<PAGE> 1
THE VALIANT FUND
ANNUAL REPORT
August 31, 1999
<PAGE> 2
VALIANT U.S. TREASURY MONEY MARKET
Schedule of Investments
August 31, 1999
<TABLE>
<CAPTION>
PAR SECURITY VALUE
VALUE DESCRIPTION (NOTE 1)
----- ----------- --------
U.S. TREASURY BILLS (a) (32.5%):
<S> <C> <C>
$10,000,000 4.46%, 10/14/99 $9,948,579
25,000,000 4.59%, 10/21/99 24,846,354
20,000,000 4.76%, 12/30/99 19,693,000
5,000,000 4.82%, 1/13/00 4,913,458
5,000,000 4.84%, 1/20/00 4,908,546
10,000,000 5.06%, 1/27/00 9,799,653
25,000,000 4.66%, 3/2/00 24,430,413
-----------
TOTAL U.S. TREASURY BILLS (COST $98,540,003) 98,540,003
-----------
REPURCHASE AGREEMENTS (67.5%):
61,000,000 First Boston Corp., 5.38%, 9/1/99 61,000,000
Repurchase Price $61,009,116, (Collateralized by U.S.
Treasury Bond, 11.25%, due 2/15/15; par value $42,435,000;
valued at $62,852,232)
10,722,000 Goldman, Sachs & Co., Inc., 5.32%, 9/1/99 10,722,000
Repurchase Price $10,723,584, (Collateralized by U.S.
Treasury Bond, 8.125%, due 8/15/21; par value $9,145,000;
valued at $10,937,574)
69,000,000 J.P. Morgan & Co., Inc., 5.40%, 9/1/99 69,000,000
Repurchase Price $69,010,350, (Collateralized by U.S.
Treasury Notes & Bonds, 6.25%, 6.375%, & 11.125%, due
2/15/03, 3/31/01, 8/15/03; par value $766,000, $44,089,000,
& $20,266,000; valued at $775,714, $44,691,176 & $23,913,170,
respectively)
64,000,000 Morgan Stanley Group, Inc., 5.40%, 9/1/99 64,000,000
Repurchase Price $64,009,600 (Collateralized by U.S. -----------
Treasury Notes, 6.50%, due 8/15/05; par value $64,130,000;
valued at $65,581,022)
TOTAL REPURCHASE AGREEMENTS (COST $204,722,000) 204,722,000
-----------
TOTAL INVESTMENTS (COST $303,262,003) (b) - 100% $303,262,003
===========
</TABLE>
- ------------
(a) Rate represents annualized yield to maturity at date of purchase.
(b) Cost and value for federal income tax and financial reporting purposes
are the same.
See notes to financial statements.
1
<PAGE> 3
VALIANT GENERAL MONEY MARKET
Schedule of Investments
August 31, 1999
<TABLE>
<CAPTION>
PAR SECURITY VALUE
VALUE DESCRIPTION (NOTE 1)
----- ----------- --------
<S> <C> <C> <C>
COMMERCIAL PAPER (a) (87.2%):
Chemicals (4.9%):
$10,000,000 Du Pont (E.I.) De Nemours & Co. $9,973,664
5.13%, 9/20/99
4,183,000 The Lubrizol Corp. 4,149,745
5.42%, 10/25/99
14,123,409
----------
Consumer Goods & Services (5.2%):
15,015,000 Nike, Inc. 14,973,791
5.30%, 9/20/99 ----------
Drugs & Health Care (12.2%):
15,000,000 Abbott Laboratories 14,971,996
5.26%, 9/14/99
10,000,000 Merck & Co., Inc. 9,770,333
5.52%, 2/4/00
10,492,000 Proctor & Gamble Co. 10,429,506
5.34%, 10/12/99 ----------
35,171,835
----------
Electrical Equipment (4.0%):
11,390,000 W.W. Grainger, Inc. 11,380,167
5.27%, 9/7/99 ----------
Electronics (3.4%):
10,000,000 Emerson Electronics Co. 9,760,028
5.53%, 2/11/00 ----------
Financial Services (18.2%):
Caterpillar Financial Services
10,820,000 5.28%, 9/20/99 10,790,419
7,000,000 5.36%, 10/7/99 6,963,250
Ford Motor Credit Co.
5,000,000 4.93%, 9/30/99 4,980,868
3,000,000 4.86%, 10/12/99 2,984,078
9,000,000 5.13%, 10/20/99 8,939,158
General Motors Acceptance Corp.
6,000,000 4.90%, 9/1/99 6,000,000
6,000,000 4.85%, 10/6/99 5,972,875
6,000,000 4.85%, 10/18/99 5,963,575
----------
52,594,223
----------
Food Products (8.6%):
Coca Cola Co.
10,000,000 5.27%, 9/22/99 9,969,841
6,000,000 5.50%, 2/2/00 5,864,480
General Mills, Inc.
5,000,000 5.24%, 9/17/99 4,988,556
4,000,000 5.52%, 1/31/00 3,910,489
----------
24,733,366
----------
Industrial Goods & Services (5.2%):
15,000,000 PPG Industries, Inc. 14,965,000
5.34%, 9/17/99 ==========
</TABLE>
See notes to financial statements.
2
<PAGE> 4
VALIANT GENERAL MONEY MARKET
Schedule of Investments
August 31, 1999
<TABLE>
<CAPTION>
PAR SECURITY VALUE
VALUE DESCRIPTION (NOTE 1)
----- ----------- --------
<S> <C> <C> <C>
Insurance (5.2%):
$5,000,000 AIG Funding, Inc. $4,988,756
5.18%, 9/17/99
Associates Corp. of North America
4,000,000 5.40%, 10/27/99 3,967,209
6,000,000 4.94%, 12/1/99 5,927,958
----------
14,883,923
----------
Non-Bank Finance (15.1%):
General Electric Capital Corp.
5,000,000 4.88%, 10/12/99 4,973,350
9,000,000 5.45%, 11/8/99 8,909,731
4,000,000 4.92%, 11/22/99 3,956,904
4,000,000 4.94%, 12/1/99 3,951,972
----------
I.B.M Credit Corp.
8,000,000 5.30%, 9/21/99 $7,976,889
4,000,000 5.41%, 12/15/99 3,938,867
10,000,000 5.76%, 2/4/00 9,760,800
----------
43,468,513
----------
Publishing (3.1%):
McGraw-Hill Co., Inc.
