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 811-58433

Marshall Funds, Inc.

(Exact name of registrant as specified in charter)

111 East Kilbourn Avenue

            Milwaukee, WI 53202            

(Address of principal executive offices) (Zip code)

John M. Blaser

M&I Investment Management Corp.

111 East Kilbourn Avenue

            Milwaukee, WI 53202            

(Name and address of agent for service)

Registrant’s telephone number, including area code: (800) 236-3863

Date of fiscal year end: August 31

Date of reporting period: February 28, 2006

Item 1. Reports to Stockholders

February 28, 2006

Marshall Large-Cap Value Fund

Marshall Large-Cap Growth Fund

Marshall Mid-Cap Value Fund

Marshall Mid-Cap Growth Fund

Marshall Small-Cap Growth Fund

Marshall International Stock Fund

Marshall Government Income Fund

Marshall Intermediate Bond Fund

Marshall Intermediate Tax-Free Fund

Marshall Short-Term Income Fund

Marshall Government Money Market Fund

Marshall Prime Money Market Fund

Marshall Tax-Free Money Market Fund

Table of Contents

Financial Information
Expense Example	1
Schedule of Investments	3
Marshall Large-Cap Value Fund	3
Marshall Large-Cap Growth Fund	5
Marshall Mid-Cap Value Fund	7
Marshall Mid-Cap Growth Fund	9
Marshall Small-Cap Growth Fund	12
Marshall International Stock Fund	15
Marshall Government Income Fund	18
Marshall Intermediate Bond Fund	20
Marshall Intermediate Tax-Free Fund	23
Marshall Short-Term Income Fund	26
Marshall Government Money Market Fund	29
Marshall Prime Money Market Fund	29
Marshall Tax-Free Money Market Fund	33
Notes to Schedule of Investments	38
Statements of Assets and Liabilities	40
Statements of Operations	42
Statements of Changes in Net Assets	44
Statement of Cash Flows	48
Financial Highlights	49
Notes to Financial Statements	55
Results of the Special Meeting	69

Not FDIC Insured No Bank Guarantee May Lose Value

Expense Example (Unaudited)

For the Six Months Ended February 28, 2006

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire six month period ended February 28, 2006 (9/1/05-2/28/06).

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on a Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in a Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Advisor(2)								Investor								Institutional
Fund	Beginning account value 9/1/05		Ending account value 2/28/06		Annualized Expense Ratio		Expenses paid during period 9/1/05- 2/28/06(1)		Beginning account value 9/1/05		Ending account value 2/28/06		Annualized Expense Ratio		Expenses paid during period 9/1/05- 2/28/06(1)		Beginning account value 9/1/05		Ending account value 2/28/06		Annualized Expense Ratio		Expenses paid during period 9/1/05- 2/28/06(1)
Large-Cap Value
Actual	$	1,000.00	$	1,075.80	1.2221	%	$	6.29	$	1,000.00	$	1,075.80	1.2222	%	$	6.29	$	—	$	—	—	%	$	—
Hypothetical (5% return before expenses)		1,000.00		1,018.94	1.2221			6.12		1,000.00		1,018.94	1.2222			6.12		—		—	—			—
Large-Cap Growth
Actual		1,000.00		1,040.50	1.2627			6.39		1,000.00		1,040.50	1.2628			6.39		—		—	—			—
Hypothetical (5% return before expenses)		1,000.00		1,018.74	1.2627			6.32		1,000.00		1,018.74	1.2628			6.32		—		—	—			—
Mid-Cap Value
Actual		1,000.00		1,049.10	1.1857			6.02		1,000.00		1,049.10	1.1857			6.02		—		—	—			—
Hypothetical (5% return before expenses)		1,000.00		1,019.12	1.1857			5.94		1,000.00		1,019.12	1.1857			5.94		—		—	—			—
Mid-Cap Growth
Actual		1,000.00		1,107.00	1.2993			6.79		1,000.00		1,107.00	1.2994			6.79		—		—	—			—
Hypothetical (5% return before expenses)		1,000.00		1,018.56	1.2993			6.50		1,000.00		1,018.56	1.2994			6.50		—		—	—			—

(See Notes which are an integral part of the Financial Statements)

1

Expense Example (Unaudited) (continued)

