-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V3fX34wdeDd9lvLRxChvJKXNrpsgGvqfum/mZ32gEVAJ8BwfLX2KVreFIpVVV8Ij Swmv4wFJ0GdWleTcV67Ayw== 0000898531-06-000129.txt : 20060411 0000898531-06-000129.hdr.sgml : 20060411 20060411163854 ACCESSION NUMBER: 0000898531-06-000129 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20060131 FILED AS OF DATE: 20060411 DATE AS OF CHANGE: 20060411 EFFECTIVENESS DATE: 20060411 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MDT Funds CENTRAL INDEX KEY: 0001176358 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-21141 FILM NUMBER: 06753991 BUSINESS ADDRESS: STREET 1: 125 CAMBRIDGE PARK DRIVE CITY: CAMBRIDGE STATE: MA ZIP: 02140 BUSINESS PHONE: 617-234-2200 MAIL ADDRESS: STREET 1: 125 CAMBRIDGE PARK DRIVE CITY: CAMBRIDGE STATE: MA ZIP: 02140 FORMER COMPANY: FORMER CONFORMED NAME: OPTIMUM Q FUNDS DATE OF NAME CHANGE: 20020626 0001176358 S000005263 All Cap Core Fund C000014371 Institutional QIACX C000014372 A QAACX C000014373 C QCACX 0001176358 S000005264 Tax Aware/All Cap Core Fund C000014374 Institutional QITAX C000014375 A QATAX C000014376 C QCTAX 0001176358 S000005265 Large Cap Growth C000014377 Institutional QILGX C000014378 A QALGX C000014379 C QCLGX 0001176358 S000005266 Mid Cap Growth C000014380 Institutional QIMGX C000014381 A QAMGX C000014382 C QCMGX 0001176358 S000005267 Small Cap Core C000014383 Institutional QISCX C000014384 A QASCX C000014385 C QCSCX 0001176358 S000005268 Small Cap Growth C000014386 Institutional QISGX C000014387 A QASGX C000014388 C QCSGX 0001176358 S000005269 Small Cap Value C000014389 Institutional QISVX C000014390 A QASVX C000014391 C QCSVX 0001176358 S000005270 Balanced Growth C000014392 Institutional QIBGX C000014393 A QABGX C000014394 C QCBGX 0001176358 S000005271 Short-Term Bond C000014395 Institutional QISBX C000014396 A QASBX C000014397 C QCSBX N-CSRS 1 mdtf-ncsrse.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number: 811-21141 MDT FUNDS (Exact name of registrant as specified in charter) 125 CAMBRIDGEPARK DRIVE CAMBRIDGE, MA 02140 (Address of principal executive offices) (Zip code) JOHN SHERMAN 125 CAMBRIDGEPARK DRIVE CAMBRIDGE, MA 02140 (Name and address of agent for service) (617) 234-2200 Registrant's telephone number, including area code Date of fiscal year end: JULY 31 Date of reporting period: JANUARY 31, 2006 ITEM 1. REPORT TO STOCKHOLDERS. - ------------------------------ (MDT FUNDS LOGO) Semi-Annual Report January 31, 2006 MDT All Cap Core Fund MDT Tax Aware/All Cap Core Fund MDT Large Cap Growth Fund MDT Mid Cap Growth Fund MDT Small Cap Core Fund MDT Small Cap Growth Fund MDT Small Cap Value Fund MDT Balanced Growth Fund MDT Short-Term Bond Fund TABLE OF CONTENTS Letter From the President 1 All Cap Core Fund 2 Tax Aware/ All Cap Core Fund 8 Large Cap Growth Fund 13 Mid Cap Growth Fund 17 Small Cap Core Fund 21 Small Cap Growth Fund 27 Small Cap Value Fund 32 Balanced Growth Fund 36 Short-Term Bond Fund 45 Fund Expense Examples 51 Statements of Assets and Liabilities 54 Statements of Operations 56 Statements of Changes in Net Assets 58 Financial Highlights 63 Notes to Financial Statements 76 Additional Information 88 Board Considerations in Approving the Continuation of the Investment Advisory Agreement 89 CAUTIONARY NOTE ON ANALYSES, OPINIONS AND OUTLOOKS: In this report we may offer - --------------------------------------------------- analysis and opinions on the performance of individual securities, companies, industries, sectors, markets, interest rates and government policies, including predictions, forecasts and outlooks regarding possible future events. These can generally be identified as such because the context of the statements may include such words as "believe," "should," "will," "expects," "anticipates," "hopes," and words of similar effect. These statements reflect the Adviser's good faith beliefs and judgments and involve risks and uncertainties, including risk that the analyses, opinions, and outlooks are or will prove to be inaccurate. It is inherently difficult to correctly assess and explain the performance of particular securities, sectors, markets, interest rate movements, governmental actions or general economic trends and conditions, and many unforeseen factors contribute to the performance of the MDT Funds. Investors are, therefore, cautioned not to place undue reliance on subjective judgments contained in this report. Letter From the President January 2006 Dear Shareholder: The six-month period ended January 31, 2006 might be characterized as a period of transition for the economy and the markets in which we invest. The economy showed signs of cooling off as evidenced by a reduction in the rate of GDP growth in the fourth quarter and the first tangible indications of a slowing housing market. Towards the end of the period, fixed income markets began to reflect a declining growth outlook as the Treasury yield curve flattened, with rates on shorter-term instruments equaling those of longer-term issues. Perhaps most noteworthy, the storied tenure of Alan Greenspan as Chairman of the Federal Reserve Board came to an end, introducing a new element of uncertainty. Domestic equity markets managed to generate positive results, but performance over the near term will likely be determined by how well the economy weathers these potentially negative variables. This period also brought with it significant changes to our Fund Family. These changes include the introduction of six new strategies and an expansion of our existing offerings to include A, C and Institutional share classes for each Fund. The initial performance results of our new strategies have been very positive. As we have discussed previously, the broadening of our product line has made our Funds more attractive to potential distribution partners. We have already established relationships with several major mutual fund platforms and expect to significantly expand the availability of our Funds through these channels during the upcoming year. The meaningful asset growth we expect, and in fact have already seen, should help to reduce each Fund's expense ratio and therefore improve the returns for all investors. We are thankful for your support and interested in any thoughts or questions you have about this report, our strategies or our Fund Family in general. As always, please feel free to call us at 1-866-784-6867 or visit our web site at www.mdtfunds.com. Best regards, /s/R. Schorr Berman R. Schorr Berman President For this letter and the discussions that follow, please refer to the report section for standardized performance, index information and portfolio holdings. Portfolio holdings and sector allocations are subject to change and are not recommendations to buy or sell any security. This material must be preceded or accompanied by a current prospectus. Mutual fund investing involves risk; principal loss is possible. Quasar Distributors, LLC, Distributor 03/06 MDT FUNDS--ALL CAP CORE FUND MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE The Fund returned 7.62% for the six months ended January 31, 2006, outperforming both the 5.35% return for the Russell 3000 Index and the 7.18% result for the Lipper Multi-Cap Core Funds Index. After struggling with the uncertain economic impact of the severe hurricanes in late summer and early fall, the market rallied through the end of the year and the first month of 2006. We have often mentioned our expectation that through superior stock selection the strategy can outperform in differing market environments. We are again pleased that this trait was demonstrated through the Fund's positive relative performance over this period, particularly in light of the market's uneven path. Compared to its benchmark, the Russell 3000 Index, the Fund was overweight value stocks throughout the period. Value stocks significantly outperformed their growth counterparts, providing much of the Fund's positive relative performance. The Fund was overweight large and mid capitalization names, while remaining underweight in small cap stocks. While large, mid, and small cap stocks all contributed positively, large caps provided most of the relative outperformance during the period. Investments in Financial Services and Basic Industries contributed positively, while investments in Information Technology contributed negatively. J.P. Morgan & Co., Inc. and Merrill Lynch & Co., Inc. helped Financial Services most notably, while Nucor Corporation helped Basic Industries. Texas Instruments, Inc. led decliners in Information Technology. The Fund continues to significantly overweight value over growth stocks, while being overweight mid cap and underweight in large and small capitalization names. The largest sector overweights are in Energy and Financial Services, while Consumer Cyclicals, Health Care and Consumer Staples lead the most underweight. Although some uncertainty clouds the economic outlook, we remain optimistic about the prospects for the Fund and will continue to strive for strong risk-adjusted returns through disciplined, bottom-up stock selection. The Fund may also invest in small- and medium-capitalization companies, which tend to have limited liquidity and greater price volatility than large- capitalization companies. As a result, their performance can be more volatile and they face greater risk of business failure, which could increase the volatility of the Fund's portfolio. SECTOR BREAKDOWN (as % of investments) Basic Industries 2.4% Capital Goods 6.2% Consumer Cyclicals 6.9% Consumer Durables 4.4% Consumer Staples 2.0% Energy 18.8% Financial Services 37.0% Healthcare 7.3% Information Technology 11.6% Transportation 1.4% Public Utilities 2.0% MDT FUNDS--ALL CAP CORE FUND MDT All Cap Core Fund - Lipper Multi-Cap Date Institutional Class Russell 3000 Index Core Funds Index ---- ------------------- ------------------ ---------------- 10/1/2002 $10,000 $10,000 $10,000 1/31/2003 $10,534 $10,538 $10,453 7/31/2003 $11,775 $12,454 $12,268 1/31/2004 $13,993 $14,453 $14,289 7/31/2004 $13,870 $14,112 $13,932 1/31/2005 $15,436 $15,427 $15,335 7/31/2005 $16,952 $16,498 $16,433 1/31/2006 $18,232 $17,380 $17,613 MDT All Cap Core Fund--Institutional Class This hypothetical chart assumes an initial gross investment of $10,000 made on 10/1/02 (commencement of operations). Returns include the reinvestment of all dividends. TOTAL RETURN FOR THE PERIODS ENDED JANUARY 31, 2006 ANNUALIZED SIX ONE SINCE INCEPTION MONTHS YEAR (OCTOBER 1, 2002) ------ ---- ----------------- MDT All Cap Core Fund--Institutional Class 7.62% 18.19% 19.73% Russell 3000 Index 5.35% 12.67% 18.02% Lipper Multi-Cap Core Funds Index 7.18% 14.85% 18.49% Performance data quoted represents past performance and is no guarantee of future results. The principal value and investment return will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month-end may be obtained by calling 1-866-784-6867. Investment performance reflects contractual fee waivers in effect. In the absence of such waivers, total return would be reduced. The Advisor can recapture expenses or fees it has waived within a three year period. Please refer to the prospectus for details. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The Fund may also invest in small- and medium-capitalization companies, which tend to have limited liquidity and greater price volatility than large- capitalization companies. As a result, their performance can be more volatile and they face greater risk of business failure, which could increase the volatility of the Fund's portfolio. The Russell 3000 Index is an unmanaged index that measures the performance of the 3,000 largest U.S. companies, based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. The Lipper Multi-Cap Core Funds Index is the average of the 30 largest funds in the Lipper Multi-Cap Core Funds category. These funds, by portfolio practice, invest in a variety of market capitalization ranges without concentrating 75% of their equity assets in any one market capitalization range over an extended period of time. Multi-cap funds typically have between 25% to 75% of their assets invested in companies with market capitalizations (on a three-year weighted average basis) above 300% of the dollar weighted median market capitalization of the middle 1,000 securities of the S&P SuperComposite 1500 Index. Multi-cap Core funds have more latitude in the companies in which they invest. These Funds typically have an average price-to-earnings ratio, price-to- book ratio and three-year sales-per-share growth value, compared to the S&P SuperComposite 1500 Index. One cannot invest directly in an index. MDT FUNDS--ALL CAP CORE FUND SCHEDULE OF INVESTMENTS JANUARY 31, 2006 (UNAUDITED) SHARES VALUE ------ ----- COMMON STOCKS - 96.63% AEROSPACE & DEFENSE - 1.74% 1,300 Alliant Techsystems Inc.* $ 100,750 16,900 Honeywell International Inc. 649,298 2,100 Precision Castparts Corporation 104,895 6,900 Raytheon Company 282,693 2,400 Rockwell Collins, Inc. 112,608 9,300 United Technologies Corporation 542,841 ------------ 1,793,085 AIR FREIGHT & LOGISTICS - 0.19% 4,300 Ryder System, Inc. 192,210 AIRLINES - 0.61% 38,500 Southwest Airlines Co. 633,710 BEVERAGES - 0.07% 2,900 PepsiAmericas, Inc. 71,021 BIOTECHNOLOGY - 5.12% 43,200 Amgen Inc.* 3,148,848 24,100 Genentech, Inc.* 2,070,672 1,200 Techne Corporation* 68,220 ------------ 5,287,740 CAPITAL MARKETS - 8.31% 1,100 GFI Group Inc.* 60,049 16,600 The Goldman Sachs Group, Inc. 2,344,750 44,800 Merrill Lynch & Co., Inc. 3,363,136 45,700 Morgan Stanley 2,808,265 ------------ 8,576,200 CHEMICALS - 0.12% 1,900 Sigma-Aldrich Corporation 123,272 COMMERCIAL BANKS - 5.86% 13,800 AmSouth Bancorporation 381,018 10,600 Comerica Incorporated 587,982 10,400 Fifth Third Bancorp 390,728 4,100 First BanCorp. 52,398 1,800 Huntington Bancshares Incorporated 41,760 31,700 KeyCorp 1,121,863 2,200 M&T Bank Corporation 238,260 33,900 National City Corporation 1,158,702 5,900 Regions Financial Corporation 195,762 7,000 SunTrust Banks, Inc. 500,150 2,600 UnionBanCal Corporation 174,434 22,100 Wachovia Corporation 1,211,743 ------------ 6,054,800 COMMERCIAL SERVICES & SUPPLIES - 1.73% 2,100 Adesa, Inc. 53,760 1,400 Administaff, Inc. 60,256 500 The Corporate Executive Board Company 42,070 2,600 Equifax Inc. 99,632 3,200 Manpower Inc. 172,256 4,700 Monster Worldwide Inc.* 200,502 4,100 Republic Services, Inc. 155,185 8,800 Robert Half International Inc. 321,464 800 Stericycle, Inc.* 47,816 20,100 Waste Management, Inc. 634,758 ------------ 1,787,699 COMMUNICATIONS EQUIPMENT - 3.73% 10,200 Juniper Networks, Inc.* 184,926 76,500 QUALCOMM Incorporated 3,668,940 ------------ 3,853,866 COMPUTERS & PERIPHERALS - 2.49% 65,800 Hewlett-Packard Company 2,051,644 6,400 Lexmark International, Inc.* 310,848 3,100 Network Appliance, Inc.* 96,720 2,900 QLogic Corporation* 115,043 ------------ 2,574,255 CONSTRUCTION & ENGINEERING - 0.05% 600 EMCOR Group, Inc.* 49,212 CONSTRUCTION MATERIALS - 0.22% 3,700 Lafarge North America Inc. 227,994 CONSUMER FINANCE - 0.85% 7,100 AmeriCredit Corp.* 204,196 12,100 SLM Corporation 677,116 ------------ 881,312 CONTAINERS & PACKAGING - 0.09% 2,000 Temple-Inland Inc. 93,800 DIVERSIFIED FINANCIAL SERVICES - 5.14% 200 Chicago Mercantile Exchange Holdings Inc. 84,650 17,400 CIT Group Inc. 928,116 101,300 JPMorgan Chase & Co. 4,026,675 4,300 Moody's Corporation 272,276 ------------ 5,311,717 DIVERSIFIED TELECOMMUNICATION SERVICES - 0.58% 20,900 BellSouth Corporation 601,293 ELECTRIC UTILITIES - 0.89% 5,000 DTE Energy Company 211,000 5,200 Edison International 227,864 10,300 PG&E Corporation 384,293 2,100 Progress Energy, Inc. 91,602 ------------ 914,759 ELECTRICAL EQUIPMENT - 0.29% 800 Cooper Industries, Ltd. 65,320 3,600 Rockwell Automation, Inc. 237,852 ------------ 303,172 ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.84% 9,200 Ingram Micro Inc.* 178,020 13,300 Jabil Circuit, Inc.* 537,320 4,600 National Instruments Corporation 152,214 ------------ 867,554 ENERGY EQUIPMENT & SERVICES - 1.85% 22,600 BJ Services Company 915,074 3,000 Grant Prideco, Inc.* 150,270 900 Oceaneering International, Inc.* 53,469 2,300 Oil States International, Inc.* 94,070 14,300 Smith International, Inc. 643,500 1,200 W-H Energy Services, Inc.* 57,936 ------------ 1,914,319 FOOD PRODUCTS - 0.82% 1,900 Archer-Daniels-Midland Company 59,850 600 Bunge Limited 35,376 8,000 General Mills, Inc. 388,880 5,000 The Hershey Company 256,000 4,300 Pilgrim's Pride Corporation 104,662 ------------ 844,768 HEALTH CARE EQUIPMENT & SUPPLIES - 0.61% 1,100 Dade Behring Holdings, Inc. 43,043 2,500 DENTSPLY International Inc. 134,250 1,800 Intuitive Surgical, Inc.* 247,770 1,000 Kyphon Inc.* 41,570 3,900 Waters Corporation* 163,605 ------------ 630,238 HEALTH CARE PROVIDERS & SERVICES - 0.99% 800 DaVita, Inc.* 43,800 5,100 Laboratory Corporation of America Holdings* 299,115 3,100 Pharmaceutical Product Development, Inc. 214,458 6,100 WellPoint Inc.* 468,480 ------------ 1,025,853 HOTELS RESTAURANTS & LEISURE - 1.72% 1,000 Boyd Gaming Corporation 45,200 1,400 Choice Hotels International, Inc. 66,542 10,400 International Game Technology 372,112 1,000 Landry's Restaurants, Inc. 30,640 2,000 Marriott International, Inc. - Class A* 133,280 1,700 Ruby Tuesday, Inc. 48,637 21,800 Starbucks Corporation* 691,060 7,800 Yum! Brands, Inc. 385,866 ------------ 1,773,337 HOUSEHOLD DURABLES - 4.29% 2,900 American Greetings Corporation 59,189 3,600 Beazer Homes USA, Inc. 262,224 9,900 Centex Corporation 706,761 26,000 D.R. Horton, Inc. 970,320 2,100 Furniture Brands International, Inc. 50,526 3,300 Harman International Industries, Incorporated 363,000 10,900 Lennar Corporation - Class A 681,904 21,600 Pulte Homes, Inc. 861,840 2,400 The Ryland Group, Inc. 173,664 4,200 Standard-Pacific Corp. 163,380 2,900 WCI Communities, Inc.* 79,866 600 William Lyon Homes, Inc.* 61,626 ------------ 4,434,300 HOUSEHOLD PRODUCTS - 1.08% 6,100 The Clorox Company 365,085 13,600 Colgate-Palmolive Company 746,504 ------------ 1,111,589 INDUSTRIAL CONGLOMERATES - 1.23% 17,400 3M Co. 1,265,850 INSURANCE - 13.05% 40,450 The Allstate Corporation 2,105,423 4,300 AMBAC Financial Group, Inc. 330,283 4,200 American Financial Group, Inc. 158,004 3,300 American International Group, Inc. 216,018 1,400 AmerUs Group Co. 85,918 9,800 Assurant, Inc. 450,016 13,300 The Chubb Corporation 1,254,855 1,400 The Commerce Group, Inc. 75,460 1,400 Genworth Financial Inc. 45,864 24,300 Hartford Financial Services Group, Inc. 1,998,189 1,500 Horace Mann Educators Corporation 29,385 1,600 LandAmerica Financial Group, Inc. 105,568 5,700 Loews Corporation 562,533 6,100 MBIA Inc. 375,516 3,100 Mercury General Corporation 174,747 51,500 Metlife, Inc. 2,583,240 3,800 Nationwide Financial Services, Inc. - Class A 161,728 1,100 Protective Life Corporation 49,445 2,500 Reinsurance Group of America, Incorporated 121,250 8,000 SAFECO Corporation 418,000 1,400 Selective Insurance Group, Inc. 81,200 28,400 The St. Paul Travelers Companies, Inc. 1,288,792 2,800 StanCorp Financial Group, Inc. 139,300 1,500 State Auto Financial Corporation 57,705 1,200 Stewart Information Services Corporation 64,140 1,700 Torchmark Corporation 95,370 2,100 UnumProvident Corporation 42,693 8,250 W.R. Berkley Corporation 407,550 ------------ 13,478,192 INTERNET & CATALOG RETAIL - 0.27% 4,650 Coldwater Creek Inc.* 94,860 6,400 IAC/InterActiveCorp* 185,728 ------------ 280,588 INTERNET SOFTWARE & SERVICES - 0.10% 1,600 aQuantive, Inc.* 41,616 900 Websense, Inc.* 59,337 ------------ 100,953 IT SERVICES - 0.77% 2,400 Affiliated Computer Services, Inc.* 150,240 1,300 Alliance Data Systems Corporation* 54,925 3,700 Computer Sciences Corporation* 187,590 6,200 Fiserv, Inc.* 272,676 1,500 Global Payments Inc. 76,395 2,000 VeriFone Holdings, Inc.* 51,040 ------------ 792,866 MACHINERY - 1.67% 15,100 Deere & Company 1,083,576 6,200 Joy Global Inc. 335,048 4,400 PACCAR Inc 306,240 ------------ 1,724,864 MARINE - 0.05% 1,000 Kirby Corporation* 56,130 MEDIA - 0.71% 900 John Wiley & Sons, Inc. 34,110 6,600 Omnicom Group Inc. 539,814 4,900 Univision Communications Inc. - Class A* 156,016 ------------ 729,940 METALS & MINING - 2.35% 1,000 Carpenter Technology Corporation 90,560 4,600 Commercial Metals Company 217,718 9,800 Nucor Corporation 825,454 2,200 Oregon Steel Mills, Inc.* 90,574 6,800 Peabody Energy Corporation 676,668 3,200 Ryerson Inc. 98,816 1,500 Schnitzer Steel Industries, Inc. - Class A 50,160 3,500 Steel Dynamics, Inc. 162,470 2,800 United States Steel Corporation 167,300 3,200 USEC Inc. 48,928 ------------ 2,428,648 MULTILINE RETAIL - 0.44% 4,600 Family Dollar Stores, Inc. 110,170 1,200 Federated Department Stores, Inc. 79,956 5,000 Saks Incorporated* 96,550 1,400 Sears Holdings Corporation* 170,016 ------------ 456,692 MULTI-UTILITIES & UNREGULATED POWER - 0.41% 4,000 National Fuel Gas Company 131,600 4,000 ONEOK, Inc. 113,040 9,200 Reliant Energy Inc.* 93,104 1,200 SCANA Corporation* 48,204 700 Sempra Energy 33,635 ------------ 419,583 NATIONAL COMMERCIAL BANKS - 0.03% 2,400 NewAlliance Bancshares, Inc. 34,944 OIL & GAS - 16.04% 8,000 Amerada Hess Corporation 1,238,400 20,700 Anadarko Petroleum Corporation 2,231,874 28,300 Apache Corporation 2,137,499 80,100 ChevronTexaco Corporation 4,756,338 12,200 Exxon Mobil Corporation 765,550 5,500 Kerr-McGee Corporation 607,145 19,000 Marathon Oil Corporation 1,460,530 7,800 Newfield Exploration Company* 408,720 23,300 Occidental Petroleum Corporation 2,276,643 2,900 OMI Corporation 50,924 2,200 Pioneer Natural Resources Company 116,820 5,100 Pogo Producing Company 305,949 1,800 Stone Energy Corporation* 90,018 2,300 Swift Energy Company* 113,666 ------------ 16,560,076 PAPER & FOREST PRODUCTS - 0.22% 7,700 Louisiana-Pacific Corporation 226,765 PHARMACEUTICALS - 0.39% 8,600 Forest Laboratories, Inc.* 398,008 ROAD & RAIL - 0.41% 1,800 Arkansas Best Corporation 77,058 3,600 Burlington Northern Santa Fe Corporation 288,432 2,400 Swift Transportation Co., Inc.* 56,712 ------------ 422,202 SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT - 2.72% 10,700 Altera Corporation* 206,617 2,600 Freescale Semiconductor Inc.* 65,650 18,000 Linear Technology Corporation 669,780 15,900 Marvell Technology Group Ltd.* 1,087,878 4,300 Maxim Integrated Products, Inc.* 176,472 1,200 Microsemi Corporation* 36,528 4,600 Novellus Systems, Inc.* 130,410 6,800 NVIDIA Corporation* 305,728 1,900 OmniVision Technologies, Inc.* 47,937 2,800 Texas Instruments Incorporated 81,844 ------------ 2,808,844 SOFTWARE - 0.64% 5,100 Autodesk, Inc. 207,009 1,100 Fair Isaac Corporation 48,752 500 Quality Systems, Inc. 44,250 11,200 Red Hat, Inc.* 324,240 1,200 TALX Corporation 37,608 ------------ 661,859 SPECIALTY RETAIL - 1.85% 2,700 Borders Group, Inc. 66,474 6,600 Chico's FAS, Inc.* 287,496 1,000 The Children's Place Retail Stores, Inc.* 43,790 1,600 Circuit City Stores, Inc. 40,336 34,500 The Gap, Inc. 624,105 2,500 Guesso, Inc.* 106,075 1,400 Hibbett Sporting Goods, Inc.* 42,910 1,600 Select Comfort Corporation* 44,160 7,000 Staples, Inc. 165,970 15,400 The TJX Companies, Inc. 393,162 700 Weight Watchers International, Inc.* 32,928 2,400 Zale Corporation* 58,824 ------------ 1,906,230 TEXTILES, APPAREL & LUXURY GOODS - 0.34% 1,700 Carter's, Inc.* 115,583 4,600 Coach, Inc.* 165,370 1,300 Columbia Sportswear Company* 67,145 ------------ 348,098 THRIFTS & MORTGAGE FINANCE - 2.21% 8,025 Astoria Financial Corporation 231,120 900 Corus Bankshares, Inc.* 57,789 1,800 Downey Financial Corp. 117,864 1,300 FirstFed Financial Corp.* 81,510 3,800 Fremont General Corporation 93,100 10,000 Golden West Financial Corporation 706,200 6,300 MGIC Investment Corporation 415,863 5,400 The PMI Group, Inc. 233,442 6,100 Radian Group Inc. 349,103 ------------ 2,285,991 TRADING COMPANIES & DISTRIBUTORS - 0.40% 6,200 Fastenal Company 236,530 1,800 MSC Industrial Direct Co., Inc. - Class A 80,874 1,300 Watsco, Inc. 91,962 ------------ 409,366 WIRELESS TELECOMMUNICATION SERVICES - 0.05% 2,200 Syniverse Holdings Inc.