<PAGE>
THE VALIANT FUND
ANNUAL REPORT
AUGUST 31, 1997
<PAGE>
THE VALIANT FUND
U.S. TREASURY MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS
AUGUST 31, 1997
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- --------
<S> <C> <C>
U.S. TREASURY BILLS (A)--24.5%
$ 10,000,000 5.450%, 12/11/97. . . . . . . . . . . . . . . . . . . . . . . . $ 9,847,097
5,000,000 5.250%, 01/08/98. . . . . . . . . . . . . . . . . . . . . . . . 4,905,938
12,000,000 5.130%, 02/05/98. . . . . . . . . . . . . . . . . . . . . . . . 11,731,530
30,000,000 5.160%, 02/05/98. . . . . . . . . . . . . . . . . . . . . . . . 29,324,900
10,000,000 5.205%, 02/05/98. . . . . . . . . . . . . . . . . . . . . . . . 9,773,004
10,000,000 5.240%, 02/05/98. . . . . . . . . . . . . . . . . . . . . . . . 9,771,478
20,000,000 5.185%, 03/05/98. . . . . . . . . . . . . . . . . . . . . . . . 19,467,097
10,000,000 5.225%, 03/05/98. . . . . . . . . . . . . . . . . . . . . . . . 9,731,493
-------------
TOTAL U.S. TREASURY BILLS . . . . . . . . . . . . . . . . . . . 104,552,537
-------------
REPURCHASE AGREEMENTS--75.5%
100,000,000 First Boston Corp.
5.530%, 09/02/97, Dated 08/29/97, Repurchase Price $100,061,444
(Collateralized by U.S. Treasury Note, 6.50%, due 10/15/06;
par value $101,560,000; valued at $104,901,629) . . . . . . . . 100,000,000
10,078,000 Goldman, Sachs & Co., Inc.
5.450%, 09/02/97, Dated 08/29/97, Repurchase Price $10,084,103
(Collateralized by U.S. Treasury Bond, 6.50%, due 11/15/26;
par value $10,243,000; valued at $10,279,576) . . . . . . . . . 10,078,000
106,000,000 J.P. Morgan & Co., Inc.
5.550%, 09/02/97, Dated 08/29/97, Repurchase Price $106,065,367
(Collateralized by U.S. Treasury Notes, 6.75% & 5.75%,
due 04/30/00 & 12/31/98; total par value $34,763,000 & $71,430,000;
valued at $36,082,127 & $72,038,298, respectively). . . . . . . 106,000,000
106,000,000 Morgan Stanley Group, Inc.
5.580%, 09/02/97, Dated 08/29/97, Repurchase Price $106,065,720
(Collateralized by U.S. Treasury Bills, 5.22%, 5.17% & 5.14%,
due 05/28/98, 02/26/98 & 01/22/98; par value $76,460,000,
$24,073,000 & $11,600,000; valued at $73,455,963, $23,448,474 &
$11,357,722, respectively). . . . . . . . . . . . . . . . . . . 106,000,000
-------------
TOTAL REPURCHASE AGREEMENTS . . . . . . . . . . . . . . . . . . 322,078,000
-------------
TOTAL INVESTMENTS--100.0% . . . . . . . . . . . . . . . . . . . $ 426,630,537
(Cost $426,630,537)* --------------
-------------
</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
AUGUST 31, 1997
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- --------
<S> <C> <C>
BANKERS' ACCEPTANCE NOTICES (A)--9.0%
Bank of New York
$ 14,000,000 5.590%, 12/10/97 . . . . . . . . . . . . . . . . . . . . . . . $ 13,782,611
6,000,000 5.550%, 12/19/97 . . . . . . . . . . . . . . . . . . . . . . . 5,899,175
5,000,000 5.550%, 12/23/97 . . . . . . . . . . . . . . . . . . . . . . . 4,912,896
2,000,000 5.570%, 12/30/97 . . . . . . . . . . . . . . . . . . . . . . . 1,962,867
-------------
26,557,549
-------------
Corestates (Phil Nat'l) Bank
5,000,000 5.550%, 12/17/97 . . . . . . . . . . . . . . . . . . . . . . . 4,917,521
5,000,000 5.550%, 12/19/97 . . . . . . . . . . . . . . . . . . . . . . . 4,915,979
-------------
9,833,500
-------------
Republic National Bank of New York
7,000,000 5.470%, 11/25/97 . . . . . . . . . . . . . . . . . . . . . . . 6,909,593
4,000,000 5.550%, 11/26/97 . . . . . . . . . . . . . . . . . . . . . . . 3,946,966
5,300,000 5.530%, 12/17/97 . . . . . . . . . . . . . . . . . . . . . . . 5,212,888
-------------
16,069,447
-------------
TOTAL BANKERS' ACCEPTANCE NOTICES. . . . . . . . . . . . . . . 52,460,496
-------------
COMMERCIAL PAPER (A) --82.9%
AEROSPACE--1.4%
8,000,000 Allied Signal, Inc.
5.500%, 09/29/97 . . . . . . . . . . . . . . . . . . . . . . . 7,965,778
-------------
CHEMICALS--6.3%
Dupont (E I) De Nemours & Co.
5,000,000 5.610%, 09/03/97 . . . . . . . . . . . . . . . . . . . . . . . 4,998,442
3,000,000 5.660%, 10/22/97 . . . . . . . . . . . . . . . . . . . . . . . 2,975,945
14,000,000 5.530%, 12/03/97 . . . . . . . . . . . . . . . . . . . . . . . 13,799,998
5,000,000 5.610%, 12/04/97 . . . . . . . . . . . . . . . . . . . . . . . 4,926,758
4,000,000 5.590%, 12/05/97 . . . . . . . . . . . . . . . . . . . . . . . 3,940,994
6,000,000 5.620%, 12/05/97 . . . . . . . . . . . . . . . . . . . . . . . 5,911,017
-------------
36,553,154
-------------
DRUGS & HEALTH CARE--1.7%
10,000,000 Abbott Laboratories
5.450%, 09/23/97 . . . . . . . . . . . . . . . . . . . . . . . 9,966,694
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
2
<PAGE>
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1997
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- --------
<S> <C> <C>
COMMERCIAL PAPER (A)--(CONTINUED)
ELECTRIC UTILITIES--1.6%
$ 9,300,000 Tampa Electric Co.
5.470%, 09/22/97. . . . . . . . . . . . . . . . . . . . . . . . $ 9,270,325
------------
FINANCIAL SERVICES--10.9%
Ford Motor Credit Co.
10,000,000 5.630%, 12/02/97. . . . . . . . . . . . . . . . . . . . . . . . 9,856,122
7,000,000 5.490%, 12/08/97. . . . . . . . . . . . . . . . . . . . . . . . 6,895,385
10,000,000 5.550%, 12/10/97. . . . . . . . . . . . . . . . . . . . . . . . 9,845,833
8,000,000 5.550%, 12/15/97. . . . . . . . . . . . . . . . . . . . . . . . 7,870,500
-------------
34,467,840
-------------
J.P. Morgan & Co., Inc.
