<PAGE>
Semi-Annual Report
June 30, 1995
----------------------------------------
Provident Mutual Life
Insurance Company
Provident Mutual
Variable Annuity
Separate Account
Market Street Fund, Inc.
Variable Annuity Contracts
----------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
To Our Variable Annuity Contractowners:
- --------------------------------------------------------------------------------
August 21, 1995
As an owner of a Provident Mutual variable annuity contract, we are pleased
to send you the Semi-Annual Report for the Separate Account and its subaccounts
for our variable annuity contracts.
The VIP variable annuity contract has six subaccounts investing in Market
Street Fund, Inc. portfolios and provides you with a flexible annuity savings
and income program which will be able to serve your needs for many years. The
VIP/2 variable annuity contract offers additional subaccounts investing in
portfolios managed by such prestigious fund managers as Fidelity Management &
Research Company, Scudder, Stevens & Clark, Inc., Quest for Value Advisors and
the Dreyfus Corporation.
Thank you for your confidence in Provident Mutual and your variable annuity
contract. Provident Mutual has continued its role as a leader in the variable
insurance products marketplace. We are very pleased with this result and are
glad that you are a part of our success.
Attached to the Separate Account Semi-Annual Report is the Semi-Annual Report
for the Market Street Fund, Inc. Under separate cover, you will be receiving
the Semi-Annual Reports for the other Fund groups underlying the subaccounts to
which you have chosen to allocate your premiums.
We are happy to be of service to you. If you have a question about your
annuity contract, please contact your local agent or call our Annuity Service
Center toll free at 1-800-654-7796.
Sincerely,
/s/ DAVID N. INGRAM
David N. Ingram
<PAGE>
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Assets and Liabilities, June 30, 1995 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY AGGRESSIVE
GROWTH MARKET BOND MANAGED GROWTH INTERNATIONAL
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investment in the Market
Street Fund, Inc., at
market value:
Growth Portfolio....... $575,810
Money Market Portfolio. $847,469
Bond Portfolio......... $150,632
Managed Portfolio...... $319,172
Aggressive Growth
Portfolio............. $227,115
International
Portfolio............. $498,103
Dividends receivable.... 3,732
Receivable from
Provident Mutual Life
Insurance Company...... 62,320
-------- -------- -------- -------- -------- --------
NET ASSETS.............. $575,810 $913,521 $150,632 $319,172 $227,115 $498,103
======== ======== ======== ======== ======== ========
Held for the benefit of
contractowners......... $545,958 $886,951 $124,412 $291,397 $198,728 $469,132
Attributable to
Provident Mutual Life
Insurance Company...... 29,852 26,570 26,220 27,775 28,387 28,971
-------- -------- -------- -------- -------- --------
$575,810 $913,521 $150,632 $319,172 $227,115 $498,103
======== ======== ======== ======== ======== ========
</TABLE>
See accompanying notes to financial statements
1
<PAGE>
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Assets and Liabilities, June 30, 1995 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIDELITY FIDELITY FIDELITY
HIGH EQUITY- FIDELITY ASSET FIDELITY
INCOME INCOME GROWTH MANAGER INDEX 500
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment in the
Variable Insurance
Products Fund, at
market value:
High Income Portfolio.. $474,974
Equity-Income
Portfolio............. $622,098
Growth Portfolio....... $374,022
Investment in the
Variable Insurance
Products Fund II, at
market value:
Asset Manager
Portfolio............. $283,208
Index 500 Portfolio.... $81,734
-------- -------- -------- -------- -------
NET ASSETS.............. $474,974 $622,098 $374,022 $283,208 $81,734
======== ======== ======== ======== =======
Held for the benefit of
contractowners......... $447,327 $593,040 $342,210 $257,481 $51,749
Attributable to
Provident Mutual Life
Insurance Company...... 27,647 29,058 31,812 25,727 29,985
-------- -------- -------- -------- -------
$474,974 $622,098 $374,022 $283,208 $81,734
======== ======== ======== ======== =======
</TABLE>
See accompanying notes to financial statements
2
<PAGE>
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Assets and Liabilities, June 30, 1995 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
QUEST FOR QUEST FOR
QUEST FOR VALUE VALUE SCUDDER DREYFUS ZERO
VALUE EQUITY SMALL CAP MANAGED BOND COUPON 2000
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment in the Quest
for Value Accumulation
Trust, at market value:
Equity Portfolio....... $275,487
Small Cap Portfolio.... $388,158
Managed Portfolio...... $389,860
Investment in the
Scudder Variable Life
Investment Fund, at
market value:
Bond Portfolio......... $71,152
Investment in the
Dreyfus Variable
Investment Fund, at
market value:
Zero Coupon 2000
Portfolio............. $48,577
Receivable from
Provident Mutual Life
Insurance Company...... 1,127
-------- -------- -------- ------- -------
Total Assets............ 275,487 388,158 390,987 71,152 48,577
-------- -------- -------- ------- -------
LIABILITIES
Payable to Provident
Mutual Life Insurance
Company................ 1,127
-------- -------- -------- ------- -------
NET ASSETS.............. $275,487 $387,031 $390,987 $71,152 $48,577
======== ======== ======== ======= =======
Held for the benefit of
contractowners......... $245,059 $360,549 $359,372 $43,429 $20,622
Attributable to
Provident Mutual Life
Insurance Company...... 30,428 26,482 31,615 27,723 27,955
-------- -------- -------- ------- -------
$275,487 $387,031 $390,987 $71,152 $48,577
======== ======== ======== ======= =======
</TABLE>
See accompanying notes to financial statements
3
<PAGE>
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Operations for the Period Ended June 30, 1995 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY AGGRESSIVE
GROWTH MARKET BOND MANAGED GROWTH INTERNATIONAL
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends............... $ 7,752 $11,911 $ 4,469 $ 6,566 $ 1,587
EXPENSES
Mortality and expense
risks.................. 3,157 2,897 753 1,588 $ 765 2,386
------- ------- ------- ------- ------ -------
Net investment income
(loss)................. 4,595 9,014 3,716 4,978 (765) (799)
------- ------- ------- ------- ------ -------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Realized gain
distributions
reinvested............. 35,425 345 966 7,497
Net realized gain (loss)
from redemption of
investment shares...... 1,028 (601) 6,410 1,990 (1,416)
------- ------- ------- ------- ------ -------
Net realized gain (loss)
on investments......... 36,453 (601) 6,755 2,956 6,081
------- ------- ------- ------- ------ -------
Net unrealized
appreciation
(depreciation) of
investments:
Beginning of period.... (473) (3,196) (3,260) 4,363 (6,428)
End of period.......... 32,976 9,897 17,873 10,884 15,216
------- ------- ------- ------- ------ -------
Net unrealized
appreciation during the
period................. 33,449 13,093 21,133 6,521 21,644
------- ------- ------- ------- ------ -------
Net realized and
unrealized gain on
investments............ 69,902 12,492 27,888 9,477 27,725
------- ------- ------- ------- ------ -------
Net increase in net
assets resulting from
operations............. $74,497 $ 9,014 $16,208 $32,866 $8,712 $26,926
======= ======= ======= ======= ====== =======
</TABLE>
See accompanying notes to financial statements
4
<PAGE>
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Operations For the Period Ended June 30, 1995 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIDELITY FIDELITY FIDELITY
HIGH EQUITY- FIDELITY ASSET FIDELITY
INCOME INCOME GROWTH MANAGER INDEX 500
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends............... $ 3,561 $ 5,550 $ 741 $2,298 $ 536
EXPENSES
Mortality and expense
risks.................. 1,032 2,663 1,306 906 114
------- ------- ------- ------ ------
Net investment income
(loss)................. 2,529 2,887 (565) 1,392 422
------- ------- ------- ------ ------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Realized gain
distributions
reinvested............. 18,254 73
Net realized gain (loss)
from redemption of
investment shares...... 8 12 53 (89) 14
------- ------- ------- ------ ------
Net realized gain (loss)
on investments......... 8 18,266 53 (89) 87
------- ------- ------- ------ ------
Net unrealized
appreciation
(depreciation) of
investments:
Beginning of period.... (199) (505) 2,214 (1,913) 61
End of period.......... 12,369 40,975 57,551 6,313 7,086
------- ------- ------- ------ ------
Net unrealized
appreciation during the
period................. 12,568 41,480 55,337 8,226 7,025
------- ------- ------- ------ ------
Net realized and
unrealized gain on
investments............ 12,576 59,746 55,390 8,137 7,112
------- ------- ------- ------ ------
Net increase in net
assets resulting from
operations............. $15,105 $62,633 $54,825 $9,529 $7,534
======= ======= ======= ====== ======
</TABLE>
See accompanying notes to financial statements
5
<PAGE>
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Operations For the Period Ended June 30, 1995 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
QUEST FOR QUEST FOR
QUEST FOR VALUE VALUE SCUDDER DREYFUS ZERO
VALUE EQUITY SMALL CAP MANAGED BOND COUPON 2000
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends............... $ 288 $ 316 $ 553 $1,327 $ 853
EXPENSES
Mortality and expense
risks.................. 737 1,148 945 160 53
------- ------- ------- ------ ------
Net investment income
(loss)................. (449) (832) (392) 1,167 800
------- ------- ------- ------ ------
NET REALIZED AND
UNREALIZED GAIN ON
INVESTMENTS
Realized gain
distributions
reinvested............. 281
Net realized gain from
redemption of
investment shares...... 78 8 190 6 3
------- ------- ------- ------ ------
Net realized gain on
investments............ 78 289 190 6 3
------- ------- ------- ------ ------
Net unrealized
appreciation
(depreciation)
of investments:
Beginning of period.... (210) 2,741 (738) (183) (540)
End of period.......... 26,523 21,130 41,177 3,397 2,617
------- ------- ------- ------ ------
Net unrealized
appreciation during the
period................. 26,733 18,839 41,915 3,580 3,157
------- ------- ------- ------ ------
Net realized and
unrealized gain on
investments............ 26,811 18,678 42,105 3,586 3,160
------- ------- ------- ------ ------
Net increase in net
assets resulting from
operations............. $26,362 $17,846 $41,713 $4,753 $3,960
======= ======= ======= ====== ======
</TABLE>
See accompanying notes to financial statements
6
<PAGE>
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Changes in Net Assets for the Period Ended June 30, 1995
(unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY AGGRESSIVE
GROWTH MARKET BOND MANAGED GROWTH INTERNATIONAL
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income
(loss)................. $ 4,595 $ 9,014 $ 3,716 $ 4,978 $ (765) $ (799)
Net realized gain (loss)
on investments......... 36,453 (601) 6,755 2,956 6,081
Net unrealized
appreciation of
investments during the
period................. 33,449 13,093 21,133 6,521 21,644
-------- ----------- -------- -------- -------- --------
Net increase in net
assets from operations. 74,497 9,014 16,208 32,866 8,712 26,926
-------- ----------- -------- -------- -------- --------
FROM VARIABLE ANNUITY
CONTRACT TRANSACTIONS
Contractowners' net
payments............... 4,203 2,710,638 1,794 7,423 51,190
Administrative charges.. (184) (33) (110) (35) (89)
Surrenders and
forfeitures............ (8,771) (4,381) (4,364) (3,527) (2,264)
Transfers between
investment portfolios.. 38,010 (2,093,868) 2,696 (17,235) 101,662 141,736
-------- ----------- -------- -------- -------- --------
Net increase (decrease)
in net assets derived
from contract
transactions........... 33,258 612,389 2,663 (19,915) 105,523 190,573
-------- ----------- -------- -------- -------- --------
Total increase in net
assets................. 107,755 621,403 18,871 12,951 114,235 217,499
NET ASSETS
Beginning of period.... 468,055 292,118 131,761 306,221 112,880 280,604
-------- ----------- -------- -------- -------- --------
End of period.......... $575,810 $ 913,521 $150,632 $319,172 $227,115 $498,103
======== =========== ======== ======== ======== ========
</TABLE>
See accompanying notes to financial statements
7
<PAGE>
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Changes in Net Assets for the Period Ended June 30, 1995
(unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIDELITY FIDELITY FIDELITY
HIGH EQUITY- FIDELITY ASSET FIDELITY
INCOME INCOME GROWTH MANAGER INDEX 500
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income
(loss)................. $ 2,529 $ 2,887 $ (565) $ 1,392 $ 422
Net realized gain (loss)
on investments......... 8 18,266 53 (89) 87
Net unrealized
appreciation of
investments during the
period................. 12,568 41,480 55,337 8,226 7,025
-------- -------- -------- -------- -------
Net increase in net
assets from operations. 15,105 62,633 54,825 9,529 7,534
-------- -------- -------- -------- -------
FROM VARIABLE ANNUITY
CONTRACT TRANSACTIONS
Contractowners' net
payments............... 13,458 67,144 7,180 34,934 2,375
Administrative charges.. (5) (16) (7) (3) (12)
Surrenders and
forfeitures............ (2,483)
Transfers between
investment portfolios.. 409,852 295,260 208,692 131,318 40,100
-------- -------- -------- -------- -------
Net increase in net
assets derived from
contract transactions.. 423,305 362,388 215,865 163,766 42,463
-------- -------- -------- -------- -------
Total increase in net
assets................. 438,410 425,021 270,690 173,295 49,997
NET ASSETS
Beginning of period.... 36,564 197,077 103,332 109,913 31,737
-------- -------- -------- -------- -------
End of period.......... $474,974 $622,098 $374,022 $283,208 $81,734
======== ======== ======== ======== =======
</TABLE>
See accompanying notes to financial statements
8
<PAGE>
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Changes in Net Assets for the Period Ended June 30, 1995
(unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
QUEST FOR QUEST FOR
QUEST FOR VALUE VALUE SCUDDER DREYFUS ZERO
VALUE EQUITY SMALL CAP MANAGED BOND COUPON 2000
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income
(loss)................. $ (449) $ (832) $ (392) $ 1,167 $ 800
Net realized gain on
investments............ 78 289 190 6 3
Net unrealized
appreciation of
investments during the
period................. 26,733 18,389 41,915 3,580 3,157
-------- -------- -------- ------- -------
Net increase in net
assets from operations. 26,362 17,846 41,713 4,753 3,960
-------- -------- -------- ------- -------
FROM VARIABLE ANNUITY
CONTRACT TRANSACTIONS
Contractowners' net
payments............... 6,709 19,366 17,891 1,100
Administrative charges.. (22) (6) (24) (6)
Surrenders and
forfeitures............ (1,291)
Transfers between
investment portfolios.. 183,140 248,154 253,109 31,915 19,613
-------- -------- -------- ------- -------
Net increase in net
assets derived from
contract transactions.. 189,827 267,514 269,685 33,009 19,613
-------- -------- -------- ------- -------
Total increase in net
assets................. 216,189 285,360 311,398 37,762 23,573
NET ASSETS
Beginning of period.... 59,298 101,671 79,589 33,390 25,004
-------- -------- -------- ------- -------
End of period.......... $275,487 $387,031 $390,987 $71,152 $48,577
======== ======== ======== ======= =======
</TABLE>
See accompanying notes to financial statements
9
<PAGE>
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Changes in Net Assets for the Year Ended December 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY AGGRESSIVE
GROWTH MARKET BOND MANAGED GROWTH INTERNATIONAL
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income
(loss)................. $ 3,327 $ 2,849 $ 2,946 $ 3,726 $ (473) $ (1,222)
Net realized gain (loss)
on investments......... 1,417 (2,743) (2,056) 1,177 2,864
Net unrealized
appreciation
(depreciation) of
investments during the
year................... (510) (2,583) (2,999) 2,817 (8,211)
-------- ----------- -------- -------- -------- --------
Net increase (decrease)
in net assets from
operations............. 4,234 2,849 (2,380) (1,329) 3,521 (6,569)
-------- ----------- -------- -------- -------- --------
FROM VARIABLE ANNUITY
CONTRACT TRANSACTIONS
Contractowners' net
payments............... 7,776 1,952,633 16,865 (2,100) 8,376
Surrenders and
forfeitures............ (3,290) (1,311) (6,507) (48) (2,670)
Transfers between
investment portfolios.. 434,121 (1,688,526) 110,742 272,262 84,961 254,684
-------- ----------- -------- -------- -------- --------
Net increase in net
assets derived from
contract transactions.. 438,607 264,107 109,431 282,620 82,813 260,390
-------- ----------- -------- -------- -------- --------
Total increase in net
assets................ 442,841 266,956 107,051 281,291 86,334 253,821
NET ASSETS
Beginning of year...... 25,214 25,162 24,710 24,930 26,546 26,783
-------- ----------- -------- -------- -------- --------
End of year............ $468,055 $ 292,118 $131,761 $306,221 $112,880 $280,604
======== =========== ======== ======== ======== ========
</TABLE>
See accompanying notes to financial statements
10
<PAGE>
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Changes in Net Assets For the Year Ended December 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIDELITY FIDELITY FIDELITY
HIGH EQUITY- FIDELITY ASSET FIDELITY
INCOME INCOME GROWTH MANAGER INDEX 500
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income
(loss)................. $ (24) $ 583 $ (131) $ (80) $ (12)
Net realized gain (loss)
on investments......... (121) (139) 62 1
Net unrealized
appreciation
(depreciation) of
investments during the
year................... (199) (505) 2,214 (1,913) 61
------- -------- -------- -------- -------
Net increase (decrease)
in net assets from
operations............. (344) (61) 2,145 (1,992) 49
------- -------- -------- -------- -------
FROM VARIABLE ANNUITY
CONTRACT TRANSACTIONS
Contractowners' net
payments............... 200 200 101 40
Transfers between
investment portfolios.. 11,708 171,938 76,086 86,865 6,688
------- -------- -------- -------- -------
Net increase in net
assets derived from
contract transactions.. 11,908 172,138 76,187 86,905 6,688
------- -------- -------- -------- -------
Capital contribution
from Provident Mutual
Life Insurance Company. 25,000 25,000 25,000 25,000 25,000
------- -------- -------- -------- -------
Total increase in net
assets................. 36,564 197,077 103,332 109,913 31,737
NET ASSETS
Beginning of year......
