<PAGE>
Dear Shareholder:
Coming off a record year such as 1995, most mutual funds are touting their
performance. They take out ads with banner headlines announcing 30% equity
returns and higher!
Well, we're very pleased with the results the McM Funds earned for you in 1995,
make no mistake about that. But we've been around enough to know that record
performance years are just that -- records, not the norm. In more than 26 years
in business, we've seen great markets like 1995 and some years we'd frankly like
to forget.
Our investment approach is designed for all types of markets. We know that
one-year performance doesn't win the day for investors with a long-term focus.
And that's who we're in business to serve. Our high quality, risk-control
investment strategy performs well in up markets. And it's designed to weather
the inevitable "storms" that pass through the financial world.
At McM Funds, we're ready for whatever may happen. We're not in the business of
predicting the future, it's our business to prepare for the future, always with
your best interests in mind.
Thank you for your continuing trust in us. We look forward to a prosperous 1996
for all our shareholders.
Sincerely,
/s/ THOMAS A. MORTON
- -------------------
Thomas A. Morton
Chairman
<PAGE>
REVIEW
==============================================================================
"WE BELIEVE 1995 WILL BE A REWARDING YEAR FOR INVESTING IN U.S. SECURITIES."
-MCM FUNDS SEMI-ANNUAL REPORT
FEBRUARY, 1995
At the beginning of 1995, it was difficult to imagine an investment environment
so positive that we would see returns of 36% in stocks and 19% in bonds.
However, as 1995 progressed, interest rates declined 200 basic points (2.0%)
which fueled strong bond performance and, combined with strong corporate
profits, contributed to superior stock market returns.
McM Funds' shareholders enjoyed 1995's strong investment environment.
Average Annual Returns (%)
-----------------------------
One Year Since Inception
1995 7/94
---------- ---------------
Equity Investment ....... 35.94 24.35
Balanced ................ 28.71 19.43
Fixed Income ............ 19.29 12.23
Intermediate Fixed Income 14.95 9.64
Principal Preservation .. 5.73 5.42
Why was 1995 such a great year?
There was a combination of factors that advanced the stock and bond markets.
Inflation remained in control. Interest rates declined. Corporations produced
strong balance sheets and record earnings. The debate in Washington, D.C.
focused on smaller government. All of these factors occurred while the economy
was making the transition to slower growth without falling into recession.
The close of 1995 marked McM Funds' first full calendar year of operations. We
are very proud of our results and are pleased to inform our shareholders that
our disciplined investment approach continues to perform to our expectations.
===============================================================================
<PAGE>
OUTLOOK
===============================================================================
FIXED INCOME MARKET
The yield curve today is very flat. The yield on thirty-year treasury bonds is
only slightly higher than overnight investments. We remain positive on the bond
market but do not expect returns to match 1995's. Accordingly, we have shortened
our risk posture to a "neutral" position that matches the market to protect our
fixed income portfolios from any adverse interest rate movements.
Within a historical context, "real" yields (yield minus inflation) from bonds
remain extremely positive. Investors can achieve bond market yields of 6.5% in a
period where inflation is 2.5% to 3%. If inflation remains low, as we expect,
the bond market will remain attractive.
Continued emphasis is placed on high quality investments. The Fixed Income Fund
and the Intermediate Fixed Income Fund are invested 71% and 68% in government or
AAA securities, respectively.
STOCK MARKET
Lower interest rates, surging corporate profits and the debate in Washington
over the role of government contributed to the significant stock market advance
in 1995. We expect this climate to continue into 1996 in a slower growth
economy. Corporate restructurings and stock buybacks should also continue to
enhance positive stock market performance in 1996.
The stock market could be more volatile in early 1996 if investors adjust their
expectations after such a strong 1995. We should expect downward adjustments if
corporate profits decline, interest rates increase or we experience legislative
gridlock. Even as the market continues to establish new record highs, it is
important to note values in stocks, as measured by the price to earnings ratio,
are not at or near the high levels that have preceded previous stock market
declines.
The McM Funds Balanced Fund and Equity Investment Fund remain highly
diversified, reducing the risk of any one stock held. Emphasis remains in
technology, finance, health care and capital goods offset with lower weightings
in the consumer goods and utilities sectors.
=============================================================================
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1995
- -----------------------------------------------------------------------------
EQUITY INVESTMENT FUND
Shares Value
-------- ---------
COMMON STOCKS - 98.36%
Business Equipment & Service - 1.23%
Automatic Data Processing, Inc. .... 700 $ 51,975
Dun & Bradstreet Corp. ............. 200 12,950
Flightsafety International, Inc. ... 550 27,638
---------
92,563
---------
Capital Goods - 7.86%
Cooper Industries, Inc. ............ 1,400 51,450
Emerson Electric Co. ............... 900 73,575
General Electric Co. ............... 3,050 219,600
Illinois Tool Works, Inc. .......... 500 29,500
Ingersoll Rand Co. ................. 2,000 70,250
PPG Industries, Inc. ............... 1,700 77,775
Tyco International, Ltd. ........... 1,980 70,537
---------
592,687
---------
Consumer Durables - 2.30%
Ford Motor Co. ..................... 3,050 88,450
General Motors Co. ................. 1,600 84,600
---------
173,050
---------
Consumer Non-Durables - 8.84%
Anheuser Busch Cos., Inc. .......... 900 60,187
CPC International, Inc. ............ 1,050 72,056
Darden Restaurants, Inc. ........... 100 1,187
Eastman Kodak Co. .................. 950 63,650
General Mills, Inc. ................ 300 17,325
Pepsico, Inc. ...................... 2,150 120,131
Philip Morris Cos., Inc. ........... 2,125 192,313
Procter & Gamble Co. ............... 800 66,400
Sara Lee Corp. ..................... 2,300 73,312
---------
666,561
---------
Consumer Services - 2.56%
Walt Disney Co. .................... 800 47,200
Hilton Hotels Corp. ................ 700 43,050
Knight Ridder, Inc. ................ 800 50,000
Time Warner, Inc. .................. 1,400 53,025
---------
193,275
---------
Energy - 10.82%
Amerada Hess Corp. ................. 900 47,700
Amoco Corp. ........................ 1,300 93,438
Atlantic Richfield Co. ............. 200 22,150
Baker Hughes, Inc. ................. 1,700 41,438
British Petroleum PLC .............. 601 61,377
Burlington Resources, Inc. ......... 1,000 39,250
Chevron Corp. ...................... 1,620 85,050
Exxon Corp. ........................ 1,300 104,162
Mobil Corp. ........................ 700 78,400
Royal Dutch Petroleum Co. .......... 450 63,506
Schlumberger, Ltd. ................. 450 31,163
Texaco, Inc. ....................... 1,300 102,050
Unocal Corp. ....................... 900 26,213
Valero Energy Corp. ................ 800 19,600
---------
815,497
---------
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1995
- -----------------------------------------------------------------------------
EQUITY INVESTMENT FUND (CONTINUED)
Shares Value
-------- -----------
COMMON STOCKS - (continued)
Financial Services - 14.14%
American International Group, Inc. .... 900 $ 83,250
BankAmerica Corp. ..................... 1,912 123,802
Bankers Trust Corp. ................... 200 13,300
Chase Manhattan Corp. ................. 1,730 104,881
Chemical Banking Corp. ................ 1,600 94,000
Chubb Corp. ........................... 740 71,595
Citicorp .............................. 1,800 121,050
Federal National Mortgage Assn. ....... 1,800 223,425
First Bank System, Inc. ............... 1,700 84,362
General RE Corp. ...................... 450 69,750
Morgan (JP) & Co., Inc. ............... 950 76,238
-----------
1,065,653
-----------
Health Care - 10.81%
Alza Corp. Cl. A ...................... 1,000 24,750
Bausch & Lomb, Inc. ................... 700 27,737
Baxter International, Inc. ............ 1,800 75,375
Bristol-Myers Squibb Co. .............. 1,300 111,637
Columbia/HCA Healthcare Corp. ......... 800 40,600
Johnson & Johnson ..................... 800 68,500
Lilly Eli & Co. ....................... 1,560 87,750
Merck & Co., Inc. ..................... 2,060 135,445
Schering Plough Corp. ................. 2,100 114,975
St. Jude Medical, Inc. ................ 600 25,800
United Healthcare Corp. ............... 600 39,300
Warner & Lambert Co. .................. 650 63,131
-----------
815,000
-----------
Multi-Industry - 1.08%
Minnesota Mining & Mfg. Co. ........... 1,230 81,488
-----------
Raw Materials - 4.47% .................
