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 811-3541
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Asset Management Fund
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(Exact name of registrant as specified in charter)
230 West Monroe Street, Chicago, IL 60606
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(Address of principal executive offices) (Zip code)
Citi Fund Services, 3435 Stelzer Road, Columbus, OH 43219
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(Name and address of agent for service)
Registrant's telephone number, including area code: 800-527-3713
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Date of fiscal year end: 10/31/07
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Date of reporting period: 10/31/07
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Form N-CSR is to be used by management investment companies to file reports
with the Commission not later than 10 days after the transmission to
stockholders of any report that is required to be transmitted to stockholders
under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).
The Commission may use the information provided on Form N-CSR in its regulatory,
disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form
N-CSR, and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. Section 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
[AMF LOGO]
ASSET MANAGEMENT FUND
230 West Monroe Street
Chicago, IL 60606
[AMF LOGO]
ASSET MANAGEMENT FUND
MANAGED BY:
SHAY ASSETS MANAGEMENT, INC.
ANNUAL REPORT
OCTOBER 31, 2007
CHAIRMAN'S LETTER
The Asset Management Fund (AMF) family of no load institutional mutual funds
is pleased to present shareholders the 2007 Annual Report.
The performance of the financial markets during the twelve months ended
October 31, 2007, may be viewed as a reflection of the continued weakness in the
housing market. Although for much of the period it seemed that both the major
fixed-income and equity markets were largely free from direct impact of that
weakness, by the second calendar quarter problems had surfaced in the bond
market. While the fulcrum of the credit issues appeared to reside in certain
esoteric structured products, some negative effects of the troubles seeped into
most fixed-income markets. In this environment, the ability to engage in active
portfolio management was a critical necessity for the portfolio manager who
hoped to produce superior returns. We have presented a more detailed view of
each portfolio in the following pages.
I am pleased to welcome the AMF Large Cap Equity Fund to the AMF family. This
high-quality equity portfolio complements the fixed-income funds that have been
the core of AMF for more than twenty five years. Finally, let me say that I am
sincerely grateful to our many shareholders who have expressed their faith in
our management capabilities, many of whom have been invested with us for those
twenty five years. Your trust is our beacon guiding our every step forward.
/s/ Rodger D. Shay
Rodger D. Shay
Chairman
Asset Management Fund
The report has been prepared for the information of the shareholders of the
Asset Management Fund and must be preceded or accompanied by a prospectus. It is
not to be construed as an offering to sell or buy any shares of the Fund. Such
an offering is made only by the prospectus.
1
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ASSET MANAGEMENT FUND REVIEW
OCTOBER 31, 2007
The past year in fixed income was host to a marked increase in volatility as
the effects of 425 basis points of monetary policy tightening and the abrupt
reversal of a seemingly endless supply of residential mortgage credit began to
weigh heavily on many sectors of the bond market. The financial press headlines
have come full circle from the conspicuous absence of risk premiums and record
Wall Street earnings at the end of 2006 to the onset of market conditions that
negatively impacted primary issuance and secondary trading in the MBS market,
$70 billion of losses (and counting) related to sub-prime MBS and the ouster of
the CEOs of Merrill Lynch and Citigroup by the end of 2007. While the year
succeeding any FOMC rate tightening cycle is typically one of transition, the
over-extended state of the U.S. economy in 2004, driven by generational lows in
interest rates, lax lending standards and the unprecedented growth of
residential mortgage credit that followed, clearly mandated a multi-period
tightening cycle with large, nominal increases in the Federal Funds rate.
Unfortunately, those very excesses created by extraordinary low interest rates
all worked together against the economy when the FOMC needed to raise rates in
much the same way that the stimulus helped during the first few years of the new
millennium.
Taken together and in no particular order, an increasingly leveraged and
interest rate sensitive consumer (70% + home ownership rate), rising consumer
costs (energy, food, medical care, education), sharply higher mortgage carrying
costs from the 2003 nadir, slowing job creation and wage growth have pushed the
risks of global financial contagion during 2007 to levels with few historical
parallels. Clearly, the FOMC needed to ease monetary policy as all of the
above-mentioned undesirables occurred during the second half of this year. Some
say bad timing, we say the inevitable consequences of a needlessly low Federal
Funds Rate for much too long of a time period. Indeed, a Negative Real Mortgage
Rate (Nominal Interest Rate-Annualized Home Price Appreciation) for over two
years, 2002-2005 knows few comparable time periods and clearly drove the demand
side of the mortgage boom.
Let's do a recap of the year and identify some key drivers of market behavior
and extend our discussion with a performance review of the AMF Mutual Funds.
The U.S. Treasury Yield Curve steepened as a result of the turmoil in
financial conditions ignited by the collapse of the sub-prime mortgage market
that culminated in the September first Federal Funds rate cut in more than four
years. As a consequence, 2-year U.S. Treasury Notes ended the year yielding
3.95% and 10-year notes yielded 4.47% at fiscal year close. The spread between
2-year and 10-year U.S. Treasury Note yields ended October at 53 basis points.
The months of February and March saw the first headlines of sub-prime
originators failing, resulting in growing fears of contagion into the broader
economy. Credit conditions started tightening and liquidity was reduced as
volatility increased. The economy seemed to bounce back in April and by July the
lack of market liquidity started weighing on spreads and forced liquidations of
several leveraged funds. August saw money markets panic and one important
consequence was the spike in the 3-month LIBOR rate relative to the federal
funds rate. The FOMC acted in September and cut the federal funds rate by a
larger than expected 50 basis points. The statement issued highlighted the
adverse
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Portfolio composition is subject to change.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. Investment return and
net asset value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than the original cost.
2
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ASSET MANAGEMENT FUND REVIEW
OCTOBER 31, 2007
economic effects of "disruptions in financial markets" and temporarily reduced
its emphasis on the risk of higher inflation. The September move by the Federal
Reserve partially offset the effects of the tighter credit markets as spreads
over the federal funds rate temporarily narrowed somewhat from extremely high
levels, the commercial paper market improved, LIBOR rates came down and stocks
rallied. Despite the temporary relief, however, downside risks to economic
activity remained. As home prices saw bigger declines and market conditions
continued deteriorating, the Fed acted again in October and reduced rates by
another 25 bps.
One of the most visible symptoms of the disruptions in the credit markets has
been the spread between LIBOR and the federal funds rate. Even though this
spread dropped after the Fed eased rates back in September, it still remains
above historical levels. The underlying problem behind that spread is the
decrease in financial institutions' liquidity starting in the third quarter of
2007 as assets were brought into balance sheet due to the diminished
availability of short-term funding via the commercial paper market and other
structured funding vehicles such as the widely publicized SIVs. In addition,
there is uncertainty about the extent of mortgage losses still to be realized,
contributing to illiquidity in the markets.
As the US economy turns into 2008, the expansion that is now in its sixth year
faces challenges, as the housing downturn is not expected to see many signs of
recovery. Borrowers delinquencies and defaults should continue to reflect the
turn in credit conditions in the home mortgage market, from overly easy until
the sub-prime boom of 2005 and 2006 to significantly more restrictive,
especially since August. The inventory of unsold homes is still very elevated
and putting downward pressure on home prices on a national basis. Some
economists are forecasting the first-ever nationwide fall in home prices of
between 2.5 and 4.5% in 2008. Outside of the mortgage market, one of the key
effects of the housing crisis has been the tightening of bank lending standards
for business and consumer loans, as well as depressed consumer confidence. These
effects, combined with higher energy and commodity prices, leave the economy
more vulnerable to shocks.
Despite the recent surge in energy costs, so far this year core inflation data
has stayed within the Federal Reserve's 1-2% "comfort zone". Yet, Federal
Reserve officials remain concerned about inflation and have demonstrated to be
willing to tolerate a relatively weak economy in order eliminate the potential
threat from high energy prices and a weaker dollar.
Whether the expected economic slowdown in 2008 will be moderate or the period
of weakness will be more extended will depend on both the extent to which the
expected continued slide in home prices will continue to have more negative
wealth, borrowing, and spending effects than has been so far apparent, as well
as on how long it will take for the lagged effects of a falling dollar and
interest rate cuts to be felt. Many market observers believe that while the
Federal Reserve interventions via reductions in the federal funds rate or the
discount rate can help alleviate some of the illiquidity problem, funding
pressures in the financial system are unlikely to dissipate into at least the
first half of 2008.
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Portfolio composition is subject to change.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. Investment return and
net asset value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than the original cost.
3
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ASSET MANAGEMENT FUND REVIEW
OCTOBER 31, 2007
AMF ULTRA SHORT MORTGAGE FUND
For the year, the strategy of the portfolio continued to allocate assets
towards those sectors better positioned to benefit from a stable to lower
interest rate environment and a steeper yield curve. Additionally, "Up in
Quality" trades fared very well as concerns regarding deteriorating credit and
liquidity in the U.S. MBS market pushed spreads wider across all
mortgage-related assets, particularly lower quality, non-agency securities.
During the twelve months ended October 31, 2007, the spread between 2-year and
10-year U.S. Treasury Notes increased from -10 basis points to +53 basis points.
The portfolio allocation to One-month LIBOR floating rate collateralized
mortgage obligations ("CMOs") increased from 21% to 41% of assets during the
fiscal year. These bonds were given preference due to their higher yield and
discounted dollar price versus money market, fixed rate agency CMOs and other
short duration assets with prices above par. One-month LIBOR floaters provided a
yield advantage relative to other, short assets spread over the U.S. Treasury
curve as "TED" spreads (LIBOR less U.S. Treasury yields) expanded and Federal
Funds remained unchanged for a long, fifteen months after the last FOMC rate
hike (6/06-9/07). In response to the tight agency/non-agency spread basis and
heightened concerns regarding deteriorating mortgage credit, the quality of the
One-Month LIBOR allocation was improved during the year with the sale of nearly
$126 million of Private Label, ALT-A, AA rated floaters and the purchase of more
than $366 million agency floaters. The sales were completed during the first
quarter of 2007 and the purchases, financed with both cash and the sale of lower
yielding, money market fixed rate CMOs, occurred regularly during the first half
of 2007.
The other, key asset allocation shifts were undertaken in the Fixed Rate CMO
sector. From a portfolio weighting standpoint, the Fixed Rate CMO allocation was
reduced from 30% to 19% of assets. As mentioned above, money market, Agency CMOs
were sold in favor of higher yielding, lower dollar priced, One-month LIBOR CMO
floaters. Additionally, par dollar priced or higher CMO PACs and/or Sequentials
were sold in favor of longer, deeply discounted Agency Sequentials to lower
weighted average portfolio price and capitalize on the "bull steepener" with the
advent of FOMC rate reductions during 2007
Another minor adjustment to the portfolio's exposure was the sale of hybrid
ARM securities that had more credit exposure than the average holdings of the
fund. Those sales happened early in the year, before the disruptions in the
credit markets weighted more heavily on spreads and valuations beginning in
July.
The portfolio's percentile rankings have climbed higher during the fiscal
year, driven primarily by the "up in quality" shifts described above and the
effects of allocations by many funds in the Ultrashort Bond Category to
sub-prime backed securities, including lower rated Home Equity ABS, CDOs, CDO
squared and SIVs.
THE FUND POSTED A 28TH PERCENTILE, 1-YEAR RANKING IN THE MORNINGSTAR
ULTRASHORT BOND CATEGORY WITH 4.67% TOTAL RETURN FOR THE TWELVE MONTHS ENDED
OCTOBER 31, 2007.
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Portfolio composition is subject to change.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. Investment return and
net asset value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than the original cost.
4
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ASSET MANAGEMENT FUND REVIEW
OCTOBER 31, 2007
AMF ULTRA SHORT FUND
For the year, the strategy of the portfolio continued to allocate assets
towards those sectors better positioned to benefit from a stable to lower
interest rate environment and a steeper yield curve. Additionally, "Up in
Quality" trades fared very well as concerns regarding deteriorating credit and
liquidity in the U.S. MBS market pushed spreads wider across all
mortgage-related assets, particularly lower quality, non-agency securities.
During the twelve months ended October 31, 2007, the spread between 2-year and
10-year U.S. Treasury Notes increased from -10 basis points to +53 basis points.
The portfolio allocation to One-month LIBOR floating rate collateralized
mortgage obligations ("CMOs") increased from 25% to 29% of assets during the
fiscal year. These bonds were given preference due to their higher yield and
discounted dollar price versus money market, fixed rate agency CMOs and other
short duration assets with prices above par. One-month LIBOR floaters provided a
yield advantage relative to other, short assets spread over the U.S. Treasury
curve as "TED" spreads (LIBOR less U.S. Treasury yields) expanded and Federal
Funds remained unchanged for a long, fifteen months after the last FOMC rate
hike (6/06-9/07). In response to the tight agency/non-agency spread basis and
heightened concerns regarding deteriorating mortgage credit, the quality of the
One-Month LIBOR allocation was improved during the year with the purchase of
nearly $28 million of agency floaters. The purchases, financed with both cash
and the sale of lower yielding, money market fixed rate CMOs, occurred regularly
during the first half of 2007.
The other, key asset allocation shifts were undertaken in the Fixed Rate CMO
sector. From a portfolio weighting standpoint, the Fixed Rate CMO allocation was
reduced from 25% to 13% of assets. As mentioned above, money market, Agency CMOs
were sold in favor of higher yielding, lower dollar priced, One-month LIBOR CMO
floaters. Additionally, par dollar priced or higher CMO PACs and/or Sequentials
were sold in favor of longer, deeply discounted Agency Sequentials to lower
weighted average portfolio price and capitalize on the "bull steepener" with the
advent of FOMC rate reductions during 2007
THE FUND POSTED A 53RD PERCENTILE, 1-YEAR RANKING IN THE MORNINGSTAR
ULTRASHORT BOND CATEGORY WITH 4.07% TOTAL RETURN FOR THE TWELVE MONTHS ENDED
OCTOBER 31, 2007.
AMF SHORT U.S. GOVERNMENT FUND
For the year, the strategy of the portfolio continued to allocate assets
towards those sectors better positioned to benefit from a stable to lower
interest rate environment and a steeper yield curve. During the twelve months
ended October 31, 2007, the spread between 2-year and 10-year U.S. Treasury
Notes increased from -- 10 basis points to +53 basis points.
The portfolio launched a new allocation to One-month LIBOR floating rate
collateralized mortgage obligations ("CMOs") and ramped up to 17% of assets
during the fiscal year. These bonds were given preference due to their higher
yield and discounted dollar price versus money market, fixed rate agency CMOs
and other short duration assets with prices above par. One-month LIBOR floaters
provided a
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Portfolio composition is subject to change.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. Investment return and
net asset value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than the original cost.
5
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ASSET MANAGEMENT FUND REVIEW
OCTOBER 31, 2007
yield advantage relative to other, short assets spread over the U.S. Treasury
curve as "TED" spreads (LIBOR less U.S. Treasury yields) expanded and Federal
Funds remained unchanged for a long, fifteen months after the last FOMC rate
hike (6/06-9/07). The 100% Agency quality purchases, financed with both cash and
the sale of lower yielding, money market fixed rate CMOs, occurred regularly
during the first half of 2007.
The other, key asset allocation shifts were undertaken in the Fixed Rate CMO
sector. From a portfolio weighting standpoint, the Fixed Rate CMO allocation was
reduced from 54% to 27% of assets. As mentioned above, money market, Agency CMOs
were sold in favor of higher yielding, lower dollar priced, One-month LIBOR CMO
floaters. Additionally, par dollar priced or higher short, CMO PACs and/or
Sequentials were sold in favor of longer, deeply discounted Agency Sequentials
to lower weighted average portfolio price and capitalize on the "bull steepener"
with the advent of FOMC rate reductions during 2007
The portfolio continued to benefit from the prepayment stability and fast
coupon adjustments of seasoned One-year Constant Maturity Treasury ("CMT")
agency arms. These securities provide a progressively higher yield advantage to
Federal Funds with the advent of FOMC easing and were increased to 19% to 17%
with the purchase of a seasoned pool during the second half of 2007.
THE FUND POSTED A 49TH PERCENTILE, 1-YEAR RANKING IN THE MORNINGSTAR SHORT
GOVERNMENT CATEGORY WITH A 4.93% TOTAL RETURN FOR THE TWELVE MONTHS ENDED
OCTOBER 31, 2007.
AMF INTERMEDIATE MORTGAGE FUND
The portfolio's overall asset allocation was very similar year-over-year,
however, the duration contribution was markedly changed during the year. In June
2006, the Fed ended one of most protracted tightening campaigns in recent
memory. The Fund managers changed the component bonds within the portfolio to
take advantage of the relatively flat yield curve and position the portfolio for
a slight inversion or a lower rate scenario. The sector that saw the greatest
increase in allocation was the One-month LIBOR sector, increasing to 12% of the
portfolio. At the time, the One-month LIBOR rate was the highest point on the
curve. Historically, the next move after a Fed tightening cycle followed by a
pause in action is a Fed cut. By purchasing longer duration assets and One-month
LIBOR floaters, a 2.5 year duration can be created that will benefit from lower
rates more than a portfolio comprised entirely of 2.5 year duration securities.
Because of the shape of the curve, this barbell portfolio delivers more current
yield than a bullet portfolio.
The well structured fixed rate CMOs and the high-quality hybrid ARMs provided
partial protection against the systematic widening of the entire mortgage sector
during the latter half of the year. All mortgage products suffered from the
sub-prime contagion and credit crisis during August and September of 2007. The
flight to quality bid in the Treasury and Agency debenture market caused the
peer group of ASCPX to post stellar returns during this timeframe. Because the
Fund is categorized by Morningstar based on duration rather than portfolio
composition, the Morningstar peer group has
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Portfolio composition is subject to change.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. Investment return and
net asset value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than the original cost.
6
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ASSET MANAGEMENT FUND REVIEW
OCTOBER 31, 2007
limited exposure to mortgage-backed securities. This lack of mortgage exposure
contributed to the less than ideal percentile ranking. However, on a 3 and
5-year basis, ASCPX is still outperforming its peer group. (49th and 38th
percentiles, respectively).
THE FUND POSTED A 95TH PERCENTILE, 1-YEAR RANKING IN THE MORNINGSTAR SHORT
GOVERNMENT CATEGORY WITH A 3.31% TOTAL RETURN FOR THE TWELVE MONTHS ENDED
OCTOBER 31, 2007.
AMF U.S. GOVERNMENT MORTGAGE FUND
During the year, the U.S. Government Mortgage's portfolio underwent similar
changes as ASCPX, for the reasons stated in that Fund's write-up. However, due
to the 80% agency mortgage allocation prospectus requirements, the duration
allocation adjustments were executed within the agency CMO space, as opposed to
the private-label mortgage market. One-month LIBOR floaters were added, giving
the portfolio a 10% exposure to this sector. The fixed rate CMO allocation was
reduced by 11%, partially to fund the LIBOR floater purchases. The component
bonds were changed in favor of slightly longer duration CMOs to offset the
shorter duration floaters and maintain overall portfolio duration of
approximately 3.5 years.
The fund liquidated some AA hybrid ARM securities to raise cash in
anticipation of tougher conditions in the mortgage market. As mentioned earlier,
those conditions began to negatively affect primary issuance and secondary
market trading during the last two quarters of 2007. As spreads continue to
widen across myriad sectors of U.S. MBS, more attractive risk/reward
opportunities may precipitate re-allocation of the fund's cash holdings.
THE FUND POSTED A 48TH PERCENTILE, 1-YEAR RANKING IN THE MORNINGSTAR
INTERMEDIATE GOVERNMENT CATEGORY WITH A 4.69% TOTAL RETURN FOR THE TWELVE MONTHS
ENDED OCTOBER 31, 2007.
AMF LARGE CAP EQUITY FUND REVIEW
October 31, 2007
The Large Cap Equity portfolio is a new addition to the AMF family of funds
this year. The predecessor Fund's inception dates back to 1953 with an annual
reporting period ending on December 31st. As a result of its merger into the
Asset Management Fund its year-end date is now October 31st. The discussion that
follows covers the interim period of December 31, 2006 to October 31, 2007.
