UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number _______811-05631_____________________
__________First Pacific Mutual Fund, Inc.__________
(Exact name of registrant as specified in charter)
2756 Woodlawn Drive, Suite #6-201
___________Honolulu, HI 96822-1856__________
(Address of principal executive offices) (Zip code)
Audrey C. Talley
Drinker Biddle & Reath LLP
One Logan Square
18th and Cherry Streets
__________Philadelphia, PA 19103-6996__________
(Name and address of agent for service)
Registrant's telephone number, including area code: 808-988-8088
Date of fiscal year end: September 30
Date of reporting period: March 31, 2005
Form N-CSR is to be used by management investment companies to file reports
with the Commission not later than 10 days after the transmission to
stockholders of any report that is required to be transmitted to stockholders
under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).
The Commission may use the information provided on Form N-CSR in its
regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of
the information collection burden estimate and any suggestions for reducing
the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street,
NW, Washington, DC 20549-0609. The OMB has reviewed this collection of
information under the clearance requirements of 44 U.S.C. 3507.
Item 1. Reports to Stockholders.
May 24, 2005
Dear fellow shareholder,
The April tax season has just passed, and as Hawaii taxpayers, many of
us felt the impact of paying high taxes. In fact, as a Hawaii resident, as
much as $43 of every $100 of your taxable income could go to the government in
income taxes.
According to the Tax Foundation, the average employee in Hawaii works
until April 8 to pay his taxes. In this tough economy, every dollar we save
makes a difference. We believe that investing in tax-free funds such as the
Hawaii Municipal Fund and the Hawaii Intermediate Fund can help reduce our tax
burden. As shareholders of the Funds, you are earning tax-free income and
supporting local projects designed to enrich our community. The money raised
through municipal bonds is commonly used to build schools, hospitals, roads,
airports, harbors, and water and electrical systems that serve to create jobs
and improve the quality of life here in our islands.
Interest rates are the most important of many factors which can affect
bond prices. For the period June 1, 2004 through May 24, 2005, the treasury
yield curve flattened with the Federal Reserve raising short term rates eight
times and long term rates holding steady. This accounts for the Hawaii
Municipal Fund's Investor Class six month price change of ($.09). The Hawaii
Municipal Fund Investor Class had a Net Asset Value ("NAV") of $11.19 on
October 1, 2004 and a NAV of $11.10 on March 31, 2005. The Hawaii Municipal
Fund Institutional Class had a NAV of $11.19 on October 1, 2004 and a NAV of
$11.11 on March 31, 2005. The rise in short-term rates resulted in the Hawaii
Intermediate Fund's six month price change of ($.03). The Hawaii Intermediate
Fund had a NAV of $5.21 on October 1, 2004 and a NAV of $5.18 on March 31,
2005. The primary investment strategy of the Hawaii Municipal Fund was to
purchase high quality long term Hawaii municipal bonds. Due to interest rate
concerns, the Hawaii Municipal Fund held a higher than normal percentage of
cash in its portfolio. The primary investment strategy of the Hawaii
Intermediate Fund was to purchase high quality three to ten year Hawaii
municipal bonds. Due to interest rate concerns, the Hawaii Intermediate Fund
held a higher than normal percentage of cash in its portfolio. The past six
months performance for these Funds, which is presented in this Semi-Annual
Report, was primarily a result of the implementation of these strategies. As
of March 31, 2005, 72.30% of the Hawaii Municipal Fund's portfolio was
invested in securities rated AAA by Standard & Poor's ("S&P"). As of March
31, 2005, 71.23% of the Hawaii Intermediate Fund's portfolio was invested in
securities rated AAA by S&P.
Throughout much of 2004, the Federal Funds Rate was at a historical low
of 1%, below both the annualized rate of inflation as well as the growth of
GDP. In June of 2004, in response to concerns about higher inflation, the
Federal Reserve Bank began to increase the Federal Funds Rate. Over the next
11 months, the Federal Reserve hiked rates eight times to its current 3%
level. The market's reaction suggests that these actions, among other market
events, will keep inflation pressures under control for the foreseeable
future. The recent decline in the long end of the yield curve can be
interpreted as an indication that bond investors believe inflation will be
subdued over the long-term. Still, there continues to be risks to inflation
and the bond market, among which are US fiscal policy, international
conflicts, terrorism and global economic factors.
STANDARD & POOR'S
MUNICIPAL BOND RATINGS
March 31, 2005
[the following information was presented in a pie chart]
Hawaii Municipal Fund Hawaii Intermediate Fund
AAA 72.30% AAA 71.29%
AA 1.95% A+ 3.23%
AA- 0.27% A 2.23%
A+ 4.95% BBB+ 13.56%
A 5.75% NR 9.69%
BBB+ 4.02%
BBB 3.48%
NR 7.28%
On the following pages you will find our March 31, 2005 semi-annual
report and privacy notice. The privacy notice informs you about our policy
for protecting confidential information about you and your accounts. If you
have any questions or would like us to provide information about the Funds to
your family or friends, please call us at 988-8088.
Thank you for your business. As always, we look forward to providing
you with the high level of service that you have come to expect.
Warmest Aloha,
Terrence K.H. Lee
President and CEO First Pacific Securities, Inc./Distributor
Before investing, read the prospectus carefully. Please carefully consider
the Funds' investment objectives, risks, and charges and expenses before
investing. Some income may be subject to the federal alternative minimum tax
for certain investors. The prospectus contains this and other information
about the Funds. Call 988-8088 for a free prospectus.
Funds' yields, share prices and investment returns fluctuate so that you may
receive more or less than your original investment upon redemption. Past
performance is no guarantee of future results. Hawaii Municipal Fund and
Hawaii Intermediate Fund are series of First Pacific Mutual Fund, Inc.
Your Fund's Expenses
As a Fund shareholder, you can incur two types of costs:
Transaction costs, including sales charges (loads) on Fund purchases and
redemption fees; and
Ongoing Fund costs, including management fees, distribution and service
(12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs,
sometimes referred to as operating expenses.
