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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
---------------------------------------------
Monteagle Funds
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
6550 Directors Parkway Abilene, Texas 79606
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Carl C. Peterson
Parkway Advisors, L.P. 6550 Directors Parkway Abilene, Texas 79606
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (325) 698-3868
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Date of fiscal year end: August 31, 2008
--------------------------
Date of reporting period: August 31, 2008
--------------------------
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.
[BACKGROUND GRAPHIC OMITTED]
MONTEAGLE FUNDS
Fixed Income Fund
Quality Growth Fund
Large Cap Growth Fund
Select Value Fund
Value Fund
Informed Investor Growth Fund
ANNUAL REPORT
AUGUST 31, 2008
-----------------
[GRAPHIC OMITTED]
MONTEAGLE FUNDS
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TABLE OF CONTENTS
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LETTER FROM THE PRESIDENT................................................. 3
A DISCUSSION OF FUND PERFORMANCE.......................................... 5
SUPPLEMENTARY PORTFOLIO INFORMATION....................................... 27
FINANCIAL STATEMENTS OF THE MONTEAGLE FUNDS
Schedule of Investments:
Fixed Income Fund...................................................... 33
Quality Growth Fund.................................................... 37
Large Cap Growth Fund.................................................. 41
Select Value Fund...................................................... 43
Value Fund............................................................. 46
Informed Investor Growth Fund.......................................... 48
Statements of Assets and Liabilities...................................... 50
Statements of Operations.................................................. 52
Statements of Changes in Net Assets ...................................... 54
Financial Highlights...................................................... 60
Notes to Financial Statements............................................. 66
Report of Independent Registered Public Accounting Firm................... 75
Other Information......................................................... 76
About Your Funds' Expenses................................................ 77
Trustees and Officers of the Trust........................................ 80
Board Approval of Investment Sub-Advisory Agreement
Large Cap Growth Fund.................................................. 82
Value Fund............................................................. 84
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LETTER FROM THE PRESIDENT (UNAUDITED)
================================================================================
Dear Shareholder:
It's that time of year again and the Annual Report of the Monteagle Funds for
the twelve month period ended August 31, 2008 is presented in the following
pages. Please take time to read the report as it contains important information
about the Monteagle Funds, including the investment advisers' reports discussing
items such as the performance and the factors that influenced the performance,
the investment approach and the current investment strategy for each Fund. The
audited financial statements with footnotes and information about the Funds'
Trustees and Officers are also included.
The Monteagle Funds continue to look for ways to bring new fund offerings to
investors. Commencing with an initial public offering on April 3, 2008, the
Monteagle Informed Investor Growth Fund (MIIFX) was added to the Monteagle Funds
in our continuing efforts to expand our fund offerings to investors. I would
like to welcome our new sub-adviser Thomas H. Fitzgerald, Jr. of T.H. Fitzgerald
& Company to our team of professional investment managers. Mr. Fitzgerald brings
a new and unique "Informed Investors" approach as the principal investment
strategy with an investment objective of long term capital appreciation. Please
refer to our website, www.monteaglefunds.com, for more detailed information
regarding this new fund. Also, be sure to read the prospectus of this new fund
to determine if it is appropriate for your investment objectives.
With the new fund, the Monteagle Funds have six series of investment offerings
for your investment needs: Monteagle Fixed Income Fund (MFHRX), Monteagle
Quality Growth Fund (MFGIX), Monteagle Large Cap Growth Fund (MEHRX), Monteagle
Select Value Fund (MVEIX), Monteagle Value Fund (MVRGX) and the new Monteagle
Informed Investor Growth Fund (MIIFX). Before you make an investment in one of
our Funds, I encourage you to visit our website, www.monteaglefunds.com, and
review a prospectus of the Fund you are interested in and review our other
public informational filings to determine if the Fund is suitable for your
investment needs.
Since the last annual report to our shareholders, many of you have been affected
by the recent market decline, watching your investment and retirement accounts
drop in value as the equity and bond markets have been dramatically affected.
Many negative items continue to impact the investing environment in the U.S. and
abroad. Inflation fears, sub-prime mortgage concerns and high commodity prices
have roiled the markets. The fear of a recession and the expectation of lower
corporate profits have added to the market uncertainty. After a brief
anticipation of easing inflation concerns and the progressive reduction of the
Federal Funds rate by the Federal Open Markets Committee ("FOMC") in September
and October 2007, the equity market indices reached new highs on October 9,
2007. The Dow Jones Industrial Average Index reached 14,164.53 and the Standard
& Poor's 500 Index reached 1,565.15. Subsequent to these record new highs, the
fear of a global economic slow down, the continued rise in commodity prices and
the declining confidence of the consumer put pressure on the FOMC to continue
decreasing the Federal Funds rate in an effort to stimulate economic growth and
bolster investor confidence. The equity markets began a decline from the October
2007 highs to the early part of March 2008. A market recovery began from the
March lows and continued through the early part of May 2008. As a broadening
problem in the housing and financial markets became more evident, investor
confidence was again shaken. On July 15, 2008, the Dow Jones Industrial Average
Index reached 10,962.54 and the
3
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LETTER FROM THE PRESIDENT (UNAUDITED) (CONTINUED)
================================================================================
Standard & Poor's 500 Index reached 1,214.91 setting the lows during our fiscal
year. After reaching these lows and as the price of a barrel of oil dropped to
$115 from an early July 2008 high of $145, the markets began a modest move
upward through the end of August 2008. Despite the declining commodity prices,
tight credit market conditions were continuing to put pressure on business and
consumer borrowing. Other economic indicators were continuing to show signs of
slower economic growth.
Subsequent to our August 31, 2008 fiscal year end, the financial and capital
markets segment of our economy began a massive decline due to the fear that
homeowners were becoming unable to pay their mortgage payments because of the
high costs of gasoline and commodity prices in general. As the housing market
crisis continued to expand, concern about the solvency of the Federal National
Mortgage Association and the Federal Home Loan Mortgage Corporation caused the
Federal Government to take control of these institutions effectively
nationalizing them. Additionally, major investment banks, large commercial banks
and large insurers began to suffer as these Financials sector stocks became the
targets of short-sellers in the equity market. Also, because these financial
institutions were unable to determine the market value of securities on their
balance sheets, the credit markets began to stop functioning as these
institutions began failing, merging or selling off segments of their businesses
to raise capital. Then, with no credit available to borrowers, a fear arose that
the U.S. financial markets were going to collapse as a whole. This fear spread
to global markets and economies. Understanding the gravity of the matter, the
U.S. Congress, at the recommendation of the Secretary of the Treasury and the
Chairman of the Federal Reserve, approved a market stabilization and liquidity
bill to deal with the frozen credit markets. The Federal Government has
continued taking additional measures to supply the needed capital to the
financial markets and has obtained commitments from foreign countries to assist
in this global financial crisis as well. Only time will tell how effective these
measures will be. The Monteagle Funds' asset managers are aware of these issues
and are focused on managing each Fund within their respective styles and
strategies to take advantage of the market opportunities that these market
dynamics create.
Monteagle Funds are committed to providing you with a fund family that you can
be proud to own. We strive to help you achieve your investment goals with our
Fund offerings. If you have any questions about our Funds or their investment
styles, feel free to give me a call. Also, if you have any investment needs we
do not currently provide a solution for, give me your suggestions. For those who
are new to the Fund Family, thank you for becoming part of the Monteagle Funds
Family. If you are a long time investor in the Fund Family, thank you for
allowing us to continue serving your investment needs.
Sincerely,
Carl C. Peterson
President
4
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MONTEAGLE FIXED INCOME FUND
A DISCUSSION OF FUND PERFORMANCE (UNAUDITED)
================================================================================
HOW DID THE FUND PERFORM?
For the year ended August 31, 2008, the Monteagle Fixed Income Fund (the "Fund")
had a total return of 4.94%. For the quarter ended August 31, 2008, the Fund had
a total return of 0.97%; and for the six months ended August 31, 2008, the Fund
had a total return of -0.24%. The Fund's benchmark index (the Lehman Brothers
Intermediate U.S. Government/Credit Bond Index) had relative returns of 6.05%,
0.92%, and -0.65% for the 12 months, three months and six months, respectively.
For the full year, the Fund underperformed the Intermediate Index, but has
outperformed over the last three and six month periods.
WHAT IS THE FUND'S INVESTMENT APPROACH?
The investment objective of the Fund is total return. The Fund seeks to achieve
its objective of total return through price appreciation, and interest income on
the bonds and other securities held.
The Fund invests in investment grade intermediate term fixed income securities
and maintains an average maturity of bonds and notes (on a dollar weighted
basis) generally between 3 and 8 years. Securities purchased for the Fund are
high quality; specifically, rated at least Aa3 or higher by Moody's Investors
Service, Inc. or AA- or higher by Standard and Poor's Ratings Group for
municipal bonds and A3 or higher by Moody's Investors Service, Inc. or A- or
higher by Standard and Poor's Ratings Group for corporate bonds. Under normal
circumstances, the Fund will invest at least 80% of its net assets in fixed
income securities, including U.S. government securities, securities issued by
agencies of the U.S. government, mortgaged-backed (and similar securities),
taxable municipal bonds and corporate debt securities but no more than 70% in
any one category.
The Fund's portfolio is actively managed and based on an assessment of market
conditions; the average maturity of the portfolio may be lengthened or shortened
in an effort to maximize total return. Furthermore, the Fund's portfolio
holdings may vary across market sectors in order to maximize total return within
the scope of permitted investments defined by the Fund's prospectus. The Fund
may achieve capital appreciation by owning bonds of longer duration (maturity)
when interest rates are declining, and by owning bonds of shorter duration
(maturity) when interest rates are rising, to protect against loss of principal.
For this purpose, the Fund uses a proprietary "Bond Market Watch" model to
evaluate macroeconomic indicators and, based on this evaluation, attempts to
anticipate interest rate changes.
In addition, the Fund may achieve capital (price) appreciation if the credit
quality of corporate and municipal bonds improves, making the associated
scheduled interest payments more certain, thereby creating greater demand for
such bonds. The Fund may also achieve increased interest income by purchasing
bonds that have associated call options that are exercisable by the issuer of
these securities. In exchange for issuing securities that give the issuer the
right to refund the par value prior to the stated maturity, the issuer must
compensate potential buyers of these securities with higher interest payments.
Based on management's assessment of the value of the associated option inherent
with these securities, the Fund may overweight its holdings of these securities,
namely callable U.S. government agency bonds or mortgage-backed securities.
These securities may be less sensitive to moderate increases or decreases in the
general level of interest rates. Therefore, the associated capital appreciation
or depreciation of these securities may also be limited, helping to preserve
capital.
5
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MONTEAGLE FIXED INCOME FUND
A DISCUSSION OF FUND PERFORMANCE (UNAUDITED) (CONTINUED)
================================================================================
WHAT INFLUENCED THE FUND'S PERFORMANCE?
During the 12 months ended August 31, 2008, the Fund improved on the 4.68%
return realized the previous year. Over the past year the major factors
contributing to the Fund's performance were:
o Easing of monetary policy from 5.25% on September 1, 2007 to 2.00%
as of August 31, 2008 (significant decreases in Fed Funds rate by
the Federal Reserve Bank)
o Increasing inflation over the year with CPI increasing approximately
5% since August, 2007 and core inflation (taking out food and
energy) increasing approximately 2.5% during that same period
o Slowing economic growth primarily due to rising energy prices and
the continued negative effects of housing and housing related
industries (including financial institutions)
o The deterioration of global financial markets which caused concern
about liquidity, credit risk, and a general lack of confidence in
the capital markets
The Federal Reserve began easing monetary policy in response to the lack of
liquidity associated with the sub-prime and CDO Mortgage related problems. On
September 18, 2008, the FOMC (Federal Open Market Committee) lowered the
overnight Federal Funds target rate by 50 basis points (0.5%) to 4.75%, and
again by 25 basis points (0.25%) on October 31.
With expectations for a quick economic rebound dwindling, it was clear that the
capital markets were re-evaluating the risk premiums they required under the
changing economic conditions. This was the start of a cyclical "de-leveraging"
(debt reduction) process that was taking place in the banking sector.
The Fund's performance in the 1st quarter of the fiscal year was very strong on
the continued news of weakness in the economy and the uncertainty surrounding
the sub-prime mortgage market. Performance relative to the benchmark index was
negatively impacted by being underweighted U.S. Treasury securities, which was
the top performing sector for the quarter. At the same time, the Fund's
performance was helped by its overweighting of U.S. Government Agencies and
underweighting of corporate bonds, especially those of financial institutions.
During the second fiscal quarter, the FOMC lowered the Federal Funds rate by a
total of 1.50% in three separate policy interventions to address the
continuation of the weakening economy. Second quarter performance for the Fund
continued to be strong, following on the back of a very good first quarter.
During the quarter we increased our allocation of corporate bonds by 3% from 28%
to 31%, while decreasing Government bond allocation to 48% from 50%. These
allocation changes had a relatively slight negative effect on overall
performance versus the benchmark.
By the beginning of March, the Federal Reserve had already lowered rates 5
times; however, market deterioration and economic weakness compelled them to
continue to do so. They lowered the Fed Funds rate by 75 basis points on March
18th and by 25 basis points on April 30th. By the end of April, the Fed Funds
rate was down to 2.00%. Increases in commodity prices raised inflation
expectations for our economy. We appeared to be facing inflation, coupled with a
stagnant
6
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MONTEAGLE FIXED INCOME FUND
A DISCUSSION OF FUND PERFORMANCE (UNAUDITED) (CONTINUED)
================================================================================
economy, better known as "stagflation." After two strong quarters, 3rd quarter
performance was comparatively weak. However the Fund's portfolio returns for the
3rd quarter outperformed those of the benchmark by 0.35%.
The final quarter of the fiscal year can only be characterized as one of
volatility for both stocks and bonds. However, after a weak 3rd quarter, the 4th
quarter rebounded with positive performance. This quarter's good relative
performance was due to a number of factors including the Fund's underweighting
of the Financials sector, prudent purchases of mortgage-backed securities,
tactical Treasury trades, a consistently high credit quality, and an overall
increase in duration.
WHAT IS THE FUND'S STRATEGY?
The Fund will continue to invest in high quality intermediate term fixed income
securities generally between 3 and 8 years in maturity. The Fund will continue
to monitor economic conditions through the use of a proprietary model in an
attempt to anticipate interest rate changes and lengthen or shorten the duration
of the Fund's portfolio of securities to maximize total return while attempting
to reduce risk. The Fund will also actively manage portfolio holdings across
market sectors in order to maximize total return within the scope of permitted
investments defined by the Fund's prospectus. While we have taken prudent steps
to diversify the Fund's assets by limiting exposure to the credit risk
associated with any one specific issuer or market sector, those risks cannot be
completely eliminated without affecting long-term Fund performance. We are aware
of the systemic risks that are present in our economy today and are hopeful that
the appropriate government policies will be taken to avoid further economic
deterioration.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RESULTS AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER
THAN THE PERFORMANCE DATA QUOTED. PERFORMANCE DATA CURRENT TO THE MOST RECENT
MONTH-END, ARE AVAILABLE BY CALLING 1-888-263-5593.
An investor should consider the investment objectives, risks, charges and
expenses of the Fund carefully before investing. The Fund's prospectus contains
this and other important information. To obtain a copy of the Fund's prospectus
please call 1-888-263-5593 and a copy will be sent to you free of charge. Please
read the prospectus carefully before you invest. The Fund is distributed by
Ultimus Fund Distributors, LLC.
The Discussion of Fund Performance seeks to describe some of the Sub-Adviser's
current opinions and views of the financial markets. Although the Sub-Adviser
believes it has a reasonable basis for any opinions or views expressed, actual
results may differ, sometimes significantly so, from those expected or
expressed.
7
================================================================================
MONTEAGLE FIXED INCOME FUND
PERFORMANCE
AUGUST 31, 2008 (UNAUDITED)
================================================================================
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT
IN MONTEAGLE FIXED INCOME FUND AND THE LEHMAN
BROTHERS INTERMEDIATE U.S. GOVERNMENT/CREDIT INDEX
[LINE GRAPH OMITTED]
LEHMAN BROTHERS
MONTEAGLE FIXED INTERMEDIATE U.S.
INCOME FUND GOVERNMENT/CREDIT INDEX
------------------ -----------------------
DATE VALUE DATE VALUE
---- ------- ---- -------
12/20/99 $10,000 12/20/99 $10,000
02/29/00 10,004 02/29/00 10,040
08/31/00 10,464 08/31/00 10,517
02/28/01 11,425 02/28/01 11,292
08/31/01 11,852 08/31/01 11,809
02/28/02 12,207 02/28/02 12,150
08/31/02 12,800 08/31/02 12,724
02/28/03 13,251 02/28/03 13,356
08/31/03 13,192 08/31/03 13,392
02/29/04 13,661 02/29/04 13,970
08/31/04 13,654 08/31/04 14,070
02/28/05 13,633 02/28/05 14,106
08/31/05 13,889 08/31/05 14,429
02/28/06 13,793 02/28/06 14,388
08/31/06 13,999 08/31/06 14,698
02/28/07 14,369 02/28/07 15,179
08/31/07 14,654 08/31/07 15,512
02/29/08 15,415 02/29/08 16,557
08/31/08 15,378 08/31/08 16,450
Past performance is not predictive of future performance.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (a)
(for periods ended August 31, 2008)
Since
1 Year 5 Years Inception(b)
------ ------- ------------
Monteagle Fixed Income Fund 4.94% 3.11% 5.07%
Lehman Brothers Intermediate
U.S. Government/Credit Bond Index 6.05% 4.20% 5.89%
- --------------------------------------------------------------------------------
(a) The returns shown do not reflect the deduction of taxes a shareholder
would pay on Fund distributions or the redemption of Fund shares.
(b) Represents the period from the commencement of operations (December 20,
1999) through August 31, 2008.
8
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MONTEAGLE QUALITY GROWTH FUND
A DISCUSSION OF FUND PERFORMANCE (UNAUDITED)
================================================================================
HOW DID THE FUND PERFORM?
For the twelve months ended August 31, 2008, Monteagle Quality Growth Fund (the
"Fund") reported a total return of -4.30 percent. The S&P 500 Index and the
Russell 1000 Growth Index, the Fund's two benchmarks, had total returns of
- -11.14 percent and -6.77 percent, respectively, for the same period. The Fund's
net asset value as of August 31, 2008 was $8.46 versus $8.84 as of August 31,
2007.
WHAT IS THE FUND'S INVESTMENT APPROACH?
The Fund utilizes a growth style, investing primarily in domestic, high quality
companies believed to have above-average sustainable and/or accelerating growth
with an ability to exceed earnings expectations over time. The underlying belief
is that high quality companies outperform over time with less risk. Various
quality rankings and other metrics which demonstrate quality, including earnings
consistency, are evaluated carefully before a stock is added to the portfolio.
The Fund employs a proprietary screening process and bottom-up work to construct
portfolios. However, portfolio constraints are established to ensure sufficient
diversification by sector as well as by market capitalization. The underlying
belief is that diversification provides for greater control of risk in the
portfolio, while allowing freedom in individual stock selection. The screening
process is designed to identify stocks with rising expectations, as the Fund
looks to invest in securities whose growth potential is generally underestimated
by the market. Holdings generally have a market capitalization of at least $2
billion, with about 65% to 75% of the portfolio in stocks of over $18 billion.
Compared to the S&P 500 Index, the portfolio will typically have a lower
dividend yield, a higher price/earnings ratio and a higher expected earnings
growth rate.
WHAT INFLUENCED THE FUND'S PERFORMANCE?
Over the course of the twelve months ended August 31, 2008, equities have been
greatly impacted by the negative effects of a meltdown in the credit markets
that began in the summer of 2007 and has only worsened since that time. Problems
that first emerged in the subprime mortgage space have since spread across the
full spectrum of the credit markets, resulting in ever-increasing asset
writedowns at financial firms in the U.S. and around the world. Although the Fed
lowered rates several times in late 2007 and early 2008, this was not enough to
alleviate the financial distress. Though the effects of the distressed credit
market were felt first in consumer and financial sectors, companies across all
sectors came to feel the impact in terms of declining operating outlooks.
Finally, despite the fact that the domestic economy has yet to officially enter
into recession, economic readings related to employment and manufacturing trends
have been decidedly disappointing over the past year.
Although the Fund definitely felt the impact of the difficult economic
environment and continued deterioration of the credit markets over the fiscal
year ended August 31, 2008, performance on a relative basis was strong relative
to the benchmarks. Two dynamics resulting from the stressed market environment
played favorably to the strengths of the Fund. First, with the lack of easy
credit availability, private equity firms have been virtually non-existent on
the acquisition front. As a result, investors shifted their focus away from
identifying the next potential take-out target and
9
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MONTEAGLE QUALITY GROWTH FUND
A DISCUSSION OF FUND PERFORMANCE (UNAUDITED) (CONTINUED)
================================================================================
back towards companies exhibiting strong fundamentals, such as sustainable
earnings growth and an ability to beat analysts' expectations. As these are just
the type of companies that populate the Fund, this dynamic has and should
continue to play out favorably for the Fund going forward.
The second favorable dynamic had to do with a shift in market leadership back
toward higher quality securities during this time of economic deceleration and
heightened market volatility. The stocks of large, high quality companies tend
to perform better than the broader market during periods of greater volatility
such as we have seen recently. We expect this greater volatility to remain in
place as we move into 2009 and believe it will continue to play favorably for
the high quality companies that are held by the Fund.
During the first six months of the fiscal year just ended, the stock market was
under constant downside pressure due to the backdrop of disappointing economic
readings and financial sector woes that culminated in the collapse of Bear
Stearns in late February. By the end of February 2008, the stock market had
declined for four consecutive months. The best performing sectors of the market
were the Materials, Energy, and Consumer Staples sectors while the worst
performance was delivered by stocks within the Consumer Discretionary,
Financials, and Information Technology sectors.
For this six month period ended February 29, 2008, the Fund's portfolio
outperformed when compared to both the Russell 1000 Growth Index and the S&P 500
Index. Strong earnings delivery relative to expectations from holdings across
the portfolio was the key factor behind the outperformance. The portfolio
experienced strong relative returns from holdings within Energy, Materials,
Consumer Discretionary, Health Care, and Information Technology. Stock holdings
within the Financials and Industrials sectors underperformed their respective
sectors in the benchmark. Overall, stock selection was the driving factor during
this period as sector allocation had virtually zero impact on relative
performance.
During this period, stocks that significantly contributed positively to returns
were Monsanto (agricultural technology, up 66%), Apache (oil & natural gas
exploration, up 49%), and Peabody Energy (coal mining & production, up 43%).
