-----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, IVPvEV4WDiMfbkCmWWIxrO/E1B81CAHDoQulR5x3ASien9MK+vuGFlZr8w35YdjG ec8CCKJil6HEZMGG1CKY/w== 0001275125-04-000127.txt : 20040506 0001275125-04-000127.hdr.sgml : 20040506 20040506161646 ACCESSION NUMBER: 0001275125-04-000127 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040229 FILED AS OF DATE: 20040506 EFFECTIVENESS DATE: 20040506 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MONARCH FUNDS CENTRAL INDEX KEY: 0000889509 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: 04785409 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 N-CSRS 1 mo04-050.txt MONARCH FUNDS SEMI-ANNUAL N-CSR As filed with the Securities and Exchange Commission on May 6, 2004 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-6742 MONARCH FUNDS Two Portland Square Portland, Maine 04101 207-879-1900 David I. Goldstein, President Two Portland Square Portland, Maine 04101 207-879-1900 Date of fiscal year end: FEBRUARY 29, 2004 Date of reporting period: SEPTEMBER 1, 2003 THROUGH FEBRUARY 29, 2004 Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORT TO STOCKHOLDERS. MONARCH FUNDS SEMI-ANNUAL REPORT FEBRUARY 29, 2004 (UNAUDITED) DAILY ASSETS TREASURY FUND DAILY ASSETS GOVERNMENT OBLIGATIONS FUND DAILY ASSETS GOVERNMENT FUND DAILY ASSETS CASH FUND MONARCH FUNDS - -------------------------------------------------------------------------------- A Message to Our Shareholders - -------------------------------------------------------------------------------- February 29, 2004 Dear Shareholders: During the past year, the Federal Reserve Bank has continued to focus its efforts on moving the economy forward and encouraging job growth. In order to reach this goal, the Fed has maintained the Federal Funds rate at 1% since June 2003. While the Gross Domestic Product has grown rapidly over the last six months, job growth remains anemic. This has created a flat yield curve in the short end of the market, which has allowed our portfolio management team to shorten average maturities of the funds' portfolios without sacrificing yield. The Federal Reserve Bank will eventually increase the Federal Funds rate. When this happens, we believe that our funds will be well positioned to take advantage of that increase. We are pleased to report that Monarch's Daily Assets Government Fund, our oldest fund and performance leader, continued to exhibit strong performance for the six months ended February 29, 2004. For the ten-year period ended as of that date, the fund's Universal Shares held the number two spot out of 43 funds within the Government and Agencies Institutional category tracked by iMoneyNet, Inc. (The Universal Shares seven-day yield as of February 29, 2004 was 0.92%.)* For nearly 12 years, we have remained committed to maintaining your $1.00 per share price through the skilled and prudent portfolio management you expect. We thank all of our investors and the financial intermediaries we service for their continued support. Please feel free to call us with your questions or comments at (800) 754-8757. Sincerely, /s/ John Y. Keffer ------------------ John Y. Keffer Trustee * PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND IS NO GUARANTEE OF FUTURE RESULTS. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. FOR THE MOST RECENT MONTH END PERFORMANCE, PLEASE CALL (800)-754-8757. UNIVERSAL SHARES OF DAILY ASSETS GOVERNMENT FUND, RANKED 16 OUT OF 161, SIX OUT OF 93, AND TWO OUT OF 44 WITHIN THE GOVERNMENT AND AGENCIES INSTITUTIONAL FUNDS CATEGORY FOR THE 1-, 5- AND 10-YEAR TOTAL RETURNS AS OF MARCH 31, 2004. RANKINGS ARE BASED ON TOTAL RETURN AND WILL VARY FOR OTHER SHARE CLASSES. 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. THIS REPORT IS AUTHORIZED FOR DISTRIBUTION ONLY TO CURRENT SHAREHOLDERS AND TO OTHERS WHO HAVE RECEIVED A COPY OF THE MONARCH FUNDS PROSPECTUS. FORUM FUND SERVICES, LLC, DISTRIBUTOR.(4/04) 1
MONARCH FUNDS - -------------------------------------------------------------------------------- Schedule of Investments - Daily Assets Treasury Fund - -------------------------------------------------------------------------------- February 29, 2004 FACE SECURITY AMOUNT DESCRIPTION RATE MATURITY VALUE - ------------- -------------------- ---- -------- -------------- U.S. TREASURY BILLS * - 73.3% $150,000,000 U.S. Treasury Bill 0.90% 03/25/04 $ 149,906,000 50,000,000 U.S. Treasury Bill 0.96 06/24/04 49,845,069 ------------------- Total U.S. Treasury Bills 199,751,069 ------------------- REPURCHASE AGREEMENTS - 26.8% 26,675,000 Bank of America Securities LLC, to be repurchased at $26,677,223; collateralized by various U.S. Treasury Obligations 1.00 03/01/04 26,675,000 23,000,000 Bear Stearns & Co., Inc., to be repurchased at $23,001,840; collateralized by various U.S. Treasury Obligations 0.96 03/01/04 23,000,000 23,450,000 Merrill Lynch, Pierce, Fenner & Smith, Inc., to be repurchased at $23,451,896; collateralized by various U.S. Treasury Obligations 0.97 03/01/04 23,450,000 ------------------- Total Repurchase Agreements 73,125,000 ------------------- Total Investments at Amortized Cost - 100.1% $ 272,876,069 Other Assets and Liabilities, Net - (0.1)% (198,728) ------------------- NET ASSETS - 100.0% $ 272,677,341 =================== * Yields shown are annualized yields at time of purchase. 2 MONARCH FUNDS - -------------------------------------------------------------------------------- Schedule of Investments - Daily Assets Government Obligations Fund - -------------------------------------------------------------------------------- February 29, 2004 FACE SECURITY AMOUNT DESCRIPTION RATE MATURITY VALUE - ------------- -------------------- ---- -------- -------------- U.S. GOVERNMENT SECURITIES - 96.2% FEDERAL FARM CREDIT BANK (FFCB) - DISCOUNT NOTE * - 9.0% $2,000,000 FFCB 1.00% 03/22/04 $ 1,998,833 ---------------- FEDERAL HOME LOAN BANK (FHLB) - DISCOUNT NOTES * - 87.2% 1,000,000 FHLB 1.03 03/10/04 999,743 3,200,000 FHLB 1.04 03/12/04 3,198,983 1,000,000 FHLB 0.99 03/31/04 999,175 2,970,000 FHLB 0.98 04/07/04 2,967,009 7,600,000 FHLB 0.99 04/16/04 7,590,323 3,615,000 FHLB 0.99 05/19/04 3,607,146 ---------------- 19,362,379 ---------------- Total U.S. Government Securities 21,361,212 ---------------- SHARES ------ SHORT-TERM INVESTMENT - 3.8% 831,424 Dreyfus Prime Treasury Cash Management Fund 831,424 ---------------- Total Investments at Amortized Cost - 100.0% $ 22,192,636 Other Assets and Liabilities, Net - 0.0% 3,396 ---------------- NET ASSETS - 100.0% $ 22,196,032 ================ * Yields shown are annualized yields at time of purchase.
