THE VALIANT FUND
ANNUAL REPORT
AUGUST 31, 1996
THE VALIANT FUND
U.S. TREASURY MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS
AUGUST 31, 1996
VALUE
PAR VALUE (NOTE 1)
- --------- --------------
U.S. TREASURY BILLS (A) - 27.4%
$ 10,000,000 5.050%, 10/03/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,955,200
3,000,000 5.080%, 10/17/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,980,527
3,000,000 5.090%, 11/07/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,971,581
7,000,000 5.118%, 11/07/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,933,330
4,000,000 5.060%, 11/14/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,958,395
5,000,000 5.230%, 12/12/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,925,908
7,000,000 5.080%, 01/09/97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,871,589
5,000,000 5.100%, 01/09/97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,907,917
5,000,000 5.245%, 01/09/97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,905,299
4,000,000 5.300%, 01/09/97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,923,444
10,000,000 5.125%, 02/06/97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,775,069
6,000,000 5.185%, 02/06/97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,863,462
--------------
TOTAL U.S. TREASURY BILLS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67,971,721
--------------
REPURCHASE AGREEMENTS - 72.6%
61,000,000 First Boston Corp.
5.250%, 09/03/96, Dated 08/30/96, Repurchase Price $61,035,583
(Collateralized by U.S. Treasury Note, 6.875%, due 05/15/06;
total par value $62,465,000; valued at $63,811,108). . . . . . . . . . . . . . . . . 61,000,000
1,408,000 Goldman, Sachs & Co., Inc.
5.200%, 09/03/96, Dated 08/30/96, Repurchase Price $l,408,814
(Collateralized by U.S. Treasury Note, 6.25%, due 06/30/98;
total par value $1,421,000; valued at $1,436,622). . . . . . . . . . . . . . . . . . 1,408,000
57,000,000 J.P. Morgan & Co., Inc.
5.220%, 09/03/96, Dated 08/30/96, Repurchase Price $57,033,060
(Collateralized by U.S. Treasury Bill, due 01/09/97;
total par value $59,274,000; valued at $58,141,867). . . . . . . . . . . . . . . . . 57,000,000
61,000,000 Morgan Stanley Group, Inc.
5.230%, 09/03/96, Dated 08/30/96, Repurchase Price $61,035,448
(Collateralized by U.S. Treasury Note, 7.875%, due 11/15/04;
total par value $57,645,000; valued at $62,711,847). . . . . . . . . . . . . . . . . 61,000,000
--------------
TOTAL REPURCHASE AGREEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180,408,000
--------------
TOTAL INVESTMENTS - 100.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 248,379,721
(Cost $248,379,721) + --------------
--------------
- ---------------
(A) Rate represents annualized yield to maturity at date of purchase
(unaudited).
+ Aggregate cost for Federal tax purposes.
SEE NOTES TO FINANCIAL STATEMENTS.
1
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS
AUGUST 31, 1996
VALUE
PAR VALUE (NOTE 1)
- --------- --------------
COMMERCIAL PAPER (A) - 68.5%
AUTO PARTS - 2.9%
$ 10,000,000 TRW, Inc
5.300%, 09/20/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,972,028
--------------
COMMUNICATIONS - 5.2%
18,000,000 American Telephone & Telegraph Co
5.250%, 09/03/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,994,750
--------------
Consumer Cyclicals - 6.3%
21,600,000 Toys "R" Us, Inc.
5.280%, 09/03/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,593,664
--------------
DRUGS & HEALTH CARE - 7.3%
25,000,000 Abbott Laboratories
5.250%, 09/05/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,985,417
--------------
ELECTRONICS - 7.1%
24,400,000 Motorola, Inc.
5.270%, 09/05/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,385,712
--------------
FINANCIAL SERVICES - 5.5%
14,000,000 Ford Motor Credit Co.
5.220%, 09/05/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,991,880
5,000,000 J.P. Morgan & Co., Inc.
4.950%, 09/06/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,996,562
--------------
18,988,442
--------------
FOOD PRODUCTS - 18.8%
General Mills, Inc.
10,000,000 5.260%, 09/03/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,997,078
7,000,000 5.270%, 09/23/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,977,456
--------------
16,974,534
--------------
10,000,000 H.J. Heinz, Co.
5.270%, 09/27/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,961,939
18,000,000 PepsiCo, Inc.
5.260%, 09/03/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,994,740
SEE NOTES TO FINANCIAL STATEMENTS.
2
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1996
VALUE
PAR VALUE (NOTE 1)
- --------- --------------
COMMERCIAL PAPER (A) (CONTINUED)
FOOD PRODUCTS - (CONTINUED)
Sara Lee Corp.
$ 10,000,000 5.200%, 09/06/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,992,778
10,000,000 5.240%, 09/11/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,985,444
--------------
19,978,222
--------------
64,909,435
--------------
INSURANCE - 5.5%
19,000,000 AIG Funding, Inc.
5.220%, 09/26/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,931,125
--------------
LEISURE TIME - 5.2%
18,000,000 Disney Walt Co.
5.240%, 09/03/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,994,760
--------------
REAL ESTATE - 3.3%
11,310,000 PHH Corp.
5.300%, 09/10/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,295,014
--------------
UTILITIES - 1.4%
5,000,000 Pacificorp
5.310%, 10/28/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,957,963
--------------
TOTAL COMMERCIAL PAPER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 236,008,310
--------------
U.S. TREASURY BILLS (A) - 7.3%
10,000,000 5.100%, 01/09/97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,815,833
9,000,000 4.835%, 02/06/97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,809,018
4,000,000 5.115%, 03/06/97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,894,290
1,000,000 5.400%, 08/21/97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 946,900
1,000,000 5.460%, 08/21/97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 946,310
1,000,000 5.540%, 08/21/97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 945,523
--------------
TOTAL U.S. TREASURY BILLS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,357,874
--------------
BANKERS' ACCEPTANCE NOTICES (A) - 5.0%
Bank of New York
4,000,000 5.240%, 11/06/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,961,573
1,548,504 5.330%, 02/11/97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,511,134
--------------
5,472,707
--------------
SEE NOTES TO FINANCIAL STATEMENTS.
3
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1996
VALUE
PAR VALUE (NOTE 1)
- --------- --------------
BANKERS' ACCEPTANCE NOTICES (A) (CONTINUED)
Republic National Bank of NY
$ 2,700,000 5.240%, 09/19/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,692,926
3,100,000 5.210%, 10/11/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,082,055
3,592,198 5.280%, 12/09/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,540,039
2,324,694 5.260%, 12/20/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,287,331
--------------
11,602,351
--------------
TOTAL BANKERS' ACCEPTANCE NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . 17,075,058
--------------
REPURCHASE AGREEMENTS - 19.2%
23,108,000 First Boston Corp.
5.250%, 09/03/96, Dated 08/30/96, Repurchase Price $23,121,480
(Collateralized by U.S. Treasury Note, 6.875%, due 05/15/06;
total par value $23,200,000; valued at $23,699,955). . . . . . . . . . . . . . . . . 23,108,000
10,000,000 Goldman, Sachs & Co., Inc.
5.200%, 09/03/96, Dated 08/30/96, Repurchase Price $10,005,778
(Collateralized by U.S. Treasury Note, 6.25%, due 06/30/98;
total par value $10,090,000; valued at $10,200,928). . . . . . . . . . . . . . . . . 10,000,000
15,000,000 J.P. Morgan & Co., Inc.