Significant negative contributors included J. C. Penny (department stores, down
42%), NII Holdings (wireless communication services, down 42%), and Franklin
Resources (asset management, down 28%).
The second half of the fiscal year began with a rally, thanks in no small part
to the aggressive actions taken by the Federal Reserve to lower short-term
interest rates and open up other avenues of liquidity to commercial and
investment banks alike. However, following a meaningful run-up in energy and
other commodity prices, inflationary concerns joined financial sector woes and
moderating corporate earnings expectations as factors that took the wind out of
the recovery's sails. Despite energy prices retreating late in the fiscal year,
by the end of August the market had given back its gain and ended in slightly
negative territory. For the last six months of the year, the best performing
sectors of the market were the Telecommunications, Information Technology, and
Consumer Staples. The worst performing sectors during this period were the
Financials, Utilities, and Industrials sectors.
10
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MONTEAGLE QUALITY GROWTH FUND
A DISCUSSION OF FUND PERFORMANCE (UNAUDITED) (CONTINUED)
================================================================================
For the six month period ended August 31, 2008, the Fund's portfolio once again
outperformed both the Russell 1000 Growth Index and the S&P 500 Index. Though
the continued fears related to the direction of the economy were indeed
beneficial to the higher quality companies held in the portfolio, the primary
driver of strong relative performance during this period was the strong earnings
results delivered by portfolio holdings relative to investors' expectations.
Relative performance was particularly strong in Energy, Information Technology,
and Health Care while holdings within Financials and Consumer Staples lagged
during the period.
During this period, stocks that significantly contributed to returns were
Western Union (money transfer, up 33%), Amphenol (electronic components, up
29%), and SPX (power infrastructure and flow products, up 17%). Significant
negative contributors included Merrill Lynch (investment banking, down 41%),
Viacom (cable programming/films, down 25%), and Prologis Trust (industrial
distribution centers, down 19%).
WHAT IS THE FUND'S STRATEGY?
The Fund will continue to focus on maintaining a diversified portfolio of high
quality companies delivering sustainable above-market earnings growth as well as
companies that the Fund's sub-adviser believes are poised to experience
meaningful acceleration in earnings growth relative to expectations. The
investment manager believes the companies that can exceed expectations in the
form of positive earnings surprises will be well rewarded in the current
investment environment.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RESULTS AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER
THAN THE PERFORMANCE DATA QUOTED. PERFORMANCE DATA CURRENT TO THE MOST RECENT
MONTH-END, ARE AVAILABLE BY CALLING 1-888-263-5593.
An investor should consider the investment objectives, risks, charges and
expenses of the Fund carefully before investing. The Fund's prospectus contains
this and other important information. To obtain a copy of the Fund's prospectus
please call 1-888-263-5593 and a copy will be sent to you free of charge. Please
read the prospectus carefully before you invest. The Fund is distributed by
Ultimus Fund Distributors, LLC.
The Discussion of Fund Performance seeks to describe some of the Sub-Adviser's
current opinions and views of the financial markets. Although the Sub-Adviser
believes it has a reasonable basis for any opinions or views expressed, actual
results may differ, sometimes significantly so, from those expected or
expressed.
11
================================================================================
MONTEAGLE QUALITY GROWTH FUND
PERFORMANCE
AUGUST 31, 2008 (UNAUDITED)
================================================================================
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT
IN MONTEAGLE QUALITY GROWTH FUND, THE S&P 500 INDEX
AND THE RUSSELL 1000 GROWTH INDEX
[LINE GRAPH OMITTED]
RUSSELL
MONTEAGLE QUALITY S&P 1000 GROWTH
GROWTH FUND 500 INDEX INDEX
- --------------------- --------------------- ----------------------
DATE VALUE DATE VALUE DATE VALUE
- ---- ------- ---- ------- ---- -------
08/31/98 $10,000 08/31/98 $10,000 08/31/98 $10,000
02/28/99 13,566 02/28/99 13,029 02/28/99 13,789
08/31/99 14,322 08/31/99 13,982 08/31/99 14,833
02/29/00 16,734 02/29/00 14,557 02/29/00 18,166
08/31/00 18,228 08/31/00 16,264 08/31/00 19,794
02/28/01 14,190 02/28/01 13,363 02/28/01 12,512
08/31/01 12,868 08/31/01 12,298 08/31/01 10,823
02/28/02 12,919 02/28/02 12,092 02/28/02 10,562
08/31/02 10,724 08/31/02 10,085 08/31/02 8,424
02/28/03 10,014 02/28/03 9,349 02/28/03 7,857
08/31/03 11,744 08/31/03 11,301 08/31/03 9,609
02/29/04 12,605 02/29/04 12,951 02/29/04 10,779
08/31/04 11,744 08/31/04 12,596 08/31/04 10,124
02/28/05 12,730 02/28/05 13,854 02/28/05 10,900
08/31/05 13,006 08/31/05 14,178 08/31/05 11,353
02/28/06 13,599 02/28/06 15,018 02/28/06 11,932
08/31/06 13,125 08/31/06 15,437 08/31/06 11,770
02/28/07 13,852 02/28/07 16,816 02/28/07 12,893
08/31/07 14,970 08/31/07 17,773 08/31/07 13,854
02/29/08 14,208 02/29/08 16,210 02/29/08 12,944
08/31/08 14,327 08/31/08 15,794 08/31/08 12,916
Past performance is not predictive of future performance.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (a)
(for periods ended August 31, 2008)
1 Year 5 Years 10 Years
------ ------- --------
Monteagle Quality Growth Fund -4.30% 4.06% 3.66%
S&P 500 Index -11.14% 6.92% 4.68%
Russell 1000 Growth Index -6.77% 6.09% 2.59%
- --------------------------------------------------------------------------------
(a) The returns shown do not reflect the deduction of taxes a shareholder
would pay on Fund distributions or the redemption of Fund shares.
12
================================================================================
MONTEAGLE LARGE CAP GROWTH FUND
A DISCUSSION OF FUND PERFORMANCE (UNAUDITED)
================================================================================
HOW DID THE FUND PERFORM?
For the year ended August 31, 2008, the Monteagle Large Cap Growth Fund (the
"Fund") reported a total return of negative 12.78 percent. The S&P 500 Index
lost 11.14 percent, and the Russell 1000 Growth Index was down 6.77 percent
during the same time frame. During that time, the Fund's net asset value fell
from $7.20 to $6.28 per share.
WHAT IS THE FUND'S INVESTMENT APPROACH?
The Fund's investment philosophy is that high quality, growing companies
outperform broad market indices over full market cycles. Companies are
identified using a strict application of a combined quantitative and qualitative
strategy. The quantitative strategy screens the universe of larger
capitalization companies (over $5 billion market capitalization) for stable,
above market earnings growth, above market return on equity and attractive
relative valuation. Companies meeting the quantitative criteria are then further
analyzed for the characteristics of high quality companies, including
superiority in management, products, distribution, access to markets and
business plan implementation. The Fund holds between 25 and 35 securities and
holdings are diversified to include no more than 2 times the S&P 500's weighting
for any particular sector. Holdings are generally equally weighted, and are
trimmed back when a position size exceeds 6% of the total portfolio.
WHAT INFLUENCED THE FUND'S PERFORMANCE?
While the year that ended August 31, 2007 was a good year for high quality
growth stocks, the year just ended on August 31, 2008 has been anything but. The
Fund ended the last 4 months of 2007 (8/31/07-12/31/07) on a positive note - up
about 5% to a flat return for the S&P 500 Index. However, the start of calendar
year 2008 brought a sharp drop in stock values, especially to the high quality
growth stocks in the Fund. In January alone, the Fund lost 12% as some of the
Fund's better performing names of 2007, like Apple, Inc., were hit very hard.
For the first six months of calendar year 2008, only two sectors - Energy and
Materials -had positive returns. During the same period, the S&P 500 suffered a
28.2% earnings decline, while the Index lost 12% in price. These dismal numbers
don't quite tell the whole story. Of the ten S&P sectors, only two showed
substantial earnings decline - Financials and Consumer Discretionary. Seven of
the other eight sectors showed year-over-year earnings growth, and in some cases
that growth was substantial. The Technology sector, for example, showed an
earnings growth rate of 20%, yet the stocks in that sector declined over 13% by
the midpoint of 2008.
While the Fund modestly underperformed the S&P 500 for the year ended August 31,
2008, the Fund's larger underperformance as compared to the Russell 1000 Growth
Index was largely a result of the Fund's underweight position in Energy, and the
Fund's overweight position in Financials, relative to that index. For much of
the year the primary market story was the sharp rise in commodity prices,
especially the price of oil. The Russell 1000 Growth Index, somewhat
counterintuitively, has a large weight in Energy and Materials stocks (about 20%
at mid-year), and a small weight in Financials stocks. As oil prices
skyrocketed, and the breadth of the financial meltdown started to become
apparent, the Russell 1000 Growth Index was a beneficiary. Since mid-year the
price of oil has declined precipitously, and the Fund has performed well against
the Russell 1000 Growth Index as oil and commodity related stocks have pulled
back sharply.
13
================================================================================
MONTEAGLE LARGE CAP GROWTH FUND
A DISCUSSION OF FUND PERFORMANCE (UNAUDITED) (CONTINUED)
================================================================================
WHAT IS THE FUND'S STRATEGY?
The Fund's primary strategy has always been to focus on quality companies with
the best long term growth prospects. While this strategy was successful in 2004,
2005 and 2007, the Fund underperformed in 2006, and has underperformed
year-to-date 2008.
It has been a frustrating year for the high quality companies owned by the Fund.
On an operational basis they continue to perform exceedingly well. As of
September 15th, the companies owned by the Fund have seen an increase in
earnings of 30% in the past year, an outstanding number by any measure, but
especially strong considering the S&P's overall earnings fell 24% over the same
period (mostly on writedowns in financial companies). Going forward, the
companies owned by the Fund are expected to grow their earnings more than twice
that of the general market. The Fund's portfolio, with names like McDonald's,
Disney, Microsoft, Procter & Gamble and Wal-Mart, includes a "who's-who" of
American industry and business.
This has been a year (so far) unlike any other in market history. Financial
titans like Lehman Brothers, who survived the Great Depression, are no more.
Fannie Mae and Freddie Mac have been taken over outright by the Government,
while AIG has been forced to take a loan on highly unfavorable terms to survive.
Washington Mutual has failed, and Wachovia's assets have been sold. Merrill
Lynch has been acquired by Bank of America, and the two remaining "investment"
banks - Morgan Stanley and Goldman Sachs - have reorganized as traditional
banks. The financial landscape has forever changed.
One of our main priorities this year had been avoiding the highly troubled
names, which we have done thus far mostly successfully in the Fund. We will
continue our conservative focus on attractively valued, growing companies which,
given time and better market psychology, should be rewarded.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RESULTS AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER
THAN THE PERFORMANCE DATA QUOTED. PERFORMANCE DATA CURRENT TO THE MOST RECENT
MONTH-END, ARE AVAILABLE BY CALLING 1-888-263-5593.
An investor should consider the investment objectives, risks, charges and
expenses of the Fund carefully before investing. The Fund's prospectus contains
this and other important information. To obtain a copy of the Fund's prospectus
please call 1-888-263-5593 and a copy will be sent to you free of charge. Please
read the prospectus carefully before you invest. The Fund is distributed by
Ultimus Fund Distributors, LLC.
The Discussion of Fund Performance seeks to describe some of the Sub-Adviser's
current opinions and views of the financial markets. Although the Sub-Adviser
believes it has a reasonable basis for any opinions or views expressed, actual
results may differ, sometimes significantly so, from those expected or
expressed.
14
================================================================================
MONTEAGLE LARGE CAP GROWTH FUND
PERFORMANCE
AUGUST 31, 2008 (UNAUDITED)
================================================================================
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT
IN MONTEAGLE LARGE CAP GROWTH FUND AND THE S&P 500 INDEX
[LINE GRAPH OMITTED]
MONTEAGLE
LARGE CAP S&P
GROWTH FUND 500 INDEX
----------- ---------
DATE VALUE DATE VALUE
---- ------- ---- -------
01/18/00 $10,000 01/18/00 $10,000
02/29/00 9,430 02/29/00 9,404
08/31/00 9,920 08/31/00 10,507
02/28/01 7,562 02/28/01 8,633
08/31/01 6,702 08/31/01 7,944
02/28/02 6,042 02/28/02 7,812
08/31/02 4,622 08/31/02 6,515
02/28/03 4,221 02/28/03 6,040
08/31/03 4,992 08/31/03 7,301
2/29/2004 5,615 2/29/2004 8,366
8/31/2004 5,435 8/31/2004 8,137
2/28/2005 5,876 2/28/2005 8,950
8/31/2005 6,276 8/31/2005 9,159
2/28/2006 6,897 2/28/2006 9,702
8/31/2006 6,026 8/31/2006 9,973
2/28/2007 6,596 2/28/2007 10,863
8/31/2007 7,207 8/31/2007 11,482
2/29/2008 6,406 2/29/2008 10,472
8/31/2008 6,286 8/31/2008 10,203
Past performance is not predictive of future performance.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (a)
(for periods ended August 31, 2008)
Since
1 Year 5 Years Inception(b)
------ ------- ------------
Monteagle Large Cap Growth Fund -12.78% 4.72% -5.24%
S&P 500 Index -11.14% 6.92% 0.23%
- --------------------------------------------------------------------------------
(a) The returns shown do not reflect the deduction of taxes a shareholder
would pay on Fund distributions or the redemption of Fund shares.
(b) Represents the period from the commencement of operations (January 18,
2000) through August 31, 2008.
15
================================================================================
MONTEAGLE SELECT VALUE FUND
A DISCUSSION OF FUND PERFORMANCE (UNAUDITED)
================================================================================
HOW DID THE FUND PERFORM?
For the year ended August 31, 2008, Monteagle Select Value Fund (the "Fund") had
a total return of -14.01%. The S&P 500 Index (the "Index") had a total return of
- -11.14% for the same period. The Fund's net asset value per share as of August
31, 2008 is $11.63 versus $15.67 at August 31, 2007.
WHAT IS THE FUND'S INVESTMENT APPROACH?
The Fund's investment goal is long-term capital appreciation. The Fund uses a
"value investing" style by investing under normal circumstances at least 80
percent of its assets in common stock of domestic companies believed to be
under-priced relative to comparable securities determined by price-to-earnings
ratios, cash flows or other measures. The Fund's Adviser predominately utilizes
a reversion-to-the-mean strategy on stock selection in order to achieve its
results rather than trying to time market fluctuations. The Adviser limits the
pool of stocks to consider for purchase to only those equities in the S&P 500
Index. In selecting stocks, the Fund's Adviser establishes valuation parameters
by using relative ratios or target prices to evaluate companies on several
levels. Additionally, the Adviser will have the Fund hold between 40 and 60
equities and diversify its holdings across numerous industries, generally
limiting issues in any one industry to five securities or less. The Fund seeks
to maintain a minimum average weighted market capitalization of $5 billion.
Value stocks are broadly defined as equities which have a price-to-earnings
ratio and a price-to-book ratio less than the relative market average with
dividends tending to be higher than the relative market average. Also, value
stocks tend to have a beta (a measure of the stocks price volatility relative to
the overall market, i.e. the S&P 500) less than 1.0.
WHAT INFLUENCED THE FUND'S PERFORMANCE?
During the twelve months ended August 31, 2008, the Fund's performance was
affected by various world and domestic concerns including high oil and commodity
prices, Federal Funds rate activity, a dramatic decline in the domestic housing
market and the realization of a sub-prime mortgage market breakdown as well as a
growing concern of a complete failure of the financial markets and the
increasing signs of a possible recession for the U.S. and global economies.
During the period, the equity markets reached new all-time highs for the Dow
Jones Industrial Average (14,164.53 on October 9, 2007) and the S&P 500 (1565.15
on October 9, 2007) indices only to be followed by significant declines in the
indexes precipitated by sharp sell-offs of worldwide and domestic equity
markets. The realization of a sub-prime mortgage crisis and the growing signs of
a recession moved the Federal Open Markets Committee of the Federal Reserve to
begin lowering the Fed Funds rate to protect against a slowing economy and to
generate liquidity for financial institutions. These factors contributed to a
market environment that proved difficult for the Fund given its focus of a
"value style, reversion-to-the-mean" strategy which typically thrives in a
growing economic environment. The Fund compares its performance to the S&P 500
Index. As of August 31, 2008 all ten economic sectors of the Index had negative
returns ranging from a -3.19% in Consumer Staples to a -21.72% in
Telecommunications Services. The Fund was affected by these declines because the
Fund generally invests in all of the ten economic sectors of the Index.
16
================================================================================
MONTEAGLE SELECT VALUE FUND
A DISCUSSION OF FUND PERFORMANCE (UNAUDITED) (CONTINUED)
================================================================================
For the fiscal quarter ended November 30, 2007, the Fund's return
under-performed the S&P 500 Index's return. The Fund experienced a -2.82% return
versus a 0.98% return for the Index. The Fund continued to be significantly
invested in equities which represented 94.9% of the assets with cash
representing the remaining 5.1% of the assets.
Subprime mortgage issues led to a widespread credit crunch and impacted the
financial industry heavily. As volatility in the market increased, investors
headed for bigger, more globally diversified companies.
During the quarter, the Fund's portfolio performance was positively affected by
its stock picks in the Consumer Staples and Materials sectors and negatively
affected by its stock picks in the Financials, Energy, and Consumer
Discretionary sectors. Stocks contributing positively to the Fund's performance
were Genzyme Corp. (+20.06%), Newmont Mining (+17.58%), and UnitedHealth Group,
Inc. (+9.98%). Stocks contributing negatively to the Fund's performance were CIT
Group (-27.47%), Transocean, Inc. (-25.77%), and Kohl's Corp. (-13.75%).
Positively affecting the Fund were purchases in the quarter to provide
additional exposure within the Consumer Staples and Materials sectors. Also,
disposals that positively affected the Fund included Aetna, Inc. (58.78% gain
from cost) and Paychex, Inc. (11.19% gain from cost). These disposals took
advantage of the recent market movements in the Consumer Discretionary sector
and Paychex, Inc.'s recent significant price appreciation. The Fund continued
its asset allocation across all sectors of the Index. The Fund was overweight in
Information Technology, Health Care, and the Consumer Discretionary sectors as
compared to the Index.
For the quarter ended February 29, 2008, the Fund's return under-performed the
S&P 500 Index's return. The Fund experienced a -10.36% return versus a -9.68%
return for the Index. The Fund continued to be heavily invested in equities
which represented 96.6% of the assets with cash representing the remaining 3.4%
of the assets.
Subprime mortgage issues continued to lead a widespread credit crunch which
impacted the financial industry heavily. In response to the stress on the
economy generated from a collapse in the housing sector, the Federal Reserve
aggressively lowered the Federal Funds rate from 4.5% at the beginning of the
quarter to 3.00% at the end of the quarter. Commodity prices continued to
contribute to the risk of economic growth as per barrel oil prices jumped over
$100 per barrel. As the fear of inflation and possible recession continued, gold
prices increased to over $970 per ounce. The Fund's performance was negatively
impacted by its holdings in the Financials sector during this quarter. The major
indices were expected to remain volatile for the remainder of 2008 as
expectations of continued write-downs of assets in the Financials sector would
take place and the negative pressure on corporate earnings increased. These
challenges presented opportunities to average-into the portfolio holdings of the
Fund under the Fund's investment strategy.
As of the end of the quarter, the portfolio holdings were invested in all
sectors of the Index with the largest allocations in the Information Technology
(15.7%), Financials (14.7%), Health Care (14.1%) and Energy sectors (11.1%). The
Fund's portfolio performance was positively affected by its stock picks in the
Information Technology, Materials and Energy sectors and negatively affected by
its stock picks in the Telecommunications Services, Information Technology and
Financials sectors. Stocks contributing positively to the portfolio's
performance were QLogic
17
================================================================================
MONTEAGLE SELECT VALUE FUND
A DISCUSSION OF FUND PERFORMANCE (UNAUDITED) (CONTINUED)
================================================================================
Corp. (+17.23%), Nucor Corp. (+14.94%) and Rowan Companies, Inc. (+13.87%).
Stocks contributing negatively to the portfolio's performance were Sprint Nextel
(-44.90%), Motorola, Inc. (-37.57%) and Wachovia Corp. (-25.69%). During the
quarter, several of the Fund's holdings were sold and the proceeds were
reinvested in various current positions in order to utilize dollar cost
averaging. Additionally new securities were added to the portfolio holdings in a
effort to re-weight the sector allocations of the overall portfolio. The Fund
continues to be allocated across all sectors of the Index. The Fund was
overweight in Information Technology, Telecommunications Services, Health Care
and the Materials sectors as compared to the Index.
For the quarter ended May 31, 2008, the Fund's return under-performed the S&P
500 Index's return. The Fund experienced a 4.03% return versus a 5.77% return
for the Index. The portfolio continued to be heavily invested in equities which
represented 96.3% of the assets with cash representing the remaining 3.7% of the
assets.
Subprime mortgage issues continued to lead a widespread credit crunch and were
impacting the financial industry heavily. In response to the stress on the
economy generated from a collapse in the housing sector, the Federal Reserve
lowered the Federal Funds rate from 3% at the beginning of the quarter to 2.00%
at the end of the quarter. Commodity prices continued to contribute to the risk
of economic growth as per barrel oil prices jumped over $130 per barrel within
the quarter. As the fear of inflation and possible recession, gold prices
increased to over $1,000 per ounce, falling to less than $900 by the conclusion
of the quarter. Once again, the Fund's performance was negatively impacted by
its holdings in the Financials sector during the quarter. The major indices were
still expected to remain volatile for the remainder of 2008 as expectations of
continued write-downs of assets in the Financials sector would take place and
the negative pressure on corporate earnings increased. These challenges
presented opportunities to average-into the portfolio holdings of the Fund under
the Fund's investment strategy.
As of the end of the quarter, the portfolio holdings were invested in all
sectors of the Index with the largest allocations in the Information Technology
(16.4%), Materials sectors (14.2%), Consumer Discretionary (13.2%) and Energy
(12.4%). The Fund's portfolio performance was positively affected by its stock
picks in the Information Technology, Industrials and Energy sectors and
negatively affected by its stock picks in the Health Care and Financials
sectors. Stocks contributing positively to the portfolio's performance were
Dover Corp. (+30.14%), Halliburton Co. (+26.76%) and Intel Corp. (+15.97%).
Stocks contributing negatively to the portfolio's performance were CIT Group
(-47.37%), UnitedHealth Group, Inc. (-20.06%) and Bank of America Corp.
