<PAGE>
MAGNA FUNDS
LETTER TO SHAREHOLDERS
We are pleased to send you the Semi-Annual Report for the period ended
February 28, 1997 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 as we approach our third full year
of operation. Total net assets reached over $112,000,000 from continued inflow
of funds from existing and new shareholders and from the stock market
advances.
The stock market continued to advance through the first six months of our
fiscal year. However, the bond market has become weaker as interest rates have
risen. This reflects concerns regarding the rate of economic growth and
potential for an increase in the rate of inflation. Rising interest rates have
contributed to the growing expectation for a stock market correction. It is
difficult to predict what lies ahead for either market through the balance of
this fiscal year.
Considering market conditions, we continue to believe that the prudent
investor should take a long-term view of financial markets. The investor who
tries to "time the market" runs 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 14, 1997
<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 21.7% and 26.7%
PERFORMED OVER THE PAST exclusive of sales load for the six months and one
SIX MONTH AND ONE YEAR year ended February 28, 1997, respectively. This
PERIODS? compares with the S&P 500 Index returns of 22.5%
and 26.1%, respectively. The average growth and
income fund tracked by Lipper Analytical returned
18.6% and 21.8% for the same six month and one year
periods.
WHAT IS THE COMPOSITION The fund is currently invested in 64 companies
OF THE PORTFOLIO AT THIS which represent 28 industries. We are broadly
TIME? diversified with the single largest equity holding
at 3.6% of the portfolio while the ten largest
positions represent 24% of the portfolio as of
February 28, 1997.
WHAT COMMENTS DO YOU The market rebounded sharply from the July 1996
HAVE ON THE MARKET AND stumble and began building momentum going into the
FUND PERFORMANCE? November elections. Post election analysis--a
stalemate in Washington--was seen as good news by
the financial markets as the calendar year ended.
January saw a rebound in technology, financial and
drug stocks. Strong returns were posted by Intel,
Dell, Conseco, Chase Manhattan, Lilly and Bristol
Myers. During February the focus became the Federal
Reserve Chairman's comments about "irrational
exuberance" in the financial markets. Concern of an
interest rate increase needed to slow a robust
economy and stall inflationary pressure
overshadowed recent advances.
WHAT'S YOUR OUTLOOK FOR Rising interest rates, a strong dollar and
THE NEXT SIX MONTHS? difficult year to year comparisons all combine to
create a pensive mood within the market. On the
plus side, oil prices have fallen back below $20
per barrel after a rise above $25. Advances in
technology continue to post productivity gains and
the further opening of global markets will spur
long term growth. Long term investors should use
any further weakness as a buying opportunity. New
money should be dollar cost averaged over the
remaining year.
2
<PAGE>
MAGNA GROWTH & INCOME FUND
COMPARATIVE TOTAL RETURN
FOR THE PERIODS ENDED FEBRUARY 28, 1997
<TABLE>
<CAPTION>
SINCE INCEPTION*
SIX MONTHS ONE YEAR (ANNUALIZED)
---------- -------- ----------------
<S> <C> <C> <C>
Magna Growth & Income Fund:
Without sales charge..................... 21.7% 26.7% 22.3%
With 4% sales charge..................... 16.8 21.7 20.3
Lipper Growth & Income Fund Index.......... 18.6 21.8 20.7
S&P 500 Index.............................. 22.5 26.1 25.6
Consumer Price Index (CPI)................. 1.5 3.0 2.8
</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 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
changes in consumer prices, as determined by a monthly survey of U.S. Bureau
of Labor Statistics.
<TABLE>
<CAPTION>
LARGEST STOCK HOLDINGS PORTFOLIO
FEBRUARY 28, 1997 %
<S> <C>
Intel................... 3.6
Dell.................... 2.8
Microsoft............... 2.7
Procter & Gamble........ 2.6
Phillip Morris.......... 2.3
DuPont.................. 2.2
Hewlett Packard......... 2.2
General Electric........ 2.1
Texaco.................. 1.9
Coca Cola............... 1.9
</TABLE>
<TABLE>
<CAPTION>
SECTOR WEIGHTINGS PORTFOLIO
FEBRUARY 28, 1997 %
<S> <C>
Basic Industries........ 7.3
Capital Goods........... 5.6
Consumer................ 29.0
Energy.................. 8.2
Finance................. 12.9
General Basics.......... 2.4
Services................ 3.2
Technology.............. 22.2
Transportation.......... 0.8
Utilities............... 8.4
</TABLE>
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 4.1%, exclusive
PERFORMED OVER THE PAST of sales loads, for the six month period ended
SIX MONTH AND ONE YEAR February 28, 1997. In the past twelve months the
PERIODS? fund returned 4.5%. This compares to a return of
4.5% in the past six months for the Lipper
Intermediate Government Bond Fund Index and a 12-
month return of 4.2% for the Index.
THE FUND PERFORMED WELL During the past twelve months interest rates
COMPARED increased across the board. The one year treasury
TO THE LIPPER INDEX, BUT rate rose about 1/2 of 1 percent while the 2 to 5
WHY WAS THE FUND'S year range treasury rate rose almost 3/4 of 1
PERFORMANCE OF 4.5% FOR percent. This rise in rates had a negative impact
THE PAST YEAR BELOW THE on bond values for the year ended February 28,
RETURN OF 10% FROM THE 1997. During the previous year ended February 28,
PREVIOUS YEAR ENDED 1996, interest rates had declined, resulting in an
FEBRUARY 1996? increase in the value of bond investments.
