APPENDIX H - FORM N-CSR
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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 811-06720
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Meeder Advisor Funds Trust
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(Exact name of registrant as specified in charter)
6125 Memorial Drive
Dublin, OH 43017
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(Address of principal executive offices) (Zip code)
Bruce McKibben
c/o Meeder Advisor Funds Trust
6125 Memorial Drive
Dublin, OH 43017
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(Name and address of agent for service)
Registrant's telephone number, including area code: 800-494-3539
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Date of fiscal year end: 12/31/03
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Date of reporting period: 06/30/03
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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. (S) 3507.
Item 1. Reports to Stockholders.
Include a copy of the report transmitted to stockholders pursuant to
Rule 30e-1 under the Act (17 CFR 270.30e-1).
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Meeder
Advisor Funds
The Institutional Fund
2003 Semiannual Report
June 30, 2003
Meeder
Advisor Funds
P.O. Box 7177
Dublin, Ohio 43017
800-325-3539
Distributed by
Adviser Dealer Services, Inc.
[GRAPHIC]
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Meeder
Advisor Funds
The Institutional Fund
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Performance Perspective
Period & Average Annual Total Returns 3 Year 1 3 5 Since
as of June 30, 2003 months to date year years years Inception
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The Institutional Fund 0.27% 0.57% 1.39% 3.27% 4.14% 4.77%/1/
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Avg. Institutional Money Market Fund 0.23% 0.48% 1.24% 3.20% 3.90% n/a
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Current & Effective Yields* 7-day simple yield: 0.98% 7-day compound yield: 0.98%
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/1/ Inception Date: 6/15/94.
* Yield quotations more closely reflect the current earnings of The
Institutional Fund than do total return quotations.
Source for average money market fund data: iMoneyNet, Inc.
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Semiannual Market Perspective
[PHOTO]
Joseph A. Zarr
Co-Portfolio Manager
[PHOTO]
Christopher M.
O'Daniel, CFA
Co-Portfolio Manager
The Institutional Fund continues to perform among the best funds in its peer
group, outperforming the average institutional money market fund for all time
periods as of June 30, 2003, according to iMoneyNet, Inc.
Short-term interest rates fell throughout most of the first half of the year, as
the market anticipated additional rate cuts by the Federal Reserve, which
eventually came in the form of a quarter-point reduction on June 25th.
Throughout this period, the Fund sought to take advantage of the higher yields
that were available among very short-term securities, and to lock in higher
rates among select longer-term instruments. This approach helped the Fund retain
its strong performance relative to its peers, and gave us the flexibility to
adjust the portfolio in case rates moved higher.
Foreign affairs dominated the market in the 1st Quarter, as economic events took
a back seat to the conflict in Iraq. Upon the conclusion of the war, the
market began to focus again on the threat of deflation. Within its own
ability, the Federal Reserve is simply not going to let deflationary forces
take root in the U.S. as they have in Japan over the last 10 years. It is our
view that the Fed wishes to keep short-term rates low
[CHART]
Pie chart
Portfolio Holdings as of June 30, 2003
1) Variable Rate Notes 32%
2) Corporate Notes 26%
3) Commercial Paper 18%
4) Repurchase Agreements 17%
5) U.S. Gov't Agency Notes 7%
Portfolio holdings are subject to change.
for some time, as a means of combating deflation and supporting an improving
economy. Therefore, we would expect yields on all short-term instruments to
remain relatively low until the economy begins to expand at a more robust rate -
which may not occur until late this year or early next year.
Past performance does not guarantee future results. Except for the current and
effective yields, all performance figures represent period and average annual
total returns for the periods ended June 30, 2003, and assume reinvestment of
all dividend and capital gain distributions. The investment return and principal
value of an investment will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Expenses were
waived and/or reimbursed in order to reduce the operating expenses of The
Institutional Fund during the periods shown above. Investments in The
Institutional Fund are neither insured nor guaranteed by the Federal Deposit
Insurance Corporation or any other governmental agency. Although the Fund seeks
to perserve the value of your investment at $1.00 per share, it is possible to
lose money by investing in The Institutional Fund.
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2003 Semiannual Report | June 30, 2003 1
Schedule of Portfolio Investments
June 30, 2003 (unaudited)
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Money Market Portfolio
Money Market Portfolio
Principal
Coupon/ Amount ($)
Yield Maturity or Shares Value ($)
------- -------- ---------- ----------
Commercial Papers -- 18.0%
Archer Daniels
Midland Co.** 1.08% 11/12/03 10,000,000 9,959,800
Cargill, Inc. 1.06% 11/03/03 5,000,000 4,981,597
Duff & Phelps Utility &
Corporate Bond Trust,
Inc.** 1.13% 09/02/03 4,750,000 4,740,607
Pfizer, Inc.** 0.92% 08/12/03 3,800,000 3,795,838
Schering-Plough Corp. 1.21% 08/12/03 8,000,000 7,988,707
Toyota Motor Credit Corp. 1.05% 11/25/03 5,000,000 4,978,562
----------
Total Commercial Papers
(Cost $36,445,111) 36,445,111
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Corporate Obligations -- 56.9%
Abbott Laboratories 5.60% 10/01/03 505,314 505,314
American General Finance
Corp. 5.75% 11/01/03 1,010,000 1,024,724
Aquarium Holdings, KY 1.15%* 07/03/03 108,000 108,000
Associates Corp. 6.88% 08/01/03 1,000,000 1,003,730
Associates Corp. 5.75% 11/01/03 7,000,000 7,106,330
Austin Printing Co., Inc. 1.12%* 07/03/03 1,955,000 1,955,000
Bath Technologies, Inc. 1.15%* 07/03/03 1,340,000 1,340,000
Bear Stearns Co., Inc. 6.70% 08/01/03 2,108,000 2,116,864
Beaver Creek Enterprise 1.12%* 07/03/03 1,640,000 1,640,000
Cascade Plaza Project 1.12%* 07/03/03 8,395,000 8,395,000
Citigroup, Inc. 6.75% 08/15/03 350,000 352,041
Clark Grave Vault Co. 1.15%* 07/03/03 1,350,000 1,350,000
Coughlin Family Property,
Inc. 1.15%* 07/03/03 1,880,000 1,880,000
Espanola/Nambe 1.12%* 07/03/03 1,185,000 1,185,000
First Colony Corp. 6.63% 08/01/03 7,000,000 7,031,731
Florida Power & Light 5.79% 09/15/03 3,500,000 3,531,874
Fortune Brands, Inc. 8.50% 10/01/03 1,250,000 1,272,062
General Electric Capital
Corp. 5.38% 04/23/04 1,220,000 1,259,092
General Electric Capital
Corp. 7.13% 11/01/03 1,600,000 1,628,972
General Electric Capital
Corp. 6.75% 09/11/03 520,000 524,876
Gordon Flesch Co. Project 1.12%* 07/03/03 900,000 900,000
Hancor, Inc. 1.12%* 07/03/03 200,000 200,000
Isaac Tire, Inc. 1.15%* 07/03/03 870,000 870,000
J.P. Morgan 8.50% 08/15/03 2,675,000 2,698,640
J.P. Morgan 4.49% 08/01/03 500,000 500,837
J.P. Morgan 5.69% 02/10/04 3,000,000 3,077,901
Keiser Street, Inc. 1.12%* 07/03/03 1,825,000 1,825,000
K.L. Morris, Inc. 1.15%* 07/03/03 2,095,000 2,095,000
Martin Wheel Co, Inc. 1.32%* 07/03/03 2,420,000 2,420,000
Mellon Funding Corp. 5.75% 11/15/03 1,500,000 1,524,616
Merrill Lynch & Co., Inc. 5.70% 02/06/04 1,500,000 1,538,209
MetLife Insurance Co.*** 1.38%* 10/01/03 12,000,000 12,000,000
Mubea, Inc. 1.12%* 07/03/03 7,650,000 7,650,000
Nations Bank 6.50% 08/15/03 200,000 201,022
Osco Industries, Inc. 1.12%* 01/25/03 1,500,000 1,500,000
O.K.I. Supply Co. 1.15%* 07/03/03 1,550,000 1,550,000
Parker Hannifin 5.65% 09/15/03 8,000,000 8,074,244
Presrite Corp. 1.12%* 07/03/03 340,000 340,000
Principal
Coupon/ Amount ($)
Yield Maturity or Shares Value ($)
------- -------- ---------- -----------
Corporate Obligations -- continued
Pro Tire, Inc. 1.15%* 07/03/03 1,045,000 1,045,000
Procter & Gamble Co. 5.25% 09/15/03 3,375,000 3,402,085
R.I. Lampus Co. 1.12%* 07/03/03 790,000 790,000
Salomon Smith Barney 7.20% 02/01/04 2,101,000 2,171,345
Seariver Maritime, Inc. 1.34%* 07/03/03 4,900,000 4,900,000
SGS Tool Co. 1.12%* 07/03/03 720,000 720,000
Southern California Gas 5.75% 11/15/03 300,000 304,893
Wells Fargo 9.13% 02/01/04 1,000,000 1,044,391
White Castle Project 1.12%* 07/03/03 6,750,000 6,750,000
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Total Corporate Obligations
(Cost $115,303,794) 115,303,794
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U.S. Government Agency Obligations -- 7.3%
Federal Farm Credit Bank 5.15% 12/03/03 100,000 101,585
Federal Home Loan Bank 7.32%* 07/02/03 800,000 800,129
Federal Home Loan Bank 6.75% 08/01/03 300,000 312,389
Federal Home Loan Bank 5.79% 07/28/03 250,000 250,632
Federal Home Loan Bank 5.17% 04/05/04 515,000 524,946
Federal Home Loan Bank 5.08% 11/06/03 150,000 151,950
Federal Home Loan Bank 4.13% 08/15/03 500,000 501,313
Federal Home Loan Bank 3.25% 02/13/04 510,000 515,998
Federal Home Loan Bank 1.42% 05/24/04 1,720,000 1,720,000
Federal Home Loan Bank 1.30% 06/30/04 5,000,000 5,000,000
Federal Home Loan Bank 1.30% 06/07/04 5,000,000 5,000,000
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Total U.S. Government
Agency Obligations
(Cost $14,878,942) 14,878,942
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U.S. Treasury Obligations -- 0.0%
U.S. Treasury Bill 1.08% 11/20/03 63,100 62,831
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Total U.S. Treasury Obligations
(Cost $62,831) 62,831
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Repurchase Agreements -- 17.2%
Salomon Smith Barney,
Inc., (Collateralized by
$35,499,660 Banco
Santander Commercial
Paper, at 1.05%, due
09/02/03, value --
$35,434,301) 1.43% 07/01/03 34,739,000 34,739,000
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Total Repurchase Agreements
(Cost $34,739,000) 34,739,000
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Total Investments -- 99.4%
(Cost $201,429,678) (a) 201,429,678
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Other Assets less
Liabilities -- 0.6% 1,189,783
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Total Net Assets -- 100.0% 202,619,461
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2
Schedule of Portfolio Investments
June 30, 2003 (unaudited)
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Money Market Portfolio
Principal
Amount ($)
or Shares Value ($)
---------- ---------
Trustee Deferred Compensation****
The Flex-funds Dynamic Growth Fund 1,124 7,104
The Flex-funds Highlands Growth Fund 1,137 14,804
The Flex-funds Muirfield Fund 3,943 16,048
The Flex-funds Total Return Utilities Fund 905 12,163
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Total Trustee Deferred Compensation
(Cost $50,119) 50,119
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(a) Cost for federal income tax and financial reporting purposes are the same.
