-----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, W0XQcqrHwjOd/JdHMjbBiMMgRLrSvL1NDqA1TrJHdwMVhNdaYzkqzjt8c0WUpTxn IBxO171LuJIoareDcKhfpg== 0001275125-05-000237.txt : 20050504 0001275125-05-000237.hdr.sgml : 20050504 20050504115528 ACCESSION NUMBER: 0001275125-05-000237 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050228 FILED AS OF DATE: 20050504 DATE AS OF CHANGE: 20050504 EFFECTIVENESS DATE: 20050504 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: 05797699 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 mo05-197.txt MONARCH FUNDS SEMI-ANNUAL N-CSR As filed with the Securities and Exchange Commission on May 4, 2005 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 Carl A. Bright, President Two Portland Square Portland, Maine 04101 207-879-1900 Date of fiscal year end: August 31, 2005 Date of reporting period: September 1, 2004 - February 28, 2005 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 28, 2005 (UNAUDITED) DAILY ASSETS TREASURY FUND DAILY ASSETS GOVERNMENT OBLIGATIONS FUND DAILY ASSETS GOVERNMENT FUND DAILY ASSETS CASH FUND [GRAPHIC] MONARCH FUNDS - -------------------------------------------------------------------------------- A MESSAGE TO OUR SHAREHOLDERS February 28, 2005 Dear Shareholders: During the past year, the Federal Reserve has focused its efforts on moving the economy forward, encouraging job growth and combating potential inflationary spikes. In seeking to reach this goal, the Fed increased the Federal Funds rate five times in 2004, to 2.25%. While the Gross Domestic Product has been vibrant over the last 6 months, job growth still remains a point of focus. This rise of rates in the short end of the market has allowed our Portfolio Management team to continue to shorten average maturities of the funds' portfolios without sacrificing yield. We believe the Federal Reserve Bank will continue to raise the Fed Funds rate for the foreseeable future. With our short average maturities, we are well positioned to take advantage of these increases. We are pleased to report that Monarch Daily Assets Government Fund, our oldest fund and performance leader, continued to exhibit relatively strong performance for the six months ended February 28, 2005. For the ten-year period ended as of that date, the Fund's Universal Shares held the number 3 spot out of 48 funds within the Government and Agencies Institutional category tracked by iMoneyNet, Inc.* For more than twelve 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. Monarch Funds *PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND IS NO GUARANTEE OF FUTURE RESULTS. UNIVERSAL SHARES OF DAILY ASSETS GOVERNMENT FUND, RANKED 8 OUT OF 162, 6 OUT OF 99, AND 3 OUT OF 49 WITHIN THE GOVERNMENT AND AGENCIES INSTITUTIONAL CATEGORY FOR THE 1-, 5- AND 10-YEAR PERIODS AS OF MARCH 31, 2005. RANKINGS ARE BASED ON TOTAL RETURN AND WILL VARY FOR OTHER SHARE CLASSES. FORESIDE FUND SERVICES, LLC, DISTRIBUTOR. ALTHOUGH MONEY MARKET FUNDS SEEK TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THEM. AN INVESTMENT IN A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY, AND IS NOT ENDORSED OR GUARANTEED BY ANY BANK OR ANY AFFILIATE OF A BANK. 1 MONARCH FUNDS - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - DAILY ASSETS TREASURY FUND February 28, 2005
FACE AMOUNT SECURITY DESCRIPTION RATE MATURITY VALUE - ----------- -------------------------------------------------------------------------- ----- -------- ----------- REPURCHASE AGREEMENTS - 100.2% $ 4,735,000 Bank of America, dated 2/28/05, to be repurchased at $4,735,325; collateralized by various U.S. Treasury Obligations 2.47% 3/1/05 $ 4,735,000 14,000,000 Citigroup, dated 2/28/05, to be repurchased at $14,000,972; collateralized by various U.S. Treasury Obligations 2.50 3/1/05 14,000,000 15,000,000 Deutsche Bank Securities, Inc., dated 2/28/05, to be repurchased at $15,001,083; collateralized by various U.S. Treasury Obligations 2.60 3/1/05 15,000,000 14,000,000 Goldman Sachs & Co., dated 2/28/05, to be repurchased at $14,000,980; collateralized by various U.S. Treasury Obligations 2.52 3/1/05 14,000,000 14,730,000 Merrill Lynch & Co., Inc., dated 2/28/05, to be repurchased at $14,731,043; collateralized by various U.S. Treasury Obligations 2.55 3/1/05 14,730,000 ----------- Total Repurchase Agreements 62,465,000 ----------- Total Investments at Amortized Cost* - 100.2% $62,465,000 Other Assets and Liabilities - (0.2)% (113,833) ----------- NET ASSETS - 100.0% $62,351,167 =========== PORTFOLIO HOLDINGS % OF TOTAL INVESTMENTS Repurchase Agreements 100.0% * Cost for federal income tax purposes is the same as for financial statement purposes.
See Notes to Financial Statements. 2 MONARCH FUNDS - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - DAILY ASSETS GOVERNMENT OBLIGATIONS FUND February 28, 2005
FACE AMOUNT SECURITY DESCRIPTION RATE MATURITY VALUE - ---------- -------------------------------------------------------------------------- ---- -------- ----------- U.S. GOVERNMENT SECURITIES - 95.8% FEDERAL HOME LOAN BANK - DISCOUNT NOTES # - 95.8% $9,175,000 FHLB 2.42% 03/11/05 $ 9,168,813 4,880,000 FHLB 2.39 03/18/05 4,874,515 3,050,000 FHLB 2.45 03/28/05 3,044,419 ----------- Total U.S. Government Securities 17,087,747 ----------- SHARES - ---------- MONEY MARKET FUND - 4.0% 707,713 Dreyfus Prime Treasury Cash Management Fund 707,713 ----------- Total Investments at Amortized Cost* - 99.8% $17,795,460 Other Assets and Liabilities - 0.2% 31,133 ----------- NET ASSETS - 100.0% $17,826,593 =========== PORTFOLIO HOLDINGS % OF TOTAL INVESTMENTS U.S. Government Securities 96.0% Money Market Fund 4.0% # Rates shown are annualized yields at time of purchase. * Cost for federal income tax purposes is the same as for financial statement purposes.