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MONARCH FUNDS - -------------------------------------------------------------------------------- Schedule of Investments - Daily Assets Government Fund - -------------------------------------------------------------------------------- February 29, 2004 FACE SECURITY AMOUNT DESCRIPTION RATE MATURITY VALUE - ------------- -------------------- ---- -------- -------------- U.S. GOVERNMENT SECURITIES - 84.0% FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) - Discount Notes * - 28.3% $50,000,000 FNMA 1.07% 03/10/04 $ 49,986,687 30,000,000 FNMA 1.07 04/07/04 29,967,008 ---------------- Total Federal National Mortgage Association - Discount Notes 79,953,695 ---------------- STUDENT LOAN MARKETING ASSOCIATION (SLMA) - DISCOUNT NOTE * - 35.4% 100,000,000 SLMA 0.91 03/01/04 100,000,000 ---------------- SMALL BUSINESS ADMINISTRATION (SBA) # - 20.3% 31,203 SBA Pool #500536 3.00 05/25/13 31,767 324,290 SBA Pool #501077 2.50 11/25/14 324,290 122,899 SBA Pool #501308 2.50 10/25/15 122,899 993,763 SBA Pool #501543 2.38 07/25/16 993,763 148,249 SBA Pool #501690 2.13 12/25/16 148,249 402,526 SBA Pool #501733 2.00 02/25/17 405,606 401,348 SBA Pool #501898 2.25 07/25/17 401,348 449,662 SBA Pool #501989 2.13 10/25/12 453,469 2,118,157 SBA Pool #502150 2.00 02/25/18 2,131,193 62,541 SBA Pool #502161 2.00 02/25/18 62,541 623,305 SBA Pool #502208 2.00 02/25/18 625,547 140,628 SBA Pool #502306 2.00 02/25/18 140,627 160,913 SBA Pool #502613 2.00 04/25/19 160,913 55,868 SBA Pool #502914 2.00 03/25/15 56,254 382,106 SBA Pool #503058 1.88 07/25/15 382,106 539,787 SBA Pool #503082 1.88 09/25/20 539,787 279,852 SBA Pool #503120 1.88 10/25/20 279,852 948,484 SBA Pool #503121 1.88 09/25/15 951,724 3,251,209 SBA Pool #503152 1.63 11/25/20 3,251,209 385,894 SBA Pool #503232 1.63 12/25/15 385,894 329,478 SBA Pool #503278 1.63 02/25/21 329,498 729,415 SBA Pool #503429 1.75 06/25/16 730,503 588,099 SBA Pool #503431 1.75 07/25/21 588,266 1,454,257 SBA Pool #503461 1.75 09/25/21 1,455,035 266,179 SBA Pool #503472 1.75 08/25/21 266,179 1,468,399 SBA Pool #503553 1.63 11/25/21 1,469,530 2,511,635 SBA Pool #503614 1.63 01/25/22 2,511,635 1,120,627 SBA Pool #503671 1.63 03/25/22 1,120,627 873,632 SBA Pool #503754 1.63 05/25/22 874,407 62,870 SBA Pool #503780 1.63 03/25/22 62,923 1,217,244 SBA Pool #503882 1.50 09/25/22 1,216,309 244,993 SBA Pool #503892 1.63 07/25/22 245,250 1,806,005 SBA Pool #503909 1.50 10/25/22 1,805,391 992,715 SBA Pool #504015 1.50 01/25/23 992,571 1,053,433 SBA Pool #504062 1.50 02/25/23 1,053,433 1,353,063 SBA Pool #504074 1.50 02/25/23 1,353,063 592,540 SBA Pool #504203 1.63 07/25/13 593,377 1,028,906 SBA Pool #504269 1.63 05/25/15 1,030,407 441,726 SBA Pool #504345 1.63 05/25/18 441,726 10,749,508 SBA Pool #504366 1.38 02/25/24 10,723,944 4 MONARCH FUNDS - -------------------------------------------------------------------------------- Schedule of Investments - Daily Assets Government Fund - -------------------------------------------------------------------------------- February 29, 2004 FACE SECURITY AMOUNT DESCRIPTION RATE MATURITY VALUE - ------------- -------------------- ---- -------- -------------- SMALL BUSINESS ADMINISTRATION (SBA) $ 5,938,345 SBA Pool #504719 1.63% 07/25/24 $ 5,938,345 2,311,782 SBA Pool #504727 1.63 09/25/24 2,311,782 2,923,347 SBA Pool #504765 1.63 10/25/09 2,918,027 2,992,304 SBA Pool #504769 1.63 10/25/24 2,992,304 1,765,072 SBA Pool #505204 1.75 09/25/25 1,764,674 864,205 SBA Pool #505205 1.81 09/25/07 864,100 ---------------- Total Small Business Administration 57,502,344 ---------------- Total U.S. Government Securities 237,456,039 ---------------- REPURCHASE AGREEMENTS - 15.4% 10,823,000 Bank of America Securities LLC, to be repurchased at $10,823,947; collateralized by various U.S. Government Agency Obligations 1.05 03/01/04 10,823,000 32,630,000 Bear Stearns & Co., Inc., to be repurchased aT $32,632,910; collateralized by various U.S. Government Agency Obligations 1.07 03/01/04 32,630,000 ---------------- Total Repurchase Agreements 43,453,000 ---------------- Total Investments at Amortized Cost - 99.4% $ 280,909,039 Other Assets and Liabilities, Net - 0.6% 1,677,602 ---------------- NET ASSETS - 100.0% $ 282,586,641 ================ * Yields 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 29, 2004.
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MONARCH FUNDS - -------------------------------------------------------------------------------- Schedule of Investments - Daily Assets Cash Fund - -------------------------------------------------------------------------------- February 29, 2004 FACE SECURITY AMOUNT DESCRIPTION RATE MATURITY VALUE - ------------- -------------------- ---- -------- -------------- U.S. GOVERNMENT SECURITIES - 21.0% FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC) - DISCOUNT NOTE * - 10.5% $50,000,000 FHLMC 1.06% 03/25/04 $ 49,964,833 ---------------- Student Loan Marketing Association (SLMA) - DISCOUNT NOTE * - 10.5% 50,000,000 SLMA 0.91 03/01/04 50,000,000 ---------------- Total U.S. Government Securities 99,964,833 COMMERCIAL PAPER * - 40.2% 25,000,000 BNP Paribas Finance, Inc. 1.05 05/05/04 24,952,604 28,000,000 Bank of America Corp. 1.03 04/20/04 27,959,945 30,000,000 Citigroup Global Markets 1.06 03/03/04 29,998,233 28,000,000 General Electric Capital Corp. 1.05 05/26/04 27,929,767 20,000,000 Goldman Sachs Group, Inc. 1.12 03/22/04 19,986,933 20,000,000 Societe Generale, N.A. 1.09 03/15/04 19,991,522 20,000,000 UBS Finance Delaware LLC 1.06 03/17/04 19,990,578 20,000,000 Windmill Funding Corp. 1.02 03/19/04 19,989,800 ---------------- Total Commercial Paper 190,799,382 ---------------- CORPORATE NOTES * - 13.6% 4,500,000 Bear Stearns & Co., Inc. 1.56 09/21/04 4,509,887 20,000,000 Countrywide Home Loan 1.19 01/18/05 19,999,264 10,000,000 Credit Suisse First Boston USA, Inc. 1.52 12/03/04 10,022,957 30,000,000 Wells Fargo Bank, N.A. 1.04 06/17/04 30,000,000 ---------------- Total Corporate Notes 64,532,108 ---------------- ASSET-BACKED SECURITY #, o - 3.1% 14,673,113 Grand Central CDO Ltd. 1.30 09/10/38 14,673,113 ---------------- REPURCHASE AGREEMENTS - 22.1% 11,994,000 Bank of America Securities LLC, to be repurchased at $11,995,049; collateralized by various U.S. Government Agency Obligations 1.05 03/01/04 11,994,000 46,000,000 Bank of America Securities LLC, to be repurchased at $46,004,063; collateralized by various U.S. Government Agency Obligations 1.06 03/01/04 46,000,000 47,000,000 Merrill Lynch, Pierce, Fenner & Smtih, Inc., to be repurchased at $47,004,034; collateralized by various U.S. Government Agency Obligations 1.03 03/01/04 47,000,000 ---------------- Total Repurchase Agreements 104,994,000 ---------------- Total Investments at Amortized Cost - 100.0% $ 474,963,436 Other Assets and Liabilities, Net - 0.0% (167,889) --------------- NET ASSETS - 100.0% $ 474,795,547 --------------- * Yields 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 29, 2004. o Securities that may be resold to "qualified institutional buyers" under Rule 144A or securities offered pursuant to Section 4 (2) of the Securities Act of 1933, as amended. These securities have been determined to be liquid by the adviser pursuant to procedures approved by the Board of Trustees. CDO - Collateralized Debt Obligations.
