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 811-09134
Manor Investment Funds, Inc.
(Exact name of registrant as specified in charter)
15 Chester Commons, Malvern, PA 19355
(Address of principal executive offices)
Daniel A. Morris
15 Chester Commons, Malvern, PA 19355
(Name and address of agent for service)
Registrant s telephone number, including area code: 610-722-0900
Date of fiscal year end: December 31
Date of reporting period: June 30,2005
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 if information under the clearance requirement of 44 U.S.C.
3507.
Item 1. Reports to Stockholders.
Manor
Investment Funds, Inc.
Semi-Annual Report
June 30, 2005
(Unaudited)
Fund Office:
15 Chester Commons
Malvern, PA 19355
610-722-0900 800-787-3334
www.manorfunds.com
Managed by:
Morris Capital Advisors, Inc.
Manor Investment Funds, Inc.
15 Chester Commons
Malvern, PA 19355
June 30, 2005
Dear Fellow Shareholders:
I am pleased to report that the Manor Funds had another excellent quarter.
We performed well compared to the markets and our peer groups. Fund assets
continue to grow from new shareholders and contributions from existing
shareholders.
3rd Out Of 899!
We got a call from Don in New York asking for information and account
application forms for the Funds. It was a request from outside of our market
so we asked how he heard about us. Don replied that he saw us listed in The
Wall Street Journal among the top performing mutual funds. That got our
attention, so we grabbed the Journal to check it out. There we were. Page
R12 of The Wall Street Journal s Mutual Fund Quarterly Review published on
July 5, 2005 lists the Category Kings in each mutual fund market segment.
The Manor Fund, our longest running fund, was ranked 3rd out of 899 funds
in the Large-Cap Core category, based on total return (assuming
reinvestment of dividends, and reflecting certain fee waivers currently
in effect) over the year ending June 30, 2005. Also, the Manor Fund had
the best 3-year performance among the top 10 funds listed as Category
Kings in the Large-Cap Core category based on 1-year returns. Past
performance is no guarantee of future results.
Graduate
On a warm summer night 1500 parents, siblings, friends, and relatives
gathered in the bleachers as the graduates dressed in red and gold assembled
on the field in front of us. The words Endless Possibilities emblazoned
the podium before us. It was a classic late-spring evening when the
expectation of summer and so much more hung in the hot and humid air.
Waiting in the bleachers for the program to begin gave me the opportunity
to reflect on the many changes that I witnessed over the last several years.
Youthful energy that was often scattered and diffused by an inability to
focus on anything but the present was now beginning to focus on the future.
In the range of thoughts and emotions for a parent at a time like this, I
couldn t help but focus on the impressive group of young people before me.
Their courses in the sciences and humanities were impressive. Their
accomplishments in the arts, social work, and athletics, equally so.
I kept thinking of the words, sung by Louie Armstrong, I hear babies cry,
I watch them grow, they ll learn much more than I ll ever know.
And, I think to my self, what a wonderful world. In the bleachers that
night I thought that if the future of America was reflected in the faces
and accomplishments of those young men and women that our future is
bright.
The Manor Fund
The Manor Fund generated a return of 2.90% for the quarter ended June
30, 2005, outperforming both the S&P 500 index and the Lipper Large-Cap
Core mutual fund index, 1.36% and 1.28%, respectively. The Fund also
outperformed each index for the, trailing 1-year, 3-year, and 5-year
periods, generating returns of 13.27%, 13.03%,and 1.38%, as compared to
S&P 500 index returns of 6.30%, 8.26%, and 2.36%, and Lipper Large-Cap
Core mutual fund index returns of 4.85%, 6.33%, and 3.54%. The Fund
was helped by gains in KB Home, Best Buy, Wellpoint, Vornado Realty Trust,
and Allstate.
KB Home, one of the top performers last quarter, rose despite concerns
about a speculative bubble in the housing market. Best Buy, the industry
leader in consumer electronics retailing, rebounded after a weak first
quarter. Wellpoint, another top performer last quarter, rose on strong
revenue and earnings gains. Vornado Realty Trust, an owner and manager of
real estate, rose steadily on the benefits arising from the restructuring
at Sears. Vornado owns many of the valuable Sears locations. Allstate
rose steadily throughout the quarter based on investor expectations of
stronger earnings and lower casualty claims.
The Fund was hurt by weak performance from Tyco, Norfolk Southern,
Nucor Corp., Alcan, and IBM. Tyco and Norfolk Southern are considered
cyclical economically sensitive companies, they tend to rise and fall
in relation to the strength of the economy. They declined during the
quarter because investors expect the economy to weaken as a result of
continued interest rate hikes by the Fed. Nucor and Alcan also suffered
as a result of investor reaction to Fed policy. In this case, investors
saw continued rate hikes as reducing inflationary pressure, thereby
reducing earnings at these commodity-sensitive companies. IBM suffered
from poor execution in the highly competitive technology sector.
During the quarter we sold Cardinal Health and took gains in KB Home
and Occidental Petroleum. We used the proceeds to purchase Home Depot and
Jabil Circuit. Cardinal Health has struggled to manage the changing
marketplace for pharmacy benefits managers, while Home Depot and Jabil are
two companies we believe have better growth prospects and more attractive
valuations.
The Growth Fund
The Growth Fund generated a return of 3.39% for the quarter ended June
30, 2005, outperforming the S&P 500 index return of 1.36%. The fund also
outperformed the S&P 500 index for the trailing 3-years and since inception
of the Fund, generating an annualized return of 9.68% and 0.59%, compared to
the S&P 500 return of 8.26% and 0.82%. The Fund also outperformed the
Lipper Large-Cap Growth mutual fund index for the trailing 1-year, 3-year,
5-year, and since inception generating returns of 5.71%, 9.68%, -3.29%, and
0.59%, as compared to the Lipper index returns of 3.81%, 5.63%, -9.99% and
6.39%. The Fund was helped by gains in Coach, Express Scripts,
Baker-Hughes, ETrade Financial, and Intel.
Coach reported strong earnings in the 1st quarter and raised earnings
estimates for the balance of the year. Express Scripts has effectively
managed the changing marketplace for pharmacy benefits managers. It also
reported better than expected earnings last quarter. Baker-Hughes, an oil
exploration service company, rose on the probability of increased
exploration activity given persistently high oil prices. Etrade Financial,
a leading discount broker, rose when consolidation in the industry caused
investors to bid up shares. Intel rose, after several disappointing
quarters, when a recovery in the technology sector raised investor
expectations for revenue and earnings growth.
The Fund was hurt by poor performance from Gap Inc., Ebay, Qualcomm,
FedEx Corp., and Xilinx. Gap seems to be struggling to find the right
product mix to boost sales while competing with smaller rivals. Ebay
continues to suffer from investor concerns about slowing earnings growth.