	Advisor(2)								Investor								Institutional
Fund	Beginning account value 9/1/05		Ending account value 2/28/06		Annualized Expense Ratio		Expenses paid during period 9/1/05- 2/28/06(1)		Beginning account value 9/1/05		Ending account value 2/28/06		Annualized Expense Ratio		Expenses paid during period 9/1/05- 2/28/06(1)		Beginning account value 9/1/05		Ending account value 2/28/06		Annualized Expense Ratio		Expenses paid during period 9/1/05- 2/28/06(1)
Small-Cap Growth
Actual	$	1,000.00	$	1,191.60	1.5396	%	$	8.37	$	1,000.00	$	1,191.60	1.5395	%	$	8.37	$	—	$	—	—	%	$	—
Hypothetical (5% return before expenses)		1,000.00		1,017.37	1.5396			7.70		1,000.00		1,017.37	1.5395			7.70		—		—	—			—
International Stock
Actual		1,000.00		1,159.00	1.5036			8.05		1,000.00		1,159.00	1.5037			8.05		1,000.00		1,159.10	1.2539			6.71
Hypothetical (5% return before expenses)		1,000.00		1,017.54	1.5036			7.52		1,000.00		1,017.54	1.5037			7.52		1,000.00		1,018.78	1.2539			6.28
Government Income
Actual		1,000.00		1,004.00	1.0988			5.46		1,000.00		1,005.10	0.8690			4.32		—		—	—			—
Hypothetical (5% return before expenses)		1,000.00		1,019.55	1.0988			5.50		1,000.00		1,020.69	0.8690			4.35		—		—	—			—
Intermediate Bond
Actual		1,000.00		1,001.80	0.9601			4.77		1,000.00		1,002.90	0.7300			3.63		—		—	—			—
Hypothetical (5% return before expenses)		1,000.00		1,020.24	0.9601			4.81		1,000.00		1,021.38	0.7300			3.66		—		—	—			—
Intermediate Tax-Free
Actual		—		—	—			—		1,000.00		1,004.50	0.6204			3.08		—		—	—			—
Hypothetical (5% return before expenses)		—		—	—			—		1,000.00		1,021.92	0.6204			3.11		—		—	—			—
Short-Term Income
Actual		1,000.00		1,011.90	0.7704			3.84		1,000.00		1,013.00	0.5405			2.70		—		—	—			—
Hypothetical (5% return before expenses)		1,000.00		1,021.18	0.7704			3.86		1,000.00		1,022.32	0.5405			2.71		—		—	—			—
Government Money Market
Actual		—		—	—			—		1,000.00		1,018.00	0.4496			2.25		1,000.00		1,019.30	0.1996			1.00
Hypothetical (5% return before expenses)		—		—	—			—		1,000.00		1,022.77	0.4496			2.26		1,000.00		1,024.01	0.1996			1.00
Prime Money Market
Actual		1,000.00		1,017.00	0.7495			3.75		1,000.00		1,018.50	0.4498			2.25		1,000.00		1,019.80	0.1999			1.00
Hypothetical (5% return before expenses)		1,000.00		1,021.28	0.7495			3.76		1,000.00		1,022.77	0.4498			2.26		1,000.00		1,024.01	0.1999			1.00
Tax-Free Money Market
Actual		—		—	—			—		1,000.00		1,012.60	0.4495			2.24		1,000.00		1,013.90	0.1995			1.00
Hypothetical (5% return before expenses)		—		—	—			—		1,000.00		1,022.77	0.4495			2.25		1,000.00		1,024.01	0.1995			1.00

(1) Expenses are equal to the Funds’ expense ratios multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

(2) Effective November 1, 2005, the Rule 12b-1 fee of 0.25% applicable to the Advisor Class of Shares of all Funds other than the Prime Money Market Fund was eliminated for such Funds. Concurrent with this change, the shareholder servicing agent eliminated the waiver of the 0.25% shareholder servicing fee applicable to the Advisor Class of Shares of these Funds. Accordingly, the expense ratio applicable to the Advisor Class of Shares did not change.

(See Notes which are an integral part of the Financial Statements)

2

February 28, 2006 (Unaudited)

Schedule of Investments

Large-Cap Value Fund

Description	Shares	Value
Common Stocks — 98.4%
Consumer Discretionary — 5.0%
Apparel Retail — 0.1%
The TJX Companies, Inc.	13,000	$	318,370
Department Stores — 0.7%
J.C. Penney Co., Inc.	41,000		2,404,240
Homebuilding — 1.7%
Lennar Corp.	65,400		3,914,844
NVR, Inc. (2)	2,300		1,731,900
			5,646,744
Housewares & Specialties — 0.5%
Newell Rubbermaid, Inc.	62,900		1,564,323
Movies & Entertainment — 0.5%
News Corp.	100,100		1,629,628
Publishing & Printing — 0.6%
Gannett Co., Inc. (1)	31,500		1,958,040
Retail-Home Improvement — 0.4%
Home Depot, Inc.	36,200		1,525,830
Specialized Consumer Services — 0.4%
H&R Block, Inc.	60,500		1,349,150
Tires & Rubber — 0.1%
The Goodyear Tire & Rubber Co. (2)	22,400		320,992
Total Consumer Discretionary			16,717,317
Consumer Staples — 3.9%
Agricultural Products — 1.2%
Archer-Daniels-Midland Co.	133,700		4,240,964
Packaged Foods — 0.2%
General Mills, Inc.	13,900		684,575
Tobacco — 2.5%
Altria Group, Inc.	83,900		6,032,410
Reynolds American, Inc.	22,200		2,356,530
			8,388,940
Total Consumer Staples			13,314,479
Energy — 14.3%
Oil & Gas-Exploration and Production — 2.7%
Apache Corp.	59,000		3,948,280
Devon Energy Corp. (1)	85,400		5,007,002
			8,955,282
Oil & Gas-Integrated — 10.6%
Chevron Corp.	177,000		9,996,960
ConocoPhillips	185,900		11,332,464
Exxon Mobil Corp.	174,400		10,354,128
Marathon Oil Corp.	58,800		4,151,280
			35,834,832
Oil & Gas-Refining/Manufacturing — 1.0%
Valero Energy Corp.	65,400		3,517,866
Total Energy			48,307,980

