-------------------------
OMB APPROVAL
-------------------------
OMB Number: 3235-0570
Expires: Nov. 30, 2005
Estimated average burden
hours per response: 5.0
-------------------------
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 811-08529
---------------------------------------------
The Memorial Funds
---------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
6550 Directors Parkway Abilene, TX 79606
---------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
InCap Service Company, Willow Grove, PA 19090-1904
---------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 888 263-5593
-----------------------------
Date of fiscal year end: 12/31/2003
-------------------------------
Date of reporting period: 06/30/2003
------------------------------
ITEM 1.
[LOGO] MEMORIAL
FUNDS
MEMORIAL FUNDS
____________
GOVERNMENT BOND FUND
GROWTH EQUITY FUND
VALUE EQUITY FUND
SEMI-ANNUAL REPORT
JUNE 30, 2003
TABLE OF CONTENTS
Page
FINANCIAL STATEMENTS OF THE MEMORIAL FUNDS
Schedule of Investments:
Government Bond Fund ................................................ 1
Growth Equity Fund .................................................. 2
Value Equity Fund ................................................... 4
Statements of Assets and Liabilities ..................................... 6
Statements of Operations ................................................. 7
Statements of Changes in Net Assets ...................................... 8
Financial Highlights ..................................................... 10
Notes to Financial Statements ............................................ 13
LETTER FROM THE PRESIDENT
DEAR SHAREHOLDER:
I am pleased to bring you this mid-year Semi-Annual Report of the Memorial Funds
for the six month period ended June 30, 2003. The June 30, 2003 net asset values
for the Government Bond Fund, the Growth Equity Fund and the Value Equity Fund
are $10.59, $6.65 and $10.05, respectively. For the six month period ended June
30, 2003 the total return for the Funds are as follows: the Government Bond Fund
is 1.21%**; the Growth Equity Fund is 8.02%**; and the Value Equity Fund is
13.17%**.
As of June 30, 2003, the U.S. Treasury yields continued to decline from year end
2002. Three month treasury yields declined 35 basis points to 0.84% from 1.19%,
the ten year treasury yields decreased 30 basis points to 3.51% from 3.81% and
the thirty year treasury yields decreased 22 basis points to 4.55% from 4.77%
during the six month period. These decreases in the period cause us to look for
a higher probability of rising rates in the second half of 2003. Short term
rates are at or near 45 year lows. However, these rates are anticipated to rise
more rapidly over the short term time horizon versus the longer term rates which
are anticipated to rise modestly.
With the higher probability of higher interest rates, the Memorial Government
Bond Fund managers continue to maintain durations shorter than the comparable
index, which should allow the fund to outperform its index during a rising rate
environment. Increases in the U.S. Treasury market and a continued use of
mortgage backed securities are expected in the second half of the year.
As of June 30, 2003, the Dow Jones Industrial Average index, the NASDAQ
Composite index and the S&P 500 index all ended the period up. During the
period, the S&P 500 rose to 974.50 from 879.82 at year end, an increase of
10.76% for the year, the NASDAQ Composite index rose to 1622.80 from 1335.51 at
year end, an increase of 21.51% for the year and the Dow Jones Industrial
Average rose to 8985.44 from 8341.63 at year end, an increase of 7.72% for the
year.
As the war concerns begin to subside, the focus of the markets is returning to
economic conditions of the country and the prospect of corporate earnings.
Earnings reports have generally been better than expected and interest rates
remain low. The corporate dividends and capital gains taxation changes should
contribute to a positive equity market. As with all rapid equity market rises,
such as the one recently experienced since March 2003, there will be times of
consolidation as the market retraces its steps. However, recent market activity
is acting in a manner of progressive net gains as the equity markets continue to
advance. As the public confidence grows with the success of the war and the
earnings of corporations, we should see continued positive activity in the
equity funds.
The Memorial Growth Equity Fund and the Memorial Value Equity Fund fund managers
are continuing to stand by their strategies with the belief that consistency and
discipline will prevail as they select companies to add to the portfolio or
identify companies to remove from the portfolio.
Thank you for the trust and confidence you have placed in the Memorial Funds. We
are striving to bring you a set of investment alternatives and investment
returns that helps you achieve your financial goals. With volatile and uncertain
markets, we believe a disciplined approach to executing an investment plan and
an informed choice of investments will help you be successful. Use this document
to be informed about the Memorial Funds and examine how they may contribute to
your success. I wish you a very prosperous and successful investing year with
the Memorial Funds.
Sincerely,
/s/ Carl C. Peterson
Carl C. Peterson
President
** Past performance is not predictive of future results. Investment return and
principal value will fluctuate, so that shares, when redeemed, may be worth more
or less than their original cost.
This letter is intended for the Memorial Funds' shareholders. It may not be
distributed to prospective investors unless it is preceded or accompanied by the
current Fund prospectus.