5,000,000 5.26%, 10/21/99 4,964,445
4,000,000 5.26%, 10/26/99 3,968,711
----------
8,933,156
----------
Telecommunications (2.1%):
6,000,000 Lucent Technologies, Inc. 5,988,690
5.31%, 9/14/99 ----------
TOTAL COMMERCIAL PAPER (COST $250,976,101) 250,976,101
-----------
U.S. GOVERNMENT AGENCY MORTGAGES (3.4%):
Federal Home Loan Mortgage Corp. (3.4%):
5,000,000 4.70%, 10/8/99 4,975,847
5,000,000 5.22%, 3/31/00 4,846,300
----------
TOTAL U.S. GOVERNMENT AGENCY MORTGAGES (COST $9,822,147) 9,822,147
----------
REPURCHASE AGREEMENTS (9.4%):
10,000,000 First Boston Corp., 5.38%, 9/1/99 10,000,000
Repurchase Price $10,001,494, (Collateralized by U.S.
Treasury Bond, 10.375%, due 11/15/12; par value 8,001,000;
valued at $10,277,351)
7,132,000 J.P. Morgan & Co., Inc., 5.40%, 9/1/99 7,132,000
Repurchase Price $7,133,070, (Collateralized by U.S.
Treasury Bond, 5.50%, due 5/31/03; par value $7,275,000;
valued at $7,275,401)
10,000,000 Morgan Stanley Group, Inc., 5.40%, 9/1/99 10,000,000
Repurchase Price $10,001,500, (Collateralized by U.S. ----------
Treasury Bill 0.00%, due 2/3/00; par value $10,450,000;
valued at $10,227,655)
TOTAL REPURCHASE AGREEMENTS (COST $27,132,000) 27,132,000
----------
TOTAL INVESTMENTS (COST $287,930,248) (b) - 100% $287,930,248
===========
</TABLE>
See notes to financial statements.
3
<PAGE> 5
VALIANT GENERAL MONEY MARKET
Schedule of Investments
August 31, 1999
<TABLE>
<CAPTION>
PAR SECURITY VALUE
VALUE DESCRIPTION (NOTE 1)
----- ----------- --------
<S> <C> <C> <C>
</TABLE>
- ------------
(a) Rate represents annualized yield to maturity at date of purchase.
(b) Cost and value for federal income tax and financial reporting purposes
are the same.
See notes to financial statements.
4
<PAGE> 6
VALIANT TAX-EXEMPT MONEY MARKET
Schedule of Investments
August 31, 1999
<TABLE>
<CAPTION>
PAR SECURITY VALUE
VALUE DESCRIPTION (NOTE 1)
----- ----------- --------
<S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES (100.0%):
Alaska (2.0%):
$6,000,000 Alaska State Housing Finance Corporation, Series C, 3.30%, $6,000,000
6/1/26*, SBPA: UBS ---------
California (1.7%):
5,000,000 Los Angeles County, TRANS, Series A, 4.00%, 6/30/00 5,027,228
---------
Colorado (4.1%):
7,750,000 Colorado Health Facilities, Catholic Health Initiative, Series 7,749,999
B, 3.30%, 12/1/25*, SBPA: Toronto Dominion Bank
1,140,000 Colorado Health Facilities, Catholic Health Initiative, Series 1,143,480
A, 4.25%, 12/1/99
3,465,000 Denver City & County, Colorado General Obligation, 7.00%, 3,475,988
10/01/99 ---------
12,369,467
----------
Connecticut (2.5%):
5,500,000 Connecticut State Health & Educational Facilities Authority, 5,500,000
Yale University, Series T-1, 3.15%, 7/1/29*
2,000,000 Connecticut State Special Assessment, Unemployment 2,000,000
Compensation, Series C, 3.38%, 11/15/01, Put 7/1/00 ---------
7,500,000
---------
Florida (7.8%):
8,600,000 Dade County, Florida Power & Light, 2.95%, 6/1/21* 8,600,000
9,600,000 Dade County Water & Sewer Revenue Systems, FGIC Insured, 3.20%, 9,600,000
10/5/22*, SBPA: Commerzbank AG
1,232,000 Jacksonville Electric Authority, 3.25%, 9/13/99, SBPA: Morgan Guaranty 1,232,000
4,000,000 Sunshine State Government Finance Comm. 86, AMBAC Insured, 3.35%, 4,000,000
11/10/99, SBPA: UBS/ Toronto Dominion ---------
23,432,000
----------
Georgia (4.7%):
3,000,000 Burke County Georgia, PCR, Oglethorpe Power Corp., 3,000,000
Series 93A, FGIC Insured, 3.20%, 1/1/16*,
SBPA: Credit Locale de France
1,200,000 Burke County Georgia, Georgia Power Corp., Series 97, 2.85%, 4/1/32* 1,200,000
4,000,000 Burke County Georgia, Ogelthorpe Power Corp., AMBAC Insured, 4,000,000
3.35%, 11/16/99, SBPA: Rabo bank
5,000,000 De Kalb Private Hospital Authority, Egleston Children's 5,000,000
Hospital, Series A, 3.25%, 3/1/24*, LOC: Suntrust
1,000,000 Fulton County Georgia School District, 5.80%, 5/01/00 1,015,531
---------
14,215,531
Illinois (4.5%): ----------
2,500,000 Chicago Illinois, GO, Mandatory Put 12/28/99, 2.85%, 2,500,000
1/31/00**, LOC: Morgan Guaranty Trust
1,000,000 Chicago Metropolitan Water, 4.15%, 12/1/99 1,003,057
2,100,000 Illinois Health, 3.30%, 9/10/99, Rush-Presbyterian, LOC: Northern 2,100,000
Trust Co.
2,300,000 Illinois Health Facilities, 3.30%, 9/10/99, Rush-Presbyterian, 2,300,000
LOC: Northern Trust Co.