5.220%, 09/03/96, Dated 08/30/96, Repurchase Price $15,008,700
(Collateralized by U.S. Treasury Bill, due 07/24/97;
total par value $16,104,000; valued at $15,301,860). . . . . . . . . . . . . . . . . 15,000,000
18,000,000 Morgan Stanley Group, Inc.
5.230%, 09/03/96, Dated 08/30/96, Repurchase Price $18,010,460
(Collateralized by U.S. Treasury Note, 6.375%, due 06/30/97;
total par value $18,115,000; valued at $18,393,378). . . . . . . . . . . . . . . . . 18,000,000
--------------
TOTAL REPURCHASE AGREEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66,108,000
--------------
TOTAL INVESTMENTS - 100.0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 344,549,242
(Cost $344,549,242) + --------------
--------------
- ---------------
(A) Rate represents annualized yield to maturity at date of purchase
(unaudited).
+ Aggregate cost for Federal tax purposes.
SEE NOTES TO FINANCIAL STATEMENTS.
4
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS
AUGUST 31, 1996
VALUE
PAR VALUE (NOTE 1)
- --------- --------------
MUNICIPAL BONDS AND NOTES - 100.0%
ALABAMA - 2.3%
$ 300,000 Columbia Alabama IDB
Alabama Power Company Project, Series A
3.750%, 05/01/22 ++. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 300,000
3,600,000 Mobile Alabama IDB
Alabama Power Company Project
3.750%, 06/01/15 ++. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,600,000
2,500,000 Montgomery Alabama
General Electric, Series 90
3.350%, 09/10/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,500,000
--------------
6,400,000
--------------
ALASKA - 3.9%
5,000,000 Alaska Housing Finance Corp.
Series C
3.550%, 06/01/26 ++
SBPA: Swiss Bank Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000
3,300,000 Valdez Marine Terminal
Exxon Project
3.750%, 10/01/25 ++ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,300,000
3,000,000 Valdez Marine Terminal
Mobil Project
3.500%, 11/01/03 ++. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000
--------------
11,300,000
--------------
ARIZONA - 0.9%
2,500,000S Salt River Project Agricultural Improvement & Power District
3.650%, 12/12/96
LINE: Union Bank Switzerland, First Interstate Bank Arizona. . . . . . . . . . . . . 2,500,000
--------------
CALIFORNIA - 2.8%
4,900,000 California State RANS
4.500%, 06/30/97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,922,919
3,000,000 Los Angeles County TRANS
4.500%, 06/30/97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,013,768
--------------
7,936,687
--------------
COLORADO - 6.5%
6,000,000 Colorado Health Facilities
Sisters of Charity Health Care
3.400%, 05/15/25 ++
LOC: Toronto Dominion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,000,000
2,500,000 Colorado TRANS Series A
4.500%, 06/27/97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,512,817
SEE NOTES TO FINANCIAL STATEMENTS.
5
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1996
VALUE
PAR VALUE (NOTE 1)
- --------- --------------
COLORADO - (CONTINUED)
$ 4,900,000 Regional Transportation District
Passenger Fare Revenue, Series 86A
3.350%, 06/01/99 ++
LOC: Credit Local de France. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,900,000
5,000,000 University of Colorado University Revenues
Enterprise Systems, Series A
3.350%, 06/01/20 ++
SBPA: Morgan Guaranty Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000
--------------
18,412,817
--------------
CONNECTICUT - 2.5%
3,000,000 Connecticut State Housing Finance Authority
Series A3
3.600%, 04/10/97 * . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000
4,200,000 Connecticut State Special Assessment
Unemployment Compensation, Series C, FGIC Insured
3.900%, 07/01/97 *
SBPA: FGIC Securities Purchase, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 4,200,000
--------------
7,200,000
--------------
FLORIDA - 4.8%
1,000,000 Dade County IDA
Florida Power & Light
3.850%, 06/01/21 ++ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000
7,100,000 Dade County Water & Sewer Revenue Systems
3.350%, 10/05/22
SBPA: Commerzbank. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,100,000
3,000,000 Jacksonville Florida
Series A
3.625%, 10/09/96
LINE: Morgan Guaranty Trust, Credit Suisse . . . . . . . . . . . . . . . . . . . . . 3,000,000
2,400,000 Orlando Waste Water Systems Revenue
3.600%, 09/09/96
LINE: Union Bank Switzerland . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,400,000
--------------
13,500,000
--------------
GEORGIA - 5.3%
2,400,000 Burke County Development Authority, PCR
Georgia Power Project, Series 3
3.850%, 07/01/24 ++. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,400,000
1,900,000 Burke County Development Authority, PCR
Georgia Power Project, Series 5
3.700%, 07/01/24 ++. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,900,000
3,800,000 De Kalb Private Hospital Authority
Egelston Childrens Hospital, Series A
3.350%, 03/01/24 ++
LOC: Trust Company Bank. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,800,000
SEE NOTES TO FINANCIAL STATEMENTS.
6
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1996
VALUE
PAR VALUE (NOTE 1)
- --------- --------------
GEORGIA - (CONTINUED)
$ 7,000,000 De Kalb Private Hospital Authority
(Egelston Childrens Hospital), Series B
3.350%, 03/01/24 ++
LOC: Trust Company Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,000,000
--------------
15,100,000
--------------
HAWAII - 0.8%
2,400,000 Hawaii Department of Budget & Finance
Kaiser Permanente
3.650%, 03/03/97 * . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,400,000
--------------
ILLINOIS - 1.1%
3,100,000 Chicago GO
Tender Notes, Series A
3.650%, 10/31/96
LOC: Morgan Guaranty Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,100,000
--------------
KANSAS - 2.6%
7,500,000 Kansas Department of Transportation Highway Revenue
Series B
3.350%, 09/01/14 ++. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,500,000
--------------
KENTUCKY - 1.8%
2,135,000 Jefferson County, PCR
Louisville Gas & Electric Company, Series A
3.500%, 09/09/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,135,000
2,900,000 Trimble County, PCR
Louisville Gas & Electric Company
3.650%, 09/20/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,900,000
--------------
5,035,000
--------------
MASSACHUSETTS - 2.0%
4,000,000 Massachusetts Bay Transportation Authority
84A
3.050%, 09/01/96 *
LOC: State Street Bank & Trust Co. . . . . . . . . . . . . . . . . . . . . . . . . . 4,000,000
1,800,000 Massachusetts Bay Transportation Authority
84A
3.625%, 03/03/97 *
LOC: State Street Bank & Trust Co. . . . . . . . . . . . . . . . . . . . . . . . . . 1,800,000
--------------
5,800,000
--------------
SEE NOTES TO FINANCIAL STATEMENTS.
