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 811-7582
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The Valiant Fund
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(Exact name of registrant as specified in charter)
221 Pensacola Boulevard, Venice, FL, 34285
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(Address of principal executive offices) (Zip code)
Denis R. Curcio
221 Pensacola Boulevard, Venice, FL, 34285
------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 800-242-9340
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Date of fiscal year end: 8/31/04
-------
Date of reporting period: 8/31/04
-------
The registrant, an open-end investment company registered pursuant to Section
8(b) of the Investment Company Act of 1940 (the "Act"), has not filed a
registration statement that has gone effective under the Securities Act of 1933
(the "1933 Act") because beneficial interests in the registrant are issued and
sold solely in private transactions that do not involve any public offering
within the meaning of Section 4(2) of the 1933 Act. Accordingly, this report is
not filed under Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934.
ITEM 1. REPORTS TO STOCKHOLDERS.
THE VALIANT FUND
ANNUAL REPORT
AUGUST 31, 2004
THE VALIANT FUND
Annual Report - August 31, 2004
Table of Contents
PAGE
- --------------------------------------------------------------------------------
Fees and Expenses Table 1
U.S. TREASURY MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments 3
Statement of Assets and Liabilities 4
Statement of Operations 4
Statements of Changes in Net Assets 5
Financial Highlights 6
- --------------------------------------------------------------------------------
GENERAL MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments 8
Statement of Assets and Liabilities 10
Statement of Operations 10
Statements of Changes in Net Assets 11
Financial Highlights 12
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TAX-EXEMPT MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments 14
Statement of Assets and Liabilities 16
Statement of Operations 16
Statements of Changes in Net Assets 17
Financial Highlights 18
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Notes to Financial Statements 19
Report of Independent Auditors 25
Management of the Trust 26
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FEES AND EXPENSES (UNAUDITED)
As a shareholder of the Valiant Fund, you incur advisory fees and
distribution(12b-1) fees. All other Fund expenses are paid by the advisor. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the
period and held through the six months ended August 31, 2004.
ACTUAL EXPENSES
The first line for each share class in the following tables provides information
about actual account values and actual expenses. You may use the information in
this line, together with the amount you invested, to estimate the expenses that
you paid over the period. Simply divide your account value by $1,000 (for
example, an $8,600 account value divided by $1,000 = 8.6), then multiply the
result by the number in the first line under the heading "Expenses Paid During
the Six-Month Period" to estimate the expenses you paid on your account during
this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line for each share class in the following tables provides
information about hypothetical account values and hypothetical expenses based on
the Porfolios' actual expense ratio and an assumed rate of return of 5% per year
before expenses, which is not the Portfolios' actual return. The hypothetical
account values and expenses may not be used to estimate the actual ending
account balance or expenses you paid for the period. You may use this
information to compare the ongoing costs of investing in the Funds and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the tables are meant to highlight your
ongoing costs only, and do not reflect any transactional costs such as sales
charges (loads). Therefore the second line for each share class in the table is
useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these
transactional costs were included, your costs would have been higher.
- --------------------------------------------------------------------------------------------------------------------------
Beginning Ending Annualized
Account Account Expense Ratio Expenses Paid
Value Value Based on the During the
03/01/04 08/31/04 Six-Month Period Six-Month Period*
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
U.S. TREASURY MONEY MARKET PORTFOLIO - CLASS A
Actual $1,000.00 $1,009.69 0.20% $1.01
Hypothetical (5% return before expenses) $1,000.00 $1,024.13 0.20% $1.02
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
U.S. TREASURY MONEY MARKET PORTFOLIO - CLASS B
Actual $1,000.00 $1,007.18 0.45% $2.27
Hypothetical (5% return before expenses) $1,000.00 $1,022.87 0.45% $2.29
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
U.S. TREASURY MONEY MARKET PORTFOLIO - CLASS D
Actual $1,000.00 $1,004.68 0.70% $3.53
Hypothetical (5% return before expenses) $1,000.00 $1,021.62 0.70% $3.56
- --------------------------------------------------------------------------------------------------------------------------
1
FEES AND EXPENSES CONTINUED (UNAUDITED)
- --------------------------------------------------------------------------------------------------------------------------
U.S. TREASURY MONEY MARKET PORTFOLIO - CLASS E
Actual $1,000.00 $1,001.68 1.00% $5.03
Hypothetical (5% return before expenses) $1,000.00 $1,020.11 1.00% $5.08
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
GENERAL MONEY MARKET PORTFOLIO - CLASS A
Actual $1,000.00 $1,010.50 0.20% $1.01
Hypothetical (5% return before expenses) $1,000.00 $1,024.13 0.20% $1.02
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
GENERAL MONEY MARKET PORTFOLIO - CLASS B
Actual $1,000.00 $1,007.99 0.45% $2.27
Hypothetical (5% return before expenses) $1,000.00 $1,022.87 0.45% $2.29
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
GENERAL MONEY MARKET PORTFOLIO - CLASS D
Actual $1,000.00 $1,005.49 0.70% $3.53
Hypothetical (5% return before expenses) $1,000.00 $1,021.62 0.70% $3.56
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
GENERAL MONEY MARKET PORTFOLIO - CLASS E
Actual $1,000.00 $1,002.48 1.00% $5.03
Hypothetical (5% return before expenses) $1,000.00 $1,020.11 1.00% $5.08
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
TAX-EXEMPT MONEY MARKET PORTFOLIO - CLASS A
Actual $1,000.00 $1,008.53 0.20% $1.01
Hypothetical (5% return before expenses) $1,000.00 $1,024.13 0.20% $1.02
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
TAX-EXEMPT MONEY MARKET PORTFOLIO - CLASS B
Actual $1,000.00 $1,006.03 0.45% $2.27
Hypothetical (5% return before expenses) $1,000.00 $1,022.87 0.45% $2.29
- --------------------------------------------------------------------------------------------------------------------------
* EXPENSES FOR EACH PORTFOLIO ARE CALCULATED USING THE PORTFOLIO'S ANNUALIZED
EXPENSE RATIO FOR EACH FUND, WHICH REPRESENTS THE ONGOING EXPENSES AS A
PERCENTAGE OF NET ASSETS FOR THE SIX-MONTHS ENDED 08/31/04. EXPENSES ARE
CALCULATED BY MULTIPLYING THE ANNUALIZED EXPENSE RATIO BY THE AVERAGE ACCOUNT
VALUE FOR THE PERIOD; THEN MULTIPLYING THE RESULT BY THE NUMBER OF DAYS IN THE
MOST RECENT FISCAL HALF-YEAR; AND THEN DIVIDING THAT RESULT BY THE NUMBER OF
DAYS IN THE CALENDAR YEAR. EXPENSE RATIOS FOR THE MOST RECENT FISCAL HALF-YEAR
MAY DIFFER FROM EXPENSE RATIOS BASED ON THE ONE-YEAR DATA IN THE FINANCIAL
HIGHLIGHTS.
2
VALIANT U.S. TREASURY MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments
August 31, 2004
MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
-------- -------- ------------ ------------
U.S. TREASURY OBLIGATIONS - 53.0%
U.S. TREASURY BILLS(C) - 33.1%
1.32% 9/2/04 $ 85,000,000 $ 84,996,883
1.09 10/7/04 15,000,000 14,983,725
------------
99,980,608
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U.S. TREASURY NOTES - 19.9%
5.875 11/15/04 35,000,000 35,321,763
1.625 3/31/05 10,000,000 10,018,316
1.625 4/30/05 15,000,000 14,994,201
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60,334,280
------------
TOTAL U.S. TREASURY OBLIGATIONS (AMORTIZED COST $160,314,888)(B) 160,314,888
------------
REPURCHASE AGREEMENTS - 46.9%
Bank of America, Inc., 1.55%, due 9/1/04, with a
maturity value of $30,001,292 (Collateralized by various
5.00% GNMA bonds valued at $30,126,313
with maturity dates 6/16/2031 - 7/20/2032) 30,000,000 30,000,000
Citigroup, Inc., 1.55%, due 9/1/04, with a
maturity value of $35,001,507 (Collateralized by
various 0.00% - 7.563% GNMA bonds valued at $35,382,504
with maturity dates 6/20/2009 - 7/20/2034) 35,000,000 35,000,000
J.P. Morgan Chase & Co., 1.55%, due 9/1/04, with a
maturity value of $41,801,800 (Collateralized by
various 5.00% - 5.50% GNMA bonds valued at $42,640,363
with maturity dates 8/15/2033 - 7/15/2034) 41,800,000 41,800,000
UBS Paine Webber, 1.56%, due 9/1/04, with a
maturity value of $35,001,517 (Collateralized by
various 4.00% - 4.50% GNMA bonds valued at $35,701,386
with maturity dates 7/20/2033 - 5/20/2034) 35,000,000 35,000,000
------------
TOTAL REPURCHASE AGREEMENTS (AMORTIZED COST $141,800,000) 141,800,000
------------
INVESTMENT OF CASH COLLATERAL FOR SECURITIES
LOANED - 9.0%
Bank of New York Institutional Cash Reserves Fund
(AMORTIZED COST $27,236,000)* 27,236,000
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TOTAL INVESTMENTS (AMORTIZED COST $329,350,888) (a)(b) - 108.9% 329,350,888
LIABILITIES IN EXCESS OF OTHER ASSETS - (8.9%) (26,835,761)
------------
TOTAL NET ASSETS - 100% $302,515,127
============
- ------------
(a) Cost and value for federal income tax and financial reporting purposes are
the same.
