United States Securities and Exchange Commission Washington, D.C. 20549 Form N-CSR Certified Shareholder Report of Registered Management Investment Companies 811-6561 (Investment Company Act File Number) CCMI Funds _______________________________________________________________ (Exact Name of Registrant as Specified in Charter) 5800 Corporate Drive Pittsburgh, Pennsylvania 15237-7010 (412) 288-1900 (Registrant's Telephone Number) John W. McGonigle, Esquire Federated Investors Tower 1001 Liberty Avenue Pittsburgh, Pennsylvania 15222-3779 (Name and Address of Agent for Service) (Notices should be sent to the Agent for Service) Date of Fiscal Year End: 5/31/03 Date of Reporting Period: Fiscal year ended 5/31/03 Item 1. Reports to Stockholders
[Logo of CCMI Equity Fund]
CCMI EQUITY FUND
A Portfolio of CCMI Funds
INVESTMENT REVIEW
FINANCIAL STATEMENTS
INDEPENDENT AUDITORS' REPORT
BOARD OF TRUSTEES AND TRUST OFFICERS
LAST MEETING OF SHAREHOLDERS
May 31, 2003
Not FDIC Insured • May Lose Value • No Bank Guarantee
Investment Review
The investment objective for the CCMI Equity Fund (Fund) is to provide high total returns over longer periods of time through appreciation of capital and current income provided by dividends and interest payments. The Fund attempts to achieve this objective by investing primarily in a broad, diversified group of common stocks of companies deemed to have above average growth prospects, selling at reasonable valuations.
The Fund experienced a (6.55)% return at net asset value over the past twelve months ended May 31, 2003. This compares favorably to the (8.06)% return for the Standard & Poor's 500 Index (S&P 500).1 Stock selection was the primary reason for the outperformance. Citigroup, IBM, and Merck were among the top performing stocks during this time period that contributed to the Fund's outperformance. Each of these companies has been successful in consistently growing their earnings despite the economic malaise. The Fund's additions of Disney and McDonalds during the year also benefited the Fund's performance. The Fund's top ten positions as of May 31, 2003, and their weightings as a percent of the Fund's total net assets were:
Exxon Mobil Corp. |
| 3.3% |
Pfizer, Inc. |
| 2.5% |
Berkshire Hathaway, Inc., Class B |
| 2.4% |
Citigroup, Inc. |
| 2.3% |
Gillette Co. |
| 2.3% |
Merck & Co., Inc. |
| 2.2% |
Washington Mutual, Inc. |
| 2.1% |
Molex, Inc., Class A |
| 2.1% |
Jefferson-Pilot Corp. |
| 2.0% |
Alcoa, Inc. |
| 2.0% |
We continue to use the same disciplined approach to manage the Fund. Specifically, we continue to invest in companies that have superior management teams with proven track records, strong competitive positions, and above average long-term growth prospects. We seek to invest in these companies while the stocks are selling at reasonable valuations. Our discipline also dictates that the Fund have representation in all of the economic sectors with weightings that approach those of the S&P 500.
Thank you for your continued confidence and for your investment in the CCMI Equity Fund.
1 S&P 500 is an unmanaged capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through change in the aggregate market value of 500 stocks representing all major industries. The index is unmanaged and investments cannot be made in an index.
CCMI EQUITY FUND
GROWTH OF $10,000 INVESTED IN CCMI EQUITY FUND
Average Annual Total Returns1 For The Period Ended | ||
---|---|---|
1 Year |
| (11.92)% |
5 Years |
| (0.98)% |
Start of Performance (12/5/94) |
| 9.53% |
The graph above illustrates the hypothetical investment of $10,0002 in CCMI Equity Fund (the "Fund") from December 5, 1994 (start of performance) to May 31, 2003, compared to the Standard & Poor's 500 Index (S&P 500)3.
Past performance is no guarantee of future results. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Your investment return and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.
1 Total returns quoted reflect 5.75% maximum sales charge.
2 Represents a hypothetical investment of $10,000 in the Fund after deducting the maximum sales charge of 5.75% ($10,000 investment minus $575 sales charge = $9,425). The Fund's performance assumes the reinvestment of all dividends and distributions. The S&P 500 has been adjusted to reflect reinvestment of dividends on securities in the index. From August 1, 1999 to April 1, 2002, the Fund Shares were sold without a sales charge. Prior to August 1, 1999, the Fund Shares were sold with a maximum sales charge of 4.50%.
3 The S&P 500 is not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission requires to be reflected in the Fund's performance. The index is unmanaged.
