162
Bell Atlantic Corp. 21,300 1,142,213
Bellsouth Corp. 12,200 719,800
GTE Corp. 38,400 1,281,600
Sprint Corp. 22,800 666,900
U S West, Inc. 9,000 348,750
-----------
Total 5,349,675
-----------
Total Utilities 10,396,663
-----------
TOTAL COMMON STOCKS
(identified cost $65,340,714) 67,690,106
-----------
PREFERRED STOCKS -- 0.3%
CONVERTIBLE PREFERRED STOCKS
General Motors Corp., Pfd C
(identified cost $227,780) 4,000 $ 230,000
-----------
(b)REPURCHASE AGREEMENT -- 11.0%
Barclays de Zoete Wedd Securities, Inc., 6.00%, dated
2/28/1995, due 3/1/1995 (at amortized cost) $8,344,000 8,344,000
-----------
TOTAL INVESTMENTS
(identified cost $73,912,494) $76,264,106
===========
</TABLE>
(See Notes which are an integral part of the Financial Statements)
[ ] MARSHALL FUNDS
- --------------------------------------------------------------------------------
MID-CAP STOCK FUND
<TABLE>
---------------------------------------------------------------------
<CAPTION>
Description Shares Value
---------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--96.7%
CAPITAL GOODS--14.2%
COMPUTERS
(c)Transaction Systems Architects--Class A 20,000 $ 357,500
-----------
ELECTRONICS
Sensormatic Electronics Corp. 30,000 851,250
-----------
ELECTRICAL EQUIPMENT
(c)Atmel Corporation 35,000 1,194,375
(c)Bay Networks Inc. 30,000 941,250
(c)Integrated Device Technologies, Inc. 50,000 1,906,250
Linear Technology Corp. 35,000 1,907,500
Molex Inc.--Class A 50,000 1,587,500
-----------
Total 7,536,875
-----------
OFFICE EQUIPMENT
Danka Business Systems--ADR 60,000 1,350,000
(c)Office Depot, Inc. 50,000 1,168,750
-----------
Total 2,518,750
-----------
Total Capital Goods 11,264,375
-----------
CONSUMER DURABLES--6.7%
AUTOMOTIVE AND RELATED
(c)APS Holding Corp.--
Class A 30,000 877,500
Exide Corp 45,000 2,317,500
Harley Davidson, Inc. 60,000 1,620,000
(c)Top Source, Inc. 70,000 472,500
-----------
Total 5,287,500
-----------
Total Consumer Durables 5,287,500
-----------
CONSUMER NON-DURABLES--46.9%
BROADCASTING
(c)Bell Cable Media PLC--ADR 40,000 820,000
(c)Westwood One Inc. 50,000 565,625
-----------
Total 1,385,625
-----------
COMMERCIAL SERVICES
(c)Apollo Group Inc.--
Class A 50,000 1,043,750
Cintas Corp. 35,000 1,330,000
General Motors--Class E 50,000 1,918,750
(c)Interim Services Inc. 40,000 1,115,000
-----------
Total 5,407,500
-----------
DRUGS
(c)Elan Corp PLC--ADR 40,000 1,410,000
(c)Forest Labs, Inc. 30,000 1,522,500
IVAX Corp. 45,000 973,125
(c)North American Vaccine, Inc. 85,000 680,000
-----------
Total 4,585,625
-----------
ENVIRONMENTAL
(c)USA Waste Services, Inc. 50,000 556,250
-----------
HEALTH CARE
(c)American Medical Response 40,000 1,095,000
Cardinal Health Inc. 39,000 1,930,500
(c)Healthsouth Rehabilitation 25,000 1,006,250
Omnicare Inc. 40,000 1,945,000
Vencor Inc. 40,000 1,270,000
-----------
Total 7,246,750
-----------
</TABLE>
<TABLE>
--------------------------------------------------------------------------
<CAPTION>
Description Shares Value
--------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (Continued)
CONSUMER NON-DURABLES (Continued)
LEISURE AND RECREATION
Circus Circus Enterprises 25,000 $ 656,250
(c)Host Marriott Corp. 60,000 660,000
(c)Mirage Resorts, Inc. 50,000 1,193,750
-----------
Total 2,510,000
-----------
RETAIL
(c)Bed, Bath & Beyond, Inc. 40,000 970,000
(c)Department 56, Inc. 50,000 1,937,500
(c)Just For Feet Inc. 40,000 875,000
(c)Kohl's Corp. 45,000 1,845,000
Newell Company 50,000 1,193,750
(c)Tommy Hilfiger Corp. 80,000 1,600,000
-----------
Total 8,421,250
-----------
SERVICES
First Data Corp. 40,000 2,150,000
First Financial Management Corp. 25,000 1,728,125
(c)Franklin Quest Co. 50,000 1,781,250
Loewen Group Inc. 50,000 1,393,750
-----------
Total 7,053,125
-----------
Total Consumer Non-Durables 37,166,125
-----------
FINANCIAL--12.1%
BANKS
Bank of New York, Inc. 35,000 1,172,500
Crestar Financial Corp. 30,000 1,293,750
First Bank System, Inc. 35,000 1,360,625
First Virginia Banks, Inc. 30,000 1,057,500
-----------
Total 4,884,375
-----------
OTHER FINANCIAL
Advanta Corp--Class B 45,000 1,417,500
Mercury Finance Co. 65,000 1,040,000
Morgan Stanley Group, Inc. 20,000 1,347,500
UJB Financial Corp. 30,000 847,500
-----------
Total 4,652,500
-----------
Total Financial 9,536,875
-----------
INSURANCE--6.0%
Kemper Corp. 30,000 1,207,500
MGIC Investment Corp 50,000 1,906,250
Nac Re Corp 50,000 1,662,500
-----------
Total Insurance 4,776,250
-----------
TELECOMMUNICATIONS--9.3%
(c)ADC Telecommunications Inc. 40,000 2,230,000
(c)Paging Network Inc. 40,000 1,330,000
Scientific - Atlanta Inc. 40,000 935,000
(c)Tellabs Inc. 40,000 2,080,000
(c)Vanguard Cellular Systems--Class A 30,000 780,000
-----------
Total Telecommunications 7,355,000
-----------
TOBACCO--1.5%
UST Inc. 40,000 1,190,000
-----------
Total Tobacco 1,190,000
-----------
TOTAL COMMON STOCKS (identified cost $73,098,076) 76,576,125
-----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
February 28, 1995 (Unaudited)
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
MID-CAP STOCK FUND (continued)
<TABLE>
-------------------------------------------------------------------------------
<CAPTION>
Principal
Description Amount Value
-------------------------------------------------------------------------------
<S> <C> <C>
U.S. TREASURY BILLS -- 0.1%
5.45%, 4/6/95 $ 49,728 $ 49,728
5.72%, 4/6/95 49,714 49,714
-----------
TOTAL U.S. TREASURY BILLS
(at amortized cost) 99,442
-----------
(B)REPURCHASE AGREEMENT -- 5.4%
Barclays de Zoete Wedd Securities, Inc., 6.00%, dated
2/28/95 due 3/1/95 (at amortized cost) 4,306,000 4,306,000
-----------
TOTAL INVESTMENTS
(identified cost $77,503,518) $80,981,567
===========
</TABLE>
- --------------------------------------------------------------------------------
SHORT-TERM INCOME FUND
<TABLE>
------------------------------------------------------------------------------
<CAPTION>
Principal
Description Amount Value
------------------------------------------------------------------------------
<S> <C> <C>
LONG-TERM INVESTMENTS -- 86.4%
ASSET-BACKED SECURITIES -- 20.7%
(f)First Deposit Master Trust, Series 1994-1, Class
A, 6.90%, 8/15/2001 $3,290,000 $ 3,278,683
Ford Credit Auto Loan Master Trust, Series 1994-1,
Class A, 6.42%, 7/15/2001 3,000,000 3,001,875
(f)Ford Credit Grantor Trust, Series 1993-B, Class
A, 4.30%, 7/15/1998 1,097,095 1,068,439
(f)Green Tree Acceptance Corp., Series 1993-1,
Class A1, 4.90%, 4/15/2018 622,946 612,007
(f)Green Tree Acceptance Corp., Series 1993-3,
Class A1, 4.60%, 10/15/2018 730,433 718,980
(f)Green Tree Acceptance Corp., Series 1994-4,
Class A1, 6.55%, 7/15/2019 2,332,134 2,306,993
(f)Olympic Automobile Receivables, Series 1994,
Class A, 5.65%, 1/15/2001 2,660,090 2,601,382
PaineWebber CMO Trust, Class 0-4, 9.50%, 6/1/2017 2,478,748 2,526,860
(f)Premier Auto Trust, Series 1993-4, Class A2,
4.65%, 2/2/1999 1,810,079 1,768,085
(f)Revolving Home Equity Loan Trust, Series 1992-1,
Class A, 6.2425%, 11/15/2017 320,057 321,014
-----------
TOTAL ASSET-BACKED SECURITIES (identified cost,
$18,276,029) 18,204,318
-----------
CORPORATE BONDS -- 25.6%
BANKING -- 3.2%
Citicorp, 8.05%, 3/5/1996 1,025,000 1,038,294
(f)Nationsbank Corp., 7.50%, 2/15/1997 1,800,000 1,810,926
-----------
Total 2,849,220
-----------
FINANCE -- 8.4%
Beta Finance Corp., 6.12%, 11/8/1995 3,000,000 3,000,000
(f)Dean Witter Discover & Co., 6.325%, 1/28/1997 3,360,000 3,347,904
(f)Heller Financial, Inc., 6.45%, 2/15/1997 1,003,450 997,841
-----------
Total 7,345,745
-----------
FINANCE-AUTOMOTIVE -- 4.6%
(f)Ford Motor Credit Corp., 5.625%, 3/3/1997 4,150,000 4,027,326
-----------
FINANCE-SECURITIES -- 5.3%
Merrill Lynch & Co., Inc., 5.875%, 12/1/1995 550,000 546,326
(f)Morgan Stanley Group, Inc., 6.512%, 1/20/1997 4,140,000 4,128,822
-----------
Total 4,675,148
-----------
RETAIL -- 2.0%
(f)Dayton Hudson Corp., 4.65%, 3/11/1996 1,755,000 1,720,672
-----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
[ ] MARSHALL FUNDS
<TABLE>
------------------------------------------------------------------------------
<CAPTION>
Principal
Description Amount Value
------------------------------------------------------------------------------
<S> <C> <C>
LONG-TERM INVESTMENTS (Continued)
CORPORATE BONDS (Continued)
TELECOMMUNICATIONS -- 2.1%
Northern Telecom, 8.25%, 6/13/1996 $1,800,000 $ 1,828,116
-----------
TOTAL CORPORATE BONDS
(identified cost, $24,419,040) 22,446,227
-----------
MORTGAGE-BACKED
SECURITIES -- 30.0%
FEDERAL HOME LOAN MORTGAGE
CORP. -- 2.3%
(f)4.10%, 7/15/1997 (Series
1393-A) 13,280 13,259
6.00%, 7/15/2010 (Series
1468-C) 800,000 786,328
(f)7.75%, 1/15/2018 (Series
1259-H) 1,260,616 1,263,667
-----------
Total 2,063,254