During the 10-month period ending October 31, 2007, the AMF Large Cap Equity
Fund produced a total return of 5.11%. Total return figures for the benchmark
indices were 11.00% for the Lipper Large Capitalization Core Funds Average and
10.86% for the S&P 500 Index for the same period. Total return assumes the
reinvestment of all dividends and capital gains and the deduction of all
applicable fees and expenses.
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Portfolio composition is subject to change.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. Investment return and
net asset value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than the original cost.
7
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ASSET MANAGEMENT FUND REVIEW
OCTOBER 31, 2007
The AMF Large Cap Equity Fund's investment philosophy focuses on investing in
high quality large capitalization stocks, due to their consistency of earnings
and dividends and their lower risk attributes. The Fund's management team
estimates each company's intrinsic value and seeks to purchase shares when they
are available at a favorable discount to the market price. A stock investor's
return is ultimately determined by the fundamental growth in a company's
intrinsic value per share coupled with the change in the discount or premium
associated with that value. Over the very long-term, business fundamentals have
the largest impact on investment performance, however, over the short-term,
investor sentiment tends to determine stock prices.
During the 10-months ended October 31st, the stock markets' performance was a
reflection of strong global economic growth and its influence on rising energy
and commodity prices. The best performing sectors within the S&P 500 were energy
with a gain of 28.5% followed by materials (+25.3%) and information technology
(+23.9%). Areas of the market that were most negatively affected during the
period included those in the cross hairs of the credit crisis, i.e. the
financials (-8.7%), as well as those areas most susceptible to the rising
possibility of an economic slowdown, specifically consumer discretionary
(-4.3%).
In light of the Fund's focus on investing in high quality companies with
sustainable earnings and dividend growth prospects, our exposure to the more
cyclical sectors of the market is very limited. Consequently, our performance
during the period reflects this. However, in our opinion, the intrinsic values
of our portfolio companies collectively grew at a favorable rate and these
values, relative to the prices listed on the stock markets, remain attractive.
As has been our practice, portfolio turnover is quite low, approximately
15-20% per year. This translates into an average holding period of 5 years or
more. In keeping with our low turnover approach, we added four new companies to
the portfolio during the period while eliminating three. The new additions
included IBM, Staples, UnitedHealth Group and Wells Fargo. All of these
companies meet our criteria for quality, sustainable growth and valuation. Two
of the companies they replaced were eliminated primarily due to deteriorating
fundamentals, including Merrill Lynch and Pfizer. Lastly, William Wrigley Jr.
was removed from the portfolio after its stock price rose significantly and
exceeded our estimate of intrinsic value.
As the economy increasingly shows signs of a slowdown resulting from a
difficult credit environment, weakening consumer sentiment and rising energy and
commodity prices, we believe investors will gravitate toward higher quality
companies as these businesses have historically shown resilience during
difficult economic periods. We remain confident that our investment philosophy
of owning high quality large capitalization companies at favorable valuations
will continue to be prudent over the long-term.
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Portfolio composition is subject to change.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. Investment return and
net asset value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than the original cost.
8
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INVESTMENT
COMPARISON
Comparison of change in
value of
a hypothetical $10,000
investment for the years
ended October 31
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ULTRA SHORT MORTGAGE FUND
[GRAPH]
<Table>
<Caption>
LEHMAN 6 MONTH T-BILL
ULTRA SHORT MORTGAGE FUND BELLWETHERS INDEX
------------------------- ---------------------
1997 10000 10000
1998 10500 10586
1999 10997 11081
2000 11726 11755
2001 12544 12477
2002 12936 12758
2003 13139 12935
2004 13375 13094
2005 13619 13437
2006 14231 14064
2007 14896 14842
</Table>
GROSS EXPENSE RATIO
0.76%
The above expense ratio is from the
Fund's prospectus dated March 1,
2007. Additional information
pertaining to the Fund's expense
ratio as of October 31, 2007 can be
found in the Financial Highlights.
-------------------------------------
Ultra Short Mortgage Fund
<Table>
One Five Ten
Year Year Year
------------------------------
4.67 2.86 4.07
</Table>
- --------------------------------------------------------------------------------
ULTRA SHORT FUND
[GRAPH]
<Table>
<Caption>
ULTRA SHORT FUND 6 MONTH T-BILL BELLWETHERS
---------------- --------------------------
2001 10000 10000
2002 10229 10214
2003 10420 10356
2004 10607 10484
2005 10834 10758
2006 11363 11260
2007 11825 11883
</Table>
GROSS EXPENSE RATIO
0.78%
The above expense ratio is from the
Fund's prospectus dated March 1,
2007. Additional information
pertaining to the Fund's expense
ratios as of October 31, 2007 can be
found in the Financial Highlights.
-------------------------------------
Ultra Short Fund
<Table>
One Five Since
Year Year Inception
------------------------------
4.07 2.94 2.85
</Table>
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PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. PERFORMANCE FIGURES IN
THE TABLE AND GRAPH DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER
WOULD PAY ON THE FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. The Lehman
6 Mo. T-Bill Bellwethers Index is an unmanaged index comprised of U.S.
Government Treasury Bonds with an average maturity of six months. The Lehman
index represents unmanaged groups of bonds that differ from the composition of
each AMF Fund. The Lehman index does not include a reduction in return for
expenses. Investors cannot invest directly in an index, although they can invest
in its underlying securities.
9
- -------------------------
INVESTMENT
COMPARISON
Comparison of change in
value of
a hypothetical $10,000
investment for the years
ended October 31
- --------------------------------------------------------------------------------
SHORT U.S. GOVERNMENT FUND
[GRAPH]
<Table>
<Caption>
LEHMAN 6 MONTH T-BILL
ULTRA SHORT MORTGAGE FUND BELLWETHERS INDEX
------------------------- ---------------------
1997 10000 10000
1998 10708 10765
1999 10977 11085
2000 11610 11765
2001 12731 13079
2002 13238 13742
2003 13493 14034
2004 13778 14305
2005 13961 14408
2006 14592 15025
2007 15312 15886
</Table>
GROSS EXPENSE RATIO
0.51%
The above expense ratio is from the
Fund's prospectus dated March 1,
2007. Additional information
pertaining to the Fund's expense
ratio as of October 31, 2007 can be
found in the Financial Highlights.
-------------------------------------
Short U.S. Government Fund
<Table>
One Five Ten
Year Year Year
------------------------------
4.93 2.95 4.35
</Table>
- --------------------------------------------------------------------------------
INTERMEDIATE MORTGAGE FUND
[GRAPH]
<Table>
<Caption>
INTERMEDIATE MORTGAGE LEHMAN 1-5 YEAR
FUND LEHMAN MORTGAGE INDEX GOVERNMENT INDEX
--------------------- --------------------- ----------------
1997 10000 10000 10000
1998 10719 10729 10853
1999 10968 11051 11075
2000 11677 11888 11778
2001 13031 13443 13240
2002 13570 14291 14031
2003 13761 14683 14353
2004 14148 15501 14727
2005 14300 15772 14766
2006 15000 16668 15408
2007 15497 17616 16322
</Table>
GROSS EXPENSE RATIO
0.58%
The above expense ratio is from the
Fund's prospectus dated March 1,
2007. Additional information
pertaining to the Fund's expense
ratios as of October 31, 2007 can be
found in the Financial Highlights.
-------------------------------------
Intermediate Mortgage Fund
<Table>
One Five Ten
Year Year Year
------------------------------
3.31 2.69 4.48
</Table>
- --------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. PERFORMANCE FIGURES IN
THE TABLE AND GRAPH DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER
WOULD PAY ON THE FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. The Lehman
1-3 Year Government Index is an unmanaged index generally representative of
government securities with maturities of one to three years. The Lehman Fixed
Rate Mortgage Backed Securities Index is a broad-based unmanaged index that
represents the general performance of fixed rate mortgage bonds. The Lehman 1-5
Year Government Index is an unmanaged index generally representative of
government securities with maturities of one to five years. Lehman indices do
not include a reduction in return for expenses. Investors cannot invest directly
in an index, although they can invest in its underlying securities.
10
- -------------------------
INVESTMENT
COMPARISON
Comparison of change in
value of
a hypothetical $10,000
investment for the years
ended October 31
- --------------------------------------------------------------------------------
US GOVERNMENT MORTGAGE FUND
[GRAPH]
<Table>
<Caption>
U.S. GOV'T MORTGAGE LEHMAN MORTGAGE INDEX
------------------- ---------------------
1997 10000 10000
1998 10758 10729
1999 10933 11051
2000 11687 11888
2001 13089 13443
2002 13683 14291
2003 13962 14683
2004 14593 15501
2005 14728 15772
2006 15470 16668
2007 16195 17616
</Table>
GROSS EXPENSE RATIO
0.48%
The above expense ratio is from the
Fund's prospectus dated March 1,
2007. Additional information
pertaining to the Fund's expense
ratios as of October 31, 2007 can be
found in the Financial Highlights.
-------------------------------------
US Government Mortgage Fund
<Table>
One Five Ten
Year Year Year
------------------------------
4.69 3.43 4.94
</Table>
- --------------------------------------------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. PERFORMANCE FIGURES IN
THE TABLE AND GRAPH DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER
WOULD PAY ON THE FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. The Lehman
Fixed Rate Mortgage Backed Securities Index is a broad-based unmanaged index
that represents the general performance of fixed rate mortgage bonds. The Lehman
index represents unmanaged groups of bonds that differ from the composition of
each AMF Fund. The Lehman index does not include a reduction in return for
expenses. Investors cannot invest directly in an index, although they can invest
in its underlying securities.
11
- -------------------------
INVESTMENT
COMPARISON
Comparison of change in
value of
a hypothetical $10,000
investment for the years
ended October 31
- --------------------------------------------------------------------------------
LARGE CAP EQUITY FUND
PERFORMANCE SUMMARY
The following graph shows that an investment of $10,000 in the Fund on October
31, 1996 would have been worth $18,018 on October 31, 2007, assuming all
dividends and distributions had been reinvested. A similar investment in the S&P
500, over the same period, would have grown to $19,857. A similar investment in
the Lipper Large Capitalization Core Funds Average, over the same period, would
have grown to $18,464.
LARGE CAP EQUITY
INSTITUTIONAL FUND, INC.
CUMULATIVE TOTAL RETURN
[GRAPH]
<Table>
<Caption>
FUND S&P LIPPER
---- --- ------
1997 10000 10000 10000
1998 12704 12201 11439
1999 14284 15332 13961
2000 14942 16264 15243
2001 13717 12216 11770
2002 12844 10372 10081
2003 13943 12528 11934
2004 14695 13707 12854
2005 14923 14902 14011
2006 16736 17335 16055
2007 18018 19857 18464
</Table>
THE FOREGOING INFORMATION IS A STATEMENT OF THE PAST PERFORMANCE OF THE FUND.
PAST PERFORMANCE DOES NOT GUARANTEE AND DOES NOT PREDICT FUTURE RESULTS. THE
INVESTMENT RETURN AND NET ASSET VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE WITH CHANGING MARKET CONDITIONS SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. TO OBTAIN CURRENT
MONTH-END PERFORMANCE INFORMATION, PLEASE CALL 1-800-527-3713.
GROSS EXPENSE RATIO
1.10%
The above expense ratio is from the Fund's prospectus dated March 1, 2007.
Additional information pertaining to the Fund's expense ratios as of October 31,
2007 can be found in the Financial Highlights.
- -------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
PERIODS ENDING OCTOBER 31, 2007*
<Table>
1 Year 5 Year 10 Years
--------------------------
Large Cap Equity Fund ........ 7.66% 7.00% 6.06%
Lipper Large Capitalization
Core Funds Average(1)....... 14.71% 12.67% 6.12%
Dow Jones Industrial Average
(DJIA)(2)................... 17.86% 13.20% 8.63%
Standard & Poor's 500
Composite Stock Price Index
(S&P 500)(3)................ 14.55% 13.87% 7.10%
</Table>
- ---------------
* Assumes reinvestment of all dividends and distributions and the deduction of
all applicable fees and expenses. Average annual returns are stated for
periods greater than one year. Data for the S&P 500, DJIA and Lipper Large
Capitalization Core Funds Average are from Lipper, Inc. The S&P 500 and DJIA
do not include a reduction in total return for expenses.
The investment performance information presented does not reflect the deduction
of any taxes that a shareholder would pay on Fund distributions or the
redemption of Fund shares.
- --------------------------------------------------------------------------------
(1) The Lipper Large Capitalization Core Funds Average consists of funds that,
by portfolio practice, invest at least 75% of their equity assets in
companies with market capitalizations (on a three-year weighted basis)
greater than 300% of the dollar-weighted median market capitalization of the
middle 1,000 securities of the S&P SuperComposite 1500 Index.
(2) The Dow Jones Industrial Average represents the average of 30 actively
traded blue chip stocks on the New York Stock Exchange (NYSE).
(3) The Standard & Poor's 500 Index is an unmanaged index, generally
representative of the U.S. stock market as a whole.
12
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
MONEY MARKET FUND
STATEMENT OF NET ASSETS
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
<Table>
<Caption>
PERCENTAGE
OF NET MATURITY PRINCIPAL
ASSETS DATE AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT.......................... 9.5%
Bank of America, N.A., 4.98% 1/3/08 $ 9,000,000 $ 9,000,000
Citibank, N.A.
4.93% 12/20/07 5,000,000 5,000,000
4.98% 1/2/08 4,000,000 4,000,000
------------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $18,000,000) 18,000,000
------------
REPURCHASE AGREEMENT............................. 90.6%
Citigroup Repo, 4.92%,
(Agreement dated 10/31/07 to be repurchased
at $172,064,512 on 11/1/07 Collateralized by
various U.S. Government Mortgage-Backed
Securities, 4.50%-6.25%, with a value of
$175,481,820, due 2/15/23-6/25/44) 172,041,000 172,041,000
------------
TOTAL REPURCHASE AGREEMENTS
(Cost $172,041,000) 172,041,000
------------
TOTAL INVESTMENTS................................ 100.1%
(Cost $190,041,000) 190,041,000
LIABILITIES IN EXCESS OF OTHER ASSETS............ (0.1%) (163,753)
------------
Net Assets applicable to 189,889,198 Shares of
Common Stock issued and outstanding............ 100.0% $189,877,247
============
Net Asset Value, Class I offering and redemption
price per share ($131,719,844 / 131,731,364) $1.00
============
Net Asset Value, Class D offering and redemption
price per share ($58,157,403 / 58,157,834) $1.00
============
</Table>
- --------------------------------------------------------------------------------
See notes to financial statements.
13
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
ULTRA SHORT MORTGAGE FUND
STATEMENT OF NET ASSETS
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
<Table>
<Caption>
PERCENTAGE
OF NET MATURITY PRINCIPAL
ASSETS DATE AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------
ADJUSTABLE RATE MORTGAGE-RELATED
SECURITIES*............................... 71.4%
1 Yr. Constant Maturity Treasury Based
ARMS................................... 6.5%
Bear Stearns Adjustable Rate Mortgage
Trust
7.47% 3/25/31 $ 3,226,792 $ 3,249,343
CS First Boston Mortgage Securities
Corp.
8.71% 11/25/31 1,322,140 1,348,489
7.31% 6/25/32 802,094 801,843
Fannie Mae
7.41% 7/1/28 6,572,161 6,855,585
7.00% 8/1/29 4,414,301 4,585,355
6.75% 3/1/30 2,618,923 2,716,314
7.18% 1/1/32 8,783,113 9,139,928
7.19% 5/1/33 3,746,347 3,889,176
7.19% 9/1/33 7,470,451 7,787,945
6.30% 5/25/42 12,792,694 12,896,634
Fannie Mae Grantor Trust
6.41% 5/25/42 7,369,277 7,422,244
Fannie Mae Whole Loan
6.66% 8/25/42 6,924,719 6,974,491
Fifth Third Mortgage Loan Trust
6.10% 11/19/32 7,137,395 7,133,607
Freddie Mac
6.83% 10/1/22 2,712,879 2,793,417
7.23% 8/1/24 2,605,921 2,698,757
7.16% 9/1/27 3,145,659 3,264,604
7.16% 12/1/27 2,998,583 3,111,967
7.20% 12/1/27 3,025,190 3,142,416
7.13% 9/1/28 21,088,871 21,899,474
7.09% 9/1/30 2,262,852 2,348,416
7.18% 7/1/31 13,502,274 14,017,048
WAMU Mortgage Pass-Through Certificates
6.33% 4/25/44 9,466,005 9,442,340
--------------
137,519,393
--------------
6 Mo. Certificate of Deposit Based ARMS... 0.4%
Fannie Mae
6.35% 6/1/21 2,963,186 2,968,636
6.83% 12/1/24 4,649,616 4,719,411
Freddie Mac
7.04% 1/1/26 1,435,195 1,458,629
--------------
9,146,676
--------------
</Table>
- --------------------------------------------------------------------------------
See notes to financial statements.
14
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
ULTRA SHORT MORTGAGE FUND (CONTINUED)
STATEMENT OF NET ASSETS
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
<Table>
<Caption>
PERCENTAGE
OF NET MATURITY PRINCIPAL
ASSETS DATE AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------
6 Mo. London Interbank Offering Rate
(LIBOR) Based ARMS..................... 5.7%
Bear Stearns Adjustable Rate Mortgage
Trust
8.05% 3/25/31 $ 819,008 $ 819,008
Fannie Mae
6.65% 9/1/27 8,050,014 8,150,857
6.61% 3/1/28 6,918,026 7,009,558
6.91% 6/1/28 1,316,314 1,342,702
6.55% 12/1/32 941,113 949,270
6.61% 9/1/33 2,741,937 2,768,953
6.55% 11/1/33 5,036,369 5,086,430
6.58% 11/1/33 3,931,208 3,974,770
Freddie Mac
7.51% 9/1/30 6,465,561 6,627,071
Mastr Adjustable Rate Mortgages Trust
6.89% 1/25/34 1,873,574 1,878,258
MLCC Mortgage Investors, Inc.
7.01% 10/25/28 14,190,247 14,341,018
Structured Asset Mortgage Investments,
Inc.
6.94% 7/19/32 4,758,800 4,812,336
7.17% 11/19/33 6,114,314 6,194,564
7.12% 12/19/33 11,355,078 11,486,371
Structured Asset Securities Corp.
6.85% 5/25/32 2,910,978 2,914,617
7.69% 11/25/32 4,355,022 4,393,128
7.75% 12/25/32 6,353,226 6,468,378
7.87% 2/25/33 6,408,507 6,510,643
7.70% 3/25/33 4,470,470 4,551,497
7.84% 5/25/33 12,609,554 12,881,448
7.68% 9/25/33 9,082,712 9,238,821
--------------
122,399,698
--------------
Cost of Funds Index Based ARMS............ 5.2%
Fannie Mae
5.54% 11/1/32 10,064,713 10,077,294
5.53% 8/1/33 19,598,368 19,622,866
5.53% 5/1/35 41,627,116 41,679,150
5.53% 11/1/36 22,804,714 22,833,220
5.53% 6/1/38 15,493,684 15,513,050
--------------
109,725,580
--------------
HYBRID ARMS............................... 12.3%
Banc of America Funding Corp.
4.11% 5/25/35 15,137,745 14,667,968
</Table>
- --------------------------------------------------------------------------------
See notes to financial statements.
15
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
ULTRA SHORT MORTGAGE FUND (CONTINUED)
STATEMENT OF NET ASSETS
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
<Table>
<Caption>
PERCENTAGE
OF NET MATURITY PRINCIPAL
ASSETS DATE AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------
Banc of America Mortgage Securities
3.89% 7/25/33 $ 6,416,752 $ 6,315,612
Bear Stearns Adjustable Rate Mortgage
Trust
5.21% 8/25/35 13,617,987 13,408,288
Chase Mortgage Finance Corp.