3,600,000 Illinois Health Facilities Authority, St. Lukes Medical Center 3,600,000
Obligations, Series B, MBIA Insured, 3.25%, 11/15/23*,
SBPA: Bank One
</TABLE>
See Notes to Financial Statements
5
<PAGE> 7
VALIANT TAX-EXEMPT MONEY MARKET
Schedule of Investments
August 31, 1999
<TABLE>
<CAPTION>
PAR SECURITY VALUE
VALUE DESCRIPTION (NOTE 1)
----- ----------- --------
<S> <C> <C> <C>
$2,000,000 Illinois Health Facilities Authority, 3.35%, 8/15/22*, $2,000,000
SBPA: FNB Chicago, Northern Trust Co., Bank of America ---------
13,503,057
----------
Indiana (3.4%):
1,000,000 Hammond Indiana PCR Amoco Oil 1,000,000
Co. Project, 2.95%, 2/1/22*,
3,000,000 Mt. Vernon Indiana, PCR, General Electric 89A, 3.30%, 3,000,000
9/2/99
3,000,000 Mt. Vernon Indiana, PCR, General Electric 89A, 3.35%, 3,000,000
9/3/99
3,200,000 St. Joseph County Indiana Educational Facilities, University 3,200,000
of Notre Dame, 3.20%, 3/1/33*, LIQ: Bank of America ---------
10,200,000
----------
Kentucky (1.0%):
3,000,000 Kentucky Asset Liability, TRANS, 4.25%, 6/28/00 3,020,871
---------
Louisiana (1.3%):
4,000,000 Louisiana PFA, Christus Health, AMBAC Insured, 3.35%, 4,000,000
10/07/99, SBPA: Bank One ---------
Massachusetts (2.8%):
3,000,000 Massachusetts State Health & Educational Facilities, 3,000,000
Harvard University, 3.20%, 9/3/99
5,300,000 Massachusetts, GO, 3.20%, 9/1/16*, SBPA: Toronto Dominion 5,300,000
---------
8,300,000
---------
Michigan (5.8%):
5,000,000 Detroit Michigan Sewer Disposal, MBIA Insured, Series A, 5,000,000
3.25%, 7/1/23*, SBPA: Morgan Guaranty
1,000,000 Michigan Municipal Bond Authority, Series 1999, B-1, 4.25%, 1,006,147
8/25/00
2,900,000 Michigan State Building Authority, 3.30%, 9/16/99, 2,900,000
LOC: Canadian Imperial Bank of Commerce
2,500,000 Michigan State Housing Development Authority, Series B, 2,500,000
3.20%, 4/1/19*, LOC: Landesbank Hessen-Thueringen GZ
6,100,000 Michigan State University, Revenue, Series A2, 3.20%, 6,100,000
8/15/22* ---------
17,506,147
----------
Minnesota (3.2%):
1,000,000 Rochester Health Facilities, Mayo Foundation/Mayo Medical 1,000,000
Center, Series B, 3.25%, 12/09/99
2,100,000 Rochester Health Facilities, Mayo Clinic, 3.20%, 12/8/99 2,100,000
3,600,000 Rochester Health Facilities, Mayo Foundation/Mayo Clinic, 3,600,000
Series 92C, 3.45%, 11/17/99
3,000,000 Rochester Health Facilities, Mayo Foundation, 3.30%, 11/15/99 3,000,000
---------
9,700,000
---------
Mississippi (1.5%):
4,500,000 Jackson County Port Facility, Chevron USA Project, 4,500,000
2.95%, 6/1/23* ---------
Nevada (3.0%):
4,800,000 Clark County Airport Improvement Authority Revenue, MBIA 4,800,000
Insured, Series A, 3.20%, 7/1/12*, SBPA: National Westminster,
Credit Locale de France and Chase
4,200,000 Clark County Airport Improvement Authority Revenue, Sub 4,200,000
---------
Lien Series A, 3.20%, 7/1/25*, LOC: Westdeutsche Landesbank
9,000,000
---------
</TABLE>
See Notes to Financial Statements
6
<PAGE> 8
VALIANT TAX-EXEMPT MONEY MARKET
Schedule of Investments
August 31, 1999
<TABLE>
<CAPTION>
PAR SECURITY VALUE
VALUE DESCRIPTION (NOTE 1)
----- ----------- --------
<S> <C> <C> <C>
New Hampshire (1.0%):
$2,900,000 New Hampshire GO, Capital Improvements, Series A, 4.00%, $2,901,852
10/1/99 ---------
New Mexico (2.3%):
3,300,000 Albuquerque New Mexico Airport Revenue, Sub Lien, AMBAC 3,300,000
Insured 3.20%, 7/1/14*, SBPA: Bayerische Vereinsbank
1,000,000 Farmington New Mexico, PCR, Arizona Public Service Co., 1,000,000
2.70%, 5/1/24*, LOC: UBS
2,500,000 New Mexico State TRANS, 4.00%, 6/30/00 2,515,420
---------
6,815,420
---------
New York (6.4%):
5,000,000 New York City Municipal Water Finance Authority, Series C, 5,000,000
FGIC Insured, 2.80%, 6/15/23*, SBPA: FGIC SPI
1,300,000 New York City Municipal Water Finance Authority, FGIC 1,300,000
Insured, Series G, 2.70%, 6/15/24*, SBPA: FGIC SPI
4,000,000 New York Power Authority, 3.40%, 12/7/99, SBPA: Bank of Nova Scotia,
Credit Locale de France, Morgan Guaranty, Commerzbank 4,000,000
3,650,000 New York State Dorm Authority, 7.25%, 5/15/00, ETM 3,813,874
3,000,000 New York State Thruway Authority, FGIC Insured, 2.95%, 1/1/24*, 3,000,000
SBPA: FGICSPI
2,000,000 Port Authority NY/NJ, 2.60%, 5/1/19, SBPA: Morgan Guaranty 2,000,000
---------
19,113,874
----------
North Carolina (5.9%):
3,895,000 Charlotte Airport Revenue, MBIA Insured, Series A, 3.20%, 7/1/16*, 3,895,000
SBPA: Commerzbank AG
4,000,000 Raleigh Durham Airport Authority, American Airlines, 3.00%, 11/1/15*, 4,000,000
LOC: Bank of America
4,900,000 Raleigh Durham North Carolina Airport Authority, American Airlines, 4,900,000
Series A, 3.00%, 11/1/15*, LOC: Bank of America
5,000,000 Winston-Salem Water & Sewer System, 3.25%, 6/1/14*, 5,000,000
SBPA: Wachovia Bank of NC ---------
17,795,000
----------
Ohio (1.0%):
3,000,000 Ohio State University, 3.25%, 10/18/99 3,000,000
---------
Pennsylvania (1.3%):
4,000,000 Philadelphia Water & Wastewater Revenue, AMBAC, Series 4,000,000
