<PAGE>
MAGNA FUNDS
LETTER TO SHAREHOLDERS
We are pleased to provide you with the Semi-Annual Report for the period ended
February 29, 1996 for the Magna Funds, consisting of Magna Growth & Income
Fund and Magna Intermediate Government Bond Fund. Aggregate net assets and
shares outstanding have continued to grow into this our second year of
operation. Total net assets reached over $92,000,000 as a result of continued
inflow of funds from existing and new shareholders and from stock and bond
market advances.
The stock and bond markets continued on their upward trend through the first
six months of our fiscal year which ends on August 31, 1996. Some unexpected
data relating to the state of the economy led to increased price volatility
for the bond market in February. The U.S. equity markets appear to have
escaped a downturn, but have seen some rise in volatility. It continues to be
extremely difficult to predict what lies ahead for either market for the
balance of this year.
Considering market conditions, we continue to believe that the prudent
investor should take a long-term view of financial markets and that investors
who try to "time the market" run the risk of missing upward movements while
rarely avoiding downturns.
We look forward to reporting to you again in six months.
Sincerely,
/s/ Barry Hartstone
Barry Hartstone
President
April 12, 1996
<PAGE>
MAGNA GROWTH & INCOME FUND
PORTFOLIO MANAGER REPORT
COMMENTS FROM DISCUSSIONS WITH GARY J. GUTHRIE, PORTFOLIO MANAGER.
HOW HAS THE FUND The fund had a total return of 14.0% and 28.9%
PERFORMED OVER THE PAST exclusive of sales load for the six months and one
SIX MONTH AND ONE YEAR year ended February 29, 1996, respectively. This
PERIODS? compares with the S&P 500 Index returns of 15.3%
and 34.7%, respectively. The average growth and
income fund tracked by Lipper Analytical returned
12.3% and 29.8% for the same six months and one
year periods.
WHAT IS THE COMPOSITION The fund is currently invested in 65 companies
OF THE PORTFOLIO AT THIS which represent 28 industries. We are broadly
TIME? diversified with the single largest equity holding
at 2.3% of the portfolio while the ten largest
positions represent 21% of the portfolio as of
February 29, 1996.
WHAT CONTRIBUTED TO THE Consumer non-durables--food, beverage, tobacco
FUND'S RECENT companies--in addition to drug stocks all performed
PERFORMANCE? well. Coca-Cola, PepsiCo and Philip Morris are good
examples of the food, beverage and tobacco stocks
that have gained value. In the drug/pharmaceutical
area, American Home Products, Bristol-Myers Squibb,
and Johnson & Johnson saw gains as earnings growth
combined with new product development to spur share
prices.
WHAT'S YOUR OUTLOOK FOR Bad weather seems to have dampened activity during
THE NEXT SIX MONTHS? recent months. However, interest rates have started
to rise in recent weeks as the economy rebounded
from the weather effects. Increased volatility in
the stock market will be the likely result until
the strength of the economy comes clearly into
focus. Rising commodity prices may start to squeeze
profit margins unless the price increases are
temporary.
2
<PAGE>
MAGNA GROWTH & INCOME FUND
COMPARATIVE TOTAL RETURN
FOR THE PERIODS ENDED FEBRUARY 29, 1996
<TABLE>
<CAPTION>
SINCE INCEPTION*
SIX MONTHS ONE YEAR (ANNUALIZED)
---------- -------- ----------------
<S> <C> <C> <C>
Magna Growth & Income Fund:
Without sales charge..................... 14.0% 28.9% 19.4%
With 4% sales charge..................... 9.4 23.8 16.2
Lipper Growth & Income Fund Index.......... 12.3 29.8 19.7
S&P 500 Index.............................. 15.3 34.7 25.2
Consumer Price Index (CPI)................. 1.3 2.7 2.5
</TABLE>
- --------
* The Fund commenced operations on September 1, 1994
Past performance is not predictive of future results. Investment returns and
principal value of shares of the Fund will fluctuate with market conditions so
that shares of the Fund, when redeemed, may be worth more or less than their
original cost.
The Fund's total return figures reflect fund expenses and portfolio
transaction costs, and assume the reinvestment of income, dividends and
capital gains distributions. The Lipper Growth & Income Fund Index is composed
of thirty funds. The S&P 500 Index is a broad-based, widely recognized
unmanaged index of 500 common stocks. The total return figures for the indices
do not reflect any commissions or expenses that would be incurred if an
investor individually purchased or sold the securities represented in these
indices. It is generally not possible to invest in an index. The CPI is a
measure of change in consumer prices, as determined by a monthly survey of the
U.S. Bureau of Labor Statistics.
3
<PAGE>
MAGNA INTERMEDIATE GOVERNMENT BOND FUND
PORTFOLIO MANAGER REPORT
COMMENTS FROM DISCUSSIONS WITH L. CLARK ZEDRIC, PORTFOLIO MANAGER.
HOW HAS THE FUND The Fund provided a total return of 10.0%,
PERFORMED OVER THE PAST exclusive of sales loads, for the twelve month
SIX MONTH AND ONE YEAR period ending February 29, 1996, compared to 9.6%
PERIODS? for the Lehman Brothers 1-5 year
Government/Corporate Bond Index and 13.8% for the
Lehman Brothers 6-10 year Government/Corporate Bond
Index. The returns for the past six months were
3.1%, 3.8% and 4.4%, respectively.
BOND INVESTORS HAVE Most definitely, 1994 was one of the worst years
CERTAINLY HAD MORE ever for bonds. The Lipper Intermediate Government
EXCITEMENT THE PAST Bond Index was down 3.7% for the year as a whole.
COUPLE OF YEARS THAN The Federal Funds rate rose from 3% to 6% then
ANYONE COULD REMEMBER, decreased slightly to 5 3/4%. The year 1995 was
OR WANT, HAVEN'T THEY? virtually a reversal of 1994 as rates fell and the
Lipper Intermediate Government Bond Index rose
15.8%.
WHAT DO YOU FORESEE IN
1996? The year started out just fine then February showed
up. During the month the two-year Treasuries yield
increased from 4.90% to 5.40% while the thirty-year
rate climbed from 6.00% to 6.45%. This really hurt
prices so most bonds are down for the year to date.
We believe that rates won't get much higher in 1996
before they begin to drift down later in the year.