-----------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION -- 9.8%
(f)8.00%, 8/1/2007 2,354,996 2,365,299
(f)7.50%, 4/25/2014, REMIC (Series 1991-06-K) 2,660,000 2,653,669
(f)7.25%, 9/25/2018, REMIC (Series 1991-G34-C) 1,694,398 1,683,351
(f)6.00%, 7/25/2019, REMIC (Series 1992-009-G) 1,939,244 1,899,489
-----------
Total 8,601,808
-----------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION -- 2.8%
(f)7.50%, 10/17/2015, CMO
(Class E) 2,415,000 2,416,739
-----------
OTHER -- 15.1%
CMC Securities Corp., III, Series 1994-E, Class AM,
6.00%, 3/25/2024 3,832,160 3,695,045
(f)CWMBS, Inc., Series 1994-13, Class A9, 6.50%,
6/25/2009 4,120,309 3,903,993
(f)GE Capital Mortgage Services, Inc., Series 1994-
10, Class A1, 5.00%, 3/25/2024 3,072,273 3,017,555
(f)Prudential Home Mortgage Securities Co., Series
1993-53, Class A1, 6.00%, 1/25/2009 2,695,204 2,670,358
-----------
Total 13,286,951
-----------
TOTAL MORTGAGE-BACKED SECURITIES
(identified cost, $25,000,058) 26,368,752
-----------
U.S. GOVERNMENT AGENCIES -- 3.2%
(g)Student Loan Marketing Association Floating Rate
Note, 7/19/1996 2,800,000 2,800,140
-----------
TOTAL U.S. GOVERNMENT AGENCIES
(identified cost, $2,800,563) 2,800,140
-----------
U.S. TREASURY NOTES -- 6.9%
7.50%, 1/31/1997 3,000,000 3,039,540
7.25%, 2/15/1998 3,000,000 3,028,170
-----------
TOTAL U.S. TREASURY NOTES (identified cost,
$6,053,438) 6,067,710
-----------
TOTAL LONG-TERM INVESTMENTS (identified cost,
$76,549,128) 75,887,147
-----------
</TABLE>
<TABLE>
----------------------------------------------------------------------------
<CAPTION>
Principal
Description Amount Value
----------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENTS -- 10.8%
MASTER NOTES -- 10.8%
General Motors Acceptance Corp., 6.059%, 3/1/1995 $5,000,000 $ 5,000,000
J. P. Morgan Securities, Inc., 6.225%, 3/1/1995 4,500,000 4,500,000
-----------
TOTAL SHORT-TERM INVESTMENTS
(at amortized cost) 9,500,000
-----------
(h)REPURCHASE AGREEMENT -- 2.5%
Barclays de Zoete Wedd Securities, Inc., 6.00%,
dated 2/28/1995, due 3/1/1995 (at amortized cost) 2,224,000 2,224,000
-----------
TOTAL INVESTMENTS
(identified cost, $88,273,128) $87,611,147
===========
</TABLE>
(See Notes which are an integral part of the Financial Statements)
February 28, 1995 (Unaudited)
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
INTERMEDIATE BOND FUND
<TABLE>
- ------------------------------------------------------------------------------
<CAPTION>
Principal
Description Amount Value
- ------------------------------------------------------------------------------
<S> <C> <C>
ASSET-BACKED SECURITIES -- 9.5%
American Express Master Trust, Series 1993-1, Class
A, 5.375%, 7/15/2001 $ 4,870,000 $ 4,391,376
American Express Master Trust, Series 1994-2, Class
A, 7.60%, 8/15/2002 4,655,000 4,656,455
Banc One Credit Card Master Trust, Series 1994-B,
7.55%, 12/15/1999 6,025,000 6,084,286
Ford Credit Grantor Trust, Class A, 7.30%,
10/15/1999 4,399,056 4,405,478
Green Tree Financial Corp., 8.35%, 3/15/2020 4,150,000 4,262,839
Olympic Automobile Receivables, Series 1994-A,
5.65%, 1/15/2001 4,812,588 4,706,374
Resolution Trust Corp., Series 1994-1, Class C,
7.75%, 9/25/2029 3,200,025 3,018,024
Western Financial Grantor Trust, Series 1991-3,
6.75%, 1/1/1997 319,083 319,143
------------
TOTAL ASSET-BACKED SECURITIES 31,843,975
------------
CORPORATE BONDS -- 14.0%
FINANCE-COMMODITY -- 1.5%
CRA Finance USA Ltd, 6.50%, 12/1/2003 5,530,000 4,989,553
------------
FINANCE-DIVERSIFIED -- 2.9%
Associates Corp. of North America, 6.65%, 6/16/1997 6,435,000 6,354,691
Associates Corp. of North America, 7.05%, 5/15/1997 3,535,000 3,525,067
------------
Total 9,879,758
------------
FINANCE-MISCELLANEOUS -- 2.0%
First Chicago Master Trust, Series 1994, Class L,
7.15%, 4/15/2001 6,795,000 6,731,297
------------
UTILITIES-GAS -- 1.6%
Burlington Resources, Inc., 7.15%, 5/1/1999 5,590,000 5,523,479
------------
INDUSTRIAL -- 2.7%
Hanson PLC, 7.375%, 1/15/2003 9,260,000 8,996,460
------------
POLLUTION CONTROL -- 1.4%
WMX Technologies, Inc., 8.125%, 2/1/1998 4,500,000 4,591,935
------------
TELECOMMUNICATIONS -- 0.0%
MCI Communications Corp., 6.25%, 3/23/1999 50,000 47,923
------------
</TABLE>
<TABLE>
------------------------------------------------------------------------------
<CAPTION>
Principal
Description Amount Value
------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE BONDS (Continued)
TELEPHONE UTILITIES -- 1.9%
NYNEX Capital Funding Co., Medium Term Note,
8.10%, 11/1/1999 $ 6,070,000 $ 6,176,043
------------
TOTAL CORPORATE BONDS 46,936,448
------------
MORTGAGE-BACKED SECURITIES -- 18.5%
FEDERAL HOME LOAN BANKS -- 1.7%
FHLB, 7.26%, 9/6/2001 5,810,000 5,768,865
------------
FEDERAL HOME LOAN MORTGAGE
CORP. -- 5.1%
FHLMC, 8.75%, 4/1/2001 26,907 27,495
FHLMC, 8.00%, 9/1/2009 7,331,577 7,391,146
FHLMC, 8.00%, 9/1/2024 126,270 125,480
FHLMC, 8.00%, 9/1/2024 9,644,209 9,583,836
------------
Total 17,127,957
------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION -- 1.5%
FNMA, 8.00%, 8/1/2007 4,907,441 4,928,911
------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION, REMIC -- 1.4%
FNMA, Series 1992-180, Class H, 7.00%, 10/25/2019 5,000,000 4,662,700
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 8.8%
GNMA, 6.00%, 12/15/2008 4,532,638 4,195,455
GNMA, 7.50%, 3/15/2009 4,954,264 4,907,743
GNMA, 7.50%, CMO, 10/17/2015 6,065,000 6,069,367
GNMA, 7.50%, 2/15/2023 4,347,794 4,203,708
GNMA, 7.00%, 3/15/2024 4,731,242 4,431,044
GNMA, 8.50%, 1/1/2099 TBA 5,550,000 5,655,728
------------
Total 29,463,045
------------
TOTAL MORTGAGE-BACKED SECURITIES 61,951,478
------------
U.S. TREASURY NOTES -- 55.9%
8.875%, 2/15/1996 20,300,000 20,756,953
5.50%, 4/30/1996 150,000 148,257
(d)7.625%, 4/30/1996 28,450,000 28,802,496
(d)6.125%, 7/31/1996 13,155,000 13,065,546
7.25%, 8/31/1996 19,500,000 19,668,480
7.25%, 11/30/1996 16,000,000 16,133,280
(d)7.50%, 1/31/1997 7,500,000 7,598,850
6.50%, 8/15/1997 160,000 158,774
(d)7.875%, 1/15/1998 20,265,000 20,781,352
(d)7.25%, 2/15/1998 10,100,000 10,194,839
5.25%, 7/31/1998 200,000 189,660
(d)6.75%, 6/30/1999 24,530,000 24,260,906
7.25%, 8/15/2004 170,000 170,185
(d)7.50%, 2/15/2005 24,775,000 25,263,315
------------
TOTAL U.S. TREASURY NOTES 187,192,893
------------
(e)COLLATERAL FOR SECURITIES
LENDING -- 24.8%
Banc One, 6.1375%, 3/27/1995 1,530,425 1,530,425
Beta Finance, 6.02%, 3/7/1995 3,750,000 3,750,000
</TABLE>
(See Notes which are an integral part of the Financial Statements)
[ ] MARSHALL FUNDS
- --------------------------------------------------------------------------------
INTERMEDIATE BOND FUND (continued)
<TABLE>
----------------------------------------------------------------------------
<CAPTION>
Principal
Description Amount Value
----------------------------------------------------------------------------
<S> <C> <C>
COLLATERAL FOR SECURITIES
LENDING (Continued)
CAFCO, 6.10%, 3/1/1995 $15,000,000 $ 14,997,458
Carco Auto Loan Master Trust, 6.186%, 3/15/1995 3,750,000 3,748,828
Donaldson, Lufkin & Jenrette Securities Corp.,
6.375%, 3/1/1995 6,250,000 6,250,000
Federal, 6.20%, 3/1/1995 3,750,000 3,750,000
General Electric, 4.716%, 5/5/1995 1,250,000 1,250,000
GMAC, 6.059%, 3/1/1995 7,875,000 7,875,000
Goldman, Sachs & Co., 6.063%, 3/1/1995 8,347,765 8,347,765
J.P. Morgan Securities, Inc., 6.10%, 3/1/1995 6,750,000 6,750,000
Philip Morris Companies, 6.10%, 3/1/1995 15,000,000 14,997,458
Premier Auto Trust, 6.16%, 3/1/1995 2,584,115 2,584,115
Premier Auto Trust, 6.275%, 3/15/1995 331,220 331,220
Republic, 6.375%, 3/1/1995 1,250,000 1,250,000
Sears, 6.01%, 3/7/1995 3,750,000 3,750,000
Temp Cash, 6.051%, 3/1/1995 2,005,812 2,005,812
------------
TOTAL COLLATERAL FOR SECURITIES LENDING 83,168,081
------------
(b)REPURCHASE AGREEMENT -- 3.1%
Barclays de Zoete Wedd Securities, Inc., 6.00%,
dated 2/28/1995, due 3/1/1995 (at amortized
cost) 10,425,000 10,425,000
------------
TOTAL INVESTMENTS
(identified cost, $423,671,969) $421,517,875
============
</TABLE>
- --------------------------------------------------------------------------------
GOVERNMENT INCOME FUND
<TABLE>
- ---------------------------------------------------------------------
<CAPTION>
Principal
Description Amount Value
- ---------------------------------------------------------------------
<S> <C> <C>
LONG-TERM INVESTMENTS -- 99.8%
FEDERAL HOME LOAN MORTGAGE CORP. -- 9.0%
6.00%, 4/15/2019 $ 400,000 $ 365,072
6.50%, 6/1/2014 3,005,978 2,817,112
7.00%, 2/1/2024 2,317,464 2,189,980
7.50%, 1/1/2020 848,566 836,092
8.75%, 4/1/2001 175,481 179,317
9.00%, 5/1/2017 885,241 912,896
9.50%, 2/1/2001 21,947 22,783
10.50%, 10/1/2000 38,108 39,870
-----------
Total Federal Home Loan Mortgage Corp.
