<PAGE>
THE VALIANT FUND
ANNUAL REPORT
AUGUST 31, 1998
<PAGE>
THE VALIANT FUND
U.S. TREASURY MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS
AUGUST 31, 1998
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- -----------
<S> <C> <C>
U.S. TREASURY BILLS (A)--25.1%
$ 5,000,000 4.935%, 11/27/98 ............................................................... $ 4,940,369
12,000,000 4.990%, 12/24/98 ............................................................... 11,810,380
5,000,000 5.010%, 01/07/99 ............................................................... 4,910,933
5,000,000 5.015%, 01/21/99 ............................................................... 4,901,093
8,000,000 4.980%, 02/04/99 ............................................................... 7,827,360
8,000,000 5.050%, 02/04/99 ............................................................... 7,824,933
10,000,000 5.070%, 02/04/99 ............................................................... 9,780,300
5,000,000 5.075%, 02/04/99 ............................................................... 4,890,042
7,000,000 5.100%, 02/04/99 ............................................................... 6,845,300
10,000,000 4.930%, 02/11/99 ............................................................... 9,776,781
12,000,000 4.935%, 02/11/99 ............................................................... 11,731,865
10,000,000 4.940%, 02/18/99 ............................................................... 9,766,722
25,000,000 5.045%, 03/04/99 ............................................................... 24,355,361
12,000,000 5.120%, 03/04/99 ............................................................... 11,685,973
-----------
TOTAL U.S. TREASURY BILLS (COST $131,047,412)................................... 131,047,412
-----------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
REPURCHASE AGREEMENTS--74.9%
123,000,000 First Boston Corp.
5.750%, 09/01/98, Dated 08/31/98, Repurchase Price $123,019,646
(Collateralized by U.S. Treasury Notes, 6.375% & 6.625%, due
05/15/00 & 05/15/07; par value $ 20,825,000 & $ 95,270,000;
valued at $ 21,670,273 & $ 106,678,857, respectively)............................ 123,000,000
10,127,000 Goldman, Sachs & Co., Inc.
5.700%, 09/01/98, Dated 08/31/98, Repurchase Price $10,128,603
(Collateralized by U.S. Treasury Note, 7.25%, due 05/15/16;
par value $ 8,466,000; valued at $10,330,071).................................... 10,127,000
129,000,000 J.P. Morgan & Co., Inc.
5.750%, 09/01/98, Dated 08/31/98, Repurchase Price $129,020,604
(Collateralized by U.S. Treasury Notes, 5.50%, 5.875%, 6.00%, 5.625%,
8.75% & 8.125%, due 02/15/08, 11/15/05, 08/15/00, 12/31/99, 05/15/20
& 08/15/19; par value $ 15,507,000, $ 8,153,000, $ 2,378,000, $ 37,412,000,
$ 25,020,000 & $ 13,639,000; valued at $15,980,216, $8,665,553, $2,429,162,
$38,017,921, $35,791,694 & $18,064,455, respectively, and by U.S. Treasury
Bill, due 08/19/99; par value $13,250,000; valued at $12,631,543)................ 129,000,000
129,000,000 Morgan Stanley Group, Inc.
5.780%, 09/01/98, Dated 08/31/98, Repurchase Price $129,020,712
(Collateralized by U.S. Treasury Note, 5.375%, due 06/30/00; par value
$ 129,760,000; valued at $ 131,847,411).......................................... 129,000,000
------------
TOTAL REPURCHASE AGREEMENTS (COST $391,127,000)................................. 391,127,000
------------
TOTAL INVESTMENTS--100.0% (COST $522,174,412)*.................................. $522,174,412
------------
------------
</TABLE>
- --------------------------------------------------------------------
(A) Rate represents annualized yield to maturity at date of purchase.
* 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>
COMMERCIAL PAPER (A)--85.3%
CHEMICALS--7.1%
Dupont (E I) De Nemours & Co.
$ 7,000,000 5.370%, 09/23/98.................... $ 6,977,028
14,000,000 5.460%, 11/23/98.................... 13,823,764
-------------
20,800,792
-------------
COSMETICS & TOILETRIES--2.4%
7,000,000 Gillette Co.
5.820%, 09/01/98.................... 7,000,000
-------------
DRUGS & HEALTH CARE--6.8%
20,000,000 Abbott Laboratories
5.470%, 09/24/98.................... 19,930,105
-------------
ELECTRONICS--4.8%
6,000,000 Emerson Electric Co.
5.480%, 10/23/98.................... 5,952,507
-------------
8,000,000 Motorola, Inc.
5.450%, 12/17/98.................... 7,870,411
-------------
13,822,918
-------------
FINANCIAL SERVICES--10.9%
14,000,000 Bell Atlantic Financial Services
5.850%, 09/01/98.................... 14,000,000
-------------
Ford Motor Credit Co.
3,000,000 5.470%, 11/18/98.................... 2,964,445
10,000,000 5.440%, 11/30/98.................... 9,864,000
5,000,000 5.400%, 12/09/98.................... 4,925,750
-------------
17,754,195
-------------
31,754,195
-------------
FOOD PRODUCTS--6.9%
3,000,000 Coca Cola Co.
5.450%, 10/30/98.................... 2,973,204
-------------
7,000,000 H.J. Heinz Co.
5.480%, 10/19/98.................... 6,948,854
-------------
10,307,000 Kellogg Co.
5.480%, 09/04/98.................... 10,302,293
-------------
20,224,351
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
2
<PAGE>
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1998
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- -------------
<S> <C> <C>
COMMERCIAL PAPER (A)--(CONTINUED)
INTERNATIONAL OIL--9.5%
Amoco Co.
$ 5,000,000 5.460%, 11/23/98.................... $ 4,937,058
3,000,000 5.420%, 12/17/98.................... 2,951,672
6,000,000 5.440%, 12/21/98.................... 5,899,360
-------------
13,788,090
-------------
6,000,000 Atlantic Richfield Co.
5.450%, 11/23/98.................... 5,924,608
-------------
8,000,000 Shell Oil Co.
