-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WNVhtteGZ3700/l4HqM90vz5I9BAjy/e0nOm3QcB45Wt7M1FWpBbX+eIOb700KfO M+cEinU5WcCz1h9FsiuKJA== 0000935069-96-000036.txt : 19960312 0000935069-96-000036.hdr.sgml : 19960312 ACCESSION NUMBER: 0000935069-96-000036 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960311 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARINER MUTUAL FUNDS TRUST CENTRAL INDEX KEY: 0000861106 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [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: 96533214 BUSINESS ADDRESS: STREET 1: 370 17TH STREET STREET 2: SUITE 2700 CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3036232577 MAIL ADDRESS: STREET 1: 370 17TH STREET STREET 2: SUITE 2700 CITY: DENVER STATE: CO ZIP: 80202 N-30D 1 FILING OF MARINER MUTUAL SMALL CAP FUND MARINER MUTUAL FUNDS TRUST - ------------------------------------------------------------------------------- SMALL CAP FUND - ------------------------------------------------------------------------------- HSBC Asset Management [LOGO] - ------------------------------------------------------------------------------- ANNUAL REPORT December 31, 1995 Managed by: HSBC ASSET MANAGEMENT AMERICAS INC. Sponsored and distributed by: MARINER FUNDS SERVICES COVER MARINER MUTUAL FUNDS TRUST - ------------------------------------------------------------------------------- SMALL CAP FUND - ------------------------------------------------------------------------------- HSBC Asset Management [LOGO] - ------------------------------------------------------------------------------- February 12, 1996 Dear Shareholder: 1995 was a very good year for equity investors with the S&P 500 Index returning 37.4% and the Dow Jones Index 36.7%. In contrast, small-cap stocks underperformed in the first half of the year, surged in the summer, but after Labor Day failed to keep pace with the large-caps. As a result, small-cap performance was like a roller coaster ride for investors, with the Russell 2000 Index ending up only 28.4%. The NASDAQ Index, with its heavier weighting towards the larger technology stocks such as Intel and Microsoft, was the standout leader with a return of 39.9%. With a slowing in the growth of the economy, declining interest rates and good prospects for a capital gains tax cut, you would think small-caps should have outperformed.
- ----------------------------------------------------------------------------------------- EQUITY MARKET RETURNS - ----------------------------------------------------------------------------------------- RUSSELL NASDAQ DOW S&P YEAR 2000 COMPOSITE JONES 500 - ----------------------------------------------------------------------------------------- 1991 46.04% 56.84% 24.51% 30.42% 1992 18.42 15.45 7.42 7.59 1993 18.89 14.75 17.03 10.04 1994 (1.82) (3.20) 4.89 1.21 1995 28.44 39.92 36.65 37.44 5 YEARS 21.00 23.00 17.54 16.55 ANNUALIZED - -----------------------------------------------------------------------------------------
The reasons that are generally mentioned for this underperformance are several. First, the large-caps reported better relative earnings due to the falling dollar earlier this year. Secondly, most of the restructuring by corporate America over the past few years has mostly occurred with large companies. As a result, many larger companies are now reaping the benefits. Lastly, the strong level of initial public offerings (especially in the last quarter) may have diverted money away from existing small-cap issues since they both generally compete for the same pool of money. The best performing sectors of the Russell 2000 Index for the year were technology (+47.0%), other energy (+46.5% -- includes offshore drilling and oil well equipment and services), healthcare (+39.7%) and financial services (+38.8%). With a weighting of 18.3% in the Russell 2000 Index, the great performance of the financial services sector had a very large impact. Technology and