<PAGE>
McM Funds
------------------------------
Semi Annual Report
December 31, 1999
Principal Preservation Fund
Intermediate Fixed Income Fund
Fixed Income Fund
Balanced Fund
Equity Investment Fund
<PAGE>
Dear Shareholder:
People. Processes. Performance. We believe that these are three of the most
important elements in maintaining a successful investment management
organization. The McM Funds hire and retain the highest quality personnel and
service providers, creating a qualified yet efficient management team. This team
maintains the integrity of our investment processes which, since the Funds' 1994
inception, have yielded performance we're proud to report to you.
Designed for all markets, our disciplined approach seeks to consistently balance
risk with return in allocation decisions. Our success and the success of our
investment manager, McMorgan & Company, have been fostered through a series of
smart, measured victories. Our philosophy is not to swing for the fences--the
McM Funds bring the investment strategies that have worked for McMorgan's
institutional clients for 30 years.
We take great pride in offering quality Fund choices at advantageous prices.
While returns vary year to year, the fees associated with the McM Funds are
constant. Look closely and you will see that the fees of the McM Funds average
less than comparable funds. We also do not (and will not) have any "hidden" fees
that other funds sometimes charge.
There will always be new and exciting investment options on the horizon, but you
can count on the McM Funds to carefully balance the risk with the return on your
investment, measuring results time after time.
Thank you for your continuing confidence and trust.
1
Terry A. O'Toole
Chairman of the Board
<PAGE>
Review
In 1999, the stock market earned a fifth consecutive double-digit year-end
return, an unprecedented event. Over the past five years, the S&P 500 has
returned a yearly average of 28.6%. Driven by fearless buyers, the technology
sector of the S&P 500 gained over 75% for the year. The technology sector was
driven by many companies with low earnings and high speculation, several of them
"dot coms". The return on these technology stocks overshadowed the depth of the
market--over half of all companies had negative returns. McM Funds avoided the
mania of these high-flyers, continuing to focus on high-quality, established
companies that are poised to be successful and that provide a reasonable
expected return in relation to risk assumed.
In the bond market, the expected real return (yield to maturity, less inflation)
remains high by historical standards. During 1999, the Federal Reserve continued
its "incrementalism," raising interest rates three times. As interest rates
rose, only the shortest of maturities had a positive return.
Outlook
We anticipate the continued growth of corporate earnings and dividends. Stock
prices may encounter a short-term obstacle in current interest rates, and how
aggressive the Federal Reserve is in keeping rates high to fight inflation. The
primary determinate of bond market returns is the level of, and change in,
interest rates.
These factors, combined with the economic recovery occurring throughout most
parts of the world create a favorable environment for investors. The McM Fund
portfolios will continue to be positioned to seek long-term investment results,
avoiding speculative areas of the market.
2
<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 52% of the portfolio. The 7-day and
30-day average yields as of December 31, 1999 were 5.34% and 5.38%,
respectively.
Diversification Credit Quality Maturity
- --------------- --------------- ---------------
Certificates of Deposit 4% A-1/P-1 48% 1-15 days 16%
Commercial Paper 44% Government 52% 91+ days 27%
Government 52% 31-90 days 29%
16-30 days 28%
<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 5.16 4.92 5.20 5.29 5.25
</TABLE>
- --------------------------------------------------------------------------------
Principal Preservation Fund
December 31, 1998 - December 31, 1999
7-Day Average Yield (%)
12/31/1998 $4.82
01/31/1999 $4.69
02/28/1999 $4.63
03/31/1999 $4.59
04/30/1999 $4.59
05/31/1999 $4.55
06/30/1999 $4.57
07/31/1999 $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
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.
3
<PAGE>
Intermediate Fixed Income Fund
This Fund emphasizes high quality and diversification. Government bonds and
AAA-rated bonds represent 66% 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 4.7 years
seeks to limit sensitivity to interest rate changes.
NASDAQ Symbol: MCMNX
Diversification Bond Quality Maturity
- --------------- -------------- ---------------
Asset Backed/Other 1% BAA 6% Short-term 4%
Mortgage 38% AA 11% 5-10 years 49%
Government 25% A 17% 1-5 years 47%
Corporate 36% AAA 38%
Government 28%
<TABLE>
<CAPTION>
Average Annual Returns (%) One Three Five Since
Year Years Years Inception
----- ----- ----- ---------
<S> <C> <C> <C> <C>
McM Intermediate Fixed Income Fund -0.32 5.06 6.78 6.10
Lehman Brothers Intermed. Govt./Corp. Index 0.39 5.49 7.09 6.47
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
Intermediate Fixed Income Fund
July 14, 1994 Inception Date
<TABLE>
<CAPTION>
Intermediate Fixed Income Fund Lehman Brothers Intermediate Govt./Corp. Index
------------------------------ ----------------------------------------------
<S> <C> <C>
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
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
</TABLE>
Past performance does not guarantee future results.
- --------------------------------------------------------------------------------
4
<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 6.9 years, 2.2 years longer than the Intermediate
Fixed Income Fund.
NASDAQ Symbol: MCMBX
Diversification Bond Quality Maturity
- --------------- --------------- ---------------
Government 20% AA 8% 10+ years 6%
Corporate 38% BAA 11% 1-5 years 20%
Mortgage 42% A 17% 5-10 years 73%
Government 20% Short Term 1%
AAA 44%
<TABLE>
<CAPTION>
Average Annual Returns (%) One Three Five Since
Year Years Years Inception
---- ----- ----- ---------
<S> <C> <C> <C> <C>
McM Fixed Income Fund -2.19 5.15 7.40 6.60
Lehman Brothers Aggregate Index -0.83 5.73 7.73 7.08
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
Fixed Income Fund
July 14, 1994 Inception Date
<TABLE>
<CAPTION>
Fixed Income Fund Lehman Brothers Aggregate Index
----------------- -------------------------------
<S> <C> <C>
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
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
</TABLE>
Past performance does not guarantee future results.
- --------------------------------------------------------------------------------
5
<PAGE>
Balanced Fund
The Balanced Fund invests in common stocks and bonds. Common stocks represent
about 60.7% of the Fund and bonds about 38% and cash about 1.5%. The common
stock portion is well diversified among 98 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 6.9 years.
NASDAQ Symbol: MCMBX
<TABLE>
<CAPTION>
Asset Allocation Fixed Income Quality Ten Largest Equity Holdings (%)
- ----------------- -------------------- ------------------------------------
<S> <C> <C> <C> <C> <C>
Cash 1.5% AA 6% General Electric Co. 4.7
Bonds 37.8% BAA 8% Intel Corp. 4.3
Stocks 60.7% A 14% Microsoft Corp. 3.5
Government 32% Chase Manhattan Corp. 3.1
AAA 40% Federal National Mort. Assoc. 2.7
International Business Machines 2.6
Compaq Computer Corp. 2.6
Hewlett Packard Co. 2.5
Citigroup, Inc. 2.5
Cisco Systems, Inc. 2.4
----
30.9
</TABLE>
Average Annual Returns (%) One Three Five Since
Year Years Years Inception
---- ----- ----- ---------
McM Balanced Fund 7.03 16.88 19.02 17.43
Lehman Brothers Aggregate Index -0.83 5.73 7.73 7.08
Standard & Poor's 500 21.00 27.56 28.55 26.44
<PAGE>
- --------------------------------------------------------------------------------
Balanced Fund
July 14, 1994 Inception Date
<TABLE>
<CAPTION>
Balanced Fund Lehman Brothers Aggregate Index Standard & Poor's 500 Index
------------- ------------------------------- ---------------------------
<S> <C> <C> <C>
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
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
</TABLE>
Past performance does not guarantee future results.
- --------------------------------------------------------------------------------
6
<PAGE>
Equity Investment Fund
The Equity Investment Fund invests in common stocks of large, high quality
companies. It is diversified among 97 companies across all economic sectors.
Individual companies are carefully selected and attractive economic sectors are
strategically overweighted as compared to the Standard & Poor's 500 Stock Index.
NASDAQ Symbol: MCMEX
<TABLE>
<CAPTION>
Ten Largest Holdings (%) Portfolio Characteristics Sector Weightings (%)
- ------------------------ ------------------------- ---------------------
<S> <C> <C> <C>
General Electric Co. 4.7 Price/Earnings Ratio 37.56 Technology 25.4
Financial Services 14.6
Intel Corp. 4.5 Beta 0.96 Health Care 11.4
Utilities 10.1
Microsoft Corp. 3.1 Avg. Market Capitalization $132.5B Capital Goods 9.1
Energy 6.7
Chase Manhattan Corp. 2.9 Total Number of Stocks 97 Consumer Non-Durables 5.4
Retail 5.1
Citigroup, Inc. 2.7 Raw Materials 3.1
Average Annual Returns (%) Consumer Services 1.9
Federal National Mort. Assoc. 2.6 -------------------------- Consumer Durables 1.9
McM Equity Fund S&P 500 Multi-Industry 1.6
Compaq Computer Corp. 2.5 --------------- ------- Transportation 1.4
One Year 11.55 21.00 Shelter 1.2
Tyco International 2.3 Business Equip. & Services 1.1
Three Years 24.01 27.56 -----
Motorola, Inc. 2.3 100.0
Five Years 26.86 28.55
International Business Mach. 2.2
---- Since Inception 24.60 26.44
29.3
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
Equity Investment Fund
July 14, 1994 Inception Date
<TABLE>
<CAPTION>
Equity Investment Fund Standard & Poor's 500 Index
---------------------- ---------------------------
<S> <C> <C>
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
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
</TABLE>
Past performance does not guarantee future results.
- --------------------------------------------------------------------------------
7
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1999
- --------------------------------------------------------------------------------
Principal Preservation Fund
<TABLE>
<CAPTION>
Principal
Amount Value
FIXED INCOME SECURITIES -------------- -------------
<S> <C> <C>
U.S. Government Agency Notes - 48.62%
Federal Home Loan Bank - 20.37%
5.00%, 02/24/00 .............................................. $ 1,000,000 $ 999,928
5.13%, 03/16/00 .............................................. 2,000,000 1,999,521
5.30%, 03/16/00 .............................................. 1,000,000 989,542
5.08%, 04/28/00 .............................................. 2,000,000 1,997,830
5.56%, 07/14/00 .............................................. 1,000,000 999,291
5.75%, 09/01/00 .............................................. 2,000,000 1,997,258
5.88%, 09/07/00 .............................................. 2,000,000 1,998,986
6.06% to 6.11%, 09/07/00 ..................................... 4,000,000 3,840,278
-----------
14,822,634
-----------
Federal Home Loan Mortgage Corp. - 16.45%
5.69%, 01/10/00 .............................................. 2,000,000 1,997,255
5.06%, 01/11/00 .............................................. 3,000,000 2,995,875
4.83%, 01/20/00 .............................................. 5,000,000 4,986,938
4.96%, 01/21/00 .............................................. 2,000,000 1,994,744
-----------
11,974,812
-----------
Federal National Mortgage Assocation - 11.80%
4.83%, 01/11/00 .............................................. 1,000,000 1,000,000
5.12%, 05/12/00 .............................................. 2,100,000 2,098,389
5.10%, 05/19/00 .............................................. 2,030,000 2,027,448
5.65%, 06/12/00 .............................................. 1,500,000 1,499,816
5.50%, 07/26/00 .............................................. 1,000,000 998,310
5.77%, 08/18/00 .............................................. 1,000,000 965,372
-----------
8,589,335
-----------
TOTAL U.S. GOVERNMENT AGENCY NOTES (Cost $35,386,781) ......... 35,386,781
-----------
Certificates of Deposits - 4.12%
Imperial Bank
6.00%, 01/11/00 .............................................. 3,000,000 3,000,000
-----------
TOTAL CERTIFICATES OF DEPOSIT (Cost $3,000,000) ............... 3,000,000
-----------
Commercial Paper - 40.99%
Aluminum Co. of America
5.87%, 02/10/00 .............................................. 2,000,000 1,987,067
AT & T Corp.
6.00%, 02/24/00 .............................................. 2,000,000 1,982,450
Dupont (EI) de Nemours & Co.
5.83%, 01/28/00 .............................................. 2,000,000 1,991,525
Eastman Kodak Co.
6.02%, 02/01/00 .............................................. 2,000,000 1,989,977
Ford Motor Credit Corp.
6.02%, 01/14/00 .............................................. 2,000,000 1,995,724
General Electric Capital Corp. ................................
6.16%, 01/19/00 .............................................. 2,000,000 1,994,030
General Mills, Inc.
