<TABLE>
<CAPTION>
Table of Contents
Performance Highlights
<S> <C>
Monetta Fund 4
Monetta Small-Cap Equity Fund 5
Monetta Mid-Cap Equity Fund 6
Monetta Large-Cap Equity Fund 7
Monetta Balanced Fund 8
Monetta Intermediate Bond Fund 9
Monetta Government Money Market Fund 10
Independent Auditors Report 11
Schedule of Investments
Monetta Fund 12
Monetta Small-Cap Equity Fund 14
Monetta Mid-Cap Equity Fund 15
Monetta Large-Cap Equity Fund 16
Monetta Balanced Fund 17
Monetta Intermediate Bond Fund 19
Monetta Government Money Market Fund 19
Financial Statements
Statements of Assets & Liabilities 20
Statements of Operations 21
Statements of Changes in Net Assets 22
Notes to Financial Statements 24
</TABLE>
Footnote:
Past performance is no guarantee of future results. The principal value and
return on your investment will fluctuate and, on redemption, may be worth more
or less than your original cost. Historically, small company stocks have been
more volatile than large company stocks, U. S. Government Bonds, and Treasury
Bills. An investment in the Government Money Market Fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other Government
Agency. Although the Fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to loose money by investing in the Fund.
References to individual securities are the views of the Advisor at the date of
this report and may change. References are not a recommendation to buy or sell
any security. Fund holdings are subject to change.
Since indices are unmanaged, it is not possible to invest in them.
Sources for performance data include Lipper Analytical Services, Inc., and
Frank Russell Company.
Page 2
Dear Fellow Shareholders: January 15, 1999
The financial markets continued their winning streak in 1998, especially in the
larger capitalization stocks. The markets moved higher primarily due to low
interest rates and continued steady economic growth, in spite of international
turbulence, presidential impeachment proceedings and economic concerns.
In 1998, large capitalization stocks outperformed both mid and small
capitalization stocks. In fact, the 30% performance variance between the S&P
500 (Large-Cap) and Russell 2000 (Small-Cap) indices was the widest in 68
years! The primary reason for this variance was that large-cap securities
possessed desirable investment characteristics in a slower growth economic
environment as their earnings are more predictable and stable.
The best industry sectors in 1998 were computer peripherals, networking,
specialty retail and biotechnology. Of course, we cannot forget the emerging
internet stocks, which posted astounding returns in 1998.
The majority of small-cap managers posted negative returns in 1998, and
unfortunately, our two small-cap funds were no exception. Our Large-Cap Fund
benefited from the preference for larger company stocks in 1998. Our fixed
income funds posted strong returns due to the high-quality emphasis of our
government/corporate investments.
History suggests that the huge disparity between small and large company
performance will eventually narrow. 1998 was a reminder that a sound
investment approach includes a basket of investments across the small and large
capitalization sectors. It is for this reason that we offer a family of seven
mutual funds for your diversification needs.
Investment Outlook
Entering 1998, "experts" forecasted modest stock market gains after the strong
returns that were posted in 1997. They were partially right as small-cap
stocks performed poorly. However, large-cap stocks exceeded even the most
optimistic forecasts.
Our outlook for the U.S. economy and the stock market in 1999 is cautiously
optimistic. Low interest rates, benign inflation and the elimination of the
annual government deficit are strong positive signals for continued economic
growth in 1999. However, the Asian economies are suffering and now Latin
America is beginning to show serious signs of weakness. The United States has
been a bastion of relative prosperity, but there is the continued concern that
foreign economic weakness will eventually spill into the U.S.
Our investment strategy is unwavering, and we will continue to focus on
identifying strong companies with solid and predictable earnings growth. We
like the technology sector, which is expected to provide strong unit growth and
productivity gains in 1999 and into the year 2000. Other attractive areas are
the healthcare and specialty retail sectors where growth is steady and earnings
visibility good.
Our equity mutual funds are all growth funds which invest in rapidly growing
companies. We are especially excited about the prospects for a potential
rebound in the small-cap sector. We offer two small-cap mutual funds which
provide investors with an opportunity to invest in this exciting investment
class. Many of these small companies have the potential to grow into
recognizable large-cap companies in the years to come.
As always, we want to thank you for your investment and/or interest in the
Monetta Family of Funds.
Best personal regards,
Robert S. Bacarella
President and Founder
<Page 3>
Monetta Fund Period ended 12/31/98
Investment Objective: Market Capitalization Range: Total Net Assets:
Capital Appreciation/Income $50 million - $1 billion $124.7 million
<TABLE>
<CAPTION>
PERFORMANCE:
Average Annual Total Return
1 Year 5 Year 10 Year
<S> <C> <C> <C>
Monetta Fund (9.0)% 7.0% 11.5%
Russell 2000* (2.5)% 11.9% 12.9%
</TABLE>
*Source Frank Russell Company
[Performance Graph Appears Here]
<TABLE>
<CAPTION>
Measurement Period Monetta Russell
(Fiscal Period Covered) Equity Fund 2000
<S> <C> <C>
3/89 10,312 10,770
6/89 11,136 11,456
9/89 11,664 12,230
12/89 11,523 11,624
3/90 12,140 11,367
6/90 13,576 11,806
9/90 10,958 8,909
12/90 12,832 9,357
3/91 15,209 12,139
6/91 15,665 11,951
9/91 17,785 12,926
12/91 20,004 13,666
3/92 20,132 14,691
6/92 18,848 13,688
9/92 19,408 14,081
12/92 21,102 16,182
3/93 19,703 16,873
6/93 19,849 17,242
9/93 21,393 18,749
12/93 21,207 19,241
3/94 20,647 18,731
6/94 19,528 18,001
9/94 20,903 19,251
12/94 19,889 18,891
3/95 21,806 19,762
6/95 23,313 21,614
9/95 26,218 23,749
12/95 25,463 24,263
3/96 25,855 25,501
6/96 26,656 26,777
9/96 26,608 26,868
12/96 25,874 28,266
3/97 23,995 26,804
6/97 28,929 31,149
9/97 34,712 35,784
12/97 32,650 34,586
3/98 36,241 28,064
6/98 32,991 36,290
9/98 25,238 28,978
12/98 29,700 33,704
</TABLE>
The graph above to the right compares the change in value of a $10,000
investment in the Monetta Fund and the Russell 2000 Stock Index, with dividend
and capital gains reinvested. The Russell 2000 Stock Index is a broad measure
representative of the general market. Since the NASDAQ Composite is not an
appropriate index, it is no longer reflected on the above graph. Had it been
reflected, the value of a $10,000 investment at the end of 10 years per the
NASDAQ Composite would be $57,499. Please refer to footnote at bottom of Page
2.
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
<S> <C>
Consumer Related - 38.9%
Technology - 18.9%
Medical - 18.2%
Industrial - 14.9%
S/T Investments(A) - 5.4%
Financial - 3.7%
</TABLE>
(A) Short-term investments net of other assets and liabilities
TOP 5 EQUITY HOLDINGS:
<TABLE>
<CAPTION>
% of Net Assets
<S> <C>
Consolidated Graphics, Inc. 5.4%
AeroFlex, Inc. 5.0%
Medicis Pharmaceutical Corp. - CL A 4.5%
D&K Healthcare Resources, Inc. 4.4%
VDI Media 3.4%
Total Top 5 Holdings 22.7%
</TABLE>
COMMENTARY
The Monetta Fund posted a return in 1998 of negative 9.0% versus the Russell
2000 benchmark return of negative 2.5%. Over the previous two year period, the
Monetta Fund reported an annualized return of 7.1%, which is in line with the
Russell 2000 return of 9.2% during this same period.
Within the small-cap sector in 1998, performance was differentiated in great
part by the size of company invested in. Generally, small-cap funds which
invested in the largest companies did much better than funds which gravitated
towards the smaller companies. The Monetta Fund had a much lower market
capitalization than the average small-cap fund in 1998, which helps explain why
the Monetta Fund lagged in 1998.
Without question, 1998 was a difficult year for small-cap equities. The
majority of small-cap equity funds posted negative returns in 1998, whereas
large-cap equity funds posted very strong returns. One industry pundit
recently stated that, "There are three sure things in life: death, taxes and
the cheapness of small-cap stocks relative to large caps." Report after report
states that small-cap equities over a host of valuation parameters are at or
near all-time lows. On a brighter note, a number of industry experts feel that
1999 will mark a turnaround in the small-cap sector.
We are excited about our portfolio of companies as we enter 1999. Our five
largest companies in the Monetta Fund are demonstrating extremely high growth
rates along with consistent and predictable earnings growth. Our portfolio
composition continues to favor the high growth segments, including consumer
discretionary, medical and technology.
We are managing the Monetta Fund with the same investment disciplines that we
outlined two years ago in our Annual Report. Our focus on early-stage growth
companies with strong fundamentals at reasonable valuation levels served us
very well in 1997 when we outperformed our index and peers significantly.
Unfortunately, in 1998 the smaller companies within the small-cap sector
significantly underperformed, impacting our relative performance for the year.
We feel that by consistently applying our investment disciplines, we will best
position ourselves to provide solid long-term returns to our shareholders. We
look forward to reporting our progress to you in the quarters and years to
come.
<Page 4>
Monetta Small-Cap Equity Fund Period ended 12/31/98
Investment Objective: Market Capitalization Range: Total Net Assets:
Capital Appreciation under $1 billion $4.0 million
<TABLE>
<CAPTION>
PERFORMANCE:
Average Annual Total Return
Since Inception
1 Year 2/1/97
<S> <C> <C>
Monetta Small-Cap Equity Fund (2.8)% 20.6%
Russell 2000* (2.5)% 8.5%
</TABLE>
*Source Frank Russell Company.
[Performance Graph Appears Here]
<TABLE>
<CAPTION>
Small-Cap Russell
Month Fund 2000
<S> <C> <C>
12/96 10,000 10,000
3/97 9,490 9,297
6/97 11,820 10,804
9/97 15,089 12,412
12/97 14,716 11,996
3/98 15,956 12,203
6/98 15,317 12,588
9/98 12,237 10,051
12/98 14,278 11,690
</TABLE>
The graph above to the right compares the change in value of a $10,000
investment in the Monetta Small-Cap Equity Fund and the Russell 2000 Stock
Index with dividend and capital gains reinvested. The Russell 2000 index is a
broad measure representative of the general market. Please refer to footnote
at bottom of Page 2.
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
<S> <C>
Consumer Related - 36.4%
Medical - 21.1%
Technology - 20.9%
Industrial - 13.5%
S/T Investments (A) - 5.9%
Financial - 2.2%
</TABLE>
(A) Short-term investments net of other assets and liabilities
TOP 5 EQUITY HOLDINGS:
<TABLE>
<CAPTION>
% of Net Assets
<S> <C>
Aeroflex, Inc. 5.7%
D&K Healthcare Resources, Inc. 5.6%
Consolidated Graphics, Inc. 5.1%
VDI Media 4.8%
MAXIMUS, Inc. 4.7%
Total Top 5 Holdings 25.9%
</TABLE>
COMMENTARY
The Monetta Small-Cap Equity Fund posted respectable results in 1998, recording
a negative 2.8% one-year return, compared to the Russell 2000 benchmark return
of negative 2.5%. Inception-to-date, the Monetta Small-Cap Equity Fund posted
an annualized return of 20.6% versus the Russell 2000 benchmark return of 8.5%.
As we have explained in previous communications to our shareholders, the
Monetta Small-Cap Equity Fund is an extremely focused portfolio of small-cap
equities. We generally hold only 25-35 positions in the Fund. This
concentration has served us well to-date as we have handily outpaced the
Russell 2000 benchmark return since the Funds inception on February 1, 1997.