- --------------------------------------------------------------------------------
GOVERNMENT BOND FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------
FACE AMOUNT/
PRINCIPAL SECURITY DESCRIPTION VALUE
- --------------------------------------------------------------------------------
GOVERNMENT AGENCY BONDS & NOTES - (17.22%)
900,000 FHLB, 2.0%, 10/29/04 $ 900,632
1,100,000 FHLMC, 5.38%, 08/16/06 1,150,405
1,300,000 FNMA, 4.25%, 07/15/07 1,400,217
------------
TOTAL GOVERNMENT AGENCY BONDS & NOTES
(COST $3,423,124) 3,451,254
------------
MORTGAGE BACKED SECURITIES - (34.21%)
566,040 FHLMC, Series 2177, 6.00%, 01/15/18 565,837
316,795 FHLMC, Series 2308, 6.50%, 05/15/30 321,624
194,648 FHLMC, Series T-22, 7.12%, 10/25/27 201,948
1,100,000 FNMA, Pool 386008, 4.52%, 04/01/13 1,162,630
480,619 FNMA, Series 1990-6, 9.0%, 01/25/20 530,634
700,000 FNMA, Series 2001-W2, 5.932%, 11/25/30 716,717
205,291 FNMA, Series 2001-29, 6.50%, 10/25/29 207,023
844,561 GNMA, Pool 476998, 6.50%, 07/15/29 887,914
40,429 GNMA, Series 1999-22, 7.0%, 05/21/25 40,395
177,263 GNMA, Series 2001-43, 5.50%, 07/20/12 182,135
880,000 GNMA, Series 2002-38, 6.0%, 11/16/27 891,686
490,802 Vendee Mortgage Trust, Series 1999-3,
6.50%, 05/15/06 516,937
600,000 Vendee Mortgage Trust, Series 2002-3,
6.0%, 04/15/27 628,939
------------
TOTAL MORTGAGE BACKED SECURITIES (COST $6,803,462) 6,854,419
------------
U.S. TREASURY OBLIGATIONS - (40.60%)
1,000,000 2.0%, 05/15/06 # 1,010,938
1,000,000 4.0%, 11/15/12 1,040,899
1,425,000 4.75%, 11/15/08 # 1,580,137
850,000 5.625%, 02/15/06 # 940,081
1,675,000 6.25%, 02/15/07 1,926,774
1,425,000 6.50%, 10/15/06 1,637,637
------------
TOTAL U.S. TREASURY OBLIGATIONS (COST $7,749,079) 8,136,466
------------
SHORT TERM INVESTMENTS - (7.19%)
500,000 FNMA Discount Note, 0%, 08/06/03 499,399
941,947 Merrimac Treasury Plus Series Money Market Fund 941,947
------------
TOTAL SHORT TERM INVESTMENTS (COST $1,441,346) 1,441,346
------------
TOTAL INVESTMENTS (COST $19,417,011) - (99.22%) $ 19,883,485
------------
OTHER ASSETS IN EXCESS OF LIABILITIES - (0.78%) 156,772
------------
TOTAL NET ASSETS - (100%) $ 20,040,257
============
# Part or all of this investment is on loan
The accompanying notes are an integral part of the financial statements.
1
- --------------------------------------------------------------------------------
GROWTH EQUITY FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------
SHARES SECURITY DESCRIPTION VALUE
- --------------------------------------------------------------------------------
COMMON STOCK - (92.14%)
ADVERTISING - (0.52%)
1,300 Getty Images, Inc. * $ 53,690
------------
BANKS - (4.93%)
12,700 U.S. Bancorp 311,150
3,850 Wells Fargo & Co. 194,040
------------
505,190
------------
BROADCASTING - (1.65%)
5,575 Univision Communications, Inc. * # 169,480
------------
COMPUTER HARDWARE - (4.22%)
7,725 Dell, Inc. * 246,891
2,250 International Business Machines Corp. 185,625
------------
432,516
------------
COMPUTERS SERVICES AND SOFTWARE - (9.25%)
4,550 Adobe Systems, Inc. 145,918
2,100 Affiliated Computer Services, Inc. * # 96,033
1,725 Cognos, Inc. * 46,575
1,400 Electronic Arts, Inc. * 103,586
2,150 Intuit, Inc. * # 95,739
13,625 Microsoft Corp. 348,936
9,200 Oracle Corp. * 110,584
------------
947,371
------------
COMMERICIAL SERVICES - (1.28%)
3,550 Iron Mountain, Inc. * 131,669
------------
COSMETICS & TOILETRIES SERVICES - (2.31%)
2,650 Procter & Gamble Co. # 236,327
------------
ELECTRONIC COMPONENTS - (1.23%)
5,125 Microchip Technology, Inc. # 125,562
------------
ENTERTAINMENT & LEISURE - (1.25%)
3,950 Carnival Corp. # 128,414
------------
FINANCIAL SERVICES - (5.28%)
7,200 Citigroup, Inc. # 308,160
3,450 Fannie Mae 232,668
------------
540,828
------------
FOOD AND BEVERAGES- (4.28%)
6,275 Coca-Cola Enterprises, Inc. 113,891
2,425 PepsiCo, Inc. 107,912
7,225 Sysco Corp. # 217,039
------------
438,842
------------
INSURANCE - (6.36%)
3,650 Allstate Corp. $ 130,122
4,200 American International Group 231,756
1,300 Brown & Brown, Inc. 42,250
4,850 Marsh & McLennan Cos., Inc. 247,690
------------
651,818
------------
MEDICAL PRODUCTS - (7.52%)
3,075 Cardinal Health, Inc. 197,723
2,835 Johnson & Johnson 146,569
4,775 Medtronic, Inc. 229,057
2,850 Stryker Corp. 197,705
------------
771,054
------------
MULTIMEDIA - (2.10%)
4,925 Viacom, Inc. * # 215,026
------------
MEDICAL - DRUGS - (1.59%)
2,925 Gilead Sciences, Inc. * 162,572
------------
MISCELLANEOUS MANUFACTURER - (5.77%)
1,420 3M Co. 183,152
14,245 General Electric Co. 408,547
------------
591,699
------------
The accompanying notes are an integral part of the financial statements.