(-14.42%). During the quarter, several of the portfolio holdings were sold and
the proceeds were reinvested in various current positions to utilize dollar cost
averaging. Additionally, new securities were added to the portfolio holdings in
order to re-weight the sector allocation of the overall portfolio. The Fund
continued to be allocated across all sectors of the Index and was overweight in
Information Technology, Energy, Consumer Discretionary and the Materials sectors
as compared to the Index.
For the quarter ended August 31, 2008, the Fund's return outperformed the S&P
500 Index's return. The Fund experienced a -5.12% return versus a -7.89% return
for the Index. The Fund continued to be heavily invested in equities which
represented 87.8% of the assets with cash representing 1.3% of the assets. As of
the quarter-end, the remaining 10.9% of the assets were
18
================================================================================
MONTEAGLE SELECT VALUE FUND
A DISCUSSION OF FUND PERFORMANCE (UNAUDITED) (CONTINUED)
================================================================================
invested in a short-term fixed-income agency discount note. This was purchased
only days prior to the end of the quarter to act as a temporary hedge against
the deteriorating equity market and to preserve the Fund's cash position outside
of money market accounts.
Many issues still remained within the markets and economy. The financial
industry continued to face sub-prime related issues which lead the on-going
credit crunch and liquidity crisis. Consolidation within the Financials sector
occurred in the quarter as JPMorgan Chase acquired Bear Stearns with third-party
assistance from the Federal Government. Additionally, Countrywide Financial
sought shelter under Bank of America in an attempt to avoid bankruptcy. The
Federal Reserve maintained the Federal Funds rate at 2% throughout the quarter,
where it was expected to remain for the balance of the calendar year.
Commodities exhibited significant volatility through-out the quarter. Oil prices
continued to rise, reaching record highs of $145.29 per barrel, subsequently
falling roughly 20% to end the quarter around $115. Gold prices attempted to
test record levels, reaching a high price of $978.70, then falling approximately
20% before settling out the quarter at $831.20. The Fund's performance was
negatively impacted by its holdings in the Financials and Materials sectors
during this quarter. The major indices were still expected to remain volatile
for the remainder 2008 as expectations of continued write-downs of assets in the
Financials sector would take place and the negative pressure on corporate
earnings increased. These challenges presented opportunities to average-into the
portfolio holdings of the Fund under the Fund's investment strategy.
As of the end of the quarter, the portfolio holdings were invested in all
sectors of the Index except the Utilities sector, with the largest allocations
in the Information Technology (18.4%), Consumer Discretionary (13.8%) and the
Industrials (11.1%) sectors. The Fund's portfolio performance was positively
affected by its stock picks in the Information Technology and Consumer Staples
sectors and negatively affected by its stock picks in the Energy and
Telecommunications Services sectors. Stocks contributing positively to the
portfolio's performance were Jabil Circuit (+32.55%), QLogic Corp. (+18.30%) and
Kohl's Corp. (+9.75%). Stocks contributing negatively to the portfolio's
performance were Key Corp. (-37.59%), Ashland, Inc. (-23.62%) and AT&T Corp.
(-19.82%). During the quarter, several of the portfolio holdings were sold and a
portion of the proceeds were reinvested in various new positions. Additionally,
as mentioned above, a short-term fixed income agency discount note was purchased
to act as a hedge for the Fund and to move cash out of its money market funds.
The Fund is allocated across all sectors of the Index, with the exception of the
Utilities sector and remained overweight in the Information Technology, Consumer
Discretionary and Industrials sectors as compared to the Index.
WHAT IS THE FUND'S STRATEGY?
The Fund will continue to concentrate on equities contained in the S&P 500 Index
which generally consist of large name brand corporations with good fundamentals
and broad product diversification. The Fund's Adviser will continue to be
disciplined in the use of its predominate strategy of reversion-to-the-mean by
applying its "value investing" approach valuation model; thereby, allowing the
market's volatility to identify those securities that become under-valued and
are poised to be the next performers in the market. Sector allocation in the
Fund's portfolio will primarily be determined by which companies are available
for purchase under the reversion-to-
19
================================================================================
MONTEAGLE SELECT VALUE FUND
A DISCUSSION OF FUND PERFORMANCE (UNAUDITED) (CONTINUED)
================================================================================
the-mean selection criteria. It is anticipated that the Fund will hold higher
levels of cash during extended periods of market uncertainty and will
selectively invest the cash into equities identified by the primary investment
strategy as opportunities present themselves.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RESULTS AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER
THAN THE PERFORMANCE DATA QUOTED. PERFORMANCE DATA CURRENT TO THE MOST RECENT
MONTH-END, ARE AVAILABLE BY CALLING 1-888-263-5593.
An investor should consider the investment objectives, risks, charges and
expenses of the Fund carefully before investing. The Fund's prospectus contains
this and other important information. To obtain a copy of the Fund's prospectus
please call 1-888-263-5593 and a copy will be sent to you free of charge. Please
read the prospectus carefully before you invest. The Fund is distributed by
Ultimus Fund Distributors, LLC.
The Discussion of Fund Performance seeks to describe some of the Adviser's
current opinions and views of the financial markets. Although the Adviser
believes it has a reasonable basis for any opinions or views expressed, actual
results may differ, sometimes significantly so, from those expected or
expressed.
20
================================================================================
MONTEAGLE SELECT VALUE FUND
PERFORMANCE
AUGUST 31, 2008 (UNAUDITED)
================================================================================
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT
IN MONTEAGLE SELECT VALUE FUND AND THE S&P 500 INDEX
[LINE GRAPH OMITTED]
MONTEAGLE SELECT S&P
VALUE FUND 500 INDEX
------------------ ------------------
DATE VALUE DATE VALUE
---- ------- ---- -------
08/31/98 $10,000 08/31/98 $10,000
02/28/99 11,473 02/28/99 13,029
08/31/99 12,237 08/31/99 13,982
02/29/00 10,225 02/29/00 14,557
08/31/00 11,291 08/31/00 16,264
02/28/01 13,403 02/28/01 13,363
08/31/01 14,128 08/31/01 12,298
02/28/02 14,660 02/28/02 12,092
08/31/02 13,295 08/31/02 10,085
02/28/03 11,880 02/28/03 9,349
08/31/03 14,906 08/31/03 11,301
02/29/04 17,448 02/29/04 12,951
08/31/04 17,587 08/31/04 12,596
02/28/05 19,354 02/28/05 13,854
08/31/05 19,248 08/31/05 14,178
02/28/06 19,972 02/28/06 15,018
08/31/06 20,645 08/31/06 15,437
02/28/07 22,664 02/28/07 16,816
08/31/07 23,785 08/31/07 17,773
02/29/08 20,721 02/29/08 16,210
08/31/08 20,452 08/31/08 15,794
Past performance is not predictive of future performance.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (a)
(for periods ended August 31, 2008)
1 Year 5 Years 10 Years
------ ------- --------
Monteagle Select Value Fund -14.01% 6.53% 7.42%
S&P 500 Index -11.14% 6.92% 4.68%
- --------------------------------------------------------------------------------
(a) The returns shown do not reflect the deduction of taxes a shareholder
would pay on Fund distributions or the redemption of Fund shares.
21
================================================================================
MONTEAGLE VALUE FUND
A DISCUSSION OF FUND PERFORMANCE (UNAUDITED)
================================================================================
HOW DID THE FUND PERFORM?
For the year ended August 31, 2008, the Monteagle Value Fund (the "Fund")
reported a total return of -5.14 percent. The S&P 500 Index and the Russell 2000
Value Index had returns of - 11.14 percent and -7.52 percent, respectively, for
the same time period. The Fund's net asset value per share as of August 31, 2008
was $16.67 versus $19.44 at August 31, 2007.
WHAT IS THE FUND'S INVESTMENT APPROACH?
The Fund's investment goal is to achieve long term growth of capital through
investing in undervalued companies. The Fund generally determines value based on
price-to-earnings ratios, but also reviews historical price to book value
ratios, dividend yield and balance sheet quality in determining whether
prospective investments are truly undervalued. The Fund's investment manager
also makes industry determinations based on interest rate cycles. The Fund
typically holds 30 to 40 equities. The Fund seeks to maintain a minimum average
market capitalization of $5 billion. The current average market capitalization
of the Fund's portfolio exceeds $37 billion. The current price to earnings ratio
is 8.1 times 2009 earnings and currently yields 1.6 percent. The S&P 500 Index
currently trades at 11.6 times 2009 earnings and yields 2.1%.
WHAT INFLUENCED THE FUND'S PERFORMANCE?
During the year ended August 31, 2008, the Fund achieved its performance though
continued rising energy prices and economic activity within the energy industry.
Rising worldwide energy demand remains the catalyst for the improving revenue
and earnings growth. Recent declines in energy prices have obviously dampened
the returns for the Fund. Deflationary pressures associated with the U.S.
housing industry and weakness in the global economy has also contributed to the
recent weakness in the Fund. Interest rate levels in the U.S. financial markets
continue to point to rising economic activity for the future. Any relief from
the current credit crisis should allow capital to flow back into the global
markets resulting in brighter economic prospects in the future. The Fund remains
committed to companies that have above average cash flow, low debt levels, and
the ability to market products and services on a global basis.
The current market has corrected, responding to a global credit crunch which has
threatened the integrity of the financial system on Wall Street and around the
world. Global equity markets have fallen more than the U.S. market in response
to the lack of liquidity. The U.S. bond market has remained very positive as the
flight to quality has driven prices up. Subsequently, the current $3.3 trillion
in U.S. money market accounts is an all time record. The very favorable Federal
Reserve policy as indicated by extremely high growth in monetary aggregates
should translate into significantly higher stock prices in the not so distant
future.
The Fund continues to be susceptible to seasonal economic patterns. The recent
market weakness since June 30, 2008 follows what has happened in the previous
two years. The passage of the Economic Stimulus Package in the Spring and the
recent Financial Institution Bailout orchestrated by the U.S. Treasury in
conjunction with the Federal Reserve should provide for greater liquidity within
the credit markets. Any recovery in the housing market in the coming months
should be a good contributor to the overall economic activity in the U.S. and
stabilize the financial markets.
22
================================================================================
MONTEAGLE VALUE FUND
A DISCUSSION OF FUND PERFORMANCE (UNAUDITED) (CONTINUED)
================================================================================
The recent strength in the U.S. dollar is the single most deterring factor in
bringing commodity prices down over the past ninety days. Demand for all goods
and services has been affected by the global slowdown for all raw materials.
Consequently, the performance of the Fund has suffered due to the high
allocation to the Energy sector. However, the earnings, cash flow and balance
sheets for the energy companies in the Fund remain very attractive for the
foreseeable future. Other areas in the Fund which continue to maintain high cash
balances include Technology and Telecommunications.
WHAT IS THE FUND'S CURRENT STRATEGY?
The Fund continues to be over-weighted in the Energy sector and fortunately had
no exposure in the Financials sector. The Fund believes the Energy sector
remains the strongest sector in the S&P 500 Index as cash flow generation
remains strong, demand remains tight, and any disruption in supply would tilt an
already tight situation into price levels the world has never experienced. The
Fund currently favors pharmaceuticals, telecommunications and gold positions. At
some point, the Fund plans to invest in the Financials area once the industry
stabilizes from its recent credit problems. The Fund is monitoring the housing
industry but remains cautious at best for this industry as the glut of inventory
on the market remains high.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RESULTS AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER
THAN THE PERFORMANCE DATA QUOTED. PERFORMANCE DATA CURRENT TO THE MOST RECENT
MONTH-END, ARE AVAILABLE BY CALLING 1-888-263-5593.
An investor should consider the investment objectives, risks, charges and
expenses of the Fund carefully before investing. The Fund's prospectus contains
this and other important information. To obtain a copy of the Fund's prospectus
please call 1-888-263-5593 and a copy will be sent to you free of charge. Please
read the prospectus carefully before you invest. The Fund is distributed by
Ultimus Fund Distributors, LLC.
The Discussion of Fund Performance seeks to describe some of the Sub-Adviser's
current opinions and views of the financial markets. Although the Sub-Adviser
believes it has a reasonable basis for any opinions or views expressed, actual
results may differ, sometimes significantly so, from those expected or
expressed.
23
================================================================================
MONTEAGLE VALUE FUND
PERFORMANCE
AUGUST 31, 2008 (UNAUDITED)
================================================================================
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT
IN MONTEAGLE VALUE FUND, THE S&P 500 INDEX
AND THE RUSSELL 2000 VALUE INDEX
[LINE GRAPH OMITTED]
RUSSELL
MONTEAGLE S&P 2000 VALUE
VALUE FUND 500 INDEX INDEX
-------------------- -------------------- --------------------
DATE VALUE DATE VALUE DATE VALUE
---- ------- ---- ------- ---- -------
12/20/99 $10,000 12/20/99 $10,000 12/19/99 $10,000
02/29/00 9,240 02/29/00 9,637 02/29/00 10,501
08/31/00 11,660 08/31/00 10,767 08/31/00 11,978
02/28/01 12,762 02/28/01 8,847 02/28/01 13,213
08/31/01 13,708 08/31/01 8,141 08/31/01 14,139
02/28/02 13,843 02/28/02 8,005 02/28/02 14,967
08/31/02 11,385 08/31/02 6,676 08/31/02 13,347
02/28/03 10,093 02/28/03 6,190 02/28/03 12,213
08/31/03 12,920 08/31/03 7,482 08/31/03 16,508
02/29/04 15,094 02/29/04 8,574 02/29/04 20,026
08/31/04 14,613 08/31/04 8,339 08/31/04 19,725
02/28/05 17,397 02/28/05 9,172 02/28/05 22,758
08/31/05 18,603 08/31/05 9,386 08/31/05 24,186
02/28/06 20,161 02/28/06 9,942 02/28/06 26,314
08/31/06 20,137 08/31/06 10,220 08/31/06 27,262
02/28/07 22,386 02/28/07 11,133 02/28/07 30,089
08/31/07 24,043 08/31/07 11,767 08/31/07 29,072
02/29/08 23,196 02/29/08 10,732 02/29/08 24,935
08/31/08 22,807 08/31/08 10,456 08/31/08 26,885
Past performance is not predictive of future performance.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (a)
(for periods ended August 31, 2008)
Since
1 Year 5 Years Inception(b)
------ ------- ------------
Monteagle Value Fund -5.14% 12.04% 9.94%
S&P 500 Index -11.14% 6.92% 0.51%
Russell 2000 Value Index -7.52% 10.25% 12.03%
- --------------------------------------------------------------------------------
(a) The returns shown do not reflect the deduction of taxes a shareholder
would pay on Fund distributions or the redemption of Fund shares.
(b) Represents the period from the commencement of operations (December 19,
1999) through August 31, 2008.
24
================================================================================
MONTEAGLE INFORMED INVESTOR GROWTH FUND
A DISCUSSION OF FUND PERFORMANCE (UNAUDITED)
================================================================================
HOW DID THE FUND PERFORM?
The inception date for the Monteagle Informed Investors Growth Fund (the "Fund")
was April 3, 2008.
Performance during this initial five-month period (through August 31, 2008) was
- -11.80%, versus -5.50% for the S&P 500 Index.
WHAT IS THE FUND'S INVESTMENT APPROACH
The Fund's primary investment approach is best characterized as equity-based in
which senior corporate management, or large outside investors are significant
common stock owners or buyers, and/or, where the company itself is repurchasing
its own shares on the open market. The Fund's goal is to invest in these common
stocks with demonstrated informed investor interest and ownership, as well as,
solid earnings fundamentals.
WHAT INFLUENCED THE FUND'S PERFORMANCE?
The Fund's performance was influenced, initially, by lagging start-up funding
and, subsequently, by historically turbulent market conditions with a sharply
lower trend bias.
In an effort to keep the turbulence of the market at bay, the Fund invested in
ETFs for defensive purposes. These exchange traded funds enhanced and stabilized
the Fund's performance. Additionally, the size of the Fund's cash balance was a
dominant factor effecting performance. The unusually high percentage level of
cash held in the Fund reflected not a market timing decision, but rather, an
inability to identify stocks that qualified under the Fund's informed investor
strategy and which - most importantly - also possessed a sustainable potential
for strong future earnings growth rate.
WHAT IS THE FUND'S STRATEGY?
The Fund's investment strategy begins with a careful detailed identification of
informed investor ownership or buying interest. No stock is considered for
research analysis unless it first meets this inviolable first-screen
requirement. Stocks that do qualify are then analyzed for the quality and
magnitude of past earnings growth, and more importantly, for the projected
future stability of that past growth rate. Finally, the Fund's strategy is to
minimize losses within the broader frame work of this basic philosophy.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RESULTS AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER
THAN THE PERFORMANCE DATA QUOTED. PERFORMANCE DATA CURRENT TO THE MOST RECENT
MONTH-END, ARE AVAILABLE BY CALLING 1-888-263-5593.
An investor should consider the investment objectives, risks, charges and
expenses of the Fund carefully before investing. The Fund's prospectus contains
this and other important information. To obtain a copy of the Fund's prospectus
please call 1-888-263-5593 and a copy will be sent to you free of charge. Please
read the prospectus carefully before you invest. The Fund is distributed by
Ultimus Fund Distributors, LLC.
The Discussion of Fund Performance seeks to describe some of the Sub-Adviser's
current opinions and views of the financial markets. Although the Sub-Adviser
believes it has a reasonable basis for any opinions or views expressed, actual
results may differ, sometimes significantly so, from those expected or
expressed.
25
================================================================================
MONTEAGLE INFORMED INVESTOR GROWTH FUND
PERFORMANCE
AUGUST 31, 2008 (UNAUDITED)
================================================================================
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT
IN MONTEAGLE INFORMED INVESTOR GROWTH FUND AND THE S&P 500 INDEX
[LINE GRAPH OMITTED]
MONTEAGLE
INFORMED INVESTOR S&P
GROWTH FUND 500 INDEX
-------------------- --------------------
DATE VALUE DATE VALUE
---- ------- ---- -------
04/03/08 $10,000 04/03/08 $10,000
04/30/08 10,090 04/30/08 10,128
05/31/08 10,250 05/31/08 10,259
06/30/08 10,510 06/30/08 9,394
07/31/08 9,490 07/31/08 9,315
08/31/08 8,820 08/31/08 9,450
Past performance is not predictive of future performance.
- --------------------------------------------------------------------------------
TOTAL RETURN (a)
(for period ended August 31, 2008)
Since
Inception(b)
------------
Monteagle Informed Investor Growth Fund -11.80%
S&P 500 Index -5.50%
- --------------------------------------------------------------------------------
(a) The returns shown do not reflect the deduction of taxes a shareholder
would pay on Fund distributions or the redemption of Fund shares.
(b) Represents the period from the commencement of operations (April 3, 2008)
through August 31, 2008.