Description	Shares	Value
Common Stocks (continued)
Financials — 38.6%
Asset Management & Custody Bank — 1.3%
Bank of New York Co., Inc., The	125,900	$	4,310,816
Diversified Banks — 10.1%
Bank of America Corp.	244,600		11,214,910
Comerica, Inc.	70,200		4,023,864
U.S. Bancorp	246,800		7,628,588
Wells Fargo & Co.	176,800		11,350,560
			34,217,922
Diversified Financial Services — 3.5%
Citigroup, Inc.	252,900		11,726,973
Insurance-Life/Health — 1.3%
Prudential Financial, Inc.	55,700		4,291,128
Insurance-Property & Casualty — 3.7%
Chubb Corp.	41,200		3,944,900
Fidelity National Financial, Inc.	88,800		3,353,088
First American Corp.	43,400		1,829,744
W. R. Berkley Corp.	61,700		3,571,813
			12,699,545
Investment Banking & Brokerage — 11.1%
A.G. Edwards, Inc.	23,700		1,059,390
Goldman Sachs Group, Inc.	58,200		8,223,078
Lehman Brothers Holdings, Inc.	57,400		8,377,530
Merrill Lynch & Co., Inc.	153,700		11,867,177
Morgan Stanley	137,300		8,191,318
			37,718,493
Regional Banks — 7.6%
BB&T Corp.	94,400		3,731,632
First Horizon National Corp.	93,200		3,645,052
KeyCorp	104,779		3,905,113
National City Corp. (1)	118,600		4,127,280
North Fork Bancorporation, Inc.	145,200		3,708,408
PNC Financial Services Group	60,300		4,242,105
TCF Financial Corp.	93,800		2,378,768
			25,738,358
Total Financials			130,703,235
Healthcare — 8.6%
Biotechnology — 1.0%
Amgen, Inc. (1)(2)	21,800		1,645,682
Gilead Sciences, Inc. (1)(2)	27,700		1,724,879
			3,370,561
Healthcare Distributors — 0.1%
McKesson Corp.	6,700		362,671
Healthcare Services — 0.2%
Express Scripts, Inc. (2)	7,000		610,890
Managed Healthcare — 1.2%
WellPoint, Inc. (2)	54,100		4,154,339
Pharmaceuticals — 6.1%
Abbott Laboratories	89,500		3,954,110
Allergan, Inc. (1)	3,000		324,780
Bristol-Myers Squibb Co.	26,800		619,080
Johnson & Johnson	19,300		1,112,645
King Pharmaceuticals, Inc. (2)	104,700		1,701,375
Pfizer, Inc.	437,900		11,468,601
Sepracor, Inc. (2)	24,200		1,386,902
			20,567,493
Total Healthcare			29,065,954

(See Notes which are an integral part of the Financial Statements)

3

Marshall Funds

Large-Cap Value Fund (continued)