2
- --------------------------------------------------------------------------------
GROWTH EQUITY FUND
SCHEDULE OF INVESTMENTS (concluded)
JUNE 30, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------
SHARES SECURITY DESCRIPTION VALUE
- --------------------------------------------------------------------------------
OIL & GAS - (4.59%)
2,500 Airgas, Inc. 41,875
700 Apache Corp. 45,542
1,600 ENSCO International, Inc. 43,040
9,475 Exxon Mobil Corp. 340,247
------------
470,704
------------
PHARMACEUTICALS - (9.55%)
3,525 Amgen, Inc. * 236,105
4,900 Merck & Co., Inc. 296,695
11,500 Pfizer, Inc. 392,725
925 Teva Pharmaceutical Industries Ltd. # 52,660
------------
978,185
------------
RESTAURANTS - RETAIL - (1.07%)
3,050 Brinker International, Inc. * 109,861
------------
RETAIL STORES - (7.73%)
4,100 Bed Bath & Beyond, Inc. * 159,121
2,500 Best Buy Co., Inc. * # 109,800
5,125 Target Corp. # 193,930
3,300 Walgreen Co. 99,330
4,275 Wal-Mart Stores, Inc. 229,439
------------
791,620
------------
SEMICONDUCTORS - (2.41%)
11,875 Intel Corp. $ 246,810
------------
TELECOMMUNICATIONS - (4.55%)
16,150 Cisco Systems, Inc. * 267,929
4,425 SBC Communications, Inc. 113,059
2,150 Verizon Communications, Inc. 84,818
------------
465,806
------------
TRANSPORATION - (1.14%)
3,100 J.B. Hunt Transport Services, Inc. * 117,025
------------
WASTE MANAGEMENT - (1.56%)
4,150 Stericycle, Inc. * # 159,692
------------
TOTAL COMMON STOCK (COST $10,083,682) 9,441,761
------------
SHORT TERM INVESTMENTS - (5.91%)
504,780 Merrimac Treasury Plus Series Money Market Fund 504,780
100,245 Merrimac U.S. Government Money Market Fund 100,245
------------
TOTAL SHORT TERM INVESTMENTS (COST $605,025) 605,025
------------
TOTAL INVESTMENTS (COST $10,688,707) - (98.05%) $ 10,046,786
------------
OTHER ASSETS IN EXCESS OF LIABILITIES - (1.95%) 200,087
------------
TOTAL NET ASSETS - (100%) $ 10,246,873
============
* Non-income producing investment
# Part or all of this investment is on loan
The accompanying notes are an integral part of the financial statements.
3
- --------------------------------------------------------------------------------
VALUE EQUITY FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------
SHARES SECURIRY DESCRIPTION VALUE
- --------------------------------------------------------------------------------
COMMON STOCK - (99.38%)
AEROSPACE - (1.96%)
900 United Technologies Corp. $ 63,747
------------
AGRICULTURE - (2.37%)
1,700 Altria Group, Inc. 77,248
------------
APPAREL - (3.61%)
1,500 Liz Claiborne, Inc. 52,875
1,900 VF Corp. 64,695
------------
117,570
------------
APPLIANCES - (1.50%)
2,000 Maytag Corp. 48,840
------------
AUTOPARTS - (4.51%)
5,600 Delphi Corp. 48,328
4,700 Ford Motor Co. # 51,653
1,300 General Motors Corp. 46,800
------------
146,781
------------
BANKS - (10.41%)
800 Bank of America Corp. 63,224
1,800 Banknorth Group, Inc. 45,936
2,100 Charter One Financial, Inc. 65,478
1,900 J.P. Morgan Chase & Co. 64,942
1,400 Keycorp 35,378
1,550 Washington Mutual, Inc. 64,015
------------
338,973
------------
BUILDING - (1.47%)
2,000 Masco Corp. 47,700
------------
CHEMICALS - (1.33%)
1,400 Rohm & Haas Co. 43,442
------------
COMPUTER WARE - (6.41%)
2,900 Computer Associates International, Inc. # 64,612
5,500 Compuware Corp. * 31,735
3,100 Hewlett-Packard Co. 66,030
1,100 Parker Hannifin Corp. 46,189
------------
208,566
------------
COMSUMER PRODUCTS - (1.92%)
1,200 Fortune Brands, Inc. 62,640
------------
DIVERSIFIED COMGLORERATES - (2.77%)
1,200 Cooper Industries, Ltd. 49,560
800 PPG Industries, Inc. 40,592
------------
90,152
------------
ENTERTAINMENT - (1.46%)
1,900 Brunswick Corp. $ 47,538
------------
FINANCIAL GROUPS - (4.98%)
1,900 Citigroup, Inc. 81,320
1,200 Fannie Mae 80,928
------------
162,248
------------
FOOD & BEVERAGE - (2.0%)
3,900 Kroger Co. * 65,052
------------
FOREST AND PAPER - (1.52%)
2,000 MeadWestvaco Corp. 49,400
------------
HEALTHCARE - (3.78%)
2,000 HCA, Inc. 64,080
700 WellPoint Health Networks Inc. * 59,010
------------
123,090
------------
INSURANCE - (9.30%)
1,150 American International Group 63,457
900 Cigna Corp. 42,246
1,400 Hartford Financial Services Group, Inc. 70,504
1,800 Lincoln National Corp. 64,134
1,700 Radian Group, Inc. 62,305
------------
302,646
------------
The accompanying notes are an integral part of the financial statements.