5.82%, 01/24/00 .............................................. 2,000,000 1,992,806
Goldman Sachs Group, Inc.
5.87%, 02/14/00 .............................................. 2,000,000 1,986,116
Lucent Technologies, Inc.
5.71%, 02/10/00 .............................................. 2,000,000 1,987,333
</TABLE>
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1999
- --------------------------------------------------------------------------------
Principal Preservation Fund (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
FIXED INCOME SECURITIES - (continued) -------------- -------------
<S> <C> <C>
Merck & Co., Inc.
5.87%, 02/01/00 ......................................... $ 2,000,000 $ 1,990,046
Merrill Lynch & Co.
5.92%, 02/29/00 ......................................... 2,000,000 1,980,923
Monsanto Co.
6.01%, 01/25/00 ......................................... 2,000,000 1,992,240
Motorola Credit Corp.
5.95%, 03/10/00 ......................................... 2,000,000 1,977,843
Proctor & Gamble Co.
6.01%, 01/27/00 ......................................... 2,000,000 1,991,550
Xerox Credit Corp.
6.02%, 01/20/00 ......................................... 2,000,000 1,993,762
-----------
TOTAL COMMERCIAL PAPER (Cost $29,833,392) ................ 29,833,392
-----------
TOTAL INVESTMENTS * - 93.73% (Cost $68,220,173) .......... 68,220,173
-----------
CASH AND OTHER ASSETS NET OF LIABILITIES - 6.27% ......... 4,563,052
-----------
NET ASSETS - 100.00% ..................................... $72,783,225
===========
</TABLE>
* At December 31, 1999, cost is identical for book and federal income tax
purposes.
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1999
- --------------------------------------------------------------------------------
Intermediate Fixed Income Fund
<TABLE>
<CAPTION>
Principal
Amount Value
-------------- --------------
<S> <C> <C>
FIXED INCOME SECURITIES - 97.39%
Asset Backed Securities - 1.22%
Capital Equipment Receivables Trust
6.57%, 03/15/01 ........................................ $ 1,000,000 $ 1,000,010
Olympic Automobile Receivables Trust 1994-B A2
6.25%, 11/15/04 ........................................ 1,000,000 972,730
-----------
TOTAL ASSET BACKED SECURITIES (Cost $1,993,100) ......... 1,972,740
-----------
Corporate Bonds - 35.00%
Bank & Insurance - 5.18%
BankAmerica Corp.
6.85%, 03/01/03 ........................................ 1,500,000 1,485,000
6.38%, 05/15/05 ........................................ 1,500,000 1,438,125
Travelers Property Casualty Corp.
6.88%, 12/15/03 ........................................ 1,250,000 1,234,375
7.20%, 02/01/04 ........................................ 1,155,000 1,142,006
U.S. Bancorp
6.88%, 12/01/04 ........................................ 1,500,000 1,475,625
6.75%, 10/15/05 ........................................ 1,650,000 1,598,438
-----------
8,373,569
-----------
Financial Services - 19.28%
American General Finance Corp.
6.20%, 03/15/03 ........................................ 2,000,000 1,937,500
5.75%, 11/01/03 ........................................ 1,500,000 1,423,125
Associates Corp. of North America
6.38%, 10/15/02 ........................................ 330,000 324,637
5.50%, 02/15/04 ........................................ 225,000 211,781
6.10%, 01/15/05 ........................................ 700,000 665,000
6.00%, 07/15/05 ........................................ 400,000 376,500
7.55%, 07/17/06 ........................................ 3,000,000 3,003,750
Beneficial Corp.
6.85%, 06/17/02 ........................................ 325,000 321,750
Citigroup, Inc.
9.50%, 03/01/02 ........................................ 500,000 523,998
Finova Capital Corp.
7.13%, 05/01/02 ........................................ 1,025,000 1,019,875
6.12%, 05/28/02 ........................................ 425,000 413,313
6.50%, 07/28/02 ........................................ 700,000 686,875
6.20%, 03/01/04 ........................................ 875,000 834,531
6.90%, 06/19/04 ........................................ 450,000 439,875
6.38%, 05/15/05 ........................................ 700,000 657,125
Ford Motor Credit Corp.
6.63%, 06/30/03 ........................................ 1,000,000 983,750
6.70%, 07/16/04 ........................................ 2,000,000 1,960,000
6.25%, 12/08/05 ........................................ 800,000 759,000
General Motors Acceptance Corp.
5.91%, 03/11/02 ........................................ 2,000,000 1,952,500
7.13%, 05/01/03 ........................................ 300,000 298,875
7.25%, 05/15/03 ........................................ 1,100,000 1,100,000
6.75%, 10/06/03 ........................................ 1,700,000 1,672,375
5.75%, 11/10/03 ........................................ 1,200,000 1,141,500
6.63%, 10/15/05 ........................................ 50,000 48,250
</TABLE>
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1999
- --------------------------------------------------------------------------------
Intermediate Fixed Income Fund (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
------------ -------------
<S> <C> <C>
FIXED INCOME SECURITIES - (continued)
Household Finance Corp.
6.70%, 06/15/02 ................................. $ 500,000 $ 495,000
6.00%, 05/01/04 ................................. 825,000 783,750
Lehman Brothers, Inc.
7.63%, 06/01/06 ................................. 725,000 715,031
Merrill Lynch & Co., Inc.
6.00%, 07/15/05 ................................. 800,000 749,000
Morgan Stanley Dean Witter Discover & Co.
5.63%, 01/20/04 ................................. 995,000 940,275
6.88%, 03/01/07 ................................. 575,000 557,031
Norwest Corp.
5.75%, 02/01/03 ................................. 2,500,000 2,400,000
Sears Roebuck Acceptance Corp.
6.73%, 08/29/00 ................................. 1,000,000 998,810
6.92%, 10/03/02 ................................. 225,000 221,063
Transamerica Financial Corp.
7.51%, 04/15/02 ................................. 150,000 151,125
6.38%, 06/10/02 ................................. 400,000 393,000
-----------
31,159,970
-----------
Industrial - 10.54%
Enron Corp.
6.45%, 11/15/01 ................................. 2,000,000 1,980,000
Home Depot, Inc.
6.50%, 09/15/04 ................................. 2,500,000 2,450,000
MCI Worldcom, Inc.
6.40%, 08/15/05 ................................. 1,925,000 1,848,000
Philip Morris Cos., Inc.
7.50%, 01/15/02 ................................. 1,150,000 1,142,812
7.25%, 01/15/03 ................................. 800,000 785,000
6.80%, 12/01/03 ................................. 645,000 618,394
Raytheon Co.
6.45%, 08/15/02 ................................. 2,000,000 1,945,000
TCI Communications, Inc.
6.38%, 05/01/03 ................................. 2,500,000 2,443,750
Transcontinental Gas Pipeline
6.13%, 01/15/05 ................................. 2,000,000 1,852,500
Wal-Mart Stores, Inc.
6.55%, 08/10/04 ................................. 2,000,000 1,965,000
-----------
17,030,456
-----------
TOTAL CORPORATE BONDS (Cost $58,445,294) ......... 56,563,995
-----------
U.S. Government Agency Obligations - 19.36%
Federal Home Loan Bank - 1.06%
6.08%, 12/23/02 ................................. 500,000 492,095
5.77%, 02/03/04 ................................. 840,000 808,139
7.70%, 09/20/04 ................................. 400,000 413,260
-----------
1,713,494
-----------
Federal Home Loan Mortgage Corp. - 3.32%
5.99%, 12/01/03 ................................. 1,650,000 1,604,146
6.64%, 03/10/04 ................................. 500,000 496,260
5.75%, 04/15/08 ................................. 3,550,000 3,269,976
-----------
5,370,382
-----------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1999
- --------------------------------------------------------------------------------
Intermediate Fixed Income Fund (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
------------ -------------
<S> <C> <C>
FIXED INCOME SECURITIES - (continued)
Federal National Mortgage Association - 10.52%
6.45%, 04/23/01 ..................................................... $ 150,000 $ 150,000
5.13%, 02/13/04 ..................................................... 9,058,000 8,517,871
5.75%, 06/15/05 ..................................................... 5,715,000 5,435,251
6.38%, 06/15/09 ..................................................... 3,034,000 2,896,287
-----------
16,999,409
-----------
Financing Corp. Coupon Strip - 0.20%
0.00%, 04/06/02 * ................................................... 375,000 323,284
-----------
Guaranteed Export Trust - 0.80%
6.13%, 06/15/04 ..................................................... 264,706 254,370
6.28%, 06/15/04 ..................................................... 258,824 255,311
6.55%, 06/15/04 ..................................................... 794,113 781,703
-----------
1,291,384
-----------
Resolution Funding Strip - 3.46%
0.00%, 07/15/08 * ................................................... 2,700,000 1,504,710
0.00%, 10/15/08 * ................................................... 3,900,000 2,138,370
0.00%, 04/15/09 * ................................................... 3,690,000 1,953,449
-----------
5,596,529
-----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $32,639,657) .......... 31,294,482
-----------
Collateralized Mortgage Obligations - 36.39%
Collateralized Mortgage Obligation Trust - 0.01%
8.20%, 05/20/04 ..................................................... 12,371 12,479
-----------
Federal Home Loan Mortgage Corp. - 28.67%
5.85%, 02/15/18 ..................................................... 784,742 781,289
6.40%, 01/15/19 ..................................................... 1,000,000 998,110
6.25%, 05/15/19 ..................................................... 1,000,000 987,710
6.00%, 07/15/19 ..................................................... 1,500,000 1,476,510
5.50%, 10/15/19 ..................................................... 1,800,000 1,684,953
5.75%, 02/15/20 ..................................................... 1,750,000 1,653,202
6.00%, 02/15/20 ..................................................... 1,000,000 982,000
6.00%, 05/15/20 ..................................................... 1,550,000 1,493,681
6.00%, 12/15/20 ..................................................... 3,000,000 2,869,905
5.50%, 01/15/21 ..................................................... 3,825,000 3,571,722
6.50%, 01/25/21 ..................................................... 2,000,000 1,971,460
5.25%, 02/15/21 ..................................................... 2,000,000 1,838,666
5.50%, 04/15/21 ..................................................... 6,900,000 6,420,663
6.00%, 04/15/21 ..................................................... 2,450,000 2,328,086
5.75%, 05/15/21 ..................................................... 1,600,000 1,563,760
6.00%, 02/15/22 ..................................................... 1,000,000 947,175
6.00%, 03/15/22 ..................................................... 3,571,900 3,387,189
5.75%, 02/15/23 ..................................................... 1,600,000 1,468,424
6.75%, 05/15/23 ..................................................... 1,000,000 978,400
5.50%, 07/15/23 ..................................................... 3,300,000 2,954,748
5.75%, 09/15/23 ..................................................... 2,000,000 1,854,810
5.75%, 03/15/24 ..................................................... 2,000,000 1,853,810
6.00%, 02/15/25 ..................................................... 2,500,000 2,268,582
-----------
46,334,855
-----------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $61,039,800) ......... 58,806,382
-----------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1999
- --------------------------------------------------------------------------------
Intermediate Fixed Income Fund (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
------------ ---------------
<S> <C> <C>
FIXED INCOME SECURITIES - (continued)
Federal National Mortgage Association - 7.71%
5.95%, 05/25/05 ......................................................................... $ 314,676 $ 313,555
5.40%, 11/25/05 ......................................................................... 329,577 327,220
6.00%, 04/01/09 ......................................................................... 9,981 9,571
5.25%, 09/25/16 ......................................................................... 7,271 7,234
9.00%, 06/25/18 ......................................................................... 67,426 70,034
6.60%, 09/25/18 ......................................................................... 63,316 63,158
5.50%, 02/25/19 ......................................................................... 566,098 561,682
6.25%, 07/25/19 ......................................................................... 600,000 591,384
5.50%, 07/25/20 ......................................................................... 1,850,000 1,729,139
5.50%, 08/25/21 ......................................................................... 720,000 697,810
5.75%, 11/18/21 ......................................................................... 3,000,000 2,845,095
5.75%, 09/18/22 ......................................................................... 725,000 671,206
6.00%, 01/17/23 ......................................................................... 1,350,000 1,269,473
6.25%, 01/25/23 ......................................................................... 2,000,000 1,921,700
6.00%, 03/25/25 ......................................................................... 1,500,000 1,380,787
------------
12,459,048
------------
U.S. Government Obligations - 5.42%
U.S. Treasury Notes
11.88%, 11/15/03 ........................................................................ 3,360,000 3,971,789
7.88%, 11/15/04 ........................................................................ 200,000 211,544
12.00%, 05/15/05 ........................................................................ 3,685,000 4,583,219
------------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $8,915,149) ........................................ 8,766,552
------------
TOTAL FIXED INCOME SECURITIES - 97.39% (Cost $163,033,000) (1) ........................... 157,404,151
------------
CASH AND OTHER ASSETS NET OF LIABILITIES - 2.61% ......................................... 4,212,160
------------
NET ASSETS - 100.00% ..................................................................... $161,616,311
============
(1) Aggregate cost for federal income tax purposes is $163,033,000 and net unrealized
depreciation is as follows:
Gross unrealized appreciation ........................................................... $ 37,418
Gross unrealized depreciation ........................................................... (5,666,267)
------------
Net unrealized depreciation ............................................................ ($ 5,628,849)
===========
* Zero coupon bond
</TABLE>
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1999
- --------------------------------------------------------------------------------
Fixed Income Fund
Principal
Amount Value
------------ ------------
FIXED INCOME SECURITIES - 98.25%
Corporate Bonds - 36.48%
Bank & Insurance - 7.32%
BankAmerica Corp.
