MONEY
MARKET
FUND
MARK
TWAIN
FUNDS
SEMI-ANNUAL REPORT
MARCH 31, 1994
PRESIDENT'S MESSAGE
- - --------------------------------------------------------------------------------
Dear Investor:
I'm pleased to present you with the Semi-Annual Report for the Mark Twain
Government Money Market Portfolio (the "Fund"). This report covers the six-month
period ending March 31,1994.
It contains complete financial information--including an Investment Review with
the Fund's manager and the Fund's Portfolio of Investments. In addition,
Financial Highlights tables have been included for Trust Shares and Investment
Shares.
Thank you for putting your cash to work through the Fund's diversified portfolio
of U.S. government money market securities. You always have access to your money
when you need it, and the peace of mind that comes with knowing the Fund's
managers strive to maintain a stable share value--which means each dollar you
invest can be redeemed for a dollar, plus any earned income.*
We'll continue to keep you informed about your investment on a regular basis,
and we welcome your questions, comments, or suggestions.
Sincerely,
Edward C. Gonzales
President
May 15, 1994
* Although money market funds seek to maintain a stable net asset value of $1 a
share, there is no guarantee that they will be able to do so.
INVESTMENT REVIEW
- - --------------------------------------------------------------------------------
The Mark Twain Government Money Market Portfolio (the "Fund") had $152.9 million
in total net assets as of March 31, 1994, with 71% of the Fund's portfolio
invested in U.S. government and agency obligations, and 29% invested in
repurchase agreements. At March 31, 1994, the average maturity was 30 days.
Short term interest rates moved higher during the period, as the Federal Reserve
tightened monetary policy for the first time in five years.
We expect short term interest rates will continue to rise during the year with
the probability of rates being 1/2 of one percent above current levels by year
end. In order to take advantage of a rising rate environment, we have kept the
Fund's average maturity relatively short.
MARK TWAIN GOVERNMENT MONEY MARKET PORTFOLIO
PORTFOLIO OF INVESTMENTS
MARCH 31, 1994
(UNAUDITED)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
OR SHARES VALUE
- - ------------ ---------------------------------------------------------------- ------------
<C> <C> <S> <C>
SHORT-TERM OBLIGATIONS--70.99%
- - ------------------------------------------------------------------------------------
* FEDERAL FARM CREDIT BANK, DISCOUNT NOTES--19.55%
----------------------------------------------------------------
$ 30,000,000 3.38%-3.61%, 4/5/94-5/26/94 $ 29,911,025
----------------------------------------------------------------
* FEDERAL HOME LOAN BANK, DISCOUNT NOTES--13.03%
----------------------------------------------------------------
20,000,000 3.21%-3.62%, 4/6/94-6/21/94 19,929,016
----------------------------------------------------------------
* FEDERAL HOME LOAN MORTGAGE CORPORATION, DISCOUNT NOTES--9.78%
----------------------------------------------------------------
15,000,000 3.36%-3.57%, 4/4/94-5/25/94 14,965,614
----------------------------------------------------------------
* FEDERAL NATIONAL MORTGAGE ASSOCIATION, DISCOUNT NOTES--9.14%
----------------------------------------------------------------
14,000,000 3.29%-3.49%, 4/4/94-4/20/94 13,984,487
----------------------------------------------------------------
U.S. TREASURY BILLS--19.49%
----------------------------------------------------------------
30,000,000 5/5/94-7/28/94 29,807,513
---------------------------------------------------------------- ------------
TOTAL SHORT-TERM OBLIGATIONS 108,597,655
---------------------------------------------------------------- ------------
CASH EQUIVALENTS--.02%
- - ------------------------------------------------------------------------------------
23,055 SEI Treasury Portfolio 23,055
---------------------------------------------------------------- ------------
**REPURCHASE AGREEMENTS--29.21%
- - ------------------------------------------------------------------------------------
20,000,000 Sanwa-BGK Securities, Co., 3.40%, dated 3/31/94, due 4/4/94 20,000,000
----------------------------------------------------------------
24,675,000 Morgan Stanley & Co., Inc., 3.48%, dated 3/31/94, due 4/4/94 24,675,000
---------------------------------------------------------------- ------------
TOTAL REPURCHASE AGREEMENTS (NOTE 2B) 44,675,000
---------------------------------------------------------------- ------------
TOTAL INVESTMENTS, AT AMORTIZED COST $153,295,710+
---------------------------------------------------------------- ------------
</TABLE>
* Each issue shows the rate of discount at the time of purchase.
** The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio.
+ Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($152,970,080) at March 31, 1994.
(See Notes which are an integral part of the Financial Statements)
MARK TWAIN GOVERNMENT MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1994
(UNAUDITED)
- - --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- - --------------------------------------------------------------------------------
Investments in repurchase agreements (Note 2B) $ 44,675,000
- - -----------------------------------------------------------------
Investments in other securities 108,620,710
- - ----------------------------------------------------------------- ------------
Total investments, at amortized cost and value (Note 2A) $153,295,710
- - --------------------------------------------------------------------------------
Cash 201
- - --------------------------------------------------------------------------------
Interest receivable 4,370
- - --------------------------------------------------------------------------------
Prepaid/Deferred expenses (Note 2F) 72,354
- - -------------------------------------------------------------------------------- ------------
Total assets 153,372,635
- - --------------------------------------------------------------------------------
LIABILITIES:
- - --------------------------------------------------------------------------------
Dividends payable 402,555
- - -------------------------------------------------------------------------------- ------------
NET ASSETS for 152,970,080 shares of beneficial interest outstanding $152,970,080
- - -------------------------------------------------------------------------------- ------------
NET ASSETS VALUE, Offering Price, and Redemption Price Per Share:
- - --------------------------------------------------------------------------------
Trust Shares ($152,966,258 / 152,966,258 shares of beneficial interest
outstanding) $1.00
- - -------------------------------------------------------------------------------- ------------
Investment Shares ($3,822 / 3,822 shares of beneficial interest outstanding) $1.00
- - -------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MARK TWAIN GOVERNMENT MONEY MARKET PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MARCH 31, 1994
(UNAUDITED)
- - --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- - ---------------------------------------------------------------------------------
Interest income (Note 2C) $2,495,840
- - ---------------------------------------------------------------------------------
EXPENSES--
- - ---------------------------------------------------------------------------------
Investment advisory fee (Note 4) $392,047
- - ----------------------------------------------------------------------
Administrative personnel and services fee (Note 4) 116,696
- - ----------------------------------------------------------------------
Custodian fees (Note 4) 14,735
- - ----------------------------------------------------------------------
Recordkeeper fees (Note 4) 23,994
- - ----------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses (Note 4) 21,612
- - ----------------------------------------------------------------------
Legal fees 1,978
- - ----------------------------------------------------------------------
Trustees' fees 2,052
- - ----------------------------------------------------------------------
Auditing fees 4,504
- - ----------------------------------------------------------------------
Registration costs 13,855
- - ----------------------------------------------------------------------
Distribution services fee (Note 4) 10
- - ----------------------------------------------------------------------
Printing and postage 4,124
- - ----------------------------------------------------------------------
Insurance premiums 4,632
- - ----------------------------------------------------------------------
Miscellaneous 2,659
- - ---------------------------------------------------------------------- --------
Total expenses 602,898
- - ----------------------------------------------------------------------
Deduct--
- - ----------------------------------------------------------------------
Waiver of investment advisory fee (Note 4) 15
- - ----------------------------------------------------------------------
Waiver of distribution services fee (Note 4) 4
- - ---------------------------------------------------------------------- --------
Net expenses 602,879
- - --------------------------------------------------------------------------------- ----------
Net investment income $1,892,961
- - --------------------------------------------------------------------------------- ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MARK TWAIN GOVERNMENT MONEY MARKET PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
------------------------------
1994* 1993**
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- - ---------------------------------------------------------------
OPERATIONS--
- - ---------------------------------------------------------------
Net investment income $ 1,892,961 $ 2,947,911
- - --------------------------------------------------------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2C)--
- - ---------------------------------------------------------------
Dividends to shareholders from net investment income
- - ---------------------------------------------------------------
Trust shares (1,892,909) (2,947,815)
- - ---------------------------------------------------------------
Investment shares (52) (96)
- - --------------------------------------------------------------- ------------- -------------
Change in net assets resulting from distributions to
shareholders (1,892,961) (2,947,911)
- - --------------------------------------------------------------- ------------- -------------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)--
- - ---------------------------------------------------------------
Proceeds from sale of shares 270,545,886 486,456,340
- - ---------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
dividends declared 49 86
- - ---------------------------------------------------------------
Cost of shares redeemed (268,895,930) (335,236,351)
- - --------------------------------------------------------------- ------------- -------------
Change in net assets resulting from Fund share
transactions 1,650,005 151,220,075
- - --------------------------------------------------------------- ------------- -------------
Change in net assets 1,650,005 151,220,075
- - ---------------------------------------------------------------
NET ASSETS:
- - ---------------------------------------------------------------
Beginning of period 151,320,075 100,000
- - --------------------------------------------------------------- ------------- -------------
End of period $ 152,970,080 $ 151,320,075
- - --------------------------------------------------------------- ------------- -------------
</TABLE>
* Six months ended March 31, 1994 (unaudited).
** For the period from November 9, 1992 (start of business) to September 30,
1993.
(See Notes which are an integral part of the Financial Statements)
MARK TWAIN GOVERNMENT MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS--TRUST SHARES
- - --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30,
-------------------
1994* 1993**
------ ------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00
- - --------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- - --------------------------------------------------------------------
Net investment income 0.01 0.02
- - -------------------------------------------------------------------- ------ -----
LESS DISTRIBUTIONS
- - --------------------------------------------------------------------
Dividends to shareholders from net investment income (0.01) (0.02 )
- - -------------------------------------------------------------------- ------ -----
NET ASSET VALUE, END OF PERIOD $1.00 $1.00
- - -------------------------------------------------------------------- ------ -----
TOTAL RETURN*** 1.20% 1.86 %
- - --------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- - --------------------------------------------------------------------
Expenses 0.77%(b) 0.73 %(b)
- - --------------------------------------------------------------------
Net investment income 2.42%(b) 2.40 %(b)
- - --------------------------------------------------------------------
Expense waiver/reimbursement (a) 0.00%(b) 0.00 %(b)
- - --------------------------------------------------------------------
SUPPLEMENTAL DATA
- - --------------------------------------------------------------------
Net assets, end of period (000 omitted) $152,966 $151,311
- - --------------------------------------------------------------------
</TABLE>
* Six months ended March 31, 1994 (unaudited).
** Reflects operations for the period from December 21, 1992 (date of initial
public investment) to September 30, 1993. For the period from November 9,
1992 (start of business) to December 20, 1992, net investment income
aggregating $342 was distributed to Federated Administrative Services.