6
MONARCH FUNDS - -------------------------------------------------------------------------------- Statements of Assets and Liabilities - -------------------------------------------------------------------------------- February 29, 2004 DAILY ASSETS DAILY ASSETS GOVERNMENT DAILY ASSETS DAILY ASSETS TREASURY OBLIGATIONS GOVERNMENT CASH FUND FUND FUND FUND ---------------- ---------------- ---------------- ---------------- Assets Investments: Securities at amortized cost $ 199,751,069 $ 22,192,636 $ 237,456,039 $ 369,969,436 Repurchase agreements 73,125,000 - 43,453,000 104,994,000 Cash 34,241 625 34,174 28,910 Receivables: Interest 5,959 571 163,216 199,436 Investment securities sold - - 1,861,555 - Prepaid expenses and other assets 1,758 18,344 8,291 54,407 ---------------- ---------------- ---------------- ---------------- Total Assets 272,918,027 22,212,176 282,976,275 475,246,189 ---------------- ---------------- ---------------- ---------------- Liabilities Payables: Dividends 114,392 15,081 164,360 174,391 Accrued expenses: Payables to related parties 37,373 220 42,280 78,922 Trustees' fees and expenses 4,233 275 6,415 7,423 Other expenses 84,688 568 135,976 189,906 Other liabilities - - 40,603 - ---------------- ---------------- ---------------- ---------------- Total Liabilities 240,686 16,144 389,634 450,642 ---------------- ---------------- ---------------- ---------------- Net Assets $ 272,677,341 $ 22,196,032 $ 282,586,641 $ 474,795,547 ================ ================ ================ ================ Components of Net Assets Paid in capital $ 272,677,459 $ 22,220,095 $ 282,615,206 $ 474,807,734 Undistributed (distributions in excess of net investment income) (82) 149 (30,777) (546) Accumulated net realized gain (loss) (36) (24,212) 2,212 (11,641) ---------------- ---------------- ---------------- ---------------- Net Assets $ 272,677,341 $ 22,196,032 $ 282,586,641 $ 474,795,547 ================ ================ ================ ================ Net Assets by Class of Shares Preferred Shares $ - $ - $ 9,648,679 $ 5,044,421 Universal Shares 151,832,971 22,196,032 82,137,096 81,478,913 Institutional Service Shares 24,441,853 - 51,383,163 24,941,731 Institutional Shares - - 82,812,865 102,025,256 Investor Shares 96,402,517 - 56,604,838 261,305,226 ---------------- ---------------- ---------------- ---------------- Net Assets $ 272,677,341 $ 22,196,032 $ 282,586,641 $ 474,795,547 ================ ================ ================ ================ Shares of Beneficial Interest for each Class of Shares Preferred Shares - - 9,647,881 5,044,810 Universal Shares 151,842,000 22,219,919 82,176,576 81,498,036 Institutional Service Shares 24,435,507 - 51,383,243 24,946,912 Institutional Shares - - 82,807,813 102,040,672 Investor Shares 96,399,964 - 56,599,706 261,353,989 Net Asset Value Per Share (Offering and Redemption Price per Share) for each Class of Shares $ 1.00 $ 1.00 $ 1.00 $ 1.00
See Notes to Financial Statements. 7
MONARCH FUNDS - -------------------------------------------------------------------------------- Statements of Operations - -------------------------------------------------------------------------------- Six Months Ended February 29, 2004 DAILY ASSETS DAILY ASSETS GOVERNMENT DAILY ASSETS DAILY ASSETS TREASURY OBLIGATIONS GOVERNMENT CASH FUND FUND FUND FUND ---------------- ---------------- ---------------- ---------------- Investment Income: Interest income $ 1,284,966 $ 116,337 $ 5,004,153 $ 3,115,453 Dividend income 24,296 3,106 23,756 25,392 ------------- -------------- -------------- -------------- Total Investment Income 1,309,262 119,443 5,027,909 3,140,845 ------------- -------------- -------------- -------------- Expenses: Investment advisory 48,004 5,794 165,369 99,778 Administration Preferred Shares - - 311,053 5,015 Universal Shares 75,214 12,747 66,507 60,464 Institutional Service Shares 15,849 - 44,827 19,936 Institutional Shares - - 44,913 48,924 Investor Shares 55,349 - 35,616 169,796 Shareholder services Institutional Service Shares 28,819 - 81,503 36,269 Institutional Shares - - 81,659 89,003 Investor Shares 100,631 - 64,757 308,661 Distribution Investor Shares 125,787 - 80,945 385,823 Transfer agency Preferred Shares - - 12,556 3,612 Universal Shares 41,738 14,130 38,163 34,576 Institutional Service Shares 20,249 - 46,646 23,536 Institutional Shares - - 87,977 96,635 Investor Shares 110,860 - 71,026 325,652 Custody 16,638 1,449 57,152 34,562 Professional services 12,035 14,423 13,313 14,981 Accounting 36,508 19,958 51,104 52,342 Trustees' fees and expenses 350 125 4,976 3,041 Miscellaneous 20,190 5,435 46,341 57,464 ------------- -------------- -------------- -------------- Total Expenses 708,221 74,061 1,406,403 1,870,070 Expenses reimbursed and fees waived (80,373) (50,496) (269,378) (115,505) ------------- -------------- -------------- -------------- Net Expenses 627,848 23,565 1,137,025 1,754,565 ------------- -------------- -------------- -------------- Net Investment Income 681,414 95,878 3,890,884 1,386,280 ------------- -------------- -------------- -------------- Net Realized Gain (Loss) on Investments - 40 1,250 (333) ------------- -------------- -------------- -------------- Increase in Net Assets from Operations $ 681,414 $ 95,918 $ 3,892,134 $ 1,385,947 ============= ============== ============== ==============
See Notes to Financial Statements. 8
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 29, 2004 AUGUST 31, 2003 FEBRUARY 29, 2004 AUGUST 31, 2003 ------------------------------------- ------------------------------------- Operations Net investment income $ 681,414 $ 1,031,564 $ 95,878 $ 312,641 Net realized gain (loss) on investments - - 40 - Net realized gain (loss) on investments from Portfolios - (40) - (10) ---------------- ------------------ --------------- ----------------- Increase in Net Assets from Operations 681,414 1,031,524 95,918 312,631 ---------------- ------------------ --------------- ----------------- Distributions to Shareholders from Net investment income--Universal Shares (538,216) (256,355) (105,653) (308,095) (d) Net investment income--Institutional Service Shares (77,665) (272,364) (b) - (13,659) (c) Net investment income--Investor Shares (75,226) (511,818) - (2,232) (c) Net investment income--Service Shares (a) - (6,421) - - ---------------- ------------------ --------------- ----------------- Total Distributions to Shareholders (691,107) (1,046,958) (105,653) (323,986) ---------------- ------------------ --------------- ----------------- Capital Share Transactions Sale of shares--Universal Shares 145,224,825 63,758,141 8,232,689 23,392,457 (d) Sale of shares--Institutional Service Shares 165,165,328 788,768,505 (b) - 960,790 (c) Sale of shares--Investor Shares 878,715,216 2,221,411,726 - 517,114 (c) Sale of shares--Service Shares (a) - 29,717,963 - - Reinvestment of distributions--Universal Shares 349 4,620 2,093 3,444 (d) Reinvestment of distributions--Institutional Service Shares 31,875 106,985 (b) - 13,655 (c) Reinvestment of distributions--Investor Shares 61,227 511,763 - 2,225 (c) Reinvestment of distributions--Service Shares (a) - 6,421 - - Redemption of shares--Universal Shares (133,524,467) (60,521,256) (10,781,064) (24,392,971) (d) Redemption of shares--Institutional Service Shares (175,828,163) (781,026,237) (b) - (2,726,685) (c) Redemption of shares--Investor Shares (879,197,190) (2,258,845,469) - (910,051) (c) Redemption of shares--Service Shares (a) - (32,233,218) - - Transactions due to reorganization--Universal Shares (Notes 1 and 5) - 136,794,829 - - Transactions due to reorganization--Institutional Service Shares (Notes 