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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
REGISTRATION NO. 33-87498
811-08910
VINTAGE MUTUAL FUNDS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
1415 28th STREET, SUITE 200
WEST DES MOINES, IOWA 50266
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
AMY M. MITCHELL, TREASURER
VINTAGE MUTUAL FUNDS, INC.
1415 28th STREET, SUITE 200
WEST DES MOINES, IOWA 50266
(NAME AND ADDRESS OF AGENT FOR SERVICE)
COPIES OF ALL COMMUNICATIONS TO:
| VERA LICHTENBERGER, ESQ. | JOHN C. MILES, ESQ., DONALD F. BURT, ESQ. |
| VINTAGE MUTUAL FUNDS, INC. | CLINE, WILLIAMS, WRIGHT, JOHNSON & OLDFATHER |
| 1415 28th STREET, SUITE 200 | 1900 U.S. BANK BUILDING, 233 S. 13TH STREET |
| WEST DES MOINES, IOWA 50266 | LINCOLN, NEBRASKA 68508 |
REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE: (515) 244-5426
DATE OF FISCAL YEAR END: 03/31/2008
DATE OF REPORTING PERIOD: 03/31/2008
ITEM 1. REPORTS TO STOCKHOLDERS.
ANNUAL REPORT FOR THE PERIOD ENDING MARCH 31, 2008.
ANNUAL
REPORT
TO
SHAREHOLDERS
MARCH 31, 2008
Table of Contents
Performance Reports and Schedules of Portfolio Investments
Page 4
Statements of Assets and Liabilities
Page 24
Statements of Operations
Page 28
Statements of Changes in Net Assets
Page 30
Notes to Financial Statements
Page 36
Financial Highlights
Page 44
Report of Independent Registered Public Accounting Firm
Page 46
Directors and Officers
Page 47
Additional Information
Page 48
Message from the President
We are pleased to present this annual report for the Vintage Mutual Funds covering the 12-month period from April 1, 2007 through March 31, 2008.
In the last 12 months the Money Market Funds fell in yield as the Federal Reserve cut short-term rates by 300 basis points in an effort to stimulate growth, provide liquidity, and keep confidence in the credit markets. The recent demise of Bear Stearns, the collapse of several short-term investment vehicles, and pressure on Wall Street earnings has raised our awareness of the importance of quality investments in money market funds. We have worked hard to position the Funds with good diversification to minimize risk. Furthermore, in response to Fed action, we have positioned the Funds to be less responsive to short-term interest rates in order to maximize income for our shareholders.
In addition, during the 12-month period the investment team produced solid returns in the bond funds as well as Federal Monetary policy shifted from restrictive to easy as the economy weakened due to liquidity and credit concerns. Sound portfolio positioning and good security selection allowed the Funds to end the year in favorable ranks with their peers. All three bond funds performed well relative to their Morningstar categories placing them all in the top quartile of their categories for the trailing 12 months. The decline in interest rates and the flight to quality, as the result of credit concerns and liquidity, proved to be beneficial for the three bond funds. Slow growth and rising inflation will create a difficult environment for the Fed and the bond market as we move forward. However, we continue to use our creative talents to build portfolios that offer strong, risk-adjusted performance regardless of the environment.
In closing I would like to thank you for your confidence and loyalty in the Vintage Mutual Funds. Our daily motivation is driven by the desire to deliver strong and consistent performance on your behalf.
Jeffrey D. Lorenzen, CFA
President, Vintage Mutual Funds, Inc.
The Vintage Mutual Funds are distributed by Foreside Distribution Services, L.P.
Shares of the Vintage Mutual Funds are NOT INSURED BY THE FDIC. Investment products involve investment risk, including the possible loss of principal. Past performance is not predictive of future results, and the composition of each Fund’s portfolio is subject to change.
Information is not authorized for distribution unless accompanied by a current prospectus. An investor should consider the Funds’ investment objectives, risks, charges, and expenses carefully before investing or sending money. This and other important information can be found in the Funds’ prospectus. To obtain more information, please call 1-800-798-1819 or visit the website www.VintageFunds.com. Please read the prospectus carefully before investing.
Message from the Investment Adviser
Dear Shareholders:
The effects of the financial strains on credit costs and availability have become increasingly evident during the first quarter. Federal Reserve (“Fed”) actions have been unable to relieve credit market concerns, the dollar is slumping, the equity market recently hit new cycle lows, and a major Wall Street brokerage firm has failed.
The Fed’s effort to support the ailing financial sector began last summer with attempts to drive down stubbornly high overnight interbank rates and ease the strain in the asset-backed commercial paper market. Since then the Fed has initiated providing funds to primary dealers, offering more liquidity to banks, and driving the Fed Fund target rate down 300 basis points. This once again proves that the Fed is capable of moving very fast when confronted with a crisis.
With this in mind, we believe the economy will slow and not result in a significant recession. Companies, so far, have avoided large layoffs, resulting in employment and real incomes holding above year-ago levels. We affirm our belief that until the employment market experiences job losses of 100,000 or more, the economy should remain at or near positive growth buoyed by consumer spending.
In our opinion, the labor market holds the key to the ultimate severity of the economic slowdown. In recent months we have seen initial unemployment claims rise but not consistently to the levels traditionally seen in recessionary times. Contradictorily, the Bureau of Labor employment data delivered in early March pointed to a lower unemployment rate due to a shrinking labor pool. It is hard to believe that the unemployment rate will not rise in coming months as the financial sector re-values its balance sheet and tightens its purse strings. However, consumer spending is likely to be influenced greater by the endless pessimism from the national press than the actual strain from weaker employment in coming months.
The state of the housing market is also an important indicator of the overall economy. While there has been some stabilization, many subprime home owners are still suffering to maintain mortgage payments in light of higher adjustable interest rates. The Fed has tried to address this problem by aggressively cutting short-term rates; however, their efforts have been muted somewhat as long-term fixed mortgage rates are little changed. The vast supply of homes in the market with the addition of recently foreclosed properties will take some time to move through the system.
Through the slowdown, the corporate sector has remained healthy. Balance sheets are clean and earnings (excluding financials) are strong. Confidence has declined, but expectations for earnings for 2008 and 2009 remain attractive. Not surprisingly, businesses are very cautious in the current environment and there is little prospect that investment spending will increase to offset weaker areas of the economy.
We are optimistic for credit and equity markets over the long term as these asset classes are priced for a pessimistic outlook. The monetary and fiscal policy stimulus that has been injected into the economy is enormous and its impact will likely play well for both markets. Corporate interest costs for quality borrowers are three percent above the 10-year treasury, one of the largest spreads since the Great Depression. Equities trading at 13.7 times forward earnings with low inflation, double digit earnings growth, and accelerating money growth provide an attractive backdrop.
It is extremely difficult to assess how and over what period the current credit crisis will play out and the ultimate impact it will have on economic growth. Crisis environments create opportunities, and the panic flight to quality has led to pockets of good value in both credit and equity markets. The demise of Bear Stearns is the kind of event that often signals a market bottom. While we would like to believe a bottom has been reached, there is enough caution by investors that we cannot be assured that the selling power in the market is exhausted. While we are focused on adding value to portfolios this is not a time for heroics, but rather a time to keep a tight focus on preservation of capital. Entry points are nearing and further confirmation is needed before we allocate portfolio capital to high risk opportunities.
In light of current market dislocations, we are actively seeking opportunities that add return without a lot of measurable risk. Excess returns will likely come through income, sector management, and security
selection for the next several quarters. Abnormally low valuations, due to a loss of confidence in the market, are providing selective opportunities to re-allocate capital in higher return areas. We are neutral to short duration as we believe the Fed is nearing the end of its monetary stimulus. We believe opportunities still exist to strategically produce strong risk-adjusted returns for investors.
In closing, we appreciate the opportunity to be your selected investment adviser and will continue to manage your money as if it were our own and strive for consistent above-average market, long-term returns.
Jeffrey D. Lorenzen, CFA
President and Chief Investment Officer
WB Capital Management Inc.
Performance Report
Money Market Funds
Money market rates fell dramatically in the first quarter as the Fed attempted to flood the market with liquidity to combat the liquidity crisis that developed over the last half of 2007. Overnight rates dropped 200bps during the quarter and the yield curve remained flat. The spread between LIBOR and Treasury bills improved early in the quarter but gapped out when Bear Stearns collapsed and was immediately acquired by JP Morgan. The market expects at least one more rate cut by the Fed, and short rates will not rise substantially until liquidity returns to the market and inflation concerns become more prevalent.
Institutional Money Market Fund and Institutional Reserves Fund
The Fund’s average days fell as overnight rates fell and the yield curve flattened, offering fewer opportunities to add longer paper at attractive rates. The Fund will maintain an average days position similar to the index to preserve yield. Agency paper is being added in the three to six month part of the curve where rates appear most attractive given our outlook for the Fed.
Liquid Assets Fund
The Fund’s average days rose as corporate spreads widened offering more opportunities to add longer paper at attractive rates. The Fund will maintain an average days position similar to the index to preserve yield. Corporate paper is being added in the three to six month part of the curve where rates appear most attractive given our outlook for the Fed.
An investment in the Money Market Funds is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. Although the Funds seek to preserve the value of your investment of $1.00 per share, it is possible to lose money by investing in the Funds.
| Institutional Money Market Fund | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | Schedule of Portfolio Investments | | | | |
| | | | | March 31, 2008 | | | | |
| | | | | | | | | | | | | |
| Par/ | | | | | | | Par/ | | | | | |
Share Value | Description | | | | Value | | Share Value | Description | | | | Value | |
U.S. Government Agencies (40.99%) | | | | Repurchase Agreements (58.58%) | | | |
Federal Home Loan Bank (16.85%) | | | | Barclays Capital | | | | | |
$385,000 | 5.125% | | 04/16/08 | ................................................ | $ 385,450 | | $20,853,144 | 2.300% | | 04/01/08 | ................................................ | $ 20,853,144 | |
1,000,000 | 4.000% | | 05/15/08 | ................................................ | 999,125 | | | (Purchased on 03/31/08; proceeds at | |
500,000 | 4.250% | | 05/16/08 | ................................................ | 499,328 | | | maturity $20,854,476; collateralized by | |
1,165,000 | 5.125% | | 06/18/08 | ................................................ | 1,166,699 | | | $20,586,000 U.S. Government Agency, | |
2,000,000 | 4.250% | | 06/18/08 | ................................................ | 1,999,913 | | | 01/15/09, collateral worth $21,270,965) | |
750,000 | 4.040% | | 07/14/08 | ................................................ | 750,276 | | | | | | | | |
500,000 | 3.865% | | 07/28/08 | ................................................ | 498,476 | | Lehman Brothers, Inc. | | | | | |
1,500,000 | 5.000% | | 08/01/08 | ................................................ | 1,501,021 | | 15,000,000 | 1.810% | | 04/01/08 | ................................................ | 15,000,000 | |
1,000,000 | 5.000% | | 11/21/08 | ................................................ | 1,005,631 | | | (Purchased on 03/31/08; proceeds at | |
1,500,000 | 4.125% | | 01/07/09 | ................................................ | 1,505,582 | | | maturity $15,000,754; collateralized by | |
| | | | | 10,311,501 | | | $14,215,000 U.S. Government Agency, | |
Federal Home Loan Mortgage Corporation (13.85%) | | | | 12/15/16, collateral worth $15,299,095) | |
2,324,000 | 5.750% | | 04/15/08 | ................................................ | 2,326,734 | | | Total Repurchase Agreements | 35,853,144 | |
500,000 | 3.500% | | 04/28/08 | ................................................ | 499,344 | | | | | | | | |
1,000,000 | 5.248% | * | 04/28/08 | ................................................ | 996,234 | | | Total Investments (99.57%) | | |
935,000 | 3.875% | | 06/15/08 | ................................................ | 933,185 | | | (Cost $60,942,725) | | $ 60,942,725 |
500,000 | 3.150% | | 07/29/08 | ................................................ | 497,501 | | | Other Assets and Liabilities (0.43%) | 265,949 |
1,000,000 | 5.125% | | 08/14/08 | ................................................ | 1,001,922 | | | | | | | |
2,000,000 | 4.625% | | 09/15/08 | ................................................ | 2,021,896 | | | Net Assets (100.00%) | | $ 61,208,674 |
200,000 | 3.625% | | 09/15/08 | ................................................ | 200,851 | | | | | | | |
| | | | | 8,477,667 | | | | | | | |
Federal National Mortgage Association (10.29%) | | | | | | | | |
1,000,000 | 4.323% | * | 04/04/08 | ................................................ | 999,650 | | | | | | | |
2,000,000 | 2.875% | | 05/19/08 | ................................................ | 2,000,441 | | | | | | | |
300,000 | 3.700% | | 05/23/08 | ................................................ | 299,523 | | | | | | | |
1,500,000 | 4.300% | | 06/30/08 | ................................................ | 1,507,626 | | | | | | | |
1,000,000 | 3.100% | | 07/28/08 | ................................................ | 996,328 | | | | | | | |
500,000 | 3.200% | | 11/28/08 | ................................................ | 496,845 | | | | | | | |
| | | | | 6,300,413 | | | | | | | |
| Total U.S. Government Agencies | 25,089,581 | | | | | | | |
| | | | | | | | | | | | |
* Effective yield at date of purchase | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | See notes to financial statements | | | | | | | |
| | | | | | | | | | | | |
Institutional Reserves Fund | | | | | | | | |
| | | | | | | | | | | | |
| | | | | Schedule of Portfolio Investments | | | | |
| | | | | March 31, 2008 | | | | |
| | | | | | | | | | | | |
Par/ | | | | | | | Par/ | | | | | |
Share Value | Description | | | | Value | | Share Value | Description | | | | Value |
U.S. Government Agencies (33.33%) | | | | Repurchase Agreements (66.67%) | | |
Federal Farm Credit Bank (0.49%) | | | | Barclays Capital | | | | |
$277,000 | 4.278% | * | 04/15/08 | ................................................ | $ 276,553 | | $14,677,082 | 2.300% | | 04/01/08 | ................................................ | $ 14,677,082 |
| | | | | | | | (Purchased on 03/31/08; proceeds at |
Federal Home Loan Bank (12.45%) | | | | | maturity $14,678,020; collateralized by |
2,225,000 | 3.050% | | 06/12/08 | ................................................ | 2,218,150 | | | $14,176,000 U.S. Government Agency, |
300,000 | 5.250% | | 08/14/08 | ................................................ | 302,779 | | | 11/27/17, collateral worth $14,970,785) |
2,000,000 | 5.000% | | 09/12/08 | ................................................ | 2,003,374 | | | | | | | |
1,500,000 | 5.000% | | 11/21/08 | ................................................ | 1,508,447 | | Lehman Brothers, Inc. | | | | |
1,000,000 | 4.125% | | 01/07/09 | ................................................ | 1,003,721 | | 10,000,000 | 1.810% | | 04/01/08 | ................................................ | 10,000,000 |
| | | | | 7,036,471 | | | (Purchased on 03/31/08; proceeds at |
Federal Home Loan Mortgage Corporation (12.24%) | | | | maturity $10,000,503; collateralized by |
520,000 | 3.625% | | 04/17/08 | ................................................ | 519,849 | | | $9,475,000 U.S. Government Agency, |
500,000 | 3.500% | | 04/28/08 | ................................................ | 499,706 | | | 12/15/16, collateral worth $10,197,603) |
1,000,000 | 5.278% | * | 04/28/08 | ................................................ | 996,234 | | | | | | | |
400,000 | 4.500% | | 08/04/08 | ................................................ | 402,406 | | Morgan Stanley | | | | | |
2,000,000 | 4.625% | | 08/22/08 | ................................................ | 2,003,301 | | 13,000,000 | 2.200% | | 04/01/08 | ................................................ | 13,000,000 |
1,000,000 | 4.625% | | 09/15/08 | ................................................ | 1,010,948 | | | (Purchased on 03/31/08; proceeds at |
1,485,000 | 3.050% | | 10/15/08 | ................................................ | 1,486,656 | | | maturity $13,000,794; collateralized by |
| | | | | 6,919,100 | | | $13,285,000 U.S. Government Agency, |
Federal National Mortgage Association (8.15%) | | | | 05/01/08, collateral worth $13,263,744) |
1,000,000 | 3.250% | | 05/14/08 | ................................................ | 998,142 | | | Total Repurchase Agreements | 37,677,082 |