6.85%, 03/01/03 ................ $ 250,000 $ 247,500
6.63%, 08/01/07 ................ 100,000 95,625
6.63%, 10/15/07 ................ 150,000 143,437
KeyCorp
6.75%, 03/15/06 ................ 280,000 265,300
NationsBank Corp.
7.50%, 09/15/06 ................ 175,000 175,438
6.38%, 02/15/08 ................ 200,000 186,250
Travelers Property Casualty Corp.
7.20%, 02/01/04 ................ 100,000 98,875
U.S. Bancorp
6.50%, 02/01/08 ................ 900,000 838,125
Wells Fargo & Co.
6.25%, 04/15/08 ................ 105,000 97,125
----------
2,147,675
----------
Financial Services - 17.49%
American General Finance Corp.
6.20%, 03/15/03 ................ 500,000 484,375
Associates Corp. of North America
6.38%, 10/15/02 ................ 120,000 118,050
6.10%, 01/15/05 ................ 200,000 190,000
7.55%, 07/17/06 ................ 600,000 600,750
Beneficial Corp.
9.47%, 03/09/01 ................ 20,000 20,525
6.75%, 07/20/04 ................ 100,000 97,375
6.94%, 12/15/06 ................ 100,000 97,375
Citigroup, Inc.
9.50%, 03/01/02 ................ 75,000 78,600
Commercial Credit Co.
6.63%, 11/15/06 ................ 225,000 213,187
Finova Capital Corp.
6.50%, 07/28/02 ................ 300,000 294,375
6.20%, 03/01/04 ................ 100,000 95,375
6.90%, 06/19/04 ................ 100,000 97,750
6.75%, 03/09/09 ................ 200,000 186,750
Ford Motor Credit Co.
6.70%, 07/16/04 ................ 200,000 196,000
7.75%, 03/15/05 ................ 225,000 229,219
6.38%, 11/05/08 ................ 450,000 417,375
General Motors Acceptance Corp.
6.50%, 12/05/05 ................ 50,000 47,750
6.13%, 01/22/08 ................ 350,000 319,813
Household Finance Corp.
6.70%, 06/15/02 ................ 75,000 74,250
7.65%, 05/15/07 ................ 100,000 99,875
Lehman Brothers, Inc.
7.63%, 06/01/06 ................ 80,000 78,900
Merrill Lynch & Co., Inc.
6.56%, 12/16/07 ................ 150,000 141,562
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1999
- --------------------------------------------------------------------------------
Fixed Income Fund (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
------------ -------------
<S> <C> <C>
FIXED INCOME SECURITIES - (continued)
Morgan Stanley Dean Witter Discover & Co.
6.88%, 03/01/07 ................................. $ 125,000 $ 121,094
Salomon Smith Barney Holdings, Inc.
7.00%, 03/15/04 ................................. 150,000 147,750
7.38%, 05/15/07 ................................. 100,000 97,250
Sears Roebuck Acceptance Corp.
6.25%, 01/15/04 ................................. 50,000 47,813
6.13%, 01/15/06 ................................. 100,000 91,500
6.70%, 11/15/06 ................................. 400,000 372,500
Transamerica Financial Corp.
7.51%, 04/15/02 ................................. 75,000 75,562
-----------
5,132,700
-----------
Industrial - 11.67%
Enron Corp.
6.63%, 11/15/05 ................................. 450,000 428,063
6.40%, 07/15/06 ................................. 150,000 138,562
MCI Worldcom, Inc.
7.75%, 04/01/07 ................................. 500,000 509,375
Northwest Pipeline Corp.
6.63%, 12/01/07 ................................. 700,000 656,250
Philip Morris Cos., Inc.
7.50%, 01/15/02 ................................. 175,000 173,906
6.80%, 12/01/03 ................................. 50,000 47,938
Raytheon Co.
6.30%, 03/15/05 ................................. 550,000 510,125
6.15%, 11/01/08 ................................. 500,000 442,500
TCI Communications, Inc. (FRN) (MTN)
6.88%, 02/15/06 ................................. 300,000 292,500
Transcontinental Gas Pipeline
6.25%, 01/15/08 ................................. 250,000 225,625
-----------
3,424,844
-----------
TOTAL CORPORATE BONDS (Cost $11,344,638) ......... 10,705,219
-----------
U.S. Government Agency Obligations - 12.42%
Federal Home Loan Bank - 2.30%
7.13%, 11/18/02 ................................. 315,000 318,733
5.77%, 02/03/04 ................................. 160,000 153,931
7.52%, 05/24/04 ................................. 150,000 153,735
5.95%, 01/19/06 ................................. 50,000 47,566
-----------
673,965
-----------
Federal Home Loan Mortgage Corp. - 3.49%
5.75%, 04/15/08 ................................. 910,000 838,219
6.00%, 04/15/25 ................................. 200,000 186,041
-----------
1,024,260
-----------
Federal National Mortgage Association - 3.71%
5.13%, 02/13/04 ................................. 937,000 881,127
5.75%, 06/15/05 ................................. 100,000 95,105
0.00%, 10/09/19* ................................ 450,000 112,235
-----------
1,088,467
-----------
Guaranteed Export Trust - 0.10%
6.13%, 06/15/04 ................................. 31,765 30,524
-----------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1999
- --------------------------------------------------------------------------------
Fixed Income Fund (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
------------ ------------
<S> <C> <C>
FIXED INCOME SECURITIES - (continued)
Resolution Funding Strip - 2.82%
0.00%, 10/15/11* .................................................. $ 260,000 $ 114,660
0.00%, 04/15/16* .................................................. 310,000 99,222
0.00%, 01/15/17* .................................................. 1,385,000 421,331
0.00%, 04/15/17* .................................................. 250,000 74,860
0.00%, 01/15/19* .................................................. 440,000 116,824
----------
826,897
----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $3,725,936) ......... 3,644,113
----------
Collateralized Mortgage Obligations - 41.33%
Collateralized Mortgage Obligation Trust - 0.01%
8.65%, 03/01/03 ................................................... 2,925 2,912
----------
Federal Home Loan Mortgage Corp. - 29.17%
6.25%, 05/15/19 ................................................... 250,000 246,956
6.50%, 10/15/19 ................................................... 200,000 195,562
6.00%, 10/15/21 ................................................... 600,000 572,178
5.95%, 02/15/22 ................................................... 500,000 475,480
6.00%, 02/15/22 ................................................... 200,000 192,658
6.65%, 07/15/22 ................................................... 150,000 146,434
5.25%, 10/15/22 ................................................... 700,000 629,829
6.20%, 01/15/23 ................................................... 100,000 94,387
5.75%, 02/15/23 ................................................... 700,000 642,436
6.00%, 02/15/23 ................................................... 200,000 190,645
6.75%, 05/15/23 ................................................... 200,000 195,680
5.75%, 06/15/23 ................................................... 550,000 505,145
5.50%, 07/15/23 ................................................... 1,000,000 895,378
5.75%, 09/15/23 ................................................... 600,000 556,443
6.00%, 11/15/23 ................................................... 100,000 93,331
6.00%, 12/15/23 ................................................... 400,000 372,881
6.00%, 01/15/24 ................................................... 300,000 279,497
5.50%, 03/15/24 ................................................... 400,000 358,233
Federal National Mortgage Association - 12.15%
7.50%, 07/25/18 ................................................... 3,405 3,400
6.00%, 09/25/18 ................................................... 40,000 39,317
6.50%, 03/25/19 ................................................... 150,000 148,476
6.50%, 04/25/19 ................................................... 150,000 149,272
3.50%, 05/25/19 ................................................... 125,000 118,315
6.85%, 10/25/20 ................................................... 40,000 39,772
6.75%, 11/25/20 ................................................... 200,000 198,452
6.75%, 05/25/21 ................................................... 200,000 198,464
6.50%, 10/25/21 ................................................... 200,000 193,838
6.00%, 12/18/22 ................................................... 600,000 560,157
5.75%, 12/25/22 ................................................... 500,000 456,778
5.75%, 02/18/23 ................................................... 500,000 463,113
6.00%, 03/25/23 ................................................... 500,000 473,801
7.00%, 06/25/23 ................................................... 200,000 197,434
6.00%, 01/25/25 ................................................... 150,000 140,552
6.00%, 03/25/25 ................................................... 200,000 184,105
----------
3,565,246
</TABLE>
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1999
- --------------------------------------------------------------------------------
Fixed Income Fund (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
------------ ---------------
<S> <C> <C>
FIXED INCOME SECURITIES - (continued)
Collateralized Mortgage Obligation - (continued)
5.75%, 03/15/24 ......................................................................... $ 900,000 $ 829,474
6.00%, 03/15/24 ......................................................................... 500,000 461,593
6.00%, 07/15/24 ......................................................................... 175,000 163,052
6.00%, 11/15/24 ......................................................................... 500,000 464,217
-----------
8,561,489
-----------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $12,672,869) ............................. 12,129,647
-----------
U.S. Government Obligations - 8.02%
U.S. Treasury Notes
7.00%, 07/15/06 ......................................................................... 890,000 911,921
6.25%, 02/15/07 ......................................................................... 725,000 713,922
7.50%, 11/15/16 ......................................................................... 532,000 569,522
8.88%, 08/15/17 ......................................................................... 130,000 157,134
-----------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $2,360,828) ........................................ 2,352,499
-----------
TOTAL FIXED INCOME SECURITIES - 98.25% (Cost $30,104,271)(1) ............................. 28,831,478
-----------
CASH AND OTHER ASSETS NET OF LIABILITIES - 1.75% ......................................... 514,022
-----------
NET ASSETS - 100.00% ..................................................................... $29,345,500
===========
(1) Aggregate cost for federal income tax purposes is $30,104,271 and net unrealized
depreciation is as follows:
Gross unrealized appreciation ........................................................... $ 60,635
Gross unrealized depreciation ........................................................... (1,333,428)
-----------
Net unrealized depreciation .. ............................................... ......... ($ 1,272,793)
===========
</TABLE>
* Zero coupon bond
FRN - Fixed Rate Note
MTN - Medium Term Note
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1999
- --------------------------------------------------------------------------------
Balanced Fund
Shares Value
-------- -------------
COMMON STOCKS - 60.62%
Business Equipment and Services - 0.52%
Automatic Data Processing, Inc. .............. 17,200 $ 926,650
-----------
Capital Goods - 5.85%
Cooper Industries, Inc. ...................... 7,200 291,150
Delphi Automotive Systems Corp. .............. 6,360 100,170
Emerson Electric Co. ......................... 14,500 831,937
General Electric Co. ......................... 32,300 4,998,425
Honeywell International, Inc. ................ 12,075 696,577
PPG Industries, Inc. ......................... 15,300 957,206
Tyco International, Ltd. ..................... 63,796 2,480,070