Aluminum Co. of America ............... 1,340 70,853
Dow Chemical Co. ...................... 970 68,264
Dupont (EI) De Nemours & Co. .......... 1,600 111,800
Monsanto Co. .......................... 700 85,750
-----------
336,667
-----------
Retail - 7.05%
Albertsons, Inc. ...................... 3,200 105,200
Dillard Dept. Stores, Inc. Cl. A ...... 2,050 58,425
Limited, Inc. ......................... 2,300 39,963
May Department Stores Co. ............. 1,700 71,825
Penney (JC), Inc. ..................... 1,450 69,056
Price/Costco, Inc.* ................... 2,300 35,075
Toys R US, Inc.* ...................... 800 17,400
Wal Mart Stores, Inc. ................. 4,150 92,856
Walgreen Co. .......................... 1,400 41,825
-----------
531,625
-----------
Shelter - 1.70%
Georgia Pacific Corp. ................. 1,300 89,212
Kimberly Clark Corp. .................. 460 38,065
Schweitzer-Mauduit International, Inc. . 36 833
-----------
128,110
-----------
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1995
- -----------------------------------------------------------------------------
EQUITY INVESTMENT FUND (CONTINUED)
Shares Value
------------ ------------
COMMON STOCKS - (continued)
Technology - 13.22%
Airtouch Communications* .............. 1,750 $ 49,438
AMP, Inc. ............................. 1,950 74,831
Boeing Co. ............................ 300 23,512
Compaq Computer Corp.* ................ 3,300 158,400
Hewlett Packard Co. ................... 1,300 108,875
Honeywell, Inc. ....................... 1,560 75,855
Intel Corp. ........................... 3,800 215,650
IBM Corp. ............................. 1,000 91,750
Motorola, Inc. ........................ 2,100 119,700
Seagate Technology* ................... 1,000 47,500
Tandem Computers, Inc.* ............... 2,900 30,813
------------
996,324
------------
Transportation - 1.83%
AMR Corp. ............................. 1,000 74,250
CSX Corp. ............................. 1,400 63,875
------------
138,125
------------
Utilities - 10.45%
AT & T Corp. .......................... 1,830 118,493
El Paso Natural Gas Co. ............... 1,900 53,912
GTE Corp. ............................. 2,600 114,400
MCI Communications Corp. .............. 2,100 54,863
Pacific Gas & Electric Co. ............ 2,400 68,100
Pacific Telesis Group ................. 2,100 70,612
PECO Energy Co. ....................... 2,500 75,313
SBC Communications, Inc. .............. 1,600 92,000
SCE Corp. ............................. 4,000 71,000
Unicom Corp. .......................... 2,100 68,775
------------
787,468
------------
TOTAL COMMON STOCKS - 98.36%
(Cost $6,355,596)(1) ................. 7,414,093
------------
CASH AND OTHER ASSETS NET OF LIABILITIES
- 1.64% ............................ 123,552
------------
NET ASSETS - 100.00% .................. $7,537,645
============
(1) Aggregate cost for federal income tax
purposes is $6,355,596 and net
unrealized appreciation is
as follows:
Gross unrealized
appreciation .................. $1,103,008
Gross unrealized
depreciation .................. (44,511)
----------
Net unrealized appreciation ....... $1,058,497
==========
* Non-dividend paying stock.
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1995
- -----------------------------------------------------------------------------
BALANCED FUND
Shares Value
-------- ---------
COMMON STOCKS - 57.36%
Business Equipment & Service - 0.68%
Automatic Data Processing, Inc. ... 350 $ 25,988
Dun & Bradstreet Corp. ............ 100 6,475
Flightsafety International, Inc. .. 100 5,025
---------
37,488
---------
Capital Goods - 4.93%
Cooper Industries, Inc. ........... 500 18,375
Emerson Electric Co. .............. 450 36,787
General Electric Co. .............. 1,500 108,000
Illinois Tool Works, Inc. ......... 200 11,800
Ingersoll Rand Co. ................ 800 28,100
PPG Industries, Inc. .............. 750 34,313
Tyco International, Ltd. .......... 900 32,062
---------
269,437
---------
Consumer Durables - 1.32%
Ford Motor Co. .................... 1,400 40,600
General Motors Co. ................ 600 31,725
---------
72,325
---------
Consumer Non-Durables - 5.71%
Anheuser Busch Cos., Inc. ......... 200 13,375
CPC International, Inc. ........... 450 30,881
Darden Restaurants, Inc. .......... 200 2,375
Eastman Kodak Co. ................. 450 30,150
General Mills, Inc. ............... 150 8,663
Pepsico, Inc. ..................... 1,150 64,256
Philip Morris Cos., Inc. .......... 1,000 90,500
Procter & Gamble Co. .............. 400 33,200
Sara Lee Corp. .................... 1,200 38,250
---------
311,650
---------
Consumer Services - 1.46%
Walt Disney Co. ................... 500 29,500
Hilton Hotels Corp. ............... 150 9,225
Knight Ridder, Inc. ............... 200 12,500
Time Warner, Inc. ................. 750 28,406
---------
79,631
---------
Energy - 6.48%
Amerada Hess Corp. ................ 300 15,900
Amoco Corp. ....................... 450 32,344
Atlantic Richfield Co. ............ 200 22,150
Baker Hughes, Inc. ................ 800 19,500
British Petroleum PLC ............. 300 30,638
Burlington Resources, Inc. ........ 350 13,737
Chevron Corp. ..................... 650 34,125
Exxon Corp. ....................... 700 56,088
Mobil Corp. ....................... 250 28,000
Royal Dutch Petroleum ............. 200 28,225
Schlumberger, Ltd. ................ 250 17,312
Texaco, Inc. ...................... 400 31,400
Unocal Corp. ...................... 600 17,475
Valero Energy Corp. ............... 300 7,350
---------
354,244
---------
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1995
- -----------------------------------------------------------------------------
BALANCED FUND (CONTINUED)
Shares Value
-------- ---------
COMMON STOCKS - (continued)
Financial Services - 7.99%
American International Group, Inc. .... 325 $ 30,063
BankAmerica Corp. ..................... 900 58,275
Bankers Trust Corp. ................... 400 26,600
Chase Manhattan Corp. ................. 700 42,437
Chemical Banking Corp. ................ 700 41,125
Chubb Corp. ........................... 250 24,188
Citicorp .............................. 850 57,163
Federal National Mortgage Assn. ....... 600 74,475
First Bank System, Inc. ............... 700 34,737
General RE Corp. ...................... 150 23,250
Morgan (JP) & Co., Inc. ............... 300 24,075
---------
436,388
---------
Health Care - 6.36%
Alza Corp. Cl. A ...................... 400 9,900
Bausch & Lomb, Inc. ................... 350 13,869
Baxter International, Inc. ............ 800 33,500
Bristol-Myers Squibb Co. .............. 450 38,644
Columbia/ HCA Healthcare Corp. ........ 250 12,688
Johnson & Johnson ..................... 500 42,812
Lilly Eli & Co. ....................... 600 33,750
Merck & Co., Inc. ..................... 950 62,463
Schering Plough Corp. ................. 900 49,275
St. Jude Medical, Inc. ................ 300 12,900
United Healthcare Corp. ............... 200 13,100
Warner & Lambert Co. .................. 250 24,281
---------
347,182
---------
Multi-Industry - 0.61%
Minnesota Mining & Mfg. Co. ........... 500 33,125
---------
Raw Materials - 2.46%
Aluminum Co. of America ............... 550 29,081
Dow Chemical Co. ...................... 550 38,706
Dupont (EI) De Nemours & Co. .......... 600 41,925
Monsanto Co. .......................... 200 24,500
---------
134,212
---------
Retail - 4.04%
Albertsons, Inc. ...................... 1,250 41,094
Dillard Dept. Stores, Inc. Cl. A ...... 650 18,525
Limited, Inc. ......................... 200 3,475
May Department Stores Co. ............. 800 33,800
Penney (JC), Inc. ..................... 600 28,575
Price/Costco, Inc.* ................... 1,100 16,775
Toys R US, Inc.* ...................... 300 6,525
Wal Mart Stores, Inc. ................. 2,000 44,750
Walgreen Co. .......................... 900 26,888
---------
220,407
---------
Shelter - 0.96%
Georgia Pacific Corp. ................. 450 30,881
Kimberly Clark Corp. .................. 250 20,688
Schweitzer-Mauduit International, Inc. 25 578
---------
52,147
---------
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1995
- -----------------------------------------------------------------------------
BALANCED FUND (CONTINUED)
Shares Value
-------- -----------
COMMON STOCKS - (continued)
Technology - 7.36%
Airtouch Communications* ............ 1,100 $ 31,075
AMP, Inc. ........................... 850 32,619
Boeing Co. .......................... 100 7,838
Compaq Computer Corp.* .............. 1,200 57,600
Hewlett Packard Co. ................. 600 50,250
Honeywell, Inc. ..................... 700 34,037
Intel Corp. ......................... 1,500 85,125
IBM Corp. ........................... 300 27,525
Motorola, Inc. ...................... 950 54,150
Seagate Technology, Inc.* ........... 300 14,250
Tandem Computers, Inc.* ............. 700 7,437
-----------
401,906
-----------
Transportation - 1.01%
AMR Corp. ........................... 500 37,125
CSX Corp. ........................... 400 18,250
-----------
55,375
-----------
Utilities - 5.99%
AT & T Corp. ........................ 1,000 64,750
El Paso Natural Gas Co. ............. 500 14,187
GTE Corp. ........................... 1,400 61,600
MCI Communications Corp. ............ 900 23,512
Pacific Gas & Electric Co. .......... 950 26,956
Pacific Telesis Group ............... 800 26,900
PECO Energy Co. ..................... 800 24,100
SBC Communications, Inc. ............ 650 37,375
SCE Corp. ........................... 1,400 24,850
Unicom Corp. ........................ 700 22,925
-----------
327,155
-----------
TOTAL COMMON STOCKS (Cost $2,676,715) 3,132,672
Principal
Amount Value
----------- ---------
FIXED INCOME SECURITIES - 37.66%
