<PAGE>
THE VALIANT FUND
SEMI-ANNUAL REPORT
FEBRUARY 29, 1996
(UNAUDITED)
<PAGE>
THE VALIANT FUND
U.S. TREASURY MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS
FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- --------
U.S. TREASURY BILLS (A) - 25.7%
<S> <C> <C>
$ 5,000,000 5.270%, 04/04/96 . . . . . . . . . . . $ 4,975,114
10,000,000 4.930%, 05/02/96 . . . . . . . . . . . 9,915,094
4,000,000 5.240%, 05/02/96 . . . . . . . . . . . 3,963,902
10,000,000 4.955%, 06/06/96 . . . . . . . . . . . 9,866,490
15,000,000 4.900%, 07/11/96 . . . . . . . . . . . 14,730,500
7,000,000 4.805%, 09/19/96 . . . . . . . . . . . 6,815,008
-------------
Total U.S. Treasury Bills. . . . . . . 50,266,108
-------------
</TABLE>
<TABLE>
<CAPTION>
REPURCHASE AGREEMENTS - 74.3%
<S> <C> <C>
47,000,000 First Boston Corp.
5.35%, 03/01/96, Dated 02/29/96, Repurchase Price $47,006,985
(Collateralized by U.S.Treasury Bonds, ranging in rates from 9.125% to 9.875%,
and ranging in maturities from 02/15/06 to 05/15/18; combined total par value of
$35,778,000; valued at $49,176,369). . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,000,000
4,631,000 Goldman, Sachs & Co., Inc.
5.30%, 03/01/96, Dated 02/29/96, Repurchase Price $4,631,682
(Collateralized by U.S. Treasury Notes, 6.125%, due 05/15/98;
total par value $4,580,000; valued at $4,724,285) . . . . . . . . . . . . . . . . . . . . 4,631,000
47,000,000 J.P. Morgan Co., Inc.
5.39%, 03/01/96, Dated 02/29/96, Repurchase Price $47,007,037
(Collateralized by U.S. Treasury Bill, due 12/12/96;
total par value $49,903,000; valued at $47,942,810) . . . . . . . . . . . . . . . . . . . 47,000,000
47,000,000 Morgan Stanley Group, Inc.
5.41%, 03/01/96 , Dated 02/29/96, Repurchase Price $47,007,063
(Collateralized by U.S. Treasury Notes, 4.375%, due 08/15/96;
total par value $48,095,000; valued at $48,000,181)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,000,000
--------------
Total Repurchase Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145,631,000
--------------
Total Investments - 100.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 195,897,108
(Cost $195,897,108)* --------------
--------------
</TABLE>
- - ----------------------------------------
(A) Rate represents annualized yield to maturity at date of purchase
(unaudited).
* Aggregate cost for Federal tax purposes.
SEE NOTES TO FINANCIAL STATEMENTS.
1
<PAGE>
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS
FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- --------
COMMERCIAL PAPER (A) - 55.1%
<S> <C> <C>
CHEMICALS - 3.0%
Great Lakes Chemical Corp.
$ 10,000,000 5.370%, 03/01/96 . . . . . . . . . . . . $ 10,000,000
9,000,000 5.350%, 03/04/96 . . . . . . . . . . . . 8,995,988
---------------
18,995,988
---------------
COMMUNICATIONS - 0.6%
American Telephone & Telegraph Co.
4,000,000 5.630%, 03/13/96 . . . . . . . . . . . . 3,992,493
---------------
ELECTRONICS - 7.1%
Hewlett Packard Co.
30,000,000 4.990%, 07/29/96 . . . . . . . . . . . . 29,376,250
Motorola Inc.
16,000,000 5.060%, 04/24/96 . . . . . . . . . . . . 15,878,560
---------------
45,254,810
---------------
ENVIRONMENTAL CONTROL - 1.8%
WMX Technologies, Inc.
8,200,000 5.550%, 03/08/96 . . . . . . . . . . . . 8,191,151
3,000,000 5.570%, 03/11/96 . . . . . . . . . . . . 2,995,358
---------------
11,186,509
---------------
FINANCIAL SERVICES - 4.9%
Ford Motor Credit Co.
12,000,000 5.570%, 03/18/96 . . . . . . . . . . . . 11,968,437
Morgan J. P. & Co., Inc.
20,000,000 5.020%, 08/29/96 . . . . . . . . . . . . 19,495,211
---------------
31,463,648
---------------
FOOD PRODUCTS - 7.7%
Coca Cola Co.
9,775,000 5.120%, 04/25/96 . . . . . . . . . . . . 9,698,538
</TABLE>
2
<PAGE>
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- --------
COMMERCIAL PAPER - (CONTINUED)
<S> <C> <C>
FOOD PRODUCTS - (CONTINUED)
Heinz H. J., Co.
$ 15,000,000 5.100%, 04/26/96 . . . . . . . . . . . . $ 14,881,000
PepsiCo Inc.
25,000,000 5.340%, 03/15/96 . . . . . . . . . . . . 24,948,083
---------------
49,527,621
---------------
HOUSEHOLD PRODUCTS - 3.9%
Wal Mart Stores, Inc.
25,000,000 5.120%, 04/30/96 . . . . . . . . . . . . 24,786,667
---------------
INSURANCE - 1.1%
AIG Funding, Inc.
7,000,000 5.250%, 07/31/96 . . . . . . . . . . . . 6,844,833
---------------
NON-BANK FINANCE - 9.5%
General Electric Credit Co.
7,000,000 5.520%, 03/18/96 . . . . . . . . . . . . 6,981,753
5,000,000 5.540%, 05/15/96 . . . . . . . . . . . . 4,942,292
---------------
11,924,045
---------------
IBM Credit Corp.
20,000,000 5.100%, 04/26/96 . . . . . . . . . . . . 19,841,333
Transamerica Finance Corp., Inc.
10,000,000 5.500%, 04/08/96 . . . . . . . . . . . . 9,941,944
8,000,000 5.080%, 05/09/96 . . . . . . . . . . . . 7,922,107
8,000,000 5.100%, 07/03/96 . . . . . . . . . . . . 7,859,467
3,000,000 4.800%, 08/13/96 . . . . . . . . . . . . 2,934,000
---------------
28,657,518
---------------
60,422,896
---------------
PAPER - 3.1%
Weyerhaeuser Co.
20,000,000 5.200%, 03/22/96 . . . . . . . . . . . . 19,939,333
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE>
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- --------
COMMERCIAL PAPER - (CONTINUED)
<S> <C> <C>
PHARMACEUTICALS - 1.1%
Warner Lambert Co.
$ 7,000,000 5.550%, 03/28/96 . . . . . . . . . . . . $ 6,970,863
---------------
REAL ESTATE - 1.9%
PHH Corp.
12,000,000 5.100%, 04/11/96 . . . . . . . . . . . . 11,930,300
---------------
SOAPS AND DETERGENTS - 1.6%
Procter & Gamble Co.
10,000,000 5.030%, 05/17/96 . . . . . . . . . . . . 9,892,414
---------------
TELECOMMUNICATIONS - 7.8%
Ameritech Corp.