-----------
10,355,535
-----------
Consumer Durables - 1.09%
Ford Motor Co. ............................... 19,600 1,047,375
General Motors Corp. ......................... 12,100 879,519
-----------
1,926,894
-----------
Consumer Non-Durables - 3.51%
Anheuser-Busch Cos., Inc. .................... 5,200 368,550
Bestfoods .................................... 15,100 793,694
Eastman Kodak Co. ............................ 9,000 596,250
General Mills, Inc. .......................... 9,100 325,325
PepsiCo, Inc. ................................ 33,300 1,173,825
Philip Morris Cos., Inc. ..................... 50,800 1,177,925
Procter & Gamble Co. ......................... 9,200 1,007,975
Sara Lee Corp. ............................... 34,900 769,981
-----------
6,213,525
-----------
Consumer Services - 1.25%
Disney (Walt) Co. ............................ 22,500 658,125
Hilton Hotels Corp. .......................... 22,400 215,600
Knight-Ridder, Inc. .......................... 8,400 499,800
Time Warner, Inc. ............................ 11,500 833,031
-----------
2,206,556
-----------
Energy - 3.61%
Atlantic Richfield Co. ....................... 1,100 95,150
Baker Hughes, Inc. ........................... 22,000 463,375
BP Amoco Plc. ................................ 24,522 1,454,461
Burlington Resources, Inc. ................... 7,150 236,397
Chevron Corp. ................................ 7,500 649,688
Exxon Mobil Corp. ............................ 19,853 1,599,407
Royal Dutch Petroleum Co. .................... 7,200 435,150
Schlumberger, Ltd. ........................... 8,900 500,625
Texaco, Inc. ................................. 16,500 896,156
Transocean Sedco Forex, Inc. ................. 1,723 58,045
-----------
6,388,454
-----------
Financial Services - 8.37%
American International Group, Inc. ........... 12,818 1,385,946
Associates First Capital Corp. Cl. A ......... 18,006 494,040
Bank of America Corp. ........................ 30,826 1,547,080
Bank One Corp. ............................... 6,400 205,200
Chase Manhattan Corp. ........................ 42,264 3,283,385
Chubb Corp. .................................. 15,000 844,687
Citigroup, Inc. .............................. 48,525 2,696,170
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1999
- --------------------------------------------------------------------------------
Balanced Fund (continued)
Shares Value
---------- -------------
COMMON STOCKS - (continued)
Financial Services - (continued)
Federal National Mortgage Association ......... 45,500 $ 2,840,906
Morgan (J.P.) & Co., Inc. ..................... 6,100 772,412
U.S. Bancorp .................................. 31,250 744,141
-----------
14,813,967
-----------
Health Care - 7.06%
ALZA Corp. * .................................. 7,800 270,075
Baxter International, Inc. .................... 16,300 1,023,844
Bristol-Myers Squibb Co. ...................... 24,800 1,591,850
Columbia/HCA Healthcare Corp. ................. 18,825 551,808
IMS Health, Inc. .............................. 14,400 391,500
Johnson & Johnson ............................. 14,200 1,322,375
Lilly (Eli) & Co. ............................. 19,500 1,296,750
Merck & Co., Inc. ............................. 28,500 1,911,281
Schering-Plough Corp. ......................... 34,700 1,463,906
United HealthCare Corp. ....................... 12,750 677,344
Warner-Lambert Co. ............................ 24,200 1,982,887
-----------
12,483,620
-----------
Multi-Industry - 0.37%
Minnesota Mining & Mfg. Co. ................... 6,700 655,763
-----------
Raw Materials - 1.81%
Aluminum Co. of America ....................... 10,700 888,100
Dow Chemical Co. .............................. 6,000 801,750
Dupont (E.I.) de Nemours & Co. ................ 13,585 894,912
Monsanto Co. .................................. 17,500 623,438
-----------
3,208,200
-----------
Retail - 3.17%
Abercrombie & Fitch Co. Cl. A * ............... 17,644 470,874
Albertson's, Inc. ............................. 23,050 743,362
Costco Wholesale Corp. * ...................... 8,000 730,000
Dillard's, Inc. Cl. A ......................... 1,950 39,366
May Department Stores Co. ..................... 22,425 723,206
Penney (J.C.), Co., Inc. ...................... 17,900 356,881
Walgreen Co. .................................. 25,000 731,250
Wal-Mart Stores, Inc. ......................... 26,100 1,804,163
-----------
5,599,102
-----------
Shelter - 0.57%
Georgia-Pacific Group ......................... 9,700 492,275
Kimberly-Clark Corp. .......................... 8,000 522,000
-----------
1,014,275
-----------
Technology - 16.78%
Applied Materials, Inc. * ..................... 1,200 152,025
BMC Software, Inc. * .......................... 6,300 503,606
Boeing Co. .................................... 6,700 278,469
Cisco Systems, Inc. * ......................... 24,100 2,581,713
Compaq Computer Corp. ......................... 101,334 2,742,351
Dell Computer Corp. * ......................... 10,300 525,300
EMC Corp. * ................................... 10,700 1,168,975
Hewlett-Packard Co. ........................... 24,000 2,734,500
Intel Corp. ................................... 56,500 4,650,656
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1999
- --------------------------------------------------------------------------------
Balanced Fund (continued)
Shares Value
-------- --------------
COMMON STOCKS - (continued)
Technology - (continued)
International Business Machines Corp. .......... 26,000 $ 2,808,000
Lucent Technologies, Inc. ...................... 28,928 2,164,176
Microsoft Corp. * .............................. 32,100 3,747,675
Motorola, Inc. ................................. 16,850 2,481,162
Parametric Technology Corp. * .................. 37,000 1,001,313
Raytheon Co. Cl. A ............................. 357 8,858
Seagate Technology, Inc. * ..................... 26,000 1,210,625
Sun Microsystems, Inc. * ....................... 8,200 634,987
Xerox Corp. .................................... 13,000 294,938
------------
29,689,329
------------
Transportation - 0.69%
AMR Corp. * .................................... 12,600 844,200
CSX Corp. ...................................... 12,000 376,500
------------
1,220,700
------------
Utilities - 5.97%
AT & T Corp. ................................... 27,625 1,401,969
Edison International ........................... 24,000 628,500
El Paso Natural Gas Co. ........................ 7,200 279,450
GTE Corp. ...................................... 22,100 1,559,431
MCI WorldCom, Inc. * ........................... 30,614 1,624,429
PECO Energy Co. ................................ 11,000 382,250
PG&E Corp. ..................................... 22,063 452,292
SBC Communications, Inc. ....................... 39,334 1,917,532
Unicom Corp. ................................... 16,900 566,150
Vodafone AirTouch plc ADR ...................... 35,500 1,757,250
------------
10,569,253
------------
TOTAL COMMON STOCKS (Cost $77,617,163) ......... 107,271,823
------------
Principal
Amount Value
------------ ------------
FIXED INCOME SECURITIES - 37.33%
Corporate Bonds - 10.44%
Bank and Insurance - 1.67%
Bank of America Corp.
6.63%, 10/15/07 ............... $ 250,000 239,062
Chase Manhattan Corp.
7.13%, 02/01/07 ............... 200,000 197,250
KeyCorp
6.75%, 03/15/06 ............... 245,000 232,138
NationsBank Corp.
7.50%, 09/15/06 275,000 275,687
6.38%, 02/15/08 ............... 400,000 372,500
U.S. Bancorp
6.50%, 02/01/08 ............... 1,650,000 1,536,563
Wells Fargo & Co.
6.25%, 04/15/08 ............... 105,000 97,125
---------
2,950,325
---------
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1999
- --------------------------------------------------------------------------------
Balanced Fund (continued)
Principal
Amount Value
------------ ------------
FIXED INCOME SECURITIES - (continued)
Financial Services - 5.51%
American General Finance Corp.
7.45%, 07/01/02 ........................ $ 175,000 $ 176,312
6.20%, 03/15/03 ........................ 600,000 581,250
Associates Corp. of North America
6.38%, 10/15/02 ........................ 50,000 49,188
5.50%, 02/15/04 ........................ 25,000 23,531
6.10%, 01/15/05 ........................ 200,000 190,000
7.63%, 04/27/05 ........................ 125,000 126,719
7.55%, 07/17/06 ........................ 1,000,000 1,001,250
Beneficial Corp.
10.10%, 11/27/00 ....................... 150,000 154,822
9.47%, 03/09/01 ........................ 30,000 30,788
6.75%, 07/20/04 ........................ 25,000 24,344
6.96%, 02/13/06 ........................ 150,000 146,625
6.94%, 12/15/06 ........................ 100,000 97,375
Citigroup, Inc.
9.50%, 03/01/02 ........................ 25,000 26,200
6.63%, 09/15/05 ........................ 150,000 145,125
Commercial Credit Co.
6.63%, 11/15/06 ........................ 275,000 260,562
Finova Capital Corp.
6.12%, 05/28/02 ........................ 200,000 194,500
6.50%, 07/28/02 ........................ 460,000 451,375
6.20%, 03/01/04 ........................ 50,000 47,688
6.90%, 06/19/04 ........................ 125,000 122,187
6.75%, 03/09/09 ........................ 300,000 280,125
Ford Motor Credit Co.
6.55%, 07/07/03 ........................ 125,000 122,500
7.75%, 03/15/05 ........................ 300,000 305,625
6.38%, 11/05/08 ........................ 775,000 718,813
7.38%, 10/28/09 ........................ 500,000 495,000
General Motors Acceptance Corp.
6.60%, 11/22/04 ........................ 175,000 169,750
6.15%, 04/05/07 ........................ 700,000 646,625
6.13%, 01/22/08 ........................ 500,000 456,875
Household Finance Corp.
6.70%, 06/15/02 ........................ 50,000 49,500
7.25%, 07/15/03 ........................ 125,000 124,844
7.65%, 05/15/07 ........................ 200,000 199,750
Lehman Brothers, Inc.
7.63%, 06/01/06 ........................ 540,000 532,575
Merrill Lynch & Co., Inc.
6.00%, 07/15/05 ........................ 25,000 23,406
6.56%, 12/16/07 ........................ 250,000 235,937
Morgan Stanley Dean Witter Discover & Co.
6.88%, 03/01/07 ........................ 125,000 121,094
Salomon Smith Barney Holdings, Inc.
6.50%, 10/15/02 ........................ 125,000 122,969
7.00%, 06/15/03 ........................ 325,000 322,562
7.00%, 03/15/04 ........................ 275,000 270,875
Sears Roebuck Acceptance Corp.
6.90%, 08/01/03 ........................ 125,000 121,719
6.13%, 01/15/06 ........................ 50,000 45,750
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1999
- --------------------------------------------------------------------------------
Balanced Fund (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
------------ -------------
<S> <C> <C>
FIXED INCOME SECURITIES (continued)
Corporate Bonds (continued)
Transamerica Corp.
6.75%, 11/15/06 ................................. $ 200,000 $ 187,750
Transamerica Financial Corp.
7.51%, 04/15/02 ................................. 30,000 30,225
Travelers Property Casualty Corp.
6.88%, 12/15/03 ................................. 25,000 24,687
7.20%, 02/01/04 ................................. 100,000 98,875
6.75%, 11/15/06 ................................. 200,000 191,250
-----------
9,748,922
-----------
Industrial - 3.26%
Enron Corp.
6.63%, 11/15/05 ................................. 750,000 713,437
6.40%, 07/15/06 ................................. 150,000 138,563
MCI Worldcom, Inc.
7.75%, 04/01/07 ................................. 500,000 509,375
Northwest Pipeline Corp.
6.63%, 12/01/07 ................................. 800,000 750,000
Philip Morris Cos., Inc.
7.50%, 01/15/02 ................................. 50,000 49,687
8.25%, 10/15/03 ................................. 75,000 75,656
6.80%, 12/01/03 ................................. 30,000 28,763
6.38%, 02/01/06 ................................. 25,000 22,750
Raytheon Co.