26
================================================================================
MONTEAGLE FIXED INCOME FUND
SUPPLEMENTARY PORTFOLIO INFORMATION
AUGUST 31, 2008 (UNAUDITED)
================================================================================
FUND PROFILE:
TOP TEN PORTFOLIO HOLDINGS (% OF NET ASSETS)
- -------------------------------------------------------------------------------
FNMA, Pool 386008, 4.52%, due 04/01/2013 3.4%
U.S. Treasury Note, 4.75%, due 08/15/2017 3.3%
GNMA, Series 2003-81-PB, 6.00%, due 03/20/2029 3.2%
FFCB, 5.70%, due 12/19/2016 3.1%
First Tennessee Bank, 5.316%, due 12/08/2008 2.3%
GNMA, Pool 676516, 6.00%, due 02/15/2038 2.3%
FNMA, Pool 882684, 6.00%, due 06/01/2036 2.0%
Johnson & Johnson, 5.15%, due 07/15/2018 1.9%
FNMA, 5.55%, 02/16/2017 1.9%
FHLB, 5.25%, 06/18/2014 1.6%
SECTOR ALLOCATION (% OF NET ASSETS)
- -------------------------------------------------------------------------------
U.S. Government & Agency Obligations 44.6%
Corporate Bonds 34.6%
Mortgage-Backed Securities 17.4%
Municipal Obligations 1.0%
Money Market Funds 4.3%
Liabilities in Excess of Other Assets (1.9%)
------
100.0%
======
27
================================================================================
MONTEAGLE QUALITY GROWTH FUND
SUPPLEMENTARY PORTFOLIO INFORMATION
AUGUST 31, 2008 (UNAUDITED)
================================================================================
FUND PROFILE:
TOP TEN EQUITY HOLDINGS (% OF NET ASSETS)
- --------------------------------------------------------------------------------
Microsoft Corp. 3.3%
Danaher Corp. 3.0%
Oracle Corp. 2.7%
Air Products & Chemicals, Inc. 2.7%
Apache Corp. 2.6%
Cisco Systems, Inc. 2.6%
Monsanto Co. 2.5%
Walt Disney Co. (The) 2.4%
C. R. Bard, Inc. 2.4%
Apple, Inc. 2.3%
TOP TEN PORTFOLIO INDUSTRIES (% OF NET ASSETS)
- --------------------------------------------------------------------------------
Software 8.1%
Computers & Peripherals 7.3%
Oil, Gas & Consumable Fuels 6.5%
Semiconductors & Semiconductor Equipment 5.4%
Chemicals 5.1%
Machinery 4.9%
Communications Equipment 4.6%
Aerospace & Defense 4.3%
Health Care Equipment & Supplies 4.1%
Energy Equipment & Services 3.8%
------
54.1%
======
ECONOMIC SECTORS WITH CASH AND OTHER ASSETS (LIABILITIES) (% OF NET ASSETS)
- --------------------------------------------------------------------------------
Information Technology 32.0%
Industrials 14.8%
Health Care 11.8%
Energy 10.4%
Consumer Discretionary 9.6%
Consumer Staples 9.4%
Materials 5.1%
Financials 4.4%
Money Market Funds 2.2%
Utilities 0.4%
Liabilities in Excess of Other Assets (0.1%)
------
100.0%
======
28
================================================================================
MONTEAGLE LARGE CAP GROWTH FUND
SUPPLEMENTARY PORTFOLIO INFORMATION
AUGUST 31, 2008 (UNAUDITED)
================================================================================
FUND PROFILE:
TOP TEN EQUITY HOLDINGS (% OF NET ASSETS)
- --------------------------------------------------------------------------------
Lockheed Martin Corp. 5.1%
Alcon, Inc. 4.9%
Stryker Corp. 4.5%
Apple, Inc. 4.4%
Oracle Corp. 4.3%
Genentech, Inc. 4.1%
Becton Dickinson & Co. 4.1%
Microsoft Corp. 4.0%
Precision Castparts Corp. 4.0%
PepsiCo, Inc. 3.9%
TOP TEN PORTFOLIO INDUSTRIES (% OF NET ASSETS)
- --------------------------------------------------------------------------------
Health Care Equipment & Supplies 17.3%
Aerospace & Defense 9.1%
Software 8.3%
Computers & Peripherals 7.9%
Energy Equipment & Services 7.5%
Biotechnology 7.3%
Capital Markets 7.0%
Communications Equipment 5.8%
Beverages 3.9%
IT Services 3.7%
------
77.8%
======
ECONOMIC SECTORS WITH CASH AND OTHER ASSETS (LIABILITIES) (% OF NET ASSETS)
- --------------------------------------------------------------------------------
Information Technology 25.8%
Health Care 24.6%
Industrials 14.1%
Consumer Staples 9.7%
Financials 9.6%
Energy 7.5%
Consumer Discretionary 3.4%
Materials 3.3%
Money Market Funds 2.0%
Liabilities in Excess of Other Assets (0.0%)
------
100.0%
======
29
================================================================================
MONTEAGLE SELECT VALUE FUND
SUPPLEMENTARY PORTFOLIO INFORMATION
AUGUST 31, 2008 (UNAUDITED)
================================================================================
FUND PROFILE:
TOP TEN EQUITY HOLDINGS (% OF NET ASSETS)
- --------------------------------------------------------------------------------
Intel Corp. 3.9%
Sysco Corp. 3.6%
Applied Materials, Inc. 3.5%
QUALCOMM, Inc. 3.3%
Kohl's Corp. 3.2%
Jabil Circuit, Inc. 3.2%
Gap, Inc. (The) 2.9%
Rowan Cos., Inc. 2.8%
Target Corp. 2.8%
Bank of America Corp. 2.8%
TOP TEN PORTFOLIO INDUSTRIES (% OF NET ASSETS)
- --------------------------------------------------------------------------------
Semiconductors & Semiconductor Equipment 9.5%
Energy Equipment & Services 7.0%
Pharmaceuticals 6.7%
Multi-Line Retail 6.0%
Communications Equipment 4.7%
Machinery 4.3%
Chemicals 4.2%
Diversified Financial Services 4.0%
Food & Staples Retailing 3.6%
Health Care Providers & Services 3.5%
------
53.5%
======
ECONOMIC SECTORS WITH CASH AND OTHER ASSETS (LIABILITIES) (% OF NET ASSETS)
- --------------------------------------------------------------------------------
Information Technology 18.4%
Consumer Discretionary 13.8%
Industrials 11.1%
U.S. Government Agency Obligations 10.9%
Health Care 10.2%
Financials 9.1%
Energy 8.8%
Materials 8.2%
Telecommunications Services 4.4%
Consumer Staples 3.6%
Money Market Funds 1.3%
Other Assets in Excess of Liabilities 0.2%
------
100.0%
======
30
================================================================================
MONTEAGLE VALUE FUND
SUPPLEMENTARY PORTFOLIO INFORMATION
AUGUST 31, 2008 (UNAUDITED)
================================================================================
FUND PROFILE:
TOP TEN EQUITY HOLDINGS (% OF NET ASSETS)
- --------------------------------------------------------------------------------
Halliburton Co. 7.7%
Transocean, Inc. 6.9%
Tidewater, Inc. 6.6%
Rowan Cos., Inc. 5.0%
Trinity Industries, Inc. 4.6%
Barrick Gold Corp. 4.5%
Newmont Mining Corp. 4.2%
Spectra Energy Corp. 4.1%
Goodrich Corp. 4.0%
Marathon Oil Corp. 3.7%
TOP TEN PORTFOLIO INDUSTRIES (% OF NET ASSETS)
- --------------------------------------------------------------------------------
Energy Equipment & Services 34.8%
Metals & Mining 12.3%
Oil, Gas & Consumable Fuels 7.8%
Pharmaceuticals 5.7%
Diversified Telecommunication Services 5.5%
Machinery 4.6%
Aerospace & Defense 4.0%
Semiconductors & Semiconductor Equipment 3.6%
Specialty Retail 3.4%
Chemicals 3.4%
------
85.1%
======
ECONOMIC SECTORS WITH CASH AND OTHER ASSETS (LIABILITIES) (% OF NET ASSETS)
- --------------------------------------------------------------------------------
Energy 42.6%
Materials 15.7%
Information Technology 9.1%
Industrials 8.6%
Consumer Discretionary 5.8%
Health Care 5.7%
Telecommunications Services 5.5%
Money Market Funds 4.6%
Utilities 2.3%
Other Assets in Excess of Liabilities 0.1%
------
100.0%
======
31
================================================================================
MONTEAGLE INFORMED INVESTOR GROWTH FUND
SUPPLEMENTARY PORTFOLIO INFORMATION.
AUGUST 31, 2008 (UNAUDITED)
================================================================================
FUND PROFILE:
TOP TEN EQUITY HOLDINGS (% OF NET ASSETS)
- --------------------------------------------------------------------------------
UltraShort Oil & Gas ProShares 17.0%
UltraShort Russell 2000 ProShares 7.9%
Myriad Genetics, Inc. 6.4%
UltraShort QQQ ProShares 5.6%
UltraShort S&P500 ProShares 5.2%
EMCOR Group, Inc. 5.1%
Celgene Corp. 4.7%
Genentech, Inc. 4.3%
Amgen, Inc. 4.2%
Invitrogen Corp. 4.0%
PORTFOLIO INDUSTRIES (% OF NET ASSETS)
- --------------------------------------------------------------------------------
Biotechnology 37.4%
Construction & Engineering 5.1%
Life Sciences Tools & Services 4.0%
Leisure Equipment & Products 2.4%
Computers & Peripherals 1.6%
Oil, Gas & Consumable Fuels 1.5%
------
52.0%
======
ECONOMIC SECTORS WITH CASH AND OTHER ASSETS (LIABILITIES) (% OF NET ASSETS)
- --------------------------------------------------------------------------------
Health Care 41.5%
Exchange-Traded Funds 39.6%
Money Market Funds 10.5%
Industrials 5.1%
Consumer Discretionary 2.4%
Information Technology 1.5%
Energy 1.5%
Liabilities in Excess of Other Assets (2.1%)
------
100.0%
======
32
================================================================================
MONTEAGLE FIXED INCOME FUND
SCHEDULE OF INVESTMENTS
AUGUST 31, 2008
================================================================================
PAR VALUE U.S. GOVERNMENT AND AGENCY OBLIGATIONS -- 44.6% VALUE
- --------------------------------------------------------------------------------
U.S. TREASURY NOTES -- 4.9%
$1,000,000 4.75%, due 08/15/2017 $ 1,077,501
500,000 4.00%, due 08/15/2018 507,774
------------
1,585,275
------------
FEDERAL FARM CREDIT BANK -- 7.8%
200,000 6.82%, due 03/16/2009 204,249
250,000 5.375%, due 07/18/2011 262,228
500,000 5.55%, due 07/30/2015 506,216
300,000 5.40%, due 10/06/2015 300,504
250,000 5.98%, due 09/15/2016 250,258
1,000,000 5.70%, due 12/19/2016 1,004,453
------------
2,527,908
------------
FEDERAL HOME LOAN BANK -- 16.5%
500,000 6.795%, due 06/30/2009 515,598
250,000 5.375%, due 07/17/2009 255,163
250,000 5.75%, due 05/15/2012 266,978
200,000 5.80%, due 06/12/2013 204,022
250,000 5.125%, due 08/14/2013 262,774
500,000 5.50%, due 08/28/2013 510,716
500,000 5.25%, due 06/18/2014 529,220
250,000 5.50%, due 08/25/2014 258,186
250,000 5.00%, due 09/03/2015 249,074
500,000 5.50%, due 10/19/2016 508,482
250,000 5.75%, due 03/13/2017 252,129
500,000 6.00%, due 07/27/2017 518,586
500,000 5.25%, due 11/08/2017 507,348
500,000 5.05%, due 01/03/2018 503,975
------------
5,342,251
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 4.5%
400,000 7.00%, due 03/15/2010 423,570
500,000 5.625%, due 03/15/2011 527,548
500,000 6.00%, due 08/18/2016 508,143
------------
1,459,261
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 10.9%
500,000 7.25%, due 01/15/2010 528,052
500,000 4.00%, due 07/02/2010 503,706
750,000 5.00%, due 08/02/2012 780,569
500,000 5.00%, due 03/02/2015 515,215
33
================================================================================
MONTEAGLE FIXED INCOME FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
U.S. GOVERNMENT AND AGENCY OBLIGATIONS -- 44.6%
PAR VALUE (CONTINUED) VALUE
- --------------------------------------------------------------------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 10.9% (CONTINUED)
$ 600,000 5.55%, due 02/16/2017 $ 612,623
300,000 5.25%, due 01/16/2018 297,341
280,000 5.08%, due 06/24/2018 276,067
------------
3,513,573
------------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS
(Cost $14,166,077) $ 14,428,268
------------
================================================================================
PAR VALUE CORPORATE BONDS -- 34.6% VALUE
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE -- 1.6%
$ 500,000 United Technologies Corp., 5.375%, due 12/15/2017 $ 503,332
------------
BEVERAGES -- 4.1%
300,000 Anheuser-Busch Cos., Inc., 6.00%, due 04/15/2011 303,874
500,000 Bottling Group, LLC, 4.625%, due 11/15/2012 511,064
500,000 Coca-Cola Co., 5.75%, due 03/15/2011 527,801
------------
1,342,739
------------
CAPITAL MARKETS -- 2.1%
500,000 Goldman Sachs Group, Inc. (The), 5.95%, due 01/18/2008 473,833
200,000 Morgan Stanley, 6.60%, due 04/01/2012 201,136
------------
674,969
------------
COMMERCIAL BANKS -- 3.9%
750,000 First Tennessee Bank, 5.316%, due 12/08/2008 747,096
500,000 SunTrust Bank, 6.375%, due 04/01/2011 503,827
------------
1,250,923
------------
COMMERCIAL SERVICES & SUPPLIES -- 0.8%
250,000 Pitney Bowes, Inc., 5.75%, due 09/15/2017 247,828
------------
CONSUMER FINANCE -- 1.5%
500,000 American Express Co., 4.75%, due 06/17/2009 498,583
------------
DIVERSIFIED FINANCIAL SERVICES -- 3.5%
250,000 Bank of America Corp., 5.875%, due 02/15/2009 252,213
500,000 Bank of America Corp., 4.875%, due 01/15/2013 485,277
500,000 CIT Group, Inc., 4.75%, due 12/15/2010 411,692
------------
1,149,182
------------
DIVERSIFIED TELECOMMUNICATION SERVICES -- 0.6%
200,000 SBC Communications, Inc., 5.625%, due 06/15/2016 199,185
------------
34
================================================================================
MONTEAGLE FIXED INCOME FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE CORPORATE BONDS -- 34.6% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT -- 0.8%
$ 250,000 Emerson Electric Co., 5.125%, due 12/01/2016 $ 249,813
------------
FOOD PRODUCTS -- 2.1%
250,000 Campbell Soup Co., 6.75%, due 02/15/2011 265,680
400,000 McCormick & Co., Inc., 5.25%, due 09/01/2013 400,238
------------
665,918
------------
HEALTH CARE PROVIDERS & SERVICES -- 0.7%
250,000 UnitedHealth Group, Inc., 5.00%, due 08/15/2014 231,854
------------
HOUSEHOLD PRODUCTS -- 0.8%
250,000 Kimberly-Clark Corp., 5.00%, due 08/15/2013 257,550
------------
INSURANCE -- 1.5%
500,000 Prudential Financial, Inc., 5.15%, due 01/15/2013 490,692
------------
METALS & MINING -- 1.5%
500,000 Alcoa, Inc., 5.375%, due 01/15/2013 489,146
------------
OIL, GAS & CONSUMABLE FUELS -- 2.4%
250,000 ConocoPhillips, 5.50%, due 04/15/2013 259,824
500,000 Shell International Finance, 5.625%, due 06/27/2011 527,015
------------
786,839
------------
PHARMACEUTICALS -- 4.3%
500,000 Abbott Laboratories, 5.40%, due 09/15/2008 500,268
250,000 Abbott Laboratories, 5.15%, due 11/30/2012 258,284
600,000 Johnson & Johnson, 5.15%, due 07/15/2018 617,468
------------
1,376,020
------------
SOFTWARE -- 1.6%
500,000 Oracle Corp., 5.00%, due 01/15/2011 512,704
------------
SPECIALTY RETAIL -- 0.8%
250,000 Lowe's Cos., Inc., 5.60%, due 09/15/2012 258,596
------------
TOTAL CORPORATE BONDS (Cost $11,338,346) $ 11,185,873
------------
35
================================================================================
MONTEAGLE FIXED INCOME FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE MORTGAGE-BACKED SECURITIES -- 17.4% VALUE
- --------------------------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 2.5%
$ 348,643 Series 2840, 5.00%, due 08/15/2015 $ 351,470
218,562 Series 15-L, 7.00%, due 07/25/2023 229,210
210,875 Series 3058, 5.50%, due 10/15/2035 214,551
------------
795,231
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 8.0%
1,100,000 Pool 386008, 4.52%, due 04/01/2013 1,099,739
238,565 Pool 725421, 7.00%, due 09/01/2017 250,065
425,800 Pool 545759, 6.50%, due 07/01/2032 441,627
156,731 Pool 754289, 6.00%, due 11/01/2033 159,111
635,432 Pool 882684, 6.00%, due 06/01/2036 642,303
------------
2,592,845
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 6.9%
296,296 Pool 648337, 5.00%, due 10/15/2020 298,900
1,000,000 Series 2003-81-PB, 6.00%, due 03/20/2029 1,028,637
176,113 Pool 476998, 6.50%, due 07/15/2029 182,600
726,186 Pool 676516, 6.00%, due 02/15/2038 738,265
------------
2,248,402
------------
TOTAL MORTGAGE-BACKED SECURITIES (Cost $5,654,361) $ 5,636,478
------------
================================================================================
PAR VALUE MUNICIPAL OBLIGATIONS -- 1.0% VALUE
- --------------------------------------------------------------------------------
GEORGIA -- 1.0%
$ 300,000 Atlanta & Fulton County Recreation Authority, Revenue,
6.625%, due 12/01/2011 (Cost $300,805) $ 304,614
------------
================================================================================
SHARES MONEY MARKET FUNDS -- 4.3% VALUE
- --------------------------------------------------------------------------------
1,371,952 State Street Institutional U.S. Government Money
Market Fund, 1.83% (a) (Cost $1,371,952) $ 1,371,952
------------
TOTAL INVESTMENTS AT VALUE -- 101.9%
(Cost $32,831,541) $ 32,927,185
LIABILITIES IN EXCESS OF OTHER ASSETS -- (1.9%) (605,764)
------------
NET ASSETS -- 100.0% $ 32,321,421
============
(a) Variable rate security. The rate shown is the 7-day effective yield as of
August 31, 2008.
The accompanying notes are an integral part of the financial statements.
36
================================================================================
MONTEAGLE QUALITY GROWTH FUND
SCHEDULE OF INVESTMENTS
AUGUST 31, 2008
================================================================================
SHARES COMMON STOCKS -- 97.9% VALUE
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE -- 4.3%
1,400 Boeing Co. (The) $ 91,784
1,400 Honeywell International, Inc. 70,238
2,125 Precision Castparts Corp. 219,427
3,575 United Technologies Corp. 234,484
------------
615,933
------------
AIR FREIGHT & LOGISTICS -- 1.4%
1,700 Expeditors International of Washington, Inc. 61,353
1,725 FedEx Corp. 142,864
------------
204,217
------------
BEVERAGES -- 3.4%
3,900 Coca-Cola Co. (The) 203,073
4,075 PepsiCo, Inc. 279,056
------------
482,129
------------
BIOTECHNOLOGY -- 2.7%
1,700 Genentech, Inc. (a) 167,875
4,204 Gilead Sciences, Inc. (a) 221,467
------------
389,342
------------
CAPITAL MARKETS -- 3.0%
2,200 Franklin Resources, Inc. 229,900
4,600 Janus Capital Group, Inc. 124,062
2,400 Merrill Lynch & Co., Inc. 68,040
------------
422,002
------------
CHEMICALS -- 5.1%
4,100 Air Products & Chemicals, Inc. 376,585
3,050 Monsanto Co. 348,463
------------
725,048
------------
COMMUNICATIONS EQUIPMENT -- 4.6%
15,275 Cisco Systems, Inc. (a) 367,364
5,425 QUALCOMM, Inc. 285,626
------------
652,990
------------
COMPUTERS & PERIPHERALS -- 7.3%
1,900 Apple, Inc. (a) 322,107
7,400 Dell, Inc. (a) 160,802
6,700 Hewlett-Packard Co. 314,364
2,000 International Business Machines Corp. 243,460
------------
1,040,733
------------
CONSUMER FINANCE -- 0.6%
2,320 American Express Co. 92,058
------------
37
================================================================================
MONTEAGLE QUALITY GROWTH FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 97.9% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES -- 0.8%
2,200 Bank of America Corp. $ 68,508
550 InterContinentalExchange, Inc. (a) 48,416
------------
116,924
------------
ELECTRICAL EQUIPMENT -- 1.3%
3,100 Roper Industries, Inc. 183,148
------------
ELECTRONIC EQUIPMENT, INSTRUMENTS
& COMPONENTS -- 1.5%
4,455 Amphenol Corp. - Class A 211,702
------------
ENERGY EQUIPMENT & SERVICES -- 3.8%
6,460 Cameron International Corp. (a) 300,971
2,600 Schlumberger Ltd. 244,972
------------
545,943
------------
FOOD & STAPLES RETAILING -- 3.7%
1,000 Costco Wholesale Corp. 67,060
2,700 CVS Caremark Corp. 98,820
2,550 Sysco Corp. 81,166
4,675 Wal-Mart Stores, Inc. 276,152
------------
523,198
------------
HEALTH CARE EQUIPMENT & SUPPLIES -- 4.1%
3,650 C.R. Bard, Inc. 341,092
2,700 Medtronic, Inc. 147,420
2,100 St. Jude Medical, Inc. (a) 96,243
------------
584,755
------------
HOTELS, RESTAURANTS & LEISURE -- 2.5%
8,600 Burger King Holdings, Inc. 213,452
2,190 McDonald's Corp. 135,889
------------
349,341
------------
HOUSEHOLD PRODUCTS -- 1.2%
2,475 Procter & Gamble Co. (The) 172,681
------------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS -- 0.5%
960 Constellation Energy Group, Inc. 64,042
------------
INDUSTRIAL CONGLOMERATES -- 1.1%
5,395 General Electric Co. 151,600
------------
38
================================================================================
MONTEAGLE QUALITY GROWTH FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 97.9% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES -- 2.6%
2,925 eBay, Inc. (a) $ 72,920
505 Google, Inc. - Class A (a) 233,961
2,900 Yahoo!, Inc. (a) 56,202
------------
363,083
------------
IT SERVICES -- 2.5%
4,250 Cognizant Technology Solutions Corp. - Class A (a) 124,610
8,300 Western Union Co. 229,246
------------
353,856
------------
LIFE SCIENCES TOOLS & SERVICES -- 1.8%
4,300 Thermo Fisher Scientific, Inc. (a) 260,408
------------
MACHINERY -- 4.9%
5,250 Danaher Corp. 428,242
900 Deere & Co. 63,513
1,700 SPX Corp. 202,725
------------
694,480
------------
MEDIA -- 3.2%
4,200 DIRECTV Group, Inc. (The) (a) 118,482
10,600 Walt Disney Co. (The) 342,910
------------
461,392
------------
MULTI-LINE RETAIL -- 1.6%
3,060 Nordstrom, Inc. 95,166
2,400 Target Corp. 127,248
------------
222,414
------------
OIL, GAS & CONSUMABLE FUELS -- 6.5%
3,275 Apache Corp. 374,595
2,700 Exxon Mobil Corp. 216,027
1,500 Occidental Petroleum Corp. 119,040
3,475 Peabody Energy Corp. 218,751
------------
928,413
------------
PERSONAL PRODUCTS -- 1.1%
6,200 Alberto-Culver Co. 162,192
------------
PHARMACEUTICALS -- 3.1%
4,175 Abbott Laboratories 239,770
2,000 Johnson & Johnson 140,860
1,540 Merck & Co., Inc. 54,932
------------
435,562
------------
REAL ESTATE INVESTMENT TRUSTS (REITS) -- 1.2%
3,800 ProLogis 163,628
------------
39
================================================================================
MONTEAGLE QUALITY GROWTH FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 97.9% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
ROAD & RAIL -- 0.6%
990 Union Pacific Corp. $ 83,061
------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 5.4%
13,000 Intel Corp. 297,310
1,350 MEMC Electronic Materials, Inc. (a) 66,272
7,700 Microchip Technology, Inc. 246,477
6,350 Texas Instruments, Inc. 155,639
------------
765,698
------------
SOFTWARE -- 8.1%
3,430 Activision Blizzard, Inc. (a) 112,573
1,800 Adobe Systems, Inc. (a) 77,094
2,500 ANSYS, Inc. (a) 110,875
17,150 Microsoft Corp. 468,024
17,450 Oracle Corp. (a) 382,679
------------
1,151,245
------------
SPECIALTY RETAIL -- 1.4%
2,700 GameStop Corp. - Class A (a) 118,449
3,025 Lowe's Cos., Inc. 74,536
------------
192,985
------------
TEXTILES, APPAREL & LUXURY GOODS -- 1.0%
2,325 Nike, Inc. - Class B 140,918
------------
TOTAL COMMON STOCKS (Cost $12,766,271) $ 13,907,121
------------
================================================================================
SHARES MONEY MARKET FUNDS -- 2.2% VALUE
- --------------------------------------------------------------------------------
315,008 State Street Institutional U.S. Government Money
Market Fund, 1.83% (b) (Cost $315,008) $ 315,008
------------
TOTAL INVESTMENTS AT VALUE -- 100.1%
(Cost $13,081,279) $ 14,222,129
LIABILITIES IN EXCESS OF OTHER ASSETS-- (0.1%) (19,374)
------------
NET ASSETS -- 100.0% $ 14,202,755
============
(a) Non-income producing security.
(b) Variable rate security. The rate shown is the 7-day effective yield as of
August 31, 2008.
The accompanying notes are an integral part of the financial statements.
