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 811-07582
THE VALIANT FUND
----------------
(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
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(Name and address of agent for service)
Registrant's telephone number, including area
code: 800-242-9340
Date of fiscal year end: 8/31/06
-------
Date of reporting period: 2/28/06
--------
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
THE VALIANT FUND
SEMI-ANNUAL REPORT
FEBRUARY 28, 2006
THE VALIANT FUND
Semi-Annual Report - February 28, 2006
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
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GENERAL MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments 8
Statement of Assets and Liabilities 11
Statement of Operations 11
Statements of Changes in Net Assets 12
Financial Highlights 13
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TAX-EXEMPT MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments 15
Statement of Assets and Liabilities 17
Statement of Operations 17
Statements of Changes in Net Assets 18
Financial Highlights 19
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Notes to Financial Statements 20
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 February 28, 2006.
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 iExpenses Paid During
the Six-Month Periodi 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 Porfoliosi actual expense ratio and an assumed rate of return of 5% per year
before expenses, which is not the Portfoliosi 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
09/01/05 02/28/06 SIX-MONTH PERIOD SIX-MONTH PERIOD*
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
U.S. TREASURY MONEY MARKET PORTFOLIO - CLASS A
Actual $1,000.00 $1,018.96 0.20% $1.00
Hypothetical (5% return before expenses) $1,000.00 $1,023.80 0.20% $1.00
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
U.S. TREASURY MONEY MARKET PORTFOLIO - CLASS B
Actual $1,000.00 $1,017.70 0.45% $2.25
Hypothetical (5% return before expenses) $1,000.00 $1,022.56 0.45% $2.26
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
U.S. TREASURY MONEY MARKET PORTFOLIO - CLASS D
Actual $1,000.00 $1,016.44 0.70% $3.50
Hypothetical (5% return before expenses) $1,000.00 $1,021.32 0.70% $3.51
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
U.S. TREASURY MONEY MARKET PORTFOLIO - CLASS E
Actual $1,000.00 $1,014.94 1.00% $5.00
Hypothetical (5% return before expenses) $1,000.00 $1,019.84 1.00% $5.01
- ---------------------------------------------------------------------------------------------------------------
1
FEES AND EXPENSES (unaudited)
- ---------------------------------------------------------------------------------------------------------------
GENERAL MONEY MARKET PORTFOLIO - CLASS A
Actual $1,000.00 $1,019.74 0.20% $1.00
Hypothetical (5% return before expenses) $1,000.00 $1,023.80 0.20% $1.00
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
GENERAL MONEY MARKET PORTFOLIO - CLASS B
Actual $1,000.00 $1,018.48 0.45% $2.25
Hypothetical (5% return before expenses) $1,000.00 $1,022.56 0.45% $2.26
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
GENERAL MONEY MARKET PORTFOLIO - CLASS D
Actual $1,000.00 $1,017.22 0.70% $3.50
Hypothetical (5% return before expenses) $1,000.00 $1,021.32 0.70% $3.51
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
GENERAL MONEY MARKET PORTFOLIO - CLASS E
Actual $1,000.00 $1,015.72 1.00% $5.00
Hypothetical (5% return before expenses) $1,000.00 $1,019.84 1.00% $5.01
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
TAX-EXEMPT MONEY MARKET PORTFOLIO - CLASS A
Actual $1,000.00 $1,013.32 0.20% $1.00
Hypothetical (5% return before expenses) $1,000.00 $1,023.80 0.20% $1.00
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
TAX-EXEMPT MONEY MARKET PORTFOLIO - CLASS B
Actual $1,000.00 $1,012.07 0.45% $2.25
Hypothetical (5% return before expenses) $1,000.00 $1,022.56 0.45% $2.26
- ---------------------------------------------------------------------------------------------------------------
* EXPENSES FOR EACH PORTFOLIO ARE CALCULATED USING THE PORTFOLIOIS ANNUALIZED
EXPENSE RATIO FOR EACH FUND, WHICH REPRESENTS THE ONGOING EXPENSES AS A
PERCENTAGE OF NET ASSETS FOR THE SIX-MONTHS ENDED 02/28/06. 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
THE VALIANT FUND
U.S. TREASURY MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments
February 28, 2006 (unaudited)
MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
---- ---- ------ -----
U.S. TREASURY OBLIGATIONS - 54.4%
U.S. TREASURY BILLS(A) - 51.9%
4.01 % 4/20/2006 $ 20,000,000 $ 19,888,681
4.25 3/2/2006 85,000,000 84,989,965
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104,878,646
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U.S. TREASURY NOTES - 2.5%
4.53 7/15/2006 5,000,000 5,045,294
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TOTAL U.S. TREASURY OBLIGATIONS (AMORTIZED COST $109,923,940) 109,923,940
-------------
REPURCHASE AGREEMENTS - 45.9%
Bank of America, Inc., 4.55%, due 3/1/06,
with a maturity value of $17,802,250
(Collateralized by 5.00% GNMA bonds valued at $18,560,000
with maturity date 11/20/35) 17,800,000 17,800,000
Citigroup, Inc., 4.55%, due 03/01/06,
with a maturity value of $23,002,907
(Collateralized by various 1.89% -7.00% GNMA bonds valued at $23,460,000
with maturity dates 7/20/29 -1/15/36) 23,000,000 23,000,000
Goldman Sachs., 4.53%, due 3/1/06,
with a maturity value of $25,003,146
(Collateralized by 4.751% GNMA bonds valued at $25,500,000
with maturity date 10/16/26) 25,000,000 25,000,000
UBS Paine Webber, 4.55%, due 3/1/06,
with a maturity value of $27,003,413
(Collateralized by various 5.50% -11.50% GNMA bonds valued at $27,542,096
with maturity dates 12/15/09 - 6/15/42) 27,000,000 27,000,000
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TOTAL REPURCHASE AGREEMENTS (AMORTIZED COST $92,800,000) 92,800,000
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TOTAL INVESTMENTS (AMORTIZED COST $202,723,940) (b) - 100.3% 202,723,940
LIABILITIES IN EXCESS OF OTHER ASSETS - (0.3%) (508,301)
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TOTAL NET ASSETS - 100% $ 202,215,639
=============
(a) Interest rate represents yield to maturity at purchase.
(b) Cost and value for federal income tax and financial reporting purposes are
the same.
GNMA - Government National Mortgage Association
VALIANT U.S. TREASURY
MONEY MARKET PORTFOLIO
U.S. Treasury Obligation 54.4 %
Repurchase Agreements 45.9
-----
100.3
Liabilities In Excess of Other Assets (0.3)
-----
100.0 %
=====
See notes to financial statements.
3
THE VALIANT FUND
U.S. TREASURY MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
FEBRUARY 28, 2006 (UNAUDITED)
ASSETS:
Investments at value (amortized cost $109,923,940) $ 109,923,940
Repurchase agreements (amortized cost $92,800,000) 92,800,000
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Total investments 202,723,940
Cash 94,210
Receivables:
Interest 55,223
Other assets 5,259
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TOTAL ASSETS 202,878,632
LIABILITIES:
Payables:
Dividends $ 563,391
Accrued expenses and other liabilities:
Investment manager 30,000
Distribution and shareholder servicing 69,602
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TOTAL LIABILITIES 662,993
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NET ASSETS $ 202,215,639
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COMPOSITION OF NET ASSETS:
Capital $ 202,466,081
Accumulated net realized loss from
investment transactions (250,442)
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NET ASSETS $ 202,215,639
=============
Class A Shares
Net assets $ 1,438,735
Shares outstanding (unlimited number
of shares authorized with no par value) 1,440,607
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class B Shares
Net assets $ 74,386,628
Shares outstanding (unlimited number of
shares authorized with no par value) 74,478,720
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class D Shares
Net assets $ 114,201,566
Shares outstanding (unlimited number of
shares authorized with no par value) 114,340,961
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class E Shares
Net assets $ 12,188,710
Shares outstanding (unlimited number of
shares authorized with no par value) 12,205,799
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FEBRUARY 28, 2006 (UNAUDITED)
INVESTMENT INCOME:
Interest $ 4,124,993
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TOTAL INVESTMENT INCOME 4,124,993
EXPENSES:
Investment manager $ 207,256
Distribution and shareholder servicing:
Class A Shares 2,420
Class B Shares 131,313
Class D Shares 290,467
Class E Shares 58,604
Trustees fees 5,774
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Total expenses before contractual
fee reimbursements 695,834
Contractual fee reimbursements (45,713)
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NET EXPENSES 650,121
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NET INVESTMENT INCOME 3,474,872
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NET REALIZED GAIN FROM INVESTMENT
TRANSACTIONS 1,215
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NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 3,476,087
=============
See notes to financial statements.