* 52,822 ------------ TOTAL COMMON STOCKS (COST $87,854,938) 99,782,586 PRINCIPAL AMOUNT - --------- SHORT TERM INVESTMENTS - 4.30% UNITED STATES GOVERNMENT & AGENCY ISSUES - 4.21% $4,348,000 FHLB Discount Note, 3.170%, 02/01/2006 4,348,000 SHARES ------ MONEY MARKET MUTUAL FUNDS - 0.09% 90,691 SEI Daily Income Trust Government Fund - Class B 90,691 ------------ TOTAL SHORT TERM INVESTMENTS (COST $4,438,691) 4,438,691 ------------ TOTAL INVESTMENTS (COST $92,293,629) - 100.93% 104,221,277 LIABILITIES IN EXCESS OF OTHER ASSETS - (0.93)% (957,118) TOTAL NET ASSETS - 100.00% $103,264,159 ------------ ------------ * Non Income Producing See notes to financial statements. MDT FUNDS--TAX AWARE/ALL CAP CORE FUND MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE SEPTEMBER 15, 2005 THROUGH JANUARY 31, 2006* The Fund returned 7.40% over the period from its inception on September 15, 2005 through January 31, 2006. This result exceeded the 5.72% return for the Russell 3000 Index and the 7.11% performance for the Lipper Multi-Cap Core Funds Index over the same time frame. Although this is too short a period to draw any meaningful conclusions, we are nonetheless pleased with the strategy's initial results. Over time we expect the Fund to generate pretax results that are slightly lower than the All Cap Core strategy. After tax results, however, are expected to be better. Compared to its benchmark, the Russell 3000 Index, the Fund was overweight value stocks throughout the period. Value stocks outperformed their growth counterparts, providing much of the Fund's positive relative performance. An overweight position in both large and mid cap stocks also contributed positively. Investments in Energy and Financial Services stocks helped relative performance, while Information Technology stocks contributed negatively. Energy was helped by positive contributions from Occidental Petroleum and Anadarko Petroleum. Financial Services was helped most notably by Lehman Brothers Holdings Inc. and Merrill Lynch & Co., Inc. The Fund is overweight large and mid cap stocks, while underweight small capitalization names. The largest sector overweight is in Energy followed by Financial Services, while Consumer Cyclicals, Consumer Staples, and Health Care lead the underweight sectors. Although some uncertainty clouds the economic outlook, we remain optimistic about the prospects for the Fund and will continue to strive for strong risk-adjusted returns through disciplined, bottom-up stock selection. * The inception date for the Tax Aware/All Cap Core Fund was 9/15/2005. The Fund may also invest in small- and medium-capitalization companies, which tend to have limited liquidity and greater price volatility than large- capitalization companies. As a result, their performance can be more volatile and they face greater risk of business failure, which could increase the volatility of the Fund's portfolio. The Fund is managed to maximize after-tax returns and therefore the Fund's pre-tax performance could possibly be lower than that of a similar fund that is not tax-managed. SECTOR BREAKDOWN (as % of investments) Basic Industries 2.3% Capital Goods 3.5% Consumer Cyclicals 5.7% Consumer Durables 4.9% Consumer Staples 0.6% Energy 22.4% Financial Services 40.8% Healthcare 6.5% Information Technology 11.2% Transportation 1.1% Public Utilities 1.0% MDT FUNDS--TAX AWARE/ALL CAP CORE FUND TOTAL RETURN FOR THE PERIOD ENDED JANUARY 31, 2006 SINCE INCEPTION (SEPTEMBER 15, 2005) -------------------- MDT Tax Aware/All Cap Core Fund_ Institutional Class Return Before Taxes 7.40% MDT Tax Aware/All Cap Core Fund--Institutional Class Return After Taxes on Distributions(1) 7.40% MDT Tax Aware/All Cap Core Fund--Institutional Class Return After Taxes on Distributions and Sale of Fund Shares(2) 4.81% Russell 3000 Index 5.72% Lipper Multi-Cap Core Funds Index 7.11% (1) After tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on your situation and may differ from those shown. Furthermore, the after-tax returns shown are not relevant to those who hold their shares through tax-deferred arrangements such as 401(k) plans or IRAs. (2) The "Return After Taxes on Distributions and Sale of Fund Shares" figures may be higher than other return figures for the Fund because when a capital loss occurs upon the redemption of Fund shares, a tax deduction is provided that benefits the investor. Performance data quoted represents past performance and is no guarantee of future results. The principal value and investment return will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month-end may be obtained by calling 1-866-784-6867. Investment performance reflects contractual fee waivers in effect. In the absence of such waivers, total return would be reduced. The Advisor can recapture expenses or fees it has waived within a three year period. Please refer to the prospectus for details. The table does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The Fund may also invest in small- and medium-capitalization companies, which tend to have limited liquidity and greater price volatility than large- capitalization companies. As a result, their performance can be more volatile and they face greater risk of business failure, which could increase the volatility of the Fund's portfolio. The Fund is managed to maximize after-tax returns and therefore the Fund's pre-tax performance could possible be lower than that of a similar fund that is not tax-managed. The Russell 3000 Index is an unmanaged index that measures the performance of the 3,000 largest U.S. companies, based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. The Lipper Multi-Cap Core Funds Index is the average of the 30 largest funds in the Lipper Multi-Cap Core Funds category. These funds, by portfolio practice, invest in a variety of market capitalization ranges without concentrating 75% of their equity assets in any one market capitalization range over an extended period of time. Multi-cap funds typically have between 25% to 75% of their assets invested in companies with market capitalizations (on a three-year weighted average basis) above 300% of the dollar weighted median market capitalization of the middle 1,000 securities of the S&P SuperComposite 1500 Index. Multi-cap Core funds have more latitude in the companies in which they invest. These Funds typically have an average price-to-earnings ratio, price- to-book ratio and three-year sales-per-share growth value, compared to the S&P SuperComposite 1500 Index. One cannot invest directly in an index. MDT FUNDS--TAX AWARE/ALL CAP CORE FUND SCHEDULE OF INVESTMENTS JANUARY 31, 2006 (UNAUDITED) SHARES VALUE ------ ----- COMMON STOCKS - 96.67% AEROSPACE & DEFENSE - 0.75% 180 Raytheon Company $ 7,375 58 United Technologies Corporation 3,385 ---------- 10,760 AIR FREIGHT & LOGISTICS - 0.20% 66 Ryder System, Inc. 2,950 AIRLINES - 0.63% 547 Southwest Airlines Co. 9,004 BIOTECHNOLOGY - 4.30% 600 Amgen Inc.* 43,734 210 Genentech, Inc.* 18,043 ---------- 61,777 CAPITAL MARKETS - 10.38% 320 The Goldman Sachs Group, Inc. 45,200 135 Lehman Brothers Holdings Inc. 18,961 486 Merrill Lynch & Co., Inc. 36,484 790 Morgan Stanley 48,545 ---------- 149,190 COMMERCIAL BANKS - 9.44% 170 AmSouth Bancorporation 4,694 208 Comerica Incorporated 11,538 397 Fifth Third Bancorp 14,915 91 Huntington Bancshares Incorporated 2,111 551 KeyCorp 19,500 20 M&T Bank Corporation 2,166 507 National City Corporation 17,329 278 Regions Financial Corporation 9,224 276 SunTrust Banks, Inc. 19,720 100 UnionBanCal Corporation 6,709 508 Wachovia Corporation 27,854 ---------- 135,760 COMMERCIAL SERVICES & SUPPLIES - 1.55% 69 Monster Worldwide Inc.* 2,943 207 Robert Half International Inc. 7,562 374 Waste Management, Inc. 11,811 ---------- 22,316 COMMUNICATIONS EQUIPMENT - 4.41% 1,323 QUALCOMM Incorporated 63,451 COMPUTERS & PERIPHERALS - 1.15% 530 Hewlett-Packard Company 16,525 CONSTRUCTION MATERIALS - 0.28% 65 Lafarge North America Inc. 4,005 CONSUMER FINANCE - 0.80% 116 AmeriCredit Corp.* 3,336 147 SLM Corporation 8,226 ---------- 11,562 DIVERSIFIED FINANCIAL SERVICES - 6.38% 279 CIT Group Inc. 14,882 1,710 JPMorgan Chase & Co. 67,972 140 Moody's Corporation 8,865 ---------- 91,719 DIVERSIFIED TELECOMMUNICATION SERVICES - 0.15% 73 BellSouth Corporation 2,100 ELECTRIC UTILITIES - 0.67% 162 PG&E Corporation 6,044 184 Xcel Energy, Inc. 3,573 ---------- 9,617 ELECTRICAL EQUIPMENT - 0.24% 52 Rockwell Automation, Inc. 3,436 ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.47% 166 Jabil Circuit, Inc.* 6,706 ENERGY EQUIPMENT & SERVICES - 3.97% 419 BJ Services Company 16,966 218 Schlumberger Limited 27,784 211 Smith International, Inc. 9,495 35 Transocean Inc.* 2,840 ---------- 57,085 HEALTH CARE EQUIPMENT & SUPPLIES - 0.28% 29 Intuitive Surgical, Inc.* 3,992 HEALTH CARE PROVIDERS & SERVICES - 1.52% 50 Express Scripts, Inc.* 4,564 49 Laboratory Corporation of America Holdings* 2,874 31 Pharmaceutical Product Development, Inc. 2,145 159 WellPoint Inc.* 12,211 ---------- 21,794 HOTELS RESTAURANTS & LEISURE - 1.46% 124 International Game Technology 4,437 45 Marriott International, Inc. - Class A* 2,999 429 Starbucks Corporation* 13,599 ---------- 21,035 HOUSEHOLD DURABLES - 5.07% 36 Beazer Homes USA, Inc. 2,622 188 Centex Corporation 13,421 493 D.R. Horton, Inc. 18,399 84 Harman International Industries, Incorporated 9,240 183 Lennar Corporation - Class A 11,449 399 Pulte Homes, Inc. 15,920 25 The Ryland Group, Inc. 1,809 ---------- 72,860 HOUSEHOLD PRODUCTS - 0.54% 64 The Clorox Company 3,831 71 Colgate-Palmolive Company 3,897 ---------- 7,728 INDUSTRIAL CONGLOMERATES - 0.42% 84 3M Co. 6,111 INSURANCE - 9.89% 41 The Allstate Corporation 2,134 114 AMBAC Financial Group, Inc. 8,756 1 American International Group, Inc. 66 123 Assurant, Inc. 5,648 120 Conseco, Inc.* 2,924 443 Hartford Financial Services Group, Inc. 36,428 62 Loews Corporation 6,119 72 MBIA Inc. 4,432 1,146 Metlife, Inc. 57,483 148 SAFECO Corporation 7,733 34 StanCorp Financial Group, Inc. 1,692 61 Torchmark Corporation 3,422 110 W.R. Berkley Corporation 5,434 ---------- 142,271 INTERNET & CATALOG RETAIL - 0.97% 323 eBay, Inc.* 13,921 IT SERVICES - 0.49% 98 Computer Sciences Corporation* 4,969 48 Fiserv, Inc.* 2,111 ---------- 7,080 MACHINERY - 0.86% 97 Deere & Company 6,961 100 Joy Global Inc. 5,404 ---------- 12,365 MEDIA - 1.07% 149 Omnicom Group Inc. 12,187 103 Univision Communications Inc. - Class A* 3,279 ---------- 15,466 METALS & MINING - 2.52% 193 Nucor Corporation 16,257 69 Peabody Energy Corporation 6,866 82 Phelps Dodge Corporation 13,161 ---------- 36,284 MULTILINE RETAIL - 0.18% 133 Saks Incorporated* 2,568 MULTI-UTILITIES & UNREGULATED POWER - 0.13% 182 Reliant Energy Inc.* 1,842 OIL & GAS - 17.40% 140 Amerada Hess Corporation 21,672 412 Anadarko Petroleum Corporation 44,422 525 Apache Corporation 39,653 1,109 ChevronTexaco Corporation 65,852 34 Kerr-McGee Corporation 3,753 218 Marathon Oil Corporation 16,758 130 Newfield Exploration Company* 6,812 462 Occidental Petroleum Corporation 45,142 101 Pogo Producing Company 6,059 ---------- 250,123 PAPER & FOREST PRODUCTS - 0.19% 95 Louisiana-Pacific Corporation 2,798 PHARMACEUTICALS - 0.26% 80 Forest Laboratories, Inc.* 3,702 ROAD & RAIL - 0.21% 38 Burlington Northern Santa Fe Corporation 3,045 SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT - 3.84% 182 Altera Corporation* 3,514 346 Linear Technology Corporation 12,875 259 Marvell Technology Group Ltd.* 17,721 65 Maxim Integrated Products, Inc.* 2,667 35 Microchip Technology Incorporated 1,313 80 NVIDIA Corporation* 3,597 464 Texas Instruments Incorporated 13,563 ---------- 55,250 SOFTWARE - 0.45% 74 Autodesk, Inc. 3,004 118 Red Hat, Inc.* 3,416 ---------- 6,420 SPECIALTY RETAIL - 0.44% 62 Chico's FAS, Inc.* 2,701 143 The TJX Companies, Inc. 3,651 ---------- 6,352 THRIFTS & MORTGAGE FINANCE - 2.45% 243 Golden West Financial Corporation 17,161 146 MGIC Investment Corporation 9,637 85 The PMI Group, Inc. 3,675 82 Radian Group Inc. 4,693 ---------- 35,166 TRADING COMPANIES & DISTRIBUTORS - 0.26% 100 Fastenal Company 3,815 ---------- TOTAL COMMON STOCKS (COST $1,275,961) 1,389,951 ---------- SHORT TERM INVESTMENTS - 2.69% MONEY MARKET MUTUAL FUNDS - 2.69% 38,748 SEI Daily Income Trust Government Fund - Class B 38,748 ---------- TOTAL SHORT TERM INVESTMENTS (COST $38,748) 38,748 ---------- TOTAL INVESTMENTS (COST $1,314,709) - 99.36% 1,428,699 OTHER ASSETS IN EXCESS OF LIABILITIES - 0.64% 9,139 ---------- TOTAL NET ASSETS - 100.00% $1,437,838 ---------- ---------- * Non Income Producing See notes to financial statements. MDT FUNDS--LARGE CAP GROWTH FUND MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE SEPTEMBER 15, 2005 THROUGH JANUARY 31, 2006* The Fund returned 7.20% over the period from its inception on September 15, 2005 through January 31, 2006. This result exceeded the 5.00% performance of the Russell 1000 Growth Index and the 7.18% return for the Lipper Large-Cap Growth Funds Index over the period. Although this is too short a period to draw any meaningful conclusions, we are nonetheless pleased with the strategy's initial results. Relative to the benchmark, the Russell 1000 Growth Index, the Fund's investments in Energy stocks provided the most positive contribution to performance during the period, followed by Healthcare, while Consumer Cyclical stocks contributed modest negative performance. The Energy sector was helped by positive contributions from Schlumberger Ltd. and Transocean Inc. Healthcare was led by positive contributions from Express Scripts, Inc. and UnitedHealth Group, Inc. Consumer Cyclicals were hurt primarily by Yahoo!, Inc. Currently, compared to the Index weightings, the largest sector overweight is Energy followed by Capital Goods, while the leading underweight is Information Technology. * The inception date for the Large Cap Growth Fund was 9/15/2005. Mutual Fund investing involves risk; principal loss is possible. SECTOR BREAKDOWN (as % of investments) Basic Industries 0.7% Capital Goods 15.6% Consumer Cyclicals 22.0% Consumer Durables 0.7% Consumer Staples 9.5% Energy 10.1% Financial Services 4.9% Healthcare 17.4% Information Technology 18.1% Transportation 1.0% Public Utilities 0.0% MDT FUNDS--LARGE CAP GROWTH FUND TOTAL RETURN FOR THE PERIOD ENDED JANUARY 31, 2006 SINCE INCEPTION (SEPTEMBER 15, 2005) -------------------- MDT Large Cap Growth Fund--Institutional Class 7.20% Russell 1000 Growth Index 5.00% Lipper Large-Cap Growth Funds Index 7.18% Performance data quoted represents past performance and is no guarantee of future results. The principal value and investment return will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month-end may be obtained by calling 1-866-784-6867. Investment performance reflects contractual fee waivers in effect. In the absence of such waivers, total return would be reduced. The Advisor can recapture expenses or fees it has waived within a three year period. Please refer to the prospectus for details. The table does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Mutual Fund investing involves risk; principal loss is possible. The Russell 1000 Growth Index is an unmanaged index that measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. The Lipper Large-Cap Growth Funds Index is the average of the 30 largest funds in the Lipper Large-Cap Growth Funds category. These funds, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) greater than 300% of the dollar-weighted median market capitalization of the middle 1,000 securities of the S&P SuperComposite 1500 Index. Large-cap growth funds typically have an above-average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P 500 Index. One cannot invest directly in an index. MDT FUNDS--LARGE CAP GROWTH FUND SCHEDULE OF INVESTMENTS JANUARY 31, 2006 (UNAUDITED) SHARES VALUE ------ ----- COMMON STOCKS - 103.36% AEROSPACE & DEFENSE - 3.98% 15 Alliant Techsystems Inc.* $ 1,162 395 Honeywell International Inc. 15,176 -------- 16,338 AIR FREIGHT & LOGISTICS - 1.11% 62 Expeditors International of Washington, Inc. 4,559 BEVERAGES - 4.04% 400 Anheuser-Busch Companies, Inc. 16,576 BIOTECHNOLOGY - 3.50% 167 Genentech, Inc.* 14,349 CAPITAL MARKETS - 0.47% 37 Northern Trust Corporation 1,932 CHEMICALS - 0.26% 33 International Flavors & Fragrances Inc. 1,088 COMMERCIAL SERVICES & SUPPLIES - 2.54% 13 The Corporate Executive Board Company 1,094 30 Monster Worldwide Inc.* 1,280 137 Pitney Bowes Inc. 5,855 60 Robert Half International Inc. 2,192 -------- 10,421 COMMUNICATIONS EQUIPMENT - 4.86% 416 QUALCOMM Incorporated 19,951 COMPUTERS & PERIPHERALS - 2.48% 411 EMC Corporation* 5,507 150 Network Appliance, Inc.* 4,680 -------- 10,187 CONSTRUCTION MATERIALS - 0.41% 20 Martin Marietta Materials, Inc. 1,696 DIVERSIFIED FINANCIAL SERVICES - 2.48% 24 Chicago Mercantile Exchange Holdings Inc. 10,158 ELECTRONIC EQUIPMENT & INSTRUMENTS - 1.63% 29 Amphenol Corporation - Class A 1,474 129 Jabil Circuit, Inc.* 5,212 -------- 6,686 ENERGY EQUIPMENT & SERVICES - 8.32% 112 BJ Services Company 4,535 67 Diamond Offshore Drilling 5,686 61 ENSCO International Incorporated 3,118 12 Helmerich & Payne, Inc. 940 47 Noble Corporation 3,781 126 Schlumberger Limited 16,059 -------- 34,119 FINANCIAL SERVICES - 0.87% 68 American Express Company* 3,567 FOOD & STAPLES RETAILING - 4.71% 419 Wal-Mart Stores, Inc. 19,320 FOOD PRODUCTS - 0.33% 45 Campbell Soup Company 1,347 HEALTH CARE EQUIPMENT & SUPPLIES - 0.94% 64 Varian Medical Systems, Inc.* 3,853 HEALTH CARE PROVIDERS & SERVICES - 5.72% 28 Covance Inc.* 1,591 102 Express Scripts, Inc.* 9,311 235 HCA, Inc. 11,534 15 Pharmaceutical Product Development, Inc. 1,038 -------- 23,474 HOTELS RESTAURANTS & LEISURE - 6.96% 41 Boyd Gaming Corporation 1,853 260 Carnival Corporation 13,457 418 Starbucks Corporation* 13,251 -------- 28,561 HOUSEHOLD DURABLES - 2.87% 79 Fortune Brands, Inc. 5,922 42 Harman International Industries, Incorporated 4,620 25 The Stanley Works 1,226 -------- 11,768 HOUSEHOLD PRODUCTS - 3.68% 264 Kimberly-Clark Corporation 15,080 INDUSTRIAL CONGLOMERATES - 7.84% 220 3M Co. 16,005 493 General Electric Company 16,146 -------- 32,151 INSURANCE - 1.25% 109 AFLAC INCORPORATED 5,117 IT SERVICES - 0.98% 27 Alliance Data Systems Corporation* 1,141 56 CheckFree Corporation* 2,902 -------- 4,043 MACHINERY - 2.20% 115 Caterpillar Inc. 7,808 34 The Timken Company 1,230 -------- 9,038 MEDIA - 0.73% 94 Univision Communications Inc. - Class A* 2,993 METALS & MINING - 2.09% 29 Allegheny Technologies, Inc. 1,504 71 Peabody Energy Corporation 7,065 -------- 8,569 OIL & GAS - 1.13% 34 GlobalSantaFe Corporation 2,076 37 Ultra Petroleum Corporation* 2,545 -------- 4,621 PHARMACEUTICALS - 7.77% 469 Abbott Laboratories 20,237 35 Sepracor Inc.* 1,992 209 Wyeth 9,666 -------- 31,895 SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT - 6.58% 40 Lam Research Corporation* 1,857 144 Linear Technology Corporation 5,358 32 Marvell Technology Group Ltd.* 2,189 117 Maxim Integrated Products, Inc. 4,802 65 Microchip Technology Incorporated 2,438 70 NVIDIA Corporation* 3,147 20 Texas Instruments Incorporated 585 235 Xilinx, Inc. 6,618 -------- 26,994 SOFTWARE - 2.31% 162 Autodesk, Inc. 6,576 6 Microsoft Corporation 169 15 Oracle Corporation* 188 88 Red Hat, Inc.* 2,548 -------- 9,481 SPECIALTY RETAIL - 6.10% 42 Abercrombie & Fitch Co. 2,789 86 Chico's FAS, Inc.* 3,746 291 Lowe's Companies, Inc. 18,493 -------- 25,028 TEXTILES, APPAREL & LUXURY GOODS - 1.38% 157 Coach, Inc.* 5,644 TRADING COMPANIES & DISTRIBUTORS - 0.84% 90 Fastenal Company 3,433 -------- TOTAL COMMON STOCKS (COST $405,968) 424,037 -------- SHORT TERM INVESTMENTS - 2.00% MONEY MARKET MUTUAL FUNDS - 2.00% 8,180 SEI Daily Income Trust Government Fund - Class B 8,180 -------- TOTAL SHORT TERM INVESTMENTS (COST $8,180) 8,180 -------- TOTAL INVESTMENTS (COST $414,148) - 105.36% 432,217 LIABILITIES IN EXCESS OF OTHER ASSETS - (5.36)% (21,971) -------- TOTAL NET ASSETS - 100.00% $410,246 -------- -------- * Non Income Producing See notes to financial statements. MDT FUNDS--MID CAP GROWTH FUND MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE SEPTEMBER 15, 2005 THROUGH JANUARY 31, 2006* The Fund returned 12.60% over the period from its inception on September 15, 2005 through January 31, 2006. This result exceeded the 10.53% performance of the Russell Midcap Growth Index and the 11.72% return for the Lipper Mid-Cap Growth Funds Index over the period. Although this is too short a period to draw any meaningful conclusions, we are nonetheless pleased with the strategy's initial results. Relative to the benchmark, the Russell Midcap Growth Index, the Fund's investments in Healthcare stocks provided the most positive contribution to performance during the period, followed by Energy, while Capital Goods stocks contributed negatively. Intuitive Surgical, Inc. and Express Scripts, Inc. contributed most to performance of the Healthcare sector. Energy was helped most significantly by Ultra Petroleum Corporation. The Capital Goods sector was hurt most notably by ITT Industries, Inc. Currently, compared to the Index weightings, the most significant overweight is Basic Industries, followed by Energy and Financial Services, while Consumer Cyclicals is the largest underweight. * The inception date for the Mid Cap Growth Fund was 9/15/2005. The Fund invests in medium-capitalization companies, which tend to have limited liquidity and greater price volatility than large-capitalization companies. As a result, their performance can be more volatile and they face greater risk of business failure, which could increase the volatility of the Fund's portfolio. SECTOR BREAKDOWN (as % of investments) Basic Industries 10.4% Capital Goods 7.0% Consumer Cyclicals 10.3% Consumer Durables 7.2% Consumer Staples 6.6% Energy 12.5% Financial Services 13.6% Healthcare 11.4% Information Technology 19.1% Transportation 1.6% Public Utilities 0.3% MDT FUNDS--MID CAP GROWTH FUND TOTAL RETURN FOR THE PERIOD ENDED JANUARY 31, 2006 SINCE INCEPTION (SEPTEMBER 15, 2005) -------------------- MDT Mid Cap Growth Fund--Institutional Class 12.60% Russell Midcap Growth Index 10.53% Lipper Mid-Cap Growth Funds Index 11.72% Performance data quoted represents past performance and is no guarantee of future results. The principal value and investment return will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month-end may be obtained by calling 1-866-784-6867. Investment performance reflects contractual fee waivers in effect. In the absence of such waivers, total return would be reduced. The Advisor can recapture expenses or fees it has waived within a three year period. Please refer to the prospectus for details. The table does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The Fund invests in medium-capitalization companies, which tend to have limited liquidity and greater price volatility than large-capitalization companies. As a result, their performance can be more volatile and they face greater risk of business failure, which could increase the volatility of the Fund's portfolio. The Russell Midcap Growth Index is an unmanaged index that measures the performance of those Russell Midcap companies with higher price-to-book ratios and higher forecasted growth values. The stocks are also members of the Russell 1000 Growth Index. The Lipper Mid-Cap Growth Funds Index is the average of the 30 largest funds in the Lipper Mid-Cap Growth Funds category. These funds, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) less than 300% of the dollar- weighted median market capitalization of the middle 1,000 securities of the S&P SuperComposite 1500 Index. Mid-cap growth funds typically have an above-average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P MidCap 400 Index. One cannot invest directly in an index. MDT FUNDS--MID CAP GROWTH FUND SCHEDULE OF INVESTMENTS JANUARY 31, 2006 (UNAUDITED) SHARES VALUE ------ ----- COMMON STOCKS - 104.59% AEROSPACE & DEFENSE - 2.54% 4 Alliant Techsystems Inc.* $ 310 136 Precision Castparts Corporation 6,793 21 Rockwell Collins, Inc. 985 -------- 8,088 AIR FREIGHT & LOGISTICS - 1.32% 44 C.H. Robinson Worldwide, Inc. 1,780 47 CNF Inc. 2,409 -------- 4,189 AIRLINES - 0.31% 43 AMR Corporation* 976 AUTO COMPONENTS - 1.00% 204 The Goodyear Tire & Rubber Company* 3,191 AUTOMOBILES - 0.32% 24 Thor Industries, Inc. 1,024 BUILDING PRODUCTS - 2.81% 248 American Standard Companies Inc. 8,928 CHEMICALS - 1.13% 105 International Flavors & Fragrances Inc. 3,461 2 Sigma-Aldrich Corporation 130 -------- 3,591 COMMERCIAL BANKS - 2.40% 231 Synovus Financial Corporation 6,392 23 Westamerica Bancorporation 1,238 -------- 7,630 COMMERCIAL SERVICES & SUPPLIES - 6.81% 107 ARAMARK Corporation 2,852 40 Deluxe Corporation 1,071 29 Herman Miller, Inc. 879 176 Monster Worldwide Inc.* 7,508 219 Pitney Bowes Inc. 9,360 -------- 21,670 COMMUNICATIONS EQUIPMENT - 3.24% 222 Harris Corporation 10,307 CONTAINERS & PACKAGING - 1.14% 194 Crown Holdings, Inc.* 3,630 DIVERSIFIED FINANCIAL SERVICES - 7.98% 20 Chicago Mercantile Exchange Holdings Inc. 8,465 267 Moody's Corporation 16,906 -------- 25,371 ELECTRICAL EQUIPMENT - 0.13% 10 AMETEK, Inc. 411 ELECTRONIC EQUIPMENT & INSTRUMENTS - 1.29% 73 CDW Corporation 4,088 ENERGY EQUIPMENT & SERVICES - 5.30% 20 Diamond Offshore Drilling, Inc. 1,697 18 ENSCO International Incorporated 920 204 Grant Prideco, Inc.* 10,218 33 Noble Corporation 2,655 30 Smith International, Inc. 1,350 -------- 16,840 GAS UTILITIES - 0.33% 13 Questar Corporation 1,059 HEALTH CARE EQUIPMENT & SUPPLIES - 4.10% 112 Dade Behring Holdings, Inc. 4,382 63 Intuitive Surgical, Inc.* 8,672 -------- 13,054 HEALTH CARE PROVIDERS & SERVICES - 6.76% 184 Express Scripts, Inc.* 16,797 223 Health Management Associates, Inc. - Class A 4,688 -------- 21,485 HOUSEHOLD DURABLES - 9.98% 104 The Black & Decker Corporation 8,975 28 Centex Corporation 1,999 174 Fortune Brands, Inc. 13,043 8 Harman International Industries, Incorporated 880 13 Lennar Corporation - Class A 813 63 Newell Rubbermaid Inc. 1,489 2 NVR, Inc.* 1,589 60 The Stanley Works 2,943 -------- 31,731 HOUSEHOLD PRODUCTS - 0.29% 17 Energizer Holdings, Inc.* 920 INDUSTRIAL CONGLOMERATES - 0.65% 30 Carlisle Companies Incorporated 2,082 IT SERVICES - 6.99% 115 Alliance Data Systems Corporation* 4,859 129 Global Payments Inc. 6,570 297 Paychex, Inc. 10,796 -------- 22,225 LEISURE EQUIPMENT & PRODUCTS - 0.98% 43 Polaris Industries Inc. 2,345 19 SCP Pool Corporation 758 -------- 3,103 MACHINERY - 0.31% 10 Cummins Inc. 973 MEDIA - 0.36% 41 Valassis Communications, Inc.* 1,144 METALS & MINING - 9.77% 115 Allegheny Technologies, Inc. 5,963 67 CONSOL Energy Inc. 4,884 276 Freeport-McMoRan Copper & Gold, Inc. 17,733 25 Peabody Energy Corporation 2,488 -------- 31,068 MULTILINE RETAIL - 1.74% 84 Dollar Tree Stores, Inc.* 2,082 83 Nordstrom, Inc. 3,463 -------- 5,545 OIL & GAS - 5.77% 37 GlobalSantaFe Corporation 2,259 234 Ultra Petroleum Corporation* 16,097 -------- 18,356 PHARMACEUTICALS - 0.95% 53 Sepracor Inc.* 3,016 SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT - 6.54% 55 Broadcom Corporation* 3,751 249 Marvell Technology Group Ltd.* 17,037 -------- 20,788 SOFTWARE - 7.20% 319 Autodesk, Inc. 12,948 105 Fair Isaac Corporation 4,654 183 Red Hat, Inc.* 5,298 -------- 22,900 SPECIALTY RETAIL - 2.59% 17 Abercrombie & Fitch Co. 1,129 124 Chico's FAS, Inc.* 5,401 49 The Timberland Company - Class A* 1,713 -------- 8,243 WIRELESS TELECOMMUNICATION SERVICES - 1.56% 100 NII Holdings Inc.