Markman MULTIFUNDS
Annual
Report
December 31, 1997
Conservative Allocation Portfolio
Moderate Allocation Portfolio
Aggressive Allocation Portfolio
<PAGE>
1997: The Year of Surprises
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Pick your topic: blue chip stocks, inflation, emerging markets, bonds -- nothing
seemed to turn out as forecast in the media last January. What does that tell us
about the possibilities in 1998?
The well-read investor a year ago was being told that there were a few
certainties that should be taken into account when investing in 1997. Here's a
brief list of past conventional wisdom and actual 1997 reality:
Conventional Wisdom: Large U.S. stocks are due for a pause. It is almost
impossible for the S&P 500 to gain more than 10% after the past few years'
incredible runup.
What Really Happened: S&P 500 gained 33.4%, breaking all existing records and
exceeding every other major index.
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Conventional Wisdom: Wage pressures and continued strong growth in the economy
will push up inflation.
What Really Happened: Inflation fell to levels not seen since the 1960's, even
in the face of the lowest unemployment levels of a generation.
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Conventional Wisdom: Rotate holdings from overvalued U.S. market into
international markets that are more reasonably priced. Get better upside
potential with less risk.
What Really Happened: Can you say "currency devaluation?" International markets
crash in fourth quarter in an apocalyptic frenzy. Ouch!
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Conventional Wisdom: Junk (high yield) bonds are due for a pause after a long
run; treasuries will have rough sledding as inflation keeps rates up above 7%.
What Really Happened: Junk is king once again and returns 13.0%, according to
Lipper Analytical. Treasuries also soar as rates plummet to 5.9% at year end.
As Casey Stengel said while surveying his hapless Mets, "Can anybody here play
this game?"
Of course, it's easy to make fun and take cheap shots with the benefit of 20/20
hindsight. And we here at Markman have certainly made our share of wrong calls
(more on that later).
My point is simply to illustrate my answer to the question "What will the market
do?" The market will do whatever it takes in order to embarrass the maximum
number of pundits.
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Markman
<PAGE>
A Look Back at Our Year
You may recall that as the year began I was one of those geniuses who were
confidently stating that there was no way the S&P 500 would "threepeat" after
its stunning '95 and '96 runup. We thus began the year with a reduced weighting
in large cap U.S. growth investments. In our last annual report I did, however,
point out two areas that I felt would produce superior risk-adjusted returns,
Real Estate and Small Cap Value. The results were happily as expected. We held
Cohen & Steers Realty in the Conservative and Moderate Portfolios and it
returned 21.2% for 1997. T. Rowe Price Small Cap Value in the Conservative
Portfolio gained 27.9% and Oakmark Small Cap soared 40.5%, helping the
Aggressive Portfolio.
Happier to be Home
Our international exposure was large as the year began, running some 30-35% of
the Moderate and Aggressive Portfolios. We can rattle on forever about asset
allocation and relative value, yada, yada, yada - but the fact is our
international exposure was largely dead weight for most of the year.
Fortunately, we didn't stay stuck in what "should be" and moved to reduce those
allocations as soon as our U.S. outlook brightened in early spring. By June 30,
we were down to 25 - 30% and by September 30 we were 13% and 21% international
in the Aggressive and Moderate Portfolios; and by year-end the allocations were
9% and 14% respectively. Additionally, 80% of that international allocation was
in more stable European value stocks. Thus we were able to side step some of the
fourth quarter carnage in the emerging markets. By year-end the bulk of our
international exposure was via the European holdings of the various Mutual
Series funds we own. We continue to believe this approach will give us a good
risk/return profile in 1998.
Glass Now Half Full
By early spring, continued good news on the inflation and earnings front
convinced me I was wrong in my earlier gloomy assessment of the U.S. market. We
moved quickly out of our defensive mode; in the Conservative Portfolio we
"What will the market do?"
The market will do whatever it takes in order to embarrass
the maximum number of pundits.
I've felt all year that inflation worries were much over
done, with the current Asian crisis being the final straw
that resoundingly crushes any near-term inflation concerns.
sold Robertson Stephens Contrarian and Lindner Dividend and reduced our
allocation of Merger Fund. We then bought Dodge and Cox Balanced, a cautious
balanced fund that we felt would increase our upside without significantly
increasing our risk.
In the Moderate and Aggressive Portfolios we reallocated some international
holdings toward Rydex Nova and Rydex OTC, two "high test" funds that quickly
gave us increased U.S. large cap and technology exposure.
No Inflation Bogey Man
Those of you who listen to our weekly hotline know that I've felt all year that
inflation worries were much over done, with the current Asian crisis being the
final straw that resoundingly crushes any near-term inflation concerns.
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MARKMAN 1
<PAGE>
The following data replaces three graphs that represented comparisons between
the captioned Funds and Indices:
Growth of $10,000 invested on 1/31/95
<TABLE>
<CAPTION>
Graph 1 Graph 2 Graph 3
----------------------------------- ----------------------------------- ------------------------------------
Lehman Lipper
Markman Intermediate Lipper Markman Lipper Markman Global
Conservative Government Balanced Moderate Balanced Conservative Flexible
Allocation Bond Fund Allocation Fund Allocation Fund
Portfolio Index Index Portfolio S&P 500 Index Portfolio S&P 500 Index
--------- ----- ----- --------- ------- ----- --------- ------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JAN 1995 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000
10,000 9,975 9,976 10,040 10,000 10,013 10,060 10,000 10,022
10,010 9,976 10,000 10,100 10,052 10,039 10,100 10,052 10,043
10,090 10,034 9,999 10,190 10,178 10,138 10,100 10,178 10,086
10,130 10,026 10,026 10,230 10,236 10,167 10,240 10,236 10,119
10,140 10,033 10,125 10,220 10,230 10,163 10,250 10,230 10,109
10,160 10,042 10,156 10,230 10,239 10,170 10,260 10,239 10,100
10,140 10,021 10,152 10,240 10,220 10,164 10,260 10,220 10,094
10,140 10,016 10,156 10,260 10,249 10,176 10,270 10,249 10,112
10,130 10,022 10,146 10,260 10,255 10,181 10,280 10,255 10,111
10,150 10,058 10,152 10,270 10,276 10,203 10,270 10,276 10,117
10,160 10,083 10,162 10,260 10,320 10,235 10,280 10,320 10,123
10,150 10,098 10,184 10,250 10,334 10,235 10,280 10,334 10,123
10,150 10,093 10,219 10,240 10,267 10,209 10,250 10,267 10,118
10,140 10,094 10,230 10,220 10,284 10,200 10,190 10,284 10,114
10,150 10,145 10,200 10,220 10,335 10,240 10,180 10,335 10,136
10,180 10,148 10,201 10,300 10,376 10,262 10,210 10,376 10,158
10,200 10,157 10,236 10,330 10,402 10,271 10,240 10,402 10,147
10,170 10,195 10,266 10,280 10,313 10,240 10,170 10,313 10,098
10,200 10,195 10,277 10,320 10,390 10,291 10,230 10,390 10,146
10,170 10,192 10,246 10,310 10,356 10,280 10,220 10,356 10,123
10,130 10,173 10,291 10,320 10,345 10,265 10,220 10,345 10,146
10,110 10,162 10,261 10,310 10,353 10,265 10,220 10,353 10,162
10,090 10,144 10,248 10,290 10,360 10,253 10,210 10,360 10,155
10,040 10,144 10,198 10,240 10,285 10,204 10,160 10,285 10,126
10,050 10,172 10,219 10,230 10,307 10,222 10,150 10,307 10,089
10,060 10,196 10,300 10,290 10,450 10,235 10,230 10,450 10,096
10,110 10,185 10,300 10,290 10,460 10,308 10,250 10,460 10,119
10,110 10,228 10,317 10,290 10,461 10,327 10,250 10,461 10,149
10,160 10,247 10,363 10,340 10,522 10,373 10,300 10,522 10,181
10,170 10,252 10,360 10,340 10,501 10,371 10,300 10,501 10,223
10,190 10,253 10,394 10,350 10,577 10,408 10,310 10,577 10,224
10,180 10,251 10,387 10,340 10,579 10,397 10,310 10,579 10,217
10,190 10,255 10,396 10,360 10,593 10,403 10,340 10,593 10,206
10,190 10,237 10,385 10,350 10,570 10,390 10,330 10,570 10,203
10,180 10,239 10,385 10,340 10,583 10,389 10,330 10,583 10,194
10,180 10,245 10,391 10,340 10,589 10,398 10,360 10,589 10,194
10,240 10,277 10,461 10,390 10,696 10,472 10,430 10,696 10,227
10,270 10,291 10,502 10,430 10,748 10,520 10,550 10,748 10,290
10,270 10,264 10,501 10,440 10,763 10,517 10,590 10,763 10,322
10,260 10,268 10,492 10,440 10,747 10,513 10,520 10,747 10,325
10,270 10,257 10,486 10,470 10,728 10,512 10,470 10,728 10,336
10,260 10,247 10,470 10,450 10,696 10,508 10,460 10,696 10,378
10,280 10,274 10,491 10,480 10,723 10,525 10,470 10,723 10,363
10,330 10,284 10,529 10,540 10,798 10,553 10,440 10,798 10,405
10,330 10,293 10,531 10,550 10,807 10,562 10,460 10,807 10,437
10,340 10,306 10,543 10,560 10,818 10,575 10,440 10,818 10,462
10,350 10,303 10,542 10,550 10,827 10,578 10,450 10,827 10,470
10,360 10,305 10,551 10,560 10,839 10,584 10,510 10,839 10,447
10,350 10,315 10,548 10,550 10,808 10,583 10,530 10,808 10,457
10,370 10,327 10,568 10,580 10,844 10,610 10,570 10,844 10,476
10,400 10,350 10,604 10,600 10,888 10,648 10,680 10,888 10,526
10,380 10,363 10,578 10,590 10,823 10,625 10,620 10,823 10,552
10,370 10,370 10,562 10,580 10,807 10,605 10,550 10,807 10,547
10,350 10,368 10,542 10,550 10,797 10,575 10,390 10,797 10,525
10,360 10,381 10,560 10,550 10,805 10,588 10,410 10,805 10,529
10,390 10,382 10,597 10,580 10,874 10,630 10,480 10,874 10,585
10,430 10,386 10,647 10,610 10,970 10,680 10,580 10,970 10,608
10,420 10,384 10,640 10,590 10,954 10,683 10,600 10,954 10,639
10,420 10,381 10,646 10,590 10,967 10,691 10,650 10,967 10,612
10,430 10,370 10,654 10,610 10,986 10,545 10,710 10,986 10,626
10,430 10,370 10,663 10,630 11,011 10,706 10,720 11,011 10,614
10,430 10,366 10,656 10,630 11,004 10,700 10,680 11,004 10,618
10,450 10,387 10,674 10,630 11,019 10,724 10,680 11,019 10,653
10,530 10,421 10,751 10,700 11,140 10,800 10,790 11,140 10,722
10,540 10,438 10,770 10,680 11,135 10,815 10,740 11,135 10,754
10,570 10,501 10,789 10,690 11,136 10,838 10,690 11,136 10,766
10,600 10,501 10,829 10,730 11,222 10,877 10,780 11,222 10,808
10,630 10,534 10,850 10,740 11,218 10,894 10,770 11,218 10,819
10,640 10,517 10,858 10,760 11,236 10,903 10,800 11,236 10,814
10,640 10,506 10,855 10,790 11,238 10,909 10,900 11,238 10,769
10,650 10,510 10,870 10,810 11,264 10,930 10,960 11,264 10,771
10,680 10,530 10,908 10,840 11,311 10,973 11,010 11,311 10,808
10,700 10,549 10,928 10,860 11,322 11,000 11,070 11,322 10,828