4,000,000 5.440%, 09/09/97. . . . . . . . . . . . . . . . . . . . . . . . 3,995,164
5,000,000 5.450%, 09/10/97. . . . . . . . . . . . . . . . . . . . . . . . 4,993,188
20,000,000 5.480%, 09/18/97. . . . . . . . . . . . . . . . . . . . . . . . 19,948,244
--------------
28,936,596
--------------
63,404,436
--------------
FOOD PRODUCTS--17.3%
Coca Cola Co.
20,000,000 5.520%, 09/02/97. . . . . . . . . . . . . . . . . . . . . . . . 19,996,933
10,000,000 5.450%, 11/10/97. . . . . . . . . . . . . . . . . . . . . . . . 9,894,028
--------------
29,890,961
--------------
H.J. Heinz Co.
16,435,000 5.480%, 09/23/97. . . . . . . . . . . . . . . . . . . . . . . . 16,379,961
12,000,000 5.480%, 09/26/97. . . . . . . . . . . . . . . . . . . . . . . . 11,954,333
--------------
28,334,294
--------------
22,300,000 Kellogg Co.
5.470%, 09/30/97. . . . . . . . . . . . . . . . . . . . . . . . 22,201,738
--------------
20,000,000 Sara Lee Corp.
5.500%, 09/25/97. . . . . . . . . . . . . . . . . . . . . . . . 19,926,667
--------------
100,353,660
--------------
GAS & PIPELINE UTILITIES--1.7%
10,000,000 Nicor, Inc.
5.510%, 11/03/97. . . . . . . . . . . . . . . . . . . . . . . . 9,903,575
--------------
INSURANCE--4.3%
25,000,000 AIG Funding, Inc.
5.470%, 09/03/97. . . . . . . . . . . . . . . . . . . . . . . . 24,992,403
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE>
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1997
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- --------
<S> <C> <C>
COMMERCIAL PAPER (A) -- (CONTINUED)
INTERNATIONAL OIL--16.3%
Amoco Co.
$ 20,000,000 5.500%, 09/02/97. . . . . . . . . . . . . . . . . . . . . . . . $ 19,996,944
8,100,000 5.520%, 10/27/97. . . . . . . . . . . . . . . . . . . . . . . . 8,030,448
6,000,000 5.450%, 11/17/97. . . . . . . . . . . . . . . . . . . . . . . . 5,930,058
--------------
33,957,450
--------------
20,000,000 Atlantic Richfield Co.
5.470%, 11/03/97. . . . . . . . . . . . . . . . . . . . . . . . 19,808,550
--------------
12,000,000 Shell Oil Co.
5.450%, 09/15/97. . . . . . . . . . . . . . . . . . . . . . . . 11,974,567
--------------
Sonoco Products Co.
9,000,000 5.590%, 09/02/97. . . . . . . . . . . . . . . . . . . . . . . . 8,998,603
20,000,000 5.500%, 09/18/97. . . . . . . . . . . . . . . . . . . . . . . . 19,948,056
--------------
28,946,659
--------------
94,687,226
--------------
LEISURE TIME--2.4%
14,000,000 Walt Disney Co.
5.450%, 12/15/97. . . . . . . . . . . . . . . . . . . . . . . . 13,777,458
--------------
NON-BANK FINANCE--8.4%
General Electric Capital Corp.
3,000,000 5.660%, 12/08/97. . . . . . . . . . . . . . . . . . . . . . . . 2,953,777
4,000,000 5.500%, 12/10/97. . . . . . . . . . . . . . . . . . . . . . . . 3,938,889
8,000,000 5.500%, 12/15/97. . . . . . . . . . . . . . . . . . . . . . . . 7,871,667
--------------
14,764,333
--------------
25,000,000 IBM Credit Corp.
5.470%, 09/10/97. . . . . . . . . . . . . . . . . . . . . . . . 24,965,812
--------------
8,928,000 Transamerica Finance Corp., Inc.
5.500%, 09/24/97. . . . . . . . . . . . . . . . . . . . . . . . 8,896,628
--------------
48,626,773
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1997
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- --------
<S> <C> <C>
COMMERCIAL PAPER (A) -- (CONTINUED)
SOAPS AND DETERGENTS--5.5%
Procter & Gamble Co.
$ 18,000,000 5.470%, 10/20/97. . . . . . . . . . . . . . . . . . . . . . . . $ 17,865,985
14,000,000 5.450%, 12/16/97. . . . . . . . . . . . . . . . . . . . . . . . 13,775,339
--------------
31,641,324
--------------
TECHNOLOGY--1.2%
7,000,000 International Business Machines
5.480%, 12/10/97. . . . . . . . . . . . . . . . . . . . . . . . 6,893,444
--------------
TELECOMMUNICATIONS--3.9%
10,000,000 American Telephone & Telegraph Co.
5.580%, 11/12/97. . . . . . . . . . . . . . . . . . . . . . . . 9,888,400
13,000,000 Ameritech Corp.
5.470%, 10/30/97. . . . . . . . . . . . . . . . . . . . . . . . 12,883,459
--------------
22,771,859
--------------
TOTAL COMMERCIAL PAPER. . . . . . . . . . . . . . . . . . . . . 480,808,109
--------------
U.S. TREASURY BILLS (A)--1.7%
10,000,000 U.S. Treasury Bill
5.090%, 01/22/98. . . . . . . . . . . . . . . . . . . . . . . . 9,797,814
--------------
REPURCHASE AGREEMENTS--6.4%
7,000,000 First Boston Corp.
5.530%, 09/02/97, Dated 08/29/97 , Repurchase Price $7,004,301
(Collateralized by U.S. Treasury Note, 7.50%, due 11/15/01;
par value $6,705,000; valued at $7,170,416) . . . . . . . . . . 7,000,000
15,000,000 J.P. Morgan & Co., Inc.
5.550%, 09/02/97, Dated 08/29/97, Repurchase Price $15,009,250
(Collateralized by U.S. Treasury Note & U.S. Treasury Bill,
8.875% & 4.96%, due 11/15/97 & 12/26/97; total par value
$768,000 & $14,750,000; valued at $792,883 & $14,507,672) . . . 15,000,000
15,320,000 Morgan Stanley Group, Inc.
