-----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, EEFLWWknWbHjESgwWhzAY6lJ0Nuvdn2RB8n9kvAgJ44eiowCz7BkxbItB9RHr9s4 F5gMNQa6EuefvR93eE8pnw== 0000935069-96-000039.txt : 19960312 0000935069-96-000039.hdr.sgml : 19960312 ACCESSION NUMBER: 0000935069-96-000039 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: 96533217 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 FIXED INCOME FUND MARINER MUTUAL FUNDS TRUST - ------------------------------------------------------------------------------- FIXED INCOME 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 - ------------------------------------------------------------------------------- FIXED INCOME FUND HSBC Asset Management (LOGO) - ------------------------------------------------------------------------------- February 12, 1996 Dear Shareholder: This was a record year in the fixed income markets. The total return of the market, as measured by the Lehman Aggregate Index was 18.47%, the highest in over a decade and third highest in history. The forces driving the market were low inflation, slowing economic activity and the prospect of a balanced budget. This combination has been potent and we have finished the year with a strong rally. MANAGER'S DISCUSSION OF PERFORMANCE - ----------------------------------- The Fund returned 16.73% versus 18.47% for the Lehman Aggregate Index.Our returns were below the index because of a higher average quality, incorrect duration positioning in the first quarter, and an underweighting in Corporates which were the best performing sector in 1995. The combination of these factors caused the funds to lag the index in what was a terrific rally. Sincerely, /s/ JAMES LARK James Lark 1 COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN FIXED INCOME FUND VS. LEHMAN AGGREGATE
Average Annual Total Return - ----------------------------------------------------- 1 Year Inception - ----------------------------------------------------- Offering Price(1) 11.14% 5.88% NAV(2) 16.73% 7.64% - -----------------------------------------------------
CHART [GRAPHIC OMITTED]
Plot Points: FUND(1) LEHMAN FUND(2) Jan 10,000 10,000 10,000 Mar 9,788 10,315 10,277 Jun 10,053 10,589 10,555 Sep 10,343 10,865 10,860 Dec 10,340 10,870 10,857 Mar 10,164 10,558 10,672 Jun 10,073 10,450 10,576 Sep 10,112 10,514 10,618 Dec 10,145 10,554 10,651 Mar 10,580 11,086 11,108 Jun 11,218 11,761 11,778 Sep 11,374 11,993 11,941 Dec 11,842 12,504 12,433 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 Fixed Income Fund on January 15, 1993, to a $10,000 investment in the Lehman Aggregate Bond 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 Lehman Aggregate Bond Index is a widely accepted unmanaged index of overall government corporate/mortgage bond market performance and does not take into account charges, fees and other expenses. 2 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 3 STATEMENT OF INVESTMENTS AS OF DECEMBER 31, 1995
FIXED INCOME FUND INTEREST MATURITY PRINCIPAL RATE DATE AMOUNT VALUE -------- -------- ---------- ---------- U.S. GOVERNMENT AGENCY OBLIGATIONS-40.8% MORTGAGE-BACKED SECURITIES-36.3% Federal Home Loan Mortgage Corporation: 220019 7.750% 01/01/02 $ 306,537 $ 312,456 1979-C 10.000 09/15/09 420,393 433,005 G10347 7.500 05/01/10 4,646,750 4,778,894 33-C 8.000 09/15/18 1,307,092 1,316,947 138-C 8.850 04/15/20 253,342 253,925 C80288 9.000 04/01/25 2,379,439 2,505,847 C00421 8.000 09/01/25 3,011,147 3,119,362 D62926 6.500 08/01/25 2,989,872 2,957,172 Federal National Mortgage Association Real Estate Mortgage Investment Conduits: 1989-C 10.000 12/25/17 1,902,349 1,965,545 1994-56L 6.500 09/25/22 4,449,717 4,382,303 Federal National Mortgage Association 7.500 06/01/25 3,721,062 3,811,763 7.000 12/01/25 4,989,466 5,028,448 Government National Mortgage Association: Collateralized Mortgage Obligation #168414. 