(identified cost, $7,604,656) 7,363,122
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 42.1%
5.60%, 8/25/2012, REMIC (Series 1993-169-D) 500,000 472,705
6.25%, 2/25/2007 2,000,000 1,850,580
6.50%, 2/1/2024 4,573,176 4,187,246
7.00%, 10/25/2019, REMIC (Series 1992-180-H) 2,000,000 1,865,080
7.00%, 5/1/2024 3,040,602 2,869,538
7.50%, 5/1/2023 1,456,101 1,411,938
7.50%, 5/1/2024 1,888,898 1,831,608
7.50%, 11/1/2024 3,052,261 2,959,686
7.50%, TBA 5,000,000 4,846,875
8.00%, 8/1/2007 2,825,995 2,838,358
8.00%, 6/1/2014 1,925,159 1,917,343
8.00%, 5/1/2023 1,633,038 1,620,774
8.50%, 6/1/2021 1,502 1,523
8.50%, 12/1/2024 5,444,545 5,514,236
-----------
Total Federal National Mortgage Association
(identified cost, $33,990,141) 34,187,490
-----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 46.0%
6.00%, 12/15/2008 1,867,179 1,728,280
6.50%, 3/15/2024 1,009,804 913,540
7.00%, 3/15/2009 1,983,254 1,923,102
7.00%, 2/15/2024 2,934,492 2,748,298
7.00%, 3/15/2024 972,745 911,024
7.50%, 3/15/2009 1,886,227 1,868,515
7.50%, 10/17/2015, CMO 1,500,000 1,501,080
7.50%, 11/15/2022 2,251,682 2,177,062
7.50%, 6/15/2023 2,411,809 2,331,881
7.50%, 9/15/2023 1,956,169 1,891,341
8.00%, 8/15/2018 154,304 153,819
8.00%, 12/15/2021 152,937 152,457
8.00%, 1/15/2022 175,935 175,383
8.00%, 1/15/2022 624,203 622,243
8.00%, 6/15/2022 681,804 679,663
8.00%, 7/15/2022 151,736 151,260
8.00%, 5/15/2023 846,073 840,243
8.00%, 12/15/2023 474,850 471,579
8.00%, 7/15/2024 2,009,632 1,995,786
8.50%, 4/15/2021 650,098 662,483
8.50%, TBA 1,000,000 1,019,050
9.00%, 7/15/2009 2,115,042 2,200,278
9.00%, 7/15/2009 2,157,620 2,244,572
9.00%, 5/15/2016 118,532 123,309
9.00%, 7/15/2016 190,679 198,364
9.00%, 8/15/2016 252,578 262,756
9.00%, 12/15/2016 141,258 146,951
9.00%, 1/15/2017 151,986 158,111
9.00%, 7/15/2017 100,005 104,035
</TABLE>
(See Notes which are an integral part of the Financial Statements)
February 28, 1995 (Unaudited)
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
----------------------------------------------------------------------------
<CAPTION>
Principal
Description Amount Value
----------------------------------------------------------------------------
<S> <C> <C>
LONG-TERM INVESTMENTS (Continued)
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (Continued)
9.00%, TBA $4,900,000 $ 5,079,095
9.50%, 7/15/2019 698,073 738,421
10.00%, 11/15/2020 929,740 999,461
10.50%, 10/15/2000 36,142 38,694
10.50%, 10/15/2000 53,823 57,624
11.00%, 11/15/2000 68,697 74,062
-----------
Total Government National Mortgage Association
(identified cost, $37,382,352) 37,343,822
-----------
U.S. TREASURY BONDS -- 2.7%
8.00%, 11/15/2021 1,000,000 1,042,187
8.75%, 5/15/2017 1,000,000 1,122,140
-----------
Total U.S. Treasury Bonds
(identified cost, $2,156,329) 2,164,327
-----------
TOTAL LONG-TERM INVESTMENTS
(identified cost, $81,133,478) 81,058,761
-----------
(h)REPURCHASE AGREEMENT -- 9.7%
Barclays de Zoete Wedd Securities, Inc., 6.00%,
dated 2/28/1995, due 3/1/1995 (at amortized cost) 7,870,000 7,870,000
-----------
TOTAL INVESTMENTS
(identified cost, $89,003,478) $88,928,761
===========
</TABLE>
- --------------------------------------------------------------------------------
SHORT-TERM TAX-FREE FUND
<TABLE>
- -------------------------------------------------------------------------------
<CAPTION>
Principal Credit
Description Amount Ratings(a) Value
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG-TERM MUNICIPAL SECURITIES -- 96.0%
ALASKA -- 5.1%
Alaska Municipal Bond Bank Authority, 6.75%
(Series 1990B)/ (MBIA Insured), 7/1/1995 $ 500,000 A $ 504,075
Alaska Municipal Bond Bank Authority, 4.20%
(Series A)/(MBIA Insured), 6/1/1996 300,000 A 297,072
Fairbanks North Star Boro, AK, 4.00% (MBIA
Insured), 3/1/1996 300,000 AAA 297,153
----------
Total 1,098,300
----------
ARIZONA -- 8.4%
Arizona St. Transportation Board (Maricopa
County), AZ, 7.10% Revenue Bonds, 7/1/1996 750,000 A+ 775,268
Mesa, AZ, 7.125% UT GO Bonds, 7/1/1999,
Prerefunded 7/1/1996 @ 102 300,000 A+ 315,390
Scottsdale, AZ, 5.40% Special Assessment
Bonds, (No. I3704 Bell Road), 1/1/1999 700,000 A 704,249
----------
Total 1,794,907
----------
CALIFORNIA -- 2.4%
California State, 5.75% Warrants, (Series C),
4/25/1996 500,000 Sp1 504,700
----------
CONNECTICUT -- 3.3%
Enfield, CT, 5.25% UT GO Bonds, 5/15/1996 700,000 AA 704,347
----------
DISTRICT OF COLUMBIA -- 1.0%
District of Columbia, 7.875% UT GO Bonds,
(Series A)/ (BIGI Insured), 6/1/2006 200,000 AAA 211,526
----------
FLORIDA -- 1.4%
Polk County, FL, 4.20% School Board,
Certificates of Participation, (Series
A)/(FSA Insured), 1/1/1997 300,000 AAA 295,251
----------
ILLINOIS -- 6.0%
Cook County, IL, 4.85% UT GO Bonds, School
District 211, 12/1/1996 1,000,000 Aa1 999,430
Winnebago & Boone Counties, IL, 4.20% School
District, (FGIC Insured), 2/1/1996 300,000 AAA 298,158
----------
Total 1,297,588
----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
[ ] MARSHALL FUNDS
- --------------------------------------------------------------------------------
SHORT-TERM TAX-FREE FUND (CONTINUED)
<TABLE>
------------------------------------------------------------------------------
<CAPTION>
Principal Credit
Description Amount Ratings(a) Value
------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG-TERM MUNICIPAL SECURITIES (Continued)
IOWA -- 5.8%
LeClaire, IA, 4.125% Electric Revenue
Bonds, 9/1/2026, Mandatory Put 9/1/1996 $1,250,000 Sp1+ $1,242,450
----------
MAINE -- 1.2%
Maine Municipal Bond Bank, 5.00% (Series
B), 11/1/1996 250,000 AA 251,438
----------
MARYLAND -- 2.4%
Maryland State Department of
Transportation, 6.60% Revenue Bonds,
11/15/1997 500,000 AA 520,740
----------
MASSACHUSETTS -- 2.4%
New England Educational Loan Marketing
Corp., MA, 6.60% Student Loan Revenue
Bonds, 9/1/2002 500,000 A 523,690
----------
MISSISSIPPI -- 4.7%
Raleigh, MS, 6.00% Urban Renewal Revenue
Bonds, (Phase II Redevelopment Project),
12/5/2017, Mandatory Put 12/5/1997 1,000,000 Sp1+ 1,016,030
----------
NEBRASKA -- 4.7%
Nebraska Public Power District, 4.90%
Revenue Bonds, (Nuclear Facility),
7/1/1998 1,000,000 A+ 1,001,440
----------
NEVADA -- 3.5%
Clark County, NV, 5.40% LT GO Bonds, (Flood
Control)/ (AMBAC Insured), 11/1/1996 750,000 AAA 757,357
----------
PUERTO RICO -- 4.7%
Puerto Rico Municipal Finance Agency, 5.10%
Revenue Bonds, (Series A)/(FSA Insured),
7/1/2000 1,000,000 AAA 1,004,080
----------
SOUTH CAROLINA -- 2.4%
Charleston, SC, 6.10% UT GO Bonds, 6/1/1998 500,000 AA 516,785
----------
TENNESSEE -- 2.4%
Metropolitan Govt. Nashville & Davidson
County, TN, 7.00% UT GO Bonds, 6/15/1997 500,000 AA 521,720
----------
</TABLE>
<TABLE>
------------------------------------------------------------------------------
<CAPTION>
Principal
Amount Credit
Description or Shares Ratings(a) Value
------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG-TERM MUNICIPAL SECURITIES (Continued)
TEXAS -- 4.8%
Port Houston Authority, TX, 3.20% (Series
1993), 10/1/1995 $ 300,000 AA $ 299,028
San Antonio, TX, 4.30% Electric & Gas
Revenue, 2/1/1996 200,000 AA 199,260
Texas State, 7.50% UT GO Bonds, (Series
B), 10/1/1997 500,000 AA 528,375
-----------
Total 1,026,663
-----------
VIRGINIA -- 4.7%
Virginia State Housing Development
Authority, 6.15% Revenue Bonds, (Series
A), 7/1/2000 1,000,000 AA+ 1,019,370
-----------
WASHINGTON-- 3.7%
King County, WA, 4.00% School District 210
(FGIC Insured), 12/1/1996 300,000 AAA 294,570
Marysville, WA, 4.20% Water & Sewer
Revenue Bonds, (MBIA Insured), 12/1/1996 200,000 AAA 199,394
Washington State Refunding, 3.85% (Series
R), 10/1/1996 300,000 AA 292,218
-----------
Total 786,182
-----------
WISCONSIN-- 21.0%
Milwaukee, WI, 5.00% UT GO Bonds, (Area
Technical College District)/(Series B),
6/1/1997 1,000,000 Aa 1,003,480
New Richmond, WI, School District, 4.75%,
11/1/1995 1,000,000 NR 1,001,150
West Bend, WI, 5.75% UT GO Bonds, School
District No. 1, 4/1/1997 720,000 A1 734,407
Wisconsin Housing & Economic Development
Authority, 6.00% Revenue Bonds, (Series
A), 11/1/2000 1,000,000 A1 1,030,760
Wisconsin State, 4.50% UT GO Bonds,
(Series 1), 11/1/1997 750,000 AA 736,020
-----------
Total 4,505,817
-----------
TOTAL LONG-TERM MUNICIPAL SECURITIES
(identified cost, $20,618,437) 20,600,381
-----------
MUTUAL FUND SHARES -- 2.5%
Fidelity Tax Exempt Money Market 346,839 346,839
</TABLE>
(See Notes which are an integral part of the Financial Statements)
February 28, 1995 (Unaudited)
PORTFOLIO OF INVESTMENTS
<TABLE>
------------------------------------------------------------------------------
<CAPTION>
Credit
Description Shares Ratings(a) Value
------------------------------------------------------------------------------
<S> <C> <C> <C>
MUTUAL FUND SHARES (Continued)
Goldman Sachs Financial Square Tax Exempt
Money Market 191,854 $ 191,854
-----------
TOTAL MUTUAL FUND SHARES (at net asset value) 538,693
-----------
TOTAL INVESTMENTS
(identified cost,
$21,157,130) $21,139,074
===========
</TABLE>
- --------------------------------------------------------------------------------
INTERMEDIATE TAX-FREE FUND
<TABLE>
------------------------------------------------------------------------------
<CAPTION>
Principal Credit
Description Amount Ratings(a) Value
------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG-TERM MUNICIPAL SECURITIES -- 93.6%
ARIZONA -- 6.8%
Arizona State Wastewater Management
Authority, 5.60%, 7/1/1997 $1,000,000 AA+ $1,021,440
Maricopa County, AZ, 6.00% Refunding UT GO
Bonds, (Series A), Community College
District, 7/1/2006, Callable 7/1/2003 @
101 1,000,000 AA 1,031,560
Maricopa County, AZ, School District, 6.75%
(District No. 48 Scottsdale Improvement),
7/1/2010, Prerefunded 7/1/2001 @ 101 500,000 NR 544,840
----------
Total 2,597,840
----------
ARKANSAS -- 0.1%
North Slope Boro, AK, 7.50% (Series
C)/(AMBAC Insured), 6/30/1997 50,000 AAA 52,571
----------
CALIFORNIA -- 7.2%
Arroyo Grande, CA, 10.375% ETM,
Certificates of Participation, (Series A),
11/1/2000, Subject to Mandatory Sinking
Fund 11/1/1995 75,000 AAA 88,439
Corona, CA, 10.375% ETM, Certificates of
Participation, (Series B), 11/1/2000,
Subject to Mandatory Sinking Fund
11/1/1995 105,000 AAA 123,815
Sacramento, CA, School Insurance Authority,
5.70% Revenue Bonds, (Liability Program)/
(Series D), 6/1/2003 1,500,000 A- 1,481,460
Tehachapi, CA, Special Tax Assessment,
7.40% Community Facilities District No.
89-1, 10/1/2014, Prerefunded 10/1/1999 @
103 1,000,000 NR 1,118,610
----------
Total 2,812,324
----------
COLORADO -- 1.2%
Jefferson County, CO, School District,
4.10% (Series A), 12/15/1999 250,000 AA 227,418
Thornton, CO, 5.65% (FGIC Insured),
12/1/2003, Callable 12/1/2002 @ 101 250,000 AAA 256,030
----------
Total 483,448
----------
CONNECTICUT -- 5.8%
Connecticut State, 5.80% (Series B),
11/15/1999 750,000 AA- 774,105
</TABLE>
(See Notes which are an integral part of the Financial Statements)
[ ] MARSHALL FUNDS
- --------------------------------------------------------------------------------
INTERMEDIATE TAX-FREE FUND (CONTINUED)
<TABLE>
------------------------------------------------------------------------------
<CAPTION>
Principal Credit
Description Amount Ratings(a) Value
------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG-TERM MUNICIPAL SECURITIES (Continued)
CONNECTICUT (Continued)
Connecticut State, 6.00% (Series B),
11/15/2001 $ 150,000 AA- $ 156,092
Enfield, CT, 5.25% UT GO Bonds, 5/15/1996 1,000,000 AA 1,006,210
South Central, CT, Regional Water
Authority, 5.40% (Water System)/(FGIC
Insured), 8/1/2002 300,000 AAA 303,078
----------
Total 2,239,485
----------
DELAWARE -- 0.1%
Delaware State, 6.85%, 5/1/2000 50,000 AA+ 53,751
----------
DISTRICT OF COLUMBIA -- 1.2%
District of Columbia, 7.00% (BIGI Insured),
6/1/1998, Callable 6/1/1996 @ 102 175,000 AAA 181,853
District of Columbia, 7.70% Refunding
Revenue Bonds, (Series A)/(BIGI Insured),
6/1/1998, Callable 6/1/1996 @ 102 75,000 AAA 78,555
District of Columbia, 7.75%, 6/1/2004,
Prerefunded 6/1/1996
@ 102 200,000 A- 210,982
----------
Total 471,390
----------
HAWAII -- 1.9%
Hawaii State, 5.25% (Series BZ), 10/1/2000 750,000 AA 751,762
----------
ILLINOIS -- 5.8%
Du Page County, IL, 6.15% UT GO Revenue
Bonds, (Jail Project), 1/1/2003,
Prerefunded 1/1/2002 @ 102 1,000,000 AAA 1,064,970
Illinois Development Finance Authority,
5.35% Small Business Pollution Control
Refunding Revenue Bonds, (American Fly Ash
Co. Project), 9/1/2000, Callable 6/1/1995
@ 102 55,000 NR 55,559
Waukegan, IL, 6.40% UT GO Bonds, (MBIA
Insured), 12/30/2004, Callable 12/30/2002
@ 100 1,085,000 AAA 1,142,722
----------
Total 2,263,251
----------
LOUISIANA -- 2.8%
Louisiana Public Facility Revenue
Authority, 6.75% Refunding Revenue Bonds,
(Student Loan)/(Series A-2), 9/1/2006,
Callable 9/1/2002 @ 102 1,000,000 AAA 1,026,720
</TABLE>
<TABLE>
------------------------------------------------------------------------------
<CAPTION>
Principal Credit
Description Amount Ratings(a) Value
------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG-TERM MUNICIPAL SECURITIES (Continued)
LOUISIANA (Continued)
Louisiana Public Facility Revenue
Authority, 7.30%, 12/1/2015, Mandatory Put
6/1/1997 $ 50,000 A- $ 52,472
----------
Total 1,079,192
----------
MAINE -- 0.2%
Maine Municipal Bond Bank, 7.10% (Series
B), 11/1/1999 75,000 A+ 81,391
----------
MARYLAND -- 0.6%
Maryland State, 4.90% (State & Local Loan
Facilities Second Series), 10/15/2003 250,000 AAA 238,000
----------
MASSACHUSETTS -- 10.7%
Massachusetts State Health and Educational
Facilities Authority, 6.00% Revenue Bonds,
(Daughters of Charity National Health
System for the Carney Hospital)/(Series
D), 7/1/2009 1,500,000 AA- 1,491,300
Massachusetts State, 5.50% (FGIC Insured),
8/1/2005, Callable 8/1/2004 @ 102 1,500,000 AAA 1,497,555
Massachusetts State, 7.10% (Cons. Ln.