*** Based on net asset value which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(b) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
MARK TWAIN GOVERNMENT MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS--INVESTMENT SHARES
- - --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30,
-------------------
1994* 1993**
------ ------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00
- - --------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- - --------------------------------------------------------------------
Net investment income 0.01 0.02
- - -------------------------------------------------------------------- ------ -----
LESS DISTRIBUTIONS
- - --------------------------------------------------------------------
Dividends to shareholders from net investment income (0.01) (0.02 )
- - -------------------------------------------------------------------- ------ -----
NET ASSET VALUE, END OF PERIOD $1.00 $1.00
- - -------------------------------------------------------------------- ------ -----
TOTAL RETURN*** 1.08% 1.75 %(a)
- - --------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- - --------------------------------------------------------------------
Expenses 1.01%(b) 0.98 %(b)
- - --------------------------------------------------------------------
Net investment income 2.15%(b) 2.30 %(b)
- - --------------------------------------------------------------------
Expense waiver/reimbursement (a) 0.16%(b) 0.00 %(b)
- - --------------------------------------------------------------------
SUPPLEMENTAL DATA
- - --------------------------------------------------------------------
Net assets, end of period (000 omitted) $4 $9
- - --------------------------------------------------------------------
</TABLE>
* Six months ended March 31, 1994 (unaudited).
** Reflects operations for the period from April 8, 1993 (date of initial
public investment) to September 30, 1993.
*** Based on net asset value which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(b) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
MARK TWAIN GOVERNMENT MONEY MARKET PORTFOLIO
(A PORTFOLIO OF THE MARK TWAIN FUNDS)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1994
(UNAUDITED)
- - --------------------------------------------------------------------------------
(1) ORGANIZATION
Mark Twain Funds (the "Trust"), is registered under the Investment Company Act
of 1940, as amended, as an open-end, management investment company. The Trust
consists of four separate diversified investment portfolios (individually
referred to as the "Fund", or collectively as the "Funds"): Mark Twain Equity
Portfolio ("Equity Fund"), Mark Twain Fixed Income Portfolio ("Fixed Income
Fund"), Mark Twain Government Money Market Portfolio ("Government Money Market
Fund"), and Mark Twain Municipal Income Portfolio ("Municipal Income Fund"). The
Mark Twain Government Money Market Portfolio is offered in two classes of
shares: Trust Shares and Investment Shares. Investment Shares are identical in
all respects to Trust Shares, except that Investment Shares are sold pursuant to
a distribution plan ("Plan") adopted in accordance with Investment Company Act
Rule 12b-1. 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 only those of the Government Money Market Fund.
The financial statements of the other Funds are presented separately.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles (GAAP).
<TABLE>
<S> <C>
A. INVESTMENT VALUATIONS--The 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.
Investments in other regulated investment companies are valued at net asset value.
B. REPURCHASE AGREEMENTS--It is the policy of the Fund to require the custodian bank to take
possession, to have legally segregated in the Federal Reserve Book Entry System or to
have 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 Fund to monitor, on a daily basis, the market value of each repurchase
agreement's underlying collateral to ensure the value at least equals the principal
amount of the repurchase agreement, including accrued interest.
The Fund will only enter into repurchase agreements with banks and other recognized
financial institutions, such as broker/dealers, which are deemed by the Fund's adviser to
be creditworthy pursuant to guidelines established by the Trustees. Risks may arise from
the potential inability of
</TABLE>
MARK TWAIN GOVERNMENT MONEY MARKET PORTFOLIO
- - --------------------------------------------------------------------------------
<TABLE>
<S> <C>
counterparties to honor the terms of the repurchase agreement. Accordingly, the Fund
could receive less than the repurchase price on the sale of collateral securities.
C. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and estimated expenses are
accrued daily. Bond premium and discount are amortized as required by the Internal
Revenue Code. Distributions to shareholders are recorded on the ex-dividend date.
D. FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute to
shareholders each year all of its taxable income. Accordingly, no provisions for federal
income tax is necessary.
E. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in when-issued or
delayed delivery transactions. The Fund records when-issued securities and maintains
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 the 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 over a period
of five years from the Fund's commencement date.
G. OTHER--Investment transactions are accounted for on the trade date.
</TABLE>
MARK TWAIN GOVERNMENT MONEY MARKET PORTFOLIO
- - --------------------------------------------------------------------------------
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. At March 31, 1994, capital paid-in aggregated $152,970,080.
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
-----------------------------
TRUST SHARES 1994* 1993**
- - --------------------------------------------------------------- ------------ ------------
<S> <C> <C>
Shares outstanding, beginning of period 151,311,139 100,000
- - ---------------------------------------------------------------
Shares sold 270,545,886 486,443,490
- - ---------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared -- --
- - ---------------------------------------------------------------
Shares redeemed (268,890,767) (335,232,351)
- - --------------------------------------------------------------- ------------ ------------
Shares outstanding, end of period 152,966,258 151,311,139
- - --------------------------------------------------------------- ------------ ------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
-----------------------------
INVESTMENT SHARES 1994* 1993***
- - --------------------------------------------------------------- ------------ ------------
<S> <C> <C>
Shares outstanding, beginning of period 8,936 --
- - ---------------------------------------------------------------
Shares sold -- 12,850
- - ---------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 49 86
- - ---------------------------------------------------------------
Shares redeemed (5,163) (4,000)
- - --------------------------------------------------------------- -------- --------
Shares outstanding, end of period 3,822 8,936
- - --------------------------------------------------------------- -------- --------
</TABLE>
* Six months ended March 31, 1994.
** For the period from November 9, 1992 (start of business) to September 30,
1993.
*** For the period from April 8, 1993 (date of initial public investment) to
September 30, 1993.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Mark Twain Bank, the Funds' investment adviser ("Adviser"), receives for its
services an annual investment advisory fee equal to .50 of 1% of the Fund's
average daily net assets. Adviser may voluntarily choose to waive a portion of
its fee and reimburse certain operating expenses of the Fund. Adviser can modify
or terminate this voluntary waiver and reimbursement at any time at its sole
discretion.
Federated Administrative Services ("FAS") provides the Fund with certain
administrative personnel and services. The fee is based on the level of average
aggregate net assets of the Trust for the period. FAS may voluntarily choose to
waive a portion of its fee.
MARK TWAIN GOVERNMENT MONEY MARKET PORTFOLIO
- - --------------------------------------------------------------------------------
Organizational expenses of $34,683 were borne initially by FAS. The Fund has
agreed to reimburse FAS during the five year period following the date the
Trust's portfolio became effective. For the six months ended March 31, 1994, the
Fund paid $1,404 pursuant to this agreement.
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1
under the Investment Company Act of 1940. The Fund will compensate Federated
Securities Corp. ("FSC"), the principal distributor, from the net assets of
Investment Shares of the Fund to finance activities intended to result in the
sale of Investment Shares of the Fund. The Plan provides that the Fund may incur
distribution expenses up to .40 of 1% of the average daily net assets of the
Investment Shares, annually, to compensate FSC.
Federated Services Company (FServ) serves as transfer agent and dividend
disbursing agent for the Fund. The fee is based on size, type and number of
accounts and transactions made by the shareholders.
FServ also maintains the Fund's accounting records. The fee is based on the
level of average net assets for the period plus out-of-pocket expenses.
Mark Twain Bank is the Fund custodian. The fee is based on the level of average
net assets for the period plus out-of-pocket expenses.
Certain of the Officers and Trustees of the Fund are Officers and Trustees of
the above companies.
<TABLE>
<S> <C>
TRUSTEES OFFICERS
- - -----------------------------------------------------------------------------
John F. Donahue John F. Donahue
John T. Conroy, Jr. Chairman
William J. Copeland Edward C. Gonzales
James E. Dowd President and Treasurer
Lawrence D. Ellis, M.D. Charles L. Davis, Jr.
Edward L. Flaherty, Jr. Vice President and Assistant Treasurer
Edward C. Gonzales J. Christopher Donahue
Peter E. Madden Vice President
Gregor F. Meyer Richard B. Fisher
Wesley W. Posvar Vice President
Marjorie P. Smuts John W. McGonigle
Vice President and Secretary
John A. Staley, IV
Vice President
David M. Taylor
Assistant Treasurer
C. Grant Anderson
Assistant Secretary
</TABLE>
Mutual funds are not obligations of, or insured by, any bank, nor are they
insured
by the federal government or any of its agencies.
This report is authorized for distribution to prospective investors only when
preceded
or accompanied by the Fund's prospectus which contains facts concerning its
objective and policies, management fees, expenses, and other information.
March 31, 1994
3041403 (5/94)
EQUITY AND
INCOME
FUNDS
MARK
TWAIN
FUNDS
COMBINED SEMI-ANNUAL REPORT
MARCH 31, 1994
3041404 (5/94)
PRESIDENT'S MESSAGE
- - --------------------------------------------------------------------------------
Dear Investor:
I'm pleased to present you with the Semi-Annual Report for your investment in
the Mark Twain Funds. This report covers the six-month period ending March 31,
1994.
This report contains complete financial information--including an Investment
Review from the portfolio manager and a list of holdings--for the Mark Twain
Equity Portfolio, Mark Twain Fixed Income Portfolio, and Mark Twain Municipal
Income Portfolio.
Thank you for selecting the Mark Twain Funds to put your money to work. We'll
continue to keep you informed on your investment. Your questions, comments, or
suggestions are always welcome.
Sincerely,
Edward C. Gonzales
President
May 15, 1994
INVESTMENT REVIEW
- - --------------------------------------------------------------------------------
MARK TWAIN EQUITY PORTFOLIO
As of March 31, 1994, the Mark Twain Equity Portfolio (the "Equity Fund") had
$29.8 million in total net assets.
During the first quarter, interest rates increased well beyond levels forecasted
by economists a short four months ago. This rather dramatic rise in interest
rates played havoc with common stock prices. It was a somewhat volatile 90 days
as January turned in a fine performance, but February took a good deal of this
gain back. While the first half of March again rewarded equity holders, rising
interest rates again took their toll after that. The late March selling was so
severe, in fact, that it left a number of market analysts proclaiming that a new
bear market was underway following three years of rising stock prices.
We expect equity performance to be impeded as long as the bond market is
afflicted with inflation worries and the current economic "growth scare." We
find it interesting that many on "Wall Street" are concerned about too much
economic growth and are making this out to be negative. We believe that the
economic numbers, while strong, are not at danger levels, and that this is a
precursor of rising corporate earnings which is what "drives" equity prices in
the long-run.
However, we expect the bond market to stabilize and expect long-term interest
rates will fall from current levels by year end, due to a slowing of the
economy. Once the bond market is calm, we believe equity investors will refocus
on: (1) long-term profit growth with anticipated double digit gains in both 1994
and 1995, (2) a resumption of dividend growth, (3) favorable long-term demand
for equities, and (4) better equity valuations. Most of the first quarter
volatility has been reactions to "head-line fears" and, of course, the Federal
Reserve Board's (the "Fed") action to increase short-term interest rates.
Because of recent conditions, we have been somewhat defensive in our strategy.