3,000,000 | 2.875% | | 05/19/08 | ................................................ | 3,000,579 | | | | | | | |
606,000 | 3.875% | | 07/15/08 | ................................................ | 604,542 | | | Total Investments (100.00%) | |
| | | | | 4,603,263 | | | (Cost $56,512,469) | | $ 56,512,469 |
| Total U.S. Government Agencies | 18,835,387 | | | Other Assets and Liabilities (0.00%) | 1,267 |
| | | | | | | | | | | | |
| | | | | | | | Net Assets (100.00%) | | $ 56,513,736 |
| | | | | | | | | | | | |
* Effective yield at date of purchase | | | | | | | | | |
| | | | | | | | | | | | |
See notes to financial statements | | | | | | | | | |
| | | | | | | | | | | | |
Liquid Assets Fund | | | | | | | | |
| | | | | | | | | |
| Schedule of Portfolio Investments | | | | | |
| | | March 31, 2008 | | | | | |
| | | | | | | | | |
Par/ | | | | | | | | | |
Share Value | Description | | | | Value | | | | |
U.S. Government Agencies (5.93%) | | | | | | | |
Federal Home Loan Mortgage Corporation (1.88%) | | | | | |
$2,000,000 | 4.875% | | 09/12/08 | ................................................ | $ 2,023,663 | | | | |
| | | | | | | | | |
Federal National Mortgage Association (4.05%) | | | | | |
850,000 | 3.500% | | 07/24/08 | ................................................ | 853,277 | | | | |
3,500,000 | 3.000% | | 07/16/08 | ................................................ | 3,507,993 | | | | |
| | | | | 4,361,270 | | | | |
| Total U.S. Government Agencies | 6,384,933 | | | | |
| | | | | | | | | |
Loan Certificates - FmHA Guaranteed Loan | | | | | | |
Certificates (8.46%) | | | | | | | | |
9,116,350 | 3.00% - 5.00% | *** | | | | | | | |
| 03/04/09 to 06/01/47............................................. | 9,116,350 | | | | |
| | | | | | | | | |
Commercial Paper (0.92%) | | | | | | | | |
Bank of America Corporation | | | | | | | | |
1,000,000 | 2.911% | * | 04/23/08 | ................................................ | 998,228 | | | | |
| | | | | | | | | |
Corporate Bonds (29.09%) | | | | | | | | |
Aerospace - Defense (2.69%) | | | | | | | | |
General Dynamics Corporation | | | | | | | | |
2,900,000 | 3.000% | | 05/15/08 | ................................................ | 2,895,949 | | | | |
| | | | | | | | | |
Banking and Financial (8.44%) | | | | | | | | |
Bank of America Corporation | | | | | | | | |
1,000,000 | 5.875% | | 02/15/09 | ................................................ | 1,023,658 | | | | |
J.P. Morgan | | | | | | | | | |
1,000,000 | 6.000% | | 08/01/08 | ................................................ | 1,003,111 | | | | |
1,000,000 | 2.625% | | 06/30/08 | ................................................ | 994,021 | | | | |
Suntrust Banks | | | | | | | | | |
500,000 | 4.000% | | 10/15/08 | ................................................ | 500,600 | | | | |
US Bank NA | | | | | | | | | |
1,000,000 | 3.900% | | 08/15/08 | ................................................ | 995,190 | | | | |
1,000,000 | 4.400% | | 08/15/08 | ................................................ | 997,564 | | | | |
Wachovia Corporation | | | | | | | | |
385,000 | 6.300% | | 04/15/08 | ................................................ | 385,143 | | | | |
2,200,000 | 3.500% | | 08/15/08 | ................................................ | 2,189,320 | | | | |
Wells Fargo Company | | | | | | | | |
1,000,000 | 3.500% | | 04/04/08 | ................................................ | 999,855 | | | | |
| | | | | 9,088,462 | | | | |
Beverages (0.94%) | | | | | | | | |
Anheuser-Busch Company | | | | | | | | |
1,000,000 | 5.125% | | 10/01/08 | ................................................ | 1,009,591 | | | | |
| | | | | | | | | |
Financial Services (15.21%) | | | | | | | | |
Bear Stearns Company | | | | | | | | |
1,000,000 | 3.186% | ** | 03/05/09 | ................................................ | 1,000,000 | | | | |
Boeing Capital Corporation | | | | | | | | |
1,000,000 | 4.750% | | 08/25/08 | ................................................ | 999,128 | | | | |
Caterpillar Financial Services | | | | | | | | |
1,000,000 | 2.700% | | 07/15/08 | ................................................ | 999,129 | | | | |
Citigroup, Inc. | | | | | | | | | |
2,000,000 | 6.250% | | 11/01/08 | ................................................ | 2,017,999 | | | | |
1,000,000 | 3.625% | | 02/09/09 | ................................................ | 1,001,809 | | | | |
Credit Suisse FB USA | | | | | | | | |
1,000,000 | 6.500% | | 06/01/08 | ................................................ | 1,001,673 | | | | |
Goldman Sachs Group | | | | | | | | |
1,900,000 | 3.875% | | 01/15/09 | ................................................ | 1,904,723 | | | | |
HSBC Finance Corporation | | | | | | | | |
2,000,000 | 6.400% | | 06/17/08 | ................................................ | 2,004,828 | | | | |
500,000 | 5.875% | | 02/01/09 | ................................................ | 510,629 | | | | |
JP Morgan Chase and Company | | | | | | | |
1,200,000 | 3.625% | | 05/01/08 | ................................................ | 1,198,788 | | | | |
Lehman Brothers Holdings | | | | | | | | |
237,000 | 6.500% | | 04/15/08 | ................................................ | 237,090 | | | | |
Morgan Stanley | | | | | | | | | |
2,000,000 | 3.875% | | 01/15/09 | ................................................ | 2,001,537 | | | | |
National Rural Utilities | | | | | | | | |
1,500,000 | 5.750% | | 12/01/08 | ................................................ | 1,512,549 | | | | |
| | | | | 16,389,882 | | | | |
Industrial Goods and Equipment (0.88%) | | | | | | |
Praxair, Inc. | | | | | | | | | |
950,000 | 2.750% | | 06/15/08 | ................................................ | 945,224 | | | | |
| | | | | | | | | |
Retail General Merchandise (0.93%) | | | | | | | |
Target Corporation | | | | | | | | |
1,000,000 | 5.875% | | 11/01/08 | ................................................ | 1,006,003 | | | | |
| Total Corporate Bonds | | 31,335,111 | | | | |
| | | | | | | | | |
| Total Unaffiliated Issuers | | 47,834,622 | | | | |
| | | | | | | | | |
Repurchase Agreements (55.31%) | | | | | | | |
Barclays Capital | | | | | | | | |
31,000,000 | 2.300% | | 04/01/08 | ................................................ | $ 31,000,000 | | | | |
| (Purchased on 03/31/08; proceeds at | | | | | |
| maturity $31,001,981; collateralized by | | | | | |
| $31,475,000 U.S. Government Agency, | | | | | |
| 02/27/13, collateral worth $31,624,428) | | | | | |
| | | | | | | | | |
Morgan Stanley | | | | | | | | | |
28,577,842 | 2.200% | | 04/01/08 | ................................................ | 28,577,842 | | | | |
| (Purchased on 03/31/08; proceeds at | | | | | |
| maturity $28,579,588; collateralized | | | | | |
| by $29,195,000 U.S. Government | | | | | |
| Agencies, 04/14/08 - 05/01/08, | | | | | |
| collateral worth $29,152,343) | | | | | | |
| Total Repurchase Agreements | | 59,577,842 | | | | |
| | | | | | | | | |
| Total Investments (99.71%) | | | | | | |
| (Cost $107,412,464) | | | $ 107,412,464 | | | | |
| Other Assets and Liabilities (0.29%) | 309,374 | | | | |
| | | | | | | | | |
| Net Assets (100.00%) | | $ 107,721,838 | | | | |
| | | | | | | | | |
| | | | | | | | | |
* Effective yield at date of purchase | | | | | | | |
** Interest rate fluctuates monthly with Libor | | | | | | |
*** Interest rate fluctuates with prime rate, put option subject to no more than five business days written notice |
| | | | | | | | | |
| | | | See notes to financial statements | | | |
| | | | | | | | | |
Performance Report
Fixed Income Funds
Throughout the past year, the economy and financial markets have really been a tale of two markets. On March 31, 2007, the Fed funds rate was slightly restrictive at 5.25 percent. Economic growth during the second and third quarters of 2007 averaged well above potential expanding at a 4.4 percent rate. The job market expanded by an average of 85,000 new jobs every month during last nine months of 2007 and CPI inflation was only slightly elevated at 2.8 percent in March 2007. At the conclusion of the first quarter of 2008, the landscape is significantly different. The Fed funds rate is now 2.25 percent, economic growth in the last quarter of 2007 was an anemic 0.6 percent, the job market lost jobs in each month of the quarter, and overall CPI inflation accelerated to 4.0 percent due to rises in commodity and food prices.
Fixed income allocations continue to possess an important role for investors to lower the volatility of their overall portfolio. Fixed income investments generally provide two great benefits to investors: a consistent income stream and positive performance during uncertain or difficult times which helps offset equity market losses. During the past year, financial markets posted divergent returns as fixed income markets earned their keep as they bettered equity returns during this time of economic uncertainty. Fixed income returns were solid as the Lehman Brothers Aggregate index rose 7.67 percent. Interest rates plunged during the year as the market coped with a worsening economic outlook and a lower Fed funds rate. The ten-year U.S. Treasury rate fell 1.23 percent to finish the period at 3.41 percent. Equity markets slumped as the Standard & Poor’s 500 Index fell 5.08 percent.
Current headlines point to earnings shortfalls among financial and banking companies, yet the biggest challenge to the economy is the lack of liquidity. Liquidity is the confidence to lend funds with a high expectation of a return on investment. Prices of a wide array of securities have declined recently, resulting in margin calls for highly leveraged investors. These margin calls have created many more sellers than buyers of securities ranging from agency mortgage-backed securities (MBS), whole loan MBS, commercial MBS, to subprime MBS. The result has been a downward spiral of lower prices, which force selling, which lowers prices.
The government, acting through several regulatory bodies including the Federal Reserve, has taken a number of steps to directly address the credit market seizure. The Fed has lowered the Fed funds rate down to 2.25 percent in several large moves, including two 0.75 percent drops, from 5.25 percent last fall. Additionally, the discount rate which is the rate at which banks lend to each other has fallen from 6.25 percent last fall to 2.50 percent currently. To directly combat illiquidity, the Fed created three programs aimed directly at the flow of funds in the financial markets. The first is the Term Auction Facility (TAF), which lends short-term funds to banks in exchange for high quality collateral. The second is the Term Securities Lending Facility (TSLF), which exchanges a security in high demand (U.S. Treasuries) for securities with low demand such as residential MBS. The result of the TSLF, specifically, is to free capital ‘locked-up’ in MBS holdings which is now available for other uses or lending. The third is the Primary Dealer Credit Facility (PDCF) which now includes brokers in addition to banks and provides overnight loans on a broader-than-normal range of acceptable collateral including investment grade corporate debt, municipals, residential and commercial MBS, and asset-backed securities (ABS).
The regulatory bodies which oversee Fannie Mae, Freddie Mac, and the Federal Home Loan Bank will allow these agencies to purchase more MBS product, potentially resulting in an additional $300 billion of investment demand. Lastly, in an effort to avoid wide-spread market disruption, the Fed agreed to provide $29 billion of forgivable financing on illiquid securities to JP Morgan to facilitate its takeover of Bear Stearns. As a result of these actions, the market is sowing the seeds of recovery.
Interest rates fell across all maturities over the past year. Short-term interest rates fell due to the Fed rate cuts, leaving the yield curve with a significant upward slope. On March 31, 2008, the two-year Treasury yield was 1.58 percent compared to 3.41 percent for ten-year Treasury notes. Investors were compensated a healthy 1.83 percent for purchasing ten-year Treasury notes. Slow economic growth is holding short-term yields down, while a lurking risk of high energy and food costs filtering into core prices is supporting intermediate rates.
Our fixed income strategy is guided by our central forecast of both the economy and the markets. Short-term and intermediate-term interest rates are priced for a significant recession. Our forecast is for a sluggish economy in the first half of the year, but not a deep recession. With core inflation at the upper boundary of the Fed’s desired range, interest rates are not expected to move much lower during 2008 and possibly rise. Overweight allocations are driven by the opportunity to capture additional income while balancing portfolio risk. We believe the high-risk premiums available today are greater than the amount warranted by the decline in fundamentals supporting the corporate, agency MBS, and municipal sectors. These factors support an overweight to the market’s risk sectors that generate an income advantage over the index. Interest rate risk management will be nimble around the market’s inflection point.
In summary, we expect the economy to avoid a significant recession with inflation continuing to remain higher than the Fed’s goal. The portfolios continue to maintain a focus on capital preservation, yet are positioned to profit from a market in recovery.
Performance Report
Limited Term Bond Fund
Fixed income total returns were robust during the past twelve months as interest rates fell and bond prices rose, supplementing the Fund’s income benefits. The two-year Treasury reached its peak for the past year in June 2007 with a yield of 5.10 percent. Interest rates fell through the summer, fall, and winter due to corporate writedowns of subprime holdings, a general flight to the quality of U.S. Treasury securities and a lack of liquidity for off-the-run bonds. The two-year Treasury reached a low of 1.35 percent on March 17, 2008, coinciding with the announcement of a JP Morgan takeover of brokerage firm Bear Stearns. All told, interest rates moved 3.75 percent during the year from peak to trough, which is an above normal amount of interest rate volatility.
For the year, the Limited Term Bond Fund trailed its benchmark both before and after expenses. Compared to the Fund’s Morningstar peer group, however, performance was outstanding. Warren Buffet once said, "You only find out who is swimming naked when the tide goes out." A number of mutual funds managed by well-known, brand name managers suffered due to their use of creative investments and interesting strategies. Our investment strategy of using high quality investments within a diversified and risk-managed approach proved beneficial. Morningstar peer group rankings as of March 31, 2008 rate the Fund in the 7th percentile for one year, 7th percentile for three years, and 12th percentile for five years. Morningstar recognized the Fund and raised the three year ranking to the highest level, five out of five stars. The five year ranking also improved to four out of five stars.
The portfolio’s performance was supported by a yield advantage relative to the benchmark and no exposure to the commercial mortgage-backed securities (CMBS) market. These positives were offset somewhat by an overweight to the market’s risk sectors. Treasury yields fell during the period, yet yields on most risk sectors were only modestly lower. CMBS trailed Treasuries by a staggering 11.56 percent as this sector lost sponsorship. Asset-backed securities (down 11.87 percent) and corporate bonds (down 9.75 percent) also trailed Treasuries by a significant margin. The mortgage-backed securities (MBS) and agency sectors, down 2.39 percent and 1.18 percent respectively, also slumped but were much less severe. Security selection was important as limited exposure to specific financial institutions proved beneficial. Overweight allocations are driven by the opportunity to capture additional income while balancing portfolio risk. The portfolio continues to maintain an income advantage with managed risk taking.
Our fixed income strategy is guided by our central forecast of both the economy and the markets. Short-term and intermediate-term interest rates are priced for a significant recession. Our forecast is for a sluggish economy in first half of the year but not a deep recession. With core inflation at the upper boundary of the Fed’s desired range, interest rates are not expected to move much lower during 2008 and possibly rise. We believe the high-risk premiums available today are greater than the amount warranted by the decline in fundamentals supporting the corporate, agency MBS, and municipal sectors. These factors support an overweight to the market’s risk sectors that generate an income advantage over the index. Interest rate risk management will be nimble around the market’s inflection point. Corporate bonds, residential mortgage-backed securities, asset-backed securities, and Agencies are all overweighted. The U.S. Treasury sector is underweighted.
Performance Report (unaudited) | Average Annual Returns as of 3/31/08 |
| 1 Year | 5 Year | 10 Year |
Vintage Limited Term Bond | 7.15% | 3.68% | 4.07% |
Lehman Brothers 1-3 Yr Govt/Credit Index | 8.19% | 5.30% | 5.12% |
Performance data quoted represents past performance; past performance is not predicative of future results. The value of shares in the Limited Term Bond Fund will fluctuate so that the shares, when redeemed, may be worth more or less than their original cost. The composition of the Fund’s holdings is subject to change. Performance data current to the most recent month end may be obtained by accessing the website at www.VintageFunds.com.
Bond funds will tend to experience smaller fluctuations in value than stock funds. However, investors in any bond fund should anticipate fluctuations in price, especially for longer-term issues and in an environment of rising interest rates.
The performance of the Limited Term Bond Fund is measured against the Lehman Brothers 1-3 Year Government/Credit Index which represents the performance of government and corporate bonds with maturities of 1-3 years. The index is unmanaged and does not reflect the deduction of fees associated with a mutual fund, such as investment management fees. The Fund’s performance reflects the deduction of fees for these value-added services. The performance table and graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares.