Series A)/(MBIA Insured), 2/1/1997 50,000 AAA 51,951
Massachusetts State, 7.10% (Series A)/(FGIC
Insured), 2/1/1998 50,000 AAA 52,771
New England Education Loan Marketing Corp.,
MA, 6.60% Student Loan Revenue Bonds,
(Series F), 9/1/2002 1,000,000 A 1,047,380
----------
Total 4,140,957
----------
MISSISSIPPI -- 2.7%
Mississippi River Bridge Authority, 6.625%
Revenue Bonds, 11/1/2006, Callable
11/1/2002 @ 102 1,000,000 A- 1,066,300
----------
MISSOURI -- 2.8%
Missouri State Environmental Improvement
and Energy Resource Authority, 6.65% Water
Pollution Control Revenue Bonds, (State
Revolving Fund Program)/(Series B),
7/1/2006, Callable 7/1/2004 @ 102 1,000,000 AA 1,092,620
----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
February 28, 1995 (Unaudited)
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Credit
Description Amount Ratings(a) Value
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG-TERM MUNICIPAL SECURITIES (Continued)
NEBRASKA -- 5.2%
Nebraska Higher Education Loan Program,
6.65% Revenue Bonds, (Sr. Sub.
Lien)/(Series A-5), 6/1/2008 $1,000,000 AA $1,031,940
Nebraska Public Power District Revenue
Bonds, 4.90% (Nuclear Facility), 7/1/1998 1,000,000 A+ 1,001,440
----------
Total 2,033,380
----------
NEVADA -- 2.3%
Clark County, NV, 5.20% (AMBAC Insured),
11/1/1995 150,000 AAA 150,732
Clark County, NV, School District, 5.00%
(FGIC Insured), 5/1/2001 750,000 AAA 735,187
----------
Total 885,919
----------
NEW JERSEY -- 1.5%
Burlington County, NJ, 4.50% Refunding
Revenue Bonds, (Series A), 3/15/2002 150,000 AA 140,442
Burlington County, NJ, 4.60% Refunding
Revenue Bonds, (Series A), 3/15/2003 200,000 AA 186,110
New Jersey State, 6.25%, 9/15/2000 250,000 AA+ 263,312
----------
Total 589,864
----------
NORTH CAROLINA -- 2.0%
North Carolina Eastern Municipal Power
Authority, 7.40% (Series A), 1/1/1999,
Callable 1/1/1996
@ 103 750,000 A- 782,910
----------
OHIO -- 6.4%
Columbus, OH, 4.90% GO Bonds, 9/15/2001 1,000,000 AA+ 976,550
Mahoning County, OH, 5.70% (MBIA Insured),
12/1/2005 1,500,000 AAA 1,530,015
----------
Total 2,506,565
----------
PUERTO RICO -- 4.8%
Puerto Rico Municipal Finance Agency, 5.10%
Revenue Bonds, (Series A)/(FSA Insured),
7/1/2000 1,500,000 AAA 1,506,120
</TABLE>
<TABLE>
-------------------------------------------------------------------------------
<CAPTION>
Principal Credit
Description Amount Ratings(a) Value
-------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG-TERM MUNICIPAL SECURITIES (Continued)
PUERTO RICO (Continued)
Puerto Rico Public Building Authority, 6.10%
Refunding Revenue Bonds, (Series K),
7/1/2002 $ 250,000 AAA $ 265,712
Puerto Rico Public
Building
Authority, 6.90%
Refunding Revenue
Bonds, (Series
I)/(FGIC Insured),
7/1/2000 100,000 AAA 108,474
----------
Total 1,880,306
----------
TEXAS -- 4.3%
Austin, TX,
Utilities System
Revenue, 7.30%
(Series A)/ (FGIC
Insured),
11/15/1997 200,000 AAA 211,522
Dallas/Ft. Worth,
TX, Regional
Airport, 5.875%
(Long Opt.
Period)/(Series A
CR 104),
11/1/2006,
Optional Put
5/1/1998 @ 100 100,000 AAA 102,501
El Paso, TX, ISD,
7.50% PSF Gtd.,
8/15/2000 700,000 AAA 777,133
Montgomery County,
TX, Hospital
District, 6.625%
Refunding Revenue
Bonds, (Series
B)/(FSA Insured),
4/1/2017,
Prerefunded
4/1/2002 @ 102 500,000 AAA 548,620
----------
Total 1,639,776
----------
VIRGIN ISLANDS --
0.4%
Virgin Islands
Public Finance
Authority, 7.30%
Revenue Bonds,
(Series A),
10/1/2018,
Prerefunded
10/1/2000 @ 101 125,000 AAA 140,086
----------
VIRGINIA -- 6.5%
Virginia Beach, VA,
4.00% Refunding
Public Improvement
Bonds, 11/1/1996 500,000 AA 491,215
Virginia Beach, VA,
4.30%, 11/1/1997 500,000 AA 488,720
Virginia State
Housing
Development
Authority, 6.40%
Revenue Bonds,
(Commonwealth
Mortgage)/(Series
A), 7/1/2002 1,500,000 AA+ 1,537,620
----------
Total 2,517,555
----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
[ ] MARSHALL FUNDS
- --------------------------------------------------------------------------------
INTERMEDIATE TAX-FREE FUND (CONTINUED)
<TABLE>
------------------------------------------------------
<CAPTION>
Principal Credit
Description Amount Ratings(a) Value
------------------------------------------------------
<S> <C> <C> <C>
LONG-TERM MUNICIPAL SECURITIES
(Continued)
WASHINGTON -- 1.1%
Spokane, WA, 6.70%
UT Bonds,
1/1/1999, Callable
1/1/1998 @ 100 $ 50,000 AA $ 52,030
Washington State
Public Power
Supply, 7.00%
Refunding Revenue
Bonds, (Series B)/
(FGIC Insured),
7/1/1999 50,000 AAA 53,197
Washington State
Public Power
Supply, 7.10%
(Series B),
7/1/2000 100,000 AA 106,615
Washington State,
4.75% Refunding
Bonds, (Series
R92C), 9/1/1996 160,000 AA 159,658
Washington State,
8.00%, 10/1/1995 60,000 AA 61,118
----------
Total 432,618
----------
WEST VIRGINIA --
0.1%
Monongalia County,
WV, Education
Board, 6.80% (MBIA
Insured), 4/1/1999 50,000 AAA 52,934
----------
WISCONSIN -- 9.1%
Appleton, WI, Sewer
Revenue Bonds,
3.95% BAN,
10/1/1995 170,000 MIG1 169,498
Wisconsin Housing
and Economic
Development
Authority, 6.00%
Refunding Revenue
Bonds, (Series A),
11/1/2000 1,000,000 A1 1,030,760
Wisconsin State
Health & Education
Authority, 7.20%
(Authority
Revenue)/ (FGIC
Insured), 8/1/1997 50,000 AAA 52,386
Wisconsin State
Health & Education
Authority, 7.20%
Community Provider
Program, (Series
A)/ (FGIC
Insured),
1/15/2001 50,000 AAA 53,850
Wisconsin State
Health &
Educational
Facilities
Authority, 5.10%
Revenue Bonds,
(Froedtert
Memorial Lutheran
Hospital)/ (Series
A)/(MBIA Insured),
10/1/2002 1,500,000 AAA 1,455,975
</TABLE>
<TABLE>
------------------------------------------------------------------------------
<CAPTION>
Principal
Amount or Credit
Description Shares Ratings(a) Value
------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG-TERM MUNICIPAL SECURITIES (Continued)
WISCONSIN (Continued)
Wisconsin State Transportation Revenue
Bonds, 5.00% (Series B), 7/1/2000 $ 750,000 A1 $ 750,982
-----------
Total 3,513,451
-----------
TOTAL LONG-TERM MUNICIPAL SECURITIES
(identified cost, $36,459,795) 36,399,646
-----------
SHORT-TERM MUNICIPAL SECURITIES -- 3.7%
GEORGIA -- 1.0%
Georgia State, 3.10% Refunding UT GO Bonds,
(Series E), 7/1/1995 400,000 AAA 397,932
-----------
PENNSYLVANIA -- 0.1%
Washington County, PA, Industrial
Development, 6.12% (Fltg. Rate, Hercules,
Inc. Project), 8/9/1995 45,000 NR 45,000
-----------
WISCONSIN -- 2.6%
New Richmond, WI, School District 4.73%
TRANs, 11/1/1995 1,000,000 NR 1,001,020
-----------
TOTAL SHORT-TERM MUNICIPAL SECURITIES
(identified cost, $1,445,648) 1,443,952
-----------
MUTUAL FUND SHARES -- 0.7%
Fidelity Tax Exempt Money Market 250,169 250,169
Goldman Sachs Financial Square Tax Exempt
Money Market 22,797 22,797
-----------
Total (at net asset
value) 272,966
-----------
TOTAL INVESTMENTS (identified cost,
$38,178,409) $38,116,564
===========
</TABLE>
(See Notes which are an integral part of the Financial Statements)
February 28, 1995 (Unaudited)
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
MONEY MARKET FUND
<TABLE>
------------------------------------------------------------------------------
<CAPTION>
Principal
Description Amount Value
------------------------------------------------------------------------------
<S> <C> <C>
(f)COMMERCIAL PAPER -- 61.4%
ASSET-BACKED -- 9.7%
Corporate Asset Funding Corp., 5.92%, 3/6/95 $15,000,000 $ 14,987,667
Corporate Receivables Corp., 5.95%-6.12%, 3/1/95-
4/19/95 51,450,000 51,182,900
Preferred Receivables Funding Corp., 6.00%-6.12%,
3/20/95-4/19/95 37,025,000 36,819,848
------------
Total 102,990,415
------------
BANKING -- 2.3%
Bankers Trust N.Y. Corp., 6.00%, 5/25/95 25,000,000 24,645,833
------------
CHEMICALS -- 6.4%
Monsanto Co., 6.02%-6.12%, 4/17/95-7/17/95 50,700,000 49,981,137
Siemans Corp., 6.09%, 5/9/95 10,000,000 9,883,275
U.S. Borax., 6.17%, 5/2/95 7,800,000 7,717,116
------------
Total 67,581,528
------------
FINANCE-AUTOMOTIVE -- 4.6%
Ford Motor Credit Co., 6.04%-6.06%, 4/24/95-
6/9/95 50,000,000 49,353,306
------------
FINANCE-COMMERCIAL -- 9.1%
American Express Credit Corp., 6.02%, 5/25/95 15,000,000 14,786,792
General Electric Credit Corp., 6.23%-6.25%,
6/8/95-7/3/95 27,500,000 26,941,916
Hanson Finance PLC, 6.00%, 4/17/95 20,000,000 19,843,333
Sears Roebuck Acceptance Corp., 6.05%, 4/7/95 20,000,000 19,875,639
Whirlpool Financial Corp., 6.03%, 3/15/95 15,000,000 14,964,825
------------
Total 96,412,505
------------
FOOD AND BEVERAGES -- 11.7%
Coca-Cola Enterprises, Inc., 5.85%-6.30%,
3/13/95-4/18/95 50,450,000 50,189,676
Nestles Capital Corp., 5.83%, 3/20/95 20,000,000 19,938,461
Phillip Morris., 5.82%, 3/14/95 20,000,000 19,957,967
Seagram (Joseph E.) & Sons, Inc., 6.03%-6.15%,
4/17/95-5/1/95 35,154,000 34,826,283
------------
Total 124,912,387
------------
LEASING -- 2.9%
International Lease Finance Corp., 5.92%-6.05%,
3/17/95-4/4/95 31,425,000 31,311,490
------------
MINING -- 3.0%
Arco Coal Australia, 6.15%-6.27%, 4/06/95-5/3/95 32,711,000 32,434,404
------------
</TABLE>
<TABLE>
- -----------------------------------------------------------------------------
<CAPTION>
Principal
Description Amount Value
- -----------------------------------------------------------------------------
<S> <C> <C>
(f)COMMERCIAL PAPER (Continued)
MOVIES & ENTERTAINMENT -- 4.3%
MCA Funding Corp., 6.15%-6.23%, 5/2/95-6/12/95 $46,325,000 $ 45,678,904
-------------
RAILWAYS -- 2.7%
Union Pacific Corp., 6.05%-6.07%, 4/25/95-5/3/95 29,000,000 28,712,639
-------------
RETAIL -- 4.7%
Dayton Hudson Corp., 6.04%-6.05%, 3/21/95-4/24/95 50,375,000 50,097,098
-------------
TOTAL COMMERCIAL PAPER 654,130,509
-------------
(g)VARIABLE RATE NOTES -- 34.0%
ASSET-BACKED -- 1.1%
Beta Finance, Inc., 6.12%, 11/8/95 12,000,000 12,000,000
-------------
BANKING -- 4.2%
Abbey National N.A. Corp., 6.04%-6.16%, 4/27/95-
5/9/95 45,000,000 44,704,833
-------------
BROKERS/DEALERS -- 10.8%
Bear, Stearns & Co., Inc., 6.21%, 2/7/96 15,000,000 15,000,000
Donaldson, Lufkin, & Jenrette Securities Corp.,
6.38%, 3/1/9 50,000,000 50,000,000
J.P. Morgan Securities, Inc., 6.23%, 3/1/95 50,000,000 50,000,000
-------------
Total 115,000,000
-------------
FINANCE-AUTOMOTIVE -- 3.8%
General Motors Acceptance Corp., 6.06%, 3/1/95 $40,000,000 40,000,000
-------------
FOOD AND BEVERAGES -- 3.7%
PepsiCo, Inc., 6.04%-6.23%, 4/13/95-6/1/95 40,000,000 39,681,577
-------------
GOVERNMENT AGENCY -- 3.4%
Student Loan Marketing Association, 6.06%-6.12%,
7/19/96-12/20/96 35,585,000 35,587,510
-------------
INSURANCE -- 5.6%
Commonwealth Life Insurance Co., 6.47%, 3/1/95 40,000,000 40,000,000
Transamerica Life Insurance Co., 6.20%, 3/1/95 20,000,000 20,000,000
-------------
Total 60,000,000
-------------
UTILITIES -- 1.4%
Wisconsin Gas Co., 6.03%, 3/1/95 4,999,000 4,999,000
Wisconsin Public Service Corp., 5.99%, 3/1/95 10,000,000 10,000,000
-------------
Total 14,999,000
-------------
TOTAL VARIABLE RATE NOTES 361,972,920
-------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
[ ] MARSHALL FUNDS
- --------------------------------------------------------------------------------
MONEY MARKET FUND (CONTINUED)
<TABLE>
------------------------------------------------------------------------------
<CAPTION>
Principal
Description Amount Value
------------------------------------------------------------------------------
<S> <C> <C>
(h)REPURCHASE AGREEMENT -- 4.8%
Barclays de Zoete Wedd Securities, Inc., 6.00%,
dated 2/28/95, due 3/1/95
(at amortized cost) $51,474,000 $ 51,474,000
--------------
TOTAL INVESTMENTS,
(at amortized cost and value) $1,067,577,429
==============
</TABLE>
(See Notes which are an integral part of the Financial Statements)
NOTES TO PORTFOLIOS OF INVESTMENTS
(a) Please refer to the Statement of Additional Information for an explanation
of the credit ratings. Current credit ratings are unaudited.
