<PAGE>
McM Funds
---------
Annual Report
June 30, 2000
Principal Preservation Fund
Intermediate Fixed Income Fund
Fixed Income Fund
Balanced Fund
Equity Investment Fund
<PAGE>
Dear Shareholder:
When the McM Funds were founded in 1994, we had one primary goal: bring the
investment strategies that have excelled time and again for our institutional
clients to individual investors, doing so at a reasonable cost.
As new investment trends come and go, McM Funds stay true to form, concentrating
on the long-term benefit of every decision we make. Risk is inherent in every
investment decision, but knowing risk, measuring risk, and managing risk to
acceptable levels is what McM Funds does best.
When choosing investments for the Funds, we examine how each addition will
affect the delicate balance of risk and return. Our strategy is to add value by
creating small, measured differences, seeking to produce incrementally higher
returns than our benchmarks over time.
While some funds may pursue the latest trends, we stick with the strategies that
have resulted in our institutional clients entrusting us with over $27 billion
in benefit plan assets. This means that your investment in McM Funds will not
"chase" returns in an attempt to keep pace with the latest "dot-com" company or
the hottest new IPO.
Instead, McM Funds will continue to stay the course, looking to provide you with
the long-term investment solutions you have come to expect from us.
Thank you for your continuing trust and confidence.
/s/ Terry A. O'Toole
-----------------------------
Terry A. O'Toole
Chairman of the Board
<PAGE>
Review
The 12 months ending June 30th was a volatile period. Driven by investors
chasing technology stocks, the 4th Quarter of 1999 yielded a return of 14.9%,
the highest return of the period. After the euphoria of that quarter, there was
a rapid shift in market sentiment caused by interest rate fears and corporate
earnings concerns. This resulted in a 7.3% return for the year ending June 30th,
lackluster by recent standards, but near long-term historical market returns.
Throughout this period, the McM Equity Fund returned 1.8% and stayed true to its
strict approach of buying high quality companies with a proven track record; a
characteristic missing in most of the "hot" stocks that drove the market during
the year.
Over the past few years, the importance of technology companies has become
apparent. The sector's weighting in the S&P 500 Index has increased from 15.2%
in 1998 to over 31.2% in 2000. This significant change in economic sector
composition underscores the considerable influence of the technology sector on
overall return, as measured by the S&P 500 Index. In fact, over the past twelve
months, 7 out of the top 10 contributors to S&P 500 performance have been
technology issues.
The bond market has been surprisingly strong in the face of interest rate hikes
by the Federal Reserve. Total year-to-date return for the Lehman Aggregate Index
was 4.0%. During the past twelve months, the Federal Reserve raised short-term
interest rates six times (totaling 1.75%) in a bid to cool economic growth and
combat inflation. However, expected real returns (yield-to-maturity, less
inflation) remain high by historical standards, with yields on corporate and
mortgage securities at attractive levels.
Outlook
Overall, the fundamentals remain positive. The key drivers in this economic
cycle (increased productivity, low inflation, strong corporate profits and
adequate liquidity) are little changed. Economic data recently released by the
Commerce Department show the expansion of the U.S. economy in the 2nd quarter at
a faster-than-expected 5.2% annual rate. Consequently, the Federal Reserve may
decide to tighten once again to rein in economic growth. With the increase in
technology weighting and an unpredictable interest rate climate, volatility in
the equity markets will likely continue
In light of this, we stand firm in our belief that prudent investors should look
past recent market gyrations and hold true to their long-term investment
objectives. McM Funds remain committed to a long-term investment approach that
is focused on risk control, diversification, and high quality investment
selection.
--------------
To be preceded or accompanied by a prospectus. Past performance does not
guarantee future results. Shares, when redeemed, may be more or less than their
original cost. All benchmarks are unmanaged indices not available for
investment. The McM Funds are distributed by Provident Distributors, Inc., 3200
Horizon Drive, King of Prussia, PA 19406. DFU 8/00
<PAGE>
Principal Preservation Fund
The Principal Preservation Fund emphasizes high quality, liquid securities. The
Fund seeks to realize maximum current income, consistent with preservation of
capital. U.S. Government issues represent 53% of the portfolio. The 7-day and
30-day average yields as of June 30, 2000 were 6.18% and 6.12%, respectively.
<TABLE>
<CAPTION>
Diversification Credit Quality Maturity
--------------- -------------- --------
<S> <C> <C> <C> <C> <C>
Government 53% Government 53% 1 - 15 days 16%
Commercial Paper 39% A-1/P-1 47% 16 - 30 days 17%
Certificates of Deposit 4% 31 - 90 days 32%
Repurchase Agreements 4% 91+ days 35%
</TABLE>
<TABLE>
<CAPTION>
Average Annual Return (%)
Current One Three Five Since
Yield Year Years Years Inception
----- ---- ----- ----- ---------
<S> <C> <C> <C> <C> <C>
McM Principal Preservation Fund 6.16 5.48 5.28 5.29 5.29
</TABLE>
<PAGE>
Principal Preservation Fund
July 13, 1994 Inception Date
June 30, 1999 - June 30, 2000
7-Day Average Yield (%)
06/30/1999 4.57
07/30/1999 4.74
08/31/1999 4.79
09/30/1999 4.49
10/31/1999 5.15
11/30/1999 5.31
12/31/1999 5.34
01/31/2000 5.46
02/29/2000 5.50
03/31/2000 5.61
04/30/2000 5.68
05/31/2000 5.95
06/30/2000 6.18
Past performance does not guarantee future results.
An investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Fund seeks to
preserve the value of your investment at $1.00 per share, it is possible to lose
money by investing in the Fund.
<PAGE>
Intermediate Fixed Income Fund
This Fund emphasizes high quality and diversification. Government bonds and
AAA-rated bonds represent 64% of the Fund. Mortgage securities, backed by U.S.
Government Agencies, provide yield advantages compared to U.S. Government bonds
with equivalent maturities. The Fund's weighted average maturity of 4.5 years
seeks to limit sensitivity to interest rate changes.
NASDAQ Symbol: MCMNX
<TABLE>
<CAPTION>
Diversification Bond Quality Maturity
--------------- ------------ --------
<S> <C> <C> <C> <C> <C>
Corporate 37% AAA 39% 1 - 5 years 62%
Mortgage 36% Government 25% 5 - 10 years 35%
Government 26% A 17% Short-term 3%
Asset Backed/Other 1% AA 13%
BAA 6%
</TABLE>
<TABLE>
<CAPTION>
Average Annual Returns (%) One Three Five Since
Year Years Years Inception
---- ----- ----- ---------
<S> <C> <C> <C> <C>
McM Intermediate Fixed Income Fund 3.51 5.11 5.41 6.07
Lehman Brothers Intermed. Govt./Corp. Index 4.21 5.62 5.81 6.47
</TABLE>
<PAGE>
Intermediate Fixed Income Fund
July 14, 1994 Inception Date
Intermediate Fixed Lehman Brothers Intermediate
Income Fund Govt./Corp. Index
----------- -----------------
07/14/1994 $10,000 $10,000
07/31/1994 $10,050 $10,074
08/31/1994 $10,046 $10,105
09/30/1994 $9,969 $10,012
10/31/1994 $9,965 $10,011
11/30/1994 $9,921 $9,966
12/31/1994 $9,957 $10,001
01/31/1995 $10,122 $10,170
02/28/1995 $10,350 $10,381
03/31/1995 $10,398 $10,440
04/30/1995 $10,518 $10,568
05/31/1995 $10,849 $10,887
06/30/1995 $10,918 $10,960
07/31/1995 $10,914 $10,961
08/31/1995 $11,003 $11,061
09/30/1995 $11,078 $11,141
10/31/1995 $11,210 $11,264
11/30/1995 $11,344 $11,412
12/31/1995 $11,445 $11,532
01/31/1996 $11,540 $11,631
02/29/1996 $11,401 $11,495
03/31/1996 $11,340 $11,436
04/30/1996 $11,320 $11,396
05/31/1996 $11,302 $11,387
06/30/1996 $11,420 $11,508
07/31/1996 $11,461 $11,542
08/31/1996 $11,463 $11,552
09/30/1996 $11,617 $11,712
10/31/1996 $11,828 $11,920
11/30/1996 $11,983 $12,077
12/31/1996 $11,916 $12,000
<PAGE>
Intermediate Fixed Lehman Brothers Intermediate
Income Fund Govt./Corp. Index
----------- -----------------
01/31/1997 $11,957 $12,046
02/28/1997 $11,965 $12,069
03/31/1997 $11,880 $11,986
04/30/1997 $12,018 $12,126
05/31/1997 $12,123 $12,227
06/30/1997 $12,236 $12,338
07/31/1997 $12,507 $12,589
08/31/1997 $12,431 $12,526
09/30/1997 $12,582 $12,671
10/31/1997 $12,760 $12,812
11/30/1997 $12,744 $12,840
12/31/1997 $12,859 $12,942
01/30/1998 $13,033 $13,112
02/27/1998 $13,016 $13,102
03/31/1998 $13,051 $13,143
04/30/1998 $13,106 $13,209
05/31/1998 $13,218 $13,306
06/30/1998 $13,300 $13,391
07/31/1998 $13,335 $13,438
08/31/1998 $13,586 $13,649
09/30/1998 $13,874 $13,991
10/31/1998 $13,790 $13,977
11/30/1998 $13,822 $13,976
12/31/1998 $13,865 $14,032
01/31/1999 $13,936 $14,109
02/28/1999 $13,731 $13,901
03/31/1999 $13,869 $14,006
04/30/1999 $13,874 $14,049
05/31/1999 $13,750 $13,941
06/30/1999 $13,734 $13,951
07/31/1999 $13,699 $13,938
08/31/1999 $13,679 $13,949
09/30/1999 $13,817 $14,079
10/31/1999 $13,839 $14,116
11/30/1999 $13,871 $14,133
12/31/1999 $13,821 $14,086
01/31/2000 $13,755 $14,034
02/29/2000 $13,869 $14,149
03/31/2000 $13,989 $14,296
04/30/2000 $13,929 $14,263
05/31/2000 $13,949 $14,286
06/30/2000 $14,214 $14,537
Past performance does not guarantee future results.
This chart reflects a hypothetical investment of $10,000 with reinvestment of
dividends and capital gains. U.S. Treasury bonds, unlike mutual funds, are
direct obligations of the U.S. Government that offer a fixed rate of return when
held to maturity. Ratings such as "AAA" refer to individual bonds and not to the
fund.
<PAGE>
Fixed Income Fund
The Fixed Income Fund is structured similarly to the Intermediate Fixed Income
Fund. It invests primarily in investment grade and U.S. Government bonds and has
a weighted average maturity of 6.8 years, 2.3 years longer than the Intermediate
Fixed Income Fund.
NASDAQ Symbol: MCMFX
<TABLE>
<CAPTION>
Diversification Bond Quality Maturity
--------------- ------------ --------
<S> <C> <C> <C> <C> <C>
Corporate 43% AAA 42% 1 - 5 years 23%
Mortgage 42% A 20% 5 - 10 years 68%
Government 15% Government 15% 10+ years 8%
AA 12% Short-term 1%
BAA 11%
</TABLE>
Average Annual Returns (%) One Three Five Since
Year Years Years Inception
---- ----- ----- ---------
McM Fixed Income Fund 3.52 5.46 5.64 6.65
Lehman Brothers Aggregate Index 4.56 6.03 6.25 7.16
<PAGE>
Fixed Income Fund
July 14, 1994 Inception Date
Fixed Lehman Brothers
Income Fund Aggregate Index
----------- ---------------
07/14/1994 $10,000 $10,000
07/31/1994 $10,070 $10,114
08/31/1994 $10,097 $10,126
09/30/1994 $9,937 $9,977
10/31/1994 $9,911 $9,968
11/30/1994 $9,855 $9,946
12/31/1994 $9,926 $10,015
01/31/1995 $10,114 $10,213
02/28/1995 $10,384 $10,456
03/31/1995 $10,460 $10,520
04/30/1995 $10,604 $10,667
05/31/1995 $11,060 $11,080
06/30/1995 $11,155 $11,161
07/31/1995 $11,112 $11,137
08/31/1995 $11,257 $11,271
09/30/1995 $11,364 $11,381
10/31/1995 $11,533 $11,529
11/30/1995 $11,716 $11,702
12/31/1995 $11,841 $11,865
01/31/1996 $11,929 $11,944
02/29/1996 $11,688 $11,736
03/31/1996 $11,587 $11,654
04/30/1996 $11,485 $11,588
05/31/1996 $11,460 $11,565
06/30/1996 $11,618 $11,720
07/31/1996 $11,629 $11,752
08/31/1996 $11,605 $11,732
09/30/1996 $11,820 $11,936
10/31/1996 $12,104 $12,201
11/30/1996 $12,335 $12,410
12/31/1996 $12,202 $12,294
<PAGE>
Fixed Lehman Brothers
Income Fund Aggregate Index
----------- ---------------
01/31/1997 $12,225 $12,332
02/28/1997 $12,238 $12,363
03/31/1997 $12,085 $12,226
04/30/1997 $12,263 $12,409
05/31/1997 $12,373 $12,527
06/30/1997 $12,516 $12,676
07/31/1997 $12,912 $13,019
08/31/1997 $12,757 $12,908
09/30/1997 $12,965 $13,099
10/31/1997 $13,181 $13,289
11/30/1997 $13,212 $13,350
12/31/1997 $13,364 $13,485
01/30/1998 $13,573 $13,657
02/27/1998 $13,516 $13,647
03/31/1998 $13,562 $13,693
04/30/1998 $13,619 $13,764
05/31/1998 $13,747 $13,895
06/30/1998 $13,857 $14,013
07/31/1998 $13,866 $14,042
08/31/1998 $14,171 $14,271
09/30/1998 $14,568 $14,605
10/31/1998 $14,385 $14,528
11/30/1998 $14,446 $14,611
12/31/1998 $14,503 $14,655
01/31/1999 $14,568 $14,759
02/28/1999 $14,248 $14,500
03/31/1999 $14,417 $14,580
04/30/1999 $14,400 $14,627
05/31/1999 $14,221 $14,498
06/30/1999 $14,179 $14,452
07/31/1999 $14,135 $14,391
08/31/1999 $14,089 $14,384
09/30/1999 $14,247 $14,551
10/31/1999 $14,259 $14,604
11/30/1999 $14,281 $14,603
12/31/1999 $14,186 $14,533
01/31/2000 $14,143 $14,485
02/29/2000 $14,311 $14,660
03/31/2000 $14,496 $14,854
04/30/2000 $14,383 $14,811
05/31/2000 $14,351 $14,803
06/30/2000 $14,680 $15,111
Past performance does not guarantee future results.
