-----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, J4xtaXioNfTQhJIqCIbAbq6TZRfGqldFn8qK+nJUyIUSNqhsfdXC/CibiKLVAs89 t/df8YpT38lWINBqqQftvw== 0001193125-08-095062.txt : 20080429 0001193125-08-095062.hdr.sgml : 20080429 20080429161254 ACCESSION NUMBER: 0001193125-08-095062 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20080229 FILED AS OF DATE: 20080429 DATE AS OF CHANGE: 20080429 EFFECTIVENESS DATE: 20080429 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: 08785632 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 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, 2007 - February 29, 2008 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. (S) 3507. Item 1. Reports to Stockholders. FEBRUARY 29, 2008 (UNAUDITED) DAILY ASSETS TREASURY FUND DAILY ASSETS GOVERNMENT OBLIGATIONS FUND DAILY ASSETS GOVERNMENT FUND DAILY ASSETS CASH FUND SEMI-ANNUAL REPORT MONARCH FUNDS LOGO MONARCH FUNDS - -------------------------------------------------------------------------------- A MESSAGE TO OUR SHAREHOLDERS February 29, 2008 Dear Shareholders: During the time period since our annual report dated August 31, 2007, the U.S. financial system has encountered unprecedented problems associated with various segments of the fixed income markets. From sub-prime mortgage related securities to asset backed commercial paper and auction rate securities, market participants have encountered a significant reduction of liquidity as well as loss of principal value in their investments. Along with these financial disruptions the domestic economy has slowed measurably and many think has recently entered a recession. To mitigate the impact of these events the Federal Reserve has aggressively lowered interest rates and put in place extraordinary measures to add liquidity to the credit markets to keep them functioning. As a result of these Federal Reserve actions the Fed Funds rate has declined from 5 1/4% in August of 2007 to a current level of 2 1/4%. In reaction to these events our portfolio management team took early action to evaluate whether the credit quality of the securities we invest in and the counterparties we transact business with are of the highest quality. Since August of 2007 we have not invested in any securities that contained any sub-prime mortgages or asset backed commercial paper issues that contained any mortgage related bonds or residential mortgages as part of their holdings. We also increased our liquidity by shortening the maturities of our holdings. These actions reduced the returns on our Funds somewhat, but in light of the disruptions in the fixed income markets, we believe this was the right course of action. We will continue to pursue a very cautious approach to which securities we invest in and will maintain relatively short average life portfolios along with maintaining a high liquidity position until we feel the fixed income markets have stabilized. 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 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. Foreside Fund Services, LLC, distributor. BEFORE INVESTING YOU SHOULD CAREFULLY CONSIDER THE FUND'S INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES. THIS AND OTHER INFORMATION IS IN THE PROSPECTUS, A COPY OF WHICH MAY BE OBTAINED BY CALLING (800) 754-8757 OR VISITING THE FUND'S WEBSITE AT WWW.MONARCHADVISORS.COM. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE INVESTING. 1 MONARCH FUNDS - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - DAILY ASSETS TREASURY FUND February 29, 2008
FACE AMOUNT SECURITY DESCRIPTION RATE MATURITY VALUE - ----------- -------------------------------------------------------------------------- ---- -------- ----------- REPURCHASE AGREEMENTS - 95.6% $12,793,000 Bank of America Securities, dated 02/29/08, to be repurchased at $12,796,358; collaterized by various U.S. Treasury Obligations 3.15% 03/03/08 $12,793,000 22,000,000 Bear Stearns & Co., Inc., dated 02/29/08, to be repurchased at $22,003,025; collaterized by various U.S. Treasury Obligations 1.65 03/03/08 22,000,000 19,000,000 Citigroup Securities, dated 02/29/08, to be repurchased at $19,001,583; collaterized by various U.S. Treasury Obligations 1.00 03/03/08 19,000,000 19,000,000 Deutsche Bank Securities, Inc., dated 02/29/08, to be repurchased at $19,002,850; collaterized by various U.S. Treasury Obligations 1.80 03/03/08 19,000,000 19,000,000 Merrill Lynch, dated 02/29/08, to be repurchased at $19,002,375; collaterized by various U.S. Treasury Obligations 1.50 03/03/08 19,000,000 ----------- Total Repurchase Agreements 91,793,000 ----------- SHARES - ----------- MONEY MARKET FUND - 4.2% 4,000,000 Dreyfus Treasury Cash Management Fund 1.93 4,000,000 ----------- Total Investments at Amortized Cost* - 99.8% $95,793,000 Other Assets and Liabilities, Net - 0.2% 198,508 ----------- NET ASSETS - 100.0% $95,991,508 =========== PORTFOLIO HOLDINGS % OF TOTAL INVESTMENTS Money Market Fund 4.2% Repurchase Agreements 95.8% * 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 29, 2008
FACE AMOUNT SECURITY DESCRIPTION RATE MATURITY VALUE - ----------- -------------------------------------------------------------------------- ---- -------- ----------- U.S. GOVERNMENT SECURITIES - 87.5% GOVERNMENT BOND # - 87.5% $ 3,500,000 Federal Home Loan Bank - Discount Note 2.79% 03/12/08 $ 3,497,027 16,500,000 Federal Home Loan Bank - Discount Note 2.89 03/26/08 16,466,943 ----------- Total U.S. Government Securities 19,963,970 ----------- SHARES - ----------- MONEY MARKET FUND - 12.0% 2,740,000 Dreyfus Treasury Prime Cash Management Fund 2.36 2,740,000 ----------- Total Investments at Amortized Cost* - 99.5% $22,703,970 Other Assets and Liabilities, Net - 0.5% 102,821 ----------- NET ASSETS - 100.0% $22,806,791 =========== PORTFOLIO HOLDINGS % OF TOTAL INVESTMENTS U.S. Government Security 87.9% Money Market Fund 12.1% # 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 29, 2008
FACE AMOUNT SECURITY DESCRIPTION RATE MATURITY VALUE - ------------ -------------------------------------------------------------------------- ---- -------- ------------ REPURCHASE AGREEMENTS - 100.0% $ 12,429,000 Bank of America Securities, dated 02/29/08, to be repurchased at $12,433,350; collaterized by various U.S. Government Agency Obligations 3.15% 03/03/08 $ 12,429,000 150,000,000 Bear Stearns & Co., Inc., dated 02/29/08, to be repurchased at $87,210,997; collaterized by various U.S. Government Agency Obligations 3.20 03/03/08 150,000,000 140,000,000 Deutsche Bank Securities, Inc., dated 02/29/08, to be repurchased at $140,049,467; collaterized by various U.S. Government Agency Obligations 3.18 03/03/08 140,000,000 139,420,000 Merrill Lynch & Co., Inc., dated 02/29/08, to be repurchased at $139,469,262; Collaterized by various U.S. Government Agency Obligations 3.18 03/03/08 139,420,000 ------------ Total Investments at Amortized Cost* - 100.0% $441,849,000 Other Assets and Liabilities, Net - 0.0% (172,385) ------------ NET ASSETS - 100.0% $441,676,615 ============ PORTFOLIO HOLDINGS % OF TOTAL INVESTMENTS Repurchase Agreements 100% * 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 29, 2008