(b) The repurchase agreements are fully collateralized by U.S. government
and/or agency obligations based on market prices at the date of the
portfolio.
(c) Non-income producing.
(d) Certain shares on loan to broker.
(e) Shares purchased with proceeds from securities on loan to brokers.
(f) Each issue shows the rate of discount at the time of purchase.
(g) Current rate and next demand date shown.
(h) The repurchase agreements are fully collateralized by U.S. Treasury
obligations based on market prices at the date of the portfolio.
The following abbreviations are used in these portfolios:
- --------------------------------------------------------------------------------
ADR -- American Depositary Receipts GNMA -- Government National Mortgage
Association
AMBAC -- American Municipal Bond GO -- General Obligation
Assurance Corporation
BAN -- Bond Anticipation Note ISD -- Independent School District
BIGI -- Bond Investors Guaranty Insurance LT -- Limited Tax
CMO -- Collateralized Mortgage Obligations MBIA -- Municipal Bond Investors
Assurance
ETM -- Escrowed to Maturity RANs -- Revenue Anticipation Notes
FGIC -- Financial Guaranty Insurance REMIC -- Real Estate Mortgage
Company Investment Conduit
FHLMC -- Federal Home Loan Mortgage TBA -- To Be Announced
Corporation
FNMA -- Federal National Mortgage TRANs -- Tax Revenue Anticipation
Association Notes
FSA -- Financial Security Assurance UT -- Unlimited Tax
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COST OF NET UNREALIZED GROSS GROSS
INVESTMENTS APPRECIATION/ UNREALIZED UNREALIZED
FOR DEPRECIATION APPRECIATION DEPRECIATION TOTAL
FEDERAL TAX FOR FEDERAL FOR FEDERAL FOR FEDERAL NET
MARSHALL FUNDS PURPOSES TAX PURPOSES TAX PURPOSES TAX PURPOSES ASSETS**
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Stock Fund $ 219,260,602 $15,687,510 $25,475,401 ($9,787,891) $ 234,279,290
Value Equity Fund 249,570,908 (4,050,855) 6,854,092 (10,904,947) 205,499,966
Equity Income Fund 73,912,494 2,351,612 3,594,775 (1,243,163) 76,023,927
Mid-Cap Stock Fund 77,503,518 3,478,049 5,234,537 (1,756,488) 79,192,664
Short-Term Income Fund 88,273,128 (661,981) 117,848 (779,829) 87,813,937
Intermediate Bond Fund 423,671,969 (2,154,094) 2,374,144 (4,528,238) 421,517,875
Government Income Fund 89,003,478 (74,717) 1,052,876 (1,127,593) 81,197,656
Short-Term Tax-Free Fund 21,157,130 (18,056) 105,171 (123,227) 21,453,929
Intermediate Tax-Free 38,178,409 (61,845) 364,869 (426,714) 38,892,468
Fund
Money Market Fund 1,067,577,429* 0 0 0 1,064,421,198
</TABLE>
* At amortized cost.
**The categories of investments are shown as a percentage of net assets at
February 28, 1995.
(See Notes which are an integral part of the Financial Statements)
<PAGE>
[This Page Intentionally Left Blank]
February 28, 1995 (Unaudited)
STATEMENTS OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
------- ------- ------- -------
STOCK VALUE EQUITY MID-CAP
FUND EQUITY FUND INCOME FUND STOCK FUND
------- ------- ------- -------
<S> <C> <C> <C> <C>
ASSETS:
Investments in
securities, at value $225,746,112 $218,346,053 $67,920,106 $76,675,567
Investments in
repurchase agreements 9,202,000 27,174,000 8,344,000 4,306,000
Cash 593 703 550 432
Dividends receivable 405,475 548,533 324,040 55,637
Interest receivable 1,534 7,041 1,391 718
Receivable for
investments sold 2,091,337 -- 95,162 2,052,739
Receivable for Daily
Variation Margin -- -- -- 10,000
Receivable for Capital
Stock sold 19,617 265,921 851,952 137,929
Deferred expenses 57,690 64,906 20,728 22,410
------------ ------------ ----------- -----------
Total assets 237,524,358 246,407,157 77,557,929 83,261,432
------------ ------------ ----------- -----------
LIABILITIES:
Dividends payable -- -- -- --
Payable for
investments purchased 2,636,640 2,594,315 1,450,744 3,814,714
Payable for Capital
Stock redeemed 438,621 373,091 20,451 182,479
Stock lending payable -- 37,779,660 -- --
Taxes payable -- -- -- 2,367
Accrued expenses 169,807 160,125 62,807 69,208
------------ ------------ ----------- -----------
Total liabilities 3,245,068 40,907,191 1,534,002 4,068,768
------------ ------------ ----------- -----------
NET ASSETS CONSIST OF:
Paid-in-capital 222,845,739 202,822,321 74,077,611 76,609,823
Net unrealized
appreciation
(depreciation) on
investments and
futures contracts 15,687,510 (4,050,855) 2,351,612 3,482,998
Accumulated net
realized gain (loss)
on investments and
futures contracts (4,443,558) 6,145,856 (814,021) (906,853)
Undistributed net
investment income 189,599 582,644 408,725 6,696
------------ ------------ ----------- -----------
Total Net Assets $234,279,290 $205,499,966 $76,023,927 $79,192,664
------------ ------------ ----------- -----------
NET ASSET VALUE,
Offering Price, and
Redemption Proceeds Per
Share:
Class A Shares $10.28* $10.63* $10.11* $10.03*
Class B Shares -- -- -- --
------------ ------------ ----------- -----------
SHARES OUTSTANDING:
Class A Shares 22,792,362* 19,335,290* 7,519,178* 7,894,458*
Class B Shares -- -- -- --
------------ ------------ ----------- -----------
Total shares
outstanding
($0.0001 par value) 22,792,362 19,335,290 7,519,178 7,894,458
============ ============ =========== ===========
Investments, at
identified and tax cost $219,260,602 $249,570,908 $73,912,494 $77,503,518
============ ============ =========== ===========
</TABLE>
*Shares were sold without class designation.
(See Notes which are an integral part of the Financial Statements)
[ ] MARSHALL FUNDS
<TABLE>
<CAPTION>
----------- ------- ------- ------- ------- -------
SHORT-TERM INTERMEDIATE GOVERNMENT SHORT-TERM INTERMEDIATE MONEY
INCOME BOND INCOME TAX-FREE TAX-FREE MARKET
FUND FUND FUND FUND FUND FUND
----------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$87,611,147 $411,092,875 $81,058,761 $21,139,074 $38,116,564 $1,016,103,429
-- 10,425,000 7,870,000 -- -- 51,474,000
504 402 335 -- -- 70
-- -- -- -- -- --
613,339 3,449,727 544,014 327,838 567,713 1,877,665
-- -- 6,476,267 -- -- --
-- -- -- -- -- --
2,944 736,332 361,857 50,000 401,865 63,556
16,291 60,830 27,840 14,356 20,336 345,769
----------- ------------ ----------- ----------- ----------- --------------
88,244,225 425,765,166 96,339,074 21,531,268 39,106,478 1,069,864,489
----------- ------------ ----------- ----------- ----------- --------------
415,876 1,728,938 447,783 38,192 131,216 4,882,790
-- 5,599,141 14,632,558 -- -- 281,881
-- 176,852 15,000 36,712 47,228 --
-- 83,168,081 -- -- -- --
-- -- -- 2,435 -- --
14,412 152,034 46,077 -- 35,566 278,620
----------- ------------ ----------- ----------- ----------- --------------
430,288 90,825,046 15,141,418 77,339 214,010 5,443,291
----------- ------------ ----------- ----------- ----------- --------------
91,142,065 362,868,765 85,870,211 21,585,417 39,608,350 1,064,421,198
(661,981) (2,154,094) (74,717) (18,056) (61,845) --
(2,666,147) (25,774,551) (4,597,838) (113,432) (654,037) --
-- -- -- -- -- --
----------- ------------ ----------- ----------- ----------- --------------
$87,813,937 $334,940,120 $81,197,656 $21,453,929 $38,892,468 $1,064,421,198
----------- ------------ ----------- ----------- ----------- --------------
$9.65* $9.25* $9.23* $9.91* $9.68* $1.00
-- -- -- -- -- $1.00
----------- ------------ ----------- ----------- ----------- --------------
9,095,189* 36,203,343* 8,798,335* 2,164,802* 4,018,177* 1,046,993,707
-- -- -- -- -- 17,427,491
----------- ------------ ----------- ----------- ----------- --------------
9,095,189 36,203,343 8,798,335 2,164,802 4,018,177 1,064,421,198
=========== ============ =========== =========== =========== ==============
$88,273,128 $423,671,969 $89,003,478 $21,157,130 $38,178,409 $1,067,577,429
=========== ============ =========== =========== =========== ==============
</TABLE>
Six Months Ended February 28, 1995 (Unaudited)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
------- ------- ------- -------
STOCK VALUE EQUITY MID-CAP
FUND EQUITY FUND INCOME FUND STOCK FUND
------- ------- ------- -------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $ 396,265 $ 481,389 $ 244,915 $ 119,758
Dividend income 1,602,506 2,506,207 1,138,957 226,264
---------- ------------ ---------- ----------
Total income 1,998,771 2,987,596 1,383,872 346,022
---------- ------------ ---------- ----------
EXPENSES:
Investment advisory fee 853,222 777,627 215,768 236,737
Directors' fees 1,282 727 179 239
Administrative personnel
and services fees 104,105 94,884 26,316 28,872
Custodian fees 22,746 20,737 5,754 6,313
Portfolio accounting fees 30,575 29,385 22,656 25,016
Transfer and dividend
disbursing agent fees and
expenses 44,074 12,722 14,226 14,057
Shareholder services fees 17,950 16,329 4,589 5,029
Capital stock registration
costs 13,849 18,090 13,483 14,891
Auditing fees 6,588 5,201 6,177 5,294
Legal fees 4,777 1,863 2,938 2,950
Printing and postage 7,897 5,275 7,691 7,583
Insurance premiums 2,368 2,595 2,431 2,367
Distribution services fees -- -- -- --
Taxes 8,987 8,230 2,210 2,740
Miscellaneous 2,188 681 1,236 521
---------- ------------ ---------- ----------
Total expenses 1,120,608 994,346 325,654 352,609
DEDUCT--
Waiver of investment
advisory fee 7,248 -- 35,601 34,758
---------- ------------ ---------- ----------
NET EXPENSES 1,113,360 994,346 290,053 317,851
---------- ------------ ---------- ----------
NET INVESTMENT INCOME 885,411 1,993,250 1,093,819 28,171
---------- ------------ ---------- ----------
REALIZED AND UNREALIZED GAIN
(LOSS)
ON INVESTMENTS:
Net realized gain (loss) on
investments (identified
cost basis) (986,253) 6,639,606 (421,207) 518,611
Net realized gain on
futures
contracts (identified cost
basis) -- -- -- 72,971
Net change in unrealized
appreciation
(depreciation) on
investments and futures
contracts 5,780,517 (11,765,565) 1,965,026 2,610,353
---------- ------------ ---------- ----------
NET REALIZED AND UNREALIZED
GAIN (LOSS)
ON INVESTMENTS 4,794,264 (5,125,959) 1,543,819 3,201,935
---------- ------------ ---------- ----------
CHANGE IN NET ASSETS
RESULTING FROM OPERATIONS $5,679,675 ($3,132,709) $2,637,638 $3,230,106
========== ============ ========== ==========
</TABLE>
(See Notes which are an integral part of the Financial Statements)
[ ] MARSHALL FUNDS
Six Months Ended February 28, 1995 (Unaudited)
<TABLE>
<CAPTION>
- ---------- ------- ------- ------- ------- -------
SHORT-
SHORT-TERM INTERMEDIATE GOVERNMENT TERM INTERMEDIATE MONEY
INCOME BOND INCOME TAX-FREE TAX-FREE MARKET
FUND FUND FUND FUND FUND FUND
- ---------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$2,892,956 $ 12,071,364 $ 2,862,843 $ 540,410 $ 911,789 $29,608,428
-- -- -- -- -- --
- ---------- ------------ ----------- --------- --------- -----------
2,892,956 12,071,364 2,862,843 540,410 911,789 29,608,428
- ---------- ------------ ----------- --------- --------- -----------
286,925 987,941 279,572 62,801 112,247 2,671,449
337 607 466 65 -- 5,354
43,763 150,680 34,101 11,494 17,117 488,801
9,564 28,863 7,455 2,512 3,742 65,826
16,442 36,543 23,199 14,325 25,466 62,012
9,500 13,740 29,525 7,238 10,051 64,152
7,512 25,959 5,891 1,976 2,952 84,417
16,010 18,357 11,591 7,855 7,492 39,517
4,738 7,087 6,298 3,566 4,944 7,188
1,807 4,367 3,028 1,766 1,476 10,435
5,063 5,998 6,247 4,726 5,412 14,314
2,025 4,145 2,079 1,285 2,181 9,349
-- -- -- -- -- 24,752
3,505 11,997 2,600 950 1,446 39,248
1,314 2,611 1,455 521 -- 8,250
- ---------- ------------ ----------- --------- --------- -----------
408,505 1,298,895 413,507 121,080 194,526 3,595,064
164,055 131,725 93,190 56,521 80,444 1,389,154
- ---------- ------------ ----------- --------- --------- -----------
244,450 1,167,170 320,317 64,559 114,082 2,205,910
- ---------- ------------ ----------- --------- --------- -----------
2,648,506 10,904,194 2,542,526 475,851 797,707 27,402,518
- ---------- ------------ ----------- --------- --------- -----------
(661,814) (10,660,706) (1,434,696) (102,460) (444,141) --
-- -- -- -- -- --
104,770 6,685,053 1,706,309 63,497 348,350 --
- ---------- ------------ ----------- --------- --------- -----------
(557,044) (3,975,653) 271,613 (38,963) (95,791) --
- ---------- ------------ ----------- --------- --------- -----------