5.580%, 09/02/97, Dated 08/29/97, Repurchase Price $15,329,498
(Collateralized by U.S. Treasury Bill, 5.28%, due 08/20/98;
par value $16,520,000; valued at $15,662,827) . . . . . . . . . 15,320,000
--------------
TOTAL REPURCHASE AGREEMENTS . . . . . . . . . . . . . . . . . . 37,320,000
--------------
TOTAL INVESTMENTS--100.0% . . . . . . . . . . . . . . . . . . . $ 580,386,419
(Cost $580,386,419)* --------------
--------------
</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
AUGUST 31, 1997
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- --------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES--100.0%
ALABAMA--0.3%
$ 1,000,000 Birmingham, Alabama GO
Series A
3.300%, 10/01/15**
LOC: Societe Generale . . . . . . . . . . . . . . . . . . . . . $ 1,000,000
--------------
ALASKA--3.2%
9,300,000 Alaska Housing Finance Corporation
Series C
3.300%, 06/01/26**
SBPA: Swiss Bank Corp . . . . . . . . . . . . . . . . . . . . . 9,300,000
--------------
CALIFORNIA--2.9%
5,000,000 Los Angeles County
TRANS
4.500%, 06/30/98. . . . . . . . . . . . . . . . . . . . . . . . 5,025,886
3,500,000 Oakland California
TRANS
4.500%, 06/30/98. . . . . . . . . . . . . . . . . . . . . . . . 3,520,595
--------------
8,546,481
--------------
COLORADO--2.8%
4,900,000 Colorado Health Facilities
Sisters of Charity Health Care
3.350%, 05/15/25**
LOC: Toronto Dominion Bank. . . . . . . . . . . . . . . . . . . 4,900,000
1,130,000 Colorado Springs Utility Revenue
6.000%, 11/15/97. . . . . . . . . . . . . . . . . . . . . . . . 1,135,514
2,200,000 Regional Transportation District
Passenger Fare Revenue, Series 89A
3.250%, 06/01/99**
LOC: Credit Local de France . . . . . . . . . . . . . . . . . . 2,200,000
--------------
8,235,514
--------------
CONNECTICUT--3.0%
6,500,000 Connecticut State GO
Series 1997 B
3.200%, 05/15/14**
SBPA: Bayerische Landesbank GZ . . . . . . . . . . . . . . . . . 6,500,000
2,200,000 Connecticut State Special Assessment
Unemployment Compensation, Series C
FGIC Insured
3.900%, 07/01/98
SBPA: FGIC Securities Purchase, Inc . . . . . . . . . . . . . . . 2,200,000
--------------
8,700,000
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1997
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- --------
<S> <C> <C>
DELAWARE--1.0%
$ 3,000,000 Delaware State
Series A
5.000%, 01/01/98. . . . . . . . . . . . . . . . . . . . . . . . $ 3,012,951
--------------
FLORIDA--4.8%
8,000,000 Dade County Water & Sewer Revenue Systems
3.250%, 10/05/22**
SBPA: Commerzbank . . . . . . . . . . . . . . . . . . . . . . . 8,000,000
2,200,000 Florida State Board of Education Capital Outlay
Public Education, Series F
7.000%, 06/01/98. . . . . . . . . . . . . . . . . . . . . . . . 2,252,024
3,700,000 Jacksonville, Florida
Series A
3.600%, 10/10/97
LINE: Morgan Guaranty Trust, Credit Suisse, Bayerische
Landesbank GZ, Sunbank. . . . . . . . . . . . . . . . . . . . . 3,700,000
--------------
13,952,024
--------------
GEORGIA--7.0%
1,500,000 Burke County Development Authority, PCR
Georgia Power Project, Series 3
3.750%, 07/01/24**. . . . . . . . . . . . . . . . . . . . . . . 1,500,000
1,400,000 Burke County Development Authority, PCR
Georgia Power Project, Vogtle 2nd Series
3.700%, 04/01/25**. . . . . . . . . . . . . . . . . . . . . . . 1,400,000
1,200,000 Burke County Development Authority, PCR
Georgia Power Project, Vogtle 3rd Series
3.700%, 09/01/25**. . . . . . . . . . . . . . . . . . . . . . . 1,200,000
1,800,000 Burke County Development Authority, PCR
Oglethorpe Power Corp.
FGIC Insured
3.250%, 01/01/16**
SBPA: Canadian Imperial Bank of Canada. . . . . . . . . . . . . 1,800,000
1,700,000 Burke County Development Authority, PCR
Oglethorpe Power Corp., Vogtle A AMBAC
3.600%, 12/01/97. . . . . . . . . . . . . . . . . . . . . . . . 1,700,000
4,200,000 Georgia Municipal Gas Authority Revenue
Gas Portfolio I Series A
3.300%, 11/01/06**
LOC: Wachovia Bank of N.C., Credit Suisse,
Morgan Guaranty Trust . . . . . . . . . . . . . . . . . . . . . 4,200,000
5,000,000 Georgia Municipal Gas Authority Revenue
Gas Portfolio I Series B
3.500%, 09/01/07**
LOC: Wachovia Bank of N.C., Credit Suisse, Morgan Guaranty Trust,
Bayerisch Landesbank GZ . . . . . . . . . . . . . . . . . . . . 5,000,000
3,600,000 Georgia Municipal Gas Authority Revenue
Transco Project, Series B
3.850%, 10/08/97
LOC: Wachovia Bank of N.C. . . . . . . . . . . . . . . . . . . 3,600,000
--------------
20,400,000
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1997
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- --------
<S> <C> <C>
HAWAII--0.7%
$ 1,000,000 Hawaii Department of Budget & Finance
Kaiser Permanente, Series 84B
3.500%, 09/01/97*** . . . . . . . . . . . . . . . . . . . . . . $ 1,000,000
1,000,000 Hawaii Department of Budget & Finance
Kaiser Permanente, Series 84B
3.750%, 03/01/98*** . . . . . . . . . . . . . . . . . . . . . . 1,000,000
--------------
2,000,000
--------------
ILLINOIS--1.9%
3,000,000 Chicago Illinois GO
Tender Notes
3.550%, 10/31/97***
LOC: Landesbank Hessen-Thueringer GZ . . . . . . . . . . . . . . 3,000,000
2,500,000 Chicago Illinois GO
Tender Notes
3.650%, 02/05/98***
LOC: Morgan Guaranty Trust . . . . . . . . . . . . . . . . . . . 2,500,000
--------------
5,500,000
--------------
KANSAS--4.4%
13,000,000 Kansas Department of Transportation Highway Revenue
Series B
3.200%, 09/01/14**. . . . . . . . . . . . . . . . . . . . . . . . 13,000,000
--------------
LOUISIANA--1.1%
3,300,000 Saint Charles Parish Louisiana
Shell
3.700%, 10/01/22**. . . . . . . . . . . . . . . . . . . . . . . . 3,300,000
--------------
MASSACHUSETTS--2.5%
2,250,000 Massachusetts Bay Transportation Authority
84A
3.450%, 09/02/97***
LOC: State Street Bank & Trust. . . . . . . . . . . . . . . . . . 2,250,000
4,200,000 Massachusetts Bay Transportation Authority
84A
3.750%, 03/01/98***
LOC: State Street Bank & Trust. . . . . . . . . . . . . . . . . . 4,200,000
1,000,000 Massachusetts Bay Transportation Authority
Series C
3.550%, 09/04/97
LOC: West Deutsche Landesbank . . . . . . . . . . . . . . . . . . 1,000,000
--------------
7,450,000
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1997
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- --------
<S> <C> <C>
MICHIGAN--2.9%
$3,000,000 Michigan Municipal Bond Authority Revenue
Series B
4.500%, 07/02/98. . . . . . . . . . . . . . . . . . . . . . . . $ 3,016,841
5,500,000 Michigan State Housing Development Rental Revenue
Series B
3.300%, 04/01/19**
LOC: Landesbank Hessen-Thueringen GZ. . . . . . . . . . . . . . 5,500,000
--------------
8,516,841
--------------
MISSOURI--2.4%
3,200,000 Missouri State Health & Educational Facility
Washington University B
3.750%, 09/01/30**
SBPA: Morgan Guaranty Trust . . . . . . . . . . . . . . . . . . 3,200,000
3,700,000 Missouri State Health & Educational Facility
SSM Health Care Project, Series B
3.350%, 06/01/22**
SBPA: Rabobank. . . . . . . . . . . . . . . . . . . . . . . . . 3,700,000
--------------
6,900,000
--------------
NEVADA--3.9%
2,500,000 Clark County Airport Improvement Authority Revenue
MBIA Insured
3.250%, 07/01/12**
LINE: Union Bank Switzerland. . . . . . . . . . . . . . . . . . 2,500,000
8,955,000 Clark County Airport Improvement Authority Revenue
MBIA Insured
3.250%, 07/01/25**
LOC: Union Bank Switzerland . . . . . . . . . . . . . . . . . . 8,955,000
--------------
11,455,000
--------------
NEW MEXICO--4.6%
4,000,000 Albuquerque Airport Authority Revenue
AMBAC 95
3.250%, 07/01/14**
SBPA: Canadian Imperial Bank of Canada. . . . . . . . . . . . . 4,000,000
4,300,000 Hurley PCR
British Petroleum
3.750%, 12/01/15**. . . . . . . . . . . . . . . . . . . . . . . 4,300,000
5,000,000 New Mexico State
TRANS
4.500%, 06/30/98. . . . . . . . . . . . . . . . . . . . . . . . 5,025,892
--------------
13,325,892
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1997
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- --------
<S> <C> <C>
NEW YORK--3.2%
$ 2,500,000 New York City Municipal Water Finance Authority
FGIC Insured
3.700%, 06/15/23**
LIQ: FGIC Securities Purchase, Inc. . . . . . . . . . . . . . . $ 2,500,000
2,000,000 New York City Municipal Water Finance Authority
FGIC Insured
3.800%, 06/15/24**
LIQ: FGIC Securities Purchase, Inc. . . . . . . . . . . . . . . 2,000,000
5,000,000 New York Municipal Assistance Corp.