Portfolio of Investments
May 31, 2003
Shares | ||||||
---|---|---|---|---|---|---|
COMMON STOCKS--91.3% | ||||||
Communications--3.3% | ||||||
53,000 | SBC Communications, Inc. | $ | 1,349,380 | |||
45,000 | Sprint Corp. | 610,200 | ||||
30,000 | Verizon Communications | 1,135,500 | ||||
TOTAL | 3,095,080 | |||||
Consumer Non-Durables--9.5% | ||||||
30,000 | Anheuser-Busch Cos., Inc. | 1,578,900 | ||||
42,000 | 1 | Constellation Brands, Inc., Class A | 1,157,940 | |||
31,000 | General Mills, Inc. | 1,450,180 | ||||
63,000 | Gillette Co. | 2,117,430 | ||||
30,000 | Kraft Foods, Inc., Class A | 972,000 | ||||
35,000 | PepsiCo, Inc. | 1,547,000 | ||||
TOTAL | 8,823,450 | |||||
Consumer Services--8.7% | ||||||
50,000 | Carnival Corp. | 1,530,000 | ||||
60,000 | 1 | Comcast Corp., Class A | 1,729,200 | |||
52,500 | Darden Restaurants, Inc. | 1,040,025 | ||||
15,000 | Gannett Co., Inc. | 1,185,000 | ||||
65,000 | McDonald's Corp. | 1,217,450 | ||||
70,000 | Walt Disney Co. | 1,375,500 | ||||
TOTAL | 8,077,175 | |||||
Electronic Technology--6.7% | ||||||
47,000 | 1 | Applied Materials, Inc. | 731,320 | |||
85,000 | 1 | Cisco Systems, Inc. | 1,383,800 | |||
150,000 | 1 | CommScope, Inc. | 1,525,500 | |||
40,000 | 1 | Electronics for Imaging, Inc. | 794,800 | |||
45,000 | Intel Corp. | 937,800 | ||||
42,000 | Texas Instruments, Inc. | 861,000 | ||||
TOTAL | 6,234,220 | |||||
Energy Minerals--7.1% | ||||||
25,000 | Anadarko Petroleum Corp. | 1,232,000 | ||||
15,000 | ChevronTexaco Corp. | 1,064,100 | ||||
22,500 | ConocoPhillips | 1,214,325 | ||||
85,000 | Exxon Mobil Corp. | 3,094,000 | ||||
TOTAL | 6,604,425 | |||||
COMMON STOCKS--continued | ||||||
Finance--19.2% | ||||||
38,000 | American Express Co. | $ | 1,583,080 | |||
26,200 | American International Group, Inc. | 1,516,456 | ||||
950 | 1 | Berkshire Hathaway, Inc., Class B | 2,255,300 | |||
52,066 | Citigroup, Inc. | 2,135,747 | ||||
40,100 | Duke Realty Investments, Inc. | 1,138,038 | ||||
45,000 | FleetBoston Financial Corp. | 1,330,650 | ||||
50,000 | J.P. Morgan Chase & Co. | 1,643,000 | ||||
45,000 | Jefferson-Pilot Corp. | 1,898,550 | ||||
35,000 | Merrill Lynch & Co., Inc. | 1,515,500 | ||||
30,000 | Prologis Trust | 806,700 | ||||
48,000 | Washington Mutual, Inc. | 1,957,440 | ||||
TOTAL | 17,780,461 | |||||
Health Services--1.4% | ||||||
40,000 | 1 | Laboratory Corporation of America Holdings | 1,286,000 | |||
Health Technology--12.4% | ||||||
25,000 | Abbott Laboratories | 1,113,750 | ||||
15,000 | 1 | Amgen, Inc. | 970,650 | |||
30,000 | Bristol-Myers Squibb Co. | 768,000 | ||||
25,000 | Johnson & Johnson | 1,358,750 | ||||
35,000 | 1 | Medimmune, Inc. | 1,240,750 | |||
37,000 | Merck & Co., Inc. | 2,056,460 | ||||
74,000 | Pfizer, Inc. | 2,295,480 | ||||
38,000 | Wyeth | 1,666,300 | ||||
TOTAL | 11,470,140 | |||||
Industrial Services--1.7% | ||||||
32,000 | Schlumberger Ltd. | 1,555,840 | ||||
Non-Energy Minerals--3.0% | ||||||
75,000 | Alcoa, Inc. | 1,845,750 | ||||
20,000 | Nucor Corp. | 952,800 | ||||
TOTAL | 2,798,550 | |||||
Producer Manufacturing--5.3% | ||||||
47,000 | General Electric Co. | 1,348,900 | ||||
78,900 | Molex, Inc., Class A | 1,901,490 | ||||
24,000 | United Technologies Corp. | 1,638,000 | ||||
TOTAL | 4,888,390 | |||||
Retail Trade--1.2% | ||||||
30,000 | 1 | Costco Wholesale Corp. | 1,111,500 | |||
Shares or Principal Amount | ||||||
COMMON STOCKS--continued | ||||||
Technology Services--6.3% | ||||||
75,000 | Autodesk, Inc. | $ | 1,118,250 | |||
10,000 | Automatic Data Processing, Inc. | 349,000 | ||||
32,000 | First Data Corp. | 1,325,440 | ||||
15,000 | International Business Machines Corp. | 1,320,600 | ||||
70,000 | Microsoft Corp. | 1,722,700 | ||||
TOTAL | 5,835,990 | |||||
Transportation--0.8% | ||||||
12,000 | United Parcel Service, Inc. | 749,160 | ||||
Utilities--4.7% | ||||||
40,100 | Black Hills Corp. | 1,205,005 | ||||
55,000 | Duke Energy Corp. | 1,065,900 | ||||
30,000 | Progress Energy, Inc. | 1,411,500 | ||||
20,000 | Southern Co. | 629,600 | ||||
TOTAL | 4,312,005 | |||||
TOTAL COMMON STOCKS (IDENTIFIED COST $73,955,715) | 84,622,386 | |||||
MUTUAL FUNDS--8.6% | ||||||
3,843,987 | Fifth Third Institutional Money Market Fund | 3,843,987 | ||||
4,091,993 | Goldman Sachs Financial Square Money Market Fund | 4,091,993 | ||||
TOTAL MUTUAL FUNDS (at net asset value) | 7,935,980 | |||||
TOTAL INVESTMENTS--99.9% (IDENTIFIED COST $81,891,695)2 | 92,558,366 | |||||
OTHER ASSETS AND LIABILITIES--NET--0.1% | 115,931 | |||||
TOTAL NET ASSETS--100% | $ | 92,674,297 | ||||
1 Non-income producing security.
2 The cost of investments for federal tax purposes amounts to $82,014,470.
Note: The categories of investments are shown as a percentage of net assets at May 31, 2003.
See Notes which are an integral part of the Financial Statements
Statement of Assets and Liabilities
May 31, 2003
Assets: |
| |||||||
Total investments in securities, at value (identified cost $81,891,695) | $ | 92,558,366 |
| |||||
Income receivable | 170,954 |
| ||||||
Receivable for investments sold | 214,505 |
| ||||||
Receivable for shares sold | 121,317 |
| ||||||
Total assets | 93,065,142 |
| ||||||
Liabilities: |
| |||||||
Payable for investments purchased | $ | 262,205 |
| |||||
Payable to bank | 3,888 |
| ||||||
Payable for investment adviser fee | 80,330 |
| ||||||
Payable for administrative personnel and services fee | 11,478 |
| ||||||
Accrued expenses | 32,944 |
| ||||||
Total liabilities | 390,845 |
| ||||||
Net assets for 7,307,328 shares outstanding | $ | 92,674,297 |
| |||||
Net Assets Consist of: |
| |||||||
Paid in capital | $ | 82,279,714 |
| |||||
Net unrealized appreciation of investments | 10,666,671 |
| ||||||
Accumulated net realized loss on investments and options | (392,519 | ) | ||||||
Undistributed net investment income | 120,431 |
| ||||||
Total Net Assets | $ | 92,674,297 |
| |||||
Net Asset Value, Offering Price and Redemption Proceeds Per Share: |
| |||||||
Net asset value per share ($92,674,297 ÷ 7,307,328 shares outstanding) | $12.68 |
| ||||||
Offering price per share (100/94.25 of $12.68) | $13.45 |
| ||||||
Redemption proceeds per share | $12.68 |
| ||||||
See Notes which are an integral part of the Financial Statements
Statement of Operations
Year Ended May 31, 2003
Investment Income: | ||||||||||||
Dividends | $ | 1,658,141 | ||||||||||
Interest | 68,766 | |||||||||||
Total income | 1,726,907 | |||||||||||
Expenses: | ||||||||||||
Investment adviser fee | $ | 730,352 | ||||||||||
Administrative personnel and services fee | 128,886 | |||||||||||
Custodian fees | 15,109 | |||||||||||
Transfer and dividend disbursing agent fees and expenses | 44,511 | |||||||||||
Directors'/Trustees' fees | 11,887 | |||||||||||
Auditing fees | 21,743 | |||||||||||
Legal fees | 12,892 | |||||||||||
Portfolio accounting fees | 70,977 | |||||||||||
Shareholder services fee | 214,809 | |||||||||||
Share registration costs | 24,208 | |||||||||||
Printing and postage | 21,220 | |||||||||||
Insurance premiums | 4,064 | |||||||||||
Miscellaneous | 6,282 | |||||||||||
Total expenses | 1,306,940 | |||||||||||
Waivers: | ||||||||||||
Waiver of investment adviser fee | $ | (190,426 | ) | |||||||||
Waiver of shareholder services fee | (85,924 | ) | ||||||||||
Total waivers | (276,350 | ) | ||||||||||
Net expenses | 1,030,590 | |||||||||||
Net investment income | 696,317 | |||||||||||
Realized and Unrealized Gain (Loss) on Investments: | ||||||||||||
Net realized gain on investments | 124,107 | |||||||||||
Net change in unrealized appreciation of investments | (8,216,301 | ) | ||||||||||
Net realized and unrealized loss on investments | (8,092,194 | ) | ||||||||||
Change in net assets resulting from operations | $ | (7,395,877 | ) | |||||||||
See Notes which are an integral part of the Financial Statements
Statement of Changes in Net Assets
Year Ended May 31, | ||||||||
Increase (Decrease) in Net Assets | ||||||||
Operations: | ||||||||
Net investment income | $ | 696,317 | $ | 391,044 | ||||
Net realized gain on investments and options | 124,107 | 1,108,914 | ||||||
Net change in unrealized appreciation/depreciation of investments and options | (8,216,301 | ) | (12,961,501 | ) | ||||
Change in net assets resulting from operations | (7,395,877 | ) | (11,461,543 | ) | ||||
Distributions to Shareholders: | ||||||||
Distributions from net investment income | (662,632 | ) | (305,921 | ) | ||||
Distributions from net realized gains on investments and options | (659,765 | ) | (2,012,957 | ) | ||||
Change in net assets resulting from distributions to shareholders | (1,322,397 | ) | (2,318,878 | ) | ||||
Share Transactions: | ||||||||
Proceeds from sale of shares | 21,036,061 | 68,839,185 | ||||||
Net asset value of shares issued to shareholders in payment of distributions declared | 707,995 | 440,665 | ||||||
Cost of shares redeemed | (24,599,190 | ) | (21,489,759 | ) | ||||
Change in net assets resulting from share transactions | (2,855,134 | ) | 47,790,091 | |||||
Change in net assets | (11,573,408 | ) | 34,009,670 | |||||
Net Assets: | ||||||||
Beginning of period | 104,247,705 | 70,238,035 | ||||||
End of period (including undistributed net investment income of $120,431 and $86,746, respectively) | $ | 92,674,297 | $ | 104,247,705 | ||||
See Notes which are an integral part of the Financial Statements
Financial Highlights
(For a Share Outstanding Throughout Each Period)
Year Ended May 31, | 2003 | 20021 | 2001 | 2000 | 1999 |
| |||||||||
Net Asset Value, Beginning of Period |
| $13.79 | $16.17 | $21.15 | $21.74 | $20.24 | |||||||||
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
| 0.10 |
|
| 0.07 |
|
| 0.07 |
|
| 0.08 |
|
| 0.08 |
|
Net realized and unrealized gain (loss) on investments and options |
| (1.03 | ) |
| (1.89 | ) |
| (1.88 | ) |
| 3.27 |
|
| 3.10 |
|
TOTAL FROM INVESTMENT OPERATIONS |
| (0.93 | ) |
| (1.82 | ) |
| (1.81 | ) |
| 3.35 |
|
| 3.18 |
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
| (0.09 | ) |
| (0.06 | ) |
| (0.08 | ) |
| (0.08 | ) |
| (0.08 | ) |
Distributions from net realized gain on investments and options |
| (0.09 | ) |
| (0.50 | ) |
| (3.09 | ) |
| (3.86 | ) |
| (1.60 | ) |
TOTAL DISTRIBUTIONS |
| (0.18 | ) |
| (0.56 | ) |
| (3.17 | ) |
| (3.94 | ) |
| (1.68 | ) |
Net Asset Value, End of Period |
| $12.68 | $13.79 | $16.17 | $21.15 | $21.74 | |||||||||
Total Return2 |
| (6.55 | %) |
| (11.46 | %) |
| (9.30 | %) |
| 16.12 | % |
| 15.90 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
| 1.20 | % |
| 1.19 | % |
| 1.17 | % |
| 1.09 | % |
| 1.00 | % |
Net investment income |
| 0.81 | % |
| 0.50 | % |
| 0.34 | % |
| 0.38 | % |
| 0.39 | % |
Expense waiver/reimbursement3 |
| 0.32 | % |
| 0.28 | % |
| 0.28 | % |
| 0.25 | % |
| 0.09 | % |
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (000 omitted) |
| $92,674 |
|
| $104,248 |
|
| $70,238 |
|
| $93,870 |
|
| $99,526 |
|
Portfolio turnover |
| 24 | % |
| 36 | % |
| 44 | % |
| 42 | % |
| 92 | % |
1 Beginning with the year ended May 31, 2002, the Fund was audited by KPMG LLP. Each of the previous years was audited by other auditors.
2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
Notes to Financial Statements
May 31, 2003
ORGANIZATION
CCMI Funds (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end, management investment company. The Trust consists of two portfolios. The financial statements included herein are only those of CCMI Equity Fund (the "Fund"), a diversified portfolio. The investment objective of the Fund is to provide high total return over longer periods of time through appreciation of capital and current income provided by dividends and interest payments.
SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles ("GAAP").