5.450%, 09/29/98.................... 7,966,089
-------------
27,678,787
-------------
LEISURE TIME--5.0%
Walt Disney Co.
5,000,000 5.420%, 10/26/98.................... 4,958,597
2,000,000 5.250%, 03/10/99.................... 1,944,583
4,000,000 5.360%, 04/13/99.................... 3,866,596
4,000,000 5.360%, 04/14/99.................... 3,866,000
-------------
14,635,776
-------------
NON-BANK FINANCE--16.2%
General Electric Capital Corp.
8,000,000 5.490%, 10/30/98.................... 7,928,020
4,000,000 5.360%, 04/07/99.................... 3,870,169
5,000,000 5.360%, 04/12/99.................... 4,833,989
4,000,000 5.350%, 05/19/99.................... 3,845,444
-------------
20,477,622
-------------
IBM Credit Corp.
5,000,000 5.490%, 10/19/98.................... 4,963,400
4,000,000 5.430%, 10/30/98.................... 3,964,403
4,000,000 5.390%, 12/14/98.................... 3,937,716
-------------
12,865,519
-------------
Transamerica Finance Corp., Inc.
9,000,000 5.570%, 09/04/98.................... 8,995,822
5,000,000 5.460%, 12/07/98.................... 4,926,442
-------------
13,922,264
-------------
47,265,405
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE>
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1998
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- -------------
<S> <C> <C>
COMMERCIAL PAPER (A)--(CONTINUED)
PHOTOGRAPHY--1.0%
$ 3,000,000 Eastman Kodak Co.
5.500%, 10/13/98.................... $ 2,980,750
-------------
PUBLISHING--4.2%
McGraw-Hill Co., Inc.
6,200,000 5.370%, 09/22/98.................... 6,180,578
6,066,000 5.500%, 09/23/98.................... 6,045,612
-------------
12,226,190
-------------
SOAPS AND DETERGENTS--5.4%
Procter & Gamble Co.
4,000,000 5.450%, 12/11/98.................... 3,938,839
3,987,000 5.440%, 12/17/98.................... 3,922,535
3,000,000 5.430%, 12/22/98.................... 2,949,320
5,000,000 5.440%, 12/28/98.................... 4,910,844
-------------
15,721,538
-------------
TECHNOLOGY--2.7%
International Business Machines
4,000,000 5.430%, 11/02/98.................... 3,962,594
4,000,000 5.460%, 11/16/98.................... 3,953,893
-------------
7,916,487
-------------
TELECOMMUNICATIONS--2.4%
Lucent Technologies, Inc.
5,000,000 5.450%, 09/25/98.................... 4,981,833
2,000,000 5.470%, 11/02/98.................... 1,981,159
-------------
6,962,992
-------------
TOTAL COMMERCIAL PAPER
(COST $248,920,286)............... 248,920,286
-------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS (A)--6.8%
Federal Home Loan Mortgage Discount Notes
14,749,000 5.330%, 10/06/98.................... 14,672,572
5,000,000 5.320%, 10/09/98.................... 4,971,922
-------------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS
(COST $19,644,494)................. 19,644,494
-------------
TOTAL COMMERCIAL PAPER AND U.S.
GOVERNMENT AND AGENCY
OBLIGATIONS (COST $268,564,780).... 268,564,780
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1998
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- -------------
<S> <C> <C>
REPURCHASE AGREEMENTS--7.9%
$ 6,000,000 First Boston Corp.
5.750%, 09/01/98, Dated 08/31/98, Repurchase Price $6,000,958
(Collateralized By U.S. Treasury Note, 9.125%, Due 05/15/99;
par value $ 5,840,000; valued at $ 6,151,505)........................ $ 6,000,000
7,000,000 J.P. Morgan & Co., Inc.
5.750%, 09/01/98, Dated 08/31/98, Repurchase Price $7,001,118
(Collateralized By U.S. Treasury Note, 6.00%, Due 08/15/00;
par value $ 6,990,000; valued at $ 7,140,388)........................ 7,000,000
10,137,000 Morgan Stanley Group, Inc.
5.780%, 09/01/98, Dated 08/31/98, Repurchase Price $10,138,628
(Collateralized By U.S. Treasury Note, 5.125%, Due 08/31/00;
par value $ 10,330,000; valued at $ 10,370,349)...................... 10,137,000
-------------
TOTAL REPURCHASE AGREEMENTS (COST $23,137,000)....................... 23,137,000
-------------
TOTAL INVESTMENTS--100.0% (COST $291,701,780)*....................... $291,701,780
-------------
-------------
</TABLE>
- ----------------------------------------------------------------------
(A) Rate represents annualized yield to maturity at date of purchase.
* Aggregate cost for Federal tax purposes.