The decline in Qualcomm reflects investor concern about patent infringement
litigation with competitors. FedEx was hurt by investor concerns about
economic growth, while Xilinx reported disappointing earnings.
During the quarter we took gains in TXU Corp. because it had appreciated
beyond the upper range of our target weighting relative to the total
portfolio. We used the proceeds to purchase United Health and Genentech.
United Health provides healthcare services throughout the US, while Genentech
is a biotech company that has announced several breakthroughs in cancer
treatments and seems poised to expand the applications for these products.
The Bond Fund
The Bond Fund rose 1.75% during the quarter, underperforming both the
Lehman Intermediate Government Index and the Lipper US Government mutual
fund index (2.40% and 2.88%, respectively). The Fund portfolio is managed
to preserve principal in this volatile market, providing shareholders with
a low risk alternative to stocks. The Fund s investment portfolio of US
Treasury securities is conservative, with an average maturity for the
entire portfolio of 4.4 years, an average duration of 3.09 years, and an
average yield to maturity of 3.47%.
Think Positively
The recognition of the Manor Fund in The Wall Street Journal is an
important investing lesson. That fund struggled in its early years when
investors were fixated on the popular dot com growth companies. Despite
our frustrations with the short-term results, we stuck with our
conservative investment discipline and have been rewarded, reinforcing the
fact that it pays to think long-term rather than chase the latest fad.
Currently it seems fashionable to bash America and focus on the
negative. While it may be easy to target the problems in business, politics,
global relations and economics, I think that the positives far outweigh the
negatives. Based on the many young people that I have met, and the hope and
promise that they bring to our world, I too will remain focused on an
investment strategy that looks to a bright tomorrow.
Sincerely,
Daniel A. Morris
Manor Investment Funds, Inc.
Mutual Fund Summary Information
Manor Fund
Growth Fund
Bond Fund
Performance, Sector Allocations, & Fund Expenses
June 30, 2005
MANOR INVESTMENT FUNDS, INC.
Manor Fund
June 30, 2005
Top Holdings & Sectors
Top Company Holdings
Company % of Net Assets
Wellpoint 4.3 %
Devon Energy 4.2 %
Allstate Insurance 3.7 %
Best Buy 3.6 %
Manor Care 3.5 %
Top Industry Sectors
Industry % of Net Assets
Financial 20.8 %
Industrial 13.2 %
Consumer Disc. 13.0 %
Health Care 12.9 %
Information Tech. 11.7 %
Fund Performance
Quarter and Annualized Total Return for Periods Ending June 30, 2005
Value of $10,000 invested in the Fund
Inception (9/26/95) to present (6/30/05)
Compared to the S&P 500 and Lipper Large Cap Core Index
$32,000
$28,000
$24,000 + +
+
$20,000 # + +
#
* *
$16,000 # #
+ # *
# * *
$12,000 *
+#
*+#
*
$8,000
9/26/1995 | 8/31/1997 | 8/31/1999 | 8/31/2001 | 8/31/2003
* Manor Fund + S&P 500 # L Cap Core
Manor Fund S&P 500 Index Lipper LC Core Funds
2nd Quarter 2.90 % 1.36 % 1.28 %
1-Year 13.27 % 6.30 % 4.85 %
3-Year Annualized 13.03 % 8.26 % 6.33 %
5-Year Annualized -1.38 % -2.36 % -3.54 %
Annualized since inception
12/31/93 5.34 % 9.33 % 5.86 %
The S&P 500 Index is a capital-weighted index, representing the
aggregate market value of the common equity of 500 stocks primarily traded
on the New York Stock Exchange. The Lipper LC Core mutual fund index is an
index of mutual funds managed with a similar investment style. Both are
computed on a total return basis. The chart assumes an initial gross
investment of $10,000 on 9/25/1995 (commencement of operations). Returns
shown include the reinvestment of dividends. Past performance does not
predict future performance. Investment return and principal value will
fluctuate, so your shares at redemption may be worth more or less than
the original cost.
MANOR INVESTMENT FUNDS, INC.
Growth Fund
June 30, 2005
Top Company Holdings
Company % of Net Assets
Coach 4.4 %
Express Scripts 4.1 %
Dell Inc. 3.4 %
Capital One 3.4 %
Quest Diagnostics 3.3 %
Top Industry Sectors
Industry % of Net Assets
Consumer Disc. 22.8 %
Financial 17.8 %
Health Care 17.1 %
Information Tech. 15.8 %
Energy 6.3 %
Fund Performance
Value of $10,000 invested in the Fund
Inception (6/30/99) to present (6/30/05)
Compared to the S&P 500 and Lipper Large-Cap Growth Index
$14,000
$12,000 *
#
+
$10,000 *+# *
* +
* +
$8,000 *+ *+ +
# # #
$6,000 #
#
$4,000
6/30/1999 | 6/30/2001 | 6/30/2003 | 6/30/2005
* Growth Fund + S&P 500 # L Cap Growth
Quarter and Annualized Total Return for Periods Ending June 30, 2005
Growth Fund S&P 500 Index Lipper LCGrowth Funds
2nd Quarter 3.39 % 1.36 % 3.46 %
1-Year 5.71% 6.30 % 3.81 %
3-Year Annualized 9.68 % 8.26 % 5.63 %
5-Year Annualized -3.29 % -2.36 % -9.99 %
Annualized since inception
6/30/93 0.59 % -0.82 % -6.39 %
The S&P 500 Index is a capital-weighted index, representing the aggregate
market value of the common equity of 500 stocks primarily traded on the
New York Stock Exchange. The Lipper LC Growth mutual fund index is an
index of mutual funds managed with a similar investment style. Both are
computed on a total return basis. The chart assumes an initial gross
investment of $10,000 on 6/30/1999 (commencement of operations).
Returns shown include the reinvestment of dividends. Past performance
does not predict future performance. Investment return and principal
value will fluctuate, so your shares at redemption may be worth more or
less than the original cost.
MANOR INVESTMENT FUNDS, INC.
Asset Allocation
Manor Fund and Growth Fund
June 30, 2005
Manor Fund
Industry Sectors
Industry % of Net Assets
Financial 20.8 %
Industrial 13.2 %
Consumer Discretionary 13.0 %
Health Care 12.9 %
Information Technology 11.7 %
Energy 9.9 %
Index Securities 5.6 %
Cash Equivalents 4.1 %
Consumer Staples 3.4 %
Utility 3.4 %
Material 2.0 %
------
100.0 %
------
Growth Fund
Industry Sectors
Industry % of Net Assets
Consumer Discretionary 22.8 %
Financial 17.8 %
Health Care 17.1 %
Information Technology 15.8 %
Energy 6.3 %
Consumer Staples 5.7 %
Industrial 5.1 %
Cash Equivalent 4.5 %
Utility 2.6 %
Index Securities 2.3 %
-----
100.0 %
-----
MANOR INVESTMENT FUNDS, INC.