6,000,000 5.540%, 03/05/96 . . . . . . . . . . . . 5,996,306
4,000,000 5.630%, 03/05/96 . . . . . . . . . . . . 3,997,498
15,000,000 5.100%, 04/23/96 . . . . . . . . . . . . 14,887,375
---------------
24,881,179
---------------
Pacific Bell
25,000,000 5.350%, 03/01/96 . . . . . . . . . . . . 25,000,000
---------------
49,881,179
---------------
Total Commercial Paper . . . . . . . . . 351,089,554
---------------
</TABLE>
<TABLE>
<CAPTION>
BANKERS' ACCEPTANCE NOTICES - 4.7%
<S> <C> <C>
Bank of New York
8,000,000 5.570%, 03/08/96 . . . . . . . . . . . . 7,991,335
Republic National Bank of NY
3,000,000 5.560%, 04/01/96 . . . . . . . . . . . . 2,985,637
4,000,000 5.480%, 04/05/96 . . . . . . . . . . . . 3,978,689
5,000,000 5.300%, 04/08/96 . . . . . . . . . . . . 4,972,028
3,400,000 5.530%, 04/09/96 . . . . . . . . . . . . 3,379,631
2,000,000 5.010%, 05/31/96 . . . . . . . . . . . . 1,974,672
5,000,000 5.150%, 07/08/96 . . . . . . . . . . . . 4,907,729
---------------
22,198,386
---------------
Total Bankers' Acceptance Notices. . . . 30,189,721
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- --------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 6.8%
<S> <C> <C>
FEDERAL HOME LOAN BANK - 3.1%
$ 20,000,000 5.030%, 05/29/96 . . . . . . . . . . . . $ 19,751,294
U.S. TREASURY BILL - 3.7%
25,000,000 4.835%, 02/06/97 . . . . . . . . . . . . 23,868,476
---------------
Total U.S. Government and Agency Obligations 43,619,770
---------------
</TABLE>
<TABLE>
<CAPTION>
REPURCHASE AGREEMENTS - 33.4%
<S> <C> <C>
20,000,000 First Boston Corp.
5.35%, 03/01/96, Dated 02/29/96, Repurchase Price $20,002,972
(Collateralized by U.S. Treasury Bond, 9.125%, due 05/15/18;
total par value $15,591,000, valued at $20,512,032) . . . . . . . . . . . . . . . . . . . . 20,000,000
10,000,000 Goldman, Sachs & Co., Inc.
5.30%, 03/01/96, Dated 02/29/96, Repurchase Price $10,001,472
(Collateralized by U.S. Treasury Notes, 6.125%, due 5/15/98;
total par value; $9,889,000, valued at $10,200,536) . . . . . . . . . . . . . . . . . . . . 10,000,000
60,000,000 J.P. Morgan Co., Inc.
5.39%, 03/01/96, Dated 02/29/96, Repurchase Price $60,008,983
(Collateralized by U.S. Treasury Bill, due 06/13/96; total par value
$62,090,000; valued at $61,201,492) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,000,000
122,873,000 Morgan Stanley Group, Inc.
5.41%, 03/01/96, Dated 02/29/96, Repurchase Price $122,891,465
(Collateralized by U.S. Treasury Notes, 7.50%, due 12/31/96; total par value
$79,885,000; valued at $80,696,349. Collateralized by U.S. Treasury Bonds, ranging
in rates from 7.25% to 13.25% and ranging in maturities from 02/15/01 to 08/15/22;
combined total par value of $34,144,000; valued at $42,482,256) . . . . . . . . . . . . . . 122,873,000
---------------
Total Repurchase Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212,873,000
---------------
Total Investments - 100.0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 637,772,045
(Cost $637,772,045)* ---------------
---------------
</TABLE>
- - ----------------------------------------
(A) Rate represents annualized yield to maturity at date of purchase
(unaudited).
* Aggregate cost for Federal tax purposes.
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS
FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
MUNICIPAL BONDS AND NOTES (A) - 100.0%
<S> <C> <C>
ALASKA - 2.7%
$ 5,000,000 Alaska Housing Finance Corp.
Series C
3.400%, 06/01/26 **
SBPA: Swiss Bank Corp . . . . . . . . . $ 5,000,000
3,000,000 Valdez Marine Terminal
Mobil Project
3.300%, 11/01/03 **. . . . . . . . . . . 3,000,000
---------------
8,000,000
---------------
ARIZONA - 0.4%
1,200,000 Maricopa County Arizona PCR
(Arizona Public Service) E
3.450%, 05/01/29 **
LOC: Bank of America . . . . . . . . . . 1,200,000
---------------
COLORADO - 4.5%
6,400,000 Colorado Health Facilities
Sisters of Charity Health Care
3.250%, 05/15/25 **
LOC: Toronto Dominion. . . . . . . . . . 6,400,000
3,000,000 Colorado State TRANS, Series A
4.500%, 06/27/96 . . . . . . . . . . . . 3,007,769
3,700,000 University of Colorado University Revenues
Enterprise Systems, Series A
3.100%, 06/01/20 **
SBPA: Morgan Guaranty Trust Co.. . . . . 3,700,000
---------------
13,107,769
---------------
CONNECTICUT - 1.3%
4,000,000 Connecticut State Special Assessment
Unemployment Compensation,
3.900%, 07/01/96 *
SBPA: FGIC Securities Purchase . . . . . 4,000,000
---------------
FLORIDA - 2.0%
1,100,000 Dade County Water & Sewer Systems "FGIC"
3.050%, 10/05/22 **
SBPA: Commerzbank . . . . . . . . . . . 1,100,000
2,340,000 Orlando Waste Water Systems Revenue
3.250%, 05/24/96
LINE: Union Bank Switzerland . . . . . . 2,340,000
</TABLE>
6
<PAGE>
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- --------
<S> <C> <C>
FLORIDA - (CONTINUED)
$ 2,500,000 St Lucie County Florida
(Florida Power & Light) Series 94A
3.250%, 04/11/96 . . . . . . . . . . . . $ 2,500,000
---------------
5,940,000
---------------
GEORGIA - 6.3%
4,800,000 Burke County Development Authority, PCR
Georgia Power Project, Series 3
3.400%, 07/01/24 **. . . . . . . . . . . 4,800,000
5,000,000 Burke County Development Authority, PCR
Oglethorpe Power Project, Series A
3.050%, 01/01/19 **
LOC: Credit Local De France . . . . . . 5,000,000
2,000,000 De Kalb Private Hospital Authority
(Egelston Childrens Hospital) A
3.050%, 03/01/24 **
LOC: Trust Company Bank . . . . . . . . 2,000,000
7,000,000 De Kalb Private Hospital Authority
(Egelston Childrens Hospital) B
3.100%, 03/01/24 **
LOC: Trust Company Bank . . . . . . . . 7,000,000
---------------
18,800,000
---------------
HAWAII - 0.7%
2,000,000 Hawaii Department of Budget & Finance
Kaiser Permanente
3.750%, 03/01/96 * . . . . . . . . . . . 2,000,000
---------------
ILLINOIS - 2.2%
1,500,000 Chicago Illinois G.O.