We have been a little more active than normal because of market conditions and
our reserves have increased moderately. However, our basic philosophy remains
unchanged--to invest in large to medium high-quality companies with proven
records.
Notwithstanding the current economic concerns, we believe there will be
excellent opportunities in the coming years for those companies that make and
deliver fine products and services; our goal is to search them out.
History demonstrates over and over this approach produces basically the best
investment returns available.
MARK TWAIN FIXED INCOME PORTFOLIO
The Mark Twain Fixed Income Portfolio (the "Fixed Income Fund") had total net
assets of $38.3 million as of March 31, 1994. The Fixed Income Fund had an
average maturity of 12.9 years. In keeping with our philosophy of investing in
high-quality securities, 58% of the "Fund's" assets were invested in U.S.
Treasury and Government Agencies.
- - --------------------------------------------------------------------------------
Interest rates in all maturities increased during the period. A combination of
the Fed's tightening and the feeling by market participants that a stronger
economy would lead to higher inflation, were some of the reasons for the rise in
rates.
While short-term rates are likely to rise more in the near-term, the selloff in
the longer-term bond market has probably been overdone as consumer prices in the
twelve months ended March 1994 were up 2.5% versus 2.7% last year. We would
expect the recent rise in interest rates to produce a slower economic growth
rate in the later part of the year and, consequently, lead to lower long-term
interest rates. Even though the past several months have been a difficult period
for the bond market, we strongly feel our basic philosophy of investing in
high-quality securities and seeking value in the bond market will prove to be
the correct long-term strategy.
MARK TWAIN MUNICIPAL INCOME PORTFOLIO
The Mark Twain Municipal Income Portfolio (the "Municipal Income Fund") began
operations on February 1, 1993. During the six-month period ended March 31,
1994, the bond market began a correction caused by fears of anticipated future
inflation. Near the end of the period, the municipal market became very
volatile. The market erosion which started in mid February accelerated at
quarter's end. The magnitude of the erosion was the greatest since March-May
1987. Net cash flow into open-ended funds slowed dramatically in February and
turned slightly negative in March. The shift in psychology to a bearish outlook,
fueled by the Fed's two increases in short-term interest rates to 3.50%, was
accompanied by heavy bond sales by nervous mutual fund managers. Managers sold
bonds in anticipation of redemption by unit holders, due to anticipated reaction
to negative short-term performance returns.
The Municipal Income Fund reduced its average maturity and duration slightly
during the past six months. The "Fund" continued to become more defensive by
acquiring more premium or "cushion" bonds to protect principal in a down market,
while increasing current yield. We anticipate market volatility to continue
until the Fed has finished raising short-term rates in an attempt to hold future
inflation low. We expect a slowing of the economy later this year as a result of
these rate increases. As always, we will attempt to provide unit holders with
continued consistent tax exempt income from high-quality municipal securities.**
**Income may be subject to the federal alternative minimum tax and state and
local taxes.
- - --------------------------------------------------------------------------------
MARK TWAIN EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
MARCH 31, 1994
(UNAUDITED)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- - ---------- ------------------------------------------------------------------- -----------
<C> <C> <S> <C>
COMMON STOCKS--97.4%
- - --------------------------------------------------------------------------------------
CHEMICALS--2.6%
-------------------------------------------------------------------
6,000 Great Lakes Chemical Corp. $ 423,000
-------------------------------------------------------------------
3,000 Hercules, Inc. 344,250
------------------------------------------------------------------- -----------
Total 767,250
------------------------------------------------------------------- -----------
CONSUMER DURABLES--12.9%
-------------------------------------------------------------------
15,000 Briggs & Stratton Corp. 1,260,000
-------------------------------------------------------------------
15,000 Federal Mogul Corp. 442,500
-------------------------------------------------------------------
2,000 Foster Wheeler Corp. 80,000
-------------------------------------------------------------------
10,000 Kansas City Southern Industries, Inc. 506,250
-------------------------------------------------------------------
5,000 Louisiana Pacific Corp. 180,625
-------------------------------------------------------------------
40,000 Mattel, Inc. 1,005,000
-------------------------------------------------------------------
22,000 Standard Motor Products, Inc. 357,500
------------------------------------------------------------------- -----------
Total 3,831,875
------------------------------------------------------------------- -----------
CONSUMER NON-DURABLES--6.9%
-------------------------------------------------------------------
5,000 Bausch & Lomb, Inc. 235,000
-------------------------------------------------------------------
6,000 Colgate Palmolive Co. 347,250
-------------------------------------------------------------------
15,000 Philip Morris Companies, Inc. 761,250
-------------------------------------------------------------------
3,000 Premark International, Inc. 216,000
-------------------------------------------------------------------
20,000 UST, Inc. 495,000
------------------------------------------------------------------- -----------
Total 2,054,500
------------------------------------------------------------------- -----------
</TABLE>
MARK TWAIN EQUITY PORTFOLIO
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- - ---------- ------------------------------------------------------------------- -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- - --------------------------------------------------------------------------------------
ELECTRONIC TECHNOLOGY--8.1%
-------------------------------------------------------------------
6,000 Avnet Inc. $ 228,750
-------------------------------------------------------------------
2,000 CTS Corp. 43,500
-------------------------------------------------------------------
21,000 Micron Technology 1,753,500
-------------------------------------------------------------------
5,000 Texas Instruments, Inc. 386,250
------------------------------------------------------------------- -----------
Total 2,412,000
------------------------------------------------------------------- -----------
ENERGY--2.3%
-------------------------------------------------------------------
7,000 Anadarko Petroleum Corp. 322,000
-------------------------------------------------------------------
7,000 Ashland Oil Co. 285,250
-------------------------------------------------------------------
2,000 Sun Inc. 64,750
------------------------------------------------------------------- -----------
Total 672,000
------------------------------------------------------------------- -----------
FINANCE--14.1%
-------------------------------------------------------------------
7,000 American Express Co. 193,375
-------------------------------------------------------------------
8,000 Centex Corp. 247,000
-------------------------------------------------------------------
5,000 Federal Home Loan Mortgage Corp. 253,750
-------------------------------------------------------------------
14,000 Federal National Mortgage Assn. 1,088,500
-------------------------------------------------------------------
20,000 Green Tree Financial Corp. 892,500
-------------------------------------------------------------------
15,000 MBNA Corp. 316,875
-------------------------------------------------------------------
11,000 Merrill Lynch & Co., Inc. 409,750
-------------------------------------------------------------------
10,000 Morgan Stanley Group, Inc. 640,000
-------------------------------------------------------------------
5,000 Pulte Corp. 145,000
------------------------------------------------------------------- -----------
Total 4,186,750
------------------------------------------------------------------- -----------
FOOD & BEVERAGE--0.6%
-------------------------------------------------------------------
5,000 Pepsico, Inc. 183,125
------------------------------------------------------------------- -----------
HEALTH TECHNOLOGY--10.6%
-------------------------------------------------------------------
17,000 Abbott Laboratories 452,625
-------------------------------------------------------------------
15,000 Johnson & Johnson 566,250
-------------------------------------------------------------------
</TABLE>
MARK TWAIN EQUITY PORTFOLIO
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- - ---------- ------------------------------------------------------------------- -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- - --------------------------------------------------------------------------------------
HEALTH TECHNOLOGY--CONTINUED
-------------------------------------------------------------------
12,000 Medtronic, Inc. $ 960,000
-------------------------------------------------------------------
10,000 Owens & Minor, Inc. 227,500
-------------------------------------------------------------------
17,000 Schering Plough Corp. 956,250
------------------------------------------------------------------- -----------
Total 3,162,625
------------------------------------------------------------------- -----------
INSURANCE--3.0%
-------------------------------------------------------------------
7,000 Washington National Corp. 164,500
-------------------------------------------------------------------
8,000 American International Group 673,000
-------------------------------------------------------------------
2,000 Travelers Inc. 70,250
------------------------------------------------------------------- -----------
Total 907,750
------------------------------------------------------------------- -----------
MACHINERY, EQUIPMENT, AUTO--10.4%
-------------------------------------------------------------------
25,000 Chrysler Corp. 1,290,625
-------------------------------------------------------------------
10,000 Cummins Engine Co., Inc. 492,500
-------------------------------------------------------------------
3,000 Ford Motor Co. 176,250
-------------------------------------------------------------------
20,000 General Motors Corp. 685,000
-------------------------------------------------------------------
1,000 Nucor Corp. 60,625
-------------------------------------------------------------------
10,000 Trinity Industries, Inc. 380,000
------------------------------------------------------------------- -----------
Total 3,085,000
------------------------------------------------------------------- -----------
PROCESS INDUSTRIES--3.9%
-------------------------------------------------------------------
20,000 Armstrong World Industries, Inc. 1,080,000
-------------------------------------------------------------------
2,000 Cleveland Cliffs, Inc. 86,250
------------------------------------------------------------------- -----------
Total 1,166,250
------------------------------------------------------------------- -----------
PUBLISHING--3.2%
-------------------------------------------------------------------
25,000 Dow Jones & Co., Inc. 950,000
------------------------------------------------------------------- -----------
</TABLE>
MARK TWAIN EQUITY PORTFOLIO
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- - ---------- ------------------------------------------------------------------- -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- - --------------------------------------------------------------------------------------
RETAIL--6.6%
-------------------------------------------------------------------
25,000 Kroger Co. $ 596,875
-------------------------------------------------------------------
25,000 May Department Stores, Inc. 1,040,625
-------------------------------------------------------------------
4,000 Supervalu, Inc. 138,500
-------------------------------------------------------------------
7,000 Wal Mart Stores, Inc. 181,125
------------------------------------------------------------------- -----------
Total 1,957,125
------------------------------------------------------------------- -----------
TECHNOLOGY SERVICES--6.4%
-------------------------------------------------------------------
25,000 Computer Associates International, Inc. 771,875
-------------------------------------------------------------------
13,000 Loral Corp. 487,500
-------------------------------------------------------------------
30,000 Reynolds & Reynolds Co. 652,500
------------------------------------------------------------------- -----------
Total 1,911,875
------------------------------------------------------------------- -----------
TRANSPORTATION--0.3%
-------------------------------------------------------------------
3,000 Illinois Central Corp. 101,250
------------------------------------------------------------------- -----------
UTILITIES--4.8%
-------------------------------------------------------------------
15,000 American Telephone & Telegraph Co. 768,750
-------------------------------------------------------------------
4,000 Hong Kong Telecommunications 203,500
-------------------------------------------------------------------
10,000 Telecom Corp. of New Zealand 456,250
------------------------------------------------------------------- -----------
Total 1,428,500
------------------------------------------------------------------- -----------
OTHER--0.7%
-------------------------------------------------------------------
10,000 Brunswick Corp. 211,250
------------------------------------------------------------------- -----------
TOTAL COMMON STOCKS (IDENTIFIED COST, $28,897,844) 28,989,125
------------------------------------------------------------------- -----------
</TABLE>
MARK TWAIN EQUITY PORTFOLIO
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- - ---------- ------------------------------------------------------------------- -----------
<C> <C> <S> <C>
CASH EQUIVALENTS--2.5%
- - --------------------------------------------------------------------------------------
711,133 Goldman Sachs, Money Market Trust $ 711,133
-------------------------------------------------------------------
41,362 SEI, Liquid Cash Trust 41,362
------------------------------------------------------------------- -----------
TOTAL CASH EQUIVALENTS (AT NET ASSET VALUE) 752,495
------------------------------------------------------------------- -----------
TOTAL INVESTMENTS (IDENTIFIED COST, $29,650,339) $29,741,620+
------------------------------------------------------------------- -----------
</TABLE>
+ The cost of investments for federal tax purposes amounts to $29,650,339. The
net unrealized appreciation of investments on a federal tax basis amounts to
$91,281, which is comprised of $2,344,387 appreciation and $2,253,106
depreciation at March 31, 1994.