See Notes to Financial Statements. 3 MONARCH FUNDS - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - DAILY ASSETS GOVERNMENT FUND February 28, 2005
FACE AMOUNT SECURITY DESCRIPTION RATE MATURITY VALUE - ---------- -------------------------------------------------------------------------- ---- -------- ----------- U.S. GOVERNMENT SECURITIES - 17.5% SMALL BUSINESS ADMINISTRATION POOLS (+/-) - 17.5% $ 28,245 Pool #500536 4.25% 5/25/13 $ 28,700 138,236 Pool #501690 3.37 12/25/16 138,236 375,536 Pool #501733 3.25 2/25/17 378,188 194,791 Pool #501077 3.75 11/25/14 194,791 113,815 Pool #501308 3.75 10/25/15 113,815 732,031 Pool #501543 3.62 7/25/16 732,031 375,900 Pool #501898 3.50 7/25/17 375,900 402,056 Pool #501989 3.37 10/25/12 405,067 1,466,969 Pool #502150 3.25 2/25/18 1,475,352 58,708 Pool #502161 3.25 2/25/18 58,708 584,991 Pool #502208 3.25 2/25/18 586,945 52,396 Pool #502306 3.25 2/25/18 52,396 43,510 Pool #502613 3.25 4/25/19 43,510 51,364 Pool #502914 3.25 3/25/15 51,687 296,696 Pool #503058 3.12 7/25/15 296,696 406,754 Pool #503082 3.12 9/25/20 406,754 265,740 Pool #503120 3.12 10/25/20 265,740 666,188 Pool #503121 3.12 9/25/15 668,267 2,457,232 Pool #503152 2.88 11/25/20 2,457,232 356,425 Pool #503232 2.88 12/25/15 356,425 299,525 Pool #503278 2.88 2/25/21 299,542 572,255 Pool #503429 3.00 6/25/16 573,040 283,432 Pool #503431 3.00 7/25/21 283,508 1,324,896 Pool #503461 3.00 9/25/21 1,325,564 253,431 Pool #503472 3.00 8/25/21 253,431 1,152,642 Pool #503553 2.88 11/25/21 1,153,480 1,851,894 Pool #503614 2.88 1/25/22 1,851,894 817,575 Pool #503671 2.88 3/25/22 817,575 797,775 Pool #503754 2.88 5/25/22 798,444 59,932 Pool #503780 2.88 3/25/22 59,979 871,915 Pool #503882 2.75 9/25/22 871,282 233,833 Pool #503892 2.88 7/25/22 234,065 1,523,683 Pool #503909 2.75 10/25/22 1,523,192 803,998 Pool #504015 2.75 1/25/23 803,888 884,138 Pool #504062 2.75 2/25/23 884,138 796,396 Pool #504074 2.75 2/25/23 796,396 423,799 Pool #504203 2.88 7/25/13 424,334 254,968 Pool #504269 2.88 5/25/15 255,307 414,434 Pool #504345 2.88 5/25/18 414,434 8,623,379 Pool #504366 2.63 2/25/24 8,603,896 4,829,334 Pool #504719 2.88 7/25/24 4,829,334 1,276,298 Pool #504727 2.88 9/25/24 1,276,298 2,100,115 Pool #504765 2.88 10/25/09 2,096,969 2,099,648 Pool #504769 2.88 10/25/24 2,099,648 349,067 Pool #505204 3.00 9/25/25 348,992 591,451 Pool #505205 3.06 9/25/07 591,399 ----------- Total Small Business Administration 42,556,469 ----------- Total U.S. Government Securities 42,556,469 -----------
See Notes to Financial Statements. 4 MONARCH FUNDS - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - DAILY ASSETS GOVERNMENT FUND February 28, 2005
FACE AMOUNT SECURITY DESCRIPTION RATE MATURITY VALUE - ----------- -------------------------------------------------------------------------- ---- -------- ------------ REPURCHASE AGREEMENTS - 81.7% $34,428,000 Bank of America Securities, dated 2/28/05, to be repurchased at $34,430,420; collateralized by various U.S. Government Agency Obligations 2.53% 3/1/05 $ 34,428,000 58,465,000 Bear Stearns & Co., Inc., dated 2/28/05, to be repurchased at $58,469,304; collateralized by various U.S. Government Agency Obligations 2.65 3/1/05 58,465,000 55,000,000 Deutsche Bank Securities, Inc., dated 2/28/05, to be repurchased at $55,004,003; collateralized by various U.S. Government Agency Obligations 2.62 3/1/05 55,000,000 50,000,000 Merrill Lynch, dated 2/28/05, to be repurchased at $50,003,611; collateralized by various U.S. Government Agency Obligations 2.60 3/1/05 50,000,000 ------------ Total Repurchase Agreements 197,893,000 ------------ SHARES - ----------- MONEY MARKET FUND - 0.4% 944,000 Dreyfus Government Cash Management Fund 944,000 ------------ Total Investments at Amortized Cost* - 99.6% $241,393,469 Other Assets and Liabilities - 0.4% 873,259 ------------ NET ASSETS - 100.0% $242,266,728 ============ PORTFOLIO HOLDINGS % OF TOTAL PORTFOLIO INVESTMENTS Repurchase Agreements 82.0% U. S. Government Securities 17.6% Money Market Fund 0.4% (+/-)Certain securities are deemed to have a maturity remaining until the next adjustment of the interest rate, or the longer of the demand period or time to next readjustment. The interest rates shown reflect the rate in effect on February 28, 2005. * Cost for federal income tax purposes is the same as for financial statement purposes.
See Notes to Financial Statements. 5 MONARCH FUNDS - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS - DAILY ASSETS CASH FUND February 28, 2005
FACE AMOUNT SECURITY DESCRIPTION RATE MATURITY VALUE - ----------- -------------------------------------------------------------------------- ---- -------- ------------ COMMERCIAL PAPER # - 41.1% $15,000,000 Citigroup Global Markets 2.52% 03/22/05 $ 14,978,037 15,000,000 Deutsche Bank Financial 2.52 03/22/05 14,978,038 20,000,000 Edison Asset Securitization, LLC ^ 2.54 03/07/05 19,991,567 15,000,000 Goldman Sachs Group, Inc. 2.70 07/29/05 15,000,000 20,000,000 International Lease Finance Corp. 2.52 03/09/05 19,988,844 20,000,000 Societe Generale North America 2.50 03/04/05 19,995,833 20,000,000 UBS Finance Delaware, LLC 2.51 03/07/05 19,991,667 15,000,000 Wells Fargo & Company 2.51 03/24/05 14,976,042 20,000,000 Windmill Funding Corp. ^ 2.56 03/28/05 19,961,750 ------------ Total Commercial Paper 159,861,778 ------------ CORPORATE NOTES (+/-) - 12.5% 18,000,000 Bank of America NA 2.55 08/08/05 18,000,000 15,000,000 Bear Stearns & Co., Inc. 3.21 07/15/05 15,032,365 15,590,000 Lehman Brothers Holdings 2.79 07/22/05 15,597,958 ------------ Total Corporate Notes 48,630,323 ------------ ASSET-BACKED SECURITY (+/-), ^ - 3.3% 12,788,608 Grand Central CDO Ltd. 2.61 12/10/05 12,788,608 ------------ REPURCHASE AGREEMENTS - 43.2% 27,255,000 Bank of America, dated 2/28/05, to be repurchased at $27,256,915; collateralized by various U.S. Government Agency Obligations 2.53 03/01/05 27,255,000 60,000,000 Bear Stearns & Co., Inc., dated 2/28/05, to be repurchased at $60,004,417; collateralized by various U.S. Government Agency Obligations 2.65 03/01/05 60,000,000 50,000,000 Deutsche Bank Securities, Inc., dated 2/28/05, to be repurchased at $50,003,639; collateralized by various U.S. Government Agency Obligations 2.62 03/01/05 50,000,000 30,450,000 Merrill Lynch, dated 2/28/05, to be repurchased at $30,452,199; collateralized by various