Tender Notes, Series B
3.750%, 05/01/96
LOC: Morgan Guaranty Trust Co. . . . . . 1,500,000
5,000,000 Illinois State
Anticipation Revenue Certificates
4.500%, 06/10/96 . . . . . . . . . . . . 5,008,676
---------------
6,508,676
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- --------
<S> <C> <C>
INDIANA - 1.9%
$ 4,500,000 Indiana Health Facility
(Methodist Hospital) C
3.150%, 09/01/22 **
SBPA: Credit Suisse . . . . . . . . . . $ 4,500,000
1,000,000 Indiana Health Facility
(Methodist Hospital) D
3.150%, 09/01/22 **
SBPA: Credit Suisse . . . . . . . . . . 1,000,000
---------------
5,500,000
---------------
KANSAS - 2.4%
7,000,000 Kansas Department of Transportation
Highway Revenue
Series B
3.050%, 09/01/14 **. . . . . . . . . . . 7,000,000
---------------
LOUISIANA - 5.5%
7,500,000 Lake Charles Harbor & Terminal District (Conoco)
GTY: Dupont
3.450%, 11/01/11 **. . . . . . . . . . . 7,500,000
8,800,000 Louisiana State Recovery District Sales
Tax Revenue (FGIC)
3.500%, 07/01/97 **
SBPA: Swiss Bank Corp. . . . . . . . . . 8,800,000
---------------
16,300,000
---------------
MAINE - 1.7%
5,000,000 Maine G.O. TANS
4.500%, 06/28/96 . . . . . . . . . . . . 5,016,580
---------------
MASSACHUSETTS - 2.6%
1,000,000 Massachusetts
Series B Dedicated Income Tax
3.350%, 12/01/97 **
LOC: National Westminster Bank . . . . . 1,000,000
2,800,000 Massachusetts Bay Transportation Authority
3.750%, 03/01/96 *
LOC: State Street Bank & Trust Co. . . . 2,800,000
4,000,000 Massachusetts Bay Transportation Authority 84A
3.050%, 09/01/96 *
LOC: State Street Bank & Trust Co. . . . 4,000,000
---------------
7,800,000
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- --------
<S> <C> <C>
MICHIGAN - 0.5%
$ 1,500,000 Michigan Municipal Bond Authority Revenue,
Series B
4.500%, 07/03/96 . . . . . . . . . . . . $ 1,503,425
---------------
MINNESOTA - 1.1%
1,000,000 Rochester Health Care Facilities
Mayo Foundation/Clinic 92 A
3.150%, 04/11/96 . . . . . . . . . . . . 1,000,000
2,400,000 University of Minnesota Revenues
3.250%, 08/01/96 * . . . . . . . . . . . 2,400,000
---------------
3,400,000
---------------
MISSOURI - 5.2%
4,900,000 Missouri State Health & Educational Facility
(Barnes Hospital)
3.200%, 12/01/15 **
LOC: Morgan Guaranty Trust Co. . . . . . 4,900,000
3,000,000 Missouri State Health & Educational Facility
Revenue (Washington University) 85A
3.450%, 09/01/10
LINE: Morgan Guaranty Trust Co.. . . . . 3,000,000
7,600,000 Missouri State Health & Educational Facility
Revenue (Washington University) A
3.400%, 09/01/30 **
SBPA: Morgan Guaranty Trust Co.. . . . . 7,600,000
---------------
15,500,000
---------------
NEVADA - 2.1%
6,100,000 Clark County, Airport Improvement
Authority Revenue
3.050%, 07/01/25 **
LOC: Toronto Dominion Bank . . . . . . . 6,100,000
---------------
NEW MEXICO - 2.4%
5,000,000 Albuquerque Airport Authority Revenue
(AMBAC)
3.050%, 07/01/14 **. . . . . . . . . . . 5,000,000
SBPA: Canadian Imperial Bank of Commerce
2,000,000 Hurley PCR (British Petroleum)
3.450%, 12/01/15 **. . . . . . . . . . . 2,000,000
---------------
7,000,000
---------------
NEW YORK - 1.7%
5,000,000 New York City, RANS
Series B
4.750%, 06/28/96 . . . . . . . . . . . . 5,022,685
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- --------
<S> <C> <C>
NORTH CAROLINA - 3.3%
$ 2,500,000 Raleigh Durham Airport Authority
(American Airlines) B1
3.450%, 11/01/15 **
LOC: Royal Bank of Canada . . . . . . . $ 2,500,000
1,000,000 Raleigh Durham Airport Authority
(American Airlines) Series A,
3.450%, 11/01/05 **
LOC: Royal Bank of Canada. . . . . . . . 1,000,000
6,400,000 Winston Salem Water & Sewer System
3.050%, 06/01/14 **
SPBA: Wachovia Bank of N.C . . . . . . . 6,400,000
---------------
9,900,000
---------------
SOUTH CAROLINA - 4.1%
1,900,000 Charleston County, Massey Coal Terminal
(Shell Oil)
3.350%, 01/01/07 **
LOC: Morgan Guaranty Trust . . . . . . . 1,900,000
1,800,000 South Carolina Public Service Authority
3.300%, 03/22/96
LINE: Nations Bank, N.A. . . . . . . . 1,800,000
8,500,000 South Carolina Public Service Authority
3.700%, 04/09/96
LINE: Nations Bank, N.A. . . . . . . . . 8,500,000
---------------
12,200,000
---------------
TENNESSEE - 6.6%
6,600,000 Memphis Tennessee G. O.
Series A
3.300%, 08/01/03 **. . . . . . . . . . . 6,600,000
2,000,000 Metro Nashville Airport Special Facilities
Authority (American Airlines)
3.500%, 10/01/12 **
LOC: Bayerische Landesbank . . . . . . . 2,000,000
4,300,000 Metro Nashville/Davidson Airport Authority
(American Airlines)
3.500%, 10/01/12 **
LOC: Credit Suisse . . . . . . . . . . . 4,300,000
1,000,000 Metropolitan Nashville/Davidson Health
Vanderbilt University
4.350%, 05/01/96 * . . . . . . . . . . . 1,000,000
800,000 Metropolitan Nashville/Davidson Health
(Baptist Hospital)
3.200%, 03/26/96
LIQ: Nations Bank, N.A. . . . . . . . . 800,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- --------
<S> <C> <C>
TENNESSEE - (CONTINUED)
$ 4,800,000 Metropolitan Nashville/Davidson Health
Health & Education Facility Board Revenue
Vanderbilt University
3.500%, 01/15/97 * . . . . . . . . . . . $ 4,800,000
---------------
19,500,000
---------------
TEXAS - 13.1%
1,200,000 Grapevine Texas IDC
(American Airlines) A-3
3.500%, 12/01/24 **
LOC: Morgan Guaranty Trust . . . . . . 1,200,000
1,200,000 Harris County Texas Health
(Methodist Hospital) '94
3.450%, 12/01/25 **
LINE: Morgan Guaranty Trust . . . . . . 1,200,000
400,000 Harris County Texas Health Facilities
(St. Lukes Episcopal Hospital)
3.450%, 02/15/16 **
LINE: Morgan Guaranty Trust . . . . . . 400,000
4,200,000 Harris County Texas Toll Road, Series H
3.300%, 08/01/20 **
LINE: Morgan Guaranty Trust . . . . . . 4,200,000
3,900,000 Houston Texas G.O.
