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OMB Number: 3235-0570
Expires: August 31, 2011
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hours per response: 18.9
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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
----------------------------
Date of fiscal year end: August 31, 2009
--------------------------
Date of reporting period: February 28, 2009
--------------------------
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
SEMI-ANNUAL REPORT
FEBRUARY 28, 2009
(UNAUDITED)
-----------------
[GRAPHIC OMITTED]
MONTEAGLE FUNDS
-----------------
TABLE OF CONTENTS
================================================================================
SUPPLEMENTARY PORTFOLIO INFORMATION........................................ 2
FINANCIAL STATEMENTS OF THE MONTEAGLE FUNDS
Schedule of Investments:
Fixed Income Fund....................................................... 8
Quality Growth Fund..................................................... 12
Large Cap Growth Fund................................................... 16
Select Value Fund....................................................... 18
Value Fund.............................................................. 21
Informed Investor Growth Fund........................................... 23
Statements of Assets and Liabilities....................................... 24
Statements of Operations................................................... 26
Statements of Changes in Net Assets ....................................... 28
Financial Highlights....................................................... 34
Notes to Financial Statements.............................................. 40
Other Information.......................................................... 49
About Your Funds' Expenses................................................. 50
Board Approval of Management Agreement for the Funds....................... 53
Board Approval of Subadvisory Agreement for
Monteagle Fixed Income Fund............................................. 55
Monteagle Quality Growth Fund........................................... 57
Monteagle Select Value Fund............................................. 59
================================================================================
MONTEAGLE FIXED INCOME FUND
SUPPLEMENTARY PORTFOLIO INFORMATION
FEBRUARY 28, 2009 (UNAUDITED)
================================================================================
FUND PROFILE:
TOP TEN LONG-TERM PORTFOLIO HOLDINGS (% OF NET ASSETS)
- ----------------------------------------------------------------------
FNMA, Pool #386008, 4.52%, due 04/01/2013 3.4%
GNMA, Series 2003-81-PB, 6.00%, due 03/20/2029 3.1%
FNMA, 5.00%, due 08/02/2012 2.5%
U.S. Treasury Notes, 3.75%, due 11/15/2018 2.4%
FHLMC, Series 3290, 5.50%, due 03/15/2035 2.4%
GNMA, Pool #676516, 6.00%, due 02/15/2038 2.1%
Johnson & Johnson, 5.15%, due 07/15/2018 2.0%
FHLMC, Series 2841, 5.00%, due 08/15/2019 2.0%
FNMA, 5.55%, due 02/16/2017 1.9%
General Dynamics Corp., 5.25%, due 02/01/2014 1.9%
SECTOR ALLOCATION (% OF NET ASSETS)
- ----------------------------------------------------------------------
U.S. Government and Agency Obligations 39.0%
Corporate Bonds 34.9%
Mortgage-Backed Securities 22.0%
Municipal Obligations 0.7%
Money Market Funds 2.4%
Other Assets in Excess of Liabilities 1.0%
-------
100.0%
=======
2
================================================================================
MONTEAGLE QUALITY GROWTH FUND
SUPPLEMENTARY PORTFOLIO INFORMATION
FEBRUARY 28, 2009 (UNAUDITED)
================================================================================
FUND PROFILE:
TOP TEN EQUITY HOLDINGS (% OF NET ASSETS)
- ----------------------------------------------------------------------
Microsoft Corp. 3.4%
International Business Machines Corp. 3.3%
Wal-Mart Stores, Inc. 3.0%
Danaher Corp. 2.9%
C. R. Bard, Inc. 2.8%
Cisco Systems, Inc. 2.7%
Abbott Laboratories 2.3%
PepsiCo, Inc. 2.3%
Hewlett-Packard Co. 2.3%
Burger King Holdings, Inc. 2.2%
TOP TEN PORTFOLIO INDUSTRIES (% OF NET ASSETS)
- ----------------------------------------------------------------------
Computers & Peripherals 8.1%
Software 7.2%
Oil, Gas & Consumable Fuels 5.9%
Food & Staples Retailing 5.2%
Health Care Equipment & Supplies 5.2%
Communications Equipment 4.8%
Pharmaceuticals 4.5%
Aerospace & Defense 4.3%
Beverages 4.3%
Semiconductors & Semiconductor Equipment 4.2%
-------
53.7%
=======
ECONOMIC SECTORS WITH CASH AND OTHER ASSETS (% OF NET ASSETS)
- ----------------------------------------------------------------------
Information Technology 31.3%
Health Care 15.5%
Consumer Staples 13.2%
Industrials 12.5%
Consumer Discretionary 9.9%
Energy 8.2%
Materials 4.3%
Financials 3.1%
Utilities 1.3%
Money Market Funds 0.6%
Other Assets in Excess of Liabilities 0.1%
-------
100.0%
=======
3
================================================================================
MONTEAGLE LARGE CAP GROWTH FUND
SUPPLEMENTARY PORTFOLIO INFORMATION
FEBRUARY 28, 2009 (UNAUDITED)
================================================================================
FUND PROFILE:
TOP TEN EQUITY HOLDINGS (% OF NET ASSETS)
- ----------------------------------------------------------------------
Oracle Corp. 5.2%
McDonald's Corp. 4.9%
Becton, Dickinson and Co. 4.9%
Wal-Mart Stores, Inc. 4.8%
Visa, Inc. - Class A 4.6%
Gilead Sciences, Inc. 4.6%
International Business Machines Corp. 4.5%
PepsiCo, Inc. 4.5%
Apple, Inc. 3.9%
Exxon Mobil Corp. 3.8%
TOP TEN PORTFOLIO INDUSTRIES (% OF NET ASSETS)
- ----------------------------------------------------------------------
Computers & Peripherals 11.1%
Oil, Gas & Consumable Fuels 7.8%
IT Services 7.8%
Chemicals 6.8%
Biotechnology 6.2%
Pharmaceuticals 5.3%
Software 5.2%
Hotels, Restaurants & Leisure 4.9%
Health Care Equipment & Supplies 4.9%
Food & Staples Retailing 4.8%
-------
64.8%
=======
ECONOMIC SECTORS WITH CASH AND OTHER ASSETS (% OF NET ASSETS)
- ----------------------------------------------------------------------
Information Technology 26.4%
Health Care 18.3%
Money Market Funds 12.7%
Consumer Staples 12.0%
Energy 7.8%
Materials 6.8%
Consumer Discretionary 6.5%
Industrials 6.2%
Financials 3.2%
Other Assets in Excess of Liabilities 0.1%
-------
100.0%
=======
4
================================================================================
MONTEAGLE SELECT VALUE FUND
SUPPLEMENTARY PORTFOLIO INFORMATION
FEBRUARY 28, 2009 (UNAUDITED)
================================================================================
FUND PROFILE:
TOP TEN EQUITY HOLDINGS (% OF NET ASSETS)
- ----------------------------------------------------------------------
AT&T, Inc. 4.6%
Kohl's Corp. 4.3%
Intel Corp. 4.0%
QUALCOMM, Inc. 3.9%
Schering-Plough Corp. 3.6%
Applied Materials, Inc. 3.4%
Bemis Co., Inc. 3.3%
Gap, Inc. (The) 3.0%
Texas Instruments, Inc. 2.8%
Target Corp. 2.8%
TOP TEN PORTFOLIO INDUSTRIES (% OF NET ASSETS)
- ----------------------------------------------------------------------
Semiconductors & Semiconductor Equipment 10.2%
Multi-Line Retail 7.1%
Pharmaceuticals 6.3%
Energy Equipment & Services 5.5%
Health Care Providers & Services 5.4%
Machinery 5.2%
Diversified Telecommunication Services 4.6%
Communications Equipment 4.5%
Containers & Packaging 3.3%
Specialty Retail 3.0%
-------
55.1%
=======
ECONOMIC SECTORS WITH CASH AND OTHER ASSETS (% OF NET ASSETS)
- ----------------------------------------------------------------------
Information Technology 17.9%
Money Market Funds 17.0%
Consumer Discretionary 15.4%
Health Care 11.7%
Industrials 9.6%
Energy 7.8%
Materials 6.8%
Telecommunication Services 6.1%
Financials 5.7%
Consumer Staples 1.6%
Other Assets in Excess of Liabilities 0.4%
-------
100.0%
=======
5
================================================================================
MONTEAGLE VALUE FUND
SUPPLEMENTARY PORTFOLIO INFORMATION
FEBRUARY 28, 2009 (UNAUDITED)
================================================================================
FUND PROFILE:
TOP TEN EQUITY HOLDINGS (% OF NET ASSETS)
- ----------------------------------------------------------------------
Barrick Gold Corp. 7.3%
Newmont Mining Corp. 7.2%
Tidewater, Inc. 7.1%
Transocean Ltd. 6.0%
Halliburton Co. 5.3%
Goodrich Corp. 4.8%
Schering-Plough Corp. 4.7%
AT&T, Inc. 4.6%
Spectra Energy Corp. 3.7%
Marathon Oil Corp. 3.6%
TOP TEN PORTFOLIO INDUSTRIES (% OF NET ASSETS)
- ----------------------------------------------------------------------
Energy Equipment & Services 27.4%
Metals & Mining 15.8%
Pharmaceuticals 8.2%
Diversified Telecommunication Services 7.9%
Oil, Gas & Consumable Fuels 7.3%
Aerospace & Defense 4.8%
Semiconductors & Semiconductor Equipment 3.6%
Specialty Retail 3.5%
Electric Utilities 3.3%
Software 2.8%
-------
84.6%
=======
ECONOMIC SECTORS WITH CASH AND OTHER ASSETS (% OF NET ASSETS)
- ----------------------------------------------------------------------
Energy 34.7%
Materials 18.5%
Information Technology 8.3%
Health Care 8.2%
Telecommunication Services 7.9%
Money Market Funds 6.8%
Industrials 6.6%
Consumer Discretionary 5.3%
Utilities 3.3%
Other Assets in Excess of Liabilities 0.4%
-------
100.0%
=======
6
================================================================================
MONTEAGLE INFORMED INVESTOR GROWTH FUND
SUPPLEMENTARY PORTFOLIO INFORMATION
FEBRUARY 28, 2009 (UNAUDITED)
================================================================================
FUND PROFILE:
EQUITY HOLDINGS (% OF NET ASSETS)
- ----------------------------------------------------------------------
UltraShort S&P 500 ProShares 19.8%
Corinthian Colleges, Inc. 6.1%
Myriad Genetics, Inc. 6.0%
Fidelity National Financial, Inc. - Class A 5.7%
Netflix, Inc. 5.2%
ITT Educational Services, Inc. 4.1%
DeVry, Inc. 1.0%
O'Reilly Automotive, Inc. 1.0%
AutoZone, Inc. 1.0%
PORTFOLIO INDUSTRIES (% OF NET ASSETS)
- ----------------------------------------------------------------------
Diversified Consumer Services 11.2%
Biotechnology 6.0%
Insurance 5.7%
Internet & Catalog Retail 5.2%
Specialty Retail 2.0%
-------
30.1%
=======
ECONOMIC SECTORS WITH CASH AND OTHER ASSETS (% OF NET ASSETS)
- ----------------------------------------------------------------------
Other Assets in Excess of Liabilities 38.7%
Exchange-Traded Funds 19.8%
Consumer Discretionary 18.4%
Money Market Funds 11.4%
Health Care 6.0%
Financials 5.7%
-------
100.0%
=======
7
================================================================================
MONTEAGLE FIXED INCOME FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 2009 (UNAUDITED)
================================================================================
PAR VALUE U.S. GOVERNMENT AND AGENCY OBLIGATIONS -- 39.0% VALUE
- --------------------------------------------------------------------------------
U.S. TREASURY NOTES -- 4.0%
$ 500,000 3.125%, due 09/30/2013 $ 526,993
750,000 3.75%, due 11/15/2018 794,942
------------
1,321,935
------------
FEDERAL FARM CREDIT BANK -- 3.0%
200,000 6.82%, due 03/16/2009 200,484
250,000 5.375%, due 07/18/2011 271,272
500,000 5.55%, due 07/30/2015 504,936
------------
976,692
------------
FEDERAL HOME LOAN BANK -- 16.5%
500,000 6.795%, due 06/30/2009 510,163
250,000 5.375%, due 07/17/2009 254,487
250,000 5.75%, due 05/15/2012 278,249
200,000 5.80%, due 06/12/2013 202,660
250,000 5.125%, due 08/14/2013 276,388
500,000 5.50%, due 08/28/2013 510,388
500,000 5.25%, due 06/18/2014 554,242
250,000 5.50%, due 08/25/2014 261,392
250,000 5.00%, due 09/03/2015 252,480
500,000 5.50%, due 10/19/2016 510,757
250,000 5.75%, due 03/13/2017 250,347
500,000 6.00%, due 07/27/2017 521,112
500,000 5.25%, due 11/08/2017 515,725
500,000 5.05%, due 01/03/2018 511,722
------------
5,410,112
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 4.5%
400,000 7.00%, due 03/15/2010 423,765
500,000 5.625%, due 03/15/2011 540,006
500,000 6.00%, due 08/18/2016 508,400
------------
1,472,171
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 11.0%
500,000 7.25%, due 01/15/2010 526,302
500,000 4.00%, due 07/02/2010 504,830
750,000 5.00%, due 08/02/2012 825,818
500,000 5.00%, due 03/02/2015 548,290
600,000 5.55%, due 02/16/2017 618,836
300,000 5.25%, due 01/16/2018 299,158
280,000 5.08%, due 06/24/2018 277,534