10,680 10,546 10,921 10,870 11,298 10,995 11,170 11,298 10,820
10,620 10,537 10,834 10,800 11,138 10,909 11,080 11,138 10,748
10,610 10,527 10,828 10,790 11,135 10,892 11,080 11,135 10,716
10,630 10,527 10,873 10,860 11,232 10,940 11,190 11,232 10,739
10,660 10,557 10,935 10,910 11,338 11,002 11,370 11,338 10,783
10,680 10,604 10,961 10,910 11,340 11,030 11,290 11,340 10,839
10,690 10,613 10,972 10,900 11,343 11,033 11,260 11,343 10,876
10,650 10,613 10,921 10,840 11,239 10,981 11,130 11,239 10,864
10,660 10,657 10,925 10,770 11,238 10,972 10,890 11,238 10,858
10,710 10,659 11,007 10,860 11,449 11,046 11,000 11,449 10,877
10,740 10,694 11,038 10,900 11,451 11,082 11,110 11,451 10,915
10,770 10,742 11,066 10,930 11,432 11,103 11,180 11,432 10,950
10,820 10,748 11,105 10,990 11,499 11,152 11,260 11,499 11,000
10,810 10,739 11,100 11,000 11,490 11,148 11,210 11,490 10,977
10,780 10,692 11,065 10,970 11,447 11,120 11,230 11,447 10,947
10,770 10,666 11,046 10,980 11,432 11,109 11,280 11,432 10,918
10,710 10,624 10,972 10,930 11,338 11,040 11,270 11,338 10,847
10,730 10,645 11,005 10,970 11,401 11,075 11,300 11,401 10,852
10,790 10,741 11,102 11,030 11,521 11,167 11,380 11,521 10,900
10,800 10,729 11,106 11,040 11,527 11,161 11,440 11,527 10,921
10,810 10,718 11,111 11,070 11,541 11,172 11,510 11,541 10,929
10,840 10,714 11,130 11,100 11,599 11,195 11,570 11,599 10,938
10,890 10,735 11,204 11,170 11,716 11,273 11,760 11,716 10,996
10,900 10,725 11,210 11,190 11,711 11,279 11,850 11,711 10,997
10,900 10,743 11,211 11,180 11,689 11,274 11,800 11,689 11,018
10,970 10,775 11,298 11,270 11,843 11,359 11,950 11,843 11,068
10,960 10,769 11,273 11,260 11,813 11,343 11,940 11,813 11,074
10,890 10,747 11,203 11,160 11,694 11,264 11,750 11,694 11,012
10,860 10,742 11,174 11,110 11,657 11,230 11,630 11,657 10,989
10,870 10,761 11,201 11,130 11,711 11,249 11,620 11,711 10,972
10,870 10,707 11,175 11,170 11,693 11,238 11,730 11,693 10,975
10,900 10,731 11,205 11,210 11,714 11,273 11,790 11,714 10,982
10,900 10,735 11,233 11,200 11,765 11,296 11,800 11,765 11,009
10,930 10,745 11,260 11,240 11,771 11,330 11,850 11,771 11,068
11,000 10,811 11,357 11,340 11,919 11,427 12,000 11,919 11,129
11,070 10,815 11,415 11,420 11,972 11,501 12,190 11,972 11,225
11,090 10,818 11,440 11,450 11,990 11,531 12,230 11,990 11,271
11,070 10,800 11,403 11,430 11,938 11,492 12,170 11,938 11,245
11,150 10,804 11,473 11,560 12,070 11,576 12,440 12,070 11,295
11,170 10,804 11,484 11,600 12,073 11,587 12,520 12,073 11,318
11,150 10,781 11,456 11,590 12,049 11,569 12,530 12,049 11,288
11,170 10,763 11,467 11,630 12,110 11,593 12,590 12,110 11,288
11,110 10,753 11,406 11,530 12,020 11,520 12,400 12,020 11,243
11,000 10,712 11,277 11,340 11,860 11,359 12,020 11,860 11,140
11,030 10,709 11,308 11,400 11,915 11,401 12,110 11,915 11,141
11,030 10,686 11,293 11,430 11,917 11,391 12,170 11,917 11,146
11,110 10,686 11,349 11,550 11,982 11,462 12,420 11,982 11,200
11,150 10,710 11,404 11,650 12,078 11,524 12,570 12,078 11,220
11,160 10,698 11,407 11,690 12,090 11,530 12,650 12,090 11,237
11,210 10,720 11,466 11,760 12,170 11,595 12,770 12,170 11,282
11,190 10,709 11,440 11,740 12,121 11,566 12,710 12,121 11,284
11,200 10,731 11,443 11,730 12,103 11,566 12,660 12,103 11,276
11,160 10,716 11,404 11,650 12,051 11,524 12,500 12,051 11,258
11,150 10,739 11,411 11,580 12,035 11,518 12,340 12,035 11,279
11,150 10,716 11,402 11,550 12,038 11,501 12,330 12,038 11,293
11,170 10,727 11,413 11,600 12,042 11,515 12,400 12,042 11,297
11,180 10,740 11,434 11,600 12,067 11,537 12,420 12,067 11,291
11,190 10,744 11,442 11,610 12,076 11,543 12,440 12,076 11,282
11,180 10,736 11,429 11,620 12,063 11,542 12,490 12,063 11,272
11,170 10,727 11,403 11,610 12,018 11,522 12,460 12,018 11,248
11,150 10,695 11,357 11,600 11,970 11,485 12,500 11,970 11,200
11,180 10,699 11,404 11,670 12,070 11,537 12,620 12,070 11,208
11,180 10,698 11,400 11,680 12,047 11,540 12,660 12,047 11,184
11,220 10,711 11,438 11,760 12,080 11,591 12,850 12,080 11,228
11,230 10,698 11,440 11,770 12,061 11,603 12,860 12,061 11,221
11,240 10,702 11,447 11,780 12,066 11,619 12,900 12,066 11,232
11,250 10,725 11,448 11,710 12,042 11,598 12,710 12,042 11,241
11,250 10,714 11,454 11,760 12,073 11,608 12,790 12,073 11,222
11,230 10,711 11,428 11,760 12,024 11,589 12,820 12,024 11,210
11,230 10,747 11,443 11,720 12,031 11,595 12,760 12,031 11,206
11,240 10,791 11,488 11,740 12,088 11,629 12,740 12,088 11,232
11,270 10,803 11,487 11,690 12,066 11,606 12,630 12,066 11,239
11,250 10,789 11,488 11,660 12,088 11,604 12,560 12,088 11,228
11,280 10,807 11,507 11,700 12,112 11,629 12,620 12,112 11,228
11,300 10,817 11,532 11,750 12,133 11,664 12,710 12,133 11,267
11,330 10,838 11,571 11,760 12,176 11,698 12,710 12,176 11,307
11,380 10,858 11,649 11,880 12,293 11,793 12,900 12,293 11,350
11,410 10,862 11,671 11,960 12,317 11,816 13,020 12,317 11,359
11,420 10,846 11,667 11,980 12,321 11,819 13,070 12,321 11,362
11,450 10,841 11,699 12,040 12,372 11,857 13,180 12,372 11,398
11,470 10,846 11,723 12,070 12,400 11,876 13,270 12,400 11,441
11,500 10,870 11,778 12,090 12,456 11,906 13,250 12,456 11,464
11,520 10,864 11,775 12,110 12,505 11,921 13,260 12,505 11,470
11,550 10,904 11,834 12,140 12,610 11,962 13,250 12,610 11,513
11,550 10,893 11,814 12,090 12,605 11,925 13,150 12,605 11,499
11,530 10,877 11,787 12,100 12,596 11,903 13,140 12,596 11,469
11,560 10,890 11,815 12,170 12,628 11,933 13,220 12,628 11,479
11,590 10,900 11,843 12,200 12,684 11,963 13,270 12,684 11,508
11,550 10,867 11,788 12,150 12,603 11,901 13,220 12,603 11,514
11,520 10,861 11,754 12,120 12,576 11,855 13,200 12,576 11,435
11,500 10,862 11,745 12,100 12,577 11,829 13,110 12,577 11,397
11,500 10,851 11,736 12,100 12,569 11,809 13,080 12,569 11,411
11,480 10,850 11,724 12,060 12,567 11,781 13,010 12,567 11,415
11,530 10,852 11,794 12,160 12,672 11,870 13,190 12,672 11,437
11,550 10,887 11,809 12,150 12,640 11,877 13,180 12,640 11,465
11,520 10,898 11,777 12,080 12,582 11,833 13,040 12,582 11,438
11,510 10,908 11,769 12,070 12,596 11,808 12,960 12,596 11,433
11,490 10,924 11,758 12,010 12,579 11,763 12,810 12,579 11,440
11,500 10,933 11,786 12,040 12,609 11,808 12,900 12,609 11,463
11,510 10,934 11,793 12,060 12,607 11,810 12,900 12,607 11,457
11,470 10,934 11,731 11,940 12,518 11,717 12,680 12,518 11,406
11,430 10,938 11,715 11,890 12,499 11,687 12,630 12,499 11,360
11,470 10,939 11,749 11,990 12,543 11,747 12,760 12,543 11,360
11,510 10,949 11,807 12,080 12,622 11,824 12,900 12,622 11,415
11,550 10,978 11,856 12,120 12,653 11,872 12,930 12,653 11,452
11,470 10,981 11,847 12,120 12,621 11,854 12,920 12,621 11,461
11,430 10,989 11,880 12,200 12,702 11,913 13,080 12,702 11,482
11,470 10,980 11,885 12,230 12,719 11,928 13,160 12,719 11,483
11,510 10,986 11,901 12,260 12,788 11,942 13,170 12,788 11,507
11,550 10,964 11,847 12,190 12,719 11,869 13,050 12,719 11,485
11,490 10,962 11,816 12,160 12,668 11,839 13,060 12,668 11,492
11,480 10,985 11,836 12,150 12,700 11,855 13,030 12,700 11,439
11,430 10,996 11,787 12,080 12,612 11,784 12,910 12,612 11,409
11,340 10,991 11,711 11,970 12,488 11,698 12,800 12,488 11,325
11,350 10,994 11,748 12,010 12,554 11,741 12,860 12,554 11,310
11,400 11,003 11,795 12,080 12,633 11,800 12,970 12,633 11,354
11,390 11,010 11,781 12,060 12,595 11,790 12,950 12,595 11,369
11,430 11,034 11,830 12,100 12,656 11,832 12,990 12,656 11,377
11,510 11,055 11,915 12,200 12,778 11,920 13,110 12,778 11,427
11,550 11,053 11,928 12,250 12,797 11,950 13,200 12,797 11,453
11,530 11,048 11,916 12,220 12,753 11,933 13,150 12,753 11,450
11,490 11,038 11,883 12,130 12,707 11,877 12,950 12,707 11,424
11,500 11,064 11,947 12,180 12,827 11,935 12,940 12,827 11,443
11,560 11,055 11,963 12,280 12,864 11,979 13,110 12,864 11,460
11,550 11,045 11,949 12,260 12,853 11,964 13,120 12,853 11,439
11,520 11,062 11,945 12,220 12,846 11,952 13,030 12,846 11,409
11,440 11,067 11,907 12,120 12,782 11,889 12,840 12,782 11,397
11,470 11,055 11,935 12,180 12,887 11,908 12,870 12,887 11,403
11,520 11,079 11,995 12,230 12,961 11,964 12,910 12,961 11,443
11,560 11,087 12,025 12,250 13,021 11,987 12,930 13,021 11,470
11,500 11,089 11,986 12,150 12,953 11,938 12,750 12,953 11,465
11,490 11,079 12,002 12,140 13,028 11,949 12,690 13,028 11,482
11,470 11,075 12,001 12,100 12,988 11,947 12,660 12,988 11,483
11,510 11,088 12,024 12,150 13,023 11,979 12,730 13,023 11,506
11,520 11,101 12,050 12,160 13,052 12,008 12,730 13,052 11,537
11,620 11,102 12,094 12,290 13,165 12,075 12,950 13,165 11,584
11,670 11,116 12,125 12,340 13,197 12,117 13,050 13,197 11,600
11,680 11,145 12,142 12,360 13,148 12,134 13,120 13,148 11,615
11,680 11,161 12,167 12,340 13,183 12,143 13,070 13,183 11,655
11,780 11,189 12,258 12,450 13,329 12,241 13,260 13,329 11,716
11,800 11,182 12,292 12,500 13,417 12,271 13,250 13,417 11,755
11,800 11,175 12,306 12,510 13,475 12,277 13,180 13,475 11,774
11,760 11,160 12,255 12,440 13,388 12,230 13,080 13,388 11,762
11,780 11,155 12,264 12,480 13,417 12,244 13,140 13,417 11,759
11,810 11,172 12,281 12,480 13,462 12,260 13,170 13,462 11,767
11,780 11,169 12,257 12,440 13,446 12,218 13,090 13,446 11,751
11,800 11,167 12,282 12,470 13,515 12,236 13,110 13,515 11,763
11,730 11,169 12,232 12,390 13,412 12,168 12,960 13,412 11,753
11,700 11,174 12,218 12,350 13,399 12,141 12,850 13,399 11,729
11,560 11,146 12,054 12,140 13,193 11,984 12,580 13,193 11,633
11,620 11,185 12,135 12,220 13,305 12,079 12,740 13,305 11,642
11,610 11,185 12,121 12,220 13,175 12,055 12,750 13,175 11,682
11,650 11,183 12,167 12,280 13,275 12,125 12,900 13,275 11,735
11,690 11,202 12,203 12,330 13,307 12,167 12,970 13,307 11,797
11,720 11,214 12,234 12,350 13,358 12,192 13,000 13,358 11,836
11,730 11,227 12,255 12,380 13,363 12,213 13,050 13,363 11,860
11,760 11,242 12,267 12,390 13,355 12,209 13,030 13,355 11,854
11,800 11,259 12,308 12,450 13,396 12,263 13,121 13,396 11,878
11,843 11,264 12,375 12,494 13,499 12,304 13,132 13,499 11,938
11,865 11,272 12,389 12,483 13,514 12,309 13,043 13,514 11,991
11,822 11,259 12,333 12,406 13,436 12,231 12,932 13,436 12,002
11,811 11,251 12,308 12,373 13,414 12,217 12,920 13,414 12,005
11,832 11,256 12,326 12,395 13,456 12,239 12,932 13,456 12,003
11,768 11,259 12,229 12,241 13,261 12,121 12,676 13,261 11,934
11,671 11,234 12,085 12,098 13,024 11,988 12,553 13,024 11,843
11,692 11,244 12,138 12,186 13,116 12,048 12,720 13,116 11,861
11,703 11,254 12,142 12,219 13,097 12,056 12,754 13,097 11,862
11,682 11,254 12,118 12,175 13,053 12,016 12,653 13,053 11,841
11,736 11,290 12,200 12,241 13,241 12,093 12,720 13,241 11,886
11,746 11,315 12,213 12,285 13,197 12,105 12,765 13,197 11,896
11,768 11,331 12,239 12,318 13,239 12,146 12,809 13,239 11,910
11,789 11,328 12,284 12,406 13,317 12,199 12,943 13,317 11,958
