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Performance data quoted represents past performance which is no guarantee
of future results. Investment return and principal value
will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than their
original cost. Performance shown does not reflect the
following sales charges: Investment A Shares of all equity
funds have a maximum sales charge of 5.75%. Investment
A Shares of fixed-income funds have a maximum sales charge of
4.75% except for Short/Intermediate Fixed Income Securities
Fund which has a maximum sales charge of 1.50%. If reflected, performance
would be lower. Click fund name to obtain standard fund performance.
Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For curent to the most recent
month end performance, view the Fund Performance page of this website.
Please click on a link below to view each funds quarterly commentary.
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Portfolio Managers: Kirk Mentzer
Question:
How Did Your Fund Perform This Quarter?
Answer:
For the first quarter ended March 31, 2008, the Huntington Dividend Capture Fund attained a total return of -0.84% at NAV for Investment A Shares. During this period the Standard & Poor’s 500 Index (S&P 500) returned -9.44%. In terms of measuring performance against an unmanaged index, we have created a custom index, the Dividend Capture Indices Blend (DCIB)7. The DCIB produced a total return of -1.21% for the three-month reporting period. (Click Fund name above to obtain standard
fund performance).
Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown does not reflect the following sales charges: Investment A Shares of all equity funds have a maximum sales charge of 5.75%; Investment A Shares of fixed-income funds have a maximum sales charge of 4.75% except for Short/Intermediate Fixed Income Securities Fund which has a maximum sales charge of 1.50%. If reflected, performance would be lower.
Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month end performance, view the Fund Performance page of this website.
Question:
Why Did Your Fund Perform This Way?
Answer:
Stocks continued to slump during the first quarter with financial and technology companies leading the decline. The S&P 500 index posted a total return of -9.44% during the period. In our view, the credit crisis triggered by the collapse of subprime mortgage backed CDOs generated a tremendous shock to the economy, as it reduces wealth, undermines confidence in the financial system and constrains credit extension. This credit crisis provided much of the impetus to send stocks into negative territory with rising volatility. Value-style common stocks performed slightly better than the S&P 500 during the quarter with a total return of -8.93% (S&P 500 Citi Value Index). Real Estate Investment Trusts (REIT)* held up better than in recent periods and managed to produce positive returns. Valuations on REIT shares became more attractive and fundamentals appeared to be stabilizing. Total return for REITs was a +0.72% during the quarter. Preferred** share total returns were the star performers during the quarter by posting a +5.53% total return. Prices on Preferred shares had simply become too depressed in the previous quarter which allowed for value investors to accumulate shares at attractive levels.
*REIT returns represented by the S&P REIT Index (Cap-weighted index of 100 stocks).
** Preferred returns represented by the Merrill Lynch US Fixed Rate Preferred Stock Index.
Question:
What Is Your Outlook for the Fund for Next Quarter?
Answer:
Our overall outlook for equity markets remains neutral with expected returns centered on 7% for the next twelve months. By many measures, it appears that the current bear market is getting close to ending: sentiment, price action, momentum, and internal market readings are nearing extremes that have typically signaled the end of price declines. Most likely, the lows have been seen, but the markets will trade within a wide range for some period of time (maybe through summer). As the credit crisis abates, we will seek entry points into the areas that have underperformed such as the financial and consumer discretion sectors. We have continued venturing back into the REIT market and now target approximately 14% of the Fund’s assets to this particular equity class.
Portfolio Manager: Martina Cheung and Jenny Jiang
Question:
How Did Your Fund Perform This Quarter?
Answer:
The Huntington Growth Fund Investment A Shares had a –10.11% total return at NAV for the quarter ended March 31, 2008. This compared to the Fund’s benchmark, the S&P 500/Citigroup Growth Index, return of -9.92% for the same period. (Click Fund
name above to obtain standard fund performance).
Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown does not reflect the following sales charges: Investment A Shares of all equity funds have a maximum sales charge of 5.75%; Investment A Shares of fixed-income funds have a maximum sales charge of 4.75% except for Short/Intermediate Fixed Income Securities Fund which has a maximum sales charge of 1.50%. If reflected, performance would be lower.
Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month end performance, view the Fund Performance page of this website.
Question:
Why Did Your Fund Perform This Way?
Answer:
The Fund has been focusing on investing in large cap growth stocks while maintaining a diversified portfolio, with 64 holdings at quarter-end. The market volatility we experienced during first-quarter, 2008 made the sector and stock selections particularly difficult. However, we are able to benefit from the good diversification of the Fund during this time period. Overall, the Fund’s performance was positively impacted double-digit weightings in Consumer Staples and Energy sectors, offset by double-digit weightings in Technology and Healthcare sectors.
Question:
What Is Your Outlook for the Fund for Next Quarter?
Answer:
We continue to believe that the disciplined approach of utilizing quantitative, qualitative and technical tools will provide us with the potential to consistently outperform the Fund’s benchmark over the long term.
Portfolio Managers: Craig Hardy and Chris Cwiklinski
Question:
How Did Your Fund Perform This Quarter?