FACE AMOUNT SECURITY DESCRIPTION RATE MATURITY VALUE - ------------ -------------------------------------------------------------------------- ---- -------- ------------ CERTIFICATES OF DEPOSIT + - 8.6% $ 25,000,000 Comerica Bank 4.98% 10/02/08 $ 25,000,000 5,000,000 Comerica Bank 4.11 10/22/08 5,001,513 20,000,000 Deutsche Bank of New York 4.94 06/19/08 20,002,267 ------------ Total Certificates of Deposit 50,003,780 ------------ COMMERCIAL PAPER # - 14.5% 25,000,000 Bear Stearns 3.24 03/24/08 24,948,409 30,000,000 International Lease Finance Corp. 3.98 03/10/08 29,970,375 10,000,000 Societe Generale North America 4.83 04/24/08 9,928,750 19,455,000 UBS Finance Delaware, LLC 3.08 04/23/08 19,367,069 ------------ Total Commercial Paper 84,214,603 ------------ CORPORATE NOTES + - 28.5% 25,000,000 AllState Life Global Funding II^ 4.46 04/14/08 25,003,225 6,000,000 American Express Credit Corp. 3.13 04/18/08 5,999,381 24,750,000 ASIF Global Financing XXI^ 5.41 03/14/08 24,753,345 3,000,000 Goldman Sachs Group, Inc. 3.19 11/10/08 2,984,078 30,000,000 Goldman Sachs Group, Inc. 3.25 11/14/08 29,910,044 35,000,000 IBM Corp.^ 3.10 09/02/08 34,967,762 6,050,000 Lehman Brothers Holdings, Inc. 3.12 05/29/08 6,050,711 8,085,000 Morgan Stanley 5.20 03/07/08 8,085,104 12,000,000 Royal Bank of Scotland PLC^ 4.45 04/11/08 12,000,566 15,000,000 Wells Fargo & Co. 3.22 03/10/08 15,000,101 ------------ Total Corporate Notes 164,754,317 ------------ SHARES - ------------ MONEY MARKET FUND - 5.4% 31,450,000 Dreyfus Cash Management Fund 3.58 31,450,000 ------------ FACE AMOUNT - ------------ REPURCHASE AGREEMENTS - 43.0% $ 21,665,000 Bank of America Securities, dated 02/29/08, to be repurchased at $21,669,333; collaterized by various U.S. Government Agency Obligations 1.80 03/03/08 21,665,000 87,180,000 Bear Stearns & Co., Inc., dated 02/29/08, to be repurchased at $87,210,997; collaterized by various U.S. Government Agency Obligations 3.20 03/03/08 87,180,000 140,000,000 Deutsche Bank Securities, Inc., dated 02/29/08, to be repurchased at $140,049,467; collaterized by various U.S. Government Agency Obligations 3.18 03/03/08 140,000,000 ------------ Total Repurchase Agreements 248,845,000 ------------ Total Investments at Amortized Cost* - 100.0% $579,267,700 Other Assets and Liabilities, Net - 0.0% 140,325 ------------ NET ASSETS - 100.0% $579,408,025 ============
See Notes to Financial Statements. 5 MONARCH FUNDS - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - DAILY ASSETS CASH FUND February 29, 2008 PORTFOLIO HOLDINGS % OF TOTAL INVESTMENTS Certificates of Deposit 8.6% Commercial Paper 14.5% Corporate Notes 28.4% Money Market Fund 5.4% Repurchase Agreements 43.1% + 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 29, 2008. # Rates shown are annualized yields at time of purchase. ^ Security exempt from registration under Rule 144A under the Securities Act of 1933. At the period end, the value of these securities amounted to $61,757,136 or 10.7% of net assets. * Cost for federal income tax purposes is the same as for financial statement purposes.
See Notes to Financial Statements. 6 MONARCH FUNDS - -------------------------------------------------------------------------------- STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) February 29, 2008
DAILY ASSETS DAILY ASSETS GOVERNMENT DAILY ASSETS DAILY ASSETS TREASURY OBLIGATIONS GOVERNMENT CASH FUND FUND FUND FUND ------------ ------------ ------------ ------------ Assets Investments: Securities at amoritized cost $ 4,000,000 $22,703,970 $ -- $330,422,700 Repurchase agreements 91,793,000 -- 441,849,000 248,845,000 Cash 258,618 156,123 70,899 -- Receivables: Dividends 7,836 5,251 -- 96,998 Interest 4,397 -- 39,103 1,212,001 Due from Administrator 14,663 1,243 20,052 58,766 Prepaid expenses and other assets 136 2,351 11,753 44,332 ----------- ----------- ------------ ------------ Total Assets 96,078,650 22,868,938 441,990,807 580,679,797 ----------- ----------- ------------ ------------ Liabilities Payables: Due to custodian -- -- -- 618,685 Dividends 4,012 47,689 17,240 287,839 Accrued expenses: Payable to adviser 2,960 895 12,923 19,468 Other expenses and other liabilities 80,170 13,563 284,029 345,780 ----------- ----------- ------------ ------------ Total Liabilities 87,142 62,147 314,192 1,271,772 ----------- ----------- ------------ ------------ Net Assets $95,991,508 $22,806,791 $441,676,615 $579,408,025 =========== =========== ============ ============ Components of Net Assets Paid-in capital $95,984,551 $22,786,923 $441,702,741 $579,431,140 Distributions in excess of net investment income (1,334) (825) (49,569) (48,201) Accumulated net realized gain 8,291 20,693 23,443 25,086 ----------- ----------- ------------ ------------ Net Assets $95,991,508 $22,806,791 $441,676,615 $579,408,025 =========== =========== ============ ============ Net Assets by Class of Shares Preferred Shares $ -- $ -- $ 30,010,358 $ 94,329,403 Universal Shares -- 22,806,791 60,337,601 97,912,782 Institutional Service Shares 31,410,872 -- 78,806,096 68,569,337 Institutional Shares -- -- 103,171,057 125,979,282 Investor Shares 64,580,636 -- 169,351,503 188,546,512 B Shares -- -- -- 674,455 C Shares -- -- -- 3,396,254 ----------- ----------- ------------ ------------ Net Assets $95,991,508 $22,806,791 $441,676,615 $579,408,025 =========== =========== ============ ============ Shares of Beneficial Interest for each Class of Shares Preferred Shares -- -- 30,009,194 94,327,864 Universal Shares -- 22,806,156 60,379,153 97,924,193 Institutional Service Shares 31,405,444 -- 78,804,704 68,573,937 Institutional Shares -- -- 103,166,600 125,978,401 Investor Shares 64,577,868 -- 169,342,272 188,554,559 B Shares -- -- -- 674,415 C Shares -- -- -- 3,396,078 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 (UNAUDITED) Six Months Ended February 29, 2008
