As filed with the Securities and Exchange Commission on April 25, 2000
Securities Act registration no. 33-54822
Investment Company Act file no. 811-7360
- ---------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
____________________________
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Post-effective amendment no. 14 [X]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment no. 15 [X]
____________________________
MONETTA TRUST
(Registrant)
776-A South Naperville Road, Suite 100
Wheaton, Illinois 60187-8133
Telephone number: 630/462-9800
____________________________
Robert S. Bacarella Diane M. Bono
Monetta Trust Sonnenschein Nath & Rosenthal
1776-A South Naperville Road, #100 8000 Sears Tower
Wheaton, Illinois 60187-8133 Chicago, Illinois 60606
(Agents for service)
____________________________
Amending Parts A, B, and C and filing Exhibits.
It is proposed that this filing will become effective:
X immediately upon filing pursuant to rule 485(b)
____
___ on _______________ pursuant to rule 485(b)
___ 60 days after filing pursuant to rule 485(a)(1)
____ on _______________ pursuant to rule 485(a)(1)
____ 75 days after filing pursuant to rule 485(a)(2)
____ on _________________ pursuant to rule 485(a)(2)
If appropriate, check the following box:
____ This post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
<PAGE>
[Insert Monetta's Logo]
Prospectus April 25, 2000
Monetta Fund
Monetta Trust
Small-Cap Equity Fund
Mid-Cap Equity Fund
Large-Cap Equity Fund
Balanced Fund
Intermediate Bond Fund
Government Money Market Fund
1-800-MONETTA
www.monetta.com
The Securities and Exchange Commission has not approved or disapproved of
these securities, or determined if this Prospectus is accurate or complete.
Any representation to the contrary is a criminal offense.
Table of Contents
Summary of the Funds 2
Fund's Goals 2
Fund's Main Investment Strategies 2
Principal Risks of Investing In The Funds 3
Performance 4
Fees and Expenses 8
Investment Objectives And Strategies 9
Investment Risks & Considerations 12
Investment Restrictions 15
Management 15
Other Information 16
Shareholder Manual 19
Financial Highlights 33
<Page 1>
FUND SUMMARY
The Monetta Small-Cap Equity Fund, ("Small-Cap Fund"), Monetta Mid-Cap Equity
Fund ("Mid-Cap Fund"), Monetta Large-Cap Equity Fund ("Large-Cap Fund"),
Monetta Balanced Fund ("Balanced Fund"), Monetta Intermediate Bond Fund
("Intermediate Bond Fund"), and Monetta Government Money Market Fund
("Government Money Market Fund") are series of Monetta Trust
(the "Trust"). Monetta Fund, Inc., ("Monetta Fund") and each of the Trust
series are collectively referred to as the "Funds."
Growth Funds, which include Monetta Fund, Small-Cap Fund, Mid-Cap Fund and
Large-Cap Fund are designed for long-term investors who seek growth of capital
and who can tolerate the volatility and risks associated with common
stock investments. In selecting investments, emphasis is placed on stocks
with improving earnings per share growth, a history of growth and sound
management, and a strong balance sheet. A "bottom up" approach is used in
choosing investments. That is to say, they look for companies with earnings
growth potential one at a time. Subject to market conditions, the Monetta
Fund invests at least 70% of the Fund's assets in equity securities. All
other growth funds invest at least 65% of its total assets in common
stocks of its respective market capitalizations.
Fixed-Income Funds, which include Intermediate Bond Fund and
Government Money Market Fund, are designed for long-term investors who
primarily seek current income associated with debt securities. The Portfolio
Managers consider economic factors such as the effect of interest rates
on the Fund's investments and then applies a "bottom up" approach in
choosing investments. The Manager looks for income-producing securities
that meet the investment criteria, taking into account the effect the
investments would have on total return, credit risk and average maturity of
the portfolio.
Balanced Fund is designed for investors who seek both growth of capital as well
as current income. The investment composite, growth stocks versus fixed
income securities will fluctuate based on economic and market conditions.
Fund Fund's goals Fund's main investment
strategies
Monetta Fund Each Fund seeks long-term Invests in common stocks
Small-Cap Fund capital growth. believed to have above-average
Mid-Cap Fund growth potential. The Funds
Large-Cap Fund Monetta Fund also has differ from each other with
income as a secondary respect to the following market
objective capitalization of companies in
which they invest;
Monetta - $50Million - $1Billion
Small-Cap - Under $1Billion
Mid-Cap - $1Billion - $5Billion
Large-Cap - $5Billion and over
Balanced Fund Seeks a favorable total Invests in fixed income and
rate of return through equity securities. The market,
capital appreciation and financial and economic
current income consistent conditions are factors in
with preservation of determining the asset
capital. allocation mix.
Intermediate Seeks high current income Invests primarily in marketable
Bond Fund consistent with debt securities. At least 70%
preservation of capital. of total assets must be
invested in securities rated in
the three highest investment
grade categories by Moody's or
S&P with an average maturity
between 3 and 10 years.
Government Seeks maximum current income Invests in securities issued or
Money Market with safety of capital and guaranteed by the
Fund maintenance of liquidity. U.S. Government or its agencies
maturing in less than thirteen
months.
<Page 2>
FUND RISK
Fund Principal Risks Of Investing In The Funds
No investment is suitable for everyone. The risks
inherent in each Fund depends primarily upon the
types of securities in the Fund's portfolio, as
well as on market conditions. There is no
guarantee that a Fund will achieve its objective.
Monetta Fund The principle risk of investing in the growth funds
Small-Cap Fund is that returns may vary and you could lose money.
Mid-Cap Fund The value of a growth fund's portfolio could
Large-Cap Fund decrease if the stock market goes down or if the
value of an individual stock in the portfolio
decreases. If the value of the fund's portfolio
decreases, the funds net asset value (NAV) would
also decrease, which means, if you sold your
shares, you would receive less money. Common stocks
tend to be more volatile than othr investment choices.
Balanced Fund The equity portion and the fixed income of the
portfolio may vary and you could lose money.
In addition, the allocation mix of the Fund
(equities versus fixed income) as well as the
allocation between the various market
capitalizations, could negatively impact the Funds
performance.
Intermediate This Fixed-Income Fund tends to be less volatile
Bond Fund than the growth funds that invest primarily in
common stocks. The Fund's returns and yields will
vary, and you could lose money. Since the Fund
invests in a variety of fixed-income securities, a
fundamental risk is that the value of these
securities will fall, if interest rates rise, which
will cause the Fund's net asset value (NAV) to also
decline. In addition, there is credit risk
associated with the securities that the Fund
invests in, if an issuer is unable to make
principal and interest payments when due.
Government Although the Fund invests in securities issued by
Money Market the U.S. Government, its agencies or
Fund instrumentalities, not all such securities are
backed by the full faith and credit guarantee of
the U.S. Government. Your investment in the 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 lose money by investing in the Fund.
<Page 3>
PERFORMANCE
The following information illustrates how each of the Fund's performance has
varied over time and the risk associated with investing in the Fund. The
bar charts depict the change in performance from year-to-year during the
period indicated. The tables compare each Fund's average annual returns
for the periods indicated to a broad-based securities market index.
The Funds' past performance does not necessarily indicate how they will
perform in the future.
MONETTA FUND
[GRAPH DEPICTING 10 YEAR ANNUAL TOTAL RETURNS FOR MONETTA FUND.]
[CAPTION]
<TABLE>
Annual returns for periods ended 12/31
<S> <C>
1990 11.37%
1991 55.90%
1992 5.49%
1993 0.49%
1994 -6.21%
1995 28.02%
1996 1.60%
1997 26.18%
1998 -9.03%
1999 51.80%
</TABLE>
Best Quarter: 4th 1999, 47.7%; Worst Quarter: 3rd 1998, (23.5)%
<TABLE>
<CAPTION>
Average Annual Total Returns
1 Year 5 Years 10 Years
<S> <C> <C> <C>
Monetta Fund 51.80% 17.77% 14.61%
Russell 2000 Index* 21.26% 16.69% 13.40%
</TABLE>
*The Russell 2000 Index is an index that measures the performance of the 2,000
smallest companies in the Russell 3,000 Index with an average market
capitalization of approximately $421 million..
SMALL-CAP FUND
[GRAPH DEPICTING 2 YEAR ANNUAL TOTAL RETURNS FOR MONETTA SMALL-CAP FUND.]
<TABLE>
<CAPTION>
Annual returns for periods ended 12/31
<S> <C>
1998 -2.81%
1999 62.91%
</TABLE>
Best Quarter: 4th 1999,44.9%; Worst Quarter: 3rd 1998, (20.1)%
<TABLE>
<CAPTION>
Average Annual Total Returns
Since Inception
1 Year 2/1/97
<S> <C> <C>
Monetta Small-Cap
Fund 62.91% 33.74%
Russell 2000 Index* 21.26% 12.72%
</TABLE>
*The Russell 2000 Index is an index that measures the performance of the 2,000
smallest companies in the Russell 3,000 Index with an average market
capitalization of approximately $421 million.
<Page 4>
MID-CAP FUND
[GRAPH DEPICTING 6 YEAR ANNUAL TOTAL RETURNS FOR MONETTA MID-CAP FUND.]
<TABLE>
<CAPTION>
Annual returns for periods ended 12/31
<S> <C>
1994 2.17%
1995 24.54%
1996 24.20%
1997 29.14%
1998 -0.85%
1999 53.39%
</TABLE>
Best Quarter: 4th 1999, 44.6%; Worst Quarter: 3rd 1998, (21.9)%
<TABLE>
<CAPTION>
Average Annual Total Returns
Since Inception
1 Year 5 Years 3/1/93
<S> <C> <C> <C>
Monetta Mid-Cap
Fund 53.39% 24.87% 23.37%
S&P Mid-Cap 400
Index* 13.35% 21.28% 16.14%
</TABLE>
*The S&P Mid-Cap 400 Index is an unmanaged group of 400 domestic stocks chosen
for their market size, liquidity and industry group representation.
LARGE-CAP FUND
[GRAPH DEPICTING 4 YEAR ANNUAL TOTAL RETURNS FOR MONETTA LARGE-CAP FUND.]
<TABLE>
<CAPTION>
Annual returns for periods ended 12/31
<S> <C>
1996 28.20%
1997 26.64%
1998 8.99%
1999 53.98%
</TABLE>
Best Quarter: 4th 1998, 32.1%; Worst Quarter: 3rd 1998, (21.3)%
<TABLE>
<CAPTION>
Average Annual Total Returns
Since Inception
1 Year 9/1/95
<S> <C> <C>
Monetta Large-Cap Fund 53.98% 27.63%
S&P 500 Index* 21.03% 27.02%
</TABLE>
*The S&P 500 Index is the Standard & Poor's Index of 500 Stocks, a widely
recognized, unmanaged index of common stock prices.
<Page 5>
BALANCE FUND
[GRAPH DEPICTING 4 YEAR ANNUAL TOTAL RETURNS FOR MONETTA BALANCED FUND]
<TABLE>
<CAPTION>
Annual returns for periods ended 12/31
<S> <C>
1996 25.94%
1997 21.21%
1998 8.59%
1999 29.60%
</TABLE>
Best Quarter: 4th 1999, 17.9%; Worst Quarter: 3rd 1998, (11.3)%
<TABLE>
<CAPTION>
Average Annual Total Returns
Since Inception
1 Year 9/1/95
<S> <C> <C>
Monetta Balanced
Fund 29.60% 20.94%
S&P 500 Index* 21.03% 27.02%
Lehman Bros. Gov't/Corp.
Bond Index** -2.15% 5.84%
</TABLE>
*The S&P 500 Index is the Standards & Poor's Index of 500 Stocks, a widely
recognized, unmanaged index of common stock prices.
**The Lehman Bros. Gov't/Corp. Bond Index is composed of all bonds that are of
investment grade with at least one year until maturity.
INTERMEDIATE BOND FUND
[GRAPH DEPICTING 6 YEAR ANNUAL TOTAL RETURNS FOR MONETTA INTERMEDIATE FUND]
<TABLE>
<CAPTION>
Annual returns for periods ended 12/31
<S> <C>
1994 -1.04%
1995 14.84%
1996 6.46%
1997 8.91%
1998 8.38%
1999 1.60%
</TABLE>
Best Quarter: 2nd 1995, 5.29%; Worst Quarter: 3rd 1994, (2.14)%
<TABLE>
<CAPTION>
Average Annual Total Returns
Since Inception
1 Year 5 Years 3/1/93
<S> <C> <C> <C>
Monetta Intermediate
Bond Fund 1.60% 7.95% 6.81%
Lehman Gov't/Corp.
Interm. Bond Index* 0.39% 7.10% 5.60%
</TABLE>
*The Lehman Gov't/Corp. Intermediate Bond Index is an unmanaged index of all
bonds covered by the Lehman Brothers Government Bond Index with maturities
between one and 9.9 years.
<Page 6>
GOVERNMENT MONEY MARKET FUND
[GRAPH DEPICTING 6 YEAR ANNUAL RETURNS FOR MONETTA GOVERNMENT MONEY
MARKET FUND]
<TABLE>
<CAPTION>
Annual returns for periods ended 12/31
<S> <C>
1994 4.04%
1995 5.87%
1996 5.06%
1997 5.15%
1998 5.24%
1999 4.85%
</TABLE>
Best Quarter: 2nd 1995, 1.50% Worst Quarter: 2nd 1993, 0.13%
<TABLE>
<CAPTION>
Average Annual Total Return
Since Inception
1 Year 5 Years 3/1/93
<S> <C> <C> <C>
Monetta Government 4.85% 5.23% 4.75%
Money Market Fund
</TABLE>
<Page 7>
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and
hold shares of the Funds.
<TABLE>
<CAPTION>
Shareholder Fees (fees paid directly from your investment) are NONE.*
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
Distribution Total Annual
Management and Services Other Fund Operating
Fees (12b-1)Fees Expenses Expenses
<S> <C> <C> <C> <C>
Monetta Fund 1.00% N/A 0.45% 1.45%
Small-Cap Fund 0.75% 0.25% 1.36% 2.36%
Mid-Cap Fund 0.75% 0.25% 0.25% 1.25%
Large-Cap Fund 0.75% 0.25% 0.66% 1.66%
Balanced Fund 0.40% 0.25% 0.30% 0.95%
Intermediate Bond Fund 0.35%(a) 0.25% 0.14% 0.74%(a)
Gov't. Money Market Fund 0.25%(a) 0.10%(a) 0.35%(a) 0.70%(a)
</TABLE>
(a)In 1999, the advisor voluntarily waived part of the management fee for
the Intermediate Bond Fund and all of the management fee for the
Government Money Market Fund. As a result actual total annual fund
operating expenses were 0.54% and 0.35% respectively. For the
Government Money Market Fund, the Board of Trustees elected to waive
the Distribution and Service (12b-1) Fees.
As of the date of the Prospectus, the waiver of management fees for the
Intermediate Bond Fund and Government Money Market Fund continues in effect,
subject to review and possible termination by the Advisor at the beginning of
each quarter.
*If you request payment of redemption proceeds by wire, you must pay the cost
of the wire (currently $12.00). For telephone exchanges, a $5.00 fee will be
charged to your account by the transfer agent.
Example
This example is intended to help you compare the cost of investing in the
Funds with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year, that you
reinvest your dividends and distributions, and that the Fund's operating
expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions, your costs would be:
<TABLE>
<CAPTION>
One Three Five Ten
Year Years Years Years
<S> <C> <C> <C> <C>
Monetta Fund, Inc. $152 $473 $816 $1,784
Monetta Small Cap Equity Fund 248 762 1,303 2,779
Monetta Mid-Cap Equity Fund 131 408 706 1,553
Monetta Large-Cap Equity Fund 174 540 930 2,022
Monetta Balanced Fund 100 311 540 1,198
Monetta Intermediate Bond Fund 78 243 423 943
Monetta Government Money Market Fund 74 230 400 893
</TABLE>
<Page 8>
INVESTMENT OBJECTIVES AND STRATEGIES
The Funds' investment objectives differ principally in the types of securities
selected for investment and the importance each Fund places on growth
potential, current income, and preservation of capital as considerations in
selecting investments.
* Monetta Fund, Small-Cap Fund, Mid-Cap Fund, and Large-Cap Fund
The Monetta Fund, Small-Cap Fund, Mid-Cap Fund, and Large-Cap Fund each seeks
long-term capital growth by investing in common stocks believed to have above-
average growth potential. The Funds differ from each other with respect to
the market capitalizations of the companies in which they invest. As a
secondary ojective, Monetta Fund places emphasis on current income, the other
Funds do not.
Each Fund's investment approach emphasizes a competitive return in rising
markets and preservation of capital in declining markets in an attempt to
generate long-term capital growth over a complete business cycle
(approximately 3 to 5 years) when compared to the broader stock market
indices. The Advisor's emphasis is on common stocks with improving earnings
per share growth, a history of growth and sound management, and a strong
balance sheet. The Advisor may invest up to 20% of Monetta Fund's assets and
25% of the assets of the Small-Cap Fund, Mid-Cap Fund, and Large-Cap Fund's
assets in securities not meeting the above criteria. No Fund intends to
invest more than 5% of its assets in derivative securities (options and
futures).
The securities in which each Fund invests will be listed on a national
securities exchange or traded on an over-the-counter market.
In its investments in equity securities, the Monetta Fund, Small-Cap Fund,
Mid-Cap Fund, Large-Cap Fund, and Balanced Fund (in its investments in equity
securities, as discussed below) each pursue a selling discipline to preserve
capital gains and limit losses. Although a 12-month price objective is
established for a security, the security will not be sold purely on price
appreciation or decline. A security will normally be sold if it becomes less
attractive compared to a new stock idea, or company fundamentals deteriorate
with little perceived prospect for improvement within a reasonable time frame.
The actual timing of the sale of a security may be affected by liquidity
constraints or other factors affecting the market for that security. This
selling discipline may result in higher than average portfolio turnover.
The Monetta Fund's primary investment objective is to provide its Shareholders
with capital appreciation by investing at least 70% of the Fund's assets in
equity securities (common stocks) believed to have growth potential. A
secondary objective of the Fund is to provide its Shareholders with income, in
part by investing the balance of the Fund's assets in dividend paying equity
securities or in long-term (greater than one year) debt securities. The
Fund's investments in long-term debt securities will consist of U. S. Treasury
Notes and Treasury Bonds of various maturities and investment grade securities
rated at least A or better by either Moody's Investor Services, Inc.
("Moody's") or Standard and Poor's Corporation ("S&P"). A complete
description of the ratings is contained in an appendix to the Statement of
Additional Information.
The Monetta Fund generally invests in smaller companies with aggregate market
capitalizations ranging from $50 million to $1 billion.
The Small-Cap Fund typically invests in smaller companies with market
capitalization of less than $1 billion. Under normal market conditions, the
Fund invests at least 65% of its total assets in common stocks of small-cap
companies.
<Page 9>
The Mid-Cap Fund typically invests in medium-sized companies with market
capitalizations of $1 billion to $5 billion. Under normal market conditions,
the Fund invests at least 65% of its total assets in common stocks of mid-cap
companies.
The Large-Cap Fund typically invests in large companies with market
capitalizations in excess of $5 billion. Under normal market conditions, the
Fund invests 65% of its total assets in common stocks of large-cap companies.
* Balanced Fund
The Balanced Fund seeks 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
such as Corporate Bonds and U.S. Government Obligations.
The investment approach for the Balanced Fund combines the equity growth
strategy (various market capitalizations) used for the Monetta Fund, Small-Cap
Fund, Mid-Cap Fund, and Large-Cap Fund and the income strategy employed by the
Intermediate Bond Fund, as discussed below.
The Balanced Fund may emphasize fixed income securities or equity securities
or hold equal amounts of both, depending upon the Advisor's analysis of
market, financial, and economic conditions. Under normal circumstances, the
Fund invests at least 80% of its total assets in fixed income and equity
securities. At least 25% of the Fund's assets invested in fixed income
securities will consist of corporate bonds and debentures rated A or better,
with an average maturity of 3 to 10 years and securities issued or
guaranteed as to principal and interest by the U. S. Government and its
agencies and instrumentalities. The Fund does not presently intend to
invest more than 10% of its assets in securities rated below investment
grade (commonly called "junk bonds") or, if unrated, determined by the
Advisor to be of comparable credit quality.
* Intermediate Bond Fund
The Intermediate Bond Fund seeks a high level of current income, consistent
with the preservation of capital, by investing primarily in marketable debt
securities.
Under normal market conditions, the Intermediate Bond Fund invests at least
70% of the value of its total assets (taken at market value at the time of
investment) in the following:
(1) Marketable straight-debt securities of domestic issuers and of foreign
issuers payable in U. S. dollars, rated at the time of purchase within the
three highest grades assigned by Moody's or by S&P;
(2) Securities issued or guaranteed by the full faith and credit of the U. S.
Government or by its agencies or instrumentalities;
(3) Commercial paper rated Prime-1 by Moody's or A-1 by S&P at time of
purchase or, if unrated, issued or guaranteed by a corporation with any
outstanding debt rated A or better by Moody's or by S&P;
(4) Variable rate demand notes, if unrated, determined by the Advisor to be
of credit quality comparable to the commercial paper in which the Fund may
invest; or
<Page 10>
(5) Bank obligations, including repurchase agreements,* of banks having total
assets in excess of $500 million.
Under normal market conditions, the Fund invests at least 65% of its total
assets in bonds and debentures and at least 75% of its assets in securities
with an average life of less than 15 years, and expects that the dollar-
weighted average life of its portfolio will be between 3 and 10 years.
The Fund also may invest in other debt securities (including those convertible
into or carrying warrants to purchase common stocks or other equity interests
and privately placed debt securities), preferred stocks, and marketable common
stocks that the Advisor considers likely to yield relatively high income in
relation to cost. Equity securities acquired by conversion or exercise of a
warrant will be sold by the fund as soon as possible. The Bond Fund will not
invest more than 20% of its assets in debt securities rated below investment
grade or, if unrated, determined by the Advisor to be of comparable credit
quality.
Government Money Market Fund
The Government Money Market Fund seeks 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 in which the Fund is permitted to invest include:
(1) Securities issued by the U. S. Treasury such as bills, notes, bonds and
other debt securities;
(2) Securities issued or guaranteed as to principal and interest by agencies
or instrumentalities of the U. S. Government that are backed by the full
faith and credit guarantee of the U. S. Government;
(3) Securities issued or guaranteed as to principal and interest by agencies
or instrumentalities of the U. S. Government that are not backed by the
full faith and credit guarantee of the U. S. Government; and
(4) Repurchase agreements for securities listed in (1), (2), and (3) above,
regardless of the maturities of such underlying securities.
The Fund is a money market fund and follows procedures, described in the
Statement of Additional Information, designed to stabilize its net asset value
per share at $1.00. In order to help maintain the stable $1.00 net asset
value, the average days to maturity of the securities can not be greater than
90 days.
*A repurchase agreement is a sale of securities to a Fund in which the seller
(a bank or broker-dealer believed by the Advisor to be financially sound)
agrees to repurchase the securities at a higher price, which includes an
amount representing interest on the purchase price, within a specified time.
<Page 11>
INVESTMENT RISKS & CONSIDERATIONS
Investment Risks
All investments, including those in mutual funds, have risks. No investment
is suitable for all investors. The risks inherent in each Fund depends
primarily upon the types of securities in the Fund's portfolio, as well as on
market conditions. There is no guarantee that a Fund will achieve its
objective. There is a risk that you could lose all or a portion of your
investment in a Fund as a result of a steep, sudden and/or prolonged
market decline.
The Monetta Fund, Small-Cap Fund, Mid-Cap Fund, and Large-Cap Fund are
designed for long-term investors who can accept the fluctuations in portfolio
value and other risks associated with seeking capital growth through
investment in common stocks.
The Balanced Fund is appropriate for long-term investors who can accept asset
value fluctuations from interest rate changes and credit risks associated with
fixed income investments and other risks associated with investments in common
stocks.
The Intermediate Bond Fund is appropriate for investors who seek high income
with less net asset value fluctuation (from interest rate changes) than that
of a longer-term fund. However, the Fund has more net asset value fluctuation
than with a shorter-term fund. The Fund is appropriate for investors who can
accept the credit and others risks associated with securities (up to 20%) that
are rated below investment grade. A longer-term bond fund will usually
provide a higher yield than an intermediate term fund like the Intermediate
Bond Fund; conversely, an intermediate-term fund usually has less net asset
value fluctuation, although there can be no guarantee that this will be the
case.
The Government Money Market Fund is designed for investors who seek income
with minimum risk (including the risk of principal loss) other than the risk
of changes in yield caused by fluctuation in prevailing levels of interest
rates. Because the Government Money Market Fund's investment policy permits
it to invest in U. S. Government Securities that are not backed by the full
faith and credit of the U. S. Government, investment in that Fund may involve
risks that are different in some respects from an investment in a fund that
invests only in securities that are backed by the full faith and credit of the
U. S. Government. Such risks may include a greater risk of loss of principal
and interest on the securities in the Fund's portfolio that are supported only
by the issuing or guaranteeing U. S. Government agency or instrumentality
since the Fund must look principally or solely to that entity for ultimate
repayment. There can be no guarantee that the Government Money Market Fund
will be able at all times to maintain its net asset value per share at $1.00.
Investment Considerations
Equity Securities. Common stocks represent an equity interest in a
corporation. Although common stocks have a history of long-term growth in
value, their prices tend to fluctuate in the short term and there is no
guarantee ofcontinued long-term growth. The securities of smaller
companies, as a class, have had periods of favorable results and other
periods of less favorable results compared to the securities of larger
companies as a class. Stocks of small- to mid-size companies tend to be more
volatile and less liquid than stocks of large companies. Smaller companies,
as compared to larger companies, may have a shorter history of operations, may
not have as great an ability to raise additional capital, may have a less
diversified product line making them susceptible to market pressure, and may
have a smaller public market for their shares.
<Page 12>
Debt Securities. Bonds and other debt instruments are methods for an issuer
to borrow money from investors. Debt securities have varying levels of
sensitivity to interest rate changes and varying degrees of quality. A
decline in prevailing levels of interest rates generally increases the value
of debt securities, while an increase in rates usually reduces the value of
those securities. As a result, interest rate fluctuations will affect a
Fund's net asset value, but not the income received by a Fund from its
portfolio securities. (Because yields on debt securities available for
purchase by a Fund vary over time, no specific yield on shares of a Fund can
be assured.) In addition, if the bonds in a Fund's portfolio contain call,
prepayment, or redemption provisions, during a period of declining interest
rates, these securities are likely to be redeemed, and the Fund will probably
be unable to replace them with securities having a comparable yield. There
can be no assurance that payments of interest and principal on portfolio
securities will be made when due. Bonds and bond funds are also exposed to
credit risks, which is the possibility that the issuer will default on its
obligation to pay interest and/or principal.
"Investment grade" debt securities are those rated within the four highest
ratings categories of Moody's or S&P or, if unrated, determined by the Advisor
to be of comparable quality. Bonds rated Baa or BBB have speculative
characteristics and changes in economic conditions or other circumstances are
more likely to lead to a weakened capacity of their issuers to make principal
and interest payments than is the case with higher grade bonds. Lower-rated
debt securities (commonly called "junk bonds"), on balance, are considered
predominantly speculative with respect to the issuer's capacity to pay
interest and repay principal according to the terms of the obligation and,
therefore, carry greater investment risk, including the possibility of issuer
default and bankruptcy; they are likely to be less marketable and more
adversely affected by economic downturns than higher-quality debt securities.
Convertible debt securities are frequently unrated or, if rated, are below
investment grade. For more information, see discussion of debt securities in
the Fund's Statement of Additional Information.
Short-Term Investment. The Funds (other than the Government Money Market
Fund) may make short-term investments without limitation in periods when the
Advisor determines that a temporary defensive position is warranted. Such
investments may be in U. S. Government Securities of the type in which the
Government Money Market Fund may invest; certificates of deposit, bankers'
acceptances, and other obligations of domestic banks having total assets of at
least $500 million and which are regulated by the U. S. Government, its
agencies or instrumentalities; commercial paper rated in the highest category
by a recognized rating agency; and demand notes comparable in quality, in the
Advisor's judgment, to commercial paper rated in the highest category.
Loans of Portfolio Securities. Subject to certain restrictions, the Balanced
Fund and Intermediate Bond Fund may lend their portfolio securities to broker-
dealers and banks. Any such loan must be continuously secured by collateral
in cash or cash equivalents maintained on a current basis in an amount at
least equal to the market value of the securities loaned by the Fund. The
Fund would continue to receive the equivalent of the interest or dividends
paid by the issuer on the securities loaned and would also receive an
additional return that may be in the form of a fixed fee or a percentage of
the collateral. The Fund would have the right to call the loan and obtain the
securities loaned at any time on notice of not more than five business days.
In the event of bankruptcy or other default of the borrower, the Fund could
experience both delays in liquidating the loan collateral or recovering the
loaned securities and losses including (a) possible decline in the value of
the collateral or in the value of the securities loaned during the period
while the Fund seeks to enforce its rights thereto; (b) possible subnormal
levels of income and lack of access to income during this period; and (c)
expenses of enforcing its rights.
<Page 13>
When-Issued and Delayed-Delivery Securities. The Balanced Fund, Intermediate
Bond Fund, and Government Money Market Fund may invest in securities purchased
on a when-issued or delayed-delivery basis. Although the payment and interest
terms of these securities are established at the time the purchaser enters
into the commitment, the securities may be delivered and paid for a month or
more after the date of purchase, when their value may have changed. A Fund
makes such commitments only with the intention of actually acquiring the
securities, but may sell the securities before settlement date if the Advisor
deems it advisable for investment reasons. The Government Money Market Fund
may purchase securities on a standby commitment basis, which is a delayed-
delivery agreement in which the Fund binds itself to accept delivery of a
security at the option of the other party to the agreement. When a Fund
commits to purchase securities on a when-issued or delayed-delivery basis, the
Fund segregates assets to secure its ability to perform and to avoid the
creation of leverage.
Repurchase Agreements. The Balanced Fund, Intermediate Bond Fund, and
Government Money Market Fund may enter into repurchase agreements. In the
event of a bankruptcy or other default of a seller of a repurchase agreement,
a Fund could experience both delays in liquidating the underlying securities
and losses, including: (a) possible decline in the value of the collateral
during the period while the Fund seeks to enforce its rights thereto; (b)
possible subnormal levels of income and lack of access to income during this
period; and (c) expenses of enforcing its rights.
Options and Futures. Consistent with their objectives, the Balanced Fund and
Intermediate Bond Fund may each purchase and write both call options and put
options on securities and on indexes and enter into interest rate and index
futures contracts and options on such futures contracts (such put and call
options, futures contracts, and options on futures contracts are referred to
as "derivative products") in order to provide additional revenue or to hedge
against changes in security prices or interest rates. The Fund may write a
call or put option only if the option is covered. The Fund will limit its use
of futures contracts and options on futures contracts to hedging transactions
to the extent required to do so by regulatory agencies. There are several
risks associated with the use of derivative products. As the writer of a
covered call option, the Fund foregoes, during the option's life, the
opportunity to profit from increases in market value of the security covering
the call option. Because of low margin deposits required, the use of futures
contracts involves a high degree of leverage and may result in losses in
excess of the amount of the margin deposit. Since there can be no assurance
that a liquid market will exist when the Fund seeks to close out a derivative
product position, these risks may become magnified. Because of these and
other risks, successful use of derivative products depends on the Advisor's
ability to correctly predict changes in the level and the direction of stock
prices, interest rates, and other market factors; but even a well-conceived
transaction may be unsuccessful because of an imperfect correlation between
the securities and derivative product markets. When either the Balanced Fund
or Intermediate Bond Fund enter into a futures contract, it segregates assets
to secure its ability to perform and to avoid the creation of leverage. For
additional information, please refer to the Fund's Statement of Additional
Information.
Portfolio Turnover.The Monetta Fund and Small-Cap Fund normally execute an
above average amount of equity trading. Their annual portfolio turnover rates
exceed 100%, and in some years may exceed 200%*. The Mid-Cap Fund, Large-Cap
Fund, and Balanced Fund also have above average trading activity which results
in the turnover rate to normally range between 100% to 200%. This increases
brokerage commission expenses for the fund. To the extent that the trading
results in a net realized gains, the shareholder will be taxed on the
distributions.
*A portfolio turnover rate of 200% is equivalent to the Fund buying and
selling all of the securities in its portfolio twice in the course of a year.
<PAGE 14>
INVESTMENT RESTRICTIONS
The Funds' investment restrictions, are detailed in the Statement of
Additional Information. Investment objectives cannot be changed without
shareholder approval.
MANAGEMENT
Management Of The Funds
The Board of Directors of the Fund, the Trustees of the Trust, Investment
Advisor and the Funds management and administrative teams are instrumental in
the management of the Funds.
Board of Directors
The Board of Directors of Monetta Fund and the Board of Trustees of the Trust
oversees the management of the Funds and meets at least quarterly to review
reports about fund operations. Although the Directors and Trustee do not
manage the Funds, it has hired the Investment Advisor to do so.
At the recommendation of the Advisor, the Board approves the transfer agent,
custodial bank and Distributor on an annual basis.
At least 40% of the Directors and Trustees are independent of the Funds'
Investment Advisor.
Investment Advisor
The investment advisor is Monetta Financial Services, Incorporated. Subject
to the overall authority of the respective Boards, the Advisor manages the
business and investments of the Funds under investment advisory agreements.
The Advisor is controlled by Robert S. Bacarella, the President and Founder of
the Funds. The Advisor's address is 1776-A S. Naperville Road, Suite 100,
Wheaton, IL 60187.
The Advisor receives a monthly fee from each Fund based on that Fund's average
net assets, computed and accrued daily. The annual management fee rate paid
to the Advisor by each Fund is: Monetta Fund 1.00%; Small-Cap Fund, Mid-Cap
Fund and Large-Cap Fund 0.75%; Balanced Fund 0.40%; Intermediate Bond Fund
0.35% and Government Money Market Fund 0.25%. Out of that fee, the Advisor
pays for all the expenses to manage and operate the Fund except for transfer
agent, custodial, brokerage expenses and fees and expenses of the independent
Directors and Trustees. Legal counsel fees for the independent Directors are
reviewed by the Board to determine if the expense is to be borne by the Funds
or the Advisor. All such legal expenses incurred through December 31, 1999
were absorbed by the Advisor.
Investment Team
The Advisor manages each of the Funds through the use of co-managers. Mr.