40
================================================================================
MONTEAGLE LARGE CAP GROWTH FUND
SCHEDULE OF INVESTMENTS
AUGUST 31, 2008
================================================================================
SHARES COMMON STOCKS -- 98.0% VALUE
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE -- 9.1%
10,000 Lockheed Martin Corp. $ 1,164,400
8,700 Precision Castparts Corp. 898,362
------------
2,062,762
------------
BEVERAGES -- 3.9%
13,000 PepsiCo, Inc. 890,240
------------
BIOTECHNOLOGY -- 7.3%
9,500 Genentech, Inc. (a) 938,125
13,800 Gilead Sciences, Inc. (a) 726,984
------------
1,665,109
------------
CAPITAL MARKETS -- 7.0%
4,000 BlackRock, Inc. - Class A 869,000
4,400 Goldman Sachs Group, Inc. (The) 721,468
------------
1,590,468
------------
CHEMICALS -- 3.3%
6,600 Monsanto Co. 754,050
------------
COMMUNICATIONS EQUIPMENT -- 5.8%
31,200 Cisco Systems, Inc. (a) 750,360
4,700 Research In Motion Ltd. (a) 571,520
------------
1,321,880
------------
COMPUTERS & PERIPHERALS -- 7.9%
5,900 Apple, Inc. (a) 1,000,227
6,600 International Business Machines Corp. 803,418
------------
1,803,645
------------
DIVERSIFIED FINANCIAL SERVICES -- 2.7%
1,800 CME Group, Inc. 603,684
------------
ENERGY EQUIPMENT & SERVICES -- 7.5%
4,500 National Oilwell Varco, Inc. (a) 331,785
8,200 Smith International, Inc. 571,540
6,306 Transocean, Inc. (a) 802,123
------------
1,705,448
------------
FOOD & STAPLES RETAILING -- 3.4%
13,100 Wal-Mart Stores, Inc. 773,817
------------
HEALTH CARE EQUIPMENT & SUPPLIES -- 17.3%
6,600 Alcon, Inc. 1,123,914
10,600 Becton Dickinson & Co. 926,228
17,800 Hologic, Inc. (a) 377,716
41
================================================================================
MONTEAGLE LARGE CAP GROWTH FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 98.0% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES -- 17.3% (CONTINUED)
1,600 Intuitive Surgical, Inc. (a) $ 472,432
15,200 Stryker Corp. 1,021,288
------------
3,921,578
------------
HOTELS, RESTAURANTS & LEISURE -- 3.4%
12,600 McDonald's Corp. 781,830
------------
HOUSEHOLD PRODUCTS -- 2.3%
7,600 Procter & Gamble Co. (The) 530,252
------------
INDUSTRIAL CONGLOMERATES -- 3.3%
26,700 General Electric Co. 750,270
------------
IT SERVICES -- 3.7%
11,000 Visa, Inc. - Class A 834,900
------------
SOFTWARE -- 8.3%
33,300 Microsoft Corp. 908,757
45,000 Oracle Corp. (a) 986,850
------------
1,895,607
------------
TRADING COMPANIES & DISTRIBUTORS -- 1.8%
7,700 Fastenal Co. 399,861
------------
TOTAL COMMON STOCKS (Cost $19,911,575) $ 22,285,401
------------
================================================================================
SHARES MONEY MARKET FUNDS -- 2.0% VALUE
- --------------------------------------------------------------------------------
465,224 State Street Institutional U.S. Government Money
Market Fund, 1.83% (b) (Cost $465,224) $ 465,224
------------
TOTAL INVESTMENTS AT VALUE -- 100.0%
(Cost $20,376,799) $ 22,750,625
LIABILITES IN EXCESS OF OTHER ASSETS -- (0.0%) (3,182)
------------
NET ASSETS -- 100.0% $ 22,747,443
============
(a) Non-income producing security.
(b) Variable rate security. The rate shown is the 7-day effective yield as of
August 31, 2008.
The accompanying notes are an integral part of the financial statements.
42
================================================================================
MONTEAGLE SELECT VALUE FUND
SCHEDULE OF INVESTMENTS
AUGUST 31, 2008
================================================================================
SHARES COMMON STOCKS -- 87.6% VALUE
- --------------------------------------------------------------------------------
AUTOMOBILES -- 1.7%
5,000 Harley-Davidson, Inc. $ 198,900
------------
BUILDING PRODUCTS -- 1.9%
11,500 Masco Corp. 219,190
------------
CAPITAL MARKETS -- 1.8%
5,000 Morgan Stanley 204,150
------------
CHEMICALS -- 4.2%
5,000 Ashland, Inc. 204,650
8,154 Dow Chemical Co. (The) 278,296
------------
482,946
------------
COMMERCIAL BANKS -- 3.3%
10,300 KeyCorp 123,703
8,500 Wells Fargo & Co. 257,295
------------
380,998
------------
COMMUNICATIONS EQUIPMENT -- 4.7%
16,900 Motorola, Inc. 159,198
7,180 QUALCOMM, Inc. 378,027
------------
537,225
------------
COMPUTERS & PERIPHERALS -- 1.0%
6,500 QLogic Corp. (a) 121,420
------------
CONTAINERS & PACKAGING -- 2.3%
9,300 Bemis Co., Inc. 259,656
------------
DIVERSIFIED FINANCIAL SERVICES -- 4.0%
10,342 Bank of America Corp. 322,050
13,500 CIT Group, Inc. 139,185
------------
461,235
------------
DIVERSIFIED TELECOMMUNICATION SERVICES -- 2.4%
8,600 AT&T, Inc. 275,114
------------
ELECTRICAL EQUIPMENT -- 2.2%
5,259 Rockwell Automation, Inc. 248,277
------------
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS -- 3.1%
21,500 Jabil Circuit, Inc. 362,490
------------
43
================================================================================
MONTEAGLE SELECT VALUE FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 87.6% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES -- 7.0%
5,200 Halliburton Co. $ 228,488
8,873 Rowan Cos., Inc. 327,769
2,000 Transocean, Inc. (a) 254,400
------------
810,657
------------
FOOD & STAPLES RETAILING -- 3.6%
13,000 Sysco Corp. 413,790
------------
HEALTH CARE PROVIDERS & SERVICES -- 3.5%
6,300 UnitedHealth Group, Inc. 191,835
4,000 WellPoint, Inc. (a) 211,160
------------
402,995
------------
HOTELS, RESTAURANTS & LEISURE -- 1.7%
12,400 Starbucks Corp. (a) 192,944
------------
HOUSEHOLD DURABLES -- 1.5%
9,500 Newell Rubbermaid, Inc. 171,950
------------
INDUSTRIAL CONGLOMERATES -- 2.7%
11,100 General Electric Co. 311,910
------------
MACHINERY -- 4.3%
5,800 Dover Corp. 286,404
4,800 PACCAR, Inc. 206,688
------------
493,092
------------
METALS & MINING -- 1.8%
14,200 Titanium Metals Corp. 204,622
------------
MULTI-LINE RETAIL -- 6.0%
7,500 Kohl's Corp. (a) 368,775
6,121 Target Corp. 324,535
------------
693,310
------------
OIL, GAS & CONSUMABLE FUELS -- 1.7%
2,400 ConocoPhillips 198,024
------------
PHARMACEUTICALS -- 6.7%
3,800 Johnson & Johnson 267,634
13,500 Pfizer, Inc. 257,985
12,700 Schering-Plough Corp. 246,380
------------
771,999
------------
44
================================================================================
MONTEAGLE SELECT VALUE FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 87.6% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 9.5%
22,477 Applied Materials, Inc. $ 402,788
19,438 Intel Corp. 444,547
10,000 Texas Instruments, Inc. 245,100
------------
1,092,435
------------
SPECIALTY RETAIL -- 2.9%
17,151 Gap, Inc. (The) 333,587
------------
WIRELESS TELECOMMUNICATION SERVICES -- 2.1%
27,200 Sprint Nextel Corp. (a) 237,184
------------
TOTAL COMMON STOCKS (Cost $10,662,881) $ 10,080,100
------------
================================================================================
PAR VALUE U.S. GOVERNMENT AGENCY OBLIGATIONS -- 10.9% VALUE
- --------------------------------------------------------------------------------
$1,250,000 Federal Home Loan Bank, discount note, 2.16%,
due 09/11/2008 (Cost $1,249,226) $ 1,249,375
------------
================================================================================
SHARES MONEY MARKET FUNDS -- 1.3% VALUE
- --------------------------------------------------------------------------------
153,233 State Street Institutional U.S. Government Money
Market Fund, 1.83% (b) (Cost $153,233) $ 153,233
------------
TOTAL INVESTMENTS AT VALUE -- 99.8%
(Cost $12,065,340) $ 11,482,708
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.2% 19,226
------------
NET ASSETS -- 100.0% $ 11,501,934
============
(a) Non-income producing security.
(b) Variable rate security. The rate shown is the 7-day effective yield as of
August 31, 2008.
The accompanying notes are an integral part of the financial statements.
45
================================================================================
MONTEAGLE VALUE FUND
SCHEDULE OF INVESTMENTS
AUGUST 31, 2008
================================================================================
SHARES COMMON STOCKS -- 95.3% VALUE
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE -- 4.0%
15,000 Goodrich Corp. $ 768,750
------------
CHEMICALS -- 3.4%
14,750 E.I. du Pont de Nemours & Co. 655,490
------------
COMMUNICATIONS EQUIPMENT -- 1.8%
15,000 Avocent Corp. (a) 352,050
------------
DIVERSIFIED TELECOMMUNICATION SERVICES -- 5.5%
20,000 AT&T, Inc. 639,800
226 FairPoint Communications, Inc. 2,000
12,000 Verizon Communications, Inc. 421,440
------------
1,063,240
------------
ELECTRIC UTILITIES -- 2.3%
25,550 Duke Energy Corp. 445,592
------------
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS -- 1.2%
100,000 Sanmina-SCI Corp. (a) 235,000
------------
ENERGY EQUIPMENT & SERVICES -- 34.8%
7,000 Baker Hughes, Inc. 560,070
34,000 Halliburton Co. 1,493,960
12,000 Helmerich & Payne, Inc. 685,440
12,000 Nabors Industries Ltd. (a) 427,560
26,450 Rowan Cos., Inc. 977,063
21,000 Tidewater, Inc. 1,274,070
10,494 Transocean, Inc. (a) 1,334,836
------------
6,752,999
------------
MACHINERY -- 4.6%
25,000 Trinity Industries, Inc. 899,500
------------
METALS & MINING -- 12.3%
22,000 Alcoa, Inc. 706,860
25,000 Barrick Gold Corp. 868,250
18,000 Newmont Mining Corp. 811,800
------------
2,386,910
------------
MULTI-LINE RETAIL -- 2.4%
5,000 Sears Holdings Corp. (a) 459,750
------------
46
================================================================================
MONTEAGLE VALUE FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 95.3% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS -- 7.8%
16,000 Marathon Oil Corp. $ 721,120
30,000 Spectra Energy Corp. 793,800
------------
1,514,920
------------
PHARMACEUTICALS -- 5.7%
30,000 Pfizer, Inc. 573,300
28,000 Schering-Plough Corp. 543,200
------------
1,116,500
------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 3.6%
17,000 Applied Materials, Inc. 304,640
17,000 Intel Corp. 388,790
------------
693,430
------------
SOFTWARE -- 2.5%
18,000 Microsoft Corp. 491,220
------------
SPECIALTY RETAIL -- 3.4%
34,000 Gap, Inc. (The) 661,300
------------
TOTAL COMMON STOCKS (Cost $12,142,960) $ 18,496,651
------------
================================================================================
SHARES MONEY MARKET FUNDS -- 4.6% VALUE
- --------------------------------------------------------------------------------
894,334 State Street Institutional U.S. Government Money
Market Fund, 1.83% (b) (Cost $894,334) $ 894,334
------------
TOTAL INVESTMENTS AT VALUE -- 99.9%
(Cost $13,037,294) $ 19,390,985
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.1% 26,402
------------
NET ASSETS -- 100.0% $ 19,417,387
============
(a) Non-income producing security.
(b) Variable rate security. The rate shown is the 7-day effective yield as of
August 31, 2008.
The accompanying notes are an integral part of the financial statements.
47
================================================================================
MONTEAGLE INFORMED INVESTOR GROWTH FUND
SCHEDULE OF INVESTMENTS
AUGUST 31, 2008
================================================================================
SHARES COMMON STOCKS -- 52.0% VALUE
- --------------------------------------------------------------------------------
BIOTECHNOLOGY -- 37.4%
2,000 Alexion Pharmaceuticals, Inc. (a) $ 90,160
4,600 Alnylam Pharmaceuticals, Inc. (a) 136,390
6,100 Amgen, Inc. (a) 383,385
3,800 Biogen Idec, Inc. (a) 193,534
6,200 Celgene Corp. (a) 429,660
4,000 Genentech, Inc. (a) 395,000
3,400 Gilead Sciences, Inc. (a) 179,112
4,500 ImClone Systems, Inc. (a) 289,800
7,600 Martek Biosciences Corp. (a) 253,916
8,600 Myriad Genetics, Inc. (a) 586,520
2,700 OSI Pharmaceuticals, Inc. (a) 136,350
3,400 United Therapeutics Corp. (a) 360,842
------------
3,434,669
------------
COMPUTERS & PERIPHERALS -- 1.6%
3,900 Lexmark International, Inc. - Class A (a) 140,283
------------
CONSTRUCTION & ENGINEERING -- 5.1%
13,800 EMCOR Group, Inc. (a) 470,166
------------
LEISURE EQUIPMENT & PRODUCTS -- 2.4%
2,500 Hasbro, Inc. 93,500
6,600 Mattel, Inc. 127,578
------------
221,078
------------
LIFE SCIENCES TOOLS & SERVICES -- 4.0%
8,700 Invitrogen Corp. (a) 369,402
------------
OIL, GAS & CONSUMABLE FUELS -- 1.5%
3,600 Southwestern Energy Co. (a) 138,132
------------
TOTAL COMMON STOCKS (Cost $5,016,655) $ 4,773,730
------------
48
================================================================================
MONTEAGLE INFORMED INVESTOR GROWTH FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
SHARES EXCHANGE-TRADED FUNDS -- 39.6% VALUE
- --------------------------------------------------------------------------------
10,100 UltraShort Basic Materials ProShares $ 350,571
45,200 UltraShort Oil & Gas ProShares 1,561,208
12,100 UltraShort QQQ ProShares 511,951
11,000 UltraShort Russell 2000 ProShares 729,520
7,300 UltraShort S&P500 ProShares 477,055
------------
TOTAL EXCHANGE-TRADED FUNDS (Cost $3,342,530) $ 3,630,305
------------
================================================================================
SHARES MONEY MARKET FUNDS -- 10.5% VALUE
- --------------------------------------------------------------------------------
963,811 State Street Institutional U.S. Government Money
Market Fund, 1.83% (b) (Cost $963,811) $ 963,811
------------
TOTAL INVESTMENTS AT VALUE -- 102.1%
(Cost $9,322,996) $ 9,367,846
LIABILITIES IN EXCESS OF OTHER ASSETS -- (2.1%) (190,646)
------------
NET ASSETS -- 100.0% $ 9,177,200
============
(a) Non-income producing security.
(b) Variable rate security. The rate shown is the 7-day effective yield as of
August 31, 2008.
The accompanying notes are an integral part of the financial statements.
49
================================================================================================================
MONTEAGLE FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
AUGUST 31, 2008
================================================================================================================
FIXED QUALITY LARGE CAP
INCOME GROWTH GROWTH
FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------
ASSETS
Investment securities:
At amortized cost $ 32,831,541 $ 13,081,279 $ 20,376,799
============ ============ ============
At market value (Note 2) $ 32,927,185 $ 14,222,129 $ 22,750,625
Receivable for capital shares sold -- 3,975 --
Dividends and interest receivable 325,149 14,528 20,472
Other assets 580 164 297
------------ ------------ ------------
TOTAL ASSETS 33,252,914 14,240,796 22,771,394
------------ ------------ ------------
LIABILITIES
Income distribution payable 3,488 -- --
Payable for capital shares redeemed 128 319 --
Payable for investment securities purchased 901,005 22,664 --
Due to Adviser (Note 3) 26,400 14,478 23,185
Accrued Trustees' fees 49 157 293
Accrued compliance service fees (Note 3) 423 423 423
Other liabilities -- -- 50
------------ ------------ ------------
TOTAL LIABILITIES 931,493 38,041 23,951
------------ ------------ ------------
NET ASSETS $ 32,321,421 $ 14,202,755 $ 22,747,443
============ ============ ============
NET ASSETS CONSIST OF:
Paid-in capital $ 33,708,502 $ 16,036,834 $ 25,447,851
Accumulated net realized losses on investments (1,482,725) (2,974,929) (5,074,234)
Net unrealized appreciation on investments 95,644 1,140,850 2,373,826
------------ ------------ ------------
NET ASSETS $ 32,321,421 $ 14,202,755 $ 22,747,443
============ ============ ============
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) 3,217,084 1,679,067 3,620,861
============ ============ ============
Net asset value, offering and redemption price per share (Note 2) $ 10.05 $ 8.46 $ 6.28
============ ============ ============
The accompanying notes are an integral part of the financial statements.
50
================================================================================================================
MONTEAGLE FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
AUGUST 31, 2008
================================================================================================================
INFORMED
SELECT INVESTOR
VALUE VALUE GROWTH
FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------
ASSETS
Investment securities:
At amortized cost $ 12,065,340 $ 13,037,294 $ 9,322,996
============ ============ ============
At market value (Note 2) $ 11,482,708 $ 19,390,985 $ 9,367,846
Receivable for capital shares sold -- 500 --
Dividends and interest receivable 31,310 46,726 3,817
Other assets 147 229 --
------------ ------------ ------------
TOTAL ASSETS 11,514,165 19,438,440 9,371,663
------------ ------------ ------------
LIABILITIES
Payable for capital shares redeemed 73 635 --
Payable for investment securities purchased -- -- 183,764
Due to Adviser (Note 3) 11,578 19,668 9,554
Accrued Trustees' fees 157 327 722
Accrued compliance service fees (Note 3) 423 423 423
------------ ------------ ------------
TOTAL LIABILITIES 12,231 21,053 194,463
------------ ------------ ------------
NET ASSETS $ 11,501,934 $ 19,417,387 $ 9,177,200
============ ============ ============
NET ASSETS CONSIST OF:
Paid-in capital $ 12,264,199 $ 13,697,186 $ 10,452,852
Undistributed net investment income 28,610 22,200 --
Accumulated net realized losses on investments (208,243) (655,690) (1,320,502)
Net unrealized appreciation (depreciation) on investments (582,632) 6,353,691 44,850
------------ ------------ ------------
NET ASSETS $ 11,501,934 $ 19,417,387 $ 9,177,200
============ ============ ============
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) 989,066 1,164,592 1,040,426
============ ============ ============
Net asset value, offering and redemption price per share (Note 2) $ 11.63 $ 16.67 $ 8.82
============ ============ ============
The accompanying notes are an integral part of the financial statements.
51
==========================================================================================
MONTEAGLE FUNDS
STATEMENTS 0F OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 2008
==========================================================================================
FIXED QUALITY LARGE CAP
INCOME GROWTH GROWTH
FUND FUND FUND
- ------------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest $ 1,598,710 $ -- $ --
Dividends 29,190 179,171 272,346
Foreign withholding tax -- -- (7,519)
Securities lending income (Note 2) -- 315 1,264
------------ ------------ ------------
Total investment income 1,627,900 179,486 266,091
------------ ------------ ------------
EXPENSES
Investment advisory fees (Note 3) 318,232 179,833 317,037
Trustees' fees 8,475 3,806 6,824
Compliance service fees (Note 3) 3,196 3,196 3,196
ICI membership fees 1,603 713 1,292
------------ ------------ ------------
Total expenses 331,506 187,548 328,349
------------ ------------ ------------
NET INVESTMENT INCOME (LOSS) 1,296,394 (8,062) (62,258)
------------ ------------ ------------
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Net realized gains (losses) on investments 47,540 (255,405) (112,406)
Net change in unrealized appreciation
(depreciation) on investments 281,937 (377,494) (3,453,136)
------------ ------------ ------------
NET REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS 329,477 (632,899) (3,565,542)
------------ ------------ ------------
NET INCREASE (DECREASE) IN
NET ASSETS FROM OPERATIONS $ 1,625,871 $ (640,961) $ (3,627,800)
============ ============ ============
The accompanying notes are an integral part of the financial statements.
52
======================================================================================
MONTEAGLE FUNDS
STATEMENTS 0F OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 2008 (a)
======================================================================================
INFORMED
SELECT INVESTOR
VALUE VALUE GROWTH
FUND FUND FUND
- --------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest $ 352 $ -- $ --
Dividends 276,029 345,863 23,639
Foreign withholding tax -- (1,312) --
Securities lending income (Note 2) 826 2,457 --
------------ ------------ ------------
Total investment income 277,207 347,008 23,639
------------ ------------ ------------
EXPENSES
Investment advisory fees (Note 3) 147,621 253,154 41,895
Trustees' fees 3,255 5,139 882
Compliance service fees (Note 3) 3,196 3,196 2,049
ICI membership fees 634 988 --
------------ ------------ ------------
Total expenses 154,706 262,477 44,826
------------ ------------ ------------
NET INVESTMENT INCOME (LOSS) 122,501 84,531 (21,187)
------------ ------------ ------------
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Net realized losses on investments (196,168) (651,422) (1,320,502)
Net change in unrealized appreciation
(depreciation) on investments (1,821,329) (471,978) 44,850
------------ ------------ ------------
NET REALIZED AND UNREALIZED
LOSSES ON INVESTMENTS (2,017,497) (1,123,400) (1,275,652)
------------ ------------ ------------
NET DECREASE IN NET ASSETS
FROM OPERATIONS $ (1,894,996) $ (1,038,869) $ (1,296,839)
============ ============ ============
(a) Except for the Informed Investor Growth Fund, which represents the period
from the commencement of operations (April 3, 2008) through August 31,
2008.
The accompanying notes are an integral part of the financial statements.
53
====================================================================================================
MONTEAGLE FIXED INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS
====================================================================================================
YEAR YEAR
ENDED ENDED
AUGUST 31, AUGUST 31,
2008 2007
- ----------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income $ 1,296,394 $ 1,460,657
Net realized gains (losses) on investments 47,540 (207,393)
Net change in unrealized appreciation (depreciation) on investments 281,937 413,036
------------ ------------
Net increase in net assets from operations 1,625,871 1,666,300
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (1,296,394) (1,460,657)
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold 1,487,622 165,102
Reinvestment of distributions to shareholders 1,200,696 1,299,297
Payments for shares redeemed (3,569,831) (11,244,076)
------------ ------------
Net decrease in net assets from capital share transactions (881,513) (9,779,677)
------------ ------------
TOTAL DECREASE IN NET ASSETS (552,036) (9,574,034)
NET ASSETS
Beginning of year 32,873,457 42,447,491
------------ ------------
End of year $ 32,321,421 $ 32,873,457
------------ ------------
UNDISTRIBUTED NET INVESTMENT INCOME $ -- $ --
------------ ------------
SUMMARY OF CAPITAL SHARE ACTIVITY
Shares sold 146,181 16,621
Shares issued in reinvestment of distribution to shareholders 118,803 130,800
Shares redeemed (349,432) (1,130,889)
------------ ------------
Net decrease in shares outstanding (84,448) (983,468)
Shares outstanding, beginning of year 3,301,532 4,285,000
------------ ------------
Shares outstanding, end of year 3,217,084 3,301,532
------------ ------------
The accompanying notes are an integral part of the financial statements.