BASED ON YOUR OUTLOOK We concluded that for the balance of our fiscal
FOR 1997, HOW HAVE YOU year any increases in interest rates are likely to
POSITIONED THE FUND FOR be modest despite concerns regarding the direction
THE FUTURE? of the economy. We are, therefore, continuing to
take advantage of attractive bond yields and have
slightly lengthened maturities. The quality of
bonds remains high. Over 70% of bonds held are
rated AAA by Moody's. No bonds below an A rating by
Moody's are held in the portfolio. This reconfirms
our commitment to quality.
4
<PAGE>
MAGNA INTERMEDIATE GOVERNMENT BOND FUND
COMPARATIVE TOTAL RETURN
FOR THE PERIODS ENDED FEBRUARY 28, 1997
<TABLE>
<CAPTION>
SIX MONTHS ONE YEAR SINCE INCEPTION*
---------- -------- ----------------
<S> <C> <C> <C>
Magna Intermediate Government Bond Fund:
Without sales charge..................... 4.1% 4.5% 6.4%
With 4% sales charge..................... (0.6) 0.3 4.7
Lipper Intermediate Government Bond Index. 4.5 4.2 6.8
Lehman Brothers Government/Corporate Bond
Index:
1-5 Years................................ 3.9 5.1 6.9
6-10 Years............................... 5.8 4.7 8.6
</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 the Indices. It is generally
not possible to invest in an index.
MAGNA INTERMEDIATE GOVERNMENT BOND FUND
QUALITY RATING OF ASSETS HELD
(excluding temporary investments)
FEBRUARY 28, 1997
Percent of Portfolio
AAA AA A Baa Ba B
----- ---- --- ----- ---- ----
73.0% 18.3% 8.7% 0.0% 0.0% 0.0%
5
<PAGE>
MAGNA GROWTH & INCOME FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
-------------------- ---------- -----------
<S> <C> <C>
COMMON STOCKS - (87.1%)
AEROSPACE - (1.5%)
Lockheed Martin Corporation........................... 8,400 $ 743,400
-----------
AGRICULTURAL MACHINERY - (0.4%)
Deere & Company....................................... 5,000 213,125
-----------
AIR TRAVEL - (0.6%)
Delta Air Lines Incorporated.......................... 4,000 322,000
-----------
ALUMINUM - (1.0%)
Aluminum Company of America........................... 7,000 498,750
-----------
APPAREL & TEXTILES - (1.4%)
Nike Incorporated..................................... 10,000 718,750
-----------
AUTOMOBILES - (2.0%)
Chrysler Corporation.................................. 16,000 542,000
Ford Motor Company.................................... 14,800 486,550
-----------
1,028,550
-----------
BANKS - (6.3%)
Banc One Corporation.................................. 12,000 529,500
Chase Manhattan Corporation New....................... 6,000 600,750
First Union Corporation............................... 10,000 877,500
Mellon Bank Corporation............................... 9,150 735,431
Norwest Corporation................................... 10,000 497,500
-----------
3,240,681
-----------
BUSINESS SERVICES - (1.0%)
SunGard Data Systems*................................. 10,000 507,500
-----------
CHEMICALS - (4.0%)
duPont (EI) de Nemours & Company...................... 10,500 1,126,125
Monsanto Company...................................... 25,000 909,375
-----------
2,035,500
-----------
COMPUTERS & BUSINESS EQUIPMENT - (9.4%)
Cisco Systems Incorporated............................ 10,000 556,250
Compaq Computer Corporation*.......................... 10,000 792,500
Dell Computer Corporation*............................ 20,000 1,422,500
Hewlett Packard Company............................... 20,000 1,120,000
Sun Microsystems Incorporated*........................ 30,000 926,250
-----------
4,817,500
-----------
</TABLE>
See notes to financial statements.
6
<PAGE>
MAGNA GROWTH & INCOME FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
-------------------- --------- -----------
<S> <C> <C>
COMMON STOCKS - (CONTINUED)
CONSTRUCTION & MINING EQUIPMENT - (0.9%)
Caterpillar Incorporated............................... 5,800 $ 454,575
-----------
DOMESTIC OIL - (1.2%)
Atlantic Richfield Company............................. 5,000 625,000
-----------
DRUGS & HEALTH CARE - (12.0%)
American Home Products Corporation..................... 10,000 640,000
Amgen Incorporated*.................................... 7,000 427,875
Bristol Myers Squibb Company........................... 7,000 913,500
Humana Incorporated.................................... 26,800 525,950
Johnson & Johnson...................................... 10,000 576,250
Lilly Eli & Company.................................... 8,000 699,000
Medtronic Incorporated................................. 11,000 712,250
Merck & Company Incorporated........................... 10,100 929,200
Pfizer Incorporated.................................... 5,000 458,125
Tenet Healthcare Corporation*.......................... 10,000 271,250
-----------
6,153,400
-----------
ELECTRICAL EQUIPMENT - (4.1%)
Atmel Corporation*..................................... 15,000 560,625
Emerson Electric Company............................... 5,000 495,000
General Electric Company............................... 10,300 1,059,613
-----------
2,115,238
-----------
ELECTRONICS - (4.9%)
Intel Corporation...................................... 12,800 1,816,000
Xilinx Incorporated*................................... 15,000 676,875
-----------
2,492,875
-----------
ENTERTAINMENT - (0.7%)
Walt Disney Company.................................... 5,000 371,250
-----------
FOOD & BEVERAGES - (3.3%)
Coca Cola Company...................................... 16,000 976,000
Pepsico Incorporated................................... 10,600 348,475
Sara Lee Corporation................................... 9,000 348,750
-----------
1,673,225
-----------
HOTELS & RESTAURANTS - (1.2%)
McDonald's Corporation................................. 14,700 635,775
-----------
</TABLE>
See notes to financial statements.