5.41% 1/25/36 10,960,074 10,848,376
Countrywide Home Loans
4.13% 11/19/33 5,350,786 5,220,900
6.00% 5/20/36 4,567,929 4,396,632
First Horizon Alternative Mortgage
Securities
5.32% 6/25/35 9,624,423 9,439,736
First Horizon Mortgage Pass-Through
Trust
5.14% 12/25/34 3,964,442 3,914,697
GSR Mortgage Loan Trust
4.56% 9/25/35 22,023,123 21,412,608
5.20% 10/25/35 15,829,828 15,357,390
JP Morgan Mortgage Trust
4.82% 7/25/35 10,437,029 10,030,108
5.23% 9/25/35 5,464,281 5,446,162
Mastr Adjustable Rate Mortgages Trust
7.29% 10/25/32 1,833,648 1,848,766
Merrill Lynch Mortgage Investors Trust
4.88% 2/25/34 8,275,302 8,154,751
Morgan Stanley Mortgage Loan Trust
4.89% 2/25/34 7,907,862 7,694,779
5.20% 9/25/34 4,601,959 4,506,171
5.47% 6/25/36 11,463,921 11,304,182
Provident Funding Mortgage Loan Trust
4.10% 4/25/34 4,261,776 4,179,533
Residential Accredit Loans, Inc.
5.27% 4/25/35 8,215,235 8,064,962
Structured Adjustable Rate Mortgage
Loan Trust
4.82% 5/25/34 11,967,504 11,707,742
6.11% 5/25/36 8,935,708 8,704,282
WAMU Mortgage Pass-Through Certificates
4.38% 6/25/33 4,484,347 4,444,775
</Table>
- --------------------------------------------------------------------------------
See notes to financial statements.
16
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
ULTRA SHORT MORTGAGE FUND (CONTINUED)
STATEMENT OF NET ASSETS
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
<Table>
<Caption>
PERCENTAGE
OF NET MATURITY PRINCIPAL
ASSETS DATE AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage Backed Securities
Trust
3.54% 9/25/34 $ 9,504,964 $ 9,164,806
4.56% 11/25/34 14,707,915 14,374,924
3.99% 12/25/34 18,995,049 18,501,549
5.11% 3/25/36 19,938,665 19,352,743
5.64% 5/25/36 9,974,960 9,789,833
--------------
262,252,275
--------------
MONTHLY London Interbank Offering Rate
(LIBOR) Collateralized Mortgage
Obligations............................... 41.3%
Adjustable Rate Mortgage Trust
5.07% 3/25/37 21,491,114 21,054,576
Banc of America Funding Corp.
5.29% 2/20/47 10,781,000 10,144,247
Fannie Mae
5.44% 9/18/31 5,289,109 5,311,991
5.19% 8/25/35 27,477,467 27,265,028
5.17% 12/25/36 49,049,479 48,865,838
5.17% 12/25/36 32,192,742 32,067,992
5.12% 2/25/37 85,843,937 85,404,442
5.13% 2/25/37 88,428,895 88,031,929
5.13% 3/25/37 43,648,869 43,508,158
Freddie Mac
5.39% 11/15/36 39,508,444 39,357,912
Greenpoint Mortgage Funding Trust
5.18% 10/25/45 15,052,443 14,958,365
GSR Mortgage Loan Trust
5.22% 3/25/32 2,882,913 2,868,928
Indymac INDX Mortgage Loan Trust
5.17% 2/25/37 11,797,000 11,325,120
5.20% 2/25/37 4,857,000 4,668,791
5.22% 2/25/37 3,470,000 3,338,791
JP Morgan Alternative Loan Trust
5.09% 11/25/36 7,662,550 7,506,904
5.18% 11/25/36 15,968,000 15,419,100
Lehman XS Trust
5.03% 3/25/37 98,581,952 97,134,029
Merrill Lynch Mortgage Investors Trust
5.07% 7/25/36 11,054,017 10,981,475
</Table>
- --------------------------------------------------------------------------------
See notes to financial statements.
17
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
ULTRA SHORT MORTGAGE FUND (CONTINUED)
STATEMENT OF NET ASSETS
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
<Table>
<Caption>
PERCENTAGE
OF NET MATURITY PRINCIPAL
ASSETS DATE AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------
Morgan Stanley Mortgage Loan Trust
5.11% 8/25/36 $ 25,835,137 $ 25,189,259
5.11% 9/25/36 10,043,774 9,530,597
5.11% 10/25/36 11,897,718 11,334,432
5.12% 11/25/36 18,687,408 17,963,271
Nomura Asset Acceptance Corp.
5.22% 12/25/35 7,803,246 7,781,761
Residential Accredit Loans, Inc.
5.09% 7/25/36 21,065,768 20,644,452
Structured Adjustable Rate Mortgage
Loan Trust
5.08% 2/25/37 13,617,482 13,243,001
Thornburg Mortgage Securities Trust
5.00% 7/25/36 73,092,385 73,092,385
5.05% 8/25/36 55,606,956 55,433,184
Wells Fargo Mortgage Backed Securities
Trust
5.37% 6/25/37 41,070,040 40,762,015
5.37% 6/25/37 37,229,092 36,949,874
--------------
881,137,847
--------------
TOTAL ADJUSTABLE RATE MORTGAGE-RELATED
SECURITIES (Cost $1,527,380,225) 1,522,181,469
--------------
FIXED RATE MORTGAGE-RELATED SECURITIES...... 19.0%
Collateralized Mortgage Obligations....... 19.0%
Fannie Mae
4.35% 3/25/34 33,423,921 32,838,824
4.50% 3/25/35 20,203,755 19,379,798
4.35% 9/25/36 58,611,673 57,415,080
4.25% 2/25/37 65,685,278 62,332,050
4.25% 4/25/37 46,564,865 44,581,062
4.25% 5/25/37 63,723,058 60,606,671
Freddie Mac
4.25% 12/15/36 65,139,504 61,984,228
Prime Mortgage Trust
5.25% 1/25/34 10,312,855 10,240,077
Residential Accredit Loans, Inc.
6.00% 12/25/35 15,228,431 15,261,795
6.00% 5/25/36 24,554,160 24,530,861
</Table>
- --------------------------------------------------------------------------------
See notes to financial statements.
18
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
ULTRA SHORT MORTGAGE FUND (CONTINUED)
STATEMENT OF NET ASSETS
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
<Table>
<Caption>
PERCENTAGE
OF NET MATURITY PRINCIPAL
ASSETS DATE AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------
Residential Asset Securitization Trust
5.50% 9/25/35 $ 16,167,342 $ 16,127,676
--------------
TOTAL FIXED RATE MORTGAGE-RELATED SECURITIES
(Cost $408,860,958) 405,298,122
--------------
REPURCHASE AGREEMENTS....................... 9.5%
Bear Stearns Repo, 4.94%*, (Agreement
dated 10/31/07 to be repurchased at
$90,036,800 on 11/1/07. Collateralized
by an Adjustable Rate U.S. Government
Mortgage-Backed Security, 5.17%, with a
value of $92,784,397, due 3/25/37) 90,000,000 90,000,000
Citigroup Repo, 4.92%, (Agreement dated
10/31/07 to be repurchased at
$111,336,214 on 11/1/07. Collateralized
by various U.S. Government Mortgage-
Backed Securities, 4.50%-6.00%, with a
value of $113,547,420, due 4/15/28-
6/25/34) 111,321,000 111,321,000
--------------
TOTAL REPURCHASE AGREEMENTS (Cost
$201,321,000) 201,321,000
--------------
TOTAL INVESTMENTS
(Cost $2,137,562,183)..................... 99.9% 2,128,800,591
OTHER ASSETS IN EXCESS OF LIABILITIES....... 0.1% 3,088,526
--------------
Net Assets applicable to 221,664,648 Shares
of Common Stock issued and outstanding.... 100.0% $2,131,889,117
==============
Net Asset Value, offering and redemption
price per share
($2,131,889,117 / 221,664,648) $9.62
==============
</Table>
- --------------------------------------------------------------------------------
* The rates presented are the rates in effect at October 31, 2007.
See notes to financial statements.
19
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
ULTRA SHORT FUND
STATEMENT OF NET ASSETS
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
<Table>
<Caption>
PERCENTAGE
OF NET MATURITY PRINCIPAL
ASSETS DATE AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------
ADJUSTABLE RATE MORTGAGE-RELATED SECURITIES*... 76.6%
1 Yr. Constant Maturity Treasury Based ARMS.. 18.6%
Fannie Mae
7.15% 10/1/28 $ 1,060,587 $ 1,104,999
7.47% 12/1/30 2,505,593 2,620,694
7.18% 1/1/32 8,715,427 9,069,491
7.13% 7/1/33 3,559,562 3,704,169
7.13% 12/1/33 1,674,100 1,741,064
Freddie Mac
7.22% 11/1/28 823,764 855,427
7.74% 1/1/29 3,223,423 3,365,456
7.13% 7/1/30 2,979,240 3,098,409
7.21% 9/1/30 613,933 634,078
7.36% 8/1/31 6,091,680 6,356,287
Fund America Investors Corp. II
6.92% 6/25/23 2,314,521 2,308,734
WAMU Mortgage Pass-Through Certificates
6.33% 4/25/44 1,456,309 1,452,668
------------
36,311,476
------------
6 Mo. Certificate of Deposit Based ARMS...... 1.9%
Fannie Mae
6.33% 4/1/20 3,661,174 3,664,067
------------
6 Mo. London Interbank Offering Rate (LIBOR)
Based ARMS................................ 1.8%
Structured Adjustable Rate Mortgage Loan
Trust
7.26% 8/25/34 2,052,992 2,076,088
Structured Asset Securities Corp.
7.69% 11/25/32 694,205 700,279
7.70% 11/25/32 694,205 700,280
------------
3,476,647
------------
Cost of Funds Index Based ARMS............... 0.6%
Regal Trust IV
5.72% 9/29/31 720,344 720,344
</Table>
- --------------------------------------------------------------------------------
See notes to financial statements.
20
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
ULTRA SHORT FUND (CONTINUED)
STATEMENT OF NET ASSETS
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
<Table>
<Caption>
PERCENTAGE
OF NET MATURITY PRINCIPAL
ASSETS DATE AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------
Ryland Mortgage Securities Corp.
6.18% 10/25/23 $ 489,593 $ 489,593
------------
1,209,937
------------
HYBRID ARMS.................................. 24.9%
Adjustable Rate Mortgage Trust
4.90% 10/25/35 2,075,000 2,071,962
5.04% 3/25/36 1,597,458 1,592,969
Banc of America Funding Corp.
5.04% 5/20/35 5,908,525 5,796,726
4.61% 2/20/36 1,919,982 1,827,883
Bear Stearns Adjustable Rate Mortgage
Trust
4.81% 10/25/35 5,735,329 5,543,288
GSR Mortgage Loan Trust
5.22% 1/25/36 4,978,622 4,821,623
Morgan Stanley Mortgage Loan Trust
5.47% 6/25/36 3,959,973 3,831,151
Mortgageit Trust
4.75% 5/25/35 1,611,032 1,574,234
4.75% 5/25/35 1,006,016 978,353
Sequoia Mortgage Trust
4.08% 4/20/35 1,740,000 1,693,497
Structured Adjustable Rate Mortgage Loan
Trust
5.48% 4/25/35 3,981,290 3,946,295
5.76% 10/25/35 6,372,253 6,328,348
WAMU Mortgage Pass-Through Certificates
4.83% 2/25/33 1,341,904 1,329,832
Wells Fargo Mortgage Backed Securities
Trust
4.11% 6/25/35 7,502,694 7,224,260
------------
48,560,421
------------
</Table>
- --------------------------------------------------------------------------------
See notes to financial statements.
21
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
ULTRA SHORT FUND (CONTINUED)
STATEMENT OF NET ASSETS
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
<Table>
<Caption>
PERCENTAGE
OF NET MATURITY PRINCIPAL
ASSETS DATE AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------
MONTHLY London Interbank Offering Rate
(LIBOR) Collateralized Mortgage
Obligations............................... 28.8%
Adjustable Rate Mortgage Trust
5.14% 11/25/35 $ 3,839,014 $ 3,827,017
American Home Mortgage Investment Trust
5.02% 9/25/35 2,250,179 2,248,630
Bear Stearns Alt-A Trust
5.09% 8/25/36 7,137,899 6,923,762
Fannie Mae
5.12% 2/25/37 10,301,272 10,248,533
5.13% 3/25/37 7,657,696 7,633,010
Freddie Mac
5.35% 1/15/37 9,253,161 9,206,601
Merrill Lynch Alternative Note Asset
5.14% 1/25/37 2,841,000 2,297,659
Morgan Stanley Mortgage Loan Trust
4.96% 6/25/36 4,309,392 4,283,652
Sequoia Mortgage Trust
5.31% 9/20/33 2,717,134 2,717,983
Structured Asset Mortgage Investments,
Inc.
6.22% 2/19/35 2,276,890 2,276,890
Structured Asset Securities Corp.
6.12% 3/25/33 1,054,770 1,060,374
6.22% 5/25/33 1,823,021 1,833,276
6.07% 11/25/33 1,663,848 1,672,687
------------
56,230,074
------------
TOTAL ADJUSTABLE RATE MORTGAGE-RELATED
SECURITIES
(Cost $150,049,774) 149,452,622
------------
</Table>
- --------------------------------------------------------------------------------
See notes to financial statements.
22
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
ULTRA SHORT FUND (CONTINUED)
STATEMENT OF NET ASSETS
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
<Table>
<Caption>
PERCENTAGE
OF NET MATURITY PRINCIPAL
ASSETS DATE AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------
FIXED RATE MORTGAGE-RELATED SECURITIES......... 13.1%
Collateralized Mortgage Obligations.......... 13.1%
Fannie Mae
4.35% 9/25/36 $12,559,644 $ 12,303,231
4.25% 4/25/37 8,831,146 8,454,913
Freddie Mac
3.03% 6/15/17 5,020,126 4,736,212
------------
TOTAL FIXED RATE MORTGAGE-RELATED SECURITIES
(Cost $25,503,730) 25,494,356
------------
REPURCHASE AGREEMENT........................... 10.3%
Citigroup Repo, 4.92%, (Agreement dated
10/31/07 to be repurchased at $20,215,762
on 11/1/07. Collateralized by an
Adjustable Rate U.S. Government
Mortgage-Backed Security, 5.30%, with a
value of $20,617,260, due 7/20/37)........ 20,213,000 20,213,000
------------
TOTAL REPURCHASE AGREEMENTS
(Cost $20,213,000) 20,213,000
------------
TOTAL INVESTMENTS
(Cost $195,766,504).......................... 100.0% 195,159,978
OTHER ASSETS IN EXCESS OF LIABILITIES.......... 0.0% 740
------------
Net Assets applicable to 20,298,363 Shares of
Common Stock issued and outstanding.......... 100.0% $195,160,718
============
Net Asset Value, offering and redemption price
per share ($195,160,718 / 20,298,363) $9.61
============
</Table>
- --------------------------------------------------------------------------------
* The rates presented are the rates in effect at October 31, 2007.
See notes to financial statements.
23
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
SHORT U.S. GOVERNMENT FUND
STATEMENT OF NET ASSETS
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
<Table>
<Caption>
PERCENTAGE
OF NET MATURITY PRINCIPAL
ASSETS DATE AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------
ADJUSTABLE RATE MORTGAGE-RELATED SECURITIES*... 46.7%
1 Yr. Constant Maturity Treasury Based ARMS.. 18.5%
Fannie Mae
7.19% 5/1/26 $ 2,492,904 $ 2,591,062
7.40% 5/1/31 2,388,911 2,492,679
7.18% 1/1/32 9,683,807 10,077,212
Freddie Mac
7.34% 5/1/18 524,064 542,243
7.22% 3/1/27 1,513,713 1,572,370
7.36% 8/1/31 7,014,485 7,319,176
------------
24,594,742
------------
HYBRID ARMS.................................. 10.8%
Adjustable Rate Mortgage Trust
4.95% 10/25/35 2,018,837 2,013,209
Banc of America Funding Corp.
5.04% 5/20/35 3,939,017 3,864,484
Bear Stearns Adjustable Rate Mortgage
Trust
4.81% 10/25/35 2,602,361 2,538,185
Indymac INDX Mortgage Loan Trust
5.43% 7/25/35 4,171,584 4,092,985
5.42% 9/25/35 1,785,466 1,779,747
------------
14,288,610
------------
MONTHLY London Interbank Offering Rate
(LIBOR) Collateralized Mortgage
Obligations............................... 17.4%
Fannie Mae
5.12% 2/25/37 10,301,272 10,248,533
5.13% 3/25/37 5,743,272 5,724,758
Freddie Mac
5.35% 1/15/37 7,124,934 7,089,083
------------
23,062,374
------------
TOTAL ADJUSTABLE RATE MORTGAGE-RELATED
SECURITIES
(Cost $62,026,878) 61,945,726
------------
</Table>
- --------------------------------------------------------------------------------
See notes to financial statements.
24
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
SHORT U.S. GOVERNMENT FUND (CONTINUED)
STATEMENT OF NET ASSETS
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
<Table>
<Caption>
PERCENTAGE
OF NET MATURITY PRINCIPAL
ASSETS DATE AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------
FIXED RATE MORTGAGE-RELATED SECURITIES......... 26.8%
15 Yr. Securities............................ 0.2%
Freddie Mac
8.00% 12/17/15 $ 260,629 $ 264,750
------------
Collateralized Mortgage Obligations.......... 26.6%
Fannie Mae
4.35% 3/25/34 4,341,956 4,265,949
4.35% 9/25/36 12,559,644 12,303,231
4.25% 4/25/37 4,415,573 4,227,456
Freddie Mac
3.03% 6/15/17 10,953,003 10,333,554
4.25% 12/15/36 4,388,331 4,175,766
------------
35,305,956
------------
TOTAL FIXED RATE MORTGAGE-RELATED SECURITIES
(Cost $35,746,726) 35,570,706
------------
U.S. TREASURY OBLIGATIONS...................... 6.1%
U.S. Treasury Notes
4.88% 5/15/09 3,000,000 3,040,547
4.75% 5/15/14 3,000,000 3,085,078
4.25% 11/15/14 2,000,000 1,993,594
------------
TOTAL U.S. TREASURY OBLIGATIONS (Cost
$8,112,281) 8,119,219
------------
</Table>
- --------------------------------------------------------------------------------
See notes to financial statements.
25
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
SHORT U.S. GOVERNMENT FUND (CONTINUED)
STATEMENT OF NET ASSETS
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
<Table>
<Caption>
PERCENTAGE
OF NET MATURITY PRINCIPAL
ASSETS DATE AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT........................... 20.0%
Citigroup Repo, 4.92%, (Agreement dated
10/31/07 to be repurchased at $26,566,630
on 11/1/07. Collateralized by various U.S.
Government Mortgage-Backed Securities,
5.30%-5.50%, with a value of $27,094,261,
due 2/15/33-7/20/37) $26,563,000 $ 26,563,000
------------
TOTAL REPURCHASE AGREEMENTS
(Cost $26,563,000)........................... 26,563,000
------------
TOTAL INVESTMENTS
(Cost $132,448,885).......................... 99.6% 132,198,651
OTHER ASSETS IN EXCESS OF
LIABILITIES.................................. 0.4% 528,015
------------
Net Assets applicable to 12,822,122 Shares of
Common Stock issued and outstanding.......... 100.0% $132,726,666
============
Net Asset Value, offering and redemption price
per share ($132,726,666 / 12,822,122) $10.35
============
</Table>
- --------------------------------------------------------------------------------
* The rates presented are the rates in effect at October 31, 2007.
See notes to financial statements.