3.200%, 03/11/96
LINE: Toronto Dominion Bank. . . . . . . 3,900,000
5,000,000 Houston Texas, TRANS
4.500%, 06/27/96 . . . . . . . . . . . . 5,012,443
1,200,000 Lone Star Texas Airport Improvement Authority
(American Airlines) A-4
3.500%, 12/01/14 **
LOC: Royal Bank of Canada . . . . . . . 1,200,000
4,000,000 Lower Colorado River Authority, Series B TECP
3.250%, 04/10/96
Line: Morgan Guaranty Trust . . . . . . 4,000,000
1,000,000 North Central Texas Health Facility
(Presbyterian Hlth) C
3.500%, 12/01/15 ***
SBPA: National Bank of Texas . . . . . . 1,000,000
1,800,000 North Central Texas Health Facility
(Presbyterian Hlth) D MBIA
3.500%, 12/01/15 **
SBPA: National Bank of Texas . . . . . . 1,800,000
2,500,000 Port Arthur Texas Navigation District
Texaco, Inc. Project
3.450%, 10/01/24 **. . . . . . . . . . . 2,500,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- --------
<S> <C> <C>
TEXAS - (CONTINUED)
$ 3,700,000 San Antonio Texas Water Systems Series GS95
3.150%, 04/12/96
LINE: West deutsche Landesbank . . . . . $ 3,700,000
2,000,000 Texas Municipal Power Agency
New York
3.300%, 03/22/96
LINE: Morgan Guaranty Trust Co.. . . . . 2,000,000
900,000 Texas State Water Development Board
3.550%, 03/01/15 **
LOC: Canadian Imperial Bank . . . . . . 900,000
6,000,000 Texas State, TRANS
Series A
4.750%, 08/30/96 . . . . . . . . . . . . 6,043,588
---------------
39,056,031
---------------
UTAH - 8.2%
4,400,000 Emery County Utah, PCR
(Pacificorp) AMBAC
3.400%, 11/01/24 **
LINE: Bank of Nova Scotia . . . . . . . 4,400,000
1,400,000 Intermountain Power Agency
Ser 85 E
3.850%, 06/17/96 *
LINE: Bank of America . . . . . . . . . 1,400,000
2,700,000 Intermountain Power Agency
Ser 85 F
3.800%, 06/17/96 *
SBPA: Bank of America . . . . . . . . . 2,700,000
4,700,000 Intermountain Power Agency
Series E
3.750%, 03/15/96 *
LOC: Swiss Bank Corp. . . . . . . . . . 4,700,000
5,000,000 Intermountain Power Agency
Utah Power Supply, Series F
3.750%, 03/15/96 *
LOC: Swiss Bank Corp. . . . . . . . . . 5,000,000
3,100,000 Salt Lake County, PCR
British Petroleum Project
3.450%, 02/01/08 ** . . . . . . .. . . . 3,100,000
3,100,000 Salt Lake County, PCR (British Petroleum) B
3.450%, 08/01/07 **. . . . . . . . . . . 3,100,000
---------------
24,400,000
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- --------
<S> <C> <C>
VERMONT - 3.8%
$ 1,000,000 Vermont Education & Health Buildings
Finance Agency
Middlebury College
4.350%, 05/01/96 * . . . . . . . . . . . $ 1,000,000
1,400,000 Vermont State RANS, Series F
3.350%, 03/08/96
Line: Toronto Dominion Bank . . . . . . 1,400,000
5,000,000 Vermont State RANS, Series F
3.35%, 05/14/96 **
Line: Toronto Dominion Bank . . . . . . 5,000,000
4,000,000 Vermont State, RANS Series F
3.15%, 04/01/96
LINE: Toronto Dominion Bank. . . . . . . 4,000,000
---------------
11,400,000
---------------
VIRGINIA - 2.9%
700,000 Peninsula Ports Authority
Virginia Revenue (Shell)
Refunding Port Facility
3.40%, 12/01/05 ** . . . . . . . . . . . 700,000
5,000,000 Richmond Virginia
RANS Series A
4.00%, 06/28/96. . . . . . . . . . . . . 5,011,231
3,000,000 Virginia State, RANS 1995 Series
3.25%, 03/26/96
Line: State Street Bank & Trust Co.. . . 3,000,000
---------------
8,711,231
---------------
WASHINGTON - 5.3%
3,000,000 Port Anacortes IDC (Texaco)
Texaco Project
3.10%, 03/07/96. . . . . . . . . . . . . 3,000,000
4,300,000 Seattle Municipal Light & Power Revenue
3.30%, 11/01/18 **
LINE: Morgan Guaranty Trust . . . . . . 4,300,000
2,500,000 Seattle Washington Water Systems Revenue
3.300%, 09/01/25 **
LOC: Bayerische Landesbank . . . . . . . 2,500,000
6,000,000 Washington State Public Power Supply
3.350%, 07/01/17 **
LINE: Bank of America . . . . . . . . . 6,000,000
---------------
15,800,000
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- --------
<S> <C> <C>
WISCONSIN - 5.1%
$ 6,400,000 Oak Creek Wisconsin, PCR
WEPCO
3.400%, 08/01/16 **. . . . . . . . . . . $ 6,400,000
3,900,000 Sheboygan Wisconsin, PCR
Wisconsin Power & Light
3.200%, 08/01/14 **. . . . . . . . . . . 3,900,000
3,000,000 Sheboygan Wisconsin, PCR
Wisconsin Electric Power Company
3.300%, 09/01/15 **. . . . . . . . . . . 3,000,000
2,000,000 Wisconsin State
4.500%, 06/17/96 . . . . . . . . . . . . 2,004,955
---------------
15,304,955
---------------
WYOMING - 0.40%
1,000,000 Lincoln County, PCR, Series A
Exxon Project
3.350%, 11/01/14 **. . . . . . . . . . . 1,000,000
300,000 Uinta County Wyoming PCR
(Chevron) '92
3.350%, 12/01/22 **. . . . . . . . . . . 300,000
---------------
1,300,000
---------------
Total Investments - 100.0%. . . . . . . $ 297,271,352
(Cost $297,271,352)*** ---------------
---------------
</TABLE>
*** Aggregate cost for Federal tax purposes.
** Variable rate demand notes are payable upon not more than one, seven or
thirty business days' notice. The interest rate shown reflects the rate
currently in effect.
* Put bonds and notes have demand features which mature within one year. The
interest rate shown reflects the rate currently in effect.
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS
FEBRUARY 29, 1996 (UNAUDITED)
GLOSSARY OF TERMS
<TABLE>
<S> <C> <C>
AMBAC = American Municipal Bond Assurance Corp.
FGIC = Financial Guaranty Insurance Corp.
GO = General Obligations
IDC = Industrial Development Corp.
LINE = Collateralized by Bank Line of Credit Issued by Foreign and Domestic Banks
LIQ = Liquidity
LOC = Letter of Credit
MBIA = Municipal Bond Insurance Association
PCR = Pollution Control Revenue
RANS = Revenue Anticipation Notes
SBPA = Standby Purchase Agreement
TANS = Tax Anticipation Notes
TRANS = Tax and Revenue Anticipation Notes
</TABLE>
15
<PAGE>
THE VALIANT FUND
STATEMENTS OF ASSETS AND LIABILITIES
FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
U.S. TREASURY U.S. TREASURY GENERAL TAX-EXEMPT
MONEY MARKET INCOME MONEY MARKET MONEY MARKET
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments (Note 1):
Investments at value . . . . . . . . . . . . . $ 50,266,108 $ -- $ 424,899,045 $ 297,271,352
Repurchase agreements. . . . . . . . . . . . . 145,631,000 -- 212,873,000 --
--------------- --------------- --------------- ---------------
Total investments at value . . . . . . . . . 195,897,108 -- 637,772,045 297,271,352
Cash . . . . . . . . . . . . . . . . . . . . . . 520 25,253 999 --
Receivable for investments sold . . . . . . . . -- -- 14,289,994 --
Interest receivable . . . . . . . . . . . . . . 21,767 -- 31,893 1,873,334
Deferred organizational expense (Note 1) . . . . 16,106 16,157 12,835 13,068
--------------- --------------- --------------- ---------------
Total Assets . . . . . . . . . . . . . . . . 195,935,501 41,410 652,107,766 299,157,754
--------------- --------------- --------------- ---------------
LIABILITIES:
Dividends payable . . . . . . . . . . . . . . . 745,429 -- 2,263,254 742,297
Payable for investments purchased . . . . . . . 6,815,008 -- 142,006,675 4,000,000
Advisory fee payable (Note 2) . . . . . . . . . 30,309 -- 91,294 47,085
Distribution fee payable (Note 2) . . . . . . . 21,846 -- 1,862 --
Due to Custodian . . . . . . . . . . . . . . . . -- -- -- 836,705
Accrued expenses . . . . . . . . . . . . . . . . 16,106 16,157 12,835 13,068
--------------- --------------- --------------- ---------------
Total Liabilities. . . . . . . . . . . . . . . 7,628,698 16,157 144,375,920 5,639,155
--------------- --------------- --------------- ---------------
NET ASSETS . . . . . . . . . . . . . . . . . . . . $ 188,306,803 $ 25,253 $ 507,731,846 $ 293,518,599
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
NET ASSETS CONSIST OF:
Paid-in capital (Note 4) . . . . . . . . . . . . $ 188,309,244 $ 25,246 $ 507,870,214 $ 293,617,316
Accumulated net realized gain (loss) on
investments sold . . . . . . . . . . . . . . . (2,441) 7 (138,368) (98,717)
--------------- --------------- --------------- ---------------
Total Net Assets . . . . . . . . . . . . . . . $ 188,306,803 $ 25,253 $ 507,731,846 $ 293,518,599
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
SHARES OF BENEFICIAL INTEREST OUTSTANDING:
Class A . . . . . . . . . . . . . . . . . . . . 77,540,453 25,214 498,527,393 293,617,317
Class B . . . . . . . . . . . . . . . . . . . . 110,768,791 -- 9,342,821 --
Class C . . . . . . . . . . . . . . . . . . . . -- -- -- --
Class D . . . . . . . . . . . . . . . . . . . . -- -- -- --
NET ASSET VALUE,
All Shares - offering and redemption price per
share (Net Assets/Shares Outstanding) . . . . . . $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
THE VALIANT FUND
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
U.S. TREASURY U.S. TREASURY GENERAL TAX-EXEMPT
MONEY MARKET INCOME MONEY MARKET MONEY MARKET
PORTFOLIO PORTFOLIO (A) PORTFOLIO PORTFOLIO
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest (Note 1) . . . . . . . . . . . . . . . $ 4,286,002 $ 187,705 $ 14,547,032 $ 5,159,927
--------------- --------------- --------------- ---------------
EXPENSES:
Investment advisory fee (Note 2) . . . . . . . . 151,178 8,578 504,103 281,854
Distribution fee, Class B (Note 2) . . . . . . . 122,026 -- 12,212 --
Trustee fees (Note 2) . . . . . . . . . . . . . 1,645 -- 6,044 3,561
Amortization of organizational costs (Note 1). . 2,503 2,503 2,503 2,503
Miscellaneous expense . . . . . . . . . . . . . -- -- -- 149
Expenses borne by the Investment Adviser (Note 2) (4,148) (2,503) (8,547) (6,064)
--------------- --------------- --------------- ---------------
Total Expenses . . . . . . . . . . . . . . . . 273,204 8,578 516,315 282,003
--------------- --------------- --------------- ---------------
NET INVESTMENT INCOME. . . . . . . . . . . . . . . 4,012,798 179,127 14,030,717 4,877,924
--------------- --------------- --------------- ---------------
REALIZED GAIN (LOSS) ON
INVESTMENTS SOLD (NOTE 1) . . . . . . . . . . . (854) -- (48,008) 9,349
--------------- --------------- --------------- ---------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS. . . . . . . . . . . . $ 4,011,944 $ 179,127 $ 13,982,709 $ 4,887,273
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
</TABLE>
- - ----------------------------------------
(A) The Fund had investment operations from December 11, 1995 to January 10,
1996.
