UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-7582
The Valiant Fund
--------------------------------------------------
(Exact name of registrant as specified in charter)
871 Venetia Bay Boulevard, Venice, FL, 34292
---------------------------------------------------
(Address of principal executive offices) (Zip code)
Denis R. Curcio
871 Venetia Bay Boulevard, Venice, FL, 34292
--------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 800-242-9340
Date of fiscal year end: 8/31/03
Date of reporting period: 9/01/02 to 8/31/03
The registrant, an open-end investment company registered pursuant to Section
8(b) of the Investment Company Act of 1940 (the "Act"), has not filed a
registration statement that has gone effective under the Securities Act of 1933
(the "1933 Act") because beneficial interests in the registrant are issued and
sold solely in private transactions that do not involve any public offering
within the meaning of Section 4(2) of the 1933 Act. Accordingly, this report is
not filed under Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934.
ITEM 1. REPORTS TO STOCKHOLDERS.
Insert a copy of the report transmitted to stockholders pursuant to Rule 30e-1
under the Act (17 CFR 270.30e-1).
THE VALIANT FUND
ANNUAL REPORT
AUGUST 31, 2003
THE VALIANT FUND
Annual Report - August 31, 2003
Table of Contents
PAGE
- ---------------------------------------------------------------
U.S. TREASURY MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments 1
Statement of Assets and Liabilities 2
Statement of Operations 2
Statements of Changes in Net Assets 3
Financial Highlights 4
- --------------------------------------------------------------
GENERAL MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments 6
Statement of Assets and Liabilities 9
Statement of Operations 9
Statements of Changes in Net Assets 10
Financial Highlights 11
- --------------------------------------------------------------
TAX-EXEMPT MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments 13
Statement of Assets and Liabilities 15
Statement of Operations 15
Statements of Changes in Net Assets 16
Financial Highlights 17
- --------------------------------------------------------------
U.S. TREASURY INCOME PORTFOLIO
Statement of Assets and Liabilities 18
Statement of Changes in Net Assets 19
Financial Highlights 20
Notes to Financial Statements 21
Report of Independent Accountants 25
Management of the Trust 26
- --------------------------------------------------------------
VALIANT U.S. TREASURY MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments
August 31, 2003
MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
---- --------- ------------ -------------
U.S. TREASURY OBLIGATIONS - 51.6%
U.S. TREASURY BILLS - 29.0% 9/4/03 $115,000,000 $ 114,991,338
2/12/04 10,000,000 9,953,761
2/19/04 5,000,000 4,975,775
-------------
$ 129,920,874
-------------
U.S. TREASURY NOTES - 22.6%
2.75% 9/30/03 20,000,000 20,015,340
4.25 11/15/03 15,000,000 15,074,985
3.00 1/31/04 15,000,000 15,103,807
3.38 4/30/04 10,000,000 10,137,455
3.25 5/31/04 15,000,000 15,227,685
2.88 6/30/04 15,000,000 15,228,058
6.00 8/15/04 10,000,000 10,464,755
-------------
101,252,085
-------------
TOTAL U.S. TREASURY OBLIGATIONS (AMORTIZED COST $231,172,959) 231,172,959
-------------
REPURCHASE AGREEMENTS - 48.3%
Bank of America, Inc., 1.02%, due 9/2/03, with a
maturity value of $75,008,500 (Collateralized by
various 5.5% GNMA bonds valued at $76,500,000
with maturity dates 11/20/2030 - 2/16/2033) 75,000,000 75,000,000
J.P. Morgan Chase & Co., 1.02%, due 9/2/03, with a
maturity value of $71,808,137 (Collateralized by
various 5.5% GNMA bonds valued at $79,561,312
with maturity dates 3/15/2008 - 8/15/2033) 71,800,000 71,800,000
UBS Paine Webber, 1.04, due 9/2/03, with a
maturity value of $70,008,550 (Collateralized by
various 4.0% - 7.5% GNMA bonds valued at $71,634,195
with maturity dates 1/20/2027 - 6/20/2032) 70,000,000 70,000,000
-------------
TOTAL REPURCHASE AGREEMENTS (AMORTIZED COST $216,800,000) 216,800,000
-------------
TOTAL INVESTMENTS (AMORTIZED COST $447,972,959) (a) - 99.9% 447,972,959
OTHER ASSETS LESS LIABILITIES - 0.1% 430,860
-------------
TOTAL NET ASSETS - 100% $ 448,403,819
=============
- -----------------
(a) Cost and value for federal income tax and financial reporting purposes are
the same.
GNMA - Government National Mortgage Association
See notes to financial statements.
1
THE VALIANT FUND
U.S. TREASURY MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 2003
ASSETS:
Investments, at value $ 231,172,959
Repurchase agreements 216,800,000
-------------
Total investments 447,972,959
Cash 33,094
Receivables:
Interest 817,062
Other assets 10,581
-------------
TOTAL ASSETS 448,833,696
LIABILITIES:
Payables:
Dividends $ 171,773
Accrued expensed and other liabilities:
Investment manager 77,029
Distribution and shareholder servicing 181,075
---------
TOTAL LIABILITIES 429,877
-------------
NET ASSETS $ 448,403,819
=============
COMPOSITION OF NET ASSETS:
Capital $ 448,608,288
Undistributed net investment income 47,615
Accumulated net realized loss from
investment transactions (252,084)
-------------
NET ASSETS $ 448,403,819
=============
Class A Shares
Net assets $ 7,159,463
Shares outstanding 7,161,746
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class B Shares
Net assets $ 126,616,854
Shares outstanding 126,676,099
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class D Shares
Net assets $ 286,190,747
Shares outstanding 286,317,923
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class E Shares
Net assets $ 28,436,755
Shares outstanding 28,452,526
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 2003
INVESTMENT INCOME:
Interest $ 7,679,212
-------------
TOTAL INVESTMENT INCOME 7,679,212
EXPENSES:
Investment manager $ 1,080,813
Distribution and shareholder servicing:
Class A Shares 25,515
Class B Shares 478,471
Class D Shares 1,609,452
Class E Shares 596,060
Trustee fees 16,393
-----------
Total expenses before contractual
fee reimbursements 3,806,704
Contructual fee reimbursements (178,614)
-------------
NET EXPENSES 3,628,090
-------------
NET INVESTMENT INCOME 4,051,122
-------------
NET REALIZED GAIN FROM INVESTMENT
TRANSACTIONS 1,110
-------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 4,052,232
=============
See notes to financial statements.
2
THE VALIANT FUND
U.S. TREASURY MONEY MARKET PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, 2003 AUGUST 31, 2002
--------------- ---------------
INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income $ 4,051,122 $ 8,354,452
Net realized gain (loss) from investment transactions 1,110 64,680
-------------- ---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 4,052,232 8,419,132
-------------- ---------------
DIVIDENDS:
Net investment income:
Class A Shares (88,008) (87,546)
Class B Shares (1,304,296) (1,973,684)
Class D Shares (2,299,594) (4,865,173)
Class E Shares (359,224) (1,432,401)
-------------- ---------------
TOTAL DIVIDENDS TO SHAREHOLDERS (4,051,122) (8,358,804)
-------------- ---------------
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL TRANSACTIONS (136,255,956) (103,478,612)
-------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS (136,254,846) (103,418,284)
NET ASSETS:
Beginning of period 584,658,665 688,076,949
-------------- ---------------
End of period (including undistributed net investment income of $47,615
at August 31, 2003 and August 31, 2002) $ 448,403,819 $ 584,658,665
============== ===============
See notes to financial statements.