------------
3,600,768
------------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS
(Cost $12,325,484) $ 12,781,678
------------
8
================================================================================
MONTEAGLE FIXED INCOME FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE CORPORATE BONDS -- 34.9% VALUE
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE -- 3.4%
$ 575,000 General Dynamics Corp., 5.25%, due 02/01/2014 $ 610,215
500,000 United Technologies Corp., 5.375%, due 12/15/2017 511,476
------------
1,121,691
------------
BEVERAGES -- 4.2%
300,000 Anheuser-Busch Cos., Inc., 6.00%, due 04/15/2011 308,012
500,000 Bottling Group, LLC, 4.625%, due 11/15/2012 517,391
500,000 Coca-Cola Co. (The), 5.75%, due 03/15/2011 534,247
------------
1,359,650
------------
BIOTECHNOLOGY -- 0.8%
250,000 Amgen, Inc., 4.85%, due 11/18/2014 251,627
------------
CAPITAL MARKETS -- 2.7%
245,000 Credit Suisse First Boston USA, Inc., 4.70%,
due 06/01/2009 246,017
500,000 Goldman Sachs Group, Inc. (The), 5.95%, due 01/18/2018 447,679
200,000 Morgan Stanley, 6.60%, due 04/01/2012 198,726
------------
892,422
------------
COMMERCIAL BANKS -- 2.3%
500,000 SunTrust Bank, 6.375%, due 04/01/2011 500,102
250,000 Wells Fargo & Co., 5.25%, due 10/23/2012 245,046
------------
745,148
------------
COMMERCIAL SERVICES & SUPPLIES -- 0.8%
250,000 Pitney Bowes, Inc., 5.75%, due 09/15/2017 254,801
------------
COMPUTERS & PERIPHERALS -- 1.1%
350,000 Hewlett-Packard Co., 6.125%, due 03/01/2014 370,903
------------
CONSUMER FINANCE -- 1.5%
500,000 American Express Co., 4.75%, due 06/17/2009 499,475
------------
DIVERSIFIED FINANCIAL SERVICES -- 2.1%
500,000 Bank of America Corp., 4.875%, due 01/15/2013 439,096
250,000 Bear Stearns Co., Inc., 3.25%, due 03/25/2009 250,013
------------
689,109
------------
DIVERSIFIED TELECOMMUNICATION SERVICES -- 0.6%
200,000 SBC Communications, Inc., 5.625%, due 06/15/2016 197,134
------------
ELECTRICAL EQUIPMENT -- 0.8%
250,000 Emerson Electric Co., 5.125%, due 12/01/2016 251,630
------------
9
================================================================================
MONTEAGLE FIXED INCOME FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE CORPORATE BONDS -- 34.9% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
FOOD PRODUCTS -- 2.0%
$ 250,000 Campbell Soup Co., 6.75%, due 02/15/2011 $ 269,802
400,000 McCormick & Co., Inc., 5.25%, due 09/01/2013 386,121
------------
655,923
------------
HEALTH CARE PROVIDERS & SERVICES -- 0.7%
250,000 UnitedHealth Group, Inc., 5.00%, due 08/15/2014 238,137
------------
HOUSEHOLD PRODUCTS -- 0.8%
250,000 Kimberly-Clark Corp., 5.00%, due 08/15/2013 252,722
------------
INSURANCE -- 0.6%
230,000 Prudential Financial, Inc., 5.15%, due 01/15/2013 205,945
------------
METALS & MINING -- 1.2%
500,000 Alcoa, Inc., 5.375%, due 01/15/2013 397,035
------------
OIL, GAS & CONSUMABLE FUELS -- 2.4%
250,000 ConocoPhillips, 5.50%, due 04/15/2013 260,090
500,000 Shell International Finance, 5.625%, due 06/27/2011 538,257
------------
798,347
------------
PERSONAL PRODUCTS -- 1.7%
500,000 Estee Lauder Cos., Inc. (The), 7.75%, due 11/01/2013 544,238
------------
PHARMACEUTICALS -- 2.8%
250,000 Abbott Laboratories, 5.15%, due 11/30/2012 269,734
600,000 Johnson & Johnson, 5.15%, due 07/15/2018 656,363
------------
926,097
------------
SOFTWARE -- 1.6%
500,000 Oracle Corp., 5.00%, due 01/15/2011 523,969
------------
SPECIALTY RETAIL -- 0.8%
250,000 Lowe's Cos., Inc., 5.60%, due 09/15/2012 258,761
------------
TOTAL CORPORATE BONDS (Cost $11,507,537) $ 11,434,764
------------
10
================================================================================
MONTEAGLE FIXED INCOME FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE MORTGAGE-BACKED SECURITIES -- 22.0% VALUE
- --------------------------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 6.6%
$ 327,510 Series 2840, 5.00%, due 08/15/2015 $ 340,642
629,686 Series 2841, 5.00%, due 08/15/2019 649,265
205,693 Series 15-L, 7.00%, due 07/25/2023 217,757
750,000 Series 3290, 5.50%, due 03/15/2035 775,615
189,363 Series 3058, 5.50%, due 10/15/2035 192,677
------------
2,175,956
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 8.7%
1,100,000 Pool #386008, 4.52%, due 04/01/2013 1,127,227
211,926 Pool #725421, 7.00%, due 09/01/2017 222,621
399,959 Pool #545759, 6.50%, due 07/01/2032 421,608
300,000 Series 2003-54, 5.50%, due 09/25/2032 312,355
151,757 Pool #754289, 6.00%, due 11/01/2033 157,573
580,411 Pool #882684, 6.00%, due 06/01/2036 600,661
------------
2,842,045
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 6.7%
284,108 Pool #648337, 5.00%, due 10/15/2020 296,568
1,000,000 Series 2003-81-PB, 6.00%, due 03/20/2029 1,029,218
174,170 Pool #476998, 6.50%, due 07/15/2029 182,846
659,424 Pool #676516, 6.00%, due 02/15/2038 682,947
------------
2,191,579
------------
TOTAL MORTGAGE-BACKED SECURITIES (Cost $7,106,621) $ 7,209,580
------------
================================================================================
PAR VALUE MUNICIPAL OBLIGATIONS -- 0.7% VALUE
- --------------------------------------------------------------------------------
GEORGIA -- 0.7%
$ 230,000 Atlanta & Fulton County Recreation Authority,
Revenue, 6.625%, due 12/01/2011 (Cost $230,364) $ 234,043
------------
================================================================================
SHARES MONEY MARKET FUNDS -- 2.4% VALUE
- --------------------------------------------------------------------------------
759,316 State Street Institutional U.S. Government
Money Market Fund, 0.09% (a) (Cost $759,316) $ 759,316
------------
TOTAL INVESTMENTS AT VALUE -- 99.0%
(Cost $31,929,322) $ 32,419,381
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.0% 324,071
------------
NET ASSETS -- 100.0% $ 32,743,452
============
(a) Variable rate security. The rate shown is the 7-day effective yield as of
February 28, 2009.
The accompanying notes are an integral part of the financial statements.
11
================================================================================
MONTEAGLE QUALITY GROWTH FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 2009 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS -- 99.3% VALUE
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE -- 4.3%
2,000 Boeing Co. (The) $ 62,880
2,985 Honeywell International, Inc. 80,088
2,275 Precision Castparts Corp. 126,103
2,425 United Technologies Corp. 99,013
------------
368,084
------------
AIR FREIGHT & LOGISTICS -- 1.3%
1,715 Expeditors International of Washington, Inc. 47,248
1,610 United Parcel Service, Inc. - Class B 66,300
------------
113,548
------------
AIRLINES -- 0.4%
5,780 Southwest Airlines Co. 34,044
------------
BEVERAGES -- 4.3%
4,100 Coca-Cola Co. (The) 167,485
4,075 PepsiCo, Inc. 196,170
------------
363,655
------------
BIOTECHNOLOGY -- 4.0%
1,700 Genentech, Inc. (a) 145,435
685 Genzyme Corp. (a) 41,737
3,414 Gilead Sciences, Inc. (a) 152,947
------------
340,119
------------
CAPITAL MARKETS -- 1.4%
1,800 Franklin Resources, Inc. 82,440
8,925 Janus Capital Group, Inc. 39,359
------------
121,799
------------
CHEMICALS -- 3.3%
2,080 Air Products & Chemicals, Inc. 96,200
2,380 Monsanto Co. 181,523
------------
277,723
------------
COMMUNICATIONS EQUIPMENT -- 4.8%
15,675 Cisco Systems, Inc. (a) 228,385
5,425 QUALCOMM, Inc. 181,358
------------
409,743
------------
COMPUTERS & PERIPHERALS -- 8.1%
1,900 Apple, Inc. (a) 169,689
5,200 Dell, Inc. (a) 44,356
6,650 Hewlett-Packard Co. 193,049
3,065 International Business Machines Corp. 282,072
------------
689,166
------------
12
================================================================================
MONTEAGLE QUALITY GROWTH FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 99.3% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES -- 1.1%
6,075 Bank of America Corp. $ 23,996
1,190 IntercontinentalExchange, Inc. (a) 67,556
------------
91,552
------------
ELECTRIC UTILITIES -- 1.3%
2,325 Exelon Corp. 109,786
------------
ELECTRICAL EQUIPMENT -- 1.5%
3,100 Roper Industries, Inc. 128,185
------------
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS -- 1.5%
4,975 Amphenol Corp. - Class A 126,465
------------
ENERGY EQUIPMENT & SERVICES -- 2.3%
5,090 Cameron International Corp. (a) 98,135
2,500 Schlumberger Ltd. 95,150
------------
193,285
------------
FOOD & STAPLES RETAILING -- 5.2%
3,600 CVS Caremark Corp. 92,664
4,500 Sysco Corp. 96,750
5,165 Wal-Mart Stores, Inc. 254,325
------------
443,739
------------
FOOD PRODUCTS -- 1.1%
2,975 McCormick & Co., Inc. 93,266
------------
HEALTH CARE EQUIPMENT & SUPPLIES -- 5.2%
1,250 Baxter International, Inc. 63,638
2,950 C.R. Bard, Inc. 236,767
2,600 Medtronic, Inc. 76,934
2,000 St. Jude Medical, Inc. (a) 66,320
------------
443,659
------------
HEALTH CARE PROVIDERS & SERVICES -- 1.0%
1,765 Express Scripts, Inc. (a) 88,780
------------
HOTELS, RESTAURANTS & LEISURE -- 3.5%
8,540 Burger King Holdings, Inc. 183,525
2,190 McDonald's Corp. 114,427
------------
297,952
------------
HOUSEHOLD PRODUCTS -- 1.5%
2,675 Procter & Gamble Co. (The) 128,855
------------
13
================================================================================
MONTEAGLE QUALITY GROWTH FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 99.3% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
INSURANCE -- 0.2%
1,090 AFLAC, Inc. $ 18,268
------------
INTERNET SOFTWARE & SERVICES -- 2.6%
505 Google, Inc. - Class A (a) 170,685
3,900 Yahoo!, Inc. (a) 51,597
------------
222,282
------------
IT SERVICES -- 2.9%
3,200 Cognizant Technology Solutions Corp. - Class A (a) 58,880
1,700 Visa, Inc. - Class A 96,407
8,400 Western Union Co. 93,744
------------
249,031
------------
LIFE SCIENCES TOOLS & SERVICES -- 0.8%
1,305 Techne Corp. 63,749
------------
MACHINERY -- 4.2%
4,785 Danaher Corp. 242,887
2,510 Deere & Co. 69,000
1,980 Harsco Corp. 40,907
------------
352,794
------------
MEDIA -- 2.9%
4,100 DIRECTV Group, Inc. (The) (a) 81,754
9,750 Walt Disney Co. (The) 163,508
------------
245,262
------------
METALS & MINING -- 1.0%
2,700 Freeport-McMoRan Copper & Gold, Inc. 82,134
------------
MULTI-LINE RETAIL -- 0.8%
2,300 Target Corp. 65,113
------------
OIL, GAS & CONSUMABLE FUELS -- 5.9%
2,750 Apache Corp. 162,497
2,360 Exxon Mobil Corp. 160,244
1,850 Occidental Petroleum Corp. 95,960
3,420 Peabody Energy Corp. 80,951
------------
499,652
------------
PERSONAL PRODUCTS -- 1.1%
4,315 Alberto-Culver Co. 95,534
------------
PHARMACEUTICALS -- 4.5%
4,175 Abbott Laboratories 197,645
2,000 Johnson & Johnson 100,000
3,465 Merck & Co., Inc. 83,853
------------
381,498
------------
14
================================================================================
MONTEAGLE QUALITY GROWTH FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 99.3% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS (REITS) -- 0.4%
6,275 ProLogis $ 36,332
------------
ROAD & RAIL -- 0.8%
1,900 Union Pacific Corp. 71,288
------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 4.2%
13,450 Intel Corp. 171,353
7,800 Microchip Technology, Inc. 146,406
3,000 Texas Instruments, Inc. 43,050
------------
360,809
------------
SOFTWARE -- 7.2%
8,000 Activision Blizzard, Inc. (a) 80,240
1,800 Adobe Systems, Inc. (a) 30,060
1,735 ANSYS, Inc. (a) 34,995
17,900 Microsoft Corp. 289,085
11,200 Oracle Corp. (a) 174,048
------------
608,428
------------
SPECIALTY RETAIL -- 1.6%
2,800 GameStop Corp. - Class A (a) 75,376
3,910 Lowe's Cos., Inc. 61,934
------------
137,310
------------
TEXTILES, APPAREL & LUXURY GOODS -- 1.1%
2,225 NIKE, Inc. - Class B 92,404
------------
TOTAL COMMON STOCKS (Cost $11,906,019) $ 8,445,293
------------
================================================================================
SHARES MONEY MARKET FUNDS -- 0.6% VALUE
- --------------------------------------------------------------------------------
45,878 State Street Institutional U.S. Government
Money Market Fund, 0.09% (b) (Cost $45,878) $ 45,878
------------
TOTAL INVESTMENTS AT VALUE -- 99.9%
(Cost $11,951,897) $ 8,491,171
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.1% 9,918
------------
NET ASSETS -- 100.0% $ 8,501,089
============
(a) Non-income producing security.