7
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1996
VALUE
PAR VALUE (NOTE 1)
- --------- --------------
MICHIGAN - 2.6%
$ 2,500,000 Michigan Municipal Bond Authority Revenue
Series A
4.500%, 07/03/97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,512,054
5,000,000 Michigan State GO
4.000%, 09/30/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,001,531
--------------
7,513,585
--------------
MINNESOTA - 3.4%
1,500,000 Becker Minnesota, PCR
Northern States Power
3.600%, 12/16/96 ++. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,500,000
3,000,000 Rochester Health Care Facilities
Mayo Foundation/Medical Center, Series F
3.450%, 09/11/96
LOC: Credit Suisse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000
1,000,000 Rochester Health Care Facilities
Mayo Foundation/Medical Center, Series F
3.650%, 10/22/96
LOC: Credit Suisse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000
4,200,000 University of Minnesota Revenues, Series 85 G
3.750%, 02/01/97 * . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,200,000
--------------
9,700,000
--------------
MISSISSIPPI - 3.1%
5,400,000 Jackson County Port Facility
Chevron USA Project
3.750%, 06/01/23 ++. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,400,000
3,400,000 Jackson County, PCR
Chevron, USA Project
3.800%, 12/01/16 ++. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,400,000
--------------
8,800,000
--------------
MISSOURI - 1.7%
4,900,000 Missouri State Health & Educational Facility, Barnes Hospital
3.400%, 12/01/15 ++
LOC: Morgan Guaranty Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,900,000
--------------
NEVADA - 2.2%
6,100,000 Clark County Airport Improvement Authority Revenue
3.350%, 07/01/25 ++
LOC: Toronto Dominion Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,100,000
--------------
SEE NOTES TO FINANCIAL STATEMENTS.
8
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1996
VALUE
PAR VALUE (NOTE 1)
- --------- --------------
NEW MEXICO - 2.3%
$ 4,900,000 Albuquerque Airport Authority Revenue, AMBAC
3.350%, 07/01/14 ++
LOC: Canadian Imperial Bank of Commerce. . . . . . . . . . . . . . . . . . . . . . . $ 4,900,000
1,500,000 Hurley, PCR
British Petroleum
3.850%, 12/01/15 ++. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,500,000
--------------
6,400,000
--------------
NEW YORK - 1.1%
3,000,000 New York City Municipal Water Finance Authority
FGIC Insured 3.800%, 06/15/23 ++
LIQ: FGIC Securities Purchase, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000
--------------
NORTH CAROLINA - 4.9%
1,500,000 Charlotte Airport Revenue (MBIA) 93A
3.350%, 07/01/16 ++
SBPA: Commerzbank AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,500,000
3,400,000 Raleigh Durham Airport Authority
American Airlines B1
3.850%, 11/01/15 ++
LOC: Royal Bank of Canada. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,400,000
2,700,000 Raleigh Durham Airport Authority
American Airlines, Series A
3.850%, 11/01/05 ++
LOC: Royal Bank of Canada. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,700,000
6,200,000 Winston Salem Water & Sewer System
3.350%, 06/01/14 ++
SPBA: Wachovia Bank of N.C. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,200,000
--------------
13,800,000
--------------
OREGON - 1.7%
4,800,000 Clackamas County Hospital Facility
Kaiser Permanente
3.400%, 10/01/96 * . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,800,000
--------------
SOUTH CAROLINA - 0.7%
2,000,000 South Carolina Public Service Authority
3.600%, 10/07/96
LINE: NationsBank, N.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000
--------------
TENNESSEE - 5.2%
6,600,000 Memphis Tennessee GO
Series A
3.450%, 08/01/03 ++
SBPA: Westdeutsche Landesbank GZ . . . . . . . . . . . . . . . . . . . . . . . . . . 6,600,000
SEE NOTES TO FINANCIAL STATEMENTS.
9
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1996
VALUE
PAR VALUE (NOTE 1)
- --------- --------------
TENNESSEE - (CONTINUED)
$3,400,000 Metro Nashville/Davidson County Airport Authority
American Airlines Series A
3.700%, 10/01/12 ++
LOC: Credit Suisse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,400,000
4,800,000 Metropolitan Nashville/Davidson County Health
Health & Education Facility Board Revenue Vanderbilt University
3.500%, 01/15/97 * . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,800,000
--------------
14,800,000
--------------
TEXAS - 8.9%
2,800,000 City of Houston Water & Sewer
3.550%, 10/22/96
LOC: Swiss Bank Corp., Westdeutsche Landesbank GZ. . . . . . . . . . . . . . . . . . 2,800,000
1,300,000 Harris County Texas GO
3.600%, 12/16/96
LINE: Union Bank Switzerland . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,300,000
1,400,000 Harris County Texas Health Facilities
St. Lukes Episcopal Hospital
3.750%, 02/15/16 ++
LINE: Morgan Guaranty Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,400,000
300,000 Harris County Texas IDC
Exxon Project 1984, Series A
3.750%, 03/01/24 ++. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300,000
4,200,000 Harris County Texas Toll Road
3.450%, 08/01/20 ++
LINE: Morgan Guaranty Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,200,000
5,560,000 Lower Colorado River Authority Texas Revenue
Refunding Junior Lien 3rd Supply Series
3.350%, 01/01/13 ++
SBPA: Bayerische Landesbank GZ . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,560,000
1,300,000 North Central Texas Health Facilities
Presbyterian Medical Center, Series C, MBIA Insured
3.700%, 12/01/15 ++
SBPA: Nations Bank of Texas. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,300,000
6,900,000 Port Arthur Texas Navigation District PCR
Texaco, Inc. Project
3.850%, 10/01/24 ++. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,900,000
500,000 San Antonio Texas Water Systems
Series 95
3.500%, 09/11/96
LINE: Westdeutsche Landesbank GZ . . . . . . . . . . . . . . . . . . . . . . . . . . 499,962
900,000 Texas State Water Development Board
3.850%, 03/01/15 ++
LOC: Canadian Imperial Bank of Commerce. . . . . . . . . . . . . . . . . . . . . . . 900,000
--------------
25,159,962
--------------
SEE NOTES TO FINANCIAL STATEMENTS.
10
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1996
VALUE
PAR VALUE (NOTE 1)
- --------- --------------
UTAH - 7.0%
$ 2,000,000 Emery County Utah, PCR
Pacificorp Project
3.500%, 07/01/15 ++
LOC: Credit Suisse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,000,000
1,200,000 Emery County Utah, PCR
Pacificorp, AMBAC
3.800%, 11/01/24 ++
LINE: Bank of Nova Scotia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200,000
5,000,000 Intermountain Power Agency
Power Supply Revenue, Series 85E
3.350%, 09/15/96 *
LOC: Swiss Bank Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000
3,200,000 Intermountain Power Agency
Power Supply Revenue, Series 85F
3.350%, 09/15/96 *
LOC: Swiss Bank Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,200,000
2,500,000 Intermountain Power Agency
Power Supply Revenue, Series 85F
3.930%, 06/16/97 *
LOC: Morgan Guaranty Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,500,000
5,900,000 Salt Lake County, PCR
British Petroleum Project
3.850%, 02/01/08 ++. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,900,000
--------------
19,800,000
--------------
VERMONT - 1.7%
1,700,000 Vermont Education & Health Buildings Finance Agency
Middlebury College
3.700%, 05/01/97 * . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,700,000
3,000,000 Vermont GO RANS
Series I
3.250%, 09/06/96
LINE: Toronto Dominion Bank. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000
--------------
4,700,000
--------------
VIRGINIA - 0.6%
1,700,000 Peninsula Ports Authority Virginia Revenue, Shell
3.800%, 12/01/05 ++. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,700,000
--------------
WASHINGTON - 9.9%
3,000,000 Port Anacortes IDC
Texaco Project
3.650%, 09/05/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000
6,000,000 Seattle Municipal Light & Power Revenue
3.700%, 02/06/97
SBPA: Morgan Guaranty Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,000,000
SEE NOTES TO FINANCIAL STATEMENTS.