U.S. Government Agency Obligations 2.60 03/01/05 30,450,000 ------------ Total Repurchase Agreements 167,705,000 ------------ Total Investments at Amortized Cost* - 100.1% $388,985,709 Other Assets and Liabilities - (0.1)% (527,311) ------------ NET ASSETS - 100.0% $388,458,398 ============ PORTFOLIO HOLDINGS % OF TOTAL PORTFOLIO INVESTMENTS Repurchase Agreements 43.1% Commercial Paper 41.1% Corporate Notes 12.5% Asset-Backed Security 3.3% # Rates shown are annualized yields at time of purchase. (+/-)Certain securities are deemed to have a maturity remaining until the next adjustment of the interest rate, or the longer of the demand period or time to next readjustment. The interest rates shown reflect the rate in effect on February 28, 2005. ^ Securities that may be resold to "qualified institutional buyers" under Rule 144A of the Securities Act of 1933, as amended. At period end, these securities amounted to $52,741,925 or 13.6% 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 February 28, 2005
DAILY ASSETS DAILY ASSETS GOVERNMENT DAILY ASSETS DAILY ASSETS TREASURY OBLIGATIONS GOVERNMENT CASH FUND FUND FUND FUND ------------ ------------ ------------ ------------ Assets Investments: Securities at amortized cost $ -- $17,795,460 $ 43,500,469 $221,280,709 Repurchase agreements 62,465,000 -- 197,893,000 167,705,000 Cash 28,620 69,670 40,861 38,876 Receivables: Interest 4,404 1,609 227,062 247,656 Investment securities sold -- -- 1,261,597 -- Receivable from administrator -- -- -- 9,269 Prepaid expenses and other assets 11,680 3,438 22,805 72,618 ----------- ----------- ------------ ------------ Total Assets 62,509,704 17,870,177 242,945,794 389,354,128 ----------- ----------- ------------ ------------ Liabilities Payables: Dividends 90,086 30,492 381,901 620,937 Accrued expenses: Payables to related parties 16,118 -- 50,833 70,003 Other expenses and other liabilities 52,333 13,092 246,332 204,790 ----------- ----------- ------------ ------------ Total Liabilities 158,537 43,584 679,066 895,730 ----------- ----------- ------------ ------------ Net Assets $62,351,167 $17,826,593 $242,266,728 $388,458,398 =========== =========== ============ ============ Components of Net Assets Paid in capital $62,351,286 $17,850,405 $242,295,243 $388,471,192 Undistributed (distributions in excess of) net investment income (83) 408 (28,666) (559) Accumulated net realized gain (loss) (36) (24,220) 151 (12,235) ----------- ----------- ------------ ------------ Net Assets $62,351,167 $17,826,593 $242,266,728 $388,458,398 =========== =========== ============ ============ Net Assets by Class of Shares Preferred Shares $ -- $ -- $ 26,488,987 $ 12,063,839 Universal Shares -- 17,826,593 22,607,664 21,652,375 Institutional Service Shares 14,953,304 -- 59,098,486 31,343,341 Institutional Shares -- -- 54,444,341 57,583,152 Investor Shares 47,397,863 -- 79,627,250 265,749,945 B Shares -- -- -- 29,843 C Shares -- -- -- 35,903 ----------- ----------- ------------ ------------ Net Assets $62,351,167 $17,826,593 $242,266,728 $388,458,398 =========== =========== ============ ============ Shares of Beneficial Interest for each Class of Shares Preferred Shares -- -- 26,488,194 12,064,256 Universal Shares -- 17,850,638 22,647,091 21,671,550 Institutional Service Shares 14,949,047 -- 59,098,566 31,348,575 Institutional Shares -- -- 54,439,286 57,598,651 Investor Shares 47,402,250 -- 79,622,117 265,799,087 B Shares -- -- -- 29,843 C Shares -- -- -- 35,903 Net Asset Value Per Share (Offering and Redemption Price per Share) for each Class of Shares $ 1.00 $ 1.00 $ 1.00 $ 1.00
See Notes to Financial Statements. 7 MONARCH FUNDS - -------------------------------------------------------------------------------- STATEMENTS OF OPERATIONS Six Months Ended February 28, 2005
DAILY ASSETS DAILY ASSETS GOVERNMENT DAILY ASSETS DAILY ASSETS TREASURY OBLIGATIONS GOVERNMENT CASH FUND FUND FUND FUND ------------ ------------ ------------ ------------ Investment Income: Interest income $1,775,516 $175,106 $13,166,514 $4,128,245 Dividend income 32,595 6,063 31,698 21,259 ---------- -------- ----------- ---------- Total Investment Income 1,808,111 181,169 13,198,212 4,149,504 ---------- -------- ----------- ---------- Expenses: Investment adviser fees 33,046 4,658 221,996 71,391 Administrator fees Preferred Shares -- -- 504,468 9,193 Universal Shares 61,635 10,248 65,435 20,361 Institutional Service Shares 8,838 -- 45,225 19,435 Institutional Shares -- -- 30,963 36,873 Investor Shares 31,202 -- 39,893 134,283 B Shares -- -- -- 7,756 C Shares -- -- -- 8,103 Shareholder service fees Institutional Service Shares 16,069 -- 82,230 35,337 Institutional Shares -- -- 56,295 67,041 Investor Shares 56,730 -- 72,533 244,151 B Shares -- -- -- 20 C Shares -- -- -- 24 Distribution fees Investor Shares 70,913 -- 90,666 305,186 B Shares -- -- -- 61 C Shares -- -- -- 73 Transfer agency fees Preferred Shares -- -- 16,007 4,933 Universal Shares 34,541 13,077 37,521 16,003 Institutional Service Shares 13,574 -- 49,534 24,567 Institutional Shares -- -- 63,327 75,991 Investor Shares 68,021 -- 80,725 266,758 B Shares -- -- -- 4,377 C Shares -- -- -- 4,571 Custodian fees 11,554 1,165 77,950 25,018 Professional fees 13,328 11,713 31,114 15,384 Accountant fees 33,339 16,610 72,780 52,260 Trustees' fees and expenses 1,804 195 20,009 4,454 Miscellaneous expenses 23,893 10,500 64,078 59,844 ---------- -------- ----------- ---------- Total Expenses 478,487 68,166 1,722,749 1,513,448 Expenses reimbursed and fees waived (88,294) (49,165) (378,864) (161,941) ---------- -------- ----------- ---------- Net Expenses 390,193 19,001 1,343,885 1,351,507 ---------- -------- ----------- ---------- Net Investment Income (Loss) 1,417,918 162,168 11,854,327 2,797,997 ---------- -------- ----------- ---------- Net Realized Gain (Loss) on Investments -- -- -- (594) ---------- -------- ----------- ---------- Increase (Decrease) in Net Assets from Operations $1,417,918 $162,168 $11,854,327 $2,797,403 ========== ======== =========== ==========
