-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, WKDP2sNj7VO8lB4rve5bgV1x3LTwuFuKXuY8TVQ9XC3fJg+CnRRdM/dMAg7iLbYv 8B833zhdYZzQkJJemJRJxQ== 0000950007-95-000089.txt : 199507050000950007-95-000089.hdr.sgml : 19950705 ACCESSION NUMBER: 0000950007-95-000089 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950430 FILED AS OF DATE: 19950703 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BLANCHARD FUNDS CENTRAL INDEX KEY: 0000789289 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 133333918 STATE OF INCORPORATION: MA FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-04579 FILM NUMBER: 95551849 BUSINESS ADDRESS: STREET 1: 41 MADSON AVE 24TH FL CITY: NEW YORK STATE: NY ZIP: 10010 BUSINESS PHONE: 2127797979 MAIL ADDRESS: STREET 1: 41 MADISON AVENUE 24TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10010 FORMER COMPANY: FORMER CONFORMED NAME: BLANCHARD STRATEGIC GROWTH FUND DATE OF NAME CHANGE: 19901225 N-30D 1 ANNUAL REPORT Dear Shareholders, I'm pleased to report on the positive performance of your Blanchard 100% Treasury Money Market Fund for the fiscal year ended April 30, 1995. Although past performance is no guarantee of future results, I believe the past fiscal year's results demonstrate the Fund's ability to seek solid monthly income while placing special emphasis on capital preservation. The Year In Review During 1994 and into the first quarter of 1995, the Federal Reserve aggressively raised interest rates seven times. The final tightening was on February 1, 1995, when the Federal Reserve raised the Fed Funds level by 50 basis points (.50%) to 6.00%. The period represented a well-balanced economic expansion that reflected few imminent signs of substantial weakening, and the Federal Reserve was acting to forestall potential inflation. The domestic bond market suffered negative consequences this past year, as the increase in interest rates caused the prices of fixed income securities to decline. Consequently, in an interest rate environment reflecting higher rates, the Blanchard 100% Treasury Money Market Fund generated an increase in yields paid, while preserving your principal investment. Looking ahead to the upcoming year, we feel that the substantial slowdown in economic growth will cause the Federal Reserve to hold interest rates stable until the fourth quarter. Furthermore, we believe that the economy is heading toward a "soft landing," which is defined as a gradual slowdown in economic growth without incurring a recession. Because your Fund invests strictly in U.S. Treasury securities, it will continue to offer you a potentially "safe harbor" from any market volatility, while generating monthly income that is exempt from state and local taxes (except in Pennsylvania) _ so you'll keep more of what you earn. Additionally, the Fund's convenient free check writing privilege offers you immediate access at all times to the cash in your account. We look forward to being of continued service to you throughout this new fiscal year 1995. Rest assured that our highest priorities remain quality, safety, and performance for your investment with the Fund. Thank you for your continued confidence and support. Sincerely, EM:ml Edward J. Merkle Managing Director HSBC Asset Management Americas, Inc Portfolio Managers of the Blanchard 100% Treasury Money Market Fund The Fund is not guaranteed by the U.S. government. Yield is historic and will fluctuate, and there is no absolute guarantee that the Fund will be able to maintain a constant $1.00 share price. Distributed by Sheffield Investments, Inc. (1551) 02ARSL0695 BLANCHARD 100% TREASURY MONEY MARKET FUND PORTFOLIO OF INVESTMENTS April 30, 1995
Principal Value --------- ----- U.S. Government Obligations (97.1%) U.S. Treasury Bill 5.548% 5/04/95................ $48,000,000 $ 47,977,820 U.S. Treasury Bill 5.724% 5/11/95................ 2,210,000 2,206,492 U.S. Treasury Bill 5.923% 5/25/95................ 1,600,000 1,593,706 U.S. Treasury Bill 5.680% 6/01/95................ 87,170,000 86,745,708 U.S. Treasury Bill 5.773% 6/22/95................ 3,300,000 3,272,705 U.S. Treasury Bill 5.343% 8/24/95................ 18,950,000 18,632,462 ------------ Total Investments (Amortized Cost $160,428,893)(a)(97.1%)........ 160,428,893 CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES (2.9%)................... 4,725,666 ------------ NET ASSETS (100%)................................ $165,154,559 ============ (a) The amortized cost for book purposes and cost for federal income tax purposes are the same.