4
THE VALIANT FUND
U.S. TREASURY MONEY MARKET PORTFOLIO
- ---------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- ---------------------------------------------------------------------------------------
FOR THE
SIX MONTHS ENDED FOR THE
FEBRUARY 28, 2006 YEAR ENDED
(UNAUDITED) AUGUST 31, 2005
------------- -------------
INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income $ 3,474,872 $ 4,810,500
Net realized gain from investment transactions 1,215 21
------------- -------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 3,476,087 4,810,521
------------- -------------
DIVIDENDS:
Net investment income:
Class A Shares (26,158) (18,995)
Class B Shares (1,322,720) (1,663,384)
Class D Shares (1,907,823) (2,912,706)
Class E Shares (218,171) (263,030)
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TOTAL DIVIDENDS TO SHAREHOLDERS (3,474,872) (4,858,115)
------------- -------------
DECREASE IN NET ASSETS FROM CAPITAL
TRANSACTIONS (NOTE 4) (32,750,287) (67,502,822)
------------- -------------
NET DECREASE IN NET ASSETS (32,749,072) (67,550,416)
NET ASSETS:
Beginning of period 234,964,711 302,515,127
------------- -------------
End of period (including accumulated
undistributed net investment income
of $0 and $0, respectively) $ 202,215,639 $ 234,964,711
============= =============
See notes to financial statements.
5
THE VALIANT FUND
U.S. TREASURY MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS, CLASS A SHARES
- --------------------------------------------------------------------------------------------------------------------
FOR THE
SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31,
FEBRUARY 28, 2006 ---------------------------------------------------------------
(UNAUDITED) 2005 2004 2003 2002 2001
----------- ---- ---- ---- ---- ----
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
---------- -------- -------- --------- -------- --------
INVESTMENT ACTIVITIES
Net investment income 0.019 0.023 0.009 0.012 0.021 0.050
---------- -------- -------- --------- -------- --------
DIVIDENDS
Net investment income (0.019) (0.023) (0.009) (0.012) (0.021) (0.050)
---------- -------- -------- --------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
========== ========= ======== ========= ======== =========
TOTAL RETURN (a) 3.33% 2.31% 0.92% 1.22% 2.05% 5.30%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 1,439 $ 1,186 $ 339 $ 7,159 $ 7,260 $ 10,355
Ratio of expenses to average
net assets, before contractual
fee waivers and/or expense
reimbursements 0.56%(b) 0.55% 0.55% 0.55% 0.55% 0.55%
Ratio of expenses to average
net assets 0.20%(b) 0.20% 0.20% 0.20% 0.20% 0.20%
Ratio of net investment income
to average net assets 3.78%(b) 2.58% 0.87% 1.21% 2.12% 5.13%
- -----------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS, CLASS B SHARES
- -----------------------------------------------------------------------------------------------------------------------
FOR THE
SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31,
FEBRUARY 28, 2006 ---------------------------------------------------------------
(UNAUDITED) 2005 2004 2003 2002 2001
----------- ---- ---- ---- ---- ----
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
INVESTMENT ACTIVITIES
Net investment income 0.018 0.020 0.007 0.010 0.018 $ 0.050
DIVIDENDS
Net investment income (0.018) (0.020) (0.007) (0.010) (0.018) $ (0.050)
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN (A) 3.07% 2.06% 0.67% 0.96% 1.80% 5.04%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 74,387 $ 85,223 $ 89,633 $ 126,617 $ 146,246 $ 117,213
Ratio of expenses to average
net assets, before contractual
fee waivers and / or expense
reimbursements 0.56%(b) 0.55% 0.55% 0.55% 0.55% 0.55%
Ratio of expenses to average
net assets 0.45%(b) 0.45% 0.45% 0.45% 0.45% 0.45%
Ratio of net investment income
to average net assets 3.53%(b) 2.05% 0.65% 0.95% 1.77% 4.44%
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of d each perio reported and includes
reinvestment of dividends.
(b) Annualized.
See notes to financial statements.
6
THE VALIANT FUND
U.S. TREASURY MONEY MARKET PORTFOLIO
- ----------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS, CLASS D SHARES
- ----------------------------------------------------------------------------------------------------------------------
FOR THE
SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31,
FEBRUARY 28, 2006 ---------------------------------------------------------------
(UNAUDITED) 2005 2004 2003 2002 2001
----------- ---- ---- ---- ---- ----
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
INVESTMENT ACTIVITIES
Net investment income 0.016 0.018 0.004 0.008 0.015 $ 0.050
DIVIDENDS
Net investment income (0.016) (0.018) (0.004) (0.008) (0.015) $ (0.050)
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN (A) 2.82% 1.80% 0.42% 0.71% 1.54% 4.77%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 114,202 $132,938 $197,640 $286,191 $ 325,896 $ 339,659
Ratio of expenses to average
net assets, before contractual
fee waivers and / or expense 0.71%(b) 0.70% 0.70% 0.70% 0.70% 0.70%
reimbursements 0.70%(b) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of expenses to average 3.28%(b) 1.70% 0.41% 0.71% 1.54% 4.55%
net assets
Ratio of net investment income
to average net assets
- ----------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS, CLASS E SHARES
- ----------------------------------------------------------------------------------------------------------------------
FOR THE
SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31,
FEBRUARY 28, 2006 ---------------------------------------------------------------
(UNAUDITED) 2005 2004 2003 2002 2001
----------- ---- ---- ---- ---- ----
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 1.000 1.000
INVESTMENT ACTIVITIES
Net investment income 0.015 0.015 0.001 0.005 0.013 $ 0.040
DIVIDENDS
Net investment income (0.015) (0.015) (0.001) (0.005) (0.013) $ (0.040)
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN (A) 2.51% 1.50% 0.12% 0.41% 1.24% 4.46%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 12,189 $ 15,617 $ 14,903 $ 28,437 $ 105,257 $ 220,850
Ratio of expenses to average
net assets, before contractual
fee waivers and / or expense 1.01%(b) 1.00% 1.00% 1.00% 1.00% 1.00%
reimbursements 1.00%(b) 1.00% 1.00% 1.00% 1.00% 1.00%
Ratio of expenses to average 2.98%(b) 1.55% 0.10% 0.48% 1.32% 4.19%
net assets
Ratio of net investment income
to average net assets
(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.
(b) Annualized.
See notes to financial statements.