------- -------- -------- -------- -------
End of year............ $36,564 $197,077 $103,332 $109,913 $31,737
======= ======== ======== ======== =======
</TABLE>
See accompanying notes to financial statements
11
<PAGE>
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Changes in Net Assets For the Year Ended December 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
QUEST FOR QUEST FOR
QUEST FOR VALUE VALUE SCUDDER DREYFUS ZERO
VALUE EQUITY SMALL CAP MANAGED BOND COUPON 2000
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income
(loss)................. $ (42) $ (126) $ (66) $ 388 $ 544
Net realized gain (loss)
on investments......... (49) 22 (27)
Net unrealized
appreciation
(depreciation) of
investments during the
year................... (210) 2,741 (738) (183) (540)
------- -------- ------- ------- -------
Net increase (decrease)
in net assets from
operations............. (252) 2,566 (782) 178 4
------- -------- ------- ------- -------
FROM VARIABLE ANNUITY
CONTRACT TRANSACTIONS
Contractowners' net
payments............... 402 403
Transfers between
investment portfolios.. 34,148 74,105 54,968 8,212
------- -------- ------- ------- -------
Net increase in net
assets derived from
contract transactions.. 34,550 74,105 55,371 8,212
------- -------- ------- ------- -------
Capital contribution
from Provident Mutual
Life Insurance Company. 25,000 25,000 25,000 25,000 25,000
------- -------- ------- ------- -------
Total increase in net
assets................. 59,298 101,671 79,589 33,390 25,004
NET ASSETS
Beginning of year......
------- -------- ------- ------- -------
End of year............ $59,298 $101,671 $79,589 $33,390 $25,004
======= ======== ======= ======= =======
</TABLE>
See accompanying notes to financial statements
12
<PAGE>
- -------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited)
- -------------------------------------------------------------------------------
1. ORGANIZATION
The Provident Mutual Variable Annuity Separate Account (Separate Account) was
established on October 19, 1992 by Provident Mutual Life Insurance Company
(Provident Mutual) under the provisions of Pennsylvania law. The Separate
Account is an investment account to which net proceeds from individual
flexible premium deferred variable annuity contracts (the Contracts) are
allocated until maturity or termination of the Contracts.
Provident Mutual has structured the Separate Account into unit investment
trust form registered with the Securities and Exchange Commission under the
Investment Company Act of 1940, as amended. The Separate Account is comprised
of sixteen Subaccounts: the Growth, Money Market, Bond, Managed, Aggressive
Growth and International Subaccounts invest in the corresponding portfolios of
the Market Street Fund, Inc.; the Fidelity High Income, Fidelity Equity-Income
and Fidelity Growth Subaccounts invest in the corresponding portfolios of the
Variable Insurance Products Fund; the Fidelity Asset Manager and Fidelity
Index 500 Subaccounts invest in the corresponding portfolios of the Variable
Insurance Products Fund II; the Quest for Value Equity, Quest for Value Small
Cap and Quest for Value Managed Subaccounts invest in the corresponding
portfolios of the Quest for Value Accumulation Trust; the Scudder Bond
Subaccount invests in the Bond Portfolio of the Scudder Variable Life
Investment Fund; and the Dreyfus Zero Coupon 2000 Subaccount invests in the
Zero Coupon 2000 Portfolio of the Dreyfus Variable Investment Fund.
The Growth, Money Market, Bond, Managed, Aggressive Growth and International
Subaccounts are available to owners of a Market Street VIP contract. All
sixteen Subaccounts are available to owners of a Market Street VIP/2 contract.
Net premiums from the Contracts are allocated to the Subaccounts in accordance
with contractowner instructions and are recorded as variable annuity contract
transactions in the statements of changes in net assets. Such amounts are used
to provide money to pay contract values under the Contracts (Note 4). The
Separate Account's assets are the property of Provident Mutual.
Transfers among investment portfolios include transfers between the
Subaccounts and the Guaranteed Account (not shown), which is part of Provident
Mutual's General Account.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies followed by
the Separate Account in the financial statements.
Investment Valuation:
Investment shares are valued at the net asset values of the respective
Portfolios. Transactions are recorded on the trade date. Dividend income is
recorded on the ex-dividend date.
13
<PAGE>
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited) -- continued
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
Realized Gains and Losses:
Realized gains and losses on sales of investment shares are determined using
the specific identification basis for financial reporting and income tax
purposes.
Federal Income Taxes:
The operations of the Separate Account are included in the Federal income tax
return of Provident Mutual. Under the provisions of the Contracts, Provident
Mutual has the right to charge the Separate Account for Federal income tax
attributable to the Separate Account. No charge is currently being made against
the Separate Account for such tax.
3. INVESTMENTS
At June 30, 1995, the investments of the respective Subaccounts are as follows:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES COST MARKET VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Market Street Fund, Inc.:
Growth Portfolio................................. 38,775 $542,834 $575,810
Money Market Portfolio........................... 847,469 $847,469 $847,469
Bond Portfolio................................... 14,171 $140,735 $150,632
Managed Portfolio................................ 24,290 $301,299 $319,172
Aggressive Growth Portfolio...................... 13,908 $216,231 $227,115
International Portfolio.......................... 41,165 $482,887 $498,103
Variable Insurance Products Fund:
High Income Portfolio............................ 42,446 $462,605 $474,974
Equity-Income Portfolio.......................... 36,832 $581,123 $622,098
Growth Portfolio................................. 14,008 $316,471 $374,022
Variable Insurance Products Fund II:
Asset Manager Portfolio.......................... 19,763 $276,895 $283,208
Index 500 Portfolio.............................. 1,234 $74,648 $81,734
Quest for Value Accumulation Trust:
Equity Portfolio................................. 12,370 $248,964 $275,487
Small Cap Portfolio.............................. 21,211 $367,028 $388,158
Managed Portfolio................................ 14,515 $348,683 $389,860
Scudder Variable Life Investment Fund:
Bond Portfolio................................... 10,267 $67,755 $71,152
Dreyfus Variable Investment Fund:
Zero Coupon 2000 Portfolio....................... 3,908 $45,960 $48,577
</TABLE>
14
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK.]
15
<PAGE>
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited) -- continued
- --------------------------------------------------------------------------------
3. INVESTMENTS, CONTINUED
During the six months ended June 30, 1995 and the year ended December 31, 1994,
transactions in investment shares were as follows:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET STREET FUND, INC.
- ------------------------------------------------------------------------------------------
GROWTH PORTFOLIO MONEY MARKET PORTFOLIO BOND PORTFOLIO
- ------------------------------------------------------------------------------------------
1995 1994 1995 1994 1995 1994
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares purchased........ 8,236 39,805 2,440,783 1,710,083 889 12,751
Shares received from
reinvestment of:
Dividends.............. 576 418 9,244 2,816 457 349
Capital gain
distributions......... 2,735 1 56
-------- -------- ----------- ----------- ------- --------
Total shares acquired... 11,547 40,224 2,450,027 1,712,899 1,346 13,156
Total shares redeemed... (6,223) (8,562) (1,751,517) (1,589,046) (721) (1,814)
-------- -------- ----------- ----------- ------- --------
Net increase in shares
owned.................. 5,324 31,662 698,510 123,853 625 11,342
Shares owned, beginning
of period.............. 33,451 1,789 148,959 25,106 13,546 2,204
-------- -------- ----------- ----------- ------- --------
Shares owned, end of
period................. 38,775 33,451 847,469 148,959 14,171 13,546
======== ======== =========== =========== ======= ========
Cost of shares acquired. $159,296 $562,343 $ 2,450,027 $ 1,712,899 $13,792 $130,514
======== ======== =========== =========== ======= ========
Cost of shares redeemed. $ 85,246 $118,736 $ 1,751,517 $ 1,589,046 $ 8,053 $ 20,841
======== ======== =========== =========== ======= ========
</TABLE>
16
<PAGE>
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited) -- continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET STREET FUND, INC.
- -------------------------------------------------------------------------------------
AGGRESSIVE GROWTH INTERNATIONAL
MANAGED PORTFOLIO PORTFOLIO PORTFOLIO
- -------------------------------------------------------------------------------------
1995 1994 1995 1994 1995 1994
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares purchased........ 9,228 27,114 7,694 8,622 21,753 32,119
Shares received from
reinvestment of:
Dividends.............. 545 446 142 7
Capital gain
distributions......... 29 90 64 672 46
-------- -------- -------- -------- -------- --------
Total shares acquired... 9,802 27,650 7,758 8,622 22,567 32,172
Total shares redeemed... (11,161) (3,880) (1,162) (3,028) (5,542) (10,288)
-------- -------- -------- -------- -------- --------
Net increase (decrease)
in shares owned........ (1,359) 23,770 6,596 5,594 17,025 21,884
Shares owned, beginning
of period.............. 25,649 1,879 7,312 1,718 24,140 2,256
-------- -------- -------- -------- -------- --------
Shares owned, end of
period................. 24,290 25,649 13,908 7,312 41,165 24,140
======== ======== ======== ======== ======== ========
Cost of shares acquired. $126,097 $333,840 $124,232 $128,628 $260,612 $381,808
======== ======== ======== ======== ======== ========
Cost of shares redeemed. $134,304 $ 49,525 $ 16,606 $ 45,023 $ 64,900 $119,633
======== ======== ======== ======== ======== ========
</TABLE>
17
<PAGE>
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited) -- continued
- --------------------------------------------------------------------------------
3. INVESTMENTS, CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VARIABLE INSURANCE PRODUCTS FUND
- ------------------------------------------------------------------------------------
HIGH INCOME EQUITY-INCOME GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
- ------------------------------------------------------------------------------------
1995 1994 1995 1994 1995 1994
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares purchased........ 38,751 3,865 23,100 13,124 9,240 4,858
Shares received from
reinvestment of:
Dividends.............. 351 343 49 34
Capital gain
distributions......... 1,208
-------- ------- -------- -------- -------- --------
Total shares acquired... 39,102 3,865 24,651 13,173 9,274 4,858
Total shares redeemed... (56) (465) (669) (323) (36) (88)
-------- ------- -------- -------- -------- --------
Net increase in shares
owned.................. 39,046 3,400 23,982 12,850 9,238 4,770
Shares owned, beginning
of period.............. 3,400 12,850 4,770
-------- ------- -------- -------- -------- --------
Shares owned, end of
period................. 42,446 3,400 36,832 12,850 14,008 4,770
======== ======= ======== ======== ======== ========
Cost of shares acquired. $426,427 $41,846 $393,788 $202,796 $215,976 $103,111
======== ======= ======== ======== ======== ========
Cost of shares redeemed. $ 609 $ 5,059 $ 10,422 $ 5,039 $ 754 $ 1,862
======== ======= ======== ======== ======== ========
</TABLE>
18
<PAGE>
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited) -- continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VARIABLE INSURANCE PRODUCTS FUND II
- -------------------------------------------------------------------------------
ASSET MANAGER INDEX 500
PORTFOLIO PORTFOLIO
- -------------------------------------------------------------------------------
1995 1994 1995 1994
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares purchased................. 12,112 8,109 661 565
Shares received from reinvestment
of:
Dividends....................... 170 9
Capital gain distributions...... 1
-------- -------- ------- -------
Total shares acquired............ 12,282 8,109 671 565
Total shares redeemed............ (495) (133) (2)
-------- -------- ------- -------
Net increase in shares owned..... 11,787 7,976 669 565
Shares owned, beginning of
period.......................... 7,976 565
-------- -------- ------- -------
Shares owned, end of period...... 19,763 7,976 1,234 565
======== ======== ======= =======
Cost of shares acquired.......... $172,036 $113,801 $43,080 $31,688
======== ======== ======= =======
Cost of shares redeemed.......... $ 7,047 $ 1,895 $ 120
======== ======== ======= =======
</TABLE>
19
<PAGE>
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited) -- continued
- --------------------------------------------------------------------------------
3. INVESTMENTS, CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
QUEST FOR VALUE ACCUMULATION TRUST
- ----------------------------------------------------------------------------------
EQUITY SMALL CAP MANAGED
PORTFOLIO PORTFOLIO PORTFOLIO
- ----------------------------------------------------------------------------------
1995 1994 1995 1994 1995 1994
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares purchased........ 9,112 3,275 15,401 5,968 10,813 3,914
Shares received from
reinvestment of:
Dividends.............. 15 19 24
Capital gain
distributions......... 17
-------- ------- -------- -------- -------- -------
Total shares acquired... 9,127 3,275 15,437 5,968 10,837 3,914
Total shares redeemed... (32) (83) (111) (146) (90)
-------- ------- -------- -------- -------- -------
Net increase in shares
owned.................. 9,095 3,275 15,354 5,857 10,691 3,824
Shares owned, beginning
of period.............. 3,275 5,857 3,824
-------- ------- -------- -------- -------- -------
Shares owned, end of
period................. 12,370 3,275 21,211 5,857 14,515 3,824
======== ======= ======== ======== ======== =======
Cost of shares acquired. $189,987 $59,550 $269,431 $100,991 $271,399 $82,304
======== ======= ======== ======== ======== =======
Cost of shares redeemed. $ 573 $ 1,459 $ 1,935 $ 3,109 $ 1,911
======== ======= ======== ======== ======== =======
</TABLE>
20
<PAGE>
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited) -- continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SCUDDER VARIABLE LIFE DREYFUS VARIABLE
INVESTMENT FUND INVESTMENT FUND
- --------------------------------------------------------------------------------
ZERO COUPON
BOND PORTFOLIO 2000 PORTFOLIO
- --------------------------------------------------------------------------------
1995 1994 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares purchased.................... 4,936 5,289 1,646 2,149
Shares received from reinvestment of
dividends.......................... 202 62 71 46
---------- ---------- -------- --------
Total shares acquired............... 5,138 5,351 1,717 2,195
Total shares redeemed............... (26) (196) (4)
---------- ---------- -------- --------
Net increase in shares owned........ 5,112 5,155 1,713 2,195
Shares owned, beginning of period... 5,155 2,195
---------- ---------- -------- --------
Shares owned, end of period......... 10,267 5,155 3,908 2,195
========== ========== ======== ========
Cost of shares acquired............. $ 34,339 $ 34,872 $ 20,465 $ 25,544
========== ========== ======== ========
Cost of shares redeemed............. $ 170 $ 1,286 $ 49
========== ========== ======== ========
</TABLE>
21
<PAGE>
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited) -- concluded
- --------------------------------------------------------------------------------
4. RELATED PARTY TRANSACTIONS
Certain deductions are made from the Subaccounts and/or the premiums by
Provident Mutual. The deductions may include (1) surrender charges, (2)
administration fees, (3) transfer processing fees, (4) mortality and expense
risk charges and (5) premium taxes.