Note: The categories of investments are shown as a percentage of net assets
($29,767,299) at March 31, 1994.
(See Notes which are an integral part of the Financial Statements)
MARK TWAIN EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1994
(UNAUDITED)
- - --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- - --------------------------------------------------------------------------------
Investments in securities, at value (Note 2A)
(identified and tax cost $29,650,339) $29,741,620
- - --------------------------------------------------------------------------------
Cash 100
- - --------------------------------------------------------------------------------
Dividends receivable 46,973
- - --------------------------------------------------------------------------------
Interest receivable 3,169
- - --------------------------------------------------------------------------------
Deferred expenses (Note 2E) 9,966
- - -------------------------------------------------------------------------------- -----------
Total assets 29,801,828
- - --------------------------------------------------------------------------------
LIABILITIES:
- - ----------------------------------------------------------------------
Payable for Fund shares repurchased $ 1,912
- - ----------------------------------------------------------------------
Accrued expenses 32,617
- - ---------------------------------------------------------------------- -------
Total liabilities 34,529
- - -------------------------------------------------------------------------------- -----------
NET ASSETS for 3,115,963 shares of beneficial interest outstanding $29,767,299
- - -------------------------------------------------------------------------------- -----------
NET ASSETS CONSIST OF:
- - --------------------------------------------------------------------------------
Paid-in capital $31,066,750
- - --------------------------------------------------------------------------------
Unrealized appreciation of investments 91,281
- - --------------------------------------------------------------------------------
Accumulated undistributed net realized loss on investments (1,418,171)
- - --------------------------------------------------------------------------------
Undistributed net investment income 27,439
- - -------------------------------------------------------------------------------- -----------
Total Net Assets $29,767,299
- - -------------------------------------------------------------------------------- -----------
NET ASSET VALUE and Redemption Price Per Share:
($29,767,299 / 3,115,963 shares of beneficial interest outstanding) $9.55
- - -------------------------------------------------------------------------------- -----------
COMPUTATION OF OFFERING PRICE:
Offering Price Per Share (100/96.5 of $9.55)* $9.90
- - -------------------------------------------------------------------------------- -----------
</TABLE>
* See "What Shares Cost" in the prospectus.
(See Notes which are an integral part of the Financial Statements)
MARK TWAIN EQUITY PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MARCH 31, 1994
(UNAUDITED)
- - --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- - ---------------------------------------------------------------------------------------
Dividend income $ 297,360
- - ---------------------------------------------------------------------------------------
Interest income 27,439
- - --------------------------------------------------------------------------------------- -----------
Total investment income (Note 2B) 324,799
- - ---------------------------------------------------------------------------------------
EXPENSES:
- - ---------------------------------------------------------------------------------------
Investment advisory fee (Note 4) $120,253
- - ---------------------------------------------------------------------------
Administrative personnel and services fee (Note 4) 24,932
- - ---------------------------------------------------------------------------
Audit fees 7,134
- - ---------------------------------------------------------------------------
Registration fees 9,833
- - ---------------------------------------------------------------------------
Custodian fees (Note 4) 13,170
- - ---------------------------------------------------------------------------
Recordkeeper fees (Note 4) 25,614
- - ---------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses (Note 4) 14,556
- - ---------------------------------------------------------------------------
Legal fees 3,056
- - ---------------------------------------------------------------------------
Trustees' fees 684
- - ---------------------------------------------------------------------------
Printing and postage 6,153
- - ---------------------------------------------------------------------------
Insurance premiums 3,566
- - ---------------------------------------------------------------------------
Distribution services fee (Note 4) 40,072
- - ---------------------------------------------------------------------------
Miscellaneous 605
- - --------------------------------------------------------------------------- --------
Total expenses 269,628
- - ---------------------------------------------------------------------------
Deduct--
- - ---------------------------------------------------------------------------
Waiver of investment advisory fee (Note 4) $ 3,748
- - -----------------------------------------------------------------
Waiver of administrative personnel and services fee (Note 4) 1,018
- - -----------------------------------------------------------------
Waiver of distribution services fee (Note 4) 40,072 44,838
- - ----------------------------------------------------------------- ------- --------
Net expenses 224,790
- - --------------------------------------------------------------------------------------- -----------
Net investment income 100,009
- - --------------------------------------------------------------------------------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- - ---------------------------------------------------------------------------------------
Net realized gain (loss) on investments (identified cost basis) (1,418,121)
- - ---------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments 72,645
- - --------------------------------------------------------------------------------------- -----------
Net realized and unrealized loss on investments (1,345,476)
- - --------------------------------------------------------------------------------------- -----------
Change in net assets resulting from operations $(1,245,467)
- - --------------------------------------------------------------------------------------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MARK TWAIN EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
-----------------------------
1994* 1993**
----------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- - ---------------------------------------------------------------
OPERATIONS--
- - ---------------------------------------------------------------
Net investment income $ 100,009 $ 127,686
- - ---------------------------------------------------------------
Net realized gain (loss) on investments ($1,418,121 net loss
and $90,022 net gain, respectively, as computed for federal
tax purposes) (1,418,121) 90,022
- - ---------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on
investments 72,645 18,636
- - --------------------------------------------------------------- ----------- -----------
Change in net assets resulting from operations (1,245,467) 236,344
- - --------------------------------------------------------------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2B)--
- - ---------------------------------------------------------------
Dividends to shareholders from net investment income (84,978) (115,278)
- - ---------------------------------------------------------------
Distributions to shareholders from net realized gain on
investment transactions (90,072) --
- - --------------------------------------------------------------- ----------- -----------
Change in net assets resulting from distributions to
shareholders (175,050) (115,278)
- - --------------------------------------------------------------- ----------- -----------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)--
- - ---------------------------------------------------------------
Proceeds from sale of shares 4,952,410 39,189,778
- - ---------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
dividends declared 10,260 5,313
- - ---------------------------------------------------------------
Cost of shares redeemed (4,934,184) (8,156,827)
- - --------------------------------------------------------------- ----------- -----------
Change in net assets resulting from Fund share
transactions 28,486 31,038,264
- - --------------------------------------------------------------- ----------- -----------
Change in net assets (1,392,031) 31,159,330
- - ---------------------------------------------------------------
NET ASSETS:
- - ---------------------------------------------------------------
Beginning of period 31,159,330 --
- - --------------------------------------------------------------- ----------- -----------
End of period (including undistributed net investment income of
$27,439 and $12,408, respectively) $29,767,299 $31,159,330
- - --------------------------------------------------------------- ----------- -----------
</TABLE>
* Six months ended March 31, 1994 (unaudited).
** For the period from January 4, 1993 (date of initial public investment) to
September 30, 1993.
(See Notes which are an integral part of the Financial Statements)
MARK TWAIN EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER
30,
---------------------
1994* 1993**
------ ------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.02 $10.00
- - ----------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- - ----------------------------------------------------------------------------
Net investment income 0.03 0.04
- - ----------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.44) 0.02
- - ---------------------------------------------------------------------------- ------ -----
Total from investment operations (0.41) 0.06
- - ----------------------------------------------------------------------------
LESS DISTRIBUTIONS
- - ----------------------------------------------------------------------------
Dividends to shareholders from net investment income (0.03) (0.04 )
- - ----------------------------------------------------------------------------
Dividends to shareholders from net realized gain on investment
transactions (0.03) --
- - ---------------------------------------------------------------------------- ------ -----
Total distributions (0.06) (0.04 )
- - ---------------------------------------------------------------------------- ------ -----
NET ASSET VALUE, END OF PERIOD $ 9.55 $10.02
- - ---------------------------------------------------------------------------- ------ -----
TOTAL RETURN*** (4.18)% 0.60 %
- - ----------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- - ----------------------------------------------------------------------------
Expenses 1.40%(b) 1.32 %(b)
- - ----------------------------------------------------------------------------
Net investment income 0.62%(b) 0.62 %(b)
- - ----------------------------------------------------------------------------
Expense waiver/reimbursement (a) 0.28%(b) 0.30 %(b)
- - ----------------------------------------------------------------------------
SUPPLEMENTAL DATA
- - ----------------------------------------------------------------------------
Net assets, end of period (000 omitted) $29,767 $31,159
- - ----------------------------------------------------------------------------
Portfolio turnover rate 73% 54 %
- - ----------------------------------------------------------------------------
</TABLE>
* Six months ended March 31, 1994 (unaudited).
** Reflects operations for the period from January 4, 1993 (date of initial
public investment) to September 30, 1993.