* 4,946 -------- TOTAL COMMON STOCKS (COST $295,505) 332,572 -------- SHORT TERM INVESTMENTS - 2.26% MONEY MARKET MUTUAL FUNDS - 2.26% 7,185 SEI Daily Income Trust Government Fund - Class B 7,185 -------- TOTAL SHORT TERM INVESTMENTS (COST $7,185) 7,185 -------- TOTAL INVESTMENTS (COST $302,690) - 106.85% 339,757 LIABILITIES IN EXCESS OF OTHER ASSETS - (6.85)% (21,778) -------- TOTAL NET ASSETS - 100.00% $317,979 -------- -------- * Non Income Producing See notes to financial statements. MDT FUNDS--SMALL CAP CORE FUND MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE SEPTEMBER 15, 2005 THROUGH JANUARY 31, 2006* The Fund returned 17.50% over the period from its inception on September 15, 2005 through January 31, 2006. This result exceeded the 10.67% performance of the Russell 2000 Index and the 10.04% return for the Lipper Small-Cap Core Funds Index over the period. Although this is too short a period to draw any meaningful conclusions, we are nonetheless pleased with the strategy's initial results. Relative to the benchmark, the Russell 2000 Index, the Fund's investments in Energy provided the most positive contribution to performance during the period, followed by Consumer Cyclicals, while Capital Goods stocks contributed negatively. Energy was helped primarily by RPC, Inc., while Consumer Cyclicals was helped by Guesso, Inc. and The Dress Barn, Inc. Capital Goods was hurt most notably by UNOVA, Inc. Currently, compared to the Index weightings, the largest sector overweight is Energy, while Healthcare is the most significant underweight. * The inception date for the Small Cap Core Fund was 9/15/2005. The Fund invests in small-capitalization companies, which tend to have limited liquidity and greater price volatility than large-capitalization companies. As a result, their performance can be more volatile and they face greater risk of business failure, which could increase the volatility of the Fund's portfolio. SECTOR BREAKDOWN (as % of investments) Basic Industries 8.5% Capital Goods 6.6% Consumer Cyclicals 16.1% Consumer Durables 7.0% Consumer Staples 3.5% Energy 17.0% Financial Services 20.2% Healthcare 2.0% Information Technology 16.9% Transportation 1.5% Public Utilities 0.7% MDT FUNDS--SMALL CAP CORE FUND TOTAL RETURN FOR THE PERIOD ENDED JANUARY 31, 2006 SINCE INCEPTION (SEPTEMBER 15, 2005) -------------------- MDT Small Cap Core Fund--Institutional Class 17.50% Russell 2000 Index 10.67% Lipper Small-Cap Core Funds Index 10.04% Performance data quoted represents past performance and is no guarantee of future results. The principal value and investment return will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month-end may be obtained by calling 1-866-784-6867. Investment performance reflects contractual fee waivers in effect. In the absence of such waivers, total return would be reduced. The Advisor can recapture expenses or fees it has waived within a three year period. Please refer to the prospectus for details. The table does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The Fund invests in small-capitalization companies, which tend to have limited liquidity and greater price volatility than large-capitalization companies. As a result, their performance can be more volatile and they face greater risk of business failure, which could increase the volatility of the Fund's portfolio. The Russell 2000 Index is an unmanaged index that measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The Lipper Small-Cap Core Funds Index is the average of the 30 largest funds in the Lipper Small-Cap Core Funds category. These funds, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) less than 250% of the dollar- weighted median of the smallest 500 of the middle 1,000 securities of the S&P SuperComposite 1500 Index. Small-cap core funds have more latitude in the companies in which they invest. These funds typically have an average price-to- earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P SmallCap 600 Index. One cannot invest directly in an index. MDT FUNDS--SMALL CAP CORE FUND SCHEDULE OF INVESTMENTS JANUARY 31, 2006 (UNAUDITED) SHARES VALUE ------ ----- COMMON STOCKS - 99.97% AEROSPACE & DEFENSE - 1.55% 25 AAR CORP.* $ 596 49 Armor Holdings, Inc.* 2,336 23 Teledyne Technologies Incorporated* 752 22 United Industrial Corporation 999 -------- 4,683 AUTO COMPONENTS - 0.95% 31 Drew Industries Incorporated* 1,167 77 Tenneco Inc.* 1,690 -------- 2,857 BIOTECHNOLOGY - 0.65% 26 Alkermes, Inc.* 633 22 Neurocrine Biosciences, Inc.* 1,337 -------- 1,970 CAPITAL MARKETS - 2.11% 66 Investment Technology Group, Inc.* 2,969 112 LaBranche & Co. Inc.* 1,282 72 optionsXpress Holdings Inc. 2,102 -------- 6,353 CHEMICALS - 1.51% 53 A. Schulman, Inc. 1,306 47 FMC Corporation* 2,652 51 Hercules Incorporated* 597 -------- 4,555 COMMERCIAL BANKS - 5.72% 21 AMCORE Financial, Inc. 637 24 Capitol Bancorp Ltd.* 1,065 24 Cascade Bancorp 624 20 Chemical Financial Corporation 629 32 Chittenden Corporation 908 35 Citizens Banking Corporation 974 24 Community Bank System, Inc. 558 58 Irwin Financial Corporation 1,242 33 National Penn Bancshares, Inc. 752 70 Provident Bankshares Corporation 2,571 108 Republic Bancorp Inc. 1,399 31 Sterling Bancorp 718 98 Sterling Bancshares, Inc. 1,641 71 Susquehanna Bancshares, Inc. 1,714 48 United Bankshares, Inc. 1,789 -------- 17,221 COMMERCIAL SERVICES & SUPPLIES - 4.82% 40 Administaff, Inc. 1,722 94 American Reprographics Company* 2,566 36 Bowne & Co., Inc. 542 126 Brady Corporation - Class A 5,011 40 Ennis Inc. 770 23 John H. Harland Company 859 20 Mobile Mini, Inc.* 994 50 Spherion Corporation* 560 7 Strayer Education, Inc. 620 20 Vertrue Incorporated* 865 -------- 14,509 COMMUNICATIONS EQUIPMENT - 2.08% 75 Belden CDT Inc. 2,033 120 CommScope, Inc.* 2,653 109 Powerwave Technologies, Inc.* 1,592 -------- 6,278 COMPUTERS & PERIPHERALS - 3.57% 85 Komag, Incorporated* 4,000 131 Palm, Inc.* 5,172 57 Synaptics Incorporated* 1,569 -------- 10,741 CONSTRUCTION & ENGINEERING - 1.18% 8 EMCOR Group, Inc.* 656 56 McDermott International, Inc.* 2,912 -------- 3,568 CONSTRUCTION MATERIALS - 1.14% 21 Eagle Materials Inc. 3,421 CONSUMER FINANCE - 1.26% 50 Advanta Corp. - Class B 1,730 18 ASTA Funding, Inc. 552 37 Nelnet, Inc. - Class A* 1,521 -------- 3,803 CONTAINERS & PACKAGING - 0.46% 37 Silgan Holdings Inc. 1,401 CRUDE PETROLEUM AND NATURAL GAS - 0.18% 14 Bill Barrett Corporation* 538 DISTRIBUTORS - 1.33% 90 Brightpoint, Inc.* 2,033 25 Building Materials Holding Corporation 1,979 -------- 4,012 DIVERSIFIED CONSUMER SERVICES - 0.58% 61 Escala Group, Inc.* 1,753 DIVERSIFIED TELECOMMUNICATION SERVICES - 0.47% 19 Commonwealth Telephone Enterprises, Inc. 634 28 SureWest Communications 784 -------- 1,418 ELECTRICAL EQUIPMENT - 1.13% 20 The Lamson & Sessions Co.* 610 30 Woodward Governor Company 2,807 -------- 3,417 ELECTRONIC EQUIPMENT & INSTRUMENTS - 4.60% 56 Aeroflex Incorporated* 677 71 Agilysys, Inc. 1,505 29 Metrologic Instruments, Inc.* 620 64 Multi-Fineline Electronix, Inc.* 3,441 39 Park Electrochemical Corp. 1,103 131 Plexus Corporation* 3,709 26 Rofin-Sinar Technologies, Inc.* 1,241 33 Rogers Corporation* 1,555 -------- 13,851 ENERGY EQUIPMENT & SERVICES - 9.11% 26 Cal Dive International, Inc.* 1,091 19 GulfMark Offshore, Inc.* 622 35 Helmerich & Payne, Inc. 2,743 31 Maverick Tube Corporation* 1,483 13 NS Group, Inc.* 588 29 Oceaneering International, Inc.* 1,723 125 Oil States International, Inc.* 5,113 93 RPC, Inc. 3,077 56 Superior Energy Services, Inc.* 1,520 47 TETRA Technologies, Inc.* 1,865 58 Todco - Class A 2,587 51 Unit Corporation* 3,045 14 Veritas DGC Inc.* 631 28 W-H Energy Services, Inc.* 1,352 -------- 27,440 FOOD & STAPLES RETAILING - 1.04% 22 Casey's General Stores, Inc. 560 111 Ruddick Corporation 2,565 -------- 3,125 FOOD PRODUCTS - 0.82% 50 Chiquita Brands International, Inc. 905 29 Flowers Foods, Inc. 798 27 Sanderson Farms, Inc. 756 -------- 2,459 HEALTH CARE EQUIPMENT & SUPPLIES - 0.78% 30 Abaxis, Inc.* 597 30 Greatbatch, Inc.* 781 39 Thoratec Corporation* 987 -------- 2,365 HEALTH CARE PROVIDERS & SERVICES - 0.57% 37 Per-Se Technologies, Inc.* 920 44 The TriZetto Group, Inc.* 808 -------- 1,728 HOBBY, TOY, AND GAME SHOPS - 0.24% 22 Build-A-Bear-Workshop, Inc.* 712 HOTELS RESTAURANTS & LEISURE - 0.78% 43 Bob Evans Farms, Inc. 1,148 42 Pinnacle Entertainment, Inc.* 1,211 -------- 2,359 HOUSEHOLD DURABLES - 2.86% 18 Beazer Homes USA, Inc. 1,311 18 Ethan Allen Interiors Inc. 765 1 Orleans Homebuilders, Inc. 17 37 The Ryland Group, Inc. 2,678 24 WCI Communities, Inc.* 661 14 William Lyon Homes, Inc.* 1,438 69 The Yankee Candle Company, Inc. 1,732 -------- 8,602 INFORMATION RETRIEVAL SERVICES - 0.16% 13 Bankrate, Inc.* 494 INSURANCE - 5.20% 7 American Physicians Capital, Inc.* 342 33 AmerUs Group Co. 2,025 10 Delphi Financial Group, Inc. 477 22 Harleysville Group Inc. 606 54 Horace Mann Educators Corporation 1,058 15 Infinity Property & Casualty Corporation 579 33 LandAmerica Financial Group, Inc. 2,177 59 Ohio Casualty Corporation 1,778 10 RLI Corporation 547 17 Safety Insurance Group, Inc. 682 35 Selective Insurance Group, Inc. 2,030 32 State Auto Financial Corporation 1,231 40 Stewart Information Services Corporation 2,138 -------- 15,670 INTERNET & CATALOG RETAIL - 1.40% 111 Coldwater Creek Inc.* 2,264 54 Priceline.com Incorporated* 1,191 27 Stamps.com Inc.* 770 -------- 4,225 INTERNET SOFTWARE & SERVICES - 1.68% 54 aQuantive, Inc.* 1,405 25 j2 Global Communications, Inc.* 1,194 54 United Online, Inc. 738 26 Websense, Inc.* 1,714 -------- 5,051 IT SERVICES - 1.93% 72 CSG Systems International, Inc.* 1,640 23 Intrado Inc.* 585 45 Sykes Enterprises, Incorporated* 585 118 VeriFone Holdings, Inc.* 3,011 -------- 5,821 MACHINERY - 2.70% 25 Astec Industries, Inc.* 961 4 Cascade Corporation 204 27 Lincoln Electric Holdings, Inc. 1,202 17 The Middleby Corporation* 1,606 26 Mueller Industries, Inc. 755 21 Reliance Steel & Aluminum Co. 1,670 32 Tennant Company 1,734 -------- 8,132 MEDIA - 0.72% 35 Journal Register Company 497 35 Media General, Inc. - Class A 1,675 -------- 2,172 METALS & MINING - 4.56% 84 AMCOL International Corporation 2,266 16 Carpenter Technology Corporation 1,449 25 Cleveland-Cliffs Inc. 2,696 95 Commercial Metals Company 4,496 19 Oregon Steel Mills, Inc.* 782 15 Quanex Corporation 932 14 Schnitzer Steel Industries, Inc. - Class A 468 31 Worthington Industries, Inc. 640 -------- 13,729 MORTGAGE BANKERS AND LOAN CORRESPONDENTS - 0.22% 23 PHH Corporation* 663 OIL & GAS - 6.69% 43 Atlas America, Inc.* 3,021 24 Berry Petroleum Company 1,907 49 Cabot Oil & Gas Corporation 2,527 20 Denbury Resources Inc.* 595 45 Encore Acquisition Company* 1,627 43 Frontier Oil Corporation 2,038 41 Holly Corporation 3,018 35 KCS Energy, Inc.* 1,016 54 St. Mary Land & Exploration Company 2,356 29 Stone Energy Corporation* 1,450 12 Swift Energy Company* 593 -------- 20,148 PERSONAL PRODUCTS - 0.22% 20 Parlux Fragrances, Inc.* 669 PHARMACEUTICALS - 0.21% 19 Alpharma Inc. - Class A 636 PREPACKAGED SOFTWARE - 0.92% 184 Foundry Networks, Inc.* 2,765 ROAD & RAIL - 1.91% 17 AMERCO* 1,377 43 Arkansas Best Corporation 1,841 89 Old Dominion Freight Line, Inc.* 2,540 -------- 5,758 SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT - 2.38% 47 Cohu, Inc. 1,332 98 Micrel, Incorporated* 1,202 34 Microsemi Corporation* 1,035 22 Netlogic Microsystems Inc.* 799 63 OmniVision Technologies, Inc.* 1,590 41 PortalPlayer Inc.* 1,209 -------- 7,167 SOFTWARE - 0.86% 14 Ansoft Corporation* 492 95 Informatica Corporation* 1,398 8 Quality Systems, Inc. 708 -------- 2,598 SPECIALTY RETAIL - 7.49% 161 Aeropostale, Inc.* 4,867 41 The Cato Corporation - Class A 885 11 The Children's Place Retail Stores, Inc.* 482 96 The Dress Barn, Inc.* 4,429 98 Guesso, Inc.* 4,158 42 The Gymboree Corporation* 1,035 18 Hibbett Sporting Goods, Inc.* 552 23 Pacific Sunwear of California, Inc.* 564 12 The Pantry, Inc.* 657 28 Payless ShoeSource, Inc.* 682 60 Select Comfort Corporation* 1,656 31 United Auto Group, Inc. 1,187 29 Zumiez Inc.* 1,402 -------- 22,556 TELEPHONE COMMUNICATIONS, EXCEPT RADIOTELEPHONE - 0.17% 44 Valor Communications Group, Inc. 519 TEXTILES, APPAREL & LUXURY GOODS - 2.80% 18 Brown Shoe Company, Inc. 810 44 Carter's, Inc.* 2,992 68 Kellwood Company 1,646 28 Oxford Industries, Inc. 1,272 19 Steven Madden, Ltd. 578 46 The Warnaco Group, Inc.* 1,142 -------- 8,440 THRIFTS & MORTGAGE FINANCE - 4.48% 19 Anchor BanCorp Wisconsin, Inc. 592 82 BankUnited Financial Corporation - Class A 2,304 43 Corus Bankshares, Inc. 2,761 47 FirstFed Financial Corp.* 2,947 71 MAF Bancorp, Inc. 3,052 19 PFF Bancorp, Inc. 601 38 TierOne Corporation* 1,236 -------- 13,493 TRADING COMPANIES & DISTRIBUTORS - 1.55% 47 MSC Industrial Direct Co., Inc. - Class A 2,112 36 Watsco, Inc. 2,546 -------- 4,658 WIRELESS TELECOMMUNICATION SERVICES - 0.23% 29 Syniverse Holdings Inc.* 696 -------- TOTAL COMMON STOCKS (COST $270,419) 301,199 -------- SHORT TERM INVESTMENTS - 3.17% MONEY MARKET MUTUAL FUNDS - 3.17% 9,540 SEI Daily Income Trust Government Fund - Class B 9,540 -------- TOTAL SHORT TERM INVESTMENTS (COST $9,540) 9,540 -------- TOTAL INVESTMENTS (COST $279,959) - 103.14% 310,739 LIABILITIES IN EXCESS OF OTHER ASSETS - (3.14)% (9,459) -------- TOTAL NET ASSETS - 100.00% $301,280 -------- -------- * Non Income Producing See notes to financial statements. MDT FUNDS--SMALL CAP GROWTH FUND MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE SEPTEMBER 15, 2005 THROUGH JANUARY 31, 2006* The Fund returned 16.20% over the period from its inception on September 15, 2005 through January 31, 2006. This result exceeded the 12.39% performance of the Russell 2000 Growth Index and the 10.50% return for the Lipper Small-Cap Growth Funds Index over the period. Although this is too short a period to draw any meaningful conclusions, we are nonetheless pleased with the strategy's initial results. Relative to the benchmark, the Russell 2000 Growth Index, the Fund's investments in Information Technology provided the most positive contribution to performance during the period, followed by Energy, while Healthcare contributed negatively. Information Technology was helped most notably by Websense, Inc., while Energy was helped by Cal-Dive International, Inc. Healthcare was hurt by Foxhollow Technologies, Inc. Currently, compared to the Index weightings, the largest sector overweight is Energy, followed by Basic Industries, while Healthcare is the most significant underweight. * The inception date for the Small Cap Growth Fund was 9/15/2005. The Fund invests in small-capitalization companies, which tend to have limited liquidity and greater price volatility than large-capitalization companies. As a result, their performance can be more volatile and they face greater risk of business failure, which could increase the volatility of the Fund's portfolio. SECTOR BREAKDOWN (as % of investments) Basic Industries 8.2% Capital Goods 8.1% Consumer Cyclicals 20.4% Consumer Durables 6.2% Consumer Staples 0.4% Energy 15.4% Financial Services 11.8% Healthcare 6.1% Information Technology 17.4% Transportation 5.6% Public Utilities 0.4% MDT FUNDS--SMALL CAP GROWTH FUND TOTAL RETURN FOR THE PERIOD ENDED JANUARY 31, 2006 SINCE INCEPTION (SEPTEMBER 15, 2005) -------------------- MDT Small Cap Growth Fund--Institutional Class 16.20% Russell 2000 Growth Index 12.39% Lipper Small Cap-Growth Funds Index 10.50% Performance data quoted represents past performance and is no guarantee of future results. The principal value and investment return will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month-end may be obtained by calling 1-866-784-6867. Investment performance reflects contractual fee waivers in effect. In the absence of such waivers, total return would be reduced. The Advisor can recapture expenses or fees it has waived within a three year period. Please refer to the prospectus for details. The table does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The Fund invests in small-capitalization companies, which tend to have limited liquidity and greater price volatility than large-capitalization companies. As a result, their performance can be more volatile and they face greater risk of business failure, which could increase the volatility of the Fund's portfolio. The Russell 2000 Growth Index is an unmanaged index that measures the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. The Lipper Small-Cap Growth Funds Index is the average of the 30 largest funds in the Lipper Small-Cap Growth Funds category. These funds, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) less than 250% of the dollar- weighted median of the smallest 500 of the middle 1,000 securities of the S&P SuperComposite 1500 Index. Small-cap growth funds typically have an above- average price-to-earnings ratio, price-to-book ratio, and three-year sales-per- share growth value, compared to the S&P SmallCap 600 Index. One cannot invest directly in an index. MDT FUNDS--SMALL CAP GROWTH FUND SCHEDULE OF INVESTMENTS JANUARY 31, 2006 (UNAUDITED) SHARES VALUE ------ ----- COMMON STOCKS - 106.99% AEROSPACE & DEFENSE - 1.56% 28 AAR CORP.* $ 667 72 Teledyne Technologies Incorporated* 2,353 14 United Industrial Corporation 636 -------- 3,656 AIR FREIGHT & LOGISTICS - 1.36% 51 Forward Air Corporation 1,989 28 Hub Group, Inc.* 1,186 -------- 3,175 AIRLINES - 0.36% 49 AirTran Holdings, Inc.* 830 AUTO COMPONENTS - 0.48% 30 Drew Industries Incorporated* 1,130 BIOTECHNOLOGY - 3.47% 96 Alkermes, Inc.* 2,336 60 ICOS Corporation* 1,491 45 Neurocrine Biosciences, Inc.* 2,735 24 United Therapeutics Corporation* 1,552 -------- 8,114 BUILDING PRODUCTS - 0.56% 37 Apogee Enterprises, Inc. 683 18 ElkCorp 633 -------- 1,316 CAPITAL MARKETS - 5.02% 15 BlackRock, Inc. 1,992 51 GFI Group Inc.* 2,784 63 Greenhill & Co., Inc. 3,602 115 optionsXpress Holdings Inc. 3,358 -------- 11,736 COMMERCIAL BANKS - 2.04% 25 Cascade Bancorp 650 54 First BanCorp. 690 35 Pacific Capital Bancorp 1,288 51 Texas Regional Bancshares, Inc. - Class A 1,570 33 Wilshire Bancorp, Inc. 582 -------- 4,780 COMMERCIAL SERVICES & SUPPLIES - 4.99% 52 Administaff, Inc. 2,238 78 American Reprographics Company* 2,130 36 Gevity HR, Inc. 988 15 Heidrick & Struggles International, Inc.* 503 55 John H. Harland Company 2,053 28 Mobile Mini, Inc.* 1,392 34 Portfolio Recovery Associates, Inc.* 1,675 62 Spherion Corporation* 694 -------- 11,673 COMMUNICATIONS EQUIPMENT - 0.90% 40 Avocent Corporation* 1,331 30 InterDigital Communications Corporation* 775 -------- 2,106 COMPUTERS & PERIPHERALS - 2.13% 60 Komag, Incorporated* 2,824 26 Neoware Inc.* 706 53 Synaptics Incorporated* 1,458 -------- 4,988 CONSTRUCTION & ENGINEERING - 0.28% 24 Perini Corporation* 661 CONSTRUCTION MATERIALS - 1.46% 21 Eagle Materials Inc. 3,421 CONSUMER FINANCE - 1.02% 9 ASTA Funding, Inc. 276 51 Nelnet, Inc. - Class A* 2,096 -------- 2,372 CONTAINERS & PACKAGING - 1.46% 45 Crown Holdings, Inc.* 842 68 Silgan Holdings Inc. 2,574 -------- 3,416 DISTRIBUTORS - 2.48% 17 Building Materials Holding Corporation 1,346 93 WESCO International, Inc.* 4,457 -------- 5,803 DIVERSIFIED CONSUMER SERVICES - 0.42% 34 Escala Group, Inc.* 977 DIVERSIFIED FINANCIAL SERVICES - 0.64% 40 International Securities Exchange, Inc.* 1,486 EATING PLACES - 0.80% 75 Domino's Pizza, Inc. 1,868 ELECTRICAL EQUIPMENT - 1.05% 51 Baldor Electric Company* 1,524 23 Intermagnetics General Corporation* 928 -------- 2,452 ELECTRONIC EQUIPMENT & INSTRUMENTS - 2.70% 26 Global Imaging Systems, Inc.* 919 30 Metrologic Instruments, Inc.* 642 38 Multi-Fineline Electronix, Inc.* 2,043 24 Rogers Corporation* 1,131 27 ScanSource, Inc.* 1,588 -------- 6,323 ENERGY EQUIPMENT & SERVICES - 11.28% 8 Atwood Oceanics, Inc.* 777 58 Cal Dive International, Inc.* 2,435 40 Global Industries, Ltd.* 560 62 Grey Wolf, Inc.* 546 22 GulfMark Offshore, Inc.* 721 20 Maverick Tube Corporation* 957 47 Oceaneering International, Inc.* 2,792 95 Oil States International, Inc.* 3,885 108 Superior Energy Services, Inc.* 2,932 63 TETRA Technologies, Inc.* 2,500 62 Todco - Class A 2,765 38 Unit Corporation* 2,269 32 Veritas DGC Inc.* 1,442 37 W-H Energy Services, Inc.* 1,786 -------- 26,367 FARM SUPPLIES - 0.24% 26 UAP Holding Corp. 550 HEALTH CARE EQUIPMENT & SUPPLIES - 2.25% 35 Abaxis, Inc.* 697 45 Greatbatch, Inc.* 1,172 23 ICU Medical, Inc.* 829 19 Integra LifeSciences Holdings* 741 72 Thoratec Corporation* 1,822 -------- 5,261 HEALTH CARE PROVIDERS & SERVICES - 1.51% 44 Chemed Corporation 2,339 7 Computer Programs and Systems, Inc. 298 50 PSS World Medical, Inc.* 888 -------- 3,525 HOBBY, TOY, AND GAME SHOPS - 0.62% 45 Build-A-Bear-Workshop, Inc.* 1,456 HOTELS RESTAURANTS & LEISURE - 1.33% 12 Ambassadors Group, Inc. 324 42 CEC Entertainment Inc.* 1,513 26 Monarch Casino & Resort, Inc.* 703 16 RC2 Corporation* 558 -------- 3,098 HOUSEHOLD DURABLES - 1.52% 45 Ethan Allen Interiors Inc. 1,913 16 William Lyon Homes, Inc.* 1,643 -------- 3,556 INFORMATION RETRIEVAL SERVICES - 0.41% 25 Bankrate, Inc.* 950 INTERNET & CATALOG RETAIL - 2.47% 165 Coldwater Creek Inc.* 3,366 67 Priceline.com Incorporated* 1,477 33 Stamps.com Inc.* 941 -------- 5,784 INTERNET SOFTWARE & SERVICES - 4.14% 74 aQuantive, Inc.* 1,925 69 Digital Insight Corporation* 2,475 53 EarthLink, Inc.* 605 30 j2 Global Communications, Inc.* 1,433 35 United Online, Inc. 478 42 Websense, Inc.* 2,769 -------- 9,685 IT SERVICES - 1.93% 67 eFunds Corporation* 1,580 115 VeriFone Holdings, Inc.* 2,935 -------- 4,515 MACHINERY - 4.71% 25 A.S.V., Inc.* 825 34 Astec Industries, Inc.* 1,307 17 Freightcar America Inc. 976 16 The Middleby Corporation* 1,512 58 Nordson Corporation 2,635 38 Reliance Steel & Aluminum Co. 3,021 34 Wabash National Corporation 725 -------- 11,001 MARINE - 1.30% 54 Kirby Corporation* 3,031 METALS & MINING - 3.82% 37 Cleveland-Cliffs Inc. 3,990 32 Quanex Corporation 1,988 39 Titanium Metals Corporation* 2,952 -------- 8,930 MULTILINE RETAIL - 0.20% 11 Conn's, Inc.* 478 OIL & GAS - 4.86% 36 Berry Petroleum Company 2,860 32 Denbury Resources Inc.* 953 46 Frontier Oil Corporation 2,180 37 Holly Corporation 2,723 50 KCS Energy, Inc.* 1,451 30 W&T Offshore, Inc.* 1,198 -------- 11,365 ROAD & RAIL - 2.86% 35 AMERCO* 2,836 21 Arkansas Best Corporation 899 47 Knight Transportation, Inc. 956 70 Old Dominion Freight Line, Inc.* 1,998 -------- 6,689 SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT - 3.54% 44 Cymer, Inc.* 1,986 121 Micrel, Incorporated* 1,485 58 Microsemi Corporation* 1,765 30 Netlogic Microsystems Inc.* 1,090 43 OmniVision Technologies, Inc.* 1,085 29 PortalPlayer Inc.* 855 -------- 8,266 SOFTWARE - 5.88% 48 Advent Software, Inc.* 1,261 17 Ansoft Corporation* 597 58 ANSYS, Inc.* 2,544 124 Informatica Corporation* 1,825 3 MicroStrategy Incorporated* 288 22 Quality Systems, Inc. 1,947 22 SPSS Inc.* 709 57 TALX Corporation 1,786 60 Transaction Systems Architects, Inc.* 1,980 60 Wind River Systems, Inc.* 803 -------- 13,740 SPECIALTY RETAIL - 7.19% 44 Aeropostale, Inc.* 1,330 33 Charlotte Russe Holding Inc.* 541 37 The Children's Place Retail Stores, Inc.* 1,620 70 The Dress Barn, Inc.* 3,230 39 Genesco Inc.* 1,519 98 Guesso, Inc.* 4,158 54 Hibbett Sporting Goods, Inc.* 1,655 28 Jos. A. Bank Clothiers, Inc.* 1,436 24 Pacific Sunwear of California, Inc.* 588 15 Zumiez Inc.* 725 -------- 16,802 TELEPHONE COMMUNICATIONS, EXCEPT RADIOTELEPHONE - 0.37% 74 Valor Communications Group, Inc. 873 TEXTILES, APPAREL & LUXURY GOODS - 3.62% 62 Carter's, Inc.* 4,215 20 K-Swiss Inc. 633 39 Oxford Industries, Inc. 1,771 74 The Warnaco Group, Inc.* 1,837 -------- 8,456 THRIFTS & MORTGAGE FINANCE - 0.67% 30 Accredited Home Lenders Holding Company* 1,576 TRADING COMPANIES & DISTRIBUTORS - 3.17% 75 MSC Industrial Direct Co., Inc. - Class A 3,370 57 Watsco, Inc. 4,032 -------- 7,402 TRANSPORTATION - 0.77% 44 EGL, Inc.* 1,800 WIRELESS TELECOMMUNICATION SERVICES - 1.15% 112 Syniverse Holdings Inc.* 2,689 -------- TOTAL COMMON STOCKS (COST $215,399) 250,128 -------- SHORT TERM INVESTMENTS - 2.22% MONEY MARKET MUTUAL FUNDS - 2.22% 5,199 SEI Daily Income Trust Government Fund - Class B 5,199 -------- TOTAL SHORT TERM INVESTMENTS (COST $5,199) 5,199 -------- TOTAL INVESTMENTS (COST $220,598) - 109.21% 255,327 LIABILITIES IN EXCESS OF OTHER ASSETS - (9.21)% (21,540) -------- TOTAL NET ASSETS - 100.00% $233,787 -------- -------- * Non Income Producing See notes to financial statements. MDT FUNDS--SMALL CAP VALUE FUND MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE SEPTEMBER 15, 2005 THROUGH JANUARY 31, 2006* The Fund returned 13.80% over the period from its inception on September 15, 2005 through January 31, 2006. This result exceeded the 8.96% performance of the Russell 2000 Value Index and the 9.24% return for the Lipper Small-Cap Value Funds Index over the period. Although this is too short a period to draw any meaningful conclusions, we are nonetheless pleased with the strategy's initial results. Relative to the benchmark, the Russell 2000 Value Index, the Fund's investments in Information Technology provided the most positive contribution to performance during the period, followed by Basic Industries, while Public Utilities contributed negatively. Information Technology was helped by Plexus Corporation and Brightpoint, Inc., while Oregon Steel Mills, Inc. was among the Basic Industries standouts. Public Utilities was hurt by Atmos Energy Corporation. Currently, compared to the Index weightings, the largest sector overweight is Energy, followed by Public Utilities, while Basic Industries and Capital Goods are the most underweighted sectors. * The inception date for the Small Cap Value Fund was 9/15/2005. The Fund invests in small-capitalization companies, which tend to have limited liquidity and greater price volatility than large-capitalization companies. As a result, their performance can be more volatile and they face greater risk of business failure, which could increase the volatility of the Fund's portfolio. SECTOR BREAKDOWN (as % of investments) Basic Industries 6.7% Capital Goods 4.8% Consumer Cyclicals 12.1% Consumer Durables 3.9% Consumer Staples 2.3% Energy 17.3% Financial Services 25.2% Healthcare 1.0% Information Technology 13.5% Transportation 3.9% Public Utilities 9.3% MDT FUNDS--SMALL CAP VALUE FUND TOTAL RETURN FOR THE PERIOD ENDED JANUARY 31, 2006 SINCE INCEPTION (SEPTEMBER 15, 2005) -------------------- MDT Small Cap Value Fund--Institutional Class 13.80% Russell 2000 Value Index 8.96% Lipper Small-Cap Value Funds Index 9.24% Performance data quoted represents past performance and is no guarantee of future results. The principal value and investment return will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month-end may be obtained by calling 1-866-784-6867. Investment performance reflects contractual fee waivers in effect. In the absence of such waivers, total return would be reduced. The Advisor can recapture expenses or fees it has waived within a three year period. Please refer to the prospectus for details. The table does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The Fund invests in small-capitalization companies, which tend to have limited liquidity and greater price volatility than large-capitalization companies. As a result, their performance can be more volatile and they face greater risk of business failure, which could increase the volatility of the Fund's portfolio. The Russell 2000 Value Index is an unmanaged index that measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. The Lipper Small-Cap Value Funds Index is the average of the 30 largest funds in the Lipper Small-Cap Value Funds category. These funds, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) less than 250% of the dollar- weighted median of the smallest 500 of the middle 1,000 securities of S&P SuperComposite 1500 Index. Small-cap value funds typically have a below-average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P SmallCap 600 Index. One cannot invest directly in an index. MDT FUNDS--SMALL CAP VALUE FUND SCHEDULE OF INVESTMENTS JANUARY 31, 2006 (UNAUDITED) SHARES VALUE ------ ----- COMMON STOCKS - 116.72% AEROSPACE & DEFENSE - 0.42% 23 Kaman Corporation $ 485 CAPITAL MARKETS - 3.52% 82 Investment Technology Group, Inc.