Answer:
The Huntington Income Equity Fund provided a total return (price change plus dividend income) of –10.75% for the quarter ended March 31, 2008 for Investment A Shares at NAV. This compares with a total return of –9.44% for the Standard & Poor’s 500 Index and –8.94% for the S&P/Citigroup Value Index for the same time period. (Click Fund name above to obtain
standard fund performance).
Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown does not reflect the following sales charges: Investment A Shares of all equity funds have a maximum sales charge of 5.75%; Investment A Shares of fixed-income funds have a maximum sales charge of 4.75% except for Short/Intermediate Fixed Income Securities Fund which has a maximum sales charge of 1.50%. If reflected, performance would be lower.
Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month end performance, view the Fund Performance page of this website.
Question:
Why Did Your Fund Perform This Way?
Answer:
During the first quarter of 2008, the stock market continued a downward trend that had begun in October of the prior year. The majority of the decline came in the first three weeks of January, but despite several attempts by the market to rally in February and March, the general level of share prices showed no improvement between mid-January and the end of the quarter. The main reason for this weakness was investor concern over credit quality in the sub-prime lending market, which caused many financial institutions to lower their earnings expectations for the quarter and for the year. As a result, financial stocks led the overall market downward during the quarter, although all major market sectors posted negative returns during the period. The Huntington Income Equity Fund followed a similar return pattern during the quarter, and ended up the three-month period down about 10% from where it had begun. The Fund’s performance was diminished most notably by its investments in the telecommunication, consumer discretionary and financial sectors, and was enhanced by its investments in consumer staples, industrial and technology stocks. The stocks within the portfolio increased their dividends by 4.1% year-over-year on a weighted average basis, thus increasing the dividend return to Fund shareholders.
Question:
What Is Your Outlook for the Fund for Next Quarter?
Answer:
Near-term forecasts are always dangerous, as there are so many variables that can affect the performance of the stock market and the Fund. However, we believe that most of the stocks in the Huntington Income Equity Fund will continue to raise their dividends. Since these dividends form the basis of the income distributions we make to our shareholders, a rising dividend stream would allow us to increase the income we distribute on a monthly basis. We have also structured the Fund to take advantage of what we believe will be an investment environment that favors larger-capitalization, higher-quality companies.
Portfolio Manager: Madelynn Matlock
Question:
How Did Your Fund Perform This Quarter?
Answer:
The Huntington International Equity Fund Investment A Shares had a total return of -5.7% at NAV, for the quarter ended March 31, 2008 compared to a decline in the MSCI Europe, Australasia and Far East Index (EAFE) of -8.91% for the same time period. (Click Fund name above to obtain standard fund
performance).
Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown does not reflect the following sales charges: Investment A Shares of all equity funds have a maximum sales charge of 5.75%; Investment A Shares of fixed-income funds have a maximum sales charge of 4.75% except for Short/Intermediate Fixed Income Securities Fund which has a maximum sales charge of 1.50%. If reflected, performance would be lower.
Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month end performance, view the Fund Performance page of this website.
Question:
Why Did Your Fund Perform This Way?
Answer:
A significant portion of the EAFE index performance during the quarter occurred in January on the heels of global concern about credit markets. The index has been somewhat range bound since that time. Most regions performed inline with the exception of the Asia Pacific ex Japan region and the Emerging Markets sector. They were down 14.2% and 11.3% respectively. The Huntington International Equity Fund’s regional exposure was lower than the Index across the board due to a higher than usual cash position which reduced overall volatility. The Fund also had close to a market weighting in Japanese stocks, which did relatively well. On a relative basis, the regional allocation of the Fund was beneficial to its relative performance. Continued weakening of the U.S. dollar during the quarter added to the fund’s overall performance, especially in yen and Swiss franc denominated investments.
Defensive sectors such as Consumer Staples performed strongly during March. This was a switch from the first two months of the year when Energy and Materials were the dominant performers. Diversified Financials and Healthcare continued to be weak year-to-date. The Fund’s overweight in Consumer Staples and underweight in Financials added significantly to relative performance. Energy and materials stocks also boosted returns earlier in the quarter.
Question:
What is Your Outlook for the Fund for the Next Quarter?
Answer:
Global growth forecasts have been ratcheting down as the seizure in credit markets has continued into 2008. It is clear that there will be some negative impact on growth overseas from the slowdown in US economic activity, but it is unclear as to whether the effect will be marginal or more significant. Overseas companies and individuals have not binged on credit to the US’s extent. While some market participants are eagerly looking for a quick bottom in valuations, we believe that it will take some time for winners and losers in this environment to sort out. The restoration of normal liquidity to markets will take time, and it is unclear how inflation will behave given the high level of monetary growth stimulus in recent months. We continue to take a risk averse approach to portfolios of overseas stocks, focusing on high quality, value added companies and regional diversification.
Portfolio Manager: Christopher M. Rowane, CFA
Question:
How Did Your Fund Perform This Quarter?