The following table shows ongoing costs of investing in the Fund and can help
you understand these costs and compare them with those of other mutual funds.
The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The first line (Actual) for each share class listed in the table below
provides actual account values and expenses. The "Ending Account Value" is
derived from the Fund's actual return, which includes the effect of Fund
expenses.
You can estimate the expenses you paid during the period, by following these
steps. Of course, your account value and expenses will differ from those in
this illustration:
1. Divide your account value by $1,000.
If an account had an $8,600 value, the $8,600 ? $1,000 = 8.6.
2. Multiply the result by the number under the heading "Expenses Paid
During Period."
If Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50.
In this illustration, the estimated expenses paid this period are $64.50.
Hypothetical example for Comparison with Other Funds
Information in the second line (Hypothetical) for each class in the table can
help you compare ongoing costs of investing in the Fund with those of other
mutual funds. This information may not be used to estimate the actual ending
account balance or expenses you paid during the period. The hypothetical
"Ending Account Value" is based on the actual expense ratio for each class
and an assumed 5% annual rate of return before expenses, which does not
represent the Fund's actual return. The figure under the heading "Expenses
Paid During Period" shows the hypothetical expenses your account would have
incurred under this scenario. You can compare this figure with the 5%
hypothetical examples that appear in shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing
costs and do not reflect any transaction costs, such as sales charges or
redemption fees. Therefore, the second line for each class is useful in
comparing ongoing costs only, and will not help you compare total costs of
owning different funds. Please refer to the Fund prospectus for additional
information on operating expenses.
Beginning Ending Expenses Paid
Account Value Account Value During Period*
10/01/04 03/31/05 10/01/04-03/31/05
Hawaii Municipal Fund Investor Class
Actual $1,000.00 $1,009.90 $5.00
Hypothetical $1,000.00 $1,019.89 $5.02
Hawaii Municipal Fund Institutional Class
Actual $1,000.00 $1,011.50 $3.75
Hypothetical $1,000.00 $1,021.13 $3.77
Hawaii Intermediate Fund
Actual $1,000.00 $1,006.40 $3.49
Hypothetical $1,000.00 $1,021.38 $3.52
*Expenses are equal to the annualized expense ratio for each class (1.00%,
..75% and .70%, respectively), multiplied by the average account value over the
period, multiplied by 182/366 to reflect the one-half year period.
HAWAII MUNICIPAL FUND
SCHEDULE OF INVESTMENTS
March 31, 2005 (Unaudited)
Value
Par Value (Note 1 (A))
HAWAII MUNICIPAL BONDS - 90.59%
Hawaii County
General Obligation Bonds - 6.47%
$ 300,000 5.600%, 05/01/11 $ 333,666
2,385,000 5.000%, 07/15/15 2,598,935
1,000,000 5.625%, 05/15/18 1,092,560
1,000,000 5.625%, 05/15/19 1,090,550
1,025,000 5.125%, 07/15/20 1,080,247
1,250,000 5.125%, 07/15/21 1,314,550
1,000,000 5.000%, 07/15/22 1,047,550
1,000,000 5.000%, 07/15/23 1,044,710
9,602,768
Hawaii State
General Obligation Bonds - 2.75%
135,000 6.000%, 10/01/08 147,852
120,000 5.250%, 04/01/11 127,944
2,000,000 5.250%, 07/01/18 2,147,860
1,580,000 5.125%, 02/01/22 1,664,862
4,088,518
Airport Systems Revenue Bonds - 4.60%
2,000,000 8.000%, 07/01/11 2,429,040
385,000 6.900%, 07/01/12 439,470
3,000,000 6.500%, 07/01/14 3,398,280
500,000 6.500%, 07/01/15 565,615
6,832,405
Certificates of Participation #1 - Capital District - 2.37%
1,000,000 5.000%, 05/01/16 1,055,700
555,000 5.000%, 05/01/18 581,623
1,750,000 5.500%, 05/01/20 1,886,027
3,523,350
<FN>
See accompanying notes to financial statements.
</FN>
HAWAII MUNICIPAL FUND
SCHEDULE OF INVESTMENTS - (Continued)
March 31, 2005 (Unaudited)
Par Value Value
Department of Budget & Finance Special Purpose Revenue Bonds
Hawaiian Electric Company, Inc. - 16.23%
$ 5,000,000 5.750%, 12/01/18 $ 5,440,750
125,000 6.150%, 01/01/20 137,698
500,000 5.700%, 07/01/20 537,220
625,000 6.200%, 05/01/26 649,350
600,000 5.875%, 12/01/26 623,244
9,255,000 5.650%, 10/01/27 9,965,306
6,025,000 6.200%, 11/01/29 6,741,794
24,095,362
Kapiolani Health Care System - 6.66%
400,000 6.300%, 07/01/08 404,448
1,500,000 6.000%, 07/01/11 1,573,725
1,525,000 6.400%, 07/01/13 1,705,072
700,000 6.200%, 07/01/16 736,085
3,625,000 6.000%, 07/01/19 3,662,736
1,715,000 6.250%, 07/01/21 1,803,786
9,885,852
The Queen's Health Systems - 4.57%
1,020,000 6.000%, 07/01/20 1,080,425
100,000 5.250%, 07/01/23 103,935
5,310,000 5.750%, 07/01/26 5,608,475
6,792,835
St. Francis Medical Center - 1.87%
2,765,000 6.500%, 07/01/22 2,776,724
Wilcox Hospital - 2.51%
500,000 4.900%, 07/01/05 502,065
800,000 5.250%, 07/01/13 826,912
2,245,000 5.350%, 07/01/18 2,277,552
115,000 5.500%, 07/01/28 115,352
3,721,881
Harbor Capital Improvements Revenue Bonds - 4.69%
2,000,000 5.750%, 07/01/12 2,143,780
1,580,000 5.250%, 01/01/16 1,685,892
1,665,000 5.375%, 01/01/17 1,828,137
200,000 5.750%, 07/01/17 212,360
500,000 5.500%, 07/01/19 536,305
520,000 5.750%, 07/01/29 556,124
6,962,598
<FN>
See accompanying notes to financial statements.