(b) Includes $27,016,587 of U.S. Treasury obligation securities loaned (Note 5).
(c) Interest rate represents yield to maturity at purchase.
* Money market mutual fund registered under the Investment Company Act of 1940,
as amended, and advised by Bank of New York. This amount represents cash
collateral received from securities lending activity (see Note 5). GNMA -
Government National Mortgage Association
VALIANT U.S. TREASURY MONEY MARKET PORTFOLIO
U.S. Treasury Obligation 53.0%
Repurchase Agreements 46.9
Investment of Cash Collateral For Securities Loaned 9.0
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108.9
Liabilities in Excess of Other Assets (8.9)
-----
100.0%
=====
See notes to financial statements
3
THE VALIANT FUND
U.S. TREASURY MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
AUGUST 31, 2004
ASSETS:
Investments, at value, including $27,016,587 $ 187,550,888
of securities loaned (Note 5 )
Repurchase agreements 141,800,000
-------------
Total investments 329,350,888
Cash 24,553
Receivables:
Interest 766,975
Other assets 7,431
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TOTAL ASSETS 330,149,847
LIABILITIES:
Payables:
Securities on loan (Note 5) $ 27,236,000
Dividends 212,567
Accrued expenses and other liabilities:
Investment manager 55,309
Distribution and shareholder servicing 130,844
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TOTAL LIABILITIES 27,634,720
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NET ASSETS $ 302,515,127
=============
COMPOSITION OF NET ASSETS:
Capital $ 302,719,190
Undistributed net investment income 47,615
Accumulated net realized loss from
investment transactions (251,678)
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NET ASSETS $ 302,515,127
=============
Class A Shares
Net assets $ 339,487
Shares outstanding 338,249
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class B Shares
Net assets $ 89,632,740
Shares outstanding 89,690,266
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class D Shares
Net assets $ 197,639,845
Shares outstanding 197,776,044
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class E Shares
Net assets $ 14,903,055
Shares outstanding 14,914,637
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED AUGUST 31, 2004
INVESTMENT INCOME:
Interest $ 4,578,612
Securities lending income - net 39,375
-------------
TOTAL INVESTMENT INCOME 4,617,987
EXPENSES:
Investment manager $ 836,116
Distribution and shareholder servicing:
Class A Shares 12,853
Class B Shares 455,216
Class D Shares 1,314,818
Class E Shares 170,261
Trustees fees 16,161
------------
Total expenses before contractual
fee reimbursements 2,805,425
Contractual fee reimbursements (159,072)
--------------
NET EXPENSES 2,646,353
--------------
NET INVESTMENT INCOME 1,971,634
--------------
NET REALIZED GAIN FROM INVESTMENT
TRANSACTIONS 406
--------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 1,972,040
==============
See notes to financial statements
4
THE VALIANT FUND
U.S. TREASURY MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, 2004 AUGUST 31, 2003
--------------- ---------------
Investment Activities:
OPERATIONS:
Net investment income $ 1,971,634 $ 4,051,122
Net realized gain from investment transactions 406 1,110
--------------- ---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 1,972,040 4,052,232
--------------- ---------------
DIVIDENDS:
Net investment income:
Class A Shares (32,008) (88,008)
Class B Shares (843,776) (1,304,296)
Class D Shares (1,073,808) (2,299,594)
Class E Shares (22,042) (359,224)
--------------- ---------------
TOTAL DIVIDENDS TO SHAREHOLDERS (1,971,634) (4,051,122)
--------------- ---------------
DECREASE IN NET ASSETS FROM CAPITAL TRANSACTIONS (145,889,098) (136,255,956)
--------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS (145,888,692) (136,254,846)
NET ASSETS:
Beginning of period 448,403,819 584,658,665
--------------- ---------------
End of period (including undistributed net investment income of $47,615
at August 31, 2004 and August 31, 2003) $ 302,515,127 $ 448,403,819
=============== ===============
See notes to financial statements
5
THE VALIANT FUND
U.S. TREASURY MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS, CLASS A SHARES
- --------------------------------------------------------------------------------
For the years ended August 31,
------------------------------------------------------------------
2004 2003 2002 2001 2000
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
INVESTMENT ACTIVITIES
Net investment income 0.009 0.012 0.021 0.05 0.06
---------- ---------- ---------- ---------- ----------
DIVIDENDS
Net investment income (0.009) (0.012) (0.021) (0.05) (0.06)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
TOTAL RETURN (a) 0.92% 1.22% 2.05% 5.30% 5.66%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 339 $ 7,159 $ 7,260 $ 10,355 $ 15,725
Ratio of expenses to average net assets, before fee waivers
and / or expense reimbursements 0.55% 0.55% 0.55% 0.55% 0.55%
Ratio of expenses to average net assets 0.20% 0.20% 0.20% 0.20% 0.20%
Ratio of net investment income to average net assets 0.87% 1.21% 2.12% 5.13% 5.55%
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS, CLASS B SHARES
- --------------------------------------------------------------------------------
For the years ended August 31,
------------------------------------------------------------------
2004 2003 2002 2001 2000
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
INVESTMENT ACTIVITIES
Net investment income 0.007 0.010 0.018 0.05 0.05
---------- ---------- ---------- ---------- ----------
DIVIDENDS
Net investment income (0.007) (0.010) (0.018) (0.05) (0.05)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
TOTAL RETURN (a) 0.67% 0.96% 1.80% 5.04% 5.39%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 89,633 $ 126,617 $ 146,246 $ 117,213 $ 41,893
Ratio of expenses to average net assets, before fee waivers
and / or expense reimbursements 0.55% 0.55% 0.55% 0.55% 0.55%
Ratio of expenses to average net assets 0.45% 0.45% 0.45% 0.45% 0.45%
Ratio of net investment income to average net assets 0.65% 0.95% 1.77% 4.44% 5.20%
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each period reported and includes
reinvestment of dividends. Total returns for periods less than one full
year are not annualized.
See notes to financial statements
6
THE VALIANT FUND
U.S. TREASURY MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS, CLASS D SHARES
- --------------------------------------------------------------------------------
For the years ended August 31,
------------------------------------------------------------------
2004 2003 2002 2001 2000
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
INVESTMENT ACTIVITIES
Net investment income 0.004 0.008 0.015 0.05 0.05
---------- ---------- ---------- ---------- ----------
DIVIDENDS
Net investment income (0.004) (0.008) (0.015) (0.05) (0.05)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
TOTAL RETURN (a) 0.42% 0.71% 1.54% 4.77% 5.13%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 197,640 $ 286,191 $ 325,896 $ 339,659 $ 269,929
Ratio of expenses to average net assets, before fee waivers
and / or expense reimbursements 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of expenses to average net assets 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net investment income to average net assets 0.41% 0.71% 1.54% 4.55% 5.04%
Ratio of expenses to average net assets, before fee waivers
and / or expense reimbursements
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS, CLASS E SHARES
- --------------------------------------------------------------------------------
For the years ended August 31,
------------------------------------------------------------------
2004 2003 2002 2001 2000
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
INVESTMENT ACTIVITIES
Net investment income 0.001* 0.005 0.013 0.04 0.05
---------- ---------- ---------- ---------- ----------
DIVIDENDS
Net investment income (0.001)* (0.005) (0.013) (0.04) (0.05)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
TOTAL RETURN (a) 0.12% 0.41% 1.24% 4.46% 4.82%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 14,903 $ 28,437 $ 105,257 $ 220,850 $ 141,693
Ratio of expenses to average net assets, before fee waivers
and / or expense reimbursements 1.00% 1.00% 1.00% 1.00% 1.00%
Ratio of expenses to average net assets 1.00% 1.00% 1.00% 1.00% 1.00%
Ratio of net investment income to average net assets 0.10% 0.48% 1.32% 4.19% 5.31%
(a) Total return is calculated assuming a purchase of shares
on the first day and a sale on the last day of each period
reported and includes reinvestment of dividends. Total
returns for periods less than one full year are not annualized.
