N-CSR 1 ncsr0506.txt REPORT TO SHAREHOLDERS 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 811-09134 Manor Investment Funds, Inc. (Exact name of registrant as specified in charter) 15 Chester Commons, Malvern, PA 19355 (Address of principal executive offices) Daniel A. Morris 15 Chester Commons, Malvern, PA 19355 (Name and address of agent for service) Registrant s telephone number, including area code: 610-722-0900 Date of fiscal year end: December 31 Date of reporting period: June 30,2005 Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270-30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ( OMB ) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection if information under the clearance requirement of 44 U.S.C. 3507. Item 1. Reports to Stockholders. Manor Investment Funds, Inc. Semi-Annual Report June 30, 2005 (Unaudited) Fund Office: 15 Chester Commons Malvern, PA 19355 610-722-0900 800-787-3334 www.manorfunds.com Managed by: Morris Capital Advisors, Inc. Manor Investment Funds, Inc. 15 Chester Commons Malvern, PA 19355 June 30, 2005 Dear Fellow Shareholders: I am pleased to report that the Manor Funds had another excellent quarter. We performed well compared to the markets and our peer groups. Fund assets continue to grow from new shareholders and contributions from existing shareholders. 3rd Out Of 899! We got a call from Don in New York asking for information and account application forms for the Funds. It was a request from outside of our market so we asked how he heard about us. Don replied that he saw us listed in The Wall Street Journal among the top performing mutual funds. That got our attention, so we grabbed the Journal to check it out. There we were. Page R12 of The Wall Street Journal s Mutual Fund Quarterly Review published on July 5, 2005 lists the Category Kings in each mutual fund market segment. The Manor Fund, our longest running fund, was ranked 3rd out of 899 funds in the Large-Cap Core category, based on total return (assuming reinvestment of dividends, and reflecting certain fee waivers currently in effect) over the year ending June 30, 2005. Also, the Manor Fund had the best 3-year performance among the top 10 funds listed as Category Kings in the Large-Cap Core category based on 1-year returns. Past performance is no guarantee of future results. Graduate On a warm summer night 1500 parents, siblings, friends, and relatives gathered in the bleachers as the graduates dressed in red and gold assembled on the field in front of us. The words Endless Possibilities emblazoned the podium before us. It was a classic late-spring evening when the expectation of summer and so much more hung in the hot and humid air. Waiting in the bleachers for the program to begin gave me the opportunity to reflect on the many changes that I witnessed over the last several years. Youthful energy that was often scattered and diffused by an inability to focus on anything but the present was now beginning to focus on the future. In the range of thoughts and emotions for a parent at a time like this, I couldn t help but focus on the impressive group of young people before me. Their courses in the sciences and humanities were impressive. Their accomplishments in the arts, social work, and athletics, equally so. I kept thinking of the words, sung by Louie Armstrong, I hear babies cry, I watch them grow, they ll learn much more than I ll ever know. And, I think to my self, what a wonderful world. In the bleachers that night I thought that if the future of America was reflected in the faces and accomplishments of those young men and women that our future is bright. The Manor Fund The Manor Fund generated a return of 2.90% for the quarter ended June 30, 2005, outperforming both the S&P 500 index and the Lipper Large-Cap Core mutual fund index, 1.36% and 1.28%, respectively. The Fund also outperformed each index for the, trailing 1-year, 3-year, and 5-year periods, generating returns of 13.27%, 13.03%,and 1.38%, as compared to S&P 500 index returns of 6.30%, 8.26%, and 2.36%, and Lipper Large-Cap Core mutual fund index returns of 4.85%, 6.33%, and 3.54%. The Fund was helped by gains in KB Home, Best Buy, Wellpoint, Vornado Realty Trust, and Allstate. KB Home, one of the top performers last quarter, rose despite concerns about a speculative bubble in the housing market. Best Buy, the industry leader in consumer electronics retailing, rebounded after a weak first quarter. Wellpoint, another top performer last quarter, rose on strong revenue and earnings gains. Vornado Realty Trust, an owner and manager of real estate, rose steadily on the benefits arising from the restructuring at Sears. Vornado owns many of the valuable Sears locations. Allstate rose steadily throughout the quarter based on investor expectations of stronger earnings and lower casualty claims. The Fund was hurt by weak performance from Tyco, Norfolk Southern, Nucor Corp., Alcan, and IBM. Tyco and Norfolk Southern are considered cyclical economically sensitive companies, they tend to rise and fall in relation to the strength of the economy. They declined during the quarter because investors expect the economy to weaken as a result of continued interest rate hikes by the Fed. Nucor and Alcan also suffered as a result of investor reaction to Fed policy. In this case, investors saw continued rate hikes as reducing inflationary pressure, thereby reducing earnings at these commodity-sensitive companies. IBM suffered from poor execution in the highly competitive technology sector. During the quarter we sold Cardinal Health and took gains in KB Home and Occidental Petroleum. We used the proceeds to purchase Home Depot and Jabil Circuit. Cardinal Health has struggled to manage the changing marketplace for pharmacy benefits managers, while Home Depot and Jabil are two companies we believe have better growth prospects and more attractive valuations. The Growth Fund The Growth Fund generated a return of 3.39% for the quarter ended June 30, 2005, outperforming the S&P 500 index return of 1.36%. The fund also outperformed the S&P 500 index for the trailing 3-years and since inception of the Fund, generating an annualized return of 9.68% and 0.59%, compared to the S&P 500 return of 8.26% and 0.82%. The Fund also outperformed the Lipper Large-Cap Growth mutual fund index for the trailing 1-year, 3-year, 5-year, and since inception generating returns of 5.71%, 9.68%, -3.29%, and 0.59%, as