54
====================================================================================================
MONTEAGLE QUALITY GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
====================================================================================================
YEAR YEAR
ENDED ENDED
AUGUST 31, AUGUST 31,
2008 2007
- ----------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment loss $ (8,062) $ (12,268)
Net realized gains (losses) on investments (255,405) 1,228,161
Net change in unrealized appreciation (depreciation) on investments (377,494) 952,325
------------ ------------
Net increase (decrease) in net assets from operations (640,961) 2,168,218
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold 1,597,287 1,323,192
Payments for shares redeemed (1,624,942) (7,690,361)
------------ ------------
Net decrease in net assets from capital share transactions (27,655) (6,367,169)
------------ ------------
TOTAL DECREASE IN NET ASSETS (668,616) (4,198,951)
NET ASSETS
Beginning of year 14,871,371 19,070,322
------------ ------------
End of year $ 14,202,755 $ 14,871,371
============ ============
UNDISTRIBUTED NET INVESTMENT INCOME $ -- $ --
============ ============
SUMMARY OF CAPITAL SHARE ACTIVITY
Shares sold 183,296 155,368
Shares redeemed (186,641) (933,943)
------------ ------------
Net decrease in shares outstanding (3,345) (778,575)
Shares outstanding, beginning of year 1,682,412 2,460,987
------------ ------------
Shares outstanding, end of year 1,679,067 1,682,412
============ ============
The accompanying notes are an integral part of the financial statements.
55
====================================================================================================
MONTEAGLE LARGE CAP GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
====================================================================================================
YEAR YEAR
ENDED ENDED
AUGUST 31, AUGUST 31,
2008 2007
- ----------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment loss $ (62,258) $ (140,679)
Net realized gains (losses) on investments (112,406) 2,435,907
Net change in unrealized appreciation (depreciation) on investments (3,453,136) 2,866,943
------------ ------------
Net increase (decrease) in net assets from operations (3,627,800) 5,162,171
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold 432,054 693,722
Payments for shares redeemed (3,026,980) (5,658,504)
------------ ------------
Net decrease in net assets from capital share transactions (2,594,926) (4,964,782)
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (6,222,726) 197,389
NET ASSETS
Beginning of year 28,970,169 28,772,780
------------ ------------
End of year $ 22,747,443 $ 28,970,169
============ ============
UNDISTRIBUTED NET INVESTMENT INCOME $ -- $ --
============ ============
SUMMARY OF CAPITAL SHARE ACTIVITY
Shares sold 63,364 98,350
Shares redeemed (466,124) (857,723)
------------ ------------
Net decrease in shares outstanding (402,760) (759,373)
Shares outstanding, beginning of year 4,023,621 4,782,994
------------ ------------
Shares outstanding, end of year 3,620,861 4,023,621
============ ============
The accompanying notes are an integral part of the financial statements.
56
====================================================================================================
MONTEAGLE SELECT VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
====================================================================================================
YEAR YEAR
ENDED ENDED
AUGUST 31, AUGUST 31,
2008 2007
- ----------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income $ 122,501 $ 117,311
Net realized gains (losses) on investments (196,168) 1,900,152
Net change in unrealized appreciation (depreciation) on investments (1,821,329) 158,417
------------ ------------
Net increase (decrease) in net assets from operations (1,894,996) 2,175,880
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (113,679) (141,436)
From net realized gains on investments (1,690,778) (272,954)
------------ ------------
Decrease in net assets from distributions to shareholders (1,804,457) (414,390)
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold 309,853 292,716
Reinvestment of distributions to shareholders 1,624,984 366,669
Payments for shares redeemed (361,021) (4,858,737)
------------ ------------
Net increase (decrease) in net assets from capital share transactions 1,573,816 (4,199,352)
------------ ------------
TOTAL DECREASE IN NET ASSETS (2,125,637) (2,437,862)
NET ASSETS
Beginning of year 13,627,571 16,065,433
------------ ------------
End of year $ 11,501,934 $ 13,627,571
============ ============
UNDISTRIBUTED NET INVESTMENT INCOME $ 28,610 $ 19,788
============ ============
SUMMARY OF CAPITAL SHARE ACTIVITY
Shares sold 24,033 18,793
Shares issued in reinvestment of distributions to shareholders 124,478 24,394
Shares redeemed (29,164) (319,553)
------------ ------------
Net increase (decrease) in shares outstanding 119,347 (276,366)
Shares outstanding, beginning of year 869,719 1,146,085
------------ ------------
Shares outstanding, end of year 989,066 869,719
============ ============
The accompanying notes are an integral part of the financial statements.
57
====================================================================================================
MONTEAGLE VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
====================================================================================================
YEAR YEAR
ENDED ENDED
AUGUST 31, AUGUST 31,
2008 2007
- ----------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income $ 84,531 $ 239,567
Net realized gains (losses) on investments (651,422) 2,143,085
Net change in unrealized appreciation (depreciation) on investments (471,978) 1,391,679
------------ ------------
Net increase (decrease) in net assets from operations (1,038,869) 3,774,331
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (133,912) (358,645)
From net realized gains on investments (2,073,545) --
------------ ------------
Decrease in net assets from distributions to shareholders (2,207,457) (358,645)
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold 1,587,809 1,410,883
Reinvestment of distributions to shareholders 13,713 --
Payments for shares redeemed (2,032,009) (2,625,604)
------------ ------------
Net decrease in net assets from capital share transactions (430,487) (1,214,721)
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (3,676,813) 2,200,965
NET ASSETS
Beginning of year 23,094,200 20,893,235
------------ ------------
End of year $ 19,417,387 $ 23,094,200
============ ============
UNDISTRIBUTED NET INVESTMENT INCOME $ 22,200 $ 71,617
============ ============
SUMMARY OF CAPITAL SHARE ACTIVITY
Shares sold 91,414 71,852
Shares issued in reinvestment of distributions to shareholders 774 --
Shares redeemed (115,569) (146,355)
------------ ------------
Net decrease in shares outstanding (23,381) (74,503)
Shares oustanding, beginning of year 1,187,973 1,262,476
------------ ------------
Shares oustanding, end of year 1,164,592 1,187,973
============ ============
The accompanying notes are an integral part of the financial statements.
58
====================================================================================
MONTEAGLE INFORMED INVESTOR GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
====================================================================================
PERIOD
ENDED
AUGUST 31,
2008 (a)
- ------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment loss $ (21,187)
Net realized losses on investments (1,320,502)
Net change in unrealized appreciation (depreciation) on investments 44,850
------------
Net decrease in net assets from operations (1,296,839)
------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold 10,500,545
Payments for shares redeemed (26,506)
------------
Net increase in net assets from capital share transactions 10,474,039
------------
TOTAL INCREASE IN NET ASSETS 9,177,200
NET ASSETS
Beginning of period --
------------
End of period $ 9,177,200
============
UNDISTRIBUTED NET INVESTMENT INCOME $ --
============
SUMMARY OF CAPITAL SHARE ACTIVITY
Shares sold 1,043,027
Shares redeemed (2,601)
------------
Net increase in shares outstanding 1,040,426
Shares outstanding, beginning of period --
------------
Shares outstanding, end of period 1,040,426
============
(a) Represents the period from the commencement of operations (April 3, 2008)
through August 31, 2008.
The accompanying notes are an integral part of the financial statements.
59
===================================================================================================================
MONTEAGLE FIXED INCOME FUND
FINANCIAL HIGHLIGHTS
===================================================================================================================
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
2008 2007 2006 2005 2004
- -------------------------------------------------------------------------------------------------------------------
Net asset value at
beginning of year $ 9.96 $ 9.91 $ 10.38 $ 10.77 $ 10.96
---------- ---------- ---------- ---------- ----------
Income (loss) from
investment operations:
Net investment income 0.40 0.40 0.38(a) 0.38 0.41
Net realized and unrealized
gains (losses) on investments 0.09 0.05 (0.31) (0.20) (0.03)
---------- ---------- ---------- ---------- ----------
Total from investment operations 0.49 0.45 0.07 0.18 0.38
---------- ---------- ---------- ---------- ----------
Less distributions:
From net investment income (0.40) (0.40) (0.38) (0.38) (0.41)
From net realized gains
on investments -- -- (0.16) (0.19) (0.16)
---------- ---------- ---------- ---------- ----------
Total distributions (0.40) (0.40) (0.54) (0.57) (0.57)
---------- ---------- ---------- ---------- ----------
Net asset value at end of year $ 10.05 $ 9.96 $ 9.91 $ 10.38 $ 10.77
========== ========== ========== ========== ==========
Total return (b) 4.94% 4.68% 0.78% 1.72% 3.49%
========== ========== ========== ========== ==========
Net assets at end of year (000's) $ 32,321 $ 32,873 $ 42,447 $ 24,087 $ 26,423
========== ========== ========== ========== ==========
Ratio of operating expenses to
average net assets after
reimbursement/waiver of fees 1.01% 1.00% 1.00% 1.17% 1.15%
Ratio of operating expenses to
average net assets before
reimbursement/waiver of fees 1.01% 1.00% 1.13% 1.17% 1.15%
Ratio of net investment income to
average net assets after
reimbursement/waiver of fees 3.93% 4.12% 3.75% 3.63% 3.71%
Portfolio turnover rate 55% 19% 17% 58% 27%
(a) Net investment income per share is based on average shares outstanding
during the period.
(b) Total return is a measure of the change in value of an investment in the
Fund over the periods covered, which assumes any dividends or capital
gains distributions are reinvested in shares of the Fund. Returns shown do
not reflect the deduction of taxes a shareholder would pay on Fund
distributions or the redemption of Fund shares.
The accompanying notes are an integral part of the financial statements.
60
===============================================================================================================================
MONTEAGLE QUALITY GROWTH FUND
FINANCIAL HIGHLIGHTS
===============================================================================================================================
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR YEAR EIGHT MONTHS YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
AUGUST 31, AUGUST 31, AUGUST 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
2008 2007 2006 (a) 2005 2004 2003
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value at
beginning of period $ 8.84 $ 7.75 $ 7.90 $ 7.69 $ 7.40 $ 6.16
---------- ---------- ---------- ---------- ---------- ----------
Income (loss) from
investment operations:
Net investment
income (loss) (0.00) (0.01) (0.00)(b)(c) (0.00)(b)(d) 0.01(b) (0.01)(b)
Net realized and unrealized
gains (losses) on
investments (0.38) 1.10 (0.15) 0.21 0.29 1.25
---------- ---------- ---------- ---------- ---------- ----------
Total from investment
operations (0.38) 1.09 (0.15) 0.21 0.30 1.24
---------- ---------- ---------- ---------- ---------- ----------
Less distributions:
From net investment
income -- -- -- (0.00)(e) (0.01) (0.00)(f)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value at
end of period $ 8.46 $ 8.84 $ 7.75 $ 7.90 $ 7.69 $ 7.40
========== ========== ========== ========== ========== ==========
Total return (g) (4.30%) 14.06% (1.90%)(h) 2.77% 4.11% 20.20%
========== ========== ========== ========== ========== ==========
Net assets at end
of period (000's) $ 14,203 $ 14,871 $ 19,070 $ 19,278 $ 15,841 $ 13,140
========== ========== ========== ========== ========== ==========
Ratio of operating expenses
to average net assets
after reimbursement/
waiver of fees 1.25% 1.23% 1.26%(i) 1.26% 1.25% 1.25%
Ratio of operating expenses
to average net assets
before reimbursement/
waiver of fees 1.25% 1.23% 1.48%(i) 1.54% 1.69% 2.44%
Ratio of net investment
income (loss) to average
net assets after
reimbursement/
waiver of fees (0.05%) (0.08%) (0.08%)(i) (0.04%) 0.19% (0.11%)
Portfolio turnover rate 26% 72% 63% 92% 94% 88%
(a) Fund changed fiscal year end to August 31.
(b) Net investment income (loss) per share is based on average shares
outstanding during the period.
(c) Net investment loss per share was $(0.0042)
(d) Net investment loss per share was $(0.0031)
(e) Distributions per share were $(0.0032)
(f) Distributions per share were $(0.0038)
(g) Total return is a measure of the change in value of an investment in the
Fund over the periods covered, which assumes any dividends or capital
gains distributions are reinvested in shares of the Fund. Returns shown do
not reflect the deduction of taxes a shareholder would pay on Fund
distributions or the redemption of Fund shares.
(h) Not annualized.
(i) Annualized.
The accompanying notes are an integral part of the financial statements.
61
===================================================================================================================
MONTEAGLE LARGE CAP GROWTH FUND
FINANCIAL HIGHLIGHTS
===================================================================================================================
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
2008 2007 2006 2005 2004
- -------------------------------------------------------------------------------------------------------------------
Net asset value at
beginning of year $ 7.20 $ 6.02 $ 6.27 $ 5.43 $ 4.99
---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment loss (0.02) (0.03) (0.04)(a) (0.03) (0.04)
Net realized and unrealized
gains (losses) on investments (0.90) 1.21 (0.21) 0.87 0.49
---------- ---------- ---------- ---------- ----------
Total from investment operations (0.92) 1.18 (0.25) 0.84 0.45
---------- ---------- ---------- ---------- ----------
Less distributions:
From net investment income -- -- -- -- (0.01)
---------- ---------- ---------- ---------- ----------
Net asset value at end of year $ 6.28 $ 7.20 $ 6.02 $ 6.27 $ 5.43
========== ========== ========== ========== ==========
Total return (b) (12.78%) 19.60% (3.99%) 15.47% 8.89%
========== ========== ========== ========== ==========
Net assets at end of year (000's) $ 22,747 $ 28,970 $ 28,773 $ 31,361 $ 12,867
========== ========== ========== ========== ==========
Ratio of operating expenses to
average net assets after
reimbursement/waiver of fees 1.24% 1.21% 1.21% 1.36% 1.37%
Ratio of operating expenses to
average net assets before
reimbursement/waiver of fees 1.24% 1.21% 1.32% 1.36% 1.37%
Ratio of net investment loss
to average net assets after
reimbursement/waiver of fees (0.23%) (0.48%) (0.62%) (0.56%) (0.75%)
Portfolio turnover rate 64% 49% 76% 60% 67%
(a) Net investment loss per share is based on average shares outstanding
during the period.
(b) Total return is a measure of the change in value of an investment in the
Fund over the periods covered, which assumes any dividends or capital
gains distributions are reinvested in shares of the Fund. Returns shown do
not reflect the deduction of taxes a shareholder would pay on Fund
distributions or the redemption of Fund shares.
The accompanying notes are an integral part of the financial statements.
62
================================================================================================================================
MONTEAGLE SELECT VALUE FUND
FINANCIAL HIGHLIGHTS
================================================================================================================================
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR YEAR EIGHT MONTHS YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
AUGUST 31, AUGUST 31, AUGUST 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
2008 2007 2006 (a) 2005 2004 2003
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value at
beginning of period $ 15.67 $ 14.02 $ 13.48 $ 13.51 $ 11.84 $ 8.95
---------- ---------- ---------- ---------- ---------- ----------
Income (loss) from
investment operations:
Net investment income 0.13 0.13 0.12(b) 0.11(b) 0.12(b) 0.14(b)
Net realized and
unrealized gains (losses)
on investments (2.11) 1.98 0.50 0.08 1.67 2.90
---------- ---------- ---------- ---------- ---------- ----------
Total from investment
operations (1.98) 2.11 0.62 0.19 1.79 3.04
---------- ---------- ---------- ---------- ---------- ----------
Less distributions:
From net investment
income (0.12) (0.15) (0.08) (0.11) (0.12) (0.15)
From net realized gains
on investments (1.94) (0.31) -- (0.11) -- --
---------- ---------- ---------- ---------- ---------- ----------
Total distributions (2.06) (0.46) (0.08) (0.22) (0.12) (0.15)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value at
end of period $ 11.63 $ 15.67 $ 14.02 $ 13.48 $ 13.51 $ 11.84
========== ========== ========== ========== ========== ==========
Total return (c) (14.01%) 15.21% 4.60%(d) 1.45% 15.18% 34.24%
========== ========== ========== ========== ========== ==========
Net assets at end
of period (000's) $ 11,502 $ 13,628 $ 16,065 $ 16,120 $ 7,763 $ 3,985
========== ========== ========== ========== ========== ==========
Ratio of operating expenses
to average net assets
after reimbursement/
waiver of fees 1.26% 1.22% 1.26%(e) 1.26% 1.17% 1.25%
Ratio of operating expenses
to average net assets
before reimbursement/
waiver of fees 1.26% 1.22% 1.49%(e) 1.66% 1.78% 3.87%
Ratio of net investment
income to average net assets
after reimbursement/
waiver of fees 1.00% 0.82% 1.25%(e) 0.93% 0.98% 1.44%
Portfolio turnover rate 71% 88% 31% 71% 69% 26%
(a) Fund changed fiscal year end to August 31.
(b) Net investment income per share is based on average shares outstanding
during the period.
(c) Total return is a measure of the change in value of an investment in the
Fund over the periods covered, which assumes any dividends or capital
gains distributions are reinvested in shares of the Fund. Returns shown do
not reflect the deduction of taxes a shareholder would pay on Fund
distributions or the redemption of Fund shares.
(d) Not annualized.
(e) Annualized.
The accompanying notes are an integral part of the financial statements.
63
===================================================================================================================
MONTEAGLE VALUE FUND
FINANCIAL HIGHLIGHTS
===================================================================================================================
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
2008 2007 2006 2005 2004
- -------------------------------------------------------------------------------------------------------------------
Net asset value at
beginning of year $ 19.44 $ 16.55 $ 15.43 $ 12.16 $ 10.92
---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income 0.07 0.20 0.19 (a) 0.15 0.10
Net realized and unrealized
gains (losses) on investments (0.97) 2.98 1.07 3.16 1.33
---------- ---------- ---------- ---------- ----------
Total from investment operations (0.90) 3.18 1.26 3.31 1.43
---------- ---------- ---------- ---------- ----------
Less distributions:
From net investment income (0.11) (0.29) (0.14) (0.04) (0.10)
From net realized gains
on investments (1.76) -- -- -- (0.09)
---------- ---------- ---------- ---------- ----------
Total distributions (1.87) (0.29) (0.14) (0.04) (0.19)
---------- ---------- ---------- ---------- ----------
Net asset value at end of year $ 16.67 $ 19.44 $ 16.55 $ 15.43 $ 12.16
========== ========== ========== ========== ==========
Total return (b) (5.14%) 19.40% 8.25% 27.30% 13.10%
========== ========== ========== ========== ==========
Net assets at end of year (000's) $ 19,417 $ 23,094 $ 20,893 $ 20,123 $ 16,328
========== ========== ========== ========== ==========
Ratio of operating expenses to
average net assets after
reimbursement/waiver of fees 1.25% 1.22% 1.23% 1.37% 1.36%
Ratio of operating expenses to
average net assets before
reimbursement/waiver of fees 1.25% 1.22% 1.35% 1.37% 1.36%
Ratio of net investment income to
average net assets after
reimbursement/waiver of fees 0.40% 1.07% 1.14% 1.07% 0.85%
Portfolio turnover rate 0% 31% 28% 25% 35%
(a) Net investment income per share is based on average shares outstanding
during the period.
(b) Total return is a measure of the change in value of an investment in the
Fund over the periods covered, which assumes any dividends or capital
gains distributions are reinvested in shares of the Fund. Returns shown do
not reflect the deduction of taxes a shareholder would pay on Fund
distributions or the redemption of Fund shares.
The accompanying notes are an integral part of the financial statements.
64
================================================================================
MONTEAGLE INFORMED INVESTOR GROWTH FUND
FINANCIAL HIGHLIGHTS
================================================================================
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
PERIOD
ENDED
AUGUST 31,
2008 (a)
- --------------------------------------------------------------------------------
Net asset value at beginning of period $ 10.00
----------
Loss from investment operations:
Net investment loss (0.02)
Net realized and unrealized losses on investments (1.16)
----------
Total from investment operations (1.18)
----------
Net asset value at end of period $ 8.82
==========
Total return (b) (11.80%)(c)
==========
Net assets at end of period (000's) $ 9,177
==========
Ratio of operating expenses to average net assets 1.27%(d)
Ratio of net investment loss to average net assets (0.60%)(d)
Portfolio turnover rate 157%(c)
(a) Represents the period from the initial public offering (April 3, 2008)
through August 31, 2008.
(b) Total return is a measure of the change in value of an investment in the
Fund over the period covered, which assumes any dividends or capital gains
distributions are reinvested in shares of the Fund. The return shown does
not reflect the deduction of taxes a shareholder would pay on Fund
distributions or the redemption of Fund shares.
(c) Not annualized.
(d) Annualized.
The accompanying notes are an integral part of the financial statements.
65
================================================================================
MONTEAGLE FUNDS
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2008
================================================================================
1. ORGANIZATION
Monteagle Funds ("the Trust") was organized as a business trust under the laws
of the State of Delaware on November 26, 1997 as Memorial Funds. The Trust
changed its name to Monteagle Funds in July, 2006.
The Trust is registered with the Securities and Exchange Commission ("SEC") as
an open-end, management investment company under the Investment Company Act of
1940. The Trust is authorized by its Declaration of Trust to issue an unlimited
number of shares of beneficial interest in its series. The Trust currently
consists of the following series:
Monteagle Fixed Income Fund
Monteagle Quality Growth Fund (formerly known as Memorial Growth Equity
Fund)
Monteagle Large Cap Growth Fund
Monteagle Select Value Fund (formerly known as Memorial Value Equity Fund)
Monteagle Value Fund
Monteagle Informed Investor Growth Fund (each a "Fund" and collectively
the "Funds").
Each Fund is a diversified series of Monteagle Funds. The principal investment
objective of Monteagle Fixed Income Fund ("Fixed Income Fund") is total return.