7
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments
February 28, 2006 (unaudited)
MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
---- ---- ------ -----
COMMERCIAL PAPER - 38.1%
DISTRIBUTION/WHOLESALE - 4.1%
Louis Dreyfus Corp. 4.51% 3/1/06 $ 20,000,000 $ 20,000,000
------------
EDUCATION - 2.3%
Johns Hopkins University 4.57 4/6/06 11,300,000 11,300,000
------------
FINANCE - 8.2%
Govco, Inc. 4.64 5/11/06 20,000,000 19,816,978
Jupiter Security Corp. 4.52 3/23/06 20,000,000 19,944,755
------------
39,761,733
------------
INDUSTRIES - 4.1%
Yorkshire Building Society 4.62 5/9/06 20,000,000 19,822,900
------------
SPECIAL PURPOSE ENTITY - 19.4%
Clipper Receivables Co., LLC 4.56 3/1/2006 20,000,000 20,000,000
Greyhawk Funding 4.52 3/23/2006 15,000,000 14,958,567
Lexington Parker Capital 4.44 4/6/2006 20,000,000 19,911,200
Lockhart Funding LLC 4.58 4/5/2006 20,000,000 19,910,944
Steamboat Funding Corp. 4.52 3/10/2006 20,000,000 19,977,400
------------
94,758,111
------------
TOTAL COMMERCIAL PAPER
(AMORTIZED COST $185,642,744) 185,642,744
------------
CORPORATE OBLIGATIONS* - 13.4%
FINANCIAL SERVICES - 2.8%
Bank of America 4.56 3/1/2006 10,000,000 10,000,000
Vista Funding 4.87 3/2/2006 435,000 435,000
Wyoming Steel Investment 4.67 3/2/2006 3,030,000 3,030,000
------------
13,465,000
------------
FOOD - 0.2%
Jacksons Food Stores, Inc. 4.62 3/2/2006 758,000 758,000
------------
HEALTH SERVICES - 1.0%
Gastroenterology Associates, LLC 4.57 3/2/2006 2,540,000 2,540,000
Louisiana Endoscopy Floater 4.57 3/2/2006 1,800,000 1,800,000
Riverview Medical Office Building 4.62 3/2/2006 800,000 800,000
------------
5,140,000
------------
LEISURE - 0.9%
Commonwealth Country Club, Ltd. 4.62 3/2/2006 3,120,000 3,120,000
Sandusky Yacht Club 4.62 3/2/2006 1,160,000 1,160,000
------------
4,280,000
------------
REAL ESTATE - 3.7%
208 Associates LLC 4.62 3/2/2006 850,000 850,000
Aztec Properties LLC 4.57 3/2/2006 1,993,000 1,993,000
CMW Real Estate LLC 4.62 3/2/2006 2,175,000 2,175,000
El Dorado Enterprises of Miami FL 4.67 3/2/2006 1,900,000 1,900,000
El Dorado Enterprises of Miami FL 4.67 3/2/2006 8,985,000 8,985,000
G & J Properties II 4.57 3/2/2006 10,000 910,000
Ordeal Properties LLC 4.62 3/2/2006 1,210,000 1,210,000
------------
18,023,000
------------
See notes to financial statements.
8
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments
February 28, 2006 (unaudited)
MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
---- ---- ------ -----
SPECIAL PURPOSE ENTITY - 4.8%
Approach Partnership 4.62 3/2/2006 1,010,000 1,010,000
Barry-Wehmiller Group 4.57 3/2/2006 1,085,000 1,085,000
Best One Tire & Service 4.57 3/2/2006 900,000 900,000
Butler County, Surgical Properties 4.57 3/2/2006 1,355,000 1,355,000
Chuo Mubea Suspen Compon 4.57 3/2/2006 275,000 275,000
Denver LLC 4.87 3/2/2006 360,000 360,000
Exal Corp. 4.57 3/2/2006 1,400,000 1,400,000
FE LLC 4.52 3/2/2006 950,000 950,000
GCG Portage LLC 4.67 3/2/2006 1,180,000 1,180,000
GMC Financing, LLC 4.59 3/2/2006 2,825,000 2,825,000
ISO Building LLC 4.57 3/2/2006 900,000 900,000
K. C. Jordan & Associates 4.57 3/2/2006 700,000 700,000
Michigan Equity Group 4.57 3/2/2006 1,300,000 1,300,000
MMR Development Co. 4.57 3/2/2006 1,070,000 1,070,000
Physicians Center LP 4.57 3/2/2006 3,070,000 3,070,000
Taylor Steel, Inc. 4.62 3/2/2006 2,060,000 2,060,000
Village Enterprises 4.62 3/2/2006 985,000 985,000
Wellington Green LLC 4.62 3/2/2006 2,160,000 2,160,000
------------
23,585,000
------------
TOTAL CORPORATE OBLIGATIONS
(AMORTIZED COST $65,251,000) 65,251,000
------------
CERTIFICATE OF DEPOSIT - 24.6%
BANKING - 24.6%
Citibank 4.60 4/27/2006 20,000,000 20,000,000
HBOS Treasury Services 4.51 4/10/2006 20,000,000 20,000,110
HSH Nordbank 4.53 3/23/2006 20,000,000 20,000,000
Royal Bank of Scottland 4.81 1/16/2007 10,000,000 10,000,425
Union Bank of Switzerland 4.52 3/28/2006 20,000,000 20,000,000
Wells Fargo 4.87 1/31/2007 10,000,000 9,999,497
Wilmington 4.61 4/17/2006 20,000,000 20,000,129
------------
TOTAL CERTIFICATE OF DEPOSIT
(AMORTIZED COST $120,000,161) 120,000,161
------------
MUNICIPAL NOTES AND BONDS* - 6.3%
ALABAMA - 3.7%
Auburn Taxable Revenue, Series B 4.57 3/2/2006 5,840,000 5,840,000
Meadow Brook 4.59 3/2/2006 12,040,000 12,040,000
------------
17,880,000
------------
ILLINOIS - 1.0%
Upper Illinois River Valley
Development Authority 4.62 3/2/2006 4,595,000 4,595,000
------------
MICHIGAN - 0.3%
Michigan City Industrial Economic
Development Revenue 4.57 3/2/2006 1,400,000 1,400,000
------------
NEW YORK - 0.7%
Baird Properties LLC 4.66 3/2/2006 2,055,000 2,055,000
IHA Capital Development Corp. 4.57 3/2/2006 1,500,000 1,500,000
------------
3,555,000
------------
OHIO - 0.6%
Hopkins Waterhouse LLC 4.62 3/2/2006 835,000 835,000
Mercer County, HealthCare Facilities 4.58 3/3/2006 1,895,000 1,895,000
------------
2,730,000
------------
VIRGINIA - 0.0%
Ashland Industrial Development Authority 4.81 3/2/2006 350,000 350,000
------------
TOTAL MUNICIPAL NOTES AND BONDS
(AMORTIZED COST $30,510,000) 30,510,000
------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS - 2.0%
Federal Home Loan Mortgage Corp. 4.25 10/23/06 10,000,000 10,000,000
------------
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(AMORTIZED COST $10,000,000) 10,000,000
------------
See notes to financial statements
9
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments
February 28, 2006 (unaudited)
MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
---- ---- ------ -----
REPURCHASE AGREEMENT - 15.7%
Bank of America, Inc., 4.55%,
due 3/01/06, with a
maturity value of $76,809,707
(Collateralized by various 0%
-6.3112% GNMA bonds valued
at $78,336,000 with maturity
dates 6/16/21 - 2/20/36) 76,800,000 76,800,000
-------------
TOTAL REPURCHASE AGREEMENTS
(AMORTIZED COST $76,800,000) 76,800,000
-------------
TOTAL INVESTMENTS (AMORTIZED COST
$488,203,905) (a) - 100.1% 488,203,905
LIABILITIES IN EXCESS OF OTHER ASSETS -
(0.1%) (481,125)
-------------
TOTAL NET ASSETS - 100% $ 487,722,780
=============
- ---------------
* 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 indices.
The rate shown represents the rate in effect at February 28, 2006 maturity
date shown reflects next rate change date.
(a) The cost of investments for federal income tax purposes are the same.