Investment Valuation
Listed equity securities are valued at the last sale price reported on the primary national securities exchange. Unlisted equity securities are generally valued at the mean of the latest bid and asked prices provided by an independent pricing service. Short-term securities are valued at the prices provided by an independent pricing service. However, short-term securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, which approximates fair market value. Investments in other open-end regulated investment companies are valued at net asset value. Securities for which no quotations are readily available are valued at fair value as determined in good faith using methods approved by the Board of Trustees (the "Trustees").
Investment Income, Expenses and Distributions
Interest income and expenses are accrued daily. Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value.
Premium and Discount Amortization
All premiums and discounts on fixed income securities are amortized/accreted for financial statement purposes.
Federal Taxes
It is the Fund's policy to comply with the Subchapter M provision of the Internal Revenue Code (the "Code") and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
When-Issued and Delayed Delivery Transactions
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities
purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning
interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Options Contracts
The Fund may write option contracts. A written option obligates the Fund to deliver (a call), or to receive (a put), the contract amount upon exercise by the holder of the option. The value of the option contract is recorded as a liability and unrealized gain or loss is measured by the difference between the current value and the premium received. For the year ended May 31, 2003, the Fund had no outstanding written options contracts.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Other
Investment transactions are accounted for on a trade date basis.
SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value).
Transactions in shares were as follows:
Year Ended May 31, |
| 2003 | 2002 |
| ||
Shares sold |
| 1,781,750 |
|
| 4,679,069 |
|
Shares issued to shareholders in payment of distributions declared |
| 62,410 |
|
| 29,948 |
|
Shares redeemed |
| (2,098,814 | ) |
| (1,491,062 | ) |
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
| (254,654 | ) |
| 3,217,955 |
|
FEDERAL TAX INFORMATION
The tax character of distributions as reported on the Statement of Changes in Net Assets for the years ended May 31, 2003 and 2002, was as follows:
|
| 2003 | 2002 | |
Ordinary Income1 |
| $662,632 |
| $ 305,921 |
Long-Term Capital Gains |
| 659,765 |
| 2,012,957 |
1 For tax purposes, short-term capital gain distributions are considered as ordinary income.
As of May 31, 2003, the components of distributable earnings on a tax basis were as follows:
Undistributed Ordinary Income | $ | 882,885 |
Undistributed Long-term Capital Gain |
| 121,387 |
Unrealized Appreciation |
| 10,543,896 |
At May 31, 2003, the cost of investments for federal tax purposes was $82,014,470. The net unrealized appreciation of investments for federal tax purposes was $10,543,896. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $14,692,040 and net unrealized depreciation from investments for those securities having an excess of cost over value of $4,148,144.
The difference between book-basis and tax-basis unrealized appreciation/depreciation is attributable in part to straddle loss deferrals. Under current tax regulations, capital losses realized after October 31 may be deferred and treated as occurring on the first day of the following fiscal year. As of May 31, 2003, for federal income tax purposes, post October losses of $1,153,585 were deferred to June 1, 2003.
INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Investment Adviser Fee
Commerce Capital Management, Inc. the Fund's adviser (the "Adviser") receives for its services an annual investment adviser fee equal to 0.85% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.
Administrative Fee
Federated Administrative Services ("FAS") provides the Fund with certain administrative personnel and services. The fee paid to FAS is based on a scale that ranges from 0.150% to 0.075% of the average aggregate net assets of the Trust for the period, subject to a minimum fee of $50,000 per portfolio.
Shareholder Services Fee
Under the terms of a Shareholder Services Agreement with FAS, the Fund will pay FAS up to 0.25% of average daily net assets of the Fund for the period. The fee paid to FAS is used to finance certain services for shareholders and to maintain shareholder accounts. FAS may voluntarily choose to waive any portion of its fee. FAS can modify or terminate this voluntary waiver at any time at its sole discretion.
Transfer and Dividend Disbursing Agent Fees and Expenses
Federated Services Company ("FServ"), through its subsidiary Federated Shareholder Services Company ("FSSC"), serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type, and number of accounts and transactions made by shareholders.
General
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations (and in-kind contributions), for the year ended May 31, 2003, were as follows:
Purchases |
| $ 19,400,605 |
Sales |
| $ 25,088,475 |
SUBSEQUENT EVENT
On July 21, 2003, the Trustees approved a change in the administrative services and shareholder services providers as well as the transfer and dividend disbursing agent from the parties identified in the preceding notes to Unified Financial Services, Inc. These changes are effective August 4, 2003.
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
The Fund hereby designates $659,765 as long-term capital gain dividends for the year ended May 31, 2003.
For the fiscal year ended May 31, 2003 certain dividends paid by CCMI Equity Fund may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Relief Reconciliation Act of 2003. Complete information will be reported in conjunction with your 2003 Form 1099-DIV.
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of
CCMI Equity Fund:
We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of CCMI Equity Fund (the "Fund") as of May 31, 2003, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the years in the two-year period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights of the CCMI Equity Fund for each of the years in the three-year period ended May 31, 2001 were audited by other auditors who have ceased operations. Those auditors expressed an unqualified opinion on those financial statements in their report dated July 9, 2001.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of May 31, 2003, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of CCMI Equity Fund as of May 31, 2003, the results of its operations for the year then ended, the changes in its net assets and its financial highlights for each of the years in the two-year period then ended, in conformity with accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Boston, Massachusetts
July 11, 2003, except for note--Subsequent Event,
as to which the date is July 21, 2003
Board of Trustees and Trust Officers
The following table gives information about each Board member and the senior officers of the Fund. The tables separately list Board members who are "interested persons" of the Fund (i.e., "Interested" Board members) and those who are not (i.e., "Independent" Board members). Unless otherwise noted, the address of each person listed is c/o Unified Fund Services, Inc., 431 N. Pennsylvania Street, Indianapolis, IN 46204. The CCMI complex consists of two investment company portfolios. Unless otherwise noted, each Board member oversees all portfolios in the CCMI Complex and serves for an indefinite term. The Fund's Statement of Additional Information includes additional information about the Trust's Trustees and is available, without charge and upon request, by calling 1-800-386-3111.
INTERESTED TRUSTEES BACKGROUND
|
|
|
Name | Principal Occupation(s), | |
Timothy L. Ashburn1 |
| Principal Occupation: Chairman of Unified Financial Services, Inc. since 1989 and Chief Executive Officer from 1989 to 1992 and 1994 to April 2002; President of Unified Financial Services from November 1997 to April 2000.
Other Directorships Held: Director of Unified Financial Services, Inc., Unified Fund Services, Inc., and Unified Financial Securities, Inc.; Trustee of AmeriPrime Funds, AmeriPrime Advisors Trust and Unified Series Trust. |
|
|
|
Ronald C. Tritschler1 |
| Principal Occupation: Chief Executive Officer, Director and legal counsel of The Webb Companies, a national real estate company, from 2001 to present; Executive Vice President and Director of The Webb Companies from 1990 to 2000.
Other Directorships Held: Director of The Lexington Bank and The Traxx Companies, an owner and operator of convenience stores. Trustee of AmeriPrime Funds, Unified Series Trust and AmeriPrime Advisors Trust. |
|
|
|
1 The Trustees have selected Unified Financial Securities, Inc. as the Funds' principal underwriter, effective August 4, 2003. Mr. Ashburn will be deemed to be an "interested person" of the Trust because he is a director of Unified Financial Securities, Inc. and Mr. Tritschler will be deemed to be an "interested person" of the Trust because he has an ownership interest in Unified Financial Services, Inc., parent of Unified Financial Securities, Inc.
INDEPENDENT TRUSTEES BACKGROUND
Name Address |
| Principal Occupation(s), |
---|---|---|
Gary E. Hippenstiel |
| Principal Occupation: Director, Vice President and Chief Investment Officer of Legacy Trust Company N.A. since 1992.
Other Directorships Held: Trustee of AmeriPrime Funds, AmeriPrime Advisors Trust, Unified Series Trust and Access Variable Insurance Trust. |
|
|
|
Stephen A. Little |
| Principal Occupation: President and founder, The Rose, Inc., a registered investment advisor, since April 1993.
Other Directorships Held: Trustee of AmeriPrime Funds, Unified Series Trust and AmeriPrime Advisors Trust. |
|
|
|
Daniel J. Condon |
| Principal Occupation: Vice President and General Manager, International Crankshaft Inc., an automotive equipment manufacturing company, 1990 to present.
Other Directorships Held: Trustee of AmeriPrime Funds, Unified Series Trust and AmeriPrime Advisors Trust. |
|
|
|
OFFICERS
|
|
|
Name | Principal Occupation(s) and Previous Positions | |
Peter J. Germain |
| Principal Occupations: Senior Vice President and Director, Mutual Fund Services Division, President of certain investment companies for which Federated Securities Corp. or Edgewood Services, Inc. serve as Principal Distributor, Federated Services Company. Previous Positions: Senior Corporate Counsel, Federated Services Company; President, Edgewood Services, Inc. |
|
|
|
John W. McGonigle |
| Principal Occupations: Executive Vice President and Secretary of the Federated Fund Complex; Executive Vice President, Secretary and Director, Federated Investors, Inc. |
|
|
|
Richard J. Thomas |
| Principal Occupations: Principal Financial Officer and Treasurer of the Federated Fund Complex; Senior Vice President, Federated Administrative Services. |
|
|
|
Beth S. Broderick |
| Principal Occupations: Vice President, Federated Services Company.
|
|
|
|
Judith J. Mackin |
| Principal Occupations: Vice President, Federated Services Company; Treasurer and Assistant Treasurer of certain investment companies for which Federated Securities Corp. and Edgewood Services, Inc. are the principal distributor.
|
|
|
|
Last Meeting of Shareholders
A Special Meeting of shareholders of the CCMI Fund (the "Trust") consisting of two portfolios: CCMI Bond Fund and CCMI Equity Fund, was held on June 27, 2003. The following item was considered by shareholders and the results of their voting are listed below. Unless otherwise noted, each matter was approved.
