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 811-06561
------------------
CCMI Funds
- ------------------------------------
(Exact name of registrant as specified in charter)
431 N Pennsylvania St.
Indianapolis, IN 46204
- --------------------------------------------
(Address of principal executive offices) (Zip code)
Freddie Jacobs
Unified Fund Services, Inc.
431 N. Pennsylvania St.
Indianapolis, IN 46204
- ------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 317-917-7000
Date of fiscal year end: 5/31
--------------------
Date of reporting period: 5/31/04
-------------------
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
Item 1. Reports to Stockholders.
[Logo]
CCMI Equity Fund
CCMI Bond Fund
CCMI Tax Exempt North Carolina Bond Fund
Annual Report to Shareholders
May 31, 2004
- --------------------------------------------------------------------------------
Not FDIC Insured | May Lose Value | No Bank Guarantee
- --------------------------------------------------------------------------------
<page>
CCMI Equity Fund
Management's Discussion & Analysis
Portfolio Managers: William H. Collier, IV and Mark A. Brommer
The CCMI Equity Fund (COEFX) achieved a total return of 16.07% (without the
effect of sales load) during the fiscal year ending May 31, 2004, versus an
18.31% return for the S&P 500. While we underperformed our benchmark for
this time period, we take pride in the fact that we outperformed the
majority of Large Cap Core Equity funds in the Lipper Universe. There are
obviously a number of factors that attributed to our underperformance, but
we feel it is primarily the result of being invested in higher quality
companies and more defensive in our sector weightings.
The best performing sector in the S&P 500 during this time frame was the
Materials sector, which the Fund participated in with a slightly overweight
position. The Energy sector was the next best performing sector, with the
Fund again having an overweight position. However, a relative
underweighting in the Consumer Discretionary and Industrial sectors
resulted in some of our underperformance. These under-weightings were the
result of concerns about the economic recovery in corporate profits and a
consumer that appeared to be overleveraged and lacking in job security. We
believed the tax credit refunds, home refinancings, and overly easy credit
conditions appeared to be nearing an end. Therefore, we continue to
underweight these sectors going forward.
Healthcare was a disappointment for the Fund as investors continued their
concern for the political issues and new discovery pipelines for the large
cap pharmaceutical companies. Valuations and dividend policies seem to
favor these companies now and then as attractive investments. However,
there remains a reluctance on investors to commit funds to this sector
until some of the political headwinds subside.
Another sector that underperformed the S&P 500 was Consumer Staples, where
the Fund had a market weighting. We continue to feel this sector offers
investors attractive valuations and total return prospects for companies
that are less sensitive to economic conditions.
In closing, we are proud of the results we achieved this past year,
especially in light of the underperformance by the larger, higher quality,
dividend paying companies that investors appeared to have less interest in
owning. As always, we remain committed to acting in our shareholders' best
interests.
1
<page>
Investment Results
Average Annual Total Returns
(for periods ended May 31, 2004)
Since Inception
One Month One Year Five Year (December 5, 1994)
------------- ------------ ------------- ------------------
CCMI Equity Fund * 1.04% 16.07% 0.23% 10.91%
S&P 500 Index ** 1.37% 18.31% -1.53% 11.87%
The performance quoted represents past performance, which does not
guarantee future results. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. The returns shown do not
reflect deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares. Current performance of the
Fund may be lower or higher than the performance quoted. The Fund's
investment objectives, risks, charges and expenses must be considered
carefully before investing. Performance data current to the most recent
month end may be obtained by calling 1-800-386-3111.
*Return figures reflect any change in price per share and assume the
reinvestment of all distributions. The sales load was eliminated on June
29, 2004. Had the sales load been included, the returns would have been as
follows: One Month: -4.75%, One Year: 9.43%, Five Year: -0.95%, Since
Inception (12/5/1994): 10.22%.
** The Index is an unmanaged benchmark that assumes reinvestment of all
distributions and excludes the effect of taxes and fees. The S&P 500 Index
is a widely recognized unmanaged index of equity prices and is
representative of a broader market and range of securities than is found in
the Fund's portfolio. Individuals cannot invest directly in the index.
Comparison of the Growth of a $10,000 Investment in the CCMI Equity Fund and
the S&P 500 Index
CCMI Equity Fund S&P 500 Index
($26,665) ($29,013)
------------------------ --------------------
12/5/94 10,000.00 10,000.00
5/31/95 11,555.10 11,923.51
5/31/96 14,318.10 15,311.64
5/31/97 18,362.84 19,813.75
5/31/98 22,745.00 25,890.89
5/31/99 26,361.16 31,336.94
5/31/00 30,611.35 34,617.85
5/31/01 27,765.49 30,966.18
5/31/02 24,584.12 26,675.44
5/31/03 22,972.74 24,522.74
5/31/04 26,664.57 29,012.87
The chart above assumes an initial investment of $10,000 made on December
5, 1994 (commencement of Fund operations) and held through May 31, 2004.
The chart above does not reflect the sales load, which was eliminated June
29, 2004. THE FUND'S RETURN REPRESENTS PAST PERFORMANCE AND DOES NOT
GUARANTEE FUTURE RESULTS. The returns shown do not reflect deduction of
taxes that a shareholder would pay on Fund distributions or the redemption
of Fund shares. Investment returns and principal values will fluctuate so
that your shares, when redeemed, may be worth more or less than their
original purchase price.
2
<page>
CCMI Bond Fund
Management's Discussion & Analysis
Portfolio Managers: James B. Stubbs, Jr. and Andrew Davis
The fixed-income markets have experienced above average levels of
volatility over the past 12 months. This volatility has been exacerbated by
traders as well as investors attempting to anticipate the actions the
Federal Reserve Board may take to slow the perceived onset of inflationary
pressures. Concern over the impact of high energy prices on the economic
expansion coupled with the fear that foreign demand for U.S. dollar
denominated bonds will wane have also contributed to the wide price swings
we have witnessed in the bond market in recent months. Bond prices rallied
toward the end of the first quarter, 2004 due to the so called "jobless
recovery" concern. At the time it seemed that little job creation was
occurring. This perception came to an abrupt end on April 2, 2004, when the
"jobless recovery" term began to disappear. The increase in nonfarm
payrolls was 308,000, as compared to the 120,000 jobs economists had been
expecting. That date may very well mark the end of the bull market for
bonds that we have enjoyed over the past several years. The Fund's stated
objective is to provide as high a level of current income as is consistent
with the preservation of capital. The Fund attempts to maintain a stable
income stream, which can prove difficult in this type of market. Below is
how the Fund performed over the past 12 months in light of this volatile
environment.
To begin, the distribution yield for the Fund approximated 4% for the
fiscal year 2004. The Fund distributed $0.4268 per share in income, and
$0.1287 per share in capital gains. As we previously mentioned, maintaining
a steady, reliable income stream is a goal of the Fund. We would not expect
the same level of capital gains distribution for fiscal 2005, as we believe
we will be able to offset any gains with market losses that have been
created as a result of the recent reduction in bond prices.
The Fund returned -1.84% (without the effect of sales load) for the latest
fiscal year ending May 31, 2004. This performance lagged the primary
benchmark, the Lehman Brothers Aggregate Index ("Index"), which returned
-0.44% for the same period. The primary reason for the Fund's
underperformance as it relates to the Index is the Fund's underweighting in
the mortgage sector. As 2004 began, interest rates remained at 45-year
lows. With that in mind, the managers of the Fund did not see value in
mortgage bonds. In a low rate environment prepayments tend to accelerate,
which is normally not favorable for mortgage holders. If prepayments were
received, the Fund would have been required to reinvest the prepayments at
lower market rates. That led to the decision to underweight the mortgage
segment of the index and attempt to garner increased incremental yield by
investing in callable Agency bonds. Once the good news concerning job
creation was released, the yield on the 10-year U.S. Treasury jumped from a
3.88% to a 4.15%, and continued to rise for the following few weeks. As a
result, the options on the callable bonds held in the Fund lost value, and
these agencies quickly began to be priced to maturity. Consequently, prices
fell for these bonds more than the mortgages. The mortgage sector
represents a little over one third of the Index, as compared to just 7% for
the Fund. The performance of this sector also far outpaced the overall
index, with 30-year Ginnie Mae and Freddie Mac mortgages returning 1.52%
and 1.68%, respectively. This was one of the markets best performing
sectors, and as a result of our underweighting, the Fund did not keep pace
with the index.
With the 2004 fiscal year now behind us, we believe the longer-term picture
remains favorable for the Fund. Since its inception on July 1, 2002, the
Fund has outpaced its Index, inclusive of the past 12 months. The total
return since inception for the Fund is 5.55% (without the effect of sales
load), on an annualized basis, versus 5.16% for the Index.
Shareholders of this Fund may wish to look at the longer time horizon in
evaluating the performance, as the past 12 months represent a rather unique
experience in terms of volatility and uncertainty in the fixed-income
markets. The Fund has taken corrective actions to more closely align the
portfolio with its Index. We believe that when the Federal Reserve begins
to increase the Fed Funds rate, a more "normal" type of bond market will
emerge, and we think the Fund is positioned to perform well in that type of
environment.
Thank you for your continued confidence and for your investment in the CCMI
Bond Fund.
3
<page>
Investment Results
- --------------------------------------------------------------------------------
Average Annual Total Returns
(for periods ended May 31, 2004)
Since Inception
One Month One Year (July 1, 2002)
------------- ------------ ------------------
CCMI Bond Fund * -0.66% -1.84% 5.55%
Lehman Brothers Aggregate -0.40% -0.44% 5.16%
Bond Index **
- --------------------------------------------------------------------------------
The performance quoted represents past performance, which does not
guarantee future results. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. The returns shown do not
reflect deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares. Current performance of the
Fund may be lower or higher than the performance quoted. The Fund's
investment objectives, risks, charges and expenses must be considered
carefully before investing. Performance data current to the most recent
month end may be obtained by calling 1-800-386-3111.
* Return figures reflect any change in price per share and assume the
reinvestment of all distributions. The sales load was eliminated on June
29, 2004. Had this load been included, the returns would have been as
follows: One Month: -5.13%, One Year: -6.25%, Since Inception (7/1/2002):
3.05%.
** The Index is an unmanaged benchmark that assumes reinvestment of all
distributions and excludes the effect of taxes and fees. The Lehman
Brothers Aggregate Bond Index is a widely recognized unmanaged index of
bond prices and is representative of a broader market and range of
securities than is found in the Fund's portfolio.
Comparison of the Growth of a $10,000 Investment in the CCMI Bond
Fund and the Lehman Brothers Aggregate Bond Index
Lehman Brothers
CCMI Bond Fund Aggregate Bond Index
($10,592) ($11,013)
---------------------- ----------------------------
7/1/02 10,000.00 10,000.00
8/31/02 10,377.23 10,292.00
11/30/02 10,483.52 10,408.00
2/28/03 10,963.38 10,779.00
5/31/03 11,296.84 11,062.00
8/31/03 10,877.23 10,739.00
11/30/03 11,102.10 10,948.00
2/29/04 11,390.78 11,268.00
5/31/04 11,089.45 11,013.00
The chart above assumes an initial investment of $10,000 made on July 1,
2002 (commencement of Fund operations) and held through May 31, 2004. The
chart above does not reflect the sales load, which was eliminated June 29,
2004. THE FUND'S RETURN REPRESENTS PAST PERFORMANCE AND DOES NOT GUARANTEE
FUTURE RESULTS. The returns shown do not reflect deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares. Investment returns and principal values will fluctuate so that your
shares, when redeemed, may be worth more or less than their original
purchase price.
4
<page>
CCMI Tax-Exempt North Carolina Bond Fund
Management's Discussion & Analysis
Portfolio Manager: Nat Siewers
This has been an interesting time to start a municipal bond mutual fund. On
12/31/03, an AAA 5 year municipal bond yielded 2.45%. On 5/31/04, this same
security had a yield of 3.14%. This represents an increase in the yield of
.69%. This is a significant move in the municipal market where volatility
is about two-thirds of the government market. On 12/31/03, an AAA 10 year
municipal bond was yielding 3.60%. Five months later on May 31, 2004, this
same bond had a yield of 4.06%, an increase in the yield of .46%.
This increase in the level of interest rates has caused the CCMI Tax Exempt
North Carolina Bond Fund to have a negative total return during this period
(1/8/04 to 5/31/04). The total return has been -1.52% (without the effect
of sales load). The Lehman Brothers 7 yr Municipal Bond Index (our target
index) has declined by -1.38%. This underperformance has been due to the
challenges of starting a new municipal bond fund in a very hostile
environment. Let me be more specific:
o As funds come to a new fund, they must be invested in a very liquid
security until they can be invested on a more permanent basis. The
short term liquid investments have an extremely low yield and in an
environment where the municipal yield curve is very steep, this has a
negative impact on the yield in the fund.
o As to buying more permanent longer term securities, this process
must be carried out as opportunities present themselves. The municipal
market is not liquid enough to rush into indiscriminate buying.
Municipals must be bought as they become available. This strategy may
result in a short term underperformance but it pays off in the long
run.
I am very optimistic that this fund will be a good performer when two things
happen:
o We must get through the current environment of rising interest
rates. This rising rate environment may last several months as the Fed
implements its tight money policy.
o The Fund should perform much better when new money comes in more
stable increments. I anticipate that this will happen in the near
future.