This chart reflects a hypothetical investment of $10,000 with reinvestment of
dividends and capital gains. U.S. Treasury bonds, unlike mutual funds, are
direct obligations of the U.S. Government that offer a fixed rate of return when
held to maturity. Ratings such as "AAA" refer to individual bonds and not to the
fund.
<PAGE>
Balanced Fund
The Balanced Fund invests in common stocks and bonds. Common stocks represent
about 61% of the Fund, bonds about 36%; and cash about 3%. The common stock
portion is well diversified among 94 companies that represent all economic
sectors. The Fund's bond portion is 72% U.S. Government and AAA-rated securities
with a weighted average maturity of 6.8 years.
NASDAQ Symbol: MCMBX
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Asset Allocation Fixed Income Quality Ten Largest Equity Holdings (%)
Stocks 61% AAA 40% Intel Corp. 4.9
Bonds 36% Government 32% General Electric Co. 4.4
Cash 3% A 13% Cisco Systems, Inc. 3.8
BAA 8% Microsoft Corp. 3.4
AA 7% International Business Machines 2.9
Citigroup, Inc. 2.8
Hewlett Packard Co. 2.8
Tyco International Ltd. 2.8
EMC Corp. 2.5
Chase Manhattan Corp. 2.4
---
32.7
</TABLE>
Average Annual Returns (%) One Three Five Since
Year Years Years Inception
---- ----- ----- ---------
McM Balanced Fund 3.17 12.90 15.76 16.13
Lehman Brothers Aggregate Index 4.56 6.03 6.25 7.16
Standard & Poor's 500 7.32 19.69 23.82 23.89
<PAGE>
Balanced Fund
July 14, 1994 Inception Date
<TABLE>
<CAPTION>
Lehman Brothers Standard & Poor's
Balanced Fund Aggregate Index 500 Index
------------- --------------- -----------------
<S> <C> <C> <C>
07/14/1994 $10,000 $10,000 $10,000
07/31/1994 $10,070 $10,114 $10,110
08/31/1994 $10,300 $10,126 $10,521
09/30/1994 $10,081 $9,977 $10,268
10/31/1994 $10,152 $9,968 $10,503
11/30/1994 $9,961 $9,946 $10,118
12/31/1994 $10,078 $10,015 $10,265
01/31/1995 $10,282 $10,213 $10,532
02/28/1995 $10,608 $10,456 $10,941
03/31/1995 $10,767 $10,520 $11,265
04/30/1995 $11,054 $10,667 $11,595
05/31/1995 $11,514 $11,080 $12,054
06/30/1995 $11,731 $11,161 $12,337
07/31/1995 $11,937 $11,137 $12,749
08/31/1995 $12,020 $11,271 $12,780
09/30/1995 $12,389 $11,381 $13,317
10/31/1995 $12,410 $11,529 $13,270
11/30/1995 $12,806 $11,702 $13,854
12/31/1995 $12,971 $11,865 $14,113
01/31/1996 $13,311 $11,944 $14,598
02/29/1996 $13,311 $11,736 $14,739
03/31/1996 $13,315 $11,654 $14,880
04/30/1996 $13,411 $11,588 $15,099
05/31/1996 $13,592 $11,565 $15,488
06/30/1996 $13,709 $11,720 $15,552
07/31/1996 $13,407 $11,752 $14,858
08/31/1996 $13,525 $11,732 $15,173
09/30/1996 $14,075 $11,936 $16,027
10/31/1996 $14,509 $12,201 $16,468
11/30/1996 $15,343 $12,410 $17,718
12/31/1996 $15,079 $12,294 $17,376
01/31/1997 $15,714 $12,332 $18,455
02/28/1997 $15,736 $12,363 $18,603
03/31/1997 $15,324 $12,226 $17,829
04/30/1997 $15,918 $12,409 $18,893
05/31/1997 $16,511 $12,527 $20,053
06/30/1997 $16,951 $12,676 $20,946
07/31/1997 $18,158 $13,019 $22,611
08/31/1997 $17,582 $12,908 $21,356
09/30/1997 $18,298 $13,099 $22,520
10/31/1997 $18,063 $13,289 $21,779
11/30/1997 $18,464 $13,350 $22,779
12/31/1997 $18,645 $13,485 $23,161
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Lehman Brothers Standard & Poor's
Balanced Fund Aggregate Index 500 Index
------------- --------------- -----------------
<S> <C> <C> <C>
01/30/1998 $18,960 $13,657 $23,423
02/27/1998 $19,647 $13,647 $25,107
03/31/1998 $20,093 $13,693 $26,395
04/30/1998 $20,354 $13,764 $26,670
05/31/1998 $20,173 $13,895 $26,206
06/30/1998 $20,639 $14,013 $27,270
07/31/1998 $20,661 $14,042 $26,981
08/31/1998 $19,147 $14,271 $23,085
09/30/1998 $20,097 $14,605 $24,571
10/31/1998 $21,025 $14,528 $26,559
11/30/1998 $21,875 $14,611 $28,169
12/31/1998 $22,494 $14,655 $29,808
01/31/1999 $22,934 $14,759 $31,042
02/28/1999 $22,308 $14,500 $30,077
03/31/1999 $22,674 $14,580 $31,286
04/30/1999 $23,268 $14,627 $32,478
05/31/1999 $22,896 $14,498 $31,728
06/30/1999 $23,652 $14,452 $33,463
07/31/1999 $23,323 $14,391 $32,429
08/31/1999 $23,288 $14,384 $32,283
09/30/1999 $22,911 $14,551 $31,389
10/31/1999 $23,536 $14,604 $33,385
11/30/1999 $23,748 $14,603 $34,063
12/31/1999 $24,076 $14,533 $36,070
01/31/2000 $23,592 $14,485 $34,259
02/29/2000 $23,155 $14,660 $33,612
03/31/2000 $24,577 $14,854 $36,899
04/30/2000 $24,127 $14,811 $35,788
05/31/2000 $23,944 $14,803 $35,040
06/30/2000 $24,399 $15,111 $35,913
</TABLE>
Past performance does not guarantee future results.
This chart reflects a hypothetical investment of $10,000 with reinvestment of
dividends and capital gains. U.S. Treasury bonds, unlike mutual funds, are
direct obligations of the U.S. Government that offer a fixed rate of return when
held to maturity. Ratings such as "AAA" refer to individual bonds and not to the
fund.
<PAGE>
Equity Investment Fund
The Equity Investment Fund invests in common stocks of large, high quality
companies. It is diversified among 93 companies across all economic sectors.
Individual companies are carefully selected and attractive economic sectors are
strategically overweighted compared to the Standard & Poor's 500 Stock Index.
NASDAQ Symbol: MCMEX
<TABLE>
<CAPTION>
<S> <C> <C>
Ten Largest Holdings (%) Sector Weightings (%)
Intel Corp. 4.8 Citigroup, Inc. 2.8 Technology 31.9
General Electric Co. 4.4 Tyco International Ltd. 2.8 Health Care 14.5
Cisco Systems, Inc. 3.7 Hewlett Packard Co. 2.6 Financial Services 13.1
Microsoft Corp. 3.3 EMC Corp. 2.5 Utilities 8.8
International Business Mach. 2.9 Pfizer, Inc. 2.4 Capital Goods 8.8
---- Energy 5.4
32.2 Consumer Non-Durables 4.9
Portfolio Characteristics Retail 4.7
Price/Earnings Ratio 45.32 Consumer Services 1.9
Beta 1.04 Raw Materials 1.7
Avg. Market Capitalization $161.7 Consumer Durables 1.3
Total Number of Stocks 93 Business Equip. & Services 1.0
Multi-Industry 0.7
Shelter 0.7
Transportation 0.6
----
100.0
</TABLE>
Average Annual Returns (%) One Three Five Since
Year Years Years Inception
---- ----- ----- ---------
McM Equity Investment Fund 1.80 17.17 22.33 22.36
Standard & Poor's 500 7.32 19.69 23.82 23.89
<PAGE>
Equity Investment Fund
July 14, 1994 Inception Date
Equity Standard & Poor's
Investment Fund 500 Index
--------------- ---------
07/14/1994 10,000 10,000
07/31/1994 10,040 10,110
08/31/1994 10,440 10,521
09/30/1994 10,160 10,268
10/31/1994 10,320 10,503
11/30/1994 9,989 10,118
12/31/1994 10,124 10,265
01/31/1995 10,315 10,532
02/28/1995 10,709 10,941
03/31/1995 10,965 11,265
04/30/1995 11,371 11,595
05/31/1995 11,786 12,054
06/30/1995 12,155 12,337
07/31/1995 12,532 12,749
08/31/1995 12,552 12,780
09/30/1995 13,094 13,317
10/31/1995 13,002 13,270
11/30/1995 13,543 13,854
12/31/1995 13,761 14,113
01/31/1996 14,276 14,598
02/29/1996 14,513 14,739
03/31/1996 14,613 14,880
04/30/1996 14,913 15,099
05/31/1996 15,294 15,488
06/30/1996 15,380 15,552
07/31/1996 14,779 14,858
08/31/1996 15,058 15,173
09/30/1996 15,891 16,027
10/31/1996 16,452 16,468
11/30/1996 17,814 17,718
12/31/1996 17,449 17,376
01/31/1997 18,629 18,455
02/28/1997 18,629 18,603
03/31/1997 17,978 17,829
04/30/1997 18,952 18,893
05/31/1997 20,021 20,053
06/30/1997 20,713 20,946
07/31/1997 22,837 22,611
08/31/1997 21,880 21,356
09/30/1997 23,092 22,520
10/31/1997 22,323 21,779
11/30/1997 23,156 22,779
12/31/1997 23,352 23,161
<PAGE>
Equity Standard & Poor's
Investment Fund 500 Index
--------------- ---------
01/30/1998 23,733 23,423
02/27/1998 25,238 25,107
03/31/1998 26,131 26,395
04/30/1998 26,630 26,670
05/31/1998 26,079 26,206
06/30/1998 26,906 27,270
07/31/1998 26,916 26,981
08/31/1998 23,342 23,085
09/30/1998 24,815 24,571
10/31/1998 26,862 26,559
11/30/1998 28,600 28,169
12/31/1998 29,841 29,808
01/31/1999 30,668 31,042
02/28/1999 29,702 30,077
03/31/1999 30,331 31,286
04/30/1999 31,687 32,478
05/31/1999 31,054 31,728
06/30/1999 32,752 33,463
07/31/1999 32,169 32,429
08/31/1999 32,127 32,283
09/30/1999 31,013 31,389
10/31/1999 32,309 33,385
11/30/1999 32,590 34,063
12/31/1999 33,287 36,070
01/31/2000 32,295 34,259
02/29/2000 31,052 33,612
03/31/2000 34,008 36,899
04/30/2000 33,192 35,788
05/31/2000 32,807 35,040
06/30/2000 33,345 35,913
Past performance does not guarantee future results.
This chart reflects a hypothetical investment of $10,000 with reinvestment of
dividends and capital gains.
<PAGE>
McM Funds -- Schedule of Investments June 30, 2000
--------------------------------------------------------------------------------
Principal Preservation Fund
<TABLE>
<CAPTION>
Principal
Amount Value
-------------- -------------
<S> <C> <C>
FIXED INCOME SECURITIES
U.S. Government Agency Notes - 51.75%
Federal Farm Credit Bank - 4.13%
6.335%, 11/15/00 ............................................ $ 3,000,000 $ 2,931,652
-----------
Federal Home Loan Bank - 25.54%
5.56%, 07/14/00 ............................................. 1,000,000 999,953
6.55%, 07/21/00 ............................................. 2,000,000 1,992,878
6.55%, 07/28/00 ............................................. 5,000,000 4,975,850
5.75%, 09/01/00 ............................................. 2,000,000 1,999,320
5.88%, 09/07/00 ............................................. 2,000,000 1,999,769
6.11%, 09/07/00 ............................................. 2,000,000 1,978,202
6.43%, 12/15/00 ............................................. 4,320,000 4,198,435
-----------
18,144,407
-----------
Federal Home Loan Mortgage Corporation - 8.27%
6.58%, 07/18/00 ............................................. 2,000,000 1,993,927
6.71%, 08/24/00 ............................................. 2,000,000 1,980,530
6.97%, 03/29/01 ............................................. 1,000,000 950,919
7.13%, 04/11/01 ............................................. 1,000,000 947,697
-----------
5,873,073
-----------
Federal National Mortgage Association - 13.81%
5.50%, 07/26/00 ............................................. 1,000,000 999,796
5.77%, 08/18/00 ............................................. 1,000,000 992,773
6.20%, 10/30/00 ............................................. 3,000,000 2,941,315
6.99%, 11/30/00 ............................................. 4,000,000 3,887,520
5.25%, 04/19/01 ............................................. 1,000,000 987,169
-----------
9,808,573
-----------
TOTAL U.S. GOVERNMENT AGENCY NOTES (Cost $36,757,705)......... 36,757,705
-----------
CERTIFICATES OF DEPOSITS - 4.22%
Imperial Bank
5.90%, 07/11/00 ............................................. 3,000,000 3,000,000
-----------
TOTAL CERTIFICATES OF DEPOSIT (Cost $3,000,000)............... 3,000,000
-----------
COMMERCIAL PAPER - 38.65%
AT&T Corp.