1 and 5) - 7,158,960 - - ---------------- ------------------ --------------- ----------------- Increase (Decrease) from Capital Transactions 649,000 115,613,733 (2,546,282) (3,140,022) ---------------- ------------------ --------------- ----------------- Increase (Decrease) in Net Assets 639,307 115,598,299 (2,556,017) (3,151,377) ---------------- ------------------ --------------- ----------------- Net Assets Beginning of Period 272,038,034 156,439,735 24,752,049 27,903,426 ---------------- ------------------ --------------- ----------------- End of Period $ 272,677,341 $ 272,038,034 $ 22,196,032 $ 24,752,049 ================ ================== =============== ================= Undistributed (distributions in excess of) Net Investment Income $ (82) $ 9,611 $ 149 $ 9,924 ---------------- ------------------ --------------- ----------------- (a) On February 10, 2003, Service Shares ceased operations. (b) On April 23, 2003, Institutional Shares were renamed Institutional Service Shares. (c) On June 26, 2003, Institutional Service Shares and Investor Shares ceased operations. (d) On July 22, 2003, Institutional Shares were redesignated as Universal Shares.
See Notes to Financial Statements. 9
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 29, 2004 AUGUST 31, 2003 FEBRUARY 29, 2004 AUGUST 31, 2003 ------------------------------------- ------------------------------------- Share Transactions Sale of shares--Universal Shares 145,224,827 63,758,144 8,232,688 23,392,207 (d) Sale of shares--Institutional Service Shares 165,165,327 788,768,505 (b) - 960,024 (c) Sale of shares--Investor Shares 878,715,216 2,221,411,726 - 516,995 (c) Sale of shares--Service Shares (a) - 29,717,963 - - Reinvestment of distributions--Universal Shares 349 4,621 2,093 3,444 (d) Reinvestment of distributions--Institutional Service Shares 31,875 106,985 (b) - 13,655 (c) Reinvestment of distributions--Investor Shares 61,227 511,763 - 2,225 (c) Reinvestment of distributions--Service Shares (a) - 6,421 - - Redemption of shares--Universal Shares (133,524,467) (60,521,256) (10,781,064) (24,392,203) (d) Redemption of shares--Institutional Service Shares (175,828,163) (781,026,237)(b) - (2,726,685) (c) Redemption of shares--Investor Shares (879,197,190) (2,258,845,469) - (910,046) (c) Redemption of shares--Service Shares (a) - (32,233,218) - - Transactions due to reorganization--Universal Shares (Notes 1 and 5) - 136,795,448 - - Transactions due to reorganization--Institutional Service Shares (Notes 1 and 5) - 7,158,341 - - --------------- ------------------ --------------- ----------------- Increase (Decrease) in Shares 649,001 115,613,737 (2,546,283) (3,140,384) =============== ================== =============== ================= (a) On February 10, 2003, Service Shares ceased operations. (b) On April 23, 2003, Institutional Shares were renamed Institutional Service Shares. (c) On June 26, 2003, Institutional Service Shares and Investor Shares ceased operations. (d) On July 22, 2003, Institutional Shares were redesignated as Universal Shares.
See Notes to Financial Statements. 10
MONARCH FUNDS - -------------------------------------------------------------------------------- Statements of Changes in Net Assets - -------------------------------------------------------------------------------- DAILY ASSETS DAILY ASSETS GOVERNMENT FUND CASH FUND ------------------------------------- ------------------------------------- SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED FEBRUARY 29, 2004 AUGUST 31, 2003 FEBRUARY 29, 2004 AUGUST 31, 2003 ------------------------------------- ------------------------------------- Operations Net investment income $ 3,890,884 $ 3,387,985 $ 1,386,280 $ 6,339,246 Net realized gain (loss) on investments 1,250 - (333) (5,268) Net realized gain (loss) on investments allocated from Portfolios - 1,354 - (5,698) ---------------- -------------- ---------------- ---------------- Increase in Net Assets from Operations 3,892,134 3,389,339 1,385,947 6,328,280 ---------------- -------------- ---------------- ---------------- Distributions to Shareholders from Net investment income--Preferred Shares (2,777,795) (621,089) (45,598) (151,590) Net investment income--Universal Shares (544,945) (1,413,090) (512,475) (1,103,415) Net investment income--Institutional Service Shares (265,287) (110,393)(b) (124,272) (57,923)(b) Net investment income--Institutional Shares (217,458) (880,906) (250,303) (1,997,736) Net investment income--Investor Shares (85,120) (370,340) (454,178) (3,058,136) Net investment income--Service Shares (a) - (3,730) - (8,311) ---------------- -------------- ---------------- ---------------- Total Distributions to Shareholders (3,890,605) (3,399,548) (1,386,826) (6,377,111) ---------------- -------------- ---------------- ---------------- Capital Share Transactions Sale of shares--Preferred Shares 3,746,790,145 774,265,384 72,380,843 134,949,972 Sale of shares--Universal Shares 206,294,126 618,388,835 853,405,167 545,045,220 Sale of shares--Institutional Service Shares 189,497,382 97,674,061 (b) 188,719,213 79,389,684 (b) Sale of shares--Institutional Shares 410,320,519 634,925,725 457,128,096 934,006,867 Sale of shares--Investor Shares 456,403,094 860,191,768 2,579,921,946 5,847,733,697 Sale of shares--Service Shares (a) - 32,275,958 - 35,906,214 Reinvestment of distributions--Preferred Shares 2,733,229 598,859 19,606 90,085 Reinvestment of distributions--Universal Shares 209,680 1,221,360 269,719 904,881 Reinvestment of distributions--Institutional Service Shares 69,914 46,875 (b) 87,951 54,087 (b) Reinvestment of distributions--Institutional Shares 110,900 584,103 140,933 1,578,425 Reinvestment of distributions--Investor Shares 69,768 370,394 361,894 2,870,274 Reinvestment of distributions--Service Shares (a) - 3,730 - 8,312 Redemption of shares--Preferred Shares (3,751,424,481) (775,355,933) (70,335,289) (145,153,730) Redemption of shares--Universal Shares (238,539,723) (652,099,960) (877,036,679) (530,370,168) Redemption of shares--Institutional Service Shares (214,457,752) (84,691,606)(b) (200,741,295) (72,324,735)(b) Redemption of shares--Institutional Shares (418,358,970) (662,241,985) (447,429,982) (1,190,855,020) Redemption of shares--Investor Shares (447,250,885) (872,270,125) (2,622,367,197) (6,194,764,416) Redemption of shares--Service Shares (a) - (33,658,096) - (43,608,634) Transactions due to reorganization--Universal Shares (Notes 1 and 5) - 65,240,533 - 42,432,455 Transactions due to reorganization--Institutional Service Shares (Notes 1 and 5) - 63,244,162 - 29,757,106 Transactions due to reorganization--Investor Shares (Notes 1 and 5) - 695,432 - 1,292,555 ---------------- -------------- ---------------- ---------------- Increase (Decrease) Decrease from Capital Transactions (57,533,054) 69,409,474 (65,475,074) (521,056,869) ---------------- -------------- ---------------- ---------------- Increase (Decrease) in Net Assets (57,531,525) 69,399,265 (65,475,953) (521,105,700) ---------------- -------------- ---------------- ---------------- Net Assets Beginning of Period 340,118,166 270,718,901 540,271,500 1,061,377,200 ---------------- -------------- ---------------- ---------------- End of Period $ 282,586,641 $ 340,118,166 $ 474,795,547 $ 540,271,500 ================ ============== ================ ================ Undistributed (distributions in excess of) Net Investment Income $ (30,777) $ (31,056) $ (546) $ - ---------------- -------------- ---------------- ---------------- (a) On February 10, 2003, Service Shares ceased operations. (b) On June 9, 2003, Institutional Service Shares commenced operations.