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 28, 2005/(A)/ AUGUST 31, 2004 FEBRUARY 28, 2005 AUGUST 31, 2004 --------------------- --------------- ----------------- --------------- Operations Net investment income (loss) $ 1,417,918 $ 1,380,983 $ 162,168 $ 190,750 Net realized gain (loss) on investments -- -- -- 32 ------------- --------------- ----------- ------------ Increase (Decrease) in Net Assets from Operations 1,417,918 1,380,983 162,168 190,782 ------------- --------------- ----------- ------------ Distributions to Shareholders from Net investment income--Universal Shares (985,929) (1,090,584) (162,168) (200,674) Net investment income--Institutional Service Shares (120,158) (135,993) -- -- Net investment income--Investor Shares (311,831) (164,100) -- -- ------------- --------------- ----------- ------------ Total Distributions to Shareholders (1,417,918) (1,390,677) (162,168) (200,674) ------------- --------------- ----------- ------------ Capital Share Transactions Sale of shares--Universal Shares 143,522,719 286,622,339 7,251,236 18,831,339 Sale of shares--Institutional Service Shares 115,746,257 343,639,316 -- -- Sale of shares--Investor Shares 497,517,701 1,655,597,362 -- -- Reinvestment of distributions--Universal Shares 171,170 664 2,322 4,082 Reinvestment of distributions--Institutional Service Shares 59,790 73,446 -- -- Reinvestment of distributions--Investor Shares 244,728 164,012 -- -- Redemption of shares--Universal Shares (230,453,376) (340,004,807) (9,809,607) (23,194,936) Redemption of shares--Institutional Service Shares (116,402,458) (363,233,772) -- -- Redemption of shares--Investor Shares (506,574,419) (1,696,367,845) -- -- ------------- --------------- ----------- ------------ Increase (Decrease) from Capital Transactions (96,167,888) (113,509,285) (2,556,049) (4,359,515) ------------- --------------- ----------- ------------ Increase (Decrease) in Net Assets (96,167,888) (113,518,979) (2,556,049) (4,369,407) ------------- --------------- ----------- ------------ Net Assets Beginning of Period 158,519,055 272,038,034 20,382,642 24,752,049 ------------- --------------- ----------- ------------ End of Period $ 62,351,167 $ 158,519,055 $17,826,593 $ 20,382,642 ============= =============== =========== ============ Undistributed (Distributions in Excess of) Net Investment Income $ (83) $ (83) $ 408 $ 408 ------------- --------------- ----------- ------------
(a)On February 24, 2005, Universal Shares of Daily Assets Treasury Fund ceased operations. See Notes to Financial Statements. 9 MONARCH FUNDS - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS
DAILY ASSETS DAILY ASSETS TREASURY FUND GOVERNMENT OBLIGATIONS FUND ------------------------------------ -------------------------------- SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED FEBRUARY 28, 2005/(A)/ AUGUST 31, 2004 FEBRUARY 28, 2005 AUGUST 31, 2004 --------------------- --------------- ----------------- --------------- Share Transactions Sale of shares--Universal Shares 143,522,720 286,622,338 7,251,235 18,831,340 Sale of shares--Institutional Service Shares 115,746,257 343,639,316 -- -- Sale of shares--Investor Shares 497,517,701 1,655,597,362 -- -- Reinvestment of distributions--Universal Shares 171,170 664 2,322 4,082 Reinvestment of distributions--Institutional Service Shares 59,790 73,446 -- -- Reinvestment of distributions--Investor Shares 244,728 164,012 -- -- Redemption of shares--Universal Shares (230,453,376) (340,004,807) (9,809,607) (23,194,936) Redemption of shares--Institutional Service Shares (116,402,458) (363,233,772) -- -- Redemption of shares--Investor Shares (506,574,419) (1,696,367,845) -- -- ------------ -------------- ---------- ----------- Increase (Decrease) in Shares (96,167,887) (113,509,286) (2,556,050) (4,359,514) ============ ============== ========== ===========
(a)On February 24, 2005, Universal Shares of Daily Assets Treasury Fund ceased operations. See Notes to Financial Statements. 10 MONARCH FUNDS - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS
DAILY ASSETS DAILY ASSETS GOVERNMENT FUND CASH FUND --------------------------------- --------------------------------- SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED FEBRUARY 28, 2005 AUGUST 31, 2004 FEBRUARY 28, 2005 AUGUST 31, 2004 ` ----------------- --------------- ----------------- --------------- Operations Net investment income (loss) $ 11,854,327 $ 8,781,091 $ 2,797,997 $ 2,595,618 Net realized gain (loss) on investments -- 1,250 (594) (333) --------------- --------------- --------------- --------------- Increase (Decrease) in Net Assets from Operations 11,854,327 8,782,341 2,797,403 2,595,285 --------------- --------------- --------------- --------------- Distributions to Shareholders from Net investment income--Preferred Shares (9,176,302) (6,598,646) (161,446) (99,959) Net investment income--Universal Shares (1,086,697) (1,071,470) (341,872) (802,986) Net investment income--Institutional Service Shares (706,650) (464,263) (282,533) (205,357) Net investment income--Institutional Shares (422,106) (432,700) (489,350) (561,597) Net investment income--Investor Shares (462,573) (213,682) (1,522,679) (926,265) Net investment income--B Shares -- -- (54) -- Net investment income--C Shares -- -- (63) -- --------------- --------------- --------------- --------------- Total Distributions to Shareholders (11,854,328) (8,780,761) (2,797,997) (2,596,164) --------------- --------------- --------------- --------------- Capital Share Transactions Sale of shares--Preferred Shares 6,016,000,528 8,137,440,578 72,274,503 157,487,629 Sale of shares--Universal Shares 263,704,322 510,810,226 444,055,308 1,013,494,516 Sale of shares--Institutional Service Shares 278,885,580 349,941,112 158,330,966 313,903,413 Sale of shares--Institutional Shares 290,630,738 661,445,829 454,052,449 943,789,517 Sale of shares--Investor Shares 592,283,917 979,714,457 2,943,938,310 5,071,433,156 Sale of shares--B Shares -- -- 29,810 -- Sale of shares--C Shares -- -- 86,325 -- Reinvestment of distributions--Preferred Shares 9,108,591 6,548,329 105,502 42,043 Reinvestment of distributions--Universal Shares 598,442 482,630 167,576 435,925 Reinvestment of distributions--Institutional Service Shares 344,026 179,970 216,171 172,099 Reinvestment of distributions--Institutional Shares 168,947 247,736 367,802 386,917 Reinvestment of distributions--Investor Shares 359,745 213,409 1,025,479 835,744 Reinvestment of distributions--B Shares -- -- 33 -- Reinvestment of distributions--C Shares -- -- 38 -- Redemption of shares--Preferred Shares (6,022,005,764) (8,132,153,056) (79,481,814) (141,343,256) Redemption of shares--Universal