Description	Shares	Value
Common Stocks (continued)
Industrials — 6.5%
Aerospace & Defense — 3.0%
General Dynamics Corp.	5,800	$	714,966
L-3 Communications Holdings, Inc.	44,700		3,715,017
Lockheed Martin Corp.	22,800		1,661,436
Northrop Grumman Corp.	63,900		4,095,990
			10,187,409
Construction & Farm Machinery — 2.1%
Cummins, Inc. (1)	39,700		4,298,716
Deere & Co.	35,700		2,722,839
			7,021,555
Employment Services — 0.4%
Manpower, Inc.	22,200		1,190,808
Industrial Conglomerates — 0.4%
3M Co.	19,400		1,427,646
Railroads — 0.6%
Norfolk Southern Corp.	39,600		2,026,728
Total Industrials			21,854,146
Information Technology — 5.6%
Communications Equipment — 1.2%
Motorola, Inc.	193,300		4,136,620
Computer Hardware — 2.0%
Dell, Inc. (2)	55,800		1,618,200
Hewlett Packard Co.	48,300		1,584,723
International Business Machines Corp.	46,000		3,691,040
			6,893,963
Computer Storage & Peripherals — 0.4%
SanDisk Corp. (2)	24,200		1,460,228
Semiconductors — 1.3%
Advanced Micro Devices, Inc. (2)	21,100		815,937
Broadcom Corp. (2)	20,250		913,072
Intel Corp.	80,800		1,664,480
NVIDIA Corp. (1)(2)	19,000		895,470
			4,288,959
Services-Data Processing — 0.2%
Sabre Holdings Corp.	21,700		523,621
Systems Software — 0.5%
Microsoft Corp.	62,800		1,689,320
Total Information Technology			18,992,711
Materials — 4.3%
Chemicals-Commodity — 0.9%
Lyondell Chemical Co.	145,400		3,041,768
Chemicals-Diversified — 1.5%
Dow Chemical Co., The	95,800		4,122,274
Eastman Chemical Co.	17,000		838,610
			4,960,884
Diversified Metal/Mining — 1.3%
Freeport-McMoRan Copper & Gold, Inc.	29,000		1,468,270

Description	Shares or Principal Amount		Value
Common Stocks (continued)
Materials (continued)
Diversified Metal/Mining (continued)
Phelps Dodge Corp.		22,000	$	3,036,000
				4,504,270
Metal & Glass Containers — 0.3%
Ball Corp.		26,500		1,128,900
Steel — 0.3%
Nucor Corp. (1)		9,700		834,685
Total Materials				14,470,507
Telecommunications — 4.4%
Integrated Telecommunication Services — 4.4%
BellSouth Corp.		88,800		2,804,304
Citizens Communications Co.		42,000		560,700
Verizon Communications		339,900		11,454,630
Total Telecommunications				14,819,634
Utilities — 7.2%
Electric Utilities — 3.0%
Entergy Corp.		36,300		2,632,113
FristEnergy Corp.		68,600		3,504,088
Progress Energy, Inc. (1)		92,000		4,082,960
				10,219,161
Independent Power Producers — 1.7%
Constellation Energy Group		70,200		4,123,548
TXU Corp.		32,900		1,723,631
				5,847,179
Multi-Utilities — 2.5%
Energy East Corp.		50,700		1,270,542
KeySpan Corp.		91,950		3,746,963
TECO Energy, Inc. (1)		198,400		3,384,704
				8,402,209
Total Utilities				24,468,549
Total Common Stocks (identified cost $297,993,751)				332,714,512
Short-Term Investments — 5.8%
Collateral Pool Investment for Securities on Loan — 4.6% (See Note 2 of the Financial Statements)				15,517,946
Repurchase Agreement — 1.2%
Agreement with Morgan Stanley & Co., Inc., 4.56%, dated 2/28/2006 to be repurchased at $4,127,034 on 3/1/2006, collateralized by a U.S. Government Agency Obligation with a maturity of 6/16/2006, with a market value of $4,229,511 (at amortized cost)	$	4,126,512		4,126,512
Total Short-Term Investments (identified cost $19,644,458)				19,644,458
Total Investments — 104.2% (identified cost $317,638,209)				352,358,970
Other Assets and Liabilities — (4.2)%				(14,056,614	)
Total Net Assets — 100.0%			$	338,302,356

(See Notes which are an integral part of the Financial Statements)

4

February 28, 2006 (Unaudited)

Schedule of Investments

Large-Cap Value Fund (continued)

Portfolio Sector Allocations*
Sector	Fund
Consumer Discretionary	5.0%
Consumer Staples	3.9%
Energy	14.3%
Financials	38.6%
Healthcare	8.6%
Industrials	6.5%
Information Technology	5.6%
Materials	4.3%
Telecommunications	4.4%
Utilities	7.2%
Other Assets & Liabilities	1.6%
Total	100.0%

Large-Cap Growth Fund

Description	Shares	Value
Common Stocks — 96.6%
Consumer Discretionary — 11.1%
Apparel Retail — 2.7%
Abercrombie & Fitch Co.	13,600	$	915,552
American Eagle Outfitters (1)	63,200		1,607,808
Coach, Inc. (2)	78,900		2,818,308
The TJX Companies, Inc.	53,100		1,300,419
			6,642,087
Automotive Retail — 0.3%
AutoZone, Inc. (2)	7,100		686,428
Computer & Electronics — 1.2%
Best Buy, Inc.	55,400		2,983,844
Department Stores — 1.3%
J.C. Penney Co., Inc.	52,300		3,066,872
General Merchandise — 0.4%
Dollar General Corp.	53,600		933,712
Home Improvement Retail — 2.3%
Home Depot, Inc.	131,400		5,538,510
Homebuilding — 0.5%
D.R. Horton, Inc. (1)	32,300		1,101,753
Motorcycle Manufacturers — 0.4%
Harley-Davidson, Inc.	20,600		1,081,706
Restaurants — 1.3%
Brinker International, Inc.	23,800		991,270
YUM! Brands, Inc.	47,400		2,260,980
			3,252,250
Specialty Stores — 0.3%
Staples, Inc.	28,700		704,298
Tires & Rubber — 0.4%
Goodyear Tire & Rubber Co. (1)(2)	67,000		960,110
Total Consumer Discretionary			26,951,570