* Variable rate security. Interest rate is as of June 30, 2003. Maturity date
reflects the next rate change date.
** Represents a restricted security purchased under Rule 144A, which is exempt
from registration under the Securities Act of 1933, as amended. Security is
restricted as to resale to institutional investors, but has been deemed
liquid in accordance with guidelines approved by the Board of Trustees. As
of June 30, 2003, securities restricted as to resale to institutional
investors represented 9.2% of the Portfolio.
*** Illiquid security. The sale or disposition of such security would not be
possible in the ordinary course of business within seven days at
approximately the value at which the Fund has valued the security. As of
June 30, 2003, illiquid securities represented 6.0% of the Portfolio.
****Assets of affiliates to the Money Market Portfolio held for the benefit of
the Portfolio's Trustees in connection with the Trustee Deferred
Compensation Plan.
See accompanying notes to financial statements.
3
Statement of Assets & Liabilities
June 30, 2003 (unaudited)
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Institutional
Fund
-------------
Assets
Investment in corresponding portfolio, at value $12,930,195
Receivable from investment advisor 1,633
Other assets 10,584
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Total Assets 12,942,412
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Liabilities
Dividends payable 12,491
Accrued transfer agent and administrative fees 936
Accrued distribution plan fees (12b-1) 960
Other accrued liabilities 2,172
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Total Liabilities 16,559
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Total Net Assets $12,925,853
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Net Assets
Capital $12,925,853
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Total Net Assets $12,925,853
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Capital Stock Outstanding 12,925,853
(indefinite number of shares authorized, $0.10 par value)
Net Asset Value, Offering and Redemption Price Per Share $ 1.00
See accompanying notes to financial statements.
4
Statement of Operations
For the Six Months Ended June 30, 2003 (unaudited)
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Institutional
Fund
-------------
Net Investment Income from Corresponding Portfolio
Interest $156,184
Expenses net of reductions (21,329)
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Total Net Investment Income from Corresponding Portfolio 134,855
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Fund Expenses
Administrative 5,384
Transfer agent 4,927
Distribution plan 1,387
Registration and filing 3,007
Insurance 379
Printing 922
Legal 893
Postage 362
Audit 875
Other 3,366
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Total Expenses Before Reductions 21,502
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Expenses reimbursed by investment advisor (10,736)
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Net Expenses 10,766
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Net Investment Income 124,089
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Net Change in Net Assets Resulting from Operations $124,089
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See accompanying notes to financial statements.
5
Statements of Changes in Net Assets
For the Six Months Ended June 30, 2003 (unaudited) and Year Ended December 31,
2002
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Institutional Fund
--------------------------
2003 2002
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Operations
Net investment income $ 124,089 $ 536,961
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Net change in net assets resulting from operations 124,089 536,961
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Distributions to Shareholders
From net investment income (124,089) (536,961)
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Net change in net assets resulting from distributions (124,089) (536,961)
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Capital Transactions
Issued 15,699,984 52,568,110
Reinvested 95,980 453,560
Redeemed (27,498,712) (77,088,976)
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Net change in net assets resulting from capital transactions (11,702,748) (24,067,306)
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Total Change in Net Assets (11,702,748) (24,067,306)
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Net Assets -- Beginning of Period 24,628,601 48,695,907
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Net Assets -- End of Period $ 12,925,853 $ 24,628,601
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Accumulated undistributed (distributions in excess of) net investment income $ -- $ --
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Share Transactions
Issued 15,699,984 52,568,110
Reinvested 95,980 453,560
Redeemed (27,498,712) (77,088,976)
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Net change in shares (11,702,748) (24,067,306)
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See accompanying notes to financial statements.
6
Financial Highlights
For a Share Outstanding Through Six Months Ended June 30, 2003 (unaudited) and
Each Fiscal Year Ended December 31,
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Institutional Fund
2003 2002 2001 2000 1999 1998
------- ------- ------- ------- -------- --------
Net Asset Value, Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
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Income from Investment Operations
Net investment income 0.006 0.017 0.042 0.062 0.050 0.054
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Total from Investment Operations 0.006 0.017 0.042 0.062 0.050 0.054
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Less Distributions
From net investment income (0.006) (0.017) (0.042) (0.062) (0.050) (0.054)
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Total Distributions (0.006) (0.017) (0.042) (0.062) (0.050) (0.054)
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Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
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Total Return (assumes reinvestment of
distributions)(1) 0.57% 1.73% 4.26% 6.37% 5.13% 5.49%
Ratios/Supplemental Data
Net assets, end of period ($000) $12,926 $24,629 $48,696 $63,971 $868,169 $641,831
Ratio of net expenses to average net assets(2) 0.30% 0.30% 0.29% 0.24% 0.25% 0.24%
Ratio of net investment income to average net
assets(2) 1.15% 1.75% 4.23% 6.02% 5.01% 5.34%
Ratio of expenses to average net assets before
reductions(1)(3) 0.57% 0.53% 0.49% 0.46% 0.45% 0.45%
(1) Not annualized for periods of less than one full year.
(2) Annualized for periods of less than one full year.
(3) Ratio includes reductions in corresponding portfolio.
See accompanying notes to financial statements.
7
Notes to Financial Statements
June 30, 2003 (unaudited)
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1. Organization and Significant Accounting Policies
The Meeder Advisor Funds Trust (the "Trust") was organized in 1992 and is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as a diversified, open-end management investment company. At June 30,
2003, the Trust consisted of three series. The accompanying financial
statements relate only to the Institutional Fund (the "Fund"). The Fund invests
all of its investable assets in a corresponding open-end management investment
company (the "Portfolio"). The Fund, the Portfolio into which the Fund invests
and the percentage of the Portfolio owned by the Fund is as follows:
Percentage of
Portfolio Owned by
Fund as of
Fund Portfolio June 30, 2003*
---- --------- ------------------
Institutional Fund Money Market Portfolio 6%
* There is a partner of the Portfolio that owns a de minimis position.
The financial statements of the Portfolio, including the Schedule of Portfolio
Investments, are included elsewhere in this report and should be read in
conjunction with the financial statements of the Fund.
Use of estimates. The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
("GAAP") requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Valuation of investments. The Fund records its investment in the corresponding
Portfolio at value. Valuation of securities held by the Portfolio is discussed
in the Portfolio's notes to financial statements included elsewhere in this
report.
Federal income taxes. It is the Fund's policy to continue to comply with the
requirements of Subchapter M of the Internal Revenue Code applicable to
regulated investment companies and to distribute substantially all of its
taxable income and net capital gains to its shareholders. Therefore, no federal
income tax provision is required.
Distributions to shareholders. Distributions to shareholders are recorded on
the ex-dividend date. The Fund declares dividends from net investment income on
a daily basis and pays such dividends on a monthly basis. The Fund distributes
net capital gains, if any, on an annual basis.
Distributions from net investment income and from net capital gains are
determined in accordance with income tax regulations that may differ from GAAP.
These differences are primarily due to deferrals of certain losses, expiring
capital loss carryforwards, and differing treatments of unrealized gains and
losses of futures contracts held by the Fund's corresponding Portfolio.
Accordingly, timing differences relating to shareholder distributions are
reflected in the components of net assets and permanent book and tax
differences relating to shareholder distributions have been reclassified within
the components of net assets.
Investment income & expenses. The Fund records daily its proportionate share
of the corresponding Portfolio's income, expenses, and realized and unrealized
gains and losses. In addition, the Fund accrues its own expenses. Expenses
incurred by the Trust that do not specifically relate to an individual Fund of
the Trust are allocated to the Fund based on the Fund's relative net assets or
other appropriate basis.
2. Agreements and Other Transactions with Affiliates
Meeder Asset Management, Inc. ("MAM"), a wholly-owned subsidiary of Meeder
Financial, Inc. ("Meeder"), provides the Portfolio with investment management,
research, statistical and advisory services.
Mutual Funds Service Co. ("MFSCo"), a wholly-owned subsidiary of Meeder, serves
as stock transfer, dividend disbursing and shareholder services agent for the
Fund. In compensation for such services, the Fund pays MFSCo an
8
annual fee equal to the greater of $20 per active shareholder account or 0.08%
of the Fund's average daily net assets. MFSCo is entitled to receive an annual
minimum fee of $4,000 from the Fund. The Fund is currently subject to an
expense cap, thus the basis point fee has been reduced by 0.02%.
MFSCo provides the Trust with certain administrative services. In compensation
for such services, the Fund pays MFSCo an annual fee equal to 0.05% of the
Fund's average daily net assets.