DAILY ASSETS DAILY ASSETS GOVERNMENT DAILY ASSETS DAILY ASSETS TREASURY OBLIGATIONS GOVERNMENT CASH FUND FUND FUND FUND ------------ ------------ ------------ ------------ Investment Income: Interest income $1,424,506 $415,856 $8,418,422 $16,422,755 Dividend income 11,227 30,247 5,355 337,868 ---------- -------- ---------- ----------- Total Investment Income 1,435,733 446,103 8,423,777 16,760,623 ---------- -------- ---------- ----------- Expenses: Investment adviser fees 14,482 5,354 71,534 132,043 Administrator fees Preferred Shares -- -- 44,921 60,023 Universal Shares -- 11,778 29,263 76,290 Institutional Shares -- -- 48,351 65,969 Institutional Service Shares 7,598 -- 23,849 39,254 Investor Shares 34,442 -- 60,956 138,550 Class B Shares -- -- -- 12,713 Class C Shares -- -- -- 13,608 Distribution fees Investor Shares 78,277 -- 138,537 314,886 Shareholder servicing fees Institutional Shares -- -- 87,912 119,944 Investor Shares 62,622 -- 110,830 251,911 Institutional Service Shares 13,814 -- 43,362 71,371 Transfer agent fees Preferred Shares -- -- 12,100 9,432 Universal Shares -- 14,482 24,975 46,078 Institutional Shares -- -- 100,900 131,263 Institutional Service Shares 18,901 -- 31,089 46,061 Investor Shares 74,625 -- 125,997 262,427 Class B Shares -- -- -- 12,009 Class C Shares -- -- -- 21,779 Accountant fees 25,566 20,446 49,596 64,215 Custodian fees 3,822 1,071 18,850 34,687 Compliance service fees 666 319 -- 2,135 Trustee fees and expenses 4,353 1,095 18,333 35,431 Audit fees 11,417 10,662 11,835 14,197 Legal fees 7,506 7,564 6,341 7,410 Other expenses 22,719 5,500 32,178 78,660 ---------- -------- ---------- ----------- Total Expenses Before Fee Reductions 380,810 78,271 1,091,709 2,062,346 ---------- -------- ---------- ----------- Administration fees waived (39,173) (10,975) (145,983) (208,387) Shareholder servicing fees waived Institutional Service Shares -- -- (5,272) -- Transfer agent fees waived -- (13,465) (17,107) -- Accountant fees waived (25,104) (20,886) -- -- Other expenses waived by Administrator (22,309) (12,345) (20,052) (103,299) ---------- -------- ---------- ----------- Net Expenses 294,224 20,600 903,295 1,750,660 ---------- -------- ---------- ----------- Net Investment Income 1,141,509 425,503 7,520,482 15,009,963 ---------- -------- ---------- ----------- Net Realized Gain (Loss) on Investments (205) 22,124 9,291 25,656 ---------- -------- ---------- ----------- Increase in Net Assets from Operations $1,141,304 $447,627 $7,529,773 $15,035,619 ========== ======== ========== ===========
See Notes to Financial Statements. 8 MONARCH FUNDS - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS
DAILY ASSETS GOVERNMENT DAILY ASSETS TREASURY FUND OBLIGATIONS FUND --------------------------------- -------------------------------- SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED FEBRUARY 29, 2008 AUGUST 31, 2007 FEBRUARY 29, 2008 AUGUST 31, 2007 ----------------- --------------- ----------------- --------------- (UNAUDITED) (UNAUDITED) Operations Net investment income $ 1,141,509 $ 3,540,918 $ 425,503 $ 934,309 Net realized gain (loss) on investments (205) 8,496 22,124 3,790 ------------- --------------- ----------- ------------ Increase in Net Assets from Operations 1,141,304 3,549,414 447,627 938,099 ------------- --------------- ----------- ------------ Distributions to Shareholders from Net investment income: Universal Shares (625) -- (426,737) (934,308) Institutional Service Shares (204,867) (704,968) -- -- Institutional Shares -- -- -- -- Investor Shares (937,362) (2,835,952) -- -- ------------- --------------- ----------- ------------ Total Distributions to Shareholders (1,142,854) (3,540,920) (426,737) (934,308) ------------- --------------- ----------- ------------ Capital Share Transactions (in dollar and shares) Universal Shares Proceeds from shares issued -- -- 10,330,628 16,200,785 Dividends reinvested -- -- 3,947 10,616 Cost of shares redeemed -- -- (5,744,557) (16,862,876) ------------- --------------- ----------- ------------ Total Universal Shares -- -- 4,590,018 (651,475) ------------- --------------- ----------- ------------ Institutional Service Shares Proceeds from shares issued 56,781,436 59,251,693 -- -- Dividends reinvested 172,303 543,453 -- -- Cost of shares redeemed (34,309,708) (66,160,159) -- -- ------------- --------------- ----------- ------------ Total Institutional Service Shares 22,644,031 (6,365,013) -- -- ------------- --------------- ----------- ------------ Investor Shares Proceeds from shares issued 441,708,491 1,099,309,749 -- -- Dividends reinvested 947,987 2,818,966 -- -- Cost of shares redeemed (444,061,958) (1,094,960,263) -- -- ------------- --------------- ----------- ------------ Total Investor Shares (1,405,480) 7,168,452 -- -- ------------- --------------- ----------- ------------ Increase in Net assets from Capital Transactions 21,238,551 803,439 4,590,018 (651,475) ------------- --------------- ----------- ------------ Increase (Decrease) in Net Assets 21,237,001 811,933 4,610,908 (647,684) ------------- --------------- ----------- ------------ Net Assets Beginning of Period 74,754,507 73,942,574 18,195,883 18,843,567 ------------- --------------- ----------- ------------ End of Period $ 95,991,508 $ 74,754,507 $22,806,791 $ 18,195,883 ============= =============== =========== ============ Undistributed (distributions in excess of) Net Investment Income $ (1,334) $ 11 $ (825) $ 409 ------------- --------------- ----------- ------------
See Notes to Financial Statements. 9 MONARCH FUNDS - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS
DAILY ASSETS GOVERNMENT FUND DAILY ASSETS CASH FUND --------------------------------- --------------------------------- SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED FEBRUARY 29, 2008 AUGUST 31, 2007 FEBRUARY 29, 2008 AUGUST 31, 2007 ----------------- --------------- ----------------- --------------- (UNAUDITED) (UNAUDITED) Operations Net investment income $ 7,520,482 $ 18,989,271 $ 15,009,963 $ 28,453,678 Net realized gain on investments 9,291 14,150 25,656 13,702 ------------- --------------- --------------- --------------- Increase in Net Assets from Operations 7,529,773 19,003,421 15,035,619 28,467,380 ------------- --------------- --------------- --------------- Distributions to Shareholders from Net investment income: Preferred Shares (1,873,692) (6,134,632) (2,569,755) (8,193,071) Universal Shares (1,119,200) (3,713,783) (3,249,617) (3,734,857) Institutional Service Shares (865,682) (1,582,715) (1,543,103) (2,804,839) Institutional Shares (1,710,653) (3,564,712) (2,545,612) (4,615,665) Investor Shares (1,969,103) (3,996,725) (5,111,326) (9,062,066) B Shares -- -- (7,933) (8,381) C Shares -- -- (32,319) (33,052) ------------- --------------- --------------- --------------- Total Distributions to Shareholders (7,538,330) (18,992,567) (15,059,665) (28,451,931) ------------- --------------- --------------- --------------- Capital Share Transactions (in dollar and shares) Preferred Shares Proceeds from shares issued 108,082,789 1,242,343,346 404,149,047 1,479,999,002 Dividends reinvested 1,873,681 5,634,900 1,129,277 4,167,357 Cost of shares redeemed (220,116,204) (1,219,729,132) (380,301,773) (1,516,318,866) ------------- --------------- --------------- --------------- Total Preferred Shares (110,159,734) 28,249,114 24,976,551 (32,152,507) ------------- --------------- --------------- --------------- Universal Shares Proceeds from shares issued 284,274,021 463,703,586 528,133,746 711,452,056 Dividends reinvested 1,133,800 3,699,021 3,050,465 3,352,850 Cost of shares redeemed (254,200,869) (480,793,053) (536,099,421) (690,668,285) ------------- --------------- --------------- --------------- Total Universal Shares 31,206,952 (13,390,446) (4,915,210) 24,136,621 ------------- --------------- --------------- --------------- Institutional Service Shares Proceeds from shares issued 186,332,632 223,481,697 268,283,856 367,725,335 Dividends reinvested 865,671 1,575,394 1,541,983 2,797,725 Cost of shares redeemed (145,872,795) (234,450,705) (256,049,677) (370,491,479) ------------- --------------- --------------- --------------- Total Institutional Service Shares 41,325,508 (9,393,614) 13,776,162 31,581 ------------- --------------- --------------- --------------- Institutional Shares Proceeds from shares issued 412,368,870 742,566,876 490,671,736 1,049,036,474 Dividends reinvested 1,542,543 3,162,004 2,460,509 4,427,997 Cost of shares redeemed (385,642,843) (744,668,649) (471,573,555) (1,048,368,336) ------------- --------------- --------------- --------------- Total Institutional Shares 28,268,570 1,060,231 21,558,690 5,096,135 ------------- --------------- --------------- --------------- Investor Shares Proceeds from shares issued 779,751,916 1,233,465,393 1,488,657,604 2,852,482,706 Dividends reinvested 1,960,137 3,984,410 4,750,191 8,420,806 Cost of shares redeemed (713,023,996) (1,204,536,860) (1,541,847,375) (2,831,373,592) ------------- --------------- --------------- --------------- Total Investor Shares 68,688,057 32,912,943 (48,439,580) (29,529,920) ------------- --------------- --------------- --------------- B Shares Proceeds from shares issued -- -- 435,006 499,657 Dividends reinvested -- -- 7,933 8,381 Cost of shares redeemed -- -- (258,710) (340,991) ------------- --------------- --------------- --------------- Total B Shares -- -- 184,229 167,047 ------------- --------------- --------------- --------------- C Shares Proceeds from shares issued -- -- 3,493,538 2,505,898 Dividends reinvested -- -- 32,319 33,051 Cost of shares redeemed -- -- (1,824,147) (1,712,222) ------------- --------------- --------------- --------------- Total C Shares -- -- 1,701,710 826,727 ------------- --------------- --------------- --------------- Increase in Net Assets from Capital Transactions 59,329,353 39,438,228 8,842,552 27,635,524 ------------- --------------- --------------- --------------- Increase in Net Assets 59,320,796 39,449,082 8,818,506 27,650,973 ------------- --------------- --------------- --------------- Net Assets Beginning of Period 382,355,819 342,906,737 570,589,519 542,938,546 ------------- --------------- --------------- --------------- End of Period $ 441,676,615 $ 382,355,819 $ 579,408,025 $ 570,589,519 ============= =============== =============== =============== Undistributed (distributions in excess of) Net Investment Income $ (49,569) $ (31,721) $ (48,201) $ 1,501 ------------- --------------- --------------- ---------------
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 Beginning Net Distributions Ending Assets at Year Ended Net Asset Net Realized from Net Net Asset End of August 31, Value Per Investment Gain (Loss) on Investment Value Total Period (except as noted) Share Income Investments Income Per Share Return/(b)/ (000's) - ----------------- --------- ---------- -------------- ------------- --------- ---------- --------- - - - - - - - - - DAILY ASSETS TREASURY FUND Institutional Service Shares/(d)/ - ------------------------------------------------------------------------------------------------------------- Six months ended February 29, 2008/(h)/ $1.00 $0.02/(e)/ --/(f)/ $(0.02) $1.00 1.69% $31,411 2007 1.00 0.05/(e)/ --/(f)/ (0.05) 1.00 4.79% 8,768 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 Investor Shares - ------------------------------------------------------------------------------------------------------------- Six months ended February 29, 2008/(h)/ 1.00 0.01/(e)/ --/(f)/ (0.01) 1.00 1.49% 64,581 2007 1.00 0.04/(e)/ --/(f)/ (0.04) 1.00 4.39% 65,987 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 DAILY ASSETS GOVERNMENT OBLIGATIONS FUND Universal Shares/(g)/ - ------------------------------------------------------------------------------------------------------------- Six months ended February 29, 2008/(h)/ 1.00 0.02/(e)/ --/(f)/ (0.02) 1.00 2.01% 22,807 2007 1.00 0.05/(e)/ --/(f)/ (0.05) 1.00 5.10% 18,196 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
RATIOS/SUPPLEMENTAL DATA - -------------------------------- Ratio of Average Net Assets/(a)/ - -------------------------------- Net Net Gross Investment Expenses Expenses/(c)/ Income - --------------------------------- - ---------------------------------- 0.45% 0.87% 2.97% 0.45% 0.71% 4.71% 0.45% 0.82% 4.01% 0.45% 0.69% 1.92% 0.45% 0.56% 0.57% 0.45% 0.67% 0.84% - ---------------------------------- 0.84% 1.02% 3.00% 0.84% 1.02% 4.30% 0.84% 1.02% 3.61% 0.84% 0.97% 1.61% 0.84% 0.89% 0.18% 0.84% 0.90% 0.45% - ---------------------------------- 0.19% 0.72% 3.98% 0.20% 0.78% 4.99% 0.20% 0.81% 4.24% 0.20% 0.75% 2.20% 0.20% 0.70% 0.86% 0.20% 0.48% 1.14%
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 Beginning Net Distributions Ending Assets at Year Ended Net Asset Net Realized from Net Net Asset End of August 31, Value Per Investment Gain (Loss) on Investment Value Total Period (except as noted) Share Income Investments Income Per Share Return/(b)/ (000's) - ----------------- --------- ---------- -------------- ------------- --------- ---------- --------- - - - - - - - - - DAILY ASSETS GOVERNMENT FUND Preferred Shares - ------------------------------------------------------------------------------------------------------------- Six months ended February 29, 2008/(h)/ $1.00 $0.02/(e)/ --/(f)/ $(0.02) $1.00 2.21% $ 30,010 2007 1.00 0.05/(e)/ --/(f)/ (0.05) 1.00 5.35% 140,173 2006 1.00 0.04/(e)/ -- (0.04) 1.00 4.57% 111,921 2005 1.00 0.02/(e)/ -- (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 Universal Shares - ------------------------------------------------------------------------------------------------------------- Six months ended February 29, 2008/(h)/ 1.00 0.02/(e)/ --/(f)/ (0.02) 1.00 2.17% 60,338 2007 1.00 0.05/(e)/ --/(f)/ (0.05) 1.00 5.26% 29,134 2006 1.00 0.04/(e)/ -- (0.04) 1.00 4.49% 42,523 2005 1.00 0.02/(e)/ -- (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 Institutional Service