4
- --------------------------------------------------------------------------------
VALUE EQUITY FUND
SCHEDULE OF INVESTMENTS (concluded)
JUNE 30, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------
SHARES SECURIRY DESCRIPTION VALUE
- --------------------------------------------------------------------------------
MISCELLANEOUS MANUFACTURING - (2.38%)
2,700 General Electric Co. 77,436
------------
OIL AND GAS - (8.35%)
2,100 Ashland, Inc. 64,428
950 ChevronTexaco Corp. # 68,590
1,250 ConocoPhillips 68,500
2,100 Occidental Petroleum Corp. 70,455
------------
271,973
------------
PHARMACEUTICAL - (1.95%)
1,050 Merck & Co., Inc. 63,577
------------
RETAIL - (7.41%)
1,900 Federated Department Stores # 70,015
1,400 Home Depot, Inc. 46,368
1,900 Sears Roebuck and Co. # 63,916
3,900 Sovereign Bancorp, Inc. # 61,035
------------
241,334
------------
STEEL - (1.95%)
1,300 Nucor Corp. 63,505
------------
TELECOMMUNICATIONS - (6.83%)
1,800 BellSouth Corp. $ 47,934
2,500 SBC Communications, Inc. 63,875
3,300 Sprint Corp.-FON Group. 47,520
1,600 Verizon Communications, Inc. 63,120
------------
222,449
------------
TRANSPORTATION - (3.03%)
2,200 Burlington Northern Santa Fe Corp. 62,568
1,200 CSX Corp. 36,108
------------
98,676
------------
UTILITIES - (6.18%)
900 Dominion Resources, Inc. 57,843
1,900 FirstEnergy Corp. 73,055
3,700 NiSource, Inc. 70,300
------------
201,198
------------
TOTAL COMMON STOCK (COST $3,095,468) 3,235,781
------------
SHORT TERM INVESTMENTS- (3.46%)
Merrimac Treasury Plus Series Money
112,563 Market Fund (cost $112,563) 112,563
------------
TOTAL INVESTMENTS (COST $3,208,031) - (102.84%) $ 3,348,344
LIABILITIES IN EXCESS OF OTHER ASSETS - (-2.84%) (92,464)
------------
TOTAL NET ASSETS - (100%) $ 3,255,880
============
* Non-income producing investment
# Part or all of this investment is on loan
The accompanying notes are an integral part of the financial statements.
5
- -----------------------------------------------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 2003 (UNAUDITED)
- -----------------------------------------------------------------------------------------------------------------------
GOVERNMENT GROWTH VALUE
BOND FUND EQUITY FUND EQUITY FUND
------------ ------------ ------------
ASSETS:
Investments, at market (identified cost: $19,417,011,
$10,688,707 and $3,208,031 respectively) $ 19,883,485 $ 10,046,786 $ 3,348,344
Collateral for securities loaned (Note 6) 2,549,020 2,140,575 382,300
Receivables:
Dividends -- 8,603 5,437
Interest 183,100 330 19
Income due from securities loaned 271 78 11
Fund shares sold 19,484 188,047 9,373
Prepaid expenses 13,065 15,079 2,664
Due from Advisor 13,955 15,442 13,911
------------ ------------ ------------
Total assets 22,662,380 12,414,940 3,762,059
------------ ------------ ------------
LIABILITIES:
Payables:
Distribution payable 44,497 5,841 11,281
Investments purchased -- -- 100,773
Collateral for securities loaned (Note 6) 2,549,020 2,140,575 382,300
Fund shares redeemed -- 561
Administrator fees (Accounting, Distribution, Transfer Agent) 5,862 5,862 5,862
Other accrued expenses 22,744 15,228 5,963
------------ ------------ ------------
Total liabilities 2,622,123 2,168,067 506,179
------------ ------------ ------------
NET ASSETS $ 20,040,257 $ 10,246,873 $ 3,255,880
============ ============ ============
NET ASSETS CONSIST OF:
Additional paid-in capital $ 20,024,012 $ 15,734,509 $ 4,801,102
Undistributed net investment income 2,158 -- --
Accumulated realized loss on investments (452,387) (4,845,715) (1,685,535)
Net unrealized gain (loss) on investments 466,474 (641,921) 140,313
------------ ------------ ------------
Total Net Assets $ 20,040,257 $ 10,246,873 $ 3,255,880
============ ============ ============
Shares of Beneficial Interest 1,892,476 1,541,554 323,814
============ ============ ============
Net Asset Value, offering and redemption price per share $ 10.59 $ 6.65 $ 10.05
============ ============ ============
Market value of securities on loan (Note 6) $ 2,478,663 $ 2,080,243 $ 363,763
------------ ------------ ------------
The accompanying notes are an integral part of the financial statements.
6
- --------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE PERIOD ENDED JUNE 30, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------------------------------------------------
GOVERNMENT GROWTH VALUE
BOND FUND EQUITY FUND EQUITY FUND
------------ ------------ ------------
INVESTMENT INCOME:
Interest $ 408,373 $ 2,254 $ 164
Securities lending income (see Notes 2 and 6) 1,812 199 57
Dividends -- 49,335 37,746
Miscellaneous income -- 5,835 --
------------ ------------ ------------
Total investment income 410,185 57,623 37,967
------------ ------------ ------------
EXPENSES:
Investment advisory fees (Note 3) 33,183 21,576 6,732
Shareholder services fees (Note 3) 23,702 10,788 3,366
Administration fees (Note 3) 36,696 36,696 36,696
Legal fees 33,914 14,665 3,779
Audit fees 5,618 6,100 6,392
Custody fees (Note 3) 1,978 4,311 2,643
Trustee fees (Note 3) 6,246 2,853 885
Compliance fees 2,332 8,582 783
Report printing fees 2,021 916 286
Insurance fees 2,777 1,305 392
Amortization of organization costs (Note 2) 1,467 1,467 1,467
Miscellaneous 4,959 7,439 2,976
------------ ------------ ------------
Total expenses before waivers and reimbursements 154,893 116,698 66,397
Waivers and reimbursements (Note 4) (64,827) (64,916) (50,240)
------------ ------------ ------------
Total expenses, net 90,066 51,782 16,157
------------ ------------ ------------
Net investment income 320,119 5,841 21,810
------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments 52,823 (208,552) (51,172)
Net change in unrealized appreciation (depreciation) on investments (147,613) 951,708 376,513
------------ ------------ ------------
(94,790) 743,156 325,341
------------ ------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 225,329 $ 748,997 $ 347,151
============ ============ ============
The accompanying notes are an integral part of the financial statements.