$2,091,462 $ 6,928,541 $ 2,814,139 $ 436,888 $ 701,916 $27,402,518
========== ============ =========== ========= ========= ===========
</TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
---------------------------
STOCK FUND
---------------------------
Six Months
Ended Year Ended
February 28, August 31,
1995* 1994
------------ -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS--
Net investment income $ 885,411 $ 1,926,542
Net realized gain (loss) on investments (986,253) 13,279,160
Net realized gain on futures contracts -- --
Net change in unrealized appreciation
(depreciation) of investments and futures
contracts 5,780,517 (12,123,274)
------------ -------------
Change in net assets resulting from operations 5,679,675 3,082,428
------------ -------------
DISTRIBUTIONS TO SHAREHOLDERS--
Dividends to shareholders from net investment
income (1,072,912) (1,993,902)
Distributions to shareholders from net realized
gain on investments -- --
------------ -------------
Change in net assets from distributions to
shareholders (1,072,912) (1,993,902)
------------ -------------
CAPITAL STOCK TRANSACTIONS
Proceeds from sales of shares 37,503,913 98,818,795
Net asset value of shares issued to shareholders
in payment of dividends declared 825,357 1,882,088
Cost of shares redeemed (58,811,679) (160,762,127)
------------ -------------
Change in net assets from Capital Stock
transactions (20,482,409) (60,061,244)
------------ -------------
Change in net assets (15,875,646) (58,972,718)
NET ASSETS:
Beginning of period 250,154,936 309,127,654
------------ -------------
End of period 234,279,290 250,154,936
============ =============
Undistributed net investment income included in
net assets at end of period $ 189,599 $ 377,100
Net gain (loss) as computed for federal tax
purposes ($986,253) ($3,422,951)
============ =============
</TABLE>
*Unaudited
(See Notes which are an integral part of the Financial Statements)
[ ] MARSHALL FUNDS
<TABLE>
<CAPTION>
-------------------------- -------------------------- ------------------------- --------------------------
VALUE EQUITY MID-CAP SHORT-TERM
EQUITY INCOME STOCK INCOME
FUND FUND FUND FUND
-------------------------- -------------------------- ------------------------- --------------------------
Six Months Period Six Months Six Months Period Six Months
Ended Ended Ended Period Ended Ended Ended Ended Year Ended
February 28, August 31, February 28, August 31, February 28, August 31, February 28, August 31,
1995* 1994** 1995* 1994** 1995* 1994** 1995* 1994
------------ ------------ ------------ ------------ ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 1,993,250 $ 753,022 $ 1,093,819 $ 1,079,248 $ 28,171 $ 57,518 $ 2,648,506 $ 4,386,765
6,639,606 1,666,910 (421,207) (392,814) 518,611 (1,460,302) (661,814) (1,938,737)
-- -- -- -- 72,971 -- -- --
(11,765,565) 7,714,710 1,965,026 386,586 2,610,353 872,644 104,770 (590,561)
------------ ------------ ------------ ------------ ------------ ----------- ------------ ------------
(3,132,709) 10,134,642 2,637,638 1,073,020 3,230,106 (530,140) 2,091,462 1,857,467
------------ ------------ ------------ ------------ ------------ ----------- ------------ ------------
(1,728,425) (435,203) (916,394) (847,948) (64,764) (14,229) (2,774,151) (4,283,842)
(2,160,660) -- -- -- -- (38,133) -- --
------------ ------------ ------------ ------------ ------------ ----------- ------------ ------------
(3,889,085) (435,203) (916,394) (847,948) (64,764) (52,362) (2,774,151) (4,283,842)
------------ ------------ ------------ ------------ ------------ ----------- ------------ ------------
43,418,211 224,111,601 36,412,464 61,917,199 39,510,252 62,129,088 30,703,571 117,021,684
2,001,865 223,675 465,690 645,885 35,263 31,053 1,311,169 2,820,624
(51,653,691) (15,279,340) (11,971,028) (13,392,599) (17,160,118) (7,935,714) (43,970,259) (91,705,600)
------------ ------------ ------------ ------------ ------------ ----------- ------------ ------------
(6,233,615) 209,055,936 24,907,126 49,170,485 22,385,397 54,224,427 (11,955,519) 28,136,708
------------ ------------ ------------ ------------ ------------ ----------- ------------ ------------
(13,255,409) 218,755,375 26,628,370 49,395,557 25,550,739 53,641,925 (12,638,208) 25,710,333
218,755,375 -- 49,395,557 -- 53,641,925 -- 100,452,145 74,741,812
------------ ------------ ------------ ------------ ------------ ----------- ------------ ------------
205,499,966 218,755,375 76,023,927 49,395,557 79,192,664 53,641,925 87,813,937 100,452,145
============ ============ ============ ============ ============ =========== ============ ============
$ 582,644 $ 317,819 $ 408,725 $ 231,300 $ 6,696 $ 43,289 -- $ 125,645
$ 6,639,606 $ 1,834,999 ($421,207) ($41,996) $ 591,582 $ 38,184 ($661,814) $ 302,405
============ ============ ============ ============ ============ =========== ============ ============
</TABLE>
*Unaudited
**For the period from October 1, 1993 (date of initial public investment) to
August 31, 1994
(See Notes which are an integral part of the Financial Statements)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
--------------------------
INTERMEDIATE
BOND FUND
--------------------------
Six Months
Ended Year Ended
February 28, August 31,
1995* 1994
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS--
Net investment income $ 10,904,194 $ 19,541,196
Net realized gain (loss) on investments (10,660,706) (13,957,495)
Net change in unrealized appreciation
(depreciation) of investments 6,685,053 (12,033,595)
------------ ------------
Change in net assets resulting from operations 6,928,541 (6,449,894)
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS--
Dividends to shareholders from net investment
income:
Class A Shares (11,429,201) (21,460,493)
Class B Shares -- --
Distributions to shareholders from net realized
gain on investments: -- (5,192,805)
------------ ------------
Change in net assets from distributions to
shareholders (11,429,201) (26,653,298)
------------ ------------
CAPITAL STOCK TRANSACTIONS--
Proceeds from sale of capital stock 74,745,828 171,805,103
Net asset value of shares issued to shareholders
in payment of dividends declared 5,959,540 22,497,295
Cost of shares redeemed (99,004,261) (150,267,568)
------------ ------------
Change in net assets from Capital Stock
transactions (18,298,893) 44,034,830
------------ ------------
Change in net assets (22,799,553) 10,931,638
------------ ------------
NET ASSETS:
Beginning of period 357,739,673 346,808,035
------------ ------------
End of period 334,940,120 357,739,673
============ ============
Undistributed net investment income included in
net assets at end of period -- $ 525,375
Net gain (loss) as computed for federal tax
purposes ($10,660,706) $ 1,157,829
============ ============
</TABLE>
*Unaudited
(See Notes which are an integral part of the Financial Statements)
[ ] MARSHALL FUNDS
<TABLE>
<CAPTION>
------------------------- ------------------------- ------------------------- ------------------------------
GOVERNMENT SHORT-TERM INTERMEDIATE MONEY
INCOME TAX-FREE TAX-FREE MARKET
FUND FUND FUND FUND
------------------------- ------------------------- ------------------------- ------------------------------
Six Months Year Six Months Period Six Months Period Six Months Year
Ended Ended Ended Ended Ended Ended Ended Ended
February 28, August 31, February 28, August 31, February 28, August 31, February 28, August 31,
1995* 1994 1995* 1994** 1995* 1994** 1995* 1994
------------ ----------- ------------ ----------- ------------ ----------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 2,542,526 $ 3,829,517 $ 475,851 $ 318,874 $ 797,707 $ 571,762 $ 27,402,518 $ 31,418,249
(1,434,696) (3,162,878) (102,460) (10,972) (444,141) (209,896) -- --
1,706,309 (1,676,516) 63,497 (81,553) 348,350 (410,195) -- --
----------- ----------- ----------- ----------- ----------- ----------- -------------- --------------
2,814,139 (1,009,877) 436,888 226,349 701,916 (48,329) 27,402,518 31,418,249
----------- ----------- ----------- ----------- ----------- ----------- -------------- --------------
(2,654,668) (4,026,755) (475,851) (318,874) (797,707) (571,762) (27,002,803) (31,253,782)
-- -- -- -- -- -- (399,715) (164,467)
-- (733,522) -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- ----------- -------------- --------------
(2,654,668) (4,760,277) (475,851) (318,874) (797,707) (571,762) (27,402,518) (31,418,249)
----------- ----------- ----------- ----------- ----------- ----------- -------------- --------------
34,749,206 40,774,599 4,863,522 29,765,118 11,522,950 39,630,036 1,650,898,446 2,698,258,215
1,872,099 3,961,419 235,457 203,173 44,676 88,011 3,061,402 3,620,348
(20,406,166) (31,964,319) (8,509,110) (4,972,743) (7,791,305) (3,886,018) (1,569,455,303) (2,499,832,541)
----------- ----------- ----------- ----------- ----------- ----------- -------------- --------------
16,215,139 12,771,699 (3,410,131) 24,995,548 3,776,321 35,832,029 84,504,545 202,046,022
----------- ----------- ----------- ----------- ----------- ----------- -------------- --------------
16,374,610 7,001,545 (3,449,094) 24,903,023 3,680,530 35,211,938 84,504,545 202,046,022
----------- ----------- ----------- ----------- ----------- ----------- -------------- --------------
64,823,046 57,821,501 24,903,023 -- 35,211,938 -- 979,916,653 777,870,631
----------- ----------- ----------- ----------- ----------- ----------- -------------- --------------
81,197,656 64,823,046 21,453,929 24,903,023 38,892,468 35,211,938 1,064,421,198 979,916,653
=========== =========== =========== =========== =========== =========== ============== ==============
-- $ 112,142 -- -- -- -- -- --
($1,434,696) ($521,493) ($102,460) -- ($444,141) -- -- --
=========== =========== =========== =========== =========== =========== ============== ==============
</TABLE>
*Unaudited
**For the period from February 2, 1994 (date of initial public investment) to
August 31, 1994
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout Each Period
<TABLE>
<CAPTION>
Distributions
Net Realized to Share-
and Dividends to holders
Net Asset Unrealized Shareholders from Net
Period Value, Net Gain/(Loss) Total from from Net Realized Gain
Ended beginning Investment on Investment Investment On Investment Total
August 31, of period Income Investments Operations Income Transactions Distributions
- ---------- --------- ---------- ------------ ---------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
STOCK FUND
1993* $10.00 0.10 0.07 0.17 (0.09) -- (0.09)
1994 $10.08 0.07 (0.03) 0.04 (0.07) -- (0.07)
1995+ $10.05 0.03 0.24 0.27 (0.04) -- (0.04)
VALUE EQUITY FUND
1994** $10.00 0.12 0.93 1.05 (0.10) -- (0.10)
1995+ $10.95 0.10 (0.22) (0.12) (0.09) (0.11) (0.20)
EQUITY INCOME FUND
1994** $10.00 0.28 (0.09) 0.19 (0.23) -- (0.23)
1995+ $9.96 0.19 0.12 0.31 (0.16) -- (0.16)
MID-CAP STOCK FUND
1994** $10.00 0.02 (0.29) (0.27) (0.01) (0.03) (0.04)
1995+ $9.69 0.00 0.35 0.35 (0.01) -- (0.01)
SHORT-TERM INCOME FUND
1993*** $10.00 0.40 (0.05) 0.35 (0.40) -- (0.40)
1994 $9.95 0.45 (0.25) 0.20 (0.44) -- (0.44)
1995+ $9.71 0.27 (0.05) 0.22 (0.28) (0.28)
INTERMEDIATE BOND FUND
1993* $10.00 0.46 0.33 0.79 (0.39) -- (0.39)
1994 $10.40 0.61 (0.81) (0.20) (0.67) (0.17) (0.84)
1995+ $9.36 0.31 (0.10) 0.21 (0.32) -- (0.32)
GOVERNMENT INCOME FUND
1993**** $10.00 0.47 0.16 0.63 (0.41) -- (0.41)
1994 $10.22 0.64 (0.78) (0.14) (0.68) (0.14) (0.82)
1995+ $9.26 0.32 (0.03) 0.29 (0.32) (0.32)
SHORT-TERM TAX-FREE FUND
1994***** $10.00 0.18 (0.08) 0.10 (0.18) -- (0.18)
1995+ $9.92 0.19 (0.01) 0.18 (0.19) -- (0.19)
INTERMEDIATE TAX-FREE FUND
1994***** $10.00 0.19 (0.29) (0.10) (0.19) -- (0.19)
1995+ $9.71 0.20 (0.03) 0.17 (0.20) -- (0.20)
MONEY MARKET FUND--CLASS A SHARES
1993* $1.00 0.02 -- -- (0.02) -- (0.02)
1994 $1.00 0.03 -- -- (0.03) -- (0.03)
1995+ $1.00 0.03 -- -- (0.03) -- (0.03)
MONEY MARKET FUND--CLASS B SHARES
1993****** $1.00 0.02 -- -- (0.02) -- (0.02)
1994 $1.00 0.03 -- -- (0.03) -- (0.03)
1995+ $1.00 0.02 -- -- (0.02) -- (0.02)
</TABLE>
+ Six months ended February 28, 1995 (unaudited).