11,811 11,307 12,301 12,483 13,352 12,224 13,087 13,352 11,978
11,822 11,304 12,283 12,494 13,339 12,211 13,121 13,339 11,959
11,886 11,317 12,366 12,626 13,495 12,294 13,277 13,495 12,007
11,875 11,295 12,324 12,593 13,434 12,254 13,254 13,434 11,998
11,918 11,316 12,377 12,649 13,534 12,304 13,299 13,534 12,014
11,951 11,308 12,406 12,660 13,594 12,329 13,299 13,594 12,023
12,015 11,334 12,487 12,759 13,723 12,422 13,410 13,723 12,088
12,080 11,358 12,558 12,836 13,853 12,500 13,510 13,853 12,168
12,112 11,349 12,581 12,880 13,909 12,544 13,577 13,909 12,210
12,112 11,350 12,553 12,880 13,853 12,518 13,610 13,853 12,218
12,144 11,341 12,591 12,957 13,976 12,574 13,722 13,976 12,245
12,177 11,352 12,647 13,012 14,083 12,636 13,789 14,083 12,265
12,198 11,352 12,671 13,034 14,164 12,660 13,777 14,164 12,272
12,263 11,358 12,734 13,111 14,301 12,723 13,844 14,301 12,298
12,273 11,365 12,741 13,122 14,308 12,733 13,822 14,308 12,287
12,316 11,391 12,803 13,144 14,420 12,785 13,833 14,420 12,317
12,306 11,406 12,800 13,122 14,403 12,781 13,777 14,403 12,320
12,295 11,394 12,758 13,111 14,297 12,737 13,766 14,297 12,311
12,284 11,375 12,717 13,122 14,207 12,703 13,789 14,207 12,294
12,273 11,355 12,676 13,111 14,136 12,665 13,789 14,136 12,281
12,177 11,274 12,552 13,001 13,976 12,539 13,666 13,976 12,165
12,241 11,283 12,626 13,111 14,141 12,634 13,811 14,141 12,210
12,349 11,309 12,747 13,254 14,377 12,775 13,989 14,377 12,286
12,349 11,292 12,748 13,298 14,382 12,776 14,033 14,382 12,322
12,306 11,286 12,668 13,221 14,194 12,681 13,944 14,194 12,259
12,273 11,262 12,630 13,166 14,125 12,643 13,855 14,125 12,218
12,273 11,233 12,608 13,177 14,285 12,623 13,866 14,285 12,214
12,252 11,228 12,564 13,111 13,982 12,565 13,755 13,982 12,165
12,273 11,282 12,623 13,111 14,068 12,612 13,677 14,068 12,211
12,338 11,313 12,706 13,177 14,211 12,691 13,711 14,211 12,257
12,370 11,288 12,736 13,276 14,321 12,742 13,866 14,321 12,272
12,359 11,260 12,699 13,232 14,243 12,697 13,811 14,243 12,241
12,381 11,251 12,703 13,254 14,280 12,710 13,833 14,280 12,231
12,155 11,131 12,427 12,946 13,840 12,411 13,477 13,840 12,036
12,198 11,158 12,514 13,012 13,983 12,499 13,544 13,983 12,020
12,177 11,147 12,481 12,968 13,919 12,465 13,488 13,919 12,026
12,209 11,150 12,513 13,012 13,957 12,507 13,577 13,957 12,023
12,241 11,152 12,548 13,034 14,008 12,552 13,633 14,008 12,056
12,263 11,109 12,535 13,078 14,021 12,554 13,666 14,021 12,067
12,349 11,118 12,646 13,177 14,267 12,685 13,789 14,267 12,144
12,338 11,131 12,645 13,144 14,246 12,680 13,744 14,246 12,179
12,349 11,165 12,641 13,122 14,209 12,665 13,688 14,209 12,182
12,359 11,179 12,644 13,122 14,192 12,664 13,677 14,192 12,214
12,381 11,168 12,652 13,144 14,224 12,673 13,711 14,224 12,228
12,370 11,195 12,654 13,089 14,211 12,667 13,622 14,211 12,264
12,392 11,196 12,670 13,089 14,275 12,692 13,610 14,275 12,260
12,381 11,161 12,626 13,089 14,191 12,657 13,622 14,191 12,251
12,392 11,138 12,615 13,100 14,192 12,652 13,633 14,192 12,243
12,435 11,174 12,611 13,111 14,116 12,655 13,655 14,116 12,261
12,499 11,180 12,691 13,210 14,296 12,739 13,777 14,296 12,296
12,521 11,200 12,719 13,232 14,333 12,770 13,822 14,333 12,344
12,521 11,189 12,726 13,254 14,347 12,780 13,855 14,347 12,358
12,542 11,169 12,721 13,276 14,347 12,780 13,911 14,347 12,368
12,424 11,077 12,542 13,133 14,098 12,602 13,711 14,098 12,264
12,435 11,101 12,551 13,133 14,054 12,607 13,733 14,054 12,261
12,381 11,086 12,455 13,034 13,864 12,514 13,610 13,864 12,242
12,359 11,076 12,406 12,968 13,814 12,460 13,544 13,814 12,203
12,402 11,135 12,502 13,023 13,935 12,551 13,622 13,935 12,259
12,445 11,157 12,565 13,100 14,062 12,627 13,733 14,062 12,312
12,456 11,157 12,600 13,155 14,117 12,684 13,855 14,117 12,352
12,456 11,141 12,559 13,111 14,045 12,632 13,800 14,045 12,340
12,488 11,129 12,577 13,166 14,089 12,664 13,911 14,089 12,374
12,521 11,153 12,606 13,210 14,121 12,694 13,978 14,121 12,402
12,553 11,168 12,646 13,287 14,183 12,748 14,134 14,183 12,464
12,575 11,166 12,677 13,342 14,264 12,803 14,278 14,264 12,491
12,596 11,152 12,661 13,375 14,233 12,801 14,345 14,233 12,494
12,639 11,156 12,685 13,441 14,292 12,838 14,456 14,292 12,506
12,682 11,165 12,709 13,485 14,307 12,864 14,501 14,307 12,559
12,671 11,158 12,706 13,496 14,323 12,859 14,512 14,323 12,545
12,671 11,140 12,695 13,496 14,324 12,844 14,534 14,324 12,530
12,714 11,142 12,702 13,518 14,342 12,855 14,568 14,342 12,518
12,628 11,093 12,550 13,375 14,092 12,692 14,345 14,092 12,447
12,628 11,082 12,531 13,375 14,054 12,679 14,367 14,054 12,414
12,628 11,097 12,523 13,353 14,038 12,669 14,367 14,038 12,416
12,618 11,093 12,487 13,320 13,982 12,631 14,323 13,982 12,399
12,607 11,107 12,547 13,331 14,129 12,696 14,345 14,129 12,423
12,639 11,108 12,562 13,386 14,147 12,713 14,423 14,147 12,424
12,693 11,140 12,653 13,496 14,294 12,822 14,601 14,294 12,467
12,725 11,153 12,752 13,606 14,504 12,930 14,812 14,504 12,514
12,790 11,175 12,809 13,683 14,596 13,003 14,946 14,596 12,554
12,822 11,180 12,815 13,705 14,594 13,010 14,946 14,594 12,587
12,811 11,153 12,793 13,727 14,583 12,992 15,002 14,583 12,580
12,843 11,173 12,848 13,771 14,678 13,046 15,057 14,678 12,618
12,876 11,189 12,902 13,815 14,773 13,097 15,169 14,773 12,639
12,897 11,187 12,900 13,804 14,764 13,093 15,135 14,764 12,638
12,919 11,197 12,950 13,837 14,890 13,138 15,169 14,890 12,657
12,930 11,182 12,924 13,826 14,838 13,119 15,124 14,838 12,632
12,962 11,191 12,948 13,848 14,893 13,135 15,102 14,893 12,627
12,919 11,128 12,886 13,793 14,755 13,060 15,002 14,755 12,599
12,886 11,162 12,825 13,694 14,665 12,989 14,868 14,665 12,585
12,919 11,159 12,882 13,727 14,750 13,029 14,924 14,750 12,592
12,951 11,135 12,848 13,793 14,694 13,007 15,013 14,694 12,609
12,940 11,153 12,839 13,760 14,662 12,993 14,957 14,662 12,579
12,962 11,155 12,899 13,804 14,770 13,048 15,002 14,770 12,611
12,983 11,168 12,962 13,870 14,904 13,105 15,035 14,904 12,637
12,930 11,195 12,927 13,782 14,787 13,056 14,879 14,787 12,627
12,865 11,129 12,870 13,716 14,794 12,992 14,824 14,794 12,576
12,876 11,126 12,861 13,738 14,769 12,985 14,835 14,769 12,578
12,876 11,124 12,850 13,727 14,743 12,976 14,824 14,743 12,570
12,876 11,116 12,838 13,738 14,707 12,966 14,846 14,707 12,583
12,854 11,127 12,824 13,661 14,684 12,945 14,723 14,684 12,572
12,833 11,150 12,817 13,595 14,638 12,929 14,590 14,638 12,573
12,811 11,170 12,812 13,529 14,624 12,924 14,490 14,624 12,582
12,768 11,164 12,781 13,375 14,556 12,880 14,223 14,556 12,595
12,725 11,153 12,763 13,320 14,554 12,866 14,134 14,554 12,582
12,671 11,149 12,740 13,232 14,557 12,831 14,000 14,557 12,563
12,693 11,160 12,786 13,309 14,662 12,880 14,100 14,662 12,582
12,725 11,173 12,811 13,386 14,706 12,910 14,200 14,706 12,616
12,714 11,182 12,812 13,353 14,698 12,896 14,156 14,698 12,616
12,671 11,185 12,764 13,221 14,613 12,835 13,933 14,613 12,602
12,671 11,214 12,822 13,320 14,704 12,911 14,089 14,704 12,619
12,747 11,255 12,891 13,452 14,750 12,987 14,323 14,750 12,663
12,779 11,253 12,944 13,518 14,868 13,050 14,401 14,868 12,698
12,768 11,230 12,919 13,507 14,821 13,014 14,401 14,821 12,672
12,768 11,248 12,914 13,463 14,794 12,999 14,312 14,794 12,672
12,661 11,159 12,703 13,276 14,466 12,779 14,056 14,466 12,558
12,596 11,160 12,644 13,166 14,362 12,711 13,889 14,362 12,496
12,607 11,176 12,687 13,199 14,412 12,747 13,944 14,412 12,526
12,585 11,203 12,705 13,133 14,442 12,754 13,811 14,442 12,530
12,467 11,219 12,610 12,869 14,214 12,623 13,444 14,214 12,470
12,456 11,219 12,610 12,825 14,226 12,636 13,399 14,226 12,443
12,402 11,225 12,437 12,615 13,865 12,429 13,032 13,865 12,325
12,338 11,253 12,411 12,516 13,833 12,397 12,943 13,833 12,275
12,370 11,250 12,491 12,626 13,960 12,498 13,132 13,960 12,316
12,402 11,287 12,559 12,704 14,170 12,647 13,288 14,170 12,408
12,435 11,269 12,559 12,704 14,064 12,585 13,243 14,064 12,414
12,413 11,257 12,492 12,615 13,955 12,500 13,099 13,955 12,355
12,392 11,269 12,431 12,527 13,803 12,419 12,920 13,803 12,313
12,338 11,255 12,399 12,450 13,799 12,385 12,865 13,799 12,240
12,359 11,256 12,449 12,505 13,898 12,460 12,954 13,898 12,280
12,359 11,262 12,503 12,571 14,002 12,523 13,032 14,002 12,302
12,359 11,245 12,449 12,560 13,894 12,460 12,965 13,894 12,274
12,370 11,261 12,497 12,571 13,991 12,518 12,965 13,991 12,289
12,381 11,289 12,536 12,626 14,098 12,584 13,021 14,098 12,355
12,435 11,307 12,705 12,715 14,323 12,733 13,165 14,323 12,450
12,488 11,388 12,864 12,836 14,599 12,906 13,388 14,599 12,562
12,499 11,387 12,840 12,836 14,550 12,879 13,366 14,550 12,577
12,510 11,381 12,857 12,836 14,598 12,897 13,388 14,598 12,568
12,521 11,378 12,885 12,869 14,639 12,929 13,444 14,639 12,572
12,532 11,379 12,877 12,869 14,605 12,925 13,432 14,605 12,574
12,521 11,401 12,887 12,847 14,598 12,932 13,399 14,598 12,568
12,542 11,411 12,895 12,836 14,680 12,958 13,388 14,680 12,590
12,532 11,384 12,822 12,792 14,561 12,878 13,288 14,561 12,571
12,542 11,389 12,851 12,814 14,604 12,912 13,321 14,604 12,566
12,542 11,376 12,847 12,825 14,610 12,921 13,343 14,610 12,568
12,575 11,397 12,891 12,825 14,676 12,962 13,343 14,676 12,595
12,596 11,395 12,905 12,836 14,707 12,971 13,321 14,707 12,601
12,618 11,399 12,907 12,836 14,688 12,972 13,310 14,688 12,624
12,628 11,394 12,898 12,836 14,677 12,961 13,299 14,677 12,620
12,650 11,389 12,952 12,880 14,801 13,019 13,388 14,801 12,663
12,650 11,362 12,902 12,902 14,721 12,974 13,388 14,721 12,654
12,650 11,334 12,859 12,902 14,651 12,924 13,343 14,651 12,618
12,671 11,344 12,895 12,935 14,707 12,965 13,410 14,707 12,641
12,671 11,342 12,890 12,946 14,676 12,960 13,432 14,676 12,640
12,650 11,322 12,807 12,913 14,515 12,877 13,343 14,515 12,588
12,628 11,293 12,734 12,869 14,396 12,801 13,277 14,396 12,537
12,628 11,305 12,758 12,836 14,456 12,824 13,254 14,456 12,513
12,661 11,298 12,774 12,880 14,482 12,837 13,299 14,482 12,546
12,661 11,291 12,706 12,847 14,347 12,706 13,210 14,347 12,514
12,661 11,308 12,783 12,880 14,485 12,837 13,299 14,485 12,546
12,682 11,331 12,871 12,924 14,664 12,923 13,377 14,664 12,601
12,693 11,320 12,868 12,935 14,667 12,913 13,399 14,667 12,591
12,704 11,322 12,906 12,968 14,747 12,947 13,432 14,747 12,608
12,714 11,343 12,962 13,012 14,837 13,010 13,510 14,837 12,645
12,736 11,396 13,085 13,089 15,045 13,144 13,655 15,045 12,745
12,747 11,404 13,125 13,122 15,125 13,188 13,700 15,125 12,787
12,736 11,373 13,096 13,122 15,102 13,161 13,711 15,102 12,787
12,736 11,370 13,072 13,111 15,070 13,136 13,700 15,070 12,782
12,725 11,361 13,078 13,133 15,105 13,148 13,722 15,105 12,783
12,725 11,368 13,126 13,144 15,194 13,195 13,755 15,194 12,805
12,725 11,381 13,120 13,122 15,182 13,181 13,711 15,182 12,772
12,725 11,408 13,128 13,111 15,163 13,208 13,711 15,163 12,793
12,747 11,431 13,157 13,155 15,168 13,238 13,755 15,168 12,835