Description	Shares	Value
Common Stocks (continued)
Consumer Staples — 8.7%
Agricultural Products — 0.3%
Archer-Daniels-Midland Co.	26,700	$	846,924
Household Products — 3.6%
Colgate-Palmolive Co.	35,500		1,934,040
Kimberly-Clark Corp.	11,000		650,980
Procter & Gamble Co.	103,300		6,190,769
			8,775,789
Hypermarkets & Supercenters — 0.7%
Wal-Mart, Inc.	34,800		1,578,528
Packaged Foods — 1.3%
General Mills, Inc.	62,000		3,053,500
Soft Drinks — 1.5%
PepsiCo, Inc.	61,300		3,623,443
Tobacco — 1.3%
Altria Group, Inc.	44,800		3,221,120
Total Consumer Staples			21,099,304
Energy — 4.9%
Oil & Gas-Exploration and Production — 2.2%
Apache Corp.	16,900		1,130,948
Burlington Resources, Inc.	13,600		1,226,448
EOG Resources, Inc.	42,900		2,891,460
			5,248,856
Oil & Gas-Integrated — 2.2%
Amerada Hess Corp. (1)	8,800		1,217,128
ConocoPhillips	8,900		542,544
Exxon Mobil Corp.	19,900		1,181,463
Marathon Oil Corp.	17,625		1,244,325
Occidental Petroleum Corp.	13,900		1,272,406
			5,457,866
Oil & Gas-Refining and Marketing — 0.5%
Valero Energy Corp.	22,000		1,183,380
Total Energy			11,890,102
Financials — 9.0%
Asset Management & Custody Banking — 0.4%
Bank of New York Co., Inc.	26,600		910,784
Diversified Banks — 0.3%
Bank of America Corp.	13,920		638,232
Diversified Financial Services — 0.8%
Citigroup, Inc.	25,700		1,191,709
JPMorgan Chase & Co.	18,700		769,318
			1,961,027
Insurance-Property & Casualty — 0.7%
Fidelity National Financial, Inc.	31,700		1,196,992
St. Paul Travelers Co., Inc.	14,500		623,210
			1,820,202
Investment Banking & Brokerage — 3.2%
Goldman Sachs Group, Inc.	20,500		2,896,445
Lehman Brothers Holdings, Inc.	5,500		802,725
Merrill Lynch & Co., Inc.	39,090		3,018,139
Morgan Stanley	19,700		1,175,302
			7,892,611

(See Notes which are an integral part of the Financial Statements)

5

Marshall Funds

Large-Cap Growth Fund (continued)

Description	Shares	Value
Common Stocks (continued)
Financials (continued)
Multi-Line Insurance — 0.3%
Hartford Financial Services Group, Inc.	8,400	$	691,992
Regional Banks — 1.2%
Synovus Financial Corp.	107,100		3,036,285
Specialized Finance — 1.3%
Moody’s Corp.	45,800		3,068,600
Thrifts & Mortgage Finance — 0.8%
Federal Home Loan Mortgage Corp.	11,400		768,246
MGIC Investment Corp.	17,800		1,134,750
			1,902,996
Total Financials			21,922,729
Healthcare — 20.3%
Biotechnology — 5.8%
Amgen, Inc. (1)(2)	62,900		4,748,321
Applera Corp.	41,600		1,176,032
Genzyme Corp. (2)	28,800		1,996,992
Gilead Sciences, Inc. (2)	97,300		6,058,871
			13,980,216
Healthcare-Distributors — 1.6%
AmerisourceBergen Corp.	15,400		708,246
Cardinal Health, Inc.	41,400		3,005,640
McKesson Corp.	3,800		205,694
			3,919,580
Healthcare-Equipment — 2.5%
Boston Scientific Co. (2)	26,600		649,572
Medtronic, Inc.	101,000		5,448,950
			6,098,522
Healthcare-Facilities — 1.2%
HCA, Inc. (1)	61,700		2,955,430
Healthcare-Managed — 4.4%
Aetna, Inc.	58,120		2,964,120
Coventry Health Care, Inc. (2)	21,250		1,266,925
UnitedHealth Group, Inc.	11,590		674,886
WellPoint, Inc. (2)	75,600		5,805,324
			10,711,255
Healthcare Services — 1.0%
Caremark Rx, Inc. (2)	23,400		1,164,150
Express Scripts, Inc. (2)	13,900		1,213,053
			2,377,203
Pharmaceuticals — 3.8%
Abbott Laboratories	16,500		728,970
Eli Lilly & Co.	28,700		1,596,294
Johnson & Johnson	58,800		3,389,820
King Pharmaceuticals, Inc. (2)	61,000		991,250
Sepracor, Inc. (2)	14,200		813,802
Wyeth	36,900		1,837,620
			9,357,756
Total Healthcare			49,399,962