* Reflects operations for the period from November 23, 1992 (date of
initial public investment) to August 31, 1993.
** Reflects operations for the period from October 1, 1993 (date of
initial public investment) to August 31, 1994.
*** Reflects operations for the period from November 2, 1992 (date of
initial public investment) to August 31, 1993.
**** Reflects operations for the period from December 14, 1992 (date of
initial public investment) to August 31, 1993.
***** Reflects operations for the period from February 2, 1994 (date of
initial public investment) to August 31, 1994.
****** Reflects operations for the period from December 17, 1992 (date of
initial public investment) to August 31, 1993.
(a) Based on net asset value.
(b) Computed on an annualized basis.
(c) This voluntary expense decrease is reflected in both the expense and
net investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
[ ] MARSHALL FUNDS
<TABLE>
<CAPTION>
Net Assets,
Net Asset Net end of Portfolio
Value, end Total Investment Expense period turnover
of period Return(a) Expenses Income Waiver(c) (000 omitted) rate
- ---------- --------- -------- ---------- --------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
$10.08 1.67% 0.94%(b) 1.39%(b) 0.03%(b) $309,128 98%
$10.05 0.44% 0.99% 0.77% 0.01% $250,155 86%
$10.28 2.75% 0.98%(b) 0.78%(b) 0.01%(b) $234,279 37%
$10.95 10.59% 1.00%(b) 1.82%(b) 0.15%(b) $218,755 39%
$10.63 (1.02%) 0.96%(b) 1.92%(b) 0.00%(b) $205,500 50%
$9.96 2.02% 1.01%(b) 3.30%(b) 0.16%(b) $49,396 44%
$10.11 3.18% 1.01%(b) 3.80%(b) 0.12%(b) $76,024 27%
$9.69 (2.74%) 1.01%(b) 0.23%(b) 0.28%(b) $53,642 113%
$10.03 3.61% 1.01%(b) 0.09%(b) 0.11%(b) $79,193 55%
$9.95 3.57% 0.50%(b) 4.91%(b) 0.51%(b) $74,742 79%
$9.71 2.05% 0.50% 4.58% 0.39% $100,452 185%
$9.65 2.32% 0.51%(b) 5.54%(b) 0.34%(b) $87,814 59%
$10.40 7.99% 0.70%(b) 6.08%(b) 0.10%(b) $346,808 220%
$9.36 (2.02%) 0.71% 6.26% 0.11% $357,740 228%
$9.25 2.28% 0.71%(b) 6.62%(b) 0.08%(b) $334,940 77%
$10.22 6.40% 0.85%(b) 6.56%(b) 0.33%(b) $57,822 218%
$9.26 (1.34%) 0.86% 6.58% 0.40% $64,823 175%
$9.23 3.22% 0.86%(b) 6.83%(b) 0.25%(b) $81,198 65%
$9.92 0.98% 0.52%(b) 3.22%(b) 0.71%(b) $24,903 37%
$9.91 1.79% 0.51%(b) 3.79%(b) 0.45%(b) $21,454 41%
$9.71 (0.94%) 0.62%(b) 3.58%(b) 0.59%(b) $35,212 45%
$9.68 1.82% 0.61%(b) 4.26%(b) 0.43%(b) $38,892 48%
$1.00 2.33% 0.40%(b) 2.97%(b) 0.28%(b) $775,890 --
$1.00 3.41% 0.40% 3.40% 0.29% $967,988 --
$1.00 2.57% 0.41%(b) 5.14%(b) 0.26%(b) $1,046,994 --
$1.00 1.89% 0.72%(b) 2.72%(b) 0.28%(b) $1,980 --
$1.00 3.11% 0.70% 3.39% 0.29% $11,929 --
$1.00 2.42% 0.71%(b) 4.84%(b) 0.26%(b) $17,427 --
</TABLE>
As of February 28, 1995 (unaudited)
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
Marshall Funds, Inc. (the "Corporation") is an open-end, management
investment company, established as a Wisconsin corporation under the Articles
of Incorporation on July 31, 1992. The Corporation consists of eleven
diversified portfolios:
<TABLE>
<S> <C>
Marshall Stock Fund Marshall Intermediate Bond Fund
Marshall Value Equity Fund Marshall Government Income Fund
Marshall Equity Income Fund Marshall Short-Term Tax-Free Fund
Marshall Mid-Cap Stock Fund Marshall Intermediate Tax-Free Fund
Marshall International Stock Fund Marshall Money Market Fund
Marshall Short-Term Income Fund
</TABLE>
Marshall Money Market Fund is offered in two classes of shares: Class A
Shares (formerly, Trust Shares) and Class B Shares (formerly, Investment
Shares). The assets of each portfolio are segregated and a shareholder's
interest is limited to the portfolio in which shares are held. The financial
statements included herein are for all of the Marshall portfolios (individually
referred to as a "Fund", or collectively as the "Funds") except for Marshall
International Stock Fund which is presented separately.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. These
policies are in conformity with generally accepted accounting principles.
A. Investment Valuations--Municipal bonds are valued by an independent
pricing service taking into consideration yield, liquidity, risk, credit
quality, coupon, maturity, type of issue, and any other factors or market data
it deems relevant in determining valuations for normal institutional size
trading units of debt securities. The independent pricing service does not rely
exclusively on quoted prices.
Listed equity securities, corporate bonds and other fixed income securities
and asset-backed securities are valued at the last sale price reported on
national securities exchanges. U.S. government obligations are generally valued
at the mean between the over-the-counter bid and asked prices as furnished by
an independent pricing service. Unlisted securities and bonds are generally
valued at the price provided by an independent pricing service. Short-term
securities with remaining maturities of sixty days or less may be valued at
amortized cost, which approximates fair market value. Investments in other
regulated investment companies are valued at net asset value. Futures contracts
are valued daily at the last sale price provided by the board of trade or
exchange from which they were purchased.
The Money Market Fund's use of the amortized cost method to value its
portfolio securities is in accordance with Rule 2a-7 under the Investment
Company Act of 1940 (the "Act").
B. Repurchase Agreements--It is the policy of the Funds to require the
custodian bank to take possession, to have legally segregated in the Federal
Reserve Book Entry System or to have physically segregated within the custodian
bank's vault, all securities held as collateral in support of repurchase
agreement investments. Additionally, procedures have been established by the
Funds to monitor, on a daily basis, the market value of each repurchase
agreement's underlying collateral to ensure that the value of collateral at
least equals the principal amount of the repurchase transaction, including
accrued interest.
The Funds will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed by
the Funds' adviser to be creditworthy pursuant to guidelines and/or standards
reviewed or established by the Board of Directors (the "Directors"). Risks may
arise from the potential inability of counterparties to honor the terms of
these agreements. Accordingly, the Funds could receive less than the repurchase
price on the sale of collateral securities.
C. Investment Income, Expenses and Distributions--Dividend income and
distributions to shareholders are recorded on the ex-dividend date. Interest
income and expenses are accrued daily. Bond premium and discount, if
applicable, are amortized as required by the Internal Revenue Code, as amended
(the "Code").
Distributions are determined in accordance with income tax regulations which
may differ from generally accepted accounting principles. These distributions
do not represent a return of capital for federal income tax purposes.
D. Federal Taxes--It is each Fund's policy to comply with the provisions of
the Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its taxable or tax-exempt income.
Accordingly, no provisions for federal tax are necessary.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
At August 31, 1994, the Funds presented below, for federal tax purposes, had
the following capital loss carryforwards which will reduce each Funds' taxable
income arising from the future net realized gain on investments, if any, to the
extent permitted by the Code, and thus will reduce the amount of the
distributions to shareholders which would otherwise be necesssary to relieve
the Funds of any liability for federal tax. Additionally, the Funds presented
below had the following losses attributable to security transactions incurred
after October 31, 1993 which are treated as arising on the first day of each
Fund's next taxable year.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POST OCTOBER 31,
FUNDS 1993 LOSSES CARRY FORWARDS YEAR OF EXPIRATION
---------------- -------------- ------------------
<S> <C> <C> <C>
Stock Fund -- $3,422,951 2002
Value Equity Fund -- -- --
Equity Income Fund $ 330,385 41,996 2002
Mid-Cap Stock Fund 1,498,486 -- --
Short-Term Income Fund 1,701,928 302,405 2002
Intermediate Bond Fund 15,077,549 -- --
Government Income Fund 2,641,385 521,493 2002
Short-Term Tax-Free Fund 10,972 -- --
Intermediate Tax-Free
Fund 209,896 -- --
</TABLE>
- --------------------------------------------------------------------------------
E. When-Issued and Delayed Delivery Transactions--The Funds may engage in
when-issued or delayed delivery transactions. The Funds record when-issued
securities on the trade date and maintain security positions such that
sufficient liquid assets will be available to make payment for the securities
purchased. Securities purchased on a when-issued or delayed delivery basis are
marked to market daily and begin earning interest on the settlement date.
F. Deferred Expenses--The costs incurred by each Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering the shares, have been deferred and are being amortized
using the straight-line method not to exceed a period of five years from each
Fund's commencement date.
G. Securities Lending--The Funds presented below participate in a securities
lending program providing for the lending of corporate bonds, equity and
government securities to qualified brokers. Collateral on all securities loaned
is accepted in cash or securities. Collateral is maintained at a minimum level
of 100% of the market value on investments loaned, plus interest, if
applicable. Interest earned on collateral securities is divided between the
Fund and brokers, according to agreed-upon rates. As of February 28, 1995, the
value of the securities loaned and the value of the collateral were as follows:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET VALUE
OF SECURITIES MARKET VALUE
FUNDS LOANED OF COLLATERAL
------------- -------------
<S> <C> <C>
Value Equity $37,153,950 $37,779,660
Intermediate Bond $81,807,077 $83,168,081
</TABLE>
- --------------------------------------------------------------------------------
H. Futures Contracts--Upon entering into a financial futures contract with a
broker, the Mid-Cap Stock Fund is required to deposit in a segregated account
an amount of cash or U.S. government securities equal to a percentage of the
contract value. The Fund agrees to receive from or to pay to the broker an
amount of cash equal to a specific dollar amount times the difference between
the closing value and the price at which the contract was made. On a daily
basis, the value of the financial futures contract is determined and any
difference between such value and the original futures contract value is
reflected in the "daily variation margin" account. Daily variation margin
adjustments, arising from this "marking to market" process, are recorded by the
Fund as unrealized gains or losses.
