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
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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
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(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: 8/31/07
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Date of reporting period: 2/28/07
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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, 2007
THE VALIANT FUND
Semi-Annual Report - February 28, 2007
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 11
Statement of Operations 11
Statements of Changes in Net Assets 12
Financial Highlights 13
- -------------------------------------------------- -----------------------------
TAX-EXEMPT MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments 15
Statement of Assets and Liabilities 18
Statement of Operations 18
Statements of Changes in Net Assets 19
Financial Highlights 20
- -------------------------------------------------- -----------------------------
Notes to Financial Statements 21
Management of the Trust 28
- -------------------------------------------------- -----------------------------
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, 2007.
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
09/01/06 02/28/07 Six-Month Period Six-Month Period*
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
U.S. TREASURY MONEY MARKET PORTFOLIO - CLASS A
Actual $1,000.00 $1,025.28 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 $1,024.02 0.45% $2.26
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 $1,022.76 0.70% $3.51
Hypothetical (5% return before expenses) $1,000.00 $1,021.32 0.70% $3.51
- ----------------------------------------------------------------------------------------------------------------
-1-
- ----------------------------------------------------------------------------------------------------------------
U.S. TREASURY MONEY MARKET PORTFOLIO - CLASS E
Actual $1,000.00 $1,021.24 1.00% $5.01
Hypothetical (5% return before expenses) $1,000.00 $1,019.84 1.00% $5.01
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
GENERAL MONEY MARKET PORTFOLIO - CLASS A
Actual $1,000.00 $1,031.18 0.20% $1.01
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 $1,032.92 0.45% $2.27
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 $1,023.22 0.70% $3.51
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 $1,021.71 1.00% $5.01
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 $1,016.94 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 $1,015.68 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 portfolio's annualized
expense ratio for each fund, which represents the ongoing expenses as a
percentage of net assets for the six-months ended 02/28/07. 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, 2007 (unaudited)
MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
------- ------- ------------ ------------
U.S. TREASURY OBLIGATIONS - 57.3%
U.S. Treasury Bill (a) - 40.5% 4.920% 3/1/07 $ 60,000,000 $ 60,000,000
------------
U.S. Treasury Note - 16.8% 3.125 5/15/07 25,000,000 24,909,278
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Total U.S. TREASURY OBLIGATIONS
(Amortized Cost $84,909,278) 84,909,278
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REPURCHASE AGREEMENTS - 42.5%
Bank of America, Inc., 5.30%, due 03/01/07,
with a maturity value of $18,002,650
(Collateralized by various 4.485% - 5.5%
GNMA bonds valued at $18,360,000
with maturity dates 6/20/19 - 5/16/33) 18,000,000 18,000,000
Citigroup, Inc., 5.29%, due 03/01/07,
with a maturity value of $15,002,204
(Collateralized by various 5.0% - 7.5%
GNMA bonds valued at $15,300,000
with maturity dates 12/20/30 - 10/15/36) 15,000,000 15,000,000
Goldman Sachs Inc., 5.30%, due 03/01/07,
with a maturity value of $15,002,208
(Collateralized by various 0.53% - 4.828%
GNMA bonds valued at $15,300,001
with maturity dates 3/16/23 - 8/16/34) 15,000,000 15,000,000
UBS Paine Webber, 5.31%, due 03/01/07,
with a maturity value of $15,002,213
(Collateralized by various 5.5% - 6.5%
GNMA bonds valued at $15,300,151
with maturity dates 3/20/29 - 1/15/37) 15,000,000 15,000,000
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Total REPURCHASE AGREEMENTS
(Amortized Cost $63,000,000) 63,000,000
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Total Investments
(Amortized Cost $147,909,278) (b) - 99.8% 147,909,278
Other Assets less Liabilities - 0.2% 356,275
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TOTAL NET ASSETS - 100% $148,265,553
============
(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 Obligations 57.3%
Repurchase Agreements 42.5
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99.8
Other Assets less Liabilities - (0.2%) 0.2
------
100.0%
======
The accompanying notes are an integral part of these financial statements.
-3-
THE VALIANT FUND
U.S. TREASURY MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
FEBRUARY 28, 2007 (UNAUDITED)
ASSETS:
Investments at value (amortized cost $84,909,278) $ 84,909,278
Repurchase agreements (amortized cost $63,000,000) 63,000,000
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Total investments 147,909,278
Cash 624,979
Receivables:
Interest 238,039
Other assets 2,136
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TOTAL ASSETS 148,774,432
LIABILITIES:
Payables:
Dividends $ 419,300
Accrued expenses and other liabilities:
Investment manager 23,708
Distribution and shareholder servicing 65,871
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TOTAL LIABILITIES 508,879
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NET ASSETS $ 148,265,553
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COMPOSITION OF NET ASSETS:
Capital $ 148,515,995
Accumulated net realized loss from
investment transactions (250,442)
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NET ASSETS $ 148,265,553
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Class A Shares
Net assets $ 2,148,587
Shares outstanding (unlimited number
of shares authorized with no par value) 2,152,318
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class B Shares
Net assets $ 33,111,094
Shares outstanding (unlimited number of
shares authorized with no par value) 33,166,858
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class D Shares
Net assets $ 74,740,821
Shares outstanding (unlimited number of
shares authorized with no par value) 74,866,748
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class E Shares
Net assets $ 38,265,051
Shares outstanding (unlimited number of
shares authorized with no par value) 38,330,076
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FEBRUARY 28, 2007 (UNAUDITED)
INVESTMENT INCOME:
Interest $ 4,689,537
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TOTAL INVESTMENT INCOME 4,689,537
EXPENSES:
Investment manager $ 178,554
Distribution and shareholder servicing:
Class A Shares 4,205
Class B Shares 65,321
Class D Shares 190,168
Class E Shares 251,032
Trustees fees 4,468
-----------
Total expenses before contractual
fee reimbursements 693,748
Contractual fee reimbursements (27,336)
-----------
NET EXPENSES 666,412
-----------
NET INVESTMENT INCOME 4,023,125
-----------
NET REALIZED GAIN FROM INVESTMENT
TRANSACTIONS --
-----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 4,023,125
===========
The accompanying notes are an integral part of these financial statements.