Manor Fund and Growth Fund
Expenses
June 30, 2005
As a shareholder of the Fund, you incur indirect costs, such as management
fees, and other Fund operating expenses. This example is intended to help
you understand your indirect costs, also referred to as ongoing costs,
(in dollars) of investing in the Fund, and to compare these costs with the
ongoing costs of investing in other mutual funds.
This example is based on an investment of $1,000 invested at the beginning
of the period and held for the entire 6 month period of January 1, 2005
through June 30, 2005.
Actual Expenses
The first section of the table below provides information about actual
account values and actual expenses. You may use the information in this
line, together with the amount you invested at the beginning of the period,
to estimate the expenses that you paid over the period. Simply divide your
account value by $1,000 (for example, an $8,600 account value divided by
$1,000 = 8.6), then multiply the result by the number in the first line
under the heading Expenses Paid During Period to estimate the expenses
you paid on your account during this period.
Hypothetical example for comparison purposes
The second section of the table provides information about hypothetical
account values and hypothetical expense based on the Funds actual expense
ratio and an assumed rate of return of 5% per year before expenses, which
is not the Funds 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 ongoing costs of investing in the
Fund and other funds. To do so, 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 direst costs, such as wire
fees or low balance fees. Therefore, the second line of 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 direct costs were included, your costs would be higher.
Expenses Paid
Total Beginning Ending During Period*
Return Account Value Account Value January 1, 2005 -
January 1, 2005 June 30, 2005 June 30, 2005
Based on Actual Total Return as indicated
Manor Fund 1.85% $ 1,000.00 $ 1,018.50 $ 7.57
Growth Fund 0.39% $ 1,000.00 $ 1,003.90 $ 7.51
Based on Hypothetical 5.0% Annualized Return
Manor Fund $ 1,000.00 $ 1,017.35 $ 7.57
Growth Fund $ 1,000.00 $ 1,017.35 $ 7.57
Expenses are equal to the Funds annualized expense ratios, capped at 1.5%,
which is net of any expenses paid indirectly, multiplied by the average
account value over the period. The ending account value for each Fund in
the table is based on its actual total return for the 6 month period of
January 1, 2005 to June 30, 2005, 1.85% for the Manor Fund, and 0.39% for
the Growth Fund.
MANOR INVESTMENT FUNDS, INC.
Bond Fund
June 30, 2005
Top Holdings
Security % of Net Assets
US Treasury 1.875% due 11/30/05 15.9 %
US Treasury 3.625% due 7/15/09 13.3 %
US Treasury 4.000% due 2/15/14 10.7 %
US Treasury 3.875% due 2/15/13 10.7 %
US Treasury 3.250% due 8/15/07 10.6 %
Fund Performance
Value of $10,000 invested in the Fund
Inception (6/30/99) to present (6/30/05)
Compared to the Lehman Int. Gov t and Lipper Gov t Index
+#
$14,000
#+ +#
+#
$12,500 * * *
+# *
*
$11,000
*+#
*+#
$9,500
6/30/1999 | 6/30/2001 | 6/30/2003 | 6/30/2005
* Bond Fund + Lip U.S. Gov. # Leh Int Gov
Quarter and Annualized Total Return for Periods Ending June 30, 2005
Bond Lipper Lehman
Fund US Gov t Intermediate
Fund Index Gov t Index
2nd Quarter 1.75 % 2.88 % 2.40 %
1-Year 1.25 % 6.18 % 3.92 %
3-Year Annualized 1.75 % 4.58 % 4.14 %
5-Year Annualized 3.81 % 6.36 % 6.04 %
Annualized since inception
6/30/99 3.77 % 6.02 % 5.80 %
The Lehman Intermediate Government Index is represents the aggregate market
value of the US Government securities with a maximum maturity of 10 years.
The Lipper US Government mutual fund index is an index of mutual funds
managed using US Government securities. Both are computed on a total
return basis. The chart assumes an initial gross investment of $10,000
on 6/30/1999 (commencement of operations). Returns shown include the
reinvestment of dividends. Past performance does not predict future
performance. Investment return and principal value will fluctuate,
so your shares at redemption may be worth more or less than the
original cost
MANOR INVESTMENT FUNDS, INC.
Bond Fund
Expenses
June 30, 2005
As a shareholder of the Fund, you incur indirect costs, such as management
fees, and other Fund operating expenses. This example is intended to help
you understand your indirect costs, also referred to as ongoing costs,
(in dollars) of investing in the Fund, and to compare these costs with the
ongoing costs of investing in other mutual funds.
This example is based on an investment of $1,000 invested at the beginning
of the period and held for the entire 6 month period of January 1, 2005
through June 30, 2005.
Actual Expenses
The first section of the table below provides information about actual
account values and actual expenses. You may use the information in this
line, together with the amount you invested at the beginning of the period,
to estimate the expenses that you paid over the period. Simply divide
your account value by $1,000 (for example, an $8,600 account value divided
by $1,000 = 8.6), then multiply the result by the number in the first line
under the heading Expenses Paid During Period to estimate the expenses
you paid on your account during this period.
Hypothetical example for comparison purposes
The second section of the table provides information about hypothetical
account values and hypothetical expense based on the 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 ongoing costs of investing in the Fund and other
funds. To do so, 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 direst costs, such as wire
fees or low balance fees. Therefore, the second line of 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 direct costs were included, your costs would be higher.
Expenses Paid
Total Beginning Ending During Period*
Return Account Value Account Value January 1, 2005 -
January 1, 2005 June 30, 2005 June 30, 2005
Based on Actual Total Return as indicated
Bond Fund 1.06 % $ 1,000.00 $ 1,010.60 $ 5.03
Based on Hypothetical 5.0% Annualized Return
Bond Fund $ 1,000.00 $ 1,019.80 $ 5.05
* Expenses are equal to the Fund s annualized expense ratio, capped at 1.0%,
which is net of any expenses paid indirectly, multiplied by the average
account value over the period. The ending account value for the Fund in
the table is based on its actual total return for the 6 month period of
January 1, 2005 to June 30, 2005, of 1.06%.
Manor Investment Funds, Inc.
Financial Statements
(Unaudited)
June 30, 2005
MANOR INVESTMENT FUNDS, INC.