MAM has agreed to reduce its fees and/or reimburse expenses, including expenses
allocated from its respective Portfolio (excluding interest, taxes, brokerage
fees, and extraordinary expenses), to limit the Fund's total annual operating
expenses to 0.27% of average daily net assets. Prior to June 19, 2003, the
Fund's total annual operating expense limit had been 0.30%. Such reimbursement
is limited to the total of fees charged to the Fund by MAM and MFSCo. For the
six months ended June 30, 2003, MAM and MFSCo, collectively, reimbursed $10,736
to the Fund.
Pursuant to Rule 12b-1 of the 1940 Act, a mutual fund can adopt a written plan
to pay certain expenses out of fund assets relating to the sale and
distribution of its shares. The Fund has adopted a distribution plan that
limits the Fund, on an annual basis, to pay 0.03% of average daily net assets
for such expenses. However, the Fund expensed what was actually incurred during
the six months ended June 30, 2003.
3. Federal Tax Information
The Fund paid dividends, characterized for tax purposes as ordinary income, of
$541,986 during the year ended December 31, 2002./1/
As of December 31, 2002, the components of accumulated earnings/(deficit) on a
tax basis for the Fund was as follows:
Accumulated
Undistributed Capital and Unrealized Total
Ordinary Dividends Other Gains Appreciation/ Accumulated
Income Payable and (Losses) (Depreciation) Earnings/(Deficit)
------------- --------- ------------ -------------- ------------------
$3,078 $3,078 $-- $-- $--
/1/ Total dividends paid may differ from the amount reported in the Statement
of Changes in Net Assets because for tax purposes dividends are recognized
when actually paid.
9
Statement of Assets & Liabilities
June 30, 2003 (unaudited)
- --------------------------------------------------------------------------------
Money
Market
Portfolio
------------
Assets
Investments, at value* $166,690,678
Repurchase agreements, at value* 34,739,000
Trustee deferred compensation investments, at value 50,119
Cash 797
Interest and dividend receivable 1,236,030
Prepaid expenses/other assets 43
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Total Assets 202,716,667
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Liabilities
Payable for Trustee Deferred Compensation Plan 50,119
Payable to investment advisor 22,605
Accrued fund accounting fees 5,132
Other accrued liabilities 19,350
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Total Liabilities 97,206
----------------------------------------------------------------
----------------------------------------------------------------
Total Net Assets $202,619,461
----------------------------------------------------------------
----------------------------------------------------------------
* Investments, at cost $201,429,678
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See accompanying notes to financial statements.
10
Statement of Operations
For the Six Months Ended June 30, 2003 (unaudited)
- --------------------------------------------------------------------------------
Money
Market
Portfolio
----------
Investment Income
Interest $1,533,844
--------------------------------------------------------------
Total Investment Income 1,533,844
--------------------------------------------------------------
Expenses
Investment advisor 339,843
Fund accounting 28,966
Trustee 4,505
Audit 3,648
Custodian 8,322
Legal 2,474
Insurance 1,824
Other 1,482
--------------------------------------------------------------
Total Expenses Before Reductions 391,064
--------------------------------------------------------------
Investment advisor fees waived (182,581)
--------------------------------------------------------------
Total Net Expenses 208,483
--------------------------------------------------------------
--------------------------------------------------------------
Net Investment Income (Loss) 1,325,361
--------------------------------------------------------------
--------------------------------------------------------------
Net Change in Net Assets Resulting from Operations $1,325,361
--------------------------------------------------------------
See accompanying notes to financial statements.
11
Statements of Changes in Net Assets
For the Six Months Ended June 30, 2003 (unaudited)
and the Year Ended December 31, 2002
- --------------------------------------------------------------------------------
Money Market Portfolio
----------------------------
2003 2002
------------- -------------
Operations
Net investment income (loss) $ 1,325,361 $ 4,658,599
- ---------------------------------------------------------------------------------------------------------------------
Net change in net assets resulting from operations 1,325,361 4,658,599
- ---------------------------------------------------------------------------------------------------------------------
Transactions of Investors' Beneficial Interests
Contributions 134,968,757 325,392,543
Withdrawals (144,552,092) (389,503,659)
- ---------------------------------------------------------------------------------------------------------------------
Net change in net assets resulting from transactions of investors' beneficial interests (9,583,335) (64,111,116)
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
Total Change in Net Assets (8,257,974) (59,452,517)
- ---------------------------------------------------------------------------------------------------------------------
Net Assets -- Beginning of Period 210,877,435 270,329,952
- ---------------------------------------------------------------------------------------------------------------------
Net Assets -- End of Period $ 202,619,461 $ 210,877,435
- ---------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
12
Financial Highlights
Ratios/Supplementary Data For Six Months Ended June 30, 2003 (unaudited) and
Each Fiscal Year Ended December 31,
- --------------------------------------------------------------------------------
Money Market Portfolio
2003 2002 2001 2000 1999 1998
-------- -------- -------- -------- ---------- --------
Total Return(1) 0.62% 1.83% 4.54% 6.61% 5.37% 5.71%
Net assets, end of period ($000) $202,619 $210,877 $270,330 $297,206 $1,104,197 $798,269
Ratio of net expenses to average net assets(2) 0.20% 0.20% 0.21% 0.19% 0.18% 0.18%
Ratio of net investment income to average net
assets(2) 1.25% 1.83% 4.26% 6.05% 5.07% 5.39%
Ratio of expenses to average net assets before
reductions(2) 0.37% 0.36% 0.35% 0.30% 0.30% 0.30%
(1) Not annualized for periods of less than one full year.
(2) Annualized for periods of less than one full year.
See accompanying notes to financial statements.
13
Notes to Financial Statements
June 30, 2003 (unaudited)
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
The Institutional Fund (the "Fund") invests all of its investable assets in a
corresponding open-end management investment company (a "Portfolio") having the
same investment objective as the Fund. The Portfolio is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as a no-load,
open-ended management investment company, which was organized as a trust under
the laws of the State of New York. For federal income tax purposes the
Portfolio qualifies as a partnership, and each investor in the Portfolio is
treated as the owner of its proportionate share of the net assets, income,
expenses, and realized and unrealized gains and losses of the Portfolio.
Accordingly, as a "pass-through" entity, the Portfolio pays no income dividend
or capital gain distribution.
Use of estimates. The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
("GAAP") requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Security valuation. Money market securities held in the Portfolio are valued
at amortized cost, which approximates value. In compliance with Rule 2a-7 of
the 1940 Act, the amortized values are compared to prices obtained from
independent pricing services that use valuation techniques approved by the
Board of Trustees ("Trustees").
Repurchase agreements. The Portfolio may engage in repurchase agreement
transactions whereby the Portfolio takes possession of an underlying debt
instrument subject to an obligation of the seller to repurchase the instrument
from the Portfolio and an obligation of the Portfolio to resell the instrument
at an agreed upon price and term. At all times, the Portfolio maintains the
value of collateral, including accrued interest, at least 100% of the amount of
the repurchase agreement, plus accrued interest. If the seller defaults or the
fair value of the collateral declines, realization of the collateral by the
Portfolio may be delayed or limited.
Federal income taxes. The Portfolio will be treated as a partnership for
federal income tax purposes. As such, each investor in the Portfolio will be
subject to taxation on its share of the Portfolio's ordinary income and capital
gains. It is the Portfolio's policy to continue to comply with the requirements
of Subchapter M of the Internal Revenue Code applicable to it. Therefore, no
federal income tax provision is required.
Other. The Portfolio records security transactions on the trade date. Gains
and losses realized from the sale of securities are determined on the specific
identification basis. Interest income (including amortization of premium and
accretion of discount) is recognized as earned.
Under a Deferred Compensation Plan (the "Plan"), non-interested Trustees may
elect to defer receipt of a portion of their annual compensation. Under the
Plan, deferred amounts are invested in shares of The Flex-funds. Deferred
amounts remain in the Portfolio until distributed in accordance with the Plan.
2. Investment Transactions
As of June 30, 2003, the aggregate cost basis of investments for federal income
tax purposes was $201,429,678.
3. Investment Advisory Fees and Other Transactions with Affiliates
Meeder Asset Management, Inc. ("MAM"), a wholly-owned subsidiary of Meeder
Financial, Inc. ("Meeder"), provides the Portfolio with investment management,
research, statistical and advisory services. For such services the Portfolio
pays a fee at the following annual rates: 0.40% of average daily net assets up
to $100 million and 0.25% of average daily net assets exceeding $100 million.
During the six months ended June 30, 2003, MAM agreed to reduce $182,581 of
investment advisory fees in the Portfolio.
14
Mutual Funds Service Co. ("MFSCo"), a wholly-owned subsidiary of Meeder, serves
as accounting services agent for the Portfolio. In compensation for such
services, the Portfolio pays MFSCo an annual fee equal to the greater of:
a. 0.15% of the first $10 million of average daily net assets,
0.10% of the next $20 million of average daily net assets,
0.02% of the next $50 million of average daily net assets, and
0.01% in excess of $80 million of average daily net assets, or
b. $30,000.
15
Trustees and Officers (unaudited)
- --------------------------------------------------------------------------------
Certain trustees and officers of the Portfolio are also officers or directors
of Meeder, MAM and MFSCo. The Trustees oversee the management of the Trust, the
Fund, and the Portfolio and elect their officers. The officers are responsible
for the Fund's and the Portfolio's day-to-day operations. The Trustees' and
officers' names, addresses, years of birth, positions held with the Trust, and
length of service as a Meeder Advisor Funds Trustee are listed below. Also
included is each Board member's principal occupation during, at least, the past
five years. Except as indicated, each individual has held the office shown or
other offices in the same company for the last five years. Except as otherwise
shown, all persons named as Trustees also serve in similar capacities for all
other mutual funds advised by MAM, including Meeder Advisor Funds, The
Flex-funds, and the corresponding portfolios of Meeder Advisor Funds and The
Flex-funds (collectively, the "Fund Complex"). Those Trustees who are
"interested persons", as defined in the 1940 Act, by virtue of their
affiliation with the Fund Complex are indicated by an asterisk (*).