-4-
THE VALIANT FUND
U.S. Treasury Money Market Portfolio
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income $ 4,023,125 $ 7,991,886
Net realized gain from investment transactions -- 1,215
------------- -------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 4,023,125 7,993,101
------------- -------------
DIVIDENDS:
Net investment income:
Class A Shares (60,702) (54,812)
Class B Shares (896,448) (2,596,109)
Class D Shares (1,731,413) (4,026,258)
Class E Shares (1,334,562) (1,314,707)
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TOTAL DIVIDENDS TO SHAREHOLDERS (4,023,125) (7,991,886)
------------- -------------
DECREASE IN NET ASSETS FROM CAPITAL TRANSACTIONS (NOTE 4) (57,053,316) (29,647,057)
------------- -------------
NET DECREASE IN NET ASSETS (57,053,316) (29,645,842)
NET ASSETS:
Beginning of period 205,318,869 234,964,711
------------- -------------
End of period (including accumulated
undistributed net investment income of
$0 and $0, respectively.) $ 148,265,553 $ 205,318,869
============= =============
The accompanying notes are an integral part of these 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, 2007 --------------------------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002
---------- ---------- ---------- -------- ---------- ----------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
---------- ---------- ---------- -------- ---------- ----------
INVESTMENT ACTIVITIES
Net investment income 0.025 0.043 0.023 0.009 0.012 0.021
---------- ---------- ---------- -------- ---------- ----------
DIVIDENDS
Net investment income (0.025) (0.043) (0.023) (0.009) (0.012) (0.021)
---------- ---------- ---------- -------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
========== ========== ========== ======== ========== ==========
TOTAL RETURN (A) 4.99% 4.34% 2.31% 0.92% 1.22% 2.05%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 2,149 $ 1,531 $ 1,186 $ 339 $ 7,159 $ 7,260
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 5.05%(b) 4.23% 2.58% 0.87% 1.21% 2.12%
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS, CLASS B SHARES
- --------------------------------------------------------------------------------
FOR THE
SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31,
FEBRUARY 28, 2007 ------------------------------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002
----------- ----------- ----------- ----------- ------------ ------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------- ----------- ----------- ----------- ------------ ------------
INVESTMENT ACTIVITIES
Net investment income $ 0.024 $ 0.040 0.020 0.007 0.010 0.018
----------- ----------- ----------- ----------- ------------ ------------
DIVIDENDS
Net investment income $ (0.024) $ (0.040) (0.020) (0.007) (0.010) (0.018)
----------- ----------- ----------- ----------- ------------ ------------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
=========== =========== =========== =========== ============ ============
TOTAL RETURN (A) 4.73% 4.08% 2.06% 0.67% 0.96% 1.80%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 33,111 $ 48,667 $ 85,223 $ 89,633 $ 126,617 $ 146,246
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 0.45%(b) 0.45% 0.45% 0.45% 0.45% 0.45%
Ratio of net investment income to
average net assets 4.80%(b) 3.94% 2.05% 0.65% 0.95% 1.77%
(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.
The accompanying notes are an integral part of these 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, 2007 ------------------------------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002
----------- ----------- ------------ ------------ ------------ ------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------- ----------- ------------ ------------ ------------ ------------
INVESTMENT ACTIVITIES
Net investment income $ 0.023 $ 0.038 0.018 0.004 0.008 0.015
----------- ----------- ------------ ------------ ------------ ------------
DIVIDENDS
Net investment income $ (0.023) $ (0.038) (0.018) (0.004) (0.008) (0.015)
----------- ----------- ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
=========== =========== ============ ============ ============ ============
TOTAL RETURN (A) 4.47% 3.82% 1.80% 0.42% 0.71% 1.54%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 74,741 $ 83,743 $ 132,938 $ 197,640 $ 286,191 $ 325,896
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 4.55%(b) 3.72% 1.70% 0.41% 0.71% 1.54%
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS, CLASS E SHARES
- --------------------------------------------------------------------------------
FOR THE
SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31,
FEBRUARY 28, 2007 -----------------------------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002
----------- ----------- ------------ ------------ ------------ ------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------- ----------- ------------ ------------ ------------ ------------
INVESTMENT ACTIVITIES
Net investment income $ 0.021 $ 0.035 0.015 0.001 0.005 0.013
----------- ----------- ------------ ------------ ------------ ------------
DIVIDENDS
Net investment income $ (0.021) $ (0.035) (0.015) (0.001) (0.005) (0.013)
----------- ----------- ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
=========== =========== ============ ============ ============ ============
TOTAL RETURN (A) 4.16% 3.52% 1.50% 0.12% 0.41% 1.24%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 38,265 $ 71,378 $ 15,617 $ 14,903 $ 28,437 $ 105,257
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 4.25%(b) 3.82% 1.55% 0.10% 0.48% 1.32%
(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.
The accompanying notes are an integral part of these financial statements.
-7-
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments
February 28, 2007 (unaudited)
MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
------ -------- ------------ -----------
COMMERCIAL PAPER - 34.2%
Commercial Banks - 4.5%
Anglo Irish Bank Corp. 5.26% 04/11/07 $ 20,000,000 $ 19,880,303
------------
EDUCATION - 1.2%
Tennessee School Board Authority 5.33 03/14/07 5,388,000 5,388,000
------------
INDUSTRIES - 2.5%
Walnut Energy Center Authority 5.25 05/15/07 10,800,000 10,681,875
------------
SPECIAL PURPOSE ENTITY - 22.8%
Chesham Finance 5.25 04/10/07 20,000,000 19,883,222
Market Street Funding 5.28 03/19/07 20,000,000 19,947,200
Sheffield Receivables Corp. 5.26 03/22/07 20,000,000 19,938,633
Three Rivers Funding Corp. 5.26 03/22/07 20,000,000 19,938,634
Windmill Funding Corp. 5.26 03/06/07 20,000,000 19,985,389
------------
99,693,078
------------
US MUNICIPALS - 3.2%
Catholic Health Initiatives 5.35 03/14/07 14,000,000 14,000,000
------------
TOTAL COMMERCIAL PAPER
(AMORTIZED COST $149,643,256) 149,643,256
------------
CORPORATE OBLIGATIONS* - 14.9%
FINANCIAL SERVICES - 6.9%
Bank of America 5.32 03/01/07 10,000,000 10,000,000
Merrill Lynch & Co. 5.29 03/14/07 10,000,000 10,000,000
Royal Bank of Canada 5.40 11/09/07 10,000,000 10,000,000
Vista Funding 5.64 03/01/07 400,000 400,000
------------
30,400,000
------------
FOOD - 0.1%
Jacksons Food Stores, Inc. 5.37 03/01/07 498,000 498,000
------------
HEALTH SERVICES - 1.0%
Gastroenterology Associates, LLC 5.32 03/01/07 2,105,000 2,105,000
Louisiana Endoscopy 5.32 03/01/07 1,380,000 1,380,000
Riverview Medical Office Building 5.36 03/01/07 700,000 700,000
------------
4,185,000
------------
LEISURE - 0.7%
Commonwealth Country Club, Ltd. 5.36 03/01/07 3,000,000 3,000,000
------------
REAL ESTATE - 1.6%
208 Associates LLC 5.37 03/01/07 765,000 765,000
Aztec Properties LLC 5.34 03/01/07 1,893,000 1,893,000
CMW Real Estate LLC 5.36 03/01/07 2,090,000 2,090,000
El Dorado Enterprises of Miami FL 5.44 03/01/07 110,000 110,000
G & J Properties II 5.37 03/01/07 850,000 850,000
Ordeal Properties LLC 5.37 03/01/07 1,210,000 1,210,000
------------
6,918,000
------------
The accompanying notes are an integral part of these financial statements.