Our posture is to be fully invested in bonds albeit
with slightly shorter maturities. We are currently
concentrating new purchases in the 2-5 year
maturity range, while early in 1995 we had been
selecting bonds with maturities in the 10-12 year
range.
OVERALL HOW IS THE FUND We have a large portion of the portfolio scheduled
POSITIONED CONSIDERING to mature fairly evenly over the next seven years.
THE FUTURE INTEREST RATE There are other longer maturity coupon bonds in the
OUTLOOK? portfolio which should provide adequate income
return for many years to come. The Fund's modified
duration is around 4.5 years.
4
<PAGE>
MAGNA INTERMEDIATE GOVERNMENT BOND FUND
COMPARATIVE TOTAL RETURN
FOR THE PERIODS ENDED FEBRUARY 29, 1996
<TABLE>
<CAPTION>
SINCE INCEPTION *
SIX MONTHS ONE YEAR (ANNUALIZED)
---------- -------- -----------------
<S> <C> <C> <C>
Magna Intermediate Government Bond Fund:
Without sales charge.................. 3.1% 10.0% 11.7%
With 4% sales charge.................. (1.0) 5.7 7.2
Lipper Intermediate Government Bond In-
dex.................................... 3.3 9.3 7.8
Lehman Brothers Government/Corporate
Bond Index:
1-5 Years............................. 3.8 9.6 8.1
6-10 Years............................ 4.4 13.8 11.3
</TABLE>
- --------
* The Fund commenced operations on September 1, 1994
Past performance is not predictive of future results. Investment returns and
principal value of shares of the Fund will fluctuate with market conditions so
that shares of the Fund, when redeemed, may be worth more or less than their
original cost.
The Fund's total return figures reflect fund expenses and portfolio
transaction costs, and assume the reinvestment of income and capital gains
distributions. The Lipper Intermediate Government Bond Index consists of
thirty funds. The Lehman Brothers Index is a widely recognized unmanaged index
of government and corporate bonds. The total return figures for the indices do
not reflect any commissions or expenses that would be incurred if an investor
individually purchased or sold the securities represented in these indices. It
is generally not possible to invest in an index.
5
<PAGE>
MAGNA GROWTH & INCOME FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
-------------------- ---------- -----------
<S> <C> <C>
COMMON STOCKS - (84.8%)
AEROSPACE - (1.8%)
Lockheed Martin Corporation............................ 8,400 $ 640,500
-----------
ALUMINUM - (1.1%)
Aluminum Company of America............................ 7,000 397,249
-----------
AUTOMOBILES - (1.8%)
Chrysler Corporation................................... 5,500 310,063
Ford Motor Company..................................... 10,800 337,500
-----------
647,563
-----------
BANKS - (5.8%)
Banc One Corporation................................... 11,000 391,875
Bank of Boston Corporation............................. 6,000 291,750
First Union Corporation................................ 7,000 423,500
Mellon Bank Corporation................................ 9,150 511,256
Nationsbank Corporation................................ 2,000 147,500
Norwest Corporation.................................... 10,000 365,000
-----------
2,130,881
-----------
BUSINESS SERVICES - (1.8%)
Humana Incorporated*................................... 26,800 656,600
-----------
CHEMICALS - (6.1%)
duPont (EI) de Nemours & Company....................... 9,500 726,750
Monsanto Company....................................... 6,000 807,750
Olin Corporation....................................... 8,500 703,375
-----------
2,237,875
-----------
COMPUTERS & BUSINESS EQUIPMENT - (7.0%)
Compaq Computer Corporation*........................... 10,000 506,250
Dell Computer Corporation*............................. 15,000 515,625
Hewlett Packard Company................................ 7,500 755,625
Sun Microsystems Incorporated*......................... 15,000 787,500
-----------
2,565,000
-----------
CONGLOMERATES - (1.4%)
ITT Corporation*....................................... 5,800 350,175
ITT Industries Incorporated............................ 5,800 152,250
-----------
502,425
-----------
</TABLE>
See notes to financial statements.
6
<PAGE>
MAGNA GROWTH & INCOME FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
-------------------- ---------- -----------
<S> <C> <C>
COMMON STOCKS - (CONTINUED)
CONSTRUCTION & MINING EQUIPMENT - (1.6%)
Caterpillar Incorporated............................... 8,800 $ 588,500
-----------
DOMESTIC OIL - (3.8%)
Atlantic Richfield Company............................. 5,000 547,500
Mobil Corporation...................................... 7,600 833,150
-----------
1,380,650
-----------
DRUGS & HEALTH CARE - (9.1%)
American Home Products Corporation..................... 5,000 492,500
Amgen Incorporated*.................................... 4,000 239,000
Bristol Myers Squibb Company........................... 7,000 595,875
Johnson & Johnson...................................... 4,000 374,000
Medtronic Incorporated................................. 10,000 573,750
Merck & Company, Incorporated.......................... 8,100 536,625
US Healthcare Incorporated............................. 10,150 494,813
-----------
3,306,563
-----------
ELECTRIC UTILITIES - (2.3%)
Entergy Corporation.................................... 15,000 425,625
P P & L Resources Incorporated......................... 17,000 422,875
-----------
848,500
-----------
ELECTRICAL EQUIPMENT - (2.6%)
Emerson Electric Company............................... 2,000 155,750
General Electric Company............................... 10,300 777,650
-----------
933,400
-----------
ELECTRONICS - (4.1%)
Intel Corporation...................................... 12,800 752,800
Motorola Incorporated.................................. 9,000 488,250
Texas Instruments Incorporated......................... 5,400 269,325
-----------
1,510,375
-----------
ENTERTAINMENT - (0.9%)
Walt Disney Company.................................... 5,000 327,500
-----------
ENVIRONMENTAL CONTROL - (0.6%)
WMX Technologies Incorporated.......................... 8,000 228,000
-----------
</TABLE>
See notes to financial statements.