MANOR FUND
Schedule of Investments - Unaudited
June 30, 2005
Description Shares MarketValue
COMMON STOCKS 90.3%
Consumer Discretionary 13.0%
Best Buy Co., Inc 1,550 $ 106,252
Home Depot 2,390 92,971
KB Home 1,290 98,337
Reebok Int., Ltd. 2,090 87,425
--------
384,985
--------
Consumer Staples 3.4%
Pepsico, Inc. 1,860 100,309
--------
100,309
Energy - 9.9%
Devon Energy 2,440 123,659
Nabors* 1,310 79,412
Occidental Pet. 1,190 91,547
--------
294,618
--------
Financial 20.8%
Allstate Insurance 1,830 109,343
Citigroup, Inc. 1,969 91,027
Fed. Nat. Mtg. 1,120 65,408
Freddie Mac 1,440 93,931
MBNA Corp. 3,070 80,311
Shurgard Storage 2,060 94,678
Vornado Realty Tr. 1,010 81,204
--------
615,902
--------
Health Care 12.9%
Johnson & Johnson 1,350 87,750
Manor Care, Inc. 2,590 102,901
Pfizer, Inc. 2,350 64,813
Wellpoint, Inc. * 1,840 128,138
--------
383,602
--------
Industrial 13.2%
Alcan 1,940 58,200
Deere & Co. 980 64,180
General Electric 2,270 78,655
Norfolk Southern 2,410 74,614
Paccar, Inc. 630 42,840
Tyco, Inc. 2,440 71,248
--------
389,737
--------
Information Technology 11.7%
Cisco Systems * 2,350 44,838
Citrix Systems * 2,570 55,666
Intel Corp. 2,980 77,540
Int. Bus. Machines 950 70,490
Jabil Circuit 3,220 98,950
--------
347,484
--------
Material 2.0%
Nucor Corp. 1,290 58,850
--------
58,850
--------
Utility 3.4%
Exelon 1,940 99,580
--------
99,580
--------
TOTAL COMMON STOCKS
(Cost $2,085,809) 2,675,067
INDEX SECURITIES 5.6%
Barra Value Index 1,340 83,535
SPDR Trust 690 82,234
--------
TOTAL INDEX SECURITIES
(Cost $126,876) 165,769
--------
SHORT-TERM INVESTMENTS 4.1%
1st Amer. Gov. Fund 65,516 65,516
1st National M Mkt 55,549 55,549
--------
TOTAL SHORT-TERM INVESTMENTS
(Cost $121,065) 121,065
TOTAL INVESTMENTS 100.0%
(Cost $ 2,333,750) 2,961,901
Other Assets less Liabilities
Net 0.0% 29
-----------
NET ASSETS 100.0% $ 2,961,930
===========
*Non-income producing during the period.
The accompanying notes are an integral part of these financial statements
MANOR INVESTMENT FUNDS, INC.
GROWTH FUND
Schedule of Investments - Unaudited
June 30, 2005
Description Shares MarketValue
COMMON STOCKS 93.2%
Consumer Discretionary 22.8%
Bed, Bath, Beyond * 1,700 $ 71,026
Coach Inc. * 3,980 133,609
Ebay, Inc. * 2,160 71,302
Fortune Brands 1,030 91,464
Gap, Inc. 4,020 79,395
Interactive Corp. * 1,570 37,711
Jones Apparel Grp 1,270 39,421
Mohawk Ind. * 920 75,900
Staples 4,335 92,292
--------
692,120
--------
Consumer Staples 5.7%
News Corp., Inc. 5,030 84,805
Walgreen Co. 1,900 87,382
--------
172,187
--------
Energy 6.3%
Baker-Hughes 1,920 98,227
Valero Energy 1,170 92,559
--------
190,786
--------
Financial 17.8%
Ace Limited 2,130 95,531
American Int. Grp. 1,160 67,396
Capital One 1,290 103,213
Etrade Financial * 6,060 84,779
Golden West Fin. 1,560 100,433
Hospitality Prop. Tr. 2,020 89,021
--------
540,373
--------
Health Care 17.1%
Express Scripts * 2,460 122,950
Forest Labs * 940 36,519
Genentech Inc. 1,110 89,111
Ivax Corp. * 3,553 76,390
Quest Diagnostics 1,900 101,213
Unitedhealth Group 1,760 91,766
--------
517,949
--------
Industrial 5.1%
Cendant 3,910 87,467
Fedex Corp. 820 66,428
--------
153,895
--------
Information Technology 15.8%
Dell, Inc. * 2,630 103,780
Intel Corp. 3,200 83,264
Microsoft Corp. 3,260 80,978
Qualcomm 2,460 87,146
Technology SPDR 2,400 47,808
Xlinix, Inc. 2,930 74,715
--------
477,691
--------
Utility 2.6%
TXU Corp 930 77,274
--------
77,274
--------
TOTAL COMMON STOCKS
(Cost $2,457,000) 2,822,275
--------
INDEX SECURITIES 2.3%
Barra Growth Index 1,240 70,060
--------
TOTAL INDEX SECURITIES
(Cost $65,266) 70,060
--------
SHORT-TERM INVESTMENTS 4.6%
1st Amer. Gov. Fund 47,641 47,641
1st National M Mkt 90,455 90,455
--------
TOTAL SHORT-TERM INVESTMENTS
(Cost $138,096) 138,096
--------
TOTAL INVESTMENTS 100.1%
(Cost $ 2,660,362) 3,030,431
Other Assets less Liabilities
Net 0.1% (3,796)
-----------
NET ASSETS 100.0% $ 3,026,635
===========
*Non-income producing during the period.
The accompanying notes are an integral part of these financial statements
MANOR INVESTMENT FUNDS, INC.
BOND FUND
Schedule of Investments - Unaudited
June 30, 2005
Description Shares MarketValue
U.S. GOVERNMENT BONDS 90.0%
U.S. Treasury 5.875% Due 11-15-05 50,000 $ 50,461
U.S. Treasury 1.875% Due 11-30-05 300,000 298,219
U.S. Treasury 2.250% Due 02-15-07 100,000 97,875
U.S. Treasury 3.250% Due 08-15-07 200,000 198,375
U.S. Treasury 3.125% Due 10-15-08 200,000 196,625
U.S. Treasury 3.625% Due 07-15-09 250,000 249,375
U.S. Treasury 3.500% Due 12-15-09 200,000 198,312
U.S. Treasury 3.875% Due 02-15-13 200,000 200,813
U.S. Treasury 4.000% Due 02-15-14 200,000 201,625
--------
TOTAL U.S. GOVERNMENT BONDS
(Cost $1,697,478) 1,691,680
SHORT-TERM INVESTMENTS 9.2%
1st American Treasury Obligation Fund 119,003 119,003
1st National Money Market 53,688 53,688
--------
TOTAL SHORT-TERM INVESTMENTS
(Cost $ 172,691) 172,691
--------
TOTAL INVESTMENTS 99.2%
(Cost $ 1,870,169) 1,864,371
Other Assets less Liabilities Net 0.8% 15,423
-----------
NET ASSETS - 100.0% $ 1,879,794
===========
The accompanying notes are an integral part of these financial statements
MANOR INVESTMENT FUNDS, INC.
