-----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, jCn3U/AtHcHExPL4UFhrrELMI5O++L3QdSBm/SWXoxsZrDbtAHNdBAnk+vd7IDHp fCdD71km1F2wbDMrU/A84A== 0000935069-95-000032.txt : 19950907 0000935069-95-000032.hdr.sgml : 19950907 ACCESSION NUMBER: 0000935069-95-000032 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950829 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARINER MUTUAL FUNDS TRUST CENTRAL INDEX KEY: 0000861106 STANDARD INDUSTRIAL CLASSIFICATION: 0000 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-06057 FILM NUMBER: 95568186 BUSINESS ADDRESS: STREET 1: 600 17TH STREET STREET 2: SUITE 1695 SOUTH CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3036232577 MAIL ADDRESS: STREET 1: 600 17TH STREET STREET 2: SUITE 1605 SOUTH CITY: DENVER STATE: CO ZIP: 80202 N-30D 1 SEMI-ANNUAL REPORT FOR MARINER MUTUAL FUNDS TRUST MARINER MUTUAL FUNDS TRUST - - ------------------------------------------------------------------------------- NEW YORK TAX-FREE BOND FUND HSBC Asset Management [Logo] - - ------------------------------------------------------------------------------- SEMI-ANNUAL REPORT (UNAUDITED) June 30, 1995 Managed by: HSBC ASSET MANAGEMENT AMERICAS INC. Sponsored and distributed by: MARINER FUNDS SERVICES MARINER MUTUAL FUNDS TRUST - - ------------------------------------------------------------------------------- NEW YORK TAX-FREE BOND FUND - - ------------------------------------------------------------------------------- HSBC Asset Management [Logo] - - ------------------------------------------------------------------------------- July 21, 1995 Dear Shareholder: For the six months ended June 30, 1995, the New York Tax-Free Bond Fund paid a total of $0.28 per share tax-exempt dividend, and generated a total return of 7.47%, assuming reinvestment of dividends. The Fund's net asset value on June 30, 1995, was $10.68 per share. After a major rally during the first quarter of 1995, the municipal market suffered a setback. This was due to several factors. Demand for municipal bonds dropped when individual buyers experienced rate shock as rates dropped through 6% by the end of the first quarter. With the stock market hitting new highs, and with the memory of last year's abysmal municipal market performance, many municipal investors reportedly switched their investments to the stock market. In addition, Orange County's bankruptcy and imminent default loomed over the market. Lastly, tax reform proposals in Congress were a further depressant on the market. The yield curve steepened considerably in June, after flattening at the beginning of the year. Short rates held reasonably steady as expectations of Fed easing predominated. Long rates, however, rose due to the increasing uncertainties confronting the municipal market which argued for shorter, more defensive paper. In addition, many fund managers were sellers of longer maturities as municipal bond mutual funds experienced withdrawals over the month of June. Consequently, the two to thirty year yield spread steepened by 50 basis points to 190 basis points by quarter's end. For the quarter as a whole, high coupon, defensive prerefunded bonds with 7-8 year maturities outperformed other sectors. However, for the entire first half of 1995, longer durations outperformed due to the strength of the rally during the first quarter as the economy slowed and rates dropped. For the six month period, the Lehman Municipal Index, reflecting the national market, returned 9.65%, as compared to the Lehman New York Index of 9.29%. Surprisingly during the second quarter the New York market outperformed the national municipal market even though credit concerns abounded. These credit concerns were possibly offset by lack of supply. After a two month delay beyond the deadline, the State finally passed a budget which incorporated a number of nonrecurring items needed to balance the budget. New York City passed its budget on time, but also resorted to some one-shot gimmicks to balance the budget. Through quarter-end, the City remained on credit watch with negative implications. Subsequently, on July 10, 1995 Standard & Poor's downgraded New York City's long term credit rating to "BBB+". There was no change in the market price of New York City bonds after the announcement because the downgrade had already been discounted by the market. MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE - - ------------------------------------------------------------------------------- The Fund's total return for the quarter was 2.34% which underperformed the Lehman New York Index of 2.59% by 24 basis points. However, as compared to the peer group average return of 1.93%, represented by the Lipper New York Mutual Fund universe, the Fund outperformed by 42 basis points, placing it in the 29th percentile. Although the market was quite volatile during the second quarter, the timing of our trades was excellent, allowing us to improve the performance of the Fund. The security selection for the Fund also contributed to the outperformance. However, the Fund's performance during the first quarter trailed the Index and pulled down the six months' performance. This was due to our defensive stance on the market. We did not anticipate the abrupt slowing of the economy which fueled the first quarter rally. Our average maturity and duration were too short to benefit fully from the rally. Overall for the first six months of 1995, the Fund's total return was 7.47%, compared to the Lipper average return of 9.00% and the Lehman New York Index return of 9.29%. OUTLOOK - - ------------------------------------------------------------------------------- The outlook for the municipal market is positive for the near term. Municipal yields were historically cheap to Treasuries. Long insured New York bond yields reached 93% of Treasury yields. Technical factors for July are very favorable. New issue supply in July is estimated at $9 billion, which is below average. In addition, a large portion of the approximately $40 billion in cash flow from coupon payments, maturities, and call schedules is expected to be reinvested in the municipal market. Tax reform, which had depressed prices in June, appears to be on the back burner until the balanced budget legislation is passed. This vote is projected to take place late in the fall. If and when tax reform takes center stage, we will become more defensive and shorten up our average maturity and duration. Even though the tax reform proposals are unlikely to be enacted, it will create an uncertain environment which may affect the market adversely over the medium term. Currently, fundamental factors are also positive for the municipal market. The economy appears sluggish, inflation is moderate, and the dollar is stable. Therefore, we are comfortable remaining a year long the Index for the near future. We will continue to search for value in sectors and specific securities, analyzing historical spread relationships and changing credit factors. Sincerely, [GRAPHIC OMITTED] /s/W. Robert Alexander W. Robert Alexander PRESIDENT 2 COMPARISON OF CHANGES IN VALUE OF $10,000 INVESTMENT IN NEW YORK TAX-FREE BOND FUND VS. LEHMAN MUNICIPAL BOND INDEX Average Annual Total Return - - ------------------------------------------------------ 1 Year 5 Years Inception - - ------------------------------------------------------ Offering Price(1) (0.11)% 6.84% 6.91% NAV(2) 4.91% 7.88 7.75% [Graphic omitted] FUND(1) LEHMAN MUNI FUND(2) MAR 1989 10000 10000 10000 DEC 1989 10203 11005 10713 DEC 1990 10829 11807 11370 DEC 1991 12192 13242 12802 DEC 1992 13492 14409 14167 DEC 1993 15417 16178 16188 DEC 1994 14161 15340 14869 JUNE 1995 15219 16822 15980 Past performance is not predictive of future performance (1) Includes the maximum sales charge (2) Excludes the maximum sales charge The above illustration compares a $10,000 investment in the New York Tax-Free Bond Fund on March 21, 1989, to a $10,000 investment in the Lehman Municipal Bond Index on that date. All dividends and capital gain distributions are reinvested. The performance takes into account all applicable fees and expenses. The Lehman Municipal Bond Index is a widely accepted unmanaged index of overall municipal bond market performance and does not take into account charges, fees and other expenses. 3 BOARD OF TRUSTEES JOHN P. PFANN* CHAIRMAN OF THE BOARD; Chairman and President, JPP Equities, Inc. WOLFE J. FRANKL* Former Director, North America, Berlin Economic Development Corporation WILLIAM L. KUFTA Chief Investment Officer, Beacon Trust Company ROBERT A. ROBINSON* Trustee, Henrietta and B. Frederick H. Bugher Foundation *Member of the Audit and Nominating Committees - - ------------------------------------------------------------------------------- OFFICERS W. ROBERT ALEXANDER PRESIDENT STEVEN R. HOWARD SECRETARY MARK A. POUGNET VICE PRESIDENT AND TREASURER 4