compared to the Lipper index returns of 3.81%, 5.63%, -9.99% and 6.39%. The Fund was helped by gains in Coach, Express Scripts, Baker-Hughes, ETrade Financial, and Intel. Coach reported strong earnings in the 1st quarter and raised earnings estimates for the balance of the year. Express Scripts has effectively managed the changing marketplace for pharmacy benefits managers. It also reported better than expected earnings last quarter. Baker-Hughes, an oil exploration service company, rose on the probability of increased exploration activity given persistently high oil prices. Etrade Financial, a leading discount broker, rose when consolidation in the industry caused investors to bid up shares. Intel rose, after several disappointing quarters, when a recovery in the technology sector raised investor expectations for revenue and earnings growth. The Fund was hurt by poor performance from Gap Inc., Ebay, Qualcomm, FedEx Corp., and Xilinx. Gap seems to be struggling to find the right product mix to boost sales while competing with smaller rivals. Ebay continues to suffer from investor concerns about slowing earnings growth. The decline in Qualcomm reflects investor concern about patent infringement litigation with competitors. FedEx was hurt by investor concerns about economic growth, while Xilinx reported disappointing earnings. During the quarter we took gains in TXU Corp. because it had appreciated beyond the upper range of our target weighting relative to the total portfolio. We used the proceeds to purchase United Health and Genentech. United Health provides healthcare services throughout the US, while Genentech is a biotech company that has announced several breakthroughs in cancer treatments and seems poised to expand the applications for these products. The Bond Fund The Bond Fund rose 1.75% during the quarter, underperforming both the Lehman Intermediate Government Index and the Lipper US Government mutual fund index (2.40% and 2.88%, respectively). The Fund portfolio is managed to preserve principal in this volatile market, providing shareholders with a low risk alternative to stocks. The Fund s investment portfolio of US Treasury securities is conservative, with an average maturity for the entire portfolio of 4.4 years, an average duration of 3.09 years, and an average yield to maturity of 3.47%. Think Positively The recognition of the Manor Fund in The Wall Street Journal is an important investing lesson. That fund struggled in its early years when investors were fixated on the popular dot com growth companies. Despite our frustrations with the short-term results, we stuck with our conservative investment discipline and have been rewarded, reinforcing the fact that it pays to think long-term rather than chase the latest fad. Currently it seems fashionable to bash America and focus on the negative. While it may be easy to target the problems in business, politics, global relations and economics, I think that the positives far outweigh the negatives. Based on the many young people that I have met, and the hope and promise that they bring to our world, I too will remain focused on an investment strategy that looks to a bright tomorrow. Sincerely, Daniel A. Morris Manor Investment Funds, Inc. Mutual Fund Summary Information Manor Fund Growth Fund Bond Fund Performance, Sector Allocations, & Fund Expenses June 30, 2005 MANOR INVESTMENT FUNDS, INC. Manor Fund June 30, 2005 Top Holdings & Sectors Top Company Holdings Company % of Net Assets Wellpoint 4.3 % Devon Energy 4.2 % Allstate Insurance 3.7 % Best Buy 3.6 % Manor Care 3.5 % Top Industry Sectors Industry % of Net Assets Financial 20.8 % Industrial 13.2 % Consumer Disc. 13.0 % Health Care 12.9 % Information Tech. 11.7 % Fund Performance Quarter and Annualized Total Return for Periods Ending June 30, 2005 Value of $10,000 invested in the Fund Inception (9/26/95) to present (6/30/05) Compared to the S&P 500 and Lipper Large Cap Core Index $32,000 $28,000 $24,000 + + + $20,000 # + + # * * $16,000 # # + # * # * * $12,000 * +# *+# * $8,000 9/26/1995 | 8/31/1997 | 8/31/1999 | 8/31/2001 | 8/31/2003 * Manor Fund + S&P 500 # L Cap Core Manor Fund S&P 500 Index Lipper LC Core Funds 2nd Quarter 2.90 % 1.36 % 1.28 % 1-Year 13.27 % 6.30 % 4.85 % 3-Year Annualized 13.03 % 8.26 % 6.33 % 5-Year Annualized -1.38 % -2.36 % -3.54 % Annualized since inception 12/31/93 5.34 % 9.33 % 5.86 % The S&P 500 Index is a capital-weighted index, representing the aggregate market value of the common equity of 500 stocks primarily traded on the New York Stock Exchange. The Lipper LC Core mutual fund index is an index of mutual funds managed with a similar investment style. Both are computed on a total return basis. The chart assumes an initial gross investment of $10,000 on 9/25/1995 (commencement of operations). Returns shown include the reinvestment of dividends. Past performance does not predict future performance. Investment return and principal value will fluctuate, so your shares at redemption may be worth more or less than the original cost. MANOR INVESTMENT FUNDS, INC. Growth Fund June 30, 2005 Top Company Holdings Company % of Net Assets Coach 4.4 % Express Scripts 4.1 % Dell Inc. 3.4 % Capital One 3.4 % Quest Diagnostics 3.3 % Top Industry Sectors Industry % of Net Assets Consumer Disc. 22.8 % Financial 17.8 % Health Care 17.1 % Information Tech. 15.8 % Energy 6.3 % Fund Performance Value of $10,000 invested in the Fund Inception (6/30/99) to present (6/30/05) Compared to the S&P 500 and Lipper Large-Cap Growth Index $14,000 $12,000 * # + $10,000 *+# * * + * + $8,000 *+ *+ + # # # $6,000 # # $4,000 6/30/1999 | 6/30/2001 | 6/30/2003 | 6/30/2005 * Growth Fund + S&P 500 # L Cap Growth Quarter and Annualized Total Return for Periods Ending June 30, 2005 Growth Fund S&P 500 Index Lipper LCGrowth Funds 2nd Quarter 3.39 % 1.36 % 3.46 % 1-Year 5.71% 6.30 % 3.81 % 3-Year Annualized 9.68 % 8.26 % 5.63 % 5-Year Annualized -3.29 % -2.36 % -9.99 % Annualized since inception 6/30/93 0.59 % -0.82 % -6.39 % The S&P 500 Index is a capital-weighted index, representing the aggregate market value of the common equity of 500 stocks primarily traded on the New York Stock Exchange. The Lipper LC Growth mutual fund index is an index of mutual funds managed with a similar investment style. Both are computed on a total return basis. The chart assumes an initial gross investment of $10,000 on 6/30/1999 (commencement of operations). Returns shown