3
THE VALIANT FUND
U.S. TREASURY MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS, CLASS A SHARES
FOR THE YEARS ENDED AUGUST 31,
-------------------------------------------------------------
2003 2002 2001 2000 1999
--------- --------- --------- --------- ---------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
INVESTMENT ACTIVITIES
Net investment income 0.012 0.021 0.05 0.06 0.05
Net realized gain (loss) from investment transactions 0.000 * 0.000 * (0.00)* (0.00)* (0.00)*
--------- --------- --------- --------- ---------
Total from investment activities 0.012 0.021 0.05 0.06 0.05
--------- --------- --------- --------- ---------
DIVIDENDS
Net investment income (0.012) (0.021) (0.05) (0.06) (0.05)
--------- --------- --------- --------- ---------
Total dividends (0.012) (0.021) (0.05) (0.06) (0.05)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= =========
TOTAL RETURN 1.22% 2.05% 5.30% 5.66% 4.77%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 7,159 $ 7,260 $ 10,355 $ 15,725 $ 15,088
Ratio of expenses to average net assets, before fee waivers
and / or expense reimbursements 0.55% 0.55% 0.55% 0.55% 0.55%
Ratio of expenses to average net assets 0.20% 0.20% 0.20% 0.20% 0.20%
Ratio of net investment income to average net assets 1.21% 2.12% 5.13% 5.55% 4.69%
FINANCIAL HIGHLIGHTS, CLASS B SHARES
FOR THE YEARS ENDED AUGUST 31,
------------------------------------------------------------------
2003 2002 2001 2000 1999
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
INVESTMENT ACTIVITIES
Net investment income 0.010 0.018 0.05 0.05 0.04
Net realized gain (loss) from investment transactions 0.000 * 0.000 * (0.00)* (0.00)* (0.00)*
---------- ---------- ---------- ---------- ----------
Total from investment activities 0.010 0.018 0.05 0.05 0.04
---------- ---------- ---------- ---------- ----------
DIVIDENDS
Net investment income (0.010) (0.018) (0.05) (0.05) (0.04)
---------- ---------- ---------- ---------- ----------
Total dividends (0.010) (0.018) (0.05) (0.05) (0.04)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
TOTAL RETURN 0.96% 1.80% 5.04% 5.39% 4.51%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 126,617 $ 146,246 $ 117,213 $ 41,893 $ 64,266
Ratio of expenses to average net assets, before fee waivers
and / or expense reimbursements 0.55% 0.55% 0.55% 0.55% 0.55%
Ratio of expenses to average net assets 0.45% 0.45% 0.45% 0.45% 0.45%
Ratio of net investment income to average net assets 0.95% 1.77% 4.44% 5.20% 4.42%
* Less than $0.005 per share.
See notes to financial statements.
4
THE VALIANT FUND
U.S. TREASURY MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS, CLASS D SHARES
FOR THE YEARS ENDED AUGUST 31,
-------------------------------------------------------------
2003 2002 2001 2000 1999
--------- --------- --------- --------- ---------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
INVESTMENT ACTIVITIES
Net investment income 0.008 0.015 0.05 0.05 0.04
Net realized gain (loss) from investment transactions 0.000 * 0.000 * (0.00)* (0.00)* (0.00)*
--------- --------- --------- --------- ---------
Total from investment activities 0.008 0.015 0.05 0.05 0.04
--------- --------- --------- --------- ---------
DIVIDENDS
Net investment income (0.008) (0.015) (0.05) (0.05) (0.04)
--------- --------- --------- --------- ---------
Total dividends (0.008) (0.015) (0.05) (0.05) (0.04)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= =========
TOTAL RETURN 0.71% 1.54% 4.77% 5.13% 4.25%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 286,191 $ 325,896 $ 339,659 $ 269,929 $ 204,713
Ratio of expenses to average net assets 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net investment income to average net assets 0.71% 1.54% 4.55% 5.04% 4.16%
FINANCIAL HIGHLIGHTS, CLASS E SHARES
FOR THE YEARS ENDED AUGUST 31,
-----------------------------------
2003 2002 2001 2000
--------- --------- --------- ---------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.00 $ 1.00
--------- --------- --------- ---------
INVESTMENT ACTIVITIES
Net investment income 0.005 * 0.013 0.04 0.05
Net realized gain (loss) from investment transactions 0.000 * 0.000 * (0.00) * (0.00)
--------- --------- --------- ---------
Total from investment activities 0.005 0.013 0.04 0.05
--------- --------- --------- ---------
DIVIDENDS
Net investment income (0.005) * (0.013) (0.04) (0.05)
--------- --------- --------- ---------
Total dividends (0.005) (0.013) (0.04) (0.05)
--------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.00 $ 1.00
========= ========= ========= =========
TOTAL RETURN 0.41% 1.24% 4.46% 4.82%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 28,437 $ 105,257 $ 220,850 $ 141,693
Ratio of expenses to average net assets 1.00% 1.00% 1.00% 1.00%
Ratio of net investment income to average net assets 0.48% 1.32% 4.19% 5.31%
FOR THE PERIOD
APRIL 6, 1999 TO
AUGUST 31, 1999 (a)
-------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00
-------------------
INVESTMENT ACTIVITIES
Net investment income 0.02
Net realized gain (loss) from investment transactions (0.00) *
-------------------
Total from investment activities 0.02
-------------------
DIVIDENDS
Net investment income (0.02)
-------------------
Total dividends (0.02)
-------------------
NET ASSET VALUE, END OF PERIOD $ 1.00
===================
TOTAL RETURN 1.54%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 13,086
Ratio of expenses to average net assets 0.99%(c)
Ratio of net investment income to average net assets 3.81%(c)
* Less than $0.005 per share.
(a) Commencement of operations.
(b) Not Annualized.
(c) Annualized.
See notes to financial statements.
5
VALIANT GENERAL MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments
August 31, 2003
MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
---- -------------- -------------- --------------
COMMERCIAL PAPER - 43.8%
ASSET BACKED SECURITIES - 2.0%
Special Purpose Accounts Receivable Cooperative Corp.* 1.07% 10/23/03 $ 10,000,000 $ 9,984,544
--------------
BANKING - 12.2%
Banco Continental de Panama SA 1.08 4/5/04 27,500,000 27,320,975
Banco Cuscatlan, SA 1.08 4/5/04 20,000,000 19,869,800
Banco Rio de La Plata SA 0.97 3/18/04 5,000,000 4,973,190
Central American Bank 1.3 11/10/03 10,000,000 9,974,722
--------------
62,138,687
--------------
BROKER / DEALERS - 5.9%
Goldman Sachs Group, Inc. 1.22 2/4/04 30,000,000 30,000,000
--------------
EDUCATION - 4.1%
Johns Hopkins University 1.05 10/6/03 20,800,000 20,800,000
--------------
FINANCIAL SERVICES - 8.8%
Sigma Finance, Inc. 1.14 11/24/03 10,000,000 9,973,400
Ticonderoga Funding 1.07 10/3/03 10,000,000 9,990,489
Yorkshire Building Society 1.04 1/5/04 25,000,000 24,909,000
--------------
44,872,889
--------------
LOGGING - 5.9%
NATC California LLC 1.04 10/20/03 30,000,000 29,957,533
--------------
TRANSPORTATION - 4.9%
CSN Overseas* 1.26 10/16/03 25,000,000 24,960,500
--------------
TOTAL COMMERCIAL PAPER (AMORTIZED COST $222,714,153) 222,714,153
--------------
CORPORATE OBLIGATIONS - 18.7%
BANKING - 8.9%
Rabobank Nederland NV 1.04 9/1/03 20,000,000 20,000,000
Sun Trust Bank, Inc.* 1.10 9/1/03 25,000,000 24,999,735
--------------
44,999,735
--------------
FINANCIAL SERVICES - 1.0%
Labelle Capital Funding LLC* 1.18 9/4/03 1,505,000 1,505,000
Wyoming Steel Investment * 1.17 9/4/03 3,700,000 3,700,000
--------------
5,205,000
--------------
FOOD - 0.3%
Jacksons Food Stores Inc.* 1.16 9/4/03 1,248,000 1,248,000
--------------
See notes to financial statements.