11
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1996
VALUE
PAR VALUE (NOTE 1)
- --------- --------------
WASHINGTON - (CONTINUED)
$ 4,300,000 Seattle Municipal Light & Power Revenue
3.500%, 11/01/18 ++
LINE: Morgan Guaranty Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,300,000
3,500,000 Seattle Washington Water System Revenue
3.500%, 09/01/25 ++
LOC: Bayerische Landesbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,500,000
3,600,000 Washington State GO
Series 96B
3.500%, 06/01/20 ++
SBPA: Landesbank Hessen-Thueringen GZ. . . . . . . . . . . . . . . . . . . . . . . . 3,600,000
7,600,000 Washington State Public Power Supply
3.500%, 07/01/17 ++
LINE: Bank of America. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,600,000
--------------
28,000,000
--------------
WISCONSIN - 4.8%
6,400,000 Oak Creek Wisconsin, PCR
Wisconsin Electric Power Company
3.550%, 08/01/16 ++. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,400,000
3,000,000 Sheboygan Wisconsin, PCR
Wisconsin Electric Power Company
3.450%, 09/01/15 ++. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000
4,100,000 Sheboygan Wisconsin, PCR
Wisconsin Power & Light
3.300%, 08/01/14 ++. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,100,000
--------------
13,500,000
--------------
WYOMING - 0.9%
1,000,000 Lincoln County, PCR
Exxon Project, Series A
3.800%, 11/01/14 ++. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000
1,700,000 Uinta County Wyoming, PCR
Chevron '92
3.800%, 12/01/22 ++. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,700,000
--------------
2,700,000
--------------
Total Investments - 100.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 283,558,051
(Cost $283,558,051) + --------------
--------------
- ---------------
+ Aggregate cost for Federal tax purposes.
++ Variable rate demand notes are payable upon not more than one, seven or
thirty business days' notice. The interest rate shown reflects the rate
currently in effect.
* Put bonds and notes mature within one year due to demand features. The
interest rate shown reflects the rate currently in effect.
SEE NOTES TO FINANCIAL STATEMENTS.
12
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS - (CONTINUED)
AUGUST 31, 1996
GLOSSARY OF TERMS
AMBAC = American Municipal Bond Assurance Corp.
FGIC = Financial Guaranty Insurance Corp.
GO = General Obligations
IDA = Industrial Development Authority
IDB = Industrial Development Bond
IDC = Industrial Development Corp.
LIQ = Liquidity
LINE = Bank Line of Credit Issued
LOC = Letter of Credit
MBIA = Municipal Bond Insurance Association
PCR = Pollution Control Revenue
RANS = Revenue Anticipation Notes
SBPA = Standby Purchase Agreement
TRANS = Tax and Revenue Anticipation Notes
SEE NOTES TO FINANCIAL STATEMENTS.
13
THE VALIANT FUND
STATEMENTS OF ASSETS AND LIABILITIES
AUGUST 31, 1996
U.S. TREASURY U.S. TREASURY GENERAL TAX-EXEMPT
MONEY MARKET INCOME MONEY MARKET MONEY MARKET
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- ------------- ------------ ------------
ASSETS:
Investments (Note 1):
Investments at value . . . . . . . . . . $ 67,971,721 $ -- $ 278,441,242 $ 283,558,051
Repurchase agreements. . . . . . . . . . 180,408,000 -- 66,108,000 --
------------- ------------- ------------- -------------
Total investments at value. . . . . . 248,379,721 -- 344,549,242 283,558,051
Cash . . . . . . . . . . . . . . . . . . . 577 25,160 519 13,229
Interest receivable. . . . . . . . . . . . 52,453 -- 19,209 1,350,385
Deferred organization expense (Note 1) . . 13,576 12,440 10,305 10,538
------------- ------------- ------------- -------------
Total Assets. . . . . . . . . . . . . 248,446,327 37,600 344,579,275 284,932,203
------------- ------------- ------------- -------------
LIABILITIES:
Dividends payable. . . . . . . . . . . . . 1,199,059 -- 1,695,222 805,369
Payable for investments purchased. . . . . -- -- -- 4,200,487
Advisory fee payable (Note 2). . . . . . . 48,894 -- 68,437 48,706
Distribution fee payable (Note 2). . . . . 48,885 -- 1,869 --
Payable to Adviser . . . . . . . . . . . . 13,576 12,378 10,305 10,538
------------- ------------- ------------- -------------
Total Liabilities . . . . . . . . . . 1,310,414 12,378 1,775,833 5,065,100
------------- ------------- ------------- -------------
NET ASSETS . . . . . . . . . . . . . . . . . $247,135,913 $25,222 $342,803,442 $279,867,103
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
NET ASSETS CONSIST OF:
Paid-in capital (Note 4) . . . . . . . . . $247,148,045 $25,215 $343,078,004 $279,980,063
Accumulated net realized gain (loss) on
investments sold . . . . . . . . . . . . (12,132) 7 (274,562) (112,960)
------------- ------------- ------------- -------------
Total Net Assets. . . . . . . . . . . $247,135,913 $25,222 $342,803,442 $279,867,103
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
SHARES OF BENEFICIAL INTEREST OUTSTANDING:
Class A. . . . . . . . . . . . . . . . . . 85,263,898 25,215 334,337,397 279,980,063
Class B. . . . . . . . . . . . . . . . . . 126,334,979 -- 8,740,607 --
Class C. . . . . . . . . . . . . . . . . . -- -- -- --
Class D. . . . . . . . . . . . . . . . . . 35,549,168 -- -- --
NET ASSET VALUE,
All Shares - offering and redemption
price per share
(Net Assets/Shares Outstanding). . . . . . $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
SEE NOTES TO FINANCIAL STATEMENTS.
14
THE VALIANT FUND
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 1996
U.S. TREASURY U.S. TREASURY GENERAL TAX-EXEMPT
MONEY MARKET INCOME MONEY MARKET MONEY MARKET
PORTFOLIO * PORTFOLIO ** PORTFOLIO PORTFOLIO
-------------- ------------- ------------ ------------
INVESTMENT INCOME:
Interest (Note 1). . . . . . . . . . . . . $ 10,481,337 $ 187,705 $ 26,635,341 $ 10,121,298
------------- ------------- ------------- -------------
EXPENSES:
Investment advisory fee (Note 2) . . . . . 385,690 8,578 958,106 572,477
Distribution fee, Class B (Note 2) . . . . 287,521 -- 23,561 --
Distribution fee, Class D (Note 2 ). . . . 33,641 -- -- --
Trustee fees (Note 2). . . . . . . . . . . 3,170 62 11,917 5,738
Amortization of organization costs (Note 1) 5,033 6,220 5,033 5,033
Miscellaneous expense. . . . . . . . . . . -- -- -- 149
Expenses borne by the Investment Adviser (Note 2) (8,203) (6,282) (16,950) (10,771)
------------- ------------- ------------- -------------
Total Expenses . . . . . . . . . . . . . 706,852 8,578 981,667 572,626
------------- ------------- ------------- -------------
NET INVESTMENT INCOME. . . . . . . . . . . . 9,774,485 179,127 25,653,674 9,548,672
------------- ------------- ------------- -------------
REALIZED LOSS ON
INVESTMENTS SOLD (NOTE 1). . . . . . . . . (10,545) -- (184,202) (4,894)
------------- ------------- ------------- -------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS . . . . . . . . $ 9,763,940 $ 179,127 $ 25,469,472 $ 9,543,778
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
- ---------------
* The Portfolio commenced Class D shares operations on May 1, 1996.
