-----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, Oo5zEXrnmr6zS0rTAM7jXC3pZDfNWcAuu2PkcXC4UXHhZ/VDoDJg//WusPRVEQg/ Q3zKl2goZvN5EtcvFYty9g== 0001193125-07-097496.txt : 20070501 0001193125-07-097496.hdr.sgml : 20070501 20070501140759 ACCESSION NUMBER: 0001193125-07-097496 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20070228 FILED AS OF DATE: 20070501 DATE AS OF CHANGE: 20070501 EFFECTIVENESS DATE: 20070501 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: 07805069 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 1, 2007 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 Jack J. Singer Monarch Investment Advisors, LLC 950 Coronado Drive Arcadia, CA 91007 626-447-4717 Date of fiscal year end: August 31 Date of reporting period: September 1, 2006 - February 28, 2007 ITEM 1. REPORT TO STOCKHOLDERS. FEBRUARY 28, 2007 (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, 2007 Dear Shareholders: Since our August 31, 2006 annual report, Federal Reserve monetary policy has remained unchanged. Based on the perception that the current level of short term interest rates has reached an approximate neutral level related to economic growth and inflation, the Federal Reserve has held the Fed Funds rate at 5 1/4% over the past several months. Currently, based on economic conditions and inflation expectations, it does not appear the central bankers will be changing the Fed Funds rate anytime soon. In light of this, our Portfolio Management team has maintained the slightly longer average life for our portfolios that we established in August of last year. We believe this stance is consistent with our view that short term rates will be stable through the first half of this year. 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, 2007. For the one-year and three-year periods ended as of February 28, 2007, the Daily Assets Government Fund's Preferred Shares held the number 1 spot out of 150 and the number 1 spot out of 124 funds within the Lipper Institutional U.S. Government Money Market category. During the same time frames, the Daily Assets Cash Fund's Preferred Shares held the 13 spot out of 358 funds and the number 12 spot out of 295 funds within the Lipper Institutional Money Market category.* Since inception of the Monarch Funds fifteen years ago, we have remained committed to maintaining your $1.00 per share price and providing competitive returns through the skilled and prudent portfolio management our shareholders have come to expect. We thank all of our investors and the financial intermediaries we serve 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 1 OUT OF 151 AND 1 OUT OF 126 WITHIN THE INSTITUTIONAL U.S. GOVERNMENT MONEY MARKET FUNDS CATEGORY FOR THE 1- AND 3-YEAR PERIODS AS OF MARCH 31, 2007. PREFERRED SHARES OF DAILY ASSETS CASH FUND RANKED 12 OUT OF 359 AND 15 OUT OF 297 WITHIN THE INSTITUTIONAL MONEY MARKET FUNDS CATEGORY FOR THE 1- AND 3-YEAR PERIODS AS OF MARCH 31, 2007. 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, 2007
FACE AMOUNT SECURITY DESCRIPTION RATE MATURITY VALUE - ----------- -------------------------------------------------------------------------- ---- -------- ----------- U.S. TREASURY BILLS # - 72.1% $50,000,000 U.S. Treasury Bill 5.07% 03/08/07 $49,950,951 ----------- REPURCHASE AGREEMENTS - 28.0% 7,385,000 Bank of America Securities, dated 02/28/07, to be repurchased at $7,386,063; collateralized by various U.S. Treasury Obligations 5.18 03/01/07 7,385,000 12,000,000 Deutsche Bank Securities, Inc. dated 02/28/07, to be repurchased at $12,001,757; collateralized by various U.S. Treasury Obligations 5.27 03/01/07 12,000,000 ----------- Total Repurchase Agreements 19,385,000 ----------- Total Investments at Amortized Cost* - 100.1% $69,335,951 Other Assets and Liabilities, Net - (0.1%) (57,913) ----------- NET ASSETS - 100.0% $69,278,038 =========== PORTFOLIO HOLDINGS % OF TOTAL INVESTMENTS U.S. Treasury Bill 72.0% Repurchase Agreements 28.0% # Rates shown are annualized yields at time of purchase. * Cost for federal income tax purposes is 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, 2007
FACE AMOUNT SECURITY DESCRIPTION RATE MATURITY VALUE - ----------- -------------------------------------------------------------------------- ---- -------- ----------- U.S. GOVERNMENT SECURITY - 94.0% FEDERAL HOME LOAN BANK - DISCOUNT NOTE # - 94.0% $18,040,000 FHLB 5.17% 03/14/07 $18,006,451 ----------- Total U.S. Government Securities 18,006,451 ----------- SHARES - ----------- MONEY MARKET FUND - 6.1% 1,170,000 Dreyfus Treasury Prime Cash Management Fund 4.84 1,170,000 ----------- Total Investments at Amortized Cost* - 100.1% $19,176,451 Other Assets and Liabilities, Net - (0.1%) (25,509) ----------- NET ASSETS - 100.0% $19,150,942 =========== PORTFOLIO HOLDINGS % OF TOTAL INVESTMENTS U.S. Government Security 93.9% Money Market Fund 6.1% # Rates shown are annualized yields at time of purchase. * Cost for federal income tax purposes is the same as for financial statement purposes.