health care, with weightings of 13.1% and 10.9% respectively, also had an impact. The worst performing sectors for the year were integrated oils (down 3.5%), real estate (+5.7%), consumer discretionary (+8.7%) and autos & transportation (+9.1%). For most growth investors, the underperformance by the consumer discretionary sector was disappointing, because it is a large sector (16.0% of the Russell 2000 Index) with traditionally the fastest growing industries such as retailers, restaurants and entertainment. Currently, most economists are projecting moderate to slow growth for the U.S. economy in 1996, accompanied by a flat to rising dollar. As we have mentioned in the past, larger companies generally have greater exposure to foreign economies and are more vulnerable to a strong dollar relative to small companies. In addition, small growth companies are not as dependent upon a strong economy to report great earnings as do larger companies. Generally speaking, in the past small growth stocks have done well during periods of sluggish economic activity. As we enter 1996, the question is whether small-caps will continue to underperform large-caps. Even though we are concerned by the underperformance of this sector, we continue to believe the group remains undervalued. We also believe that small-caps should become beneficiaries of better earnings growth in a slow growth environment. Furthermore, continued net inflows into small-cap mutual funds should support additional gains. On balance, we continue to be positive on the long-term outlook for small-cap stocks. MANAGER'S DISCUSSION OF FUND PERFORMANCE: - ----------------------------------------- For the year 1995, the Mariner Small Cap Fund posted a return of 26.20% versus 28.44% for the Russell 2000 Index. For the last three years the Fund has returned 14.78% on an annualized basis versus 14.45% for the Russell 2000. During the year the Fund was positively impacted by the technology and financial service sector. Conversely, the Fund was negatively impacted by the consumer sector. Currently, the Fund continues to reflect attractive characteristics. The Fund has a higher projected growth in earnings and a lower debt-to-capital ratio than the general market. However, for these attractive characteristics the Fund is valued (in terms of price earnings ratio) at a modest premium to the market. We continue to value your participation and interest in the Mariner Small Cap Fund. Our objective is to strive to meet year expectations of a quality fund that will meet your financial goals. Sincerely, /s/ JOE P. SING, JR. Joe P.Sing, Jr. 2 COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN SMALL CAP FUND VS. RUSSELL 2000
- ------------------------------------------------------- Average Annual Total Return - ------------------------------------------------------- 1 Year Inception - ------------------------------------------------------- Offering Price(1) 19.85% 12.82% NAV(2) 26.20% 14.78% - -------------------------------------------------------
CHART [CHART OMITTED]
Plot Points: FUND (1) RUSSELL 2000 FUND (2) JAN 10,000 10,000 10,000 MAR 9,601 10,426 10,110 JUN 10,551 10,653 11,110 SEP 11,444 11,585 12,050 DEC 11,752 11,889 12,374 MAR 11,226 11,574 11,821 JUN 10,068 11,122 10,602 SEP 11,140 11,894 11,790 DEC 11,378 11,673 11,981 MAR 11,780 12,211 12,405 JUN 13,473 13,355 14,187 SEP 15,739 14,675 16,573 DEC 14,360 14,993 15,121 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 Small Cap Fund on January 4, 1993, to a $10,000 investment in the Russell 2000 Index on that date. All dividends and capital gain distributions are reinvested. The Fund's performance takes into account all applicable fees and expenses. The Russell 2000 Index is a widely accepted unmanaged index of overall market performance of many of the smallest publicly traded companies in the U.S. and does not take into account charges, fees and other expenses. PAGE 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 WILLIAM B. BLUNDIN CHIEF EXECUTIVE OFFICER ANN E. BERGIN PRESIDENT WILLIAM J. TOMKO VICE PRESIDENT MARK E. NAGLE TREASURER MARTIN R. DEAN ASSISTANT TREASURER ROBERT L. TUCH ASSISTANT SECRETARY ALAINA V. METZ ASSISTANT SECRETARY PAGE 4 STATEMENT OF NET ASSETS AS OF DECEMBER 31, 1995 SMALL CAP FUND