6
VALIANT GENERAL MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments
August 31, 2003
MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
---- -------------- -------------- --------------
HEALTH SERVICES - 0.2%
Riverview Medical Office Building* 1.13% 9/4/03 $ 900,000 $ 900,000
--------------
LEISURE - 0.9%
Commonwealth Country Club, Ltd.* 1.45 9/4/03 3,480,000 3,480,000
Sandusky Yacht Club* 1.16 9/4/03 1,275,000 1,275,000
--------------
4,755,000
--------------
REAL ESTATE - 4.6%
208 Associates LLC* 1.16 9/4/03 1,005,000 1,005,000
Aztec Properties LLC* 1.17 9/4/03 2,168,000 2,168,000
Baird Properties LLC* 1.25 9/4/03 2,255,000 2,255,000
CMW Real Estate LLC* 1.13 9/4/03 2,370,000 2,370,000
El Dorado Enterprises of Miami FL* 1.18 9/4/03 2,000,000 2,000,000
El Dorado Enterprises of Miami FL* 1.13 9/4/03 10,815,000 10,815,000
G & J Properties II* 1.15 9/4/03 1,000,000 1,000,000
Ordeal Properties LLC* 1.16 9/4/03 1,685,000 1,685,000
--------------
23,298,000
--------------
SPECIAL PURPOSE ENTITY - 2.8%
Barry-Wehmiller Group* 1.15 9/4/03 1,270,000 1,270,000
Best One Tire & Service* 1.15 9/4/03 985,000 985,000
Butler County, Surgical Properties* 1.15 9/4/03 1,440,000 1,440,000
Exal Corp* 1.15 9/4/03 1,500,000 1,500,000
GCG Portage LLC* 1.23 9/4/03 1,330,000 1,330,000
IHA Capital Development* 1.15 9/4/03 1,500,000 1,500,000
ISO Building LLC* 1.15 9/4/03 1,000,000 1,000,000
Taylor Steel, Inc.* 1.16 9/4/03 2,465,000 2,465,000
Village Enterprises* 1.16 9/4/03 1,000,000 1,000,000
Wellington Green LLC* 1.16 9/4/03 1,890,000 1,890,000
--------------
14,380,000
--------------
TOTAL CORPORATE OBLIGATIONS (AMORTIZED COST $94,785,735) 94,785,735
--------------
CERTIFICATES OF DEPOSIT - 23.2%
BANKING - 23.2%
Abbey National 1.91 10/21/03 15,000,000 15,000,204
CitiBank 1.06 10/31/03 30,000,000 29,999,489
Harris Trust Bank of Chicago 1.32 3/1/04 28,000,000 27,999,306
National City Bank 1.03 10/16/03 25,000,000 25,000,000
Toronto Dominion Bank NY 1.51 11/12/03 20,000,000 20,000,000
--------------
TOTAL CERTIFICATES OF DEPOSIT (AMORTIZED COST $117,998,999) 117,998,999
--------------
MUNICIPAL NOTES AND BONDS - 8.7%
ALABAMA - 3.8%
Auburn Taxable Revenue, Series B* 1.12 9/3/03 6,855,000 6,855,000
Meadow Brook* 1.15 9/4/03 12,300,000 12,300,000
--------------
19,155,000
--------------
ILLINOIS - 0.9%
Upper Illinois River Valley Development Authority* 1.16 9/4/03 4,595,000 4,595,000
--------------
MICHIGAN -0.4%
Michigan City Industrial Economic Development Revenue* 1.15 9/4/03 1,795,000 1,795,000
--------------
MISSISSIPPI -0.9%
State of Mississippi Taxable GO 1.64 12/1/03 5,000,000 5,000,053
--------------
NEW YORK - 1.2%
Approach Partnership* 1.16 9/4/03 1,145,000 1,145,000
Cotswold Village Associates LLC* 1.15 9/4/03 5,000,000 5,000,000
--------------
6,145,000
--------------
See notes to financial statements.
7
VALIANT GENERAL MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments
August 31, 2003
MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
---- ------------- ------------- -------------
OHIO - 0.6%
Hopkins Waterhouse LLC* 1.13% 9/4/03 $ 1,085,000 $ 1,085,000
Mercer County, HealthCare Facilities* 1.15 9/5/03 1,960,000 1,960,000
-------------
3,045,000
-------------
TENNESSEE - 0.9%
Tennessee School Board Authority 1.05 10/8/03 4,500,000 4,500,000
-------------
TOTAL MUNICIPAL NOTES AND BONDS (AMORTIZED COST $44,235,053) 44,235,053
-------------
REPURCHASE AGREEMENTS - 5.5%
Bank of America, 1.02%, due 9/02/03
with a maturity value of $27,703,139
(Collateralized by 5.5% GNMA bonds valued at $28,195,055) 27,700,000 27,700,000
-------------
TOTAL REPURCHASE AGREEMENTS (AMORTIZED COST $27,700,000) 27,700,000
-------------
TOTAL INVESTMENTS (AMORTIZED COST $507,433,940) (a) - 99.9% 507,433,940
OTHER ASSETS LESS LIABILITIES - 0.1% 526,432
-------------
TOTAL NET ASSETS - 100% $ 507,960,372
=============
- ----------
* Variable rate investment. Securities payable on demand at par including
accrued interest (usually within seven days notice) and unconditionally
secured as to principal and interest by letters of credit or other credit
support agreements from major banks. The interest rates are adjustable and
are based on bank prime rates or other interest rate adjustment indeces.
The rate shown represents the rate in effect at August 31, 2003. The
maturity date shown reflects next rate change date.
(a) Cost and value for federal income tax and financial reporting purposes are
the same.
GO - Government Obligation
GNMA - Government National Mortgage Association
LLC - Limited Liability Corporation
SA - South America
See notes to financial statements.