1. ELECTION OF TRUSTEES
|
| Shares Voted | Shares Withheld | |
Timothy L. Ashburn |
| 17,541,935 |
| 0 |
Ronald C. Tritschler |
| 17,541,935 |
| 0 |
Gary E. Hippenstiel |
| 17,541,935 |
| 0 |
Stephen A. Little |
| 17,541,935 |
| 0 |
Daniel J. Condon |
| 17,541,935 |
| 0 |
Mutual funds are not bank deposits or obligations, are not guaranteed by any bank, and are not insured or guaranteed by the U.S. Government, the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other government agency. Investment in mutual funds involves investment risk, including the possible loss of principal.
This report is authorized for distribution to prospective investors only when preceded or accompanied by the Fund's prospectus, which contains facts concerning each Fund's objective and policies, management fees, expenses and other information.
Federated Securities Corp., Distributor
Investment Company Act File No. 811-6561
Cusip 12501K302
G00926-02 (7/03)
[Logo of CCMI Funds]
CCMI BOND FUND
A Portfolio of CCMI Funds
INVESTMENT REVIEW
FINANCIAL STATEMENTS
INDEPENDENT AUDITORS' REPORT
BOARD OF TRUSTEES AND TRUST OFFICERS
LAST MEETING OF SHAREHOLDERS
May 31, 2003
Not FDIC Insured • May Lose Value • No Bank Guarantee
Investment Review
The fixed income markets have continued to rally over the last 11 months, with the Lehman Brothers U.S. Aggregate Bond Index1 (LBUSABI) experiencing a 10.62% return during that time period, and a 2.62% return for the 3-month period ended May 31, 2003. The bond market has been resilient since the resolution of the war with Iraq. Some speculated that yields would rise sharply when a clear and concise end to the war was at hand. Initially bonds sold off in late March but have since rallied, with the LBUSABI returning 2.71% since March 31, 2003.
The investment objective of the CCMI Bond Fund (Fund) is to provide as high a level of current income as is consistent with the preservation of capital. The Fund attempts to achieve this objective by primarily investing in a diversified portfolio of investment grade fixed income securities, and implementing this strategy by investing in the sectors of the market that offer the best relative value.
The Fund experienced a 12.97% return at net asset value for the 11-month period ending May 31, 2003. This compares favorably to the LBUSABI, which returned 10.62% for the same time period. This performance included income dividend payments of $0.44 per share and capital gains of $0.01. Sector allocation was the primary driver in this level of outperformance. We positioned the Fund to have higher exposure to the corporate bond market and less exposure to the mortgage market as it relates to the sector allocation of the specified benchmark. With rates remaining at historically low levels, the 10-year U.S. Treasury yield at 3.37% as of May 31, 2003, prepayments on mortgages have continued to accelerate, resulting in underperformance in the sector. The Lehman Brothers Mortgage-Backed Securities Index2 returned 6.4% for the last 11 months, substantially falling short of the performance of the broader market. The corporate market, on the other hand, has led the market higher, with the Lehman Brothers Corporate Intermediate Bond Index3 returning 14.11% over the last 11 months. Spreads on corporate bonds continued to tighten relative to the appropriate benchmark U.S. Treasury, which led to outperformance in this sector. This sector allocation decision has resulted in the 2.35 percentage points of outperformance achieved over the last 11 months. The Fund's top ten holdings as of May 31, 2003, and their respective weightings as a percent of the total Fund were as follows:
Federal National Mortgage Association, Note, 5.75%, 11/7/2017 |
| 2.3% |
Federal Home Loan Mortgage Corporation, Note, Series MTN, 6.15%, 12/27/2022 |
| 2.2% |
Federal Home Loan Bank System, Series HG08, 1.74%, 3/3/2008 |
| 2.2% |
Regions Financial Corp., Sub. Note, 7.75%, 9/15/2024 |
| 2.1% |
Federal Home Loan Mortgage Corporation, Sub. Note, 6.375%, 8/1/2011 |
| 1.9% |
Government National Mortgage Association, Pool 565504, 5.50%, 9/15/2032 |
| 1.8% |
Federal Home Loan Mortgage Corporation, Note, Series MTN, 6.05%, 11/7/2017 |
| 1.8% |
International Business Machines Corp., Deb., 8.375%, 11/1/2019 |
| 1.8% |
Federal Home Loan Bank System, Bond, 1.79%, 3/24/2008 |
| 1.7% |
Target Corp., Sr. Deb., 7.00%, 7/15/2031 |
| 1.6% |
Thank you for your continued confidence and for your investment in the CCMI Bond Fund.
1 LBUSABI is an unmanaged index composed of securities from the Lehman Brothers Government/Corporate Bond Index, Mortgage-Backed Securities Index and the Asset-Backed Securities Index. Total return comprises price appreciation/depreciation and income as a percentage of the original investment. Indices are rebalanced monthly by market capitalization.
2 Lehman Brothers Mortgage-Backed Securities Index is an unmanaged index composed of all fixed securities mortgage pools by Government National Mortgage Association (GNMA), Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, including GNMA Graduated Payment Mortgages.
3 Lehman Brothers Corporate Intermediate Bond Index (U.S. Dollars): A subset of the Lehman Brothers Corporate Bond Index covering all corporate, publicly issued, fixed-rate, nonconvertible U.S. debt issues rated at least Baa with at least $50 million principal outstanding and maturity less than 10 years.
CCMI BOND FUND
GROWTH OF $10,000 INVESTED IN CCMI BOND FUND
Cumulative Total Return1 For The Period Ended | ||
---|---|---|
Start of Performance (7/1/2002) |
| 7.90% |
The graph above illustrates the hypothetical investment of $10,0002 in CCMI Bond Fund (the "Fund") from July 1, 2002 (start of performance) to May 31, 2003, compared to the Lehman Brothers U.S. Aggregate Bond Index (LBUSABI)3.
Past performance is no guarantee of future results. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Your investment return and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.
1 Total return quoted reflects 4.50% maximum sales charge.
2 Represents a hypothetical investment of $10,000 in the Fund after deducting the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge = $9,550). The Fund's performance assumes the reinvestment of all dividends and distributions. The LBUSABI has been adjusted to reflect reinvestment of dividends on securities in the index.
3 The LBUSABI is not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission requires to be reflected in the Fund's performance. The index is unmanaged.
Portfolio of Investments
May 31, 2003
Principal |
|
| Value | ||||
---|---|---|---|---|---|---|---|
|
|
| CORPORATE BONDS--45.8% |
|
|
|
|
|
|
| Air Transportation--0.3% |
|
|
|
|
$ | 350,000 |
| United Parcel Service, Inc., Note, 5.00%, 8/15/2013 |
| $ | 352,061 |
|
|
|
| Banking--9.1% |
|
|
|
|
| 601,000 |
| African Development Bank, Note, 6.875%, 10/15/2015 |
|
| 750,013 |
|
| 191,000 |