You will notice that four of the top five holdings are also held in the Monetta
Fund. Aeroflex is a rapidly growing technology company which supplies Lucent,
Motorola and other recognizable large technology companies. D&K Healthcare is
a pharmaceutical distributor which is posting very strong results as it takes
market share away from the larger distributors. Consolidated Graphics is a
printing company which is growing organically and through acquisition. In
1998, they easily beat aggressive earnings targets and are expected to continue
this performance in 1999.
VDI Media provides video duplication and editing services to the major
advertising agencies and movie studios. While it posted very strong growth in
1998, the stock was a poor performer, in large part due to its small size. We
look for this stock to break out in 1999 as they accelerate their growth.
Lastly, MAXIMUS provides program management and consulting services to federal
and state governments. This company is expected to continue to benefit from
the outsourcing of traditional government functions to the
private sector.
As was detailed in our comments on the Monetta Fund, the small-cap sector
performed poorly in 1998. Despite the rapid growth enjoyed in 1998 by our
portfolio of companies, the investment community chose to focus on larger
companies . Many studies point out that historically small-cap stocks have
outperformed large-cap stocks. Unfortunately, there can be spells during which
time small-cap stocks lag. Meanwhile, we are attempting to identify the small-
cap stocks which will benefit most when the investment community begins to
focus on this sector.
<Page 5>
Monetta Mid-Cap Equity Fund Period ended 12/31/98
Investment Objective: Market Capitalization Range: Total Net Assets:
Capital Appreciation $1 billion - $5 billion $18.9 million
<TABLE>
<CAPTION>
PERFORMANCE:
Average Annual Total Return
Since Inception
1 Year 5 Year 3/1/93
<S> <C> <C> <C>
Monetta Mid-Cap Equity Fund (0.9)% 15.1% 18.9%
S&P 400* 18.3% 18.7% 18.5%
</TABLE>
*Source Lipper Analytical Services, Inc.
[Performance Graph Appears Here]
<TABLE>
<CAPTION>
Measurement Period Mid-Cap S&P 400
(Fiscal Year Covered) Fund
<S> <C> <C>
3/1/93 10,000 10,000
3/93 11,670 10,220
6/93 11,880 10,445
9/93 13,120 10,978
12/93 13,540 11,274
3/94 13,475 10,793
6/94 13,109 10,399
9/94 13,887 11,103
12/94 13,835 10,817
3/95 14,835 11,692
6/95 16,536 12,723
9/95 17,603 13,965
12/95 17,233 14,165
3/96 18,717 15,037
6/96 19,106 15,470
9/96 19,855 15,920
12/96 21,402 16,885
3/97 21,314 16,634
6/97 24,277 19,085
9/97 27,761 22,145
12/97 27,639 22,329
3/98 30,239 24,787
6/98 29,362 24,257
9/98 22,920 20,800
12/98 27,408 26,472
</TABLE>
The graph above to the right compares the change in value of a $10,000
investment in the Monetta Mid-Cap Equity Fund to the S&P 400. The S&P 400
index is a broad measure representative of the general market. Please refer to
footnote at bottom of Page 2.
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
<S> <C>
Consumer Related - 42.0%
Technology - 26.3%
Medical - 13.7%
Financial - 10.6%
Industrial - 5.8%
S/T Investements (A) - 1.6%
</TABLE>
(A) Short-term investments net of other assets and liabilities
TOP 5 EQUITY HOLDINGS:
<TABLE>
<CAPTION>
% of Net Assets
<S> <C>
Consolidated Graphics, Inc. 5.4%
Outback Steakhouse, Inc. 4.9%
VDI Media 4.1%
Platinum Technology, Inc. 4.0%
Newcourt Credit Group, Inc. 3.7%
Total Top 5 Holdings 22.1%
</TABLE>
COMMENTARY
The Monetta Mid-Cap Equity Fund declined 0.9% in 1998 versus the S&P 400 index
return of 18.3%. The Monetta Mid-Cap Equity Fund has posted a five-year
annualized return of 15.1%, which is in line with the S&P 400 index return of
18.7%.
The 1998 underperformance occurred almost entirely in the second half of the
year. In an effort to control risk, the Fund was underweighted in technology
due to concerns of slowing demand overseas. The market dismissed these
concerns and bid up technology stocks dramatically in the second half of 1998,
causing a large portion of our negative variance.
The Fund's underperformance in 1998 was frustrating given its solid long-term
track record. We have always managed the fund to provide competitive returns
while minimizing risk. The markets indifference to certain industry groups,
and infatuation with others, caused 1998 to be a difficult year if you were not
invested fully in the proper sectors, as the divergence in returns between
sectors was extreme. We have not changed the investment philosophy which has
provided competitive long-term returns. However, we are currently being more
diligent in matchingindustry weightings in the Fund more closely to their
respective S&P 400 index industry weightings. As evidence of this, in late
1998, we increased our exposure in the technology and biotechnology areas.
In addition, with investors' increasing concern over trading liquidity, we
are putting more emphasis on those companies which are at the higher end of
the mid-cap capitalization range. As a result, the average market
capitalization of the portfolio has increased from approximately $1.2 billion
to $3.5 billion.
The mid-cap sector underperformed large-caps in 1998. Many industry observers
feel that, due to the relative higher valuations in the large-cap sector, more
money will flow into the mid-cap sector in 1999. This would certainly be
welcome news for mid-cap investors.
<Page 6>
Monetta Large-Cap Equity Fund Period ended 12/31/98
Investment Objective: Market Capitalization Range: Total Net Assets:
Capital Appreciation $5 billion + $4.2 million
<TABLE>
<CAPTION>
PERFORMANCE:
Average Annual Total Return
Since Inception
1 Year 2 Year 9/1/95
<S> <C> <C> <C>
Monetta Large-Cap Equity Fund 9.0% 17.5% 20.7%
S&P 500* 28.7% 31.0% 28.9%
</TABLE>
*Source Lipper Analytical Services, Inc.
[Performance Graph Appears Here]
<TABLE>
<CAPTION>
Measurement Period Large-Cap S&P 500
(Fiscal Year End) Fund
<S> <C> <C>
9/95 10,000 10,482
12/95 10,574 11,105
3/96 11,344 11,701
6/96 11,923 12,225
9/96 12,864 12,603
12/96 13,555 13,653
3/97 13,842 14,020
6/97 15,621 16,465
9/97 17,333 17,699
12/97 17,167 18,207
3/98 18,413 20,745
6/98 18,008 21,433
9/98 14,165 19,307
12/98 18,716 23,441
</TABLE>
The graph above to the right compares the change in value of a $10,000
investment in the Monetta Large-Cap Equity Fund to the S&P 500. The S&P 500
Composite index is a broad measure representative of the general market.
Please refer to footnote at bottom of Page 2.
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
<S> <C>
Consumer Related - 33.0%
Technology - 28.9%
Financial - 14.6%
Medical - 11.1%
Industrial - 8.1%
S/T Investments (A) - 4.3%
</TABLE>
(A) Short-term investments net of other assets and liabilities
TOP 5 EQUITY HOLDINGS:
<TABLE>
<CAPTION>
% of Net Assets
<S> <C>
MCI Worldcom, Inc. 5.1%
Cisco Systems, Inc. 4.4%
Int'l. Business Machine Corp. 4.4%
FDX Corp. 4.3%
Lucent Technologies, Inc. 4.0%
Total Top 5 Holdings 22.2%
</TABLE>
COMMENTARY
The Monetta Large-Cap Equity Fund appreciated 9.0% during 1998, while posting a
stellar fourth quarter return of 32.1%. The S&P 500 index posted a 28.7%
return in 1998. For the three year period ending December 31, 1998, the
Monetta Large-Cap Equity Fund has provided an annualized return of 20.9%.
The Fund's performance for 1998 lagged the S&P 500 index return which was
powered by a narrow band of stocks that performed extremely well in 1998. As
we reported to you in our 1998 Semi-Annual Report, our focus on risk control
caused us to avoid many of the "nifty-fifty" stocks, which performed very well.
In the third quarter of 1998, we decided that investors would continue to
gravitate toward the handful of premier blue-chip companies whose stocks were
performing well. Therefore, we concentrated our portfolio in these strong
companies whose valuations were high, but provided above-average earnings
stability and predictability. This proved to be the correct strategy, as our
superior fourth quarter return indicates.
In 1998, the stock market handsomely rewarded companies in strong sectors that
posted earnings which exceeded expectations. Historically, sound companies
with good franchise value were treated harshly for any misstep. We expect
these trends to continue in 1999, placing extreme value on proper stock
selection.
We will continue our investment strategy of emphasizing premier growth stocks
in the most attractive industries. Although valuation levels appear high by
historical standards, we believe the underlying demand for these securities
should continue to remain strong.
<Page 7>
Monetta Balanced Fund Period ended 12/31/98
Investment Objective: Market Capitalization Range: Average Maturity:
Capital Appreciation $50 million 8.2 Years
Total Net Assets:
$14.5 million
<TABLE>
<CAPTION>
PERFORMANCE:
Average Annual Total Return
Since Inception
1 Year 2 Year 9/1/95
<S> <C> <C> <C>
Monetta Balanced Fund 8.6% 14.7% 18.5%
Lipper Balanced Fund Index* 15.1% 17.7% 16.7%
</TABLE>
*Source Lipper Analytical Services, Inc.
<TABLE>
<CAPTION>
Measurement Period Monetta Lipper
(Fiscal Year End) Balanced Balanced
<S> <C> <C>
9/95 10,000 10,239
12/95 10,616 10,697
3/96 11,131 10,936
6/96 11,913 11,158
9/96 12,547 11,453
12/96 13,369 12,093
3/97 13,358 12,150
6/97 14,642 13,460
9/97 16,431 14,325
12/97 16,205 14,549
3/98 17,321 15,698
6/98 16,923 15,932
9/98 15,004 15,009
12/98 17,602 16,737
</TABLE>
The graph above to the right compares the change in value of a $10,000
investment in the Monetta Balanced Fund to the Lipper Balanced Fund Index with
dividends and capital gains reinvested. Please refer to footnote at bottom of
Page 2.
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
<S> <C>
Fixed Income (A) - 33.6%
Consumer Related - 27.9%
Technology - 21.2%
Medical - 6.9%
Industrial - 6.4%
Financial - 4.0%
</TABLE>
(A) Fixed income net of other assets and liabilities
TOP 5 EQUITY HOLDINGS:
<TABLE>
<CAPTION>
% of Net Assets
<S> <C>
Tyco Int'l Ltd. 2.6%
Int'l Business Machine Corp. 2.6%
MCI Worldcom, Inc. 2.5%
Intel Corp. 2.5%
Merrill Lynch & Co., Inc. 2.3%
Total Top 5 Holdings 12.5%
</TABLE>
COMMENTARY
The Monetta Balanced Fund posted an 8.6% return in 1998, finishing the year
with a strong 17.3% return in the fourth quarter. The average 1998 return of
the Lipper Analytical Service, Inc., Balance Fund category was 13.5%. From
inception, September 1, 1995 through December 31, 1998, the Fund's average
annual return was 18.5% versus the Lipper Balance Fund Index of 16.7%
While the Fund posted a respectable return, the Fund's overall performance was
negatively affected by its balanced weightings in the small, mid and large
capitalization areas of the market due to the significant underperformance of
small-cap stocks in 1998. In fact, the 30% return disparity between large-cap
and small-cap stocks was the widest since 1930.