Statements of Assets and Liabilities - Unaudited
June 30, 2005
ManorFund Growth Fund Bond Fund
ASSETS
Investments in Securities
(cost of $2,333,750, $2,660,362 and
$1,870,169, respectively) $ 2,961,901 $ 3,030,431 $ 1,864,371
Receivables: Dividends 3,143 1,079 --
Interest 104 190 15,955
--------- --------- ---------
Total Assets 2,965,148 3,031,700 1,880,326
LIABILITIES
Accrued expenses 3,218 5,065 532
--------- --------- ---------
Total Liabilities 3,218 5,065 532
--------- --------- --------
NET ASSETS $ 2,961,930 $ 3,026,635 $ 1,879,794
NET ASSETS CONSIST OF:
Capital stock - par value $ 187 $ 292 $ 179
Paid in capital 2,434,650 2,889,869 1,871,793
Undistributed net investment income (4,492) (52,311) 14,570
Accumulated net realized (loss) gain (96,566) (181,288) (951)
Net unrealized appreciation 628,151 370,073 (5,797)
--------- --------- ---------
NET ASSETS $ 2,961,930 $ 3,026,635 $ 1,879,794
========= ========= =========
CAPITAL SHARES OUTSTANDING 185,361 292,174 179,425
(10,000,000 authorized shares; $.001 par value)
NET ASSET VALUE PER SHARE $ 15.98 $ 10.36 $ 10.48
MANOR INVESTMENT FUNDS, INC.
Statements of Operations - Unaudited
6 Months Ending June 30, 2005
ManorFund Growth Fund Bond Fund
Investment Income
Dividends, net of foreign taxes withheld
Of $93, $ - , and $ - ,
Respectively $ 23,777 $ 10,808 $ --
Interest 869 1,582 22,607
--------- --------- ---------
Total investment income 24,646 12,390 22,607
Expenses
Advisory fee (Note 2) 13,979 14,380 3,484
Professional fees 3,010 3,010 3,223
Custodian fee 2,102 1,750 1,341
Insurance -- -- --
Registration 837 778 100
Taxes -- -- --
Other 942 1,753 --
--------- --------- ---------
Total expenses 20,870 21,671 8,148
--------- --------- ---------
Net Investment Income (Loss) 3,776 (9,281) 14,459
--------- --------- ---------
Realized & Unrealized Gain (Loss) on Investments
(Note 4)
Net realized gain (loss) on
Investments 88,804 127,733 171
Net change in unrealized appreciation/
depreciation on investments (37,329) (104,428) 2,769
--------- --------- ---------
Net realized and unrealized gain
(loss) on investments 51,475 23,305 2,940
--------- --------- ---------
Net Increase (Decrease) in Net Assets
Resulting from Operations $ 55,251 $ 14,024 $ 17,399
========= ========= =========
The accompanying notes are an integral part of these financial statements
MANOR INVESTMENT FUNDS, INC.
Statements of Changes in Net Assets - Unaudited
Manor Fund Growth Fund
6 Months Year 6 Months Year
Ending Ended Ending Ended
June 30 Dec. 31 June 30 Dec. 31
2005 2004 2005 2004
Increase (decrease) in Net
Assets from Operations
Net investment income (loss) $ 3,776 $ 7,288 $ (9,281) $ (4,328)
Net realized gain (loss)
on investments 88,804 (61,455) 127,733 (2,469)
Net change in unrealized appreciation/
depreciation on investments (37,329) 401,002 (104,428) 314,571
Net increase (decrease) in net assets
resulting from operations 55,251 346,835 14,024 307,774
-------- ------- -------- ---------
Distributions to Shareholders -- (4,523) -- --
Capital Share Transactions
Proceeds from shares sold 194,115 201,066 199,442 230,662
Reinvestment of distributions -- 4,523 -- --
Payment for shares redeemed (130,260) (319,818) (109,830) (171,155)
Net increase in net assets from
capital share transactions 63,855 (114,229) 89,612 59,507
-------- -------- -------- ---------
Total Increase in Net Assets
119,106 228,083 103,636 367,281
Net Assets
Beginning of Period 2,842,824 2,614,742 2,922,999 2,555,719
--------- --------- --------- ---------
End of Period $ 2,961,930 $ 2,842,825 $ 3,026,635 $ 2,923,000
========= ========= ========= =========
Transactions in Shares of Fund
Sold 12,725 14,154 19,975 23,991
Issued in reinvestment
of distributions -- 290 -- --
Redeemed (8,531) (22,197) (10,997) (18,042)
-------- --------- --------- ---------
Net increase (decrease) in outstanding
shares of the Fund 4,194 (7,753) 8,978 5,949
======== ========= ========= =========
The accompanying notes are an integral part of these financial statements.
MANOR INVESTMENT FUNDS, INC.
Statements of Changes in Net Assets (con t) - Unaudited
Bond Fund
6 Months Year
Ending Ended
June 30 Dec. 31
2005 2004
Increase (decrease) in Net Assets
from Operations
Net investment income (loss) $ 14,459 $ 24,269
Net realized gain (loss)
on investments 171 (1,123)
Net change in unrealized appreciation/
depreciation on investments 2,769 (28,436)
---------- ----------
Net increase (decrease) in net assets
resulting from operations 17,399 (5,290)
---------- ----------
Distributions to Shareholders -- (28,867)
---------- ----------
Capital Share Transactions
Proceeds from shares sold 420,202 971,571
Reinvestment of distributions -- 28,867
Payment for shares redeemed (86,066) (1,207,292)
---------- ----------
Net increase (decrease) in net assets from
capital share transactions 334,136 (206,854)
---------- ----------
Total Increase (Decrease) in
Net Assets 351,535 (241,011)
Net Assets
Beginning of Period 1,528,259 1,769,270
---------- ----------
End of Period $ 1,879,794 $ 1,528,259
========== ==========
Transactions in Shares of Fund
Sold 40,421 91,541
Issued in reinvestment of
Distributions -- 2,784
Redeemed (8,307) (114,136)
---------- ----------
Net (decrease) increase in outstanding
shares of the Fund 32,114 (19,811)
========== ==========
The accompanying notes are an integral part of these financial
statements
MANOR INVESTMENT FUNDS, INC.
Notes to Financial Statements - Unaudited
June 30, 2005
1 ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization: Manor Investment Funds, Inc. (the Company ) is a non-
diversified regulated investment company and was incorporated in the
Commonwealth of Pennsylvania on September 13, 1995. The primary investment
objective of each of the Funds follows: Manor Fund - conservative capital
appreciation and current income, investing primarily in common stocks of
large corporations in the United States; Growth Fund - long-term capital
appreciation, investing primarily in common stocks of U.S. corporations;
Bond Fund intermediate-term fixed income, investing primarily in U.S.