Name, Address(1), and
Year of Birth Position and Length of Service(2) Principal Occupation During Past Five Years
- ------------- --------------------------------- -------------------------------------------
Robert S. Meeder, Sr.* Trustee and President Chairman of Meeder Asset
Year of Birth: 1929 Management, Inc., an investment
advisor; Chairman and Director of
Mutual Funds Service Co., the Fund
Complex's transfer agent; Director of
Adviser Dealer Services, Inc., the
Fund Complex's Distributor.
Milton S. Bartholomew Trustee Retired; formerly a practicing attorney
Year of Birth: 1929 in Columbus, Ohio; member of the
Fund Complex's Audit Committee.
Roger D. Blackwell Trustee Professor of Marketing and Consumer
Year of Birth: 1940 Behavior, The Ohio State University;
President of Blackwell Associates,
Inc., a strategic consulting firm.
Robert S. Meeder, Jr.* Trustee and Vice President President of Meeder Asset
Year of Birth: 1961 Management, Inc.
Walter L. Ogle Trustee Retired; formerly Executive Vice
Year of Birth: 1937 President of Aon Consulting, an
employee benefits consulting group;
member of the Fund Complex's Audit
Committee.
Charles A. Donabedian Trustee President, Winston Financial, Inc.,
Year of Birth: 1943 which provides a variety of marketing
consulting services to investment
management companies; CEO,
Winston Advisors, Inc., an investment
advisor; member of the Fund
Complex's Audit Committee.
James W. Didion Trustee Retired; formerly Executive Vice
Year of Birth: 1930 President of Core Source, Inc., an
employee benefit and Workers'
Compensation administration and
consulting firm (1991 - 1997).
Jack W. Nicklaus Trustee Designer, Nicklaus Design, a golf
Year of Birth: 1961 course design firm and division of The
Nicklaus Companies.
(1) The address of each Trustee is 6125 Memorial Drive, Dublin, OH 43017.
(2) Each Trustee serves for an indefinite term, until his or her resignation,
death, or removal.
* Robert S. Meeder, Sr. is deemed an "interested person" of the Trust by
virtue of his position as Chairman of Meeder Asset Management, Inc., the
Advisor of the Portfolio. Robert S. Meeder, Jr. is deemed an "interested
person" of the Trust by virtue of his position as President of Meeder Asset
Management, Inc., the Advisor of the Portfolio.
16
- --------------------------------------------------------------------------------
Manager and Investment Advisor:
Meeder Asset Management
6125 Memorial Drive
P.O. Box 7177
Dublin, Ohio 43017
Board of Trustees
Milton S. Bartholomew
Dr. Roger D. Blackwell
James Didion
Charles Donabedian
Robert S. Meeder, Sr.
Robert S. Meeder, Jr.
Jack Nicklaus II
Walter L. Ogle
Custodian
U.S. Bank, N.A.
Cincinnati, Ohio 45201
Transfer Agent Dividend Disbursing Agent
Mutual Funds Service Co.
6125 Memorial Drive
Dublin, Ohio 43017
Auditors
KPMG LLP
Columbus, Ohio 43215
- --------------------------------------------------------------------------------
================================================================================
Meeder
Advisor Funds
P.O. Box 7177
Dublin, Ohio 43017
800-325-3539
Distributed by
Adviser Dealer Services, Inc.
================================================================================
Meeder
Advisor Funds
Capital Fund
Opportunity Fund
2003 Semiannual Report
June 30, 2003
Meeder
Advisor Funds
6125 Memorial Drive, P.O. Box 7177
Dublin, Ohio 43017 Toll Free 800-494-3539
Distributed by Adviser Dealer Services, Inc.
Schedule of Investments in Securities
June 30, 2003 (unaudited)
- --------------------------------------------------------------------------------
Meeder Advisor Funds Capital Fund
Security Description Shares Value ($)
- -------------------- ------ ---------
Common Stocks - 96.7%
Capital Goods, Materials & Services - 14.3%
3M Co. 1,797 231,777
Barrick Gold Corp. 1,300 23,270
Boeing Co. 950 32,604
Carnival Corp. 2,100 68,271
Caterpillar, Inc. 550 30,613
Comcast Corp. 3,380 102,008
Ecolab, Inc. 2,700 69,120
Fox Entertainment Group, Inc. - Class A # 1,500 43,170
Halliburton Co. 4,200 96,600
Illinois Tool Works 270 17,779
Ingersoll-Rand Co. - Class A 450 21,294
InterActive Corp. # 2,050 80,627
International Game Technology 627 64,161
International Paper Co. 1,330 47,521
Interpublic Group of Cos., Inc. 4,139 55,380
Newmont Mining Corp. 1,425 46,256
Omnicom Group, Inc. 700 50,190
Praxair, Inc. 700 42,070
Tyco International, Ltd. 5,400 102,492
Varco International, Inc. # 1,200 23,520
Zebra Technology Corp. - Class A # 562 42,291
---------
1,291,014
---------
Consumer Durable Goods - 5.3%
Autozone, Inc. # 700 53,179
Best Buy Co., Inc. # 950 41,724
General Electric Co. 7,428 213,035
Kohls Corp. # 235 12,074
Wal-Mart Stores, Inc. 2,900 155,643
---------
475,655
---------
Schedule of Investments in Securities
June 30, 2003 (unaudited)
Meeder Advisor Funds Capital Fund
Security Description Shares Value ($)
- -------------------- ------ ---------
Consumer Non-Durable Goods - 13.2%
99 Cents Only Stores # 2,050 70,356
Altria Group, Inc. 1,223 55,573
Anheuser-Busch Cos., Inc. 2,386 121,805
Apollo Group, Inc. -- Class A # 1,000 61,800
Avon Products, Inc. 1,847 114,883
Bed Bath & Beyond, Inc. # 2,050 79,581
Clorox Co. 650 27,722
Colgate Palmolive Co. 500 28,975
Dial Corp. 2,550 49,598
eBAY, Inc. # 918 95,472
Gillette Co. 1,000 31,860
Kimberly Clark Corp. 1,600 83,424
Kraft Foods, Inc. - Class A 1,100 35,805
Mattel, Inc. 3,453 65,331
Pepsico, Inc. 1,033 45,969
Procter & Gamble Co. 772 68,847
Reebok International, Ltd. # 2,135 71,800
Rite Aid Corp. # 10,000 44,500
Wendy's International, Inc. 1,200 34,764
----------
1,188,065
----------
Energy - 7.9%
Apache Corp. 150 9,759
Arch Coal, Inc. 700 16,086
Burlington Resources, Inc. 500 27,035
Chesapeake Energy Corp. 1,923 19,422
ConocoPhillips 825 45,210
Ensco International, Inc. 1,550 41,695
Exxon Mobil Corp. 5,101 183,177
FMC Technologies, Inc. # 1,749 36,816
Kinder Morgan, Inc. 633 34,593
Marathon Oil Corp. 3,190 84,057
Murphy Oil Corp. 600 31,560
Nabors Industries, Ltd. # 450 17,789
Noble Corp. # 1,200 41,160
Noble Energy, Inc. 700 26,460
Williams Cos., Inc. 11,950 94,405
----------
709,224
----------
Schedule of Investments in Securities
June 30, 2003 (unaudited)
Meeder Advisor Funds Capital Fund
Security Description Shares Value ($)
- -------------------- ------ ---------
Finance - 18.6%
ACE, Ltd. 2,909 99,750
AFLAC, Inc. 1,750 53,813
Allstate Corp. 735 26,203
American International Group, Inc. 1,579 87,129
Bank of America Corp. 3,023 238,908
Bear Stearns Cos., Inc. 1,350 97,767
Chicago Mercantile Exchange 400 27,852
Citigroup, Inc. 5,375 230,050
Fannie Mae 218 14,702
Freddie Mac 235 11,931
Hartford Financial Services Group -- Convertible
Preferred # 950 51,908
Merrill Lynch & Co., Inc. 2,350 109,698
New York Community Bancorp, Inc. 1,522 44,275
PMA Capital Corp. - Class A 3,350 41,842
ProAssurance Corp. # 2,700 72,873
Prudential Financial, Inc. 2,494 83,923
Sovereign Bancorp, Inc. # 7,953 124,464
Travelers Property Casualty, Inc. - Class A 3,000 47,700
Unumprovident Corp. 2,324 31,165
U.S. Bancorp 3,687 90,332
Washington Mutual, Inc. 600 24,780
Wells Fargo & Co. 1,334 67,234
----------
1,678,299
----------
Schedule of Investments in Securities
June 30, 2003 (unaudited)
- --------------------------------------------------------------------------------
Meeder Advisor Funds Capital Fund
---------------------------------
Security Description Shares Value ($)
- -------------------- ------ ---------
Health - 17.6%
Abbott Laboratories, Inc. 1,087 47,567
Alcon, Inc. # 1,600 73,120
Allergan, Inc. 650 50,115
AMGEN, Inc. # 1,950 128,583
Bard (C.R.), Inc. 1,000 71,310
BIOMET, Inc. 1,100 31,559
Bristol Myers Squibb Co. 1,400 38,010
Caremark RX, Inc. # 1,800 46,224
Conceptus, Inc. # 3,000 42,060
Eli Lilly & Co. 700 48,279
Forrest Laboratories, Inc. # 2,200 120,450
Genentech, Inc. # 700 50,484
Genzyme Corp. - General Division # 950 39,767
Gilead Sciences, Inc. # 600 33,330
Guidant Corp. 1,200 53,268
Johnson & Johnson Co. 1,566 80,962
Medimmune, Inc. # 550 20,003
Medtronic, Inc. 703 33,723
Merck & Co., Inc. 2,148 130,061
Mylan Laboratories 800 27,816
Pfizer, Inc. 8,828 301,476
Sepracor, Inc. # 2,500 44,825
Shering-Plough Corp. 1,050 19,530
Teva Pharmaceutical Industries - SP ADR 350 19,915
Watson Pharmaceuticals, Inc. # 900 36,333
---------
1,588,770
---------
Schedule of Investments in Securities
June 30, 2003 (unaudited)
- --------------------------------------------------------------------------------
Meeder Advisor Funds Capital Fund
---------------------------------
Security Description Shares Value ($)
- -------------------- ------ ---------
Technology - 15.3%
Analog Devices # 416 14,485
AOL Time Warner # 5,750 92,518
Cisco Systems, Inc. # 5,800 97,382
Dell Computer Corp. # 2,500 79,600
Emulex Corp. # 800 18,216
First Data Corp. 3,074 127,386
Flir Systems, Inc. # 1,200 36,132
Hewlett-Packard Co. 1,650 35,145
Integrated Circuit Systems, Inc. # 1,440 45,230
Intel Corp. 3,562 74,125
International Business Machines Corp. 1,250 103,125
Marvel Technology Group, Ltd. # 615 21,125
Microsoft Corp. # 12,162 311,833
Network Appliance, Inc. # 2,250 36,180
Oracle Corp. # 6,300 75,663
Sanmina-Sci Corp. # 4,200 26,544
Symantec Corp. # 1,650 72,452
United Technologies Corp. 400 28,332
Western Digital Corp. # 2,050 21,115
Yahoo!, Inc. # 1,900 62,130
---------
1,378,718
---------
Transportation - 1.1%
Fedex Corp. 1,000 62,030
United Parcel Service - Class B 650 41,405