26
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
INTERMEDIATE MORTGAGE FUND
STATEMENT OF NET ASSETS
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
<Table>
<Caption>
PERCENTAGE
OF NET MATURITY PRINCIPAL
ASSETS DATE AMOUNT VALUE
- -----------------------------------------------------------------------------------------------------
ADJUSTABLE RATE MORTGAGE-RELATED SECURITIES*..... 51.5%
1 Yr. Constant Maturity Treasury Based ARMS.... 3.7%
Countrywide Home Loans
7.42% 1/20/35 $ 3,373,741 $ 3,432,781
Lehman XS Trust
5.93% 11/25/35 5,200,550 5,131,481
------------
8,564,262
------------
HYBRID ARMS.................................... 35.8%
Adjustable Rate Mortgage Trust
5.25% 10/25/35 8,863,698 8,709,075
Banc of America Mortgage Securities
4.33% 3/25/33 1,773,680 1,764,406
7.25% 4/25/33 81,154 81,694
Bear Stearns Adjustable Rate Mortgage Trust
4.81% 10/25/35 12,231,792 11,895,667
Countrywide Alternative Loan Trust
5.17% 12/25/34 6,984,880 6,825,310
Countrywide Home Loans
4.92% 12/25/33 3,606,704 3,540,112
5.38% 11/25/35 7,116,033 6,871,534
CS First Boston Mortgage Securities Corp.
4.99% 6/25/33 720,241 711,887
First Horizon Alternative Mortgage
Securities
5.44% 7/25/35 11,246,834 11,022,891
GSR Mortgage Loan Trust
5.22% 1/25/36 4,978,622 4,821,623
JP Morgan Mortgage Trust
4.97% 8/25/35 3,965,257 3,864,624
Structured Adjustable Rate Mortgage Loan
Trust
4.59% 4/25/34 8,136,201 7,994,497
5.54% 6/25/36 10,000,000 9,963,229
Wells Fargo Mortgage Backed Securities Trust
6.15% 12/25/36 4,397,079 4,265,166
------------
82,331,715
------------
MONTHLY London Interbank Offering Rate (LIBOR)
Collateralized Mortgage Obligations............ 12.0%
American Home Mortgage Investment Trust
5.02% 9/25/35 2,103,879 2,102,431
Banc of America Funding Corp.
5.31% 2/20/47 4,312,000 3,886,190
5.34% 2/20/47 3,594,000 3,258,186
</Table>
- --------------------------------------------------------------------------------
See notes to financial statements.
27
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
INTERMEDIATE MORTGAGE FUND (CONTINUED)
STATEMENT OF NET ASSETS
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
<Table>
<Caption>
PERCENTAGE
OF NET MATURITY PRINCIPAL
ASSETS DATE AMOUNT VALUE
- -----------------------------------------------------------------------------------------------------
Fannie Mae
5.13% 3/25/37 $ 3,828,848 $ 3,816,505
Impac CMB Trust
5.89% 6/25/33 3,827,050 3,775,010
Merrill Lynch Alternative Note Asset
5.20% 1/25/37 3,247,500 2,801,984
Structured Adjustable Rate Mortgage Loan
Trust
5.16% 2/25/37 2,415,000 2,150,859
5.19% 2/25/37 3,105,000 2,714,934
5.23% 2/25/37 3,450,000 3,028,453
------------
27,534,552
------------
TOTAL ADJUSTABLE RATE MORTGAGE-RELATED SECURITIES
(Cost $121,762,989) 118,430,529
------------
FIXED RATE MORTGAGE-RELATED SECURITIES........... 47.2%
15 Yr. Securities.............................. 3.5%
Fannie Mae
7.00% 3/1/15 714,322 743,940
7.00% 3/1/15 405,144 421,508
7.00% 3/1/15 385,541 400,686
7.50% 11/1/15 543,280 572,153
6.50% 1/1/16 551,690 564,985
6.00% 6/1/16 1,407,985 1,439,093
6.00% 7/1/17 1,479,962 1,510,024
6.00% 7/1/17 706,185 720,529
Freddie Mac
7.50% 1/1/10 193,168 196,601
6.00% 6/1/17 1,507,182 1,536,972
------------
8,106,491
------------
Collateralized Mortgage Obligations............ 43.7%
Countrywide Alternative Loan Trust
5.50% 12/25/35 7,741,382 7,710,581
Countrywide Home Loans
5.75% 2/25/37 10,000,000 9,566,446
5.75% 2/25/37 10,000,000 9,566,446
5.75% 5/25/37 10,000,000 9,654,207
Credit Suisse Mortgage Capital Certificates
6.00% 5/25/36 10,000,000 9,983,183
6.00% 2/25/37 5,845,000 5,685,327
6.00% 2/25/37 1,095,000 1,065,087
</Table>
- --------------------------------------------------------------------------------
See notes to financial statements.
28
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
INTERMEDIATE MORTGAGE FUND (CONTINUED)
STATEMENT OF NET ASSETS
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
<Table>
<Caption>
PERCENTAGE
OF NET MATURITY PRINCIPAL
ASSETS DATE AMOUNT VALUE
- -----------------------------------------------------------------------------------------------------
Fannie Mae
4.00% 10/25/32 $ 5,790,179 $ 5,497,668
5.00% 9/25/35 3,517,694 3,494,235
4.25% 4/25/37 4,415,573 4,227,456
First Horizon Alternative Mortgage
Securities
6.00% 7/25/36 4,781,278 4,800,231
6.00% 7/25/36 3,798,528 3,737,915
First Horizon Mortgage Pass-Through Trust
5.75% 5/25/36 10,000,000 10,038,330
Freddie Mac
5.00% 2/15/30 8,933,000 8,740,133
Residential Funding Mortgage Securities I
6.00% 1/25/37 6,900,000 6,694,706
------------
100,461,951
------------
TOTAL FIXED RATE MORTGAGE-RELATED SECURITIES
(Cost $109,910,520) 108,568,442
------------
REPURCHASE AGREEMENT............................. 1.3%
Citigroup Repo, 4.92%, (Agreement dated
10/31/07 to be repurchased at $3,002,410 on
11/1/07. Collateralized by an Adjustable
Rate U.S. Government Mortgage-Backed
Security, 5.54%, with a value of $3,062,040,
due 6/15/36) 3,002,000 3,002,000
------------
TOTAL REPURCHASE AGREEMENTS
(Cost $3,002,000)........................... 3,002,000
------------
TOTAL INVESTMENTS
(Cost $234,675,509)......................... 100.0% 230,000,971
OTHER ASSETS IN EXCESS OF LIABILITIES............ 0.0% 75,335
------------
Net Assets applicable to 25,230,785 Shares of
Common Stock issued and outstanding............ 100.0% $230,076,306
============
Net Asset Value, offering and redemption price
per share ($230,076,306 / 25,230,785) $9.12
============
</Table>
- --------------------------------------------------------------------------------
* The rates presented are the rates in effect at October 31, 2007.
See notes to financial statements.
29
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
U.S. GOVERNMENT MORTGAGE FUND
STATEMENT OF NET ASSETS
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
<Table>
<Caption>
PERCENTAGE
OF NET MATURITY PRINCIPAL
ASSETS DATE AMOUNT VALUE
- -----------------------------------------------------------------------------------------------------
ADJUSTABLE RATE MORTGAGE-RELATED SECURITIES*..... 37.1%
HYBRID ARMS.................................... 26.8%
Banc of America Funding Corp.
4.61% 2/20/36 $ 5,568,645 $ 5,358,600
Fannie Mae
5.36% 10/1/35 2,335,231 2,320,591
5.99% 4/1/36 823,279 833,241
Freddie Mac
5.62% 4/1/36 8,631,390 8,615,927
GSR Mortgage Loan Trust
5.22% 1/25/36 4,978,622 4,821,623
5.68% 4/25/36 4,024,957 3,921,243
Indymac INDX Mortgage Loan Trust
5.20% 11/25/35 3,738,726 3,617,581
5.75% 3/25/37 4,672,527 4,625,147
Wells Fargo Mortgage Backed Securities Trust
5.12% 9/25/35 1,056,000 1,038,783
------------
35,152,736
------------
MONTHLY London Interbank Offering Rate (LIBOR)
Collateralized Mortgage Obligations............ 10.3%
Fannie Mae
5.29% 2/25/37 9,753,416 9,694,173
5.13% 3/25/37 3,828,848 3,816,505
------------
13,510,678
------------
TOTAL ADJUSTABLE RATE MORTGAGE-RELATED SECURITIES
(Cost $48,611,052) 48,663,414
------------
FIXED RATE MORTGAGE-RELATED SECURITIES........... 57.7%
15 Yr. Securities.............................. 0.5%
Fannie Mae
7.00% 3/1/15 646,350 671,739
------------
30 Yr. Securities.............................. 11.2%
Fannie Mae
5.00% 8/1/33 9,564,727 9,209,413
6.00% 6/1/34 3,814,126 3,852,863
Government National Mortgage Association
7.50% 2/15/24 364,955 390,078
7.00% 4/15/27 370,747 389,603
6.00% 1/15/29 851,959 873,516
------------
14,715,473
------------
</Table>
- --------------------------------------------------------------------------------
See notes to financial statements.
30
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
U.S. GOVERNMENT MORTGAGE FUND (CONTINUED)
STATEMENT OF NET ASSETS
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
<Table>
<Caption>
PERCENTAGE
OF NET MATURITY PRINCIPAL
ASSETS DATE AMOUNT VALUE
- -----------------------------------------------------------------------------------------------------
Collateralized Mortgage Obligations............ 46.0%
Fannie Mae
5.00% 9/25/32 $13,929,000 $ 13,596,621
4.00% 1/25/33 845,042 803,864
5.50% 12/25/36 8,573,000 8,283,407
4.25% 4/25/37 4,415,573 4,227,456
Freddie Mac
5.50% 12/15/28 5,496,270 5,526,383
5.00% 3/15/30 10,670,000 10,552,905
4.00% 3/15/33 1,111,796 1,057,849
5.50% 6/15/33 12,201,000 12,035,381
4.25% 12/15/36 4,388,331 4,175,766
------------
60,259,632
------------
TOTAL FIXED RATE MORTGAGE-RELATED SECURITIES
(Cost $75,654,066) 75,646,844
------------
REPURCHASE AGREEMENT............................. 5.0%
Citigroup Repo, 4.92%, (Agreement dated
10/31/07 to be repurchased at $6,529,892 on
11/1/07. Collateralized by a U.S. Government
Mortgage-Backed Security, 6.00%, with a
value of $6,659,581, due 6/25/34) 6,529,000 6,529,000
------------
TOTAL REPURCHASE AGREEMENTS
(Cost $6,529,000)........................... 6,529,000
------------
TOTAL INVESTMENTS
(Cost $130,794,118)......................... 99.8% 130,839,258
OTHER ASSETS IN EXCESS OF LIABILITIES............ 0.2% 230,537
------------
Net Assets applicable to 12,933,086 Shares of
Common Stock issued and outstanding............ 100.0% $131,069,795
============
Net Asset Value, offering and redemption price
per share ($131,069,795 / 12,933,086) $10.13
============
</Table>
- --------------------------------------------------------------------------------
* The rates presented are the rates in effect at October 31, 2007.
See notes to financial statements.
31
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
LARGE CAP EQUITY FUND
STATEMENT OF NET ASSETS
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
<Table>
<Caption>
PERCENTAGE
OF NET
ASSETS SHARES VALUE
- ---------------------------------------------------------------------------------------------------------
COMMON STOCKS..................................... 95.6%
Advertising..................................... 2.8%
Omnicom Group, Inc. 32,000 $ 1,631,360
-----------
Automotive...................................... 1.6%
Harley-Davidson, Inc. 18,000 927,000
-----------
Banks........................................... 2.7%
Wells Fargo & Co. 45,000 1,530,450
-----------
Beverages....................................... 3.1%
Anheuser-Busch Companies, Inc. 35,000 1,794,800
-----------
Beverages Non-Alcoholic......................... 9.0%
Coca-Cola Co. 43,000 2,655,680
PepsiCo, Inc. 34,000 2,506,480
-----------
5,162,160
-----------
Building Products............................... 3.0%
Home Depot, Inc. 55,000 1,733,050
-----------
Business Services............................... 2.6%
Staples, Inc. 64,000 1,493,760
-----------
Computer Hardware............................... 5.7%
Cisco Systems, Inc.(a) 57,000 1,884,420
Dell, Inc.(a) 45,000 1,377,000
-----------
3,261,420
-----------
Computer Software & Services.................... 10.3%
Automatic Data Processing, Inc. 40,000 1,982,400
International Business Machines Corp. 10,000 1,161,200
Microsoft Corp. 75,000 2,760,750
-----------
5,904,350
-----------
Consumer Non-Durable............................ 4.8%
Procter & Gamble Co. 40,000 2,780,800
-----------
Distributor-Consumer Products................... 2.5%
Sysco Corp. 42,000 1,440,180
-----------
Diversified Manufacturing....................... 11.5%
3M Co. 24,000 2,072,640
General Electric Co. 68,000 2,798,880
Illinois Tool Works, Inc. 30,000 1,717,800
-----------
6,589,320
-----------
Financial Services.............................. 2.7%
American Express Co. 25,000 1,523,750
-----------
</Table>
- --------------------------------------------------------------------------------
See notes to financial statements.
32
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
LARGE CAP EQUITY FUND (CONTINUED)
STATEMENT OF NET ASSETS
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
<Table>
<Caption>
PERCENTAGE
OF NET
ASSETS SHARES VALUE
- ---------------------------------------------------------------------------------------------------------
Health Care..................................... 11.3%
Abbott Laboratories 32,000 $ 1,747,840
Johnson & Johnson 45,000 2,932,650
UnitedHealth Group, Inc. 37,000 1,818,550
-----------
6,499,040
-----------
Insurance....................................... 9.4%
American International Group, Inc. 35,000 2,209,200
Berkshire Hathaway, Inc.(a) 24 3,180,000
-----------
5,389,200
-----------
Medical Instruments............................. 2.9%
Medtronic, Inc. 35,000 1,660,400
-----------
Oil & Gas....................................... 2.7%
Exxon Mobil Corp. 17,000 1,563,830
-----------
Retail.......................................... 4.7%
Wal-Mart Stores, Inc. 60,000 2,712,600
-----------
Transportation & Shipping....................... 2.3%
FedEx Corp. 13,000 1,343,420
-----------
TOTAL COMMON STOCKS
(Cost $37,850,512) 54,940,890
-----------
CASH EQUIVALENTS.................................. 5.0%
Money Market Mutual Funds....................... 5.0%
Vanguard Admiral Treasury Money Market Fund 1,382,630 1,382,630
Vanguard Federal Money Market Fund 1,500,000 1,500,000
-----------
TOTAL CASH EQUIVALENTS
(Cost $2,882,631) 2,882,630
-----------
TOTAL INVESTMENTS
(Cost $40,733,143) 100.6% 57,823,520
LIABILITIES IN EXCESS OF OTHER ASSETS............. (0.6)% (362,633)
-----------
Net Assets applicable to 5,487,347 Shares of
Common Stock issued and outstanding............. 100.0% $57,460,887
===========
Net Asset Value, offering and redemption price per
share ($57,460,887 / 5,487,347) $10.47
===========
</Table>
- --------------------------------------------------------------------------------
(a) Non-income producing security.
See notes to financial statements.
33
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 2007
- --------------------------------------------------------------------------------
<Table>
<Caption>
U.S.
MONEY ULTRA SHORT SHORT U.S. INTERMEDIATE GOVERNMENT
MARKET MORTGAGE ULTRA SHORT GOVERNMENT MORTGAGE MORTGAGE
FUND FUND FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest income............... $9,616,746 $127,007,809 $11,538,638 $8,049,731 $14,114,653 $8,175,211
Dividend income............... -- -- -- -- -- --
---------- ------------ ----------- ----------- ----------- ----------
Total investment income..... 9,616,746 127,007,809 11,538,638 8,049,731 14,114,653 8,175,211
---------- ------------ ----------- ----------- ----------- ----------
Operating expenses:
Investment advisory......... 274,099 9,954,371 900,241 364,857 872,090 359,452
Distribution -- Class I
Shares.................... 206,774 5,530,179 500,131 218,915 373,756 215,672
Distribution -- Class D
Shares.................... 269,298 -- -- -- -- --
Fund accounting............. -- 11,016 2,767 2,798 5,439 4,398
Administration.............. 54,818 521,187 60,015 43,782 74,749 43,133
Custodian................... 25,395 168,807 26,903 25,150 37,012 25,262
Transfer agent.............. 25,292 58,266 6,515 4,818 3,012 2,193
Legal....................... 17,191 129,380 13,272 10,520 15,207 8,711
Chief Compliance Officer.... 6,437 83,328 7,543 5,490 9,285 5,430
Trustees.................... 8,641 101,336 9,138 6,861 11,549 6,659
Other....................... 43,946 260,327 35,214 13,962 41,702 29,641
---------- ------------ ----------- ----------- ----------- ----------
Total expenses before fee
reductions................ 931,891 16,818,197 1,561,739 697,153 1,443,801 700,551
Expenses reduced by
Investment Adviser........ (274,099) (4,424,192) (400,110) -- (249,167) --
Expenses reduced by
Distributor............... (171,168) (2,212,056) (200,051) -- -- --
---------- ------------ ----------- ----------- ----------- ----------
Net expenses.............. 486,624 10,181,949 961,578 697,153 1,194,634 700,551
---------- ------------ ----------- ----------- ----------- ----------
Net investment income..... 9,130,122 116,825,860 10,577,060 7,352,578 12,920,019 7,474,660
---------- ------------ ----------- ----------- ----------- ----------
REALIZED AND UNREALIZED
GAINS/(LOSSES) FROM INVESTMENT
ACTIVITIES:
Realized gains/(losses) from
investment transactions..... (407) (3,606,862) (1,057,532) (411,493) (1,202,637) 93,396
Change in unrealized
appreciation/depreciation on
investments................. -- (12,892,361) (1,390,736) 89,925 (3,543,311) (716,600)
---------- ------------ ----------- ----------- ----------- ----------
Net realized/unrealized
gains/(losses) from
investments................. (407) (16,499,223) (2,448,268) (321,568) (4,745,948) (623,204)
---------- ------------ ----------- ----------- ----------- ----------
CHANGE IN NET ASSETS RESULTING
FROM OPERATIONS................. $9,129,715 $100,326,637 $ 8,128,792 $7,031,010 $ 8,174,071 $6,851,456
========== ============ =========== =========== =========== ==========
- ----------------------------------------------------------------------------------------------------------------------
<Caption>
LARGE CAP LARGE CAP
EQUITY EQUITY
FUND(A) FUND(B)
INVESTMENT INCOME:
Interest income............... $ 1,284 $ 11,475
Dividend income............... 883,353 1,242,293
----------- ----------
Total investment income..... 884,637 1,253,768
----------- ----------
Operating expenses:
Investment advisory......... 325,695 531,583
Distribution -- Class I
Shares.................... 120,564 --
Distribution -- Class D
Shares.................... -- --
Fund accounting............. 805 1,119
Administration.............. 16,098 70,877
Custodian................... 8,059 10,233
Transfer agent.............. 17,292 20,454
Legal....................... 105,380 209,238
Chief Compliance Officer.... 10,737 50,756
Trustees.................... -- 193,000
Other....................... 29,951 103,830
----------- ----------
Total expenses before fee
reductions................ 634,581 1,191,090
Expenses reduced by
Investment Adviser........ -- --
Expenses reduced by
Distributor............... (47,862) --
----------- ----------
Net expenses.............. 586,719 1,191,090
----------- ----------
Net investment income..... 297,918 62,678
----------- ----------
REALIZED AND UNREALIZED
GAINS/(LOSSES) FROM INVESTMENT
ACTIVITIES:
Realized gains/(losses) from
investment transactions..... 5,389,677 6,951,631
Change in unrealized
appreciation/depreciation on
investments................. (2,766,173) 2,267,874
----------- ----------
Net realized/unrealized
gains/(losses) from
investments................. 2,623,504 9,219,505
----------- ----------
CHANGE IN NET ASSETS RESULTING
FROM OPERATIONS................. $ 2,921,422 $9,282,183
=========== ==========
- ----------------------------------------------------------------------
</Table>
(a) For the ten months ended October 31, 2007.