6.88%, 11/30/00 ............................................. 2,000,000 1,944,267
Campbell Soup Co.
6.84%, 10/03/00 ............................................. 2,000,000 1,965,324
Coca-Cola
6.16%, 07/20/00 ............................................. 2,000,000 1,993,593
Disney (Walt) Co.
6.24%, 07/10/00 ............................................. 2,492,000 2,488,225
Dupont (EI) de Nemours & Co.
6.78%, 10/16/00 ............................................. 2,000,000 1,960,945
Ford Motor Credit Corp.
6.18%, 07/06/00 ............................................. 2,000,000 1,998,320
General Electric Capital Co.
6.73%, 09/13/00 ............................................. 1,500,000 1,479,496
Goldman Sachs Group
6.88%, 08/25/00 ............................................. 2,000,000 1,979,650
Merrill Lynch & Co.
6.79%, 09/01/00 ............................................. 2,000,000 1,977,060
</TABLE>
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments June 30, 2000
--------------------------------------------------------------------------------
Principal Preservation Fund (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
-------------- -------------
<S> <C> <C>
COMMERCIAL PAPER - (continued)
Metlife Funding
6.82%, 08/14/00 ......................................... $ 2,000,000 $ 1,983,793
Minnesota Mining & Mfg. Co.
6.64%, 09/13/00 ......................................... 2,000,000 1,973,113
Morgan Stanley Dean Witter & Co.
6.80%, 09/12/00 ......................................... 2,000,000 1,973,314
Procter & Gamble Co.
6.72%, 08/22/00 ......................................... 1,800,000 1,782,944
United Parcel Service
6.76%, 11/01/00 ......................................... 2,000,000 1,955,583
-----------
TOTAL COMMERCIAL PAPER (Cost $27,455,627) ................ 27,455,627
-----------
REPURCHASE AGREEMENT - 4.22%
Chase Manhattan Bank
6.25%, due 7/3/00 ** .................................... 3,000,000 3,000,000
-----------
TOTAL REPURCHASE AGREEMENTS (Cost-$3,000,000)............. 3,000,000
-----------
TOTAL INVESTMENTS * - 98.84% (Cost-$70,213,332)........... 70,213,332
CASH AND OTHER ASSETS NET OF LIABILITIES - 1.16% ......... 824,753
-----------
NET ASSETS - 100.00% ..................................... $71,038,085
===========
</TABLE>
* At June 30, 2000, cost is identical for book and federal income tax
purposes.
** Collateralized by $3,165,000 par value, 4.75%, due 2/15/04, value $3,067,307
U.S. Treasury Note.
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments June 30, 2000
--------------------------------------------------------------------------------
Intermediate Fixed Income Fund
<TABLE>
<CAPTION>
Principal
Amount Value
-------------- ------------
<S> <C> <C>
FIXED INCOME SECURITIES - 97.84%
Asset Backed Securities - 0.58%
Olympic Automobile Receivables Trust 1994-B A2
6.25%, 11/15/04 ...................................... $ 1,000,000 $ 991,500
----------
TOTAL ASSET BACKED SECURITIES (Cost $993,806) ......... 991,500
----------
Corporate Bonds - 36.35%
Bank & Insurance - 4.93%
BankAmerica Corp.
6.85%, 03/01/03 ...................................... 1,500,000 1,475,625
6.38%, 05/15/05 ...................................... 1,500,000 1,428,750
Travelers Property Casualty Corp.
6.88%, 12/15/03 ...................................... 1,250,000 1,228,125
7.20%, 02/01/04 ...................................... 1,155,000 1,146,337
U.S. Bancorp
6.88%, 12/01/04 ...................................... 1,600,000 1,556,000
6.75%, 10/15/05 ...................................... 1,650,000 1,588,125
----------
8,422,962
----------
Financial Services - 17.70%
American General Finance Corp.
6.20%, 03/15/03 ...................................... 2,000,000 1,940,000
5.75%, 11/01/03 ...................................... 1,500,000 1,428,750
Associates Corp. of North America
5.75%, 11/01/03 ...................................... 150,000 141,750
5.50%, 02/15/04 ...................................... 225,000 209,531
6.10%, 01/15/05 ...................................... 700,000 657,125
6.00%, 07/15/05 ...................................... 800,000 744,000
7.55%, 07/17/06 ...................................... 3,000,000 2,970,000
Finova Capital Corp.
6.50%, 07/28/02 ...................................... 700,000 624,750
6.20%, 03/01/04 ...................................... 875,000 739,375
6.90%, 06/19/04 ...................................... 450,000 387,563
7.25%, 11/18/04 ...................................... 1,025,000 903,281
6.38%, 05/15/05 ...................................... 700,000 580,125
Ford Motor Credit Corp. ...............................
6.63%, 06/30/03 ...................................... 1,000,000 976,250
6.70%, 07/16/04 ...................................... 2,000,000 1,932,500
6.25%, 12/08/05 ...................................... 800,000 754,000
General Electric Capital
7.25%, 02/01/05 ...................................... 2,500,000 2,506,250
General Motors Acceptance Corp.
6.63%, 10/15/05 ...................................... 1,750,000 1,677,812
Goldman Sachs
7.50%, 01/28/05 ...................................... 2,000,000 1,992,500
Household Finance Corp.
6.00%, 05/01/04 ...................................... 975,000 920,156
8.00%, 05/09/05 ...................................... 900,000 907,875
Lehman Brothers, Inc.
7.63%, 06/01/06 ...................................... 725,000 706,875
</TABLE>
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments June 30, 2000
--------------------------------------------------------------------------------
Intermediate Fixed Income Fund (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
------------ -------------
<S> <C> <C>
FIXED INCOME SECURITIES - (continued)
Merrill Lynch & Co., Inc.
6.00%, 07/15/05 ................................. $ 800,000 $ 750,000
Morgan Stanley Dean Witter & Co.
5.63%, 01/20/04 ................................. 1,145,000 1,076,300
6.88%, 03/01/07 ................................. 575,000 542,656
Norwest Corp.
5.75%, 02/01/03 ................................. 2,500,000 2,406,250
Sears Roebuck Acceptance Corp.
6.73%, 08/29/00 ................................. 1,000,000 1,000,319
6.92%, 10/03/02 ................................. 225,000 221,906
Transamerica Financial Corp.
7.51%, 04/15/02 ................................. 150,000 150,187
6.38%, 06/10/02 ................................. 400,000 392,000
-----------
30,240,086
-----------
Industrial - 13.72%
Conoco, Inc.
6.35%, 04/15/09 ................................. 550,000 513,562
Enron Corp.
7.88%, 06/15/03 ................................. 2,000,000 2,015,000
6.63%, 11/15/05 ................................. 1,580,000 1,512,850
Hewlett-Packard Co.
7.15%, 06/15/05 ................................. 2,000,000 2,010,000
Home Depot, Inc.
6.50%, 09/15/04 ................................. 2,500,000 2,478,125
MCI Worldcom, Inc.
6.40%, 08/15/05 ................................. 4,325,000 4,103,344
Philip Morris Cos., Inc.
7.50%, 01/15/02 ................................. 1,150,000 1,141,375
7.25%, 01/15/03 ................................. 800,000 783,000
6.80%, 12/01/03 ................................. 645,000 614,362
Raytheon Co.
6.45%, 08/15/02 ................................. 2,000,000 1,955,000
TCI Communications, Inc.
6.38%, 05/01/03 ................................. 2,500,000 2,440,625
Transcontinental Gas Pipeline
6.13%, 01/15/05 ................................. 2,000,000 1,902,500
Wal-Mart Stores, Inc. ............................
6.55%, 08/10/04 ................................. 2,000,000 1,975,000
-----------
23,444,743
-----------
TOTAL CORPORATE BONDS (Cost $64,083,563) ......... 62,107,791
-----------
U.S. Government Agency Obligations - 18.45%
Federal Home Loan Bank - 1.00%
6.08%, 12/23/02 ................................. 500,000 490,545
5.77%, 02/03/04 ................................. 840,000 807,114
7.70%, 09/20/04 ................................. 400,000 410,324
-----------
1,707,983
-----------
Federal Home Loan Mortgage Corporation - 3.13%
5.99%, 12/01/03 ................................. 1,650,000 1,599,279
6.64%, 03/10/04 ................................. 500,000 493,870
5.75%, 04/15/08 ................................. 3,550,000 3,259,965
-----------
5,353,114
-----------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments June 30, 2000
--------------------------------------------------------------------------------
Intermediate Fixed Income Fund (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
------------ -------------
<S> <C> <C>
FIXED INCOME SECURITIES - (continued)
Federal National Mortgage Association - 9.93%
6.45%, 04/23/01 .............................. $ 150,000 $ 149,580
5.13%, 02/13/04 .............................. 9,058,000 8,516,785
5.75%, 06/15/05 .............................. 5,715,000 5,421,135
6.38%, 06/15/09 .............................. 3,034,000 2,879,994
-----------
16,967,494
-----------
Financing Corp. Coupon Strip - 0.20%
0.00%, 04/06/02 * ............................ 375,000 333,938
-----------
Guaranteed Export Trust - 0.69%
6.13%, 06/15/04 .............................. 235,294 231,746
6.28%, 06/15/04 .............................. 258,824 252,622
6.55%, 06/15/04 .............................. 705,877 693,279
-----------
1,177,647
-----------
Resolution Funding Corp. Strip - 3.50%
0.00%, 07/15/08 * ............................ 2,700,000 1,605,879
0.00%, 10/15/08 * ............................ 3,900,000 2,283,567
0.00%, 04/15/09 * ............................ 3,690,000 2,082,747
-----------
5,972,193
-----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $32,747,097) ........................... 31,512,369
-----------
Collateralized Mortgage Obligations - 35.83%
Federal Home Loan Mortgage Corporation - 29.02%
5.85%, 02/15/18 .............................. 455,422 453,200
6.40%, 01/15/19 .............................. 1,000,000 996,680
6.25%, 05/15/19 .............................. 1,000,000 990,420
6.00%, 07/15/19 .............................. 1,500,000 1,482,975
5.50%, 10/15/19 .............................. 1,800,000 1,686,717
5.75%, 02/15/20 .............................. 1,750,000 1,647,903
6.00%, 02/15/20 .............................. 1,000,000 984,540
6.00%, 05/15/20 .............................. 1,550,000 1,493,448
6.00%, 12/15/20 .............................. 3,028,000 2,897,175
5.50%, 01/15/21 .............................. 3,825,000 3,581,109
6.50%, 01/25/21 .............................. 2,000,000 1,960,300
5.25%, 02/15/21 .............................. 2,000,000 1,846,776
5.50%, 04/15/21 .............................. 6,900,000 6,430,212
6.00%, 04/15/21 .............................. 4,050,000 3,848,797
5.75%, 05/15/21 .............................. 1,600,000 1,568,912
6.00%, 02/15/22 .............................. 1,000,000 948,555
6.00%, 03/15/22 .............................. 3,571,900 3,390,694
6.50%, 04/15/22 .............................. 500,000 486,260
5.75%, 02/15/23 .............................. 1,600,000 1,476,456
6.75%, 05/15/23 .............................. 1,000,000 977,290
5.50%, 07/15/23 .............................. 3,300,000 2,959,131
5.75%, 09/15/23 .............................. 2,000,000 1,857,890
5.75%, 03/15/24 .............................. 2,000,000 1,872,590
6.50%, 06/15/24 .............................. 1,500,000 1,424,753
6.00%, 02/15/25 .............................. 2,500,000 2,303,946
-----------
49,566,729
-----------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments June 30, 2000
--------------------------------------------------------------------------------
Intermediate Fixed Income Fund (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
------------ --------------
<S> <C> <C>
FIXED INCOME SECURITIES - (continued)
Federal National Mortgage Association - 6.81%
5.95%, 05/25/05 ........................................... $ 38,082 $ 37,918
5.40%, 11/25/05 ........................................... 144,465 143,605
6.00%, 04/01/09 ........................................... 8,845 8,523
9.00%, 06/25/18 ........................................... 59,034 61,057
5.50%, 02/25/19 ........................................... 272,148 270,534
6.25%, 07/25/19 ........................................... 600,000 593,370
5.50%, 07/25/20 ........................................... 1,850,000 1,717,448
5.50%, 08/25/21 ........................................... 720,000 701,647
5.75%, 11/18/21 ........................................... 3,000,000 2,842,875
5.75%, 09/18/22 ........................................... 725,000 678,665
6.00%, 01/17/23 ........................................... 1,350,000 1,267,772
6.25%, 01/25/23 ........................................... 2,000,000 1,921,300
6.00%, 03/25/25 ........................................... 1,500,000 1,385,558
------------
11,630,272
------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $63,347,028) ........................................ 61,197,001
------------
U.S. Government Obligations - 6.63%
U.S. Treasury Notes
11.88%, 11/15/03 .......................................... 1,260,000 1,467,900
11.63%, 11/15/04 .......................................... 4,420,000 5,306,763
12.00%, 05/15/05 .......................................... 3,685,000 4,555,581
------------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $11,294,428) ......... 11,330,244
------------
TOTAL FIXED INCOME SECURITIES - 97.84% (Cost-$172,465,922)(1) 167,138,905
CASH AND OTHER ASSETS NET OF LIABILITIES - 2.16% 3,682,986
------------
NET ASSETS - 100.00% $170,821,891
============
(1) Aggregate cost for federal income tax purposes is $172,465,922 and net
unrealized depreciation is as follows:
Gross unrealized appreciation ............................. $ 280,077
Gross unrealized depreciation ............................. (5,607,094)
-----------
Net unrealized depreciation ............................. ($ 5,327,017)
===========
</TABLE>
* Zero coupon bond
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments June 30, 2000
--------------------------------------------------------------------------------
Fixed Income Fund
Principal
Amount Value
------------ ------------
FIXED INCOME SECURITIES - 98.65%
Corporate Bonds - 42.59%
Bank & Insurance - 9.62%
BankAmerica Corp.