STATEMENT OF NET ASSETS AS OF JUNE 30, 1995 (UNAUDITED) NEW YORK TAX-FREE BOND FUND CREDIT RATING* PRINCIPAL MDY/S&P AMOUNT VALUE - - ------------ ------------ ---------- INVESTMENTS IN NEW YORK MUNICIPAL SECURITIES-85.1% (Aaa/AAA) Battery Park City Authority New York Revenue, 6.50%, 05/01/99 ........................................... $2,000,000 $2,146,801 (Aaa/AAA) Bethlehem, New York CSD GO (AMBAC Insurance), 7.10%, 11/01/07 ........................................... 200,000 230,312 (Aaa/AAA) Islip GO (AMBAC Insured) 7.10%, 06/15/98 ..................... 150,000 160,666 (Baa1/BBB) Metropolitan Transportation Authority of New York Commuter Facilities--Series P, (MBIA Insurance) 5.75%, 07/01/15 ........................................... 2,000,000 1,869,403 (A1/AA-) Monroe County, New York GO 7.00%, 06/01/04 ................... 50,000 54,620 (Aa3-/AA) New York City GO (Dai-Ichi Kangyo LOC) 4.45%, 07/03/95*** .... 500,000 500,000 (Aaa/AAA) New York City GO (FGIC Insurance) 4.50%, 07/03/95*** ......... 1,300,000 1,300,000 (Baa1/A-) New York City GO Series A 7.75%, 08/15/04 ........................................... 600,000 660,657 7.75%, 08/15/07 ........................................... 3,500,000 3,831,235 (Baa1/A-) New York City GO Series B 7.50%, 02/01/07 .................... 1,000,000 1,080,499 (Baa1/A-) New York City GO Series D 7.65%, 02/01/06 .................... 630,000 689,346 (Baa1/A-) New York City GO Series F 8.40%, 11/15/05 .................... 300,000 343,997 (Aaa/AAA) New York City Trust For Cultural Research (AMBAC Insurance) 6.40%, 01/01/04 ........................................... 350,000 378,743 (A/A-) New York City Water Authority 6.00%, 06/15/09 ................ 2,000,000 2,047,474 (A/A) New York City IDA Special Facility 6.125%, 01/01/24 .......... 2,500,000 2,437,500 (A/A ) New York State Assistance Corp--Series C 5.50%, 04/01/18 ..... 2,000,000 1,860,153 (Baa1/BBB+) New York State Dormitory Authority--City University, 5.75%, 07/01/18 ........................................... 2,370,000 2,220,924 (AAA) New York State Dormitory Authority Revenue--Culinary Institute of America (Connie Lee Insurance), 6.00%, 07/01/22 ........ 1,000,000 996,027 (Baa1/BBB+) New York State Dormitory Authority--State University EDL Series B 5.25%, 05/15/10................................... 2,440,000 2,245,573 (Baa1/BBB+) New York State Dormitory Authority--State University EDL Series D 7.125%, 05/15/17 ................................. 2,000,000 2,225,552 (Aaa/AAA) New York State Energy Research & Development Facilities (MBIA LOC), 5.60%, 06/01/25 ............................... 2,500,000 2,312,771 (Aa/A) New York State Environmental Facilities Corp., Water Pollution Control Revolving Fund, 7.00%, 06/15/12 ................... 300,000 323,594 (Aa/AA-1) New York State Environmental Facilities Corp., Water Pollution Control Revolving Fund Series B, 7.50%, 03/15/11 .......... 250,000 272,298 (Aa/A+) New York State Environmental Facilities Corp., Water Pollution Control Revolving Fund Series 1990 C, 7.20%, 03/15/11 .... 200,000 216,491 (Aa/AA) New York State HFA Multi-Family Series A (HFA Insurance), 7.00%, 08/15/22 ........................................... 900,000 941,858
5
STATEMENT OF NET ASSETS AS OF JUNE 30, 1995 (CONTINUED) NEW YORK TAX-FREE BOND FUND CREDIT RATING* PRINCIPAL MDY/S&P AMOUNT VALUE - - ------------ ------------ ---------- INVESTMENTS IN NEW YORK MUNICIPAL SECURITIES-(continued) (Aaa/AAA) New York State Medical Care Facility Series A (FGIC Insurance) 5.50%, 08/15/21 ........................................... $ 2,000,000 $ 1,858,799 (Aaa/AAA) New York State Medical Care Mental Health (CAPGTY and FGIC Insurance) 7.70%, 02/15/18 ................................ 115,000 123,646 (Aaa/AAA) New York State Medical Care Facility--Series A 8.00%, 08/15/97 2,000,000 2,196,360 (Aaa/AAA) New York State Thruway Authority-Emergency Highway (FSA Insurance), 6.00%, 03/01/02 .......................... 800,000 849,016 (Baa1/BBB) New York State Urban Development Corp., 7.50%, 04/01/20 ...... 2,500,000 2,671,290 (A/A-) New York State GO 5.70%, 03/15/13 ............................ 2,000,000 1,958,351 (Aaa/AAA) Oyster Bay, New York Public Improvement GO (FGIC Insurance) 6.60%, 02/15/98 ........................................... 