-8-
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments
February 28, 2007 (unaudited)
MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
------ -------- ------------ -----------
SPECIAL PURPOSE ENTITY - 4.6%
Barry-Wehmiller Group 5.37% 03/01/07 $ 990,000 $ 990,000
Best One Tire & Service 5.37 03/01/07 800,000 800,000
Butler County, Surgical Properties 5.37 03/01/07 1,310,000 1,310,000
Chuo Mubea Suspe Chuomuo 5.37 03/01/07 275,000 275,000
Denver LLC 5.64 03/01/07 360,000 360,000
Exal Corp. 5.37 03/01/07 1,195,000 1,195,000
FE LLC 5.35 03/01/07 850,000 850,000
GCG Portage LLC 5.42 03/01/07 1,125,000 1,125,000
GMC Financing, LLC 5.32 03/01/07 2,615,000 2,615,000
ISO Building LLC 5.37 03/01/07 800,000 800,000
K. C. Jordan & Associates 5.37 03/01/07 700,000 700,000
MMR Development Co. 5.37 03/01/07 1,050,000 1,050,000
Physicians Center LP 5.32 03/01/07 3,010,000 3,010,000
Taylor Steel, Inc. 5.37 03/01/07 1,885,000 1,885,000
Village Enterprises 5.37 03/01/07 970,000 970,000
Wellington Green LLC 5.37 03/01/07 2,060,000 2,060,000
------------
19,995,000
------------
TOTAL CORPORATE OBLIGATIONS
(Amortized Cost $64,996,000) 64,996,000
------------
CERTIFICATE OF DEPOSIT - 24.0%
BANKING - 24.0%
CALYON Bank 5.43 06/04/07 10,000,000 10,000,125
Citibank 5.32 03/20/07 20,000,000 20,000,000
Credit Industrial 5.33 07/16/07 20,000,000 20,000,000
First Tennessee Bank 5.31 04/09/07 15,000,000 15,000,000
Svenska Handelsbanken 5.37 10/26/07 10,000,000 9,998,426
Wells Fargo 5.25 04/20/07 10,000,000 10,000,000
Wilmington Trust 5.32 06/12/07 20,000,000 20,000,000
------------
TOTAL CERTIFICATE OF DEPOSIT
(Amortized Cost $104,998,551) 104,998,551
------------
MUNICIPAL NOTES AND BONDS* - 3.6%
ILLINOIS - 1.3%
Cook County Illinois School District 5.40 12/01/07 1,000,000 1,000,000
Upper Illinois River Valley
Development Authority 5.32 03/01/07 4,595,000 4,595,000
------------
5,595,000
------------
MICHIGAN - 0.6%
Michigan City Industrial
Economic Development Revenue 5.37 03/01/07 1,205,000 1,205,000
Michigan Public Education
Facilities Authority Revenue 5.70 08/31/07 1,630,000 1,630,000
------------
2,835,000
------------
NEW YORK - 1.0%
Baird Properties LLC 5.39 03/01/07 1,725,000 1,725,000
IHA Capital Development Corp. 5.37 03/01/07 1,500,000 1,500,000
New York City NY Individual
Development Agycivic Facility Revenue 5.31 03/01/07 1,435,000 1,435,000
------------
4,660,000
------------
OHIO - 0.6%
Hopkins Waterhouse LLC 5.36 03/01/07 740,000 740,000
Mercer County, HealthCare Facilities 5.37 03/02/07 1,825,000 1,825,000
------------
2,565,000
------------
VIRGINIA - 0.1%
Ashland Industrial Development Authority 5.54 03/01/07 290,000 290,000
------------
------------
TOTAL MUNICIPAL NOTES AND BONDS
(Amortized Cost $15,945,000) 15,945,000
------------
The accompanying notes are an integral part of these financial statements.
-9-
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments
February 28, 2007 (unaudited)
MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
------ -------- ------------ -----------
TIME DEPOSIT - 4.6%
Rabo Bank 5.32% 03/01/07 $ 20,000,000 $ 20,000,000
------------
Total TIME DEPOSIT
(Amortized Cost $20,000,000) 20,000,000
------------
REPURCHASE AGREEMENT - 18.6%
Bank of America, Inc., 5.30%, due 03/01/07,
with a maturity value of $81,411,984.
(Collateralized by various 0.88% - 5.57%
GNMA bonds valued at $83,028,001
with maturity dates 6/20/18 - 7/16/40) 81,400,000 81,400,000
------------
Total REPURCHASE AGREEMENTS
(Amortized Cost $81,400,000) 81,400,000
------------
Total Investments
(Amortized Cost $436,982,807) (a) - 99.9% 436,982,807
Other Assets less Liabilities - 0.1% 653,887
------------
TOTAL NET ASSETS - 100% $437,636,694
============
- ------------
* 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, 2007. Maturity
date shown reflects next rate change date.
(a) The cost of investments for federal income tax purposes at February 28,
2007 is $436,983,474.
GNMA - Government National Mortgage Association
LLC - Limited Liability Corporation
LP - Limited Partnership
VALIANT GENERAL MONEY MARKET PORTFOLIO
Commercial Paper 34.2%
Corporate Obligations 14.9
Certificate of Deposit 24.0
Municipal Notes and Bonds 3.6
Time Deposit 4.6
Repurchase Agreement 18.6
------
99.9
Other Assets less Liabilities 0.1
------
100.0%
======
The accompanying notes are an integral part of these financial statements.