6.30%, 03/15/05 ................................. 750,000 695,625
6.15%, 11/01/08 ................................. 1,100,000 973,500
Service Corp. International
6.00%, 12/15/05 ................................. 500,000 378,750
TCI Communications, Inc. (FRN) (MTN)
6.88%, 02/15/06 ................................. 825,000 804,375
Transcontinental Gas Pipeline
6.13%, 01/15/05 ................................. 300,000 277,875
6.25%, 01/15/08 ................................. 400,000 361,000
-----------
5,779,356
-----------
TOTAL CORPORATE BONDS (Cost $19,569,523) ......... 18,478,603
-----------
U.S. Government Agency Obligations - 10.88%
Federal Farm Credit Bank - 0.45%
6.35%, 10/30/03 ................................. 500,000 492,480
6.60%, 02/06/04 ................................. 300,000 297,339
-----------
789,819
-----------
Federal Home Loan Bank - 2.22%
7.52%, 05/24/04 ................................. 300,000 307,470
6.91%, 06/03/04 ................................. 350,000 350,689
7.36%, 07/01/04 ................................. 665,000 677,908
6.38%, 08/15/06 ................................. 2,685,000 2,597,039
-----------
3,933,106
-----------
Federal Home Loan Mortgage Corp. - 5.32%
5.99%, 12/01/03 ................................. 150,000 145,831
6.65%, 03/10/04 ................................. 780,000 774,166
8.00%, 01/26/05 ................................. 260,000 272,470
6.75%, 05/30/06 ................................. 1,570,000 1,550,658
</TABLE>
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1999
- --------------------------------------------------------------------------------
Balanced Fund (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
------------ -------------
<S> <C> <C>
U.S. Government Agency Obligations - (continued)
Federal Home Loan Mortgage Corp. - (continued)
6.40%, 12/13/06 ............................... $ 275,000 $ 265,743
7.10%, 04/10/07 ............................... 3,275,000 3,287,347
5.75%, 04/15/08 ............................... 3,380,000 3,113,386
-----------
9,409,601
-----------
Collateralized Mortgage Obligations - 14.65%
Federal Home Loan Mortgage Corp. - 10.75%
6.25%, 05/15/19 ............................... 100,000 98,771
6.50%, 10/15/19 ............................... 200,000 195,562
7.00%, 02/15/21 ............................... 100,000 98,989
5.50%, 04/15/21 ............................... 1,200,000 1,116,200
5.75%, 04/15/21 ............................... 50,000 48,912
6.00%, 09/15/21 ............................... 500,000 476,207
6.50%, 09/15/21 ............................... 550,000 529,609
6.00%, 10/15/21 ............................... 800,000 762,904
5.95%, 11/15/21 ............................... 300,000 284,820
6.50%, 11/15/21 ............................... 600,000 583,730
5.95%, 02/15/22 ............................... 700,000 665,672
6.00%, 02/15/22 ............................... 100,000 96,329
6.00%, 05/15/22 ............................... 450,000 422,253
6.65%, 07/15/22 ............................... 100,000 97,623
5.25%, 10/15/22 ............................... 1,000,000 899,755
6.25%, 11/15/22 ............................... 150,000 145,779
6.50%, 11/15/22 ............................... 100,000 96,779
7.00%, 01/15/23 ............................... 200,000 197,830
5.75%, 02/15/23 ............................... 1,000,000 917,765
6.00%, 02/15/23 ............................... 193,000 183,972
6.50%, 02/15/23 ............................... 400,000 388,920
6.75%, 05/15/23 ............................... 150,000 146,760
5.75%, 06/15/23 ............................... 800,000 734,756
5.50%, 07/15/23 ............................... 750,000 671,534
5.75%, 09/15/23 ............................... 800,000 741,924
6.00%, 11/15/23 ............................... 1,100,000 1,026,647
6.00%, 12/15/23 ............................... 1,300,000 1,216,521
5.50%, 01/15/24 ............................... 1,500,000 1,349,978
6.00%, 01/15/24 ............................... 150,000 139,748
5.50%, 03/15/24 ............................... 600,000 537,349
5.75%, 03/15/24 ............................... 1,000,000 922,165
5.50%, 04/15/24 ............................... 500,000 452,972
5.75%, 07/15/24 ............................... 1,000,000 917,765
6.00%, 07/15/24 ............................... 500,000 465,863
6.00%, 11/15/24 ............................... 1,000,000 928,435
6.15%, 06/15/25 ............................... 500,000 462,347
-----------
19,023,145
-----------
Federal National Mortgage Association - 2.26%
6.38%, 06/15/09 ............................... 3,926,000 3,747,799
0.00%, 10/09/19 ** ............................ 1,010,000 251,904
-----------
3,999,703
-----------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1999
- --------------------------------------------------------------------------------
Balanced Fund (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
------------ ----------------
<S> <C> <C>
Collateralized Mortgage Obligations - (continued)
Federal National Mortgage Association - 3.69%
6.00%, 09/25/18 ......................................................................... $ 50,000 $ 49,146
6.85%, 10/25/20 ......................................................................... 50,000 49,716
6.75%, 11/25/20 ......................................................................... 100,000 98,848
6.75%, 05/25/21 ......................................................................... 100,000 99,232
6.50%, 10/25/21 ......................................................................... 600,000 581,514
6.50%, 11/25/21 ......................................................................... 100,000 96,921
6.00%, 02/25/22 ......................................................................... 500,000 473,730
6.50%, 04/25/22 ......................................................................... 379,000 367,043
6.50%, 07/18/22 ......................................................................... 500,000 485,565
6.00%, 07/25/22 ......................................................................... 50,000 47,456
6.50%, 07/25/22 ......................................................................... 350,000 339,258
6.80%, 09/25/22 ......................................................................... 300,000 295,146
6.50%, 11/25/22 ......................................................................... 200,000 193,088
5.75%, 12/25/22 ......................................................................... 1,500,000 1,370,332
5.75%, 02/18/23 ......................................................................... 1,000,000 926,225
7.00%, 06/25/23 ......................................................................... 125,000 123,396
6.00%, 05/25/25 ......................................................................... 1,000,000 922,275
------------
6,518,891
------------
Government National Mortgage Association - 0.21%
6.00%, 11/20/25 ......................................................................... 400,000 375,429
------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $26,965,234) ............................. 25,917,465
------------
Resolution Funding Strip - 0.43%
0.00%, 07/15/12 ** ...................................................................... 510,000 212,976
0.00%, 04/15/14 ** ...................................................................... 150,000 55,144
0.00%, 10/15/15 ** ...................................................................... 45,000 14,893
0.00%, 04/15/18 ** ...................................................................... 800,000 223,408
0.00%, 01/15/19 ** ...................................................................... 980,000 260,200
------------
766,621
------------
Student Loan Marketing Association - 0.20%
6.35%, 03/17/03 ......................................................................... 350,000 346,280
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $20,114,649) .............................. 19,245,130
------------
U.S. Government Obligations - 1.36%
U.S. Treasury Notes
7.00%, 07/15/06 ......................................................................... 830,000 850,443
6.50%, 10/15/06 ......................................................................... 1,245,000 1,242,137
6.25%, 02/15/07 ......................................................................... 325,000 320,034
------------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $2,463,347) ........................................ 2,412,614
------------
TOTAL FIXED INCOME SECURITIES (Cost $69,112,753) ......................................... 66,053,812
------------
TOTAL INVESTMENTS - 97.95% (Cost $146,729,916)(1) ........................................ 173,325,635
------------
CASH AND OTHER ASSETS NET OF LIABILITIES - 2.05% ......................................... 3,621,762
------------
NET ASSETS - 100.00% ..................................................................... $176,947,397
============
(1) Aggregate cost for federal income tax purposes is $146,729,916 and net unrealized
appreciation is as follows:
Gross unrealized appreciation ........................................................... $ 32,665,331
Gross unrealized depreciation ........................................................... (6,069,612)
------------
Net unrealized appreciation ............................................................ $ 26,595,719
============
* Non-dividend paying stock
** Zero coupon bond
FRN - Fixed Rate Note
MTN - Medium Term Note
</TABLE>
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1999
- --------------------------------------------------------------------------------
Equity Investment Fund
Shares Value
---------- -------------
COMMON STOCKS -- 99.88%
Business Equipment and Services -- 1.14%
Automatic Data Processing, Inc. .............. 50,500 $ 2,720,688
-----------
Capital Goods -- 10.10%
Cooper Industries, Inc. ...................... 22,500 909,844
Delphi Automotive Systems Corp. .............. 14,328 225,666
Emerson Electric Co. ......................... 33,000 1,893,375
General Electric Co. ......................... 72,000 11,142,000
Honeywell International, Inc. ................ 39,000 2,249,812
PPG Industries, Inc. ......................... 34,500 2,158,406
Tyco International, Ltd. ..................... 142,000 5,520,250
-----------
24,099,353
-----------
Consumer Durables -- 1.76%
Ford Motor Co. ............................... 46,000 2,458,125
General Motors Corp. ......................... 24,000 1,744,500
-----------
4,202,625
-----------
Consumer Non-Durables -- 5.43%
Anheuser-Busch Cos., Inc. .................... 18,000 1,275,750
Bestfoods .................................... 22,000 1,156,375
Eastman Kodak Co. ............................ 21,050 1,394,563
General Mills, Inc. .......................... 16,000 572,000
PepsiCo, Inc. ................................ 74,000 2,608,500
Philip Morris Cos., Inc. ..................... 119,000 2,759,312
Procter & Gamble Co. ......................... 16,500 1,807,781
Sara Lee Corp. ............................... 63,000 1,389,937
-----------
12,964,218
-----------
Consumer Services -- 1.90%
Disney (Walt) Co. ............................ 37,000 1,082,250
Hilton Hotels Corp. .......................... 36,000 346,500
Knight-Ridder, Inc. .......................... 22,000 1,309,000
Park Place Entertainment Corp. * ............. 14,000 175,000
Time Warner, Inc. ............................ 22,500 1,629,844
-----------
4,542,594
-----------
Energy -- 6.73%
Baker Hughes, Inc. ........................... 50,000 1,053,125
BP Amoco Plc. ................................ 64,000 3,796,000
Burlington Resources, Inc. ................... 11,800 390,138
Chevron Corp. ................................ 21,000 1,819,125
Exxon Mobil Corp. ............................ 52,000 4,189,250
Royal Dutch Petroleum Co. .................... 21,000 1,269,187
Schlumberger, Ltd. ........................... 20,000 1,125,000
Texaco, Inc. ................................. 42,000 2,281,125
Transocean Sedco Forex, Inc. ................. 3,872 130,438
-----------
16,053,388
-----------
Financial Services -- 14.53%
American International Group, Inc. ........... 27,000 2,919,375
Associates First Capital Corp. Cl. A ......... 47,006 1,289,727
Bank of America Corp. ........................ 74,525 3,740,223
Bank One Corp. ............................... 43,000 1,378,688
Chase Manhattan Corp. ........................ 90,000 6,991,875
Chubb Corp. .................................. 37,580 2,116,224
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1999
- --------------------------------------------------------------------------------
Equity Investment Fund (continued)
Shares Value
--------- -------------
COMMON STOCKS -- (continued)
Citigroup, Inc. ............................... 115,550 $ 6,420,247
Federal National Mortgage Association ......... 100,000 6,243,750
Morgan (J.P.) & Co., Inc. ..................... 13,500 1,709,438
U.S. Bancorp .................................. 78,000 1,857,375
-----------
34,666,922
-----------
Health Care -- 11.33%
ALZA Corp. * .................................. 19,500 675,187
Baxter International, Inc. .................... 42,000 2,638,125
Bristol-Myers Squibb Co. ...................... 52,000 3,337,750
Columbia/HCA Healthcare Corp. ................. 42,050 1,232,591
IMS Health, Inc. .............................. 33,000 897,188
Johnson & Johnson ............................. 27,500 2,560,937
Lilly (Eli) & Co. ............................. 44,000 2,926,000
Merck & Co., Inc. ............................. 64,020 4,293,341
Schering-Plough Corp. ......................... 69,000 2,910,938
United HealthCare Corp. ....................... 32,000 1,700,000
Warner-Lambert Co. ............................ 47,000 3,851,062
-----------
27,023,119
-----------
Multi-Industry -- 0.71%
Minnesota Mining & Mfg. Co. ................... 17,330 1,696,174
-----------
Raw Materials -- 3.08%
Aluminum Co. of America ....................... 31,000 2,573,000
Dow Chemical Co. .............................. 11,000 1,469,875
Dupont (E.I.) de Nemours & Co. ................ 29,004 1,910,639
Monsanto Co. .................................. 39,000 1,389,375
-----------
7,342,889
-----------
Retail -- 5.11%
Abercrombie & Fitch Co. Cl. A * ............... 43,014 1,147,936
Albertson's, Inc. ............................. 59,000 1,902,750
Costco Wholesale Corp. * ...................... 18,000 1,642,500
Dillard's, Inc. Cl. A ......................... 8,000 161,500
May Department Stores Co. ..................... 41,250 1,330,312
Penney (J.C.), Co., Inc. ...................... 39,000 777,563
Walgreen Co. .................................. 60,500 1,769,625
Wal-Mart Stores, Inc. ......................... 50,000 3,456,250
-----------
12,188,436
-----------
Shelter -- 1.22%
Georgia-Pacific Group ......................... 28,000 1,421,000
Kimberly-Clark Corp. .......................... 23,000 1,500,750
-----------
2,921,750
-----------
Technology -- 25.35%
BMC Software, Inc. * .......................... 9,800 783,388
Boeing Co. .................................... 21,000 872,812
Cisco Systems, Inc. * ......................... 44,000 4,713,500
Compaq Computer Corp. ......................... 222,024 6,008,524
Dell Computer Corp. * ......................... 11,000 561,000
EMC Corp. * ................................... 16,000 1,748,000
Hewlett-Packard Co. ........................... 43,000 4,899,313
Intel Corp. ................................... 130,000 10,700,625
International Business Machines Corp. ......... 48,000 5,184,000
See accompanying notes to financial statements.