NUMBER OF SHARES VALUE - ---------- ---------- COMMON STOCKS-96.7% BEVERAGES - 2.0% 15,900 * Canandaigua Wine Co., Inc. $ 518,738 ---------- BROADCAST MEDIA - 1.5% 24,400 * International Family Entertainment Inc., Class B 399,550 ---------- BUSINESS SERVICES - 2.3% 40,200 * Personnel Group of America, Inc. 587,925 ---------- COMMERCIAL SERVICES - 8.5% 20,325 Paychex, Inc. 1,013,709 16,750 Sensormatic Electronics Corp. 291,031 31,800 * Verifone, Inc. 910,275 ---------- 2,215,015 ---------- COMPUTER SOFTWARE - 4.5% 25,800 * Emulex Corporation 264,450 27,400 * Network General Corp. 914,475 ---------- 1,178,925 ---------- COMPUTER SYSTEMS - 9.7% 19,300 * Cisco System, Inc. 1,440,263 20,900 * Optical Data Systems 527,725 25,400 * Proxima Corp. 561,975 ---------- 2,529,963 ---------- DATA PROCESSING - 2.1% 32,100 (a)* Envoy Corp. 555,731 ---------- DEPARTMENT STORES - 2.5% 25,000 * Proffitts, Inc. 656,250 ---------- ELECTRONICS - 3.7% 24,045 Harman International Industries, Inc. 964,806 ---------- FINANCE - CONSUMER LOANS - 3.0% 49,187 The Money Store, Inc. 768,547 ---------- FINANCIAL SERVICES - 5.6% 24,000 Advanta Corp., Class A 918,000 8,050 First Data Corp. 538,344 ---------- 1,456,344 ----------
5 STATEMENT OF NET ASSETS AS OF DECEMBER 31, 1995 (CONTINUED) SMALL CAP FUND
Number of Shares Value - ---------- ----------- COMMON STOCKS-(continued) HEALTH CARE - DRUGS - 2.3% 13,100 * Forest Laboratories, Inc. $ 592,775 ----------- HOSPITAL MANAGEMENT AND SUPPLIES - 2.5% 23,700 * Owen Healthcare, Inc. 654,712 ----------- MACHINERY - 4.2% 44,200 * Electroglas, Inc. 1,082,900 ----------- MEDICAL SERVICES - 8.0% 31,200 * Healthsource, Inc. 1,123,200 33,400 * Isolyser Company, Inc. 467,600 54,900 * Tokos Medical Corp. 500,963 ----------- 2,091,763 ----------- OFFICE EQUIPMENT & SUPPLIES - 3.5% 32,700 * Silicon Graphics, Inc. 899,250 ----------- RECREATION AND ENTERTAINMENT - 3.0% 25,400 * Movie Gallery, Inc. 774,700 ----------- RESTAURANTS - 1.4% 41,000 * Davco Restaurants, Inc. 353,625 ----------- RETAIL MERCHANDISING - 1.6% 22,000 * Friedman's Inc. 423,500 ----------- RETAIL - SPECIALTY - 9.7 % 20,200 * Discount Auto Parts, Inc. 628,725 35,675 * Office Depot, Inc. 704,581 23,800 * Petco Animal Supplies 696,150 28,100 * Rex Stores Corporation 498,775 ----------- 2,528,231 ----------- TELECOMMUNICATION - EQUIPMENT - 10.0% 19,000 * Cidco, Inc. 484,500 26,800 * Symmetricom, Inc. 368,500 20,000 U.S. Robotics, Inc. 1,755,000 ----------- 2,608,000 ----------- WHOLESALE TRADE - 5.1% 11,725 Cardinal Health Distribution 641,943 20,700 Fisher Scientific International, Inc. 690,862 ----------- 1,332,805 ----------- Total Common Stocks (Cost - $17,472,928) 25,174,055 -----------
6 STATEMENT OF NET ASSETS AS OF DECEMBER 31, 1995 (CONTINUED) SMALL CAP FUND
PRINCIPAL AMOUNT VALUE --------- ----------- SHORT-TERM INVESTMENTS - 8.6% $1,335,000 Provident Institutional Fund Trust for Federal Securities, 5.46%, On Demand. $ 1,335,000 896,000 Provident Institutional Temporary Investment Fund 5.59%, On Demand 896,000 ----------- Total Short-Term Investments (Cost - $2,231,000) 2,231,000 ----------- TOTAL INVESTMENTS - 105.3% (Cost - $19,703,928)** 27,405,055 ----------- OTHER ASSETS (LIABILITIES) - (5.3%) Cash 183,385 Organizational costs, net 17,872 Dividends and interest receivable 10,378 Prepaid expenses 2,380 Dividends payable (1,004,447) Payable for securities purchased (528,408) Payable for fund shares redeemed (4,470) Accrued expenses (21,284) Due to affiliates (24,769) ----------- Liabilities in excess of other assets - net (1,369,363) ----------- NET ASSETS - 100.0% $26,035,692 =========== NET ASSET VALUE PER SHARE - applicable to 1,800,980 shares ($0.001 par value) outstanding $14.46 ======