Shares (355,575,604) (511,585,416) (458,462,976) (1,082,878,630) Redemption of shares--Institutional Service Shares (275,272,730) (371,253,091) (153,627,065) (324,528,053) Redemption of shares--Institutional Shares (309,930,799) (678,858,529) (492,821,770) (940,377,890) Redemption of shares--Investor Shares (577,044,839) (963,282,301) (3,073,878,486) (4,980,992,461) Redemption of shares--B Shares -- -- -- -- Redemption of shares--C Shares -- -- (50,459) -- --------------- --------------- --------------- --------------- Increase (Decrease) Decrease from Capital Transactions (87,744,900) (10,108,117) (183,672,298) 31,860,669 --------------- --------------- --------------- --------------- Increase (Decrease) in Net Assets (87,744,901) (10,106,537) (183,672,892) 31,859,790 --------------- --------------- --------------- --------------- Net Assets Beginning of Period 330,011,629 340,118,166 572,131,290 540,271,500 --------------- --------------- --------------- --------------- End of Period $ 242,266,728 $ 330,011,629 $ 388,458,398 $ 572,131,290 =============== =============== =============== =============== Undistributed (Distributions in Excess of) Net Investment Income $ (28,666) $ (28,665) $ (559) $ (559) --------------- --------------- --------------- ---------------
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 28, 2005 AUGUST 31, 2004 FEBRUARY 28, 2005 AUGUST 31, 2004 ----------------- --------------- ----------------- --------------- Share Transactions Sale of shares--Preferred Shares 6,016,000,528 8,137,440,578 72,274,503 157,487,629 Sale of shares--Universal Shares 263,704,320 510,810,227 444,055,308 1,013,494,518 Sale of shares--Institutional Service Shares 278,885,580 349,941,112 158,330,967 313,903,413 Sale of shares--Institutional Shares 290,630,738 661,445,830 454,052,450 943,789,517 Sale of shares--Investor Shares 592,283,917 979,714,457 2,943,938,309 5,071,433,157 Sale of shares--B Shares -- -- 29,810 -- Sale of shares--C Shares -- -- 86,324 -- Reinvestment of distributions--Preferred Shares 9,108,591 6,548,329 105,502 42,043 Reinvestment of distributions--Universal Shares 598,442 482,630 167,576 435,925 Reinvestment of distributions--Institutional Service Shares 344,026 179,970 216,171 172,099 Reinvestment of distributions--Institutional Shares 168,947 247,735 367,802 386,917 Reinvestment of distributions--Investor Shares 359,745 213,409 1,025,479 835,744 Reinvestment of distributions--B Shares -- -- 33 -- Reinvestment of distributions--C Shares -- -- 38 -- Redemption of shares--Preferred Shares (6,022,005,764) (8,132,153,056) (79,481,814) (141,343,256) Redemption of shares--Universal Shares (355,575,604) (511,585,416) (458,462,976) (1,082,878,630) Redemption of shares--Institutional Service Shares (275,272,730) (371,253,091) (153,627,065) (324,528,053) Redemption of shares--Institutional Shares (309,930,799) (678,858,529) (492,821,770) (940,377,890) Redemption of shares--Investor Shares (577,044,839) (963,282,301) (3,073,878,486) (4,980,992,461) Redemption of shares--B Shares -- -- -- -- Redemption of shares--C Shares -- -- (50,459) -- -------------- -------------- -------------- -------------- Increase (Decrease) in Shares (87,744,902) (10,108,116) (183,672,298) 31,860,672 ============== ============== ============== ==============
See Notes to Financial Statements. 12 MONARCH FUNDS - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS These financial highlights reflect selected data for an outstanding share of each class of each Fund during the periods indicated.
SELECTED DATA FOR A SINGLE SHARE Net ------------------------------------------------------------------------- Assets at Beginning Net Distributions Distributions Ending End of Net Asset Net Realized from Net from Net Net Asset Period Year Ended August 31, Value Per Investment Gain on Investment Realized Value Total (000's (except as noted) Share Income Investments Income Gains Per Share Return/(b)/ Omitted) - --------------------- --------- ---------- ----------- ------------- ------------- --------- ---------- --------- - - - - - - - - - - DAILY ASSETS TREASURY FUND Institutional Service Shares/(e)/ - --------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2005 $1.00 $0.01 -- $(0.01) -- $1.00 0.75% $ 14,953 2004 1.00 0.01 -- (0.01) -- 1.00 0.59% 15,552 2003 1.00 0.01 -- (0.01) -- 1.00 0.84% 35,074 2002 1.00 0.02 --/(d)/ (0.02) --/(d)/ 1.00 1.57% 20,068 2001 1.00 0.05 -- (0.05) -- 1.00 4.92% 50,554 2000 1.00 0.05 -- (0.05) -- 1.00 5.47% 30,480 Investor Shares - --------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2005 1.00 0.01 -- (0.01) -- 1.00 0.55% 47,398 2004 1.00 --/(d)/ -- --/(d)/ -- 1.00 0.20% 56,217 2003 1.00 --/(d)/ -- --/(d)/ -- 1.00 0.45% 96,827 2002 1.00 0.01 --/(d)/ (0.01) --/(d)/ 1.00 1.17% 133,758 2001 1.00 0.04 -- (0.04) -- 1.00 4.52% 233,138 2000 1.00 0.05 -- (0.05) -- 1.00 5.06% 314,305 DAILY ASSETS GOVERNMENT OBLIGATIONS FUND Universal Shares/(f)/ - --------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2005 1.00 0.01 -- (0.01) -- 1.00 0.87% 17,827 2004 1.00 0.01 --/(d)/ (0.01) -- 1.00 0.91% 20,383 2003 1.00 0.01 -- (0.01) -- 1.00 1.18% 24,752 2002 1.00 0.02 -- (0.02) -- 1.00 1.97% 25,760 2001 1.00 0.05 -- (0.05) -- 1.00 5.26% 29,100 2000 1.00 0.06 -- (0.06) -- 1.00 5.93% 39,777
RATIOS/SUPPLEMENTAL DATA - -------------------------------- Ratios to Average Net Assets/(a)/ - -------------------------------- Net Net Gross Investment Expenses Expenses/(c)/ Income - --------------------------------- - ---------------------------------- 0.45% 0.64% 1.46% 0.45% 0.56% 0.57% 0.45% 0.67% 0.84% 0.45% 0.62% 1.68% 0.45% 0.61% 4.57% 0.45% 0.62% 5.30% - ---------------------------------- 0.84% 0.92% 1.07% 0.84% 0.89% 0.18% 0.84% 0.90% 0.45% 0.85% 0.87% 1.22% 0.84% 0.84% 4.52% 0.84% 0.85% 5.01% - ---------------------------------- 0.20% 0.73% 1.73% 0.20% 0.70% 0.86% 0.20% 0.48% 1.14% 0.20% 0.71% 1.97% 0.20% 0.57% 5.24% 0.20% 0.65% 5.78%
(a)Annualized for periods less than one year. (b)Not annualized for periods less than one year. (c)The ratio of Gross Expenses to Average Net Assets reflects the expense ratio excluding any fee waivers and/or expense reimbursements. (d)Less than $0.01 per share. (e)On April 23, 2003, Institutional Shares were renamed Institutional Service Shares. (f)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.