7
<PAGE>
MAGNA GROWTH & INCOME FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
-------------------- --------- -----------
<S> <C> <C>
COMMON STOCKS - (CONTINUED)
HOUSEHOLD PRODUCTS - (4.1%)
Dial Corporation New................................... 50,000 $ 750,000
Procter & Gamble Company............................... 11,000 1,321,375
-----------
2,071,375
-----------
INSURANCE - (3.6%)
Allstate Corporation................................... 10,000 633,750
Conseco Incorporated................................... 20,000 785,000
ITT Hartford Group Incorporated........................ 5,800 435,000
-----------
1,853,750
-----------
INTERNATIONAL OIL - (5.1%)
Exxon Corporation...................................... 7,000 699,125
Mobil Corporation...................................... 7,600 932,900
Texaco Incorporated.................................... 9,900 978,862
-----------
2,610,887
-----------
LIQUOR - (1.7%)
Anheuser Busch Companies, Incorporated................. 20,000 890,000
-----------
PAPER - (1.3%)
Kimberly Clark Corporation............................. 6,100 646,600
-----------
RAILROADS & EQUIPMENT - (1.4%)
Burlington Northern Incorporated....................... 4,600 382,950
CSX Corporation........................................ 7,000 322,875
-----------
705,825
-----------
SOFTWARE - (4.2%)
Microsoft Corporation*................................. 14,200 1,384,500
Oracle Systems Corporation*............................ 20,000 785,000
-----------
2,169,500
-----------
TELEPHONE - (2.6%)
GTE Corporation........................................ 19,500 911,625
SBC Communications Incorporated........................ 7,100 408,250
-----------
1,319,875
-----------
TOBACCO - (2.3%)
Philip Morris Companies, Incorporated.................. 8,800 1,189,100
-----------
</TABLE>
See notes to financial statements.
8
<PAGE>
MAGNA GROWTH & INCOME FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
-------------------- --------- -----------
<S> <C> <C>
COMMON STOCKS - (CONTINUED)
UTILITIES - (4.9%)
Central & South West Corporation....................... 20,000 $ 487,500
Entergy Corporation.................................... 20,000 527,500
GPU Incorporated....................................... 20,000 700,000
Public Service Company of Colorado..................... 20,000 780,000
-----------
2,495,000
-----------
TOTAL COMMON STOCKS - (Cost $28,848,409)................. 44,599,006
-----------
PREFERRED STOCK - (1.6%)
INSURANCE - (1.6%)
Aetna Incorporated..................................... 10,000 806,250
-----------
TOTAL PREFERRED STOCK - (Cost $708,100).................. 806,250
-----------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------- -----------
<S> <C> <C>
GOVERNMENT AND AGENCY BONDS - (1.3%)
FEDERAL AGENCIES - (1.3%)
Federal National Mortgage Association 8.050%,
07/14/2004............................................ $ 650,000 $ 651,625
-----------
TOTAL GOVERNMENT AND AGENCY BONDS - (Cost $649,670)...... 651,625
-----------
SHORT TERM INVESTMENTS - (9.8%)
U.S. GOVERNMENT SECURITIES - (6.8%)
United States Treasury Notes
6.000%, 08/31/1997.................................... 500,000 500,935
5.750%, 09/30/1997.................................... 500,000 500,545
5.750%, 10/31/1997.................................... 500,000 500,470
6.000%, 11/30/1997.................................... 500,000 501,170
6.000%, 12/31/1997.................................... 500,000 501,330
5.125%, 02/28/1998.................................... 500,000 496,720
5.125%, 03/31/1998.................................... 500,000 496,640
-----------
3,497,810
-----------
</TABLE>
See notes to financial statements.
9
<PAGE>
MAGNA GROWTH & INCOME FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- -----------
<S> <C> <C>
REPURCHASE AGREEMENT - (3.0%)
State Street Bank and Trust Company 4.00%, dated
2/28/97, $1,530,000, due 03/03/97, collateralized by
$1,075,000, U.S. Treasury Bond, 11.25%, 02/15/15,
with a value of $1,563,933.......................... $1,530,000 $ 1,530,000
-----------
TOTAL SHORT TERM INVESTMENTS - (Cost $5,028,407)......... 5,027,810
-----------
TOTAL INVESTMENTS - (Cost $35,234,586)--99.8%............ 51,084,691
CASH, RECEIVABLES AND OTHER ASSETS, LESS
LIABILITIES - 0.2%...................................... 102,391
-----------
NET ASSETS - 100.0%...................................... $51,187,082
===========
</TABLE>
* Non-income producing security.