B, 3.20%, 8/1/27*, SBPA: Commerzbank AG ---------
Rhode Island (1.7%):
5,000,000 Rhode Island State GO, 3.30%, 6/1/18*, SBPA: Landesbank 5,000,000
Hessen ---------
South Carolina (1.6%):
3,900,000 Piedmont Municipal Power Agency, South Carolina Electric 3,900,000
Revenue, Series B, MBIA Insured, 3.30%, 1/1/19*, SBPA: Credit Suisse
1,000,000 South Carolina, GO, 5.50%, 4/01/00 1,013,032
---------
4,913,032
---------
Tennessee (1.7%):
4,000,000 Memphis Tennessee GO, Series A, 3.35%, 8/1/03*, 4,000,000
SBPA:Westdeutsche Landesbank
1,000,000 Shelby County Tennessee, GO, Series B, 5.10%, 3/1/00 1,008,964
---------
5,008,964
---------
Texas (14.9%):
1,993,000 Austin Texas, 3.40%, 9/09/99, LOC: Morgan Guaranty 1,993,000
</TABLE>
See Notes to Financial Statements
7
<PAGE> 9
VALIANT TAX-EXEMPT MONEY MARKET
Schedule of Investments
August 31, 1999
<TABLE>
<CAPTION>
PAR SECURITY VALUE
VALUE DESCRIPTION (NOTE 1)
----- ----------- --------
<S> <C> <C> <C>
$3,000,000 Dallas Area Rapid Transit, Sales Tax 98B, 3.10%, 9/7/99, $3,000,000
LOC: Westdeutsche Landesbank, Bayerisch Landesbank
1,700,000 Gulf Coast Texas Baytown Chemical, Exxon, 2.95%, 6/1/20* 1,700,000
1,000,000 Harris County Texas, 3.25%, 10/13/99, LOC: Union Bank of 1,000,000
Switzerland
1,000,000 Harris County Texas Toll Road, Series G, 3.15%, 8/1/20*, 1,000,000
LOC: Morgan Guaranty
2,247,000 Harris County Texas, Seria A, 3.35%, 11/8/99, 2,247,000
LOC: Union Bank of Switzerland
5,000,000 Harris County Toll Road, Series H, 3.15%, 8/1/20*, 5,000,000
SBPA: Morgan Guaranty Trust
3,500,000 Houston Texas, 3.30%, 12/9/99, 3,500,000
LOC: Westdeutche Landesbank/Bayerische Landesbank
5,940,000 Lower Colorado River Authority Texas Revenue, Refunding 5,940,000
Junior Lien, MBIA Insured, 3.20%, 1/1/13*,
SBPA: Bayerische Vereinsbank
3,000,000 Port Authur Navigation District, Texaco, 3.00%, 10/1/24* 3,000,000
3,000,000 San Antonio Texas, 3.35%, 10/7/99, LINE: Westdeutche 3,000,000
Landesbank
2,500,000 San Antonio Texas Water System, Series 92, 3.10%, 9/7/99 2,500,000
LINE: Westdeutche Landesbank
2,900,000 San Antonio Texas Water System, Series 95, 3.40%, 2,900,000
10/15/99, LINE: Westdeutche Landesbank
2,000,000 Southwest Higher Education Authority, 3.00%, 7/1/15*, 2,000,000
LOC: Landesbank Hessen
1,600,000 Texas Public Finance Authority, 3.20%, 9/17/99, 1,600,000
4,800,000 Texas Tax & Revenue Anticipation Notes, 4.50%, 8/31/00 4,838,190
---------
45,218,190
----------
Utah (5.3%):
2,000,000 Intermountain Power Agency, 3.25%, 9/8/99, 2,000,000
LOC: Bank of America
3,000,000 Intermountain Power Agency Utah, Series 98B-5, 3.15%, 3,000,000
9/7/99, LOC: Morgan Guaranty
1,800,000 Intermountain Power Agency, Utah Power Supply, Series E, 1,800,000
AMBAC Insured, 3.13%, 9/15/99**,
SBPA: Landesbank Hessen
2,000,000 Intermountain Power Authority, Series F, 3.10%, 9/15/99**, 2,000,000
2,000,000 Utah State GO, 3.20%, 7/1/16*, SBPA: Toronto Dominion 2,000,000
5,000,000 Utah Transit Authority Sales Tax Revenue, Trax Project, 5,000,000
3.25%, 5/1/28*, LOC: Bayerische Landesbank ---------
15,800,000
----------
Vermont (0.3%):
1,000,000 Vermont Muni Bond Bank, AMBAC Insured, 5.00%, 12/1/99 1,005,144
---------
Washington (4.3%):
1,500,000 King County Washington School District No. 414, 1,516,722
Pre-Refunded 12/1/99, 7.50%, 12/1/03
4,000,000 Washington State GO, Series 96B, 3.25%, 6/1/20*, 4,000,000
SBPA: Landesbank Hessen-Thueringen GZ
1,500,000 Washington State Health Care, Sisters of Providence, Series D, 1,500,000
2.70%, 10/1/05*, LOC: Rabobank
1,000,000 Washington State Public Power Supply, 5.00%, 7/1/00 1,011,156
</TABLE>
See Notes to Financial Statements
8
<PAGE> 10
VALIANT TAX-EXEMPT MONEY MARKET
Schedule of Investments
August 31, 1999
<TABLE>
<CAPTION>
PAR SECURITY VALUE
VALUE DESCRIPTION (NOTE 1)
----- ----------- --------
<S> <C> <C> <C>
$2,000,000 Washington State Public Power Supply System, Project No $2,000,000
2, 3.20%, 7/1/12*, MBIA Insured, LOC: Credit Suisse
2,900,000 Washington State Public Power Supply Systems, Nuclear 2,900,000
Project No. 1, 3.25%, 7/1/17*, LOC: Bank Of America ---------
12,927,878
----------
Wisconsin (3.0%):
4,900,000 Sheboygan, PCR, Wisconsin Power & Light Company, 4,900,000
3.25%, 8/1/14*
3,000,000 Sheboygan, PCR, Wisconsin Electric Power Company, 3,000,000
3.30%, 9/1/15*
1,000,000 Wisconsin State, GO, 6.00%, 5/01/00 1,027,595
---------
8,927,595
---------
TOTAL INVESTMENTS (COST $300,701,250) (a) - 100.0% $300,701,250
===========
</TABLE>
- ------------
(a) Cost and value for federal income tax and financial reporting purposes
are the same.
* 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.
FGIC = Financial Guaranty Insurance Corp.
GO = General Obligation
LINE = Line of credit
LIQ = Liquidity Facility
LOC = Letter of Credit
MBIA = MBIA Insurance Corp.
PCR = Pollution Control Revenue
SBPA = Standby Purchase Agreement
SPI = Securities Purchase, Inc.