6.85%, 03/01/03 .................. $ 250,000 $ 245,937
6.63%, 08/01/07 .................. 100,000 94,125
6.63%, 10/15/07 .................. 150,000 141,000
KeyCorp
6.75%, 03/15/06 .................. 280,000 266,700
NationsBank Corp.
7.50%, 09/15/06 .................. 175,000 173,250
6.38%, 02/15/08 .................. 200,000 183,250
Travelers Property Casualty Corp.
7.20%, 02/01/04 .................. 100,000 99,250
U.S. Bancorp
6.50%, 02/01/08 .................. 900,000 822,375
Wells Fargo & Co.
6.25%, 04/15/08 .................. 105,000 95,550
----------
2,121,437
----------
Financial Services - 19.30%
American General Finance Corp.
6.20%, 03/15/03 .................. 500,000 485,000
Associates Corp. of North America
6.10%, 01/15/05 .................. 200,000 187,750
7.55%, 07/17/06 .................. 600,000 594,000
Beneficial Corp.
6.75%, 07/20/04 .................. 100,000 97,750
6.94%, 12/15/06 .................. 100,000 96,000
Commercial Credit Co.
6.63%, 11/15/06 .................. 225,000 214,312
Finova Capital Corp.
6.50%, 07/28/02 .................. 300,000 267,750
6.75%, 03/09/09 .................. 200,000 163,250
Ford Motor Credit Co.
6.70%, 07/16/04 .................. 200,000 193,250
7.75%, 03/15/05 .................. 225,000 226,687
6.38%, 11/05/08 .................. 450,000 411,187
General Motors Acceptance Corp.
6.50%, 12/05/05 .................. 50,000 47,687
Household Finance Corp.
7.65%, 05/15/07 .................. 100,000 98,125
Lehman Brothers, Inc.
7.63%, 06/01/06 .................. 80,000 78,000
Merrill Lynch & Co., Inc.
6.56%, 12/16/07 .................. 150,000 139,688
Morgan Stanley Dean Witter & Co.
6.88%, 03/01/07 .................. 125,000 117,969
Salomon Smith Barney Holdings, Inc.
7.00%, 03/15/04 .................. 150,000 147,937
7.38%, 05/15/07 .................. 100,000 96,875
Sears Roebuck Acceptance Corp.
6.25%, 01/15/04 .................. 50,000 48,187
6.13%, 01/15/06 .................. 100,000 92,000
6.70%, 11/15/06 .................. 400,000 375,000
Transamerica Financial Corp.
7.51%, 04/15/02 .................. 75,000 75,094
----------
4,253,498
----------
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments June 30, 2000
--------------------------------------------------------------------------------
Fixed Income Fund (continued)
Principal
Amount Value
------------ ------------
FIXED INCOME SECURITIES - (continued)
Industrial - 13.67%
Enron Corp.
6.63%, 11/15/05 ................................ $ 450,000 $ 430,875
6.40%, 07/15/06 ................................ 150,000 141,000
MCI Worldcom, Inc.
8.25%, 05/15/10 ................................ 500,000 512,500
Northwest Pipeline Corp.
6.63%, 12/01/07 ................................ 700,000 665,875
Philip Morris Cos., Inc.
7.50%, 01/15/02 ................................ 175,000 173,687
6.80%, 12/01/03 ................................ 50,000 47,625
Raytheon Co.
6.30%, 03/15/05 ................................ 550,000 517,687
TCI Communications, Inc. (FRN) (MTN)
6.88%, 02/15/06 ................................ 300,000 292,125
Transcontinental Gas Pipeline
6.25%, 01/15/08 ................................ 250,000 232,187
----------
3,013,561
----------
TOTAL CORPORATE BONDS (Cost $9,974,510) ......... 9,388,496
----------
U.S. Government Agency Obligations - 11.53%
Federal Home Loan Bank - 0.91%
5.77%, 12/03/04 ................................ 160,000 153,736
5.95%, 01/19/06 ................................ 50,000 47,569
----------
201,305
----------
Federal Home Loan Mortgage Corporation - 4.71%
5.75%, 04/15/08 ................................ 1,130,000 1,037,679
----------
Federal National Mortgage Association - 0.52%
0.00%, 10/09/19 * .............................. 450,000 114,961
----------
Guaranteed Export Trust - 0.13%
6.13%, 06/15/04 ................................ 28,235 27,810
----------
Resolution Funding Strip - 5.26%
0.00%, 10/15/11 * .............................. 260,000 124,228
0.00%, 04/15/16 * .............................. 310,000 109,157
0.00%, 01/15/17 * .............................. 1,555,000 521,920
0.00%, 04/15/17 * .............................. 250,000 82,575
0.00%, 10/15/17 * .............................. 600,000 191,958
0.00%, 01/15/19 * .............................. 440,000 129,954
----------
1,159,792
----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $2,545,314) .............................. 2,541,547
----------
Collateralized Mortgage Obligations - 41.24%
Federal Home Loan Mortgage Corporation - 33.26%
6.25%, 05/15/19 ................................ 250,000 247,916
6.50%, 10/15/19 ................................ 200,000 194,836
5.95%, 02/15/22 ................................ 500,000 475,950
6.00%, 02/15/22 ................................ 200,000 192,992
6.65%, 07/15/22 ................................ 150,000 145,682
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments June 30, 2000
--------------------------------------------------------------------------------
Fixed Income Fund (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
------------ ---------------
<S> <C> <C>
FIXED INCOME SECURITIES - (continued)
5.25%, 10/15/22 ........................................................................ $ 700,000 $ 633,770
6.50%, 12/15/22 ........................................................................ 200,000 190,589
6.20%, 01/15/23 ........................................................................ 100,000 94,591
5.75%, 02/15/23 ........................................................................ 700,000 645,950
6.00%, 02/15/23 ........................................................................ 200,000 190,459
6.75%, 05/15/23 ........................................................................ 200,000 195,458
5.75%, 06/15/23 ........................................................................ 550,000 509,105
5.75%, 09/15/23 ........................................................................ 600,000 557,367
6.00%, 11/15/23 ........................................................................ 100,000 93,755
6.00%, 12/15/23 ........................................................................ 400,000 378,631
6.00%, 01/15/24 ........................................................................ 300,000 280,775
5.50%, 03/15/24 ........................................................................ 400,000 362,920
5.75%, 03/15/24 ........................................................................ 900,000 841,475
6.00%, 03/15/24 ........................................................................ 500,000 468,908
6.00%, 07/15/24 ........................................................................ 175,000 163,799
6.00%, 11/15/24 ........................................................................ 500,000 466,428
-----------
7,331,356
-----------
Federal National Mortgage Association - 7.98%
7.50%, 07/25/18 ........................................................................ 1,860 1,852
3.50%, 05/25/19 ........................................................................ 125,000 119,749
6.50%, 10/25/21 ........................................................................ 200,000 193,118
5.75%, 12/25/22 ........................................................................ 500,000 458,607
5.75%, 02/18/23 ........................................................................ 500,000 464,213
7.00%, 06/25/23 ........................................................................ 200,000 197,028
6.00%, 01/25/25 ........................................................................ 150,000 141,044
6.00%, 03/25/25 ........................................................................ 200,000 184,741
-----------
1,760,352
-----------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $9,426,343) ....................................................................... 9,091,708
-----------
U.S. Government Obligations - 3.29%
U.S. Treasury Notes
6.25%, 02/15/07 ......................................................................... 125,000 125,156
7.50%, 11/15/16 ......................................................................... 532,000 599,330
-----------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $661,932) .......................................... 724,486
-----------
TOTAL FIXED INCOME SECURITIES - 98.65% (Cost $22,608,099)(1) ............................. 21,746,237
CASH AND OTHER ASSETS NET OF LIABILITIES - 1.35% ......................................... 298,592
-----------
NET ASSETS - 100.00% ..................................................................... $22,044,829
===========
(1)Aggregate cost for federal income tax purposes is $22,612,915 and net unrealized
depreciation is as follows:
Gross unrealized appreciation ........................................................... $ 144,076
Gross unrealized depreciation ........................................................... (1,010,754)
-----------
Net unrealized depreciation ............................................................ ($ 866,678)
===========
* Zero coupon bond
</TABLE>
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments June 30, 2000
--------------------------------------------------------------------------------
Balanced Fund
Shares Value
-------- -------------
COMMON STOCKS - 60.96%
Business Equipment and Services - 0.51%
Automatic Data Processing, Inc. ............... 11,700 $ 626,681
Sabre Holdings Corp. * ........................ 7,660 218,310
-----------
844,991
-----------
Capital Goods - 5.54%
Cooper Industries, Inc. ....................... 7,200 234,450
Emerson Electric Co. .......................... 13,500 815,062
General Electric Co. .......................... 83,100 4,404,300
Honeywell International, Inc. ................. 8,575 288,870
PPG Industries, Inc. .......................... 14,300 633,669
Tyco International, Ltd. ...................... 58,596 2,775,985
-----------
9,152,336
-----------
Consumer Durables - 0.80%
Ford Motor Co. ................................ 18,600 799,800
General Motors Corp. .......................... 8,500 493,531
Visteon Corp. * ............................... 2,435 29,528
-----------
1,322,859
-----------
Consumer Non-Durables - 3.22%
Anheuser-Busch Cos., Inc. ..................... 5,200 388,375
Bestfoods ..................................... 10,600 734,050
Eastman Kodak Co. ............................. 9,000 535,500
PepsiCo, Inc. ................................. 26,300 1,168,706
Philip Morris Cos., Inc. ...................... 50,800 1,349,375
Procter & Gamble Co. .......................... 9,200 526,700
Sara Lee Corp. ................................ 31,900 616,069
-----------
5,318,775
-----------
Consumer Services - 1.14%
Disney (Walt) Co. ............................. 15,000 582,187
Knight-Ridder, Inc. ........................... 7,400 393,587
Time Warner, Inc. ............................. 12,000 912,000
-----------
1,887,774
-----------
Energy - 3.22%
BP Amoco Plc. ................................. 20,522 1,160,776
Burlington Resources, Inc. .................... 7,150 273,487
Chevron Corp. ................................. 7,500 636,094
Exxon Mobil Corp. ............................. 17,953 1,409,310
Royal Dutch Petroleum Co. ..................... 7,200 443,250
Schlumberger, Ltd. ............................ 6,800 507,450
Texaco, Inc. .................................. 16,500 878,625
-----------
5,308,992
-----------
Financial Services - 7.96%
American International Group, Inc. ............ 12,318 1,447,365
Associates First Capital Corp. Cl. A .......... 23,706 528,940
Bank of America Corp. ......................... 32,826 1,411,518
Bank One Corp. ................................ 9,400 249,687
Chase Manhattan Corp. ......................... 53,046 2,443,431
Chubb Corp. ................................... 12,500 768,750
Citigroup, Inc. ............................... 46,525 2,803,131
Federal National Mortgage Association ......... 44,500 2,322,344
Morgan (J.P.) & Co., Inc. ..................... 4,700 517,587
U.S. Bancorp .................................. 33,750 649,687
-----------
13,142,440
-----------
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments June 30, 2000
--------------------------------------------------------------------------------
Balanced Fund (continued)
Shares Value
-------- -------------
COMMON STOCKS - (continued)
Health Care - 8.80%
ALZA Corp. * .................................. 7,800 $ 461,175
Baxter International, Inc. .................... 13,400 942,188
Bristol-Myers Squibb Co. ...................... 22,800 1,328,100
HCA Healthcare Corp. .......................... 13,325 404,747
IMS Health, Inc. .............................. 14,400 259,200
Johnson & Johnson ............................. 14,200 1,446,625
Lilly (Eli) & Co. ............................. 17,000 1,697,875
Merck & Co., Inc. ............................. 26,500 2,030,563
Pfizer, Inc. .................................. 50,875 2,442,000
Pharmacia Corp. ............................... 15,500 801,156
Schering-Plough Corp. ......................... 34,700 1,752,350
UnitedHealth Group, Inc. ...................... 11,250 964,688
-----------
14,530,667
-----------
Multi-Industry - 0.29%
Minnesota Mining & Mfg. Co. ................... 5,700 470,250
-----------
Raw Materials - 1.04%
Alcoa, Inc. ................................... 20,000 580,000
Dow Chemical Co. .............................. 18,000 543,375
Dupont (E.I.) de Nemours & Co. ................ 13,585 594,344
-----------
1,717,719
-----------
Retail - 2.93%
Abercrombie & Fitch Co. Cl. A * ............... 17,644 215,036
Albertson's, Inc. ............................. 23,050 766,413
Costco Wholesale Corp. * ...................... 16,000 528,000
May Department Stores Co. ..................... 22,425 538,200
Penney (J.C.), Co., Inc. ...................... 17,900 330,031
The Home Depot, Inc. .......................... 6,200 309,613
Walgreen Co. .................................. 22,000 708,125
Wal-Mart Stores, Inc. ......................... 25,100 1,446,388
-----------
4,841,806
-----------
Shelter - 0.39%
Georgia-Pacific Group ......................... 9,700 254,625
Kimberly-Clark Corp. .......................... 6,700 384,413
-----------
639,038
-----------
Technology - 19.44%
Agilent Technologies, Inc. * .................. 8,543 630,046
Applied Materials, Inc. * ..................... 2,400 217,500
BMC Software, Inc. * .......................... 11,600 423,219
Cisco Systems, Inc. * ......................... 59,600 3,788,325
Compaq Computer Corp. ......................... 67,434 1,723,782
Dell Computer Corp. * ......................... 12,800 631,200
EMC Corp. * ................................... 32,400 2,492,775
Hewlett-Packard Co. ........................... 22,400 2,797,200
Intel Corp. ................................... 36,600 4,892,963
International Business Machines Corp. ......... 26,800 2,936,275
Lucent Technologies, Inc. ..................... 35,928 2,128,734
Microsoft Corp. * ............................. 42,100 3,368,000
Motorola, Inc. ................................ 50,550 1,469,109
Nortel Networks Corp. ......................... 12,200 832,650
Parametric Technology Corp. * ................. 37,000 407,000
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments June 30, 2000
--------------------------------------------------------------------------------
Balanced Fund (continued)
Shares Value
-------- --------------
COMMON STOCKS - (continued)
Technology - (continued)
Seagate Technology, Inc. * ..................... 19,500 $ 1,072,500
Sun Microsystems, Inc. * ....................... 13,700 1,245,844
Texas Instruments, Inc. ........................ 11,000 755,563
Xerox Corp. .................................... 13,000 269,750
------------
32,082,435
------------
Transportation - 0.32%
AMR Corp. * .................................... 10,600 280,238
CSX Corp. ...................................... 12,000 254,250
------------
534,488
------------
Utilities - 5.36%
AT & T Corp. ................................... 26,625 842,016
Edison International ........................... 20,000 410,000
El Paso Energy Corp. ........................... 7,200 366,750
GTE Corp. ...................................... 21,100 1,313,475
PG&E Corp. ..................................... 17,063 420,176
SBC Communications, Inc. ....................... 38,334 1,657,946
Unicom Corp. ................................... 13,900 537,756
Vodafone AirTouch plc ADR ...................... 39,000 1,616,063
WorldCom, Inc. * ............................... 36,613 1,679,621
------------
8,843,803
------------
TOTAL COMMON STOCKS (Cost $77,176,219) ......... 100,638,373
------------
Principal
Amount
-----------
FIXED INCOME SECURITIES - 36.05%
Corporate Bonds - 10.08%
Bank and Insurance - 1.64%
Bank of America Corp.