5
<page>
Investment Results
Average Annual Total Returns
(for periods ended May 31, 2004)
Since Inception
One Month (January 8, 2004)
-------------- --------------------
CCMI Tax-Exempt North
Carolina Bond Fund * 0.01% -1.52%
Lehman Brothers Municipal
7 Year Bond Index ** -0.20% -1.37%
The performance quoted represents past performance, which does not
guarantee future results. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. The
returns shown do not reflect deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
Current performance of the Fund may be lower or higher than the
performance quoted. The Fund's investment objectives, risks, charges
and expenses must be considered carefully before investing.
Performance data current to the most recent month end may be obtained
by calling 1-800-386-3111.
* Return figures reflect any change in price per share and assume the
reinvestment of all distributions. The sales load was eliminated June
29, 2004. Had the sales load been included, the returns would have
been as follows: One Month: -4.48%, Since Inception (1/8/2004):
-5.94%.
** The Index is an unmanaged benchmark that assumes reinvestment of
all distributions and excludes the effect of taxes and fees. The
Lehman Brothers Municipal 7 Year Bond Index is a widely recognized
unmanaged index of bond prices and is representative of a broader
market and range of securities than is found in the Fund's portfolio.
Comparison of the Growth of a $10,000 Investment in the CCMI
Tax-Exempt North Carolina Bond Fund and the Lehman Brothers Municipal
7 Year Bond Index
CCMI Tax-Exempt Lehman Brothers
North Carolina Bond Municipal 7 Year
Fund Bond Index
------------------------ ----------------------
1/8/04 10,000.00 10,000.00
1/31/04 10,096.59 10,055.00
2/29/04 10,201.79 10,217.89
3/31/04 10,132.37 10,131.04
4/30/04 9,846.99 9,882.83
5/31/04 9,847.83 9,863.06
The chart above assumes an initial investment of $10,000 made on
January 8, 2004 (commencement of Fund operations) and held through May
31, 2004. The chart above does not reflect the sales load, which was
eliminated June 29, 2004. THE FUND'S RETURN REPRESENTS PAST
PERFORMANCE AND DOES NOT GUARANTEE FUTURE RESULTS. The returns shown
do not reflect deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares. Investment returns and
principal values will fluctuate so that your shares, when redeemed,
may be worth more or less than their original purchase price.
6
<page>
CCMI Funds
CCMI Equity Fund
Schedule of Investments - May 31, 2004
Shares Common Stocks - 90.03% Value
- -------------------------------------------------------------------------------------------------------------
Communications - 1.66%
25,000 BellSouth Corp. $ 624,000
-------------------------------------------------------------------------------
35,000 Verizon Communications, Inc. 1,210,300
-------------------------------------------------------------------------------------------
1,834,300
-------------------------------------------------------------------------------------------
Consumer Non-Durables - 13.47%
25,000 American Italian Pasta Company 731,500
-------------------------------------------------------------------------------
30,000 Anheuser-Busch Co. 1,598,100
-------------------------------------------------------------------------------
30,400 Cadbury Schweppes Public Ltd. Co. (c) 1,048,800
-------------------------------------------------------------------------------
45,000 Constellation Brands, Inc. - Class A (a) 1,620,000
-------------------------------------------------------------------------------
40,000 General Mills, Inc. 1,842,000
-------------------------------------------------------------------------------
30,000 Kraft Foods, Inc. 895,800
-------------------------------------------------------------------------------
50,000 Leapfrog Enterprises, Inc. (a) 1,068,500
-------------------------------------------------------------------------------
70,000 Mattel, Inc. 1,223,600
-------------------------------------------------------------------------------
35,000 PepsiCo, Inc. 1,867,950
-------------------------------------------------------------------------------
30,000 Sealed Air Corp. (a) 1,508,100
-------------------------------------------------------------------------------
35,000 The Gillette Co. 1,508,150
-------------------------------------------------------------------------------------------
14,912,500
-------------------------------------------------------------------------------------------
Consumer Services - 6.00%
75,000 Comcast Corp. (a) 2,126,250
-------------------------------------------------------------------------------
15,000 Gannett Co., Inc. 1,317,000
-------------------------------------------------------------------------------
50,000 McDonald's Corp. 1,320,000
-------------------------------------------------------------------------------
80,000 Walt Disney Co. 1,877,600
-------------------------------------------------------------------------------------------
6,640,850
-------------------------------------------------------------------------------------------
Electronic Technology - 6.22%
35,000 Applied Materials, Inc. (a) 698,600
-------------------------------------------------------------------------------
75,000 Cisco Systems, Inc. (a) 1,661,250
-------------------------------------------------------------------------------
60,000 Commscope, Inc. (a) 1,035,000
-------------------------------------------------------------------------------
40,000 Electronics for Imaging, Inc. (a) 1,110,400
-------------------------------------------------------------------------------
45,000 Intel Corp. 1,284,750
-------------------------------------------------------------------------------
42,000 Texas Instruments, Inc. 1,096,620
-------------------------------------------------------------------------------------------
6,886,620
-------------------------------------------------------------------------------------------
Energy Minerals - 5.66%
17,500 ChevronTexaco Corp. 1,582,000
-------------------------------------------------------------------------------
22,500 ConocoPhillips Co. 1,649,925
-------------------------------------------------------------------------------
70,000 Exxon Mobil Corp. 3,027,500
-------------------------------------------------------------------------------------------
6,259,425
-------------------------------------------------------------------------------------------
Finance - 19.48%
38,000 American Express Co. 1,926,600
-------------------------------------------------------------------------------
26,200 American International Group, Inc. 1,920,460
-------------------------------------------------------------------------------
27,500 Bank of America Corp. 2,286,075
-------------------------------------------------------------------------------
1,250 Berkshire Hathaway, Inc. - Class B (a) 3,715,000
-------------------------------------------------------------------------------
52,066 Citigroup, Inc. 2,417,424
-------------------------------------------------------------------------------
40,100 Duke Realty Corp. 1,297,636
-------------------------------------------------------------------------------
50,000 J.P. Morgan Chase & Co. 1,842,000
-------------------------------------------------------------------------------
45,000 Jefferson-Pilot Corp. 2,309,850
-------------------------------------------------------------------------------
20,000 Merrill Lynch & Co., Inc. 1,136,000
-------------------------------------------------------------------------------
30,000 Prologis 961,800
-------------------------------------------------------------------------------
40,000 Washington Mutual, Inc. 1,747,200
-------------------------------------------------------------------------------------------
21,560,045
-------------------------------------------------------------------------------------------
Health Services - 1.50%
40,000 Laboratory Corp. of America Holdings (a) 1,654,400
-------------------------------------------------------------------------------------------
See accompanying notes which are an integral part of the financial statements.
7
<page>
CCMI Funds
CCMI Equity Fund
Schedule of Investments - May 31, 2004 - continued
Shares Common Stocks - 90.03% - continued Value
- -------------------------------------------------------------------------------------------------------------
Health Technology - 10.45%
35,000 Abbott Laboratories, Inc. $ 1,442,350
-------------------------------------------------------------------------------
15,000 Amgen, Inc. (a) 820,500
-------------------------------------------------------------------------------
3,500 Hospira, Inc. (a) 89,740
-------------------------------------------------------------------------------
30,000 Johnson & Johnson 1,671,300
-------------------------------------------------------------------------------
37,000 Merck & Co., Inc. 1,750,100
-------------------------------------------------------------------------------
80,000 Pfizer, Inc. 2,827,200
-------------------------------------------------------------------------------
65,000 Schering-Plough Corp. 1,098,500
-------------------------------------------------------------------------------
52,000 Wyeth 1,872,000
-------------------------------------------------------------------------------------------
11,571,690
-------------------------------------------------------------------------------------------
Industrial Services - 1.65%
32,000 Schlumberger Ltd. 1,829,440
-------------------------------------------------------------------------------------------
Non-Energy Minerals - 2.29%
60,000 Alcoa, Inc. 1,878,000
-------------------------------------------------------------------------------
10,000 Nucor Corp. 658,500
-------------------------------------------------------------------------------------------
2,536,500
-------------------------------------------------------------------------------------------
Producer Manufacturing - 5.34%
45,000 General Electric Co. 1,400,400
-------------------------------------------------------------------------------
85,000 Molex, Inc. - Class A 2,138,600
-------------------------------------------------------------------------------
28,000 United Technologies Corp. 2,369,080
-------------------------------------------------------------------------------------------
5,908,080
-------------------------------------------------------------------------------------------
Retail Trade - 1.88%
55,000 Costco Wholesale Corp. 2,077,900
-------------------------------------------------------------------------------------------
Technology Services - 9.69%
30,000 Autodesk, Inc. 1,075,800
-------------------------------------------------------------------------------
32,000 Automatic Data Processing, Inc. 1,421,760
-------------------------------------------------------------------------------
45,000 Diebold, Inc. 2,210,850
-------------------------------------------------------------------------------
32,000 First Data Corp. 1,385,280
-------------------------------------------------------------------------------
15,000 International Business Machines Corp. 1,328,850
-------------------------------------------------------------------------------
75,000 Microsoft Corp. 1,976,250
-------------------------------------------------------------------------------
45,000 Synopsys, Inc. (a) 1,332,000
-------------------------------------------------------------------------------------------
10,730,790
-------------------------------------------------------------------------------------------
Transportation - 0.78%
12,000 United Parcel Services, Inc. 860,640
-------------------------------------------------------------------------------------------
Utilities - 3.96%
30,000 Apache Corp. 1,210,800
-------------------------------------------------------------------------------
45,000 Black Hills Corp. 1,318,500
-------------------------------------------------------------------------------
30,000 Progress Energy, Inc. 1,278,300
-------------------------------------------------------------------------------
20,000 The Southern Co. 578,400
-------------------------------------------------------------------------------------------
4,386,000
-------------------------------------------------------------------------------------------
Total Common Stocks (Cost $76,587,397) 99,649,180
-------------------------------------------------------------------------------------------
Money Market Securities - 8.28%
3,866,401 Fifth Third Institutional Money Market Fund, 0.96% (b) 3,866,401
-------------------------------------------------------------------------------
Goldman Sachs Financial Square Fund -
5,300,000 Money Market Fund, 0.93% (b) 5,300,000
-------------------------------------------------------------------------------------------
Total Money Market (Cost $9,166,401) 9,166,401
-------------------------------------------------------------------------------------------
Total Investments (Cost $85,753,798) - 98.31% 108,815,581
-------------------------------------------------------------------------------------------
Other assets in excess of liabilities - 1.69% 1,874,662
-------------------------------------------------------------------------------------------
Total Net Assets - 100.00% $ 110,690,243
-------------------------------------------------------------------------------------------
(a) Non-income producing.
(b) Variable rate security; the coupon rate shown represents
the rate at May 31, 2004.
(c) American Depositary Receipt.
See accompanying notes which are an integral part of the financial statements.