* 3,688 8 Piper Jaffray Companies, Inc.* 359 -------- 4,047 COMMERCIAL BANKS - 3.59% 3 BancFirst Corporation 249 23 Citizens Banking Corporation 640 8 City Holding Company 298 14 Community Bank System, Inc. 326 68 First BanCorp. 869 8 Park National Corporation 938 15 Susquehanna Bancshares, Inc. 362 15 WesBanco, Inc. 446 -------- 4,128 COMMERCIAL SERVICES & SUPPLIES - 4.17% 22 Banta Corporation 1,125 32 Brady Corporation - Class A 1,273 24 Heidrick & Struggles International, Inc.* 805 61 Spherion Corporation* 683 77 TeleTech Holdings, Inc.* 898 -------- 4,784 COMMUNICATIONS EQUIPMENT - 6.55% 86 Avocent Corporation* 2,861 91 Belden CDT Inc. 2,466 83 CommScope, Inc.* 1,835 20 Oplink Communications, Inc.* 357 -------- 7,519 CONSTRUCTION MATERIALS - 2.55% 18 Eagle Materials Inc. 2,932 DISTRIBUTORS - 1.38% 70 Brightpoint, Inc.* 1,581 DIVERSIFIED FINANCIAL SERVICES - 1.31% 38 GATX Corporation 1,509 DIVERSIFIED TELECOMMUNICATION SERVICES - 0.61% 21 Commonwealth Telephone Enterprises, Inc. 701 ELECTRIC UTILITIES - 3.49% 68 Duquesne Light Holdings Inc. 1,222 53 IDACORP, Inc. 1,678 45 PNM Resources Inc. 1,106 -------- 4,006 ELECTRICAL EQUIPMENT - 1.32% 36 Encore Wire Corporation* 978 18 Baldor Electric Company* 538 -------- 1,516 ELECTRONIC EQUIPMENT & INSTRUMENTS - 4.44% 88 Aeroflex Incorporated* 1,064 48 Agilysys, Inc. 1,017 57 Plexus Corporation* 1,614 8 Rofin-Sinar Technologies, Inc.* 382 50 Technitrol, Inc. 1,018 -------- 5,095 ENERGY EQUIPMENT & SERVICES - 11.14% 15 Dril-Quip, Inc.* 945 22 GulfMark Offshore, Inc.* 721 40 Helmerich & Payne, Inc. 3,134 73 Maverick Tube Corporation* 3,493 136 RPC, Inc. 4,500 -------- 12,793 FOOD & STAPLES RETAILING - 2.70% 88 Casey's General Stores, Inc. 2,239 15 Longs Drug Stores Corporation 525 8 Weis Markets, Inc. 336 -------- 3,100 GAS UTILITIES - 6.61% 67 Atmos Energy Corporation 1,761 29 The Laclede Group, Inc. 946 38 New Jersey Resources Corporation 1,727 28 Northwest Natural Gas Company 996 22 South Jersey Industries, Inc. 647 12 Southwest Gas Corporation 332 38 WGL Holdings Inc. 1,185 -------- 7,594 HEALTH CARE EQUIPMENT & SUPPLIES - 1.87% 15 Analogic Corporation 832 23 Greatbatch, Inc.* 599 20 ICU Medical, Inc.* 721 -------- 2,152 HOTELS RESTAURANTS & LEISURE - 1.11% 32 Jack in the Box Inc.* 1,272 HOUSEHOLD DURABLES - 3.68% 7 Cavco Industries, Inc.* 297 51 Furniture Brands International, Inc. 1,227 98 WCI Communities, Inc.* 2,699 -------- 4,223 INSURANCE - 11.15% 50 21st Century Insurance Group 812 53 AmerUs Group Co. 3,253 10 FBL Financial Group, Inc. - Class A 333 30 Horace Mann Educators Corporation 588 19 Infinity Property & Casualty Corporation 733 14 LandAmerica Financial Group, Inc. 924 53 Ohio Casualty Corporation 1,597 29 The Phoenix Companies, Inc. 438 9 ProAssurance Corporation* 461 8 RLI Corporation 437 15 Selective Insurance Group, Inc.* 870 10 State Auto Financial Corporation 385 23 Stewart Information Services Corporation 1,229 8 Triad Guaranty Inc.* 336 10 United Fire & Casualty Company* 410 -------- 12,806 INVESTMENT BANKING & BROKERAGE - 1.23% 124 Knight Capital Group, Inc.* 1,412 IT SERVICES - 1.96% 68 eFunds Corporation* 1,604 50 Sykes Enterprises, Incorporated* 650 -------- 2,254 LEISURE EQUIPMENT & PRODUCTS - 0.31% 23 Callaway Golf Company 351 MACHINERY - 0.80% 17 Tennant Company 921 METALS & MINING - 7.67% 45 Commercial Metals Company 2,130 15 Metal Management, Inc. 419 42 Oregon Steel Mills, Inc.* 1,729 14 Ryerson Inc. 432 46 Steel Dynamics, Inc. 2,135 95 Worthington Industries, Inc. 1,960 -------- 8,805 MULTILINE RETAIL - 1.17% 31 Conn's, Inc.* 1,348 OIL & GAS - 8.66% 6 Atlas America, Inc.* 422 93 Bois d'Arc Energy, Inc.* 1,750 15 Cabot Oil & Gas Corporation 774 54 Encore Acquisition Company* 1,952 37 St. Mary Land & Exploration Company 1,615 30 Stone Energy Corporation* 1,500 39 Swift Energy Company* 1,927 -------- 9,940 ROAD & RAIL - 3.72% 34 AMERCO* 2,755 26 Arkansas Best Corporation 1,113 15 SCS Transportation, Inc* 402 -------- 4,270 SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT - 1.41% 70 Amkor Technology, Inc.* 394 15 DSP Group, Inc.* 440 53 RF Micro Devices, Inc.* 386 29 Semitool, Inc.* 396 -------- 1,616 SPECIALTY RETAIL - 4.68% 63 The Cato Corporation - Class A 1,360 27 Charlotte Russe Holding Inc.* 442 14 The Dress Barn, Inc.* 646 36 Payless ShoeSource, Inc.* 877 71 Too Inc.* 2,054 -------- 5,379 TEXTILES, APPAREL & LUXURY GOODS - 0.65% 31 Kellwood Company 751 THRIFTS & MORTGAGE FINANCE - 8.17% 11 Anchor BanCorp Wisconsin, Inc. 343 71 Corus Bankshares, Inc. 4,559 32 Downey Financial Corp. 2,095 30 FirstFed Financial Corp.* 1,881 16 PFF Bancorp, Inc. 506 -------- 9,384 TRADING COMPANIES & DISTRIBUTORS - 1.55% 42 Applied Industrial Technologies, Inc. 1,785 TRANSPORTATION - 3.13% 88 EGL, Inc.* 3,600 -------- TOTAL COMMON STOCKS (COST $119,413) 134,059 -------- SHORT TERM INVESTMENTS - 2.13% MONEY MARKET MUTUAL FUNDS - 2.13% 2,448 SEI Daily Income Trust Government Fund - Class B 2,448 -------- TOTAL SHORT TERM INVESTMENTS (COST $2,448) 2,448 -------- TOTAL INVESTMENTS (COST $121,861) - 118.85% 136,507 LIABILITIES IN EXCESS OF OTHER ASSETS - (18.85)% (21,654) -------- TOTAL NET ASSETS - 100.00% $114,853 -------- -------- * Non Income Producing See notes to financial statements. MDT FUNDS--BALANCED GROWTH FUND MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE The Fund returned 6.19% for the six-month period ended January 31, 2006, easily beating both the 4.68% result for the S&P 500 Index and the 4.85% return for the Lipper Balanced Funds Index. Fund performance continues to surprise us in a positive manner; as we have mentioned previously, because of the strategy's broad diversification we do not generally expect to outperform a more narrow domestic equity index such as the S&P 500 in a period of rising U.S. markets. The Fund's allocation to U.S. equities was fairly static over the period at just over 50% of Fund assets. These investments, which are managed under our proprietary All Cap Core strategy, again outperformed the return on the Russell 3000 Index. Although the allocation to international equities was reduced marginally during the period to 4% of Fund assets, the performance was exceptional as international equities again outperformed the domestic market. Investments in real estate investment trusts were unchanged at 6% of Fund assets. These investments performed well, particularly late in the period on signs that the Federal Reserve's campaign to increase interest rates may be nearing an end. The Fund's allocation to fixed income hurt overall results, in that it underperformed the other allocations, but did outperform the overall bond market as an overweight position in mortgage-backed securities paid off when interest rate volatility remained subdued. The somewhat less certain state of the economy dictates that we continue to emphasize the Fund's diversified stance. The flat yield curve offers little incentive to accept interest rate risk and we are likely to maintain the current short duration position for the Fund's fixed income investments. As always, we will carefully monitor market conditions and stand ready to alter the Fund's allocations as warranted. The Fund may also invest in small- and medium-capitalization companies, which tend to have limited liquidity and greater price volatility than large- capitalization companies. The Fund may also invest in foreign securities, which may involve greater volatility and political, economic and currency risks and differences in accounting methods. Investments in debt securities typically decrease in value when interest rates rise. The risk is usually greater for longer-term debt securities. ASSET ALLOCATION BREAKDOWN (as % of investments) Short-Term Investments 2.8% REITs 6.0% Domestic Equity 53.4% Fixed Income 33.4% International Equity 4.4% MDT FUNDS--BALANCED GROWTH FUND MDT Balanced Lipper Balanced Date Growth Fund S&P 500 Index Funds Index ---- ----------- ------------- ----------- 10/1/2002 $10,000 $10,000 $10,000 1/31/2003 $10,292 $10,560 $10,389 7/31/2003 $11,418 $12,333 $11,509 1/31/2004 $13,163 $14,211 $12,838 7/31/2004 $13,173 $13,958 $12,691 1/31/2005 $14,335 $15,097 $13,608 7/31/2005 $15,387 $15,920 $14,162 1/31/2006 $16,340 $16,665 $14,849 This hypothetical chart assumes an initial gross investment of $10,000 made on 10/1/02 (commencement of operations). Returns include the reinvestment of all dividends. TOTAL RETURN FOR THE PERIODS ENDED JANUARY 31, 2006 ANNUALIZED SIX ONE SINCE INCEPTION MONTHS YEAR (OCTOBER 1, 2002) ------ ---- ----------------- MDT Balanced Growth Fund 6.19% 13.98% 15.87% S&P 500 Index 4.68% 10.38% 16.53% Lipper Balanced Funds Index 4.85% 9.11% 12.58% Performance data quoted represents past performance and is no guarantee of future results. The principal value and investment return will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month-end may be obtained by calling 1-866-784-6867. Investment performance reflects contractual fee waivers in effect. In the absence of such waivers, total return would be reduced. The Advisor can recapture expenses or fees it has waived within a three year period. Please refer to the prospectus for details. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The Fund may also invest in small- and medium-capitalization companies, which tend to have limited liquidity and greater price volatility than large- capitalization companies. The Fund may also invest in foreign securities, which may involve greater volatility and political, economic and currency risks and differences in accounting methods. Investments in debt securities typically decrease in value when interest rates rise. The risk is usually greater for longer-term debt securities. The S&P 500 Index consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market-value weighted index (stock price times number of shares outstanding), with each stock's weight in the Index proportionate to its market value. The "500" is one of the most widely used benchmarks of U.S. equity performance. The Lipper Balanced Funds Index is the average of the 30 largest funds in the Lipper Balanced Funds category. These funds, by portfolio practice, aim to conserve principal by maintaining at all times a balanced portfolio of both stocks and bonds. Typically the stock/bond ratio ranges around 60%/40%. One cannot invest directly in an index. MDT FUNDS--BALANCED GROWTH FUND SCHEDULE OF INVESTMENTS JANUARY 31, 2006 (UNAUDITED) SHARES VALUE ------ ----- COMMON STOCKS - 59.21% AEROSPACE & DEFENSE - 0.67% 300 Alliant Techsystems Inc.* $ 23,250 5,800 Honeywell International Inc. 222,836 600 Precision Castparts Corporation 29,970 2,100 Raytheon Company 86,037 600 Rockwell Collins, Inc. 28,152 2,100 United Technologies Corporation 122,577 ----------- 512,822 AIR FREIGHT & LOGISTICS - 0.12% 2,000 Ryder System, Inc. 89,400 AIRLINES - 0.31% 14,600 Southwest Airlines Co. 240,316 BEVERAGES - 0.03% 900 PepsiAmericas, Inc. 22,041 BIOTECHNOLOGY - 2.96% 16,800 Amgen Inc.* 1,224,552 11,800 Genentech, Inc.* 1,013,856 400 Techne Corporation* 22,740 ----------- 2,261,148 CAPITAL MARKETS - 4.71% 600 GFI Group Inc.* 32,754 7,600 The Goldman Sachs Group, Inc. 1,073,500 17,400 Merrill Lynch & Co., Inc. 1,306,218 19,400 Morgan Stanley 1,192,130 ----------- 3,604,602 CHEMICALS - 0.06% 700 Sigma-Aldrich Corporation 45,416 COMMERCIAL BANKS - 2.59% 6,500 AmSouth Bancorporation 179,465 5,600 Comerica Incorporated 310,632 2,800 Fifth Third Bancorp 105,196 700 Huntington Bancshares Incorporated 16,240 11,500 KeyCorp 406,985 16,800 National City Corporation 574,224 900 Regions Financial Corporation 29,862 1,800 SunTrust Banks, Inc. 128,610 600 UnionBanCal Corporation 40,254 3,500 Wachovia Corporation 191,905 ----------- 1,983,373 COMMERCIAL SERVICES & SUPPLIES - 0.89% 900 Adesa, Inc. 23,040 500 Administaff, Inc. 21,520 700 Equifax Inc. 26,824 1,200 Manpower Inc. 64,596 2,300 Monster Worldwide Inc.* 98,118 1,400 Republic Services, Inc. 52,990 4,100 Robert Half International Inc. 149,773 300 Stericycle, Inc.* 17,931 7,200 Waste Management, Inc. 227,376 ----------- 682,168 COMMUNICATIONS EQUIPMENT - 2.20% 3,100 Juniper Networks, Inc.* 56,203 33,900 QUALCOMM Incorporated 1,625,844 ----------- 1,682,047 COMPUTERS & PERIPHERALS - 1.21% 22,100 Hewlett-Packard Company 689,078 3,100 Lexmark International, Inc.* 150,567 1,300 Network Appliance, Inc.* 40,560 1,100 QLogic Corporation* 43,637 ----------- 923,842 CONSTRUCTION & ENGINEERING - 0.03% 300 EMCOR Group, Inc.* 24,606 CONSTRUCTION MATERIALS - 0.16% 2,000 Lafarge North America Inc. 123,240 CONSUMER FINANCE - 0.46% 3,200 AmeriCredit Corp.* 92,032 4,600 SLM Corporation 257,416 ----------- 349,448 CONTAINERS & PACKAGING - 0.02% 300 Temple-Inland Inc. 14,070 DIVERSIFIED FINANCIAL SERVICES - 3.23% 12,500 CIT Group Inc. 666,750 42,900 JPMorgan Chase & Co. 1,705,275 1,500 Moody's Corporation 94,980 ----------- 2,467,005 DIVERSIFIED TELECOMMUNICATION SERVICES - 0.21% 5,600 BellSouth Corporation 161,112 ELECTRIC UTILITIES - 0.47% 2,700 DTE Energy Company 113,940 1,700 Edison International 74,494 3,400 PG&E Corporation 126,854 1,000 Progress Energy, Inc. 43,620 ----------- 358,908 ELECTRICAL EQUIPMENT - 0.12% 200 Cooper Industries, Ltd. 16,330 1,100 Rockwell Automation, Inc. 72,677 ----------- 89,007 ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.44% 3,600 Ingram Micro Inc.* 69,660 5,100 Jabil Circuit, Inc.* 206,040 1,800 National Instruments Corporation 59,562 ----------- 335,262 ENERGY EQUIPMENT & SERVICES - 0.94% 8,700 BJ Services Company 352,263 900 Grant Prideco, Inc.* 45,081 400 Oceaneering International, Inc.* 23,764 900 Oil States International, Inc.* 36,810 5,400 Smith International, Inc. 243,000 400 W-H Energy Services, Inc.* 19,312 ----------- 720,230 FOOD PRODUCTS - 0.42% 3,300 General Mills, Inc. 160,413 2,200 The Hershey Company 112,640 1,900 Pilgrim's Pride Corporation 46,246 ----------- 319,299 HEALTH CARE EQUIPMENT & SUPPLIES - 0.30% 900 DENTSPLY International Inc. 48,330 700 Intuitive Surgical, Inc.* 96,355 600 Kyphon Inc.* 24,942 1,400 Waters Corporation* 58,730 ----------- 228,357 HEALTH CARE PROVIDERS & SERVICES - 0.46% 1,900 Laboratory Corporation of America Holdings* 111,435 1,300 Pharmaceutical Product Development, Inc. 89,934 2,000 WellPoint Inc.* 153,600 ----------- 354,969 HOTELS RESTAURANTS & LEISURE - 0.88% 600 Choice Hotels International, Inc. 28,518 4,000 International Game Technology 143,120 600 Landry's Restaurants, Inc. 18,384 700 Marriott International, Inc. - Class A* 46,648 600 Ruby Tuesday, Inc. 17,166 9,100 Starbucks Corporation* 288,470 2,700 Yum! Brands, Inc. 133,569 ----------- 675,875 HOUSEHOLD DURABLES - 2.36% 900 American Greetings Corporation 18,369 2,400 Beazer Homes USA, Inc. 174,816 3,800 Centex Corporation 271,282 10,100 D.R. Horton, Inc. 376,932 1,600 Harman International Industries, Incorporated 176,000 4,200 Lennar Corporation 262,752 8,200 Pulte Homes, Inc. 327,180 900 The Ryland Group, Inc. 65,124 2,000 Standard-Pacific Corp. 77,800 1,100 WCI Communities, Inc.* 30,294 200 William Lyon Homes, Inc.* 20,542 ----------- 1,801,091 HOUSEHOLD PRODUCTS - 0.52% 2,300 The Clorox Company 137,655 4,700 Colgate-Palmolive Company 257,983 ----------- 395,638 INDUSTRIAL CONGLOMERATES - 0.57% 6,000 3M Co. 436,500 INSURANCE - 7.57% 25,950 The Allstate Corporation 1,350,698 1,500 AMBAC Financial Group, Inc. 115,215 1,800 American Financial Group, Inc. 67,716 800 AmerUs Group Co. 49,096 4,200 Assurant, Inc. 192,864 8,500 The Chubb Corporation 801,975 400 The Commerce Group, Inc. 21,560 9,100 Hartford Financial Services Group, Inc. 748,293 800 Horace Mann Educators Corporation 15,672 300 LandAmerica Financial Group, Inc. 19,794 2,500 MBIA Inc. 153,900 25,200 Metlife, Inc. 1,264,032 1,400 Nationwide Financial Services, Inc. - Class A 59,584 500 Protective Life Corporation 22,475 500 Reinsurance Group of America, Incorporated 24,250 4,000 SAFECO Corporation 209,000 500 Selective Insurance Group, Inc. 29,000 6,400 The St. Paul Travelers Companies, Inc. 290,432 1,400 StanCorp Financial Group, Inc. 69,650 500 State Auto Financial Corporation 19,235 400 Stewart Information Services Corporation 21,380 700 Torchmark Corporation 39,270 4,050 W.R. Berkley Corporation 200,070 ----------- 5,785,161 INTERNET & CATALOG RETAIL - 0.13% 1,650 Coldwater Creek Inc.* 33,660 2,200 IAC/InterActiveCorp* 63,844 ----------- 97,504 INTERNET SOFTWARE & SERVICES - 0.07% 700 aQuantive, Inc.* 18,207 500 Websense, Inc.* 32,965 ----------- 51,172 IT SERVICES - 0.29% 800 Affiliated Computer Services, Inc.* 50,080 500 Alliance Data Systems Corporation* 21,125 2,300 Fiserv, Inc.* 101,154 600 Global Payments Inc. 30,558 800 VeriFone Holdings, Inc.* 20,416 ----------- 223,333 MACHINERY - 0.92% 6,200 Deere & Company 444,912 2,400 Joy Global Inc. 129,696 1,800 PACCAR Inc 125,280 ----------- 699,888 MARINE - 0.04% 500 Kirby Corporation* 28,065 MEDIA - 0.42% 400 John Wiley & Sons, Inc. 15,160 2,900 Omnicom Group Inc. 237,191 2,100 Univision Communications Inc. - Class A* 66,864 ----------- 319,215 METALS & MINING - 1.29% 500 Carpenter Technology Corporation 45,280 1,700 Commercial Metals Company 80,461 4,800 Nucor Corporation 404,304 1,000 Oregon Steel Mills, Inc.* 41,170 2,600 Peabody Energy Corporation 258,726 700 Ryerson Inc. 21,616 600 Schnitzer Steel Industries, Inc. - Class A 20,064 1,300 Steel Dynamics, Inc. 60,346 900 United States Steel Corporation 53,775 ----------- 985,742 MULTILINE RETAIL - 0.17% 600 Dollar Tree Stores, Inc.* 14,874 1,400 Family Dollar Stores, Inc. 33,530 2,300 Saks Incorporated* 44,413 300 Sears Holdings Corporation* 36,432 ----------- 129,249 MULTI-UTILITIES & UNREGULATED POWER - 0.20% 1,400 National Fuel Gas Company 46,060 2,200 ONEOK, Inc. 62,172 4,400 Reliant Energy Inc.* 44,528 ----------- 152,760 OIL & GAS - 10.07% 5,400 Amerada Hess Corporation 835,920 13,700 Anadarko Petroleum Corporation 1,477,134 11,400 Apache Corporation 861,042 33,600 ChevronTexaco Corporation 1,995,168 2,100 Kerr-McGee Corporation 231,819 9,400 Marathon Oil Corporation 722,578 3,600 Newfield Exploration Company* 188,640 11,600 Occidental Petroleum Corporation 1,133,436 1,600 OMI Corporation 28,096 600 Pioneer Natural Resources Company 31,860 2,000 Pogo Producing Company 119,980 700 Stone Energy Corporation* 35,007 800 Swift Energy Company* 39,536 ----------- 7,700,216 PAPER & FOREST PRODUCTS - 0.12% 3,100 Louisiana-Pacific Corporation 91,295 REAL ESTATE - 6.03% 5,750 Archstone-Smith Trust 269,445 2,700 Avalonbay Communities, Inc. 268,596 3,650 Boston Properties, Inc. 285,649 4,933 Brandywine Realty Trust 155,143 3,600 CenterPoint Properties Trust 178,704 5,950 Developers Diversified Realty Corporation 293,097 7,800 Duke Realty Corporation 282,984 6,100 Equity Residential 258,701 3,450 Federal Realty Investment Trust 230,529 7,400 General Growth Properties, Inc. 381,840 7,700 Health Care Property Investors, Inc. 213,675 2,800 Hospitality Properties Trust 120,036 9,000 Kimco Realty Corporation 315,810 5,000 Plum Creek Timber Company, Inc. 184,700 3,800 ProLogis 194,636 2,900 Public Storage, Inc. 210,453 10,450 Taubman Centers, Inc. 392,397 4,250 Vornado Realty Trust 375,445 ----------- 4,611,840 ROAD & RAIL - 0.18% 600 Arkansas Best Corporation 25,686 1,100 Burlington Northern Santa Fe Corporation 88,132 900 Swift Transportation Co., Inc.* 21,267 ----------- 135,085 SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT - 1.38% 4,000 Altera Corporation* 77,240 700 Freescale Semiconductor Inc.* 17,675 6,800 Linear Technology Corporation 253,028 5,900 Marvell Technology Group Ltd.* 403,678 1,500 Maxim Integrated Products, Inc.* 61,560 600 Microsemi Corporation* 18,264 1,700 Novellus Systems, Inc.* 48,195 2,500 NVIDIA Corporation* 112,400 800 OmniVision Technologies, Inc.* 20,184 1,400 Texas Instruments Incorporated 40,922 ----------- 1,053,146 SOFTWARE - 0.34% 2,100 Autodesk, Inc. 85,239 500 Fair Isaac Corporation 22,160 200 Quality Systems, Inc. 17,700 4,600 Red Hat, Inc.* 133,170 ----------- 258,269 SPECIALTY RETAIL - 0.95% 1,200 Borders Group, Inc. 29,544 3,600 Chico's FAS, Inc.* 156,816 500 The Children's Place Retail Stores, Inc.* 21,895 13,300 The Gap, Inc. 240,597 1,100 Guesso, Inc.* 46,673 700 Hibbett Sporting Goods, Inc.* 21,455 700 Select Comfort Corporation* 19,320 1,300 Staples, Inc. 30,823 5,500 The TJX Companies, Inc. 140,415 800 Zale Corporation* 19,608 ----------- 727,146 TEXTILES, APPAREL & LUXURY GOODS - 0.14% 600 Carter's, Inc.* 40,794 1,100 Coach, Inc.* 39,545 600 Columbia Sportswear Company* 30,990 ----------- 111,329 THRIFTS & MORTGAGE FINANCE - 1.26% 1,350 Astoria Financial Corporation 38,880 800 Downey Financial Corp. 52,384 800 FirstFed Financial Corp.* 50,160 4,700 Golden West Financial Corporation 331,914 3,100 MGIC Investment Corporation 204,631 2,900 The PMI Group, Inc. 125,367 2,800 Radian Group Inc. 160,244 ----------- 963,580 TRADING COMPANIES & DISTRIBUTORS - 0.27% 3,600 Fastenal Company 137,340 1,000 MSC Industrial Direct Co., Inc. - Class A 44,930 400 Watsco, Inc. 28,296 ----------- 210,566 WIRELESS TELECOMMUNICATION SERVICES - 0.03% 900 Syniverse Holdings Inc.* 21,609 ----------- TOTAL COMMON STOCKS (COST $37,031,180) 45,257,962 ----------- PRINCIPAL AMOUNT - --------- CORPORATE NOTES & BONDS - 4.15% The Bear Stearns Companies Inc. Medium-Term Floating Rate Notes $ 250,000 4.747%, 06/19/2006 250,283 Boeing Capital Corporation Senior Notes 125,000 5.650%, 05/15/2006 125,432 CIT Group, Inc. 200,000 2.875%, 09/29/2006 197,459 Ford Motor Credit Co. Notes 200,000 6.875%, 02/01/2006 200,000 General Motors Acceptance Corporation Notes 300,000 6.125%, 02/01/2007 294,851 GTE North, Inc. Notes 400,000 6.900%, 11/01/2008 412,377 Household Finance Corporation Notes 300,000 7.200%, 07/15/2006 303,007 Masco Corporation Notes 100,000 6.750%, 03/15/2006 100,202 Merrill Lynch & Co Inc. Floating Rate Notes 400,000 5.197%, 01/31/2008 399,459 Safeway, Inc. Notes 250,000 4.800%, 07/16/2007 248,693 SLM Corporation Notes 300,000 3.950%, 08/15/2008 291,704 TCI Communications, Inc. Senior Notes 250,000 6.875%, 02/15/2006 250,126 Washington Mutual, Inc. Notes 100,000 7.500%, 08/15/2006 101,406 ----------- TOTAL CORPORATE NOTES & BONDS (COST $3,221,092) 3,174,999 SHARES ------ EXCHANGE TRADED FUNDS - 4.42% EXCHANGE TRADED FUNDS - 4.42% 53,750 iShares MSCI EAFE Index Fund(1) 3,378,725 ----------- TOTAL EXCHANGE TRADED FUNDS (COST $1,798,467) 3,378,725 PRINCIPAL AMOUNT - --------- NON-AGENCY MORTGAGE & ASSET BACKED SECURITIES - 12.16% American Home Mortgage Investment Trust $1,000,000 Series 2004-3, 5.010%, 10/25/2034 984,311 Banc of America Commercial Mortgage Inc. 558,210 Series 2000-2, 7.020%, 09/15/2032 577,935 Bank of America Funding Corporation Mortgage Pass-Through Certificates 96,497 Series 2003-1, Class A1, 6.000%, 05/20/2033 94,595 Bear Stearns Asset Backed Securities, Inc. 518,425 Series 2005-AC6, Class 21PO, Principal Only, 09/25/2020 409,797 Bear Stearns Mortgage Securities, Inc. Mortgage Variable Rate Pass-Thru Certificates 7,081 Series 1997-6, Class 1-A, 6.729%, 03/25/2031 7,117 Chase Mortgage Finance Trust Mortgage Pass-Through Certificates 372,726 Series 2003-S1, 5.250%, 02/25/2018 371,971 Citicorp Mortgage Securities Inc. Pass-Through Certificates 1,000,000 Series 2003-11, Class 1A4, 5.250%, 12/25/2033 979,067 Community Program Loan Trust Asset-Backed Certificates 793,047 Series 1987-A, Class A4, 4.500%, 10/01/2018 780,353 CS First Boston Mortgage Securities Corporation Mortgage Backed Pass-Through Certificates: 65,905 Series 2002-HE4, Class AF, 5.510%, 08/25/2032 65,973 637,047 Series 2002-34, Class DB, 6.990%, 12/25/2032 (a) (Acquired 03/17/2005; Cost $497,139) 495,399 553,630 Series 2003-17, Class DB4, 5.382%, 06/25/2033 418,220 Indymac Home Equity Loan Asset-Backed Floating Step Rate Trust Certificates 278,987 Series 2004-C, Class 1A1, 4.840%, 03/25/2035 279,419 Master Asset Securitization Trust Collateralized Mortgage Obligation 745,083 Series 2003-6, Class 9A1, 4.250%, 07/25/2033 717,983 MMCA Automobile Trust Asset-Backed Certificates 452,714 Series 2002-2, Class C, 5.550%, 03/15/2010 446,848 Peoples Choice Home Loan Securities Trust Pass-Through Certificates 500,000 Series 2004-1, Class B1, 5.000%, 06/25/2034 473,530 Vendee Mortgage Trust Pass-Through Certificates 515,602 Series 1994-3A, Class 1ZB, 6.500%, 09/15/2024 531,036 WAMU Floating Rate Mortgage Pass-Through Certificates 1,000,000 Series 2003-AR9, Class 1A6, 4.052%, 09/25/2033 976,499 Wells Fargo Mortgage Backed Securities Trust Pass-Through Certificates 700,347 Series 2004-8, Class A6, 5.000%, 08/25/2019 685,131 ----------- TOTAL NON-AGENCY MORTGAGE & ASSET BACKED SECURITIES (COST $9,295,749) 9,295,184 UNITED STATES GOVERNMENT & AGENCY ISSUES - 16.94% FHLMC Bond 1,000,000 3.500%, 09/08/2006 992,847 FHLMC Guaranteed Real Estate Mortgage Investment Conduit Inverse Variable Rate Pass-Thru Certificates 275,378 Series 2648, Class TS, 10.833%, 07/15/2033 276,816 FHLMC Guaranteed Real Estate Mortgage Investment Conduit Pass-Thru Certificates: 125,445 Series 2366, Class VG, 6.000%, 06/15/2011 126,582 280,421 Series 2676, Class JA, 4.000%, 08/15/2013 278,808 54,173 Series 1595, Class D, 7.000%, 10/15/2013 55,210 150,000 Series 2672, Class NB, 4.000%, 05/15/2016 139,974 168,455 Series 2636, Class Z, 4.500%, 06/15/2018 158,058 500,000 Series 2663, Class LN, 4.500%, 01/15/2022 496,566 21,898 Series 1311, Class K, 7.000%, 07/15/2022 21,867 42,848 Series 1384, Class D, 7.000%, 09/15/2022 42,841 125,000 Series 2626, Class NA, 5.000%, 06/15/2023 124,628 157,309 Series 1568, Class D, 6.750%, 08/15/2023 156,918 750,000 Series 1686, Class PJ, 5.000%, 02/15/2024 744,357 639,682 Series 2410, Class OE, 6.375%, 02/15/2032 653,879 645,029 Series 2647, Class A, 3.250%, 04/15/2032 601,878 75,000 Series 2497, Class