6.63%, 10/15/07 .............................. $ 250,000 235,000
KeyCorp
6.75%, 03/15/06 .............................. 245,000 233,362
NationsBank Corp.
7.50%, 09/15/06 .............................. 275,000 272,250
6.38%, 02/15/08 .............................. 400,000 366,500
U.S. Bancorp ..................................
6.50%, 02/01/08 .............................. 1,650,000 1,507,687
Wells Fargo & Co.
6.25%, 04/15/08 .............................. 105,000 95,550
----------
2,710,349
----------
Financial Services - 5.13%
American General Finance Corp.
6.20%, 03/15/03 .............................. 600,000 582,000
Associates Corp. of North America
5.50%, 02/15/04 .............................. 25,000 23,281
6.10%, 01/15/05 .............................. 200,000 187,750
7.63%, 04/27/05 .............................. 125,000 124,844
7.55%, 07/17/06 .............................. 1,000,000 990,000
Beneficial Corp.
10.10%, 11/27/00 ............................. 150,000 151,857
6.75%, 07/20/04 .............................. 25,000 24,437
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments June 30, 2000
--------------------------------------------------------------------------------
Balanced Fund (continued)
Principal
Amount Value
---------- ------------
FIXED INCOME SECURITIES - (continued)
Financial Services - (continued)
6.96%, 02/13/06 .................... $150,000 $ 145,500
6.94%, 12/15/06 .................... 100,000 96,000
Citigroup, Inc.
6.63%, 09/15/05 .................... 150,000 145,500
Commercial Credit Co.
6.63%, 11/15/06 .................... 275,000 261,937
Finova Capital Corp.
6.50%, 07/28/02 .................... 460,000 410,550
6.75%, 03/09/09 .................... 300,000 244,875
Ford Motor Credit Co.
6.55%, 07/07/03 .................... 125,000 121,406
7.75%, 03/15/05 .................... 300,000 302,250
6.38%, 11/05/08 .................... 775,000 708,156
7.38%, 10/28/09 .................... 500,000 485,000
General Motors Acceptance Corp.
6.15%, 04/05/07 .................... 900,000 823,500
Household Finance Corp.
7.25%, 07/15/03 .................... 125,000 123,437
7.65%, 05/15/07 .................... 200,000 196,250
Lehman Brothers, Inc.
7.63%, 06/01/06 .................... 540,000 526,500
Merrill Lynch & Co., Inc.
6.00%, 07/15/05 .................... 25,000 23,437
6.56%, 12/16/07 .................... 250,000 232,813
Morgan Stanley Dean Witter & Co.
6.88%, 03/01/07 .................... 125,000 117,969
Salomon Smith Barney Holdings, Inc.
6.50%, 10/15/02 .................... 125,000 122,812
7.00%, 06/15/03 .................... 325,000 321,344
7.00%, 03/15/04 .................... 275,000 271,219
Sears Roebuck Acceptance Corp.
6.90%, 08/01/03 .................... 125,000 122,188
6.13%, 01/15/06 .................... 50,000 46,000
Transamerica Corp.
6.75%, 11/15/06 .................... 200,000 190,750
Transamerica Financial Corp.
7.51%, 04/15/02 .................... 30,000 30,038
Travelers Property Casualty Corp.
6.88%, 12/15/03 .................... 25,000 24,563
7.20%, 02/01/04 .................... 100,000 99,250
6.75%, 11/15/06 .................... 200,000 191,000
----------
8,468,413
----------
Industrial - 3.31%
Enron Corp.
6.63%, 11/15/05 .................... 750,000 718,125
6.40%, 07/15/06 .................... 150,000 141,000
MCI Worldcom, Inc.
8.25%, 05/15/10 .................... 500,000 512,500
Northwest Pipeline Corp.
6.63%, 12/01/07 .................... 800,000 761,000
Philip Morris Cos., Inc.
7.50%, 01/15/02 .................... 50,000 49,625
8.25%, 10/15/03 .................... 75,000 74,906
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments June 30, 2000
--------------------------------------------------------------------------------
Balanced Fund (continued)
Principal
Amount Value
------------ ------------
FIXED INCOME SECURITIES - (continued)
Industrial - (continued)
6.80%, 12/01/03 ................................. $ 30,000 $ 28,575
6.38%, 02/01/06 ................................. 25,000 22,438
Raytheon Co.
6.30%, 03/15/05 ................................. 750,000 705,938
6.15%, 11/01/08 ................................. 1,100,000 977,625
TCI Communications, Inc. (FRN) (MTN)
6.88%, 02/15/06 ................................. 825,000 803,344
Transcontinental Gas Pipeline
6.13%, 01/15/05 ................................. 300,000 285,375
6.25%, 01/15/08 ................................. 400,000 371,500
-----------
5,451,951
-----------
TOTAL CORPORATE BONDS (Cost $17,620,574) ......... 16,630,713
-----------
U.S. Government Agency Obligations - 11.21%
Federal Home Loan Bank - 1.58%
6.38%, 08/15/06 ................................. 2,685,000 2,597,550
-----------
Federal Home Loan Mortgage Corporation - 5.14%
6.75%, 05/30/06 ................................. 1,570,000 1,548,554
6.40%, 12/13/06 ................................. 275,000 266,002
7.10%, 04/10/07 ................................. 3,275,000 3,284,170
5.75%, 04/15/08 ................................. 3,380,000 3,103,854
6.50%, 11/15/22 ................................. 300,000 285,706
-----------
8,488,286
-----------
Federal National Mortgage Association - 2.99%
6.38%, 06/15/09 ................................. 4,931,000 4,680,702
0.00%, 10/09/19 ** .............................. 1,010,000 258,025
-----------
4,938,727
-----------
Resolution Funding Strip - 1.29%
0.00%, 07/15/12 ** .............................. 510,000 231,300
0.00%, 04/15/14 ** .............................. 150,000 60,393
0.00%, 10/15/15 ** .............................. 45,000 16,418
0.00%, 10/15/17 ** .............................. 1,190,000 380,717
0.00%, 04/15/18 ** .............................. 3,735,000 1,156,879
0.00%, 01/15/19 ** .............................. 980,000 289,443
-----------
2,135,150
-----------
Student Loan Marketing Association - 0.21%
6.35%, 03/17/03 ................................. 350,000 344,470
-----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $19,224,128) .............................. 18,504,183
-----------
Collateralized Mortgage Obligations - 14.41%
Federal Home Loan Mortgage Corporation - 10.66%
6.25%, 05/15/19 ................................. 100,000 99,042
6.50%, 10/15/19 ................................. 200,000 194,836
7.00%, 02/15/21 ................................. 100,000 98,344
5.50%, 04/15/21 ................................. 1,200,000 1,118,252
5.75%, 04/15/21 ................................. 50,000 49,170
6.00%, 09/15/21 ................................. 500,000 476,547
6.50%, 09/15/21 ................................. 550,000 530,483
5.95%, 11/15/21 ................................. 300,000 290,175
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments June 30, 2000
--------------------------------------------------------------------------------
Balanced Fund (continued)
Principal
Amount Value
------------ -------------
Collateralized Mortgage Obligations - (continued)
6.50%, 11/15/21 ............................... $ 300,000 $ 283,995
5.95%, 02/15/22 ............................... 700,000 666,330
6.00%, 02/15/22 ............................... 100,000 96,496
6.00%, 05/15/22 ............................... 450,000 416,205
6.65%, 07/15/22 ............................... 100,000 97,121
5.25%, 10/15/22 ............................... 1,000,000 905,385
6.25%, 11/15/22 ............................... 150,000 145,891
6.50%, 11/15/22 ............................... 100,000 96,564
7.00%, 01/15/23 ............................... 200,000 195,452
5.75%, 02/15/23 ............................... 1,000,000 922,785
6.00%, 02/15/23 ............................... 193,000 183,793
6.50%, 02/15/23 ............................... 400,000 388,452
6.75%, 05/15/23 ............................... 150,000 146,593
5.75%, 06/15/23 ............................... 800,000 740,516
5.75%, 09/15/23 ............................... 800,000 743,156
6.00%, 11/15/23 ............................... 1,100,000 1,031,299
6.00%, 12/15/23 ............................... 1,300,000 1,218,884
5.50%, 01/15/24 ............................... 1,500,000 1,358,992
6.00%, 01/15/24 ............................... 400,000 374,366
5.50%, 03/15/24 ............................... 600,000 544,380
5.75%, 03/15/24 ............................... 1,000,000 935,104
5.50%, 04/15/24 ............................... 500,000 455,848
5.75%, 07/15/24 ............................... 1,000,000 922,785
6.00%, 07/15/24 ............................... 500,000 467,998
6.00%, 11/15/24 ............................... 1,000,000 932,855
6.00%, 06/15/25 ............................... 500,000 462,158
-----------
17,590,252
-----------
Federal National Mortgage Association - 3.53%
6.75%, 11/25/20 ................................ 100,000 97,977
6.50%, 10/25/21 ................................ 600,000 579,354
6.50%, 11/25/21 ................................ 100,000 96,535
6.00%, 02/25/22 ................................ 500,000 476,035
6.50%, 04/25/22 ................................ 379,000 365,413
6.50%, 07/18/22 ................................ 500,000 479,545
6.00%, 07/25/22 ................................ 50,000 47,486
6.50%, 07/25/22 ................................ 350,000 338,020
5.75%, 12/25/22 ................................ 1,500,000 1,375,823
5.75%, 02/18/23 ................................ 1,000,000 928,425
7.00%, 06/25/23 ................................ 125,000 123,143
6.00%, 05/25/25 ................................ 1,000,000 926,835
-----------
5,834,591
-----------
Government National Mortgage Association - 0.22%
6.00%, 11/20/25 ................................ 400,000 367,606
-----------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $24,710,217).............................. 23,792,449
-----------
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments June 30, 2000
--------------------------------------------------------------------------------
Balanced Fund (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
------------ ---------------
<S> <C> <C>
U.S. Government Obligations - 0.35%
U.S. Treasury Notes
6.50%, 10/15/06 ......................................................................... $ 245,000 $ 247,732
6.25%, 02/15/07 ......................................................................... 325,000 325,406
------------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $579,701) .......................................... 573,138
------------
TOTAL FIXED INCOME SECURITIES (Cost $62,134,620).......................................... 59,500,483
------------
TOTAL INVESTMENTS - 97.01% (Cost $139,310,839)(1)......................................... 160,138,856
CASH AND OTHER ASSETS NET OF LIABILITIES - 2.99% ......................................... 4,927,529
------------
NET ASSETS - 100.00% ..................................................................... $165,066,385
============
(1) Aggregate cost for federal income tax purposes is $139,322,475
and net unrealized appreciation is as follows:
Gross unrealized appreciation ........................................................... $ 29,343,124
Gross unrealized depreciation ........................................................... (8,526,743)
------------
Net unrealized appreciation ............................................................ $ 20,816,381
============
</TABLE>
* Non-dividend paying stock
** Zero coupon bond
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments June 30, 2000
--------------------------------------------------------------------------------
Equity Investment Fund
Shares Value
---------- -------------
COMMON STOCKS - 98.80%
Business Equipment and Services - 0.95%
Automatic Data Processing, Inc. ............... 34,500 $ 1,847,906
Sabre Holdings Corp. * ........................ 22,040 628,140
-----------
2,476,046
-----------
Capital Goods - 8.98%
Cooper Industries, Inc. ....................... 25,500 830,344
Emerson Electric Co. .......................... 32,000 1,932,000
General Electric Co. .......................... 213,000 11,289,000
Honeywell International, Inc. ................. 19,500 656,906
PPG Industries, Inc. .......................... 32,500 1,440,156
Tyco International, Ltd. ...................... 152,200 7,210,475
-----------
23,358,881
-----------
Consumer Durables - 1.29%
Ford Motor Co. ................................ 48,000 2,064,000
General Motors Corp. .......................... 21,000 1,219,312
Visteon Corp. * ............................... 6,285 76,201
-----------
3,359,513
-----------
Consumer Non-Durables - 4.88%
Anheuser-Busch Cos., Inc. ..................... 18,900 1,411,594
Bestfoods ..................................... 13,500 934,875
Eastman Kodak Co. ............................. 20,550 1,222,725
PepsiCo, Inc. ................................. 70,000 3,110,625
Philip Morris Cos., Inc. ...................... 121,100 3,216,719
Procter & Gamble Co. .......................... 24,400 1,396,900
Sara Lee Corp. ................................ 71,500 1,380,844
-----------
12,674,282
-----------
Consumer Services - 1.86%
Disney (Walt) Co. ............................. 36,600 1,420,537
Knight-Ridder, Inc. ........................... 22,000 1,170,125
Time Warner, Inc. ............................. 29,500 2,242,000
-----------
4,832,662
-----------
Energy - 5.29%
BP Amoco Plc. ................................. 59,000 3,337,187
Burlington Resources, Inc. .................... 11,800 451,350
Chevron Corp. ................................. 17,300 1,467,256
Exxon Mobil Corp. ............................. 47,500 3,728,750
Royal Dutch Petroleum Co. ..................... 22,050 1,357,453
Schlumberger, Ltd. ............................ 18,200 1,358,175
Texaco, Inc. .................................. 38,500 2,050,125
-----------
13,750,296
-----------
Financial Services - 12.94%
American International Group, Inc. ............ 30,800 3,619,000
Associates First Capital Corp. Cl. A .......... 56,506 1,260,790