7
<PAGE>
MAGNA GROWTH & INCOME FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
-------------------- ---------- -----------
<S> <C> <C>
COMMON STOCKS - (CONTINUED)
FOOD & BEVERAGES - (3.9%)
Coca Cola Company...................................... 8,000 $ 646,000
Heinz (H.J.) Company................................... 5,000 170,000
Pepsico Incorporated................................... 5,300 335,225
Sara Lee Corporation................................... 9,000 291,375
-----------
1,442,600
-----------
HOTELS & RESTAURANTS - (2.0%)
McDonald's Corporation................................. 14,700 735,000
-----------
HOUSEHOLD PRODUCTS - (2.0%)
Procter & Gamble Company............................... 9,000 738,000
-----------
INSURANCE - (2.0%)
Allstate Corporation................................... 10,000 428,750
ITT Hartford Group, Incorporated....................... 5,800 298,700
-----------
727,450
-----------
INTERNATIONAL OIL - (2.8%)
Amoco Corporation...................................... 2,200 152,900
Exxon Corporation...................................... 2,000 159,000
Texaco Incorporated.................................... 8,900 709,775
-----------
1,021,675
-----------
LIQUOR - (0.9%)
Anheuser Busch Companies, Incorporated................. 5,000 336,875
-----------
PAPER - (3.0%)
International Paper Company............................ 10,600 377,625
Kimberly Clark Corporation............................. 5,100 389,513
Mead Corporation....................................... 6,600 330,000
-----------
1,097,138
-----------
RAILROADS & EQUIPMENT - (1.7%)
Burlington Northern Incorporated....................... 4,600 368,000
CSX Corporation........................................ 6,000 269,250
-----------
637,250
-----------
SOFTWARE - (3.3%)
Microsoft Corporation*................................. 7,100 700,681
Oracle Systems Corporation*............................ 10,000 520,000
-----------
1,220,681
-----------
</TABLE>
See notes to financial statements.
8
<PAGE>
MAGNA GROWTH & INCOME FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
-------------------- ---------- -----------
<S> <C> <C>
COMMON STOCKS - (CONTINUED)
TELEPHONE - (3.9%)
AT & T Corporation.................................... 7,000 $ 445,375
GTE Corporation....................................... 13,500 578,813
SBC Communications, Incorporated...................... 7,100 389,612
-----------
1,413,800
-----------
TOBACCO - (2.1%)
Philip Morris Companies, Incorporated................. 7,800 772,200
-----------
UTILITIES - (5.3%)
Central & South West Corporation...................... 20,000 555,000
General Public Utilities Corporation.................. 20,000 667,500
Public Service Company Colorado....................... 20,000 705,000
-----------
1,927,500
-----------
TOTAL COMMON STOCKS - (Cost $24,245,720)................ 30,971,750
-----------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- -----------
<S> <C> <C>
GOVERNMENT AND AGENCY BONDS - (1.8%)
FEDERAL AGENCIES - (1.8%)
Federal National Mortgage Association 8.050%,
07/14/2004 $ 650,000 663,243
-----------
TOTAL GOVERNMENT AND AGENCY BONDS - (Cost $647,945)..... 663,243
-----------
SHORT TERM INVESTMENTS - (12.2%)
U.S. GOVERNMENT SECURITIES - (8.2%)
United States Treasury Bills
4.7789%, 05/23/1996 500,000 494,305
-----------
United States Treasury Notes
6.875%, 10/31/1996................................... 500,000 505,235
6.500%, 11/30/1996................................... 500,000 504,455
6.125%, 12/31/1996................................... 500,000 503,515
6.000%, 06/30/1996................................... 500,000 501,250
6.250%, 08/31/1996................................... 500,000 502,500
-----------
2,516,955
-----------
</TABLE>
See notes to financial statements.
9
<PAGE>
MAGNA GROWTH & INCOME FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
REPURCHASE AGREEMENT - (4.0%) AMOUNT VALUE
---------- -----------
<S> <C> <C>
State Street Bank and Trust Company
4.00%, dated 02/29/96, $1,449,161, due 03/01/96,
collateralized by $1,510,000, U.S. Treasury Note,
5.75%, 08/15/03, with a value of $1,481,959......... $1,449,000 $ 1,449,000
-----------
TOTAL SHORT TERM INVESTMENTS - (Cost $4,459,782)........ 4,460,260
-----------
TOTAL INVESTMENTS - (Cost $29,353,447)--98.8%........... 36,095,253
CASH, RECEIVABLES AND OTHER ASSETS,
LESS LIABILITIES - 1.2%................................ 439,386
-----------
NET ASSETS - 100.0%..................................... $36,534,639
===========
</TABLE>
*Non-income producing security.
See notes to financial statements.
10
<PAGE>
MAGNA INTERMEDIATE GOVERNMENT BOND FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
-------------------- ---------- ----------
<S> <C> <C>
GOVERNMENT AND AGENCY BONDS - (72.8%)
FEDERAL AGENCIES - (61.7%)
Federal Farm Credit Bank
9.000%, 03/07/1997.................................... $ 350,000 $ 362,616
----------
Federal Home Loan Bank
5.500%, 03/02/2001.................................... 950,000 957,057
8.450%, 07/26/1999.................................... 150,000 161,827
7.250%, 07/29/1999.................................... 260,000 266,520
7.585%, 02/10/2000.................................... 1,000,000 1,056,778
8.000%, 05/16/2001.................................... 410,000 411,699
8.060%, 03/10/2005.................................... 500,000 525,043
8.350%, 04/12/2005.................................... 500,000 501,738
7.250%, 06/27/2005.................................... 1,000,000 992,718
7.151%, 09/13/2005.................................... 540,000 539,746
7.700%, 07/12/2010.................................... 1,000,000 989,180
8.000%, 08/23/2010.................................... 1,000,000 999,444
----------
7,401,750
----------
Federal Home Loan Mortgage Corporation
8.000%, 02/01/1999.................................... 140,612 144,346
7.680%, 05/23/2001.................................... 150,000 153,383
7.900%, 09/19/2001.................................... 280,000 304,025
6.800%, 09/18/2002.................................... 700,000 693,014
6.600%, 03/25/2003.................................... 700,000 690,264
5.780%, 10/22/2003.................................... 380,000 361,343
8.030%, 04/06/2005.................................... 1,475,000 1,515,868
7.490%, 05/25/2005.................................... 1,000,000 1,020,312
7.250%, 06/08/2005.................................... 500,000 505,235
6.550%, 11/28/2005.................................... 500,000 487,401
6.910%, 11/30/2005.................................... 500,000 493,407
7.500%, 01/01/2007.................................... 33,609 33,819
6.500%, 05/01/2008.................................... 138,527 137,444
7.000%, 09/15/2023.................................... 925,764 901,869
6.500%, 02/15/2024.................................... 215,417 212,682
----------
$7,654,412
----------
</TABLE>
See notes to financial statements.
