<PAGE> 1
THE VALIANT FUND
SEMI-ANNUAL REPORT
FEBRUARY 28, 1999
(UNAUDITED)
<PAGE> 2
<TABLE>
VALIANT U.S. TREASURY MONEY MARKET
Schedule of Portfolio Investments
February 28, 1999
(Unaudited)
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
------ ----------- ----
<S> <C> <C>
U.S. TREASURY BILLS (a) 38.3%:
$ 37,000,000 5.07%, 3/4/99 $ 36,984,370
72,000,000 4.64%, 4/22/99 71,517,439
20,000,000 4.29%, 7/22/99 19,659,581
10,000,000 4.43%, 8/19/99 9,784,667
10,000,000 4.32%, 10/14/99 9,714,989
30,000,000 4.43%, 11/12/99 29,048,533
20,000,000 4.31%, 12/9/99 19,301,933
12,000,000 4.41%, 2/3/00 11,497,456
------------
TOTAL U.S. TREASURY BILLS (AMORTIZED COST $207,508,968) 207,508,968
------------
REPURCHASE AGREEMENTS 65.6%:
20,000,000 First Boston Corp., 4.72%, 3/1/99, Dated 2/22/99, 20,000,000
Repurchase Price $20,018,356, (Collateralized by U.S.
Treasury Notes, 6.00%, 7.875%, 7.50%, & 6.25%, due 10/15/99,
8/15/01, 5/15/02, & 2/15/03; par value $2,518,000, $4,838,000,
$1,041,000 & $11,355,000; valued at $2,590,135, $5,142,905,
$1,130,234, & $11,745,602, respectively)
92,000,000 First Boston Corp., 4.75%, 3/1/99, Dated 2/26/99, 92,000,000
Repurchase Price $92,036,417, (Collateralized by U.S. Treasury
Notes, 5.875% & 6.25%, due, 11/15/99 & 10/31/01; par value
$44,450,000 & $48,331,000; valued at $45,484,622 & $50,523,921,
respectively)
20,000,000 Goldman, Sachs & Co., Inc., 4.68%, 3/1/99, Dated 2/22/99, 20,000,000
Repurchase Price $20,018,200, (Collateralized by U.S. Treasury
Bonds, 6.875%, due 8/15/25; par value $17,919,000; valued at
$20,400,693)
20,000,000 J.P. Morgan & Co., Inc., 4.70%, 3/1/99, Dated 2/22/99, 20,000,000
Repurchase Price $20,018,278, (Collateralized by U.S. Treasury
Bonds, 9.250% & 7.500%, due 2/15/16 &, 11/15/16; par value
$7,293,000 & $8,739,000; valued at $9,936,069 & $10,464,077,
respectively)
91,483,000 J.P. Morgan & Co., Inc., 4.70%, 3/1/99, Dated 2/26/99, 91,483,000
Repurchase Price $91,518,831, (Collateralized by U.S.
Treasury Notes, 6.500%, due 8/31/01; par value
$87,866,000; valued at $93,313,418)
20,000,000 Morgan Stanley Group, Inc., 4.67%, 3/1/99, Dated 2/22/99, 20,000,000
Repurchase Price $20,018,161 (b)
92,000,000 Morgan Stanley Group, Inc., 4.73%, 3/1/99, Dated 2/26/99, 92,000,000
Repurchase Price $92,036,263 (b) ------------
TOTAL REPURCHASE AGREEMENTS (AMORTIZED COST $355,483,000) 355,483,000
------------
TOTAL INVESTMENTS (AMORTIZED COST $562,991,968) * - 103.9% 562,991,968
LIABILITIES IN EXCESS OF OTHER ASSETS (3.9%) (20,924,461)
------------
TOTAL NET ASSETS - 100.0% $542,067,507
============
</TABLE>
- ------------
(a) Rate represents annualized yield to maturity at date of purchase.
See Notes to Financial Statements.
1
<PAGE> 3
VALIANT U.S. TREASURY MONEY MARKET
Schedule of Portfolio Investments
February 28, 1999
(Unaudited) - (continued)
(b) Collateralized by:
<TABLE>
<CAPTION>
SECURITY RATE MATURITY DATE PAR VALUE MARKET VALUE
- -------- ---- ------------- --------- ------------
<S> <C> <C> <C> <C>
US Treasury Note - Principal Strip 0.000% 2/15/00 $ 6,117,000 $ 5,830,357
US Treasury Note 5.375% 6/30/00 11,295,000 11,428,545
US Treasury Note 6.625% 3/31/02 38,730,000 41,259,914
US Treasury Note 5.875% 11/15/05 39,585,000 41,211,594
US Treasury Note - Interest Strip 5.890% 8/15/09 26,308,000 14,566,319
</TABLE>
* Cost for federal Income tax and financial reporting purposes is the same.
** Percentages indicated are based on net assets of $542,067,507.
See Notes to Financial Statements.
2
<PAGE> 4
<TABLE>
VALIANT GENERAL MONEY MARKET
Schedule of Portfolio Investments
February 28, 1999
(Unaudited)
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
------ ----------- ----
<C> <S> <C>
COMMERCIAL PAPER (a) 80.9%:
Business Equipment & Service 5.8%:
$18,000,000 Xerox Corp.
4.70%, 4/26/99 $ 17,868,400
------------
Chemicals 6.4%: Du Pont (E.I.) De Nemours & Co.
4,000,000 4.77%, 4/14/99 3,976,680
14,000,000 4.71%, 6/23/99 13,791,190
2,000,000 4.67%, 7/28/99 1,961,343
------------
19,729,213
------------
Consumer Goods & Services 5.3%:
10,000,000 Fortune Brands, Inc.
4.79%, 8/18/99 9,773,806
6,790,000 Toys R Us, Inc.