Limited Term Bond Fund | | | | |
| | | | | |
| | | Schedule of Portfolio Investments |
| | | March 31, 2008 | |
| | | | | |
Par/ | | | | | |
Share Value | Description | | | | Value |
U.S. Government Agencies (36.16%) | | |
Federal Home Loan Mortgage Corporation (9.50%) | |
$2,500,000 | 5.125% | | 04/18/11 | ................................................ | $ 2,669,975 |
| | | | | |
Federal National Mortgage Association (26.66%) | |
2,000,000 | 6.625% | | 09/15/09 | ................................................ | 2,124,258 |
2,500,000 | 7.125% | | 06/15/10 | ................................................ | 2,754,413 |
2,500,000 | 4.375% | | 09/13/10 | ................................................ | 2,614,092 |
| | | | | 7,492,763 |
| Total U.S. Government Agencies | 10,162,738 |
| | | | | |
Mortgage Related Securities (34.47%) | | |
Collateralized Mortgage Obligations (8.92%) | | |
646,796 | Federal Home Loan Mortgage | |
| Corporation 2971 Class PE | | |
| 4.500% | | 03/15/26 | ................................................ | 649,393 |
744,211 | Federal Home Loan Mortgage | |
| Corporation 3089 Class LP | | |
| 5.500% | | 12/15/29 | ................................................ | 763,379 |
446,453 | Federal Home Loan Mortgage | |
| Corporation 3211 Class PA | |
| 5.500% | | 11/15/29 | ................................................ | 457,704 |
470,478 | Federal National Mortgage | | |
| Association 2007-77 Class M | |
| 5.500% | | 11/25/29 | ................................................ | 485,492 |
122,142 | Structured Asset 2001-1 B2 | |
| 7.121% | | 02/25/31 | ................................................ | 129,263 |
22,921 | Structured Asset Securities | |
| 6.838% | | 04/25/32 | ................................................ | 23,055 |
| | | | | 2,508,286 |
Federal Home Loan Mortgage Corporation | | |
Mortgage-Backed Pools (11.52%) | | |
74 | Pool #E61274 | | | |
| 7.000% | | 08/01/09 | ................................................ | 74 |
532,082 | Pool #M90830 | | | |
| 3.500% | | 08/01/08 | ................................................ | 531,240 |
696,622 | Pool #M90842 | | | |
| 4.000% | | 09/01/08 | ................................................ | 696,798 |
306,160 | Pool #M90877 | | | |
| 4.000% | | 12/01/08 | ................................................ | 306,454 |
564,537 | Pool #M90980 | | | |
| 5.000% | | 05/01/10 | ................................................ | 575,729 |
676,664 | Pool #M90988 | | | |
| 5.000% | | 07/01/10 | ................................................ | 690,079 |
435,888 | Pool #M90876 | | | |
| 4.000% | | 11/01/08 | ................................................ | 436,131 |
| | | | | 3,236,505 |
Federal National Mortgage Association | | |
Mortgage-Backed Pools (2.63%) | | | |
730,580 | Pool #254711 | | | |
| 4.000% | | 03/01/10 | ................................................ | 739,643 |
| | | | | |
Asset Backed Securities (11.40%) | | |
334,252 | Amresco 1997-2 M1F | | |
| 7.430% | | 06/25/27 | ................................................ | 306,028 |
1,110,000 | Chase Mortgage 2003-4 1A5 | |
| 5.416% | | 05/25/33 | ................................................ | 1,044,612 |
171,322 | Chase Mortgage 2003-6 1A3 | |
| 3.340% | | 05/25/26 | ................................................ | 170,788 |
893,000 | Countrywide ABS | | |
| 5.971% | | 09/25/46 | ................................................ | 826,887 |
133,157 | Countrywide ABS | | |
| 4.575% | | 07/25/35 | ................................................ | 132,528 |
74,102 | First Alliance Step | | |
| 6.520% | | 09/20/29 | ................................................ | 73,978 |
216,047 | Green Tree Financial 1996-3 A5 | |
| 7.350% | | 05/15/27 | ................................................ | 221,232 |
169,593 | Green Tree Financial 1996-8 A6 | |
| 7.600% | | 10/15/27 | ................................................ | 179,570 |
20,088 | IMC Home Equity | | |
| 7.080% | | 08/20/28 | ................................................ | 20,043 |
130,720 | Indymac 1998-2 A2 | | |
| 6.170% | | 12/25/11 | ................................................ | 131,800 |
96,707 | RAMP 2005-RS1 | | |
| 4.109% | | 01/25/35 | ................................................ | 96,544 |
| | | | | 3,204,010 |
| Total Mortgage Related Securities | 9,688,444 |
| | | | | |
Municipal Bonds (0.11%) | | | | |
Revenue Bond - Education | | | | |
30,000 | Azusa Pacific University, CA | |
| 7.250% | | 04/01/09 | ................................................ | 30,360 |
| | | | | |
Corporate Bonds (28.16%) | | | | |
Banking and Financial (3.06%) | | | |
250,000 | Bank of America Corporation | |
| 5.375% | | 08/15/11 | ................................................ | 260,765 |
300,000 | Wachovia Corporation | | |
| 3.500% | | 08/15/08 | ................................................ | 299,634 |
300,000 | Wells Fargo Company | | |
| 4.000% | | 08/15/08 | ................................................ | 300,020 |
| | | | | 860,419 |
Electric Utility (0.34%) | | | | |
96,000 | Arkansas Electric | | |
| 7.330% | | 06/30/08 | ................................................ | 96,574 |
| | | | | |
Financial Services (12.21%) | | | | |
300,000 | American General Finance | | |
| 2.750% | | 06/15/08 | ................................................ | 298,866 |
250,000 | Bear Stearns Company | | |
| 4.550% | | 06/23/10 | ................................................ | 236,400 |
250,000 | CIT Group, Inc. | | | |
| 4.750% | | 12/15/10 | ................................................ | 199,029 |
250,000 | Citigroup, Inc. | | | |
| 5.125% | | 02/14/11 | ................................................ | 251,521 |
400,000 | Countrywide Home Loan | | |
| 3.250% | | 05/21/08 | ................................................ | 392,280 |
400,000 | General Electric Capital Corporation | |
| 4.625% | | 09/15/09 | ................................................ | 408,376 |
300,000 | Goldman Sachs Group | | |
| 4.500% | | 06/15/10 | ................................................ | 302,273 |
300,000 | HSBC Finance Corporation | | |
| 4.750% | | 04/15/10 | ................................................ | 298,374 |
250,000 | John Deere Corporation | | |
| 4.400% | | 07/15/09 | ................................................ | 253,784 |
250,000 | JP Morgan Chase and Company | |
| 4.500% | | 11/15/10 | ................................................ | 253,438 |
250,000 | Lehman Brothers Holdings | | |
| 4.250% | | 01/27/10 | ................................................ | 241,173 |
300,000 | Morgan Stanley | | | |
| 4.000% | | 01/15/10 | ................................................ | 296,407 |
| | | | | 3,431,921 |
Forest Products (1.45%) | | | | |
400,000 | Weyerhaeuser Company | | |
| 5.950% | | 11/01/08 | ................................................ | 406,103 |
| | | | | |
Media (4.22%) | | | | | |
300,000 | AOL Time Warner | | |
| 6.750% | | 04/15/11 | ................................................ | 308,502 |
300,000 | Comcast Cable Communications | |
| 6.750% | | 01/30/11 | ................................................ | 311,899 |
250,000 | Disney (Walt) Company | | |
| 5.700% | | 07/15/11 | ................................................ | 265,161 |
300,000 | Gannett Company | | |
| 4.125% | | 06/15/08 | ................................................ | 300,232 |
| | | | | 1,185,794 |
Networking Products (0.93%) | | | |
250,000 | Cisco Systems, Inc. | | |
| 5.250% | | 02/22/11 | ................................................ | 260,971 |
| | | | | |
Paper Products (0.89%) | | | | |
250,000 | International Paper Company | |
| 4.250% | | 01/15/09 | ................................................ | 249,911 |
| | | | | |
Real Estate Investment Trust (0.89%) | | |
250,000 | Simon Property Group | | |
| 5.600% | | 09/01/11 | ................................................ | 250,116 |
| | | | | |
Retail General Merchandise (0.97%) | | |
250,000 | Target Corporation | | |
| 7.500% | | 08/15/10 | ................................................ | 271,263 |
| | | | | |
Telecommunications (3.20%) | | | | |
300,000 | America Movil SA | | |
| 4.125% | | 03/01/09 | ................................................ | 300,600 |
300,000 | AT&T, Inc. (SBC Communications) | |
| 4.125% | | 09/15/09 | ................................................ | 301,669 |
300,000 | Sprint Corporation | | |
| 6.125% | | 11/15/08 | ................................................ | 297,750 |
| | | | | 900,019 |
| Total Corporate Bonds | | 7,913,091 |
| | | | | |
| Total Unaffiliated Issuers | | 27,794,633 |
| | | | | |
Affiliated Mutual Fund (1.62%) | | | |
454,455 | Vintage Liquid Assets Fund | |
| I Shares 4.541%............................................................................. | 2.234% | | 454,455 |
| | | | | |
| Total Investments (100.52%) | |
| (Cost $27,983,279) | | $ 28,249,088 |
| Other Assets and Liabilities (-0.52%) | (146,950) |
| | | | | |
| Net Assets (100.00%) | | $ 28,102,138 |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| See notes to financial statements | | |
Performance Report
Bond Fund
Fixed income total returns were robust during the past twelve months as interest rates fell and bond prices rose, supplementing the Fund’s income benefits. The Lehman Brothers Aggregate index rose 7.67 percent. The ten-year Treasury reached its peak for the past year in June 2007 with a yield of 5.30 percent. Interest rates fell through the summer, fall, and winter due to corporate writedowns of subprime holdings, a general flight to the quality of U.S. Treasury securities and a lack of liquidity for off-the-run bonds. The ten-year Treasury reached a low of 3.31 percent on March 17, 2008, coinciding with the announcement of a JP Morgan takeover of brokerage firm Bear Stearns. All told, interest rates moved 1.99 percent during the year from peak to trough, which is an above normal amount of interest rate volatility.
For the year, the Bond Fund performed similarly to its benchmark before expenses, yet trailed after expenses. Compared to the Fund’s Morningstar peer group, however, performance was outstanding. Warren Buffet once said, "You only find out who is swimming naked when the tide goes out." A number of mutual funds managed by well-known, brand name managers suffered due to their use of creative investments and interesting strategies. Our investment strategy of using high quality investments within a diversified and risk-managed approach proved beneficial. Morningstar peer group rankings as of March 31, 2008 rate the Fund in the 24th percentile for one year, 29th percentile for three years, and 21st percentile for five years. Morningstar recognized the Fund and raised the five year ranking to four out of five stars.
The portfolio’s performance was supported by a yield advantage relative to the benchmark and no exposure to the commercial mortgage-backed securities (CMBS) market. These positives were offset somewhat by an overweight to the market’s risk sectors. Treasury yields fell during the period, yet yields on most risk sectors were only modestly lower. CMBS trailed Treasuries by a staggering 11.56 percent as this sector lost sponsorship. Asset-backed securities (down 11.87 percent) and corporate bonds (down 9.75 percent) also trailed Treasuries by a significant margin. The mortgage-backed securities (MBS) and agency sectors, down 2.39 percent and 1.18 percent respectively, also slumped but were much less severe. Security selection was important as avoiding specific financial institutions proved beneficial. Overweight allocations are driven by the opportunity to capture additional income while balancing portfolio risk. The portfolio continues to maintain an income advantage while managing risk.
Our fixed income strategy is guided by our central forecast of both the economy and the markets. Short-term and intermediate-term interest rates are priced for a significant recession. Our forecast is for a sluggish economy in first half of the year but not a deep recession. With core inflation at the upper boundary of the Fed’s desired range, interest rates are not expected to move much lower during 2008 and possibly rise. We believe the high-risk premiums available today are greater than the amount warranted by the decline in fundamentals supporting the corporate, agency MBS, and municipal sectors. These factors support an overweight to the market’s risk sectors that generate an income advantage over the index. Interest rate risk management will be nimble around the market’s inflection point. Corporate bonds, mortgage-backed securities, and asset-backed securities hold overweight positions. The Agency and U.S. Treasury sectors are underweighted.
Performance Report (unaudited)
Average Annual Returns as of 3/31/08 |
| 1 Year | 5 Year | 10 Year |
Vintage Bond | 6.56% | 4.53% | 5.19% |
Lehman Brothers Aggregate Index | 7.67% | 4.58% | 6.04% |
Performance data quoted represents past performance; past performance is not predicative of future results. The value of shares in the Bond Fund will fluctuate so that the shares, when redeemed, may be worth more or less than their original cost. The composition of the Fund’s holdings is subject to change. Performance data current to the most recent month end may be obtained by accessing the website at www.VintageFunds.com. Bond funds will tend to experience smaller fluctuations in value than stock funds. However, investors in any bond fund should anticipate fluctuations in price, especially for longer-term issues and in an environment of rising interest rates.
The performance of the Bond Fund is compared to the Lehman Brothers Aggregate Index, which represents the performance of the overall bond market. The index is unmanaged and does not reflect the deduction of fees associated with a mutual fund, such as investment management fees. The Fund’s performance reflects the deduction of fees for these value-added services. The performance table and graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
Bond Fund | | | | | | | | |
| | | | | | | | |
| | Schedule of Portfolio Investments | | | |
| | March 31, 2008 | | | | |
| | | | | | | | |
Par/ | | | | | | | | |
Share Value | Description | | | Value | | | |
U.S. Treasury Notes (4.68%) | | | | | |
$900,000 | 4.250% | | 08/15/13 | ................................................ | $ 979,734 | | | |
500,000 | 4.500% | | 02/15/09 | ................................................ | 512,578 | | | |
690,000 | 4.500% | | 11/30/11 | ................................................ | 748,974 | | | |
300,000 | 4.500% | | 03/31/12 | ................................................ | 325,805 | | | |
500,000 | 4.750% | | 08/15/17 | ................................................ | 553,203 | | | |
| Total U.S. Treasury Notes | 3,120,294 | | | |
| | | | | | | | |
U.S. Treasury Strips (3.25%) | | | | | | |
820,000 | 0.000% | | 11/15/18 | ................................................ | 534,494 | | | |
1,425,000 | 0.000% | | 05/15/20 | ................................................ | 849,807 | | | |
1,720,000 | 0.000% | | 08/15/25 | ................................................ | 779,234 | | | |
| Total U.S. Treasury Strips | 2,163,535 | | | |
| | | | | | | | |
U.S. Government Agencies (7.26%) | | | | | |
Federal Home Loan Mortgage Corporation (2.10%) | | | | |
730,000 | 6.750% | | 09/15/29 | ................................................ | 904,172 | | | |
450,000 | 5.500% | | 08/23/17 | ................................................ | 496,343 | | | |
| | | | | 1,400,515 | | | |
Federal National Mortgage Association (5.16%) | | | | |
1,060,000 | 4.500% | | 06/01/10 | ................................................ | 1,106,528 | | | |
500,000 | 7.125% | | 01/15/30 | ................................................ | 649,850 | | | |
500,000 | 7.125% | | 06/15/10 | ................................................ | 550,882 | | | |
60,000 | 5.375% | | 07/15/16 | ................................................ | 65,652 | | | |
1,000,000 | 4.875% | | 05/18/12 | ................................................ | 1,070,175 | | | |
| | | | | 3,443,087 | | | |
| Total U.S. Government Agencies | 4,843,602 | | | |
| | | | | | | | |
Mortgage Related Securities (52.35%) | | | | | |
Collateralized Mortgage Obligation (9.91%) | | | | |
49,068 | Federal Home Loan Mortgage | | | | |
| Corporation 2123 Class PE | | | | |
| 6.000% | | 12/15/27 | ................................................ | 49,382 | | | |
1,386,864 | Federal Home Loan Mortgage | | | | |
| Corporation 3034 Class EH | | | | |
| 5.500% | | 12/15/34 | ................................................ | 1,435,589 | | | |
1,925,000 | Federal Home Loan Mortgage | | | | |
| Corporation 3076 Class PC | | | | |
| 5.500% | | 11/15/25 | ................................................ | 1,976,777 | | | |
446,453 | Federal Home Loan Mortgage | | | | |
| Corporation 3211 Class PA | | | | |
| 5.500% | | 11/15/29 | ................................................ | 457,704 | | | |
1,530,000 | Federal National Mortgage | | | | |
| Association 2005-69 Class KE | | | | |
| 5.500% | | 06/25/34 | ................................................ | 1,541,054 | | | |
470,478 | Federal National Mortgage | | | | |
| Association 2007-77 Class M | | | | |
| 5.500% | | 11/25/29 | ................................................ | 485,492 | | | |
624,333 | Structured Asset 2001-1 B2 | | | | |
| 7.121% | | 02/25/31 | ................................................ | 660,732 | | | |
| | | | | 6,606,730 | | | |
Federal Home Loan Mortgage Corporation | | | | |
Mortgage-Backed Pools (15.49%) | | | | | |
695,556 | Pool #E01419 5.500% 05/01/18................................................. | 713,386 | | | |
308,944 | Pool #A19963 5.500% 03/01/34................................................. | 312,743 | | | |
49,276 | Pool #C00592 7.000% 03/01/28................................................. | 52,353 | | | |
48,381 | Pool #C00896 7.500% 12/01/29................................................. | 52,434 | | | |
679,198 | Pool #C01491 6.000% 02/01/33................................................. | 700,770 | | | |
89,113 | Pool #C19588 6.500% 12/01/28................................................. | 93,300 | | | |
72,786 | Pool #C72044 6.500% 10/01/32................................................. | 75,986 | | | |
108,047 | Pool #C76748 6.000% 02/01/33................................................. | 111,402 | | | |
714,432 | Pool #C78237 5.500% 04/01/33................................................. | 723,804 | | | |
1,130,256 | Pool #E01488 5.000% 10/01/18................................................. | 1,147,229 | | | |
856,813 | Pool #E01545 5.000% 01/01/19................................................. | 869,507 | | | |
62,222 | Pool #E99510 5.500% 09/01/18................................................. | 63,792 | | | |
609,675 | Pool #G01444 6.500% 08/01/32................................................. | 637,579 | | | |
1,240,025 | Pool #G01563 5.500% 06/01/33................................................. | 1,256,290 | | | |
736,554 | Pool #G01772 5.000% 02/01/35................................................. | 730,938 | | | |
793,801 | Pool #G01896 5.000% 09/01/35................................................. | 787,242 | | | |
1,517,203 | Pool #G03388 6.000% 10/01/37................................................. | 1,557,227 | | | |
293,498 | Pool #M90876 4.000% 11/01/08................................................. | 293,662 | | | |
32,776 | Pool #C53696 7.000% 06/01/31................................................. | 34,746 | | | |
43,236 | Pool #E00436 7.000% 06/01/11................................................. | 44,969 | | | |
62,747 | Pool #G80135 7.000% 10/25/24................................................. | 66,815 | | | |
| | | | | 10,326,174 | | | |
Federal National Mortgage Association | | | | | |
Mortgage-Backed Pools (19.27%) | | | | | |
78,815 | ARM #686168 6.560% 05/01/32................................................. | 81,359 | | | |
171,049 | Pool #240650 7.500% 07/01/21................................................. | 184,249 | | | |