GNMA - Government National Mortgage Association
LLC - Limited Liability Corporation
LP - Limited Partnership
PLC - Public Limited Company
VALIANT GENERAL MONEY MARKET PORTFOLIO
Commercial Paper 38.1 %
Corporate Obligations 13.4
Certificate of Deposit 24.6
Municipal Notes and Bonds 6.3
U.S. Government & Agency Obligations 2.0
Repurchase Agreement 15.7
-----
100.1
Liabilities In Excess of Other Assets (0.1)
-----
100.0 %
=====
See notes to financial statements.
10
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
FEBRUARY 28, 2006
ASSETS:
Investments, at value (amortized cost $411,403,905) $ 411,403,905
Repurchase agreements (amortized cost $76,800,000) 76,800,000
-------------
Total investments 488,203,905
Cash 14,381
Receivables:
Interest 1,147,633
Other assets 9
-------------
TOTAL ASSETS 489,365,928
LIABILITIES:
Payables:
Dividends $ 1,522,914
Accrued expenses and other liabilities:
Investment manager 71,461
Distribution and shareholder servicing 48,773
-------------
TOTAL LIABILITIES 1,643,148
-------------
NET ASSETS $ 487,722,780
=============
Composition of Net Assets:
Capital $ 487,776,622
Accumulated net realized loss from
investment transactions (53,842)
-------------
Net Assets $ 487,722,780
=============
Class A Shares
Net assets $ 380,780,494
Shares outstanding (unlimited number of
shares authorized with no par value) 380,841,100
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class B Shares
Net assets $ 118,860
Shares outstanding (unlimited number of
shares authorized with no par value) 118,887
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class D Shares
Net assets $ 71,215,575
Shares outstanding (unlimited number of
shares authorized with no par value) 71,226,885
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class E Shares
Net assets $ 35,607,851
Shares outstanding (unlimited number of
shares authorized with no par value) 35,619,018
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FEBRUARY 28, 2006 (UNAUDITED)
INVESTMENT INCOME:
Interest $ 8,781,097
-----------
TOTAL INVESTMENT INCOME 8,781,097
EXPENSES:
Investment manager $ 421,904
Distribution and shareholder servicing:
Class A Shares 575,580
Class B Shares 175
Class D Shares 146,049
Class E Shares 137,927
Trustees fees 10,350
-----------
Total expenses before contractual
fee reimbursements 1,291,985
Contractual fee waivers and
expense reimbursements (585,980)
-----------
NET EXPENSES 706,005
-----------
NET INVESTMENT INCOME 8,075,092
-----------
NET REALIZED LOSS FROM INVESTMENT
TRANSACTIONS (667)
-----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 8,074,425
===========
See notes to financial statements.
11
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
FOR THE
SIX MONTHS ENDED FOR THE
FEBRUARY 28, 2006 YEAR ENDED
(UNAUDITED) AUGUST 31, 2005
----------------- -----------------
INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income $ 8,075,092 $ 9,890,713
Net realized loss from investment transactions (667) (22)
------------- -------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 8,074,425 9,890,691
------------- -------------
DIVIDENDS:
Net investment income:
Class A Shares (6,514,418) (8,222,301)
Class B Shares (1,852) (28,849)
Class D Shares (1,016,520) (1,047,613)
Class E Shares (542,302) (591,950)
------------- -------------
TOTAL DIVIDENDS TO SHAREHOLDERS (8,075,092) (9,890,713)
------------- -------------
DECREASE IN NET ASSETS FROM CAPITAL
TRANSACTIONS (NOTE 4) 124,332,312 (4,761,334)
------------- -------------
NET DECREASE IN NET ASSETS 124,331,645 (4,761,356)
NET ASSETS:
Beginning of year 363,391,135 368,152,491
------------- -------------
End of year (including accumulated
undistributed net investment
income of $0 and $0, respectively) $ 487,722,780 $ 363,391,135
============= =============
See notes to financial statements.
12
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
- ------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS, CLASS A SHARES
- ------------------------------------------------------------------------------------------------------------------------
FOR THE
SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31,
FEBRUARY 28, 2006 -----------------------------------------------------------------
(UNAUDITED) 2005 2004 2003 2002 2001
----------- ---- ---- ---- ---- ----
Net Asset Value, Beginning of Year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
---------- ---------- ---------- ---------- ---------- ----------
Investment Activities
Net investment income 0.020 0.024 0.010 0.013 0.022 $ 0.050
---------- ---------- ---------- ---------- ---------- ----------
Dividends
Net investment income (0.020) (0.024) (0.010) (0.013) (0.022) $ (0.050)
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
========== ========== ========== ========== ========== ==========
Total Return (a) 3.47% 2.42% 1.01% 1.29% 2.24% 5.52%
Ratios/Supplementary Data:
Net Assets at end of period (000) $ 380,780 $ 273,911 $ 256,923 $ 364,392 $ 357,676 $ 380,513
Ratio of expenses to average
net assets, before contractual
fee waivers and / or expense
reimbursements 0.55%(b) 0.55% 0.55% 0.55% 0.55% 0.55%
Ratio of expenses to
average net assets 0.20%(b) 0.20% 0.20% 0.20% 0.20% 0.20%
Ratio of net investment income to
average net assets 3.96%(b) 2.40% 0.99% 1.28% 2.22% 5.36%
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS, CLASS B SHARES
- --------------------------------------------------------------------------------
FOR THE
SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31,
FEBRUARY 28, 2006 -----------------------------------------------------------------
(UNAUDITED) 2005 2004 2003 2002 2001
----------- ---- ---- ---- ---- ----
Net Asset Value, Beginning of Year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
---------- ---------- ---------- ---------- ---------- ---------
Investment Activities
Net investment income 0.018 0.021 0.008 0.010 0.019 $ 0.050
---------- ---------- ---------- ---------- ---------- ---------
Dividends
Net investment income (0.018) (0.021) (0.008) (0.010) (0.019) $ (0.050)
---------- ---------- ---------- ---------- ---------- ---------
Net Asset Value, End of Year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
========== ========== ========== ========== ========== ==========
Total Return (a) 3.21% 2.16% 0.76% 1.04% 1.98% 5.25%
Ratios/Supplementary Data:
Net Assets at end of period (000) $ 119 $ 103 $ 5,064 $ 10,620 $ 15,719 $ 9,169
Ratio of expenses to average
net assets, before contractual
fee waivers and / or expense
reimbursements 0.55%(b) 0.55% 0.50% 0.55% 0.55% 0.55%
Ratio of expenses to
average net assets 0.45%(b) 0.45% 0.45% 0.45% 0.45% 0.45%
Ratio of net investment income to
average net assets 3.70%(b) 1.53% 0.74% 1.03% 1.91% 4.91%
(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.
(b) Annualized.
See notes to financial statements.