(b) For the year ended December 31, 2006.
See notes to financial statements.
34
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<Table>
<Caption>
MONEY MARKET FUND
------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 2007 OCTOBER 31, 2006
- --------------------------------------------------------------------------------------------------
Increase (decrease) in net assets:
Operations:
Net investment income.................................. $ 9,130,122 $ 5,660,591
Net realized (loss) from investment transactions....... (407) --
------------- -------------
Change in net assets resulting from operations....... 9,129,715 5,660,591
------------- -------------
Dividends paid to stockholders:
From net investment income:
Class I stockholders................................. (7,063,436) (4,264,854)
Class D stockholders................................. (2,066,686) (1,395,737)
------------- -------------
Total dividends paid to stockholders................. (9,130,122) (5,660,591)
------------- -------------
Capital Transactions:
Class I Shares:
Proceeds from sale of shares......................... 697,711,439 547,595,058
Shares issued to stockholders in reinvestment of
dividends........................................... 5,311,340 3,304,340
Cost of shares repurchased........................... (681,323,464) (522,189,701)
Class D Shares:
Proceeds from sale of shares......................... 515,475,607 584,490,918
Shares issued to stockholders in reinvestment of
dividends........................................... 1,436,058 954,298
Cost of shares repurchased........................... (489,935,433) (592,886,171)
------------- -------------
Change in net assets from capital transactions....... 48,675,547 21,268,742
------------- -------------
Change in net assets................................. 48,675,140 21,268,742
Net Assets:
Beginning of year......................................... 141,202,107 119,933,365
------------- -------------
End of year............................................... $ 189,877,247 $ 141,202,107
============= =============
Accumulated Net Investment Income (loss).................... $ -- $ --
------------- -------------
</Table>
- --------------------------------------------------------------------------------
See notes to financial statements.
35
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<Table>
<Caption>
ULTRA SHORT MORTGAGE FUND ULTRA SHORT FUND
-------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
2007 2006 2007 2006
- -------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets:
Operations:
Net investment income............... $ 116,825,860 $ 106,265,575 $ 10,577,060 $ 10,101,983
Net realized gains/(losses) from
investment transactions.......... (3,606,862) (10,499,986) (1,057,532) (1,319,862)
Change in unrealized
appreciation/depreciation on
investments...................... (12,892,361) 10,378,859 (1,390,736) 1,680,389
-------------- -------------- ------------ ------------
Change in net assets resulting
from operations................ 100,326,637 106,144,448 8,128,792 10,462,510
-------------- -------------- ------------ ------------
Dividends paid to stockholders:
From net investment income.......... (114,941,079) (109,621,055) (10,682,801) (10,498,576)
-------------- -------------- ------------ ------------
Total dividends paid to
stockholders................... (114,941,079) (109,621,055) (10,682,801) (10,498,576)
-------------- -------------- ------------ ------------
Capital Transactions:
Proceeds from sale of shares........ 134,185,923 98,015,298 21,157,500 31,874,639
Shares issued to stockholders in
reinvestment of dividends........ 45,714,895 44,176,667 3,035,344 3,701,434
Cost of shares repurchased.......... (325,770,605) (520,639,566) (31,140,110) (62,674,517)
-------------- -------------- ------------ ------------
Change in net assets from capital
transactions................... (145,869,787) (378,447,601) (6,947,266) (27,098,444)
-------------- -------------- ------------ ------------
Change in net assets............. (160,484,229) (381,924,208) (9,501,275) (27,134,510)
Net Assets:
Beginning of year..................... 2,292,373,346 2,674,297,554 204,661,993 231,796,503
-------------- -------------- ------------ ------------
End of year........................... $2,131,889,117 $2,292,373,346 $195,160,718 $204,661,993
============== ============== ============ ============
Accumulated net investment
income/(loss)......................... $ 239,116 $ 317,033 $ 81,378 $ 116,648
- -------------------------------------------------------------------------------------------------------
</Table>
See notes to financial statements.
36
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<Table>
<Caption>
SHORT U.S. GOVERNMENT FUND INTERMEDIATE MORTGAGE FUND U.S. GOVERNMENT MORTGAGE FUND
- ---------------------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
2007 2006 2007 2006 2007 2006
- ---------------------------------------------------------------------------------------------------------------
$ 7,352,578 $ 6,552,081 $ 12,920,019 $ 12,360,383 $ 7,474,660 $ 8,165,770
(411,493) (533,158) (1,202,637) (2,787,679) 93,396 (2,976,770)
89,925 785,906 (3,543,311) 3,104,041 (716,600) 2,836,325
------------ ------------ ------------ ------------ ------------ ------------
7,031,010 6,804,829 8,174,071 12,676,745 6,851,456 8,025,325
------------ ------------ ------------ ------------ ------------ ------------
(7,315,008) (6,880,069) (12,733,365) (12,424,316) (7,300,729) (8,241,573)
------------ ------------ ------------ ------------ ------------ ------------
(7,315,008) (6,880,069) (12,733,365) (12,424,316) (7,300,729) (8,241,573)
------------ ------------ ------------ ------------ ------------ ------------
1,475,743 23,723,773 251,950 10,000 126,266 224,760
4,473,716 3,828,509 3,989,540 3,893,012 4,140,857 5,169,528
(35,188,675) (21,549,296) (28,712,317) (23,010,045) (36,836,284) (7,137,906)
------------ ------------ ------------ ------------ ------------ ------------
(29,239,216) 6,002,986 (24,470,827) (19,107,033) (32,569,161) (1,743,618)
------------ ------------ ------------ ------------ ------------ ------------
(29,523,214) 5,927,746 (29,030,121) (18,854,604) (33,018,434) (1,959,866)
162,249,880 156,322,134 259,106,427 277,961,031 164,088,229 166,048,095
------------ ------------ ------------ ------------ ------------ ------------
$132,726,666 $162,249,880 $230,076,306 $259,106,427 $131,069,795 $164,088,229
============ ============ ============ ============ ============ ============
$ 945 $ 17,291 $ 8,699 $ 10,819 $ (22,340) $ (23,380)
- ---------------------------------------------------------------------------------------------------------------
</Table>
37
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<Table>
<Caption>
LARGE CAP EQUITY FUND
------------------------------------------
TEN MONTHS
ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, DECEMBER 31, DECEMBER 31,
2007 2006 2005
- ------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets:
Operations:
Net investment income................................. $ 297,918 $ 62,678 $ 98,632
Net realized gains from investment transactions....... 5,389,677 6,951,631 4,147,635
Change in unrealized appreciation/depreciation from
investments........................................ (2,766,173) 2,267,874 (6,698,044)
------------ ------------ ------------
Change in net assets resulting from operations..... 2,921,422 9,282,183 (2,451,777)
------------ ------------ ------------
Dividends paid to stockholders:
From net investment income............................ (285,078) (108,133) (95,581)
From net realized gains............................... -- (6,909,248) (4,147,636)
Tax Return of Capital................................. -- (3,839) --
------------ ------------ ------------
Total dividends paid to stockholders............... (285,078) (7,021,220) (4,243,217)
------------ ------------ ------------
Capital Transactions:
Proceeds from sale of shares.......................... 1,165,000 655,125 300,000
Shares issued to stockholders in reinvestment of
dividends.......................................... 164,526 3,393,465 3,234,016
Cost of shares repurchased............................ (12,665,730) (23,780,798) (4,265,561)
------------ ------------ ------------
Change in net assets from capital transactions..... (11,336,204) (19,732,208) (731,545)
------------ ------------ ------------
Change in net assets............................... (8,699,860) (17,471,245) (7,426,539)
Net Assets:
Beginning of period..................................... 66,160,747 83,631,992 91,058,531
------------ ------------ ------------
End of period........................................... $ 57,460,887 $ 66,160,747 $ 83,631,992
============ ============ ============
Accumulated net investment income/(loss).................. $ 241,840 $ -- $ 3,072
- ------------------------------------------------------------------------------------------------------
</Table>
See notes to financial statements.
38
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
MONEY MARKET FUND
FINANCIAL HIGHLIGHTS -- CLASS I SHARES
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD INDICATED.
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED OCTOBER 31,
--------------------------------------------------------
2007 2006 2005 2004 2003
- --------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income..................... 0.0512 0.0465 0.0264 0.0104 0.0096
Net realized losses from investments...... --(a) -- --(a) -- --
-------- -------- -------- -------- --------
Total from investment operations..... 0.0512 0.0465 0.0264 0.0104 0.0096
-------- -------- -------- -------- --------
Less distributions:
Dividends paid to stockholders:
From net investment income............. (0.0512) (0.0465) (0.0264) (0.0104) (0.0096)
-------- -------- -------- -------- --------
Net asset value, end of year........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total return........................... 5.24% 4.76% 2.68% 1.04% 0.97%
Ratios/Supplemental data:
Net assets, end of year (in 000's)........ $131,720 $110,021 $ 81,311 $ 31,883 $ 40,737
Ratio of expenses to average net assets... 0.14% 0.18% 0.17% 0.11% 0.18%
Ratio of net investment income to average
net assets............................. 5.12% 4.68% 2.84% 1.04% 0.96%
Ratio of expenses to average net
assets*................................ 0.40% 0.43% 0.42% 0.41% 0.39%
</Table>
- --------------------------------------------------------------------------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Net realized losses per share were less than $0.00005.
See notes to financial statements.
39
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
MONEY MARKET FUND
FINANCIAL HIGHLIGHTS -- CLASS D SHARES
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD INDICATED.
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED OCTOBER 31,
----------------------------------------------------
2007 2006 2005 2004 2003
- -----------------------------------------------------------------------------------------------------
Net asset value, beginning of year.............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income......................... 0.0462 0.0420 0.0219 0.0054 0.0046
Net realized losses from investments.......... --(a) -- --(a) -- --
-------- -------- -------- -------- --------
Total from investment operations......... 0.0462 0.0420 0.0219 0.0054 0.0046
-------- -------- -------- -------- --------
Less distributions:
Dividends paid to stockholders:...............
From net investment income................. (0.0462) (0.0420) (0.0219) (0.0054) (0.0046)
-------- -------- -------- -------- --------
Net asset value, end of year.................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total return............................. 4.72% 4.29% 2.22% 0.54% 0.47%
Ratios/Supplemental data:
Net assets, end of year (in 000's)............ $ 58,157 $ 31,181 $ 38,622 $ 19,089 $ 23,525
Ratio of expenses to average net assets....... 0.64% 0.63% 0.63% 0.61% 0.67%
Ratio of net investment income to average net
assets..................................... 4.60% 4.29% 2.23% 0.54% 0.45%
Ratio of expenses to average net assets*...... 0.85% 0.88% 0.88% 0.86% 0.84%
</Table>
- --------------------------------------------------------------------------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Net realized losses per share were less than $0.00005.
See notes to financial statements.
40
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
ULTRA SHORT MORTGAGE FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD INDICATED.
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED OCTOBER 31,
------------------------------------------------------------------
2007 2006 2005 2004 2003
- ---------------------------------------------------------------------------------------------------------
Net asset value, beginning of
year............................. $ 9.68 $ 9.69 $ 9.83 $ 9.88 $ 9.95
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income............ 0.5107 0.4216 0.2706 0.1824 0.1778
Net realized and unrealized gains
(losses) from investments..... (0.0686) 0.0041(a) (0.0930) (0.0070) (0.0230)
---------- ---------- ---------- ---------- ----------
Total from investment
operations............... 0.4421 0.4257 0.1776 0.1754 0.1548
---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends paid to stockholders:
From net investment income.... (0.5021) (0.4357) (0.3176) (0.2254) (0.2248)
---------- ---------- ---------- ---------- ----------
Change in net asset value.......... (0.06) (0.01) (0.14) (0.05) (0.07)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year....... $ 9.62 $ 9.68 $ 9.69 $ 9.83 $ 9.88
========== ========== ========== ========== ==========
Total return....................... 4.67% 4.49% 1.83% 1.79% 1.57%
Ratios/Supplemental data:
Net assets, end of year (in
000's)........................ $2,131,889 $2,292,373 $2,674,298 $3,317,024 $4,596,939
Ratio of expenses to average net
assets........................ 0.46% 0.46% 0.46% 0.44% 0.44%
Ratio of net investment income to
average net assets............ 5.28% 4.35% 2.80% 1.92% 1.72%
Ratio of expenses to average net
assets*....................... 0.76% 0.76% 0.76% 0.72% 0.71%
Portfolio turnover rate.......... 59% 83% 63% 50% 117%
</Table>
- --------------------------------------------------------------------------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The amount shown for a share outstanding throughout the period does not
accord with the change in aggregate gains and losses in the portfolio of
securities during the period because of the timing of sales and purchases of
fund shares in relation to fluctuating market values during the period.
See notes to financial statements.
41
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
ULTRA SHORT FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD INDICATED.
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED OCTOBER 31,
--------------------------------------------------------
2007 2006 2005 2004 2003
- --------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......... $ 9.74 $ 9.74 $ 9.87 $ 9.92 $ 9.95
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income..................... 0.5137 0.4462 0.2909 0.1985 0.1601
Net realized and unrealized gains (losses)
from investments....................... (0.1249) 0.0185 (0.0832) (0.0217) 0.0242
-------- -------- -------- -------- --------
Total from investment operations..... 0.3888 0.4647 0.2077 0.1768 0.1843
-------- -------- -------- -------- --------
Less distributions:
Dividends paid to stockholders:
From net investment income............. (0.5188) (0.4647) (0.3377) (0.2268) (0.2143)
-------- -------- -------- -------- --------
Change in net asset value................... (0.13) 0.00 (0.13) (0.05) (0.03)
-------- -------- -------- -------- --------
Net asset value, end of year................ $ 9.61 $ 9.74 $ 9.74 $ 9.87 $ 9.92
======== ======== ======== ======== ========
Total return................................ 4.07% 4.88% 2.14% 1.80% 1.87%
Ratios/Supplemental data:
Net assets, end of year (in 000's)........ $195,161 $204,662 $231,797 $291,349 $251,668
Ratio of expenses to average net assets... 0.48% 0.48% 0.49% 0.47% 0.47%
Ratio of net investment income to average
net assets............................. 5.29% 4.57% 2.99% 2.00% 1.66%
Ratio of expenses to average net
assets*................................ 0.78% 0.78% 0.79% 0.77% 0.77%
Portfolio turnover rate................... 36% 89% 36% 118% 126%
</Table>
- --------------------------------------------------------------------------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
See notes to financial statements.
42
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
SHORT U.S. GOVERNMENT FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD INDICATED.
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED OCTOBER 31,
--------------------------------------------------------
2007 2006 2005 2004 2003
- --------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......... $ 10.37 $ 10.37 $ 10.61 $ 10.68 $ 10.78
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income..................... 0.5222 0.4370 0.3421 0.2640 0.2738
Net realized and unrealized gains (losses)
from investments....................... (0.0232) 0.0209 (0.2035) (0.0415) (0.0686)
-------- -------- -------- -------- --------
Total from investment operations..... 0.4990 0.4579 0.1386 0.2225 0.2052
-------- -------- -------- -------- --------
Less distributions:
Dividends paid to stockholders:
From net investment income............. (0.5190) (0.4579) (0.3786) (0.2925) (0.3052)
-------- -------- -------- -------- --------
Change in net asset value................... (0.02) -- (0.24) (0.07) (0.10)
-------- -------- -------- -------- --------
Net asset value, end of year................ $ 10.35 $ 10.37 $ 10.37 $ 10.61 $ 10.68
======== ======== ======== ======== ========
Total return................................ 4.93% 4.52% 1.33% 2.11% 1.92%
Ratios/Supplemental data:
Net assets, end of year (in 000's)........ $132,727 $162,250 $156,322 $153,252 $232,605
Ratio of expenses to average net assets... 0.48% 0.51% 0.50% 0.48% 0.47%
Ratio of net investment income to average
net assets............................. 5.04% 4.22% 3.24% 2.50% 2.47%
Portfolio turnover rate................... 42% 56% 95% 152% 72%
</Table>
- --------------------------------------------------------------------------------
See notes to financial statements.
43
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
INTERMEDIATE MORTGAGE FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD INDICATED.
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED OCTOBER 31,
--------------------------------------------------------
2007 2006 2005 2004 2003
- --------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......... $ 9.29 $ 9.28 $ 9.57 $ 9.62 $ 9.79
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income..................... 0.4810 0.4306 0.3792 0.2892 0.2525
Net realized and unrealized gains (losses)
from investments....................... (0.1774) 0.0123 (0.2778) (0.0233) (0.1156)
-------- -------- -------- -------- --------
Total from investment operations..... 0.3036 0.4429 0.1014 0.2659 0.1369
-------- -------- -------- -------- --------
Less distributions:
Dividends paid to stockholders:
From net investment income............. (0.4736) (0.4329) (0.3914) (0.3159) (0.3069)
-------- -------- -------- -------- --------
Change in net asset value................... (0.17) 0.01 (0.29) (0.05) (0.17)
-------- -------- -------- -------- --------
Net asset value, end of year................ $ 9.12 $ 9.29 $ 9.28 $ 9.57 $ 9.62
======== ======== ======== ======== ========
Total return................................ 3.31% 4.90% 1.07% 2.81% 1.41%
Ratios/Supplemental data:
Net assets, end of year (in 000's)........ $230,076 $259,106 $277,961 $298,308 $347,858
Ratio of expenses to average net assets... 0.48% 0.48% 0.48% 0.47% 0.47%
Ratio of net investment income to average
net assets............................. 5.19% 4.65% 4.02% 3.02% 2.52%
Ratio of expenses to average net
assets*................................ 0.58% 0.58% 0.58% 0.57% 0.57%
Portfolio turnover rate................... 39% 56% 95% 148% 98%
</Table>
- --------------------------------------------------------------------------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
See notes to financial statements.
44
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
U.S. GOVERNMENT MORTGAGE FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD INDICATED.
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED OCTOBER 31,
--------------------------------------------------------
2007 2006 2005 2004 2003
- --------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......... $ 10.18 $ 10.19 $ 10.59 $ 10.56 $ 10.77
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income..................... 0.5287 0.5038 0.4855 0.3875 0.3689
Net realized and unrealized gains (losses)
on investments......................... (0.0631) (0.0053) (0.3880) 0.0795 (0.1511)
-------- -------- -------- -------- --------
Total from investment operations....... 0.4656 0.4985 0.0975 0.4670 0.2178
-------- -------- -------- -------- --------
Less distributions:
Dividends paid to stockholders:
From net investment income............. (0.5156) (0.5085) (0.4975) (0.4370) (0.4278)
-------- -------- -------- -------- --------
Change in net asset value................... (0.05) (0.01) (0.40) 0.03 (0.21)
-------- -------- -------- -------- --------
Net asset value, end of year................ $ 10.13 $ 10.18 $ 10.19 $ 10.59 $ 10.56
======== ======== ======== ======== ========
Total return................................ 4.69% 5.04% 0.92% 4.52% 2.04%
Ratios/Supplemental data:
Net assets, end of year (in 000's)........ $131,070 $164,088 $166,048 $166,868 $204,566
Ratio of expenses to average net assets... 0.49% 0.48% 0.48% 0.47% 0.47%
Ratio of net investment income to average
net assets............................. 5.20% 4.98% 4.66% 3.70% 3.39%
Portfolio turnover rate................... 39% 105% 71% 171% 102%
</Table>
- --------------------------------------------------------------------------------
See notes to financial statements.
45
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
LARGE CAP EQUITY FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD INDICATED.