Subser K1
3.150%, 07/01/08**
LOC: West Deutsche Landesbank . . . . . . . . . . . . . . . . . 5,000,000
--------------
9,500,000
--------------
NORTH CAROLINA--7.8%
8,850,000 Charlotte Airport Revenue
MBIA 93A
3.250%, 07/01/16**
SBPA: Commerzbank . . . . . . . . . . . . . . . . . . . . . . . 8,850,000
1,000,000 Raleigh Durham Airport Authority
American Airlines B1
3.750%, 11/01/15**
LOC: Royal Bank of Canada . . . . . . . . . . . . . . . . . . . 1,000,000
6,800,000 Raleigh Durham Airport Authority
American Airlines Series A
3.750%, 11/01/15**
LOC: Royal Bank of Canada . . . . . . . . . . . . . . . . . . . 6,800,000
6,200,000 Winston Salem Water & Sewer System
3.300%, 06/01/14**
SPBA: Wachovia Bank of N.C. . . . . . . . . . . . . . . . . . . 6,200,000
--------------
22,850,000
--------------
TENNESSEE--5.6%
6,600,000 Memphis Tennessee GO
Series A
3.350%, 08/01/03**
SBPA: Westdeutche Landesbank. . . . . . . . . . . . . . . . . . 6,600,000
1,400,000 Metro Nashville/Davidson County Airport Authority
American Airlines Series A
3.750%, 10/01/12***
LOC: Credit Suisse. . . . . . . . . . . . . . . . . . . . . . . 1,400,000
1,400,000 Metro Nashville/Davidson County Health
Vanderbilt University
3.950%, 05/01/98*** . . . . . . . . . . . . . . . . . . . . . . 1,400,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1997
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- --------
<S> <C> <C>
TENNESSEE-- (CONTINUED)
$ 1,400,000 Metro Nashville/Davidson County Health
Vanderbilt University 85A
3.650%, 01/15/98. . . . . . . . . . . . . . . . . . . . . . . . $ 1,400,000
5,500,000 Tennessee State
BAN Series E
3.250%, 07/02/01**. . . . . . . . . . . . . . . . . . . . . . . 5,500,000
--------------
16,300,000
--------------
TEXAS--19.9%
2,050,000 Dallas Area Rapid Transit Authority
Series A
3.700%, 09/09/97
LOC: Credit Suisse, Swiss Bank Corp . . . . . . . . . . . . . . 2,050,000
4,000,000 Dallas Area Rapid Transit Authority
Series A
3.750%, 10/09/97
LOC: Credit Suisse, Swiss Bank Corp . . . . . . . . . . . . . . 4,000,000
4,000,000 Dallas Area Rapid Transit Authority
Series A
3.600%, 10/14/97
LOC: Credit Suisse, Swiss Bank Corp . . . . . . . . . . . . . . 4,000,000
1,200,000 Grapevine Texas IDC
American Airlines B-3
3.750%, 12/01/24**
LOC: Morgan Guaranty. . . . . . . . . . . . . . . . . . . . . . 1,200,000
8,000,000 Harris County Texas Health Facilities
Memorial Hospital Series B
3.250%, 06/01/24**
SBPA: Societe Generale. . . . . . . . . . . . . . . . . . . . . 8,000,000
3,700,000 Harris County Texas Health Facilities
Methodist Hospital
3.700%, 03/01/00**
LIQ: Morgan Guaranty. . . . . . . . . . . . . . . . . . . . . . 3,700,000
5,000,000 Harris County Texas Health Facilities
Sisters of Charity Series C
3.300%, 07/01/23**
SBPA: Credit Suisse . . . . . . . . . . . . . . . . . . . . . . 5,000,000
4,200,000 Harris County Texas Health Facilities
St. Lukes Episcopal Hospital
3.700%, 02/15/21**. . . . . . . . . . . . . . . . . . . . . . . 4,200,000
4,200,000 Harris County Toll Road
Series H
3.300%, 08/01/20**
LINE: Morgan Guaranty Trust Co. . . . . . . . . . . . . . . . . 4,200,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1997
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- --------
<S> <C> <C>
TEXAS-- (CONTINUED)
$ 10,340,000 Lower Colorado River Authority Texas Revenue
Refunding Junior Lien 3rd Supply Series
3.250%, 01/01/13**
SBPA: Bayerische Landesbank GZ. . . . . . . . . . . . . . . . . $ 10,340,000
5,000,000 San Antonio Electric & Gas
Series A
3.600%, 09/05/97
LINE: Trust Company Bank, Morgan Guaranty Trust,
Union Bank of Switzerland, Toronto Dominion . . . . . . . . . . 5,000,000
5,700,000 Texas State
TRANS, Series A
4.750%, 08/31/98. . . . . . . . . . . . . . . . . . . . . . . . 5,750,217
900,000 Texas State Water Development Board
3.700%, 03/01/15**
SBPA: Canadian Imperial Bank. . . . . . . . . . . . . . . . . . 900,000
--------------
58,340,217
--------------
UTAH--1.3%
1,000,000 Intermountain Power Agency
Power Supply Revenue, Series 85E
3.500%, 09/15/97***
LOC: Swiss Banking Corp . . . . . . . . . . . . . . . . . . . . 1,000,000
1,100,000 Intermountain Power Agency
Power Supply Revenue, Series 85F
3.400%, 09/04/97
LOC: Swiss Bank Corp. . . . . . . . . . . . . . . . . . . . . . 1,100,000
1,700,000 Intermountain Power Agency
Power Supply Revenue, Series 85F
3.500%, 09/15/97***
LOC: Credit Suisse. . . . . . . . . . . . . . . . . . . . . . . . 1,700,000
--------------
3,800,000
--------------
VERMONT--0.4%
1,255,000 Vermont Education, Health & Buildings Finance Agency
Middlebury College
3.950%, 05/01/98*** . . . . . . . . . . . . . . . . . . . . . . 1,255,000
--------------
WASHINGTON--8.6%
6,200,000 Seattle Water System Revenue
3.300%, 09/01/25**
LOC: Bayerische Landesbank GZ . . . . . . . . . . . . . . . . . 6,200,000
5,000,000 Washington Health Care Facilities
Sisters of Providence, Series E
3.800%, 10/01/05**
LINE: Rabobank. . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1997
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- --------
<S> <C> <C>
WASHINGTON -- (CONTINUED)
$ 4,900,000 Washington State GO
Series 96A
3.300%, 06/01/20**
SBPA: Landesbank Hessen-Thueringen GZ . . . . . . . . . . . . . $ 4,900,000
7,000,000 Washington State GO
Series 96B
3.250%, 06/01/20**
SBPA: Landesbank Hessen-Thueringen GZ . . . . . . . . . . . . . 7,000,000
2,220,000 Washington State Public Power Supply
3.300%, 07/01/17**