4.83%, 3/3/99 6,788,178
------------
16,561,984
------------
Electrical Equipment 3.2%:
10,000,000 W.W. Grainger, Inc.
4.78%, 3/1/99 10,000,000
------------
Electronics 4.6%:
9,000,000 Emerson Electronics Co.
4.80%, 3/11/99 8,988,000
5,200,000 Motorola, Inc.
4.79%, 3/24/99 5,184,087
------------
14,172,087
------------
Financial Services 11.1%:
5,000,000 Caterpillar Financial Services
4.84%, 5/17/99 4,948,239
Ford Motor Credit Co.
3,200,000 5.01%, 3/5/99 3,198,219
3,000,000 4.66%, 10/12/99 2,912,625
2,000,000 4.64%, 10/20/99 1,939,938
General Motors Acceptance Corp.
10,000,000 5.03%, 3/29/99 9,960,877
6,000,000 4.65%, 10/6/99 5,830,275
6,000,000 4.65%, 10/18/99 5,820,975
------------
34,611,148
------------
Food Products 16.9%: Coca Cola Co.
8,000,000 4.95%, 3/23/99 7,975,800
7,000,000 4.97%, 3/17/99 6,984,538
7,000,000 4.73%, 5/11/99 6,934,700
13,733,000 H.J. Heinz Co.
4.83%, 4/26/99 13,629,819
</TABLE>
See Notes to Financial Statements
3
<PAGE> 5
<TABLE>
VALIANT GENERAL MONEY MARKET
Schedule of Portfolio Investments
February 28, 1999
(Unaudited) - (continued)
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
------ ----------- ----
<C> <S> <C>
COMMERCIAL PAPER (a) (CONTINUED)
Food Products (Continued)
$ 9,000,000 Kellogg Co.
5.00%, 3/8/99 $ 8,991,250
5,456,000 4.98%, 3/10/99 5,449,207
2,649,000 Sara Lee Corp.
4.79%, 3/5/99 2,647,590
------------
52,612,904
------------
Leisure Time 3.4%: Walt Disney Co.
2,000,000 5.25%, 3/10/99 1,997,375
2,000,000 4.83%, 4/19/99 1,986,852
6,700,000 4.73%, 5/11/99 6,637,498
------------
10,621,725
------------
Non-Bank Finance 15.9%: General Electric Capital Corp.
4,000,000 5.36%, 4/7/99 3,977,964
5,000,000 5.36%, 4/12/99 4,968,733
4,800,000 4.55%, 6/25/99 4,729,627
5,000,000 4.68%, 10/12/99 4,853,750
IBM Credit Corp
3,000,000 5.00%, 3/3/99 2,999,167
10,000,000 4.80%, 5/17/99 9,897,333
Transamerica Finance Corp
5,000,000 4.98%, 3/11/99 4,993,083
13,000,000 4.78%, 4/20/99 12,913,695
------------
49,333,352
------------
Photography 4.5%:
14,000,000 Eastman Kodak Co.
4.81%, 5/17/99 13,855,967
------------
Publishing 1.6%:
5,000,000 McGraw-Hill Co., Inc.
5.00%, 3/24/99 4,984,028
------------
Telecommunications 2.2%:
7,000,000 Lucent Technologies, Inc.
4.82%, 3/31/99 6,971,883
------------
TOTAL COMMERCIAL PAPER (AMORTIZED COST $251,322,691) 251,322,691
------------
U.S. GOVERNMENT AGENCY MORTGAGES 3.2%:
10,000,000 Fannie Mae, 4.96%, 3/25/99 9,966,933
------------
TOTAL U.S. GOVERNMENT AGENCY MORTGAGES (AMORTIZED COST $9,966,933) 9,966,933
------------
TOTAL COMMERCIAL PAPER AND U.S. GOVERNMENT AGENCY MORTGAGES
(COST $261,289,624) 261,289,624
------------
</TABLE>
See Notes to Financial Statements
4
<PAGE> 6
<TABLE>
VALIANT GENERAL MONEY MARKET
Schedule of Portfolio Investments
February 28, 1999
(Unaudited) - (continued)
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
------ ----------- ----
<C> <S> <C>
REPURCHASE AGREEMENTS 16.3%:
$18,541,000 First Boston Corp., 4.75%, 3/1/99, Dated 2/26/99, $ 18,541,000
Repurchase Price $18,548,339, (Collateralized by U.S.
Treasury Notes, 5.75%, due 8/15/03; par value
$18,675,000;valued at $18,999,520)
15,000,000 J.P. Morgan & Co., Inc., 4.70%, 3/1/99, Dated 2/26/99, 15,000,000
Repurchase Price $15,005,875, (Collateralized by U.S.
Treasury Notes, 6.125%, due 11/15/27; par value
$14,438,000; valued at $15,300,981)
17,000,000 Morgan Stanley Group, Inc., 4.73%, 3/1/99, Dated 17,000,000
2/26/99, Repurchase Price $17,006,701, ------------
(Collateralized by U.S. Treasury Notes, 6.50%, due
8/15/05, par value $16,380,000; valued at
$17,355,480)
TOTAL REPURCHASE AGREEMENTS (AMORTIZED COST $50,541,000) 50,541,000
------------
TOTAL INVESTMENTS (AMORTIZED COST $311,830,624) * - 100.4% 311,830,624
LIABILITIES IN EXCESS OF OTHER ASSETS - (0.4%) (1,170,883)
------------
TOTAL NET ASSETS - 100.0% $310,659,741
============
</TABLE>
- ------------
(a) Rate represents annualized yield to maturity at date of purchase.
* Cost for federal income tax and financial reporting purposes is the same.