12,757 11,448 13,188 13,177 15,169 13,268 13,789 15,169 12,866
12,768 11,442 13,191 13,188 15,177 13,273 13,789 15,177 12,875
12,768 11,438 13,205 13,199 15,202 13,281 13,800 15,202 12,888
12,811 11,464 13,238 13,221 15,241 13,309 13,811 15,241 12,909
12,843 11,482 13,309 13,276 15,352 13,382 13,911 15,352 12,965
12,843 11,481 13,305 13,276 15,325 13,375 13,911 15,325 12,956
12,865 11,534 13,423 13,342 15,518 13,499 14,033 15,518 13,015
12,876 11,522 13,429 13,364 15,560 13,500 14,056 15,560 13,025
12,865 11,518 13,395 13,331 15,504 13,468 14,000 15,504 13,028
12,854 11,509 13,347 13,309 15,420 13,422 13,955 15,420 12,992
12,843 11,490 13,319 13,287 15,374 13,395 13,933 15,374 12,964
12,854 11,515 13,389 13,309 15,508 13,466 13,978 15,508 13,007
12,865 11,515 13,425 13,342 15,572 13,497 14,033 15,572 13,028
12,865 11,522 13,422 13,353 15,550 13,494 14,045 15,550 13,045
12,865 11,525 13,430 13,342 15,592 13,492 14,022 15,592 13,038
12,876 11,546 13,477 13,353 15,651 13,527 14,045 15,651 13,060
12,897 11,551 13,512 13,364 15,736 13,569 14,067 15,736 13,117
12,886 11,550 13,501 13,353 15,714 13,544 14,022 15,714 13,111
12,876 11,537 13,448 13,309 15,642 13,482 13,955 15,642 13,081
12,865 11,544 13,443 13,287 15,658 13,488 13,922 15,658 13,048
12,854 11,545 13,405 13,265 15,544 13,450 13,866 15,544 13,033
12,854 11,556 13,401 13,265 15,517 13,444 13,855 15,517 13,031
12,843 11,558 13,359 13,232 15,436 13,396 13,777 15,436 13,003
12,843 11,612 13,430 13,221 15,532 13,457 13,766 15,532 13,016
12,854 11,612 13,431 13,232 15,523 13,458 13,766 15,523 13,020
12,854 11,625 13,485 13,265 15,621 13,521 13,844 15,621 13,046
12,854 11,621 13,469 13,276 15,590 13,508 13,844 15,590 13,059
12,865 11,632 13,495 13,276 15,657 13,537 13,866 15,657 13,073
12,876 11,652 13,578 13,320 15,821 13,627 13,955 15,821 13,130
12,919 11,650 13,689 13,408 16,056 13,739 14,100 16,056 13,220
12,940 11,663 13,730 13,452 16,127 13,790 14,156 16,127 13,251
12,962 11,658 13,759 13,463 16,198 13,818 14,189 16,198 13,285
12,983 11,658 13,776 13,496 16,222 13,838 14,223 16,222 13,315
13,005 11,685 13,777 13,485 16,172 13,843 14,211 16,172 13,328
13,026 11,688 13,787 13,507 16,211 13,859 14,256 16,211 13,338
13,059 11,706 13,853 13,540 16,318 13,919 14,312 16,318 13,390
13,069 11,703 13,853 13,540 16,358 13,925 14,312 16,358 13,416
13,080 11,702 13,849 13,551 16,346 13,915 14,300 16,346 13,426
13,091 11,712 13,904 13,573 16,460 13,974 14,334 16,460 13,463
13,123 11,722 13,937 13,595 16,503 14,019 14,378 16,503 13,493
13,134 11,718 13,931 13,584 16,477 14,003 14,356 16,477 13,497
13,166 11,717 13,992 13,628 16,610 14,065 14,423 16,610 13,551
13,209 11,717 14,086 13,694 16,794 14,150 14,512 16,794 13,591
13,198 11,733 14,081 13,694 16,775 14,138 14,512 16,775 13,586
13,188 11,734 14,073 13,672 16,756 14,130 14,490 16,756 13,564
13,209 11,766 14,113 13,716 16,802 14,175 14,534 16,802 13,603
13,231 11,751 14,116 13,705 16,792 14,172 14,534 16,792 13,588
13,209 11,773 14,053 13,683 16,608 14,120 14,456 16,608 13,576
13,209 11,757 14,004 13,672 16,542 14,067 14,445 16,542 13,538
13,241 11,727 13,979 13,716 16,528 14,051 14,479 16,528 13,560
13,177 11,717 13,915 13,617 16,423 13,975 14,356 16,423 13,463
13,252 11,739 14,033 13,738 16,649 14,100 14,523 16,649 13,549
13,263 11,736 14,018 13,760 16,600 14,082 14,523 16,600 13,584
13,198 11,693 13,909 13,672 16,451 13,956 14,434 16,451 13,478
13,177 11,685 13,801 13,617 16,203 13,845 14,356 16,203 13,416
13,155 11,710 13,797 13,551 16,187 13,838 14,278 16,187 13,382
13,134 11,695 13,713 13,518 16,018 13,745 14,211 16,018 13,362
13,134 11,688 13,743 13,529 16,130 13,776 14,223 16,130 13,364
13,166 11,674 13,801 13,595 16,253 13,846 14,300 16,253 13,398
13,241 11,706 13,954 13,672 16,570 14,000 14,401 16,570 13,469
13,274 11,711 13,991 13,716 16,639 14,033 14,479 16,639 13,533
13,263 11,714 13,973 13,716 16,596 14,005 14,479 16,596 13,534
13,284 11,717 14,009 13,738 16,688 14,039 14,501 16,688 13,550
13,306 11,719 14,057 13,771 16,795 14,088 14,534 16,795 13,584
13,349 11,735 14,079 13,804 16,823 14,108 14,590 16,823 13,620
13,360 11,740 14,068 13,848 16,758 14,100 14,657 16,758 13,648
13,382 11,706 13,940 13,834 16,469 13,985 14,658 16,469 13,622
13,301 11,675 13,854 13,738 16,387 13,985 14,539 16,387 13,622
13,336 11,684 13,967 13,834 16,632 13,985 14,646 16,632 13,576
13,347 11,687 13,978 13,870 16,624 14,011 14,670 16,624 13,609
13,371 11,679 14,023 13,894 16,749 14,063 14,742 16,749 13,638
13,382 11,676 13,991 13,906 16,646 14,031 14,742 16,646 13,644
13,417 11,696 14,076 13,955 16,790 14,114 14,814 16,790 13,677
13,440 11,662 14,092 13,955 16,893 14,136 14,826 16,893 13,665
13,464 11,668 14,098 13,991 16,895 14,143 14,874 16,895 13,704
13,522 11,699 14,214 14,087 17,103 14,246 14,969 17,103 13,776
13,545 11,704 14,200 14,099 17,066 14,232 14,969 17,066 13,800
13,557 11,690 14,219 14,135 17,123 14,256 15,029 17,123 13,841
13,580 11,701 14,282 14,171 17,267 14,317 15,101 17,267 13,864
13,592 11,701 14,292 14,195 17,279 14,331 15,137 17,279 13,856
13,604 11,716 14,348 14,232 17,413 14,388 15,184 17,413 13,866
13,604 11,712 14,363 14,268 17,492 14,403 15,232 17,492 13,893
13,580 11,702 14,288 14,244 17,299 14,335 15,172 17,299 13,887
13,557 11,692 14,199 14,183 17,143 14,237 15,053 17,143 13,802
13,534 11,684 14,121 14,111 17,020 14,161 14,945 17,020 13,744
13,545 11,703 14,130 14,147 17,022 14,179 14,957 17,022 13,761
13,557 11,707 14,197 14,159 17,191 14,228 14,969 17,191 13,765
13,592 11,719 14,317 14,256 17,453 14,342 15,113 17,453 13,825
13,615 11,744 14,367 14,292 17,498 14,391 15,172 17,498 13,880
13,627 11,772 14,388 14,316 17,512 14,408 15,196 17,512 13,890
13,627 11,777 14,411 14,328 17,570 14,420 15,196 17,570 13,893
13,615 11,774 14,304 14,292 17,328 14,322 15,101 17,328 13,861
13,615 11,772 14,325 14,304 17,375 14,330 15,125 17,375 13,862
13,662 11,792 14,428 14,388 17,585 14,422 15,256 17,585 13,933
13,662 11,799 14,387 14,388 17,494 14,382 15,208 17,494 13,926
13,673 11,798 14,419 14,400 17,586 14,408 15,208 17,586 13,919
13,720 11,796 14,549 14,484 17,885 14,537 15,352 17,885 13,998
13,755 11,823 14,663 14,557 18,088 14,655 15,459 18,088 14,081
13,767 11,840 14,658 14,569 18,015 14,654 15,447 18,015 14,092
13,813 11,845 14,721 14,629 18,192 14,706 15,507 18,192 14,115
13,813 11,843 14,688 14,629 18,109 14,672 15,495 18,109 14,089
13,778 11,828 14,579 14,569 17,894 14,564 15,376 17,894 14,046
13,778 11,828 14,565 14,533 17,872 14,538 15,316 17,872 14,032
13,802 11,821 14,639 14,593 18,062 14,602 15,400 18,062 14,070
13,813 11,821 14,663 14,617 18,101 14,625 15,447 18,101 14,115
13,790 11,762 14,569 14,569 17,962 14,528 15,376 17,962 14,046
13,790 11,758 14,465 14,521 17,729 14,427 15,268 17,729 14,003
13,778 11,758 14,420 14,496 17,635 14,381 15,220 17,635 13,960
13,813 11,763 14,453 14,521 17,735 14,413 15,256 17,735 13,950
13,836 11,757 14,430 14,557 17,640 14,403 15,280 17,640 13,971
13,860 11,760 14,535 14,617 17,893 14,505 15,400 17,893 14,017
13,883 11,752 14,515 14,641 17,818 14,489 15,424 17,818 14,030
13,918 11,772 14,602 14,701 17,961 14,568 15,507 17,961 14,078
13,953 11,777 14,692 14,785 18,155 14,657 15,603 18,155 14,137
13,976 11,780 14,664 14,809 18,104 14,640 15,627 18,104 14,134
13,965 11,770 14,588 14,725 17,950 14,559 15,555 17,950 14,081
13,895 11,734 14,405 14,617 17,626 14,379 15,400 17,626 13,958
13,918 11,746 14,448 14,665 17,706 14,416 15,435 17,706 13,994
13,895 11,743 14,453 14,605 17,764 14,407 15,376 17,764 13,939
13,848 11,744 14,384 14,545 17,629 14,337 15,268 17,629 13,883
13,836 11,739 14,340 14,521 17,543 14,279 15,196 17,543 13,858
13,802 11,733 14,313 14,448 17,474 14,252 15,149 17,474 13,798
13,802 11,731 14,327 14,460 17,506 14,260 15,184 17,506 13,826
13,825 11,744 14,391 14,472 17,658 14,311 15,172 17,658 13,836
13,836 11,737 14,377 14,521 17,619 14,308 15,208 17,619 13,869
13,848 11,719 14,377 14,569 17,656 14,328 15,280 17,656 13,907
13,755 11,692 14,197 14,496 17,285 14,156 15,149 17,285 13,829
13,638 11,694 14,001 14,352 16,910 13,977 14,897 16,910 13,731
13,604 11,707 14,027 14,256 16,967 13,966 14,802 16,967 13,657
13,557 11,714 13,939 14,171 16,757 13,874 14,670 16,757 13,595
13,499 11,721 13,934 14,135 16,762 13,876 14,670 16,762 13,578
13,487 11,703 13,996 14,183 16,931 13,951 14,790 16,931 13,604
13,522 11,724 14,071 14,256 17,026 14,024 14,885 17,026 13,663
13,534 11,717 14,106 14,280 17,120 14,073 14,909 17,120 13,691
13,534 11,719 14,056 14,280 16,998 14,026 14,897 16,998 13,681
13,522 11,716 14,026 14,244 16,948 13,991 14,874 16,948 13,654
13,440 11,694 13,811 14,123 16,486 13,776 14,658 16,486 13,533
13,406 11,699 13,847 14,087 16,622 13,807 14,658 16,622 13,515
13,475 11,732 13,978 14,183 16,868 13,928 14,778 16,868 13,616
13,499 11,726 14,048 14,256 17,066 13,982 14,838 17,066 13,647
13,510 11,743 14,051 14,244 17,698 13,991 14,826 17,698 13,665
13,522 11,754 14,088 14,244 17,129 14,026 14,862 17,129 13,683
13,487 11,747 14,014 14,207 16,996 13,956 14,790 16,996 13,642
13,499 11,756 14,142 14,244 17,314 14,055 14,850 17,314 13,685
13,499 11,747 14,133 14,232 17,293 14,059 14,874 17,293 13,703
13,499 11,732 14,104 14,244 17,239 14,051 14,874 17,239 13,703
13,475 11,728 14,031 14,159 17,109 13,969 14,730 17,109 13,635
13,475 11,743 14,100 14,171 17,281 14,024 14,778 17,281 13,647
13,545 11,802 14,334 14,328 17,753 14,237 15,005 17,753 13,786
13,580 11,823 14,422 14,400 17,920 14,325 15,113 17,920 13,861
13,604 11,835 14,414 14,424 17,859 14,328 15,149 17,859 13,895
13,685 11,839 14,573 14,581 18,182 14,481 15,364 18,182 14,003
13,755 11,846 14,748 14,761 18,570 14,652 15,591 18,570 14,131
13,755 11,845 14,732 14,737 18,516 14,638 15,543 18,516 14,161
13,732 11,822 14,600 14,653 18,247 14,528 15,459 18,247 14,100
13,767 11,839 14,662 14,701 18,351 14,597 15,519 18,351 14,145
13,790 11,863 14,726 14,761 18,457 14,654 15,579 18,457 14,202
13,836 11,877 14,861 14,858 18,746 14,769 15,699 18,746 14,293
13,825 11,856 14,814 14,858 18,648 14,723 15,675 18,648 14,292
13,848 11,870 14,858 14,894 18,716 14,766 15,710 18,716 14,340
13,871 11,877 14,913 14,942 18,853 14,819 15,794 18,853 14,372
13,860 11,869 14,808 14,882 18,584 14,734 15,675 18,584 14,344
13,860 11,870 14,829 14,894 18,663 14,754 15,687 18,663 14,344
13,883 11,888 14,908 14,954 18,853 14,827 15,818 18,853 14,379
13,895 11,877 14,892 14,990 18,803 14,818 15,866 18,803 14,390
13,906 11,871 14,859 14,966 18,721 14,788 15,842 18,721 14,357
13,953 11,876 14,969 15,062 18,976 14,894 15,997 18,976 14,444
13,941 11,870 14,977 15,086 19,036 14,901 16,057 19,036 14,440
13,953 11,866 14,963 15,074 18,981 14,889 16,033 18,981 14,445
13,953 11,882 14,953 15,050 18,913 14,881 15,997 18,913 14,447
13,988 11,915 15,012 15,074 19,008 14,937 16,021 19,008 14,444
14,000 11,923 15,016 15,074 18,965 14,937 16,021 18,965 14,460
14,034 11,934 15,025 15,074 18,946 14,944 15,974 18,946 14,487