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
THE VALIANT FUND
STATEMENTS OF CHANGES IN NET ASSETS
FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
U.S. TREASURY U.S. TREASURY
MONEY MARKET PORTFOLIO INCOME PORTFOLIO
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
2/29/96 8/31/95 2/29/96 (A) 8/31/95 (B)
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD. . . . . . . . . $ 106,296,537 $ 13,379,771 $ 25,133 $ 25,027
--------------- --------------- --------------- ---------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income . . . . . . . . . . . . . 4,012,798 3,133,405 179,127 320,092
Net realized gain (loss) on investments sold . . (854) (1,015) -- 12
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets
resulting from operations. . . . . . . . . . . 4,011,944 3,132,390 179,127 320,104
--------------- --------------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A . . . . . . . . . . . . . . . . . . . (1,456,725) (698,636) (179,127) (320,092)
Class B . . . . . . . . . . . . . . . . . . . (2,556,073) (2,434,769) -- --
--------------- --------------- --------------- ---------------
Net decrease from distributions . . . . . . . . (4,012,798) (3,133,405) (179,127) (320,092)
--------------- --------------- --------------- ---------------
SHARE TRANSACTIONS (AT $1.00 PER SHARE):
CLASS A:
Net proceeds from sales of shares. . . . . . . 152,347,521 140,567,044 93,740,907 117,990,836
Issued to shareholders in reinvestment
of dividends . . . . . . . . . . . . . . . . . 695 1,392 89 94
Cost of shares repurchased . . . . . . . . . . (104,990,550) (110,410,948) (93,740,876) (117,990,836)
--------------- --------------- --------------- ---------------
Net Class A share transactions . . . . . . . 47,357,666 30,157,488 120 94
--------------- --------------- --------------- ---------------
CLASS B:
Net proceeds from sales of shares . . . . . . 253,793,109 256,091,467 -- --
Issued to shareholders in reinvestment
of dividends. . . . . . . . . . . . . . . . . -- -- -- --
Cost of shares repurchased. . . . . . . . . . (219,139,655) (193,331,174) -- --
--------------- --------------- --------------- ---------------
Net Class B share transactions. . . . . . . . 34,653,454 62,760,293 -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) from
share transactions . . . . . . . . . . . . 82,011,120 92,917,781 120 94
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets . . . 82,010,266 92,916,766 120 106
--------------- --------------- --------------- ---------------
NET ASSETS AT END OF PERIOD. . . . . . . . . . . . $ 188,306,803 $ 106,296,537 $ 25,253 $ 25,133
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
</TABLE>
- - -----------------------------------------------------------------
(A) The Fund operated from December 11, 1995 - January 10, 1996.
(B) The Fund operated from December 12, 1994 - January 11, 1995.
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE>
THE VALIANT FUND
STATEMENTS OF CHANGES IN NET ASSETS - (CONTINUED)
FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
GENERAL MONEY TAX-EXEMPT
MARKET PORTFOLIO MONEY MARKET PORTFOLIO
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
2/29/96 8/31/95 2/29/96 8/31/95
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD. . . . . . . . . $ 385,426,702 $ 176,536,072 $ 283,653,602 $ 258,081,069
--------------- --------------- --------------- ---------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income . . . . . . . . . . . . . 14,030,717 22,098,898 4,877,924 9,010,805
Net realized gain (loss) on investments sold . . (48,008) (36,946) 9,349 (58,890)
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets
resulting from operations. . . . . . . . . . . 13,982,709 22,061,952 4,887,273 8,951,915
--------------- --------------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A. . . . . . . . . . . . . . . . . . . . (13,771,376) (21,559,888) (4,877,924) (9,010,805)
Class B. . . . . . . . . . . . . . . . . . . . (259,341) (539,010) -- --
--------------- --------------- --------------- ---------------
Net decrease from distributions. . . . . . . . . (14,030,717) (22,098,898) (4,877,924) (9,010,805)
--------------- --------------- --------------- ---------------
SHARE TRANSACTIONS (AT $1.00 PER SHARE):
CLASS A:
Net proceeds from sales of shares. . . . . . . 970,070,856 1,526,314,105 260,799,249 521,178,341
Issued to shareholders in reinvestment
of dividends . . . . . . . . . . . . . . . . . 595,185 35,794 439 831
Cost of shares repurchased . . . . . . . . . . (848,191,435) (1,317,365,165) (250,944,040) (495,547,749)
--------------- --------------- --------------- ---------------
Net Class A share transactions . . . . . . . 122,474,606 208,984,734 9,855,648 25,631,423
--------------- --------------- --------------- ---------------
CLASS B:
Net proceeds from sales of shares. . . . . . . 6,189,053 16,080,852 -- --
Issued to shareholders in reinvestment
of dividends . . . . . . . . . . . . . . . . . -- -- -- --
Cost of shares repurchased . . . . . . . . . . (6,310,507) (16,138,010) -- --
--------------- --------------- --------------- ---------------
Net Class B share transactions . . . . . . . (121,454) (57,158) -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) from
share transactions . . . . . . . . . . . . 122,353,152 208,927,576 9,855,648 25,631,423
--------------- --------------- --------------- ---------------
Net increase (decrease) in
net assets . . . . . . . . . . . . . . . . 122,305,144 208,890,630 9,864,997 25,572,533
--------------- --------------- --------------- ---------------
NET ASSETS AT END OF PERIOD. . . . . . . . . . . . $ 507,731,846 $ 385,426,702 $ 293,518,599 $ 283,653,602
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE>
THE VALIANT FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD (UNAUDITED)
<TABLE>
<CAPTION>
U.S. TREASURY MONEY
MARKET PORTFOLIO* - CLASS A
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
2/29/96 8/31/95 8/31/94 (1)
------- ------- -----------
<S> <C> <C> <C>
Net Asset Value, Beginning of period . . . . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000
--------------- --------------- ---------------
Income from Investment Operations:
Net investment income (2) . . . . . . . . . . . . . . . . . 0.027 0.054 0.012
--------------- --------------- ---------------
Total from Investment Operations . . . . . . . . . . . 0.027 0.054 0.012
--------------- --------------- ---------------
Less Distributions:
Dividends from net investment income. . . . . . . . . . . . (0.027) (0.054) (0.012)
--------------- --------------- ---------------
Total Distributions. . . . . . . . . . . . . . . . . . (0.027) (0.054) (0.012)
--------------- --------------- ---------------
Net increase (decrease) in net asset value . . . . . . . . . . . 0.000 0.000 0.000
--------------- --------------- ---------------
Net Asset Value, End of period . . . . . . . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000
--------------- --------------- ---------------
--------------- --------------- ---------------