200,000 211,032 (A1/AA-) Port Authority of New York / New Jersey (FGIC Insurance) 5.75%, 06/15/30 ........................................... 2,700,000 2,526,422 NR Syracuse, New York GO 6.70%, 02/15/01 ....................... 300,000 335,536 ------------ TOTAL NEW YORK MUNICIPAL SECURITIES (Cost-$42,932,776) .............. 44,076,946 ------------ INVESTMENTS IN OTHER MUNICIPAL SECURITIES-11.0% (Baa1/A) Puerto Rico Commonwealth Highway and Transportation 5.25%, 07/01/20 ........................................... 2,000,000 1,764,658 (Baa/A-) Puerto Rico Electric Power Agency Series S 6.125%, 07/01/09 .. 2,000,000 2,060,782 (Aaa/AAA) Puerto Rico Public Building Authority (AMBAC LOC) 5.50%, 07/01/21 ........................................... 2,000,000 1,881,666 ------------ TOTAL OTHER MUNICIPAL SECURITIES (Cost-$5,650,091) ................. 5,707,106 ------------ TOTAL MUNICIPAL SECURITIES (Cost-$48,582,867) ................................................... 49,784,052 ------------ SHORT-TERM INVESTMENTS-8.5% Goldman New York Tax-Exempt Money Market Fund, 3.73%, On Demand .............................................. 2,075,000 2,075,000 Provident New York Money Market Fund 3.79%, On Demand ..... 2,319,000 2,319,000 ------------ TOTAL SHORT-TERM INVESTMENTS (Cost-$4,394,000) ..................... 4,394,000 ------------ TOTAL INVESTMENTS-104.6% (Cost-$52,976,867)** ................................................ 54,178,052 ------------
6 STATEMENT OF NET ASSETS AS OF JUNE 30, 1995 (CONTINUED)
NEW YORK TAX-FREE BOND FUND Value ------------ OTHER ASSETS (LIABILITIES)-(4.6%) Receivable for securities sold ........................................................... $ 2,242,083 Interest and dividends receivable ........................................................ 831,038 Receivable for fund shares sold .......................................................... 109 Other assets ............................................................................. 4,175 Liabilities for securities purchased ..................................................... (4,337,607) Overdraft payable ........................................................................ (1,002,192) Due to affiliates ........................................................................ (17,500) Accrued expenses ......................................................................... (46,919) Dividends payable ........................................................................ (81,730) ------------ Liabilities in excess of other assets-net ............................................. (2,408,543) ------------ NET ASSETS-100% .......................................................................... $ 51,769,509 ============ NET ASSET VALUE PER SHARE-applicable to 4,848,862 shares ($0.001 par value) outstanding ........................................................ $10.68 ====== ABBREVIATIONS USED IN THIS STATEMENT: AMBAC ....................................American Municipal Bond Assurance Corp. CAPGTY ...................................Capital Guaranty CSD ......................................Central School District EDL ......................................Educational Facilities FGIC .....................................Financial Guaranty Insurance Corporation FSA ......................................Financial Security Association GO .......................................General Obligations HFA ......................................Housing Finance Agency IDA ......................................Industrial Development Authority LOC ......................................Letter of Credit MBIA .....................................Municipal Bond Insurance Association NR Not Rated--In the opinion of the Investment Adviser, the instrument judged to be of comparable investment quality to rated securities which may be purchased by the Funds. Institutions shown in parentheses have entered into credit support agreements with the issuer. * Credit Ratings were obtained from Standards & Poor's Corporation ("S&P") and Moody's Investors Services, Inc. ("MDY"). ** Also cost for Federal income tax purposes. As of June 30, 1995, net unrealized appreciation for Federal income tax purposes aggregated $1,201,185 of which $1,450,531 related to appreciated securities and $249,346 related to depreciated securities. *** Variable Rate Demand Note: Stated interest rate as of 06/30/95; maturity date reflects next rate change.