(b) Variable rate security. The rate shown is the 7-day effective yield as of
February 28, 2009.
The accompanying notes are an integral part of the financial statements.
15
================================================================================
MONTEAGLE LARGE CAP GROWTH FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 2009 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS -- 87.2% VALUE
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE -- 2.9%
6,200 Lockheed Martin Corp. $ 391,282
------------
BEVERAGES -- 4.5%
12,500 PepsiCo, Inc. 601,750
------------
BIOTECHNOLOGY -- 6.2%
4,400 Amgen, Inc. (a) 215,292
13,800 Gilead Sciences, Inc. (a) 618,240
------------
833,532
------------
CAPITAL MARKETS -- 3.2%
7,750 Northern Trust Corp. 430,513
------------
CHEMICALS -- 6.8%
6,600 Monsanto Co. 503,382
9,400 Mosaic Co. (The) 404,670
------------
908,052
------------
COMPUTERS & PERIPHERALS -- 11.1%
5,900 Apple, Inc. (a) 526,929
12,200 Hewlett-Packard Co. 354,166
6,600 International Business Machines Corp. 607,398
------------
1,488,493
------------
CONSTRUCTION & ENGINEERING -- 3.3%
7,150 Fluor Corp. 237,737
6,000 Jacobs Engineering Group, Inc. (a) 202,440
------------
440,177
------------
DIVERSIFIED CONSUMER SERVICES -- 1.6%
2,900 Apollo Group, Inc. - Class A (a) 210,250
------------
FOOD & STAPLES RETAILING -- 4.8%
13,100 Wal-Mart Stores, Inc. 645,044
------------
HEALTH CARE EQUIPMENT & SUPPLIES -- 4.9%
10,600 Becton, Dickinson and Co. 656,034
------------
HEALTH CARE PROVIDERS & SERVICES -- 1.9%
6,200 Medco Health Solutions, Inc. (a) 251,596
------------
HOTELS, RESTAURANTS & LEISURE -- 4.9%
12,600 McDonald's Corp. 658,350
------------
16
================================================================================
MONTEAGLE LARGE CAP GROWTH FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 87.2% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS -- 2.7%
7,600 Procter & Gamble Co. (The) $ 366,092
------------
INTERNET SOFTWARE & SERVICES -- 2.3%
900 Google, Inc. - Class A (a) 304,191
------------
IT SERVICES -- 7.8%
8,100 Accenture Ltd. - Class A 236,439
10,450 Cognizant Technology Solutions Corp. - Class A (a) 192,280
11,000 Visa, Inc. - Class A 623,810
------------
1,052,529
------------
OIL, GAS & CONSUMABLE FUELS -- 7.8%
4,500 Chevron Corp. 273,195
7,600 Exxon Mobil Corp. 516,040
9,200 Southwestern Energy Co. (a) 264,684
------------
1,053,919
------------
PHARMACEUTICALS -- 5.3%
5,000 Abbott Laboratories 236,700
4,500 Johnson & Johnson 225,000
5,650 Teva Pharmaceutical Industries Ltd. - ADR 251,877
------------
713,577
------------
SOFTWARE -- 5.2%
45,000 Oracle Corp. (a) 699,300
------------
TOTAL COMMON STOCKS (Cost $13,588,541) $ 11,704,681
------------
================================================================================
SHARES MONEY MARKET FUNDS -- 12.7% VALUE
- --------------------------------------------------------------------------------
1,705,184 State Street Institutional U.S. Government Money
Market Fund, 0.09% (b) (Cost $1,705,184) $ 1,705,184
------------
TOTAL INVESTMENTS AT VALUE -- 99.9%
(Cost $15,293,725) $ 13,409,865
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.1% 13,708
------------
NET ASSETS -- 100.0% $ 13,423,573
============
(a) Non-income producing security.
(b) Variable rate security. The rate shown is the 7-day effective yield as of
February 28, 2009.
ADR - American Depositary Receipt
The accompanying notes are an integral part of the financial statements.
17
================================================================================
MONTEAGLE SELECT VALUE FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 2009 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS -- 82.6% VALUE
- --------------------------------------------------------------------------------
AUTOMOBILES -- 1.2%
7,500 Harley-Davidson, Inc. $ 75,750
------------
BUILDING PRODUCTS -- 1.2%
14,200 Masco Corp. 73,130
------------
CAPITAL MARKETS -- 1.6%
5,000 Morgan Stanley 97,700
------------
CHEMICALS -- 1.7%
6,597 Ashland, Inc. 38,988
9,564 Dow Chemical Co. (The) 68,478
------------
107,466
------------
COMMERCIAL BANKS -- 1.6%
14,300 KeyCorp 100,243
------------
COMMUNICATIONS EQUIPMENT -- 4.5%
10,000 Motorola, Inc. 35,200
7,180 QUALCOMM, Inc. 240,027
------------
275,227
------------
CONTAINERS & PACKAGING -- 3.3%
11,040 Bemis Co., Inc. 205,013
------------
DIVERSIFIED FINANCIAL SERVICES -- 2.5%
10,342 Bank of America Corp. 40,851
13,500 CIT Group, Inc. 33,075
436 CME Group, Inc. 79,526
------------
153,452
------------
DIVERSIFIED TELECOMMUNICATION SERVICES -- 4.6%
12,000 AT&T, Inc. 285,240
------------
ELECTRICAL EQUIPMENT -- 1.7%
5,259 Rockwell Automation, Inc. 105,706
------------
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS -- 1.5%
21,500 Jabil Circuit, Inc. 89,010
------------
18
================================================================================
MONTEAGLE SELECT VALUE FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 82.6% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES -- 5.5%
5,200 Halliburton Co. $ 84,812
8,873 Rowan Cos., Inc. 107,452
2,415 Transocean Ltd. (a) 144,345
------------
336,609
------------
FOOD & STAPLES RETAILING -- 1.6%
8,200 Whole Foods Market, Inc. 99,630
------------
HEALTH CARE PROVIDERS & SERVICES -- 5.4%
8,167 UnitedHealth Group, Inc. 160,482
5,016 WellPoint, Inc. (a) 170,143
------------
330,625
------------
HOTELS, RESTAURANTS & LEISURE -- 2.8%
18,700 Starbucks Corp. (a) 171,105
------------
HOUSEHOLD DURABLES -- 1.3%
14,600 Newell Rubbermaid, Inc. 82,490
------------
INDUSTRIAL CONGLOMERATES -- 1.5%
11,100 General Electric Co. 94,461
------------
IT SERVICES -- 1.7%
5,800 Cognizant Technology Solutions Corp. - Class A (a) 106,720
------------
MACHINERY -- 5.2%
6,876 Dover Corp. 171,488
5,957 PACCAR, Inc. 149,342
------------
320,830
------------
METALS & MINING -- 1.8%
19,000 Titanium Metals Corp. 110,960
------------
MULTI-LINE RETAIL -- 7.1%
7,500 Kohl's Corp. (a) 263,550
6,121 Target Corp. 173,286
------------
436,836
------------
OIL, GAS & CONSUMABLE FUELS -- 2.3%
3,784 ConocoPhillips 141,332
------------
PHARMACEUTICALS -- 6.3%
13,500 Pfizer, Inc. 166,185
12,700 Schering-Plough Corp. 220,853
------------
387,038
------------
19
================================================================================
MONTEAGLE SELECT VALUE FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 82.6% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 10.2%
22,477 Applied Materials, Inc. $ 207,013
19,438 Intel Corp. 247,640
12,200 Texas Instruments, Inc. 175,070
------------
629,723
------------
SPECIALTY RETAIL -- 3.0%
17,151 Gap, Inc. (The) 185,059
------------
WIRELESS TELECOMMUNICATION SERVICES -- 1.5%
27,200 Sprint Nextel Corp. (a) 89,488
------------
TOTAL COMMON STOCKS (Cost $11,102,637) $ 5,090,843
------------
================================================================================
SHARES MONEY MARKET FUNDS -- 17.0% VALUE
- --------------------------------------------------------------------------------
1,046,666 State Street Institutional U.S. Government Money
Market Fund, 0.09% (b) (Cost $1,046,666) $ 1,046,666
------------
TOTAL INVESTMENTS AT VALUE -- 99.6%
(Cost $12,149,303) $ 6,137,509
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.4% 23,191
------------
NET ASSETS -- 100.0% $ 6,160,700
============
(a) Non-income producing security.
(b) Variable rate security. The rate shown is the 7-day effective yield as of
February 28, 2009.
The accompanying notes are an integral part of the financial statements.