** The Portfolio had investment operations from December 11, 1995
to January 10, 1996.
SEE NOTES TO FINANCIAL STATEMENTS.
15
THE VALIANT FUND
STATEMENTS OF CHANGES IN NET ASSETS
AUGUST 31, 1996
U.S. TREASURY U.S. TREASURY
MONEY MARKET PORTFOLIO INCOME PORTFOLIO
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
8/31/96 * 8/31/95 8/31/96 ** 8/31/95 ***
------------- ------------- ------------- -------------
NET ASSETS AT BEGINNING OF PERIOD. . . . . . $ 106,296,537 $ 13,379,771 $ 25,133 $ 25,027
------------- ------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income. . . . . . . . . . . 9,774,485 3,133,405 179,127 320,092
Net realized gain (loss) on investments
sold . . . . . . . . . . . . . . . . . . (10,545) (1,015) -- 12
------------- ------------- ------------- -------------
Net increase in net assets resulting
from operations . . . . . . . . . . . 9,763,940 3,132,390 179,127 320,104
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A . . . . . . . . . . . . . . . . (3,702,775) (698,636) (179,127) (320,092)
Class B . . . . . . . . . . . . . . . . (5,756,290) (2,434,769) -- --
Class D . . . . . . . . . . . . . . . . (315,420) -- -- --
------------- ------------- ------------- -------------
Net decrease from distributions. . . . . . (9,774,485) (3,133,405) (179,127) (320,092)
------------- ------------- ------------- -------------
SHARE TRANSACTIONS (AT $1.00 PER SHARE):
CLASS A:
Net proceeds from sales of shares. . . . 293,279,024 140,567,044 93,740,874 117,990,836
Issued to shareholders in reinvestment
of dividends . . . . . . . . . . . . . 1,365 1,392 89 94
Cost of shares repurchased . . . . . . . (238,199,277) (110,410,948) (93,740,874) (117,990,836)
------------- ------------- ------------- -------------
Net Class A share transactions . . . . 55,081,112 30,157,488 89 94
------------- ------------- ------------- -------------
CLASS B:
Net proceeds from sales of shares. . . . 555,303,801 256,091,467 -- --
Cost of shares repurchased . . . . . . . (505,084,160) (193,331,174) -- --
------------- ------------- ------------- -------------
Net Class B share transactions . . . . . 50,219,641 62,760,293 -- --
------------- ------------- ------------- -------------
CLASS D:
Net proceeds from sales of shares. . . . 49,343,549 -- -- --
Cost of shares repurchased . . . . . . . (13,794,381) -- -- --
------------- ------------- ------------- -------------
Net Class D share transactions . . . . . 35,549,168 -- -- --
------------- ------------- ------------- -------------
Net increase from share transactions . 140,849,921 92,917,781 89 94
------------- ------------- ------------- -------------
Net increase in net assets . . . . . 140,839,376 92,916,766 89 106
------------- ------------- ------------- -------------
NET ASSETS AT END OF PERIOD. . . . . . . . . $ 247,135,913 $ 106,296,537 $ 25,222 $ 25,133
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
- ---------------
* The Portfolio commenced Class D shares operations on May 1, 1996.
** The Portfolio operated from December 11, 1995 - January 10, 1996.
*** The Portfolio operated from December 12, 1994 - January 11, 1995.
SEE NOTES TO FINANCIAL STATEMENTS.
16
THE VALIANT FUND
STATEMENTS OF CHANGES IN NET ASSETS - (CONTINUED)
AUGUST 31, 1996
GENERAL MONEY TAX-EXEMPT
MARKET PORTFOLIO MONEY MARKET PORTFOLIO
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
8/31/96 8/31/95 8/31/96 8/31/95
------------- ------------- ------------- -------------
NET ASSETS AT BEGINNING OF PERIOD. . . . . . $ 385,426,702 $ 176,536,072 $ 283,653,602 $ 258,081,069
--------------- --------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS. . . . . .
RESULTING FROM OPERATIONS: . . . . . . . . .
Net investment income. . . . . . . . . . . 25,653,674 22,098,898 9,548,672 9,010,805
Net realized loss on investments sold. . . (184,202) (36,946) (4,894) (58,890)
--------------- --------------- ------------- -------------
Net increase in net assets resulting
from operations. . . . . . . . . . . . 25,469,472 22,061,952 9,543,778 8,951,915
--------------- --------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:. . . . .
Net investment income
Class A . . . . . . . . . . . . . . . (25,172,442) (21,559,888) (9,548,672) (9,010,805)
Class B . . . . . . . . . . . . . . . (481,232) (539,010) -- --
--------------- --------------- ------------- -------------
Net decrease from distributions. . . . . . (25,653,674) (22,098,898) (9,548,672) (9,010,805)
--------------- --------------- ------------- -------------
SHARE TRANSACTIONS (AT $1.00 PER SHARE):. .
CLASS A: . . . . . . . . . . . . . . . .
Net proceeds from sales of shares. . . . 1,937,503,266 1,526,314,105 452,820,528 521,178,341
Issued to shareholders in reinvestment
of dividends . . . . . . . . . . . . 1,317,345 35,794 856 831
Cost of shares repurchased . . . . . . . (1,980,536,000) (1,317,365,165) (456,602,989) (495,547,749)
--------------- --------------- ------------- -------------
Net Class A share transactions . . . . (41,715,389) 208,984,734 (3,781,605) 25,631,423
--------------- --------------- ------------- -------------
CLASS B: . . . . . . . . . . . . . . . . .
Net proceeds from sales of shares. . . . 11,688,082 16,080,852 -- --
Cost of shares repurchased . . . . . . . (12,411,751) (16,138,010) -- --
--------------- --------------- ------------- -------------
Net Class B share transactions . . . . (723,669) (57,158) -- --
--------------- --------------- ------------- -------------
Net increase (decrease) from share
transactions . . . . . . . . . . . . (42,439,058) 208,927,576 (3,781,605) 25,631,423
--------------- --------------- ------------- -------------
Net increase (decrease) in
net assets . . . . . . . . . . (42,623,260) 208,890,630 (3,786,499) 25,572,533
--------------- --------------- ------------- -------------
NET ASSETS AT END OF PERIOD. . . . . . . . . $ 342,803,442 $ 385,426,702 $279,867,103 $283,653,602
--------------- --------------- ------------- -------------
--------------- --------------- ------------- -------------
SEE NOTES TO FINANCIAL STATEMENTS.