14,034 11,936 14,983 15,050 18,830 14,908 15,926 18,830 14,477
14,069 11,938 15,023 15,098 18,907 14,947 15,997 18,907 14,504
14,116 11,977 15,180 15,207 19,234 15,084 16,129 19,234 14,580
14,151 11,963 15,208 15,267 19,345 15,119 16,237 19,345 14,616
14,174 11,958 15,230 15,279 19,398 15,133 16,225 19,398 14,637
14,198 11,960 15,272 15,303 19,498 15,164 16,284 19,498 14,649
14,256 11,999 15,429 15,411 19,814 15,298 16,416 19,814 14,711
14,326 12,015 15,539 15,520 20,034 15,387 16,524 20,034 14,770
14,337 12,028 15,554 15,532 20,049 15,409 16,559 20,049 14,804
14,314 12,020 15,545 15,520 20,060 15,415 16,583 20,060 14,797
14,314 12,029 15,514 15,496 19,941 15,395 16,524 19,941 14,787
14,361 12,030 15,609 15,592 20,142 15,492 16,691 20,142 14,839
14,337 12,039 15,621 15,556 20,158 15,490 16,679 20,158 14,846
14,279 12,035 15,438 15,460 19,708 15,321 16,488 19,708 14,770
14,314 12,035 15,595 15,556 20,105 15,460 16,643 20,105 14,828
14,302 12,034 15,528 15,532 19,941 15,406 16,583 19,941 14,861
14,302 12,019 15,477 15,520 19,826 15,357 16,524 19,826 14,840
14,326 12,030 15,532 15,544 19,908 15,397 16,583 19,908 14,856
14,361 12,017 15,500 15,532 19,859 15,377 16,571 19,859 14,849
14,396 12,040 15,586 15,616 19,994 15,448 16,655 19,994 14,907
14,430 12,052 15,718 15,725 20,289 15,576 16,834 20,289 14,980
14,489 12,090 15,869 15,845 20,579 15,713 16,990 20,579 15,098
14,489 12,112 15,849 15,845 20,473 15,699 17,002 20,473 15,116
14,512 12,112 15,918 15,905 20,625 15,762 17,097 20,625 15,141
14,489 12,121 15,832 15,845 20,374 15,681 17,050 20,374 15,120
14,524 12,122 15,893 15,881 20,515 15,738 17,121 20,515 15,144
14,535 12,132 15,942 15,929 20,583 15,777 17,193 20,583 15,184
14,559 12,124 15,950 15,977 20,621 15,789 17,289 20,621 15,204
14,582 12,127 16,002 16,001 20,787 15,835 17,372 20,787 15,200
14,652 12,149 16,121 16,146 21,031 15,961 17,576 21,031 15,316
14,663 12,152 16,081 16,122 20,920 15,928 17,492 20,920 15,292
14,605 12,138 15,924 15,953 20,554 15,779 17,241 20,554 15,191
14,559 12,136 15,890 15,869 20,501 15,730 17,133 20,501 15,120
14,640 12,173 16,109 16,074 20,973 15,932 17,384 20,973 15,244
14,675 12,180 16,161 16,158 21,032 15,999 17,456 21,032 15,316
14,710 12,180 16,193 16,182 21,116 16,038 17,480 21,116 15,321
14,698 12,175 16,170 16,170 21,082 16,020 17,468 21,082 15,315
14,710 12,192 16,157 16,146 21,030 16,006 17,396 21,030 15,317
14,745 12,211 16,229 16,194 21,163 16,073 17,468 21,163 15,344
14,826 12,228 16,350 16,302 21,392 16,203 17,647 21,392 15,431
14,850 12,242 16,383 16,339 21,440 16,240 17,671 21,440 15,460
14,815 12,181 16,263 16,278 21,280 16,136 17,623 21,280 15,373
14,815 12,178 16,279 16,278 21,352 16,141 17,683 21,352 15,349
14,838 12,175 16,307 16,302 21,398 16,179 17,767 21,398 15,362
14,920 12,182 16,393 16,411 21,579 16,269 17,863 21,579 15,444
14,896 12,175 16,309 16,387 21,375 16,203 17,779 21,375 15,446
14,803 12,139 16,108 16,230 11,990 16,002 17,564 11,990 15,337
14,803 12,149 16,139 16,206 21,062 16,006 17,480 21,062 15,303
14,792 12,141 16,049 16,158 20,828 15,919 17,396 20,828 15,288
14,780 12,157 16,020 16,122 20,731 15,889 17,372 20,731 15,263
14,792 12,184 16,068 16,146 20,793 15,923 17,408 20,793 15,265
14,722 12,192 15,862 15,941 20,256 15,722 17,121 20,256 15,159
14,722 12,216 15,954 15,977 20,521 15,799 17,169 20,521 15,156
14,792 12,213 16,079 16,110 20,825 15,943 17,384 20,825 15,235
14,861 12,205 16,206 16,242 21,128 16,084 17,576 21,128 15,327
14,803 12,189 16,069 16,122 20,807 15,956 17,420 20,807 15,271
14,768 12,175 16,025 16,050 20,774 15,906 17,360 20,774 15,197
14,792 12,168 16,008 16,050 20,697 15,898 17,360 20,697 15,185
14,780 12,174 15,957 15,977 20,537 15,846 17,253 20,537 15,157
14,792 12,173 15,968 15,989 20,556 15,852 17,277 20,556 15,150
14,780 12,202 15,911 15,917 20,333 15,785 17,169 20,333 15,088
14,768 12,192 15,863 15,881 20,239 15,737 17,145 20,239 15,019
14,896 12,212 16,119 16,074 20,872 15,996 17,408 20,872 15,150
14,920 12,203 16,139 16,110 20,884 16,036 17,444 20,884 15,211
14,920 12,205 16,161 16,146 20,952 16,061 17,504 20,952 15,234
14,931 12,204 16,150 16,182 20,912 16,065 17,552 20,912 15,274
14,966 12,212 16,180 16,218 20,962 16,093 17,623 20,962 15,306
15,001 12,213 16,212 16,242 21,017 16,111 17,659 21,017 15,328
14,966 12,208 16,086 16,134 20,689 15,982 17,492 20,689 15,260
14,920 12,204 16,014 16,062 20,545 15,906 17,420 20,545 15,186
15,001 12,239 16,156 16,194 20,800 16,032 17,552 20,800 15,248
15,024 12,248 16,145 16,218 20,711 16,035 17,540 20,711 15,283
15,141 12,306 16,409 16,387 21,295 16,296 17,803 21,295 15,422
15,164 12,312 16,406 16,423 21,236 16,310 17,839 21,236 15,440
15,222 12,305 16,451 16,495 21,333 16,356 17,898 21,333 15,485
15,222 12,311 16,473 16,519 21,406 16,396 17,982 21,406 15,519
15,281 12,328 16,535 16,603 21,517 16,464 18,090 21,517 15,559
15,269 12,316 16,488 16,579 21,439 16,413 18,090 21,439 15,538
15,281 12,334 16,449 16,567 21,271 16,368 17,994 21,271 15,567
15,281 12,308 16,376 16,531 21,123 16,295 17,898 21,123 15,547
15,292 12,327 16,453 16,591 21,295 16,361 17,958 21,295 15,590
15,362 12,331 16,528 16,688 21,478 16,438 18,078 21,478 15,632
15,397 12,331 16,496 16,712 21,342 16,409 18,078 21,342 15,660
15,467 12,354 16,590 16,808 21,527 16,507 18,138 21,527 15,717
15,490 12,363 16,638 16,844 21,641 16,564 18,209 21,641 15,744
15,549 12,372 16,692 16,941 21,745 16,635 18,365 21,745 15,802
15,607 12,392 16,780 17,001 21,917 16,716 18,425 21,917 15,840
15,630 12,401 16,873 17,061 22,154 16,805 18,556 22,154 15,883
15,584 12,355 16,757 17,013 21,950 16,711 18,556 21,950 15,847
15,560 12,349 16,733 16,953 21,878 16,682 18,532 21,878 15,790
15,537 12,331 16,682 16,917 21,798 16,638 18,496 21,798 15,755
15,560 12,331 16,699 16,953 21,823 16,650 18,532 21,823 15,786
15,572 12,364 16,729 16,965 21,872 16,673 18,484 21,872 15,793
15,560 12,354 16,682 16,929 21,770 16,636 18,425 21,770 15,764
15,490 12,356 16,591 16,844 21,534 16,541 18,221 21,534 15,713
15,374 12,332 16,456 16,676 21,284 16,373 17,958 21,284 15,572
15,432 12,342 16,565 16,760 21,542 16,489 18,126 21,542 15,602
15,514 12,342 16,724 16,917 21,918 16,666 18,401 21,918 15,677
15,490 12,349 16,701 16,880 21,834 16,650 18,317 21,834 15,665
15,339 12,388 16,538 16,579 21,433 16,464 17,934 21,433 15,484
15,316 12,395 16,466 16,519 21,229 16,368 17,803 21,229 15,413
14,838 12,455 15,857 15,821 19,772 15,695 16,739 19,772 14,928
14,920 12,416 16,171 15,953 20,783 16,009 17,157 20,783 15,016
15,013 12,444 16,217 16,098 20,727 16,104 17,325 20,727 15,147
14,908 12,465 16,088 15,905 20,382 15,957 17,038 20,382 15,020
14,978 12,472 16,195 16,062 20,629 16,073 17,253 20,629 15,101
15,129 12,448 16,409 16,254 21,179 16,317 17,600 21,179 15,280
15,153 12,434 16,417 16,278 21,219 16,337 17,647 21,219 15,304
15,176 12,438 16,456 16,327 21,268 16,393 17,731 21,268 15,339
15,164 12,454 16,421 16,302 21,163 16,354 17,635 21,163 15,298
15,048 12,455 16,284 16,146 20,930 16,203 17,372 20,930 15,138
15,036 12,455 16,232 16,122 20,788 16,139 17,301 20,788 15,100
15,013 12,455 16,237 16,098 20,847 16,137 17,229 20,847 15,082
14,896 12,468 16,054 15,905 20,450 15,938 16,858 20,450 14,887
14,908 12,476 16,128 15,929 20,693 16,001 16,966 20,693 14,908
14,955 12,478 16,239 16,038 20,958 16,117 17,157 20,958 14,977
15,071 12,487 16,426 16,218 21,362 16,329 17,432 21,362 15,154
15,036 12,487 16,356 16,170 21,184 16,251 17,289 21,184 15,128
15,059 12,500 16,402 16,206 21,331 16,284 17,289 21,331 15,101
15,118 12,493 16,534 16,315 21,656 16,424 17,492 21,656 15,203
15,164 12,511 16,582 16,375 21,750 16,471 17,492 21,750 15,273
15,071 12,497 16,416 16,206 21,379 16,294 17,181 21,379 15,130
15,059 12,498 16,442 16,206 21,475 16,305 17,157 21,475 15,098
15,071 12,492 16,453 16,242 21,498 16,329 17,229 21,498 15,117
15,106 12,498 16,492 16,266 21,584 16,368 17,277 21,584 15,148
15,199 12,505 16,662 16,435 22,022 16,556 17,492 22,022 15,250
15,199 12,503 16,650 16,423 21,953 16,549 17,420 21,953 15,277
15,222 12,516 16,713 16,435 22,073 16,600 17,480 22,073 15,306
15,211 12,524 16,703 16,459 21,991 16,594 17,528 21,991 15,323
15,234 12,496 16,785 16,519 22,233 16,684 17,683 22,233 15,369
15,246 12,484 16,772 16,543 22,202 16,685 17,755 22,202 15,384
15,211 12,493 16,713 16,483 22,053 16,612 17,588 22,053 15,329
15,153 12,519 16,648 16,387 21,919 16,519 17,396 21,919 15,251
15,071 12,546 16,517 16,230 21,589 16,354 17,097 21,589 15,093
15,083 12,574 16,514 16,230 21,555 16,326 16,918 21,555 15,048
15,094 12,564 16,583 16,206 21,781 16,384 16,870 21,781 15,064
15,118 12,569 16,624 16,290 22,293 16,456 17,062 22,293 15,111
15,141 12,559 16,615 16,302 21,831 16,455 17,073 21,831 15,179
15,094 12,574 16,539 16,230 21,601 16,359 16,942 21,601 15,114
15,036 12,588 16,464 16,134 21,408 16,265 16,882 21,408 15,022
15,059 12,588 16,516 16,182 21,565 16,315 16,906 21,565 15,030
15,048 12,591 16,401 16,134 21,236 16,203 16,846 21,236 14,988
15,048 12,591 16,351 16,122 21,091 16,142 16,798 21,091 14,963
15,048 12,591 16,383 16,134 21,176 16,175 16,822 21,176 14,986
15,141 12,585 16,535 16,302 21,566 16,364 17,062 21,566 15,115
15,246 12,583 16,692 16,471 21,963 16,546 17,313 21,963 15,239
DEC 1997 15,292 12,603 16,734 16,515 21,954 16,610 17,438 21,954 15,278
</TABLE>
Past performance is not predictive of future performance.
Accordingly, our view is that interest rates are likely to decline sharply. We
acted on this last fall by buying zero coupon bond funds in all three
Portfolios. So far these positions have contributed greatly, producing gains
while reducing overall volatility. Of course, we continued to maintain all year
our large positions in Northeast Investors Trust, the best (in our opinion) junk
bond fund around. It returned 13.9% in 1997.
The Bottom Line
When the dust all settled, the results were good. As the graphs illustrate, the
MultiFunds did well against the indices that are most comparable to not only
what our funds own, but also how they are managed. The Aggressive Allocation
Portfolio returned 19.0% in 1997 versus 12.2% for the Lipper Global Flexible
Fund Index. The Moderate Allocation Portfolio gained 19.4% versus 18.8% for the
Lipper Flexible Fund Index. These two comparative indices are highlighted
because they provide a relevant picture of what our type of funds do. The
Flexible Fund Index covers funds that aim for high total return by allocating
their Portfolios among a wide range of asset classes. The Global Flexible Fund
Index is similar to the Flexible Fund Index, with at least 25% of assets in
securities traded outside the U.S. The S&P 500, an index of the largest U.S.
stocks gained 33.4%. We include this index in our comparisons to satisfy
regulatory requirements. We do not believe it to be an accurate or relevant
comparison to the content objective or risk levels of either the Moderate or
Aggressive Portfolio.