Description	Shares	Value
Common Stocks (continued)
Industrials — 12.0%
Aerospace & Defense — 4.9%
Boeing Co.	82,200	$	5,975,118
General Dynamics Corp.	10,000		1,232,700
Lockheed Martin Corp.	57,300		4,175,451
United Technologies Corp.	12,200		713,700
			12,096,969
Construction & Engineering — 0.8%
Fluor Corp.	22,300		1,924,490
Construction & Farm Machinery — 1.7%
Caterpillar, Inc.	56,500		4,129,020
Electrical Components & Equipment — 1.2%
Emerson Electric Co.	35,400		2,896,074
Industrial Conglomerates — 1.0%
3M Co.	32,700		2,406,393
Machinery-Industrial — 2.4%
Illinois Tool Works, Inc.	33,700		2,892,808
Parker-Hannifin Corp.	37,700		2,947,009
			5,839,817
Total Industrials			29,292,763
Information Technology — 28.7%
Application Software — 1.4%
AutoDesk, Inc. (2)	62,600		2,356,890
Intuit, Inc. (2)	22,100		1,073,618
			3,430,508
Communications Equipment — 4.7%
Cisco Systems, Inc. (2)	398,800		8,071,712
Harris Corp.	27,300		1,247,064
Juniper Networks, Inc. (2)	52,800		970,992
Motorola, Inc.	51,300		1,097,820
			11,387,588
Computer Hardware — 5.3%
Apple Computer, Inc. (2)	75,100		5,147,354
Dell, Inc. (2)	153,600		4,454,400
Hewlett Packard Co.	37,600		1,233,656
International Business Machines Corp.	26,500		2,126,360
			12,961,770
Computer Storage — 2.7%
EMC Corp. (1)(2)	214,500		3,007,290
SanDisk Corp. (2)	41,600		2,510,144
Seagate Technology ADR (1)	26,000		690,820
Western Digital Corp. (2)	19,700		438,325
			6,646,579
Data Processing — 1.0%
Fiserv, Inc. (2)	58,900		2,444,350
Semiconductors — 6.6%
Advanced Micro Devices, Inc. (2)	45,300		1,751,751
Broadcom Corp. (2)	36,950		1,666,075
Freescale Semiconductor, Inc. (2)	47,100		1,273,584
Intel Corp.	338,900		6,981,340
Texas Instruments, Inc. (1)	147,800		4,411,830
			16,084,580
Semiconductor Equipment — 0.3%
Applied Materials, Inc.	35,500		651,070

(See Notes which are an integral part of the Financial Statements)

6

February 28, 2006 (Unaudited)

Schedule of Investments

Large-Cap Growth Fund (continued)

Description	Shares or Principal Amount		Value
Common Stocks (continued)
Information Technology (continued)
Systems Software — 6.7%
Microsoft Corp.		278,100	$	7,480,890
Novell, Inc. (2)		128,500		1,222,035
Oracle Corp. (2)		390,306		4,847,526
Symantec Corp. (2)		153,400		2,590,926
				16,141,377
Total Information Technology				69,747,822
Materials — 1.9%
Diversified Metals & Mining — 1.4%
Freeport-McMoRan Copper & Gold, Inc.		43,500		2,202,405
Phelps Dodge Corp.		8,100		1,117,800
				3,320,205
Steel — 0.5%
Nucor Corp.		14,700		1,264,935
Total Materials				4,585,140
Total Common Stocks (identified cost $221,821,000)				234,889,392
Short-Term Investments — 5.6%
Collateral Pool Investment for Securities on Loan — 5.2% (See Note 2 of the Financial Statements)				12,709,940
Repurchase Agreement — 0.4%
Agreement with Morgan Stanley & Co., Inc., 4.56% dated 2/28/2006, to be repurchased at $980,299 on 3/1/2006, collateralized by a U.S. Government Agency Obligation with a maturity of 3/1/2008 (at amortized cost)	$	980,175		980,175
Total Short-Term Investments (identified cost $13,690,115)				13,690,115
Total Investments — 102.2% (identified cost $235,511,115)				248,579,507
Other Assets and Liabilities — (2.2)%				(5,346,296	)
Total Net Assets — 100.0%			$	243,233,211