include the reinvestment of dividends. Past performance does not predict future performance. Investment return and principal value will fluctuate, so your shares at redemption may be worth more or less than the original cost. MANOR INVESTMENT FUNDS, INC. Asset Allocation Manor Fund and Growth Fund June 30, 2005 Manor Fund Industry Sectors Industry % of Net Assets Financial 20.8 % Industrial 13.2 % Consumer Discretionary 13.0 % Health Care 12.9 % Information Technology 11.7 % Energy 9.9 % Index Securities 5.6 % Cash Equivalents 4.1 % Consumer Staples 3.4 % Utility 3.4 % Material 2.0 % ------ 100.0 % ------ Growth Fund Industry Sectors Industry % of Net Assets Consumer Discretionary 22.8 % Financial 17.8 % Health Care 17.1 % Information Technology 15.8 % Energy 6.3 % Consumer Staples 5.7 % Industrial 5.1 % Cash Equivalent 4.5 % Utility 2.6 % Index Securities 2.3 % ----- 100.0 % ----- MANOR INVESTMENT FUNDS, INC. Manor Fund and Growth Fund Expenses June 30, 2005 As a shareholder of the Fund, you incur indirect costs, such as management fees, and other Fund operating expenses. This example is intended to help you understand your indirect costs, also referred to as ongoing costs, (in dollars) of investing in the Fund, and to compare these costs with the ongoing costs of investing in other mutual funds. This example is based on an investment of $1,000 invested at the beginning of the period and held for the entire 6 month period of January 1, 2005 through June 30, 2005. Actual Expenses The first section of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested at the beginning of the period, 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 first line under the heading Expenses Paid During Period to estimate the expenses you paid on your account during this period. Hypothetical example for comparison purposes The second section of the table provides information about hypothetical account values and hypothetical expense based on the Funds actual expense ratio 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 ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any direst costs, such as wire fees or low balance fees. Therefore, the second line of the table 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 direct costs were included, your costs would be higher. Expenses Paid Total Beginning Ending During Period* Return Account Value Account Value January 1, 2005 - January 1, 2005 June 30, 2005 June 30, 2005 Based on Actual Total Return as indicated Manor Fund 1.85% $ 1,000.00 $ 1,018.50 $ 7.57 Growth Fund 0.39% $ 1,000.00 $ 1,003.90 $ 7.51 Based on Hypothetical 5.0% Annualized Return Manor Fund $ 1,000.00 $ 1,017.35 $ 7.57 Growth Fund $ 1,000.00 $ 1,017.35 $ 7.57 Expenses are equal to the Funds annualized expense ratios, capped at 1.5%, which is net of any expenses paid indirectly, multiplied by the average account value over the period. The ending account value for each Fund in the table is based on its actual total return for the 6 month period of January 1, 2005 to June 30, 2005, 1.85% for the Manor Fund, and 0.39% for the Growth Fund. MANOR INVESTMENT FUNDS, INC. Bond Fund June 30, 2005 Top Holdings Security % of Net Assets US Treasury 1.875% due 11/30/05 15.9 % US Treasury 3.625% due 7/15/09 13.3 % US Treasury 4.000% due 2/15/14 10.7 % US Treasury 3.875% due 2/15/13 10.7 % US Treasury 3.250% due 8/15/07 10.6 % Fund Performance Value of $10,000 invested in the Fund Inception (6/30/99) to present (6/30/05) Compared to the Lehman Int. Gov t and Lipper Gov t Index +# $14,000 #+ +# +# $12,500 * * * +# * * $11,000 *+# *+# $9,500 6/30/1999 | 6/30/2001 | 6/30/2003 | 6/30/2005 * Bond Fund + Lip U.S. Gov. # Leh Int Gov Quarter and Annualized Total Return for Periods Ending June 30, 2005 Bond Lipper Lehman Fund US Gov t Intermediate Fund Index Gov t Index 2nd Quarter 1.75 % 2.88 % 2.40 % 1-Year 1.25 % 6.18 % 3.92 % 3-Year Annualized 1.75 % 4.58 % 4.14 % 5-Year Annualized 3.81 % 6.36 % 6.04 % Annualized since inception 6/30/99 3.77 % 6.02 % 5.80 % The Lehman Intermediate Government Index is represents the aggregate market value of the US Government securities with a maximum maturity of 10 years. The Lipper US Government mutual fund index is an index of mutual funds managed using US Government securities. Both are computed on a total return basis. The chart assumes an initial gross investment of $10,000 on 6/30/1999 (commencement of operations). Returns shown include the reinvestment of dividends. Past performance does not predict future performance. Investment return and principal value will fluctuate, so your shares at redemption may be worth more or less than the original cost MANOR INVESTMENT FUNDS, INC. Bond Fund Expenses June 30, 2005 As a shareholder of the Fund, you incur indirect costs, such as management fees, and other Fund operating expenses. This example is intended to help you understand your indirect costs, also referred to as ongoing costs, (in dollars) of investing in the Fund, and to compare these costs with the ongoing costs of investing in other mutual funds. This example is based on an investment of $1,000 invested at the beginning of the period and held for the entire 6 month period of January 1, 2005 through June 30, 2005. Actual Expenses The first section of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested at the beginning of the period, 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 first line under the heading Expenses Paid During Period to estimate the expenses you paid on your account during this period. Hypothetical example for comparison purposes The second section of the table provides information about hypothetical account values and hypothetical expense based on the Fund s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund s 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 ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any direst costs, such as wire fees or low balance fees. Therefore, the second line of the table 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 direct costs were included, your costs would be higher. Expenses Paid Total Beginning Ending During Period* Return Account Value Account Value January 1, 2005 - January 1, 2005 June 30, 2005 June 30, 2005 Based on Actual Total Return as indicated Bond Fund 1.06 % $ 1,000.00 $ 1,010.60 $ 5.03 Based on Hypothetical 5.0% Annualized Return Bond Fund $ 1,000.00 $ 1,019.80 $ 5.05 * Expenses are equal to the Fund s annualized