13
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
- ------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS, CLASS D SHARES
- ------------------------------------------------------------------------------------------------------------------------
FOR THE
SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31,
FEBRUARY 28, 2006 -----------------------------------------------------------------
(UNAUDITED) 2005 2004 2003 2002 2001
----------- ---- ---- ---- ---- ----
Net Asset Value, Beginning of Year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
---------- ---------- ---------- ---------- ---------- ----------
Investment Activities
Net investment income 0.017 0.019 0.005 0.007 0.016 $ 0.050
---------- ---------- ---------- ---------- ---------- ----------
Dividends
Net investment income (0.017) (0.019) (0.005) (0.007) (0.016) $ (0.050)
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
========== ========== ========== ========== ========== ==========
Total Return (a) 2.95% 1.91% 0.50% 0.79% 1.73% 4.99%
Ratios/Supplementary Data:
Net Assets at end of period (000) $ 71,216 $ 53,722 $ 59,116 $ 74,943 $ 40,662 $ 16,861
Ratio of expenses to average
net assets, before contractual
fee waivers and / or expense
reimbursements 0.70%(b) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of expenses to
average net assets 0.70%(b) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net investment income to
average net assets 3.48%(b) 1.87% 0.50% 0.73% 1.55% 4.81%
- ------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS, CLASS E SHARES
- ------------------------------------------------------------------------------------------------------------------------
FOR THE
SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31,
FEBRUARY 28, 2006 -----------------------------------------------------------------
(UNAUDITED) 2005 2004 2003 2002 2001
----------- ---- ---- ---- ---- ----
Net Asset Value, Beginning of Year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
---------- ---------- ---------- ---------- ---------- ----------
Investment Activities
Net investment income 0.016 0.016 0.002 0.005 0.014 $ 0.050
Dividends (0.016) (0.016) (0.002) (0.005) (0.014) $ (0.050)
Net investment income ----------- ---------- ---------- ---------- ---------- ----------
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Net Asset Value, End of Year =========== ========== ========== ========== ========== ==========
2.65% 1.61% 0.20% 0.49% 1.42% 4.68%
Total Return (a)
Ratios/Supplementary Data: $ 35,608 $ 35,655 $ 47,050 $ 58,005 $ 83,742 $ 99,984
Net Assets at end of period (000)
Ratio of expenses to average
net assets, before contractual
fee waivers and / or expense
reimbursements 1.00%(b) 1.00% 1.00% 1.00% 1.00% 1.00%
Ratio of expenses to
average net assets 1.00%(b) 1.00% 1.00% 1.00% 1.00% 1.00%
Ratio of net investment income to
average net assets 3.15%(b) 1.54% 0.20% 0.51% 1.45% 4.23%
(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.
(b) Annualized.
See notes to financial statements.
14
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments
February 28, 2006 (unaudited)
MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
---- ---- ------ -----
COMMERCIAL PAPER -4.6%
FLORIDA - 3.7%
Sarasota County Public Hospital, LOC Suntrust Bank 3.07% 4/4/06 $ 4,050,000 $ 4,050,000
Sunshine State, Series H 3.03 3/9/06 3,000,000 3,000,000
------------
7,050,000
------------
PENNSYLVANIA -0.9%
Delaware County 3.05 3/7/06 1,700,000 1,700,000
------------
TOTAL COMMERCIAL PAPER (Amortized Cost $8,750,000) 8,750,000
------------
MUNICIPAL BONDS AND NOTES - 10.8%
FLORIDA - 4.7%
Palm Beach County School District, TAN 4.00 9/28/06 4,000,000 4,022,466
Brevard County Florida School District 4.00 6/30/06 5,000,000 5,017,877
------------
9,040,343
------------
INDIANA - 1.3%
Elkhart Indiana Community Schools 4.35 12/29/06 2,500,000 2,520,557
------------
NEW JERSEY - 2.1%
New Jersey State Tax and Revenue 4.50 6/23/06 4,000,000 4,016,627
------------
OHIO - 1.9%
Stow Ohio Recreational Facilities 4.00 5/11/06 3,500,000 3,505,467
------------
TEXAS - 0.8%
Richardson Independent School District 2.75 4/1/06 1,500,000 1,500,000
------------
------------
TOTAL MUNICIPAL BONDS AND NOTES
(Amortized Cost $20,582,994) 20,582,994
------------
VARIABLE MUNICIPAL BONDS* - 83.5%
ALABAMA - 1.3%
Birmingham Alabama Special Care
Facilities Authority Revenues 4.00 6/30/06 2,500,000 2,500,000
------------
CONNECTICUT - 1.5%
Connecticut State Health and
Educational Facilities Authority Revenue,
Yale University, Series T-1 2.95 3/1/06 2,805,000 2,805,000
FLORIDA - 63.0%
ABN AMRO Munitops Certificates of Trust 3.20 3/2/06 3,650,000 3,650,000
Alachua County Florida Health
Facilities Authority Continuing Care,
LOC BNP Paribas 3.00 3/1/06 200,000 200,000
Collier County Educational Facilities
Authority Revenue, LOC Fifth Third Bank 3.18 3/3/06 7,000,000 7,000,000
Collier County, IDR, Health Care Facilities
Revenue, LOC Fifth Third Bank 3.18 3/3/06 2,800,000 2,800,000
Dade County Individual Development Authority 3.16 3/1/06 6,090,000 6,090,000
Dade County Water and Sewer Systems Revenue 3.17 3/1/06 2,500,000 2,500,000
Eagle Tax Exempt Trust 3.22 3/2/06 4,490,000 4,490,000
Florida Housing Finance Corp.,
Multifamily Revenue, Charleston, Series I-A 3.20 3/2/06 6,750,000 6,750,000
Florida Housing Finance Corp.,
Multi Family Revenue, Cypress Lake 3.20 3/2/06 3,500,000 3,500,000
Florida State Board of Education Lottery Revenue 3.22 7/1/19 1,995,000 1,995,000
Florida State Board of Education 3.22 3/2/06 2,500,000 2,500,000
Florida State Board of Education 3.22 3/2/06 8,000,000 8,000,000
Florida State Municipal Power
Agency Revenue, Stanton Project 3.20 3/1/06 1,000,000 1,000,000
Halifax Hospital Medical Center,
Health Care Facilities Revenue 3.21 3/1/06 1,200,000 1,200,000
Hillsborough County 2.90 6/15/06 2,100,000 2,100,000
Jacksonville Florida District
Energy Systems Revenue 3.17 3/2/06 5,325,000 5,325,000
Jacksonville Economic Development
Commission Health Care Facilities Revenue, Series A
LOC Fortis Banque Belgium, JP Morgan Chase Bank 3.20 3/2/06 2,000,000 2,000,000
Jacksonville Health Facilities Authority Hospital Revenue 3.17 3/1/06 2,295,000 2,295,000
Jacksonville Health Facilities Authority Hospital 3.13 4/27/06 5,000,000 5,000,000
Lakeland Educational Facilities Revenue 3.18 3/1/06 2,000,000 2,000,000
Lee County Florida Industrial Development
Authority Healthcare Facility 3.20 3/3/06 2,885,000 2,885,000
Marion County Hospital District Revenue 3.21 3/1/06 5,275,000 5,275,000
Orange County Housing Finance Authority
Multifamily Revenue 3.20 3/1/06 1,800,000 1,800,000
Orange County Industrial Development Authority,
IDR, LOC U.S. Bank Trust N.A 3.10 4/1/06 1,420,000 1,420,000
Orlando Utilities Commission Water &
Electric Revenue, Series B 3.19 3/1/06 7,000,000 7,000,000
Palm Beach County Revenue, Norton
Gallery, Inc. Project 3.22 3/1/06 4,000,000 4,000,000
Palm Beach County Revenue, Raymond F
Kravis Center Project, LOC Northern Trust Co. 3.15 3/2/06 6,400,000 6,400,000
Pinellas County Florida Health Facilities
Authority Revenue 3.22 3/2/06 1,910,000 1,910,000
Polk County School Board COP, Series A 3.18 3/2/06 2,000,000 2,000,000
Port Orange Revenue, Palmer College Project,
LOC Lasalle Bank N.A 3.21 3/2/06 4,500,000 4,500,000
St. Johns County, HFA Multi-Family Remington 3.21 3/1/06 7,600,000 7,600,000
See notes to financial
15
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments
February 28, 2006 (unaudited)
MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
---- ---- ------ -----
Sunshine State Givernmental Financing
Common Florida Revenue 3.17 3/1/06 2,000,000 2,000,000
Tampa Health Care Facilities Revenue
Lifelink Foundation, Inc. Project 3.19 3/1/06 1,500,000 1,500,000
Volusia County Florida Educational
Facility Authority Revenue 3.23 3/2/06 1,625,000 1,625,000
------------
120,310,000