JH, 6.000%, 09/15/2032 76,110 FHLMC Participation Certificates: 276,750 Pool #E0-1538, 5.000%, 12/01/2018 273,974 185,688 Pool #42-0173, 5.750%, 04/01/2030 187,516 FNMA Guaranteed Mortgage Pass-Thru Certificates: 34,359 Pool #408761, 7.000%, 12/01/2012 35,475 13,867 Pool #512255, 7.500%, 09/01/2014 14,558 87,215 Pool #609554, 7.500%, 10/01/2016 91,563 437,181 Pool #754886, 4.500%, 09/01/2018 430,764 FNMA Guaranteed Real Estate Mortgage Investment Conduit Inverse Variable Rate Pass-Thru Certificates 105,271 Series 1993-113, Class SB, 9.749%, 07/25/2023 106,719 FNMA Guaranteed Real Estate Mortgage Investment Conduit Pass-Thru Certificates: 27,617 Series 2001-37, Class GA, 8.000%, 07/25/2016 28,024 150,000 Series 2003-32, Class KC, 5.000%, 05/25/2018 146,133 494,689 Series 2002-1, Class HC, 6.500%, 02/25/2022 509,631 122,850 Series 2003-79, Class NM, 4.000%, 05/25/2022 117,970 215,240 Series G92-44, Class ZQ, 8.000%, 07/25/2022 228,108 84,365 Series 1992-188, Class PZ, 7.500%, 10/25/2022 90,148 344,849 Series 2003-66, Class MB, 3.500%, 05/25/2023 322,475 840,000 Series 1997-81, Class PD, 6.350%, 12/18/2027 862,113 75,243 Series 2001-61, Class TD, 6.000%, 07/25/2030 75,105 203,129 Series 2002-22, Class G, 6.500%, 04/25/2032 208,595 361,542 Series 2003-28, Class GA, 4.000%, 10/25/2032 344,962 468,976 Series 2003-49, Class JE, 3.000%, 04/25/2033 427,619 25,924 Series 2003-35, Class UC, 3.750%, 05/25/2033 24,525 1,033,722 Series 2003-42, Class CA, 4.000%, 05/25/2033 995,583 FNMA Notes 2,000,000 5.250%, 01/15/2009 2,027,452 GNMA Guaranteed Real Estate Mortgage Investment Conduit Pass-Thru Certificates 322,474 Series 1996-10, Class PD, 7.500%, 06/20/2026 337,250 31,484 Series 1999-29, Class PB, 7.250%, 07/16/2028 32,146 76,857 Series 2002-17, Class B, 6.000%, 03/20/2032 78,153 ----------- TOTAL UNITED STATES GOVERNMENT & AGENCY ISSUES (COST $13,051,228) 12,943,900 SHARES ------ SHORT TERM INVESTMENTS - 2.78% MONEY MARKET MUTUAL FUNDS - 0.11% 86,637 SEI Daily Income Trust Government Fund - Class B 86,637 PRINCIPAL AMOUNT - --------- UNITED STATES GOVERNMENT & AGENCY ISSUES - 2.67% $2,040,000 FHLB Discount Note, 4.192%, 02/01/2006 2,040,000 ----------- TOTAL SHORT TERM INVESTMENTS (COST $2,126,637) 2,126,637 ----------- TOTAL INVESTMENTS (COST $66,524,353) - 99.66% 76,177,407 OTHER ASSETS IN EXCESS OF LIABILITIES - 0.34% 257,027 ----------- TOTAL NET ASSETS - 100.00% $76,434,434 ----------- ----------- * Non Income Producing (1) Underlying securities are stocks of foreign companies (a) Restricted Security See notes to financial statements. MDT FUNDS--SHORT-TERM BOND FUND MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE The Fund returned 1.36% for the six-month period ended January 31, 2006, which was in line with the 1.25% result for the Lipper Short Investment Grade Debt Funds Index and the 1.51% performance of the Citigroup 1-year Treasury Index. This was an eventful period for the bond market, highlighted by another five Federal Reserve short-term rate hikes which raised the benchmark Federal Funds Rate to 4.50%. A flat yield curve, which features longer-term yields that are in line with short-term rates, has resulted as market participants begin to anticipate an end to the Fed's rate hiking campaign. An emphasis on mortgage-backed securities and a conservative interest rate risk position paid off during the period. The Fed has been very deliberate and clear in expressing its intentions, which has resulted in declining interest rate volatility in the longer part of the market even as short-term rates have increased. This benefited the Fund's mortgage-backed investments, which perform well in such an environment. The increase in short-term rates helped performance overall as maturing instruments were reinvested at higher rates. Credit sensitive instruments performed well, although the allocation to such securities was minimal as available yields remain unattractive relative to risk- free government-issued investments. The atypical shape of the curve presents a challenge for fixed income market participants. At the short end of the curve where this strategy is focused, the environment is somewhat less disrupted and the increased level of short-term rates over the historically low levels of the past few years provides an opportunity for better returns. We will continue to emphasize AAA-rated mortgage-and asset-backed securities so long as instruments bearing credit risk offer returns that in our view are inadequate for the inherent risk. We will tactfully adjust the Fund's overall exposure to interest rates to best take advantage of the current shape of the yield curve. Investments in debt securities typically decrease in value when interest rates rise. The risk is usually greater for longer-term debt securities. SECURITY TYPE BREAKDOWN (as % of investments) Corporate Notes & Bonds 9.2% U.S. Government Securities 34.6% Non-Agency Mortgage & Asset Backed Securities 50.6% Short-Term Investments 5.6% MDT FUNDS--SHORT-TERM BOND FUND Lipper Short MDT Short-Term Citigroup 1-Year Investment Grade Date Bond Fund Treasury Index Debt Funds Index ---- --------- -------------- ---------------- 10/1/2002 $10,000 $10,000 $10,000 1/31/2003 $10,017 $10,072 $10,126 7/31/2003 $10,082 $10,145 $10,233 1/31/2004 $10,160 $10,223 $10,411 7/31/2004 $10,168 $10,245 $10,430 1/31/2005 $10,280 $10,295 $10,546 7/31/2005 $10,389 $10,394 $10,625 1/31/2006 $10,551 $10,531 $10,758 This hypothetical chart assumes an initial gross investment of $10,000 made on 10/1/02 (commencement of operations). Returns include the reinvestment of all dividends. TOTAL RETURN FOR THE PERIODS ENDED JANUARY 31, 2006 ANNUALIZED SIX ONE SINCE INCEPTION MONTHS YEAR (OCTOBER 1, 2002) ------ ---- ----------------- MDT Short-Term Bond Fund 1.36% 2.44% 1.57% Citigroup 1-Year Treasury Index 1.51% 2.49% 1.62% Lipper Short Investment Grade Debt Funds Index 1.25% 2.01% 2.21% Performance data quoted represents past performance and is no guarantee of future results. The principal value and investment return will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month-end may be obtained by calling 1-866-784-6867. Investment performance reflects contractual fee waivers in effect. In the absence of such waivers, total return would be reduced. The Advisor can recapture expenses or fees it has waived within a three year period. Please refer to the prospectus for details. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. The Citigroup 1-Year Treasury Benchmark Index ("Citigroup 1-Year Treasury Index") is an unmanaged index generally representative of the average yield on one-year Treasury bills. The Lipper Short Investment Grade Debt Funds Index is the average of the 30 largest funds in the Lipper Short Investment Grade Debt Funds category. These Funds, by portfolio practice, invests at least 65% of its assets in investment grade debt issues (rated in top four grades) with dollar-weighted average maturities of less than three years. One cannot invest directly in an index. MDT FUNDS--SHORT-TERM BOND FUND SCHEDULE OF INVESTMENTS JANUARY 31, 2006 (UNAUDITED) PRINCIPAL AMOUNT VALUE - --------- ----- CORPORATE NOTES & BONDS - 9.15% The Bear Stearns Companies Inc. Medium-Term Floating Rate Notes $ 500,000 4.747%, 06/19/2006 $ 500,566 Boeing Capital Corporation Senior Notes 174,000 5.650%, 05/15/2006 174,602 CIT Group, Inc. 300,000 2.875%, 09/29/2006 296,189 General Motors Acceptance Corporation Notes 300,000 6.125%, 02/01/2007 294,852 Masco Corporation Notes 300,000 6.750%, 03/15/2006 300,607 Merrill Lynch & Co Inc. Floating Rate Notes 375,000 5.197%, 01/31/2008 374,493 Morgan Stanley Floating Rate Notes 400,000 4.800%, 03/27/2006 400,106 SLM Corporation Notes 290,000 3.950%, 08/15/2008 281,980 TCI Communications, Inc. Senior Notes 250,000 6.875%, 02/15/2006 250,126 Washington Mutual, Inc. Notes 400,000 7.500%, 08/15/2006 405,622 ----------- TOTAL CORPORATE NOTES & BONDS (COST $3,306,669) 3,279,143 NON-AGENCY MORTGAGE & ASSET BACKED SECURITIES - 34.44% American Home Mortgage Investment Trust 1,500,000 Series 2004-3, 5.010%, 10/25/2034 1,476,466 Americredit Automobile Receivables Trust 390,692 Series 2002-C, Class A4, 3.550%, 02/06/2009 387,532 Banc of America Mortgage Securities, Inc. Variable Rate Pass-Through Certificates 308,543 Series 2003-B, Class 2A2, 4.413%, 03/25/2033 304,619 Capital One Auto Finance Trust Asset-Backed Certificates 1,000,000 Series 2003-A, Class A4A, 2.470%, 01/15/2010 983,007 Citicorp Mortgage Securities Inc. Pass-Through Certificates 836,724 Series 2004-5, 5.250%, 08/25/2034 828,157 Community Program Loan Trust Asset-Backed Certificates 793,047 Series 1987-A, Class A4, 4.500%, 10/01/2018 780,353 Countrywide Alternative Loan Trust Mortgage Pass-Through Certificates 480,223 Series 2003-J3, Class 2A1, 6.250%, 12/25/2033 480,653 CS First Boston Mortgage Securities Corporation Mortgage Backed Pass-Through Certificates: 78,954 Series 2002-26, Class 3A5, 6.260%, 10/25/2032 83,134 455,034 Series 2002-34, Class DB, 6.990%, 12/25/2032 (a) (Acquired 03/17/2005; Cost $355,099) 353,856 473,620 Series 2003-17, 5.382%, 06/25/2033 357,779 200,000 Series 2003-11, Class 1A35, 5.500%, 06/25/2033 197,065 DaimlerChrysler Auto Trust Asset-Backed Certificates 1,000,000 Series 2004-C, Class A4, 3.280%, 12/08/2009 971,596 Indymac Home Equity Loan Asset-Backed Floating Step Rate Trust Certificates 278,987 Series 2004-C, Class 1A1, 4.840%, 03/25/2035 279,419 Master Asset Securitization Trust Collateralized Mortgage Obligation 745,083 Series 2003-6, Class 9A1, 4.250%, 07/25/2033 717,983 MMCA Automobile Trust Asset-Backed Certificates 422,533 Series 2002-2, Class C, 5.550%, 03/15/2010 417,058 Onyx Acceptance Owner Trust Asset-Backed Notes 422,410 Series 2002-C, Class A4, 4.070%, 04/15/2009 422,278 Peoples Choice Home Loan Securities Trust Pass-Through Certificates 500,000 Series 2004-1, Class B1, 5.000%, 06/25/2034 473,530 Residential Funding Mortgage Securities I, Inc. Mortgage Pass-Through Certificates 86,061 Series 2003-S7, Class A20, 4.000%, 05/25/2033 83,627 Ryland Acceptance Corporation Four Mortgage Pass-Through Certificates 677,535 Series 40, 8.950%, 06/01/2017 689,016 Vendee Mortgage Trust Pass-Through Certificates 1,031,204 Series 1994-3A, Class 1ZB, 6.500%, 09/15/2024 1,062,073 WFS Financial Owner Trust Auto Receivable Backed Notes 1,000,000 Series 2003-2, Class A4, 2.410%, 12/20/2010 986,327 ----------- TOTAL NON-AGENCY MORTGAGE & ASSET BACKED SECURITIES (COST $12,418,322) 12,335,528 UNITED STATES GOVERNMENT & AGENCY ISSUES - 50.34% 1,000,000 FHLB Bond 3.000%, 05/15/2006 995,341 FHLMC Guaranteed Real Estate Mortgage Investment Conduit Inverse Variable Rate Pass-Thru Certificates 172,318 Series 2648, Class TS, 10.833%, 07/15/2033 173,217 FHLMC Guaranteed Real Estate Mortgage Investment Conduit Pass-Thru Certificates: 98,559 Series 1211, Class L, 7.000%, 03/15/2007 98,438 109,079 Series 1624, Class KZ, 6.000%, 12/15/2008 109,894 560,842 Series 2676, Class JA, 4.000%, 08/15/2013 557,617 148,309 Series 1596, Class D, 6.500%, 10/15/2013 151,673 276,282 Series 1595, Class D, 7.000%, 10/15/2013 281,572 200,000 Series 2695, Class DB, 4.000%, 09/15/2015 194,988 343,237 Series 2345, Class PQ, 6.500%, 08/15/2016 353,325 544,306 Series 2632, Class A, 4.000%, 01/15/2018 523,419 14,863 Series 141, Class D, 5.000%, 05/15/2021 14,834 4,932 Series 1096, Class E, 7.000%, 06/15/2021 4,925 1,000,000 Series 2663, Class LN, 4.500%, 01/15/2022 993,133 200,000 Series 1686, Class PJ, 5.000%, 02/15/2024 198,495 439,745 Series 2756, Class NA, 5.000%, 02/15/2024 431,774 262,103 Series 2091, Class PG, 6.000%, 11/15/2028 266,617 646,897 Series 2694, Class BA, 4.000%, 06/15/2031 628,948 645,029 Series 2647, Class A, 3.250%, 04/15/2032 601,878 FHLMC Participation Certificates: 174,142 Pool #M9-0767, 4.500%, 11/01/2007 173,211 173,541 Pool #M9-0766, 5.000%, 11/01/2007 173,725 39,468 Pool #A0-1379, 8.500%, 10/01/2010 40,698 56,708 Pool #E6-5440, 7.500%, 11/01/2010 57,796 305,893 Pool #E9-9748, 8.000%, 11/01/2015 319,316 62,957 Pool #G3-0067, 7.500%, 03/01/2017 66,371 415,126 Pool #E0-1538, 5.000%, 12/01/2018 410,961 137,935 Pool #A0-1858, 8.500%, 07/01/2021 151,767 106,148 Pool #C9-0493, 6.500%, 11/01/2021 109,511 278,532 Pool #42-0173, 5.750%, 04/01/2030 281,274 FHLMC Variable Rate Participation Certificates: 50,391 Pool #39-0260, 4.296%, 10/01/2030 50,352 23,412 Pool #42-0196, 5.312%, 11/01/2030 23,534 FNMA Guaranteed Mortgage Pass-Thru Certificates: 626,741 Pool #254863, 4.000%, 08/01/2013 604,048 94,822 Pool #313806, 7.500%, 02/01/2014 96,139 44,140 Pool #512255, 7.500%, 09/01/2014 46,340 200,265 Pool #609554, 7.500%, 10/01/2016 210,250 FNMA Guaranteed Real Estate Mortgage Investment Conduit Inverse Variable Rate Pass-Thru Certificates: 16,458 Series 1993-179, Class FO, 4.690%, 10/25/2023 16,533 FNMA Guaranteed Real Estate Mortgage Investment Conduit Pass-Thru Certificates: 455,220 Series 1993-068, Class PL, 7.000%, 05/25/2008 460,764 85,000 Series 1993-135, Class PJ, 6.500%, 07/25/2008 86,714 172,369 Series 1994-007, Class PG, 6.500%, 01/25/2009 174,281 98,579 Series 1993-204, Class VE, 6.100%, 02/25/2009 99,755 250,000 Series 1993-049, Class H, 7.000%, 04/25/2013 259,034 200,000 Series 2002-43, Class B, 6.000%, 07/25/2017 204,793 474,653 Series 1990-28, Class X, 9.000%, 03/25/2020 514,429 266,713 Series G-41, Class PT, 7.500%, 10/25/2021 275,005 10,716 Series 1991-141, Class PZ, 8.000%, 10/25/2021 11,509 555,990 Series G92-44, Class ZQ, 8.000%, 07/25/2022 589,232 254,256 Series 1992-162, Class D, 7.000%, 09/25/2022 264,378 81,529 Series 1993-025, Class J, 7.500%, 03/25/2023 85,340 249,348 Series 1993-113, Class SB, 9.749%, 07/25/2023 252,776 1,500,000 Series 1997-81, Class PD, 6.350%, 12/18/2027 1,539,487 517,700 Series 2003-47, Class FP, 4.880%, 09/25/2032 519,500 468,976 Series 2003-49, Class JE, 3.000%, 04/25/2033 427,619 259,245 Series 2003-35, Class UC, 3.750%, 05/25/2033 245,248 FNMA Guaranteed Real Estate Mortgage Investment Conduit Variable Rate Pass-Thru Certificates 1,033,722 Series 2003-42, Class CA, 4.000%, 05/25/2033 995,583 1,000,000 Series 2003-W12, Class LN, 4.500%, 06/25/2043 992,732 FNMA Guaranteed Variable Rate Mortgage Pass-Thru Certificates 201,733 Pool #316302, 6.825%, 11/01/2018 212,491 GNMA Guaranteed Pass-Thru Certificates 9,105 Pool #365841, 7.000%, 09/15/2008 9,302 9,100 Pool #413575, 7.000%, 12/15/2010 9,403 GNMA Guaranteed Real Estate Mortgage Investment Conduit Pass-Thru Certificates 386,142 Series 2000-9, Class PB, 7.500%, 06/16/2026 389,835 ----------- TOTAL UNITED STATES GOVERNMENT & AGENCY ISSUES (COST $18,211,870) 18,031,124 SHARES ------ SHORT TERM INVESTMENTS - 5.60% MONEY MARKET MUTUAL FUNDS - 0.24% 87,512 SEI Daily Income Trust Government Fund - Class B 87,512 PRINCIPAL AMOUNT - --------- UNITED STATES GOVERNMENT & AGENCY ISSUES - 5.36% FHLB Discount Notes: $1,000,000 4.313%, 04/11/2006 991,643 928,000 4.192%, 02/01/2006 928,000 ----------- TOTAL UNITED STATES GOVERNMENT & AGENCY ISSUES 1,919,643 ----------- TOTAL SHORT TERM INVESTMENTS (COST $2,007,155) 2,007,155 ----------- TOTAL INVESTMENTS (COST $35,944,016) - 99.53% 35,652,950 OTHER ASSETS IN EXCESS OF LIABILITIES - 0.47% 167,911 ----------- TOTAL NET ASSETS - 100.00% $35,820,861 ----------- ----------- (a) Restricted Security See notes to financial statements. MDT FUNDS FUND EXPENSE EXAMPLES As a mutual fund shareholder, you incur two types of costs: (1) transaction costs such as initial sales charges (loads) on purchase payments and contingent deferred sales charges on redemptions and (2) ongoing costs, including management fees, distribution and service (12b-1) fees and other fund expenses. The following examples are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000 invested at the beginning of the most recent six-month period (or since the inception of the Class) and held for the entire period (August 1, 2005-January 31, 2006). The table on the following pages illustrates the Funds' costs in two ways: BASED ON ACTUAL FUND RETURN. This section provides information about actual values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the section under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. BASED ON HYPOTHETICAL 5% RETURN. This section provides information about hypothetical account values and hypothetical expenses based on the Funds' actual expense ratios and an assumed rate of return of 5% per year before expenses, which is not the Funds' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second section is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. The calculations assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions. ACCOUNT VALUE ACCOUNT VALUE EXPENSES PAID BEGINNING ENDING DURING PERIOD* ANNUALIZED 8/1/05 1/31/06 8/1/05-1/31/06 EXPENSE RATIO ------------- ------------- ------------------- ------------- BASED ON ACTUAL FUND RETURNS - ---------------------------- ALL CAP CORE FUND Institutional Class $1,000.00 $1,076.20 $ 6.54 1.25% Class A 1,000.00 1,074.30 7.84 1.50% BALANCED GROWTH FUND Institutional Class 1,000.00 1,061.90 6.50 1.25% SHORT-TERM BOND FUND Institutional Class 1,000.00 1,013.60 4.82 0.95%
* Expenses are equal to the Funds' annualized expense ratio by class multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period (184), then divided by the number of days in the most recent 12-month period (365). ACCOUNT VALUE ACCOUNT VALUE EXPENSES PAID BEGINNING ENDING DURING PERIOD** ANNUALIZED 9/15/05 1/31/06 9/15/05-1/31/06 EXPENSE RATIO ------------- ------------- -------------------- ------------- ALL CAP CORE FUND Class C $1,000.00 $1,072.70 $ 8.82 2.25% TAX AWARE/ALL CAP CORE FUND Institutional Class 1,000.00 1,074.00 7.06 1.80% Class A 1,000.00 1,073.00 8.03 2.05% Class C 1,000.00 1,070.00 10.96 2.80% LARGE CAP GROWTH FUND Institutional Class 1,000.00 1,072.00 7.05 1.80% Class A 1,000.00 1,071.00 8.03 2.05% Class C 1,000.00 1,068.00 10.95 2.80% MID CAP GROWTH FUND Institutional Class 1,000.00 1,126.00 7.23 1.80% Class A 1,000.00 1,125.00 8.24 2.05% Class C 1,000.00 1,122.00 11.23 2.80% SMALL CAP CORE FUND Institutional Class 1,000.00 1,175.00 7.40 1.80% Class A 1,000.00 1,173.00 8.42 2.05% Class C 1,000.00 1,171.00 11.49 2.80% SMALL CAP GROWTH FUND Institutional Class 1,000.00 1,162.00 7.36 1.80% Class A 1,000.00 1,161.00 8.37 2.05% Class C 1,000.00 1,157.00 11.42 2.80% SMALL CAP VALUE FUND Institutional Class 1,000.00 1,138.00 7.28 1.80% Class A 1,000.00 1,136.00 8.28 2.05% Class C 1,000.00 1,133.00 11.29 2.80% BALANCED GROWTH FUND Class A 1,000.00 1,055.60 5.83 1.50% Class C 1,000.00 1,052.30 8.73 2.25% SHORT-TERM BOND FUND Class A 1,000.00 1,004.70 4.55 1.20% Class C 1,000.00 1,009.07 7.36 1.95%
** Expenses are equal to the Funds' annualized expense ratio by class multiplied by the average account value over the period, multiplied by the number of days since inception (138), then divided by the number of days in the most recent 12-month period (365). ACCOUNT VALUE ACCOUNT VALUE EXPENSES PAID BEGINNING ENDING DURING PERIOD* ANNUALIZED 8/1/05 1/31/06 8/1/05-1/31/06 EXPENSE RATIO ------------- ------------- ------------------- ------------- BASED ON HYPOTHETICAL 5% YEARLY RETURNS - --------------------------------------- ALL CAP CORE FUND Institutional Class $1,000.00 $1,018.90 $ 6.36 1.25% Class A 1,000.00 1,017.64 7.63 1.50% BALANCED GROWTH FUND Institutional Class 1,000.00 1,018.90 6.36 1.25% SHORT-TERM BOND FUND Institutional Class 1,000.00 1,020.42 4.84 0.95%
* Expenses are equal to the Funds' annualized expense ratio by class multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period (184), then divided by the number of days in the most recent 12-month period (365). ACCOUNT VALUE ACCOUNT VALUE EXPENSES PAID BEGINNING ENDING DURING PERIOD** ANNUALIZED 9/15/05 1/31/06 9/15/05-1/31/06 EXPENSE RATIO ------------- ------------- -------------------- ------------- ALL CAP CORE FUND Class C $1,000.00 $1,007.56 $ 8.54 2.25% TAX AWARE/ALL CAP CORE FUND Institutional Class 1,000.00 1,009.83 6.84 1.80% Class A 1,000.00 1,008.57 7.78 2.05% Class C 1,000.00 1,004.79 10.61 2.80% LARGE CAP GROWTH FUND Institutional Class 1,000.00 1,009.83 6.84 1.80% Class A 1,000.00 1,008.57 7.78 2.05% Class C 1,000.00 1,004.79 10.61 2.80% MID CAP GROWTH FUND Institutional Class 1,000.00 1,009.83 6.84 1.80% Class A 1,000.00 1,008.57 7.78 2.05% Class C 1,000.00 1,004.79 10.61 2.80% SMALL CAP CORE FUND Institutional Class 1,000.00 1,009.83 6.84 1.80% Class A 1,000.00 1,008.57 7.78 2.05% Class C 1,000.00 1,004.79 10.61 2.80% SMALL CAP GROWTH FUND Institutional Class 1,000.00 1,009.83 6.84 1.80% Class A 1,000.00 1,008.57 7.78 2.05% Class C 1,000.00 1,004.79 10.61 2.80% SMALL CAP VALUE FUND Institutional Class 1,000.00 1,009.83 6.84 1.80% Class A 1,000.00 1,008.57 7.78 2.05% Class C 1,000.00 1,004.79 10.61 2.80% BALANCED GROWTH FUND Class A 1,000.00 1,011.34 5.70 1.50% Class C 1,000.00 1,007.56 8.54 2.25% SHORT-TERM BOND FUND Class A 1,000.00 1,012.85 4.57 1.20% Class C 1,000.00 1,009.07 7.41 1.95%
** Expenses are equal to the Funds' annualized expense ratio by class multiplied by the average account value over the period, multiplied by the number of days since inception (138), then divided by the number of days in the most recent 12-month period (365). MDT FUNDS STATEMENTS OF ASSETS AND LIABILITIES JANUARY 31, 2006 (UNAUDITED) TAX AWARE/ LARGE CAP ALL CAP CORE ALL CAP CORE GROWTH FUND FUND FUND ------------- ------------ --------- ASSETS Investments in securities at market value* $104,221,277 $1,428,699 $432,217 Receivable for investments sold 3,759,531 39,999 22,450 Receivable for capital shares issued 2,327,248 73,142 -- Dividends and interest receivable 49,015 805 305 Receivable from Advisor -- 2,020 -- Other assets 70,537 25,667 31,621 ------------ ---------- -------- Total assets 110,427,608 1,570,332 486,593 ------------ ---------- -------- LIABILITIES Payable to Adviser 27,304 -- 38,574 Payable for 12b-1 fees 41,434 597 5 Payable to the custodian -- 10,927 1,585 Payable for investments purchased 6,878,718 114,761 22,655 Payable for capital shares repurchased 45,832 -- -- Accrued expenses and other liabilities 170,161 6,209 13,528 ------------ ---------- -------- Total liabilities 7,163,449 132,494 76,347 ------------ ---------- -------- NET ASSETS $103,264,159 $1,437,838 $410,246 ------------ ---------- -------- ------------ ---------- -------- NET ASSETS CONSIST OF: Paid in capital $ 88,625,663 $1,332,327 $379,250 Undistributed net investment income -- -- -- Accumulated net realized gain (loss) on investments 2,710,848 (8,479) 12,927 Net unrealized appreciation (depreciation) on investments 11,927,648 113,990 18,069 ------------ ---------- -------- Net assets $103,264,159 $1,437,838 $410,246 ------------ ---------- -------- ------------ ---------- -------- * Cost of Investments $ 92,293,629 $1,314,709 $414,148 ------------ ---------- -------- ------------ ---------- -------- INSTITUTIONAL CLASS: Net assets $ 43,004,518 $ 706,220 $408,107 Shares outstanding of beneficial interest (unlimited shares, $0.01 par value) 2,762,887 65,752 38,085 Net asset value, offering and redemption price per share $ 15.57 $ 10.74 $ 10.72 ------------ ---------- -------- ------------ ---------- -------- CLASS A: Net assets $ 52,917,348 $ 638,535 $ 1,071 Shares outstanding of beneficial interest (unlimited shares, $0.01 par value) 3,415,412 59,495 100 Net asset value and redemption price per share $ 15.49 $ 10.73 $ 10.71 ------------ ---------- -------- ------------ ---------- -------- Offering price (Net asset value divided by 0.9425 or 0.9775 for the Short-Term Bond Fund) $ 16.44 $ 11.38 $ 11.36 ------------ ---------- -------- ------------ ---------- -------- CLASS C: Net assets $ 7,342,293 $ 93,083 $ 1,068 Shares outstanding of beneficial interest (unlimited shares, $0.01 par value) 474,985 8,700 100 Net asset value, offering and redemption (may be subject to a contingent deferred sales charge) price per share $ 15.46 $ 10.70 $ 10.68 ------------ ---------- -------- ------------ ---------- --------
See notes to financial statements. MDT FUNDS STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) JANUARY 31, 2006 (UNAUDITED) MID CAP SMALL CAP SMALL CAP SMALL CAP BALANCED SHORT-TERM GROWTH CORE GROWTH VALUE GROWTH BOND FUND FUND FUND FUND FUND FUND ------- --------- --------- --------- -------- ---------- $339,757 $310,739 $255,327 $136,507 $76,177,407 $35,652,950 8,339 16,095 6,058 5,341 1,584,116 -- -- 17,500 -- -- 195,424 -- 168 66 17 64 195,940 209,523 -- -- -- -- -- -- 24,621 24,621 24,621 24,621 42,088 35,654 -------- -------- -------- -------- ----------- ----------- 372,885 369,021 286,023 166,533 78,194,975 35,898,127 -------- -------- -------- -------- ----------- ----------- 39,323 38,109 38,360 39,159 27,147 5,542 13 29 5 7 34 12 1,159 5,982 1,656 826 213 -- 8,366 17,217 5,727 5,215 1,596,724 -- -- -- -- -- -- -- 6,045 6,404 6,488 6,473 136,423 71,712 -------- -------- -------- -------- ----------- ----------- 54,906 67,741 52,236 51,680 1,760,541 77,266 -------- -------- -------- -------- ----------- ----------- $317,979 $301,280 $233,787 $114,853 $76,434,434 $35,820,861 -------- -------- -------- -------- ----------- ----------- -------- -------- -------- -------- ----------- ----------- $280,027 $265,681 $197,701 $100,804 $65,257,612 $37,283,563 -- -- -- -- 140,686 4,824 885 4,819 1,357 (597) 1,383,082 (1,176,460) 37,067 30,780 34,729 14,646 9,653,054 (291,066) -------- -------- -------- -------- ----------- ----------- $317,979 $301,280 $233,787 $114,853 $76,434,434 $35,820,861 -------- -------- -------- -------- ----------- ----------- -------- -------- -------- -------- ----------- ----------- $302,690 $279,959 $220,598 $121,861 $66,524,353 $35,944,016 -------- -------- -------- -------- ----------- ----------- -------- -------- -------- -------- ----------- ----------- $302,723 $197,094 $231,469 $110,903 $76,017,174 $35,809,377 26,876 16,773 19,920 9,749 5,716,273 3,779,006 $ 11.26 $ 11.75 $ 11.62 $ 11.38 $ 13.30 $ 9.48 -------- -------- -------- -------- ----------- ----------- -------- -------- -------- -------- ----------- ----------- $ 14,134 $ 72,209 $ 1,161 $ 2,817 $ 189,349 $ 10,478 1,256 6,154 100 248 14,238 1,105 $ 11.25 $ 11.73 $ 11.61 $ 11.36 $ 13.30 $ 9.48 -------- -------- -------- -------- ----------- ----------- -------- -------- -------- -------- ----------- ----------- $ 11.94 $ 12.45 $ 12.32 $ 12.05 $ 14.11 $ 9.70 -------- -------- -------- -------- ----------- ----------- -------- -------- -------- -------- ----------- ----------- $ 1,122 $ 31,977 $ 1,157 $ 1,133 $ 227,911 $ 1,006 100 2,731 100 100 17,161 106 $ 11.22 $ 11.71 $ 11.57 $ 11.33 $ 13.28 $ 9.49 -------- -------- -------- -------- ----------- ----------- -------- -------- -------- -------- ----------- -----------
