-----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, QAH27at7fWPVv78N07RkjZuRBOR36+kJ2P0vjHebhl/wzXeM87MUiVhkSg5qFuNF LVEHYT0UZWjVu+247IJROg== 0001193125-06-099702.txt : 20060504 0001193125-06-099702.hdr.sgml : 20060504 20060504105731 ACCESSION NUMBER: 0001193125-06-099702 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20060228 FILED AS OF DATE: 20060504 DATE AS OF CHANGE: 20060504 EFFECTIVENESS DATE: 20060504 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MONARCH FUNDS CENTRAL INDEX KEY: 0000889509 IRS NUMBER: 000000000 STATE OF INCORPORATION: MA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-06742 FILM NUMBER: 06806558 BUSINESS ADDRESS: STREET 1: CITIGROUP GLOBAL TRANSACTION SVCS STREET 2: TWO PORTLAND SQUARE CITY: PORTLAND STATE: ME ZIP: 04101-4049 BUSINESS PHONE: (800)754-8757 MAIL ADDRESS: STREET 1: CITIGROUP GLOBAL TRANSACTION SVCS STREET 2: TWO PORTLAND SQUARE CITY: PORTLAND STATE: ME ZIP: 04101-4049 0000889509 S000004574 Monarch Daily Assets Cash Fund C000012507 Institutional Shares MCIXX C000012508 Institutional Service Shares FACXX C000012509 Investor Shares MCVXX C000012510 Preferred Shares MCEXX C000012511 B Shares MHBXX C000012512 C Shares MHCXX C000012513 Universal Shares MOCXX 0000889509 S000004575 Monarch Daily Assets Government Obligations Fund C000012514 Universal Shares DGIXX 0000889509 S000004576 Monarch Daily Assets Government Fund C000012515 Institutional Shares MGIXX C000012516 Institutional Service Shares DGAXX C000012517 Investor Shares MGVXX C000012518 Preferred Shares MGEXX C000012519 Universal Shares MGCXX 0000889509 S000004577 Monarch Daily Assets Treasury Fund C000012520 Institutional Service Shares MOIXX C000012521 Investor Shares MTVXX N-CSRS 1 dncsrs.txt MONARCH FUNDS As filed with the Securities and Exchange Commission on May 4, 2006 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-6742 MONARCH FUNDS Two Portland Square Portland, Maine 04101 207-879-1900 David M. Whitaker Two Portland Square Portland, ME 04101 207-822-6114 Date of fiscal year end: August 31, 2006 Date of reporting period: September 1, 2005 - February 28, 2006 Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ================================================================================ ITEM 1. REPORT TO STOCKHOLDERS. FEBRUARY 28, 2006 (UNAUDITED) DAILY ASSETS TREASURY FUND DAILY ASSETS GOVERNMENT OBLIGATIONS FUND DAILY ASSETS GOVERNMENT FUND DAILY ASSETS CASH FUND SEMI-ANNUAL REPORT MONARCH FUNDS [GRAPHIC] MONARCH FUNDS - -------------------------------------------------------------------------------- A MESSAGE TO OUR SHAREHOLDERS February 28, 2006 Since our last annual report, U.S. economic growth has surpassed most people's expectations. In spite of higher oil prices and major weather related catastrophes, real Gross Domestic Product (GDP) and job growth have remained strong. As such, the Federal Reserve has maintained its monetary policy bias toward raising short term interest rates seeking to prevent a resurgence of inflation due to higher prices for commodities, homes and finished goods. As of February 28, 2006 the Federal Funds rate was 4.50% and expectations are that further increases in this rate are most likely. Based on these factors our Portfolio Management team continues to maintain short average maturities of the Funds' portfolios without sacrificing yield. With our short average maturities, we are well positioned to take advantage of any further interest rate increases. We are pleased to report that Monarch's Daily Assets Government Fund, our oldest fund and our Daily Assets Cash Fund continued to exhibit relatively strong performance for the six months ended February 28, 2006. For the three-year period ended December 31, 2005, the Daily Assets Government Fund's Preferred Shares held the number 1 spot out of 120 funds within the Lipper Institutional U.S. Government Money Market category and the Daily Assets Cash Fund's Preferred Shares held the number 7 spot out of 262 funds within the Lipper Institutional Money Market category.* For more than thirteen years, we have remained committed to maintaining your $1.00 per share price and providing competitive returns through the skilled and prudent portfolio management you expect. We thank all of our investors and the financial intermediaries we service for their continued support. Please feel free to call us with your questions or comments at (800) 754-8757. Monarch Funds *PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND IS NO GUARANTEE OF FUTURE RESULTS. PREFERRED SHARES OF DAILY ASSETS GOVERNMENT FUND, RANKED 2 OUT OF 143 AND 1 OUT OF 124 WITHIN THE INSTITUTIONAL U.S. GOVERNMENT MONEY MARKET FUNDS CATEGORY FOR THE 1- AND 3-YEAR PERIODS AS OF MARCH 31, 2006. PREFERRED SHARES OF DAILY ASSETS CASH FUND RANKED 10 OUT OF 321 AND 5 OUT OF 270 WITHIN THE INSTITUTIONAL MONEY MARKET FUNDS CATEGORY FOR THE 1- AND 3-YEAR PERIODS AS OF MARCH 31, 2006. RANKINGS ARE BASED ON TOTAL RETURN AND WILL VARY FOR OTHER SHARE CLASSES. FORESIDE FUND SERVICES, LLC, DISTRIBUTOR. ALTHOUGH MONEY MARKET FUNDS SEEK TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THEM. AN INVESTMENT IN A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY, AND IS NOT ENDORSED OR GUARANTEED BY ANY BANK OR ANY AFFILIATE OF A BANK. 1 MONARCH FUNDS - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - DAILY ASSETS TREASURY FUND February 28, 2006
FACE AMOUNT SECURITY DESCRIPTION RATE MATURITY VALUE - ----------- -------------------------------------------------------------------------- ---- -------- ----------- U.S. TREASURY BILLS# - 49.0% $20,000,000 U.S. Treasury Bill 4.40% 03/16/06 $19,963,417 20,000,000 U.S. Treasury Bill 4.38 04/20/06 19,879,583 ----------- Total U.S. Treasury Bills 39,843,000 ----------- REPURCHASE AGREEMENTS - 51.3% 14,240,000 Bank of America Securities, dated 02/28/06, to be repurchased at $14,241,776; collateralized by various U.S. Treasury Obligations 4.49 03/01/06 14,240,000 12,500,000 Deutsche Bank Securities, Inc., dated 02/28/06, to be repurchased at $12,501,569; collateralized by various U.S. Treasury Obligations 4.52 03/01/06 12,500,000 15,000,000 Merrill Lynch & Co., Inc., dated 02/28/06, to be repurchased at $15,001,883; collateralized by various U.S. Treasury Obligations 4.52 03/01/06 15,000,000 ----------- Total Repurchase Agreements 41,740,000 ----------- Total Investments at Amortized Cost* - 100.3% $81,583,000 Other Assets and Liabilities, Net - (0.3%) (233,442) ----------- NET ASSETS - 100.0% $81,349,558 =========== PORTFOLIO HOLDINGS % OF TOTAL INVESTMENTS Repurchase Agreements 51.2% U.S. Treasury Bills 48.8% # Rates shown are annualized yields at time of purchase. * Cost for federal income tax purposes is substantially the same as for financial statement purposes.
See Notes to Financial Statements. 2 MONARCH FUNDS - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - DAILY ASSETS GOVERNMENT OBLIGATIONS FUND February 28, 2006
FACE AMOUNT SECURITY DESCRIPTION RATE MATURITY VALUE - ----------- -------------------------------------------------------------------------- ---- -------- ----------- U.S. GOVERNMENT SECURITY - 91.7% FEDERAL HOME LOAN BANK - DISCOUNT NOTE# - 91.7% $17,020,000 FHLB 4.41% 04/30/06 $16,951,665 ----------- SHARES - ----------- MONEY MARKET FUND - 8.5% 1,574,000 Dreyfus Treasury Prime Cash Management Fund 1,574,000 ----------- Total Investments at Amortized Cost* - 100.2% $18,525,665 Other Assets and Liabilities, Net - (0.2%) (34,558) ----------- NET ASSETS - 100.0% $18,491,107 =========== PORTFOLIO HOLDINGS % OF TOTAL INVESTMENTS U.S. Government Security 91.5% Money Market Fund 8.5% # Rates shown are annualized yields at time of purchase. * Cost for federal income tax purposes is substantially the same as for financial statement purposes.