</FN>
HAWAII MUNICIPAL FUND
SCHEDULE OF INVESTMENTS - (Continued)
March 31, 2005 (Unaudited)
Par Value Value
Highway Revenue Bonds - 4.39%
$ 400,000 5.000%, 07/01/12 $ 433,528
1,000,000 5.600%, 07/01/14 1,055,670
1,100,000 5.000%, 07/01/16 1,177,363
3,655,000 5.000%, 07/01/22 3,861,763
6,528,324
Housing Authority Single Family
Mortgage Special Purpose Revenue Bonds - 6.39%
245,000 7.000%, 07/01/11 246,730
160,000 5.700%, 07/01/13 162,195
465,000 6.900%, 07/01/16 470,989
590,000 5.050%, 07/01/16 597,882
370,000 7.100%, 07/01/24 370,755
2,070,000 5.900%, 07/01/27 2,093,412
2,140,000 5.900%, 07/01/27 2,160,416
670,000 5.750%, 07/01/30 677,377
2,675,000 5.375%, 07/01/33 2,706,725
9,486,481
Department of Hawaiian Homelands - 2.69%
900,000 4.050%, 07/01/06 910,386
1,355,000 4.100%, 07/01/07 1,377,859
1,465,000 4.250%, 07/01/09 1,499,164
200,000 4.450%, 07/01/11 205,348
3,992,757
Housing Authority Multi-Family
Mortgage Revenue Bonds - 1.64%
2,365,000 6.100%, 07/01/30 2,432,899
University Faculty Housing - 1.59%
800,000 5.650%, 10/01/16 820,112
1,500,000 5.700%, 10/01/25 1,538,070
2,358,182
University of Hawaii - Revenue Bonds - 3.36%
750,000 5.500%, 07/15/16 829,852
4,000,000 5.125%, 07/15/32 4,160,960
4,990,812
<FN>
See accompanying notes to financial statements.
</FN>
HAWAII MUNICIPAL FUND
SCHEDULE OF INVESTMENTS - (Continued)
March 31, 2005 (Unaudited)
Par Value Value
Honolulu City & County
Board of Water Supply - 1.59%
$ 500,000 5.800%, 07/01/16 $ 524,200
750,000 5.800%, 07/01/21 786,300
1,000,000 5.000%, 07/01/23 1,048,950
2,359,450
Waste & Water System - 0.72%
1,000,000 5.250%, 07/01/18 1,073,690
General Obligation Bonds - 0.22%
200,000 7.350%, 07/01/06 211,018
105,000 5.500%, 09/01/16 111,198
322,216
Housing Authority Multi-Family Mortgage Revenue Bonds
Hale Pauahi - 0.27%
400,000 6.800%, 07/01/28 406,836
Maunakea Apartments - 0.50%
688,000 5.750%, 11/20/09 737,144
Sunset Villas - 3.46%
2,955,000 5.600%, 07/20/21 3,043,798
2,000,000 5.700%, 07/20/31 2,089,220
5,133,018
<FN>
See accompanying notes to financial statements.
</FN>
HAWAII MUNICIPAL FUND
SCHEDULE OF INVESTMENTS - (Continued)
March 31, 2005 (Unaudited)
Par Value Value
Kauai County
General Obligation Bonds - 4.33%
$ 410,000 5.850%, 08/01/07 $ 437,335
1,280,000 5.850%, 08/01/07 1,365,338
595,000 6.250%, 08/01/19 678,752
695,000 6.250%, 08/01/22 792,828
3,065,000 5.000%, 08/01/25 3,161,946
6,436,199
Housing Authority Paanau Project - 0.87%
1,300,000 7.250%, 04/01/12 1,296,048
Maui County
General Obligation Bonds - 1.25%
235,000 5.750%, 06/01/13 245,645
500,000 5.300%, 09/01/14 533,185
500,000 5.000%, 09/01/17 529,720
525,000 5.000%, 03/01/23 552,206
1,860,756
Kuakini Hawaii Health System - 3.17%
1,570,000 6.300%, 07/01/22 1,614,761
3,000,000 6.375%, 07/01/32 3,087,960
4,702,721
Hawaii Health Systems - 1.43%
760,000 3.800%, 02/15/13 747,787
1,370,000 4.700%, 02/15/19 1,374,082
2,121,869
Total Hawaii Municipal Bonds (Cost $129,512,999) 134,521,695
<FN>
See accompanying notes to financial statements.
</FN>
HAWAII MUNICIPAL FUND
SCHEDULE OF INVESTMENTS - (Continued)
March 31, 2005 (Unaudited)
Par Value Value
PUERTO RICO MUNICIPAL BONDS - 0.34%
Puerto Rico Commonwealth
Housing Finance Corp.
Multi-Family Mortgage Revenue Bonds - 0.18%
$ 85,000 7.500%, 10/01/15 $ 85,352
185,000 7.500%, 04/01/22 185,843
271,195
Single-Family Mortgage Revenue Bonds - 0.16%
230,000 6.250%, 04/01/29 234,784
Total Puerto Rico Municipal Bonds (Cost $499,886) 505,979
VIRGIN ISLANDS MUNICIPAL BONDS - 0.09%
Virgin Islands
Public Finance Authority, Series A - 0.09%
100,000 7.300%, 10/01/18 126,822
Total Virgin Islands Municipal Bonds (Cost $99,625) 126,822
Total Investments (Cost $130,112,510) (a) 91.02% 135,154,496
Other Assets Less Liabilities 8.98% 13,335,674
Net Assets 100.00% $148,490,170
(a) Aggregate cost for federal income tax purposes is $130,066,584.
At March 31, 2005, unrealized appreciation (depreciation) of
securities for federal income tax purposes is as follows:
Gross unrealized appreciation $ 5,302,167
Gross unrealized depreciation (214,255)
Net unrealized appreciation $ 5,087,912
<FN>
See accompanying notes to financial statements.