See notes to financial statements. 2 BLANCHARD 100% TREASURY MONEY MARKET FUND STATEMENT OF ASSETS AND LIABILITIES April 30, 1995 Assets: Investments in securities, at value (Amortized Cost $160,428,893) (note 1)...................... $160,428,893 Cash.......................................................... 223,138 Receivables for: Investments sold............................................ 3,375,000 Shares of beneficial interest sold.......................... 1,719,677 Interest.................................................... 65,390 ------------ Total assets.............................................. 165,812,098 ------------ Liabilities: Payables for: Shares of beneficial interest repurchased................... 366,426 Dividends to shareholders................................... 33,415 Accrued expenses and other liabilities........................ 257,698 ------------ Total liabilities......................................... 657,539 ------------ Net assets (unlimited authorized shares of beneficial interest, $.01 par value, 165,260,846 shares outstanding)............... $165,154,559 ============ Net asset value per share....................................... $1.00 =====
See notes to financial statements. 3 BLANCHARD 100% TREASURY MONEY MARKET FUND STATEMENT OF OPERATIONS For the Year Ended April 30, 1995 Investment income: Interest......................................................... $9,612,788 Expenses Investment management fee (note 2)................... $1,005,077 Transfer agent fees.................................. 497,100 Trustees' fees, retirement plan curtailment and other expenses (note 4)............................ 237,009 Accounting fees...................................... 160,800 Professional fees.................................... 90,383 Shareholder reports and notices...................... 60,499 Registration fees.................................... 47,500 Custodian fees....................................... 35,499 Other................................................ 6,067 ---------- Total expenses................................... 2,139,934 Less: Fund expenses voluntarily waived by Manager (note 2)............................ (166,695) ---------- Net expenses..................................................... 1,973,239 ---------- Investment income--net increase in net assets resulting from operations...................................... $7,639,549 ==========
See notes to financial statements. 4 BLANCHARD 100% TREASURY MONEY MARKET FUND STATEMENT OF CHANGES IN NET ASSETS
For the Year For the Year Ended Ended April 30, 1995 April 30, 1994 -------------- -------------- Increase (decrease) in net assets: Operations: Investment income-net increase resulting from operations................................. $ 7,639,549 $ 4,716,947 Dividends to shareholders from: Investment income-net........................ (7,639,549) (4,716,947) ------------ ------------ --- --- Transactions in shares of beneficial interest-net increase (decrease) (note 5).... (65,636,404) 65,816,563 ------------ ------------ Net increase (decrease) in net assets...... (65,636,404) 65,816,563 Net assets: Beginning of year............................ 230,790,963 164,974,400 ------------ ------------ End of year.................................. $165,154,559 $230,790,963 ============ ============
See notes to financial statements. 5 BLANCHARD 100% TREASURY MONEY MARKET FUND NOTES TO FINANCIAL STATEMENTS April 30, 1995 NOTE 1-Organization and Accounting Policies: Blanchard 100% Treasury Money Market Fund (the "Fund") is registered under the Investment Company Act of 1940, as amended (the "Act"), as a diversified open-end management investment company. It is a series of Blanchard Funds which was organized as a Massachusetts business trust on January 24, 1986. The Fund commenced operations on February 24, 1989. A. Valuation of Investments-Portfolio securities are valued at amortized cost, which approximates market value. B. Accounting for Investments-Security transactions are accounted for on the trade date (date the order to buy or sell is executed). In computing net investment income, the Fund amortizes any premiums or accretes any discounts on securities owned. Realized gains and losses on security transactions are determined on the identified cost method. C. Federal Income Tax Status-It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to its shareholders. Accordingly, no federal income tax provision is required. D. Dividends and Distributions to Shareholders-The Fund records dividends and distributions to its shareholders on the record date. The amount of dividends and distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations which may differ from generally accepted accounting principles. These "book/tax" differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment; temporary differences do not require reclassification. Dividends and distributions which exceed net investment income and net realized capital gains for financial reporting purposes but not for tax purposes are reported as dividends in excess of net investment income or distributions in excess of net realized capital gains. To the extent they exceed net investment income and net realized capital gains for tax purposes, they are reported as distributions of paid-in-capital. E. Other-Certain expenses for the Blanchard Funds are allocated among the Funds based upon their relative average net assets. NOTE 2-Investment Management Agreement: Pursuant to a management agreement (the "Agreement"), Sheffield Management Company, the Manager manages the Fund and the investment of the Fund's assets subject at all times to the supervision of the Fund's Trustees. In addition to providing overall business management and administrative services, the Manager selects, monitors and evaluates the portfolio adviser, HSBC Asset Management Americas, Inc. (formerly named Marinvest, Inc.), (the "Portfolio Adviser"). The Manager receives from the Fund an advisory fee payable monthly at an annual rate of .5% of the first $500 million of the Fund's average daily net assets, .475% of the Fund's average daily net assets in excess of $500 million but not exceeding $1 billion, plus .45% of the Fund's average daily net assets in excess of $1 billion. The Manager pays all fees of the Portfolio Adviser for its services. The Manager advised the Fund that it paid $200,998 to the Portfolio Adviser during the year ended April 30, 1995. 6 BLANCHARD 100% TREASURY MONEY MARKET FUND NOTES TO FINANCIAL STATEMENTS (continued) April 30, 1995 The Manager voluntarily waived a portion of its advisory fee, which amounted to $166,695, for the year ended April 30, 1995. Pursuant to the Agreement, the Manager provides continuous supervision of the investment portfolio, furnishes office space and facilities, maintains certain of the Fund's books and records, and pays the salaries and expenses of all personnel, including officers of the Fund, who are employees of the Manager and its affiliates. The Manager has advised the Fund that for the year ended April 30, 1995 it incurred costs, which were reimbursed by the Fund, amounting to $220,924 for performing internal accounting and transfer agency functions for the Fund. Expenses of the Fund, exclusive of taxes, interest, brokerage commissions, and extraordinary expenses, are subject to the expense limitations imposed by one of the states in which shares of the Fund are offered for sale. For the year ended April 30, 1995 the Fund's expenses did not exceed such limitation. Certain officers and/or Trustees of the Fund are officers and/or directors of the Manager. NOTE 3-Acquisition Agreement: Sheffield Management Company ("the Manager") and Sheffield Investments, Inc. (the "Distributor"), have entered into an acquisition agreement (the "Acquisition Agreement") with Signet Banking Corporation and two of its subsidiaries ("Signet"), dated February 15, 1995, pursuant to which Sheffield will sell to Signet the assets relating to, and the ability to succeed to contracts with, the Blanchard Funds, including Blanchard 100% Treasury Money Market Fund (collectively, the "Funds"). The transactions contemplated by the Acquisition Agreement which have been approved by the Board of Trustees of the Funds are conditioned upon the approval of the shareholders of each Fund, of (1) a new investment management agreement with Signet, (2) a new distribution agreement with Federated Securities Corp., and (3) certain other conditions. No material changes are contemplated in the operation of the Funds and no management or distribution and administration fee increases are being proposed. NOTE 4-Transaction with Affiliates: The Funds have adopted an unfunded noncontributory pension plan (the "Plan") covering all independent directors/trustees of the Funds who will have served as an independent director/trustee for at least five years at the time of retirement. Benefits under this plan are based on an annual amount equal to 75% of the director/trustee fee at the time of retirement, plus 5% for each year of service in excess of five years of service but not in excess of ten years of service. Net periodic pension expense included in Trustee fees, retirement plan curtailment and other expenses in the Statement of Operations for the year ended April 30, 1995 was $52,296. As indicated in Note 3, the Manager has entered into an agreement which provides for the acquisition of the Manager by Signet. Following the acquisition, the independent directors/trustees for the Funds will not stand for re-election. As a result, the Plan was curtailed and additional pension expense of $154,090 was recorded to reflect previously unrecognized prior service costs of the independent director/trustees. Included in accrued expenses and other liabilities at April 30, 1995 is $206,386 of accrued pension expense. 