5
<PAGE>
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS
AUGUST 31, 1998
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- --------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES--100.0%
ALASKA--4.0%
$ 9,000,000 Alaska Housing Finance Corporation
Series C
3.220%, 06/01/26++
SBPA: Swiss Bank Corp. ....................... $ 9,000,000
1,700,000 Valdez Marine Terminal Revenue
Exxon Project
3.300%, 10/01/25++ ........................... 1,700,000
--------------
10,700,000
--------------
ARIZONA--1.7%
4,600,000 Maricopa County Arizona, PCR
Arizona Public Service, Series E
3.300%, 05/01/29++
LOC: Bank of America ......................... 4,600,000
--------------
CALIFORNIA--2.7%
7,200,000 Los Angeles County
TRANS, Series A
4.500%, 06/30/99 ............................. 7,249,642
--------------
COLORADO--2.0%
5,500,000 Colorado Health Facilities
Catholic Health Initiative, Series 97B
3.250%, 12/01/25++
SBPA: Toronto Dominion Bank .................. 5,500,000
--------------
CONNECTICUT--0.9%
2,300,000 Connecticut State Special Assessment
Unemployment Compensation, Series C, FGIC Insured
3.600%, 07/01/99
SBPA: FGIC Securities Purchase, Inc. ......... 2,300,000
--------------
FLORIDA--5.0%
3,600,000 Dade County IDA
Florida Power & Light
3.350%, 06/01/21++ ........................... 3,600,000
8,000,000 Dade County Water & Sewer Revenue Systems
FGIC Insured
3.150%, 10/05/22++
SBPA: Commerzbank ............................ 8,000,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1998
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- -----------
<S> <C> <C>
FLORIDA--(CONTINUED)
$ 2,000,000 Gainesville Utilities Systems
Series C
3.550%, 12/11/98
LINE: Bank of America, Sunbank ............................................ $ 2,000,000
----------
13,600,000
----------
GEORGIA--7.0%
4,800,000 Burke County Development Authority, PCR
Georgia Power Project, Series 3
3.250%, 07/01/24++.......................................................... 4,800,000
5,000,000 De Kalb Private Hospital Authority
Egelston Children's Hospital, Series A
3.200%, 03/01/24++
LOC: SunTrust Bank ........................................................ 5,000,000
2,500,000 Georgia Municipal Electric Authority Revenue
Variable Project IB
3.200%, 01/01/16++
LOC: ABN AMRO .............................................................. 2,500,000
5,000,000 Georgia Municipal Gas Authority Revenue
Agency Project, Series C
3.250%, 11/01/07++
LOC: Wachovia Bank of N.C., Morgan Guaranty, Bayerisch Landesbank GZ,
Bank of America ............................................................ 5,000,000
1,500,000 Georgia Municipal Gas Authority Revenue
Gas Portfolio I, Series B
3.150%, 09/01/07++
LOC: Wachovia Bank of N.C., Bayerishe Landesbank GZ, Morgan Guaranty,
Credit Suisse .............................................................. 1,500,000
----------
18,800,000
----------
ILLINOIS--3.5%
5,200,000 Chicago Illinois GO
Tender Notes Series 97
3.550%, 10/29/98+++
LOC: Morgan Guaranty ...................................................... 5,200,000
3,000,000 Chicago Illinois GO
Tender Notes, Series 98
3.550%, 02/04/99+++
LOC: Morgan Guaranty ...................................................... 3,000,000
1,300,000 Illinois Sales Tax Revenue
Series K, Pre-Refunded
6.750%, 06/15/99............................................................ 1,351,925
----------
9,551,925
----------
SEE NOTES TO FINANCIAL STATEMENTS.
7
</TABLE>
<PAGE>
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1998
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- ---------
<S> <C> <C>
INDIANA--3.7%
$ 3,700,000 Mount Vernon Indiana, PCR
General Electric, Series 89A
3.300%, 09/04/98.......................................................... $3,700,000
6,235,000 Mount Vernon Indiana, PCR
General Electric, Series 89A
3.500%, 09/11/98............................................................ 6,235,000
----------
9,935,000
----------
KENTUCKY--0.9%
2,500,000 Kentucky Asset/Liability Commission
TRANS, Series A
4.500%, 06/25/99............................................................ 2,518,263
----------
LOUISIANA--2.5%
4,000,000 Louisiana Offshore Terminal Authority
Loop Inc.
3.250%, 09/01/06++
LOC: Union Bank of Switzerland ............................................ 4,000,000
1,100,000 Saint Charles Parish Louisiana
Shell Oil Co.
3.450%, 10/01/22++.......................................................... 1,100,000
1,700,000 Saint Charles Parish Louisiana
Shell Oil Co.
3.350%, 10/01/25++.......................................................... 1,700,000
----------
6,800,000
----------
MARYLAND--0.4%
1,000,000 Maryland State GO
Pre-Refunded
6.800%, 03/01/99............................................................ 1,034,603
----------
MASSACHUSETTS--0.6%
1,600,000 Massachusetts Bay Transportation Authority
Series C
3.500%, 10/09/98
LOC: Westdeutsche Landesbank .............................................. 1,600,000
----------
MICHIGAN--5.3%
3,000,000 Michigan State Building Authority Revenue
3.700%, 10/01/98
LOC: Canadian Imperial Bank of Commerce .................................... 3,000,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1998
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- ---------
<S> <C> <C>
MICHIGAN--(CONTINUED)
$ 5,000,000 Michigan State Housing Development Authority
Series 97B
3.450%, 04/01/19++
LOC: Landesbank Hessen--Thueringen GZ ...................................... $ 5,000,000
5,100,000 Michigan State University
Series A2
3.200%, 08/15/22++.......................................................... 5,100,000
1,200,000 University of Michigan
Series A
3.450%, 09/15/98............................................................ 1,200,000
----------
14,300,000
----------
MINNESOTA--0.9%
2,500,000 Rochester Health Care Facilities
Mayo Foundation / Mayo Medical Center, Series C
3.500%, 09/09/98++.......................................................... 2,500,000
----------
MISSISSIPPI--2.5%
3,300,000 Jackson County Port Facility
Chevron USA Project
3.500%, 06/01/23++.......................................................... 3,300,000
3,355,000 Jackson County, PCR
Chevron
3.250%, 12/01/16++.......................................................... 3,355,000
----------
6,655,000
----------
MISSOURI--1.1%
2,900,000 Missouri State Health & Educational Facility
Washington University, Series B
3.350%, 09/01/30++
SBPA: Morgan Guaranty Trust ................................................ 2,900,000
----------
NEVADA--3.4%
4,975,000 Clark County Airport Improvement Authority Revenue
3.150%, 07/01/25++
LINE: Union Bank Switzerland .............................................. 4,975,000
4,050,000 Clark County Airport Improvement Authority Revenue
MBIA Insured
3.150%, 07/01/12++
LINE: National Westminster ................................................ 4,050,000
----------
9,025,000
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1998
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- ---------
<S> <C> <C>
NEW HAMPSHIRE--1.0%
$ 2,800,000 New Hampshire State GO
3.550%, 09/08/98
SBPA: Landesbank Hessen .................................................. $ 2,800,000
----------
NEW MEXICO--2.8%
5,300,000 Albuquerque Airport Authority Revenue
AMBAC Insured