</FN>
HAWAII INTERMEDIATE FUND
SCHEDULE OF INVESTMENTS
March 31, 2005 (Unaudited)
Par Value Value
HAWAII MUNICIPAL BONDS - 87.02%
Hawaii County
General Obligation Bonds - 12.18%
$ 100,000 4.700%, 02/01/07 $ 103,246
800,000 5.000%, 07/15/11 865,656
250,000 4.000%, 07/15/13 253,690
1,222,592
Hawaii State
Airport Systems Revenue Bonds - 1.03%
100,000 5.000%, 07/01/07 103,767
Certificates of Participation - Kapolei - 2.67%
250,000 5.250%, 05/01/13 268,342
Certificates of Participation - Capitol District - 1.03%
100,000 4.750%, 05/01/07 103,550
Department of Budget & Finance
Special Purpose Revenue Bonds
Hawaiian Electric - 4.30%
400,000 4.950%, 04/01/12 431,308
Kapiolani Health Care Systems - 13.14%
100,000 5.500%, 07/01/05 201,214
1,000,000 6.400%, 07/01/13 1,118,080
1,319,294
The Queen's Health Systems - 2.89%
275,000 5.750%, 07/01/26 290,458
Wilcox Hospital - 1.03%
100,000 5.250%, 07/01/13 103,364
General Obligation Bonds - 4.24%
150,000 5.900%, 10/01/06 156,823
100,000 5.250%, 07/01/12 109,959
150,000 5.000%, 04/01/15 158,693
425,475
<FN>
See accompanying notes to financial statements.
</FN>
HAWAII INTERMEDIATE FUND
SCHEDULE OF INVESTMENTS - (Continued)
March 31, 2005 (Unaudited)
Par Value Value
Harbor Capital Improvements Revenue Bonds - 7.08%
$ 200,000 5.400%, 07/01/09 $ 212,812
70,000 5.750%, 07/01/10 77,228
210,000 5.000%, 07/01/10 224,221
185,000 5.250%, 07/01/11 196,319
710,580
Hawaiian Homeland Department - 3.54%
250,000 4.050%, 07/01/06 252,885
100,000 4.450%, 07/01/11 102,674
355,559
Highway & Transportation Authority - 2.82%
275,000 5.000%, 07/01/06 282,507
Housing Authority
Single Family Special Purpose Mortgage
Revenue Bonds - 6.78%
300,000 4.800%, 07/01/07 307,728
275,000 4.650%, 07/01/12 276,832
95,000 5.050%, 07/01/16 96,269
680,829
University of Hawaii
University Revenue Bonds - 3.09%
300,000 4.300%, 07/15/13 309,636
Hawaii Health Systems Corp. - 2.94%
300,000 3.800%, 02/15/13 295,179
Honolulu City & County
Board of Water Supply - 1.99%
200,000 VAR%, 07/01/31 200,000
General Obligation Bonds - 3.96%
100,000 5.000%, 07/01/09 107,036
170,000 4.850%, 02/01/10 179,554
100,000 5.375%, 09/01/12 110,673
397,263
Waste System Revenue - 2.21%
200,000 5.500%, 07/01/11 221,878
<FN>
See accompanying notes to financial statements.
</FN>
HAWAII INTERMEDIATE FUND
SCHEDULE OF INVESTMENTS - (Continued)
March 31, 2005 (Unaudited)
Par Value Value
Multi-Family Mortgage Purpose Revenue Bond - 1.36%
$ 127,000 5.750%, 11/20/09 $ 136,072
Kauai County
General Obligation Bonds - 3.58%
100,000 4.550%, 08/01/05 100,691
250,000 4.125%, 08/01/08 258,420
359,111
Maui County
General Obligation Bonds - 5.16%
300,000 4.650%, 03/01/07 309,657
200,000 4.250%, 03/01/12 208,252
517,909
Total Hawaii Municipal Bonds (Cost $8,630,020) 8,734,673
VIRGIN ISLANDS MUNICIPAL BONDS - 2.71%
Virgin Islands Water & Power Authority
Electric System Revenue - 2.71%
250,000 5.000%, 07/01/14 272,144
Total Virgin Islands Municipal Bonds (Cost $272,912) 272,144
Total Investments (Cost $8,902,932) (a) 89.73% 9,006,817
Other Assets Less Liabilities 10.27% 1,030,695
Net Assets 100.00% $10,037,512
(a) Aggregate cost for federal income tax purposes is $8,902,932.
At March 31, 2005, unrealized appreciation (depreciation) of
securities for federal income tax purposes is as follows:
Gross unrealized appreciation $ 137,759
Gross unrealized depreciation (33,874)
Net unrealized appreciation $ 103,885
<FN>
See accompanying notes to financial statements.
</FN>
HAWAII MUNICIPAL FUND
HAWAII INTERMEDIATE FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2005 (Unaudited)
Municipal Intermediate
Fund Fund
ASSETS
Investments at market value
(Identified cost $130,112,510 and $8,902,932,
respectively) (Note 1 (A)) $135,154,496 $9,006,817
Cash 14,321,629 928,770
Interest receivable 2,017,824 107,005
Subscriptions Receivable 19,623 -
Other assets 59,558 4,322
Total assets 151,573,130 10,046,914
LIABILITIES
Payable for investment securities purchased 2,171,590 -
Distributions payable 133,923 4,047
Redemptions payable 575,377 -
Management fee payable 63,108 3,633
Administration fee payable 2,476 182
Distribution plan payable 18,474 -
Shareholder servicing fee payable 12,383 -
Transfer agent fee payable 8,691 1,037
Accrued expenses 96,938 503
Total liabilities 3,082,960 9,402
NET ASSETS $148,490,170 $10,037,512
NET ASSETS, INVESTOR CLASS SHARES
Net assets
(Applicable to 13,114,510 and 1,939,148
shares outstanding, respectively $.01 par value,
20,000,000 shares authorized) $145,629,907 $10,037,512
NET ASSET VALUE, OFFERING AND REPURCHASE
PRICE PER SHARE, INVESTOR CLASS SHARES $11.10 $5.18
INSTITUTIONAL CLASS SHARES
Net assets
(Applicable to 257,391 shares outstanding, $.01 par value,
20,000,000 shares authorized) $ 2,860,263
NET ASSET VALUE, OFFERING AND REPURCHASE
PRICE PER SHARE, INSTITUTIONAL CLASS SHARES $11.11
NET ASSETS
At March 31, 2005, net assets consisted of:
Paid-in capital $143,164,085 $9,935,843
Undistributed net investment income 13,406 -
Accumulated net realized gain
(loss) investments 270,693 (2,216)
Net unrealized appreciation 5,041,986 103,885
$148,490,170 $10,037,512
<FN>
See accompanying notes to financial statements.