See notes to financial statements.
10
<PAGE>
MAGNA INTERMEDIATE GOVERNMENT BOND FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
-------------------- ---------- -----------
<S> <C> <C>
GOVERNMENT AND AGENCY BONDS - (67.8%)
FEDERAL AGENCIES - (59.4%)
Federal Home Loan Bank
8.450%, 07/26/1999................................... $ 150,000 $ 157,266
7.250%, 07/29/1999................................... 260,000 261,342
7.585%, 02/10/2000................................... 1,000,000 1,032,340
5.750%, 03/02/2001 (a)............................... 950,000 949,825
7.050%, 06/24/2002................................... 500,000 497,110
8.060%, 03/10/2005................................... 500,000 521,458
7.250%, 06/27/2005................................... 1,000,000 985,940
7.151%, 09/13/2005................................... 540,000 530,042
7.000%, 01/24/2006................................... 1,000,000 975,000
7.700%, 07/12/2010................................... 1,000,000 982,030
-----------
6,892,353
-----------
Federal Home Loan Mortgage Corporation
8.000%, 02/01/1999................................... 112,212 115,228
7.680%, 05/23/2001................................... 150,000 150,421
7.900%, 09/19/2001................................... 280,000 294,524
6.800%, 09/18/2002................................... 700,000 691,138
6.600%, 03/25/2003................................... 700,000 685,237
5.780%, 10/22/2003................................... 380,000 358,803
8.030%, 04/06/2005................................... 1,475,000 1,489,293
7.490%, 05/25/2005................................... 1,000,000 995,940
7.250%, 06/08/2005................................... 500,000 494,220
6.550%, 11/28/2005................................... 500,000 482,265
6.910%, 11/30/2005................................... 500,000 481,405
8.000%, 09/11/2006................................... 1,000,000 1,008,280
7.500%, 01/01/2007................................... 27,206 27,223
6.500%, 05/01/2008................................... 118,845 116,543
6.770%, 03/21/2011................................... 1,000,000 940,310
6.710%, 12/05/2011................................... 2,000,000 1,926,880
6.500%, 02/15/2024................................... 197,863 196,120
-----------
$10,453,830
-----------
</TABLE>
See notes to financial statements.
11
<PAGE>
MAGNA INTERMEDIATE GOVERNMENT BOND FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
-------------------- ---------- -----------
<S> <C> <C>
GOVERNMENT AND AGENCY BONDS - (CONTINUED)
FEDERAL AGENCIES - (CONTINUED)
Federal National Mortgage Association
8.800%, 07/25/1997................................... $ 190,000 $ 192,405
5.550%, 10/05/1998 (a)............................... 650,000 640,595
5.380%, 10/23/1998 (a)............................... 840,000 825,283
7.000%, 07/01/1999................................... 757,307 762,524
8.550%, 08/30/1999................................... 360,000 378,900
7.900%, 04/10/2002................................... 700,000 700,763
7.800%, 06/10/2002................................... 550,000 551,287
7.000%, 08/12/2002................................... 280,000 276,805
6.950%, 09/10/2002................................... 700,000 690,921
7.300%, 10/28/2002................................... 280,000 279,345
6.400%, 03/25/2003................................... 1,140,000 1,109,186
7.600%, 04/14/2004................................... 190,000 188,813
7.850%, 09/10/2004................................... 500,000 510,390
8.420%, 10/27/2004................................... 1,000,000 1,012,810
8.330%, 02/08/2005................................... 1,000,000 1,040,160
7.650%, 03/10/2005................................... 500,000 526,955
7.130%, 07/06/2005................................... 1,000,000 975,000
8.000%, 05/15/2006................................... 1,000,000 998,750
8.000%, 06/21/2006................................... 1,000,000 1,016,250
7.500%, 10/05/2006................................... 1,000,000 995,569
8.100%, 05/11/2010................................... 1,000,000 1,019,230
8.000%, 08/02/2010................................... 500,000 500,630
7.000%, 12/05/2011................................... 1,000,000 953,500
7.000%, 12/12/2016................................... 1,000,000 935,000
-----------
17,081,071
-----------
Federal National Mortgage Association REMIC
6.750%, 08/25/2021................................... 920,000 907,828
7.050%, 04/25/2022................................... 925,000 925,592
-----------
1,833,420
-----------
$36,260,674
-----------
</TABLE>
See notes to financial statements.