Given the relative attractiveness of small-cap securities, we are hesitant to
significantly shift the equity group weightings. However, we have lightened
our exposure somewhat to the smallest companies in the small-cap sector, as it
appears likely that when investors begin to focus on the small-cap sector, they
will gravitate toward the larger companies within the group.
A number of holdings across market capitalization sectors posted strong results
in the fourth quarter. Small and mid-cap contributors include Consolidated
Graphics, Medicis Pharmaceutical and QRS Corp. Strong performers in the large-
cap area included AirTouch Communications, Best Buy Company and Federal Express
Corp.
The Monetta Balanced Fund is unique in its exposure to small- and mid-cap
equities, as many balanced funds ignore these sectors completely. We are
optimistic that our approach will pay off handsomely should investor interest
returns to these groups.
We intend to maintain an overall portfolio mix of 65% stocks and 35% bonds.
The fixed income position of the Fund has an average maturity of approximately
eight years and is invested in investment grade
securities.
<Page 8>
Monetta Intermediate Bond Fund Period ended 12/31/98
Investment Objective: 30-Day SEC Yield: Average Maturity: Total Net Assets:
Capital Appreciation/Income 5.23% 4.7 Years $6.7 million
<TABLE>
<CAPTION>
PERFORMANCE:
Average Annual Total Return
Since Inception
1 Year 5 Year 3/1/93
<S> <C> <C> <C>
Monetta Intermediate
Bond Fund 8.38% 7.38% 7.73%
Lehman Gov't/Corp
Interm. Bond Index* 8.44% 6.60% 6.53%
</TABLE>
*Source Lipper Analytical Services, Inc.
[Performance Graph Appears Here]
<TABLE>
<CAPTION>
Measurement Period Monetta Intermediate Lehman
(Fiscal Year Covered) Bond Fund
<S> <C> <C>
3/1/93 10,000 10,007
3/93 10,000 10,028
6/93 10,399 10,255
9/93 10,732 10,486
12/93 10,817 10,504
3/94 10,585 10,291
6/94 10,494 10,229
9/94 10,613 10,313
12/94 10,705 10,302
3/95 11,270 10,754
6/95 11,866 11,292
9/95 12,046 11,479
12/95 12,282 11,883
3/96 12,245 11,784
6/96 12,428 11,859
9/96 12,702 12,068
12/96 13,074 12,364
3/97 13,041 12,350
6/97 13,485 12,715
9/97 13,908 13,058
12/97 14,238 13,338
3/98 14,443 13,546
6/98 14,748 13,800
9/98 15,382 14,420
12/98 15,431 14,463
</TABLE>
The graph above to the right compares the change in value of a $10,000
investment in the Monetta Intermediate Bond Fund to the Lehman
Government/Corporate Intermediate Bond Index. The Lehman Government/Corporate
Intermediate Bond Index measures that specific segment of the bond market.
Please refer to footnote at bottom of Page 2.
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
<S> <C>
Corporate Bonds - 71.5%
US Treasury - 14.4%
Government Agencies - 9.5%
Government Obligations - 9.5%
S/T Investments (A) - 3.0%
Preferred Stock - 1.6%
</TABLE>
(A) Short-term investments net of other assets and liabilities
MATURITY PROFILE:
<TABLE>
<CAPTION>
% of Net Assets
<S> <C>
1 Year of Less 5.1%
1-3 Years 23.1%
4-6 Years 43.4%
7-10 Years 28.2%
Over 10 Years 0.2%
Total 100.0%
</TABLE>
COMMENTARY
The Monetta Intermediate Bond Fund appreciated 8.38% in 1998 versus an average
return of 7.25% of Lipper Analytical Services, Intermediate Investment Grade
Debt Funds category ranking the fund in the top 26th percentile out of 239
funds. For the five years ending December 31, 1998, the Fund generated a
cumulative return of 42.8%, ranking it in the top 10 percentile of its Lipper
category out of 109 funds.
The Fund's performance benefited from its emphasis on a high quality corporate
investment portfolio and a shorter average maturity of 4.7 years. The Fund's
appreciation in 1998 was particularly significant considering that the
corporate credit sector underperformance was the worst of any other period
since the inception of the benchmark fixed income indices in 1973.
Last year was plagued by concern over the slowing economic conditions in Asia,
Russia, and Latin America. The Federal Reserve took on the role of the world's
Central Banker with a series of three short-term interest rate cuts in the
second half of the year, which helped stabilize the markets. The 30-year
Treasury yield reached a low of 4.70% before ending the year at 5.10%. At one
point, the yield difference between the two-year note and 30-year bond was only
12 basis points.
Looking into 1999, we believe that the higher yielding sectors of the corporate
bond market will be the initial performance leaders. We expect the Fed will
resume an easing monetary policy, and that bond yields will remain at or below
current levels.
We feel that the inordinately wide corporate spreads are an opportunity to add
incremental yield to the portfolio. As the markets continue to stabilize and
the economic outlook clears, the lower-investment-grade sectors may warrant
consideration for capital appreciation opportunities.
The Fund will continue to follow the same course that has made it a strong
performer since its inception over five years ago - overweight higher yielding
corporate sectors and minimize duration or maturity risk.
<Page 9>
Monetta Government Money Market Fund Period ended 12/31/98
Investment Objective: 7-Day Yield: Average Days to Maturity:
Income and Capital Preservation 5.08% 40 Days
Total Net Assets:
$4.1 million
<TABLE>
<CAPTION>
PERFORMANCE:
Average Annual Total Return
Since Inception
1 Year 5 Year (3/1/93)
<S> <C> <C> <C>
Monetta Government Money
Market Fund 5.24%** 5.07%** 4.74%**
Lipper US Gov't Money
Market Funds Avg.* 4.89% 4.72% 4.41%
</TABLE>
*Source Lipper Analytical Services, Inc.
[Performance Graph Appears Here]
<TABLE>
<CAPTION>
Measurement Period Money Market Lipper Average
(Fiscal Year Covered)
<S> <C> <C>
3/1/93 10,000 10,000
3/93 10,013 10,023
6/93 10,072 10,088
9/93 10,147 10,154
12/93 10,224 10,222
3/94 10,301 10,290
6/94 10,396 10,374
9/94 10,507 10,475
12/94 10,637 10,597
3/95 10,788 10,738
6/95 10,950 10,885
9/95 11,110 11,030
12/95 11,262 11,174
3/96 11,401 11,309
6/96 11,539 11,440
9/96 11,683 11,579
12/96 11,832 11,711
3/97 11,977 11,846
6/97 12,126 11,988
9/97 12,281 12,135
12/97 12,441 12,284
3/98 12,599 12,433
6/98 12,760 12,585
9/98 12,927 12,738
12/98 13,091 12,894
</TABLE>
**Total returns are net of advisory fees waived and voluntary absorption of all
or part of the Fund's operating expenses by the Advisor. Had the advisory fee
not been waived, the 7-day SEC yield would have been 4.73%, versus 5.08% on
December 31, 1998. An investment in the Monetta Government Money Market Fund
is neither insured or guaranteed by the U.S. Government. There can be no
assurance that the Fund will be able to maintain a stable $1.00 per share net
asset value. Please refer to footnote at bottom of Page 2.
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
<S> <C>
Government Agency - 98.6%
S/T Investments Net (A) - 1.4%
</TABLE>
(A) Short-term investements net of other assets and liabilities
ALLOCATION:
<TABLE>
<CAPTION>
<S> <C>
Government Agencies 98.6%
Short Term Investments-Net 1.4%
Total 100.0%
</TABLE>
COMMENTARY
The Monetta Government Money Market Fund posted an impressive return of 5.24%
in 1998 versus an average return of 4.89% for the Lipper U.S. Government Fund
category. This performance ranked the Fund 5th of 113 Funds in this Lipper
category for the one year period ended December 31, 1998. For the five year
period ending December 31, 1998, the Fund ranked 6th of 85 Funds.
The Fund's positive relative performance was due in large part to the over-
weighting of agency discount notes versus short governments and bills. Money
market yields declined steadily over the last year as evidenced by the 60-89
day Federal Farm Credit yield curve which declined from 5.52% on December 31,
1997 to 4.72% on December 31, 1998.
We are not expecting any Federal Reserve easing in the first quarter but
anticipate slower growth as the year develops and expect easing initiatives to
resume in the Spring.
At this time, we do not expect the short end of the yield curve to change
materially and do not anticipate any major changes in security selection or
maturity risk.
The Monetta Government Money Market Fund is the most conservative of the
Monetta Family of Mutual Funds. It's primary objectives are the preservation
of capital and liquidity. The investment emphasis is on stability and current
income.
<Page 10>
INDEPENDENT AUDITORS REPORT
The Boards of Directors and Trustees and the Shareholders of
Monetta Fund, Inc., and Monetta Trust:
We have audited the accompanying statements of assets and liabilities of
Monetta Fund, Inc., and Monetta Trust (comprising, respectively, the Small-Cap
Equity Fund, Mid-Cap Equity Fund,Large-Cap Equity Fund, Balanced Fund,
Intermediate Bond Fund, and Government Money Market Fund), collectively
referred to as the "Funds," including the schedules of investments as of
December 31, 1998, and the related statements of operations for the period then
ended, the statements of changes in net assets for each of the periods
presented in the two-year period then ended, and the financial highlights for
each of the periods presented in the five-year period then ended. These
financial statements and financial highlights are the responsibility of the
Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of December 31, 1998, by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Monetta Fund, Inc., and each of the respective funds constituting the Monetta
Trust as of December 31, 1998, the results of their operations for the period
then ended, the changes in their net assets for each of the periods presented
in the two-year period then ended, and the financial highlights for each of the
periods presented in the five-year period then ended, in conformity with
generally accepted accounting principles.