7
- -------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------------------
GOVERNMENT BOND FUND
-----------------------------
PERIOD ENDED YEAR ENDED
JUNE 30, 2003 DECEMBER 31,
(UNAUDITED) 2002
------------ ------------
INCREASE IN NET ASSETS
Operations:
Net investment income $ 320,119 $ 724,251
Net realized gain on investments 52,823 133,059
Net change in unrealized appreciation
(depreciation) on investments (147,613) 498,746
------------ ------------
Net increase in net assets resulting from operations 225,329 1,356,056
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income - Institutional shares (320,523) (724,438)
------------ ------------
Total Distributions to shareholders (320,523) (724,438)
------------ ------------
CAPITAL SHARE TRANSACTIONS
Sale of shares - Institutional shares 2,036,033 1,201,695
Reinvestment of distributions - Institutional shares 45,183 11,739
Redemption of shares - Institutional shares (656,113) (193,151)
------------ ------------
Net increase from capital transactions 1,425,103 1,020,283
------------ ------------
Total increase in net assets 1,329,909 1,651,901
NET ASSETS:
Beginning of period 18,710,348 17,058,447
------------ ------------
End of period (including undistributed net investment
income of $2,158 and $2,562, respectively) $ 20,040,257 $ 18,710,348
============ ============
CAPITAL SHARE TRANSACTIONS Shares Shares
------------ ------------
Sale of shares - Institutional shares 191,265 114,328
Reinvestment of distributions - Institutional shares 4,262 1,124
Redemption of shares - Institutional shares (61,663) (18,602)
------------ ------------
Net increase in shares 133,864 96,850
============ ============
The accompanying notes are an integral part of the financial statements.
8
- ------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (concluded)
- ------------------------------------------------------------------------------------------------------------------------
GROWTH EQUITY FUND VALUE EQUITY FUND
---------------------------- ----------------------------
PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED
JUNE 30, 2003 DECEMBER 31, JUNE 30, 2003 DECEMBER 31,
(UNAUDITED) 2002 (UNAUDITED) 2002
------------ ------------ ------------ ------------
INCREASE IN NET ASSETS
OPERATIONS:
Net investment income (loss) $ 5,841 $ (14,748) $ 21,810 $ 26,198
Net realized gain (loss) on investments (208,552) (1,710,596) (51,172) 240,113
Net change in unrealized appreciation
(depreciation) on investments 951,708 (109,524) 376,513 (462,794)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations 748,997 (1,834,868) 347,151 (196,483)
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income - Institutional shares (5,841) -- (22,300) (26,272)
------------ ------------ ------------ ------------
Total Distributions to shareholders (5,841) -- (22,300) (26,272)
------------ ------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS
Sale of shares - Institutional Shares 2,212,590 3,753,473 297,700 1,260,234
Reinvestment of distributions - Institutional Shares 4,851 -- 9,397 --
Redemption of shares - Institutional Shares (488,276) (3,433,213) (10,000) (1,613,609)
------------ ------------ ------------ ------------
Net increase (decrease) from capital transactions 1,729,165 320,260 297,097 (353,375)
------------ ------------ ------------ ------------
Total increase (decrease) in net assets 2,472,321 (1,514,608) 621,948 (576,130)
NET ASSETS:
Beginning of period 7,774,552 9,289,160 2,633,932 3,210,062
------------ ------------ ------------ ------------
End of period (including undistributed net
investment income of $0, $0, $0 and $174,
respectively) $ 10,246,873 $ 7,774,552 $ 3,255,880 $ 2,633,932
============ ============ ============ ============
CAPITAL SHARE TRANSACTIONS Shares Shares Shares Shares
------------ ------------ ------------ ------------
Sale of shares - Institutional Shares 358,546 513,980 29,884 130,515
Reinvestment of distributions - Institutional Shares 729 -- 936 --
Redemption of shares - Institutional Shares (78,969) (447,762) (1,143) (149,188)
------------ ------------ ------------ ------------
Net increase (decrease) in shares 280,306 66,218 29,677 (18,673)
============ ============ ============ ============
The accompanying notes are an integral part of the financial statements.
8
- --------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
GOVERNMENT BOND FUND
INSTITUTIONAL SHARES
----------------------------------------------------------------------------
FOR THE PERIOD FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED ENDED ENDED
JUNE 30, 2003 DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
(UNAUDITED) 2002 2001 2000 1999
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $ 10.64 $ 10.27 $ 10.09 $ 9.50 $ 10.25
---------- ---------- ---------- ---------- ----------
INVESTMENT OPERATIONS:
Net investment income 0.18 0.43 0.50 0.53 0.51
Net realized and unrealized gain
(loss) on investments (0.05) 0.37 0.17 0.59 (0.75)
---------- ---------- ---------- ---------- ----------
Total from investment operations $ 0.13 $ 0.80 0.67 1.12 (0.24)
---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS:
From net investment income (0.18) (0.43) (0.49) (0.53) (0.51)
---------- ---------- ---------- ---------- ----------
Total distributions (0.18) (0.43) (0.49) (0.53) (0.51)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 10.59 $ 10.64 $ 10.27 $ 10.09 $ 9.50
========== ========== ========== ========== ==========
TOTAL RETURN (A) 1.21% 7.96% 6.81% 12.12% (2.39)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) $ 20,040 $ 18,710 $ 17,058 $ 40,501 $ 69,082
Ratio of expenses to average net assets:
including reimbursement/waiver of fees 0.95%(b) 0.95% 0.86% 0.75% 0.73%
Ratio of expenses to average net assets:
excluding reimbursement/waiver of fees 1.63%(b) 1.71% 1.08% 0.87% 0.79%
Ratio of net investment income to
average net assets including
reimbursement/waiver of fees: 3.38%(b) 4.13% 4.93% 5.51% 5.17%
Portfolio turnover rate 48% 43% 118% 50% 25%
(a) Total return would have been lower had certain expenses not been reduced
during the period shown.