Answer:
The Huntington Mid Corp America Fund total return was –9.13% at NAV for Investment A Shares for the quarter ended March 31, 2008. The Fund’s benchmark, the S&P 400 Mid Cap Index, returned –8.85%, while the Lipper Mid Cap Core Category averaged –9.62% for the same period. (Click Fund name above to obtain standard fund performance).
Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown does not reflect the following sales charges: Investment A Shares of all equity funds have a maximum sales charge of 5.75%; Investment A Shares of fixed-income funds have a maximum sales charge of 4.75% except for Short/Intermediate Fixed Income Securities Fund which has a maximum sales charge of 1.50%. If reflected, performance would be lower.
Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month end performance, view the Fund Performance page of this website.
Question:
Why Did Your Fund Perform This Way?
Answer:
The Fund performance was closely tied to its benchmark during the quarter, as it was exposed to high volatility while trying to provide a quality risk adjusted return. Performance of mid-cap stocks traded inline with the other market cap indexes, with extreme volatility in a concerning economic environment. Performance was reflective of stock selections toward quality growth during a volatile market trend in the period, as well as a sector strategy of over-weighing the Energy, Technology, Materials and Healthcare sectors and under-weighting the Consumer Discretionary, Financial and Utilities sectors. Security selection supported the Fund’s performance during the quarter in the Consumer Discretionary, Utilities and Material sectors, while the Financial, Technology and Healthcare sectors proved to be a drag on performance relative to the benchmark. The Fund was the beneficiary of the quality holdings during a relatively volatile market in the first quarter of 2008, reflecting the process of due diligence as it relates to the selection and retention of equity holdings in the portfolio.
Question:
What Is Your Outlook for the Fund for the Next Quarter?
Answer:
The outlook for the next quarter appears moderately positive for a slowing economic expansion with the Federal Reserve already reducing interest rates in the past quarters. The earnings outlook for the mid-cap market appears positive, but with an upper single digit growth outlook. We believe that merger and acquisition activity will slow measurably, but mid-caps continue to be favorable candidates to be acquired by the large-cap companies, as well as international companies willing to expand, therefore presenting a great opportunity for the Huntington Mid Corp America Fund.
We intend to focus the portfolio on core names as well as larger mid-cap opportunities. Sector strategies will be focused on industrial, technology and healthcare holdings, and under-weighting in utilities, financial and consumer stocks. Security selection will continue with great due diligence for additions of high quality holdings with strong fundamentals.
Portfolio Manager: Randy Hare
Question:
How Did Your Fund Perform This Quarter?
Answer:
The Huntington New Economy Fund Investment A Shares produced a total return of -14.81% at NAV for the quarter ended March 31, 2008, trailing the Fund’s benchmark, S&P 400 Index, which had a return of -8.85%. (Click Fund name above to obtain standard fund
performance).
Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown does not reflect the following sales charges: Investment A Shares of all equity funds have a maximum sales charge of 5.75%; Investment A Shares of fixed-income funds have a maximum sales charge of 4.75% except for Short/Intermediate Fixed Income Securities Fund which has a maximum sales charge of 1.50%. If reflected, performance would be lower.
Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month end performance, view the Fund Performance page of this website.
Question:
Why Did Your Fund Perform This Way?
Answer:
Stocks produced negative returns during the first quarter with larger companies declining slightly less than smaller companies.. The large cap stocks represented by the S&P 500 index posted a total return of -9.44% while, small cap stocks represented by the S&P 600 index declined 7.46% during the period. The S&P Staples sector was the best performing sector followed by the S&P Basic Materials sector. In addition to defensive stocks outperforming the market, Sector performance favored two themes: 1) commodities such as energy and materials and 2) weak dollar beneficiaries. The fund was underweight Staples and overweight Materials. Technology stocks were the worst performing stocks during the quarter. The weak performance of the Technology Sector was a drag on the Fund’s performance during the quarter. As always, the mandate of the Fund has allowed us to invest in the leading creators and implementers of science and technology when and where the stock market appeared to dictate that it would reward such investments.
Question:
What Is Your Outlook for the Fund for Next Quarter?
Answer:
Productivity gains continue to provide economies and companies with a stronger competitive advantage. We believe that slower economic growth will increase the need for companies to become more efficient. We have focused our allocation to commodities and technology in order to emphasize stocks that will benefit from products in short supply. In addition, the lower relative value of the dollar should enable US companies to become more competitive in international markets. Agricultural and Technology companies have historically benefited from a weak dollar environment. Areas we intend to underweight include Utilities, and Finance. Our outlook for equity markets remains neutral with expected returns centered on 7% for the next twelve months but with higher levels of volatility. The lower expected returns reflect our concerns on slowing economic growth, weak dollar, and domestic earnings growth that will be more challenging going forward.
Portfolio Manager: Kirk Mentzer
Question:
How Did Your Fund Perform This Quarter?