KPMG LLP
Chicago, Illinois
January 15, 1999
<Page 11>
Schedule of Investments December 31, 1998
MONETTA FUND
Shares or Quoted
Principal Market Value
Amount (In Thousands)
<TABLE>
<CAPTION>
COMMON STOCKS - 94.6%
<S> <C>
Consumer Related - 38.9% $48,401
Broadcasting/Cable TV - 5.4%
*60,000 Metro Networks, Inc. $2,558
*443,300 VDI Media 4,211
6,769
Food Processing - 0.8%
*35,000 Celestial Seasonings, Inc. 974
Recreation/Entertainment - 1.7%
*85,000 Avis Rent-A-Car, Inc. 2,056
Restaurants/Lodging - 2.6%
*80,000 Outback Steakhouse, Inc. 3,190
Retail Manufacturers & Distribution - 2.3%
*110,000 Home Products Int'l, Inc. 1,093
*65,000 Performance Food Group Co. 1,828
2,921
Retail Trades - 2.1%
*150,000 Just For Feet, Inc. 2,606
Miscellaneous - 24.0%
*411,600 APAC Teleservices, Inc 1,557
*50,000 Big Flower Holdings, Inc. 1,103
*37,300 BHI Corp. 1,147
*100,000 Consolidated Graphics, Inc. 6,756
*90,000 FirstService Corp. 1,075
*70,000 F.Y.I., Inc. 2,240
*43,700 HA-LO Industries, Inc. 1,644
*102,600 MAXIMUS, Inc. 3,796
*100,000 Modis Professional Services 1,450
*36,000 QRS Corp. 1,728
230,000 Schawk, Inc. 3,191
20,000 Valassis Communications, Inc. 1,033
*351,700 Vestcom Int'l, Inc. 3,165
29,885
Financial Related - 3.7% $4,662
Financial Services - 3.7%
*60,000 LaSalle Partners, Inc. $1,767
*90,000 CNA Surety Corp. 1,417
*52,800 Trammell Crow Co. 1,478
4,662
Industrial Related - 14.9% $18,685
Chemicals - 0.9%
48,000 Cambrex Corp. $1,152
Energy Resources & Services - 1.5%
*75,000 Hanover Compressor Co. 1,927
Industrial & Electronics Products - 9.1%
*75,000 AFC Cable Systems, Inc. 2,522
65,000 Applied Power, Inc. - CL A 2,454
*77,500 JPM Co. 1,085
80,000 Spartech Corp. 1,760
*62,500 SPS Technologies, Inc. 3,539
11,360
Transportation - 2.3%
*75,000 Carey International, Inc. 1,312
*37,000 Expeditors Int'l of
Washington, Inc. 1,554
2,866
Miscellaneous - 1.1%
*80,000 Waste Industries, Inc. 1,380
Medical Related - 18.2% $22,757
Medical Supplies - 0.5%
*20,000 Conmed Corp. $660
Medical Technology - 2.5%
50,000 ADAC Laboratories 998
*80,000 SteriGenics Int'l, Inc. 2,080
3,078
<Page 12>
Pharmaceuticals - 11.2%
*200,500 D & K Healthcare
Resources, Inc. 5,464
78,500 Jones Pharma, Inc. 2,865
*95,000 Medicis Pharmaceutical
Corp. - CL A 5,664
13,993
Physician Services - 3.6%
*130,000 Castle Dental Centers, Inc. 796
*35,300 Henry Schein, Inc. 1,580
*55,000 MedQuist, Inc. 2,172
4,548
Miscellaneous - 0.4%
*10,000 FPIC Insurance Group, Inc. 478
Technology Related - 18.9% $23,473
Computer Software and Systems - 2.2%
*30,000 Apex PC Solutions, Inc. $866
*100,000 Platinum Technology, Inc. 1,913
2,779
Computer/Office Equipment - 3.7%
*80,000 CHS Electronics, Inc. 1,355
*150,000 ScanSource, Inc. 3,225
4,580
Semiconductors - 5.0%
*410,700 Aeroflex, Inc. 6,212
Telecommunications/Equipment - 6.9%
*120,000 Brightpoint, Inc. 1,650
*120,000 Comdial Corp. 1,058
*50,000 Dycom Industries, Inc. 2,856
*82,200 Quanta Services, Inc. 1,814
25,000 Superior Telecom, Inc. 1,181
8,559
Miscellaneous - 1.1%
*10,000 Catalina Marketing Corp 684
*25,000 USWeb Corp. 659
1,343
Total Common Stocks
(Cost $95,489) (a) 117,978
Variable Demand Notes - 1.6%
1,413,900 Firstar Bank Milwaukee,
N.A. - 5.3% 1,414
269,200 General Mills - 5.23% 269
271,000 Pitney Bowes - 5.23% 271
36,000 Sara Lee - 5.23% 36
Total Variable Demand Notes 1,990
Commercial Paper - 5.2%
1,500,000 Albertson's - 5.23%
Due 01/12/99 1,498
1,000,000 Allstate - 5.15%
Due 01/11/99 999
1,000,000 Central Illinois Light Co. - 5.15%
Due 01/06/66 999
1,500,000 General Mills - 5.25%
Due 01/04/99 1,499
1,500,000 Met Life Funding - 5.38%
Due 01/19/99 1,496
Total Commercial Paper 6,491
Total Short-Term Investments 8,481
Total Investments - 101.4%
(Cost $103,970) (a) 126,459
Other Assets Less Liabilities - (1.4%) (1,770)
Net Assets - 100% $124,689
</TABLE>
(a) For tax purposes, cost is $104,046; the aggregate gross unrealized
appreciation is $26,095, and aggregate gross unrealized depreciation is $3,606,
resulting in net unrealized appreciation of $22,489 (in thousands).
See accompanying notes to financial statements.
*Non-income producing security
<Page 13>
Schedule of Investments December 31, 1998
MONETTA SMALL-CAP EQUITY FUND
Shares or Quoted
Principal Market Value
Amount (In Thousands)
<TABLE>
<CAPTION>
COMMON STOCKS - 94.1%
<S> <C>
Consumer Related - 36.4% $1,452
Broadcasting/Cable TV - 8.0%
*3,000 Metro Networks, Inc. $128
*20,000 VDI Media 190
318
Recreation/Entertainment - 3.6%
*6,000 Avis Rent-A-Car, Inc. 145
Retail Manufacturers & Distribution - 2.5%
*10,000 Home Products Int'l, Inc. 99
Miscellaneous - 22.3%
*3,000 Consolidated Graphics, Inc. 203
*3,000 HA-LO Industries, Inc. 113
*5,000 MAXIMUS, Inc. 185
*3,000 QRS Corp. 144
6,000 Schawk, Inc. 83
*18,000 Vestcom Int'l, Inc. 162
890
Financial Related - 2.2% $88
Financial Services - 2.2%
*3,000 LaSalle Partners, Inc. $88
Industrial Related - 13.5% $536
Industrial & Electronics Products - 10.4%
*4,000 AFC Cable Systems, Inc. $134
5,000 Spartech Corp. 110
*3,000 SPS Technologies, Inc. 170
414
Transportation - 3.1%
*7,000 Carey Int'l, Inc. 122
Medical Related - 21.1% $838
Medical Technology - 3.3%
*5,000 SteriGenics Int'l, Inc. $130
Pharmaceuticals - 14.7%
*8,200 D & K Healthcare Resources, Inc 223
5,000 Jones Pharma, Inc. 183
*3,000 Medicis Pharmaceutical
Corp. - CL A 179
585
Physician Services - 3.1%
*20,000 Castle Dental Centers, Inc. 123
Technology Related - 20.9% $832
Computer/Office Equipment - 7.3%
*7,000 CHS Electronics, Inc. $119
*8,000 ScanSource, Inc. 172
291
Semiconductors - 5.7%
*15,000 Aeroflex, Inc. 227
Telecommunications/Equipment - 7.9%
*10,000 Brightpoint, Inc. 137
*8,000 Quanta Services, Inc. 177
314
Total Common Stocks
(Cost $2,991 ) (a) 3,746
Variable Demand Notes - 5.6%
150,000 Firstar Bank Milwaukee,
N.A. - 5.30% 150
59,100 General Mills - 5.23% 59
10,000 Pitney Bowes - 5.23% 10
2,000 Sara Lee - 5.23% 2
Total Variable Demand Notes 221
Total Investments - 99.7%
(Cost $3,212 ) (a) 3,967
Other Assets Less Liabilities - 0.3% 13
Net Assets - 100% $3,980
</TABLE>
(a) For tax purposes, cost is $3,219; the aggregate gross unrealized
appreciation is $798, and aggregate gross unrealized depreciation is $43,
resulting in net unrealized appreciation of $755 (in thousands).
See accompanying notes to financial statements.
*Non-income producing security
<Page 14>
Schedule of Investments December 31, 1998
MONETTA MID-CAP EQUITY FUND
Shares or Quoted
Principal Market Value
Amount (In Thousands)
<TABLE>
<CAPTION>
COMMON STOCKS - 98.4%
<S> <C>
Consumer Related - 42.0% $7,956
Broadcasting/Cable TV - 5.2%
4,000 Media General, Inc. - CL A $212
*80,900 VDI Media 769
981
Recreation/Entertainment - 3.7%
*16,000 Galileo Int'l, Inc. 696
Restaurants/Lodging - 6.1%
*23,000 Outback Steakhouse, Inc. 917
*5,000 U.S. Foodservice 245
1,162
Retail Trades - 10.1%
*4,000 Best Buy Company, Inc. 246
*7,000 Dollar Tree Stores, Inc. 306
*35,000 Just For Feet, Inc. 608
10,000 Flowers Industries, Inc. 239
10,000 Intimate Brands, Inc. 299
*4,000 Starbucks Corp. 224
1,922
Miscellaneous - 16.9%
*100,000 APAC Teleservices, Inc. 378
*15,000 Consolidated Graphics, Inc. 1,013
*10,000 MAXIMUS, Inc. 370
*25,000 Modis Professional Services 363
40,000 Schawk, Inc. 555
10,000 Valassis Communications, Inc. 516
3,195
Financial Related - 10.6% $2,012
Financial Services - 10.6%
10,000 Aflac, Inc. $440
10,000 Conseco, Inc. 305
5,000 City National Corp. 208
*7,000 Fiserv, Inc. 360
*20,000 Newcourt Credit Group, Inc. 699
2,012
Industrial Related - 5.8% $1,097
Energy Resources & Services - 1.6%
10,000 NIPSCO Industries, Inc. $304
Industrial & Electronics Products - 4.2%
*5,000 Solectron Corp. 465
*5,800 SPS Technologies, Inc. 328
793
Medical Related - 13.7% $2,595
Pharmaceuticals - 11.3%
*7,000 Agouron Pharmaceuticals, Inc. $411
*4,000 Biogen, Inc. 332
4,500 McKesson Corp. 356
*9,000 Medicis Pharmaceutical
Corp. - CL A 537
*8,000 Watson Pharmaceuticals, Inc. 503
2,139
Physician Services - 2.4%
*5,000 Genzyme Corp. 249
*7,000 Total Renal Care Holdings, Inc. 207
456
Technology Related - 26.3% $4,958
Computer Software and Systems - 13.6%
*4,000 At Home Corp. - Ser. A $297
4,000 Ceridian Corp. 279
*5,000 NCR Corp. 209
6,000 Network Associates, Inc. 398
*15,000 Novell, Inc. 272
*40,000 Platinum Technology, Inc. 765
10,000 Unisys Corp. 344
2,564
Computer/Office Equipment - 3.0%
*20,000 CHS Electronics, Inc. 338
*3,000 Jabil Circuit, Inc. 224
562
Telecommunications/Equipment - 5.5%
*4,000 Comverse Technology, Inc. 284
*10,000 Qwest Communications, Inc. 500
4,000 Symbol Technologies 256
1,040
<Page 15>
Miscellaneous - 4.2%
10,000 Reynolds & Reynolds - CL A 229
*5,000 Sterling Commerce, Inc. 225
10,000 Snyder Communications, Inc. 338
792
Total Common Stocks
(Cost $16,166 ) (a) 18,618
Variable Demand Notes - 6.0%
625,100 Firstar Bank Milwaukee,
N.A. - 5.30% 625
211,700 Pitney Bowes - 5.23% 212
303,700 Sara Lee - 5.23% 303
Total Variable Demand Notes 1,140
Commercial Paper - 25.6%
1,000,000 AIG Funding - 4.9%
Due 01/04/99 1,000
1,000,000 Anheuser Busch - 4.95%
Due 01/04/99 1,000
500,000 Carolina Power & Light - 5.40%
Due 01/28/99 498
750,000 Coca Cola - 5.20%
Due 01/11/99 749
800,000 Ford Motor Credit - 5.40%
Due 01/19/99 798
800,000 General Motors Accept. Corp
5.40% Due 01/25/99 797
Total Commercial Paper 4,842
Total Short-Term Investments 5,982
Total Investments -130.0 %
(Cost $22,148) (a) 24,600
Other Assets Less Liabilities - (30.0%) (5,680)
Net Assets - 100% $18,920
</TABLE>
(a) For tax purposes, cost is $22,161; the aggregate gross unrealized
appreciation is $2,741, and aggregate gross unrealized depreciation is $289,
resulting in net unrealized appreciation of $2,452 (in thousands).
See accompanying notes to financial statements.
*Non-income producing security.