** Percentages indicated are based on net assets of $310,659,741.
See Notes to Financial Statements
5
<PAGE> 7
<TABLE>
VALIANT TAX-EXEMPT MONEY MARKET
Schedule of Portfolio Investments
February 28, 1999
(Unaudited)
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
------ ----------- ----
<C> <S> <C>
MUNICIPAL BONDS AND NOTES 102.1%:
Alabama 2.7%:
$6,475,000 Alabama State Public School & College Authority $ 6,532,899
4.50%, 8/1/99 ------------
Alaska 2.1%:
5,000,000 Alaska Housing Finance Corporation 5,000,000
Series C ------------
2.90%, 6/1/26+
SBPA-Swiss Bank Corp.
Arizona 0.8%:
2,000,000 Maricopa County Arizona, PCR 2,000,000
Arizona Public Service, Series E ------------
3.25%, 5/1/29+
LOC: Bank of America
California 3.0%:
7,200,000 Los Angeles County 7,219,890
TRANS, Series A ------------
4.50%, 6/30/99
Colorado 3.7%:
1,140,000 Colorado Health Facilities 1,150,516
Catholic Health Initiative, Series A
4.25%, 12/1/99
4,850,000 Colorado Health Facilities 4,850,000
Catholic Health Inititative, Series B
3.00%, 12/1/25+
SBPA-Toronto Dominion Bank
3,000,000 Colorado State General Fund Revenue, 3,006,264
TRANS, Series A ------------
4.00%, 6/25/99
9,006,780
------------
Connecticut 1.0%:
2,300,000 Connecticut State Special Assessment 2,300,000
Unemployment Compensation, Series C ------------
3.60%, 11/15/01
Florida 1.9%:
3,000,000 Dade County Water & Sewer Revenue Systems 3,000,000
3.00%, 10/5/22+
SBPA-Commerzbank AG
1,500,000 Intermountain Power Agency Utah Power Supply Revenue 1,500,000
Series F ------------
2.80%, 7/1/99
4,500,000
------------
Georgia 4.4%:
2,000,000 Burke County Development Authority, PCR 2,000,000
Oglethorpe Power Corporation, Series A
2.95%, 1/1/16+
5,000,000 De Kalb Private Hospital Authority 5,000,000
Egleston Children's Hospital, Series A
2.95%, 3/1/24+
3,550,000 Georgia Municipal Electric Authority 3,550,000
Series B ------------
3.00%, 6/1/20
10,550,000
------------
</TABLE>
See Notes to Financial Statements
6
<PAGE> 8
<TABLE>
VALIANT TAX-EXEMPT MONEY MARKET
Schedule of Portfolio Investments
February 28, 1999
(Unaudited) - (continued)
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
------ ----------- ----
<C> <S> <C>
Illinois 2.7%:
$ 2,500,000 Chicago Illinois GO $ 2,500,000
Mandatory Put 12/28/99
2.85%, 1/31/00++
LOC: Morgan Guaranty Trust
1,000,000 Chicago Metropolitan Water 1,009,237
4.15%, 12/1/99
1,600,000 Illinois Health Facilities Authority Revenue 1,600,000
St. Lukes Medical Center Obligations, Series B
3.00%, 11/15/23+
1,300,000 Illinois Sales Tax Revenue 1,319,178
Pre-Refunded, Series K ------------
6.75%, 6/15/99
6,428,415
------------
Indiana 1.3%:
3,200,000 St. Joseph County Indiana Educational Facilities, 3,200,000
University of Notre Dame ------------
2.90%, 3/1/33+
LIQ: Bank of America
Kentucky 1.2%:
3,000,000 Trimble County Kentucky, PCR 3,000,000
2.75%, 5/7/99 ------------
Louisianna 2.5%:
6,000,000 Lake Charles Louisiana Harbor & Terminal 6,000,000
Distribution Port ------------
Facilities Revenue
3.30%, 11/1/11+
Maryland 3.1%:
5,000,000 Howard County Maryland Bans 5,000,000
Series B
2.95%, 6/8/99
1,365,000 Maryland State Department of Transportation 1,401,129
Pre-Refunded
6.50%, 8/15/99
1,000,000 Maryland State GO 1,020,000
Pre-Refunded, First Series ------------
6.80%, 3/1/99
7,421,129
------------
Massachusetts 3.1%:
4,000,000 Massachusetts State GO 4,000,000
Series B
2.90%, 8/1/15+
SBPA-Landesbank Hessen-Thueringen GZ
2,000,000 Massachusetts State GO 2,000,000
Series B
3.25%, 9/1/16+
SBPA-Toronto Dominion Bank
1,500,000 Massachusetts State Health & Educational Facilities 1,500,000
Authority Revenue, Capital Asset Program ------------
Series C
2.90%, 7/1/05+
7,500,000
------------
</TABLE>
See Notes to Financial Statements
7
<PAGE> 9
<TABLE>
VALIANT TAX-EXEMPT MONEY MARKET
Schedule of Portfolio Investments
February 28, 1999
(Unaudited) - (continued)
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
------ ----------- ----
<C> <S> <C>
Michigan 9.3%:
$10,000,000 Detroit Michigan Sewer Disposal $ 10,000,000
Series A
3.00%, 7/1/23+
MBIA Insured
2,000,000 Michigan State Building Authority 2,000,000
2.65%, 3/10/99
5,000,000 Michigan State Housing Development Authority 5,000,000
Series B
2.90%, 4/1/19+
LOC: Landesbank Hessen-Thueringen GZ
5,100,000 Michigan State University 5,100,000
Series A2 ------------
2.90%, 8/15/22+
22,100,000
------------
Minnesota 2.6%:
4,000,000 Rochester Health Care Facilities 4,000,000
Mayo Foundation/Mayo Medical Center, Series A
2.70%, 4/5/99
2,300,000 Rochester Health Care Facilities 2,300,000
Mayo Foundation/Mayo Medical Center, Series A ------------
2.65%, 5/6/99
6,300,000
------------
Mississippi 2.5%:
5,000,000 Jackson County Port Facility 5,000,000
Chevron USA Project
3.25%, 6/1/23+
1,000,000 Jackson County Port Facility Revenue 1,000,000
Chevron USA Project ------------
3.20%, 6/1/23+
6,000,000
------------
Nevada 2.7%:
3,600,000 Clark County Airport Improvement Authority Revenue 3,600,000
MBIA Insured, Series A
2.95%, 7/1/12+
SBPA-National Westminster
3,000,000 Clark County Airport Improvement Authority Revenue 3,000,000
Sub Lien Series A ------------
3.00%, 7/1/25+
6,600,000
------------
New York 2.6%:
2,500,000 New York City Municipal Water Finance Authority 2,500,000
FGIC Insured
3.25%, 6/15/23+
SBPA-FGIC Securities Purchase Inc.