Bank of America Corp. ......................... 87,025 3,742,075
Bank One Corp. ................................ 43,000 1,142,187
Chase Manhattan Corp. ......................... 132,300 6,094,069
Chubb Corp. ................................... 32,080 1,972,920
Citigroup, Inc. ............................... 119,700 7,211,925
Federal National Mortgage Association ......... 111,000 5,792,812
Morgan (J.P.) & Co., Inc. ..................... 12,000 1,321,500
U.S. Bancorp .................................. 78,000 1,501,500
-----------
33,658,778
-----------
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments June 30, 2000
--------------------------------------------------------------------------------
Equity Investment Fund (continued)
Shares Value
---------- -------------
COMMON STOCKS - 98.80% - (continued)
Health Care - 14.32%
ALZA Corp. Cl.A * ............................. 19,500 $ 1,152,937
Baxter International, Inc. .................... 32,600 2,292,187
Bristol-Myers Squibb Co. ...................... 59,500 3,465,875
HCA Healthcare Corp. .......................... 42,050 1,277,269
IMS Health, Inc. .............................. 33,000 594,000
Johnson & Johnson ............................. 33,000 3,361,875
Lilly (Eli) & Co. ............................. 44,500 4,444,438
Merck & Co., Inc. ............................. 68,020 5,212,033
Pfizer, Inc. .................................. 130,625 6,270,000
Pharmacia Corp. ............................... 37,900 1,958,956
Schering-Plough Corp. ......................... 90,000 4,545,000
UnitedHealth Group, Inc. ...................... 31,000 2,658,250
-----------
37,232,820
-----------
Multi-Industry - 0.43%
Minnesota Mining & Mfg. Co. ................... 13,530 1,116,225
-----------
Raw Materials - 1.67%
Alcoa, Inc. ................................... 53,600 1,554,400
Dow Chemical Co. .............................. 33,900 1,023,356
Dupont (E.I.) de Nemours & Co. ................ 40,004 1,750,175
-----------
4,327,931
-----------
Retail - 4.67%
Abercrombie & Fitch Co. Cl. A * ............... 43,014 524,233
Albertson's, Inc. ............................. 59,000 1,961,750
Costco Wholesale Corp. * ...................... 44,000 1,452,000
May Department Stores Co. ..................... 44,250 1,062,000
Penney (J.C.), Co., Inc. ...................... 39,000 719,063
The Home Depot, Inc. .......................... 16,300 813,981
Walgreen Co. .................................. 65,500 2,108,281
Wal-Mart Stores, Inc. ......................... 61,000 3,515,125
-----------
12,156,433
-----------
Shelter - 0.66%
Georgia-Pacific Group ......................... 26,500 695,625
Kimberly-Clark Corp. .......................... 17,900 1,027,013
-----------
1,722,638
-----------
Technology - 31.48%
Agilent Technologies, Inc. * .................. 20,023 1,476,696
BMC Software, Inc. * .......................... 32,800 1,196,688
Cisco Systems, Inc. * ......................... 151,200 9,610,650
Compaq Computer Corp. ......................... 170,024 4,346,239
Dell Computer Corp. * ......................... 37,500 1,849,219
EMC Corp. * ................................... 84,000 6,462,750
Hewlett-Packard Co. ........................... 52,500 6,555,938
Intel Corp. ................................... 93,000 12,432,938
International Business Machines Corp. ......... 67,800 7,428,338
Lucent Technologies, Inc. ..................... 98,500 5,836,125
Microsoft Corp. * ............................. 106,000 8,480,000
Motorola, Inc. ................................ 138,000 4,010,625
Nortel Networks Corp. ......................... 35,600 2,429,700
Parametric Technology Corp. * ................. 79,000 869,000
Seagate Technology, Inc. * .................... 47,200 2,596,000
Sun Microsystems, Inc. * ...................... 34,000 3,091,875
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments June 30, 2000
--------------------------------------------------------------------------------
Equity Investment Fund (continued)
Shares Value
---------- ---------------
COMMON STOCKS - 98.80% - (continued)
Texas Instruments, Inc. ............................ 32,600 $ 2,239,213
Xerox Corp. ........................................ 45,000 933,750
-------------
81,845,744
-------------
Transportation - 0.63%
AMR Corp. * ........................................ 30,500 806,344
CSX Corp. .......................................... 39,500 836,906
-------------
1,643,250
-------------
Utilities - 8.75%
AT & T Corp. ....................................... 62,200 1,967,075
Edison International ............................... 55,000 1,127,500
El Paso Natural Gas Co. ............................ 31,000 1,579,063
GTE Corp. .......................................... 52,100 3,243,225
PG&E Corp. ......................................... 51,570 1,269,911
SBC Communications, Inc. ........................... 84,145 3,639,271
Unicom Corp. ....................................... 33,000 1,276,688
Vodafone AirTouch plc ADR .......................... 102,750 4,257,703
WorldCom, Inc. * ................................... 95,550 4,383,356
-------------
22,743,792
-------------
TOTAL COMMON STOCKS - 98.80% (Cost $198,840,532)(1). 256,899,291
CASH AND OTHER ASSETS NET OF LIABILITIES - 1.20% ... 3,133,222
-------------
NET ASSETS - 100.00% ............................... $ 260,032,513
=============
(1) Aggregate cost for federal income tax purposes is $198,840,532
and net unrealized appreciation is
as follows:
Gross unrealized appreciation .................................. $ 71,766,122
Gross unrealized depreciation .................................. (13,707,363)
-------------
Net unrealized appreciation ................................... $ 58,058,759
=============
* Non-dividend paying stock
See accompanying notes to financial statements.
<PAGE>
Statements of Assets and Liabilities June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
McM
McM Intermediate
Principal Fixed
Preservation Income
Fund Fund
-------------- ----------------
<S> <C> <C>
Assets:
Investments in securities at value (cost $70,213,332,
$172,465,922, $22,608,099, $139,310,839 and
$198,840,532, respectively) ............................. $70,213,332 $167,138,905
Cash-interest bearing accounts ........................... 709,967 2,254,594
Dividends and interest receivable ........................ 160,263 1,905,376
Receivable for fund shares sold .......................... 15,986 0
Other receivables ........................................ 1,334 11,299
Other assets ............................................. 1,251 3,225
----------- ------------
Total assets ............................................ 71,102,133 171,313,399
----------- ------------
Liabilities:
Payable for securities purchased ......................... 0 430,008
Fund shares redeemed ..................................... 35,318 0
Distributions payable .................................... 12,008 0
Accrued expenses ......................................... 11,030 20,702
Payable to advisor, net .................................. 5,692 40,798
----------- ------------
Total liabilities ....................................... 64,048 491,508
----------- ------------
Net Assets:
Applicable to 71,043,372, 17,099,009, 2,154,931,
8,282,007 and 8,619,612 shares outstanding,
respectively ............................................ $71,038,085 $170,821,891
=========== ============
Net Assets Consist of:
Capital paid-in .......................................... $71,024,952 $176,117,476
Accumulated undistributed net investment income .......... 18,420 449,316
Accumulated net realized gain/(loss) on investments . (5,287) (417,884)
Net unrealized appreciation/(depreciation)
on investments .......................................... 0 (5,327,017)
----------- ------------
$71,038,085 $170,821,891
=========== ============
Net asset value and redemption price per share ............ $ 1.00 $ 9.99
=========== ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
McM McM
Fixed McM Equity
Income Balanced Investment
Fund Fund Fund
-------------- ----------------- -----------------
<S> <C> <C> <C>
Assets:
Investments in securities at value (cost $70,213,332,
$172,465,922, $22,608,099, $139,310,839 and
$198,840,532, respectively) ............................. $21,746,237 $ 160,138,856 $ 256,899,291
Cash-interest bearing accounts ........................... 66,616 4,269,545 4,290,695
Dividends and interest receivable ........................ 247,630 733,318 307,533
Receivable for fund shares sold .......................... 923 6,786 387,823
Other receivables ........................................ 626 18,135 10,786
Other assets ............................................. 587 3,227 6,147
----------- ------------- -------------
Total assets ............................................ 22,062,619 165,169,867 261,902,275
----------- ------------- -------------
Liabilities:
Payable for securities purchased ......................... 0 0 1,732,328
Fund shares redeemed ..................................... 0 30,419 2,293
Distributions payable .................................... 0 0 0
Accrued expenses ......................................... 10,858 20,652 28,586
Payable to advisor, net .................................. 6,932 52,411 106,555
----------- ------------- -------------
Total liabilities ....................................... 17,790 103,482 1,869,762
----------- ------------- -------------
Net Assets:
Applicable to 71,043,372, 17,099,009, 2,154,931,
8,282,007 and 8,619,612 shares outstanding,
respectively ............................................ $22,044,829 $ 165,066,385 $ 260,032,513
=========== ============= =============
Net Assets Consist of:
Capital paid-in .......................................... $23,254,627 $ 137,564,903 $ 188,176,230
Accumulated undistributed net investment income .......... 78,765 219,897 92,174
Accumulated net realized gain/(loss) on investments . (426,701) 6,453,568 13,705,350
Net unrealized appreciation/(depreciation)
on investments .......................................... (861,862) 20,828,017 58,058,759
----------- ------------- -------------
$22,044,829 $ 165,066,385 $ 260,032,513
=========== ============= =============
Net asset value and redemption price per share ............ $ 10.23 $ 19.93 $ 30.17
=========== ============= =============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
Statements of Operations
For the year ended June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
McM
McM Intermediate
Principal Fixed
Preservation Income
Fund Fund
-------------- --------------
<S> <C> <C>
Investment Income:
Dividends (net of foreign withholding taxes of $0, $0, $0,
$960 and $2,647, respectively)........................... $ 0 $ 0
Interest ................................................. 4,017,068 10,275,789
---------- ------------
Total investment income ................................. 4,017,068 10,275,789
---------- ------------
Expenses:
Investment advisory fees (Note E) ........................ 178,656 569,652
Transfer agent fees ...................................... 45,763 32,832
Administration fees ...................................... 38,082 94,208
Accounting fees .......................................... 36,822 56,061
Legal fees ............................................... 4,729 11,039
Custodian fees ........................................... 20,536 24,447
Insurance fees ........................................... 6,869 17,883
Registration expenses .................................... 15,020 17,507
Amortization of organization costs (Note A) .............. 925 925
Report to shareholder expense ............................ 3,606 6,350
Auditing fees ............................................ 9,000 12,000
Trustees fees ............................................ 3,342 6,932
Miscellaneous expenses ................................... 0 0
---------- ------------
Total expenses .......................................... 363,350 849,836
Expenses reimbursed (Note E) ............................. (148,962) (36,048)
Expense reimbursement recovery (Note E) .................. 0 0
---------- ------------
Net expenses ............................................ 214,388 813,788
---------- ------------
Net Investment Income ..................................... 3,802,680 9,462,001
---------- ------------
Realized and Unrealized Gain/(Loss) on Investments:
Net realized gain/(loss) on investments .................. (5,588) (495,500)
Net change in unrealized appreciation/(depreciation) on
investments ............................................. 0 (3,212,494)
---------- ------------
Net realized and unrealized gain/(loss) on investments ... (5,588) (3,707,994)
---------- ------------
Increase in Net Assets from Operations .................... $3,797,092 $ 5,754,007
========== ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
McM McM
Fixed McM Equity
Income Balanced Investment
Fund Fund Fund
------------- -------------- ----------------
<S> <C> <C> <C>
Investment Income:
Dividends (net of foreign withholding taxes of $0, $0, $0,
$960 and $2,647, respectively)........................... $ 0 $ 1,384,080 $ 3,243,478
Interest ................................................. 1,724,861 4,184,076 174,475
---------- ------------ --------------
Total investment income ................................. 1,724,861 5,568,156 3,417,953
---------- ------------ --------------
Expenses:
Investment advisory fees (Note E) ........................ 93,299 742,714 1,174,356
Transfer agent fees ...................................... 29,333 51,528 67,365
Administration fees ...................................... 12,292 95,523 135,138
Accounting fees .......................................... 33,027 57,569 66,220
Legal fees ............................................... 2,111 10,836 14,181
Custodian fees ........................................... 5,515 30,187 44,874