LOC: National Westminster . . . . . . . . . . . . . . . . . . . 2,220,000
--------------
25,320,000
--------------
WISCONSIN--2.9%
3,000,000 Sheboygan, PCR
Wisconsin Electric Power Company
3.400%, 09/01/15**. . . . . . . . . . . . . . . . . . . . . . . 3,000,000
4,500,000 Sheboygan, PCR
Wisconsin Power & Light
3.400%, 08/01/14**. . . . . . . . . . . . . . . . . . . . . . . 4,500,000
1,061,000 Wisconsin State
3.450%, 09/15/97
LINE: Bank of Nova Scotia, Commerzbank. . . . . . . . . . . . . 1,061,000
--------------
8,561,000
--------------
WYOMING--0.9%
2,500,000 Lincoln County PCR
Exxon
3.700%, 08/01/15**. . . . . . . . . . . . . . . . . . . . . . . 2,500,000
--------------
TOTAL INVESTMENTS--100.0% . . . . . . . . . . . . . . . . . . . $ 293,020,920
(Cost $293,020,920) * --------------
--------------
</TABLE>
________________________________
* Aggregate cost for Federal tax purposes.
** Variable rate demand notes are payable upon not more than one, seven or
thirty 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.
13
<PAGE>
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1997
GLOSSARY OF TERMS
AMBAC = American Municipal Bond Assurance Corp.
BAN = Bond Anticipation Notes
FGIC = Financial Guaranty Insurance Corp.
GO = General Obligations
IDC = Industrial Development Corp.
LINE = Line of Credit
LIQ = Liquidity Facility
LOC = Letter of Credit
MBIA = Municipal Bond Insurance Association
PCR = Pollution Control Revenue
SBPA = Standby Purchase Agreement
TRANS = Tax and Revenue Anticipation Note
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
THE VALIANT FUND
STATEMENTS OF ASSETS AND LIABILITIES
AUGUST 31, 1997
<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. . . . . . . . . . . . $104,552,537 $ -- $543,066,419 $293,020,920
Repurchase agreements . . . . . . . . . . . 322,078,000 -- 37,320,000 --
------------ ---------- ------------ ------------
Total investments at value. . . . . . . 426,630,537 -- 580,386,419 293,020,920
Cash. . . . . . . . . . . . . . . . . . . . 811 25,351 125 --
Interest receivable . . . . . . . . . . . . 148,975 -- 17,287 1,299,611
Deferred organization expense (Note 1). . . 8,557 7,421 5,286 5,519
------------ ---------- ------------ ------------
Total Assets. . . . . . . . . . . . . . 426,788,880 32,772 580,409,117 294,326,050
------------ ---------- ------------ ------------
LIABILITIES:
Dividends payable . . . . . . . . . . . . . 1,712,347 -- 2,428,840 788,560
Payable for investments purchased . . . . . -- -- -- 10,950,321
Advisory fee payable (Note 2) . . . . . . . 67,643 -- 102,658 47,915
Distribution fee payable (Note 2) . . . . . 99,792 -- 1,988 --
Due to Custodian. . . . . . . . . . . . . . -- -- -- 165,655
Accrued expenses. . . . . . . . . . . . . . 8,557 7,421 5,286 5,519
------------ ---------- ------------ ------------
Total Liabilities . . . . . . . . . . . 1,888,339 7,421 2,538,772 11,957,970
------------ ---------- ------------ ------------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . $424,900,541 $ 25,351 $577,870,345 $282,368,080
------------ ---------- ------------ ------------
------------ ---------- ------------ ------------
NET ASSETS CONSIST OF:
Paid-in capital (Note 3). . . . . . . . . . $424,897,316 $ 25,351 $578,129,532 $282,491,743
Accumulated net realized gain (loss) on
investments sold. . . . . . . . . . . . . 3,225 -- (259,187) (123,663)
------------ ---------- ------------ ------------
Total Net Assets. . . . . . . . . . . . $424,900,541 $ 25,351 $577,870,345 $282,368,080
------------ ---------- ------------ ------------
------------ ---------- ------------ ------------
SHARES OF BENEFICIAL INTEREST OUTSTANDING:
Class A . . . . . . . . . . . . . . . . . . 23,062,771 25,351 568,968,730 282,491,743
Class B . . . . . . . . . . . . . . . . . . 300,436,663 -- 9,160,802 --
Class D . . . . . . . . . . . . . . . . . . 101,397,882 -- -- --
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.
15
<PAGE>
THE VALIANT FUND
STATEMENTS OF OPERATIONS
AUGUST 31, 1997
<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>
INVESTMENT INCOME:
Interest (Note 1) . . . . . . . . . . . . . $22,142,122 $738,116 $26,959,795 $9,448,176
EXPENSES:
Investment advisory fee (Note 2). . . . . . 823,706 33,215 975,895 528,012
Distribution fee, Class B (Note 2). . . . . 667,392 -- 23,621 --
Distribution fee, Class D (Note 2). . . . . 414,622 -- -- --
Trustee fees (Note 2) . . . . . . . . . . . 7,024 -- 10,113 5,006
Amortization of organization costs
(Note 1). . . . . . . . . . . . . . . . . 5,019 5,019 5,019 5,019
Expenses borne by the Investment Adviser
(Note 2). . . . . . . . . . . . . . . . . (12,043) (5,019) (15,132) (10,025)
----------- ---------- ------------ ------------
Total Net Expenses. . . . . . . . . . . 1,905,720 33,215 999,516 528,012
----------- ---------- ------------ ------------
NET INVESTMENT INCOME. . . . . . . . . . . . . . . . . 20,236,402 704,901 25,960,279 8,920,164
----------- ---------- ------------ ------------
REALIZED GAIN (LOSS) ON
INVESTMENTS SOLD (NOTE 1) . . . . . . . . . 15,357 (7) 15,375 (10,703)
----------- ---------- ------------ ------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS . . . . . . . . . $20,251,759 $704,894 $25,975,654 $8,909,461
----------- ---------- ------------ ------------
----------- ---------- ------------ ------------
</TABLE>
________________________________
* The Portfolio operated from December 13, 1996 - January 30, 1997.