(b) Annualized
The accompanying notes are an integral part of the financial statements.
10
- --------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
GROWTH EQUITY FUND
INSTITUTIONAL SHARES
----------------------------------------------------------------------------
FOR THE PERIOD FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED ENDED ENDED
JUNE 30, 2003 DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
(UNAUDITED) 2002 2001 2000 1999
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, BEGINNING OF PERIOD $ 6.16 $ 7.77 $ 9.26 $ 12.50 $ 11.49
---------- ---------- ---------- ---------- ----------
INVESTMENT OPERATIONS:
Net investment loss -- (0.01) -- (0.01) (0.01)
Net realized and unrealized gain
(loss) on investments 0.49 (1.60) (1.47) (0.69) 2.67
---------- ---------- ---------- ---------- ----------
Total from investment operations 0.49 (1.61) (1.47) (0.70) 2.66
---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS:
From net investment income (0.00)(d) -- -- -- (0.00)(c)
From net realized capital gain -- -- (0.02) (2.54) (1.56)
Return of capital -- -- -- -- (0.09)
---------- ---------- ---------- ---------- ----------
Total distributions -- -- (0.02) (2.54) (1.65)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 6.65 $ 6.16 $ 7.77 $ 9.26 $ 12.50
========== ========== ========== ========== ==========
TOTAL RETURN (A) 8.02% (20.72)% (15.82)% (5.66)% 24.44%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) $ 10,247 $ 7,775 $ 9,289 $ 29,889 $ 41,833
Ratio of expenses to average net assets:
including reimbursement/waiver of fees 1.20%(b) 1.20% 1.11% 1.00% 1.00%(b)
Ratio of expenses to average net assets:
excluding reimbursement/waiver of fees 2.70%(b) 2.64% 1.47% 1.18% 1.09%(b)
Ratio of net investment income (loss) to
average net assets including
reimbursement/ waiver of fees: 0.14%(b) (0.18)% (0.06)% (0.11)% (0.10)%(b)
Portfolio turnover rate 18% 58% 52% 78% 108%
(a) Total return would have been lower had certain expenses not been reduced
during the period shown.
(b) Annualized
(c) Distributions per share were $0.00055.
(d) Distributions per share were $0.00386.
The accompanying notes are an integral part of the financial statements.
11
- --------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
VALUE EQUITY FUND
INSTITUTIONAL SHARES
----------------------------------------------------------------------------
FOR THE PERIOD FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED ENDED ENDED
JUNE 30, 2003 DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
(UNAUDITED) 2002 2001 2000 1999
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, BEGINNING OF PERIOD $ 8.95 $ 10.26 $ 9.12 $ 8.75 $ 9.19
---------- ---------- ---------- ---------- ----------
INVESTMENT OPERATIONS:
Net investment income 0.07 0.12 0.13 0.16 0.08
Net realized and unrealized gain
(loss) on investments 1.10 (1.31) 1.15 0.37 (0.44)
---------- ---------- ---------- ---------- ----------
Total from investment operations 1.17 (1.19) 1.28 0.53 (0.36)
---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS:
From net investment income (0.07) (0.12) (0.14) (0.16) (0.08)
---------- ---------- ---------- ---------- ----------
Total distributions (0.07) (0.12) (0.14) (0.16) (0.08)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 10.05 $ 8.95 $ 10.26 $ 9.12 $ 8.75
========== ========== ========== ========== ==========
TOTAL RETURN (A) 13.17% (11.66)% 14.08% 6.20% (3.96)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) $ 3,256 $ 2,634 $ 3,210 $ 17,617 $ 37,068
Ratio of expenses to average net assets:
including reimbursement/waiver of fees 1.20%(b) 1.20% 1.09% 1.00% 1.00%(b)
Ratio of expenses to average net assets:
excluding reimbursement/waiver of fees 4.93%(b) 5.06% 1.82% 1.18% 1.09%(b)
Ratio of net investment income to
average net assets including
reimbursement/waiver of fees: 1.62%(b) 1.13% 1.26% 1.59% 0.90%(b)
Portfolio turnover rate 13% 90% 45% 168% 60%
(a) Total return would have been lower had certain expenses not been reduced
during the period shown.
(b) Annualized
The accompanying notes are an integral part of the financial statements.
12
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 1. ORGANIZATION
Memorial Funds (the "Trust") is an open-end management investment company
organized as a Delaware business trust. The Trust currently has three
diversified investment portfolios (each a "Fund" and, collectively, the
"Funds"). The Trust Instrument authorizes each Fund to issue an unlimited number
of shares of beneficial interest. The dates of commencement of operations for
each Fund are as follows:
Government Bond Fund March 30, 1998
Growth Equity Fund March 30, 1998
Value Equity Fund March 30, 1998
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These financial statements are prepared in accordance with accounting principles
generally accepted in the United States of America, which requires management to
make certain estimates and assumptions that affect the reported amounts of
assets and liabilities, disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of increase and
decrease in net assets from operations during the fiscal period. Actual results
could differ from those estimates.
The following represent significant accounting policies of the Funds:
SECURITY VALUATION - Securities, other than short-term securities, held by the
Funds for which market quotations are readily available are valued using the
last reported sales price provided by independent pricing services as of the
close of trading on the New York Stock Exchange (normally 4:00 p.m. Eastern
time) on each Fund's business day. If no sales are reported, the mean of the
last bid and asked price is used. Debt securities are generally traded in the
over-the-counter market and are valued at a price deemed best to reflect fair
value as quoted by dealers who make markets in those securities or by an
independent pricing source. U.S. Government obligations are valued at the last
reported bid price. In the absence of readily available market quotations,
securities are valued at fair value as determined by the Board of Trustees. At
June 30, 2003, no securities were valued at fair value as determined by the
Board of Trustees. Securities with a maturity of 60 days or less are valued at
amortized cost.