Risks of entering into futures contracts include the possibility that a
change in the value of the contract may not correlate with changes in the value
of the underlying securities. Risks may also arise from the inabilities of
counterparties to perform under the terms of the contract.
The Fund may decide to close its position on a contract at any time prior to
the contract's expiration. When a contract is closed, the Fund recognizes a
realized gain or loss.
At February 28, 1995, the Fund had outstanding futures contracts as set forth
below:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EXPIRATION CONTRACTS UNREALIZED
DATE TO DELIVER VALUE APPRECIATION
---------- ----------------------- ---------- ------------
<S> <C> <C> <C>
3/17/95 16 S&P Midcap 400 March $1,435,600 $4,949
Futures
</TABLE>
- --------------------------------------------------------------------------------
I. Other--Investment transactions are accounted for on the trade date.
3. CAPITAL STOCK
The Articles of Incorporation permit the Directors to issue 50 billion full
and fractional shares of common stock, par value $0.0001 per share. At February
28, 1995, the capital paid-in for Stock Fund, Value Equity Fund, Equity Income
Fund, Mid-Cap Stock Fund, Short-Term Income Fund, Intermediate Bond Fund,
Government Income Fund, Short-Term Tax-Free Fund, Intermediate Tax-Free Fund
and Money Market Fund was $222,845,739, $202,822,321, $74,077,611, $76,609,823,
$91,142,065, $362,868,765, $85,870,211, $21,585,417, $39,608,350 and
$1,064,421,198, respectively. Transactions in shares were as follows:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
--------------------------------- ---------------------------------- ----------------------------------
STOCK FUND VALUE EQUITY FUND EQUITY INCOME FUND
--------------------------------- ---------------------------------- ----------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
FEBRUARY 28, 1995 AUGUST 31, 1994 FEBRUARY 28, 1995 AUGUST 31, 1994* FEBRUARY 28, 1995 AUGUST 31, 1994*
----------------- --------------- ----------------- ---------------- ----------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 3,853,655 9,896,396 4,129,335 21,409,502 3,756,848 6,256,917
Shares issued to
shareholders in
payment of div-
idends declared 85,170 186,739 197,064 22,375 48,420 66,609
Shares redeemed (6,044,354) (15,846,005) (4,970,776) (1,452,210) (1,246,010) (1,363,606)
---------- ----------- ---------- ---------- ---------- ----------
Net change re-
sulting from
Fund share
transactions (2,105,529) (5,762,870) (644,377) 19,979,667 2,559,258 4,959,920
========== =========== ========== ========== ========== ==========
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
---------------------------------- --------------------------------- ---------------------------------
MID-CAP STOCK FUND SHORT-TERM INCOME FUND INTERMEDIATE BOND FUND
---------------------------------- --------------------------------- ---------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
FEBRUARY 28, 1995 AUGUST 31, 1994* FEBRUARY 28, 1995 AUGUST 31, 1994 FEBRUARY 28, 1995 AUGUST 31, 1994
----------------- ---------------- ----------------- --------------- ----------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 4,146,976 6,367,440 3,184,854 11,893,678 8,165,787 17,818,710
Shares issued to
shareholders in
payment of divi-
dends declared 3,751 3,112 136,435 287,651 653,187 2,287,787
Shares redeemed (1,792,306) (834,514) (4,566,099) (9,353,466) (10,818,888) (15,245,010)
---------- --------- ---------- ----------- ----------- ------------
Net change re-
sulting from
Fund share
transactions 2,358,421 5,536,038 (1,244,810) 2,827,863 (1,999,914) 4,861,487
========== ========= ========== =========== =========== ============
</TABLE>
- --------------------------------------------------------------------------------
*For the period from October 1, 1993 (date of initial public investment) to
August 31, 1994.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
--------------------------------- ----------------------------------- -----------------------------------
GOVERNMENT SHORT-TERM INTERMEDIATE
INCOME FUND TAX-FREE FUND TAX-FREE FUND
--------------------------------- ----------------------------------- -----------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
FEBRUARY 28, 1995 AUGUST 31, 1994 FEBRUARY 28, 1995 AUGUST 31, 1994** FEBRUARY 28, 1995 AUGUST 31, 1994**
----------------- --------------- ----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 3,850,243 4,215,121 492,469 2,991,957 1,210,855 4,020,183
Shares issued to
shareholders in
payment of div-
idends declared 207,356 411,267 23,892 20,492 4,716 9,030
Shares redeemed (2,260,960) (3,282,704) (862,462) (501,546) (824,308) (402,299)
---------- ----------- -------- --------- --------- ---------
Net change
resulting from
Fund share
transactions 1,796,639 1,343,684 (346,101) 2,510,903 391,263 3,626,914
========== =========== ======== ========= ========= =========
</TABLE>
- --------------------------------------------------------------------------------
**For the period from February 2, 1994 (date of initial public investment) to
August 31, 1994.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
---------------------------------
MONEY MARKET FUND
---------------------------------
SIX MONTHS ENDED YEAR ENDED
CLASS A SHARES FEBRUARY 28, 1995 AUGUST 31, 1994
----------------- ---------------
<S> <C> <C>
Shares sold 1,593,957,146 2,652,693,310
Shares issued to shareholders in payment
of dividends declared 2,694,485 3,467,566
Shares redeemed (1,517,645,628) (2,464,063,526)
-------------- --------------
Net change resulting from Fund share
transactions 79,006,003 192,097,350
============== ==============
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
---------------------------------
MONEY MARKET FUND
---------------------------------
SIX MONTHS ENDED YEAR ENDED
CLASS B SHARES FEBRUARY 28, 1995 AUGUST 31, 1994
----------------- ---------------
<S> <C> <C>
Shares sold 56,941,300 45,564,905
Shares issued to shareholders in payment
of dividends declared 366,917 152,782
Shares redeemed (51,809,675) (35,769,015)
----------- -----------
Net change resulting from Fund share
transactions 5,498,542 9,948,672
=========== ===========
</TABLE>
- --------------------------------------------------------------------------------
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Investment Advisory Fee--M&I Investment Management Corp., the Funds'
investment adviser (the "Adviser"), receives for its services an annual
investment advisory fee based on a percentage of each Fund's average daily net
assets. The Adviser may voluntarily choose to waive all or a portion of its
fee. The Adviser can modify or terminate this voluntary waiver at any time at
its sole discretion.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FUNDS ANNUAL RATE
-----------
<S> <C>
Stock Fund 0.75%
Value Equity Fund 0.75%
Equity Income Fund 0.75%
Mid-Cap Stock Fund 0.75%
Short-Term Income Fund 0.60%
Intermediate Bond Fund 0.60%
Government Income Fund 0.75%
Short-Term Tax-Free Fund 0.50%
Intermediate Tax-Free Fund 0.60%
Money Market Fund 0.50%
</TABLE>
- --------------------------------------------------------------------------------
Administrative Fee--Federated Administrative Services ("FAS") provides the
Funds with certain administrative personnel and services. The FAS fee is based
on the level of average aggregate net assets of the Corporation for the period.
FAS may voluntarily choose to waive a portion of its fee.
Distribution Services Fee--The Money Market Fund has adopted a Distribution
Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the
Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the
principal distributor, from the net assets of the Fund to finance activities
intended to result in the sale of the Fund's Class B Shares. The Plan provides
that the Fund may incur distribution expenses up to 0.30 of 1% of the average
daily net assets of the Class B Shares, annually, to compensate FSC.
Shareholder Services Fee--Under the terms of a shareholder service agreement
with Marshall Funds Investors Services ("MFIS"), the Funds will pay MFIS up to
0.02 of 1% of the average daily net assets of each Fund for the period. This
fee is to obtain certain services for shareholders and to maintain shareholders
accounts.
Transfer and Dividend Disbursing Agent, Portfolio Accounting and Custody
Fees--Federated Services Company ("FServ") serves as transfer and dividend
disbursing agent for the Funds. The FServ fee is based on the size, type, and
number of accounts and transactions made by shareholders.
FServ also maintains the Funds' accounting records for which it receives a fee.
The fee is based on the level of each Fund's average net assets for the period
plus, out-of-pocket expenses.
Marshall and Ilsley Trust Company is the Funds' custodian for which it receives
a fee. The custodian's fee is based on the level of each Fund's average net
assets for the period plus, out-of-pocket expenses.
Organizational Expenses--Organizational expenses were borne initially by FAS.
The Funds have agreed to reimburse FAS for the organizational expenses during
the five year period following October 1, 1992 (date Stock Fund, Short-Term
Income Fund, Intermediate Bond Fund, Government Income Fund and Money Market
Fund became effective), August 28, 1993 (date Equity Income Fund, Value Equity
Fund, and Mid-Cap Stock Fund became effective), and December 28, 1993 (date
Short-Term Tax-Free Fund and Intermediate Tax-Free Fund became effective). For
the year ended February 28, 1995, the following amounts were paid to FAS
pursuant to this agreement.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
ORGANIZATIONAL ORGANIZATIONAL
EXPENSES EXPENSES PAID
FUNDS -------------- --------------
<S> <C> <C>
Stock Fund $30,018 $2,627
Value Equity Fund 18,485 1,232
Equity Income Fund 18,857 2,627
Mid-Cap Stock Fund 16,434 1,096
Short-Term Income Fund 23,033 2,183
Intermediate Bond Fund 23,413 1,921
Government Income Fund 22,735 1,854
Short-Term Tax-Free Fund 17,646 717
Intermediate Tax-Free Fund 16,416 700
Money Market Fund 59,536 5,487
</TABLE>
- --------------------------------------------------------------------------------
Certain of the Officers and Directors of the Corporation are Officers and
Directors or Trustees of the above companies.
5. INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
six months ended February 28, 1995, were as follows:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PURCHASES SALES
FUNDS ------------ ------------
<S> <C> <C>
Stock Fund $ 89,981,068 $ 80,656,652
Value Equity Fund 94,268,104 100,151,146
Equity Income Fund 39,246,011 14,245,578
Mid-Cap Stock Fund 56,408,338 33,704,353
Short-Term Income Fund 46,510,733 62,867,604
Intermediate Bond Fund 258,698,841 274,699,156
Government Income Fund 65,708,472 47,001,380
Short-Term Tax-Free Fund 9,812,697 10,976,894
Intermediate Tax-Free Fund 19,395,940 15,834,986
</TABLE>
- --------------------------------------------------------------------------------
DIRECTORS OFFICERS
Ody J. Fish Edward C. Gonzales
Chairman and Treasurer
John DeVincentis
Edward C. Gonzales James F. Duca, II
President
Paul E. Hassett
Joseph S. Machi
Vice President and Assistant Treasurer
Peter J. Germain
Secretary
Victor R. Siclari
Assistant Secretary
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus which contains facts
concerning their objective and policies, management fees, expenses, and other
information.
A1. The bar chart is a visual fund profile representation of Marshall
Stock Fund for the semi-annual period ended February 28, 1995. The "x"
axis reflects the hypothetical level of risk, and the "y" axis reflects
hypothetical potential return.
A2. The bar chart is a visual fund profile representation of Marshall
Value Equity Fund for the six-month period ended February 28, 1995. The
"x" axis reflects the hypothetical level of risk, and the "y" axis
reflects hypothetical potential return.
A3. The bar chart is a visual fund profile representation of Marshall
Equity Income Fund for the six-month period ended February 28, 1995.
The "x" axis reflects the hypothetical level of risk, and the "y" axis
reflects hypothetical potential return.
A4. The bar chart is a visual fund profile representation of Marshall
Mid-Cap Stock Fund for the six-month period ended February 28, 1995.
The "x" axis reflects the hypothetical level of investment risk, and the
"y" axis reflects hypothetical potential return.
A5. The bar chart is a visual fund profile representation of Marshall
Short-Term Income Fund for the six-month period ended February 28, 1995.
The "x" axis reflects the hypothetical level of risk, and the "y" axis
reflects hypothetical potential return.
A6. The bar chart is a visual fund profile representation of Marshall
Intermediate Bond Fund for the six-month period ended February 28, 1995.
The "x" axis reflects the hypothetical level of risk, and the "y" axis
reflects hypothetical potential return.
A7. The bar chart is a visual fund profile representation of Marshall
Government Income Fund for the six-month period ended February 28, 1995.
The "x" axis reflects the hypothetical level of risk, and the "y" axis
reflects hypothetical potential return.
A8. The bar chart is a visual fund profile representation of Marshall
Short-Term Tax-Free Fund for the six months ended February 28, 1995.
The "x" axis reflects the hypothetical level of risk, and the "y" axis
reflects hypothetical potential return.
A9. The bar chart is a visual fund profile representation of Marshall
Intermediate Tax-Free Fund for the six-months ended February 28, 1995.
The "x" axis reflects the hypothetical level of risk, and the "y" axis
reflects hypothetical potential return.
A10. The bar chart is a visual fund profile representation of Marshall
Money Market Fund for the six-month period ended February 28, 1995. The
"x" axis reflects the hypothetical level of risk, and the "y" axis
reflects hypothetical potential return.