8
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 2003
ASSETS:
Investments, at value $ 479,733,940
Repurchase agreements 27,700,000
-------------
Total investments 507,433,940
Cash 89,329
Receivables:
Interest 1,007,791
Other assets 1,056
-------------
TOTAL ASSETS 508,532,116
LIABILITIES:
Payables:
Dividends $ 399,078
Accrued expenses and other liabilities:
Investment manager 98,209
Distribution and shareholder servicing 74,457
---------
TOTAL LIABILITIES 571,744
-------------
NET ASSETS $ 507,960,372
=============
COMPOSITION OF NET ASSETS:
Capital $ 508,041,439
Accumulated net realized loss from
investment transactions (81,067)
-------------
NET ASSETS $ 507,960,372
=============
Class A Shares
Net assets $ 364,391,858
Shares outstanding 364,443,954
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class B Shares
Net assets $ 10,620,706
Shares outstanding 10,622,754
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class D Shares
Net assets $ 74,942,647
Shares outstanding 74,954,524
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class E Shares
Net assets $ 58,005,161
Shares outstanding 58,020,208
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 2003
INVESTMENT INCOME:
Interest $ 10,005,127
------------
TOTAL INVESTMENT INCOME 10,005,127
EXPENSES:
Investment manager $ 1,352,128
Distribution and shareholder servicing:
Class A Shares 1,878,408
Class B Shares 42,871
Class D Shares 224,992
Class E Shares 657,037
Trustee fees 18,454
-----------
Total expenses before contractual
fee reimbursements 4,173,890
Contractual fee waivers and
expense reimbursements (1,909,112)
------------
NET EXPENSES 2,264,778
------------
NET INVESTMENT INCOME 7,740,349
------------
NET REALIZED GAIN FROM INVESTMENT
TRANSACTIONS 14,510
------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 7,754,859
============
See notes to financial statements.
9
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, 2003 AUGUST 31, 2002
--------------- ---------------
INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income $ 7,740,349 $ 10,579,333
Net realized gain from investment transactions 14,510 74,398
------------ -------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 7,754,859 10,653,731
------------ -------------
DIVIDENDS:
Net investment income:
Class A Shares (6,870,152) (8,658,723)
Class B Shares (126,461) (226,245)
Class D Shares (327,768) (412,123)
Class E Shares (415,968) (1,282,242)
------------ -------------
TOTAL DIVIDENDS TO SHAREHOLDERS (7,740,349) (10,579,333)
------------ -------------
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL TRANSACTIONS 10,146,226 (8,802,408)
------------ -------------
NET INCREASE (DECREASE) IN NET ASSETS 10,160,736 (8,728,010)
NET ASSETS:
Beginning of period 497,799,636 506,527,646
------------ -------------
End of period $507,960,372 $ 497,799,636
============ =============
See notes to financial statements.
10
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
FINANCIAL HIGHTLIGHTS, CLASS A SHARES
FOR THE YEARS ENDED AUGUST 31,
---------------------------------------------------------
2003 2002 2001 2000 1999
--------- -------- -------- -------- --------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
--------- -------- -------- -------- --------
INVESTMENT ACTIVITIES
Net investment income 0.013 0.022 0.05 0.06 0.05
Net realized gain (loss) from investment transactions 0.000 * 0.000 * 0.00 * (0.00)* (0.00)*
--------- -------- -------- -------- --------
Total from investment activities 0.013 0.022 0.05 0.06 0.05
--------- -------- -------- -------- --------
DIVIDENDS
Net investment income (0.013) (0.022) (0.05) (0.06) (0.05)
--------- -------- -------- -------- --------
Total dividends (0.013) (0.022) (0.05) (0.06) (0.05)
--------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
========= ======== ======== ======== ========
TOTAL RETURN 1.29% 2.24% 5.52% 5.97% 5.00%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 364,392 $357,676 $380,513 $394,118 $254,808
Ratio of expenses to average net assets, before fee waivers
and / or expense reimbursements 0.55% 0.55% 0.55% 0.55% 0.55%
Ratio of expenses to average net assets 0.20% 0.20% 0.20% 0.20% 0.20%
Ratio of net investment income to average net assets 1.28% 2.22% 5.36% 5.89% 4.91%
FINANCIAL HIGHLIGHTS, CLASS B SHARES
FOR THE YEARS ENDED AUGUST 31,
-----------------------------------------------------------
2003 2002 2001 2000 1999
--------- -------- -------- -------- --------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
--------- -------- -------- -------- --------
INVESTMENT ACTIVITIES
Net investment income 0.010 0.019 0.05 0.06 0.05
Net realized gain (loss) from investment transactions 0.000 * 0.000 * 0.00 * (0.00)* (0.00)*
--------- -------- -------- -------- --------
Total from investment activities 0.010 0.019 0.05 0.06 0.05
--------- -------- -------- -------- --------
DIVIDENDS
Net investment income (0.010) (0.019) (0.05) (0.06) (0.05)
--------- -------- -------- -------- --------
Total dividends (0.010) (0.019) (0.05) (0.06) (0.05)
--------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
========= ======== ======== ======== ========
TOTAL RETURN 1.04% 1.98% 5.25% 5.71% 4.74%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 10,620 $ 15,719 $ 9,169 $ 4,793 $ 1,569
Ratio of expenses to average net assets, before fee waivers
and / or expense reimbursements 0.55% 0.55% 0.55% 0.55% 0.55%
Ratio of expenses to average net assets 0.45% 0.45% 0.45% 0.45% 0.45%
Ratio of net investment income to average net assets 1.03% 1.91% 4.91% 5.61% 4.72%
* Less than $0.005 per share.
See notes to financial statements.
11
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS, CLASS D SHARES
FOR THE FOR THE FOR THE FOR THE PERIOD
YEAR ENDED YEAR ENDED YEAR ENDED SEPTEMBER 27, 1999
AUGUST 31, 2003 AUGUST 31, 2002 AUGUST 31, 2001 TO AUGUST 31, 2000 (c)
--------------- --------------- --------------- ----------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.00 $ 1.00
------- ------- -------- --------
INVESTMENT ACTIVITIES
Net investment income 0.007 0.016 0.05 0.05
Net realized gain (loss) from
investment transactions 0.000 * 0.000 * 0.00 * (0.00)*
------- ------- -------- --------
Total from investment activities 0.007 0.016 0.05 0.05
------- ------- -------- --------
DIVIDENDS
Net investment income (0.007) (0.016) (0.05) (0.05)
------- ------- -------- --------
Total dividends (0.007) (0.016) (0.05) (0.05)
------- ------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.00 $ 1.00
======= ======= ======== ========
TOTAL RETURN 0.79% 1.73% 4.99% 5.10% (a)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $74,943 $40,662 $ 16,861 $ 10,121
Ratio of expenses to average net assets 0.70% 0.70% 0.70% 0.70% (b)
Ratio of net investment income to
average net assets 0.73% 1.55% 4.81% 5.53% (b)
FINANCIAL HIGHLIGHTS, CLASS E SHARES
FOR THE YEARS ENDED AUGUST 31, FOR THE PERIOD
--------------------------------------------- MAY 5, 1999 TO
2003 2002 2001 2000 AUGUST 31, 1999 (c)
------- ------- -------- -------- -------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
------- ------- -------- -------- --------
INVESTMENT ACTIVITIES
Net investment income 0.005 0.014 0.05 0.05 0.01
Net realized gain (loss) from investment
transactions 0.000 * 0.000 * 0.00 * (0.00)* (0.00)*
------- ------- -------- -------- --------
Total from investment activities 0.005 0.014 0.05 0.05 0.01
------- ------- -------- -------- --------
DIVIDENDS
Net investment income (0.005) (0.014) (0.05) (0.05) (0.01)
------- ------- -------- -------- --------
Total dividends (0.005) (0.014) (0.05) (0.05) (0.01)
------- ------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
======= ======= ======== ======== ========
TOTAL RETURN 0.49% 1.42% 4.68% 5.13% 1.31% (a)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $58,005 $83,742 $ 99,984 $ 89,270 $ 30,159
Ratio of expenses to average net assets 1.00% 1.00% 1.00% 1.00% 0.99% (b)
Ratio of net investment income to average
net assets 0.51% 1.45% 4.23% 5.18% 4.00% (b)
* Less than $0.005 per share.