Portfolio Sector Allocations*
Sector	Fund
Consumer Discretionary	11.1%
Consumer Staples	8.7%
Energy	4.9%
Financials	9.0%
Healthcare	20.3%
Industrials	12.0%
Information Technology	28.7%
Materials	1.9%
Other Assets & Liabilities	3.4%
Total	100.0%

Mid-Cap Value Fund

Description	Shares	Value
Common Stocks — 95.0%
Consumer Discretionary — 15.3%
Advertising — 1.5%
The Interpublic Group of Cos., Inc. (1)(2)	1,018,400	$	10,550,624
Apparel/Retail — 0.9%
Ross Stores, Inc.	205,900		5,831,088
Auto Parts & Equipment — 1.5%
Johnson Controls, Inc.	145,000		10,334,150
Broadcasting & Cable TV — 1.7%
Clear Channel Communications, Inc.	415,000		11,744,500
Home Furnishings — 2.2%
Furniture Brands International, Inc. (1)	610,000		15,079,200
Home Improvement-Retail — 1.7%
The Sherwin-Williams Co.	262,000		11,934,100
Household Appliances — 1.8%
Snap-On Tools Corp.	321,000		12,493,320
Leisure Products — 1.4%
Brunswick Corp.	252,000		9,885,960
Publishing — 1.2%
Tribune Co.	268,000		8,200,800
Specialty Stores — 1.4%
Pier 1 Imports, Inc. (1)	910,000		9,582,300
Total Consumer Discretionary			105,636,042
Consumer Staples — 7.0%
Brewery — 1.8%
Molson Coors Brewing Co. (1)	194,400		12,198,600
Packaged Foods/Meats — 1.8%
Del Monte Foods Co.	1,185,000		12,892,800
Retail-Food — 1.8%
Kroger Co. (1)(2)	615,000		12,324,600
Soft Drinks — 1.6%
Coca-Cola Enterprises, Inc.	558,000		10,964,700
Total Consumer Staples			48,380,700
Energy — 4.6%
Oil & Gas-Drilling — 2.5%
Noble Corp.	126,000		9,312,660
Patterson-UTI Energy, Inc.	284,000		7,824,200
			17,136,860
Oil & Gas-Exploration and Production — 2.1%
Noble Energy, Inc.	232,000		9,753,280
Pioneer Natural Resources Co.	105,700		4,448,913
			14,202,193
Total Energy			31,339,053
Financials — 15.7%
Asset Management — 1.5%
State Street Corp. (1)	170,000		10,621,600

(See Notes which are an integral part of the Financial Statements)

7

Marshall Funds

Mid-Cap Value Fund (continued)

Description	Shares	Value
Common Stocks (continued)
Financials (continued)
Insurance-Life/Health — 1.8%
Protective Life Corp.	247,500	$	12,065,625
Insurance-Property/Casualty — 6.5%
ACE Ltd. (1)	208,000		11,591,840
Ambac Financial Group, Inc.	155,000		11,648,250
SAFECO Corp.	171,000		8,808,210
XL Capital Ltd.	187,000		12,631,850
			44,680,150
Investment Banking & Brokerage — 1.6%
Bear Stearns Companies, Inc.	80,000		10,755,200
Reinsurance — 2.0%
PartnerRe Ltd.	219,500		13,303,895
Specialized Finance — 1.0%
CIT Group, Inc.	130,000		6,990,100
Thrifts & Mortgage Finance — 1.3%
MGIC Investment Corp.	143,000		9,116,250
Total Financials			107,532,820
Healthcare — 9.6%
Healthcare-Distributors — 2.0%
AmerisourceBergen Corp.	306,000		14,072,940
Healthcare-Equipment — 1.7%
Fisher Scientific International, Inc. (1)(2)	172,000		11,723,520
Healthcare-Facilities — 1.7%
Community Health Systems, Inc. (1)(2)	304,000		11,527,680
Healthcare-Services — 2.9%
Apria Healthcare Group, Inc. (2)	387,400		8,906,326
Omnicare, Inc. (1)	177,000		10,770,450
			19,676,776
Pharmaceuticals — 1.3%
Biovail Corp. (2)	349,000		8,784,330
Total Healthcare			65,785,246
Industrials — 18.5%
Aerospace & Defense — 1.8%
Northrop Grumman Corp.	190,000		12,179,000
Business Services — 1.9%
Aramark Corp.	468,000		13,319,280
Commercial Printing — 1.6%
Donnelley (R.R.) & Sons Co.	316,850		10,665,171
Machinery-Construction & Farm — 1.0%
Cummins, Inc. (1)	60,500		6,550,940
Machinery-Industrial — 2.7%
ITT Industries, Inc.	128,000		6,720,000
Parker-Hannifin Corp.	150,000		11,725,500
			18,445,500
Railroads — 1.1%
CSX Corp.	136,100		7,537,218
Services-Employment — 3.6%
Manpower, Inc. (1)	230,000		12,337,200