REALIZED GAIN AND LOSS - Security transactions are accounted for on a trade date
basis and realized gains and losses on investments sold are determined on the
basis of identified cost.
INTEREST AND DIVIDEND INCOME - Interest income is accrued as earned. Dividends
on securities held by the Funds are recorded on the ex-dividend date.
DISTRIBUTIONS TO SHAREHOLDERS - Distributions of net investment income to
shareholders are declared daily and paid monthly by the Government Bond Fund.
Net investment income distributions, if any, for the Growth Equity Fund and the
Value Equity Fund are declared and paid quarterly. Net capital gains for the
Funds, if any, are distributed to shareholders at least annually. Distributions
are based on amounts calculated in accordance with applicable income tax
regulations.
ORGANIZATION COSTS - Costs incurred by the Funds in connection with their
organization and registration of shares have been capitalized and are being
amortized using the straight-line method over a five-year period beginning with
the commencement of the Funds' operations. Organization costs have been fully
amortized and are no longer being accrued by the Funds effective March 30, 2003.
13
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
JUNE 30, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------
FEDERAL TAXES - Each Fund intends to qualify each year as a regulated investment
company and distribute all its taxable income. In addition, by distributing in
each calendar year substantially all its net investment income, capital gains
and certain other amounts, if any, each Fund will not be subject to a federal
excise tax. As the Funds intend to meet these minimum distribution requirements,
no federal income tax provision is currently required.
As of December 31, 2002, the Funds have capital loss carryovers in the following
amounts:
AMOUNT EXPIRING DATE
------ -------------
Government Bond Fund $ 505,210 12/31/2008
Growth Equity Fund 2,704,374 12/31/2009
1,658,405 12/31/2010
Value Equity Fund 34,627 12/31/2007
1,589,319 12/31/2008
SECURITY LOANS - The Funds may receive fees or retain a portion of interest on
the securities or cash received as collateral for lending securities. A Fund
also continues to receive interest or dividends on the securities loaned.
Securities loaned are secured by collateral whose market value must always
exceed the market value of the securities loaned plus accrued interest. Gain or
loss in the market price of the securities loaned that may occur during the term
of the loan are reflected in the value of the Fund.
NOTE 3. ADVISORY, SERVICING FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The investment advisor of each Fund is Parkway Advisors, L.P. The advisory fees
paid to the Advisor are 0.35% of the average daily net assets of the Government
Bond Fund and 0.50% of the average daily net assets of the Growth Equity Fund
and the Value Equity Fund. The Advisor has agreed to cap expenses at 0.95% of
the average daily net assets of the Government Bond Fund and 1.20% of the
average daily net assets of the Growth Equity Fund and the Value Equity Fund. In
addition, the Advisor has retained the following investment sub-advisors (each a
"Sub-advisor") for each Fund pursuant to an investment sub-advisory agreement
with the Advisor:
Government Bond Fund Eagle Asset Management, Inc.
Growth Equity Fund Davis Hamilton Jackson & Associates, L.P.
Value Equity Fund PPM America, Inc.
Currently, the Advisor pays the Sub-advisors of the Government Bond Fund an
annual fee of 0.20% of the average daily net assets of the Fund. The
Sub-advisors for the Growth Equity Fund and the Value Equity Fund are currently
paid an annual fee of 0.30% of the average daily net assets of each Fund.
14
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
JUNE 30, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------
On behalf of each Fund, the Trust has entered into an Investment Company
Services Agreement ("ICSA") with InCap Service Company ("ISC") to provide
day-to-day operational services to the Funds including, but not limited to,
accounting, administrative, transfer agent, dividend disbursement, registrar and
record keeping services. For its services, ISC receives monthly, from each Fund,
a fee of 0.20% of the average annual net assets of the Funds (decreasing to
0.15% at average annual net asset levels of $25 million but less than $50
million, 0.10% at average annual net asset levels of $50 million but less than
$100 million, 0.075% at average annual net asset levels of $100 million but less
than $400 million and 0.03% at average annual net asset levels exceeding $400
million). The minimum fee paid to ISC is $5,917 per month per Fund. ISC is
currently earning the minimum fee.
On behalf of each Fund, the Trust has entered into a Distribution Agreement with
InCap Securities, Inc. to provide distribution services to the Funds including,
but not limited to, distribution and underwriter services. For its services,
InCap Securities, Inc. receives $250 per month from each Fund.
Investors Bank & Trust Company serves as the custodian for each Fund, for which
it receives a fee from each Fund at an annual rate as follows: 0.01% of the
average daily net assets of the Fund for the first $100 million in Fund assets
and 0.005% of the average daily net assets of the Fund for the remaining Fund
assets. The custodian is also paid certain transaction fees. These fees are
accrued daily by the Funds and are paid monthly based on average net assets and
transactions for the previous month.
The Trust has adopted a Shareholder Service Plan which allows it to obtain the
services of the Advisor and other qualified financial institutions to act as
shareholder servicing agents for their customers. Under this plan, the Trust
pays Parkway Advisors Group, Inc., a fee at an annual rate of 0.25% of the
average daily net assets of the Funds' Institutional Shares.
Each Trustee, who is not an "affiliated person" as defined in the Act, receives
from the Trust an annual fee of $5,000 plus out of pocket expenses. In addition,
each Trustee receives $500 per meeting attended.
NOTE 4. WAIVER OF FEES
The Sub-advisors, InCap Service Company, InCap Securities, Inc. and the
Shareholder Servicing Agent (Parkway Advisors Group, Inc.) may voluntarily waive
a portion of their fees. For the period ended June 30, 2003, there were no fees
waived.