(a) Not Annualized.
(b) Annualized.
(c) Commencement of operations.
See notes to financial statements.
12
VALIANT TAX-EXEMPT MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments
August 31, 2003
MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
---- -------- ---------- -----------
COMMERCIAL PAPER - 14.1%
FLORIDA - 12.0%
City of Gainsville, Series C 0.80% 9/3/03 $1,000,000 $ 1,000,000
Sarasota County Public Hospital, LOC Suntrust Bank 0.88 9/10/03 2,100,000 2,100,000
Sarasota County Public Hospital, LOC Suntrust Bank 0.88 9/10/03 6,050,000 6,050,000
Sunshine State 0.80 9/4/03 1,100,000 1,100,000
Sunshine State 0.87 9/3/03 4,810,000 4,810,000
Sunshine State, Series E 0.88 9/2/03 2,000,000 2,000,000
----------
17,060,000
----------
UTAH - 2.1%
Intermountain Power Supply Revenue, Series F(a) 1.00 9/15/03 3,000,000 3,000,000
----------
TOTAL COMMERCIAL PAPER (AMORTIZED COST $20,060,000) 20,060,000
----------
MUNICIPAL BONDS AND NOTES -26.0%
FLORIDA - 4.6%
Orange County School District, Tax Anticipation Note 2.75 9/16/03 3,000,000 3,001,264
Semionole County School District, Tax Anticipation Note 2.00 8/20/04 3,500,000 3,533,504
----------
6,534,768
----------
INDIANA - 5.3%
Elkhart County School District, Tax Anticipation Note 1.75 12/31/03 5,000,000 5,011,507
Indiana Bond Bank Revenue, Series A-2 2.00 1/27/04 2,500,000 2,509,015
----------
7,520,522
----------
NEW HAMPSHIRE - 3.5%
Belknap County, Tax Anticipation Note 1.50 12/26/03 5,000,000 5,007,065
----------
PENNSYLVANIA - 1.2%
Delaware County Industrial Development Authority Pollution Control Revenue
LOC Bank One 0.95 2/11/04 1,700,000 1,700,000
----------
TEXAS - 7.9%
Harris County 0.85 9/3/03 2,000,000 2,000,000
Harris County 0.85 10/1/03 4,195,000 4,195,000
Houston Independent School District 1.05 6/3/04 5,000,000 4,998,874
----------
11,193,874
----------
WISCONSIN - 3.5%
Milwaukee, Revenue Anticipation Notes 2.00 12/15/03 5,000,000 5,013,822
----------
TOTAL MUNICIPAL BONDS AND NOTES (AMORTIZED COST $36,970,051) 36,970,051
----------
VARIABLE MUNICIPAL BONDS* - 59.2%
CONNECTICUT - 0.7%
Municipal Securities Trust Receipts, Series JPMC4 0.92 9/1/03 975,000 975,000
----------
FLORIDA - 43.1%
Broward County, Housing Finance Authority Revenue, Multi-Family, LOC Bank One 0.85 9/3/03 2,600,000 2,600,000
Collier County Development Authority, Health Care Facilities Revenue, LOC Fifth Third Bank 0.83 9/5/03 2,000,000 2,000,000
Dade County, Water & Sewer Systems Revenue 0.79 9/3/03 5,600,000 5,600,000
Florida State Municipal Power Ageny Revenue 0.85 9/3/03 1,000,000 1,000,000
Florida Gulf Coast University Foundation, LOC First Union (Wachovia) 0.90 9/4/03 2,500,000 2,500,000
Halifax Hospital Medical Center, Health Care Facilities Revenue, LOC Bank of America 0.85 9/3/03 1,200,000 1,200,000
See notes to financial statements.
13
VALIANT TAX-EXEMPT MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments
August 31, 2003
MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
---- ---- ------ -----
Housing Finance Agency, Multi-Family, LOC CSFB 0.90% 9/3/03 $ 2,400,000 $ 2,400,000
Housing Finance Agency, Multi-Family, LOC Barclays Bank 0.78 9/3/03 1,000,000 1,000,000
Housing Finance Agency, Multi-Family, LOC CSFB 0.90 9/3/03 3,700,000 3,700,000
Housing Finance Agency, Multi-Family, LOC Freddie Mac 0.78 9/3/03 2,000,000 2,000,000
Housing Finance Corp. Revenue, Multi-Family, Series I-A 0.85 9/4/03 2,375,000 2,375,000
Housing Finance Corp., Revenue, Multi-Family 0.85 9/4/03 3,500,000 3,500,000
Jacksonville Electric Authority Revenue 0.80 9/1/03 2,700,000 2,700,000
Orange County, Housing Finance Authority Homeowner Revenue,
Series N-6 0.90 9/3/03 1,690,000 1,690,000
Orange County, School Board CTFS Participation, Series B 0.80 9/1/03 900,000 900,000
Orlando Utilities Commonwealth Water & Electric Revenue 0.80 9/3/03 8,000,000 8,000,000
Palm Beach County Revenue, LOC Northern Trust Co. 0.87 9/3/03 4,000,000 4,000,000
Pinellas County Health Facilities Authority Revenue, LOC Bank of America 0.85 9/4/03 4,200,000 4,200,000
Port Orange Florida Revenue, LOC LaSalle National Bank, N.A. 0.84 9/4/03 6,500,000 6,500,000
University North Florida Foundation Income Revenue, LOC First Union (Wachovia) 0.90 9/4/03 1,800,000 1,800,000
Volusia County, Health Facilities Authority Revenue, LOC First Union (Wachovia) 0.85 9/4/03 1,700,000 1,700,000
------------
61,365,000
------------
ILLINOIS - 0.7%
Illinois Development Finance Authority Revenue, St. Augstine College Project, LOC Bank One 0.80 9/1/03 1,000,000 1,000,000
------------
MASSACHUSETTS - 2.8%
Commonwealth Infrastructure Financing Authority 0.85 9/22/03 4,000,000 4,000,000
------------
MINNESOTA - 1.0%
Arden Hills Housing & Health Care Facilities Revenue, LOC US Bank N.A. 0.85 9/1/03 1,500,000 1,500,000
------------
NEW YORK - 2.1%
Puttable Floating Option Tax Exempt Receipts(a) 0.95 6/17/04 2,990,000 2,990,000
------------
PUERTO RICO - 6.9%
Commonwealth of Puerto Rico 1.20 1/8/04 2,000,000 2,000,000
Commonwealth of Puerto Rico 0.95 5/26/04 6,295,000 6,295,000
Commonwealth Infrastructure Financing Authority 0.81 9/4/03 1,495,000 1,495,000
------------
9,790,000
------------
TEXAS - 1.9%
Port Arthur Jefferson County 0.87 9/1/03 1,325,000 1,325,000
Richardson Independent School Disrict General Obligation Note 1.35 4/1/04 1,500,000 1,500,000
------------
2,825,000
------------
TOTAL VARIABLE MUNICIPAL BONDS (AMORTIZED COST $84,445,000) 84,445,000
------------
TOTAL INVESTMENTS (AMORTIZED COST $141,475,051) (b) - 99.3% 141,475,051
OTHER ASSETS LESS LIABILITIES - 0.7% 1,043,988
------------
TOTAL NET ASSETS - 100% $142,519,039
============
- ----------
* Variable rate investment. Securities payable on demand at par including
accrued interest (usually within seven days notice) and unconditionally
secured as to principal and interest by letters of credit or other credit
support agreements from major banks. The interest rates are adjustable and
are based on bank prime rates or other interest rate adjustment indeces. The
rate shown represents the rate in effect at August 31, 2003. The maturity
date shown reflects next rate change date.