*** Based on net asset value which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(b) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
MARK TWAIN FIXED INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
MARCH 31, 1994
(UNAUDITED)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- - ---------- ------------------------------------------------------------------- -----------
<C> <C> <S> <C>
CORPORATE BONDS--36.7%
- - --------------------------------------------------------------------------------------
AEROSPACE/DEFENSE--1.3%
-------------------------------------------------------------------
$ 500,000 Rockwell International Corp., 6.75%, 9/15/2002 $ 491,970
------------------------------------------------------------------- -----------
BANKING--2.6%
-------------------------------------------------------------------
500,000 Bankamerica Corp., 7.50%, 10/15/2002 497,175
-------------------------------------------------------------------
500,000 Nationsbank Corp., 6.875%, 2/15/2005 480,750
------------------------------------------------------------------- -----------
Total 977,925
------------------------------------------------------------------- -----------
CONSUMER PRODUCTS--3.9%
-------------------------------------------------------------------
1,000,000 Kimberly Clark Corp., 7.875%, 2/1/2023 1,002,890
-------------------------------------------------------------------
500,000 Philip Morris Cos., Inc., 7.125%, 12/1/99 508,500
------------------------------------------------------------------- -----------
Total 1,511,390
------------------------------------------------------------------- -----------
FINANCE--6.3%
-------------------------------------------------------------------
500,000 Ford Motor Credit Co., 7.50%, 1/15/2003 496,565
-------------------------------------------------------------------
500,000 General Motors Acceptance Corp., 7.00%, 3/1/2000 493,090
-------------------------------------------------------------------
500,000 MBNA Corp., 6.875%, 10/1/99 499,090
-------------------------------------------------------------------
1,000,000 Merrill Lynch & Co., Inc., 7.00%, 4/27/2008 938,070
------------------------------------------------------------------- -----------
Total 2,426,815
------------------------------------------------------------------- -----------
MULTI-LINE COMPANIES--2.6%
-------------------------------------------------------------------
1,000,000 Hanson PLC, 7.375%, 1/15/2003 993,300
------------------------------------------------------------------- -----------
OIL & GAS--2.4%
-------------------------------------------------------------------
1,000,000 Phillips Petroleum Co., 7.92%, 4/15/2023 937,520
------------------------------------------------------------------- -----------
RETAIL & APPAREL--5.0%
-------------------------------------------------------------------
1,000,000 Limited, Inc., 7.50%, 3/15/2023 935,430
-------------------------------------------------------------------
1,000,000 Wal Mart Stores, Inc., 7.25%, 6/1/2013 963,460
------------------------------------------------------------------- -----------
Total 1,898,890
------------------------------------------------------------------- -----------
</TABLE>
MARK TWAIN FIXED INCOME PORTFOLIO
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- - ---------- ------------------------------------------------------------------- -----------
<C> <C> <S> <C>
CORPORATE BONDS--CONTINUED
- - --------------------------------------------------------------------------------------
UTILITIES--12.6%
-------------------------------------------------------------------
$1,000,000 Duke Power Co., 7.375%, 3/1/2023 $ 939,950
-------------------------------------------------------------------
1,000,000 Illinois Power Co., 8.00%, 2/15/2023 972,830
-------------------------------------------------------------------
1,000,000 Long Island Lighting Co., 7.50%, 3/1/2007 933,870
-------------------------------------------------------------------
500,000 Midwest Power Systems, Inc., 7.00%, 2/15/2005 492,845
-------------------------------------------------------------------
1,000,000 Quebec Hydro Electric Co., 7.375%, 2/1/2003 993,680
-------------------------------------------------------------------
500,000 United Telephone Co. of Florida, 7.25%, 12/15/2004 500,790
------------------------------------------------------------------- -----------
Total 4,833,965
------------------------------------------------------------------- -----------
TOTAL CORPORATE BONDS (IDENTIFIED COST $14,382,585) 14,071,775
------------------------------------------------------------------- -----------
GOVERNMENT BONDS--60.5%
- - --------------------------------------------------------------------------------------
FOREIGN MUNICIPAL--2.5%
-------------------------------------------------------------------
500,000 Ontario Province, Canada, 7.375%, 1/27/2003 500,415
-------------------------------------------------------------------
500,000 Quebec Province, Canada, 7.125%, 2/9/2024 449,870
------------------------------------------------------------------- -----------
Total 950,285
------------------------------------------------------------------- -----------
GOVERNMENT AGENCIES--2.6%
-------------------------------------------------------------------
500,000 Federal Home Loan Bank, 6.32%, 2/1/2000 496,985
-------------------------------------------------------------------
500,000 Federal Home Loan Mortgage Corp., 7.23%, 12/17/2002 503,835
------------------------------------------------------------------- -----------
Total 1,000,820
------------------------------------------------------------------- -----------
U.S. TREASURY SECURITIES--55.4%
-------------------------------------------------------------------
500,000 United States Treasury Bill, 5/26/94 497,225
-------------------------------------------------------------------
800,000 United States Treasury Bill, 6/30/94 792,288
-------------------------------------------------------------------
3,000,000 United States Treasury Bond, 7.50%, 11/15/2016 3,077,280
-------------------------------------------------------------------
2,500,000 United States Treasury Bond, 8.00%, 11/15/2021 2,725,700
-------------------------------------------------------------------
1,000,000 United States Treasury Note, 5.50%, 7/31/97 991,920
-------------------------------------------------------------------
700,000 United States Treasury Note, 6.25%, 1/31/97 711,438
-------------------------------------------------------------------
1,250,000 United States Treasury Note, 7.00%, 9/30/96 1,297,088
-------------------------------------------------------------------
1,000,000 United States Treasury Note, 7.50%, 11/15/2001 1,049,860
-------------------------------------------------------------------
1,500,000 United States Treasury Note, 7.50%, 5/15/2002 1,575,030
-------------------------------------------------------------------
</TABLE>
MARK TWAIN FIXED INCOME PORTFOLIO
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
OR SHARES VALUE
- - ---------- ------------------------------------------------------------------- -----------
<C> <C> <S> <C>
GOVERNMENT BONDS--CONTINUED
- - --------------------------------------------------------------------------------------
U.S. TREASURY SECURITIES--CONTINUED
-------------------------------------------------------------------
$ 500,000 United States Treasury Note, 7.625%, 4/30/96 $ 522,820
-------------------------------------------------------------------
1,000,000 United States Treasury Note, 7.875%, 8/15/2001 1,071,540
-------------------------------------------------------------------
1,500,000 United States Treasury Note, 8.00%, 10/15/96 1,587,210
-------------------------------------------------------------------
1,500,000 United States Treasury Note, 8.00%, 1/15/97 1,590,795
-------------------------------------------------------------------
2,000,000 United States Treasury Note, 8.00%, 5/15/2001 2,157,100
-------------------------------------------------------------------
1,400,000 United States Treasury Note, 9.00%, 5/15/98 1,549,758
------------------------------------------------------------------- -----------
Total 21,197,052
------------------------------------------------------------------- -----------
TOTAL GOVERNMENT BONDS (IDENTIFIED COST $23,706,936) 23,148,157
------------------------------------------------------------------- -----------
PREFERRED STOCK--0.6%
- - --------------------------------------------------------------------------------------
FINANCE--0.6%
-------------------------------------------------------------------
10,000 Bear Stearns Cos., Inc., Series B (identified cost $250,000) 235,000
------------------------------------------------------------------- -----------
CASH EQUIVALENTS--0.7%
- - --------------------------------------------------------------------------------------
270,881 Goldman Sachs Money Market Fund (at net asset value) 270,881
------------------------------------------------------------------- -----------
TOTAL INVESTMENTS (IDENTIFIED COST $38,610,402) $37,725,813+
------------------------------------------------------------------- -----------
</TABLE>
+ The cost for federal tax purposes amounts to $38,610,402. The net unrealized
depreciation of investments on a federal tax basis amounts to $884,589, which
is comprised of $50,588 appreciation and $935,177 depreciation at March 31,
1994.
Note: The categories of investments are shown as a percentage of net assets
($38,287,680) at March 31, 1994.
(See Notes which are an integral part of the Financial Statements)
MARK TWAIN FIXED INCOME PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1994
(UNAUDITED)
- - --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- - --------------------------------------------------------------------------------
Investments in securities, at value (Note 2A)
(identified and tax cost $38,610,402) $37,725,813
- - --------------------------------------------------------------------------------
Cash 43,851
- - --------------------------------------------------------------------------------
Interest receivable 727,209
- - --------------------------------------------------------------------------------
Dividends receivable 4,925
- - --------------------------------------------------------------------------------
Deferred expenses (Note 2E) 12,378
- - -------------------------------------------------------------------------------- -----------
Total assets 38,514,176
- - --------------------------------------------------------------------------------
LIABILITIES:
- - ---------------------------------------------------------------------
Income distribution payable $193,567
- - ---------------------------------------------------------------------
Payable for Fund shares repurchased 8,488
- - ---------------------------------------------------------------------
Accrued expenses 24,441
- - --------------------------------------------------------------------- --------
Total liabilities 226,496
- - -------------------------------------------------------------------------------- -----------
NET ASSETS for 3,879,407 shares of beneficial interest outstanding $38,287,680
- - -------------------------------------------------------------------------------- -----------
NET ASSETS CONSIST OF:
- - --------------------------------------------------------------------------------
Paid-in capital $39,067,047
- - --------------------------------------------------------------------------------
Unrealized depreciation of investments (884,589)
- - --------------------------------------------------------------------------------
Accumulated undistributed net realized gain on investments 105,222
- - -------------------------------------------------------------------------------- -----------
Total Net Assets $38,287,680
- - -------------------------------------------------------------------------------- -----------
NET ASSET VALUE and Redemption Price Per Share:
($38,287,680 / 3,879,407 shares of beneficial interest outstanding) $9.87
- - -------------------------------------------------------------------------------- -----------
COMPUTATION OF OFFERING PRICE:
Offering Price Per Share (100/96.5 of $9.87)* $10.23
- - -------------------------------------------------------------------------------- -----------
</TABLE>
* See "What Shares Cost" in the prospectus.
(See Notes which are an integral part of the Financial Statements)
MARK TWAIN FIXED INCOME PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MARCH 31, 1994
(UNAUDITED)
- - --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- - ---------------------------------------------------------------------------------------
Interest income $ 1,342,357
- - ---------------------------------------------------------------------------------------
Dividend income 9,850
- - --------------------------------------------------------------------------------------- -----------
Total investment income (Note 2B) 1,352,207
- - ---------------------------------------------------------------------------------------
EXPENSES:
- - ---------------------------------------------------------------------------------------
Investment advisory fee (Note 4) $121,478
- - ---------------------------------------------------------------------------
Trustees' fees 921
- - ---------------------------------------------------------------------------
Administrative personnel and services fee (Note 4) 30,206
- - ---------------------------------------------------------------------------
Registration fees 9,131
- - ---------------------------------------------------------------------------
Custodian fees (Note 4) 12,920
- - ---------------------------------------------------------------------------
Recordkeeper fees (Note 4) 27,517
- - ---------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses (Note 4) 12,696
- - ---------------------------------------------------------------------------
Legal fees 1,430
- - ---------------------------------------------------------------------------
Printing and postage 5,806
- - ---------------------------------------------------------------------------
Insurance premiums 4,006
- - ---------------------------------------------------------------------------
Distribution services fee (Note 4) 50,609
- - ---------------------------------------------------------------------------
Audit fees 6,089
- - ---------------------------------------------------------------------------
Miscellaneous 1,630
- - --------------------------------------------------------------------------- --------
Total expenses 284,439
- - ---------------------------------------------------------------------------
Deduct--
- - -----------------------------------------------------------------
Waiver of investment advisory fee (Note 4) $ 1,029
- - -----------------------------------------------------------------
Waiver of distribution services fee (Note 4) 50,609 51,638
- - ----------------------------------------------------------------- ------- --------
Net expenses 232,801
- - --------------------------------------------------------------------------------------- -----------
Net investment income 1,119,406
- - --------------------------------------------------------------------------------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- - ---------------------------------------------------------------------------------------
Net realized gain (loss) on investments (identified cost basis) 105,197
- - ---------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments (3,371,013)
- - --------------------------------------------------------------------------------------- -----------
Net realized and unrealized loss on investments (3,265,816)
- - --------------------------------------------------------------------------------------- -----------
Change in net assets resulting from operations $(2,146,410)
- - --------------------------------------------------------------------------------------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MARK TWAIN FIXED INCOME PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
-----------------------------
1994* 1993**
----------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- - ---------------------------------------------------------------
OPERATIONS--
- - ---------------------------------------------------------------
Net investment income $ 1,119,406 $ 1,595,194
- - ---------------------------------------------------------------
Net realized gain (loss) on investments ($105,197 and $120,226
net gains, respectively, as computed for federal tax
purposes) 105,197 120,226
- - ---------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on
investments (3,371,013) 2,486,425
- - --------------------------------------------------------------- ----------- -----------
Change in net assets resulting from operations (2,146,410) 4,201,845
- - --------------------------------------------------------------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2B)--
- - ---------------------------------------------------------------
Dividends to shareholders from net investment income (1,125,056) (1,589,544)
- - ---------------------------------------------------------------
Distributions to shareholders from net realized gain on
investment transactions (120,201) --
- - --------------------------------------------------------------- ----------- -----------
Change in net assets resulting from distributions to
shareholders (1,245,257) (1,589,544)
- - --------------------------------------------------------------- ----------- -----------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)--
- - ---------------------------------------------------------------
Proceeds from sale of shares 5,661,635 50,683,901
- - ---------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
dividends declared 18,618 16,174
- - ---------------------------------------------------------------
Cost of shares redeemed (6,716,169) (10,597,113)
- - --------------------------------------------------------------- ----------- -----------
Change in net assets resulting from Fund share
transactions (1,035,916) 40,102,962
- - --------------------------------------------------------------- ----------- -----------
Change in net assets (4,427,583) 42,715,263
- - ---------------------------------------------------------------
NET ASSETS:
- - ---------------------------------------------------------------
Beginning of period 42,715,263 --
- - --------------------------------------------------------------- ----------- -----------
End of period (including undistributed net investment income of
$0 and $5,650, respectively) $38,287,680 $42,715,263
- - --------------------------------------------------------------- ----------- -----------
</TABLE>
* Six months ended March 31, 1994 (unaudited).