------------
ILLINOIS - 1.1%
Channahon Illinois Revenue 3.21 3/2/06 2,000,000 2,000,000
------------
KANSAS - 1.0%
University of Kansas Hospital Authority 3.00 3/1/06 2,000,000 2,000,000
------------
LOUISIANA - 1.0%
Plaquemines Port Harbor and Terminal
District Port Facility Revenue,
International Marine Terminal
Project A, LOC Kredietbank N.V 2.60 3/15/06 2,000,000 2,000,000
------------
MICHIGAN - 0.6%
Michigan State Strategic Funding Ltd. Revenue 3.00 3/1/06 1,200,000 1,200,000
------------
MINNESOTA- 1.9%
Minnesota State Higher Education
Facilities Authority Revenue 3.00 3/1/06 1,025,000 1,025,000
University of Minnesota 3.23 3/1/06 2,500,000 2,500,000
------------
3,525,000
------------
NEW JERSEY- 0.7%
New Jersey State Educational
Facilities Authority Revenue 2.70 3/1/06 1,300,000 1,300,000
------------
NEBRASKA - 0.5%
Lancaster County Nebraska
Hospital Authority No. 1 Hospital Revenue 3.00 3/1/06 1,000,000 1,000,000
------------
PUERTO RICO - 8.2%
Puerto Rico Electric Power Authority Revenue 3.17 3/1/06 3,000,000 3,000,000
Puerto Rico Commonwealth 3.20 3/2/06 5,500,000 5,500,000
Puerto Rico Commonwealth Infrastructure
Financing Authority 3.17 3/2/06 1,495,000 1,495,000
Puerto Rico Commonwealth Infrastructure
Financing Authority 3.20 3/2/06 3,000,000 3,000,000
Puerto Rico Public Finance Corp. 3.19 6/24/06 2,695,000 2,695,000
------------
15,690,000
------------
SOUTH CAROLINA- 1.6%
Berkeley County South Carolina
Pollution Control Facilities Revenue 3.00 3/1/06 3,050,000 3,050,000
------------
OTHER TERRITORIES - 1.1%
Puttable Floating Option Tax-Exempt Receipts 3.33 3/2/06 2,080,000 2,080,000
------------
TOTAL VARIABLE MUNICIPAL BONDS
(Amortized Cost $159,460,000) 159,460,000
------------
TOTAL INVESTMENTS
(AMORTIZED COST $188,792,994) - 98.9% 188,792,994
OTHER ASSETS LESS LIABILITIES - 1.1% 2,081,160
------------
TOTAL NET ASSETS - 100% $190,874,154
============
- --------------------
* 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 indices.
The rate shown represents the rate in effect at February 28, 2006. The
maturity date shown reflects next rate change date.
(a) 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
Commerical Paper 4.6%
Variable Municipal Bonds 83.5
Municipal Bonds and Notes 10.8
-----
98.9
Other Assets less Liabilities 1.1
-----
100.0%
=====
See notes to financial statements.
16
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
FEBRUARY 28, 2006 (UNAUDITED)
ASSETS:
Investments, at value (amortized cost $188,792,994) $ 188,792,994
Cash 1,688,439
Receivables:
Interest 851,703
Other assets 255
-------------
TOTAL ASSETS 191,333,391
-------------
LIABILITIES:
Payables:
Dividends $ 428,709
Accrued expenses and other liabilities:
Investment manager 29,635
Distribution and shareholder servicing 893
-------------
TOTAL LIABILITIES 459,237
-------------
NET ASSETS $ 190,874,154
=============
COMPOSITION OF NET ASSETS:
Capital $ 190,927,600
Accumulated net realized loss from
investment transactions (53,446)
-------------
NET ASSETS $ 190,874,154
=============
Class A Shares
Net Assets $ 187,685,350
Shares outstanding (unlimited number of
shares authorized with no par value) 187,824,666
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class B Shares
Net Assets $ 3,188,804
Shares outstanding (unlimited number of
shares authorized with no par value) 3,191,304
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FEBRUARY 28, 2006 (UNAUDITED)
INVESTMENT INCOME:
Interest $ 2,695,725
-----------
Total Investment Income $ 2,695,725
EXPENSES:
Investment manager $ 184,663
Distribution and shareholder servicing:
Class A Shares 316,168
Class B Shares 6,993
Trustees fees 3,876
-----------
Total expenses before contractual
fee reimbursements $ 511,700
Contractual fee waivers and
expense reimbursements (322,042)
-----------
NET EXPENSES 189,658
-----------
NET INVESTMENT INCOME 2,506,067
-----------
NET REALIZED GAIN FROM INVESTMENT
TRANSACTIONS --
-----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 2,506,067
===========
See notes to financial statements.
17
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
FOR THE
SIX MONTHS ENDED FOR THE
FEBRUARY 28, 2006 YEAR ENDED
(UNAUDITED) AUGUST 31, 2005
------------- -------------
INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income $ 2,506,067 $ 3,330,173
Net realized gain from investment transactions -- 5,431
------------- -------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 2,506,067 3,335,604
------------- -------------
DIVIDENDS:
Net investment income:
Class A Shares (2,458,171) (3,204,440)
Class B Shares (47,896) (125,733)
------------- -------------
TOTAL DIVIDENDS TO SHAREHOLDERS (2,506,067) (3,330,173)
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL TRANSACTIONS (NOTE 4) 43,300,718 9,979,884
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS 43,300,718 9,985,315
NET ASSETS:
Beginning of year 147,573,436 137,588,121
------------- -------------
End of year (including accumulated
undistributed net investment income of
$0 and $0, respectively) $ 190,874,154 $ 147,573,436
============= =============
See notes to financial statements.
18
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
- ------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS, CLASS A SHARES
- ------------------------------------------------------------------------------------------------------------------------------
FOR THE
SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31,
FEBRUARY 28, 2006 -------------------------------------------------------------------
(UNAUDITED) 2005 2004 2003 2002 2001
--------- --------- --------- -------- --------- --------
Net Asset Value, Beginning of Year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
--------- --------- --------- -------- --------- --------
Investment Activities
Net investment income 0.013 0.018 0.008 0.014 0.015 $ 0.030
--------- --------- --------- -------- --------- --------
Dividends
Net investment income (0.013) (0.018) (0.008) (0.014) (0.015) $ (0.030)
--------- --------- --------- -------- --------- --------
Net Asset Value, End of Year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
========= ========= ========= ======== ========= ========
Total Return (a) 2.43% 1.79% 0.83% 1.03% 1.49% 3.42%
Ratios/Supplementary Data:
Net Assets at end of period (000) $ 187,687 $ 143,821 $ 123,388 $142,519 $ 174,104 $141,464
Ratio of expenses to average net
assets, before contractual
fee waivers and / or expense
reimbursements 0.55%(c) 0.55% 0.55% 0.55% 0.55% 0.55%
Ratio of expenses to average
net assets 0.20%(c) 0.20% 0.20% 0.20% 0.20% 0.20%
Ratio of net investment income
to average net assets 2.72%(c) 1.80% 0.83% 1.02% 1.47% 3.39%
- ------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS, CLASS B SHARES
- ------------------------------------------------------------------------------------------------------------------------------
FOR THE FOR THE
SIX MONTHS ENDED FOR THE PERIOD ENDED
FEBRUARY 28, 2006 YEAR ENDED FEBRUARY 25,2005(b)
(UNAUDITED) AUGUST 31, 2005 TO AUGUST 31, 2004
--------- --------------- -------------------
Net Asset Value, Beginning of Period $ 1.000 $ 1.000 $ 1.000
--------- --------- ---------
Investment Activities
Net investment income 0.012 0.015 0.003
Dividends
Net investment income (0.012) (0.015) (0.003)
--------- --------- ---------
Net Asset Value, End of Period $ 1.000 $ 1.000 $ 1.000
========= ========= =========
Total Return (a) 2.18% 1.54% 0.31%
Ratios/Supplementary Data:
Net Assets at end of period (000) $ 3,189 $ 3,752 $ 14,200
Ratio of expenses to average
net assets, before contractual
fee waivers and / or expense
reimbursements 0.55%(c) 0.55% 0.55%(c)
Ratio of expenses to average net assets 0.45%(c) 0.45% 0.45%(c)
Ratio of net investment income to
average net assets 2.40%(c) 1.39% 0.60%(c)
(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) Commencement of share class.