There are no sales expenses deducted from premiums at the time the premiums are
paid. If a contract has not been in force for six full years, upon surrender or
for certain withdrawals, a surrender charge is deducted from the proceeds.
However, subject to certain restrictions, up to 10% of the contract account
value as of the beginning of a contract year may be surrendered or withdrawn
free of surrender charges.
An annual administrative fee of $30 is deducted from the contract account value
on each contract anniversary date beginning one year from the issue date of the
contract. In addition, to compensate for costs associated with administration
of the Market Street VIP/2 contracts, Provident Mutual deducts a daily asset-
based administration charge from the assets of the Separate Account equal to an
annual rate of .15%. This daily asset-based administration charge is reported
in the mortality and expense risk charges in the statements of operations.
During any given contract year, the first four transfers by Market Street VIP
contractowners and the first twelve transfers by Market Street VIP/2
contractowners of amounts in the Subaccounts are free of charge. A fee of $25
is assessed for each additional transfer. No transfer fees were incurred during
the six months ended June 30, 1995 or the year ended December 31, 1994.
The Separate Account is charged a daily mortality and expense risk charge at an
annual rate of 1.20% for the Market Street VIP contracts and 1.25% for the
Market Street VIP/2 contracts. Provident Mutual reserves the right to increase
this charge for the Market Street VIP contracts, but in no event will it be
greater than 1.25%.
State premium taxes, when applicable, will be deducted depending upon when such
taxes are paid to the taxing authority. The premium taxes are deducted either
from premiums as they are received or from the proceeds upon withdrawal from or
surrender of the contract or upon application of the proceeds to a payment
option.
22
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK.]
23
<PAGE>
- -------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Supplementary Information (unaudited)
- -------------------------------------------------------------------------------
The table below shows the net rates of return for the Subaccounts. The net
rate of return is applicable to net assets for a variable annuity contract
whose contract year commences with the beginning date of the year shown and is
not based on the average net assets in the Subaccounts during the year.
The performance for each Subaccount is shown as the net rate of return which
reflects the Subaccounts' investment income and capital gains and losses,
realized or unrealized, less charges against the Subaccounts' assets for the
period shown.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
FIDELITY FIDELITY
MONEY AGGRESSIVE HIGH EQUITY-
GROWTH MARKET BOND MANAGED GROWTH INTERNATIONAL INCOME INCOME
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MARKET STREET VIP
For the six months
ended:
June 30, 1995.......... 15.92% 2.18% 12.27% 12.19% 5.99% 6.91% -- --
For the year ended:
December 31, 1994....... 0.60%(1) 2.45%(2) (6.85)%(1) (2.06)%(3) (2.18)%(1) (3.77)%(1) -- --
MARKET STREET VIP/2
For the six months
ended:
June 30, 1995.......... 15.80% 2.08% 12.16% 12.08% 5.88 6.80% 11.22% 16.33%
For the year ended:
December 31, 1994....... (1.40)%(5) 0.69%(6) 0.68%(7) (0.09)%(8) 0.99%(9) (3.74)%(5) 0.01%(5) (1.73)%(5)
</TABLE>
The net rate of return was calculated from the date contractowner funds were
first allocated to the Subaccount referenced above as follows: (1) February
14, 1994, (2) January 28, 1994, (3) March 10, 1994, (4) March 1, 1995, (5)
October 21, 1994, (6) October 19, 1994, (7) November 22, 1994, (8) November
14, 1994, (9) October 26, 1994, (10) November 29, 1994 and (11) November 15,
1994.
24
<PAGE>
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Supplementary Information (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
FIDELITY QUEST FOR QUEST FOR QUEST FOR
FIDELITY ASSET FIDELITY VALUE VALUE VALUE SCUDDER DREYFUS ZERO
GROWTH MANAGER INDEX 500 EQUITY SMALL CAP MANAGED BOND COUPON 2000
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
22.92% 5.40% 19.20% 22.59% 4.88% 28.81% 9.63% 6.42%(4)
0.94%(5) (3.06)%(9) 1.00%(10) (2.54)%(11) 2.02%(5) (1.73)%(5) 0.84%(9) --
</TABLE>
25
<PAGE>
- -------------------------------------------------------------------------------
To Our Variable Life Policyowners and Variable Annuity Contractowners:
- -------------------------------------------------------------------------------
We are pleased to send you the 1995 Semi-Annual Report for Market Street Fund,
Inc., its Growth, Money Market, Bond, Managed, Aggressive Growth and Interna-
tional Portfolios.
Economic Overview and Investment Perspective
In the 1994 Annual Report for the Market Street Fund I began with the obvi-
ous--that 1994 was a year that most investors would rather forget, with the
average stock down a bit and the average bond down a lot. I also prognosti-
cated a bit:
"Perhaps surprisingly, a breakout of positive performance in both the fixed
income and equity markets will probably have to await compelling signs of a
slowdown in the pace of U.S. economic activity. This will be the price the
Fed will require before it can move back from its policy of constantly in-
creasing interest rates. Such a scenario may hopefully unfold in late 1995
or early 1996."
Guess what? It happened just that way with the economy slowing, inflation re-
maining low, open market interest rates falling, and the Fed putting a coda on
first half economic events with an early July cut in the Fed Funds rate. The
investment markets reacted just as predicted, with total returns over the
first six months of 1995 of 20.1% for the S&P 500 Index, 14.4% for the Russell
2000 Index, 12.6% for the Lehman Aggregate Bond Index and 2.6% for the EAFE
Index.
Yes, I know. I predicted that the recovery in security prices would unfold in
LATE 1995 or early 1996. And it came at least six months early. But, those are
the kinds of errors which can be easily forgiven or even applauded, aren't
they? Particularly so for the patient, long term investor. Once again the
risks of market timing and the rewards of long term, patient investment strat-
egies have been demonstrated.
Review of Fund Portfolio Performance
The Annual Reviews and performance charts* for each Portfolio (other than the
Money Market Portfolio) contained in this Annual Report show the growth of
$10,000 over the period shown assuming reinvestment of all dividends. The per-
formance is then compared to a relevant index. As always, it is important to
recall in interpreting these results that the advisers of the equity portfo-
lios of Market Street Fund do not engage in market timing. That is to say that
in all but times of great market turmoil, they endeavor to keep the vast ma-
jority of portfolio assets invested in common stocks. Thus, they attempt to
add value by stock selection utilizing the methods and in the markets speci-
fied in the Fund Prospectus. Their performance should be judged according to
how well they do relative to market indices measuring the same type of activi-
ty.
We appreciate the opportunity to have served you in the past and look forward
to serving you during the remainder of 1995 and many years into the future.
/s/ STANLEY R. REBER
Stanley R. Reber President The Market Street Fund, Inc.
*Past performance is not predictive of future results. Moreover, the relation-
ship between the performance of the Fund Portfolios and the actual increases
or decreases in a policy's cash value is not directly proportional due to cer-
tain charges deducted from premiums and under the policies which are not re-
flected in the above figures. Please see the current prospectus for an expla-
nation of these charges and for illustrations which take such charges into ac-
count in calculating cash values.
1
<PAGE>
- -------------------------------------------------------------------------------
Market Street Fund, Inc.
The Growth Portfolio
1995 Semi-Annual Review
Newbold's Asset Management, Inc.
- -------------------------------------------------------------------------------
For the first six months of the year, the Market Street Fund Growth Portfo-
lio was up 16.6% compared with 20.1% for the Standard & Poor's 500 Index. The
equity markets continued to embrace the so-called "soft landing" scenario for
the economy during the second quarter of 1995 reflecting hopes for slower but
sustainable economic growth. Returns were robust led by the NASDAQ which in-
creased 14.2%.
In this environment, Newbold's conservatively postured portfolios failed to
keep full pace with the surging market. However, we believe that our perfor-
mance was quite good considering that the shortfall relative to the market av-
erages was largely attributable to the lack of investment in the technology
sector. This high P/E, low yielding sector produced exceptional returns during
the second quarter (S&P Technology +24%) but offered few candidates for our
disciplined low P/E, high yielding investment process. It is important to note
though, that technology's greater than market price earnings ratios bring
greater than market risk. Hence, much of this outperformance could unwind in
the event of a market correction to the advantage of Newbold's portfolios.
Newbold's underweighting in technology is somewhat offset by an
overweighting in utilities and, particularly, the regional and long distance
telephone companies. The utility investment, as a whole, tends to dampen port-
folio volatility in the event of market weakness. The telephone issues specif-
ically, have lagged the market due to regulatory uncertainty, despite very
strong fundamentals.
Finally, Newbold's portfolios reflect an overweighting in consumer cyclical
issues. We continue to believe that cyclicals offer good value given their
modest valuations and believe that, with patience, good returns will be real-
ized over time. In this regard, the improving performance of Goodyear and Ford
during the second quarter was encouraging. The overweighting in these issues
is offset by a comparable underweighting in consumer staples. This sector is
similar to technology, offering few candidates that meet value criteria.
Timothy M. Havens
President
Market Street Fund
Growth Portfolio
[GRAPH APPEARS HERE]
(Plot Points To Come)
Growth Fund
- -------------------------------------------------------------------------------
Average Annual Total Return
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Since
1 Year 5 Year Inception*
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
20.43% 10.46% 12.10%
</TABLE>
2
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Growth Portfolio
Schedule of Investments, June 30, 1995
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENTAGE NUMBER
OF PORTFOLIO OF SHARES VALUE
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK (91.4%)
Aerospace & Defense........................ 4.8%
Boeing Co................................. 37,600 $ 2,354,700
United Technologies Corp.................. 55,500 4,335,937
------------
6,690,637
------------
Automotive & Equipment..................... 5.0%
Ford Motor Co............................. 95,000 2,826,250
General Motors Corp....................... 86,700 4,064,062
------------
6,890,312
------------
Building & Building Supplies............... 1.5%
Masco Corp................................ 75,900 2,049,300
------------
Business Services & Media.................. 2.8%
Dun & Bradstreet Corp..................... 50,700 2,661,750
New York Times Co......................... 51,900 1,219,650
------------
3,881,400
------------
Chemicals & Allied Products................ 3.0%
Dow Chemical Co........................... 54,900 3,945,937
*Great Lakes Chemical Corp................. 4,200 253,050
------------
4,198,987
------------
Diversified................................ 4.4%
Allied-Signal, Inc........................ 6,100 271,450
Hanson Trust Plc ADR...................... 66,200 1,166,775
ITT Corp.................................. 12,200 1,433,500
Tenneco, Inc.............................. 70,400 3,238,400
------------
6,110,125
------------
Drugs & Health Care........................ 6.2%
Baxter International, Inc................. 76,600 2,786,325
Rhone Poulenc SA Sponsored ADR............ 42,300 930,600
U.S. Healthcare, Inc...................... 44,000 1,347,500
Warner Lambert Co......................... 41,400 3,575,925
------------
8,640,350
------------
Electronics................................ 0.9%
General Electric Co....................... 23,300 1,313,538
------------
</TABLE>
3
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Growth Portfolio
Schedule of Investments, June 30, 1995 -- Continued
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENTAGE NUMBER
OF PORTFOLIO OF SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK (CONTINUED)
Finance--Banks.............................. 6.9%
Bankamerica Corp........................... 51,300 $ 2,699,662
Bankers Trust New York Corp................ 23,400 1,450,800
Chase Manhattan Corp....................... 43,500 2,044,500
Fleet Financial Group, Inc................. 55,800 2,071,575
Nations Bank Corp.......................... 23,800 1,276,275
------------
9,542,812
------------
Finance--Insurance.......................... 3.5%
Aetna Life & Casualty Co................... 22,800 1,433,550
Chubb Corp................................. 22,000 1,762,750
Providian Corp............................. 47,400 1,718,250
------------
4,914,550
------------
Finance--Investment & Other................. 1.1%
Federal National Mortgage Association...... 16,300 1,538,313
------------
Foods....................................... 1.1%
*Conagra, Inc.............................. 42,200 1,471,725
------------
Natural Gas................................. 0.9%
TransCanada Pipelines Ltd.................. 89,500 1,197,062
------------
Non-Ferrous Metals & Mining................. 2.4%
Aluminum Co. Of America.................... 65,400 3,278,175
------------
Office Equipment & Supplies................. 0.9%
Pitney Bowes, Inc.......................... 31,500 1,208,813
------------
Oil Equipment & Services.................... 2.0%
Schlumberger Ltd........................... 45,600 2,832,900
------------
Oil & Other Energy Sources.................. 7.6%
Atlantic Richfield Co...................... 38,100 4,181,475
Chevron Corp............................... 64,200 2,993,325
Exxon Corp................................. 27,700 1,956,312
USX Marathon Group......................... 72,500 1,431,874
------------
10,562,986
------------
Paper & Forest Products..................... 4.2%
International Paper Co..................... 46,700 4,004,525
Mead Corp.................................. 31,400 1,864,375
------------
5,868,900
------------
</TABLE>
4
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Growth Portfolio
Schedule of Investments, June 30, 1995 -- Continued
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENTAGE NUMBER
OF PORTFOLIO OF SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK (CONTINUED)
Pollution Control.......................... 1.9%
WMX Technologies, Inc..................... 92,500 $ 2,624,688
------------
Retail Food Chains......................... 1.6%
American Stores Co........................ 78,700 2,213,437
------------
Rubber..................................... 2.8%
Goodyear Tire & Rubber Co................. 93,700 3,865,125
------------
Retail Stores.............................. 6.1%
Dayton-Hudson Corp........................ 9,800 703,150
Penney (J.C.) Co., Inc.................... 23,000 1,104,000
K-Mart Corp............................... 172,900 2,528,662
Limited, Inc.............................. 113,500 2,497,000
May Department Stores Co.................. 41,600 1,731,600
------------
8,564,412
------------
Telecommunications......................... 5.2%
AT&T Corp................................. 42,100 2,236,563
MCI Communications Corp................... 66,200 1,456,400
Sprint Corp............................... 105,000 3,530,625
------------
7,223,588
------------
Tobacco.................................... 2.4%
RJR Nabisco Holdings Corp................. 118,240 3,295,940
------------
Transportation............................. 1.0%
Consolidated Rail Corp.................... 25,400 1,412,875
------------
Utilities--Electric........................ 5.1%
Entergy Corp.............................. 97,300 2,347,363
FPL Group, Inc............................ 36,000 1,390,500
General Public Utilities Corp............. 69,000 2,052,750
Southern Co............................... 56,200 1,257,475
------------
7,048,088
------------
Utilities--Natural Gas..................... 0.9%
Panhandle Eastern Corp.................... 54,300 1,323,563
------------
Utilities--Telephone....................... 5.2%
Bellsouth Corp............................ 13,300 844,550
GTE Corp.................................. 82,100 2,801,663
NYNEX Corp................................ 88,700 3,570,175
------------
7,216,388
------------
TOTAL COMMON STOCK (COST $113,660,665).... 126,978,989
------------
</TABLE>
5
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Growth Portfolio
Schedule of Investments, June 30, 1995 -- Concluded
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OR
PERCENTAGE NUMBER
OF PORTFOLIO OF SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
PREFERRED STOCK (0.5%)
RJR Nabisco Holdings Corp.,
1/10 Convertible Series C, Preferred
(Cost $718,513)......................... 106,400 $ 651,700
------------
SHORT-TERM INVESTMENTS (8.1%)
Cigna Corp., 6.0483%, Due 07/10/95....... $2,000,000 2,000,000
General Electric Capital Corp., 5.9637%,
Due 07/05/95............................ 3,000,000 3,000,000
General Electric Capital Corp., 5.9814%,
Due 07/26/95............................ 1,500,000 1,500,000
General Motors Acceptance Corp., 5.97%,
Due 08/02/95............................ 1,600,000 1,591,509
New England Power Co., 5.95%, Due
07/17/95................................ 1,000,000 997,356
Pennsylvania Power & Light, 6.00%, Due
07/12/95................................ 1,000,000 998,167
Temporary Investment Fund, Inc.--
TempCash................................ 1,226,388 1,226,388
------------
TOTAL SHORT-TERM INVESTMENTS (COST
$11,313,420)............................ 11,313,420
------------
TOTAL INVESTMENTS 100.0% (COST
$125,692,598)........................... $138,944,109
============
</TABLE>
See accompanying notes to financial statements.