11
<PAGE>
MAGNA INTERMEDIATE GOVERNMENT BOND FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
-------------------- ---------- ----------
<S> <C> <C>
GOVERNMENT AND AGENCY BONDS - (CONTINUED)
FEDERAL AGENCIES - (CONTINUED)
Federal National Mortgage Association
5.380%, 10/23/1998..................................... $ 840,000 $ 834,909
8.000%, 07/10/1996..................................... 190,000 191,721
8.950%, 07/10/1997..................................... 230,000 239,735
8.800%, 07/25/1997..................................... 190,000 198,228
5.550%, 10/05/1998..................................... 650,000 647,399
7.500%, 03/10/1999..................................... 460,000 460,226
7.000%, 07/01/1999..................................... 893,528 906,373
8.550%, 08/30/1999..................................... 360,000 389,647
8.000%, 03/15/2000..................................... 500,000 501,110
8.600%, 12/12/2001..................................... 500,000 513,204
7.900%, 04/10/2002..................................... 700,000 715,135
7.800%, 06/10/2002..................................... 550,000 561,792
7.000%, 08/12/2002..................................... 280,000 280,293
6.950%, 09/10/2002..................................... 700,000 700,511
7.300%, 10/28/2002..................................... 280,000 285,042
6.400%, 03/25/2003..................................... 1,140,000 1,120,051
7.600%, 04/14/2004..................................... 190,000 191,442
7.850%, 09/10/2004..................................... 500,000 521,640
8.330%, 02/08/2005..................................... 1,000,000 1,074,850
7.650%, 03/10/2005..................................... 500,000 539,693
8.200%, 05/02/2005..................................... 500,000 502,461
8.100%, 05/11/2010..................................... 1,000,000 1,035,743
8.000%, 08/02/2010..................................... 500,000 502,063
9.050%, 05/10/2021..................................... 500,000 539,807
----------
13,453,075
----------
Federal National Mortgage Association Medium Term Note
8.420%, 10/27/2004..................................... 1,000,000 1,047,235
7.130%, 07/06/2005..................................... 1,000,000 996,875
----------
2,044,110
----------
Federal National Mortgage Association REMIC
6.750%, 08/25/2021..................................... 920,000 898,701
7.050%, 04/25/2022..................................... 925,000 918,284
----------
$1,816,985
----------
</TABLE>
See notes to financial statements.
12
<PAGE>
MAGNA INTERMEDIATE GOVERNMENT BOND FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
-------------------- ---------- -----------
<S> <C> <C>
U.S. GOVERNMENT SECURITIES - (10.7%)
FEDERAL AGENCIES - (CONTINUED)
Student Loan Marketing Association
7.000%, 06/21/2000................................... $ 500,000 $ 503,046
5.125%, 03/02/1999 (a)............................... 1,000,000 1,000,000
-----------
1,503,046
-----------
34,235,994
-----------
United States Treasury Note
4.250%, 05/15/1996................................... 500,000 499,140
8.000%, 01/15/1997................................... 275,000 281,273
6.500%, 05/15/1997................................... 500,000 506,560
5.125%, 02/28/1998................................... 460,000 457,341
5.125%, 04/30/1998................................... 920,000 914,103
9.250%, 08/15/1998................................... 135,000 146,433
7.125%, 10/15/1998................................... 1,000,000 1,038,120
5.875%, 03/31/1999................................... 380,000 382,911
7.000%, 04/15/1999................................... 1,000,000 1,039,060
6.000%, 10/15/1999................................... 690,000 697,328
-----------
5,962,269
-----------
HOUSING AND URBAN DEVELOPMENT BONDS - (0.4%)
Allentown Pennsylvania U.S. Government Guaranteed Note
8.400%, 08/01/1997................................... 15,000 15,501
Des Moines Iowa U.S. Government Guaranteed Note
8.400%, 08/07/1997................................... 30,000 31,002
New Haven Connecticut U.S. Government Guaranteed Note
8.400%, 08/01/1997................................... 30,000 31,002
Sacramento California Housing & Redevelopment 8.400%,
08/01/1997........................................... 50,000 51,671
Syracuse New York Industrial Development Agency USG
8.400%, 08/01/1997................................... 115,000 118,306
-----------
247,482
-----------
TOTAL GOVERNMENT AND AGENCY BONDS - (Cost $39,563,554).. $40,445,745
-----------
</TABLE>
See notes to financial statements.
13
<PAGE>
MAGNA INTERMEDIATE GOVERNMENT BOND FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
-------------------- --------- ----------
<S> <C> <C>
CORPORATE BONDS - (24.5%)
FINANCE & BANKING - (6.8%)
Ford Capital BV
9.375%, 05/15/2001..................................... $380,000 $ 430,589
General Electric Capital Corporation
8.750%, 11/26/1996..................................... 190,000 194,342
7.730%, 02/13/2002..................................... 400,000 428,660
----------
623,002
----------
Merrill Lynch & Company, Incorporated
8.000%, 02/01/2002..................................... 325,000 349,304
8.300%, 11/01/2002..................................... 460,000 502,755
8.230%, 04/30/2002..................................... 500,000 513,060
----------
1,365,119
----------
Morgan Stanley Group Incorporated
8.100%, 06/24/2002..................................... 460,000 497,931
Texaco Capital Incorporated
9.000%, 12/15/1999..................................... 340,000 373,697
U.S. Life Corporation
9.150%, 06/15/1999..................................... 190,000 191,636
United Postal Savings Association
9.000%, 07/26/1999..................................... 250,000 272,662
----------
3,754,636
----------
INDUSTRIALS - (12.7%)
Anheuser Busch Companies, Incorporated
8.750%, 12/01/1999..................................... 225,000 245,685
duPont (EI) deNemours & Company
8.450%, 10/15/1996..................................... 430,000 437,906
8.125%, 03/15/2004..................................... 265,000 292,086
----------
729,992
----------
Ford Motor Company
9.000%, 09/15/2001..................................... 280,000 313,515
9.500%, 09/15/2011..................................... 230,000 280,750
----------
594,265
----------
Kimberly Clark Corporation
8.625%, 05/01/2001..................................... 280,000 310,523
</TABLE>
See notes to financial statements.