20
================================================================================
MONTEAGLE VALUE FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 2009 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS -- 92.8% VALUE
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE -- 4.8%
15,000 Goodrich Corp. $ 497,100
------------
CHEMICALS -- 2.7%
14,750 E.I. du Pont de Nemours & Co. 276,710
------------
COMMUNICATIONS EQUIPMENT -- 1.7%
15,000 Avocent Corp. (a) 179,700
------------
DIVERSIFIED TELECOMMUNICATION SERVICES -- 7.9%
20,000 AT&T, Inc. 475,400
226 FairPoint Communications, Inc. 445
12,000 Verizon Communications, Inc. 342,360
------------
818,205
------------
ELECTRIC UTILITIES -- 3.3%
25,550 Duke Energy Corp. 344,159
------------
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS -- 0.2%
100,000 Sanmina-SCI Corp. (a) 25,000
------------
ENERGY EQUIPMENT & SERVICES -- 27.4%
7,000 Baker Hughes, Inc. 205,170
34,000 Halliburton Co. 554,540
12,000 Helmerich & Payne, Inc. 283,920
12,000 Nabors Industries Ltd. (a) 116,520
26,450 Rowan Cos., Inc. 320,310
21,000 Tidewater, Inc. 741,720
10,494 Transocean Ltd. (a) 627,226
------------
2,849,406
------------
MACHINERY -- 1.8%
25,000 Trinity Industries, Inc. 184,500
------------
METALS & MINING -- 15.8%
22,000 Alcoa, Inc. 137,060
25,000 Barrick Gold Corp. 755,000
18,000 Newmont Mining Corp. 749,340
------------
1,641,400
------------
MULTI-LINE RETAIL -- 1.8%
5,000 Sears Holdings Corp. (a) 183,800
------------
21
================================================================================
MONTEAGLE VALUE FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 92.8% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS -- 7.3%
16,000 Marathon Oil Corp. $ 372,320
30,000 Spectra Energy Corp. 390,000
------------
762,320
------------
PHARMACEUTICALS -- 8.2%
30,000 Pfizer, Inc. 369,300
28,000 Schering-Plough Corp. 486,920
------------
856,220
------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 3.6%
17,000 Applied Materials, Inc. 156,570
17,000 Intel Corp. 216,580
------------
373,150
------------
SOFTWARE -- 2.8%
18,000 Microsoft Corp. 290,700
------------
SPECIALTY RETAIL -- 3.5%
34,000 Gap, Inc. (The) 366,860
------------
TOTAL COMMON STOCKS (Cost $12,142,961) $ 9,649,230
------------
================================================================================
SHARES MONEY MARKET FUNDS -- 6.8% VALUE
- --------------------------------------------------------------------------------
709,513 State Street Institutional U.S. Government Money
Market Fund, 0.09% (b) (Cost $709,513) $ 709,513
------------
TOTAL INVESTMENTS AT VALUE -- 99.6%
(Cost $12,852,474) $ 10,358,743
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.4% 45,018
------------
NET ASSETS -- 100.0% $ 10,403,761
============
(a) Non-income producing security.
(b) Variable rate security. The rate shown is the 7-day effective yield as of
February 28, 2009.
The accompanying notes are an integral part of the financial statements.
22
================================================================================
MONTEAGLE INFORMED INVESTOR GROWTH FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 2009 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS -- 30.1% VALUE
- --------------------------------------------------------------------------------
BIOTECHNOLOGY -- 6.0%
7,800 Myriad Genetics, Inc. (a) $ 615,030
------------
DIVERSIFIED CONSUMER SERVICES -- 11.2%
31,800 Corinthian Colleges, Inc. (a) 626,460
2,000 DeVry, Inc. 103,900
3,700 ITT Educational Services, Inc. (a) 419,950
------------
1,150,310
------------
INSURANCE -- 5.7%
35,500 Fidelity National Financial, Inc. - Class A 588,235
------------
INTERNET & CATALOG RETAIL -- 5.2%
14,600 Netflix, Inc. (a) 527,644
------------
SPECIALTY RETAIL -- 2.0%
700 AutoZone, Inc. (a) 99,561
3,100 O'Reilly Automotive, Inc. (a) 103,416
------------
202,977
------------
TOTAL COMMON STOCKS (Cost $3,340,236) $ 3,084,196
------------
================================================================================
SHARES EXCHANGE-TRADED FUNDS -- 19.8% VALUE
- --------------------------------------------------------------------------------
20,700 UltraShort S&P500 ProShares (Cost $2,046,642) $ 2,033,982
------------
================================================================================
SHARES MONEY MARKET FUNDS -- 11.4% VALUE
- --------------------------------------------------------------------------------
1,168,324 State Street Institutional U.S. Government Money
Market Fund, 0.09% (b) (Cost $1,168,324) $ 1,168,324
------------
TOTAL INVESTMENTS AT VALUE -- 61.3%
(Cost $6,555,202) $ 6,286,502
OTHER ASSETS IN EXCESS OF LIABILITIES -- 38.7% 3,965,306
------------
NET ASSETS -- 100.0% $ 10,251,808
============
(a) Non-income producing security.
(b) Variable rate security. The rate shown is the 7-day effective yield as of
February 28, 2009.
The accompanying notes are an integral part of the financial statements.
23
================================================================================================================
MONTEAGLE FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
FEBRUARY 28, 2009 (UNAUDITED)
================================================================================================================
FIXED QUALITY LARGE CAP
INCOME GROWTH GROWTH
FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------
ASSETS
Investment securities:
At amortized cost $ 31,929,322 $ 11,951,897 $ 15,293,725
============ ============ ============
At market value (Note 2) $ 32,419,381 $ 8,491,171 $ 13,409,865
Cash 11,260 -- --
Dividends and interest receivable 348,817 16,333 23,164
Prepaid Trustees' fees 4,852 2,068 3,168
Other assets 1,486 588 1,050
------------ ------------ ------------
TOTAL ASSETS 32,785,796 8,510,160 13,437,247
------------ ------------ ------------
LIABILITIES
Income distribution payable 2,603 -- --
Payable for capital shares redeemed 15,000 215 --
Due to Adviser (Note 3) 24,358 8,473 13,291
Accrued compliance service fees (Note 3) 383 383 383
------------ ------------ ------------
TOTAL LIABILITIES 42,344 9,071 13,674
------------ ------------ ------------
NET ASSETS $ 32,743,452 $ 8,501,089 $ 13,423,573
============ ============ ============
NET ASSETS CONSIST OF:
Paid-in capital $ 33,996,401 $ 15,896,566 $ 25,130,180
Accumulated undistributed net investment income 79 20,323 18,279
Accumulated net realized losses on investments (1,743,087) (3,955,074) (9,841,026)
Net unrealized appreciation (depreciation) on investments 490,059 (3,460,726) (1,883,860)
------------ ------------ ------------
NET ASSETS $ 32,743,452 $ 8,501,089 $ 13,423,573
============ ============ ============
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) 3,245,983 1,654,027 3,542,808
============ ============ ============
Net asset value, offering and redemption price per share (Note 2) $ 10.09 $ 5.14 $ 3.79
============ ============ ============
The accompanying notes are an integral part of the financial statements.
24
================================================================================================================
MONTEAGLE FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
FEBRUARY 28, 2009 (UNAUDITED)
================================================================================================================
INFORMED
SELECT INVESTOR
VALUE VALUE GROWTH
FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------
ASSETS
Investment securities:
At amortized cost $ 12,149,303 $ 12,852,474 $ 6,555,202
============ ============ ============
At market value (Note 2) $ 6,137,509 $ 10,358,743 $ 6,286,502
Receivable for capital shares sold -- 1,000 --
Receivable for investment securities sold -- -- 6,228,224
Dividends receivable 27,616 51,400 833
Prepaid Trustees' fees 1,671 2,612 118
Other assets 474 821 --
------------ ------------ ------------
TOTAL ASSETS 6,167,270 10,414,576 12,515,677
------------ ------------ ------------
LIABILITIES
Payable for investment securities purchased -- -- 2,253,410
Due to Adviser (Note 3) 6,187 10,432 10,076
Accrued compliance service fees (Note 3) 383 383 383
------------ ------------ ------------
TOTAL LIABILITIES 6,570 10,815 2,263,869
------------ ------------ ------------
NET ASSETS $ 6,160,700 $ 10,403,761 $ 10,251,808
============ ============ ============
NET ASSETS CONSIST OF:
Paid-in capital $ 12,322,533 $ 13,455,575 $ 11,161,370
Accumulated undistributed net investment income (loss) 32,666 52,413 (29,303)
Accumulated net realized losses on investments (182,705) (610,496) (611,559)
Net unrealized depreciation on investments (6,011,794) (2,493,731) (268,700)
------------ ------------ ------------
NET ASSETS $ 6,160,700 $ 10,403,761 $ 10,251,808
============ ============ ============
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) 995,584 1,146,140 1,202,755
============ ============ ============
Net asset value, offering and redemption price per share (Note 2) $ 6.19 $ 9.08 $ 8.52
============ ============ ============
The accompanying notes are an integral part of the financial statements.
25
======================================================================================
MONTEAGLE FUNDS
STATEMENTS 0F OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 2009 (UNAUDITED)
======================================================================================
FIXED QUALITY LARGE CAP
INCOME GROWTH GROWTH
FUND FUND FUND
- --------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest $ 783,346 $ -- $ --
Dividends 3,725 85,843 121,193
------------ ------------ ------------
TOTAL INVESTMENT INCOME 787,071 85,843 121,193
------------ ------------ ------------
EXPENSES
Investment advisory fees (Note 3) 154,665 60,948 96,998
Trustees' fees 5,231 1,632 2,602
Compliance service fees (Note 3) 2,473 2,473 2,473
ICI membership fees 1,036 467 841
------------ ------------ ------------
TOTAL EXPENSES 163,405 65,520 102,914
------------ ------------ ------------
NET INVESTMENT INCOME 623,666 20,323 18,279
------------ ------------ ------------
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Net realized losses on investments (260,362) (980,145) (4,766,792)
Net change in unrealized appreciation
(depreciation) on investments 394,415 (4,601,576) (4,257,686)
------------ ------------ ------------
NET REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS 134,053 (5,581,721) (9,024,478)
------------ ------------ ------------
NET INCREASE (DECREASE) IN
NET ASSETS FROM OPERATIONS $ 757,719 $ (5,561,398) $ (9,006,199)
============ ============ ============
The accompanying notes are an integral part of the financial statements.
26
======================================================================================
MONTEAGLE FUNDS
STATEMENTS 0F OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 2009 (UNAUDITED)
======================================================================================
INFORMED
SELECT INVESTOR
VALUE VALUE GROWTH
FUND FUND FUND
- --------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest $ 773 $ -- $ --
Dividends 119,615 171,840 30,191
Foreign withholding tax -- (750) --
------------ ------------ ------------
TOTAL INVESTMENT INCOME 120,388 171,090 30,191
------------ ------------ ------------
EXPENSES
Investment advisory fees (Note 3) 47,499 75,624 55,525
Compliance service fees (Note 3) 2,473 2,473 2,473
Trustees' fees 1,273 2,020 1,496
ICI membership fees 399 649 --
------------ ------------ ------------
TOTAL EXPENSES 51,644 80,766 59,494
------------ ------------ ------------
NET INVESTMENT INCOME (LOSS) 68,744 90,324 (29,303)
------------ ------------ ------------
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Net realized gains on investments 25,538 45,194 708,943
Net change in unrealized appreciation
(depreciation) on investments (5,429,162) (8,847,422) (313,550)
------------ ------------ ------------
NET REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS (5,403,624) (8,802,228) 395,393
------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS $ (5,334,880) $ (8,711,904) $ 366,090
============ ============ ============
The accompanying notes are an integral part of the financial statements.