Total Return (Not annualized). . . . . . . . . . . . . . . . . . 2.76% 5.60% 1.19%
Ratios/Supplemental Data:
Net Assets, End of Period (000's). . . . . . . . . . . . . . . . $ 77,541 $ 30,183 $ 25
Ratios to average net assets (Annualized):
Net investment income . . . . . . . . . . . . . . . . . . . 5.44% 5.79% 4.06%
Operating expenses (2). . . . . . . . . . . . . . . . . . . 0.20% 0.20% 0.20%
</TABLE>
<TABLE>
<CAPTION>
U.S. TREASURY MONEY
MARKET PORTFOLIO* - CLASS B
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
2/29/96 8/31/95 8/31/94 (1)
------- ------- -----------
<S> <C> <C> <C>
Net Asset Value, Beginning of period . . . . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000
--------------- --------------- ---------------
Income from Investment Operations:
Net investment income (3) . . . . . . . . . . . . . . . . . 0.026 0.052 0.011
--------------- --------------- ---------------
Total from Investment Operations . . . . . . . . . . . 0.026 0.052 0.011
--------------- --------------- ---------------
Less Distributions:
Dividends from net investment income. . . . . . . . . . . . (0.026) (0.052) (0.011)
--------------- --------------- ---------------
Total Distributions. . . . . . . . . . . . . . . . . . (0.026) (0.052) (0.011)
--------------- --------------- ---------------
Net increase (decrease) in net asset value . . . . . . . . . . . 0.000 0.000 0.000
--------------- --------------- ---------------
Net Asset Value, End of period . . . . . . . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000
--------------- --------------- ---------------
--------------- --------------- ---------------
Total Return (Not annualized). . . . . . . . . . . . . . . . . . 2.63% 5.34% 1.12%
Ratios/Supplemental Data:
Net Assets, End of Period (000's). . . . . . . . . . . . . . . . $ 110,766 $ 76,114 $ 13,355
Ratios to average net assets (Annualized):
Net investment income . . . . . . . . . . . . . . . . . . . 5.24% 5.41% 3.87%
Operating expenses (3). . . . . . . . . . . . . . . . . . . 0.45% 0.45% 0.45%
</TABLE>
- - ----------------------------------------
(1) The Fund commenced operations on May 17, 1994 for Class A and Class B
shares.
(2) Net investment income per share and the annualized operating expense ratios
before waiver and reimbursement of fees by the Trustees and the investment
adviser, respectively, for the U. S. Treasury Money Market Portfolio - Class A,
for the period ended February 29, 1996 were $0.027 and 0.20%, for the period
ended August 31, 1995 were $0.054 and 0.21% and for the period ended August 31,
1994 were $0.012 and 0.26%.
(3) Net investment income per share and the annualized operating expense ratios
before waiver and reimbursement of fees by the Trustees and the investment
adviser, respectively, for the U. S. Treasury Money Market Portfolio - Class B,
for the period ended February 29, 1996 were $0.026 and 0.45%, for the period
ended August 31, 1995 were $0.052 and 0.46% and for the period ended August 31,
1994 were $0.011 and 0.50%.
* The Portfolio has not commenced operations for Class C or Class D shares.
20
<PAGE>
THE VALIANT FUND
FINANCIAL HIGHLIGHTS - (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD (UNAUDITED)
<TABLE>
<CAPTION>
GENERAL MONEY
MARKET PORTFOLIO* - CLASS A
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
2/29/96 8/31/95 8/31/94 (1)
------- ------- -----------
<S> <C> <C> <C>
Net Asset Value, Beginning of period . . . . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000
--------------- --------------- ---------------
Income from Investment Operations:
Net investment income (2) . . . . . . . . . . . . . . . . . 0.028 0.056 0.033
--------------- --------------- ---------------
Total from Investment Operations . . . . . . . . . . . 0.028 0.056 0.033
--------------- --------------- ---------------
Less Distributions:
Dividends from net investment income. . . . . . . . . . . . (0.028) (0.056) (0.033)
--------------- --------------- ---------------
Total Distributions. . . . . . . . . . . . . . . . . . (0.028) (0.056) (0.033)
--------------- --------------- ---------------
Net increase (decrease) in net asset value . . . . . . . . . . . 0.000 0.000 0.000
--------------- --------------- ---------------
Net Asset Value, End of period . . . . . . . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000
--------------- --------------- ---------------
--------------- --------------- ---------------
Total Return (Not annualized). . . . . . . . . . . . . . . . . . 2.81% 5.81% 3.33%
Ratios/Supplemental Data:
Net Assets, End of Period (000's). . . . . . . . . . . . . . . . $ 498,393 $ 375,965 $ 167,016
Ratios to average net assets (Annualized):
Net investment income . . . . . . . . . . . . . . . . . . . 5.57% 5.70% 3.70%
Operating expenses (2). . . . . . . . . . . . . . . . . . . 0.20% 0.20% 0.20%
</TABLE>
<TABLE>
<CAPTION>
GENERAL MONEY
MARKET PORTFOLIO* - CLASS B
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
2/29/96 8/31/95 8/31/94 (1)
------- ------- -----------
<S> <C> <C> <C>
Net Asset Value, Beginning of period . . . . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000
--------------- --------------- ---------------
Income from Investment Operations:
Net investment income (3) . . . . . . . . . . . . . . . . . 0.026 0.053 0.009
--------------- --------------- ---------------
Total from Investment Operations . . . . . . . . . . . 0.026 0.053 0.009
--------------- --------------- ---------------
Less Distributions:
Dividends from net investment income. . . . . . . . . . . . (0.026) (0.053) (0.009)
--------------- --------------- ---------------
Total Distributions. . . . . . . . . . . . . . . . . . (0.026) (0.053) (0.009)
--------------- --------------- ---------------
Net increase (decrease) in net asset value . . . . . . . . . . . 0.000 0.000 0.000
--------------- --------------- ---------------
Net Asset Value, End of period . . . . . . . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000
--------------- --------------- ---------------
--------------- --------------- ---------------
Total Return (Not annualized). . . . . . . . . . . . . . . . . . 2.68% 5.54% 0.92%
Ratios/Supplemental Data:
Net Assets, End of Period (000's). . . . . . . . . . . . . . . . $ 9,339 $ 9,461 $ 9,520
Ratios to average net assets (Annualized):
Net investment income . . . . . . . . . . . . . . . . . . . 5.31% 5.33% 3.99%
Operating expenses (3). . . . . . . . . . . . . . . . . . . 0.45% 0.45% 0.45%
</TABLE>
- - ----------------------------------------
(1) The Fund commenced operations on September 21, 1993 and May 17, 1994 for
Class A and B shares, respectively.
(2) Net investment income per share and the annualized operating expense ratios
before waiver and reimbursement of fees by the Trustees and the investment
adviser, respectively, for the General Money Market Portfolio - Class A, for the
period ended February 29, 1996 were $0.028 and 0.20%, for the period ended
August 31, 1995 were $0.056 and 0.20% and for the period ended August 31, 1994
were $0.033 and 0.21%.