Shares - ------------------------------------------------------------------------------------------------------------- Six months ended February 29, 2008/(h)/ 1.00 0.02/(e)/ --/(f)/ (0.02) 1.00 2.04% 78,806 2007 1.00 0.05/(e)/ --/(f)/ (0.05) 1.00 5.01% 37,480 2006 1.00 0.04/(e)/ -- (0.04) 1.00 4.23% 46,873 2005 1.00 0.02/(e)/ -- (0.02) 1.00 2.18% 55,420 2004 1.00 --/(f)/ --/(f)/ --/(f)/ 1.00 0.71% 55,142 2003 1.00 --/(f)/ -- --/(f)/ 1.00 0.16% 76,273 Institutional Shares - ------------------------------------------------------------------------------------------------------------- Six months ended February 29, 2008/(h)/ 1.00 0.02/(e)/ --/(f)/ (0.02) 1.00 1.98% 103,171 2007 1.00 0.05/(e)/ --/(f)/ (0.05) 1.00 4.88% 74,905 2006 1.00 0.04/(e)/ -- (0.04) 1.00 4.11% 73,843 2005 1.00 0.02/(e)/ -- (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 Investor Shares - ------------------------------------------------------------------------------------------------------------- Six months ended February 29, 2008/(h)/ 1.00 0.02/(e)/ --/(f)/ (0.02) 1.00 1.84% 169,352 2007 1.00 0.05/(e)/ --/(f)/ (0.05) 1.00 4.60% 100,663 2006 1.00 0.04/(e)/ -- (0.04) 1.00 3.83% 67,747 2005 1.00 0.02/(e)/ -- (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
RATIOS/SUPPLEMENTAL DATA - -------------------------------- Ratio of Average Net Assets/(a)/ - -------------------------------- Net Net Gross Investment Expenses Expenses/(c)/ Income - --------------------------------- - ---------------------------------- 0.12% 0.25% 4.59% 0.12% 0.23% 5.22% 0.12% 0.18% 4.34% 0.12% 0.18% 2.56% 0.12% 0.18% 1.06% 0.11% 0.25% 1.05% - ---------------------------------- 0.19% 0.30% 4.19% 0.20% 0.31% 5.14% 0.20% 0.30% 4.36% 0.20% 0.25% 2.12% 0.20% 0.26% 0.95% 0.20% 0.28% 1.26% - ---------------------------------- 0.44% 0.54% 4.00% 0.45% 0.57% 4.89% 0.45% 0.51% 4.20% 0.45% 0.50% 2.10% 0.45% 0.51% 0.69% 0.45% 0.58% 0.70% - ---------------------------------- 0.56% 0.65% 3.89% 0.57% 0.67% 4.78% 0.57% 0.61% 4.03% 0.57% 0.61% 2.05% 0.57% 0.62% 0.58% 0.57% 0.63% 0.92% - ---------------------------------- 0.83% 0.90% 3.56% 0.84% 0.91% 4.50% 0.84% 0.88% 3.80% 0.84% 0.87% 1.74% 0.84% 0.86% 0.32% 0.84% 0.89% 0.63%
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 Beginning Net Distributions Ending Assets at Year Ended Net Asset Net Realized from Net Net Asset End of August 31, Value Per Investment Gain (Loss) on Investment Value Total Period (except as noted) Share Income Investments Income Per Share Return/(b)/ (000's) - ----------------- --------- ---------- -------------- ------------- --------- ---------- --------- - - - - - - - - - DAILY ASSETS CASH FUND Preferred Shares - -------------------------------------------------------------------------------------------------------------- Six months ended February 29, 2008/(h)/ $1.00 $0.02/(e)/ --/(f)/ $(0.02) $1.00 2.38% $ 94,329 2007 1.00 0.05/(e)/ --/(f)/ (0.05) 1.00 5.37% 69,354 2006 1.00 0.05/(e)/ --/(f)/ (0.05) 1.00 4.56% 101,504 2005 1.00 0.03/(e)/ $(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 Universal Shares - -------------------------------------------------------------------------------------------------------------- Six months ended February 29, 2008/(h)/ 1.00 0.02/(e)/ --/(f)/ (0.02) 1.00 2.34% 97,913 2007 1.00 0.05/(e)/ --/(f)/ (0.05) 1.00 5.29% 102,838 2006 1.00 0.04/(e)/ --/(f)/ (0.04) 1.00 4.48% 78,698 2005 1.00 0.02/(e)/ --/(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 Institutional Service Shares - -------------------------------------------------------------------------------------------------------------- Six months ended February 29, 2008/(h)/ 1.00 0.02/(e)/ --/(f)/ (0.02) 1.00 2.21% 68,569 2007 1.00 0.05/(e)/ --/(f)/ (0.05) 1.00 5.02% 54,799 2006 1.00 0.04/(e)/ --/(f)/ (0.04) 1.00 4.22% 54,766 2005 1.00 0.02/(e)/ --/(f)/ (0.02) 1.00 2.15% 27,137 2004 1.00 0.01 --/(f)/ (0.01) 1.00 0.71% 26,423 2003 1.00 --/(f)/ -- --/(f)/ 1.00 0.18% 36,876 Institutional Shares - -------------------------------------------------------------------------------------------------------------- Six months ended February 29, 2008/(h)/ 1.00 0.02/(e)/ --/(f)/ (0.02) 1.00 2.15% 125,979 2007 1.00 0.05/(e)/ --/(f)/ (0.05) 1.00 4.90% 104,420 2006 1.00 0.04/(e)/ --/(f)/ (0.04) 1.00 4.10% 99,321 2005 1.00 0.02/(e)/ --/(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 Investor Shares - -------------------------------------------------------------------------------------------------------------- Six months ended February 29, 2008/(h)/ 1.00 0.02/(e)/ --/(f)/ (0.02) 1.00 2.01% 188,547 2007 1.00 0.05/(e)/ --/(f)/ (0.05) 1.00 4.62% 236,993 2006 1.00 0.04/(e)/ --/(f)/ (0.04) 1.00 3.82% 207,458 2005 1.00 0.02/(e)/ --/(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 B Shares - -------------------------------------------------------------------------------------------------------------- Six months ended February 29, 2008/(h)/ 1.00 0.02/(e)/ --/(f)/ (0.02) 1.00 1.60% 674 2007 1.00 0.04/(e)/ --/(f)/ (0.04) 1.00 3.78% 490 2006 1.00 0.03/(e)/ --/(f)/ (0.03) 1.00 2.99% 323 2005/(i)/ 1.00 0.01/(e)/ --/(f)/ (0.01) 1.00 0.92% 30 C Shares - -------------------------------------------------------------------------------------------------------------- Six months ended February 29, 2008/(h)/ 1.00 0.02/(e)/ --/(f)/ (0.02) 1.00 1.60% 3,396 2007 1.00 0.04/(e)/ --/(f)/ (0.04) 1.00 3.78% 1,694 2006 1.00 0.03/(e)/ --/(f)/ (0.03) 1.00 2.99% 868 2005/(i)/ 1.00 0.01/(e)/ --/(f)/ (0.01) 1.00 0.93% 36
RATIOS/SUPPLEMENTAL DATA - -------------------------------- Ratio of Average Net Assets/(a)/ - -------------------------------- Net Net Gross Investment Expenses Expenses/(c)/ Income - --------------------------------- - ---------------------------------- 0.11% 0.22% 4.71% 0.12% 0.23% 5.24% 0.12% 0.23% 4.61% 0.12% 0.32% 2.64% 0.12% 0.31% 1.06% 0.12% 0.30% 1.39% - ---------------------------------- 0.19% 0.27% 4.67% 0.20% 0.30% 5.16% 0.20% 0.29% 4.41% 0.20% 0.34% 2.32% 0.20% 0.27% 0.94% 0.20% 0.28% 1.24% - ---------------------------------- 0.44% 0.53% 4.31% 0.45% 0.54% 4.91% 0.45% 0.56% 4.27% 0.45% 0.60% 2.04% 0.45% 0.54% 0.71% 0.45% 0.58% 0.76% - ---------------------------------- 0.55% 0.63% 4.25% 0.57% 0.63% 4.79% 0.57% 0.65% 4.16% 0.57% 0.68% 1.97% 0.57% 0.63% 0.59% 0.57% 0.61% 1.01% - ---------------------------------- 0.83% 0.87% 4.05% 0.84% 0.89% 4.52% 0.84% 0.88% 3.76% 0.84% 0.91% 1.71% 0.84% 0.87% 0.32% 0.84% 0.86% 0.68% - ---------------------------------- 1.62% 11.94% 3.11% 1.65% 21.75% 3.72% 1.65% 48.98% 3.39% 1.65% 161.82% 1.20% - ---------------------------------- 1.61% 4.18% 3.03% 1.65% 6.59% 3.71% 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)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. (h)Unaudited (i)See Note 1 for dates of commencement of operations. See Notes to Financial Statements. 