U.S. Government Obligations - 15.38%
U.S. Treasury Notes
7.750%, 02/15/01 .............................. $ 55,000 60,761
7.500%, 05/15/02 .............................. 250,000 277,387
6.375%, 08/15/02 .............................. 143,000 150,176
11.625%, 11/15/02 ............................. 132,000 177,898
11.125%, 08/15/03 ............................. 38,000 51,069
10.750%, 08/15/05 ............................. 89,000 122,399
---------
Total U.S. Government Obligations (Cost
$812,015) ..................................... 839,690
---------
Collateralized Mortgage Obligations - 13.66%
Federal Home Loan Mortgage Corp. - 8.11%
6.300%, 10/15/18 .............................. 100,000 100,853
6.250%, 05/15/19 .............................. 100,000 100,598
5.950%, 11/15/19 .............................. 100,000 99,655
6.500%, 08/15/21 .............................. 40,000 40,786
6.650%, 07/15/22 .............................. 100,000 101,320
---------
443,212
---------
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1995
- -----------------------------------------------------------------------------
BALANCED FUND (CONTINUED)
Principal
Amount Value
----------- ------------
FIXED INCOME SECURITIES - (continued)
Federal National Mortgage Association - 5.55%
6.000%, 09/25/18 .............................. $ 50,000 $ 49,628
6.250%, 01/25/20 .............................. 100,000 100,445
6.850%, 10/25/20 .............................. 50,000 51,161
6.750%, 05/25/21 .............................. 100,000 101,795
------------
303,029
------------
Total Collateralized Mortgage Obligations
(Cost $703,277) .............................. 746,241
------------
U.S. Government Agency Obligations - 0.23%
Resolution Funding Corp., 0.000%, 10/15/12** ... 35,000 12,416
------------
Total U.S. Government Agency Obligations
(Cost $12,238) ............................... 12,416
------------
Corporate Bonds - 8.39%
Financial Services - 6.44%
Associates Corp. North America, 6.375%, 10/15/02. 50,000 51,000
Beneficial Corp., 9.470%, 03/09/01 ............. 30,000 34,575
Commercial Credit Co., 6.375%, 09/15/02 ........ 50,000 51,125
Finova Capital Corp., 6.625%, 09/15/01 ......... 50,000 51,313
Ford Motor Credit Co., 6.250%, 11/08/00 ........ 50,000 50,625
Household Finance Corp., 6.700%, 06/15/02 ...... 50,000 51,812
Transamerica Financial Group, 7.510%, 04/15/02... 30,000 32,362
Travelers, Inc., 9.500%, 03/01/02 .............. 25,000 29,062
------------
351,874
------------
Industrial - 1.95%
Philip Morris Cos., Inc., 7.500%, 01/15/02 ..... 50,000 53,125
Smith Barney Holdings, Inc., 7.980%, 03/01/00 .. 50,000 53,438
------------
106,563
------------
Total Corporate Bonds (Cost $442,444) .......... 458,437
------------
TOTAL FIXED INCOME SECURITIES (Cost $1,969,974).. 2,056,784
------------
TOTAL INVESTMENTS - 95.02% (Cost $4,646,689)(1).. 5,189,456
------------
CASH AND OTHER ASSETS NET OF LIABILITIES - 4.98%. 271,749
------------
NET ASSETS - 100.00% ........................... $5,461,205
============
(1)Aggregate cost for federal income tax purposes
is $4,646,689 and net unrealized
appreciation is as follows:
Gross unrealized appreciation ............... $559,663
Gross unrealized depreciation ............... (16,896)
-----------
Net unrealized appreciation ............. $542,767
===========
* Non-dividend paying stock.
**Zero income bond.
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1995
- -----------------------------------------------------------------------------
FIXED INCOME FUND
Principal
Amount Value
----------- -----------
FIXED INCOME SECURITIES - 98.34%
U.S. Government Obligations - 24.55%
U.S. Treasury Notes
6.500%, 09/30/96 .............................. $ 35,000 $ 35,306
6.375%, 08/15/02 .............................. 330,000 346,559
10.750%, 05/15/03 ............................. 44,000 57,805
11.875%, 11/15/03 ............................. 434,000 607,049
10.750%, 08/15/05 ............................. 62,000 85,267
7.500%, 11/15/16 .............................. 532,000 624,094
8.875%, 08/15/17 .............................. 61,000 81,715
-----------
Total U.S. Government Obligations
(Cost $1,681,508) ............................ 1,837,795
-----------
U.S. Government Agency Obligations - 7.64%
Federal Home Loan Bank - 6.22%
7.440%, 08/10/01 .............................. 150,000 162,808
7.780%, 10/19/01 .............................. 275,000 303,438
-----------
466,246
-----------
Guaranteed Export Trust - 0.81%
6.130%, 06/15/04 .............................. 60,000 60,463
-----------
Resolution Funding Federal Bank - 0.61%
0.000%, 10/15/06* ............................. 85,000 45,350
-----------
Total U.S. Government Agency Obligations
(Cost $545,024) .............................. 572,059
-----------
Collateralized Mortgage Obligations - 37.63%
Federal Home Loan Mortgage Corp. - 19.52%
6.250%, 11/15/18 .............................. 175,000 175,998
6.400%, 05/15/19 .............................. 150,000 151,948
6.250%, 05/15/19 .............................. 250,000 251,093
5.950%, 11/15/19 .............................. 200,000 199,311
6.500%, 06/25/20 .............................. 100,000 101,796
6.350%, 07/15/21 .............................. 150,000 151,729
6.500%, 08/15/21 .............................. 75,000 76,474
6.650%, 07/15/22 .............................. 150,000 151,980
6.750%, 05/15/23 .............................. 200,000 200,798
-----------
1,461,127
-----------
Federal National Mortgage Association - 18.11%
7.500%, 07/25/18 .............................. 36,368 37,057
6.000%, 09/25/18 .............................. 40,000 39,702
6.500%, 03/25/19 .............................. 150,000 152,357
6.500%, 04/25/19 .............................. 150,000 152,318
3.500%, 05/25/19 .............................. 125,000 109,489
6.500%, 09/25/19 .............................. 150,000 150,826
6.250%, 01/25/20 .............................. 220,000 220,980
6.850%, 10/25/20 .............................. 40,000 40,929
6.750%, 11/25/20 .............................. 200,000 203,615
6.750%, 05/25/21 .............................. 200,000 203,590
0.000%, 03/25/22* ............................. 47,688 44,397
-----------
1,355,260
-----------
Total Collateralized Mortgage Obligations (Cost
$2,699,565) ................................... 2,816,387
-----------
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1995
- -----------------------------------------------------------------------------
FIXED INCOME FUND (continued)
Principal
Amount Value
----------- ------------
Asset Backed Securities - 0.78%
CMO Trust, 8.650%, 03/01/03 .................... $ 15,362 $ 15,924
Ford Credit Trust, 4.850%, 01/15/98 ............ 15,563 15,467
G.S. Trust, 9.450%, 10/27/03 ................... 18,459 19,394
Premier Auto Trust, 4.550%, 03/15/98 ........... 7,833 7,778
------------
Total Asset Backed Securities (Cost $57,755) 58,563
------------
Corporate Bonds - 27.74%
Electric Utility - 1.02%
Commonwealth Edison Co., 6.250%, 10/01/97 ...... 50,000 50,313
Long Island Lighting Co., 7.625%, 04/15/98 ..... 25,000 25,750
------------
76,063
------------
Financial Services - 20.42%
Associates Corp. North America, 4.500%, 02/15/96 50,000 49,942
Associates Corp. North America, 6.375%, 10/15/02 120,000 122,400
BankAmerica Corp., 6.875%, 11/20/97 ............ 50,000 51,188
Beneficial Corp., 8.400%, 06/07/96 ............. 50,000 50,584
Beneficial Corp., 8.100%, 11/09/99 ............. 100,000 107,375
Beneficial Corp., 9.470%, 03/09/01 ............. 20,000 23,050
Chrysler Financial Corp., 6.500%, 06/15/98 ..... 25,000 25,406
Commercial Credit Co., 8.250%, 11/01/01 ........ 50,000 50,001
Commercial Credit Co., 8.250%, 11/01/01 ........ 75,000 83,531
Commercial Credit Co., 6.375%, 09/15/02 ........ 100,000 102,250
Finova Capital Corp., 6.625%, 09/15/01 ......... 100,000 102,625
Ford Motor Credit Co., 8.900%, 06/03/96 ........ 50,000 50,655
Ford Motor Credit Co., 6.250%, 11/08/00 ........ 100,000 101,250
General Motors Acceptance Corp., 7.600%, 02/10/97 50,000 51,125
Household Financial Corp., 6.760%, 01/22/98 .... 50,000 51,125
Household Financial Corp., 6.700%, 06/15/02 .... 75,000 77,719
Morgan Stanley Group, Inc., 5.650%, 06/15/97 ... 50,000 50,000
Morgan Stanley Group, Inc., 7.500%, 09/01/99 ... 75,000 78,562
Norwest Financial, Inc., 7.850%, 04/15/97 ...... 50,000 51,500
Transamerica Financial Group, 7.500%, 09/14/01 . 75,000 80,326
Transamerica Financial Group, 7.510%, 04/15/02 . 75,000 80,906
Travelers, Inc., 9.500%, 03/01/02 .............. 75,000 87,188
------------
1,528,708
------------
Industrial - 6.30%
IBM Corp., 6.375%, 06/15/00 .................... 75,000 76,969
Philip Morris Cos., Inc., 6.375%, 01/15/98 ..... 50,000 50,625
Philip Morris Cos., Inc., 7.500%, 01/15/02 ..... 175,000 185,938
Sears Roebuck & Co., 9.250%, 04/15/98 .......... 50,000 53,812
Tele Communications, 7.000%, 08/04/97 .......... 25,000 25,375
WMX Technologies, Inc., 8.125%, 02/01/98 ....... 75,000 78,563
------------
471,282
------------
Total Corporate Bonds (Cost $2,026,118) ........ 2,076,053
------------
TOTAL FIXED INCOME SECURITIES - 98.34%
(Cost $7,009,970)(1) .......................... 7,360,857
------------
CASH AND OTHER ASSETS NET OF LIABILITIES - 1.66% 123,921
------------
NET ASSETS - 100.00% ........................... $7,484,778
============
(1) Aggregate cost for federal income tax
purposes is $7,009,970 and net unrealized
appreciation is as follows:
Gross unrealized appreciation ............... $350,887
Gross unrealized depreciation ............... 0
-----------
Net unrealized appreciation ................ $350,887
===========
* Zero income bond.