expense ratio, capped at 1.0%, which is net of any expenses paid indirectly, multiplied by the average account value over the period. The ending account value for the Fund in the table is based on its actual total return for the 6 month period of January 1, 2005 to June 30, 2005, of 1.06%. Manor Investment Funds, Inc. Financial Statements (Unaudited) June 30, 2005 MANOR INVESTMENT FUNDS, INC. MANOR FUND Schedule of Investments - Unaudited June 30, 2005 Description Shares MarketValue COMMON STOCKS 90.3% Consumer Discretionary 13.0% Best Buy Co., Inc 1,550 $ 106,252 Home Depot 2,390 92,971 KB Home 1,290 98,337 Reebok Int., Ltd. 2,090 87,425 -------- 384,985 -------- Consumer Staples 3.4% Pepsico, Inc. 1,860 100,309 -------- 100,309 Energy - 9.9% Devon Energy 2,440 123,659 Nabors* 1,310 79,412 Occidental Pet. 1,190 91,547 -------- 294,618 -------- Financial 20.8% Allstate Insurance 1,830 109,343 Citigroup, Inc. 1,969 91,027 Fed. Nat. Mtg. 1,120 65,408 Freddie Mac 1,440 93,931 MBNA Corp. 3,070 80,311 Shurgard Storage 2,060 94,678 Vornado Realty Tr. 1,010 81,204 -------- 615,902 -------- Health Care 12.9% Johnson & Johnson 1,350 87,750 Manor Care, Inc. 2,590 102,901 Pfizer, Inc. 2,350 64,813 Wellpoint, Inc. * 1,840 128,138 -------- 383,602 -------- Industrial 13.2% Alcan 1,940 58,200 Deere & Co. 980 64,180 General Electric 2,270 78,655 Norfolk Southern 2,410 74,614 Paccar, Inc. 630 42,840 Tyco, Inc. 2,440 71,248 -------- 389,737 -------- Information Technology 11.7% Cisco Systems * 2,350 44,838 Citrix Systems * 2,570 55,666 Intel Corp. 2,980 77,540 Int. Bus. Machines 950 70,490 Jabil Circuit 3,220 98,950 -------- 347,484 -------- Material 2.0% Nucor Corp. 1,290 58,850 -------- 58,850 -------- Utility 3.4% Exelon 1,940 99,580 -------- 99,580 -------- TOTAL COMMON STOCKS (Cost $2,085,809) 2,675,067 INDEX SECURITIES 5.6% Barra Value Index 1,340 83,535 SPDR Trust 690 82,234 -------- TOTAL INDEX SECURITIES (Cost $126,876) 165,769 -------- SHORT-TERM INVESTMENTS 4.1% 1st Amer. Gov. Fund 65,516 65,516 1st National M Mkt 55,549 55,549 -------- TOTAL SHORT-TERM INVESTMENTS (Cost $121,065) 121,065 TOTAL INVESTMENTS 100.0% (Cost $ 2,333,750) 2,961,901 Other Assets less Liabilities Net 0.0% 29 ----------- NET ASSETS 100.0% $ 2,961,930 =========== *Non-income producing during the period. The accompanying notes are an integral part of these financial statements MANOR INVESTMENT FUNDS, INC. GROWTH FUND Schedule of Investments - Unaudited June 30, 2005 Description Shares MarketValue COMMON STOCKS 93.2% Consumer Discretionary 22.8% Bed, Bath, Beyond * 1,700 $ 71,026 Coach Inc. * 3,980 133,609 Ebay, Inc. * 2,160 71,302 Fortune Brands 1,030 91,464 Gap, Inc. 4,020 79,395 Interactive Corp. * 1,570 37,711 Jones Apparel Grp 1,270 39,421 Mohawk Ind. * 920 75,900 Staples 4,335 92,292 -------- 692,120 -------- Consumer Staples 5.7% News Corp., Inc. 5,030 84,805 Walgreen Co. 1,900 87,382 -------- 172,187 -------- Energy 6.3% Baker-Hughes 1,920 98,227 Valero Energy 1,170 92,559 -------- 190,786 -------- Financial 17.8% Ace Limited 2,130 95,531 American Int. Grp. 1,160 67,396 Capital One 1,290 103,213 Etrade Financial * 6,060 84,779 Golden West Fin. 1,560 100,433 Hospitality Prop. Tr. 2,020 89,021 -------- 540,373 -------- Health Care 17.1% Express Scripts * 2,460 122,950 Forest Labs * 940 36,519 Genentech Inc. 1,110 89,111 Ivax Corp. * 3,553 76,390 Quest Diagnostics 1,900 101,213 Unitedhealth Group 1,760 91,766 -------- 517,949 -------- Industrial 5.1% Cendant 3,910 87,467 Fedex Corp. 820 66,428 -------- 153,895 -------- Information Technology 15.8% Dell, Inc. * 2,630 103,780 Intel Corp. 3,200 83,264 Microsoft Corp. 3,260 80,978 Qualcomm 2,460 87,146 Technology SPDR 2,400 47,808 Xlinix, Inc. 2,930 74,715 -------- 477,691 -------- Utility 2.6% TXU Corp 930 77,274 -------- 77,274 -------- TOTAL COMMON STOCKS (Cost $2,457,000) 2,822,275 -------- INDEX SECURITIES 2.3% Barra Growth Index 1,240 70,060 -------- TOTAL INDEX SECURITIES (Cost $65,266) 70,060 -------- SHORT-TERM INVESTMENTS 4.6% 1st Amer. Gov. Fund 47,641 47,641 1st National M Mkt 90,455 90,455 -------- TOTAL SHORT-TERM INVESTMENTS (Cost $138,096) 138,096 -------- TOTAL INVESTMENTS 100.1% (Cost $ 2,660,362) 3,030,431 Other Assets less Liabilities Net 0.1% (3,796) ----------- NET ASSETS 100.0% $ 3,026,635 =========== *Non-income producing during the period. The accompanying notes are an integral part of these financial statements MANOR INVESTMENT FUNDS, INC. BOND FUND Schedule of Investments - Unaudited June 30, 2005 Description Shares MarketValue U.S. GOVERNMENT BONDS 90.0% U.S. Treasury 5.875% Due 11-15-05 50,000 $ 50,461 U.S. Treasury 1.875% Due 11-30-05 300,000 298,219 U.S. Treasury 2.250% Due 02-15-07 100,000 97,875 U.S. Treasury 3.250% Due 08-15-07 200,000 198,375 U.S. Treasury 3.125% Due 10-15-08 200,000 196,625 U.S. Treasury 3.625% Due 07-15-09 250,000 249,375 U.S. Treasury 3.500% Due 12-15-09 200,000 198,312 U.S. Treasury 3.875% Due 02-15-13 200,000 200,813 U.S. Treasury 4.000% Due 02-15-14 200,000 201,625 -------- TOTAL U.S. GOVERNMENT BONDS (Cost $1,697,478) 1,691,680 SHORT-TERM INVESTMENTS 9.2% 1st American Treasury Obligation Fund 119,003 119,003 1st National Money Market 53,688 53,688 -------- TOTAL SHORT-TERM INVESTMENTS (Cost $ 172,691) 172,691 -------- TOTAL INVESTMENTS 99.2% (Cost $ 1,870,169) 1,864,371 Other Assets less Liabilities Net 0.8% 15,423 ----------- NET ASSETS - 100.0% $ 1,879,794 =========== The accompanying notes are an integral part of these financial statements MANOR INVESTMENT FUNDS, INC. Statements of Assets and Liabilities - Unaudited June 30, 2005 ManorFund Growth Fund Bond Fund ASSETS Investments in Securities (cost of $2,333,750, $2,660,362 and $1,870,169, respectively) $ 2,961,901 $ 3,030,431 $ 1,864,371 Receivables: Dividends 3,143 1,079 -- Interest 104 190 15,955 --------- --------- --------- Total Assets 2,965,148 3,031,700 1,880,326 LIABILITIES Accrued expenses 3,218 5,065 532 --------- --------- --------- Total Liabilities 3,218 5,065 532 --------- --------- -------- NET ASSETS $ 2,961,930 $ 3,026,635 $ 1,879,794 NET ASSETS CONSIST OF: Capital stock - par value $ 187 $ 292 $ 179 Paid in capital 2,434,650 2,889,869 1,871,793 Undistributed net investment income (4,492) (52,311) 14,570 Accumulated net realized (loss) gain (96,566) (181,288) (951) Net unrealized appreciation 628,151 370,073 (5,797) --------- --------- --------- NET ASSETS $ 2,961,930 $ 3,026,635 $ 1,879,794 ========= ========= ========= CAPITAL SHARES OUTSTANDING 185,361 292,174 179,425 (10,000,000 authorized shares; $.001 par value) NET ASSET VALUE PER SHARE $ 15.98 $ 10.36 $ 10.48 MANOR INVESTMENT FUNDS, INC. Statements of Operations - Unaudited 6 Months Ending June 30, 2005 ManorFund Growth Fund Bond Fund Investment Income Dividends, net of foreign taxes withheld Of $93, $ - , and $ - , Respectively $ 23,777 $ 10,808 $ -- Interest 869 1,582 22,607 --------- --------- --------- Total investment income 24,646 12,390 22,607 Expenses Advisory fee (Note 2) 13,979 14,380 3,484 Professional fees 3,010 3,010 3,223 Custodian fee 2,102 1,750 1,341 Insurance -- -- -- Registration 837 778 100 Taxes -- -- -- Other 942 1,753 -- --------- --------- --------- Total expenses 20,870 21,671 8,148 --------- --------- --------- Net Investment Income (Loss) 3,776 (9,281) 14,459 --------- --------- --------- Realized & Unrealized Gain (Loss) on Investments (Note 4) Net realized gain (loss) on Investments 88,804 127,733 171 Net change in unrealized appreciation/ depreciation on investments (37,329) (104,428) 2,769 --------- --------- --------- Net realized and unrealized gain (loss) on investments 51,475 23,305 2,940 --------- --------- --------- Net Increase (Decrease) in Net Assets Resulting from Operations $ 55,251 $ 14,024 $ 17,399 ========= ========= ========= The accompanying notes are an integral part of these financial statements MANOR INVESTMENT FUNDS, INC. Statements of Changes in Net Assets - Unaudited Manor Fund Growth Fund 6 Months Year 6 Months Year Ending Ended Ending Ended June 30 Dec. 31 June 30 Dec. 31 2005 2004 2005 2004 Increase (decrease) in Net Assets from Operations Net investment income (loss) $ 3,776 $ 7,288 $ (9,281) $ (4,328) Net realized gain (loss) on investments 88,804 (61,455) 127,733 (2,469) Net change in unrealized appreciation/ depreciation on investments (37,329) 401,002 (104,428) 314,571 Net increase (decrease) in net assets resulting from operations 55,251 346,835 14,024 307,774 -------- ------- -------- --------- Distributions to Shareholders -- (4,523) -- -- Capital Share Transactions Proceeds from shares sold 194,115 201,066 199,442 230,662 Reinvestment of distributions -- 4,523 -- -- Payment for shares redeemed (130,260) (319,818) (109,830) (171,155) Net increase in net assets from capital share transactions 63,855 (114,229) 89,612 59,507 -------- -------- -------- --------- Total Increase in Net Assets 119,106 228,083 103,636 367,281 Net Assets Beginning of Period 2,842,824 2,614,742 2,922,999 2,555,719 --------- --------- --------- --------- End of Period $ 2,961,930 $ 2,842,825 $ 3,026,635 $ 2,923,000 ========= ========= ========= ========= Transactions in Shares of Fund Sold 12,725 14,154 19,975 23,991 Issued in reinvestment of distributions -- 290 -- -- Redeemed (8,531) (22,197) (10,997) (18,042) -------- --------- --------- --------- Net increase (decrease) in outstanding shares of the Fund 4,194 (7,753) 8,978 5,949 ======== ========= ========= ========= The accompanying notes are an integral part of these financial statements. MANOR INVESTMENT FUNDS, INC. Statements of Changes in Net Assets (con t) - Unaudited Bond Fund 6 Months Year Ending Ended June 30 Dec. 31 2005 2004 Increase (decrease) in Net Assets from Operations Net investment income (loss) $ 14,459 $ 24,269 Net realized gain (loss) on investments 171 (1,123) Net change in unrealized appreciation/ depreciation on investments 2,769 (28,436) ---------- ---------- Net increase (decrease) in net assets resulting from operations 17,399 (5,290) ---------- ---------- Distributions to Shareholders -- (28,867) ---------- ---------- Capital Share Transactions Proceeds from shares sold 420,202 971,571 Reinvestment of distributions -- 28,867 Payment for shares redeemed (86,066) (1,207,292) ---------- ---------- Net increase (decrease) in net assets from capital share transactions 334,136 (206,854) ---------- ---------- Total Increase (Decrease) in Net Assets 351,535 (241,011) Net Assets Beginning of Period 1,528,259 1,769,270 ---------- ---------- End of Period $ 1,879,794 $ 1,528,259 ========== ========== Transactions in Shares of Fund Sold 40,421 91,541 Issued in reinvestment of Distributions -- 2,784 Redeemed (8,307) (114,136) ---------- ---------- Net (decrease) increase in outstanding shares of the Fund 32,114 (19,811) ========== ========== The accompanying notes are an integral part of these financial statements MANOR INVESTMENT FUNDS, INC. Notes to Financial Statements - Unaudited June 30, 2005 1 ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Organization: Manor Investment Funds, Inc. (the Company ) is a non- diversified regulated investment company and was incorporated in the Commonwealth of Pennsylvania on September 13, 1995. The primary investment objective of each of the Funds follows: Manor Fund - conservative capital appreciation and current income, investing primarily in common stocks of large corporations in the United States; Growth Fund - long-term capital appreciation, investing primarily in common stocks of U.S. corporations; Bond Fund intermediate-term fixed income, investing primarily in U.S. Government obligations. The following is a summary of the Funds significant accounting policies. Security Valuations: Equity securities generally are valued by using market quotations, but may be valued on the basis of prices furnished by a pricing service when the Advisor believes such prices accurately reflect the fair market value of such securities. Securities that are traded on any stock exchange or on the NASDAQ over-the-counter market are generally valued by the pricing service at the last quoted sale price. Lacking a last sale price, an equity security is generally valued by the pricing service at its last bid price. When market quotations are not readily available, when the Advisor determines that the market quotation or the price provided by the pricing service does not accurately reflect the current market value, or when restricted or illiquid securities are being valued, such securities are valued as determined in good faith by the Board of Directors. The Board has adopted guidelines for good faith pricing, and has delegated to the Advisor the responsibility for determining fair value prices, subject to review by the Board of Directors. Fixed income securities generally are valued by using market quotations, but may be valued on the basis of prices furnished by a