12
<PAGE>
MAGNA INTERMEDIATE GOVERNMENT BOND FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
-------------------- ---------- -----------
<S> <C> <C>
GOVERNMENT AND AGENCY BONDS - (CONTINUED)
HOUSING AND URBAN DEVELOPMENT BONDS - (0.4%)
Allentown Pennsylvania U.S. Government Guaranteed Note
8.400%, 08/01/1997................................... $ 15,000 $ 15,120
Des Moines Iowa U.S. Government Guaranteed Note
8.400%, 08/07/1997................................... 30,000 30,241
New Haven Connecticut U.S. Government Guaranteed Note
8.400%, 08/01/1997................................... 30,000 30,241
Sacramento California Housing & Redevelopment 8.400%,
08/01/1997........................................... 50,000 50,620
Syracuse New York Industrial Development Agency USG
8.400%, 08/01/1997................................... 115,000 115,937
-----------
242,159
-----------
U.S. GOVERNMENT SECURITIES - (8.0%)
United States Treasury Note
5.125%, 02/28/1998.................................... 460,000 456,982
5.125%, 04/30/1998.................................... 920,000 912,815
6.250%, 06/30/1998.................................... 500,000 502,265
9.250%, 08/15/1998.................................... 135,000 141,117
7.125%, 10/15/1998.................................... 750,000 762,772
5.875%, 03/31/1999.................................... 380,000 378,396
7.000%, 04/15/1999.................................... 1,000,000 1,017,500
6.000%, 10/15/1999.................................... 690,000 687,199
-----------
4,859,046
-----------
TOTAL GOVERNMENT AND AGENCY BONDS - (Cost $41,216,981).. $41,361,879
-----------
</TABLE>
See notes to financial statements.
13
<PAGE>
MAGNA INTERMEDIATE GOVERNMENT BOND FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
-------------------- ---------- -----------
<S> <C> <C>
CORPORATE BONDS - (28.2%)
FINANCE & BANKING - (10.4%)
Associates Corporation NA
7.125%, 05/15/2000................................... $1,000,000 $ 1,014,424
Ford Capital BV
9.375%, 05/15/2001................................... 380,000 415,469
General Electric Capital Corporation
7.730%, 02/13/2002................................... 400,000 418,728
Merrill Lynch & Company Incorporated
8.000%, 02/01/2002................................... 325,000 341,636
8.230%, 04/30/2002(a)................................ 500,000 501,640
8.300%, 11/01/2002................................... 460,000 492,053
8.000%, 06/01/2007................................... 500,000 532,957
-----------
1,868,286
-----------
Morgan Stanley Group Incorporated
8.100%, 06/24/2002................................... 460,000 485,489
National Rural Utilities Cooperative Finance
7.300%, 09/15/2006................................... 1,000,000 1,019,589
Texaco Capital Incorporated
9.000%, 12/15/1999................................... 340,000 361,479
Toyota Motor Credit Corporation
7.130%, 09/26/2006................................... 500,000 496,662
United Postal Savings Association
9.000%, 07/26/1999................................... 250,000 263,865
-----------
6,343,991
-----------
INDUSTRIALS - (10.5%)
Anheuser Busch Companies, Incorporated
8.750%, 12/01/1999................................... 225,000 237,191
duPont (EI) de Nemours & Company
8.125%, 03/15/2004................................... 265,000 284,728
Ford Motor Company
9.000%, 09/15/2001................................... 280,000 304,599
9.500%, 09/15/2011................................... 230,000 274,742
-----------
579,341
-----------
</TABLE>
See notes to financial statements.
14
<PAGE>
MAGNA INTERMEDIATE GOVERNMENT BOND FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
-------------------- ---------- ----------
<S> <C> <C>
CORPORATE BONDS - (CONTINUED)
INDUSTRIALS - (CONTINUED)
Kimberly Clark Corporation
8.625%, 05/01/2001.................................... $ 280,000 $ 300,579
Lilly Eli & Company
8.125%, 12/01/2001.................................... 500,000 529,624
Loews Corporation
8.500%, 04/15/1998.................................... 175,000 179,195
6.750%, 12/15/2006.................................... 500,000 482,665
----------
661,860
----------
Monsanto Company
8.800%, 07/15/1997.................................... 150,000 151,707
8.750%, 05/15/2001.................................... 200,000 214,049
----------
365,756
----------
Pepsico Incorporated
7.625%, 11/01/1998.................................... 280,000 286,036
Philip Morris Companies Incorporated
8.750%, 06/01/2001.................................... 250,000 266,837
7.500%, 01/15/2002.................................... 360,000 367,765
7.250%, 01/15/2003.................................... 700,000 705,517
----------
1,340,119
----------
R R Donnelley & Sons Company
7.000%, 01/01/2003.................................... 700,000 705,864
Rockwell International Corporation
8.375%, 02/15/2001.................................... 280,000 297,081
Shell Canada Limited
7.375%, 06/01/1999.................................... 265,000 270,038
Wal-Mart Stores Incorporated
8.625%, 04/01/2001.................................... 430,000 460,573
Weyerhaeuser Company
8.940%, 04/09/2001.................................... 100,000 107,796
----------
6,426,586
----------
TRANSPORTATION - (0.4%)
Norfolk & Southern Railway Company
7.750%, 08/15/2005.................................... 225,000 236,638
----------
</TABLE>
See notes to financial statements.