-10-
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
FEBRUARY 28, 2007 (UNAUDITED)
ASSETS:
Investments, at value (amortized cost $355,582,807) $ 355,582,807
Repurchase agreements (amortized cost $81,400,000) 81,400,000
-------------
Total investments 436,982,807
Cash 55,318
Receivables:
Interest 2,272,840
Other assets 101
-------------
TOTAL ASSETS 439,311,066
LIABILITIES:
Payables:
Dividends $ 1,563,740
Accrued expenses and other liabilities:
Investment manager 62,383
Distribution and shareholder servicing 48,249
-------------
TOTAL LIABILITIES 1,674,372
-------------
NET ASSETS $ 437,636,694
=============
COMPOSITION OF NET ASSETS:
Capital $ 437,690,250
Accumulated net realized loss from
investment transactions (53,556)
-------------
NET ASSETS $ 437,636,694
=============
Class A Shares
Net assets $ 334,878,337
Shares outstanding (unlimited number
of shares authorized with no par value) 334,936,249
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class B Shares
Net assets $ 1,310,675
Shares outstanding (unlimited number
of shares authorized with no par value) 1,310,929
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class D Shares
Net assets $ 65,049,289
Shares outstanding (unlimited number
of shares authorized with no par value) 65,061,513
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class E Shares
Net assets $ 36,398,393
Shares outstanding (unlimited number
of shares authorized with no par value) 36,410,827
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FEBRUARY 28, 2007 (UNAUDITED)
INVESTMENT INCOME:
Interest $ 11,485,723
------------
TOTAL INVESTMENT INCOME 11,485,723
EXPENSES:
Investment manager $ 430,332
Distribution and shareholder servicing:
Class A Shares 568,805
Class B Shares 1,998
Class D Shares 166,096
Class E Shares 150,881
Trustees fees 11,955
------------
Total expenses before contractual
fee reimbursements 1,330,067
Contractual fee waivers and
expense reimbursements (581,331)
------------
NET EXPENSES 748,736
------------
NET INVESTMENT INCOME 10,736,987
------------
NET REALIZED GAIN FROM INVESTMENT
TRANSACTIONS 286
------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 10,737,273
============
The accompanying notes are an integral part of these financial statements.
-11-
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 28, 2007 AUGUST 31, 2006
----------------- ---------------
INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income $ 10,736,987 $ 20,210,907
Net realized gain/(loss)
from investment transactions 286 (667)
------------- -------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 10,737,273 20,210,240
------------- -------------
DIVIDENDS:
Net investment income:
Class A Shares (8,349,749) (16,401,785)
Class B Shares (27,900) (3,947)
Class D Shares (1,540,906) (2,533,211)
Class E Shares (818,432) (1,271,964)
------------- -------------
TOTAL DIVIDENDS TO SHAREHOLDERS (10,736,987) (20,210,907)
------------- -------------
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL TRANSACTIONS (NOTE 4) 15,897,114 58,348,826
------------- -------------
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS 15,897,400 58,348,159
NET ASSETS:
Beginning of year 421,739,294 369,391,135
------------- -------------
------------- -------------
End of year (including accumulated
undistributed net investment income of
$0 and $0, respectively) $ 437,636,694 $ 421,739,294
============= =============
The accompanying notes are an integral part of these 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, 2007 -----------------------------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002
------------ ----------- ------------ ------------ ------------ ------------
Net Asset Value, Beginning of Year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------------ ------------ ------------ ------------ ------------ ------------
Investment Activities
Net investment income $ 0.025 $ 0.044 0.024 0.010 0.013 0.022
------------ ------------ ------------ ------------ ------------ ------------
Dividends
Net investment income $ (0.025) $ (0.044) (0.024) (0.010) (0.013) (0.022)
------------ ------------ ------------ ------------ ------------ ------------
Net Asset Value, End of Year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
============ ============ ============ ============ ============ ============
Total Return (a) 5.09% 4.45% 2.42% 1.01% 1.29% 2.24%
Ratios/Supplementary Data:
Net Assets at end of period (000) $ 334,878 $ 317,711 $ 273,911 $ 256,923 $ 364,392 $ 357,676
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 5.14%(b) 4.46% 2.40% 0.99% 1.28% 2.22%
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS, CLASS B SHARES
- --------------------------------------------------------------------------------
FOR THE
SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31,
FEBRUARY 28, 2007 -----------------------------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002
------------ ----------- ------------ ------------ ------------ ------------
Financial Highlights, Class B Shares
Net Asset Value, Beginning of Year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------------ ------------ ------------ ------------ ------------ ------------
Investment Activities
Net investment income $ 0.024 $ 0.041 0.021 0.008 0.010 0.019
------------ ------------ ------------ ------------ ------------ ------------
Dividends
Net investment income $ (0.024) $ (0.041) (0.021) (0.008) (0.010) (0.019)
------------ ------------ ------------ ------------ ------------ ------------
Net Asset Value, End of Year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
============ ============ ============ ============ ============ ============
Total Return (a) 4.83% 4.22% 2.16% 0.76% 1.04% 1.98%
Ratios/Supplementary Data:
Net Assets at end of period (000) $ 1,311 $ 98 $ 103 $ 5,064 $ 10,620 $ 15,719
Ratio of expenses to average
net assets, before contractual
fee waivers and/or expense
reimbursements 0.55%(b) 0.55% 0.55% 0.50% 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 4.89%(b) 4.12% 1.53% 0.74% 1.03% 1.91%
(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.
The accompanying notes are an integral part of these 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, 2007 -----------------------------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002
------------ ----------- ------------ ------------ ------------ ------------
Net Asset Value, Beginning of Year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------------ ------------ ------------ ------------ ------------ ----------
Investment Activities
Net investment income $ 0.023 $ 0.039 0.019 0.005 0.007 0.016
------------ ------------ ------------ ------------ ------------
Dividends
Net investment income $ (0.023) $ (0.039) (0.019) (0.005) (0.007) (0.016)
------------ ------------ ------------ ------------ ------------ ------------
Net Asset Value, End of Year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
============ ============ ============ ============ ============ ============
Total Return (a) 4.57% 3.96% 1.91% 0.50% 0.79% 1.73%
Ratios/Supplementary Data:
Net Assets at end of period (000) $ 65,049 $ 65,177 $ 53,722 $ 59,116 $ 74,943 $ 40,662
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 4.64%(b) 3.95% 1.87% 0.50% 0.73% 1.55%
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS, CLASS E SHARES
- --------------------------------------------------------------------------------
FOR THE
SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31,
FEBRUARY 28, 2007 -----------------------------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002
------------ ----------- ------------ ------------ ------------ ------------
Net Asset Value, Beginning of Year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------------ ------------ ------------ ------------ ------------
Investment Activities
Net investment income $ 0.022 $ 0.036 0.016 0.002 0.005 0.014
Dividends
Net investment income $ (0.022) $ (0.036) (0.016) (0.002) (0.005) (0.014)
------------ ------------ ------------ ------------ ------------
Net Asset Value, End of Year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
============ ============ ============ ============ ============
Total Return (a) 4.26% 3.65% 1.61% 0.20% 0.49% 1.42%
Ratios/Supplementary Data:
Net Assets at end of period (000) $ 36,399 $ 38,753 $ 35,655 $ 47,050 $ 58,005 $ 83,742
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 4.34%(b) 3.61% 1.54% 0.20% 0.51% 1.45%
(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.