8
<page>
CCMI Funds
CCMI Bond Fund
Schedule of Investments - May 31, 2004
Principal
Amount Fixed Income Securities - 87.74% Value
- -------------------------------------------------------------------------------------------------------------
Asset Backed Securities - 0.81%
Finance - Retail - 0.81%
$ 1,000,000 Citibank Credit Card Issuance Trust, 4.15%, 7/7/2017 $ 908,407
-------------------------------------------------------------------------------------------
Total Asset Backed Securities (Cost $897,560) 908,407
-------------------------------------------------------------------------------------------
Corporate Bonds - 34.57%
Air Transportation - 0.09%
111,000 United Parcel Service, Inc., Note, 5.25%, 9/15/2017 105,135
-------------------------------------------------------------------------------------------
Banking - 3.40%
191,000 BT Capital Trust, Company Guarantee, Series B1, 7.90%, 1/15/2027 203,286
-------------------------------------------------------------------------------
500,000 Bank of America Corp., Sub. Note, Series NOTZ, 6.50%, 5/15/2017 503,678
-------------------------------------------------------------------------------
350,000 BankBoston Capital Trust, Company Guarantee, Series B, 8.25%, 12/15/2026 384,291
-------------------------------------------------------------------------------
1,500,000 Capital One Bank, 6.50%, 6/13/2013 1,532,866
-------------------------------------------------------------------------------
100,000 Countrywide Home Loans, Inc., Company Guarantee, Series MTNJ, 7.00%, 7/27/2016 99,173
-------------------------------------------------------------------------------
188,000 NB Capital Trust II, Company Guarantee, 7.83%, 12/15/2026 201,693
-------------------------------------------------------------------------------
1,000,000 Washington Mutual, Inc., Sub. Note, 4.625%, 4/1/2014 911,770
-------------------------------------------------------------------------------------------
3,836,757
-------------------------------------------------------------------------------------------
Finance - Retail - 2.95%
865,000 Commercial Credit Co., Note, 6.625%, 6/1/2015 932,633
-------------------------------------------------------------------------------
1,000,000 Household Finance Corp., Sr. Note, Series MTN, 2.10%, 2/28/2008 (a) 1,011,642
-------------------------------------------------------------------------------
166,000 Household Finance Corp., Sr. Note, Series NOT1, 7.50%, 4/15/2017 167,478
-------------------------------------------------------------------------------
1,250,000 SLM Corp., Note, 3.8872%, 2/1/2014 (a) 1,212,975
-------------------------------------------------------------------------------------------
3,324,728
-------------------------------------------------------------------------------------------
Financial Intermediaries - 2.81%
500,000 Citigroup, Inc., Note., 6.50%, 1/18/2011 544,643
-------------------------------------------------------------------------------
367,000 Citigroup, Inc., Sub. Note, 6.88%, 12/18/2015 401,852
-------------------------------------------------------------------------------
250,000 Citigroup, Inc., Sub. Note, 7.25%, 10/1/2010 281,327
-------------------------------------------------------------------------------
1,000,000 Goldman Sachs Group, Inc., Note, 6.60%, 1/15/2012 1,076,531
-------------------------------------------------------------------------------
900,000 Lehman Brothers Holdings, Inc., Note, Series MTNG, 6.75%, 7/1/2022 868,125
-------------------------------------------------------------------------------------------
3,172,478
-------------------------------------------------------------------------------------------
Financial Services - 8.31%
1,000,000 Beneficial Corp., Note, Series MTNE, 6.47%, 11/17/2008 1,079,514
-------------------------------------------------------------------------------
250,000 CIT Capital Trust I, Company Guarantee, 7.70%, 2/15/2027 262,596
-------------------------------------------------------------------------------
1,250,000 Credit Suisse First Boston USA, Inc., Note, 6.125%, 11/15/2011 1,315,555
-------------------------------------------------------------------------------
1,000,000 General Electric Capital Corp., Sr. Note, Series MTNA, 4.00%, 10/26/2012 974,565
-------------------------------------------------------------------------------
500,000 General Electric Capital Corp., Sr. Note, Series MTN, 5.10%, 4/25/2018 481,351
-------------------------------------------------------------------------------
800,000 JPM Capital Trust II, Bond, 7.95%, 2/1/2027 859,590
-------------------------------------------------------------------------------
350,000 JP Morgan & Co, Inc., Sub. Note, 5.75%, 10/15/2008 368,572
-------------------------------------------------------------------------------
1,000,000 Morgan Stanley, Note, 6.60%, 4/1/2012 1,074,923
-------------------------------------------------------------------------------
1,500,000 Morgan Stanley, Sr. Note, Series MTNC, 4.28%, 11/1/2013 (a) 1,501,485
-------------------------------------------------------------------------------
1,500,000 Morgan Stanley, Note, 3.875%, 1/15/2009 1,461,011
-------------------------------------------------------------------------------------------
9,379,162
-------------------------------------------------------------------------------------------
Food & Drug Manufacturers & Retailers - 3.49%
200,000 Anheuser-Busch Cos, Inc., Deb., 7.125%, 7/1/2017 220,970
-------------------------------------------------------------------------------
350,000 Archer-Daniels-Midland, Deb., 8.875%, 4/15/2011 428,689
-------------------------------------------------------------------------------
1,250,000 Coca-Cola Co., Note, 5.75%, 3/15/2011 1,325,384
-------------------------------------------------------------------------------
1,000,000 Kraft Foods, Inc., Note, 5.25%, 10/1/2013 969,463
-------------------------------------------------------------------------------
1,000,000 Pepsico, Inc., Note, 3.20%, 5/15/2007 991,429
-------------------------------------------------------------------------------------------
3,935,935
-------------------------------------------------------------------------------------------
See accompanying notes which are an integral part of the financial statements.
9
<page>
CCMI Funds
CCMI Bond Fund
Schedule of Investments - May 31, 2004
Principal
Amount Fixed Income Securities - 87.74% - continued Value
- -------------------------------------------------------------------------------------------------------------
Corporate Bonds - 34.57% - continued
Industrial Products & Equipment - 0.51%
$ 300,000 Johnson Controls, Inc., Deb., 8.20%, 6/15/2024 $ 312,897
-------------------------------------------------------------------------------
250,000 Tyco International Group, Company Guarantee, 6.75%, 2/15/2011 268,983
-------------------------------------------------------------------------------------------
581,880
-------------------------------------------------------------------------------------------
Insurance - 1.18%
100,000 Aetna, Inc., Deb., 7.25%, 8/15/2023 109,951
-------------------------------------------------------------------------------
1,005,000 GE Global Insurance Holding Corp., Note, 6.45%, 3/1/2019 1,016,284
-------------------------------------------------------------------------------
100,000 Kemper Corp., Note, Series MTN, 8.875%, 10/17/2009 116,188
-------------------------------------------------------------------------------
85,000 Zurich Reinsurance Centre Holdings, Sr. Note, 7.125%, 10/15/2023 84,128
-------------------------------------------------------------------------------------------
1,326,551
-------------------------------------------------------------------------------------------
Metals, Minerals & Mining - 0.74%
670,000 Alcoa, Inc., Note, 6.50%, 6/1/2011 730,398
-------------------------------------------------------------------------------
105,000 BHP Billiton Finance, Company Guarantee, 4.80%, 4/15/2013 101,826
-------------------------------------------------------------------------------------------
832,224
-------------------------------------------------------------------------------------------
Petroleum Products & Services - 0.47%
505,000 Amerada Hess Corp., Note, 6.65%, 8/15/2011 534,197
-------------------------------------------------------------------------------------------
Retailers - 0.22%
225,000 May Department Stores Co., Deb., 7.50%, 6/1/2015 251,791
-------------------------------------------------------------------------------------------
Sovereign - 1.33%
500,000 Tennessee Valley Authority, Bond, Series E, 6.25%, 12/15/2017 533,971
-------------------------------------------------------------------------------
1,000,000 United Mexican States, Note, 5.875%, 1/15/2014 962,500
-------------------------------------------------------------------------------------------
1,496,471
-------------------------------------------------------------------------------------------
Technology Services - 2.01%
1,800,000 International Business Machines Corp., Deb., 8.375%, 11/1/2019 2,267,849
-------------------------------------------------------------------------------------------
Telecommunications & Cellular - 4.36%
-------------------------------------------------------------------------------
634,000 GTE Corp., Deb., 7.90%, 2/1/2027 680,749
-------------------------------------------------------------------------------
800,000 Nynex Capital Funding Co., Company Guarantee, Series MTNB, 8.23%, 10/15/2009 925,330
-------------------------------------------------------------------------------
800,000 Southwestern Bell Telephone Co., Deb., 6.625%, 9/1/2024 791,753
-------------------------------------------------------------------------------
1,300,000 Southwestern Bell Telephone Co., Deb., 7.00%, 7/1/2015 1,428,346
-------------------------------------------------------------------------------
1,000,000 Verizon Global Funding, Note, 6.875%, 6/15/2012 1,095,769
-------------------------------------------------------------------------------------------
4,921,947
-------------------------------------------------------------------------------------------
Utilities - 2.70%
360,000 Cleveland Electric/Toledo, Note, 7.13%, 7/1/2007 393,467
-------------------------------------------------------------------------------
250,000 Entergy Louisiana, Inc., 1st Mtg. Bond, 6.50%, 3/1/2008 254,246
-------------------------------------------------------------------------------
300,000 Indianapolis Power & Light Co., 1st Mtg. Bond, Series MBIA, 7.375%, 8/1/2007 332,200
-------------------------------------------------------------------------------
150,000 Iowa Electric Light & Power, Collateral Trust, 6.00%, 10/1/2008 159,505
-------------------------------------------------------------------------------
915,000 Mississippi Power Co., 1st Mtg. Bond, 6.875%, 12/1/2025 933,532
-------------------------------------------------------------------------------
665,000 Pennsylvania Electric Co., Sr. Note, 6.625%, 4/1/2019 711,459
-------------------------------------------------------------------------------
250,000 Virginia Electric & Power Co., 1st Ref. Mtg., Series MBI, 7.00%, 1/1/2024 256,589
-------------------------------------------------------------------------------------------
3,040,998
-------------------------------------------------------------------------------------------
Total Corporate Bonds (Cost $38,946,067) 39,008,103
-------------------------------------------------------------------------------------------
See accompanying notes which are an integral part of the financial statements.
10
<page>
CCMI Funds
CCMI Bond Fund
Schedule of Investments - May 31, 2004
Principal
Amount Fixed Income Securities - 87.74% - continued Value
- -------------------------------------------------------------------------------------------------------------
Government Agencies - 44.26%
Federal Home Loan Mortgage Corporation - 9.78%
$ 1,200,000 Federal Home Loan Mortgage Corporation, Note, 5.20%, 3/5/2019 $ 1,126,410
-------------------------------------------------------------------------------
1,000,000 Federal Home Loan Mortgage Corporation, Note, 5.125%, 7/15/2009 1,003,988
-------------------------------------------------------------------------------
500,000 Federal Home Loan Mortgage Corporation, Note, Series MTN, 4.65%, 8/27/2010 496,154
-------------------------------------------------------------------------------
1,000,000 Federal Home Loan Mortgage Corporation, Note, Series MTN, 6.00%, 6/27/2017 1,005,258
-------------------------------------------------------------------------------
700,000 Federal Home Loan Mortgage Corporation, Note, Series MTN3, 4.05%, 11/17/2009 689,043
-------------------------------------------------------------------------------
1,000,000 Federal Home Loan Mortgage Corporation, Note, Series MTN, 5.55%, 10/30/2017 963,220
-------------------------------------------------------------------------------
3,000,000 Federal Home Loan Mortgage Corporation, Sub. Note, 6.25%, 3/5/2012 3,142,824
-------------------------------------------------------------------------------
2,500,000 Federal Home Loan Mortgage Corporation, Sub. Note, 6.375%, 8/1/2011 2,611,600
-------------------------------------------------------------------------------------------
11,038,497
-------------------------------------------------------------------------------------------
Federal National Mortgage Association - 12.31%
500,000 Federal National Mortgage Association, Unsecd. Note, 3.80%, 7/14/2010 477,620
-------------------------------------------------------------------------------
500,000 Federal National Mortgage Association, Unsecd. Note, 4.70%, 5/13/2013 485,298
-------------------------------------------------------------------------------
2,500,000 Federal National Mortgage Association, Unsecd. Note, 5.375%, 7/16/2018 2,436,370
-------------------------------------------------------------------------------
250,000 Federal National Mortgage Association, Unsecd. Note, 5.50%, 4/23/2024 233,183
-------------------------------------------------------------------------------
2,500,000 Federal National Mortgage Association, Unsecd. Note, 5.75%, 11/7/2017 2,501,855
-------------------------------------------------------------------------------
1,500,000 Federal National Mortgage Association, Unsecd. Note, 5.10%, 6/26/2018 1,433,478
-------------------------------------------------------------------------------
2,000,000 Federal National Mortgage Association, Unsecd. Note, 6.05%, 8/18/2023 1,968,324
-------------------------------------------------------------------------------
1,000,000 Federal National Mortgage Association, Unsecd. Note, 6.20%, 6/13/2017 1,042,244
-------------------------------------------------------------------------------
600,000 Federal National Mortgage Association, Unsecd. Note, 6.25%, 2/28/2017 625,064
-------------------------------------------------------------------------------
1,000,000 Federal National Mortgage Association, Unsecd. Note, 3.25%, 2/15/2009 960,280
-------------------------------------------------------------------------------
1,250,000 Federal National Mortgage Association, Unsecd. Note, Series MTN, 5.50%,
11/8/2016 1,243,851
-------------------------------------------------------------------------------
500,000 Federal National Mortgage Association, Unsecd. Sub. Note, 5.125%, 1/2/2014 484,383
-------------------------------------------------------------------------------------------
13,891,950
-------------------------------------------------------------------------------------------
Federal Home Loan Bank - 22.17%
1,000,000 Federal Home Loan Bank , Unsecd. Bond, 5.00%, 7/17/2018 930,548
-------------------------------------------------------------------------------
1,250,000 Federal Home Loan Bank , Unsecd. Bond, 5.25%, 12/10/2013 1,225,465
-------------------------------------------------------------------------------
1,000,000 Federal Home Loan Bank , Unsecd. Bond, 5.125%, 4/1/2019 958,328
-------------------------------------------------------------------------------
865,000 Federal Home Loan Bank , Unsecd. Bond, 5.30%, 7/23/2018 824,099
-------------------------------------------------------------------------------
1,000,000 Federal Home Loan Bank , Unsecd. Bond, 4.40%, 3/30/2011 970,084
-------------------------------------------------------------------------------
1,600,000 Federal Home Loan Bank , Unsecd. Bond, 5.50%, 8/7/2018 1,547,336
-------------------------------------------------------------------------------
1,000,000 Federal Home Loan Bank , Unsecd. Bond, Series 4R18, 6.125%, 11/5/2018 990,435
-------------------------------------------------------------------------------
460,000 Federal Home Loan Bank , Unsecd. Bond, Series 5D18, 6.125%, 11/5/2018 455,839
-------------------------------------------------------------------------------
1,000,000 Federal Home Loan Bank , Unsecd. Bond, Series DJ18, 5.75%, 2/5/2018 994,923
-------------------------------------------------------------------------------
733,333 Federal Home Loan Bank , Unsecd. Bond, Series GA17, 5.875%, 9/19/2017 733,882
-------------------------------------------------------------------------------
2,500,000 Federal Home Loan Bank , Unsecd. Bond, Series HG08, 1.74%, 3/3/2008 (a) 2,499,507
-------------------------------------------------------------------------------
1,150,000 Federal Home Loan Bank , Unsecd. Bond, Series IG18, 5.37%, 3/19/2018 1,120,757
-------------------------------------------------------------------------------
1,700,000 Federal Home Loan Bank , Unsecd. Bond, Series IM13, 2.10%, 6/25/2013 (a) 1,704,536
-------------------------------------------------------------------------------
1,250,000 Federal Home Loan Bank , Unsecd. Bond, Series IT18, 5.24%, 3/26/2018 1,207,674
-------------------------------------------------------------------------------
1,000,000 Federal Home Loan Bank , Unsecd. Bond, Series JU17, 5.70%, 11/21/2017 993,201
-------------------------------------------------------------------------------
2,000,000 Federal Home Loan Bank , Unsecd. Bond, Series LU08, 1.79%, 3/24/2008 (a) 1,998,544
-------------------------------------------------------------------------------
1,000,000 Federal Home Loan Bank , Unsecd. Bond, Series MD18, 5.00%, 5/8/2018 974,058
-------------------------------------------------------------------------------
1,000,000 Federal Home Loan Bank , Unsecd. Bond, Series QR18, 5.05%, 6/26/2018 941,915
-------------------------------------------------------------------------------
1,000,000 Federal Home Loan Bank , Unsecd. Bond, Series QS18, 5.00%, 6/26/2018 938,091
-------------------------------------------------------------------------------
1,000,000 Federal Home Loan Bank , Unsecd. Bond, Series RC18, 5.05%, 6/18/2018 935,008
-------------------------------------------------------------------------------
400,000 Federal Home Loan Bank , Unsecd. Bond, Series RH18, 5.00%, 6/12/2018 379,463
-------------------------------------------------------------------------------
1,010,000 Federal Home Loan Bank , Unsecd. Bond, Series TT23, 5.25%, 6/5/2023 919,258
-------------------------------------------------------------------------------
771,429 Federal Home Loan Bank , Unsecd. Bond, Series YA12, 5.25%, 12/3/2012 769,315
-------------------------------------------------------------------------------------------
25,012,266
-------------------------------------------------------------------------------------------
Total Government Agencies (Cost $50,750,692) 49,942,713
- -------------------------------------------------------------------------------------------------------------
See accompanying notes which are an integral part of the financial statements.