See Notes to Financial Statements. 3 MONARCH FUNDS - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - DAILY ASSETS GOVERNMENT FUND February 28, 2006
FACE AMOUNT SECURITY DESCRIPTION RATE MATURITY VALUE - ---------- -------------------------------------------------------------------------- ---- -------- ----------- U.S. GOVERNMENT SECURITIES - 9.3% SMALL BUSINESS ADMINISTRATION(+/-) - 9.3% $ 25,391 Pool #500536 6.25% 05/25/13 $ 25,750 178,536 Pool #501077 6.00 11/25/14 178,536 105,295 Pool #501308 5.75 10/25/15 105,295 604,430 Pool #501543 5.63 07/25/16 604,430 128,985 Pool #501690 5.38 12/25/16 128,985 239,874 Pool #501733 5.25 02/25/17 241,427 319,299 Pool #501898 5.75 07/25/17 319,299 356,205 Pool #501989 5.38 10/25/12 358,525 1,170,425 Pool #502150 5.25 02/25/18 1,176,598 55,225 Pool #502161 5.50 02/25/18 55,225 550,047 Pool #502208 5.25 02/25/18 551,743 49,287 Pool #502306 5.50 02/25/18 49,287 41,206 Pool #502613 5.50 04/25/19 41,206 47,134 Pool #502914 5.25 03/25/15 47,401 228,632 Pool #503058 5.13 07/25/15 228,632 211,940 Pool #503082 5.13 09/25/20 211,940 191,089 Pool #503120 5.13 10/25/20 191,089 614,181 Pool #503121 5.13 09/25/15 615,917 1,814,958 Pool #503152 4.88 11/25/20 1,814,958 236,388 Pool #503278 4.88 02/25/21 236,400 379,186 Pool #503429 5.00 06/25/16 379,660 270,891 Pool #503431 5.25 07/25/21 270,959 1,188,960 Pool #503461 5.00 09/25/21 1,189,523 242,294 Pool #503472 5.25 08/25/21 242,294 1,102,030 Pool #503553 4.88 11/25/21 1,102,783 1,279,256 Pool #503614 5.13 01/25/22 1,279,256 474,405 Pool #503671 5.13 03/25/22 474,405 725,418 Pool #503754 5.13 05/25/22 725,991 741,095 Pool #503882 4.75 09/25/22 740,587 224,188 Pool #503892 5.13 07/25/22 224,397 1,207,566 Pool #503909 4.75 10/25/22 1,207,199 429,271 Pool #504015 4.75 01/25/23 429,215 544,552 Pool #504062 4.75 02/25/23 544,552 130,004 Pool #504074 5.00 02/25/23 130,004 379,710 Pool #504203 4.88 07/25/13 380,132 234,115 Pool #504269 5.13 05/25/15 234,396 7,505,196 Pool #504366 4.63 02/25/24 7,489,132 3,991,444 Pool #504719 5.13 07/25/24 3,991,444 1,231,641 Pool #504727 5.13 09/25/24 1,231,641 1,271,080 Pool #504765 4.88 10/25/09 1,269,586 1,650,928 Pool #504769 4.88 10/25/24 1,650,928 118,583 Pool #505204 5.00 09/25/25 118,559 223,827 Pool #505205 5.06 09/25/07 223,816 ----------- Total Small Business Administration 32,713,102 ----------- Total U.S. Government Securities 32,713,102 -----------
See Notes to Financial Statements. 4 MONARCH FUNDS - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - DAILY ASSETS GOVERNMENT FUND February 28, 2006
FACE AMOUNT SECURITY DESCRIPTION RATE MATURITY VALUE - ------------ --------------------------------------------------------------------------- ---- -------- ------------ REPURCHASE AGREEMENTS - 90.6% $ 67,404,000 Bank of America Securities, dated 2/28/06, to be repurchased at $67,412,482; collateralized by various U.S. Government Agency Obligations 4.53% 03/01/06 $ 67,404,000 120,000,000 Bear Stearns & Co., Inc., dated 2/28/06, to be repurchased at $120,015,233; collateralized by various U.S. Government Agency Obligations 4.57 03/01/06 120,000,000 80,000,000 Deutsche Bank Securities, Inc., dated 2/28/06, to be repurchased at $80,010,156; collateralized by various U.S. Government Agency Obligations 4.57 03/01/06 80,000,000 49,500,000 Merrill Lynch, dated 2/28/06, to be repurchased at $49,506,284; collateralized by various U.S. Government Agency Obligations 4.57 03/01/06 49,500,000 ------------ Total Repurchase Agreements 316,904,000 ------------ Total Investments at Amortized Cost* - 99.9% $349,617,102 Other Assets and Liabilities, Net - 0.1% 342,571 ------------ NET ASSETS - 100.0% $349,959,673 ============ PORTFOLIO HOLDINGS % OF TOTAL INVESTMENTS Repurchase Agreements 90.7% U.S. Government Securities 9.3% (+/-)Certain securities are deemed to have a maturity remaining until the next adjustment of the interest rate, or the longer of the demand period or time to next readjustment. The interest rates shown reflect the rate in effect on February 28, 2006. * Cost for federal income tax purposes is substantially the same as for financial statement purposes.
See Notes to Financial Statements. 5 MONARCH FUNDS - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - DAILY ASSETS CASH FUND February 28, 2006
FACE AMOUNT SECURITY DESCRIPTION RATE MATURITY VALUE - ----------- -------------------------------------------------------------------------- ---- -------- ------------ COMMERCIAL PAPER# - 22.0% $10,000,000 Cafco, LLC^ 4.45% 03/22/06 $ 9,974,333 18,000,000 Edison Asset Securitization, LLC^ 4.52 03/03/06 17,995,500 18,000,000 General Electric Capital Corp. 4.52 03/15/06 17,968,500 15,000,000 UBS Finance Delaware, LLC 4.52 03/15/06 14,973,721 15,000,000 Unionbancal Commerical Funding 4.56 03/31/06 14,943,375 5,000,000 Windmill Funding Corp.^ 4.50 03/01/06 5,000,000 ------------ Total Commercial Paper 80,855,429 ------------ CORPORATE NOTES(+/-) - 35.7% 12,838,000 Bear Stearns & Co., Inc. 4.75 06/19/06 12,848,390 5,000,000 CIT Group, Inc. 4.70 04/19/06 5,000,743 10,000,000 CIT Group, Inc. 4.75 05/12/06 10,000,000 4,000,000 Countrywide Home Loan 4.69 04/12/06 4,000,206 10,000,000 Countrywide Financial Corp. 4.55 09/13/06 10,000,000 10,000,000 Credit Suisse First Boston 4.78 06/19/06 10,008,486 7,000,000 Credit Suisse New York 4.55 07/19/06 7,000,235 15,000,000 Goldman Sachs Group, Inc. 4.70 03/21/06 15,001,861 5,250,000 Merrill Lynch & Co., Inc. 4.88 04/18/06 5,252,048 5,000,000 Merrill Lynch & Co., Inc. 4.70 06/06/06 5,003,577 10,000,000 Merrill Lynch & Co., Inc. 4.70 09/18/06 10,012,340 15,000,000 Morgan Stanley 4.80 03/27/06 15,003,371 15,000,000 U.S. Trust Co. of New York 4.62 09/12/06 15,003,682 7,205,000 Wells Fargo & Co. 4.57 06/12/06 7,206,612 ------------ Total Corporate Notes 131,341,551 ------------ REPURCHASE AGREEMENTS - 42.4% 41,110,000 Bank of America Securities, dated 02/28/06, to be repurchased at $41,115,173; collateralized by various U.S. Government Agency Obligations 4.53 03/01/06 41,110,000 70,000,000 Bear Stearns & Co., Inc., dated 02/28/06, to be repurchased at $70,008,886; collateralized by various U.S. Government Agency Obligations 4.57 03/01/06 70,000,000 45,250,000 Deutsche Bank Securities, Inc., dated 02/28/06, to be repurchased at $45,255,744; collateralized by various U.S. Government Agency Obligations 4.57 03/01/06 45,250,000 ------------ Total Repurchase Agreements 156,360,000 ------------ Total Investments at Amortized Cost* - 100.1% $368,556,980 Other Assets and Liabilities, Net - (0.1%) (412,695) ------------ NET ASSETS - 100.0% $368,144,285 ============ # Rates shown are annualized yields at time of purchase. (+/-)Certain securities are deemed to have a maturity remaining until the next adjustment of the interest rate, or the longer of the demand period or time to next readjustment. The interest rates shown reflect the rate in effect on February 28, 2006. ^ Security exempt from registration under Rule 144A under the Securities Act of 1933. At the period end, the value of these securities amounted to $32,969,833 or 9.0% of net assets. * Cost for federal income tax purposes is substantially the same as for financial statement purposes.