(c) Annualized.
See notes to financial statements.
19
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2006 (UNAUDITED)
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 iTrusti) is a Massachusetts business trust, organized on January 29,
1993 and is registered under the Investment Company Act of 1940, as
amended (the iActi), 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 iPortfolioi and
collectively as the iPortfoliosi) for the six months ending February 28,
2006. A separate report is issued for the U.S. Treasury Income Portfolio
for the six months ending February 28, 2006.
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
and disclosure of contingent 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:
As permitted under Rule 2a-7 of the 1940 Act, and certain
conditions therein, securities of the Portfolios are valued initially at
cost and thereafter assume a constant amortization to maturity of any
discount or premium.
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 Portfoliosi 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 Portfoliosi custodian, either physically or in book entry form. If
the seller defaults and the fair value of the collateral declines,
realization of the collateral by the Portfolios may be delayed or
limited.
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. Expenses specific to a class are charged to that class.
20
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 28, 2006 (UNAUDITED)
DIVIDENDS TO SHAREHOLDERS:
The Portfoliosi declare all net investment income daily as
dividends to their shareholders and distribute such dividends monthly.
Additional dividends are also paid to the Portfoliosi shareholders to the
extent necessary to avoid the federal excise tax on certain undistributed
income and net realized gains of registered investment companies.
Dividends are recorded on the ex-dividend date.
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 ibook/taxi 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
(See Note 7). 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 iregulated investment companyi 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 iManageri), 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. For the six months ending
February 28, 2006, the Manager earned fees of $207,256, $421,904, and
$184,663 from the U.S. Treasury Money Market Portfolio, the General Money
Market Portfolio, and the Tax-Exempt Money Market Portfolio,
respectively. At February 28, 2006, there was a payable due to the
Manager in the amount $30,000, $71,461, and $29,635 to the U.S. Treasury
Money Market Portfolio, the General Money Market Portfolio, and the
Tax-Exempt Money Market Portfolio, respectively.
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.
Certain trustees of the Trust are also officers of the Manager.
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 has provisions for
termination, limitation of liability and indemnification. 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.
21
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 28, 2006 (UNAUDITED)
DISTRIBUTION AND SHAREHOLDER SERVICING PLAN:
Integrity Investments, Inc. (the iDistributori), an affiliate of the
Manager, acts as exclusive distributor of the Trustis shares. The Trust has
adopted distribution and shareholder servicing plans for each class of shares
offered (together, the iPlansi) 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' Manager 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, 2006:
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 Manager and Distributor are
set forth on each Portfoliois Statement of Operations.
For the six months ending February 28, 2006, the Manager and
Distributor waived $45,713 of fees and expenses for the U.S. Treasury Money
Market Portfolio. These expenses related to $2,421 of fees attributable to Class
A, $37,518 attributable to Class B, and all Trustees fees of $5,774 incurred by
the Portfolio during the year.
For the six months ending February 28, 2006, the Manager and
Distributor waived $70,743 of fees and expenses for the General Money Market
Portfolio. These expenses related to $60,343 of fees attributable to Class A,
$50 attributable to Class B, and all Trustees fees of $10,350 incurred by the
Portfolio during the year.
For six months ending February 28, 2006, the Manager and Distributor
waived $12,867 of fees and expenses for the Tax-Exempt Money Market Portfolio.
These expenses related to $6,993 of fees attributable to Class A, $1,998
attributable to Class B, and all Trustees fees of $3,876 incurred by the
Portfolio during the year.
22
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 28, 2006 (UNAUDITED)
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 six months ended February
28, 2006 and the year ended August 31, 2005 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
SIX MONTH YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
FEBRUARY 28, AUGUST 31, FEBRUARY 28, AUGUST 31, FEBRUARY 28, AUGUST 31,
2006 2005 2006 2005 2006 2005
------------ ------------ ------------ -------------- ------------ ------------
CLASS A SHARES:
Issued 5,075,097 4,383,903 981,143,653 2,252,369,563 470,356,786 927,991,009
Reinvested 111 159 800 1,158 12 21
Redeemed (4,821,771) (3,535,140) (874,270,591) (2,235,375,246) (426,490,646) (907,554,407)
------------ ------------ ------------ -------------- ------------ ------------
Net increase (decrease)
in Class A Shares 253,437 848,922 106,873,862 16,995,475 43,866,152 20,436,623
------------ ------------ ------------ -------------- ------------ ------------
CLASS B SHARES:
Issued 74,195,895 365,525,182 332,976 13,342,623 4,811,121 19,064,385
Reinvested 94,040 110,502 -- 39 16,401 16,140
Redeemed (85,135,506) (370,001,659) (317,268) (18,304,206) (5,392,956) (29,537,264)
------------ ------------ ------------ -------------- ------------ ------------
Net increase (decrease)
in Class B Shares (10,845,571) (4,365,975) 15,708 (4,961,544) (565,434) (10,456,739)
------------ ------------ ------------ -------------- ------------ ------------
CLASS D SHARES:
Issued 184,430,336 270,321,902 38,979,444 33,647,663 -- --
Reinvested -- -- 5,461 15,694 -- --
Redeemed (203,162,021) (335,025,300) (21,492,261) (39,060,183) -- --
------------ ------------ ------------ -------------- ------------ ------------
Net decrease
in Class D Shares (18,731,685) (64,703,398) 17,492,644 (5,396,826) -- --
------------ ------------ ------------ -------------- ------------ ------------
CLASS E SHARES:
Issued 18,191,489 81,769,269 59,038,574 87,465,595 -- --
Reinvested 15 16 14 319 -- --
Redeemed (21,617,972) (81,051,656) (59,088,490) (98,864,353) -- --
------------ ------------ ------------ -------------- ------------ ------------
Net increase (decrease)
in Class E Shares (3,426,468) 717,629 (49,902) (11,398,439) -- --
------------ ------------ ------------ -------------- ------------ ------------
NET INCREASE
(DECREASE) IN SHARE
TRANSACTIONS (32,750,287) (67,502,822) 124,332,312 (4,761,334) 43,300,718 9,979,884
============ ============ ============ ============== ============ ============
23
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 28, 2006 (UNAUDITED)
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. As of February 28, 2006, there
were no outstanding securities on loan for any of the Portfolios.
6. CONCENTRATION OF CREDIT RISK:
As of February 28, 2006, approximately 71.4% 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 78.3% 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 six months ended February 28,
2006 and the year ended August 31, 2005 by the General Money Market
Portfolio and the U.S. Treasury Money Market Portfolio are ordinary
income for federal income tax purposes.
During the six months ended February 28, 2006 and the year
ended August 31, 2005, all of the distributions paid by the Tax-Exempt
Money Market Portfolio have been designated tax-exempt income
distributions.
Undistributed net investment income differs for financial
statement and tax purposes primarily due to the timing of dividend
payments.
At August 31, 2005 the following reclassification was made to
the capital account of the noted fund to reflect permanent book/tax
differences and income and gains available for distributions under
income tax regulations, which are primarily due to the differences
between book and tax treatment of the expiration of unused capital loss
carryforwards. Net investment income, net realized gains, and net assets
were not affected by these changes.