17
THE VALIANT FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
U.S. TREASURY MONEY
MARKET PORTFOLIO - CLASS A
YEAR ENDED YEAR ENDED PERIOD ENDED
8/31/96 8/31/95 8/31/94 (1)
--------- --------- ----------
Net Asset Value, Beginning of period . . . . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000
--------- --------- ----------
Income from Investment Operations:
Net investment income (2). . . . . . . . . . . . . . . . . . . 0.053 0.054 0.012
--------- --------- ----------
Less Distributions:
Dividends from net investment income . . . . . . . . . . . . . (0.053) (0.054) (0.012)
--------- --------- ----------
Net Asset Value, End of period . . . . . . . . . . . . . . . . . $1.000 $1.000 $1.000
--------- --------- ----------
--------- --------- ----------
Total Return (a) . . . . . . . . . . . . . . . . . . . . . . . . 5.45% 5.60% 1.19%
Ratios/Supplemental Data:
Net Assets, End of Period (000's). . . . . . . . . . . . . . . . $ 85,260 $ 30,183 $ 25
Ratios to average net assets:
Net investment income (2). . . . . . . . . . . . . . . . . . . 5.21% 5.79% 4.06% (b)
Operating expenses (2) . . . . . . . . . . . . . . . . . . . . 0.20% 0.20% 0.20% (b)
U.S. TREASURY MONEY
MARKET PORTFOLIO - CLASS B
YEAR ENDED YEAR ENDED PERIOD ENDED
8/31/96 8/31/95 8/31/94 (1)
--------- --------- ----------
Net Asset Value, Beginning of period . . . . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000
--------- --------- ----------
Income from Investment Operations:
Net investment income (3). . . . . . . . . . . . . . . . . . . 0.050 0.052 0.011
--------- --------- ----------
Less Distributions:
Dividends from net investment income . . . . . . . . . . . . . (0.050) (0.052) (0.011)
--------- --------- ----------
Net Asset Value, End of period . . . . . . . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000
--------- --------- ----------
--------- --------- ----------
Total Return (a) . . . . . . . . . . . . . . . . . . . . . . . . 5.18% 5.34% 1.12%
Ratios/Supplemental Data:
Net Assets, End of Period (000's). . . . . . . . . . . . . . . . $ 126,327 $ 76,114 $ 13,355
Ratios to average net assets:. . . . . . . . . . . . . . . . . .
Net investment income (3). . . . . . . . . . . . . . . . . . . 5.01% 5.41% 3.87% (b)
Operating expenses (3) . . . . . . . . . . . . . . . . . . . . 0.45% 0.45% 0.45% (b)
- ---------------
(1) The Portfolio commenced Class A and Class B shares operations on May 17,
1994.
(2) Net investment income per share and the operating expense ratios before
waiver and reimbursement of fees by the Trustees and the Investment Adviser,
respectively, for the period ended August 31, 1996 were $0.053 and 0.20%,
for the period ended August 31, 1995 were $0.054 and 0.21% and for the period
ended August 31, 1994 were $0.012 and 0.26%.
(3) Net investment income per share and the operating expense ratios before
waiver and reimbursement of fees by the Trustees and the Investment Adviser,
respectively, for the period ended August 31, 1996 were $0.050 and 0.45%, for
the period ended August 31, 1995 were $0.052 and 0.46% and for the period
ended August 31, 1994 were $0.011 and 0.50%.
(a) Total returns for periods less than one year are not annualized and had
the Investment Adviser and Trustees not reimbursed and waived certain
expenses, respectively, total returns would have been lower.
(b) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
18
THE VALIANT FUND
FINANCIAL HIGHLIGHTS - (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
U.S. TREASURY MONEY
MARKET PORTFOLIO - CLASS D
PERIOD ENDED
8/31/96(1)
---------
Net Asset Value, Beginning of period . . . . . . . . . . . . . . $ 1.000
---------
Income from Investment Operations:
Net investment income (5). . . . . . . . . . . . . . . . . . . 0.015
---------
Less Distributions:
Dividends from net investment income . . . . . . . . . . . . . (0.015)
---------
Net Asset Value, End of period . . . . . . . . . . . . . . . . . $ 1.000
---------
---------
Total Return (a) . . . . . . . . . . . . . . . . . . . . . . . . 1.55%
Ratios/Supplemental Data:
Net Assets, End of Period (000's). . . . . . . . . . . . . . . . $ 35,549
Ratios to average net assets:
Net investment income (5). . . . . . . . . . . . . . . . . . . 4.68% (b)
Operating expenses (5) . . . . . . . . . . . . . . . . . . . . 0.70% (b)
U.S. TREASURY
INCOME PORTFOLIO - CLASS A
PERIOD ENDED PERIOD ENDED PERIOD ENDED
8/31/96 (2) 8/31/95 (3) 8/31/94 (4)
--------- --------- ----------
Net Asset Value, Beginning of period . . . . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000
--------- --------- ----------
Income from Investment Operations:
Net investment income (6). . . . . . . . . . . . . . . . . . . 0.004 0.004 0.001
--------- --------- ----------
Less Distributions:
Dividends from net investment income . . . . . . . . . . . . . (0.004) (0.004) (0.001)
--------- --------- ----------
Net Asset Value, End of period . . . . . . . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000
--------- --------- ----------
--------- --------- ----------
Total Return (a) . . . . . . . . . . . . . . . . . . . . . . . . 0.35% 0.39% 0.12%
Ratios/Supplemental Data:
Net Assets, End of Period (000's). . . . . . . . . . . . . . . . $ 25 $ 25 $ 25
Ratios to average net assets:
Net investment income (6). . . . . . . . . . . . . . . . . . . 4.15% 4.47% 2.96% (b)
Operating expenses (6) . . . . . . . . . . . . . . . . . . . . 0.20% 0.20% 0.20% (b)
- ---------------
(1) The Portfolio commenced Class D shares operations on May 1, 1996.
(2) The Portfolio operated from December 11, 1995 to January 10, 1996.
(3) The Portfolio operated from December 12, 1994 to January 11, 1995.
(4) The Portfolio operated from December 28, 1993 to January 12, 1994.
(5) Net investment income per share and the operating expense ratios before
reimbursement of fees by the Investment Adviser were $0.015 and 0.70%.
(6) Net investment income per share and the operating expense ratios before
waiver and reimbursement of fees by the Trustees and the Investment Adviser,
respectively, for the period ended August 31, 1996 were $0.004 and 0.35%,
for the period ended August 31, 1995 were $0.004 and 0.29% and for the period
ended August 31, 1994 were $0.001 and 0.22%.
(a) Total returns for periods less than one year are not annualized and had
the Investment Adviser and Trustees not reimbursed and waived certain
expenses, respectively, total returns would have been lower.
(b) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
19
THE VALIANT FUND
FINANCIAL HIGHLIGHTS - (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
GENERAL MONEY
MARKET PORTFOLIO - CLASS A
YEAR ENDED YEAR ENDED PERIOD ENDED
8/31/96 8/31/95 8/31/94 (1)
--------- --------- ----------
Net Asset Value, Beginning of period . . . . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000
--------- --------- ----------
Income from Investment Operations:
Net investment income (2). . . . . . . . . . . . . . . . . . . 0.053 0.056 0.033
--------- --------- ----------
Less Distributions:
Dividends from net investment income . . . . . . . . . . . . . (0.053) (0.056) (0.033)
--------- --------- ----------
Net Asset Value, End of period . . . . . . . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000
--------- --------- ----------
--------- --------- ----------
Total Return (a) . . . . . . . . . . . . . . . . . . . . . . . . 5.52% 5.81% 3.33%
Ratios/Supplemental Data:
Net Assets, End of Period (000's). . . . . . . . . . . . . . . . $334,069 $375,965 $167,016
Ratios to average net assets:
Net investment income (2). . . . . . . . . . . . . . . . . . . 5.36% 5.70% 3.70% (b)
Operating expenses (2) . . . . . . . . . . . . . . . . . . . . 0.20% 0.20% 0.20% (b)
GENERAL MONEY
MARKET PORTFOLIO - CLASS B
YEAR ENDED YEAR ENDED PERIOD ENDED
8/31/96 8/31/95 8/31/94 (1)
--------- --------- ----------
Net Asset Value, Beginning of period . . . . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000
--------- --------- ----------
Income from Investment Operations:
Net investment income (3). . . . . . . . . . . . . . . . . . . 0.051 0.053 0.009
--------- --------- ----------
Less Distributions:
Dividends from net investment income . . . . . . . . . . . . . (0.051) (0.053) (0.009)
--------- --------- ----------
Net Asset Value, End of period . . . . . . . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000
--------- --------- ----------
--------- --------- ----------
Total Return (a) . . . . . . . . . . . . . . . . . . . . . . . . 5.26% 5.54% 0.92%
Ratios/Supplemental Data:
Net Assets, End of Period (000's). . . . . . . . . . . . . . . . $ 8,734 $ 9,461 $ 9,520
Ratios to average net assets:
Net investment income (3). . . . . . . . . . . . . . . . . . . 5.11% 5.33% 3.99% (b)
Operating expenses (3) . . . . . . . . . . . . . . . . . . . . 0.45% 0.45% 0.45% (b)
- ---------------
(1) The Portfolio commenced Class A and Class B shares operations on
September 21, 1993 and May 17, 1994, respectively.