See Notes to Financial Statements. 6 MONARCH FUNDS - -------------------------------------------------------------------------------- STATEMENTS OF ASSETS AND LIABILITIES February 28, 2006
DAILY ASSETS DAILY ASSETS GOVERNMENT DAILY ASSETS DAILY ASSETS TREASURY OBLIGATIONS GOVERNMENT CASH FUND FUND FUND FUND ------------ ------------ ------------ ------------ Assets Investments: Securities at amortized cost $39,843,000 $18,525,665 $ 32,713,102 $212,196,980 Repurchase agreements 41,740,000 -- 316,904,000 156,360,000 Cash 40,497 30,303 34,963 23,309 Receivables: Dividends -- 4,907 -- -- Interest 5,229 -- 314,007 963,176 Investment securities sold -- -- 1,369,321 -- Receivable from administrator 1,899 2,095 -- 7,490 Prepaid expenses and other assets 13,140 3,752 25,826 38,918 ----------- ----------- ------------ ------------ Total Assets 81,643,765 18,566,722 351,361,219 369,589,873 ----------- ----------- ------------ ------------ Liabilities Payables: Dividends 229,876 59,414 1,160,158 1,220,376 Accrued expenses: Payables to related parties 2,273 -- 32,953 11,024 Trustees' fees and expenses 155 38 -- 765 Other expenses and other liabilities 61,903 16,163 208,435 213,423 ----------- ----------- ------------ ------------ Total Liabilities 294,207 75,615 1,401,546 1,445,588 ----------- ----------- ------------ ------------ Net Assets $81,349,558 $18,491,107 $349,959,673 $368,144,285 =========== =========== ============ ============ Components of Net Assets Paid in capital $81,349,545 $18,514,919 $349,988,185 $368,159,116 Undistributed (distributions in excess of) net investment income (84) 408 (28,514) (559) Accumulated net realized gain (loss) 97 (24,220) 2 (14,272) ----------- ----------- ------------ ------------ Net Assets $81,349,558 $18,491,107 $349,959,673 $368,144,285 =========== =========== ============ ============ Net Assets by Class of Shares Preferred Shares $ -- $ -- $106,745,020 $ 45,516,246 Universal Shares -- 18,491,107 52,254,812 53,145,393 Institutional Service Shares 13,978,851 -- 39,215,040 19,615,767 Institutional Shares -- -- 98,702,643 64,736,478 Investor Shares 67,370,707 -- 53,042,158 185,030,728 B Shares -- -- -- 30,448 C Shares -- -- -- 69,225 ----------- ----------- ------------ ------------ Net Assets $81,349,558 $18,491,107 $349,959,673 $368,144,285 =========== =========== ============ ============ Shares of Beneficial Interest for each Class of Shares Preferred Shares -- -- 106,744,227 45,516,455 Universal Shares -- 18,515,152 52,294,239 53,149,867 Institutional Service Shares 13,974,572 -- 39,215,120 19,615,930 Institutional Shares -- -- 98,697,588 64,739,220 Investor Shares 67,374,983 -- 53,037,025 185,038,005 B Shares -- -- -- 30,449 C Shares -- -- -- 69,225 Net Asset Value Per Share (Offering and Redemption Price per Share) for each Class of Shares $ 1.00 $ 1.00 $ 1.00 $ 1.00
See Notes to Financial Statements. 7 MONARCH FUNDS - -------------------------------------------------------------------------------- STATEMENTS OF OPERATIONS Six Months Ended February 28, 2006
DAILY ASSETS DAILY ASSETS GOVERNMENT DAILY ASSETS DAILY ASSETS TREASURY OBLIGATIONS GOVERNMENT CASH FUND FUND FUND FUND ------------ ------------ ------------ ------------ Investment Income: Interest income $1,391,038 $323,605 $30,105,681 $8,292,898 Dividend income 5,568 25,978 -- -- ---------- -------- ----------- ---------- Total Investment Income 1,396,606 349,583 30,105,681 8,292,898 ---------- -------- ----------- ---------- Expenses: Investment adviser fees 12,164 4,401 256,446 69,662 Administrator fees Preferred Shares -- -- 677,728 27,474 Universal Shares -- 9,681 23,623 33,230 Institutional Service Shares 6,618 -- 31,517 13,397 Institutional Shares -- -- 51,720 29,040 Investor Shares 31,873 -- 31,713 117,275 B Shares -- -- -- 12,421 C Shares -- -- -- 12,435 Shareholder service fees Institutional Service Shares 12,033 -- 57,303 24,357 Institutional Shares -- -- 94,036 52,800 Investor Shares 57,951 -- 57,660 213,230 B Shares -- -- -- 48 C Shares -- -- -- 76 Distribution fees Investor Shares 72,438 -- 72,075 266,534 B Shares -- -- -- 145 C Shares -- -- -- 229 Compliance Services fees 1,104 562 7,566 3,730 Transfer agency fees Preferred Shares -- -- 23,039 8,763 Universal Shares -- 11,835 18,425 24,292 Institutional Service Shares 12,727 -- 36,342 19,071 Institutional Shares -- -- 105,044 61,147 Investor Shares 68,985 -- 67,300 226,870 B Shares -- -- -- 7,478 C Shares -- -- -- 7,502 Custodian fees 4,374 1,100 92,771 25,056 Professional fees 17,717 16,108 20,081 19,524 Accountant fees 24,611 20,736 48,686 61,947 Trustees' fees and expenses 1,533 377 29,448 8,603 Miscellaneous expenses 18,591 6,943 43,619 37,949 ---------- -------- ----------- ---------- Total Expenses 342,719 71,743 1,846,142 1,384,285 Expenses reimbursed and fees waived (70,857) (53,789) (395,069) (184,202) ---------- -------- ----------- ---------- Net Expenses 271,862 17,954 1,451,073 1,200,083 ---------- -------- ----------- ---------- Net Investment Income (Loss) 1,124,744 331,629 28,654,608 7,092,815 ---------- -------- ----------- ---------- Net Realized Gain (Loss) on Investments -- -- -- (687) ---------- -------- ----------- ---------- Increase (Decrease) in Net Assets from Operations $1,124,744 $331,629 $28,654,608 $7,092,128 ========== ======== =========== ==========
See Notes to Financial Statements. 8 MONARCH FUNDS - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS
DAILY ASSETS TREASURY FUND --------------------------------- SIX MONTHS ENDED YEAR ENDED FEBRUARY 28, 2006 AUGUST 31, 2005 ----------------- --------------- Operations Net investment income (loss) $ 1,124,744 $ 2,225,708 Net realized gain (loss) on investments -- 133 ------------- --------------- Increase (Decrease) in Net Assets from Operations 1,124,744 2,225,841 ------------- --------------- Distributions to Shareholders from Net investment income--Universal Shares (a) -- (985,929) Net investment income--Institutional Service Shares (212,827) (278,559) Net investment income--Investor Shares (911,918) (961,220) Net realized gain--Preferred Shares -- -- Net realized gain--Universal Shares -- -- Net realized gain--Institutional Service Shares -- -- Net realized gain--Institutional Shares -- -- Net realized gain--Investor Shares -- -- ------------- --------------- Total Distributions to Shareholders (1,124,745) (2,225,708) ------------- --------------- Capital Share Transactions Sale of shares--Universal Shares (a) -- 143,522,719 Sale of shares--Institutional Service Shares 27,041,098 137,281,165 Sale of shares--Investor Shares 500,607,434 1,106,065,389 Reinvestment of distributions--Universal Shares (a) -- 171,170 Reinvestment of distributions--Institutional Service Shares 135,250 199,036 Reinvestment of distributions--Investor Shares 723,588 960,627 Redemption of shares--Universal Shares (a) -- (230,453,376) Redemption of shares--Institutional Service Shares (25,073,656) (141,153,779) Redemption of shares--Investor Shares (480,906,545) (1,116,289,749) ------------- --------------- Increase (Decrease) from Capital Transactions 22,527,169 (99,696,798) ------------- --------------- Increase (Decrease) in Net Assets 22,527,168 (99,696,665) ------------- --------------- Net Assets Beginning of Period 58,822,390 158,519,055 ------------- --------------- End of Period $ 81,349,558 $ 58,822,390 ============= =============== Share Transactions Sale of shares--Universal Shares (a) -- 143,522,720 Sale of shares--Institutional Service Shares 27,041,098 137,281,165 Sale of shares--Investor Shares 500,607,434 1,106,065,388 Reinvestment of distributions--Universal Shares (a) -- 171,170 Reinvestment of distributions--Institutional Service Shares 135,250 199,036 Reinvestment of distributions--Investor Shares 723,588 960,627 Redemption of shares--Universal Shares (a) -- (230,453,376) Redemption of shares--Institutional Service Shares (25,073,656) (141,153,779) Redemption of shares--Investor Shares (480,906,545) (1,116,289,749) ------------- --------------- Increase (Decrease) in Shares 22,527,169 (99,696,798) ============= =============== Undistributed (distributions in excess of) Net Investment Income $ (84) $ (83) ------------- ---------------
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND -------------------------------- SIX MONTHS ENDED YEAR ENDED FEBRUARY 28, 2006 AUGUST 31, 2005 ----------------- --------------- Operations Net investment income (loss) $ 331,629 $ 404,866 Net realized gain (loss) on investments -- -- ----------- ------------ Increase (Decrease) in Net Assets from Operations 331,629 404,866 ----------- ------------ Distributions to Shareholders from Net investment income--Universal Shares (a) (331,629) (404,866) Net investment income--Institutional Service Shares -- -- Net investment income--Investor Shares -- -- Net realized gain--Preferred Shares -- -- Net realized gain--Universal Shares -- -- Net realized gain--Institutional Service Shares -- -- Net realized gain--Institutional Shares -- -- Net realized gain--Investor Shares -- -- ----------- ------------ Total Distributions to Shareholders (331,629) (404,866) ----------- ------------ Capital Share Transactions Sale of shares--Universal Shares (a) 9,533,087 16,700,397 Sale of shares--Institutional Service Shares -- -- Sale of shares--Investor Shares -- -- Reinvestment of distributions--Universal Shares (a) 3,812 6,933 Reinvestment of distributions--Institutional Service Shares -- -- Reinvestment of distributions--Investor Shares -- -- Redemption of shares--Universal Shares (a) (8,467,776) (19,667,988) Redemption of shares--Institutional Service Shares -- -- Redemption of shares--Investor Shares -- -- ----------- ------------ Increase (Decrease) from Capital Transactions 1,069,123 (2,960,658) ----------- ------------ Increase (Decrease) in Net Assets 1,069,123 (2,960,658) ----------- ------------ Net Assets Beginning of Period 17,421,984 20,382,642 ----------- ------------ End of Period $18,491,107 $ 17,421,984 =========== ============ Share Transactions Sale of shares--Universal Shares (a) 9,533,087 16,700,396 Sale of shares--Institutional Service Shares -- -- Sale of shares--Investor Shares -- -- Reinvestment of distributions--Universal Shares (a) 3,812 6,933 Reinvestment of distributions--Institutional Service Shares -- -- Reinvestment of distributions--Investor Shares -- -- Redemption of shares--Universal Shares (a) (8,467,776) (19,667,988) Redemption of shares--Institutional Service Shares -- -- Redemption of shares--Investor Shares -- -- ----------- ------------ Increase (Decrease) in Shares 1,069,123 (2,960,659) =========== ============ Undistributed (distributions in excess of) Net Investment Income $ 408 $ 408 ----------- ------------