See notes to financial statements
7
VALIANT GENERAL MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments
August 31, 2004
MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
-------- -------- ------------ ------------
COMMERCIAL PAPER - 48.3%
BANKING - 10.6%
Alliance & Leicester PLC 1.20% 10/12/04 $ 25,000,000 $ 24,964,979
Banco Bradesco SA 1.38 10/1/04 14,000,000 13,983,433
------------
38,948,412
------------
BROKER / DEALERS - 10.3%
DNB Nor Bank ASA 1.43 9/21/04 15,000,000 14,987,500
Goldman Sachs Group, Inc. 1.23 9/1/04 23,000,000 23,000,000
------------
37,987,500
------------
EDUCATION - 3.1%
Johns Hopkins University 1.67 11/17/04 11,300,000 11,300,000
------------
SPECIAL PURPOSE ENTITY - 24.3%
Clipper Receivables Corp. 1.58 9/1/04 15,000,000 15,000,000
CRC Funding LLC 1.32 9/13/04 10,000,000 9,995,233
FCAR Owner Trust 1.26 9/9/04 10,000,000 9,996,845
Lexington Parker Capital Corp. 1.48 10/12/04 15,000,000 14,974,204
Lockhart Funding LLC 1.68 11/17/04 14,500,000 14,447,277
NATC California LLC 1.52 10/18/04 15,000,000 14,969,646
Receivables Capital Corp. 1.28 9/1/04 10,000,000 10,000,000
------------
89,383,205
------------
TOTAL COMMERCIAL PAPER (AMORTIZED COST $177,619,117) 177,619,117
------------
CORPORATE OBLIGATIONS - 14.7%
FINANCIAL SERVICES - 1.3%
Labelle Capital Funding LLC* 1.65 9/2/04 1,330,000 1,330,000
Wyoming Steel Investment * 1.63 9/2/04 3,375,000 3,375,000
------------
4,705,000
------------
FOOD - 0.3%
Jacksons Food Stores, Inc.* 1.65 9/2/04 1,028,000 1,028,000
------------
HEALTH SERVICES - 0.2%
Riverview Medical Office Building* 1.66 9/2/04 900,000 900,000
------------
LEISURE - 1.3%
Commonwealth Country Club, Ltd.* 1.66 9/2/04 3,360,000 3,360,000
Sandusky Yacht Club* 1.65 9/2/04 1,230,000 1,230,000
------------
4,590,000
------------
REAL ESTATE - 5.4%
208 Associates LLC* 1.65 9/2/04 925,000 925,000
Aztec Properties LLC* 1.63 9/2/04 2,083,000 2,083,000
CMW Real Estate LLC* 1.66 9/2/04 2,300,000 2,300,000
El Dorado Enterprises of Miami FL* 1.70 9/2/04 2,000,000 2,000,000
El Dorado Enterprises of Miami FL* 1.65 9/2/04 10,195,000 10,195,000
G & J Properties II* 1.63 9/2/04 1,000,000 1,000,000
Ordeal Properties LLC* 1.65 9/2/04 1,515,000 1,515,000
------------
20,018,000
------------
SPECIAL PURPOSE ENTITY - 6.2%
Approach Partnership* 1.65 9/2/04 1,105,000 1,105,000
Barry-Wehmiller Group* 1.63 9/2/04 1,180,000 1,180,000
Best One Tire & Service* 1.63 9/2/04 955,000 955,000
Butler County, Surgical Properties* 1.63 9/2/04 1,400,000 1,400,000
Chuo Mubea Suspen Compon* 1.63 9/2/04 500,000 500,000
Exal Corp.* 1.63 9/2/04 1,500,000 1,500,000
FE LLC* 1.58 9/2/04 1,000,000 1,000,000
GCG Portage LLC* 1.70 9/2/04 1,285,000 1,285,000
ISO Building LLC* 1.63 9/2/04 1,000,000 1,000,000
K. C. Jordan & Associates* 1.63 9/2/04 725,000 725,000
Michigan Equity Group* 1.63 9/2/04 1,375,000 1,375,000
MMR Development Co.* 1.63 9/2/04 1,080,000 1,080,000
Physicians Center LP* 1.65 9/2/04 3,570,000 3,570,000
Taylor Steel, Inc.* 1.65 9/2/04 2,310,000 2,310,000
United Transportation Union* 1.63 9/2/04 1,125,000 1,125,000
Village Enterprises* 1.65 9/2/04 1,000,000 1,000,000
Wellington Green LLC* 1.65 9/2/04 1,890,000 1,890,000
------------
23,000,000
------------
TOTAL CORPORATE OBLIGATIONS (AMORTIZED COST $54,241,000) 54,241,000
------------
See notes to financial statements
8
CERTIFICATE OF DEPOSIT - 4.1%
BANKING - 4.1%
Citibank 1.46 9/20/04 $ 15,000,000 $ 15,000,000
------------
TOTAL CERTIFICATE OF DEPOSIT (AMORTIZED COST $15,000,000) 15,000,000
------------
MUNICIPAL NOTES AND BONDS - 9.9%
ALABAMA - 5.1%
Auburn Taxable Revenue, Series B* 1.45 9/1/04 6,535,000 6,535,000
Meadow Brook* 1.65 9/2/04 12,170,000 12,170,000
------------
18,705,000
------------
ILLINOIS - 1.2%
Upper Illinois River Valley Development Authority* 1.65 9/2/04 4,595,000 4,595,000
------------
MICHIGAN - 0.5%
Michigan City Industrial Economic Development Revenue* 1.63 9/2/04 1,705,000 1,705,000
------------
NEW YORK - 2.3%
Baird Properties LLC* 1.75 9/2/04 2,210,000 2,210,000
Cotswold Village Associates LLC* 1.65 9/2/04 4,900,000 4,900,000
IHA Capital Development Corp.* 1.63 9/2/04 1,500,000 1,500,000
------------
8,610,000
------------
OHIO - 0.8%
Hopkins Waterhouse LLC* 1.66 9/2/04 980,000 980,000
Mercer County, HealthCare Facilities* 1.64 9/3/04 1,960,000 1,960,000
------------
2,940,000
------------
TOTAL MUNICIPAL NOTES AND BONDS (AMORTIZED COST $36,555,000) 36,555,000
------------
UNITED STATES GOVERNMENT AGENCY - 2.7%
Federal Home Loan Bank 2.50 7/15/05 5,000,000 5,000,000
Federal National Mortgae Association 1.75 5/23/05 5,000,000 5,000,000
------------
TOTAL UNITED STATES GOVERNMENT AGENCY (AMORTIZED COST $10,000,000) 10,000,000
------------
REPURCHASE AGREEMENT - 20.3%
Bank of America, Inc., 1.55%, due 9/01/04,
with a maturity value of $74,703,216
(Collateralized by various 5.00% - 6.00% GNMA bonds valued at $75,048,157
with maturity dates 5/20/2030 - 12/20/2033) 74,700,000 74,700,000
------------
TOTAL REPURCHASE AGREEMENTS (AMORTIZED COST $74,700,000) 74,700,000
------------
TOTAL INVESTMENTS (AMORTIZED COST $368,115,117) (a) - 100.0% 368,115,117
OTHER ASSETS LESS LIABILITIES - 0.0% 37,374
------------
TOTAL NET ASSETS - 100% $368,152,491
============
- ------------
* Variable rate investment. Securities payable on demand at par including
accrued interest (usually within seven days notice) and unconditionally
secured as to principal and interest by letters of credit or other credit
support agreements from major banks. The interest rates are adjustable and
are based on bank prime rates or other interest rate adjustment indeces.
The rate shown represents the rate in effect at August 31, 2004. The
maturity date shown reflects next rate change date.
(a) Cost and value for federal income tax and financial reporting purposes are
the same.
GNMA - Government National Mortgage Association
LLC - Limited Liability Corporation
LP - Limited Partnership
PLC - Public Limited Company
SA - Sociedad Anonyma (French, Spanish)
VALIANT GENERAL MONEY MARKET PORTFOLIO
Commercial Paper 48.3%
Corporate Obligations 14.7
Certificate of Deposit 4.1
Municipal Notes and Bonds 9.9
United States Government Agency 2.7
Repurchase Agreement 20.3
-----
100.0
Other Assets Less Liabilities 0.0
-----
100.0%
=====
See notes to financial statements
9
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
AUGUST 31, 2004
ASSETS:
Investments, at value $ 293,415,117
Repurchase agreements 74,700,000
-------------
Total investments 368,115,117
Cash 87,692
Receivables:
Interest 399,811
Other assets 446
-------------
TOTAL ASSETS 368,603,066
LIABILITIES:
Payables:
Dividends $ 330,139
Accrued expenses and other liabilities:
Investment manager 60,509
Distribution and shareholder servicing 59,927
-------------
TOTAL LIABILITIES 450,575
-------------
NET ASSETS $ 368,152,491
=============
COMPOSITION OF NET ASSETS:
Capital $ 368,234,912
Accumulated net realized loss from
investment transactions (82,421)
-------------
NET ASSETS $ 368,152,491
=============
Class A Shares
Net assets $ 256,922,846
Shares outstanding 256,971,763
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class B Shares
Net assets $ 5,063,647
Shares outstanding 5,064,723
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class D Shares
Net assets $ 59,116,388
Shares outstanding 59,131,069
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class E Shares
Net assets $ 47,049,610
Shares outstanding 47,067,358
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED AUGUST 31, 2004
INVESTMENT INCOME:
Interest $ 5,748,434
-------------
TOTAL INVESTMENT INCOME 5,748,434
EXPENSES:
Investment manager $ 965,507
Distribution and shareholder servicing:
Class A Shares 1,262,802
Class B Shares 21,336
Class D Shares 334,741
Class E Shares 391,241
Trustees fees 18,613
------------
Total expenses before contractual
fee reimbursements 2,994,240
Contractual fee waivers and
expense reimbursements (1,287,511)
-------------
NET EXPENSES 1,706,729
-------------
NET INVESTMENT INCOME 4,041,705
-------------
NET REALIZED LOSS FROM INVESTMENT
TRANSACTIONS (1,354)
-------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 4,040,351
=============
See notes to financial statements.