In addition, the Advisor, under certain circumstances, may reimburse certain
expenses of the Funds. The Advisor has agreed to pay expenses in excess of 0.95%
for the Government Bond Fund and 1.20% for the Growth Equity Fund and the Value
Equity Fund. For the period ended June 30, 2003, Parkway Advisors, L.P. has
reimbursed the Funds as follows:
PARKWAY
ADVISORS, L.P.
--------------
Government Bond Fund $64,827
Growth Equity Fund 64,916
Value Equity Fund 50,240
15
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
JUNE 30, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 5. SECURITIES TRANSACTIONS
The cost of securities purchased and the proceeds from sales of securities,
other than short-term securities, for the period ended June 30, 2003, were as
follows:
PURCHASES SALES
------------------------ ------------------------
U.S. GOV'T. OTHER U.S. GOV'T. OTHER
---------- ---------- ---------- ----------
Government Bond Fund $2,870,891 $7,016,431 $ 533,672 $8,090,285
Growth Equity Fund -- 2,766,068 -- 1,528,144
Value Equity Fund -- 719,030 -- 358,285
For Federal income tax purposes, the tax cost basis of investment securities
owned, the aggregate gross unrealized appreciation, the aggregate gross
unrealized depreciation and net unrealized appreciation (depreciation) as of
June 30, 2003 were as follows:
GROSS GROSS NET UNREALIZED
UNREALIZED UNREALIZED APPRECIATION
TAX COST APPRECIATION DEPRECIATION (DEPRECIATION)
------------ ------------ ------------ ------------
Government Bond Fund $ 19,417,011 $ 505,375 $ (38,901) $ 466,474
Growth Equity Fund 10,774,922 482,682 (1,210,818) (728,136)
Value Equity Fund 3,268,804 269,900 (190,360) 79,540
NOTE 6. SECURITIES LENDING
As of June 30, 2003, the Government Bond Fund, Growth Equity Fund and Value
Equity Fund had loaned securities in return for securities and cash collateral,
which was invested in various short-term, fixed income securities such as
repurchase agreements, commercial paper and government and corporate notes and
bonds. The risks to the Fund from securities lending are that the borrower may
not provide additional collateral when required or return the securities when
due or when called by the Fund. The value of the securities on loan and the
value of the related collateral were as follows:
SECURITIES COLLATERAL
---------- ----------
Government Bond Fund $2,478,663 $2,549,020
Growth Equity Fund 2,080,243 2,140,575
Value Equity Fund 363,763 382,300
16
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
JUNE 30, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 7. DISTRIBUTIONS TO SHAREHOLDERS
As of December 31, 2002, the components of distributable earnings on tax basis
were as follows:
Unrealized
Undistributed Undistributed Appreciation
Ordinary Capital (Depreciation), Distributable
Income Loss, Net Net Earnings, Net
------------ ------------ ------------ ------------
Government Bond Fund $ 2,562 $ (505,210) $ 614,087 $ 111,439
Growth Equity Fund -- (4,567,502) (1,663,290) (6,230,792)
Value Equity Fund 490 (1,596,118) (274,445) (1,870,073)
The tax composition of dividends paid during the period ended June 30, 2003 were
as follows:
Ordinary Income
---------------
Government Bond Fund $320,523
Growth Equity Fund 5,841
Value Equity Fund 22,300
The tax composition of dividends paid during the year ended December 31, 2002
were as follows:
Ordinary Income
---------------
Government Bond Fund $724,438
Growth Equity Fund --
Value Equity Fund 26,272
17
THE MEMORIAL FUNDS
INVESTMENT ADVISOR
Parkway Advisors, L.P.
6550 Directors Parkway
Abilene, Texas 79606
SHAREHOLDER SERVICING AGENT
Parkway Advisors Group, Inc.
6550 Directors Parkway
Abilene, Texas 79606
DISTRIBUTOR
InCap Securities, Inc.
630A Fitzwatertown Road
Willow Grove, PA 19090
TRANSFER AGENT & DIVIDEND DISBURSING AGENT
InCap Service Company
630A Fitzwatertown Road
Willow Grove, PA 19090
This report is submitted for the general information of the shareholders of the
Funds. It is not authorized for distribution to prospective investors in the
Funds unless preceded or accompanied by an effective prospectus, which includes
information regarding the Fund's objectives and policies, experience of its
management, marketability of shares, and other information.
ITEM 2. CODE OF ETHICS.
Code of Ethics attached hereto as EX-99.CODE ETH.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable at this time.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable at this time.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial officer
has concluded that the registrant's disclosure controls and procedures (as
defined in Rule 30a-2(c) under the Investment Company Act of 1940, as amended
(the "1940 Act")) are effective based on their evaluation of these controls and
procedures as of a date within 90 days of the filing date of this document.
(b) There were no significant changes in the registrant's internal controls or
in other factors that could affect these controls subsequent to the date of
their evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
ITEM 10. EXHIBITS
(a) Code of Ethics attached hereto as EX-99.CODE ETH.
(b) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
are attached hereto as EX-99.CERT. Certifications pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 are attached hereto as EX-99.906CERT.
SIGNATURES
[See General Instruction F]
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) Memorial Funds
-------------------------------------------------------
By (Signature and Title)* /s/ Carl C. Peterson
------------------------------------------
Carl C. Peterson, President
Date July 31, 2003
--------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Carl C. Peterson
------------------------------------------
Carl C. Peterson, President
Date July 31, 2003
--------------------------------------------------------------
By (Signature and Title)* /s/ Larry Beaver
------------------------------------------
Larry Beaver, Treasurer
Date July 31, 2003
--------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.