<PAGE>
McM Funds -- Schedule of Investments (unaudited) December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Equity Investment Fund (continued)
Shares Value
-------- ---------------
<S> <C> <C>
COMMON STOCKS -- (continued)
Lucent Technologies, Inc. ................................... 68,500 $ 5,124,656
Microsoft Corp. * ........................................... 63,000 7,355,250
Motorola, Inc. .............................................. 37,000 5,448,250
Parametric Technology Corp. * ............................... 79,000 2,137,938
Raytheon Co. Cl. A .......................................... 816 20,247
Seagate Technology, Inc. * .................................. 47,000 2,188,437
Sun Microsystems, Inc. * .................................... 22,000 1,703,625
Xerox Corp. ................................................. 45,000 1,020,937
------------
60,470,502
------------
Transportation -- 1.42%
AMR Corp. * ................................................. 32,000 2,144,000
CSX Corp. ................................................... 39,500 1,239,312
------------
3,383,312
------------
Utilities -- 10.07%
AT & T Corp. ................................................ 46,000 2,334,500
Edison International ........................................ 66,000 1,728,375
El Paso Natural Gas Co. ..................................... 31,000 1,203,188
GTE Corp. ................................................... 52,000 3,669,250
MCI WorldCom, Inc. * ........................................ 82,500 4,377,656
PECO Energy Co. ............................................. 22,500 781,875
PG&E Corp. .................................................. 51,570 1,057,185
SBC Communications, Inc. .................................... 72,000 3,510,000
Unicom Corp. ................................................ 38,000 1,273,000
Vodafone AirTouch plc ADR ................................... 82,750 4,096,125
------------
24,031,154
------------
TOTAL COMMON STOCKS -- 99.88% (Cost $169,488,650) (1) ....... 238,307,124
------------
CASH AND OTHER ASSETS NET OF LIABILITIES -- 0.12% ........... 274,867
------------
NET ASSETS -- 100.00% ....................................... $238,581,991
============
(1) Aggregate cost for federal income tax purposes is $169,488,650 and net unrealized
appreciation is as follows:
Gross unrealized appreciation ............................. $ 76,031,233
Gross unrealized depreciation ............................. (7,212,759)
------------
Net unrealized appreciation .. ......................... $ 68,818,474
============
* Non-dividend paying stock
</TABLE>
See accompanying notes to financial statements.
<PAGE>
Statements of Assets and Liabilities December 31, 1999 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
McM
McM Intermediate
Principal Fixed
Preservation Income
Fund Fund
---------------- ----------------
<S> <C> <C>
Assets:
Investments in securities at value (cost
$68,220,173, $163,033,000, $30,104,271,
$146,729,916 and $169,488,650, respectively) .......... $ 68,220,173 $157,404,151
Cash-interest bearing accounts ......................... 4,618,268 2,493,996
Dividends and interest receivable ...................... 258,430 1,717,024
Receivable for investments sold ........................ 0 0
Receivable for fund shares sold ........................ 0 0
Other receivables ...................................... 1,534 40,551
Due from advisor, net .................................. 0 0
Other assets ........................................... 4,622 11,688
------------ ------------
Total assets .......................................... 73,103,027 161,667,410
------------ ------------
Liabilities:
Payable for securities purchased ....................... 0 0
Distributions payable .................................. 316,288 0
Accrued expenses ....................................... 1,454 3,310
Payable to advisor, net ................................ 2,060 47,789
------------ ------------
Total liabilities ..................................... 319,802 51,099
------------ ------------
Net Assets:
Applicable to 72,782,874, 16,198,418, 2,884,957,
8,887,322 and 7,896,009 shares outstanding,
respectively .......................................... $ 72,783,225 $161,616,311
============ ============
Net Assets Consist of:
Capital paid-in ........................................ $ 72,782,874 $167,215,550
Accumulated undistributed (distributions in excess
of) net investment income ............................. 0 34,737
Accumulated net realized gain (loss) on investments 351 (5,127)
Net unrealized appreciation/(depreciation)
on investments ........................................ 0 (5,628,849)
------------ ------------
$ 72,783,225 $161,616,311
============ ============
Net asset value and redemption price per share .......... $ 1.00 $ 9.98
============ ============
</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
$68,220,173, $163,033,000, $30,104,271,
$146,729,916 and $169,488,650, respectively) .......... $ 28,831,478 $173,325,635 $ 238,307,124
Cash-interest bearing accounts ......................... 171,130 2,194,902 346,609
Dividends and interest receivable ...................... 355,992 930,114 332,609
Receivable for investments sold ........................ 0 528,914 1,195,440
Receivable for fund shares sold ........................ 0 0 412
Other receivables ...................................... 617 9,090 16,699
Due from advisor, net .................................. 0 3,728 940
Other assets ........................................... 2,153 11,990 16,182
------------ ------------ -------------
Total assets .......................................... 29,361,370 177,004,373 240,216,015
------------ ------------ -------------
Liabilities:
Payable for securities purchased ....................... 0 0 1,541,856
Distributions payable .................................. 0 0 0
Accrued expenses ....................................... 12,179 56,976 92,168
Payable to advisor, net ................................ 3,691 0 0
------------ ------------ -------------
Total liabilities ..................................... 15,870 56,976 1,634,024
------------ ------------ -------------
Net Assets:
Applicable to 72,782,874, 16,198,418, 2,884,957,
8,887,322 and 7,896,009 shares outstanding,
respectively .......................................... $ 29,345,500 $176,947,397 $ 238,581,991
============ ============ =============
Net Assets Consist of:
Capital paid-in ........................................ $ 30,687,321 $149,393,258 $ 167,254,997
Accumulated undistributed (distributions in excess
of) net investment income ............................. (7,281) (11,770) 51,406
Accumulated net realized gain (loss) on investments (61,747) 970,190 2,457,114
Net unrealized appreciation/(depreciation)
on investments ........................................ (1,272,793) 26,595,719 68,818,474
------------ ------------ -------------
$ 29,345,500 $176,947,397 $ 238,581,991
============ ============ =============
Net asset value and redemption price per share .......... $ 10.17 $ 19.91 $ 30.22
============ ============ =============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
Statements of Operations
For the six months ended December 31, 1999 (unaudited)
- --------------------------------------------------------------------------------
<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,
$94 and $0, respectively) ............................... $ 0 $ 0
Interest ................................................. 1,994,430 4,881,065
----------- -------------
Total investment income ................................. 1,994,430 4,881,065
----------- -------------
Expenses:
Investment advisory fees (Note E) ........................ 94,353 276,543
Transfer agent fees ...................................... 17,800 13,726
Administration fees ...................................... 26,160 43,501
Accounting fees .......................................... 18,417 26,490
Legal fees ............................................... 1,163 2,770
Custodian fees ........................................... 9,514 12,271
Insurance fees ........................................... 3,496 9,420
Registration expenses .................................... 5,240 0
Amortization of organization costs (Note A) .............. 940 940
Report to shareholder expense ............................ 1,087 2,617
Auditing fees ............................................ 5,485 6,839
Trustees fees ............................................ 1,708 4,199
Miscellaneous expenses ................................... 151 0
----------- -------------
Total expenses .......................................... 185,514 399,316
Expenses reimbursed (Note E) ............................. (72,290) (3,853)
Expense reimbursement recovery (Note E) .................. 0 0
----------- -------------
Net expenses ............................................ 113,224 395,463
----------- -------------
Net Investment Income ..................................... 1,881,206 4,485,602
----------- -------------
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain (loss) on investments .................. 50 (68,018)
Net change in unrealized appreciation/depreciation on
investments ............................................. 0 (3,514,326)
----------- -------------
Net realized and unrealized gain (loss) on investments ... 50 (3,582,344)
----------- -------------
Increase in Net Assets from Operations .................... $ 1,881,256 $ 903,258
=========== =============
</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,
$94 and $0, respectively) ............................... $ 0 $ 715,749 $ 1,607,559
Interest ................................................. 920,293 2,099,711 108,950
----------- ------------ -----------
Total investment income ................................. 920,293 2,815,460 1,716,509
----------- ------------ -----------
Expenses:
Investment advisory fees (Note E) ........................ 50,832 373,380 557,930
Transfer agent fees ...................................... 13,278 16,537 20,033
Administration fees ...................................... 15,294 44,269 56,261
Accounting fees .......................................... 15,000 26,723 30,744
Legal fees ............................................... 479 2,649 3,715
Custodian fees ........................................... 2,683 14,327 21,927
Insurance fees ........................................... 1,761 8,567 11,738
Registration expenses .................................... 8,282 9,141 9,440
Amortization of organization costs (Note A) .............. 940 940 940
Report to shareholder expense ............................ 252 2,215 2,977
Auditing fees ............................................ 5,026 8,525 8,778
Trustees fees ............................................ 712 3,909 5,104
Miscellaneous expenses ................................... 177 403 202
----------- ------------ -----------
Total expenses .......................................... 114,716 511,585 729,789
Expenses reimbursed (Note E) ............................. (42,099) (13,779) (940)
Expense reimbursement recovery (Note E) .................. 0 0 19,215
----------- ------------ -----------
Net expenses ............................................ 72,617 497,806 748,064
----------- ------------ -----------
Net Investment Income ..................................... 847,676 2,317,654 968,445
----------- ------------ -----------
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain (loss) on investments .................. (62,878) 1,957,851 3,330,580
Net change in unrealized appreciation/depreciation on
investments ............................................. (769,239) (1,128,454) 309,864
----------- ------------ -----------
Net realized and unrealized gain (loss) on investments ... (832,117) 829,397 3,640,444
----------- ------------ -----------
Increase in Net Assets from Operations .................... $ 15,559 $ 3,147,051 $ 4,608,889
=========== ============ ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
McM Principal
Preservation Fund
-----------------------------------
For the
Six Months Ended For the
12/31/1999 Year Ended
(unaudited) 06/30/99
------------------ ---------------
<S> <C> <C>
Operations:
Net investment income .......................... $ 1,881,206 $ 2,441,008
Net realized gain (loss) on investments ........ 50 2,155
Net change in unrealized appreciation/
depreciation on investments ................... 0 0
-------------- ------------
Increase in net assets ......................... 1,881,256 2,443,163
-------------- ------------
Dividends and Distributions to Shareholders:
From net investment income ..................... (1,881,206) (2,441,008)
From capital gains ............................. 0 0
-------------- ------------
Total Distributions ............................ (1,881,206) (2,441,008)
-------------- ------------
Capital Share Transactions - Note C ............. (13,156,982) 37,754,370
-------------- ------------
Total increase (decrease) in net assets ........ (13,156,932) 37,756,525
Net Assets:
Beginning of period ............................ 85,940,157 48,183,632
-------------- ------------
End of period (including undistributed
(distributions in excess of) net investment
income of $0, $0, $34,737, $441,961,
($7,281), and $87,028,
respectively) . ............................... $ 72,783,225 $ 85,940,157
============== ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
McM Intermediate McM Fixed
Fixed Income Fund Income Fund
----------------------------------- -------------------------------------
For the For the
Six Months Ended For the Six Months Ended For the
12/31/1999 Year Ended 12/31/1999 Year Ended
(unaudited) 06/30/99 (unaudited) 06/30/99
------------------ --------------- ------------------ ---------------
<S> <C> <C> <C> <C>
Operations:
Net investment income .......................... $ 4,485,602 $ 7,449,008 $ 847,676 $ 1,426,949
Net realized gain (loss) on investments ........ (68,018) 597,813 (62,878) 75,632
Net change in unrealized appreciation/
depreciation on investments ................... (3,514,326) (4,236,490) (769,239) (1,005,410)
------------ ------------ ----------- ------------
Increase in net assets ......................... 903,258 3,810,331 15,559 497,171
------------ ------------ ----------- ------------
Dividends and Distributions to Shareholders:
From net investment income ..................... (4,907,555) (7,409,528) (941,995) (1,411,983)
From capital gains ............................. (468,383) (509,217) (47,400) (51,503)
------------ ------------ ----------- ------------
Total Distributions ............................ (5,375,938) (7,918,745) (989,395) (1,463,486)
------------ ------------ ----------- ------------
Capital Share Transactions - Note C ............. 12,993,084 35,493,900 2,911,388 6,172,570
------------ ------------ ----------- ------------
Total increase (decrease) in net assets ........ 8,520,404 31,385,486 1,937,552 5,206,255
Net Assets:
Beginning of period ............................ 153,095,907 121,710,421 27,407,948 22,201,693
------------ ------------ ----------- ------------
End of period (including undistributed
(distributions in excess of) net investment
income of $0, $0, $34,737, $441,961,
($7,281), and $87,028,
respectively) . ............................... $161,616,311 $153,095,907 $29,345,500 $ 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
Six Months Ended For the Six Months Ended For the
12/31/1999 Year Ended 12/31/1999 Year Ended
(unaudited) 06/30/99 (unaudited) 06/30/99
------------------ --------------- ------------------ ---------------
<S> <C> <C> <C> <C>
Operations:
Net investment income ......................... $ 2,317,654 $ 3,231,926 $ 968,445 $ 1,429,932
Net realized gain on investments .............. 1,957,851 1,602,359 3,330,580 3,413,177
Net change in unrealized appreciation/
depreciation on investments .................. (1,128,454) 11,701,078 309,864 31,837,120
------------ ------------ ------------ ------------
Increase in net assets ........................ 3,147,051 16,535,363 4,608,889 36,680,229
------------ ------------ ------------ ------------
Dividends and Distributions to Shareholders:
From net investment income .................... (2,560,470) (3,129,415) (1,002,488) (1,362,745)
From capital gains ............................ (2,513,773) (404,513) (3,846,363) (860,636)
------------ ------------ ------------ ------------
Total Distributions ........................... (5,074,243) (3,533,928) (4,848,851) (2,223,381)
------------ ------------ ------------ ------------
Capital Share Transactions - Note C ............ 24,259,091 48,413,109 34,720,135 41,103,947
------------ ------------ ------------ ------------
Total increase in net assets .................. 22,331,899 61,414,544 34,480,173 75,560,795
Net Assets:
Beginning of period ........................... 154,615,498 93,200,954 204,101,818 128,541,023
------------ ------------ ------------ ------------
End of period (including undistributed (distri-
butions in excess of) net investment
income of ($11,770), $231,046, $51,406
and $85,449, respectively .................... $176,947,397 $154,615,498 $238,581,991 $204,101,818
============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
McM FUNDS -- Notes to Financial Statements December 31, 1999 (unaudited)
- --------------------------------------------------------------------------------
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, a Fund
may experience delay or difficulty in exercising its right to realize upon
the security and, in addition, may incur a loss if the value of the
security should decline, as well as disposition costs in liquidating the
security.