See Notes to Financial Statements. 11
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 29, 2004 AUGUST 31, 2003 FEBRUARY 29, 2004 AUGUST 31, 2003 ------------------------------------- ------------------------------------- Share Transactions Sale of shares--Preferred Shares 3,746,790,145 774,265,384 72,380,844 134,949,972 Sale of shares--Universal Shares 206,294,127 618,388,835 853,405,167 545,045,222 Sale of shares--Institutional Service Shares 189,497,382 97,674,061 (b) 188,719,213 79,389,684 (b) Sale of shares--Institutional Shares 410,320,519 634,925,725 457,128,096 934,006,868 Sale of shares--Investor Shares 456,403,094 860,191,768 2,579,921,947 5,847,733,697 Sale of shares--Service Shares (a) - 32,275,958 - 35,906,215 Reinvestment of distributions--Preferred Shares 2,733,229 598,859 19,606 90,085 Reinvestment of distributions--Universal Shares 209,680 1,221,360 269,719 904,881 Reinvestment of distributions--Institutional Service Shares 69,914 46,875 (b) 87,951 54,087 (b) Reinvestment of distributions--Institutional Shares 110,900 584,103 140,933 1,578,426 Reinvestment of distributions--Investor Shares 69,768 370,394 361,894 2,870,274 Reinvestment of distributions--Service Shares (a) - 3,730 - 8,311 Redemption of shares--Preferred Shares (3,751,424,481) (775,355,933) (70,335,289) (145,153,307) Redemption of shares--Universal Shares (238,539,723) (652,099,960) (877,036,679) (530,355,298) Redemption of shares--Institutional Service Shares (214,457,752) (84,691,606)(b) (200,741,295) (72,319,505) (b) Redemption of shares--Institutional Shares (418,358,970) (662,241,985) (447,429,982) (1,190,841,943) Redemption of shares--Investor Shares (447,250,885) (872,270,125) (2,622,367,197) (6,194,721,376) Redemption of shares--Service Shares (a) - (33,658,096) - (43,608,634) Transactions due to reorganization--Universal Shares (Notes 1 and 5) - 65,240,211 - 42,433,148 Transactions due to reorganization--Institutional Service Shares (Notes 1 and 5) - 63,244,369 - 29,756,777 Transactions due to reorganization--Investor Shares (Notes 1 and 5) - 695,485 - 1,292,578 ---------------- -------------- ---------------- --------------- Increase (Decrease) in Shares (57,533,053) 69,409,412 (65,475,072) (520,979,838) ================ ============== ================ =============== (a) On February 10, 2003, Service Shares ceased operations. (b) On June 9, 2003, Institutional Service Shares commenced operations.
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. RATIOS/SUPPLEMENTAL SELECTED DATA FOR A SINGLE SHARE DATA ------------------------------------------------ ----------------------- Ratios to Average Net Assets (a) Beginning Net Distri- Distri- Ending Net Assets ----------------------- Net Asset Net Realized butions butions Net Asset at End Net Value Per Investment Gain on from Net from Net Value of Period Invest Gross Year Ended August 31, Share Income Invest- Investment Realized Per Share Total (000's Net -ment Expenses (except as noted) ments Income Gains Return (b) Omitted) Expenses Income (c) - ---------------------------------------------------------------------------------------------------------------------------------- DAILY ASSETS TREASURY FUND Universal Shares - ---------------------------------------------------------------------------------------------------------------------------------- Six months ended February 29, 2004 $ 1.00 - (e) - - (e) - $1.00 0.39% $151,833 0.20% 0.78% 0.27% 2003 1.00 0.01 - (0.01) - 1.00 1.10% 140,137 0.21% 0.80% 0.37% 2002 1.00 0.02 - (e) (0.02) - (e) 1.00 1.82% 105 0.20% 1.81% 8.77% 2001 1.00 0.05 - (0.05) - 1.00 5.24% 102 0.20% 6.22% 0.92% 2000 (d) 1.00 0.04 - (0.04) - 1.00 4.02% 5,976 0.20% 5.86% 0.38% Institutional Service Shares (f) - ---------------------------------------------------------------------------------------------------------------------------------- Six months ended February 29, 2004 1.00 - (e) - - (e) - 1.00 0.27% 24,442 0.45% 0.53% 0.56% 2003 1.00 0.01 - (0.01) - 1.00 0.84% 35,074 0.45% 0.84% 0.67% 2002 1.00 0.02 - (e) (0.02) - (e) 1.00 1.57% 20,068 0.45% 1.68% 0.62% 2001 1.00 0.05 - (0.05) - 1.00 4.92% 50,554 0.45% 4.57% 0.61% 2000 1.00 0.05 - (0.05) - 1.00 5.47% 30,480 0.45% 5.30% 0.62% 1999 1.00 0.04 - (e) (0.04) - (e) 1.00 4.50% 55,134 0.45% 4.43% 0.62% Investor Shares - ---------------------------------------------------------------------------------------------------------------------------------- Six months ended February 29, 2004 1.00 - (e) - - (e) - 1.00 0.07% 96,402 0.84% 0.14% 0.88% 2003 1.00 - (e) - - (e) - 1.00 0.45% 96,827 0.84% 0.45% 0.90% 2002 1.00 0.01 - (e) (0.01) - (e) 1.00 1.17% 133,758 0.85% 1.22% 0.87% 2001 1.00 0.04 - (0.04) - 1.00 4.52% 233,138 0.84% 4.52% 0.84% 2000 1.00 0.05 - (0.05) - 1.00 5.06% 314,305 0.84% 5.01% 0.85% 1999 1.00 0.04 - (e) (0.04) - (e) 1.00 4.10% 232,624 0.83% 4.02% 0.89% DAILY ASSETS GOVERNMENT OBLIGATIONS FUND Universal Shares (g) - ---------------------------------------------------------------------------------------------------------------------------------- Six months ended February 29, 2004 1.00 - (e) - (e) - (e) - 1.00 0.45% 22,196 0.20% 0.83% 0.64% 2003 1.00 0.01 - (0.01) - 1.00 1.18% 24,752 0.20% 1.14% 0.48% 2002 1.00 0.02 - (0.02) - 1.00 1.97% 25,760 0.20% 1.97% 0.71% 2001 1.00 0.05 - (0.05) - 1.00 5.26% 29,100 0.20% 5.24% 0.57% 2000 1.00 0.06 - (0.06) - 1.00 5.93% 39,777 0.20% 5.78% 0.65% 1999 1.00 0.05 - (0.05) - 1.00 4.92% 28,709 0.20% 4.81% 0.61% (a) All ratios for periods less than a year are annualized. (b) Not annualized. (c) The ratio of Gross Expenses to Average Net Assets reflects the expense ratio excluding any fee waivers and/or expense reimbursements. (d) See Note 1 for dates of commencement of operations. (e) Less than $0.01 per share. (f) On April 23, 2003, Institutional Shares were renamed Institutional Service Shares. (g) On July 22, 2003, Institutional Shares were redesignated as Universal Shares.