Robert S. Bacarella, Mr. Timothy Detloff and Mr. Gary Schaefer are the
portfolio managers. Mr. Bacarella and Mr. Detloff co-manage the Monetta
Fund, Small-Cap Fund, Mid-Cap Fund and Large-Cap Fund. Mr Bacarella and
Mr. Detloff and Mr. Schaefer co-manage the Balanced Fund. Mr. Bacarella
and Mr. Schaefer co-manage the Intermediate Bond Fund and the
Government Money Market Fund.
<Page 15>
Mr. Bacarella has been Chairman and CEO of the Advisor since October, 1996;
Director since 1984; and President of the Advisor from 1984 to 1996 and April
1997 to present. He has served as the portfolio manager of the Monetta Fund
and the Small-Cap Fund since they began operations; manager of the
Mid-Cap Fund, Large-Cap Fund, Balanced Fund, Intermediate Bond Fund and
Government Money Market Fund since November 8, 1996. Mr. Bacarella was
Director - Pension Fund Investments for Borg-Warner Corporation until 1989.
He received his Bachelors Degree in Finance and Accounting from
St. Joseph's College and his MBA from Roosevelt University.
Mr. Detloff joined the Advisor in January 1996 as an Analyst. He has been
manager of the Monetta Fund, Small-Cap Fund, Mid-Cap Fund, Large-Cap Fund
and Balanced Fund since June 1998. Prior to joining the Advisor,
Mr. Detloff was an analyst for Amoco Corp. since 1987. He received his
Bachelor's Degree in Accounting from Northern Illinois University and his
MBA from the University of Illinois.
Mr. Schaefer became affiliated with the Advisor since June 1997.
He has been responsible for the management of the Intermediate Bond Fund,
the Government Money Market Fund and the fixed income portion of
the Balanced Fund since June 1997. Prior to becoming affiliated with the
Advisor, Mr. Schaefer was Managing Director with Lehman Brothers since 1984.
He has been involved in various aspects of the fixed income discipline
since 1971. He has his Bachelor's Degree in Finance and his MBA from
the University of Detroit.
OTHER INFORMATION
Although Monetta Fund, Inc. and Monetta Trust are separate legal entities, the
Prospectus is issued on a combined base for convenience and to avoid
redundancy.
Monetta Fund, the Trust and the Funds use "Monetta" in their names by license
from the Advisor and would be required to stop using those names if Monetta
Financial Services, Inc., ceases to be the Advisor. The Advisor has the right
to use the name for other enterprises, including other investment companies.
Promotional Activities
From time to time, the Advisor to each of the Funds may undertake various
promotional activities with the view to increasing the assets or the number of
shareholder accounts of one or more of the Funds. Those activities may
include the purchase by the Advisor on behalf of a new or current shareholder
of a Fund of additional shares of such Fund (matching contributions). These
purchases would be paid for by the Advisor out of its own resources.
The Advisor seeks the best combination of net price and execution in
selecting broker-dealers to execute portfolio transacations for the Funds.
Subject to the overriding consideration and consistent with the Rules of
Fair Practice of the National Association of Securities Dealers, Inc., the
Advisor may consider sales of Fund shares, or recommendations that clients
purchase Fund Shares, as a factor in the selection of broker-dealers to
execute transactions for the Funds.
<Page 16>
Legal Proceedings
On February 26, 1998, the Securities and Exchange Commission issued an order
instituting public administrative cease-and-desist proceedings entitled "In
the Matter of Monetta Financial Services, Inc., et al." (File No. 3-9546)
against Monetta Financial Services, Inc., Robert S. Bacarella, Richard D.
Russo, William M. Valiant, and Paul W. Henry. The action alleges that the
defendants violated Section 17(a) of the Securities Act of 1933, Section 10(b)
of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Section
206 of the Investment Advisors Act of 1940, because they failed to disclose
that securities issued by third parties in initial public offerings in 1993
were allocated partly to Messrs. Russo, Valiant, and Henry, who were either
Trustees or Directors of public-traded mutual funds advised by the Advisor,
and partly to the mutual fund and other clients of Advisor. All the
defendants contested the action and on March 27, 2000, the Securities
and Exchange Commission issued an initial decision in these proceedings,
finding that the defendants had violated the foregoing provisions, and that
Mr. Henry had violated Section 17(j) of the Investment Company Act of 1940
and Rule 17j-1 thereunder by not timely reporting his initial public
offering transactions, and ordering remedial sanctions, including cease and
desist orders, censures, temporary suspensions and payment of civil money
penalties. Monetta Financial Services, Inc., Mr. Bacarella and Mr. Russo
are appealing this decision and all of the orders related to those
defendants appealing are stayed pending outcome of the appeal. Mr.
Henry has been ordered suspended from association with any registered
investment company for 30 days, to cease and desist from committing
or causing violations of various provisions of the Securities Act of 1933,
the Securities Exchange Act of 1934 and the Investment Company Act of 1940,
to disgorge $10,187.50 and pay prejudgement interest on this amount,
and to pay a civil penalty of $10,000. The orders with respect to
Mr. Henry became final on April 18, 2000. A copy of the initial decision
is available on the Securities and Exchange Commission's
website at http://www.sec.gov/enforce/alj/id162bpm.htm.
Initial Public Offering (IPO's) Disclosure
The Funds may participate in the IPO market and a portion of the Funds'
returns may be attributable to its investments in IPO's. Investments in
IPO's could have a magnified impact on a fund with a small asset base.
There is no guarantee that as a funds' assets grow, it will continue to
experience similar performance by investing in IPO's. IPO allocation
among the Funds is based primarily on the portfolio managers discretion
to participate in such IPO's and other investment considerations.
Soft Dollar Disclosure
Under Section 28(e) of the Securities Exchange Act of 1934, an advisor
can redeem and make use of soft dollar trading credits to pay for research
services, assuming "best execution" from the broker/dealer. The advisor
uses soft dollar credits by trading primarily through electronic trading
systems such as Instinet or Bridge (IOE) and credits are used to pay
primarily for such research services as Bloomberg, First Call, O'Neil data
base and daily pricing services. The advisor may use soft dollars from a
fund's securities transactions to acquire research services or products
that are not directly useful to that fund and that may be useful to the
advisor in advising other funds within the same complex. To secure best
execution, the advisor uses a combination of limit and/or market orders.
For additional information on best execution, please see the SAI.
Distribution and Service Plan
The Trust has adopted a Service and Distribution Plan (the "Plan") pursuant
to Rule 12b-1 under the Investment Company Act of 1940, as amended with
respect to each series. Each series of the Trust may compensate service
organizations for their accounting, shareholder services and distribution
services in
<Page 17>
amounts up to 0.25% of 1% for the Small-Cap Fund, Mid-Cap Fund, Large-Cap
Fund, Balanced Fund and Intermediate Bond Fund and 0.10% of 1% for the
Government Money Market Fund per annum of the values of accounts of
Shareholders purchasing through such organiztions. Because these fees are
paid out of each series' assets on an ongoing basis, over time these fees
will increase the cost of your investment and may cost you more than
paying other types of sales charges. For additional on the Plan, please
see the SAI.
<Page 18>
Monetta Family of Mutual Funds
Shareholder's Manual
This section provides you with:
- Fund Reference Information 21
(Ticker Symbol, Fund Code)
- How To Purchase Fund Shares 24
- How To Redeem Fund Shares 25
- Dividends, Distributions and Federal Taxes 28
- How The Net Asset Value is Determined 29
- Shareholder Services 29
- Tax-Sheltered Retirement Plans Available 30
The various account policies, procedures and services may be modified or
discontinued without shareholder approval or prior notice.
<Page 19>
This page is left intentionally blank.
<Page 20>
FUND REFERENCE INFORMATION SUMMARY
FUND FUND LISTING INCOME
ENTITY /FILE No NAME No. TICKER NAME DIVIDEND
Monetta Fund, Inc. Monetta 013 MONTX Monetta ANNUALLY
811-4466 (IF ANY)
Monetta Trust:
811-7360 Small-Cap 045 MSCEX SmCapEq ANNUALLY
(IF ANY)
Mid-Cap 040 MMCEX MidCap ANNUALLY
(IF ANY)
Large-Cap 043 MLCEX LgCapEq ANNUALLY
(IF ANY)
Balanced 044 MBALX Balance QUARTERLY
Intermediate Bond 041 MIBFX (Not Listed) MONTHLY
Gov't Money Market 042 MONXX (Not Listed) DAILY
Capital Gains Distriubtion, if any, are normally paid in November.
MINIMUM INVESTMENT:
Initial Investment: $250
Subsequent Investments: No Minimum
Automatic Investment Plan-Subsequent Investment: $25
PLANS AVAILABLE:
Individual Retirement Accounts: Regular, Roth, Education, and Simple
Profit Sharing, 401K and 403B
INTERNET SITE:
www.monetta.com
<Page 21>
SHAREHOLDER INFORMATION SUMMARY
Purchase of Fund Shares
New Account Existing Account Exchange
* By Telephone: N/A With a bank With telephone exchange
1-800-241-9772 transfer* privilege, you may exchange
8 a.m. to 7p.m. however, your shares between Monetta
(Central Time) financial accounts (minimum of $250,
institution $5.00 fee).
must be an ACH
member (minimum
of $25).
* By Mail: Enclose a Enclose your Enclosed written
c/o Firstar Mutual signed and check or money instructions to exchange
Fund Services completed order with an your shares between Monetta
P.O. Box 701 application investment slip accounts.
Milwaukee, WI form with a (see your
53201-0701 check or current account
money order statement) or a
payable to signed letter
Monetta indicating your
Funds. name, address
and account
number.
* By Wire: N/A Deliver the N/A
Call following wire
1-800-241-9772 instructions to
for complete your bank:
instructions 1.) Firstar Bank-
Milwaukee N.A.
2.) ABA No.
0750-00022
3.) Acct No.
112-952-137
4.) Fund Name
5.) Your Name
6.) Your Monetta
Account No.
The above information is provided in summary form for your convenience,
please refer to each respective section of this manual for details.
<Page 22>
SHAREHOLDER INFORMATION SUMMARY
Redemption of Shares
New Account Existing Account Exchange
* By Telephone: N/A With telephone With telephone exchange
1-800-241-9772 redemption privilege, you may exchange
8 a.m. to 7 p.m. privilege, you shares between Monetta accounts
(Central Time) may redeem shares (minimum of $250, $5.00 fee).
from your account.
The funds will be
sent directly to
you or a
designated
financial
institution.
With a bank
transfer, however,
your financial
institution must
be an ACH member
(minimum of $25).
* By Mail: N/A Enclose signed Enclose written instructions to
c/o Firstar written exchange your shares between
Mutual Fund instructions, Monetta accounts.
Services including account
P.O. Box 701 number, amount or
Milwaukee, WI number of shares
53201-0701 (redemptions of
(Overnight $50,000 or more
Delivery) require a
615 E. signature
Michigan guarantee).
Street Checks written on
Milwaukee, WI the Gov't Money
53202 Market Fund must
be at least $500
to a maximum of
$50,000.
* By Wire: N/A Available through Available through pre-
pre-established established broker dealer
broker dealer agreements.
agreements.
<Page 23>
How to Purchase Shares
You may purchase shares of any of the Funds by telephone (if you have the ACH
plan), by check, by wire (into an existing account only), or by exchange from
your account into one of the other Monetta funds. Your initial investment in
any of the Monetta Funds must be at least $250. There is no minimum
additional investment amount. Each Fund has a minimum account balance of
$250. If you are purchasing shares to be held by a tax-sheltered retirement
plan sponsored by the Advisor, you must use special application forms which
you can obtain by calling the Funds at 1-800-MONETTA. Your purchase order
must be received by the Funds' Transfer Agent before the close of regular
session trading on the New York Stock Exchange (ordinarily 3:00 p.m. Central
time) to receive the net asset value calculated on that day. Orders received
after the close will receive the next calculated net asset value. Initial
purchases by an individual shareholder cannot be made by telephoning or faxing
an application to the Funds or the Transfer Agent.
Purchase by Telephone - Existing Accounts Only
By using the Funds' telephone purchase option, you may move money from your
bank account to your Fund account at your request. Only bank accounts held at
domestic financial institutions that are Automated Clearing House (ACH)
members may be used for telephone transactions. The option will become
effective approximately 15 business days after the application form is
received. Subsequent investments may be made by calling 1-800-241-9772. To
have your Fund shares purchased at the offering price determined at the close
of regular trading on a given date, the Transfer Agent must receive both your
purchase order and payment by Electronic Funds Transfer through the ACH System
before the close of regular trading on such a date. Most transfers are
completed within one business day. If money is moved by ACH transfer, you
will not be charged by the Funds for these services. The minimum amount that
can be transferred by telephone is $25. The Funds reserve the right to modify
or remove the ability to purchase shares by telephone at any time.
Purchase by Check
To purchase shares of a Fund by check, complete and sign the Share Purchase
Application included in this Prospectus and return it, with a check or other
negotiable bank draft made payable to MONETTA FUNDS. Applications will not be
accepted unless accompanied by payment. Additional purchases by check may be
made at any time by mailing a check payable to MONETTA FUNDS together with the
detachable form from a prior account statement or a letter indicating the
account number to which the subsequent purchase is to be credited and the
name(s) of the registered owner(s).
Purchases must be made in U. S. dollars and checks must be drawn on U. S.
banks. No cash or third-party checks will be accepted. If your order to
purchase shares is canceled because your check does not clear, you will be
responsible for a $20.00 return item fee and any resulting loss incurred by
the Fund.
Purchase by Wire
Shares may also be purchased by wire transfer of funds into an existing
account only. Before wiring funds, call the Transfer Agent at 1-800-241-9772
to ensure prompt and accurate handling of your account. Your bank may charge
you a fee for sending the wire. The Funds will not be responsible for the
consequences of any delays, including delays in the banking or Federal Reserve
wire systems.
<Page 24>
Purchase by Exchange
You may purchase shares by exchange of shares from another Monetta existing
account either by phone or by mail. Restrictions apply; please review the
information under "How to Redeem Shares - By Exchange."
Purchase through Intermediates
You may also purchase (and redeem) shares through brokers, agents or other
institutions (intermediaries) who have entered into selling agreements with
the Fund's distributor. Investors may be charged a fee by the intermediary
and may set their own initial and subsequent investment minimums. If you
purchase shares through an intermediary, it will be responsible for
promptly forwarding your order to the Fund's transfer agent. In some cases,
the Funds and the Advisor may enter into arrangements with such intermediary
by which a Fund may pay up to 0.25% of the value of shares purchased
through that intermediary, to compensate it for distribution and other
related services provided to those Funds Shareholders. Any payments by a
Fund would be pursuant ot its Service and Distribution Plan. The Advisor,
from its own resources, may pay additional amounts to such intermediaries
to the extent not available through the Service and Distribution Plan.
Conditions of Purchase
The purchase order is considered to have been placed when it is received in
proper form by the Transfer Agent or by an authorized sub-transfer agent.
Once your purchase order has been accepted, you may not cancel or revoke it;
however, you may redeem the shares. The Funds reserve the right not to accept
any purchase order that it determines not to be in the best interest of the
Fund or of a Fund's Shareholders. Election of the Telephone Exchange
Privilege authorizes the Funds and the Transfer Agent to tape-record
instructions to purchase. Reasonable procedures are used to confirm that
instructions received by telephone are genuine, such as requesting personal
identification information that appears on your application and requiring
permission to record the conversation. You will bear the risk of loss due to
unauthorized or fraudulent instructions regarding your account, although the
Funds may have a risk of such loss if reasonable procedures were not used.
The Funds also reserve the right to waive or change the investment minimums
for any reason. Monetta Fund and the Trust do not issue certificates for Fund
shares because of the availability of the telephone exchange and redemption
privileges.
How to Redeem Shares
Redemption for Cash
In Writing. You may redeem all or part of the shares in your account, without
charge, by sending a written redemption request "in good order" to the
Transfer Agent. A redemption request will be considered to have been received
in good order if the following conditions are satisfied:
(1) The request must be in writing, indicating the Fund, the number of shares
or dollar amount to be redeemed, and the shareholder's account number;
(2) The request must be signed by the shareholder(s) exactly as the shares
are registered;
(3) The signature(s) on the written redemption request must be guaranteed if
the shares to be redeemed have a value of $50,000 or more or the redemption
proceeds are to be sent to an address other than your address of record.
(4) Corporations and associations must submit, with each request, a form of
acceptable resolution; and
(5) Other supporting legal documents may be required from organizations,
executors, administrators, Trustees, or others acting on accounts not
registered in their names.
Shares may not be redeemed by facsimile.
<Page 25>
Signature Guarantee. The signature on your redemption request must be
guaranteed if:
-redemption proceeds are $50,000 or more
-proceeds are to be mailed to an address other than your address of
record
-a change of address request has been received by the Fund or transfer
agent within the last 15 days.
The guarantor must be a bank, member firm of a national securities exchange,
savings and loan association, credit union, or other entity authorized by
state law to guarantee signatures. A notary public may not guarantee
signatures. The signature guarantee must appear on the written redemption
request (the guarantor must use the phrase "signature guaranteed" and must
include the name of the guarantor bank or firm and an authorized signature).
By Telephone. You may redeem shares having a value up to $50,000 by calling
the Transfer Agent at 1-800-241-9772, if telephone redemption is available for
your account. To reduce the risk of a fraudulent instruction, proceeds of
telephone redemptions may be sent only to the shareholder's address of record
or to a bank or brokerage account designated by the shareholder, in writing,
on the purchase application or in a letter with the signature(s) guaranteed.
The Funds reserve the right to record all telephone redemption requests.
By ACH Transfer. Redemption proceeds can be sent to your bank account by ACH
transfer. You can elect this option by completing the appropriate section of
the purchase application. If money is moved by ACH transfer, you will not be
charged by the Funds for these services. There is a $25 minimum per ACH
transfer. Typically, funds are credited to your bank account within three
business days.
Redemption by Exchange
By writing (without charge) to, or by telephoning (for a fee) the Transfer
Agent, you may exchange all or any portion of your shares of any of the
Monetta Funds for shares of another Fund offered by Monetta for sale in your
state. A signed, properly completed Share Purchase Application must be on
file. An exchange transaction is a sale and purchase of shares for Federal
income tax purposes and may result in capital gain or loss. The registration
of the account to which you are making an exchange must be exactly the same as
that of the Fund account from which the exchange is made and the amount you
exchange must meet any applicable minimum investment of the Fund being
purchased. Unless you have elected to receive your dividends in cash, on an
exchange of all shares, any accrued unpaid dividends will be invested in the
Fund to which you exchange on the next business day. An exchange may be made
by following the redemption procedure described above and indicating the Fund
to be purchased, except that a signature guarantee normally is not required.
To use the Telephone Exchange Privilege to exchange between your Monetta
accounts in the amount of $250 or more, call 1-800-241-9772 before 3:00 p.m.
Central time. The Funds' Transfer Agent imposes a charge (currently $5.00)
for each Telephone Exchange. The general redemption policies apply to
redemption of shares of Telephone Exchange. The Funds reserve the right at
any time without prior notice to suspend or terminate the use of the Telephone
Exchange Privilege by any person or class of persons, or to terminate the
Privilege in its entirety. Because such a step would be taken only if their
respective Boards believe it would be in the best interests of the Funds, the
Funds expect to provide Shareholders with prior written notice of any such
action unless it appears that the resulting delay in the suspension,
limitation, modification, or termination of the Telephone Exchange Privilege
would adversely affect the Funds. If the Funds were to suspend, limit,
modify, or terminate the Telephone Exchange Privilege, a shareholder expecting
to make a Telephone Exchange might find that an exchange could not be
processed or that there might be a delay in the implementation of the
exchange.
<Page 26>
Redemption by Checkwriting - Government Money Market Fund Only
An investor in the Government Money Market Fund may request on the Share
Purchase Application that the Government Money Market Fund provide redemption
checks drawn on the Fund. Checks may be in amounts of $500 up to $50,000. The
shares redeemed by check will continue earning dividends until the check has
cleared. Checks will not be returned. If selected on the Application Form, a
book of 10 checks and 2 deposit forms will be sent to the shareholder.
Additional checks and deposit forms will be sent to the shareholder, upon
request, for a fee of $5.00 per book. This amount will be deducted from the
shareholder's account. In order to establish this Checkwriting privilege
after an account has been opened, the shareholder must send a written request
to the Monetta Government Money Market Fund, P. O. Box 701, Milwaukee,
Wisconsin 53201-0701. A fee of $20 will be charged for each stop payment
request. If there are insufficient shares in the shareholder's account to
cover the amount of the redemption by check, the check will be returned marked
"insufficient funds" and a fee of $20 will be charged to the shareholder's
account. Because dividends on the Fund accrue daily, checks may not be used
to close an account, as a small balance is likely to result. The Checkwriting
Privilege is only available to the Government Money Market Fund Shareholders.
The Checkwriting Privilege is not available for IRAs or other retirement
accounts.
Redemption Price
The redemption price will be the net asset value per share of the Fund next
determined after receipt by the Transfer Agent of a redemption request in good
order. This means that your redemption request (including a telephone
exchange request) must be received in good order by the Transfer Agent before
the close of regular session trading on the New York Stock Exchange
(ordinarily 3:00 p.m. Central time) to receive the net asset value calculated
that day. The principal value and return on your investment will fluctuate
and on redemption your shares may be worth more or less than your original
cost.
General Redemption Policies
You may not cancel or revoke your redemption request once instructions have
been received and accepted. The Funds cannot accept a redemption request that
specifies a particular date or price for redemption or any special conditions.
Please telephone the Funds if you have any question about requirements for a
redemption before submitting your request. If you wish to redeem shares held
by one of the tax-sheltered retirement plans sponsored by the Advisor, special
procedures of those plans apply. See "Tax-Sheltered Retirement Plans." If
you request payment of redemption proceeds by wire, you must pay the cost of
the wire (currently $12.00).
Your redemption request must be sent to the Transfer Agent. If a redemption
request is sent directly to the Funds, it will be forwarded to the Transfer
Agent and will receive the redemption price next calculated after receipt by
the Transfer Agent. If you redeem shares through an investment dealer, the
dealer will be responsible for promptly forwarding your request to the Fund's
transfer agent. The Funds generally pay proceeds of a redemption no later
than seven days after proper instructions are received. If you attempt to
redeem shares within 15 days after they have been purchased by check, a Fund
may delay payment of the redemption proceeds to you until it can verify that
payment for the purchase of those shares has been (or will be) collected.
<Page 27>
During periods of volatile economic and market conditions, you may have
difficulty placing your redemption or exchange by telephone, which might delay
implementation of the redemption or exchange. Use of the Telephone Redemption
or Exchange Privilege authorizes the Funds and the Transfer Agent to tape-
record all instructions to redeem shares. Reasonable procedures are used to
confirm that instructions received by telephone are genuine, such as
requesting personal identification information that appears on your
application and requiring permission to record the conversation. You will
bear the risk of loss due to unauthorized or fraudulent instructions regarding
your account, although the Funds may have a risk of such loss if reasonable
procedures were not used.
Because of the relatively high cost of maintaining smaller accounts, the Funds
reserve the right to redeem shares in any account with a balance of less than
$250 in share value. Prior to any such redemption, each Fund will give the
shareholder thirty days' written notice during which time the shareholder may
increase his investment to avoid having his shares redeemed. The $250 minimum
balance will be waived if the account balance drops below the required minimum
due to market erosion.
Dividends, Distributions, and Federal Taxes
The Monetta Fund, Small-Cap Fund, Mid-Cap Fund, and Large-Cap Fund declare and
pay income dividends, if any, at least annually. The Balanced Fund pays
income dividends, if any, quarterly. The Intermediate Bond Fund declares and
pays income dividends monthly. Income dividends of the Government Money
Market Fund are declared daily and paid monthly. Capital gains, if any, are
distributed by each Fund at least annually. Distributions of a Fund are
automatically reinvested in additional shares of that Fund unless you elect
payment in cash. Cash dividends can be sent to you by check or deposited
directly into your bank account. Call the Transfer Agent at 1-800-241-9772
for more information and forms to sign up for direct deposit.
Each Fund reserves the right to reinvest the proceeds and future distributions
in additional Fund shares at the current net asset value if checks mailed to
you for distributions are returned as undeliverable or not presented for
payment within six months.
Each Fund is a separate entity for Federal income tax purposes. Each Fund
intends to continue to qualify as a "regulated investment company" under the
Internal Revenue Code and, thus, not be subject to Federal income taxes on
amounts it distributes to Shareholders.
Each Fund will distribute all of its net income and gains to Shareholders.
Dividends from investment income and net short-term capital gains are taxable
as ordinary income. Distributions of long-term capital gains are taxable as
long-term gains, regardless of the length of time you have held your shares in
a Fund. Distributions will be taxable to you whether received in cash or
reinvested in shares of a Fund. You will be advised annually as to the source
of your distributions for tax purposes. If you are not subject to income
taxation, you will not be required to pay tax on amounts distributed to you.
If you purchase shares shortly before a record date for a distribution, you
will, in effect, receive a return of a portion of your investment, but the
distribution will be taxable to you even if the net asset value of your shares
is reduced below your cost. However, for Federal income tax purposes, your
original cost would continue as your tax basis.
If you fail to furnish your social security or other tax identification number
or to certify properly that it is correct, the Funds may be required to
withhold Federal income tax, currently at the rate of 31% ("backup
withholding"), from dividend, capital gain, and redemption payments to you.
Your dividend and capital gain payments may also be subject to backup
withholding if you fail to certify properly that you are not subject to backup
withholding due to the under-reporting of certain income. These certifications
are contained in the Share Purchase Application, which you should complete and
return when you make your initial investment.
<Page 28>
Determination of Net Asset Value
The purchase and redemption price of each Fund's shares is its net asset value
per share. The net asset value of a share of each Fund is determined as of
the close of trading on the New York Stock Exchange (currently 3:00 p.m.
Central time) by dividing the difference between the values of the Fund's
assets and liabilities by the number of shares outstanding. This is referred
to as "net asset value per share," which is determined as of the close of
regular session trading at the New York Stock Exchange on each day on which
that exchange is open for trading.
Valuation
Securities for which market quotations are readily available at the time of
valuation are valued on that basis. Each security traded on a national stock
exchange is valued at its last sale price on that exchange on the day of
valuation or, if there are no sales that day, at the mean of the latest bid
and asked quotations. Each over-the-counter security for which the last sale
price on the day of valuation is available from the Nasdaq National Market is
valued at that price. All other over-the-counter securities for which
reliable quotations are available are valued at the mean of the latest bid and
asked quotations. Long-term straight-debt securities for which market
quotations are not readily available are valued at a fair value based on
valuations provided by pricing services approved by the respective Boards,
which may employ electronic data processing techniques, including a matrix
system, to determine valuations. Short-term debt securities for which market
quotations are not readily available are valued by use of a matrix prepared by
the Advisor based on quotations for comparable securities. Other assets and
securities held by a Fund for which these valuation methods do not produce a
fair value are valued by a method that the Board believes will determine a
fair value.
Valuation of the Government Money Market Fund
The Government Money Market Fund attempts to maintain its net asset value at
$1.00 per share. Portfolio securities are valued based on their amortized
cost, which does not take into account unrealized gains or losses. Other
assets and securities of the Fund for which this valuation method does not
produce a fair value are valued at a fair value determined by the Board. The
extent of any deviation between the Fund's asset value based upon market
quotations or equivalents and $1.00 per share based on amortized cost will be
examined by the Board of Trustees. If such deviation were to exceed 1/2 of
1%, the Board would consider what action, if any, should be taken, including
selling portfolio instruments; increasing, reducing, or suspending
distributions; or redeeming shares in kind.
Shareholder Services
Reporting to Shareholders
You will receive a confirmation statement reflecting each of your purchases
and redemptions of shares of a Fund, as well as periodic statements detailing
distributions made by each Fund of which you are a Shareholder. You may elect
to receive a combined statement for all Funds for which you are a shareholder.
In addition, you will receive semi-annual and annual reports showing the
portfolio holdings of each Fund and annual tax information. To eliminate
unnecessary duplication and demonstrate respect for our environment, we will
deliver a single copy of most financial reports and prospectuses to investors
who share an address, even if the accounts are registered under diffirent
names. Shareholders may request duplicate copies free of charge.
<Page 29>
Certain Account Changes
Investors who wish to make a change in their address of record, a change in
investments made through an automatic investment plan, or a change in the
manner in which dividends are received may do so by calling the transfer agent
at 1-800-241-9772.
Automatic Investment Plan
The Funds have an Automatic Investment Plan which permits an existing
Shareholder to purchase additional shares of any Fund (minimum $25 per
transaction) at regular intervals. Under the Automatic Investment Plan,
shares are purchased by transferring funds from a Shareholder's checking, bank
money market, NOW account, or savings account in an amount of $25 or more
designated by the Shareholder. At your option, the account designated will
be debited and shares will be purchased on the date elected by the
shareholder. Payroll deduction is available for certain qualifying employers;
please call 1-800-MONETTA for further information. There must be a minimum of
seven days between automatic purchases. If the date elected by the
Shareholder is not a business day, funds will be transferred the next business
day thereafter. Only an account maintained at a domestic financial
institution which is an Automated Clearing House member may be so designated.
To establish an Automatic Investment Account, complete and sign Section G of
the Shareholder Purchase Application included in this Prospectus and send it
to the Transfer Agent. You may cancel this privilege or change the amount of
purchase at any time by calling 1-800-241-9772 or by mailing instructions to
the Transfer Agent. The change will be effective five business days following
receipt of your notification by the Transfer Agent. A Fund may modify or
terminate this privilege at any time or charge a service fee, although no such
fee currently is contemplated. However, a $20.00 fee will be imposed by the
Transfer Agent if sufficient funds are not available in the Shareholder's
account at the time of the automatic transaction.
Systematic Exchange Plan
The Funds offer a Systematic Exchange Plan whereby a Shareholder may
automatically exchange shares (in increments of $250 or more) of one Monetta
fund into another on any day, either monthly or quarterly. For additional
information and a Systematic Exchange Plan form, please call the Transfer
Agent at 1-800-241-9772. Before participating in the Systematic Exchange
Plan, an investor should consult a tax or other financial advisor to determine
the tax consequences of participation.
Systematic Withdrawal Plan
The Funds offer a Systematic Withdrawal Plan for Shareholders who own shares
of any Fund worth at least $10,000 at current net asset value. Under the
Systematic Withdrawal Plan, a fixed sum (minimum $500) will be distributed at
regular intervals (on any day, either monthly or quarterly). In electing to
participate in the Systematic Withdrawal Plan, investors should realize that,
within any given period, the appreciation of their investment in a particular
Fund may not be as great as the amount withdrawn. A Shareholder may vary the
amount or frequency of withdrawal payments or temporarily discontinue them by
notifying the Transfer Agent at 1-800-241-9772. The Systematic Withdrawal
Plan does not apply to shares of any Fund held in Individual Retirement
Accounts or defined contribution retirement plans. For additional information
or to request an application, please call 1-800-241-9772.
<Page 30>
Tax-Sheltered Retirement Plans
The Advisor offers prototype tax-sheltered retirement plans for individuals,
businesses, and nonprofit organizations. Please call 1-800-MONETTA for
booklets describing the following programs and the forms needed to establish
them:
Individual Retirement Accounts (IRAs) for employed individuals and their non-
employed spouses.
Education IRA, providing tax-free earnings growth and tax-free withdrawals for
certain higher education expenses (contributions not deductible).
Roth IRA, providing tax-free earnings growth and tax-free withdrawals with
certain greater flexibility than Traditional IRAs (contributions not
deductibles).
Money Purchase Pension and Profit Sharing Plans, including salary deferral
(401(k)) plans, for self-employed individuals, partnerships, and corporations.
403(b) Retirement Plans for nonprofit organizations.
Savings Incentive Match Plans (Simple-IRAs) permitting employers to provide
retirement benefits, including salary deferral, to their employees using IRAs
and minimizing administration and reporting requirements.
<Page 31>
(This page is left intentionally blank)
<Page 32>
FINANCIAL HIGHLIGHTS
The financial highlights tables are intended to help you understand the Funds'
financial performance for the past 5 years through December 31st for each year
shown (or for Funds with a performance history shorter than 5 years, through
December 31st of each year shown). Certain information reflects financial
results for a single Fund share. The total returns in the table represent the
rate that an investor would have earned (or lost) on an investment in each of
the Funds (assuming reinvestment of all dividends and distributions). This
information has been audited by KPMG LLP, whose report, along with the Funds'
financial statements, are included in the Annual Reports, which are available
upon request and incorporated by reference into the SAI.