11
<page>
CCMI Funds
CCMI Bond Fund
Schedule of Investments - May 31, 2004
Principal
Amount Fixed Income Securities - 87.74% - continued Value
- -------------------------------------------------------------------------------------------------------------
Mortgage Backed Securities - 7.21%
Banking - 1.68%
$ 2,000,000 Wells Fargo Mortgaged Backed Securities, 4.63%, 10/25/2033 (a) $ 1,901,948
-------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corporation - 0.06%
62,317 Federal Home Loan Mortgage Corporation, Pool N98839, 7.00%, 5/1/2007 64,055
-------------------------------------------------------------------------------------------
Government National Mortgage Association - 5.47%
352,682 Government National Mortgage Association, Pool 494081, 7.00%, 8/15/2014 376,867
-------------------------------------------------------------------------------
234,984 Government National Mortgage Association, Pool 544525, 7.00%, 5/15/2031 248,664
-------------------------------------------------------------------------------
1,173,354 Government National Mortgage Association, Pool 565504, 5.50%, 9/15/2032 1,168,852
-------------------------------------------------------------------------------
525,257 Government National Mortgage Association, Pool 780758, 7.00%, 4/15/2013 561,517
-------------------------------------------------------------------------------
867,801 Government National Mortgage Association, Pool 606831, 5.50%, 9/15/2033 864,202
-------------------------------------------------------------------------------
1,000,000 Government National Mortgage Association, Pool 610956, 4.50%, 5/15/2019 980,385
-------------------------------------------------------------------------------
1,000,000 Government National Mortgage Association, Pool 610964, 4.50%, 5/15/2019 980,385
-------------------------------------------------------------------------------
992,213 Government National Mortgage Association, Pool 622990, 5.50%, 11/15/2033 988,097
-------------------------------------------------------------------------------------------
6,168,969
-------------------------------------------------------------------------------------------
Total Mortgage Backed Securities (Cost $8,166,825) 8,134,972
-------------------------------------------------------------------------------------------
Long-Term Municipals - 0.89%
California - 0.25%
250,000 Leland Stanford Jr University, Revenue Bonds, USA Guaranteed, 6.875%, 2/1/2024 282,840
-------------------------------------------------------------------------------------------
Oklahoma - 0.64%
620,000 Choctaw County, OK IDA, Revenue Bonds, USA Guaranteed, 8.00%, 7/1/2012 726,584
-------------------------------------------------------------------------------------------
Total Long-Term Municipals (Cost $989,285) 1,009,424
-------------------------------------------------------------------------------------------
Total Fixed Income Securities (Cost $8,166,825) 99,003,619
-------------------------------------------------------------------------------------------
Shares Preferred Stocks - 5.15%
- ---------------
Banking - 0.52%
20,000 Bank of America Corp, Pfd. 484,200
-------------------------------------------------------------------------------
4,000 UBS Preferred Funding Trust IV, Pfd. 99,000
-------------------------------------------------------------------------------------------
583,200
-------------------------------------------------------------------------------------------
Financial Intermediaries - 2.14%
22,700 ML Preferred Capital Trust V, Perpetual Series, Pfd. 587,930
-------------------------------------------------------------------------------
27,000 Saturn-GS Group, Series GS,Pfd. 583,200
-------------------------------------------------------------------------------
15,000 Wells Fargo Capital Trust VII, Pfd. 340,500
-------------------------------------------------------------------------------
15,800 Wells Fargo Capital Trust VIII, Pfd. 349,970
-------------------------------------------------------------------------------
25,000 Wells Fargo Capital Trust IX, Pfd. 550,000
-------------------------------------------------------------------------------------------
2,411,600
-------------------------------------------------------------------------------------------
Financial Services - 1.76%
-------------------------------------------------------------------------------
31,000 ABN Amro Capital Funding Trust VII, Pfd. 721,060
-------------------------------------------------------------------------------
15,000 BAC Capital Trust III, Pfd. 380,850
-------------------------------------------------------------------------------
10,150 Citigroup Capital IX, Pfd 237,713
-------------------------------------------------------------------------------
14,350 Citigroup Capital X, Pfd 343,969
-------------------------------------------------------------------------------
11,500 Wachovia Preferred Funding, Series A, Pfd. 307,050
-------------------------------------------------------------------------------------------
1,990,642
-------------------------------------------------------------------------------------------
Insurance - 0.40%
6,400 ING Groep N.V., Pfd. 162,752
-------------------------------------------------------------------------------
12,000 ING Groep N.V., Perpetual Series, Pfd. 288,000
-------------------------------------------------------------------------------------------
450,752
-------------------------------------------------------------------------------------------
See accompanying notes which are an integral part of the financial statements.
12
<page>
CCMI Funds
CCMI Bond Fund
Schedule of Investments - May 31, 2004
Shares Preferred Stocks - 5.15% - continued Value
- -------------------------------------------------------------------------------------------------------------
Sovereign Agency - 0.33%
5,000 Fannie Mae, Pfd. 240,000
-------------------------------------------------------------------------------
5,500 Tennessee Valley Authority, Series D, Pfd 131,890
-------------------------------------------------------------------------------------------
371,890
-------------------------------------------------------------------------------------------
Total Preferred Stocks (Cost $6,101,589) 5,808,084
-------------------------------------------------------------------------------------------
Money Market Securities - 5.88%
4,383,029 Fifth Third Institutional Money Market Fund, 0.96% (a) $ 4,383,029
-------------------------------------------------------------------------------
2,250,000 Goldman Sachs Financial Square Money Market Fund, 0.93% (a) 2,250,000
-------------------------------------------------------------------------------------------
Total Money Market Securities (Cost $6,633,029) 6,633,029
-------------------------------------------------------------------------------------------
Total Investments - 98.77% (Cost $112,485,047) 111,444,732
-------------------------------------------------------------------------------------------
Other assets in excess of liabilities - 1.23% 1,389,612
-------------------------------------------------------------------------------------------
Total Net Assets - 100.00% $112,834,344
-------------------------------------------------------------------------------------------
(a) Variable rate security, rate shown is as of May 31, 2004.
See accompanying notes which are an integral part of the financial statements.
13
<page>
CCMI Funds
CCMI Tax-Exempt North Carolina Bond Fund
Schedule of Investments - May 31, 2004
Principal
Amount Long-Term Municipals - 98.48% Value
- -------------------------------------------------------------------------------------------------------------
Certificates of Participation - 27.50%
$ 950,000 Forsyth County, NC, 5.00%, 10/1/2015 $ 1,005,698
-------------------------------------------------------------------------------
500,000 Brunswick County, NC, 5.00%, 4/1/2019 516,840
-------------------------------------------------------------------------------
330,000 Buncombe County, NC, 5.00%, 10/1/2015 351,232
-------------------------------------------------------------------------------
500,000 Burlington, NC, 5.00%, 4/1/2019 518,845
-------------------------------------------------------------------------------
500,000 Cary, NC, 5.00%, 12/1/2016 525,050
-------------------------------------------------------------------------------
500,000 Charlotte, NC, 5.00%, 6/1/2018 517,950
-------------------------------------------------------------------------------
500,000 Dare County, NC, 5.00%, 6/1/2023 507,680
-------------------------------------------------------------------------------
500,000 Iredell County, NC, 4.00%, 10/1/2016 488,545
-------------------------------------------------------------------------------
500,000 Iredell County, NC, 5.25%, 10/1/2020 530,625
-------------------------------------------------------------------------------
500,000 North Carolina State, 4.50%, 6/1/2022 477,990
-------------------------------------------------------------------------------
500,000 New Hanover County, NC, 5.00%, 3/1/2020 517,915
-------------------------------------------------------------------------------
500,000 Pitt County, NC, 5.30%, 4/1/2021 527,815
-------------------------------------------------------------------------------
500,000 Randolph County, NC, 5.00%, 6/1/2016 533,015
-------------------------------------------------------------------------------
400,000 Union County, NC, 5.00%, 6/1/2017 418,272
-------------------------------------------------------------------------------
500,000 Wilmington, NC, 5.35%, 6/1/2024 521,580
-------------------------------------------------------------------------------
1,000,000 Winston-Salem, NC, 5.00%, 6/1/2016 1,049,940
-------------------------------------------------------------------------------------------
9,008,992
-------------------------------------------------------------------------------------------
Correctional Facilities - 3.07%
500,000 North Carolina Infrastructure Finance Corp., 3.00%, 2/1/2010 483,505
-------------------------------------------------------------------------------
500,000 North Carolina Infrastructure Finance Corp., 5.00%, 10/1/2017 521,555
-------------------------------------------------------------------------------------------
1,005,060
-------------------------------------------------------------------------------------------
Education - 9.19%
500,000 North Carolina State, 5.00%, 4/1/2014 534,550
-------------------------------------------------------------------------------
500,000 North Carolina State University, NC, 5.00%, 10/1/2014 540,200
-------------------------------------------------------------------------------
500,000 North Carolina State University, NC, 5.125%, 12/15/2016 530,995
-------------------------------------------------------------------------------
600,000 University of North Carolina, NC, 0.00%, 8/01/2017 320,568
-------------------------------------------------------------------------------
500,000 University, NC, 5.375%, 4/01/2022 532,215
-------------------------------------------------------------------------------
500,000 University, NC, 5.40%, 5/15/2016 550,730
-------------------------------------------------------------------------------------------
3,009,258
-------------------------------------------------------------------------------------------
General Obligation - 27.61%
620,000 Apex, NC, 2.00%, 2/1/2006 620,496
-------------------------------------------------------------------------------
500,000 Brunswick County, NC, 3.25%, 2/1/2014 460,975
-------------------------------------------------------------------------------
500,000 Carteret County, NC, 3.50%, 5/1/2016 455,795
-------------------------------------------------------------------------------
500,000 Cary, NC, 4.00%, 6/1/2016 485,600
-------------------------------------------------------------------------------
500,000 Chatham County, NC, 4.00%, 4/1/2015 493,060
-------------------------------------------------------------------------------
500,000 Craven County, NC, 3.00%, 6/1/2010 484,935
-------------------------------------------------------------------------------
500,000 Durham County, NC, 4.25%, 5/1/2016 497,210
-------------------------------------------------------------------------------
435,000 Durham County, NC, 4.50%, 5/1/2023 417,317
-------------------------------------------------------------------------------
500,000 Durham, NC, 5.00%, 2/1/2007 533,970
-------------------------------------------------------------------------------
500,000 Emerald Isle, NC, 2.75%, 2/1/2005 504,455
-------------------------------------------------------------------------------
500,000 Emerald Isle, NC, 2.75%, 2/1/2010 479,775
-------------------------------------------------------------------------------
500,000 Forsyth County, NC, 3.00%, 8/1/2008 502,520
-------------------------------------------------------------------------------
500,000 Gaston County, NC, 3.00%, 51/2009 496,605
-------------------------------------------------------------------------------
600,000 Haywood County, NC, 4.40%, 6/1/2020 583,866
-------------------------------------------------------------------------------
500,000 North Carolina State, 4.50%, 5/1/2019 500,345
-------------------------------------------------------------------------------
500,000 North Carolina State, 4.75%, 3/1/2015 529,605
-------------------------------------------------------------------------------
500,000 Randolph County, NC, 3.00%, 6/1/2012 467,940
-------------------------------------------------------------------------------
500,000 Wake County, NC, 4.50%, 3/1/2009 531,095
-------------------------------------------------------------------------------------------
9,045,564
-------------------------------------------------------------------------------------------
See accompanying notes which are an integral part of the financial statements.