SELECTED DATA FOR A SINGLE SHARE ------------------------------------------------------------------------- Net Assets at Beginning Net Distributions Distributions Ending End of Net Asset Net Realized from Net from Net Net Asset Period Year Ended August 31, Value Per Investment Gain on Investment Realized Value Total (000's (except as noted) Share Income Investments Income Gains Per Share Return/(b)/ Omitted) - - - - - - - - - - DAILY ASSETS GOVERNMENT FUND Preferred Shares - --------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2005 $1.00 $0.01 -- $(0.01) -- $1.00 0.99% $ 26,489 2004 1.00 0.01 --/(e)/ (0.01) -- 1.00 1.04% 23,386 2003 1.00 0.01 -- (0.01) -- 1.00 1.40% 11,549 2002 1.00 0.02 --/(e)/ (0.02) --/(e)/ 1.00 2.25% 12,041 2001/(d)/ 1.00 --/(e)/ -- --/(e)/ -- 1.00 0.22% 8 Universal Shares - --------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2005 1.00 0.01 -- (0.01) -- 1.00 0.95% 22,608 2004 1.00 0.01 --/(e)/ (0.01) -- 1.00 0.96% 113,881 2003 1.00 0.01 -- (0.01) -- 1.00 1.29% 114,173 2002 1.00 0.02 --/(e)/ (0.02) --/(e)/ 1.00 2.17% 81,426 2001 1.00 0.05 -- (0.05) -- 1.00 5.34% 164,500 2000 1.00 0.06 -- (0.06) -- 1.00 5.94% 225,697 Institutional Service Shares - --------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2005 1.00 --/(e)/ -- --/(e)/ -- 1.00 0.82% 59,099 2004 1.00 --/(e)/ --/(e)/ --/(e)/ -- 1.00 0.71% 55,142 2003/(d)/ 1.00 --/(e)/ -- --/(e)/ -- 1.00 0.16% 76,273 Institutional Shares - --------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2005 1.00 0.01 -- (0.01) -- 1.00 0.76% 54,444 2004 1.00 0.01 --/(e)/ (0.01) -- 1.00 0.59% 73,575 2003 1.00 0.01 -- (0.01) -- 1.00 0.91% 90,740 2002 1.00 0.02 --/(e)/ (0.02) --/(e)/ 1.00 1.80% 117,476 2001 1.00 0.05 -- (0.05) -- 1.00 4.95% 198,324 2000 1.00 0.05 -- (0.05) -- 1.00 5.54% 400,418 Investor Shares - --------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2005 1.00 0.01 -- (0.01) -- 1.00 0.63% 79,627 2004 1.00 0.01 --/(e)/ (0.01) -- 1.00 0.32% 64,028 2003 1.00 0.01 -- (0.01) -- 1.00 0.64% 47,383 2002 1.00 0.02 --/(e)/ (0.02) --/(e)/ 1.00 1.52% 58,397 2001 1.00 0.05 -- (0.05) -- 1.00 4.68% 61,546 2000/(d)/ 1.00 0.04 -- (0.04) -- 1.00 3.68% 36,091 DAILY ASSETS CASH FUND Preferred Shares - --------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2005 1.00 0.01 --/(e)/ (0.01) -- 1.00 0.97% 12,064 2004 1.00 0.01 --/(e)/ (0.01) -- 1.00 1.04% 19,166 2003 1.00 0.01 -- (0.01) -- 1.00 1.37% 2,979 2002 1.00 0.02 -- (0.02) -- 1.00 2.21% 13,095 2001/(d)/ 1.00 --/(e)/ -- --/(e)/ -- 1.00 0.22% 8 Universal Shares - --------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2005 1.00 0.01 --/(e)/ (0.01) -- 1.00 0.92% 21,652 2004 1.00 0.01 --/(e)/ (0.01) -- 1.00 0.96% 35,892 2003 1.00 0.01 -- (0.01) -- 1.00 1.29% 104,842 2002 1.00 0.02 -- (0.02) -- 1.00 2.12% 46,833 2001 1.00 0.05 -- (0.05) -- 1.00 5.49% 37,236 2000 1.00 0.06 -- (0.06) -- 1.00 6.04% 70,451
RATIOS/SUPPLEMENTAL DATA - -------------------------------- Ratios to Average Net Assets/(a)/ - -------------------------------- Net Net Gross Investment Expenses Expenses/(c)/ Income - --------------------------------- - ---------------------------------- 0.12% 0.19% 1.99% 0.12% 0.18% 1.06% 0.11% 0.25% 1.05% 0.12% 0.22% 2.19% 0.12% 97.77% 3.64% - ---------------------------------- 0.20% 0.25% 1.81% 0.20% 0.26% 0.95% 0.20% 0.28% 1.26% 0.21% 0.25% 2.17% 0.20% 0.23% 5.29% 0.20% 0.24% 5.73% - ---------------------------------- 0.45% 0.51% 1.71% 0.45% 0.51% 0.69% 0.45% 0.58% 0.70% - ---------------------------------- 0.57% 0.61% 1.49% 0.57% 0.62% 0.58% 0.57% 0.63% 0.92% 0.57% 0.59% 2.05% 0.57% 0.58% 4.80% 0.57% 0.58% 5.41% - ---------------------------------- 0.84% 0.87% 1.27% 0.84% 0.86% 0.32% 0.84% 0.89% 0.63% 0.85% 0.85% 1.43% 0.84% 0.84% 4.51% 0.85% 0.97% 5.70% - ---------------------------------- 0.12% 0.27% 1.92% 0.12% 0.31% 1.06% 0.12% 0.30% 1.39% 0.12% 0.20% 1.88% 0.12% 91.14% 3.76% - ---------------------------------- 0.20% 0.30% 1.83% 0.20% 0.27% 0.94% 0.20% 0.28% 1.24% 0.21% 0.25% 2.03% 0.20% 0.24% 5.68% 0.20% 0.23% 5.84%
See Notes to Financial Statements. 14 MONARCH FUNDS - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SINGLE SHARE ------------------------------------------------------------------------- Net Assets at Beginning Net Distributions Distributions Ending End of Net Asset Net Realized from Net from Net Net Asset Period Year Ended August 31, Value Per Investment Gain on Investment Realized Value Total (000's (except as noted) Share Income Investments Income Gains Per Share Return/(b)/ Omitted) - - - - - - - - - - Institutional Service Shares - ------------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2005 $1.00 $0.01 --/(e)/ $(0.01) -- $1.00 0.80% 31,343 2004 1.00 0.01 --/(e)/ (0.01) -- 1.00 0.71% 26,423 2003/(d)/ 1.00 --/(e)/ -- --/(e)/ -- 1.00 0.18% 36,876 Institutional Shares - ------------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2005 1.00 0.01 --/(e)/ (0.01) -- 1.00 0.74% 57,583 2004 1.00 0.01 --/(e)/ (0.01) -- 1.00 0.59% 95,985 2003 1.00 0.01 -- (0.01) -- 1.00 0.92% 92,186 2002 1.00 0.02 -- (0.02) -- 1.00 1.75% 347,469 2001 1.00 0.05 -- (0.05) -- 1.00 5.11% 736,555 2000 1.00 0.06 -- (0.06) -- 1.00 5.65% 863,603 Investor Shares - ------------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2005 1.00 0.01 --/(e)/ (0.01) -- 1.00 0.61% 265,750 2004 1.00 --/(e)/ --/(e)/ --/(e)/ -- 1.00 0.32% 394,665 2003 1.00 0.01 -- (0.01) -- 1.00 0.64% 303,389 2002 1.00 0.01 -- (0.01) -- 1.00 1.48% 646,285 2001 1.00 0.05 -- (0.05) -- 1.00 4.85% 791,138 2000 1.00 0.05 -- (0.05) -- 1.00 5.38% 994,191 B Shares - ------------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2005/(d)/ 1.00 --/(e)/ --/(e)/ --/(e)/ -- 1.00 0.18% 30 C Shares - ------------------------------------------------------------------------------------------------------------------------- Six months ended February 28, 2005/(d)/ 1.00 --/(e)/ --/(e)/ --/(e)/ -- 1.00 0.19% 36
RATIOS/SUPPLEMENTAL DATA - -------------------------------- Ratios to Average Net Assets/(a)/ - -------------------------------- Net Net Gross Investment Expenses Expenses/(c)/ Income - --------------------------------- - ---------------------------------- 0.45% 0.55% 1.59% 0.45% 0.54% 0.71% 0.45% 0.58% 0.76% - ---------------------------------- 0.57% 0.65% 1.45% 0.57% 0.63% 0.59% 0.57% 0.61% 1.01% 0.57% 0.58% 1.84% 0.57% 0.57% 5.07% 0.58% 0.58% 5.55% - ---------------------------------- 0.84% 0.88% 1.24% 0.84% 0.87% 0.32% 0.84% 0.86% 0.68% 0.83% 0.83% 1.51% 0.82% 0.82% 4.78% 0.83% 0.85% 5.40% - ---------------------------------- 1.65% 217.15% 0.67% - ---------------------------------- 1.65% 188.64% 0.64%