<TABLE>
<CAPTION>
Monetta Fund
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $14.964 $17.274 $15.842 $15.591 $14.515
Income From Investment Operations
Net investment income 0.075 (0.104) (0.041) (0.079) 0.029
Net gains or losses on securities (both
realized and unrealized) 7.672 (1.554) 4.223 0.330 4.075
Total from investment
operations 7.747 (1.658) 4.182 0.251 4.104
Less Distributions
Dividends (from net investment
income) 0.000 0.000 0.000 0.000 (0.028)
Distributions (from capital
gains) 0.000 (0.652) (2.750) 0.000 (3.000)
Return of Capital 0.000 0.000 0.000 0.000 0.000
Total distributions 0.000 (0.652) (2.750) 0.000 (3.028)
Net asset value,
end of period $22.711 $14.964 $17.274 $15.842 $15.591
Total return 51.80% (9.03)% 26.18% 1.60% 28.02%
Ratios/Supplemental Data
Net assets, end of period
($ millions) $135.7 $124.7 $163.4 $211.5 $362.7
Ratio of expenses to
average net assets 1.45% 1.36% 1.48% 1.38% 1.36%
Ratio of net investment income
to average net assets 0.50% (0.64)% (0.24)% (0.51)% 0.18%
Portfolio turnover rate 210.9% 107.5% 97.8% 204.8% 272.0%
</TABLE>
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 33>
<TABLE>
<CAPTION>
Small-Cap
Equity Fund
2/1/97
Through
1999 1998 12/31/97
<S> <C> <C> <C>
Net asset value, beginning of
period $13.396 $13.900 $10.000
Income From Investment Operations
Net investment income (0.264) (0.272) (0.148)
Net gains or losses on securities (both
realized and unrealized) 8.699 (0.136) 4.878
Total from investment operations 8.435 (0.408) 4.730
Less Distributions
Dividends (from net investment
income) 0.000 0.000 0.000
Distributions (from capital
gains) 0.000 (0.096) (0.830)
Return of Capital 0.000 0.000 0.000
Total distributions 0.000 (0.096) (0.830)
Net asset value, end of period $21.831 $13.396 $13.900
Total return 62.91% (2.81)% 47.17%*
Ratios/Supplemental Data
Net assets, end of period ($ thousands) $5,332 $3,980 $2,518
Ratio of expenses to average net assets 2.36% 2.39% 1.75%*
Ratio of net investment income
to average net assets (1.82%) (2.04)% (1.13)%*
Portfolio turnover rate 265.0% 200.4% 138.8%*
</TABLE>
<TABLE>
<CAPTION>
Mid-Cap Equity Fund
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $13.571 $14.975 $14.814 $11.962 $12.199
Income From Investment Operations
Net investment income (0.099) 0.022 (0.045) 0.044 0.059
Net gains or losses on securities (both
realized and unrealized) 7.225 (0.266) 4.296 2.852 2.874
Total from investment
operations 7.126 (0.244) 4.251 2.896 2.933
Less Distributions
Dividends (from net investment
income) 0.000 (0.022) 0.000 (0.044) (0.050)
Distributions (from capital
gains) (0.342) (1.138) (4.090) 0.000 (3.120)
Return of Capital 0.000 0.000 0.000 0.000 0.000
Total distributions (0.342) (1.160) (4.090) (0.044) (3.170)
Net asset value,
end of period $20.355 $13.571 $14.975 $14.814 $11.962
Total return 53.39% (0.85%) 29.14% 24.20% 24.54%
Ratios/Supplemental Data
Net assets, end of period
($ thousands) $19,458 $18,920 $21,908 $17,338 $14,216
Ratio of expenses
to average net assets 1.25% 1.21% 1.26% 1.23% 1.25%
Ratio of net investment income
to average net assets (0.67%) 0.15% (0.28%) 0.32% 0.44%
Portfolio turnover rate 170.4% 237.6% 137.8% 93.3% 254.4%
</TABLE>
*Ratios and total return for the year of inception are not annualized.
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 34>
<TABLE>
<CAPTION>
Large-Cap
Equity Fund
9/1/95
Through
1999 1998 1997 1996 12/31/95
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $13.437 $13.359 $12.266 $10.571 $10.000
Income From Investment Operations
Net investment income (0.147) (0.068) (0.007) 0.023 0.005
Net gains or losses on securities (both
realized and unrealized) 7.297 1.074 3.250 2.928 0.570
Total from investment operations 7.150 1.006 3.243 2.951 0.575
Less Distributions
Dividends (from net investment
income) 0.000 0.000 0.000 (0.023) (0.004)
Distributions (from capital
gains) (0.525) (0.928) (2.150) (1.233) 0.000
Return of Capital 0.000 0.000 0.000 0.000 0.000
Total distributions (0.525) (0.928) (2.150) (1.256) (0.004)
Net asset value, end of period $20.062 $13.437 $13.359 $12.266 $10.571
Total return 53.98% 8.99% 26.64% 28.20% 5.74%*
Ratios/Supplemental Data
Net assets,
end of period ($ thousands) $9,298 $4,185 $4,265 $2,288 $1,072
Ratio of expenses to
average net assets 1.66% 1.86% 1.51% 1.51% 0.69%*
Ratio of net investment income
to average net assets (0.91%) (0.52%) (0.05%) 0.31% 0.05%*
Portfolio turnover rate 81.4% 207.5% 123.2% 152.7% 38.2%*
</TABLE>
<TABLE>
<CAPTION>
Balanced Fund
9/1/95
Through
1999 1998 1997 1996 12/31/95
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $14.476 $14.078 $12.643 $10.605 $10.000
Income From Investment Operations
Net investment income 0.239 0.290 0.264 0.132 0.009
Net gains or losses on securities (both
realized and unrealized) 3.741 0.838 2.398 2.598 0.602
Total from investment operations 3.980 1.128 2.662 2.730 0.611
Less Distributions
Dividends (from net investment
income) (0.265) (0.286) (0.224) (0.132) (0.004)
Distributions (from capital
gains) (1.923) (0.444) (1.003) (0.560) (0.002)
Return of Capital 0.000 0.000 0.000 0.000 0.000
Total distributions (2.188) (0.730) (1.227) (0.692) (0.006)
Net asset value, end of period $16.268 $14.476 $14.078 $12.643 $10.605
Total return 29.60% 8.59% 21.21% 25.94% 6.16%*
Ratios/Supplemental Data
Net assets,
end of period ($ thousands) $9,449 $14,489 $12,054 $2,336 $410
Ratio of Expenses
to average net assets 0.95% 0.84% 1.02% 1.40% 0.91%*
Ratio of Net investment income
to average net assets 1.55% 2.06% 1.88% 1.54% 0.08%*
Portfolio turnover rate 71.3% 127.7% 115.9% 117.8% 54.8%*
</TABLE>
*Ratios and total return for the year of inception are not annualized.
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 35>
<TABLE>
<CAPTION>
Intermediate Bond Fund
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $10.652 $10.445 $10.208 $10.244 $9.624
Income From Investment Operations
Net investment income 0.602 0.592 0.599 0.612 0.655
Net gains or losses on securities (both
realized and unrealized) (0.435) 0.269 0.278 0.019 0.740
Total from investment
operations 0.167 0.861 0.877 0.631 1.395
Less Distributions
Dividends (from net investment
income) (0.565) (0.577) (0.592) (0.612) (0.655)
Distributions (from capital
gains) (0.010) (0.077) (0.048) (0.055) (0.120)
Return of Capital 0.000 0.000 0.000 0.000 0.000
Total distributions (0.575) (0.654) (0.640) (0.667) (0.775)
Net asset value,
end of period $10.244 $10.652 $10.445 $10.208 $10.244
Total return 1.60% 8.38% 8.91% 6.46% 14.84%
Ratios/Supplemental Data
Net assets, end of period
($ thousands) $19,873 $6,676 $3,933 $2,769 $3,589
Ratio of Expenses to average
net assets- Gross (a) 0.74% 0.75% 0.87% 0.85% 0.75%
Ratio of Expenses to average
net assets - Net 0.54% 0.55% 0.65% 0.55% 0.27%
Ratio of Net investment income
to average net assets-Gross(a)5.58% 5.39% 5.60% 5.45% 5.46%
Ratio of Net investment income
to average net assets-Net 5.78% 5.59% 5.82% 5.75% 5.94%
Portfolio turnover rate 115.2% 52.0% 96.7% 28.9% 75.1%
</TABLE>
<TABLE>
<CAPTION>
Government Money Market Fund
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $1.000 $1.000 $1.000 $1.000 $1.000
Income From Investment Operations
Net investment income 0.047 0.051 0.050 0.049 0.059
Net gains or losses on
securities (both
realized and unrealized) 0.000 0.000 0.000 0.000 0.000
Total from investment operations 0.047 0.051 0.050 0.049 0.059
Less Distributions
Dividends (from net investment
income) (0.047) (0.051) (0.050) (0.049) (0.059)
Distributions (from capital
gains) 0.000 0.000 0.000 0.000 0.000
Return of Capital 0.000 0.000 0.000 0.000 0.000
Total distributions (0.047) (0.051) (0.050) (0.049) (0.059)
Net asset value,
end of period $1.000 $1.000 $1.000 $1.000 $1.000
Total return 4.85% 5.24% 5.15% 5.06% 5.87%
Ratios/Supplemental Data
Net assets, end of period
($ thousands) $3,700 $4,095 $4,464 $6,232 $4,393
Ratio of Expenses to
average net assets - Gross (a) 0.70% 0.68% 0.76% 0.67% 0.59%
Ratio of Expenses to
average net assets - Net 0.35% 0.32% 0.39% 0.31% 0.07%
Ratio of Net investment income
to average net assets
-Gross (a) 4.36% 4.76% 4.65% 4.59% 5.17%
Ratio of Net investment income
to average net assets-Net 4.71% 5.11% 5.02% 4.95% 5.69%
Portfolio turnover rate N/A N/A N/A N/A N/A
</TABLE>
(a) 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 36>
(Inside back cover - blank)
ADDITIONAL INFORMATION Distributed By Funds Distributor, Inc.
*Annual and Semi-Annual Reports
*Statement of Additional Information
The Annual and Semi-Annual Reports contain more detailed information about the
Funds' investment strategies and market conditions that significantly
affected performance during the most recent fiscal year.
The Statement of Additional Information provides detailed information about
the Funds and is incorporated by reference into this Prospectus, making the
SAI a legal part of this Prospectus.
Information about the Funds, including these reports, can be obtained without
charge (except where noted) upon request.
MONETTA SEC
*In Person 1776-A South Naperville Road Public Reference Room
Suite 100 Washington, D.C.
Wheaton, IL 60187-8133
*By Telephone 1-800-MONETTA 1-800-SEC-0330
1-800-684-3416 (TDD) (Location/Hours/Fees Only)
*By Mail 1776-A South Naperville Road Public Reference Section
Suite 100 Washington, D.C. 20549-6009
Wheaton, IL 60187-8133 (Payment of duplication fee
required with request)
*By Internet: http://www.monetta.com http://www.sec.gov
INVESTMENT COMPANY ACT FILE NO: Monetta Fund 811-4466
Monetta Trust 811-7360
Monetta Family of Mutual Funds
1776-A South Naperville Road, Suite 100
Wheaton, IL 60187-8133
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
APRIL 25, 2000
MONETTA FAMILY OF MUTUAL FUNDS
1776-A South Naperville Road Suite 100
Wheaton, IL 60187
(1-800-MONETTA)
WWW.MONETTA.COM
MONETTA FUND, INC.
MONETTA TRUST, INCLUDES THE FOLLOWING SERIES:
MONETTA SMALL-CAP EQUITY FUND
MONETTA MID-CAP EQUITY FUND
MONETTA LARGE-CAP EQUITY FUND
MONETTA BALANCED FUND
MONETTA INTERMEDIATE BOND FUND
MONETTA GOVERNMENT MONEY MARKET FUND
This Statement of Additional Information (SAI) is not a Prospectus,
and should be read in conjunction with the Funds' Prospectus dated April 25,
2000, which is incorporated by reference into this SAI and maybe obtained
from the Funds at the above phone number or address.
This SAI contains additional and more detailed information about the Fund's
operations and activities than the Prospectus. The Annual Report, which
contains important financial information about the Funds, is incorporated
by reference into this SAI and is also availabe, without charge, at the
above phone number or address.
<Page 1>
TABLE OF CONTENTS PAGE
. THE FUNDS' HISTORY .........................................3
. INFORMATION ABOUT THE FUNDS ................................3
Investment Guidelines ....................................3
Investment Strategies and Risks ..........................3
Investment Restrictions ..................................8
. DIRECTORS, TRUSTEES AND OFFICERS .............................11
. SIGNIFICANT SHAREHOLDERS .....................................13
. SERVICE PROVIDERS ............................................14
Investment Advisor and Administrator. ....................14
Distributor ..............................................15
Transfer Agent and Custodian .............................15
Legal Counsel ............................................15
Independent Auditors .....................................15
. 12b-1 PLAN ...................................................16
. BROKERAGE ALLOCATION .........................................17
. CAPITAL STOCK ...............................................19
. SHAREHOLDER SERVICES .........................................20
. TAXATION OF THE FUNDS ........................................21
. PERFORMANCE INFORMATION ......................................21
. FINANCIAL STATEMENTS .........................................24
. APPENDIX I - FIXED INCOME SECURITIES RATINGS .................24
<Page 2>
THE FUNDS' HISTORY
Monetta Fund, Inc. ("Fund" or the "registrant") is an open-end, diversified
management investment company that was organized in 1985 as a Maryland
corporation. The inception date of the Monetta Fund is 05/06/86.
Monetta Trust ("TRUST" or the "registrant") is also an open-end,
diversified management investment company that was organized as a
Massachusetts Trust in 1992. The following funds are each a series of
Monetta Trust:
<TABLE>
<CAPTION>
INCEPTION DATE
<S> <C>
Monetta Small-Cap Equity Fund 02/01/97
Monetta Mid-Cap Equity Fund 03/01/93
Monetta Large-Cap Equity Fund 09/01/95
Monetta Balanced Fund 09/01/95
Monetta Intermediate Bond Fund 03/01/93
Monetta Government Money Market Fund 03/01/93
</TABLE>
INFORMATION ABOUT THE FUNDS
INVESTMENT GUIDELINES
Each Fund's investment objectives, as stated in the Prospectus, differ
principally in the types of securities selected for investment and the
relative importance each Fund places on growth potential, current income
and preservation of capital as considerations in selecting investments.
Each Fund's investment objective is a fundamental policy, which may not be
changed without the approval of a majority of the outstanding voting
securities of that Fund. This means that the approval of the lesser of (i)
67% of the Fund's shares present at a meeting, if more than 50% of all of
the shares outstanding are present or (ii) more than 50% of all of the
Fund's outstanding shares is required.
Since each of the Funds are registered under The Investment Company Act of
1940 as diversified, open-ended investment companies, each Fund agrees that
it will not own more than 5% of its total assets in a single issue
security. This applies only to 75% of the total assets. That is to say
that if it does own more than 5% of its total assets in individual
securities, the total of those over 5% cannot exceed 25%.
Within the restrictions outlined here, and in the Prospectus, the Advisor
has full discretion on the investment decision of the Funds.
INVESTMENT STRATEGIES AND RISKS
The following is a detailed description, along with associated risks, of
the various securities that some or all of the Funds may invest in.
EQUITY SECURITIES
Common stocks represent an equity interest in a corporation. Although
common stocks have a history of long-term growth in value, their prices
tend to fluctuate in the short term. The securities of smaller companies,
as a class, have had periods of favorable results and other periods of less
favorable results compared to the securities of larger companies as a
class. Stocks of small to mid-sized companies tend to
<Page 3>
be more volatile and less liquid than stocks of large companies. Smaller
companies, as compared to larger companies, may have a shorter history of
operations, may not have as great an ability to raise additional capital,
may have a less diversified product line making them susceptible to market
pressure and may have a smaller public market for their shares.
DEBT SECURITIES
In pursuing its investment objective, each Fund may invest in debt
securities of corporate and governmental issuers. The risks inherent in
debt securities depend primarily on the term and quality of the obligations
in a Fund's portfolio, as well as on market conditions. A decline in the
prevailing levels of interest rates generally increases the value of debt
securities, while an increase in rates usually reduces the value of those
securities. As a result, interest rate fluctuations will affect a Fund's
net asset value but not the income received by a Fund from its portfolio
securities.* In addition, if the bonds in a Fund's portfolio contain call,
prepayment or redemption provisions, during a period of declining interest
rates these securities are likely to be redeemed and a Fund will probably
be unable to replace them with securities having a comparable yield. There
can be no assurance that payments of interest and principal on portfolio
securities will be made when due.
CONVERTIBLE SECURITIES
Convertible securities include any corporate debt security or preferred
stock that may be converted into underlying shares of common stock. The
common stock underlying convertible securities may be issued by a different
entity than the issuer of the convertible securities. Convertible
securities entitle the holder to receive interest payments paid on
corporate debt securities or the dividend preference on a preferred stock
until such time as the convertible security matures, is redeemed or
the holder elects to exercise the conversion privilege.
The value of convertible securities is influenced by both the yield of
nonconvertible securities of comparable issuers and by the value of a
convertible security viewed without regard to its conversion feature and is
generally referred to as its investment value. The investment value of the
convertible security will typically fluctuate inversely with changes in
prevailing interest rates.
However, at the same time, the convertible
security will be influenced by its conversion value, which is the market
value of the underlying common stock that would be obtained upon
conversion. Conversion value fluctuates directly with the price of the
underlying common stock.
By investing in convertible securities, a Fund obtains the right to benefit
from the capital appreciation potential in the underlying stock, upon
exercise of the conversion right, while earning higher current income than
would be available if the stock were purchased directly. In determining
whether to purchase a convertible security, the Advisor will consider
substantially the same criteria that would be considered in purchasing the
underlying stock. Convertible securities purchased by a Fund are
frequently rated investment grade. Convertible securities rated below
investment grade tend to be more sensitive to interest rate and economic
changes, may be obligations of issuers who are less creditworthy than
issuers of higher quality convertible securities and may be more thinly
traded due to such securities being less well known to investors than
either common stock or conventional debt securities.
*Yields on debt securities available for purchase by a Fund vary over time,
no specific yield on shares of a Fund can be assured.
<Page 4>
LENDING OF PORTFOLIO SECURITIES
Subject to certain restrictions (see section Information About The Funds), the
Balance Fund and the Intermediate Bond Fund may lend their portfolio securities
to broker-dealers and banks. Any such loan must be continuously secured by
collateral in cash or cash equivalents, maintained on a current basis, in an
amount at least equal to the market value of the securities loaned by these
funds. These funds would continue to receive the equivalent of the
interest or dividends paid by the issuer on the securities loaned and would
also receive an additional return that may be in the form of a fixed fee or
a percentage of the collateral. These funds would have the right to call
the loan and obtain the securities loaned at any time on notice of not more
than five business days. These funds would not have the right to vote the
securities during the existence of the loan but would call the loan to
permit voting of the securities if, in the Advisor's judgment, a material
event requiring a Shareholder's vote would otherwise occur before the loan
was repaid. In the event of bankruptcy or other default of the borrower,
these funds could experience delays in liquidating the loan collateral
and/or recovering the loaned securities and losses, including possible
decline in the value of the collateral or in the value of the securities
loaned during the period while seeking to enforce its rights thereto,
possible subnormal levels of income and lack of access to income during
this period and expenses of enforcing its rights.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES
The Balanced Fund, Intermediate Bond Fund and Government Money Market Fund
may purchase securities on a when-issued or delayed-delivery basis.
Although the payment and interest terms of these securities are established
at the time a fund enters into the commitment, the securities may be
delivered and paid for 30 days or more after the date of purchase, when
their value may have changed. A fund makes such commitments only with the
intention of actually acquiring the securities, but may sell the securities
before settlement date if the Advisor deems it advisable for investment
reasons. At the time a fund enters into a binding obligation to purchase
securities on a when-issued or delayed-delivery basis, assets of the fund
having a market value at least as great as the purchase price of the
securities to be purchased will be segregated on the books of the fund and
held by the custodian throughout the period of the obligation. The use of
this investment strategy may increase net asset value fluctuation.
REPURCHASE AGREEMENTS
A repurchase agreement is a sale of securities to a fund in which the
seller (a bank or broker-dealer believed by the Advisor to be financially
sound) agrees to repurchase the securities at a higher price, which
includes an amount representing interest on the purchase price, within a
specified time. In the event of a bankruptcy or other default of a seller
of a repurchase agreement, a fund could experience delays in both
liquidating the underlying securities and losses, including the possible
decline in the value of the collateral during the period while seeking to
enforce its rights thereto, possible below-normal levels of income and lack
of access to income during this period and expenses of enforcing its
rights.
OPTIONS ON SECURITIES AND INDICES
The Balanced Fund and the Intermediate Bond Fund may purchase and sell put
and call options on securities and indices, enter into interest rate and
index futures contracts and options on futures contracts.
An option on a security (or index) is a contract that gives the purchaser
(holder) of the option, in return for a premium, the right to buy from
(call), or sell to (put), the seller (writer) of the option the security
underlying the option (or the cash value of the index) at a specified
exercise price at any time during the term of the option (normally not
exceeding nine months). The writer of an option on an individual security
has the obligation upon exercise of the option to deliver the underlying
security upon payment of the exercise price or to pay the exercise price upon
delivery of the underlying security. Upon exercise, the writer of an option
<Page 5>
on an index is obligated to pay the difference between the cash value of the
index and the exercise price multiplied by the specific multiplier for the
index option. (An index is designed to reflect specific facets of a
particular financail or securities market, a specific group of financial
instruments or securities or certain economic indicators.)
A fund will write call options and put options only if they are "covered."
This means, in the case of a call option on a security, the option is
"covered" if a fund owns the security underlying the call or has an
absolute and immediate right to acquire that security without additional
cash consideration (or, if additional cash consideration is required,
assets having a value at least equal to that amount are held in a
segregated account by its custodian) upon conversion or exchange of other
securities held in its portfolio.
If an option written by a fund expires, the fund realizes a capital gain
equal to the premium received at the time the option was written. If an
option purchased by a fund expires, the fund realizes a capital loss equal
to the premium paid.
Prior to the earlier of exercise or expiration, an option may be closed out
by an offsetting purchase or sale of an option of the same series (type,
exchange, underlying security or index, exercise price and expiration).
There can be no assurance, however, that a closing purchase or sale
transaction can be affected when a fund elects to do so. A capital gain or
loss will be realized from a closing purchase transaction if the cost of
the closing option is less or more than the premium received from writing
the option. If the premium received from a closing sale transaction is
more or less than the premium paid to purchase the option, the fund will
realize a capital gain or loss. The principal factors affecting the market
value of a put or a call option include supply and demand, interest rates,
the current market price of the underlying security or index in relation to
the exercise price of the option, the volatility of the underlying security
or index and the time remaining until the expiration date.
A put or call option purchased by a fund is an asset of the fund, valued
initially at the premium paid for the option. The premium received for an
option written by a fund is recorded as a deferred credit. The value of an
option purchased or written is marked-to-market daily and is valued at the
closing price on the exchange on which it is traded or, if not traded on an
exchange or no closing price is available, at the mean between the last bid
and ask prices.
There are several risks associated with transactions in options. For
example, there are significant differences between the securities markets,
the currency markets and the options markets that could result in an
imperfect correlation between these markets causing a given transaction not
to achieve its objectives. A decision as to whether, when and how to use
options involves the exercise of skill and judgment and even a well-
conceived transaction may be unsuccessful to some degree because of market
behavior or expected events.
There can be no assurance that a liquid market will exist when a fund seeks
to close out an option position. If a fund were unable to close out an
option that it had purchased on a security, it would have to exercise the
option in order to realize any profit or the option would expire. If a
fund were unable to close out a covered call option that it had written on
a security, it would not be able to sell the underlying security until the
option expired. As the writer of a covered call option on a security a
fund foregoes, during the option's life, the opportunity to profit from
increases in the market value of the security covering the call option
above the sum of the premium and the exercise price of the call.
If trading were suspended in an option purchased or written by a fund, the
fund would not be able to close out the option. If restrictions on
exercise of options were imposed, a fund might be unable to exercise an
option it had purchased.
<Page 6>
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS
A fund may use interest rate futures contracts, index futures contracts and
options on such futures contracts. An interest rate, index or option on a
futures contract provides for the future sale by one party, and purchase by
another party, of a specified quantity of a financial instrument or the
cash value of an index at a specified price and time. A public market
exists in futures contracts covering a number of indices (including, but
not limited to, the S&P 500 Index, the Value Line Composite Index and the
New York Stock Exchange Composite Index) as well as financial instruments
(including, but not limited to U. S. Treasury bonds, U. S. Treasury notes,
Eurodollar certificates of deposit and foreign currencies). Other index
and financial instrument futures contracts are available and it is
expected that additional types of futures contracts will be developed and
traded.
A fund may purchase and write call and put futures options. Futures
options possess many of the same characteristics as options on securities
and indices, as discussed above. A futures option gives the holder the
right, in return for the premium paid, to assume a long position (call) or
short position (put) in a futures contract at a specified exercise price at
any time during the period of the option. Upon exercise of a call option,
the holder acquires a long position in the futures contract and the writer
is assigned the opposite short position. In the case of a put option, the
opposite is true. A fund may use futures contracts to hedge against, or
increase its exposure to, fluctuations in the general level of stock
prices, anticipated changes in interest rates or currency fluctuations that
might adversely affect either the value of a fund's securities or the price
of the securities that a fund intends to purchase. Although other
techniques may be used to reduce or increase a fund's exposure to stock
price, interest rate and currency fluctuations, a fund may be able to
achieve its desired exposure more efficiently and cost effectively by using
futures contracts and futures options.
A fund will only enter into futures contracts and futures options that are
standardized and traded on an exchange, Board of Trade or similar entity or
quoted on an automated quotation system. There are several risks
associated with the use of futures contracts and futures options. A
purchase or sale of a futures contract may result in losses in excess of
the amount invested in the futures contract. In trying to increase or
reduce market exposure, there can be no guarantee that there will be a
correlation between price movements in the futures contract and in the
portfolio exposure desired. In addition, there are significant differences
between the securities and futures markets that could result in an
imperfect correlation between the markets, causing a given transaction not
to achieve its objectives. The degree of imperfection of correlation
depends on circumstances such as variations in speculative market demand
for futures, futures options and the related securities, technical
influences in futures and futures options trading and differences between
the securities market and the securities underlying the standard contracts
available for trading. In the case of index futures contracts, for
example, the composition of the index including the issuers and the
weighting of each issue, may differ from the composition of a fund's
portfolio. In the case of interest rate futures contracts, the interest
rate levels, maturities and creditworthiness of the issues underlying the
futures contract may differ from the financial instruments held in a fund's
portfolio. A decision as to whether, when and how to use futures contracts
involves the exercise of skill and judgment and even a well-conceived
transaction may be unsuccessful to some degree because of market behavior
or unexpected stock price or interest rate trends.
Futures exchanges may limit the amount of fluctuation permitted in certain
futures contract prices during a single trading day. The daily limit
establishes the maximum amount that the price of a futures contract may
vary either up or down from the previous day's settlement price at the end
of the current trading session. Once the daily limit has been reached in a
futures contract subject to the limit, no more trades may be made on that
day at a price beyond that limit. The daily limit governs only price
movements during a particular trading day and therefore does not limit
potential losses because the daily limit may work to prevent the
liquidation of unfavorable positions. For example, futures prices have
occasionally moved to the daily limit for several consecutive trading days
with little or no trading, thereby preventing prompt liquidation of
positions and subjecting some holders of futures contracts to substantial
losses. Stock index futures contracts are not normally subject to such
daily price change limitations.
<Page 7>
There can be no assurance that a liquid market will exist at a time when a
fund seeks to close out a futures or futures option position. A fund may
be exposed to possible loss on a position during such an interval and would
continue to be required to meet margin requirements until the position was
closed. In addition, many of the types of contracts discussed above are
relatively new instruments with no significant trading history. As a
result, there can be no assurance that an active secondary market will
develop or continue to exist.
INVESTMENT RESTRICTIONS
The MONETTA FUND operates under the following investment restrictions:
1) The Fund will not issue any senior securities;
2) The Fund will not (i) sell securities short (unless the Fund owns an
equal amount of such securities or owns securities that are convertible
or exchangeable, without payment of further consideration, into an
equal amount of such securities), (ii) purchase securities on margin or
(iii) write put and call options;
3) The Fund will not borrow money in excess of 5% of the value of its
total assets, or pledge, mortgage or hypothecate its assets, at market
value, to an extent greater than 10% of the Fund's total assets at cost
(and no borrowing may be undertaken except from banks as a temporary
measure for extraordinary or emergency purposes);
4) The Fund will not invest more than 5% of its total assets in the
securities of any one issuer (this limitation shall not apply to
obligations issued or guaranteed by the United States Government, its
agencies and instrumentalities);
5) The Fund will not purchase the securities of companies in a particular
industry if, thereafter, more than 25% of the Fund's total assets would
consist of securities issued by companies in that industry (this
limitation shall not apply to obligations issued or guaranteed by the
United States Government, its agencies and instrumentalities);
6) The Fund will not acquire more than 10% of the outstanding voting
securities, or 10% of all of the securities, of any one issuer;
7) The Fund will not purchase the securities of any other investment
company;
8) The Fund will not purchase securities of any company with less than 3
years continuous operation (including that of any predecessor
companies) if such purchase would cause the Fund's investments in all
such companies, taken at cost, to exceed 5% of the value of the Fund's
total assets;
9) The Fund will not purchase or retain the securities of any issuer if
the Officers and Directors of the Fund, or its Advisor, own
individually more than 1/2 of 1% of the securities of such issuer or
together own more than 5% of the securities of such issuer;
10) The Fund will not act as securities underwriter, except to the extent
necessary in connection with the disposition of Fund shares, or invest
in real estate (although it may purchase shares of a real estate
investment trust) or invest in commodities, commodities contracts, or
financial futures contracts;
11) The Fund will not invest in companies for the purpose of exercising
control or management of such company;
12) The Fund will not invest in securities commonly referred to as
"restricted securities" which are required to be registered under the
Securities Act of 1933 before the securities can be resold to the
public;
<Page 8>
13) The Fund will not invest in repurchase agreements which mature in more
than seven days;
14) The Fund will not purchase shares which are not readily marketable;
15) The Fund will not make loans other than in accordance with the Fund's
investment objectives, including the purchase of a portion of an issue
of publicly distributed bonds, debentures or other securities, whether
or not the purchase was made upon the original issuance of the
securities.
Each of the restrictions noted above is "fundamental" which means that it
cannot be changed without the approval of a majority of the Fund's
outstanding voting securities.
THE TRUST AND EACH OF ITS SERIES OF FUNDS operate under the following
investment restrictions:
1) The Funds, except for the Government Money Market Fund, may not invest
more than 5% of its total assets (valued at the time of investment) in
securities of a single issuer, with respect to 75% of the value of a
Fund's total assets, except that this restriction does not apply to
U.S. Government Securities;
For the Government Money Market Fund, the fund may not invest more than
5% of its total assets (valued at the time of investment) in securities
of a single issuer, except that this restriction does not apply to (i)
U.S. Government Securities or (ii) repurchase agreements;
2) The Funds may not acquire securities of any one issuer, that at the
time of investment, represent more than 10% of the outstanding voting
securities of the issuer;
3) The Funds may not invest more than 25% of its total assets (valued at
the time of investment) in securities of companies in any one industry,
except that this restriction does not apply to U.S. Government
Securities or, for the Government Money Market Fund, to repurchase
agreements;
4) The Funds may not make loans, but this restriction shall not prevent
the funds from buying bonds, debentures or other debt obligations that
are publicly distributed or privately placed with financial
institutions, investing in repurchase agreements or lending portfolio
securities, provided that it may not lend securities if, as a result,
the aggregate value of all securities loaned would exceed 33% of its
total assets (taken at market value at the time of such loan*);
For the Government Money Market Fund, the above restriction shall not
prevent the Fund from purchasing U.S. Government Securities or entering
into repurchase agreements;
5) The Funds may not borrow money except from banks for temporary or
emergency purposes in amounts not exceeding 10% of the value of the
Fund's total assets at the time of borrowing, provided that the Fund
will not purchase additional securities when its borrowings exceed 5%
of total assets;
For the Balanced Fund and the Intermediate Bond Fund only, the funds may
not borrow money in connection with transactions for options, futures and
options on futures;
6) The Funds may not underwrite the distribution of securities of other
issuers except insofar as it maybe deemed to be an "underwriter" for
purposes of the Securities Act of 1933 on disposition of securities
subject to legal or contractual restrictions on resale;**
7) The Funds may not purchase and sell real estate or interests in real
estate, although the funds may invest in marketable securities of
enterprises that invest in real estate or interests in real estate;
8) The Funds may not purchase and sell commodities or commodity contracts,
except futures and options on futures;
<Page 9>
For the Balanced Fund and the Intermediate Bond Fund, these Funds may not
enter into any futures and options on futures;
9) The Funds may not make margin purchases of securities, except for use of
such short-term credits as are needed for clearance of transactions in
connection with transactions in options, futures, and options on futures;
For the Balanced Fund and the Intermediate Bond Fund, these Funds may not
make margin purchase of securities for contracts on option, futures and
options on futures;
10) The Funds may not sell securities short or maintain a short position,
except securities that the Fund owns or has the right to acquire without
payment of additional consideration;
11) The Funds may not issue any senior security except to the extent permitted
under the Investment Company Act of 1940.
Each of the above-noted restrictions are "fundamental." In addition, the
Small-Cap Fund, Mid-Cap Fund, Large-Cap Fund, Balanced Fund, Intermediate
Bond Fund and Government Money Market Fund are subject to a number of
restrictions that may be changed by the Board of Trustees of the Trust
without Shareholders' approval. Under these non-fundamental restrictions,
a fund may not:
1) Invest in companies for the purpose of management or the exercise of
control;
2) Invest more than 5% of its total assets (valued at time of investment)
in securities of issuers with less than three years' operation,
including any predecessors;
3) Acquire securities of other registered investment companies, except in
compliance with the Investment Company Act of 1940 and any applicable
state laws;
4) Invest more than 10% of its net assets (valued at the time of such
investment) in illiquid securities, including repurchase agreements
maturing in more than seven days.
*Although they have the power to do so, the Balanced Fund and the Intermediate
Bond Fund do not intend to lend portfolio securities.
**The Funds do not currently intend to invest in restricted securities.
<Page 10>
DIRECTORS, TRUSTEES AND OFFICERS
The following table lists the Board of Directors of the Monetta Fund and
Trustees of the Monetta Trust.
The individuals marked by an asterisk (*) are considered interested persons
(as defined in the Investment Company Act of 1940) as a result of their
affiliation with various entities, including the Monetta Fund, the Advisor
and the Monetta Trust.
The address for each Board member and Trustee listed below is 1776-A South
Naperville Road, Suite 100, Wheaton, IL 60187.
<TABLE>
<CAPTION>
Position(s)Position(s)
Held Held Principal Occupations
NAME AGE With Fund With Trust and Other Affiliations
<S> <C> <C> <C> <C>
Robert S. Bacarella* 50 Director Trustee Chairman, Chief Executive
and and Officer, and President of
President President MFSI since April 1997;
Chairman and Chief
Executive Officer of
MFSI, October 1, 1996,
to April 1997; President,
September 1996; Director,
MFSI, since 1984; Secretary,
Treasurer, and Director,
MIS LLC., (formerly Monetta
Brokerage,Inc.), 1987 to
1999; President and
Director, Fund since 1985;
President and Trustee,
Trust since 1993.
John W. Bakos* 52 Director Trustee Division Placement
Manager, Sears, Roebuck &
Co., since 1969; Director
and Vice President, MFSI,
1984 to 1991.
John L. Guy Jr. 47 Director Trustee President, First Union
Small Business Capital
since Nov. 1999;
President, Heller Small
Business Lending Corp.
(formerly Heller First
Capital Corp.), May 1995
to Nov. 1999; Senior Vice
President and Treasurer,
Heller Financial Inc.,
(August 1992 to May 1995);
Senior Vice President,
Director Internal Audit
(November 1989 to August
1992).