14
<PAGE>
MAGNA INTERMEDIATE GOVERNMENT BOND FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
-------------------- --------- ----------
<S> <C> <C>
CORPORATE BONDS - (CONTINUED)
INDUSTRIALS - (CONTINUED)
Lilly (Eli) & Company
8.125%, 12/01/2001..................................... $500,000 $ 545,138
Loews Corporation
8.500%, 04/15/1998..................................... 175,000 183,787
Monsanto Company
8.800%, 07/15/1997..................................... 150,000 156,223
8.750%, 05/15/2001..................................... 200,000 221,375
----------
377,598
----------
Pepsico Incorporated
7.625%, 11/01/1998..................................... 280,000 292,120
Philip Morris Companies Incorporated
8.750%, 06/01/2001..................................... 250,000 275,899
7.500%, 01/15/2002..................................... 360,000 375,888
7.500%, 03/15/1997..................................... 500,000 509,383
7.250%, 01/15/2003..................................... 700,000 722,322
----------
1,883,492
----------
Donnelley (RR) & Sons Company
7.000%, 01/01/2003..................................... 700,000 724,028
Rockwell International Corporation
8.375%, 02/15/2001..................................... 280,000 307,116
Shell Canada Limited
7.375%, 06/01/1999..................................... 265,000 275,310
Wal-Mart Stores Incorporated
8.625%, 04/01/2001..................................... 430,000 475,329
Weyerhaeuser Company
8.940%, 04/09/2001..................................... 100,000 111,162
----------
7,055,545
----------
TRANSPORTATION - (1.0%)
Norfolk Southern Railway Company
7.750%, 08/15/2005..................................... 225,000 244,193
Union Pacific Railroad Company
9.500%, 02/15/1999..................................... 305,000 305,000
----------
549,193
----------
</TABLE>
See notes to financial statements.
15
<PAGE>
MAGNA INTERMEDIATE GOVERNMENT BOND FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
-------------------- ---------- -----------
<S> <C> <C>
CORPORATE BONDS - (CONTINUED)
INDUSTRIALS - (CONTINUED)
UTILITIES - (4.0%)
AT & T Corporation
7.125%, 01/15/2002.................................. $ 960,000 $ 997,985
General Telephone California
6.750%, 12/01/1997.................................. 750,000 753,756
Northern Telecom Limited
8.750%, 06/12/2001.................................. 430,000 478,176
-----------
2,229,917
-----------
TOTAL CORPORATE BONDS - (Cost $12,971,828)............. 13,589,291
-----------
SHORT TERM INVESTMENTS - (3.8%)
REPURCHASE AGREEMENT - (3.8%)
State Street Bank and Trust Company
4.00%, dated 02/29/96, $2,093,233, due 03/01/96,
collateralized by $2,180,000, U.S. Treasury Note,
5.75%, 08/15/03, with a value of $2,139,517........ 2,093,000 2,093,000
-----------
TOTAL SHORT TERM INVESTMENTS - (Cost $2,093,000)....... 2,093,000
-----------
TOTAL INVESTMENTS - (Cost $54,628,382)--101.0%......... 56,128,036
CASH, RECEIVABLES AND OTHER ASSETS,
LESS LIABILITIES - (1.0)%............................. (565,934)
-----------
NET ASSETS - 100.0%.................................... $55,562,102
===========
</TABLE>
(a) Interest rate resets annually.
See notes to financial statements.
16
<PAGE>
MAGNA FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
GROWTH & INTERMEDIATE
INCOME GOVERNMENT
FUND BOND FUND
----------- ------------
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $27,904,447, $52,535,382, respectively)....... $34,646,253 $54,035,036
Repurchase agreements, at value and cost............. 1,449,000 2,093,000
Cash................................................. 215 1,457
Receivable for securities sold....................... 467,300 0
Receivable for fund shares sold...................... 25,000 72,012
Dividends receivable................................. 88,507 0
Interest receivable.................................. 36,984 1,045,497
Deferred organizational expenses..................... 36,941 72,141
Prepaid insurance expense............................ 5,043 7,603
----------- -----------
TOTAL ASSETS........................................ 36,755,243 57,326,746
----------- -----------
LIABILITIES:
Payable for securities purchased..................... 142,300 1,442,593
Payable for fund shares redeemed..................... 5,791 0
Investment advisory fee payable (Note 3)............. 14,467 17,562
Distributions payable................................ 0 217,012
Administrative fee payable (Note 3).................. 5,497 8,055
Trustees fees........................................ 9,537 9,537
Other accrued expenses and liabilities............... 43,012 69,885
----------- -----------
TOTAL LIABILITIES................................... 220,604 1,764,644
----------- -----------
NET ASSETS............................................ $36,534,639 $55,562,102
=========== ===========
NET ASSETS CONSIST OF:
Paid-in capital...................................... 29,185,934 54,343,337
Undistributed net investment income.................. 120,509 1,282
Accumulated realized gain (loss) on investments -
net................................................ 486,390 (282,171)
Unrealized appreciation on investments - net......... 6,741,806 1,499,654
----------- -----------
NET ASSETS............................................ $36,534,639 $55,562,102
=========== ===========
Shares of beneficial interest outstanding, no par val-
ue................................................... 2,298,863 4,349,516
Net asset value and redemption price per share........ $ 15.89 $ 12.77
Maximum offering price per share ($15.89/0.96 and
$12.77/0.96).......................................... $ 16.55 $ 13.30
</TABLE>
See notes to financial statements.
17
<PAGE>
MAGNA FUNDS
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
GROWTH & INTERMEDIATE
INCOME GOVERNMENT
FUND BOND FUND
---------- ------------
<S> <C> <C>
INVESTMENT INCOME:
Interest............................................. $ 124,971 $1,861,098
Dividends............................................ 351,513 0
---------- ----------
TOTAL INCOME........................................ 476,484 1,861,098
---------- ----------
EXPENSES:
Investment advisory fees (Note 3).................... 125,546 133,776
12b-1 fees (Note 3).................................. 41,849 66,888
Administration fees (Note 3)......................... 31,805 50,835
Transfer agent fees.................................. 21,481 21,482
Professional fees.................................... 16,668 25,598
Custodian fees....................................... 29,537 34,609
Amortization of deferred organizational expenses..... 5,243 10,241
Trustees fees........................................ 10,443 10,443
Other expenses....................................... 10,376 16,375
---------- ----------
Total expenses before reimbursements and waivers.... 292,948 370,247
Reimbursement and waivers of expenses................ (83,697) (93,644)
---------- ----------
TOTAL EXPENSES, net of reimbursements and waivers... 209,251 276,603
---------- ----------
NET INVESTMENT INCOME................................. 267,233 1,584,495
---------- ----------
REALIZED AND UNREALIZED GAIN ON
INVESTMENT TRANSACTIONS:
Realized gain on investments - net................... 654,571 50,251
Net change in unrealized appreciation on investments. 3,436,847 1,257
---------- ----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENT
TRANSACTIONS........................................ 4,091,418 51,508
---------- ----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS...................................... $4,358,651 $1,636,003
========== ==========
</TABLE>
See notes to financial statements.