The accompanying notes are an integral part of these financial statements.
-14-
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments
February 28, 2007 (unaudited)
MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
------ -------- ------------ ------------
COMMERCIAL PAPER -6.3%
FLORIDA - 6.3%
Jacksonville Health Facilities Authority Hospital 3.60% 04/09/07 $ 5,000,000 $ 5,000,000
Sarasota County Public Hospital, LOC Suntrust Bank 3.52 03/06/07 4,050,000 4,050,000
------------
TOTAL COMMERCIAL PAPER (Amortized Cost $9,050,000) 9,050,000
------------
MUNICIPAL BONDS AND NOTES - 9.5%
Ohio - 2.2%
Adams County Local School District Anticipatory Notes 4.40 05/15/07 3,150,000 3,154,804
------------
PENNSYLVANIA -5.3%
Delaware County 3.63 06/13/07 7,625,000 7,625,000
------------
WISCONSIN - 2.0%
St. Francis School District Anticipatory Notes 3.75 11/01/07 2,800,000 2,801,807
------------
TOTAL MUNICIPAL BONDS AND NOTES (AMORTIZED COST $13,581,611) 13,581,611
------------
VARIABLE MUNICIPAL BONDS* - 83.8%
ALABAMA - 3.9%
Birmingham Alabama Special Care Facilities Authority Revenues 3.68 03/01/07 2,500,000 2,500,000
Jefferson County Public Park and Recreation Board Revenue 3.69 03/01/07 2,000,000 2,000,000
Montgomery Individual Development Board of
Pollution Control and Solid Waste Disposal 3.63 03/01/07 1,000,000 1,000,000
------------
5,500,000
------------
CONNECTICUt - 4.7%
Connecticut State Health and Educational Facilities
Authority Revenue 3.62 03/01/07 5,155,000 5,155,000
Connecticut State Special Tax Obligation Revenue,
Series 1 3.53 03/07/07 1,500,000 1,500,000
------------
6,655,000
------------
FLORIDA - 36.0%
ABN AMRO Munitops Certificates of Trust 3.69 03/01/07 3,650,000 3,650,000
ABN AMRO Munitops Certificates of Trust, 144A 3.69 03/01/07 3,500,000 3,500,000
Dade County Individual Development Authority, Series B 3.39 03/07/07 1,000,000 1,000,000
Dade County Water and Sewer Systems Revenue 3.51 03/07/07 2,500,000 2,500,000
Florida Housing Finance Corp., Multi - Family Revenue,
Charleston, Series I-A 3.66 03/01/07 6,750,000 6,750,000
Florida State Board of Education 3.70 03/01/07 5,955,000 5,955,000
Florida State Municipal Power Agency Revenue, Stanton Project 3.52 03/07/07 1,000,000 1,000,000
Halifax Hospital Medical Center, Health Care Facilities Revenue 3.52 03/07/07 1,200,000 1,200,000
Jacksonville Economic Development Commission Health Care
Facilities Revenue, Series A
LOC Fortis Banque Belgium, JP Morgan Chase Bank 3.68 03/01/07 2,000,000 2,000,000
Lee County Industrial Development Authority
Healthcare Facility 3.69 03/02/07 2,740,000 2,740,000
Marion County Hospital District Revenue 3.54 03/07/07 5,275,000 5,275,000
Orange County HFA Multifamily Revenue, Series E 3.54 03/07/07 1,800,000 1,800,000
Orange County Industrial Development Authority,
IDR, LOC U.S. Bank Trust N.A. 4.00 04/01/07 1,325,000 1,325,000
Pinellas County Health Facilities
Authority Revenue 3.70 03/01/07 1,910,000 1,910,000
Polk County School Board COP, Series A 3.64 03/01/07 2,000,000 2,000,000
Port Orange Revenue, Palmer College Project,
LOC Lasalle Bank N.A. 3.66 03/01/07 4,500,000 4,500,000
Tampa Health Care Facilities Revenue,
Lifelink Foundation, Inc. Project 3.66 03/07/07 1,400,000 1,400,000
Volusia County Educational Facility
Authority Revenue 3.71 03/01/07 3,145,000 3,145,000
------------
51,650,000
------------
The accompanying notes are an integral part of these financial statements.
-15-
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments
February 28, 2007 (unaudited)
MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
------ -------- ------------ ------------
GEORGIA - 2.9%
De Kalb County Housing Authority
Multifamily Housing Revenue 3.57% 03/07/07 $ 4,200,000 $ 4,200,000
------------
ILLINOIS - 3.2%
Channahon Revenue, Series B 3.67 03/01/07 2,000,000 2,000,000
Illinois State Series B 3.53 03/07/07 2,500,000 2,500,000
------------
4,500,000
------------
KENTUCKY - 3.3%
Jeffersontown Lease Program Revenue 3.64 03/07/07 1,370,000 1,370,000
Morehead League of Cities Funding Trust,
Lease Program Revenue, Series A 3.69 03/02/07 1,400,000 1,400,000
Richmond League of Cities Funding Trusts,
Lease Program Revenue, Series A 3.69 03/02/07 2,000,000 2,000,000
------------
4,770,000
------------
LOUISIANA - 8.1%
East Baton Rouge Parish La Pollution Control Revenue 3.61 03/01/07 6,750,000 6,750,000
Plaquemines Port La Harbor & Terminal
District Port Facilities Revenue 3.85 08/31/07 4,895,000 4,895,000
------------
11,645,000
------------
MISSOURI - 1.3%
Missouri St. Health And Educational Facilities
Authority Health Facilities Revenue 3.66 03/01/07 1,900,000 1,900,000
------------
NORTH CAROLINA - 4.1%
Mecklenburg County Partnership 3.60 03/01/07 2,000,000 2,000,000
University of North Carolina Revenues, Series B 3.50 03/07/07 3,895,000 3,895,000
------------
5,895,000
------------
NEBRASKA - 2.4%
Creighton University Educational Finance Authority Revenue 3.63 03/01/07 2,100,000 2,100,000
Nebraska Educational Finance Authority Revenue 3.64 03/01/07 1,375,000 1,375,000
------------
3,475,000
------------
NEW YORK - 2.7%
New York City Transitional Finance Authority 3.60 03/01/07 3,900,000 3,900,000
------------
PUERTO RICO - 1.1%
Puerto Rico Individual, Medical & Environmental
Pollution Control Facilities Financing Authority 3.55 03/01/07 1,500,000 1,500,000
------------
TEXAS - 4.8%
Harris County Health Facilities Development
Corporation Special Facilities Revenue 3.64 03/01/07 1,900,000 1,900,000
North Central Texas Health Facilities Development
Corporation Revenue 3.63 03/01/07 1,000,000 1,000,000
Richardson Independent School District 3.66 03/01/07 1,500,000 1,500,000
Texas Transportation Common Revenue, Series B 3.52 03/07/07 2,500,000 2,500,000
------------
6,900,000
------------
UTAH - 0.7%
Emery County Pollution Control Revenue 3.64 03/01/07 1,050,000 1,050,000
------------
The accompanying notes are an integral part of these financial statements.