3.150%, 07/01/14++
SBPA: Canadian Imperial Bank of Commerce .................................. 5,300,000
2,300,000 Hurley, PCR
British Petroleum
3.350%, 12/01/15++.......................................................... 2,300,000
----------
7,600,000
----------
NEW YORK--2.0%
5,500,000 New York City Municipal Water Finance Authority
FGIC Insured
3.300%, 06/15/23++
LIQ: FGIC Securities Purchase, Inc.......................................... 5,500,000
----------
NORTH CAROLINA--5.2%
6,000,000 Charlotte Airport Revenue
MBIA 93A
3.150%, 07/01/16++
SBPA: Commerzbank AG ...................................................... 6,000,000
1,400,000 Raleigh Durham Airport Authority
American Airlines, Series A
3.350%, 11/01/05++
LOC: Royal Bank of Canada .................................................. 1,400,000
1,600,000 Raleigh Durham Airport Authority
American Airlines, Series B1
3.350%, 11/01/15++
LOC: Royal Bank of Canada .................................................. 1,600,000
5,000,000 Winston Salem Water & Sewer System
3.200%, 06/01/14++
SBPA: Wachovia Bank of N.C.................................................. 5,000,000
----------
14,000,000
----------
OHIO--0.5%
1,300,000 Ohio State Public Facilities Commission
Higher Education Capital Facilities, Series II B
4.500%, 11/01/98............................................................ 1,301,790
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1998
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- ---------
<S> <C> <C>
RHODE ISLAND--1.9%
$ 5,000,000 Rhode Island State GO
3.500%, 06/01/18++
SBPA: Landesbank Hessen .................................................. $ 5,000,000
----------
TENNESSEE--2.5%
6,600,000 Memphis Tennessee GO
Series A
3.450%, 08/01/03++
SBPA: Westdeutche Landesbank .............................................. 6,600,000
----------
TEXAS--15.4%
2,750,000 Dallas Area Rapid Transit Authority
Series A
3.600%, 12/09/98
LOC: Westdeutche Landesbank, Bayerische Landsebank GZ,
Union Bank Switzerland ................................................ 2,750,000
1,915,000 Dallas Area Rapid Transit Authority
Series A
3.550%, 12/10/98
LOC: Westdeutche Landesbank, Bayerische Landsebank GZ,
Union Bank Switzerland .................................................. 1,915,000
3,541,000 Dallas Water & Sewer
Series B
3.450%, 12/08/98
LINE: Union Bank Switzerland .............................................. 3,541,000
1,965,000 Gulf Coast IDA
Marine Term Revenue Amoco Oil Company
3.700%, 12/01/98++.......................................................... 1,965,000
1,475,000 Harris County Texas GO ETM
7.125%, 10/01/98............................................................ 1,479,199
3,000,000 Harris County Texas Health Facilities
Methodist Hospital
3.350%, 12/01/25++
SBPA: Morgan Guaranty ...................................................... 3,000,000
5,000,000 Harris County Toll Road
Series H
3.250%, 08/01/20++
SBPA: Morgan Guaranty ...................................................... 5,000,000
2,500,000 Houston GO
Series B
3.450%, 09/21/98
LINE: Morgan Guaranty, Union Bank Switzerland .............................. 2,500,000
3,200,000 Houston GO
Series B
3.500%, 09/28/98
LINE: Morgan Guaranty, Union Bank Switzerland .............................. 3,200,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1998
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- ---------
<S> <C> <C>
TEXAS--(CONTINUED)
$ 1,400,000 Lone Star Texas Airport Improvement Authority
American Airlines, Series A5
3.375%, 12/01/14++
LOC: Royal Bank Of Canada .................................................. $ 1,400,000
1,600,000 Lone Star Texas Airport Improvement Authority
American Airlines, Series B4
3.375%, 12/01/14++
LOC: Royal Bank of Canada .................................................. 1,600,000
4,940,000 Lower Colorado River Authority Texas Revenue
Refunding Junior Lien, MBIA Insured
3.150%, 01/01/13++
SBPA: Bayerische Landesbank GZ ............................................ 4,940,000
1,500,000 Port Arthur Navigation District, PCR
Texaco, Inc..Project
3.350%, 10/01/24++.......................................................... 1,500,000
3,000,000 San Antonio Water Systems
Series GS95
3.550%, 12/15/98
Line: Westdeutsche Landesbank .............................................. 3,000,000
2,800,000 Texas Municipal Power Agency
Series 1991
3.450%, 09/09/98
LIQ: Morgan, Bank of America, Chase ........................................ 2,800,000
1,000,000 Texas State
Public Finance Authority
6.000%, 10/01/98............................................................ 1,001,978
----------
41,592,177
----------
UTAH--10.1%
2,000,000 Intermountain Power Agency
Power Supply Revenue, Series 85E
3.450%, 09/15/98+++
SBPA: Union Bank Switzerland .............................................. 2,000,000
5,000,000 Intermountain Power Agency
Power Supply Revenue, Series 85F
3.450%, 09/15/98+++
SBPA: Union Bank Switzerland .............................................. 5,000,000
1,000,000 Salt Lake County, PCR
British Petroleum Project, Series A
3.350%, 02/01/08++.......................................................... 1,000,000
2,000,000 Salt Lake County, PCR
British Petroleum Project, Series B
3.350%, 08/01/07++.......................................................... 2,000,000
4,000,000 State Of Utah GO
Series 1998B
3.450%, 09/03/98
LINE: Toronto Dominion .................................................... 4,000,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1998
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- ---------
<S> <C> <C>
UTAH--(CONTINUED)
$ 3,000,000 State Of Utah GO
Series 1998B
3.300%, 09/04/98
LINE: Toronto Dominion .................................................. $ 3,000,000
2,500,000 State Of Utah GO
Series 97B
3.750%, 09/30/98
LINE: Toronto Dominion .................................................... 2,500,000
7,600,000 Utah Transit Authority Sales Tax Revenue
Trax Project
3.250%, 05/01/28++
LOC: Bayerische Landesbank GZ .............................................. 7,600,000
----------
27,100,000
----------
WASHINGTON--7.9%
1,635,000 King County Washington
Series G
4.500%, 12/01/98............................................................ 1,638,739
2,250,000 Seattle Municipal Light & Power Revenue
3.550%, 11/01/15++
SBPA: Morgan Guaranty Trust ................................................ 2,250,000
1,600,000 Seattle Municipal Light & Power Revenue
3.220%, 11/01/18++
SBPA: Morgan Guaranty Trust ................................................ 1,600,000
3,400,000 Seattle Water System Revenue
3.220%, 09/01/25++
LOC: Bayerische Landesbank GZ .............................................. 3,400,000
5,100,000 Washington Health Care Facilities
Sisters of Providence, Series B
3.250%, 10/01/05++
SBPA: Rabobank ............................................................ 5,100,000
5,000,000 Washington State GO
Series 96B
3.400%, 06/01/20++
SBPA: Landesbank Hessen-Thueringen GZ ...................................... 5,000,000
2,425,000 Washington State Public Power Supply
3.250%, 07/01/17++
LOC: Bank of America ...................................................... 2,425,000
----------
21,413,739
----------
SEE NOTES TO FINANCIAL STATEMENTS.