2,500,000 New York City Municipal Water Finance Authority 2,500,000
FGIC Insured, Series G
3.15%, 6/15/24+
SBPA-FGIC Securities Purchase, Inc.
1,350,000 Port Authority New York & New Jersey 1,350,000
Special Obligation Revenue, Versatile Structure ------------
Obligation 5
3.20%, 8/1/24+
SBPA-Bayerische Landesbank
6,350,000
------------
</TABLE>
See Notes to Financial Statements
8
<PAGE> 10
<TABLE>
VALIANT TAX-EXEMPT MONEY MARKET
Schedule of Portfolio Investments
February 28, 1999
(Unaudited) - (continued)
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
------ ----------- ----
<C> <S> <C>
North Carolina 4.2%:
$ 3,000,000 Charlotte Airport Revenue $ 3,000,000
MBIA Insured, Series A
2.95%, 7/1/16+
SBPA-Commerzbank AG
2,000,000 Raleigh Durham Airport Authority American 2,000,000
Airlines, Series B
3.30%, 11/1/15+
LOC:Nationsbank
5,000,000 Winston-Salem Water & Sewer System 5,000,000
3.00%, 6/1/14 ------------
SBPA-Wachovia Bank of NC
10,000,000
------------
Ohio 4.0%:
1,500,000 Ohio State Public Facilities Commission 1,520,249
Higher Education Capital Facilities, Series II B
5.00%, 11/1/99
2,500,000 Ohio State University 2,500,000
2.70%, 3/4/99
5,700,000 Ohio State University 5,700,000
2.70%, 4/28/99 ------------
9,720,249
------------
Pennsylvania 2.7%:
6,500,000 Philadelphia Water & Wastewater Revenue 6,500,000
AMBAC, Series B ------------
2.95%, 8/1/27+
SBPA-Commerzbank AG
Puerto Rico 1.2%:
3,000,000 Puerto Rico Commonwealth 3,007,961
TRANS, Series A ------------
3.50%, 7/30/99
Rhode Island 1.2%:
3,000,000 Rhode Island State GO 3,000,000
3.00%, 6/1/18+ ------------
SBPA-Landesbank Hessen
Tennessee 3.4%:
4,000,000 Memphis Tennessee GO 4,000,000
Series A
3.05%, 8/1/03+
SBPA-Westdeutsche Landesbank
2,700,000 Shelby County Tennessee 2,700,000
Series 98A
2.80%, 5/11/99
1,500,000 Tennessee School Board 1,500,000
Series 98A ------------
2.70%, 3/31/99
8,200,000
------------
Texas 13.8%:
3,910,000 Dallas Texas Water & Sewer System 3,910,000
2.95%, 6/10/99
1,120,000 Fort Worth, Texas GO 1,120,000
Series A
5.50%, 3/1/99
</TABLE>
See Notes to Financial Statements
9
<PAGE> 11
<TABLE>
VALIANT TAX-EXEMPT MONEY MARKET
Schedule of Portfolio Investments
February 28, 1999
(Unaudited) - (continued)
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
------ ----------- ----
<C> <S> <C>
Texas (Continued)
$ 2,000,000 Harris County Industrial Development PCR $ 2,000,000
3.25%, 3/1/24+
2,183,000 Harris County Texas GO 2,183,000
Series A
2.90%, 5/6/99
5,000,000 Harris County Toll Road 5,000,000
Series H
2.90%, 8/1/20+
SBPA-Morgan Guaranty Trust
5,940,000 Lower Colorado River Authority Texas Revenue 5,940,001
Refunding Junior Lien, MBIA Insured,
2.95%, 1/1/13+
SBPA-Bayerische Vereinsbank
2,200,000 North Central Texas Health Facility Development, 2,200,000
Corporation Revenue, Hospital Presbyterian Medical
Center, MBIA Insured, Series D
3.35%, 12/1/15+
1,000,000 Northside Texas Independent School District GO 1,003,861
Pre-Refunded
7.40%, 4/1/01
4,600,000 Port Arthur Navigation District 4,600,000
Texaco Income Project
3.30%, 10/1/24+
3,800,000 Texas Tax & Revenue Anticipation Notes 3,830,027
4.50%, 8/31/99
1,200,000 Texas Water Development Board 1,200,000
Series A ------------
3.25%, 3/1/15+
SBPA-Canadian Imperial Bank
32,986,889
------------
Utah (4.6%):
1,000,000 Intermountain Power Agency 1,000,000
Series 97B
3.00%, 3/10/99
5,000,000 Salt Lake County, PCR, Revenue Service 5,000,000
Station Holdings Project
3.25%, 2/1/08+
5,000,000 Utah Transit Authority Sales Tax Revenue 5,000,000
Trax Project ------------
3.00%, 5/1/28+
LOC: Bayerische Landesbank
11,000,000
------------
Vermont (0.4%):
1,000,000 Vermont Muni Bond Bank 1,015,544
5.00%, 12/1/99 ------------
AMBAC
Virginia (1.7%):
4,000,000 Virginia Public School Authority 4,004,005
4.20%, 4/1/99 ------------
Washington (6.1%):
1,500,000 King County Washington School District No. 414 1,550,535
Pre-Refunded
7.50%, 12/1/03
</TABLE>