Mark F. Ogan 57 Director Trustee President, DuPage Capital
Management, Ltd., since
1995; President and
Secretary Salida Corp.
(formerly Pollenex Corp.),
February 1993 to April 1995.
<Page 11>
Paul W. Henry* 57 Director N/A SPR, Inc., Project Manager
Computer Systems, since June
1997; Manager, Financial
Systems, Signature Group
(Telemarketing),1994 to 1997;
Manager, Computer Systems,
Baah International (Computer
Software), December 1993 to
June 1994; Manager, Special
Projects, Waste Management,
Inc. (waste collection of
hazardous and chemical
waste materials),April 1987
to December 1993; Director
MFSI, 1984 to 1996, Vice
President, MFSI,
1984 to 1991.
William M. Valiant 74 N/A Trustee Director, MFSI, February
1991 to 1997; Director, MIS,
1988 to 1997; Vice President
and Treasurer, Borg-Warner
Corporation, retired,
July 1990.
William R. Bacarella 48 Vice Vice Vice President-Marketing
Pres. Pres. MFSI since Dec. 1999;
Vice Pres., Fund and Trust,
since May 1997; President,
MIS LLC (formerly Monetta
Brokerage, Inc.), June 1995
to Nov. 1999.
Maria Cesario DeNicolo* 50 CFO CFO Chief Financial Officer,
Treasurer Treasurer MFSI, since May 1997;
and and Secretary, MFSI, since
Secretary Secretary October 1996; Treasurer,
MFSI, since February 1994;
Controller, MFSI, since June
1992; Secretary, Trust, since
1993; Treasurer, Trust,
since 1994; Treasurer,
Fund, since 1993; Chief
Chief Financial Officer,
MIS LLC,(formerly Monetta
Brokerage,Inc.), 1995 to
1999; Sole proprietor,
Cesario DeNicolo CPA
and Associates, May 1990
to June 1993.
Christina M. Curtis 37 Asst. Asst. Asst. Secretary, Fund and
Secretary Secretary Trust since November, 1998;
Asst. Secretary, MFSI
since Octoer 1996.
</TABLE>
Mr. Bacarella and Mr. Bakos serve as members of the Executive Committee of the
Monetta Fund and Monetta Trust. The Executive Committee, which meet between
regular meetings of the respective Boards, are authorized to exercise all of
the Boards' powers.
None of the Directors or Trustees received or accrued any compensation such
as Pension or Retirement Benefits.
<Page 12>
The following table sets forth compensation paid by the Monetta Fund and the
Monetta Trust to their respective Directors and Trustees during the year
ended December 31, 1999:
<TABLE>
<CAPTION>
Pension or
Retirement Total Compen-
Benefits sation From
Aggregate Aggregate Accrued As Fund Complex
Compensation Compensation Part of Fund Paid to
Name of Person, Position From Fund From Trust Expenses Directors
<S> <C> <C> <C> <C>
Robert S. Bacarella,
Pres., Dir./Trustee(1) $N/A $N/A $0 $N/A
John W. Bakos,Director(1) 750 750 0 1,500
John L. Guy, Jr.,
Director/Trustee 2,250 2,250 0 4,500
Paul W. Henry,Director(1) 1,000 N/A 0 1,000
Mark F. Ogan,
Director/Trustee 2,250 2,250 0 4,500
William Valiant,Trustee N/A 2,000 0 2,000
</TABLE>
(1) Directors and/or Trustees who are interested persons, including
all employees of MFSI, receive no compensation from the Fund or the
Trust. Compensation reflected above is for the period of January
through December, 1999 and was paid by the Advisor.
(2) The Monetta Fund Complex consists of the Monetta Fund, Inc. and the
series of funds of the Monetta Trust. Neither the Monetta Fund nor
the Monetta Trust offers any retirement or deferred compensation
benefits to the members of the Boards of Directors.
SIGNIFICANT SHAREHOLDERS
At March 31, 2000, the Advisor and the Directors and Officers of the Monetta
Fund, as a group, owned 53,951 shares which represents less than 1% of the
issued and outstanding shares of common stock of the Monetta Fund. In
addition, the Funds are unaware of any shareholders, beneficial or of record,
who owned more than 5% of a Fund's outstanding shares as of that date.
Shares of the Trust owned by the Advisor, Trustees and Officers, as of
March 31, 2000, were as follows:
<TABLE>
<CAPTION>
Advisor,
Advisor Trustees & Officers
Shares % of Funds Shares % of Funds
<S> <C> <C> <C> <C>
Small-Cap Fund 18,092 7.70% 58,908 25.07%
Mid-Cap Fund 2,956 0.31% 62,250 6.61%
Large-Cap Fund 7,629 1.72% 19,811 4.47%
Balanced Fund 45,802 7.60% 117,476 19.49%
Intermediate Bond Fund 19,353 0.93% 69,232 3.31%
Government Money Market Fund 81,130 1.89% 185,063 4.31%
</TABLE>
The share ownership for the Trustees and Officers as a group includes the
following shares owned by the Advisor over which Mr. Bacarella exercises voting
control: 18,092 shares of the Small-Cap Fund; 2,956 shares of Mid-Cap Fund,
7,629 shares of the Large-Cap Fund; 45,802 shares of the Balanced Fund; 19,353
shares of the Intermediate Bond Fund; and 81,130 shares of the Government
Money Market Fund. The share ownership for the Trustees and Officers as a
group does includes the following shares held in a 401(k) Plan for the
employees of MFSI for which Mr. Bacarella is the Trustee of the plan and has
voting control: 1,856 shares of the Small-Cap Fund; 14,673 shares of the Mid-Cap
Fund; 3,591 shares of the Large-Cap Fund; 5,430 shares of the Balanced Fund;
692 shares of the Intermediate Bond Fund; and 44,235 shares of the Government
Money Market Fund.
Ownership of a significant percentage of the outstanding shares of the
Small-Cap Fund and the Balanced Fund reduces the number of other shares that
must be voted in accordance with the Advisor's vote to
<Page 13>
approve or disapprove any proposal requiring the approval of the Shareholders
of the Trust or of the Funds.
SERVICE PROVIDERS
The Funds utilize the services of various providers to conduct the daily
activities of the Funds. Each of the service providers described below
fulfills a specific function and is necessary to ensure the efficient operation
to the Funds.
INVESTMENT ADVISOR AND ADMINISTRATOR
The investment advisor and administrator for the Monetta Fund and Monetta Trust
is Monetta Financial Services, Inc., ("MFSI"). Under separate Investment
Advisory Agreements, dated November 10, 1988 and February 1, 1997 respectively,
the Advisor provides various services to the Monetta Fund and Monetta Trust. A
description of the responsibilities of the Advisor appears in the "Management"
section of the Prospectus.
Robert S. Bacarella owns 76.7% of the outstanding voting stock of the Advisor.
Paul W. Henry and John W. Bakos each own 2.2% of the outstanding voting stock of
the Advisor and Maria C. De Nicolo owns 1.1%.
For the services provided to the Funds, the advisor is paid a monthly fee based
on a percentage of the average net assets of each Fund. Investment management
fees paid by each Fund, for the fiscal years ended December 31, 1999, 1998 and
1997, are as follows:
INVESTMENT MANAGEMENT FEES
<TABLE>
<CAPTION>
FUND 1999 1998 1997
<S> <C> <C> <C>
Monetta Fund $1,042,862 $1,447,513 $1,664,886
Monetta Trust-
Mid-Cap Fund 121,868 155,677 153,402
Small-Cap Fund 26,028 25,563 6,627
Large-Cap Fund 46,642 30,387 28,120
Balanced Fund 37,454 58,089 33,561
Intermediate Bond Fund 44,893 16,513 11,485
Government Money Market Fund 10,257 11,772 13,868
</TABLE>
Investment management fees waived for the Intermediate Bond Fund and the
Government Money Market Fund, for the fiscal years ended December 31, 1999,
1998 and 1997, are as follows:
<TABLE>
<CAPTION>
__________Waived Fees___________
FUND 1999 1998 1997
<S> <C> <C> <C>
Intermediate Bond Fund $25,653 $9,430 $6,929
Government Money Market Fund 10,257 11,772 13,868
</TABLE>
In addition, custodian and transfer agent charges of $175, $330 and $1,235,for
the fiscal years ended December 31, 1999, 1998 and 1997, respectively, were
absorbed by the Advisor for the Government Money Market Fund.
<Page 14>
DISTRIBUTOR
The shares of each Fund are offered for sale on a continuous basis through
Funds Distributor, Inc., ("Distributor"), a registered broker-dealer, pursuant
to written Distribution Agreements with the Monetta Fund and the Monetta Trust.
Those agreements continue from year to year, provided such continuance is
approved annually (i) by a majority of the Board members or by a majority of
the outstanding voting securities of each Fund and (ii) by a majority
of the Board members who are not parties to the Agreements or interested
persons of any such party. There are no sales commissions or charges directly
to shareholders of the Funds. The fees and expenses of the Distributor are
paid (i) by each Fund Series of the Monetta Trust to the extent available
within the limits of the Distribution and Service Plan (12b-1 plan) and (ii) to
the extent Fund assets are not available under the Plan, by the Advisor.
For the Monetta Fund, the Advisor pays all the fees and expenses of the
Distributor.
As agent, the Distributor offers shares of each Fund to investors at net asset
value, without sales commissions or other sales load. The Distributor offers
the Funds' shares only on a best-efforts basis.
The Distributor's principal business location is 60 State Street, Suite 1300,
Boston, MA 02109.
TRANSFER AGENT AND CUSTODIAN
Firstar Mutual Funds Services, LLC, 615 East Michigan Street, 3rd Floor,
Milwaukee, Wisconsin 53202, acts as the transfer agent and Firstar Bank,
Milwaukee, N.A. (same location) is the custodian for the Funds. It is
responsible for holding all securities and cash of the Funds, receiving and
paying for securities purchased, delivering against payment securities sold,
receiving and collecting income from investments, making all payments covering
expenses of the Funds and performing other administrative duties, all as
directed by authorized persons of the Funds. The custodian does not exercise
any supervisory function in such matters as purchase and sale of portfolio
securities, payment of dividends, or payment of expenses of the Funds. The
Funds have authorized the custodian to deposit certain portfolio securities in
central depository systems as permitted under federal law. The Funds may
invest in obligations of the custodian and may purchase from or sell
securities to the custodian.
LEGAL COUNSEL
The legal counsel for the Monetta Fund and the Monetta Trust is Sonnenschein
Nath & Rosenthal, 8000 Sears Towers, Chicago, Illinois 60606.
INDEPENDENT AUDITORS
The independent auditors for the Funds are KPMG LLP, 303 East
Wacker Drive, Chicago, Illinois 60601. The independent auditors report on the
Funds' annual financial statements, review certain regulatory
reports and the Fund's income tax returns and perform other professional
accounting, auditing, tax and business advisory services when engaged to do
so by the Funds.
<Page 15>
RULE 12B-1 PLAN
Effective February 1, 1997, the Monetta Trust adopted a Service and
Distribution Plan ("12b-1 Plan") pursuant to Rule 12b-1 under the 1940
Investment Company Act. The maximum aggregate amount a fund may pay for
service fees and other distribution related expenses, as a percentage of the
Fund's average net assets, is as follows:
<TABLE>
<CAPTION>
FUND % OF COMPENSATION
<S> <C>
Small-Cap Fund .0025%
Mid-Cap Fund .0025%
Large-Cap Fund .0025%
Balanced Fund .0025%
Intermediate Bond Fund .0025%
Government Money Market Fund .0010%
</TABLE>
Any excess fees and or expenses incurred, for such service and distribution
activities, may be paid directly by the Advisor.
The principal types of activities, for which 12b-1 payments have been made
and/or incurred, for the Monetta Trust, during the fiscal year ended December
31, 1999, are as follows:
<TABLE>
<CAPTION>
Small-Cap Mid-Cap Large-Cap Balance Bond
Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C>
Advertising $0 $16,873 $0 $0 $0
Printing and mailing
of Prospectus to other
than current shareholders 0 0 0 0 0
Compensation to personnel 0 0 0 0 0
Compensation to Broker-Dealers 3,458 6,104 3,206 9,549 27,544
Compensation to Sales Personnel 0 0 0 0 0
Other-State registration
filing fees 385 7,070 6,676 8,194 242
Other-Distributor charges 0 4,911 0 0 0
</TABLE>
The 12b-1 Plan will continue in effect only so long as it is approved, at least
annually, and any material amendment or agreement related thereto is approved
by the Trust's Board of Trustees, including those Trustees who are not
"interested persons" of the Trust and who have no direct or indirect financial
interest in the operation of the 12b-1 Plan or any agreement related to the
12b-1 Plan ("Qualified Trustees") acting in person at a meeting called for that
purpose, unless terminated by vote of a majority of the Qualified Trustees, or
by vote of a majority of the outstanding voting securities of a Fund.
It is the opinion of the Board of Trustees that the 12b-1 Plan is necessary to
maintain a flow of subscriptions to offset redemptions and to encourage sales
of shares to permit the Funds to reach an economically viable size.
Redemptions of mutual fund shares are inevitable. If redemptions are not
offset by subscriptions, a fund shrinks in size and its ability to maintain
quality Shareholder services declines. Eventually, redemptions could cause a
fund to become uneconomic. Furthermore, an extended period of significant net
redemptions may be detrimental to the orderly management of the portfolio. The
offsetting of redemptions through sales efforts benefits shareholders by
maintaining the viability of a fund. Additional
benefits may accrue from net sales of shares relative to portfolio
management and increased shareholder servicing capability. Increased
assets enable a fund to further diversify its portfolio, which spreads
and reduces investment risk while increasing opportunity. In addition,
increased assets enable the establishment and maintenance of a better
shareholder servicing staff which can respond more effectively and promptly
to shareholder's inquiries and needs.
<Page 16>
BROKERAGE ALLOCATION
The Advisor has discretion to select brokers, dealers and market, to execute
portfolio transactions. The main objective is to seek the best
combination of net price and execution for the Funds. When executing
transactions for the Funds, the Advisor will consider all factors it deems
relevant, including the breadth of the market in the security, the price of
the security, the financial condition and execution capability of the broker or
dealer and the reasonableness of the commission. Transactions of the Funds in
the over-the-counter market are executed with primary market makers acting as
principal except where it is believed that better prices and execution may be
obtained otherwise.
All securities transactions, of the Intermediate Bond Fund and the Government
Money Market Fund, in 1999, 1998 and 1997, respectively, were executed on a
principal basis. That is to say, a mark-up or mark-down was taken by the broker
rather than charge a separate commission.
In selecting brokers or dealers to execute particular transactions and in
evaluating the best net price and execution available, the Advisor is
authorized to consider "brokerage and research services" (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934), statistical
quotations (specifically the quotations necessary to determine the Funds' asset
values) and other information provided to the Funds or the Advisor. The
Advisor is also authorized to cause the Funds to pay a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction. The
Advisor must determine in good faith, however, that such commission was
reasonable in relation to the value of the brokerage and research services
provided, viewed in terms of that particular transaction or in terms of all the
accounts over which the Advisor exercises investment discretion. It is
possible that certain of the services received by the Advisor attributable to a
particular transaction will benefit one or more other accounts for which
investment discretion is exercised by the Advisor.
In valuing research services, the Advisor makes a judgment of the usefulness of
research and other information provided by a broker to the Advisor in managing
the Funds' investment portfolios. In some cases, such information, including
data or recommendations concerning particular securities, relates to the
specific transaction placed with the broker. In general, however, the research
consists of a wide variety of information concerning companies, industries,
investment strategy and economic, financial and political conditions and
prospects useful to the Advisor in advising the Funds.
The Advisor is the principal source of information and advice to the Funds and
is responsible for making and initiating the execution of investment decisions
by the Funds. However, the respective Boards recognize that it is important
for the Advisor, in performing its responsibilities to the Funds, to continue
to receive and evaluate the broad spectrum of economic and financial
information that many securities brokers have customarily furnished in
connection with brokerage transactions. In compensating brokers for their
services, it is in the interest of the Funds to take into account the value of
the information received for use in advising the Funds. The extent, if any, to
which the obtaining of such information may reduce the expenses of the Advisor
in providing management services to the Funds is not determinable. In
addition, it is understood by the respective Boards that other clients of the
Advisor might also benefit from the information obtained for the Funds, in the
same manner that the Funds might also benefit from the information obtained by
the Advisor in performing services for others.
Although investment decisions for the Funds are made independently from those
for other investment advisory clients of the Advisor, it may develop that the
same investment decision is made for a Fund and one or more other advisory
clients. If a Fund and other clients purchase or sell the same class of
securities on the same day, the transactions will be
allocated as to amount and price in a manner considered equitable to each.
MFSI and its affiliates, Officers, Directors and employees may, from time to
time, have long or short positions in, and buy or sell, the securities or
derivatives of companies held, purchased or sold by individual clients or the
funds. MFSI has adopted guidelines to avoid any conflict of interest between
the interests of
<Page 17>
Monetta Trust, Monetta Fund, individually managed accounts,
affiliates, Officers, Directors and employees. In any situation where the
potential for conflict exists, transactions for the Funds and individual
clients take precedence over any Advisor or affiliate transactions. Guidelines
include a restriction on trading in any security which the Advisor knows, or
has reason to believe, is being purchased or sold or considered for purchase or
sale by a mutual fund or individual client until these transactions have been
completed or considered abandoned. Initial public offerings are allocated only
to the Advisor's mutual fund clients.
The Board of Directors of Monetta Fund and the Board of Trustees of the Monetta
Trust have each determined that portfolio brokerage transactions for their
respective Funds may be executed through MIS if, in the judgment of the
Advisor, the use of MIS is likely to result in prices and execution at least as
favorable to the Fund as those available from other qualified brokers and if,
in such transaction, MIS charges the Fund commission rates consistent with
those charged by MIS to comparable unaffiliated customers in similar
transactions. The Board of Directors of Monetta Fund and Monetta Trust,
including a majority of the Directors and Trustees who are not "interested"
Directors and Trustees, have each adopted procedures which are reasonably
designed to provide that any commissions, fees or other remuneration paid to
MIS are consistent with the foregoing standard. The Funds will not affect
principal transactions with MIS.
For the fiscal years ended December 31, 1999, 1998 and 1997, aggregate
brokerage commissions of each Fund were as follows:
<TABLE>
<CAPTION>
FUND 1999 1998 1997
<S> <C> <C> <C>
Monetta Fund $717,850 $561,819 $418,742
Monetta Trust-
Small-Cap Fund 30,190 19,865 8,172
Mid-Cap Fund 76,310 173,989 78,449
Large-Cap Fund 8,776 20,956 10,537
Balanced Fund 13,127 48,918 24,205
</TABLE>
Of the aggregate broker commissions paid by the Funds for the fiscal years ended
December 31, 1999, 1998 and 1997, the following amounts were paid to MIS:
<TABLE>
<CAPTION>
1999 1998 1997
COMMISSIONS COMMISSIONS COMMISSIONS
% OF %OF % OF
AMOUNT TOTAL AMOUNT TOTAL AMOUNT TOTAL
<S> <C> <C> <C> <C> <C> <C>
Monetta Fund $ 660 .1% $22,650 4.0% $7,750 1.9%
Monetta Trust-
Small-Cap Fund 0 .0% 800 4.0% 0 0.0%
Mid-Cap Fund 4,725 6.2% 16,200 9.3% 750 1.0%
Large-Cap Fund 0 .0% 900 4.3% 50 0.5%
Balanced Fund 200 1.5% 4,530 9.3% 100 0.4%
</TABLE>
<Page 18>
CAPITAL STOCK AND OTHER SECURITIES
. MONETTA FUND
The Fund has one class of capital stock, $0.01 par value. Each full share is
entitled to one vote and to participate equally in dividends and distributions
declared by the Fund (fractional shares have the same rights, proportionally,
as full shares). Fund shares are fully paid and non-assessable when issued and
have no pre-emptive, conversion or exchange rights. The obligations and
liabilities associated with ownership, or shares, in the Fund are limited to
the extent of the shareholder's investment in the Fund. Voting rights are non-
cumulative so that the holders of more than 50% of the shares voting in any
election may, if they so choose, to elect all of the Directors of the Fund.
. MONETTA TRUST
Under the terms of the Trust's agreement and Declaration of Trust ("Declaration
of Trust"), the Trustees may issue an unlimited number of shares of beneficial
interest without par value for each series of shares authorized by the
Trustees. All shares issued are fully paid and non-assessable when issued and
have no pre-emptive, conversion or exchange rights.
Each Fund's shares are entitled to participate pro-rata in any dividends and
other distributions declared by the Board of Trustees with respect to shares of
that Fund. All shares of a Fund have equal rights in the event of liquidation
of that Fund.
Under Massachusetts law, the shareholders of the Trust may, under certain
circumstances, be held personally liable for the Trust's obligations. However,
the Declaration of Trust disclaims liability of the Shareholders, Trustees and
Officers of the Trust for acts or obligations, of any Fund, which are binding
only on the assets and property of that Fund. The Declaration of Trust
requires that notice of such disclaimer be given in each agreement, obligation
or contract entered into or executed by the Trust of the Board of Trustees.
The Declaration of Trust provides for indemnification out of a Fund's assets of
all losses and expenses of any Fund shareholder held personally liable for the
Fund's obligations. Thus, the risk of a shareholder incurring financial loss
on account of shareholder liability is remote, since it is limited to
circumstances in which the disclaimer is inoperative and the Fund itself is
unable to meet its obligations. The risk of a particular Fund incurring
financial loss as a result of an unsatisfied liability of another Fund of the
Trust is also believed to be remote since it would also be limited to claims to
which the disclaimer did not apply and to circumstances in which the other Fund
was unable to meet its obligations.
Each share has one vote and fractional shares have fractional votes. As a
business trust, the Trust is not required to hold annual shareholder meetings.
However, special meetings may be called for purposes such as electing or
removing Trustees, changing fundamental investment policies or approving an
investment advisory agreement. On any matters submitted to a vote of
Shareholders, shares are voted by individual series and not in the aggregate,
except when voting in the aggregate is required by the 1940 Investment Company
Act or other applicable laws. Shares of a Fund are not entitled to vote on any
matter not affecting that Fund. All shares of the Trust vote together in the
election of Trustees.
The Trustees serve indefinite terms of unlimited duration. The Trustees
appoint their own successors, provided that at least two-thirds of the
Trustees, after any such appointment, have been elected by the Shareholders.
Shareholders may remove a trustee, with or without cause, upon the declaration
in writing or vote of the two-thirds of the outstanding shares of the Trust. A
trustee may be removed with our without cause upon the written declaration of a
majority of the Trustees.
<Page 19>
SHAREHOLDER SERVICES
BUYING AND SELLING SHARES
Detailed information regarding the purchase, redemption and exchange of Fund
shares is contained in the Funds' Prospectus, which is available free of charge
by calling our toll-free number (1-800-MONETTA).
The Funds reserve the right to suspend or postpone redemptions of shares of any
Fund during any period when (a) trading on the New York Stock Exchange ("NYSE")
is restricted, as determined by the Securities and Exchange Commission ("SEC"),
or the NYSE is closed for other than customary weekend and holiday closings,
(b) the SEC has by order permitted such suspension or (c) an emergency, as
determined by the SEC, exists making disposal of portfolio securities or
valuation of net assets of such Fund not reasonably practicable.
The Monetta Fund and the Monetta Trust have each elected to be governed by Rule
18f-1, under the 1940 Investment Company Act, pursuant to which it is obligated
to redeem shares of each Fund solely in cash up to the lesser of $250,000 or 1%
of the net asset value of that Fund during any 90-day period for any one
shareholder. Redemptions in excess of the above amounts will normally be paid
in cash but may be paid wholly or partly by a distribution of securities in
kind.
VALUATION OF FUNDS' SHARES
Each Fund's net asset value is determined on days on which the NYSE is open for
trading. The NYSE is regularly closed on Saturdays and Sundays and on New
Year's Day, the third Monday in January, the third Monday in February, Good
Friday, the last Monday in May, Independence Day, Labor Day, Thanksgiving and
Christmas. If one of these holidays falls on a Saturday or Sunday, the
Exchange will be closed on the preceding Friday or the following Monday,
respectively.
For purposes of calculating the net asset value per share, the assets of the
Fund are valued as follows:
1) VALUATION - Securities for which market quotations are readily available at
the time of valuation are valued on that basis. Each security traded on a
national stock exchange or on the Nasdaq National Market is valued at its last
sale price on that day or, if there are no sales that day, at the mean of the
latest bid and ask quotations. All other over-the-counter securities for which
reliable quotations are available are valued at the mean of the latest bid and
ask quotations. Long-term straight-debt securities for which market quotations
are not readily available are valued at a fair value based on valuations
provided by pricing services approved by the Board, which may employ electronic
data processing techniques, including a matrix system, to determine valuations.
Short-term debt securities for which market quotations are not readily
available are valued by use of a matrix prepared by the Advisor based on
quotations for comparable securities. Other assets and securities held by a
Fund for which these valuation methods do not produce a fair value are valued
by a method that the Board believes will determine a fair value.
2) VALUATION OF GOVERNMENT MONEY MARKET FUND - Government Money Market Fund
values its portfolio by the "amortized cost method" by which it attempts to
maintain its net asset value at $1.00 per share. This involves valuing an
instrument at its cost and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of the impact of fluctuating
interest rates on the market value of the instrument. Although this method
provides certainty in valuation, it may result in periods during which value,
as determined by amortized cost, is higher or lower than the price the Fund
would receive if it sold the instrument. Other assets are valued at a fair
value determined in good faith by the Board of Trustees.
In connection with the Government Money Market Fund's use of amortized cost and
the maintenance of the Fund's per-share net asset value of $1.00, the Trust has
agreed (i) to seek to maintain a dollar-weighted average portfolio maturity
appropriate to the Fund's objective of maintaining relative stability of
principal and not in excess of 90 days, (ii) not to purchase a portfolio
instrument with a remaining maturity of greater than thirteen months and (iii)
to limit its purchase of portfolio instruments to those instruments
<Page 20>
that are denominated in U.S. dollars which the Board of Trustees determines
represent minimal credit risks and that are of eligible quality as determined
by any major rating service as defined under SEC Rule 2a-7 or, in the case of
any instrument that is not rated, of comparable quality as determined by the
Board of Directors.
The Trust has established procedures reasonably designed to stabilize the
Fund's price per share as computed for the purpose of sales and redemptions at
$1.00. Those procedures include review of the Fund's portfolio holdings by the
Board of Trustees at such intervals as it deems appropriate to determine
whether the Fund's net asset values calculated by using available market
quotations or market equivalents deviate from $1.00 per share based on
amortized cost. Calculations are made to compare the value of its investments
valued at amortized cost with market value. Market values are obtained by
using actual quotations provided by market makers, estimates of market value,
values from yield data obtained from the Advisor's matrix or values obtained
from an independent pricing service. Any such service may value the Fund's
investments based on methods which include consideration of yields or prices of
securities of comparable quality, coupon, maturity and type, indications as to
values from dealers and general market conditions. The service may also employ
electronic data processing techniques, a matrix system or both to determine
valuations.
In connection with the Fund's use of the amortized cost method of portfolio
valuation to maintain its net asset value at $1.00 per share, the Fund might
incur or anticipate an unusual expense, loss, depreciation, gain or
appreciation that would affect its net asset value per share or income for a
particular period. The extent of any deviation between the Fund's net asset
value based upon available market quotations or market equivalents and $1.00
per share based on amortized cost will be examined by the Board of Trustees as
it deems appropriate. If such deviation exceeds 1/2 of 1%, the Board of
Trustees will promptly consider what action, if any, should be initiated. In
the event the Board of Trustees determines that a deviation exists that may
result in material dilution or other unfair results to investors or existing
shareholders, it will take such action as it considers appropriate to eliminate
or reduce, to the extent reasonably practicable, such dilution or unfair
results. Actions which the Board might take include (i) selling portfolio
instruments prior to maturity to realize capital gains or losses (ii) shorten
average portfolio maturity (iii) increasing, reducing, or suspending dividends
or distributions from capital or capital gains or (iv) redeeming shares in
kind. The Board might also establish a net asset value per share by using
market values, which may result in a deviation of net asset value from $1.00 per
share.
TAXATION OF THE FUNDS
Each Fund intends to continue to qualify as a "regulated investment company"
under Subchapter M of the Internal Revenue Code of 1986 (the "Code"), as
amended. Such qualification exempts the Funds from federal income taxes to the
extent that is distributes substantially all of its net investment income and
net realized capital gains to the shareholders.
PERFORMANCE INFORMATION
YIELD
The Balanced Fund and Intermediate Bond Fund may quote yield figures from time
to time. Yield is computed by dividing the net investment income per share
earned during a 30-day period (using the
average number of shares entitled to receive dividends) by the net asset
value per share on the last day of the period. The Yield formula
provides for semiannual compounding which assumes that net investment income
is earned and reinvested at a constant rate and annualized at the end of
a six-month period.
The Yield formula is as follows:
YIELD = 2(((a-b/cd) + 1) - 1)
a = dividends and interest earned during the period (for
this purpose, the
<Page 21>
Fund will recalculate the yield to
maturity based on market value of each portfolio security
on each business day on which net asset value is
calculated);
b = expenses accrued for the period (net of reimbursements);
c = the average daily number of shares outstanding during
the period that were entitled to receive dividends;
d = the net asset value of the Fund.
The Intermediate Bond Fund's yield for the 30 days ended December 31, 1999, was
6.71%.
CURRENT OR EFFECTIVE YIELD
The Government Money Market Fund may quote a "Current Yield" or "Effective
Yield", or both, from time to time. The Current Yield is an annualized yield
based on the actual total return for a seven-day period. The Effective Yield
is an annualized yield based on a daily compounding of the Current Yield.
These yields are each computed by first determining the "Net Change in Account
Value" for a hypothetical account having a share balance of one share at the
beginning of a seven-day period ("Beginning Account Value"), excluding capital
changes. The Net Change in Account Value will always equal the total dividends
declared with respect to the account, assuming a constant net asset value of
$1.00.
The Yields are then computed as follows:
Current Yield = Net Change in Account Value X 365
--------------------------- ---
Beginning Account Value 7
Effective Yield = (1 + Net Change in Account Value) 365/7 - 1
---------------------------------
Beginning Account Value
In addition to fluctuations reflecting changes in net income of the Fund
resulting from changes in income earned on its portfolio securities and in its
expenses, the Fund's yield also would be affected if the Fund were to restrict
or supplement its dividends in order to maintain its net asset value at $1.00
(see "Shareholder Information" in the Prospectus and "Valuation of Fund Shares"
herein). Portfolio changes resulting from net purchases or net redemptions of
Fund shares may affect yield. Accordingly, the Fund's yield may vary from day
to day and the yield stated for a particular past period is not a
representation as to its future yield. The Fund's yield is not assured, and
its principal is not insured, however, the Fund will attempt to maintain its
net asset value per share at $1.00.
For the seven days ended December 31, 1999, the Government Money Market Fund's
current seven-day yield was 5.23% and the effective yield was 5.37%.
TOTAL RETURN
From time to time, each Fund may give information about its performance by
quoting figures in advertisements and sales literature. "Average Annual Total
Return" is the average annual compounded rate of change in value represented by
the total return percentage for the period.
Average Annual Total Return is computed as follows:
ERV = P(1+T)n
P = the amount of an assumed initial investment of $1,000 in Fund
shares;
<Page 22>
T = average annual total return;
n = number of years from initial investment to the end of the period
ERV = ending redeemable value of $1,000 investment held until the
end of such period.
ADVERTISING INFORMATION
In advertising and sales literature, a Fund may compare its yield and
performance with that of other mutual funds, indices or averages of other
mutual funds, indices of related financial assets or data and other competing
investment and deposit products available from or through other financial
institutions. The composition of these indices or averages differs from that of
the Funds. Comparison of a Fund to an alternative investment should be made
with consideration of differences in features and expected performance.
All of the indices and averages used will be obtained from the indicated
sources or reporting services, which the Funds believe to be generally
accurate. A Fund may also note its mention in newspapers, magazines or other
media from time to time. However, the Funds assume no responsibility for the
accuracy of such data. Newspapers and magazines which might mention a Fund
include, but are not limited to, the following:
Business Week Los Angeles Times
Changing Times Money
Chicago Tribune Mutual Fund Letter
Chicago Sun-Times Morningstar
Crain's Chicago Business Newsweek
Consumer Reports The New York Times
Consumer Digest Pensions and Investment
Financial World Personal Investor
Forbes Stanger Reports
Fortune Time
Investor's Daily USA Today
Kiplinger's U.S. News and World Report
L/G No-Load Fund Analyst The Wall Street Journal
When a newspaper, magazine, or other publication mentions the Fund,
such mention may include (i) listings of some or all of the Fund's holdings,
(ii) descriptions of characteristics of some or all of the securities held by
the Fund, including price-earnings ratios, earnings, growth rates and other
statistical information and comparisons of that information to similar
statistics for the securities comprising any of the indices or averages
listed above and (iii) descriptions of the Fund's or a portfolio manager's
economic and market outlook.
A Fund's performance is a result of conditions in the securities markets,
portfolio management and operating expenses. Although information such as
that described above may be useful in reviewing a Fund's performance and in
providing some basis for comparison with other investment alternatives, it
is not necessarily indicative of future performance and should not be used
for comparison with other investments using different reinvestment
assumptions or time periods.
The Funds may also compare their performances to various stock indices
(groups of unmanaged common stocks), including Standard & Poor's 500 Stock
Index, the Value Line Composite Average the Russell Indices, the Nasdaq
Composite Index, the Dow Jones Industrial Average or to the Consumer Price
Index or groups of comparable mutual funds, including rankings determined by
Lipper Analytical Services, Inc. (an independent service that monitors the
performance of over 1,000 mutual funds), Morningstar, Inc. or that of any
other service.
The Funds may also cite its ranking, recognition or other mention by
Morningstar. Morningstar's ranking system is based on risk-adjusted total
return performance and is expressed in a star-rated format. The
<Page 23>
risk-adjusted number is computed by subtracting a fund's risk score (which is
a function of the fund's monthly return less the 3-month Treasury bill return)
from the fund's load-adjusted total return score. This numerical score is then
translated into ranking categories, with the top 10% labeled five star,
the next 22.5% labeled four star, the next 35% labeled three star, and next
22.5% labeled two star, and the bottom 10% one star. A high ranking
reflects either above-average performance or below-average risk or both.