Answer:
For the first quarter ended March 31, 2008, the Huntington Fixed Income Securities Fund attained a total return of +2.86% at NAV for Investment A Shares. During this period, the Lehman Brothers Government/Credit Index experienced a total return of +2.53%. (Click Fund name above to obtain
standard fund performance).
Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown does not reflect the following sales charges: Investment A Shares of all equity funds have a maximum sales charge of 5.75%; Investment A Shares of fixed-income funds have a maximum sales charge of 4.75% except for Short/Intermediate Fixed Income Securities Fund which has a maximum sales charge of 1.50%. If reflected, performance would be lower.
Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month end performance, view the Fund Performance page of this website.
Question:
Why Did Your Fund Perform This Way?
Answer:
Treasury securities were again star performers as the flight to quality trend gained momentum and drove yields down substantially in the first quarter of 2008. Bond sectors containing even the slightest amount of risk trailed in performance. Municipal, agency, and mortgage-backed securities all posted total returns moderately behind the Treasury market. Worst hit was the corporate bond market with excess returns 5% less than Treasury securities as continuing credit fears threatened access to capital markets. Taken together, broad market indices (Lehman Brothers Government/Credit Index) produced a total return of +2.53% for period. Credit risk premiums have moved from near-record low levels last spring to record wide levels over the past nine months. Generally speaking, lower risk strategies and investments faired better than high risk, aggressive strategies during the quarter.
Question:
What Is Your Outlook for the Fund for Next Quarter?
Answer:
Looking ahead, the Federal Reserve is forecasted to end its sustained drop in the Fed Funds rate target at 1.75%. We see many opportunities available to patient investors. Substantial policy efforts to bring the credit crisis to an end are already in place and just need time to work. It’s too early for broad optimism, but the worst appears to have passed. We are advocating quality corporate bonds, mortgage-backed securities, and municipal bonds at the expense of Treasury notes.
Portfolio Manager: William Doughty
Question:
How Did Your Fund Perform This Quarter?
Answer:
The Huntington Intermediate Government Income Fund Investment A Shares had a total return of -2.72% at NAV for the quarter ended March 31,2008 compared to the total return for the Lehman Brothers Intermediate Govt/Credit index return of 3.00%. The Lehman Index has a mix of corporate bonds that will carry a higher risk profile than the Huntington Intermediate Government Income Fund, which consists of only government, agencies and mortgage- backed securities. (Click Fund name above to obtain standard fund performance).
Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown does not reflect the following sales charges: Investment A Shares of all equity funds have a maximum sales charge of 5.75%; Investment A Shares of fixed-income funds have a maximum sales charge of 4.75% except for Short/Intermediate Fixed Income Securities Fund which has a maximum sales charge of 1.50%. If reflected, performance would be lower.
Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month end performance, view the Fund Performance page of this website.
Question:
Why Did Your Fund Perform This Way?
Answer:
The portfolio was positioned well for the steeper interest rate curve. Sector performance favored Treasuries during the quarter, an overweight to Callable Agencies added to performance, as this was the best performing sub-sector of the Index. The Huntington Intermediate Government Income Fund consists of Treasuries, agencies, and mortgage-backed securities. The overall quality of the Fund is AAA..
Question:
What Is Your Outlook for the Fund for Next Quarter?
Answer:
During the second quarter the Fund will look to keep our allocation at the same levels and add more Agencies if the spread to Treasuries continue to widen. We anticipate the Federal Fund Rate to be lowered by 25 basis points during the quarter. We will look to add MBS and callable agency notes with one time call provisions to the portfolio.
Portfolio Manager: William Doughty
Question:
How Did Your Fund Perform This Quarter?
Answer:
The Huntington Short/Intermediate Fixed Income Securities Fund Investment A Shares had a total return of 1.36% at NAV for the quarter ended March 31,2008 compared to the total return for the Merrill Lynch Corporate/ Government 1-5 year Index, which returned 2.50%. (Click Fund name above
to obtain standard fund performance).
Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown does not reflect the following sales charges: Investment A Shares of all equity funds have a maximum sales charge of 5.75%; Investment A Shares of fixed-income funds have a maximum sales charge of 4.75% except for Short/Intermediate Fixed Income Securities Fund which has a maximum sales charge of 1.50%. If reflected, performance would be lower.
Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month end performance, view the Fund Performance page of this website.
Question:
Why Did Your Fund Perform This Way?
Answer:
The Fund’s performance for the first quarter underperformed the index due to a combination of being short duration and the continued spread widening in the credit sector. The Fund held both Agencies and Corporate bonds that underperformed Treasuries due to the flight to quality in the marketplace and the uncertainty in the financial markets.
Question:
What Is Your Outlook for the Fund for Next Quarter?
Answer:
The Huntington Short/Intermediate Fixed Income Securities Fund will continue to review its corporate exposure, and look to reduce risk when possible. Corporate spreads have shown some volatility, but have provided a buying opportunity as we moved to a neutral weight from an underweight for quality corporate bonds. We intend to take advantage by selling those credits that look over-valued, compared to other credits. Asset selection and diversification remain imperative to achieving good returns over the next quarter. We intend to avoid financial names and emphasize insurance, healthcare, energy, capital goods and poison –put issuers. Callable agencies, with a one time call provision, also appear to offer value in this market environment.