See Notes to Financial Statements. 7
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1995 (UNAUDITED) NEW YORK TAX-FREE BOND FUND INVESTMENT INCOME: Income: Interest ....................................... $ 1,587,231 Dividends ...................................... 27,384 ----------- 1,614,615 ----------- Expenses: Advisory fees .................................. 116,236 Distribution expenses .......................... 66,808 Transfer agent fees ............................ 33,918 Administrative services fee .................... 25,830 Co-administrative and shareholder servicing fees 18,081 Audit fee ...................................... 12,014 Printing ....................................... 9,215 Legal fees ..................................... 7,254 Trustees' fees and expenses .................... 4,325 Custodian fee .................................. 4,170 Miscellaneous expenses ......................... 9,897 ----------- Total expenses ............................. 307,748 Less expense waivers/reimbursements ............ (57,182) ----------- Net expenses ............................... 250,566 ----------- Net investment income .......................... 1,364,049 ----------- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain on investments ................... 856,026 Net change in unrealized appreciation on investments 1,495,622 ----------- Net gain on investments ............................ 2,351,648 ----------- Net increase in net assets resulting from operations $ 3,715,697 ===========
See Notes to Financial Statements 8
Statement of Changes in Net Assets (Unaudited) NEW YORK TAX-FREE BOND FUND For the Six Months ended For the June 30, 1995 Year ended (Unaudited) December 31, 1994 -------------- ----------------- OPERATIONS: Net investment income ........................................... $ 1,364,049 $ 2,871,468 Net realized gain (loss) on investments ......................... 856,026 (3,921,804) Change in unrealized appreciation (depreciation) on investments . 1,495,622 (4,072,001) ------------ ------------ Net increase (decrease) in net assets resulting from operations 3,715,697 (5,122,337) ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income ........................................... (1,364,049) (2,871,468) Net realized gain on investments ................................ -- (146,190) ------------ ------------ Total distributions ........................................... (1,364,049) (3,017,658) ------------ ------------ CAPITAL SHARE TRANSACTIONS: Proceeds from sales of 211,142 and 893,014 shares, respectively . 2,232,550 9,854,233 Net asset value of 77,995 and 269,021 shares issued in reinvestment of distributions, respectively ..................... 825,598 2,976,621 Payments for redemptions of 409,561 and 1,469,467 shares, respectively ............................................ (4,351,650) (15,719,063) ------------ ------------ Net decrease in net assets from capital share transactions .... (1,293,502) (2,888,209) ------------ ------------ Total increase (decrease) in net assets ........................... 1,058,146 (11,028,204) ------------ ------------ NET ASSETS: Beginning of period ............................................. 50,711,363 61,739,567 ------------ ------------ End of period ................................................... $ 51,769,509 $ 50,711,363 ============ ============
See Notes to Financial Statements. 9 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. SIGNIFICANT ACCOUNTING POLICIES Mariner New York Tax-Free Bond Fund (the "Fund") is an investment portfolio of Mariner Mutual Funds Trust (the "Trust"). The Trust is a Massachusetts business trust and is an open-end, diversified investment company with multiple investment portfolios, including the Fund. The Fund follows an investment policy of investing primarily in New York municipal obligations. Economic changes affecting the state and certain of its public bodies and municipalities may affect the ability of issuers within the state to pay interest on, or repay principal of, municipal obligations held by the Fund. SECURITIES VALUATION: Portfolio securities for which market quotations are readily available are valued at the quoted bid price. Securities for which market quotations are not readily available are valued at fair value as determined in good faith by or under the supervision of the Trust's officers in accordance with guidelines which have been adopted by the Board of Trustees. Such procedures include the use of independent pricing services which use prices based on yields or prices of securities of comparable quality, coupon, maturity and type, indicators as to value from dealers and general market conditions. Short-term obligations having a maturity of 60 days or less are valued at amortized