-16-
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments
February 28, 2007 (unaudited)
MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
------ -------- ------------ ------------
VIRGINIA - 3.2%
Loudoun County Development Authority Revenue 3.65% 03/01/07 $ 3,000,000 $ 3,000,000
Loudoun County Development Authority Revenue 3.63 03/01/07 1,620,000 1,620,000
------------
4,620,000
------------
WASHINGTON - 1.4%
King County Putters-Series 1184 3.70 03/01/07 1,995,000 1,995,000
------------
TOTAL VARIABLE MUNICIPAL BONDS
(AMORTIZED COST $120,155,000) 120,155,000
------------
TOTAL INVESTMENTS (AMORTIZED COST $142,786,611) (a) - 99.6% 142,786,611
OTHER ASSETS LESS LIABILITIES - 0.4% 610,453
------------
TOTAL NET ASSETS - 100% $143,397,064
============
* 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, 2007. The
maturity date shown reflects next rate change date.
Series 144A securities were purchased pursuant to Rule 144A under the Securities
Act of 1933 and may not be resold subject to that rule except to qualified
institutional buyers. Unless otherwise noted, Series 144A securities are deemed
to be liquid.
(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
Commercial Paper 6.3 %
Municipal Bonds and Notes 9.5
Variable Municipal Notes 83.8
-----
99.6
Other Assets less Liabilities 0.4
-----
100.0%
=====
The accompanying notes are an integral part of these financial statements.
-17-
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
FEBRUARY 28, 2007 (UNAUDITED)
ASSETS:
Investments, at value (amortized cost $142,786,611) $ 142,786,611
Cash 200,941
Receivables:
Interest 836,348
Other assets 280
-------------
TOTAL ASSETS 143,824,180
-------------
LIABILITIES:
Payables:
Dividends $ 402,070
Accrued expenses and other liabilities:
Investment manager 24,066
Distribution and shareholder servicing 980
-------------
TOTAL LIABILITIES 427,116
-------------
NET ASSETS $ 143,397,064
=============
COMPOSITION OF NET ASSETS:
Capital $ 143,441,939
Accumulated net realized loss from
investment transactions (44,875)
-------------
NET ASSETS $ 143,397,064
=============
Class A Shares
Net Assets $ 140,800,668
Shares outstanding (unlimited number of shares authorized with no par value) 140,936,307
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class B Shares
Net Assets $ 2,596,396
Shares outstanding (unlimited number of shares authorized with no par value) 2,602,573
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FEBRUARY 28, 2007 (UNAUDITED)
INVESTMENT INCOME:
Interest $ 2,616,097
-----------
Total Investment Income 2,616,097
Expenses:
Investment manager $ 145,640
Distribution and shareholder servicing:
Class A Shares 250,919
Class B Shares 3,951
Trustees fees 3,578
-----------
Total expenses before contractual
fee reimbursements $ 404,088
Contractual fee waivers and
expense reimbursements (255,626)
-----------
Net Expenses 148,462
-----------
Net Investment Income 2,467,635
-----------
Net realized gain from investment
transactions --
-----------
Net increase in net assets resulting from
operations $ 2,467,635
===========
The Valiant Fund
Tax-Exempt Money Market Portfolio
Statements of Changes in Net Assets
The accompanying notes are an integral part of these financial statements.
-18-
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED MONTHS ENDED
FEBRUARY 28, AUGUST 31,
2007 2006
------------- -------------
INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income $ 2,467,635 $ 5,228,446
Net realized gain from investment transactions -- --
------------- -------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 2,467,635 5,228,446
------------- -------------
DIVIDENDS:
Net investment income:
Class A Shares (2,432,220) (5,128,154)
Class B Shares (35,415) (100,292)
------------- -------------
TOTAL DIVIDENDS TO SHAREHOLDERS (2,467,635) (5,228,446)
------------- -------------
INCREASE IN NET ASSETS FROM
CAPITAL TRANSACTIONS (NOTE 4) (19,587,960) 15,411,588
------------- -------------
NET INCREASE IN NET ASSETS (19,587,960) 15,411,588
NET ASSETS:
Beginning of year 162,985,024 147,573,436
------------- -------------
End of year (including accumulated undistributed
net investment income of $0 and $0, respectively) $ 143,397,064 $ 162,985,024
============= =============
The accompanying notes are an integral part of these financial statements.
-19-
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
FINACIAL HIGHLIGHTS, CLASS A SHARES
- --------------------------------------------------------------------------------
FOR THE
SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31,
FEBRUARY 28, 2007 ------------------------------------------------------------------------
(unaudited) 2006 2005 2004 2003 2002
------------ ------------ ------------ ------------ ------------ ------------
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 $ 0.029 0.018 0.008 0.014 0.015
------------ ------------ ------------ ------------ ------------ ------------
Dividends
Net investment income $ (0.017) $ (0.029) (0.018) (0.008) (0.014) (0.015)
------------ ------------ ------------ ------------ ------------ ------------
Net Asset Value, End of Year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
============ ============ ============ ============ ============ ============
Total Return (a) 3.36% 2.99% 1.79% 0.83% 1.03% 1.49%
Ratios/Supplementary Data:
Net Assets at end of period (000) $ 140,801 $ 160,332 $ 143,821 $ 123,388 $ 142,519 $ 174,104
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 3.39%(c) 2.96% 1.80% 0.83% 1.02% 1.47%
- --------------------------------------------------------------------------------
FINACIAL HIGHLIGHTS, CLASS B SHARES
- --------------------------------------------------------------------------------
FOR THE FOR THE YEARS ENDED FOR THE PERIOD
SIX MONTHS ENDED ---------------------------- FEBRUARY 25, 3004(b)
FEBRUARY 28, 2007 AUGUST 31, AUGUST 31, AUGUST 31,
(unaudited) 2006 2005 TO 2004
------------ --------------------------- ------------
Net Asset Value, Beginning of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000
------------ ------------ ------------ ------------
Investment Activities
Net investment income 0.016 0.027 0.015 0.003
Dividends
Net investment income (0.016) (0.027) (0.015) (0.003)
------------- ------------ ------------ ------------
Net Asset Value, End of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000
============ ============ ============ ============
Total Return (a) 3.10% 2.73% 1.54% 0.31%
Ratios/Supplementary Data:
Net Assets at end of period (000) $ 2,596 $ 2,653 $ 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% 0.55%(c)
Ratio of expenses to average net assets 0.45%(c) 0.45% 0.45% 0.45%(c)
Ratio of net investment income
to average net assets 3.14%(c) 2.68% 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.