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1995
- -----------------------------------------------------------------------------
INTERMEDIATE FIXED INCOME FUND
Principal
Amount Value
----------- ------------
FIXED INCOME SECURITIES - 98.46%
U.S. Government Obligations - 19.76%
U.S. Treasury Notes
6.000%, 06/30/96 ............................. $ 50,000 $ 50,192
6.500%, 05/15/97 ............................. 175,000 178,024
5.125%, 06/30/98 ............................. 250,000 249,623
5.875%, 08/15/98 ............................. 300,000 304,803
5.125%, 11/30/98 ............................. 153,000 152,564
5.500%, 02/28/99 ............................. 490,000 493,479
5.875%, 03/31/99 ............................. 3,450,000 3,513,273
6.750%, 05/31/99 ............................. 770,000 804,642
6.375%, 07/15/99 ............................. 200,000 206,908
6.875%, 07/31/99 ............................. 1,405,000 1,476,219
7.125%, 09/30/99 ............................. 3,315,000 3,516,485
7.750%, 11/30/99 ............................. 200,000 216,870
11.875%, 11/15/03 ............................ 605,000 846,232
10.750%, 08/15/05 ............................ 150,000 206,290
------------
Total U.S. Government Obligations
(Cost $11,977,469) ........................... 12,215,604
------------
U.S. Government Agency Obligations - 8.61%
Federal Home Loan Bank - 0.16%
6.110%, 07/17/00 ............................. 100,000 102,258
------------
Federal Home Loan Mortgage Corp. - 1.25%
6.550%, 04/19/99 ............................ 550,000 568,310
5.905%, 06/13/00 ............................ 200,000 202,520
------------
770,830
------------
Federal National Mortgage Association - 3.85%
8.700%, 06/10/99 ............................ 1,635,000 1,798,418
8.350%, 11/10/99 ............................ 530,000 582,353
------------
2,380,771
------------
Guaranteed Export Trust - 1.63%
6.280%, 06/15/04 ............................ 500,000 506,314
6.130%, 06/15/04 ............................ 500,000 503,855
------------
1,010,169
------------
Resolution Funding Corp. - 1.72%
0.000%, 01/15/97* ........................... 275,000 260,859
0.000%, 04/15/06* ........................... 1,040,000 571,272
0.000%, 04/15/10* ........................... 540,000 228,550
------------
1,060,681
------------
Total U.S. Government Agency Obligations (Cost
$5,225,531) .................................. 5,324,709
------------
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1995
- -----------------------------------------------------------------------------
INTERMEDIATE FIXED INCOME FUND (CONTINUED)
Principal
Amount Value
------------ ------------
FIXED INCOME SECURITIES - (continued)
Collateralized Mortgage Obligations - 36.61%
Federal Home Loan Mortgage Corp. - 25.28%
6.000%, 12/15/06 ............................. $1,500,000 $ 1,497,560
5.500%, 12/15/12 ............................. 300,000 298,131
5.000%, 03/15/13 ............................. 200,000 197,724
5.500%, 04/15/13 ............................. 600,000 596,519
5.500%, 01/15/14 ............................. 325,000 323,044
5.000%, 08/15/14 ............................. 250,000 247,035
6.500%, 08/15/14 ............................. 750,000 764,602
7.500%, 09/15/14 ............................. 200,000 204,126
5.750%, 02/15/15 ............................. 750,000 749,032
5.850%, 02/15/18 ............................. 1,500,000 1,489,539
5.400%, 07/15/18 ............................. 1,500,000 1,464,352
6.400%, 01/15/19 ............................. 1,000,000 1,011,088
5.800%, 02/15/19 ............................. 1,100,000 1,090,683
6.250%, 05/15/19 ............................. 1,000,000 1,005,977
6.050%, 05/15/19 ............................. 700,000 700,076
6.000%, 02/15/20 ............................. 1,000,000 994,030
5.500%, 04/15/20 ............................. 1,000,000 980,883
6.350%, 07/15/21 ............................. 1,000,000 1,011,530
6.750%, 05/15/23 ............................. 1,000,000 1,003,991
------------
15,629,922
------------
Federal National Mortgage Association - 11.30%
8.670%, 06/01/97 ............................. 21,601 21,628
0.000%, 07/25/98* ............................ 250,429 228,642
0.000%, 09/25/99* ............................ 22,684 22,400
5.950%, 05/25/05 ............................. 1,500,000 1,501,110
5.400%, 11/25/05 ............................. 1,300,000 1,280,171
6.000%, 04/01/09 ............................. 24,879 24,640
6.000%, 03/25/11 ............................. 53,735 53,529
5.500%, 07/25/12 ............................. 300,000 297,947
5.600%, 10/25/13 ............................. 200,000 198,867
5.250%, 11/25/13 ............................. 525,000 515,973
5.750%, 02/25/15 ............................. 700,000 698,887
9.000%, 06/25/18 ............................. 241,777 262,223
5.500%, 02/25/19 ............................. 1,175,000 1,150,662
0.000%, 01/25/22* ............................ 377,660 339,021
0.000%, 03/25/22* ............................ 357,659 332,981
0.000%, 05/25/22* ............................ 60,842 56,100
------------
6,984,781
------------
Government National Mortgage Association - 0.03%
11.000%, 12/15/09 ............................ 1,760 1,981
11.000%, 02/15/10 ............................ 2,995 3,371
11.500%, 01/15/13 ............................ 1,429 1,620
11.000%, 03/15/13 ............................ 876 986
11.500%, 07/15/13 ............................ 5,103 5,786
11.000%, 11/15/13 ............................ 2,420 2,724
12.000%, 03/15/14 ............................ 1,902 2,176
------------
18,644
------------
Total Collateralized Mortgage Obligations (Cost
$22,252,282) ................................. 22,633,347
------------
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1995
- -----------------------------------------------------------------------------
INTERMEDIATE FIXED INCOME FUND (CONTINUED)
Principal
Amount Value
----------- ---------
FIXED INCOME SECURITIES - (continued)
Asset Backed Securities - 1.07%
Ford Credit Trust 1993 A, 4.850%, 01/15/98 ...... $ 93,381 $ 92,802
GMAC 1991 C Grantor Trust, 5.700%, 12/15/96 ..... 44,595 44,613
GMAC 1992 D Grantor Trust, 5.550%, 05/15/97 ..... 53,050 53,002
GMAC 1992 E Grantor Trust, 4.750%, 08/15/97 ..... 122,233 121,230
GMAC 1992 F Grantor Trust, 4.500%, 09/15/97 ..... 58,933 58,450
Morgan Stanley Mortgage Trust, 8.450%, 05/01/17 . 27,423 28,093
Premier Auto Trust 1992, 5.900%, 11/15/97 ....... 111,654 111,587
Premier Auto Trust 1992, 5.050%, 01/15/98 ....... 114,870 114,077
Premier Auto Trust 1992, 4.550%, 03/15/98 ....... 15,666 15,557
Shearson Lehman, 8.750%, 08/27/17 ............... 18,626 18,834
---------
Total Asset Backed Securities (Cost $657,458) ... 658,245
---------
Corporate Bonds - 32.41%
Electric Utility - 1.06%
Commonwealth Edison Co., 6.000%, 03/15/98 ....... 250,000 250,313
Houston Lighting & Power Co., 7.625%, 03/01/97 .. 100,000 102,500
Long Island Lighting Co., 8.750%, 02/15/97 ...... 100,000 101,250
Long Island Lighting Co., 7.625%, 04/15/98 ...... 200,000 206,000
---------
660,063
---------
Financial Services - 23.65%
American General Finance Corp., 5.000%, 06/15/96.. 100,000 99,714
American General Finance Corp., 6.860%, 09/01/97.. 75,000 76,594
American General Finance Corp., 8.000%, 02/15/00.. 200,000 215,000
American General Finance Corp., 7.250%, 04/15/00.. 400,000 420,500
Associates Corp. North America, 4.500%, 02/15/96.. 300,000 299,655
Associates Corp. North America, 7.500%, 10/15/96.. 550,000 558,179