Portfolio Manager: William Doughty and Gustave Seasongood
Question:
How Did Your Fund Perform This Quarter?
Answer:
For the Quarter ending March 31,2008 the Huntington Mortgage Securities Fund had a total return of 2.22% for Investment A Shares at NAV compared to the Lehman MBS Fixed Rate Index, which had a return of 2.43% for the same time period. (Click Fund name above to obtain
standard fund performance)
Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown does not reflect the following sales charges: Investment A Shares of all equity funds have a maximum sales charge of 5.75%; Investment A Shares of fixed-income funds have a maximum sales charge of 4.75% except for Short/Intermediate Fixed Income Securities Fund which has a maximum sales charge of 1.50%. If reflected, performance would be lower.
Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month end performance, view the Fund Performance page of this website.
Question:
Why Did Your Fund Perform This Way?
Answer:
The Huntington Mortgage Securities Fund’s performance was positively impacted by its holdings in Real Estate Investment Trusts (REITs). REITs benefited from strong cash flows during the quarter. Mortgages underperformed Treasuries during the quarter as the sub-prime debacle continued to affect the mortgage markets.
Question:
What Is Your Outlook for the Fund for Next Quarter?
Answer:
The Huntington Mortgage Securities Fund will look to add Government backed securities with higher coupons in the 15-year maturity range. We look for the mortgage market to improve during the quarter as the Federal Reserve continues to add liquidity to the market. REITs continue to offer good diversification benefits versus the mortgage market.
Portfolio Manager: Kathy Stylarek
Question:
How Did Your Fund Perform This Quarter?
Answer:
The Huntington Michigan Tax-Free Fund Investment A Shares at NAV had a -0.22% total return for the quarter ended March 31, 2008. The Fund’s benchmark, the Lehman Brothers 7-Year Municipal Bond Index, had a total return of 1.41%. (Click Fund name above to obtain standard
fund performance).
Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown does not reflect the following sales charges: Investment A Shares of all equity funds have a maximum sales charge of 5.75%; Investment A Shares of fixed-income funds have a maximum sales charge of 4.75% except for Short/Intermediate Fixed Income Securities Fund which has a maximum sales charge of 1.50%. If reflected, performance would be lower.
Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month end performance, view the Fund Performance page of this website.
Question:
Why Did Your Fund Perform This Way?
Answer:
During the first quarter of 2008, short-term rates came down as a result of the Federal Reserve moving rates to 2.25%. This continued to cause the short-end of the curve to steepen. As for the intermediate section of the curve, the seven to fifteen year part of the curve showed good value. The intermediate end of the curve, 10 to 15 years, showed some signs of steepening as rates moved up. The difference between yields on the short-end and the long-end expanded to 200 basis points (2.00%) from 105 basis points last quarter. In addition, municipals, as a percentage of Treasuries, were better all across the curve. The percentage of municipals to Treasuries held strong at 100-123% from 3 years maturity on out. Municipals became cheaper due to the recent news regarding municipal insurers and the liquidity issues from auction rate securities. In addition, there were conversations about setting up a global rating system. The Fund has continued to be non-AMT and non-leveraged.
Question:
What Is Your Outlook for the Fund for Next Quarter?
Answer:
Looking at the second quarter of 2008, the new issue calendar is expected to pick up in the amount of deals coming to market, as there is continued interest in infrastructure support due to hurricanes Katrina and Rita. The importance of municipal services became very evident during these crises. Roadways, hospitals, communications, etc. are a big focus for municipal planners to have available during a crisis. This focus should help to bring the needed supply to the market in the future.
Other events that the municipal market is watching very closely are the November elections and the Supreme Court Case: Davis versus Kentucky. November will be a big month for municipal news.
Looking forward at the coming 2008 quarters, we should see some resolution about the new rating system and the election news will heat up. The news regarding the auction rate “fails” should die down and Issuers should look to re-structure their debt to take the auction rate securities off their balance sheets. Municipals should be cheap and offer some good opportunities for the next few months.
Portfolio Manager: Kathy Stylarek
Question:
How Did Your Fund Perform This Quarter?
Answer:
The Huntington Ohio Tax-Free Fund Investment A Shares at NAV had a 0.34% total return for the quarter ended March 31, 2008. The Fund’s benchmark, the Lehman Brothers 7-Year Municipal Index, had a total return of 1.41%. (Click Fund name above to obtain standard fund performance).
Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown does not reflect the following sales charges: Investment A Shares of all equity funds have a maximum sales charge of 5.75%; Investment A Shares of fixed-income funds have a maximum sales charge of 4.75% except for Short/Intermediate Fixed Income Securities Fund which has a maximum sales charge of 1.50%. If reflected, performance would be lower.
Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month end performance, view the Fund Performance page of this website.
Question:
Why Did Your Fund Perform This Way?