* Non-Income Producing
6
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Money Market Portfolio
Schedule of Investments, June 30, 1995
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENTAGE PRINCIPAL
OF PORTFOLIO MATURITY AMOUNT VALUE
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMERCIAL PAPER (97.8%)
Automobiles....................... 4.1%
Daimler Benz, 5.95%.............. 07/07/95 $1,123,000 $ 1,122,072
-----------
Computer Software Services........ 3.6%
Electronic Data Systems Corp.,
5.95%........................... 07/17/95 1,000,000 997,356
-----------
Electronics....................... 3.6%
Siemens Corporation, 5.93%....... 07/12/95 1,000,000 998,187
-----------
Finance........................... 54.5%
Associates Corp. of North Ameri-
ca, 5.9915%..................... 08/02/95 1,100,000 1,100,000
BAT Capital Corp., 5.95%......... 07/21/95 1,100,000 1,096,364
Beneficial Corp., 5.9915%........ 08/11/95 600,000 600,000
CIT Group Holdings, Inc.,
5.9834%......................... 08/09/95 1,000,000 1,000,000
Chevron Oil Finance Co., 5.9027%. 07/10/95 1,000,000 1,000,000
Chrysler Financial Corp.,
5.9846%......................... 07/18/95 1,100,000 1,100,000
Commercial Credit Corp., 5.9764%. 08/04/95 1,200,000 1,200,000
Ford Motor Credit Co., 5.9834%... 07/27/95 1,200,000 1,200,000
General Electric Capital Corp.,
5.9814%......................... 07/26/95 1,100,000 1,100,000
General Motors Acceptance Corp.,
5.98%........................... 08/04/95 1,100,000 1,093,787
Household Finance Corp., 5.9834%. 08/09/95 1,200,000 1,200,000
Norwest Financial Corp., 5.9935%. 08/02/95 1,100,000 1,100,000
Prudential Funding Corp.,
5.9713%......................... 07/20/95 1,200,000 1,200,000
Smith Barney Capital Corp.,
5.95%........................... 07/26/95 1,000,000 995,868
-----------
14,986,019
-----------
Foods............................. 4.3%
Quaker Oats Co., 6.07%........... 07/28/95 1,200,000 1,194,537
-----------
Insurance......................... 4.4%
American General Finance Corp.,
5.9713%......................... 08/09/95 1,200,000 1,200,000
-----------
Oil--Domestic..................... 3.6%
Texaco, Inc., 5.8819%............ 07/19/95 1,000,000 1,000,000
-----------
Retail Merchandising.............. 8.0%
Sears, Roebuck and Company,
6.0065%......................... 08/17/95 1,100,000 1,100,000
Wal-Mart Stores, Inc., 5.95%..... 07/27/95 1,100,000 1,095,273
-----------
2,195,273
-----------
Securities Brokers................ 4.4%
CS First Boston, Inc., 5.97%..... 07/19/95 1,200,000 1,196,418
-----------
</TABLE>
7
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Money Market Portfolio
Schedule of Investments, June 30, 1995 -- Concluded
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OR
PERCENTAGE NUMBER
OF PORTFOLIO MATURITY OF SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMERCIAL PAPER (CONTINUED)
Utilities--Electric............... 7.3%
New England Power Co., 5.95%..... 07/17/95 $1,000,000 $ 997,356
Pennsylvania Power & Light Co.,
6.00%........................... 07/12/95 1,000,000 998,167
-----------
1,995,523
-----------
TOTAL COMMERCIAL PAPER (COST
$26,885,385).................... 26,885,385
-----------
TEMPORARY INVESTMENTS (2.2%)
Temporary Investment Fund, Inc.--
TempCash (Cost $592,111)........ 592,111 592,111
-----------
TOTAL INVESTMENTS (100.0%) (COST
$27,477,496).................... $27,477,496
===========
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
- -------------------------------------------------------------------------------
Market Street Fund, Inc.
The Bond Portfolio
1995 Semi-Annual Review
Sentinel Advisors Company
- -------------------------------------------------------------------------------
The Market Street Fund Bond Portfolio's total return for the first half year
1995 was 12.9%. The Lehman Aggregate Bond Index returned 12.6% for the same
time period. The Lehman Aggregate Bond Index is considered a good proxy for
the fixed income market.
Interest rates as measured by the U.S. Treasury yield curve declined signif-
icantly throughout the first half of 1995. Short rates as measured by the one-
year U.S. Treasury Bill Index declined over 1.6 percentage points from approx-
imately 7.2% to 5.6%. The 30-year U.S. Treasury Bond Index declined almost 1.3
percentage points or from approximately 7.9% to 6.6%. Because longer maturity
securities experience greater price movement for a given change in yields, the
30-year U.S. Treasury Bond Index posted a total return during this period of
20.3%, whereas the one-year U.S. Treasury Bill Index returned 4.3%.
Although the Fund started the year with a relatively short average maturity
of 6.3 years, the average maturity was extended over the period to improve
performance. Cash as a percent of assets was reduced from 10% to 3% and the
exposure to corporate securities was increased from 50% to 80% of assets. Av-
erage quality remained very solid at double "A".
The Fund currently has 16% of assets committed to U.S. Treasury/Agency secu-
rities with an average maturity of 8.5 years. The corporate position (80% of
assets) is a well diversified, high quality portfolio with an average maturity
of 9.5 years. This portfolio should provide a competitive level of income and
performance under current circumstances.
Richard D. Temple
Market Street Fund
Bond Portfolio
[GRAPH APPEARS HERE]
(Plot Points To Come)
Bond Fund
- -------------------------------------------------------------------------------
Average Annual Total Return
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Since
1 Year 5 Year Inception*
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
12.99% 8.34% 7.99%
</TABLE>
9
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Bond Portfolio
Schedule of Investments, June 30, 1995
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENTAGE PRINCIPAL
OF PORTFOLIO MATURITY AMOUNT VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AGENCY OBLIGATIONS
(16.8%)
Federal Home Loan Bank.. 4.1%
Federal Home Loan Bank,
6.835%................ 04/20/99 $500,000 $ 498,860
-----------
Federal Home Loan
Mortgage Corporation... 0.5%
Federal Home Loan
Mortgage Corp., 9.00%. 11/01/16 9,129 9,468
Federal Home Loan
Mortgage Corp., 8.00%. 03/01/17 52,203 52,937
-----------
62,405
-----------
Federal National
Mortgage Association... 12.2%
Federal National
Mortgage Association
Principal Strip
Callable 10/10/96 @
100, 8.04% Coupon If
Not Called............ 10/10/01 925,000 856,004
Federal National
Mortgage Association
Principal Strip
Callable 11/01/96 @
100, 7.99% Coupon If
Not Called............ 11/01/01 680,000 624,308
-----------
1,480,312
-----------
TOTAL AGENCY
OBLIGATIONS (COST
$2,024,581)........... 2,041,577
-----------
CORPORATE BONDS (80.6%)
Captive Finance......... 4.4%
General Motors
Acceptance Corp.,
7.00%................. 09/15/02 525,000 530,250
-----------
Consumer Staples........ 4.3%
American Brands, Inc.,
9.125%................ 03/01/16 500,000 526,875
-----------
Finance................. 4.7%
General Electric
Capital Corp., 8.75%.. 05/21/07 500,000 575,625
-----------
Financial Institutions.. 29.5%
ABN-AMRO Bank NV
Subordinate Notes,
7.25%................. 05/31/05 500,000 509,375
Bankers Trust New York
Corp., 6.00%.......... 10/15/08 600,000 526,500
Banque Paribas
Subordinate Notes,
6.875%................ 03/01/09 500,000 471,250
Chase Manhattan Corp.,
6.75% 08/15/08 500,000 480,625
Chemical Banking Corp.,
7.875%................ 07/15/06 500,000 528,750
PaineWebber Group,
9.25%................. 12/15/01 500,000 545,625
Swedish Export Credit
Corp., 9.875%......... 03/15/38 475,000 533,782
-----------
3,595,907
-----------
Insurance............... 7.9%
Integon Corp., 9.50%... 10/15/01 400,000 427,500
Liberty Mutual
Insurance Co., 8.20%.. 05/04/07 500,000 530,000
-----------
957,500
-----------
Retail Merchandising.... 4.3%
May Department Stores
Co., 9.125%........... 12/01/16 500,000 527,500
-----------
</TABLE>
10
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Bond Portfolio
Schedule of Investments, June 30, 1995 -- Concluded
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OR
PERCENTAGE NUMBER
OF PORTFOLIO MATURITY OF SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CORPORATE BONDS (CONTINUED)
Taxable Municipal.................. 3.6%
Los Angeles County Special
Obligation, 8.42%................ 06/30/03 $400,000 $ 440,000
-----------
Telecommunications................. 4.5%
Comsat Corp. Medium Term Note,
8.05%............................ 12/13/06 500,000 543,125
-----------
Utilities.......................... 17.4%
Consolidated Natural Gas Co.,
8.625%........................... 12/01/11 500,000 530,625
Hydro Quebec Debentures, 8.05%.... 07/07/24 500,000 543,125
Long Island Lighting Co.
Debentures, 9.625%............... 07/01/24 500,000 509,375
Mississippi Power and Light Co.,
8.80%............................ 04/01/05 500,000 534,375
-----------
2,117,500
-----------
TOTAL CORPORATE BONDS (COST
$9,431,002)...................... 9,814,282
-----------
SHORT-TERM INVESTMENTS (2.6%)
Temporary Investment Fund, Inc.--
TempCash (Cost $322,067)......... 322,067 322,067
-----------
TOTAL INVESTMENTS (100.0%) (COST
$11,777,650)..................... $12,177,926
===========
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
- -------------------------------------------------------------------------------
Market Street Fund, Inc.
The Managed Portfolio
1995 Semi-Annual Review
Sentinel Advisors Company
- -------------------------------------------------------------------------------
For the six months ending June 30, 1995, the Market Street Fund Managed
Portfolio had a total return of 12.9%, compared to a return of 12.6% for the
Lehman Aggregate Bond Index and the 20.1% return for the S&P 500 Index.
The first six months of 1995 was a very favorable period for investors as
interest rates declined significantly, resulting in higher bond prices. Stock
prices also rallied strongly, reflecting both lower interest rates and corpo-
rate earnings which exceeded most analysts' expectations. Technology stocks
led the market as companies continued to invest heavily in new technology to
boost productivity. Financial services stocks also performed well.
The Market Street Fund Managed Portfolio began the year with a conservative
investment allocation of 38.7% in stocks, 50.4% in bonds and 10.9% in cash.
This allocation partly reflected the difficult market environment of 1994.
During the six month period, the equity holdings of the fund were steadily in-
creased to 45.7% by the end of June. Bond investments were reduced modestly to
46.2% of investments as interest rates declined, and the Fund's cash position
was reduced to 8.1%. The most significant factor impacting the relative per-
formance of the Managed Portfolio over the six month period was investment al-
location. Funds with the greatest exposure to common stocks generally had the
best returns. Technology stocks were particularly strong during June, and the
Portfolio's underweighting in this sector acted as a drag on portfolio perfor-
mance. The Portfolio's financial stock holdings and longer maturity bonds con-
tributed positively, as they outperformed other sectors of their respective
markets.