The principal investment objective of each of Monteagle Quality Growth Fund
("Quality Growth Fund"), Monteagle Large Cap Growth Fund ("Large Cap Growth
Fund"), Monteagle Select Value Fund ("Select Value Fund"), Monteagle Value Fund
("Value Fund") and Monteagle Informed Investor Growth Fund ("Informed Investor
Growth Fund") is long-term capital appreciation.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the Funds' significant accounting policies:
SECURITIES 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 or the official closing 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 average of the last bid and ask price is used. If no average price
is available, the last bid price is used. Debt securities are generally traded
in the over-the-counter market and are valued at a price deemed best to reflect
their values as quoted by dealers who make markets in those securities or by an
independent pricing source. In the absence of readily available market
quotations, securities are valued at fair value pursuant to procedures adopted
by the Board of Trustees. At August 31, 2008, no securities were valued at fair
value. Securities with maturities of 60 days or less are valued at amortized
cost. The ability of issuers of debt securities held by the Funds to meet their
obligations may be affected by economic and political developments in a specific
country or region.
SHARE VALUATION -- Shares of each Fund are sold at net asset value. To calculate
the net asset value, each Fund's assets are valued and totaled, liabilities are
subtracted, and the balance is divided by the number of shares outstanding. The
offering price and redemption price per share are equal to the net asset value
per share for each Fund.
66
================================================================================
MONTEAGLE FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
SECURITY TRANSACTIONS -- Security transactions are accounted for on trade date
and realized gains and losses on investments sold are determined on a specific
identification basis.
INTEREST AND DIVIDEND INCOME -- Interest income is accrued as earned. Dividends
on securities held by the Funds are recorded on the ex-dividend date. Discounts
and premiums on securities purchased are amortized over the lives of the
respective securities.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Distributions of net investment
income to shareholders are declared daily and paid monthly by Fixed Income Fund.
Net investment income distributions, if any, for Quality Growth Fund, Large Cap
Growth Fund, Select Value Fund, Value Fund and Informed Investor Growth Fund are
declared and paid quarterly at the discretion of each Fund's adviser. Net
capital gains for the Funds, if any, are distributed to shareholders at least
annually. Distributions to shareholders, which are determined in accordance with
income tax regulations, are recorded on the ex-dividend date. Withholding taxes
on foreign dividends have been provided for in accordance with the Funds'
understanding of the applicable country's tax rules and rates.
The tax character of distributions paid during the year ended August 31, 2008
was as follows:
ORDINARY LONG-TERM
INCOME CAPITAL GAIN TOTAL
- --------------------------------------------------------------------------------
Fixed Income $1,296,394 $ -- $1,296,394
Select Value Fund 571,431 1,233,026 1,804,457
Value Fund 909,651 1,297,806 2,207,457
- --------------------------------------------------------------------------------
The tax character of distributions paid during the year ended August 31, 2007
was as follows:
ORDINARY LONG-TERM
INCOME CAPITAL GAIN TOTAL
- --------------------------------------------------------------------------------
Fixed Income $1,460,657 $ -- $1,460,657
Select Value Fund 274,744 139,646 414,390
Value Fund 358,645 -- 358,645
- --------------------------------------------------------------------------------
Quality Growth Fund, Large Cap Growth Fund and Informed Investor Growth Fund
paid no distributions during the years ended August 31, 2008 and August 31,
2007.
ESTIMATES -- These financial statements are prepared in accordance with
accounting principles generally accepted in the United States of America, which
require 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
increases and decreases in net assets from operations during the reporting
period. Actual results could differ from those estimates.
67
================================================================================
MONTEAGLE FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
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 fair value must always exceed
the market value of the securities loaned plus accrued interest. Gain or loss in
the fair value of the securities loaned that may occur during the term of the
loan is reflected in the net asset value of the Funds. The Funds have the right
under the security lending agreement to recover the securities from the borrower
on demand. There were no securities loaned at August 31, 2008.
COMMON EXPENSES -- Common expenses of the Trust are allocated among the Funds
within the Trust based on relative net assets of each Fund or the nature of the
services performed and the relative applicability to each Fund.
3. ADVISORY, SERVICING FEES AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AGREEMENT
Parkway Advisors, L.P. ("Parkway") and Nashville Capital Corporation ("Nashville
Capital"), (each an "Adviser" and, collectively, the "Advisers") serve as the
investment advisers to the Funds. Parkway is the Adviser for Quality Growth Fund
and Select Value Fund and Nashville Capital is the Adviser for Fixed Income
Fund, Large Cap Growth Fund, Value Fund and Informed Investor Growth Fund.
Subject to the general oversight of the Board of Trustees, the Advisers are
responsible for, among other things, developing a continuing investment program
for the Funds in accordance with their investment objectives, reviewing the
investment strategies and policies of the Funds and advising the Board of
Trustees on the selection of sub-advisers. Each Fund is authorized to pay its
Adviser a fee based on average daily net assets at the following annual rates:
INFORMED
FIXED QUALITY LARGE CAP SELECT INVESTOR
INCOME GROWTH GROWTH VALUE VALUE GROWTH
ASSETS FUND FUND FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------
Up to and
including $25 million 0.965% 1.20% 1.20% 1.20% 1.20% 1.20%
From $25 up to and
including $50 million 0.965% 1.115% 1.115% 1.115% 1.115% 1.115%
From $50 up to and
including $100 million 0.845% 0.975% 0.975% 0.975% 0.975% 0.975%
Over $100 million 0.775% 0.875% 0.875% 0.875% 0.875% 0.875%
Under the terms of the Funds' advisory agreement, the Advisers oversee the
management of each Fund's investments and pay all of the operating expenses of
each Fund except: (i) costs of membership in trade associations; (ii) any
expenses recouped by the Advisers; (iii) SEC registration fees and related
expenses; (iv) any non-interested Trustee fees; (v) costs of travel for
non-interested Trustees; (vi) costs associated with seminars, conventions or
trade education for
68
================================================================================
MONTEAGLE FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
non-interested Trustees; (vii) 50% of the compensation amount approved by
Trustees specifically for the Chief Compliance Officer's services for the Trust
attributable to the Funds managed by the Advisers; and (viii) any extraordinary
Trust expenses.
For the year ended August 31, 2008, the amounts earned by and payable to the
Advisers were as follows:
ADVISORY
ADVISORY FEES PAYABLE
FEES EARNED AS OF 8/31/2008
- --------------------------------------------------------------------------------
Fixed Income Fund $ 318,232 $ 26,400
Quality Growth Fund $ 179,833 $ 14,478
Large Cap Growth Fund $ 317,037 $ 23,185
Select Value Fund $ 147,621 $ 11,578
Value Fund $ 253,154 $ 19,668
Informed Investor Growth Fund $ 41,895 $ 9,554
FIXED INCOME FUND -- Nashville Capital has retained Howe & Rusling Inc. ("H&R")
to serve as the sub-adviser to Fixed Income Fund. Nashville Capital has agreed
to pay H&R an annual advisory fee of 0.30% of average daily net assets up to $25
million, 0.25% of such assets from $25 million up to $50 million, and 0.20% of
such assets over $50 million.
QUALITY GROWTH FUND -- Parkway has retained Davis Hamilton Jackson & Associates
("DHJA") to serve as the sub-adviser to Quality Growth Fund. Parkway has agreed
to pay DHJA an annual advisory fee of 0.30% of average daily net assets.
LARGE CAP GROWTH FUND -- Nashville Capital has retained Northstar Capital
Management ("Northstar") to serve as the sub-adviser to Large Cap Growth Fund.
Nashville Capital has agreed to pay Northstar an annual advisory fee of 0.50% of
average daily net assets.
VALUE FUND -- Nashville Capital has retained Robinson Investment Group, Inc.
("Robinson") to serve as the sub-adviser to Value Fund. Nashville Capital has
agreed to pay Robinson an annual advisory fee of 0.60% of average daily net
assets up to $25 million, 0.45% of such assets from $25 million up to $50
million, 0.35% of such assets from $50 million up to $100 million, and 0.30% of
such assets over $100 million.
INFORMED INVESTOR GROWTH FUND -- Nashville Capital has retained T.H. Fitzgerald
& Co. ("T.H. Fitzgerald") to serve as the sub-adviser to Informed Investor
Growth Fund. Nashville Capital has agreed to pay T.H. Fitzgerald an annual
advisory fee of 0.65% of average daily net assets up to $25 million, 0.60% of
such assets from $25 million up to $50 million, 0.50% of such assets from $50
million up to $100 million, and 0.40% of such assets over $100 million.
Two officers of Parkway are also officers of the Trust; one of them is also an
interested Trustee.
69
================================================================================
MONTEAGLE FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
MUTUAL FUND SERVICES AGREEMENT
Pursuant to a Mutual Fund Services Agreement between the Trust and Ultimus Fund
Solutions, LLC ("Ultimus"), Ultimus provides administrative, fund accounting and
pricing, and transfer agent and shareholder services to the Funds. For these
services, Ultimus receives an annual base fee of $250,000, plus an asset-based
fee at the annual rate of 0.15% of the Funds' aggregate average daily net assets
from $200 million to $300 million; 0.125% of such assets from $300 million to
$400 million; and 0.10% of such assets in excess of $400 million. The fees
payable to Ultimus are paid by the Advisers (not the Funds).
DISTRIBUTION AGREEMENT
Pursuant to the terms of a Distribution Agreement with the Trust, Ultimus Fund
Distributors, LLC (the "Distributor") serves as the Funds' principal
underwriter. The Distributor receives annual compensation of $6,000 for such
services. The fees payable to the Distributor are paid by the Advisers (not the
Funds).
COMPLIANCE SERVICES
An employee of Parkway is the Chief Compliance Officer (the "CCO") of the Trust.
The CCO provides ongoing regulatory compliance consulting, monitoring and
reporting services for the Trust. Effective January 11, 2008, each Fund pays
$5,000 annually to Parkway for providing CCO services.
4. SECURITIES TRANSACTIONS
During the year ended August 31, 2008, cost of purchases and proceeds from sales
and maturities of investment securities, excluding short-term investments and
U.S. government securities, were as follows:
INFORMED
FIXED QUALITY LARGE CAP SELECT INVESTORS
INCOME GROWTH GROWTH VALUE VALUE GROWTH
FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------
Purchases of
investment securities $ 5,747,244 $ 4,061,493 $16,601,310 $ 8,262,011 $ -- $20,799,088
=========== =========== =========== =========== =========== ===========
Proceeds from sales of
investment securities $ 4,090,668 $ 3,774,562 $18,068,336 $ 9,037,042 $ 2,243,337 $11,119,401
=========== =========== =========== =========== =========== ===========
5. TAX MATTERS
It is each Fund's policy to comply with the special provisions of Subchapter M
of the Internal Revenue Code applicable to regulated investment companies. As
provided therein, in any fiscal year in which a Fund so qualifies and
distributes at least 90% of its taxable income, such Fund (but not the
shareholders) will be relieved of federal income tax on the income distributed.
Accordingly, no provision for income taxes has been made.
70
================================================================================
MONTEAGLE FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also each Fund's intention to declare as dividends
in each calendar year at least 98% of its net investment income and 98% of its
net realized capital gains plus undistributed amounts from prior years.
The tax character of distributable earnings (deficit) at August 31, 2008 was as
follows:
INFORMED
FIXED QUALITY LARGE CAP SELECT INVESTORS
INCOME GROWTH GROWTH VALUE VALUE GROWTH
FUND FUND FUND FUND FUND FUND
- -------------------------------------------------------------------------------------------------------------------
Accumulated
undistributed
ordinary income $ -- $ -- $ -- $ 28,635 $ 22,200 $ --
Capital loss
carryforwards (1,482,725) (2,724,059) (4,812,876) -- -- --
Post-October losses -- (217,829) (261,358) (208,268) (655,690) (1,282,654)
Net unrealized
appreciation
(depreciation) 95,644 1,107,809 2,373,826 (582,632) 6,353,691 7,002
----------- ----------- ----------- ----------- ----------- -----------
Total distributable
earnings (deficit) $(1,387,081) $(1,834,079) $(2,700,408) $ (762,265) $ 5,720,201 $(1,275,652)
=========== =========== =========== =========== =========== ===========
As of August 31, 2008, the following Funds had the following capital loss
carryforwards for federal income tax purposes. These capital loss carryforwards
may be utilized in future years to offset net realized capital gains, if any,
prior to distributing such gains to shareholders.
AMOUNT EXPIRATION DATE
- --------------------------------------------------------------------------------
Fixed Income Fund $ 367,674 2009
100,359 2010
698,715 2012
86,568 2013
168,181 2015
61,228 2016
-----------
$ 1,482,725
===========
Quality Growth Fund $ 234,908 2009
1,658,403 2010
471,453 2011
296,216 2012
63,079 2016
-----------
$ 2,724,059
===========
71
================================================================================
MONTEAGLE FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
AMOUNT EXPIRATION DATE
- --------------------------------------------------------------------------------
Large Cap Growth Fund $ 2,182,811 2011
2,165,647 2012
309,209 2013
155,209 2014
-----------
$ 4,812,876
===========
Large Cap Growth Fund utilized capital loss carryforwards of $148,952 during the
year ended August 31, 2008.
In addition, Quality Growth Fund, Large Cap Growth Fund, Select Value Fund,
Value Fund and Informed Investor Growth Fund had realized capital losses of
$217,829, $261,358, $208,268, $655,690 and $1,282,654, respectively, during the
period November 1, 2007 through August 31, 2008, which are treated for federal
income tax purposes as arising during the Funds' tax year ending August 31,
2009. These "post-October losses" may be utilized in future years to offset net
realized capital gains prior to distributing such gains to shareholders.
The following information is based upon the federal income tax cost of the
investment securities as of August 31, 2008:
INFORMED
FIXED QUALITY LARGE CAP SELECT INVESTORS
INCOME GROWTH GROWTH VALUE VALUE GROWTH
FUND FUND FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------
Federal tax cost $ 32,831,541 $ 13,114,320 $ 20,376,799 $ 12,065,340 $ 13,037,294 $ 9,360,844
============ ============ ============ ============ ============ ============
Gross unrealized
appreciation $ 396,067 $ 2,041,352 $ 3,180,877 $ 826,109 $ 6,794,871 $ 344,985
Gross unrealized
depreciation (300,423) (933,543) (807,051) (1,408,741) (441,180) (337,983)
------------ ------------ ------------ ------------ ------------ ------------
Net unrealized
appreciation
(depreciation) $ 95,644 $ 1,107,809 $ 2,373,826 $ (582,632) $ 6,353,691 $ 7,002
============ ============ ============ ============ ============ ============
The difference between the federal income tax cost of portfolio investments and
the financial statement cost for Quality Growth Fund and Informed Investors
Growth Fund is due to certain timing differences in the recognition of capital
losses under income tax regulations and accounting principles generally accepted
in the United States of America. These "book/tax" differences are temporary in
nature and are due to the tax deferral of losses on wash sales.
For the year ended August 31, 2008, Quality Growth Fund, Large Cap Growth Fund
and Informed Investor Growth Fund reclassified $8,062, $62,258 and $21,187,
respectively, of net investment loss against paid-in capital on the Statements
of Assets and Liabilities. Additionally, Value Fund reclassified $36 of
distributions in excess of net realized gains against undistributed net
investment
72
================================================================================
MONTEAGLE FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
income on the Statement of Assets and Liabilities. Such reclassifications, the
result of permanent differences between the financial statement and income tax
reporting requirements, have no effect on the Funds' net assets or net asset
value per share.
Effective February 29, 2008, the Funds adopted Financial Accounting Standards
Board ("FASB") Interpretation No. 48 ("FIN 48"), "Accounting for Uncertainty in
Income Taxes," a clarification of FASB No. 109, "Accounting for Income Taxes."
FIN 48 establishes financial reporting rules regarding recognition and
measurement of tax positions taken or expected to be taken on a tax return. FIN
48 was applied to all open tax years as of the effective date. The adoption of
FIN 48 had no impact on the Funds' net assets or results of operations.
As of and during the year ended August 31, 2008, the Funds did not have a
liability for any unrecognized tax benefits. The Funds recognize interest and
penalties, if any, related to unrecognized tax benefits as income tax expense in
the Statements of Operations. Additionally, during the year ended August 31,
2008, the Funds did not incur any interest or penalties.
6. CONTROL OWNERSHIP
The beneficial ownership, either directly or indirectly, of more than 25% of the
voting securities of a Fund creates presumption of control of the Fund under
Section 2(a)(9) of the Investment Company Act of 1940. As of August 31, 2008,
the following shareholders held, for the benefit of their customers, the
following percentages of the outstanding shares of each Fund:
PERCENT OWNED AS OF
SHAREHOLDER AUGUST 31, 2008
- --------------------------------------------------------------------------------
Fixed Income Fund Farmers and Merchant Corp. 62%
Hubco Regions Financial Corp. 36%
Quality Growth Fund Charles Schwab & Co., Inc. 52%
Hubco Regions Financial Corp. 33%
Large Cap Growth Fund Farmers and Merchant Corp. 97%
Select Value Fund Hubco Regions Financial Corp. 83%
Value Fund Farmers and Merchant Corp. 91%
Informed Investors Growth Fund Farmers and Merchant Corp. 98%
7. CONTINGENCIES AND COMMITMENTS
The Funds indemnify the Trust's officers and Trustees for certain liabilities
that might arise from the performance of their duties to the Funds.
Additionally, in the normal course of business the Funds enter into contracts
that contain a variety of representations and warranties and which provide
general indemnifications. Each Fund's maximum exposure under these arrangements
is unknown, as this would involve future claims that may be made against the
Funds that have not yet occurred. However, based on experience, the Funds expect
the risk of loss to be remote.
73
================================================================================
MONTEAGLE FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
8. SECTOR RISK
When the Funds emphasize one or more economic sectors, it may be more
susceptible to the financial, market, or economic events affecting the
particular issuers and industries in which they invest than funds that do not
emphasize particular sectors. The more a fund diversifies, the more it spreads
risk and potentially reduces the risks of loss and volatility.
9. NEW ACCOUNTING PRONOUNCEMENT
In September 2006, the FASB issued Statement on Financial Accounting Standards
("SFAS") No. 157 "Fair Value Measurements." This standard establishes a single
authoritative definition of fair value, sets out a framework for measuring fair
value and requires additional disclosures about fair value measurements. SFAS
No. 157 applies to fair value measurements already required or permitted by
existing standards. SFAS No. 157 is effective for financial statements issued
for fiscal years beginning after November 15, 2007 and interim periods within
those fiscal years. The changes to current generally accepted accounting
principles from the application of SFAS No. 157 relate to the definition of fair
value, the methods used to measure fair value, and the expanded disclosures
about fair value measurements. As of August 31, 2008, the Funds do not believe
the adoption of SFAS No. 157 will impact the amounts reported in the financial
statements, however, additional disclosures will be required about the inputs
used to develop the measurements and the effect of certain of the measurements
reported on the statement of changes in net assets for a fiscal period.
74
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MONTEAGLE FUNDS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
================================================================================
To The Shareholders and Board of Trustees of
Monteagle Funds
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of Monteagle Funds (the "Funds"), comprising
Monteagle Fixed Income Fund, Monteagle Quality Growth Fund, Monteagle Large Cap
Growth Fund, Monteagle Select Value Fund, Monteagle Value Fund, and Monteagle
Informed Investor Growth Fund as of August 31, 2008, and the related statements
of operations for the year then ended, the statements of changes in net assets
for each of the two years in the period then ended, and the financial highlights
for each of the five periods then ended for Monteagle Fixed Income Fund,
Monteagle Quality Growth Fund, Monteagle Large Cap Growth Fund, Monteagle Select
Value Fund, and Monteagle Value Fund and the statements of operations and
changes in net assets and the financial highlights for the period April 3, 2008
(commencement of operations) through August 31, 2008 for Monteagle Informed
Investor Growth Fund. These financial statements and financial highlights are
the responsibility of Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. The financial highlights for the periods indicated prior to December 31,
2004 for Monteagle Quality Growth Fund and Monteagle Select Value Fund were
audited by another independent accounting firm which expressed unqualified
opinions on those highlights.
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
securities owned as of August 31, 2008 by correspondence with the Funds'
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
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of each
of the funds constituting Monteagle Funds, as of August 31, 2008, the results of
their operations for the period then ended, the changes in their net assets for
each of the two periods then ended, and their financial highlights for each of
the five periods then ended, in conformity with accounting principles generally
accepted in the United States of America.
COHEN FUND AUDIT SERVICES, LTD.
Westlake, Ohio
October 20, 2008
75
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MONTEAGLE FUNDS
OTHER INFORMATION (UNAUDITED)
================================================================================
PROXY POLICIES -- The Trust has adopted Proxy Voting Polices and Procedures
under which the Funds vote proxies related to securities held by the Funds. A
description of the Funds' policies and procedures is available without charge,
upon request, by calling the Funds toll free at 1-888-263-5593, or on the SEC
website at http://www.sec.gov.
In addition, the Funds are required to file Form N-PX, with their complete
voting record for the 12 months ended June 30th, no later than August 31st of
each year. The Funds' Form N-PX is available without charge, upon request, by
calling the Funds toll free at 1-888-263-5593, or on the SEC's website at
http://www.sec.gov.
N-Q FILING -- The SEC has adopted the requirement that all mutual funds file a
complete schedule of investments with the SEC for their first and third fiscal
quarters on Form N-Q. For the Monteagle Funds, this would be for the fiscal
quarters ending November 30 and May 31. The Form N-Q filing must be made within
60 days of the end of the quarter. The Funds' Forms N-Q are available on the
SEC's website at http://www.sec.gov., or they may be reviewed and copied at the
SEC's Public Reference Room in Washington, DC (call 1-800-732-0330 for
information on the operation of the Public Reference Room).
FEDERAL TAX INFORMATION (UNAUDITED)
================================================================================
For the fiscal year ended August 31, 2008 certain dividends paid by Fixed Income
Fund, Select Value Fund and Value Fund may be subject to a maximum tax rate of
15%, as provided for by the Jobs and Growth Tax Relief Reconciliation Act of
2003. The Funds intend to designate up to a maximum amount of $1,296,394,
$571,431 and $909,651, respectively, as taxed at a maximum rate of 15%.
Additionally, Select Value Fund and Value Fund intend to designate $1,233,026
and $1,297,806, respectively, as long-term gain distributions. Complete
information will be computed and reported in conjunction with your 2008 Form
1099-DIV.
76
================================================================================
MONTEAGLE FUNDS
ABOUT YOUR FUNDS' EXPENSES (UNAUDITED)
================================================================================
We believe it is important for you to understand the impact of costs on your
investment. As a shareholder of the Funds, you incur two types of costs: (1)
transaction costs and (2) ongoing costs, including management fees and other
Fund expenses. The following examples are intended to help you understand your
ongoing costs (in dollars) of investing in the Funds and to compare these costs
with the ongoing costs of investing in other mutual funds.