(a) These instruments are payable on demand and are secured by letters of credit
or other credit support agreements from major banks.
(b) Cost and value for federal income tax and financial reporting purposes are
the same.
IDR - Industrial Development Revenue
LOC - Letter of Credit
See notes to financial statements.
14
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 2003
ASSETS:
Investments, at value $ 141,475,051
Cash 826,705
Receivables:
Interest 331,268
-------------
TOTAL ASSETS 142,633,024
-------------
LIABILITIES:
Payables:
Dividends 88,286
Accrued expenses and other liabilities:
Investment manager 25,699
------
TOTAL LIABILITIES 113,985
-------------
NET ASSETS $ 142,519,039
=============
COMPOSITION OF NET ASSETS:
Capital $ 142,632,715
Accumulated net realized loss from
investment transactions (113,676)
-------------
NET ASSETS $ 142,519,039
=============
Class A Shares+
Net Assets $ 142,519,039
Shares outstanding 142,666,287
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 2003
INVESTMENT INCOME:
Interest $ 2,337,172
-----------
TOTAL INVESTMENT INCOME 2,337,172
EXPENSES:
Investment manager $ 381,550
Distribution and shareholder servicing:
Class A Shares 667,057
Class D Shares 937
Trustees fees 5,153
---------
Total expenses before contractual
fee reimbursements 1,054,697
Contractual fee waivers and
expense reimbursements (672,210)
-----------
NET EXPENSES 382,487
-----------
NET INVESTMENT INCOME 1,954,685
-----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 1,954,685
===========
- -----------------------
+ At August 31, 2003 there were no Class D Shares outstanding.
See notes to financial statements.
15
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, 2003 AUGUST 31, 2002
--------------- ---------------
INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income $ 1,954,685 $ 2,298,436
Net realized gain from investment transactions - 16,779
------------- -------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 1,954,685 2,315,215
------------- -------------
DIVIDENDS:
Net investment income:
Class A Shares (1,953,468) (2,295,642)
Class D Shares (1,217) (2,794)
------------- -------------
TOTAL DIVIDENDS TO SHAREHOLDERS (1,954,685) (2,298,436)
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL TRANSACTIONS (32,299,508) 33,170,793
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS (32,299,508) 33,187,572
NET ASSETS:
Beginning of period 174,818,547 141,630,975
------------- -------------
End of period $ 142,519,039 $ 174,818,547
============= =============
See notes to financial statements.
16
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS, CLASS A SHARES
FOR THE YEARS ENDED AUGUST 31,
-----------------------------------------------------------------
2003 2002 2001 2000 1999
---- ---- ---- ---- ----
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
-------- -------- --------- --------- ---------
INVESTMENT ACTIVITIES
Net investment income 0.014 0.015 0.03 0.04 0.03
Net realized gain (loss) from investment transactions 0.000 0.000 * (0.00)* (0.00)* 0.00 *
-------- -------- --------- --------- ---------
Total from investment activities 0.014 0.015 0.03 0.04 0.03
-------- -------- --------- --------- ---------
DIVIDENDS
Net investment income (0.014) (0.015) (0.03) (0.04) (0.03)
-------- -------- --------- --------- ---------
Total dividends (0.014) (0.015) (0.03) (0.04) (0.03)
-------- -------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
======== ======== ========= ========= =========
TOTAL RETURN 1.03% 1.49% 3.42% 3.67% 3.01%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $142,519 $174,104 $ 141,464 $ 207,183 $ 288,343
Ratio of expenses to average net assets, before fee waivers
and / or expense reimbursements 0.55% 0.55% 0.55% 0.55% 0.55%
Ratio of expenses to average net assets 0.20% 0.20% 0.20% 0.20% 0.20%
Ratio of net investment income to average net assets 1.02% 1.47% 3.39% 3.57% 2.96%
FINANCIAL HIGHLIGHTS, CLASS D SHARES
FOR THE PERIOD FOR THE FOR THE FOR THE PERIOD
SEPTEMBER 1, 2002 TO YEAR ENDED YEAR ENDED JUNE 19, 2000 TO
APRIL 30, 2003 (a) AUGUST 31, 2002 AUGUST 31, 2001 AUGUST 31, 2000 (c)
------------------ --------------- --------------- -------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.00 $ 1.00
---------- -------- ------ ------
INVESTMENT ACTIVITIES
Net investment income 0.004 * 0.009 0.03 0.01
Net realized gain (loss) from investment transactions 0.000 0.000 * (0.00)* (0.00)*
---------- -------- ------ ------
Total from investment activities 0.004 0.009 0.03 0.01
---------- -------- ------ ------
DIVIDENDS
Net investment income (0.004)* (0.009) (0.03) (0.01)
---------- -------- ------ ------
Total dividends (0.004) (0.009) (0.03) (0.01)
---------- -------- ------ ------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.00 $ 1.00
========== ======== ====== ======
TOTAL RETURN 0.41% 0.99% 2.91% 0.70% (a)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ -- $ 715 $ 167 $ 75
Ratio of expenses to average net assets 0.70% 0.70% 0.70% 0.70% (b)
Ratio of net investment income to average net assets 0.65% 0.89% 2.96% 3.45% (b)
* Less than $0.005 per share.
(a) Not Annualized.
(b) Annualized.
(c) Commencement of operations.
See notes to financial statements.
17
THE VALIANT FUND
U.S. TREASURY INCOME PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 2003
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
========
See notes to financial statements.
18
THE VALIANT FUND
U.S. TREASURY INCOME PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, 2003 (a) AUGUST 31, 2002 (b)
------------------- -------------------
INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income - -
---------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS - -
---------- ----------
DIVIDENDS:
Net investment income - -
---------- ----------
INCREASE IN NET ASSETS FROM CAPITAL TRANSACTIONS - -
---------- ----------
NET INCREASE IN NET ASSETS
NET ASSETS
Beginning of period 621 621
---------- ----------
End of year $ 621 $ 621
========== ==========
(a) The Portfolio did not operate during the year ended August 31, 2003.
(b) The Portfolio did not operate during the year ended August 31, 2002.
See notes to financial statements.