Rodney A. Buck, C.F.A
Richard A. Pender, C.F.A
Market Street Fund
Managed Portfolio
[GRAPH APPEARS HERE]
(Plot Points To Come)
Managed Fund
- -------------------------------------------------------------------------------
Average Annual Total Return
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Since
1 Year 5 Year Inception*
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
14.49% 8.50% 8.65%
</TABLE>
12
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Managed Portfolio
Schedule of Investments, June 30, 1995
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENTAGE NUMBER
OF PORTFOLIO OF SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK (44.9%)
Consumer Discretionary....................... 3.6%
Eastman Kodak Corp. ........................ 3,400 $ 206,125
Ford Motor Co. ............................. 7,500 223,125
May Department Stores Co.................... 4,300 178,987
Penney (J.C.) Co., Inc...................... 5,600 268,800
Sears Roebuck and Co........................ 6,000 359,250
-----------
1,236,287
-----------
Consumer Staples............................. 7.2%
American Brands, Inc. ...................... 5,500 218,625
Anheuser-Busch Companies, Inc. ............. 4,000 227,500
Coca-Cola Company........................... 2,500 159,375
CPC International, Inc...................... 4,500 277,875
Donnelley (R.R.) & Sons Co.................. 7,500 270,000
Echlin, Inc................................. 7,100 246,725
Gannett, Inc. .............................. 2,900 157,325
Hannaford Bros. Co.......................... 7,000 199,500
McGraw Hill, Inc............................ 3,000 227,625
Philip Morris Company, Inc.................. 3,500 260,312
Sara Lee Corp............................... 8,000 228,000
-----------
2,472,862
-----------
Energy....................................... 6.7%
Amoco Corp. ................................ 4,300 286,488
Atlantic Richfield Co. ..................... 2,600 285,350
Chevron Corp................................ 5,000 233,125
Exxon Corp.................................. 3,600 254,250
Grace (W.R.) & Co........................... 3,000 184,125
Mobil Corp.................................. 3,000 288,000
Royal Dutch Petroleum Co.................... 2,500 304,688
Schlumberger Ltd............................ 4,000 248,500
Tenneco, Inc................................ 3,800 174,800
-----------
2,259,326
-----------
Financial Institutions....................... 5.6%
American Express Co......................... 6,000 210,750
American General Corp. ..................... 5,600 189,000
American International Group, Inc. ......... 2,250 256,500
Banc One Corp............................... 5,625 181,406
Bank America................................ 4,500 236,812
</TABLE>
13
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Managed Portfolio
Schedule of Investments, June 30, 1995 -- Continued
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENTAGE NUMBER
OF PORTFOLIO OF SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK (CONTINUED)
Citicorp.................................... 5,000 $ 289,375
First Union Corp............................ 5,000 226,250
Morgan (J.P.) & Co., Inc.................... 3,500 245,437
St. Paul Companies, Inc..................... 2,500 123,125
-----------
1,958,655
-----------
Health....................................... 4.3%
Abbott Laboratories......................... 5,500 222,750
American Homes Products Corp................ 3,300 255,338
Columbia Healthcare Corp.................... 6,700 289,775
Johnson & Johnson........................... 3,500 236,688
Pfizer, Inc................................. 2,000 184,750
Warner-Lambert Co........................... 3,000 259,125
-----------
1,448,426
-----------
Materials & Processing....................... 3.1%
Crown Cork & Seal Co., Inc.................. 4,800 240,600
Kimberly-Clark Corp......................... 4,000 239,500
PPG Industries, Inc. ....................... 4,500 193,500
*Sherwin Williams Co........................ 6,200 220,875
Witco Corp. ................................ 5,500 177,375
-----------
1,071,850
-----------
Producer Durables............................ 3.9%
Emerson Electric Co......................... 4,500 321,750
General Electric Co......................... 6,000 338,250
Grainger (W.W.), Inc. ...................... 3,500 205,625
ITT Corp. .................................. 2,200 258,500
Rockwell International Corp................. 5,000 228,750
-----------
1,352,875
-----------
Services..................................... 0.8%
Omnicom Group, Inc.......................... 4,500 272,812
-----------
Technology................................... 2.9%
AMP, Inc.................................... 5,400 228,150
International Business Machines Corp. ...... 2,500 240,000
Minnesota Mining & Manufacturing Co. ....... 4,500 257,625
Motorola, Inc............................... 4,000 268,500
-----------
994,275
-----------
</TABLE>
14
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Managed Portfolio
Schedule of Investments, June 30, 1995 -- Continued
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OR
PERCENTAGE NUMBER
OF PORTFOLIO OF SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK (CONTINUED)
Transportation............................. 1.2%
*Illinois Central Corp. Common Series A... 3,700 $ 127,650
Union Pacific Corp........................ 5,000 276,875
-----------
404,525
-----------
Utilities.................................. 4.9%
AT&T Corp. ............................... 4,500 239,062
British Telecommunications, Plc ADR....... 3,400 213,350
Central & South West Corp................. 4,500 118,125
Enron Corp. .............................. 5,500 193,188
FPL Group, Inc............................ 6,500 251,063
GTE Corp. ................................ 7,300 249,113
Sonat, Inc. .............................. 6,300 192,150
U.S. West, Inc............................ 4,500 187,312
-----------
1,643,363
-----------
TOTAL COMMON STOCK (COST $12,882,553)..... 15,115,256
-----------
PREFERRED STOCK (0.8%)
General Motors Preferred 1/10 Convertible
Class E Series C, $3.25
(Cost $258,532).......................... 4,500 283,500
-----------
U.S. TREASURY NOTES (28.2%)
U.S. Treasury Note, 6.00%, Due 11/30/97... $1,800,000 1,804,662
U.S. Treasury Note, 5.125%, Due 03/31/98.. 1,000,000 980,770
U.S. Treasury Note, 5.125%, Due 04/30/98.. 1,000,000 980,010
U.S. Treasury Note, 7.50%, Due 11/15/01... 4,400,000 4,722,519
U.S. Treasury Note, 6.50%, Due 05/15/05... 1,000,000 1,021,160
-----------
TOTAL U.S. TREASURY NOTES (COST
$9,155,510).............................. 9,509,121
-----------
AGENCY OBLIGATIONS (12.8%)
Federal Home Loan Bank..................... 6.3%
Federal Home Loan Bank Discount Notes,
5.90%, Due 07/06/95...................... 1,000,000 999,180
Federal Home Loan Bank Discount Notes,
5.55%, Due 09/05/95...................... 1,100,000 1,088,126
-----------
2,087,306
-----------
Federal National Mortgage Association...... 6.7%
Federal National Mortgage Association,
8.50%, Due 09/01/07...................... 1,580,616 1,644,282
Federal National Mortgage Association
Principal Strip Callable 10/10/96 @ 100,
8.04% Coupon If Not Called, Due 10/10/01. 380,000 351,656
</TABLE>
15
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Managed Portfolio
Schedule of Investments, June 30, 1995 -- Concluded
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OR
PERCENTAGE NUMBER
OF PORTFOLIO OF SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
AGENCY OBLIGATIONS (CONTINUED)
Federal National Mortgage Association
Principal Strip Callable 11/01/96
@ 100, 7.99% Coupon If Not Called, Due
10/10/01................................. $ 280,000 $ 257,068
-----------
2,253,006
-----------
TOTAL AGENCY OBLIGATIONS (COST
$4,328,020).............................. 4,340,312
-----------
CORPORATE BONDS (11.4%)
Consumer Staples........................... 1.6%
American Brands, 9.125%, Due 03/01/16..... 500,000 526,875
-----------
Finance.................................... 1.7%
General Electric Capital Corp., 8.75%, Due
05/21/07................................. 500,000 575,625
-----------
Financial Institutions..................... 1.5%
PaineWebber Group, 9.25%, Due 12/15/01.... 450,000 491,063
-----------
Retail Merchandising....................... 1.6%
May Department Stores Co., 9.125%, Due
12/01/16................................. 500,000 527,500
-----------
Taxable Municipal.......................... 2.0%
Los Angeles County Special Obligation,
8.42%, Due 06/30/03...................... 600,000 660,000
-----------
Telecommunications......................... 1.6%
Comsat Medium Term Note, 8.05%, Due
12/13/06................................. 500,000 543,125
-----------
Utilities.................................. 1.5%
Long Island Lighting Debentures, 9.625%,
Due 07/01/24............................. 500,000 509,375
-----------
TOTAL CORPORATE BONDS (COST $3,781,789)... 3,833,563
-----------
SHORT-TERM INVESTMENTS (1.9%)
Temporary Investment Fund, Inc.--TempCash
(Cost $656,868).......................... 656,868 656,868
-----------
TOTAL INVESTMENTS 100.0% (COST
$31,063,272)............................. $33,738,620
===========
</TABLE>
See accompanying notes to financial statements.
* Non-Income Producing
16
<PAGE>
- -------------------------------------------------------------------------------
Market Street Fund, Inc.
The Aggressive Growth Portfolio
1995 Semi-Annual Review
Sentinel Advisors Company
- -------------------------------------------------------------------------------
Following good performance last year and a 4.6% gain in this year's first
quarter (matching the Russell 2000, a stock index of small companies), the Ag-
gressive Growth Portfolio lagged the market in the second quarter. Overall,
for the six month period ended June 30, 1995, the Aggressive Growth Portfolio
appreciated by 6.6% versus a 14.4% gain for the Russell 2000.
Much has been said in the financial media regarding the technology sector's
impressive performance year-to-date. In fact, nearly one-third of the small-
cap universe's increase was due to technology stocks alone. Fortunately, the
Portfolio's technology holdings performed well and accounted for a slightly
greater proportion of the Portfolio (at 19.3% of assets) than the Russell
2000. However, it was the second and third best performing sectors through
June 30, financial services and consumer discretionary (retailers, restaurant
chains, etc.), where we lost some ground due to the Portfolio's lower relative
exposure in these two areas. For example, the financial services and consumer
discretionary weightings in the small-cap environment are 17% and 18%, respec-
tively, versus the Aggressive Growth's average weightings of 7% and 15%, re-
spectively. We expect that the Portfolio will generally be underweighted in
the financial services sector because of the rather lackluster earnings growth
expected from regional banks and savings and loans, which comprise the bulk of
the sector's representation. Also, we made a concerted effort during the last
six months to lessen the Portfolio's exposure to companies closely tied to
consumer spending. We were concerned of the impact an economic slowdown would
have on such stocks.
Consequently, the Portfolio is conservatively structured to manage the risks
we see in the current market. We have maintained the Aggressive Growth Portfo-
lio's diversification across ten economic sectors and have divested those
holdings that became overvalued or whose prospects had deteriorated. We are
maintaining a cash reserve in order to take advantage of market weakness. As
always, we continue to scour our small-cap universe for well-run, growing com-
panies which are selling at attractive prices.
Louis E. Conrad II, C.F.A.
Market Street Fund
Aggressive Growth
[GRAPH APPEARS HERE]
(Plot Points To Come)
Aggressive Growth Fund
- -------------------------------------------------------------------------------
Average Annual Total Return
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Since
1 Year 5 Year Inception*
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
15.61% 10.83% 12.82%
</TABLE>
17
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Aggressive Growth Portfolio
Schedule of Investments, June 30, 1995
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENTAGE NUMBER
OF PORTFOLIO OF SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK (69.2%)
Consumer Discretionary....................... 12.4%
*Au Bon Pain, Inc. Class A.................. 24,000 $ 291,000
Harman International Industries, Inc........ 11,500 465,750
*Monro Muffler Brake, Inc................... 22,050 319,725
Oakwood Homes Corp.......................... 10,800 276,750
Pep Boys-Manny Moe & Jack................... 14,500 387,875
*Staples, Inc............................... 2,150 62,081
*Stein Mart, Inc............................ 29,800 402,300
*Strouds, Inc............................... 31,400 188,400
-----------
2,393,881
-----------
Consumer Staples............................. 4.3%
*American Safety Razor Co................... 23,000 270,250
Goodmark Foods, Inc......................... 12,000 192,000
Smart & Final, Inc.......................... 21,700 371,612
-----------
833,862
-----------
Energy....................................... 3.1%
*California Energy Co., Inc................. 24,000 393,000
*McDermott (J. Ray) SA...................... 9,400 207,975
-----------
600,975
-----------
Financial.................................... 6.1%
Duff & Phelps Corp.......................... 25,000 268,750
Duff & Phelps Credit Rating Co.............. 6,000 78,000
*DVI Financial Corporation.................. 17,900 210,325
*Exstar Financial Corp...................... 14,400 46,800
*First Republic Bancorp, Inc................ 6,400 81,600
*Litchfield Financial Corp.................. 6,615 89,303
*World Acceptance Corp...................... 12,100 405,350
-----------
1,180,128
-----------
Health....................................... 12.5%
*Apria Healthcare Group, Inc................ 13,020 367,815
*Genesis Health Ventures.................... 9,300 275,513
*Living Centers of America.................. 16,200 439,425
*Minntech Corp.............................. 4,900 71,050
*Renal Treatment Centers, Inc............... 14,300 352,138
*Res-Care Inc............................... 16,200 271,350
*Sullivan Dental Products, Inc.............. 31,000 263,500
</TABLE>
18
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Aggressive Growth Portfolio
Schedule of Investments, June 30, 1995 -- Continued
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OR
PERCENTAGE NUMBER
OF PORTFOLIO OF SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK (CONTINUED)
*Sunrise Medical, Inc..................... 11,800 $ 367,275
-----------
2,408,066
-----------
Healthcare & Medical Equipment............. 0.9%
*Respironics, Inc......................... 12,100 172,425
-----------
Materials & Processing..................... 3.3%
J & L Specialty Steel, Inc................ 19,200 369,600
Wausau Paper Mills Co..................... 11,660 265,994
-----------
635,594
-----------
Producer Durables.......................... 2.2%
United States Filter Corp................. 22,500 427,500
-----------
Services................................... 2.8%
*Healthcare Services Group................ 35,500 381,625
Olsten Corp............................... 4,800 157,200
-----------
538,825
-----------
Technology................................. 19.3%
*American Power Conversion Corp........... 26,000 594,750
Analysts International Corp............... 16,600 431,600
*California Microwave, Inc................ 14,500 363,406
*Filenet Corp............................. 6,700 270,513
*Kent Electronics Corp.................... 6,400 242,400
*Landmark Graphics Corp................... 14,300 364,650
*Network General Corp..................... 17,000 463,250
*Norand Corp.............................. 11,700 476,773
*VeriFone, Inc............................ 20,000 490,000
-----------
3,697,342
-----------
Transportation............................. 1.3%
Frozen Food Express Industries, Inc....... 26,375 255,508
-----------
Waste Management........................... 1.0%
*Western Waste Industries................. 9,000 181,125
-----------
TOTAL COMMON STOCK (COST $11,880,257)..... 13,325,231
-----------
AGENCY OBLIGATIONS (14.3%)
Federal Farm Credit Bank, 5.92%, Due
07/14/95................................. $ 860,000 858,162
Federal Home Loan Bank, 5.90%, Due
07/12/95................................. 500,000 499,099
</TABLE>
19
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The Aggressive Growth Portfolio
Schedule of Investments, June 30, 1995 -- Concluded
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OR
PERCENTAGE NUMBER
OF PORTFOLIO OF SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
AGENCY OBLIGATIONS (CONTINUED)
Federal Mortgage Corp., 5.86%, Due
07/05/95................................. $1,400,000 $ 1,399,088
-----------
TOTAL AGENCY OBLIGATIONS (COST
$2,756,349).............................. 2,756,349
-----------
SHORT-TERM INVESTMENTS (16.5%)
Chevron Oil Finance Co., 5.95%, Due
07/24/95................................. 1,000,000 996,199
Deere (John) Credit Corp., 5.92%, Due
07/12/95................................. 500,000 499,096
IBM Credit Corp., 5.95%, Due 07/19/95..... 925,000 922,248
Temporary Investment Fund, Inc.--TempCash. 769,987 769,987
-----------
TOTAL SHORT-TERM INVESTMENTS (COST
$3,187,530).............................. 3,187,530
-----------
TOTAL INVESTMENTS 100.0% (COST
$17,824,136)............................. $19,269,110
===========
</TABLE>
See accompanying notes to financial statements.
* Non-income producing.
20
<PAGE>
- -------------------------------------------------------------------------------
Market Street Fund, Inc.
The International Portfolio
1995 Semi-Annual Review
The Boston Company Asset Management, Inc.
- -------------------------------------------------------------------------------
After lagging the index in 1994, active management is again adding value.
For the first six months of the year the Market Street Fund International
Portfolio is up 7.6% compared with a 2.6% return for the EAFE index.
Year-to-date the key factor has been exposure to Japan as the Japanese com-
ponent of the index registered an 8.3% decline while all other major markets
(except Italy and Australia) generated positive returns. European markets were
particularly strong with virtually all major countries showing returns in ex-
cess of 10% (in US Dollars). Currency was the dominant factor as the dollar
depreciated against all major currencies. The dollar's decline for the first
six months of 1995 amounted to 15% versus the Yen, 11% against the Deutsche
Mark and 12% against the Swiss Franc.