18
<PAGE>
MAGNA FUNDS
MAGNA GROWTH & INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 1, 1994*
SIX MONTHS ENDED THROUGH
FEBRUARY 29, 1996 AUGUST 31, 1995
----------------- ------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
FROM OPERATIONS:
Net investment income.................... $ 267,233 $ 502,451
Net realized gain (loss) on investments.. 654,571 (107,744)
Net change in unrealized appreciation on
investments............................. 3,436,847 3,304,959
----------- -----------
Net increase in net assets resulting from
operations.............................. 4,358,651 3,699,666
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income.................... (218,006) (431,169)
Net realized gains....................... (60,437) 0
----------- -----------
Net decrease in net assets resulting from
distributions to shareholders........... (278,443) (431,169)
----------- -----------
FROM FUND SHARE TRANSACTIONS:
Proceeds from shares sold................ 3,084,205 28,810,769
Shares issued in reinvestment of distri-
butions................................. 136,282 152,082
Payments for shares redeemed............. (1,049,798) (1,997,606)
----------- -----------
Net increase in net assets from fund
share transactions...................... 2,170,689 26,965,245
----------- -----------
NET INCREASE IN NET ASSETS................ 6,250,897 30,233,742
----------- -----------
NET ASSETS:
Beginning of period...................... 30,283,742 50,000
----------- -----------
End of period (1)........................ $36,534,639 $30,283,742
=========== ===========
(1) INCLUDES UNDISTRIBUTED NET INVESTMENT
INCOME................................... $ 120,509 $ 71,282
=========== ===========
</TABLE>
* Commencement of operations.
See notes to financial statements.
19
<PAGE>
MAGNA FUNDS
MAGNA INTERMEDIATE GOVERNMENT BOND FUND
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 1, 1994*
SIX MONTHS ENDED THROUGH
FEBRUARY 29, 1996 AUGUST 31, 1995
----------------- ------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
FROM OPERATIONS:
Net investment income.................... $ 1,584,495 $ 2,833,258
Net realized gain (loss) on investments.. 50,251 (332,422)
Net change in unrealized appreciation on
investments............................. 1,257 1,498,397
----------- -----------
Net increase in net assets resulting from
operations.............................. 1,636,003 3,999,233
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income.................... (1,583,379) (2,833,092)
FROM FUND SHARE TRANSACTIONS:
Proceeds from shares sold................ 5,559,255 57,932,811
Shares issued in reinvestment of distri-
butions................................. 310,412 593,361
Payments for shares redeemed............. (2,445,663) (7,656,839)
----------- -----------
Net increase in net assets from fund
share transactions...................... 3,424,004 50,869,333
----------- -----------
NET INCREASE IN NET ASSETS................ 3,476,628 52,035,474
----------- -----------
NET ASSETS:
Beginning of period...................... 52,085,474 50,000
----------- -----------
End of period (1)........................ $55,562,102 $52,085,474
=========== ===========
(1) INCLUDES UNDISTRIBUTED NET INVESTMENT
INCOME................................... $ 1,282 $ 166
=========== ===========
</TABLE>
* Commencement of operations.
See notes to financial statements.
20
<PAGE>
See notes to financial statements.
MAGNA FUNDS
GROWTH & INCOME FUND
FINANCIAL HIGHLIGHTS (UNAUDITED)
Selected data for a share of stock outstanding throughout each period
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS SEPTEMBER 1, 1994*
ENDED THROUGH
FEBRUARY 29, 1996 AUGUST 31, 1995
----------------- ------------------
<S> <C> <C>
Net asset value, beginning of period...... $ 14.05 $ 12.50
------- -------
Net investment income..................... 0.12 0.25
Net realized and unrealized gain on in-
vestments................................ 1.85 1.52
------- -------
Total from investment operations.......... 1.97 1.77
------- -------
Less distributions:
Dividends from net investment income...... (0.10) (0.22)
Dividends from net realized gains......... (0.03) 0.00
------- -------
Total dividends and distributions......... (0.13) (0.22)
------- -------
Net asset value, end of period............ $ 15.89 $ 14.05
======= =======
Total investment return (1)............... 14.04% 14.33%
======= =======
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period ($000's)........ $36,535 $30,284
Ratio of expenses to average net assets... 1.25% 1.25%
Ratio of net investment income to average
net assets............................... 1.60% 1.98%
Portfolio turnover rate................... 21% 41%
Average commission rate (2)............... $0.0600
</TABLE>
- -------------------------------------------------------------------------------
Net investment income per share and the annualized ratios of expenses and net
investment income to average net assets before reimbursements and waivers of
fees by the advisor, distributor and administrator were $0.14, 1.73% and
1.50%, for the period September 1, 1994* through August 1, 1995 and $0.08,
1.75% and 1.10% for the six months ended February 29, 1996.
* Commencement of operations.
(1) Total return excludes sales charges. Total returns for periods less than
one year are not annualized.
(2) The average commission rate paid is applicable for Funds that invest
greater than 10% of average net assets in equity security transactions on
which commissions are charged. This disclosure is required for fiscal
periods beginning on or after September 1, 1995.