15
<PAGE>
MAGNA INTERMEDIATE GOVERNMENT BOND FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
-------------------- ---------- ------------
<S> <C> <C>
CORPORATE BONDS - (CONTINUED)
UTILITIES - (6.9%)
AT & T Corporation
7.125%, 01/15/2002.................................. $ 960,000 $ 975,203
Carolina Telephone & Telegraph Company
7.250%, 12/15/2004.................................. 1,000,000 1,011,982
General Telephone California
6.750%, 12/01/1997.................................. 750,000 750,435
Northern Telecom Limited
8.750%, 06/12/2001.................................. 430,000 461,695
Pacific Bell
7.250%, 07/01/2002.................................. 1,000,000 1,021,991
------------
4,221,306
------------
TOTAL CORPORATE BONDS - (Cost $16,891,666)............. 17,228,521
------------
SHORT TERM INVESTMENTS - (2.5%)
REPURCHASE AGREEMENT - (2.5%)
State Street Bank and Trust Company
4.00%, dated 2/28/97, $1,542,000, due 03/03/97, col-
lateralized by $1,085,000, U.S. Treasury Bond,
11.25%, 02/15/15, with a value of $1,578,481........ 1,542,000 1,542,000
------------
TOTAL SHORT TERM INVESTMENTS - (Cost $1,542,000)....... 1,542,000
------------
TOTAL INVESTMENTS - (Cost $59,650,647)--98.5%.......... 60,132,400
CASH, RECEIVABLES AND OTHER ASSETS, LESS
LIABILITIES - 1.5%.................................... 898,918
------------
NET ASSETS - 100.0%.................................... $ 61,031,318
============
</TABLE>
(a) Interest rate resets annually.
See notes to financial statements.
16
<PAGE>
MAGNA FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
FEBRUARY 28, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
GROWTH & INTERMEDIATE
INCOME GOVERNMENT
FUND BOND FUND
----------- ------------
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $33,704,586, $58,108,647, respectively)....... $49,554,691 $58,590,400
Repurchase agreements, at value and cost............. 1,530,000 1,542,000
Cash................................................. 271 334
Receivable for fund shares sold...................... 11,468 79,878
Dividends receivable................................. 101,967 0
Interest receivable.................................. 51,941 1,105,799
Deferred organizational expenses..................... 26,418 51,587
Prepaid insurance expense............................ 4,852 7,029
----------- -----------
TOTAL ASSETS........................................ 51,281,608 61,377,027
----------- -----------
LIABILITIES:
Payable for fund shares redeemed..................... 5,972 83
Investment advisory fee payable (Note 3)............. 19,774 18,762
Distributions payable................................ 0 235,098
Administrative fee payable (Note 3).................. 7,514 8,913
Trustees fees payable................................ 7,983 7,982
Legal fees payable................................... 21,795 31,762
Other accrued expenses and liabilities............... 31,488 43,109
----------- -----------
TOTAL LIABILITIES................................... 94,526 345,709
----------- -----------
NET ASSETS............................................ $51,187,082 $61,031,318
=========== ===========
NET ASSETS CONSIST OF:
Paid-in capital...................................... 34,950,271 60,783,361
Undistributed (distributed in excess of) net invest-
ment income......................................... 124,791 (22,614)
Accumulated realized gain (loss) on investments -
net................................................ 261,915 (211,182)
Unrealized appreciation on investments - net......... 15,850,105 481,753
----------- -----------
NET ASSETS............................................ $51,187,082 $61,031,318
=========== ===========
Shares of beneficial interest outstanding, no par val-
ue................................................... 2,631,098 4,861,503
Net asset value and redemption price per share........ $ 19.45 $ 12.55
Maximum offering price per share ($19.45/0.96 and
$12.55/0.96)......................................... $ 20.26 $ 13.07
</TABLE>
See notes to financial statements.
17
<PAGE>
MAGNA FUNDS
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 28, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
GROWTH & INTERMEDIATE
INCOME GOVERNMENT
FUND BOND FUND
---------- ------------
<S> <C> <C>
INVESTMENT INCOME:
Interest............................................. $ 146,553 $2,105,016
Dividends............................................ 439,380 0
---------- ----------
TOTAL INCOME........................................ 585,933 2,105,016
---------- ----------
EXPENSES:
Investment advisory fees (Note 3).................... 172,554 147,416
12b-1 fees (Note 3).................................. 57,518 73,708
Administration fees (Note 3)......................... 43,714 56,018
Transfer agent fees.................................. 25,588 20,828
Professional fees.................................... 19,592 28,511
Custodian fees....................................... 27,968 33,919
Amortization of deferred organizational expenses..... 5,229 10,214
Trustees' fees....................................... 10,413 10,413
Other expenses....................................... 11,305 15,502
---------- ----------
Total expenses before reductions and waivers........ 373,881 396,529
Reductions and waivers of expenses (Note 3).......... (115,036) (103,191)
---------- ----------
TOTAL EXPENSES, net of reimbursements and waivers... 258,845 293,338
---------- ----------
NET INVESTMENT INCOME................................. 327,088 1,811,678
---------- ----------
REALIZED AND UNREALIZED GAIN ON
INVESTMENT TRANSACTIONS:
Realized gain on investments - net................... 270,546 57,485
Net change in unrealized appreciation on invest-
ments - net......................................... 8,295,002 506,896
---------- ----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENT
TRANSACTIONS........................................ 8,565,548 564,381
---------- ----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS...................................... $8,892,636 $2,376,059
========== ==========
</TABLE>
See notes to financial statements.