27
====================================================================================================
MONTEAGLE FIXED INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS
====================================================================================================
SIX MONTHS
ENDED YEAR
FEBRUARY 28, ENDED
2009 AUGUST 31,
(UNAUDITED) 2008
- ----------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income $ 623,666 $ 1,296,394
Net realized gains (losses) on investments (260,362) 47,540
Net change in unrealized appreciation (depreciation) on investments 394,415 281,937
------------ ------------
Net increase in net assets from operations 757,719 1,625,871
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (623,587) (1,296,394)
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold 85,111 1,487,622
Reinvestment of distributions to shareholders 585,359 1,200,696
Payments for shares redeemed (382,571) (3,569,831)
------------ ------------
Net increase (decrease) in net assets from capital share transactions 287,899 (881,513)
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 422,031 (552,036)
NET ASSETS
Beginning of period 32,321,421 32,873,457
------------ ------------
End of period $ 32,743,452 $ 32,321,421
============ ============
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME $ 79 $ --
============ ============
SUMMARY OF CAPITAL SHARE ACTIVITY
Shares sold 8,499 146,181
Shares issued in reinvestment of distribution to shareholders 58,586 118,803
Shares redeemed (38,186) (349,432)
------------ ------------
Net increase (decrease) in shares outstanding 28,899 (84,448)
Shares outstanding, beginning of period 3,217,084 3,301,532
------------ ------------
Shares outstanding, end of period 3,245,983 3,217,084
============ ============
The accompanying notes are an integral part of the financial statements.
28
====================================================================================================
MONTEAGLE QUALITY GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
====================================================================================================
SIX MONTHS
ENDED YEAR
FEBRUARY 28, ENDED
2009 AUGUST 31,
(UNAUDITED) 2008
- ----------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income (loss) $ 20,323 $ (8,062)
Net realized losses on investments (980,145) (255,405)
Net change in unrealized appreciation (depreciation) on investments (4,601,576) (377,494)
------------ ------------
Net decrease in net assets from operations (5,561,398) (640,961)
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold 662,579 1,597,287
Payments for shares redeemed (802,847) (1,624,942)
------------ ------------
Net decrease in net assets from capital share transactions (140,268) (27,655)
------------ ------------
TOTAL DECREASE IN NET ASSETS (5,701,666) (668,616)
NET ASSETS
Beginning of period 14,202,755 14,871,371
------------ ------------
End of period $ 8,501,089 $ 14,202,755
============ ============
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME $ 20,323 $ --
============ ============
SUMMARY OF CAPITAL SHARE ACTIVITY
Shares sold 109,667 183,296
Shares redeemed (134,707) (186,641)
------------ ------------
Net decrease in shares outstanding (25,040) (3,345)
Shares outstanding, beginning of period 1,679,067 1,682,412
------------ ------------
Shares outstanding, end of period 1,654,027 1,679,067
============ ============
The accompanying notes are an integral part of the financial statements.
29
====================================================================================================
MONTEAGLE LARGE CAP GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
====================================================================================================
SIX MONTHS
ENDED YEAR
FEBRUARY 28, ENDED
2009 AUGUST 31,
(UNAUDITED) 2008
- ----------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income (loss) $ 18,279 $ (62,258)
Net realized losses on investments (4,766,792) (112,406)
Net change in unrealized appreciation (depreciation) on investments (4,257,686) (3,453,136)
------------ ------------
Net decrease in net assets from operations (9,006,199) (3,627,800)
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold 7,862 432,054
Payments for shares redeemed (325,533) (3,026,980)
------------ ------------
Net decrease in net assets from capital share transactions (317,671) (2,594,926)
------------ ------------
TOTAL DECREASE IN NET ASSETS (9,323,870) (6,222,726)
NET ASSETS
Beginning of period 22,747,443 28,970,169
------------ ------------
End of period $ 13,423,573 $ 22,747,443
============ ============
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME $ 18,279 $ --
============ ============
SUMMARY OF CAPITAL SHARE ACTIVITY
Shares sold 1,598 63,364
Shares redeemed (79,651) (466,124)
------------ ------------
Net decrease in shares outstanding (78,053) (402,760)
Shares outstanding, beginning of period 3,620,861 4,023,621
------------ ------------
Shares outstanding, end of period 3,542,808 3,620,861
============ ============
The accompanying notes are an integral part of the financial statements.
30
====================================================================================================
MONTEAGLE SELECT VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
====================================================================================================
SIX MONTHS
ENDED YEAR
FEBRUARY 28, ENDED
2009 AUGUST 31,
(UNAUDITED) 2008
- ----------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income $ 68,744 $ 122,501
Net realized gains (losses) on investments 25,538 (196,168)
Net change in unrealized appreciation (depreciation) on investments (5,429,162) (1,821,329)
------------ ------------
Net decrease in net assets from operations (5,334,880) (1,894,996)
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (64,688) (113,679)
From net realized gains on investments -- (1,690,778)
------------ ------------
Decrease in net assets from distributions to shareholders (64,688) (1,804,457)
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold 28,704 309,853
Reinvestment of distributions to shareholders 58,597 1,624,984
Payments for shares redeemed (28,967) (361,021)
------------ ------------
Net increase in net assets from capital share transactions 58,334 1,573,816
------------ ------------
TOTAL DECREASE IN NET ASSETS (5,341,234) (2,125,637)
NET ASSETS
Beginning of period 11,501,934 13,627,571
------------ ------------
End of period $ 6,160,700 $ 11,501,934
============ ============
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME $ 32,666 $ 28,610
============ ============
SUMMARY OF CAPITAL SHARE ACTIVITY
Shares sold 3,762 24,033
Shares issued in reinvestment of distributions to shareholders 6,714 124,478
Shares redeemed (3,958) (29,164)
------------ ------------
Net increase in shares outstanding 6,518 119,347
Shares outstanding, beginning of period 989,066 869,719
------------ ------------
Shares outstanding, end of period 995,584 989,066
============ ============
The accompanying notes are an integral part of the financial statements.
31
====================================================================================================
MONTEAGLE VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
====================================================================================================
SIX MONTHS
ENDED YEAR
FEBRUARY 28, ENDED
2009 AUGUST 31,
(UNAUDITED) 2008
- ----------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income $ 90,324 $ 84,531
Net realized gains (losses) on investments 45,194 (651,422)
Net change in unrealized appreciation (depreciation) on investments (8,847,422) (471,978)
------------ ------------
Net decrease in net assets from operations (8,711,904) (1,038,869)
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (60,111) (133,912)
From net realized gains on investments -- (2,073,545)
------------ ------------
Decrease in net assets from distributions to shareholders (60,111) (2,207,457)
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold 516,077 1,587,809
Reinvestment of distributions to shareholders 3,092 13,713
Payments for shares redeemed (760,780) (2,032,009)
------------ ------------
Net decrease in net assets from capital share transactions (241,611) (430,487)
------------ ------------
TOTAL DECREASE IN NET ASSETS (9,013,626) (3,676,813)
NET ASSETS
Beginning of period 19,417,387 23,094,200
------------ ------------
End of period $ 10,403,761 $ 19,417,387
============ ============
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME $ 52,413 $ 22,200
============ ============
SUMMARY OF CAPITAL SHARE ACTIVITY
Shares sold 47,863 91,414
Shares issued in reinvestment of distributions to shareholders 278 774
Shares redeemed (66,593) (115,569)
------------ ------------
Net decrease in shares outstanding (18,452) (23,381)
Shares oustanding, beginning of period 1,164,592 1,187,973
------------ ------------
Shares oustanding, end of period 1,146,140 1,164,592
============ ============
The accompanying notes are an integral part of the financial statements.
32
====================================================================================================
MONTEAGLE INFORMED INVESTOR GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
====================================================================================================
SIX MONTHS
ENDED PERIOD
FEBRUARY 28, ENDED
2009 AUGUST 31,
(UNAUDITED) 2008 (a)
- ----------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment loss $ (29,303) $ (21,187)
Net realized gains (losses) on investments 708,943 (1,320,502)
Net change in unrealized appreciation (depreciation) on investments (313,550) 44,850
------------ ------------
Net increase (decrease) in net assets from operations 366,090 (1,296,839)
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold 3,032,795 10,500,545
Payments for shares redeemed (2,324,277) (26,506)
------------ ------------
Net increase in net assets from capital share transactions 708,518 10,474,039
------------ ------------
TOTAL INCREASE IN NET ASSETS 1,074,608 9,177,200
NET ASSETS
Beginning of period 9,177,200 --
------------ ------------
End of period $ 10,251,808 $ 9,177,200
============ ============
ACCUMULATED NET INVESTMENT LOSS $ (29,303) $ --
============ ============
SUMMARY OF CAPITAL SHARE ACTIVITY
Shares sold 444,416 1,043,027
Shares redeemed (282,087) (2,601)
------------ ------------
Net increase in shares outstanding 162,329 1,040,426
Shares outstanding, beginning of period 1,040,426 --
------------ ------------
Shares outstanding, end of period 1,202,755 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.
33
===================================================================================================================================
MONTEAGLE FIXED INCOME FUND
FINANCIAL HIGHLIGHTS
===================================================================================================================================
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
FEBRUARY 28, ENDED ENDED ENDED ENDED ENDED
2009 AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
(UNAUDITED) 2008 2007 2006 2005 2004
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at
beginning of period $ 10.05 $ 9.96 $ 9.91 $ 10.38 $ 10.77 $ 10.96
---------- ---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income 0.19 0.40 0.40 0.38(a) 0.38 0.41
Net realized and unrealized
gains (losses) on investments 0.04 0.09 0.05 (0.31) (0.20) (0.03)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 0.23 0.49 0.45 0.07 0.18 0.38
---------- ---------- ---------- ---------- ---------- ----------
Less distributions:
From net investment income (0.19) (0.40) (0.40) (0.38) (0.38) (0.41)
From net realized gains
on investments -- -- -- (0.16) (0.19) (0.16)
---------- ---------- ---------- ---------- ---------- ----------
Total distributions (0.19) (0.40) (0.40) (0.54) (0.57) (0.57)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value at end of period $ 10.09 $ 10.05 $ 9.96 $ 9.91 $ 10.38 $ 10.77
========== ========== ========== ========== ========== ==========
Total return (b) 2.35%(c) 4.94% 4.68% 0.78% 1.72% 3.49%
========== ========== ========== ========== ========== ==========
Net assets at end of period (000's) $ 32,743 $ 32,321 $ 32,873 $ 42,447 $ 24,087 $ 26,423
========== ========== ========== ========== ========== ==========
Ratio of operating expenses to
average net assets after
reimbursement/waiver of fees 1.02%(d) 1.01% 1.00% 1.00% 1.17% 1.15%
Ratio of operating expenses to
average net assets before
reimbursement/waiver of fees 1.02%(d) 1.01% 1.00% 1.13% 1.17% 1.15%
Ratio of net investment income to
average net assets after
reimbursement/waiver of fees 3.88%(d) 3.93% 4.12% 3.75% 3.63% 3.71%
Portfolio turnover rate 21%(c) 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.
(c) Not annualized.
(d) Annualized.
The accompanying notes are an integral part of the financial statements.
34
===================================================================================================================================
MONTEAGLE QUALITY GROWTH FUND
FINANCIAL HIGHLIGHTS
===================================================================================================================================
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
SIX MONTHS
ENDED YEAR YEAR EIGHT MONTHS YEAR YEAR YEAR
FEBRUARY 28, ENDED ENDED ENDED ENDED ENDED ENDED
2009 AUGUST 31, AUGUST 31, AUGUST 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
(UNAUDITED) 2008 2007 2006 (a) 2005 2004 2003
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at
beginning of period $ 8.46 $ 8.84 $ 7.75 $ 7.90 $ 7.69 $ 7.40 $ 6.16
-------- -------- -------- -------- -------- -------- --------
Income (loss) from
investment operations:
Net investment
income (loss) 0.01 (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 (3.33) (0.38) 1.10 (0.15) 0.21 0.29 1.25
-------- -------- -------- -------- -------- -------- --------
Total from investment
operations (3.32) (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 $ 5.14 $ 8.46 $ 8.84 $ 7.75 $ 7.90 $ 7.69 $ 7.40
======== ======== ======== ======== ======== ======== ========
Total return (g) (39.24%)(h) (4.30%) 14.06% (1.90%)(h) 2.77% 4.11% 20.20%
======== ======== ======== ======== ======== ======== ========
Net assets at end
of period (000's) $ 8,501 $ 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 1.29%(i) 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 1.29%(i) 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 0.40%(i) (0.05%) (0.08%) (0.08%)(i) (0.04%) 0.19% (0.11%)
Portfolio turnover rate 18%(h) 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.