21
<PAGE>
MAGNA FUNDS
INTERMEDIATE GOVERNMENT BOND FUND
FINANCIAL HIGHLIGHTS (UNAUDITED)
Selected data for a share of stock outstanding throughout each period
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS SEPTEMBER 1, 1994*
ENDED THROUGH
FEBRUARY 29, 1996 AUGUST 31, 1995
----------------- ------------------
<S> <C> <C>
Net asset value, beginning of period...... $ 12.75 $ 12.50
------- -------
Net investment income..................... 0.38 0.74
Net realized and unrealized gain on in-
vestments................................ 0.02 0.25
------- -------
Total from investment operations.......... 0.40 0.99
------- -------
Less distributions:
Dividends from net investment income...... (0.38) (0.74)
------- -------
Total dividends and distributions......... (0.38) (0.74)
------- -------
Net asset value, end of period............ $ 12.77 $ 12.75
======= =======
Total investment return (1)............... 3.14% 8.30%
======= =======
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period ($000's)........ $55,562 $52,085
Ratio of expenses to average net assets... 1.03% 1.10%
Ratio of net investment income to average
net assets............................... 5.92% 6.00%
Portfolio turnover rate................... 10% 34%
</TABLE>
- -------------------------------------------------------------------------------
Net investment income per share and the annualized ratios of expenses and net
investment income to average net assets before reimbursements and waivers of
fees by the advisor, distributor and administrator were $0.70, 1.43% and
5.66%, for the period September 1, 1994* through August 1, 1995 and $0.42,
1.38% and 5.57% for the six months ended February 29, 1996.
* Commencement of operations.
(1)Total return excludes sales charges. Total returns for periods less than
one year are not annualized.
See notes to financial statements.
22
<PAGE>
MAGNA FUNDS
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND FUND DESCRIPTION
Magna Funds (the "Trust") is an open-end, diversified management investment
company registered under the Investment Company Act of 1940 (the "Act"), as
amended. The Trust was organized as a Massachusetts business trust on April
28, 1994, and is authorized to issue an unlimited number of shares of
beneficial interest in multiple series. Two series commenced investment
operations on September 1, 1994: the Magna Growth & Income Fund and the Magna
Intermediate Government Bond Fund (the "Funds").
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Trust.
Investment Valuation: Equity securities listed on an established securities
exchange or on the NASDAQ National Market System are valued at their last sale
price on the exchange where primarily traded or, if there is no reported sale
during the day, and in the case of over-the-counter securities not so listed,
at the last bid price. Long-term debt securities are valued by a pricing
service, which determines valuations of normal institutional-size trading
units of long-term debt securities. Short-term debt securities having a
maturity of 60 days or less from the valuation date are valued at amortized
cost which approximates market value. Other securities for which current
market quotations are not readily available (including restricted securities,
if any) and all other assets are taken at fair value as determined in good
faith under procedures determined by the Trustees. At February 29, 1996, there
were no board valued securities.
Investment Transactions: All securities transactions are recorded on a trade
date basis. Dividend income is recorded on the ex-dividend date and interest
income is recorded on the accrual basis. Realized gains and losses on sales of
securities are determined on the basis of identified cost.
Repurchase Agreements: A repurchase agreement customarily obligates the seller
at the time it sells securities to the Funds to repurchase the securities at a
mutually agreed upon time and price which, in the case of the Funds'
transactions, is usually within seven days. The total amount received by the
Funds on repurchase would be calculated to exceed the price paid by the Funds,
reflecting an agreed upon market rate of interest for the period of time to
the settlement date, and would not necessarily be related to the interest rate
on the underlying securities. The underlying securities are ordinarily United
States government securities. Repurchase agreements will be fully
collateralized at all times. However, to the extent that the proceeds from any
sale upon default in the obligation to repurchase is less than the repurchase
price, the Funds would suffer a loss. Also, the Funds might incur costs and
encounter delays in liquidating collateral.
Deferred Organizational Expenses: Deferred organizational expenses are being
amortized over a period of sixty months.
Dividends and Distributions to Shareholders: The Magna Intermediate Government
Bond Fund declares dividends from net investment income daily and makes
payments monthly. The Magna Growth & Income Fund declares and pays dividends
from net investment income quarterly. Each Fund also distributes all of its
net capital gains, if any, on an annual basis, normally in December.
Distributions are recorded on the ex-dividend date. Income distributions and
capital gain distributions are determined in accordance with income tax
regulations
23
<PAGE>
which may differ from generally accepted accounting principles. These
differences are primarily due to differing treatments for losses deferred due
to wash sales, "post October 31 losses", and excise tax regulations.
Federal Income Taxes: Each Fund of the Trust is treated as a separate entity
for federal tax purposes. Each Fund intends to qualify each year as a
regulated investment company under Subchapter M of the Internal Revenue Code
of 1986. By so qualifying, the Funds will not be subject to federal income tax
to the extent that they distribute all of their taxable income, including
realized capital gains, for the fiscal year. In addition, by distributing
substantially all of their net investment income and capital gains during the
calendar year, the Funds will not be subject to a federal excise tax. As of
August 31, 1995, the Magna Growth and Income Fund and the Magna Intermediate
Government Bond Fund had capital loss carryovers of $10,566 and $69,717,
respectively, which will expire on August 31, 2003. As of August 31, 1995, the
Magna Growth and Income Fund and the Magna Intermediate Government Bond Fund
have elected for Federal income tax purposes to defer to their fiscal year
ending August 31, 1996, losses of $88,547 and $262,705, respectively,
recognized during the period November 1, 1994 to August 31, 1995.
Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles may require management to make
certain estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of these financial statements and the reported
amounts of income and expenses during the reported period. Actual results
could differ from those estimates.
3. AGREEMENTS AND FEES
The Trust has entered into an Investment Advisory Agreement with Magna Bank,
N.A. ("Magna"). Under this agreement, each Fund pays a fee, calculated daily
and paid monthly, based on the respective average daily net assets of each
Fund. This fee is 0.75% for the Magna Growth & Income Fund, and 0.50% for the
Magna Intermediate Government Bond Fund. Magna voluntarily agreed to reduce
its fees with respect to the Magna Growth & Income Fund to 0.60% of average
daily net assets for the twelve months ended August 31, 1995. Effective
September 1, 1995, Magna has voluntarily agreed to reduce its fees with
respect to the Magna Growth & Income Fund to 0.50% and with respect to the
Magna Intermediate Government Bond Fund to 0.40% of average daily net assets
through August 31, 1996. For the six months ended February 29, 1996, Magna
waived investment advisory fees of $41,848 and $26,756, for the Magna Growth &
Income Fund and Magna Intermediate Government Bond Fund, respectively.
The Trust has entered into an Administration Services Agreement with Ernst
Asset Management Corporation ("EAMC") (the Trust's "Administrator"), a wholly
owned subsidiary of Ernst & Company ("Ernst") (the Trust's "Distributor").
Under this agreement, each Fund pays a fee, calculated daily and paid monthly,
at the rate of 0.19% of the first $125 million of each Fund's average daily
net assets, 0.17% of the next $125 million of such assets and 0.15% of such
assets in excess of $250 million.