See Notes To Financial Statements. 13
MONARCH FUNDS - -------------------------------------------------------------------------------- Financial Highlights - -------------------------------------------------------------------------------- These financial highlights reflect selected data for an outstanding share of each class of each Fund during the periods indicated. Ratios/Supplemental SELECTED DATA FOR A SINGLE SHARE DATA ------------------------------------------------ ----------------------- Ratios to Average Net Assets (a) Beginning Net Distri- Distri- Ending Net Assets ----------------------- Net Asset Net Realized butions butions Net Asset at End Net Value Per Investment Gain on from Net from Net Value of Period Invest Gross Year Ended August 31, Share Income Invest- Investment Realized Per Share Total (000's Net -ment Expenses (except as noted) ments Income Gains Return (b) Omitted) Expenses Income (c) - ---------------------------------------------------------------------------------------------------------------------------------- DAILY ASSETS GOVERNMENT FUND Preferred Shares - ------------------------------------------------------------------------------------------------------------------------------------ Six months ended February 29, 2004 $1.00 - (e) - (e) - (e) - $1.00 0.49% $9,649 0.11% 0.98% 0.18% 2003 1.00 0.01 - (0.01) - 1.00 1.40% 11,549 0.11% 1.05% 0.25% 2002 1.00 0.02 - (e) (0.02) - (e) 1.00 2.25% 12,041 0.12% 2.19% 0.22% 2001 (d) 1.00 - (e) - - (e) - 1.00 0.22% 8 0.12% 3.64% 97.77% Universal Shares - ------------------------------------------------------------------------------------------------------------------------------------ Six months ended February 29, 2004 1.00 - (e) - (e) - (e) - 1.00 0.45% 82,137 0.20% 0.90% 0.26% 2003 1.00 0.01 - (0.01) - 1.00 1.29% 114,173 0.20% 1.26% 0.28% 2002 1.00 0.02 - (e) (0.02) - (e) 1.00 2.17% 81,426 0.21% 2.17% 0.25% 2001 1.00 0.05 - (0.05) - 1.00 5.34% 164,500 0.20% 5.29% 0.23% 2000 1.00 0.06 - (0.06) - 1.00 5.94% 225,697 0.20% 5.73% 0.24% 1999 1.00 0.05 - (0.05) - 1.00 5.00% 277,549 0.18% 4.88% 0.25% Institutional Service Shares - ------------------------------------------------------------------------------------------------------------------------------------ Six months ended February 29, 2004 1.00 - (e) - (e) - (e) - 1.00 0.33% 51,383 0.45% 0.65% 0.51% 2003 (d) 1.00 - (e) - - (e) - 1.00 0.16% 76,273 0.45% 0.70% 0.58% Institutional Shares - ------------------------------------------------------------------------------------------------------------------------------------ Six months ended February 29, 2004 1.00 - (e) - (e) - (e) - 1.00 0.27% 82,813 0.57% 0.53% 0.62% 2003 1.00 0.01 - (0.01) - 1.00 0.91% 90,740 0.57% 0.92% 0.63% 2002 1.00 0.02 - (e) (0.02) - (e) 1.00 1.80% 117,476 0.57% 2.05% 0.59% 2001 1.00 0.05 - (0.05) - 1.00 4.95% 198,324 0.57% 4.80% 0.58% 2000 1.00 0.05 - (0.05) - 1.00 5.54% 400,418 0.57% 5.41% 0.58% 1999 1.00 0.05 - (0.05) - 1.00 4.59% 455,239 0.57% 4.50% 0.59% Investor Shares - ------------------------------------------------------------------------------------------------------------------------------------ Six months ended February 29, 2004 1.00 - (e) - (e) - (e) - 1.00 0.13% 56,605 0.84% 0.26% 0.87% 2003 1.00 0.01 - (0.01) - 1.00 0.64% 47,383 0.84% 0.63% 0.89% 2002 1.00 0.02 - (e) (0.02) - (e) 1.00 1.52% 58,397 0.85% 1.43% 0.85% 2001 1.00 0.05 - (0.05) - 1.00 4.68% 61,546 0.84% 4.51% 0.84% 2000 (d) 1.00 0.04 - (0.04) - 1.00 3.68% 36,091 0.85% 5.70% 0.97% (a) All ratios for periods less than a year are annualized. (b) Not annualized. (c) The ratio of Gross Expenses to Average Net Assets reflects the expense ratio excluding any fee waivers and/or expense reimbursements. (d) See Note 1 for dates of commencement of operations. (e) Less than $0.01 per share.