See Notes to Financial Statements
10
<PAGE> 12
<TABLE>
VALIANT TAX-EXEMPT MONEY MARKET
Schedule of Portfolio Investments
February 28, 1999
(Unaudited) - (continued)
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
------ ----------- ----
<C> <S> <C>
$ 1,600,000 Seattle Municipal Light & Power Revenue $ 1,600,000
2.90%, 11/1/18+
SBPA-Morgan Guaranty Trust
5,000,000 Washington State GO 4,999,999
Series 96B
2.85%, 6/1/20+
SBPA-Landesbank Hessen-Thueringen GZ
3,000,000 Washington State Public Power Supply 3,102,924
Pre-Refunded
7.50%, 7/1/07
LOC: Bank of America
3,500,000 Washington State Public Power Supply, Nuclear
Project No.1 3,500,000
2.85%, 7/1/17+ ------------
LOC: Morgan Guaranty Trust
14,753,458
------------
Wisconsin (4.8%):
3,000,000 Oak Creek, PCR 3,000,000
Wisconsin Electric Power Company Project
2.95%, 8/01/16+
5,600,000 Sheboygan, PCR 5,600,000
Wisconsin Power & Light Company
3.10%, 8/1/14+
3,000,000 Sheboygan, PCR 3,000,000
Wisconsin Electric Power Company ------------
3.05%, 9/1/15+
11,600,000
------------
Wyoming (0.8%):
2,000,000 Lincoln County, PCR
Exxon Project, Series D
3.10%, 11/1/14+ 2,000,000
------------
TOTAL MUNICIPAL BONDS AND NOTES (AMORTIZED COST $245,797,219) 245,797,219
------------
TOTAL INVESTMENTS (AMORTIZED COST $245,797,219) * - 102.1% 245,797,219
LIABILITIES IN EXCESS OF OTHER ASSETS - (2.1%) (5,079,264)
------------
TOTAL NET ASSETS - 100.0% $240,717,955
============
</TABLE>
- ------------
* Cost for federal income tax and financial reporting purposes is the same.
** Percentages indicated are based on net assets of $240,717,955.
+ 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.
++ Putbonds and notes have demand features which mature in one year. The
interest rate shown reflects the rate currently in effect.
See Notes to Financial Statements
11
<PAGE> 13
VALIANT TAX-EXEMPT MONEY MARKET
Schedule of Portfolio Investments
February 28, 1999
(Unaudited) - (continued)
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
12
<PAGE> 14
<TABLE>
THE VALIANT FUND
STATEMENTS OF ASSETS AND LIABILITIES
FEBRUARY 28, 1999 (UNAUDITED)
<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 $207,508,968; $0;
$261,289,624; $245,797,219, respectively) $207,508,968 $ -- $261,289,624 $245,797,219
Repurchase agreements (Cost $355,483,000; $0;
$50,541,000; $0, respectively) 355,483,000 -- 50,541,000 --
------------ ------ ------------ ------------
Total investments at value 562,991,968 -- 311,830,624 245,797,219
Cash 800 976 57 259,328
Interest receivable 181,505 -- 19,915 1,184,413
Receivable for investments sold -- -- -- 1,502,630
Deferred organization expense (Note 1) 1,037 1,866 -- --
Prepaid assets 1,011 -- 83 286
------------ ------ ------------ ------------
Total Assets $563,176,321 $2,842 $311,850,679 $248,743,876
------------ ------ ------------ ------------
LIABILITIES:
Dividends payable 1,427,748 -- 1,133,901 483,135
Payable for investments purchased 19,499,655 -- -- 7,500,000
Advisory fee payable (Note 2) 72,322 2,197 50,891 41,584
Distribution fee payable (Note 2) 109,089 -- 4,727 --
Accrued expenses -- 31 1,419 1,202
------------ ------ ------------ ------------
Total Liabilities 21,108,814 2,228 1,190,938 8,025,921
------------ ------ ------------ ------------
NET ASSETS $542,067,507 $ 614 $310,659,741 $240,717,955
============ ====== ============ ============
NET ASSETS CONSIST OF:
Paid-in capital (Note 4) 542,197,411 615 310,894,600 240,836,505
Undistributed net investment income 3,224 84 -- --
Accumulated net realized gain/(loss) on
investments sold (133,128) (85) (234,859) (118,550)
------------ ------ ------------ ------------
Net Assets $542,067,507 $ 614 $310,659,741 $240,717,955
============ ====== ============ ============
SHARES OF BENEFICIAL INTEREST OUTSTANDING:
Class A 33,272,095 614 285,556,425 240,836,505
Class B 351,738,874 -- 25,338,175 --
Class D 157,186,441 -- -- --
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.