pricing service when the Advisor believes such prices accurately reflect the fair market value of such securities. A pricing service utilizes electronic data processing techniques based on yield spreads relating to securities with similar characteristics to determine prices for normal institutional-size trading units of debt securities without regard to sale or bid prices. If the Advisor decides that a price provided by the pricing service does not accurately reflect the fair market value of the securities, when prices are not readily available from a pricing service, or when restricted or illiquid securities are being valued, securities are valued at fair value as determined in good faith by the Advisor, subject to review by the Board of Directors. Short term investments in fixed income securities with maturities of less than 60 days when acquired, or which subsequently are within 60 days of maturity, are valued by using the amortized cost method of valuation, which the Board has determined will represent fair value. Federal Income Taxes: The Fund s policy is to comply with the requirements of the Internal Revenue Code that are applicable to regulated investment companies and to distribute all its taxable income to its shareholders. Therefore, no federal income tax provision is required. Distributions to Shareholders: The Fund intends to distribute to its shareholders substantially all of its net realized capital gains and net investment income, if any, at year-end. Distributions will be recorded on ex-dividend date. Other: The Fund follows industry practice and records security transactions on the trade date. The specific identification method is used for determining gains or losses for financial statements and income tax purposes. Dividend income is recorded on the ex-dividend date and interest income is recorded on an accrual basis. Discounts and premiums are amortized over the useful lives of the respective securities when determined to be material. Withholding taxes on foreign dividends will be provided for in accordance with the Fund s understanding of the applicable country s tax rules and rates. Reclassifications: In accordance with SOP-93-2, the Funds record a reclassification in the capital accounts of a permanent book/tax difference from net investment loss to paid-in-capital. This reclassification has no impact on the net asset value of the Fund and is designed generally to present undistributed income and net realized gains on a tax basis, which is considered to be more informative to shareholders. Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. Actual results could differ from these estimates MANOR INVESTMENT FUNDS, INC. Notes to Financial Statements (con t) - Unaudited June 30, 2005 2. INVESTMENT ADVISORY AGREEMENT The Fund has an investment advisory agreement (the agreement ) with Morris Capital Advisors, Inc. (the Advisor ), with whom certain officers and directors of the Funds are affiliated, to furnish investment management services to the Funds. Under the terms of the agreement, the Funds will pay the Advisor a monthly fee based on the Funds average daily net assets at the annual rate of 1.00% for Manor Fund and Growth Fund and 0.5% for Bond Fund. For the six months ended June 30, 2005 the Advisor earned advisory fees from the Manor, Growth and Bond Funds of $13,979, $14,380 and $3,484 respectively. Under the terms of the agreement if the aggregate expenses of the Funds are equal to or greater than 1.5% for Manor Fund and Growth Fund and 1.00% for Bond Fund of the Funds net assets the Advisor will reimburse the Funds for these expenses. At December 31, 2004 the Advisor reimbursed the Bond Fund $500 for expenses. 3. INVESTMENT TRANSACTIONS Investment transactions, excluding short-term investments, for the six months ended June 30, 2005, were as follows: Manor Fund Growth Fund Bond Fund Purchases $ 285,284 $ 267,536 $ 446,758 Sales $ 293,554 $ 237,233 -- 4. FEDERAL INCOME TAXES Income and long-term capital gain distributions are determined in accordance with Federal income tax regulations, which may differ from accounting principals generally accepted in the United States. The following information is as of June 30, 2005: Manor Fund Growth Fund Bond Fund Federal tax cost of investments, including short-term investments $ 2,333,750 $ 2,660,362 $ 1,870,169 ---------- ---------- ---------- Gross tax appreciation of investments $ 729,733 $ 533,270 $ 6,514 Gross tax depreciation of investments (101,582) (163,200) (12,312) ---------- ---------- ---------- Net tax appreciation (depreciation) $ 628,151 $ 370,069 $ (5,798) ---------- ---------- ---------- Undistributed ordinary Income $ (4,492) $ (52,311) $ 14,570 Undistributed capital gain Income $ 88,804 $ 127,733 $ 171 Accumulated capital losses $ (96,566) $ (181,288) $ (952) The accumulated capital loss carryovers as of December 31, 2004 expire as follows: Manor Fund Growth Fund Bond Fund 2007 $ 40,300 $ 3,668 $ -- 2008 $ -- $ 151,266 $ -- 2009 $ 78,780 $ 45,013 $ -- 2010 $ 4,835 $ 48,507 $ -- 2011 $ -- $ 58,098 $ -- 2012 $ 61,455 $ 2,469 $ 1,123 The tax character of distributions paid during the years ended December 31, 2004 and 2003 were as follows: Manor Fund Growth Fund Bond Fund 2004 2003 2004 2003 2004 2003 Ordinary Income $ 4,523 - - - $ 28,867 $ 40,658 Long-term Capital Gain - - - - - $ 37,777 MANOR INVESTMENT FUNDS, INC. MANOR FUND Financial Highlights - Unaudited For a share of capital stock outstanding throughout the period 6 Mths. Ending 6/30/05 For the years ended December 31, ------- --------------------------------------- 2005* 2004 2003 2002 2001 2000 --------------------------------------------------------------------------- PER SHARE DATA --------------------------------------------------------------------------- Net asset value, beginning of Period $ 15.69 $ 13.84 $ 10.52 $ 13.20 $ 15.76 $ 17.08 --------------------------------------------------------------------------- Income from investment operations: Net investment income (loss) 0.02 0.035 - (0.01) (0.02) (0.06) Net realized and unrealized gain (loss) on investments 0.27 1.840 3.32 (2.67) (2.54) (1.26) ----- ------ ---- ------ ----- ------ Total from investment Operations 0.29 1.875 3.32 (2.68) (2.56) (1.32) --------------------------------------------------------------------------- Less Distributions - (0.025) - - - - ----- ------ ---- ------ ----- ------ Total distributions - (0.025) - - - - --------------------------------------------------------------------------- Net asset value, end of period $ 15.98 $ 15.69 $ 13.84 $ 10.52 $ 13.20 $ 15.76 ---------------------------------------------------------------------------- Total Return 1.84% 13.55% 31.56% -20.30% -16.24% -7.73% ---------------------------------------------------------------------------- Ratios and Supplemental Data: Net assets, end of period (000) $ 2,962 $ 2,843 $ 2,615 $ 1,750 $ 2,087 $ 2,569 Ratio of expenses to average net assets: Before reimbursements 1.47% 1.50% 1.52% 1.50% 1.50% 1.50% Net of reimbursements 1.47% 1.50% 1.50% 1.50% 1.50% 1.50% Ratio of net investment income to average net assets 0.13% 0.27% 0.04% -0.08% -0.11% -0.32% Portfolio Turnover Rate 10.05% 7.32% 4.26% 26.0% 28.0% 16.0% ---------------------------------------------------------------------------- *Unaudited The accompanying notes are an integral part of these financial statements MANOR INVESTMENT FUNDS, INC. GROWTH FUND Financial Highlights - Unaudited For a share of capital stock outstanding throughout the period 6 Mths. Ending 6/30/05 For the years ended December 31, ------- ---------------------------------------- 2005* 2004 2003 2002 2001 2000 ---------------------------------------------------------------------------- PER SHARE DATA ---------------------------------------------------------------------------- Net asset value, beginning of period $ 10.32 $ 9.22 $ 7.08 $ 8.95 $ 9.54 $ 11.72 ---------------------------------------------------------------------------- Income from investment operations: Net investment (loss) (0.03) (0.02) (0.05) (0.06) (0.05) (0.05) Net realized and unrealized Gain (loss) on investments 0.07 1.12 2.19 (1.81) (0.54) (2.13) ----- ----- ----- ----- ----- ------ Total from investment Operations 0.04 1.10 2.14 (1.87) (0.59) (2.18) ---------------------------------------------------------------------------- Less Distributions - - - - - - ----- ----- ----- ----- ----- ------ Total distributions - - - - - - ---------------------------------------------------------------------------- Net asset value, end of period $ 10.36 $ 10.32 $ 9.22 $ 7.08 $ 8.95 $ 9.54 ---------------------------------------------------------------------------- Total Return 0.39% 11.93% 30.23% -20.89% -6.18% -18.60% --------------------------------------------------------------------------- Ratios and Supplemental Data: Net assets,end of period (000) $ 3,027 $ 2,923 $ 2,556 $ 1,638 $ 1,522 $ 1,528 Ratio of expenses to average net assets: Before reimbursements 1.49% 1.50% 1.52% 1.50% 1.50% 1.52% Net of reimbursements 1.49% 1.50% 1.50% 1.50% 1.50% 1.52% Ratio of net investment income to average net assets -0.32% -0.16% -0.66% -0.70% -0.53% -0.44% Portfolio Turnover Rate 8.14% 30.42% 6.53% 13.2% 33.6% 16.0% ---------------------------------------------------------------------------- *Unaudited The accompanying notes are an integral part of these financial statements. MANOR INVESTMENT FUNDS, INC. BOND FUND Financial Highlights - Unaudited For a share of capital stock outstanding throughout the period 6 Mths. Ending 6/30/05 For the years ended December 31, ------- ---------------------------------------- 2005* 2004 2003 2002 2001 2000 ---------------------------------------------------------------------------- PER SHARE DATA ---------------------------------------------------------------------------- Net asset value, beginning of period $ 10.37 $ 10.58 $ 10.98 $ 10.63 $ 10.39 $ 9.90 ---------------------------------------------------------------------------- Income from investment operations: Net investment income 0.09 0.17 0.26 0.32 0.43 0.46 Net realized and unrealized gain (loss) on investments 0.02 (0.18) (0.17) 0.39 0.23 0.47 ---- ----- ----- ----- ---- ---- Total from investment Operations 0.11 (0.01) 0.09 0.71 0.66 0.93 --------------------------------------------------------------------------- Less Distributions - (0.20) (0.49) (0.36) (0.42) (0.44) ---- ----- ----- ----- ---- ---- Total distributions - (0.20) (0.49) (0.36) (0.42) (0.44) --------------------------------------------------------------------------- Net asset value, end of period $ 10.48 $ 10.37 $ 10.58 $ 10.98 $ 10.63 $ 10.39 --------------------------------------------------------------------------- Total Return 1.06% -0.09% 0.82% 6.69% 6.35% 9.39% --------------------------------------------------------------------------- Ratios and Supplemental Data: Net assets, end of period (000) $ 1,885 $ 1,528 $ 1,769 $ 1,962 $ 1,476 $ 803 Ratio of expenses to average net assets: Before reimbursements 0.99% 1.05% 1.04% 1.00% 1.00% 1.00% Net of reimbursements 0.99% 1.00% 1.00% 1.00% 1.00% 1.00% Ratio of net investment income to average net assets 0.88% 1.37% 2.30% 2.96% 4.01% 4.45% Portfolio Turnover Rate 12.16% 75.57% 50.61% 26.3% 0.0% 0.0% --------------------------------------------------------------------------- *Unaudited The accompanying notes are an integral part of these financial statements. MANOR INVESTMENT FUNDS, INC. ADDITIONAL INFORMATION Proxy Voting Procedures and Accord The Company s Board of Directors has approved proxy voting procedures setting forth guidelines and procedures for the voting of proxies relating to securities held by the Fund. Records of the Fund s proxy voting records are maintained and are available for inspection without charge by calling 1-800-787-3334 and on the SEC s website at http://www.sec.gov. The Board is responsible for overseeing the implementation of the procedures. The proxy voting record of the Fund can be reviewed on the web site of the Fund at www.ManorFunds.com. The Proxy voting history is located under Fund Information, Proxy Voting. Quarterly Portfolio Schedule The Company now files a complete schedule of investments with the SEC for the first and third quarters of each fiscal year on Form N-Q. These forms are available on the SEC S website at http://www.sec.gov. They may be reviewed and copied at the SEC s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-723-0330. Compensation of Board of Directors The members of the Board of Directors serve without compensation. Daniel A. Morris, President of Manor Investment Funds, Inc. ( the Funds ), and President of Morris Capital Advisors, Inc., adviser to the Funds, and an Interested Director of the Funds, receives no compensation directly from the Funds. He is compensated through the management fee paid to the adviser to the Funds. Investment Advisor Review At