35
===================================================================================================================================
MONTEAGLE LARGE CAP GROWTH FUND
FINANCIAL HIGHLIGHTS
===================================================================================================================================
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
FEBRUARY 28, ENDED ENDED ENDED ENDED ENDED
2009 AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
(UNAUDITED) 2008 2007 2006 2005 2004
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at
beginning of period $ 6.28 $ 7.20 $ 6.02 $ 6.27 $ 5.43 $ 4.99
---------- ---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income (loss) 0.01 (0.02) (0.03) (0.04)(a) (0.03) (0.04)
Net realized and unrealized
gains (losses) on investments (2.50) (0.90) 1.21 (0.21) 0.87 0.49
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations (2.49) (0.92) 1.18 (0.25) 0.84 0.45
---------- ---------- ---------- ---------- ---------- ----------
Less distributions:
From net investment income -- -- -- -- -- (0.01)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value at end of period $ 3.79 $ 6.28 $ 7.20 $ 6.02 $ 6.27 $ 5.43
========== ========== ========== ========== ========== ==========
Total return (b) (39.65%)(c) (12.78%) 19.60% (3.99%) 15.47% 8.89%
========== ========== ========== ========== ========== ==========
Net assets at end
of period (000's) $ 13,424 $ 22,747 $ 28,970 $ 28,773 $ 31,361 $ 12,867
========== ========== ========== ========== ========== ==========
Ratio of operating expenses to
average net assets after
reimbursement/waiver of fees 1.27%(d) 1.24% 1.21% 1.21% 1.36% 1.37%
Ratio of operating expenses to
average net assets before
reimbursement/waiver of fees 1.27%(d) 1.24% 1.21% 1.32% 1.36% 1.37%
Ratio of net investment income
(loss) to average net assets after
reimbursement/waiver of fees 0.23%(d) (0.23%) (0.48%) (0.62%) (0.56%) (0.75%)
Portfolio turnover rate 38%(c) 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.
(c) Not annualized.
(d) Annualized.
The accompanying notes are an integral part of the financial statements.
36
===================================================================================================================================
MONTEAGLE SELECT VALUE FUND
FINANCIAL HIGHLIGHTS
===================================================================================================================================
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
SIX MONTHS
ENDED YEAR YEAR EIGHT MONTHS YEAR YEAR YEAR
FEBRUARY 28, ENDED ENDED ENDED ENDED ENDED ENDED
2009 AUGUST 31, AUGUST 31, AUGUST 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
(UNAUDITED) 2008 2007 2006 (a) 2005 2004 2003
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at
beginning of period $ 11.63 $ 15.67 $ 14.02 $ 13.48 $ 13.51 $ 11.84 $ 8.95
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income (loss) from
investment operations:
Net investment income 0.07 0.13 0.13 0.12(b) 0.11(b) 0.12(b) 0.14(b)
Net realized and
unrealized gains (losses)
on investments (5.44) (2.11) 1.98 0.50 0.08 1.67 2.90
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total from investment
operations (5.37) (1.98) 2.11 0.62 0.19 1.79 3.04
---------- ---------- ---------- ---------- ---------- ---------- ----------
Less distributions:
From net investment
income (0.07) (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 (0.07) (2.06) (0.46) (0.08) (0.22) (0.12) (0.15)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net asset value at
end of period $ 6.19 $ 11.63 $ 15.67 $ 14.02 $ 13.48 $ 13.51 $ 11.84
========== ========== ========== ========== ========== ========== ==========
Total return (c) (46.38%)(d) (14.01%) 15.21% 4.60%(d) 1.45% 15.18% 34.24%
========== ========== ========== ========== ========== ========== ==========
Net assets at end
of period (000's) $ 6,161 $ 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 1.31%(e) 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 1.31%(e) 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 1.74%(e) 1.00% 0.82% 1.25%(e) 0.93% 0.98% 1.44%
Portfolio turnover rate 16%(d) 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.
37
===================================================================================================================================
MONTEAGLE VALUE FUND
FINANCIAL HIGHLIGHTS
===================================================================================================================================
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
FEBRUARY 28, ENDED ENDED ENDED ENDED ENDED
2009 AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
(UNAUDITED) 2008 2007 2006 2005 2004
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at
beginning of period $ 16.67 $ 19.44 $ 16.55 $ 15.43 $ 12.16 $ 10.92
---------- ---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income 0.08 0.07 0.20 0.19(a) 0.15 0.10
Net realized and unrealized
gains (losses) on investments (7.62) (0.97) 2.98 1.07 3.16 1.33
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations (7.54) (0.90) 3.18 1.26 3.31 1.43
---------- ---------- ---------- ---------- ---------- ----------
Less distributions:
From net investment income (0.05) (0.11) (0.29) (0.14) (0.04) (0.10)
From net realized gains
on investments -- (1.76) -- -- -- (0.09)
---------- ---------- ---------- ---------- ---------- ----------
Total distributions (0.05) (1.87) (0.29) (0.14) (0.04) (0.19)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value at end of period $ 9.08 $ 16.67 $ 19.44 $ 16.55 $ 15.43 $ 12.16
========== ========== ========== ========== ========== ==========
Total return (b) (45.28%)(c) (5.14%) 19.40% 8.25% 27.30% 13.10%
========== ========== ========== ========== ========== ==========
Net assets at end of period (000's) $ 10,404 $ 19,417 $ 23,094 $ 20,893 $ 20,123 $ 16,328
========== ========== ========== ========== ========== ==========
Ratio of operating expenses to
average net assets after
reimbursement/waiver of fees 1.28%(d) 1.25% 1.22% 1.23% 1.37% 1.36%
Ratio of operating expenses to
average net assets before
reimbursement/waiver of fees 1.28%(d) 1.25% 1.22% 1.35% 1.37% 1.36%
Ratio of net investment income to
average net assets after
reimbursement/waiver of fees 1.44%(d) 0.40% 1.07% 1.14% 1.07% 0.85%
Portfolio turnover rate 0% 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.
(c) Not annualized.
(d) Annualized.
The accompanying notes are an integral part of the financial statements.
38
======================================================================================
MONTEAGLE INFORMED INVESTOR GROWTH FUND
FINANCIAL HIGHLIGHTS
======================================================================================
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
SIX MONTHS
ENDED PERIOD
FEBRUARY 28, ENDED
2009 AUGUST 31,
(UNAUDITED) 2008 (a)
- --------------------------------------------------------------------------------------
Net asset value at beginning of period $ 8.82 $ 10.00
---------- ----------
Loss from investment operations:
Net investment loss (0.02) (0.02)
Net realized and unrealized losses on investments (0.28) (1.16)
---------- ----------
Total from investment operations (0.30) (1.18)
---------- ----------
Net asset value at end of period $ 8.52 $ 8.82
========== ==========
Total return (b) (3.40%)(c) (11.80%)(c)
========== ==========
Net assets at end of period (000's) $ 10,252 $ 9,177
========== ==========
Ratio of operating expenses to average net assets 1.28%(d) 1.27%(d)
Ratio of net investment loss to average net assets (0.63%)(d) (0.60%)(d)
Portfolio turnover rate 2,009%(c) 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 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.
(c) Not annualized.
(d) Annualized.
The accompanying notes are an integral part of the financial statements.
39
================================================================================
MONTEAGLE FUNDS
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2009 (UNAUDITED)
================================================================================
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 February 28, 2009, no securities were valued at
fair value. Securities with maturities of 60 days or less may be 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.
The Financial Accounting Standards Board's ("FASB") Statement on Financial
Accounting Standards No. 157 "Fair Value Measurements" establishes a single
authoritative definition of fair value, sets out a framework for measuring fair
value and requires additional disclosures about fair value measurements.
40
================================================================================
MONTEAGLE FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
Various inputs are used in determining the value of each of the Fund's
investments. These inputs are summarized in the three broad levels listed below:
o Level 1 - quoted prices in active markets for identical securities
o Level 2 - other significant observable inputs
o Level 3 - significant unobservable inputs
The inputs or methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value Fixed Income Fund's
investments as of February 28, 2009:
MONTEAGLE FIXED
VALUATION INPUTS INCOME FUND
- --------------------------------------------------------------------------------
Level 1 - Quoted Prices $ 759,316
Level 2 - Other Significant Observable Inputs 31,660,065
------------
Total $ 32,419,381
============
- --------------------------------------------------------------------------------
As of February 28, 2009, all of the inputs used to value the investments of
Quality Growth Fund, Large Cap Growth Fund, Select Value Fund, Value Fund and
Informed Investor Growth Fund were Level 1.
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.
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.
41
================================================================================
MONTEAGLE FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
The tax character of distributions paid during the six months ended February 28,
2009 was as follows:
ORDINARY LONG-TERM
INCOME CAPITAL GAIN TOTAL
- --------------------------------------------------------------------------------
Fixed Income Fund $ 623,587 $ -- $ 623,587
Select Value Fund 64,688 -- 64,688
Value Fund 60,111 -- 60,111
- --------------------------------------------------------------------------------
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 Fund $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
- --------------------------------------------------------------------------------
Quality Growth Fund, Large Cap Growth Fund and Informed Investor Growth Fund
paid no distributions during the periods ended February 28, 2009 and August 31,
2008.
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.
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 by the Funds during the six months
ended February 28, 2009.
COMMON EXPENSES -- Common expenses of the Trust are allocated among the Funds
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
42
================================================================================
MONTEAGLE FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
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 pays
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 agreements, 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 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 six months ended February 28, 2009, the advisory fees earned by and
payable to the Advisers were as follows:
ADVISORY
ADVISORY FEES PAYABLE
FEES EARNED AS OF 2/28/2009
- --------------------------------------------------------------------------------
Fixed Income Fund $154,665 $ 24,149
Quality Growth Fund $ 60,948 $ 8,473
Large Cap Growth Fund $ 96,998 $ 13,291
Select Value Fund $ 47,499 $ 6,187
Value Fund $ 75,624 $ 10,432
Informed Investor Growth Fund $ 55,525 $ 10,076
43
================================================================================
MONTEAGLE FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
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,
L.P. ("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, Inc. ("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
& Company ("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.
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 $225,000, 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. Each Fund pays $5,000 annually to Parkway for
providing CCO services.
44
================================================================================
MONTEAGLE FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
4. SECURITIES TRANSACTIONS
During the six months ended February 28, 2009, 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 INVESTOR
INCOME GROWTH GROWTH VALUE VALUE GROWTH
FUND FUND FUND FUND FUND FUND
- -------------------------------------------------------------------------------------------------------------------
Purchases of
investment securities $ 1,974,709 $ 2,034,148 $ 6,125,921 $ 1,578,873 $ -- $119,267,060
============ ============ ============ ============ ============ ============
Proceeds from sales of
investment securities $ 2,350,500 $ 1,913,719 $ 7,680,481 $ 1,169,059 $ -- $122,777,792
============ ============ ============ ============ ============ ============
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.
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 following information is computed on a tax basis for each item as of
February 28, 2009:
INFORMED
FIXED QUALITY LARGE CAP SELECT INVESTOR
INCOME GROWTH GROWTH VALUE VALUE GROWTH
FUND FUND FUND FUND FUND FUND
- -------------------------------------------------------------------------------------------------------------------
Accumulated
ordinary income $ 79 $ 20,323 $ 18,279 $ 32,691 $ 52,413 $ --
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)
Other gains (losses) (260,362) (978,333) (4,766,792) 25,538 45,194 646,557
Net unrealized
appreciation
(depreciation) 490,059 (3,495,579) (1,883,860) (6,011,794) (2,493,731) (273,465)
------------ ------------ ------------ ------------ ------------ ------------
Accumulated deficit $ (1,252,949) $ (7,395,477) $(11,706,607) $ (6,161,833) $ (3,051,814) $ (909,562)
============ ============ ============ ============ ============ ============
45
================================================================================
MONTEAGLE FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
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 the current and 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
==========
Large Cap Growth Fund $2,182,811 2011
2,165,647 2012
309,209 2013
155,209 2014
----------
$4,812,876
==========
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 the current and future
years to offset net realized capital gains prior to distributing such gains to
shareholders.