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
THE VALIANT FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
U.S. TREASURY U.S. TREASURY
MONEY MARKET PORTFOLIO INCOME PORTFOLIO
YEAR ENDED YEAR ENDED PERIOD ENDED PERIOD ENDED
8/31/97 8/31/96* 8/31/97** 8/31/96 ***
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD . . . . . . . . . . $247,135,913 $106,296,537 $ 25,222 $ 25,133
------------ ----------- ------------ ----------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income. . . . . . . . . . . . . . 20,236,402 9,774,485 704,901 179,127
Net realized gain (loss) on investments sold . . 15,357 (10,545) (7) --
------------ ----------- ------------ ----------
Net increase in net assets resulting
from operations. . . . . . . . . . . . . . . 20,251,759 9,763,940 704,894 179,127
------------ ----------- ------------ ----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A . . . . . . . . . . . . . . . . . . (3,174,468) (3,702,775) (704,901) (179,127)
Class B . . . . . . . . . . . . . . . . . . (13,171,814) (5,756,290) -- --
Class D . . . . . . . . . . . . . . . . . . (3,890,120) (315,420) -- --
------------ ------------ ----------- ----------
Net decrease from distributions. . . . . . . . . (20,236,402) (9,774,485) (704,901) (179,127)
------------ ------------ ----------- ----------
SHARE TRANSACTIONS (AT $1.00 PER SHARE):
CLASS A:
Net proceeds from sales of shares . . . . . 174,614,603 293,279,024 245,972,311 93,740,874
Issued to shareholders in reinvestment
of dividends . . . . . . . . . . . . . 1,410 1,365 136 89
Cost of shares repurchased. . . . . . . . . (236,817,140) (238,199,277) (245,972,311) (93,740,874)
------------ ------------ ------------ -----------
Net Class A share transactions . . . . (62,201,127) 55,081,112 136 89
------------ ------------ ------------ -----------
CLASS B:
Net proceeds from sales of shares . . . . . 879,378,409 555,303,801 -- --
Cost of shares repurchased. . . . . . . . . (705,276,725) (505,084,160) -- --
------------ ------------ ------------ -----------
Net Class B share transactions . . . . 174,101,684 50,219,641 -- --
------------ ------------ ------------ -----------
CLASS D:
Net proceeds from sales of shares . . . . . 318,106,403 49,343,549 -- --
Cost of shares repurchased. . . . . . . . . (252,257,689) (13,794,381) -- --
------------ ------------ ------------ -----------
Net Class D share transactions . . . . 65,848,714 35,549,168
------------ ---------- ------------ -----------
Net increase from share transactions . 177,749,271 140,849,921 136 89
------------ ------------ ------------ -----------
Net increase in net assets. . . . . . . . . 177,764,628 140,839,376 129 89
------------ ------------ ------------ -----------
NET ASSETS AT END OF PERIOD . . . . . . . . . . . . . $424,900,541 $247,135,913 $ 25,351 $ 25,222
------------ ------------ ------------ -----------
------------ ------------ ------------ -----------
</TABLE>
________________________________
* The Portfolio commenced Class D shares operations on May 1, 1996.
** The Portfolio operated from December 13, 1996 - January 30, 1997.
*** The Portfolio operated from December 11, 1995 - January 10, 1996.
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
THE VALIANT FUND
STATEMENTS OF CHANGES IN NET ASSETS - (CONTINUED)
<TABLE>
<CAPTION>
GENERAL MONEY TAX-EXEMPT
MARKET PORTFOLIO MONEY MARKET PORTFOLIO
YEAR ENDED YEAR ENDED PERIOD ENDED PERIOD ENDED
8/31/97 8/31/96 8/31/97 8/31/96
-------------- -------------- ------------ ------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD . . . . . . . . . . $ 342,803,442 $ 385,426,702 $279,867,103 $283,653,602
-------------- -------------- ------------ ------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income. . . . . . . . . . . . . . 25,960,279 25,653,674 8,920,164 9,548,672
Net realized gain (loss) on investments sold . . 15,375 (184,202) (10,703) (4,894)
-------------- -------------- ------------ ------------
Net increase (decrease) in net
assets resulting from operations . . . 25,975,654 25,469,472 8,909,461 9,543,778
-------------- -------------- ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A . . . . . . . . . . . . . . . . . . (25,485,808) (25,172,442) (8,920,164) (9,548,672)
Class B . . . . . . . . . . . . . . . . . . (474,471) (481,232) -- --
-------------- -------------- ------------ ------------
Net decrease from distributions. . . . . . . . . (25,960,279) (25,653,674) (8,920,164) (9,548,672)
-------------- -------------- ------------ ------------
SHARE TRANSACTIONS (AT $1.00 PER SHARE):
CLASS A:
Net proceeds from sales of shares . . . . . 2,791,812,765 1,937,503,266 573,325,388 452,820,528
Issued to shareholders in reinvestment
of dividends . . . . . . . . . . . . . 2,914,391 1,317,345 890 856
Cost of shares repurchased. . . . . . . . . (2,560,095,823) (1,980,536,000) (570,814,598) (456,602,989)
-------------- -------------- ------------ ------------
Net Class A share transactions . . . . 234,631,333 (41,715,389) 2,511,680 (3,781,605)
-------------- -------------- ------------ ------------
CLASS B:
Net proceeds from sales of shares . . . . . 12,777,268 11,688,082 -- --
Cost of shares repurchased. . . . . . . . . (12,357,073) (12,411,751) -- --
-------------- -------------- ------------ ------------
Net Class B share transactions . . . . 420,195 (723,669) -- --
-------------- -------------- ------------ ------------
Net increase (decrease) from share
transactions . . . . . . . . . . . . . 235,051,528 (42,439,058) 2,511,680 (3,781,605)
-------------- -------------- ------------ ------------
Net increase (decrease) in net
assets . . . . . . . . . . . . . . 235,066,903 (42,623,260) 2,500,977 (3,786,499)
-------------- -------------- ------------ ------------
NET ASSETS AT END OF PERIOD . . . . . . . . . . . . . $ 577,870,345 $ 342,803,442 $282,368,080 $279,867,103
-------------- -------------- ------------ ------------
-------------- -------------- ------------ ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE>
THE VALIANT FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
U.S. TREASURY MONEY
MARKET PORTFOLIO - CLASS A
YEAR ENDED YEAR ENDED PERIOD ENDED PERIOD ENDED
8/31/97 8/31/96 8/31/95 8/31/94 (1)
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of period . . . . . . . . . $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- ---------
Income from Investment Operations:
Net investment income . . . . . . . . . . . 0.052 0.053 0.054 0.012
-------- -------- -------- ---------
Less Distributions:
Dividends from net investment income. . . . (0.052) (0.053) (0.054) (0.012)
-------- -------- -------- ---------
Net Asset Value, End of period . . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- ---------
-------- -------- -------- ---------
Total Return (a) . . . . . . . . . . . . . . . . . . . 5.30% 5.45% 5.60% 1.19%
Ratios/Supplemental Data:
Net Assets, End of Period (000's). . . . . . . . . . . $ 23,063 $ 85,260 $ 30,183 $ 25
Ratios to average net assets:
Net investment income . . . . . . . . . . . 5.12% 5.21% 5.79% 4.06% (b)
Operating expenses. . . . . . . . . . . . . 0.20% 0.20% 0.20% 0.20% (b)