---------
103,435
---------
Utilities - 3.4%
Dynergy, Inc. - Class A # 6,550 27,510
Entergy Corp. 1,250 65,975
Nextel Communications, Inc. - Class A # 1,000 18,070
NiSource, Inc. 1,367 25,973
SBC Communications, Inc. 650 16,608
Verizon Communications, Inc. 2,700 106,514
Wisconsin Energy Corp. 1,600 46,400
---------
307,050
---------
---------
Total Common Stocks (Cost $7,967,029) 8,720,230
---------
Schedule of Investments in Securities
June 30, 2003 (unaudited)
- --------------------------------------------------------------------------------
Meeder Advisor Funds Capital Fund
---------------------------------
Security Description Shares Value ($)
- -------------------- ------ ---------
Money Market Registered Investment Companies - 3.7%
First American Treasury Obligation Fund 333,248 333,248
Total Money Market Registered Investment
Companies (Cost $333,248) 333,248
---------
---------
Total Investments - 100.4% (Cost $8,300,277) 9,053,478
---------
Liabilities less Other Assets - (0.4%) (32,043)
---------
Total Net Assets - 100.0% 9,021,435
---------
Trustee Deferred Compensation*
The Flex-funds Dynamic Growth Fund 145 916
The Flex-funds Highlands Growth Fund 99 1,289
The Flex-funds Muirfield Fund 417 1,697
The Flex-funds Total Return Utilities Fund 99 1,331
---------
Total Trustee Deferred Compensation (Cost $4,952) 5,233
---------
# Represents non-income producing # securities.
* Assets of affiliates to the Capital Fund held for the
benefit of the Fund's Trustees in connection with the
Trustee Deferred Compensation Plan.
See accompanying notes to financial statements.
Schedule of Investments in Securities
June 30, 2003 (unaudited)
- --------------------------------------------------------------------------------
Meeder Advisor Funds Opportunity Fund
-------------------------------------
Security Description Shares Value ($)
- -------------------- ------ ---------
Common Stocks - 97.2%
Capital Goods, Materials & Services - 16.1%
Albany International Corp. - Class A 1,760 48,224
Alliance Gaming Corp. # 2,300 43,493
Applebee's International, Inc. 700 22,001
Ball Corp. 500 22,755
Boeing Co. 2,700 92,664
Bunge Ltd. 800 22,880
Cabot Corp. 1,400 40,180
Carlisle Companies, Inc. 1,050 44,268
Choice Hotels International, Inc. # 800 21,848
Comcast Corp. - Class A # 1,010 30,482
CBRL Group, Inc. 1,200 46,620
FTI Consulting, Inc. # 400 9,988
Halliburton Co. 1,420 32,660
Imation Corp. 1,630 61,647
International Game Technolgy 210 21,489
ITT Educational Services, Inc. # 2,000 58,500
Knight Ridder, Inc. 650 44,805
Liberty Media Corp. - Class A # 1,790 20,692
MacDermid, Inc. 1,900 49,970
MPS Group, Inc. # 3,820 26,282
Newmont Mining Corp. 2,580 83,747
Owens-Illinois, Inc. # 3,750 51,637
Republic Services, Inc. # 3,160 71,637
Service Corporation International # 9,600 37,152
Southern Peru Copper Corp. 2,700 41,310
Stewart Enterprises, Inc. - A # 5,350 23,005
Trex Company, Inc. # 1,000 39,250
Trinity Industries 1,030 19,065
Tyco International, Ltd. 3,390 64,342
United Defense Industries, Inc. # 4,290 111,283
United Stationers, Inc. # 700 25,081
Varco International, Inc. # 1,200 23,520
Viacom, Inc. - Class B # 1,370 59,814
----------
1,412,291
----------
Schedule of Investments in Securities
June 30, 2003 (unaudited)
- --------------------------------------------------------------------------------
Meeder Advisor Funds Opportunity Fund
-------------------------------------
Security Description Shares Value ($)
- -------------------- ------ ---------
Consumer Durable Goods - 7.7%
Advance Auto Parts # 1,200 73,080
Autozone, Inc. # 300 22,791
Claire's Stores, Inc. 920 23,331
Claracor, Inc. 718 27,679
Cost Plus, Inc. # 700 24,969
Energizer Holdings, Inc. # 2,180 68,452
Ford Motor Co. 2,290 25,167
Gap, Inc. 1,200 22,512
Hot Topic, Inc. # 800 21,568
JC Penney Co., Inc. 2,378 40,069
Ross Stores, Inc. 1,000 42,960
Saks, Inc. # 2,510 24,347
Sherwin-Williams Co. 700 18,816
TJX Companies, Inc. 1,050 19,782
Tractor Supply Co. # 2,170 102,771
Wal-Mart Stores, Inc. 2,300 123,441
----------
681,735
----------
Consumer Non-Durable Goods - 8.2%
Altria Group, Inc. 1,080 49,075
Clorox Co. 900 38,385
Fresh Del Monte Produce, Inc. 4,420 113,550
Mattel, Inc. 2,000 37,840
Pepsi Bottling Group, Inc. 4,030 80,681
Reebok International, Ltd. # 3,210 107,952
Rent-A-Center, Inc. # 1,050 79,600
Sara Lee Corp. 3,660 68,845
Staples, Inc. # 3,500 64,225
VF Corp. 1,520 51,634
Winn-Dixie Stores, Inc. 2,180 26,836
----------
718,623
----------
Energy - 10.0%
Amerada Hess Corp. 1,310 64,426
Calpine Corp. # 1,700 11,220
Cimarex Energy Co. # 1,000 23,750
ConocoPhillips 1,481 81,159
El Paso Corp. 4,760 38,461
Exxon Mobil Corp. 5,640 202,532
FMC Technologies, Inc. # 3,150 66,308
Occidental Petroleum Corp. 4,550 152,652
Oil States International, Inc. # 4,990 60,379
Questar Corp. 1,970 65,936
UGI Corp. 700 22,190
Valero Energy Corp. 1,150 41,779
XTO Energy, Inc. 2,063 41,487
----------
872,279
----------
Schedule of Investments in Securities
June 30, 2003 (unaudited)
- --------------------------------------------------------------------------------
Meeder Advisor Funds Opportunity Fund
-------------------------------------
Security Description Shares Value ($)
- -------------------- ------ ---------
Finance - 26.3%
Allstate Corp. 2,480 88,412
American International Group 2,610 144,020
Bank of America Corp. 2,920 230,768
Bear Stearns Cos., Inc. 1,030 74,593
Cigna Corp. 1,300 61,022
Citigroup, Inc. 7,960 340,688
Freddie Mac 1,240 62,955
Fannie Mae 1,600 107,904
Federated Investors, Inc. - Class B 1,600 43,872
Fidelity National Financial, Inc. 3,800 116,888
Greenpoint Financial Corp. 690 35,149
GTech Holdings Corp. 660 24,849
H & R Block, Inc. 500 21,625
MBNA Corp. 4,320 90,029
Merrill Lynch & Co., Inc. 2,640 123,235
Morgan Stanley 1,050 44,887
National City Corp. 2,450 80,140
New York Community Bancorp 1,933 56,231
Partnerre, Ltd. 1,580 80,754
Providian Financial Corp. # 2,200 20,372
Sovereign Bancorp, Inc. 7,960 124,574
Stancorp Financial Group 1,580 82,507
Travelers Property Casualty - Class B 1,300 20,501
Washington Mutual, Inc. 3,290 135,877
Wells Fargo & Company 1,630 82,152
-----------
2,294,004
-----------
Health - 5.5%
AdvancePcs # 500 19,125
Amgen, Inc. # 740 48,796
Gen-Probe, Inc. # 600 24,582
HCA, Inc. 1,090 34,924
Hillenbrand Industries 1,310 66,090
Mentor Corp. 1,410 27,354
Merck & Co., Inc. 1,430 86,586
Steris Corp. # 3,160 72,964
United Healthgroup, Inc. 210 10,553
Watson Pharmaceuticals, Inc. # 2,210 89,218
-----------
480,192
-----------
Schedule of Investments in Securities
June 30, 2003 (unaudited)
- --------------------------------------------------------------------------------
Meeder Advisor Funds Opportunity Fund
-------------------------------------
Security Description Shares Value ($)
- -------------------- ------ ---------
Technology - 13.4%
AOL Time Warner # 2,440 39,260
Avocent Corp. # 1,500 44,835
Brown & Brown, Inc. 1,800 58,500
Checkfree Corp. # 800 22,400
Dell Computer Corp. # 840 26,746
Diebold, Inc. 550 23,788
Dionex Corp. # 500 19,870
Eastman Kodak Co. 1,420 38,837
Fisher Scientific International # 4,980 173,802
Hewlett-Packard Co. # 4,860 103,518
Intel Corp. 2,150 44,741
International Business Machines Corp. 590 48,675
Kronos, Inc. # 500 25,425
Leapfrog Enterprises, Inc. # 2,040 64,892
Lexmark International , Inc. # 620 43,877
Microsoft Corp. 1,330 34,101
Oracle Corp. # 3,390 40,714
ProAssurance Corp. # 564 15,222
Rockwell Automation, Inc. 980 23,363
SanDisk Corp. # 1,200 48,684
Sanmina-Sci Corp. # 5,760 36,403
Symantec Corp. # 1,480 64,987
Thermo Electron Corp. # 1,110 23,332
Torchmark Corp. 600 22,350
Western Digital Corp. # 1,900 19,570
Wilson Greatbatch Technologies # 1,200 43,320
Xerox Corp. # 1,900 20,121
---------------
1,171,333
---------------
Transportation - 2.0%
Burlington Northern Santa Fe 1,530 43,513
Fedex Corp. 1,050 65,131
Union Pacific Corp. 1,080 62,662
---------------
171,306
---------------
Utilities - 8.0%
Allegheny Energy, Inc. 420 3,549
AT&T Corp. 4,800 92,400
Centerpoint Energy, Inc. 1,000 8,150
CMS Energy Corp. 630 5,103
Edison International # 4,130 67,856
Entergy Corp. 2,080 109,782
Exelon Corp. 1,200 71,772
Mirant Corp. # 1,300 3,770
Nextel Communications, Inc. - Class A # 1,370 24,756
Northeast Utilities 2,180 36,493
Qwest Communications International # 4,690 22,418
Reliant Resources, Inc. # 700 4,291
SBC Communications, Inc. 3,390 86,614
Sempra Energy 3,640 103,850
Verizon Communications, Inc. 1,370 54,046
---------------
694,850
---------------
---------------
Total Common Stocks (Cost $7,791,383) 8,496,613
---------------
Schedule of Investments in Securities
June 30, 2003 (unaudited)
- --------------------------------------------------------------------------------
Meeder Advisor Funds Opportunity Fund
-------------------------------------
Security Description Shares Value ($)
- -------------------- ------ ---------
Money Market Registered Investment Companies - 3.2%
First American Treasury Obligation Fund 276,878 276,878
-----------
Total Money Market Registered Investment Companies (Cost $276,878) 276,878
-----------
-----------
Total Investments - 100.4% (Cost $8,068,261) 8,773,491
-----------
Liabilities less Other Assets - (-0.4%) (37,754)
-----------
Total Net Assets - 100.0% 8,735,737
-----------
Trustee Deferred Compensation*
The Flex-funds Dynamic Growth Fund 145 916
The Flex-funds Highlands Growth Fund 99 1,289