See Notes to Financial Statements. 3 MONARCH FUNDS - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - DAILY ASSETS GOVERNMENT FUND February 28, 2007
FACE AMOUNT SECURITY DESCRIPTION RATE MATURITY VALUE - ------------ -------------------------------------------------------------------------- ---- -------- ------------ U.S. GOVERNMENT SECURITIES - (6.2%) SMALL BUSINESS ADMINISTRATION (+/-) - (6.2%) $ 1,100,866 Pool #502150 6.25% 02/25/18 $ 1,106,189 1,337,694 Pool #503152 5.88 11/25/20 1,337,694 880,211 Pool #503461 6.00 09/25/21 880,601 1,056,712 Pool #503553 5.88 11/25/21 1,057,389 985,396 Pool #503909 5.75 10/25/22 985,114 4,745,378 Pool #504366 5.63 02/25/24 4,735,785 2,617,905 Pool #504719 5.88 07/25/24 2,617,905 1,192,743 Pool #504727 5.88 09/25/24 1,192,743 874,952 Pool #504765 5.88 10/25/09 874,205 1,066,758 Pool #504769 5.88 10/25/24 1,066,758 53,966 Pool #505205 6.06 09/25/07 53,965 ------------ Total Small Business Administration 15,908,348 ------------ Total U.S. Government Securities 15,908,348 ------------ REPURCHASE AGREEMENTS - (93.4%) 3,326,000 Bank of America Securities, dated 02/28/07, to be repurchased at $3,326,485; collateralized by various U.S. Government Agency Obligations 5.25 03/01/07 3,326,000 115,000,000 Bear Stearns & Co., Inc., dated 02/28/07, to be repurchased at $115,033,733; collaterized by various U.S. Government Agency Obligations (+/-) 5.28 03/02/07 115,000,000 120,000,000 Deutsche Bank Securities, Inc., dated 02/05/07, to be repurchased at $120,438,333; collaterized by various U.S. Government Agency Obligations (+/-) 5.26 03/02/07 120,000,000 ------------ Total Repurchase Agreements 238,326,000 ------------ Total Investments at Amortized Cost* - 99.6% $254,234,348 Other Assets and Liabilities, Net - 0.4% 1,004,675 ------------ NET ASSETS - 100.0% $255,239,023 ============ PORTFOLIO HOLDINGS % OF TOTAL INVESTMENTS Repurchase Agreements 93.7% U.S. Government Securities 6.3% (+/-)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, 2007. * Cost for federal income tax purposes is the same as for financial statement purposes.
See Notes to Financial Statements. 4 MONARCH FUNDS - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - DAILY ASSETS CASH FUND February 28, 2007
FACE AMOUNT SECURITY DESCRIPTION RATE MATURITY VALUE - ----------- -------------------------------------------------------------------------- ---- -------- ------------ COMMERCIAL PAPER # - (24.1%) $25,000,000 Citigroup Funding, Inc. 5.29% 03/08/07 $ 24,974,455 25,000,000 CRC Funding, LLC^ 5.28 03/19/07 24,934,375 25,000,000 Govco, Inc.^ 5.28 03/15/07 24,948,958 25,000,000 Klio III Funding Corp.^ 5.29 03/19/07 24,934,188 25,000,000 UBS Finance Delaware, LLC 5.28 03/09/07 24,970,861 ------------ Total Commercial Paper 124,762,837 ------------ CORPORATE NOTES (+/-) - (37.2%) 17,980,000 AllState Life Global Funding Trust 5.42 05/25/07 17,984,175 15,000,000 American General Finance 5.47 08/16/07 15,010,236 4,200,000 American General Finance 5.41 03/23/07 4,200,196 25,000,000 American Honda Finance Corp.^ 5.39 11/15/07 25,010,483 6,000,000 ASIF Global Financing^ 5.40 05/03/07 6,000,953 20,000,000 Bank of America NA 5.32 05/15/07 20,000,000 25,000,000 Bear Stearns & Co., Inc. 5.47 08/17/07 25,016,941 6,391,000 CIT Group, Inc. 5.58 05/18/07 6,393,896 5,000,000 CIT Group, Inc. 5.43 08/24/07 5,002,295 20,000,000 Goldman Sachs Group LP 5.44 03/23/07 20,001,350 10,000,000 Merrill Lynch & Co., Inc. 5.48 10/19/07 10,010,428 5,000,000 Merrill Lynch & Co., Inc. 5.47 08/27/07 5,002,900 5,000,000 Merrill Lynch & Co., Inc. 5.34 07/27/07 5,000,000 20,000,000 Morgan Stanley 5.49 07/27/07 20,011,683 7,393,000 Wells Fargo & Co. 5.42 09/28/07 7,397,542 ------------ Total Corporate Notes 192,043,078 ------------ CERTIFICATE OF DEPOSIT (+/-) - (3.9%) 20,000,000 Credit Suisse New York 5.36 04/24/07 20,001,021 ------------ REPURCHASE AGREEMENTS - (30.8%) 24,443,000 Bank of America Securities, dated 02/28/07, to be repurchased at $24,446,565; collateralized by various U.S. Government Agency Obligations 5.25 03/01/07 24,443,000 45,000,000 Bear Stearns & Co., Inc., dated 02/05/07, to be repurchased at $45,165,000; collateralized by various U.S. Government Agency Obligations (+/-) 5.28 03/02/07 45,000,000 30,000,000 Bear Stearns & Co., Inc., dated 02/28/07, to be repurchased at $30,004,442; collateralized by various U.S. Government Agency Obligations 5.33 03/01/07 30,000,000 30,000,000 Deutsche Bank Securities, Inc., dated 02/28/07, to be repurchased at $30,004,442; collateralized by various U.S. Government Agency Obligations 5.33 03/01/07 30,000,000 29,870,000 Merrill Lynch & Co., Inc. dated 02/28/07, to be repurchased at $29,874,406; collateralized by various U.S. Government Agency Obligations 5.31 03/01/07 29,870,000 ------------ Total Repurchase Agreements 159,313,000 ------------ Total Investments at Amortized Cost* - (96.0%) $496,119,936 Other Assets and Liabilities, Net - (4.0%) 20,522,384 ------------ NET ASSETS - 100.0% $516,642,320 ============ PORTFOLIO HOLDINGS % OF TOTAL INVESTMENTS Corporate Notes 38.7% Repurchase Agreements 32.1% Commercial Paper 25.2% Certificate of Deposit 4.0% # 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, 2007. ^ Security exempt from registration under Rule 144A under the Securities Act of 1933. At the period end, the value of these securities amounted to $105,828,957 or 20.5% of net assets. * Cost for federal income tax purposes is the same as for financial statement purposes.