(a)On February 24, 2005, Universal Shares of Daily Assets Treasury Fund ceased operations. See Notes to Financial Statements. 9 MONARCH FUNDS - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS
DAILY ASSETS GOVERNMENT FUND ---------------------------------- SIX MONTHS ENDED YEAR ENDED FEBRUARY 28, 2006 AUGUST 31, 2005 ----------------- ---------------- Operations Net investment income (loss) $ 28,654,608 $ 32,720,030 Net realized gain (loss) on investments -- -- --------------- ---------------- Increase (Decrease) in Net Assets from Operations 28,654,608 32,720,030 --------------- ---------------- Distributions to Shareholders from Net investment income--Preferred Shares (24,083,620) (27,064,461) Net investment income--Universal Shares (852,221) (1,725,437) Net investment income--Institutional Service Shares (1,064,952) (1,476,445) Net investment income--Institutional Shares (1,700,038) (1,233,938) Net investment income--Investor Shares (953,776) (1,219,599) Net investment income--B Shares -- -- Net investment income--C Shares -- -- Net realized gain--Universal Shares -- (149) --------------- ---------------- Total Distributions to Shareholders (28,654,607) (32,720,029) --------------- ---------------- Capital Share Transactions Sale of shares--Preferred Shares 8,083,415,686 13,457,887,243 Sale of shares--Universal Shares 164,384,137 495,568,211 Sale of shares--Institutional Service Shares 205,579,042 423,309,543 Sale of shares--Institutional Shares 432,038,021 628,209,101 Sale of shares--Investor Shares 516,713,071 1,101,652,154 Sale of shares--B Shares -- -- Sale of shares--C Shares -- -- Reinvestment of distributions--Preferred Shares 23,874,577 27,064,464 Reinvestment of distributions--Universal Shares 700,283 1,279,994 Reinvestment of distributions--Institutional Service Shares 820,921 1,200,078 Reinvestment of distributions--Institutional Shares 1,100,813 833,140 Reinvestment of distributions--Investor Shares 769,019 1,214,233 Reinvestment of distributions--B Shares -- -- Reinvestment of distributions--C Shares -- -- Redemption of shares--Preferred Shares (8,021,861,592) (13,487,020,990) Redemption of shares--Universal Shares (137,608,544) (585,949,775) Redemption of shares--Institutional Service Shares (222,604,933) (424,231,220) Redemption of shares--Institutional Shares (391,278,643) (645,775,244) Redemption of shares--Investor Shares (527,000,058) (1,104,334,690) Redemption of shares--B Shares -- -- Redemption of shares--C Shares -- -- --------------- ---------------- Increase (Decrease) Decrease from Capital Transactions 129,041,800 (109,093,758) --------------- ---------------- Increase (Decrease) in Net Assets 129,041,801 (109,093,757) --------------- ---------------- Net Assets Beginning of Period 220,917,872 330,011,629 --------------- ---------------- End of Period $ 349,959,673 $ 220,917,872 =============== ================ Undistributed (distributions in excess of) Net Investment Income $ (28,514) $ (28,515) --------------- ----------------
DAILY ASSETS CASH FUND --------------------------------- SIX MONTHS ENDED YEAR ENDED FEBRUARY 28, 2006 AUGUST 31, 2005 ----------------- --------------- Operations Net investment income (loss) $ 7,092,815 $ 7,210,676 Net realized gain (loss) on investments (687) (1,944) --------------- --------------- Increase (Decrease) in Net Assets from Operations 7,092,128 7,208,732 --------------- --------------- Distributions to Shareholders from Net investment income--Preferred Shares (1,019,965) (589,768) Net investment income--Universal Shares (1,193,306) (776,984) Net investment income--Institutional Service Shares (444,871) (634,583) Net investment income--Institutional Shares (944,128) (1,240,847) Net investment income--Investor Shares (3,489,334) (3,967,761) Net investment income--B Shares (471) (347) Net investment income--C Shares (739) (387) Net realized gain--Universal Shares -- -- --------------- --------------- Total Distributions to Shareholders (7,092,814) (7,210,677) --------------- --------------- Capital Share Transactions Sale of shares--Preferred Shares 278,658,602 235,742,194 Sale of shares--Universal Shares 352,544,120 556,966,206 Sale of shares--Institutional Service Shares 157,256,435 317,798,401 Sale of shares--Institutional Shares 452,899,529 972,584,819 Sale of shares--Investor Shares 2,185,716,580 5,641,350,655 Sale of shares--B Shares 83,851 91,308 Sale of shares--C Shares 172,668 100,722 Reinvestment of distributions--Preferred Shares 66,171 192,222 Reinvestment of distributions--Universal Shares 940,382 578,709 Reinvestment of distributions--Institutional Service Shares 374,515 614,454 Reinvestment of distributions--Institutional Shares 629,993 1,123,763 Reinvestment of distributions--Investor Shares 2,621,265 3,613,494 Reinvestment of distributions--B Shares 402 348 Reinvestment of distributions--C Shares 585 387 Redemption of shares--Preferred Shares (272,954,039) (215,354,337) Redemption of shares--Universal Shares (339,612,473) (554,163,851) Redemption of shares--Institutional Service Shares (165,152,396) (317,698,752) Redemption of shares--Institutional Shares (445,443,192) (1,013,042,784) Redemption of shares--Investor Shares (2,240,048,611) (5,802,886,123) Redemption of shares--B Shares (83,889) (61,571) Redemption of shares--C Shares (140,238) (64,898) --------------- --------------- Increase (Decrease) Decrease from Capital Transactions (31,469,740) (172,514,634) --------------- --------------- Increase (Decrease) in Net Assets (31,470,426) (172,516,579) --------------- --------------- Net Assets Beginning of Period 399,614,711 572,131,290 --------------- --------------- End of Period $ 368,144,285 $ 399,614,711 =============== =============== Undistributed (distributions in excess of) Net Investment Income $ (559) $ (560) --------------- ---------------
See Notes to Financial Statements. 10 MONARCH FUNDS - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS
DAILY ASSETS DAILY ASSETS GOVERNMENT FUND CASH FUND --------------------------------- -------------------------------- SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED FEBRUARY 28, 2006 AUGUST 31, 2005 FEBRUARY 28, 2006 AUGUST 31, 2005 ----------------- --------------- ----------------- --------------- Share Transactions Sale of shares--Preferred Shares 8,083,415,687 13,457,887,242 278,658,601 235,742,195 Sale of shares--Universal Shares 164,384,137 495,568,212 352,544,122 556,966,206 Sale of shares--Institutional Service Shares 205,579,042 423,309,542 157,256,436 317,798,401 Sale of shares--Institutional Shares 432,038,021 628,209,101 452,899,529 972,584,819 Sale of shares--Investor Shares 516,713,071 1,101,652,156 2,185,716,581 5,641,350,654 Sale of shares--B Shares -- -- 83,852 91,307 Sale of shares--C Shares -- -- 172,667 100,722 Reinvestment of distributions--Preferred Shares 23,874,577 27,064,464 66,171 192,222 Reinvestment of distributions--Universal Shares 700,283 1,279,993 940,382 578,709 Reinvestment of distributions--Institutional Service Shares 820,921 1,200,078 374,515 614,454 Reinvestment of distributions--Institutional Shares 1,100,813 833,140 629,993 1,123,763 Reinvestment of distributions--Investor Shares 769,019 1,214,233 2,621,265 3,613,494 Reinvestment of distributions--B Shares -- -- 402 348 Reinvestment of distributions--C Shares -- -- 585 387 Redemption of shares--Preferred Shares (8,021,861,592) (13,487,020,990) (272,954,039) (215,354,760) Redemption of shares--Universal Shares (137,608,544) (585,949,775) (339,612,473) (554,178,721) Redemption of shares--Institutional Service Shares (222,604,933) (424,231,220) (165,152,396) (317,703,982) Redemption of shares--Institutional Shares (391,278,643) (645,775,244) (445,443,192) (1,013,055,861) Redemption of shares--Investor Shares (527,000,058) (1,104,334,690) (2,240,048,611) (5,802,929,163) Redemption of shares--B Shares -- -- (83,889) (61,571) Redemption of shares--C Shares -- -- (140,238) (64,898) -------------- --------------- -------------- -------------- Increase (Decrease) in Shares 129,041,801 (109,093,758) (31,469,737) (172,591,275) ============== =============== ============== ==============
See Notes to Financial Statements. 11 MONARCH FUNDS - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS These financial highlights reflect selected data for an outstanding share of each class of each Fund during the periods indicated.