its regularly scheduled in-person meeting on March 29, 2005, the Board of Directors unanimously approved the continuance of the investment advisory contract with MCA. Prior to approving the contract, the Board discussed the services performed by MCA (as described herein), performance of the funds, fees and profits accruing to MCA, and economies of scale from which the funds could benefit as the funds grow. In conducting its review, the Board reviewed the fees and services incurred by other mutual funds. Morris Capital Advisors, Inc. (MCA) provides ongoing investment management for the portfolio of each Fund. In the execution of these duties MCA performs securities research, trading, and accounting for Fund portfolios. MCA also reconciles each portfolio with the Fund custodian to prevent errors in purchase and sale transactions, dividends, interest, and shareholder transactions. The investment performance of each Fund is compared to a broad market index and comparable mutual funds. As of December 31, 2004 the Manor Fund outperformed its benchmarks for the trailing quarter, 1-year, 3-year, and 5-year periods. The Growth Fund also outperformed its benchmarks for the trailing quarter, 1-year, 3-year, and 5-year periods ending December 31, 2004. The Bond Fund underperformed its benchmarks because the Fund is invested 100% in U.S. Treasury securities, with short maturities. This portfolio structure is designed to protect principal in periods of rising interest rates, and underperformed during the recent period of declining yields. In addition to investment management functions, MCA provides ongoing Shareholder accounting, acts as transfer agent for shares of the Fund, prepares and distributes all shareholder reports, prepares and submits all filings required by SEC rules and regulations, negotiates agreements with outside service providers, and processes all shareholder questions and requests. MCA provides these services, over and above the typical responsibilities of investment management, without compensation from the Fund. The cost of providing these services substantially reduce the net profit attributable to MCA from the sole execution of its duties under its investment advisory agreement with the Fund. As the Funds grow economies of scale will reduce the cost of services to the Fund, for the benefit of all Fund shareholders. It is expected that these economies of scale will benefit shareholders when Fund assets exceed $25 million. Board of Directors Information Manor Investment Funds, Inc. June 30, 2005 The business and affairs of the Fund are managed under the direction of the Funds Board of Directors. Information pertaining to the Directors of the Fund are set forth below. The Statement of Additional Information includes addition information about the Funds Directors, and is available without charge, by calling 1-800-787-3334. Each director may be contacted by writing to the director c/o Manor Investment Funds, Inc., 15 Chester Commons, Malvern, PA 19355. Independent Directors JAMES MCFADDEN James McFadden is a Director of the Fund, and Chairman of the Audit Committee. He serves a one-year term, and stands for re-election annually. He has been a Director since 9/25/1995. Mr. McFadden is Vice President of Marketing for MBNA Corporation. He is not a Director for any other public companies. JOHN MCGINN John McGinn is a Director of the Fund, and serves on the Audit Committee. He serves a one-year term, and stands for re-election annually. He has been a Director since 11/5/2002. Mr. McGinn is head of Credit Review for Vertex, Inc. He is not a Director for any other public companies. FRED MYERS Fred Myers is a Director of the Fund. He serves a one-year term, and stands for re-election annually. He has been a Director since 9/25/1995. Mr. Myers is founding Partner of the accounting firm of Myers & Associates, CPA s. He is not a Director for any other public companies. EDWARD SZKUDLAPSKI Edward Szkudlapski is a Director of the Fund. He serves a one-year term, and stands for re-election annually. He has been a Director since 5/15/2000. Mr. Szkudlapski is President of Eclipse Business Systems. He is not a Director for any other public companies. DONALD THOMPSON Donald Thompson is a Director of the Fund. He serves a one-year term, and stands for re-election annually. He has been a Director since 4/20/1999. Mr. Thompson is a Network Administrator and Healthcare Consultant. He is not a Director for any other public companies. ALAN WEINTRAUB Alan Weintraub is a Director of the Fund. He serves a one-year term, and stands for re-election annually. He has been a Director since 9/25/1995. Mr. Weintraub is a Chief Technical Officer with Qumas, Cork, Ireland. He is not a Director for any other public companies. Interested Directors DANIEL A. MORRIS Daniel A. Morris is a Director of the Fund, and President of Morris Capital Advisors, Inc., advisor to the Fund. He serves a one-year term, and stands for re-election annually. He has been a Director since 9/25/1995. Prior to founding Morris Capital Advisors, Inc., he was Senior Vice President of Consistent Asset Management Company, an investment adviser for separate accounts and registered investment companies. As President of the Fund, he is considered an Interested Director. He is not a Director for any other public companies. BRUCE LAVERTY Bruce Laverty is a Director of the Fund, and serves as legal counsel to the Fund. He serves a one-year term, and stands for re-election annually. He has been a Director since 9/25/1995. Mr. Laverty is a Partner of the law firm Valocchi, Fischer & Laverty legal counsel to the Fund. He is not a Director for any other public companies. Manor Investment Funds, Inc. Fund Office: 15 Chester County Commons Malvern, PA 19355 610-722-0900 800-787-3334 www.manorfunds.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 REGISTRANTAS. Not applicable for semi-annual reports. ITEM 6. [RESERVED.] ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. [RESERVED.] ITEM 9. CONTROLS AND PROCEDURES. ITEM 10. EXHIBITS. (a) (1) Code of Ethics - For annual reports. (a) (2) Certifications persuant to Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. (b) Certification pursuant ot Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. 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 undershgned, thereunto duly authorized. Manor Investment Funds, Inc. By /s/ Daniel A. Morris President Date 6/30/2005