(The S&P is composed solely of the largest U.S. stocks. It is 100% "large cap
U.S." The Moderate and Aggressive Portfolios, on the other hand, are much more
widely diversified, holding funds that invest in small U.S. stocks, foreign
stocks, and bonds, in addition to large U.S. stocks. The actual large cap U.S.
stock exposure in our Portfolios has averaged well under 50%.)
The Conservative Allocation Portfolio returned 14.3% for the year, almost
exactly midway between the two indices we use as comparisons: Lipper Balanced
Fund Index (+20.1%) and the Lehman Intermediate Bond Index (+7.7%). These two
indices have little in common. The reason we use both is that the Markman
Conservative Allocation Portfolio, which in many respects looks like a balanced
fund, has an additional mission: reduction of short-term volatility. Our aim is
to be 25-50% less volatile than the average balanced fund, often achieving
degrees of volatility more often associated with an intermediate-term bond fund.
Naturally, attempts to reduce short-term volatility often result in the
reduction of upside potential as well. Note that in the bar graph comparison
made later in this report we use as a comparison a blended index of 75% Lipper
Balanced and 25% Lehman Intermediate Government Bond.
- --------------------------------------------------------------------------------
Markman 2
<PAGE>
What We Expect in 1998
Our view at Markman is that the markets have seriously misjudged the impact of
the Asian debacle. Western civilization is not teetering on the brink of
collapse. Indeed, in our view, quite the opposite is the case: we may be poised
for a truly explosive upside. Some talking points to bring to the office water
cooler debate:
The Stronger Economy
The U.S. economy is almost guaranteed to surprise everyone with its strength in
1998. Why? Consumer spending is over two-thirds of Gross National Product and
this year the consumer will truly be king. Prices will stay down and inflation
will probably be even lower than last year. At the same time, wages will
continue to creep up. Additionally, as interest rates fall, we'll see a flood of
home mortgage refinancing. This will put an additional $100-200 per month of
real money in millions of consumers' pockets. The net results will be a consumer
led continuation of the current economic expansion - without inflation.
Asia Not the Whole Story
Financial gloomsters continue to focus on the negative effects of Asian
meltdowns. Their glass is not only half empty, there's a hole in the bottom!
Without overly minimizing the seriousness of the crisis, let me suggest that in
all likelihood we'll somehow muddle through it all. Yes, there will be losers.
Cheap Asian imports will hurt commodity-based producers. But there will also be
winners. Companies that assemble products using Asian components will find their
cost of goods reduced, thus helping profit margins. Sales to Asia will slow, but
World trade is far more complex and self-correcting than TV
talking heads sometimes make it out to be.
business with Europe will almost certainly increase. In other words, world trade
is far more complex and self-correcting than TV talking heads sometimes make it
out to be.
Lower Rates: A Positive
One clear effect of the Asian crisis will be to keep prices down in 1998. Our
guess is that inflation will run under 1.5%. At that level, long-term interest
rates, currently just below 6%, are too high. Long rates could fall to 5% this
year. As interest rates fall, you'll hear many observers begin to note that
price earnings multiples could rise.
Multiple expansion, combined with better than expected earnings news, could
provide the positive surprises that fuel a major market rally. The best and
safest growth play will be the U.S. Yes, the rest of the world is not about to
close up shop, and there will be big opportunities in selected overseas markets.
But for there to be any sustainable move internationally, the U.S. must do well.
In other words, globally financially speaking, "if Wall Street ain't happy,
ain't nobody happy." We won't totally get out of foreign holdings (extreme moves
rarely pay off), but the real engines in the Portfolios are most likely made in
the USA.
So how much of this will be 100% correct one year from now? Certainly not all.
Surprises are inevitable. And by their very nature, are unforeseeable. (That's
why they're called surprises!) I will assure you that if the evidence points
elsewhere anytime in 1998, we'll be awake and ready to shift with the winds of
change.
As always, thanks for your confidence as shareholders. Call or write anytime.
/s/ Bob Markman
December 31, 1997
- --------------------------------------------------------------------------------
Markman 3
<PAGE>
AGGRESSIVE ALLOCATION PORTFOLIO
Our Goal: To achieve high long-term growth consistent with reasonable
diversification. A fully invested portfolio, largely stock oriented, will be
maintained at all times, thus creating relatively high volatility.
Fourth quarter weakness in international markets, small caps, and technology
stocks acted as a drag on the Aggressive Portfolio over the past few months.
Even so, we finished 1997 well ahead of our targeted benchmark, the Lipper
Global Flexible Fund Index (18.96% vs. 12.16%).
There were three tactical moves made in this last quarter that you should be
aware of. First, we continued to reduce our international exposure, particularly
in areas outside Western Europe. We believe U. S. stocks will outperform foreign
holdings in 1998 and therefore will likely keep our international holdings below
average levels for the foreseeable future.
The most significant tactical move has been the inclusion of a zero coupon bond
fund position. This may seem unusual, given the Portfolio's fully invested
equity orientation, but does make sense when viewed simply as a dynamic growth
opportunity. Our outlook calls for long-term interest rates to decline to 5% or
lower this year. If that occurs, these bond positions will give us stock-like
returns of 20-30%.
Lastly, we continue to be long-term bulls on technology stocks and have used the
current short-term panic mentality as a good excuse to add to these positions.
- --------------------------------------------------------------------------------
Content Breakdown
- --------------------------------------------------------------------------------
Unaudited
U.S. Stocks
Bonds
Cash
Intl.
Stocks
U.S. Stocks ............. 68%
International Stocks .... 9%
Bonds ................... 13%
Cash .................... 10%
Portfolio Comparison
[Graphic Omitted]
Markman Aggressive Lipper Global Flexible
Allocation Portfolio Fund Index
-------------------- ----------
12 Mos. ending 12/97 19.0% 12.2%
2 years annualized 15.3% 13.4%
Since Inception annualized* 21.0% 15.7%
* from February 1, 1995
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
Markman Aggressive Allocation Portfolio - December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Fund Shares Market Value % of Total Status**
(Unaudited)
<S> <C> <C> <C> <C>
Oakmark Small Cap Fund* ........................ 860,416 $ 16,709,270 19.8% --
PBHG Growth Fund* .............................. 550,474 13,976,533 16.6% +
Franklin Mutual European Fund - Class Z ........ 667,015 8,404,390 10.0%
Steinroe Growth Stock Fund* .................... 221,494 7,641,537 9.0%
American Century Benham Target Series 2025 Fund* 218,292 5,575,181 6.6% new
Franklin Mutual Financial Fund - Class Z ....... 416,847 5,118,875 6.1% +
American Century Benham Target Series 2020 Fund* 135,808 4,199,174 5.0% new
Franklin Mutual Shares Fund - Class Z .......... 190,573 4,057,304 4.8% --
The Rydex Series Nova Fund* .................... 153,697 3,831,661 4.5% --
Transamerica Premium Equity Fund* .............. 170,829 3,165,458 3.7% new
Yacktman Fund .................................. 217,586 3,057,090 3.6% --
The Rydex Series OTC Fund ...................... 131,660 2,943,917 3.5%
CGM Focus Fund* ................................ 266,947 2,503,964 3.0% +
T. Rowe Price Science & Technology Fund* ....... 67,101 1,829,183 2.2% --
Miscellaneous - Money Market Fund .............. 1,472,146 1,472,146 1.7% +
------------ -----
Total Investments (Cost $78,340,791) ........... 84,485,683 100.1%
Other Assets and Liabilities, Net .............. (84,517) (0.1)%
------------ -----
Net Assets ..................................... $ 84,401,166 100.0%
============ =====
</TABLE>
* Non-income producing security
** A "+" indicates an increase and "-" indicates a decrease of 1% or greater,
compared to end of prior quarter, "new" means did not appear in prior
quarter.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
Markman 4
<PAGE>
MODERATE ALLOCATION PORTFOLIO
Our Goal: To blend our Conservative and Aggressive approach in a
middle-of-the-road portfolio that aims for higher return than a Conservative
approach but lower volatility than an Aggressive stance.
As in the Aggressive Portfolio, our
allocations to small caps and international funds (as scaled back as they were)
slowed our progress in the past quarter. We nevertheless finished the year ahead
of our targeted benchmark, the Lipper Flexible Fund Index (19.38% vs. 18.77%).
Nineteen ninety-seven proved to be a year when the strategy of "blending"
aggressive and conservative tactical allocations paid off. This will usually be
the case when we go through a period split between euphoria and despair in the
markets.
In the past few months, our major changes have been to decrease international
exposure (which helped), increase small cap exposure (which hurt), and increase
our bond positions (which helped). As we move into 1998, continued adjustments
will likely reflect our barbell blend of cautious ideas culled from the
Conservative Portfolio and high growth potential positions borrowed from the
Aggressive Portfolio. Look for more bonds, some tech holdings, more large cap
U.S., and less international.
- --------------------------------------------------------------------------------
Content Breakdown
- --------------------------------------------------------------------------------
Unaudited
Bonds
U.S. Stocks
Intl. Stocks
Cash
U.S. Stocks ............. 53%
International Stocks .... 14%
Bonds ................... 21%
Cash .................... 12%
PORTFOLIO COMPARISON
[Graphic Omitted]
Markman Moderate Lipper Flexible
Allocation Portfolio Fund Index
-------------------- ----------
12 mos. ending 12/97 19.4% 18.8%
2 years annualized 15.2% 16.4%
Since inception annualized* 18.8% 19.0%
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
Markman Moderate Allocation Portfolio - December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Fund Shares Market Value % of Total Status**
(Unaudited)
<S> <C> <C> <C> <C>
Franklin Mutual Discovery Fund - Class Z ....... 623,257 $11,773,332 13.6%
Franklin Mutual Beacon Fund - Class Z .......... 811,651 11,460,517 13.3%
Yacktman Fund .................................. 796,773 11,194,659 13.0%
Northeast Investors Trust ...................... 911,828 10,622,794 12.3%
Oakmark Small Cap Fund* ........................ 491,110 9,537,357 11.0% +
Cohen & Steers Realty Shares ................... 186,538 9,360,473 10.8% +
American Century Benham Target Series 2020 Fund* 288,731 8,927,577 10.3% new
The Rydex Series Nova Fund* .................... 300,250 7,485,230 8.7% --
Janus Worldwide Fund ........................... 107,244 4,051,682 4.7% --
Miscellaneous - Money Market Fund .............. 1,623,210 1,623,211 1.9% +
------------ -----
Total Investments (Cost $80,690,145) ........... 86,036,832 99.6%
Other Assets and Liabilities, Net .............. 351,461 0.4%
------------ -----
Net Assets ..................................... $ 86,388,293 100.0%
============ =====
</TABLE>
* Non-income producing security
** A "+" indicates an increase and "-" indicates a decrease of 1% or greater,
compared to end of prior quarter, "new" means did not appear in prior
quarter.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
Markman 5
<PAGE>
CONSERVATIVE ALLOCATION PORTFOLIO
Our Goal: To capture returns close to that of a typical portfolio cautiously
balanced among stocks, bonds, and money market funds while keeping short-term
volatility closer to that of an intermediate bond portfolio.
As cautiously positioned as we were going into the fourth quarter, the violent
international and small cap declines still affected the Conservative Portfolio
more than we liked to see short term. Overall, though, our results for the year
look good. Although we trailed our targeted benchmark, a blend consisting of 75%
Lipper Balanced Fund Index and 25% Lehman Intermediate Bond Index (14.27% vs.
17.00%), we think our approach remains more diversified and lower risk. This
will, we believe, become increasingly obvious in the volatile markets ahead.
The current tactical story for the Conservative Allocation Portfolio is much the
same as our other funds. International exposure has been ratcheted down to its
lowest level ever. Conversely, our bond exposure is at its highest level ever.
As the new year begins, we are continuing to shift assets to make this Portfolio
as stable as we can, given these troubled markets. It would not surprise us if
most of the assets by next quarter's report were in bonds and cash.
- --------------------------------------------------------------------------------
Content Breakdown
- --------------------------------------------------------------------------------
Unaudited
Bonds
U.S. Stocks
Cash
Intl.
Stocks
U.S. Stocks ............. 48%
International Stocks .... 7%
Bonds ................... 32%
Cash .................... 13%
PORTFOLIO
[Graphic Omitted]
Markman Conservative Blended**
Allocation Portfolio Index
-------------------- -----
12 mos.ending 12/97 14.3% 17.0%
2 years annualized 13.8% 13.8%
Since inception annualized* 15.7% 16.5%
* from February 1, 1995
** A blend consisting of 75% Lipper Balanced Fund and 25% Lehman Intermediate
Bond Index.