10
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, 2004 AUGUST 31, 2003
--------------- ---------------
INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income $ 4,041,705 $ 7,740,349
Net realized gain (loss) from investment transactions (1,354) 14,510
--------------- ---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 4,040,351 7,754,859
--------------- ---------------
DIVIDENDS:
Net investment income:
Class A Shares (3,564,854) (6,870,152)
Class B Shares (45,082) (126,461)
Class D Shares (333,462) (327,768)
Class E Shares (98,307) (415,968)
--------------- ---------------
TOTAL DIVIDENDS TO SHAREHOLDERS (4,041,705) (7,740,349)
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL TRANSACTIONS (139,806,527) 10,146,226
--------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS (139,807,881) 10,160,736
NET ASSETS:
Beginning of period 507,960,372 497,799,636
--------------- ---------------
End of period $ 368,152,491 $ 507,960,372
=============== ===============
See notes to financial statements.
11
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS, CLASS A SHARES
- --------------------------------------------------------------------------------
For the years ended August 31,
------------------------------------------------------------------
2004 2003 2002 2001 2000
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
INVESTMENT ACTIVITIES
Net investment income 0.010 0.013 0.022 0.05 0.06
---------- ---------- ---------- ---------- ----------
DIVIDENDS
Net investment income (0.010) (0.013) (0.022) (0.05) (0.06)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
TOTAL RETURN (a) 1.01% 1.29% 2.24% 5.52% 5.97%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 256,923 $ 364,392 $ 357,676 $ 380,513 $ 394,118
Ratio of expenses to average net assets, before fee waivers
and / or expense reimbursements 0.55% 0.55% 0.55% 0.55% 0.55%
Ratio of expenses to average net assets 0.20% 0.20% 0.20% 0.20% 0.20%
Ratio of net investment income to average net assets 0.99% 1.28% 2.22% 5.36% 5.89%
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS, CLASS B SHARES
- --------------------------------------------------------------------------------
For the years ended August 31,
------------------------------------------------------------------
2004 2003 2002 2001 2000
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
INVESTMENT ACTIVITIES
Net investment income 0.008 0.010 0.019 0.05 0.06
---------- ---------- ---------- ---------- ----------
DIVIDENDS
Net investment income (0.008) (0.010) (0.019) (0.05) (0.06)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
TOTAL RETURN (a) 0.76% 1.04% 1.98% 5.25% 5.71%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 5,064 $ 10,620 $ 15,719 $ 9,169 $ 4,793
Ratio of expenses to average net assets, before fee waivers
and / or expense reimbursements 0.50% 0.55% 0.55% 0.55% 0.55%
Ratio of expenses to average net assets 0.45% 0.45% 0.45% 0.45% 0.45%
Ratio of net investment income to average net assets 0.74% 1.03% 1.91% 4.91% 5.61%
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each period reported and includes
reinvestment of dividends. Total returns for periods less than one full
year are not annualized.
See notes to financial statements.
12
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS, CLASS D SHARES
- --------------------------------------------------------------------------------
For the period
September 27,
For the year ended August 31, 1999 to
---------------------------------------------------- August 31,
2004 2003 2002 2001 2000 (a)
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
INVESTMENT ACTIVITIES
Net investment income 0.005 0.007 0.016 0.05 0.05
---------- ---------- ---------- ---------- ----------
DIVIDENDS
Net investment income (0.005) (0.007) (0.016) (0.05) (0.05)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
TOTAL RETURN (B) 0.50% 0.79% 1.73% 4.99% 5.10%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 59,116 $ 74,943 $ 40,662 $ 16,861 $ 10,121
Ratio of expenses to average net assets, before fee waivers
and / or expense reimbursements 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of expenses to average net assets 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net investment income to average net assets 0.50% 0.73% 1.55% 4.81% 5.53%
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS, CLASS E SHARES
- --------------------------------------------------------------------------------
For the years ended August 31,
------------------------------------------------------------------
2004 2003 2002 2001 2000
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
INVESTMENT ACTIVITIES
Net investment income 0.002 0.005 0.014 0.05 0.05
DIVIDENDS
Net investment income (0.002) (0.005) (0.014) (0.05) (0.05)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
TOTAL RETURN (B) 0.20% 0.49% 1.42% 4.68% 5.13%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 47,050 $ 58,005 $ 83,742 $ 99,984 $ 89,270
Ratio of expenses to average net assets, before fee waivers
and / or expense reimbursements 1.00% 1.00% 1.00% 1.00% 1.00%
Ratio of expenses to average net assets 1.00% 1.00% 1.00% 1.00% 1.00%
Ratio of net investment income to average net assets 0.20% 0.51% 1.45% 4.23% 5.18%
(a) Commencement of operations.
(b) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each period reported and includes
reinvestment of dividends. Total returns for periods less than one full
year are not annualized.
(c) Annualized.
See notes to financial statements.
13
VALIANT TAX-EXEMPT MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments
August 31, 2004
MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
-------- -------- ------------ ------------
COMMERCIAL PAPER - 17.6%
FLORIDA - 10.4%
City of Gainesville, Series C 1.10 9/2/04 $ 5,000,000 $ 5,000,000
Sarasota County Public Hospital, LOC Suntrust Bank 1.12 9/17/04 6,150,000 6,150,000
Sunshine State, Series A 1.13 11/10/04 2,000,000 2,000,000
Sunshine State, Series F 1.21 12/10/04 1,100,000 1,100,000
------------
14,250,000
------------
GEORGIA - 3.6%
Oglethorpe Power Corp. 1.17 10/5/04 5,000,000 5,000,000
------------
MICHIGAN - 2.4%
State of Michigan 1.10 12/1/04 3,250,000 3,250,000
------------
PENNSYLVANIA - 1.2%
Delaware County 1.30 10/26/04 1,700,000 1,700,000
------------
TOTAL COMMERCIAL PAPER (AMORTIZED COST $24,200,,000) 24,200,000
------------
MUNICIPAL BONDS AND NOTES - 21.0%
FLORIDA - 2.1%
Kissimmee Utility Authority Electric System Revenue 2.00 10/1/04 1,910,000 1,911,537
Manatee County HFA 2.00 10/1/04 1,000,000 1,000,805
------------
2,912,342
------------
GEORGIA - 3.6%
Rome County 1.75 12/31/04 5,000,000 5,004,079
------------
LOUISIANA - 1.5%
Plaquemines LA Port Habour and Terminal District Port Facility Revenue,
Project B 1.08 3/15/05 2,000,000 2,000,000
------------
NEW HAMPSHIRE -7.6%
Cheshire County 1.15 12/24/04 6,500,000 6,500,986
Strafford County TAN 1.75 12/30/04 4,000,000 4,008,935
------------
10,509,921
------------
SOUTH CAROLINA - 2.9%
Charleston County School District 2.00 11/4/04 4,000,000 4,007,237
------------
TEXAS - 3.3%
Houston Independent School District 1.73 6/15/05 3,000,000 3,000,000
Richardson Independent School District General Obligation Note 1.10 4/1/05 1,500,000 1,500,000
------------
4,500,000
------------
TOTAL MUNICIPAL BONDS AND NOTES (AMORTIZED COST $28,933,579) 28,933,579
------------
VARIABLE MUNICIPAL BONDS* - 61.2%
FLORIDA - 43.9%
Bradford County, HFA, Series B 1.26 9/1/04 5,000,000 5,000,000
Broward County, HFA, Multi-Family, LOC Bank One 1.33 9/1/04 2,600,000 2,600,000
Collier County, Health Care Facilities IDR 1.30 9/2/04 4,000,000 4,000,000
Collier County, Health Care Facilities IDR, LOC Fifth Third Bank 1.32 9/3/04 2,000,000 2,000,000
Dade County, Water & Sewer Systems Revenue 1.28 9/1/04 6,600,000 6,600,000
Florida HFA, Buena Vista, Multi-Family 1.26 9/1/04 1,000,000 1,000,000
Florida HFA, Multi-Family, LOC Credit Suisse First Boston 1.33 9/1/04 2,400,000 2,400,000
Florida Housing Finance Corp., Charleston, Series I-A,
Multi-Family Revenue 1.40 9/2/04 2,375,000 2,375,000
Florida Housing Finance Corp., Cypress Lake, Multi-Family Revenue 1.34 9/2/04 3,500,000 3,500,000
Florida State Municipal Power Agency Revenue, Stanton Project 1.35 9/1/04 1,000,000 1,000,000
Halifax Hospital Medical Center, Health Care Facilities Revenue 1.33 9/1/04 1,200,000 1,200,000
Jacksonville Health Facilities Authority Hospital Revenue 1.27 9/1/04 2,400,000 2,400,000
Lakeland Energy Systems Revenue 1.31 9/1/04 3,000,000 3,000,000
Palm Beach County Revenue, Norton Gallery, Inc. Project 1.30 9/1/04 4,000,000 4,000,000
Polk County School Board COP 1.30 9/2/04 2,000,000 2,000,000
Port Orange Palmer College Project Revenue 1.33 9/2/04 6,500,000 6,500,000
St. Johns County, HFA Multi-Family 1.30 9/1/04 7,600,000 7,600,000
Tampa Health Care Facilities Revenue (Lifelink Foundation, Inc. Project) 1.33 9/1/04 1,500,000 1,500,000
Volusia County, Health Facilities Authority Revenue 1.33 9/2/04 1,700,000 1,700,000
------------
60,375,000
------------
See notes to financial statements.