See notes to financial statements. MDT FUNDS STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE PERIOD FOR THE SIX SEPTEMBER 15, 2005(1) MONTHS ENDED THROUGH JANUARY 31, 2006 JANUARY 31, 2006 ------------------------------ ---------------- TAX AWARE/ LARGE CAP ALL CAP CORE ALL CAP CORE GROWTH FUND FUND FUND ---------------- ------------ --------- INVESTMENT INCOME: Dividend income $ 568,251 $ 5,040 $ 1,191 Interest income 38,409 528 283 ---------- -------- ------- Total investment income 606,660 5,568 1,474 ---------- -------- ------- EXPENSES: Investment advisory fees 305,199 3,640 1,086 Distribution fees - Class A 47,250 365 1 Distribution fees - Class C 6,551 238 4 Shareholder servicing and accounting 109,082 1,109 763 Administration fees 52,199 509 334 Federal and state registration fees 23,510 18,090 18,215 Professional fees 54,166 3,496 3,496 Custody fees 14,362 4,965 3,890 Trustees' fees and expenses 18,672 1,327 1,327 Reports to shareholders 7,364 238 313 Other 6,898 145 170 ---------- -------- ------- Total expenses before reimbursements 645,253 34,122 29,599 Expenses reimbursed by the Adviser (82,788) (26,968) (26,986) ---------- -------- ------- Net expenses 562,465 7,154 2,613 ---------- -------- ------- NET INVESTMENT INCOME (LOSS) 44,195 (1,586) (1,139) ---------- -------- ------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on investments 3,082,534 (8,479) 14,066 Change in unrealized appreciation/depreciation on investments 3,174,524 113,990 18,069 ---------- -------- ------- Net realized and unrealized gain (loss) on investments 6,257,058 105,511 32,135 ---------- -------- ------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $6,301,253 $103,925 $30,996 ---------- -------- ------- ---------- -------- -------
See notes to financial statements. MDT FUNDS STATEMENTS OF OPERATIONS (CONTINUED) (UNAUDITED) FOR THE PERIOD SEPTEMBER 15, 2005(1) FOR THE SIX MONTHS ENDED THROUGH JANUARY 31, 2006 JANUARY 31, 2006 ----------------------------------------------------- --------------------------- MID CAP SMALL CAP SMALL CAP SMALL CAP BALANCED SHORT-TERM GROWTH CORE GROWTH VALUE GROWTH BOND FUND FUND FUND FUND FUND FUND ------- --------- --------- --------- -------- ---------- $ 839 $ 566 $ 315 $ 459 $ 451,387 $ -- 207 170 143 78 695,017 846,861 ------- ------- ------- ------- ---------- --------- 1,046 736 458 537 1,146,404 846,861 ------- ------- ------- ------- ---------- --------- 973 901 957 483 273,240 74,908 9 14 1 2 5 9 4 15 4 4 29 4 684 590 606 477 97,915 53,990 284 234 259 209 46,727 24,042 18,015 18,015 18,015 18,015 20,446 14,736 3,496 3,496 3,496 3,496 38,166 21,548 3,290 4,490 4,190 3,390 15,400 6,958 1,327 1,327 1,302 1,302 11,468 6,774 338 388 413 413 4,062 3,464 170 145 145 145 5,828 2,744 ------- ------- ------- ------- ---------- --------- 28,590 29,615 29,388 27,936 513,286 209,177 (26,631) (28,289) (28,005) (27,235) (57,852) (31,258) ------- ------- ------- ------- ---------- --------- 1,959 1,326 1,383 701 455,434 177,919 ------- ------- ------- ------- ---------- --------- (913) (590) (925) (164) 690,970 668,942 ------- ------- ------- ------- ---------- --------- 1,798 4,819 2,282 (597) 2,806,747 (63,328) 37,067 30,780 34,729 14,646 1,034,882 (122,311) ------- ------- ------- ------- ---------- --------- 38,865 35,599 37,011 14,049 3,841,629 (185,639) ------- ------- ------- ------- ---------- --------- $37,952 $35,009 $36,086 $13,885 $4,532,599 $ 483,303 ------- ------- ------- ------- ---------- --------- ------- ------- ------- ------- ---------- ---------
(1) Commencement of operations See notes to financial statements. MDT FUNDS--ALL CAP CORE FUND STATEMENTS OF CHANGES IN NET ASSETS FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED JANUARY 31, 2006 JULY 31, 2005 ------------------------ ------------------ (UNAUDITED) OPERATIONS: Net investment income $ 44,195 $ 79,323 Net realized gain on investments 3,082,534 5,555,605 Change in unrealized appreciation/depreciation on investments 3,174,524 5,661,269 ------------ ----------- Net increase in net assets resulting from operations 6,301,253 11,296,197 ------------ ----------- CAPITAL SHARE TRANSACTIONS: (NOTE 3) Net increase in net assets resulting from capital share transactions 27,632,532 25,583,920 ------------ ----------- DISTRIBUTIONS TO INSTITUTIONAL CLASS SHAREHOLDERS:(1) From net investment income (42,291) (118,739) From net capital gains (2,304,162) (2,524,687) ------------ ----------- (2,346,453) (2,643,426) ------------ ----------- DISTRIBUTIONS TO CLASS A SHAREHOLDERS:(2) From net investment income (11,232) (35,220) From net capital gains (2,312,212) (1,244,084) ------------ ----------- (2,323,444) (1,279,304) ------------ ----------- DISTRIBUTIONS TO CLASS C SHAREHOLDERS FROM NET CAPITAL GAINS (117,957) -- ------------ ----------- Total increase in net assets 29,145,931 32,957,387 NET ASSETS: Beginning of period 74,118,228 41,160,841 ------------ ----------- End of period $103,264,159 $74,118,228 ------------ ----------- ------------ -----------
(1) Formerly the Memorial Class. (2) Formerly the Adviser Class. See notes to financial statements. MDT FUNDS--TAX/AWARE ALL CAP CORE, LARGE CAP GROWTH FUND, MID CAP GROWTH FUND STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 ---------------------------------------------- (UNAUDITED) TAX AWARE/ LARGE CAP MID CAP ALL CAP CORE GROWTH GROWTH FUND FUND FUND ------------ --------- ------- OPERATIONS: Net investment loss $ (1,586) $ (1,139) $ (913) Net realized gain (loss) on investments (8,479) 14,066 1,798 Change in unrealized appreciation/depreciation on investments 113,990 18,069 37,067 ---------- -------- -------- Net increase in net assets resulting from operations 103,925 30,996 37,952 ---------- -------- -------- CAPITAL SHARE TRANSACTIONS: (NOTE 3) Net increase in net assets resulting from capital share transactions 1,333,913 379,250 280,027 ---------- -------- -------- Total increase in net assets 1,437,838 410,246 317,979 NET ASSETS: Beginning of period -- -- -- ---------- -------- -------- End of period $1,437,838 $410,246 $317,979 ---------- -------- -------- ---------- -------- --------
(1) Commencement of operations See notes to financial statements. MDT FUNDS--SMALL CAP CORE FUND, SMALL CAP GROWTH FUND, SMALL CAP VALUE FUND STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 -------------------------------------------- (UNAUDITED) SMALL CAP SMALL CAP SMALL CAP CORE GROWTH VALUE FUND FUND FUND --------- --------- --------- OPERATIONS: Net investment loss $ (590) $ (925) $ (164) Net realized gain (loss) on investments 4,819 2,282 (597) Change in unrealized appreciation/depreciation on investments 30,780 34,729 14,646 -------- -------- -------- Net increase in net assets resulting from operations 35,009 36,086 13,885 -------- -------- -------- CAPITAL SHARE TRANSACTIONS: (NOTE 3) Net increase in net assets resulting from capital share transactions 266,271 197,701 100,968 -------- -------- -------- Total increase in net assets 301,280 233,787 114,853 NET ASSETS: Beginning of period -- -- -- -------- -------- -------- End of period $301,280 $233,787 $114,853 -------- -------- -------- -------- -------- --------
(1) Commencement of operations See notes to financial statements. MDT FUNDS--BALANCED GROWTH FUND STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED JANUARY 31, 2006 JULY 31, 2005 ------------------------ ------------------ (UNAUDITED) OPERATIONS: Net investment income $ 690,970 $ 919,713 Net realized gain on investments 2,806,747 4,595,895 Change in unrealized appreciation/depreciation on investments 1,034,882 3,979,958 ----------- ----------- Net increase in net assets resulting from operations 4,532,599 9,495,566 ----------- ----------- CAPITAL SHARE TRANSACTIONS: (NOTE 3) Net increase in net assets resulting from capital share transactions 8,511,410 11,497,448 ----------- ----------- DISTRIBUTIONS TO INSTITUTIONAL CLASS SHAREHOLDERS: From net investment income (964,275) (648,786) From net capital gains (4,964,729) (4,839,470) ----------- ----------- (5,929,004) (5,488,256) ----------- ----------- DISTRIBUTIONS TO CLASS A SHAREHOLDERS: From net investment income (12) -- From net capital gains (68) -- ----------- ----------- (80) -- ----------- ----------- DISTRIBUTIONS TO CLASS C SHAREHOLDERS: From net investment income (11) -- From net capital gains (68) -- ----------- ----------- (79) -- ----------- ----------- Total increase in net assets 7,114,846 15,504,758 NET ASSETS: Beginning of period 69,319,588 53,814,830 ----------- ----------- End of period (includes undistributed net investment income of $140,686 and $420,725, respectively) $76,434,434 $69,319,588 ----------- ----------- ----------- -----------
See notes to financial statements. MDT FUNDS--SHORT-TERM BOND FUND STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED JANUARY 31, 2006 JULY 31, 2005 ------------------------ ------------------ (UNAUDITED) OPERATIONS: Net investment income $ 668,942 $ 1,043,095 Net realized loss on investments (63,328) (55,274) Change in unrealized appreciation/depreciation on investments (122,311) (203,357) ----------- ----------- Net increase in net assets resulting from operations 483,303 784,464 ----------- ----------- CAPITAL SHARE TRANSACTIONS: (NOTE 3) Net decrease in net assets resulting from capital share transactions (1,316,180) (160,377) ----------- ----------- DISTRIBUTIONS TO INSTITUTIONAL CLASS SHAREHOLDERS FROM NET INVESTMENT INCOME (733,631) (1,142,042) ----------- ----------- DISTRIBUTIONS TO CLASS A SHAREHOLDERS FROM NET INVESTMENT INCOME (158) -- ----------- ----------- DISTRIBUTIONS TO CLASS C SHAREHOLDERS FROM NET INVESTMENT INCOME (12) -- ----------- ----------- Total decrease in net assets (1,566,678) (517,955) NET ASSETS: Beginning of period 37,387,539 37,905,494 ----------- ----------- End of period (includes undistributed net investment income of $4,824 and $35,563, respectively) $35,820,861 $37,387,539 ----------- ----------- ----------- -----------
See notes to financial statements. MDT FUNDS--ALL CAP CORE FUND FINANCIAL HIGHLIGHTS INSTITUTIONAL CLASS(6) ------------------------------------------------------------- FOR THE PERIOD FOR THE FOR THE FOR THE OCTOBER 1, SIX MONTHS YEAR YEAR 2002(1) ENDED ENDED ENDED THROUGH JANUARY 31, JULY 31, JULY 31, JULY 31, 2006 2005 2004 2003 ----------- -------- -------- -------------- (UNAUDITED) PER SHARE DATA: Net asset value, beginning of period $ 15.32 $ 13.55 $ 11.76 $ 10.00 ----------- ----------- ----------- ----------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.02(5) 0.03(5) 0.04 0.03 Net realized and unrealized gain on investments 1.12 2.87 2.05 1.75 ----------- ----------- ----------- ----------- Total from investment operations 1.14 2.90 2.09 1.78 ----------- ----------- ----------- ----------- LESS DISTRIBUTIONS: Dividends from net investment income (0.02) (0.05) (0.03) (0.01) Distributions from net capital gains (0.87) (1.08) (0.27) (0.01) ----------- ----------- ----------- ----------- Total dividends and distributions (0.89) (1.13) (0.30) (0.02) ----------- ----------- ----------- ----------- Net asset value, end of period $ 15.57 $ 15.32 $ 13.55 $ 11.76 ----------- ----------- ----------- ----------- Total return 7.62%(2) 22.14% 17.78% 17.75%(2) SUPPLEMENTAL DATA AND RATIOS: Net assets, end of period $43,004,518 $43,782,095 $31,532,451 $23,455,374 Ratio of expenses to average net assets before waiver or recovery of waived expenses by Adviser 1.45%(3) 1.29% 1.40% 2.18%(3) Ratio of expenses to average net assets after waiver or recovery of waived expenses by Adviser 1.25%(3) 1.25% 1.25% 1.33%(3) Ratio of net investment income (loss) to average net assets before waiver or recovery of waived expenses by Adviser 0.04%(3) 0.19% 0.15% (0.48)%(3) Ratio of net investment income to average net assets after waiver or recovery of waived expenses by Adviser 0.24%(3) 0.23% 0.30% 0.37%(3) Portfolio turnover rate(4) 94.35%(2) 204.49% 95.80% 171.64%(2)
(1) Commencement of operations. (2) Not Annualized. (3) Annualized. (4) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. (5) Net investment income per share is calculated by dividing the net investment income by the average shares outstanding throughout the period. (6) Formerly the Memorial Class. See notes to financial statements. MDT FUNDS--ALL CAP CORE FUND FINANCIAL HIGHLIGHTS CLASS A(6) ------------------------------------------------------------- FOR THE PERIOD FOR THE FOR THE FOR THE FEBRUARY 12, SIX MONTHS YEAR YEAR 2003(1) ENDED ENDED ENDED THROUGH JANUARY 31, JULY 31, JULY 31, JULY 31, 2006 2005 2004 2003 ----------- -------- -------- -------------- (UNAUDITED) PER SHARE DATA: Net asset value, beginning of period $ 15.26 $ 13.52 $ 11.75 $ 10.17 ----------- ----------- ---------- ---------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.00)(5) (0.00)(5) 0.01 0.00 Net realized and unrealized gain on investments 1.10 2.85 2.05 1.58 ----------- ----------- ---------- ---------- Total from investment operations 1.10 2.85 2.06 1.58 ----------- ----------- ---------- ---------- LESS DISTRIBUTIONS: Dividends from net investment income -- (0.03) (0.02) -- Distributions from net capital gains (0.87) (1.08) (0.27) -- ----------- ----------- ---------- ---------- Total dividends and distributions (0.87) (1.11) (0.29) -- ----------- ----------- ---------- ---------- Net asset value, end of period $ 15.49 $ 15.26 $ 13.52 $ 11.75 ----------- ----------- ---------- ---------- ----------- ----------- ---------- ---------- Total return(7) 7.43%(2) 21.79% 17.53% 15.54%(2) SUPPLEMENTAL DATA AND RATIOS: Net assets, end of period $52,917,348 $30,336,133 $9,628,390 $1,584,985 Ratio of expenses to average net assets before waiver or recovery of waived expenses by Adviser 1.70%(3) 1.54% 1.65% 2.34%(3) Ratio of expenses to average net assets after waiver or recovery of waived expenses by Adviser 1.50%(3) 1.50% 1.50% 1.50%(3) Ratio of net investment loss to average net assets before waiver or recovery of waived expenses by Adviser (0.21)%(3) (0.06)% (0.10)% (0.63)%(3) Ratio of net investment income (loss) to average net assets after waiver or recovery of waived expenses by Adviser (0.01)%(3) (0.02)% 0.05% 0.21%(3) Portfolio turnover rate(4) 94.35%(2) 204.49% 95.80% 171.64%(2)
(1) Commencement of operations. (2) Not Annualized. (3) Annualized. (4) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. (5) Net investment income per share is calculated by dividing the net investment income by the average shares outstanding throughout the period. (6) Formerly the Adviser Class. (7) Calculation does not reflect the deduction of the 5.75% sales load. See notes to financial statements. MDT FUNDS--ALL CAP CORE FUND FINANCIAL HIGHLIGHTS CLASS C -------------------------- FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 -------------------------- (UNAUDITED) PER SHARE DATA: Net asset value, beginning of period $ 15.25 ---------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss(5) (0.04) Net realized and unrealized gain on investments 1.12 ---------- Total from investment operations 1.08 ---------- LESS DISTRIBUTIONS: Dividends from net investment income -- Distributions from net capital gains (0.87) ---------- Total dividends and distributions (0.87) ---------- Net asset value, end of period $ 15.46 ---------- ---------- Total Return(2)(6) 7.27% SUPPLEMENTAL DATA AND RATIOS: Net assets, end of period $7,342,293 Ratio of expenses to average net assets before reimbursement by Adviser(3) 2.53% Ratio of expenses to average net assets after reimbursement by Adviser(3) 2.25% Ratio of net investment loss to average net assets before reimbursement by Adviser(3) (1.05)% Ratio of net investment loss to average net assets after reimbursement by Adviser(3) (0.77)% Portfolio turnover rate(2)(4) 94.35% (1) Commencement of operations. (2) Not annualized. (3) Annualized. (4) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. (5) Net investment income per share is calculated by dividing net investment income by the average shares outstanding throughout the period. (6) Calculation does not reflect the deduction of any deferred sales charge. See notes to financial statements. MDT FUNDS--TAX AWARE/ALL CAP CORE FUND FINANCIAL HIGHLIGHTS (UNAUDITED) INSTITUTIONAL CLASS CLASS A CLASS C ------------- ------- ------- FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 -------------------------------------------------- PER SHARE DATA: Net asset value, beginning of period $ 10.00 $ 10.00 $ 10.00 -------- -------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss(2) (0.01) (0.03) (0.06) Net realized and unrealized gain on investments 0.75 0.76 0.76 -------- -------- ------- Total from investment operations 0.74 0.73 0.70 -------- -------- ------- Net asset value, end of period $ 10.74 $ 10.73 $ 10.70 -------- -------- ------- -------- -------- ------- Total Return(3) 7.40% 7.30%(5) 7.00%(6) SUPPLEMENTAL DATA AND RATIOS: Net assets, end of period $706,220 $638,535 $93,083 Ratio of expenses to average net assets before reimbursement by Adviser(4) 9.21% 9.46% 10.21% Ratio of expenses to average net assets after reimbursement by Adviser(4) 1.80% 2.05% 2.80% Ratio of net investment loss to average net assets before reimbursement by Adviser(4) (7.68)% (7.93)% (8.68)% Ratio of net investment loss to average net assets after reimbursement by Adviser(4) (0.27)% (0.52)% (1.27)% Portfolio turnover rate(3)(7) 62.24% 62.24% 62.24%
(1) Commencement of operations. (2) Net investment income per share is calculated by dividing net investment income by the average shares outstanding throughout the period. (3) Not annualized. (4) Annualized. (5) Calculation does not reflect the deduction of the 5.75% sales load. (6) Calculation does not reflect the deduction of any deferred sales charge. (7) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. See notes to financial statements. MDT FUNDS--LARGE CAP GROWTH FUND FINANCIAL HIGHLIGHTS (UNAUDITED) INSTITUTIONAL CLASS CLASS A CLASS C ------------- ------- ------- FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 -------------------------------------------------- PER SHARE DATA: Net asset value, beginning of period $ 10.00 $ 10.00 $ 10.00 -------- -------- -------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss(2) (0.03) (0.04) (0.07) Net realized and unrealized gain on investments 0.75 0.75 0.75 -------- -------- -------- Total from investment operations 0.72 0.71 0.68 -------- -------- -------- Net asset value, end of period $ 10.72 $ 10.71 $ 10.68 -------- -------- -------- -------- -------- -------- Total Return(3) 7.20% 7.10%(5) 6.80%(6) SUPPLEMENTAL DATA AND RATIOS: Net assets, end of period $408,107 $1,071 $1,068 Ratio of expenses to average net assets before reimbursement by Adviser(4) 20.43% 20.68% 21.43% Ratio of expenses to average net assets after reimbursement by Adviser(4) 1.80% 2.05% 2.80% Ratio of net investment loss to average net assets before reimbursement by Adviser(4) (19.41)% (19.66)% (20.41)% Ratio of net investment loss to average net assets after reimbursement by Adviser(4) (0.78)% (1.03)% (1.78)% Portfolio turnover rate(3)(7) 131.46% 131.46% 131.46%
(1) Commencement of operations. (2) Net investment income per share is calculated by dividing net investment income by the average shares outstanding throughout the period. (3) Not annualized. (4) Annualized. (5) Calculation does not reflect the deduction of the 5.75% sales load. (6) Calculation does not reflect the deduction of any deferred sales charge. (7) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. See notes to financial statements. MDT FUNDS--MID CAP GROWTH FUND FINANCIAL HIGHLIGHTS (UNAUDITED) INSTITUTIONAL CLASS CLASS A CLASS C ------------- ------- ------- FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 -------------------------------------------------- PER SHARE DATA: Net asset value, beginning of period $ 10.00 $ 10.00 $ 10.00 -------- -------- -------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss(2) (0.03) (0.04) (0.07) Net realized and unrealized gain on investments 1.29 1.29 1.29 -------- -------- -------- Total from investment operations 1.26 1.25 1.22 -------- -------- -------- Net asset value, end of period $ 11.26 $ 11.25 $ 11.22 -------- -------- -------- -------- -------- -------- Total Return(3) 12.60% 12.50%(5) 12.20%(6) SUPPLEMENTAL DATA AND RATIOS: Net assets, end of period $302,723 $14,134 $1,122 Ratio of expenses to average net assets before reimbursement by Adviser(4) 26.44% 26.69% 27.44% Ratio of expenses to average net assets after reimbursement by Adviser(4) 1.80% 2.05% 2.80% Ratio of net investment loss to average net assets before reimbursement by Adviser(4) (25.48)% (25.73)% (26.48)% Ratio of net investment loss to average net assets after reimbursement by Adviser(4) (0.84)% (1.09)% (1.84)% Portfolio turnover rate(3)(7) 77.42% 77.42% 77.42%
(1) Commencement of operations. (2) Net investment income per share is calculated by dividing net investment income by the average shares outstanding throughout the period. (3) Not annualized. (4) Annualized. (5) Calculation does not reflect the deduction of the 5.75% sales load. (6) Calculation does not reflect the deduction of any deferred sales charge. (7) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. See notes to financial statements. MDT FUNDS--SMALL CAP CORE FUND FINANCIAL HIGHLIGHTS (UNAUDITED) INSTITUTIONAL CLASS CLASS A CLASS C ------------- ------- ------- FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 -------------------------------------------------- PER SHARE DATA: Net asset value, beginning of period $ 10.00 $ 10.00 $ 10.00 -------- -------- -------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss(2) (0.04) (0.05) (0.09) Net realized and unrealized gain on investments 1.79 1.78 1.80 -------- -------- -------- Total from investment operations 1.75 1.73 1.71 -------- -------- -------- Net asset value, end of period $ 11.75 $ 11.73 $ 11.71 -------- -------- -------- -------- -------- -------- Total Return(3) 17.50% 17.30%(5) 17.10%(6) SUPPLEMENTAL DATA AND RATIOS: Net assets, end of period $197,094 $72,209 $31,977 Ratio of expenses to average net assets before reimbursement by Adviser(4) 41.04% 41.29% 42.04% Ratio of expenses to average net assets after reimbursement by Adviser(4) 1.80% 2.05% 2.80% Ratio of net investment loss to average net assets before reimbursement by Adviser(4) (40.02)% (40.27)% (41.02)% Ratio of net investment loss to average net assets after reimbursement by Adviser(4) (0.78)% (1.03)% (1.78)% Portfolio turnover rate(3)(7) 89.31% 89.31% 89.31%
(1) Commencement of operations. (2) Net investment income per share is calculated by dividing net investment income by the average shares outstanding throughout the period. (3) Not annualized. (4) Annualized. (5) Calculation does not reflect the deduction of the 5.75% sales load. (6) Calculation does not reflect the deduction of any deferred sales charge. (7) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. See notes to financial statements. MDT FUNDS--SMALL CAP GROWTH FUND FINANCIAL HIGHLIGHTS (UNAUDITED) INSTITUTIONAL CLASS CLASS A CLASS C ------------- ------- ------- FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 -------------------------------------------------- PER SHARE DATA: Net asset value, beginning of period $ 10.00 $ 10.00 $ 10.00 -------- -------- -------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss(2) (0.05) (0.06) (0.09) Net realized and unrealized gain on investments 1.67 1.67 1.66 -------- -------- -------- Total from investment operations 1.62 1.61 1.57 -------- -------- -------- Net asset value, end of period $ 11.62 $ 11.61 $ 11.57 -------- -------- -------- -------- -------- -------- Total Return(3) 16.20% 16.10%(5) 15.70%(6) SUPPLEMENTAL DATA AND RATIOS: Net assets, end of period $231,469 $1,161 $1,157 Ratio of expenses to average net assets before reimbursement by Adviser(4) 38.38% 38.63% 39.38% Ratio of expenses to average net assets after reimbursement by Adviser(4) 1.80% 2.05% 2.80% Ratio of net investment loss to average net assets before reimbursement by Adviser(4) (37.78)% (38.03)% (38.78)% Ratio of net investment loss to average net assets after reimbursement by Adviser(4) (1.20)% (1.45)% (2.20)% Portfolio turnover rate(3)(7) 78.05% 78.05% 78.05%
(1) Commencement of operations. (2) Net investment income per share is calculated by dividing net investment income by the average shares outstanding throughout the period. (3) Not annualized. (4) Annualized. (5) Calculation does not reflect the deduction of the 5.75% sales load. (6) Calculation does not reflect the deduction of any deferred sales charge. (7) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. See notes to financial statements. MDT FUNDS--SMALL CAP VALUE FUND FINANCIAL HIGHLIGHTS (UNAUDITED) INSTITUTIONAL CLASS CLASS A CLASS C ------------- ------- ------- FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 -------------------------------------------------- PER SHARE DATA: Net asset value, beginning of period $ 10.00 $ 10.00 $ 10.00 -------- -------- -------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss(2) (0.01) (0.03) (0.06) Net realized and unrealized gain on investments 1.39 1.39 1.39 -------- -------- -------- Total from investment operations 1.38 1.36 1.33 -------- -------- -------- Net asset value, end of period $ 11.38 $ 11.36 $ 11.33 -------- -------- -------- -------- -------- -------- Total Return(3) 13.80% 13.60%(5) 13.30%(6) SUPPLEMENTAL DATA AND RATIOS: Net assets, end of period $110,903 $2,817 $1,133 Ratio of expenses to average net assets before reimbursement by Adviser(4) 72.32% 72.57% 73.32% Ratio of expenses to average net assets after reimbursement by Adviser(4) 1.80% 2.05% 2.80% Ratio of net investment loss to average net assets before reimbursement by Adviser(4) (70.93)% (71.18)% (71.93)% Ratio of net investment loss to average net assets after reimbursement by Adviser(4) (0.41)% (0.66)% (1.41)% Portfolio turnover rate(3)(7) 77.80% 77.80% 77.80%