Government obligations. The following is a summary of the Funds
significant accounting policies.
Security Valuations: Equity securities generally are valued by using market
quotations, but may be valued on the basis of prices furnished by a pricing
service when the Advisor believes such prices accurately reflect the fair
market value of such securities. Securities that are traded on any stock
exchange or on the NASDAQ over-the-counter market are generally valued by
the pricing service at the last quoted sale price. Lacking a last sale
price, an equity security is generally valued by the pricing service at
its last bid price. When market quotations are not readily available,
when the Advisor determines that the market quotation or the price
provided by the pricing service does not accurately reflect the current
market value, or when restricted or illiquid securities are being valued,
such securities are valued as determined in good faith by the Board of
Directors. The Board has adopted guidelines for good faith
pricing, and has delegated to the Advisor the responsibility for
determining fair value prices, subject to review by the Board of
Directors.
Fixed income securities generally are valued by using market quotations,
but may be valued on the basis of prices furnished by a pricing service
when the Advisor believes such prices accurately reflect the fair market
value of such securities. A pricing service utilizes electronic data
processing techniques based on yield spreads relating to securities
with similar characteristics to determine prices for normal
institutional-size trading units of debt securities without regard to
sale or bid prices. If the Advisor decides that a price provided by
the pricing service does not accurately reflect the fair market
value of the securities, when prices are not readily available from a
pricing service, or when restricted or illiquid securities are being
valued, securities are valued at fair value as determined in good
faith by the Advisor, subject to review by the Board of Directors.
Short term investments in fixed income securities with maturities of
less than 60 days when acquired, or which subsequently are within 60
days of maturity, are valued by using the amortized cost method of
valuation, which the Board has determined will represent fair value.
Federal Income Taxes: The Fund s policy is to comply with the
requirements of the Internal Revenue Code that are applicable to
regulated investment companies and to distribute all its taxable
income to its shareholders. Therefore, no federal income tax provision
is required.
Distributions to Shareholders: The Fund intends to distribute to its
shareholders substantially all of its net realized capital gains and net
investment income, if any, at year-end. Distributions will be recorded on
ex-dividend date.
Other: The Fund follows industry practice and records security transactions
on the trade date. The specific identification method is used for
determining gains or losses for financial statements and income tax
purposes. Dividend income is recorded on the ex-dividend date and
interest income is recorded on an accrual basis. Discounts and premiums
are amortized over the useful lives of the respective securities when
determined to be material. Withholding taxes on foreign dividends will be
provided for in accordance with the Fund s understanding of the
applicable country s tax rules and rates.
Reclassifications: In accordance with SOP-93-2, the Funds record a
reclassification in the capital accounts of a permanent book/tax
difference from net investment loss to paid-in-capital. This
reclassification has no impact on the net asset value of the Fund and is
designed generally to present undistributed income and net realized
gains on a tax basis, which is considered to be more informative to
shareholders.
Use of Estimates: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the year. Actual results could differ from these estimates
MANOR INVESTMENT FUNDS, INC.
Notes to Financial Statements (con t) - Unaudited
June 30, 2005
2. INVESTMENT ADVISORY AGREEMENT
The Fund has an investment advisory agreement (the agreement ) with Morris
Capital Advisors, Inc. (the Advisor ), with whom certain officers and
directors of the Funds are affiliated, to furnish investment management
services to the Funds. Under the terms of the agreement, the Funds will pay
the Advisor a monthly fee based on the Funds average daily net assets at
the annual rate of 1.00% for Manor Fund and Growth Fund and 0.5% for
Bond Fund. For the six months ended June 30, 2005 the Advisor earned
advisory fees from the Manor, Growth and Bond Funds of $13,979, $14,380
and $3,484 respectively.
Under the terms of the agreement if the aggregate expenses of the Funds are
equal to or greater than 1.5% for Manor Fund and Growth Fund and 1.00% for
Bond Fund of the Funds net assets the Advisor will reimburse the Funds for
these expenses. At December 31, 2004 the Advisor reimbursed the Bond Fund
$500 for expenses.
3. INVESTMENT TRANSACTIONS
Investment transactions, excluding short-term investments, for the six
months ended June 30, 2005, were as follows:
Manor Fund Growth Fund Bond Fund
Purchases $ 285,284 $ 267,536 $ 446,758
Sales $ 293,554 $ 237,233 --
4. FEDERAL INCOME TAXES
Income and long-term capital gain distributions are determined in accordance
with Federal income tax regulations, which may differ from accounting
principals generally accepted in the United States.
The following information is as of June 30, 2005:
Manor Fund Growth Fund Bond Fund
Federal tax cost of investments, including
short-term investments $ 2,333,750 $ 2,660,362 $ 1,870,169
---------- ---------- ----------
Gross tax appreciation
of investments $ 729,733 $ 533,270 $ 6,514
Gross tax depreciation
of investments (101,582) (163,200) (12,312)
---------- ---------- ----------
Net tax appreciation
(depreciation) $ 628,151 $ 370,069 $ (5,798)
---------- ---------- ----------
Undistributed ordinary
Income $ (4,492) $ (52,311) $ 14,570
Undistributed capital gain
Income $ 88,804 $ 127,733 $ 171
Accumulated capital losses $ (96,566) $ (181,288) $ (952)
The accumulated capital loss carryovers as of December 31, 2004 expire as
follows:
Manor Fund Growth Fund Bond Fund
2007 $ 40,300 $ 3,668 $ --
2008 $ -- $ 151,266 $ --
2009 $ 78,780 $ 45,013 $ --
2010 $ 4,835 $ 48,507 $ --
2011 $ -- $ 58,098 $ --
2012 $ 61,455 $ 2,469 $ 1,123
The tax character of distributions paid during the years ended
December 31, 2004 and 2003 were as follows:
Manor Fund Growth Fund Bond Fund
2004 2003 2004 2003 2004 2003
Ordinary Income $ 4,523 - - - $ 28,867 $ 40,658
Long-term Capital Gain - - - - - $ 37,777
MANOR INVESTMENT FUNDS, INC.