Insurance fees ........................................... 3,328 17,330 23,548
Registration expenses .................................... 8,758 19,239 16,417
Amortization of organization costs (Note A) .............. 925 925 925
Report to shareholder expense ............................ 1,409 7,669 10,270
Auditing fees ............................................ 11,982 17,205 17,000
Trustees fees ............................................ 1,294 7,426 10,362
Miscellaneous expenses ................................... 0 0 0
---------- ------------ --------------
Total expenses .......................................... 203,273 1,058,151 1,580,656
Expenses reimbursed (Note E) ............................. (69,988) (67,866) 0
Expense reimbursement recovery (Note E) .................. 0 0 18,275
---------- ------------ --------------
Net expenses ............................................ 133,285 990,285 1,598,931
---------- ------------ --------------
Net Investment Income ..................................... 1,591,576 4,577,871 1,819,022
---------- ------------ --------------
Realized and Unrealized Gain/(Loss) on Investments:
Net realized gain/(loss) on investments .................. (427,842) 7,441,836 14,580,356
Net change in unrealized appreciation/(depreciation) on
investments ............................................. (358,308) (6,896,156) (10,449,851)
---------- ------------ --------------
Net realized and unrealized gain/(loss) on investments ... (786,150) 545,680 4,130,505
---------- ------------ --------------
Increase in Net Assets from Operations .................... $ 805,426 $ 5,123,551 $ 5,949,527
========== ============ ==============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
Statements of Changes in Net Assets
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
McM Principal
Preservation Fund
---------------------------------
For the For the
Year Ended Year Ended
06/30/00 06/30/99
---------------- ---------------
Operations:
<S> <C> <C>
Net investment income .......................... $ 3,802,680 $ 2,441,008
Net realized gain/(loss) on investments ........ (5,588) 2,155
Net change in unrealized appreciation/
(depreciation) on investments ................. 0 0
-------------- ------------
Increase in net assets ......................... 3,797,092 2,443,163
-------------- ------------
Dividends and Distributions to Shareholders:
From net investment income ..................... (3,802,680) (2,441,008)
From capital gains ............................. 0 0
-------------- ------------
Total Distributions ............................ (3,802,680) (2,441,008)
-------------- ------------
Capital Share Transactions -- Note C ............ (14,896,484) 37,754,370
-------------- ------------
Total increase/(decrease) in net assets ........ (14,902,072) 37,756,525
Net Assets:
Beginning of year .............................. 85,940,157 48,183,632
-------------- ------------
End of year (including undistributed
net investment income of $18,420, $0,
$449,316, $441,961, $78,765, and $87,028,
respectively) ................................. $ 71,038,085 $ 85,940,157
============== ============
<CAPTION>
McM Intermediate McM Fixed
Fixed Income Fund Income Fund
--------------------------------- ---------------------------------
For the For the For the For the
Year Ended Year Ended Year Ended Year Ended
06/30/00 06/30/99 06/30/00 06/30/99
---------------- --------------- -------------- ---------------
Operations:
<S> <C> <C> <C> <C>
Net investment income .......................... $ 9,462,001 $ 7,449,008 $ 1,591,576 $ 1,426,949
Net realized gain/(loss) on investments ........ (495,500) 597,813 (427,842) 75,632
Net change in unrealized appreciation/
(depreciation) on investments ................. (3,212,494) (4,236,490) (358,308) (1,005,410)
------------ ------------ ------------ ------------
Increase in net assets ......................... 5,754,007 3,810,331 805,426 497,171
------------ ------------ ------------ ------------
Dividends and Distributions to Shareholders:
From net investment income ..................... (9,472,699) (7,409,528) (1,617,916) (1,411,983)
From capital gains ............................. (468,387) (509,217) (47,400) (51,503)
------------ ------------ ------------ ------------
Total Distributions ............................ (9,941,086) (7,918,745) (1,665,316) (1,463,486)
------------ ------------ ------------ ------------
Capital Share Transactions -- Note C ............ 21,913,063 35,493,900 (4,503,229) 6,172,570
------------ ------------ ------------ ------------
Total increase/(decrease) in net assets ........ 17,725,984 31,385,486 (5,363,119) 5,206,255
Net Assets:
Beginning of year .............................. 153,095,907 121,710,421 27,407,948 22,201,693
------------ ------------ ------------ ------------
End of year (including undistributed
net investment income of $18,420, $0,
$449,316, $441,961, $78,765, and $87,028,
respectively) ................................. $170,821,891 $153,095,907 $ 22,044,829 $ 27,407,948
============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
Statements of Changes in Net Assets (continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
McM Balanced McM Equity
Fund Investment Fund
--------------------------------- ----------------------------------
For the For the For the For the
Year Ended Year Ended Year Ended Year Ended
06/30/00 06/30/99 06/30/00 06/30/99
--------------- --------------- ---------------- ---------------
Operations:
<S> <C> <C> <C> <C>
Net investment income ....................... $ 4,577,871 $ 3,231,926 $ 1,819,022 $ 1,429,932
Net realized gain on investments ............ 7,441,836 1,602,359 14,580,356 3,413,177
Net change in unrealized appreciation/
(depreciation) on investments .............. (6,896,156) 11,701,078 (10,449,851) 31,837,120
------------ ------------ ------------- ------------
Increase in net assets ...................... 5,123,551 16,535,363 5,949,527 36,680,229
------------ ------------ ------------- ------------
Dividends and Distributions to Shareholders:
From net investment income .................. (4,607,074) (3,129,415) (1,830,350) (1,362,745)
From capital gains .......................... (2,514,380) (404,513) (3,847,903) (860,636)
------------ ------------ ------------- ------------
Total Distributions ......................... (7,121,454) (3,533,928) (5,678,253) (2,223,381)
------------ ------------ ------------- ------------
Capital Share Transactions -- Note C ......... 12,448,790 48,413,109 55,659,421 41,103,947
------------ ------------ ------------- ------------
Total increase in net assets ................ 10,450,887 61,414,544 55,930,695 75,560,795
Net Assets:
Beginning of year ........................... 154,615,498 93,200,954 204,101,818 128,541,023
------------ ------------ ------------- ------------
End of year (including undistributed
net investment income of $219,897,
$231,046, $92,174 and $85,449, respec-
tively) .................................... $165,066,385 $154,615,498 $ 260,032,513 $204,101,818
============ ============ ============= ============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
Financial Highlights
--------------------------------------------------------------------------------
The tables below set forth financial data for a share of beneficial interest
outstanding throughout each period presented.
<TABLE>
<CAPTION>
McM Principal
Preservation Fund
-----------------------------------------------------------------------
For the For the For the For the For the
Year Ended Year Ended Year Ended Year Ended Year Ended
06/30/00 06/30/99 06/30/98 06/30/97 06/30/96
------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning of year ............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- -------
Income from investment operations
Net investment income ......................... 0.05 0.05 0.05 0.05 0.05
------- ------- ------- ------- -------
Total from investment operations ............. 0.05 0.05 0.05 0.05 0.05
------- ------- ------- ------- -------
Less Distributions:
From net investment income .................... (0.05) (0.05) (0.05) (0.05) (0.05)
------- ------- ------- ------- -------
Total distributions .......................... (0.05) (0.05) (0.05) (0.05) (0.05)
------- ------- ------- ------- -------
Net Asset Value, end of year ................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= =======
Total return ................................... 5.48% 4.97% 5.41% 5.24% 5.39%
Ratios/Supplemental Data
Net assets, end of year (in 000's) ............ $71,038 $85,940 $48,184 $32,703 $24,195
Ratio of expenses to average net assets before
reimbursement and recovery of expenses by
Advisor ...................................... 0.51% 0.61% 0.67% 0.77% 0.93%
Ratio of expenses to average net assets after
reimbursement of expenses by Advisor ......... 0.30% 0.30% 0.30% 0.30% 0.30%
Ratio of net investment income to average net
assets before reimbursement of expenses by
Advisor ...................................... 5.11% 4.53% 4.92% 4.65% 4.60%
Ratio of net investment income to average net
assets after reimbursement of expenses by
Advisor ...................................... 5.32% 4.84% 5.29% 5.12% 5.23%
Portfolio turnover ............................ N/A N/A N/A N/A N/A
</TABLE>
See accompanying notes to financial statements.
<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
Fixed Income Fund
-----------------------------------------------------------------------
For the For the For the For the For the
Year Ended Year Ended Year Ended Year Ended Year Ended
06/30/00 06/30/99 06/30/98 06/30/97 06/30/96
------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning of year ............. $ 10.26 $ 10.53 $ 10.26 $ 10.17 $ 10.37
-------- -------- -------- ------- -------
Income from investment operations
Net investment income ......................... 0.58 0.57 0.60 0.60 0.57
Net realized and unrealized gain/(loss) on
investments .................................. (0.23) (0.23) 0.27 0.11 (0.10)
-------- -------- -------- ------- -------
Total from investment operations ............. 0.35 0.34 0.87 0.71 0.47
-------- -------- -------- ------- -------
Less Distributions:
From net investment income .................... (0.59) (0.57) (0.60) (0.60) (0.57)
From capital gains ............................ (0.03) (0.04) 0.00 (0.02) (0.10)
-------- -------- -------- ------- -------
Total distributions .......................... (0.62) (0.61) (0.60) (0.62) ( 0.67)
-------- -------- -------- ------- -------
Net Asset Value, end of year ................... $ 9.99 $ 10.26 $ 10.53 $ 10.26 $ 10.17
======== ======== ======== ======= =======
Total return ................................... 3.51% 3.25% 8.68% 7.14% 4.61%
Ratios/Supplemental Data
Net assets, end of year (in 000's) ............ $170,822 $153,096 $121,710 $93,402 $76,045
Ratio of expenses to average net assets before
reimbursement and recovery of expenses by
Advisor ...................................... 0.52% 0.52% 0.55% 0.59% 0.69%
Ratio of expenses to average net assets after
reimbursement of expenses by Advisor ......... 0.50% 0.50% 0.50% 0.50% 0.50%
Ratio of net investment income to average net
assets before reimbursement of expenses by
Advisor ...................................... 5.79% 5.40% 5.74% 5.80% 5.52%
Ratio of net investment income to average net
assets after reimbursement of expenses by
Advisor ...................................... 5.81% 5.42% 5.79% 5.89% 5.71%
Portfolio turnover ............................ 25.34% 40.40% 45.44% 36.02% 75.26%
</TABLE>
See accompanying notes to financial statements.
<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 Fixed
Income Fund
-----------------------------------------------------------------------
For the For the For the For the For the
Year Ended Year Ended Year Ended Year Ended Year Ended
06/30/00 06/30/99 06/30/98 06/30/97 06/30/96
------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning of year ............. $ 10.52 $ 10.89 $ 10.44 $10.33 $10.58
------- ------- ------- ------ ------
Income from investment operations
Net investment income ......................... 0.63 0.61 0.62 0.65 0.64
Net realized and unrealized gain/(loss) on
investments .................................. (0.27) (0.35) 0.47 0.12 (0.20)
------- ------- ------- ------ ------
Total from investment operations ............ 0.36 0.26 1.09 0.77 0.44
------- ------- ------- ------ ------
Less Distributions:
From net investment income .................... (0.63) (0.61) (0.62) (0.65) (0.63)
From capital gains ............................ (0.02) (0.02) (0.02) (0.01) (0.06)
------- ------- ------- ------ ------
Total distributions ......................... (0.65) (0.63) (0.64) (0.66) (0.69)
------- ------- ------- ------ ------
Net Asset Value, end of year ................... $ 10.23 $ 10.52 $ 10.89 $10.44 $10.33
======= ======= ======= ====== ======
Total return ................................... 3.52% 2.34% 10.71% 7.72% 4.16%
Ratios/Supplemental Data
Net assets, end of year (in 000's) ............ $22,045 $27,408 $22,202 $9,565 $7,992
Ratio of expenses to average net assets before
reimbursement and recovery of expenses by
Advisor ...................................... 0.76% 0.93% 1.17% 1.57% 1.82%
Ratio of expenses to average net assets after
reimbursement of expenses by Advisor ......... 0.50% 0.50% 0.50% 0.50% 0.50%
Ratio of net investment income to average net
assets before reimbursement of expenses by
Advisor ...................................... 5.71% 5.16% 5.26% 5.25% 4.70%
Ratio of net investment income to average net
assets after reimbursement of expenses by
Advisor ...................................... 5.97% 5.59% 5.93% 6.32% 6.02%
Portfolio turnover ............................ 27.59% 29.32% 58.22% 32.46% 37.62%
</TABLE>
See accompanying notes to financial statements.