- --------------------------------------------------------------------------------
<Table>
<Caption>
TEN
MONTHS
ENDED YEAR ENDED DECEMBER 31,
OCTOBER 31, -----------------------------------------------------
2007 * 2006 2005 2004 2003 2002
- ------------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period............................ $ 10.01 $ 9.77 $ 10.56 $ 10.61 $ 9.09 $ 11.16
------- ------- ------- ------- -------- --------
Income (Loss) from operations:
Net investment income............. 0.05 0.01 0.01 0.05 0.01 0.02
Net realized and unrealized gains
(losses) from investments...... 0.46 1.35 (0.29) 0.50 1.57 (1.83)
------- ------- ------- ------- -------- --------
Total from investment
operations................... 0.51 1.36 (0.28) 0.55 1.58 (1.81)
------- ------- ------- ------- -------- --------
Distributions:
From net investment income........ (0.05) (0.02) (0.01) (0.05) (0.01) (0.02)
From net realized gains on
investments.................... -- (1.10) (0.50) (0.55) (0.05) (0.24)
Return of capital................. -- --(a) -- -- --(a) --
------- ------- ------- ------- -------- --------
Total distributions.......... (0.05) (1.12) (0.51) (0.60) (0.06) (0.26)
------- ------- ------- ------- -------- --------
Change in net asset value........... 0.46 0.24 (0.79) (0.05) 1.52 (2.07)
------- ------- ------- ------- -------- --------
Net asset value, end of period...... $ 10.47 $ 10.01 $ 9.77 $ 10.56 $ 10.61 $ 9.09
======= ======= ======= ======= ======== ========
Total return........................ 5.11%(b) 13.83% (2.70%) 5.16% 17.48% (16.19%)
Ratios/Supplemental data:
Net assets, end of period
(000's)........................ $57,461 $66,161 $83,632 $91,059 $107,923 $ 90,871
Ratio of expenses to average net
assets......................... 1.18%(c) 1.68% 1.44% 1.20% 1.32% 1.23%
Ratio of net investment income to
average net assets............. 0.60%(c) 0.09% 0.11% 0.46% 0.14% 0.20%
Ratio of expenses to average net
assets**....................... 1.27%(c) -- -- -- -- --
Portfolio turnover rate........... 13% 10% 23% 14% 22% 17%
</Table>
- --------------------------------------------------------------------------------
* In connection with the reorganization of the AMF Large Cap Equity
Institutional Fund, Inc. (the Predecessor Fund) into the Large Cap Equity
Fund on January 8, 2007, the Net Asset Value (NAV) of the Predecessor Fund
changed to $10.00 per share. Shareholders received the number of shares of
Large Cap Equity Fund equal in value to the number of shares held in the
Predecessor Fund. The amounts presented prior to this date have been
restated to reflect the change in NAV during the reorganization.
** During the period, certain fees were voluntarily reduced. If such
voluntarily fee reductions had not occurred, the ratios would have been as
indicated.
(a) Distributions per share were less than $0.005.
(b) Not annualized.
(c) Annualized.
See notes to financial statements.
46
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
Asset Management Fund (the "Trust") was reorganized as a Delaware statutory
trust on September 30, 1999, and is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as a diversified open-end management
company. As of October 31, 2007, the Trust is authorized to issue an unlimited
number of shares in seven separate series: the Money Market Fund, the Ultra
Short Mortgage Fund, the Ultra Short Fund, the Short U.S. Government Fund, the
Intermediate Mortgage Fund, the U.S. Government Mortgage Fund and the Large Cap
Equity Fund (referred to individually as a "Fund" and collectively as the
"Funds"). Each of the Funds, except the Money Market Fund, offer a single class
of shares. The Money Market Fund is authorized to sell two classes of shares,
Class I Shares and Class D Shares. Class I and Class D Shares of the Money
Market Fund have the same rights and obligations except that (i) Class D Shares
bear a higher distribution fee, which will cause Class D Shares to have a higher
expense ratio and to pay lower dividends than those related to Class I Shares;
(ii) certain other class specific expenses will be borne solely by the class to
which such expenses are attributable; and (iii) each class has exclusive voting
rights with respect to the matters relating to its own distribution
arrangements.
Under the Trust's organizational documents, its officers and trustees are
indemnified against certain liabilities arising out of the performance of their
duties to the Trust. In addition, in the normal course of business, the Trust
enters into contracts with its vendors and others that provide general
indemnification. Each Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against a Fund.
However, based on experience, the Trust expects the risk of loss to be remote.
The Trust maintains an insurance policy which insures its officers and trustees
against certain liabilities.
A. Significant accounting policies are as follows:
SECURITY VALUATION
Money Market Fund:
Fund securities are valued using the amortized cost method, which approximates
current market value. Under this method, securities are valued at cost when
purchased and thereafter a constant proportionate amortization of any discount
or premium is recorded until maturity of the security. The Fund seeks to
maintain the net asset value per share at $1.00.
Ultra Short Mortgage Fund, Ultra Short Fund, Short U.S. Government Fund,
Intermediate Mortgage Fund, and U.S. Government Mortgage Fund:
The Funds' investments are valued at fair value on the basis of the closing
bid as supplied by an independent pricing service approved by the Board of
Trustees or valuation provided by dealers based on matrix pricing or, for
certain securities, the Board of Trustees has approved the daily use of a matrix
pricing system developed by the Adviser that the Board believes reflects the
fair value of such securities. Within the matrix pricing systems used by dealers
and developed by the Adviser, among the more specific factors that are
considered in determining the fair value of investments in debt instruments are:
(1) information obtained with respect to market transactions in such securities
or comparable securities; (2) the price and extent of public trading in similar
securities of the issue or comparable companies; (3) the fundamental analytical
data relating to the investment; (4) quotations from broker/dealers, yields,
maturities, ratings and various relationships between securities; (5) evaluation
of the forces which influence the market in which these securities are purchased
and sold. The valuation process also takes into consideration factors such as
interest rate changes, movements in credit spreads, default rate assumptions,
47
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
prepayment assumptions, type and quality of collateral, and security seasoning.
Imprecision in estimating fair value can impact the amount of unrealized
appreciation or depreciation recorded for a particular security and differences
in the assumptions used could result in a different determination of fair value,
and those differences could be material. Due to the subjective and variable
nature of fair value pricing, it is possible that the fair value determined for
a particular security may be materially different from the value realized upon
such security's sale. Short-term instruments maturing within 60 days of the
valuation date may be valued based upon their amortized cost.
Large Cap Equity Fund:
Securities traded on the NASDAQ National Market System are valued at the
official closing price as reported by NASDAQ. Securities traded on national
exchanges are valued at the last reported sale price thereof where the security
is principally traded. In the case of over-the-counter securities, securities
are valued at the mean between closing bid and asked prices as of 4:00 PM
Eastern time. Short-term instruments maturing within 60 days of the valuation
date are valued at amortized cost, which approximates market value. Securities
for which such quotations are not readily available are valued at fair value as
determined in good faith by the Valuation Committee under the direction of the
Board of Trustees.
Liquidity and Valuation of Certain Securities
Recent instability in the markets for fixed income securities, particularly
mortgage-backed securities, has affected and is expected to continue to affect
the liquidity and valuation of such securities. This may result in illiquid
securities being disposed of at prices different from their recorded values
since the market price of illiquid securities generally is more volatile than
that of more liquid securities. The illiquidity of portfolio securities may
result in the Funds incurring losses on the sale of these securities that might
not be realized under more stable market conditions. Such losses can adversely
impact the Funds' net asset values per share. Certain securities that were
deemed liquid at time of acquisition have since been deemed to be illiquid due
to changes in market conditions. As of December 26, 2007 the value of illiquid
securities held by Ultra Short Fund, Ultra Short Mortgage Fund, and the
Intermediate Mortgage Fund were 1.14%, 2.22%, and 8.38% of total Fund values,
respectively.
New Accounting Pronouncement
In September 2006, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 157, "Fair Value Measurements"
(SFAS No. 157). SFAS No. 157 defines fair value, establishes a framework for
measuring fair value in accordance with generally accepted accounting principles
and expands disclosure about fair value measurements. SFAS No. 157 is effective
for fiscal years beginning after November 15, 2007. Management is currently
evaluating the impact the adoption of SFAS No. 157 will have on the Trust's
financial statement disclosures.
REPURCHASE AGREEMENTS
Obligations of the U.S. Government or other obligations that are not subject
to any investment limitation on the part of national banks may be purchased from
government securities dealers or the custodian bank, subject to the seller's
agreement to repurchase them at an agreed upon date and price. The value of
collateral underlying the repurchase agreement will always be at least equal to
the repurchase price, including any accrued interest earned on the repurchase
agreement. If the counter-party defaults, and the fair value of the collateral
declines, realization of the collateral by Funds may be delayed or limited.
48
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
SECURITIES PURCHASED ON A WHEN-ISSUED OR DELAYED-DELIVERY BASIS
Each Fund, except the Money Market Fund and the Large Cap Equity Fund, may
purchase securities on a when-issued or delayed-delivery basis. In when-issued
transactions, securities are bought or sold during the period between the
announcement of an offering and the issuance and payment date of the securities.
When securities are purchased on a delayed-delivery basis, the price of the
securities is fixed at the time the commitment to purchase is made, but
settlement may take place at a future date. By the time of delivery, securities
purchased on a when-issued of delayed-delivery basis may be valued at less than
the purchase price. At the time when-issued or delayed-delivery securities are
purchased, the Fund must set aside funds in a segregated account to pay for the
purchase, and until acquisition, the Fund will not earn any income on the
securities that it purchased. As of October 31, 2007, the Funds did not own any
when-issued or delayed-delivery securities.
DIVIDENDS TO SHAREHOLDERS
Money Market Fund, Ultra Short Mortgage Fund, Ultra Short Fund, Short U.S.
Government Fund, Intermediate Mortgage Fund and U.S. Government Mortgage Fund:
Dividends from net investment income are declared daily and paid monthly. Net
short-term and long-term capital gains, if any, are declared and paid annually.
Large Cap Equity Fund:
Dividends from net investment income are declared and paid quarterly. Net
short-term and long-term capital gains, if any, are declared and paid annually.
Distributions from net investment income and from net realized capital gains
are determined in accordance with federal income tax regulations, which may
differ from accounting principles generally accepted in the United States. These
"book/tax" differences are either considered temporary or permanent in nature.
To the extent these differences are permanent in nature (e.g. reclass of
dividend distribution and return of capital), such amounts are reclassified
within the composition of net assets based on their federal tax-basis treatment;
temporary differences do not require reclassification. Distributions to
shareholders that exceed net investment income and net realized capital gains
for tax purposes are reported as distributions of capital.
FEDERAL TAXES
No provision is made for Federal income taxes as it is the policy of each Fund
to continue to qualify as a regulated investment company by complying with the
provisions available to certain investment companies, as defined in applicable
sections of the Internal Revenue Code, and to make distributions of net
investment income and net realized capital gains sufficient to relieve it from
all, or substantially all, federal income taxes.
In June, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Funds' tax returns to determine whether the tax positions are
"more-likely-than-not" of being sustained by the applicable tax authority based
on the technical merits of the position. Tax positions not deemed to meet the
more-likely-than-not threshold would be recorded as a tax benefit or expense in
the current year. Adoption of FIN 48 is required no later than the last business
day of the first financial reporting date which
49
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
occurs during the fiscal year beginning after December 15, 2006 and is to be
applied to all open tax years as of the effective date. Accordingly, the Funds
are required to implement FIN 48 in their net asset value per share calculations
as of April 30, 2008. Management is currently in the process of evaluating the
impact that will result from adopting FIN 48. At this time, management does not
believe the adoption of FIN 48 will have a material impact to the financial
statements.
MANAGEMENT ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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 revenues and expenses during the reporting period. Actual results
could differ from these estimates.
OTHER
Investment transactions are accounted for no later than one business day after
trade date. However, for financial reporting purposes, investment transactions
are reported on trade date. Interest income is recorded on the accrual basis,
amortization and accretion is recognized based on the anticipated effective
maturity date, and the cost of investments sold is determined by use of the
specific identification method for both financial reporting and income tax
purposes. Paydown gains and losses on mortgage- and asset-backed securities are
recorded as adjustments to interest income in the Statement of Operations.
B. Fees and transactions with affiliates were as follows:
Shay Assets Management, Inc. (SAMI) serves the Trust as investment adviser
(the "Adviser"). The Adviser is a wholly-owned subsidiary of Shay Investment
Services, Inc. (SISI), which is controlled by Rodger D. Shay, the Chairman of
the Board of Trustees of the Trust, and Rodger D. Shay, Jr., a member of the
Board of Trustees and the President of SAMI and Shay Financial Services, Inc
(SFSI).
As compensation for investment advisory services, the Funds pay an investment
advisory fee monthly based upon an annual percentage of the average daily net
assets of each Fund as follows:
The investment advisory fee rate for the Money Market Fund is 0.15% of the
first $500 million, 0.125% of the next $500 million, and 0.10% of such net
assets in excess of $1 billion. The Adviser voluntarily waived its entire fee
for the year ended October 31, 2007.
The investment advisory fee rate for the Ultra Short Mortgage Fund is 0.45% of
the first $3 billion, 0.35% of the next $2 billion, and 0.25% of such net assets
in excess of $5 billion. The Adviser voluntarily waived a portion of its fee so
that the Fund paid 0.25% of average daily net assets for the year ended October
31, 2007.
The investment advisory fee rate for the Ultra Short Fund is 0.45% of the
average daily net assets. The Adviser voluntarily waived a portion of its fee so
that the Fund paid 0.25% of average daily net assets for the year ended October
31, 2007.
The investment advisory fee rate for each of the Short U.S. Government Fund
and the U.S. Government Mortgage Fund, computed separately, is 0.25% of the
first $500 million, 0.175% of the next $500 million, 0.125% of the next $500
million, and 0.10% of such net asset in excess of $1.5 billion.
The investment advisory fee rate for the Intermediate Mortgage Fund is 0.35%
of the first $500 million, 0.275% of the next $500 million, 0.20% of the next
$500 million, and 0.10% of such net assets in excess of $1.5 billion. The
50
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
Adviser voluntarily waived a portion of its fee so that the Fund paid 0.25% of
average daily net assets for the year ended October 31, 2007.
The investment advisory fee rate for the Large Cap Equity Fund is 0.65% of the
first $250 million and 0.55% for assets over $250 million.
The Adviser has agreed to reduce its advisory fees charged to the Money Market
Fund, the Short U.S. Government Fund, the Intermediate Mortgage Fund and the
U.S. Government Mortgage Fund, to the extent that the daily ratio of operating
expenses to average daily net assets of each Fund exceeds 0.75%.
SFSI serves the Trust as distributor (the "Distributor"). The Distributor is a
wholly-owned subsidiary of SISI, which is controlled by Rodger D. Shay, the
Chairman of the Board of Trustees of the Trust, and Rodger D. Shay, Jr., a
member of the Board of Trustees and the President of SAMI and SFSI.
As compensation for distribution services, the Trust pays the Distributor a
distribution fee monthly in accordance with the distribution plan adopted by the
Trust, pursuant to Rule 12b-1 under the 1940 Act, based upon an annual
percentage of the average daily net assets of each Fund as follows:
The distribution fee rate for each of the Money Market Fund Class I Shares and
Short U.S. Government Fund is based upon an annual percentage of the combined
average daily net assets of both funds and is as follows: 0.15% of the first
$500 million, 0.125% of the next $500 million, 0.10% of the next $1 billion, and
0.075% of such combined net assets in excess of $2 billion. The fee is allocated
between the two Funds based on their relative average net assets. The
Distributor voluntarily waived a portion of its 12b-1 fee for the Class I Shares
of the Money Market Fund so that the Fund paid 0.05% of average daily net assets
for the year ended October 31, 2007. The Money Market Fund distribution fee
waiver amounted to $146,070 for Class I Shares for the year ended October 31,
2007.
The distribution fee rate for the Money Market Fund Class D Shares is 0.60% of
average daily net assets. The Distributor voluntarily waived a portion of the
12b-1 fee for the Class D Shares of the Money Market Fund so that the Fund paid
0.55% of average daily net assets from December 18, 2006 to October 31, 2007.
Prior to December 18, 2006 the Distributor voluntarily waived a portion of its
fee so that the Fund paid 0.50% of average daily net assets. The Money Market
Fund Class D Shares distribution fee waiver amounted to $25,098 for the year
ended October 31, 2007.
The distribution fee rate for each of the Ultra Short Mortgage Fund and the
Ultra Short Fund, computed separately, is 0.25% of average daily net assets. The
Distributor voluntarily waived a portion of its fee so that the Ultra Short
Mortgage Fund and the Ultra Short Fund paid 0.15% of average daily net assets
for the year ended October 31, 2007.
The distribution fee rate for each of the Intermediate Mortgage Fund and the
U.S. Government Mortgage Fund, computed separately, is as follows: 0.15% of the
first $500 million, 0.125% of the next $500 million, 0.10% of the next $500
million, and 0.075% of such net assets in excess of $1.5 billion.
The distribution fee rate for the Large Cap Equity Fund is 0.25% of average
daily net assets. The Distributor waived a portion of its fee so that the Large
Cap Equity Fund paid 0.15% of average daily net assets for the year ended
October 31, 2007.
Citi Fund Services Ohio, Inc. ("Citi") (formerly known as BISYS Fund Services
Ohio, Inc.), serves the Trust as administrator (the
51
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
"Administrator"), fund accountant and transfer agent (the "Transfer Agent").
Citi is a wholly-owned subsidiary of Citi Investor Services, Inc. The fee rate
for Citi's services for each of the Funds, computed separately, is as follows:
0.03% of the first $1 billion, 0.02% of the next $1 billion, and 0.01% of such
net assets in excess of $2 billion, with a minimum annual fee of $393,200 for
the Trust. Citi also receives an account based fee and other servicing expenses.
Under a Compliance Services Agreement between the Funds' and Citi (the "CCO
Agreement"), Citi makes an employee available to serve as the Funds' Chief
Compliance Officer (the "CCO"). Under the CCO Agreement, Citi also provides
infrastructure and support in implementing the written policies and procedures
comprising the Funds' compliance program, including support services to the CCO.
For the services provided under the CCO Agreement, the Funds paid Citi $128,250
for the year ended October 31, 2007, plus certain out of pocket expenses. Citi
pays the salary and other compensation earned by any such individuals as
employees of Citi.