13
<PAGE> 15
<TABLE>
THE VALIANT FUND
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 28, 1999 (UNAUDITED)
<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) $11,743,013 $389,146 $9,357,998 $3,727,177
----------- -------- ---------- ----------
EXPENSES:
Investment advisory fee (Note 2) 471,569 19,801 357,748 235,393
Distribution fee, Class B (Note 2) 484,248 -- 39,607 --
Distribution fee, Class D (Note 2) 410,624 -- -- --
Trustee fees (Note 2) 2,240 31 5,707 4,035
Amortization of organization costs (Note 1) 2,501 537 267 500
----------- -------- ---------- ----------
Total expenses before reimbursements and waivers 1,371,182 20,369 403,329 239,928
----------- -------- ---------- ----------
Expense Waivers\Reimbursements (Note 2) (138,356) -- (11,316) --
----------- -------- ---------- ----------
Total Net Expenses 1,232,826 20,369 392,013 239,928
----------- -------- ---------- ----------
NET INVESTMENT INCOME 10,510,187 368,777 8,965,985 3,487,249
----------- -------- ---------- ----------
REALIZED GAIN (LOSS) ON
INVESTMENTS SOLD (NOTE 1) (124,971) -- 13,966 3,517
----------- -------- ---------- ----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $10,385,216 $368,777 $8,979,951 $3,490,766
=========== ======== ========== ==========
</TABLE>
- --------------------------------------------------------------------------------
* The Portfolio operated from December 14, 1998 to January 22, 1999.
See notes to financial statements.
14
<PAGE> 16
<TABLE>
THE VALIANT FUND
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
U.S. TREASURY U.S. TREASURY
MONEY MARKET PORTFOLIO INCOME PORTFOLIO
SIX MONTHS ENDED SIX MONTHS ENDED
2/28/99 YEAR ENDED 2/28/99* YEAR ENDED
(UNAUDITED) 8/31/98 (UNAUDITED) 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 10,510,187 23,401,246 368,777 868,369
Net realized gain (loss) on investments sold (124,971) (8,157) -- (78)
------------- ------------- ------------- -------------
Net increase in net assets
resulting from operations 10,385,216 23,393,089 368,777 868,291
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (731,017) (1,852,870) (368,700) (868,369)
Class B (6,274,797) (15,114,935) -- --
Class D (3,504,373) (6,433,441) -- --
------------- ------------- ------------- -------------
Net decrease from distributions (10,510,187) (23,401,246) (368,700) (868,369)
------------- ------------- ------------- -------------
SHARE TRANSACTIONS (AT $1.00 PER SHARE):
CLASS A:
Net proceeds from sale of shares 25,084,730 135,356,624 121,187,913 236,425,416
Issued to shareholders in reinvestment of
dividends 285 1,471 75 188
Cost of shares repurchased (22,999,403) (127,234,383) (121,212,914) (236,425,416)
------------- ------------- ------------- -------------
Net Class A share transactions 2,085,612 8,123,712 (24,924) 188
CLASS B:
Net proceeds from sale of shares 475,607,787 614,132,418 -- --
Cost of shares repurchased (450,552,368) (587,885,626) -- --
------------- ------------- ------------- -------------
Net Class B share transactions 25,055,419 26,246,792 -- --
CLASS D:
Net proceeds from sale of shares 458,006,685 465,646,407 -- --
Cost of shares repurchased (462,716,691) (405,147,842) -- --
------------- ------------- ------------- -------------
Net Class D share transactions (4,710,006) 60,498,565 -- --
------------- ------------- ------------- -------------
Net increase from share transactions 22,431,025 94,869,069 (24,924) 188
------------- ------------- ------------- -------------
Net increase in net assets 22,306,054 94,860,912 (24,847) 110
------------- ------------- ------------- -------------
NET ASSETS AT END OF PERIOD $ 542,067,507 $ 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.
15
<PAGE> 17
<TABLE>
THE VALIANT FUND
STATEMENTS OF CHANGES IN NET ASSETS - (CONTINUED)
<CAPTION>
GENERAL MONEY TAX-EXEMPT MONEY
MARKET PORTFOLIO MARKET PORTFOLIO
SIX MONTHS ENDED SIX MONTHS ENDED
2/28/99 YEAR ENDED 2/28/99 YEAR ENDED
(UNAUDITED) 8/31/98 (UNAUDITED) 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 8,965,985 24,103,402 3,487,249 8,611,037
Net realized gain (loss) on investments sold 13,966 10,362 3,517 1,596
--------------- --------------- ------------- -------------
Net increase in net assets
resulting from operations 8,979,951 24,113,764 3,490,766 8,612,633
--------------- --------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (8,426,925) (23,272,185) (3,487,249) (8,611,037)
Class B (539,060) (831,217) -- --
--------------- --------------- ------------- -------------
Net decrease from distributions (8,965,985) (24,103,402) (3,487,249) (8,611,037)
--------------- --------------- ------------- -------------
SHARE TRANSACTIONS (AT $1.00 PER SHARE):
CLASS A:
Net proceeds from sale of shares 1,537,875,604 3,065,147,438 644,887,481 643,017,161
Issued to shareholders in reinvestment of
dividends 1,600,545 5,620,281 148 1,271
Cost of shares repurchased (1,527,141,128) (3,366,515,045) (672,830,525) (656,730,774)
--------------- --------------- ------------- -------------
Net Class A share transactions 12,335,021 (295,747,326) (27,942,896) (13,712,342)
CLASS B:
Net proceeds from sale of shares 25,880,858 44,499,456 -- --
Cost of shares repurchased (18,151,867) (36,051,074) -- --
--------------- --------------- ------------- -------------
Net Class B share transactions 7,728,991 8,448,382 -- --
--------------- --------------- ------------- -------------
Net increase from share transactions 20,064,012 (287,298,944) (27,942,896) (13,712,342)
--------------- --------------- ------------- -------------
Net increase in net assets 20,077,978 (287,288,582) (27,939,379) (13,710,746)
--------------- --------------- ------------- -------------
NET ASSETS AT END OF PERIOD $ 310,659,741 $ 290,581,763 $ 240,717,955 $ 268,657,334
=============== =============== ============= =============
</TABLE>
See notes to financial statements.