18
<PAGE>
MAGNA FUNDS
MAGNA GROWTH & INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 28, 1997 AUGUST 31, 1996
----------------- ---------------
<S> <C> <C>
INCREASE IN NET ASSETS:
FROM OPERATIONS:
Net investment income....................... $ 327,088 $ 565,292
Net realized gain on investments............ 270,546 1,077,400
Net change in unrealized appreciation on in-
vestments.................................. 8,295,002 4,250,144
----------- -----------
Net increase in net assets resulting from
operations................................. 8,892,636 5,892,836
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income....................... (316,756) (522,116)
Net realized gains.......................... (917,850) (60,437)
----------- -----------
Net decrease in net assets resulting from
distributions to shareholders.............. (1,234,606) (582,553)
----------- -----------
FROM FUND SHARE TRANSACTIONS:
Proceeds from shares sold................... 4,627,285 6,430,315
Shares issued in reinvestment of distribu-
tions...................................... 1,023,018 239,172
Payments for shares redeemed................ (2,116,183) (2,268,580)
----------- -----------
Net increase in net assets from fund share
transactions............................... 3,534,120 4,400,907
----------- -----------
NET INCREASE IN NET ASSETS................... 11,192,150 9,711,190
----------- -----------
NET ASSETS:
Beginning of period......................... 39,994,932 30,283,742
----------- -----------
End of period (1)........................... $51,187,082 $39,994,932
=========== ===========
(1) INCLUDES UNDISTRIBUTED NET INVESTMENT IN-
COME........................................ $ 124,791 $ 114,458
=========== ===========
</TABLE>
See notes to financial statements.
19
<PAGE>
MAGNA FUNDS
MAGNA INTERMEDIATE GOVERNMENT BOND FUND
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 28, 1997 AUGUST 31, 1996
----------------- ---------------
<S> <C> <C>
INCREASE IN NET ASSETS:
FROM OPERATIONS:
Net investment income....................... $ 1,811,678 $ 3,275,349
Net realized gain on investments............ 57,485 67,299
Net change in unrealized appreciation (de-
preciation) on investments................. 506,896 (1,523,540)
----------- -----------
Net increase in net assets resulting from
operations................................. 2,376,059 1,819,108
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income....................... (1,835,759) (3,277,592)
FROM FUND SHARE TRANSACTIONS:
Proceeds from shares sold................... 5,841,775 11,087,902
Shares issued in reinvestment of distribu-
tions...................................... 339,434 636,548
Payments for shares redeemed................ (2,454,139) (5,587,492)
----------- -----------
Net increase in net assets from fund share
transactions............................... 3,727,070 6,136,958
----------- -----------
NET INCREASE IN NET ASSETS................... 4,267,370 4,678,474
----------- -----------
NET ASSETS:
Beginning of period......................... 56,763,948 52,085,474
----------- -----------
End of period (1)........................... $61,031,318 $56,763,948
=========== ===========
(1) INCLUDES UNDISTRIBUTED (DISTRIBUTED IN
EXCESS OF ) NET INVESTMENT INCOME........... $ (22,614) $ 1,466
=========== ===========
</TABLE>
See notes to financial statements.
20
<PAGE>
MAGNA FUNDS
GROWTH & INCOME FUND
FINANCIAL HIGHLIGHTS (UNAUDITED)
Selected data for a share of stock outstanding throughout each period
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEAR SEPTEMBER 1, 1994*
ENDED ENDED THROUGH
FEBRUARY 28, 1997 AUGUST 31, 1996 AUGUST 31, 1995
----------------- --------------- ------------------
<S> <C> <C> <C>
Net asset value, beginning
of period................ $ 16.42 $ 14.05 $ 12.50
------- ------- -------
Net investment income..... 0.13 0.24 0.25
Net realized and
unrealized gain on in-
vestments................ 3.40 2.39 1.52
------- ------- -------
Total from investment op-
erations................. 3.53 2.63 1.77
------- ------- -------
Less distributions:
Dividends from net invest-
ment income.............. (0.13) (0.23) (0.22)
Dividends from net real-
ized gains............... (0.37) (0.03) 0.00
------- ------- -------
Total dividends and dis-
tributions............... (0.50) (0.26) (0.22)
------- ------- -------
Net asset value, end of
period................... $ 19.45 $ 16.42 $ 14.05
======= ======= =======
Total investment return
(1)...................... 21.67% 18.77% 14.33%
======= ======= =======
RATIOS AND SUPPLEMENTAL
DATA:
- -----------------------
Net assets, end of period
($000's)................. $51,187 $39,995 $30,284
Ratio of expenses to aver-
age net assets........... 1.13% 1.27% 1.25%
Ratio of net investment
income to average net
assets................... 1.42% 1.56% 1.98%
Portfolio turnover rate... 12% 31% 41%
Average commission rate
(2)...................... $0.0600 $0.0600 NA
</TABLE>
- -------------------------------------------------------------------------------
Net investment income per share and the annualized ratios of expenses and net
investment income to average net assets before reductions and waivers of fees
by the advisor, distributor and administrator were $0.09, 1.63% and 0.92% for
the six months ended February 28, 1997, $0.17, 1.77% and 1.06%, for the year
ended August 31, 1996 and $0.13, 1.88% and 1.35% for the period September 1,
1994* through August 31, 1995, respectively.