(3) Net investment income per share and the annualized operating expense ratios
before waiver and reimbursement of fees by the Trustees and the investment
adviser, respectively, for the General Money Market Portfolio - Class B, for
the period ended February 29, 1996 were $0.026 and 0.45%, for the period ended
August 31, 1995 were $0.053 and 0.45% and for the period ended August 31, 1994
were $0.009 and 0.46%.
* The Portfolio has not commenced operations for Class C or Class D shares.
SEE NOTES TO FINANCIAL STATEMENTS
21
<PAGE>
THE VALIANT FUND
FINANCIAL HIGHLIGHTS - (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD (UNAUDITED)
<TABLE>
<CAPTION>
U.S. TREASURY
INCOME PORTFOLIO* - CLASS A
PERIOD ENDED PERIOD ENDED PERIOD ENDED
2/29/96 (1) 8/31/95 (2) 8/31/94 (3)
----------- ----------- -----------
<S> <C> <C> <C>
Net Asset Value, Beginning of period . . . . . . . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000
--------------- ---------------
Income from Investment Operations:
Net investment income (4) . . . . . . . . . . . . . . . . . . . . 0.004 0.004 0.001
--------------- --------------- ---------------
Total from Investment Operations . . . . . . . . . . . . . . 0.004 0.004 0.001
--------------- --------------- ---------------
Less Distributions:
Dividends from net investment income. . . . . . . . . . . . . . . (0.004) (0.004) (0.001)
--------------- --------------- ---------------
Total Distributions. . . . . . . . . . . . . . . . . . . . . (0.004) (0.004) (0.001)
--------------- --------------- ---------------
Net increase (decrease) in net asset value . . . . . . . . . . . . . . 0.000 0.000 0.000
--------------- --------------- ---------------
Net Asset Value, End of period . . . . . . . . . . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000
--------------- --------------- ---------------
--------------- --------------- ---------------
Total Return (Not annualized). . . . . . . . . . . . . . . . . . . . . 0.35% 0.39% 0.12%
Ratios/Supplemental Data:
Net Assets, End of Period (000's). . . . . . . . . . . . . . . . . . . $ 25 $ 25 $ 25
Ratios to average net assets (Annualized):
Net investment income . . . . . . . . . . . . . . . . . . . . . . 4.18% 4.47% 2.98%
Operating expenses (4). . . . . . . . . . . . . . . . . . . . . . .20% 0.20% 0.20%
</TABLE>
<TABLE>
<CAPTION>
TAX-EXEMPT MONEY
MARKET PORTFOLIO* - CLASS A
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
2/29/96 8/31/95 8/31/94 (4)
------- ------- -----------
<S> <C> <C> <C>
Net Asset Value, Beginning of period . . . . . . . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000
--------------- --------------- ---------------
Income from Investment Operations:
Net investment income (5) . . . . . . . . . . . . . . . . . . . . 0.017 0.035 0.021
--------------- --------------- ---------------
Total from Investment Operations . . . . . . . . . . . . . . 0.017 0.035 0.021
--------------- --------------- ---------------
Less Distributions:
Dividends from net investment income. . . . . . . . . . . . . . . (0.017) (0.035) (0.021)
--------------- --------------- ---------------
Total Distributions. . . . . . . . . . . . . . . . . . . . . (0.017) (0.035) (0.021)
--------------- --------------- ---------------
Net increase (decrease) in net asset value . . . . . . . . . . . . . . 0.000 0.000 0.000
--------------- --------------- ---------------
Net Asset Value, End of period . . . . . . . . . . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000
--------------- --------------- ---------------
--------------- --------------- ---------------
Total Return (Not annualized). . . . . . . . . . . . . . . . . . . . . 1.75% 3.67% 2.11%
Ratios/Supplemental Data:
Net Assets, End of Period (000's). . . . . . . . . . . . . . . . . . . $ 293,519 $ 283,654 $ 258,130
Ratios to average net assets (Annualized):
Net investment income . . . . . . . . . . . . . . . . . . . . . . 3.46% 3.50% 2.38%
Operating expenses (5). . . . . . . . . . . . . . . . . . . . . . 0.20% 0.20% 0.20%
</TABLE>
- - ----------------------------------------
(1) The Fund operated from December 11, 1995 to January 10, 1996.
(2) The Fund operated from December 12, 1994 to January 11, 1995.
(3) The Fund operated from December 28, 1993 to January 12, 1994.
(4) Net investment income per share and the annualized operating expense ratios
before waiver and reimbursement of fees by the Trustees and the investment
adviser, respectively, for the U.S. Treasury Income Portfolio, for the period
ended February 29, 1996 were $0.000 and 0.22%, for the period ended August 31,
1995 were $0.000 and 0.21% and for the period ended August 31, 1994 were $0.001
and 0.22%.
SEE NOTES TO FINANCIAL STATEMENTS.
22
<PAGE>
THE VALIANT FUND
FINANCIAL HIGHLIGHTS - (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD (UNAUDITED)
(5) Net investment income per share and the annualized operating expense ratios
before waiver and reimbursement of fees by the Trustees and the investment
adviser, respectively, for the Tax-Exempt Money Market Portfolio - for the
period ended February 29, 1996 were $0.017 and 0.20%, for the period ended
August 31, 1995 were $0.035 and 0.20% and for the period ended August 31, 1994
were $0.021 and 0.22%.
* The U.S. Treasury Income and the Tax-Exempt Money Market Portfolios have
not commenced operations for Class B, Class C or
Class D shares.
SEE NOTED TO FINANCIAL STATEMENTS.
23
<PAGE>
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 29, 1996 (UNAUDITED)
The Valiant Fund (the "Trust") was organized as a Massachusetts business
trust on January 29, 1993 and is registered under the Investment Company Act of
1940 as amended, as an open end management investment company. The Trust offers
four managed investment portfolios. The accompanying financial statements and
financial highlights are those of the U.S. Treasury Money Market, the U.S.
Treasury Income, General Money Market and the Tax-Exempt Money Market Portfolios
(individually, a "Portfolio", collectively, the "Portfolios"). The Trust is
authorized to offer four classes of shares: Class A, Class B, Class C and Class
D. As of February 29, 1996, no Portfolio had issued Class C or Class D shares.
1. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant generally accepted accounting
policies which are consistently followed by the Trust in the preparation of its
financial statements.
PORTFOLIO VALUATIONS: Securities in the Portfolios are valued utilizing
the amortized cost method permitted in accordance with Rule 2a-7 under the
Investment Company Act of 1940. This method involves valuing a portfolio
security initially at its cost and thereafter assuming a constant amortization
to maturity of any discount or premium.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on the trade date. Net realized gains and losses on investments sold
are recorded on the identified cost basis. Interest income is recorded on the
accrual basis.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: It is the policy of the
Portfolios to declare dividends daily from net investment income and to pay such
dividends monthly. Net income consists of interest accrued and market discount
earned (including both original issue and market discount), less amortization of
any market premium and accrued expenses. Net realized capital gains, if any,
are distributed at least annually.
Income and capital gains to be distributed are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles.
FEDERAL TAXES: The Trust treats each Portfolio as a separate entity for
Federal income tax purposes. Each Portfolio intends to continue to qualify each
year, as a "regulated investment company" under Subchapter M of the Internal
Revenue Code of 1986, as amended. By so qualifying, no Portfolio will be
subject to Federal income taxes to the extent that it distributes all of its
taxable or tax-exempt income, if any, for its tax year ending August 31. In
addition, by distributing during each calendar year substantially all of its net
investment income, capital gains and certain other amounts, if any, no Portfolio
will be subject to Federal excise tax. Therefore, no Federal income tax
provision is required.