MANOR FUND
Financial Highlights - Unaudited
For a share of capital stock outstanding throughout the period
6 Mths.
Ending
6/30/05 For the years ended December 31,
------- ---------------------------------------
2005* 2004 2003 2002 2001 2000
- ---------------------------------------------------------------------------
PER SHARE DATA
- ---------------------------------------------------------------------------
Net asset value, beginning of
Period $ 15.69 $ 13.84 $ 10.52 $ 13.20 $ 15.76 $ 17.08
- ---------------------------------------------------------------------------
Income from investment operations:
Net investment income
(loss) 0.02 0.035 - (0.01) (0.02) (0.06)
Net realized and unrealized gain
(loss) on investments 0.27 1.840 3.32 (2.67) (2.54) (1.26)
----- ------ ---- ------ ----- ------
Total from investment
Operations 0.29 1.875 3.32 (2.68) (2.56) (1.32)
- ---------------------------------------------------------------------------
Less Distributions - (0.025) - - - -
----- ------ ---- ------ ----- ------
Total distributions - (0.025) - - - -
- ---------------------------------------------------------------------------
Net asset value, end
of period $ 15.98 $ 15.69 $ 13.84 $ 10.52 $ 13.20 $ 15.76
- ----------------------------------------------------------------------------
Total Return 1.84% 13.55% 31.56% -20.30% -16.24% -7.73%
- ----------------------------------------------------------------------------
Ratios and Supplemental Data:
Net assets, end of
period (000) $ 2,962 $ 2,843 $ 2,615 $ 1,750 $ 2,087 $ 2,569
Ratio of expenses to average net assets:
Before reimbursements 1.47% 1.50% 1.52% 1.50% 1.50% 1.50%
Net of reimbursements 1.47% 1.50% 1.50% 1.50% 1.50% 1.50%
Ratio of net investment income to
average net assets 0.13% 0.27% 0.04% -0.08% -0.11% -0.32%
Portfolio Turnover
Rate 10.05% 7.32% 4.26% 26.0% 28.0% 16.0%
- ----------------------------------------------------------------------------
*Unaudited
The accompanying notes are an integral part of these financial statements
MANOR INVESTMENT FUNDS, INC.
GROWTH FUND
Financial Highlights - Unaudited
For a share of capital stock outstanding throughout the period
6 Mths.
Ending
6/30/05 For the years ended December 31,
------- ----------------------------------------
2005* 2004 2003 2002 2001 2000
- ----------------------------------------------------------------------------
PER SHARE DATA
- ----------------------------------------------------------------------------
Net asset value, beginning
of period $ 10.32 $ 9.22 $ 7.08 $ 8.95 $ 9.54 $ 11.72
- ----------------------------------------------------------------------------
Income from investment operations:
Net investment (loss) (0.03) (0.02) (0.05) (0.06) (0.05) (0.05)
Net realized and unrealized Gain (loss)
on investments 0.07 1.12 2.19 (1.81) (0.54) (2.13)
----- ----- ----- ----- ----- ------
Total from investment
Operations 0.04 1.10 2.14 (1.87) (0.59) (2.18)
- ----------------------------------------------------------------------------
Less Distributions - - - - - -
----- ----- ----- ----- ----- ------
Total distributions - - - - - -
- ----------------------------------------------------------------------------
Net asset value,
end of period $ 10.36 $ 10.32 $ 9.22 $ 7.08 $ 8.95 $ 9.54
- ----------------------------------------------------------------------------
Total Return 0.39% 11.93% 30.23% -20.89% -6.18% -18.60%
- ---------------------------------------------------------------------------
Ratios and Supplemental Data:
Net assets,end
of period (000) $ 3,027 $ 2,923 $ 2,556 $ 1,638 $ 1,522 $ 1,528
Ratio of expenses to average net assets:
Before reimbursements 1.49% 1.50% 1.52% 1.50% 1.50% 1.52%
Net of reimbursements 1.49% 1.50% 1.50% 1.50% 1.50% 1.52%
Ratio of net investment income
to average net assets -0.32% -0.16% -0.66% -0.70% -0.53% -0.44%
Portfolio Turnover
Rate 8.14% 30.42% 6.53% 13.2% 33.6% 16.0%
- ----------------------------------------------------------------------------
*Unaudited
The accompanying notes are an integral part of these financial statements.
MANOR INVESTMENT FUNDS, INC.
BOND FUND
Financial Highlights - Unaudited
For a share of capital stock outstanding throughout the period
6 Mths.
Ending
6/30/05 For the years ended December 31,
------- ----------------------------------------
2005* 2004 2003 2002 2001 2000
- ----------------------------------------------------------------------------
PER SHARE DATA
- ----------------------------------------------------------------------------
Net asset value, beginning
of period $ 10.37 $ 10.58 $ 10.98 $ 10.63 $ 10.39 $ 9.90
- ----------------------------------------------------------------------------
Income from investment
operations:
Net investment income 0.09 0.17 0.26 0.32 0.43 0.46
Net realized and unrealized gain
(loss) on investments 0.02 (0.18) (0.17) 0.39 0.23 0.47
---- ----- ----- ----- ---- ----
Total from investment
Operations 0.11 (0.01) 0.09 0.71 0.66 0.93
- ---------------------------------------------------------------------------
Less Distributions - (0.20) (0.49) (0.36) (0.42) (0.44)
---- ----- ----- ----- ---- ----
Total distributions - (0.20) (0.49) (0.36) (0.42) (0.44)
- ---------------------------------------------------------------------------
Net asset value, end
of period $ 10.48 $ 10.37 $ 10.58 $ 10.98 $ 10.63 $ 10.39
- ---------------------------------------------------------------------------
Total Return 1.06% -0.09% 0.82% 6.69% 6.35% 9.39%
- ---------------------------------------------------------------------------
Ratios and Supplemental Data:
Net assets,
end of period (000) $ 1,885 $ 1,528 $ 1,769 $ 1,962 $ 1,476 $ 803
Ratio of expenses to average net assets:
Before reimbursements 0.99% 1.05% 1.04% 1.00% 1.00% 1.00%
Net of reimbursements 0.99% 1.00% 1.00% 1.00% 1.00% 1.00%
Ratio of net investment income to average
net assets 0.88% 1.37% 2.30% 2.96% 4.01% 4.45%
Portfolio Turnover
Rate 12.16% 75.57% 50.61% 26.3% 0.0% 0.0%
- ---------------------------------------------------------------------------
*Unaudited
The accompanying notes are an integral part of these financial statements.
MANOR INVESTMENT FUNDS, INC.
ADDITIONAL INFORMATION
Proxy Voting Procedures and Accord
The Company s Board of Directors has approved proxy voting procedures
setting forth guidelines and procedures for the voting of proxies relating
to securities held by the Fund. Records of the Fund s proxy voting records
are maintained and are available for inspection without charge by calling
1-800-787-3334 and on the SEC s website at http://www.sec.gov. The Board
is responsible for overseeing the implementation of the procedures. The
proxy voting record of the Fund can be reviewed on the web site of the
Fund at www.ManorFunds.com. The Proxy voting history is located under
Fund Information, Proxy Voting.