Operating expenses before
reimbursements/waivers. . . . . . . . . . 0.20% 0.20% 0.21% 0.26% (b)
<CAPTION>
U.S. TREASURY MONEY
MARKET PORTFOLIO - CLASS B
YEAR ENDED YEAR ENDED PERIOD ENDED PERIOD ENDED
8/31/97 8/31/96 8/31/95 8/31/94 (1)
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of period . . . . . . . . . $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- ---------
Income from Investment Operations:
Net investment income . . . . . . . . . . . 0.049 0.050 0.052 0.011
-------- -------- -------- ---------
Less Distributions:
Dividends from net investment income. . . . (0.049) (0.050) (0.052) (0.011)
-------- -------- -------- ---------
Net Asset Value, End of period . . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- ---------
-------- -------- -------- ---------
Total Return (a) . . . . . . . . . . . . . . . . . . . 5.04% 5.18% 5.34% 1.12%
Ratios/Supplemental Data:
Net Assets, End of Period (000's). . . . . . . . . . .$ 300,437 $ 126,327 $ 76,114 $ 13,355
Ratios to average net assets:
Net investment income . . . . . . . . . . . 4.93% 5.01% 5.41% 3.87% (b)
Operating expenses. . . . . . . . . . . . . 0.45% 0.45% 0.45% 0.45% (b)
Operating expenses before
reimbursements/waivers. . . . . . . . . . 0.45% 0.45% 0.46% 0.50% (b)
</TABLE>
________________________________
(1) The Portfolio commenced Class A and Class B shares operations on May 17,
1994.
(a) Total returns for periods less than one year are not annualized and had
the Investment Adviser and Trustees not reimbursed and waived certain
expenses, respectively, total returns would have been lower.
(b) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE>
THE VALIANT FUND
FINANCIAL HIGHLIGHTS - (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
U.S. TREASURY MONEY
MARKET PORTFOLIO - CLASS D
YEAR ENDED YEAR ENDED
8/31/97 8/31/96 (1)
------------- -------------
<S> <C> <C>
Net Asset Value, Beginning of period . . . . . . . . $ 1.000 $ 1.000
----------- ----------
Income from Investment Operations:
Net investment income . . . . . . . . . . . . . 0.047 0.015
----------- ----------
Less Distributions:
Dividends from net investment income. . . . . . (0.047) (0.015)
----------- ----------
Net Asset Value, End of period . . . . . . . . . . . $ 1.000 $ 1.000
----------- ----------
----------- ----------
Total Return (a) . . . . . . . . . . . . . . . . . . 4.78% 1.55%
Ratios/Supplemental Data:
Net Assets, End of Period (000's). . . . . . . . . . $ 101,401 $ 35,549
Ratios to average net assets:
Net investment income . . . . . . . . . . . . . 4.69% 4.68% (b)
Operating expenses. . . . . . . . . . . . . . . 0.70% 0.70% (b)
Operating expenses before
reimbursements/waivers . . . . . . . . . . 0.70% 0.70% (b)
<CAPTION>
U.S. TREASURY MONEY
INCOME PORTFOLIO - CLASS A
PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED
8/31/97 (2) 8/31/96 (3) 8/31/95 (4) 8/31/94 (5)
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of period . . . . . . . . $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income . . . . . . . . . . . . . 0.005 0.004 0.004 0.001
----------- ---------- ---------- ----------
Less Distributions:
Dividends from net investment income. . . . . . (0.005) (0.004) (0.004) (0.001)
----------- ---------- ---------- ----------
Net Asset Value, End of period . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------- ---------- ---------- ----------
----------- ---------- ---------- ----------
Total Return (a) . . . . . . . . . . . . . . . . . . 0.54% 0.35% 0.39% 0.12%
Ratios/Supplemental Data:
Net Assets, End of Period (000's). . . . . . . . . . $ 25 $ 25 $ 25 $ 25
Ratios to average net assets:
Net investment income . . . . . . . . . . . . . 4.24% 4.15% 4.47% 2.96% (b)
Operating expenses. . . . . . . . . . . . . . . 0.20% 0.20% 0.20% 0.20% (b)
Operating expenses before
reimbursements/waivers . . . . . . . . . . 0.23% 0.35% 0.29% 0.22% (b)
</TABLE>
________________________________
(1) The Portfolio commenced Class D shares operations on May 1, 1996.
(2) The Portfolio operated from December 13, 1996 to January 30, 1997.
(3) The Portfolio operated from December 11, 1995 to January 10, 1996.
(4) The Portfolio operated from December 12, 1994 to January 11, 1995.
(5) The Portfolio operated from December 28, 1993 to January 12, 1994.
(a) Total returns for periods less than one year are not annualized and had
the Investment Adviser and Trustees not reimbursed and waived certain
expenses, respectively, total returns would have been lower.
(b) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE>
THE VALIANT FUND
FINANCIAL HIGHLIGHTS - (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
GENERAL MONEY
MARKET PORTFOLIO - CLASS A
YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
8/31/97 8/31/96 8/31/95 8/31/94 (1)
----------- ---------- ----------- ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of period . . . . . . . . $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income . . . . . . . . . . . . . 0.053 0.053 0.056 0.033
----------- ---------- ---------- ----------
Less Distributions:
Dividends from net investment income. . . . . . (0.053) (0.053) (0.056) (0.033)
----------- ---------- ---------- ----------
Net Asset Value, End of period . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------- ---------- ---------- ----------
----------- ---------- ---------- ----------
Total Return (a) . . . . . . . . . . . . . . . . . . 5.40% 5.52% 5.81% 3.33%
Ratios/Supplemental Data:
Net Assets, End of Period (000's). . . . . . . . . . $ 568,715 $ 334,069 $ 375,965 $ 167,016
Ratios to average net assets:
Net investment income . . . . . . . . . . . . . 5.33% 5.36% 5.70% 3.70% (b)
Operating expenses. . . . . . . . . . . . . . . 0.20% 0.20% 0.20% 0.20% (b)
Operating expenses before
reimbursements/waivers . . . . . . . . . . 0.20% 0.20% 0.20% 0.21% (b)
<CAPTION>
GENERAL MONEY
MARKET PORTFOLIO - CLASS B
YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
8/31/97 8/31/96 8/31/95 8/31/94 (1)
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of period . . . . . . . . $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income . . . . . . . . . . . . . 0.050 0.051 0.053 0.009
----------- ---------- ---------- ----------
Less Distributions:
Dividends from net investment income. . . . . . (0.050) (0.051) (0.053) (0.009)
----------- ---------- ---------- ----------
Net Asset Value, End of period . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------- ---------- ---------- ----------
----------- ---------- ---------- ----------
Total Return (a) . . . . . . . . . . . . . . . . . . 5.14% 5.26% 5.54% 0.92%
Ratios/Supplemental Data:
Net Assets, End of Period (000's). . . . . . . . . . $ 9,155 $ 8,734 $ 9,461 $ 9,520
Ratios to average net assets:
Net investment income . . . . . . . . . . . . . 5.02% 5.11% 5.33% 3.99% (b)
Operating expenses. . . . . . . . . . . . . . . 0.45% 0.45% 0.45% 0.45% (b)
Operating expenses before
reimbursements/waivers . . . . . . . . . . 0.45% 0.45% 0.45% 0.46% (b)
</TABLE>
________________________________
(1) The Portfolio commenced Class A and Class B shares operations on
September 21, 1993 and May 17, 1994, respectively.