The accompanying notes are an integral part of these financial statements.
-20-
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2007 (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 "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 six months ending February 28, 2007. A separate report is
issued for the U.S. Treasury Income Portfolio for the six months ending February
28, 2007. The Portfolios invest primarily in money market instruments maturing
in 13 months or less.
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 increases and decreases in
net assets from operations during the reporting period. Actual results could
differ from those estimates.
SECURITY VALUATION:
Each Portfolio values its investments on the basis of amortized
cost, which involves valuing an instrument at its cost and thereafter assuming a
constant accretion to maturity of any discount or amortization to maturity of
any premium. The amortized cost value of an instrument may be higher or lower
than the price a Portfolio would receive if it sold the instrument.
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
Portfolios' Sub-Advisor, Reich & Tang Asset Management L.P. (Reich & Tang). 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. If the seller defaults and the fair value of the collateral
declines, realization of the collateral by the Portfolios may be delayed or
limited.
-21-
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 28, 2007 (UNAUDITED)
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.
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. 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 "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 (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 "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 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 Manager provides day-to-day investment advisory services to each
Portfolio. Reich & Tang serves as Sub-Adviser to Portfolio and, subject to the
supervision of the Trustees and of the Manager, directs the investments of each
Portfolio in accordance with its investment objective, policies and limitations.
The Manager, subject to the general supervision of the Board and in accordance
with the investment objective, policies and restrictions of each Portfolio, also
provides the Portfolios with ongoing investment guidance, policy direction and
monitoring of the Sub-Adviser pursuant to a sub-advisory agreement. 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, 2007, the Manager earned fees of $178,554, $430,332, and
$145,640 from the U.S. Treasury Money Market Portfolio, the General Money Market
Portfolio, and the Tax-Exempt Money Market Portfolio, respectively. At February
28, 2007, there was a payable due to the Manager in the amount $23,708, $62,383,
and $24,066 from 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 indirectly own and/or 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.
-22-
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 28, 2007 (UNAUDITED)
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. All Bank of New York fees are paid by the
Adviser.
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' 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, 2007:
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 Portfolio's Statement of Operations.
For the six months ending February 28, 2007, the Manager and
Distributor waived $27,336 of fees and expenses for the U.S. Treasury Money
Market Portfolio. These expenses related to $4,205 of fees attributable to Class
A, $18,663 attributable to Class B, and all Trustees fees of $4,468 incurred by
the Portfolio during the year.
For the six months ending February 28, 2007, the Manager and
Distributor waived $581,331 of fees and expenses for the General Money Market
Portfolio. These expenses related to $568,805 of fees attributable to Class A,
$571 attributable to Class B, and all Trustees fees of $11,955 incurred by the
Portfolio during the year.
For the six months ending February 28, 2007, the Manager and
Distributor waived $255,626 of fees and expenses for the Tax-Exempt Money Market
Portfolio. These expenses related to $250,919of fees attributable to Class A,
$1,129 attributable to Class B, and all Trustees fees of $3,578incurred by the
Portfolio during the year.
-23-
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 28, 2007 (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 ending February 28, 2007 and the year
ended August 31, 2006 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 SIX FOR THE FOR THE SIX FOR THE FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED
FEBRUARY 28, AUGUST 31, FEBRUARY 28, AUGUST 31, FEBRUARY 28, AUGUST 31,
2007 2006 2007 2006 2007 2006
-----------------------------------------------------------------------------------------------------
CLASS A SHARES:
Issued 5,671,851 7,357,394 1,220,501,750 2,112,521,864 279,728,879 787,524,064
Reinvested 628 306 901 2,201 19 32
Redeemed (5,052,937) (7,012,095) (1,203,335,090) (2,068,722,614) (299,264,224) (771,010,978)
---------------------------- -------------------------------- ------------------------------
Net increase
(decrease) in
Class A Shares 619,542 345,605 17,167,561 43,801,451 (19,535,326) 16,513,118
---------------------------- -------------------------------- ------------------------------
CLASS B SHARES:
Issued 58,051,532 159,245,943 1,406,107 655,529 15,160,508 7,737,242
Reinvested -- 168,786 -- -- 17,664 35,021
Redeemed (73,612,018) (196,011,674) (192,883) (661,002) (15,230,806) (8,873,793)
----------------------------- -------------------------------- ------------------------------
Net increase
(decrease) in
Class B Shares (15,560,486) (36,596,945) 1,213,224 (5,473) (52,634) (1,101,530)
----------------------------- -------------------------------- ------------------------------
CLASS D SHARES:
Issued 145,311,142 317,226,353 24,729,998 77,148,735 -- --
Reinvested -- -- 26,949 21,947 -- --
Redeemed (154,289,263) (366,454,130) (24,884,816) (65,715,543) -- --
------------------------------ -------------------------------- ------------------------------
Net
decrease in (8,978,121) (49,227,777) (127,869) 11,455,139 -- --
Class D Shares
------------------------------ -------------------------------- ------------------------------
CLASS E SHARES:
Issued 37,667,842 128,626,578 23,305,290 86,497,269 -- --
Reinvested 1,109,239 878,214 26 42 -- --
Redeemed (71,911,332) (73,672,732) (25,661,118) (83,399,602) -- --
---------------------------- -------------------------------- ------------------------------
Net increase
(decrease) in
Class E Shares (33,134,251) 55,832,060 (2,355,802) 3,097,709 -- --
------------------------------ -------------------------------- ------------------------------
NET INCREASE
(DECREASE) IN
SHARE TRANSACTIONS
(57,053,316) (29,647,057) 15,897,114 58,348,826 (19,587,960) 15,411,588
=============================== ================================ ==============================
-24-
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 28, 2007 (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, 2007, there were no outstanding securities on loan
for any of the Portfolios.
6. CONCENTRATION OF CREDIT RISK:
As of February 28, 2007, approximately 42.3% 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 90.2% 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 ending February 28, 2007
and the year ended August 31, 2006 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 ending February 28, 2007 and the year ended
August 31, 2006, 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, 2006 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
------------------- ----------------
Tax - Exempt Money Market Fund $8,571 ($8,571)
-25-
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 28, 2007 (UNAUDITED)
For federal income tax purposes, the following Portfolios have capital loss
carryforwards as of August 31, 2006, which are available to offset future
realized gains, if any:
NAME AMOUNT EXPIRES
- -------------------------------- ---------------------------------------
U.S. Treasury Money Market $ 228,583 2008
21,859 2009
---------------
$ 250,442
===============
General Money Market $ 51,799 2008
1,354 2013
22 2014
---------------
$ 53,175
===============
Tax-Exempt Money Market $ 2,545 2008
42,330 2009
----------------
$ 44,875
================
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 General Money Market Portfolio will elect to defer
post-October losses in the amount of $667.