TRANS = Tax and Revenue Anticipation Notes
See Notes to Financial Statements
9
<PAGE> 11
THE VALIANT FUND
STATEMENTS OF ASSETS AND LIABILITIES
AUGUST 31, 1999
<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 (cost $98,540,003; $0; $260,798,248;
$300,701,250, respectively) $ 98,540,003 $ --- $ 260,798,248 $ 300,701,250
Repurchase agreements (Cost $204,722,000; $0;
$27,132,000; $0, respectively) 204,722,000 --- 27,132,000 ---
------------- ---------- ---------------- ---------------
Total investments at value 303,262,003 --- 287,930,248 300,701,250
Cash 817 976 412 184,421
Interest receivable 30,651 --- 4,064 1,305,471
Deferred organization expense (Note 1) --- --- --- ---
------------- ---------- ---------------- ---------------
Total Assets $303,293,471 $ 976 $ 287,934,724 $ 302,191,142
------------- ---------- ---------------- ---------------
LIABILITIES:
Dividends payable 1,122,089 --- 1,328,197 762,598
Payable for investments purchased 4,899,142 --- --- 13,038,190
Advisory fee payable (Note 2) 47,309 362 50,445 47,702
Distribution fee payable (Note 2) 112,718 --- 19,286 ---
------------- ---------- ---------------- ---------------
Total Liabilities 6,181,258 362 1,397,928 13,848,490
------------- ---------- ---------------- ---------------
NET ASSETS $297,112,213 $ 614 $ 286,536,796 $ 288,342,652
============= ========== ================ ===============
NET ASSETS CONSIST OF:
Paid-in capital (Note 4) 297,373,986 615 286,803,498 288,463,747
Undistributed net investment income 51,967 84 --- ---
Accumulated net realized gain/(loss) on investments sold (313,740) (85) (266,702) (121,095)
------------- ---------- ---------------- ---------------
Net Assets $297,112,213 $ 614 $ 286,536,796 $ 288,342,652
============= ========== ================ ===============
SHARES OF BENEFICIAL INTEREST OUTSTANDING:
Class A 15,103,045 615 255,065,595 288,463,747
Class B 64,373,719 --- 1,575,791 ---
Class D 204,811,036 --- --- ---
Class E 13,086,185 --- 30,162,112 ---
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.
10
<PAGE> 12
THE VALIANT FUND
Statements of Operations
Year ended August 31, 1999
<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) $ 23,208,317 $ 389,146 $ 16,640,373 $ 7,965,263
----------------- ---------------- ---------------- ------------
EXPENSES:
Investment advisory fee (Note 2) 953,866 19,801 651,335 504,269
Distribution fee, Class B (Note 2) 651,725 --- 33,632 ---
Distribution fee, Class D (Note 2) 937,748 --- --- ---
Distribution fee, Class E (Note 2) 24,184 --- 69,530 ---
Trustee fees (Note 2) 8,811 31 5,546 3,894
Amortization of organization costs (Note 1) 3,538 2,403 267 500
----------------- ---------------- ---------------- ------------
Total expenses before reimbursements and waivers 2,579,872 22,235 760,310 508,663
----------------- ---------------- ---------------- ------------
Expenses borne by Investment Adviser (Note 2) (12,349) (1,866) (5,813) (4,394)
----------------- ---------------- ---------------- ------------
Total Net Expenses 2,567,523 20,369 754,497 504,269
----------------- ---------------- ---------------- ------------
NET INVESTMENT INCOME 20,640,794 368,777 15,885,876 7,460,994
----------------- ---------------- ---------------- ------------
REALIZED GAIN (LOSS) ON
INVESTMENTS SOLD (NOTE 1) (256,840) --- (17,877) 972
----------------- ---------------- ---------------- ------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 20,383,954 $ 368,777 $ 15,867,999 $ 7,461,966
================= ================ ================ ============
</TABLE>
- --------------------------------------------------------------------------------
* The Portfolio operated from December 14, 1998 to January 22, 1999.
See notes to financial statements.
11
<PAGE> 13
THE VALIANT FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
U.S. TREASURY U.S. TREASURY
MONEY MARKET PORTFOLIO INCOME PORTFOLIO
YEAR ENDED PERIOD ENDED
--------------------------------------------------------------------------
8/31/99 8/31/98 8/31/99* 8/31/98**
-------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD $ 519,761,453 $424,900,541 $ 25,461 $ 25,351
-------------- ------------ ------------ -------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income 20,640,794 23,401,246 368,777 868,369
Net realized gain (loss) on investments sold (256,840) (8,157) --- (78)
-------------- ------------ ------------ -------------
Net increase in net assets
resulting from operations 20,383,954 23,393,089 368,777 868,291
--------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (1,204,030) (1,852,870) (368,700) (868,369)
Class B (11,523,371) (15,114,935) --- ---
Class D (7,798,165) (6,433,441) --- ---
Class E (115,228) --- --- ---
--------------- ------------- ------------- -------------
Net decrease from distributions (20,640,794) (23,401,246) (368,700) (868,369)
--------------- ------------- ------------- -------------
SHARE TRANSACTIONS (AT $1.00 PER SHARE):
CLASS A:
Net proceeds from sale of shares 53,480,150 135,312,262 121,187,913 236,425,416
Issued to shareholders in reinvestment of
dividends 415 1,471 77 188
Cost of shares redeemed (69,564,003) (127,190,021) (121,212,914) (236,425,416)
--------------- ------------- ------------- -------------
Net Class A share transactions (16,083,438) 8,123,712 (24,924) 188
CLASS B:
Net proceeds from sale of shares 1,018,981,987 614,132,418 --- ---
Cost of shares redeemed (1,281,291,723) (587,885,626) --- ---
--------------- ------------- ------------- -------------
Net Class B share transactions (262,309,736) 26,246,792 --- ---
CLASS D:
Net proceeds from sale of shares 1,106,797,543 465,646,407 --- ---
Cost of shares redeemed (1,063,882,954) (405,147,842) --- ---
--------------- ------------- ------------- -------------
Net Class D share transactions 42,914,589 60,498,565 --- ---
CLASS E:
Net proceeds from sale of shares 19,605,953 --- --- ---
Issued to shareholders in reinvestment of
dividends 12 --- --- ---
Cost of shares redeemed (6,519,780) --- --- ---
--------------- ------------- ------------- -------------
Net Class E share transactions 13,086,185 --- --- ---
Net increase from share transactions (222,392,400) 94,869,069 (24,924) 188
--------------- ------------- ------------- -------------
Net increase in net assets (222,649,240) 94,860,912 (24,847) 110
--------------- ------------- ------------- -------------
NET ASSETS AT END OF PERIOD $ 297,112,213 $ 519,761,453 $ 614 $ 25,461
=============== ============= ============= =============
</TABLE>
- -------------------------------------------------------------------------------
* The Portfolio operated from December 14, 1998 to January 22, 1999.