19
THE VALIANT FUND
U.S. TREASURY INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS, CLASS A SHARES
FOR THE YEARS ENDED
------------------------------------------------------------------------
2003 (a) 2002 (b) 2001 (c) 2000 (d) 1999 (e)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
INVESTMENT ACTIVITIES
Net investment income - - 0.01 0.01 0.00 *
Net realized gain from investment transactions - - - - -
---------- ---------- ---------- ---------- ----------
Total from investment activities - - 0.01 0.01 0.00 *
---------- ---------- ---------- ---------- ----------
DIVIDENDS
Net investment income - - (0.01) (0.01) (0.00)*
---------- ---------- ---------- ---------- ----------
Total dividends - - (0.01) (0.01) (0.00)*
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
TOTAL RETURN - - 0.68% (f) 0.51% (f) 0.40% (f)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 1 $ 1 $ 1 $ 1 $ 1
Ratio of expenses to average net assets - - 0.20% (g) 0.20% (g) 0.20% (g)
Ratio of net investment income to average net assets - - 5.11% (g) 4.21% (g) 3.69% (g)
* Less than $0.005 per share.
(a) The Portfolio did not operate during the year ended August 31, 2003.
(b) The Portfolio did not operate during the year ended August 31, 2002.
(c) The Portfolio operated from December 6, 2000 to January 24, 2001.
(d) The Portfolio operated from December 7, 1999 to January 19, 2000.
(e) The Portfolio operated from December 14, 1998 to January 22, 1999.
(f) Not Annualized.
(g) Annualized.
See notes to financial statements.
20
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2003
1. ORGANIZATION:
The U.S. Treasury Money Market Portfolio, U.S. Treasury Income
Portfolio, General Money Market Portfolio and Tax-Exempt Money Market
Portfolio (referred to individually as a "Portfolio" and collectively
as the "Portfolios") 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.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies
followed by the Portfolios in the preparation of their financial
statements. The policies are in conformity with generally accepted
accounting principles in the United States of America. The preparation
of financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
at the date of the financial statements and the reported amounts of
income and expenses for the period. Actual results could differ from
those estimates.
SECURITY VALUATION:
Investments of the Portfolios are valued at amortized cost,
which approximates value. Under the amortized cost method, discount or
premium, if any, is accreted or amortized, respectively, on a
straight-line basis to the maturity of the security.
SECURITIES TRANSACTIONS AND RELATED INCOME:
Securities transactions are recorded on trade date. Security
gains and losses are calculated on the identified cost basis. Interest
income is recognized on the accrual basis and includes, where
applicable, the amortization or accretion of a premium or a discount.
REPURCHASE AGREEMENTS:
Each Portfolio may enter into repurchase agreements with an
entity whose creditworthiness has been reviewed and found satisfactory
by the Portfolios' Sub-Advisor, Reich & Tang Asset Management L.P. The
repurchase price generally equals the price paid by a Portfolio plus
interest negotiated on the basis of current short-term rates, which may
be more or less than the rate on the underlying portfolio securities.
The seller, under a repurchase agreement, is required to maintain the
collateral held pursuant to the agreement, with a market value equal to
or greater than the repurchase price (including accrued interest).
Collateral subject to repurchase agreements is held by the Portfolios'
custodian, either physically or in book entry form.
EXPENSE ALLOCATION:
Expenses directly attributable to a Portfolio are charged to
that Portfolio. Trust expenses are allocated proportionately among each
Portfolio within the Trust in relation to the net assets of each
Portfolio or another reasonable basis. Expenses specific to a class are
charged to that class.
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.
21
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 2003
The amount of dividends from net investment income and net
realized gains are determined in accordance with U.S. income tax
regulations, which may differ from the U.S. generally accepted
accounting principles. These "book/tax" differences are either
considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified
among the components of net assets; temporary differences do not
require reclassification.
FEDERAL TAXES:
Each Portfolio is a separate taxable entity for federal tax
purposes. Each Portfolio has qualified and intends to qualify each year
as a "regulated investment company" under Subchapter M of the Internal
Revenue Code, as amended, and distribute substantially all of its
taxable net investment income and net realized gains, if any, to their
shareholders. Accordingly, no provision for federal income excise tax
is required.
3. RELATED PARTY TRANSACTIONS:
INVESTMENT ADVISER:
Integrity Management & Research, Inc. (the "Manager"), a
wholly owned subsidiary of Integrity Investments, Inc., serves as the
Investment Adviser to the Trust. The Trust pays the Manager a fee,
computed daily and paid monthly, at the annual rate of 0.20% of the
average daily net assets of each Portfolio.
Under terms of the Management Agreement, all expenses incurred
by the Portfolios are paid directly by the Manager, except for
distribution and shareholder servicing fees, Trustee fees and other
miscellaneous non-recurring fees.
DISTRIBUTION AND SHAREHOLDER SERVICING PLAN:
Integrity Investments, Inc. (the "Distributor"), an affiliate
of the manager, acts as exclusive distributor of the Trust's shares.
The Trust has adopted distribution and shareholder servicing plans for
each class of shares offered (together, the "Plans") pursuant to Rule
12b-1 of the 1940 Act. For its services, the Distributor is authorized
to receive a fee, computed daily and paid monthly, based on the average
daily net assets of each class, at the following annual percentage
rates:
CLASS FEE RATE
- ----- --------
Class A Shares 0.35%
Class B Shares 0.35
Class C Shares 0.65
Class D Shares 0.50
Class E Shares 0.80
EXPENSE LIMITATIONS:
The Portfolios' Adviser and Distributor have contractually
agreed to reimburse expenses and waive certain distribution fees
necessary to limit total expenses to the following rates until December
31, 2003:
DISTRIBUTION AND
CLASS SERVICING FEES WAIVER EXPENSE LIMITATION
- ----- --------------------- ------------------
Class A Shares 0.35% 0.20%
Class B Shares 0.10 0.45
Class C Shares 0.00 0.85
Class D Shares 0.00 0.70
Class E Shares 0.00 1.00
22
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 2003
FEE REIMBURSEMENTS:
Expenses reimbursed and fees waived by the Adviser and
Distributor are set forth on each Portfolio's Statement of Operations.