14
VALIANT TAX-EXEMPT MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments
August 31, 2004
MASSACHUSETTS - 3.3%
Massachusetts State Health & Education Facility Authority Revenue,
Series GG-1 1.30 9/2/04 4,500,000 4,500,000
------------
NEBRASKA - 0.9%
Lancaster County, Nebraska Hospital Authority Health Facility Revenue,
Series A 1.35 9/1/04 1,200,000 1,200,000
------------
NEW YORK - 1.9%
Puttable Floating Option Tax-Exempt Receipts(a) 1.90 6/16/05 2,625,000 2,625,000
------------
PUERTO RICO - 5.0%
Commonwealth Infrastructure Financing Authority 1.34 9/2/04 5,370,000 5,370,000
Commonwealth Infrastructure Financing Authority 1.31 9/2/04 1,495,000 1,495,000
------------
6,865,000
------------
SOUTH CAROLINA - 2.9%
Piedmont Municipal Power Agency Electricity Revenue 1.30 9/1/04 4,000,000 4,000,000
------------
TEXAS - 1.1%
Angelina & Neches River Authority, Solid Waste Revenue, Series C 1.35 9/1/04 1,600,000 1,600,000
------------
UTAH - 2.2%
Intermountain Power Supply Revenue, Series F(a) 0.92 9/15/04 3,000,000 3,000,000
------------
TOTAL VARIABLE MUNICIPAL BONDS (AMORTIZED COST $84,165,000) 84,165,000
------------
TOTAL INVESTMENTS (AMORTIZED COST $137,298,579) (b) - 99.8% 137,298,579
Other Assets less Liabilities - 0.2% 289,542
------------
TOTAL NET ASSETS - 100% $137,588,121
============
- ----------
* Variable rate investment. Securities payable on demand at par including
accrued interest (usually within seven days notice) and unconditionally
secured as to principal and interest by letters of credit or other credit
support agreements from major banks. The interest rates are adjustable and
are based on bank prime rates or other interest rate adjustment indeces.
The rate shown represents the rate in effect at August 31, 2004. The
maturity date shown reflects next rate change date.
(a) These instruments are payable on demand and are secured by letters of
credit or other credit support agreements from major banks.
(b) Cost and value for federal income tax and financial reporting purposes are
the same.
COP - Certificates of Participation
HFA - Housing Finance Authority
IDR - Industrial Development Revenue
LOC - Letter of Credit
TAN - Tax Anticipation Note
VALIANT TAX-EXEMPT MONEY MARKET PORTFOLIO
Commercial Paper 17.6%
Variable Municipal Bonds 61.2
Municipal Notes and Bonds 21.0
-----
99.8
Other Assets less Liabilities 0.2
-----
100.0%
=====
See notes to financial statements.
15
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
AUGUST 31, 2004
ASSETS:
Investments, at value $ 137,298,579
Cash 69,269
Receivables:
Interest 365,057
Other assets 1,111
-------------
TOTAL ASSETS 137,734,016
-------------
LIABILITIES:
Payables:
Dividends $ 116,943
Accrued expenses and other liabilities:
Investment manager 25,063
Distribution and shareholder servicing 3,889
------------
TOTAL LIABILITIES 145,895
-------------
NET ASSETS $ 137,588,121
=============
COMPOSITION OF NET ASSETS:
Capital $ 137,646,998
Accumulated net realized loss from
investment transactions (58,877)
-------------
NET ASSETS $ 137,588,121
=============
Class A Shares
Net Assets $ 123,387,881
Shares outstanding 123,521,892
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class B Shares
Net Assets $ 14,200,240
Shares outstanding 14,213,477
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED AUGUST 31, 2004
INVESTMENT INCOME:
Interest $ 1,675,418
-------------
TOTAL INVESTMENT INCOME 1,675,418
EXPENSES:
Investment manager $ 326,755
Distribution and shareholder servicing:
Class A Shares 551,031
Class B Shares 20,787
Trustees fees 5,225
------------
Total expenses before contractual
fee reimbursements 903,798
Contractual fee waivers and
expense reimbursements (562,195)
-------------
NET EXPENSES 341,603
-------------
NET INVESTMENT INCOME 1,333,815
-------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 1,333,815
=============
See notes to financial statements.
16
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, 2004 AUGUST 31, 2003
--------------- ---------------
INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income $ 1,333,815 $ 1,954,685
--------------- ---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 1,333,815 1,954,685
--------------- ---------------
DIVIDENDS:
Net investment income:
Class A Shares (1,297,979) (1,953,468)
Class B Shares (35,836) --
Class D Shares -- (1,217)
--------------- ---------------
TOTAL DIVIDENDS TO SHAREHOLDERS (1,333,815) (1,954,685)
--------------- ---------------
DECREASE IN NET ASSETS FROM CAPITAL TRANSACTIONS (4,930,918) (32,299,508)
--------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS (4,930,918) (32,299,508)
NET ASSETS:
Beginning of period 142,519,039 174,818,547
--------------- ---------------
End of period $ 137,588,121 $ 142,519,039
=============== ===============
See notes to financial statements.
17
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS, CLASS A SHARES
- --------------------------------------------------------------------------------
For the years ended August 31,
------------------------------------------------------------------
2004 2003 2002 2001 2000
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
INVESTMENT ACTIVITIES
Net investment income 0.008 0.014 0.015 0.03 0.04
---------- ---------- ---------- ---------- ----------
DIVIDENDS
Net investment income (0.008) (0.014) (0.015) (0.03) (0.04)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
TOTAL RETURN (a) 0.83% 1.03% 1.49% 3.42% 3.67%
Ratios/Supplementary Data:
Net Assets at end of period (000) $ 123,388 $ 142,519 $ 174,104 $ 141,464 $ 207,183
Ratio of expenses to average net assets, before fee waivers
and / or expense reimbursements 0.55% 0.55% 0.55% 0.55% 0.55%
Ratio of expenses to average net assets 0.20% 0.20% 0.20% 0.20% 0.20%
Ratio of net investment income to average net assets 0.83% 1.02% 1.47% 3.39% 3.57%
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS, CLASS B SHARES
- --------------------------------------------------------------------------------
For the period
February 25, 2004(c)
through
31-Aug-04
--------------------
Net Asset Value, Beginning of Period $ 1.000
--------------------
INVESTMENT ACTIVITIES
Net investment income 0.003
DIVIDENDS
Net investment income (0.003)
--------------------
NET ASSET VALUE, END OF PERIOD $ 1.000
====================
TOTAL RETURN (A) 0.31%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 14,200
Ratio of expenses to average net assets, before fee waivers
and / or expense reimbursements 0.55% (b)
Ratio of expenses to average net assets 0.45% (b)
Ratio of net investment income to average net assets 0.60% (b)
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each period reported and includes
reinvestment of dividends. Total returns for periods less than one full
year are not annualized.
(b) Annualized.
(c) Commencement of share class.
See notes to financial statements.
18
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2004
1. ORGANIZATION:
The U.S. Treasury Money Market Portfolio, General Money Market
Portfolio, Tax-Exempt Money Market Portfolio, and U.S. Treasury Income
Portfolio are separate portfolios of The Valiant Fund. The Valiant Fund
(the "Trust") is a Massachusetts business trust, organized on January 29,
1993 and is registered under the Investment Company Act of 1940, as
amended (the "Act"), as an open-end management investment company. The
Trust is authorized to offer five classes of shares: Class A, Class B,
Class C (has not commenced operations), Class D and Class E. The five
classes are identical, except as to the services offered to, and the
expenses borne, by each class. This report covers U.S. Treasury Money
Market Portfolio, General Money Market Portfolio, and Tax-Exempt Money
Market Portfolio (referred to individually as a "Portfolio" and
collectively as the "Portfolios") for the year ending August 31, 2004. A
separate report is issued for the U.S. Treasury Income Portfolio for the
year ending August 31, 2004.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies
followed by the Portfolios in the preparation of their financial
statements. The policies are in conformity with generally accepted
accounting principles in the United States of America. The preparation of
financial statements requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of
the financial statements and the reported amounts of income and expenses
for the period. Actual results could differ from those estimates.