14
<page>
CCMI Funds
CCMI Tax-Exempt North Carolina Bond Fund
Schedule of Investments - May 31, 2004
Principal
Amount Long-Term Municipals - 98.48% - continued Value
- -------------------------------------------------------------------------------------------------------------
Healthcare - 8.01%
$ 500,000 Charlotte-Mecklenberg Hospital Authority, NC, 5.00%, 1/15/2013 $ 524,750
-------------------------------------------------------------------------------
500,000 Charlotte-Mecklenberg Hospital Authority, NC, 5.00%, 1/15/2016 515,865
-------------------------------------------------------------------------------
500,000 North Carolina Community Health Care, NC, 5.00%, 11/1/2017 518,210
-------------------------------------------------------------------------------
500,000 North Carolina Community Health Care, NC, 5.00%, 11/1/2018 513,195
-------------------------------------------------------------------------------
500,000 Wake County Hospital, NC, 5.125%, 10/1/2013 550,045
-------------------------------------------------------------------------------------------
2,622,065
-------------------------------------------------------------------------------------------
Transportation - 2.43%
250,000 Raleigh-Durham Airport Authority, NC, 5.25%, 11/1/2014 266,985
-------------------------------------------------------------------------------
500,000 Raleigh-Durham Airport Authority, NC, 5.25%, 11/1/2017 528,800
-------------------------------------------------------------------------------------------
795,785
-------------------------------------------------------------------------------------------
Utilities - 20.67%
500,000 Charlotte, NC Water & Sewer Systems, 5.25%, 6/1/2015 534,330
-------------------------------------------------------------------------------
500,000 Charlotte, NC Water & Sewer Systems, 5.50%, 6/1/2014 540,585
-------------------------------------------------------------------------------
500,000 Durham County, NC Enterprise System, 3.00%, 6/1/2005 507,275
-------------------------------------------------------------------------------
385,000 Greensboro, NC Enterprise Systems, 5.00%, 6/1/2005 398,017
-------------------------------------------------------------------------------
500,000 Mooresville, NC Enterprise System, 5.00%, 5/1/2019 517,425
-------------------------------------------------------------------------------
500,000 North Carolina Eastern Municipal Power Agency, 5.375%, 1/1/2016 516,805
-------------------------------------------------------------------------------
500,000 North Carolina Eastern Municipal Power Agency, 5.70%, 1/1/2015 544,850
-------------------------------------------------------------------------------
500,000 North Carolina Municipal Power Agency, 5.50%, 1/1/2015 556,845
-------------------------------------------------------------------------------
500,000 Raleigh, NC Enterprise System, 5.25%, 3/1/2017 531,130
-------------------------------------------------------------------------------
500,000 Salisbury, NC Enterprise System, 5.00%, 2/1/2020 516,290
-------------------------------------------------------------------------------
535,000 Union County, NC Enterprise System, 5.00%, 6/1/2017 561,028
-------------------------------------------------------------------------------
500,000 Winston-Salem, NC Water & Sewer System, 5.00%, 6/1/2019 516,970
-------------------------------------------------------------------------------
270,000 Winston-Salem, NC Water & Sewer System, 5.50%, 6/1/2015 304,825
-------------------------------------------------------------------------------
200,000 Winston-Salem, NC Water & Sewer System, 5.50%, 6/1/2016 225,796
-------------------------------------------------------------------------------------------
6,772,171
-------------------------------------------------------------------------------------------
Total Long-Term Municipals (Cost $33,122,570) 32,258,895
-------------------------------------------------------------------------------------------
Shares Money Market Securities - 1.95%
- ---------------
638,258 Fifth Third Institutional Money Market Fund, 0.96% (a) 638,258
-------------------------------------------------------------------------------------------
Total Money Market Securities (Cost $638,258) 638,258
-------------------------------------------------------------------------------------------
Total Investments - 100.43% (Cost $33,760,828) 32,897,153
-------------------------------------------------------------------------------------------
Liabilities in excess of other assets - (0.43)% (140,105)
-------------------------------------------------------------------------------------------
Total Net Assets - 100.00% $ 32,757,048
-------------------------------------------------------------------------------------------
(a) Variable rate security, rate shown is as of May 31, 2004.
See accompanying notes which are an integral part of the financial statements.
15
<page>
CCMI Funds
Statement of Assets and Liabilities
May 31, 2004
CCMI Tax Exempt
CCMI Equity CCMI Bond North Carolina
Fund Fund Bond Fund
----------------- ----------------- -----------------
Assets
Investments in securities:
- --------------------------------------------------------------
At cost $ 85,753,798 $ 112,485,047 $ 33,760,828
================= ================= =================
- --------------------------------------------------------------
At value $ 108,815,581 $ 111,444,732 $ 32,897,153
- --------------------------------------------------------------
Cash 1,123,182 - -
- --------------------------------------------------------------
Interest receivable 6,125 1,398,866 394,825
- --------------------------------------------------------------
Dividends receivable 183,387 12,270 -
- --------------------------------------------------------------
Receivable for investments sold 922,138 - -
- --------------------------------------------------------------
Receivable for fund shares sold 14,335 141,500 -
- --------------------------------------------------------------
Prepaid expenses 10,900 18,972 -
- -------------------------------------------------------------- ----------------- ----------------- -----------------
Total assets 111,075,648 113,016,340 33,291,978
- -------------------------------------------------------------- ----------------- ----------------- -----------------
Liabilities
Accrued advisory fees 66,007 34,074 8,368
- --------------------------------------------------------------
Accrued trustee fees 2,510 5,832 320
- --------------------------------------------------------------
Redemptions payable 185,706 122,900 11,595
- --------------------------------------------------------------
Accrued expenses 55,860 19,190 18,748
- --------------------------------------------------------------
Payable for investments purchased 75,322 - 495,899
- -------------------------------------------------------------- ----------------- ----------------- -----------------
Total liabilities 385,405 181,996 534,930
- -------------------------------------------------------------- ----------------- ----------------- -----------------
Net Assets $ 110,690,243 $ 112,834,344 $ 32,757,048
- -------------------------------------------------------------- ----------------- ----------------- -----------------
Net Assets consist of:
Paid in capital 85,467,121 113,872,709 33,620,723
- --------------------------------------------------------------
Accumulated net investment income 133,055 4,192 -
- --------------------------------------------------------------
Accumulated net realized gain (loss) on investments 2,028,284 (2,242) -
- --------------------------------------------------------------
Net unrealized appreciation (depreciation) on investments 23,061,783 (1,040,315) (863,675)
- -------------------------------------------------------------- ----------------- ----------------- -----------------
Net Assets $ 110,690,243 $ 112,834,344 $ 32,757,048
- -------------------------------------------------------------- ----------------- ----------------- -----------------
Shares outstanding (unlimited number authorized) 7,565,018 11,210,514 3,357,662
- -------------------------------------------------------------- ----------------- ----------------- -----------------
Net Asset Value
and redemption price per share $ 14.63 $ 10.07 $ 9.76
- -------------------------------------------------------------- ----------------- ----------------- -----------------
Offering price per share (a) (b) $ 15.52 $ 10.54 $ 10.22
- -------------------------------------------------------------- ----------------- ----------------- -----------------
(a) The Equity Fund is subject to a maximum sales load of 5.75%. The
Bond & NC Bond Funds are subject to maximum sales loads of 4.50%.
(b) The sales loads were removed from the Funds on June 29, 2004.
See accompanying notes which are an integral part of the financial statements.
16
<page>
CCMI Funds
Statement of Operations
Fiscal year ended May 31, 2004
CCMI Tax Exempt
CCMI Equity CCMI Bond North Carolina
Fund Fund Bond Fund (a)
---------------- -------------- ----------------
Investment Income
- -----------------------------------------------------------------
Dividend income $ 1,748,621 $ 231,891 $ -
- -----------------------------------------------------------------
Interest income 80,546 5,434,689 328,126
- ----------------------------------------------------------------- ---------------- -------------- ----------------
Total Income 1,829,167 5,666,580 328,126
- ----------------------------------------------------------------- ---------------- -------------- ----------------
Expenses
Investment adviser fee 898,368 689,835 41,015
- -----------------------------------------------------------------
Shareholder servicing fees 264,226 193,337 -
- -----------------------------------------------------------------
Administration expenses 112,340 120,132 14,066
- -----------------------------------------------------------------
Fund accounting expenses 60,103 77,800 12,615
- -----------------------------------------------------------------
Miscellaneous expenses 39,036 5,000 1,716
- -----------------------------------------------------------------
Transfer agent expenses 27,231 26,522 6,513
- -----------------------------------------------------------------
Legal expenses 20,000 16,000 4,722
- -----------------------------------------------------------------
Custodian expenses 16,300 16,324 2,548
- -----------------------------------------------------------------
Auditing expenses 14,992 15,000 5,284
- -----------------------------------------------------------------
Trustee expenses 12,374 12,375 2,570
- -----------------------------------------------------------------
Registration expenses 10,032 10,000 577
- -----------------------------------------------------------------
Printing expenses 9,986 11,000 393
- -----------------------------------------------------------------
Insurance expenses 2,333 2,333 602
- ----------------------------------------------------------------- ---------------- -------------- ----------------
Total Expenses 1,487,321 1,195,658 92,621
- -----------------------------------------------------------------
Expenses waived by Adviser (190,243) (172,459) (15,637)
- -----------------------------------------------------------------
Shareholder service fee reimbursed (105,690) (77,335) -
- ----------------------------------------------------------------- ---------------- -------------- ----------------
Net Expenses 1,191,388 945,864 76,984
- ----------------------------------------------------------------- ---------------- -------------- ----------------
Net Investment Income 637,779 4,720,716 251,142
- ----------------------------------------------------------------- ---------------- -------------- ----------------
Realized & Unrealized Gain (Loss)
- -----------------------------------------------------------------
Net realized gain on investment securities 2,420,803 270,038 -
- -----------------------------------------------------------------
Change in net unrealized appreciation (depreciation)
on investment securities 12,395,112 (7,290,846) (863,675)
- ----------------------------------------------------------------- ---------------- -------------- ----------------
Net realized and unrealized gain (loss) on investment securities 14,815,915 (7,020,808) (863,675)
- ----------------------------------------------------------------- ---------------- -------------- ----------------
Net increase (decrease) in net assets resulting from operations $ 15,453,694 $ (2,300,092) $ (612,533)
- ------------------------------------------------------------------------------------ -------------- ----------------
(a) For the NC Bond Fund, the period is January 8, 2004 (commencement of
operations) through May 31, 2004.
See accompanying notes which are an integral part of the financial statements.
17
<page>
CCMI Funds
CCMI Equity Fund
Statements of Changes In Net Assets
Year ended Year ended
Increase (Decrease) in Net Assets May 31, 2004 May 31, 2003
------------------- --------------------
Operations
Net investment income $ 637,779 $ 696,317
- ------------------------------------------------------------------------------
Net realized gain on investment securities 2,420,803 124,107
- ------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) 12,395,112 (8,216,301)
- ------------------------------------------------------------------------------ ------------------- --------------------
Net increase (decrease) in net assets resulting from operations 15,453,694 (7,395,877)
- ------------------------------------------------------------------------------ ------------------- --------------------
Distributions
- ------------------------------------------------------------------------------
From net investment income (625,155) (662,632)
- ------------------------------------------------------------------------------
From net realized gain - (659,765)
- ------------------------------------------------------------------------------ ------------------- --------------------
Total distributions (625,155) (1,322,397)
- ------------------------------------------------------------------------------ ------------------- --------------------
Capital Share Transactions
- ------------------------------------------------------------------------------
Proceeds from shares sold 25,331,592 21,036,061
- ------------------------------------------------------------------------------
Reinvestment of distributions 63,488 707,995
- ------------------------------------------------------------------------------
Amount paid for shares repurchased (22,207,673) (24,599,190)
- ------------------------------------------------------------------------------ ------------------- --------------------
Net increase (decrease) in net assets resulting
from share transactions 3,187,407 (2,855,134)
- ------------------------------------------------------------------------------ ------------------- --------------------
Total Increase (Decrease) in Net Assets 18,015,946 (11,573,408)
- ------------------------------------------------------------------------------ ------------------- --------------------
Net Assets
Beginning of year 92,674,297 104,247,705
- ------------------------------------------------------------------------------ ------------------- --------------------
End of year $ 110,690,243 $ 92,674,297
- ------------------------------------------------------------------------------ ------------------- --------------------
Accumulated net investment income $ 133,055 $ 120,431
- ------------------------------------------------------------------------------ ------------------- --------------------
Capital Share Transactions
Shares sold 1,835,717 1,781,750
- ------------------------------------------------------------------------------
Shares issued in reinvestment of distributions 4,592 62,410
- ------------------------------------------------------------------------------
Shares repurchased (1,582,619) (2,098,814)
- ------------------------------------------------------------------------------ ------------------- --------------------
Net increase (decrease) from capital transactions 257,690 (254,654)
- ------------------------------------------------------------------------------ ------------------- --------------------
See accompanying notes which are an integral part of the financial statements.