41,580 | Pool #250990 7.500% 07/01/27................................................. | 45,006 | | | |
62,209 | Pool #251614 7.000% 04/01/28................................................. | 66,236 | | | |
81,795 | Pool #251697 6.500% 05/01/28................................................. | 85,541 | | | |
130,963 | Pool #252334 6.500% 02/01/29................................................. | 136,992 | | | |
59,580 | Pool #252518 7.000% 05/01/29................................................. | 63,796 | | | |
811,808 | Pool #254759 4.500% 06/01/18................................................. | 811,376 | | | |
802,333 | Pool #254802 4.500% 07/01/18................................................. | 801,906 | | | |
392,403 | Pool #254905 6.000% 10/01/33................................................. | 404,018 | | | |
150,633 | Pool #254982 5.000% 12/01/33................................................. | 149,507 | | | |
811,741 | Pool #255075 5.500% 02/01/24................................................. | 826,764 | | | |
182,716 | Pool #255079 5.000% 02/01/19................................................. | 185,306 | | | |
141,014 | Pool #323282 7.500% 07/01/28................................................. | 152,634 | | | |
60,578 | Pool #323640 7.500% 04/01/29................................................. | 65,586 | | | |
60,375 | Pool #346287 7.000% 05/01/26................................................. | 64,273 | | | |
1,329,590 | Pool #357467 5.500% 12/01/33................................................. | 1,346,545 | | | |
49,091 | Pool #535817 7.000% 04/01/31................................................. | 52,265 | | | |
327,203 | Pool #545759 6.500% 07/01/32................................................. | 341,097 | | | |
859,302 | Pool #545993 6.000% 11/01/32................................................. | 885,663 | | | |
803,503 | Pool #555272 6.000% 03/01/33................................................. | 828,152 | | | |
41,040 | Pool #581592 7.000% 06/01/31................................................. | 43,657 | | | |
1,607,342 | Pool #683387 5.500% 02/01/33................................................. | 1,627,839 | | | |
199,786 | Pool #713974 5.500% 07/01/33................................................. | 202,333 | | | |
864,534 | Pool #721502 5.000% 07/01/33................................................. | 858,071 | | | |
680,634 | Pool #735415 6.500% 12/01/32................................................. | 710,245 | | | |
1,012,809 | Pool #737730 5.500% 09/01/33................................................. | 1,025,724 | | | |
799,178 | Pool #742088 4.500% 04/01/19................................................. | 797,820 | | | |
| | | | | 12,843,960 | | | |
Government National Mortgage | | | | | |
Association Pool (2.75%) | | | | | | | |
98,694 | Pool II #2536 7.500% 01/20/28................................................. | 106,043 | | | |
1,027,409 | Pool II #3584 6.000% 07/20/34................................................. | 1,062,326 | | | |
38,193 | Pool #451522 7.500% 10/15/27................................................. | 41,207 | | | |
82,254 | Pool #462556 6.500% 02/15/28................................................. | 86,041 | | | |
9,352 | Pool #466138 7.500% 12/15/28................................................. | 10,086 | | | |
50,384 | Pool #469699 7.000% 11/15/28................................................. | 53,901 | | | |
67,036 | Pool #486760 6.500% 12/15/28................................................. | 70,122 | | | |
50,770 | Pool #780453 7.500% 12/15/25................................................. | 54,793 | | | |
75,606 | Pool #780584 7.000% 06/15/27................................................. | 80,994 | | | |
88,207 | Pool #780717 7.000% 02/15/28................................................. | 94,462 | | | |
52,444 | Pool #780936 7.500% 12/15/28................................................. | 56,594 | | | |
107,978 | Pool #780990 7.500% 12/15/28................................................. | 116,483 | | | |
| | | | | 1,833,052 | | | |
Asset Backed Securities (4.93%) | | | | | |
334,252 | Amresco 1997-2 M1F | | | | | |
| 7.430% | | 06/25/27 | ................................................ | 306,028 | | | |
1,100,000 | Chase Mortgage 2003-4 1A5 | | | | |
| 5.416% | | 05/25/33 | ................................................ | 1,035,201 | | | |
187,027 | Chase Mortgage 2003-6 1A3 | | | | |
| 3.340% | | 05/25/26 | ................................................ | 186,444 | | | |
599,450 | CIT Group 2002-1 AF5 | | | | | |
| 6.710% | | 02/25/33 | ................................................ | 542,058 | | | |
1,562 | ContiMortgage 1999-1 A7 | | | | |
| 6.470% | | 12/25/13 | ................................................ | 1,540 | | | |
171,507 | Countrywide ABS | | | | | |
| 4.575% | | 07/25/35 | ................................................ | 170,696 | | | |
179,440 | Equity One | | | | | | |
| 6.039% | | 11/25/32 | ................................................ | 150,415 | | | |
14,970 | FHLMC Pass Thru T-5 A6 | | | | |
| 7.120% | | 06/25/28 | ................................................ | 15,153 | | | |
494,464 | GreenTree Financial 1996-3 A6 | | | | |
| 7.850% | | 05/15/27 | ................................................ | 511,731 | | | |
261,441 | Indymac 1998-2 A2 | | | | | |
| 6.170% | | 12/25/11 | ................................................ | 263,600 | | | |
110,218 | Southern Pacific 1998-1 A6 | | | | |
| 7.080% | | 03/25/28 | ................................................ | 104,587 | | | |
| | | | | 3,287,453 | | | |
| Total Mortgage Related Securities | 34,897,369 | | | |
| | | | | | | | |
Municipal Bonds (1.42%) | | | | | | | |
General Obligation State Bonds (1.23%) | | | | |
815,000 | Oregon State G.O. | | | | | |
| 3.742% | | 06/01/08 | ................................................ | 816,769 | | | |
| | | | | | | | |
Revenue Bonds - Education (0.19%) | | | | | |
130,000 | Pennsylvania Higher Education | | | | |
| 4.700% | | 07/01/09 | ................................................ | 129,752 | | | |
| Total Municipal Bonds | | 946,521 | | | |
| | | | | | | | |
Corporate Bonds (29.20%) | | | | | | |
Aerospace - Defense (0.69%) | | | | | |
445,000 | Lockheed Martin Corporation | | | | |
| 6.150% | | 09/01/36 | ................................................ | 459,588 | | | |
| | | | | | | | |
Banking and Financial (2.02%) | | | | | |
500,000 | Bank of America Corporation | | | | |
| 7.400% | | 01/15/11 | ................................................ | 535,411 | | | |
435,000 | Wachovia Corporation | | | | | |
| 5.625% | | 10/15/16 | ................................................ | 415,006 | | | |
435,000 | Wells Fargo Company | | | | | |
| 5.375% | | 02/07/35 | ................................................ | 394,781 | | | |
| | | | | 1,345,198 | | | |
Beverages (0.80%) | | | | | | | |
535,000 | Anheuser-Busch Company | | | | |
| 5.950% | | 01/15/33 | ................................................ | 536,324 | | | |
| | | | | | | | |
Building Products (0.77%) | | | | | | | |
520,000 | Lafarge SA | | | | | | |
| 6.500% | | 07/15/16 | ................................................ | 514,375 | | | |
| | | | | | | | |
Electric Utility (1.98%) | | | | | | | |
490,000 | Appalachian Power Company | | | | |
| 5.000% | | 06/01/17 | ................................................ | 454,830 | | | |
435,000 | Pacific Gas and Electric | | | | | |
| 6.050% | | 03/01/34 | ................................................ | 426,445 | | | |
435,000 | Virginia Electric | | | | | |
| 5.400% | | 01/15/16 | ................................................ | 439,642 | | | |
| | | | | 1,320,917 | | | |
Financial Services (6.32%) | | | | | | |
505,000 | CIT Group, Inc. | | | | | |
| 4.750% | | 12/15/10 | ................................................ | 402,038 | | | |
650,000 | Citigroup, Inc. | | | | | | |
| 5.125% | | 05/05/14 | ................................................ | 635,225 | | | |
275,000 | GE Capital Corporation | | | | | |
| 6.125% | | 02/22/11 | ................................................ | 292,305 | | | |
350,000 | GE Capital Corporation | | | | | |
| 6.750% | | 03/15/32 | ................................................ | 373,838 | | | |
670,000 | Goldman Sachs Group | | | | | |
| 5.950% | | 01/18/18 | ................................................ | 663,468 | | | |
700,000 | HSBC Finance Corporation | | | | |
| 4.750% | | 07/15/13 | ................................................ | 688,149 | | | |
490,000 | JP Morgan Chase and Company | | | | |
| 3.500% | | 03/15/09 | ................................................ | 488,405 | | | |
240,000 | JP Morgan Chase and Company | | | | |
| 4.500% | | 01/15/12 | ................................................ | 242,479 | | | |
455,000 | Lehman Brothers Holdings | | | | |
| 5.500% | | 04/04/16 | ................................................ | 426,645 | | | |
| | | | | 4,212,552 | | | |
Industrial Products and Equipment (0.65%) | | | | |
420,000 | Praxair, Inc. | | | | | | |
| 5.250% | | 11/15/14 | ................................................ | 434,789 | | | |
| | | | | | | | |
Insurance (1.34%) | | | | | | | |
440,000 | Genworth Financial | | | | | |
| 5.750% | | 06/15/14 | ................................................ | 438,241 | | | |
440,000 | St. Paul Travelers | | | | | |
| 6.250% | | 06/20/16 | ................................................ | 456,366 | | | |
| | | | | 894,607 | | | |
Machinery and Equipment (1.06%) | | | | | |
250,000 | Caterpillar, Inc. | | | | | |
| 6.050% | | 08/15/36 | ................................................ | 255,810 | | | |
450,000 | Johnson Controls, Inc. | | | | | |
| 4.875% | | 09/15/13 | ................................................ | 451,446 | | | |
| | | | | 707,256 | | | |
Medical Hospital Management (0.69%) | | | | | |
490,000 | Wellpoint, Inc. | | | | | | |
| 5.250% | | 01/15/16 | ................................................ | 460,778 | | | |
| | | | | | | | |
Media (1.75%) | | | | | | | | |
120,000 | AOL Time Warner | | | | | |
| 7.625% | | 04/15/31 | ................................................ | 125,509 | | | |
255,000 | AOL Time Warner | | | | | |
| 6.875% | | 05/01/12 | ................................................ | 263,246 | | | |
800,000 | Comcast Cable Communications | | | | |
| 5.875% | | 02/15/18 | ................................................ | 779,230 | | | |
| | | | | 1,167,985 | | | |
Oil and Gas (2.65%) | | | | | | | |
380,000 | Conoco, Inc. | | | | | | |
| 6.950% | | 04/15/29 | ................................................ | 432,698 | | | |
600,000 | Enterprise Products Operation | | | | |
| 5.000% | | 03/01/15 | ................................................ | 572,961 | | | |
345,000 | Marathon Oil Corporation | | | | |
| 5.900% | | 03/15/18 | ................................................ | 346,794 | | | |
440,000 | Tesoro Corporation | | | | | |
| 6.250% | | 11/01/12 | ................................................ | 414,700 | | | |
| | | | | 1,767,153 | | | |
Paper Products (1.04%) | | | | | | | |
695,000 | International Paper Company | | | | |
| 4.250% | | 01/15/09 | ................................................ | 694,753 | | | |
| | | | | | | | |
Pharmaceuticals (0.68%) | | | | | | | |
450,000 | Cardinal Health, Inc. | | | | | |
| 5.850% | | 12/15/17 | ................................................ | 450,614 | | | |
| | | | | | | | |
Pipelines (0.44%) | | | | | | | |
280,000 | Kinder Morgan Energy | | | | | |
| 6.750% | | 03/15/11 | ................................................ | 293,333 | | | |
| | | | | | | | |
Railroads (0.43%) | | | | | | | |
280,000 | Union Pacific Corporation | | | | |
| 6.625% | | 02/01/29 | ................................................ | 284,740 | | | |
| | | | | | | | |
Real Estate Investment Trust (2.47%) | | | | | |
450,000 | Avalon Bay Apartments | | | | |
| 5.500% | | 01/15/12 | ................................................ | 445,676 | | | |
575,000 | Realty Income Corporation | | | | |
| 5.500% | | 11/15/15 | ................................................ | 527,041 | | | |
630,000 | Simon Property Group | | | | | |
| 7.750% | | 01/20/11 | ................................................ | 674,093 | | | |
| | | | | 1,646,810 | | | |
Retail General Merchandise (0.58%) | | | | | |
425,000 | May Department Stores | | | | | |
| 5.750% | | 07/15/14 | ................................................ | 388,229 | | | |
| | | | | | | | |
Telecommunications (1.53%) | | | | | | |
605,000 | America Movil SA | | | | | |
| 5.500% | | 03/01/14 | ................................................ | 608,603 | | | |
420,000 | Verizon Communications, Inc. | | | | |
| 5.500% | | 02/15/18 | ................................................ | 409,065 | | | |
| | | | | 1,017,668 | | | |
Utilities (0.67%) | | | | | | | | |
425,000 | Cincinnati Gas and Electric | | | | |
| 5.700% | | 09/15/12 | ................................................ | 446,783 | | | |
| | | | | | | | |
Waste Disposal (0.64%) | | | | | | | |
435,000 | Waste Management, Inc. | | | | |
| 5.000% | | 03/15/14 | ................................................ | 426,960 | | | |
| Total Corporate Bonds | | 19,471,412 | | | |
| | | | | | | | |
Preferred Stock (0.38%) | | | | | | | |
Real Estate Investment Trust | | | | | | |
10,000 | Realty Income Senior Preferred | | | | |
| 8.250% | | 11/15/08 | ................................................ | 254,900 | | | |
| | | | | | | | |
| Total Unaffiliated Issuers | 65,697,633 | | | |
| | | | | | | | |
Affiliated Mutual Fund (1.68%) | | | | | |
1,117,442 | Vintage Liquid Assets Fund | | | | |
| I Shares 4.541%............................................................................. | 2.234% | | 1,117,442 | | | |
| | | | | | | | |
| Total Investments (100.22%) | | | | |
| (Cost $66,358,157) | | $ 66,815,075 | | | |
| Other Assets and Liabilities (-0.22%) | (149,327) | | | |
| | | | | | | | |
| Net Assets (100.00%) | | $ 66,665,748 | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| See notes to financial statements | | | | | |
| | | | | | | | |
Performance Report
Municipal Bond Fund
Municipal bonds underperformed Treasuries over the past year as subprime problems resulted in a flight to quality that pushed Treasury rates down and municipal rates higher. Municipal yields relative to Treasuries reached extreme highs as downgrades of municipal bond insurers and the implosion of the auction rate securities market pushed investors out of the municipal market. The ten-year municipal reached its peak for the past year in November 2007 with a yield of 4.15 percent. By March, investors had begun to see the value in municipals compared to taxable product, and relative returns improved significantly. Although liquidity remains a concern as leveraged investors are unable to find funding for additional purchases, the Fed’s work should boost economic activity in the upcoming year and help the relative performance of municipal bonds.
For the year, the Municipal Bond Fund outperformed its benchmark before expenses, yet trailed after expenses. Our investment strategy of using high quality investments within a diversified and risk-managed approach proved beneficial. Compared to the Fund’s Morningstar peer group, however, performance was outstanding. Morningstar peer group rankings as of March 31, 2008 rate the Fund in the 10th percentile for one year and 48th percentile for three years. The significant changes made to the Fund two years ago, including the increase of average maturity and reduction of minimum credit quality, has resulted in strong relative performance.
Investment strategy continues to increase exposure to municipal sectors and structures that generate an income advantage over the index while maintaining interest rate risk modestly lower than the index. We believe the high-risk premiums available today are greater than the amount warranted by the decline in fundamentals supporting the riskier areas of the municipal market. These factors support an overweight to callable securities and the market’s risk sectors that generate an income advantage over the index.
Performance Report (unaudited)
| | Average Annual Returns as of 3/31/08 |
| | 1 Year | 5 Year | 10 Year |
Vintage Municipal Bond Fund | 4.00% | 2.59% | 3.75% |
Merrill Lynch 1-12 Yr. Municipal Bond Index | 5.58% | 4.29% | 5.03% |
Merrill Lynch 2-17 Yr. Municipal Bond Index | 4.50% | 4.06% | 5.19% |
Performance data quoted represents past performance; past performance is not predicative of future results. The value of shares in the Municipal Bond Fund will fluctuate so that the shares, when redeemed, may be worth more or less than their original cost. The composition of the Fund’s holdings is subject to change. Performance data current to the most recent month end may be obtained by accessing the website at www.VintageFunds.com.
Bond funds will tend to experience smaller fluctuations in value than stock funds. However, investors in any bond fund should anticipate fluctuations in price, especially for longer-term issues and in an environment of rising interest rates.
The performance of the Municipal Bond Fund is measured against the Merrill Lynch 2-17 Year Municipal Bond Index, an unmanaged index generally representative of the performance of municipal bonds with maturities of 2-17 years. During fiscal 2006, the benchmark changed from the Merrill Lynch 1-12 Year Index to the Merrill Lynch 2-17 Year Index because the longer maturity profile is expected to result in higher income. The index does not reflect the deduction of fees associated with a mutual fund, such as investment management fees. The Fund’s performance reflects the deduction of fees for these value-added services. The performance table and graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
Municipal Bond Fund | | | | | | |
| | | | | | | |
| | Schedule of Portfolio Investments | | |
| | March 31, 2008 | | | |
| | | | | | | |
Par/ | | | | | | | |
Share Value | Description | | | Value | | |
Municipal Bonds (91.92%) | | | | | | |
Alabama (3.81%) | | | | | | |
$200,000 | Decatur, AL G.O. | | | | |
| 4.250% | | 10/01/22 | ................................................ | $ 190,614 | | |
290,000 | Montgomery, AL G.O. | | | | |
| 5.000% | | 01/01/23 | ................................................ | 295,577 | | |
| | | | | 486,191 | | |
Alaska (1.55%) | | | | | | | |
200,000 | Alaska Housing Finance Corporation | | | |
| 4.300% | | 06/01/15 | ................................................ | 198,142 | | |
| | | | | | | |
Arizona (0.78%) | | | | | | |
100,000 | Maricopa County, AZ IDA | | | |
| 4.125% | | 07/01/15 | ................................................ | 99,099 | | |
| | | | | | | |
California (8.35%) | | | | | | |
285,000 | California State | | | | |
| 5.000% | | 12/01/17 | ................................................ | 315,558 | | |
5,000 | California State | | | | |
| 5.000% | | 12/01/17 | ................................................ | 5,235 | | |
500,000 | California State | | | | |
| 5.250% | | 07/01/13 | ................................................ | 548,895 | | |
200,000 | San Diego, CA School District | | | |
| 4.500% | | 07/01/24 | ................................................ | 197,040 | | |
| | | | | 1,066,728 | | |
Colorado (4.09%) | | | | | | |
290,000 | Evergreen, CO G.O. | | | | |
| 5.000% | | 12/01/19 | ................................................ | 306,458 | | |
200,000 | NW Public Highway Authority, CO | | | |
| 5.125% | | 06/15/31 | ................................................ | 216,292 | | |
| | | | | 522,750 | | |
Florida (2.41%) | | | | | | | |
300,000 | Collier County, FL Revenue | | | |
| 5.000% | | 06/01/21 | ................................................ | 307,845 | | |
| | | | | | | |
Illinois (15.07%) | | | | | | |
300,000 | DeKalb County, IL G.O. | | | | |
| 5.000% | | 12/01/20 | ................................................ | 314,592 | | |
240,000 | DuPage County, IL | | | | |
| 5.000% | | 11/01/16 | ................................................ | 259,562 | | |
200,000 | Evanston, IL | | | | | |