13
</TABLE>
<PAGE>
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1998
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 1)
--------- ---------
<S> <C> <C>
WISCONSIN--2.6%
$ 3,000,000 Sheboygan, PCR
Wisconsin Electric Power Company
3.300%, 09/01/15++.......................................................... $3,000,000
4,000,000 Sheboygan, PCR
Wisconsin Power & Light
3.600%, 08/01/14++.......................................................... 4,000,000
------------
7,000,000
------------
TOTAL INVESTMENTS--100.0% (COST $269,477,139)*.............................. $269,477,139
------------
------------
- ---------------------------------------------------------------------------------------------------------
</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 in one year. The
interest rate shown reflects the rate currently in effect.
GLOSSARY OF TERMS
AMBAC = AMBAC Assurance Corp.
ETM = Escrowed to Maturity
FGIC = Financial Guaranty Insurance Corp.
GO = General Obligation
IDA = Industrial Development Authority
LINE = Line of Credit
LIQ = Liquidity Facility
LOC = Letter of Credit
MBIA = MBIA Insurance Corp.
PCR = Pollution Control Revenue
SBPA = Standby Purchase Agreement
TRANS = Tax and Revenue Anticipation Notes
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
THE VALIANT FUND
STATEMENTS OF ASSETS AND LIABILITIES
AUGUST 31, 1998
<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 . . . . . . . . . . . . . $131,047,412 $ -- $268,564,780 $269,477,139
Repurchase agreements. . . . . . . . . . . . . 391,127,000 -- 23,137,000 --
------------- ------------- ------------ ------------
Total investments at value . . . . . . . . . 522,174,412 -- 291,701,780 269,477,139
Cash . . . . . . . . . . . . . . . . . . . . . . 207 25,461 766 5,631
Interest receivable. . . . . . . . . . . . . . . 62,565 -- 3,704 1,344,488
Deferred organization expense (Note 1) . . . . . 3,538 2,402 267 500
------------- ------------- ------------ ------------
Total Assets . . . . . . . . . . . . . . . . 522,240,722 27,86329 1,706,517 270,827,758
------------- ------------- ------------ ------------
LIABILITIES:
Dividends payable. . . . . . . . . . . . . . . . 2,242,883 -- 1,067,261 723,234
Payable for investments purchased. . . . . . . . -- -- -- 1,400,000
Advisory fee payable (Note 2). . . . . . . . . . 90,647 -- 53,333 46,690
Distribution fee payable (Note 2). . . . . . . . 142,201 -- 3,893 --
Accrued expenses . . . . . . . . . . . . . . . . 3,538 2,402 267 500
------------- ------------- ------------ ------------
Total Liabilities. . . . . . . . . . . . . . 2,479,269 2,402 1,124,754 2,170,424
------------- ------------- ------------ ------------
NET ASSETS . . . . . . . . . . . . . . . . . . . . $519,761,453 $ 25,461 $290,581,763 $268,657,334
------------- ------------- ------------ ------------
------------- ------------- ------------ ------------
NET ASSETS CONSIST OF:
Paid-in capital (Note 3) . . . . . . . . . . . . $519,766,386 $ 25,539 $290,830,588 $268,779,401
Undistributed net investment income. . . . . . . 3,224 7 -- --
Accumulated net realized loss on
investments sold . . . . . . . . . . . . . . . (8,157) (85) (248,825) (122,067)
------------- ------------- ------------ ------------
Net Assets . . . . . . . . . . . . . . . . . $519,761,453 $25,461 $290,581,763 $268,657,334
------------- ------------- ------------ ------------
------------- ------------- ------------ ------------
SHARES OF BENEFICIAL INTEREST OUTSTANDING:
Class A. . . . . . . . . . . . . . . . . . . . . 31,186,483 25,539 273,221,404 268,779,401
Class B. . . . . . . . . . . . . . . . . . . . . 326,683,455 -- 17,609,184 --
Class D. . . . . . . . . . . . . . . . . . . . . 161,896,447 -- -- --
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
YEAR ENDED AUGUST 31, 1998
<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). . . . . . . . . . . . . . . . $25,757,156 $904,379 $25,041,401 $9,125,219
------------- ------------- ------------ ------------
EXPENSES:
Investment advisory fee (Note 2) . . . . . . . . 936,822 36,010 897,707 514,182
Distribution fee, Class B (Note 2) . . . . . . . 748,044 -- 40,292 --
Distribution fee, Class D (Note 2) . . . . . . . 671,044 -- -- --
Trustee fees (Note 2). . . . . . . . . . . . . . 6,849 -- 8,937 4,213
Amortization of organization costs (Note 1). . . 5,019 5,019 5,019 5,019
------------- ------------- ------------ ------------
Total expenses before reimbursements
and waivers. . . . . . . . . . . . . . . . . 2,367,778 41,029 951,955 523,414
------------- ------------- ------------ ------------
Expenses borne by the Investment Adviser
(Note 2) . . . . . . . . . . . . . . . . . . (11,868) (5,019) (13,956) (9,232)
------------- ------------- ------------ ------------
Total Net Expenses . . . . . . . . . . . . . . 2,355,910 36,010 937,999 514,182
------------- ------------- ------------ ------------
NET INVESTMENT INCOME. . . . . . . . . . . . . . . 23,401,246 868,369 24,103,402 8,611,037
------------- ------------- ------------ ------------
REALIZED GAIN (LOSS) ON
INVESTMENTS SOLD (NOTE 1). . . . . . . . . . . . (8,157) (78) 10,362 1,596
------------- ------------- ------------ ------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS. . . . . . . . . . . . $23,393,089 $868,291 $24,113,764 $8,612,633
------------- ------------- ------------ ------------
------------- ------------- ------------ ------------
- -----------------------------------------------------------------------------------------------------------------------------
* The Portfolio operated from December 17, 1997 to February 11, 1998.