(3) Investment Income and Securities Transactions: Dividend income is
recorded on the ex-dividend date. Interest income is accrued daily.
Securities transactions are accounted for on the date securities are
purchased or sold. The cost of securities sold is determined using the
first-in-first-out method.
<PAGE>
McM FUNDS -- Notes to Financial Statements (continued)
December 31, 1999 (unaudited)
- --------------------------------------------------------------------------------
(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 six months ended December
31, 1999. 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
--------------------------------------------------------------------------
Six Months Ended Year Ended
December 31, 1999 June 30, 1999
------------------------------------ ------------------------------------
Shares Amount Shares Amount
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Shares sold ...................... 94,101,300 $ 94,101,300 204,601,680 $ 204,601,680
Shares issued through
Reinvestment of dividends ....... 1,500,767 1,500,767 2,334,795 2,334,795
Shares redeemed .................. (108,759,049) (108,759,049) (169,182,105) (169,182,105)
------------ -------------- ------------ ---------------
Net Increase/(decrease) .......... (13,156,982) $ (13,156,982) 37,754,370 $ 37,754,370
============ ============== ============ ===============
FIXED INCOME FUND
--------------------------------------------------------------------------
Six Months Ended Year Ended
December 31, 1999 June30, 1999
------------------------------------ ------------------------------------
Shares Amount Shares Amount
--------------- -------------- --------------- ---------------
Shares sold ...................... 344,480 $ 3,579,260 616,046 $ 6,728,274
Shares issued through
Reinvestment of dividends ....... 92,026 955,073 134,206 1,460,844
Shares redeemed .................. (157,122) (1,622,945) (184,316) (2,016,548)
--------------- -------------- --------------- ---------------
Net Increase ..................... 279,384 $ 2,911,388 565,936 $ 6,172,570
=============== ============== =============== ===============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INTERMEDIATE FIXED INCOME FUND
--------------------------------------------------------------------
Six Months Ended Year Ended
December 31, 1999 June 30, 1999
--------------------------------- ---------------------------------
Shares Amount Shares Amount
--------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
Shares sold ...................... 1,884,990 $ 19,115,343 4,079,524 $ 43,112,966
Shares issued through
Reinvestment of dividends ....... 520,714 5,275,454 738,623 7,776,483
Shares redeemed .................. (1,122,224) (11,397,713) (1,457,991) (15,395,549)
---------- -------------- ---------- --------------
Net Increase/(decrease) .......... 1,283,480 $ 12,993,084 3,360,156 $ 35,493,900
========== ============== ========== ==============
BALANCED FUND
----------------------------------------------------------------------
Six Months Ended Year Ended
December 31, 1999 June 30, 1999
--------------------------------- -----------------------------------
Shares Amount Shares Amount
------------- -------------- ------------- --------------
Shares sold ...................... 1,516,707 $ 30,177,955 2,831,668 $ 54,224,052
Shares issued through
Reinvestment of dividends ....... 254,617 5,033,991 184,581 3,481,542
Shares redeemed .................. (558,474) (10,952,855) (484,240) (9,292,485)
------------- -------------- ------------- --------------
Net Increase ..................... 1,212,850 $ 24,259,091 2,532,009 $ 48,413,109
============= ============== ============= ==============
</TABLE>
<PAGE>
McM FUNDS -- Notes to Financial Statements (continued)
December 31, 1999 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY INVESTMENT FUND
-----------------------------------------------------------------
Six Months Ended Year Ended
December 31, 1999 June 30, 1999
------------------------------- -------------------------------
Shares Amount Shares Amount
------------ ---------------- ------------ ----------------
<S> <C> <C> <C> <C>
Shares sold ........................ 1,773,502 $ 52,560,578 2,552,391 $ 65,846,183
Shares issued through
Reinvestment of dividends ......... 160,508 4,749,908 81,486 2,184,225
Shares redeemed .................... (758,801) (22,590,351) (996,278) (26,926,461)
--------- ------------- --------- -------------
Net Increase ....................... 1,175,209 $ 34,720,135 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 six months
ended December 31, 1999 were:
Aggregate Proceeds from
Purchases Sales
-------------- --------------
Intermediate Fixed Income Fund ......... $35,737,436 $23,585,816
Fixed Income Fund ...................... 6,026,654 3,466,957
Balanced Fund .......................... 33,213,264 12,329,191
Equity Investment Fund ................. 40,853,115 7,492,621
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 December 31, 1999, the net amount of expenses the
Advisor absorbed, subject to repayment, totaled $132,021: $72,290 for the
Principal Preservation Fund; $3,853 for the Intermediate Fixed Income Fund;
$42,099 for the Fixed Income Fund; and $13,779 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. Since July 14, 1994 (July 13,
1994 for the Principal Preservation Fund) through December 31, 1999, the
Advisor has reduced its management fee and otherwise absorbed Fund expenses for
each Fund in the following amounts: Principal Preservation Fund $489,609,
Intermediate Fixed Income Fund $379,069, Fixed Income Fund $345,705 and
Balanced Fund $383,827.
<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
Six Months
Ended For the
12/31/99 Year Ended
(unaudited) 06/30/99
------------- ------------
<S> <C> <C>
Net Asset Value, beginning of period .............. $ 1.00 $ 1.00
------- ------
Income from investment operations
Net investment income ............................ 0.03 0.05
------- ------
Total from investment operations ................ 0.03 0.05
------- ------
Less Distributions:
From net investment income ....................... (0.03) (0.05)
------- -------
Total distributions ............................. (0.03) (0.05)
------- -------
Net Asset Value, end of period .................... $ 1.00 $ 1.00
======= =======
Total return ...................................... 2.55% 4.97%
Ratios/Supplemental Data
Net assets, end of period (in 000's) ............. $72,783 $85,940
Ratio of expenses to average net assets before
reimbursement and recovery of expenses by
Advisor ......................................... 0.49%(1) 0.61%
Ratio of expenses to average net assets after
reimbursement of expenses by Advisor ............ 0.30%(1) 0.30%
Ratio of net investment income to average net
assets before reimbursement of expenses by
Advisor ......................................... 4.80%(1) 4.53%
Ratio of net investment income to average net
assets after reimbursement of expenses by
Advisor ......................................... 4.99%(1) 4.84%
Portfolio turnover ............................... N/A N/A
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
McM Principal
Preservation Fund
-------------------------------------------------------
For the For the For the For the
Year Ended Year Ended Year Ended Period Ended
06/30/98 06/30/97 06/30/96 06/30/95*
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Net Asset Value, beginning of period .............. $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- -------
Income from investment operations
Net investment income ............................ 0.05 0.05 0.05 0.05
------- ------- ------- -------
Total from investment operations ................ 0.05 0.05 0.05 0.05
------- ------- ------- -------
Less Distributions:
From net investment income ....................... (0.05) (0.05) (0.05) (0.05)
------- ------- ------- -------
Total distributions ............................. (0.05) (0.05) (0.05) (0.05)
------- ------- ------- -------
Net Asset Value, end of period .................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= =======
Total return ...................................... 5.41% 5.24% 5.39% 5.10%(2)
Ratios/Supplemental Data
Net assets, end of period (in 000's) ............. $48,184 $32,703 $24,195 $11,813
Ratio of expenses to average net assets before
reimbursement and recovery of expenses by
Advisor ......................................... 0.67% 0.77% 0.93% 2.77%(1)
Ratio of expenses to average net assets after
reimbursement of expenses by Advisor ............ 0.30% 0.30% 0.30% 0.30%(1)
Ratio of net investment income to average net
assets before reimbursement of expenses by
Advisor ......................................... 4.92% 4.65% 4.60% 2.91%(1)
Ratio of net investment income to average net
assets after reimbursement of expenses by
Advisor ......................................... 5.29% 5.12% 5.23% 5.38%(1)
Portfolio turnover ............................... N/A N/A N/A N/A
</TABLE>
* McM Principal Preservation Fund commenced investment operations on July 13,
1994.
(1) Annualized.
(2) Not annualized.
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
Six Months
Ended For the
12/31/99 Year Ended
(unaudited) 06/30/99
------------- ------------
<S> <C> <C>
Net Asset Value, beginning of period ............. $ 10.26 $ 10.53
--------- -------
Income from investment operations
Net investment income ........................... 0.29 0.57
Net realized and unrealized gain (loss) on
investments .................................... (0.22) (0.23)
--------- --------
Total from investment operations ............... 0.07 0.34
--------- --------
Less Distributions:
From net investment income ...................... (0.32) (0.57)
From capital gains .............................. (0.03) (0.04)
--------- --------
Total distributions ............................ (0.35) (0.61)
--------- --------
Net Asset Value, end of period ................... $ 9.98 $ 10.26
========= ========
Total return ..................................... 0.65% 3.25%
Ratios/Supplemental Data
Net assets, end of period (in 000's) ............ $161,616 $153,096
Ratio of expenses to average net assets before
reimbursement and recovery of expenses
by Advisor ..................................... 0.51%(1) 0.52%
Ratio of expenses to average net assets after
reimbursement of expenses by Advisor ........... 0.50%(1) 0.50%
Ratio of net investment income to average net
assets before reimbursement of expenses
by Advisor ..................................... 5.69%(1) 5.40%
Ratio of net investment income to average net
assets after reimbursement of expenses by
Advisor ........................................ 5.69%(1) 5.42%
Portfolio turnover .............................. 15.40% 40.40%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
McM Intermediate
Fixed Income Fund
-------------------------------------------------------
For the For the For the For the
Year Ended Year Ended Year Ended Period Ended
06/30/98 06/30/97 06/30/96 06/30/95*
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Net Asset Value, beginning of period ............. $ 10.26 $10.17 $ 10.37 $ 10.00
-------- ------- ------- --------
Income from investment operations
Net investment income ........................... 0.60 0.60 0.57 0.54
Net realized and unrealized gain (loss) on
investments .................................... 0.27 0.11 (0.10) 0.34
-------- ------- ------- --------
Total from investment operations ............... 0.87 0.71 0.47 0.88
-------- ------- ------- --------
Less Distributions:
From net investment income ...................... (0.60) (0.60) (0.57) (0.51)
From capital gains .............................. 0.00 (0.02) (0.10) 0.00
-------- ------- ------- ---------
Total distributions ............................ (0.60) (0.62) (0.67) (0.51)
-------- ------- ------- ---------
Net Asset Value, end of period ................... $ 10.53 $ 10.26 $ 10.17 $ 10.37
======== ======= ======= =========
Total return ..................................... 8.68% 7.14% 4.61% 9.19%(2)
Ratios/Supplemental Data
Net assets, end of period (in 000's) ............ $121,710 $93,402 $76,045 $ 29,936
Ratio of expenses to average net assets before
reimbursement and recovery of expenses
by Advisor ..................................... 0.55% 0.59% 0.69% 1.72%(1)
Ratio of expenses to average net assets after
reimbursement of expenses by Advisor ........... 0.50% 0.50% 0.50% 0.50%(1)
Ratio of net investment income to average net
assets before reimbursement of expenses
by Advisor ..................................... 5.74% 5.80% 5.52% 5.01%(1)
Ratio of net investment income to average net
assets after reimbursement of expenses by
Advisor ........................................ 5.79% 5.89% 5.71% 6.24%(1)
Portfolio turnover .............................. 45.44% 36.02% 75.26% 227.09%(2)
</TABLE>
* McM Intermediate Fixed Income Fund commenced investment operations on July
14, 1994.