SECURITY VALUATION:
Investments of the Portfolios are valued at amortized cost, which
approximates value. Under the amortized cost method, discount or premium,
if any, is accreted or amortized, respectively, on a straight-line basis
to the maturity of the security.
SECURITIES TRANSACTIONS AND RELATED INCOME:
Securities transactions are recorded on trade date. Security gains
and losses are calculated on the identified cost basis. Interest income is
recognized on the accrual basis and includes, where applicable, the
amortization or accretion of a premium or a discount.
REPURCHASE AGREEMENTS:
Each Portfolio may enter into repurchase agreements with an entity
whose creditworthiness has been reviewed and found satisfactory by the
Portfolios' Sub-Advisor, Reich & Tang Asset Management L.P. The repurchase
price generally equals the price paid by a Portfolio 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. The seller,
under a repurchase agreement, is required to maintain the appropriate
collateral levels held pursuant to the agreement, with a market value
equal to or greater than the repurchase price (including accrued
interest). Collateral subject to repurchase agreements is held by the
Portfolios' custodian, either physically or in book entry form.
EXPENSE ALLOCATION:
Expenses directly attributable to a Portfolio are charged to that
Portfolio. Trust expenses are allocated proportionately among each
Portfolio within the Trust in relation to the net assets of each Portfolio
or another reasonable basis. Expenses specific to a class are charged to
that class.
19
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 2004
DIVIDENDS TO SHAREHOLDERS:
The Portfolios' declare all net investment income daily as dividends
to their shareholders and distribute such dividends monthly. Additional
dividends are also paid to the Portfolios' shareholders to the extent
necessary to avoid the federal excise tax on certain undistributed income
and net realized gains of registered investment companies.
The amount of dividends from net investment income and net realized
gains are determined in accordance with U.S. income tax regulations, which
may differ from the U.S. generally accepted accounting principles. 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 among the components of net assets; temporary
differences do not require reclassification.
FEDERAL TAXES:
Each Portfolio is a separate taxable entity for federal tax
purposes. Each Portfolio has qualified and intends to qualify each year as
a "regulated investment company" under Subchapter M of the Internal
Revenue Code, as amended, and distribute substantially all of its taxable
net investment income and net realized gains, if any, to their
shareholders. Accordingly, no provision for federal income excise tax is
required.
3. RELATED PARTY TRANSACTIONS:
INVESTMENT ADVISER:
Integrity Management & Research, Inc. (the "Manager"), a wholly
owned subsidiary of Integrity Investments, Inc., serves as the Investment
Adviser to the Trust. The Trust pays the Manager a fee, computed daily and
paid monthly, at the annual rate of 0.20% of the average daily net assets
of each Portfolio.
Under terms of the Management Agreement, all expenses incurred by
the Portfolios are paid directly by the Manager, except for distribution
and shareholder servicing fees, Trustee fees and other miscellaneous
non-recurring fees.
CUSTODIAN:
The Bank of New York, ("Custodian") is the Custodian for each
Portfolio under custodian agreements with respect to each Portfolio.
The Bank of New York also provides fund accounting and
administrative services pursuant to a Fund Accounting Agreement Dated
September 1, 2001 (the "Fund Accounting Agreement") between the Trust and
The Bank of New York. The Fund Accounting Agreement's provisions for
termination, limitation of liability and indemnification are similar to
the Trust's Administration Agreement. Under the Fund Accounting Agreement,
The Bank of New York maintains all Trust books and records required under
Rule 31a-1 under the Investment Company Act of 1940, as amended, performs
daily accounting services and provides additional fund reporting and
record keeping services.
20
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 2004
DISTRIBUTION AND SHAREHOLDER SERVICING PLAN:
Integrity Investments, Inc. (the "Distributor"), an affiliate of the
manager, acts as exclusive distributor of the Trust's shares. The Trust
has adopted distribution and shareholder servicing plans for each class of
shares offered (together, the "Plans") pursuant to Rule 12b-1 of the 1940
Act. For its services, the Distributor is authorized to receive a fee,
computed daily and paid monthly, based on the average daily net assets of
each class, at the following annual percentage rates:
CLASS FEE RATE
----- --------
Class A Shares 0.35%
Class B Shares 0.35
Class C Shares 0.65
Class D Shares 0.50
Class E Shares 0.80
EXPENSE LIMITATIONS:
The Portfolios' Adviser and Distributor have contractually agreed to
reimburse expenses and waive certain distribution fees necessary to limit
total expenses to the following rates until December 31, 2003:
CLASS EXPENSE LIMITATION
----- ------------------
Class A Shares 0.20%
Class B Shares 0.45
Class C Shares 0.85
Class D Shares 0.70
Class E Shares 1.00
FEE REIMBURSEMENTS:
Expenses reimbursed and fees waived by the Adviser and Distributor
are set forth on each Portfolio's Statement of Operations.
For the year ending August 31, 2004, the Adviser and Distributor
waived $159,072 of fees and expenses for the U.S. Treasury Money Market
Portfolio. These expenses related to $12,853 of fees attributable to Class
A, $130,058 attributable to Class B, and all Trustees fees of
$16,161incurred by the Portfolio during the year.
For the year ending August 31, 2004, the Adviser and Distributor
waived $1,287,511 of fees and expenses for the General Money Market
Portfolio. These expenses related to $1,262,802 of fees attributable to
Class A, $6,096 attributable to Class B, and all Trustees fees of $18,613
incurred by the Portfolio during the year.
For the year ending August 31, 2004, the Adviser and Distributor
waived $562,195 of fees and expenses for the Tax-Exempt Money Market
Portfolio. These expenses related to $551,031 of fees attributable to
Class A, $5,939 attributable to Class B, and all Trustees fees of $5,225
incurred by the Portfolio during the year.
21
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 2004
4. CAPITAL SHARE TRANSACTIONS:
Each class is authorized to issue an unlimited number of shares with
no par value. Transactions in capital and shares of beneficial interest by
class for the Portfolios for the year ended August 31, 2004 and year ended
August 31,2003 are listed below (amounts represent shares and dollars):
U.S. TREASURY MONEY MARKET GENERAL MONEY MARKET TAX-EXEMPT MONEY MARKET
PORTFOLIO PORTFOLIO PORTFOLIO
--------------------------------- --------------------------------- ---------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, 2004 AUGUST 31, 2003 AUGUST 31, 2004 AUGUST 31, 2003 AUGUST 31, 2004 AUGUST 31, 2003
--------------------------------- --------------------------------- ---------------------------------
CLASS A SHARES:
Issued 5,702,303 12,459,045 1,952,747,763 2,785,649,642 667,041,719 642,984,337
Reinvested 63 86 478 23,362 8 11
Redeemed (12,525,863) (12,558,975) (2,060,220,432) (2,778,968,659) (686,186,122) (674,568,798)
--------------------------------- --------------------------------- ---------------------------------
Net increase
(decrease) in
Class A Shares (6,823,497) (99,844) (107,472,191) 6,704,345 (19,144,395) (31,584,450)
--------------------------------- --------------------------------- ---------------------------------
CLASS B SHARES:
Issued 373,802,150 1,092,082,247 36,476,675 39,818,413 26,356,643 --
37,383 2,061 -- -- -- --
Redeemed (410,825,366) (1,111,710,396) (42,034,706) (44,917,766) (12,143,166) --
--------------------------------- --------------------------------- ---------------------------------
Net increase
(decrease) in Class
B Shares (36,985,833) (19,626,088) (5,558,031) (5,099,353) 14,213,477 --
--------------------------------- --------------------------------- ---------------------------------
CLASS D SHARES:
Issued 658,004,478 981,056,095 44,941,959 210,163,036 -- 1,500,791
Reinvested -- -- 13,940 102,115 -- --
Redeemed (746,546,357) (1,020,736,681) (60,779,354) (175,979,968) -- (2,215,849)
--------------------------------- --------------------------------- ---------------------------------
Net increase (decrease)
in Class D Shares (88,541,879) (39,680,586) (15,823,455) 34,285,183 -- (715,058)
--------------------------------- --------------------------------- ---------------------------------
CLASS E SHARES:
Issued 111,848,476 1,661,501,323 56,739,821 132,955,656 -- --
Reinvested 1 5 2 6 -- --
Redeemed (125,386,366) (1,738,350,766) (67,692,673) (158,699,611) -- --
--------------------------------- --------------------------------- ---------------------------------
Net decrease in
Class E Shares (13,537,889) (76,849,438) (10,952,850) (25,743,949) -- --
NET INCREASE
(DECREASE) IN SHARE
TRANSACTIONS (145,889,098) (136,255,956) (139,806,527) 10,146,226 (4,930,918) (32,299,508)
================================= ================================= =================================
22
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 2004
5. SECURITIES LENDING:
Under an agreement with the Custodian, the Portfolios can lend their
securities to approved brokers, dealers and other financial institutions.
The Portfolios also continue to receive interest on the securities loaned.