18
<page>
CCMI Funds
CCMI Bond Fund
Statements of Changes In Net Assets
Year ended Period ended
Increase (Decrease) in Net Assets May 31, 2004 May 31, 2003 (a)
----------------- --------------
Operations
Net investment income $ 4,720,716 $ 3,878,341
- ------------------------------------------------------------------------------------
Net realized gain on investment securities 270,038 1,244,292
- ------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) on investment securities (7,290,846) 5,618,729
- ------------------------------------------------------------------------------------ ----------------- --------------
Net increase (decrease) in net assets resulting from operations (2,300,092) 10,741,362
- ------------------------------------------------------------------------------------ ----------------- --------------
Distributions
- ------------------------------------------------------------------------------------
From net investment income (4,742,488) (3,852,377)
- ------------------------------------------------------------------------------------
From net realized gain (1,415,496) (101,077)
- ------------------------------------------------------------------------------------ ----------------- --------------
Total distributions (6,157,984) (3,953,454)
- ------------------------------------------------------------------------------------ ----------------- --------------
Capital Share Transactions
- ------------------------------------------------------------------------------------
Proceeds from shares sold 25,168,526 74,941,481
- ------------------------------------------------------------------------------------
Proceeds from shares issued in connection with the tax-free transfer
of assets from National Commerce Bank Common Trust Fund A - Fixed Income Fund - 43,258,837
- ---------------------------------------------------------------------------------------
Reinvestment of distributions 1,420,240 101,354
- ------------------------------------------------------------------------------------
Amount paid for shares repurchased (20,164,898) (10,221,028)
- ------------------------------------------------------------------------------------ ----------------- --------------
Net increase in net assets resulting
from share transactions 6,423,868 108,080,644
- ------------------------------------------------------------------------------------ ----------------- --------------
Total Increase (Decrease) in Net Assets (2,034,208) 114,868,552
- ------------------------------------------------------------------------------------ ----------------- --------------
Net Assets
Beginning of period 114,868,552 -
- ------------------------------------------------------------------------------------ ----------------- --------------
End of period $ 112,834,344 $114,868,552
- ------------------------------------------------------------------------------------ ----------------- --------------
Accumulated net investment income $ 4,192 $ 25,964
- ------------------------------------------------------------------------------------ ----------------- --------------
Capital Share Transactions
Shares sold 2,401,593 7,255,564
- ------------------------------------------------------------------------------------
Shares issued in connection with the tax-free transfer of assets from
National Commerce Bank Common Trust Fund A - Fixed Income Fund - 4,325,884
- ------------------------------------------------------------------------------------
Shares issued in reinvestment of distributions 137,486 9,662
- ------------------------------------------------------------------------------------
Shares repurchased (1,940,102) (979,573)
- ------------------------------------------------------------------------------------ ----------------- --------------
Net increase from capital transactions 598,977 10,611,537
- ------------------------------------------------------------------------------------ ----------------- --------------
(a) For the period July 1, 2002 (commencement of operations) to May 31, 2003.
See accompanying notes which are an integral part of the financial statements.
19
<page>
CCMI Funds
CCMI Tax-Exempt North Carolina Bond Fund
Statements of Changes In Net Assets
Period ended
Increase in Net Assets May 31, 2004 (a)
----------------
Operations
Net investment income $ 251,142
- ---------------------------------------------------------------------------------------------------
Net realized gain on investment securities -
- ---------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) on investment securities (863,675)
- --------------------------------------------------------------------------------------------------- ----------------
Net (decrease) in net assets resulting from operations (612,533)
- --------------------------------------------------------------------------------------------------- ----------------
Distributions
- ---------------------------------------------------------------------------------------------------
From net investment income (251,404)
- ---------------------------------------------------------------------------------------------------
From net realized gain -
- --------------------------------------------------------------------------------------------------- ----------------
Total distributions (251,404)
- --------------------------------------------------------------------------------------------------- ----------------
Capital Share Transactions
- ---------------------------------------------------------------------------------------------------
Proceeds from shares sold 35,212,835
Reinvestment of distributions -
- ---------------------------------------------------------------------------------------------------
Amount paid for shares repurchased (1,591,850)
- --------------------------------------------------------------------------------------------------- ----------------
Net increase in net assets resulting
from share transactions 33,620,985
- --------------------------------------------------------------------------------------------------- ----------------
Total Increase in Net Assets 32,757,048
- --------------------------------------------------------------------------------------------------- ----------------
Net Assets
Beginning of period -
- --------------------------------------------------------------------------------------------------- ----------------
End of period $ 32,757,048
- --------------------------------------------------------------------------------------------------- ----------------
Accumulated net investment income (loss) $ -
- --------------------------------------------------------------------------------------------------- ----------------
Capital Share Transactions
Shares sold 3,516,773
- ---------------------------------------------------------------------------------------------------
Shares issued in reinvestment of distributions -
- ---------------------------------------------------------------------------------------------------
Shares repurchased (159,111)
- --------------------------------------------------------------------------------------------------- ----------------
Net increase from capital transactions 3,357,662
- --------------------------------------------------------------------------------------------------- ----------------
(a) For the period January 8, 2004 (commencement of operations) to May 31, 2004.
See accompanying notes which are an integral part of the financial statements.
20
<page>
CCMI Funds
CCMI Equity Fund
Financial Highlights
Year ended Year ended Year ended Year ended Year ended
May 31, 2004 May 31, 2003 (a) May 31, 2002 May 31, 2001 May 31, 2000
------------------ ----------------- ----------------- ----------------- -----------------
Selected Per Share Data
- -------------------------------------
Net asset value, beginning of year $ 12.68 $ 13.79 $ 16.17 $ 21.15 $ 21.74
- -------------------------------------
Income from investment operations
- ------------------------------------
Net investment income 0.08 0.10 0.07 0.07 0.08
- ------------------------------------
Net realized and unrealized gain (loss) 1.95 (1.03) (1.89) (1.88) 3.27
- ------------------------------------ ------------------ ----------------- ----------------- ----------------- -----------------
Total from investment operations 2.03 (0.93) (1.82) (1.81) 3.35
- ------------------------------------ ------------------ ----------------- ----------------- ----------------- -----------------
Less Distributions to shareholders:
- ------------------------------------
From net investment income (0.08) (0.09) (0.06) (0.08) (0.08)
- ------------------------------------
From net realized gain - (0.09) (0.50) (3.09) (3.86)
- ------------------------------------ ------------------ ----------------- ----------------- ----------------- -----------------
Total distributions (0.08) (0.18) (0.56) (3.17) (3.94)
- ------------------------------------ ------------------ ----------------- ----------------- ----------------- -----------------
- ------------------------------------
Net asset value, end of year $ 14.63 $ 12.68 $ 13.79 $ 16.17 $ 21.15
- ------------------------------------ ------------------ ----------------- ----------------- ----------------- -----------------
Total Return (b) 16.07% -6.55% -11.46% -9.30% 16.12%
- ------------------------------------ ------------------ ----------------- ----------------- ----------------- -----------------
Ratios and Supplemental Data
Net assets, end of period (000) $ 110,690 $ 92,674 $ 104,248 $ 70,238 $ 93,870
- ------------------------------------ ------------------ ----------------- ----------------- ----------------- -----------------
Ratio of expenses to average net assets 1.13% 1.20% 1.19% 1.17% 1.09%
- ------------------------------------------------------- ----------------- ----------------- ----------------- -----------------
Ratio of net investment income to
average net assets 0.60% 0.81% 0.50% 0.34% 0.38%
- ------------------------------------ ------------------ ----------------- ----------------- ----------------- -----------------
Expense waiver/reimbursement (c) 0.28% 0.32% 0.28% 0.28% 0.25%
- ------------------------------------ ------------------ ----------------- ----------------- ----------------- -----------------
Portfolio turnover rate 22% 24% 36% 44% 42%
- ------------------------------------ ------------------ ----------------- ----------------- ----------------- -----------------
(a) This and previous years were audited by other auditors.
(b) Based on net asset value, which does not reflect the sales charge.
(c) This voluntary expense decrease is reflected in both the expense and the net
investment income ratios above.
See accompanying notes which are an integral part of the financial statements.
21
<page>
CCMI Funds
CCMI Bond Fund
Financial Highlights
Year ended Period ended
May 31, 2004 May 31, 2003 (a) (b)
------------------- -----------------
Selected Per Share Data
- ---------------------------------------------------------------
Net asset value, beginning of period $ 10.82 $ 10.00
- ---------------------------------------------------------------
Income from investment operations
- ---------------------------------------------------------------
Net investment income 0.42 0.44
- ---------------------------------------------------------------
Net realized and unrealized gain (loss) (0.62) 0.83
- --------------------------------------------------------------- ------------------- -----------------
Total from investment operations (0.20) 1.27
- --------------------------------------------------------------- ------------------- -----------------
Less Distributions to shareholders:
- ---------------------------------------------------------------
From net investment income (0.42) (0.44)
From net realized gain (0.13) (0.01)
- --------------------------------------------------------------- ------------------- -----------------
Total distributions (0.55) (0.45)
- --------------------------------------------------------------- ------------------- -----------------
Net asset value, end of period $ 10.07 $ 10.82
- --------------------------------------------------------------- ------------------- -----------------
Total Return (c) -1.84% 12.97% (d)
- --------------------------------------------------------------- ------------------- -----------------
Ratios and Supplemental Data
Net assets, end of period (000) $ 112,834 $ 114,869
- --------------------------------------------------------------- ------------------- -----------------
Ratio of expenses to average net assets 0.82% 0.85% (e)
- --------------------------------------------------------------- ------------------- -----------------
Ratio of net investment income to
average net assets 4.07% 4.73% (e)
- --------------------------------------------------------------- ------------------- -----------------
Expense waiver/reimbursement (f) 0.22% 0.12% (e)
- --------------------------------------------------------------- ------------------- -----------------
Portfolio turnover rate 92% 64%
- --------------------------------------------------------------- ------------------- -----------------
(a) For the period July 1, 2002 (commencement of operations) through May 31,
2003.
(b) This period was audited by other auditors.
(c) Based on net asset value, which does not reflect the sales charge.
(d) Not annualized.
(e) Annualized.
(f) This voluntary expense decrease is reflected in both the expense and the net
investment income ratios above.
See accompanying notes which are an integral part of the financial statements.
22
<page>
CCMI Funds
CCMI Tax-Exempt North Carolina Bond Fund
Financial Highlights
Period ended
May 31, 2004 (a)
---------------------
Selected Per Share Data
- -----------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.00
- -----------------------------------------------------------------------------------
Income from investment operations
- -----------------------------------------------------------------------------------
Net investment income 0.09
- -----------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (0.24)
- ----------------------------------------------------------------------------------- ---------------------
Total from investment operations (0.15)
- ----------------------------------------------------------------------------------- ---------------------
Less Distributions to shareholders:
- -----------------------------------------------------------------------------------
From net investment income (0.09)
- -----------------------------------------------------------------------------------
From net realized gain -
- ----------------------------------------------------------------------------------- ---------------------
Total distributions (0.09)
- ----------------------------------------------------------------------------------- ---------------------
Net asset value, end of period $ 9.76
- ----------------------------------------------------------------------------------- ---------------------
Total Return (b) -1.52% (c)
- ----------------------------------------------------------------------------------- ---------------------
Ratios and Supplemental Data
Net assets, end of period (000) $ 32,757
- ----------------------------------------------------------------------------------- ---------------------
Ratio of expenses to average net assets 0.75% (d)
- ----------------------------------------------------------------------------------- ---------------------
Ratio of net investment income to
average net assets 2.45% (d)
- ----------------------------------------------------------------------------------- ---------------------
Expense waiver/reimbursement (e) 0.15% (d)
- ----------------------------------------------------------------------------------- ---------------------
Portfolio turnover rate 20%
- ----------------------------------------------------------------------------------- ---------------------
(a) For the period January 8, 2004 (commencement of operations) through May 31,
2004.
(b) Based on net asset value, which does not reflect the sales charge.
(c) Not annualized.
(d) Annualized.
(e) This voluntary expense decrease is reflected in both the expense and the net
investment income ratios above.
</table>
See accompanying notes which are an integral part of the financial statements.
23
<page>
CCMI Funds
Notes to the Financial Statements
May 31, 2004
NOTE 1. ORGANIZATION
The CCMI Equity Fund (the "Equity Fund") and the CCMI Bond Fund (the "Bond
Fund") were organized as diversified series of CCMI Funds (the "Trust"). The
CCMI Tax-Exempt North Carolina Bond Fund (the "NC Bond Fund") was organized as a
non-diversified series of the Trust. The Trust is an open-end, management
investment company that was established under the laws of the Commonwealth of
Massachusetts on December 11, 1991. The Trust may offer separate series of
shares representing interests in separate portfolios of securities. The Trust
changed its name from 111 Corcoran Funds to CCB Funds and the Equity Fund
changed its name from 111 Corcoran Equity Fund to CCB Equity Fund on May 13,
1998. The Trust changed its name from CCB Funds to CCMI Funds and the Equity
Fund changed its name from CCB Equity Fund to CCMI Equity Fund on June 1, 2001.
The Board of Trustees (the "Board") governs the Equity Fund, Bond Fund and NC
Bond Fund (collectively, the "Funds"). The Funds' investment adviser is Commerce
Capital Management, Inc. (the "Adviser"). The investment objective of the Equity
Fund is to provide high total return over longer periods of time through
appreciation of capital and current income provided by dividends and interest
payments. The investment objective of the Bond Fund is to provide as high a
level of current income as is consistent with the preservation of capital by
investing primarily in a professionally managed, diversified portfolio of fixed
income securities. The investment objective of the NC Bond Fund is to provide
current income exempt from federal regular income tax and the personal income
tax imposed by the state of North Carolina. The Equity Fund, Bond Fund and NC
Bond Fund commenced operations on December 31, 1994, July 1, 2002, and January
8, 2004, respectively.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by each
Fund in the preparation of its financial statements.