See Notes to Financial Statements. 5 MONARCH FUNDS - -------------------------------------------------------------------------------- STATEMENTS OF ASSETS AND LIABILITIES February 28, 2007
DAILY ASSETS DAILY ASSETS GOVERNMENT DAILY ASSETS DAILY ASSETS TREASURY OBLIGATIONS GOVERNMENT CASH FUND FUND FUND FUND ------------ ------------ ------------ ------------ Assets Investments: Securities at amortized cost $49,950,951 $19,176,451 $ 15,908,348 $336,806,936 Repurchase agreements 19,385,000 -- 238,326,000 159,313,000 Cash 40,287 54,104 40,187 41,135 Receivables: Dividends -- 3,389 -- -- Interest 2,820 -- 600,909 1,140,841 Investment securities sold -- -- 553,505 20,003,410 Other receivables 6,903 -- 2,216 10,405 Prepaid expenses and other assets 2,655 6,583 24,635 56,979 ----------- ----------- ------------ ------------ Total Assets 69,388,616 19,240,527 255,455,800 517,372,706 ----------- ----------- ------------ ------------ Liabilities Payables: Dividends 22,011 71,708 31,660 415,900 Accrued expenses: Payable to adviser 2,075 -- 4,712 14,973 Other expenses and other liabilities 86,492 17,877 180,405 299,513 ----------- ----------- ------------ ------------ Total Liabilities 110,578 89,585 216,777 730,386 ----------- ----------- ------------ ------------ Net Assets $69,278,038 $19,150,942 $255,239,023 $516,642,320 =========== =========== ============ ============ Components of Net Assets Paid in capital $69,277,934 $19,155,757 $255,267,807 $516,655,370 Undistributed (distributions in excess of) net investment income 12 408 (31,686) 1,501 Accumulated net realized gain (loss) 92 (5,223) 2,902 (14,551) ----------- ----------- ------------ ------------ Net Assets $69,278,038 $19,150,942 $255,239,023 $516,642,320 =========== =========== ============ ============ Net Assets by Class of Shares Preferred Shares $ -- $ -- $ 25,881,398 $104,370,449 Universal Shares -- 19,150,942 34,759,050 51,121,835 Institutional Service Shares 16,844,267 -- 22,446,425 69,035,011 Institutional Shares -- -- 72,965,263 101,085,104 Investor Shares 52,433,771 -- 99,186,887 189,890,790 B Shares -- -- -- 262,732 C Shares -- -- -- 876,399 ----------- ----------- ------------ ------------ Net Assets $69,278,038 $19,150,942 $255,239,023 $516,642,320 =========== =========== ============ ============ Shares of Beneficial Interest for each Class of Shares Preferred Shares -- -- 25,881,505 104,370,219 Universal Shares -- 19,174,989 34,798,338 51,126,123 Institutional Service Shares 16,839,972 -- 22,446,452 69,034,894 Institutional Shares -- -- 72,960,040 101,087,262 Investor Shares 52,437,971 -- 99,181,484 189,897,788 B Shares -- -- -- 262,731 C Shares -- -- -- 876,388 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. 6 MONARCH FUNDS - -------------------------------------------------------------------------------- STATEMENTS OF OPERATIONS Six Months Ended February 28, 2007
DAILY ASSETS DAILY ASSETS GOVERNMENT DAILY ASSETS DAILY ASSETS TREASURY OBLIGATIONS GOVERNMENT CASH FUND FUND FUND FUND ------------ ------------ ------------ ------------ Investment Income: Interest income $2,157,391 $464,624 $10,566,658 $16,004,881 Dividend income 1,359 14,916 -- -- ---------- -------- ----------- ----------- Total Investment Income 2,158,750 479,540 10,566,658 16,004,881 ---------- -------- ----------- ----------- Expenses: Investment adviser fees 15,439 4,602 71,447 111,896 Administrator fees Preferred Shares -- -- 92,552 95,577 Universal Shares -- 10,125 22,450 36,433 Institutional Service Shares 8,841 -- 16,404 30,593 Institutional Shares -- -- 41,609 49,518 Investor Shares 36,468 -- 43,810 114,911 B Shares -- -- -- 11,253 C Shares -- -- -- 11,481 Shareholder service fees Institutional Service Shares 16,074 -- 29,826 55,625 Institutional Shares -- -- 75,653 90,034 Investor Shares 66,305 -- 79,655 208,931 B Shares -- -- -- 266 C Shares -- -- -- 783 Distribution fees Investor Shares 82,881 -- 99,568 261,161 B Shares -- -- -- 797 C Shares -- -- -- 2,350 Compliance Services fees 7,053 3,231 7,085 20,278 Transfer agency fees Preferred Shares -- -- 13,178 23,883 Universal Shares -- 12,412 26,660 26,796 Institutional Service Shares 16,816 -- 22,452 38,395 Institutional Shares -- -- 92,492 102,224 Investor Shares 80,288 -- 107,374 223,439 B Shares -- -- -- 7,719 C Shares -- -- -- 8,145 Custodian fees 4,475 996 22,173 32,135 Professional fees 22,053 16,599 10,610 26,434 Accountant fees 30,922 20,663 25,015 79,024 Registration fees 4,403 955 13,159 24,694 Trustees' fees and expenses 3,255 742 11,409 24,223 Miscellaneous expenses 14,427 2,476 27,955 37,567 ---------- -------- ----------- ----------- Total Expenses 409,700 72,801 952,536 1,756,565 Expenses reimbursed and fees waived (93,405) (54,025) (185,718) (307,977) ---------- -------- ----------- ----------- Net Expenses 316,295 18,776 766,818 1,448,588 ---------- -------- ----------- ----------- Net Investment Income (Loss) 1,842,455 460,764 9,799,840 14,556,293 ---------- -------- ----------- ----------- Net Realized Gain (Loss) on Investments 92 (2) 2,900 (279) ---------- -------- ----------- ----------- Increase (Decrease) in Net Assets from Operations $1,842,547 $460,762 $ 9,802,740 $14,556,014 ========== ======== =========== ===========
See Notes to Financial Statements. 7 MONARCH FUNDS - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS
DAILY ASSETS DAILY ASSETS TREASURY FUND GOVERNMENT OBLIGATIONS FUND --------------------------------- -------------------------------- SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED FEBRUARY 28, 2007 AUGUST 31, 2006 FEBRUARY 28, 2007 AUGUST 31, 2006 ----------------- --------------- ----------------- --------------- Operations Net investment income (loss) $ 1,842,455 $ 2,619,720 $ 460,764 $ 763,875 Net realized gain (loss) on investments 92 -- (2) -- ------------- --------------- ----------- ------------ Increase (Decrease) in Net Assets from Operations 1,842,547 2,619,720 460,762 763,875 ------------- --------------- ----------- ------------ Distributions to Shareholders from Net investment income--Universal Shares -- -- (460,764) (763,875) Net investment income--Institutional Service Shares (384,616) (511,144) -- -- Net investment income--Investor Shares (1,457,840) (2,108,577) -- -- 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 (1,842,456) (2,619,721) (460,764) (763,875) ------------- --------------- ----------- ------------ Capital Share Transactions Sale of shares--Universal Shares -- -- 8,807,896 17,890,345 Sale of shares--Institutional Service Shares 31,768,517 56,995,099 -- -- Sale of shares--Investor Shares 529,787,666 1,027,908,338 -- -- Reinvestment of distributions--Universal Shares -- -- 5,784 10,377 Reinvestment of distributions--Institutional Service Shares 315,527 426,729 -- -- Reinvestment of distributions--Investor Shares 1,459,264 2,107,066 -- -- Redemption of shares--Universal Shares -- -- (8,506,303) (16,479,139) Redemption of shares--Institutional Service Shares (30,371,197) (54,166,582) -- -- Redemption of shares--Investor Shares (537,624,404) (1,018,150,465) -- -- ------------- --------------- ----------- ------------ Increase (Decrease) from Capital Transactions (4,664,627) 15,120,185 307,377 1,421,583 ------------- --------------- ----------- ------------ Increase (Decrease) in Net Assets (4,664,536) 15,120,184 307,375 1,421,583 ------------- --------------- ----------- ------------ Net Assets Beginning of Period 73,942,574 58,822,390 18,843,567 17,421,984 ------------- --------------- ----------- ------------ End of Period $ 69,278,038 $ 73,942,574 $19,150,942 $ 18,843,567 ============= =============== =========== ============ Share Transactions Sale of shares--Universal Shares -- -- 8,807,895 17,890,345 Sale of shares--Institutional Service Shares 31,768,516 56,995,099 -- -- Sale of shares--Investor Shares 529,787,666 1,027,908,338 -- -- Reinvestment of distributions--Universal Shares -- -- 5,784 10,378 Reinvestment of distributions--Institutional Service Shares 315,527 426,729 -- -- Reinvestment of distributions--Investor Shares 1,459,264 2,107,066 -- -- Redemption of shares--Universal Shares -- -- (8,506,303) (16,479,139) Redemption of shares--Institutional Service Shares (30,371,197) (54,166,582) -- -- Redemption of shares--Investor Shares (537,624,404) (1,018,150,465) -- -- ------------- --------------- ----------- ------------ Increase (Decrease) in Shares (4,664,628) 15,120,185 307,376 1,421,584 ============= =============== =========== ============ Undistributed (distributions in excess of) Net Investment Income $ 12 $ 13 $ 408 $ 408 ------------- --------------- ----------- ------------
See Notes to Financial Statements. 8 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, 2007 AUGUST 31, 2006 FEBRUARY 28, 2007 AUGUST 31, 2006 ----------------- ---------------- ----------------- --------------- Operations Net investment income (loss) $ 9,799,840 $ 56,933,808 $ 14,556,293 $ 17,852,956 Net realized gain (loss) on investments 2,900 -- (279) (687) --------------- ---------------- --------------- --------------- Increase (Decrease) in Net Assets from Operations 9,802,740 56,933,808 14,556,014 17,852,269 --------------- ---------------- --------------- --------------- Distributions to Shareholders from Net investment income--Preferred Shares (4,403,844) (46,380,538) (4,562,186) (2,675,457) Net investment income--Universal Shares (1,053,546) (1,758,977) (1,712,822) (2,592,894) Net investment income--Institutional Service Shares (732,404) (2,557,679) (1,368,341) (1,365,993) Net investment income--Institutional Shares (1,812,259) (3,863,892) (2,161,454) (2,748,374) Net investment income--Investor Shares (1,801,048) (2,372,632) (4,734,105) (8,454,554) Net investment income--B Shares -- -- (3,963) (3,648) Net investment income--C Shares -- -- (11,675) (11,722) Net realized gain--Universal Shares -- -- -- -- --------------- ---------------- --------------- --------------- Total Distributions to Shareholders (9,803,101) (56,933,718) (14,554,546) (17,852,642) --------------- ---------------- --------------- --------------- Capital Share Transactions Sale of shares--Preferred Shares 1,010,647,724 13,961,573,134 729,744,243 690,893,357 Sale of shares--Universal Shares 218,316,172 261,380,787 232,102,963 739,799,611 Sale of shares--Institutional Service Shares 102,037,863 406,813,980 196,351,374 352,393,100 Sale of shares--Institutional Shares 408,288,586 1,101,577,846 504,928,792 899,609,574 Sale of shares--Investor Shares 547,958,964 1,183,921,865 1,462,106,922 3,944,036,139 Sale of shares--B Shares -- -- 154,743 414,954 Sale of shares--C Shares -- -- 624,969 1,663,874 Reinvestment of distributions--Preferred Shares 3,904,155 46,189,852 1,914,365 364,322 Reinvestment of distributions--Universal Shares 1,053,545 1,761,741 1,515,575 2,331,253 Reinvestment of distributions--Institutional Service Shares 727,858 2,557,455 1,366,088 1,355,076 Reinvestment of distributions--Institutional Shares 1,591,325 3,318,919 2,062,951 2,507,112 Reinvestment of distributions--Investor Shares 1,794,513 2,359,987 4,450,241 7,735,675 Reinvestment of distributions--B Shares -- -- 3,963 3,647 Reinvestment of distributions--C Shares -- -- 11,675 11,735 Redemption of shares--Preferred Shares (1,100,590,306) (13,917,158,610) (728,792,538) (629,499,253) Redemption of shares--Universal Shares (227,134,178) (245,398,091) (261,195,562) (702,705,553) Redemption of shares--Institutional Service Shares (127,192,190) (417,918,604) (183,448,925) (326,119,193) Redemption of shares--Institutional Shares (410,757,884) (1,087,896,148) (505,228,339) (859,445,718) Redemption