(1) Commencement of operations. (2) Net investment income per share is calculated by dividing net investment income by the average shares outstanding throughout the period. (3) Not annualized. (4) Annualized. (5) Calculation does not reflect the deduction of the 5.75% sales load. (6) Calculation does not reflect the deduction of any deferred sales charge. (7) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. See notes to financial statements. MDT FUNDS--BALANCED GROWTH FUND FINANCIAL HIGHLIGHTS (CONTINUED) INSTITUTIONAL CLASS ------------------- FOR THE PERIOD FOR THE FOR THE FOR THE OCTOBER 1, SIX MONTHS YEAR YEAR 2002(1) ENDED ENDED ENDED THROUGH JANUARY 31, JULY 31, JULY 31, JULY 31, 2006(6) 2005 2004 2003 ------------ -------- -------- -------------- (UNAUDITED) PER SHARE DATA: Net asset value, beginning of period $ 13.60 $ 12.82 $ 11.36 $ 10.00 ----------- ----------- ----------- ----------- INCOME FROM INVESTMENT OPERATIONS: Net investment income(2) 0.13 0.20 0.13 0.13 Net realized and unrealized gain on investments 0.68 1.87 1.61 1.28 ----------- ----------- ----------- ----------- Total from investment operations 0.81 2.07 1.74 1.41 ----------- ----------- ----------- ----------- LESS DISTRIBUTIONS: Dividends from net investment income (0.18) (0.15) (0.15) (0.05) Distributions from net capital gains (0.93) (1.14) (0.13) (0.00) ----------- ----------- ----------- ----------- Total dividends and distributions (1.11) (1.29) (0.28) (0.05) ----------- ----------- ----------- ----------- Net asset value, end of period $ 13.30 $ 13.60 $ 12.82 $ 11.36 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total return 6.19%(3) 16.81% 15.37% 14.18%(3) SUPPLEMENTAL DATA AND RATIOS: Net assets, end of period $76,017,174 $69,319,588 $53,814,830 $41,473,645 Ratio of expenses to average net assets before waiver or recovery of waived expenses by Adviser 1.41%(4) 1.19% 1.17% 1.39%(4) Ratio of expenses to average net assets after waiver or recovery of waived expenses by Adviser 1.25%(4) 1.19% 1.17% 1.47%(4) Ratio of net investment income to average net assets before waiver or recovery of waived expenses by Adviser 1.74%(4) 1.54% 1.03% 1.58%(4) Ratio of net investment income to average net assets after waiver or recovery of waived expenses by Adviser 1.90%(4) 1.54% 1.03% 1.50%(4) Portfolio turnover rate 63.58%(3)(5) 126.92% 78.44% 124.13%(3)
(1) Commencement of operations. (2) Net investment income per share is calculated by dividing the net investment income by the average shares outstanding throughout the period. (3) Not Annualized. (4) Annualized. (5) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. (6) On August 25, 2005, shares were designated as Institutional Class. See notes to financial statements. MDT FUNDS--BALANCED GROWTH FUND FINANCIAL HIGHLIGHTS (CONTINUED) CLASS A CLASS C ------- ------- FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 ----------------------------------------- (UNAUDITED) PER SHARE DATA: Net asset value, beginning of period $ 13.67 $ 13.67 -------- -------- INCOME FROM INVESTMENT OPERATIONS: Net investment income(2) 0.07 0.04 Net realized and unrealized gain on investments 0.66 0.65 -------- -------- Total from investment operations 0.73 0.69 -------- -------- LESS DISTRIBUTIONS: Dividends from net investment income (0.17) (0.15) Distributions from net capital gains (0.93) (0.93) -------- -------- Total dividends and distributions (1.10) (1.08) -------- -------- Net asset value, end of period $ 13.30 $ 13.28 -------- -------- -------- -------- Total Return(3) 5.56%(5) 5.23%(6) SUPPLEMENTAL DATA AND RATIOS: Net assets, end of period $189,349 $227,911 Ratio of expenses to average net assets before reimbursement by Adviser(4) 1.74% 2.49% Ratio of expenses to average net assets after reimbursement by Adviser(4) 1.50% 2.25% Ratio of net investment income to average net assets before reimbursement by Adviser(4) 1.49% 0.74% Ratio of net investment income to average net assets after reimbursement by Adviser(4) 1.73% 0.98% Portfolio turnover rate(3)(7) 63.58% 63.58%
(1) Commencement of operations. (2) Net investment income per share is calculated by dividing net investment income by the average shares outstanding throughout the period. (3) Not annualized. (4) Annualized. (5) Calculation does not reflect the deduction of the 5.75% sales load. (6) Calculation does not reflect the deduction of any deferred sales charge. (7) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. See notes to financial statements. MDT FUNDS--SHORT-TERM BOND FUND FINANCIAL HIGHLIGHTS (CONTINUED) INSTITUTIONAL CLASS ------------------- FOR THE PERIOD FOR THE FOR THE FOR THE OCTOBER 1, SIX MONTHS YEAR YEAR 2002(1) ENDED ENDED ENDED THROUGH JANUARY 31, JULY 31, JULY 31, JULY 31, 2006(6) 2005 2004 2003 ----------- -------- -------- -------------- (UNAUDITED) PER SHARE DATA: Net asset value, beginning of period $ 9.54 $ 9.63 $ 9.86 $ 10.00 ----------- ----------- ----------- ----------- INCOME FROM INVESTMENT OPERATIONS: Net investment income(2) 0.17 0.27 0.06 0.15 Net realized and unrealized gain (loss) on investments (0.04) (0.06) 0.02 (0.07) ----------- ----------- ----------- ----------- Total from investment operations 0.13 0.21 0.08 0.08 ----------- ----------- ----------- ----------- LESS DISTRIBUTIONS: Dividends from net investment income (0.19) (0.30) (0.15) (0.22) Return of capital -- -- (0.16) -- ----------- ----------- ----------- ----------- Total dividends and distributions (0.19) (0.30) (0.31) (0.22) ----------- ----------- ----------- ----------- Net asset value, end of period $ 9.48 $ 9.54 $ 9.63 $ 9.86 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total return 1.36%(3) 2.20% 0.86% 0.82%(3) SUPPLEMENTAL DATA AND RATIOS: Net assets, end of period $35,809,377 $37,387,539 $37,905,494 $45,750,186 Ratio of expenses to average net assets before waiver or recovery of waived expenses by Adviser 1.12%(4) 0.91% 0.89% 0.98%(4) Ratio of expenses to average net assets after waiver or recovery of waived expenses by Adviser 0.95%(4) 0.92% 0.95% 0.95%(4) Ratio of net investment income to average net assets before waiver or recovery of waived expenses by Adviser 3.40%(4) 2.87% 0.72% 2.00%(4) Ratio of net investment income to average net assets after waiver or recovery of waived expenses by Adviser 3.57%(4) 2.86% 0.66% 2.03%(4) Portfolio turnover rate 23.24%(3)(5) 51.74% 96.92% 68.89%(3)
(1) Commencement of operations. (2) Net investment income per share is calculated by dividing the net investment income by the average shares outstanding throughout the period. (3) Not Annualized. (4) Annualized. (5) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. (6) On August 25, 2005, shares were designated as Institutional Class. See notes to financial statements. MDT FUNDS--SHORT-TERM BOND FUND FINANCIAL HIGHLIGHTS (CONTINUED) CLASS A CLASS C ------- ------- FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 ----------------------------------------- (UNAUDITED) PER SHARE DATA: Net asset value, beginning of period $ 9.58 $ 9.58 -------- -------- INCOME FROM INVESTMENT OPERATIONS: Net investment income(2) 0.12 0.10 Net realized and unrealized loss on investments (0.08) (0.08) -------- -------- Total from investment operations 0.04 0.02 -------- -------- LESS DISTRIBUTIONS: Dividends from net investment income (0.14) (0.11) -------- -------- Total dividends and distributions (0.14) (0.11) -------- -------- Net asset value, end of period $ 9.48 $ 9.49 -------- -------- -------- -------- Total Return(3) 0.47%(5) 0.26%(6) SUPPLEMENTAL DATA AND RATIOS: Net assets, end of period $10,478 $1,006 Ratio of expenses to average net assets before reimbursement by Adviser(4) 1.44% 2.19% Ratio of expenses to average net assets after reimbursement by Adviser(4) 1.20% 1.95% Ratio of net investment income to average net assets before reimbursement by Adviser(4) 3.16% 2.41% Ratio of net investment income to average net assets after reimbursement by Adviser(4) 3.40% 2.65% Portfolio turnover rate(3)(7) 23.24% 23.24%
(1) Commencement of operations. (2) Net investment income per share is calculated by dividing net investment income by the average shares outstanding throughout the period. (3) Not annualized. (4) Annualized. (5) Calculation does not reflect the deduction of the 2.25% sales load. (6) Calculation does not reflect the deduction of any deferred sales charge. (7) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. See notes to financial statements. MDT FUNDS NOTES TO THE FINANCIAL STATEMENTS JANUARY 31, 2006 (UNAUDITED) NOTE 1--DESCRIPTION OF FUND The MDT Funds (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open end investment management company. The Trust was organized as a Delaware statutory trust on June 26, 2002 and consists of nine series. Prior to August 25, 2005, the Trust was known as the Optimum QTM Funds Trust. The series presently authorized are the All Cap Core Fund, the Tax Aware/All Cap Core Fund, the Large Cap Growth Fund, the Mid Cap Growth Fund, the Small Cap Core Fund, the Small Cap Growth Fund, the Small Cap Value Fund, the Balanced Growth Fund and the Short-Term Bond Fund (collectively referred to as the "Funds"). Pursuant to the 1940 Act, the Funds are each "diversified" series of the Trust. The All Cap Core, Balanced Growth and Short-Term Bond Funds commenced operations on October 1, 2002. The Tax Aware/All Cap Core, Large Cap Growth, Mid Cap Growth, Small Cap Core, Small Cap Growth and Small Cap Value Funds and each of the respective classes of shares within these Funds commenced operations on September 15, 2005. Each of the Funds offers three classes of shares: Institutional Class, Class A and Class C. Class A shares are sold with a front-end sales charge. Class C shares may be subject to a contingent deferred sales charge. All classes of shares have identical voting, dividend, liquidation and other rights and the same terms and conditions, except that Class A and Class C bear certain expenses relating to distribution and servicing expenditures. Currently, the Class A and Class C shares charge 12b-1 fees of 0.25% and 1.00%, respectively. Please refer to Note 6 for further information on the Rule 12b-1 distribution plans. From February 12, 2003 through August 25, 2005, the Class A shares of the All Cap Core Fund were known as the Adviser Class and the Institutional Class shares were known as the Memorial Class. On August 25, 2005, the existing shares of the Balanced Growth and Short-Term Bond (f/k/a Capital Conservation) Funds were designated the Institutional Class. The Class A and Class C shares of the Balanced Growth and Short-Term Bond Funds commenced operations on September 15, 2005. The primary investment objective of the All Cap Core Fund, the Large Cap Growth Fund, the Mid Cap Growth Fund, the Small Cap Core Fund, the Small Cap Growth Fund, and the Small Cap Value Fund is long-term capital appreciation. The primary investment objective of the Tax Aware/All Cap Core Fund is long-term capital appreciation while seeking to minimize the impact of taxes. The primary investment objective of the Balanced Growth Fund is long-term growth through capital appreciation and current income. The primary investment objective of the Short-Term Bond Fund is to preserve the value of the Fund's assets and produce income. NOTE 2--SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by the Funds: (a) Investment Valuation--Investment securities traded on a national securities exchange are valued at their market value determined by their last price in the principal market in which these securities are normally traded except those traded on the Nasdaq NMS and Small Cap exchanges unless there are no transactions on the valuation date, in which case they are valued at the mean between the closing asked and bid prices. Securities traded over-the-counter are valued at the last reported sales price unless there is no reported sales price, in which case the mean between the closing asked and bid prices is used. Securities traded on Nasdaq National Market and Capital Market Exchanges are valued at the Nasdaq Official Closing Price ("NOCP"). Debt securities with maturities of sixty days or less are valued at amortized cost, which approximates market value. Other fixed income securities that have a maturity of greater than 60 days are normally valued on the basis of quotes obtained from pricing services, which take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, credit quality, coupon rate, maturity, type of issue, trading characteristics and other market data. U.S. government and agency securities are valued at the mean between the most recent bid and asked prices. Where market quotations are not readily available, assets and securities are valued at fair value as determined in good faith by the Adviser pursuant to authority delegated, and in accordance with procedures approved by the Trust's Board of Trustees. In determining fair value, the Adviser considers all relevant factors and available information. Consequently, the price of the security used by a Fund to calculate its NAV may differ from quoted or published prices for the same security. Fair value pricing involves subjective judgments and there is no single standard for determining a security's fair value. As a result, different mutual funds could reasonably arrive at a different fair value for the same security. It is possible that the fair value determined for a security is materially different from the value that could be realized upon the sale of that security or from the values that other mutual funds may determine. (b) Income Recognition--Interest income is accrued as earned. Dividend income is recorded on the ex-dividend date. All discounts and premiums are amortized using the effective interest method for tax and financial reporting purposes. (c) Securities Transactions--Security transactions are accounted for on the date the securities are purchased or sold. Realized gains and losses on securities sold are determined using the high cost method. (d) Distributions to Shareholders--The Funds record distributions to shareholders on the ex-dividend date. Dividends from net investment income, if any, are declared and paid at least annually for each Fund except the Short-Term Bond Fund. The Short-Term Bond Fund declares and distributes dividends on a monthly basis. Distributions of net realized capital gains, if any, will be declared and distributed at least annually for each Fund. The amounts of distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations, which may differ from those amounts determined under generally accepted accounting principles. These book/tax differences are either temporary or permanent in nature. To the extent these differences are permanent, reclassifications are made in the capital accounts in the period that the difference arises. The Funds may utilize earnings and profits distributed to shareholders on redemption of shares as part of the dividends paid deduction. The tax components of the dividend paid during the six months ended January 31, 2006 are as follows: ORDINARY LONG-TERM CAPITAL SHORT-TERM CAPITAL INCOME DIVIDENDS GAINS DISTRIBUTIONS GAINS DISTRIBUTIONS ---------------- ------------------- ------------------- All Cap Core Fund--Institutional Class $ 42,291 $1,016,396 $1,287,766 All Cap Core Fund--Class A 11,232 1,019,947 1,292,265 All Cap Core Fund--Class C -- 52,032 65,925 Balanced Growth Fund--Institutional Class 964,275 3,065,711 1,899,018 Balanced Growth Fund--Class A 12 42 26 Balanced Growth Fund--Class C 11 42 26 Short-Term Bond Fund--Institutional Class 733,631 -- -- Short-Term Bond Fund--Class A 158 -- -- Short-Term Bond Fund--Class C 12 -- --
The Tax Aware/All Cap Core, Large Cap Growth, Mid Cap Growth, Small Cap Core, Small Cap Growth and Small Cap Value Funds did not make any dividend payments or distributions during the period from their inception through January 31, 2006. The tax components of the dividends paid during the fiscal year ended July 31, 2005 are as follows: ORDINARY LONG-TERM CAPITAL INCOME DIVIDENDS GAINS DISTRIBUTIONS ---------------- ------------------- All Cap Core Fund--Institutional Class $1,348,729 $1,294,697 All Cap Core Fund--Class A 641,319 637,985 Balanced Growth Fund 2,527,022 2,961,234 Short-Term Bond Fund 1,142,042 --
(e) Federal Income Taxes--The Funds intend to comply with Subchapter M of the Internal Revenue Code applicable to regulated investment companies, including the distribution of substantially all of the Funds' taxable income. Accordingly, no provision for federal income taxes is considered necessary in the financial statements. (f) Use of Estimates--The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amount 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. (g) Expenses--Each Fund is charged for those expenses that are directly attributable to it. Expenses directly attributable to a class of shares, such as Rule 12b-1 distribution fees, are charged to that class of shares. Expenses that are not attributable to a portfolio are typically allocated among each portfolio in proportion to their respective net assets. (h) Guarantees and Indemnifications--In the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds' maximum exposure under these arrangements is unknown as this would involve future claims against the Funds that have not yet occurred. Based on experience, the Funds expect the risk of loss to be remote. NOTE 3--CAPITAL SHARE TRANSACTIONS At January 31, 2006 there were unlimited shares authorized with a par value of $0.01. The following tables summarize the capital share transactions of each Fund for the past two fiscal periods or the period from the Fund's inception: ALL CAP CORE FUND--INSTITUTIONAL CLASS SIX MONTHS ENDED YEAR ENDED JANUARY 31, 2006 JULY 31, 2005 ------------------------- ------------------------- SHARES AMOUNT SHARES AMOUNT ------ ------ ------ ------ Sales 65,554 $ 1,004,719 533,336 $ 7,489,650 Reinvestments 153,643 2,324,618 187,453 2,639,341 Redemptions (313,974) (4,792,603) (189,430) (2,701,167) --------- ----------- --------- ----------- Net Increase (Decrease) (94,777) $(1,463,266) 531,359 $ 7,427,824 --------- ----------- --------- ----------- SHARES OUTSTANDING Beginning of Period 2,857,664 2,326,305 --------- --------- End of Period 2,762,887 2,857,664 --------- --------- --------- ---------
ALL CAP CORE FUND--CLASS A SIX MONTHS ENDED YEAR ENDED JANUARY 31, 2006 JULY 31, 2005 ------------------------- ------------------------- SHARES AMOUNT SHARES AMOUNT ------ ------ ------ ------ Sales 1,408,383 $21,544,761 1,420,090 $20,210,268 Reinvestments 150,058 2,261,364 89,795 1,261,622 Redemption Fees -- 476 Redemptions (130,744) (1,994,740) (234,345) (3,315,794) --------- ----------- --------- ----------- Net Increase 1,427,697 $21,811,861 1,275,540 $18,156,096 --------- ----------- --------- ----------- SHARES OUTSTANDING Beginning of Period 1,987,715 712,175 --------- --------- End of Period 3,415,412 1,987,715 --------- --------- --------- ---------
ALL CAP CORE FUND--CLASS C FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 ------------------------- SHARES AMOUNT ------ ------ Sales 472,739 $ 7,250,139 Reinvestments 7,778 117,066 Redemption Fees -- 331 Redemptions (5,532) (83,599) --------- ----------- Net Increase 474,985 $ 7,283,937 --------- ----------- SHARES OUTSTANDING Beginning of Period -- --------- End of Period 474,985 --------- --------- TOTAL NET INCREASE $27,632,532 $25,583,920 ----------- ----------- ----------- -----------
(1) Commencement of Operations TAX AWARE/ALL CAP CORE FUND--INSTITUTIONAL CLASS FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 ------------------------- SHARES AMOUNT ------ ------ Sales 65,752 $ 647,253 Redemptions (0) (3) --------- ----------- Net Increase 65,752 $ 647,250 --------- ----------- SHARES OUTSTANDING Beginning of Period -- --------- End of Period 65,752 --------- ---------
TAX AWARE/ALL CAP CORE FUND--CLASS A FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 ------------------------- SHARES AMOUNT ------ ------ Sales 59,495 $ 600,816 Redemptions (0) (1) --------- ----------- Net Increase 59,495 $ 600,815 --------- ----------- SHARES OUTSTANDING Beginning of Period -- --------- End of Period 59,495 --------- ---------
TAX AWARE/ALL CAP CORE FUND--CLASS C FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 ------------------------- SHARES AMOUNT ------ ------ Sales 8,700 $ 85,849 Redemptions (0) (1) --------- ----------- Net Increase 8,700 $ 85,848 --------- ----------- SHARES OUTSTANDING Beginning of Period -- --------- End of Period 8,700 --------- --------- TOTAL NET INCREASE $ 1,333,913 ----------- -----------
(1) Commencement of Operations LARGE CAP GROWTH FUND--INSTITUTIONAL CLASS FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 ------------------------- SHARES AMOUNT ------ ------ Sales 38,846 $ 385,412 Redemptions (761) (8,160) --------- ----------- Net Increase 38,085 $ 377,252 --------- ----------- SHARES OUTSTANDING Beginning of Period -- --------- End of Period 38,085 --------- ---------
LARGE CAP GROWTH FUND--CLASS A FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 ------------------------- SHARES AMOUNT ------ ------ Sales 100 $ 1,000 Redemptions (0) (1) --------- ----------- Net Increase 100 $ 999 --------- ----------- SHARES OUTSTANDING Beginning of Period -- --------- End of Period 100 --------- ---------
LARGE CAP GROWTH FUND--CLASS C FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 ------------------------- SHARES AMOUNT ------ ------ Sales 100 $ 1,000 Redemptions (0) (1) --------- ----------- Net Increase 100 $ 999 --------- ----------- SHARES OUTSTANDING Beginning of Period -- --------- End of Period 100 --------- --------- TOTAL NET INCREASE $ 379,250 ----------- -----------
(1) Commencement of Operations MID CAP GROWTH FUND--INSTITUTIONAL CLASS FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 ------------------------- SHARES AMOUNT ------ ------ Sales 27,286 $ 270,913 Redemptions (410) (4,549) --------- ----------- Net Increase 26,876 $ 266,364 --------- ----------- SHARES OUTSTANDING Beginning of Period -- --------- End of Period 26,876 --------- ---------
MID CAP GROWTH FUND--CLASS A FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 ------------------------- SHARES AMOUNT ------ ------ Sales 1,256 $ 12,665 Redemptions (0) (1) --------- ----------- Net Increase 1,256 $ 12,664 --------- ----------- SHARES OUTSTANDING Beginning of Period -- --------- End of Period 1,256 --------- ---------
MID CAP GROWTH FUND--CLASS C FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 ------------------------- SHARES AMOUNT ------ ------ Sales 100 $ 1,000 Redemptions (0) (1) --------- ----------- Net Increase 100 $ 999 --------- ----------- SHARES OUTSTANDING Beginning of Period -- --------- End of Period 100 --------- --------- TOTAL NET INCREASE $ 280,027 ----------- -----------
(1) Commencement of Operations SMALL CAP CORE FUND--INSTITUTIONAL CLASS FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 ------------------------- SHARES AMOUNT ------ ------ Sales 16,776 $ 167,835 Redemptions (3) (32) --------- ----------- Net Increase 16,773 $ 167,803 --------- ----------- SHARES OUTSTANDING Beginning of Period -- --------- End of Period 16,773 --------- ---------
SMALL CAP CORE FUND--CLASS A FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 ------------------------- SHARES AMOUNT ------ ------ Sales 6,154 $ 67,970 Redemptions (0) (1) --------- ----------- Net Increase 6,154 $ 67,969 --------- ----------- SHARES OUTSTANDING Beginning of Period -- --------- End of Period 6,154 --------- ---------
SMALL CAP CORE FUND--CLASS C FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 ------------------------- SHARES AMOUNT ------ ------ Sales 2,731 $ 30,500 Redemptions (0) (1) --------- ----------- Net Increase 2,731 $ 30,499 --------- ----------- SHARES OUTSTANDING Beginning of Period -- --------- End of Period 2,731 --------- --------- TOTAL NET INCREASE $ 266,271 ----------- -----------
(1) Commencement of Operations SMALL CAP GROWTH FUND--INSTITUTIONAL CLASS FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 ------------------------- SHARES AMOUNT ------ ------ Sales 20,220 $ 199,000 Redemptions (300) (3,297) --------- ----------- Net Increase 19,920 $ 195,703 --------- ----------- SHARES OUTSTANDING Beginning of Period -- --------- End of Period 19,920 --------- ---------
SMALL CAP GROWTH FUND--CLASS A FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 ------------------------- SHARES AMOUNT ------ ------ Sales 100 $ 1,000 Redemptions (0) (1) --------- ----------- Net Increase 100 $ 999 --------- ----------- SHARES OUTSTANDING Beginning of Period -- --------- End of Period 100 --------- ---------
SMALL CAP GROWTH FUND--CLASS C FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 ------------------------- SHARES AMOUNT ------ ------ Sales 100 $ 1,000 Redemptions (0) (1) --------- ----------- Net Increase 100 $ 999 --------- ----------- SHARES OUTSTANDING Beginning of Period -- --------- End of Period 100 --------- --------- TOTAL NET INCREASE $ 197,701 ----------- -----------
(1) Commencement of Operations SMALL CAP VALUE FUND--INSTITUTIONAL CLASS FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 ------------------------- SHARES AMOUNT ------ ------ Sales 9,750 $ 97,500 Redemptions (1) (15) --------- ----------- Net Increase 9,749 $ 97,485 --------- ----------- SHARES OUTSTANDING Beginning of Period -- --------- End of Period 9,749 --------- ---------
SMALL CAP VALUE FUND--CLASS A FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 ------------------------- SHARES AMOUNT ------ ------ Sales 250 $ 2,500 Redemptions (2) (16) --------- ----------- Net Increase 248 $ 2,484 --------- ----------- SHARES OUTSTANDING Beginning of Period -- --------- End of Period 248 --------- ---------
SMALL CAP VALUE FUND--CLASS C FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 ------------------------- SHARES AMOUNT ------ ------ Sales 100 $ 1,000 Redemptions (0) (1) --------- ----------- Net Increase 100 $ 999 --------- ----------- SHARES OUTSTANDING Beginning of Period -- --------- End of Period 100 --------- --------- TOTAL NET INCREASE $ 100,968 --------- ----------- --------- -----------