** For the period from January 4, 1993 (date of initial public investment) to
September 30, 1993.
(See Notes which are an integral part of the Financial Statements)
MARK TWAIN FIXED INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30,
-------------------
1994* 1993**
------ ------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.75 $10.00
- - ------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- - ------------------------------------------------------------------
Net investment income 0.29 0.44
- - ------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.85) 0.75
- - ------------------------------------------------------------------ ------ ------
Total from investment operations (0.56) 1.19
- - ------------------------------------------------------------------
LESS DISTRIBUTIONS
- - ------------------------------------------------------------------
Dividends to shareholders from net investment income (0.29) (0.44)
- - ------------------------------------------------------------------
Distributions to shareholders from net realized gain on
investment transactions (0.03) --
- - ------------------------------------------------------------------ ------ -----
Total distributions (0.32) (0.44)
- - ------------------------------------------------------------------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 9.87 $10.75
- - ------------------------------------------------------------------ ------ ------
TOTAL RETURN*** (5.32)% 12.09%
- - ------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- - ------------------------------------------------------------------
Expenses 1.15%(b) 1.05%(b)
- - ------------------------------------------------------------------
Net investment income 5.53%(b) 5.71%(b)
- - ------------------------------------------------------------------
Expense waiver/reimbursement (a) 0.26%(b) 0.27%(b)
- - ------------------------------------------------------------------
SUPPLEMENTAL DATA
- - ------------------------------------------------------------------
Net assets, end of period (000 omitted) $38,288 $42,715
- - ------------------------------------------------------------------
Portfolio turnover rate 7% 28%
- - ------------------------------------------------------------------
</TABLE>
* Six months ended March 31, 1994 (unaudited).
** Reflects operations for the period from January 4, 1993 (date of initial
public investment) to September 30, 1993.
*** Based on net asset value which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(b) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
MARK TWAIN MUNICIPAL INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
MARCH 31, 1994
(UNAUDITED)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATINGS:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- - ----------- ------------------------------------------------------- ------------ -----------
<C> <S> <C> <C>
LONG-TERM MUNICIPAL SECURITIES--95.6%
- - ---------------------------------------------------------------------
ARIZONA--3.9%
-------------------------------------------------------
$ 250,000 Phoenix, AZ, 6.60% Streets & Highways Revenue Bonds,
7/1/2007 A+ $ 268,460
-------------------------------------------------------
700,000 Phoenix, AZ, 6.00% Streets & Highways Revenue Bonds
(Series A)/(FGIC Insured), 7/1/2008 AAA 705,782
------------------------------------------------------- -----------
Total 974,242
------------------------------------------------------- -----------
COLORADO--2.1%
-------------------------------------------------------
500,000 Denver, CO, 5.80% City and County School District
(Series B), 12/15/2003, (Prerefunded 12/15/2002 @ 101) A+ 519,670
------------------------------------------------------- -----------
FLORIDA--3.7%
-------------------------------------------------------
400,000 Broward County, FL, School District, 5.60%, 2/15/2007 AA 397,076
-------------------------------------------------------
500,000 Florida State Board of Education Capital Outlay,
6.625%, (Series C), 6/1/2014 AA 519,235
------------------------------------------------------- -----------
Total 916,311
------------------------------------------------------- -----------
ILLINOIS--15.3%
-------------------------------------------------------
500,000 Chicago, IL, 5.25% Met Water Reclamation District,
12/1/2004 AA 486,825
-------------------------------------------------------
500,000 Illinois Development Finance Authority, 6.00% School
District Program Revenue Bonds (Rockford, IL, School
District)/(FGIC Insured), 2/1/2006 AAA 511,005
-------------------------------------------------------
500,000 Illinois State, 6.10%, 10/1/2003 AA- 523,095
-------------------------------------------------------
100,000 Illinois State, 6.60%, 12/1/2006 AA- 104,313
-------------------------------------------------------
300,000 Illinois State, 6.25%, 10/1/2007 AA- 308,367
-------------------------------------------------------
450,000 Northwest Suburban Municipal Joint Action, 5.90% Water
Supply System Agency Revenue Bonds (Series A)/(MBIA
Insured), 5/1/2013 AAA 434,012
-------------------------------------------------------
</TABLE>
MARK TWAIN MUNICIPAL INCOME PORTFOLIO
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATINGS:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- - ----------- ------------------------------------------------------- ------------ -----------
<C> <S> <C> <C>
LONG-TERM MUNICIPAL SECURITIES--CONTINUED
- - ---------------------------------------------------------------------
ILLINOIS--CONTINUED
-------------------------------------------------------
$ 400,000 Schaumburg, IL, 6.05%, GO UT Refunding Bonds, 12/1/2007 AA+ $ 406,968
-------------------------------------------------------
500,000 Springfield, IL, 6.50% Water Revenue Bonds, 3/1/2015 AA 510,410
-------------------------------------------------------
485,000 Waukegan, IL, 6.80%, 12/30/2007 A1 518,198
------------------------------------------------------- -----------
Total 3,803,193
------------------------------------------------------- -----------
INDIANA--4.8%
-------------------------------------------------------
450,000 Clay, IN, School Building Corp., 5.75% First Mortgage
Revenue Bonds (Clay County School Building Corp.)/
(MBIA Insured), 1/1/2004 AAA 457,677
-------------------------------------------------------
300,000 Indiana Municipal Power Agency, 5.90% Power Supply
System Revenue Bonds (Series A)/(MBIA Insured),
1/1/2005 AAA 306,552
-------------------------------------------------------
225,000 Indiana Municipal Power Agency, 6.00% Power Supply
System Revenue Bonds (Series A)/(MBIA Insured),
1/1/2006 AAA 230,164
-------------------------------------------------------
190,000 Indiana Municipal Power Agency, 6.00% Power Supply
System Revenue Bonds (Series A)/(MBIA Insured),
1/1/2007 AAA 193,139
------------------------------------------------------- -----------
Total 1,187,532
------------------------------------------------------- -----------
IOWA--3.0%
-------------------------------------------------------
500,000 Cedar Rapids, IA, 5.65% GO UT Bonds (Series B),
6/1/2005 AAA 507,305
-------------------------------------------------------
250,000 Cedar Rapids, IA, 5.75% GO UT Bonds (Series B),
6/1/2006 AAA 246,752
------------------------------------------------------- -----------
Total 754,057
------------------------------------------------------- -----------
MASSACHUSETTS--2.0%
-------------------------------------------------------
500,000 Massachusetts State, 6.00%, (Series A), 6/1/2011 A 493,365
------------------------------------------------------- -----------
</TABLE>
MARK TWAIN MUNICIPAL INCOME PORTFOLIO
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATINGS:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- - ----------- ------------------------------------------------------- ------------ -----------
<C> <S> <C> <C>
LONG-TERM MUNICIPAL SECURITIES--CONTINUED
- - ---------------------------------------------------------------------
MINNESOTA--4.9%
-------------------------------------------------------
$ 500,000 Northern Municipal Power Agency, MN, 5.80%, Electric
System Revenue Refunding Bonds (Series A)/(AMBAC
Insured) 1/1/2006 AAA $ 508,345
-------------------------------------------------------
695,000 Southern Minnesota Municipal Power Agency, 5.70%,
(Series A), 1/1/2005 A+ 696,592
------------------------------------------------------- -----------
Total 1,204,937
------------------------------------------------------- -----------
MISSOURI--17.5%
-------------------------------------------------------
500,000 Missouri State Environmental Energy Resources
Authority, 7.375% Pollution Control Revenue Bonds
(Saint Joe Lighting & Power Co.)/(AMBAC Insured),
2/1/2013 AAA 511,565
-------------------------------------------------------
300,000 Missouri State, 6.50% HEFA Revenue Bonds (Saint Louis
University)/(AMBAC Insured), 8/1/2016 AAA 309,270
-------------------------------------------------------
250,000 Missouri State, 6.875% HEFA Revenue Bonds (Saint Luke's
Episcopal-Presbyterian Hospital)/(FGIC Insured),
12/1/2007 AAA 261,080
-------------------------------------------------------
380,000 Missouri State Housing Development Commission, 6.80%
SFM Revenue Bonds (Series A)/(GNMA Collateralized),
8/1/2015 AAA 385,290
-------------------------------------------------------
475,000 Missouri State Housing Development Commission, 7.15%
SFM Revenue Bonds (Series A)/(GNMA Collateralized),
8/1/2018 AAA 481,835
-------------------------------------------------------
740,000 Missouri State Housing Development Commission, 6.625%
SFM Revenue Bonds (Series A)/(GNMA Collateralized),
12/1/2017 AAA 742,915
-------------------------------------------------------
500,000 Missouri State Third State Building, 6.25% GO UT Bonds
(Series A), 11/1/2008, (Prerefunded 11/1/2001 @ 100) AAA 530,920
-------------------------------------------------------
</TABLE>
MARK TWAIN MUNICIPAL INCOME PORTFOLIO
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATINGS:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- - ----------- ------------------------------------------------------- ------------ -----------
<C> <S> <C> <C>
LONG-TERM MUNICIPAL SECURITIES--CONTINUED
- - ---------------------------------------------------------------------
MISSOURI--CONTINUED
-------------------------------------------------------
$ 1,000,000 Missouri State Third State Building, 6.30% GO UT Bonds
(Series B), 11/1/2012 AAA $ 1,022,880
-------------------------------------------------------
100,000 Missouri University, 6.50% Housing System Revenue Bonds
(MBIA Insured), 4/1/2004, (Prerefunded 4/1/98 @ 102) AAA 108,308
------------------------------------------------------- -----------
Total 4,354,063
------------------------------------------------------- -----------
NORTH CAROLINA--1.5%
-------------------------------------------------------
400,000 North Carolina, 5.75% Eastern Municipal Power Agency
(Series G), 12/1/2016 A- 366,400
------------------------------------------------------- -----------
OHIO--2.0%
-------------------------------------------------------
500,000 Ohio State Building Authority, 5.40% (Series A),
10/1/2004 A+ 492,530
------------------------------------------------------- -----------
OREGON--0.7%
-------------------------------------------------------
175,000 Portland, OR, 7.00% GO UT Bonds (Series B), 12/1/2010 AAA 176,220
------------------------------------------------------- -----------
PENNSYLVANIA--1.7%
-------------------------------------------------------
420,000 Harrisburg, PA, 5.60% Water Authority Revenue Bonds
(Series A)/(FGIC Insured), 7/15/2007 AAA 413,776
------------------------------------------------------- -----------
TEXAS--14.7%
-------------------------------------------------------
700,000 Harris County, TX, 6.125%, (Series B), 10/1/2008,
(Prerefunded 10/1/2002 @ 100) AA+ 738,129
-------------------------------------------------------
500,000 Houston, TX, 6.00% Refunding Bonds (Series C), 3/1/2004 AA- 518,440
-------------------------------------------------------
800,000 Houston, TX, 6.00% Refunding Bonds (Series C), 3/1/2005 AA- 814,048
-------------------------------------------------------
500,000 Texas State, 6.00% College Student Loans, 8/1/2007 AAA 497,230
-------------------------------------------------------
250,000 Texas University, 5.50% General Tuition Revenue Bonds,
8/15/2002 AA 253,495
-------------------------------------------------------
800,000 Texas University, 6.25% Permanent University Fund
(Series A), 7/1/2007 AA+ 820,616
------------------------------------------------------- -----------
Total 3,641,958