(2) Net investment income per share and the operating expense ratios before
waiver and reimbursement of fees by the Trustees and the Investment Adviser,
respectively, for the period ended August 31, 1996 were $0.053 and 0.20%, for
the period ended August 31, 1995 were $0.056 and 0.20% and for the period
ended August 31, 1994 were $0.033 and 0.21%.
(3) Net investment income per share and the operating expense ratios before
waiver and reimbursement of fees by the Trustees and the Investment Adviser,
respectively, for the period ended August 31, 1996 were $0.051 and 0.45%, for
the period ended August 31, 1995 were $0.053 and 0.45% and for the period
ended August 31, 1994 were $0.009 and 0.46%.
(a) Total returns for periods less than one year are not annualized and had
the Investment Adviser and Trustees not reimbursed and waived certain
expenses, respectively, total returns would have been lower.
(b) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
20
THE VALIANT FUND
FINANCIAL HIGHLIGHTS - (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
TAX-EXEMPT MONEY
MARKET PORTFOLIO - CLASS A
YEAR ENDED YEAR ENDED PERIOD ENDED
8/31/96 8/31/95 8/31/94 (1)
--------- --------- ----------
Net Asset Value, Beginning of period . . . . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000
--------- --------- ----------
Income from Investment Operations:
Net investment income (2). . . . . . . . . . . . . . . . . . . 0.034 0.035 0.021
--------- --------- ----------
Less Distributions:
Dividends from net investment income . . . . . . . . . . . . . (0.034) (0.035) (0.021)
--------- --------- ----------
Net Asset Value, End of period . . . . . . . . . . . . . . . . . $ 1.000 $ 1.000 $ 1.000
--------- --------- ----------
--------- --------- ----------
Total Return (a) . . . . . . . . . . . . . . . . . . . . . . . . 3.43% 3.67% 2.11%
Ratios/Supplemental Data:
Net Assets, End of Period (000's). . . . . . . . . . . . . . . . $279,867 $283,654 $258,130
Ratios to average net assets:
Net investment income (2). . . . . . . . . . . . . . . . . . . 3.34% 3.50% 2.38% (b)
Operating expenses (2) . . . . . . . . . . . . . . . . . . . . 0.20% 0.20% 0.20% (b)
- ---------------------
(1) The Portfolio commenced operations on October 7, 1993.
(2) Net investment income per share and the operating expense ratios before
waiver and reimbursement of fees by the Trustees and the Investment Adviser,
respectively, for the period ended August 31, 1996 were $0.034 and 0.20%, for
the period ended August 31, 1995 were $0.035 and 0.20% and for the period
ended August 31, 1994 were $0.021 and 0.22%.
(a) Total returns for periods less than one year are not annualized and had
the Investment Adviser and Trustees not reimbursed and waived certain
expenses, respectively, total returns would have been lower.
(b) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
21
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
AUGUST 31, 1996
The Valiant Fund (the "Trust") was organized as a Massachusetts business
trust on January 29, 1993 and is registered under the Investment Company Act of
1940 as amended, as an open end management investment company. The Trust offers
four managed investment portfolios. The accompanying financial statements and
financial highlights are those of the U.S. Treasury Money Market, the U.S.
Treasury Income, the General Money Market and the Tax-Exempt Money Market
Portfolios (individually, a "Portfolio", collectively, the "Portfolios"). The
Trust is authorized to offer four classes of shares: Class A, Class B, Class C
and Class D. U.S. Treasury Money Market Class A, B and D, U.S. Treasury Income
Class A, General Money Market Class A and B and Tax-Exempt Money Market Class A
are currently active.
1. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally
accepted accounting principles may require management to make certain estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of income and
expenses during the reporting period. Actual results could differ from those
estimates.
The following is a summary of significant accounting policies which are
consistently followed by the Trust in the preparation of its financial
statements.
PORTFOLIO VALUATIONS: Securities in the Portfolios are valued utilizing
the amortized cost method permitted in accordance with Rule 2a-7 under the
Investment Company Act of 1940. This method involves valuing a portfolio
security initially at its cost and thereafter assuming a constant amortization
to maturity of any discount or premium.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on the trade date. Net realized gains and losses on investments sold
are recorded on the identified cost basis. Interest income is recorded on the
accrual basis. Interest income consists of market discount earned (including
both original issue and market discount), less amortization of any market
premium.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: It is the policy of the
Portfolios to declare dividends daily from net investment income and to pay such
dividends monthly. Net realized capital gains, if any, are distributed at least
annually.
Income and capital gains to be distributed are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles.
FEDERAL TAXES: The Trust treats each Portfolio as a separate entity for
Federal income tax purposes. Each Portfolio intends to continue to qualify each
year as a "regulated investment company" under Subchapter M of the Internal
Revenue Code of 1986, as amended. By so qualifying, no Portfolio will be
subject to Federal income taxes to the extent that it distributes all of its
taxable or tax-exempt income, if any, for its tax year ending August 31. In
addition, by distributing during each calendar year substantially all of its net
investment income and capital gains, if any, no Portfolio will be subject to
Federal excise tax. Therefore, no Federal income tax provision is required. As
of August 31, 1996, the U.S. Treasury Money Market Portfolio, the General Money
Market Portfolio and the Tax-Exempt Money Market Portfolio have capital loss
carryovers of $396, $55,073 and $53,266, respectively, which will expire on
August 31, 2003 and $2,385, $30,898 and $54,800, respectively, which will expire
on August 31, 2004. As of August 31, 1996, the U.S. Treasury Money Market
Portfolio, the General Money Market Portfolio and the Tax-Exempt Money Market
Portfolio have elected for federal income tax purposes to defer to its fiscal
year ending August 31, 1997, $9,351, $188,591 and $4,895, respectively, of
losses recognized during the period November 1, 1995 to August 31, 1996. During
the fiscal year ended August 31, 1996, 100% of the Tax-Exempt Money Market
Portfolio's distributions paid to the shareholders were tax-exempt.
REPURCHASE AGREEMENTS: Each Portfolio, except the U.S. Treasury Income
Portfolio, may engage in repurchase agreement transactions. Under the terms of
a typical repurchase agreement, the Portfolio takes possession of an underlying
debt obligation subject to an obligation of the seller to repurchase, and the
Portfolio to resell, the obligation at an agreed upon price and time, thereby
determining the yield during the Portfolio's holding period. This arrangement
results in a fixed rate of return that is not subject to market fluctuations
during the Portfolio's holding period. It is the Portfolio's policy to maintain
collateral that is at least equal at all times to the total amount of the
repurchase obligations including interest.