<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 Balanced
Fund
-----------------------------------------------------------------------
For the For the For the For the For the
Year Ended Year Ended Year Ended Year Ended Year Ended
06/30/00 06/30/99 06/30/98 06/30/97 06/30/96
------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning of year ................. $ 20.15 $ 18.12 $ 15.30 $ 12.75 $ 11.35
-------- -------- ------- ------- -------
Income from investment operations
Net investment income ............................. 0.55 0.50 0.47 0.43 0.40
Net realized and unrealized gain on investments ... 0.07 2.10 2.82 2.54 1.49
-------- -------- ------- ------- -------
Total from investment operations ................. 0.62 2.60 3.29 2.97 1.89
-------- -------- ------- ------- -------
Less Distributions:
From net investment income ........................ (0.55) (0.50) (0.47) (0.42) (0.40)
From capital gains ................................ (0.29) (0.07) 0.00 0.00 (0.09)
-------- -------- ------- ------- -------
Total distributions .............................. (0.84) (0.57) (0.47) (0.42) (0.49)
-------- -------- ------- ------- -------
Net Asset Value, end of year ....................... $ 19.93 $ 20.15 $ 18.12 $ 15.30 $ 12.75
======== ======== ======= ======= =======
Total return ....................................... 3.17% 14.60% 21.76% 23.65% 16.86%
Ratios/Supplemental Data
Net assets, end of year (in 000's) ................ $165,066 $154,615 $93,201 $40,941 $11,915
Ratio of expenses to average net assets before
reimbursement and recovery of expenses by
Advisor .......................................... 0.64% 0.64% 0.74% 1.01% 2.21%
Ratio of expenses to average net assets after
reimbursement and recovery of expenses by
Advisor .......................................... 0.60% 0.60% 0.60% 0.60% 0.60%
Ratio of net investment income to average net
assets before reimbursement and recovery of
expenses by Advisor .............................. 2.73% 2.70% 2.87% 2.97% 1.81%
Ratio of net investment income to average net
assets after reimbursement and recovery of
expenses by Advisor .............................. 2.77% 2.74% 3.01% 3.38% 3.43%
Portfolio turnover ................................ 22.44% 18.58% 20.73% 31.64% 26.16%
</TABLE>
See accompanying notes to financial statements.
<PAGE>
Financial Highlights (continued)
--------------------------------------------------------------------------------
The tables below set forth financial data for a share of beneficial interest
outstanding throughout each period presented.
<TABLE>
<CAPTION>
For the For the For the For the For the
Year Ended Year Ended Year Ended Year Ended Year Ended
06/30/00 06/30/99 06/30/98 06/30/97 06/30/96
------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning of year .......................... $ 30.37 $ 25.29 $ 19.71 $ 14.85 $ 11.95
-------- -------- -------- ------- -------
Income from investment operations ..........................
Net investment income ...................................... 0.23 0.23 0.23 0.24 0.21
Net realized and unrealized gain on investments . .......... 0.30 5.21 5.62 4.87 2.94
-------- -------- -------- ------- -------
Total from investment operations .......................... 0.53 5.44 5.85 5.11 3.15
-------- -------- -------- ------- -------
Less Distributions: ........................................
From net investment income ................................. (0.23) (0.22) (0.23) (0.24) (0.21)
From capital gains ......................................... (0.50) (0.14) (0.04) (0.01) (0.04)
-------- -------- -------- ------- -------
Total distributions ....................................... (0.73) (0.36) (0.27) (0.25) (0.25)
-------- -------- -------- ------- -------
Net Asset Value, end of year ................................ $ 30.17 $ 30.37 $ 25.29 $ 19.71 $ 14.85
======== ======== ======== ======= =======
Total return ................................................ 1.80% 21.70% 29.89% 34.68% 26.53%
Ratios/Supplemental Data ....................................
Net assets, end of year (in 000's) ......................... $260,033 $204,102 $128,541 $58,593 $23,913
Ratio of expenses to average net assets
before reimbursement and recovery of expenses by
Advisor .................................................. 0.67% 0.66% 0.75% 0.88% 1.72%
Ratio of expenses to average net assets after reimburse-
ment and recovery of expenses by Advisor .................. 0.68% 0.75% 0.75% 0.75% 0.75%
Ratio of net investment income to average net assets
before reimbursement and recovery of expenses by
Advisor ................................................... 0.78% 0.95% 1.05% 1.36% 0.80%
Ratio of net investment income to average net assets
after reimbursement and recovery of expenses by
Advisor ................................................... 0.77% 0.86% 1.05% 1.49% 1.77%
Portfolio turnover ......................................... 13.68% 4.79% 0.57% 0.88% 0.92%
</TABLE>
See accompanying notes to financial statements.
<PAGE>
McM FUNDS -- Notes to Financial Statements June 30, 2000
--------------------------------------------------------------------------------
Note (A) Significant Accounting Policies: McM Funds (the "Trust") is a Delaware
business trust, currently issuing five series of shares of beneficial interest
(collectively, the "Funds"): McM Principal Preservation Fund (the "Principal
Preservation Fund"), McM Intermediate Fixed Income Fund (the "Intermediate
Fixed Income Fund"), McM Fixed Income Fund (the "Fixed Income Fund"), McM
Balanced Fund (the "Balanced Fund") and McM Equity Investment Fund (the "Equity
Investment Fund"). The Trust is a no-load, open-end management investment
company which is registered under the Investment Company Act of 1940, as
amended (the "Act"). The Trust was organized as a Delaware business trust on
February 3, 1994. The Principal Preservation Fund commenced investment
operations on July 13, 1994. The Intermediate Fixed Income Fund, Fixed Income
Fund, Balanced Fund and Equity Investment Fund commenced investment operations
on July 14, 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 & Company (the "Advisor"). No officer or
employee of the Advisor receives any compensation from the Funds for acting as
a trustee of the Funds. All Trust officers serve without direct compensation
from the Funds. 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 New York Stock
Exchange. 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, the Fund
may experience delay or difficulty in exercising its right to the
collateral. In addition, the Funds 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) June 30, 2000
--------------------------------------------------------------------------------
(4) Federal Income Taxes: The Trust has elected to be treated as a
"regulated investment company" under Sub-chapter M of the Internal Revenue
Code and to distribute substantially all of the Funds' net taxable income.
Each Fund qualified for such treatment for the year ended June 30, 2000.
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) Use of Estimates: In preparing financial statements in conformity with
generally accepted accounting principles, management makes estimates and
assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements, as well as the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
(7) Organization Costs: Organization costs, which were being amortized on
a straight-line basis over five years, were completely amortized on July
31, 1999.
Note (B) Dividends from Net Investment Income and Distributions of Capital
Gains: 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. The Intermediate Fixed Income Fund and the Fixed Income
Fund distribute their respective net investment income to shareholders monthly
and net capital gains, if any, are distributed annually. With respect to the
Balanced Fund and the Equity Investment Fund, dividends from net investment
income are distributed quarterly and net realized gains from investment
transactions, if any, are distributed to shareholders annually.
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>
PRINCIPAL PRESERVATION FUND
Year Ended Year Ended
June 30, 2000 June 30, 1999
Shares Amount Shares Amount
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Shares sold ...................... 210,631,314 $ 210,631,314 204,601,680 $ 204,601,680
Shares issued through
reinvestment of dividends ....... 3,648,571 3,648,571 2,334,795 2,334,795
Shares redeemed .................. (229,176,369) (229,176,369) (169,182,105) (169,182,105)
------------ -------------- ------------ ---------------
Net Increase/(decrease) .......... (14,896,484) $ (14,896,484) 37,754,370 $ 37,754,370
============ ============== ============ ===============
<CAPTION>
INTERMEDIATE FIXED INCOME FUND
Year Ended Year Ended
June 30, 2000 June 30, 1999
Shares Amount Shares Amount
--------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
Shares sold ...................... 3,536,075 $ 35,509,789 4,079,524 $ 43,112,966
Shares issued through
reinvestment of dividends ....... 974,435 9,768,320 738,623 7,776,483
Shares redeemed .................. (2,326,439) (23,365,046) (1,457,991) (15,395,549)
---------- -------------- ---------- --------------
Net Increase/(decrease) .......... 2,184,071 $ 21,913,063 3,360,156 $ 35,493,900
========== ============== ========== ==============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIXED INCOME FUND
-------------------------------------------------------------------
Year Ended Year Ended
June 30, 2000 June 30, 1999
Shares Amount Shares Amount
-------------- ---------------- -------------- -----------------
<S> <C> <C> <C> <C>
Shares sold ...................... 612,142 $ 6,188,173 616,046 $ 6,728,274
Shares issued through
reinvestment of dividends ....... 155,944 1,602,179 134,206 1,460,844
Shares redeemed .................. (1,218,728) (12,293,581) (184,316) (2,016,548)
------------ ------------- ------------ --------------
Net Increase/(decrease) .......... (450,642) $ (4,503,229) 565,936 $ 6,172,570
============ ============= ============ ==============
BALANCED FUND
----------------------------------------------------------------
Year Ended Year Ended
June 30, 2000 June 30, 1999
Shares Amount Shares Amount
--------------- ---------------- ------------ ---------------
<S> <C> <C> <C> <C>
Shares sold ...................... 2,415,005 $ 47,913,204 2,831,668 $ 54,224,052
Shares issued through
reinvestment of dividends ....... 356,596 7,055,453 184,581 3,481,542
Shares redeemed .................. (2,164,066) (42,519,867) (484,240) (9,292,485)
---------- ------------- --------- ------------
Net Increase/(decrease) .......... 607,535 $ 12,448,790 2,532,009 $ 48,413,109
========== ============= ========= ============
</TABLE>
<PAGE>
McM FUNDS -- Notes to Financial Statements (continued) June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY INVESTMENT FUND
---------------------------------------------------------------------
Year Ended Year Ended
June 30, 2000 June 30, 1999
---------------------------------- --------------------------------
Shares Amount Shares Amount
--------------- ---------------- ------------- ----------------
<S> <C> <C> <C> <C>
Shares sold ........................ 3,433,588 $ 101,760,836 2,552,391 $ 65,846,183
Shares issued through
reinvestment of dividends ......... 187,994 5,570,772 81,486 2,184,225
Shares redeemed .................... (1,722,770) (51,672,187) (996,278) (26,926,461)
---------- ------------- --------- -------------
Net Increase ....................... 1,898,812 $ 55,659,421 1,637,599 $ 41,103,947
========== ============= ========= =============
</TABLE>
Note (D) Investment Transactions: Aggregate purchases and proceeds from sales
of investment securities (other than short-term investments) for the year ended
June 30, 2000 were:
Aggregate Proceeds from
Purchases Sales
-------------- --------------
Intermediate Fixed Income Fund. ......... $62,260,392 $40,286,158
Fixed Income Fund. ...................... 7,157,704 11,760,996
Balanced Fund. .......................... 43,984,182 36,034,354
Equity Investment Fund .................. 82,947,099 31,484,500
Note (E) Advisory, Administration and Distribution Services Agreements: Under
its investment 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: 0.25% for the Principal Preservation Fund; 0.35% for the Intermediate
Fixed Income Fund; 0.35% for the Fixed Income Fund; 0.45% for the Balanced
Fund; and 0.50% for the Equity Investment Fund. These fees are accrued daily
and paid monthly. The Advisor has voluntarily undertaken to absorb for the
Principal Preservation Fund, Intermediate Fixed Income Fund, Fixed Income Fund,
Balanced Fund and Equity Investment Fund operating expenses which cause total
expenses to exceed 0.30%, 0.50%, 0.50%, 0.60%, and 0.75%, respectively. For the
period July 1, 1999 through June 30, 2000, the net amount of expenses the
Advisor absorbed, subject to repayment, totaled $322,864: $148,962 for the
Principal Preservation Fund; $36,048 for the Intermediate Fixed Income Fund;
$69,988 for the Fixed Income Fund; and $67,866 for the Balanced Fund.
The investment advisory agreements provide that any reductions or expense
reimbursements made by the Advisor in its fees are subject to reimbursement by
the Funds within the following three years of such reduction or reimbursement
provided that the Funds are able to effect such reimbursement and remain in
compliance with applicable expense limitations. During the year ended June 30,
2000, the Equity Investment Fund reimbursed expenses to the Advisor totaling
$18,275. Since July 1, 1997 through June 30, 2000, the Advisor has reduced its
management fee and otherwise absorbed Fund expenses for each Fund in the
following amounts: Principal Preservation Fund $446,744, Intermediate Fixed
Income Fund $122,508, Fixed Income Fund $280,588 and Balanced Fund $209,184.
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders and Trustees of
McM Funds
San Francisco, California
We have audited the accompanying statements of assets and liabilities of McM
Principal Preservation Fund, McM Intermediate Fixed Income Fund, McM Fixed
Income Fund, McM Balanced Fund and McM Equity Investment Fund, each a series of
shares of beneficial interest of McM Funds, including the schedules of
investments, as of June 30, 2000 and the related statements of operations for
the year then ended, the statements of changes in net assets for each of the
two years in the period then ended, and the financial highlights for each of
the five years in the period then ended. These financial statements and
financial highlights are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 2000, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of McM
Principal Preservation Fund, McM Intermediate Fixed Income Fund, McM Fixed
Income Fund, McM Balanced Fund and McM Equity Investment Fund as of June 30,
2000, the results of their operations for the year then ended, the changes in
their net assets for each of the two years in the period then ended and the
financial highlights for each of the five years in the period then ended, in
conformity with generally accepted accounting principles.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
July 28, 2000
<PAGE>
Board of Trustees
Robert R. Barron
Terry A. O'Toole
Walter B. Rose
Kenneth I. Rosenblum
S.D. Sicotte
Mark R. Taylor
Gregory L. Watson
Officers
Terry A. O'Toole, CEO and President
Robert R. Barron, Vice President and Treasurer
Deane A. Nelson, Vice President and Secretary
Investment Advisor Custodian
McMorgan & Company The Bank of New York
One Bush Street, Suite 800 48 Wall Street
San Francisco, CA 94104 New York, New York 10286
Underwriter Legal Counsel
Provident Distributors, Inc. Stradley, Ronan, Stevens & Young LLP
3200 Horizon Drive 1810 Gateway Drive, Suite 115
King of Prussia, PA 19406 San Mateo, CA 94404
Shareholder Services Auditors
PFPC Inc. Tait, Weller & Baker
211 South Gulph Road 8 Penn Center Plaza, Suite 800
King of Prussia, PA 19406 Philadelphia, PA 19103
For Additional Information about
McM Funds call:
(800) 788-9485
(7AM to 5PM Pacific Standard Time)
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.
AR0600
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