Associates Corp. North America, 8.625%, 06/15/97.. 175,000 182,656
Associates Corp. North America, 6.750%, 07/15/97.. 50,000 50,938
Associates Corp. North America, 6.625%, 11/15/97.. 300,000 306,000
Associates Corp. North America, 6.375%, 10/15/02.. 330,000 336,600
BankAmerica Corp., 6.875%, 11/20/97 ............. 475,000 486,281
Beneficial Corp., 8.400%, 06/07/96 .............. 200,000 202,336
Beneficial Corp., 6.790%, 11/20/97 .............. 100,000 102,125
Beneficial Corp., 8.100%, 11/09/99 .............. 375,000 402,656
Beneficial Corp., 6.850%, 06/17/02 .............. 325,000 339,625
Chrysler Financial Corp., 6.000%, 04/15/96 ...... 100,000 100,034
Chrysler Financial Corp., 5.080%, 01/27/97 ...... 200,000 199,000
Commercial Credit Co., 6.375%, 01/01/96 ......... 400,000 400,012
Commercial Credit Co., 6.000%, 04/15/00 ......... 200,000 200,750
Commercial Credit Co., 6.375%, 09/15/02 ......... 700,000 715,750
Finova Capital Corp., 6.625%, 09/15/01 .......... 775,000 795,344
Ford Motor Credit Corp., 8.000%, 10/01/96 ....... 50,000 50,899
Ford Motor Credit Corp., 5.625%, 03/03/97 ....... 25,000 25,063
Ford Motor Credit Corp., 7.125%, 12/01/97 ....... 200,000 205,750
Ford Motor Credit Corp., 6.550%, 02/03/98 ....... 300,000 305,625
Ford Motor Credit Corp., 9.250%, 06/15/98 ....... 100,000 108,125
Ford Motor Credit Corp., 6.375%, 10/06/00 ....... 400,000 407,000
Ford Motor Credit Corp., 6.250%, 11/08/00 ....... 700,000 708,750
General Motors Acceptance Corp., 8.850%, 03/15/96 100,000 100,620
General Motors Acceptance Corp., 7.375%, 01/15/97 150,000 152,812
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1995
- -----------------------------------------------------------------------------
INTERMEDIATE FIXED INCOME FUND (CONTINUED)
Principal
Amount Value
------------ -------------
FIXED INCOME SECURITIES - (continued)
General Motors Acceptance Corp., 7.600%, 02/10/97 $ 100,000 $ 102,250
General Motors Acceptance Corp., 8.375%, 05/01/97 200,000 207,250
General Motors Acceptance Corp., 7.000%, 04/15/98 100,000 103,125
General Motors Acceptance Corp., 6.625%, 03/22/99 800,000 820,000
General Motors Acceptance Corp., 7.125%, 06/01/99 100,000 104,125
General Motors Acceptance Corp., 8.000%, 10/01/99 200,000 214,250
Household Finance Corp., 9.580%, 02/01/96 ...... 175,000 175,504
Household Finance Corp., 9.375%, 02/15/96 ...... 100,000 100,417
Household Finance Corp., 6.250%, 10/15/97 ...... 125,000 126,406
Household Finance Corp., 6.750%, 06/01/00 ...... 650,000 670,313
Household Finance Corp., 6.700%, 06/15/02 ...... 500,000 518,125
Morgan Stanley Group, Inc., 7.320%, 01/15/97 ... 50,000 50,875
Morgan Stanley Group, Inc., 5.650%, 06/15/97 ... 200,000 200,000
Morgan Stanley Group, Inc., 7.500%, 09/01/99 ... 450,000 471,375
Norwest Financial, Inc., 7.850%, 04/15/97 ...... 325,000 334,750
Smith Barney Holdings, Inc., 7.980%, 03/01/00 .. 275,000 293,906
Transamerica Finance Corp., 8.375%, 02/15/98 ... 400,000 421,500
Transamerica Finance Corp., 7.510%, 04/15/02 ... 150,000 161,812
Transamerica Finance Corp., 6.375%, 06/10/02 ... 400,000 408,000
Travelers, Inc., 9.500%, 03/01/02 .............. 500,000 581,250
-------------
14,619,626
-------------
Industrial - 7.70%
Aluminum Co. of America, 4.625%, 02/15/96 ...... 50,000 49,937
Philip Morris Cos., Inc., 8.100%, 08/21/96 ..... 100,000 101,625
Philip Morris Cos., Inc., 6.375%, 01/15/98 ..... 150,000 151,875
Philip Morris Cos., Inc., 6.200%, 02/09/98 ..... 200,000 202,000
Philip Morris Cos., Inc., 7.500%, 01/15/02 ..... 1,150,000 1,221,875
Sara Lee Corp., 4.800%, 01/13/97 ............... 525,000 521,719
Sears Roebuck & Co., 5.210%, 02/18/97 .......... 250,000 249,062
Sears Roebuck & Co., 7.520%, 02/19/97 .......... 100,000 102,196
Sears Roebuck & Co., 9.250%, 08/01/97 .......... 150,000 158,250
Sears Roebuck & Co., 9.250%, 04/15/98 .......... 25,000 26,906
Sears Roebuck & Co., 6.730%, 08/29/00 .......... 1,000,000 1,030,000
Tele Communications, 7.000%, 08/04/97 .......... 375,000 380,625
Waste Management, Inc., 6.375%, 07/01/97 ....... 250,000 252,813
WMX Technologies, Inc., 8.125%, 02/01/98 ....... 300,000 314,250
-------------
4,763,133
-------------
Total Corporate Bonds (Cost $19,643,737) ....... 20,042,822
-------------
TOTAL FIXED INCOME SECURITIES - 98.46%
(Cost $59,756,477)(1) ........................ 60,874,727
-------------
CASH AND OTHER ASSETS NET OF LIABILITIES - 1.54% 953,742
-------------
NET ASSETS - 100.00% ............................ $61,828,469
=============
(1)Aggregate cost for federal income tax purposes
is $59,756,477 and net unrealized appreciation
is as follows:
Gross unrealized appreciation ............... $1,118,689
Gross unrealized depreciation ............... (439)
------------
Net unrealized appreciation ................... $1,118,250
============
*Zero income bond.
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1995
- -----------------------------------------------------------------------------
PRINCIPAL PRESERVATION FUND
Principal
Amount Value
------------ -------------
FIXED INCOME SECURITIES - 89.37%
U.S. Government Agency Notes - 85.54%
Federal Farm Credit Bank Discount Notes - 7.60%
5.480%, 02/26/96 ............................... $1,000,000 $ 991,628
5.430%, 03/15/96 ............................... 500,000 494,495
-------------
1,486,123
-------------
Federal Home Loan Bank Discount Notes - 9.61%
5.580%, 02/05/96 ............................... 400,000 397,892
5.530%, 02/27/96 ............................... 1,000,000 991,398
5.440%, 04/25/96 ............................... 500,000 491,387
-------------
1,880,677
-------------
Federal Home Loan Mortgage Corp.
Discount Notes - 41.81%
5.560%, 01/31/96 ............................... 1,000,000 995,521
5.780%, 02/01/96 ............................... 710,000 706,580
5.560%, 02/08/96 ............................... 900,000 894,861
5.560%, 02/13/96 ............................... 1,000,000 993,513
5.520%, 02/20/96 ............................... 900,000 893,238
5.460%, 03/01/96 ............................... 520,000 515,347
5.450%, 04/25/96 ............................... 1,750,000 1,719,798
5.150%, 06/21/96 ............................... 1,500,000 1,463,306
-------------
8,182,164
-------------
Federal National Mortgage Assn.
Discount Notes - 26.52%
5.830%, 01/05/96 ............................... 150,000 149,927
5.540%, 02/12/96 ............................... 750,000 745,264
5.500%, 03/12/96 ............................... 1,000,000 989,305
5.470%, 03/28/96 ............................... 750,000 740,199
5.480%, 03/28/96 ............................... 1,600,000 1,579,054
5.320%, 04/04/96 ............................... 1,000,000 986,257
-------------
5,190,006
-------------
Total U.S. Government Agency Notes
(Cost $16,738,970) ............................. 16,738,970
-------------
CERTIFICATES OF DEPOSIT - 3.83%
Imperial Bank
5.750%, 01/30/96 ............................... 750,000 750,000
-------------
Total Certificates of Deposit (Cost $750,000) ... 750,000
-------------
REPURCHASE AGREEMENTS - 9.20%
Chemical Bank, U.S. Treasury Notes, $1,800,000
par, 6.875% coupon, due 10/31/96, dated 12/29/95
to be sold on 01/02/96 at $1,801,170 ........... 1,800,000 1,800,000
-------------
Total Repurchase Agreements (Cost $1,800,000) .... 1,800,000
-------------
TOTAL INVESTMENTS** - 98.57% (Cost $19,288,970) .. 19,288,970
-------------
CASH AND OTHER ASSETS NET OF LIABILITIES - 1.43% . 279,512
-------------
NET ASSETS - 100.00% ............................. $19,568,482
=============
** At December 31, 1995, cost is identical for book and federal income tax
purposes.