cost which approximates market value. TAXES: It is the Fund's policy to comply with the provisions of the Internal Revenue Code, as amended, applicable to regulated investment companies, and to distribute substantially all of its taxable income and net realized capital gains to its shareholders for each taxable year. Therefore, no provision is required for Federal income tax. The Fund has available a $3,921,804 capital loss carryforward which, if not utilized, will expire in the year 2002. DIVIDENDS AND DISTRIBUTIONS: The Fund intends to declare as a dividend substantially all of its net investment income at the end of each business day and to pay within five business days after the end of each month. For purposes of distributions, net investment income consists of interest, discount and dividends earned on investment securities, less amortization of any market premium and accrued expenses. Net capital gains, if any, will be distributed annually. SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Security transactions are recorded on the trade date. Identified cost of investments sold is used for both financial statement and Federal income tax purposes. Interest income is recorded as earned. EXPENSE ALLOCATION: Expenses directly attributed to each Fund in the Trust are charged to that Fund's operations; expenses which are applicable to all Funds are allocated among them. 2. CAPITAL The Trust is authorized to issue an unlimited number of shares of beneficial interest each with a par value $0.001 per share. At June 30, 1995, the composition of net assets of the Fund was as follows: Paid-in capital ............................ $ 53,634,170 Accumulated net realized loss on investments (3,065,846) Net unrealized appreciation on investments . 1,201,185 ------------ Total net assets ......................... $ 51,769,509 ============ 10 NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. PORTFOLIO SECURITIES The cost of securities purchased and proceeds from securities sold (excluding short-term securities) for the six months ended June 30, 1995 were approximately $56,040,000 and $12,165,000, respectively. 4. AGREEMENTS The Trust retains HSBC Asset Management Americas Inc.("HSBC Americas") to act as Investment Adviser for the Fund. HSBC Americas is the North American investment affiliate of HSBC Holdings plc (Hong Kong and Shanghai Banking Corporation). As Investment Adviser, HSBC Americas furnishes investment guidance and policy direction in connection with the management of the portfolio of the Fund, subject to policy established by the Board of Trustees. As compensation for its services, HSBC Americas is paid monthly advisory fees at the following annual rates: Advisory Portion of the Fund's average daily net assets Fee Rate ------------------------------------------------------- -------- Not exceeding $300 million ............................. 0.450% In excess of $300 million but not exceeding $600 million 0.420% In excess of $600 million but not exceeding $1 billion . 0.385% In excess of $1 billion but not exceeding $1.5 billion . 0.350% In excess of $1.5 billion but not exceeding $2 billion . 0.315% In excess of $2 billion ................................ 0.280% For the six months ended June 30, 1995, HSBC Americas earned approximately $64,500 in advisory fees, net of fee waivers of approximately $51,700. As Administrator, PFPC Inc. ("PFPC") is paid a monthly asset based fee of 0.10% of the Fund's first $200 million of average net assets; 0.075% of the Fund's next $200 million of average net assets; 0.05% of the Fund's next $200 million of average net assets; and 0.03% of the Fund's average net assets in excess of $600 million; exclusive of out-of-pocket expenses. PFPC has agreed to waive 10% and 5% of its fee during the first and second year of its administration, respectively. For the six months ended June 30, 1995, PFPC earned approximately $23,300, net of fee waivers of approximately $2,500, in administrative services fees. HSBC Americas may enter into agreements (the "Service Agreements") with certain banks, financial institutions and corporations ("Service Organizations") whereby each Service Organization handles recordkeeping and provides certain administrative services for its customers who invest in the Fund through accounts maintained at that Service Organization. Each Service Organization will receive monthly payments, which are based upon expenses that the Service Organization has incurred in the performance of its services under the Service Agreement. The payments from the Fund on an annual basis will not exceed 0.25% of the average value of the Fund's shares held in the subaccounts of the Service Organizations. Marine Midland Bank, N.A. ("Marine Midland"), an affiliate of the Adviser, serves