4. CAPITAL SHARE TRANSACTIONS:
Each class is authorized to issue an unlimited number of
shares with no par value. Transactions in capital and shares of
beneficial interest by class for the Portfolios for the year ended
August 31, 2003 and year ended August 31,2002 are listed below (amounts
represent shares and dollars):
U.S. TREASURY MONEY MARKET GENERAL MONEY MARKET TAX-EXEMPT MONEY MARKET
PORTFOLIO PORTFOLIO PORTFOLIO
-------------------------------- -------------------------------- ---------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, 2003 AUGUST 31, 2002 AUGUST 31, 2003 AUGUST 31, 2002 AUGUST 31, 2003 AUGUST 31, 2002
-------------------------------- -------------------------------- ---------------------------------
SHARE TRANSACTIONS:
CLASS A SHARES:
Issued 12,459,045 19,084,977 2,785,649,642 2,000,279,120 642,984,337 545,082,871
Reinvested 86 145 23,362 86,127 11 15
Redeemed (12,558,975) (22,201,812) (2,778,968,659) (2,023,332,491) (674,568,798) (512,459,792)
------------------------------- ------------------------------- -----------------------------
Net increase
(decrease) in
Class A Shares (99,844) (3,116,690) 6,704,345 (22,967,244) (31,584,450) 32,623,094
------------------------------- ------------------------------- -----------------------------
CLASS B SHARES:
Issued 1,092,082,247 854,485,702 39,818,413 116,332,750 - -
2,061 - - - - -
Redeemed (1,111,710,396) (825,407,966) (44,917,766) (109,779,239) - -
------------------------------- ------------------------------- -----------------------------
Net increase
(decrease) in
Class B Shares (19,626,088) 29,077,736 (5,099,353) 6,553,511 - -
------------------------------- ------------------------------- -----------------------------
CLASS D SHARES:
Issued 981,056,095 1,334,987,930 210,163,036 297,761,212 1,500,791 8,419,769
Reinvested - 3,024 102,115 113,209 - -
Redeemed (1,020,736,681) (1,348,864,879) (175,979,968) (274,064,440) (2,215,849) (7,872,070)
------------------------------- ------------------------------- -----------------------------
Net increase
(decrease) in
Class D Shares (39,680,586) (13,873,925) 34,285,183 23,809,981 (715,058) (547,699)
------------------------------- ------------------------------- -----------------------------
CLASS E SHARES:
Issued 1,661,501,323 624,567,338 132,955,656 109,437,782 - -
Reinvested 5 15 6 18 - -
Redeemed (1,738,350,766) (740,133,086) (158,699,611) (125,636,456) - -
------------------------------- ------------------------------- -----------------------------
Net increase
(decrease) in
Class E Shares (76,849,438) (115,565,733) (25,743,949) (16,198,656) - -
------------------------------- ------------------------------- -----------------------------
NET INCREASE
(DECREASE) IN
SHARE
TRANSACTIONS (136,255,956) (103,478,612) 10,146,226 (8,802,408) (32,299,508) 33,170,793
=============================== =============================== =============================
23
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 2003
5. CONCENTRATION OF CREDIT RISK:
As of August 31, 2003, approximately 59.7% of the Tax-Exempt
Money Market Portfolio was invested in obligations of political
subdivisions of the State of Florida and, accordingly, is subject to
the credit risk associated with the non-performance of such issuers.
Approximately 50% of these investments are further secured, as to
principal and interest, by credit enhancements such as letters of
credit, municipal bond insurance, and guarantees issued by financial
institutions.
6. FEDERAL TAX INFORMATION:
All of the dividends paid for the years ended August 31, 2003
and 2002 by the General Money Market Portfolio and the U.S. Treasury
Money Market Portfolio are ordinary income for Federal Income Tax
Purposes
During the fiscal years ended August 31, 2003 and 2002, all of the
distributions paid by the Tax-Exempt Money Market Portfolio have been
designated tax-exempt income distributions.
Undistributed net investment income differs from financial statement
and tax purposes primarily due to the timing of dividend payments.
For federal income tax purposes, the following Portfolios have capital
loss carryforwards as of August 31, 2003, which are available to offset
future realized gains, if any:
NAME AMOUNT EXPIRES
- -------------------------- -------------------------
U.S. Treasury Money Market $ 230,225 2008
21,859 2009
----------
$ 252,084
==========
General Money Market $ 29,268 2005
51,799 2008
----------
$ 81,067
==========
Tax-Exempt Money Market $ 54,799 2004
1,943 2005
12,059 2006
2,545 2008
42,330 2009
----------
$ 113,676
==========
24
REPORT OF INDEPENDENT AUDITORS
To the Trustees and Shareholders of The Valiant Fund
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of portfolio investments, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of U.S. Treasury Money Market
Portfolio, the General Money Market Portfolio, the Tax-Exempt Money Market
Portfolio, and the U.S. Treasury Income Portfolio (constituting The Valiant
Fund, hereafter referred to as the "Fund") at August 31, 2003, the results of
each of their operations for the year then ended, the changes in each of their
net assets for the two years then ended and their financial highlights for each
of the five years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with auditing
standards generally accepted in the United States of America, which require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at August 31, 2003 by correspondence with the custodian and
brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
October 8, 2003
25
MANAGEMENT OF THE TRUST
The trustees and officers of the Trust and their principal occupations during
the past five years are as follows:
RICHARD F. CURCIO PRESIDENT, TRUSTEE, CHAIRMAN OF THE BOARD
Founded Integrity Investments, Inc. (a broker/dealer) and Integrity Management &
Research, Inc.(an investment adviser) in 1992, and is currently President and
Director of each. Senior Vice President/Regional Manager for Fidelity
Institutional Services Company from 1987 to 1992. Associated with Fidelity
Distributors from 1979 to 1992.
JOHN S. CULBERTSON TRUSTEE
Retired. Trust Consultant with Fidelity Investments Institutional Services Co.
from 1990 to 1993.
RUFUS C. CUSHMAN JR. TRUSTEE
Retired. Money Manager with Fidelity Management & Research Corp. From 1968
through 1994.
H. WILLIS DAY TRUSTEE
Retired. Former Senior Vice President of Southeast Bank, FLA, N.A.
ROGER F. DUMAS TRUSTEE
Private investor since 1987.
KENNETH J. PHELPS TRUSTEE
President, Principal and Director of Reliance Trust Company, Atlanta, GA since
1992. Chairman, Chief Executive Officer and Director, C&S/Sovran Trust Company,
Inc. from 1987 to 1992.
DENIS R. CURCIO VICE PRESIDENT, SECRETARY AND TREASURER
Mr. Curcio joined Integrity Investments, Inc. the distributor of The Valiant
Fund in June of 1998 after graduating from Jacksonville University with a BS in
Finance. Aged 27, Denis is responsible for oversight and administration of The
Valiant Fund.
26
BRENDEN R. CURCIO VICE PRESIDENT
Mr. Curcio joined Integrity Investments, Inc., the distributor of The Valiant
Fund in June of 1994 after graduating from Stetson University with a BBA in
Finance. Aged 31, Brenden is responsible for institutional sales of The Valiant
Fund in the Northeast and Midwest.
ROBERT MELLEY VICE PRESIDENT, ASSISTANT SECRETARY AND
ASSISTANT TREASURER
Senior Vice President of Integrity Investments, Inc. since April 1994.
Senior Vice President, Treasurer
Fidelity Distributors, Inc. from 1981 to 1994.
27
ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics that applies to the Registrant's
President and Treasurer.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
No financial expert was chosen because none of the disinterested trustees,
believe they are qualified as financial experts but all are retired financial
or investment professionals and feel they can fulfill their duties as
required.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5: AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
a) The President and Treasurer of the registrant have evaluated the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Act) within 90 days from the date hereof. Based on that
evaluation, they have concluded that the registrant's disclosure controls
and procedures were effective.
b) There has been no change in the registrant's internal controls over
financial reporting (as defined in Rule 30a-3(d) under the Act) that
occurred during the registrant's last fiscal half-year that has materially
affected, or is likely to materially affect, the registrant's internal
control over financial reporting.
ITEM 10. EXHIBITS.
(a) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Attached hereto.
(b) A separate certification for each principal executive officer and principal
financial officer of the registrant as required by Rule 30a-2 under the Act (17
CFR 270.30a-2) in the exact form set forth below: Attached hereto.
SIGNATURES
Pursuant to the requirements of 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 10/31/03
Pursuant to the requirements of 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 10/31/03
By (Signature and Title) /s/ Denis R. Curcio
-------------------------------------------------------
Denis R. Curcio, Treasurer
Date 10/31/03