46
================================================================================
MONTEAGLE FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
The following information is based upon the federal income tax cost of the
investment securities as of February 28, 2009:
INFORMED
FIXED QUALITY LARGE CAP SELECT INVESTOR
INCOME GROWTH GROWTH VALUE VALUE GROWTH
FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------
Federal tax cost $ 31,929,322 $ 11,986,750 $ 15,293,725 $ 12,149,303 $ 12,852,474 $ 6,559,967
============ ============ ============ ============ ============ ============
Gross unrealized
appreciation $ 850,156 $ 203,863 $ 598,776 $ 5,769 $ 1,279,879 $ --
Gross unrealized
depreciation (360,097) (3,699,442) (2,482,636) (6,017,563) (3,773,610) (273,465)
------------ ------------ ------------ ------------ ------------ ------------
Net unrealized
appreciation
(depreciation) $ 490,059 $ (3,495,579) $ (1,883,860) $ (6,011,794) $ (2,493,731) $ (273,465)
============ ============ ============ ============ ============ ============
The difference between the federal income tax cost of portfolio investments and
the financial statement cost for Quality Growth Fund and Informed Investor
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.
FASB Interpretation No. 48 ("FIN 48"), "Accounting for Uncertainty in Income
Taxes," a clarification of FASB No. 109 "Accounting for Income Taxes,"
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 February 29, 2008 effective date. The adoption
of FIN 48 had no impact on the Funds' net assets or results of operations.
As of and during the six months ended February 28, 2009, 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 six months February 28,
2009, the Funds did not incur any interest or penalties.
47
================================================================================
MONTEAGLE FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
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 February 28, 2009,
the following shareholders owned of record the following percentages of the
outstanding shares of each Fund:
PERCENT OWNED AS OF
SHAREHOLDER FEBRUARY 28, 2009
- --------------------------------------------------------------------------------------
Fixed Income Fund Farmers and Merchant Corp. 60%
Hubco Regions Financial Corp. 36%
Quality Growth Fund Charles Schwab & Co., Inc. 53%
Hubco Regions Financial Corp. 36%
Large Cap Growth Fund Farmers and Merchant Corp. 97%
Select Value Fund Hubco Regions Financial Corp. 85%
Value Fund Farmers and Merchant Corp. 89%
Informed Investor Growth Fund Farmers and Merchant Corp. 62%
Louis S. and Alexandra F. Wells 37%
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.
8. SECTOR RISK
When the Funds emphasize one or more economic sectors, they 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.
48
================================================================================
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, respectively. 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).
49
================================================================================
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 (September 1, 2008) and held until the end of the
period (February 28, 2009).
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.
50
================================================================================
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
SEPTEMBER 1, 2008 FEBRUARY 28, 2009 DURING PERIOD*
- ------------------------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,023.50 $5.12
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,019.74 $5.11
- ------------------------------------------------------------------------------------------------
* Expenses are equal to Fixed Income Fund's annualized expense ratio of
1.02% for the period, multiplied by the average account value over the
period, multiplied by 181/365 (to reflect the one-half year period).
QUALITY GROWTH FUND
- ------------------------------------------------------------------------------------------------
BEGINNING ENDING
ACCOUNT VALUE ACCOUNT VALUE EXPENSES PAID
SEPTEMBER 1, 2008 FEBRUARY 28, 2009 DURING PERIOD*
- ------------------------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $ 607.60 $5.14
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,018.40 $6.46
- ------------------------------------------------------------------------------------------------
* Expenses are equal to Quality Growth Fund's annualized expense ratio of
1.29% for the period, multiplied by the average account value over the
period, multiplied by 181/365 (to reflect the one-half year period).
LARGE CAP GROWTH FUND
- ------------------------------------------------------------------------------------------------
BEGINNING ENDING
ACCOUNT VALUE ACCOUNT VALUE EXPENSES PAID
SEPTEMBER 1, 2008 FEBRUARY 28, 2009 DURING PERIOD*
- ------------------------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $ 603.50 $5.05
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,018.50 $6.36
- ------------------------------------------------------------------------------------------------
* Expenses are equal to Large Cap Growth Fund's annualized expense ratio of
1.27% for the period, multiplied by the average account value over the
period, multiplied by 181/365 (to reflect the one-half year period).
51
================================================================================
MONTEAGLE FUNDS
ABOUT YOUR FUNDS' EXPENSES (UNAUDITED) (CONTINUED)
================================================================================
SELECT VALUE FUND
- -----------------------------------------------------------------------------------------------
BEGINNING ENDING
ACCOUNT VALUE ACCOUNT VALUE EXPENSES PAID
SEPTEMBER 1, 2008 FEBRUARY 28, 2009 DURING PERIOD*
- -----------------------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $ 536.20 $4.99
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,018.30 $6.56
- -----------------------------------------------------------------------------------------------
* Expenses are equal to Select Value Fund's annualized expense ratio of
1.31% for the period, multiplied by the average account value over the
period, multiplied by 181/365 (to reflect the one-half year period).
VALUE FUND
- -----------------------------------------------------------------------------------------------
BEGINNING ENDING
ACCOUNT VALUE ACCOUNT VALUE EXPENSES PAID
SEPTEMBER 1, 2008 FEBRUARY 28, 2009 DURING PERIOD*
- -----------------------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $ 547.20 $4.91
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,018.45 $6.41
- -----------------------------------------------------------------------------------------------
* Expenses are equal to Value Fund's annualized expense ratio of 1.28% for
the period, multiplied by the average account value over the period,
multiplied by 181/365 (to reflect the one-half year period).
INFORMED INVESTOR GROWTH FUND
- -----------------------------------------------------------------------------------------------
BEGINNING ENDING
ACCOUNT VALUE ACCOUNT VALUE EXPENSES PAID
SEPTEMBER 1, 2008 FEBRUARY 28, 2009 DURING PERIOD*
- -----------------------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $ 966.00 $6.24
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,018.45 $6.41
- -----------------------------------------------------------------------------------------------
* Expenses are equal to Informed Investor Growth Fund's annualized expense
ratio of 1.28% for the period, multiplied by the average account value
over the period, multiplied by 181/365 (to reflect the one-half year
period).
52
================================================================================
MONTEAGLE FUNDS
BOARD APPROVAL OF MANAGEMENT AGREEMENT FOR THE FUNDS (UNAUDITED)
================================================================================
At a Special Meeting of Shareholders on April 17, 2009, Shareholders of the
Quality Growth Fund and the Select Value Fund (individually, a "Fund" and
collectively, the "Funds") approved a new Management Agreement between the Trust
and Nashville Capital Corporation (the "New Management Agreement"). Proxy
materials were prepared after the Board of Trustees' (the "Board") consideration
of data concerning Nashville Capital Corporation (the "Adviser").
The Board met and evaluated the New Management Agreement on February 23, 2009.
In connection with the February 23, 2009 meeting, the Independent Trustees
requested and evaluated information they deemed reasonably necessary to their
review process during a meeting on January 30, 2009. The Board received
information describing the services to be provided by the Adviser, including
information about (i) the nature, extent and quality of services to be provided
by the Adviser; (ii) the investment performance of the Quality Growth Fund and
the Select Value Funds measured against appropriate benchmarks; and (iii)
general information about the Adviser. 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 Nashville Capital Corporation and its personnel and the Adviser's
investment and compliance oversight process. The Board also considered
information concerning the Adviser's financial condition and the quality of
services provided - including their review and coordination with and of
sub-advisers of each applicable Fund. A representative of the Adviser was
present at the Board meeting to discuss operations and performance. The Board
also reviewed information on the performance of the Quality Growth Fund and the
Select Value Fund, along with the performance information of a relevant
securities index and a group of peer funds. The Board noted Nashville Capital
Corporation's ability to monitor the performance of the Funds under its
management agreement with the Trust; and to assist the subadvisors with
evaluating and enhancing the performance of those Funds. Based on the
information provided and the Board's previous experience with the Nashville
Capital Corporation, the Board concluded that the nature and extent of the
services provided and to be provided by the Adviser was appropriate and that the
quality was good.
FEES AND EXPENSES. The Board of Trustees considered the management fee rates
proposed under the New Management Agreement. The Board noted that the fee rates
of the New Management Agreement are identical to the fee rates under the current
Management Agreement; that the Agreements have a "universal fee" structure under
which the Advisers receive a higher fee in exchange for the Advisers' agreement
to pay all Trust/Fund expenses not excepted out - that is, to be paid by the
Trust/Funds, under the Agreement; that the proposed amendment adds to the
expenses to be paid by the Trust/Funds; and that the added expenses to be paid
by the Trust/Funds are items typically under the exclusive discretion of the
Board. The Board reviewed the total expense ratios for the Quality Growth Fund
and Select Value Fund in relation to those of comparable funds. The Board also
reviewed information associated with the Trustee Expenses and CCO fees which is
the same under the Current Management Agreement and proposed New Management
Agreement. The Board noted that the "universal fee" currently charged by Parkway
Advisors, LP would not change with Nashville Capital Corporation and was
competitive with the average for similar funds. The Board concluded that the
management fee (including excepted expenses) was reasonable and appropriate in
amount given the quality of services previously provided and currently proposed.
53
================================================================================
MONTEAGLE FUNDS
BOARD APPROVAL OF MANAGEMENT AGREEMENT FOR THE FUNDS (UNAUDITED) (CONTINUED)
================================================================================
PROFITABILITY. The Board considered information regarding the costs of services
provided and profitability of the Adviser with respect to its fees received
under the New Management Agreement. The Board concluded that the profits
expected by Nashville Capital Corporation were not unreasonable.
ECONOMIES OF SCALE. As part of its review of the New Management Agreement, the
Board considered whether there will be economies of scale with respect to the
management of the Funds by one Adviser and whether each Fund will benefit from
any economies of scale. The Board noted the presence of breakpoints in the
management fees that will provide shareholders with the benefit of lower
expenses at higher asset levels. The Board concluded that, given the nature and
size of the Fund and the costs of the Adviser in providing services, the
management fee reflects an appropriate level of sharing of any economies of
scale.
OTHER BENEFITS TO THE ADVISERS. The Board noted that Nashville Capital
Corporation indicated that it does not believe it will receive any fall-out
benefits as a result of its relationship with the Quality Growth Fund and the
Select Value Fund. The Board also considered that Nashville Capital Corporation
does not expect nor does it have any soft-dollar arrangements associated with
the Funds.
Based upon these considerations, the Board, including all of the Independent
Trustees voting separately, concluded that that the terms of the Mew Management
Agreement are fair and reasonable and that approval of the New Management
Agreement is in the best interests of the Funds and their shareholders; that the
services to be performed under the New Management Agreement are services
required for the operation of the Funds; that the Adviser has provided
satisfactory advisory services in the past; and that the fees for the advisory
services which the Adviser will perform were within the range of what would have
been negotiated at arm's length in light of the circumstances.
54
================================================================================
MONTEAGLE FUNDS
BOARD APPROVAL OF INVESTMENT SUBADVISORY AGREEMENT FOR THE MONTEAGLE FIXED
INCOME FUND (UNAUDITED)
================================================================================
On October 17, 2008, the Board of Trustees (the "Board") of the Monteagle Funds
(the "Trust") met and evaluated the Subadvisory Agreement between the Trust,
Nashville Capital Corporation (the "Adviser") and Howe & Rusling, Inc. ("H&R")
with respect to the Monteagle Fixed Income Fund (the "Fixed Income 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 H&R, including information about (i) the nature,
extent and quality of services to be provided by H&R; (ii) the investment
performance of the Fixed Income Fund measured against appropriate benchmarks;
and (iii) general information about H&R. 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 H&R, the portfolio management team and support staff of H&R. The
Board reviewed H&R's investment strategy and process for the Fixed Income Fund,
H&R's financial condition and considered the quality of services provided. The
Board also reviewed information on the performance of the Fixed Income Fund and
the performance of its benchmark index and a group of peer funds. The comparison
revealed that the Fixed Income Fund has been managed with a long-term
perspective and has been strictly managed within stated objectives and
limitations to maintain the desired style; that H&R's short and long-term
performance was generally better than the group of peer funds; and that, while
the performance of the strategy has typically not led to performance better than
the Fund's benchmark index, H&R's long-term performance was in-line when taking
the Fixed Income Fund's investment restrictions and higher quality portfolio
into account. Based on the information provided and the Board's previous
experience with H&R, the Board concluded that the nature and extent of the
services provided and to be provided by H&R were appropriate and that the
quality of the services was acceptable.