MONETTA LARGE-CAP EQUITY FUND
Shares or Quoted
Principal Market Value
Amount (In Thousands)
<TABLE>
<CAPTION>
COMMON STOCKS - 95.7%
<S> <C>
Consumer Related - 33.0% $1,381
Broadcasting/CableTV - 6.9%
*3,000 Clear Channel Communications $164
2,000 Time Warner, Inc. 124
288
Retail Trades - 20.5%
*2,000 Best Buy Company, Inc. 123
2,000 Dayton Hudson Corp. 109
2,000 Gap, Inc. 112
2,500 Home Depot, Inc. 153
*2,500 Kohls Corp. 154
*1,500 Starbucks Corp. 84
1,500 WalMart Stores 122
857
Miscellaneous - 5.6%
*1,200 General Electric Co. 123
1,500 Tyco Int'l, Ltd. 113
236
Financial Related - 14.6% $610
Financial Services - 14.6%
1,000 American Int'l Group $97
1,000 American Express 102
2,500 Citigroup, Inc. 124
2,000 Merrill Lynch & Co., Inc. 133
3,000 Paychex, Inc. 154
610
Industrial Related - 8.1% $342
Chemicals - 2.3%
2,000 Monsanto Corp. $95
Energy Resources & Services - 1.6%
1,500 Schlumberger Ltd. 69
Transportation - 4.2%
*2,000 FDX Corporation 178
Medical Related - 11.1% $463
Pharmaceuticals - 11.1%
1,500 Cardinal Health, Inc. $114
2,000 Schering - Plough Corp. 110
1,500 Warner - Lambert Co. 113
*2,000 Watson Pharmaceuticals, Inc. 126
463
<Page 16>
Technology Related - 28.9% $1,209
Computer Software and Systems - 11.2%
*2,000 Cisco Systems, Inc. $185
1,000 Int'l Business Machines Corp. 185
*700 Microsoft Corp. 97
467
Semiconductors - 2.8%
1,000 Intel Corp. 119
Telecommunications/Equipment - 14.9%
*1,500 Air Touch Communications, Inc. 108
2,000 GTE Corporation 135
1,500 Lucent Technologies, Inc. 165
*3,000 MCI Worldcom, Inc. 215
623
Total Common Stocks
(Cost $3,168) (a) 4,005
Variable Demand Notes - 3.8%
30,700 Firstar Bank Milw., N.A. - 5.30% 31
55,600 General Mills - 5.30% 55
72,700 Pitney Bowes - 5.23% 73
Total Variable Demand Notes 159
Total Investments - 99.5%
(Cost $3,327) (a) 4,164
Other Assets Less Liabilities - 0.5% 21
Net Assets - 100% $4,185
</TABLE>
(a) Cost is identical for book and tax purposes; the
aggregate gross unrealized appreciation is $871, and aggregate gross unrealized
depreciation is $34, resulting in net unrealized appreciation of $837 (in
thousands).
See accompanying notes to financial statements.
*Non-income producing security
MONETTA BALANCED FUND
Shares or Quoted
Principal Market Value
Amount (In Thousands)
<TABLE>
<CAPTION>
COMMON STOCKS - 66.4%
<S> <C>
Consumer Related - 27.9% $4,039
Broadcasting/Cable TV - 5.0%
*5,000 Clear Channel Communications $272
*4,000 Metro Networks, Inc. 171
*30,000 VDI Media 285
728
Recreation/Entertainment - 0.8%
*5,000 Avis Rent-A-Car, Inc. 121
Restaurants/Lodging - 2.2%
*8,000 Outback Steakhouse, Inc. 319
Retail Trades - 8.5%
*3,000 Best Buy Company, Inc. 184
5,000 Dayton Hudson Corp. 271
*7,000 Just For Feet, Inc. 122
3,000 Home Depot, Inc. 184
*4,000 Starbucks Corp. 224
3,000 WalMart Stores 244
1,229
Miscellaneous - 11.4%
*25,000 APAC Teleservices, Inc. 95
*3,000 Consolidated Graphics, Inc. 203
*3,500 MAXIMUS, Inc. 130
*5,000 QRS Corp. 240
5,000 Schawk, Inc. 69
5,000 Tyco Int'l, Ltd. 377
5,000 Valassis Communications, Inc. 258
*30,000 Vestcom Int'l, Inc. 270
1,642
Financial Related - 4.0% $581
Financial Services - 4.0%
5,000 Citigroup, Inc. $247
5,000 Merrill Lynch & Co., Inc. 334
581
Industrial Related - 6.4% $931
Energy Resources & Services - 1.0%
3,000 Schlumberger Ltd. $138
<Page 17>
Industrial & Electronics Products - 3.6%
*6,000 AFC Cable Systems, Inc. 202
*7,000 JPM Co. 98
*4,000 SPS Technologies, Inc. 226
526
Transportation - 1.8%
*3,000 FDX Corporation 267
Medical Related - 6.9% $995
Medical Technology - 1.3%
*7,000 SteriGenics Int'l, Inc. $182
Pharmaceuticals - 5.6%
3,000 Cardinal Health, Inc. 228
*8,000 D&K Healthcare Resc. Inc. 218
*3,000 Medicis Pharm. Corp. - CL A 179
2,500 Warner-Lambert Co. 188
813
Technology Related - 21.2% $3,076
Computer Software and Systems - 4.5%
2,000 Int'l Business Machines Corp. $369
*1,000 Microsoft Corp. 139
*3,000 Infoseek Corp. 148
656
Computer/Office Equipment - 1.5%
*10,000 ScanSource, Inc. 215
Semiconductors - 4.5%
*20,000 Aeroflex, Inc. 302
3,000 Intel Corp. 356
658
Telecommunications/Equipment - 10.7%
*4,000 AirTouch Communications, Inc. 289
4,000 GTE Corporation 270
2,500 Lucent Technologies, Inc. 275
*7,000 Quanta Services, Inc. 154
*4,000 Qwest Communications Int'l 200
*5,000 MCI Worldcom, Inc. 359
1,547
Total Common Stocks
(Cost $7,676 ) (a) 9,622
Variable Demand Notes - 0.2%
24,000 Firstar Bank Milw., N.A. - 5.30% 24
Corporate Bonds - 26.8%
300,000 Bank United Corp
8.875% Due 05/01/07 321
450,000 Chase Manhattan Corp
9.750% Due 11/01/01 499
500,000 Dupont
8.250% Due 09/15/06 594
500,000 General Motors
7.100% Due 03/15/06 544
550,000 Eli Lilly
8.375% Due 02/07/05 627
500,000 Merck & Co Inc.
6.750% Due 09/19/05 537
300,000 ONT- Global Bond
7.375% Due 01/27/03 326
400,000 Worldcom, Inc.
7.550% Due 04/01/04 434
Total Corporate Bonds 3,882
Government Obligations - 2.0%
275,000 HUD Housing Urban Development
6.410% Due 08/01/05 292
Mortgage Obligations - 2.7%
400,000 Green Tree Home Imprv. Mortg.
6.780% Due 06/15/28 397
Total Investments - 98.1%
(Cost $12,150 ) (a) 14,217
Other Assets Less Liabilities - 1.9% 272
Net Assets - 100% $14,489
</TABLE>
(a) Cost is identical for book and tax purposes; the aggregate gross unrealized
appreciation is $2,216, and aggregate gross unrealized depreciation is $149,
resulting in net unrealized appreciation of $2,067 (in thousands).
See accompanying notes to financial statements.
*Non-income producing security
<Page 18>
Schedule of Investments December 31, 1998
MONETTA INTERMEDIATE BOND FUND
Shares or Quoted
Principal Market Value
Amount (In Thousands)
<TABLE>
<CAPTION>
Preferred Stock - 1.6%
<S> <C>
4,000 SI Financing - 9.50% 06/30/26 $106
Treasury Notes - 14.4%
200,000 5.500% Due 4/15/00 202
175,000 8.875% Due 05/15/00 185
200,000 6.625% Due 04/30/02 211
350,000 6.000% Due 07/31/02 365
963
Corporate Bonds - 71.5%
260,000 Pacific Gas & Electric - 8.750%
01/01/01 277
150,000 First Chicago Corp. - 11.250%
02/20/01 167
300,000 Chase Manhattan Corp. - 9.750%
11/01/01 333
300,000 Santa Fe Pacific - 8.375%
11/01/01 321
100,000 RJR Nabisco Inc. - 8.625%
12/01/02 102
125,000 Texaco Capital - 8.500%
02/15/03 140
100,000 Webb, Del E. - 9.750%
3/1/03 102
350,000 U.S. Central Credit - 6.000%
05/21/03 361
250,000 John Deere Credit - 6.125%
05/30/03 251
150,000 National Rural Utility - 6.000%
01/15/04 155
300,000 Worldcom, Inc. - 7.550%
04/01/04 325
300,000 Money Store - 8.375%
04/15/04 335
170,000 Commercial Credit Co. - 7.875%
07/15/04 187
225,000 Eli Lilly - 8.375%
02/07/05 257
250,000 Union Pacific Co. - 7.600%
05/01/05 269
225,000 Merck & Co , Inc. - 6.750%
09/19/05 242
100,000 Salomon, Inc. - 6.750%
1/15/06 104
250,000 Bank United Corp. - 8.875%
05/01/07 267
300,000 LCI Int'l, Inc. - 7.250%
06/15/07 309
250,000 Calenergy Co., Inc. - 7.630%
10/15/07 268
4,772
U.S. Government Agencies - 5.4%
250,000 FHLB 4.90% Due 02/10/19 249
100,000 FHLB 6.44% Due 11/28/20 107
356
Government Obligations - 3.9%
250,000 HUD 6.36% Due 08/01/04 263
Mortgage Obligations - 0.2%
12,678 GNMA, 8.50% Due 07/15/21 14
Variable Demand Notes - 1.1%
46,000 Firstar Bank Milw., N.A .- 5.30% 46
29,700 General Mills - 5.23% 30
Total Variable Demand Notes 76
Total Investments - 98.1%
(Cost $ 6,454) (a) 6,550
Other Assets and Liabilities - 1.9% 126
Net Assets - 100% $6,676
</TABLE>
Footnote for Intermediate Bond Fund:
(a) Cost is identical for book and tax purposes; the aggregate gross unrealized
appreciation is $101, and aggregate gross unrealized depreciation is $5,
resulting in net unrealized appreciation of $96 (in thousands). See
accompanying notes to financial statements.
*Non-income producing security
MONETTA GOVERNMENT MONEY MARKET FUND
Shares or
Principal Market Value
Amount (In Thousands)
<TABLE>
<CAPTION>
GOVERNMENT OBLIGATIONS - 98.6%
<S> <C>
Federal Home Loan Bank Discount - 54.4%
628,000 Due 01/04/99 $628
570,000 Due 01/08/99 569
265,000 Due 01/15/99 265
100,000 Due 01/20/99 100
252,000 Due 01/26/99 251
152,000 Due 02/05/99 151
265,000 Due 02/17/99 263
2,227
Federal National Mortgage Assoc.
Discount Note - 8.4%
349,000 Due 02/11/99 347
Federal Home Loan Mortgage Corp.
Discount Notes - 35.8%
684,000 Due 03/05/99 678
350,000 Due 03/10/99 347
447,000 Due 04/09/99 441
1,466
Total Investments - 98.6%
(Cost $4,040 ) (a) 4,040
Other Assets Less Liabilities - 1.4% 55
Net Assets - 100% $4,095
</TABLE>
(a) Cost is identical for book and tax purposes.
See accompanying notes to financial statements.