See Notes to Financial Statements. 14
MONARCH FUNDS - -------------------------------------------------------------------------------- Financial Highlights - -------------------------------------------------------------------------------- These financial highlights reflect selected data for an outstanding share of each class of each Fund during the periods indicated. RATIOS/SUPPLEMENTAL SELECTED DATA FOR A SINGLE SHARE DATA ------------------------------------------------ ----------------------- Ratios to Average Net Assets (a) Beginning Net Distri- Distri- Ending Net Assets ----------------------- Net Asset Net Realized butions butions Net Asset at End Net Value Per Investment Gain on from Net from Net Value of Perio d Invest Gross Year Ended August 31, Share Income Invest- Investment Realized Per Share Total (000's Net -ment Expenses (except as noted) ments Income Gains Return (b) Omitted) Expenses Income (c) - ---------------------------------------------------------------------------------------------------------------------------------- DAILY ASSETS CASH FUND Preferred Shares - ------------------------------------------------------------------------------------------------------------------------------------ Six months ended February 29, 2004 $1.00 0.01 - (e) (0.01) - $1.00 0.51% $5,045 0.12% 1.00% 0.27% 2003 1.00 0.01 - (0.01) - 1.00 1.37% 2,979 0.12% 1.39% 0.30% 2002 1.00 0.02 - (0.02) - 1.00 2.21% 13,095 0.12% 1.88% 0.20% 2001 (d) 1.00 - (e) - - (e) - 1.00 0.22% 8 0.12% 3.76% 91.14% Universal Shares - ------------------------------------------------------------------------------------------------------------------------------------ Six months ended February 29, 2004 1.00 - (e) - (e) - (e) - 1.00 0.47% 81,479 0.20% 0.93% 0.27% 2003 1.00 0.01 - (0.01) - 1.00 1.29% 104,842 0.20% 1.24% 0.28% 2002 1.00 0.02 - (0.02) - 1.00 2.12% 46,833 0.21% 2.03% 0.25% 2001 1.00 0.05 - (0.05) - 1.00 5.49% 37,236 0.20% 5.68% 0.24% 2000 1.00 0.06 - (0.06) - 1.00 6.04% 70,451 0.20% 5.84% 0.23% 1999 1.00 0.05 - (0.05) - 1.00 5.09% 98,705 0.18% 4.99% 0.25% Institutional Service Shares - ------------------------------------------------------------------------------------------------------------------------------------ Six months ended February 29, 2004 1.00 - (e) - (e) - (e) - 1.00 0.34% 24,942 0.45% 0.69% 0.53% 2003 (d) 1.00 - (e) - - (e) - 1.00 0.18% 36,876 0.45% 0.76% 0.58% Institutional Shares - ------------------------------------------------------------------------------------------------------------------------------------ Six months ended February 29, 2004 1.00 - (e) - (e) - (e) - 1.00 0.28% 102,025 0.57% 0.56% 0.64% 2003 1.00 0.01 - (0.01) - 1.00 0.92% 92,186 0.57% 1.01% 0.61% 2002 1.00 0.02 - (0.02) - 1.00 1.75% 347,469 0.57% 1.84% 0.58% 2001 1.00 0.05 - (0.05) - 1.00 5.11% 736,555 0.57% 5.07% 0.57% 2000 1.00 0.06 - (0.06) - 1.00 5.65% 863,603 0.58% 5.55% 0.58% 1999 1.00 0.05 - (0.05) - 1.00 4.68% 569,409 0.57% 4.56% 0.60% Investor Shares - ------------------------------------------------------------------------------------------------------------------------------------ Six months ended February 29, 2004 1.00 - (e) - (e) - (e) - 1.00 0.15% 261,305 0.84% 0.29% 0.86% 2003 1.00 0.01 - (0.01) - 1.00 0.64% 303,389 0.84% 0.68% 0.86% 2002 1.00 0.01 - (0.01) - 1.00 1.48% 646,285 0.83% 1.51% 0.83% 2001 1.00 0.05 - (0.05) - 1.00 4.85% 791,138 0.82% 4.78% 0.82% 2000 1.00 0.05 - (0.05) - 1.00 5.38% 994,191 0.83% 5.40% 0.85% 1999 1.00 0.04 - (0.04) - 1.00 4.41% 269,421 0.83% 4.30% 0.85% (a) All ratios for periods less than a year are annualized. (b) Not annualized. (c) The ratio of Gross Expenses to Average Net Assets reflects the expense ratio excluding any fee waivers and/or expense reimbursements. (d) See Note 1 for dates of commencement of operations. (e) Less than $0.01 per share.
See Notes To Financial Statements. 15 MONARCH FUNDS - -------------------------------------------------------------------------------- Notes to Financial Statements - -------------------------------------------------------------------------------- February 29, 2004 NOTE 1. SUMMARY OR 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, 2004, and the dates on which they commenced operations were as follows:
Daily Assets Treasury Fund Universal Shares December 30, 1999 Daily Assets Treasury Fund Institutional Service Shares July 12, 1993 Daily Assets Treasury Fund Investor Shares October 25, 1995 Daily Assets Government Obligations Universal Shares March 13, 1998 Daily Assets Government Fund Preferred Shares August 10, 2001 Daily Assets Government Fund Universal Shares October 29, 1992 Daily Assets Government Fund Institutional Service Shares June 9, 2003 Daily Assets Government Fund Institutional Shares July 15, 1993 Daily Assets Government Fund Investor Shares December 30, 1999 Daily Assets Cash Fund Preferred Shares August 10, 2001 Daily Assets Cash Fund Universal Shares December 1, 1992 Daily Assets Cash Fund Institutional Service Shares June 9, 2003 Daily Assets Cash Fund Institutional Shares July 15, 1993 Daily Assets Cash Fund Investor Shares June 16, 1995
Prior to June 9, 2003, the Funds operated under a master-feeder fund structure whereby they sought to achieve their respective investment objectives by investing all of their investable assets in separate portfolios (each a "Portfolio") of another registered open-end management investment company whose series had the same investment objective and policies as the Funds. Each Fund now invests directly in portfolio securities. On July 22, 2003, Daily Assets Government Obligations Fund, a newly created series of the Trust, merged with Daily Assets Government Fund (the "Forum Fund"), a series of Forum Funds, another registered investment company. Daily Assets Government Obligations Fund was the accounting successor of that merger and, thus, the financial information reported in the financial statements prior to July 23, 2003, reflects the history of the Forum Fund. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES These financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, 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 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. 16 MONARCH FUNDS - -------------------------------------------------------------------------------- Notes to Financial Statements - -------------------------------------------------------------------------------- February 29, 2004 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 Fund's class-specific expenses include administration fees, transfer agency fees and certain expenses determined by the Trust's Board. Institutional Service Shares, Institutional Shares, and Investor Shares incur shareholder servicing fees and Investor 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. 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 of America. These differences are due primarily to differing treatments of income and gain on various investment securities held by each Fund, timing differences and differing characterizations of distributions made by the Fund. NOTE 3. INVESTMENT ADVISORY AND OTHER SERVICES INVESTMENT ADVISER Forum Investment Advisors, LLC (the "Adviser") serves as 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 those 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 Forum Administrative Services, LLC (the "Administrator") and its affiliates provide certain administration, portfolio accounting and transfer agency services to each Fund. SHAREHOLDER SERVICES The Funds pay 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. These fees are paid to various financial institutions that provide shareholder services. DISTRIBUTION Forum Fund Services, LLC is the Trust's distributor (the "Distributor"). The Distributor is not affiliated with the Adviser or with the Administrator or its affiliated companies. Under a Distribution Plan adopted pursuant to Rule 12b-1 under the Act, the Trust pays the Distributor a fee at an annual rate of 0.25% of the average daily net assets of Investor Shares of each 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. 17 MONARCH FUNDS - -------------------------------------------------------------------------------- Notes to Financial Statements - -------------------------------------------------------------------------------- February 29, 2004 NOTE 4. WAIVER OF FEES / REIMBURSEMENT OF EXPENSES The Adviser, the Administrator, and the Distributor voluntarily waived a portion of their fees and assumed certain expenses of the Funds. For the period ended February 29, 2004, 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 -------------- ----------------- ----------------- ------------- Investment Adviser $ -- $ 5,794 $ -- $ -- Administration 11,692 12,627 196,440 10,794 Shareholder Service 33,878 -- 46,669 74,434 Transfer Agency 34,189 8,409 26,269 30,277 Distribution 614 -- -- -- Portfolio Accounting -- 18,429 -- -- Reimbursed Expenses -- 5,237 -- -- ---------- ---------- --------- ---------- Total $ 80,373 $ 50,496 $269,378 $115,505 ========== ========== ========= ==========