C. Transactions in shares of the Trust for the year ended October 31, 2006 and
the year ended October 31, 2007 were as follows, and for the year ended December
31, 2006 and the ten months ended October 31, 2007 for the Large Cap Equity
fund:
<Table>
<Caption>
- ----------------------------------------------------------------------------------------------------
MONEY MARKET FUND
------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 2007 OCTOBER 31, 2006
- ----------------------------------------------------------------------------------------------------
Share transactions Class I:
Sale of shares............................................ 697,711,159 547,595,058
Shares issued to stockholders in reinvestment dividends... 5,311,340 3,304,340
Shares repurchased........................................ (681,323,464) (522,189,701)
------------ ------------
Net increase.............................................. 21,699,035 28,709,697
Shares Outstanding
Beginning of year...................................... 110,032,329 81,322,632
------------ ------------
End of year............................................ 131,731,364 110,032,329
============ ============
Share transactions Class D:
Sale of shares............................................ 515,475,480 584,490,918
Shares issued to stockholders in reinvestment dividends... 1,436,058 954,298
Shares repurchased........................................ (489,935,433) (592,886,171)
------------ ------------
Net increase (decrease)................................... 26,976,105 (7,440,955)
Shares Outstanding
Beginning of year...................................... 31,181,729 38,622,684
------------ ------------
End of year............................................ 58,157,834 31,181,729
============ ============
- ----------------------------------------------------------------------------------------------------
</Table>
52
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
<Table>
<Caption>
ULTRA SHORT MORTGAGE FUND ULTRA SHORT FUND
-------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, 2007 OCTOBER 31, 2006 OCTOBER 31, 2007 OCTOBER 31, 2006
- ---------------------------------------------------------------------------------------------------------------
Share transactions:
Sale of shares.................... 13,894,313 10,126,974 2,173,719 3,275,549
Shares issued to stockholders in
reinvestment dividends......... 4,734,757 4,566,382 312,516 380,569
Shares repurchased................ (33,719,934) (53,798,732) (3,199,896) (6,441,292)
----------- ----------- ---------- ----------
Net decrease...................... (15,090,864) (39,105,376) (713,661) (2,785,174)
Shares Outstanding
Beginning of year.............. 236,755,512 275,860,888 21,012,024 23,797,198
----------- ----------- ---------- ----------
End of year.................... 221,664,648 236,755,512 20,298,363 21,012,024
=========== =========== ========== ==========
- ---------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
- ---------------------------------------------------------------------------------------------------------------
SHORT U.S. GOVERNMENT FUND INTERMEDIATE MORTGAGE FUND
-------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, 2007 OCTOBER 31, 2006 OCTOBER 31, 2007 OCTOBER 31, 2006
- ---------------------------------------------------------------------------------------------------------------
Share transactions:
Sale of shares.................... 142,766 2,298,508 27,209 1,083
Shares issued to stockholders in
reinvestment dividends......... 432,501 370,135 430,733 421,130
Shares repurchased................ (3,405,494) (2,085,622) (3,114,348) (2,496,819)
---------- ---------- ---------- ----------
Net increase (decrease)........... (2,830,227) 583,021 (2,656,406) (2,074,606)
Shares Outstanding
Beginning of year.............. 15,652,349 15,069,328 27,887,191 29,961,797
---------- ---------- ---------- ----------
End of year.................... 12,822,122 15,652,349 25,230,785 27,887,191
========== ========== ========== ==========
- ---------------------------------------------------------------------------------------------------------------
</Table>
53
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
<Table>
<Caption>
U.S. GOVERNMENT MORTGAGE FUND LARGE CAP EQUITY FUND
--------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED TEN MONTHS ENDED YEAR ENDED
OCTOBER 31, 2007 OCTOBER 31, 2006 OCTOBER 31, 2007 DECEMBER 31, 2006
- --------------------------------------------------------------------------------------------------------------
Share transactions:
Sale of shares............ 12,377 22,427 6,272,726 4,516
Shares issued to
stockholders in
reinvestment
dividends.............. 407,848 510,616 16,232 23,123
Shares repurchased........ (3,606,094) (709,053) (1,254,220) (161,107)
---------- ---------- ---------- --------
Net increase (decrease)... (3,185,869) (176,010) 5,034,738 (133,468)
Shares Outstanding
Beginning of year...... 16,118,955 16,294,965 452,609 586,077
---------- ---------- ---------- --------
End of year............ 12,933,086 16,118,955 5,487,347 452,609
========== ========== ========== ========
- --------------------------------------------------------------------------------------------------------------
</Table>
D. At October 31, 2007, Net Assets consisted of the following:
<Table>
<Caption>
- -----------------------------------------------------------------------------------------------------------------------------------
SHORT U.S. INTERMEDIATE U.S. GOVERNMENT
MONEY MARKET ULTRA SHORT ULTRA SHORT GOVERNMENT MORTGAGE MORTGAGE LARGE CAP
FUND MORTGAGE FUND FUND FUND FUND FUND EQUITY FUND
- -----------------------------------------------------------------------------------------------------------------------------------
Capital................ $190,073,840 $2,238,194,016 $204,913,155 $138,207,780 $248,058,518 $141,093,788 $34,738,993
Undistributed net
investment income.... -- 239,116 81,378 945 8,699 (22,340) 241,840
Accumulated net
realized
gain/(loss).......... (196,593) (97,782,423) (9,227,289) (5,231,825) (13,316,373) (10,046,793) 5,389,677
Net unrealized
appreciation/
(depreciation) of
investments.......... -- (8,761,592) (606,526) (250,234) (4,674,538) 45,140 17,090,377
------------ -------------- ------------ ------------ ------------ ------------ -----------
Net Assets............. $189,877,247 $2,131,889,117 $195,160,718 $132,726,666 $230,076,306 $131,069,795 $57,460,887
============ ============== ============ ============ ============ ============ ===========
- -----------------------------------------------------------------------------------------------------------------------------------
</Table>
E. At October 31, 2007, liabilities for the Funds included:
54
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
<Table>
<Caption>
- ----------------------------------------------------------------------------------------------------------------------------------
SHORT U.S. INTERMEDIATE U.S. GOVERNMENT
MONEY MARKET ULTRA SHORT ULTRA SHORT GOVERNMENT MORTGAGE MORTGAGE LARGE CAP
FUND MORTGAGE FUND FUND FUND FUND FUND EQUITY FUND
- ----------------------------------------------------------------------------------------------------------------------------------
Investment advisory fee
payable................. $ -- $ 451,574 $ 41,683 $ 28,084 $ 49,258 $ 27,828 $ 33,045
Administration fee
payable................. 1,118 4,834 1,127 763 1,338 758 --
Distribution fee
payable................. 19,219 270,946 25,010 16,851 29,555 16,697 7,363
Fund accounting fee
payable................. -- 11,847 2,001 2,056 3,603 2,951 484
Transfer agent fee
payable................. 12,367 30,412 3,317 2,464 1,503 1,075 15,457
Chief Compliance Officer
payable................. 6,187 83,718 7,587 5,400 9,250 5,403 10,937
Distributions payable..... 204,547 5,735,418 696,516 195,073 772,279 249,045 --
Capital shares redeemed
payable................. -- 2,385,737 172,527 -- -- -- 446,008
Other liabilities......... 31,182 181,318 23,369 17,665 25,608 16,666 7,917
- ----------------------------------------------------------------------------------------------------------------------------------
</Table>
F. For the periods ended October 31, 2007, purchases and sales of securities,
other than short-term investments and U.S. Government securities, were as
follows:
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------------------------
SHORT U.S. INTERMEDIATE U.S. GOVERNMENT LARGE CAP
ULTRA SHORT ULTRA SHORT GOVERNMENT MORTGAGE MORTGAGE EQUITY
MORTGAGE FUND FUND FUND FUND FUND FUND*
- ------------------------------------------------------------------------------------------------------------------------------
Purchases..................... $1,189,069,999 $65,641,438 $51,376,183 $ 95,776,891 $52,883,541 $ 7,484,275
Sales......................... 1,461,292,818 86,111,397 85,129,301 117,338,149 88,598,233 19,651,279
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
* 10 months of operations for the Large Cap Equity Fund.
For the year ended October 31, 2007, purchases and sales of U.S. Government
securities, other than short-term investments, were as follows:
<Table>
<Caption>
- -----------------------------------------------------------------------------------------------------------------------------
SHORT U.S. INTERMEDIATE U.S. GOVERNMENT
ULTRA SHORT ULTRA SHORT GOVERNMENT MORTGAGE MORTGAGE
MORTGAGE FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------
Purchases.................................... $723,752,427 $52,952,862 $51,376,183 $15,607,266 $44,376,893
Sales........................................ 685,677,320 51,599,931 84,089,903 82,258,975 77,095,432
- -----------------------------------------------------------------------------------------------------------------------------
</Table>
G. During November 2005, the staff of the Financial Accounting Standards Board
issued their FASB Staff Position (FSP) Nos. FAS 115-1 and FAS 124-1 position
titled "The Meaning of Other-Than-Temporary Impairment and Its Application to
Certain Investments." Although the FSP is not expected to have an impact on the
Funds' financial statements, the guidance could affect the Funds' shareholders
financial reposting of their investments in the Funds (other than the Money
Market Fund). It is unclear at this how this guidance may impact investor
decisions surrounding the purchase or retention of investments in these Funds.
55
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
H. FEDERAL INCOME TAX INFORMATION:
The tax characteristics of distributions paid to shareholders during the
fiscal years ended October 31, 2007 and 2006 were as follows:
<Table>
<Caption>
- --------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS PAID FROM TOTAL TAXABLE TOTAL DISTRIBUTIONS
2007 ORDINARY INCOME DISTRIBUTIONS PAID*
- --------------------------------------------------------------------------------------------------------------------------
Money Market Fund.......................................... $ 9,104,277 $ 9,104,277 $ 9,104,277
Ultra Short Mortgage Fund.................................. 115,492,750 115,492,750 115,492,750
Ultra Short Fund........................................... 10,705,581 10,705,581 10,705,581
Short U.S. Government Fund................................. 7,425,876 7,425,876 7,425,876
Intermediate Mortgage Fund................................. 12,846,052 12,846,052 12,846,052
U.S. Government Mortgage Fund.............................. 7,469,556 7,469,556 7,469,556
- --------------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
DISTRIBUTIONS PAID FROM TOTAL TAXABLE TOTAL DISTRIBUTIONS
2006 ORDINARY INCOME DISTRIBUTIONS PAID*
- --------------------------------------------------------------------------------------------------------------------------
Money Market Fund.......................................... $ 5,237,006 $ 5,237,006 $ 5,237,006
Ultra Short Mortgage Fund.................................. 108,442,120 108,442,120 108,442,120
Ultra Short Fund........................................... 10,338,059 10,338,059 10,338,059
Short U.S. Government Fund................................. 6,766,172 6,766,172 6,766,172
Intermediate Mortgage Fund................................. 12,367,938 12,367,938 12,367,938
U.S. Government Mortgage Fund.............................. 8,247,024 8,247,024 8,247,024
- --------------------------------------------------------------------------------------------------------------------------
</Table>
* Total distributions paid differ from the Statement of Changes in Net Assets
because dividends are recognized when actually paid for federal income tax
purposes.
The tax characteristics of distributions paid to shareholders during the
periods ended October 31, 2007 and December 31, 2006, for the Large Cap Equity
Fund were as follows:
<Table>
<Caption>
- -------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS PAID FROM NET LONG TOTAL TAXABLE TAX RETURN OF TOTAL DISTRIBUTIONS
2007 ORDINARY INCOME TERM GAINS DISTRIBUTIONS CAPITAL PAID
- -------------------------------------------------------------------------------------------------------------------
Large Cap Equity Fund.. $285,078 $-- $285,078 $-- $285,078
- -------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
- -------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS PAID FROM NET LONG TOTAL TAXABLE TAX RETURN OF TOTAL DISTRIBUTIONS
2006 ORDINARY INCOME TERM GAINS DISTRIBUTIONS CAPITAL PAID
- -------------------------------------------------------------------------------------------------------------------
Large Cap Equity Fund.. $928,638 $6,088,743 $7,017,381 $3,839 $7,021,220
- -------------------------------------------------------------------------------------------------------------------
</Table>
At October 31, 2007, the cost, gross unrealized appreciation and gross
unrealized depreciation on securities, for federal income tax purposes, were as
follows:
56
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
<Table>
<Caption>
- ---------------------------------------------------------------------------------------------------------------------------
NET UNREALIZED
TAX UNREALIZED TAX UNREALIZED APPRECIATION/
TAX COST APPRECIATION DEPRECIATION (DEPRECIATION)
- ---------------------------------------------------------------------------------------------------------------------------
Money Market Fund.................................... $ 190,041,000 $ -- $ -- $ --
Ultra Short Mortgage Fund............................ 2,137,562,183 6,312,072 (15,073,664) (8,761,592)
Ultra Short Fund..................................... 195,766,504 689,382 (1,295,908) (606,526)
Short U.S. Government Fund........................... 132,448,885 226,368 (476,602) (250,234)
Intermediate Mortgage Fund........................... 234,675,509 410,347 (5,084,885) (4,674,538)
U.S. Government Mortgage Fund........................ 130,794,118 728,946 (683,806) 45,140
Large Cap Equity Fund................................ 40,733,143 17,972,551 (882,174) 17,090,377
- ---------------------------------------------------------------------------------------------------------------------------
</Table>
As of October 31, 2007, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
- --------------------------------------------------------------------------------
<Table>
<Caption>
UNDISTRIBUTED
UNDISTRIBUTED LONG TERM ACCUMULATED UNREALIZED
ORDINARY CAPITAL ACCUMULATED DISTRIBUTIONS CAPITAL AND APPRECIATION/
INCOME GAINS EARNINGS PAYABLE OTHER LOSSES** (DEPRECIATION)
- -----------------------------------------------------------------------------------------------------------------------
Money Market Fund.... $ 753,694 -- $ 753,694 $ (753,694) $ (196,593) $ --
Ultra Short Mortgage
Fund................ 9,579,993 -- 9,579,993 (9,340,877) (97,782,423) (8,761,592)
Ultra Short Fund..... 981,691 -- 981,691 (900,313) (9,227,289) (606,526)
Short U.S. Government
Fund................ 548,665 -- 548,665 (547,720) (5,231,825) (250,234)
Intermediate Mortgage
Fund................ 981,593 -- 981,593 (972,894) (13,316,373) (4,674,538)
U.S. Government
Mortgage Fund....... 502,183 -- 502,183 (524,523) (10,046,793) 45,140
Large Cap Equity
Fund................ 241,840 5,389,677 5,631,517 -- -- 17,090,377
- -----------------------------------------------------------------------------------------------------------------------
<Caption>
TOTAL
ACCUMULATED
EARNINGS (DEFICIT)
- --------------------- ------------------
Money Market Fund.... $ (196,593)
Ultra Short Mortgage
Fund................ (106,304,899)
Ultra Short Fund..... (9,752,437)
Short U.S. Government
Fund................ (5,481,114)
Intermediate Mortgage
Fund................ (17,982,212)
U.S. Government
Mortgage Fund....... (10,023,993)
Large Cap Equity
Fund................ 22,721,894
- ----------------------------------------------------------------------------------
</Table>
** For federal income tax purposes at October 31, 2007, the following Funds
had capital loss carry-forwards. All losses are available to offset future
realized capital gains, if any.
57
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2007
- --------------------------------------------------------------------------------
At October 31, 2007, the following Funds had capital loss carry-forwards
available to offset future net capital gains through the indicated expiration
dates:
- --------------------------------------------------------------------------------
<Table>
<Caption>
FUND AMOUNT EXPIRES AMOUNT EXPIRES
- ----------------------------------------------------------------------------------------------------
Money Market Fund.................................... $ 14,744 2008 $ 407 2013
Money Market Fund.................................... 181,035 2011 407 2015
Ultra Short Mortgage Fund............................ 1,824,665 2008 19,172,685 2013
Ultra Short Mortgage Fund............................ 2,995,058 2010 13,969,341 2014
Ultra Short Mortgage Fund............................ 33,378,700 2011 1,808,482 2015
Ultra Short Mortgage Fund............................ 24,633,492 2012
Ultra Short Fund..................................... 1,342,312 2010 1,507,357 2013
Ultra Short Fund..................................... 1,849,300 2011 1,784,218 2014
Ultra Short Fund..................................... 1,616,100 2012 1,128,002 2015
Short U.S. Government Fund........................... 1,193,651 2008 1,805,629 2013
Short U.S. Government Fund........................... 236,551 2011 880,563 2014
Short U.S. Government Fund........................... 757,854 2012 357,577 2015
Intermediate Mortgage Fund........................... 2,029,049 2008 1,821,864 2013
Intermediate Mortgage Fund........................... 312,894 2010 2,863,116 2014
Intermediate Mortgage Fund........................... 3,013,622 2011 1,013,863 2015
Intermediate Mortgage Fund........................... 2,261,965 2012
U.S. Government Mortgage Fund........................ 2,276,740 2008 2,721,813 2012
U.S. Government Mortgage Fund........................ 181,530 2010 3,057,928 2014
U.S. Government Mortgage Fund........................ 1,808,782 2011
- ----------------------------------------------------------------------------------------------------
</Table>
Dividends and distributions are determined in accordance with federal income
tax regulations and may differ from accounting principles generally accepted in
the United States of America. These differences are primarily due to differing
treatments for deferral of losses on wash sales and net capital losses incurred
after October 31 and within the taxable year ("Post-October losses). To the
extent these difference are permanent, adjustments are made to the appropriate
equity accounts in the period that these differences arise.
58
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
TO THE TRUSTEES AND SHAREHOLDERS OF
THE ASSET MANAGEMENT FUND
In our opinion, the accompanying statements of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
the Money Market Fund, Ultra Short Mortgage Fund, Ultra Short Fund, Short U.S.
Government Fund, Intermediate Mortgage Fund, U.S. Government Mortgage Fund, and
the Large Cap Equity Fund (collectively referred to as the "Funds") at October
31, 2007, the results of each of their operations for the year or period then
ended, the changes in each of their net assets for the two years then ended (for
the Large Cap Equity Fund for the period ended October 31, 2007) and the
financial highlights for each of the five years then ended (for the Large Cap
Equity Fund for the period ended October 31, 2007), 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 Funds' 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 the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31, 2007 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion. The statement of operations of the Large Cap Equity Fund for the
year ended December 31, 2006, the statements of changes in net assets of the
Large Cap Equity Fund for the years ended December 31, 2006 and 2005 and the
financial highlights of the Large Cap Equity Fund for the five years ended
December 31, 2006 were audited by other auditors, whose report dated February
20, 2007 expressed an unqualified opinion on those statements.
PricewaterhouseCoopers LLP
Columbus, Ohio
December 27, 2007
59
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
(UNAUDITED)
TRUSTEES AND OFFICERS OF ASSET MANAGEMENT FUND
- --------------------------------------------------------------------------------
<Table>
<Caption>
NUMBER OF
POSITION(S) HELD WITH PORTFOLIOS
TRUST, LENGTH OF TIME IN FUND OTHER
SERVED AND TERM OF PRINCIPAL OCCUPATION(S) COMPLEX DIRECTORSHIPS
NAME, ADDRESS AND AGE OFFICE DURING PAST 5 YEARS OVERSEEN HELD
- -----------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
Richard M. Amis......... Trustee since 1997. President, First Federal 7 None
630 Clarksville Street Indefinite Term of Office Community Bank since 1984;
Paris, TX 75460 Director, First Financial Trust
Age: 56 Company from 1993 to 2006; and
Chairman, Texas Savings and
Community Bankers Association
from 1997 to 1998.
David F. Holland........ Trustee since 1993 and Retired; Chairman of the Board, 7 None
17 Ledgewood Circle from 1988 to 1989. Chief Executive Officer and
Topsfield, MA 01983 Indefinite Term of Office President, BostonFed Bancorp Inc.
Age: 65 from 1995 to 2005; Chairman of
the Board from 1989 to 2005 and
Chief Executive Officer from 1986
to 2005, Boston Federal Savings
Bank; Consultant, TD Banknorth
from 2005 to 2007.
Gerald J. Levy.......... Vice Chairman of the Chairman since 1984 and Director 7 FISERV, Inc.;
4000 W. Brown Deer Road Board since 1997 and since 1963, Guaranty Bank, F.S.B. Guaranty Financial;
Milwaukee, WI 53209 Trustee since 1982. Federal Home Loan
Age: 74 Indefinite Term of Office Bank of Chicago
William A. McKenna, Trustee since 2002. Retired; Chairman and Chief 7 RSGroup Trust
Jr.................... Indefinite Term of Office Executive Officer from 1992 to Company;
42 Dorothy Grace Road 2004 and President from 1985 to RetirementSystem
Saugerties, NY 12477 2001, Ridgewood Savings Bank. Group, Inc.; Irish
Age: 70 Educational
Development
Foundation, Inc.; The
Catholic University
of America; RSI
Retirement Trust; St.
Vincent's Services;
Boys Hope Girls Hope;
Calvary Hospital
Fund; St. Aloysius
School; American
Institute of
Certified Public
Accountants;
TransVideo
Communications, Inc.
</Table>
60
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
(UNAUDITED)
TRUSTEES AND OFFICERS OF ASSET MANAGEMENT FUND (CONTINUED)
<Table>
<Caption>
NUMBER OF
POSITION(S) HELD WITH PORTFOLIOS
TRUST, LENGTH OF TIME IN FUND OTHER
SERVED AND TERM OF PRINCIPAL OCCUPATION(S) COMPLEX DIRECTORSHIPS
NAME, ADDRESS AND AGE OFFICE DURING PAST 5 YEARS OVERSEEN HELD
- -----------------------------------------------------------------------------------------------------------------------------
Christopher M. Owen..... Trustee since 2005. President and Chief Executive 7 Meriwest Mortgage LLC
5615 Chesbro Avenue Indefinite Term of Office Officer, Meriwest Credit Union
San Jose, CA 95123 since 1995.