(a) Total returns for periods less than one year are not annualized and had
the Investment Adviser and Trustees not reimbursed and waived certain
expenses, respectively, total returns would have been lower.
(b) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE>
THE VALIANT FUND
FINANCIAL HIGHLIGHTS - (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
TAX-EXEMPT MONEY
MARKET PORTFOLIO - CLASS A
YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
8/31/97 8/31/96 8/31/95 8/31/94 (1)
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of period . . . . . . . . $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income . . . . . . . . . . . . . 0.034 0.034 0.035 0.021
----------- ---------- ---------- ----------
Less Distributions:
Dividends from net investment income. . . . . . (0.034) (0.034) (0.035) (0.021)
----------- ---------- ---------- ----------
Net Asset Value, End of period . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------- ---------- ---------- ----------
----------- ---------- ---------- ----------
Total Return (a) . . . . . . . . . . . . . . . . . . 3.42% 3.43% 3.67% 2.11%
Ratios/Supplemental Data:
Net Assets, End of Period (000's). . . . . . . . . . $ 282,368 $ 279,867 $ 283,654 $ 258,130
Ratios to average net assets:
Net investment income . . . . . . . . . . . . . 3.38% 3.34% 3.50% 2.38% (b)
Operating expenses. . . . . . . . . . . . . . . 0.20% 0.20% 0.20% 0.20% (b)
Operating expenses before
reimbursements/waivers . . . . . . . . . . 0.20% 0.20% 0.20% 0.22% (b)
</TABLE>
________________________________
(1) The Portfolio commenced operations on October 7, 1993.
(a) Total returns for periods less than one year are not annualized and had
the Investment Adviser and Trustees not reimbursed and waived certain
expenses, respectively, total returns would have been lower.
(b) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
22
<PAGE>
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1997
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 (the "1940 Act"), 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, the 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. U.S.
Treasury Money Market Class A, B and D, U.S. Treasury Income Class A, General
Money Market Class A and B and Tax-Exempt Money Market Class A are currently
active.
1. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally
accepted accounting principles require management to make certain estimates
and assumptions that affect the amounts of assets and liabilities reported at
the date of the financial statements and the amounts of income and expenses
reported during the reporting period. Actual results could differ from those
estimates.
The following is a summary of significant 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
1940 Act. 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. Interest income consists of market discount earned
(including both original issue and market discount), less amortization of any
market premium.
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 realized capital gains, if any, are distributed
at least annually.
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, a Portfolio
will not 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 and capital gains, if any, the
Portfolios will not be subject to Federal excise tax. Therefore, no Federal
income tax provision is required. As of August 31, 1997, the General Money
Market Portfolio and the Tax-Exempt Money Market Portfolio have capital loss
carryovers of $55,073, 30,898, 173,216 and 53,266, 54,799, 2,267,
respectively, which will expire on August 31, 2003, 2004, and 2,005,
respectively. As of August 31, 1997, the Tax-Exempt Money Market Portfolio
has elected for federal income tax purposes to defer $13,331 of losses
recognized during the period November 1, 1996 to August 31, 1997 to its
fiscal year ending August 31, 1998.
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
23
<PAGE>
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
AUGUST 31, 1997
1. SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
fixed rate of return that is not subject to market fluctuations during the
Portfolio's holding period. It is the Portfolio'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 counterparty
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 AND ALLOCATIONS: 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 its' own
distribution fees.
Income, Portfolio level expenses, and realized and unrealized gains and
losses are allocated to each class of shares on a daily basis based on each
class' portion of net assets.
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.
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 & Trust Company
serves as the Trust's administrator, custodian and transfer agent. Integrity
Investments, Inc. (the "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
Plans; and such extraordinary non-recurring expenses as may arise. From time
to time the Investment Adviser may voluntarily waive all or a portion of the
fees payable to it by a Portfolio. As such, the Investment Adviser has
agreed to reimburse the Portfolios for expenses exceeding 0.20% of average
daily net assets for Class A shares, 0.45% of the average daily net assets
for Class B shares, 0.60% of average daily net assets for Class C shares and
0.70% of average daily net assets for Class D shares. The expense
limitations are voluntary and were in effect through August 31, 1997. The
expense limitations may be removed at any time thereafter with 90 days' prior
notice to existing shareholders.
24
<PAGE>
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
AUGUST 31, 1997
2. INVESTMENT ADVISORY, ADMINISTRATION, DISTRIBUTION AND OTHER FEES -
(CONTINUED)
For the year ended August 31, 1997 the Investment Adviser reimbursed the
Trust as follows:
PORTFOLIO REIMBURSEMENT
- ----------------------------------------------------
U.S. Treasury Money Market $12,043
U.S. Treasury Income 5,019
General Money Market 15,132
Tax-Exempt Money Market 10,025
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 first $500 million of the aggregate average
daily net assets of the Portfolios and 0.05% of average daily net assets in
excess thereof. Fees related to these services are borne directly by the
Investment Adviser.
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
1940 Act. 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 year ended August 31, 1997. 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 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.
3. 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.
25
<PAGE>
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
AUGUST 31, 1997
3. SHARES OF BENEFICIAL INTEREST - (CONTINUED)
At August 31, 1997 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:
NAME OF PORTFOLIO NUMBER OF PERCENTAGE OF
SHAREHOLDERS SHARES OWNED
- ------------------------------------------------------------------------------
U.S. Treasury Money Market 2 88.9%
General Money Market 1 82.6%
Tax-Exempt Money Market 1 99.6%
4. DISTRIBUTIONS (UNAUDITED)
During the fiscal year ended August 31, 1997, 100% of the Tax-Exempt
Money Market Portfolio's distributions paid to the shareholders were
tax-exempt.
26
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders
of The Valiant Fund
In our opinion, the accompanying statements of assets and liabilities,
including the portfolios of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of U.S. Treasury
Money Market Portfolio, U.S. Treasury Income Portfolio, General Money Market
Portfolio and Tax-Exempt Money Market Portfolio (each a portfolio of The
Valiant Fund) at August 31, 1997, the results of each of their operations,
the changes in each of their net assets, and the financial highlights for the
periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of The Valiant
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at August 31, 1997 by
correspondence with the custodian and the application of alternative auditing
procedures where securities purchased had not been received, provide a
reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
October 13, 1997
27