</FN>
HAWAII MUNICIPAL FUND
HAWAII INTERMEDIATE FUND
STATEMENT OF OPERATIONS
For the six months ended March 31, 2005 (Unaudited)
Municipal Intermediate
Fund Fund
INVESTMENT INCOME
Interest income $3,390,184 $167,765
Expenses
Management fee (Note 2) 368,228 23,890
Distribution costs (Notes 2 and 3) 108,333 -
Transfer agent fees (Note 2) 50,554 2,983
Shareholder services (Note 2) 72,221 -
Administration fee (Note 2) 14,443 954
Accounting fees 59,207 2,902
Legal and audit fees 22,225 4,920
Printing 13,883 477
Miscellaneous 2,563 -
Custodian fees 22,138 1,014
Insurance 4,451 954
Registration fees 7,222 477
Chief Compliance Officer fees 6,964 -
Directors fees - 518
Total expenses 752,432 39,089
Expense reimbursement (Note 2) - (4,815)
Fee reductions (Note 5) ( 20,796) (1,014)
Net expenses 731,636 33,260
Net investment income 2,658,548 134,505
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) from
security transactions 305,604 (507)
Change in unrealized appreciation
of investments (1,468,992) (98,612)
Net gain (loss) on investments (1,163,388) (99,119)
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $1,495,160 $35,386
<FN>
See accompanying notes to financial statements.
</FN>
HAWAII MUNICIPAL FUND
STATEMENT OF CHANGES IN NET ASSETS
For The Six Months Ended For The Year Ended
March 31, 2005 (Unaudited) September 30, 2004
INCREASE (DECREASE) IN NET ASSETS FROM
Operations
Net investment income $ 2,658,548 $ 5,785,097
Net realized gain on investments 305,604 186,759
Increase (decrease) in unrealized appreciation
(depreciation) of investments (1,468,992) (143,481)
Net increase in net assets resulting
from operations 1,495,160 5,828,375
Distributions to shareholders from:
Net investment income
Investor Class
($.24 and $.47 per share, respectively) (2,639,059) (5,641,162)
Institutional Class
($.25 and $.47 per share, respectively) (56,666) (128,842)
Capital Gains
Investor Class
($.01 and $.0 per share, respectively) (217,028) (115,358)
Institutional Class
($.01 and $.0 per share, respectively) (4,488) (2,381)
Total distributions to shareholders (2,917,241) (5,887,743)
Capital share transactions (a)
Increase in net assets resulting
from capital share transactions 4,136,099 1,183,048
Total increase in net assets 2,714,018 1,123,680
NET ASSETS
Beginning of period 145,776,152 144,652,472
End of period
(including undistributed net invest income of
$13,406 and $39,919, respectively) $148,490,170 $145,776,152
(a) Summary of capital share activity follows:
Investor Class Investor Class
For The Six Months Ended For The Year Ended
March 31, 2005 (Unaudited) September 30, 2004
Shares Value Shares Value
Shares sold 721,516 $ 8,082,879 1,242,013 $13,868,349
Shares issued on reinvestment
of distributions 181,329 2,028,129 361,783 4,040,714
902,845 10,111,008 1,603,796 17,909,063
Shares redeemed (514,839) (5,766,428) (1,523,997) (17,008,045)
Net increase 388,006 $ 4,344,580 79,799 $ 901,018
Institutional Class Institutional Class
For The Six Months Ended For The Year Ended
March 31, 2005 (Unaudited) September 30, 2004
Shares Value Shares Value
Shares sold 47,152 $ 528,336 47,890 $ 532,931
Shares issued on reinvestment
of distributions 804 8,997 1,541 17,218
47,956 537,333 49,431 550,149
Shares redeemed (66,546) (745,814) (24,183) (268,119)
Net increase 18,590 $(208,481) 25,248 $ 282,030
<FN>
See accompanying notes to financial statements.
</FN>
HAWAII INTERMEDIATE FUND
STATEMENT OF CHANGES IN NET ASSETS
For The Six Months Ended For The Year Ended
March 31, 2005 (Unaudited) September 30, 2004
INCREASE (DECREASE) IN NET ASSETS FROM
Operations
Net investment income $ 134,505 $ 248,677
Net realized gain (loss) on investments (507) 3,838
Increase (decrease) in unrealized appreciation
(depreciation) of investments (98,612) (49,032)
Net increase in net assets resulting
from operations 35,386 203,483
Distributions to shareholders from:
Net investment income
($.08 and $.15 per share, respectively) (134,505) (248,677)
Capital share transactions (a)
Increase in net assets resulting
from capital share transactions 1,163,926 1,369,248
Total increase in net assets 1,064,807 1,324,054
NET ASSETS
Beginning of period 8,972,705 7,648,651
End of period $10,037,512 $ 8,972,705
(a) Summary of capital share activity follows:
For The Six Months Ended For The Year Ended
March 31, 2005 (Unaudited) September 30, 2004
Shares Value Shares Value
Shares sold 423,450 $ 2,219,802 654,310 $3,403,971
Shares issued on reinvestment
of distributions 20,461 106,811 38,581 200,875
443,911 2,326,613 692,891 3,604,846
Shares redeemed (223,556) (1,162,687) (429,327) (2,235,598)
Net increase 220,355 $ 1,163,926 263,564 $ 1,369,248
<FN>
See accompanying notes to financial statements.