UNDISTRIBUTED
CAPITAL GAINS/
ACCUMULATED PAID IN
LOSSES CAPITAL
------ -------
General Money Market Fund $29,268 ($29,268)
24
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 28, 2006 (UNAUDITED)
For federal income tax purposes, the following Portfolios have capital loss
carryforwards as of August 31, 2005, which are available to offset future
realized gains, if any:
NAME AMOUNT EXPIRES
- -------------------------- --------- -------
U.S. Treasury Money Market $ 229,798 2008
21,859 2009
---------
$ 251,657
=========
General Money Market $ 51,799 2008
1,354 2013
---------
$ 53,153
=========
Tax-Exempt Money Market $ 8,571 2006
2,545 2008
42,330 2009
---------
$ 53,446
=========
Capital losses incurred after October 31
("post-October" losses) within the taxable year are deemed to arise on
the first business day of the fundis next taxable year. The Portfolio
indicated incurred and will elect to defer net capital losses noted
during 2005. The General Money Market Portfolio will defer post-October
losses in the amount of $22.
8. BENEFICIAL OWNERSHIP
The beneficial ownership, either directly or indirectly, of
more than 25% of the voting securities of a Portfolio creates a
presumption of control of the Portfolio under Section 2(a)(9) of the
Investment Company Act of 1940. As of February 28, 2006, Relico held
84.80% of Class A shares, Hare & Co. held 91.04% of Class B shares,
35.61% of Class D shares, and 84.74% of Class E shares, and First Union
National Bank held 49.33% of Class D shares of the U.S. Treasury Money
Market Portfolio in an omnibus account for the sole benefit of their
customers. First Union National Bank held 71.91% of the Class A shares
and Relico held 100% of the Class B and Class E shares, and 97.40% of
the Class D shares of the General Money Market Portfolio in an omnibus
account for the sole benefit of their customers. First Union National
Bank held 87.30% of Class A shares, Reich & Tang Services, Inc. (a
related party to the Sub-Advisor) held 33.94% and Relico held 66.06% of
Class B shares of the Tax-Exempt Money Market Portfolio in an omnibus
account for the sole benefit of their customers.
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 29, 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 33, Brenden is responsible for institutional sales of The Valiant
Fund in the Northeast and Midwest.
Proxy Voting Policies and Procedures
A description of the Portfoliosi proxy voting policies and procedures and
information regarding how the Portfoliosi 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 Portfoliosi Form N-PX on the Securities and
Exchange Commissionis 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 Trustis
Forms N-Q are available on the Commissionis website at www.sec.gov. The Trustis
Forms N-Q may also be reviewed and copied at the Commissionis Public Reference
Room in Washington, DC; information on the operation of the Public Reference
Room may be obtained by calling (800)-SEC-0330.
27
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THE VALIANT FUND
U.S. TREASURY INCOME PORTFOLIO
SEMI-ANNUAL REPORT
FEBRUARY 28, 2006
THE VALIANT FUND
U.S. TREASURY INCOME PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
FEBRUARY 28, 2006* (unaudited)
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.
2
THE VALIANT FUND
U.S. TREASURY INCOME PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
FOR THE
SIX MONTHS ENDED FOR THE
FEBRUARY 28, 2006 (a) YEAR ENDED
(UNAUDITED) AUGUST 31, 2005 (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 six months ended February 28,
2006.
(b) The Portfolio did not operate during the year ended August 31, 2005.
See notes to financial statements.
3
THE VALIANT FUND
U.S. TREASURY INCOME PORTFOLIO
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS, CLASS A SHARES
- --------------------------------------------------------------------------------------------------------------------------------
FOR THE
SIX MONTHS ENDED
FEBRUARY 28, 2006(a) FOR THE YEARS ENDED
----------------------------------------------------------------
(unaudited) 2005(b) 2004(c) 2003(d) 2002(e) 2001 (f)
--------------- ------------ ----------- ---------- --------- ----------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.00
--------------- ------------ ----------- ---------- --------- ----------
INVESTMENT ACTIVITIES
Net investment income -- -- -- -- -- 0.01
Net realized gain from
investment transactions -- -- -- -- -- --
--------------- ------------ ----------- ---------- --------- ----------
Total from investment activities -- -- -- -- -- 0.01
--------------- ------------ ----------- ---------- --------- ----------
DIVIDENDS
Net investment income -- -- -- -- -- (0.01)
--------------- ------------ ----------- ---------- --------- ----------
Total dividends -- -- -- -- -- (0.01)
--------------- ------------ ----------- ---------- --------- ----------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.00
=============== ============ =========== ========== ========= ==========
TOTAL RETURN -- -- -- -- -- 0.68%(g)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 1 $ 1 $ 1 $ 1 $ 1 $ 1
Ratio of expenses to average net assets -- -- -- -- -- 0.20%(h)
Ratio of net investment
income to average net assets -- -- -- -- -- 5.11%(h)
(a) The Portfolio did not operate during the six months ended February 28,
2006.
(b) The Portfolio did not operate during the year ended August 31, 2005.
(c) The Portfolio did not operate during the year ended August 31, 2004.
(d) The Portfolio did not operate during the year ended August 31, 2003.
(e) The Portfolio did not operate during the year ended August 31, 2002.
(f) The Portfolio operated from December 6, 2000 to January 24, 2001.
(g) Not Annualized.
(h) Annualized.
See notes to financial statements.
4
THE VALIANT FUND
U.S. TREASURY INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2006 (UNAUDITED)
1. ORGANIZATION:
The Valiant Fund (the iTrusti) is a Massachusetts business
trust, organized on January 29, 1993 and is registered under the
Investment Company Act of 1940, as amended (the iActi), 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 iPortfolioi) for the six
months ending February 28, 2006, during which period the portfolio did
not conduct operations. As the Portfolio did not have any operations
during the years ended August 31,2005 or August 31, 2004, 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. For the six months
ended February 28, 2006, 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. For the six
months ended February 28, 2006, 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 past six months.
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.
5
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 29, Denis is responsible for oversight and administration of The
Valiant Fund.
6
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 34, Brenden is responsible for institutional sales of The Valiant
Fund in the Northeast and Midwest.
PROXY VOTING POLICIES AND PROCEDURES
You may obtain a description of the Trustsi proxy voting policies and
procedures, without charge, upon request, by calling Integrity Investments, Inc.
at 1-800-828-2176 or by going to the Securities and Exchange Commissionis
website at www.sec.gov.
Information regarding how the Trust voted proxies relating to portfolio
securities, if applicable, during the most recent 12-month period ended June 30,
is also available, without charge and upon request, by calling Integrity
Investments, Inc. at 1-800-828-2176 or accessing the Trustsi Form N-PX on the
Securities and Exchange Commissionis 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 Trustis
Forms N-Q are available on the Commissionis website at www.sec.gov. The Trustis
Forms N-Q may also be reviewed and copied at the Commissionis Public Reference
Room in Washington, DC; information on the operation of the Public Reference
Room may be obtained by calling (800)-SEC-0330.
7
ITEM 2. CODE OF ETHICS.
Not applicable with semi annual filing.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable with semi annual filing.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable with semi annual filing.
ITEM 5: AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable with semi annual filing.
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. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASE OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
None.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
None.
ITEM 11. CONTROLS AND PROCEDURES.
a) Based on their evaluation on May 3, 2006, the President (principal
executive officer) and the Treasurer (principal financial officer) of the
Valiant Fund (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 12. EXHIBITS.
(a)(1) Not applicable with semi annual filing.
(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 APRIL 27, 2006
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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 APRIL 27, 2006
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By (Signature and Title) /S/ DENIS R. CURCIO
------------------------------------------------------
Denis R. Curcio, Treasurer
Date APRIL 27, 2006
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EXHIBIT (A)(1)
Not Applicable for this filing.