SELECTED DATA FOR A SINGLE SHARE Net ------------------------------------------------------------------------- Assets at Beginning Net Distributions Distributions Ending End of Year Ended Net Asset Net Realized from Net from Net Net Asset Period August 31, Value Per Investment Gain on Investment Realized Value Total (000's (except as noted) Share Income Investments Income Gains Per Share Return/(b)/ Omitted) - ----------------- --------- ---------- ----------- ------------- ------------- --------- ---------- --------- - - - - - - - - - - DAILY ASSETS TREASURY FUND Institutional Service Shares/(d)/ - ------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2006 $1.00 $0.02/(e)/ -- $(0.02) -- $1.00 1.76% $ 13,979 2005 1.00 0.02/(e)/ --/(f)/ (0.02) -- 1.00 2.03% 11,876 2004 1.00 0.01 -- (0.01) -- 1.00 0.59% 15,552 2003 1.00 0.01 -- (0.01) -- 1.00 0.84% 35,074 2002 1.00 0.02 --/(f)/ (0.02) --/(f)/ 1.00 1.57% 20,068 2001 1.00 0.05 -- (0.05) -- 1.00 4.92% 50,554 Investor Shares - ------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2006 1.00 0.02/(e)/ -- (0.02) -- 1.00 1.56% 67,371 2005 1.00 0.02/(e)/ --/(f)/ (0.02) -- 1.00 1.64% 46,946 2004 1.00 --/(f)/ -- --/(f)/ -- 1.00 0.20% 56,217 2003 1.00 --/(f)/ -- --/(f)/ -- 1.00 0.45% 96,827 2002 1.00 0.01 --/(f)/ (0.01) --/(f)/ 1.00 1.17% 133,758 2001 1.00 0.04 -- (0.04) -- 1.00 4.52% 233,138 DAILY ASSETS GOVERNMENT OBLIGATIONS FUND Universal Shares/(g)/ - ------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2006 1.00 0.02/(e)/ -- (0.02) -- 1.00 1.87% 18,491 2005 1.00 0.02/(e)/ -- (0.02) -- 1.00 2.27% 17,422 2004 1.00 0.01 --/(f)/ (0.01) -- 1.00 0.91% 20,383 2003 1.00 0.01 -- (0.01) -- 1.00 1.18% 24,752 2002 1.00 0.02 -- (0.02) -- 1.00 1.97% 25,760 2001 1.00 0.05 -- (0.05) -- 1.00 5.26% 29,100
RATIOS/SUPPLEMENTAL DATA - -------------------------------- Ratios to Average Net Assets/(a)/ - -------------------------------- Net Net Gross Investment Expenses Expenses/(c)/ Income - --------------------------------- - ---------------------------------- 0.45% 0.83% 3.54% 0.45% 0.69% 1.92% 0.45% 0.56% 0.57% 0.45% 0.67% 0.84% 0.45% 0.62% 1.68% 0.45% 0.61% 4.57% - ---------------------------------- 0.84% 1.01% 3.15% 0.84% 0.97% 1.61% 0.84% 0.89% 0.18% 0.84% 0.90% 0.45% 0.85% 0.87% 1.22% 0.84% 0.84% 4.52% - ---------------------------------- 0.20% 0.82% 3.77% 0.20% 0.75% 2.22% 0.20% 0.70% 0.86% 0.20% 0.48% 1.14% 0.20% 0.71% 1.97% 0.20% 0.57% 5.24%
(a)Annualized for periods less than one year. (b)Not annualized for periods less than one year. (c)Reflects the expense ratio excluding any waivers and/or reimbursements. (d)On April 23, 2003, Institutional Shares were renamed Institutional Service Shares. (e)Calculated based on average shares outstanding during the period. (f)Less than $0.01 per share. (g)On July 22, 2003, Institutional Shares were redesignated as Universal Shares. See Notes to Financial Statements. 12 MONARCH FUNDS - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS These financial highlights reflect selected data for an outstanding share of each class of each Fund during the periods indicated.