For the second quarter, returns of your portfolio exceeded the index by a
wide margin. The EAFE index was up 0.7% while your portfolio generated a 3.7%
return. The Japan effect was even more significant for the second quarter as
Japanese shares closed near their lows of three years ago. For the quarter Ja-
pan was the only component of the index with negative returns of 6%. Our
underweighted position in Japan relative to the index (25% versus 41%) en-
hanced performance. However, stock selection also played a major role as value
stocks outperformed in Japan by a wide margin.
Looking ahead, we believe that your portfolio is well positioned to continue
to outperform the averages. The overall portfolio is well diversified by coun-
try and industry groups. The stocks held currently are value stocks with solid
balance sheets and above average profitability. We are confident that our dis-
ciplined value oriented approach will continue to generate superior returns
with below average volatility.
Sandor Cseh, CFA
Market Street Fund
International Portfolio
[GRAPH APPEARS HERE]
(Plot Points To Come)
International Fund
- -------------------------------------------------------------------------------
Average Annual Total Return
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Since
1 Year Inception*
- ------------------------------------------------------------------------------
<S> <C>
6.82% 7.94%
</TABLE>
21
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The International Portfolio
Schedule of Investments, June 30, 1995
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENTAGE NUMBER
OF PORTFOLIO OF SHARES VALUE
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK AND PREFERRED STOCK (96.6%)
Austria..................................... 1.5%
Creditanstalt PS........................... 1,200 $ 212,778
*E.V.N. Energie Versorgung Niede........... 1,800 251,236
-----------
464,014
-----------
Australia................................... 4.8%
Amcor Ltd.................................. 55,000 405,569
Boral Ltd.................................. 104,386 261,030
*Goodman Fielder........................... 409,902 340,699
Southcorp Holdings......................... 110,000 219,586
Westpac Banking Corp....................... 80,498 291,077
-----------
1,517,961
-----------
Belgium..................................... 0.8%
Electrabel................................. 1,200 253,062
-----------
France...................................... 5.9%
Alcatel Alsthom Cie Generale D'electrisite
SA........................................ 539 48,619
Bongrain................................... 120 71,963
C.S.F. (Thomson-C.S.F.).................... 11,000 247,372
*Chargeurs................................. 1,650 327,445
Danone..................................... 2,200 370,718
Guyenne Et Gascogne SA..................... 1,400 403,304
*Renault................................... 3,000 93,547
Societe Generale........................... 2,600 303,356
-----------
1,866,324
-----------
Germany..................................... 7.1%
Bayer AG................................... 2,000 497,469
Deutsche Bank AG........................... 10,000 485,900
*R.W.E. Deag AG Preferred.................. 1,500 412,581
Siemens AG................................. 650 322,650
Veba AG.................................... 900 353,688
*W.M.F. Wurtt Metal Preferred.............. 900 175,705
-----------
2,247,993
-----------
Hong Kong................................... 2.7%
Cathay Pacific Airlines.................... 140,000 204,498
Cheung Kong Holdings....................... 40,000 198,035
*HSBC Holdings Plc......................... 23,341 299,456
Yue Yuen Industrial........................ 650,000 157,963
-----------
859,952
-----------
</TABLE>
22
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The International Portfolio
Schedule of Investments, June 30, 1995 -- Continued
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENTAGE NUMBER
OF PORTFOLIO OF SHARES VALUE
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK AND PREFERRED STOCK
(CONTINUED)
Italy...................................... 2.0%
*Fiat SPA................................. 50,000 $ 176,183
STET Di Risp.............................. 200,000 442,748
-----------
618,931
-----------
Japan...................................... 25.3%
Chudenko Corp............................. 7,000 277,522
Dai-Tokyo Fire and Marine Insurance....... 52,000 368,142
Daiichi Pharmaceutical Co................. 20,000 292,625
Fuji Photo Film Co........................ 14,000 332,035
Hitachi Koki Co........................... 50,000 441,298
Ito-Yokado Co. Ltd........................ 10,000 527,434
Kao Corp.................................. 35,000 421,239
Kyushu Electric Power Co., Inc............ 7,600 205,357
Mabuchi Motors............................ 9,000 620,177
Mikuni Coca-Cola Bottling Co. Ltd......... 35,000 454,277
Mitsubishi Heavy Industries Ltd........... 80,000 543,717
Murata Manufacturing Co. Ltd.............. 15,000 550,442
Nishimatsu Construction................... 30,000 353,982
Nomura Securities Co. Ltd................. 12,000 209,558
Sekisui House............................. 35,000 433,628
Sumitomo Corp............................. 45,000 409,912
Toshiba Corp.............................. 40,000 253,451
Toyota Motor Corp......................... 18,000 356,814
Ushio, Inc................................ 19,000 216,566
Yamanouchi Pharmaceuticals................ 11,000 247,906
Yamato Transportation..................... 43,000 457,652
-----------
7,973,734
-----------
Netherlands................................ 4.0%
*ABN--AMRO Holding........................ 12,727 491,016
Hollandsche Beton......................... 1,050 180,871
International Nederlanden Group........... 6,409 354,356
Stad Rotterdam............................ 8,295 225,838
-----------
1,252,081
-----------
New Zealand................................ 0.5%
*Air New Zealand.......................... 48,000 139,687
-----------
Portugal................................... 0.5%
*Portucel Industrial...................... 20,000 142,410
-----------
</TABLE>
23
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The International Portfolio
Schedule of Investments, June 30, 1995 -- Continued
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENTAGE NUMBER
OF PORTFOLIO OF SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK AND PREFERRED STOCK (CONTINUED)
Singapore................................... 1.6%
Malaysian International Shipping........... 78,000 $ 217,519
Sime Darby................................. 108,000 299,635
-----------
517,154
-----------
Spain....................................... 1.4%
Iberdrola I................................ 60,000 451,113
-----------
Sweden...................................... 3.2%
AGA B Free................................. 30,000 355,543
*Mo Ocho Domsjo B Free Ordinary............ 5,500 317,956
Pharmacia.................................. 16,000 348,377
-----------
1,021,876
-----------
Switzerland................................. 7.2%
Ciba-Geigy AG.............................. 600 439,774
Magazine Zum Globus........................ 100 72,080
Magazine Zum Globus Participating
Certificates, Zurich...................... 400 281,372
Nestle SA.................................. 300 312,375
Sandoz AG.................................. 500 344,768
Schweizerischer Bankverein................. 1,275 451,759
Zurich Versicherungs....................... 300 376,987
-----------
2,279,115
-----------
United Kingdom.............................. 12.6%
Abbey National Plc......................... 40,000 298,210
Blue Circle Industries Plc................. 75,000 334,530
*Boots Ordinary Plc........................ 70,000 567,586
British Airways............................ 15,000 98,447
*BTR Ordinary Plc.......................... 101,312 514,834
Laird Group Ordinary....................... 80,000 448,589
National Westminster Bank.................. 57,038 496,104
Powergen Plc............................... 65,903 506,545
Scapa Group................................ 85,603 317,050
Severn Trent Water......................... 46,129 398,280
-----------
3,980,175
-----------
</TABLE>
24
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
The International Portfolio
Schedule of Investments, June 30, 1995 -- Concluded
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENTAGE NUMBER
OF PORTFOLIO OF SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK AND PREFERRED STOCK (CONTINUED)
United States............................... 15.5%
Alcatel Alsthom ADR........................ 18,394 $ 333,391
*British Airways Plc....................... 3,000 201,750
British Gas Plc ADR........................ 6,000 276,000
Corporacion Bancaria De Espanol............ 14,000 257,250
Elf Aquitaine.............................. 11,390 424,278
Espirito Santo ADR......................... 9,000 104,625
Hanson Trust Plc ADR....................... 25,000 440,625
Istituto Mobiliare Italiano................ 11,000 203,500
Philips N.V. ADR........................... 12,400 530,100
*Telecom Portugal SA....................... 12,000 228,000
*Repsol ADR................................ 12,000 379,500
Tele Danmark ADR........................... 14,000 392,000
Telefonos De Mexico SA-ADR................. 6,500 192,563
Toyota Motor Corp. ADR..................... 1,500 59,625
Unilever N.V............................... 3,000 390,375
*Volvo-ADR................................. 9,000 172,125
YPF Sociedad Anonima ADR................... 16,000 302,000
-----------
4,887,707
-----------
TOTAL COMMON STOCK AND PREFERRED STOCK
(COST $28,285,499)........................ 30,473,289
-----------
SHORT-TERM INVESTMENTS (3.4%)
Temporary Investment Fund, Inc.--TempCash
(Cost $1,068,151)......................... 1,068,151 1,068,151
-----------
TOTAL INVESTMENTS 100.0% (COST
$29,353,650).............................. $31,541,440
===========
</TABLE>
See accompanying notes to financial statements.
* Non-income producing.
25
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Statements of Assets and Liabilities, June 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY AGGRESSIVE
GROWTH MARKET BOND MANAGED GROWTH INTERNATIONAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at value
(cost $125,692,598,
$27,477,496,
$11,777,650,
$31,063,272,
$17,824,136,
$29,353,650,
respectively) (see
accompanying
schedules)............ $138,944,109 $27,477,496 $12,177,926 $33,738,620 $19,269,110 $31,541,440
Cash................... 1 1 1 -- -- 1,922,207*
Interest receivable.... 23,921 35,112 187,650 158,960 2,931 5,316
Dividends receivable... 334,071 -- -- 34,647 729 147,608
Foreign taxes receiv-
able.................. -- -- -- -- -- 52,916
Receivable from affili-
ated insurance compa-
ny.................... -- 319 -- 199 381 --
Prepaid expenses....... -- -- -- -- -- 2,658
Receivable for invest-
ments sold............ 765,327 -- -- 9,856 189,257 154,766
Receivable for fund
shares sold........... 4,091 -- 10,606 2,308 22,194 10,320
------------ ----------- ----------- ----------- ----------- -----------
Total assets........... 140,071,520 27,512,928 12,376,183 33,944,590 19,484,602 33,837,231
------------ ----------- ----------- ----------- ----------- -----------
LIABILITIES
Accrued expenses....... 190,297 30,673 22,653 46,180 24,914 69,821
Dividend payable....... -- 118,776 -- -- -- --
Payable for investments
purchased............. 486,822 -- -- 1,381,656 135,562 1,432,651
Payable for fund shares
redeemed.............. 39,359 -- 2,531 12,231 -- 8,521
------------ ----------- ----------- ----------- ----------- -----------
Total liabilities...... 716,478 149,449 25,184 1,440,067 160,476 1,510,993
------------ ----------- ----------- ----------- ----------- -----------
Net assets............. $139,355,042 $27,363,479 $12,350,999 $32,504,523 $19,324,126 $32,326,238
============ =========== =========== =========== =========== ===========
Number of shares of
$.01 par value common
stock, issued and
outstanding........... 9,385,680 27,363,479 1,162,244 2,474,648 1,183,226 2,672,126
============ =========== =========== =========== =========== ===========
Net asset value,
offering and
redemption price per
share................. $14.85 $1.00 $10.63 $13.14 $16.33 $12.10
============ =========== =========== =========== =========== ===========
</TABLE>
* Includes foreign currency with a cost of $1,908,311 and a value of
$1,922,207.
See accompanying notes to financial statements.
26
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Statements of Operations for the Six Months Ended June 30, 1995
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE
GROWTH MONEY MARKET BOND MANAGED GROWTH INTERNATIONAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 2,144,581 $ -- $ -- $ 206,974 $ 29,310 $ 398,811
Interest............... 361,584 729,016 413,303 613,401 96,162 57,331
Less: foreign taxes
withheld.............. (14,524) -- -- (2,626) -- (39,306)
----------- -------- ---------- ---------- ---------- ----------
Total Income........... 2,491,641 729,016 413,303 817,749 125,472 416,836
----------- -------- ---------- ---------- ---------- ----------
EXPENSES:
Investment advisory
fee................... 219,149 30,085 19,517 61,512 42,653 108,140
Administration fee..... 70,992 13,523 6,269 17,320 9,593 31,070
Directors' fee......... 4,733 902 418 1,155 640 1,080
Transfer agent fee..... 3,211 1,214 962 1,346 1,077 1,307
Custodian fee.......... 12,398 4,263 1,758 5,463 4,098 9,975
Legal fees............. 3,944 751 348 962 533 900
Audit fees............. 8,151 1,554 720 1,985 1,101 1,862
Printing............... 38,125 7,262 3,367 9,301 5,152 8,697
Miscellaneous.......... 53,490 4,440 3,729 10,314 4,547 9,651
----------- -------- ---------- ---------- ---------- ----------
414,193 63,994 37,088 109,358 69,394 172,682
Less: expenses
reimbursed by
affiliated insurance
company............... -- (349) -- (200) (397) --
----------- -------- ---------- ---------- ---------- ----------
Total expenses......... 414,193 63,645 37,088 109,158 68,997 172,682
----------- -------- ---------- ---------- ---------- ----------
Net investment income
(loss)................ 2,077,448 665,371 376,215 708,591 56,475 244,154
----------- -------- ---------- ---------- ---------- ----------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVEST-
MENTS AND FOREIGN
CURRENCY TRANSACTIONS
Net realized gain
(loss)................ 2,696,267 -- 157,294 393,655 1,098,512 349,927
----------- -------- ---------- ---------- ---------- ----------
Change in net
unrealized
appreciation
(depreciation) from:
Investments........... 14,716,839 -- 833,350 2,621,360 (68,559) 1,493,129
Foreign currency
related translations. -- -- -- -- -- 76,912
----------- -------- ---------- ---------- ---------- ----------
14,716,839 -- 833,350 2,621,360 (68,559) 1,570,041
----------- -------- ---------- ---------- ---------- ----------
Net gain (loss) on
investments and
foreign currency
transactions.......... 17,413,106 -- 990,644 3,015,015 1,029,953 1,919,968
----------- -------- ---------- ---------- ---------- ----------
Net increase (decrease)
in net asset resulting
from operations....... $19,490,554 $665,371 $1,366,859 $3,723,606 $1,086,428 $2,164,122
=========== ======== ========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
27
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Statements of Changes in Net Assets for the Six Months Ended June 30, 1995
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE
GROWTH MONEY MARKET BOND MANAGED GROWTH INTERNATIONAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income.. $ 2,077,448 $ 665,371 $ 376,215 $ 708,591 $ 56,475 $ 244,154
Net realized gain
(loss) on sale of
investments........... 2,696,267 -- 157,294 393,655 1,098,512 349,927
Net unrealized
appreciation
(depreciation) on
investments and
foreign currency
translations.......... 14,716,839 -- 833,350 2,621,360 (68,559) 1,570,041
------------ ----------- ----------- ----------- ----------- -----------
Net increase (decrease)
in
net assets resulting
from operations....... 19,490,554 665,371 1,366,859 3,723,606 1,086,428 2,164,122
Distributions:
From net realized
gains................. (8,715,516) -- -- (33,117) (131,841) (699,972)
From net investment
income................ (1,971,188) (665,371) (352,842) (725,075) -- (148,141)
Capital Share
Transactions:
Net contributions from
affiliated life
insurance companies... 15,360,205 6,323,922 1,239,348 175,905 2,939,896 4,798,368
------------ ----------- ----------- ----------- ----------- -----------
Total increase in net
assets............... 24,164,055 6,323,922 2,253,365 3,141,319 3,894,483 6,114,377
NET ASSETS
Beginning of period.... 115,190,987 21,039,557 10,097,634 29,363,204 15,429,643 26,211,861
------------ ----------- ----------- ----------- ----------- -----------
End of period
(including
undistributed net
investment income in
the Growth Portfolio
of $1,069,402; Bond
Portfolio $191,373;
Managed Portfolio
$353,593; Aggressive
Portfolio $56,475 and
International
Portfolio $321,012)... $139,355,042 $27,363,479 $12,350,999 $32,504,523 $19,324,126 $32,326,238
============ =========== =========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
28
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Statements of Changes in Net Assets for the Year Ended December 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE
GROWTH MONEY MARKET BOND MANAGED GROWTH INTERNATIONAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income.. $ 3,450,005 $ 618,397 $ 596,527 $ 1,255,185 $ (12,513) $ 153,148
Net realized gain
(loss) on sale of
investments........... 8,710,006 -- (552,026) 33,117 200,840 699,972
Net unrealized
appreciation
(depreciation) on
investments and
foreign currency
translations.......... (9,654,782) -- (622,045) (1,801,984) (43,061) (1,112,364)
------------ ----------- ----------- ----------- ----------- -----------
Net increase (decrease)
in
net assets resulting
from operations....... 2,505,229 618,397 (577,544) (513,682) 145,266 (259,244)
Distributions:
From net realized
gains................. (79,165) -- (246,014) (1,318,716) -- (39,209)
From net investment
income................ (3,183,250) (618,397) (561,072) (1,136,418) -- (273,923)
Capital Share
Transactions:
Net contributions from
affiliated life
insurance companies... 6,414,227 8,533,612 1,322,599 3,348,235 3,061,801 13,102,202
------------ ----------- ----------- ----------- ----------- -----------
Total increase in net
assets............... 5,657,041 8,553,612 (62,031) 379,419 3,207,067 12,529,826
NET ASSETS
Beginning of period.... 109,533,946 12,505,945 10,159,665 28,983,785 12,222,576 13,682,035
------------ ----------- ----------- ----------- ----------- -----------
End of period
(including
undistributed net
investment income in
the Growth Portfolio
of $963,142; Bond
Portfolio $168,000;
Managed Portfolio
$370,077 and
International
Portfolio $148,141)... $115,190,987 $21,039,557 $10,097,634 $29,363,204 $15,429,643 $26,211,861
============ =========== =========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
29
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout the periods:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH PORTFOLIO
- --------------------------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90
TO TO TO TO TO TO
06/30/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90
(UNAUDITED)
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 14.00 $ 14.09 $ 13.73 $13.88 $12.08 $13.16
------- ------- ------- ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income... .22 .43 .38 .46 .50 .55
Net realized and
unrealized gain (loss)
on investments......... 1.92 (.10) .94 .17 1.71 (.25)
------- ------- ------- ------ ------ ------
Total from investment
operations............ 2.14 .33 1.32 .63 2.21 .30
------- ------- ------- ------ ------ ------
LESS DISTRIBUTIONS:
Dividends to
shareholders from net
investment income...... (.23) (.41) (.39) (.46) (.41) (.53)
Dividends to
shareholders from net
capital gains.......... (1.06) (.01) (.35) (.32) (.00) (.85)
Dividends to
shareholders in excess
of net investment
income................. -- -- (.22) -- -- --
------- ------- ------- ------ ------ ------
Total distributions.... (1.29) (.42) (.96) (.78) (.41) (1.38)
------- ------- ------- ------ ------ ------
Net asset value, end of
period................. $ 14.85 $ 14.00 $ 14.09 $13.73 $13.88 $12.08
======= ======= ======= ====== ====== ======
Total return........... 16.61%/2/ 2.40% 9.43% 4.74% 18.50% 2.39%
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
period $(000).......... 139,355 115,191 109,534 82,881 55,357 35,658
Ratios of expenses to
average net assets
(annualized)/1/........ .66% .63% .76% .79% .76% .75%
Ratios of net investment
income to average net
assets (annualized).... 3.29% 3.10% 2.86% 3.53% 3.91% 4.27%
Portfolio turnover...... 21% 63% 51% 35% 28% 47%
</TABLE>
- --------------------------------------------------------------------------------
/1/ Annualized expense ratios for the Growth Portfolio before reimbursement of
expenses by affiliated insurance company for the period ended June 30, 1995
and the years ended December 31, 1994, 1993, 1992, 1991 and 1990 were as
follows: 0.66%, 0.67%, 0.76%, 0.82%, 0.98% and 1.01%, respectively.