Answer:
During the first quarter of 2008, short-term rates came down as a result of the Federal Reserve moving rates to 2.25%. This continued to cause the short-end of the curve to steepen. As for the intermediate section of the curve, the seven to fifteen year part of the curve showed good value. The intermediate end of the curve, 10 to 15 years, showed some signs of steepening as rates moved up. The difference between yields on the short-end and the long-end expanded to 200 basis points (2.00%) from 105 basis points last quarter. In addition, municipals, as a percentage of Treasuries, were better all across the curve. The percentage of municipals to Treasuries held strong at 100-123% from 3 years maturity on out. Municipals became cheaper due to the recent news regarding municipal insurers and the liquidity issues from auction rate securities. In addition, there were conversations about setting up a global rating system. The Fund has continued to be non-AMT and non-leveraged.
Question:
What Is Your Outlook for the Fund for Next Quarter?
Answer:
Looking at the second quarter of 2008, the new issue calendar is expected to pick up in the amount of deals coming to market, as there is continued interest in infrastructure support due to hurricanes Katrina and Rita. The importance of municipal services became very evident during these crises. Roadways, hospitals, communications, etc. are a big focus for municipal planners to have available during a crisis. This focus should help to bring the needed supply to the market in the future.
Other events the municipal market is watching very closely are the November elections and the Supreme Court Case: Davis versus Kentucky. November will be a big month for municipal news. Looking forward at the coming 2008 quarters, we should see some resolution about the new rating system and the election news will heat up. The news regarding the auction rate “fails” should die down and Issuers should look to re-structure their debt to take the auction rate securities off their balance sheets. Municipals should be cheap and offer some good opportunities for the next few months.
Portfolio Manager: Paul C. Koscik
Question:
How Did Your Fund Perform This Quarter?
Answer:
The Huntington Rotating Markets Fund Investment A Shares had a –11.82% total return at NAV for the quarter ended March 31, 2008. This compared to the –9.44 % return of the Standard & Poor’s 500 Index (S&P 500). (Click Fund name above to obtain standard fund
performance).
Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown does not reflect the following sales charges: Investment A Shares of all equity funds have a maximum sales charge of 5.75%; Investment A Shares of fixed-income funds have a maximum sales charge of 4.75% except for Short/Intermediate Fixed Income Securities Fund which has a maximum sales charge of 1.50%. If reflected, performance would be lower.
Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month end performance, view the Fund Performance page of this website.
Question:
Why Did Your Fund Perform This Way?
Answer:
After being invested in the “Global” segment of the equity market for more than four years, the Huntington Rotating Markets Fund rotated to the “Large Cap” segment of the market in February 2008. The rotation was made for two reasons. First, international stocks have outperformed the S&P 500 for nearly five years and their performance relative to that index was waning. Second, because the US Federal Reserve has been aggressively cutting interest rates, in contrast to no interest rate cuts for the European Union, the US economy is expected to lead international economies in any global economic recovery. This should benefit US equities.
The Fund significantly lagged the S&P 500 in the first half of the quarter due to its international exposure. Although the Fund rotated to the large cap segment of the equity market and tracked the performance of the S&P 500 for the remainder of the quarter, it was not able to erase the negative relative performance deficit created in the beginning of the quarter.
Question:
What Is Your Outlook for the Fund for Next Quarter?
Answer:
The Fund is now invested in the large cap segment of the stock market. Its largest holding is the ETF for the Dow Jones Industrial Average. It also has significant exposure to specific segments of the large cap equity market such as in Energy, Industrials, and Basic Materials. These segments are expected to do well in the current economic environment. The Fund is structured to provide competitive returns during any stock market rally while displaying less volatility in the event of a market decline.
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Portfolio Manager: Peter Sorrentino
Question:
How Did Your Fund Perform This Quarter?
Answer:
The Huntington Real Strategies Fund Investment A Shares had a total return of –5.57% at NAV, for the quarter ended March 31, 2008. This compares favorably with the –9.44% return experienced by its benchmark, the Standard & Poor’s 500 Index (S&P 500), for the same period. (Click Fund name above to obtain standard fund
performance).
Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown does not reflect the following sales charges: Investment A Shares of all equity funds have a maximum sales charge of 5.75%; Investment A Shares of fixed-income funds have a maximum sales charge of 4.75% except for Short/Intermediate Fixed Income Securities Fund which has a maximum sales charge of 1.50%. If reflected, performance would be lower.
Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month end performance, view the Fund Performance page of this website.
Question:
Why Did Your Fund Perform This Way?
Answer:
Continued tight supply conditions for precious metals driven by speculators and production problems in South Africa encouraged investor demand for the shares of companies directly involved in mining and for companies that produce mining equipment. There was weakness during the period in the share prices of oil refiners as a glut of ethanol and rising gasoline inventory levels drove down oil refining margins. Energy infrastructure and supply companies were also subjected to share price declines as the spike in crude oil prices above $100 a barrel raised the specter of demand destruction. Agricultural issues suffered from sharp price declines despite rising prices for all grains; most notable was the sell-off in the fertilizer and farm equipment manufacturers. This was fueled more by the profit taking following the sharp share price run-up these companies have enjoyed since last fall. These two issues combined to negatively impacting the performance of the Fund’s holdings in those areas.