* Commencement of operations.
(1) Total return excludes sales charges. Had the advisor, distributor and
administrator not reduced or waived certain expenses, total returns would
have been lower.
(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.
See notes to financial statements.
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 YEAR SEPTEMBER 1, 1994*
ENDED ENDED THROUGH
FEBRUARY 28, 1997 AUGUST 31, 1996 AUGUST 31, 1995
----------------- --------------- ------------------
<S> <C> <C> <C>
Net asset value, beginning
of period................ $ 12.43 $ 12.75 $ 12.50
------- ------- -------
Net investment income..... 0.38 0.76 0.74
Net realized and
unrealized gain (loss) on
investments.............. 0.13 (0.32) 0.25
------- ------- -------
Total from investment op-
erations................. 0.51 0.44 0.99
------- ------- -------
Less distributions:
Dividends from net invest-
ment income.............. (0.39) (0.76) (0.74)
------- ------- -------
Total dividends and dis-
tributions............... (0.39) (0.76) (0.74)
------- ------- -------
Net asset value, end of
period................... $ 12.55 $ 12.43 $ 12.75
======= ======= =======
Total investment return
(1)...................... 4.12% 3.48% 8.30%
======= ======= =======
RATIOS AND SUPPLEMENTAL
DATA:
Net assets, end of period
($000's)................. $61,031 $56,764 $52,085
Ratio of expenses to aver-
age net assets........... 0.99% 1.05% 1.10%
Ratio of net investment
income to average net
assets................... 6.14% 5.97% 6.00%
Portfolio turnover rate... 9% 20% 34%
</TABLE>
- -------------------------------------------------------------------------------
Net investment income per share and the annualized ratios of expenses and net
investment income to average net assets before reductions and waivers of fees
by the advisor, distributor and administrator were $0.36, 1.34% and 5.79% for
the six months ended February 28, 1997, $0.72, 1.40% and 5.62%, for the year
ended August 31, 1996 and $0.70, 1.43% and 5.66% for the period September 1,
1994* through August 31, 1995, respectively.
* Commencement of operations.
(1) Total return excludes sales charges. Had the advisor, distributor and
administrator not reduced or waived certain expenses, total returns would
have been lower.
See notes to financial statements.
22
<PAGE>
MAGNA FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 28, 1997, 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 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.
23
<PAGE>
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.
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. 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, 1997. For
the six months ended February 28, 1997, Magna waived investment advisory fees
of $57,518 and $29,483, 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 28, 1997, the Distributor waived
$131,226 of service fees.
The Administration Agreement with EAMC will be terminated effective June 1,
1997, at which time BISYS Fund Services will become the Administrator and
Distributor of the Trust.
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 28, 1997
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................ $6,853,093 $3,500,195 $3,815,244 $1,500,000
Intermediate Government Bond Fund... 1,994,260 6,468,438 722,848 4,593,390
</TABLE>
24
<PAGE>
The identified cost for federal income tax purposes of investments owned by
each Fund and their respective gross unrealized appreciation and depreciation
at February 28, 1997 were as follows:
<TABLE>
<CAPTION>
GROSS GROSS
IDENTIFIED UNREALIZED UNREALIZED NET UNREALIZED
COST APPRECIATION (DEPRECIATION) APPRECIATION
----------- ------------ -------------- --------------
<S> <C> <C> <C> <C>
Growth & Income Fund.... $35,234,586 $15,955,297 $(105,192) $15,850,105
Intermediate Government
Bond Fund.............. 59,650,647 932,449 (450,696) 481,753
</TABLE>
5. FUND SHARE TRANSACTIONS
Share activity for the Funds were as follows:
<TABLE>
<CAPTION>
MAGNA GROWTH & INCOME FUND
---------------------------------
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 28, 1997 AUGUST 31, 1996
----------------- ---------------
<S> <C> <C>
Shares sold.............................. 252,255 408,171
Shares issued in reinvestment............ 55,579 15,343
Shares redeemed.......................... (112,983) (143,015)
-------- --------
Net increase............................. 194,851 280,499
======== ========
</TABLE>
<TABLE>
<CAPTION>
MAGNA INTERMEDIATE GOVERNMENT BOND FUND
---------------------------------------
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 28, 1997 AUGUST 31, 1996
-------------------- -------------------
<S> <C> <C>
Shares sold.............. 462,053 871,641
Shares issued in rein-
vestment................ 26,878 50,161
Shares redeemed.......... (194,008) (439,287)
------------------- -------------------
Net increase............. 294,923 482,515
=================== ===================
</TABLE>
25
<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, Massachusetts 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 28, 1997
(UNAUDITED)
60 STATE STREET
SUITE 700
BOSTON, MA 02109
(617) 267-2525
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
This report and the financial statements contained herein are provided for the
general information of the shareholders of the Magna Funds. For a free
prospectus containing more complete information, call (800) 219-4182. Read the
prospectus carefully before you invest or send money.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