The Trust has adopted a Service Plan (the "Plan") pursuant to Rule 12b-1 under
the Investment Company Act of 1940, as amended. The purpose of the plan is to
compensate the Distributor for expenses borne in connection with the provision
of personal services provided to investors and/or maintenance of shareholder
accounts, at an annual rate not to exceed 0.25% of each Fund's average daily
net assets. For the six months ended February 29, 1996, the Distributor waived
$108,737 of service fees.
Magna and EAMC agreed to waive their fees and reimburse each Fund to the
extent that total expenses exceed 1.25% and 1.10% of the average daily net
assets of the Magna Growth & Income Fund and the Magna
24
<PAGE>
Intermediate Government Bond Fund respectively, for the year ended August 31,
1995. For the year ended August 31, 1995, such waivers and reimbursements
amounted to $58,172 and $39,611, respectively.
Each of the Trust's Trustees who are not affiliated with Magna receive an
annual fee of $5,000 plus $500 for each meeting attended.
4. INVESTMENT TRANSACTIONS
Purchases and proceeds from sales and maturities of investments, excluding
short-term securities for each Fund for the six months ended February 29, 1996
were as follows:
<TABLE>
<CAPTION>
NON-U.S. U.S. NON-U.S. U.S.
GOVERNMENT GOVERNMENT GOVERNMENT GOVERNMENT
PURCHASES PURCHASES SALES SALES
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Growth & Income Fund................ $7,081,188 $ 0 $5,405,867 $ 250,000
Intermediate Government Bond Fund... 1,277,250 8,622,639 2,146,607 3,145,160
</TABLE>
The identified cost for federal income tax purposes of investments owned by
each Fund and their respective gross unrealized appreciation and depreciation
at February 29, 1996 were as follows:
<TABLE>
<CAPTION>
GROSS GROSS NET UNREALIZED
IDENTIFIED UNREALIZED UNREALIZED APPRECIATION
COST APPRECIATION (DEPRECIATION) (DEPRECIATION)
----------- ------------ -------------- --------------
<S> <C> <C> <C> <C>
Growth & Income Fund.... $29,353,447 $6,911,511 $(169,705) $6,741,806
Intermediate Government
Bond Fund.............. 54,628,382 1,586,059 (86,405) 1,499,654
</TABLE>
5. FUND SHARE TRANSACTIONS
Share activity for the Funds were as follows:
<TABLE>
<CAPTION>
MAGNA GROWTH & INCOME FUND
-----------------------------------
SIX MONTHS SEPTEMBER 1, 1994
ENDED THROUGH
FEBRUARY 29, 1996 AUGUST 31, 1995
----------------- -----------------
<S> <C> <C>
Shares sold........................... 202,510 2,300,540
Shares issued in reinvestment......... 9,017 12,075
Shares redeemed....................... (68,412) (160,867)
------- ---------
Net increase.......................... 143,115 2,151,748
======= =========
</TABLE>
<TABLE>
<CAPTION>
MAGNA INTERMEDIATE GOVERNMENT BOND FUND
----------------------------------------------
SIX MONTHS SEPTEMBER 1, 1994
ENDED THROUGH
FEBRUARY 29, 1996 AUGUST 31, 1995
------------------- --------------------
<S> <C> <C>
Shares sold............. 431,130 4,653,599
Shares issued in rein-
vestment............... 24,097 47,950
Shares redeemed......... (189,776) (621,484)
------------------- --------------------
Net increase............ 265,451 4,080,065
=================== ====================
</TABLE>
25
<PAGE>
6. OTHER INFORMATION
At a Special Meeting of Shareholders held on December 14, 1995, for the purpose
of electing Trustees, the following Trustees were elected: Randall E. Ganim,
Robert R. Archibald, Ph.D., Wayne M. Lerner, Robert E. Saur, Earl E. Lazerson,
and Harry R. Maier. The voting results were as follows:
<TABLE>
<CAPTION>
MAGNA GROWTH & INCOME FUND
-----------------------------
NUMBER OF NUMBER OF
SHARES SHARES
FOR WITHHELD
--------------- -------------
<S> <C> <C>
Randall E. Ganim........................... 1,639,847 6,378
Robert R. Archibald, Ph.D.................. 1,642,689 3,536
Wayne M. Lerner............................ 1,646,066 158
Robert E. Saur............................. 1,645,908 317
Earl E. Lazerson........................... 1,642,117 4,108
Harry R. Maier............................. 1,639,847 6,378
</TABLE>
<TABLE>
<CAPTION>
MAGNA INTERMEDIATE GOVERNMENT BOND FUND
---------------------------------------
NUMBER OF NUMBER OF
SHARES SHARES
FOR WITHHELD
--------------------- -------------------
<S> <C> <C>
Randall E. Ganim........................... 2,745,598 2,033
Robert R. Archibald, Ph.D.................. 2,737,959 9,672
Wayne M. Lerner............................ 2,745,598 2,033
Robert E. Saur............................. 2,735,844 11,787
Earl E. Lazerson........................... 2,733,354 14,277
Harry R. Maier............................. 2,740,993 6,638
</TABLE>
26
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
INVESTMENT ADVISOR
Magna Bank, N.A.
1401 South Brentwood Boulevard
St. Louis, Missouri 63144
ADMINISTRATOR
Ernst Asset Management Corporation
60 State Street
Suite 700
Boston, MA 02109
SUB-ADMINISTRATOR, TRANSFER AND
DIVIDEND PAYING AGENT AND CUSTODIAN OF ASSETS
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
SHAREHOLDER SERVICING AGENT FOR
STATE STREET BANK AND TRUST COMPANY
Boston Financial Data Services, Inc.
P.O. Box 8500
Boston, Massachusetts 02266
DISTRIBUTOR
Ernst & Company
One Battery Park Plaza
New York, New York 10004-1478
LEGAL COUNSEL
Ropes & Gray
One International Place
Boston, Massachusetts 02110
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L. L. P.
One Post Office Square
Boston, Massachusetts 02109
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
MAGNA FUNDS
A FAMILY OF FUNDS
SEMI-ANNUAL REPORT
FEBRUARY 29, 1996
(UNAUDITED)
60 STATE STREET
SUITE 700
BOSTON, MA 02109
(617) 267-2525
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