FINANCIAL STATEMENTS
The financial statements for the Fund and Trust, including the Statement of
Assets and Liabilities and the Statement of Operations for the fiscal year
ended December 31, 1999, and the Statements of Changes in Net Assets for the
fiscal years ended December 31, 1999, and 1998, are included in the Monetta
Family of Mutual Funds Annual Report to shareholders for the fiscal year
ended December 31, 1999. Also included in the Annual Report are the financial
highlights for the Fund and the Trust, each such Annual Report is
incorporated herein by reference. You may receive copies of the reports
without charge by calling 1-800-MONETTA.
APPENDIX I - FIXED INCOME SECURITIES RATINGS
GENERAL RATINGS INFORMATION
A rating by a rating service represents the service's opinion as to the
credit quality of the security being rated. However, the ratings are general
and are not absolute standards of quality or guarantees as to the
credit-worthiness of an issuer. Consequently, the Advisor believes that the
quality of debt securities in which the Fund invests should be continuously
reviewed and that individual analysts give different weightings to the
various factors involved in credit analysis. A rating is not a
recommendation to purchase, sell or hold a security, because it does not
take into account market value or suitability for a particular investor.
When a security has received a rating from more than one service, each rating
should be evaluated independently. Ratings are based on current information
furnished by the issuer or obtained by the rating services from other
sources which they consider reliable. Rating may be changed, suspended or
withdrawn as a result of changes in, or unavailability of, such information
or for other reasons. The following is a description of the characteristics
of rating used by Moody's and S&P.
BOND RATINGS
Ratings by Moody's
Bonds rated Aaa are judged to be the best quality. They carry the smallest
degree of investment risk and are generally referred to as "gilt edge."
Interest payments are protected by a large or an exceptionally stable margin
and principal is secure. Although the various protective elements are likely
to change, such changes are not likely to impair the fundamentally strong
position of such bonds.
Bonds rated Aa are judged to be of high quality by all standards. Together
with the Aaa group, they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of
protections may not be as large as in the Aaa Bonds, fluctuation of
protective elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat larger than
in Aaa bonds.
Bonds rated A possess many favorable investment attributes and are to be
considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Bonds rated Baa are considered as medium grade obligations (i.e., they are
neither highly protected nor poorly secured). Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any
great length of time.
<Page 24>
Such bonds lack outstanding investment characteristics
and, in fact, have speculative characteristics as well.
Bonds rated Ba are judged to have speculative elements and their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded
during future periods of significant economic change. Uncertainty of position
characterizes bonds in this class.
Bonds rated B generally lack characteristics of a desirable investment.
Assurance of interest and principal payments or of maintenance of other
terms of the contract over any length of time, may be minimal.
Bonds rated Caa are of poor quality. Such issues may be in default or there
may be present negative elements with respect to principal or interest.
NOTE: Moody's applies numerical modifiers 1, 2, and 3 in each of these
generic rating classifications in its corporate bond rating systems. The
modifier 1 indicates that the security ranks in the higher end of its
generic rating category.
RATINGS BY STANDARD AND POOR'S
Debt rated AAA has the highest rating available. Ability to pay interest
and repay principal is extremely strong.
Debt rated AA has a very strong ability to pay interest and repay principal
and differs only minimally from the highest rated issues.
Debt rated A has a strong ability to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes
in economic conditions than debt in higher rated categories.
Debt rated BBB is regarded as having an adequate ability to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions are more likely to lead to a
weakened ability to pay interest and repay principal for debt in this
category than for debt in higher rated categories.
Bonds rated BB, B, and CC are regarded, on balance, as predominantly
speculative with respect to the issuer's capacity to pay interest and repay
principal in accordance with the terms of the obligations. While such bonds
will likely have some quality and protective characteristics, these are
outweighed by large uncertainties and major risk exposures to adverse
conditions.
NOTE: These ratings may be modified by the addition of a plus (+)
or minus (-) sign to show relative standing within the major rating
categories.
Commercial Paper Ratings
Ratings by Moody's
The rating Prime-1 (P-1) is the highest commercial paper rating assigned by
Moody's. Among the factors considered by Moody's in assigning ratings are
the following:
(1) evaluation of the management of the issuer;
(2) economic evaluation of the issuer's industry or industries and an
appraisal of speculative type risks which may be inherent in certain
areas;
(3) evaluation of the issuer's products in relation to competition and
customer acceptance;
<Page 25>
(4) liquidity;
(5) amount and quality of long-term debt;
(6) trend of earnings over a period of ten years;
(7) financial strength of a parent company and the relationships which
exist with the issuer;
(8) recognition by the management of obligations which may be present or
may arise as a result of public interest questions and preparations to
meet such obligations.
These factors are all considered in determining whether the commercial paper
is rated P-2 or P-3.
RATINGS BY STANDARD & POOR'S
The rating A-1+ is the highest, and A-1 the second highest, commercial paper
rating assigned by S&P. Paper rated A-1+ must have either the direct credit
support of an issuer or guarantor that possesses excellent long-term
operating and financial strengths combined with strong liquidity
characteristics (typically, such issuers or guarantors would display credit
quality characteristics which would warrant a senior bond rating of AA or
higher) or the direct credit support of an issuer or guarantor that possess
above average long-term fundamental operating and financing capabilities
combined with ongoing excellent liquidity characteristics.
Paper rated A-1 must have the following characteristics:
1) liquidity ratios are adequate to meet cash requirements,
2) long-term senior debt is rated A or better,
3) the issuer has access to at least two additional channels of borrowing,
4) basic earnings and cash flow have an upward trend with allowances made
for unusual circumstances. Typically, the issuer's industry is well
established and the issuer has a strong position within the industry and
the reliability and quality of management are unquestioned.
Relative strength or weakness of the above factors determines whether the
issuer's commercial paper is rated A-2 or A-3.
<Page 26>
Monetta Family
Of Mutual Funds
No-Load
Monetta Fund
Monetta Trust
Small-Cap Equity Fund
Mid-Cap Equity Fund
Large-Cap Equity Fund
Balanced Fund
Intermediate Bond Fund
Government Money
Market Fund
1-800-MONETTA
WWW.MONETTA.COM
LOGO APPEARS HERE
Annual Report
December 31, 1999
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
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
Schedule of Investments
Monetta Fund 11
Monetta Small-Cap Equity Fund 14
Monetta Mid-Cap Equity Fund 15
Monetta Large-Cap Equity Fund 17
Monetta Balanced Fund 18
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
Independent Auditors' Report 31
</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 lose money by investing in the
Fund.
Excluding the Government Money Market Fund, the Monetta Funds, at the
discretion of the Portfolio Manager, may invest in Initial Public Offerings
(IPO's) which may significantly impact their performance. Due to the
speculative nature of IPO's, there can be no assurance that IPO participation
will continue and that IPO's will have a positive effect on Funds' performance.
References to individual securities are the views of the Advisor at the date
of this report and are subject to 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.
<Page2>
January 18, 2000
Dear Fellow Shareholders:
We are very pleased with our Funds' performance last year. All of the Fund's
returns exceeded their respective indices as we focused on investing in
industry leaders and companies that could benefit from the technology
revolution.
Last year's investment performance was dominated by the internet-driven
technology companies. Investors were fascinated with the communication
revolution and new money inflows poured into the top performing groups such as
industrial technology, telecommunications, media and the internet sectors.
Without the hot tech and telecom groups, the S&P 500 Index would have shown
little, if any, gain in 1999. In fact, this technology tide did not lift
all boats, but actually sank such key groups as pharmaceuticals, financials,
and home construction.
While technology and telecommunication stocks dominated the spotlight, a
handful of basic commodity sectors, especially in the aluminum and crude oil
industry, performed well as higher demand pushed these commodity prices
higher.
Last year was plagued by inflation jitters, Y2K fears, and a rising interest
rate environment. As a result, the bond market suffered its worst loss since
1994 and second worst performance since 1973. Currently there is no
indication that the Federal Reserve will stop raising interest rates, which
could have an adverse affect on market valuations.
The question on investors' minds is whether the technology sector can
continue to extend its gains into the future, or is this a bubble that will
burst?
We believe that the gains of last year do not necessarily rule out another
good year in 2000. The key will be to invest in those companies with real
earnings potential and solid business models. Some air, no doubt, will go
out of the bubble as the "dot coms" investment opportunities subside as the
traditional brick and mortar companies compete and consolidate. We feel,
however, that the internet age has just begun and the pieces needed to build
this massive infrastructure have only started to come together.
We are very excited about the introduction of our Monetta Express Children
Investment Program last year, which gets children involved in the investment
process and helps parents teach children about basic money management skills.
We encourage shareholders to visit our website at www.monetta.com for updated
information on Fund performance and up-to-date commentary on the current
market environment.
Thank you for being a member of the Monetta Family of Mutual Funds.
Best personal regards,
Robert S. Bacarella
President and Founder
<Page 3>
Monetta Fund Period ended 12/31/99
Investment Objective: Market Capitalization: Total Net Assets:
Capital Appreciation/Income $1.9 billion $135.7 million
<TABLE>
<CAPTION>
PERFORMANCE: Average Annual Total Return
1 Year 5 Year 10 Year
<S> <C> <C> <C>
Monetta Fund 51.80% 17.77% 14.61%
Russell 2000* 21.26% 16.69% 13.40%
</TABLE>
*Source Frank Russell Company
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement Period Monetta Russell
Equity Fund 2000
<S> <C> <C>
3/90 10536 9778.9
6/90 11782.4 10156.1
9/90 9509.58 7663.98
12/90 11136.7 8049.24
3/91 13199.2 10442.9
6/91 13595.2 10281.1
9/91 15434.6 11119.3
12/91 17360.8 11756.1
3/92 17471.9 12637.8
6/92 16357.2 11775.6
9/92 16843 12113
12/92 18313.4 13920.5
3/93 17099.3 14515.5
6/93 17225.8 14832.3
9/93 18566 16129.1
12/93 18404.4 16552.4
3/94 17918.5 16113.1
6/94 16947.4 15485.6
9/94 18140.5 16560.6
12/94 17260.6 16251
3/95 18924.6 17000.1
6/95 20232.3 18593.7
9/95 22753.2 20430
12/95 22097.9 20872.7
3/96 22438.2 21937.7
6/96 23133.8 23035.2
9/96 23092.2 23113.3
12/96 22454.8 24315.7
3/97 20824.6 23058
6/97 25106.1 26796
9/97 30124.8 30783.8
12/97 28335.4 29752.5
3/98 31452.3 32745
6/98 28631 31219.1
9/98 21902.8 24928.5
12/98 25775.2 28994.3
3/99 22880.6 27422.8
6/99 26189.2 31687
9/99 26498.2 29684.4
12/99 39127.2 35158.2
</TABLE>
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. The graph 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.
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
<S> <C>
Telecommunication Equipment 21.2%
Software 16.1%
Computers 15.8%
Electronics 10.3%
Semiconducters 9.1%
Media 6.1%
All Other Industries 17.1%
(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>
Adelphia Business Solutions, Inc. 1.4%
Advanced Fibre Communications, Inc. 1.4%
RSA Security, Inc. 1.3%
Primus Telecommunications Group, Inc. 1.3%
Viatel, Inc. 1.2%
Total Top 5 Holdings 6.6%
</TABLE>
COMMENTARY
The Monetta Fund posted a return of 51.8% in 1999, far outpacing the 21.3%
return for the benchmark Russell 2000 Index. The Fund's 5 year and 10 year
annual returns of 17.8% and 14.6% respectively exceed the benchmark Russell
2000 Index returns.
Through mid-year, our technology and telecommunications stocks were among our
best performers. Given the favorable trends in these groups of strong
revenue and earnings growth, which are expected to continue through the year
2001, we increased our weightings in these groups. In the fourth quarter of
1999, the market's strong move was led by the technology, telecommunications,
media and biotech sectors, where the Fund had substantial weightings. This
is what drove the Monetta Fund's strong fourth quarter return of 47.7%.
A number of holdings posted returns of greater than 150% in 1999. Our
strongest performing stocks include Omnipoint (up 550%), Applied Micro Circuits
(up 431%) and M-Systems Flash Disk (up 353%). On December 31, 1999, they
represented 0.6%, 0.4% and 1.0%, respectively, of net assets.
While the valuation levels of some of our holdings have increased
dramatically, they are still very attractive on a historical basis versus
their large-cap peers. However, in an effort to maintain proper balance
within the portfolio we have trimmed back our successful holdings as they
have grown in proportion to the Fund's assets. We have also been very
aggressive in eliminating securities that exhibit any deterioration in
fundamentals.
Since we are not having any difficulty finding attractive small-cap stocks,
we have expanded the number of holdings in the Fund to participate in these
companies favorable long-term prospects.
Small-cap stocks, after underperforming large-cap stocks for several years,
began to outperform in the latter part of 1999, and many experts predict that
this will continue. We are excited about the opportunities the small-cap
universe offers as we enter the year 2000, and believe that the Monetta Fund is
exceptionally well positioned to benefit from a continuing rally in small-cap
stocks.
<Page 4>
Monetta Small-Cap Equity Fund Period ended 12/31/99
Investment Objective: Market Capitalization: Total Net Assets:
Capital Appreciation $2.0 billion $5.3 million
<TABLE>
<CAPTION>
PERFORMANCE: Average Annual Total Return
Since Inception
1 Year 2/1/97
<S> <C> <C>
Monetta Small-Cap
Equity Fund 62.91% 33.74%
Russell 2000* 21.26% 12.72%
</TABLE>
*Source Frank Russell Company.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement Period SMALL-CAP RUSSELL
Fund 2000
<S> <C> <C>
12/96 10000 10000
3/97 9490 9297
6/97 11820 10804
9/97 15089 12412
12/97 14716 11996
3/98 15956 13203
6/98 15317 12588
9/98 12237 10051
12/98 14278 11690
3/99 13223 11057
6/99 15930 12776
9/99 16057 11969
12/99 23260 14177
</TABLE>
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. The graph 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.
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
<S> <C>
Telecommunications 19.4%
Computers 14.3%
Telecommunication Equipment 13.5%
Software 13.0%
Electronics 11.9%
Semiconductors 5.5%
All Other Industries 14.2%
(A) 8.2%
</TABLE>
(A) Short-term investments net of other assets and liabilities.
TOP 5 EQUITY HOLDINGS:
<TABLE>
<CAPTION>
% of Net Assets
<S> <C>
C-Cor.net Corp. 4.3%
QRS Corp. 3.9%
Adelphia Business Solutions, Inc. 3.6%
Symantec Corp. 3.3%
M-Systems Flash Disk Pioneers Ltd. 3.1%
Total Top 5 Holdings 18.2%
</TABLE>
COMMENTARY
The Monetta Small-Cap Equity Fund posted a strong return of 62.9% in 1999,
besting its Russell 2000 benchmark return of 21.3%. Since inception on
2/1/97, the Fund has posted an annualized return of 33.7%, which handily
outpaced the Russell 2000 return of 12.7%.
While 1999 was a good year for small-cap stocks in general, a large portion
of the gains were in small-cap growth stocks versus value stocks.
Specifically, the technology, telecommunication, media and biotech sectors
performed exceptionally well, where we had significant exposure, while
financial, industrial and retail stocks were among the lagging groups, where
we had little if any exposure. Investments in Initial Public Offerings, that
were sold on the day received, accounted for 4.9% of the 62.9% one-year return.
A number of individual stocks in the Fund posted spectacular returns in 1999.
Omnipoint (up 550%), Applied Micro Circuits (up 411%), E-TEK Dynamics (up
296%), and Powertel (up 261%) were among our strongest performing stocks. On
December 31, 1999, the stocks represented 1.6%, 2.4%, 1.5%, and 1.9%,
respectively, of net assets.
Since inception, the Monetta Small-Cap Equity Fund has been a concentrated
portfolio of between 25 and 35 positions. In the latter part of 1999, the
number of holdings increased somewhat due in part to the strong performance
of many of the holdings. The strong stocks were trimmed back, but not
eliminated, and the proceeds were used to purchase new securities. We
anticipate going forward that the number of holdings will move up slightly to
between 30 and 45 positions.
We believe that the technology and telecommunications groups will continue to
be leaders in 2000, and we will maintain a heavy weighting in these areas.
However, we will be alert to new opportunities in other groups as they develop.
We feel that there has never been a better time to be invested in the small-
cap investment area. Many of these companies are demonstrating superior
growth, and are always ripe to be acquired by a larger company at an
attractive premium. Our focus is to continue to identify the most attractive
investments in the small-cap universe.
<Page 5>
Monetta Mid-Cap Equity Fund Period ended 12/31/99
Investment Objective: Market Capitalization: Total Net Assets:
Capital Appreciation $10.6 billion $19.5 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 53.39% 24.87% 23.37%
S&P 400 Mid-Cap* 13.35% 21.28% 16.14%
</TABLE>
*Source Lipper Analytical Services, Inc.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement Period MID-CAP S&P 400
FUND
<S> <C> <C>
3/1/93 10000 10000
3/93 11670 10220
6/93 11880 10455
9/93 13120 10978
12/93 13540 11274
3/94 13475 10793
6/94 13109 10399
9/94 13887 11103
12/94 13835 10817
3/95 14835 11692
6/95 16536 12723
9/95 17603 13965
12/95 17233 14165
3/96 18717 15037
6/96 19106 15470
9/96 19855 15920
12/96 21402 16885
3/97 21314 16634
6/97 24277 19085
9/97 27761 22145
12/97 27639 22329
3/98 30239 24787
6/98 29362 24257
9/98 22920 20800
12/98 27408 26472
3/99 27154 24783
6/99 30639 28290
9/99 28862 25840
12/99 41719 30192
</TABLE>
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. 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.
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
<S> <C>
Software Internet/Content 13.0%
Software Applications/Enterprise Service 10.1%
Semiconductors 10.1%
Telecommunications 9.9%
Electronics 8.4%
Telecommunication Equipment 6.1%
Media 5.8%
All Other Industries 27.3%
(A) 9.3%
</TABLE>
(A) Short-term investments net of other assets and liabilities.
TOP 5 EQUITY HOLDINGS:
<TABLE>
<CAPTION>
% of Net Assets
<S> <C>
Exodus Communications, Inc. 1.8%
Qualcomm, Inc. 1.8%
Biogen, Inc. 1.7%
Siebel Systems, Inc. 1.7%
Western Wireless Corp. 1.7%
Total Top 5 Holdings 8.7%
</TABLE>
COMMENTARY
The Mid-Cap Fund posted a record high fourth quarter return of 44.6%,
propelling the full year 1999 return to 53.4%. The Fund's performance
significantly exceeded its benchmark (S&P 400 Mid-Cap Index) return of
13.4%.
The largest impact on Fund performance was its technology weightings and,
specifically, the performance of one stock - Qualcomm, Inc.. Last year total
Fund gains were approximately $6.1 million of which Qualcomm, Inc. represented
$1.2 million. Other top performing stocks included Echostar Communication
Corp., Exodus Communications, Verticalnet Inc., and Comverse Technology. On
December 31, 1999, these stocks represented 1.5%, 1.8%, 1.7%, and 0.7%,
respectively, of net assets.
Many security holdings were trimmed last year to maintain adequate
diversification, lock in gains and reduce overall Fund volatility. As the
stock valuations moved higher, we increased the number of issues in the Fund
to minimize the impact of any one stock position on overall Fund performance.
At year-end, approximately 91% of the portfolio was invested in stocks. We
began to gradually invest in the oil sector while maintaining the overall
technology weightings especially in the telecommunications area. We have
generally avoided the E-Commerce area in favor of more internet
infrastructure type investments.
We continue to believe the technology sector offers above average growth
opportunities. The internet age has just begun and billions of dollars will
be spent on switches, bandwidth, storage, and advertising space.
<Page 6>
Monetta Large-Cap Equity Fund Period ended 12/31/99
Investment Objective: Market Capitalization: Total Net Assets:
Capital Appreciation $126.5 billion $9.3 million
<TABLE>
<CAPTION>
PERFORMANCE: Average Annual Total Return
Since Inception
1 Year 3 Year 9/1/95
<S> <C> <C> <C>
Monetta Large-Cap
Equity Fund 53.98% 28.57% 27.63%
S&P 500* 21.03% 27.56% 27.02%
</TABLE>
*Source Lipper Analytical Services, Inc.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement Period LARGE-CAP S&P 500
Fund
<S> <C> <C>
9/95 10000 10482
12/95 10574 11105
3/96 11344 11701
6/96 11923 12225
9/96 12864 12603
12/96 13555 13653
3/97 13842 14020
6/97 15621 16465
9/97 17333 17699
12/97 17167 18207
3/98 18413 20745
6/98 18008 21433
9/98 14165 19307
12/98 18716 23441
3/99 21543 24608
6/99 22880 26343
9/99 22366 24699
12/99 28820 28372
</TABLE>
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. 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.
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
<S> <C>
Telecommunication Equipment 12.1%
Software 11.1%
Computers 11.0%
Media 10.3%
Retail 8.5%
Telephone 7.7%
Diversified Financial Services 6.2%
Semiconductors 5.5%
Pharmaceuticals 5.1%
All Other Industries 15.9%
(A) 6.6%
</TABLE>
(A) Short-term investments net of other assets and liabilities.
TOP 5 EQUITY HOLDINGS:
<TABLE>
<CAPTION>
% of Net Assets
<S> <C>
Yahoo! Inc. 3.7%
JDS Uniphase Corp. 3.5%
America Online, Inc. 3.3%
Motorola, Inc. 3.2%
Nokia Corp. - Spon ADR 3.1%
Total Top 5 Holdings 16.8%
</TABLE>
COMMENTARY
The Large-Cap Fund posted a strong 28.9% return during the fourth quarter,
increasing the Fund's 1999 investment return to a record 54.0%. This return
significantly outperformed its benchmark index return (S&P 500 Index) of 21.0%
last year.
Fund performance benefited from its technology weightings in the computer,
telecommunications, and software industries, and also its media sector holdings.
Top performing securities during the year included Yahoo! Inc., America
Online, Inc., Nokia Corp., Nextel Communications, and Oracle Corp. On
December 31, 1999, Yahoo! Inc., America Online, Inc., and Nokia Corp. were part
of our "Top 5" equity holdings. Nextel Communications and Oracle Corp.
represent 2.8% and 2.4%, respectively, of net assets.
The pharmaceutical sector performed poorly last year, with such holdings as
Merck & Co., Pfizer, Inc., and Schering-Plough Corp., representing 1.4%,
1.1%, and 0.9%, respectively, of net assets. We have reduced our exposure to
this area and will revisit this sector as fundamentals improve.
The Fund's investment strategy continues to be focused on the best and
largest companies in a particular industry sector. These companies are
generally mature companies with solid financial strength. The major
investment risk is the market not favoring the Fund's growth investment style.
The Fund continues to be focused on large-cap growth stocks which should
continue to benefit from moderate economic growth, low inflation, and stable
interest rates.
<Page 7>
Monetta Balanced Fund Period ended 12/31/99
Investment Objective: Market Capitalization: Average Maturity:
Capital Appreciation/Income $131.7 billion 9.9 Years
Total Net Assets:
$9.4 million
<TABLE>
<CAPTION>
PERFORMANCE: Average Annual Total Return
Since Inception
1 Year 3 Year 9/1/95
<S> <C> <C> <C>
Monetta Balanced
Fund 29.60% 19.48% 20.94%
S&P 500* 21.03% 27.56% 27.02%
Lehman Bros. Gov't/Corp.
Bond Index* (2.15)% 5.54% 5.84%
</TABLE>
*Source Lipper Analytical Services, Inc.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement Period BALANCED FUND S&P 500* LEHMAN BROS. GOV'T/
CORP. BOND INDEX*
<S> <C> <C> <C>
9/95 10000 10482 10000
12/95 10616 11105 10573
3/96 11131 11701 10326
6/96 11931 12225 10374
9/96 12547 12603 10557
12/96 13369 13653 10880
3/97 13358 14020 10786
6/97 14642 16465 11179
9/97 16431 17699 11570
12/97 16205 18207 11941
3/98 17321 20745 12123
6/98 16923 21433 12351
9/98 15004 19307 12962
12/98 17602 23441 12979
3/99 18952 24608 12823
6/99 19782 26343 12682
9/99 19353 24699 12751
12/99 22814 28372 12698
</TABLE>
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. The graph above to the right compares
the change in value of a $10,000 investment in the Monetta Balanced Fund to
the S&P 500 Index and the Lehman Gov't/Corp. Bond with dividends and capital
gains reinvested.
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
<S> <C>
Common Stocks 69.1%
Corporate Bonds 20.9%
Mortgage Obligaytions 3.6%
Treasury Notes 4.2%
(A) 2.2%
</TABLE>
(A) Short-term investments net of other assets and liabilities.
TOP 5 EQUITY HOLDINGS:
<TABLE>
<CAPTION>
% of Net Assets
<S> <C>
Yahoo! Inc. 3.7%
Merrill Lynch & Co., Inc. 3.5%
Intel Corp. 3.5%
MCI Worldcom, Inc. 3.4%
Home Depot, Inc. 3.3%
Total Top 5 Holdings 17.4%
</TABLE>
(A) Fixed income net of other assets and liabilities.
COMMENTARY
The Balanced Fund posted a record 17.9% fourth quarter return, increasing the
1999 return to 29.6%. The average Lipper Balanced Fund last year was up
8.69%. The Fund's strong performance was primarily due to its weightings in
the telecommunication and computer software areas. For the period ended
12/31/99, the Fund ranked 4th of 449 balanced funds tracked by Lipper
Analytical Services, for the one-year return, and 30th of 333 funds for the
three-year return. Throughout the year, the Fund maintained a 60% to 65%
weighting in common stocks with the balance invested in high quality,
intermediate term bonds.
The top performing stocks last year included; America Online, Inc., Yahoo!,
Inc., and Wal-Mart Stores, Inc. On December 31, 1999 these stocks
represented 2.6, 3.7%, and 2.9%, respectively, of net assets. The stock
holdings were weighted more toward the larger capitalization issues versus
the mid-cap and small-cap sectors.
Most securities held in this Fund are considered core holdings. We therefore
will trade around the core position, trimming holdings on stock price
appreciation to lock in profits and reduce overall volatility. Securities
are sold when the long-term fundamental outlook turns negative.
In spite of a poor, overall fixed income market last year, the Fund's high
quality, intermediate term securities did relatively well, down approximately
1%. This compares favorably to the returns of the Lehman Bros. Gov't/
Corporate Bond Index, which declined 2.2%.
Our investment strategy continues to focus on quality growth companies,
leaders in their respective industries with solid competitive advantages.
The fixed income strategy is to remain positioned in the high quality
corporate bond sector and primarily in intermediate term maturities. The
fixed income strategy is basically buy and hold and tends to have a lower
duration than its benchmark index.
<Page 8>
Monetta Intermediate Bond Fund Period ended 12/31/99
Investment Objective: 30-Day SEC Yield: Average Maturity:
Income 6.71% 4.3 Years
Total Net Assets:
$19.9 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 1.60% 7.95% 6.81%
Lehman Gov't./Corp
Interm. Bond Index* 0.39% 7.10% 5.60%
</TABLE>
*Source Lipper Analytical Services, Inc.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement Period Monetta Intermediate Lehman Gov't/Corp.
Bond Int. Bond Index*
<S> <C> <C>
3/1/93 10000 10007
3/93 10000 10028
6/93 10399 10255
9/93 10732 10486
12/93 10817 10504
3/94 10585 10291
6/94 10494 10229
9/94 10613 10313
12/94 10705 10302
3/95 11270 10754
6/95 11866 11292
9/95 12046 11479
12/95 12282 11883
3/96 12245 11784
6/96 12428 11859
9/96 12702 12068
12/96 13074 12364
3/97 13041 12350
6/97 13485 12715
9/97 13908 13058
12/97 14238 13338
3/98 14443 13546
6/98 14748 13800
9/98 15382 14420
12/98 15431 14463
3/99 15548 14436
6/99 15371 14378
9/99 15632 14510
12/99 15678 14517
</TABLE>
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. The graph above 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.
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
<S> <C>
Corporate Bonds 77.6%
U.S. Gov't Agencies 14.0%
Mortgage Obligations 0.1%
(A) 8.4%
</TABLE>
(A) Short-term investments net of other assets and liabilities.
MATURITY PROFILE:
<TABLE>
<CAPTION>
% of Net Assets
<S> <C>
1 Year or Less 16.1%
1-3 Years 20.1%
3-6 Years 39.8%
6-10 Years 21.1%
Over 10 Years 2.9%
Total 100.0%
</TABLE>
COMMENTARY
The Monetta Intermediate Bond Fund gained 1.60% for the year ended December 31,
1999 versus the negative .98% of the Lipper Intermediate Investment Grade Debt
Funds. The Fund ranked 9th of 279 funds for the one-year return and 8th of 192
funds and 12th of 145 funds for the three-year and five-year rankings
respectively. The Fund's performance reflects participation in Initial Public
Offerings, and had it not done so, the Fund's one-year, return would have been
.55%, versus 1.60%.
There were no major changes to the investment strategy for 1999. We continue
to believe that minimizing maturity risk versus the Lehman Government
Corporate Benchmark while overweighting the higher yielding sectors of the
corporate bond market will continue to provide the best opportunity for
outperformance.
Calendar year 1999 was a disappointing one for the global bond market.
The U.S. bond market concluded a bearish journey that saw U.S. treasury
yields increase dramatically across the entire maturity curve. The 2-year
treasury ended the year at 6.24%, an increase of 171 basis points while the
30-year closed at 6.62%, an increase of 152 basis points. This rise in U.S.
and European yields will be recorded as the second toughest year for absolute
returns since the inception of the Lehman indices. We saw the Federal
Reserve raise the discount rate 25 basis points three different times
attempting to stem the tide of inflation fear caused by a strong domestic
economy and optimism for a continuing global rebound.
Corporate bonds performed nicely the first 4 1/2 months of the year. During
late spring and summer, however, performance suffered due to Fed tightening
and heavy supply before staging a 4th quarter recovery to post positive
relative returns versus Governments for the year.
Our outlook for the year 2000 is cautious near-term but positive longer term.
The Fed will continue to cast a heavy shadow until the economy shows signs of
slowing. We are optimistic that the Fed is becoming increasingly more
comfortable with a higher economic growth rate as productivity gains continue
to temper inflation expectations. Supply and Y2K issues appear to have
resolved themselves. We continue to believe that the Fund performance will
benefit from a slower economy coupled with a diminished role by the Fed, and
overweighting the corporate sectors of the bond market.
<Page 9>
Monetta Government Money Market Fund Period ended 12/31/99
Investment Objective: 7-Day Yield: Average Days to Maturity:
Income and Capital Preservation 5.23%** 26 Days
Total Net Assets:
$3.7 million
<TABLE>
<CAPTION>
PERFORMANCE: Average Annual Total Return
Since Inception
1 Year 5 Year (3/1/93)
Monetta Government
<S> <C> <C> <C>
Money Market Fund 4.85%** 5.23%** 4.75%**
Lipper US Gov't Money
Market Funds Avg.* 4.46% 4.92% 4.43%
</TABLE>
*Source Lipper Analytical Services, Inc.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement Period Money Market Lipper Average
<S> <C> <C>
3/1/93 10000 10000
3/93 10013 10023
6/93 10072 10088
9/93 10147 10154
12/93 10224 10222
3/94 10301 10290
6/94 10396 10374
9/94 10507 10475
12/94 10637 10597
3/95 10788 10738
6/95 10950 10885
9/95 11110 11030
12/95 11262 11174
3/96 11401 11309
6/96 11539 11440
9/96 11683 11579
12/96 11832 11711
3/97 11977 11846
6/97 12126 11988
9/97 12281 12135
12/97 12441 12284
3/98 12599 12433
6/98 12760 12585
9/98 12927 12738
12/98 13091 12894
3/99 13244 13045
6/99 13397 13180
9/99 13554 13327
12/99 13726 13485
</TABLE>
Past performance is no guarantee of future results. **Total returns are net
of advisory and distribution fees waived and voluntary absorption of all or
part of the Fund's operating expenses by the Advisor. Had fees not been
waived, the 7-day SEC yield would have been 4.88%, versus 5.23% on December
31, 1999. 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.
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
<S> <C>
(A) Fed. Home Loan Mortg. Corp. 33.1%
Fed. Home Loan Bank Disc. 32.4%
Fed. Farm Credit 15.3%
Fed. Nat'l. Mortg. Assoc. 19.2%
</TABLE>
(A) Fixed income investments net of other assets and liabilities.
ALLOCATION:
<TABLE>
<CAPTION>
<S> <C>
Government Obligations 100.7%
Other Assets Less Liabilities (0.7)%
Total 100.0%
</TABLE>
COMMENTARY
The Government Money market Fund posted an impressive return of 4.85% for the
year ending 12/31/99. The returns compare favorably to the Lipper U.S.
Government Money Market Funds category ranking the fund 8th of 123 Funds in
this category for the one-year return, 11th of 106 for the three-year return,
and 7th of 91 funds for the 5-year return.
We continue to overweight the agency discount note sector versus Government
Bills because of the yield premium that this sector provides. As of
12/31/99, the average maturity of the Fund was less than 30 days in
anticipation of the first quarter 2000 tightening Federal Reserve policy.
This last year did not disappoint investors who were expecting higher
interest rates due to concerns over accelerating economic growth. The Fed
raised short-term rates by 75 basis points in 1999 and has given every
indication that it will raise them again another 25-50 basis points by mid-
2000. We believe that there are economic changes already underway that should
eventually slow GDP growth. This environment suggests that Fed tightening
initiatives will be a slow, gradual process.
We therefore intend to maintain defensive position until we discover a
positive change in the near term direction of interest rates. At such time
we will extend maturities, monitoring closely the yield spread opportunities
in available sector choices.
The Monetta Government Money Market Fund is the most conservative of the
Monetta Family of Mutual Funds. Its primary objectives are the preservation
of capital and liquidity. The investment emphasis is on stability and
conservatism.