The best performing foreign market during the quarter was South Africa, which the Fund’s exposure to precious metals mining, steel and energy companies benefited from. This is significant reversal from the prior quarter where South African shares were the worst performers. The Brazilian market continues to be a performance contributor in both energy and agriculture.
Question:
What Is Your Outlook for the Fund for Next Quarter?
Answer:
Weak manufacturing activity in North America and Western Europe will likely soften prices in industrial commodities, including crude oil. Agricultural commodities however should continue to benefit from low inventory levels and the emergence of export policies aimed at limiting local supply shortages. In effect, these interventions will only serve to exacerbate shortages and push prices to new highs. The crisis gripping the financial sector will continue to abate, as it does, it is our intent to continue to build upon the fund’s nascent position in real estate via publicly traded Real Estate Investment Trusts (REIT’s).
Portfolio Managers: Randy Bateman
Question:
How Did Your Fund Perform This Quarter?
Answer:
The Huntington Situs Fund Investment A Shares had a total return of –10.51 at NAV for the quarter ended March 31, 2008. This compares with the –7.46% return experienced by its benchmark, the Standard & Poor’s Small Cap Index (S & P 600) for the same period. (Click Fund name
above to obtain standard fund performance).
Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown does not reflect the following sales charges: Investment A Shares of all equity funds have a maximum sales charge of 5.75%; Investment A Shares of fixed-income funds have a maximum sales charge of 4.75% except for Short/Intermediate Fixed Income Securities Fund which has a maximum sales charge of 1.50%. If reflected, performance would be lower.
Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month end performance, view the Fund Performance page of this website.
Question:
Why Did Your Fund Perform This Way?
Answer:
The Huntington Situs Fund was overweight in Energy, Materials and Industrials during the quarter. These were areas that were favored during the summer months as opposed to the Financials, which took a big hit due to the Collateralized Debt Obligations (CDO) crisis. We were significantly underweight in Financials and were completely devoid of CDO issues. Nonetheless, the stocks that comprise much of the location factors in the decision making process were in areas that had real estate busts during the first quarter. Florida was especially hard hit as the over speculation in condos and other real estate turned negative. This resulted in relative underperformance.
Question:
What Is Your Outlook for the Fund for Next Quarter?
Answer:
There is now a record $3.5 trillion in money market assets. This money is earning an average of less than 2%. Consequently, it is there for a short-term hedge only. We feel that once certain economic statistics turn positive in the second half of 2008 the market could be in for a strong rebound. It is difficult to determine just how much in advance the market may ‘peer over the valley,’ so the second quarter could be much better than last quarter for investors.
Portfolio Sub-Advisor: Laffer Investments, Inc.
Question:
How Did Your Fund Perform This Quarter?
Answer:
For the first quarter of 2008, the Huntington Macro 100 Fund had a total return of (13.53%) at NAV for Investment A Shares. The Standard & Poor’s 500 Index, the Fund’s benchmark, had a return of –(9.44%) for the same period. (Click Fund name above to obtain standard
fund performance).
Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown does not reflect the following sales charges: Investment A Shares of all equity funds have a maximum sales charge of 5.75%; Investment A Shares of fixed-income funds have a maximum sales charge of 4.75% except for Short/Intermediate Fixed Income Securities Fund which has a maximum sales charge of 1.50%. If reflected, performance would be lower.
Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month end performance, view the Fund Performance page of this website.
Question:
Why Did Your Fund Perform This Way?
Answer:
The Huntington Macro 100 Fund’s performance versus the S&P 500 was mainly attributable to allocations to the Consumer Discretionary (negative), Information Technology (negative) and Financial (negative) sectors, but with the Energy sector standing out as a bright spot. Security selection in several key areas hurt the performance of the Fund for the period, in addition to sector allocations.
The overall economic environment has changed quite a bit since last quarter and 2007. While Gross Domestic Product continued to extend its winning streak for consecutive quarters of positive GDP growth to 24, the first quarter was very anemic and portends a bad start to 2008. Unemployment remained strong at 5.1% but that was up from 4.6%. Expectations are that employment will remain a soft spot for at least another quarter or until the end of the year. Corporate profits (approx. 7.9% of GDP) and wage growth showed signs of weakness but still remained relatively strong. Additionally, interest rates continued to fall as the credit crisis continued and core inflation stayed under control and has remained historically low. Energy prices, specifically oil, have remained quite volatile and have broken through previous market highs set earlier last year. This has continued to be a source of concern for the markets and has affected the Fund for better and for worse over the past. The US dollar weakened further in the foreign exchange relative to the Euro and Pound Sterling. Additionally, the sub-prime crisis combined with the continued weak housing market caused the financial and consumer discretionary sectors to perform badly over the period. These major economic variables are some of the ones used by the management to select securities for the portfolio.