The Flex-funds Muirfield Fund 417 1,697
The Flex-funds Total Return Utilities Fund 99 1,331
-----------
Total Trustee Deferred Compensation (Cost $4,952) 5,233
-----------
# Represents non-income producing securities.
* Assets of affiliates to the Opportunity Fund held for the benefit of
the Fund's Trustees in connection with the Trustee Deferred
Compensation Plan.
See accompanying notes to financial statements.
Statements of Assets & Liabilities
June 30, 2003 (unaudited)
- ---------------------------------------------------------------------------------------------------------------------------
Capital Opportunity
Fund Fund
------- -----------
Assets
Investments, at value* $9,053,478 $8,773,491
Trustee deferred compensation investments, at value 5,233 5,233
Receivable for securities sold 37,862 44,698
Interest and dividend receivable 6,801 9,804
Prepaid expenses/other assets 915 865
- ---------------------------------------------------------------------------------------------------------------------------
Total Assets 9,104,289 8,834,091
- ---------------------------------------------------------------------------------------------------------------------------
Liabilities
Payable for securities purchased 57,447 73,056
Payable for Trustee Deferred Compensation Plan 5,233 5,233
Payable to investment advisor 3,078 2,009
Accrued fund accounting fees 1,158 1,121
Accrued administration fees 386 374
Accrued transfer agent fees 210 210
Accrued trustee fees 1,715 1,714
Other accrued liabilities 13,627 14,637
- ---------------------------------------------------------------------------------------------------------------------------
Total Liabilities 82,854 98,354
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Total Net Assets $9,021,435 $8,735,737
- ---------------------------------------------------------------------------------------------------------------------------
Net Assets
Capital $10,011,725 $10,038,575
Accumulated undistributed (distributions in excess of) net investment income 11,561 29,628
Accumulated undistributed net realized gain (loss) from investments (1,755,052) (2,037,696)
Net unrealized appreciation (depreciation) of investments 753,201 705,230
- ---------------------------------------------------------------------------------------------------------------------------
Total Net Assets $9,021,435 $8,735,737
- ---------------------------------------------------------------------------------------------------------------------------
Capital Stock Outstanding 1,001,425 1,004,902
(indefinite number of shares authorized, $0.10 par value)
Net Asset Value and Redemption Price Per Share $9.01 $8.69
Maximum Sales Charge 5.75% 5.75%
Maximum Offering Price Per Share (Net Asset Value/(100% - Maximum Sales Charge)) $9.56 $9.22
- ---------------------------------------------------------------------------------------------------------------------------
* Securities at cost $8,300,277 $8,068,261
- ---------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
Statements of Operations
For the Six Months Ended June 30, 2003 (unaudited)
- ------------------------------------------------------------------------------------------------------------------------------
Capital Opportunity
Fund Fund
------- -----------
Investment Income
Interest $597 $402
Dividends 52,398 68,821
- ------------------------------------------------------------------------------------------------------------------------------
Total Investment Income 52,995 69,223
- ------------------------------------------------------------------------------------------------------------------------------
Expenses
Investment advisor 41,435 39,595
Fund accounting 6,215 5,939
Administration 2,072 1,980
Transfer agent 1,240 1,240
Trustee 3,497 3,497
Audit 7,937 7,937
Custodian 6,783 11,535
Legal 1,562 1,562
Insurance 190 189
Other 1,558 1,559
- ------------------------------------------------------------------------------------------------------------------------------
Total Expenses Before Reductions 72,489 75,033
- ------------------------------------------------------------------------------------------------------------------------------
Investment advisor fees waived (31,055) (35,438)
- ------------------------------------------------------------------------------------------------------------------------------
Total Net Expenses 41,434 39,595
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Net Investment Income 11,561 29,628
- ------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Investments
Net realized gain (loss) from investment transactions (314,795) (97,470)
Net change in unrealized appreciation (depreciation) of investments 1,080,323 895,124
- ------------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) from Investments 765,528 797,654
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Net Change in Net Assets Resulting from Operations $777,089 $827,282
- ------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
Statements of Changes in Net Assets
For the Period Ended December 31, 2002 and Six Months Ended June 30, 2003
(unaudited)
- --------------------------------------------------------------------------------
Capital Opportunity
Fund Fund
---- ----
2003 2002* 2003 2002*
Operations
Net investment income (loss) $ 11,561 $ 11,725 $ 29,628 $ 38,575
Net realized gain (loss) from investments and futures
contracts (314,795) (1,440,257) (97,470) (1,940,226)
Net change in unrealized appreciation (depreciation) of
investments 1,080,323 (327,122) 895,124 (189,894)
- ----------------------------------------------------------------------------------------------------------------------
Net change in net assets resulting from operations 777,089 (1,755,654) 827,282 (2,091,545)
- ----------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
From net investment income 0 (11,725) 0 (38,575)
- ----------------------------------------------------------------------------------------------------------------------
Net change in net assets resulting from distributions 0 (11,725) 0 (38,575)
- ----------------------------------------------------------------------------------------------------------------------
Capital Transactions
Issued 0 10,000,000 0 10,000,000
Reinvested 0 11,725 0 38,575
- ----------------------------------------------------------------------------------------------------------------------
Net change in net assets resulting from capital
transactions 0 10,011,725 0 10,038,575
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Total Change in Net Assets 777,089 8,244,346 827,282 7,908,455
- ----------------------------------------------------------------------------------------------------------------------
Net Assets - Beginning of Period 8,244,346 0 7,908,455 0
- ----------------------------------------------------------------------------------------------------------------------
Net Assets - End of Period $9,021,435 $ 8,244,346 $ 8,735,737 $ 7,908,455
- ----------------------------------------------------------------------------------------------------------------------
Accumulated undistributed (distributions in excess of)
net investment income $ 11,561 $ 0 $ 29,628 $ 0
- ----------------------------------------------------------------------------------------------------------------------
Share Transactions
Issued 0 1,000,000 0 1,000,000
Reinvested 0 1,425 0 4,902
- ----------------------------------------------------------------------------------------------------------------------
Net change in shares 0 1,001,425 0 1,004,902
- ----------------------------------------------------------------------------------------------------------------------
* Each fund commenced operations on April 30, 2002.
See accompanying notes to financial statements.
Financial Highlights
For a Share Outstanding Through Six Months Ended June 30, 2003 (unaudited)
and the Period Ended December 31, 2002
- --------------------------------------------------------------------------------
Capital Fund
------------
2003 2002*
- -------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 8.23 $ 10.00
- -------------------------------------------------------------------------------------------------------------
Income from Investment Operations
Net investment income 0.01 0.01
Net gains (losses) on securities (both realized and unrealized) 0.77 (1.77)
- -------------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.78 -1.76
- -------------------------------------------------------------------------------------------------------------
Less Distributions
From net investment income 0.00 (0.01)
- -------------------------------------------------------------------------------------------------------------
Total Distributions 0.00 (0.01)
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 9.01 $ 8.23
- -------------------------------------------------------------------------------------------------------------
Total Return (excludes sales charge and assumes reinvestment of distributions)(1) 9.48% -17.58%
Ratios/Supplemental Data
Net assets, end of period ($000) $ 9,021 $ 8,244
Ratio of net expenses to average net assets (2) 1.00% 1.00%
Ratio of net investment income to average net assets (2) 0.28% 0.20%
Ratio of expenses to average net assets before reductions (2) 1.75% 1.82%
Portfolio turnover rate (1) 50.76% 201.87%
(1) Not annualized for periods of less than one full year.