SELECTED DATA FOR A SINGLE SHARE Net ------------------------------------------------------------------------- Assets at Beginning Net Distributions Distributions Ending End of Year Ended Net Asset Net Realized from Net from Net Net Asset Period August 31, Value Per Investment Gain on Investment Realized Value Total (000's (except as noted) Share Income Investments Income Gains Per Share Return/(b)/ Omitted) - ----------------- --------- ---------- ----------- ------------- ------------- --------- ---------- --------- - - - - - - - - - - DAILY ASSETS GOVERNMENT FUND Preferred Shares - ------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2006 $1.00 $0.02/(d)/ -- $(0.02) -- $1.00 2.01% $106,745 2005 1.00 0.02/(d)/ -- (0.02) -- 1.00 2.52% 21,316 2004 1.00 0.01 --/(f)/ (0.01) -- 1.00 1.04% 23,386 2003 1.00 0.01 -- (0.01) -- 1.00 1.40% 11,549 2002 1.00 0.02 --/(f)/ (0.02) --/(f)/ 1.00 2.25% 12,041 2001/(e)/ 1.00 --/(f)/ -- --/(f)/ -- 1.00 0.22% 8 Universal Shares - ------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2006 1.00 0.02/(d)/ -- (0.02) -- 1.00 1.97% 52,255 2005 1.00 0.02/(d)/ -- (0.02) -- 1.00 2.43% 24,779 2004 1.00 0.01 --/(f)/ (0.01) -- 1.00 0.96% 113,881 2003 1.00 0.01 -- (0.01) -- 1.00 1.29% 114,173 2002 1.00 0.02 --/(f)/ (0.02) --/(f)/ 1.00 2.17% 81,426 2001 1.00 0.05 -- (0.05) -- 1.00 5.34% 164,500 Institutional Service Shares - ------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2006 1.00 0.02/(d)/ -- (0.02) -- 1.00 1.84% 39,215 2005 1.00 0.02/(d)/ -- (0.02) -- 1.00 2.18% 55,420 2004 1.00 --/(f)/ --/(f)/ --/(f)/ -- 1.00 0.71% 55,142 2003/(e)/ 1.00 --/(f)/ -- --/(f)/ -- 1.00 0.16% 76,273 Institutional Shares - ------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2006 1.00 0.02/(d)/ -- (0.02) -- 1.00 1.78% 98,703 2005 1.00 0.02/(d)/ -- (0.02) -- 1.00 2.06% 56,843 2004 1.00 0.01 --/(f)/ (0.01) -- 1.00 0.59% 73,575 2003 1.00 0.01 -- (0.01) -- 1.00 0.91% 90,740 2002 1.00 0.02 --/(f)/ (0.02) --/(f)/ 1.00 1.80% 117,476 2001 1.00 0.05 -- (0.05) -- 1.00 4.95% 198,324 Investor Shares - ------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2006 1.00 0.02/(d)/ -- (0.02) -- 1.00 1.65% 53,042 2005 1.00 0.02/(d)/ -- (0.02) -- 1.00 1.78% 62,560 2004 1.00 0.01 --/(f)/ (0.01) -- 1.00 0.32% 64,028 2003 1.00 0.01 -- (0.01) -- 1.00 0.64% 47,383 2002 1.00 0.02 --/(f)/ (0.02) --/(f)/ 1.00 1.52% 58,397 2001 1.00 0.05 -- (0.05) -- 1.00 4.68% 61,546
RATIOS/SUPPLEMENTAL DATA - -------------------------------- Ratios to Average Net Assets/(a)/ - -------------------------------- Net Net Gross Investment Expenses Expenses/(c)/ Income - --------------------------------- - ---------------------------------- 0.12% 0.18% 3.91% 0.12% 0.18% 2.56% 0.12% 0.18% 1.06% 0.11% 0.25% 1.05% 0.12% 0.22% 2.19% 0.12% 97.77% 3.64% - ---------------------------------- 0.20% 0.28% 3.97% 0.20% 0.25% 2.12% 0.20% 0.26% 0.95% 0.20% 0.28% 1.26% 0.21% 0.25% 2.17% 0.20% 0.23% 5.29% - ---------------------------------- 0.45% 0.51% 3.72% 0.45% 0.50% 2.10% 0.45% 0.51% 0.69% 0.45% 0.58% 0.70% - ---------------------------------- 0.57% 0.61% 3.62% 0.57% 0.61% 2.05% 0.57% 0.62% 0.58% 0.57% 0.63% 0.92% 0.57% 0.59% 2.05% 0.57% 0.58% 4.80% - ---------------------------------- 0.84% 0.88% 3.31% 0.84% 0.87% 1.74% 0.84% 0.86% 0.32% 0.84% 0.89% 0.63% 0.85% 0.85% 1.43% 0.84% 0.84% 4.51%
(a)Annualized for periods less than one year. (b)Not annualized for periods less than one year. (c)Reflects the expense ratio excluding any waivers and/or reimbursements. (d)Calculated based on average shares outstanding during the period. (e)See Note 1 for dates of commencement of operations. (f)Less than $0.01 per share. See Notes to Financial Statements. 13 MONARCH FUNDS - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS These financial highlights reflect selected data for an outstanding share of each class of each Fund during the periods indicated.
SELECTED DATA FOR A SINGLE SHARE Net --------------------------------------------------------------------------- Assets at Beginning Net Distributions Distributions Ending End of Year Ended Net Asset Net Realized from Net from Net Net Asset Period August 31, Value Per Investment Gain on Investment Realized Value Total (000's (except as noted) Share Income Investments Income Gains Per Share Return/(b)/ Omitted) - ----------------- --------- ---------- ----------- ------------- ------------- --------- ---------- --------- - - - - - - - - - - DAILY ASSETS CASH FUND Preferred Shares - --------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2006 $1.00 $0.02/(d)/ --/(f)/ $(0.02) -- $1.00 2.00% $ 45,517 2005 1.00 0.03/(d)/ $(0.01) (0.02) -- 1.00 2.49% 39,746 2004 1.00 0.01 --/(f)/ (0.01) -- 1.00 1.04% 19,166 2003 1.00 0.01 -- (0.01) -- 1.00 1.37% 2,979 2002 1.00 0.02 -- (0.02) -- 1.00 2.21% 13,095 2001/(e)/ 1.00 --/(f)/ -- --/(e)/ -- 1.00 0.22% 8 Universal Shares - --------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2006 1.00 0.02/(d)/ --/(f)/ (0.02) -- 1.00 1.96% 53,145 2005 1.00 0.02/(d)/ --/(f)/ (0.02) -- 1.00 2.41% 39,274 2004 1.00 0.01 --/(f)/ (0.01) -- 1.00 0.96% 35,892 2003 1.00 0.01 -- (0.01) -- 1.00 1.29% 104,842 2002 1.00 0.02 -- (0.02) -- 1.00 2.12% 46,833 2001 1.00 0.05 -- (0.05) -- 1.00 5.49% 37,236 Institutional Service Shares - --------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2006 1.00 0.02/(d)/ --/(f)/ (0.02) -- 1.00 1.83% 19,616 2005 1.00 0.02/(d)/ --/(f)/ (0.02) -- 1.00 2.15% 27,137 2004 1.00 0.01 --/(f)/ (0.01) -- 1.00 0.71% 26,423 2003/(e)/ 1.00 --/(f)/ -- --/(f)/ -- 1.00 0.18% 36,876 Institutional Shares - --------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2006 1.00 0.02/(d)/ --/(f)/ (0.02) -- 1.00 1.77% 64,736 2005 1.00 0.02/(d)/ --/(f)/ (0.02) -- 1.00 2.03% 56,650 2004 1.00 0.01 --/(f)/ (0.01) -- 1.00 0.59% 95,985 2003 1.00 0.01 -- (0.01) -- 1.00 0.92% 92,186 2002 1.00 0.02 -- (0.02) -- 1.00 1.75% 347,469 2001 1.00 0.05 -- (0.05) -- 1.00 5.11% 736,555 Investor Shares - --------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2006 1.00 0.02/(d)/ --/(f)/ (0.02) -- 1.00 1.64% 185,031 2005 1.00 0.02/(d)/ --/(f)/ (0.02) -- 1.00 1.76% 236,742 2004 1.00 --/(f)/ --/(f)/ --/(f)/ -- 1.00 0.32% 394,665 2003 1.00 0.01 -- (0.01) -- 1.00 0.64% 303,389 2002 1.00 0.01 -- (0.01) -- 1.00 1.48% 646,285 2001 1.00 0.05 -- (0.05) -- 1.00 4.85% 791,138 B Shares - --------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2006 1.00 0.01/(d)/ --/(f)/ (0.01) -- 1.00 1.23% 30 2005/(e)/ 1.00 0.01/(d)/ --/(f)/ (0.01) -- 1.00 0.92% 30 C Shares - --------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2006 1.00 0.01/(d)/ --/(f)/ (0.01) -- 1.00 1.23% 69 2005/(e)/ 1.00 0.01/(d)/ --/(f)/ (0.01) -- 1.00 0.93% 36
RATIOS/SUPPLEMENTAL DATA - -------------------------------- Ratios to Average Net Assets/(a)/ - -------------------------------- Net Net Gross Investment Expenses Expenses/(c)/ Income - --------------------------------- - ---------------------------------- 0.12% 0.25% 4.08% 0.12% 0.32% 2.64% 0.12% 0.31% 1.06% 0.12% 0.30% 1.39% 0.12% 0.20% 1.88% 0.12% 91.14% 3.76% - ---------------------------------- 0.20% 0.29% 3.95% 0.20% 0.34% 2.32% 0.20% 0.27% 0.94% 0.20% 0.28% 1.24% 0.21% 0.25% 2.03% 0.20% 0.24% 5.68% - ---------------------------------- 0.45% 0.57% 3.65% 0.45% 0.60% 2.04% 0.45% 0.54% 0.71% 0.45% 0.58% 0.76% - ---------------------------------- 0.57% 0.67% 3.58% 0.57% 0.68% 1.97% 0.57% 0.63% 0.59% 0.57% 0.61% 1.01% 0.57% 0.58% 1.84% 0.57% 0.57% 5.07% - ---------------------------------- 0.84% 0.88% 3.27% 0.84% 0.91% 1.71% 0.84% 0.87% 0.32% 0.84% 0.86% 0.68% 0.83% 0.83% 1.51% 0.82% 0.82% 4.78% - ---------------------------------- 1.65% 125.37% 2.44% 1.65% 161.82% 1.20% - ---------------------------------- 1.65% 76.02% 2.42% 1.64% 158.38% 1.23%