<Page 19>
Statements of Assets and Liabilities December 31, 1998
(In Thousands)
<TABLE>
<CAPTION>
Small-Cap Mid-Cap Large-Cap
Monetta Equity Equity Equity
Fund Fund Fund Fund
Assets:
<S> <C> <C> <C> <C>
Investments at market value
(cost: $103,970; $3,212;
$22,148; $3,327; $12,150;
$6,454; $4,040) (Note 1) $126,459 $3,967 $24,600 $4,164
Cash 0 0 0 6
Interest and dividends
receivable 16 1 7 1
Receivable for securities
sold 3,317 47 918 113
Total Assets 129,792 4,015 25,525 4,284
Liabilities:
Payables:
Custodial bank 1,496 23 6 0
Investment advisory fees
(Note 2) 100 2 12 2
Distribution and service
charges payable 0 1 10 2
Investments purchased 3,410 0 6,570 89
Fund shares redeemed 1 0 0 0
Accrued expenses 96 9 7 6
Total Liabilities 5,103 35 6,605 99
Net Assets 124,689 3,980 18,920 4,185
Analysis of net assets:
Paid in capital (b) 114,596 3,879 16,853 3,613
Accumulated undistributed
net investment income 0 0 0 0
Accumulated undistributed
net realized gain (loss) (12,396) (654) (385) (265)
Net unrealized appreciation
on investments 22,489 755 2,452 837
Net Assets $124,689 $3,980 $18,920 $4,185
Net asset value, offering price,
and redemption price per share
(8,333 shares of capital stock
and 297; 1,394; 311; 1,001;
627; 4,095 shares of beneficial
interest issued and outstanding
respectively) $14.96 $13.40 $13.57 $13.44
</TABLE>
See accompanying notes to financial statements.
(a) Rounds to less than $1,000.
(b) Amount for Monetta Fund represents $83 of $0.01 par value and $114,513 of
additional paid in capital, 100 million shares are authorized. Each fund of
Monetta Trust has an unlimited number of no par value share of beneficial
interest authorized.
Statements of Assets and Liabilities December 31, 1998
(In Thousands)
<TABLE>
<CAPTION>
Intermediate Government
Balanced Bond Money Market
Fund Fund Fund
Assets:
<S> <C> <C> <C>
Investments at market value
(cost: $103,970; $3,212;
$22,148; $3,327; $12,150;
$6,454; $4,040) (Note 1) $14,217 $6,550 $4,040
Cash 1 2 60
Interest and dividends
receivable 113 128 0
Receivable for securities
sold 228 0 0
Total Assets 14,559 6,680 4,100
Liabilities:
Payables:
Custodial bank 0 0 0
Investment advisory fees
Note (2) 5 1 0
Distribution and service
charges payable 5 1 0
Investments purchased 55 0 0
Fund shares redeemed 1 0 0
Accrued expenses 4 2 5
Total Liabilities 70 4 5
Net Assets 14,489 6,676 4,095
Analysis of net assets:
Paid in capital (b) 13,340 6,563 4,095
Accumulated undistributed
net investment income 2 (a) 0
Accumulated undistributed
net realized gain (loss) (920) 17 0
Net unrealized appreciation
on investments 2,067 96 0
Net Assets $14,489 $6,676 $4,095
Net asset value, offering price,
and redemption price per share
8,333 shares of capital stock
and 297; 1,394; 311; 1,001;
627; 4,095 shares of beneficial
interest issued and outstanding
respectively) $14.48 $10.65 $1.00
</TABLE>
See accompanying notes to financial statements.
(a) Rounds to less than $1,000.
(b) Amount for Monetta Fund represents $83 of $0.01 par value and $114,513 of
additional paid in capital, 100 million shares are authorized. Each fund of
Monetta Trust has an unlimited number of no par value share of beneficial
interest authorized.
<Page 20>
Statements of Operations December 31, 1998
(In Thousands)
<TABLE>
<CAPTION>
Small-Cap Mid-Cap Large-Cap
Monetta Equity Equity Equity
Fund Fund Fund Fund
Investment income and
expenses:
<S> <C> <C> <C> <C>
Investment income:
Interest $654 $9 $188 $28
Dividend 333 3 91 26
Other income 59 0 4 (a)
Total investment income 1,046 12 283 54
Expenses:
Investment advisory fee
(Note 2) 1,447 26 156 30
Distribution expense 0 9 52 10
Custodial fees and bank
cash management fee 47 3 10 4
Transfer and shareholder
servicing agent fee 477 44 33 31
Other 0 0 1 (a)
Total expenses 1,971 82 252 75
Expenses waived and
reimbursed 0 0 0 0
Expenses net of waived and
reimbursed expenses 1,971 82 252 75
Net investment income (loss) (925) (70) 31 (21)
Realized and unrealized gain
(loss) on investments:
Realized gain (loss) on
investments:
Proceeds from sales 294,212 6,526 81,067 10,875
Cost of securities sold 306,527 7,181 81,452 11,140
Net realized gain (loss) on
investments (12,315) (655) (385) (265)
Net unrealized appreciation on
investments:
Beginning of period 23,225 117 2,041 199
End of period 22,489 755 2,452 837
Net change in net unrealized
appreciation (depreciation)
on investments during the
period (736) 638 411 638
Net realized and unrealized
gain (loss) on investments (13,051) (17) 26 373
Net increase (decrease) in
net assets from operations $(13,976) $(87) $57 $352
</TABLE>
See accompanying notes to financial statements.
(a) Rounds to less than $1,000.
Statements of Operations December 31, 1998
(In Thousands)
<TABLE>
<CAPTION>
Intermediate Government
Balanced Bond Money Market
Fund Fund Fund
Investment income and
expenses:
<S> <C> <C> <C>
Investment income:
Interest $386 $283 $256
Dividend 36 7 0
Other income 0 (a) 0
Total investment income 422 290 256
Expenses:
Investment advisory fee
(Note 2) 58 16 12
Distribution expense 36 12 5
Custodial fees and bank
cash management fee 8 3 2
Transfer and shareholder
servicing agent fee 20 4 13
Other (a) 0 (a)
Total expenses 122 35 32
Expenses waived and
reimbursed 0 (9) (17)
Expenses net of waived and
reimbursed expenses 122 26 15
Net investment income (loss) 300 264 241
Realized and unrealized gain
(loss) on investments:
Realized gain (loss) on
investments:
Proceeds from sales 22,695 2,544 26,826
Cost of securities sold 23,614 2,482 26,826
Net realized gain(loss) on
investments: (919) 62 0
Net unrealized appreciation on
investments:
Beginning of period 351 57 0
End of period 2,067 96 0
Net change in net unrealized
appreciation (depreciation)
on investments during the
period 1,716 39 0
Net realized and unrealized
gain (loss) on investments 797 101 0
Net increase (decrease) in
net assets from operations $ 1,097 $ 365 $ 241
</TABLE>
See accompanying notes to financial statements.
(a) Rounds to less than $1,000.
<Page 21>
Statements of Changes in Net Assets December 31, 1998
(In Thousands)
<TABLE>
<CAPTION>
Small-Cap
Monetta Equity
Fund Fund
1998 1997 1998 1997*
From investment activities:
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $(925) $(396) $(70) $(11)
Net realized gain (loss) on
investments (12,315) 31,669 (655) 140
Net change in net unrealized
appreciation (depreciation)
on investments during the
period (736) 5,097 638 117
Net increase (decrease) in net
assets from operations (13,976) 36,370 (87) 246
Distribution from net
investment income 0 0 0 0
Distribution from short-term
capital gains, net (b) (2,369) (15,860) (30) (99)
Distribution from net realized
gains (3,088) (6,981) 0 0
Increase (decrease) in net
assets from investment
activities (19,433) 13,529 (117) 147
From capital transactions
(Note 3):
Proceeds from shares sold 11,137 13,641 2,479 2,498
Net asset value of shares
issued through dividend
reinvestment 5,350 22,534 29 95
Cost of shares redeemed (35,780) (97,806) (929) (222)
Increase (decrease) in net
assets from capital
transactions (19,293) (61,631) 1,579 2,371
Total increase (decrease)
in net assets (38,726) (48,102) 1,462 2,518
Net assets at beginning
of period 163,415 211,517 2,518 0
Net assets at end of period** $124,689 $163,415 $3,980 $2,518
</TABLE>
See accompanying notes to financial statements.
(a) Rounds to less than $1,000.
(b) Distributions of short-term capital gains are included as ordinary income
for tax purposes.
* For period from 2/1/97 through 12/31/97.
Statements of Changes in Net Assets December 31, 1998
(In Thousands)
<TABLE>
<CAPTION>
Mid-Cap Large-Cap
Equity Equity
Fund Fund
1998 1997 1998 1997
From investment activities:
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $31 $ (56) $(21) $(2)
Net realized gain (loss) on
investments (385) 6,384 (265) 831
Net change in net unrealized
appreciation (depreciation)
on investments during the
period 411 (1,142) 638 (11)
Net increase (decrease) in net
assets from operations 57 5,186 352 818
Distribution from net
investment income (31) (a) 0 0
Distribution from short-term
capital gains, net (b) (741) (1,696) (208) (296)
Distribution from net realized
gains (1,028) (3,032) (62) (275)
Increase (decrease) in net
assets from investment
activities (1,743) 458 82 247
From capital transactions
(Note 3):
Proceeds from shares sold 5,180 5,590 829 2,135
Net asset value of shares
issued through dividend
reinvestment 1,770 4,686 264 559
Cost of shares redeemed (8,195) (6,164) (1,255) (964)
Increase (decrease) in net
assets from capital
transactions (1,245) 4,112 (162) 1,730
Total increase (decrease)
in net assets (2,988) 4,570 (80) 1,977
Net assets at beginning
of period 21,908 17,338 4,265 2,288
Net assets at end of period** $18,920 $21,908 $4,185 $4,265
</TABLE>
See accompanying notes to financial statements.
(a) Rounds to less than $1,000.
(b) Distributions of short-term capital gains are included as ordinary income
for tax purposes.
* For period from 2/1/97 through 12/31/97.
<Page 22>
Statements of Changes in Net Assets December 31, 1998
(In Thousands)
<TABLE>
<CAPTION>
Intermediate
Balanced Bond
Fund Fund
1998 1997 1998 1997
From investment activities:
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $300 $156 $264 $182
Net realized gain (loss) on
investments (919) 1,171 62 18
Net change in net unrealized
appreciation (depreciation)
on investments during the
period 1,716 236 39 70
Net increase (decrease) in net
assets from operations 1,097 1,563 365 270
Distribution from net
investment income (300) (154) (264) (181)
Distribution from short-term
capital gains, net (b) (395) (676) (23) (14)
Distribution from net realized
gains (56) (56) (23) (a)
Increase (decrease) in net
assets from investment
activities 346 677 55 75
From capital transactions
(Note 3):
Proceeds from shares sold 4,715 9,742 3,943 1,371
Net asset value of shares
issued through dividend
reinvestment 404 618 257 170
Cost of shares redeemed (3,030) (1,319) (1,512) (452)
Increase (decrease) in net
assets from capital
transactions (2,089) 9,041 2,688 1,089
Total increase (decrease)
in net assets 2,435 9,718 2,743 1,164
Net assets at beginning
of period 12,054 2,336 3,933 2,769
Net assets at end of period** $14,489 $12,054 $6,676 $3,933
</TABLE>
See accompanying notes to financial statements.
(a) Rounds to less than $1,000.
(b) Distributions of short-term capital gains are included as ordinary income
for tax purposes.
* For period from 2/1/97 through 12/31/97.
