Fund Overview: Acadia Principal Conservation Fund (APFC) was created for investors seeking a better return than available from money market funds, certificates of deposit and guaranteed investment products with daily liquidity and greater return with only a marginally increased principal risk. APFC fills the need in any diversified portfolio as the short term component available for immediate term needs and for the timing of longer term security purchases.

Under normal market conditions, the Fund invests primarily in short-term debt instruments such as demand deposits, money market, certificates of deposit issued by FDIC-insured banks, U.S. Treasury obligations and repurchase agreements collateralized by U.S. government securities. The investment manager negotiates for larger volume rates on these investments.
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Market Commentary: This past quarter hurt equity and fixed income investors alike. In all, the 30-stock Dow Jones Industrial Average fell 12.1%. Unfortunately for the bulls, that was the smallest loss among the key U.S. equity averages, save for the Dow Jones Utilities, which ended largely unchanged. Interest-rate-sensitive utilities, it should be noted, benefited from a further drop in interest rates. That index will typically track interest rates, as high-yielding utilities are viewed as competition for fixed-income securities, such as bank CD's and bonds.

Elsewhere in the equities market, the story was far less cheery, as the NASDAQ lost 12.9%; the Standard and Poor's 500 Index shed 14.3%; the Russell 2000 (small-cap benchmark) fell 22.1%; the equally weighted Value Line (Arithmetic) Composite lost 21.0%; and the Dow Transports tumbled 22.8%.
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