NOTE 5. REORGANIZATIONS On June 9, 2003, Daily Assets Treasury Fund, Daily Assets Government Fund and Daily Assets Cash Fund (the "Monarch Funds") acquired all the net assets of Daily Assets Treasury Obligations Fund, Daily Assets Government Obligations Fund and Daily Assets Cash Fund (the "Forum Funds"), respectively. Under the reorganization plan, shareholders of Forum Funds received shares of corresponding series of Monarch Funds with a value equal to their holdings in Forum Funds. The transaction was structured for tax purposes to qualify as a tax-free reorganization under the Internal Revenue Code. After the reorganization plan was consummated, each Fund redeemed its investment in its respective Portfolio and began investing directly in investment securities. A summary of shares outstanding and net assets immediately before and after the reorganization is as follows:
BEFORE REORGANIZATION AFTER REORGANIZATION ---------------------------------- ----------------- DAILY ASSETS DAILY ASSETS TREASURY TREASURY TREASURY CASH FUND OBLIGATIONS FUND FUND ------------- ------------------- ----------------- Universal Shares Shares Outstanding 105,259 -- 136,900,707 Net Assets $ 105,259 -- $136,900,088 Institutional Service Shares Shares Outstanding 23,982,275 7,158,341 31,140,616 Net Assets $ 23,990,029 $ 7,158,960 $ 31,148,989 Institutional Shares Shares Outstanding -- 136,795,448 -- Net Assets -- $136,794,829 -- Investor Shares Shares Outstanding 125,118,384 -- 125,118,384 Net Assets $125,127,133 -- $125,127,133 Shareholders of Institutional Shares and Institutional Service Shares of Daily Assets Treasury Obligations Fund received Universal Shares and Institutional Service Shares, respectively, of Daily Assets Treasury Fund. 18 MONARCH FUNDS - -------------------------------------------------------------------------------- Notes to Financial Statements - -------------------------------------------------------------------------------- February 29, 2004 BEFORE REORGANIZATION AFTER REORGANIZATION ---------------------------------- -------------------- DAILY ASSETS DAILY ASSETS GOVERNMENT GOVERNMENT GOVERNMENT CASH FUND OBLIGATIONS FUND FUND ------------- -------------------- -------------------- Preferred Shares Shares Outstanding 1,001 -- 1,001 Net Assets $ 1,001 -- $ 1,001 Universal Shares Shares Outstanding 70,662,649 -- 135,902,860 Net Assets $ 70,622,707 -- $135,863,240 Institutional Service Shares Shares Outstanding 63,244,369 63,244,369 -- Net Assets $ 63,244,162 $ 63,244,162 -- Institutional Shares Shares Outstanding 93,296,961 65,240,211 93,296,961 Net Assets $ 93,301,899 $ 65,240,533 $ 93,301,899 Investor Shares Shares Outstanding 63,310,358 695,485 64,005,843 Net Assets $ 63,315,472 $ 695,432 $ 64,010,904 Shareholders of Institutional Shares and Investor Shares of Daily Assets Government Obligations Fund received Universal Shares and Investor Shares, respectively, of Daily Assets Government Fund. BEFORE REORGANIZATION AFTER REORGANIZATION ---------------------------------- -------------------- DAILY ASSETS DAILY ASSETS CASH FUND CASH FUND CASH FUND ------------- -------------------- -------------------- Preferred Shares Shares Outstanding 3,938,289 -- 3,938,289 Net Assets $ 3,938,387 -- $ 3,938,387 Universal Shares Shares Outstanding 94,445,145 -- 136,878,293 Net Assets $ 94,442,900 -- $136,875,355 Institutional Service Shares Shares Outstanding -- 29,756,777 29,756,777 Net Assets -- $ 29,757,106 $ 29,757,106 Institutional Shares Shares Outstanding 106,837,539 42,433,148 106,837,539 Net Assets $106,836,012 $ 42,432,455 $106,836,012 Investor Shares Shares Outstanding 358,133,508 1,292,578 359,426,086 Net Assets $358,131,496 $ 1,292,555 $359,424,051 Shareholders of Institutional Shares and Investor Shares of Daily Assets Cash Fund received Universal Shares and Investor Shares, respectively, of Daily Assets Cash Fund.
19 MONARCH FUNDS - -------------------------------------------------------------------------------- Notes to Financial Statements - -------------------------------------------------------------------------------- February 29, 2004 On July 22, 2003, Daily Assets Government Fund, (the "Forum Fund"), reorganized into Daily Assets Government Obligations Fund, a newly created Monarch series, and transferred its assets and liabilities to Daily Assets Government Obligations Fund. As a result, Universal Shares of the Fund acquired the net assets of the Institutional Shares class of the Forum Fund. Financial information reported in the financial statements prior to July 23, 2003, reflects the history of the Forum Fund. A summary of shares outstanding and net assets immediately before and after the reorganization is as follows:
BEFORE REORGANIZATION AFTER REORGANIZATION ----------------------------- -------------------- DAILY ASSETS DAILY ASSETS GOVERNMENT GOVERNMENT OBLIGATIONS FUND FUND ----------------------------- -------------------- Universal Shares Shares Outstanding -- 26,349,971 Net Assets -- $26,338,017 Institutional Shares Shares Outstanding 26,349,971 -- Net Assets $26,338,017 --
Shareholders of Institutional Shares of Daily Assets Government Fund received Universal Shares of Daily Assets Government Obligations Fund. NOTE 6. PROXY VOTING INFORMATION 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 Web site at http://www.sec.gov. 20 FOR MORE INFORMATION MONARCH FUNDS DAILY ASSETS TREASURY FUND DAILY ASSETS GOVERNMENT OBLIGATIONS FUND DAILY ASSETS GOVERNMENT FUND DAILY ASSETS CASH FUND TRANSFER AGENT Forum Shareholder Services, LLC P.O. Box 446 Portland, Maine 04112 DISTRIBUTOR Forum Fund Services, LLC Two Portland Square Portland, Maine 04101 MONARCH FUNDS This report is authorized for distribution only to P.O. Box 446 shareholders and to others who have received a Portland, Maine 04112 copy of an applicable Monarch Funds prospectus. (800) 754-8757 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. Not applicable. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable. ITEM 10. 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 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 the registrant's last fiscal half year that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 11. EXHIBITS. (a)(1) Not applicable. (a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Exhibit filed herewith). (a)(3) Not applicable. (b) Certifications pursuant to 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/ STACEY E. HONG ------------------------- Stacey E. Hong, Treasurer Date MAY 5, 2004 ------------------------- 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/DAVID I. GOLDSTEIN ----------------------------- David I. Goldstein, President Date MAY 5, 2004 ----------------------------- By /s/ STACEY E. HONG ------------------------- Stacey E. Hong, Treasurer Date MAY 5, 2004 ----------------------------- EX-31 2 cert302.txt EXHIBIT 10(A)(2) SECTION 302 CERTIFICATION CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT I, David I. Goldstein, 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, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers 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) 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) NA 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 controls over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second half-year in the case of an annual 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 officers 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: MAY 5, 2004 ----------- /s/DAVID I. GOLDSTEIN - --------------------- TITLE: PRESIDENT 2 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT I, Stacey E. Hong, 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, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers 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) 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) NA 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 controls over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second half-year in the case of an annual 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 officers 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: MAY 5, 2004 ----------- /s/STACEY E. HONG - --------------------- TITLE: TREASURER EX-32 3 cert906.txt EXHIBIT 10(B) SECTION 906 CERTIFICATION 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 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: MAY 5, 2004 ----------- /s/DAVID I. GOLDSTEIN - ---------------------- David I. Goldstein President Dated: MAY 5, 2004 ----------- /s/STACEY E. HONG - ---------------------- Stacey E. Hong Treasurer 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-----