See accompanying notes to financial statements.
<PAGE>
Statement of Assets and Liabilities (unaudited) December 31, 1995
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
McM
McM McM Intermediate McM
Equity McM Fixed Fixed Principal
Investment Balanced Income Income Preservation
Fund Fund Fund Fund Fund
------------ ------------ ------------ ------------- ---------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments in securities at value (cost
$6,355,596, $4,646,689, $7,009,970, $59,756,477
and $19,288,970, respectively) ................. $7,414,093 $5,189,456 $7,360,857 $60,874,727 $19,288,970
Dividends and interest receivable ................. 17,357 35,045 86,925 695,184 6,102
Receivable for fund shares sold ................... 42,120 0 0 0 0
Receivable for securities sold .................... 0 0 0 215,129 0
Deferred organization cost (Note A) ............... 13,544 13,544 13,544 13,544 13,544
Other assets ...................................... 136,419 285,403 36,120 68,740 366,262
---------- ---------- ---------- ----------- -----------
Total assets .............................. 7,623,533 5,523,448 7,497,446 61,867,324 19,674,878
---------- ---------- ---------- ----------- -----------
Liabilities:
Payable for securities purchased .................. 69,200 51,488 0 0 0
Distributions payable ............................. 0 0 0 0 92,422
Accrued expenses .................................. 980 0 0 8,464 0
Payable to advisor, net ........................... 15,708 10,755 12,668 30,391 13,974
---------- ---------- ---------- ----------- -----------
Total liabilities ......................... 85,888 62,243 12,668 38,855 106,396
---------- ---------- ---------- ----------- -----------
Net Assets:
Applicable to 563,974, 446,668, 692,131, 5,916,157
and 19,568,508 shares outstanding, respectively $7,537,645 $5,461,205 $7,484,778 $61,828,469 $19,568,482
========== ========== ========== =========== ===========
Net Assets Consist of:
Capital paid-in ................................... $6,481,795 $4,911,908 $7,131,105 $60,565,022 $19,568,508
Accumulated undistributed (distributions in excess
of) net investment income ...................... (2,592) (1,779) (4,680) 8,273 0
Accumulated net realized gain (loss) on investments (55) 8,309 7,466 136,924 (26)
Net unrealized appreciation on investments ........ 1,058,497 542,767 350,887 1,118,250 0
---------- ---------- ---------- ----------- -----------
$7,537,645 $5,461,205 $7,484,778 $61,828,469 $19,568,482
========== ========== ========== ========== ===========
Net asset value and redemption price per share ...... $ 13.37 $ 12.23 $ 10.81 $ 10.45 $ 1.00
========== ========== ========== ========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED DECEMBER 31, 1995
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
McM
McM McM Intermediate McM
Equity McM Fixed Fixed Principal
Investment Balanced Income Income Preservation
Fund Fund Fund Fund Fund
------------ ---------- ---------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends ............................... $ 74,463 $ 29,737 $ 0 $ 0 $ 0
Interest ................................ 3,446 53,921 227,775 1,439,479 467,431
-------- -------- -------- ---------- --------
Total investment income ......... 77,909 83,658 227,775 1,439,479 467,431
-------- -------- -------- ---------- --------
Expenses:
Investment advisory fees (Note E) ....... 15,145 9,077 12,337 80,488 20,317
Transfer agent fees ..................... 11,416 10,839 10,466 10,472 12,542
Administration fees ..................... 7,944 7,852 7,684 7,721 8,224
Accounting fees ......................... 10,000 10,397 11,867 15,695 10,421
Custodian fees .......................... 5,728 5,294 2,620 7,575 5,252
Insurance fees .......................... 433 433 433 433 433
Legal fees .............................. 1,120 742 1,381 8,323 3,059
Amortization of organization costs
(Note A) ............................. 1,830 1,830 1,830 1,830 1,830
Registration expenses ................... 2,578 2,005 3,233 10,904 5,049
Trustees fees ........................... 698 543 772 1,966 1,453
Auditing fees ........................... 7,500 7,500 7,500 7,500 7,500
Miscellaneous expenses .................. 73 54 72 364 155
Other expenses .......................... 1,083 77 49 8,522 110
-------- -------- -------- ---------- --------
Total expenses .................. 65,548 56,643 60,244 161,793 76,345
Expenses reimbursed (Note E) ............ (42,830) (44,541) (42,619) (46,810) (51,964)
-------- -------- -------- ---------- --------
Net expenses .................... 22,718 12,102 17,625 114,983 24,381
-------- -------- -------- ---------- --------
Net Investment Income ..................... 55,191 71,556 210,150 1,324,496 443,050
-------- -------- -------- ---------- --------
Realized and Unrealized Gain (Loss) on
Investments:
Net realized gain (loss) on investments . 7,976 15,731 15,959 427,372 (31)
Net change in unrealized appreciation on
investments .......................... 670,478 319,347 203,395 624,359 0
-------- -------- -------- ---------- --------
Net realized and unrealized gain (loss)
on investments ....................... 678,454 335,078 219,354 1,051,731 (31)
-------- -------- -------- ---------- --------
Increase in Net Assets from Operations .... $733,645 $406,634 $429,504 $2,376,227 $443,019
======== ======== ======== ========== ========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
Statement of Changes in Net Assets
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
McM Equity McM Balanced McM Fixed
Investment Fund Fund Income Fund
--------------------------- ------------------------ -------------------------
Six For the Six For the Six For the
Months Ended Period Months Ended Period Months Ended Period
12/31/95 Ended 12/31/95 Ended 12/31/95 Ended
(unaudited) 06/30/95* (unaudited) 06/30/95* (unaudited) 06/30/95*
-------------- --------- ------------- --------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income ................... $ 55,191 $ 29,015 $ 71,556 $ 54,300 $ 210,150 $ 86,013
Net realized gain on investments ........ 7,976 11,489 15,731 26,219 15,959 28,635
Net change in unrealized appreciation on
investments .......................... 670,478 388,019 319,347 223,420 203,395 147,492
----------- ---------- ----------- ---------- ----------- ----------
Increase in net assets .................. 733,645 428,523 406,634 303,939 429,504 262,140
----------- ---------- ----------- ---------- ----------- ----------
Dividends and Distributions to
Shareholders:
From net investment income .............. (60,852) (25,947) (77,776) (49,859) (231,306) (69,497)
From capital gains ...................... (19,519) 0 (33,641) 0 (37,168) 0
----------- ---------- ----------- ---------- ----------- ----------
Total distributions ..................... (80,371) (25,947) (111,417) (49,859) (268,474) (69,497)
----------- ---------- ----------- ---------- ----------- ----------
Capital Share Transactions - Note C ...... 2,018,612 4,463,183 2,096,112 2,815,796 725,109 6,405,996
----------- ---------- ----------- ---------- ----------- ----------
Total increase in net assets ............. 2,671,886 4,865,759 2,391,329 3,069,876 886,139 6,598,639
Net Assets:
Beginning of period ..................... 4,865,759 0 3,069,876 0 6,598,639 0
----------- ---------- ----------- ---------- ----------- ----------
End of period (including undistributed
net investment income of ($2,592),
$3,068, ($1,779), $4,441, ($4,680),
and $16,516, respectively) ........... $ 7,537,645 $4,865,759 $ 5,461,205 $3,069,876 $ 7,484,778 $6,598,639
=========== ========== =========== ========== =========== ==========
</TABLE>
* McM Equity Investment Fund, McM Balanced Fund and McM Fixed Income Fund
commenced investment operations on July 14, 1994.
<PAGE>
Statement of Changes in Net Assets (continued)
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
McM Intermediate McM Principal
Fixed Income Fund Preservation Fund
---------------------------------- ----------------------------------
Six Months Ended For the Six Months Ended For the
12/31/95 Period Ended 12/31/95 Period Ended
(unaudited) 06/30/95* (unaudited) 06/30/95**
---------------- -------------- ---------------- --------------
<S> <C> <C> <C> <C>
Operations:
Net investment income ................... $ 1,324,496 $ 478,032 $ 443,050 $ 227,772
Net realized gain (loss) on investments . 427,372 248,988 (31) 5
Net change in unrealized appreciation on
investments .......................... 624,359 493,891 0 0
----------- ----------- ----------- -----------
Increase in net assets .................. 2,376,227 1,220,911 443,019 227,777
----------- ----------- ----------- -----------
Dividends and Distributions to
Shareholders:
From net investment income .............. (1,390,966) (403,289) (443,050) (227,772)
From capital gains ...................... (539,436) 0 0 0
----------- ----------- ----------- -----------
Total distributions ..................... (1,930,402) (403,289) (443,050) (227,772)
----------- ----------- ----------- -----------
Capital Share Transactions - Note C ....... 31,446,385 29,118,637 7,755,568 11,812,940
----------- ----------- ----------- -----------
Total increase in net assets ............. 31,892,210 29,936,259 7,755,537 11,812,945
Net Assets:
Beginning of period ..................... 29,936,259 0 11,812,945 0
----------- ----------- ----------- -----------
End of period (including undistributed
net investment income of $8,273,
$74,760 $0, and $0, respectively) .... $61,828,469 $29,936,259 $19,568,482 $11,812,945
=========== =========== =========== ===========
</TABLE>
* MCM Intermediate Fixed Income Fund commenced investment operations on July
14, 1994.