The positioning of the factors used to select the securities for the Fund changed for the quarter. The Fund was repositioned during the quarter to not have any particular capitalization bias (large or small). Additionally, the interest rate model was focused to target those companies that benefit more from falling interest rate environments.
Question:
What Is Your Outlook for the Fund for Next Quarter?
Answer:
The portfolio is now positioned to capitalize on a weaker and slow US economy that could be entering a mild recession. Certain limits have been put on the Fund with regard to minimum and maximum exposures to economic sectors as a means of reducing some of the volatility. We believe the portfolio is well positioned for the current economic environment.
For more complete information, view the prospectuses available on this website or ask your investment professional for a prospectus. You should consider the fund’s investment objectives, risks, charges, and expenses carefully before you invest. Information about these and other important subjects is in the fund’s prospectus, which you should read carefully before investing.
An investment in money market funds is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in these funds.
Index definitions may be found in the Glossary section of this website.
Credit ratings pertain only to the securities in the portfolio and do not protect fund shares against market risk.
Diversification does not assure a profit nor protect against loss.
There are no guarantees that dividend paying stocks will continue to pay dividends. In addition, dividend paying stocks may not experience the same capital appreciation potential as non-dividend paying stocks.
Bond prices are sensitive to changes in interest rates and a rise in interest rates can cause a decline in their prices.
Duration is a measure of a security’s price sensitivity to changes in interest rates. Securities with longer durations are more sensitive to changes in interest rates than securities of shorter durations.
The value of some mortgage-backed securities may be particularly sensitive to changes in prevailing interest rates, and although the securities are generally supported by some form of government or private insurance, there is no assurance that private guarantors or insurers will meet their obligations.
1 International investing involves special risks including currency risk, political risks, increased volatility of foreign securities, and differences in auditing and other financial standards. Prices of emerging markets securities can be significantly more volatile than the prices of securities in developed countries.
2 Investments in real estate investment trusts (“REITs”) involve special risks associated with an investment in real estate, such as limited liquidity and interest rate risks.
3 Income may be subject to the federal alternative minimum tax.
4 Small company stocks may be less liquid and subject to greater price volatility than large capitalization stocks
5 Funds whose investments are concentrated in a specific industry or sector may be subject to a higher degree of market risk than funds whose investments are diversified. In addition, the Fund may be subject to specific risks of the technology sector, such as obsolescence.
6 Investments in real estate investment trusts (“REITs”) and real-estate related securities involve special risks associated with an investment in real estate, such as limited liquidity and interest rate risks and may be more volatile than other securities. While inflation-protected securities (“IPS”) adjust in response to inflation as measured by a specific price index, the value of these securities generally may still decline in response to an increase in real interest rates. In addition, any increase in principal value of an IPS caused by an increase in the price index is taxable in the year the increase occurs, even though the Fund will not receive cash representing the increase at the time. Commodities-related investments are subject to the same risks as direct investments in commodities and prices may rise and fall in response to many factors such as economic, political and regulatory developments.
7 The DCIB is a custom, blended index comprised of the following three indices with their noted respective weightings: S&P 500/Citigroup Value Index (40%), Merrill Lynch Fixed Rate Preferred Index (40%) and NAREIT Index (20%). This custom, blended index and its respective weightings are reflective of the Fund’s sector diversification.
8 An investment in an exchange-traded fund (ETF) generally presents the same primary risks as an investment in a conventional fund (i.e., one that is not exchange traded) that has the same investment objectives, strategies, and policies. The price of an ETF can fluctuate up or down, and the Fund could lose money investing in an ETF if the prices of the securities owned by the ETF go down. In addition, ETFs may be subject to the following risks that do not apply to conventional funds:
(i) the market price of an ETF’s shares may trade above or below their net asset value; (ii) an active trading market for an ETF’s shares may not develop or be maintained; or (iii) trading of an ETF’s shares may be halted if the listingexchange’s officials deem such action appropriate, the shares are delisted from the exchange, or the activation of market-wide “circuit breakers” (which are tied to large decreases in stock prices) halts stock trading generally.
9 Effective January 24, 2008 the Huntington Situs Small Cap Fund changed its name to the Huntington Situs Fund, and changed its investment strategies and policies such that it will no longer be required to invest at least 80% of it assets in small-cap securities as measured within the range of the S&P 600 Small Cap Index. The Fund is permitted to invest its assets in U.S. and foreign equity securities whose situs, or geographical locations, give them a competitive advantage and the potential to outperform, regardless of market capitalization.
10Because the fund invests in a limited number of holdings, an increase or decrease in the value of a single security may have a greater impact on the fund’s net asset value and total return.
Investments cannot be made directly in an index.
Edgewood Services, Inc. is the distributor of the funds, and is not affiliated with The Huntington National Bank. Huntington Funds are available through Huntington Investment Company, member FINRA/SIPC, a subsidiary of Huntington National Bank. Huntington Asset Advisors, Inc. is the Investment Advisor of Huntington Funds.
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