of shares--Investor Shares (518,313,500) (1,181,095,338) (1,484,124,168) (3,981,055,792) Redemption of shares--B Shares -- -- (219,117) (125,545) Redemption of shares--C Shares -- -- (627,909) (844,167) --------------- ---------------- --------------- --------------- Increase (Decrease) Decrease from Capital Transactions (87,667,353) 121,988,775 (26,297,694) 143,324,208 --------------- ---------------- --------------- --------------- Increase (Decrease) in Net Assets (87,667,714) 121,988,865 (26,296,226) 143,323,835 --------------- ---------------- --------------- --------------- Net Assets Beginning of Period 342,906,737 220,917,872 542,938,546 399,614,711 --------------- ---------------- --------------- --------------- End of Period $ 255,239,023 $ 342,906,737 $ 516,642,320 $ 542,938,546 =============== ================ =============== =============== Undistributed (distributions in excess of) Net Investment Income $ (31,686) $ (28,425) $ 1,501 $ (246) --------------- ---------------- --------------- ---------------
See Notes to Financial Statements. 9 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, 2007 AUGUST 31, 2006 FEBRUARY 28, 2007 AUGUST 31, 2006 ----------------- --------------- ----------------- --------------- Share Transactions Sale of shares--Preferred Shares 1,010,647,724 13,961,573,135 729,744,244 690,893,357 Sale of shares--Universal Shares 218,316,172 261,380,786 232,102,963 739,799,611 Sale of shares--Institutional Service Shares 102,037,863 406,813,980 196,351,372 352,393,101 Sale of shares--Institutional Shares 408,288,586 1,101,577,845 504,928,791 899,609,575 Sale of shares--Investor Shares 547,958,963 1,183,921,866 1,462,106,923 3,944,036,139 Sale of shares--B Shares -- -- 154,743 414,955 Sale of shares--C Shares -- -- 624,969 1,663,874 Reinvestment of distributions--Preferred Shares 3,904,155 46,189,852 1,914,365 364,322 Reinvestment of distributions--Universal Shares 1,053,545 1,761,741 1,515,575 2,331,253 Reinvestment of distributions--Institutional Service Shares 727,858 2,557,455 1,366,088 1,355,076 Reinvestment of distributions--Institutional Shares 1,591,325 3,318,919 2,062,951 2,507,112 Reinvestment of distributions--Investor Shares 1,794,513 2,359,987 4,450,241 7,735,675 Reinvestment of distributions--B Shares -- -- 3,964 3,647 Reinvestment of distributions--C Shares -- -- 11,675 11,735 Redemption of shares--Preferred Shares (1,100,590,306) (13,917,158,610) (728,792,538) (629,499,253) Redemption of shares--Universal Shares (227,134,178) (245,398,091) (261,195,562) (702,705,553) Redemption of shares--Institutional Service Shares (127,192,190) (417,918,604) (183,448,925) (326,119,193) Redemption of shares--Institutional Shares (410,757,884) (1,087,896,148) (505,228,339) (859,445,718) Redemption of shares--Investor Shares (518,313,500) (1,181,095,338) (1,484,124,168) (3,981,055,792) Redemption of shares--B Shares -- -- (219,117) (125,545) Redemption of shares--C Shares -- -- (627,909) (844,167) -------------- --------------- -------------- -------------- Increase (Decrease) in Shares (87,667,354) 121,988,775 (26,297,694) 143,324,211 ============== =============== ============== ==============
See Notes to Financial Statements. 10 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, 2007 $1.00 $0.02/(e)/ --/(f)/ $(0.02) -- $1.00 2.40% $ 16,844 2006 1.00 0.04/(e)/ -- (0.04) -- 1.00 4.06% 15,131 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 Investor Shares - ------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2007 1.00 0.02/(e)/ --/(f)/ (0.02) -- 1.00 2.20% 52,434 2006 1.00 0.04/(e)/ -- (0.04) -- 1.00 3.65% 58,811 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 DAILY ASSETS GOVERNMENT OBLIGATIONS FUND Universal Shares/(g)/ - ------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2007 1.00 0.02/(e)/ --/(f)/ (0.02) -- 1.00 2.51% 19,151 2006 1.00 0.04/(e)/ -- (0.04) -- 1.00 4.30% 18,844 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
RATIOS/SUPPLEMENTAL DATA - -------------------------------- Ratios to Average Net Assets/(a)/ - -------------------------------- Net Net Gross Investment Expenses Expenses/(c)/ Income - --------------------------------- - ---------------------------------- 0.45% 0.78% 4.79% 0.45% 0.82% 4.01% 0.45% 0.69% 1.92% 0.45% 0.56% 0.57% 0.45% 0.67% 0.84% 0.45% 0.62% 1.68% - ---------------------------------- 0.84% 1.05% 4.40% 0.84% 1.02% 3.61% 0.84% 0.97% 1.61% 0.84% 0.89% 0.18% 0.84% 0.90% 0.45% 0.85% 0.87% 1.22% - ---------------------------------- 0.20% 0.79% 5.01% 0.20% 0.81% 4.24% 0.20% 0.75% 2.22% 0.20% 0.70% 0.86% 0.20% 0.48% 1.14% 0.20% 0.71% 1.97%
(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. 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 GOVERNMENT FUND Preferred Shares - ------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2007 $1.00 $0.03/(d)/ --/(f)/ $(0.03) -- $1.00 2.63% $ 25,881 2006 1.00 0.04/(d)/ -- (0.04) -- 1.00 4.57% 111,921 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 Universal Shares - ------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2007 1.00 0.03/(d)/ --/(f)/ (0.03) -- 1.00 2.58% 34,759 2006 1.00 0.04/(d)/ -- (0.04) -- 1.00 4.49% 42,523 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 Institutional Service Shares - ------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2007 1.00 0.02/(d)/ --/(f)/ (0.02) -- 1.00 2.46% 22,446 2006 1.00 0.04/(d)/ -- (0.04) -- 1.00 4.23% 46,873 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, 2007 1.00 0.02/(d)/ --/(f)/ (0.02) -- 1.00 2.40% 72,965 2006 1.00 0.04/(d)/ -- (0.04) -- 1.00 4.11% 73,843 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 Investor Shares - ------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2007 1.00 0.02/(d)/ --/(f)/ (0.02) -- 1.00 2.26% 99,187 2006 1.00 0.04/(d)/ -- (0.04) -- 1.00 3.83% 67,747 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