/2/ Total returns for periods less than one year are not annualized.
See accompanying notes to financial statements.
30
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Financial Highlights -- Continued
- --------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout the periods:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY MARKET
PORTFOLIO
- ------------------------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90
TO TO TO TO TO TO
06/30/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90
(UNAUDITED)
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, begin-
ning of period......... $ 1.00 $ 1.00 $ 1.00 $1.00 $1.00 $1.00
------ ------ ------ ----- ----- -----
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income... .03 .04 .03 .03 .06 .07
------ ------ ------ ----- ----- -----
Total from investment
operations............ .03 .04 .03 .03 .06 .07
LESS DISTRIBUTIONS:
Dividends to sharehold-
ers from net investment
income................. (.03) (.04) (.03) (.03) (.06) (.07)
------ ------ ------ ----- ----- -----
Total Distributions.... (.03) (.04) (.03) (.03) (.06) (.07)
------ ------ ------ ----- ----- -----
Net asset value, end of
period................. $ 1.00 $ 1.00 $ 1.00 $1.00 $1.00 $1.00
====== ====== ====== ===== ===== =====
Total return........... 2.77%/2/ 3.81% 2.59% 3.18% 5.69% 8.00%
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
period $(000).......... 27,363 21,040 12,506 8,138 7,047 5,411
Ratios of expenses to
average net assets
(annualized)/1/........ .52% .55% .65% .65% .53% .50%
Ratios of net investment
income to average net
assets (annualized).... 5.44% 3.86% 2.56% 3.12% 5.49% 7.72%
- ------------------------------------------------------------------------------------
</TABLE>
/1/ Annualized expense ratios for the Money Market Portfolio before
reimbursement of expenses by affiliated insurance company for the period
ended June 30, 1995 and the years ended December 31, 1994, 1993, 1992, 1991
and 1990 were as follows: 0.52%, 0.59%, 0.65%, 0.73%, 0.86% and 0.86%,
respectively.
/2/ Total returns for periods less than one year are not annualized.
See accompanying notes to financial statements.
31
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Financial Highlights -- Continued
- --------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout the periods:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BOND PORTFOLIO
- -------------------------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90
TO TO TO TO TO TO
06/30/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90
(UNAUDITED)
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 9.73 $11.21 $10.73 $10.80 $10.04 $10.09
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income... .33 .62 .60 .64 .77 .79
Net realized and
unrealized gain (loss)
on investments......... .90 (1.23) .48 (.03) .57 (.05)
------ ------ ------ ------ ------ ------
Total from investment
operations............ 1.23 (.61) 1.08 .61 1.34 .74
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends to
shareholders from net
investment income...... (.33) (.60) (.60) (.68) (.58) (.79)
Dividends to
shareholders from net
capital gains.......... (.00) (.27) (.00) (.00) (.00) (.00)
------ ------ ------ ------ ------ ------
Total distributions.... (.33) (.87) (.60) (.68) (.58) (.79)
------ ------ ------ ------ ------ ------
Net asset value, end of
period................. $10.63 $ 9.73 $11.21 $10.73 $10.80 $10.04
====== ====== ====== ====== ====== ======
Total return............ 12.94%/2/ (5.62)% 10.32% 5.95% 13.93% 7.70%
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
period $(000).......... 12,351 10,098 10,160 6,710 4,365 3,711
Ratios of expenses to
average net assets
(annualized)/1/........ .65% .68% .75% .75% .63% .60%
Ratios of net investment
income to average net
assets (annualized).... 6.64% 6.14% 5.53% 6.34% 7.58% 8.00%
Portfolio turnover...... 137% 151% 71% 4% 32% 53%
- -------------------------------------------------------------------------------------
</TABLE>
/1/ Annualized expense ratios for the Bond Portfolio before reimbursement of ex-
penses by affiliated insurance company for the period ended June 30, 1995
and the years ended December 31, 1994, 1993, 1992, 1991 and 1990 were as
follows: 0.65%, 0.70%, 0.75%, 0.81%, 0.93% and 0.96%, respectively.
/2/ Total returns for periods less than one year are not annualized.
See accompanying notes to financial statements.
32
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Financial Highlights -- Continued
- --------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout the periods:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MANAGED
PORTFOLIO
- --------------------------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90
TO TO TO TO TO TO
06/30/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90
(UNAUDITED)
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $11.94 $13.27 $12.25 $11.40 $ 9.81 $11.37
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income... .29 .53 .40 .44 .51 .57
Net realized and
unrealized gain (loss)
on investments......... 1.21 (.77) 1.00 .88 1.47 (1.53)
------ ------ ------ ------ ------ ------
Total from investment
operations............ 1.50 (.24) 1.40 1.32 1.98 (.96)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends to
shareholders from net
investment income...... (.29) (.49) (.38) (.47) (.39) (.57)
Dividends to
shareholders from net
capital gains.......... (.01) (.60) (.00) (.00) (.00) (.03)
------ ------ ------ ------ ------ ------
Total distributions.... (.30) (1.09) (.38) (.47) (.39) (.60)
------ ------ ------ ------ ------ ------
Net asset value, end of
period................. $13.14 $11.94 $13.27 $12.25 $11.40 $ 9.81
====== ====== ====== ====== ====== ======
Total return............ 12.86%/2/ (1.82)% 11.62% 11.96% 20.49% (8.61)%
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
period $(000).......... 32,505 29,363 28,984 15,946 12,564 10,197
Ratios of expenses to
average net assets
(annualized)/1/........ .70% .67% .80% .80% .68% .65%
Ratios of net investment
income to average net
assets (annualized).... 4.53% 4.34% 3.36% 3.88% 4.74% 5.48%
Portfolio turnover...... 60% 75% 89% 32% 51% 47%
- --------------------------------------------------------------------------------------
</TABLE>
/1/ Annualized expense ratios for the Managed Portfolio before reimbursement of
expenses by affiliated insurance company for the period ended June 30, 1995
and the years ended December 31, 1994, 1993, 1992, 1991 and 1990 were as
follows: 0.70%, 0.73%, 0.80%, 0.84%, 0.95% and 0.98%, respectively.
/2/ Total returns for periods less than one year are not annualized.
See accompanying notes to financial statements.
33
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Financial Highlights -- Continued
- --------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout the periods:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE
GROWTH
PORTFOLIO
- ------------------------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90
TO TO TO TO TO TO
06/30/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90
(UNAUDITED)
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $15.45 $15.45 $14.72 $16.68 $10.67 $ 9.87
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income... .06 (.01) (.01) .03 .08 .03
Net realized and
unrealized gain (loss)
on investments......... .95 .01 .77 .38 5.93 1.04
------ ------ ------ ------ ------ ------
Total from investment
operations............ 1.01 .00 .76 .41 6.01 1.07
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends to
shareholders from net
investment income...... (.00) (.00) (.03) (.07) (.00) (.03)
Dividends to
shareholders from net
capital gains.......... (.13) (.00) (.00) (2.30) (.00) (.24)
------ ------ ------ ------ ------ ------
Total distributions.... (.13) (.00) (.03) (2.37) (.00) (.27)
------ ------ ------ ------ ------ ------
Net asset value, end of
period................. $16.33 $15.45 $15.45 $14.72 $16.68 $10.67
====== ====== ====== ====== ====== ======
Total return............ 6.63%/2/ 0.00% 5.20% 2.58% 56.33% 10.77%
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
period $(000).......... 19,324 15,430 12,223 8,029 2,751 772
Ratios of expenses to
average net assets
(annualized)/1/........ .81% .86% .90% .90% .79% .75%
Ratios of net investment
income to average net
assets (annualized).... .66% (.10)% (.07)% .37% .80% .27%
Portfolio turnover...... 31% 60% 60% 18% 95% 27%
- ------------------------------------------------------------------------------------
</TABLE>
/1/ Annualized expense ratios for the Aggressive Growth Portfolio before reim-
bursement of expenses by affiliated insurance company for the period ended
June 30, 1995 and the years ended December 31, 1994, 1993, 1992, 1991 and
1990 were as follows: 0.81%, 0.89%, 0.90%, 1.00%, 1.32% and 2.43%, respec-
tively.
/2/ Total returns for periods less than one year are not annualized.
See accompanying notes to financial statements.
34
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Financial Highlights -- Concluded
- --------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout the periods:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL
PORTFOLIO
- ------------------------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 11/01/91/2/
TO TO TO TO TO
06/30/95 12/31/94 12/31/93 12/31/92 12/31/91
(UNAUDITED)
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $11.63 $11.87 $ 9.00 $ 9.74 $10.00
------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income... .12 .05 .06 .08 .01
Net realized and
unrealized gain (loss)
on investments......... .73 (.02) 3.09 (.81) (.27)
------ ------ ------ ------ ------
Total from investment
operations............ .85 .03 3.15 (.73) (.26)
------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends to
shareholders from net
investment income...... (.07) (.03) (.08) (.00) (.00)
Dividends to
shareholders from net
capital gains.......... (.31) (.24) (.20) (.01) (.00)
------ ------ ------ ------ ------
Total distributions.... (.38) (.27) (.28) (.01) (.00)
------ ------ ------ ------ ------
Net asset value, end of
period................. $12.10 $11.63 $11.87 $ 9.00 $ 9.74
====== ====== ====== ====== ======
Total return............ 7.55 %/3/ .26% 36.11% (7.30)% (2.88)%/3/
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
period $(000).......... 32,326 26,212 13,682 6,727 4,979
Ratios of expenses to
average net assets
(annualized)1.......... 1.20% 1.32% 1.50% 1.50% 1.48%
Ratios of net investment
income to average net
assets (annualized).... 2.23% .72% .68% 1.05% .26%
Portfolio turnover...... 21% 32% 37% 35% 1%
- ------------------------------------------------------------------------------------
</TABLE>
/1/ Annualized expense ratios for the International Portfolio before reimburse-
ment of expenses by affiliated insurance company for the period ended June
30, 1995 and the years ended December 31, 1994, 1993, 1992 and 1991 were as
follows: 1.20%, 1.32%, 1.50%, 2.65% and 3.40%, respectively.
/2/ Commencement of operations.
/3/ Total returns for periods less than one year are not annualized.
See accompanying notes to financial statements.
35
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Notes to Financial Statements, June 30, 1995
(Unaudited)
- --------------------------------------------------------------------------------
1. ORGANIZATION
The Market Street Fund, Inc. (Fund) is registered as an open-end diversified
management company under the Investment Company Act of 1940, as amended. As a
"series" type of mutual fund, the Fund issues separate classes (or series) of
stock currently consisting of the Growth Portfolio, Money Market Portfolio,
Bond Portfolio, Managed Portfolio, Aggressive Growth Portfolio and Interna-
tional Portfolio. The Fund serves as an investment medium for modified premium
and flexible premium adjustable variable life insurance policies and individual
flexible premium deferred variable annuity contracts (Policies) issued by Prov-
ident Mutual Life Insurance Company (PMLIC) and for flexible premium adjustable
variable life insurance policies and individual flexible premium deferred vari-
able annuity contracts issued by Providentmutual Life and Annuity Company of
America (PLACA). The Fund also serves as the investment medium for single pre-
mium and scheduled premium variable life insurance policies which are no longer
being issued.