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
Markman Conservative Allocation Portfolio - December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Fund Shares Market Value % of Total Status**
(Unaudited)
<S> <C> <C> <C> <C>
Northeast Investors Trust ...................... 531,313 $ 6,189,801 16.9%
Dodge & Cox Balanced Fund ...................... 81,879 5,467,869 14.9%
Franklin Mutual Qualified Fund - Class Z ....... 251,873 4,579,058 12.5% --
T. Rowe Price Small-Cap Value Fund ............. 175,628 4,109,695 11.2% --
Cohen & Steers Realty Shares ................... 81,797 4,104,572 11.2% +
SoGen International Fund, Inc. ................. 152,779 3,888,226 10.6% --
American Century Benham Target Series 2010 Fund* 58,881 3,107,166 8.5% new
Yacktman Fund .................................. 173,116 2,432,283 6.6% --
American Century Benham Target Series 2020 Fund* 34,422 1,064,315 2.9% new
The Merger Fund ................................ 61,894 875,795 2.4% --
Miscellaneous - Money Market Fund .............. 595,445 595,444 1.6%
------------ -----
Total Investments (Cost $34,440,317) ........... 36,414,224 99.3%
Other Assets and Liabilities, Net .............. 265,967 0.7%
------------ -----
Net Assets ..................................... $ 36,680,191 100.0%
============ =====
</TABLE>
* Non-income producing security
** A "+" indicates an increase and "-" indicates a decrease of 1% or greater,
compared to end of prior quarter, "new" means did not appear in prior
quarter.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
Markman 6
<PAGE>
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Statements of Assets and Liabilities o December 31, 1997
Markman Markman Markman
Conservative Moderate Aggressive
Allocation Allocation Allocation
Portfolio Portfolio Portfolio
- ---------------------------------------------------------------------------------------------------------
ASSETS
Investments in securities:
<S> <C> <C> <C>
At acquisition cost ............................... $34,440,318 $ 80,690,145 $ 78,340,791
=========== ============ ============
At value (Note 1) ................................. $36,414,224 $ 86,036,832 $ 84,485,683
Receivable for capital shares sold ................... 356,864 588,476 216,722
Dividends receivable ................................. 1,824 2,903 4,604
----------- ------------ ------------
Total Assets ...................................... 36,772,912 86,628,211 84,707,009
----------- ------------ ------------
- ---------------------------------------------------------------------------------------------------------
LIABILITIES
Payable for capital shares redeemed .................. 13,479 55,055 41,898
Distributions payable to shareholders ................ 53,253 119,501 199,549
Payable to affiliates (Note 3) ....................... 25,989 65,362 64,396
----------- ------------ ------------
Total Liabilities ................................. 92,721 239,918 305,843
----------- ------------ ------------
- ---------------------------------------------------------------------------------------------------------
NET ASSETS ........................................... $36,680,191 $ 86,388,293 $ 84,401,166
=========== ============ ============
Net assets consist of:
Paid-in capital ...................................... $34,617,111 $ 81,088,405 $ 78,586,017
Undistributed net investment income .................. 89,174 -- 21,208
Distributions in excess of net realized gains ........ -- (46,799) (350,951)
Net unrealized appreciation on investments ........... 1,973,906 5,346,687 6,144,892
----------- ------------ ------------
Net Assets ........................................ $36,680,191 $ 86,388,293 $ 84,401,166
=========== ============ ============
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) (Note 5) 3,104,084 7,258,219 6,625,749
=========== ============ ============
Net asset value, redemption price and offering
price per share (Note 1) .......................... $ 11.82 $ 11.90 $ 12.74
=========== ============ ============
</TABLE>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
Markman 7
<PAGE>
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Operations o For the Year Ended December 31, 1997
Markman Conservative Markman Moderate Markman Aggressive
Allocation Portfolio Allocation Portfolio Allocation Portfolio
INVESTMENT INCOME
<S> <C> <C> <C>
Dividend income ........................................................ $1,291,468 $ 2,444,243 $ 839,034
---------- ----------- -----------
EXPENSES
Investment advisory fees ................................................ 354,506 784,937 779,884
Independent trustees' fees .............................................. 13,750 13,750 13,750
---------- ----------- -----------
Total Expenses (Note 3) .............................................. 368,256 798,687 793,634
---------- ----------- -----------
NET INVESTMENT INCOME ................................................... 923,212 1,645,556 45,400
---------- ----------- -----------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains from security transactions ........................ 1,417,864 6,181,757 7,715,287
Capital gain distributions from other investment companies ........... 1,498,259 3,734,672 2,595,928
Net change in unrealized appreciation/depreciation on investments .... 1,268,051 3,184,691 3,812,227
---------- ----------- -----------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS ........................ 4,184,174 13,101,120 14,123,442
---------- ----------- -----------
NET INCREASE IN NET ASSETS FROM OPERATIONS .............................. $5,107,386 $14,746,676 $14,168,842
========== =========== ===========
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets o For the Years Ended December 31, 1997 and December 31, 1996
Markman Conservative Markman Moderate
Allocation Portfolio Allocation Portfolio
Year Ended Year Ended Year Ended Year Ended
Dec. 31, 1997 Dec. 31, 1996 Dec. 31, 1997 Dec. 31, 1996
FROM OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income .......................... $ 923,212 $ 964,793 $ 1,645,556 $ 1,110,324
Net realized gains from security transactions .. 1,417,864 612,693 6,181,757 1,942,355
Capital gain distributions from other
investment companies ........................ 1,498,259 1,573,569 3,734,672 3,505,633
Net change in unrealized appreciation/
depreciation on investments ................. 1,268,051 530,876 3,184,691 797,362
------------ ------------ ------------ ------------
Net increase in net assets from operations ..... 5,107,386 3,681,931 14,746,676 7,355,674
------------ ------------ ------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income ........... (835,373) (963,458) (1,645,585) (1,110,295)
Distributions in excess of net investment
income (Note 1) ............................. (416,485) (627,137) (1,325,397) (860,538)
Distributions from net realized gains .......... (2,379,863) (1,678,900) (8,443,248) (4,782,033)
------------ ------------ ------------ ------------
Decrease in net assets from distributions
to shareholders ............................. (3,631,721) (3,269,495) (11,414,230) (6,752,866)
------------ ------------ ------------ ------------
FROM CAPITAL SHARE TRANSACTIONS (Note 5):
Proceeds from shares sold ...................... 12,294,435 49,145,757 18,522,359 70,199,331
Net asset value of shares issued in
reinvestment of distributions to shareholders 3,578,467 3,199,781 11,294,729 6,679,202
Payments for shares redeemed ................... (23,247,508) (20,031,002) (25,388,050) (37,842,170)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets from
capital share transactions .................. (7,374,606) 32,314,536 4,429,038 39,036,363
------------ ------------ ------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS ........ (5,898,941) 32,726,972 7,761,484 39,639,171
NET ASSETS:
Beginning of year .............................. 42,579,132 9,852,160 78,626,809 38,987,638
------------ ------------ ------------ ------------
End of year .................................... $ 36,680,191 $ 42,579,132 $ 86,388,293 $ 78,626,809
============ ============ ============ ============
UNDISTRIBUTED NET INVESTMENT INCOME ............ $ 89,174 $ 1,335 $ -- $ 29
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
Markman Aggressive
Allocation Portfolio
Year Ended Year Ended
Dec. 31, 1997 Dec. 31, 1996
FROM OPERATIONS:
<S> <C> <C>
Net investment income .......................... $ 45,400 $ 309,914
Net realized gains from security transactions .. 7,715,287 1,705,972
Capital gain distributions from other
investment companies ........................ 2,595,928 3,846,983
Net change in unrealized appreciation/
depreciation on investments ................. 3,812,227 2,238,283
------------ ------------
Net increase in net assets from operations ..... 14,168,842 8,101,152
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income ........... (24,224) (309,882)
Distributions in excess of net investment
income (Note 1) ............................. (1,125,463) (689,085)
Distributions from net realized gains .......... (9,531,600) (4,868,973)
------------ ------------
Decrease in net assets from distributions
to shareholders ............................. (10,681,287) (5,867,940)
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS (Note 5):
Proceeds from shares sold ...................... 19,230,794 80,691,707
Net asset value of shares issued in
reinvestment of distributions to shareholders 10,481,739 5,792,545
Payments for shares redeemed ................... (33,127,820) (46,714,062)
------------ ------------
Net increase (decrease) in net assets from
capital share transactions .................. (3,415,287) 39,770,190
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS ........ 72,268 42,003,402
NET ASSETS:
Beginning of year .............................. 84,328,898 42,325,496
------------ ------------
End of year .................................... $ 84,401,166 $ 84,328,898
============ ============
UNDISTRIBUTED NET INVESTMENT INCOME ............ $ 21,208 $ 32
============ ============
</TABLE>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
Markman 8
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended
MARKMAN CONSERVATIVE ALLOCATION PORTFOLIO o FINANCIAL HIGHLIGHTS December 31, December 31, December 31,
Per Share Data for a Share Outstanding Throughout Each Period 1997 1996 1995(A)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value at beginning of period .......................... $ 11.49 $ 10.97 $ 10.00
---------- ---------- ----------
Income from investment operations:
Net investment income ........................................ 0.33 0.28 0.19
Net realized and unrealized gains on investments ............. 1.31 1.19 1.61
---------- ---------- ----------
Total from investment operations ................................ 1.64 1.47 1.80
---------- ---------- ----------
Less distributions:
Dividends from net investment income ......................... (0.30) (0.28) (0.19)
Distributions in excess of net investment income ............. (0.15) (0.18) (0.04)
Distributions from net realized gains ........................ (0.86) (0.49) (0.60)
---------- ---------- ----------
Total distributions ............................................. (1.31) (0.95) (0.83)
---------- ---------- ----------
Net asset value at end of period ................................ $ 11.82 $ 11.49 $ 10.97
========== ========== ==========
Total return .................................................... 14.27% 13.41% 18.00%
========== ========== ==========
Net assets at end of period (000's) ............................. $ 36,680 $ 42,579 $ 9,852
========== ========== ==========
Ratio of expenses to average net assets ......................... 0.95% 0.95% 0.95%(B)
Ratio of net investment income to average net assets ............ 2.38% 3.21% 3.02%(B)
Portfolio turnover rate ......................................... 48% 104% 176%
MARKMAN MODERATE ALLOCATION PORTFOLIO o FINANCIAL HIGHLIGHTS
Per Share Data for a Share Outstanding Throughout Each Period
- -----------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period .......................... $ 11.49 $ 11.31 $ 10.00
---------- ---------- ----------
Income from investment operations:
Net investment income ........................................ 0.26 0.18 0.06
Net realized and unrealized gains on investments ............. 1.96 1.08 2.39
---------- ---------- ----------
Total from investment operations ................................ 2.22 1.26 2.45
---------- ---------- ----------
Less distributions:
Dividends from net investment income ......................... (0.26) (0.18) (0.06)
Distributions in excess of net investment income ............. (0.21) (0.14) (0.24)
Distributions from net realized gains ........................ (1.34) (0.76) (0.84)
---------- ---------- ----------
Total distributions ............................................. (1.81) (1.08) (1.14)
---------- ---------- ----------
Net asset value at end of period ................................ $ 11.90 $ 11.49 $ 11.31
========== ========== ==========
Total return .................................................... 19.38% 11.11% 24.50%
========== ========== ==========
Net assets at end of period (000's) ............................. $ 86,388 $ 78,627 $ 38,988
========== ========== ==========
Ratio of expenses to average net assets ......................... 0.95% 0.95% 0.95%(B)
Ratio of net investment income to average net assets ............ 1.96% 1.34% 0.77%(B)
Portfolio turnover rate ......................................... 82% 280% 141%
MARKMAN AGGRESSIVE ALLOCATION PORTFOLIO o FINANCIAL HIGHLIGHTS
Per Share Data for a Share Outstanding Throughout Each Period
- -----------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period .......................... $ 12.26 $ 11.79 $ 10.00
---------- ---------- ----------
Income from investment operations:
Net investment income ........................................ 0.01 0.05 0.01
Net realized and unrealized gains on investments ............. 2.32 1.34 3.11
---------- ---------- ----------
Total from investment operations ................................ 2.33 1.39 3.12
---------- ---------- ----------
Less distributions:
Dividends from net investment income ......................... (0.01) (0.05) (0.01)
Distributions in excess of net investment income ............. (0.19) (0.11) (0.23)
Distributions from net realized gains ........................ (1.65) (0.76) (1.09)
---------- ---------- ----------
Total distributions ............................................. (1.85) (0.92) (1.33)
---------- ---------- ----------
Net asset value at end of period ................................ $ 12.74 $ 12.26 $ 11.79
========== ========== ==========
Total return .................................................... 18.96% 11.72% 31.21%
========== ========== ==========
Net assets at end of period (000's) ............................. $ 84,401 $ 84,329 $ 42,325
========== ========== ==========
Ratio of expenses to average net assets ......................... 0.95% 0.95% 0.95%(B)
Ratio of net investment income to average net assets ........... 0.05% 0.34% 0.15%(B)
Portfolio turnover rate ......................................... 141% 340% 204%
</TABLE>
(A) Represents the period from the initial public offering of shares (January
26, 1995) through December 31, 1995.
(B) Annualized.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
Markman 9
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies
Markman MultiFund Trust (the Trust) is registered under the Investment Company
Act of 1940, as amended (the 1940 Act), as an open-end diversified management
investment company. The Trust was organized as a Massachusetts business trust on
September 7, 1994. The Trust offers three series of shares to investors: the
Markman Conservative Allocation Portfolio, the Markman Moderate Allocation
Portfolio and the Markman Aggressive Allocation Portfolio (collectively, the
Funds). The Trust was capitalized on November 28, 1994, when the Funds'
investment adviser, Markman Capital Management, Inc. (the Adviser), purchased
the initial shares of each Fund at $10.00 per share. The public offering of
shares of the Funds commenced on January 26, 1995. The Trust had no operations
prior to the public offering of shares except for the initial issuance of shares
to the Adviser.
The Markman Conservative Allocation Portfolio seeks to provide current income
and low to moderate growth of capital. The Markman Moderate Allocation Portfolio
seeks growth of capital and a reasonable level of current income. The Markman
Aggressive Allocation Portfolio seeks capital appreciation without regard to
current income.
The following is a summary of the Trust's significant accounting policies:
Securities valuation -- The Funds' portfolio securities are valued as of the
close of business of the regular session of trading on the New York Stock
Exchange (currently 4:00 p.m., Eastern time). Shares of open-end, management
investment companies (mutual funds) in which the Funds invest are valued at
their respective net asset values as determined under the 1940 Act. Such mutual
funds value securities in their portfolios for which market quotations are
readily available at their current market value (generally the last reported
sale price) and all other securities and assets at fair value pursuant to
methods established in good faith by the Board of Trustees or Directors of the
underlying mutual fund. Money market funds in which the Funds also invest
generally value securities in their portfolios on an amortized cost basis, which
approximates market.
Share valuation -- The net asset value per share of each Fund is calculated
daily by dividing the total value of that Fund's assets, less liabilities, by
the number of shares outstanding, rounded to the nearest cent. The offering and
redemption price per share of each Fund are equal to the net asset value per
share.
Investment income -- Dividend income is recorded on the ex-dividend date. For
financial reporting purposes, the Funds record distributions of short-term and
long-term capital gains made by mutual funds in which the Funds invest as
realized gains. For tax purposes, the short-term portion of such distributions
is treated as dividend income by the Funds.
Distributions to shareholders -- Distributions to shareholders arising from each
Fund's net investment income and net realized capital gains, if any, are
distributed at least once each year. Income distributions and capital gain
distributions are determined in accordance with income tax regulations, which
may differ from generally accepted accounting principles.
Security transactions -- Security transactions are accounted for on the trade
date. Securities sold are valued on a specific identification basis.