Quarterly Portfolio Schedule
The Company now files a complete schedule of investments with the SEC for the
first and third quarters of each fiscal year on Form N-Q. These forms are
available on the SEC S website at http://www.sec.gov. They may be reviewed
and copied at the SEC s Public Reference Room in Washington, D.C.
Information on the operation of the Public Reference Room may be obtained
by calling 1-800-723-0330.
Compensation of Board of Directors
The members of the Board of Directors serve without compensation. Daniel A.
Morris, President of Manor Investment Funds, Inc. ( the Funds ), and
President of Morris Capital Advisors, Inc., adviser to the Funds, and an
Interested Director of the Funds, receives no compensation directly from
the Funds. He is compensated through the management fee paid to the
adviser to the Funds.
Investment Advisor Review
At its regularly scheduled in-person meeting on March 29, 2005, the Board of
Directors unanimously approved the continuance of the investment advisory
contract with MCA. Prior to approving the contract, the Board discussed the
services performed by MCA (as described herein), performance of the funds,
fees and profits accruing to MCA, and economies of scale from which the
funds could benefit as the funds grow. In conducting its review, the
Board reviewed the fees and services incurred by other mutual funds.
Morris Capital Advisors, Inc. (MCA) provides ongoing investment management
for the portfolio of each Fund. In the execution of these duties MCA
performs securities research, trading, and accounting for Fund portfolios.
MCA also reconciles each portfolio with the Fund custodian to prevent
errors in purchase and sale transactions, dividends, interest, and
shareholder transactions.
The investment performance of each Fund is compared to a broad market index
and comparable mutual funds. As of December 31, 2004 the Manor Fund
outperformed its benchmarks for the trailing quarter, 1-year, 3-year, and
5-year periods. The Growth Fund also outperformed its benchmarks for the
trailing quarter, 1-year, 3-year, and 5-year periods ending December 31,
2004. The Bond Fund underperformed its benchmarks because the Fund is
invested 100% in U.S. Treasury securities, with short maturities.
This portfolio structure is designed to protect principal in periods
of rising interest rates, and underperformed during the recent period of
declining yields.
In addition to investment management functions, MCA provides ongoing
Shareholder accounting, acts as transfer agent for shares of the Fund,
prepares and distributes all shareholder reports, prepares and submits all
filings required by SEC rules and regulations, negotiates agreements with
outside service providers, and processes all shareholder questions and
requests. MCA provides these services, over and above the typical
responsibilities of investment management, without compensation from
the Fund. The cost of providing these services substantially reduce
the net profit attributable to MCA from the sole execution of its duties
under its investment advisory agreement with the Fund.
As the Funds grow economies of scale will reduce the cost of services to the
Fund, for the benefit of all Fund shareholders. It is expected that these
economies of scale will benefit shareholders when Fund assets exceed $25
million.
Board of Directors Information
Manor Investment Funds, Inc.
June 30, 2005
The business and affairs of the Fund are managed under the direction of the
Funds Board of Directors. Information pertaining to the Directors of the
Fund are set forth below. The Statement of Additional Information includes
addition information about the Funds Directors, and is available without
charge, by calling 1-800-787-3334. Each director may be contacted by
writing to the director c/o Manor Investment Funds, Inc., 15 Chester
Commons, Malvern, PA 19355.
Independent Directors
JAMES MCFADDEN
James McFadden is a Director of the Fund, and Chairman of the Audit
Committee. He serves a one-year term, and stands for re-election
annually. He has been a Director since 9/25/1995.
Mr. McFadden is Vice President of Marketing for MBNA Corporation.
He is not a Director for any other public companies.
JOHN MCGINN
John McGinn is a Director of the Fund, and serves on the Audit Committee.
He serves a one-year term, and stands for re-election annually. He has
been a Director since 11/5/2002.
Mr. McGinn is head of Credit Review for Vertex, Inc. He is not a Director
for any other public companies.
FRED MYERS
Fred Myers is a Director of the Fund. He serves a one-year term, and
stands for re-election annually. He has been a Director since 9/25/1995.
Mr. Myers is founding Partner of the accounting firm of Myers &
Associates, CPA s. He is not a Director for any other public companies.
EDWARD SZKUDLAPSKI
Edward Szkudlapski is a Director of the Fund. He serves a one-year term,
and stands for re-election annually. He has been a Director since
5/15/2000. Mr. Szkudlapski is President of Eclipse Business Systems.
He is not a Director for any other public companies.
DONALD THOMPSON
Donald Thompson is a Director of the Fund. He serves a one-year term, and
stands for re-election annually. He has been a Director since 4/20/1999.
Mr. Thompson is a Network Administrator and Healthcare Consultant. He is
not a Director for any other public companies.
ALAN WEINTRAUB
Alan Weintraub is a Director of the Fund. He serves a one-year term,
and stands for re-election annually. He has been a Director since
9/25/1995.
Mr. Weintraub is a Chief Technical Officer with Qumas, Cork, Ireland.
He is not a Director for any other public companies.
Interested Directors
DANIEL A. MORRIS
Daniel A. Morris is a Director of the Fund, and President of Morris Capital
Advisors, Inc., advisor to the Fund. He serves a one-year term, and stands
for re-election annually. He has been a Director since 9/25/1995.
Prior to founding Morris Capital Advisors, Inc., he was Senior Vice
President of Consistent Asset Management Company, an investment adviser
for separate accounts and registered investment companies. As President
of the Fund, he is considered an Interested Director. He is not a
Director for any other public companies.
BRUCE LAVERTY
Bruce Laverty is a Director of the Fund, and serves as legal counsel to the
Fund. He serves a one-year term, and stands for re-election annually. He
has been a Director since 9/25/1995.
Mr. Laverty is a Partner of the law firm Valocchi, Fischer & Laverty legal
counsel to the Fund. He is not a Director for any other public companies.
Manor Investment Funds, Inc.
Fund Office:
15 Chester County Commons
Malvern, PA 19355
610-722-0900 800-787-3334
www.manorfunds.com
ITEM 2. CODE OF ETHICS.
Not applicable for semi-annual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable for semi-annual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable for semi-annual reports.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTAS.
Not applicable for semi-annual reports.
ITEM 6. [RESERVED.]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. [RESERVED.]
ITEM 9. CONTROLS AND PROCEDURES.
ITEM 10. EXHIBITS.
(a) (1) Code of Ethics - For annual reports.
(a) (2) Certifications persuant to Section 302 of the Sarbanes-Oxley
Act of 2002 are attached hereto.
(b) Certification pursuant ot Section 906 of the Sarbanes-Oxley
Act of 2002 are attached hereto.
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 undershgned, thereunto duly authorized.
Manor Investment Funds, Inc.
By /s/ Daniel A. Morris
President
Date 6/30/2005