* Non-income producing security. ** Also, cost for Federal income tax purposes. As of December 31, 1995, unrealized appreciation for Federal income tax purposes aggregated $7,701,127 of which $8,918,979 related to appreciated securities and $1,217,852 related to depreciated securities. (a) In connection with a spinoff, the Fund is entitled to contingent value rights by holding this security. Such value rights will allow the purchase of shares of First Data Corp. if certain parameters are met. At December 31, 1995, these rights had no market value. See Notes to Financial Statements. 7 STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1995 SMALL CAP FUND INVESTMENT INCOME: Income: Dividends $ 123,461 ---------- Expenses: Advisory fees 179,340 Administrative services fee 25,620 Distribution expenses 23,699 Audit fee 22,810 Legal fees 18,604 Co-administrative and shareholder servicing fees 17,935 Transfer agent fees 14,619 Amortization of organizational costs 11,305 Trustees' fees and expenses 9,403 Printing 8,599 Custodian fee 3,619 Miscellaneous expenses 11,161 ---------- Total expenses 346,714 Less expense waivers (6,342) ---------- Net expenses 340,372 ---------- Net investment loss (216,911) ---------- REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain on investments 2,920,761 Net change in unrealized appreciation on investments 2,875,059 ---------- Net gain on investments 5,795,820 ---------- Net increase in net assets resulting from operations $5,578,909 ========== See Notes to Financial Statements. 8 STATEMENT OF CHANGES IN NET ASSETS SMALL CAP FUND
FOR THE FOR THE YEAR ENDED YEAR ENDED DECEMBER 31, 1995 DECEMBER 31, 1994 ----------------- ----------------- OPERATIONS: Net investment loss $ (216,911) $ (147,610) Net realized gain (loss) on investments 2,920,761 (2,230,327) Net change in unrealized appreciation on investments 2,875,059 1,830,241 ----------- ----------- Net increase (decrease) in net assets resulting from operations 5,578,909 (547,696) ----------- ----------- DISTRIBUTIONS TO SHAREHOLDERS FROM: Net realized gain on investments (1,004,447) -- ----------- ----------- CAPITAL SHARE TRANSACTIONS: Proceeds from sales of 208,197 and 823,619 shares, respectively 3,111,609 9,625,604 Net asset value of 225 shares issued in reinvestment of distributions -- 2,763 Payments for redemptions of 450,720 and 217,556 shares, respectively (5,957,958) (2,431,794) ----------- ----------- Net increase (decrease) in net assets from capital share transactions (2,846,349) 7,196,573 ----------- ----------- Net increase in net assets 1,728,113 6,648,877 ----------- ----------- NET ASSETS: Beginning of year 24,307,579 17,658,702 ----------- ----------- End of year $26,035,692 $24,307,579 =========== ===========
See Notes to Financial Statements. 9 NOTES TO FINANCIAL STATEMENTS 1. SIGNIFICANT ACCOUNTING POLICIES Mariner Small Cap 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. SECURITIES VALUATION: Investments in securities traded on an exchange are valued at the last quoted sales price for a given day, or if a sale is not reported for that day, at the mean between the most recent bid and asked prices. The bid price is used when no asked price is available. Short-term obligations having maturities 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 gains to its shareholders for each taxable year. Therefore, no provision is required for Federal income tax. DIVIDENDS AND DISTRIBUTIONS: The Fund intends to pay, as a semi-annual dividend, substantially all of its net investment income. Net capital gains, if any, are distributed at least annually. On December 27, 1995, the Fund declared a capital gain dividend of $0.56 per share payable on January 4, 1996 to shareholders on record as of December 28, 1995. SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Security transactions are recorded on trade date. Identified cost of investments sold is used for both financial statements and Federal income tax purposes. Dividend income is recorded on the ex-dividend date. 