</FN>
HAWAII MUNICIPAL FUND
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each period)
INVESTOR CLASS
For The Six
Months Ended Years Ended September 30,
March 31, 2005 2004 2003 2002(b) 2001 2000
Net asset value (Unaudited)
Beginning of period $11.21 $11.22 $11.25 $10.89 $10.55 $10.68
Income from investment operations
Net investment income .20 .47 .47 .48 .50 .52
Net gain (loss) on securities
(both realized and unrealized) (.09) - (.03) .36 .34 (.13)
Total from investment operations .11 .47 .44 .84 .84 .39
Less distributions
Dividends from net investment income (.20) (.47) (.47) (.48) (.50) (.52)
Distributions from capital gains (.02) (.01) - ** - - -
Total distributions (.22) (.48) (.47) (.48) (.50) (.52)
End of period $11.10 $11.21 $11.22 $11.25 $10.89 $10.55
Total return 0.99% 4.33% 3.98% 7.92% 8.11% 3.79%
Ratios/Supplemental Data
Net assets,
end of period (in 000's)$145,630 $142,680 $141,838 $134,980 $121,471 $111,864
Ratio of expenses to
average net assets (a) 1.03%* 1.00% 1.01% 1.02% 1.03% .98%
Ratio of net investment income to
average net assets 3.61%* 3.98% 4.22% 4.42% 4.64% 4.83%
Portfolio turnover 7.45% 10.53% 16.40% 13.06% 22.06% 20.96%
* Annualized
** Less than $.01 per share
(a) Ratios of expenses to average net assets after the reduction of custodian
fees and other expenses under a custodian arrangement for the Investor Class
were 1.00%, .98%, .99%, .96%, .94%, and .91% for the six months ended March 31,
2005 and for the years ended September 30, 2004, 2003, 2002, 2001, and 2000,
respectively.
(b) As required, effective October 1, 2001, the Fund has adopted the
provisions of the AICPA Audit and Accounting Guide for Investment Companies and
began amortizing market discount on debt securities. Had the Fund not
amortized market discount as an adjustment to interest income, the net
investment income to average net assets would have been 4.38%. Per share and
ratios prior to October 1, 2001 have not been restated to reflect this change
in presentation.
<FN>
See accompanying notes to financial statements.
</FN>
HAWAII MUNICIPAL FUND - INSTITUTIONAL CLASS
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each period)
INSTITUTIONAL CLASS
For The Six For The For The
Months Ended Year Ended Period Ended
March 31, 2005 September 30, September 30,
(Unaudited) 2004 2003**
Net asset value
Beginning of period $11.22 $11.23 $10.91
Income from investment operations
Net investment income .22 .51 .47
Net gain (loss) on securities
(both realized and unrealized) (.09) - .32
Total from investment operations .13 .51 .79
Less distributions
Dividends from net investment income (.22) (.51) (.47)
Distributions from capital gains (.02) (.01) - ***
Total distributions (.24) (.52) (.47)
End of period $11.11 $11.22 $11.23
Total return 1.15% 4.58% 7.36%
Ratios/Supplemental Data
Net assets, end of period (in 000's) $2,860 $3,096 $2,814
Ratio of expenses to average net assets (a) .78%* .75% .76%*
Ratio of net investment income to average
net assets 3.86%* 4.23% 4.47%*
Portfolio turnover 7.45% 10.53% 16.40%
* Annualized
** Commencement of Operations was October 22, 2002
*** Less than $.01 per share
(a) Ratios of expenses to average net assets after the reduction of custodian
fees and other expenses under a custodian arrangement for the Institutional
Class were .75%, .73%, and .74% for the six months ended March 31, 2005 and for
the year and period ended September 30, 2004, and 2003, respectively.
<FN>
See accompanying notes to financial statements.
</FN>
HAWAII INTERMEDIATE FUND
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each period)
For The Six
Months Ended Years Ended September 30,
March 31, 2005 2004 2003 2002 2001 2000
Net asset value (Unaudited)
Beginning of period $5.22 $5.26 $5.27 $5.17 $5.01 $5.03
Income from investment operations
Net investment income .07 .15 .15 .16 .21 .21
Net gain (loss) on securities
(both realized and unrealized) (.04) (.04) (.01) .10 .16 (.02)
Total from investment operations .03 .11 .14 .26 .37 .19
Less distributions
Dividends from net investment income (.07) (.15) (.15) (.16) (.21) (.21)
Distributions from capital gains - - - - - -
Total distributions (.07) (.15) (.15) (.16) (.21) (.21)
End of period $5.18 $5.22 $5.26 $5.27 $5.17 $5.01
Total return 0.64% 2.21% 2.77% 5.15% 7.61% 3.97%
Ratios/Supplemental Data
Net assets,end of period (in 000's)$10,038 $8,973 $7,647 $6,345 $4,944 $4,519
Ratio of expenses to average net assets
Before expense reimbursements 0.82%* .82% .96% .84% .88% .85%
After expense reimbursements 0.72%*(a).72%(a).73%(a).74%(a).88%(a).85%(a)
Ratio of net investment income to
average net assets
Before expense reimbursements 2.69%* 2.84% 2.61% 3.15% 4.12% 4.07%
After expense reimbursements 2.79%* 2.94% 2.86% 3.15% 4.12% 4.07%
Portfolio turnover 4.88% 13.96% 20.02% 18.29% 19.28% 4.22%
* Annualized
(a) Ratios of expenses to average net assets after the reduction of custodian
fees and other expenses under a custodian arrangement were .70%, .70%, .71%,
..69%, .79%, and .77%, for the six months ended March 31, 2005 and for the years
ended September 30, 2004, 2003, 2002, 2001, and 2000, respectively.