| BT Capital Trust, Company Guarantee, Series B1, 7.90%, 1/15/2027 |
|
| 219,673 |
|
| 500,000 |
| Bank of America Corp., Sub. Note, Series NOTZ, 6.50%, 5/15/2017 |
|
| 521,001 |
|
| 1,000,000 |
| Comerica Bank, Sub. Note, 8.375%, 7/15/2024 |
|
| 1,230,635 |
|
| 1,100,000 |
| Countrywide Home Loans, Inc., Company Guarantee, 8.00%, 8/12/2019 |
|
| 1,109,111 |
|
| 800,000 |
| First Union Institutional Capital II, Company Guarantee, 7.85%, 1/1/2027 |
|
| 953,162 |
|
| 500,000 |
| Firstar Bank, N.A., Sub. Note, 7.125%, 12/1/2009 |
|
| 608,903 |
|
| 250,000 |
| HSBC USA Capital Trust IV, Company Guarantee, 7.53%, 12/4/2026 |
|
| 279,763 |
|
| 188,000 |
| NB Capital Trust II, Company Guarantee, 7.83%, 12/15/2026 |
|
| 224,825 |
|
| 1,257,000 |
| Peoples Bank Bridgeport, Sub. Note, 9.875%, 11/15/2010 |
|
| 1,536,618 |
|
| 1,900,000 |
| Regions Financial Corp., Sub. Note, 7.75%, 9/15/2024 |
|
| 2,437,145 |
|
| 500,000 |
| Union Planters Capital Trust, Bank Guarantee, 8.20%, 12/15/2026 |
|
| 563,564 |
|
|
|
| TOTAL |
|
| 10,434,413 |
|
|
|
| Beverage & Tobacco--1.5% |
|
|
|
|
| 895,000 |
| Anheuser-Busch Cos., Inc., Bond, 5.35%, 5/15/2023 |
|
| 915,079 |
|
| 750,000 |
| Anheuser-Busch Cos., Inc., Bond, 5.95%, 1/15/2033 |
|
| 843,705 |
|
|
|
| TOTAL |
|
| 1,758,784 |
|
|
|
| Energy--Integrated--0.6% |
|
|
|
|
| 500,000 |
| Tosco Corp., Note, 8.125%, 2/15/2030 |
|
| 690,967 |
|
|
|
| Finance--Retail--1.9% |
|
|
|
|
| 865,000 |
| Commercial Credit Co., Note, 6.625%, 6/1/2015 |
|
| 1,039,983 |
|
| 1,000,000 |
| Household Finance Corp., Sr. Note, Series MTN, 2.19%, 2/28/2008 |
|
| 1,010,244 |
|
| 166,000 |
| Household Finance Corp., Sr. Note, Series NOT1, 7.50%, 4/15/2017 |
|
| 175,652 |
|
|
|
| TOTAL |
|
| 2,225,879 |
|
|
|
| Financial Intermediaries--3.8% |
|
|
|
|
| 500,000 |
| Citigroup, Inc., 6.50%, 1/18/2011 |
|
| 590,573 |
|
| 250,000 |
| Citigroup, Inc., Sub. Note, 7.25%, 10/1/2010 |
|
| 305,889 |
|
| 1,000,000 |
| Goldman Sachs Group, Inc., 6.60%, 1/15/2012 |
|
| 1,168,395 |
|
| 900,000 |
| Lehman Brothers Holdings, Inc., Note, 6.75%, 7/1/2022 |
|
| 951,860 |
|
| 230,000 |
| Merrill Lynch & Co., Inc., Bond, 6.50%, 7/15/2018 |
|
| 269,776 |
|
| 1,000,000 |
| Wells Fargo & Co., Sub. Note, 5.125%, 9/1/2012 |
|
| 1,083,298 |
|
|
|
| TOTAL |
|
| 4,369,791 |
|
|
|
| Financial Services--8.6% |
|
|
|
|
| 1,000,000 |
| Beneficial Corp., Note, Series E, 6.47%, 11/17/2008 |
|
| 1,144,808 |
|
| 1,250,000 |
| Credit Suisse First Boston USA, Inc., Note, 6.125%, 11/15/2011 |
|
| 1,398,090 |
|
| 1,000,000 |
| General Electric Capital Corp., 6.00%, 6/15/2012 |
|
| 1,139,785 |
|
| 1,500,000 |
| General Electric Capital Corp., Note, Series MTN, 6.75%, 3/15/2032 |
|
| 1,802,690 |
|
| 500,000 |
| General Electric Capital Corp., Sr. Note, 5.10%, 4/25/2018 |
|
| 507,014 |
|
| 500,000 |
| JPM Capital Trust I, Company Guarantee, 7.54%, 1/15/2027 |
|
| 566,763 |
|
| 800,000 |
| JPM Capital Trust II, Bond, 7.95%, 2/1/2027 |
|
| 935,599 |
|
| 1,000,000 |
| Morgan Stanley, Note, 6.60%, 4/1/2012 |
|
| 1,175,461 |
|
| 600,000 |
| Morgan Stanley, Unsub., 6.75%, 4/15/2011 |
|
| 707,608 |
|
| 265,000 |
| Morgan Stanley & Co., Inc., Deb., 7.50%, 2/1/2024 |
|
| 282,516 |
|
| 215,000 |
| Student Loan Marketing Association, 5.125%, 8/27/2012 |
|
| 232,038 |
|
|
|
| TOTAL |
|
| 9,892,372 |
|
|
|
| Food & Drug Retailers--1.0% |
|
|
|
|
| 1,000,000 |
| McDonald's Corp., Sub. Deb., 7.31%, 9/15/2027 |
|
| 1,107,937 |
|
|
|
| Industrial Products & Equipment--2.7% |
|
|
|
|
| 1,000,000 |
| AutoZone, Inc., Sr. Note, 5.875%, 10/15/2012 |
|
| 1,102,055 |
|
| 500,000 |
| General Electric Co., Note, 5.00%, 2/1/2013 |
|
| 535,035 |
|
| 1,000,000 |
| Honeywell International, Inc., Bond, 6.125%, 11/1/2011 |
|
| 1,150,811 |
|
| 300,000 |
| Johnson Controls, Inc., Deb., 8.20%, 6/15/2024 |
|
| 327,612 |
|
|
|
| TOTAL |
|
| 3,115,513 |
|
|
|
| Insurance--0.1% |
|
|
|
|
| 100,000 |
| Aetna, Inc., Deb., 7.25%, 8/15/2023 |
|
| 119,319 |
|
|
|
| Metals & Mining--0.7% |
|
|
|
|
| 670,000 |
| Alcoa, Inc., Note, 6.50%, 6/1/2011 |
|
| 784,859 |
|
|
|
| Pharmaceuticals--1.0% |
|
|
|
|
| 1,000,000 |
| Bristol-Myers Squibb Co., Note, 5.75%, 10/1/2011 |
|
| 1,124,700 |
|
|
|
| Rail Industry--0.3% |
|
|
|
|
| 300,000 |
| Burlington Northern Santa Fe, Equip. Trust, Series 99-A, 6.20%, 5/1/2013 |
|
| 351,635 |
|
|
|
| Retailers--2.7% |
|
|
|
|
| 1,000,000 |
| May Department Stores Co., Company Guarantee, 8.30%, 7/15/2026 |
|
| 1,163,780 |
|
| 102,000 |
| May Department Stores Co., Sr. Deb., 8.50%, 6/1/2019 |
|
| 129,399 |
|
| 1,500,000 |
| Target Corp., Sr. Deb., 7.00%, 7/15/2031 |
|
| 1,861,471 |
|
|
|
| TOTAL |
|
| 3,154,650 |
|
|
|
| Sovereign--0.5% |
|
|
|
|
| 500,000 |
| Tennessee Valley Authority, Bond, Series E, 6.25%, 12/15/2017 |
|
| 610,509 |
|
|
|
| Technology Services--1.8% |
|
|
|
|
| 1,460,000 |
| International Business Machines Corp., Deb., 8.375%, 11/1/2019 |
|
| 2,032,521 |
|
|
|
| Telecommunications & Cellular--6.7% |
|
|
|
|
| 1,000,000 |
| BellSouth Capital Funding Corp., Deb., 7.875%, 2/15/2030 |
|
| 1,333,365 |
|
| 634,000 |
| GTE Corp., Deb., 7.90%, 2/1/2027 |
|
| 724,739 |
|
| 800,000 |
| Nynex Capital Funding Co., Company Guarantee, Series B, 8.23%, 10/15/2009 |
|
| 998,459 |
|
| 260,000 |
| Pacific Bell, Deb., 6.625%, 10/15/2034 |
|
| 296,838 |
|
| 250,000 |
| Pacific Bell, Deb., 7.375%, 6/15/2025 |
|
| 258,854 |
|
| 405,000 |
| Pacific Bell, Deb., 7.50%, 2/1/2033 |
|
| 417,718 |
|
| 300,000 |
| Southwestern Bell Telephone Co., Deb., 6.625%, 9/1/2024 |
|
| 309,746 |
|
| 1,300,000 |
| Southwestern Bell Telephone Co., Deb., 7.00%, 7/1/2015 |
|
| 1,613,249 |
|
| 1,000,000 |
| Verizon Global Funding, Note, 6.875%, 6/15/2012 |
|
| 1,185,084 |
|
| 500,000 |
| Vodafone Group PLC, Note, 5.375%, 1/30/2015 |
|
| 540,635 |
|
|
|
| TOTAL |
|
| 7,678,687 |
|
|
|
| Utilities--2.5% |
|
|
|
|
| 100,000 |
| Dayton Power & Light Co., 1st Mtg. Bond, 8.15%, 1/15/2026 |
|
| 104,617 |
|
| 500,000 |
| Delmarva Power and Light Co., 1st Mtg. Bond, Series MBIA, 7.71%, 6/1/2025 |
|
| 556,551 |
|
| 250,000 |
| Entergy Louisiana, Inc., 1st Mtg. Bond, 6.50%, 3/1/2008 |
|
| 256,940 |
|
| 300,000 |
| Indianapolis, IN Power & Light Co., 1st Mtg. Bond, Series MBIA, 7.375%, 8/1/2007 |
|
| 345,528 |
|
| 915,000 |
| Mississippi Power Co., 1st Mtg. Bond, 6.875%, 12/1/2025 |
|
| 1,008,769 |
|
| 261,000 |
| National Rural Utilities Cooperative Finance Corp., Collateral Trust, Series MBIA, 7.20%, 10/1/2015 |
|
| 326,478 |
|
| 250,000 |
| Virginia Electric & Power Co., 1st Ref. Mtg., Series MBI, 7.00%, 1/1/2024 |
|
| 263,414 |
|
|
|
| TOTAL |
|
| 2,862,297 |
|
|
|
| TOTAL CORPORATE BONDS (IDENTIFIED COST $48,242,418) |
|
| 52,666,894 |
|
|
|
| GOVERNMENT AGENCIES--42.0% |
|
|
|
|
|
|
| Federal Home Loan Mortgage Corporation--11.5% |
|
|
|
|
| 1,000,000 |
| Federal Home Loan Mortgage Corporation, 6.05%, 11/27/2017 |
|
| 1,018,976 |
|
| 1,000,000 |
| Federal Home Loan Mortgage Corporation, Note, 5.125%, 8/20/2012 |