Securities Valuation - 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 Adviser believes such prices accurately reflect the fair market
value of such securities. Securities that are traded on any stock exchange are
generally valued by the pricing service at the last quoted sale price. Lacking a
last sale price, an exchange traded security is generally valued by the pricing
service at its last bid price. Securities traded in the NASDAQ over-the-counter
market are generally valued by the pricing service at the NASDAQ Official
Closing Price. When market quotations are not readily available, when the
Adviser 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 Adviser, in conformity with guidelines
adopted by and subject to review and approval of the Board of Trustees of the
Trust.
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 Adviser
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 Adviser 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 Adviser in
conformity with guidelines adopted by and subject to review of the Board of
Trustees. 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.
24
<page>
CCMI Funds
Notes to the Financial Statements
May 31, 2004 - continued
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued
Federal Income Taxes- There is no provision for federal income tax. The Funds
have met, and intend to continue to meet, requirements of subchapter M of the
Internal Revenue Code of 1986, as amended, by distributing substantially all of
their net investment income and net realized capital gains.
Security Transactions and Related Income- The Funds follow industry practice and
record 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 on
securities purchased are amortized over the life of the respective securities.
Dividends and Distributions- The Equity Fund intends to distribute substantially
all of its net investment income as dividends to its shareholders on a quarterly
basis on the ex-dividend date. The Bond Fund and the NC Bond Fund intend to
distribute substantially all of their net investment income as dividends to
their shareholders on a monthly basis on the ex-dividend date. The Funds intend
to distribute their net realized long term capital gains and their net realized
short term capital gains at least once a year. Dividends are recorded on the
ex-dividend date. The treatment for financial reporting purposes of
distributions made to shareholders during the year from net investment income or
net realized capital gains may differ from their ultimate treatment for federal
income tax purposes. These differences are caused by differences in the timing
of the recognition of certain components of income, expense or realized capital
gain for federal income tax purposes. Where such differences are permanent in
nature, they are reclassified in the components of the net assets based on their
ultimate characterization for federal income tax purposes. Any such
reclassifications will have no effect on net assets, results of operations or
net asset values per share of a Fund. For the year and period ended May 31,
2004, there were no such reclassifications.
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Adviser is Commerce Capital Management, Inc. Under the terms of the
management agreement (the "Agreement"), the Adviser manages each Fund's
investments subject to approval of the Board of Trustees. As compensation for
its management services, each Fund is obligated to pay the Adviser a fee (based
on average daily net assets) computed and accrued daily and paid monthly at the
following annual rates: Equity Fund, 0.85%; Bond Fund, 0.60%; NC Bond Fund,
0.40%. For the fiscal year ended May 31, 2004, the Adviser earned a fee of
$898,368 from the Equity Fund and $689,835 from the Bond Fund. For the period
January 8, 2004 (commencement of operations) to May 31, 2004, the Adviser earned
a fee of $41,015 from the NC Bond Fund. As of May 31, 2004, the Adviser was owed
$66,007, $34,074, and $8,368 from the Equity Fund, Bond Fund and NC Bond Fund,
respectively.
The Adviser has voluntarily agreed to waive fees and/or reimburse expenses to
maintain each Fund's total operating expenses, as a percentage of average daily
net assets, as follows: Equity Fund, 1.03%; Bond Fund, 0.81%; and NC Bond Fund,
0.75%. The Adviser can modify or terminate this voluntary waiver at its sole
discretion. Due to modifications to the voluntary waiver during the fiscal years
ended May 31, 2004, the expenses as an actual percentage of average daily net
assets were 1.13% and 0.82% for the Equity Fund and Bond Fund, respectively. For
the fiscal year ended May 31, 2004, the Adviser waived fees and/or reimbursed
expenses of $295,933 for the Equity Fund and $249,794 for the Bond Fund. For the
period January 8, 2004 (commencement of operations) to May 31, 2004 the Adviser
waived fees and/or reimbursed expenses of $15,637 for the NC Bond Fund.
The Trust retains Unified Fund Services, Inc. ("Unified") to manage each Fund's
business affairs and to provide the Funds with administrative services,
including all regulatory reporting and necessary office equipment and personnel.
Unified receives a monthly fee from each Fund equal to an annual average rate of
0.13% of the Fund's average daily net assets up to $50 million dollars, 0.10% of
the Fund's average daily net
25
<page>
CCMI Funds
Notes to the Financial Statements
May 31, 2004 - continued
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - continued
assets from$50 million to $100 million, 0.08% of the Fund's average daily net
assets from $100 million to $150 million and 0.06% of the Fund's average daily
net assets over $150 million (subject to a $2,083 minimum monthly fee). For the
fiscal year ended May 31, 2004, Unified was entitled to fees of $112,340 for
administrative services provided to the Equity Fund and $120,132 for
administrative services provided to the Bond Fund. For the period January 8,
2004 (commencement of operations) to May 31, 2004, Unified was entitled to fees
of $14,066 for administrative services provided to the NC Bond Fund. Certain
Trustees and the officers of the Trust are employees of Unified and/or
shareholders of Unified Financial Services, Inc. (the parent of Unified).
The Trust retains Unified to act as each Fund's transfer agent and to provide
each Fund with fund accounting services. For its services as transfer agent,
Unified receives a monthly fee from each Fund of $1.25 per shareholder (subject
to a minimum monthly fee of $1,250 per Fund plus out of pockets). For the fiscal
year ended May 31, 2004, Unified was entitled to fees and reimbursement of out
of pockets of $27,231 and $26,522 for the Equity Fund and Bond Fund,
respectively. For the period January 8, 2004 (commencement of operations) to May
31, 2004 Unified was entitled to fees and reimbursement of out of pockets of
$6,513 for the NC Bond Fund. For its services as fund accountant, Unified
receives an annual fee from each Fund equal to 0.05% of each Fund's assets up to
$50 million, 0.04% of each Fund's assets from $50 million to $100 million, and
0.03% of each Fund's assets from $100 million to $150 million, and 0.02% over
$150 million (subject to a monthly minimum fee of $1,667 per month). For the
fiscal year ended May 31, 2004, Unified was entitled to fees of $60,103 for fund
accounting services provided to the Equity Fund and $77,800 for fund accounting
services provided to the Bond Fund. For the period January 8, 2004 (commencement
of operations) to May 31, 2004 Unified was entitled to fees of $12,615 for fund
accounting services provided to the NC Bond Fund.
The Bond Fund and NC Bond Fund have adopted Rule 12b-1 Plans, which allow them
to pay marketing fees to Unified Financial Securities, Inc. (the "Distributor")
and investment professionals for the sale, distribution and customer servicing
of the Funds' shares. The Bond Fund and NC Bond Fund have no present intention
of paying or accruing a 12b-1 fee. The Equity Fund has not adopted a Rule 12b-1
Plan. Certain Trustees and an officer have an ownership interest in Unified
Financial Services, Inc. (the parent company of the Distributor). As a result,
those persons may be deemed to be affiliates of the Distributor.
The Funds have adopted a Shareholder Services Plan (the "Plan"). Pursuant to the
Plan, the Funds may pay broker/dealers and other participating financial
institutions (including Unified Financial Securities, Inc.) up to 0.25% of
average net assets for providing shareholder services and maintaining
shareholder accounts. Unified Financial Securities, Inc. may select others to
perform these services for their customers and may pay fees to them. For the
fiscal year ended May 31, 2004, shareholder service fees of $264,226 and
$193,337 were incurred by the Equity Fund and Bond Fund, respectively. The NC
Bond Fund has no present intention of paying or accruing the shareholder service
fee.
NOTE 4. INVESTMENTS
For the fiscal year ended May 31, 2004, purchases and sales of investment
securities, other than short-term investments and short-term U.S. government
obligations were as follows:
<table>
<s> <c> <c> <c>
Equity Bond NC Bond
Fund Fund Fund
--------------- ------------------- ----------------
Purchases
U.S. Government Obligations $ - $ 62,434,349 $ -
Other 21,686,091 36,294,505 38,709,817
Sales
U.S. Government Obligations $ - $ 43,680,695 $ -
Other 21,475,212 54,762,900 5,520,000
</table>
26
<page>
CCMI Funds
Notes to the Financial Statements
May 31, 2004 - continued
NOTE 4. INVESTMENTS - continued
As of May 31, 2004, the net unrealized appreciation / (depreciation) of
investments for tax purposes was as follows:
<table>
<s> <c> <c> <c>
Equity Bond NC Bond
Fund Fund Fund
------------------- ----------------- -----------------
Gross Appreciation $ 24,912,399 $ 993,753 $ 66,306
Gross (Depreciation) (1,850,616) (2,034,068) (929,981)
------------------- ----------------- -----------------
Net Appreciation / (Depreciation)
on Investments $ 23,061,783 $ (1,040,315) $ (863,675)
=================== ================= =================
</table>
At May 31, 2004, the aggregate cost of securities for federal income tax
purposes were $85,753,798, $112,485,047, and $33,760,828 for the Equity Fund,
Bond Fund and NC Bond Fund, respectively.
NOTE 5. ESTIMATES
Preparation of financial statements in accordance 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 and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
NOTE 6. RELATED PARTY TRANSACTIONS
The beneficial ownership, either directly or indirectly, of more than 25% of the
voting securities of a fund creates a presumption of control of the fund, under
Section 2(a)(9) of the Investment Company Act of 1940. As of May 31, 2004,
Central Carolina Bank & Trust held 91.23% of the Equity Fund, 99.59% of the Bond
Fund, and 100.00% of the NC Bond Fund in omnibus accounts for the benefit of
others.
NOTE 7. DISTRIBUTION TO SHAREHOLDERS
Equity Fund. For the fiscal year ended May 31, 2004, the Fund paid quarterly
distributions of net investment income totaling $0.0824 per share.
The tax character of distributions paid during fiscal years 2004 and 2003 was as
follows:
Distributions paid from: 2004 2003
---------------- ----------------
Ordinary income $ 625,155 $ 662,632
Short-term Capital Gain - -
Long-term Capital Gain - 659,765
---------------- ----------------
$ 625,155 $ 1,322,397
================ ================
Bond Fund. For the fiscal year ended May 31, 2004, the Fund paid monthly
distributions of net investment income totaling $0.4268 per share. On December
23, 2003, the Fund paid capital gain distributions of $0.1287 to shareholders of
record on December 22, 2003.
27
CCMI Funds
Notes to the Financial Statements
May 31, 2004 - continued
NOTE 7. DISTRIBUTION TO SHAREHOLDERS - continued
The tax character of distributions paid during fiscal years 2004 and 2003 was as
follows:
Distributions paid from: 2004 2003
---------------- ----------------
Ordinary income $ 4,742,488 $ 3,852,377
Short-term Capital Gain 739,093 100,076
Long-term Capital Gain 676,403 1,001
---------------- ----------------
$ 6,157,984 $ 3,953,454
================ ================
NC Bond Fund. For the fiscal year ended May 31, 2004, the Fund paid monthly
distributions of net investment income totaling $0.0893 per share.
The tax character of distributions paid during fiscal year 2004 was as follows:
Distributions paid from: 2004
----------------
Ordinary income $ 251,404
Short-term Capital Gain -
Long-term Capital Gain -
----------------
$ 251,404
================
As of May 31, 2004, the components of distributable earnings/(accumulated
losses) on a tax basis were as follows:
<table>
<s> <c> <c> <c>
Equity Bond NC Bond
Fund Fund Fund
--------------- --------------- ------------------
Undistributed ordinary $ 133,055 $ 4,192 $ -
Undistributed long-term capital
gain/(accumulated losses) 2,028,284 (2,242) -
Unrealized appreciation/(depreciation) 23,061,783 (1,040,315) (863,675)
--------------- --------------- ------------------
$ 25,223,122 $ (1,038,365) $ (863,675)
=============== =============== ==================
</table>
There is no difference between book basis and tax basis unrealized appreciation
/ (depreciation).
NOTE 8. CHANGE IN ACCOUNTANTS
On July 21, 2003, McCurdy & Associates CPA's, Inc. ("McCurdy & Associates") was
selected to replace KPMG, LLP ("KPMG") as the Funds' independent auditor for the
2004 fiscal year. The Funds' selection of McCurdy & Associates was recommended
by the Audit Committee and was approved by the Board of Trustees.
KPMG's reports on the Funds' financial statements as of May 31, 2003 did not
contain an adverse opinion or a disclaimer of opinion and were not qualified or
modified as to uncertainty, audit scope or accounting principles. At the
financial statement date and through the date of the engagement of McCurdy &
Associates, there were no disagreements between the Fund and KPMG on any matter
of accounting principles or practices, financial statement disclosure, or
auditing scope or procedures, which such disagreements, if not resolved to the
satisfaction of KPMG, would have caused it to make reference to the subject
matter of the disagreement in connection with its reports on the financial
statements for such periods.
28
<page>
CCMI Funds
Notes to the Financial Statements
May 31, 2004 - continued
NOTE 8. CHANGE IN ACCOUNTANTS - continued
On March 14, 2004, Cohen McCurdy Ltd. ("Cohen") was selected to replace McCurdy
& Associates CPA's, Inc. ("McCurdy") as the Trust's independent auditor for the
2004 fiscal year. The Trust's selection of Cohen was recommended by the Audit
Committee and was approved by the Board of Trustees.
The Funds had not reached a fiscal year end as of March 14, 2004; therefore
McCurdy has not issued audit opinions for the Funds.