2. ACCOUNTING POLICIES
Valuation of Investments
Bonds are carried in the accompanying financial statements at market value
based on the last bid price on a national securities exchange or on quoted
prices from a third-party pricing service on the last business day of the peri-
od. Investments in common and preferred stocks which are primarily traded on
recognized U.S. or foreign securities exchanges are valued at the last sale
price on exchanges on the last business day of the period, or, if there was no
sale, at the last bid price on that day. Short-term investments with maturities
of less than 60 days and Money Market Portfolio investments are valued at amor-
tized cost which approximates market.
Investments
Security transactions are accounted for on the trade date. The cost of invest-
ment securities sold is determined by use of the specific identification method
for both financial reporting and income tax purposes. Interest income is re-
corded on the accrual basis; dividend income is recorded on the ex-dividend
date.
Foreign Currency Translations
Foreign currency amounts are translated into U.S. Dollars on the following ba-
ses:
(i) Market value of investment securities, assets, liabilities at the daily
rate of exchange;
(ii) Purchases and sales of investment securities are valued at the rate of
exchange prevailing on the respective dates of such transactions and subse-
quently adjusted to the settlement dates using the daily rate of exchange;
(iii) Income and expenses at the rate of exchange prevailing on the respec-
tive dates of such transactions. Exchange gains or losses are recognized
upon ultimate receipt or disbursement.
Foreign security and currency transactions may involve certain considerations
and risks not typically associated with those of U.S. dollar denominated trans-
actions as a result of, among other factors, the lack of governmental supervi-
sion and regulation of foreign securities markets and the possibility of polit-
ical or economic instability.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
36
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Notes to Financial Statements, June 30, 1995 -- Continued
(Unaudited)
- --------------------------------------------------------------------------------
Dividends to Shareholders
Dividends of investment income of the Money Market Portfolio are declared daily
and paid monthly. The Growth Portfolio, Bond Portfolio and Managed Portfolio
declare and pay dividends of investment income quarterly. The Aggressive Growth
Portfolio and International Porfolio declare and pay dividends of investment
income annually. For all Portfolios, distributions of capital gains are de-
clared and paid annually.
Federal Income Taxes
Each Portfolio of the Fund intends to continue to qualify as a "regulated in-
vestment company" under certain provisions of the Internal Revenue Code. Ac-
cordingly, each Portfolio is not subject to Federal income tax on ordinary in-
come and realized capital gains which it distributes to its shareholders. Each
Portfolio intends to distribute all such income.
3. INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND RELATED PARTY TRANSACTIONS
Investment advisory agreements have been approved, whereby Newbold's Asset Man-
agement, Inc. (NAM) is adviser for the Growth Portfolio, Providentmutual In-
vestment Management Company (PIMC) for the Money Market and International Port-
folios and Sentinel Advisors Company (SAC), a Vermont General Partnership, for
the Bond, Managed, and Aggressive Growth Portfolios. With respect to the Growth
Portfolio, NAM is compensated monthly at an effective annual rate of 0.50% of
the first $20 million of the average daily net assets of the portfolio, 0.40%
of the next $20 million and 0.30% of assets in excess of $40 million. PIMC is
compensated monthly at an effective annual rate of 0.25% of the average daily
net assets of the Money Market Portfolio. With respect to the Bond Portfolio,
SAC is compensated monthly at the effective annual rate of 0.35% of the first
$100 million of the average daily net assets of the portfolio and 0.30% of the
assets in excess of $100 million. With respect to the Managed Portfolio, SAC is
compensated monthly at the effective annual rate of 0.40% of the first $100
million of the average daily net assets of the portfolio and 0.35% of assets in
excess of $100 million. With respect to the Aggressive Growth Portfolio, SAC is
compensated monthly at the effective annual rate of 0.50% of the first $20 mil-
lion of the average daily net assets of the portfolio, 0.40% of the next $20
million and 0.30% of assets in excess of $40 million. PIMC is the adviser for
the International Portfolio and is compensated monthly at an effective annual
rate of 0.75% of the first $500 million of the average daily net assets of the
portfolio and 0.60% of assets in excess of $500 million. Effective July 18,
1994, The Boston Company Asset Management, Inc. ("TBC") became sub-advisor to
the International Portfolio. PIMC's prior sub-investment advisory agreement had
been with Cseh International & Associates, Inc. ("Cseh").
PMLIC has agreed to reimburse the Fund for operating expenses and interest
charges, excluding investment advisory fees. PMLIC agreed to reimburse the
Growth, Money Market, Bond, Managed and Aggressive Growth Portfolios for ex-
penses in excess of an annual rate of 0.40% of the average daily net asset val-
ue. The International Portfolio is reimbursed for such expenses in excess of an
annual rate of 0.75% of the average daily net asset value.
PFPC, Inc. (PFPC) a wholly-owned subsidiary of PNC Bank is the administrator
and maintains the Fund's financial accounts. PNC Bank is the Fund's custodian
and PFPC acts as the Fund's transfer agent. The Companies are not related par-
ties to the Fund.
Citibank, N.A. (Citibank) maintains the International Portfolio's Foreign Cus-
todian Account.
37
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Notes to Financial Statements, June 30, 1995 -- Continued
(Unaudited)
- --------------------------------------------------------------------------------
4. NET ASSETS
At June 30, 1995, the Portfolios' net assets consisted of:
<TABLE>
<CAPTION>
MONEY AGGRESSIVE
GROWTH MARKET BOND MANAGED GROWTH INTERNATIONAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net contribution from
shareholders........... $122,401,773 $27,363,479 $12,154,083 $29,081,927 $16,724,166 $29,453,023
Undistributed net
investment income...... 1,069,402 -- 191,373 353,593 56,474 321,012
Undistributed net
realized gain.......... 2,632,356 -- -- 393,655 1,098,512 349,927
Accumulated loss on
investment
transactions........... -- -- (394,732) -- -- --
Net unrealized
appreciation
(depreciation) on
investments............ 13,251,511 -- 400,275 2,675,348 1,444,974 2,202,276
------------ ----------- ----------- ----------- ----------- -----------
$139,355,042 $27,363,479 $12,350,999 $32,504,523 $19,324,126 $32,326,238
============ =========== =========== =========== =========== ===========
</TABLE>
5. PURCHASES AND SALES OF INVESTMENTS (EXCLUDING SHORT-TERM SECURITIES)
Purchases and proceeds on sales of investments for the portfolios, for the six
months ended June 30, 1995, were as follows:
<TABLE>
<CAPTION>
MONEY AGGRESSIVE
GROWTH MARKET BOND MANAGED GROWTH INTERNATIONAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PURCHASES
U.S. Gov't Obligations.. $ -- $ -- $ 3,434,341 $ 9,183,351 $ -- $ --
Corporate Bonds......... -- -- 13,398,208 5,343,269 -- --
Common Stock............ 31,741,484 -- -- 4,021,901 4,329,835 10,430,802
----------- ------- ----------- ----------- ---------- -----------
Total Purchases......... $31,741,484 $ -- $16,832,549 $18,548,521 $4,329,835 $10,430,802
=========== ======= =========== =========== ========== ===========
SALES
U.S. Gov't Obligations.. $ -- $ -- $ 5,581,176 $11,409,414 $ -- $ --
Corporate Bonds......... -- -- 8,796,399 3,210,930 -- --
Common Stock............ 24,243,689 -- -- 2,083,032 5,567,759 5,523,818
----------- ------- ----------- ----------- ---------- -----------
Total Sales............. $24,243,689 $ -- $14,377,575 $16,703,376 $5,567,759 $ 5,523,818
=========== ======= =========== =========== ========== ===========
</TABLE>
38
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Notes to Financial Statements, June 30, 1995 -- Continued
(Unaudited)
- --------------------------------------------------------------------------------
6. TAX BASIS OF INVESTMENTS
Investment information based on the cost of the securities for Federal income
tax purposes held at June 30, 1995 is as follows:
<TABLE>
<CAPTION>
MONEY AGGRESSIVE
GROWTH MARKET BOND MANAGED GROWTH INTERNATIONAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aggregate gross
unrealized
appreciation.......... $ 15,113,401 $ -- $ 401,830 $ 2,826,337 $ 2,440,009 $ 3,051,840
Aggregate gross
unrealized
depreciation.......... (1,925,801) -- (1,555) (150,989) (995,035) (850,153)
------------ ----------- ----------- ----------- ----------- -----------
Net unrealized
appreciation
(depreciation)........ $ 13,187,600 $ -- $ 400,275 $ 2,675,348 $ 1,444,974 $ 2,201,687
============ =========== =========== =========== =========== ===========
Aggregate cost of
securities for federal
income tax purposes... $125,756,509 $27,477,496 $11,777,650 $31,063,272 $17,824,136 $29,353,650
============ =========== =========== =========== =========== ===========
Capital loss carryover
(available to offset
possible future
capital gains.) The
carryover expires as
follows: Bond
Portfolio--$552,026 in
2002.................. $ -- $ -- $ (552,026) $ -- $ -- $ --
============ =========== =========== =========== =========== ===========
</TABLE>
7. AUTHORIZED CAPITAL STOCK
On June 30, 1995, there were 200 million shares of $0.01 par value capital
stock authorized for the Fund. The shares of capital stock are divided into six
series: Growth Portfolio, Money Market Portfolio, Bond Portfolio, Managed Port-
folio, Aggressive Growth Portfolio and International Portfolio. The Money Mar-
ket Portfolio consists of 10 million shares; each of the other series consists
of 5 million shares.
Transactions in capital stock of Market Street Fund, Inc. for the six months
ended June 30, 1995 were as follows:
<TABLE>
<CAPTION>
MONEY MARKET
GROWTH PORTFOLIO PORTFOLIO BOND PORTFOLIO MANAGED PORTFOLIO
- ----------------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 660,030 $ 9,171,540 23,492,610 $ 23,492,610 145,339 $1,464,612 153,213 $ 1,917,468
Shares redeemed. (323,448) (4,498,039) (17,808,672) (17,808,672) (56,830) (578,106) (200,079) (2,499,755)
Shares
reinvested..... 819,185 10,686,704 639,984 639,984 36,095 352,842 62,741 758,192
--------- ----------- ----------- ------------ ------- ---------- -------- -----------
Net
contributions
from affiliated
insurance
companies...... 1,155,767 $15,360,205 6,323,922 $ 6,323,922 124,604 $1,239,348 15,875 $ 175,905
========= =========== =========== ============ ======= ========== ======== ===========
<CAPTION>
AGGRESSIVE
GROWTH INTERNATIONAL
PORTFOLIO PORTFOLIO
- ---------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold..... 249,239 $ 3,964,389 502,509 $ 5,837,392
Shares redeemed. (73,199) (1,156,334) (160,225) (1,887,137)
Shares
reinvested..... 8,772 131,841 76,064 848,113
-------- ------------ --------- ------------
Net
contributions
from affiliated
insurance
companies...... 184,812 $ 2,939,896 418,348 $ 4,798,368
======== ============ ========= ============
</TABLE>
39
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Notes to Financial Statements, June 30, 1995 -- Continued
(Unaudited)
- --------------------------------------------------------------------------------
7. AUTHORIZED CAPITAL STOCK (CONTINUED)
Transactions in capital stock of Market Street Fund, Inc. for the year ended
December 31, 1994 were as follows:
<TABLE>
<CAPTION>
MONEY MARKET
GROWTH PORTFOLIO PORTFOLIO BOND PORTFOLIO MANAGED PORTFOLIO
- ----------------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 1,491,546 $20,978,587 48,697,173 $48,697,173 384,884 $3,957,726 719,391 $8,834,655
Shares redeemed. (1,272,051) (17,826,775) (40,713,247) (40,713,247) (331,715) (3,442,212) (643,917) (7,941,554)
Shares
reinvested..... 236,046 3,262,415 549,686 549,686 78,517 807,085 198,986 2,455,134
---------- ----------- ----------- ----------- -------- ---------- -------- ----------
Net
contributions
from affiliated
insurance
companies...... 455,541 $ 6,414,227 8,533,612 $ 8,533,612 131,686 $1,322,599 274,460 $3,348,235
========== =========== =========== =========== ======== ========== ======== ==========
<CAPTION>
AGGRESSIVE
GROWTH INTERNATIONAL
PORTFOLIO PORTFOLIO
- ----------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold..... 385,809 $5,787,860 1,457,272 $17,327,844
Shares redeemed. (178,715) (2,726,059) (382,445) (4,538,774)
Shares
reinvested..... -- -- 26,855 313,132
--------- ----------- ---------- ------------
Net
contributions
from affiliated
insurance
companies...... 207,094 $3,061,801 1,101,682 $13,102,202
========= =========== ========== ============
</TABLE>
Shares of the Fund are held by Provident Mutual Life Insurance Company, its
Variable Life and Variable Annuity Separate Accounts and by the Providentmutual
Variable Life and Variable Annuity Separate Accounts. At June 30, 1995, shares
were owned by:
<TABLE>
<CAPTION>
MONEY AGGRESSIVE
GROWTH MARKET BOND MANAGED GROWTH INTERNATIONAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Growth Separate Account. 8,368,180 -- -- -- -- --
Money Market Separate
Account................ -- 15,252,251 -- -- -- --
Bond Separate Account... -- -- 865,831 -- -- --
Managed Separate
Account................ -- -- -- 1,873,831 -- --
Aggressive Growth
Separate Account....... -- -- -- -- 977,060 --
International Separate
Account................ -- -- -- -- -- 1,704,682
Providentmutual Variable
Annuity Separate
Account................ 975,608 11,210,068 279,093 574,409 189,498 923,474
Provident Mutual Life
Variable Annuity
Separate Account....... 38,775 847,469 14,171 24,290 13,908 41,165
Providentmutual Variable
Life Separate Account.. 3,117 53,691 3,149 2,118 2,760 2,805
--------- ---------- --------- --------- --------- ---------
Total................. 9,385,680 27,363,479 1,162,244 2,474,648 1,183,226 2,672,126
========= ========== ========= ========= ========= =========
</TABLE>
40
<PAGE>
- --------------------------------------------------------------------------------
Market Street Fund, Inc.
Notes to Financial Statements, June 30, 1995 -- Concluded
(Unaudited)
- --------------------------------------------------------------------------------
8. PRINCIPAL UNDERWRITER
PML Securities Company serves, without compensation, as the principal under-
writer for sale of the Fund shares to the Accounts. PML Securities Company is
an indirect wholly-owned subsidiary of PMLIC.
9. SUBSEQUENT DIVIDEND
On June 28, 1995 the Board of Directors declared the following net investment
income and capital gain dividends to shareholders of record on July 5, 1995,
ex-dividend date July 7, 1995, payable on July 10, 1995 as follows:
<TABLE>
<CAPTION>
TOTAL PER SHARE
---------------------- ----------------------
NET INVESTMENT CAPITAL NET INVESTMENT CAPITAL
PORTFOLIO INCOME GAIN INCOME GAIN
- ---------------------------------- -------------- ------- -------------- -------
<S> <C> <C> <C> <C>
Growth............................ $1,069,402 $-- $.1140 $--
Bond.............................. 191,373 -- .1646 --
Managed........................... 353,593 -- .1429 --
Aggressive Growth................. -- -- -- --
International..................... -- -- -- --
</TABLE>
41
<PAGE>
[LOGO OF PROVIDENT MUTUAL APPEARS HERE]
SECURITY THROUGH FINANCIAL SERVICES
THE PROVIDENT MUTUAL BUILDING
1600 MARKET STREET
PHILADELPHIA, PA 19103
Variable annuity contracts issued by
Provident Mutual are distributed by PML
Securities Company, Wilmington, DE, a
registered broker-dealer.
This Report has been prepared for
countractowners. It is not authorized for other
distribution unless preceded or
accompanied by an effective prospectus.
Form PM506 6.95