<FN>
See accompanying notes to financial statements.
</FN>
HAWAII MUNICIPAL FUND
HAWAII INTERMEDIATE FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 2005 (Unaudited)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Hawaii Municipal Fund and Hawaii Intermediate Fund ("Funds") are each a
series of shares of First Pacific Mutual Fund, Inc. which is registered
under the Investment Company Act of 1940, as a non-diversified open-end
management company. Hawaii Municipal Fund is authorized to offer two
Classes of Shares: Investor Shares and Institutional Shares. The
Classes offer different distribution charges and shareholder servicing
fees which may affect performance.
The investment objective of the Funds is to provide a high level of
current income exempt from federal and Hawaii state income taxes,
consistent with preservation of capital and prudent investment management.
The Funds seek to achieve their objective by investing primarily in
municipal securities which pay interest that is exempt from federal and
Hawaii income taxes.
The Funds are subject to the risk of price fluctuation of the municipal
securities held in their portfolios which is generally a function of the
underlying credit rating of an issuer, the maturity length of the
securities, the securities' yield, and general economic and interest rate
conditions.
Since the Funds invest primarily in obligations of issuers located in
Hawaii, the marketability and market value of these obligations may be
affected by certain Hawaiian constitutional provisions, legislative
measures, executive orders, administrative regulations, voter initiatives,
and other political and economic developments. If any such problems
arise, they could adversely affect the ability of various Hawaiian issuers
to meet their financial obligation.
In preparing financial statements in conformity with accounting principles
generally accepted in the United States of America, management makes
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements, as well as the
reported amounts of income and expenses during the reported period.
Actual results could differ from those estimates.
(A) SECURITY VALUATION
Portfolio securities, which are fixed income securities, are valued by
an independent pricing service using market quotations, prices provided
by market-makers, or estimates of market values obtained from yield data
relating to instruments or securities with similar characteristics, in
accordance with procedures established in good faith by the Board of
Directors. Securities with remaining maturities of 60 days or less are
valued on the amortized cost basis as reflecting fair value. Securities
for which market quotations are not readily available will be valued at
their "fair value" in good faith. For these purposes, "fair value"
means the price that the Fund Accountant and the Investment Manager
reasonably expect the Fund could receive from an arm's-length buyer upon
the current sale of the securities within seven (7) days, after
considering all appropriate factors and indications of value available
to them. Such value will be cost if the Investment Manager determines
such valuation is appropriate after considering a multitude of factors
in accordance with established procedures.
HAWAII MUNICIPAL FUND
HAWAII INTERMEDIATE FUND
NOTES TO FINANCIAL STATEMENTS - (Continued)
March 31, 2005 (Unaudited)
(B) FEDERAL INCOME TAXES
It is the Funds' policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to
distribute their taxable income, if any, to their shareholders.
Therefore, no federal income tax provision is required. At September
30, 2004, the Hawaii Intermediate Fund had an unused capital loss
carryforward of $1,709 which expires in 2010.
(2) INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Lee Financial Group Inc ("LFG"), formerly First Pacific Corporation,
provides the Funds with management and administrative services pursuant to
a management agreement and administrative services agreement. In
accordance with the terms of the management agreement and the
administrative services agreement, LFG receives compensation at the annual
rate of .50% and up to .05% of each Fund's average daily net assets,
respectively. For the six months ended March 31, 2005, LFG voluntarily
waived certain management fees in the amount of $4,815 for the Hawaii
Intermediate Fund.
The Funds' distributor, First Pacific Securities, Inc. ("FPS"), a wholly-
owned subsidiary of LFG, received $108,333 and $0 for costs incurred in
connection with the sale of Hawaii Municipal Fund's shares and Hawaii
Intermediate Fund's shares, respectively (See Note 3).
First Pacific Recordkeeping, Inc. ("FPR"), a wholly-owned subsidiary of
LFG, serves as the transfer agent for the Funds. In accordance with the
terms of the transfer agent agreement, FPR receives compensation at the
annual rate of .06% of each Fund's average daily net assets. FPR also
provides the Hawaii Municipal Fund with certain clerical, bookkeeping and
shareholder services pursuant to a service agreement approved by the
Fund's directors. As compensation for these services FPR receives a fee,
computed daily and payable monthly, at an annualized rate of .10% of
average daily net assets.
Certain officers and directors of the Funds are also officers of LFG, FPS
and FPR.
(3) DISTRIBUTION COSTS
The Funds' Board of Directors, including a majority of the Directors who
are not "interested persons" of the Funds, as defined in the Investment
Company Act of 1940, adopted a distribution plan pursuant to Rule 12b-1 of
the Act. The Plan regulates the manner in which a regulated investment
company may assume costs of distributing and promoting the sales of its
shares.
The Plan provides that the Hawaii Municipal Fund Investor Class and the
Hawaii Intermediate Fund may incur certain costs, which may not exceed
..25% per annum of the Funds' average daily net assets, for payment to the
distributor for items such as advertising expenses, selling expenses,
commissions or travel, reasonably intended to result in sales of shares of
the Funds. The Hawaii Municipal Fund Institutional Class will not incur
any distribution costs.
HAWAII MUNICIPAL FUND
HAWAII INTERMEDIATE FUND
NOTES TO FINANCIAL STATEMENTS - (Continued)
March 31, 2005 (Unaudited)
(4) PURCHASES AND SALES OF SECURITIES
For the six months ended March 31, 2005, purchases and sales of securities
aggregated $10,300,478 and $17,687,502, respectively, for the Hawaii
Municipal Fund. For the six months ended March 31, 2005, purchases and
sales of securities for the Hawaii Intermediate Fund aggregated $690,144
and $428,000, respectively.
(5) CUSTODY CREDITS
Under an agreement with the Custodian Bank, custodian fees are paid by
credits for cash balances. Any remaining credits are used to offset
expenses of other vendors and service providers. During the six months
ended March 31, 2005, such reductions amounted to $20,796 and $1,014 for
the Hawaii Municipal Fund and the Hawaii Intermediate Fund, respectively.