** The Portfolio operated from December 17, 1997 to February 11, 1998.
See notes to financial statements.
12
<PAGE> 14
THE VALIANT FUND
STATEMENTS OF CHANGES IN NET ASSETS - (CONTINUED)
<TABLE>
<CAPTION>
GENERAL MONEY TAX-EXEMPT MONEY
Market Portfolio Market Portfolio
YEAR ENDED YEAR ENDED
------------------------------------------------------------------------
8/31/99 8/31/98 8/31/99 8/31/98
-------------- ---------------- ------------------ ----------------
<S> <C> <C> <C> <C>
NET ASSETS at beginning of period $ 290,581,763 $ 577,870,345 $ 268,657,334 $ 282,368,080
--------------- ---------------- ------------------ ----------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income 15,885,876 24,103,402 7,460,994 8,611,037
Net realized gain (loss) on investments sold (17,877) 10,362 972 1,596
-------------- ---------------- ------------------ ----------------
Net increase in net assets
resulting from operations 15,867,999 24,113,764 7,461,966 8,612,633
-------------- ---------------- ------------------ ----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (14,903,734) (23,272,185) (7,460,994) (8,611,037)
Class B (634,426) (831,217) --- ---
Class E (347,716) --- --- ---
-------------- ---------------- ------------------ ----------------
Net decrease from distributions (15,885,876) (24,103,402) (7,460,994) (8,611,037)
-------------- ---------------- ------------------ ----------------
SHARE TRANSACTIONS (AT $1.00 PER SHARE):
CLASS A:
Net proceeds from sale of shares 3,044,081,955 3,065,147,438 1,122,783,416 643,017,161
Issued to shareholders in reinvestment of
dividends 2,607,904 5,620,281 161 1,271
Cost of shares redeemed 3,064,845,668) (3,366,515,045) (1,103,099,231) (656,730,774)
-------------- ---------------- ------------------------------------
Net Class A share transactions (18,155,809) (295,747,326) 19,684,346 (13,712,342)
CLASS B:
Net proceeds from sale of shares 37,761,032 44,499,456 --- ---
Cost of shares redeemed (53,794,425) (36,051,074) --- ---
-------------- ---------------- ------------------------------------
Net Class B share transactions (16,033,393) 8,448,382 --- ---
CLASS E:
Net proceeds from sale of shares 37,384,570 --- --- ---
Issued to shareholders in reinvestment of
dividends 10 --- --- ---
Cost of shares redeemed (7,222,468) --- --- ---
-------------- ---------------- ------------------------------------
Net Class E share transactions 30,162,112 --- --- ---
Net increase from share transactions (4,027,090) (287,298,944) 19,684,346 (13,712,342)
-------------- ---------------- ------------------ ----------------
Net increase in net assets (4,044,967) (287,288,582) 19,685,318 (13,710,746)
-------------- ---------------- ------------------ ----------------
NET ASSETS AT END OF PERIOD $ 286,536,796 $ 290,581,763 $ 288,342,652 $ 268,657,334
============== ================ ================== ================
</TABLE>
See notes to financial statements.
13
<PAGE> 15
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1999
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 five classes of shares: Class A, Class B, Class
C, Class D and Class E. U.S. Treasury Money Market Class A, B, D and E, U.S.
Treasury Income Class A, General Money Market Class A, B and E 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 reported period. Actual results could differ from those estimates.
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 gains 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 Portfolio's
capital accounts.
As of August 31, 1999, the following reclassifications have been made to
increase (decrease) such accounts with offsetting adjustments to
paid-in-capital:
<TABLE>
<CAPTION>
Undistributed Accumulated net realized
Portfolio Net Investment Income gain/(loss) on investments sold
-----------------------------------------------------------------------------------
<S> <C> <C>
US Treasury Money Market $48,743 $(48,743)
</TABLE>
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, 1999, the following funds had
14
<PAGE> 16
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
AUGUST 31, 1999
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FEDERAL TAXES - CONTINUED:
the following capital loss carryforwards which will expire in the years
indicated:
<TABLE>
<CAPTION>
Portfolio Amount Year
---------------------------------------------------------------
<S> <C> <C>
U.S. Treasury Income $7 2005
78 2007
General Money Market $13,154 2003
30,898 2004
173,216 2005
Tax-Exempt Money Market $49,749 2003
54,799 2004
1,943 2005
12,059 2006
</TABLE>
Capital losses incurred after October 31, within the fund's fiscal year, may be
deferred and treated as incurred the first day of the following year. As of
August 31, 1999, the following Portfolios elect to defer their Post October 31
loss:
<TABLE>
<CAPTION>
Portfolio Loss
-----------------------------------------------------------------------
<S> <C>
U.S. Treasury Money Market $313,741
General Money Market 49,434
Tax-Exempt Money Market 2,545
</TABLE>
TAX-EXEMPT INCOME DISTRIBUTIONS:
During the fiscal year August 31, 1999, the following Portfolio declared
tax-exempt income distributions in the following amounts:
<TABLE>
<CAPTION>
Portfolio Tax-Exempt Income Distributions
---------------------------------------------------------------------------
<S> <C>
Tax-Exempt Money Market $7,421,487
</TABLE>
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 agreement
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,
15
<PAGE> 17
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
AUGUST 31, 1999
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
REPURCHASE AGREEMENTS - CONTINUED:
reviews the value of collateral and the creditworthiness of those banks and
dealers within which the Portfolio enters into repurchase agreements to
evaluation potential risks.
EXPENSE AND ALLOCATION: Expenses directly attributable to a Portfolio are
charged to the Portfolio, while expenses, which are attributed to more than one
Portfolio of the Trust, are allocated among the respective Portfolios based on
relative net assets. 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, Class D and Class E 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, 0.70% of average
daily net assets for Class D shares and 1.00% of average daily net assets for
Class E shares.
For the period ended August 31, 1999, Investment Adviser reimbursed the
Portfolios as follows:
<TABLE>
<CAPTION>
Portfolio Reimbursement
----------------------------------------------------------------
<S> <C>
U.S. Treasury Money Market $12,349
U.S. Treasury Income 1,866
General Money Market 5,813
Tax-Exempt Money Market 4,394
</TABLE>
16
<PAGE> 18
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
AUGUST 31, 1999
2. INVESTMENT ADVISORY, ADMINISTRATION, DISTRIBUTION AND OTHER FEES - CONTINUED:
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 Class C shares, a distribution plan for the Class D shares
and a distribution plan for the Class E 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, up to 0.50% of the average net
assets of the Class D shares and up to 0.80% of the average net assets of the
Class E 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, 0.50% of
each Portfolio's average daily net assets for the Class D shares and 0.80% of
each Portfolio's average daily net assets for the Class E shares, for the year
ended August 31, 1999. No payments have been authorized for the Class A shares.