13 MONARCH FUNDS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (UNAUDITED) February 29, 2008 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 29, 2008, 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 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements. The policies are in conformity with the accounting principles generally accepted in the United States of America ("GAAP"). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. 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, DIVIDEND AND INTEREST INCOME AND REALIZED GAIN AND LOSS Securities transactions are recorded on trade date. Dividend income is recorded on the ex-dividend 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 (UNAUDITED) February 29, 2008 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. As of and during the period ended February 29, 2008, the Trust did not have a liability for any unrecognized tax expenses. The Trust recognizes interest and penalties, if any, related to tax liabilities as income tax expense in the Statement of Operations. As of February 29, 2008, tax years 2005 through 2008 remain subject to examination by the Trust's major tax jurisdictions, which include the United States of America and the state of Massachusetts. 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 U.S. generally accepted accounting principles. 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 each Fund. NEW ACCOUNTING PRONOUNCEMENTS In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157 "Fair Value Measurements" ("SFAS 157") which is effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. Management has recently begun to evaluate the application of SFAS 157, and has not at this time determined the impact, if any, resulting from its adoption on the Funds' future financial statements. RESTRICTED SECURITIES The Funds 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 Funds is included in the Schedule of Investments. NOTE 3. INVESTMENT ADVISORY AND OTHER SERVICES INVESTMENT ADVISER Monarch 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 Citi Fund Services, LLC ("Citi"), 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 these share classes. The plan obligates the Funds to pay the Distributor as compensation for its services. The Distributor is not affiliated with Citi 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. 15 MONARCH FUNDS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (UNAUDITED) February 29, 2008 TRUSTEES AND OFFICERS Certain officers of the Trust are directors, officers or employees of the aforementioned companies. NOTE 4. FEDERAL INCOME TAX AND INVESTMENT TRANSACTIONS As of August 31, 2007, distributable earnings (accumulated losses) on a tax basis were as follows:
UNDISTRIBUTED UNDISTRIBUTED LONG-TERM CAPITAL AND ORDINARY INCOME GAIN OTHER LOSSES TOTAL --------------- ------------- ------------ ---------- Daily Assets Treasury Fund $ 35,151 $ -- $ -- $35,151.00 Daily Assets Government Obligations Fund 75,173 -- (1,432) 73,741 Daily Assets Government Fund 30,940 2,900 -- 33,840 Daily Assets Cash Fund 300,108 -- (570) 299,538
The tax character of distributions paid during 2007 and 2006 were as follows:
ORDINARY INCOME ----------------------- 2007 2006 ----------- ----------- Daily Assets Treasury Fund $ 3,540,920 $ 2,619,721 Daily Assets Government Obligations Fund 934,308 763,875 Daily Assets Government Fund 18,992,567 56,933,718 Daily Assets Cash Fund 28,451,931 17,852,642
The capital loss carryovers available to offset future gains, as of August 31, 2007, were as follows: Daily Assets Government Obligations Fund Expiring August 2008 $798 Expiring August 2009 632 Expiring August 2011 2 Daily Assets Cash Fund Expiring August 2014 570
16 MONARCH FUNDS - -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (UNAUDITED) February 29, 2008 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' Forms 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 11, 2007 Board meeting, the Board, including the Independent Trustees, considered the approval of the continuance of the investment advisory agreement pertaining to each Fund (the "Advisory Agreement"). In evaluating the Advisory Agreement for each Fund, 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 each Fund 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 Fund; (3) the advisory fee and total expense ratio of the Fund compared to relevant peer groups of funds; (4) the extent to which economies of scale would be realized as the Fund grows and whether the advisory fee would enable the Fund's investors to share in the benefits of economies of scale; and (5) other benefits received by the Adviser from its relationship with the Fund. In their deliberations, the Board did not identify any particular factor 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 SERVICES The Board met with representatives of Monarch Investment Advisors, LLC (the "Adviser") and discussed the Adviser's personnel, operations and financial condition. The Board also considered the quality of its personnel assigned responsibility for servicing the Funds. The Board also considered information regarding the experience and professional background of the portfolio managers at the Adviser and the qualifications and capabilities of the portfolio managers and other personnel who would have principal investment responsibility for the Funds' investments; the investment philosophy and decision-making processes of those professionals; the capability and integrity of the Adviser's senior management and staff; the quality of the Adviser's services with respect to regulatory compliance and compliance with the funds' specific investment policies and restrictions; and the financial condition and operational stability of the Adviser. The Board then discussed with the Adviser its financial condition for the year ended December 31, 2006 and for the nine-month period ended September 30, 2007. The Board concluded that it was satisfied with the nature, extent and quality of services provided to the Funds by the Adviser and also concluded that the Adviser was financially able to provide investment advisory services to the Funds. COSTS OF SERVICES AND PROFITABILITY The Board 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 17 MONARCH FUNDS - -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (UNAUDITED) February 29, 2008 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 to the Funds. PERFORMANCE The Adviser discussed its approach to managing the Funds as well as the Funds' performance. The Board considered the Funds' performance for the 3- and 6-month and the 1-, 3- and 5-year periods ended August 31, 2007 for Daily Assets