REPURCHASE AGREEMENTS: Each Portfolio, except the U.S. Treasury Income
Portfolio, may engage in repurchase agreement transactions. Under the terms of
a typical repurchase agreement, the Portfolio takes possession of an underlying
debt obligation subject to an obligation of the seller to repurchase, and the
Portfolio to resell, the obligation at an agreed upon price and time, thereby
determining the yield during the Portfolio's holding period. This arrangement
results in a fixed rate of return that is not subject to market fluctuations
during the Portfolio's holding period. It is the Fund's policy to maintain
collateral that is at least equal at all times to the total amount of the
repurchase obligations including interest. In the event of a counterpart
default, the Portfolio has the right to use the collateral to offset losses
incurred. There is potential loss to the Portfolio in the event the Portfolio
is delayed or prevented from exercising its rights to dispose of the collateral
securities, including the risk of a possible decline in the market value of the
underlying securities during the period while the Portfolio seeks to assert its
rights. The Portfolio's sub-adviser, David L. Babson & Co. Inc., acting under
the supervision of the Trust's Board of Trustees, reviews the value of
collateral and the creditworthiness of those banks and dealers with which the
Portfolio enters into repurchase agreements to evaluate potential risks.
EXPENSES: Expenses directly attributable to a Portfolio are charged to
the Portfolio, while expenses which are attributable to more than one Portfolio
of the Trust are allocated among the respective Portfolios. Each share class
bears its pro-rata portion of expenses attributable to its series, except that
each class separately bears expenses related specifically to that class, such as
distribution fees.
24
<PAGE>
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
FEBRUARY 29, 1996 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
ORGANIZATION COSTS: The Trust bears all costs in connection with its
organization, including the fees and expenses of registering and qualifying its
shares for distribution under Federal and state securities laws. All such costs
are being amortized using the straight line method over a period of five years
from commencement of each Portfolio's operations. In the event that any of the
initial shares of a Portfolio are redeemed before such organization expenses are
fully amortized, the related Portfolio will be reimbursed by the shareholder
redeeming such shares for any unamortized organization costs in the same
proportion as the number of initial shares being redeemed bears to the number of
initial shares outstanding at the time of redemption.
ESTIMATES: The preparation of the financial statements in conformity with
generally accepted accounting principles may require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of these financial statements and the reported amounts
of income and expenses during the reported period. Actual results could differ
from those estimates.
2. INVESTMENT ADVISORY, ADMINISTRATION, DISTRIBUTION AND OTHER FEES
Integrity Management & Research, Inc. (the "Investment Adviser" or the
"Manager"), a wholly-owned subsidiary of Integrity Investments, Inc., serves as
the Investment Adviser to the Trust. State Street Bank and Trust Company serves
as the Trust's administrator, custodian and transfer agent. Integrity
Investments, Inc. ("Distributor") acts as exclusive distributor of the Trust's
shares.
The Trust pays the Investment Adviser a fee, computed daily and paid
monthly, at the annual rate of 0.20% of the average daily net assets of the
Trust. Under its Management Agreement with the Trust, the Manager performs
certain administrative and management services for the Trust and pays the
compensation, if any, of officers and Trustees who are affiliated with the
Manager or the Sub-Adviser and pays all the Portfolio expenses with the
following exceptions: the fees and expenses of those Trustees who are not
"interested persons" (as defined in the Investment Company Act of 1940) of the
Trust; interest on borrowings; taxes; expenses incurred by Class B, Class C and
Class D shares pursuant to the Distribution and Shareholder Servicing Plan; and
such extraordinary non-recurring expenses as may arise. From time to time the
Investment Adviser may waive all or a portion of the fees payable to it by a
Portfolio, either voluntarily or pursuant to applicable statutory expense
limitations. Additionally, the Investment Adviser has agreed to reimburse the
Portfolios for expenses exceeding 0.20% of average daily net assets for Class A
shares and 0.45% of the average daily net assets for Class B shares, 0.60% of
average daily net assets for Class C and 0.70% of average daily net assets for
Class D shares. The expense limitations are voluntary but will remain in effect
through the current fiscal year.
For the period ended February 29, 1996 the Investment Adviser reimbursed
the Trust as follows:
<TABLE>
<CAPTION>
PORTFOLIO REIMBURSEMENT
- - --------------------------------------------------------------------------------
<S> <C>
U.S. Treasury Money Market $4,148
U.S. Treasury Income 2,503
General Money Market 8,547
Tax-Exempt Money Market 6,064
</TABLE>
The Investment Adviser has entered into an investment sub-advisory
agreement with David L. Babson & Co., Inc. ("Babson") pursuant to which the
Investment Adviser pays fees to Babson, computed daily and paid monthly, at the
annual rate of 0.10% of the aggregate average daily net assets of the Portfolios
to $500 million and 0.05% of average daily net assets in excess thereof. Fees
related to these services are borne directly by the Investment Adviser.
25
<PAGE>
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
FEBRUARY 29, 1996 (UNAUDITED)
2. INVESTMENT ADVISORY, ADMINISTRATION, DISTRIBUTION AND OTHER FEES -
(CONTINUED)
The Trust has adopted a distribution plan for the Class A and Class B
shares, a distribution plan for the Class C shares and a distribution plan for
the Class D shares (together, the "Plans") pursuant to Rule 12b-1 of the
Investment Company Act of 1940. The Plans provide for payments to the
Distributor of up to 0.35% of the average net assets of the Class B shares, up
to 0.50% of the average net assets of the Class C shares and up to 0.50% of the
average net assets of the Class D shares. Payments under the Plans have been
authorized at the rate of 0.25% of each Portfolio's average daily net assets for
the Class B shares, 0.40% of each Portfolio's average daily net assets for the
Class C shares and 0.50% of each Portfolio's average daily net assets for the
Class D shares for the period ended February 29, 1996. No payments have been
authorized for the Class A shares.
Certain directors and officers of the Investment Adviser are also Trustees
and officers of the Trust.
Trustees who are not "interested persons" of the Trust ("Independent
Trustees") receive an annual $1,000 retainer and $1,000 per Trustee meeting
attended and are entitled to be reimbursed for out-of-pocket expenses incurred
in attending such meetings. The Trustees voluntarily agreed to waive the
payment of any annual retainer and any attendance fee until the aggregate assets
of the Trust exceeded $500 million. No compensation was waived after September
1, 1995.
3. CLASS LEVEL EXPENSES
Each of the Portfolios has established four classes of no par value shares:
Class A, Class B, Class C and Class D. Each share in each Portfolio, regardless
of class, represents an equal pro rata interest in a Portfolio and has identical
voting, dividend, liquidation and other rights, except that in matters affecting
only a particular Portfolio or class, only shares of the affected Portfolio or
class are entitled to vote. Each class may bear class specific expenses.
Income, fund level expenses, and realized and unrealized gains and losses
are allocated to each class of shares on a daily basis based on each classes
portion of net assets.
4. SHARES OF BENEFICIAL INTEREST
The Trust's Declaration of Trust authorizes the Trustees to issue an
unlimited number of no par value shares of beneficial interest in the
Portfolios. Shareholders are entitled to one vote for each dollar (or
proportional fractional vote for each fraction of a dollar) of net asset value
per share owned. Each Portfolio votes separately with respect to issues
affecting only that Portfolio. Shareholders of a particular class have the
exclusive right to vote on matters pertaining only to that class. Pursuant to
the Declaration of Trust, the Trustees have the authority to create additional
Portfolios and to issue additional classes of shares for each Portfolio of the
Trust
At February 29, 1996 Integrity Investments, Inc. owned 100% of the
outstanding shares of the U. S. Treasury Income Portfolio and certain
institutional shareholders were record owners of more than 10% of the total
outstanding shares of the following Portfolios:
<TABLE>
<CAPTION>
NAME OF PORTFOLIO NUMBER OF PERCENTAGE OF
SHAREHOLDERS SHARES OWNED
- - --------------------------------------------------------------------------------
<S> <C> <C>
U.S. Treasury Money Market 2 88.2%
General Money Market 1 86.4%
Tax-Exempt Money Market 1 99.8%
</TABLE>
26