(1) Commencement of Operations BALANCED GROWTH FUND--INSTITUTIONAL CLASS SIX MONTHS ENDED YEAR ENDED JANUARY 31, 2006 JULY 31, 2005 ------------------------- ------------------------- SHARES AMOUNT SHARES AMOUNT ------ ------ ------ ------ Sales 428,184 $ 5,752,332 755,806 $ 9,738,462 Reinvestments 457,148 5,924,643 427,344 5,482,822 Redemptions (265,438) (3,580,554) (285,202) (3,723,836) --------- ----------- --------- ----------- Net Increase 619,894 $ 8,096,421 897,948 $11,497,448 --------- ----------- --------- ----------- SHARES OUTSTANDING Beginning of Period 5,096,379 4,198,431 --------- --------- End of Period 5,716,273 5,096,379 --------- --------- --------- ---------
BALANCED GROWTH FUND--CLASS A FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 ------------------------- SHARES AMOUNT ------ ------ Sales 14,232 $ 188,408 Reinvestments 6 80 Redemptions (0) (1) --------- ----------- Net Increase 14,238 $ 188,487 --------- ----------- SHARES OUTSTANDING Beginning of Period -- --------- End of Period 14,238 --------- ---------
BALANCED GROWTH FUND--CLASS C FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 ------------------------- SHARES AMOUNT ------ ------ Sales 17,155 $ 226,424 Reinvestments 6 79 Redemptions (0) (1) --------- ----------- Net Increase 17,161 $ 226,502 --------- ----------- SHARES OUTSTANDING Beginning of Period -- --------- End of Period 17,161 --------- --------- TOTAL NET INCREASE $ 8,511,410 $11,497,448 ----------- ----------- ----------- -----------
(1) Commencement of Operations SHORT-TERM BOND FUND--INSTITUTIONAL CLASS SIX MONTHS ENDED YEAR ENDED JANUARY 31, 2006 JULY 31, 2005 ------------------------- ------------------------- SHARES AMOUNT SHARES AMOUNT ------ ------ ------ ------ Sales 93,906 $ 898,741 437,662 $ 4,201,734 Reinvestments 77,127 733,238 118,493 1,137,724 Redemptions (311,173) (2,959,756) (571,611) (5,499,835) --------- ----------- --------- ----------- Net Decrease (140,140) $(1,327,777) (15,456) $ (160,377) --------- ----------- --------- ----------- SHARES OUTSTANDING Beginning of Period 3,919,146 3,934,602 --------- --------- End of Period 3,779,006 3,919,146 --------- --------- --------- ---------
SHORT-TERM BOND FUND--CLASS A FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 ------------------------- SHARES AMOUNT ------ ------ Sales 1,088 $ 10,429 Reinvestments 17 158 Redemptions (0) (1) --------- ----------- Net Increase 1,105 $ 10,586 --------- ----------- SHARES OUTSTANDING Beginning of Period -- --------- End of Period 1,105 --------- ---------
SHORT-TERM BOND FUND--CLASS C FOR THE PERIOD SEPTEMBER 15, 2005(1) THROUGH JANUARY 31, 2006 ------------------------- SHARES AMOUNT ------ ------ Sales 105 $ 1,000 Reinvestments 1 12 Redemptions (0) (1) --------- ----------- Net Increase 106 $ 1,011 --------- ----------- SHARES OUTSTANDING Beginning of Period -- --------- End of Period 106 --------- --------- Total Net Decrease $(1,316,180) $ (160,377) ----------- ----------- ----------- -----------
(1) Commencement of Operations NOTE 4--INVESTMENT TRANSACTIONS Purchases and sales of investment securities, other than short-term investments for the period ended January 31, 2006 were as follows: PURCHASES SALES --------------------------- --------------------------- U.S. GOVERNMENT OTHER U.S. GOVERNMENT OTHER --------------- ----- --------------- ----- All Cap Core Fund $ -- $96,781,399 $ -- $75,678,003 Tax Aware/All Cap Core Fund -- 1,814,991 -- 530,603 Large Cap Growth Fund -- 831,673 -- 439,781 Mid Cap Growth Fund -- 487,591 -- 193,905 Small Cap Core Fund -- 419,367 -- 153,768 Small Cap Growth Fund -- 354,229 -- 141,154 Small Cap Value Fund -- 191,505 -- 71,495 Balanced Growth Fund 2,035,034 44,891,598 3,323,125 41,246,613 Short-Term Bond Fund -- 7,768,676 1,630,144 6,970,773
At July 31, 2005, the components of accumulated earnings/(losses) on a tax basis were as follows: BALANCED ALL CAP CORE GROWTH SHORT-TERM FUND FUND BOND FUND ------------ -------- --------- Cost of Investments $65,917,604 $60,729,963 $37,791,382 ----------- ----------- ----------- ----------- ----------- ----------- Gross unrealized appreciation 9,483,829 9,116,262 136,895 Gross unrealized depreciation (824,997) (599,401) (676,426) ----------- ----------- ----------- Net unrealized appreciation/(depreciation) $ 8,658,832 $ 8,516,861 $ (539,531) ----------- ----------- ----------- ----------- ----------- ----------- Undistributed ordinary income 2,368,556 2,109,384 38,817 Undistributed long-term capital gain 2,088,381 1,950,395 -- ----------- ----------- ----------- Total distributable earnings $ 4,456,937 $ 4,059,779 $ 38,817 ----------- ----------- ----------- ----------- ----------- ----------- Other accumulated losses $ -- $ (3,254) $ (711,490) ----------- ----------- ----------- Total accumulated earnings/(losses) $13,115,769 $12,573,386 $(1,212,204) ----------- ----------- ----------- ----------- ----------- -----------
At July 31, 2005, the Short-Term Bond Fund had an accumulated net realized capital loss carryover of $524,142 of which $408,592 expires in 2012 and $115,550 expires in 2013. To the extent the Short-Term Bond Fund realizes future net capital gains, taxable distributions to its shareholders will be offset by any unused capital loss carryover. Also, July 31, 2005, the Short-Term Bond Fund realized, on a tax basis, post-October losses of $184,904 which are not recognized for tax purposes until the first day of the following fiscal year. NOTE 5--INVESTMENT ADVISORY AND OTHER AGREEMENTS The Trust has an Investment Advisory Agreement (the "Agreement") with MDTA LLC acting through its autonomous operating division, MDT Advisers (the "Adviser"), with whom certain officers and Trustees of the Board are affiliated, to furnish investment advisory services to the Funds. Under the terms of the Agreement, the Trust, on behalf of the Funds, compensates the Adviser for its management services based on the following annual rates: PERCENTAGE OF DAILY NET ASSETS ------------------------------ ALL CAP CORE FUND 0.75% TAX AWARE/ALL CAP CORE FUND 1.00% LARGE CAP GROWTH FUND 0.75% MID CAP GROWTH FUND 0.90% SMALL CAP CORE FUND 1.25% SMALL CAP GROWTH FUND 1.25% SMALL CAP VALUE FUND 1.25% BALANCED GROWTH FUND 0.75% SHORT-TERM BOND FUND 0.40% The Adviser has agreed to waive all or part of its advisory fee and/or absorb the Funds' other expenses, to the extent necessary to ensure that the operating expenses do not exceed the following levels (as a percentage of each class' respective daily average net assets): INSTITUTIONAL CLASS CLASS A CLASS C ------------------- ------- ------- ALL CAP CORE FUND 1.25% 1.50% 2.25% TAX AWARE/ALL CAP CORE FUND 1.80% 2.05% 2.80% LARGE CAP GROWTH FUND 1.80% 2.05% 2.80% MID CAP GROWTH FUND 1.80% 2.05% 2.80% SMALL CAP CORE FUND 1.80% 2.05% 2.80% SMALL CAP GROWTH FUND 1.80% 2.05% 2.80% SMALL CAP VALUE FUND 1.80% 2.05% 2.80% BALANCED GROWTH FUND 1.25% 1.50% 2.25% SHORT-TERM BOND FUND 0.95% 1.20% 1.95% The Adviser has agreed to keep these limitations in place through November 30, 2006. For a period of three years after the fiscal year in which the Adviser waives or reimburses Fund expenses, the Adviser may seek reimbursement from that Fund to the extent that the Fund's total annual operating expenses are less than the expense limitation in effect at the time of the waiver or reimbursement. The All Cap Core, Balanced Growth and Short-Term Bond Funds each incurred $18,756 in connection with the organization of the Trust and initial public offering of the shares. These expenses were advanced by the Adviser, and the Adviser has agreed to reimburse the Funds for these expenses, subject to potential recovery. During the fiscal year ended July 31, 2003, the Balanced Growth Fund reimbursed $18,756 that the Adviser had advanced for organizational expenses. During the year ended July 31, 2004, the Short-Term Bond Fund reimbursed $23,308 that the Adviser had advanced for organizational expenses and for Fund expenses the Adviser absorbed for the fiscal year ended July 31, 2003. During the year ended July 31, 2005, the Short-Term Bond Fund reimbursed $4,162 that the Adviser absorbed during previous fiscal periods. Reimbursed/absorbed expenses subject to potential recovery by year of expiration are as follows: YEAR OF EXPIRATION ALL CAP CORE FUND ------------------ ----------------- July 31, 2006 $124,758 July 31, 2007 $ 53,361 July 31, 2008 $ 24,400 U.S. Bancorp Fund Services, LLC serves as transfer agent, administrator and accounting services agent for the Fund. U.S. Bank, N.A. serves as custodian for the Fund. NOTE 6--DISTRIBUTION PLAN The Trust, on behalf of the each Fund, has adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act (the "12b-1 plan"). With respect to the Class A shares, the plan provides that each Fund compensate Quasar Distributors, LLC (the "Distributor"), an affiliate of U.S. Bancorp Fund Services, LLC, up to 0.35% (0.25% for the All Cap Core Fund) per annum of the class' average daily net assets. Currently, the Class A shares of each Fund are charged 0.25% per annum. With respect to the Class C shares, the plan provides that each Fund compensate the Distributor up to 1.00% per annum of the class' average daily net assets. Payments under the 12b-1 plan shall be used to compensate the distributor for services rendered in connection with the promotion and distribution of each respective class of shares of each Fund, and the provision of personal services to shareholders, including, but not necessarily limited to, advertising, compensation to underwriters, dealers and selling personnel, the printing and mailing of prospectuses to other than current Fund shareholders, and the printing and mailing of sales literature. For the period ended January 31, 2006, the following expenses were incurred under the 12b-1 Plan: CLASS A CLASS C ------- ------- ALL CAP CORE FUND $47,250 $6,551 TAX AWARE/ALL CAP CORE FUND 365 238 LARGE CAP GROWTH FUND 1 4 MID CAP GROWTH FUND 9 4 SMALL CAP CORE FUND 14 15 SMALL CAP GROWTH FUND 1 4 SMALL CAP VALUE FUND 2 4 BALANCED GROWTH FUND 5 29 SHORT-TERM BOND FUND 9 4 MDT FUNDS ADDITIONAL INFORMATION PROXY VOTING. A description of the Trust's proxy voting policies and procedures relating to the holdings of each Fund is available by calling 1-866-784-6867. Furthermore, you can obtain the description on the SEC's website at http://www.sec.gov. PROXY VOTING RECORD. Information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge by calling 1-866-784-6867. Furthermore, you can obtain the Funds' proxy voting records on the SEC's website at http://www.sec.gov. QUARTERLY DISCLOSURE PORTFOLIO HOLDINGS. The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds' Forms N-Q are available on the SEC website at http://www.sec.gov and may also be reviewed and copied at the SEC's public reference room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-888-SEC-0330. MDT FUNDS BOARD CONSIDERATIONS IN APPROVING THE CONTINUATION OF THE INVESTMENT ADVISORY AGREEMENT On September 20, 2005, the Board of Trustees performed its annual review of the Agreement for the All Cap Core Fund, the Balanced Growth Fund and the Short-Term Bond Fund. Both in respect of the September 20, 2005 meeting and in approving the Advisory Agreement on behalf of the Tax Aware/All Cap Core Fund, the Large Cap Growth Fund, the Mid Cap Growth Fund, the Small Cap Core Fund, the Small Cap Growth Fund and the Small Cap Value Fund at a meeting of the Board of Trustees on May 17, 2005, the Board of Trustees, including the Independent Trustees, took into consideration information provided at the relevant meeting, as well as a wide variety of materials relating to the services provided by the Adviser, including reports on each Fund's investment results; portfolio composition; portfolio trading practices; and other information relating to the nature, extent and quality of services provided by Adviser to the Fund (or expected to be provided, in the case of the new Funds). In addition, the Board reviewed information regarding, as applicable, each Fund's investment results, advisory fee and expense comparisons, financial and profitability information regarding the Adviser, descriptions of various functions such as compliance monitoring and portfolio trading practices, and information about the personnel providing investment management and administrative services to each Fund. In deciding to renew or initially approve, as the case may be, the Agreements, the Board of Trustees did not identify any single issue or particular information that, in isolation, was the controlling factor. This summary describes the most important, but not all, of the factors considered by the Board. 1. Nature, Extent and Quality of Services The Adviser, its personnel and its resources. The Board considered the depth and quality of the Adviser's investment management process, including its sophisticated quantitative methodology; the experience, capability and integrity of its senior management and other personnel; the low turnover rates of its key personnel; the overall financial strength and stability of its organization (and its ultimate parent); and the ability of its organizational structure to address the recent growth in assets under management. The Board also considered that the Adviser made available to its investment professionals a variety of resources and systems relating to investment management, compliance, trading, performance and portfolio accounting. The Trustees considered the Adviser's commitment to investing in information technology supporting investment management and compliance. They further considered the Adviser's continuing need to attract and retain qualified personnel and to maintain and enhance its resources and systems. Other Services. The Board considered the Adviser's policies, procedures and systems to ensure compliance with applicable laws and regulations and its commitment to these programs; its efforts to keep the Trustees informed; and its attention to matters that may involve conflicts of interest with each Fund. The Board concluded that the nature, extent and quality of the services provided by the Adviser has benefited and will continue to benefit each Fund and its shareholders. 2. Investment Performance With respect to the existing Funds, the Board considered each Fund's unique, balanced pursuit of its investment objectives and the investment results of each Fund in light of its objectives. The Trustees compared each Fund's total returns with various independent mutual fund indices. The Board reviewed the investment results of the All Cap Core Fund for the one-year and since inception period ended July 31, 2005 relative to multiple stock market indices and a group of peer funds. They noted that the Fund had outperformed all of the relevant benchmarks during the previous year and only marginally underperformed the indices for the period from the Fund's inception through July 31, 2005. The Trustees reviewed the performance of the Balanced Growth Fund and noted that the Fund had significantly outperformed equity indices during the year ended July 31, 2005 and only marginally underperformed those equity indices for the period from the Fund's inception through July 31, 2005 despite a 25-35% allocation to fixed income securities. The Board also noted that the Fund had outperformed its Lipper peers during the periods. The Trustees reviewed the performance of the Short-Term Bond Fund and noted that the Fund had underperformed its relevant benchmarks during the one-year period and the period from the Fund's inception through July 31, 2005. However, the Trustees noted and discussed the Fund's conservative posturing relative to the peers and indices during a time where the Adviser believed that the risk-reward profile with respect to interest rates was not in favor of the Fund. The Trustees noted that this posturing was communicated to them and discussed on a quarterly basis as the Board reviewed the performance of each Fund. In addition, the Board also reviewed information prepared by the Adviser suggesting that each Fund's returns over these same periods were achieved for materially less risk (measured by reference to volatility). Finally, with respect to the All Cap Core Fund, the Tax Aware/All Cap Core Fund, the Large Cap Growth Fund, the Mid Cap Growth Fund, the Small Cap Core Fund, the Small Cap Growth Fund and the Small Cap Value Fund, the Trustees reviewed long- term performance of each strategy and noted the superior performance. The Board ultimately concluded that the Adviser's performance record in managing each existing Fund indicates that its continued management will benefit each Fund and its shareholders. 3. Advisory Fees and Total Expenses The Board reviewed the advisory fees and total expenses of each Fund and compared such amounts with the average fee and expense levels of other funds in the applicable Lipper indices. The Board observed that the advisory fees of the All Cap Core Fund and Balanced Growth Fund were slightly above the median of other mutual funds with similar investment objectives and size according to reports prepared by the Fund's administrator based on data from Lipper. However, the Trustees noted that the total expense ratios for each of the Funds were below the median of the same peer group. With respect to the Short Term Bond Fund, the Board observed that the advisory fee charged approximately equal to the median of the Lipper peer group of funds with similar size and investment objective, while the total expense ratio was again lower than that of the peer group. The Board noted that, to date, the Adviser has waived significant fees with respect to the All Cap Core Fund, had deferred significant fees for the Balanced Growth Fund and Short-Term Bond Fund while those Funds accumulated assets and would likely waive significant fees for the Tax Aware/All Cap Core Fund, the Large Cap Growth Fund, the Mid Cap Growth Fund, the Small Cap Core Fund, the Small Cap Growth Fund and the Small Cap Value Fund initially. The Board concluded that the level of the fees charged by the Adviser was appropriate and benefited each Fund and its shareholders. The Board also reviewed information regarding the advisory fees paid by institutional clients of the Adviser with similar investment mandates. The Trustees concluded that although the fees paid by those clients generally were lower than those paid by the Funds, the differences appropriately reflected the Adviser's significantly greater responsibilities with respect to the Funds, and the more comprehensive regulatory regime applicable to mutual funds. 4. Adviser, Costs, Level of Profits and Economies of Scale The Board reviewed information regarding the Adviser's costs of providing services to the Funds, as well as the resulting level of profits to the Adviser, noting that those results were comparable to the reported results of several investment management companies. The Board also received information regarding the structure and manner in which the Adviser's investment professionals were compensated and the Adviser's view of the relationship of such compensation to the attraction and retention of quality personnel. The Board considered the Adviser's need to invest in technology, infrastructure and staff to reinforce and offer new services and to accommodate changing regulatory requirements. The Trustees noted that at their present asset size breakpoints in each Fund's advisory fee structure were not practicable, but that economies of scale in the cost of operations, to the extent they exist, effectively were being shared given the Adviser's waivers of fees in respect of several of the Funds. The Board concluded that each fund's cost structure was reasonable. 5. Ancillary Benefits The Board considered a variety of other benefits received by the Adviser, including possible ancillary benefits to its institutional management business. The Board reviewed the Adviser's portfolio trading practices, noting that the Adviser receives the benefit of research provided by broker-dealers executing portfolio transactions on behalf of a Fund, and other soft dollar research benefits. 6. Conclusions Based on its review, including their consideration of each of the factors referred to above, the Board concluded that the Agreements are fair and reasonable to each Fund and its shareholders, that each Fund's shareholders received, or will receive, as the case may be, reasonable value in return for the advisory fees paid to the Adviser by the Fund, and that the renewal or initial approval, as the case may be, of the Agreement was in the best interests of each Fund and its shareholders. (MDT FUNDS LOGO) INVESTMENT ADVISER MDT Advisers, a division of MDTA, LLC 125 CambridgePark Drive Cambridge, MA 02140 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PricewaterhouseCoopers LLP 125 High Street Boston, MA 02110 LEGAL COUNSEL Paul, Hastings, Janofsky & Walker, LLP 55 Second Street, 24th Floor San Francisco, CA 94105 CUSTODIAN U.S. Bank, N.A. 425 Walnut Street Cincinnati, OH 45202 ADMINISTRATOR, TRANSFER AGENT AND FUND ACCOUNTANT U.S. Bancorp Fund Services, LLC 615 E. Michigan Street Milwaukee, WI 53202 DISTRIBUTOR Quasar Distributors, LLC 615 E. Michigan Street Milwaukee, WI 53202 This report has been prepared for the information of shareholders of the MDT Funds and is not authorized for distribution to prospective shareholders unless preceded or accompanied by an effective prospectus that includes information regarding the Funds' objectives, policies, management, records and other information. The prospectus should be read carefully before investing and can be obtained by calling 1-866-784-6867 or at www.mdtfunds.com. ITEM 2. CODE OF ETHICS. - ----------------------- Not applicable for semi-annual reports. Item 3. Audit Committee Financial Expert. - ---------------------------------------- Not applicable for semi-annual reports. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. - ----------------------------------------------- Not applicable for semi-annual reports. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. - ---------------------------------------------- Not applicable to open-end investment companies. ITEM 6. SCHEDULE OF INVESTMENTS. - -------------------------------- The Schedules of Investments are included as part of the report to shareholders filed under Item 1 of this Form. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END - ------------------------------------------------------------------------- MANAGEMENT INVESTMENT COMPANIES. - -------------------------------- Not applicable to open-end investment companies. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. - ------------------------------------------------------------------------- Not applicable to open-end investment companies. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT - --------------------------------------------------------------------------- COMPANY AND AFFILIATED PURCHASERS. - ---------------------------------- Not applicable to open-end investment companies. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. - ------------------------------------------------------------ Not Applicable. ITEM 11. CONTROLS AND PROCEDURES. - --------------------------------- (a) The Registrant's President and Treasurer have reviewed the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the "Act")) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934. Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the Registrant and by the Registrant's service provider. (b) There were no significant changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the Registrant's second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting. ITEM 12. EXHIBITS. - ----------------- (a) (1) Any code of ethics or amendment thereto, that is subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing an exhibit. Not Applicable. (2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith. (3) Any written solicitation to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable to open-end investment companies. (b) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) MDT Funds ----------------------------------------- By (Signature and Title) /s/ R. Schorr Berman ------------------------------ R. Schorr Berman, President Date April 11, 2006 ------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title) /s/ R. Schorr Berman ----------------------------- R. Schorr Berman, President Date April 11, 2006 ------------------------------------------------- By (Signature and Title) /s/ John Duane ----------------------------- John Duane, Treasurer Date April 11, 2006 ------------------------------------------------- EX-99.CERT 2 mdtf-ex99cert302.txt Exhibit (a)(2) CERTIFICATIONS -------------- I, R. Schorr Berman, certify that: 1. I have reviewed this report on Form N-CSR of MDT Funds; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: April 11, 2006 /s/ R. Schorr Berman ------------------ -------------------- R. Schorr Berman President CERTIFICATIONS -------------- I, John Duane, certify that: 1. I have reviewed this report on Form N-CSR of MDT Funds; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: April 11, 2006 /s/ John Duane ------------------ -------------- John Duane Treasurer EX-99.906 CERT 3 mdtf-ex99cert906.txt Exhibit (B) CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT --------------------------------------------------------------- Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of MDT Funds, does hereby certify, to such officer's knowledge, that the report on Form N-CSR of MDT Funds for the period ended January 31, 2006 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as applicable, and that the information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of MDT Funds for the stated period. /s/ R. Schorr Berman /s/ John Duane - -------------------- -------------- R. Schorr Berman John Duane President, MDT Funds Treasurer, MDT Funds Dated: April 11, 2006 -------------- This statement accompanies this report on Form N-CSR pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed as filed by MDT Funds for purposes of Section 18 of the Securities Exchange Act of 1934. -----END PRIVACY-ENHANCED MESSAGE-----