Age: 60
Maria F. Ramirez........ Trustee since 2005. President and Chief Executive 7 Schroder Hedge Funds
One Liberty Plaza, Indefinite Term of Office Officer, Maria Fiorini Ramirez Bermuda; Pace
46th Floor Inc. (a global economic and University; Sovereign
New York, NY 10006 financial consulting firm) since Bank; Security Mutual
Age: 59 1992. Insurance Company
INTERESTED TRUSTEES(1)
Rodger D. Shay(2)....... Chairman of the Board Chairman and Director of Shay 7 Shay Assets
1000 Brickell Avenue since 1997 and Trustee Investment Services, Inc. and Management, Inc.
Miami, FL 33131 since 1993 and from 1985 Shay Financial Services, Inc.
Age: 70 to 1990. Indefinite Term since 1997.
of Office
Rodger D. Shay, Trustee since 2002. President and Chief Executive 7 Family Financial
Jr.(2)................ Indefinite Term of Office Officer of Shay Financial Holdings, LLC; First
230 West Monroe Street President since 2005. Services, Inc. since 1997; Financial Bank and
Suite 2810 Term of Office Expires President, Shay Assets Trust
Chicago, IL 60606 2008 Management, Inc. since 2005.
Age: 47
OFFICERS
Robert T. Podraza....... Vice President and Vice President, Shay Investment 7 None
1000 Brickell Avenue Assistant Treasurer since Services, Inc. since 1990; Vice
Miami, FL 33131 1998. Term of Office President and Chief Compliance
Age: 62 Expires 2008 Officer, Shay Financial Services,
Inc. since 1990 and 1997,
respectively; Vice President,
Shay Assets Management, Inc.
since 1990.
Trent M. Statczar....... Treasurer since 2002. Financial Services Vice President 7 None
3435 Stelzer Road Term of Office Expires since 2003 and prior thereto
Columbus, OH 43219 2008 Director and Financial Services
Age: 36 Manager, Citi Investment Services
Ohio, Inc.
Daniel K. Ellenwood..... Secretary since 1998. Chief Compliance Officer since 7 None
230 West Monroe Street Term of Office Expires 2004 and prior thereto Assistant
Suite 2810 2008 Vice President, Operations/
Chicago, IL 60606 Compliance Officer and Operations
Age: 37 Manager, Shay Assets Management,
Inc.
</Table>
61
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
(UNAUDITED)
TRUSTEES AND OFFICERS OF ASSET MANAGEMENT FUND (CONTINUED)
<Table>
<Caption>
NUMBER OF
POSITION(S) HELD WITH PORTFOLIOS
TRUST, LENGTH OF TIME IN FUND OTHER
SERVED AND TERM OF PRINCIPAL OCCUPATION(S) COMPLEX DIRECTORSHIPS
NAME, ADDRESS AND AGE OFFICE DURING PAST 5 YEARS OVERSEEN HELD
- -----------------------------------------------------------------------------------------------------------------------------
Frederick J. Schmidt.... Chief Compliance Officer Senior Vice President and Chief 7 None
1 RexCorp Plaza since 2004. Term of Compliance Officer, CCO Services
Uniondale, NY 11556 Office Expires 2008 of Citi Fund Services Ohio, Inc.
Age: 48 since 2004; Chief Compliance
Officer of two other investment
companies or fund complexes for
which CCO Services of Citi Fund
Services Ohio, Inc. provides
compliance services since 2004;
President, FJS Associates
(regulatory consulting firm) from
2002 to 2004; Vice President
Credit Agricole Asset Management,
U.S. from 1987 to 2002.
Christine A. Cwik....... Assistant Secretary since Executive Secretary, Shay Assets 7 None
230 West Monroe Street 1999. Term of Office Management, Inc. since 1999.
Suite 2810 Expires 2008
Chicago, IL 60606
Age: 57
Velvet R. Regan......... Assistant Secretary since Assistant Counsel, Citi Fund 7 None
100 Summer Street Suite 2007. Term of Office Services Ohio, Inc. since 2006;
1500 Boston, MA 02110 Expires 2008 Associate, Gilmartin Magence
Age: 28 Camiel & Ross LLP, 2006; Tax
Administrator, State Street
Corporation from 2000 to 2002.
</Table>
- --------------------------------------------------------------------------------
1 A trustee is an "interested person" of the Trust under the 1940 Act because
he holds certain positions with the Trust's Distributor and/or Investment
Adviser and because of his financial interest in Shay Investment Services,
Inc., parent company of the Trust's Investment Adviser, Shay Assets
Management, Inc., and Distributor, Shay Financial Services, Inc.
2 Rodger D. Shay, Jr., Trustee, is the son of Rodger D. Shay, Chairman of the
Board of Trustees and Trustee.
62
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
ADDITIONAL INFORMATION
OCTOBER 31, 2007 (UNAUDITED)
A. SECURITY ALLOCATION:
MONEY MARKET FUND
- --------------------------------------------------------------------------------
<Table>
<Caption>
PERCENTAGE OF
SECURITY ALLOCATION NET ASSETS
- ---------------------------------------------------------------------------
Repurchase Agreements....................................... 90.6%
-----
Certificates of Deposit..................................... 9.5%
-----
Total....................................................... 100.1%
=====
</Table>
- --------------------------------------------------------------------------------
ULTRA SHORT MORTGAGE FUND
- --------------------------------------------------------------------------------
<Table>
<Caption>
PERCENTAGE OF
SECURITY ALLOCATION NET ASSETS
- ---------------------------------------------------------------------------
Adjustable Rate Mortgage-Related Securities................. 71.4%
Fixed Rate Mortgage-Related Securities...................... 19.0%
Repurchase Agreements....................................... 9.5%
-----
Total....................................................... 99.9%
=====
</Table>
- --------------------------------------------------------------------------------
ULTRA SHORT FUND
- --------------------------------------------------------------------------------
<Table>
<Caption>
PERCENTAGE OF
SECURITY ALLOCATION NET ASSETS
- ---------------------------------------------------------------------------
Adjustable Rate Mortgage-Related Securities................. 76.6%
Fixed Rate Mortgage-Related Securities...................... 13.1%
Repurchase Agreements....................................... 10.3%
-----
Total....................................................... 100.0%
=====
</Table>
- --------------------------------------------------------------------------------
SHORT U.S. GOVERNMENT FUND
- --------------------------------------------------------------------------------
<Table>
<Caption>
PERCENTAGE OF
SECURITY ALLOCATION NET ASSETS
- ---------------------------------------------------------------------------
Adjustable Rate Mortgage-Related Securities................. 46.7%
Fixed Rate Mortgage-Related Securities...................... 26.8%
Repurchase Agreements....................................... 20.0%
U.S. Treasury Obligations................................... 6.1%
-----
Total....................................................... 99.6%
=====
</Table>
- --------------------------------------------------------------------------------
63
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
ADDITIONAL INFORMATION (CONTINUED)
OCTOBER 31, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
INTERMEDIATE MORTGAGE FUND
- --------------------------------------------------------------------------------
<Table>
<Caption>
PERCENTAGE OF
SECURITY ALLOCATION NET ASSETS
- ---------------------------------------------------------------------------
Adjustable Rate Mortgage-Related Securities................. 51.5%
Fixed Rate Mortgage-Related Securities...................... 47.2%
Repurchase Agreements....................................... 1.3%
-----
Total....................................................... 100.0%
=====
</Table>
- --------------------------------------------------------------------------------
U.S. GOVERNMENT MORTGAGE FUND
- --------------------------------------------------------------------------------
<Table>
<Caption>
PERCENTAGE OF
SECURITY ALLOCATION NET ASSETS
- ---------------------------------------------------------------------------
Fixed Rate Mortgage-Related Securities...................... 57.7%
Adjustable Rate Mortgage-Related Securities................. 37.1%
Repurchase Agreements....................................... 5.0%
-----
Total....................................................... 99.8%
=====
</Table>
- --------------------------------------------------------------------------------
LARGE CAP EQUITY FUND
- --------------------------------------------------------------------------------
<Table>
<Caption>
PERCENTAGE OF
SECURITY ALLOCATION NET ASSETS
- ---------------------------------------------------------------------------
Common Stocks............................................... 95.6%
Cash Equivalents............................................ 5.0%
-----
Total....................................................... 100.6%
=====
</Table>
B. EXPENSE COMPARISON:
As a shareholder of the Asset Management Fund, you incur two types of costs: (1)
transaction costs, including sales charges (loads) on purchases, reinvested
dividends, or other distributions; redemption fees; and exchange fees; (2)
ongoing costs, including management fees; distribution (12b-1 fees); and other
Fund expenses. This example is intended to help you understand your ongoing
costs (in dollars) of investing in the Asset Management Fund and to compare
these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period from May 1, 2007 through October 31,
2007.
ACTUAL EXPENSES
The table below provides information about actual account values and actual
expenses. You may use the information below, together with the amount you
invested, to estimate the expenses that you paid over the period. Simply divide
your account value by $1,000 (for example, an $8,600 account value divided by
$1,000 = 8.6), then multiply the result by the number in the table under the
heading entitled "Expenses Paid During Period" to estimate the expenses you paid
on your account during this period.
64
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
ADDITIONAL INFORMATION (CONTINUED)
OCTOBER 31, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<Table>
<Caption>
BEGINNING ENDING ACCOUNT EXPENSE PAID EXPENSE RATIO
ACCOUNT VALUE VALUE DURING PERIOD* DURING PERIOD**
5/1/07 10/31/07 5/1/07 - 10/31/07 5/1/07 - 10/31/07
- -----------------------------------------------------------------------------------------------------------
Money Market Fund........ Class I $1,000.00 $1,025.90 $0.61 0.12%
Class D 1,000.00 1,023.20 3.26 0.64%
Ultra Short Mortgage
Fund................... 1,000.00 1,020.50 2.39 0.47%
Ultra Short Fund......... 1,000.00 1,013.70 2.49 0.49%
Short U.S. Government
Fund................... 1,000.00 1,023.90 2.40 0.47%
Intermediate Mortgage
Fund................... 1,000.00 1,004.50 2.48 0.49%
U.S. Government Mortgage
Fund................... 1,000.00 1,017.20 2.54 0.50%
Large Cap Equity Fund.... 1,000.00 1,041.70 4.84 0.94%
</Table>
- --------------------------------------------------------------------------------
* Expenses are equal to the average account value times the Fund's annualized
expense ratio multiplied by the number of days in the most recent fiscal
half-year divided by the number of days in the fiscal year.
** Annualized
65
- --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
ADDITIONAL INFORMATION (CONTINUED)
OCTOBER 31, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below provides information about hypothetical account values and
hypothetical expenses based on each Asset Management Fund's actual expense ratio
and an assumed rate of return of 5% per year before expenses, which is not the
Fund's actual return. The hypothetical account values and expenses may not be
used to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), redemption fees, or exchange fees. Therefore, the table is
useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these
transactional costs were included, your costs would have been higher.
- --------------------------------------------------------------------------------
<Table>
<Caption>
BEGINNING ENDING ACCOUNT EXPENSE PAID EXPENSE RATIO
ACCOUNT VALUE VALUE DURING PERIOD* DURING PERIOD**
5/1/07 10/31/07 5/1/07 - 10/31/07 5/1/07 - 10/31/07
- -----------------------------------------------------------------------------------------------------------
Money Market Fund........ Class I $1,000.00 $1,024.60 $0.61 0.12%
Class D 1,000.00 1,021.98 3.26 0.64%
Ultra Short Mortgage
Fund................... 1,000.00 1,022.84 2.40 0.47%
Ultra Short Fund......... 1,000.00 1,022.74 2.50 0.49%
Short U.S. Government
Fund................... 1,000.00 1,022.84 2.40 0.47%
Intermediate Mortgage
Fund................... 1,000.00 1,022.74 2.50 0.49%
U.S. Government Mortgage
Fund................... 1,000.00 1,022.68 2.55 0.50%
Large Cap Equity Fund.... 1,000.00 1,020.47 4.79 0.94%
</Table>
- --------------------------------------------------------------------------------
* Expenses are equal to the average account value times the Fund's annualized
expense ratio multiplied by the number of days in the most recent fiscal
half-year divided by the number of days in the fiscal year.
** Annualized
C. OTHER INFORMATION:
A description of the policies and procedures that the Funds use to determine
how to vote proxies relating to portfolio securities is available (i) without
charge, upon request, by calling 800-527-3713; and (ii) on the Securities and
Exchange Commission's website at http://www.sec.gov.
Information regarding how the Funds voted proxies relating to portfolio
securities is available (i) without charge, upon request, by calling
800-527-3713; and (ii) on the Securities and Exchange Commission's website at
http://www.sec.gov.
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ASSET MANAGEMENT FUND
ADDITIONAL INFORMATION (CONTINUED)
OCTOBER 31, 2007 (UNAUDITED)
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A complete schedules of each Fund's portfolio holdings for the first and third
fiscal quarter of each fiscal year is filed with the Securities and Exchange
Commission of Form N-Q and is available on the Securities and Exchange
Commission's website at http://www.sec.gov. In addition, the schedules may be
reviewed and copied at the Securities and Exchange Commission's Public Reference
Room in Washington, D.C. Information on the operation of the Public Reference
Room may be obtained by calling 1-800-SEC-0330.
The Statement of Additional Information includes additional information about
Trustees and is available, without charge, upon request, by calling
800-527-3713.
67
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DISTRIBUTOR
Shay Financial Services, Inc.
230 West Monroe Street
Chicago, IL 60606
INVESTMENT ADVISER
Shay Assets Management, Inc.
230 West Monroe Street
Chicago, IL 60606
ADMINISTRATOR AND TRANSFER AGENT
Citi Fund Services Ohio, Inc.
3435 Stelzer Road
Columbus, OH 43219
LEGAL COUNSEL
Vedder, Price, Kaufman & Kammholz, P.C.
222 North LaSalle Street
Chicago, IL 60601
CUSTODIAN
The Bank of New York
One Wall Street
New York, NY 10286
INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
PricewaterhouseCoopers LLP
100 East Broad Street, Suite 2100
Columbus, OH 43215
ITEM 2. CODE OF ETHICS.
(a) THE REGISTRANT HAS ADOPTED A CODE OF ETHICS THAT APPLIES TO THE
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICER, PRINCIPAL FINANCIAL OFFICER,
PRINCIPAL ACCOUNTING OFFICER OR CONTROLLER, OR PERSONS PERFORMING SIMILAR
FUNCTIONS. THIS CODE OF ETHICS IS INCLUDED AS AN EXHIBIT.
(b) DURING THE PERIOD COVERED BY THE REPORT, WITH RESPECT TO THE
REGISTRANT'S CODE OF ETHICS THAT APPLIES TO ITS PRINCIPAL EXECUTIVE
OFFICER, PRINCIPAL FINANCIAL OFFICER, PRINCIPAL ACCOUNTING OFFICER OR
CONTROLLER, OR PERSONS PERFORMING SIMILAR FUNCTIONS; THERE HAVE BEEN NO
AMENDMENTS TO, NOR ANY WAIVERS GRANTED FROM, A PROVISION THAT RELATES TO
ANY ELEMENT OF THE CODE OF ETHICS DEFINITION ENUMERATED IN PARAGRAPH (b) OF
THIS ITEM 2.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
3(a)(1) THE REGISTRANT'S BOARD OF DIRECTORS HAS DETERMINED THAT THE REGISTRANT
HAS AT LEAST ONE AUDIT COMMITTEE FINANCIAL EXPERT SERVING ON ITS AUDIT
COMMITTEE.
3(a)(2) THE AUDIT COMMITTEE FINANCIAL EXPERT IS DAVID F. HOLLAND, WHO IS
"INDEPENDENT" FOR PURPOSES OF THIS ITEM 3 OF FORM N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees
2006 -- PRICEWATERHOUSECOOPERS LLP $115,750
2007 -- PRICEWATERHOUSECOOPERS LLP $139,500
(b) Audit-Related Fees
2006 - $0
2007 - $0
(c) Tax Fees
2006 -- TAX AUDIT & RETURNS PRICEWATERHOUSECOOPERS LLP $18,900
2007 -- TAX AUDIT & RETURNS PRICEWATERHOUSECOOPERS LLP $24,000
Fees for both 2006 and 2007 relates to the preparation of federal
income and excise tax returns and review of the excise tax
calculations.
(d) All Other Fees
2006 - $0
2007 - $0
(e) (1)
Except as permitted by rule 2-01(c)(7)(i)(C) of regulation S-X the
trust's audit committee must pre-approve all audit and non-audit
services provided by the independent accountants relating to the
operations or financial reporting of the funds. Prior to the
commencement of any audit or non-audit services to a fund, the
audit committee reviews the services to determine whether they are
appropriate and permissible under applicable law.
(2)
None of the services summarized in (b)-(d), above, were approved by
the audit committee pursuant to rule 2-01(c)(7)(i)(C) of regulation
S-X.
(f)
0% FOR 2006 AND 2007.
(g)
$0 FOR 2006 AND 2007.
(h)
THERE WERE NO NON-AUDIT SERVICES BILLED FOR 2006 AND 2007.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
NOT APPLICABLE.
ITEM 6. SCHEDULE OF INVESTMENTS.
NOT APPLICABLE.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
NOT APPLICABLE.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
NOT APPLICABLE.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
NOT APPLICABLE.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
NOT APPLICABLE.
ITEM 11. CONTROLS AND PROCEDURES.
(a) THE REGISTRANT'S PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER
HAVE CONCLUDED, BASED ON THEIR EVALUATION OF THE REGISTRANT'S DISCLOSURE
CONTROLS AND PROCEDURES AS CONDUCTED WITHIN 90 DAYS OF THE FILING DATE OF THIS
REPORT, THAT THESE DISCLOSURE CONTROLS AND PROCEDURES ARE ADEQUATELY DESIGNED
AND ARE OPERATING EFFECTIVELY TO ENSURE THAT INFORMATION REQUIRED TO BE
DISCLOSED BY THE REGISTRANT ON FORM N-CSR IS RECORDED, PROCESSED, SUMMARIZED AND
REPORTED WITHIN THE TIME PERIODS SPECIFIED IN THE SECURITIES AND EXCHANGE
COMMISSION'S RULES AND FORMS.
(b) THERE WERE NO CHANGES IN THE REGISTRANT'S INTERNAL CONTROL OVER FINANCIAL
REPORTING THAT OCCURRED DURING THE SECOND FISCAL QUARTER OF THE PERIOD COVERED
BY THIS REPORT THAT HAVE MATERIALLY AFFECTED OR ARE REASONABLY LIKELY TO
MATERIALLY AFFECT, THE REGISTRANT'S INTERNAL CONTROL OVER FINANCIAL REPORTING.
ITEM 12. EXHIBITS.
(a)(1)
THE CODE OF ETHICS THAT IS THE SUBJECT OF THE DISCLOSURE REQUIRED BY ITEM 2 IS
ATTACHED HERETO.
(a)(2) CERTIFICATIONS PURSUANT TO RULE 30a-2(a) ARE ATTACHED HERETO.
(a)(3) NOT APPLICABLE.
(b) CERTIFICATIONS PURSUANT TO RULE 30a-2(b) ARE FURNISHED HEREWITH.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Asset Management Fund
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By (Signature and Title)* /s/ Trent Statczar
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Trent Statczar, Treasurer
Date January 7, 2008
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Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Trent Statczar
-------------------------------------------------------
Trent Statczar, Treasurer
Date January 7, 2008
----------------------------------------
By (Signature and Title)* /s/ Rodger D. Shay, Jr.
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Rodger D. Shay, Jr., President
Date January 6, 2008
----------------------------------------
* Print the name and title of each signing officer under his or her signature.