Loans are collateralized by cash, in an amount at least equal to the
market value of the securities loaned plus accrued interest. The cash
collateral is received and is invested in a money market account with the
Custodian. A portion of the income generated by the investment of the
collateral, net of any rebates paid by the Custodian to borrowers, is
remitted to the Custodian as lending agent, and the remainder is paid to
the Portfolios. Generally, in the event of counterparty default, the
Portfolios have the right to use the collateral to offset losses incurred.
For the year ending August 31, 2004, the Treasury Money Market Portfolio
includes $27,016,587 of U.S. Treasury obligations on loan collateralized
by $27,236,000 invested in Bank of New York Institutional Cash Reserves
Fund. There were no outstanding securities on loan for General Money
Market Portfolio and Tax-Exempt Portfolio.
6. CONCENTRATION OF CREDIT RISK:
As of August 31, 2004, approximately 56.4% of the Tax-Exempt Money
Market Portfolio was invested in obligations of political subdivisions of
the State of Florida and, accordingly, is subject to the credit risk
associated with the non-performance of such issuers. Approximately 50% of
these investments are further secured, as to principal and interest, by
credit enhancements such as letters of credit, municipal bond insurance,
and guarantees issued by financial institutions.
7. FEDERAL TAX INFORMATION:
All of the dividends paid for the year ended August 31, 2004 and the
year ended August 31, 2003 by the General Money Market Portfolio and the
U.S. Treasury Money Market Portfolio are ordinary income for federal
income tax purposes.
During the fiscal year ended August 31, 2004 and August 31, 2003, all of
the distributions paid by the Tax-Exempt Money Market Portfolio have been
designated tax-exempt income distributions.
Undistributed net investment income differs from financial statement and
tax purposes primarily due to the timing of dividend payments.
For federal income tax purposes, the following Portfolios have capital
loss carryforwards as of August 31, 2004, which are available to offset
future realized gains, if any:
NAME AMOUNT EXPIRES
-------------------------- -------------------------------
U.S. Treasury Money Market $ 229,819 2008
21,859 2009
------------
$ 251,678
============
General Money Market $ 29,268 2005
51,799 2008
------------
$ 81,067
============
Tax-Exempt Money Market $ 1,943 2005
12,059 2006
2,545 2008
42,330 2009
------------
$ 58,877
============
23
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 2004
Capital losses incurred after October 31 ("post-October" losses)
within the taxable year are deemed to arise on the first business day of
the fund's next taxable year. The Fund indicated incurred and will elect
to defer net capital losses noted during 2004. The General Money Market
Fund will defer post-October losses in the amount of $1,354.
24
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Trustees and Shareholders of The Valiant Fund
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of portfolio investments, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the U.S. Treasury Money Market
Portfolio, the General Money Market Portfolio, and the Tax-Exempt Money Market
Portfolio (constituting The Valiant Fund, hereafter referred to as the "Fund")
at August 31, 2004, the results of each of their operations for the year then
ended, the changes in each of their net assets for the two years in the period
then ended and their financial highlights for each of the five years in the
period then ended, in conformity with accounting principles generally accepted
in the United States of America. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing 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 are free of material misstatement. An audit
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, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at August 31, 2004 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
October 27, 2004
25
MANAGEMENT OF THE TRUST
The trustees and officers of the Trust and their principal occupations during
the past five years are as follows:
RICHARD F. CURCIO PRESIDENT, TRUSTEE, CHAIRMAN OF THE BOARD
Founded Integrity Investments, Inc. (a broker/dealer) and Integrity Management &
Research, Inc.(an investment adviser) in 1992, and is currently President and
Director of each. Senior Vice President/Regional Manager for Fidelity
Institutional Services Company from 1987 to 1992. Associated with Fidelity
Distributors from 1979 to 1992.
JOHN S. CULBERTSON TRUSTEE
Retired. Trust Consultant with Fidelity Investments Institutional Services Co.
from 1990 to 1993.
RUFUS C. CUSHMAN JR. TRUSTEE
Retired. Money Manager with Fidelity Management & Research Corp. From 1968
through 1994.
H. WILLIS DAY TRUSTEE
Retired. Former Senior Vice President of Southeast Bank, FLA, N.A.
ROGER F. DUMAS TRUSTEE
Private investor since 1987.
KENNETH J. PHELPS TRUSTEE
President, Principal and Director of Reliance Trust Company, Atlanta, GA since
1992. Chairman, Chief Executive Officer and Director, C&S/Sovran Trust Company,
Inc. from 1987 to 1992.
DENIS R. CURCIO VICE PRESIDENT, SECRETARY AND TREASURER
Mr. Curcio joined Integrity Investments, Inc. the distributor of The Valiant
Fund in June of 1998 after graduating from Jacksonville University with a BS in
Finance. Aged 28, Denis is responsible for oversight and administration of The
Valiant Fund.
26
BRENDEN R. CURCIO VICE PRESIDENT
Mr. Curcio joined Integrity Investments, Inc., the distributor of The Valiant
Fund in June of 1994 after graduating from Stetson University with a BBA in
Finance. Aged 32, Brenden is responsible for institutional sales of The Valiant
Fund in the Northeast and Midwest.
Proxy Voting Policies and Procedures
A description of the Portfolios' proxy voting policies and procedures and
information regarding how the Portfolios' voted proxies relating to portfolio
securities during the most recent 12-month period ended June 30, is available,
without charge and upon request, by calling Integrity Investments, Inc. at
1-800-828-2176 or by accessing the Portfolios' Form N-PX on the Securities and
Exchange Commission's website at www.sec.gov.
Quarterly Portfolios
The Trust files its complete schedule of portfolio holdings with the Commission
for the first and third quarters of each fiscal year on Form N-Q. The Trust's
Forms N-Q are available on the Commission's website at www.sec.gov. The Trust's
Forms N-Q may also be reviewed and copied at the Commission's Public Reference
Room in Washington, DC; information on the operation of the Public Reference
Room may be obtained by calling (800)-SEC-0330.
27
THE VALIANT FUND
U.S. TREASURY INCOME PORTFOLIO
ANNUAL REPORT
AUGUST 31, 2004
THE VALIANT FUND
U.S. TREASURY INCOME PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
AUGUST 31, 2004 *
ASSETS:
Cash $ 985
--------
TOTAL ASSETS 985
LIABILITIES:
Accrued expenses and other liabilities:
Investment manager $ 364
--------
TOTAL LIABILITIES 364
--------
NET ASSETS $ 621
========
COMPOSITION OF NET ASSETS:
Capital $ 622
Undistributed net investment income 84
Accumulated net realized loss from
investment transactions (85)
--------
NET ASSETS $ 621
========
Class A Shares
Net Assets $ 621
Shares outstanding 622
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
========
* The portfolio has been inactive since 2001
See notes to financial statements
1
THE VALIANT FUND
U.S. TREASURY INCOME PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, 2003 (a) AUGUST 31, 2003 (b)
------------------- -------------------
INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income -- --
------------------- -------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS -- --
------------------- -------------------
DIVIDENDS:
Net investment income -- --
------------------- -------------------
INCREASE IN NET ASSETS FROM CAPITAL TRANSACTIONS -- --
------------------- -------------------
NET INCREASE IN NET ASSETS
NET ASSETS
Beginning of period 621 621
------------------- -------------------
End of year $ 621 $ 621
=================== ===================
(a) The Portfolio did not operate during the year ended August 31, 2004.
(b) The Portfolio did not operate during the year ended August 31, 2003.
See notes to financial statements
2
THE VALIANT FUND
U.S. TREASURY INCOME PORTFOLIO
For the years ended
------------------------------------------------------------------------
2004 (A) 2003 (B) 2002 (C) 2001 (D) 2000 (E)
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
INVESTMENT ACTIVITIES
Net investment income -- -- -- 0.01 0.01
Net realized gain from investment transactions -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Total from investment activities -- -- -- 0.01 0.01
---------- ---------- ---------- ---------- ----------
DIVIDENDS
Net investment income -- -- -- (0.01) (0.01)
---------- ---------- ---------- ---------- ----------
Total dividends -- -- -- (0.01) (0.01)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
TOTAL RETURN -- -- -- 0.68%(g) 0.51%(g)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 1 $ 1 $ 1 $ 1 $ 1
Ratio of expenses to average net assets -- -- -- 0.20%(h) 0.20%(h)
Ratio of net investment income to average net assets -- -- -- 5.11%(h) 4.21%(h)
* Less than $0.005 per share.
(a) The Portfolio did not operate during the year ended August 31, 2004.
(b) The Portfolio did not operate during the year ended August 31, 2003.
(c) The Portfolio did not operate during the year ended August 31, 2002.
(d) The Portfolio operated from December 6, 2000 to January 24, 2001.
(e) The Portfolio operated from December 7, 1999 to January 19, 2000.
(f) The Portfolio operated from December 14, 1998 to January 22, 1999.
(g) Not Annualized.
(h) Annualized.
See notes to financial statements
3
THE VALIANT FUND
U.S. TREASURY INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2004
1. ORGANIZATION:
The Valiant Fund (the "Trust") is a Massachusetts business trust,
organized on January 29, 1993 and is registered under the Investment
Company Act of 1940, as amended (the "Act"), as an open-end management
investment company. A separate annual report is issued for the U.S.