Credits were used to offset custody fees and accounting fees.
Municipal Intermediate
Fund Fund
Custody fees $ 12,145 $ 1,014
Accounting fees 8,651 -
$ 20,796 $ 1,014
First Pacific Mutual Fund, Inc.
Privacy Notice (Unaudited)
First Pacific Mutual Fund, Inc. ("First Pacific") is dedicated to protecting
the privacy of your nonpublic personal information. We maintain information
about you in order to provide services necessary to you as a shareholder of a
First Pacific fund. We want you to understand what information we collect,
and how we use and protect it.
What Information We Collect
"Nonpublic personal information" is personally identifiable financial
information about you that we obtain in connection with selling shares of
First Pacific to you and providing services to you as a fund shareholder.
This includes, for example, your name, address, social security number, age,
and account balance. It may also include other information that you provide
to us, such as information on applications or other forms, or information
about your transactions with us.
Our Security Procedures
To maintain security of customer information, we restrict access to nonpublic
personal information and account information to our affiliates and their
employees who need to know that information to provide you products or
services. We maintain physical, electronic and procedural safeguards to guard
nonpublic personal information.
What Information We Disclose
First Pacific does not disclose nonpublic personal information about you to
any non-affiliated third party companies. We may disclose nonpublic personal
information about you that is necessary to process transactions, maintain or
service your account with us or provide records, statements or confirmations
requested to administer your account. This information may be provided to
affiliated third parties, including First Pacific Securities, Inc., First
Pacific Recordkeeping, Inc. and Lee Financial Group Inc. We may also disclose
information about you to third parties that assist us in servicing or
maintaining your mutual fund account. Otherwise, we do not disclose any
nonpublic personal information about our shareholders or former shareholders
to anyone, except as permitted by law, such as sending annual income
statements to the IRS or in response to subpoenas. The confidentiality of
your nonpublic personal information will continue to be maintained consistent
with this privacy notice even if you decide to close your accounts(s), your
account becomes inactive, or when you otherwise cease to do business with us.
Because we already limit the sharing of your nonpublic personal information as
outlined above, no action is necessary on your part to limit such sharing.
Hawaii Municipal Fund Investor Class
Hawaii Municipal Fund Institutional Class
Hawaii Intermediate Fund
Shareholder Information (Unaudited)
Proxy Voting Policies and Procedures and Proxy Voting Records
The Fund has established Proxy Voting Policies and Procedures ("Policies")
that the Fund uses to determine how to vote proxies relating to portfolio
securities. Shareholders may request copies of the Policies, as well as the
Fund's proxy voting records for the 12-month period ended June 30, free of
charge by calling (808) 988-8088, by sending a written request to Lee
Financial Group Inc., 2756 Woodlawn Drive, Suite #6-201, Honolulu, HI 96822,
or by visiting the Securities and Exchange Commission's website at
www.sec.gov.
Quarterly Statement of Investments
The Fund files a complete statement of investments with the Securities and
Exchange Commission for the first and third quarters for each fiscal year on
Form N-Q. Shareholders may view the filed Form N-Q by visiting the
Commission's website at www.sec.gov. The filed form may also be viewed and
copied at the Commission's Public Reference Room in Washington, DC.
Information regarding the operations of the Public Reference Room may be
obtained by calling 1-800-SEC-0330.
INVESTMENT MANAGER
Lee Financial Group Inc.
2756 Woodlawn Drive, Suite #6-201
Honolulu, Hawaii 96822-1856
DISTRIBUTOR
First Pacific Securities, Inc.
2756 Woodlawn Drive, Suite #6-201
Honolulu, Hawaii 96822-1856
CUSTODIAN
Union Bank of California, N.A.
475 Sansome Street, 15th Floor
San Francisco, California 94111
LEGAL COUNSEL
Drinker Biddle & Reath LLP
One Logan Square
18th and Cherry Streets
Philadelphia, Pennsylvania 19103-6996
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Tait, Weller & Baker
1818 Market Street, Suite #2400
Philadelphia, Pennsylvania 19103-2108
TRANSFER AGENT
First Pacific Recordkeeping, Inc.
2756 Woodlawn Drive, Suite #6-201
Honolulu, Hawaii 96822-1856
Item 2. Code of Ethics.
The information required by this Item is only required in an annual report on
this Form N-CSR.
Item 3. Audit Committee Financial Expert
The information required by this Item is only required in an annual report on
this Form N-CSR.
Item 4. Principal Accountant Fee and Services.
The information required by this Item is only required in an annual report on
this Form N-CSR.
Item 5. Audit Committee of Listed Registrants.
The information required by this Item is only required in an annual report on
this Form N-CSR.
Item 6. Schedule of Investments.
The Schedule of Investments is included as part of the report to shareholders
filed under Item 1 of this Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
No material changes were made to the procedures by which shareholders
recommend nominees to the board.
Item 11. Controls and Procedures.
(a) The registrant's principal executive and principal financial officers,
or person performing similar functions, has concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on their evaluation of these controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-
15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17
CFR 270.30a-3(d)) that occurred during the registrant's last fiscal
half-year (the registrant's second fiscal half-year in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting.
Item 12. Exhibits.
(a)(1) Code of Ethics is only required in an annual report on this
Form N-CSR.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the Act (17 CFR
270.30a-2(a)) are furnished herewith.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 are attached
hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) __________First Pacific Mutual Fund, Inc.__________
By (Signature and Title)* ___/s/ Terrence K.H. Lee________________
Terrence K.H. Lee, President and CEO
(principal executive officer)
Date __________June 8, 2005__________
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* ___/s/ Terrence K.H. Lee____________________
Terrence K.H. Lee, President and CEO
(principal executive)
By (Signature and Title)* ___/s/ Nora B. Simpson______________________
Nora B. Simpson, Treasurer
(principal financial officer)
Date __________June 8, 2005__________
*Print the name and title of each signing officer under his or her signature.