**Including undistributed net investment income of $2 thousand for the Balanced
Fund and undistributed net investment income, which rounds to less than $1
thousand, for the Intermediate Bond Fund.
Statements of Changes in Net Assets December 31, 1998
(In Thousands)
<TABLE>
<CAPTION>
Government
Money Market
Fund
1998 1997
From investment activities:
<S> <C> <C>
Operations:
Net investment income (loss) $241 $267
Net realized gain (loss) on
investments 0 0
Net change in net unrealized
appreciation (depreciation)
on investments during the
period 0 0
Net increase (decrease) in net
assets from operations 241 267
Distribution from net
investment income (241) (267)
Distribution from short-term
capital gains, net (b) 0 0
Distribution from net realized
gains 0 0
Increase (decrease) in net
assets from investment
activities 0 0
From capital transactions
(Note 3):
Proceeds from shares sold 5,724 6,338
Net asset value of shares
issued through dividend
reinvestment 233 252
Cost of shares redeemed (6,326) (8,358)
Increase (decrease) in net
assets from capital
transactions (369) (1,768)
Total increase (decrease)
in net assets (369) (1,768)
Net assets at beginning
of period 4,464 6,232
Net assets at end of period** $4,095 $4,464
</TABLE>
See accompanying notes to financial statements.
(a) Rounds to less than $1,000.
(b) Distributions of short-term capital gains are included as ordinary income
for tax purposes.
* For period from 2/1/97 through 12/31/97.
**Including undistributed net investment income of $2 thousand for the Balanced
Fund and undistributed net investment income, which rounds to less than $1
thousand, for the Intermediate Bond Fund.
<Page 23>
Notes To Financial Statements December 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES:
Monetta Fund, Inc. ("Monetta Fund") is an open-end diversified management
investment company registered under the Investment Company Act of 1940, as
amended. The primary objective of Monetta Fund is capital appreciation by
investing primarily in equity securities believed to have growth potential. The
Fund generally invests in companies with a market capitalization range of $50
million to $1 billion.
Monetta Trust ("the Trust") is an open-end diversified management investment
company registered under the Investment Company Act of 1940, as amended. The
following funds are series of the Trust:
Small-Cap Equity Fund. The primary objective of this Fund is capital
appreciation. The Fund typically invests in
companies with a market capitalization of less than $1 billion.
Mid-Cap Equity Fund. The primary objective of this Fund is long-term capital
growth by investing in common stocks believed to have above average growth
potential. The Fund typically invests in companies within a market
capitalization range of $1 billion to $5 billion.
Large-Cap Equity Fund. The primary objective of this Fund is to seek long-term
capital growth by investing in common stocks believed to have above average
growth potential. The Fund typically invests in companies with market
capitalization of greater than $5 billion.
Balanced Fund. The objective of this Fund is to seek a favorable total rate of
return through capital appreciation and current income consistent with
preservation of capital, derived from investing in a portfolio of equity and
fixed income securities.
Intermediate Bond Fund. The objective of this Fund is to seek high current
income consistent with the preservation of
capital by investing primarily in marketable debt securities.
Government Money Market Fund. The primary objective of this Fund is to seek
maximum current income consistent with safety of capital and maintenance of
liquidity. The Fund invests in U.S. Government securities maturing in
thirteen months or less from the date of purchase and repurchase agreements for
U.S. Government securities. U.S. Government securities include securities
issued or guaranteed by the U.S. Government or by its agencies or
instrumentalities.
The Monetta Family of Mutual Funds is comprised of Monetta Fund, Inc. and each
of the Trust Series and is
collectively referred to as the "Funds". The following is a summary of
significant accounting policies followed by the Funds in the preparation of
their financial statements in accordance with generally accepted accounting
principles:
(a) Securities Valuation
Investments are stated at market value based on the last reported sale price on
national securities exchanges, or the NASDAQ Market, on the last business day
of the period. Listed securities and securities traded on the over-the-counter
markets that did not trade on the last business day are valued at the mean
between the
quoted bid and asked prices. Short-term securities, including all securities
held by the Government Money Market Fund, are stated at amortized cost, which
is substantially equivalent to market value.
(b) Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires the Funds' management to make estimates and
assumptions that affect reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the results of
operations during the reporting period. Actual results could differ from those
estimates.
(c) Federal Income Taxes
It is each Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its taxable income to its shareholders. Accordingly, no
provision for federal income taxes is required.
<Page 24>
Notes To Financial Statements December 31, 1998
The Funds intend to utilize provisions of the federal income tax laws which
allow them to carry a realized capital loss forward for eight years following
the year of the loss and offset such losses against any future realized capital
gains. At December 31, 1998, the Funds have accumulated capital loss
carryforwards for tax purposes, which will expire on December 31, 2006, of:
Monetta Fund, Inc., $8,865,094; Monetta Small-Cap Equity Fund, $463,923;
Monetta Mid-Cap Equity Fund, $286,883; Monetta Large-Cap Equity Fund, $262,422;
and Monetta Balanced Fund, $916,270.
Net realized gains or losses differ for financial reporting and tax purposes as
a result of losses from wash sales, post October 31 losses which are not
recognized for tax purposes until the first day of the following fiscal year,
and losses and gains from real estate investment trusts.
(d) General
Security transactions are accounted for on a trade date basis. Daily realized
gains and losses from security transactions are reported on the first-in,
first-out cost basis. Interest income is recorded daily on the accrual basis
and dividend income on the ex-dividend date. Bond Discount/Premium is
amortized on a straight line basis over the life of each applicable security.
(e) Distributions of Incomes and Gains
Distributions to shareholders are recorded by the Funds (except for the
Government Money Market Fund) on the ex-dividend date. The Government Money
Market Fund declares dividends daily and automatically reinvests such dividends
daily. Due to inherent differences in the characterization of short-tern
capital gains under generally accepted accounting principles and for federal
income tax purposes, the amount of distributable net investment income for book
and federal income tax purposes may differ. These differences are permanent in
nature and may result in distributions in excess of book basis net investment
income for certain periods.
Distributions from net realized gains for book purposes may include short-term
capital gains, which are included as ordinary income for tax purposes.
For federal income tax purposes, a net operating loss recognized in the current
year cannot be used to offset future years' net investment income. Therefore,
$924,941, $69,638 and $20,949, of net operating loss generated by Monetta Fund,
Inc., Monetta Small-Cap Equity Fund, and Monetta Large-Cap Equity Fund,
respectively, has been reclassified from accumulated net investment loss to
capital.
For the year ended December 31, 1998, the Funds paid the following long-term
capital gains, Monetta Fund, Inc., $3,088,323; Monetta Mid-Cap Equity Fund,
$1,027,825; Monetta Large-Cap Equity Fund, $62,170; Monetta Balanced Fund,
$55,891; and Monetta Intermediate Bond Fund, $23,163.
2. RELATED PARTIES:
Robert S. Bacarella is an officer and director of the Funds and also an
officer, director and majority shareholder of the investment advisor, Monetta
Financial Services, Inc. "Advisor". For twelve months ended December 31, 1998,
renumerations required to be paid to all interested directors or trustees has
been absorbed by the Advisor. Fees paid to outside Directors or Trustees have
been absorbed by the respective funds.
Each Fund pays an investment advisory fee to the Advisor based on that Fund's
individual net assets, payable monthly at the annual rate of 1.0% for Monetta
Fund; 0.75% for the Small-Cap, Mid-Cap, and Large-Cap Equity Funds; 0.40% for
the Balanced Fund; 0.35% for Intermediate Bond Fund; and 0.25% for the
Government Money Market Fund. From these fees the Advisor pays all the Funds'
ordinary operating expenses other than the advisory fee, distribution charges
(Trust only) and charges of the Funds' custodian and transfer agent.
Investment advisory fees waived for the twelve months ended December 31,1998,
for the Intermediate Bond Fund were $9,430 of total fees of $16,453.
Investment advisory fees waived, 12B-1 fees waived, and expenses paid by the
Advisor through December 31, 1998, for the Government Money Market Fund were
$11,772, $4,714 and $330, respectively. Additionally, brokerage commissions of
$22,650, $800, $16,200, $900 and $4,530, were paid by the Monetta Fund, Small-
Cap Fund, Mid-Cap Fund, Large-Cap Fund, and Balance Fund, respectively to
Monetta Investment Services, L.L.C. during the year ended December 31, 1998.
<Page 25>
Notes To Financial Statements December 31, 1998
Monetta Financial Services, Inc., as of December 31, 1998 owned 60,011 shares
or 9.6% of the Intermediate Bond Fund, 18,092 or 6.1% of the Small-Cap Equity
Fund, 39,573 shares or 4.0% of the Balanced Fund, 7,395 shares or 2.4% of the
Large-Cap Equity Fund. Monetta Financial Services, Inc. owns less than 1% of
the Monetta Fund, the Mid-Cap Equity Fund, and the Government Money Market
Fund.
3. CAPITAL STOCK AND SHARE UNITS:
There are 100,000,000 shares of $0.01 par value capital stock authorized for
the Monetta Fund. There is an unlimited number of no par value shares of
beneficial interest authorized for each series of the Trust.
<TABLE>
<CAPTION>
Small-Cap Mid-Cap Large-Cap
Monetta Equity Equity Equity
(In Thousands) Fund Fund* Fund Fund
<S> <C> <C> <C> <C>
1997 beginning shares 13,352 0 1,170 187
Shares sold 752 190 341 161
Shares issued upon
dividend reinvestment 1,289 7 315 42
Shares redeemed (5,933) (16) (363) (71)
Net increase (decrease)
in shares outstanding (3,892) 181 293 132
1998 beginning shares 9,460 181 1,463 319
Shares sold 702 184 375 63
Shares issued upon
dividend reinvestment 412 2 144 23
Shares redeemed (2,241) (70) (588) (94)
Net increase (decrease)
in shares outstanding (1,127) 96 (69) (8)
Ending shares 8,333 297 1,394 311
</TABLE>
<TABLE>
<CAPTION>
Government
Intermediate Money
Balanced Bond Market
Fund Fund Fund
<S> <C> <C> <C>
1997 beginning shares 185 271 6,232
Shares sold 723 133 6,338
Shares issued upon
dividend reinvestment 43 17 252
Shares redeemed (95) (44) (8,358)
Net increase (decrease)
in shares outstanding 671 106 (1,768)
1998 beginning shares 856 377 4,464
Shares sold 329 369 5,724
Shares issued upon
dividend reinvestment 31 24 233
Shares redeemed (215) (143) (6,326)
Net increase (decrease)
in shares outstanding 145 250 (369)
Ending shares 1,001 627 4,095
</TABLE>
* Inception date February 1, 1997
4. PURCHASES AND SALES OF INVESTMENT SECURITIES:
The cost of purchases and proceeds from sales of securities for the twelve
months ended December 31, 1998, excluding short-term securities were: Monetta
Fund, $142,819,724 and $168,245,024 ; Small-Cap Fund, $7,850,947 and
$6,526,200; Mid-Cap Fund, $42,036,670 and $43,913,944; Large-Cap Fund,
$7,499,377 and $7,800,684; Balanced Fund, $19,287,727 and $17,297,243; and
Intermediate Bond Fund, $4,879,284 and $2,543,936. The cost of purchases and
proceeds from the sales of government securities included in the preceding
numbers were as follows: Balanced Fund, $0 and $2,235,159; and Intermediate
Bond Fund, $778,175 and $556,051.
5. DISTRIBUTION PLAN:
The Trust and its shareholders have adopted a service and distribution plan
(the "Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940.