10.000 08/15/22 961,241 1,053,607 Collateralized Mortgage Obligation #356578 7.500 06/15/23 4,205,903 4,324,194 Resolution Trust Corp. 1992-MH3 6.800 12/15/11 79,415 79,471 ----------- Total U.S. Government Agency Mortgage-Backed Securities (Cost - $35,765,883) 36,322,939 ----------- OTHER AGENCY OBLIGATIONS-4.5% Federal Home Loan Bank 6.270 01/14/04 1,500,000 1,500,889 6.160 01/21/04 1,500,000 1,490,556 Federal National Mortgage Association 5.550 02/12/99 1,500,000 1,491,040 ----------- Total Other Agency Obligations (Cost - $4,464,772) 4,482,485 ----------- Total U.S. Government Agency Obligations (Cost - $40,230,655) 40,805,424 ----------- U.S. GOVERNMENT OBLIGATIONS-26.9% U.S. Treasury Bonds: 11.625 11/15/04 1,000,000 1,415,625 8.875 08/15/17 190,000 254,541 8.750 08/15/20 2,280,000 3,058,761 7.875 02/15/21 1,000,000 1,230,937 8.000 11/15/21 1,160,000 1,451,812 7.500 11/15/24 1,000,000 1,201,250 7.625 02/15/25 500,000 610,937 6.875 08/15/25 8,500,000 9,589,062 ----------- 18,812,925 -----------
5 STATEMENT OF INVESTMENTS AS OF DECEMBER 31, 1995 (CONTINUED)
FIXED INCOME FUND INTEREST MATURITY PRINCIPAL RATE DATE AMOUNT VALUE -------- -------- ----------- ----------- U.S. GOVERNMENT OBLIGATIONS-(CONTINUED) U.S. Treasury Notes: 6.875% 07/31/99 $ 1,000,000 $ 1,049,687 8.000 08/15/99 1,000,000 1,087,813 7.750 01/31/00 1,000,000 1,086,562 6.750 04/30/00 3,000,000 3,157,500 7.875 11/15/04 500,000 579,062 7.500 02/15/05 1,000,000 1,135,000 ----------- 8,095,624 ----------- Total U.S. Government Obligations (Cost - $24,893,475) 26,908,549 ----------- ASSET-BACKED SECURITY-1.5% Sears Credit Account 1991-B (Cost - $1,620,465) 8.600 05/15/98 1,500,000 1,517,385 ----------- OTHER MORTGAGE-RELATED SECURITY-3.0% Prudential Home Mortgage Securities 1993-9 A9 (Cost - $2,997,188) 6.700 03/25/08 3,000,000 3,023,610 ----------- CORPORATE BONDS-12.9% FINANCIAL SERVICES - 7.3% American Express Credit Corp. 6.125 06/15/00 3,000,000 3,043,239 General Motors Acceptance Corp. 7.400 01/14/97 1,750,000 1,781,955 Provident Bank Corp. 6.375 01/15/04 2,500,000 2,487,400 ----------- 7,312,594 ----------- INDUSTRIAL - 0.7% Polaroid Corp. 7.250 01/15/97 665,000 674,952 ----------- UTILITIES - 3.6% Central Power & Light Co. 6.000 10/01/97 1,500,000 1,507,750 NYNEX 7.250 02/15/24 500,000 514,892 Pacific Telephone & Telegraph 6.875 08/15/23 1,500,000 1,511,928 ----------- 3,534,570 -----------
6 STATEMENT OF INVESTMENTS AS OF DECEMBER 31, 1995 (CONTINUED)
FIXED INCOME FUND INTEREST MATURITY PRINCIPAL RATE DATE AMOUNT VALUE -------- -------- ---------- ----------- CORPORATE BONDS-(CONTINUED) YANKEES - 1.3% Export Development Corp. 8.125% 08/10/99 $ 380,000 $ 410,377 Ontario Province, Canada 15.750 03/15/12 775,000 910,121 ---------- 1,320,498 ---------- Total Corporate Bonds (Cost - $12,925,479) 12,842,614 ---------- SHORT-TERM INVESTMENT - 1.6% Provident Institutional Temporary Investment Fund (Cost - $1,634,000) 5.590 On Demand 1,634,000 1,634,000 ----------- TOTAL INVESTMENTS - 86.7% (Cost - $84,301,262)* 86,731,582 OTHER ASSETS, LESS LIABILITIES - 13.3% 13,210,463 ----------- NET ASSETS - 100% $99,942,045 =========== * Also, cost for Federal income tax purposes. As of December 31, 1995, net unrealized appreciation for Federal Income tax purposes aggregated $2,430,320 of which $2,989,934 related to appreciated securities and $559,614 related to depreciated securities.