| 5.000% | | 12/01/23 | ................................................ | 208,146 | | |
300,000 | Kendall County, IL G.O. | | | | |
| 5.250% | | 01/01/23 | ................................................ | 313,563 | | |
435,000 | Will County, IL School District | | | |
| 6.500% | | 11/01/10 | ................................................ | 479,013 | | |
320,000 | Will County, IL School District | | | |
| 6.500% | | 11/01/17 | ................................................ | 349,133 | | |
| | | | | 1,924,009 | | |
Indiana (5.45%) | | | | | | |
450,000 | Allen County, IN | | | | |
| 5.750% | | 10/01/11 | ................................................ | 494,820 | | |
200,000 | Avon, IN Revenue | | | | |
| 4.250% | | 07/15/18 | ................................................ | 201,180 | | |
| | | | | 696,000 | | |
Iowa (1.21%) | | | | | | | |
160,000 | Iowa Higher Education | | | | |
| 4.200% | | 10/01/15 | ................................................ | 154,403 | | |
| | | | | | | |
Louisiana (0.79%) | | | | | | |
100,000 | Calcasieu Parish, LA | | | | |
| 4.000% | | 02/15/14 | ................................................ | 100,128 | | |
| | | | | | | |
Massachusetts (1.84%) | | | | | | |
215,000 | Massachusetts State Special Revenue | | |
| 5.000% | | 06/01/14 | ................................................ | 234,544 | | |
| | | | | | | |
Minnesota (2.37%) | | | | | | |
200,000 | Blooming Prairie School District, MN | | | |
| 4.750% | | 01/01/24 | ................................................ | 201,554 | | |
100,000 | Minnesota State Municipal Power | | | |
| 4.000% | | 10/01/12 | ................................................ | 101,316 | | |
| | | | | 302,870 | | |
New York (7.44%) | | | | | | |
200,000 | New York State Revenue | | | |
| 5.000% | | 04/01/16 | ................................................ | 219,824 | | |
440,000 | New York, NY | | | | |
| 5.000% | | 08/01/12 | ................................................ | 471,698 | | |
245,000 | New York, NY Series G | | | | |
| 5.000% | | 12/01/17 | ................................................ | 258,379 | | |
| | | | | 949,901 | | |
Ohio (3.89%) | | | | | | | |
75,000 | Buckeye, OH Tobacco | | | | |
| 4.500% | | 06/01/13 | ................................................ | 74,179 | | |
100,000 | Ohio State Higher Education | | | |
| 5.000% | | 10/01/11 | ................................................ | 104,565 | | |
300,000 | Ohio State University | | | | |
| 5.250% | | 06/01/19 | ................................................ | 318,192 | | |
| | | | | 496,936 | | |
South Carolina (1.54%) | | | | | | |
200,000 | Beaufort County, SC | | | | |
| 4.250% | | 03/01/22 | ................................................ | 196,692 | | |
| | | | | | | |
Tennessee (4.27%) | | | | | | |
500,000 | Memphis,TN | | | | | |
| 5.000% | | 11/01/14 | ................................................ | 544,970 | | |
| | | | | | | |
Texas (13.30%) | | | | | | |
240,000 | Denton, TX Utility System | | | |
| 5.000% | | 12/01/13 | ................................................ | 257,294 | | |
40,000 | Denton, TX Utility System | | | |
| 5.000% | | 12/01/13 | ................................................ | 41,980 | | |
300,000 | Harris County, TX | | | | |
| 5.250% | | 10/01/20 | ................................................ | 328,653 | | |
290,000 | Plano, TX G.O. | | | | |
| 4.750% | | 09/01/19 | ................................................ | 304,564 | | |
490,000 | Texas State | | | | | |
| 5.250% | | 10/15/12 | ................................................ | 525,839 | | |
235,000 | Texas State Housing Revenue | | | |
| 4.300% | | 09/01/16 | ................................................ | 239,528 | | |
| | | | | 1,697,858 | | |
Washington (8.08%) | | | | | | |
125,000 | Clark County, WA School District | | | |
| 5.250% | | 12/01/14 | ................................................ | 129,198 | | |
200,000 | King County, WA | | | | |
| 4.000% | | 12/01/12 | ................................................ | 206,046 | | |
200,000 | Seattle, WA G.O. | | | | |
| 5.000% | | 08/01/23 | ................................................ | 206,176 | | |
465,000 | Washington State Series R03A | | | |
| 5.000% | | 01/01/15 | ................................................ | 490,626 | | |
| | | | | 1,032,046 | | |
Wisconsin (5.68%) | | | | | | |
200,000 | Kronewetter, WI | | | | |
| 4.750% | | 03/01/11 | ................................................ | 201,894 | | |
175,000 | Ledgeview, WI Sanitary District | | | |
| 4.125% | | 04/01/14 | ................................................ | 181,930 | | |
200,000 | Monona, WI Sewer Revenue | | | |
| 4.500% | | 05/01/11 | ................................................ | 203,256 | | |
135,000 | Wisconsin State | | | | |
| 5.000% | | 04/01/09 | ................................................ | 138,569 | | |
| | | | | 725,649 | | |
| Total Municipal Bonds | | 11,736,761 | | |
| | | | | | | |
Alternative Minimum Tax Paper (1.65%) | | | | |
Virginia (1.65%) | | | | | | |
200,000 | Virginia Port Authority | | | |
| 5.000% | | 07/01/17 | ................................................ | 210,262 | | |
| | | | | | | |
Mutual Funds (5.34%) | | | | | | |
56,500 | Federated Tax-Free Obligations | | | |
| 2.240% | | | ................................................ | 56,500 | | |
625,576 | Lehman Brothers Tax-Free Fund | | | |
| 2.270% | | | ................................................ | 625,576 | | |
| | | | | 682,076 | | |
| | | | | | | |
| Total Investments (98.91%) | | | |
| (Cost $12,515,940) | | $ 12,629,099 | | |
| Other Assets and Liabilities (1.09%) | 139,754 | | |
| | | | | | | |
| Net Assets (100.00%) | | $ 12,768,853 | | |
| | | | | | | |
| | | | | | | |
| | | See notes to financial statements | | | |
| | | | | | |
| | | | | | | |
| | | | | | | |
Statements of Assets and Liabilities | | | | | |
March 31, 2008 | | | | | |
| | | | | | | | | |
| | | | | Institutional | | Institutional | | Liquid |
| | | | | Money Market | | Reserves | | Assets |
| | | | | | | | | |
ASSETS: | | | | | | | |
Investments, at value: | | | | | |
| Unaffiliated issuers | $ 25,089,581 | | $ 18,835,387 | | $ 47,834,622 |
| Affiliated funds | ----- | | ----- | | ----- |
| Repurchase agreements | 35,853,144 | | 37,677,082 | | 59,577,842 |
| | Total investments | 60,942,725 | | 56,512,469 | | 107,412,464 |
Interest and dividends receivable | 276,287 | | 159,249 | | 626,111 |
Receivable for capital shares issued | ----- | | ----- | | 17,123 |
Dividend reinvestment receivable | 156,190 | | ----- | | 31,195 |
Prepaid expenses | 9,519 | | 11,075 | | 17,680 |
| | Total assets | 61,384,721 | | 56,682,793 | | 108,104,573 |
LIABILITIES: | | | | | | | |
Dividends payable | 156,190 | | 138,634 | | 219,588 |
Payable for capital shares redeemed | ----- | | ----- | | 28,442 |
Accrued expenses and other payables: | | | | | |
| Investment advisory fees | 4,669 | | 9,450 | | 32,280 |
| Administration fees | 3,767 | | 4,476 | | 19,368 |
| Accounting fees | ----- | | ----- | | 2,767 |
| Distribution fees | ----- | | ----- | | 18,849 |
| Servicing fees | ----- | | ----- | | 28,914 |
| Other | | | 11,421 | | 16,497 | | 32,527 |
| | Total liabilities | 176,047 | | 169,057 | | 382,735 |
| | Net assets | $ 61,208,674 | | $ 56,513,736 | | $ 107,721,838 |
| | | | | | | | | |
Investments, at cost: | | | | | |
| Unaffiliated issuers | $ 25,089,581 | | $ 18,835,387 | | $ 47,834,622 |
| Affiliated funds | ----- | | ----- | | ----- |
| Repurchase agreements | 35,853,144 | | 37,677,082 | | 59,577,842 |
| | | | | $ 60,942,725 | | $ 56,512,469 | | $ 107,412,464 |
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See notes to financial statements | | | | | |
| | | | | | | | | |
Statements of Assets and Liabilities | | | | | |
March 31, 2008 | | | | | |
| | | | | | | | | |
| | | | | Limited | | | | Municipal |
| | | | | Term Bond | | Bond | | Bond |
| | | | | | | | | |
ASSETS: | | | | | | | |
Investments, at value: | | | | | |
| Unaffiliated issuers | $ 27,794,633 | | $ 65,697,633 | | $ 12,629,099 |
| Affiliated funds | 454,455 | | 1,117,442 | | ----- |
| Repurchase agreements | ----- | | ----- | | ----- |
| | Total investments | 28,249,088 | | 66,815,075 | | 12,629,099 |
Interest and dividends receivable | 255,271 | | 498,566 | | 191,759 |
Receivable for capital shares issued | 415 | | 2,139 | | ----- |
Dividend reinvestment receivable | 26,701 | | 55,718 | | 3,531 |
Prepaid expenses | 4,320 | | 10,507 | | 2,415 |
| | Total assets | 28,535,795 | | 67,382,005 | | 12,826,804 |
LIABILITIES: | | | | | | | |
Dividends payable | 91,004 | | 249,150 | | 34,569 |
Payable for capital shares redeemed | 303,278 | | 398,537 | | ----- |
Accrued expenses and other payables: | | | | | |
| Investment advisory fees | 12,069 | | 31,359 | | 5,284 |
| Administration fees | 3,379 | | 9,693 | | 2,325 |
| Accounting fees | 724 | | 1,711 | | 317 |
| Distribution fees | ----- | | ----- | | ----- |
| Servicing fees | ----- | | ----- | | ----- |
| Other | | | 23,203 | | 25,807 | | 15,456 |
| | Total liabilities | 433,657 | | 716,257 | | 57,951 |
| | Net assets | $ 28,102,138 | | $ 66,665,748 | | $ 12,768,853 |
| | | | | | | | | |
Investments, at cost: | | | | | |
| Unaffiliated issuers | $ 27,528,824 | | $ 65,240,715 | | $ 12,515,940 |
| Affiliated funds | 454,455 | | 1,117,442 | | ----- |
| Repurchase agreements | ----- | | ----- | | ----- |
| | | | | $ 27,983,279 | | $ 66,358,157 | | $ 12,515,940 |
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| | | | | | | | | |
See notes to financial statements | | | | | |
Statements of Assets and Liabilities | | | | | |
March 31, 2008 | | | | | |
| | | | | | | | | |
| | | | | Institutional | | Institutional | | Liquid |
| | | | | Money Market | | Reserves | | Assets |
| | | | | | | | | |
NET ASSETS: | | | | | | |
Paid-in capital | | $ 61,208,674 | | $ 56,513,736 | | $ 107,721,838 |
Accumulated undistributed net investment income | ----- | | ----- | | 11,167 |
Net unrealized gain on investment transactions | ----- | | ----- | | ----- |
Accumulated undistributed net realized gains (losses) | | | | | |
on investment transactions | ----- | | ----- | | (11,167) |
| | Net assets | $ 61,208,674 | | $ 56,513,736 | | $ 107,721,838 |
Authorized shares | 1,250,000,000 | | 1,250,000,000 | | |
Capital shares outstanding | 61,208,674 | | 56,513,736 | | |
Net asset value--offering and redemption price per share | $ 1.00 | | $ 1.00 | | |
| | | | | | | | | |
Pricing of S2 Shares | | | | | |
Net assets applicable to S2 Shares outstanding | | | | | $ 27,042,745 |
Authorized shares | | | | | 1,250,000,000 |
Shares outstanding, $.001 par value | | | | | 27,042,745 |
Net asset value--offering and redemption price per share | | | | | $ 1.00 |
| | | | | | | | | |
Pricing of T Shares | | | | | |
Net assets applicable to T Shares outstanding | | | | | $ 14,660,957 |
Authorized shares | | | | | 1,250,000,000 |
Shares outstanding, $.001 par value | | | | | 14,660,957 |
Net asset value--offering and redemption price per share | | | | | $ 1.00 |
| | | | | | | | | |
Pricing of I Shares | | | | | |
Net assets applicable to I Shares outstanding | | | | | $ 66,018,136 |
Authorized shares | | | | | 1,250,000,000 |
Shares outstanding, $.001 par value | | | | | 66,018,136 |
Net asset value--offering and redemption price per share | | | | | $ 1.00 |
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| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
See notes to financial statements | | | | | |
Statements of Assets and Liabilities | | | | | |
March 31, 2008 | | | | | |
| | | | | | | | | |
| | | | | Limited | | | | Municipal |
| | | | | Term Bond | | Bond | | Bond |
| | | | | | | | | |
NET ASSETS: | | | | | | |
Paid-in capital | | $ 30,757,383 | | $ 68,954,220 | | $ 12,582,731 |
Accumulated undistributed net investment income | 24,584 | | 20 | | 2,082 |
Net unrealized gain on investment transactions | 265,809 | | 456,917 | | 113,159 |
Accumulated undistributed net realized gains (losses) | | | | | |
on investment transactions | (2,945,638) | | (2,745,409) | | 70,881 |
| | Net assets | $ 28,102,138 | | $ 66,665,748 | | $ 12,768,853 |
Authorized shares | 800,000,000 | | 809,987,393 | | 800,000,000 |
Capital shares outstanding | 2,880,097 | | 6,746,966 | | 1,263,381 |
Net asset value--offering and redemption price per share | $ 9.76 | | $ 9.88 | | $ 10.11 |
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See notes to financial statements | | | | | |
Statements of Operations | | | | | |
For the Year Ended March 31, 2008 | | | | | |
| | | | | | |
| | Institutional | | Institutional | | Liquid |
| | Money Market | Reserves | | Assets |
| | | | | | |
INVESTMENT INCOME: | | | | | |
Interest income | | $ 3,900,583 | | $ 3,068,311 | | $ 5,836,789 |
Affiliated interest income | ----- | | ----- | | ----- |
Dividend income | ----- | | ----- | | ----- |
Total investment income | 3,900,583 | | 3,068,311 | | 5,836,789 |
| | | | | | |
EXPENSES: | | | | | | |
Investment advisory fees | 282,834 | | 227,929 | | 416,772 |
Administration fees | 169,700 | | 136,757 | | 250,063 |
Accounting fees | 24,243 | | 19,537 | | 35,723 |
Distribution and shareholder service fees S Shares | ----- | | ----- | | 73,931 |
Distribution and shareholder service fees S2 Shares | ----- | | ----- | | 163,814 |
Shareholder service fees T Shares | ----- | | ----- | | 39,995 |
Shareholder service fees | ----- | | ----- | | ----- |
Custody fees | | 38,750 | | 25,385 | | 37,691 |
Legal fees | | 7,545 | | 3,733 | | 5,856 |
Audit and tax fees | 22,770 | | 15,971 | | 29,425 |
Directors' fees | | 24,835 | | 14,032 | | 21,883 |
Transfer agent fees | 6,000 | | 5,486 | | 64,962 |
Registration and filing fees | 652 | | 1,143 | | 11,831 |
Printing fees | | 4,189 | | 2,876 | | 4,948 |
Insurance expense | 21,272 | | 17,359 | | 24,423 |
Other | | 1,744 | | 1,992 | | 2,630 |
Total expenses | | 604,534 | | 472,200 | | 1,183,947 |
Less: Expenses voluntarily reduced/waived | (408,821) | | (239,850) | | (58,618) |
Net expenses | | 195,713 | | 232,350 | | 1,125,329 |
Net investment income | 3,704,870 | | 2,835,961 | | 4,711,460 |
| | | | | | |
REALIZED/UNREALIZED GAINS FROM INVESTMENTS: | | | | | |
Net realized gains from investment transactions | ----- | | ----- | | ----- |
Net change in unrealized appreciation from investments | ----- | | ----- | | ----- |
Net realized and unrealized gains from investments | ----- | | ----- | | ----- |
Change in net assets resulting from operations | $ 3,704,870 | | $ 2,835,961 | | $ 4,711,460 |
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See notes to financial statements | | | | | |
| | | | | | |
Statements of Operations | | | | | |
For the Year Ended March 31, 2008 | | | | | |
| | | | | | |
| | Limited | | | | Municipal |
| | Term Bond | | Bond | | Bond |
| | | | | | |
INVESTMENT INCOME: | | | | | |
Interest income | | $ 1,369,441 | | $ 3,642,308 | | $ 631,472 |
Affiliated interest income | 35,266 | | 37,001 | | 1,532 |
Dividend income | ----- | | 18,906 | | ----- |
Total investment income | 1,404,707 | | 3,698,215 | | 633,004 |
| | | | | | |
EXPENSES: | | | | | | |
Investment advisory fees | 147,893 | | 387,816 | | 76,947 |
Administration fees | 76,904 | | 183,331 | | 40,012 |
Accounting fees | 8,874 | | 21,154 | | 4,617 |
Distribution and shareholder service fees S Shares | ----- | | ----- | | ----- |
Distribution and shareholder service fees S2 Shares | ----- | | ----- | | ----- |
Shareholder service fees T Shares | ----- | | ----- | | ----- |
Shareholder service fees | 73,947 | | 176,280 | | 38,473 |
Custody fees | | 5,289 | | 9,951 | | 2,817 |
Legal fees | | 1,637 | | 3,547 | | 776 |
Audit and tax fees | 19,050 | | 27,380 | | 21,511 |
Directors' fees | | 6,003 | | 13,286 | | 2,801 |
Transfer agent fees | 29,842 | | 47,034 | | 7,346 |
Registration and filing fees | 2,695 | | 3,698 | | 1,498 |
Printing fees | | 1,438 | | 2,849 | | 764 |
Insurance expense | 6,558 | | 14,858 | | 3,208 |
Other | | 10,598 | | 19,997 | | 7,039 |
Total expenses | | 390,728 | | 911,181 | | 207,809 |
Less: Expenses voluntarily reduced/waived | (159,521) | | (382,341) | | (92,389) |
Net expenses | | 231,207 | | 528,840 | | 115,420 |
Net investment income | 1,173,500 | | 3,169,375 | | 517,584 |
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REALIZED/UNREALIZED GAINS FROM INVESTMENTS: | | | | | |
Net realized gains from investment transactions | 413,724 | | 328,265 | | 72,946 |
Net change in unrealized appreciation from investments | 402,228 | | 911,457 | | 11,312 |
Net realized and unrealized gains from investments | 815,952 | | 1,239,722 | | 84,258 |
Change in net assets resulting from operations | $ 1,989,452 | | $ 4,409,097 | | $ 601,842 |
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See notes to financial statements | | | | | |
| | | | | | |
| | Statements of Changes in Net Assets | | | | |
| | | March 31, 2008 | | | | | |
| Institutional Money Market | Institutional Reserves | | Liquid Assets |
| Year | | Year | | Year | | Year | | Year | | Year |
| Ended | | Ended | | Ended | | Ended | | Ended | | Ended |
| March 31, 2008 | March 31, 2007 | March 31, 2008 | March 31, 2007 | March 31, 2008 | March 31, 2007 |
OPERATIONS: | | | | | | | | | | | |
Net investment income | $ 3,704,870 | | $ 3,962,619 | | $ 2,835,961 | | $ 3,248,714 | | $ 4,711,460 | | $ 5,504,256 |
Net realized gains (losses) | | | | | | | | | | | |
from investment transactions | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
Net change in unrealized | | | | | | | | | | | |
appreciation from | | | | | | | | | | | |
investments | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
Change in net assets | | | | | | | | | | | |
resulting from operations | 3,704,870 | | 3,962,619 | | 2,835,961 | | 3,248,714 | | 4,711,460 | | 5,504,256 |
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DISTRIBUTIONS TO | | | | | | | | | | | |
SHAREHOLDERS: | | | | | | | | | | | |
From net investment income: | | | | | | | | | | | |
Capital Shares | (3,704,870) | | (3,962,619) | | (2,835,961) | | (3,248,714) | | ------ | | ------ |
S Shares | ------ | | ------ | | ------ | | ------ | | (352,017) | | (479,620) |
S2 Shares | ------ | | ------ | | ------ | | ------ | | (1,230,000) | | (1,496,382) |
T Shares | ------ | | ------ | | ------ | | ------ | | (638,855) | | (995,920) |
I Shares | ------ | | ------ | | ------ | | ------ | | (2,490,588) | | (2,521,058) |
From net realized gains: | | | | | | | | | | | |
Capital Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
S Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
S2 Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
T Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
I Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
Change in net assets from | | | | | | | | | | | |
shareholder distributions | $ (3,704,870) | | $ (3,962,619) | | $ (2,835,961) | | $ (3,248,714) | | $ (4,711,460) | | $ (5,492,980) |
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See notes to financial statements | | | | | | | | | | | |
| | Statements of Changes in Net Assets | | | | |
| | | | | March 31, 2008 | | | | |
| Limited Term Bond | | Bond | | Municipal Bond |
| Year | | Year | | Year | | Year | | Year | | Year |
| Ended | | Ended | | Ended | | Ended | | Ended | | Ended |
| March 31, 2008 | March 31, 2007 | March 31, 2008 | March 31, 2007 | March 31, 2008 | March 31, 2007 |
OPERATIONS: | | | | | | | | | | | |
Net investment income | $ 1,173,500 | | $ 1,387,354 | | $ 3,169,375 | | $ 3,524,337 | | $ 517,584 | | $ 717,748 |
Net realized gains (losses) | | | | | | | | | | | |
from investment transactions | 413,724 | | (154,843) | | 328,265 | | (532,413) | | 72,946 | | 116,912 |
Net change in unrealized | | | | | | | | | | | |
appreciation from | | | | | | | | | | | |
investments | 402,228 | | 548,861 | | 911,457 | | 1,645,505 | | 11,312 | | 24,611 |
Change in net assets | | | | | | | | | | | |
resulting from operations | 1,989,452 | | 1,781,372 | | 4,409,097 | | 4,637,429 | | 601,842 | | 859,271 |
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DISTRIBUTIONS TO | | | | | | | | | | | |
SHAREHOLDERS: | | | | | | | | | | | |
From net investment income: | | | | | | | | | | | |
Capital Shares | (1,173,493) | | (1,503,025) | | (3,169,381) | | (3,535,052) | | (517,576) | | (717,065) |
S Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
S2 Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
T Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
I Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
From net realized gains: | | | | | | | | | | | |
Capital Shares | ------ | | ------ | | ------ | | ------ | | (29,820) | | (195,581) |
S Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
S2 Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
T Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
I Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
Change in net assets from | | | | | | | | | | | |
shareholder distributions | $ (1,173,493) | | $ (1,503,025) | | $ (3,169,381) | | $ (3,535,052) | | $ (547,396) | | $ (912,646) |
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See notes to financial statements | | | | | | | | | | | |
| | | | | | | | | | | |
| | Statements of Changes in Net Assets | | | | |
| | | | March 31, 2008 | | | | |
| Institutional Money Market | Institutional Reserves | | Liquid Assets |
| Year | | Year | | Year | | Year | | Year | | Year |
| Ended | | Ended | | Ended | | Ended | | Ended | | Ended |
| March 31, 2008 | March 31, 2007 | March 31, 2008 | March 31, 2007 | March 31, 2008 | March 31, 2007 |
CAPITAL SHARE | | | | | | | | | | | |
TRANSACTIONS: | | | | | | | | | | | |
Issued: | | | | | | | | | | | |
Capital Shares | $586,059,009 | | $547,347,648 | | $230,886,266 | | $214,540,104 | | $ ------ | | $ ------ |
S Shares | ------ | | ------ | | ------ | | ------ | | 47,152,021 | | 51,055,530 |
S2 Shares | ------ | | ------ | | ------ | | ------ | | 185,796,590 | | 223,292,230 |
T Shares | ------ | | ------ | | ------ | | ------ | | 44,973,619 | | 128,167,772 |
I Shares | ------ | | ------ | | ------ | | ------ | | 146,921,169 | | 187,776,432 |
Reinvestments: | | | | | | | | | | | |
Capital Shares | 3,704,869 | | 3,962,619 | | ------ | | ------ | | ------ | | ------ |
S Shares | ------ | | ------ | | ------ | | ------ | | 7,184 | | ------ |
S2 Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
T Shares | ------ | | ------ | | ------ | | ------ | | 401,006 | | 389,074 |
I Shares | ------ | | ------ | | ------ | | ------ | | 202,988 | | 175,629 |
Redemptions: | | | | | | | | | | | |
Capital Shares | (635,573,373) | | (507,778,457) | | (240,635,919) | | (194,431,681) | | ------ | | ------ |
S Shares | ------ | | ------ | | ------ | | ------ | | (57,296,993) | | (52,505,099) |
S2 Shares | ------ | | ------ | | ------ | | ------ | | (194,781,811) | | (247,778,103) |
T Shares | ------ | | ------ | | ------ | | ------ | | (45,925,531) | | (140,884,113) |
I Shares | ------ | | ------ | | ------ | | ------ | | (145,287,067) | | (156,389,793) |
Change in net assets from | | | | | | | | | | | |
capital transactions | (45,809,495) | | 43,531,810 | | (9,749,653) | | 20,108,423 | | (17,836,825) | | (6,700,441) |
Change in net assets | (45,809,495) | | 43,531,810 | | (9,749,653) | | 20,108,423 | | (17,836,825) | | (6,689,165) |
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NET ASSETS: | | | | | | | | | | | |
Beginning of period | 107,018,169 | | 63,486,359 | | 66,263,389 | | 46,154,966 | | 125,558,663 | | 132,247,828 |
End of period | $ 61,208,674 | | $107,018,169 | | $ 56,513,736 | | $ 66,263,389 | | $107,721,838 | | $125,558,663 |
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See notes to financial statements | | | | | | | | | | | |
Statements of Changes in Net Assets | | | |
| | | March 31, 2008 | | | | |
| Limited Term Bond | | Bond | | Municipal Bond |
| Year | | Year | | Year | | Year | | Year | | Year |
| Ended | | Ended | | Ended | | Ended | | Ended | | Ended |
| March 31, 2008 | March 31, 2007 | March 31, 2008 | March 31, 2007 | March 31, 2008 | March 31, 2007 |
CAPITAL SHARE | | | | | | | | | | | |
TRANSACTIONS: | | | | | | | | | | | |
Issued: | | | | | | | | | | | |
Capital Shares | $ 1,724,062 | | $ 3,165,008 | | $ 7,189,176 | | $ 7,675,213 | | $ 822,474 | | $ 782,079 |
S Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
S2 Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
T Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
I Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
Reinvestments: | | | | | | | | | | | |
Capital Shares | 316,715 | | 395,173 | | 680,742 | | 780,788 | | 56,023 | | 85,990 |
S Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
S2 Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
T Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
I Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
Redemptions: | | | | | | | | | | | |
Capital Shares | (7,025,039) | | (16,441,905) | | (16,730,565) | | (31,394,347) | | (5,580,631) | | (9,684,773) |
S Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
S2 Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
T Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
I Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
Change in net assets from | | | | | | | | | | | |
capital transactions | (4,984,262) | | (12,881,724) | | (8,860,647) | | (22,938,346) | | (4,702,134) | | (8,816,704) |
Change in net assets | (4,168,303) | | (12,603,376) | | (7,620,931) | | (21,835,969) | | (4,647,688) | | (8,870,079) |
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NET ASSETS: | | | | | | | | | | | |
Beginning of period | 32,270,441 | | 44,873,817 | | 74,286,679 | | 96,122,648 | | 17,416,541 | | 26,286,620 |
End of period | $ 28,102,138 | | $ 32,270,441 | | $ 66,665,748 | | $ 74,286,679 | | $ 12,768,853 | | $ 17,416,541 |
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See notes to financial statements | | | | | | | | | | | |
| Statements of Changes in Net Assets | | | | |
| | | March 31, 2008 | | | | |
| Institutional Money Market | Institutional Reserves | | Liquid Assets |
| Year | | Year | | Year | | Year | | Year | | Year |
| Ended | | Ended | | Ended | | Ended | | Ended | | Ended |
| March 31, 2008 | March 31, 2007 | March 31, 2008 | March 31, 2007 | March 31, 2008 | March 31, 2007 |
SHARE TRANSACTIONS: | | | | | | | | | | | |
Issued: | | | | | | | | | | | |
Capital Shares | 586,059,009 | | 547,347,648 | | 230,886,266 | | 214,540,104 | | ------ | | ------ |
S Shares | ------ | | ------ | | ------ | | ------ | | 47,152,021 | | 51,055,530 |
S2 Shares | ------ | | ------ | | ------ | | ------ | | 185,796,590 | | 223,292,230 |
T Shares | ------ | | ------ | | ------ | | ------ | | 44,973,619 | | 128,167,772 |
I Shares | ------ | | ------ | | ------ | | ------ | | 146,921,169 | | 187,776,432 |
Reinvestments: | | | | | | | | | | | |
Capital Shares | 3,704,869 | | 3,962,619 | | ------ | | ------ | | ------ | | ------ |
S Shares | ------ | | ------ | | ------ | | ------ | | 7,184 | | ------ |
S2 Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
T Shares | ------ | | ------ | | ------ | | ------ | | 401,006 | | 389,074 |
I Shares | ------ | | ------ | | ------ | | ------ | | 202,988 | | 175,629 |
Redemptions: | | | | | | | | | | | |
Capital Shares | (635,573,373) | | (507,778,457) | | (240,635,919) | | (194,431,681) | | ------ | | ------ |
S Shares | ------ | | ------ | | ------ | | ------ | | (57,296,993) | | (52,505,099) |
S2 Shares | ------ | | ------ | | ------ | | ------ | | (194,781,811) | | (247,778,103) |
T Shares | ------ | | ------ | | ------ | | ------ | | (45,925,531) | | (140,884,113) |
I Shares | ------ | | ------ | | ------ | | ------ | | (145,287,067) | | (156,389,793) |
Change in shares | (45,809,495) | | 43,531,810 | | (9,749,653) | | 20,108,423 | | (17,836,825) | | (6,700,441) |
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See notes to financial statements | | | | | | | | | | | |
| Statements of Changes in Net Assets | |
| | | March 31, 2008 | | | |
| Limited Term Bond | | Bond | | Municipal Bond |
| Year | | Year | | Year | | Year | | Year | | Year |
| Ended | | Ended | | Ended | | Ended | | Ended | | Ended |
| March 31, 2008 | March 31, 2007 | March 31, 2008 | March 31, 2007 | March 31, 2008 | March 31, 2007 |
SHARE TRANSACTIONS: | | | | | | | | | | | |
Issued: | | | | | | | | | | | |
Capital Shares | 178,577 | | 334,855 | | 738,146 | | 797,095 | | 81,324 | | 77,211 |
S Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
S2 Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
T Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
I Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
Reinvestments: | | | | | | | | | | | |
Capital Shares | 33,024 | | 41,833 | | 69,927 | | 81,308 | | 5,571 | | 8,493 |
S Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
S2 Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
T Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
I Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
Redemptions: | | | | | | | | | | | |
Capital Shares | (735,252) | | (1,740,885) | | (1,718,220) | | (3,275,377) | | (552,149) | | (954,834) |
S Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
S2 Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
T Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
I Shares | ------ | | ------ | | ------ | | ------ | | ------ | | ------ |
Change in shares | (523,651) | | (1,364,197) | | (910,147) | | (2,396,974) | | (465,254) | | (869,130) |
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See notes to financial statements | | | | | | | | | | | |
Notes to Financial Statements
March 31, 2008
1. Organization
The Vintage Mutual Funds (the “Funds”) were registered on November 16, 1994 under the Investment Company Act of 1940 (the "1940 Act''), as amended, as a diversified open-end management investment company issuing its shares in six portfolios. WB Capital Management Inc. (“WB Capital”) is the investment adviser to the Funds. The Funds currently consist of the following diversified portfolios (individually, a “Fund''): Institutional Money Market Fund, Institutional Reserves Fund, Liquid Assets Fund, Limited Term Bond Fund, Bond Fund, and Municipal Bond Fund.
Liquid Assets Fund offers three classes of shares. S2 Shares are offered to customers of banks. S2 Shares are normally offered through financial institutions providing automatic “sweep'' investment programs to their own customers. T Shares may be purchased only by financial institutions acting on their own behalf or on behalf of certain customers' accounts. I Shares may be purchased by individual and institutional investors directly from Foreside Distribution Services, L.P. (the "Distributor''). The single S Share shareholder liquidated their account on March 14, 2008.
Each class of shares has equal rights to earnings, assets, and voting privileges except each class bears different distribution and shareholder servicing expenses. Each class of shares has exclusive voting rights on matters affecting only that class. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based upon its relative net assets.
The Board of Directors approved the termination and liquidation of the Municipal Assets Fund effective September 27, 2007. This action was taken to improve the operating efficiency of the Funds.
2. Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Funds in the preparation of the financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP''). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increase and decrease in net assets from operations during the period. Actual results could differ from those estimates.
New Accounting Pronouncements
During the year ended March 31, 2008, the Fund adopted Financial Accounting Standards Board (“FASB”) Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109 (“FIN 48”) with the impact of such adoption being recognized on September 28, 2007 in accordance with guidance provided by the Securities and Exchange Commission. The adoption of FIN 48 did not have a material effect on the financial statements of the Funds as there was no liability required for the recognition of unrecognized tax benefits during the year, nor were there any such liabilities to be recorded at the beginning net asset value of the Funds. The Funds are subject to examination by U.S. federal, state, and foreign tax authorities for returns filed for the years after March 31, 2004.
In September 2006, FASB issued Statement on Financial Accounting Standards (“SFAS”) No. 157, Fair Value Measurements. SFAS No. 157 defines fair value for purposes of financial statement presentation, establishes a hierarchy for measuring fair value in accordance with generally accepted accounting principles and expands financial statement disclosures about fair value measurements that are relevant to mutual funds. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007.
The Fund will adopt SFAS No. 157 during 2008 and its potential impact, if any, on the Fund’s financial statements is currently being assessed by management.
Securities Valuation
Investments of the Institutional Money Market Fund, Institutional Reserves Fund, and Liquid Assets Fund (the "Money Market Funds'') are valued at amortized cost, which approximates market value. Under the amortized cost method of valuation, discount or premium is amortized on an effective yield basis to the maturity of the security.
Investments of the Limited Term Bond Fund, Bond Fund, and Municipal Bond Fund (collectively the "Variable Funds'') for which the primary market is a national securities exchange are valued at the official closing price on the day of valuation. In the absence of any sale of such securities on the valuation date, the valuations are based on the latest available bid quotation.
Substantially all fixed-income securities are valued each business day as of the close of regular trading by one or more independent pricing services (the "Pricing Services'') approved by the Board. When quoted bid prices are readily available, the Pricing Services generally value fixed-income securities at the bid price, provided that management believes those prices to reflect the fair market value of the securities. Other investments valued by the Pricing Services are carried at fair value as determined by the Pricing Services, based on methods which include consideration of: yields or prices of securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions. Pricing Services may take other factors into consideration in pricing securities, including institutional size transactions in similar groups of securities as well as developments related to specific securities. Investments in investment companies are valued at their respective net asset values as reported by such companies. Securities, including restricted securities, for which market quotations are not readily available, are valued at fair market value as determined in good faith by the investment adviser under the supervision of the Board. The difference between the cost and market values of investments held by the Variable Funds is reflected as either unrealized appreciation or depreciation.
Security Transactions and Investment Income
Security transactions are accounted for on the date the security is purchased or sold ("trade date''). Interest income is recognized on the accrual basis and includes, when applicable, the pro rata amortization of premium or accretion of discount. Dividends are recorded on the ex-dividend date. Gains or losses realized on sales of securities are determined on the identified cost basis.
Repurchase Agreements
The Funds may engage in repurchase agreements with financial institutions such as banks, brokers, or dealers that the investment advisor, WB Capital, deems creditworthy under guidelines approved by the Board, subject to the seller's agreement to repurchase such securities at a mutually agreed-upon date and price. The seller under a repurchase agreement will be required to continually maintain the value of collateral held pursuant to the agreement at not less than the repurchase price (including accrued interest). If the seller were to default on its repurchase obligation or become insolvent, the Fund holding such obligation would suffer a loss to the extent that the proceeds from a sale of the underlying portfolio were less than the repurchase price under the agreement, or to the extent that the disposition of such securities by the Fund were delayed pending court action. The repurchase price generally equals the price paid plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities.
Loan Certificates
The Liquid Assets Fund invests in Farmers Home Administration Guaranteed Loan Certificates ("FmHA'') which represent interests in the guaranteed portion of FmHA loans issued by one or more guaranteed loan trusts subject to repurchase on no more than five business days written notice. The FmHAs are diversified through limitations on certificates sold by any one individual bank.
Securities Purchased on a When-Issued or Delayed-Delivery Basis
Each Fund may purchase securities on a when-issued or delayed-delivery basis. When-issued securities are securities purchased with delivery to occur at a later date at a stated price and/or yield, thereby involving the risk that the price and/or yield obtained may be more or less than those available in the market when delivery takes place. At the time a Fund makes a commitment to purchase a security on a when-issued basis, the Fund records the transaction and reflects the value of the security in determining net asset value. A segregated account is established and the Fund maintains cash and marketable securities at least equal in value to commitments for when-issued securities.
Dividends to Shareholders
Dividends from net investment income are declared daily and paid monthly for the Institutional Money Market Fund, Institutional Reserves Fund, and Liquid Assets Fund. Dividends from net investment income are declared and paid monthly for the Limited Term Bond Fund, Bond Fund, and Municipal Bond Fund. Distributable net realized capital gains, if any, are declared and distributed at least annually for each of the Funds.
The dividends from net investment income and distributions from net realized gains are determined in accordance with federal income tax regulations, which may differ from GAAP. These "book/tax'' differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the composition of net assets based on their federal treatment; temporary differences do not require reclassification.
Expenses
Expenses attributable to a Fund are charged to that Fund; other expenses of the Funds are prorated to the Funds on the basis of each Fund's relative net assets or on another reasonable basis.
Taxes
Each Fund’s policy is to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute taxable income to shareholders in amounts that will avoid or minimize federal income or excise taxes of the Fund.
3. Purchases and Sales of Securities Purchases and sales of securities (excluding short-term securities) for the year ended March 31, 2008 are as follows:
Proceeds from
| Purchases | Maturities and Sales |
| Limited Term Bond | $11,448,446 | $15,422,371 |
| Bond Fund | 15,961,641 | 23,778,617 |
| Municipal Bond | 3,023,976 | 8,225,235 |
4. Related Party TransactionsUnder the terms of its Investment Advisory Agreement, WB Capital is entitled to receive fees computed daily on a percentage of the average daily net assets of each Fund as follows:
Institutional Money Market Fund 0.35%
Institutional Reserves Fund 0.35%
Liquid Assets Fund 0.35%
Limited Term Bond Fund 0.50%
Bond Fund 0.55%
Municipal Bond Fund 0.50%
WB Capital voluntarily limited advisory fees for the Institutional Money Market Fund to a range from 0.06 to 0.10 percent, and the Institutional Reserves Fund to a range from 0.15 to 0.19 percent during the year ended March 31, 2008.
The Funds have entered into a management and administration agreement with WB Capital pursuant to which the Funds pay administrative fees at an annual rate of 0.21 percent of the average daily net assets for the Money Market Funds and 0.26 percent of the average daily net assets for the Variable Funds. WB Capital voluntarily limited administrative fees for the Institutional Money Market Fund to a range from 0.05 to 0.08 percent, Institutional Reserves Fund to a range from 0.05 to 0.09 percent, Limited Term Bond Fund to 0.14 percent, Bond Fund to 0.17 percent, and Municipal Bond Fund to 0.22 percent during the year ended March 31, 2008.