|
| 1,037,843 |
|
| 1,000,000 |
| Federal Home Loan Mortgage Corporation, Note, 6.00%, 6/27/2017 |
|
| 1,111,984 |
|
| 950,000 |
| Federal Home Loan Mortgage Corporation, Note, 6.25%, 7/31/2017 |
|
| 956,316 |
|
| 1,130,000 |
| Federal Home Loan Mortgage Corporation, Note, Series MTN, 6.00%, 12/27/2022 |
|
| 1,133,288 |
|
| 2,000,000 |
| Federal Home Loan Mortgage Corporation, Note, Series MTN, 6.05%, 11/7/2017 |
|
| 2,033,642 |
|
| 2,500,000 |
| Federal Home Loan Mortgage Corporation, Note, Series MTN, 6.15%, 12/27/2022 |
|
| 2,507,515 |
|
| 1,000,000 |
| Federal Home Loan Mortgage Corporation, Sub. Note, 6.25%, 3/5/2012 |
|
| 1,135,875 |
|
| 2,000,000 |
| Federal Home Loan Mortgage Corporation, Sub. Note, 6.375%, 8/1/2011 |
|
| 2,229,118 |
|
|
|
| TOTAL |
|
| 13,164,557 |
|
|
|
| Federal National Mortgage Association--10.3% |
|
|
|
|
| 815,000 |
| Federal National Mortgage Association, Bond, 6.16%, 1/30/2023 |
|
| 820,903 |
|
| 1,250,000 |
| Federal National Mortgage Association, Note, 5.50%, 11/8/2016 |
|
| 1,339,117 |
|
| 2,500,000 |
| Federal National Mortgage Association, Note, 5.75%, 11/7/2017 |
|
| 2,650,040 |
|
| 1,000,000 |
| Federal National Mortgage Association, Note, 6.00%, 8/14/2015 |
|
| 1,008,458 |
|
| 1,000,000 |
| Federal National Mortgage Association, Note, 6.20%, 6/13/2017 |
|
| 1,124,618 |
|
| 600,000 |
| Federal National Mortgage Association, Note, 6.25%, 2/28/2017 |
|
| 672,384 |
|
| 1,560,000 |
| Federal National Mortgage Association, Note, 7.00%, 4/15/2022 |
|
| 1,634,117 |
|
| 500,000 |
| Federal National Mortgage Association, Note, Series B, 6.37%, 2/25/2014 |
|
| 517,303 |
|
| 1,000,000 |
| Federal National Mortgage Association, Unsecd. Note, 4.55%, 12/18/2009 |
|
| 1,014,957 |
|
| 1,000,000 |
| Federal National Mortgage Association, Unsecd. Note, 5.50%, 12/30/2014 |
|
| 1,022,207 |
|
|
|
| TOTAL |
|
| 11,804,104 |
|
|
|
| Government Agencies--20.2% |
|
|
|
|
| 1,000,000 |
| Federal Farm Credit Bank, Bond, 5.05%, 12/27/2012 |
|
| 1,062,833 |
|
| 2,000,000 |
| Federal Home Loan Bank System, Bond, 1.79%, 3/24/2008 |
|
| 2,000,174 |
|
| 1,485,000 |
| Federal Home Loan Bank System, Bond, 5.00%, 6/18/2018 |
|
| 1,488,827 |
|
| 1,000,000 |
| Federal Home Loan Bank System, Bond, 5.00%, 6/26/2018 |
|
| 1,001,125 |
|
| 1,000,000 |
| Federal Home Loan Bank System, Bond, 5.05%, 6/26/2018 |
|
| 1,002,116 |
|
| 1,000,000 |
| Federal Home Loan Bank System, Bond, 5.125%, 9/27/2012 |
|
| 1,042,747 |
|
| 1,250,000 |
| Federal Home Loan Bank System, Bond, 5.24%, 3/26/2018 |
|
| 1,270,071 |
|
| 1,010,000 |
| Federal Home Loan Bank System, Bond, 5.25%, 6/5/2023 |
|
| 1,003,658 |
|
| 1,150,000 |
| Federal Home Loan Bank System, Bond, 5.37%, 3/19/2018 |
|
| 1,171,619 |
|
| 1,000,000 |
| Federal Home Loan Bank System, Bond, 5.50%, 4/10/2018 |
|
| 1,003,560 |
|
| 1,000,000 |
| Federal Home Loan Bank System, Bond, 5.70%, 11/21/2017 |
|
| 1,016,146 |
|
| 1,000,000 |
| Federal Home Loan Bank System, Bond, 5.75%, 2/5/2018 |
|
| 1,022,960 |
|
| 1,100,000 |
| Federal Home Loan Bank System, Bond, 5.875%, 9/19/2017 |
|
| 1,112,211 |
|
| 1,500,000 |
| Federal Home Loan Bank System, Bond, 6.00%, 1/17/2023 |
|
| 1,507,871 |
|
| 1,000,000 |
| Federal Home Loan Bank System, Bond, 6.15%, 9/5/2017 |
|
| 1,010,392 |
|
| 1,200,000 |
| Federal Home Loan Bank System, Bond, 6.25%, 8/15/2017 |
|
| 1,210,034 |
|
| 1,250,000 |
| Federal Home Loan Bank System, Bond, 6.50%, 6/27/2017 |
|
| 1,253,800 |
|
| 530,000 |
| Federal Home Loan Bank System, Bond, Series CP15, 6.025%, 10/16/2015 |
|
| 538,613 |
|
| 2,500,000 |
| Federal Home Loan Bank System, Series HG08, 1.74%, 3/3/2008 |
|
| 2,501,410 |
|
|
|
| TOTAL |
|
| 23,220,167 |
|
|
|
| TOTAL GOVERNMENT AGENCIES (IDENTIFIED COST $46,821,928) |
|
| 48,188,828 |
|
|
|
| MORTGAGE BACKED SECURITIES--4.1% |
|
|
|
|
|
|
| Federal Home Loan Mortgage Corporation--0.3% |
|
|
|
|
| 335,183 |
| Federal Home Loan Mortgage Corporation, Pool N98839, 7.00%, 5/1/2007 |
|
| 345,695 |
|
|
|
| Government National Mortgage Association--3.8% |
|
|
|
|
| 539,869 |
| Government National Mortgage Association, Pool 494081, 7.00%, 8/15/2014 |
|
| 579,432 |
|
| 713,722 |
| Government National Mortgage Association, Pool 544525, 7.00%, 5/15/2031 |
|
| 752,270 |
|
| 1,982,051 |
| Government National Mortgage Association, Pool 565504, 5.50%, 9/15/2032 |
|
| 2,074,933 |
|
| 857,379 |
| Government National Mortgage Association, Pool 780758, 7.00%, 4/15/2013 |
| $ | 920,326 |
|
|
|
| TOTAL |
|
| 4,326,961 |
|
|
|
| TOTAL MORTGAGE BACKED SECURITIES (IDENTIFIED COST $4,434,983) |
|
| 4,672,656 |
|
|
|
| LONG-TERM MUNICIPALS--4.0% |
|
|
|
|
|
|
| North Carolina--0.9% |
|
|
|
|
| 1,070,000 |
| North Carolina Educational Facilities Finance Agency, Refunding Revenue Bonds, Weekly VRDNs (Wachovia Bank N.A. LOC) |
|
| 1,070,000 |
|
|
|
| Oklahoma--0.7% |
|
|
|
|
| 620,000 |
| Choctaw County, OK IDA, Revenue Bonds, 8.00% Bonds (Future Quest, Inc.), 7/1/2012 |
|
| 807,345 |
|
|
|
| Tennessee--2.4% |
|
|
|
|
| 1,000,000 |
| Clarksville, TN Public Building Authority, GO UT, Weekly VRDNs (SunTrust Bank LOC) |
|
| 1,000,000 |
|
| 1,800,000 |
| Jefferson City, TN HEFA, Revenue Bond, VRNs (SunTrust Bank LOC), 6/1/2008 |
|
| 1,800,000 |
|
|
|
| TOTAL |
|
| 2,800,000 |
|
|
|
| TOTAL LONG-TERM MUNICIPALS (IDENTIFIED COST $4,587,572) |
|
| 4,677,345 |
|
|
|
| PREFERRED STOCKS--1.9% |
|
|
|
|
|
|
| Banking--0.3% |
|
|
|
|
| 11,000 |
| ML Preferred Capital Trust V, Pfd., $1.82 |
|
| 299,860 |
|
| 4,000 |
| UBS Preferred Funding Trust IV, Pfd. |
|
| 100,400 |
|
|
|
| TOTAL |
|
| 400,260 |
|
|
|
| Financial Intermediaries--0.5% |
|
|
|
|
| 10,150 |
| Citigroup Capital IX, Cumulative Pfd. |
|
| 260,754 |
|
| 10,000 |
| Wells Fargo & Co., Pfd., $5.85 |
|
| 255,000 |
|
|
|
| TOTAL |
|
| 515,754 |
|
|
|
| Financial Services--0.6% |
|
|
|
|
| 15,000 |
| BAC Capital Trust III, Pfd. |
|
| 406,800 |
|
| 10,000 |
| Wachovia Preferred Funding, REIT Perpetual Pfd. Stock, Series A |
|
| 275,900 |
|
|
|
| TOTAL |
|
| 682,700 |
|
|
|
| Insurance--0.5% |
|
|
|
|
| 6,400 |
| ING Groep N.V., Pfd. |
|
| 173,440 |
|
| 15,500 |
| PreferredPlus Trust, Pfd., Series GSG1 |
|
| 400,675 |
|
|
|
| TOTAL |
|
| 574,115 |
|
|
|
| TOTAL PREFERRED STOCKS (IDENTIFIED COST $2,041,120) |
|
| 2,172,829 |
|
|
|
| MUTUAL FUNDS--5.0% |
|
|
|
|
| 2,641,036 |
| Fifth Third Institutional Money Market Fund |
|
| 2,641,036 |
|
| 3,100,000 |
| Goldman Sachs Financial Square Money Market Fund |
|
| 3,100,000 |
|
|
|
| TOTAL MUTUAL FUNDS (at net asset value) |
|
| 5,741,036 |
|
|
|
| TOTAL INVESTMENTS--102.8% (IDENTIFIED COST $111,869,057)1 |
|
| 118,119,588 |
|
|
|
| OTHER ASSETS AND LIABILITIES--NET--(2.8)% |
|
| (3,251,036 | ) |
|
|
| TOTAL NET ASSETS--100% |
| $ | 114,868,552 |
|
1 The cost of investments for federal tax purposes amounts to $111,869,057.
Note: The categories of investments are shown as a percentage of net assets at May 31, 2003.