RATIOS/SUPPLEMENTAL DATA - -------------------------------- Ratios to Average Net Assets/(a)/ - -------------------------------- Net Net Gross Investment Expenses Expenses/(c)/ Income - --------------------------------- - ---------------------------------- 0.12% 0.21% 5.23% 0.12% 0.18% 4.34% 0.12% 0.18% 2.56% 0.12% 0.18% 1.06% 0.11% 0.25% 1.05% 0.12% 0.22% 2.19% - ---------------------------------- 0.20% 0.35% 5.16% 0.20% 0.30% 4.36% 0.20% 0.25% 2.12% 0.20% 0.26% 0.95% 0.20% 0.28% 1.26% 0.21% 0.25% 2.17% - ---------------------------------- 0.45% 0.57% 4.91% 0.45% 0.51% 4.20% 0.45% 0.50% 2.10% 0.45% 0.51% 0.69% 0.45% 0.58% 0.70% - ---------------------------------- 0.57% 0.66% 4.79% 0.57% 0.61% 4.03% 0.57% 0.61% 2.05% 0.57% 0.62% 0.58% 0.57% 0.63% 0.92% 0.57% 0.59% 2.05% - ---------------------------------- 0.84% 0.93% 4.52% 0.84% 0.88% 3.80% 0.84% 0.87% 1.74% 0.84% 0.86% 0.32% 0.84% 0.89% 0.63% 0.85% 0.85% 1.43%
See Notes to Financial Statements. 12 MONARCH FUNDS - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS
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, 2007 $1.00 $0.03/(d)/ --/(f)/ $(0.03) -- $1.00 2.63% $104,370 2006 1.00 0.05/(d)/ --/(f)/ (0.05) -- 1.00 4.56% 101,504 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 Universal Shares - --------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2007 1.00 0.03/(d)/ --/(f)/ (0.03) -- 1.00 2.59% 51,122 2006 1.00 0.04/(d)/ --/(f)/ (0.04) -- 1.00 4.48% 78,698 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 Institutional Service Shares - --------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2007 1.00 0.02/(d)/ --/(f)/ (0.02) -- 1.00 2.47% 69,035 2006 1.00 0.04/(d)/ --/(f)/ (0.04) -- 1.00 4.22% 54,766 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, 2007 1.00 0.02/(d)/ --/(f)/ (0.02) -- 1.00 2.40% 101,085 2006 1.00 0.04/(d)/ --/(f)/ (0.04) -- 1.00 4.10% 99,321 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 Investor Shares - --------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2007 1.00 0.02/(d)/ --/(f)/ (0.02) -- 1.00 2.27% 189,891 2006 1.00 0.04/(d)/ --/(f)/ (0.04) -- 1.00 3.82% 207,458 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 B Shares - --------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2007 1.00 0.02/(d)/ --/(f)/ (0.02) -- 1.00 1.86% 263 2006 1.00 0.03/(d)/ --/(f)/ (0.03) -- 1.00 2.99% 323 2005/(e)/ 1.00 0.01/(d)/ --/(f)/ (0.01) -- 1.00 0.92% 30 C Shares - --------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2007 1.00 0.02/(d)/ --/(f)/ (0.02) -- 1.00 1.86% 876 2006 1.00 0.03/(d)/ --/(f)/ (0.03) -- 1.00 2.99% 868 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% 0.26% 5.25% 0.12% 0.23% 4.61% 0.12% 0.32% 2.64% 0.12% 0.31% 1.06% 0.12% 0.30% 1.39% 0.12% 0.20% 1.88% - ---------------------------------- 0.20% 0.31% 5.17% 0.20% 0.29% 4.41% 0.20% 0.34% 2.32% 0.20% 0.27% 0.94% 0.20% 0.28% 1.24% 0.21% 0.25% 2.03% - ---------------------------------- 0.45% 0.57% 4.92% 0.45% 0.56% 4.27% 0.45% 0.60% 2.04% 0.45% 0.54% 0.71% 0.45% 0.58% 0.76% - ---------------------------------- 0.57% 0.66% 4.80% 0.57% 0.65% 4.16% 0.57% 0.68% 1.97% 0.57% 0.63% 0.59% 0.57% 0.61% 1.01% 0.57% 0.58% 1.84% - ---------------------------------- 0.84% 0.89% 4.53% 0.84% 0.88% 3.76% 0.84% 0.91% 1.71% 0.84% 0.87% 0.32% 0.84% 0.86% 0.68% 0.83% 0.83% 1.51% - ---------------------------------- 1.65% 21.71% 3.73% 1.65% 48.98% 3.39% 1.65% 161.82% 1.20% - ---------------------------------- 1.65% 8.26% 3.73% 1.65% 15.85% 3.50% 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. 13 MONARCH FUNDS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS February 28, 2007 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, 2007, 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. 14 MONARCH FUNDS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS February 28, 2007 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. RESTRICTED SECURITIES The Fund may invest in securities that are subject to legal or contractual restrictions on resale ("restricted securities"). Restricted securities may be resold in transactions that are exempt from registration under the Federal securities laws or if the securities are registered to the public. The sale or other disposition of these securities may involve additional expenses and the prompt sale of these securities at an acceptable price may be difficult. Information regarding restricted securities held by the Fund is included in the Schedule of Investments. 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 Daily Assets Treasury Fund, Daily Assets Government Fund, and Daily Assets Cash Fund based upon the total average daily net assets of the combined 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. 15 MONARCH FUNDS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS February 28, 2007 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 six months ended February 28, 2007, 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 $ -- $ 4,602 $ -- $ -- Administration 45,308 10,125 163,853 239,405 Custody 356 75 2,459 2,360 Shareholder Service -- -- 1,092 5,112 Transfer Agency 427 5,159 17,229 -- Portfolio Accounting 1,875 524 -- -- Reimbursed Expenses by Citigroup 45,439 33,540 1,085 61,100 ------- ------- -------- -------- Total $93,405 $54,025 $185,718 $307,977 ======= ======= ======== ========
NOTE 5. FEDERAL INCOME TAX AND INVESTMENT TRANSACTIONS As of August 31, 2006, distributable earnings (accumulated losses) on a tax basis were as follows:
UNDISTRIBUTED CAPITAL AND ORDINARY INCOME OTHER LOSSES TOTAL --------------- ------------ -------- Daily Assets Treasury Fund $ 9,185 $ -- $ 9,185 Daily Assets Government Obligations Fund 77,245 (5,222) 72,023 Daily Assets Government Fund 133,320 -- 133,320 Daily Assets Cash Fund 457,156 (14,272) 442,884