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, 2007, Relico held 97.31% of Class A shares, Hare & Co. held 100% of
Class B shares, and 26.13% of Class D shares, Relico held 31.71% of Class D,
Band & Co. held 42.07% of Class D, and Commerce Bank held 74.89% of Class E
shares of the U.S. Treasury Money Market Portfolio in omnibus accounts for the
sole benefit of their customers. First Union National Bank held 82.78% of the
Class A shares and Relico held 100% of the Class B and Class E shares, and
98.93% of the Class D shares of the General Money Market Portfolio in omnibus
accounts for the sole benefit of their customers. First Union National Bank held
87.59% of Class A shares, Reich & Tang Services, Inc. (a related party to the
Sub-Advisor) held 47.90% and Relico held 52.10% of Class B shares of the
Tax-Exempt Money Market Portfolio in omnibus accounts for the sole benefit of
their customers.
-26-
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 28, 2007 (UNAUDITED)
9. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS.
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Funds' tax returns to determine whether the tax positions are
"more-likely-than-not" of being sustained by the applicable tax authority. Tax
positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is
required for fiscal years beginning after December 15, 2006 and is to be applied
to all open tax years as of the effective date. At this time, management is
evaluating the impact that FIN 48 will have on the financial statements.
On September 20, 2006, the Financial Accounting Standards Board ("FASB")
released Statement of Financial Accounting Standards No. 157 "Fair Value
Measurements"("FAS 157"). FAS 157 establishes an authoritative definition of
fair value, sets out a framework for measuring fair value, and requires
additional disclosures about fairvalue measurements. The application of FAS 157
is required for fiscal years beginning after November 15, 2007 and interim
periods within those fiscal years. At this time, management is evaluating the
impact that FAS 157 will have on the financial statements.
-27-
MANAGEMENT OF THE TRUST (UNAUDITED)
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 30, Denis is responsible for oversight and administration of The
Valiant Fund.
-28-
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.
The Trust's Statement of Additional Information contains additional information
about the Trust's Trustees and is available without charge, upon request by
calling 1-800-828-2176.
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.
-29-
THE VALIANT FUND
U.S. TREASURY INCOME PORTFOLIO
SEMI-ANNUAL REPORT
FEBRUARY 28, 2007
THE VALIANT FUND
U.S. TREASURY INCOME PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
FEBRUARY 28, 2007*
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.
The accompanying notes are an integral part of these financial statements.
-30-
THE VALIANT FUND
U.S. TREASURY INCOME PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS, CLASS A SHARES
- --------------------------------------------------------------------------------
FOR THE
SIX MONTHS ENDED FOR THE YEARS ENDED
FEBRUARY 28, 2007 (a) -----------------------------------------------------------------------
(UNAUDITED) 2006(b) 2005(c) 2004(d) 2003(e) 2002(f)
--------------------- ------------ ------------ ----------- ----------- ----------
Net Asset Value,
Beginning of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
--------------------- ------------ ------------ ----------- ----------- ----------
Investment Activities
Net investment income -- -- -- -- -- --
Net realized gain from
investment transactions -- -- -- -- -- --
--------------------- ------------ ------------ ----------- ----------- ----------
Total from investment
activities -- -- -- -- -- --
--------------------- ------------ ------------ ----------- ----------- ----------
Dividends
Net investment income -- -- -- -- -- --
--------------------- ------------ ------------ ----------- ----------- ----------
Total dividends -- -- -- -- -- --
--------------------- ------------ ------------ ----------- ----------- ----------
Net Asset Value, End of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
===================== ============ ============ =========== =========== ==========
Total Return -- -- -- -- -- --
Ratios/Supplementary Data:
Net Assets at end of period (000) $ 1 $ 1 $ 1 $ 1 $ 1 $ 1
Ratio of expenses to average
net assets -- -- -- -- -- --
Ratio of net investment income
to average net assets -- -- -- -- -- --
(a) The Portfolio did not operate during the six months ended February 28,
2007.
(b) The Portfolio did not operate during the year ended August 31, 2006.
(c) The Portfolio did not operate during the year ended August 31, 2005.
(d) The Portfolio did not operate during the year ended August 31, 2004.
(e) The Portfolio did not operate during the year ended August 31, 2003.
(f) The Portfolio did not operate during the year ended August 31, 2002.
The accompanying notes are an integral part of these financial statements.
-31-
THE VALIANT FUND
U.S. TREASURY INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2007
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, separate
portfolios of the Trust. This report covers the U.S. Treasury Income Portfolio
(hereinafter referred to as "Portfolio") for the six months ended February 28,
2007, during which period the Portfolio did not conduct operations. As the
Portfolio did not have any operations during the years ended August 31, 2006 or
August 31, 2005, 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 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:
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, 2007, 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,
2007, 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. 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.
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, 2007, Integrity Investments held 100% of the shares of the
Portfolio. Certain officers and shareholders of Integrity Investments are also
officers of the Trust.
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MANAGEMENT OF THE TRUST (UNAUDITED)
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 30, Denis is responsible for oversight and administration of The
Valiant Fund.
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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.
The Trust's Statement of Additional Information contains additional information
about the Trust's Trustees and is available without charge, upon request by
calling 1-800-828-2176.
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.
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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.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
Not applicable.
3
ITEM 11. CONTROLS AND PROCEDURES.
a) Based on their evaluation of the Registrant's disclosure controls and
procedures (as defined in Rule 30a-3(d) under the Investment Company Act of
1940) as of a date within 90 days prior to the filing date of this report,
the Chief Executive Officer and Chief Financial Officer of the Registrant
have concluded that such disclosure controls and procedures are reasonably
designed and effective to ensure that material information relating to the
Registrant, including its consolidated subsidiaries, is made known to them
by others within those entities
b) There were no changes in the Registrant's internal control over financial
reporting (as defined in Rule 30 a-3(d) under the Investment Company Act of
1940) that occurred during the Registrant's second fiscal quarter that have
materially affected, or are reasonably likely to materially affect, the
Registrant's internal control over financial reporting
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 26, 2007
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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 26, 2007
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By (Signature and Title) /S/ DENIS R. CURCIO
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Denis R. Curcio, Treasurer
Date APRIL 26, 2007
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