<Page 10>
Schedule of Investments December 31, 1999
MONETTA FUND
COMMON STOCKS - 95.7% VALUE
NUMBER OF SHARES (In Thousands)
<TABLE>
<CAPTION>
Advertising - 2.4%
<S> <C> <C>
*16,000 APAC Teleservices, Inc. $ 225
*11,000 Catalina Marketing Corp. 1,273
11,000 True North Communications, Inc. 492
*22,000 Valuevision Int'l, Inc. 1,261
3,251
Biotechnology - 1.6%
*3,500 Affymetrix, Inc. 594
*25,000 Bio-Technology General Corp. 381
*7,000 IDEC Pharmaceuticals Corp. 688
*4,000 Millennium Pharmacuticals, Inc. 488
2,151
Commercial Services - 0.7%
20,000 Hooper Holmes, Inc. 515
*18,000 MedQuist, Inc. 465
980
Computers - 15.8%
*26,000 Advanced Digital Information Corp. 1,264
*5,000 Ancor Communications, Inc. 339
*17,000 AXENT Technologies, Inc. 357
*8,000 Black Box Corp. Inc. 536
*19,000 Cabletron Systems, Inc. 494
*12,000 Ciber, Inc. 330
*6,300 Cognizant Technology Solutions Corp. 689
*13,000 Computer Network Technology Corp. 298
*17,000 Concurrent Computer Corp. 318
*4,000 Cybex Computer Products Corp. 162
*10,700 Datalink Corp. 206
*15,000 Echelon Corp. 293
*5,000 Emulex Corp. 562
12,000 Factset Research Systems, Inc. 956
*20,000 Inter-Voice-Brite, Inc. 473
*11,000 ISS Group, Inc. 782
*5,000 Kronos, Inc. 300
*35,900 Mercury Computer Systems, Inc. 1,257
*7,000 Micros Systems, Inc. 518
*11,000 MMC Networks, Inc. 378
*40,000 M-Systems Flash Disk Pioneers Ltd. 1,315
*27,000 MTI Technology Corp. 996
21,000 National Computer Systems, Inc. 790
*9,500 Network Access Solutions Corp. 314
*6,000 Radiant Systems, Inc. 241
*28,300 RadiSys Corp. 1,443
*23,500 RSA Security, Inc. 1,821
*7,000 SanDisk Corp. 674
*24,000 Silicon Storage Technology, Inc. 990
*7,300 Sykes Enterprises, Inc. 320
*27,000 Technology Solutions Co. 884
*10,000 Visual Networks, Unc. 793
*4,000 Xircom, Inc. 300
21,393
Electrical Components & Equipment - 1.8%
*16,300 American SuperConductor Corp. 456
*10,100 Artesyn Technologies, Inc. 212
7,500 C&D Technologies, Inc. 319
*24,300 C-Cube MicroSystems, Inc. 1,513
2,500
Electronics - 10.3%
*10,500 Amphenol Corp. 699
*8,000 Anadigics, Inc. 378
*5,000 Audiovox Corp. 152
20,000 Cohu, Inc. 620
*10,200 Credence Systems Corp. 883
7,000 CTS Corp. 528
*13,800 DII Group, Inc. 979
*10,600 DSP Group, Inc. 986
*10,000 Electro Scientific Industries, Inc. 730
*11,100 Excel Technology, Inc. 199
*31,000 Integrated Device Technology, Inc. 899
*20,000 Kemet Corp. 901
*25,000 LTX Corp. 559
*10,000 Micrel, Inc. 569
*15,100 Nanometrics, Inc. 304
10,000 Newport Corp. 457
*12,000 Orbotech Ltd. 930
11,000 Perkinelmer, Inc. 459
*16,000 Power Integrations, Inc. 767
*8,800 Sanmina Corp. 879
*10,500 Sawtek, Inc. 699
*11,300 SBS Technologies, Inc. 412
13,989
Engineering & Construction - 0.3%
*10,000 Dycom Industries, Inc. 441
Health Care - 0.3%
*18,100 Polymedica Corp. 418
Home Furnishings - 0.5%
*9,500 Polycom, Inc. 605
Machinery-Diversified - 1.8%
*11,300 Asyst Technologies, Inc. 741
30,500 Helix Technology Corp. 1,366
*7,000 Kulicke & Soffa Industries, Inc. 298
2,405
</TABLE>
<PAGE 11>
Schedule of Investments December 31, 1999
MONETTA FUND (Con't)
COMMON STOCKS VALUE
NUMBER OF SHARES (In Thousands)
<TABLE>
<CAPTION>
<S> <C> <C>
Media - 6.1%
*24,000 ACTV, Inc. $ 1,097
*16,000 Citadel Communications Corp. 1,038
*18,000 Cumulus Media, Inc. 913
*11,000 Emmis Communications Corp. 1,371
*11,500 Jones Intercable, Inc. - CL A 797
*10,000 Pegasus Communications Corp. 978
*8,000 Source Media, Inc. 148
*12,700 UnitedGlobalCom, Inc. - CL A 897
*13,250 Westwood One, Inc. 1,007
8,246
Miscellaneous Manufacturing - 0.3%
1,300 Optical Coating Laboratory, Inc. 385
Oil & Gas Services - 0.1%
*4,500 Hanover Compressor Co. 170
Pharmaceuticals - 2.8%
*8,000 Biovail Corporation Int'l 750
*21,000 Cephalon, Inc. 726
27,500 Jones Pharma, Inc. 1,194
*13,000 Medicis Pharmaceutical Corp. - CL A 553
*2,000 Medimmune, Inc. 332
*3,000 Sepracor, Inc. 298
3,853
Retail - 0.1%
*5,000 Ames Department Stores,Inc. 144
Semiconductors - 9.1%
*21,000 Actel Corp. 504
*5,000 Alpha Industries, Inc. 287
*43,500 Amkor Technology, Inc. 1,229
*4,500 Applied Micro Circuits Corp. 573
*20,000 Cirrus Logic, Inc. 266
*32,000 Cypress Semiconductor Corp. 1,036
*8,000 Electroglas, Inc. 203
*29,000 ESS Technology, Inc. 643
*15,000 Exar Corp. 883
*25,000 Int'l Rectifier Corp. 650
*5,600 Lam Research Corp. 625
*10,000 Lattice Semiconductor Corp. 471
*8,000 MIPS Technologies, Inc. 416
*7,400 Novellus Systems, Inc. 907
*9,100 Photronics, Inc. 260
*17,000 Semtech Corp. 886
*6,500 Siliconix, Inc. 855
*11,000 Transwitch Corp. 798
*8,000 TriQuint SemiConductor, Inc. 890
12,382
Software 16.1%
*3,800 24/7 Media, Inc. $ 214
*31,000 Actuate Corp. 1,329
*15,000 Ardent Software, Inc. 585
*29,000 Banyan Systems, Inc. 580
*10,000 Brio Technology, Inc. 420
*4,000 Business Objects S.A. - SP ADR 535
*13,000 Cambridge Technology Partners,Inc. 341
*5,000 Cognos, Inc. 231
*19,500 Datastream Systems, Inc. 479
*13,900 Digital River, Inc. 463
*9,700 DSET Corp. 363
*8,000 Eclipsys Corp. 205
*26,000 Genesys Telecommunications Labs, Inc. 1,404
*2,500 Great Plains Software, Inc. 187
*5,000 Hummingbird Communications Ltd. 153
*29,000 Hyperion Solutions Corp. 1,261
*4,000 InterVU, Inc. 420
*17,000 Manugistics Group, Inc. 549
*6,000 Mercury Interactive Corp. 648
*7,500 Micromuse, Inc. 1,275
*1,900 Microstrategy, Inc. 399
*20,000 NVIDIA Corp. 939
*18,000 Open Market, Inc. 812
*6,000 Pacific Internet Ltd. 282
*6,500 Peregrine Systems, Inc. 547
*10,000 Progress Software Corp. 567
*7,600 Project Software & Development, Inc. 422
*6,700 Proxicom, Inc. 833
*12,000 Remedy Corp. 568
*21,500 Sapiens Int'l Corp. N.V. 353
*21,000 Sybase, Inc. 357
*21,000 Symantec Corp. 1,231
*17,000 Telescan, Inc. 420
*27,000 The Santa Cruz Operation, Inc. 820
*17,700 Ultimate Software Group, Inc. 231
*5,500 USInternetWorking, Inc. 384
*7,000 WebTrends Corp. 567
*14,000 Wind River Systems, Inc. 515
21,889
Telecommunication Equipment -21.2%
*3,800 Adaptive Broadband Corp. 281
*40,000 Adelphia Business Solutions, Inc. 1,920
*8,700 ADTRAN, Inc. 448
*42,000 Advanced Fibre Communication, Inc. 1,877
*16,000 Advanced Radio Telecom Corp. 384
*24,000 American Mobile Satellite Corp. 506
*30,000 Aspect Communications Corp. 1,174
</TABLE>
<PAGE 12>
Schedule of Investments December 31, 1999
MONETTA FUND (Con't)
COMMON STOCKS VALUE
NUMBER OF SHARES (In Thousands)
<TABLE>
<CAPTION>
<S> <C> <C>
*15,000 CapRock Communications Corp. $ 487
*8,000 Carrier Access Corp. 539
*18,000 C-Cor.net Corp. 1,379
*10,000 Com21, Inc. 224
*14,000 Commscope, Inc. 564
*8,000 Copper Mountain Networks, Inc. 390
*19,800 Corsair Communications, Inc. 161
*38,000 CTC Communications Group, Inc. 1,483
*22,000 Digital Microwave Corp. 516
*4,500 Ditech Communications Corp. 421
*24,000 Ectel Ltd 438
*8,500 E-TEK Dynamics, Inc. 1,140
*7,000 Gilat Satellite Networks Ltd. 831
*9,000 Harmonic, Inc. 855
*4,000 Leap Wireless Int'l, Inc. 314
*4,000 Metricom, Inc. 315
*15,000 MGC Communications, Inc. 761
*25,000 Microcell Telecommunications, Inc. 822
*5,000 Millicom Int'l Cellular S.A. 312
*22,000 MRV Communications, Inc. 1,383
*8,000 Nice Systems Ltd. - SP ADR 394
*4,000 NorthEast Optic Network, Inc. 250
*6,300 Omnipoint Corp. 760
*9,800 Optical Cable Corp. 196
*22,000 Pairgain Technologies, Inc. 312
*3,000 Plantronics, Inc. 215
*11,000 Powertel, Inc. 1,104
*5,500 Powerwave Technologies, Inc. 321
*8,000 Proxim, Inc. 880
*15,000 Rogers Cantel Mobile Communications, Inc. 546
*9,000 Rural Cellular Corp. - CL A 815
*39,400 TALK.com, Inc. 699
*20,000 Tekelec 450
*8,000 Terayon Communication Systems, Inc. 503
*7,000 ViaSat, Inc. 349
*10,000 Weblink Wireless, Inc. 155
*31,000 World Access, Inc. 597
*8,900 XETA Corp. 295
28,766
Telephone - 3.4%
10,500 CFW Communications Co. 365
*20,000 Intermedia Communications, Inc. 776
*46,500 Primus Telecommunications Group, Inc. 1,778
*30,000 Viatel, Inc. 1,609
4,528
Transportation - 1.0%
30,000 Expeditors Int'l of Washington, Inc. 1,314
Total Common Stocks
(Cost $80,326) (a) 129,810
VARIABLE DEMAND NOTES - 0.5%
PRINCIPAL AMOUNT
640,900 Firstar Bank
Milwaukee, N.A. - 6.16% 641
COMMERCIAL PAPER - 6.6%
PRINCIPAL AMOUNT
1,500,000 Merrill Lynch - 6.12%
Due 01/20/00 1,495
3,000,000 Met Life Funding - 6.30%
Due 01/20/00 2,990
4,500,000 Toyota Motor Credit- 5.88%
Due 01/10/00 4,493
8,978
Total Short-Term Investments 9,619
Total Investments-102.8%
(Cost $89,945) (a) 139,429
Other Assets Less Liabilities - (2.8%) (3,767)
Net Assets - 100% $135,662
</TABLE>
(a) For tax purposes, cost is $90,758; the aggregate gross unrealized
appreciation is $49,170, and aggregate gross unrealized depreciation is $499,
resulting in net unrealized appreciation of $48,671 (in thousands).
See accompanying notes to financial statements.
*Non-income producing security.
<PAGE 13>
Schedule of Investments December 31, 1999
MONETTA SMALL-CAP EQUITY FUND
COMMON STOCKS - 91.8% VALUE
NUMBER OF SHARES (In Thousands)
<TABLE>
<CAPTION>
<S> <C> <C>
Commercial Services - 1.0%
*2,000 MedQuist, Inc. $ 52
Computers - 14.3%
*5,000 M-Systems Flash Disk Pioneers Ltd. 164
1,900 National Computer Systems, Inc. 71
*2,000 QRS Corp. 209
*1,500 RadiSys Corp. 77
*1,500 RSA Security, Inc. 116
*3,000 Silicon Storage Technology, Inc. 124
761
Electrical Components & Equipment - 2.3%
*2,000 C-Cube MicroSystems, Inc. 124
Electronics - 11.9%
*1,500 Amphenol Corp. 100
1,500 CTS Corp. 113
*5,000 Excel Technology, Inc. 89
*2,000 Micrel, Inc. 114
*1,500 Orbotech Ltd. 116
*1,500 Sawtek, Inc. 100
632
Machinery-Diversified - 1.2%
1,500 Helix Technology Corp. 67
Media - 2.9%
*1,500 Jones Intercable, Inc. - CL A 104
*500 Pegasus Communications Corp. 49
153
Pharmaceuticals - 2.7%
*3,400 Medicis Pharmaceutical Corp. - CL A 145
Semiconductors - 5.5%
*3,500 Amkor Technology, Inc. 99
*1,000 Applied Micro Circuits Corp. 127
*3,000 ESS Technology, Inc. 67
293
Software - 13.0%
*1,000 Concentric Network Corp. 31
*2,000 DSET Corp. 75
*2,000 Genesys Telecommunications Labs, Inc. 108
*2,000 Pacific Internet Ltd. 94
*2,000 Progress Software Corp. 113
*3,000 Symantec Corp. 176
*3,200 The Santa Cruz Operation, Inc. 97
694
Telecommunication Equipment - 13.5%
*3,000 Advanced Fibre Communications, Inc. 134
*2,000 Carrier Access Corp. 134
*3,000 C-Cor.net Corp. 230
*2,000 Com21, Inc. 45
*600 E-TEK Dynamics, Inc. 81
*1,000 Harmonic, Inc. 95
719
Telecommunications - 19.4%
*4,000 Adelphia Business Solutions, Inc. 192
*3,000 Aspect Communications Corp. 117
*2,700 CTC Communications Group, Inc. 105
*1,000 Inet Technologies, Inc. 70
*1,000 Metricom, Inc. 79
*3,000 Microcell Telecommunications, Inc. 99
*700 Omnipoint Corp. 84
*1,000 Powertel, Inc. 100
*5,000 TALK.com, Inc. 89
*2,000 ViaSat, Inc. 100
1,035
Telephone - 2.5%
*3,500 Primus Telecommunications Group, Inc. 134
Transportation - 1.6%
2,000 Expeditors Int'l of Washington, Inc. 88
Total Common Stocks
(Cost $2,887) (a) 4,897
VARIABLE DEMAND NOTES - 7.4%
PRINCIPAL AMOUNT
213,100 Firstar Bank Milwaukee, N.A, - 6.16% 213
177,900 Warner Lambert - 6.08% 178
391
Total Investments - 99.2%
(Cost $3,278) (a) 5,288
Other Assets Less Liabilities - 0.8% 44
Net Assets - 100% $5,332
</TABLE>
(a) Cost is identical for book and tax purposes; the aggregate gross unrealized
appreciation is $2,039, and aggregate gross unrealized depreciation is $29,
resulting in net unrealized appreciation of $2,010 (in thousands).
See accompanying notes to financial statements.
*Non-income producing security.
<PAGE 14>
Schedule of Investments December 31, 1999
MONETTA MID-CAP EQUITY FUND
COMMON STOCKS - 90.7%
VALUE
NUMBER OF SHARES (In Thousands)
<TABLE>
<CAPTION>
<S> <C> <C>
Advertising - 1.8%
*3,300 Lamar Advertising Co. $ 200
*1,000 TMP Worldwide, Inc. 142
342
Biotechnology - 2.4%
*4,000 Biogen, Inc. 338
*1,000 Millennium Pharmacuticals, Inc. 122
460
Commercial Services - 1.9%
3,000 Comdisco, Inc. 112
*3,000 Concord EFS, Inc. 77
*2,500 Convergys Corp. 77
*2,500 USWeb Corp. 111
377
Computers - 4.6%
*1,000 Apple Computer, Inc. 103
*4,000 Cabletron Systems, Inc. 104
*1,000 CheckFree Holdings Corp. 105
*4,000 IXL Enterprises, Inc. 222
*4,000 Synopsys, Inc. 267
*2,000 Whittman-Hart, Inc. 107
908
Electric/Components & Equipment - 1.1%
*3,000 American Power Conversion Corp. 79
4,000 Montana Power Co. 144
223
Electronics - 8.4%
*3,000 Analog Devices, Inc. 279
*4,000 Celestica, Inc. 222
*3,000 DII Group, Inc. 213
*4,000 Jabil Circuit, Inc. 292
4,000 Linear Technology Corp. 286
*3,500 Microchip Technology, Inc. 240
*1,000 Solectron Corp. 95
1,627
Home Furnishings - 1.4%
*4,000 Gemstar Int'l Group Ltd. 285
Media - 5.8%
3,000 Dow Jones & Company, Inc. 204
*3,000 Entercom Communications Corp. 198
*2,500 Hispanic Broadcasting Corp. 231
*5,000 Infinity Broadcasting Corp. 181
*2,000 Univision Communications, Inc. - CL A 204
*2,000 USA Networks, Inc. 110
1,128
Oil & Gas Producers - 2.7%
*3,000 BJ Services Co. $ 125
*4,000 Noble Drilling Corp. 131
*4,000 Rowan Companies, Inc. 87
3,000 Transocean Sedco Forex, Inc. 101
*2,000 Weatherford Int'l, Inc. 80
524
Pharmaceuticals - 3.2%
*3,000 Forest Laboratories, Inc. 184
*2,000 Medimmune, Inc. 332
4,000 Mylan Laboratories, Inc. 101
617
Retail - 1.1%
2,400 Tiffany & Co. 214
Semiconductors - 10.1%
*4,000 Altera Corp. 198
*6,000 Atmel Corp. 177
*1,000 Broadcom Corp. - CL A 272
*4,000 Conexant Systems, Inc. 266
3,000 Dallas Semiconductor Corp. 193
*3,000 National Semiconductor Corp. 129
*2,000 Novellus Systems, Inc. 245
*2,000 PMC-Sierra, Inc. 321
*1,000 Qlogic Corp. 160
1,961
Software Applications/Enterprise Service- 10.1%
*2,000 BEA Systems, Inc. 140
*2,000 Citrix Systems, Inc. 246
*1,000 i2 Technologies, Inc. 195
*3,000 Intuit, Inc. 180
*4,000 Novell, Inc. 159
*2,000 Peregrine Systems, Inc. 168
*5,000 Rational Software Corp. 246
*4,000 Siebel Systems, Inc. 336
*5,000 Symantec Corp. 293
1,963
Software Internet/Content - 13.0%
*2,000 CNET, Inc. 114
*1,000 Commerce One, Inc. 197
*4,000 Covad Communications Group, Inc. 224
*4,000 Exodus Communications, Inc. 355
*2,000 Harbinger Corp. 64
*2,000 Inktomi Corp. 177
*1,000 Intraware, Inc. 79
*2,000 Lycos, Inc. 159
*4,000 Marimba, Inc. 184
*3,000 PSINet, Inc. 185
</TABLE>
<PAGE 15>
Schedule of Investments December 31, 1999
MONETTA MID-CAP EQUITY FUND (Con't)
COMMON STOCKS
NUMBER OF SHARES (In Thousands)
<TABLE>
<CAPTION>
<S> <C> <C>
*3,000 S1 Corp. $ 234
*5,000 Verio, Inc. 231
*2,000 Verticalnet, Inc. 328
2,531
Software Miscellaneous - 5.8%
2,500 Adobe Systems, Inc. 168
*2,000 Cognos, Inc. 92
*2,000 Electronic Arts, Inc. 168
*3,000 Legato Systems, Inc. 207
*3,000 Macromedia, Inc. 219
*4,000 Network Associates, Inc. 107
*3,000 Parametric Technology Corp. 81
*2,000 Research in Motion Ltd. 92
1,134
Telecommunication Equipment - 6.1%
*3,000 ADC Telecommunications, Inc. 218
*1,000 Comverse Technology, Inc. 145
*5,000 Metromedia Fiber Network, Inc. - CL A 240
*2,000 Qualcomm, Inc. 352
4,000 Scientific-Atlanta, Inc. 222
1,177
Telecommunications - 9.9%
3,000 BroadWing, Inc. 111
*3,000 Echostar Communications Corp. - CL A 292
*4,000 Global Crossing Ltd. 200
*3,000 Global Telesystems Group, Inc. 104
*3,000 Loral Space & Communications Ltd. 73
*1,900 McLeodUSA, Inc. 112
*2,000 NTL, Inc. 249
*4,000 Qwest Communications Int'l, Inc. 172
*2,000 VoiceStream Wireless Corp. 285
*5,000 Western Wireless Corp. 334
1,932
Telephone - 1.3%
2,000 Telephone and Data Systems, Inc. 252
Total Common Stocks
(Cost $11,672) (a) 17,655
VARIABLE DEMAND NOTES - 0.3%
PRINCIPAL AMOUNT
60,500 Firstar Bank Milwaukee, N.A. - 6.16% 61
COMMERCIAL PAPER - 15.3% VALUE
PRINCIPAL AMOUNT (In Thousands)
525,000 CIT Group - 5.80%
Due 01/07/00 $ 525
VARIABLE DEMAND NOTES - 12.6%
PRINCIPAL AMOUNT
800,000 Ford Motor Credit - 6.10%
Due 01/14/00 798
900,000 Merrill Lynch - 6.00%
Due 01/18/00 897
750,000 Merrill Lynch - 6.12%
Due 01/19/00 748
2,968
Total Short-Term Investments 3,029
Total Investments - 106.3%
(Cost $14,701) (a) 20,684
Other Assets Less Liabilities - ( 6.3%) (1,226)
Net Assets - 100% $19,458
</TABLE>
(a) For tax purposes, cost is $14,735; the aggregate gross unrealized
appreciation is $5,971, and aggregate gross unrealized depreciation is $23,
resulting in net unrealized appreciation of $5,948 (in thousands).
See accompanying notes to financial statements.
*Non-income producing security.
<PAGE 16>
Schedule of Investments December 31, 1999
MONETTA LARGE-CAP EQUITY FUND
COMMON STOCKS - 93.4% VALUE
NUMBER OF SHARES (In Thousands)
<TABLE>
<CAPTION>
<S> <C> <C>
Biotechnology - 2.6%
*4,000 Amgen, Inc. $ 240
Computers - 11.0%
*3,000 3COM Corp. 141
*2,000 Cisco Systems, Inc. 214
*3,000 Dell Computer Corp. 153
*2,000 EMC Corp. 219
*2,000 Gateway, Inc. 144
*2,000 Sun Microsystems, Inc. 155
1,026
Diversified Financial Services - 6.2%
1,200 American Express Co. 200
3,750 Citigroup, Inc. 208
2,000 Merrill Lynch & Co., Inc. 167
575
Health Care - 1.0%
1,000 Johnson & Johnson Co. 93
Insurance - 1.5%
1,250 American Int'l Group, Inc. 135
Media - 10.3%
3,000 CBS Corp. 192
*3,000 Clear Channel Communications, Inc. 267
3,000 Comcast Corp. - Special CL A 151
4,000 Cox Communications, Inc. - CL A 206
2,000 Time Warner, Inc. 145
961
Miscellaneous Manufacturing - 2.0%
1,200 General Electric Co. 186
Oil & Gas Producers - 3.9%
1,500 Exxon Mobil Corp. 121
2,000 Halliburton Co. 80
2,500 Schlumberger Ltd. 141
485 Transocean Sedco Forex, Inc. 16
358
Pharmaceuticals - 5.1%
4,000 American Home Products Corp. 158
2,000 Merck & Co. 134
3,000 Pfizer, Inc. 97
2,000 Schering-Plough Corp. 85
474
Retail - 8.5%
2,000 Dayton Hudson Corp. 147
3,750 Home Depot, Inc. 257
*2,500 Kohl's Corp. 181
3,000 Wal-Mart Stores, Inc. 207
792
Semiconductors - 5.5%
2,000 Intel Corp. 165
*2,000 Micron Technology, Inc. 155
2,000 Texas Instruments, Inc. 194
514
Software - 11.1%
*4,000 America Online, Inc. 302
*1,400 Microsoft Corp. 163
*2,000 Oracle Corp. 224
*800 Yahoo!Inc. 346
1,035
Telecommunication Equipment - 12.1%
*2,000 JDS Uniphase Corp. 323
3,000 Lucent Technologies, Inc. 224
2,000 Motorola, Inc. 294
1,500 Nokia Corp. - SP ADR 285
1,126
Telecommunications - 4.9%
*2,000 General Motors Corp. - CL H 192
*2,500 Nextel Communications, Inc. - CL A 258
450
Telephone - 7.7%
2,000 ALLTEL Corp. 166
*3,000 MCI Worldcom, Inc. 159
*3,000 Nextlink Communications, Inc. 249
3,000 SBC Communications, Inc. 146
720
Total Common Stocks
(Cost $5,541) (a) 8,686
VARIABLE DEMAND NOTES - 6.7%
PRINCIPAL AMOUNT
368,500 Firstar Bank Milwaukee, N.A. - 6.16% 368
251,600 Warner Lambert - 6.08% 252
620
Total Investments - 100.1%
(Cost $6,161) (a) 9,305
Other Assets Less Liabilities - (0.1%) (7)
Net Assets - 100% $9,298
</TABLE>
(a) Cost is identical for book and tax purposes; the aggregate gross unrealized
appreciation is $3,205, and aggregate gross unrealized depreciation is $61,
resulting in net unrealized appreciation of $3,144 (in thousands).
See accompanying notes to financial statements.
*Non-income producing security.
<PAGE 17>
Schedule of Investments December 31, 1999
MONETTA BALANCED FUND
COMMON STOCKS - 69.1% VALUE
NUMBER OF SHARES (In Thousands)
<TABLE>
<CAPTION>
<S> <C> <C>
Computers - 8.0%
*3,000 3COM Corp. $ 141
*3,000 Dell Computer Corp. 153
*7,000 M-Systems Flash Disk Pioneers Ltd. 230
*3,000 Sun Microsystems, Inc. 232
756
Diversified Financial Services - 6.5%
5,000 Citigroup, Inc. 278
4,000 Merrill Lynch & Co., Inc. 334
612
Media - 5.1%
*3,000 Clear Channel Communications, Inc. 268
*3,000 Cox Communications, Inc. - CL A 155
*1,500 Spanish Broadcasting System, Inc. - CL A 60
483
Oil & Gas Producers - 2.0%
3,000 Schlumberger Ltd. 169
582 Transocean Sedco Forex, Inc. 20
189
Pharmaceuticals - 4.1%
4,000 American Home Products Corp. 158
2,000 Merck & Co. 134
3,000 Pfizer, Inc. 97
389
Retail - 9.3%
4,000 Dayton Hudson Corp. 294
4,500 Home Depot, Inc. 309
4,000 Wal-Mart Stores, Inc. 276
879
Semiconductors - 3.5%
4,000 Intel Corp. 329
Software - 10.9%
*3,000 America Online, Inc. 226
*2,000 Microsoft Corp. 234
*2,000 Oracle Corp. 224
*800 Yahoo! Inc. 346
1,030
Telecommunication Equipment 8.0%
3,500 Lucent Technologies, Inc. 262
2,000 Motorola, Inc. 294
2,000 Nortel Networks Corp. 202
758
Telecommunications - 5.7%
*3,000 Adelphia Business Solutions, Inc. 144
*4,000 Qwest Communications Int'l, Inc. 172
*4,000 TALK.com, Inc. 71
3,000 Vodafone Group PLC - SP ADR 148
535
Telephone - 6.0%
3,000 ALLTEL Corp. 248
*6,000 MCI Worldcom, Inc. 318
566
Total Common Stock
(Cost $4,162) (a) 6,527
VARIABLE DEMAND NOTES - 1.8%
PRINCIPAL AMOUNT
168,600 Firstar Bank Milwaukee,
N.A. - 6.16% 169
TREASURY NOTES - 4.2%
PRINCIPAL AMOUNT
350,000 US Treasury Note
8.125% Due 08/15/19 399
CORPORATE BONDS - 20.9%
PRINCIPAL AMOUNT
300,000 Chase Manhattan Corp.
9.750% Due 11/01/01 314
300,000 National Rural Utilities
6.250% Due 04/15/03 291
300,000 US Central Credit Union
6.00% Due 05/21/03 293
350,000 Worldcom, Inc.
7.550% Due 04/01/04 355
300,000 Bank United Corp.
8.875% Due 05/01/07 279
175,000 Ford Motor Credit Co.
7.375% Due 10/28/09 173
300,000 East Coast Power, LLC
7.066% Due 03/31/12 270
1,975
MORTGAGE OBLIGATIONS - 3.6%
PRINCIPAL AMOUNT
344,995 Green Tree Home Imprv. Mortgage
6.780% Due 06/15/28 340
Total Investments - 99.6%
(Cost $7,152) (a) 9,409
Other Assets Less Liabilities - 0.4% 40
Total Net Assets - 100% $9,449
</TABLE>
<PAGE 18>
Schedule of Investments December 31, 1999
MONETTA INTERMEDIATE BOND FUND
<TABLE>
<CAPTION>
Corporate Bonds - 77.6% VALUE
PRINCIPAL AMOUNT (In Thousands)
<S> <C> <C>
940,000 Pacific Gas & Elec. - 8.750% 01/01/01 $ 957
700,000 Chase Manhattan Corp. - 9.750% 11/01/01 734
800,000 Cox Enterprises, Inc. - 6.625% 06/14/02 790
860,000 Tyco Int'l Group - 6.875% 09/05/02 847
100,000 Webb (DEL E.) - 9.750% 03/01/03 100
850,000 National Rural Utilities - 6.250% 04/15/03 825
850,000 US Central Credit Union 6.000% 05/21/03 829
850,000 Bank of America Corp.- 6.875% 06/01/03 842
1,000,000 NRG Energy Inc. - 8.000% 11/01/03 991
665,000 Worldcom, Inc. - 7.550% 04/01/04 674
300,000 The Money Store - 8/375% 04/15/04 310
900,000 Associates Corp., NA - 5.800% 04/20/04 853
955,000 American Express - 6.750% 06/23/04 939
750,000 Newcourt Credit Group - 6.875% 02/16/05 736
365,000 Bank United Corp. - 8.875% 05/01/07 340
900,000 LCI Int'l, Inc. - 7.250% 06/15/07 865
900,000 Lehman Brothers, Inc. - 6.625% 02/15/08 834
200,000 Jones Intercable - 10/500% 03/01/08 211
635,000 Countrywide Home Loan-6.250% 04/15/09 571
800,000 Cilcorp, Inc. - 8.700% 10/15/09 809
850,000 Ford Motor Credit - 7.375% 10/28/09 841
585,000 East Coast Power - 7.066% 03/31/12 527
15,425
U.S. GOVERNMENT AGENCIES - 14.0%
PRINCIPAL AMOUNT
1,000,000 Inter-American Development Bank
Discount Note 01/12/00 - 5.850% 998
800,000 Federal Home Loan Mortgage Corp.
5.500% 05/15/02 781
250,000 HUD Housing Urban Development
6.360% 08/01/04 245
800,000 FNMA 5.750% 06/15/05 760
2,784
MORTGAGE OBLIGATIONS - 0.1%
PRINCIPAL AMOUNT
9,012 GNMA 8 1/2 07/15/21 9
VARIABLE DEMAND NOTES - 4.4%
PRINCIPAL AMOUNT
886,600 Firstar Bank Milwaukee,
N.A.- 6.16% 887
COMMERCIAL PAPER - 5.5%
PRINCIPAL AMOUNT
500,000 Campbell Soup Co.- 5.80% Due 01/21/00 498
600,000 Metlife Funding - 5.88% Due 01/28/00 597
1,095
Total Investments - 101.6%
(Cost $20,528) (a) 20,200
Other Assets Less Liabilities - (1.6%) (327)
Net Assets - 100% $19,873
</TABLE>
<PAGE 19>
MONETTA GOVERNMENT MONEY MARKET FUND
GOVERNMENT OBLIGATIONS - 100.7%
VALUE
PRINCIPAL AMOUNT (In Thousands)
<TABLE>
<CAPTION>
FEDERAL HOME LOAN BANK DISCOUNT - 32.4%
PRINCIPAL AMOUNT
<S> <C> <C>
570,000 Due 02/07/00 - 5.570% $ 567
415,000 Due 02/16/00 - 5.670% 412
220,000 Due 02/23/00 - 5.750% 218
1,197
FEDERAL FARM CREDIT - 15.3%
PRINCIPAL AMOUNT
570,000 Due 01/28/00 - 5.580% 568
FEDERAL NATIONAL MORTGAGE ASSOC. - 19.2%
PRINCIPAL AMOUNT
711,000 Due 01/21/00 - 5.250% 709
FEDERAL HOME LOAN MORTGAGE CORP. - 33.8%
PRINCIPAL AMOUNT
483,000 Due 01/10/00 - 5.620% 482
771,000 Due 01/13/00 - 5.770% 769
1,251
Total Investments - 100.7% 3,725
Other Assets Less Liabilities - (0.7%) (25)
Net Assets - 100% $3,700
</TABLE>
BALANCED FUND FOOTNOTE:
(a) Cost is identical for book and tax purposes; the aggregate gross
unrealized appreciation is $2,498, and aggregate gross unrealized
depreciation is $241, resulting in net unrealized appreciation of $2,257
(in thousands).
See accompanying notes to financial statements.
*Non-income producing security.
INTERMEDIATE BOND FUND FOOTNOTE:
(a) Cost is identical for book and tax purposes; the aggregate gross
unrealized appreciation is $1, and aggregate gross unrealized depreciation is
$329, resulting in net unrealized depreciation of $328 (in thousands).
See accompanying notes to financial statements.
*Non-income producing security.
GOVERNMENT MONEY MARKET FUND FOOTNOTE:
(a) Cost is identical for book and tax purposes.
See accompanying notes to financial statements.