** McM Principal Preservation Fund commenced investment operations on July 13,
1994.
<PAGE>
McM FUNDS
Notes to Financial Statements (unaudited) December 31, 1995
- ------------------------------------------------------------------------------
Note (A) Significant Accounting Policies: McM Funds (the "Company") operates as
a series company currently issuing five series of shares of beneficial interest
(collectively, the "Funds"): McM Equity Investment Fund (the "Equity Investment
Fund"), McM Balanced Fund (the "Balanced Fund"), McM Fixed Income Fund (the
"Fixed Income Fund"), McM Intermediate Fixed Income Fund (the "Intermediate
Fixed Income Fund") and McM Principal Preservation Fund (the "Principal
Preservation Fund"). The Company is a no-load, open-end management investment
company which is registered under the Investment Company Act of 1940 (the
"Act"), as amended. The Company was organized as a Delaware business trust on
February 3, 1994. The Equity Investment Fund, Balanced Fund, Fixed Income Fund,
and Intermediate Fixed Income Fund commenced investment operations on July 14,
1994. The Principal Preservation Fund commenced investment operations on July
13, 1994. Investment in the Principal Preservation Fund is neither insured nor
guaranteed by the U.S. Government, and there can be no assurance that the
Principal Preservation Fund will be able to maintain a stable net asset value of
$1.00. Certain officers and trustees of the Funds are also officers and
directors of McMorgan and Company (the "Advisor"). No officer or employee of the
Advisor receives any compensation from the Funds for acting as a trustee of the
Funds. The officers of the Funds receive no compensation directly from the Funds
for performing the duties of their offices. All Company officers serve without
direct compensation from the Fund. The following is a summary of the significant
accounting policies consistently followed by each Fund in the preparation of its
financial statements. These policies are in conformity with generally accepted
accounting principles.
(1) Security Valuation: The net asset value per share of each Fund is
computed as of the close of regular trading on the NYSE. The net asset value
per share is computed by adding the value of all securities and other assets
in the portfolio, deducting any liabilities (expenses and fees are accrued
daily) and dividing by the number of shares outstanding. The equity
securities of each Fund listed or traded on a stock exchange are valued at
the last sale price on its principal exchange. If no sale price is reported,
the mean of the last bid and asked prices is used. Securities traded
over-the-counter are priced at the mean of the last bid and asked prices.
Fixed-income securities are valued through valuations obtained from a
commercial pricing service or at the most recent mean of the bid and asked
prices provided by investment dealers in accordance with procedures
established by the Board of Trustees. All securities held in the portfolio
of the Principal Preservation Fund, and the debt securities with maturities
of 60 days or less held by the other Funds, are valued at amortized cost.
When a security is valued at amortized cost, it is valued at its cost when
purchased, and thereafter by assuming a constant amortization to maturity of
any discount or premium, regardless of the impact of fluctuating interest
rates on the market value of the instrument. When market quotations are not
readily available, securities and other assets are valued at fair value as
determined in good faith by the Board of Trustees.
(2) Repurchase Agreements: Each Fund may enter into repurchase agreements to
earn income. The Funds may only enter into repurchase agreements with
financial institutions that are deemed to be creditworthy by the Advisor,
pursuant to guidelines established by the Funds' Board of Trustees. During
the term of any repurchase agreement, the Advisor will continue to monitor
the creditworthiness of the seller. Repurchase agreements are considered
under the Act to be collateralized loans by a Fund to the seller secured by
the securities transferred to the Fund. Repurchase agreements under the Act
will be fully collateralized by securities in which the Fund may invest
directly. Such collateral will be marked-to-market daily. If the seller of
the underlying security under the repurchase agreement should default on its
obligation to repurchase the underlying security, a Fund may experience
delay or difficulty in exercising its right to realize upon the security
and, in addition, may incur a loss if the value of the security should
decline, as well as disposition costs in liquidating the security.
(3) Investment Income and Securities Transactions: Dividend income is
recorded on the ex-dividend date. Interest income is accrued daily.
Securities transactions are accounted for on the date securities are
purchased or sold. The cost of securities sold is determined using the
first-in-first-out method.
<PAGE>
McM FUNDS
Notes to Financial Statements (continued) December 31, 1995
- ------------------------------------------------------------------------------
(4) Federal Income Taxes: The Funds have elected to be treated as "regulated
investment companies" under Sub-chapter M of the Internal Revenue Code and
to distribute substantially all of their respective net taxable income.
Accordingly, no provisions for federal income taxes have been made in the
accompanying financial statements.
(5) Dividends and Distributions: Dividends and distributions to shareholders
are recorded on the ex-dividend date.
(6) Organization Costs: Organization costs are being amortized on a
straight-line basis over five years.
Note (B) Dividends from Net Investment Income and Distributions of Capital
Gains: With respect to the Equity Investment Fund and the Balanced Fund,
dividends from net investment income are distributed quarterly and net realized
gains from investment transactions, if any, are distributed to shareholders
annually. The Fixed Income Fund and the Intermediate Fixed Income Fund
distribute their respective net investment income to shareholders monthly and
net capital gains, if any, are distributed annually. The Principal Preservation
Fund declares dividends daily from its net investment income. The Principal
Preservation Fund's dividends are payable monthly and are automatically
reinvested in additional Fund shares, at the month-end net asset value, for
those shareholders that have elected the reinvestment option.
Note (C) Capital Share Transactions: Each Fund is authorized to issue an
unlimited number of shares of beneficial interest with no par value.
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
EQUITY INVESTMENT FUND BALANCED FUND
------------------------------------------------ ---------------------------------------------
Six Months Ended Six Months Ended
December 31, 1995 Period Ended December 31, 1995 Period Ended
(unaudited) June 30, 1995 (unaudited) June 30, 1995
-------------------- -------------------- ------------------ -------------------
Shares Amount Shares Amount Shares Amount Shares Amount
------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold ................. 183,695 $2,363,708 412,880 $4,521,599 181,474 $2,161,428 267,068 $2,777,969
Shares issued through
reinvestment of dividends .. 6,106 80,345 2,306 25,947 8,215 99,412 3,518 37,857
Shares redeemed ............. (33,132) (425,441) (7,881) (84,363) (13,604) (164,728) (3) (30)
------- ---------- ------- ---------- ------- ---------- ------- ----------
Net Increase ................ 156,669 $2,018,612 407,305 $4,463,183 176,085 $2,096,112 270,583 $2,815,796
======= ========== ======= ========== ======= ========== ======= ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIXED INCOME FUND INTERMEDIATE FIXED INCOME FUND
------------------------------------------------ ---------------------------------------------
Six Months Ended Six Months Ended
December 31, 1995 Period Ended December 31, 1995 Period Ended
(unaudited) June 30, 1995 (unaudited) June 30, 1995
-------------------- -------------------- --------------------- -------------------
Shares Amount Shares Amount Shares Amount Shares Amount
------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold ................. 60,814 $ 646,108 620,161 $6,367,978 2,922,984 $30,352,328 3,011,283 $30,365,363
Shares issued through
reinvestment of dividends .. 25,189 268,299 6,778 69,497 177,687 1,844,742 39,660 403,289
Shares redeemed ............. (17,735) (189,298) (3,076) (31,479) (72,344) (750,685) (163,113) (1,650,015)
------- --------- ------- ---------- --------- ----------- --------- -----------
Net Increase ................ 68,268 $ 725,109 623,863 $6,405,996 3,028,327 $31,446,385 2,887,830 $29,118,637
======= ========= ======= ========== ========= =========== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL PRESERVATION FUND
----------------------------------------------------------------
Six Months Ended
December 31, 1995 Period Ended
(unaudited) June 30, 1995
-------------------------------- ------------------------------
Shares Amount Shares Amount
-------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Shares sold ................. 29,287,428 $ 29,287,428 20,195,224 $20,195,224
Shares issued through
reinvestment of dividends .. 334,962 334,962 210,250 210,250
Shares redeemed ............. (21,866,822) (21,866,822) (8,592,534) (8,592,534)
----------- ------------ ---------- -----------
Net Increase ................ 7,755,568 $ 7,755,568 11,812,940 $11,812,940
=========== ============ ========== ===========
</TABLE>
<PAGE>
McM FUNDS
Notes to Financial Statements (continued) December 31, 1995
- ------------------------------------------------------------------------------
Note (D) Investment Transactions: Aggregate purchases and proceeds from sales of
investment securities (other than short-term investments) for the six month
period ended December 31, 1995 were:
Aggregate Proceeds from
Purchases Sales
------------ ---------------
Equity Investment Fund ....... $ 2,044,151 $ 30,437
Balanced Fund ................ 2,278,351 427,690
Fixed Income Fund ............ 2,239,358 1,454,492
Intermediate Fixed Income Fund 54,876,772 22,057,775
Note (E) Advisory, Administration and Distribution Services Agreements: Under
its Advisory Agreements with each of the Funds, the Advisor provides investment
advisory services to the Funds. The Funds will pay the Advisor at the following
annual percentage rates of the average daily net assets of each Fund: 0.50% for
the Equity Investment Fund; 0.45% for the Balanced Fund; 0.35% for the Fixed
Income Fund; 0.35% for the Intermediate Fixed Income Fund; and 0.25% for the
Principal Preservation Fund. These fees are accrued daily and paid monthly. The
Advisor has voluntarily undertaken to absorb the Equity Investment Fund,
Balanced Fund, Fixed Income Fund, Intermediate Fixed Income Fund, and Principal
Preservation Fund operating expenses which cause total expenses to exceed 0.75%,
0.60%, 0.50%, 0.50%, and 0.30%, respectively. For the period July 1, 1995
through December 31, 1995, the Advisor absorbed, subject to repayment, expenses
totalling $228,764; $42,830 for the Equity Investment Fund, $44,541 for the
Balanced Fund, $42,619 for the Fixed Income Fund, $46,810 for the Intermediate
Fixed Income Fund, and $51,964 for the Principal Preservation Fund.