16
<PAGE> 18
<TABLE>
THE VALIANT FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT THE PERIOD
<CAPTION>
U.S. TREASURY MONEY
MARKET PORTFOLIO - CLASS A
SIX MONTHS ENDED
2/28/99 YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
(UNAUDITED) 8/31/98 8/31/97 8/31/96 8/31/95 8/31/94 (1)
---------------- ---------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------- ------- ------- ------- ------- -------
Income from Investment Operations:
Net investment income 0.024 0.053 0.052 0.053 0.054 0.012
------- ------- ------- ------- ------- -------
Less Distributions:
Dividends from net investment income (0.024) (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 $ 1.000
======= ======= ======= ======= ======= =======
Total Return (b) 2.39%(a) 5.43% 5.30% 5.45% 5.60% 1.19%(a)
Ratios/Supplemental Data:
Net assets, End of period (000's) $33,263 $31,185 $23,063 $85,260 $30,183 $ 25
Ratios to average net assets:
Net investment income 4.78%(c) 5.27% 5.12% 5.21% 5.79% 4.06%(c)
Operating expenses 0.20%(c) 0.20% 0.20% 0.20% 0.20% 0.20%(c)
Operating expenses before
reimbursements/waivers 0.20%(c) 0.20% 0.20% 0.20% 0.21% 0.26%(c)
<CAPTION>
U.S. TREASURY MONEY
MARKET PORTFOLIO - CLASS B
SIX MONTHS ENDED
2/28/99 YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
(UNAUDITED) 8/31/98 8/31/97 8/31/96 8/31/95 8/31/94 (1)
---------------- ---------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- ------- -------
Income from Investment Operations:
Net investment income 0.023 0.051 0.049 0.050 0.052 0.011
-------- -------- -------- -------- ------- -------
Less Distributions:
Dividends from net investment income (0.023) (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 $ 1.000
======== ======== ======== ======== ======= =======
Total Return (b) 2.26%(a) 5.17% 5.04% 5.18% 5.34% 1.12%(a)
Ratios/Supplemental Data:
Net assets, End of period (000's) $351,661 $326,675 $300,437 $126,327 $76,114 $13,355
Ratios to average net assets:
Net investment income 4.53%(c) 5.05% 4.93% 5.01% 5.41% 3.87%(c)
Operating expenses 0.45%(c) 0.45% 0.45% 0.45% 0.45% 0.45%(c)
Operating expenses before
reimbursements/waivers 0.55%(c) 0.45% 0.45% 0.45% 0.46% 0.50%(c)
</TABLE>
- --------------------------------------------------------------------------------
(1) The Portfolio commenced Class A and Class B shares operations on May 17,
1994.
(a) Total returns for periods less than one year are not annualized.
(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.
17
<PAGE> 19
<TABLE>
THE VALIANT FUND
FINANCIAL HIGHLIGHTS - (CONTINUED)
FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT THE PERIOD
<CAPTION>
U.S. TREASURY MONEY
MARKET PORTFOLIO - CLASS D
SIX MONTHS ENDED
2/28/99 YEAR ENDED YEAR ENDED PERIOD ENDED
(UNAUDITED) 8/31/98 8/31/97 8/31/94 (1)
---------------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------
Income from Investment Operations:
Net investment income 0.021 0.048 0.047 0.015
-------- -------- -------- -------
Less Distributions:
Dividends from net investment income (0.021) (0.048) (0.047) (0.015)
-------- -------- -------- -------
Net Asset Value, End of period $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== =======
Total Return (b) 2.14%(a) 4.91% 4.78% 1.55%(a)
Ratios/Supplemental Data:
Net assets, End of period (000's) $157,144 $161,901 $101,401 $35,549
Ratios to average net assets:
Net investment income 4.28%(c) 4.79% 4.69% 4.68%(c)
Operating expenses 0.70%(c) 0.70% 0.70% 0.70%(c)
Operating expenses before
reimbursements/waivers 0.70%(c) 0.70% 0.70% 0.70%(c)
<CAPTION>
U.S. TREASURY
INCOME PORTFOLIO - CLASS A
PERIOD ENDED
2/28/99 (2) PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED
(UNAUDITED) 8/31/98 (3) 8/31/97 (4) 8/31/96 (5) 8/31/95 (6) 8/31/94 (7)
------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of period $1.000 $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 0.001
------ ------ ------ ------ ------ ------
Less Distributions:
Dividends from net investment income (0.004) (0.007) (0.005) (0.004) (0.004) (0.001)
------ ------ ------ ------ ------ ------
Net Asset Value, End of period $ 1.00 $1.000 $1.000 $1.000 $1.000 $1.000
====== ====== ====== ====== ====== ======
Total Return (b) 0.04%(a) 0.74% 0.54% 0.35% 0.39% 0.12%(a)
Ratios/Supplemental Data:
Net assets, End of period (000's) $ 1 $ 25 $ 25 $ 25 $ 25 $ 25
Ratios to average net assets:
Net investment income (c) 3.69% 4.83% 4.24% 4.15% 4.47% 2.96%
Operating expenses (c) 0.20% 0.20% 0.20% 0.20% 0.20% 0.20%
Operating expenses before
reimbursements/waivers (c) 0.20% 0.23% 0.23% 0.35% 0.29% 0.22%
</TABLE>
- --------------------------------------------------------------------------------
(1) The Portfolio commenced Class D shares operations on May 1, 1996.
(2) The Portfolio operated from December 14, 1998 to January 22, 1999.
(3) The Portfolio operated from December 17, 1997 to February 11, 1998.
(4) The Portfolio operated from December 13, 1996 to January 30, 1997.
(5) The Portfolio operated from December 11, 1995 to January 10, 1996.