</TABLE>
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
8/31/98 8/31/97 8/31/98* 8/31/97**
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD. . . . . . . . . $424,900,541 $247,135,913 $ 25,351 $ 25,222
------------- ------------- ------------ ------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income. . . . . . . . . . . . . . 23,401,246 20,236,402 868,369 704,901
Net realized gain (loss) on investments sold . . (8,157) 15,357 (78) (7)
------------- ------------- ------------ ------------
Net increase in net assets
resulting from operations. . . . . . . . . . 23,393,089 20,251,759 868,291 704,894
------------- ------------- ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A. . . . . . . . . . . . . . . . . . . . (1,852,870) (3,174,468) (868,369) (704,901)
Class B. . . . . . . . . . . . . . . . . . . . (15,114,935) (13,171,814) -- --
Class D. . . . . . . . . . . . . . . . . . . . (6,433,441) (3,890,120) -- --
------------- ------------- ------------ ------------
Net decrease from distributions. . . . . . . . . (23,401,246) (20,236,402) (868,369) (704,901)
------------- ------------- ------------ ------------
SHARE TRANSACTIONS (AT $1.00 PER SHARE):
CLASS A:
Net proceeds from sales of shares. . . . . . . 135,312,262 174,614,603 236,425,416 245,972,311
Issued to shareholders in reinvestment
of dividends . . . . . . . . . . . . . . . . 1,471 1,410 188 136
Cost of shares repurchased . . . . . . . . . . (127,190,021) (236,817,140) (236,425,416) (245,972,311)
------------- ------------- ------------ ------------
Net Class A share transactions . . . . . . . 8,123,712 (62,201,127) 188 136
------------- ------------- ------------ ------------
CLASS B:
Net proceeds from sales of shares. . . . . . . 614,132,418 879,378,409 -- --
Cost of shares repurchased . . . . . . . . . . (587,885,626) (705,276,725) -- --
------------- ------------- ------------ ------------
Net Class B share transactions . . . . . . . 26,246,792 174,101,684 -- --
------------- ------------- ------------ ------------
CLASS D:
Net proceeds from sales of shares. . . . . . . 465,646,407 318,106,403 -- --
Cost of shares repurchased . . . . . . . . . . (405,147,842) (252,257,689) -- --
------------- ------------- ------------ ------------
Net Class D share transactions . . . . . . . 60,498,565 65,848,714 -- --
------------- ------------- ------------ ------------
Net increase from share transactions . . . 94,869,069 177,749,271 188 136
------------- ------------- ------------ ------------
Net increase in net assets . . . . . . . 94,860,912 177,764,628 110 129
------------- ------------- ------------ ------------
NET ASSETS AT END OF PERIOD. . . . . . . . . . . . $519,761,453 $424,900,541 $25,461 $25,351
------------- ------------- ------------ ------------
------------- ------------- ------------ ------------
- -----------------------------------------------------------------------------------------------------------------------------
* The Portfolio operated from December 17, 1997 - February 11, 1998.
** The Portfolio operated from December 13, 1996 - January 30, 1997.
</TABLE>
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 YEAR ENDED YEAR ENDED
8/31/98 8/31/97 8/31/98 8/31/97
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD. . . . . . . . . $ 577,870,345 $ 342,803,442 $ 282,368,080 $ 279,867,103
------------- ------------- ------------ ------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income. . . . . . . . . . . . . . 24,103,402 25,960,279 8,611,037 8,920,164
Net realized gain(loss) on investments sold. . . 10,362 15,375 1,596 (10,703)
------------- ------------- ------------ ------------
Net increase in net assets
resulting from operations. . . . . . . . . . 24,113,764 25,975,654 8,612,633 8,909,461
------------- ------------- ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A. . . . . . . . . . . . . . . . . . . . (23,272,185) (25,485,808) (8,611,037) (8,920,164)
Class B. . . . . . . . . . . . . . . . . . . . (831,217) (474,471) -- --
------------- ------------- ------------ ------------
Net decrease from distributions. . . . . . . . . (24,103,402) (25,960,279) (8,611,037) (8,920,164)
------------- ------------- ------------ ------------
SHARE TRANSACTIONS (AT $1.00 PER SHARE):
CLASS A:
Net proceeds from sales of shares. . . . . . . 3,065,147,438 2,791,812,765 643,017,161 573,325,388
Issued to shareholders in reinvestment
of dividends . . . . . . . . . . . . . . . . 5,620,281 2,914,391 1,271 890
Cost of shares repurchased . . . . . . . . . . (3,366,515,045) (2,560,095,823) (656,730,774) (570,814,598)
------------- ------------- ------------ ------------
Net Class A share transactions . . . . . . . (295,747,326) 234,631,333 (13,712,342) 2,511,680
------------- ------------- ------------ ------------
CLASS B:
Net proceeds from sales of shares. . . . . . . 44,499,456 12,777,268 -- --
Cost of shares repurchased . . . . . . . . . . (36,051,074) (12,357,073) -- --
------------- ------------- ------------ ------------
Net Class B share transactions . . . . . . . 8,448,382 420,195 -- --
------------- ------------- ------------ ------------
Net increase (decrease) from share
transactions . . . . . . . . . . . . . . (287,298,944) 235,051,528 (13,712,342) 2,511,680
------------- ------------- ------------ ------------
Net increase (decrease) in net assets. . (287,288,582) 235,066,903 (13,710,746) 2,500,977
------------- ------------- ------------ ------------
NET ASSETS AT END OF PERIOD. . . . . . . . . . . . $290,581,763 $577,870,345 $268,657,334 $282,368,080