See Notes to Financial Statements. 7 STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 1995 FIXED INCOME FUND ASSETS: Investments at value (Cost $84,301,262) $86,731,582 Cash 541 Receivable for fund shares sold 12,485,981 Interest and dividends receivable 1,206,158 Organizational costs, net 24,274 Prepaid expenses 8,630 ----------- TOTAL ASSETS 100,457,166 ----------- LIABILITIES: Dividends payable 424,878 Accrued expenses 35,811 Due to affiliates 54,432 ----------- TOTAL LIABILITIES 515,121 ----------- NET ASSETS $99,942,045 =========== NET ASSETS CONSIST OF: Paid-in capital $98,621,639 Accumulated net realized loss on investments (1,109,914) Net unrealized appreciation on investments 2,430,320 ----------- NET ASSETS - applicable to 9,718,065 shares ($0.001 par value) outstanding; unlimited number of shares authorized $99,942,045 =========== NET ASSET VALUE, offering and redemption price per share $10.28 =========== See Notes to Financial Statements. 8 STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1995 FIXED INCOME FUND
INVESTMENT INCOME: Income: Interest $ 5,874,281 ----------- Expenses: Advisory fees 464,376 Administrative services fee 84,432 Co-administrative and shareholder servicing fees 59,102 Distribution expenses 55,771 Transfer agent fees 36,235 Audit fee 25,653 Legal fees 18,604 Amortization of organizational costs 12,457 Insurance 11,941 Custodian fee 11,400 Printing 9,435 Trustees' fees and expenses 9,403 Miscellaneous expenses 7,092 ----------- Total expenses 805,901 Less expense waivers (20,930) ----------- Net expenses 784,971 ----------- Net investment income 5,089,310 ----------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized loss on investments (89,155) Net change in unrealized appreciation on investments 8,168,553 ----------- Net gain on investments 8,079,398 ----------- Net increase in net assets resulting from operations $13,168,708 ===========
See Notes to Financial Statements. 9 Statement of Changes in Net Assets FIXED INCOME FUND
FOR THE FOR THE YEAR ENDED YEAR ENDED DECEMBER 31, 1995 DECEMBER 31, 1994 ----------------- ----------------- OPERATIONS: Net investment income $ 5,089,310 $ 5,424,521 Net realized loss on investments (89,155) (945,839) Net change in unrealized appreciation (depreciation) on investments 8,168,553 (6,295,449) ----------- ----------- Net increase (decrease) in net assets resulting from operations 13,168,708 (1,816,767) ----------- ----------- DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income (5,089,310) (5,424,521) ----------- ----------- CAPITAL SHARE TRANSACTIONS: Proceeds from sales of 3,103,767 and 1,533,134 shares, respectively 31,114,026 14,857,353 Net asset value of 9,374 and 15,721 shares issued in reinvestment of distributions, respectively 92,653 152,957 Payments for redemptions of 2,464,690 and 1,449,568 shares, respectively (24,118,178) (13,902,241) ----------- ----------- Net increase in net assets from capital share transactions 7,088,501 1,108,069 ----------- ----------- Net increase (decrease) in net assets 15,167,899 (6,133,219) ----------- ----------- NET ASSETS: Beginning of year 84,774,146 90,907,365 ----------- ----------- End of year $99,942,045 $84,774,146 =========== ===========
See Notes to Financial Statements. 10 NOTES TO FINANCIAL STATEMENTS 1. SIGNIFICANT ACCOUNTING POLICIES Mariner Fixed Income 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: 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 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 capital gains to its shareholders for each taxable year. Therefore, no provision is required for Federal income tax. The Fund has available a $1,082,278 capital loss carryforward which, if not utilized, $207,551 and $874,727 will expire in year 2002 and 2003, respectively. 