The capital loss carryovers available to offset future gains, as of August 31, 2006, were as follows: Daily Assets Government Obligations Fund 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 Expiring August 2014 2,631
16 MONARCH FUNDS - -------------------------------------------------------------------------------- ADDITIONAL INFORMATION February 28, 2007 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. 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. 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. INVESTMENT ADVISORY AGREEMENT APPROVAL At the December 15, 2006 Board meeting, the Board, including the Independent Trustees, considered the approval of the continuance of the investment advisory agreement pertaining to the Funds (the "Advisory Agreement"). In evaluating the Advisory Agreement for the Funds, the Board reviewed materials furnished by the Adviser and the Administrator, including information regarding the Adviser, its personnel, operations and financial condition. Specifically, the Board considered, among other matters: (1) the nature, extent and quality of the services to be provided to the Funds by the Adviser, including information on the investment performance of the Adviser; (2) the costs of the services to be provided and profitability to the Adviser with respect to its relationship with the Funds; (3) the advisory fee and total expense ratio of the Funds compared to relevant peer groups of funds; (4) the extent to which economies of scale would be realized as the Funds grow and whether the advisory fee would enable the Funds' investors to share in the benefits of economies of scale; and (5) other benefits received by the Adviser from its relationship with the Funds. In their deliberations, the Board did not identify any particular information that was all-important or controlling, and the Board attributed different weights to the various factors. In particular, the Board focused on the factors discussed below. NATURE, EXTENT AND QUALITY OF THE SERVICES The Board met with representatives of the Adviser and discussed the Adviser's personnel, operations and financial condition. Specifically, the Board discussed with the Adviser the adequacy of its resources and quality of services provided by the Adviser under the Advisory Agreement. The Board concluded that it was satisfied with the nature, extent and quality of services provided to the Funds by the Adviser. The Board then reviewed the Adviser's financial stability. The Adviser reviewed its financial condition through the period ended September 30, 2006, noting that it is financially stable. The Board considered the Adviser's representation that its capital meets or exceeds its current insurance deductible. Based on the foregoing, the Board concluded that the Adviser was financially able to provide investment advisory services to the Funds. COSTS OF SERVICES AND PROFITABILITY The Board then considered information provided by the Adviser regarding its costs of services and profitability with respect to the Funds. The Board considered the Adviser's resources devoted to the Funds as well as an assessment of costs and profitability provided by the Adviser. The Board concluded that the level of the Adviser's profits attributable to management of the Funds was not excessive in light of the services provided by the Adviser on behalf of the Funds. COMPENSATION The Board also considered the Adviser's compensation for providing advisory services to the Funds and analyzed comparative information on fees, expenses, and performance of similar mutual funds. DAILY ASSETS TREASURY FUND - The Board noted that the contractual investment advisory fee rate of the Fund was lower than the mean and median advisory fee rate of its Lipper Inc. peer group. The Board also noted that the total gross and net expenses for the Institutional Shares and Investor Shares of the Fund were higher than the mean and median total expenses of their Lipper Inc. peer group. DAILY ASSETS GOVERNMENT OBLIGATIONS FUND - The Board noted that the contractual investment advisory fee rate and the total net expenses of the Fund were lower than the mean and median advisory fee rates and total expenses of its Lipper Inc. peer group. 17 MONARCH FUNDS - -------------------------------------------------------------------------------- ADDITIONAL INFORMATION February 28, 2007 DAILY ASSETS GOVERNMENT FUND - The Board noted that the contractual investment advisory fee rate of the Fund was lower than the mean and median advisory fee rate of its Lipper Inc. peer group. The Board also considered the total net expenses of each share class, noting that the Universal Shares and Preferred Shares were lower than the mean and median total expenses of its Lipper Inc. peer group, while the Institutional Shares, Institutional Service Shares and Investor Shares were higher than the mean and median total expenses of its Lipper Inc. peer group. DAILY ASSETS CASH FUND - The Board noted that the contractual investment advisory fee rate of the Fund was lower than the mean and median advisory fee rate of its Lipper Inc. peer group. The Board also considered the total net expenses of each share class, noting that the Universal Shares and Preferred Shares were lower than the mean and median total expenses of its Lipper Inc. peer group, while the Institutional Shares, Institutional Service Shares and Investor Shares were higher than the mean and median total expenses of its Lipper Inc. peer group. PERFORMANCE The Adviser discussed its approach to managing the Funds as well as the Funds' performance. The Board considered the Funds' performance for the period ended September 30, 2006 and since each Fund's inception. DAILY ASSETS TREASURY FUND - The