Cash B Shares and C Shares. DAILY ASSETS TREASURY FUND - The Board noted that the Fund's Institutional Service Shares outperformed their Lipper Inc. peer group average return for the 3- and 6-month and 1-, 3- and 5-year periods, while the Fund's Investor Shares performed at or near their Lipper Inc. peer group average return for the 3- and 6-month and 1-, 3- and 5-year periods. The Board noted that no significant changes to the investment strategies adopted by the Adviser were anticipated in the near future. DAILY ASSETS GOVERNMENT OBLIGATIONS FUND - The Board noted that the Fund's Universal Shares outperformed their Lipper Inc. peer group average return for the 3- and 6-month and 1-, 3- and 5-year periods. DAILY ASSETS GOVERNMENT FUND - The Board considered that the Fund's Preferred, Universal, Institutional Service and Institutional Shares outperformed their Lipper Inc. peer group average return for the 3- and 6-month and 1-, 3- and 5-year periods, while the Investor Shares performed at or above their Lipper Inc. peer group average return for the 3- and 6-month and 1-, 3- and 5-year periods. The Board noted that the Fund's Preferred and Universal Shares ranked in the top quartile of their Lipper Inc. peer group over all periods. DAILY ASSETS CASH FUND - The Board considered that the Fund's Preferred, Universal, Institutional Service, Institutional and Investor Shares outperformed their Lipper Inc. peer group average return for the 3- and 6-month and 1-, 3- and 5-year periods, while the B Shares and C Shares slightly lagged their Lipper Inc. peer group average return. The Board noted that the Preferred Shares ranked in the top quartile of their Lipper Inc. peer group over the all periods, while the Universal Shares ranked in the top quartile of their Lipper Inc. peer group over the 3- and 5-year periods. COMPENSATION The Board also considered the Adviser's compensation for providing advisory services to the Funds and analyzed comparative information on fees 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 actual total expenses for the Institutional Service Shares were lower than the mean and median total expenses of its Lipper Inc. peer group, while the Investor Shares of the Fund were within 15 basis points of the median total expenses of its Lipper Inc. peer group. DAILY ASSETS GOVERNMENT OBLIGATIONS FUND - The Board noted that the contractual investment advisory fee rate and the actual total expenses of the Fund were lower than the mean and median advisory fee rates and total expenses of its Lipper Inc. peer group. 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 actual total expenses of each share class, noting that the Institutional Shares, Institutional Service Shares, Preferred Shares and Universal Shares were lower than the mean and median total expenses of its Lipper Inc. peer group, while the Investor Shares were within 11 basis points of the 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 actual total expenses of each share class, noting that the Preferred Shares and Universal 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 within 26 basis points, 14 basis points and 9 basis points, respectively, of the median total expenses of its Lipper Inc. peer group. 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 paid by certain Funds were appropriate to share benefits from any economies of scale with the Funds' shareholders. 18 MONARCH FUNDS - -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (UNAUDITED) February 29, 2008 OTHER BENEFITS The Board noted that the Adviser does not receive significant ancillary benefits as a result of its relationship with the Funds, other than the benefit of research received from the brokers executing transactions on behalf of its clients and the ability to refer to its advisory relationship with the Funds. CONCLUSION Prior to voting, the Board reviewed a memorandum from Fund Counsel discussing the legal standards applicable to its consideration of the Advisory Agreements. The Board also discussed the proposed approval of the continuance of the Advisory Agreements. Based upon its review, including consideration of each of the factors referred to above, the Board (including all of the Independent Trustees) determined, in the exercise of its business judgment, that the advisory fees of the Funds were fair, and that renewing the Advisory Agreements was in the best interest of the Funds' shareholders. SHAREHOLDER EXPENSES EXAMPLE - As a shareholder of the Monarch Funds, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases and redemption fees; and (2) ongoing costs, including management fees, 12b-1 distribution and/or service fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Monarch Funds and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period. ACTUAL EXPENSES - The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
BEGINNING ENDING ANNUALIZED ACCOUNT VALUE ACCOUNT VALUE EXPENSES EXPENSE SEPTEMBER 1, FEBRUARY 29, PAID DURING RATIO DURING 2007 2008 PERIOD* PERIOD ------------- ------------- ----------- ------------ DAILY ASSETS TREASURY FUND Institutional Service Shares $1,000.00 $1,016.90 $2.26 0.45% Investor Shares $1,000.00 $1,014.90 $4.21 0.84% DAILY ASSETS GOVERNMENT OBLIGATIONS FUND Universal Shares $1,000.00 $1,020.10 $0.95 0.19% DAILY ASSETS GOVERNMENT FUND Preferred Shares $1,000.00 $1,022.10 $0.60 0.12% Universal Shares $1,000.00 $1,021.70 $0.96 0.19% Institutional Service Shares $1,000.00 $1,020.40 $2.21 0.44% Institutional Shares $1,000.00 $1,019.80 $2.81 0.56% Investor Shares $1,000.00 $1,018.40 $4.17 0.83% DAILY ASSETS CASH FUND Preferred Shares $1,000.00 $1,023.80 $0.55 0.11% Universal Shares $1,000.00 $1,023.40 $0.96 0.19% Institutional Service Shares $1,000.00 $1,022.10 $2.21 0.44% Institutional Shares $1,000.00 $1,021.50 $2.76 0.55% Investor Shares $1,000.00 $1,020.10 $4.17 0.83% B Shares $1,000.00 $1,016.00 $8.12 1.62% C Shares $1,000.00 $1,016.00 $8.07 1.61%
* Expenses are equal to the average account value times the Fund's annualized expense ratio multiplied by the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year. 19 MONARCH FUNDS - -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (UNAUDITED) February 29, 2008 HYPOTHETICAL EXAMPLE - The table below provides information about hypothetical account values and hypothetical expenses based on each Monarch Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the 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 costs of investing in the Monarch Funds 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 the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, 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 transactional costs were included, your costs would have been higher.