Treasury Money Market Portfolio, General Money Market Portfolio and
Tax-Exempt Money Market Portfolio. This report covers the U.S. Treasury
Income Portfolio (hereinafter referred to as "Portfolio") for the year
ending August 31, 2004, during which period the portfolio did not conduct
operations. As the Portfolio did not have any operations during the years
ended August 31, 2004 or 2003, a Statement of Operations and Statement of
Changes in Net Assets has not been presented.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies
followed by the Portfolio in the preparation of its financial statements.
The policies are in conformity with generally accepted accounting
principles in the United States of America. The preparation of financial
statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of income and expenses for
the period. Actual results could differ from those estimates.
SECURITY VALUATION:
Investments of the Portfolio are valued at amortized cost, which
approximates value. Under the amortized cost method, discount or premium,
if any, is accreted or amortized, respectively, on a straight-line basis
to the maturity of the security. During the year ending August 31, 2004,
the Portfolio did not engage in any investment activities.
SECURITIES TRANSACTIONS AND RELATED INCOME:
Securities transactions are recorded on trade date. Security gains
and losses are calculated on the identified cost basis. Interest income is
recognized on the accrual basis and includes, where applicable, the
amortization or accretion of a premium or a discount. During the year
ending August 31, 2004, the Portfolio did not engage in any investment
activities nor did it receive any related income.
EXPENSE ALLOCATION:
Expenses directly attributable to a portfolio are specifically
identified and charged. Trust expenses are allocated proportionately among
each of the Portfolios within the Trust in relation to the net assets of
each portfolio or another reasonable basis. Expenses specific to a class
are charged to that class. There were no expenses incurred by the
Portfolio during the year.
CAPITAL SHARE TRANSACTIONS:
The Portfolio is authorized to issue an unlimited number of shares
with no par value. No capital transactions occurred during the year.
4
MANAGEMENT OF THE TRUST
The trustees and officers of the Trust and their principal occupations during
the past five years are as follows:
RICHARD F. CURCIO PRESIDENT, TRUSTEE, CHAIRMAN OF THE BOARD
Founded Integrity Investments, Inc. (a broker/dealer) and Integrity Management &
Research, Inc.(an investment adviser) in 1992, and is currently President and
Director of each. Senior Vice President/Regional Manager for Fidelity
Institutional Services Company from 1987 to 1992. Associated with Fidelity
Distributors from 1979 to 1992.
JOHN S. CULBERTSON TRUSTEE
Retired. Trust Consultant with Fidelity Investments Institutional Services Co.
from 1990 to 1993.
RUFUS C. CUSHMAN JR. TRUSTEE
Retired. Money Manager with Fidelity Management & Research Corp. From 1968
through 1994.
H. WILLIS DAY TRUSTEE
Retired. Former Senior Vice President of Southeast Bank, FLA, N.A.
ROGER F. DUMAS TRUSTEE
Private investor since 1987.
KENNETH J. PHELPS TRUSTEE
President, Principal and Director of Reliance Trust Company, Atlanta, GA since
1992. Chairman, Chief Executive Officer and Director, C&S/Sovran Trust Company,
Inc. from 1987 to 1992.
DENIS R. CURCIO VICE PRESIDENT, SECRETARY AND TREASURER
Mr. Curcio joined Integrity Investments, Inc. the distributor of The Valiant
Fund in June of 1998 after graduating from Jacksonville University with a BS in
Finance. Aged 28, Denis is responsible for oversight and administration of The
Valiant Fund.
5
BRENDEN R. CURCIO VICE PRESIDENT
Mr. Curcio joined Integrity Investments, Inc., the distributor of The Valiant
Fund in June of 1994 after graduating from Stetson University with a BBA in
Finance. Aged 32, Brenden is responsible for institutional sales of The Valiant
Fund in the Northeast and Midwest.
PROXY VOTING POLICIES AND PROCEDURES
A description of the Portfolios' proxy voting policies and procedures and
information regarding how the Portfolios' voted proxies relating to portfolio
securities during the most recent 12-month period ended June 30, is available,
without charge and upon request, by calling Integrity Investments, Inc. at
1-800-828-2176 or by accessing the Portfolios' Form N-PX on the Securities and
Exchange Commission's website at www.sec.gov.
QUARTERLY PORTFOLIOS
The Trust files its complete schedule of portfolio holdings with the Commission
for the first and third quarters of each fiscal year on Form N-Q. The Trust's
Forms N-Q are available on the Commission's website at www.sec.gov. The Trust's
Forms N-Q may also be reviewed and copied at the Commission's Public Reference
Room in Washington, DC; information on the operation of the Public Reference
Room may be obtained by calling (800)-SEC-0330.
6
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Trustees of the Valiant Fund and
the Shareholders of the U.S. Treasury Income Portfolio
In our opinion, the accompanying statement of assets and liabilities and the
financial highlights present fairly, in all material respects, the financial
position of the U.S. Treasury Income Portfolio (one of the portfolios
constituting The Valiant Fund, hereafter referred to as the "Portfolio") at
August 31, 2004 and the financial highlights for each of the five years in the
period then ended, in conformity with accounting principles generally accepted
in the United States of America. This financial statement and the financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing 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 are free of material misstatement. An audit
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, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
October 27, 2004
7
ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics that applies to the Registrant's
President and Treasurer. No waivers or amendments have been granted or approved
during the period covered by this report
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
No financial expert was chosen because the disinterested trustees are all
retired financial or investment professionals and none believe they are
qualified as financial experts.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
a) AUDIT FEES: the aggregate fees billed in each of the last two fiscal years
for professional services rendered by the principal accountant for the audit are
as follows:
2004: $67,000
2003: $63,500
b) AUDIT-RELATED FEES: the aggregate fees billed in each of the last two fiscal
years for assurance and related services by the principal accountant that are
reasonably related to the performance of the audit of the registrant's financial
statements and are not reported under paragraph (a) of this item are as follows:
2004: $0
2003: $0
c) TAX FEES, the aggregate fees billed in each of the last two fiscal years for
professional services rendered by the principal accountant for tax compliance,
tax advice, and tax planning are as follows:
2004: $10,500
2003: $10,500
d) ALL OTHER FEES, the aggregate fees billed in each of the last two fiscal
years for products and services provided by the principal accountant, other than
the services reported in paragraphs (a) and (c) of this Item are as follows:
2003: $0
2002: $0
ITEM 5: AUDIT COMMITTEE OF LISTED REGISTRANTS.
The Valiant Fund has a separately designated Audit Committee, which consists of
the independent trustees. The audit committee members are John S. Culbertson, H.
Willis Day, Jr., Roger F. Dumas, and Rufus C. Cushman, Jr.
ITEM 6. SCHEDULE OF INVESTMENTS.
The Schedule of Investments is included as a 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. PURCHASE OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
None.
ITEM 10. CONTROLS AND PROCEDURES.
a) Based on their evaluation on November 5, 2004, the President (principal
executive officer) and the Treasurer (principal financial officer) of the
Rydex S&P Equal Weight ETF (the "Fund") believe that there were no
significant deficiencies in the design or operation of the internal
controls of the Fund or Integrity Investments Inc. ("II"), the investment
adviser, and The Bank of New York ("BNY"), administrator of the Fund,
including disclosure controls and procedures (as defined in Rule 30a-2(c)
under the Investment Company Act of 1940) that adversely affected the
ability of the Fund, or II, or BNY, on behalf of the Fund, to record,
process, summarize, and report the subject matter contained in this
Report, and the President and Treasurer of the Fund have identified no
material weaknesses in such internal controls on behalf of the Fund. There
was no fraud, whether or not material, involving officers or employees of
II, or BNY, or the Fund who have a significant role in the Fund's internal
controls, including disclosure controls and procedures (as defined in Rule
30a-2(c) under the Investment Company Act of 1940) that has come to the
attention of the Adviser or the officers of the Fund, including its
President and Treasurer.
b) There were no significant changes in the Fund and the II's internal
controls, including disclosure controls and procedures (as defined in Rule
30a-2(c) under the Investment Company Act of 1940) that apply to the Fund
or in other factors with respect to the Fund that could have significantly
affected the Fund's or the II's internal controls during the period
covered by this Form N-CSR, and no corrective actions with regard to
significant deficiencies or material weaknesses were taken by the Fund or
the RI during such period.
ITEM 11. EXHIBITS.
(a)(1) Code of Ethics.
(a)(2) Certification of principal executive officer and principal financial
officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(b) Certification of principal executive officer and principal financial officer
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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) The Valiant Fund
By (Signature and Title) /s/ Richard F. Curcio
------------------------------------------------------
Richard F. Curcio, Chairman of the Board and President
Date 11/5/04
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/ Richard F. Curcio
------------------------------------------------------
Richard F. Curcio, Chairman of the Board and President
Date 11/5/04
By (Signature and Title) /s/ Denis R. Curcio
------------------------------------------------------
Denis R. Curcio, Treasurer
Date 11/5/04
EXHIBIT (a)(1)
Insert Code of Conduct Here