Certain directors and officers of the Investment Adviser are also Trustees 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.
2. 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 factional
vote for each fraction of a dollar) of net asset value per share owned. Each
Portfolio votes separately with respect to issues affecting only that Portfolio.
Shareholders of a particular class have the exclusive right to vote on matters
pertaining only to that class. Pursuant to the Declaration of Trust, the
Trustees have the authority to create additional Portfolios and to issue
additional classes of shares for each Portfolio of the Trust. At August 31, 1999
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 7.51% 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:
NUMBER OF PERCENTAGE OF
NAME OF PORTFOLIO SHAREHOLDERS SHARES OWNED
- --------------------------------------------------------------------------------
U.S. Treasury Money Market 6 99.26%
General Money Market 3 85.23%
Tax-Exempt Money Market 1 98.68%
17
<PAGE> 19
THE VALIANT FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
U.S. TREASURY MONEY
MARKET PORTFOLIO - CLASS A
YEAR ENDED
------------------------------------------------------------------------------
8/31/99 8/31/98 8/31/97 8/31/96 8/31/95
---------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
---------- --------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income 0.047 0.053 0.052 0.053 0.054
---------- --------- ---------- ---------- ----------
Less Distributions:
Dividends from net investment income (0.047) (0.053) (0.052) (0.053) (0.054)
---------- --------- ---------- ---------- ----------
Net Asset Value, End period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
========== ========= ========== ========== ==========
Total Return (b) 4.77% 5.43% 5.30% 5.45% 5.60%
Ratios/Supplemental Data:
Net assets, End of period (000's) $ 15,088 $ 31,185 $ 23,063 $ 85,260 $ 30,183
Ratios to average net assets:
Net investment income 4.69% 5.27% 5.12% 5.21% 5.79%
Operating expenses 0.20% 0.20% 0.20% 0.20% 0.20%
Operating expenses before
reimbursements/waivers 0.20% 0.20% 0.20% 0.20% 0.21%
</TABLE>
<TABLE>
<CAPTION>
U.S. TREASURY MONEY
MARKET PORTFOLIO - CLASS B
YEAR ENDED
------------------------------------------------------------------------------
8/31/99 8/31/98 8/31/97 8/31/96 8/31/95
---------- ---------- ---------- ---------- ---------
<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 0.044 0.051 0.049 0.050 0.052
---------- ---------- ---------- ---------- ---------
Less Distributions:
Dividends from net investment income (0.044) (0.051) (0.049) (0.050) (0.052)
---------- ---------- ---------- ---------- ---------
Net Asset Value, End of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
========== ========== ========== ========== =========
Total Return (b) 4.51% 5.17% 5.04% 5.18% 5.34%
Ratios/Supplemental Data:
Net assets, End of period (000's) $ 64,226 $ 326,675 $ 300,437 $ 126,327 $ 76,114
Ratios to average net assets:
Net investment income 4.42% 5.05% 4.93% 5.01% 5.41%
Operating expenses 0.45% 0.45% 0.45% 0.45% 0.45%
Operating expenses before
reimbursements/waivers 0.45% 0.45% 0.45% 0.45% 0.46%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(b) Had the Investment Adviser and Trustees not reimbursed and waived certain
expenses, respectively, total returns would have been lower.
See Notes to Financial Statements.
18
<PAGE> 20
THE VALIANT FUND
FINANCIAL HIGHLIGHTS - (CONTINUED)
FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
U.S. TREASURY MONEY
MARKET PORTFOLIO - CLASS D
YEAR ENDED PERIOD ENDED
-----------------------------------------------------------
8/31/99 8/31/98 8/31/97 8/31/96 (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 0.042 0.048 0.047 0.015
------------ ---------- ---------- -----------
Less Distributions:
Dividends from net investment income (0.042) (0.048) (0.047) (0.015)
------------ ---------- ---------- -----------
Net Asset Value, End of period $ 1.000 $ 1.000 $ 1.000 $ 1.000
============ ========== ========== ===========
Total Return (b) 4.25% 4.91% 4.78% 1.55% (a)
Ratios/Supplemental Data:
Net assets, End of period (000's) $ 204,713 $161,901 $101,401 $ 35,549
Ratios to average net assets:
Net investment income 4.16% 4.79% 4.69% 4.68% (c)
Operating expenses 0.70% 0.70% 0.70% 0.70% (c)
Operating expenses before
reimbursements/waivers 0.70% 0.70% 0.70% 0.70% (c)
</TABLE>
<TABLE>
<CAPTION>
U.S. TREASURY MONEY
MARKET PORTFOLIO - CLASS E
PERIOD ENDED
8/31/99 (2)
-----------------
<S> <C>
Net Asset Value, Beginning of period $ 1.000
-----------------
Income from Investment Operations:
Net investment income 0.015
Less Distributions:
Dividends from net investment income (0.015)
-----------------
Net Asset Value, End of period $ 1.00
=================
Total Return (b) 1.54% (a)
Ratios/Supplemental Data:
Net assets, End of period (000's) $ 13,086
Ratios to average net assets:
Net investment income 3.81% (c)
Operating expenses 0.99% (c)
Operating expenses before
reimbursements/waivers 0.99% (c)
</TABLE>
--------------------------------------------------------------------------
(1) The Portfolio commenced Class D shares operations on May 1, 1996.
(2) The Portfolio commenced Class E shares operations on April 6, 1999.
(a) Total returns for periods less than one year are not annualized.
(b) Had the Investment Adviser and Trustees not reimbursed and waived
certain expenses, respectively, total returns would have been lower.
(c) Annualized.
See Notes to Financial Statements.