(a)Annualized for periods less than one year. (b)Not annualized for periods less than one year. (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 28, 2005 NOTE 1. SUMMARY OF ORGANIZATION Monarch Funds (the "Trust") is a Massachusetts business trust registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "Act"). The Trust consists of four diversified investment portfolios listed below (each a "Fund" and collectively the "Funds"). The Funds are authorized under the Trust's Trust Instrument to issue an unlimited number of shares of beneficial interest without par value. The Funds and classes offered as of February 28, 2005, 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 Fund Preferred Shares August 10, 2001 Universal Shares October 29, 1992 Institutional Service Shares June 9, 2003 Institutional Shares July 15, 1993 Investor Shares December 30, 1999 Daily Assets Cash Fund Preferred Shares August 10, 2001 Universal Shares December 1, 1992 Institutional Service Shares June 9, 2003 Institutional Shares July 15, 1993 Investor Shares June 16, 1995 B Shares November 22, 2004 C Shares November 17, 2004 Daily Assets Government Obligations Universal Shares (Note 5) July 1, 1998 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 which series had the same investment objective and policies as the Funds. 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 Obligation 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. On February 24, 2005, Universal Shares of Daily Assets Treasury Fund ceased operations. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES These financial statements are prepared in accordance with accounting principles generally accepted in the United States, which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increase and decrease in net assets during the fiscal period. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Funds: SECURITY VALUATION Generally, each Fund determines its net asset value per share as of 4:00 p.m., Eastern time, on each Fund business day, utilizing the amortized cost method pursuant to Rule 2a-7 under the Act. Under this method, all investments purchased at a discount or premium are valued by accreting or amortizing, respectively, the difference between the original purchase price and the maturity value of the investment over the period to the investment's maturity. REPURCHASE AGREEMENTS Each Fund may invest in repurchase agreements. Each Fund, through its custodian, receives delivery of the underlying collateral, whose market value always exceeds or equals the repurchase price plus expected transaction costs. In the case of a tri-party agreement, the collateral is held by an agent bank. The Funds' investment adviser is responsible for determining the value of the underlying collateral. In the event of default, a Fund may have difficulties with the disposition of any such securities held as collateral. EXPENSE ALLOCATION The Trust is comprised of four active series, and it accounts separately for the assets, liabilities and operations of each series. Expenses that are directly attributable to more than one series are allocated among the 16 MONARCH FUNDS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS February 28, 2005 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 other expenses. Institutional Service Shares, Institutional Shares, Investor Shares, B Shares and C Shares incur shareholder servicing fees and Investor Shares, B Shares and C Shares incur distribution fees. In addition, there are differences between the classes of shares with respect to the minimum investment required. SECURITIES TRANSACTIONS, INTEREST INCOME AND REALIZED GAIN AND LOSS Securities transactions are recorded on trade date. Interest income is accrued as earned and realized gain and loss on investments sold are recorded on the basis of identified cost. FEDERAL TAXES Each Fund intends to continue to qualify each year as a regulated investment company and distribute all its net investment income. In addition, by distributing in each calendar year substantially all its net investment income, capital gain and certain other amounts, each Fund will not be subject to a federal excise tax. Therefore, no federal income or excise tax provision is required. DISTRIBUTIONS TO SHAREHOLDERS Distributions to shareholders of net investment income are declared daily and paid monthly. Net capital gain, if any, is distributed to shareholders at least annually. Distributions are based on amounts calculated in accordance with applicable income tax regulations, which may differ from accounting principles generally accepted in the United States. These differences are due primarily to differing treatments of income and gain on various investment securities held by each Fund, timing differences and differing characterizations of distributions made by the Fund. NOTE 3. INVESTMENT ADVISORY AND OTHER SERVICES INVESTMENT ADVISER Forum Investment Advisors, LLC (the "Adviser") is the investment adviser of each Fund. The Adviser receives an advisory fee from Daily Assets Treasury Fund, Daily Assets Government Fund, and Daily Assets Cash Fund based upon the total average daily net assets of the Funds ("Total Fund Assets") that is calculated on a cumulative basis at the following annual rates: 0.06% for the first $200 million of Total Fund Assets, 0.04% of the next $300 million of Total Fund Assets and 0.03% of the remaining Total Fund Assets. The Adviser receives an advisory fee from Daily Assets Government Obligations Fund at an annual rate of 0.05% of the average daily net assets of the Fund. ADMINISTRATION AND OTHER SERVICES Citigroup Global Transaction Services, through its various affiliates (collectively "Citigroup"), provides certain administration, portfolio accounting and transfer agency services to the Funds. 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 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 Forum Fund Services, LLC is the Trust's distributor (the "Distributor"). Effective March 1, 2005, the Distributor changed its name to Foreside Fund Services, LLC. The Distributor is not affiliated with Citigroup or its affiliated companies. Under a Distribution Plan adopted pursuant to Rule 12b-1 under the Act, the Trust pays the Distributor a distribution fee at an annual rate of 0.25% of the average daily net assets of Investor Shares of each Fund and 0.75% of the average daily net assets of B Shares and C Shares of Daily Assets Cash Fund. The Distributor pays some or all of these fees to various financial institutions that provide distribution services for Investor Shares. The plan obligates the Funds to pay the Distributor as compensation for its services. 17 MONARCH FUNDS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS February 28, 2005 NOTE 4. WAIVER OF FEES/REIMBURSEMENT OF EXPENSES For the period ended February 28, 2005, the Adviser, the Administrator, and the Distributor voluntarily waived a portion of their fees and assumed certain expenses of the Funds as follows:
DAILY ASSETS DAILY ASSETS GOVERNMENT DAILY ASSETS DAILY ASSETS TREASURY FUND OBLIGATIONS FUND GOVERNMENT FUND CASH FUND ------------- ---------------- --------------- ------------ Investment Advisory $ -- $ 4,658 $ -- $ -- Administration 22,491 9,590 304,891 18,360 Shareholder Service 35,301 -- 45,405 94,884 Transfer Agency 30,502 11,179 28,568 13,178 Portfolio Accounting -- 16,610 -- -- Expenses Reimbursed -- 7,128 -- 35,519 ------- ------- -------- -------- Total $88,294 $49,165 $378,864 $161,941 ======= ======= ======== ========
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 the Forum Funds received shares in the Monarch Funds with a value equal to their holdings in the Forum Funds. The transaction was structured to qualify as a tax-free reorganization under the Internal Revenue Code. After the reorganization was consummated, each Fund redeemed its investment in the portfolios and began investing directly in portfolio securities. A summary of shares outstanding and net assets immediately before and after the reorganization is as follows:
BEFORE REORGANIZATION AFTER REORGANIZATION ----------------------------- -------------------- DAILY ASSETS TREASURY TREASURY DAILY ASSETS CASH FUND OBLIGATIONS FUND TREASURY 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
18 MONARCH FUNDS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS February 28, 2005