(1) Annualized.
(2) Not annualized.
<PAGE>
Financial Highlights (continued)
- --------------------------------------------------------------------------------
The tables below set forth financial data for a share of beneficial interest
outstanding throughout each period presented.
<TABLE>
<CAPTION>
McM Fixed
Income Fund
--------------------------------
For the
Six Months Ended For the
12/31/99 Year Ended
(unaudited) 06/30/99
------------------ ------------
<S> <C> <C>
Net Asset Value, beginning of period .............. $ 10.52 $ 10.89
-------- -------
Income from investment operations
Net investment income ............................ 0.30 0.61
Net realized and unrealized gain (loss) on
investments ..................................... (0.30) (0.35)
--------- -------
Total from investment operations ................ 0.00 0.26
--------- -------
Less Distributions:
From net investment income ....................... (0.34) (0.61)
From capital gains ............................... (0.01) (0.02)
--------- -------
Total distributions ............................. (0.35) (0.63)
--------- -------
Net Asset Value, end of period .................... $ 10.17 $ 10.52
========= =======
Total return ...................................... 0.04% 2.34%
Ratios/Supplemental Data
Net assets, end of period (in 000's) ............. $ 29,346 $27,408
Ratio of expenses to average net assets before
reimbursement and recovery of expenses by
Advisor ......................................... 0.79%(1) 0.93%
Ratio of expenses to average net assets after
reimbursement of expenses by Advisor ............ 0.50%(1) 0.50%
Ratio of net investment income to average net
assets before reimbursement of expenses by
Advisor ......................................... 5.56%(1) 5.16%
Ratio of net investment income to average net
assets after reimbursement of expenses by
Advisor ......................................... 5.85%(1) 5.59%
Portfolio turnover ............................... 12.25% 29.32%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
McM Fixed
Income Fund
-------------------------------------------------------
For the For the For the For the
Year Ended Year Ended Year Ended Period Ended
06/30/98 06/30/97 06/30/96 06/30/95*
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Net Asset Value, beginning of period .............. $ 10.44 $ 10.33 $ 10.58 $ 10.00
------- ------- ------- --------
Income from investment operations
Net investment income ............................ 0.62 0.65 0.64 0.55
Net realized and unrealized gain (loss) on
investments ..................................... 0.47 0.12 (0.20) 0.56
------- ------- ------- --------
Total from investment operations ................ 1.09 0.77 0.44 1.11
------- ------- ------- --------
Less Distributions:
From net investment income ....................... (0.62) (0.65) (0.63) (0.53)
From capital gains ............................... (0.02) (0.01) (0.06) 0.00
------- ------- ------- --------
Total distributions ............................. (0.64) (0.66) (0.69) (0.53)
------- ------- ------- --------
Net Asset Value, end of period .................... $ 10.89 $ 10.44 $ 10.33 $ 10.58
======= ======= ======= ========
Total return ...................................... 10.71% 7.72% 4.16% 11.55%(2)
Ratios/Supplemental Data
Net assets, end of period (in 000's) ............. $22,202 $ 9,565 $ 7,992 $ 6,599
Ratio of expenses to average net assets before
reimbursement and recovery of expenses by
Advisor ......................................... 1.17% 1.57% 1.82% 7.29%(1)
Ratio of expenses to average net assets after
reimbursement of expenses by Advisor ............ 0.50% 0.50% 0.50% 0.50%(1)
Ratio of net investment income to average net
assets before reimbursement of expenses by
Advisor ......................................... 5.26% 5.25% 4.70% (0.47%)(1)
Ratio of net investment income to average net
assets after reimbursement of expenses by
Advisor ......................................... 5.93% 6.32% 6.02% 6.33%(1)
Portfolio turnover ............................... 58.22% 32.46% 37.62% 150.77%(2)
</TABLE>
* McM Fixed Income Fund commenced investment operations on July 14, 1994.
(1) Annualized.
(2) Not annualized.
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
Six Months Ended For the
12/31/99 Year Ended
(unaudited) 06/30/99
------------------ ------------
<S> <C> <C>
Net Asset Value, beginning of period .............. $ 20.15 $ 18.12
-------- --------
Income from investment operations
Net investment income ............................ 0.27 0.50
Net realized and unrealized gain on
investments ..................................... 0.08 2.10
-------- --------
Total from investment operations ................ 0.35 2.60
-------- --------
Less Distributions:
From net investment income ....................... (0.30) (0.50)
From capital gains ............................... (0.29) (0.07)
-------- --------
Total distributions ............................. (0.59) (0.57)
-------- --------
Net Asset Value, end of period .................... $ 19.91 $ 20.15
======== ========
Total return ...................................... 1.80% 14.60%
Ratios/Supplemental Data
Net assets, end of period (in 000's) ............. $176,947 $154,615
Ratio of expenses to average net assets before
reimbursement and recovery of expenses by
Advisor ......................................... 0.62%(1) 0.64%
Ratio of expenses to average net assets after
reimbursement and recovery of expenses by
Advisor ......................................... 0.60%(1) 0.60%
Ratio of net investment income to average net
assets before reimbursement and recovery of
expenses by Advisor ............................. 2.78%(1) 2.70%
Ratio of net investment income to average net
assets after reimbursement and recovery of
expenses by Advisor ............................. 2.80%(1) 2.74%
Portfolio turnover ............................... 7.65% 18.58%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
McM Balanced
Fund
-------------------------------------------------------
For the For the For the For the
Year Ended Year Ended Year Ended Period Ended
06/30/98 06/30/97 06/30/96 06/30/95*
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Net Asset Value, beginning of period .............. $ 15.30 $ 12.75 $ 11.35 $ 10.00
------- ------- ------- ---------
Income from investment operations
Net investment income ............................ 0.47 0.43 0.40 0.36
Net realized and unrealized gain on
investments ..................................... 2.82 2.54 1.49 1.33
------- ------- ------- ---------
Total from investment operations ................ 3.29 2.97 1.89 1.69
------- ------- ------- ---------
Less Distributions:
From net investment income ....................... (0.47) (0.42) (0.40) (0.34)
From capital gains ............................... 0.00 0.00 (0.09) 0.00
------- ------- ------- ---------
Total distributions ............................. (0.47) (0.42) (0.49) (0.34)
------- ------- ------- ---------
Net Asset Value, end of period .................... $ 18.12 $ 15.30 $ 12.75 $ 11.35
======= ======= ======= =========
Total return ...................................... 21.76% 23.65% 16.86% 17.31%(2)
Ratios/Supplemental Data
Net assets, end of period (in 000's) ............. $93,201 $40,941 $11,915 $ 3,070
Ratio of expenses to average net assets before
reimbursement and recovery of expenses by
Advisor ......................................... 0.74% 1.01% 2.21% 8.41%(1)
Ratio of expenses to average net assets after
reimbursement and recovery of expenses by
Advisor ......................................... 0.60% 0.60% 0.60% 0.60%(1)
Ratio of net investment income to average net
assets before reimbursement and recovery of
expenses by Advisor ............................. 2.87% 2.97% 1.81% (3.54%)(1)
Ratio of net investment income to average net
assets after reimbursement and recovery of
expenses by Advisor ............................. 3.01% 3.38% 3.43% 4.28%(1)
Portfolio turnover ............................... 20.73% 31.64% 26.16% 81.05%(2)
</TABLE>
* McM Balanced Fund commenced investment operations on July 14, 1994.
(1) Annualized.
(2) Not annualized.
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 Equity
Investment Fund
---------------------------
For the
Six Months
Ended For the
12/31/99 Year Ended
(unaudited) 06/30/99
------------- ------------
<S> <C> <C>
Net Asset Value, beginning of period $ 30.37 $ 25.29
--------- ---------
Income from investment operations
Net investment income .............................. 0.13 0.23
Net realized and unrealized gain on investments..... 0.35 5.21
--------- ---------
Total from investment operations .................. 0.48 5.44
--------- ---------
Less Distributions:
From net investment income ......................... (0.13) (0.22)
From capital gains ................................. (0.50) (0.14)
--------- ---------
Total distributions ............................... (0.63) (0.36)
--------- ---------
Net Asset Value, end of period ...................... 30.22 $ 30.37
========= =========
Total return ........................................ 1.63% 21.70%
Ratios/Supplemental Data
Net assets, end of period (in 000's) ............... $238,582 $ 204,102
Ratio of expenses to average net assets before
reimbursement and recovery of expenses by
Advisor ........................................... 0.65%(1) 0.66%
Ratio of expenses to average net assets after
reimbursement and recovery of expenses by
Advisor ........................................... 0.67%(1) 0.75%
Ratio of net investment income to average net
assets before reimbursement and recovery of
expenses by Advisor ............................... 0.89%(1) 0.95%
Ratio of net investment income to average net
assets after reimbursement and recovery of
expenses by Advisor ............................... 0.87%(1) 0.86%
Portfolio turnover ................................. 3.47% 4.79%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
McM Equity
Investment Fund
-------------------------------------------------------
For the For the For the For the
Year Ended Year Ended Year Ended Period Ended
06/30/98 06/30/97 06/30/96 06/30/95*
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Net Asset Value, beginning of period $ 19.71 $ 14.85 $ 11.95 $ 10.00
--------- -------- -------- -------
Income from investment operations
Net investment income .............................. 0.23 0.24 0.21 0.19
Net realized and unrealized gain on investments..... 5.62 4.87 2.94 1.94
--------- -------- -------- -------
Total from investment operations .................. 5.85 5.11 3.15 2.13
--------- -------- -------- -------
Less Distributions:
From net investment income ......................... (0.23) (0.24) (0.21) (0.18)
From capital gains ................................. (0.04) (0.01) (0.04) 0.00
---------- --------- --------- ---------
Total distributions ............................... (0.27) (0.25) (0.25) (0.18)
---------- --------- --------- ---------
Net Asset Value, end of period ...................... $ 25.29 $ 19.71 $ 14.85 $ 11.95
========== ========= ========= =========
Total return ........................................ 29.89% 34.68% 26.53% 21.57%(2)
Ratios/Supplemental Data
Net assets, end of period (in 000's) ............... $ 128,541 $ 58,593 $ 23,913 $ 4,866
Ratio of expenses to average net assets before
reimbursement and recovery of expenses by
Advisor ........................................... 0.75% 0.88% 1.72% 8.48%(1)
Ratio of expenses to average net assets after
reimbursement and recovery of expenses by
Advisor ........................................... 75% 0.75% 0.75% 0.75%(1)
Ratio of net investment income to average net
assets before reimbursement and recovery of
expenses by Advisor ............................... 1.05% 1.36% 0.80% (5.50%)(1)
Ratio of net investment income to average net
assets after reimbursement and recovery of
expenses by Advisor ............................... 1.05% 1.49% 1.77% 2.24%(1)
Portfolio turnover ................................. 0.57% 0.88% 0.92% 1.81%(2)
</TABLE>
* McM Equity Investment Fund commenced investment operations on July 14, 1994.
(1) Annualized.
(2) Not annualized.
See accompanying notes to financial statements.
<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. Paul, Hastings, Janofsky & Walker LLP
3200 Horizon Drive 345 California Street
King of Prussia, PA 19406 San Francisco, CA 94104
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.
AR1299 LOGO