(2) Annualized for periods of less than one full year.
* Fund commenced operations on April 30, 2002.
See accompanying notes to financial statements.
Financial Highlights
For a Share Outstanding Through Six Months Ended June 30, 2003 (unaudited) and
the Period Ended December 31, 2002
- --------------------------------------------------------------------------------
Opportunity Fund
----------------
2003 2002*
- -------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 7.87 $ 10.00
- -------------------------------------------------------------------------------------------------------------
Income from Investment Operations
Net investment income 0.03 0.04
Net gains (losses) on securities (both realized and unrealized) 0.79 (2.13)
- -------------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.82 (2.09)
- -------------------------------------------------------------------------------------------------------------
Less Distributions
From net investment income 0.00 (0.04)
- -------------------------------------------------------------------------------------------------------------
Total Distributions 0.00 (0.04)
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 8.69 $ 7.87
- -------------------------------------------------------------------------------------------------------------
Total Return (excludes sales charge and assumes reinvestment of distributions)(1) 10.42% -20.91%
Ratios/Supplemental Data
Net assets, end of period ($000) $ 8,736 $ 7,908
Ratio of net expenses to average net assets (2) 1.00% 1.00%
Ratio of net investment income to average net assets (2) 0.75% 0.68%
Ratio of expenses to average net assets before reductions (2) 1.89% 1.96%
Portfolio turnover rate (1) 125.24% 279.50%
(1) Not annualized for periods of less than one full year.
(2) Annualized for periods of less than one full year.
* Fund commenced operations on April 30, 2002.
See accompanying notes to financial statements.
Notes to Financial Statements
June 30, 2003 (unaudited)
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
The Meeder Advisor Funds trust (the "Trust") was organized in 1992 and is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as a diversified, open-end management investment company. At June 30,
2003, the Trust consisted of three separate series. The accompanying financial
statements relate only to the following Funds: Capital Fund ("Capital") and the
Opportunity Fund ("Opportunity") (each a "Fund" and collectively the "Funds").
As of June 30, 2003, 100% of each Fund's capital stock outstanding is held by
one shareholder.
Use of estimates. The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
("GAAP") requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
Security valuation. Investments in securities that are traded on stock exchanges
are valued at the last sales price as of the close of business of the New York
Stock Exchange on the day of valuation or, lacking any sales, at the closing bid
prices. Securities traded over-the-counter are valued at the most recent bid
price or yield equivalent as obtained from one or more dealers that make markets
in such securities. The Funds obtain prices from independent pricing services
that use valuation techniques approved by the Board of Trustees ("Trustees").
Money market securities held in the Funds maturing more than sixty days after
the valuation date are valued at the last sales price as of the close of
business on the day of valuation, or, lacking any sales, at the most recent bid
price or yield equivalent as obtained from dealers that make markets in such
securities. When such securities are valued within sixty days or less to
maturity, the difference between the valuation existing on the sixty-first day
before maturity and maturity value is amortized on a straight-line basis to
maturity. Securities maturing within sixty days from their date of acquisition
are valued at amortized cost.
Futures & options. Each Fund may engage in transactions in financial futures
contracts and options contracts in order to manage the risk of unanticipated
changes in market values of securities held in the portfolio, or which it
intends to purchase. Such transactions may be considered trading activity under
GAAP. The expectation is that any gain or loss on such transactions will be
substantially offset by any gain or loss on the securities in the underlying
portfolio or on those that are being considered for purchase.
To the extent that the Fund enters into futures contracts on an index or group
of securities, the Fund exposes itself to an indeterminate liability and will be
required to pay or receive a sum of money measured by the change in the value of
the index. Upon entering into a futures contract, the Fund is required to
deposit an initial margin, which is either cash or securities in an amount equal
to a certain percentage of the contract value. Subsequently, the variation
margin, which is equal to changes in the daily settlement price or last sale
price on the exchanges where they trade, is received or paid. The Funds record
realized gains or losses for the daily variation margin.
Call and put option contracts involve the payment of a premium for the right to
purchase or sell an individual security or index aggregate at a specified price
until the expiration of the contract. Such transactions expose the Fund to the
loss of the premium paid if the Fund does not sell or exercise the contract
prior to the expiration date. In the case of a call option, sufficient cash or
money market instruments will be segregated to complete the purchase. Options
are valued on the basis of the daily settlement price or last sale on the
exchanges where they trade and the changes in value are recorded as an
unrealized appreciation or depreciation until closed, exercised or expired.
The Funds may write covered call or put options for which premiums received are
recorded as liabilities and are subsequently adjusted to current value of the
options written. When written options are closed or exercised, premiums received
are offset against the proceeds paid, and the Fund records realized gains or
losses for the difference. When written options expire, the liability is
eliminated, and the Fund records realized gains for the entire amount of
premiums received.
Forward currency contracts. The Funds may enter into forward foreign currency
exchange contracts ("forwards") for purposes of hedging against either specific
transactions or portfolio positions. Forwards are agreements between two parties
to exchange currencies at a set price on a future date. The value of forwards
fluctuates with changes in currency exchange rates. The forward is
marked-to-market daily, and the change in value is recorded by the Fund as
unrealized appreciation or depreciation. When the forward is offset by entry
into a closing transaction or extinguished by delivery of the currency, the Fund
records a realized gain or loss equal to the fluctuation in value during the
period the forward was open. Risks may arise upon entering forwards from the
potential inability of counterparties to meet the terms of the forwards or from
unanticipated fluctuations in the value of the foreign currency relative to the
U.S. dollar.
Foreign currency translation. Accounting records of the Funds are maintained in
U.S. dollars. The value of securities, other assets and liabilities of the Funds
denominated in foreign currency are translated into U.S. dollars at the current
exchange rate. Purchases and sales of securities, income receipts and expense
payments are translated into U.S. dollars at the exchange rate on the dates of
such transactions. The Funds do not isolate that portion of the results of
operations resulting from changes in foreign exchange rates from those resulting
from changes in market prices of securities held.
Federal income taxes. It is each Fund's policy to continue to comply with the
requirements of Subchapter M of the Internal Revenue Code applicable to
regulated investment companies and to distribute substantially all of its
taxable income and net capital gains to its shareholders. Therefore, no federal
income tax provision is required.
Distributions to shareholders. Distributions to shareholders are recorded on the
ex-dividend date. Each Fund declares and pays dividends from net investment
income, if any, on an annual basis. Each Fund distributes net capital gains, if
any, on an annual basis.
Distributions from net investment income and from net capital gains are
determined in accordance with income tax regulations that may differ from GAAP.
These differences are primarily due to deferrals of certain losses, expiring
capital loss carryforwards, differing treatments of unrealized gains and losses
of futures contracts held by each Fund, and differing treatment of gains and
losses realized in transactions denominated in foreign currency. Accordingly,
timing differences relating to shareholder distributions are reflected in the
components of net assets and permanent book and tax differences relating to
shareholder distributions have been reclassified within the components of net
assets.
Other. The Funds record security transactions on the trade date. Gains and
losses realized from the sale of securities are determined on the specific
identification basis. Dividend income is recognized on the ex-dividend date, and
interest income (including amortization of premium and accretion of discount) is
recognized as earned.
Under a Deferred Compensation Plan (the "Plan"), non-interested Trustees may
elect to defer receipt of a portion of their annual compensation. Under the
Plan, deferred amounts are invested
in shares of The Flex-funds. Deferred amounts remain in the Funds until
distributed in accordance with the Plan.
2. Investment Transactions
For the six months ended June 30, 2003, the cost of purchases and proceeds from
sales or maturities of long-term investments for the Funds were as follows:
Purchases Sales
Capital Fund $4,222,810 $4,118,964
Opportunity Fund 9,745,062 9,788,747
As of June 30, 2003, the aggregate cost basis of investments and unrealized
appreciation (depreciation) for federal income tax purposes was as follows:
Net unrealized
Cost basis of Unrealized Unrealized appreciation
investments appreciation depreciation (depreciation)
Capital Fund $8,415,447 $894,828 $(256,797) $638,031
Opportunity Fund 8,229,191 836,270 (291,970) 544,300
3. Investment Advisory Fees and Other Transactions with Affiliates
Meeder Asset Management, Inc. ("MAM"), a wholly-owned subsidiary of Meeder
Financial, Inc. ("Meeder"), provides each Fund with investment management,
research, statistical and advisory services. Under separate Investment
Subadvisory Agreements with MAM, Norwich Union Investment Management Limited
("NUIM") serves as subadvisor to the Funds. NUIM is responsible for the
selection of individual portfolio securities for the assets of the Funds.
For such services the Funds pay monthly an annual fee of 1.00% of average daily
net assets to MAM.
Mutual Funds Service Co. ("MFSCo"), a wholly-owned subsidiary of Meeder, serves
as stock transfer, dividend disbursing and shareholder services agent for each
Fund. In compensation for such services, each Fund pays MFSCo an annual fee
equal to the greater of $15 per active shareholder account or 0.12% of each
Fund's average daily net assets. MFSCo is entitled to receive an annual minimum
fee of $4,000 for each Fund. For Funds which are subject to an expense cap and
are above the expense cap, the basis point fee will be reduced by 0.02%. MFSCo
has voluntarily reduced the annual minimum fee to $2,500 for each Fund while it
has a single shareholder.
MFSCo provides the Trust with certain administrative services. In compensation
for such services, each Fund pays MFSCo an annual fee equal to 0.05% of each
Fund's average daily net assets.
MFSCo serves as accounting services agent for each Fund. In compensation for
such services, each Fund pays MFSCo an annual fee equal to the greater of:
a. 0.15% of the first $10 million of average daily net assets,
0.10% of the next $20 million of average daily net assets,
0.02% of the next $50 million of average daily net assets, and
0.01% in excess of $80 million of average daily net assets,
or
b. $7,500.