<PAGE 19>
STATEMENTS OF ASSETS AND LIABILITIES December 31, 1999
(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: $89,945; $3,278;
$14,701; $6,161; $7,152;
$20,528; $3,725) (Note 1) $139,429 $5,288 $20,684 $9,305
Cash 0 3 (a) 4
Receivables:
Interest and dividends 24 2 5 4
Securities sold 1,518 214 111 0
Fund shares sold 0 0 1 2
Total Assets 140,971 5,507 20,801 9,315
Liabilities:
Payables:
Custodial bank 75 0 0 0
Investment advisory fees
(Note 2) 102 3 12 5
Distribution and service
charges payable 0 1 16 5
Investments purchased 5,067 164 1,309 0
Fund shares redeemed 0 0 0 2
Accrued expenses 65 7 6 5
Total Liabilities 5,309 175 1,343 17
Net Assets 135,662 5,332 19,458 9,298
Analysis of net assets:
Paid in capital (b) 80,030 3,223 10,601 6,103
Accumulated undistributed
net investment income 520 0 0 0
Accumulated undistributed
net realized gain (loss) 5,628 99 2,874 51
Net unrealized appreciation
(depreciation)on investments 49,484 2,010 5,983 3,144
Net Assets $135,662 $5,332 $19,458 $9,298
Net asset value, offering
price, and redemption price
per share (5,974 shares of
capital stock and 244; 956;
463; 581; 1,940; 3,700 shares
of beneficial interest issued
and outstanding respectively) $22.71 $21.83 $20.36 $20.06
</TABLE>
<TABLE>
<CAPTION>
Intermediate Government
Balanced Bond Money Market
Fund Fund Fund
Assets:
<S> <C> <C> <C>
Investments at market value
(cost: $89,945; $3,278;
$14,701; $6,161; $7,152;
$20,528; $3,725) (Note 1) $9,409 $20,200 $3,725
Cash 0 0 0
Receivables:
Interest and dividends 58 269 0
Securities sold 0 0 0
Fund shares sold 0 1 0
Total Assets 9,467 20,470 3,725
Liabilities:
Payables:
Custodial bank 5 83 22
Investment advisory fees
(Note 2) 3 2 0
Distribution and service
charges payable 5 4 0
Investments purchased 0 504 0
Fund shares redeemed 0 0 0
Accrued expenses 5 4 3
Total Liabilities 18 597 25
Net Assets 9,449 19,873 3,700
Analysis of net assets:
Paid in capital (b) 6,960 20,251 3,700
Accumulated undistributed
net investment income 2 4 0
Accumulated undistributed
net realized gain (loss) 230 (54) 0
Net unrealized appreciation
(depreciation) on investments 2,257 (328) 0
Net Assets $9,449 $19,873 $3,700
Net asset value, offering price,
and redemption price per share
(5,974 shares of capital stock
and 244; 956; 463; 581; 1,940;
3,700 shares of beneficial
interest issued and outstanding
respectively) $16.27 $10.24 $1.00
</TABLE>
See accompanying notes to financial statements.(a) Rounds to less than
$1,000.(b) Amount for Monetta Fund represents $59 of $0.01 par value and
$79,971 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, 1999
(In Thousands)
<TABLE>
<CAPTION>
Small-Cap Mid-Cap Large-Cap
Monetta Equity Equity Equity
Fund Fund Fund Fund
<S> <C> <C> <C> <C>
Investment income and
expenses:
Investment income:
Interest $381 $18 $66 $21
Dividend 69 1 28 26
Other income *1,586 0 (a) 0
Total investment income 2,036 19 94 47
Expenses:
Investment advisory fee
(Note 2) 1,043 26 122 47
Distribution expense 0 9 40 15
Custodial fees and bank
cash management fee 47 5 10 4
Transfer and shareholder
servicing agent fee 424 42 31 37
Total expenses 1,514 82 203 103
Expenses waived and
reimbursed 0 (a) 0 0
Expenses net of waived and
reimbursed expenses 1,514 82 203 103
Net investment income
(loss) 522 (63) (109) (56)
Realized and unrealized gain
(loss) on investments:
Realized gain (loss) on
investments:
Proceeds from sales 241,842 9,329 34,459 4,779
Cost of securities sold 223,820 8,576 30,741 4,177
Net realized gain (loss)
on investments 18,022 753 3,718 602
Net unrealized appreciation
(depreciation) on
investments:
Beginning of period 22,489 755 2,452 837
End of period 49,484 2,010 5,983 3,144
Net change in net unrealized
appreciation (depreciation)
on investments during the
period 26,995 1,255 3,531 2,307
Net realized and unrealized
gain (loss) on
investments 45,017 2,008 7,249 2,909
Net increase in net assets
from operations $45,539 $1,945 $7,140 $2,853
</TABLE>
<TABLE>
<CAPTION>
Intermediate Government
Balanced Bond Money Market
Fund Fund Fund
<S> <C> <C> <C>
Investment income and
expenses:
Investment income:
Interest $210 $812 $207
Dividend 23 0 0
Other income 0 (a) (a)
Total investment income 233 812 207
Expenses:
Investment advisory fee
(Note 2) 37 45 10
Distribution expense 23 32 4
Custodial fees and bank
cash management fee 5 9 2
Transfer and shareholder
servicing agent fee 23 9 13
Total expenses 88 95 29
Expenses waived and
reimbursed 0 (26) (15)
Expenses net of waived and
reimbursed expenses 88 69 14
Net investment income (loss) 145 743 193
Realized and unrealized gain
(loss) on investments:
Realized gain (loss) on
investments:
Proceeds from sales 13,835 14,770 24,825
Cost of securities sold 11,683 14,824 24,825
Net realized gain (loss) on
investments 2,152 (54) 0
Net unrealized appreciation
(depreciation) on investments:
Beginning of period 2,067 96 0
End of period 2,257 (328) 0
Net change in net unrealized
appreciation (depreciation)
on investments during the
period 190 (424) 0
Net realized and unrealized
gain (loss) on investments 2,342 (478) 0
Net increase in net assets
from operations $2,487 $265 $193
</TABLE>
*Includes $1,583 thousand received from claims filed in reference to class
action suits primarily from ICN Pharmaceuticals and AHI Healthcare.
See accompanying notes to financial statements.
(a) Rounds to less than $1,000.Page
<Page 21>
Statements of Changes in Net Assets December 31, 1999
(In Thousands)
<TABLE>
<CAPTION>
Small-Cap
Monetta Equity
Fund Fund
1999 1998 1999 1998
From investment activities:
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $522 $(925) $(63) $(70)
Net realized gain (loss) on
investments 18,022 (12,315) 753 (655)
Net change in net unrealized
appreciation (depreciation)
on investments during the
period 26,995 (736) 1,255 638
Net increase (decrease) in net
assets from operations 45,539 (13,976) 1,945 (87)
Distribution from net
investment income 0 0 0 0
Distribution from short-term
capital gains, net (b) 0 (2,369) 0 (30)
Distribution from net realized
gains 0 (3,088) 0 0
Increase (decrease) in net
assets from investment
activities 45,539 (19,433) 1,945 (117)
From capital transactions
(Note 3):
Proceeds from shares sold 5,790 11,137 870 2,479
Net asset value of shares
issued through dividend
reinvestment 0 5,350 0 29
Cost of shares redeemed (40,356) (35,780) (1,463) (929)
Increase (decrease) in net
assets from capital
transactions (34,566) (19,293) 593 1,579
Total increase (decrease)
in net assets 10,973 (38,726) 1,352 1,462
Net assets at beginning
of period 124,689 163,415 3,980 2,518
Net assets at end of period $135,662 $124,689 $5,332 $3,980
Accumulated undistributed
net investment income (loss) $ 520 $ 0 $ 0 $ 0
</TABLE>
<TABLE>
<CAPTION>
Mid-Cap Large-Cap
Equity Equity
Fund Fund
1999 1998 1999 1998
From investment activities:
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $(109) $31 $(56) $(21)
Net realized gain (loss) on
investments 3,718 (385) 602 (265)
Net change in net unrealized
appreciation (depreciation)
on investments during the
period 3,531 411 2,307 638
Net increase (decrease) in net
assets from operations 7,140 57 2,853 352
Distribution from net
investment income 0 (31) 0 0
Distribution from short-term
capital gains, net (b) 350 (741) (34) (208)
Distribution from net realized
gains 0 (1,028) (196) (62)
Increase (decrease) in net
assets from investment
activities 6,790 (1,743) 2,623 82
From capital transactions
(Note 3):
Proceeds from shares sold 1,234 5,180 3,566 829
Net asset value of shares
issued through dividend
reinvestment 344 1,770 220 264
Cost of shares redeemed (7,830) (8,195) (1,296) (1,255)
Increase (decrease) in net
assets from capital
transactions (6,252) (1,245) 2,490 (162)
Total increase (decrease)
in net assets 538 (2,988) 5,113 (80)
Net assets at beginning
of period 18,920 21,908 4,185 4,265
Net assets at end of period $19,458 $18,920 $9,298 $4,185
Accumulated undistributed
net investment income (loss) $ 0 $ 0 $ 0 $ 0
</TABLE>
<Page 23/24>
<TABLE>
<CAPTION>
Intermediate
Balanced Bond
Fund Fund
1999 1998 1999 1998
From investment activities:
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $145 $300 $743 $264
Net realized gain (loss) on
investments 2,152 (919) (54) 62
Net change in net unrealized
appreciation (depreciation)
on investments during the
period 190 1,716 (424) 39
Net increase (decrease) in net
assets from operations 2,487 1,097 265 365
Distribution from net
investment income (144) (300) (740) (264)
Distribution from short-term
capital gains, net (b) (765) (395) (7) (23)
Distribution from net realized
gains (237) (56) (10) (23)
Increase (decrease) in net
assets from investment
activities 1,341 346 (492) 55
From capital transactions
(Note 3):
Proceeds from shares sold 1,372 4,715 18,935 3,943
Net asset value of shares
issued through dividend
reinvestment 1,110 404 542 257
Cost of shares redeemed (8,863) (3,030) (5,788) (1,512)
Increase (decrease) in net
assets from capital
transactions (6,381) 2,089 13,689 2,688
Total increase (decrease)
in net assets (5,040) 2,435 13,197 2,743
Net assets at beginning
of period 14,489 12,054 6,676 3,933
Net assets at end of period $9,449 $14,489 $19,873 $6,676
Accumulated undistributed
net investment income (loss) $ 2 $ 2 $ 4 (a)
</TABLE>
Page 23
<TABLE>
<CAPTION>
Government
Money Market
Fund
1999 1998
From investment activities:
<S> <C> <C>
Operations:
Net investment income (loss) $193 $241
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 193 241
Distribution from net
investment income (193) (241)
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 6,542 5,724
Net asset value of shares
issued through dividend
reinvestment 186 233
Cost of shares redeemed (7,123) (6,326)
Increase (decrease) in net
assets from capital
transactions (395) (369)
Total increase (decrease)
in net assets (395) (369)
Net assets at beginning
of period 4,095 4,464
Net assets at end of period $3,700 $4,095
Accumulated undistributed
net investment income (loss) $ 0 $ 0
</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.
Page 23
Notes To Financial Statements December 31, 1999
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 with income as a secondary objective. 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, 1999
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, 1999,
Monetta Intermediate Bond Fund had accumulated capital loss carry
forwards for tax purposes of $28,202, which will expire on December
31, 2007.
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-term 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 year's net
investment income. The Monetta Large-Cap Equity Fund and Monetta
Mid-Cap Equity Fund had net operating losses for tax purposes of
$56,522 and $109,495, respectively, which were offset by short-term
capital gains and were reclassified from accumulated undistributed
net investment loss to accumulated undistributed net realized gain.
The Monetta Small-Cap Equity Fund had net operating losses for tax
purposes of $63,347 which were reclassified from accumulated
undistributed net investment loss to capital.
For the year ended December 31, 1999, the Monetta Balanced Fund,
Monetta Intermediate Bond Fund, and Monetta Large-Cap Equity Fund
paid long-term capital gains of $237,045, $10,251, and $195,944,
respectively. For corporate shareholders of the Monetta Large-Cap
Equity Fund, 31% of the income distributions for the year ended
December 31, 1999, qualify for the dividend received deduction.
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 the year ended December
31, 1999, 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 year ended December 31, 1999, for
the Intermediate Bond Fund were $25,653 of total fees of $44,893.
Investment advisory fees waived, and 12B-1 fees waived through December
31, 1999, for the Government Money Market Fund were $10,257, and $4,103,
respectively. Additionally, brokerage commissions of $660, $4,725 and
$200, were paid by the Monetta Fund, Mid-Cap Fund, and Balanced Fund,
respectively to Monetta Investment Services, L.L.C. during the year ended
December 31, 1999.
Page 25
Notes To Financial Statements December 31, 1999
Monetta Financial Services, Inc., as of December 31, 1999 owned 45,645
shares or 7.9% of the Balanced Fund, 18,092 shares or 7.4% of the Small-
Cap Fund, 80,069 shares or 2.2% of the Government Money Market Fund and
7,629 shares or 1.6% of the Large-Cap Fund. Monetta Financial Services,
Inc. owns less than 1% of the Intermediate Bond Fund, the Monetta Fund,
and the Mid-Cap Equity 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>
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) 116 (69) (8)
1999 beginning shares 8,333 297 1,394 311
Shares sold 397 56 82 224
Shares issued upon
dividend reinvestment 0 0 23 13
Shares redeemed (2,756) (109) (543) (85)
Net increase (decrease)
in shares outstanding (2,359) (53) (438) 152
Ending shares 5,974 244 956 463
</TABLE>
<TABLE>
<CAPTION>
Government
Intermediate Money
Balanced Bond Market
(In Thousands) Fund Fund Fund
<S> <C> <C> <C>
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)
1999 beginning shares 1,001 627 4,095
Shares sold 87 1,815 6,542
Shares issued upon
dividend reinvestment 77 52 186
Shares redeemed (584) (554) (7,123)
Net increase (decrease)
in shares outstanding (420) 1,313 (395)
Ending shares 581 1,940 3,700
</TABLE>
4. PURCHASES AND SALES OF INVESTMENT SECURITIES:
The cost of purchases and proceeds from sales of securities for the year
ended December 31, 1999, excluding short-term securities were: Monetta
Fund, $208,656,127 and $241,841,599 ; Small-Cap Fund, $8,472,282 and
$9,329,596; Mid-Cap Fund, $26,246,960 and $34,459,577; Large-Cap Fund,
$6,550,191 and $4,779,182; Balanced Fund, $6,568,626 and $13,834,833; and
Intermediate Bond Fund, $27,044,156 and $14,770,418. The cost of
purchases and proceeds from the sales of government securities included
in the preceding numbers were as follows: Balanced Fund, $402,609 and
$286,239; and Intermediate Bond Fund, $5,096,239 and $3,828,875.
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, 1999
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
1999 1998 1997 1996
<S> <C> <C> <C> <C>
Net asset value at
beginning of period $14.964 $17.274 $15.842 $15.591
Net investment income (loss) 0.075 (0.104) (0.041) (0.079)
Net realized and unrealized gain
(loss) on investments 7.672 (1.554) 4.223 0.330
Total from investment
operations: 7.747 (1.658) 4.182 0.251
Less:
Distributions from net investment
income 0.000 0.000 0.000 0.000
Distributions from short-term
capital gains, net (a) 0.000 (0.283) (1.910) 0.000
Distributions from net
realized gains 0.000 (0.369) (0.840) 0.000
Total distributions 0.000 (0.652) (2.750) 0.000
Net asset value at end of period $22.711 $14.964 $17.274 $15.842
Total return 51.80% (9.03%) 26.18% 1.60%
Ratio to average net assets:
Expenses 1.45% 1.36% 1.48% 1.38%
Net investment income 0.50% (0.64%) (0.24%) (0.51%)
Portfolio turnover 210.9% 107.5% 97.8% 204.8%
Net assets ($ millions) $135.7 $124.7 $163.4 $211.5
</TABLE>
<TABLE>
<CAPTION>
MONETTA FUND
1995
<S> <C>
Net asset value at
beginning of period $14.515
Net investment income (loss) 0.029
Net realized and unrealized gain
(loss) on investments 4.075
Total from investment
operations: 4.104
Less:
Distributions from net investment
income (0.028)
Distributions from short-term capital
gains, net (a) (3.000)
Distributions from net realized gains 0.000
Total distributions (3.028)
Net asset value at end of period $15.591
Total return 28.02%
Ratio to average net assets:
Expenses 1.36%
Net investment income 0.18%
Portfolio turnover 272.0%
Net assets ($ millions) $362.7
</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, 1999
Financial highlights for each Fund of the Trust for a share outstanding
throughout the period are as follows:
SMALL-CAP EQUITY FUND
<TABLE>
<CAPTION>
2/1/97
Through
1999 1998 12/31/97
<S> <C> <C> <C>
Net asset value at beginning of
period $13.396 $13.900 $10.000
Net investment income (loss) (0.264) (0.272) (0.148)
Net realized and unrealized
gain (loss) on investments 8.699 (0.136) 4.878
Total from investment operations 8.435 (0.408) 4.730
Less:
Distributions from net
investment income 0.000 0.000 0.000
Distributions from short-term
capital gains, net (a) 0.000 (0.096) (0.830)
Distributions from net
realized gains 0.000 0.000 0.000
Total distributions 0.000 (0.096) (0.830)
Net asset value at end of period $21.831 $13.396 $13.900
Total return* 62.91% (2.81%) 47.17%
Ratios to average net assets:
Expenses* 2.36% 2.39% 1.75%
Net investment income* (1.82%) (2.04%) (1.13%)
Portfolio turnover 265.0% 200.4% 138.8%
Net assets ($ thousands) $5,332 $3,980 $2,518
</TABLE>
<TABLE>
<CAPTION>
MID-CAP EQUITY FUND
1999 1998 1997 1996
<S> <C> <C> <C> <C>
Net asset value at beginning of
period $13.571 $14.975 $14.814 $11.962
Net investment income (loss) (0.099) 0.022 (0.045) 0.044
Net realized and unrealized
gain (loss) on investments 7.225 (0.266) 4.296 2.852
Total from investment operations 7.126 (0.244) 4.251 2.896
Less:
Distributions from net
investment income 0.000 (0.022) 0.000 (0.044)
Distributions from short-term
capital gains, net (a) (0.342) (0.477) (1.452) 0.000
Distributions from net
realized gains 0.000 (0.661) (2.638) 0.000
Total distributions (0.342) (1.160) (4.090) (0.044)
Net asset value at end of period $20.355 $13.571 $14.975 $14.814
Total return* 53.39% (0.85%) 29.14% 24.20%
Ratios to average net assets:
Expenses* 1.25% 1.21% 1.26% 1.23%
Net investment income* (0.67%) 0.15% (0.28%) 0.32%
Portfolio turnover 170.4% 237.6% 137.8% 93.3%
Net assets ($ thousands) $19,458 $18,920 $21,908 $17,338
</TABLE>
<TABLE>
<CAPTION>
MID-CAP EQUITY FUND
1995
<S> <C>
Net asset value at beginning of
period $12.199
Net investment income (loss) 0.059
Net realized and unrealized
gain (loss) on investments 2.874
Total from investment operations 2.933
Less:
Distributions from net
investment income (0.050)
Distributions from short-term
capital gains, net (a) (2.990)
Distributions from net
realized gains (0.130)
Total distributions (3.170)
Net asset value at end of period $11.962
Total return* 24.54%
Ratios to average net assets:
Expenses 1.25%
Net investment income 0.44%
Portfolio turnover 254.4%
Net assets ($ thousands) $14,216
</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, 1999
<TABLE>
<CAPTION>
LARGE-CAP EQUITY FUND
1999 1998 1997 1996
<S> <C> <C> <C> <C>
Net asset value at beginning of
period $13.437 $13.359 $12.266 $10.571
Net investment income (loss) (0.147) (0.068) (0.007) 0.023
Net realized and unrealized
gain (loss) on investments 7.297 1.074 3.250 2.928
Total from investment operations 7.150 1.006 3.243 2.951
Less:
Distributions from net
investment income 0.000 0.000 0.000 (0.023)
Distributions from short-term
capital gains, net (a) (0.078) (0.714) (1.113) (1.188)
Distributions from net
realized gains (0.447) (0.214) (1.037) (0.045)
Total distributions (0.525) (0.928) (2.150) (1.256)
Net asset value at end of period $20.062 $13.437 $13.359 $12.266
Total return* 53.98% 8.99% 26.64% 28.20%
Ratios to average net assets:
Expenses* 1.66% 1.86% 1.51% 1.51%
Net investment income* (0.91%) (0.52%) (0.05%) 0.31%
Portfolio turnover 81.4% 207.5% 123.2% 152.7%
Net assets ($ thousands) $9,298 $4,185 $4,265 $2,288
</TABLE>
<TABLE>
<CAPTION>
LARGE-CAP EQUITY FUND
9/1/95
Through
12/31/95
<S> <C>
Net asset value at beginning of
period $10.000
Net investment income (loss) 0.005
Net realized and unrealized
gain (loss) on investments 0.570
Total from investment operations 0.575
Less:
Distributions from net
investment income (0.004)
Distributions from short-term
capital gains, net (a) 0.000
Distributions from net
realized gains 0.000
Total distributions (0.004)
Net asset value at end of period$10.571
Total return* 5.74%
Ratios to average net assets:
Expenses* 0.69%
Net investment income* 0.05%
Portfolio turnover 38.2%
Net assets ($ thousands) $1,072
</TABLE>
<TABLE>
<CAPTION>
BALANCED FUND
1999 1998 1997 1996
<S> <C> <C> <C> <C>
Net asset value at beginning of
period $14.476 $14.078 $12.643 $10.605
Net investment income (loss) 0.239 0.290 0.264 0.132
Net realized and unrealized
gain (loss) on investments 3.741 0.838 2.398 2.598
Total from investment operations 3.980 1.128 2.662 2.730
Less:
Distributions from net
investment income (0.265) (0.286) (0.224) (0.132)
Distributions from short-term
capital gains, net (a) (1.468) (0.389) (0.927) (0.560)
Distributions from net
realized gains (0.455) (0.055) (0.076) 0.000
Total distributions (2.188) (0.730) (1.227) (0.692)
Net asset value at end of period $16.268 $14.476 $14.078 $12.643
Total return* 29.60% 8.59% 21.21% 25.94%
Ratios to average net assets:
Expenses* 0.95% 0.84% 1.02% 1.40%
Net investment income* 1.55% 2.06% 1.88% 1.54%
Portfolio turnover 71.3% 127.7% 115.9% 117.8%
Net assets ($ thousands) $9,449 $14,489 $12,054 $2,336
</TABLE>
<TABLE>
<CAPTION>
BALANCED FUND
9/1/95
Through
12/31/95
<S> <C>
Net asset value at beginning of
period $10.000
Net investment income (loss) 0.009
Net realized and unrealized
gain (loss) on investments 0.602
Total from investment operations 0.611
Less:
Distributions from net
investment income (0.004)
Distributions from short-term
capital gains, net (a) (0.002)
Distributions from net
realized gains 0.000
Total distributions (0.006)
Net asset value at end of period $10.605
Total return* 6.16%
Ratios to average net assets:
Expenses* 0.91%
Net investment income* 0.08%
Portfolio turnover 54.8%
Net assets ($ thousands) $410
</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 29
Notes To Financial Statements December 31, 1999
<TABLE>
<CAPTION>
INTERMEDIATE BOND FUND
1999 1998 1997 1996
<S> <C> <C> <C> <C>
Net asset value at beginning of
period $10.652 $10.445 $10.208 $10.244
Net investment income 0.602 0.592 0.599 0.612
Net realized and unrealized gain
(loss) on investments (0.435) 0.269 0.278 0.019
Total from investment operations 0.167 0.861 0.877 0.631
Less:
Distributions from net
investment income (0.565) (0.577) (0.592) (0.612)
Distributions from short-term
capital gains, net (a) (0.004) (0.038) (0.047) (0.055)
Distributions from net realized
gains (0.006) (0.039) (0.001) 0.000
Total distributions (0.575) (0.654) (0.640) (0.667)
Net asset value at end of period $10.244 $10.652 $10.445 $10.208
Total return 1.60% 8.38% 8.91% 6.46%
Ratios to average net assets:
Expenses - Net 0.54% 0.55% 0.65% 0.55%
Expenses - Gross (b) 0.74% 0.75% 0.87% 0.85%
Net investment income-Net 5.78% 5.59% 5.82% 5.75%
Net investment income-Gross (b) 5.58% 5.39% 5.60% 5.45%
Portfolio turnover 115.2% 52.0% 96.7% 28.9%
Net assets ($ thousands) $19,873 $6,676 $3,933 $2,769
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE BOND FUND
1995
<S> <C>
Net asset value at beginning of
period $9.624
Net investment income 0.655
Net realized and unrealized gain
(loss) on investments 0.740
Total from investment operations 1.395
Less:
Distributions from net
investment income (0.655)
Distributions from short-term
capital gains, net (a) (0.120)
Distributions from net realized
gains 0.000
Total distributions (0.775)
Net asset value at end of period $10.244
Total return 14.84%
Ratios to average net assets:
Expenses - Net 0.27%
Expenses - Gross (b) 0.75%
Net investment income-Net 5.94%
Net investment income-Gross (b) 5.46%
Portfolio turnover 75.1%
Net assets ($ thousands) $3,589
</TABLE>
<TABLE>
<CAPTION>
GOVERNMENT MONEY MARKET FUND
1999 1998 1997 1996
<S> <C> <C> <C> <C>
Net asset value at beginning of
period $1.000 $1.000 $1.000 $1.000
Net investment income 0.047 0.051 0.050 0.049
Net realized and unrealized gain
(loss) on investments 0.000 0.000 0.000 0.000
Total from investment operations 0.047 0.051 0.050 0.049
Less:
Distributions from net
investment income (0.047) (0.051) (0.050) (0.049)
Distributions from short-term
capital gains, net (a) 0.000 0.000 0.000 0.000
Distributions from net realized
gains 0.000 0.000 0.000 0.000
Total distributions (0.047) (0.051) (0.050) (0.049)
Net asset value at end of period $1.000 $1.000 $1.000 $1.000
Total return 4.85% 5.24% 5.15% 5.06%
Ratios to average net assets:
Expenses - Net 0.35% 0.32% 0.39% 0.31%
Expenses - Gross (b) 0.70% 0.68% 0.76% 0.67%
Net investment income-Net 4.71% 5.11% 5.02% 4.95%
Net investment income-Gross (b) 4.36% 4.76% 4.65% 4.59%
Portfolio turnover N/A N/A N/A N/A
Net assets ($ thousands) $3,700 $4,095 $4,464 $6,232
</TABLE>
<TABLE>
<CAPTION>
GOVERNMENT MONEY MARKET FUND
1995
<S> <C>
Net asset value at beginning of
period $1.000
Net investment income 0.059
Net realized and unrealized gain
(loss) on investments 0.000
Total from investment operations 0.059
Less:
Distributions from net
investment income (0.059)
Distributions from short-term
capital gains, net (a) 0.000
Distributions from net realized
gains 0.000
Total distributions (0.059)
Net asset value at end of period $1.000
Total return 5.87%
Ratios to average net assets:
Expenses - Net 0.07%
Expenses - Gross (b) 0.59%
Net investment income-Net 5.96%
Net investment income-Gross (b) 5.17%
Portfolio turnover N/A
Net assets ($ thousands) $4,393
</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
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, 1999, 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, 1999, 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, 1999, 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 18,2000
Page 31
[LOGO] Share Purchase Application [LOGO]
Use this form for individual custodial, trust, profit sharing, or
pension plan accounts. Do not use this form for Monetta Funds-sponsored
IRA, Defined Contribution (401(k) or 403(b)) plans which require forms
available from Monetta Funds. For information please call 1-800-666-3882.
1-800-MONETTA WWW.MONTTA.COM
A. Account Registration
[_]Individual [_]Joint Owner*
Name_______________________________ Birthdate________________
Social Security Number__________________Citizen of [_] US [_] Other
Joint Owner Name________________________Birthdate________________
Social Security Number__________________Citizen of [_] US [_] Other
* Registration will be Joint Tenants with Rights of Survivorship (JTWROS)
unless otherwise specified.
[_]Gift to Minor
Custodian_______________________________________________________________
Minor__________________________________________ Minor's Birthdate_________
Minor's Social Security Number__________________Citizen of [_] US [_] Other
[_]Corporation, Partnership, or Other Entity
Name of Legal Entity______________________________________________________
Taxpayer Identification Number______________________________________________
A corporation resolution form or certificate is required for
corporation accounts.
[_]Trust, Estate,or Guardianship
Name___________________________________________________________________
Name of Fiduciary(s)______________________________________________________
Taxpayer Identification Number________________________Date of Trust__________
Additional documentation and certification may be requested.
B. Mailing Address []Send Duplicate Confirmation To:
_____________________________________ ___________________________________
Street Address, Apt. # Name
_____________________________________ ___________________________________
City, State, Zip Code Street Address, Apt #
_____________________________________ ___________________________________
Daytime Phone Number City, State, Zip Code
- -----------------------------------------------------------------------------
C. Investment Choices
The minimum initial investment is $250 for shares in any of the
Monetta Funds. There is no minimum for subsequent investments; however, for the
Automatic Investment Plan, the minimum is $25.
Distribution Options
Dividends & Capital Gains
Contributions Reinvested Cash
[_]MONETTA FUND $____________ [_] [_]
[_]MONETTA SMALL-CAP EQUITY FUND $____________ [_] [_]
[_]MONETTA MID-CAP EQUITY FUND $____________ [_] [_]
[_]MONETTA LARGE-CAP EQUITY FUND $____________ [_] [_]
[_]MONETTA BALANCED FUND $____________ [_] [_]
[_]MONETTA INTERMEDIATE BOND FUND $____________ [_] [_]
[_]MONETTA GOV'T MONEY MARKET FUND $____________ [_] [_]
Total Amount Enclosed $____________ Will be reinvested if
no option checked.
Please see Section G for Bank Information
AUTOMATIC INVESTMENT PLAN
Amount Frequency Start Day of
Monthly Quarterly Month Month
$__________ [_] [_] ________ ________
$__________ [_] [_] ________ ________
$__________ [_] [_] ________ ________
$__________ [_] [_] ________ ________
$__________ [_] [_] ________ ________
$__________ [_] [_] ________ ________
$__________ [_] [_] ________ ________
D. Telephone Options
Your signed Application must be received at least 15 business days prior to
initial transaction.
An unsigned voided check (for checking accounts) or a savings
account deposit slip is required with your Application.
[_]Check if savings account
TELEPHONE REDEMPTION. The proceeds will be mailed to the address in
Section B. The telephone redemption privilege automatically
applies unless you check the box below.
[_]I DO NOT authorize telephone redemption
If you have not declined telephone redemption and you elect to have the
amount deposited (via wire payment) to your bank account, complete bank
account information below. A $12.00 fee will be charged to your account
for each wire transfer.
TELEPHONE EXCHANGE. Permits the exchange of shares between
identical registered accounts. The telephone exchange privilege
automatically applies unless you check the box below.
[_]I DO NOT authorize telephone exchange
[_]Telephone Redemption (ACH). The proceeds will be electronically sent to
your bank account. Complete bank account information below.
[_]Telephone Purchase (ACH). Permits the purchase of additional shares
using your bank account to clear the transaction. Minimum of $25.00.
Complete bank account information below.
Name(s) on Bank Account___________________ _______________________________
Bank Name______________________________ Bank Account Number_________________
Bank Address________________________________________________________________
______________________________________________________________________________
E. Checkwriting
(Monetta Government Money Market Fund Only. Not available for IRA or
other retirement accounts).
_____________________
Account Number|_____________________|
|_____________________|
(for Bank Use Only)
[_]Check this box if you would like to establish check redemption
privileges for the Monetta Government Money Market Fund and have 10 checks
and 2 deposit forms printed. Each additional book of checks and deposit
forms will be $5.00. This amount will be deducted from your account.
Check redemption privileges are subject to the conditions on the reverse
side.
______________________________________________________________________________
Name on Monetta Government Money Market Fund Account (must be the same as
Account Registration-please print)
______________________________________ ____________________________________
Authorized Signature(s) (For joint accounts, all owners must sign)
For a corporate, trust, other entity, or joint account, how many authorized
signatures are required?__________________
<PAGE>
______________________________________________________________________________
F. Backup Withholding
[] Check this box only if the IRS has notified you that you are
subject to backup withholding.
______________________________________________________________________________
G. Bank Information for Automatic Investment Plan (AIP)
Your signed Application must be received at least 15 business days prior to
initial transaction.
An unsigned voided check from your checking account or a savings account
deposit slip is required with your application.
[_]Check if savings account
Name(s) on Bank Account____________________________________________________
Bank Name____________________________Bank Account Number__________________
Bank Address ______________________________________________________________
_________________________________________ ________________________________
Signature of Bank Account Owner Signature of Joint Owner
* Termination must be in writing or by calling Firstar Trust Company.
Allow 5 business days to become effective. Your participation in the Plan
will terminate automatically if you redeem all your Monetta fund shares.
* IRA contributions apply as a current year purchase (purchases may not be
used for prior year contributions).
______________________________________________________________________________
H. Signature & Certification
I affirm that I have received a current prospectus of the Funds and
agree to be bound by its terms. I certify that I have full authority and
legal capacity to purchase shares of the Fund(s) and to establish and use
any related privileges, and agree that such privileges and their terms and
conditions shall be governed by Illinois law. If I have not provided a
social security or other tax identification number in Part A of the
application, by signing the application, I: (i) certify, under penalties of
perjury, that I have not been issued a number but have applied (or
soon will apply) for one; and (ii) understand that if I do
not provide the Funds or their transfer agent with a certified number
within 60 days, they will be required to withhold 31% from all dividend,
capital gain, and redemption payments from my account(s) until I
provide them with a certified number.
I understand that the Telephone Redemption and Exchange Privilege(s) will
apply to my account unless I have specifically declined the privilege in
Part D of this application. I understand that by signing this
application, unless the Privilege(s) is declined, I agree that neither the
Funds nor their transfer agent, their agents, officers, trustees or
employees will be liable for any loss, liability, cost or expense for
acting instructions given under the Privilege(s), placing the risk of any
loss on me. See "How to Redeem Shares - By Exchange" in the prospectus.
I agree that any of the Funds and their transfer agent may redeem shares
and retain the proceeds from any of my account(s) with any Fund(s) up to a
total of (a) any IRS penalties attributed to my failure to provide any of
the Funds or their transfer agent with correct and complete information
requested by either, and (b) any tax not withheld from distributions to me
which should have been withheld by them.