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 pay within five business days after the end of each month. Net capital gains, if any, will be distributed annually. SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Security transactions are recorded on 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. 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. PORTFOLIO SECURITIES The cost of securities purchased and proceeds from securities sold (excluding short-term securities and principal paydowns) for the year ended December 31, 1995 were approximately $140,414,000 and $31,953,000, respectively. 11 NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. 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 $400 million 0.550% In excess of $400 million but not exceeding $800 million 0.505% In excess of $800 million but not exceeding $1.2 billion 0.460% In excess of $1.2 billion but not exceeding $1.6 billion 0.415% In excess of $1.6 billion but not exceeding $2 billion 0.370% In excess of $2 billion 0.315% For the year ended December 31, 1995, HSBC Americas earned approximately $464,400 in advisory fees. 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 year ended December 31, 1995, PFPC earned approximately $78,200, net of fee waivers of approximately $6,300, in administrative services fees. Effective March 1996, PFPC will be terminated as administrator and transfer agent for the Fund. 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. Effective September 25, 1995, Bank of New York replaced Marine Midland Bank, N.A. ("Marine Midland"), an affiliate of the Adviser, 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 from January 1, 1995 through September 25, 1995, HSBC Americas paid the Fund's entire custodian fee of approximately $9,500. 12 NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. AGREEMENTS (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 $59,100. Of that total, HSBC Americas waived approximately $5,100 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% of 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. 13 FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
FIXED INCOME FUND FOR THE PERIOD JANUARY 15, 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 $ 9.35 $ 10.13 $ 10.00 ------- ------- ------- Income From Investment Operations Net investment income 0.59 0.59 0.63 Net realized and unrealized gain (loss) on investments 0.93 (0.78) 0.21 ------- ------- ------- Total from investment operations 1.52 (0.19) 0.84 ------- ------- ------- Less Distributions from: Net investment income (0.59) (0.59) (0.63) Net capital gain -- -- (0.07) Excess of net realized gain on investments -- -- (0.01) ------- ------- ------- Total distributions (0.59) (0.59) (0.71) ------- ------- ------- Net asset value, end of period $10.28 $ 9.35 $10.13 ======= ======= ======= Total Return (a) 16.73% (1.89)% 8.57%(b) Ratios / Supplemental Data Net assets (000), end of period $99,942 $84,774 $90,907 Ratio of expenses (without fee waivers) to average net assets 0.96% 0.86% 0.87%(c) Ratio of expenses (with fee waivers) to average net assets 0.93% 0.77% 0.22%(c) Ratio of net investment income (without fee waivers) to average net assets 6.00% 6.01% 5.75%(c) Ratio of net investment income (with fee waivers) to average net assets 6.03% 6.10% 6.40%(c) Portfolio turnover rate 41.58% 63.96% 107.34%(b) - ----------------- (a) Excludes sales charge. (b) Not annualized. (c) Annualized.
See Notes to Financial Statements. 14 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 assets and liabilities of the Mariner Fixed Income Fund (one of the portfolios comprising Mariner Mutual Funds Trust), including the statement of investments, 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 herein. 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. 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 Fixed Income 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 15 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- 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-----