(a)Annualized for periods less than one year. (b)Not annualized for periods less than one year. (c)Reflects the expense ratio excluding any waivers and/or reimbursements. (d)Calculated based on average shares outstanding during the period. (e)See Note 1 for dates of commencement of operations. (f)Less than $0.01 per share. See Notes to Financial Statements. 14 MONARCH FUNDS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS February 28, 2006 NOTE 1. SUMMARY OF ORGANIZATION Monarch Funds (the "Trust") is a Massachusetts business trust registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "Act"). The Trust consists of four diversified investment portfolios listed below (each a "Fund" and collectively the "Funds"). The Funds are authorized under the Trust's Trust Instrument to issue an unlimited number of shares of beneficial interest without par value. The Funds and classes offered as of February 28, 2006, and the dates on which they commenced operations were as follows: COMMENCEMENT OF FUND SHARE CLASS OPERATIONS ------------------------ ------------------------ ------------------------ Daily Assets Treasury Institutional Service Fund Shares July 12, 1993 Investor Shares October 25, 1995 Daily Assets Government Obligations Universal Shares July 1, 1998 Daily Assets Government Fund Preferred Shares August 10, 2001 Universal Shares October 29, 1992 Institutional Service Shares June 9, 2003 Institutional Shares July 15, 1993 Investor Shares December 30, 1999 Daily Assets Cash Fund Preferred Shares August 10, 2001 Universal Shares December 1, 1992 Institutional Service Shares June 9, 2003 Institutional Shares July 15, 1993 Investor Shares June 16, 1995 B Shares November 22, 2004 C Shares November 17, 2004 Daily Assets Treasury Fund Universal Shares ceased operations on February 24, 2005. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES These financial statements are prepared in accordance with accounting principles generally accepted in the United States, which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increase and decrease in net assets during the fiscal period. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Funds: SECURITY VALUATION Generally, each Fund determines its net asset value per share as of 4:00 p.m., Eastern time, on each Fund business day, utilizing the amortized cost method pursuant to Rule 2a-7 under the Act. Under this method, all investments purchased at a discount or premium are valued by accreting or amortizing, respectively, the difference between the original purchase price and the maturity value of the investment over the period to the investment's maturity. REPURCHASE AGREEMENTS Each Fund may invest in repurchase agreements. Each Fund, through its custodian, receives delivery of the underlying collateral, whose market value always exceeds or equals the repurchase price plus expected transaction costs. In the case of a tri-party agreement, the collateral is held by an agent bank. The Funds' investment adviser is responsible for determining the value of the underlying collateral. In the event of default, a Fund may have difficulties with the disposition of any such securities held as collateral. EXPENSE ALLOCATION The Trust is comprised of four active series, and it accounts separately for the assets, liabilities and operations of each series. Expenses that are directly attributable to more than one series are allocated among the respective series in proportion to each series' average daily net assets. Each share of each class of a Fund represents an undivided, proportionate interest in the Fund. The Funds' class-specific expenses include administration fees, transfer agency fees and certain expenses determined by the Trust's Board. Institutional Service Shares, Institutional Shares, Investor Shares, B Shares and C Shares incur shareholder servicing fees and Investor Shares, B Shares and C Shares incur distribution fees. In addition, there are differences between the classes of shares with respect to the minimum investment required. SECURITIES TRANSACTIONS, INTEREST INCOME AND REALIZED GAIN AND LOSS Securities transactions are recorded on trade date. Interest income is accrued as earned and realized gain and loss on investments sold are recorded on the basis of identified cost. 15 MONARCH FUNDS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS February 28, 2006 FEDERAL TAXES Each Fund intends to continue to qualify each year as a regulated investment company and distribute all its net investment income. In addition, by distributing in each calendar year substantially all its net investment income, capital gain and certain other amounts, each Fund will not be subject to a federal excise tax. Therefore, no federal income or excise tax provision is required. DISTRIBUTIONS TO SHAREHOLDERS Distributions to shareholders of net investment income are declared daily and paid monthly. Net capital gain, if any, is distributed to shareholders at least annually. Distributions are based on amounts calculated in accordance with applicable income tax regulations, which may differ from accounting principles generally accepted in the United States. These differences are due primarily to differing treatments of income and gain on various investment securities held by each Fund, timing differences and differing characterizations of distributions made by the Fund. NOTE 3. INVESTMENT ADVISORY AND OTHER SERVICES INVESTMENT ADVISER Monarch Investment Advisors, LLC, formerly known as Forum Investment Advisors, LLC (the "Adviser"), is the investment adviser of each Fund. The Adviser receives an advisory fee from the Daily Assets Treasury Fund, Daily Assets Government Fund, and Daily Assets Cash Fund based upon the total average daily net assets of the Funds ("Total Fund Assets") that is calculated on a cumulative basis at the following annual rates: 0.06% for the first $200 million of Total Fund Assets, 0.04% of the next $300 million of Total Fund Assets and 0.03% of the remaining Total Fund Assets. The Adviser receives an advisory fee from Daily Assets Government Obligations Fund at an annual rate of 0.05% of the average daily net assets of the Fund. ADMINISTRATION AND OTHER SERVICES Citigroup Fund Services, LLC ("Citigroup"), provides certain administration, portfolio accounting and transfer agency services to the Fund. SHAREHOLDER SERVICES The Funds pay (other than Daily Assets Government Obligations Fund) a shareholder servicing fee at an annual rate of 0.20% of the average daily net assets attributable to Institutional Service Shares, Institutional Shares and Investor Shares of each Fund and 0.25% of the average daily net assets attributable to B Shares and C Shares of Daily Assets Cash Fund. These fees are paid to various financial institutions that provide shareholder services. DISTRIBUTOR Foreside Fund Services, LLC is the Trust's distributor (the "Distributor"). Under a Distribution Plan adopted pursuant to Rule 12b-1 under the Act, the Trust pays the Distributor a distribution fee at an annual rate of 0.25% of the average daily net assets of Investor Shares of each Fund and 0.75% of the average daily net assets of B Shares and C Shares of Daily Assets Cash Fund. The Distributor pays some or all of these fees to various financial institutions that provide distribution services for Investor Shares. The plan obligates the Funds to pay the Distributor as compensation for its services. The Distributor is not affiliated with Citigroup or its affiliated companies. Under a Compliance Services Agreement with the Trust, the Distributor provides a Chief Compliance Officer to the Trust as well as certain additional compliance support functions. TRUSTEES AND OFFICERS Certain officers of the Trust are directors, officers or employees of the aforementioned companies. NOTE 4. WAIVER OF FEES/REIMBURSEMENT OF EXPENSES The Adviser and Citigroup voluntarily waived a portion of their fees and assumed certain expenses of the Funds. For the period ended February 28, 2006, fees waived and expenses reimbursed for each of the Funds were as follows:
DAILY ASSETS DAILY ASSETS GOVERNMENT DAILY ASSETS DAILY ASSETS TREASURY FUND OBLIGATIONS FUND GOVERNMENT FUND CASH FUND ------------- ---------------- --------------- ------------ Advisory $ -- $ 4,401 $ -- $ -- Administration 34,893 9,021 395,069 127,064 Shareholder Service 403 -- -- 3,176 Transfer Agency 10,014 11,771 -- 6,407 Portfolio Accounting 17,085 19,603 -- -- Reimbursed Expenses by Citigroup 8,462 8,993 -- 47,555 ------- ------- -------- -------- Total $70,857 $53,789 $395,069 $184,202 ======= ======= ======== ========
16 MONARCH FUNDS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS February 28, 2006 NOTE 5. FEDERAL INCOME TAX AND INVESTMENT TRANSACTIONS As of August 31, 2005, distributable earnings (accumulated losses) on a tax basis were as follows:
UNDISTRIBUTED CAPITAL ORDINARY AND OTHER INCOME LOSSES TOTAL ------------- --------- -------- Daily Assets Treasury Fund $ 6,458 $ -- $ 6,458 Daily Assets Government Obligations Fund 44,813 (24,221) 20,592 Daily Assets Government Fund 14,094 -- 14,094 Daily Assets Cash Fund 178,603 (13,585) 165,018
The capital loss carryovers available to offset future gains, as of August 31, 2005, were as follows: Daily Assets Government Obligations Fund Expiring August 2006 $18,999 Expiring August 2007 986 Expiring August 2008 3,602 Expiring August 2009 632 Expiring August 2011 2 Daily Assets Cash Fund Expiring August 2010 232 Expiring August 2011 9,421 Expiring August 2012 1,655 Expiring August 2013 333
NOTE 6. PROXY RESULTS DAILY ASSETS GOVERNMENT FUND At the Special Meeting of Shareholders, held on December 7, 2005, shares were voted as summarized below on the following proposal presented to Shareholders: To approve the new investment advisory agreement between the Trust and Monarch Investment Advisors, LLC with respect to Daily Assets Government Fund.
FOR AGAINST ABSTAIN ------------- ------- --------- 1,963,862,250 588,897 7,307,729
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND At the Special Meeting of Shareholders, held on December 7, 2005, shares were voted as summarized below on the following proposal presented to Shareholders: To approve the new investment advisory agreement between the Trust and Monarch Investment Advisors, LLC with respect to Daily Assets Government Obligations Fund.