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. ORGANIZATIONAL COSTS: Costs incurred in connection with the organization of the Fund are being amortized on a straight-line basis over a five year period from the date operations commenced. 2. CAPITAL The Trust is authorized to issue an unlimited number of shares of beneficial interest each with a par value of $0.001. At December 31, 1995, the composition of net assets of the Fund was as follows: Paid-in capital $18,648,578 Accumulated net realized loss on investments (314,013) Net unrealized appreciation on investments 7,701,127 ----------- Total net assets $26,035,692 =========== For the years ended December 31, 1995 and 1994, the Fund reclassified $216,911 and $147,610 from accumulated net investment loss to paid-in capital, respectively. Net assets were not affected by this change. 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 year ended December 31, 1995, were approximately $7,230,000 and $7,869,000, 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 policies 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 $400 million 0.700% In excess of $400 million but not exceeding $800 million 0.645% In excess of $800 million but not exceeding $1.2 billion 0.590% In excess of $1.2 billion but not exceeding $1.6 billion 0.535% In excess of $1.6 billion but not exceeding $2 billion 0.480% In excess of $2 billion 0.415%
HSBC Americas retains Investment Concepts, Inc. ("ICI") to serve as sub-adviser to the Fund. As sub-adviser, ICI provides micro-and macroeconomic research, advice and recommendations, and economic and statistical data, with respect to the Fund's investments, subject to the overall review by HSBC Americas and the Board of Trustees. ICI is a subsidiary of BancOklahoma Trust Company ("BOTC"). BOTC is a subsidiary of Bank of Oklahoma, N.A. ("BOK") which, in turn, is a subsidiary of BOK Corporation. As compensation for its services, HSBC Americas pays ICI a monthly fee at an annual rate not to exceed 0.50% of average net assets up to $400 million. The fee is reduced at several breakpoints for average net assets in excess of $400 million up to $2 billion, at which point it becomes 0.290% of the average net assets in excess of $2 billion. For the year ended December 31, 1995, HSBC Americas earned approximately $179,300 in advisory fees, of which approximately $128,100 was paid to ICI. As administrator, 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 year ended December 31, 1995, PFPC earned approximately $23,700, net of waivers of approximately $1,900, in administrative services fees. Effective March 1996, PFPC will be terminated as administrator and transfer agent for the Fund. 11 NOTES TO FINANCIAL STATEMENTS (CONTINUED) 4. AGREEMENTS (CONTINUED) 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 Fund's shares held in the subaccounts of the Service Organizations. Effective September 25, 1995, Bank of New York replaced Marine Midland Bank, N.A. ("Marine Midland"), an affiliate of the Advisor, as custodian for the Fund. For furnishing custodian services, Marine Midland was paid a monthly fee with respect to the Fund for safekeeping its assets plus certain transaction charges and out-of-pocket expenses. For the period January 1, 1995 through September 25, 1995, HSBC Americas paid the Fund's entire custodian fee of approximately $3,000. 