Board also considered that the Fund's Institutional Service Shares outperformed their Lipper Inc. index for the 3- and 6-month and 1-, 3- and 5-year periods, while the Fund's Investor Shares outperformed its Lipper Inc. index for the 3- month and 1-year periods. The Board noted that no significant changes to the investment strategies adopted by the Adviser are anticipated in the near future. DAILY ASSETS GOVERNMENT OBLIGATIONS FUND - The Board also considered that the Fund's Universal Shares outperformed their Lipper Inc. index for the 3- and 6-month and 1-, 3- and 5-year periods. DAILY ASSETS GOVERNMENT FUND - The Board also considered that the Fund's Preferred, Universal, Institutional Service, Institutional and Investor Shares outperformed their Lipper Inc. index for the 3- and 6-month and 1-, 3- and 5-year periods. DAILY ASSETS CASH FUND - The Board also considered that the Fund's Preferred, Universal, Institutional Service, Institutional and Investor Shares outperformed their Lipper Inc. index for the 3- and 6-month and 1-, 3- and 5-year periods. ECONOMIES OF SCALE The Board then considered whether the Funds would benefit from any economies of scale. The Board considered the size of the Funds, noting that the breakpoints in investment advisory fees for the Funds were appropriate to share benefits from any economies of scale with the shareholders. OTHER BENEFITS The Board noted the Adviser's representation that it does not receive other benefits from its relationship with the Funds. Based on the foregoing, the Board concluded that other benefits received by the Adviser from its relationship with the Funds were not a material factor to consider in approving the continuation of the Advisory Agreement. CONCLUSION Prior to voting, the Board reviewed a memorandum from Fund Counsel discussing the legal standards applicable to its consideration of the Advisory Agreement. The Board also discussed the proposed approval of the continuance of the Advisory Agreement. Based upon its review, the Board concluded that the overall arrangements between the Funds and the Adviser, as provided in the Advisory Agreement, were fair and reasonable in light of the services performed, expenses incurred and other such matters as the Board considered relevant in the exercise of its reasonable judgment. 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, 2006 through February 28, 2007. 18 MONARCH FUNDS - -------------------------------------------------------------------------------- ADDITIONAL INFORMATION February 28, 2007 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.
BEGINNING ENDING EXPENSES ANNUALIZED ACCOUNT VALUE ACCOUNT VALUE PAID DURING EXPENSE SEPTEMBER 1, 2006 FEBRUARY 28, 2007 PERIOD* RATIO ----------------- ----------------- ----------- ---------- DAILY ASSETS TREASURY FUND INSTITUTIONAL SERVICE SHARES Actual Return $1,000.00 $1,023.97 $2.26 0.45% Hypothetical Return $1,000.00 $1,022.56 $2.26 0.45% INVESTOR SHARES Actual Return $1,000.00 $1,021.99 $4.21 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 $1,025.05 $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 $1,026.28 $0.60 0.12% Hypothetical Return $1,000.00 $1,024.20 $0.60 0.12% UNIVERSAL SHARES Actual Return $1,000.00 $1,025.84 $1.00 0.20% Hypothetical Return $1,000.00 $1,023.80 $1.00 0.20% INSTITUTIONAL SERVICE SHARES Actual Return $1,000.00 $1,024.60 $2.26 0.45% Hypothetical Return $1,000.00 $1,022.56 $2.26 0.45% INSTITUTIONAL SHARES Actual Return $1,000.00 $1,024.00 $2.86 0.57% Hypothetical Return $1,000.00 $1,021.97 $2.86 0.57% INVESTOR SHARES Actual Return $1,000.00 $1,022.64 $4.21 0.84% Hypothetical Return $1,000.00 $1,020.63 $4.21 0.84%
19 MONARCH FUNDS - -------------------------------------------------------------------------------- ADDITIONAL INFORMATION February 28, 2007
BEGINNING ENDING EXPENSES ANNUALIZED ACCOUNT VALUE ACCOUNT VALUE PAID DURING EXPENSE SEPTEMBER 1, 2006 FEBRUARY 28, 2007 PERIOD* RATIO ----------------- ----------------- ----------- ---------- DAILY ASSETS CASH FUND PREFERRED SHARES Actual Return $1,000.00 $1,026.33 $0.60 0.12% Hypothetical Return $1,000.00 $1,024.20 $0.60 0.12% UNIVERSAL SHARES Actual Return $1,000.00 $1,025.92 $1.00 0.20% Hypothetical Return $1,000.00 $1,023.80 $1.00 0.20% INSTITUTIONAL SERVICE SHARES Actual Return $1,000.00 $1,024.65 $2.26 0.45% Hypothetical Return $1,000.00 $1,022.56 $2.26 0.45% INSTITUTIONAL SHARES Actual Return $1,000.00 $1,024.04 $2.86 0.57% Hypothetical Return $1,000.00 $1,021.97 $2.86 0.57% INVESTOR SHARES Actual Return $1,000.00 $1,022.69 $4.21 0.84% Hypothetical Return $1,000.00 $1,020.63 $4.21 0.84% B SHARES Actual Return $1,000.00 $1,018.62 $8.26 1.65% Hypothetical Return $1,000.00 $1,016.61 $8.25 1.65% C SHARES Actual Return $1,000.00 $1,018.62 $8.26 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 divided by 365 to reflect the half-year period. 20 MONARCH FUNDS DAILY ASSETS TREASURY FUND DAILY ASSETS GOVERNMENT OBLIGATIONS FUND DAILY ASSETS GOVERNMENT FUND DAILY ASSETS CASH FUND MONARCH FUNDS 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 27, 2007 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 27, 2007 By /s/ Jack J. Singer -------------------------------- Jack J. Singer, Principal Financial Officer Date April 27, 2007 EX-99.CERT 2 dex99cert.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 27, 2007 /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 27, 2007 /s/ Jack J. Singer --------------------------- Jack J. Singer Principal Financial Officer EX-99.906CERT 3 dex99906cert.txt CERTIFICATIONS 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 27, 2007 /s/ Anthony R. Fischer - ---------------------------------- Anthony R. Fischer Principal Executive Officer Dated: April 27, 2007 /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-----