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles ("GAAP") requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
Federal income tax -- It is each Fund's policy to comply with the special
provisions of the Internal Revenue Code (the Code) available to regulated
investment companies. As provided therein, in any fiscal year in which a Fund so
qualifies and distributes at least 90% of its taxable net income, the Fund (but
not the share- holders) will be relieved of federal income tax on the income
distributed. Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also each Fund's intention to declare as dividends
in each calendar year at least 98% of its net investment income (earned during
the calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
Each of the Funds files a tax return annually using tax accounting methods
required under provisions of the Code which may differ from GAAP, the basis on
which these financial statements are prepared. The differences arise primarily
from the treatment of short-term gain distributions made by mutual funds in
which the Funds invest and the deferral of certain losses under Federal income
tax regulations. Accordingly, the amount of net investment income and net
realized capital gain or loss reported in the financial statements may differ
from that reported in the Fund's tax return and, consequently, the character of
distributions to shareholders reported in the Statements of Changes in Net
Assets and the Financial Highlights may differ from that reported to
shareholders for Federal income tax purposes. As a result of such differences,
reclassifications were made to the components of net assets to conform to
generally accepted accounting principles.
The following information is based upon the federal income tax cost of portfolio
investments as of December 31, 1997:
- --------------------------------------------------------------------------------
Markman Markman Markman
Conservative Moderate Aggressive
Allocation Allocation Allocation
Portfolio Portfolio Portfolio
--------- --------- ---------
Gross unrealized appreciation $ 2,169,609 $ 5,461,259 $ 6,674,117
Gross unrealized depreciation (195,703) (161,374) (880,194)
------------ ------------ ------------
Net unrealized appreciation $ 1,973,906 $ 5,299,885 $ 5,793,923
============ ============ ============
Federal income tax cost of
portfolio investments $ 34,440,318 $ 80,736,947 $ 78,691,760
============ ============ ============
- --------------------------------------------------------------------------------
Markman 10
<PAGE>
NOTES TO FINANCIAL STATEMENTS
2. Investment Transactions
During the year ended December 31, 1997, purchases and proceeds from sales of
portfolio securities, other than short-term investments, amounted to $18,384,163
and $27,753,976, respectively, for the Markman Conservative Allocation
Portfolio, $67,906,523 and $70,940,445, respectively, for the Markman Moderate
Allocation Portfolio, and $115,089,562 and $127,131,897, respectively, for the
Markman Aggressive Allocation Portfolio.
3. Transactions with Affiliates
The Chairman of the Board and President of the Trust is also the President of
Markman Capital Management, Inc. (the Adviser). Certain other trustees and
officers of the Trust are also officers of the Adviser or of Countrywide Fund
Services, Inc. (CFS), the administrative services agent, shareholder servicing
and transfer agent, and accounting services agent for the Trust.
INVESTMENT ADVISORY AGREEMENT
The Funds' investments are managed by the Adviser pursuant to the terms of an
Investment Management Agreement.
Each Fund pays the Adviser an investment management fee, computed and accrued
daily and paid monthly, at an annual rate of .95% of average daily net assets of
each Fund. The Adviser pays all operating expenses of the Funds except brokerage
commissions, taxes, interest, fees and expenses of independent Trustees and any
extraordinary expenses. In addition, the Adviser is contractually obligated to
reduce its investment management fee in an amount equal to each Fund's allocable
portion of the fees and expenses of the Trust's independent Trustees.
ADMINISTRATION, ACCOUNTING AND TRANSFER AGENCY AGREEMENT
Under the terms of the Administration, Accounting, and Transfer Agency Agreement
between the Trust, the Adviser and CFS, CFS supplies non-investment related
statistical and research data, internal regulatory compliance services and
executive and administrative services for each of the Funds. CFS supervises the
preparation of tax returns for the Funds, reports to shareholders of the Funds,
reports to and filings with the Securities and Exchange Commission and state
securities commissions and materials for meetings of the Board of Trustees. In
addition, CFS maintains the records of each shareholder's account, answers
shareholders' inquiries concerning their accounts, processes purchases and
redemptions of each Fund's shares, acts as dividend and distribution disbursing
agent and performs other shareholder service functions. CFS also calculates the
daily net asset value per share and maintains the financial books and records of
each Fund. For the performance of these services, the Adviser, out of its
investment management fee, pays CFS a monthly base fee, an asset based fee, and
a fee based on the number of shareholder accounts. In addition, the Adviser pays
out-of-pocket expenses including but not limited to, postage and supplies.
4. Bank Loans
The Trust has an unsecured $10,000,000 bank line of credit; borrowings under
this arrangement bear interest at a rate determined by the bank at the time of
borrowing. For the year ending December 31, 1997, the Trust had no borrowings on
this line of credit. No compensating balances are required.
5. Fund Share Transactions
Proceeds and payments from capital share transactions as shown in the Statements
of Changes in Net Assets are the result of the following capital share
transactions for the years ended December 31, 1997 and December 31, 1996.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
MARKMAN CONSERVATIVE MARKMAN MODERATE MARKMAN AGGRESSIVE
ALLOCATION PORTFOLIO ALLOCATION PORTFOLIO ALLOCATION PORTFOLIO
Year Ended, Year Ended, Year Ended, Year Ended, Year Ended, Year Ended,
Dec. 31, 1997 Dec. 31, 1996 Dec. 31, 1997 Dec. 31, 1996 Dec. 31, 1997 Dec. 31, 1996
<S> <C> <C> <C> <C> <C> <C>
Shares sold 1,007,092 4,224,322 1,475,542 5,984,900 1,394,595 6,577,451
Shares issued in reinvestment
of distributions to shareholders 302,747 278,484 949,137 581,306 822,743 472,475
Shares redeemed (1,912,551) (1,694,000) (2,009,044) (3,169,616) (2,470,930) (3,759,415)
---------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease) in
shares outstanding (602,712) 2,808,806 415,635 3,396,590 (253,592) 3,290,511
Shares outstanding, beginning of year 3,706,796 897,990 6,842,584 3,445,994 6,879,341 3,588,830
---------- ---------- ---------- ---------- ---------- ----------
Shares outstanding, end of year 3,104,084 3,706,796 7,258,219 6,842,584 6,625,749 6,879,341
---------- ---------- ---------- ---------- ---------- ----------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Markman 11
<PAGE>
To the Shareholders and Board of Trustees of the Markman MultiFund Trust:
We have audited the accompanying statements of assets and liabilities of the
Markman Conservative Allocation Portfolio, the Markman Moderate Allocation
Portfolio and the Markman Aggressive Allocation Portfolio of Markman MultiFund
Trust (a Massachusetts business trust), including the portfolios of investments,
as of December 31, 1997, and the related statements of operations, the
statements of changes in net assets, and the financial highlights for the
periods indicated thereon. These financial statements and financial highlights
are the responsibility of the Trust's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of December 31, 1997, by
correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Markman Conservative Allocation Portfolio, the Markman Moderate Allocation
Portfolio and the Markman Aggressive Allocation Portfolio as of December 31,
1997, the results of their operations, the changes in their net assets, and
their financial highlights for the periods indicated thereon, in conformity with
generally accepted accounting principles.
/s/ Arthur Andersen LLP
Cincinnati, Ohio,
January 8, 1998
- --------------------------------------------------------------------------------
Markman 12
<PAGE>
INVESTING IN THE MARKMAN MULTIFUNDS
- --------------------------------------------------------------------------------
Investment forms may be ordered by
calling 1-800-707-2771
These forms are available:
o Account Application
o IRA Application
o IRA Transfer Request
o Dollar Cost Averaging Application
o Systematic Withdrawal Plan Request
o Automatic Investment Request
o Company Retirement Account Application
o Company Retirement Plan Prototype [includes Profit Sharing, Money Purchase,
401(k)]
o 403(b) Plan and Application
- --------------------------------------------------------------------------------
The minimum direct investment is $25,000. If you want to invest less than
$25,000, you may purchase The Markman MultiFunds through: Charles Schwab &
Company (1-800-266-5623), Jack White and Company (1-800-323-3263), Fidelity
Investments (1-800-544-7558), and Waterhouse Securities (1-800-934-4443), among
others. There is no transaction fee when you purchase the Markman MultiFunds
through these discount brokers.
- --------------------------------------------------------------------------------
For additional forms or answers to any questions just contact The Markman
MultiFunds (between the hours of 8:30 AM and 7:30 PM EST): Toll-free:
1-800-707-2771
- --------------------------------------------------------------------------------
PORTFOLIO/STRATEGY UPDATE
To hear Bob Markman's weekly market overview and
MultiFund activity report. 1-800-975-5463
- --------------------------------------------------------------------------------
PROSPECTUS
For copies of the Markman Prospectus. 1-800-395-4848
- --------------------------------------------------------------------------------
PRICELINE
For up-to-the-minute net asset values and account values. 1-800-536-8679
- --------------------------------------------------------------------------------
HELPLINE
For an application form, for assistance in completing as
application, or for general administrative questions. 1-800-707-2771
- --------------------------------------------------------------------------------
ONLINE
Check for net asset values and more! www.markman.com
- --------------------------------------------------------------------------------
Investment Adviser Shareholder Services
Markman Capital Management, Inc. c/o Countrywide Fund Services, Inc.
6600 France Ave. So. 312 Walnut Street, 21st Floor
Minneapolis, Minnesota 55435 Cincinnati, Ohio 45202-3874
Telephone: 612-920-4848 Telephone: 513-629-2070
Toll-free: 1-800-395-4848 Toll-free: 1-800-707-2771
Authorized for distribution only if preceded or accompanied by a current
prospectus.
- --------------------------------------------------------------------------------
Markman 13
<PAGE>
FIRST CLASS
6600 France Avenue South
Minneapolis, Minnesota 55435
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> MARKMAN AGGRESSIVE ALLOCATION PORTFOLIO
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 78,340,791
<INVESTMENTS-AT-VALUE> 84,485,683
<RECEIVABLES> 221,326
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 84,707,009
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 305,843
<TOTAL-LIABILITIES> 305,843
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 78,586,017
<SHARES-COMMON-STOCK> 6,625,749
<SHARES-COMMON-PRIOR> 6,879,341
<ACCUMULATED-NII-CURRENT> 21,208
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 350,951
<ACCUM-APPREC-OR-DEPREC> 6,144,892
<NET-ASSETS> 84,401,166
<DIVIDEND-INCOME> 839,034
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 793,634
<NET-INVESTMENT-INCOME> 45,400
<REALIZED-GAINS-CURRENT> 10,311,215
<APPREC-INCREASE-CURRENT> 3,812,227
<NET-CHANGE-FROM-OPS> 14,168,842
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 24,224
<DISTRIBUTIONS-OF-GAINS> 9,531,600
<DISTRIBUTIONS-OTHER> 1,125,463
<NUMBER-OF-SHARES-SOLD> 1,394,595
<NUMBER-OF-SHARES-REDEEMED> 2,470,930
<SHARES-REINVESTED> 822,743
<NET-CHANGE-IN-ASSETS> 72,268
<ACCUMULATED-NII-PRIOR> 32
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<GROSS-EXPENSE> 793,634
<AVERAGE-NET-ASSETS> 83,540,581
<PER-SHARE-NAV-BEGIN> 12.26
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> 2.32
<PER-SHARE-DIVIDEND> .01
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> MARKMAN MODERATE ALLOCATION PORTFOLIO
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 80,690,145
<INVESTMENTS-AT-VALUE> 86,036,832
<RECEIVABLES> 591,379
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 86,628,211
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 239,918
<TOTAL-LIABILITIES> 239,918
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 81,088,405
<SHARES-COMMON-STOCK> 7,258,219
<SHARES-COMMON-PRIOR> 6,842,584
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 46,799
<ACCUM-APPREC-OR-DEPREC> 5,346,687
<NET-ASSETS> 86,388,293
<DIVIDEND-INCOME> 2,444,243
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 798,687
<NET-INVESTMENT-INCOME> 1,645,556
<REALIZED-GAINS-CURRENT> 9,916,429
<APPREC-INCREASE-CURRENT> 3,184,691
<NET-CHANGE-FROM-OPS> 14,746,676
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,645,585
<DISTRIBUTIONS-OF-GAINS> 8,443,248
<DISTRIBUTIONS-OTHER> 1,325,397
<NUMBER-OF-SHARES-SOLD> 1,475,542
<NUMBER-OF-SHARES-REDEEMED> 2,009,044
<SHARES-REINVESTED> 949,137
<NET-CHANGE-IN-ASSETS> 7,761,484
<ACCUMULATED-NII-PRIOR> 29
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 194,583
<GROSS-ADVISORY-FEES> 784,937
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 798,687
<AVERAGE-NET-ASSETS> 84,092,773
<PER-SHARE-NAV-BEGIN> 11.49
<PER-SHARE-NII> 0.26
<PER-SHARE-GAIN-APPREC> 1.96
<PER-SHARE-DIVIDEND> .26
<PER-SHARE-DISTRIBUTIONS> 1.55
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<PER-SHARE-NAV-END> 11.90
<EXPENSE-RATIO> .95
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 3
<NAME> MARKMAN CONSERVATIVE ALLOCATION PORTFOLIO
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 34,440,318
<INVESTMENTS-AT-VALUE> 36,414,224
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<TOTAL-LIABILITIES> 92,721
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 34,617,111
<SHARES-COMMON-STOCK> 3,104,084
<SHARES-COMMON-PRIOR> 3,706,796
<ACCUMULATED-NII-CURRENT> 89,174
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<ACCUM-APPREC-OR-DEPREC> 1,973,906
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<DIVIDEND-INCOME> 1,291,468
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 368,256
<NET-INVESTMENT-INCOME> 923,212
<REALIZED-GAINS-CURRENT> 2,916,123
<APPREC-INCREASE-CURRENT> 1,268,051
<NET-CHANGE-FROM-OPS> 5,107,386
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 835,373
<DISTRIBUTIONS-OF-GAINS> 2,379,863
<DISTRIBUTIONS-OTHER> 416,485
<NUMBER-OF-SHARES-SOLD> 1,007,092
<NUMBER-OF-SHARES-REDEEMED> 1,912,551
<SHARES-REINVESTED> 302,747
<NET-CHANGE-IN-ASSETS> (5,898,941)
<ACCUMULATED-NII-PRIOR> 1,335
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 368,256
<AVERAGE-NET-ASSETS> 38,747,626
<PER-SHARE-NAV-BEGIN> 11.49
<PER-SHARE-NII> .33
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</TABLE>