as custodian for the Fund. For furnishing custodian services, Marine Midland is paid a monthly fee with respect to the Fund for safekeeping its assets plus certain transaction charges and out-of-pocket expenses. For the six months ended June 30, 1995, Marine Midland earned approximately $4,200 in custodian fees. 11 NOTES TO FINANCIAL STATEMENTS (CONTINUED) HSBC Americas earned co-administration and shareholder servicing fees of 0.03% and 0.04% of the Fund's average net assets, respectively, totaling approximately $18,100. Of that total, HSBC Americas waived approximately $3,000 of these fees for the month of January 1995. The Fund has adopted a Distribution Plan and Agreement (the "Plan") pursuant to Rule 12b-1 of the Investment Company Act of 1940, as amended. The Plan provides for a monthly payment by the Fund to Mariner Funds Services for expenses incurred in connection with distribution services provided to the Fund not to exceed an annual rate of 0.35% of the average daily value of the Fund's net assets during the preceding month. A partner of Baker & McKenzie, legal counsel to the Trust, serves as Secretary of the Trust. For the six months ended June 30, 1995, the Fund paid legal fees of approximately $9,300 to Fund counsel. 12
FINANCIAL HIGHLIGHTS Selected Per Share Data and Ratios For a Share Outstanding Throughout Each Period NEW YORK TAX-FREE BOND FUND For the Six Months ended For the Year ended December 31, June 30, 1995 ------------------------------------------------------------------------ (Unaudited) 1994 1993 1992 1991 1990 ---------- ------------ ------------ ------------ ------------ ------------ Net asset value, beginning of period ............ $ 10.20 $ 11.70 $ 11.01 $ 10.66 $ 10.14 $ 10.20 ---------- ---------- ---------- ---------- ---------- ---------- Income From Investment Operations Net investment income ........ 0.28 0.53 0.59 0.66 0.66 0.64 Net realized and unrealized gain (loss) on securities .............. 0.48 (1.47) 0.95 0.44 0.57 (0.04) ---------- ---------- ---------- ---------- ---------- ---------- Total from investment operations ................. 0.76 (0.94) 1.54 1.10 1.23 0.60 ---------- ---------- ---------- ---------- ---------- ---------- Less Distributions from: Net investment income ........ (0.28) (0.53) (0.59) (0.66) (0.66) (0.64) Net realized gain ............ -- (0.03) (0.26) (0.09) (0.05) (0.02) ---------- ---------- ---------- ---------- ---------- ---------- Total distributions .......... (0.28) (0.56) (0.85) (0.75) (0.71) (0.66) ---------- ---------- ---------- ---------- ---------- ---------- Net asset value, end of period .................. $ 10.68 $ 10.20 $ 11.70 $ 11.01 $ 10.66 $ 10.14 ========== ========== ========== ========== ========== ========== Total Return(a) ................... 7.47%(b) (8.13%) 14.27% 10.66% 12.59% 6.13% Ratios/Supplemental Data Net assets (000), end of period .............. $ 51,770 $ 50,711 $ 61,740 $ 32,407 $ 14,929 $ 7,268 Ratio of expenses (net of fee waivers) to average net assets* ..... 0.98%(c) 0.84% 0.63% 0.38% 0.34% 0.50% Ratio of net investment income (net of fee waivers) to average net assets* ................ 5.20%(c) 4.93% 4.98% 6.04% 6.36% 6.38% Portfolio turnover rate ...... 24.35%(b) 122.43% 70.36% 66.44% 110.27% 88.48% - - -------------- (a) Excludes sales charge. (b) Not Annualized. (c) Annualized. * The ratios of net investment income and expenses to average net assets for the six months ended June 30, 1995 reflect a decrease of 0.22% or $0.01 per share (1994-0.26% or $0.03) (1993-0.43% or $0.05) (1992-0.79% or $0.08) (1991-0.98% or $0.10) (1990-1.03% or $0.10) due to fee waivers.
See Notes to Financial Statements. 13 =============================================================================== MARINERSM MUTUAL FUNDS TRUST 370 17th Street, Suite 2700 Denver, Colorado 80202 GENERAL INFORMATION: (800) 753-4462 INVESTMENT ADVISER AND CO-ADMINISTRATOR HSBC Asset Management Americas Inc. 250 Park Avenue New York, New York 10177 SPONSOR AND DISTRIBUTOR MarinerSM Funds Services 370 17th Street, Suite 2700 Denver, Colorado 80202 ADMINISTRATOR, TRANSFER AND DIVIDEND DISBURSING AGENT PFPC, Inc. 400 Bellevue Parkway Wilmington, Delaware 19809 CUSTODIAN Marine Midland Bank, N.A. 140 Broadway New York, New York 10015 Legal Counsel BAKER & MCKENZIE 805 THIRD AVENUE NEW YORK, NEW YORK 10022 INDEPENDENT AUDITORS Ernst & Young LLP 787 Seventh Avenue New York, New York 10019 This report is for the information of the shareholders of Mariner Mutual Funds Trust. Its use in connection with any offering of the Trust's shares is authorized only in the case of a concurrent or prior delivery of the Trust's current prospectus. =============================================================================== -----END PRIVACY-ENHANCED MESSAGE-----