FEES. The Board considered the subadvisory fee rates under the Subadvisory
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
H&R with respect to its fees received under the Subadvisory Agreement. The Board
considered that the subadvisory fee rates were negotiated at arm's length
between Nashville Capital and H&R, and that H&R is paid by Nashville Capital.
The Board concluded that the profits realized by H&R were not unreasonable.
ECONOMIES OF SCALE. The Board considered the extent to which economies of scale
have been realized as the Fixed Income Fund's assets have grown and whether
subadvisory fee levels reflect those economies of scale for the benefit of the
Fund's investors. Following further discussion of the Fixed Income Fund's asset
levels, expectations for growth and fee levels, the Board of Trustees 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 H&R.
OTHER BENEFITS TO H&R. The Board noted that H&R has indicated that H&R does not
enjoy "fall-out" benefits as a result of its relationship with the Fixed Income
Fund.
55
================================================================================
MONTEAGLE FUNDS
BOARD APPROVAL OF INVESTMENT SUBADVISORY AGREEMENT FOR THE MONTEAGLE FIXED
INCOME FUND (UNAUDITED) (CONTINUED)
================================================================================
Based upon these considerations, the Board, including all of the Independent
Trustees voting separately, concluded that that the terms of the Subadvisory
Agreement were fair and reasonable and that approval of the Agreement for an
additional annual period was in the best interests of the Fixed Income Fund and
its shareholders; that the services to be performed under the Subadvisory
Agreement were services required for the operation of the Fixed Income Fund;
that H&R has provided satisfactory advisory services to the Fixed Income Fund in
the past; and that the fees for the advisory services which H&R will perform
were within the range of what would have been negotiated at arm's length in
light of the circumstances.
56
================================================================================
MONTEAGLE FUNDS
BOARD APPROVAL OF INVESTMENT SUBADVISORY AGREEMENT FOR THE QUALITY GROWTH
FUND (UNAUDITED)
================================================================================
At a Special Meeting of Shareholders on April 17, 2009, Shareholders of the
Quality Growth Fund (the "Fund") approved a new Subadvisory Agreement between
the Trust, Nashville Capital Corporation (the "New Adviser") and Davis Hamilton
Jackson & Associates, L.P. (the "Subadviser") with respect to the Fund (the "New
Subadvisory Agreement"). Proxy materials were prepared after the Board of
Trustees' (the "Board") consideration of data concerning the Subadviser.
The Board met and evaluated the New Sub-advisory Agreement on February 23, 2009.
Prior to the February 23, 2009 meeting, the Board, including the Independent
Trustees, reviewed and evaluated materials received in connection with a
Subadvisory Agreement by and among the Trust, Parkway Advisors, LP and the
Subadviser, dated October 19, 2007 (the "Original Subadvisory Agreement"), as
well as updated information and performance reports. The Independent Trustees
previously received a memorandum from counsel to the Independent Trustees
describing their duties in connection with contract approvals. The Independent
Trustees requested and evaluated information they deemed reasonably necessary as
part of the review process. After reviewing all of the information and
considering all prior dealings with the Subadviser, the Independent Trustees
recommended approval of the New Subadvisory Agreement to the full Board.
As a result of the process described above, the Board discussed information
describing the services to be provided by the Subadviser, including information
about (i) the nature, extent and quality of services to be provided by the
Subadviser; (ii) the proposed subadvisory fee rates relative to a peer group;
(iii) the investment performance of the Fund measured against appropriate
benchmarks; and (iv) general information about the Subadviser. The Independent
Trustees were advised by experienced independent counsel throughout their
deliberations. At its meeting, the Board considered:
NATURE, EXTENT AND QUALITY OF SERVICES. The Board discussed the functions
performed by the Subadviser, the portfolio management team and support staff of
the Subadviser and the Subadviser's investment strategy and process for the
Fund, the Subadviser's financial condition, and considered the quality of
services provided. The Board also reviewed information on the performance of the
Fund, along with the performance information of a relevant securities index and
a group of peer funds; noting that the Subadviser strictly adhered to the style
designated for the Fund, that its performance in the recent market turmoil was
ahead of many of its peers. Based on the information provided and the Board's
previous experience with the Subadviser, the Board concluded that the nature and
extent of the services provided and to be provided by the Subadviser were
appropriate and that the quality was good.
FEES. The Board considered the subadvisory fee rates proposed under the New
Subadvisory Agreement. The Board noted that the fee rates under the New
Subadvisory Agreement are identical to the fee rates under the Original
Subadvisory Agreement. The Board noted that the fee charged by the Subadviser
for the Fund was competitive and below the average for similar funds. The Board
concluded that the subadvisory fee was reasonable and appropriate in amount
given the services provided.
57
================================================================================
MONTEAGLE FUNDS
BOARD APPROVAL OF INVESTMENT SUBADVISORY AGREEMENT FOR THE QUALITY GROWTH
FUND (UNAUDITED) (CONTINUED)
================================================================================
PROFITABILITY. The Board discussed the profitability information previously
provided by the Subadviser with respect to its fees received under the Original
Subadvisory Agreement. The Board considered that the subadvisory fee rates were
negotiated at arm's length between the New Adviser and the Subadviser, and that
the Subadviser would be paid by the New Adviser. The Board concluded that the
profits realized by the Subadviser were not unreasonable.
ECONOMIES OF SCALE. As part of its review of the New Subadvisory Agreement, the
Board considered whether there will be economies of scale with respect to the
management of the Fund and whether the Fund will benefit from any economies of
scale. The Board noted that the Subadviser has represented that economies of
scale might be realized as a result of asset growth. The Board noted the
presence of breakpoints in the management fees that will provide shareholders
with the benefit of lower expenses at higher asset levels. The Board considered
that for the Fund that, given the nature and size of the Fund and the costs of
the Subadviser in providing portfolio management services, the subadvisory fee
reflects an appropriate level of sharing of any economies of scale.
OTHER BENEFITS TO THE SUBADVISER. The Board noted that the Subadviser has
indicated that the Subadviser does not believe it receives any fall-out benefits
as a result of its relationship with the Fund itself. However, the Board
considered that the Subadviser has soft-dollar arrangements on behalf of its
equity portfolios including the Fund.
Based upon these considerations, the Board, including all of the Independent
Trustees voting separately, concluded that that the terms of the New Subadvisory
Agreement were fair and reasonable and that approval of the Agreement was in the
best interests of the Fund and its shareholders; that the services to be
performed under the New Subadvisory Agreement were services required for the
operation of the Fund; that the Subadviser has provided satisfactory advisory
services to the Fund in the past; and that the fees for the advisory services
which the Subadviser will perform were within the range of what would have been
negotiated at arm's length in light of the circumstances.
58
================================================================================
MONTEAGLE FUNDS
BOARD APPROVAL OF INVESTMENT SUBADVISORY AGREEMENT FOR THE SELECT VALUE
FUND (UNAUDITED)
================================================================================
At a Special Meeting of Shareholders on April 17, 2009, Shareholders of the
Select Value Fund (the "Fund") approved a new Subadvisory Agreement between the
Trust, Nashville Capital Corporation (the "New Adviser") and Parkway Advisors,
LP ("Parkway") with respect to the Fund (the "New Subadvisory Agreement"). Proxy
materials were prepared after the Board of Trustees' (the "Board") consideration
of data concerning Parkway.
The Board met and evaluated the New Sub-advisory Agreement on February 23, 2009.
Prior to the February 23, 2009 meeting, the Board, including the Independent
Trustees, reviewed and evaluated materials received in connection with a
Management Agreement by and among the Trust, Nashville Capital Corporation and
Parkway, as amended January 11, 2008 (the "Current Management Agreement"), as
well as updated information and performance reports. The Independent Trustees
previously received a memorandum from counsel to the Independent Trustees
describing their duties in connection with contract approvals. The Independent
Trustees requested and evaluated information they deemed reasonably necessary as
part of the review process. After reviewing all of the information and
considering all prior dealings with Parkway, the Independent Trustees
recommended approval of the New Subadvisory Agreement to the full Board.
As a result of the process described above, the Board discussed information
describing the services to be provided by Parkway, including information about
(i) the nature, extent and quality of services to be provided by Parkway; (ii)
the proposed subadvisory fee rates relative to a peer group; (iii) the
investment performance of the Fund measured against appropriate benchmarks; and
(iv) general information about Parkway. The Independent Trustees were advised by
experienced independent counsel throughout their deliberations. At its meeting,
the Board considered:
NATURE, EXTENT AND QUALITY OF SERVICES. The Board discussed the functions
performed by Parkway, the portfolio management team and support staff of Parkway
and Parkway's investment strategy and process for the Fund, Parkway's financial
condition, and considered the quality of services provided. The Board also
reviewed information on the performance of the Fund, along with the performance
information of a relevant securities index and a group of peer funds; noting
that Parkway endeavored to strictly adhere to the style designated for the Fund,
that the value style of investing was difficult during the past year, and that
its performance in the recent market turmoil was consistent with the benchmark
index and many of its peers. Based on the information provided and the Board's
previous experience with Parkway, the Board concluded that the nature and extent
of the services provided and to be provided by Parkway were appropriate and that
the quality was good.
FEES. The Board considered the subadvisory fee rates proposed under the New
Subadvisory Agreement. The Board noted that the subadvisory fee rates under the
New Subadvisory Agreement for the Fund were competitive for similar funds. The
Board concluded that the subadvisory fee was reasonable and appropriate in
amount given the services provided.
PROFITABILITY. The Board discussed the profitability of Parkway with respect to
fees received under the Original Subadvisory Agreement. The Board considered
that the subadvisory fee rates were negotiated at arm's length between the New
Adviser and Parkway, and that Parkway would be paid by the New Adviser. The
Board concluded that the profits realized by Parkway were not unreasonable.
59
================================================================================
MONTEAGLE FUNDS
BOARD APPROVAL OF INVESTMENT SUBADVISORY AGREEMENT FOR THE SELECT VALUE
FUND (UNAUDITED) (CONTINUED)
================================================================================
ECONOMIES OF SCALE. As part of its review of the New Subadvisory Agreement, the
Board considered whether there will be economies of scale with respect to the
management of the Fund and whether the Fund will benefit from any economies of
scale. The Board noted that Parkway has represented that economies of scale
might be realized as a result of asset growth. The Board noted the presence of
breakpoints in the management fees that will provide shareholders with the
benefit of lower expenses at higher asset levels. The Board concluded for the
Fund that, given the nature and size of the Fund and the costs of Parkway in
providing portfolio management services, the subadvisory fee reflects an
appropriate level of sharing of any economies of scale.
OTHER BENEFITS TO PARKWAY. The Board noted that Parkway has indicated that
Parkway does not believe it receives any fall-out benefits as a result of its
relationship with the Fund itself. Additionally, the Board considered that
Parkway does not have any soft-dollar arrangements on behalf of its equity
portfolios including the Fund.
Based upon these considerations, the Board, including all of the Independent
Trustees voting separately, concluded that that the terms of the New Subadvisory
Agreement were fair and reasonable and that approval of the Agreement was in the
best interests of the Fund and its shareholders; that the services to be
performed under the New Subadvisory Agreement were services required for the
operation of the Fund; that Parkway has provided satisfactory advisory services
to the Fund in the past; and that the fees for the advisory services which
Parkway will perform were within the range of what would have been negotiated at
arm's length in light of the circumstances.
60
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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.
Not required
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not required
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not required
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: Not required
(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.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 April 30, 2009
-------------------------
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 April 30, 2009
-------------------------
By (Signature and Title)* /s/ Mark J. Seger
--------------------------------------------------
Mark J. Seger, Treasurer
Date April 30, 2009
-------------------------
* Print the name and title of each signing officer under his or her signature.