The following acronyms are used throughout this portfolio:
GO | - --General Obligation |
HEFA | - --Health and Education Facilities Authority |
IDA | - --Industrial Development Authority |
LOC | - --Letter of Credit |
REIT | - --Real Estate Investment Trust |
UT | - --Unlimited Tax |
VRDNs | - --Variable Rate Demand Notes |
VRNs | - --Variable Rate Notes |
See Notes which are an integral part of the Financial Statements
Statement of Assets and Liabilities
May 31, 2003
Assets: | ||||||
Total investments in securities, at value (identified cost $111,869,057) | $ | 118,119,588 | ||||
Income receivable | 1,555,801 | |||||
Receivable for shares sold | 20,100 | |||||
Total assets | 119,695,489 | |||||
Liabilities: | ||||||
Payable for investments purchased | $ | 4,486,594 | ||||
Payable for shares redeemed | 172,400 | |||||
Payable to bank | 2,681 | |||||
Payable for investment adviser fee | 91,891 | |||||
Payable for administrative personnel and services fee | 14,274 | |||||
Accrued expenses | 59,097 | |||||
Total liabilities | 4,826,937 | |||||
Net assets for 10,611,537 shares outstanding | $ | 114,868,552 | ||||
Net Assets Consist of: | ||||||
Paid in capital | $ | 107,448,842 | ||||
Net unrealized appreciation of investments | 6,250,531 | |||||
Accumulated net realized gain on investments | 1,143,215 | |||||
Undistributed net investment income | 25,964 | |||||
Total Net Assets | $ | 114,868,552 | ||||
Net Asset Value, Offering Price and Redemption Proceeds Per Share: | ||||||
Net asset value per share ($114,868,552 ÷ 10,611,537 shares outstanding) | $10.82 | |||||
Offering price per share (100/95.50 of $10.82) | $11.33 | |||||
Redemption proceeds per share | $10.82 | |||||
See Notes which are an integral part of the Financial Statements
Statement of Operations
Period Ended May 31, 20031
Investment Income: | |||||||
Dividends | $ | 46,141 | |||||
Interest | 4,529,334 | ||||||
Total income | 4,575,475 | ||||||
Expenses: | |||||||
Investment adviser fee | $ | 491,888 | |||||
Administrative personnel and services fee | 122,972 | ||||||
Custodian fees | 7,196 | ||||||
Transfer and dividend disbursing agent fees and expenses | 39,124 | ||||||
Directors'/Trustees' fees | 6,170 | ||||||
Auditing fees | 16,498 | ||||||
Legal fees | 4,106 | ||||||
Portfolio accounting fees | 66,871 | ||||||
Share registration costs | 21,403 | ||||||
Printing and postage | 13,417 | ||||||
Insurance premiums | 1,025 | ||||||
Miscellaneous | 4,106 | ||||||
Total expenses | 794,776 | ||||||
Waiver of investment adviser fee | (97,642 | ) | |||||
Net expenses | 697,134 | ||||||
Net investment income | 3,878,341 | ||||||
Realized and Unrealized Gain on Investments: | |||||||
Net realized gain on investments | 1,244,292 | ||||||
Net change in unrealized appreciation of investments | 5,618,729 | ||||||
Net realized and unrealized gain on investments | 6,863,021 | ||||||
Change in net assets resulting from operations | $ | 10,741,362 | |||||
1 For the period from July 1, 2002 (date of initial public investment) to May 31, 2003.
See Notes which are an integral part of the Financial Statements
Statement of Changes in Net Assets
| Period Ended | |||
Increase (Decrease) in Net Assets |
|
|
|
|
Operations: |
|
|
|
|
Net investment income |
| $ | 3,878,341 |
|
Net realized gain on investments |
|
| 1,244,292 |
|
Net change in unrealized appreciation of investments |
|
| 5,618,729 |
|
Change in net assets resulting from operations |
|
| 10,741,362 |
|
Distributions to Shareholders: |
|
|
|
|
Distributions from net investment income |
|
| (3,852,377 | ) |
Distributions from net realized gains on investments |
|
| (101,077 | ) |
Change in net assets resulting from distributions to shareholders |
|
| (3,953,454 | ) |
Share Transactions: |
|
|
|
|
Proceeds from sale of shares |
|
| 74,941,481 |
|
Proceeds from shares issued in connection with the tax-free transfer of assets from National Commerce Bank Common Trust Fund A -- Fixed Income Fund |
|
| 43,258,837 |
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
| 101,354 |
|
Cost of shares redeemed |
|
| (10,221,028 | ) |
Change in net assets resulting from share transactions |
|
| 108,080,644 |
|
Change in net assets |
|
| 114,868,552 |
|
Net Assets: |
|
|
|
|
Beginning of period |
|
| -- |
|
End of period (including undistributed net investment income of $25,964 at May 31, 2003) |
| $ | 114,868,552 |
|
1 For the period from July 1, 2002 (date of initial public investment) to May 31, 2003.
See Notes which are an integral part of the Financial Statements
Financial Highlights
(For a Share Outstanding Throughout Each Period)
Period | |||
Net Asset Value, Beginning of Period |
| $10.00 |
|
Income From Investment Operations: |
|
|
|
Net investment income |
| 0.44 |
|
Net realized and unrealized gain on investments |
| 0.83 |
|
Total from investment operations |
| 1.27 |
|
Less Distributions: |
|
|
|
Distributions from net investment income |
| (0.44 | ) |
Distributions from net realized gain on investments |
| (0.01 | ) |
Total Distributions |
| (0.45 | ) |
Net Asset Value, End of Period |
| $10.82 |
|
Total Return2 |
| 12.97 | % |
|
|
| |
Ratios to Average Net Assets: |
|
|
|
Expenses |
| 0.85 | %3 |
Net investment income |
| 4.73 | %3 |
Expense waiver/reimbursement4 |
| 0.12 | %3 |
Supplemental Data: |
|
|
|
Net assets, end of period (000 omitted) |
| $114,869 |
|
Portfolio turnover |
| 64 | % |
1 Reflects operations for the period from July 1, 2002 (date of initial public investment) to May 31, 2003.
2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 Computed on an annualized basis.
4 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
Notes to Financial Statements
May 31, 2003
ORGANIZATION
CCMI Funds (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end, management investment company. The Trust consists of two portfolios. The financial statements included herein are only those of CCMI Bond Fund (the "Fund"), a diversified portfolio. The investment objective of the Fund is to provide current income consistent with preservation of capital.
On July 1, 2002, the Fund received a tax-free transfer of assets from National Commerce Bank Common Trust Fund A -- Fixed Income Fund as follows:
| Shares of | National Commerce | Unrealized | Net Assets of | Net Assets of | Net Assets of | ||||||
National Commerce Bank Common Trust Fund A -- Fixed Income Fund |
| 4,325,884 |
| $43,258,837 |
| $631,802 |
| $250 |
| $43,258,837 |
| $43,259,087 |
1 Unrealized appreciation is included in the National Commerce Bank Common Trust Fund A -- Fixed Income Fund Net Assets Received as shown above.
SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles ("GAAP").
Investment Valuation
U.S. government securities, listed corporate bonds, other fixed income and asset backed securities, and unlisted securities and private placement securities are generally valued at the mean of the latest bid and asked price provided by an independent pricing service. Listed equity securities are valued at the last sale price reported on a national securities exchange. Short-term securities are valued at the prices as furnished by an independent pricing service. However, short-term securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, which approximates fair market value. Investments in other open-end regulated investment companies are valued at net asset value. Securities for which no quotations are readily available are valued at fair value as determined in good faith using methods approved by the Board of Trustees (the "Trustees").
Repurchase Agreements
It is the policy of the Fund to require the custodian bank to take possession, to have legally segregated in the Federal Reserve Book Entry System, or to have segregated within the custodian bank's vault, all securities held as collateral under repurchase agreement transactions. Additionally, procedures have been established by the Fund to monitor, on a daily basis, the market value of each repurchase agreement's collateral to ensure that the value of collateral at least equals the repurchase price to be paid under the repurchase agreement.
Investment Income, Expenses and Distributions
Interest income and expenses are accrued daily. Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value.
Premium and Discount Amortization/Paydown Gains and Losses
All premiums and discounts are amortized/accreted. Gains and losses realized on principal payment of mortgage-backed securities (paydown gains and losses) are classified as part of investment income.
Federal Taxes
It is the Fund's policy to comply with the Subchapter M provision of the Internal Revenue Code (the "Code") and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
When-Issued and Delayed Delivery Transactions
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Other
Investment transactions are accounted for on a trade date basis.
Shares of Beneficial Interest
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value).
Transactions in shares were as follows:
| Period Ended | ||
Shares sold |
| 7,255,564 |
|
Shares issued in connection with tax-free transfer of assets from National Commerce Bank Common Trust Fund A -- Fixed Income Fund |
| 4,325,884 |
|
Shares issued to shareholders in payment of distributions declared |
| 9,662 |
|
Shares redeemed |
| (979,573 | ) |
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
| 10,611,537 |
|
1 Reflects operation for the period from July 1, 2002 (date of initial public investment) to May 31, 2003.
FEDERAL TAX INFORMATION
The tax character of distributions as reported on the Statement of Changes in Net Assets for the period ended May 31, 20031 , were as follows:
Ordinary Income2 | $3,952,453 |
Long-Term Capital Gains | 1,001 |
1 Reflects operation for the period from July 1, 2002 (date of initial public investment) to May 31, 2003.
2 For tax purposes, short-term capital gain distributions are considered ordinary income.
As of May 31, 2003, the components of distributable earnings on a tax basis were as follows:
Undistributed Ordinary Income | $ 765,542 |
Undistributed Long-term Capital Gain | 403,637 |
Unrealized Appreciation | 6,250,531 |
At May 31, 2003, the cost of investments for federal tax purposes was $111,869,057. The net unrealized appreciation of investments for federal tax purposes was $6,250,531. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $6,252,819 and net unrealized depreciation from investments for those securities having an excess of cost over value of $2,288.
INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Investment Adviser Fee
Commerce Capital Management, Inc., the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.60% of the Fund's average daily net assets. The Adviser may voluntarily waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.
Administrative Fee
Federated Administrative Services ("FAS") provides the Fund with certain administrative personnel and services. The fee paid to FAS is based on a scale that ranges from 0.150% to 0.075% of the average aggregate net assets of the Trust for the period, subject to a minimum fee of $50,000 per portfolio.
Distribution Services Fee
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's Shares. The Plan provides that the Fund may incur distribution expenses up to 0.25% of the average daily net assets of the Fund, annually, to reimburse FSC. For the period ended May 31, 2003, the Fund did not incur a distribution services fee.
Shareholder Services Fee
Under the terms of a Shareholder Services Agreement with FAS, the Fund will pay FAS up to 0.25% of average daily net assets of the Fund for the period. The fee paid to FAS is used to finance certain services for shareholders and to maintain shareholder accounts. For the period ended May 31, 2003, the Fund did not incur a shareholder services fee.
Transfer and Dividend Disbursing Agent Fees and Expenses
Federated Services Company ("FServ"), through its subsidiary Federated Shareholder Services Company ("FSSC"), serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type and number of accounts and transactions made by shareholders.
General
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding long-term U.S. Government securities and short-term obligations (and in-kind contributions), for the period ended May 31, 2003, were as follows:
Purchases | $58,419,284 | |
Sales |
| $24,926,929 |
Purchases and sales of long-term U.S. Government securities, for the period ended May 31, 2003, were as follows:
Purchases | $65,574,838 | |
Sales |
| $33,286,047 |
SUBSEQUENT EVENT
On July 21, 2003, the Trustees approved a change in the administrative services, shareholder services and distribution services providers as well as the transfer and dividend disbursing agent from the parties identified in the preceding notes to Unified Financial Services, Inc. These changes are effective August 4, 2003.
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
The Fund hereby designates $1,001 as long-term capital gain dividends for the period ended May 31, 2003.
For the period ended May 31, 2003 certain dividends paid by CCMI Bond Fund may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Relief Reconciliation Act of 2003. Complete information will be reported in conjunction with your 2003 Form 1099-DIV.
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of
CCMI Bond Fund:
We have audited the accompanying statement of assets and liabilities of CCMI Bond Fund (the "Fund"), including the portfolio of investments, as of May 31, 2003, and the related statement of operations, the statement of changes in net assets and the financial highlights for the period from July 1, 2002 (date of initial public investment) through May 31, 2003. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of May 31, 2003, by correspondence with custodians and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of CCMI Bond Fund as of May 31, 2003, the results of its operations, the changes in its net assets and the financial highlights for the period from July 1, 2002 through May 31, 2003, in conformity with accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Boston, Massachusetts
July 11, 2003, except for note--Subsequent Event,
as to which the date is July 21, 2003
Board of Trustees and Trust Officers
The following table gives information about each Board member and the senior officers of the Fund. The tables separately list Board members who are "interested persons" of the Fund (i.e., "Interested" Board members) and those who are not (i.e., "Independent" Board members). Unless otherwise noted, the address of each person listed is c/o Unified Fund Services, Inc., 431 N. Pennsylvania Street, Indianapolis, IN 46204. The CCMI Complex consists of two investment company portfolios. Unless otherwise noted, each Board member oversees all portfolios in the CCMI Complex and serves for an indefinite term. The Fund's Statement of Additional Information includes additional information about the Trust's Trustees and is available, without charge and upon request, by calling 1-800-386-3111.
INTERESTED TRUSTEES BACKGROUND
|
|
|
Name | Principal Occupation(s), | |
Timothy L. Ashburn1 |
| Principal Occupation: Chairman of Unified Financial Services, Inc. since 1989 and Chief Executive Officer from 1989 to 1992 and 1994 to April 2002; President of Unified Financial Services from November 1997 to April 2000.
Other Directorships Held: Director of Unified Financial Services, Inc., Unified Fund Services, Inc., and Unified Financial Securities, Inc.; Trustee of AmeriPrime Funds, AmeriPrime Advisors Trust and Unified Series Trust. |
|
|
|
Ronald C. Tritschler1 |
| Principal Occupation: Chief Executive Officer, Director and legal counsel of The Webb Companies, a national real estate company, from 2001 to present; Executive Vice President and Director of The Webb Companies from 1990 to 2000.
Other Directorships Held: Director of The Lexington Bank and The Traxx Companies, an owner and operator of convenience stores. Trustee of AmeriPrime Funds, Unified Series Trust and AmeriPrime Advisors Trust. |
|
|
|
1 The Trustees have selected Unified Financial Securities, Inc., as the Funds' principal underwriter, effective August 4, 2003. Mr. Ashburn will be deemed to be an "interested person" of the Trust because he is a director of Unified Financial Securities, Inc., and Mr. Tritschler will be deemed to be an "interested person" of the Trust because he has an ownership interest in Unified Financial Services, Inc., parent of Unified Financial Securities, Inc.
INDEPENDENT TRUSTEES BACKGROUND
|
|
|
---|---|---|
Name |
| Principal Occupation(s), |
Gary E. Hippenstiel |
| Principal Occupation: Director, Vice President and Chief Investment Officer of Legacy Trust Company N.A. since 1992.
Other Directorships Held: Trustee of AmeriPrime Funds, AmeriPrime Advisors Trust, Unified Series Trust and Access Variable Insurance Trust. |
|
|
|
Stephen A. Little |
| Principal Occupation: President and founder, The Rose, Inc., a registered investment advisor, since April 1993.
Other Directorships Held: Trustee of AmeriPrime Funds, Unified Series Trust and AmeriPrime Advisors Trust. |
|
|
|
Daniel J. Condon |
| Principal Occupation: Vice President and General Manager, International Crankshaft Inc., an automotive equipment manufacturing company, 1990 to present.
Other Directorships Held: Trustee of AmeriPrime Funds, Unified Series Trust and AmeriPrime Advisors Trust. |
|
|
|
OFFICERS
|
|
|
Name | Principal Occupation(s) and Previous Positions | |
Peter J. Germain |
| Principal Occupations: Senior Vice President and Director, Mutual Fund Services Division, President of certain investment companies for which Federated Securities Corp. or Edgewood Services, Inc. serve as Principal Distributor, Federated Services Company. Previous Positions: Senior Corporate Counsel, Federated Services Company; President, Edgewood Services, Inc. |
|
|
|
John W. McGonigle |
| Principal Occupations: Executive Vice President and Secretary of the Federated Fund Complex; Executive Vice President, Secretary and Director, Federated Investors, Inc. |
|
|
|
Richard J. Thomas |
| Principal Occupations: Principal Financial Officer and Treasurer of the Federated Fund Complex; Senior Vice President, Federated Administrative Services. |
|
|
|
Beth S. Broderick |
| Principal Occupations: Vice President, Federated Services Company.
|
|
|
|
Judith J. Mackin |
| Principal Occupations: Vice President, Federated Services Company; Treasurer and Assistant Treasurer of certain investment companies for which Federated Securities Corp. and Edgewood Services, Inc. are the principal distributor.
|
|
|
|
Last Meeting of Shareholders
A Special Meeting of shareholders of the CCMI Fund (the "Trust") consisting of two portfolios: CCMI Bond Fund and CCMI Equity Fund, was held on June 27, 2003. The following item was considered by shareholders and the results of their voting are listed below. Unless otherwise noted, each matter was approved.
1. ELECTION OF TRUSTEES
|
| Shares Voted | Shares Withheld | |
Timothy L. Ashburn |
| 17,541,935 |
| 0 |
Ronald C. Tritschler |
| 17,541,935 |
| 0 |
Gary E. Hippenstiel |
| 17,541,935 |
| 0 |
Stephen A. Little |
| 17,541,935 |
| 0 |
Daniel J. Condon |
| 17,541,935 |
| 0 |
Mutual funds are not bank deposits or obligations, are not guaranteed by any bank, and are not insured or guaranteed by the U.S. Government, the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other government agency. Investment in mutual funds involves investment risk, including the possible loss of principal.
This report is authorized for distribution to prospective investors only when preceded or accompanied by the Fund's prospectus, which contains facts concerning each Fund's objective and policies, management fees, expenses and other information.
Federated Securities Corp., Distributor
Investment Company Act File No. 811-6561
Cusip 12501K401
28769 (7/03)
Item 2. Code of Ethics Not Applicable Item 3. Audit Committee Financial Expert Not Applicable Item 4. Principal Accountant Fees and Services Not Applicable Items 5-6 [Reserved] Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies Not Applicable Item 8. [Reserved] Item 9. 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-2 under the Investment Company Act of 1940 (the "Act")) are effective in design and operation and are sufficient to form the basis of the certifications required by Rule 30a-2 under the Act, based on their evaluation of these disclosure controls and procedures within 90 days of the filing date of this report on Form N-CSR. (b) There were no significant changes in the registrant's internal controls, or the internal controls of its service providers, or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Item 10. Exhibits 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 CCMI Funds By /S/ Richard J. Thomas, Principal Financial Officer Date July 24, 2003 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/ Peter J. Germain, Principal Executive Officer Date July 24, 2003 By /S/ Richard J. Thomas, Principal Financial Officer Date July 24, 2003