The investment advisory agreement provides that any fee reductions or expense
reimbursements made by the Advisor are subject to reimbursement by the Funds
within three years from the commencement of operations provided that the Funds
are able to make such reimbursements and remain in compliance with applicable
expense limitations. Since July 14, 1994 (July 13, 1994 for the Principal
Preservation Fund) through December 31, 1995, the Advisor has reduced its
management fee and absorbed Fund expenses in the aggregate amount of $719,442.
As of December 31, 1995, there has been no recapture of this absorbed amount.
The Advisor generally seeks recapture for the oldest reductions and waivers
before payment by the Funds of fees and expenses for the current year.
<PAGE>
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
The tables below set forth financial data for a share of beneficial interest
outstanding throughout each period presented.
<TABLE>
<CAPTION>
McM Equity McM Balanced McM Fixed
Investment Fund Fund Income Fund
------------------------------ ------------------------------- -----------------------------
Six Months Ended For the Six Months Ended For the Six Months Ended For the
12/31/95 Period Ended 12/31/95 Period Ended 12/31/95 Period Ended
(unaudited) 06/30/95* (unaudited) 06/30/95* (unaudited) 06/30/95*
---------------- ------------ ----------------- ------------ ---------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period $ 11.95 $ 10.00 $ 11.35 $ 10.00 $ 10.58 $ 10.00
Income from investment operations
Net investment income ............ 0.11 0.19 0.21 0.36 0.33 0.55
Net realized and unrealized gain
on investments ................ 1.47 1.94 0.99 1.33 0.31 0.56
------- ------- ------- ------- ------- -------
Total from investment
operations .................. 1.58 2.13 1.20 1.69 0.64 1.11
------- ------- ------- ------- ------- -------
Less Distributions:
From net investment income ....... (0.12) (0.18) (0.23) (0.34) (0.35) (0.53)
From capital gains ............... (0.04) 0.00 (0.09) 0.00 (0.06) 0.00
------- ------- ------- ------- ------- -------
Total distributions ........... (0.16) (0.18) (0.32) (0.34) (0.41) (0.53)
------- ------- ------- ------- ------- -------
Net Asset Value, end of period ..... $ 13.37 $ 11.95 $ 12.23 $ 11.35 $ 10.81 $ 10.58
======= ======= ======= ======= ======= =======
Total return (2) .................... 13.21% 21.57% 10.58% 17.31% 6.16% 11.55%
Ratios/Supplemental Data
Net assets, end of period (in
000's) ........................ $ 7,538 $ 4,866 $ 5,461 $ 3,070 $ 7,485 $ 6,599
Ratio of expenses to average net
assets before reimbursement of
expenses by Advisor (1) ........ 2.20% 8.48% 2.85% 8.41% 1.74% 7.29%
Ratio of expenses to average net
assets after reimbursement of
expenses by Advisor (1) ........ 0.75% 0.75% 0.60% 0.60% 0.50% 0.50%
Ratio of net investment income to
average net assets before
reimbursement of expenses by
Advisor (1) .................... 0.41% -5.50% 1.36% -3.54% 4.83% -0.47%
Ratio of net investment income to
average net assets after
reimbursement of expenses by
Advisor (1) .................... 1.85% 2.24% 3.60% 4.28% 6.06% 6.33%
Portfolio turnover (2) ........... 0.52% 1.81% 10.87% 81.05% 21.23% 150.77%
</TABLE>
* McM Equity Investment Fund, McM Balanced Fund and McM Fixed Income Fund
commenced investment operations on July 14, 1994.
(1) Annualized.
(2) Not annualized.
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- -----------------------------------------------------------------------------
The tables below set forth financial data for a share of beneficial interest
outstanding throughout each period presented.
<TABLE>
<CAPTION>
McM Intermediate McM Principal
Fixed Income fund Preservation Fund
---------------------------------- ----------------------------------
Six Months Ended For the Six Months Ended For the
12/31/95 Period Ended 12/31/95 Period Ended
(unaudited) 06/30/95* (unaudited) 06/30/95**
---------------- -------------- ---------------- --------------
<S> <C> <C> <C> <C>
Net Asset Value, beginning of period .......... $ 10.37 $ 10.00 $ 1.00 $ 1.00
----------- ---------- ----------- -----------
Income from investment operations
Net investment income ....................... 0.29 0.54 0.03 0.05
Net realized and unrealized gain on
investments .............................. 0.20 0.34 0.00 0.00
----------- ---------- ----------- -----------
Total from investment operations ........... 0.49 0.88 0.03 0.05
----------- ---------- ----------- -----------
Less Distributions:
From net investment income .................. (0.31) (0.51) (0.03) (0.05)
From capital gains .......................... (0.10) 0.00 0.00 0.00
----------- ---------- ----------- -----------
Total distributions ........................ (0.41) (0.51) (0.03) (0.05)
----------- ---------- ----------- -----------
Net Asset Value, end of period ................ $ 10.45 $ 10.37 $ 1.00 $ 1.00
=========== ========== =========== ===========
Total return (2) ............................... 4.82% 9.19% 2.81% 5.10%
Ratios/Supplemental Data
Net assets, end of period (in 000's) ........ $ 61,828 $ 29,936 $ 19,568 $ 11,813
Ratio of expenses to average net assets
before reimbursement of expenses by
Advisor (1) ............................... 0.71% 1.72% 0.96% 2.77%
Ratio of expenses to average net assets after
reimbursement of expenses by Advisor (1) .. 0.50% 0.50% 0.30% 0.30%
Ratio of net investment income to average net
assets before reimbursement of expenses by
Advisor (1) ............................... 5.64% 5.01% 4.92% 2.91%
Ratio of net investment income to average net
assets after reimbursement of expenses by
Advisor (1) ............................... 5.84% 6.24% 5.57% 5.38%
Portfolio turnover (2) ..................... 48.89% 227.09% N/A N/A
</TABLE>
* McM Intermediate Fixed Income Fund commenced investment operations on July
14, 1994.
** McM Principal Preservation Fund commenced investment operations on July
13, 1994.
(1) Annualized.
(2) Not annualized.
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
BOARD OF TRUSTEES
Robert R. Barron
David B. McCleary
Thomas A. Morton
Terry A. O'Toole
Walter B. Rose McM Funds
Kenneth I. Rosenblum ---------
OFFICERS
Thomas A. Morton, CEO and President
Terry A. O'Toole, Vice President and Treasurer
Deane A. Nelson, Vice President and Secretary
INVESTMENT ADVISOR SEMI-ANNUAL
McMorgan & Company REPORT
One Bush Street, Suite 800
San Francisco, CA 94104
(800) 788-9485 DECEMBER 31, 1995
UNDERWRITER
Fund/Plan Broker Services, Inc.
2 W. Elm Street
Conshohocken, PA 19428
SHAREHOLDER SERVICES
Fund/Plan Services, Inc.
2 W. Elm Street
Conshohocken, PA 19428
CUSTODIAN
Citibank, N.A.
111 Wall Street
New York, New York 10005
LEGAL COUNSEL
Heller, Ehrman, White & McAuliffe
333 Bush Street
San Francisco, CA 94104-2878
Equity Investment Fund
AUDITORS Balanced Fund
Tait, Weller & Baker Fixed Income Fund
2 Penn Center Plaza, Suite 700 Intermediate Fixed Income Fund
Philadelphia, PA 19102-1707 Principal Preservation Fund
FOR ADDITIONAL INFORMATION ABOUT MCM FUNDS CALL:
(800) 788-9485
This report is submitted for general information of the shareholders of the
Funds. It is not authorized for distribution to prospective investors in the
Funds unless preceded or accompanied by an effective Prospectus which includes
details regarding the Funds' objectives, policies, expenses and other
information.