WB Capital also provides fund accounting services for the Funds pursuant to a Fund Accounting Agreement and receives a fee of 0.03 percent of the average daily net assets of each Fund for such services. WB Capital voluntarily waived all fund accounting fees for the Institutional Money Market Fund and Institutional Reserves Fund during the year ended March 31, 2008.
The Funds have adopted an Administrative Services Plan (the "Services Plan'') pursuant to which each Fund is authorized to pay compensation to banks and other financial institutions (each a "Participating Organization'') which agree to provide recordkeeping and/or administrative support services for their customers or account holders (collectively, "Customers'') who are beneficial or record owner of shares of that Fund. In consideration for such services, a Participating Organization receives a fee from a Fund, computed daily and paid monthly, at an annual rate of up to 0.25 percent of the average daily net asset value of shares of that Fund owned beneficially or of record by such Participating Organization's customers for whom the Participating Organization provides such services. As of March 31, 2008, the Funds are required to pay servicing fees as follows: 0.25 percent on S2 Shares of the Liquid Assets Fund, and 0.25 percent on T Shares of the Liquid Assets Fund, which has been reduced to 0.15 percent due to WB Capital supplementing 0.10 percent. WB Capital has the ability to supplement Administrative Service fees up to 0.25 percent on the Limited Term Bond Fund, Bond Fund, and Municipal Bond Fund.
Foreside Distribution Services, L.P. serves as distributor to the Funds pursuant to a Distribution Agreement. The Distributor receives no compensation under the Distribution Agreement with the Funds, but may receive compensation under a Distribution and Shareholder Service Plan (the "Plan'') adopted pursuant to Rule 12b-1 under the 1940 Act under which the Funds are authorized to pay the Distributor for payments it makes to Participating Organizations. As authorized by the Plan, the Distributor will enter into Shareholder Agreements with Participating Organizations pursuant to which the Participating Organization agrees to provide certain administrative and shareholder support services in connection with shares of a Fund purchased and held by Customers of the Participating Organization. The Distributor will be compensated by a Fund up to the amount of any payments it makes to Participating Organizations under the Rule 12b-1 Agreement. The maximum fee is 0.25 percent on S2 Shares of the Liquid Assets Fund, T Shares of the Liquid Assets Fund, Limited Term Bond Fund, Bond Fund, and Municipal Bond Fund. As of March 31, 2008, such fees were limited 0.15 percent for S2 Shares of the Liquid Assets Fund, and no fees for all other classes and Funds including T and I Shares for Liquid Assets Fund, Limited Term Bond Fund, Bond Fund, and Municipal Bond Fund. However, WB Capital as adviser and administrator of the Fund may in its sole discretion make payments to the Distributor to supplement shareholder fees paid by the Fund up to the maximum fee approved by the Plan without further notice to shareholders and at no cost to the Fund. During the year ended March 31, 2008, WB Capital limited distribution fees on S2 Shares of Liquid Assets Fund and supplemented $32,762 in fees waived at the Fund level to the Participating Organizations.
WB Capital also serves as the Fund's transfer agent to the Institutional Money Market Fund, Institutional Reserves Fund, and S2 and I Share classes of Liquid Assets Fund. WB Capital is paid a fee for transfer agency services based on the number of shareholder accounts serviced or a minimum fee amount. During the year ended March 31, 2008, WB Capital received $42,000 in transfer agent service fees. Citi Fund Services Ohio, Inc. serves as transfer agent to the other classes and Funds pursuant to a transfer agency agreement with the Funds and receives a fee for such services.
5. Federal Income Taxes
Each Fund's policy is to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute taxable income to shareholders in amounts that will avoid or minimize federal income or excise taxes of the Fund.
The amounts of aggregate unrealized gain (loss) and the cost of investment securities as of March 31, 2008 for tax purposes follow:
| Aggregate | | Aggregate | | | | |
| Unrealized | | Unrealized | | Net Unrealized | | Cost of |
| Gain | | (Loss) | | Gain (Loss) | | Investments |
Institutional Money Market Fund | $ -- | | $ -- | | $ -- | | $60,942,725 |
Institutional Reserves Fund | -- | | -- | | -- | | 56,512,469 |
Liquid Assets Fund | -- | | -- | | -- | | 107,412,464 |
Limited Term Bond Fund | 519,089 | | (253,280) | | 265,809 | | 27,983,279 |
Bond Fund | 1,288,519 | | (831,602) | | 456,917 | | 66,358,157 |
Municipal Bond Fund | 189,425 | | (76,266) | | 113,159 | | 12,515,940 |
Distributable earnings as of March 31, 2008 for tax purposes follow:
| Distributable Earnings | | |
| Ordinary | | Long-term | | |
| Income | | Gains (Losses) | | Tax Exempt |
Institutional Money Market Fund | $ 156,193 | | $ -- | | $ -- |
Institutional Reserves Fund | 138,634 | | -- | | -- |
Liquid Assets Fund | 230,864 | | -- | | -- |
Limited Term Bond Fund | 115,588 | | -- | | -- |
Bond Fund | 249,115 | | -- | | -- |
Municipal Bond Fund | -- | | 70,881 | | 36,652 |
Distributable earnings for the year ended March 31, 2007 for tax purposes follow:
| Distributable Earnings | | |
| Ordinary | | Long-term | | |
| Income | | Gains (Losses) | | Tax Exempt |
Institutional Money Market Fund | $ 397,714 | | $ -- | | $ -- |
Institutional Reserves Fund | 266,333 | | -- | | -- |
Liquid Assets Fund | 500,207 | | -- | | -- |
Limited Term Bond Fund | 145,258 | | -- | | -- |
Bond Fund | 267,546 | | -- | | -- |
Municipal Bond Fund | -- | | 29,819 | | 49,539 |
Distributions for the year ended March 31, 2008 for tax purposes follow:
| Tax Distributions | | | | | |
| Ordinary | | Long-term | | | | Return of |
| Income | | Capital Gains | | Tax Exempt | | Capital |
Institutional Money Market Fund | $ 3,946,391 | | $ -- | | $ -- | | $ -- |
Institutional Reserves Fund | 2,963,661 | | -- | | -- | | -- |
Liquid Assets Fund | 4,980,803 | | -- | | -- | | -- |
Limited Term Bond Fund | 1,203,488 | | -- | | -- | | -- |
Bond Fund | 3,187,807 | | -- | | -- | | -- |
Municipal Bond Fund | -- | | 29,820 | | 532,535 | | -- |
Distributions for the year ended March 31, 2007 for tax purposes follow:
| Tax Distributions | | | | | |
| Ordinary | | Long-term | | | | Return of |
| Income | | Capital Gains | | Tax Exempt | | Capital |
Institutional Money Market Fund | $ 3,769,617 | | $ -- | | $ -- | | $ -- |
Institutional Reserves Fund | 3,149,246 | | -- | | -- | | -- |
Liquid Assets Fund | 5,411,064 | | -- | | -- | | -- |
Limited Term Bond Fund | 1,516,206 | | -- | | -- | | -- |
Bond Fund | 3,611,330 | | -- | | -- | | -- |
Municipal Bond Fund | -- | | 195,581 | | 739,944 | | -- |
For tax purposes, the following Funds have capital loss carryovers as of March 31, 2008, the Funds’ most recent fiscal year end, which are available to offset future realized capital gains for Federal income tax purposes. The following shows the totals by year in which capital loss carryovers will expire if not used:
| Liquid | | Limited Term | | |
| Assets Fund | | Bond Fund | | Bond Fund |
March 31, 2009 | $ -- | | $ 158,627 | | $ 18,412 |
March 31, 2010 | -- | | -- | | -- |
March 31, 2011 | 4,519 | | 17,563 | | -- |
March 31, 2012 | 6,648 | | 1,659,350 | | 1,793,103 |
March 31, 2013 | -- | | 88,259 | | -- |
March 31, 2014 | -- | | 624,709 | | 8,157 |
March 31, 2015 | -- | | 397,132 | | 856,953 |
March 31, 2016 | -- | | -- | | -- |
Total Carryover | $ 11,167 | | $ 2,945,640 | | $ 2,676,625 |
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At March 31, 2008, the Bond Fund had $68,764 in deferred capital losses occurring subsequent to October 31, 2007. For tax purposes, such losses will be reflected in the year ended March 31, 2009.
6. Other Tax Information (unaudited):The Municipal Bond Fund designated $29,820 of capital gain dividends and $532,535 of tax-exempt dividends for the fiscal year ended March 31, 2008.
Financial Highlights | | | | | | | | | | | | |
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| | | | Investment Activities | | | Dividends and Distributions | | |
| | | | | | | | | | | | | |
| | | NAV | Net | Net Realized/ | Total from | | From Net | From Net | Return | Dividends | NAV |
| | | Beginning | Investment | Unrealized | Investment | | Investment | Realized | of | and | End |
| | | of Period | Income | Gains (Losses) | Activities | | Income | | Gains | Capital | Distributions | of Period |
Institutional Money Market Fund | | | | | | | | | | |
Year Ended | March 31, 2008 | | $1.00 | 0.05 | 0.00 | 0.05 | | (0.05) | | 0.00 | 0.00 | (0.05) | $1.00 |
Year Ended | March 31, 2007 | | $1.00 | 0.05 | 0.00 | 0.05 | | (0.05) | | 0.00 | 0.00 | (0.05) | $1.00 |
Year Ended | March 31, 2006 | | $1.00 | 0.04 | 0.00 | 0.04 | | (0.04) | | 0.00 | 0.00 | (0.04) | $1.00 |
From March 7, 2005 | | | | | | | | | | | | |
through March 31, 2005 | | $1.00 | 0.00 | 0.00 | 0.00 | | 0.00 | | 0.00 | 0.00 | 0.00 | $1.00 |
Institutional Reserves Fund | | | | | | | | | | | | |
Year Ended | March 31, 2008 | | $1.00 | 0.04 | 0.00 | 0.04 | | (0.04) | | 0.00 | 0.00 | (0.04) | $1.00 |
Year Ended | March 31, 2007 | | $1.00 | 0.05 | 0.00 | 0.05 | | (0.05) | | 0.00 | 0.00 | (0.05) | $1.00 |
Year Ended | March 31, 2006 | | $1.00 | 0.03 | 0.00 | 0.03 | | (0.03) | | 0.00 | 0.00 | (0.03) | $1.00 |
Year Ended | March 31, 2005 | | $1.00 | 0.02 | 0.00 | 0.02 | | (0.02) | | 0.00 | 0.00 | (0.02) | $1.00 |
Year Ended | March 31, 2004 | | $1.00 | 0.01 | 0.00 | 0.01 | | (0.01) | | 0.00 | 0.00 | (0.01) | $1.00 |
Liquid Assets Fund "S2" Shares | | | | | | | | | | |
Year Ended | March 31, 2008 | | $1.00 | 0.04 | 0.00 | 0.04 | | (0.04) | | 0.00 | 0.00 | (0.04) | $1.00 |
Year Ended | March 31, 2007 | | $1.00 | 0.04 | 0.00 | 0.04 | | (0.04) | | 0.00 | 0.00 | (0.04) | $1.00 |
Year Ended | March 31, 2006 | | $1.00 | 0.03 | 0.00 | 0.03 | | (0.03) | | 0.00 | 0.00 | (0.03) | $1.00 |
Year Ended | March 31, 2005 | | $1.00 | 0.01 | 0.00 | 0.01 | | (0.01) | | 0.00 | 0.00 | (0.01) | $1.00 |
Year Ended | March 31, 2004 | | $1.00 | 0.00 | 0.00 | 0.00 | | 0.00 | | 0.00 | 0.00 | 0.00 | $1.00 |
Liquid Assets Fund "T" Shares | | | | | | | | | | | | |
Year Ended | March 31, 2008 | | $1.00 | 0.04 | 0.00 | 0.04 | | (0.04) | | 0.00 | 0.00 | (0.04) | $1.00 |
Year Ended | March 31, 2007 | | $1.00 | 0.04 | 0.00 | 0.04 | | (0.04) | | 0.00 | 0.00 | (0.04) | $1.00 |
Year Ended | March 31, 2006 | | $1.00 | 0.03 | 0.00 | 0.03 | | (0.03) | | 0.00 | 0.00 | (0.03) | $1.00 |
Year Ended | March 31, 2005 | | $1.00 | 0.01 | 0.00 | 0.01 | | (0.01) | | 0.00 | 0.00 | (0.01) | $1.00 |
Year Ended | March 31, 2004 | | $1.00 | 0.00 | 0.00 | 0.00 | | 0.00 | | 0.00 | 0.00 | 0.00 | $1.00 |
Liquid Assets Fund "I" Shares | | | | | | | | | | | | |
Year Ended | March 31, 2008 | | $1.00 | 0.04 | 0.00 | 0.04 | | (0.04) | | 0.00 | 0.00 | (0.04) | $1.00 |
Year Ended | March 31, 2007 | | $1.00 | 0.05 | 0.00 | 0.05 | | (0.05) | | 0.00 | 0.00 | (0.05) | $1.00 |
Year Ended | March 31, 2006 | | $1.00 | 0.03 | 0.00 | 0.03 | | (0.03) | | 0.00 | 0.00 | (0.03) | $1.00 |
Year Ended | March 31, 2005 | | $1.00 | 0.01 | 0.00 | 0.01 | | (0.01) | | 0.00 | 0.00 | (0.01) | $1.00 |
Year Ended | March 31, 2004 | | $1.00 | 0.01 | 0.00 | 0.01 | | (0.01) | | 0.00 | 0.00 | (0.01) | $1.00 |
Limited Term Bond Fund | | | | | | | | | | | | |
Year Ended | March 31, 2008 | | $9.48 | 0.38 | 0.28 | 0.66 | | (0.38) | | 0.00 | 0.00 | (0.38) | $9.76 |
Year Ended | March 31, 2007 | | $9.41 | 0.37 | 0.09 | 0.46 | | (0.39) | | 0.00 | 0.00 | (0.39) | $9.48 |
Year Ended | March 31, 2006 | | $9.47 | 0.30 | (0.08) | 0.22 | | (0.28) | | 0.00 | 0.00 | (0.28) | $9.41 |
Year Ended | March 31, 2005 | | $9.76 | 0.26 | (0.29) | (0.03) | | (0.24) | | 0.00 | (0.02) | (0.26) | $9.47 |
Year Ended | March 31, 2004 | | $9.62 | 0.28 | 0.14 | 0.42 | | (0.28) | | 0.00 | 0.00 | (0.28) | $9.76 |
Bond Fund | | | | | | | | | | | | | |
Year Ended | March 31, 2008 | | $9.70 | 0.44 | 0.18 | 0.62 | | (0.44) | | 0.00 | 0.00 | (0.44) | $9.88 |
Year Ended | March 31, 2007 | | $9.56 | 0.42 | 0.14 | 0.56 | | (0.42) | | 0.00 | 0.00 | (0.42) | $9.70 |
Year Ended | March 31, 2006 | | $9.80 | 0.40 | (0.24) | 0.16 | | (0.40) | | 0.00 | 0.00 | (0.40) | $9.56 |
Year Ended | March 31, 2005 | | $10.05 | 0.40 | (0.25) | 0.15 | | (0.40) | | 0.00 | 0.00 | (0.40) | $9.80 |
Year Ended | March 31, 2004 | | $9.78 | 0.41 | 0.28 | 0.69 | | (0.42) | | 0.00 | 0.00 | (0.42) | $10.05 |
Municipal Bond Fund | | | | | | | | | | | | |
Year Ended | March 31, 2008 | | $10.08 | 0.34 | 0.05 | 0.39 | | (0.34) | | (0.02) | 0.00 | (0.36) | $10.11 |
Year Ended | March 31, 2007 | | $10.12 | 0.35 | 0.06 | 0.41 | | (0.35) | | (0.10) | 0.00 | (0.45) | $10.08 |
Year Ended | March 31, 2006 | | $10.49 | 0.33 | (0.19) | 0.14 | | (0.33) | | (0.18) | 0.00 | (0.51) | $10.12 |
Year Ended | March 31, 2005 | | $11.02 | 0.34 | (0.38) | (0.04) | | (0.34) | | (0.15) | 0.00 | (0.49) | $10.49 |
Year Ended | March 31, 2004 | | $11.06 | 0.37 | 0.07 | 0.44 | | (0.38) | | (0.10) | 0.00 | (0.48) | $11.02 |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Financial Highlights | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | Total Return / Ratios / Supplementary Data | | | | | | | | |
| | | | | | | | | | | | | |
| | | | Net Assets | Expenses to | Investment | | Expenses to | Investment | | |
| | Total | | End of Period | Average | | Income to | | Average | | Income to | | Portfolio |
| | Return | | (000 omitted) | Net Assets | | Average Net Assets | Net Assets* | | Average Net Assets* | Turnover |
Institutional Money Market Fund | | | | | | | | | | |
Year Ended | March 31, 2008 | 4.58% | | $61,209 | 0.24% | | 4.58% | | 0.75% | | 4.08% | | |
Year Ended | March 31, 2007 | 5.13% | | $107,018 | 0.21% | | 5.01% | | 0.75% | | 4.47% | | |
Year Ended | March 31, 2006 | 3.64% | | $63,486 | 0.21% | | 3.94% | | 0.74% | | 3.41% | | |
From March 7, 2005 | | | | | | | | | | | | |
through March 31, 2005 | 0.17% | ** | $10,112 | 0.15% | *** | 2.54% | *** | 0.74% | *** | 1.95% | *** | |
Institutional Reserves Fund | | | | | | | | | | | | |
Year Ended | March 31, 2008 | 4.43% | | $56,514 | 0.36% | | 4.35% | | 0.73% | | 3.99% | | |
Year Ended | March 31, 2007 | 4.98% | | $66,263 | 0.33% | | 4.89% | | 0.72% | | 4.50% | | |
Year Ended | March 31, 2006 | 3.47% | | $46,155 | 0.30% | | 3.43% | | 0.72% | | 3.01% | | |
Year Ended | March 31, 2005 | 1.59% | | $43,673 | 0.17% | | 1.62% | | 0.72% | | 1.07% | | |
Year Ended | March 31, 2004 | 1.03% | | $33,034 | 0.14% | | 1.00% | | 0.68% | | 0.46% | | |
Liquid Assets Fund "S2" Shares | | | | | | | | | | |
Year Ended | March 31, 2008 | 3.78% | | $27,043 | 1.16% | | 3.75% | | 1.26% | | 3.65% | | |
Year Ended | March 31, 2007 | 4.14% | | $36,028 | 1.20% | | 4.02% | | 1.30% | | 3.92% | | |
Year Ended | March 31, 2006 | 2.65% | | $60,514 | 1.23% | | 2.64% | | 1.33% | | 2.54% | | |
Year Ended | March 31, 2005 | 0.77% | | $48,241 | 1.16% | | 0.88% | | 1.33% | | 0.71% | | |
Year Ended | March 31, 2004 | 0.29% | | $28,748 | 1.12% | | 0.29% | | 1.30% | | 0.10% | | |
Liquid Assets Fund "T" Shares | | | | | | | | | | | | |
Year Ended | March 31, 2008 | 4.04% | | $14,661 | 0.91% | | 3.99% | | 1.01% | | 3.89% | | |
Year Ended | March 31, 2007 | 4.40% | | $15,212 | 0.95% | | 4.28% | | 1.05% | | 4.18% | | |
Year Ended | March 31, 2006 | 2.90% | | $27,537 | 0.98% | | 3.04% | | 1.08% | | 2.94% | | |
Year Ended | March 31, 2005 | 0.94% | | $13,461 | 0.98% | | 0.93% | | 1.08% | | 0.83% | | |
Year Ended | March 31, 2004 | 0.41% | | $18,804 | 0.87% | | 0.41% | | 1.05% | | 0.23% | | |
Liquid Assets Fund "I" Shares | | | | | | | | | | | | |
Year Ended | March 31, 2008 | 4.20% | | $66,018 | 0.76% | | 4.12% | | ----- | | ----- | | |
Year Ended | March 31, 2007 | 4.55% | | $64,181 | 0.80% | | 4.52% | | ----- | | ----- | | |
Year Ended | March 31, 2006 | 3.06% | | $32,616 | 0.83% | | 3.28% | | ----- | | ----- | | |
Year Ended | March 31, 2005 | 1.09% | | $10,357 | 0.83% | | 1.03% | | ----- | | ----- | | |
Year Ended | March 31, 2004 | 0.56% | | $22,734 | 0.62% | | 0.56% | | 0.80% | | 0.38% | | |
Limited Term Bond Fund | | | | | | | | | | | | |
Year Ended | March 31, 2008 | 7.15% | | $28,102 | 0.78% | | 3.98% | | 1.33% | | 3.44% | | 38% |
Year Ended | March 31, 2007 | 4.98% | | $32,270 | 0.77% | | 3.72% | | 1.30% | | 3.19% | | 33% |
Year Ended | March 31, 2006 | 2.31% | | $44,874 | 0.89% | | 3.05% | | 1.26% | | 2.68% | | 65% |
Year Ended | March 31, 2005 | (0.27%) | | $57,251 | 0.89% | | 2.72% | | 1.24% | | 2.38% | | 43% |
Year Ended | March 31, 2004 | 4.37% | | $65,881 | 0.96% | | 2.85% | | ----- | | ----- | | 74% |
Bond Fund | | | | | | | | | | | | | |
Year Ended | March 31, 2008 | 6.56% | | $66,666 | 0.75% | | 4.51% | | 1.30% | | 3.97% | | 23% |
Year Ended | March 31, 2007 | 6.00% | | $74,287 | 0.78% | | 4.33% | | 1.32% | | 3.79% | | 20% |
Year Ended | March 31, 2006 | 1.67% | | $96,123 | 0.97% | | 3.85% | | 1.27% | | 3.55% | | 29% |
Year Ended | March 31, 2005 | 1.47% | | $112,672 | 0.98% | | 3.97% | | 1.28% | | 3.67% | | 46% |
Year Ended | March 31, 2004 | 7.08% | | $125,496 | 0.99% | | 4.12% | | ----- | | ----- | | 80% |
Municipal Bond Fund | | | | | | | | | | | | |
Year Ended | March 31, 2008 | 4.00% | | $12,769 | 0.75% | | 3.38% | | 1.36% | | 2.77% | | 20% |
Year Ended | March 31, 2007 | 3.08% | | $17,417 | 0.76% | | 3.38% | | 1.33% | | 2.80% | | 50% |
Year Ended | March 31, 2006 | 1.30% | | $26,287 | 0.94% | | 3.09% | | 1.19% | | 2.84% | | 32% |
Year Ended | March 31, 2005 | (0.34%) | | $38,569 | 0.99% | | 3.15% | | 1.24% | | 2.90% | | 38% |
Year Ended | March 31, 2004 | 3.91% | | $43,520 | 0.93% | | 3.30% | | ----- | | ----- | | 25% |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
* During the period certain fees were voluntarily reduced. If such voluntary | | | | | |
fee reductions had not occurred, the ratios would have been as indicated. | | | | | |
** Total return is for the period and has not been annualized. | | | | | | | |
*** Ratios are annualized. | | | | | | | | | | | | |
| | | | | | | | | | | | |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors,
Vintage Mutual Funds, Inc.