19
<PAGE> 21
THE VALIANT FUND
FINANCIAL HIGHLIGHTS - (CONTINUED)
FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
U.S. TREASURY
INCOME PORTFOLIO - CLASS A
PERIOD ENDED
-------------------------------------------------------------------
8/31/99 (1) 8/31/98 (2) 8/31/97 (3) 8/31/96 (4) 8/31/95 (5)
-=-------- ----------- ----------- ----------- -----------
<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 0.004 0.007 0.005 0.004 0.004
--------- --------- -------- ---------
Less Distributions:
Dividends from net investment income (0.004) (0.007) (0.005) (0.004) (0.004)
-------- --------- --------- -------- ---------
Net Asset Value, End of period $ 1.00 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ========= ========= ======== =========
Total Return (b) 0.40% 0.74% 0.54% 0.35% 0.39%
Ratios/Supplemental Data:
Net assets, End of period (000's) $ 1 $ 25 $ 25 $ 25 $ 25
Ratios to average net assets:
Net investment income 3.69% 4.83% 4.24% 4.15% 4.47%
Operating expenses 0.20% 0.20% 0.20% 0.20% 0.20%
Operating expenses before
reimbursements/waivers 0.22% 0.23% 0.23% 0.35% 0.29%
</TABLE>
---------------------------------------------------------------------------
(1) The Portfolio operated from December 14, 1998 to January 22, 1999.
(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.
(a) Total returns for periods less than one year are not annualized.
(b) Had the Investment Adviser and Trustees not reimbursed and waived
certain expenses, respectively, total returns would have been lower.
(c) Annualized.
See Notes to Financial Statements.
20
<PAGE> 22
THE VALIANT FUND
FINANCIAL HIGHLIGHTS - (CONTINUED)
FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
GENERAL MONEY
MARKET PORTFOLIO - CLASS A
YEAR ENDED
-------------------------------------------------------------------------
8/31/99 8/31/98 8/31/97 8/31/96 8/31/95
--------- --------- ---------- --------- ----------
<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 0.049 0.054 0.053 0.053 0.056
--------- --------- ---------- --------- ----------
Less Distributions:
Dividends from net investment income (0.049) (0.054) (0.053) (0.053) (0.056)
--------- --------- ---------- --------- ----------
Net Asset Value, End of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
========= ========= ========== ========= ==========
Total Return (b) 5.00% 5.54% 5.40% 5.52% 5.81%
Ratios/Supplemental Data:
Net assets, End of period (000's) $ 254,808 $ 272,980 $ 568,715 $ 334,069 $ 375,965
Ratios to average net assets:
Net investment income 4.91% 5.40% 5.33% 5.36% 5.70%
Operating expenses 0.20% 0.20% 0.20% 0.20% 0.20%
Operating expenses before
reimbursements/waivers 0.20% 0.20% 0.20% 0.20% 0.20%
</TABLE>
<TABLE>
<CAPTION>
GENERAL MONEY
MARKET PORTFOLIO - CLASS B
YEAR ENDED
-----------------------------------------------------------------------
8/31/99 8/31/98 8/31/97 8/31/96 8/31/95
--------- --------- --------- --------- ---------
<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 0.046 0.052 0.050 0.051 0.053
--------- --------- --------- --------- ---------
Less Distributions:
Dividends from net investment income (0.046) (0.052) (0.050) (0.051) (0.053)
--------- --------- --------- --------- ---------
Net Asset Value, End of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
========= ========= ========= ========= =========
Total Return (b) 4.74% 5.28% 5.14% 5.26% 5.54%
Ratios/Supplemental Data:
Net assets, End of period (000's) $ 1,569 $ 17,602 $ 9,155 $ 8,734 $ 9,461
Ratios to average net assets:
Net investment income 4.72% 5.16% 5.02% 5.11% 5.33%
Operating expenses 0.45% 0.45% 0.45% 0.45% 0.45%
Operating expenses before
reimbursements/waivers 0.45% 0.45% 0.45% 0.45% 0.45%
</TABLE>
- --------------------------------------------------------------------------------
(b) Had the Investment Adviser and Trustees not reimbursed and waived
certain expenses, respectively, total returns would have been lower.
See Notes to Financial Statements.
21
<PAGE> 23
THE VALIANT FUND
FINANCIAL HIGHLIGHTS - (Continued)
FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
GENERAL MONEY
MARKET PORTFOLIO - CLASS E
PERIOD ENDED
8/31/99 (1)
-----------------
<S> <C>
Net Asset Value, Beginning of period $ 1.000
-----------------
Income from Investment Operations:
Net investment income 0.013
-----------------
Less Distributions:
Dividends from net investment income (0.013)
-----------------
Net Asset Value, End of period $ 1.000
=================
Total Return (b) 1.31% (a)
Ratios/Supplemental Data:
Net assets, End of period (000's) $ 30,159
Ratios to average net assets:
Net investment income 4.00% (c)
Operating expenses 0.99% (c)
Operating expenses before
reimbursements/waivers 1.00% (c)
</TABLE>
<TABLE>
<CAPTION>
TAX-EXEMPT MONEY
MARKET PORTFOLIO - CLASS A
YEAR ENDED
------------------------------------------------------------------------
8/31/99 8/31/98 8/31/97 8/31/96 8/31/95
--------- ---------- --------- --------- ---------
<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 0.030 0.034 0.034 0.034 0.035
--------- ---------- --------- --------- ---------
Less Distributions:
Dividends from net investment income (0.030) (0.034) (0.034) (0.034) (0.035)
--------- ---------- --------- --------- ---------
Net Asset Value, End of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
========= ========== ========= ========= =========
Total Return (b) 3.01% 3.41% 3.42% 3.43% 3.67%
Ratios/Supplemental Data:
Net assets, End of period (000's) $ 288,343 $ 268,657 $ 282,368 $ 279,867 $ 283,654
Ratios to average net assets:
Net investment income 2.96% (c) 3.35% 3.38% 3.34% 3.50%
Operating expenses 0.20% (c) 0.20% 0.20% 0.20% 0.20%
Operating expenses before
reimbursements/waivers 0.20% (c) 0.20% 0.20% 0.20% 0.20%
</TABLE>
- --------------------------------------------------------------------------------
(1) The Portfolio commenced Class E shares operations on May 5 1999.
(a) Total returns for periods less than one year are not annualized.
(b) Had the Investment Adviser and Trustees not reimbursed and waived
certain expenses, respectively, total returns would have been lower.
(c) Annualized.
See Notes to Financial Statements.
22
<PAGE> 24
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Trustees
of The Valiant Fund
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of portfolio investments, and the related statements of operations
and 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. Treasure Income Portfolio, General Money Market Portfolio and
Tax-Exempt Money Market Portfolio (separate portfolios constituting The Valiant
Fund, hereafter referred to as the "Funds") at August 31, 1999, the results of
each of their operations for the period then ended, the changes in each of their
net assets for the periods presented, and the financial highlights for each of
the periods presented, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Funds'
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 audit 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, 1999 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above.
PricewaterhouseCoopers LLP
Columbus, Ohio
October 20, 1999
23