22
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
AUGUST 31, 1996
1. SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
In the event of a counterparty default, the Portfolio has the right to use the
collateral to offset losses incurred. There is potential loss to the Portfolio
in the event the Portfolio is delayed or prevented from exercising its rights to
dispose of the collateral securities, including the risk of a possible decline
in the market value of the underlying securities during the period while the
Portfolio seeks to assert its rights. The Portfolio's sub-adviser, David L.
Babson & Co. Inc., acting under the supervision of the Trust's Board of
Trustees, reviews the value of collateral and the creditworthiness of those
banks and dealers with which the Portfolio enters into repurchase agreements to
evaluate potential risks.
EXPENSES AND ALLOCATIONS: Expenses directly attributable to a Portfolio
are charged to the Portfolio, while expenses which are attributable to more than
one Portfolio of the Trust are allocated among the respective Portfolios. Each
share class bears its pro-rata portion of expenses attributable to its series,
except that each class separately bears its' own distribution fees.
Income, Portfolio level expenses, and realized and unrealized gains and
losses are allocated to each class of shares on a daily basis based on each
class' portion of net assets.
ORGANIZATION COSTS: The Trust bears all costs in connection with its
organization, including the fees and expenses of registering and qualifying its
shares for distribution under Federal and state securities laws. All such costs
are being amortized using the straight line method over a period of five years
from commencement of each Portfolio's operations. In the event that any of the
initial shares of a Portfolio are redeemed before such organization expenses are
fully amortized, the related Portfolio will be reimbursed by the shareholder
redeeming such shares for any unamortized organization costs in the same
proportion as the number of initial shares being redeemed bears to the number of
initial shares outstanding at the time of redemption.
2. INVESTMENT ADVISORY, ADMINISTRATION, DISTRIBUTION AND OTHER FEES
Integrity Management & Research, Inc. (the "Investment Adviser" or the
"Manager"), a wholly-owned subsidiary of Integrity Investments, Inc., serves as
the Investment Adviser to the Trust. State Street Bank and Trust Company serves
as the Trust's administrator, custodian and transfer agent. Integrity
Investments, Inc. (the "Distributor") acts as exclusive distributor of the
Trust's shares.
The Trust pays the Investment Adviser a fee, computed daily and paid
monthly, at the annual rate of 0.20% of the average daily net assets of the
Trust. Under its Management Agreement with the Trust, the Manager performs
certain administrative and management services for the Trust and pays the
compensation, if any, of officers and Trustees who are affiliated with the
Manager or the Sub-Adviser and pays all the Portfolio expenses with the
following exceptions: the fees and expenses of those Trustees who are not
"interested persons" (as defined in the Investment Company Act of 1940) of the
Trust; interest on borrowings; taxes; expenses incurred by Class B, Class C and
Class D shares pursuant to the Distribution and Shareholder Servicing Plans; and
such extraordinary non-recurring expenses as may arise. From time to time the
Investment Adviser may waive all or a portion of the fees payable to it by a
Portfolio, either voluntarily or pursuant to applicable statutory expense
limitations. As such, the Investment Adviser has agreed to reimburse the
Portfolios for expenses exceeding 0.20% of average daily net assets for Class A
shares, 0.45% of the average daily net assets for Class B shares, 0.60% of
average daily net assets for Class C shares and 0.70% of average daily net
assets for Class D shares. The expense limitations are voluntary and were in
effect through August 31, 1996. The expense limitations may be removed at any
time thereafter with 90 days' prior notice to existing shareholders.
For the year ended August 31, 1996 the Investment Adviser reimbursed the
Trust as follows:
PORTFOLIO REIMBURSEMENT
- --------------------------------------------------------------------------------
U.S. Treasury Money Market $ 8,203
U.S. Treasury Income 6,282
General Money Market 16,950
Tax-Exempt Money Market 10,771
23
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
AUGUST 31, 1996
2. INVESTMENT ADVISORY, ADMINISTRATION, DISTRIBUTION AND OTHER FEES -
(CONTINUED)
The Investment Adviser has entered into an investment sub-advisory
agreement with David L. Babson & Co., Inc. ("Babson") pursuant to which the
Investment Adviser pays fees to Babson, computed daily and paid monthly, at the
annual rate of 0.10% of the first $500 million of the aggregate average daily
net assets of the Portfolios and 0.05% of average daily net assets in excess
thereof. Fees related to these services are borne directly by the Investment
Adviser.
The Trust has adopted a distribution plan for the Class A and Class B
shares, a distribution plan for the Class C shares and a distribution plan for
the Class D shares (together, the "Plans") pursuant to Rule 12b-1 of the
Investment Company Act of 1940. The Plans provide for payments to the
Distributor of up to 0.35% of the average net assets of the Class B shares, up
to 0.50% of the average net assets of the Class C shares and up to 0.50% of the
average net assets of the Class D shares. Payments under the Plans have been
authorized at the rate of 0.25% of each Portfolio's average daily net assets for
the Class B shares, 0.40% of each Portfolio's average daily net assets for the
Class C shares and 0.50% of each Portfolio's average daily net assets for the
Class D shares for the year ended August 31, 1996. No payments have been
authorized for the Class A shares.
Certain directors and officers of the Investment Adviser are also Trustees
and officers of the Trust.
Trustees who are not "interested persons" of the Trust receive an annual
$1,000 retainer and $1,000 per Trustee meeting attended and are entitled to be
reimbursed for out-of-pocket expenses incurred in attending such meetings.
3. SHARES OF BENEFICIAL INTEREST
The Trust's Declaration of Trust authorizes the Trustees to issue an
unlimited number of no par value shares of beneficial interest in the
Portfolios. Shareholders are entitled to one vote for each dollar (or
proportional fractional vote for each fraction of a dollar) of net asset value
per share owned. Each Portfolio votes separately with respect to issues
affecting only that Portfolio. Shareholders of a particular class have the
exclusive right to vote on matters pertaining only to that class. Pursuant to
the Declaration of Trust, the Trustees have the authority to create additional
Portfolios and to issue additional classes of shares for each Portfolio of the
Trust.
At August 31, 1996 Integrity Investments, Inc. owned 100% of the
outstanding shares of the U. S. Treasury Income Portfolio and certain
institutional shareholders were record owners of more than 10% of the total
outstanding shares of the following Portfolios:
NAME OF PORTFOLIO NUMBER OF PERCENTAGE OF
SHAREHOLDERS SHARES OWNED
- --------------------------------------------------------------------------------
U.S. Treasury Money Market 2 80.6%
General Money Market 1 88.7%
Tax-Exempt Money Market 1 99.9%
24
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders
of The Valiant Fund
In our opinion, the accompanying statements of assets and liabilities, including
the portfolios of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of U.S. Treasury Money Market
Portfolio, U.S. Treasury Income Portfolio, General Money Market Portfolio and
Tax-Exempt Money Market Portfolio (each a portfolio of The Valiant Fund) at
August 31, 1996, the results of each of their operations, the changes in each of
their net assets, and the financial highlights for the periods indicated, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of The Valiant Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at August
31, 1996 by correspondence with the custodian and brokers, and the application
of alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
October 16, 1996
25