------------- ------------- ------------ ------------
------------- ------------- ------------ ------------
</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 YEAR ENDED YEAR ENDED PERIOD ENDED
8/31/98 8/31/97 8/31/96 8/31/95 8/31/94 (1)
---------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of period . . . . $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
---------- ---------- ---------- ---------- ------------
Income from Investment Operations:
Net investment income . . . . . . . . . . 0.053 0.052 0.053 0.054 0.012
---------- ---------- ---------- ---------- ------------
Less Distributions:
Dividends from net investment income. . . (0.053) (0.052) (0.053) (0.054) (0.012)
---------- ---------- ---------- ---------- ------------
Net Asset Value, End of period . . . . . . . $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
---------- ---------- ---------- ---------- ------------
---------- ---------- ---------- ---------- ------------
Total Return (a) . . . . . . . . . . . . . . 5.43% 5.30% 5.45% 5.60% 1.19%
Ratios/Supplemental Data:
Net Assets, End of Period (000's). . . . . . $31,185 $23,063 $85,260 $30,183 $25
Ratios to average net assets:
Net investment income . . . . . . . . . . 5.27% 5.12% 5.21% 5.79% 4.06%(b)
Operating expenses. . . . . . . . . . . . 0.20% 0.20% 0.20% 0.20% 0.20%(b)
Operating expenses before
reimbursements/waivers . . . . . . . . 0.20% 0.20% 0.20% 0.21% 0.26%(b)
</TABLE>
<TABLE>
<CAPTION>
U.S. TREASURY MONEY
MARKET PORTFOLIO - CLASS B
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
8/31/98 8/31/97 8/31/96 8/31/95 8/31/94 (1)
---------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of period . . . . $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
---------- ---------- ---------- ---------- ------------
Income from Investment Operations:
Net investment income . . . . . . . . . . 0.051 0.049 0.050 0.052 0.011
---------- ---------- ---------- ---------- ------------
Less Distributions:
Dividends from net investment income. . . (0.051) (0.049) (0.050) (0.052) (0.011)
---------- ---------- ---------- ---------- ------------
Net Asset Value, End of period . . . . . . . $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
---------- ---------- ---------- ---------- ------------
---------- ---------- ---------- ---------- ------------
Total Return (a) . . . . . . . . . . . . . . 5.17% 5.04% 5.18% 5.34% 1.12%
Ratios/Supplemental Data:
Net Assets, End of Period (000's). . . . . . $326,675 $300,437 $126,327 $76,114 $13,355
Ratios to average net assets:
Net investment income . . . . . . . . . . 5.05% 4.93% 5.01% 5.41% 3.87%(b)
Operating expenses. . . . . . . . . . . . 0.45% 0.45% 0.45% 0.45% 0.45%(b)
Operating expenses before
reimbursements/waivers . . . . . . . . 0.45% 0.45% 0.45% 0.46% 0.50%(b)
- --------------------------------------------------------------------------------------------------------------------------------
(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.
</TABLE>
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 PERIOD ENDED
8/31/98 8/31/97 8/31/96(1)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of period . . . . $ 1.000 $ 1.000 $ 1.000
---------- ---------- ------------
Income from Investment Operations:
Net investment income. . . . . . . . . . 0.048 0.047 0.015
---------- ---------- ------------
Less Distributions:
Dividends from net investment income . . (0.048) (0.047) (0.015)
---------- ---------- ------------
Net Asset Value, End of period . . . . . . . $ 1.000 $ 1.000 $ 1.000
---------- ---------- ------------
---------- ---------- ------------
Total Return (a) . . . . . . . . . . . . . . 4.91% 4.78% 1.55%
Ratios/Supplemental Data:
Net Assets, End of Period (000's). . . . . . $ 161,901 $ 101,401 $ 35,549
Ratios to average net assets:
Net investment income. . . . . . . . . . 4.79% 4.69% 4.68%(b)
Operating expenses . . . . . . . . . . . 0.70% 0.70% 0.70%(b)
Operating expenses before
reimbursements/waivers. . . . . . . . 0.70% 0.70% 0.70%(b)
</TABLE>
<TABLE>
<CAPTION>
U.S. TREASURY
INCOME PORTFOLIO - CLASS A
PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED
8/31/98(2) 8/31/97(3) 8/31/96(4) 8/31/95(5) 8/31/94(6)
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of period . . . . $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------------ ------------ ------------ ------------ ------------
Income from Investment Operations:
Net investment income. . . . . . . . . . 0.007 0.005 0.004 0.004 0.001
------------ ------------ ------------ ------------ ------------
Less Distributions:
Dividends from net investment income . . (0.007) (0.005) (0.004) (0.004) (0.001)
------------ ------------ ------------ ------------ ------------
Net Asset Value, End of period . . . . . . . $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total Return (a) . . . . . . . . . . . . . . 0.74% 0.54% 0.35% 0.39% 0.12%
Ratios/Supplemental Data:
Net Assets, End of Period (000's). . . . . . $ 25 $ 25 $ 25 $ 25 $ 25
Ratios to average net assets:
Net investment income. . . . . . . . . . 4.83% 4.24% 4.15% 4.47% 2.96%(b)
Operating expenses . . . . . . . . . . . 0.20% 0.20% 0.20% 0.20% 0.20%(b)
Operating expenses before
reimbursements/waivers. . . . . . . . 0.23% 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 17, 1997 to February 11, 1998.
(3) The Portfolio operated from December 13, 1996 to January 30, 1997.
(4) The Portfolio operated from December 11, 1995 to January 10, 1996.
(5) The Portfolio operated from December 12, 1994 to January 11, 1995.