BEGINNING ENDING ANNUALIZED ACCOUNT VALUE ACCOUNT VALUE EXPENSES EXPENSE SEPTEMBER 1, FEBRUARY 29, PAID DURING RATIO DURING 2007 2008 PERIOD* PERIOD ------------- ------------- ----------- ------------ DAILY ASSETS TREASURY FUND Institutional Service Shares $1,000.00 $1,022.63 $2.26 0.45% Investor Shares $1,000.00 $1,020.69 $4.22 0.84% DAILY ASSETS GOVERNMENT OBLIGATIONS FUND Universal Shares $1,000.00 $1,023.92 $0.96 0.19% DAILY ASSETS GOVERNMENT FUND Preferred Shares $1,000.00 $1,024.27 $0.60 0.12% Universal Shares $1,000.00 $1,023.92 $0.96 0.19% Institutional Service Shares $1,000.00 $1,022.68 $2.21 0.44% Institutional Shares $1,000.00 $1,022.08 $2.82 0.56% Investor Shares $1,000.00 $1,020.74 $4.17 0.83% DAILY ASSETS CASH FUND Preferred Shares $1,000.00 $1,024.32 $0.55 0.11% Universal Shares $1,000.00 $1,023.92 $0.96 0.19% Institutional Service Shares $1,000.00 $1,022.68 $2.21 0.44% Institutional Shares $1,000.00 $1,022.13 $2.77 0.55% Investor Shares $1,000.00 $1,020.74 $4.17 0.83% B Shares $1,000.00 $1,016.81 $8.12 1.62% C Shares $1,000.00 $1,016.86 $8.07 1.61%
* Expenses are equal to the average account value times the Fund's annualized expense ratio multiplied by the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year. 20 MONARCH FUNDS DAILY ASSETS TREASURY FUND DAILY ASSETS GOVERNMENT OBLIGATIONS FUND DAILY ASSETS GOVERNMENT FUND DAILY ASSETS CASH FUND MONARCH FUNDS 3435 Stelzer Road Suite 1000 Columbus, OH 43219 (800) 754-8757 110-AT-0408 FOR MORE 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 principal executive officer and principal financial officer have concluded, based on their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this report, that these disclosure controls and procedures are adequately designed and are operating effectively to ensure that information required to be disclosed by the registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. (b)There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter of the period covered by this report 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) are attached hereto. (a)(3) Not applicable. (b) Certifications pursuant to Rule 30a-2(b) are furnished 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 (Signature and Title)* /s/ Anthony R. Fischer --------------------------- Anthony R. Fischer, Principal Executive Officer Date April 25, 2008 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 (Signature and Title)* /s/ Anthony R. Fischer --------------------------- Anthony R. Fischer, Principal Executive Officer Date April 25, 2008 By (Signature and Title)* /s/ Jack J. Singer --------------------------- Jack J. Singer, Principal Financial Officer Date April 25, 2008 EX-99.CERT 2 dex99cert.txt CERTIFICATIONS PURSUANT TO SECTION 302 CERTIFICATIONS I, Anthony R. Fischer, certify that: 1. I have reviewed this report on Form N-CSR of Monarch Funds (the "registrant"); 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, 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 second fiscal quarter of the period covered by this report 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. April 25, 2008 /s/ Anthony R. Fischer ----------------------------------- Date Anthony R. Fischer Principal Executive Officer CERTIFICATIONS I, Jack J. Singer, certify that: 1. I have reviewed this report on Form N-CSR of Monarch Funds (the "registrant"); 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, 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 second fiscal quarter of the period covered by this report 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. April 25, 2008 /s/ Jack J. Singer ----------------------------------- Date Jack J. Singer Principal Financial Officer EX-99.906CERT 3 dex99906cert.txt CERTIFICATIONS PURSUANT TO SECTION 906 This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. (S) 1350, and accompanies the report on Form N-CSR for the period ended February 29, 2008 of Monarch Funds (the "Registrant"). I, Anthony R. Fischer, the Principal Executive Officer of the Registrant, certify that, to the best of my knowledge,: 1. the Form N-CSR fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78m(a) or 78o(d)); and 2. the information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. April 25, 2008 Date /s/ Anthony R. Fischer - --------------------------- Anthony R. Fischer Principal Executive Officer This certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as part of Form N-CSR or as a separate disclosure document. A signed original of this written statement required by Section 906 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request. This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. (S) 1350, and accompanies the report on Form N-CSR for the period ended February 29, 2008 of Monarch Funds (the "Registrant"). I, Jack J. Singer, the Principal Financial Officer of the Registrant, certify that, to the best of my knowledge,: 1. the Form N-CSR fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78m(a) or 78o(d)); and 2. the information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. April 25, 2008 Date /s/ Jack J. Singer - --------------------------- Jack J. Singer Principal Financial Officer This certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as part of Form N-CSR or as a separate disclosure document. A signed original of this written statement required by Section 906 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----