From July 21, 2003 through March 14, 2004, there were no disagreements with
McCurdy on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure.
Neither the Funds nor anyone on its behalf consulted with Cohen on items which
(i) concerned the application of accounting principles to a specified
transaction, either completed or proposed or the type of audit opinion that
might be rendered on the Funds' financial statements as a result of such
consultations or (ii) concerned the subject of a disagreement (as defined in
paragraph (a)(1)(iv) of Item 304 of Regulation S-K) or a reportable event (as
described in paragraph (a)(1)(v) of said Item 304).
NOTE 9. SIGNIFICANT EVENT
On May 9, 2004, National Commerce Financial Corporation, the parent company of
Central Carolina Bank & Trust, announced a merger agreement with SunTrust Banks,
Inc. The merger is expected to be completed in the fourth quarter of 2004.
29
<page>
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To The Shareholders and
Board of Trustees
CCMI Funds
We have audited the accompanying statements of assets and liabilities, including
the schedule of portfolio investments, of CCMI Equity Fund, CCMI Bond Fund, and
CCMI Tax-Exempt North Carolina Bond Fund (three of the portfolios constituting
the CCMI Funds ("the Trust")) as of May 31, 2004, and the related statements of
operations, the statements of changes in net assets and financial highlights for
the period then ended. These financial statements and financial highlights are
the responsibility of the Trust's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on our
audit. The financial statements and financial highlights of CCMI Equity Fund for
the years ended May 31, 2003, May 31, 2002, May 31, 2001 and May 31, 2000 and
the financial statements and financial highlights of CCMI Bond Fund for the
period ended May 31, 2003 were audited by other auditors whose reports expressed
unqualified opinions on those statements.
We conducted our audits 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 and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
investments and cash owned as of May 31, 2004 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the 2004 financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
each of the respective portfolios of the CCMI Funds as of May 31, 2004, the
results of their operations, the changes in net assets and financial highlights
for the period then ended, in conformity with accounting principles generally
accepted in the United States of America.
/s/ Cohen McCurdy Ltd.
Cohen McCurdy, Ltd.
Westlake, Ohio
July 19, 2004
<page>
Trustees and Officers (Unaudited)
Independent Trustees
<table>
<s> <c>
- ----------------------------------------- ----------------------------------------------------------------------------
Name, Address*, (Date of Birth), Principal Occupation During Past 5 Years and Other Directorships
Position with Fund Complex, Term of
Position with Trust
- ----------------------------------------- ----------------------------------------------------------------------------
Gary E. Hippenstiel (1947) Director, Vice President and Chief Investment Officer of Legacy Trust
Company, N.A. since 1992. Trustee of AmeriPrime Funds since 1995,
Trustee, June 2003 to present AmeriPrime Advisors Trust since July 2002 and Unified Series Trust since
December 2002.
- ----------------------------------------- ----------------------------------------------------------------------------
Stephen A. Little (1946) President and founder, The Rose, Inc., a registered investment advisor,
since April 1993. Trustee of AmeriPrime Funds and Unified Series Trust
Trustee, June 2003 to present since December 2002 and AmeriPrime Advisors Trust since November 2002.
- ----------------------------------------- ----------------------------------------------------------------------------
Daniel J. Condon (1950) Vice President and General Manager, International Crankshaft Inc., an
automotive equipment manufacturing company, 1990 to present; Trustee, The
Trustee, June 2003 to present Unified Funds, from 1994 to 2002; Trustee, Star Select Funds, a REIT
mutual fund, from 1997 to 2000. Trustee of AmeriPrime Funds and Unified
Series Trust since December 2002 and AmeriPrime Advisors Trust since
November 2002.
- ----------------------------------------- ----------------------------------------------------------------------------
Interested Trustees and Principal Officers
- -------------------------------------------------- ------------------------------------------------------------------------
Name, (Date of Birth), Position with Fund Principal Occupation During Past 5 Years
Complex, Term of Position with Trust and Other Directorships
- -------------------------------------------------- ------------------------------------------------------------------------
Timothy L. Ashburn (1950)** Employed by Unified Financial Services, Inc., Chairman of Unified
Financial Services, Inc. 1989 to 2004, Chief Executive Officer from
Chairman, June 2003 to present 1989 to 1992 and 1994 to April 2002, and President from November 1997
Asst. Secretary, December 2003 to present to April 2000. Trustee of AmeriPrime Advisors Trust since November
Secretary, June 2003 to December 2003 2002, and AmeriPrime Funds and Unified Series Trust since December
2002.
- -------------------------------------------------- ------------------------------------------------------------------------
Ronald C. Tritschler (1952)*** Chief Executive Officer, Director and legal counsel of The Webb
Companies, a national real estate company, from 2001 to present;
Trustee, June 2003 to present Executive Vice President and Director of The Webb Companies from 1990
to 2000; Director, First State Financial, from 1998 to present;
Director, Vice President and legal counsel for The Traxx Companies, an
owner and operator of convenience stores, from 1989 to present.
Trustee of AmeriPrime Advisors Trust since November 2002 and
AmeriPrime Funds and Unified Series Trust since December 2002.
- -------------------------------------------------- ------------------------------------------------------------------------
Anthony J. Ghoston (1959) Executive Vice President of Unified Fund Services, Inc. since June
2004; Senior Vice President of Unified Fund Services, Inc. April 2003
President, July 2004 to present to June 2004; Senior Vice President and Chief Information Officer of
Unified Financial Services since 1997.
- -------------------------------------------------- ------------------------------------------------------------------------
Thomas G. Napurano (1941) Chief Financial Officer and Executive Vice President of Unified
Financial Services, Inc., the parent company of the Trust's
Chief Financial Officer and Treasurer, June 2003 administrator and Distributor; Director, Unified Financial Services,
to present Inc., from 1989 to March 2002. CFO of AmeriPrime Funds and AmeriPrime Advisors
Trust since October 2002. CFO of Unified Series Trust since December 2002.
- -------------------------------------------------- ------------------------------------------------------------------------
Carol Highsmith (1964) Employed by Unified Fund Services, Inc. (November 1994 to present).
Secretary of AmeriPrime Funds, AmeriPrime Advisors Trust and Unified
Secretary, December 2003 to present Series Trust since December 2003.
Asst. Secretary, June 2003 to December 2003
- -------------------------------------------------- ------------------------------------------------------------------------
* The address for each of the trustees and officers is 431 N. Pennsylvania,
Indianapolis, IN 46204.
** Mr. Ashburn is an "interested person" of the Trust because he is an officer
of the Trust. In addition, he may be deemed to be an "interested person" of the
Trust because he has an ownership interest in Unified Financial Services, Inc.,
the parent of the Distributor of certain series in the Fund Complex.
*** Mr. Tritschler may be deemed to be an "interested person" of the Trust
because he has an ownership interest in Unified Financial Services, Inc., the
parent of the Distributor of certain series in the Fund Complex.
</table>
PROXY VOTING
A description of the policies and procedures that the Funds use to determine how
to vote proxies relating to portfolio securities is available without charge:
(1) upon request by calling the Funds at (800) 386-3111; and (2) from Funds'
documents filed with the Securities and Exchange Commission ("SEC") on the SEC's
website at www.sec.gov .
TRUSTEES
Timothy L. Ashburn, Chairman
Gary E. Hippenstiel
Stephen A. Little
Daniel J. Condon
Ronald C. Tritschler
OFFICERS
Anthony J Ghoston, President
Thomas G. Napurano, Chief Financial Officer and Treasurer
Carol J. Highsmith, Secretary
Timothy L. Ashburn, Asst. Secretary
INVESTMENT ADVISER
Commerce Capital Management, Inc.
850 Ridgelake Blvd. #101
Memphis, TN 38120
DISTRIBUTOR
Unified Financial Securities, Inc.
431 N. Pennsylvania Street
Indianapolis, Indiana 46204
INDEPENDENT ACCOUNTANTS
Cohen McCurdy Ltd.
826 Westpoint Pkwy., Suite 1250
Westlake, OH 44145
LEGAL COUNSEL
Thompson Hine, LLP
312 Walnut St, Suite 1400
Cincinnati, OH 45202
CUSTODIAN
The Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, OH 45263
ADMINISTRATOR, TRANSFER AGENT
AND FUND ACCOUNTANT
Unified Fund Services, Inc.
431 N. Pennsylvania Street
Indianapolis, Indiana 46204
This report is intended only for the information of shareholders or those who
have received the Funds' prospectus which contains information about the Funds'
management fee and expenses. Please read the prospectus carefully before
investing.
Distributed by Unified Financial Securities, Inc.
Member NASD/SIPC
<page>
Item 2. Code of Ethics.
(a) As of the end of the period covered by this report, 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, regardless of whether these
individuals are employed by the registrant or a third party.
(b) For purposes of this item, "code of ethics" means written standards that
are reasonably designed to deter wrongdoing and to promote:
(1) Honest and ethical conduct, including the ethical handling of
actual or apparent conflicts of interest between personal and
professional relationships;
(2) Full, fair, accurate, timely, and understandable disclosure in
reports and documents that a registrant files with, or submits
to, the Commission and in other public communications made by
the registrant;
(3) Compliance with applicable governmental laws, rules, and
regulations;
(4) The prompt internal reporting of violations of the code to an
appropriate person or persons identified in the code; and
(5) Accountability for adherence to the code.
(c) Amendments:
During the period covered by the report, there have not been any amendments to
the provisions of the code of ethics.
(d) Waivers:
During the period covered by the report, the registrant has not granted any
express or implicit waivers from the provisions of the code of ethics.
Item 3. Audit Committee Financial Expert.
(a) The registrant's Board of Trustees has determined that the registrant does
not have an audit committee financial expert. The committee members and the full
Board considered the possibility of adding a member that would qualify as an
expert. The audit committee determined that, although none of its members meet
the technical definition of an audit committee financial expert, the committee
has sufficient financial expertise to adequately perform its duties under the
Audit Committee Charter without the addition of a qualified expert.
Item 4. Principal Accountant Fees and Services.
(a) Audit Fees
FY 2004 $ 38,500
FY 2003 $ N/A
(b) Audit-Related Fees
Registrant
FY 2004 $ 3,000
FY 2003 $ 3,011
Nature of the fees: consents
(c) Tax Fees
Registrant
FY 2004 $ 1,950
FY 2003 $ N/A
Nature of the fees: preparation of tax returns
(d) All Other Fees
Registrant
FY 2004 $ 0
FY 2003 $ N/A
Nature of the fees:
(e) (1) Audit Committee's Pre-Approval Policies
The Audit Committee Charter requires the Audit Committee to
be responsible for the selection, retention or termination of
auditors and, in connection therewith, to (i) evaluate the
proposed fees and other compensation, if any, to be paid to
the auditors, (ii) evaluate the independence of the auditors,
(iii) pre-approve all audit services and, when appropriate,
any non-audit services provided by the independent auditors
to the Trust, (iv) pre-approve, when appropriate, any
non-audit services provided by the independent auditors to
the Trust's investment adviser, or any entity controlling,
controlled by, or under common control with the investment
adviser and that provides ongoing services to the Trust if
the engagement relates directly to the operations and
financial reporting of the Trust, and (v) receive the
auditors' specific representations as to their independence;
(2) Percentages of Services Approved by the Audit Committee
Registrant
Audit-Related Fees: 100 %
Tax Fees: 100 %
All Other Fees: 100 %
(f) During audit of registrant's financial statements for the most recent
fiscal year, less than 50 percent of the hours expended on the
principal accountant's engagement were attributed to work performed by
persons other than the principal accountant's full-time, permanent
employees.
(g) The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen by
another investment adviser), and any entity controlling, controlled by,
or under common control with the adviser that provides ongoing services
to the registrant:
Registrant
FY 2004 $ 4,950
FY 2003 $ 3,011
(h) Not applicable. The auditor performed no services for the registrant's
investment adviser or any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services to the
registrant.
Item 5. Audit Committee of Listed Companies. Not applicable.
Item 6. Schedule of Investments. Not applicable - schedule filed with Item 1.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Funds.
Not applicable.
Item 8. Purchases of Equity Securities by Closed-End Funds. Not applicable.
Item 9. Submission of Matters to a Vote of Security Holders. The registrant has
not adopted procedures by which shareholders may recommend nominees to the
registrant's board of trustees.
Item 10. Controls and Procedures.
(a) Based on an evaluation of the registrant's disclosure controls and
procedures as of June 24, 2004, the disclosure controls and procedures are
reasonably designed to ensure that the information required in filings on Forms
N-CSR is recorded, processed, summarized, and reported on a timely basis.
Item 11. Exhibits.
(a)(1) Code is filed herewith - Annual
(a)(2) Certifications by the registrant's principal executive officer and
principal financial officer, pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002 and required by Rule 30a-2under the Investment
Company Act of 1940 are filed herewith.
(a)(3) Not Applicable
(b) Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 is filed 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) CCMI Funds
By
* /s/ Anthony Ghoston
--------------------------------------------------------------
Anthony Ghoston, President and Chief Executive Officer
Date August 2, 2004
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
* /s/ Anthony Ghoston
--------------------------------------------------------------
Anthony Ghoston, President and Chief Executive Officer
Date August 2, 2004
By
* /s/ Thomas Napurano
-----------------------------------------------------------------
Thomas Napurano, Treasurer and Chief Financial Officer
Date July 29, 2004
----------------------------------------------------------------