MAM has agreed to reduce its fees and/or reimburse expenses during the period of
time when each Fund has a single shareholder, to the extent necessary to
maintain an annual net fund operating expense ratio of 1.00%. Such reimbursement
is limited to the total of fees charged to the Fund by MAM and MFSCo. For the
six months ended June 30, 2003, MAM waived $31,055 and $35,438 for Capital and
Opportunity, respectively.
Pursuant to Rule 12b-1 of the 1940 Act, a mutual fund can adopt a written plan
to pay certain expenses out of fund assets relating to the sale and distribution
of its shares. The Funds have adopted a distribution plan with Adviser Dealer
Services, Inc. (the "Distributor"). Under this distribution plan, each Fund pays
the Distributor fees at an annual rate of 0.25% of average daily net assets.
Additionally, the Funds have adopted a service plan. Under this service plan,
each Fund pays the Distributor fees at an annual rate of 0.25% of average daily
net assets. The Distributor has agreed that no distribution and service fees
will be paid by each Fund while it has a single shareholder. The Funds'
shareholders will be notified when the Funds begin to charge distribution and
service fees.
4. Federal Tax Information
The tax characteristics of dividends paid by the Funds during the period ended
December 31, 2002 were as follows:
- --------------------------------------------------------------------------------
Ordinary Income Total Dividends Paid/1/
- --------------------------------------------------------------------------------
Capital Fund $11,725 $11,725
- --------------------------------------------------------------------------------
Opportunity Fund 38,575 38,575
- --------------------------------------------------------------------------------
As of December 31, 2002, the components of accumulated earnings/(deficit) on a
tax basis for the Funds were as follows:
- --------------------------------------------------------------------------------
Accumulated Unrealized Total
Capital and Appreciation/ Accumulated
Other Gains and (Depreciation)/2/ Earnings/
(Losses) (Deficit)
- --------------------------------------------------------------------------------
Capital Fund $(1,325,087) $(442,292) $(1,767,379)
- --------------------------------------------------------------------------------
Opportunity Fund (1,779,296) (350,824) (2,130,120)
- --------------------------------------------------------------------------------
For federal income tax purposes, the Funds have capital loss carryforwards as of
December 31, 2002, which are available to offset future capital gains, if any.
To the extent that these carryforwards are used to offset future capital gains,
it is probable that the gains that are offset will not be distributed to
shareholders:
Amount Expires
Capital Fund $1,176,124 2010
Opportunity Fund 1,779,296 2010
Under current tax laws, net capital losses incurred after October 31, within a
Fund's fiscal year are deemed to arise on the first business day of the
following fiscal year for tax purposes. For the period ended December 31, 2002,
the Capital Fund deferred post October losses of $148,963.
/1/ Total dividends paid may differ from the amount reported in the Statement of
Changes in Net Assets because for tax purposes dividends are recognized when
actually paid.
/2/ The difference between book- and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to: deferral of losses on
wash sales, the realization for tax purposes of
unrealized gains/(losses) on certain derivative instruments, and the realization
for tax purposes of unrealized gains/(losses) on investments in passive foreign
investment companies.
5. Subsequent Event
The lone shareholder of each Fund has notified MFSCo, serving as transfer agent,
of their intent to make a full redemption of all capital stock outstanding.
Given these circumstances, the management of the Funds will begin the
termination and liquidation of the operations of each Fund.
Trustees and Officers (unaudited)
- --------------------------------------------------------------------------------
Certain trustees and officers of the Funds are also officers and directors of
Meeder, MAM and MFSCo. The Trustees oversee the management of the Trust and the
Funds and elect their officers. The officers are responsible for the Funds'
day-to-day operations. The Trustees' and officers' names, addresses, years of
birth, positions held with the Trust, and length of service as a Meeder Advisor
Funds Trustee are listed below. Also included is each Board member's principal
occupation during, at least, the past five years. Except as indicated, each
individual has held the office shown or other offices in the same company for
the last five years. Except as otherwise shown, all persons named as Trustees
also serve in similar capacities for all other mutual funds advised by MAM,
including Meeder Advisor Funds, The Flex-funds, and the corresponding portfolios
of Meeder Advisor Funds and The Flex-funds (collectively, the "Fund Complex").
Those Trustees who are "interested persons", as defined in the 1940 Act, by
virtue of their affiliation with the Fund Complex are indicated by an asterisk
(*).
- -------------------------------------------------------------------------------------------------------------
Name, Address/1/, and Year of Position and Length of Principal Occupation During Past
Birth Service/2/ Five Years
- -------------------------------------------------------------------------------------------------------------
Robert S. Meeder, Sr.* Trustee and President Chairman of Meeder Asset
Year of Birth: 1929 Management, Inc., an investment
advisor; Chairman and Director of
Mutual Funds Service Co., the Fund
Complex's transfer agent; Director
of Adviser Dealer Services, Inc.,
the Fund Complex's Distributor.
- -------------------------------------------------------------------------------------------------------------
Milton S. Bartholomew Trustee Retired; formerly a practicing
Year of Birth: 1929 attorney in Columbus, Ohio; member
of the Fund Complex's Audit
Committee.
- -------------------------------------------------------------------------------------------------------------
Roger D. Blackwell Trustee Professor of Marketing and
Year of Birth: 1940 Consumer Behavior, The Ohio State
University; President of Blackwell
Associates, Inc., a strategic
consulting firm.
- -------------------------------------------------------------------------------------------------------------
Robert S. Meeder, Jr.* Trustee and Vice President President of Meeder Asset
Year of Birth: 1961 Management, Inc.
- -------------------------------------------------------------------------------------------------------------
Walter L. Ogle Trustee Retired; formerly Executive Vice
Year of Birth: 1937 President of Aon Consulting, an
employee benefits consulting
group; member of the Fund
Complex's Audit Committee.
- -------------------------------------------------------------------------------------------------------------
Charles A. Donabedian Trustee President, Winston Financial,
Year of Birth: 1943 Inc., which provides a variety of
marketing consulting services to
investment management companies;
CEO, Winston Advisors, Inc., an
investment advisor; member of the
Fund Complex's Audit Committee.
- -------------------------------------------------------------------------------------------------------------
James W. Didion Trustee Retired; formerly Executive Vice
Year of Birth: 1930 President of Core
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
Source, Inc., an employee benefit
and Workers' Compensation
administration and consulting firm
(1991 - 1997).
- -------------------------------------------------------------------------------------------------------------
Jack W. Nicklaus Trustee Designer, Nicklaus Design, a golf
Year of Birth: 1961 course design firm and division of
The Nicklaus Companies.
- -------------------------------------------------------------------------------------------------------------
/1/The address of each Trustee is 6125 Memorial Drive, Dublin, OH 43017.
/2/Each Trustee serves for an indefinite term, until his or her resignation,
death, or removal.
*Robert S. Meeder, Sr. is deemed an "interested person" of the Trust by virtue
of his position as Chairman of Meeder Asset Management, Inc., the Advisor of the
Funds. Robert S. Meeder, Jr. is deemed an "interested person" of the Trust by
virtue of his position as President of Meeder Asset Management, Inc., the
Advisor of the Funds.
Manager and Investment Advisor:
Meeder Asset Management
6125 Memorial Drive
P.O. Box 7177
Dublin Ohio, 43017
Subadvisor
Norwich Union Investment Management
31 Milk Street, Suite 1111
Boston, MA 02109
Board of Trustees
Milton S. Bartholomew
Dr. Roger D. Blackwell
James Didion
Charles Donabedian
Robert S. Meeder, Sr.
Robert S. Meeder, Jr.
Jack Nicklaus II
Walter L. Ogle
Custodian
U.S. Bank N.A.
Cincinnati, Ohio 45201
Transfer Agent Dividend Disbursing Agent
Mutual Funds Service Co.
6125 Memorial Drive
Dublin, Ohio 43017
Auditors
KPMG LLP
Columbus, Ohio 43215
Meeder
Advisor Funds
6125 Memorial Drive, P.O. Box 7177
Dublin, Ohio 43017 Toll Free 800-494-3539
Distributed by Adviser Dealer Services, Inc.
Item 2. Code of Ethics.
Not applicable (disclosure required in annual report on N-CSR only).
Item 3. Audit Committee Financial Expert.
Not applicable (disclosure required in annual report on N-CSR only).
Item 4. Principal Accountant Fees and Services.
Not applicable (disclosure required in annual report on N-CSR only).
Items 5-6. [Reserved]
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. [Reserved]
Item 9. Controls and Procedures.
(a) Based on our evaluation conducted within 90 days of the filing date, hereof,
the design and operation of the registrant's disclosure controls and procedures
are effective to ensure that material information relating to the registrant is
made known to the certifying officers by others within the appropriate entities,
particularly during the period in which Forms N-CSR are being prepared, and the
registrant's disclosure controls and procedures allow timely preparation and
review of the information for the registrant's Form N-CSR and the officer
certifications of such Form N-CSR.
(b) There were no significant changes in the registrant's internal controls or
in other factors that could significantly affect these controls subsequent to
the date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Item 10. Exhibits.
(a) Not applicable.
(b) Certifications of principal executive officer and principal financial
officer, under Rule 30a-2 of the Investment Company Act of 1940. Filed herewith
as EX-99.CERT.
(c) Certifications of principal executive officer and principal financial
officer, under Section 906 of the Sarbanes-Oxley Act of 2002, and 18 U.S.C.
ss.1350. Filed herewith as EX-99.906.CERT.
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.
Meeder Advisor Funds
By: /s/ Bruce E. McKibben, Treasurer
Bruce E. McKibben, Treasurer
Date: September 3, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Bruce E. McKibben, Treasurer
Bruce E. McKibben, Treasurer
Date: September 3, 2003
By: /s/ Robert S. Meeder, Sr., Chairman
Robert S. Meeder, Sr., Chairman
Date: September 3, 2003