------------------------------------------------------- -----------
</TABLE>
MARK TWAIN MUNICIPAL INCOME PORTFOLIO
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATINGS:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- - ----------- ------------------------------------------------------- ------------ -----------
<C> <S> <C> <C>
LONG-TERM MUNICIPAL SECURITIES--CONTINUED
- - ---------------------------------------------------------------------
VIRGINIA--1.2%
-------------------------------------------------------
$ 300,000 Virginia State, 5.35% Housing Development Authority
(Series E), 11/1/2005 AA $ 291,168
------------------------------------------------------- -----------
WASHINGTON--6.1%
-------------------------------------------------------
725,000 King City, WA, School District #415 Kent, 6.00% UT GO
Bonds (Series B), 12/1/2008 AA- 733,395
-------------------------------------------------------
245,000 Washington State, 6.00% Refunding Bonds (Series R-92C),
9/1/2004 AA 254,602
-------------------------------------------------------
500,000 Washington State, 6.625%, (Series B), 6/1/2006 AA 526,245
------------------------------------------------------- -----------
Total 1,514,242
------------------------------------------------------- -----------
WISCONSIN--10.5%
-------------------------------------------------------
385,000 Beloit, WI, School District, 6.20% GO UT School
Building Bonds (MBIA Insured), 10/1/2011 AAA 386,713
-------------------------------------------------------
1,000,000 Green Bay, WI, 5.50%, Public School District (Series
A), 4/1/2012 AA 946,470
-------------------------------------------------------
255,000 Madison, WI, 6.75% IDR (Madison Gas & Electric Co.)
4/1/2027 AA 264,759
-------------------------------------------------------
460,000 Wisconsin State, 6.50% (Series C), 5/1/2009,
(Prerefunded 5/1/99 @ 101) AA 494,615
-------------------------------------------------------
475,000 Wisconsin State, 6.30% GO UT Bonds (Series A),
5/1/2012, (Prerefunded 5/1/2002 @ 100) AA 506,516
------------------------------------------------------- -----------
Total 2,599,073
------------------------------------------------------- -----------
TOTAL LONG-TERM MUNICIPAL SECURITIES
(IDENTIFIED COST $24,034,976) 23,702,737
------------------------------------------------------- -----------
</TABLE>
MARK TWAIN MUNICIPAL INCOME PORTFOLIO
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATINGS:
MOODY'S
OR
SHARES S&P* --- VALUE
- - ---------- --------------------------------------------------------- -----------
<C> <C> <S> <C> <C>
CASH EQUIVALENTS--3.0%
- - ----------------------------------------------------------------------------
746,595 Goldman Sachs, ILA Exempt Trust (at net asset value) AAA $ 746,595
--------------------------------------------------------- -----------
TOTAL INVESTMENTS (IDENTIFIED COST $24,781,571) $24,449,332+
--------------------------------------------------------- -----------
</TABLE>
* Please refer to the Appendix of the Statement of Additional Information for an
explanation of the credit ratings.
+ The cost of investments for federal income tax purposes amounts to
$24,781,571. The net realized depreciation of investments on a federal income
tax basis amounts to $332,239 which is comprised of $148,714 appreciation and
$480,953 depreciation at March 31, 1994.
Note: The categories of investments are shown as a percentage of net assets
($24,803,462) at March 31, 1994.
The following abbreviations may be used throughout this portfolio:
<TABLE>
<S> <C>
AMBAC -- American Municipal Bond Assurance Corporation
FGIC -- Financial Guaranty Insurance Co.
GNMA -- Government National Mortgage Association
GO -- General Obligation
HEFA -- Health and Education Facilities Authority
IDR -- Industrial Development Revenue
MBIA -- Municipal Bond Investors Assurance Corp.
SFM -- Single Family Mortgage
UT -- Unlimited Tax
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MARK TWAIN MUNICIPAL INCOME PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1994
(UNAUDITED)
- - --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- - --------------------------------------------------------------------------------
Investments in securities, at value (Note 2A)
(identified and tax cost $24,781,571) $24,449,332
- - --------------------------------------------------------------------------------
Cash 101
- - --------------------------------------------------------------------------------
Interest receivable 449,299
- - --------------------------------------------------------------------------------
Deferred expenses (Note 2E) 7,931
- - -------------------------------------------------------------------------------- -----------
Total assets 24,906,663
- - --------------------------------------------------------------------------------
LIABILITIES:
- - ----------------------------------------------------------------------
Dividends payable $92,611
- - ----------------------------------------------------------------------
Accrued expenses 10,590
- - ---------------------------------------------------------------------- -------
Total liabilities 103,201
- - -------------------------------------------------------------------------------- -----------
NET ASSETS for 2,484,993 shares of beneficial interest outstanding $24,803,462
- - -------------------------------------------------------------------------------- -----------
NET ASSETS CONSIST OF:
- - --------------------------------------------------------------------------------
Paid-in capital $25,140,745
- - --------------------------------------------------------------------------------
Unrealized depreciation of investments (332,239)
- - --------------------------------------------------------------------------------
Accumulated undistributed net realized loss on investments (5,044)
- - -------------------------------------------------------------------------------- -----------
Total Net Assets $24,803,462
- - -------------------------------------------------------------------------------- -----------
NET ASSET VALUE and Redemption Price Per Share:
($24,803,462 / 2,484,993 shares of beneficial interest outstanding) $9.98
- - -------------------------------------------------------------------------------- -----------
COMPUTATION OF OFFERING PRICE:
Offering Price Per Share (100/96.5 of $9.98)* $10.34
- - -------------------------------------------------------------------------------- -----------
</TABLE>
* See "What Shares Cost" in the prospectus.
(See Notes which are an integral part of the Financial Statements)
MARK TWAIN MUNICIPAL INCOME PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MARCH 31, 1994
(UNAUDITED)
- - --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- - ----------------------------------------------------------------------------------
Interest income (Note 2B) $ 664,283
- - ----------------------------------------------------------------------------------
EXPENSES:
- - ----------------------------------------------------------------------------------
Investment advisory fee (Note 4) $ 87,273
- - ----------------------------------------------------------------------
Administrative personnel and services fee (Note 4) 24,932
- - ----------------------------------------------------------------------
Audit fees 5,602
- - ----------------------------------------------------------------------
Custodian fees (Note 4) 3,117
- - ----------------------------------------------------------------------
Recordkeeper fees (Note 4) 23,815
- - ----------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses (Note 4) 11,523
- - ----------------------------------------------------------------------
Legal fees 2,440
- - ----------------------------------------------------------------------
Printing and postage 3,774
- - ----------------------------------------------------------------------
Insurance premiums 2,012
- - ----------------------------------------------------------------------
Distribution services fee (Note 4) 31,166
- - ----------------------------------------------------------------------
Registration fees 7,740
- - ----------------------------------------------------------------------
Trustees' fees 415
- - ----------------------------------------------------------------------
Miscellaneous 1,040
- - ---------------------------------------------------------------------- --------
Total expenses 204,849
- - ----------------------------------------------------------------------
Deduct--
- - ------------------------------------------------------------
Waiver of investment advisory fee (Note 4) $74,535
- - ------------------------------------------------------------
Waiver of distribution services fee (Note 4) 31,166
- - ------------------------------------------------------------
Waiver of administrative personnel and services fee (Note
4) 6,333 112,034
- - ------------------------------------------------------------ ------- --------
Net expenses 92,815
- - ---------------------------------------------------------------------------------- -----------
Net investment income 571,468
- - ---------------------------------------------------------------------------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- - ----------------------------------------------------------------------------------
Net realized gain (loss) on investments (identified cost basis) (5,132)
- - ----------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments (1,464,676)
- - ---------------------------------------------------------------------------------- -----------
Net realized and unrealized loss on investments (1,469,808)
- - ---------------------------------------------------------------------------------- -----------
Change in net assets resulting from operations $ (898,340)
- - ---------------------------------------------------------------------------------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MARK TWAIN MUNICIPAL INCOME PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
-------------------------------
1994* 1993**
----------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- - -------------------------------------------------------------
OPERATIONS--
- - -------------------------------------------------------------
Net investment income $ 571,468 $ 662,123
- - -------------------------------------------------------------
Net realized gain (loss) on investments ($5,132 net loss and
$41,659 net gain, respectively, as computed for federal tax
purposes) (5,132) 41,659
- - -------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on
investments (1,464,676) 1,132,437
- - ------------------------------------------------------------- ----------- -----------
Change in net assets resulting from operations (898,340) 1,836,219
- - ------------------------------------------------------------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2B)--
- - -------------------------------------------------------------
Dividends to shareholders from net investment income (571,471) (662,120)
- - -------------------------------------------------------------
Distributions to shareholders from net realized gain on
investment transactions (41,571) --
- - ------------------------------------------------------------- ----------- -----------
Change in net assets resulting from distributions to
shareholders (613,042) (662,120)
- - ------------------------------------------------------------- ----------- -----------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)--
- - -------------------------------------------------------------
Proceeds from sale of shares 4,370,884 27,342,830
- - -------------------------------------------------------------
Net asset value of shares issued to shareholders in payment
of dividends declared 18,489 15,614
- - -------------------------------------------------------------
Cost of shares redeemed (2,161,504) (4,445,568)
- - ------------------------------------------------------------- ----------- -----------
Change in net assets resulting from Fund share transactions 2,227,869 22,912,876
- - ------------------------------------------------------------- ----------- -----------
Change in net assets 716,487 24,086,975
- - -------------------------------------------------------------
NET ASSETS:
- - -------------------------------------------------------------
Beginning of period 24,086,975 --
- - ------------------------------------------------------------- ----------- -----------
End of period (including undistributed net investment income
of $0 and $3, respectively) $24,803,462 $24,086,975
- - ------------------------------------------------------------- ----------- -----------
</TABLE>
* Six months ended March 31, 1994 (unaudited).