UNDER THE PENALTY OF PERJURY, I CERTIFY THAT (1) THE SOCIAL SECURITY NUMBER
OR TAXPAYER IDENTIFICATION NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER
IDENTIFICATION NUMBER AND (2) I AM NOT SUBJECT TO BACKUP WITHHOLDING AS A
RESULT OF A FAILURE TO REPORT ALL INTEREST OR DIVIDENDS, OR THE IRS HAS
NOTIFIED ME THAT I AM NO LONGER SUBJECT TO BACKUP WITHHOLDING. THE IRS
DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN
THE CERTIFICATION IN THIS PARAGRAPH REQUIRED TO AVOID BACKUP WITHHOLDING.
(Note: you must check the box in Part F of this application if the
IRS has notified you that you are subject to backup withholding due to
your failure to report such income).
____________________________________ ______________________________________
Signature* Date Signature of Co-Owner, if any Date
* If shares are to be registered in the name of (1) two persons jointly, both
persons must sign, (2) a custodian for a minor, the custodian must
sign, (3) a trust, the trustee(s) must sign, or (4) a corporation
or other entity, an officer must sign and print name and title on space below.
______________________________________________________________________________
Print name and title of officer signing for a corporation or other entity.
______________________________________________________________________________
I. Dealer Information
(Required only if purchasing through a Broker/Dealer.)
Please be sure to complete representative's first name and middle initial.
____________________________________ _________________________________________
Dealer Name Representative's Last Name First Name MI
DEALER HEAD OFFICE REPRESENTATIVE'S BRANCH OFFICE
____________________________________ _________________________________________
Address Address
____________________________________ _________________________________________
City, State Zip City, State, Zip
____________________________________ _________________________________________
Telephone Number Telephone Number
B.N. 0___ ___ ___ ___ _________________________________________
For Internal Use Only Rep's A.E. Number
______________________________________________________________________________
Make Checks Payable to Monetta Funds
Overnight Express Mail to: Mail Completed Application to:
Monetta Funds Monetta Funds
c/o Firstar Trust Company c/o Firstar Trust Company
615 East Michigan Street Mutual Fund Services
3rd Floor P.O. Box 701
Milwaukee, WI 53202 Milwaukee, WI 53202-0701
_____________________________________________________________________________
J. Condition of Redemption Option
Checks may not be for less than $500 or such other minimum amounts as may
from time to time be established by the Monetta Government Money Market
Fund upon prior written notice to its shareholders. Maximum amount for
withdrawal is $50,000. Shares purchased by check (including
certified or cashier's check), will not be redeemed by checkwriting or any
other method of redemption until the transfer agent is reasonably satisfied
that the check has been collected, which could take up to 7 days
from the purchase date.
By signing this card, I appoint the Firstar Bank Milwaukee, NA, my
agent to present checks drawn on this account to the transfer agent,
Firstar Trust Company, as requests to redeem shares and I authorize
the Monetta Government Money Market Fund and Firstar Trust Company to honor
such requests and redeem shares in an amount equal to the amount of the
check. I agree to be subject to the rules pertaining to the check
redemption privileges as amended from time to time. The Monetta Government
Money Market Fund or Firstar Trust Company may reserve the right to modify
or terminate this account and authorization at any time.
<PAGE>
<PAGE>
PART C -- OTHER INFORMATION
---------------------------
Item 23. Exhibits
- - ------- ---------
(a) Agreement and declaration of trust (1)
(b) Bylaws (1)
(c) None
(d) Investment Advisory Agreement with Monetta Financial Services,
Inc. (2)
(e) Distribution Agreement with Funds Distributor, Inc.(2)
(f) None
(g)(1) Custody agreement with Firstar Trust Company (1)
(g)(2) Addendum to Custody Agreement with Firstar Trust Company adding
Monetta Large-Cap Fund and Monetta Balanced Fund to Custody
Agreement (1)
(g)(3) Addendum to Custody Agreement with Firstar Trust Company
adding Monetta Small-Cap Fund to Custody Agreement (2)
(h)(1) Transfer agency agreement with Firstar Trust Company (1)
(h)(2) Addendum to Transfer Agency Agreement with Firstar Trust Company
adding Monetta Large-Cap Fund and Monetta Balanced Fund to Transfer
Agency Agreement (1)
(h)(3) Addendum to Transfer Agency Agreement with Firstar Trust Company
adding Monetta Small-Cap Fund to Transfer Agency Agreement (2)
(i)(1) Opinion of counsel dated January 18, 1993 (1)
(i)(2) Opinion of counsel with respect to Monetta Large-Cap Equity
Fund and Monetta Balanced Fund dated August 1, 1995 (1)
(i)(3) Opinion of counsel with respect to Monetta Small-Cap Equity
Fund dated January 30, 1997 (2)
C-1
<PAGE>
(i)(4) Opinion of counsel with Respect to Monetta Large-Cap Equity Fund
and Monetta Balanced Fund dated August 1, 1995 (1)
(i)(5) Opinion of counsel with respect to Monetta Small-Cap Equity Fund
dated January 27, 1997 (2)
(j)(1) Consent of independent auditors
(j)(2) Consent of counsel
(k) Not applicable
(l) Subscription agreement (1)
(m) Service and Distribution Plan (1)
(n) Not applicable
(p) Code of Ethics
- - ------
(1) Previously filed as an exhibit to post-effective amendment no. 8
to Registrant's registration statement on Form N-1A no. 33-54822, and
incorporated herein by reference.
(2) Previously filed as an exhibit to post-effective amendment no. 2
to Registrant's registration statement on form N-1A no. 33-54822, and
incorporated herein by reference.
(3) Previously filed as an exhibit to pre-effective amendment no. 9
to Registrant's registration statement on Form N-1A no. 33-54822, and
incorporated herein by reference.
(3) Previously filed as an exhibit to pre-effective amendment no. 9
to Registrant's registration statement on form N-1A no. 33-54822, and
incorporated herein by reference.
Item 24. Persons Controlled By or Under Common Control with Registrant
- - ------- -------------------------------------------------------------
The registrant does not consider that there are any persons directly
or indirectly controlling, controlled by, or under common control with, the
registrant within the meaning of this item. The information in the prospectus
under the caption "Management of The Fund" and in the Statement of Additional
Information under the captions "Investment Adviser" and "Directors/Trustees and
Officers" is incorporated by reference.
C-2
<PAGE>
Item 25. Indemnification
- - ------- ---------------
Article VIII of the agreement and declaration of trust of registrant
(exhibit 1 to this registration statement, which is incorporated herein by
reference) provides in effect that registrant shall provide certain
indemnification of its trustees and officers. In accordance with Section 17(h)
of the Investment Company Act, that provision shall not protect any person
against any liability to the registrant or its shareholders to which he would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a trustee, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed
in the Act and will be governed by the final adjudication of such issue.
Item 26. Business and Other Connections of Investment Adviser
- - ------- ----------------------------------------------------
Monetta Financial Services, Inc. ("MFSI"), registrant's investment
adviser, also acts as investment adviser to Monetta Fund, Inc. and to
individual
and institutional clients. The directors and officers of MFSI are: Robert S.
Bacarella, Chairman, President and Director; and Maria C. DeNicolo, Chief
Financial Officer, Secretary, Treasurer and Director.
The information in the Statement of Additional Information under the heading
"Directors/Trustees and Officers" describing the principal occupations
and other affiliations of Mr. Bacarella, and Ms. DeNicolo is incorporated
herein by reference.
C-3
<PAGE>
Item 27. Principal Underwriters
- - ------- ----------------------
(a) Funds Distributor, Inc. (the "Distributor") also acts as
principal underwriter for the following investment companies:
BJB Investment Funds
Burridge Funds
Foreign Fund, Inc.
Fremont Mutual Funds Inc.
Harris Insight Funds Trust
HT Insight Funds, Inc. d/b/a Harris Insight Funds
The JPM Advisor Funds
The JPM Institutional Funds
The JPM Pierpont Funds
LKCM Fund
The Munder Funds Trust
The Munder Funds, Inc.
The PanAgora Institutional Funds
RCM Capital Funds, Inc.
RCM Equity Funds, Inc.
St. Clair Money Market Fund
Skyline Funds
Waterhouse Investors Cash Management Fund, Inc.
Funds Distributor is registered with the Securities and Exchange
Commission as a broker-dealer and is a member of the National
Association of Securities Dealers. Funds Distributor is an indirect
wholly-owned subsidiary of Boston Institutional Group, Inc., a
holding company all of whose outstanding shares are owned by
key employees.
(b) The information required by this Item 29(b) with respect to
each director, officer, or partner of Funds Distributor is
incorporated by reference to Schedule A of Form BD filed by Funds
Distributor with the Securities and Exchange Commission pursuant
to the Securities Act of 1934 (File No. 8-20518).
(c) Not applicable
Item 28. Location of Accounts and Records
- - ------- --------------------------------
Maria C. DeNicolo
Monetta Financial Services, Inc.
1776-A South Naperville Road, Suite 100
Wheaton, Illinois 60187-8133
C-4
<PAGE>
Item 29. Management Services
- - ------- -------------------
None
Item 30. Undertakings
- - ------- ------------
(a) Not applicable
(b) Not applicable
(c) Registrant undertakes to furnish each person to whom a
prospectus is delivered, upon request and without charge,
a copy of Registrant's most recent annual report to
shareholders.
(d) Registrant undertakes to call a meeting of shareholders for the
purpose of voting upon the question of removal of a trustee or
trustees when requested to do so by the holders of at least
10% of Registrant's outstanding shares of beneficial
interest, and in connection with such meeting to comply
with the provisions of section 16(c) of the Investment
Company Act of 1940.
C-5
<PAGE>
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the registrant certifies that it meets all of
the requirements for effectiveness of this registration statement pursuant to
rule 485(b) under the Securities Act of 1933 and has duly caused this amendment
to the registration statment to be signed on its behalf by the undersigned duly
authorized Officer.
MONETTA TRUST
By: /s/ Robert S. Bacarella
--------------------------------------
Robert S. Bacarella, President
Pursuant to the requirements of the Securities Act of 1933, this
amendment to the registration statement has been signed below by the following
persons in the capacities and on the dates indicated.
Name Title Date
---- ----- ----
/s/ Robert S. Bacarella Trustee and President )
- - --------------------------- (principal executive officer) )
Robert S. Bacarella )
)
)
/s/ John W. Bakos Trustee )
- - --------------------------- )
John W. Bakos )
)
)
/s/ John L. Guy, Jr. Trustee )
- - --------------------------- )
John L. Guy, Jr. )
)
/s/ Mark F. Ogan )
- - --------------------------- Trustee )
Mark F. Ogan )February 10, 2000
)
)
)
)
/s/ William Valiant Trustee )
- - -------------------------- )
William Valiant )
)
/s/ Maria Cesario De Nicolo )
- - --------------------------- Treasurer )
Maria Cesario De Nicolo (principal financial officer) )
<PAGE>
INDEX OF EXHIBITS FILED WITH THIS AMENDMENT
Exhibit
NUMBER EXHIBIT
(j)(1) Consent of independent auditors
(j)(2) Consent of counsel
(p) Code of Ethics
<PAGE>
exhibit (j)(1)
CONSENT OF INDEPENDENT AUDITORS
To the Board of Directors and Shareholders
of Monetta Fund, Inc. and Monetta Trust:
We consent to the use of our report which is incorporated herein by reference
into the Statement of Additional Information and to the reference to our Firm
under the hedings "Financial Highlights" in the Prospectus and "Independent
Auditors" in the Statement of Additinal Information.
/s/ KPMG LLP
Chicago, Illinois
April 20, 2000
<PAGE>
exhibit (j)(2)
CONSENT OF LEGAL COUNSEL
We hereby consent to the reference to our firm under the caption "Service
Providers - Legal Counsel" in the Prospectus and Statement of Additional
Information.
/s/ Sonnenschein Nath & Rosenthal
Chicago, Illinois
April 25, 2000
<PAGE>
exhibit (p)
MONETTA FINANCIAL SERVICES, INC.
MONETTA TRUST
MONETTA FUND, INC.
TO EACH DIRECTOR, TRUSTEE, OFFICER, AND EMPLOYEE OF MONETTA FINANCIAL
SERVICES, INC. ("MFSI"), MONETTA TRUST ("MONETTA TRUST"), AND MONETTA FUND,
INC. ("MONETTA FUND").
CODE OF ETHICS
(Adopted January 1, 1996)
amendment # 1 February 12, 1998
The policy of MFSI is to avoid any conflict of interest, or the
appearance of any conflict of interest, between the interests of MONETTA
TRUST and MONETTA FUND and their respective shareholders and outside board
members (as defined below) and the interests of MFSI or its officers,
directors, partners, and employees. The Investment Company Act and rules
require that Monetta Trust, Monetta Fund, and MFSI establish standards and
procedures for the detection and prevention of certain conflicts of
interest. including activities by which persons having knowledge of the
investments and investment intentions of Monetta Trust or Monetta Fund
might take advantage of that knowledge for their own benefit.
Implementation and monitoring of those standards inevitably places some
restrictions on the freedom of the investment activities of those people.
This Code of Ethics has been adopted by Monetta Trust and Monetta Fund
(which are referred to together in this Code as the "Funds" and sometimes
separately as a "Fund") and by MFSI to meet those concerns and legal
requirements. Any questions about the Code or about the applicability of
the Code to a personal securities transaction should be directed to MFSI's
designated compliance officer or counsel for the Funds.
A Compliance Committee composed of the designated compliance officer
and such other members as may from time to time be identified, or its
designate, will be responsible for the approval and/or waiver of all
actions required to be taken by any individual in compliance with this Code
of Ethics. The compliance officer and the members of the Compliance
Committee are identified on Schedule A attached hereto, which may be
revised from time to time by action of the boards of the Funds.
I. STATEMENT OF PRINCIPLE
A. RESPONSIBILITY GENERALLY
The doctrine of insistence that an agent of a corporation
can serve only the corporation has long been recognized by our
courts even in the absence of a statute. Because a director,
officer, or employee is a fiduciary with respect to
<PAGE 1>
the company, he or she must take no step which directly or
indirectly has the effect of giving him or her a profit which
properly belongs to the corporation or of causing the corporation
to lose a profit.
We often hear violation of this duty referred to as a
"seizure of corporate opportunity." This phrase means just one
thing; i.e., a corporation's agent who becomes aware of a
business opportunity suitable for the corporation cannot, at the
expense of the corporation, avail himself or herself of that
opportunity for his or her personal gain. The doctrine goes so
far that if a director, officer, or employee has availed himself
or herself of an opportunity which properly belonged to the
corporation, any profit he or she derives from the transaction
may be recovered by the corporation.
To be even more definite, an officer or employee of MFSI and
the Funds, and a director to the extent of his or her activities
as such, must devote his or her efforts to the interests of the
MFSI and the Funds and MFSI and the Funds' interest is paramount.
He or she must not make use of any knowledge or opportunity which
he or she obtains in connection with his or her duties to derive
a personal profit in violation of his or her duty to, or contrary
to the interest of, MFSI and the Funds.
A person serving in a dual capacity as director, officer, or
employee of MFSI and the Funds and of another organization is
required to observe all provisions of this Code with respect to
any work activity or matters involving MFSI and the Funds or
their interests. Thus, in all instances where one acts as
director, officer, or employee of the Funds, he or she must do so
with undivided fidelity to the interests of MFSI and the Funds
for whom he or she is acting as director, officer, or employee
and must not allow his or her personal interest, or his or her
relationship to any other person or company, or the interest of
any other person or company, to influence his or her acts of
judgment.
B. THE INVESTMENT COMPANY ACT OF 1940
In 1940, Congress passed the "Investment Company Act of
1940" to mitigate and, insofar as feasible, eliminate and prevent
conditions and practices which adversely affect the national
public interest and the interest of investors. The underlying
aim of this Act, as well as the entire series of Federal
Securities Laws, is to see that fair and equitable standards and
practices are followed by investment companies and their
affiliated persons, and to this extent give protection to those
of the public who purchase securities. This enactment has direct
application to the Funds and their operations and activities.
The Investment Company Act of 1940 recognizes that
directors, officers, and employees must deal fairly with the
Funds and prescribes certain rules to govern them. It
specifically prohibits substantially all types of financial
<PAGE 2>
transactions, either directly or indirectly, between an
investment company and any affiliated person (director, officer,
employee, etc.) or promoter of, or principal underwriter for the
investment company, such as MFSI or any affiliated person of such
a person acting as principal. The only exceptions to these
prohibited dealings are those with respect to investment
management and distribution contracts, the purchase and
redemption of the investment company's shares, and those
transactions covered by specific orders of consent of the
Securities and Exchange Commission. The prohibitions are
designed to prevent a person who is connected with an investment
company from using such relationship, or the influence or
knowledge resulting therefrom, to make a personal gain
inconsistent with, or contrary to, the best interests of the
investment company.
Under the provisions of the Investment Company Act of 1940,
each director, officer, or employee of an investment company is
affiliated with it. You are also affiliated with another company
if you are a director, officer, or employee of such other
company. You may also be affiliated with a company if you own 5%
or more of its voting stock. Under such circumstances,
transactions between you and the Funds, or between another
company with which you are affiliated and the Funds, are,
generally, prohibited. Specifically, no director, officer, or
employee can borrow money from the Funds, or buy from or sell to
MFSI and the Funds, any property without an order of consent of
the Securities and Exchange Commission. The restriction and
penalty is upon the director, officer, or employee who so
borrows, buys, or sells.
The statute further makes it unlawful for a director,
officer, or employee of the Funds, or any affiliated person of
the latter, to act as an agent and accept from any source any
compensation in connection with the purchase or sale of any
property to or for the Funds except in the capacity of
underwriter or broker at customary fees, which must be disclosed.
The basic principle underlying this prohibition is that a person
connected with the Funds is not permitted to make any money out
of such transaction, except that regular and customary brokerage
commissions on securities bought or sold are permitted at usual
and customary brokers' rates, and this must be disclosed.
The Investment Company Act of 1940, as amended in 1970,
prohibits insider trading in securities held or to be acquired by
an investment company in contravention of rules and regulations
promulgated by the Securities and Exchange Commission. The
legislative history indicates that such legislation was adopted
to prohibit "insiders" from making personal profits by taking
advantage of their knowledge of the investment company's plans.
In 1980, the Commission adopted Rule 17j-1 under the insider
trading provision. This rule generally proscribes fraudulent or
manipulative practices with respect to securities held or to be
held by the Funds, requires that a code of ethics be adopted, and
contains certain reporting and recordkeeping requirements.
<PAGE 3>
A violation of the Investment Company Act of 1940 may be
punished by a maximum fine of $10,000 or by imprisonment for not
more than five years, or both.
C. GENERAL PROHIBITIONS
1. The Investment Company Act and rules thereunder make it
illegal for any person covered by the Code, directly or
indirectly, in connection with the purchase or sale of a
security held or to be acquired by the Funds to:
a. employ any device, scheme, or artifice to defraud the
Funds;
b. make to the Funds any untrue statement of a material
fact or omit to state to the Funds a material fact
necessary in order to make the statements made, in
light of circumstances under which they are made, not
misleading;
c. engage in any act, practice, or course of business
which operates or would operate as a fraud or deceit
upon the Funds; or
d. engage in any manipulative practice with respect to the
Funds.
2. In addition, no person subject to the Code shall:
a. establish any unrecorded fund or bookkeeping account
for any purpose;
b. disclose to any person any information or data of or
about the Funds which is not otherwise lawfully
publicly available, including information relating to
recommendations or authorizations with respect to the
purchase and sale of securities by the Funds and the
execution thereof,
c. falsely report or record any expenditure of Funds'
moneys;
d. accept or perform any outside employment which
interferes with the efficient performance of his or her
duties to MFSI, Monetta Trust, and Monetta Fund; have
any outside employment incompatible with employment by
the Funds or have an affiliation with an investment
company, broker, dealer or underwriter (except the
Funds' investment manager or underwriter); except that
officers and employees may render personal services for
compensation outside business hours when such activity
is not in conflict with the foregoing. If such outside
activities result in compensation for personal services
in any week in excess of 20% of the weekly
<PAGE 4>
remuneration paid such employee by the Funds,
the continuance of such activity must be
approved in writing by the President; or
e. engage, directly or indirectly, in any business
transaction or arrangement for personal profit,
monetary or otherwise, which accrues from or is based
upon his or her employment relationship with MFSI or
MFSI's or such person's relationship to the Funds, or
upon confidential information or opportunities gained
by reason of such relationships.
D. PERSONAL SECURITIES TRANSACTIONS. The Code regulates personal
securities transactions as a part of the effort by the Funds and
MFSI to detect and prevent conduct that might violate the general
prohibitions outlined above. A personal securities transaction
is a transaction in a security in which the person subject to
this Code has a beneficial interest.
Security is interpreted very broadly for this purpose. and
includes any right to acquire any security (an option or warrant,
for example).
You have a beneficial interest in a security that you own
individually, jointly, or as a guardian, executor, or trustee, or
in which you or your spouse or minor children or other dependents
living in your household have an interest. Technically, the
rules under Section 16 of the Securities Exchange Act of 1934
will be applied to determine if you have a beneficial interest in
a security (even if the security would not be within the scope of
Section 16). Any question about whether you have a beneficial
interest in a security should be directed to MFSI's designated
compliance officer or counsel to the Funds.
In any situation where the potential for conflict exists,
transactions for the Funds must take precedence over any personal
transaction. The people subject to this Code owe a duty to the
Funds and their shareholders to conduct their personal securities
transactions in a manner which does not interfere with the
portfolio transactions of the Funds, otherwise take inappropriate
advantage of their relationship with the Funds, or create any
actual or potential conflict of interest between their interests
and the interests of the Funds and their shareholders.
Situations not specifically governed by this Code of Ethics
will be resolved in light of this general principle.
II. HOW THE CODE'S RESTRICTIONS APPLY
The restrictions on personal securities transactions in Section
III and the compliance procedures in Section IV differentiate among
groups of people based on their positions and responsibilities with
the Funds and MFSI. The groups are: investment personnel, access
personnel, and outside board members.
<PAGE 5>
A. INVESTMENT PERSONNEL (individually an "investment person") are
those who make, or participate in making, or obtains information
regarding investment decisions or recommendations for the Funds
or other clients. Investment personnel are:
. each portfolio manager;
. each analyst working for MFSI; and
. each trader.
B. ACCESS PERSONNEL (INDIVIDUALLY, AN "ACCESS PERSON"are:
. all employees of MFSI who are not investment personnel
described above;
. all members of the board of MFSI and
. all members of the boards of Monetta Trust or Monetta Fund
who are "interested persons," as defined in the Investment
Company Act of 1940, but who are not employees of MFSI. The
non-employee interested board members are those persons
listed on Schedule B attached hereto.
C. OUTSIDE BOARD MEMBERS are those members of the board of Monetta
Trust or Monetta Fund who are not affiliated with MFSI, are not
officers or 5% shareholders of Monetta Trust or Monetta Fund, and
are not otherwise "interested persons" of MFSI. The outside
board members are those persons listed on Schedule C attached
hereto.
III. RESTRICTIONS ON PERSONAL SECURITIES TRANSACTIONS
A. NO TRANSACTIONS WITH THE FUNDS. No investment person, access
person, or outside board member shall knowingly sell to, or
purchase from a Fund, any security or other property, except
securities issued by that Fund.
B. NO CONFLICTING TRANSACTIONS. No investment person, access
person, or outside board member shall purchase or sell for his
own personal account and benefit, or for the account and benefit
of any relative, any security which the person knows or has
reason to believe is being purchased or sold or considered for
purchase or sale by a Fund, until the Fund's transactions have
been completed or consideration of such transactions has been
abandoned.
This section shall not restrict purchases or sales for the
accounts of MFSI's other clients provided that the Funds and
those accounts are treated fairly and equitably in connection
with those purchases and sales.
<PAGE 6>
NOTE: RESTRICTIONS C THROUGH G BELOW DO NOT APPLY TO THE OUTSIDE
BOARD MEMBERS OF MONETTA TRUST OR MONETTA FUND.
C. INITIAL PUBLIC OFFERINGS. No investment person or access person,
other than those listed in Schedule B, shall acquire any security
in an initial public offering; provided that access personnel
listed on Schedule B may acquire a security in an initial public
offering if (i) such security is acquired from a broker-dealer
not affiliated with the Funds.
D. PRIVATE PLACEMENTS. No investment person or access person shall
acquire any security in a private placement without the express
written prior approval of the Compliance Committee. In deciding
whether that approval should be granted, members of the
Compliance Committee will consider whether the investment
opportunity should be reserved for the Funds and their
shareholders, and whether the opportunity has been offered
because of the person's relationship with the Funds. An
investment person who has been authorized to acquire a security
in a private placement must disclose that investment if he or she
later participates in consideration of an investment in that
issuer by a Fund. Any investment decision for a Fund relating to
that security must be made by other investment personnel.
E. SHORT-TERM TRADING. No investment person may profit from the
purchase and sale, or sale and purchase, during the time the same
or an equivalent security is held by the Funds without the
express written approval of the Compliance Committee. If the
subject security is sold by the Funds, then the investment person
shall be entitled to purchase or sell the security, as the case
may be, subject, however, to paragraph C, of Section IV, below.
Any profit so realized in violation of this restriction will be
required to be donated to a charitable organization selected by
MFSI's Compliance Committee. This restriction does not apply to
any profits from short-term trading in listed index options or
futures contracts, or to any transaction which has received the
prior approval of the Compliance Committee.
F. GIFTS. No investment person or access person may accept any gift
or other thing of more than a $100 value from any person or
entity that does business with or on behalf of MFSI or the Funds,
or seeks to do business with or on behalf of MFSI or the Funds.
Gifts in excess of this value must either be returned to the
donor or paid for by the recipient. It is not the intent of the
Code to prohibit the everyday courtesies of business life.
Therefore, excluded from this prohibition are an occasional meal,
ticket to a theater, entertainment, or sporting event that is an
incidental part of a meeting that has a clear business purpose.
G. SERVICE AS A DIRECTOR. No investment person or access person may
serve as a member of the board of directors or trustees of any
business organization, other than a civic or charitable
organization, without the prior written approval of the
Compliance Committee based on a determination that the board
service would not be inconsistent with the interests of MFSI or
the Funds and their shareholders. If
<PAGE 7>
an investment person is serving as a board member, that
investment person shall not participate in making investment
decisions relating to the securities of the company on whose
board he or she sits.
IV. COMPLIANCE PROCEDURES
NOTE: PROCEDURES A THROUGH C BELOW DO NOT APPLY TO THE OUTSIDE BOARD
MEMBERS OF MONETTA TRUST OR MONETTA FUND.
A. EXECUTION OF PERSONAL SECURITIES TRANSACTIONS. All personal
securities transactions of investment personnel and access
personnel must be conducted through brokerage accounts that have
been identified to the compliance officer. Each such brokerage
account must be set up to deliver duplicate copies of all
confirmations and statements to the compliance officer. No
exceptions will be made to this policy.
B. PRECLEARANCE. Except as provided below, all personal securities
transactions for INVESTMENT PERSONNEL AND ACCESS PERSONNEL must
be cleared in advance in writing by the Compliance Committee. If
the proposed trade is not executed within two business days after
preclearance, the preclearance will expire and the request must
be made again.
Transactions in the following securities are exempt from the
preclearance requirement:
1. securities listed as exempt in Section V;
2. municipal securities; and
3. listed index options and futures.
C. BLACKOUT PERIODS.
1. No personal securities transaction of an investment person
or an access person will be cleared (as provided in B.
above) if a Fund or any client (1) has a conflicting order
pending or (2) is actively considering a purchase or sale of
the same security. A conflicting order is any order for the
same security, or an option on or warrant for that security,
that has not been fully executed. A purchase or sale of a
security is being "actively considered" (a) when a
recommendation to purchase or sell has been made for a Fund
and is pending, or (b) with respect to the person making the
recommendation when that person is seriously considering
making the recommendation.
<PAGE 8>
.
D. DISCLOSURE OF PERSONAL HOLDINGS. Each investment person and
access person shall disclose his or her personal securities
holdings (limited to holdings with a value of $500 or more) upon
commencement of employment with MFSI, and annually thereafter, as
of December 31 of each year. Reports shall be delivered to the
compliance officer no later than January 31.
E. REPORTING PERSONAL SECURITIES TRANSACTIONS.
1. An outside board member shall report to MFSI's compliance
officer, within ten days after the end of the calendar
quarter in which a reportable transaction occurs; any
personal securities transaction in which the outside board
member, at the time of the transaction, knew; or in the
ordinary course of fulfilling his duties as a board member
should have known that, on the day of the transaction or
within 15 days before or after that day, a purchase or sale
of that security was made by or considered for the Fund of
which he is a board member.
2. Investment and access personnel shall (i) identify to MFSI
any brokerage account in which the access person has a
beneficial interest and (ii) instruct the broker to deliver
to MFSI's compliance officer duplicate confirmations of all
transactions and duplicate monthly statements. A signed
report form must be returned to the compliance officer
within 10 days after the end of the calendar quarter.
F. FORM OF REPORTS. Reports of personal securities transactions may
be in any form (including copies of confirmations or monthly
statements) but must include (i) the date of the transaction, the
title and number of shares, and the principal amount of each
security involved; (ii) the nature of the transaction (i.e.,
purchase, sale, Gift, or other type of acquisition or
disposition); (iii) the price at which the transaction was
effected; (iv) the name of the broker, dealer, or bank with or
through whom the transaction was effected; and (v) the name of
the reporting person.
G. MONITORING OF TRANSACTIONS. MFSI's compliance officer will
monitor the trading patterns of investment personnel and access
personnel. The Compliance Committee will monitor the trading of
the compliance officer.
H. CERTIFICATION OF COMPLIANCE. Each investment person, access
person, and outside board member is required to certify annually
that he or she has read and understands the Code and recognizes
that he or she is subject to the Code. Each investment person,
access person and outside board member is required to certify
annually that he or she has disclosed or reported all personal
securities transactions required to be disclosed or reported
under the Code. To accomplish this, the Secretary of Monetta
Trust and Monetta Fund shall annually distribute a copy of the
Code and request certification by all covered persons.
<PAGE 9>
The Secretary shall be responsible for ensuring that all
personnel comply with the certification requirement.
I. REVIEW BY THE FUNDS' BOARDS. The officers of Monetta Trust and
Monetta Fund shall prepare an annual report to the board that:
1. summarizes existing procedures concerning personal investing
and any changes in those procedures during the past year;
2. identifies any violations of the Code requiring significant
remedial action during the past year; and
3. identifies any recommended changes in existing restrictions
or procedures based upon experience under the Code, evolving
industry practices, or developments in applicable laws or
regulations.
V. EXEMPT TRANSACTIONS
The provisions of this Code are intended to restrict the personal
investment activities of persons subject to the Code only to the
extent necessary to accomplish the purposes of the Code. Therefore,
the provisions of Section III (Restrictions on Personal Securities
Transactions) and Section IV (Compliance Procedures) of this Code
shall not apply to:
A. Purchases or sales effected in any account over which the persons
subject to this Code have no direct or indirect influence or
control;
B. Purchases or sales of:
1 . U.S. government securities;
2. shares of open-end investment companies (mutual fund)
including, but not limited to, shares of the Funds'
portfolios; and
3. bank certificates of deposit or commercial paper.
C. Purchases or sales over which neither the person subject to this
Code nor the Funds have control;
D. Purchases that are part of an automatic dividend reinvestment
plan;
E. Purchases effected upon the exercise of rights issued by an
issuer pro rata to all holders of a class of securities to the
extent such rights were acquired from such issuer, and sales of
such rights so acquired; and
<PAGE 10>
F. Purchases or sales that receive the prior approval of the
Compliance Committee because they are not inconsistent with this
Code or the provisions of Rule 17j-1(a) under the Investment
Company Act of 1940. A copy of Rule 17j-1 is attached as
Appendix B.
VI. CONSEQUENCES OF FAILURE TO COMPLY WITH THE CODE
Compliance with this Code of Ethics is a condition of employment
by MFSI and retention of positions with the Funds. This Code is not a
contract of employment. Taking into consideration all relevant
circumstances, the executive committee of MFSI will deter-mine what
action is appropriate for any breach of the provisions of the Code,
except by an outside board member. Possible actions include letters
of sanction, suspension or termination of employment, or removal from
office. The boards of Monetta Trust and Monetta Fund shall determine
what action is appropriate for any breach of the provisions of the
Code by an outside member of that board, which may include removal
from the board.
Reports filed pursuant to the Code will be maintained in
confidence but will be reviewed by MFSI or the funds to verify
compliance with the Code. Additional information may be required to
clarify the nature of particular transactions.
VII. RETENTION OF RECORDS
The Secretary of Monetta Trust and the Secretary of Monetta Fund
shall maintain for their respective Funds the records listed below for
a period of six years at the principal place of business of each of
Monetta Trust and Monetta Fund in an easily accessible place - and
shall keep all reports filed pursuant to this Code confidential except
that such reports may be made available to the Securities and Exchange
Commission or any representative thereof upon proper request.
A. a list of all persons subject to the Code and who are required to
file reports during the period;
B. receipt signed by all persons subject to the Code acknowledging
receipt of copies of the Code and acknowledging that they are
subject to it;
C. a copy of each Code of Ethics that has been in effect at any time
during the period; and
D. a copy of each report filed pursuant to the Code and a record of
any known violation and action taken as a result thereof during
the period.
<PAGE 11>
MONETTA FINANCIAL SERVICES, INC.
MONETTA TRUST
MONETTA FUND, INC.
CODE OF ETHICS AFFIRMATION
I affirm that I have received a copy of the Monetta Financial
Services, Inc., Monetta Trust, and Monetta Fund, Inc., Code of Ethics and
have read and understand it. I acknowledge that I am subject to the Code
and will comply with the Code in all respects.
Date: ____________________________
____________________________________
Signature
<PAGE 12>
SCHEDULE A
Compliance Officer: Maria Cesario DeNicolo
Compliance Committee: Maria Cesario DeNicolo
Robert S. Bacarella
Timothy Detloff
Effective: August 3, 1995
Revised:April 22, 1997
Revised: February 12, 1999
Revised: November 10, 1999
<PAGE 13>
SCHEDULE B
Monetta Fund: John W. Bakos
Paul W. Henry
Effective: January 1, 1996
Revised: July 16, 1997
<PAGE 14>
SCHEDULE C
Monetta Trust: John L. Guy, Jr.
Mark F. Ogan
William M Valiant
Monetta Fund: Mark F. Ogan
Effective: January 1, 1996
Revised: January 21, 1998
<PAGE 15>
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