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of the Institutional Money Market Fund, Institutional Reserves Fund, Liquid Assets Fund, Vintage Limited Term Bond Fund, Vintage Bond Fund, and Vintage Municipal Bond Fund (the “Funds”), comprising Vintage Mutual Funds, Inc., as of March 31, 2008, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for the periods presented. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of March 31, 2008, by correspondence with the custodian and brokers. 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 each of the respective Funds comprising Vintage Mutual Funds, Inc. as of March 31, 2008, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for the periods presented, in conformity with accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Kansas City, Missouri
May 16, 2008
The following table contains basic information regarding directors and officers, respectively that oversee operations of the Vintage Fund complex.
Name, Contact, Address and Age | Position held with Vintage | Term of Office and Length of Time Served | Principal Occupations During Past Five Years | Number of Portfolios Overseen by Director | Other Directorships held Outside of Vintage |
Independent Directors: | | | | | |
William J. Howard 1415 28th Street, #200 West Des Moines, IA 50266 Age 62 | Director | Since 1998 | Attorney, William J. Howard Attorney at Law from 1998 to present | 6 | None |
Debra L. Johnson Jones 1415 28th Street, #200 West Des Moines, IA 50266 Age 47 | Director | Since 1998 | President, Vodaci Technologies from 2000 to present | 6 | None |
Fred Lorber 1415 28th Street, #200 West Des Moines, IA 50266 Age 84 | Director | Since 1998 | Retired | 6 | None |
Edward J. Stanek, Ph.D. 1415 28th Street, #200 West Des Moines, IA 50266 Age 61 | Director | Since 1998 | Consultant. President and CEO, Iowa Lottery from 1985 to 2007 | 6 | None |
Steven Zumbach 1415 28th Street, #200 West Des Moines, IA 50266 Age 58 | Chair, Director | Since 1998 | Attorney, Belin, Lamson, McCormick, Zumbach, and Flynn from 1977 to present | 6 | None |
| | | | | |
Officers: | | | | | |
Jeffrey D. Lorenzen 1415 28th Street, #200 West Des Moines, IA 50266 Age 42 | President | Since 2005 | President and CIO, WB Capital. With WB Capital since 1992 | N/A | N/A |
Amy Mitchell 1415 28th Street, #200 West Des Moines, IA 50266 Age 38 | Secretary/ Treasurer | Since 1998 | Secretary, WB Capital; Director of Fund Administration, WB Capital 1990 to present | N/A | N/A |
Vera Lichtenberger 1415 28th Street, #200 West Des Moines, IA 50266 Age 56 | Chief Compliance Officer | Since 2004 | CCO, WB Capital 2004 to present; Iowa Legal Aid 2002-2004 | N/A | N/A |
The statement of Additional Information (SAI) has additional information about the Funds’ Directors and is available without charge, upon request, by calling 1-800-798-1819.
Additional Information (unaudited)
March 31, 2008
1. About Your Fund Expenses
It is important for you to understand the impact of costs on your investment. All mutual funds have operating expenses. As a shareholder of the fund, you incur ongoing costs, including management fees, distribution and service fees, and other fund expenses. Expenses, which are deducted from a fund’s investment income, directly reduce the investment return of the fund.
A fund’s expenses are expressed as a percentage of its average net assets. This figure is known as the expense ratio. The following examples are intended to help you understand the ongoing costs (in dollars) of investing in your fund and compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period and held for the entire period from October 1, 2007 to March 31, 2008. The table on the following page illustrates your fund’s costs in two ways:
A. Based on actual fund return. This section helps you to estimate the actual expenses that you paid over the period. The “Ending Account Value” shown is derived from the fund’s actual return, and the third column shows the dollar amount that would have been paid by an investor who started with $1,000 in the fund. You may use the information here, together with the amount you invested, to estimate the expenses that you paid over the period.
B. Based on hypothetical 5% return. This section is intended to help you compare your fund’s costs with those of other mutual funds. It assumes that the fund had a return of 5% before expenses during the period shown, but that the expense ratio is unchanged. In this case, because the return used is not the fund’s actual return, the results do not apply to your investment. The example is useful in making comparisons because the Securities and Exchange Commission requires all mutual funds to calculate expenses based on a 5% return. You can assess your fund’s costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds.
Your fund does not carry a “sales load” or transaction fee. The calculations assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions.
You can find more information about the fund’s expenses, including annual expense ratios for the past five years, in the Financial Highlights section of this report. For additional information on operating expenses and other shareholder costs, please refer to the appropriate fund prospectus.
Additional Information (unaudited) (continued) | | | |
March 31, 2008 | | | | | | |
| | | | | | |
| | | | | | |
| | | Beginning | Ending | Expenses Paid | Annualized |
| | | Account Value | Account Value | During Period* | Expense |
| | | 10/1/2007 | 3/31/2008 | 10/1/07-3/31/08 | Ratio* |
Based on Actual Fund Return | | | | |
Money Market Funds: | | | | | |
Institutional Money Market Fund | $ 1,000.00 | $ 1,020.06 | $ 1.17 | 0.23% |
Institutional Reserves Fund | | 1,000.00 | 1,019.27 | 1.84 | 0.37% |
Liquid Assets Fund S2 Shares | 1,000.00 | 1,016.45 | 5.85 | 1.16% |
Liquid Assets Fund T Shares | | 1,000.00 | 1,017.72 | 4.59 | 0.91% |
Liquid Assets Fund I Shares | | 1,000.00 | 1,018.48 | 3.84 | 0.76% |
Fixed Income Funds: | | | | | |
Limited Term Bond Fund | | 1,000.00 | 1,047.06 | 3.97 | 0.79% |
Bond Fund | | | 1,000.00 | 1,048.40 | 3.80 | 0.75% |
Municipal Bond Fund | | 1,000.00 | 1,023.58 | 3.78 | 0.75% |
| | | | | | |
Based on Hypothetical 5% Return | | | | |
Money Market Funds: | | | | | |
Institutional Money Market Fund | $ 1,000.00 | $ 1,023.85 | $ 1.17 | 0.23% |
Institutional Reserves Fund | | 1,000.00 | 1,023.17 | 1.85 | 0.37% |
Liquid Assets Fund S2 Shares | 1,000.00 | 1,019.20 | 5.86 | 1.16% |
Liquid Assets Fund T Shares | | 1,000.00 | 1,020.45 | 4.60 | 0.91% |
Liquid Assets Fund I Shares | | 1,000.00 | 1,021.20 | 3.84 | 0.76% |
Fixed Income Funds: | | | | | |
Limited Term Bond Fund | | 1,000.00 | 1,021.07 | 3.97 | 0.79% |
Bond Fund | | | 1,000.00 | 1,021.25 | 3.79 | 0.75% |
Municipal Bond Fund | | 1,000.00 | 1,021.25 | 3.79 | 0.75% |
| | | | | | |
*Expenses are equal to the fund's annualized expense ratio, multiplied by the average | |
account value over the period, multiplied by number of days in the most recent fiscal | |
half-year, then divided by 366. | | | | |
Additional Information (unaudited) (continued)
March 31, 2008
2. Proxy Voting Policies and Procedures, Proxy Voting Record and Schedule of Portfolio |
Holdings Form N-PX
Complete schedules of portfolio holding for the first and third quarters (Form N-Q) are available free of charge. Form N-PX is a record of proxy votes by the Funds. Since the Funds only hold non-voting securities, there are no votes recorded.
Form N-PX and the Form N-Q are available upon request:
By calling the Funds toll free at 1-800-798-1819,
| At www.sec.gov, or by phone at 1-800-SEC-0330 or, |
| By mail at Public Reference Section, SEC, Washington, D.C. 20549 (duplicating fee required). |
Additional Information (unaudited) (continued)
March 31, 2008
3. Basis for Approval of Continuation of the Investment Advisory Agreement
The Board approved the continuation of the investment advisory agreement with WB Capital at its March, 2008 meeting. The board determined that continuing the agreement was in the best interests of the Fund and its shareholders. The decision was based on an evaluation of the investment advisor on the date of the meeting, as well as the evaluation the Board undertakes throughout the year. The Board reviewed a great deal of data, including the factors summarized below, in coming to its decision. The Board based its decision on the totality of the information reviewed and discussed, with no single factor determining its decision.
The Board reviewed the quality of the investment advice. Jeffrey Lorenzen, the Chief Investment Officer for the Advisor, has been working with the Funds since 1992. The Board noted the stability of the management team, as well as their extensive experience. WB Capital (formerly Investors Management Group) has been the Fund advisor since its inception.
The Board reviewed the investment performance of the funds, comparing the performance with peer group rankings as well as benchmarks. The Board reviews the investment performance throughout the year, as well as at the meeting where it decides whether to continue the investment advisory agreement. The Board noted that throughout the year the advisor had brought to the Board its recommendations for Fund improvement, and the implementation of those recommendations resulted in better fund performance.
The Board also reviewed the advisory fees charged under the agreement, and compared those fees with fees charges by other advisors of comparable funds, as well as comparing the fees charged by the adviser to its other clients. The Board reviewed the fee waivers in effect throughout the past 12 months, and the fee waivers which were in effect at the date of the meeting. The board determined that the fees charged under the advisory agreement were reasonable in comparison to peer group fees for similar funds.
The Board also reviewed the funds total expense ratio relative to the peer group. The Board noted that the bond funds total expenses had been capped at 75 basis points since May 2006, which improved the performance of those funds. The Board reviewed the total expense ratio for each fund, and the liquidation of one of the funds (Municipal Assets Fund) over the past year. The Board discussed the need to increase distribution in the remaining funds in order to spread the costs of the expenses over a broader base. The Board determined that the total expense ratio had shown improvement and ranged from very competitive to reasonable.
The parent company of the advisor, West Bancorporation, is a publicly traded company, and does not disclose the profitability of its subsidiaries. However, the Board noted the extensive fee waivers in effect, and the decline in revenue to the advisor, with no decline in investment personnel. The Board also noted that no soft dollars arrangements are in effect for the funds.
The board will consider whether to continue the advisory agreement again in one year.
Service Providers
INVESTMENT ADVISER and
ADMINISTRATOR
WB Capital Management Inc.
1415 28th Street, Suite 200
West Des Moines, Iowa 50266-1461
DISTRIBUTOR
Foreside Distribution Services, L.P.
3435 Stelzer Road
Columbus, Ohio 43219
LEGAL COUNSEL
Cline, Williams, Wright, Johnson &
Oldfather, L.L.P
1900 U.S. Bank Building
Lincoln, Nebraska 68508
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Deloitte & Touche L.L.P.
1100 Walnut Street, Suite 3300
Kansas City, Missouri 64106
ITEM 2. CODE OF ETHICS.
(A) THE REGISTRANT HAS ADOPTED A CODE OF ETHICS THAT APPLIES TO THE REGISTRANT'S
PRINCIPAL EXECUTIVE OFFICER, PRINCIPAL FINANCIAL OFFICER, PRINCIPAL ACCOUNTING OFFICER OR
CONTROLLER, OR PERSONS PERFORMING SIMILAR FUNCTIONS, REGARDLESS OF WHETHER THESE
INDIVIDUALS ARE EMPLOYED BY THE REGISTRANT OR A THIRD PARTY.
(B) NO COMMENT REQUIRED.
(C) THE CODE OF ETHICS WAS NOT AMENDED DURING THE REPORTING PERIOD.
(D) THERE WAS NO WAIVER GRANTED UNDER THE CODE OF ETHICS DURING THE REPORTING PERIOD.
(E) NOT APPLICABLE.
(F)(1) NOT APPLICABLE.
(F)(2) NOT APPLICABLE.
(F)(3) TO REQUEST A FREE COPY OF THE VINTAGE MUTUAL FUNDS, INC. CODE OF ETHICS, PLEASE CALL 1-800-438-6375.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a)(1) The registrant’s board of directors has determined that the registrant has at least one audit committee
financial expert serving on its audit committee.
(a)(2) Debra Jones is the independent director named as the audit committee financial expert.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a)The aggregate fees for each of the last two fiscal years for professional services rendered by the principal accountant for the
audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection
with statutory and regulatory filings or engagements are listed below. These numbers include professional services for the
preparation of the Registrant’s tax returns.
(B) AUDIT FEES.
(C) TAX PREPARATION FEES.
(D)NOT APPLICABLE.
(E)NOT APPLICABLE.
(F)NOT APPLICABLE.
(G) The aggregate fees for each of the last two fiscal years for professional services rendered by the principal
accountant for the audit of the investment adviser for internal control under 17Ad-13 (transfer agency).
(H) The audit committee of the registrant’s Board of Directors considered the effect of the services performed for
the investment adviser and decided the engagement did not compromise the independence of the auditor.
ITEM 5. NOT APPLICABLE.
ITEM 6. NOT APPLICABLE.
ITEM 7. NOT APPLICABLE.
ITEM 8. NOT APPLICABLE.
ITEM 9. NOT APPLICABLE.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
THERE HAVE BEEN NO CHANGES TO THE PROCEDURES BY WHICH A SHAREHOLDER MAY RECOMMEND NOMINEES
TO THE REGISTRANT'S BOARD OF DIRECTORS.
ITEM 11. CONTROLS AND PROCEDURES.
(A) THE PRINCIPAL EXECUTIVE AND FINANCIAL OFFICERS CONCLUDED THAT THE REGISTRANT'S DISCLOSURE
CONTROLS AND PROCEDURES ARE EFFECTIVE BASED ON THEIR EVALUATION OF THE DISCLOSURE CONTROLS
AND PROCEDURES AS OF MAY 30, 2008, A DATE WITHIN 90 DAYS OF THE FILING DATE OF THIS REPORT.
(B) THERE WERE NO SIGNIFICANT CHANGES IN REGISTRANT'S INTERNAL CONTROLS 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 12. EXHIBITS.
| (A) | A CERTIFICATION FROM THE CHIEF EXECUTIVE OFFICER AND THE CHIEF FINANCIAL OFFICER ARE ATTACHED AS EXHIBITS. |
SIGNATURES
Pursuant to the requirements of the Securities 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.
VINTAGE MUTUAL FUNDS, INC.
By
Jeff Lorenzen, President
Date: May 30, 2008
Pursuant to the requirements of the Securities 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.
Signature and Title
President and Principal Executive,
Jeff Lorenzen
May 30, 2008
Treasurer and Principal Financial and Accounting Officer,
Amy M. Mitchell
May 30, 2008