FOR AGAINST ABSTAIN ---------- ------- ------- 17,631,209 0 0
DAILY ASSETS CASH FUND At the Special Meeting of Shareholders, held on December 21, 2005, shares were voted as summarized below on the following proposal presented to Shareholders: To approve the new investment advisory agreement between the Trust and Monarch Investment Advisors, LLC with respect to Daily Assets Cash Fund.
FOR AGAINST ABSTAIN ----------- ------- ---------- 175,960,693 142,346 11,748,979
DAILY ASSETS TREASURY FUND At the Special Meeting of Shareholders, held on December 21, 2005, shares were voted as summarized below on the following proposal presented to Shareholders: To approve the new investment advisory agreement between the Trust and Monarch Investment Advisors, LLC with respect to Daily Assets Treasury Fund.
FOR AGAINST ABSTAIN ---------- ------- --------- 32,198,795 0 4,623,925
NOTE 7. PROXY VOTING GUIDELINES A description of the policies and procedures the Funds use to determine how to vote as a shareholder of the companies whose securities are held in the Funds' portfolio is available, without charge and upon request, by calling 800-754-8757. 17 MONARCH FUNDS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS February 28, 2006 This information is also available from the EDGAR database on the SEC's website at www.sec.gov. For the twelve months ended June 30, the Funds did not own any securities for which a shareholder meeting was called and voted on. NOTE 8. AVAILABILITY OF QUARTERLY PORTFOLIO SCHEDULE The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds' Form N-Q are available on the SEC's website at www.sec.gov or may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330. NOTE 9. SHAREHOLDER EXPENSES EXAMPLE As a shareholder of a Fund, you incur two types of costs: (1) transactions costs, including contingent deferred sales charges (loads); and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The following example is based on $1,000 invested at the beginning of the period and held for the entire period from September 1, 2005, through February 28, 2006. ACTUAL EXPENSES - The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during the period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES - The second line of the table below provides information about hypothetical account values and hypothetical expenses based on a Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not a Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing cost of investing in a Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as contingent deferred sales charges (loads). Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. 18 MONARCH FUNDS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS February 28, 2006
BEGINNING ENDING EXPENSES ANNUALIZED ACCOUNT VALUE ACCOUNT VALUE PAID DURING EXPENSE SEPTEMBER 1, 2005 FEBRUARY 28, 2006 PERIOD* RATIO ----------------- ----------------- ----------- ---------- DAILY ASSETS TREASURY FUND INSTITUTIONAL SERVICE SHARES Actual Return $1,000.00 $1,017.61 $2.25 0.45% Hypothetical Return $1,000.00 $1,022.56 $2.26 0.45% INVESTOR SHARES Actual Return $1,000.00 $1,015.64 $4.20 0.84% Hypothetical Return $1,000.00 $1,020.63 $4.21 0.84% DAILY ASSETS GOVERNMENT OBLIGATIONS FUND UNIVERSAL SHARES Actual Return $1,000.00 $1,018.74 $1.00 0.20% Hypothetical Return $1,000.00 $1,023.80 $1.00 0.20% DAILY ASSETS GOVERNMENT FUND PREFERRED SHARES Actual Return $1,000.00 $1,020.08 $0.60 0.12% Hypothetical Return $1,000.00 $1,024.20 $0.60 0.12% UNIVERSAL SHARES Actual Return $1,000.00 $1,019.66 $1.00 0.20% Hypothetical Return $1,000.00 $1,023.80 $1.00 0.20% INSTITUTIONAL SERVICE SHARES Actual Return $1,000.00 $1,018.42 $2.25 0.45% Hypothetical Return $1,000.00 $1,022.56 $2.26 0.45% INSTITUTIONAL SHARES Actual Return $1,000.00 $1,017.82 $2.85 0.57% Hypothetical Return $1,000.00 $1,021.97 $2.86 0.57% INVESTOR SHARES Actual Return $1,000.00 $1,016.46 $4.20 0.84% Hypothetical Return $1,000.00 $1,020.63 $4.21 0.84% DAILY ASSETS CASH FUND PREFERRED SHARES Actual Return $1,000.00 $1,020.01 $0.60 0.12% Hypothetical Return $1,000.00 $1,024.20 $0.60 0.12% UNIVERSAL SHARES Actual Return $1,000.00 $1,019.61 $1.00 0.20% Hypothetical Return $1,000.00 $1,023.80 $1.00 0.20% INSTITUTIONAL SERVICE SHARES Actual Return $1,000.00 $1,018.35 $2.25 0.45% Hypothetical Return $1,000.00 $1,022.56 $2.26 0.45% INSTITUTIONAL SHARES Actual Return $1,000.00 $1,017.75 $2.85 0.57% Hypothetical Return $1,000.00 $1,021.97 $2.86 0.57% INVESTOR SHARES Actual Return $1,000.00 $1,016.39 $4.20 0.84% Hypothetical Return $1,000.00 $1,020.63 $4.21 0.84% B SHARES Actual Return $1,000.00 $1,012.35 $8.23 1.65% Hypothetical Return $1,000.00 $1,016.61 $8.25 1.65% C SHARES Actual Return $1,000.00 $1,012.34 $8.23 1.65% Hypothetical Return $1,000.00 $1,016.61 $8.25 1.65%
* Expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by the number of days in most recent fiscal half-year/365 (to reflect the half-year period). 19 [THIS PAGE INTENTIONALLY LEFT BLANK] MONARCH FUNDS DAILY ASSETS TREASURY FUND DAILY ASSETS GOVERNMENT OBLIGATIONS FUND DAILY ASSETS GOVERNMENT FUND DAILY ASSETS CASH FUND P.O. Box 446 Portland, Maine 04112 (800) 754-8757 FOR MORE INFORMATION This report is submitted for the general information of the shareholders of the Funds. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus, which includes information regarding the Funds' risks, objectives, fees and expenses, experience of its management, and other information. ITEM 2. CODE OF ETHICS. Not applicable. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS. Included as part of report to shareholders under Item 1. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Registrant does not accept nominees to the board of directors from shareholders. ITEM 11. CONTROLS AND PROCEDURES (a) The registrant's President and Treasurer have concluded that the registrant's disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940 (the "Act")) are effective, based on their evaluation of these disclosure controls and procedures required by Rule 30a-3(b) as of a date within 90 days of the filing date of this report. (b) There were no changes in the registrant's internal control over financial reporting (as defined in rule 30a-3(d) under the Act) that occurred during the registrant's last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a)(1) Not applicable. (a)(2) Certifications pursuant to Rule 30a-2(a) of the Investment Company Act of 1940 as amended, and Section 302 of the Sarbanes-Oxley Act of 2002 (Exhibit filed herewith). (a)(3) Not applicable. (b) Certifications pursuant to Rule 30a-2(b) of the Investment Company Act of 1940, as amended, and Section 906 of the Sarbanes-Oxley Act of 2002 (Exhibit filed herewith). SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Registrant Monarch Funds By /s/ Anthony R. Fischer ------------------------- Anthony R. Fischer, Principal Executive Officer Date April 26, 2006 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By /s/ Anthony R. Fischer ------------------------- Anthony R. Fischer, Principal Executive Officer Date April 26, 2006 By /s/ Jack J. Singer ------------------------- Jack J. Singer, Principal Financial Officer Date April 26, 2006 EX-31.CERT 2 dex31cert.txt CERTIFICATIONS PURSUANT TO SECTION 302 Monarch Funds I, Anthony R. Fischer, certify that: 1. I have reviewed this report on Form N-CSR of Monarch Funds; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and changes in net assets of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: April 26, 2006 /s/ Anthony R. Fischer --------------------------- Anthony R. Fischer Principal Executive Officer Monarch Funds I, Jack J. Singer, certify that: 1. I have reviewed this report on Form N-CSR of Monarch Funds; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and changes in net assets of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: April 26, 2006 /s/ Jack J. Singer --------------------------- Jack J. Singer Principal Financial Officer EX-32.906CERT 3 dex32906cert.txt CERTIFICATION PURSUANT TO SECTION 906 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) In connection with the attached Report of the Monarch Funds (the "Trust") on Form N-CSR to be filed with the Securities and Exchange Commission (the "Report"), each of the undersigned officers of the Trust does hereby certify that, to the best of such officer's knowledge: 1. The Report fully complies with the requirements of 13(a) or 15(d) of the Securities and Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust as of, and for, the periods presented in the Report. Dated: April 26, 2006 /s/ Anthony R. Fischer - ------------------------- Anthony R. Fischer Principal Executive Officer Dated: April 26, 2006 /s/ Jack J. Singer - ------------------------- Jack J. Singer Principal Financial Officer A signed original of this written statement required by Section 906 has been provided to the Trust and will be retained by the Trust and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----