BEFORE REORGANIZATION AFTER REORGANIZATION ----------------------------- -------------------- DAILY ASSETS GOVERNMENT GOVERNMENT DAILY ASSET CASH FUND OBLIGATIONS FUND GOVERNMENT 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 BEFORE REORGANIZATION AFTER REORGANIZATION ----------------------------- -------------------- DAILY ASSETS DAILY ASSETS CASH CASH FUND CASH FUND 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
19 MONARCH FUNDS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS February 28, 2005 On July 22, 2003, Daily Assets Government Fund, (the "Forum Fund"), reorganized into the newly created Daily Assets Government Obligations Fund and transferred its assets and liabilities to Daily Assets Government Obligations Fund. As a result, the Fund acquired the net assets of the Forum Fund. Financial information reported in the financial statements prior to July 23, 2003, reflects the financial 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 FUND OBLIGATIONS 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 --
NOTE 6. 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, 2004, the Funds did not own any securities for which a shareholder meeting was called and voted on. NOTE 7. AVAILABILITY OF QUARTERLY PORTFOLIO SCHEDULE The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds' Form N-Q are available on the SEC's website at www.sec.gov or may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330. NOTE 8. SHAREHOLDER EXPENSES EXAMPLE As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including contingent deferred sales charges (loads) and redemption fees; and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The following example is based on $1,000 invested at the beginning of the period and held for the entire period from September 1, 2004, through February 28, 2005. ACTUAL EXPENSES The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during the period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the 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 cost of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as contingent deferred sales charges (loads) or redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. 20 MONARCH FUNDS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS February 28, 2005
BEGINNING ENDING EXPENSES ANNUALIZED ACCOUNT VALUE ACCOUNT VALUE PAID DURING EXPENSE SEPTEMBER 1, 2004 FEBRUARY 28, 2005 PERIOD RATIO ----------------- ----------------- ----------- ---------- DAILY ASSETS TREASURY FUND INSTITUTIONAL SERVICE SHARES Actual Return $1,000.00 $1,005.53 $4.18 0.84% Hypothetical Return $1,000.00 $1,020.63 $4.21 0.84% INVESTOR SHARES Actual Return $1,000.00 $1,007.47 $2.24 0.45% Hypothetical Return $1,000.00 $1,022.56 $2.26 0.45% DAILY ASSETS GOVERNMENT OBLIGATIONS FUND UNIVERSAL SHARES Actual Return $1,000.00 $1,008.69 $1.00 0.20% Hypothetical Return $1,000.00 $1,023.80 $1.00 0.20% DAILY ASSETS GOVERNMENT FUND PREFERRED SHARES Actual Return $1,000.00 $1,009.88 $0.60 0.12% Hypothetical Return $1,000.00 $1,024.20 $0.60 0.12% UNIVERSAL SHARES Actual Return $1,000.00 $1,009.48 $1.00 0.20% Hypothetical Return $1,000.00 $1,023.80 $1.00 0.20% INSTITUTIONAL SERVICE SHARES Actual Return $1,000.00 $1,008.23 $2.24 0.45% Hypothetical Return $1,000.00 $1,022.56 $2.26 0.45% INSTITUTIONAL SHARES Actual Return $1,000.00 $1,007.64 $2.84 0.57% Hypothetical Return $1,000.00 $1,021.97 $2.86 0.57% INVESTOR SHARES Actual Return $1,000.00 $1,006.29 $4.18 0.84% Hypothetical Return $1,000.00 $1,020.63 $4.21 0.84% DAILY ASSETS CASH FUND PREFERRED SHARES Actual Return $1,000.00 $1,009.65 $0.60 0.12% Hypothetical Return $1,000.00 $1,024.20 $0.60 0.12% UNIVERSAL SHARES Actual Return $1,000.00 $1,009.25 $1.00 0.20% Hypothetical Return $1,000.00 $1,023.80 $1.00 0.20% INSTITUTIONAL SERVICE SHARES Actual Return $1,000.00 $1,008.01 $2.24 0.45% Hypothetical Return $1,000.00 $1,022.56 $2.26 0.45% INSTITUTIONAL SHARES Actual Return $1,000.00 $1,007.41 $2.84 0.57% Hypothetical Return $1,000.00 $1,021.97 $2.86 0.57% INVESTOR SHARES Actual Return $1,000.00 $1,006.06 $4.18 0.84% Hypothetical Return $1,000.00 $1,020.63 $4.21 0.84% B SHARES Actual Return $1,000.00 $1,001.82 $4.41 1.64% Hypothetical Return $1,000.00 $1,009.02 $4.42 1.64% C SHARES Actual Return $1,000.00 $1,001.87 $4.60 1.63% Hypothetical Return $1,000.00 $1,009.51 $4.62 1.63%
Expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by the number of days in most recent fiscal half-year divided by 365 to reflect the half-year period. 21 MONARCH FUNDS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS February 28, 2005 NOTE 9. SUBSEQUENT EVENT The Adviser is indirectly owned by John Y. Keffer, a Trustee of the Trust. Mr. Keffer intends to sell the Adviser (the "Transaction"). The Transaction will result in the termination of each Advisory Agreement. On March 24, 2005, the Board of Trustees of the Trust approved, subject to shareholder approval, the continuation of each Advisory Agreement subsequent to the change of control. 22 FOR MORE INFORMATION: MONARCH FUNDS DAILY ASSETS TREASURY FUND DAILY ASSETS GOVERNMENT OBLIGATIONS FUND DAILY ASSETS GOVERNMENT FUND DAILY ASSETS CASH FUND MONARCH FUNDS P.O. Box 446 Portland, Maine 04112 (800) 754-8757 This report is authorized for distribution only to shareholders and to others who have received a copy of an applicable Monarch Funds prospectus 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. 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. Registrant does not currently accept nominees to the board of directors from shareholders. ITEM 11. CONTROLS AND PROCEDURES (a) The registrant's President and Treasurer have concluded that the registrant's disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940 (the "Act")) are effective, based on their evaluation of these disclosure controls and procedures required by Rule 30a-3(b) as of a date within 90 days of the filing date of this report. (b) There were no changes in the registrant's internal control over financial reporting (as defined in rule 30a-3(d) under the Act) that occurred during the registrant's last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a)(1) Not applicable. (a)(2) Certifications pursuant to 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/ Carl A. Bright --------------------------- Carl A. Bright, President Date May 4, 2005 --------------------------- 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/ Carl A. Bright ----------------------------------- Carl A. Bright, President Date May 4, 2005 ----------------------------------- By /s/ Stacey E. Hong ----------------------------------- Stacey E. Hong, Treasurer Date May 4, 2005 ----------------------------------- EX-31 2 cert302.txt 302 CERTIFICATIONS MONARCH FUNDS CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT I, Carl A. Bright, 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, and changes in net assets 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) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying 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 4, 2005 /s/ Carl A. Bright ------------------------------- ------------------------------- Carl A. Bright, President MONARCH FUNDS 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, and changes in net assets 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) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying 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 4, 2005 /s/ Stacey E. Hong ------------------------------- --------------------------- Stacey E. Hong, Treasurer EX-32 3 cert906.txt 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 4, 2005 ________________ /s/ Carl A. Bright - ---------------------- Carl A. Bright President Dated: May 4, 2005 ________________ /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-----