7 BLANCHARD 100% TREASURY MONEY MARKET FUND NOTES TO FINANCIAL STATEMENTS (continued) April 30, 1995 NOTE 5-Shares of Beneficial Interest: Transactions in shares of beneficial interest, all at $1 per share, were as follows:
For the Year For the Year Ended Ended April 30, 1995 April 30, 1994 -------------- -------------- Sold........................................ 212,621,088 340,832,974 Reinvestment of dividends................... 7,175,266 4,285,831 ----------- ----------- 219,796,354 345,118,805 Repurchased................................ (285,432,758) (279,302,242) ----------- ----------- Net increase (decrease).................... (65,636,404) 65,816,563 =========== ===========
NOTE 6-Financial Highlights: Selected ratios and per share data for a share of beneficial interest outstanding:
For the Year Ended April 30, ----------------------------------------- 1995 1994 1993 1992 1991 ---- ---- ---- ---- ---- Per Share Operating Performance: Net asset value, beginning of year................ $1.00 $1.00 $1.00 $1.00 $1.00 ----- ----- ----- ----- ----- Income from investment operations: Net investment income........................... .04 .03 .03 .04 .07 Net gains or losses on securities (both realized and unrealized)................ .00 .00 .00 .00 .00 ----- ----- ----- ----- ----- Net income from investment operations......... .04 .03 .03 .04 .07 ----- ----- ----- ----- ----- Less Dividends to Shareholders: Dividends from investment income-net............ (.04) (.03) (.03) (.04) (.07) ----- ----- ----- ----- ----- Change in net asset value..................... .00 .00 .00 .00 .00 ----- ----- ----- ----- ----- Net asset value, end of year...................... $1.00 $1.00 $1.00 $1.00 $1.00 ===== ===== ===== ===== ===== Total return...................................... 4.02% 2.76% 3.42% 4.60% 6.80% Ratios/Supplemental Data: Net assets, end of year ($ Million)............. $165 $231 $165 $58 $38 Ratios of expenses to average net assets*(1).... .99% .41% .08% .86% 1.11% Ratios of net investment income to average net assets*(1)..................... 3.83% 2.80% 3.27% 4.52% 6.62% * The ratios of expenses to average net assets and net investment income to average net assets would have been 1.07% and 3.75%, respectively, for the year ended April 30, 1995, .93% and 2.29%, respectively, for the year ended April 30, 1994, .92% and 2.43%, respectively, for the year ended April 30, 1993, 1.46% and 3.92%, respectively, for the year ended April 30, 1992, 1.23% and 6.50%, respectively, and for the year ended April 30, 1991, if a portion of the Fund's expenses had not been voluntarily waived by the Manager. (1)Net of expenses waived and absorbed by Manager.
8 BLANCHARD 100% TREASURY MONEY MARKET FUND REPORT OF INDEPENDENT ACCOUNTANTS To the Trustees and Shareholders of Blanchard 100% Treasury Money Market Fund In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Blanchard 100% Treasury Money Market Fund (the "Fund") at April 30, 1995, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these finanical statements based on our audits. We conducted our audits of these finanical statements in accordance with generally acepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, asssessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at April 30, 1995 by correspondence with the custodian, provide a reasonable basis for the opinion expressed above. PRICE WATERHOUSE LLP 1177 Avenue of the Americas New York, New York 10036 June 20, 1995 9 (Left Column) Portfolio Advisers Calveti Capital Management, Ltd. Custodian and Transfer Agent United States Trust Company of New York Independent Accountants Price Waterhouse LLP Legal Counsel Kramer, Levin, Naftalis, Nessen, Kamin & Frankel Blanchard Precious Metals Fund, Inc. 41 Madison Ave., 24th Floor New York, NY 10010-2267 (Right Column) Blanchard Precious Metals Fund, Inc. Annual Report April 30, 1995 Managed by: Sheffield Management Company 41 Madison Ave., 24th Floor New York, NY 10010-2267 1-800-922-7771 -----END PRIVACY-ENHANCED MESSAGE-----