A mutual fund's ongoing costs are expressed as a percentage of its average net
assets. This figure is known as the expense ratio. The expenses in the tables
below are based on an investment of $1,000 made at the beginning of the most
recent semi-annual period (March 1, 2008) and held until the end of the period
(August 31, 2008).
The tables that follow illustrate each Fund's costs in two ways:
ACTUAL FUND RETURN - This section helps you to estimate the actual expenses that
you paid over the period. The "Ending Account Value" shown is derived from each
Fund's actual return, and the third column shows the dollar amount of operating
expenses that would have been paid by an investor who started with $1,000 in the
Funds. You may use the information here, together with the amount you invested,
to estimate the expenses that you paid over the period.
To do so, simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
given for the Funds under the heading "Expenses Paid During Period."
HYPOTHETICAL 5% RETURN - This section is intended to help you compare the Funds'
costs with those of other mutual funds. It assumes that each Fund had an annual
return of 5% before expenses during the period shown, but that the expense ratio
is unchanged. In this case, because the return used is not the Funds' actual
returns, the results do not apply to your investment. The example is useful in
making comparisons because the Securities and Exchange Commission requires all
mutual funds to calculate expenses based on a 5% return. You can assess each
Fund's costs by comparing this hypothetical example with the hypothetical
examples that appear in shareholder reports of other funds.
Note that expenses shown in the table are meant to highlight and help you
compare ongoing costs only. The Funds do not charge sales loads or redemption
fees.
The calculations assume no shares were bought or sold during the period. Your
actual costs may have been higher or lower, depending on the amount of your
investment and the timing of any purchases or redemptions.
77
================================================================================
MONTEAGLE FUNDS
ABOUT YOUR FUNDS' EXPENSES (UNAUDITED) (CONTINUED)
================================================================================
More information about the Funds' expenses, including historical annual expense
ratios, can be found in this report. For additional information on operating
expenses and other shareholder costs, please refer to each Fund's Prospectus.
FIXED INCOME FUND
- --------------------------------------------------------------------------------
BEGINNING ENDING
ACCOUNT VALUE ACCOUNT VALUE EXPENSES PAID
MARCH 1, 2008 AUGUST 31, 2008 DURING PERIOD*
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $ 997.60 $ 5.07
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,020.06 $ 5.13
- --------------------------------------------------------------------------------
* Expenses are equal to Fixed Income Fund's annualized expense ratio of
1.01% for the period, multiplied by the average account value over the
period, multiplied by 184/366 (to reflect the one-half year period).
QUALITY GROWTH FUND
- --------------------------------------------------------------------------------
BEGINNING ENDING
ACCOUNT VALUE ACCOUNT VALUE EXPENSES PAID
MARCH 1, 2008 AUGUST 31, 2008 DURING PERIOD*
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,008.30 $ 6.41
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,018.75 $ 6.44
- --------------------------------------------------------------------------------
* Expenses are equal to Quality Growth Fund's annualized expense ratio of
1.27% for the period, multiplied by the average account value over the
period, multiplied by 184/366 (to reflect the one-half year period).
LARGE CAP GROWTH FUND
- --------------------------------------------------------------------------------
BEGINNING ENDING
ACCOUNT VALUE ACCOUNT VALUE EXPENSES PAID
MARCH 1, 2008 AUGUST 31, 2008 DURING PERIOD*
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $ 981.20 $ 6.23
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,018.85 $ 6.34
- --------------------------------------------------------------------------------
* Expenses are equal to Large Cap Growth Fund's annualized expense ratio of
1.25% for the period, multiplied by the average account value over the
period, multiplied by 184/366 (to reflect the one-half year period).
78
================================================================================
MONTEAGLE FUNDS
ABOUT YOUR FUNDS' EXPENSES (UNAUDITED) (CONTINUED)
================================================================================
SELECT VALUE FUND
- --------------------------------------------------------------------------------
BEGINNING ENDING
ACCOUNT VALUE ACCOUNT VALUE EXPENSES PAID
MARCH 1, 2008 AUGUST 31, 2008 DURING PERIOD*
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $ 987.10 $ 6.39
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,018.70 $ 6.50
- --------------------------------------------------------------------------------
* Expenses are equal to Select Value Fund's annualized expense ratio of
1.28% for the period, multiplied by the average account value over the
period, multiplied by 184/366 (to reflect the one-half year period).
VALUE FUND
- --------------------------------------------------------------------------------
BEGINNING ENDING
ACCOUNT VALUE ACCOUNT VALUE EXPENSES PAID
MARCH 1, 2008 AUGUST 31, 2008 DURING PERIOD*
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $ 983.20 $ 6.28
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,018.80 $ 6.39
- --------------------------------------------------------------------------------
* Expenses are equal to Value Fund's annualized expense ratio of 1.26% for
the period, multiplied by the average account value over the period,
multiplied by 184/366 (to reflect the one-half year period).
INFORMED INVESTOR GROWTH FUND
- --------------------------------------------------------------------------------
BEGINNING ENDING
ACCOUNT VALUE ACCOUNT VALUE EXPENSES PAID
MARCH 1, 2008 AUGUST 31, 2008 DURING PERIOD*
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $ 882.00 $ 4.93
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,015.39 $ 5.28
- --------------------------------------------------------------------------------
* Expenses are equal to Informed Investor Growth Fund's annualized expense
ratio of 1.27% for the period, multiplied by the average account value
over the period, multiplied by 151/366 (to reflect the period since
inception).
79
================================================================================
MONTEAGLE FUNDS
TRUSTEES AND OFFICERS OF THE TRUST (UNAUDITED)
================================================================================
The business and affairs of the Funds are managed under the direction of the
Board of Trustees in compliance with the laws of the state of Delaware. The
names of the Trustees and executive officers of the Trust, their position with
the Trust, address, age and principal occupations during the past five years are
set forth below. Trustees have no official term of office and generally serve
until they resign, or are not reelected.
INTERESTED TRUSTEES
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER
OF TRUST OTHER
POSITION LENGTH PORTFOLIOS DIRECTORSHIPS
NAME, ADDRESS HELD WITH OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN HELD BY
AND AGE TRUST SERVED DURING THE PAST 5 YEARS BY TRUSTEE TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------------
CARL CLAYTON PETERSON* President Since Parkway Advisors, L.P. CEO from 04/01 to 6 None
6550 Directors Pkwy, 10/07/02 present; Parkway Advisors Group, Inc. and
Abilene, Texas 79606 Trustee Since Parkway Advisors Holdings, Inc. President from
Age 48 11/29/02 04/01 to present; Directors Investment Group,
Inc., Director 04/03 to present.
- ------------------------------------------------------------------------------------------------------------------------------------
DISINTERESTED TRUSTEES
- ------------------------------------------------------------------------------------------------------------------------------------
LARRY JOE ANDERSON Trustee Since Certified Public Accountant, Anderson & West, 6 None
4208 College Avenue, 11/29/02 P.C. January 1985 to present.
Snyder, Texas 79549
Age 60
- ------------------------------------------------------------------------------------------------------------------------------------
BRIAN JOSEPH GREEN Trustee Since Restauranteur, Cypress Street Station, 6 None
158 Cypress, 11/29/02 February 1993 to present.
Abilene, Texas 79601
Age 50
- ------------------------------------------------------------------------------------------------------------------------------------
CHARLES MICHAEL KINARD Trustee Since Retired; Senior Vice-President and Trust 6 None
1725 Richland Dr., 11/29/02 Officer, First National Bank of Abilene to
Abilene, Texas 79603 December 1998.
Age 65
- ------------------------------------------------------------------------------------------------------------------------------------
* Mr. Peterson, as an affiliated person of Parkway Advisors, L.P., is an
"interested person" of the Trust within the meaning of Section 2(a)(19) of
the Investment Company Act of 1940.
80
================================================================================
MONTEAGLE FUNDS
TRUSTEES AND OFFICERS OF THE TRUST (UNAUDITED) (CONTINUED)
================================================================================
- -----------------------------------------------------------------------------------------------------------------------
EXECUTIVE OFFICERS
- -----------------------------------------------------------------------------------------------------------------------
POSITION LENGTH
NAME, ADDRESS HELD WITH OF TIME PRINCIPAL OCCUPATION(S)
AND AGE TRUST SERVED DURING THE PAST 5 YEARS
- -----------------------------------------------------------------------------------------------------------------------
PAUL B. ORDONIO Vice Since Parkway Advisors, L.P., Vice President & Counsel
6550 Directors Parkway President/ 10/07/02 from 08/02 to present; Parkway Advisors Group,
Abilene, Texas 79606 Secretary/ Inc., Vice President and Counsel from 08/02 to
Age 40 Chief present; Aftermath Consulting, Inc., Director from
Compliance 05/02 to present; P.O. Properties, Inc., Vice
Officer President from 06/99 to present; WordWise Document
Services, LLC, President from 08/97 to present;
Ordonio & Assoc., President from 11/97 to present.
- -----------------------------------------------------------------------------------------------------------------------
ROBERT G. DORSEY Vice Since Ultimus Fund Solutions, LLC, Managing Director;
225 Pictoria Drive, Suite 450 President 02/2007 Ultimus Fund Distributiors, LLC, Managing Director.
Cincinnati, Ohio 45246
Age 51
- -----------------------------------------------------------------------------------------------------------------------
MARK J. SEGER Treasurer Since Ultimus Fund Solutions, LLC, Managing Director;
225 Pictoria Drive, Suite 450 02/2007 Ultimus Fund Distributiors, LLC, Managing Director.
Cincinnati, Ohio 45246
Age 46
- -----------------------------------------------------------------------------------------------------------------------
81
================================================================================
MONTEAGLE FUNDS
BOARD APPROVAL OF INVESTMENT SUB-ADVISORY AGREEMENT FOR
MONTEAGLE LARGE CAP GROWTH FUND (UNAUDITED)
================================================================================
On April 17, 2008, the Board of Trustees (the "Board") of the Monteagle Funds
(the "Trust") met and evaluated the Sub-Advisory Agreement between the Trust,
Nashville Capital Corporation (the "Adviser") and Northstar Capital Management,
Inc. ("Northstar") with respect to the Monteagle Large Cap Growth Fund (the
"Large Cap Growth Fund"). The Independent Trustees requested and evaluated
information they deemed reasonably necessary to their review process. The Board
received information describing the services to be provided by Northstar,
including information about (i) the nature, extent and quality of services to be
provided by Northstar; (ii) the investment performance of the Large Cap Growth
Fund measured against appropriate benchmarks; and (iii) general information
about Northstar. The Independent Trustees met in executive session and were
advised by experienced independent counsel throughout their deliberations. At
its meeting, the Board considered:
NATURE, EXTENT AND QUALITY OF SERVICES. The Board reviewed the functions
performed by Northstar, the portfolio management team and support staff of
Northstar. It was noted that Northstar had recently added investment, marketing
and support staff to enhance its investment research and operational
capabilities. The Board reviewed Northstar's investment strategy and process for
the Large Cap Growth Fund, Northstar's financial condition and considered the
quality of services provided. The Board also revisited information on the
performance of the Large Cap Growth Fund and the performance information of a
relevant securities index and a group of peer funds. The comparison revealed
that the Large Cap Growth Fund has been managed with a long-term perspective and
has been strictly managed within stated objectives and limitations to maintain
the desired style; and, while the performance of the strategy has not led to
performance better than the benchmarks, Northstar's long-term performance was
consistent with the strategy of quality large cap selections. Based on the
information provided and the Board's previous experience with Northstar, the
Board concluded that the nature and extent of the services provided and to be
provided by Northstar were appropriate and that the quality was acceptable.
FEES. The Board considered the subadvisory fee rates under the Sub-Advisory
Agreement and noted that the fee rates have not changed. The Board concluded
that the subadvisory fee was reasonable and appropriate in amount given the
quality of services provided.
PROFITABILITY. The Board considered the profitability information provided by
Northstar with respect to its fees received under the Sub-Advisory Agreement.
The Board considered that the subadvisory fee rates were negotiated at arm's
length between the Adviser and Northstar, and that Northstar is paid by the
Adviser. The Board concluded that the profits realized by Northstar were not
unreasonable.
ECONOMIES OF SCALE. The Board considered the extent to which economies of scale
would be realized as the Large Cap Growth Fund grows and whether subadvisory fee
levels reflect those economies of scale for the benefit of the Fund's investors.
Following further discussion of the Large Cap Growth Fund's asset levels,
expectations for growth, and fee levels, the Board determined that the Fund's
fee arrangements, in light of all the facts and circumstances, were fair and
reasonable in relation to the nature and quality of the services provided by the
Northstar.
82
================================================================================
MONTEAGLE FUNDS
BOARD APPROVAL OF INVESTMENT SUB-ADVISORY AGREEMENT FOR
MONTEAGLE LARGE CAP GROWTH FUND (UNAUDITED) (CONTINUED)
================================================================================
OTHER BENEFITS TO NORTHSTAR. The Board noted that Northstar has indicated that
Northstar benefits as a result of its relationship with the Large Cap Growth
Fund from the use of the Fund's brokerage under certain soft-dollar arrangements
pursuant to which it receives research; and that, based on prior reviews, such
arrangements are reasonable in relation to the research provided to Northstar.
Based upon these considerations, the Board, including all of the Independent
Trustees voting separately, concluded that that the terms of the Sub-Advisory
Agreement were fair and reasonable and that approval of the Agreement for an
additional annual period was in the best interests of the Large Cap Growth Fund
and its shareholders; that the services to be performed under the Sub-Advisory
Agreement were services required for the operation of the Large Cap Growth Fund;
that Northstar has provided satisfactory advisory services to the Large Cap
Growth Fund in the past; and that the fees for the advisory services which
Northstar will perform were within the range of what would have been negotiated
at arm's length in light of the circumstances.
83
================================================================================
MONTEAGLE FUNDS
BOARD APPROVAL OF INVESTMENT SUB-ADVISORY AGREEMENT FOR
MONTEAGLE VALUE FUND (UNAUDITED)
================================================================================
On April 17, 2008, the Board of Trustees (the "Board") of the Monteagle Funds
(the "Trust") met and evaluated the Sub-Advisory Agreement between the Trust,
Nashville Capital Corporation (the "Adviser") and Robinson Investment Group
("Robinson") with respect to the Monteagle Value Fund (the "Value Fund"). The
Independent Trustees requested and evaluated information they deemed reasonably
necessary to their review process. The Board received information describing the
services to be provided by Robinson, including information about (i) the nature,
extent and quality of services to be provided by Robinson; (ii) the investment
performance of the Value Fund measured against appropriate benchmarks; and (iii)
general information about Robinson. The Independent Trustees met in executive
session and were advised by experienced independent counsel throughout their
deliberations. At its meeting, the Board considered:
NATURE, EXTENT AND QUALITY OF SERVICES. The Board reviewed the functions
performed by Robinson, the portfolio management team and support staff of
Robinson, Robinson's investment strategy and process for the Value Fund,
Robinson's financial condition and considered the quality of services provided.
The Board also reviewed information on the performance of the Value Fund, along
with the performance information of a relevant securities index and a group of
peer funds. The comparison revealed that the Value Fund has been managed with a
long-term perspective and has been strictly managed within stated objectives and
limitations to maintain the desired style, and that Robinson's short and
long-term performance was better than the benchmarks. Based on the information
provided and the Board's previous experience with Robinson, the Board concluded
that the nature and extent of the services provided and to be provided by
Robinson were appropriate and that the quality was excellent.
FEES. The Board considered the subadvisory fee rates under the Sub-Advisory
Agreement and noted that the fee rates have not changed. The Board concluded
that the subadvisory fee was reasonable and appropriate in amount given the
quality of services provided.
PROFITABILITY. The Board considered the profitability information provided by
Robinson with respect to its fees received under the Sub-Advisory Agreement. The
Board considered that the subadvisory fee rates were negotiated at arm's length
between the Adviser and Robinson, and that Robinson is paid by the Adviser. The
Board concluded that the profits realized by Robinson were not unreasonable.
ECONOMIES OF SCALE. The Board considered the extent to which economies of scale
would be realized as the Value Fund grows and whether subadvisory fee levels
reflect those economies of scale for the benefit of the Fund's investors.
Following further discussion of the Value Fund's asset levels, expectations for
growth and fee levels, the Board determined that the Value Fund's fee
arrangements, in light of all the facts and circumstances, were fair and
reasonable in relation to the nature and quality of the services provided by the
Robinson.
OTHER BENEFITS TO ROBINSON. The Board noted that Robinson has indicated that it
does not believe it receives any fall-out benefits as a result of its
relationship with the Value Fund. The Board also considered that Robinson has
not entered into any soft-dollar arrangements on behalf of the Value Fund.
84
================================================================================
MONTEAGLE FUNDS
BOARD APPROVAL OF INVESTMENT SUB-ADVISORY AGREEMENT FOR
MONTEAGLE VALUE FUND (UNAUDITED) (CONTINUED)
================================================================================
Based upon these considerations, the Board, including all of the Independent
Trustees voting separately, concluded that that the terms of the Sub-Advisory
Agreement were fair and reasonable and that approval of the Agreement for an
additional annual period was in the best interests of the Value Fund and its
shareholders; that the services to be performed under the Sub-Advisory Agreement
were services required for the operation of the Value Fund; that Robinson has
provided satisfactory advisory services to the Value Fund in the past; and that
the fees for the advisory services which Robinson will perform were within the
range of what would have been negotiated at arm's length in light of the
circumstances.
85
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- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
MONTEAGLE FUNDS
THE MONTEAGLE FUNDS
INVESTMENT ADVISERS
Parkway Advisors, L.P.
6550 Directors Parkway
Abilene, Texas 79606
Nashville Capital Corporation
209 10th Ave. South, Suite 332
Nashville, TN 37203
DISTRIBUTOR
Ultimus Fund Distributors, LLC
225 Pictoria Drive, Suite 450
Cincinnati, Ohio 45246
TRANSFER AGENT, ADMINISTRATOR
& SHAREHOLDER SERVICING AGENT
Ultimus Fund Solutions, LLC
225 Pictoria Drive, Suite 450
Cincinnati, Ohio 45246
(888) 263-5593
www.monteaglefunds.com
This report is submitted for the general information the shareholders of the
Funds. It is not authorized for distribution to prospective investors in the
Funds unless preceded or accompanied by a current 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.
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. Pursuant to Item 12(a)(1), a
copy of registrant's code of ethics is filed as an exhibit to this Form N-CSR.
During the period covered by this report, the code of ethics has not been
amended, and the registrant has not granted any waivers, including implicit
waivers, from the provisions of the code of ethics.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's board of trustees has determined that the registrant has at
least one audit committee financial expert serving on its audit committee. The
name of the audit committee financial expert is Larry J. Anderson. Mr. Anderson
is "independent" for purposes of this Item.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) AUDIT FEES. The aggregate fees billed for professional services
rendered by the principal accountant for the audit of the
registrant's annual financial statements or for services that are
normally provided by the accountant in connection with statutory and
regulatory filings or engagements were $47,203 and $39,280 with
respect to the registrant's fiscal years ended August 31, 2008 and
2007, respectively.
(b) AUDIT-RELATED FEES. The aggregate fees billed for assurance and
related services by the principal accountant that are reasonably
related to the performance of the audit of the registrant's
financial statements and are not reported under paragraph (a) of
this Item were $4,500 and $0 with respect to the registrant's fiscal
years ended August 31, 2008 and 2007, respectively. The services
comprising these fees are the review of the registrant's dividend
calculations.
(c) TAX FEES. The aggregate fees billed for professional services
rendered by the principal accountant for tax compliance, tax advice,
and tax planning were $10,800 and $7,500 with respect to the
registrant's fiscal years ended August 31, 2008 and 2007,
respectively. The services comprising these fees are the preparation
of the registrant's federal income and excise tax returns.
(d) ALL OTHER FEES. No fees were billed in either of the last two fiscal
years for products and services provided by the principal
accountant, other than the services reported in paragraphs (a)
through (c) of this Item.
(e)(1) The audit committee has not adopted pre-approval policies and
procedures described in paragraph (c)(7) of Rule 2-01 of Regulation
S-X.
(e)(2) None of the services described in paragraph (b) through (d) of this
Item were approved by the audit committee pursuant to paragraph
(c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Less than 50% of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the
most recent fiscal year were attributed to work performed by persons
other than the principal accountant's full-time, permanent
employees.
(g) With respect to the fiscal years ended August 31, 2008 and 2007,
aggregate non-audit fees of $10,800 and $7,500, respectively, were
billed by the registrant's accountant for services rendered to the
registrant. No non-audit fees were billed in either of the last two
fiscal years by the registrant's accountant for services 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.
(h) The principal accountant has not provided any non-audit services 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
investment adviser that provides ongoing services to the registrant.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
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
MANAGEMENT INVESTMENT COMPANIES.
Not applicable
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The registrant has not adopted procedures by which shareholders may recommend
nominees to the registrant's board of trustees.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Based on their evaluation of the registrant's disclosure controls and
procedures (as defined in Rule 30a-3(c) under the Investment Company Act of
1940) as of a date within 90 days of the filing date of this report, the
registrant's principal executive officer and principal financial officer have
concluded that such disclosure controls and procedures are reasonably designed
and are operating effectively to ensure that material information relating to
the registrant, including its consolidated subsidiaries, is made known to them
by others within those entities, particularly during the period in which this
report is being prepared, and that the information required in filings on Form
N-CSR is recorded, processed, summarized, and reported on a timely basis.
(b) There were no changes in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940)
that occurred during the second fiscal quarter of the period covered by this
report that have materially affected, or are reasonably likely to materially
affect, the registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Attached hereto
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Act (17 CFR 270.30a-2(a)): Attached hereto
(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under
the Act (17 CFR 270.23c-1) sent or given during the period covered by the report
by or on behalf of the registrant to 10 or more persons: Not applicable
(b) Certifications required by Rule 30a-2(b) under the Act (17 CFR
270.30a-2(b)): Attached hereto
Exhibit 99.CODE ETH Code of Ethics
Exhibit 99.CERT Certifications required by Rule 30a-2(a) under the Act
Exhibit 99.906CERT Certifications required by Rule 30a-2(b) under the Act
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) Monteagle Funds
--------------------------------------------------------------------
By (Signature and Title)* /s/ Carl C. Peterson
--------------------------------------------------
Carl C. Peterson, President
Date November 4, 2008
----------------------------
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 November 4, 2008
----------------------------
By (Signature and Title)* /s/ Mark J. Seger
--------------------------------------------------
Mark J. Seger, Treasurer
Date November 4, 2008
----------------------------
* Print the name and title of each signing officer under his or her signature.