(6) 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 YEAR ENDED PERIOD ENDED
8/31/98 8/31/97 8/31/96 8/31/95 8/31/94(1)
----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of period . . . . $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------- ----------- ----------- ----------- -------------
Income from Investment Operations:
Net investment income. . . . . . . . . . 0.054 0.053 0.053 0.056 0.033
----------- ----------- ----------- ----------- -------------
Less Distributions:
Dividends from net investment income . . (0.054) (0.053) (0.053) (0.056) (0.033)
----------- ----------- ----------- ----------- -------------
Net Asset Value, End of period . . . . . . . $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------- ----------- ----------- ----------- -------------
----------- ----------- ----------- ----------- -------------
Total Return (a) . . . . . . . . . . . . . . 5.54% 5.40% 5.52% 5.81% 3.33%
Ratios/Supplemental Data:
Net Assets, End of Period (000's). . . . . . $ 272,980 $ 568,715 $ 334,069 $ 375,965 $ 167,016
Ratios to average net assets:
Net investment income. . . . . . . . . . 5.40% 5.33% 5.36% 5.70% 3.70%(b)
Operating expenses . . . . . . . . . . . 0.20% 0.20% 0.20% 0.20% 0.20%(b)
Operating expenses before
reimbursements/waivers. . . . . . . . 0.20% 0.20% 0.20% 0.20% 0.21%(b)
GENERAL MONEY
MARKET PORTFOLIO - CLASS B
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
8/31/98 8/31/97 8/31/96 8/31/95 8/31/94(1)
----------- ----------- ----------- ----------- -------------
Net Asset Value, Beginning of period . . . . $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------- ----------- ----------- ----------- -------------
Income from Investment Operations:
Net investment income. . . . . . . . . . 0.052 0.050 0.051 0.053 0.009
----------- ----------- ----------- ----------- -------------
Less Distributions:
Dividends from net investment income . . (0.052) (0.050) (0.051) (0.053) (0.009)
----------- ----------- ----------- ----------- -------------
Net Asset Value, End of period . . . . . . . $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------- ----------- ----------- ----------- -------------
----------- ----------- ----------- ----------- -------------
Total Return (a) . . . . . . . . . . . . . . 5.28% 5.14% 5.26% 5.54% 0.92%
Ratios/Supplemental Data:
Net Assets, End of Period (000's). . . . . . $ 17,602 $ 9,155 $ 8,734 $ 9,461 $ 9,520
Ratios to average net assets:
Net investment income. . . . . . . . . . 5.16% 5.02% 5.11% 5.33% 3.99%(b)
Operating expenses . . . . . . . . . . . 0.45% 0.45% 0.45% 0.45% 0.45%(b)
Operating expenses before
reimbursements/waivers. . . . . . . . 0.45% 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 YEAR ENDED PERIOD ENDED
8/31/98 8/31/97 8/31/96 8/31/95 8/31/94 (1)
----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of period . . . . $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------- ----------- ----------- ----------- -------------
Income from Investment Operations:
Net investment income. . . . . . . . . . 0.034 0.034 0.034 0.035 0.021
----------- ----------- ----------- ----------- -------------
Less Distributions:
Dividends from net investment income . . (0.034) (0.034) (0.034) (0.035) (0.021)
----------- ----------- ----------- ----------- -------------
Net Asset Value, End of period . . . . . . . $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------- ----------- ----------- ----------- -------------
----------- ----------- ----------- ----------- -------------
Total Return (a) . . . . . . . . . . . . . . 3.41% 3.42% 3.43% 3.67% 2.11%
Ratios/Supplemental Data:
Net Assets, End of Period (000's). . . . . . $ 268,657 $ 282,368 $ 279,867 $ 283,654 $ 258,130
Ratios to average net assets:
Net investment income. . . . . . . . . . 3.35% 3.38% 3.34% 3.50% 2.38%(b)
Operating expenses . . . . . . . . . . . 0.20% 0.20% 0.20% 0.20% 0.20%(b)
Operating expenses before
reimbursements/waivers. . . . . . . . 0.20% 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, 1998
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 requires 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 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.
Income distributions and capital gain distributions, if any, are determined
in accordance with income tax regulations which may differ from generally
accepted accounting principles. Permanent book and tax differences relating
to shareholder distributions will result in reclassifications in the
Portfolios' capital accounts.
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 period 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, 1998, the U.S. Treasury
Income Portfolio has a capital loss carryover of $7, which will expire on
August 31, 2005. The General Money Market Portfolio and the Tax-Exempt Money
Market Portfolio have capital loss carryovers of $41,251, $30,898, $173,216
and $53,266, $54,799, $1,943, $12,059, respectively, which will expire on
August 31, 2003, 2004, 2005, and 2006, respectively.
23
<PAGE>
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
AUGUST 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
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 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. 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, 1998. 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, 1998
2. INVESTMENT ADVISORY, ADMINISTRATION, DISTRIBUTION AND OTHER FEES -
(CONTINUED)
For the year ended August 31, 1998 the Investment Adviser reimbursed the Trust
as follows:
<TABLE>
<CAPTION>
PORTFOLIO REIMBURSEMENT
<S> <C>
- -------------------------------------------------------
U.S. Treasury Money Market $11,868
U.S. Treasury Income 5,019
General Money Market 13,956
Tax-Exempt Money Market 9,232
</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 first $500 million of the average daily net assets of
each Portfolio 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, 1998. 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, 1998
3. SHARES OF BENEFICIAL INTEREST - (CONTINUED)
At August 31, 1998 Integrity Investments, Inc. owned 100% of the outstanding
shares of the U. S. Treasury Income Portfolio and David L. Babson & Co., Inc.,
an affiliate of the Adviser, owned 8.8% of the outstanding shares of the General
Money Market Portfolio. 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 88.1%
General Money Market 2 83.0%
Tax-Exempt Money Market 1 90.4%
</TABLE>
4. DISTRIBUTIONS (UNAUDITED)
During the fiscal year ended August 31, 1998, 100% of the Tax-Exempt Money
Market Portfolio's distributions paid to the shareholders were tax-exempt.
26
<PAGE>
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
AUGUST 31, 1998
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, 1998, 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, 1998 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 5, 1998
27