** For the period from February 1, 1993 (date of initial public investment) to
September 30, 1993.
(See Notes which are an integral part of the Financial Statements)
MARK TWAIN MUNICIPAL INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER
30,
--------------------
1994* 1993**
------ ------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.61 $10.00
- - ------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- - ------------------------------------------------------------------------
Net investment income 0.24 0.32
- - ------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.61) 0.61
- - ------------------------------------------------------------------------ ------ -----
Total from investment operations (0.37) 0.93
- - ------------------------------------------------------------------------
LESS DISTRIBUTIONS
- - ------------------------------------------------------------------------
Dividends to shareholders from net investment income (0.24) (0.32 )
- - ------------------------------------------------------------------------
Distributions to shareholders from net realized gain on investment
transactions (0.02) --
- - ------------------------------------------------------------------------ ------ -----
Total from distributions (0.26) (0.32 )
- - ------------------------------------------------------------------------ ------ -----
NET ASSET VALUE, END OF PERIOD $ 9.98 $10.61
- - ------------------------------------------------------------------------ ------ -----
TOTAL RETURN*** (3.60)% 9.43 %
- - ------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- - ------------------------------------------------------------------------
Expenses 0.74%(b) 0.72 %(b)
- - ------------------------------------------------------------------------
Net investment income 4.58%(b) 4.71 %(b)
- - ------------------------------------------------------------------------
Expense waiver/reimbursement (a) 0.89%(b) 0.85 %(b)
- - ------------------------------------------------------------------------
SUPPLEMENTAL DATA
- - ------------------------------------------------------------------------
Net assets, end of period (000 omitted) $24,803 $24,087
- - ------------------------------------------------------------------------
Portfolio turnover rate 4% 14 %
- - ------------------------------------------------------------------------
</TABLE>
* Six months ended March 31, 1994 (unaudited).
** Reflects operations for the period from February 1, 1993 (date of initial
public investment) to September 30, 1993.
*** Based on net asset value which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(b) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
MARK TWAIN FUNDS
COMBINED NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1994
(UNAUDITED)
- - --------------------------------------------------------------------------------
(1) ORGANIZATION
Mark Twain Funds (the "Trust"), is registered under the Investment Company Act
of 1940, as amended, as an open-end, management investment company. The Trust
consists of four separate diversified investment portfolios (individually
referred to as the "Fund", or collectively as the "Funds"): Mark Twain Equity
Portfolio ("Equity Fund"), Mark Twain Fixed Income Portfolio ("Fixed Income
Fund"), Mark Twain Government Money Market Portfolio ("Government Money Market
Fund"), and Mark Twain Municipal Income Portfolio ("Municipal Income Fund"). The
Mark Twain Government Money Market Fund is offered in two classes of shares:
Trust Shares and Investment Shares. Investment Shares are identical in all
respects to Trust Shares, except that Investment Shares are sold pursuant to a
distribution plan ("Plan") adopted in accordance with Investment Company Act
Rule 12b-1. 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 only those of the Equity Fund, the Fixed Income
Fund, and the Municipal Income Fund. The financial statements of the Government
Money Market Fund are 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 (GAAP).
<TABLE>
<S> <C>
A. INVESTMENT VALUATIONS--Listed equity securities held by the Equity Fund are valued at the
last sale price reported on national securities exchanges. Unlisted securities and
short-term obligations (and private placement securities) are generally valued at the
prices provided by an independent pricing service.
For the Fixed Income Fund, 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. Listed corporate bonds (and other fixed income securities/asset backed
securities) are valued at the last sale price reported on national securities exchanges.
Otherwise, corporate bonds (and other fixed income securities/asset backed securities)
and short-term obligations are valued at the prices provided by an independent pricing
service.
Municipal bonds held in the Municipal Income Fund 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.
</TABLE>
MARK TWAIN FUNDS
- - --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Short-term securities with remaining maturities of sixty days or less may be stated at
amortized cost, which approximates value. Investments in other regulated investment
companies are valued at net asset value.
B. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Dividend income, if applicable, and
distributions to shareholders are recorded on the ex-dividend date. Interest income and
estimated expenses are accrued daily. Bond premium and discount, if applicable, are
amortized as required by the Internal Revenue Code (the "Code").
C. 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 income for the Equity Fund and the Fixed Income Fund,
and substantially all of its tax-exempt income for the Municipal Income Fund.
Accordingly, no provisions for federal tax are necessary.
D. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Funds may engage in when-issued or
delayed delivery transactions. The Funds record when-issued securities 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.
E. 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 over a period
of five years from the Trust's commencement date.
F. OTHER--Investment transactions are accounted for on the trade date.
</TABLE>
MARK TWAIN FUNDS
- - --------------------------------------------------------------------------------
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
EQUITY FIXED INCOME MUNICIPAL INCOME
---------------------- ----------------------- ----------------------
YEAR ENDED SEPTEMBER 30,
---------------------------------------------------------------------------
1994* 1993** 1994* 1993** 1994* 1993***
- - ------------------------------------- --------- --------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Shares outstanding, beginning of
period 3,110,202 -- 3,974,087 -- 2,271,209 --
- - -------------------------------------
Shares sold 495,867 3,934,990 538,293 4,994,021 416,735 2,700,073
- - -------------------------------------
Shares issued to shareholders in
payment of dividends declared 1,031 557 1,791 1,534 1,774 1,505
- - -------------------------------------
Shares redeemed (491,137) (825,345) (634,764) (1,021,468) (204,725) (430,369)
- - ------------------------------------- --------- --------- --------- --------- --------- ---------
Shares outstanding, end of period 3,115,963 3,110,202 3,879,407 3,974,087 2,484,993 2,271,209
- - ------------------------------------- --------- --------- --------- --------- --------- ---------
</TABLE>
* Six months ended March 31, 1994.
** The period from January 4, 1993 (date of initial public investment) to
September 30, 1993.
*** The period from February 1, 1993 (date of initial public investment) to
September 30, 1993.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Mark Twain Bank, the Funds' investment adviser ("Adviser"), receives for its
services an annual investment advisory fee equal to 0.75 of 1% of the Equity
Fund's average daily net assets; 0.60 of 1% of the Fixed Income Fund's average
daily net assets; and 0.70 of 1% of the Municipal Income Fund's average daily
net assets, respectively. Adviser may voluntarily choose to waive a portion of
its fees and reimburse certain operating expenses of the Funds. Adviser can
modify or terminate this voluntary waiver and reimbursement at any time in its
sole discretion.
Federated Administrative Services ("FAS") provides the Funds with certain
administrative personnel and services. The fee is based on the level of
aggregate average net assets of the Trust for the period. FAS may voluntarily
choose to waive a portion of its fee.
Organizational expenses of the Equity Fund, the Fixed Income Fund, and the
Municipal Income Fund of $17,560, $17,401, and $16,729, respectively, were borne
initially by FAS. The Funds have agreed to reimburse FAS during the five year
period following the date the respective Trust's portfolio became effective. For
the six months ended March 31, 1994, the Equity Fund, the Fixed Income Fund and
the Municipal Income Fund paid $946, $1,079, and $1,079, respectively, pursuant
to this agreement.
The Funds have adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1
under the Investment Company Act of 1940. Under the terms of the Plan, the Funds
will compensate Federated Securities Corp. ("FSC"), the principal distributor,
from the net assets of each Fund to finance activities intended
MARK TWAIN FUNDS
- - --------------------------------------------------------------------------------
to result in the sale of the Funds' shares. The Plan provides that each Fund may
incur distribution expenses up to .25 of 1% of the average daily net assets of
each Fund, annually, to compensate FSC.
Federated Services Company, ("FServ") serves as transfer agent and dividend
disbursing agent for the Funds. The fee is based on the size, type and number of
accounts and transactions made by shareholders.
FServ also maintains the Funds' accounting records. The fee is based on the
level of average net assets of each Fund for the period plus out-of-pocket
expenses.
Mark Twain Bank is the Funds' custodian. The fee is based on the level of
average net assets of each Fund for the period plus out-of-pocket expenses.
Certain of the Officers and Trustees of the Trust are Officers and Directors of
the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments (excluding short term obligations) for the
six months ended March 31, 1994, were as follows:
<TABLE>
<CAPTION>
FIXED MUNICIPAL
EQUITY INCOME INCOME
- - ----------------------------------------------------- ----------- ---------- ----------
<S> <C> <C> <C>
Purchases $23,619,878 $2,708,363 $3,099,985
- - ----------------------------------------------------- ----------- ---------- ----------
Sales $21,915,606 $3,695,391 $ 979,168
- - ----------------------------------------------------- ----------- ---------- ----------
</TABLE>
<TABLE>
<S> <C>
TRUSTEES OFFICERS
- - -----------------------------------------------------------------------------
John F. Donahue John F. Donahue
John T. Conroy, Jr. Chairman
William J. Copeland Edward C. Gonzales
James E. Dowd President and Treasurer
Lawrence D. Ellis, M.D. Charles L. Davis, Jr.
Edward L. Flaherty, Jr. Vice President and Assistant Treasurer
Edward C. Gonzales J. Christopher Donahue
Peter E. Madden Vice President
Gregor F. Meyer Richard B. Fisher
Wesley W. Posvar Vice President
Marjorie P. Smuts John W. McGonigle
Vice President and Secretary
John A. Staley, IV
Vice President
David M. Taylor
Assistant Treasurer
C. Grant Anderson
Assistant Secretary
</TABLE>
Mutual funds are not obligations of, or insured by, any bank, nor are they
insured by the
federal government or any of its agencies. Investment in these shares involves
risk, including the possible loss of principal.
This report is authorized for distribution to prospective investors only when
preceded or
accompanied by the Funds' prospectus, which contains facts concerning their
respective
objective and policies, management fees, expenses, and other information.
March 31, 1994
3041404 (5/94)