The Plan permits the participating Funds to pay certain expenses associated
with the distribution of their shares. Annual fees under the Plan of up to
0.25% for the Small-Cap, Mid-Cap, Large-Cap, Balanced, and Intermediate Bond
Funds and up to 0.10% for the Government Money Market Fund are accrued daily.
The distributor is Funds Distributor, Inc.
<Page 26>
Notes To Financial Statements December 31, 1998
6. FINANCIAL HIGHLIGHTS:
Financial highlights for Monetta Fund for a share of capital stock
outstanding throughout the period is presented below:
<TABLE>
<CAPTION>
MONETTA FUND
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net asset value at
beginning of period $17.274 $15.842 $15.591 $14.515 $15.539
Net investment income (loss) (0.104) (0.041) (0.079) 0.029 (0.026)
Net realized and unrealized gain
(loss) on investments (1.554) 4.223 0.330 4.075 (0.938)
Total from investment
operations: (1.658) 4.182 0.251 4.104 (0.964)
Less:
Distributions from net investment
income 0.000 0.000 0.000 (0.028) 0.000
Distributions from short-term capital
gains, net (a) (0.283) (1.910) 0.000 (3.000) (0.060)
Distributions from net realized
gains (0.369) (0.840) 0.000 0.000 0.000
Total distributions (0.652) (2.750) 0.000 (3.028) (0.060)
Net asset value at end of period $14.964 $17.274 $15.842 $15.591 $14.515
Total return (9.03%) 26.18% 1.60% 28.02% (6.21%)
Ratio to average net assets:
Expenses 1.36% 1.48% 1.38% 1.36% 1.35%
Net investment income (0.64%) (0.24%) (0.51%) 0.18% (0.15%)
Portfolio turnover 107.5% 97.8% 204.8% 272.0% 191.3%
Net assets ($ millions) $124.7 $163.4 $211.5 $362.7 $364.9
</TABLE>
(a) Distributions of short-term capital gains are included as ordinary income
for tax purposes.
The per share ratios are calculated using the weighted average number of shares
outstanding during the period, except distributions which are based on shares
outstanding at record date.
<Page 27>
Notes To Financial Statements December 31, 1998
Financial highlights for each Fund of the Trust for a share outstanding
throughout the period are as follows:
<TABLE>
<CAPTION>
Small-Cap
Equity Fund
2/1/97
Through
1998 12/31/97
<S> <C> <C>
Net asset value at beginning of
period $13.900 $10.000
Net investment income (loss) (0.272) (0.148)
Net realized and unrealized
gain (loss) on investments (0.136) 4.878
Total from investment operations (0.408) 4.730
Less:
Distributions from net
investment income 0 0.000
Distributions from short-term
capital gains, net (a) (0.096) (0.830)
Distributions from net
realized gains 0 0.000
Total distributions (0.096) (0.830)
Net asset value at end of period $13.396 $13.900
Total return* (2.81%) 47.17%
Ratios to average net assets:
Expenses* 2.39% 1.75%
Net investment income* (2.04%) (1.13%)
Portfolio turnover 200.4% 138.8%
Net assets ($ thousands) $3,980 $2,518
</TABLE>
(a) Distributions of short-term capital gains are included as ordinary income
for tax purposes.
The per share ratios are calculated using the weighted average number of shares
outstanding during the period, except distributions which are based on shares
outstanding at record date.
Notes To Financial Statements December 31, 1998
<TABLE>
<CAPTION>
Mid-Cap
Equity Fund
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of
period $14.975 $14.814 $11.962 $12.199 $12.537
Net investment income (loss) 0.022 (0.045) 0.044 0.059 0.071
Net realized and unrealized
gain (loss) on investments (0.266) 4.296 2.852 2.874 0.193
Total from investment operations (0.244) 4.251 2.896 2.933 0.264
Less:
Distributions from net
investment income (0.022) 0.000 (0.044) (0.050) (0.069)
Distributions from short-term
capital gains, net (a) (0.477) (1.452) 0.000 (2.990) (0.533)
Distributions from net
realized gains (0.661) (2.638) 0.000 (0.130) 0.000
Total distributions (1.160) (4.090) (0.044) (3.170) (0.602)
Net asset value at end of period $13.571 $14.975 $14.814 $11.962 $12.199
Total return* (0.85%) 29.14% 24.20% 24.54% 2.17%
Ratios to average net assets:
Expenses* 1.21% 1.26% 1.23% 1.25% 1.30%
Net investment income* 0.15% (0.28%) 0.32% 0.44% 0.57%
Portfolio turnover 237.6% 137.8% 93.3% 254.4% 210.0%
Net assets ($ thousands) $18,920 $21,908 $17,338 $14,216 $11,736
</TABLE>
*Ratios and total return for the year of inception are calculated from the date
of inception to the end of the period.
(a) Distributions of short-term capital gains are included as ordinary income
for tax purposes.
The per share ratios are calculated using the weighted average number of shares
outstanding during the period, except distributions that are based on shares
outstanding at record date.
<Page 28>
Notes To Financial Statements December 31, 1998
<TABLE>
<CAPTION>
Large-Cap
Equity Fund
9/1/95
Through
1998 1997 1996 12/31/95
<S> <C> <C> <C> <C>
Net asset value at beginning of
period $13.359 $12.266 $10.571 $10.000
Net investment income (loss) (0.068) (0.007) 0.023 0.005
Net realized and unrealized
gain (loss) on investments 1.074 3.250 2.928 0.570
Total from investment operations 1.006 3.243 2.951 0.575
Less:
Distributions from net
investment income 0.000 0.000 (0.023) (0.004)
Distributions from short-term
capital gains, net (a) (0.714) (1.113) (1.188) 0.000
Distributions from net
realized gains (0.214) (1.037) (0.045) 0.000
Total distributions (0.928) (2.150) (1.256) (0.004)
Net asset value at end of period $13.437 $13.359 $12.266 $10.571
Total return* 8.99% 26.64% 28.20% 5.74%
Ratios to average net assets:
Expenses* 1.86% 1.51% 1.51% 0.69%
Net investment income* (0.52%) (0.05%) 0.31% 0.05%
Portfolio turnover 207.5% 123.2% 152.7% 38.2%
Net assets ($ thousands) $4,185 $4,265 $2,288 $1,072
</TABLE>
(a) Distributions of short-term capital gains are included as ordinary income
for tax purposes.
The per share ratios are calculated using the weighted average number of shares
outstanding during the period, except distributions which are based on shares
outstanding at record date.
Notes To Financial Statements December 31, 1998
<TABLE>
<CAPTION>
Balanced
Fund
9/1/95
Through
1998 1997 1996 12/31/95
<S> <C> <C> <C> <C>
Net asset value at beginning of
period $14.078 $12.643 $10.605 $10.000
Net investment income (loss) 0.290 0.264 0.132 0.009
Net realized and unrealized
gain (loss) on investments 0.838 2.398 2.598 0.602
Total from investment operations 1.128 2.662 2.730 0.611
Less:
Distributions from net
investment income (0.286) (0.224) (0.132) (0.004)
Distributions from short-term
capital gains, net (a) (0.389) (0.927) (0.560) (0.002)
Distributions from net
realized gains (0.055) (0.076) 0.000 0.000
Total distributions (0.730) (1.227) (0.692) (0.006)
Net asset value at end of period $14.476 $14.078 $12.643 $10.605
Total return* 8.59% 21.21% 25.94% 6.16%
Ratios to average net assets:
Expenses* 0.84% 1.02% 1.40% 0.91%
Net investment income* 2.06% 1.88% 1.54% 0.08%
Portfolio turnover 127.7% 115.9% 117.8% 54.8%
Net assets ($ thousands) $14,489 $12,054 $2,336 $410
</TABLE>
(a) Distributions of short-term capital gains are included as ordinary income
for tax purposes.
The per share ratios are calculated using the weighted average number of shares
outstanding during the period, except distributions which are based on shares
outstanding at record date.
<Page 29>
Notes To Financial Statements December 31, 1998
Monetta Trust Continued:
<TABLE>
<CAPTION>
Intermediate Bond Fund
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of
period $10.445 $10.208 $10.244 $9.624 $10.345
Net investment income 0.592 0.599 0.612 0.655 0.589
Net realized and unrealized gain
(loss) on investments 0.269 0.278 0.019 0.740 (.690)
Total from investment operations 0.861 0.877 0.631 1.395 (0.101)
Less:
Distributions from net
investment income (0.577) (0.592) (0.612) (0.655) (0.580)
Distributions from short-term
capital gains, net (a) (0.038) (0.047) (0.055) (0.120) (0.040)
Distributions from net realized
gains (0.039) (0.001) 0.000 0.000 0.000
Total distributions (0.654) (0.640) (0.667) (0.775) (0.620)
Net asset value at end of period $10.652 $10.445 $10.208 $10.244 $9.624
Total return 8.38% 8.91% 6.46% 14.84% (1.04%)
Ratios to average net assets:
Expenses - Net 0.55% 0.65% 0.55% 0.27% 0.28%
Expenses - Gross (b) 0.75% 0.87% 0.85% 0.75% 0.88%
Net investment income-Net 5.59% 5.82% 5.75% 5.94% 5.94%
Net investment income-Gross (b) 5.39% 5.60% 5.45% 5.46% 5.34%
Portfolio turnover 52.0% 96.7% 28.9% 75.1% 94.5%
Net assets ($ thousands) $6,676 $3,933 $2,769 $3,589 $3,010
</TABLE>
(a) Distributions of short-term capital gains are included as ordinary income
for tax purposes.
(b) Ratios of expenses and net income adjusted to reflect investment advisory
fees and charges of the Trust's custodian and transfer agent assumed by the
investment advisor.
The per-share ratios are calculated using the weighted average number of shares
outstanding during the period, except distributions which are based on shares
outstanding at record date.
<Page 30>
Notes To Financial Statements December 31, 1998
<TABLE>
<CAPTION>
Government Money Market Fund
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of
period $1.000 $1.000 $1.000 $1.000 $1.000
Net investment income (0.051) (0.050) (0.049) (0.059) (0.040)
Net realized and unrealized gain
(loss) on investments 0.000 0.000 0.000 0.000 0.000
Total from investment operations
Less:
Distributions from net
investment income 0.051 0.050 0.049 0.059 0.040
Distributions from short-term
capital gains, net (a) 0.000 0.000 0.000 0.000 0.000
Distributions from net realized
gains 0.000 0.000 0.000 0.000 0.000
Total distributions (0.051) (0.050) (0.049) (0.059) (0.040)
Net asset value at end of
period $1.000 $1.000 $1.000 $1.000 $1.000
Total return 5.24% 5.15% 5.06% 5.87% 4.04%
Ratios to average net assets:
Expenses - Net 0.32% 0.39% 0.31% 0.07% 0.0%
Expenses - Gross (b) 0.68% 0.76% 0.67% 0.59% 0.66%
Net investment income-Net 5.11% 5.02% 4.95% 5.69% 4.04%
Net investment income-Gross (b) 4.76% 4.65% 4.59% 5.17% 3.39%
Portfolio turnover N/A N/A N/A N/A N/A
Net assets ($ thousands) $4,095 $4,464 $6,232 $4,393 $3,315
</TABLE>
(a) Distributions of short-term capital gains are included as ordinary income
for tax purposes.
(b) Ratios of expenses and net income adjusted to reflect investment advisory
fees and charges of the Trust's custodian and transfer agent assumed by the
investment advisor.
The per-share ratios are calculated using the weighted average number of shares
outstanding during the period, except distributions which are based on shares
outstanding at record date.
<Page 31>