(6) The Portfolio operated from December 12, 1994 to January 11, 1995.
(7) The Portfolio operated from December 28, 1993 to January 12, 1994.
(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.
18
<PAGE> 20
<TABLE>
THE VALIANT FUND
FINANCIAL HIGHLIGHTS - (CONTINUED)
FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT THE PERIOD
<CAPTION>
GENERAL MONEY
MARKET PORTFOLIO - CLASS A
SIX MONTHS ENDED
2/28/99 YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
(UNAUDITED) 8/31/98 8/31/97 8/31/96 8/31/95 8/31/94 (1)
---------------- ---------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income 0.025 0.054 0.053 0.053 0.056 0.033
-------- -------- -------- -------- -------- --------
Less Distributions:
Dividends from net investment income (0.025) (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 $ 1.000
======== ======== ======== ======== ======== ========
Total Return (b) 2.52%(a) 5.54% 5.40% 5.52% 5.81% 3.70%(a)
Ratios/Supplemental Data:
Net assets, End of period (000's) $285,327 $272,980 $568,715 $334,069 $375,965 $167,016
Ratios to average net assets:
Net investment income 5.03%(c) 5.40% 5.33% 5.36% 5.70% 3.70%(c)
Operating expenses 0.20%(c) 0.20% 0.20% 0.20% 0.20% 0.20%(c)
Operating expenses before
reimbursements/waivers 0.20%(c) 0.20% 0.20% 0.20% 0.20% 0.21%(c)
<CAPTION>
GENERAL MONEY
MARKET PORTFOLIO - CLASS B
SIX MONTHS ENDED
2/28/99 YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
(UNAUDITED) 8/31/98 8/31/97 8/31/96 8/31/95 8/31/94 (1)
---------------- ---------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income 0.024 0.052 0.050 0.051 0.053 0.009
-------- -------- -------- -------- -------- --------
Less Distributions:
Dividends from net investment income (0.024) (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 $ 1.000
======== ======== ======== ======== ======== ========
Total Return (b) 2.39%(a) 5.28% 5.14% 5.26% 5.54% 0.92%(a)
Ratios/Supplemental Data:
Net assets, End of period (000's) $ 25,331 $ 17,602 $ 9,155 $ 8,734 $ 9,461 $ 9,520
Ratios to average net assets:
Net investment income 4.78%(c) 5.16% 5.02% 5.11% 5.33% 3.99%(c)
Operating expenses 0.45%(c) 0.45% 0.45% 0.45% 0.45% 0.45%(c)
Operating expenses before
reimbursements/waivers 0.55%(c) 0.45% 0.45% 0.45% 0.45% 0.46%(c)
</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.
(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
<TABLE>
THE VALIANT FUND
FINANCIAL HIGHLIGHTS - (CONTINUED)
FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT THE PERIOD
<CAPTION>
TAX-EXEMPT MONEY
MARKET PORTFOLIO - CLASS A
SIX MONTHS ENDED
2/28/99 YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
(UNAUDITED) 8/31/98 8/31/97 8/31/96 8/31/95 8/31/94 (1)
---------------- ---------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income 0.015 0.034 0.034 0.034 0.035 0.021
-------- -------- -------- -------- -------- --------
Less Distributions:
Dividends from net investment income (0.015) (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 $ 1.000
======== ======== ======== ======== ======== ========
Total Return (b) 1.49%(a) 3.41% 3.42% 3.43% 3.67% 2.11%(a)
Ratios/Supplemental Data:
Net assets, End of period (000's) $240,718 $268,657 $282,368 $279,867 $283,654 $258,130
Ratios to average net assets:
Net investment income 2.96%(c) 3.35% 3.38% 3.34% 3.50% 2.38%(c)
Operating expenses 0.20%(c) 0.20% 0.20% 0.20% 0.20% 0.20%(c)
Operating expenses before
reimbursements/waivers 0.20%(c) 0.20% 0.20% 0.20% 0.20% 0.22%(c)
</TABLE>
- --------------------------------------------------------------------------------
(1) The portfolio commenced operations on October 7, 1993.
(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
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 1999 (UNAUDITED)
The Valiant Fund (the "Trust") was organized as a Massachusetts business trust
on January 29, 1993 and is registered under the Investment Company Act of 1940,
as amended (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 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 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.
21
<PAGE> 23
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
FEBRUARY 28, 1999 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
REPURCHASE AGREEMENTS: Each Portfolio, except the U.S. Treasury Income Porfolio,
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.
EXPENSE AND ALLOCATION: 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.
22
<PAGE> 24
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
FEBRUARY 28, 1999 (UNAUDITED)
2. INVESTMENT ADVISORY, ADMINISTRATION, DISTRIBUTION, AND OTHER FEES
- (CONTINUED)
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.
For the period ended February 28, 1999, distribution fees for Class B shares
were waived as follows:
<TABLE>
<CAPTION>
Portfolio Waiver
- -------------------------------------------------------------------------------
<S> <C>
U.S. Treasury Money Market $138,356
U.S. Treasury Income 0
General Money Market 11,316
Tax-Exempt Money Market 0
</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 six months ended
February 28, 1999. 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 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.
23
<PAGE> 25
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
FEBRUARY 28, 1999 (UNAUDITED)
3. SHARES OF BENEFICIAL INTEREST - (CONTINUED)
At February 28, 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 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>
NUMBER OF PERCENTAGE OF
NAME OF PORTFOLIO SHAREHOLDERS SHARES OWNED
- -------------------------------------------------------------------------------
<S> <C> <C>
U.S. Treasury Money Market 2 84.4%
General Money Market 3 82.5%
Tax-Exempt Money Market 1 95.3%
</TABLE>
24