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 $17,900. Of that total, HSBC Americas waived approximately $1,400 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. One state in which the shares of the Fund are qualified for sale imposes limitations on the expenses of the Fund. The Advisory Contract and the Administrative Services Contract with HSBC Americas provide that if, in any fiscal year, the total expenses of the Fund (excluding taxes, interest, distribution expenses, brokerage commissions and other portfolio transaction expenses, other expenditures which are capitalized in accordance with generally accepted accounting principles and extraordinary expenses, but including the advisory and administrative services fees) exceed the expense limitation applicable to the Fund imposed by the securities regulations of such state, HSBC Americas will pay or reimburse the Fund in amounts equal to the excess. Although there is no certainty that this limitation will be in effect in the future, the effective limitation on an annual basis with respect to the Fund is currently 2.5% per annum of the first $30 million of average net assets, 2.0% the next $70 million of average net assets and 1.5% of average net assets in excess of $100 million. For the year ended December 31, 1995, there were no payments or reimbursements required as a result of this expense limitation. A partner of Baker & McKenzie, legal counsel to the Trust, serves as Secretary of the Trust. For the year ended December 31, 1995, the Fund incurred legal fees of approximately $16,200 to Fund counsel. 12 FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD SMALL CAP FUND
FOR THE PERIOD JANUARY 4, 1993 FOR THE FOR THE (COMMENCEMENT OF YEAR ENDED YEAR ENDED OPERATIONS) TO DECEMBER 31, 1995 DECEMBER 31, 1994 DECEMBER 31, 1993 ----------------- ----------------- ------------------- Net asset value, beginning of period $ 11.90 $ 12.29 $ 10.00 ------- ------- ------- Income from Investment Operations: Net investment loss (0.12) (0.07) (0.05) Net realized and unrealized gain (loss) on investments 3.24 (0.32) 2.42 ------- ------- ------- Total from investment operations 3.12 (0.39) 2.37 ------- ------- ------- Less Distributions from: Net realized gain (0.56) -- (0.08) ------- ------- ------- Net asset value, end of period $ 14.46 $ 11.90 $ 12.29 ======= ======= ======= Total Return (a) 26.20% (3.17%) 23.74%(c) Ratios/Supplemental Data Net assets (000), end of period $26,036 $24,308 $17,659 Ratio of expenses (without fee waivers) to average net assets 1.35% 1.38% 1.58%(b) Ratio of expenses (with fee waivers ) to average net assets 1.33% 1.23% 1.12%(b) Ratios of net investment loss (without fee waivers) to average net assets (0.87%) (0.73%) (0.97%)(b) Ratio of net investment loss (with fee waivers) to average net assets (0.85%) (0.68%) (0.51%)(b) Portfolio turnover rate 29.86% 20.17% 5.96%(c) - ------------------- (a) Exclusive of sales charge. (b) Annualized. (c) Not annualized.
See Notes to Financial Statements. 13 REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS To the Shareholders and Board of Trustees Mariner Mutual Funds Trust We have audited the accompanying statement of net assets of the Mariner Small Cap Fund (one of the portfolios comprising Mariner Mutual Funds Trust) as of December 31, 1995, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and financial highlights for each of the periods indicated therein. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 1995, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Mariner Small Cap Fund at December 31, 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 indicated periods, in conformity with generally accepted accounting principles. /s/ ERNST & YOUNG LLP New York, New York February 5, 1996 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- MARINER SM MUTUAL FUNDS TRUST 3435 Stelzer Road Columbus,Ohio 43219 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 (EFFECTIVE JANUARY 1, 1996) BISYSFund Services 3435 Stelzer Road Columbus, Ohio 43219 ADMINISTRATOR, TRANSFER AND DIVIDEND DISBURSING AGENT PFPC, Inc. 400 Bellevue Parkway Wilmington, Delaware 19809 CUSTODIAN Bank of New York 90 Washington Street New York, New York 10286 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. BACK -----END PRIVACY-ENHANCED MESSAGE-----