Description	Shares	Value
Common Stocks (continued)
Industrials (continued)
Services-Employment (continued)
Watson Wyatt & Co. Holdings (1)	410,000	$	12,529,600
			24,866,800
Services-Environmental — 1.6%
Republic Services, Inc.	275,000		10,689,250
Trade Companies & Distribution — 1.5%
Grainger (W.W.), Inc.	145,000		10,735,800
Trucking — 1.7%
J.B. Hunt Transport Services, Inc.	500,000		11,830,000
Total Industrials			126,818,959
Information Technology — 11.5%
Application Software — 3.0%
Cadence Design Systems, Inc. (2)	500,000		8,875,000
Synopsys, Inc. (1)(2)	526,000		11,503,620
			20,378,620
Computer Storage & Peripherals — 0.8%
Electronics for Imaging, Inc. (2)	211,300		5,667,066
Consulting & Services — 1.0%
ProQuest Co. (1)(2)	330,600		7,041,780
Office Electronics — 1.8%
Xerox Corp. (1)(2)	840,000		12,516,000
Semiconductors — 2.0%
Freescale Semiconductor, Inc. (2)	262,000		7,084,480
Novellus Systems, Inc. (2)	253,500		6,776,055
			13,860,535
Services-Data Processing — 2.9%
Computer Sciences Corp. (2)	105,000		5,705,700
Convergys Corp. (2)	430,000		7,469,100
Sabre Holdings Corp.	275,100		6,638,163
			19,812,963
Total Information Technology			79,276,964
Materials — 4.7%
Paper Packaging — 3.1%
Packaging Corp. of America	538,000		12,271,780
Sealed Air Corp.	154,000		8,759,520
			21,031,300
Steel — 1.6%
Nucor Corp. (1)	127,000		10,928,350
Total Materials			31,959,650
Telecommunications — 3.5%
Integrated Telecommunication Services — 3.5%
Alltel Corp. (1)	210,000		13,261,500
Citizens Communications Co., Class B	782,800		10,450,380
Total Telecommunications			23,711,880

(See Notes which are an integral part of the Financial Statements)

8

February 28, 2006 (Unaudited)

Schedule of Investments

Mid-Cap Value Fund (continued)

Description	Shares or Principal Amount		Value
Common Stocks (continued)
Utilities — 4.6%
Electric Utilities — 3.0%
PPL Corp.		380,000	$	12,084,000
Xcel Energy, Inc. (1)		455,000		8,444,800
				20,528,800
Multi-Utilities — 1.6%
Constellation Energy Group		188,000		11,043,120
Total Utilities				31,571,920
Total Common Stocks (identified cost $546,331,409)				652,013,234
Short-Term Investments — 18.3%
Collateral Pool Investment for Securities on Loan — 12.7% (See Note 2 of the Financial Statements)				87,402,523
Repurchase Agreement — 5.6%
Agreement with Morgan Stanley & Co., Inc., 4.56%, dated 2/28/2006, to be repurchased at $38,869,667 on 3/1/2006, collateralized by a U.S. Government Agency Obligation with a maturity of 6/16/2008, with a market value of $39,820,501 (at amortized cost)	$	38,864,744		38,864,744
Total Short-Term Investments (identified cost $126,267,267)				126,267,267
Total Investments — 113.3% (identified cost $672,598,676)				778,280,501
Other Assets and Liabilities — (13.3)%				(91,657,315	)
Total Net Assets — 100.0%			$	686,623,186

Portfolio Sector Allocations*
Sector	Fund
Consumer Discretionary	15.3%
Consumer Staples	7.0%
Energy	4.6%
Financials	15.7%
Healthcare	9.6%
Industrials	18.5%
Information Technology	11.5%
Materials	4.7%
Telecommunications	3.5%
Utilities	4.6%
Other Assets & Liabilities	5.0%
Total	100.0%

Mid-Cap Growth Fund

Description	Shares	Value
Common Stocks — 95.4%
Consumer Discretionary — 16.1%
Apparel & Accessories — 1.0%
Coach, Inc. (2)	51,000	$	1,821,720
Casinos & Gaming — 1.9%
MGM MIRAGE (1)(2)	29,000		1,072,130
Scientific Games Corp., Class A (2)	80,000		2,446,400
			3,518,530
Consumer Electronics — 1.0%
Garmin Ltd. (1)	13,000		894,660
Harman International Industries, Inc.	10,000		1,103,500
			1,998,160
Department Stores — 2.2%
J.C. Penney Co., Inc. (1)	41,000		2,404,240
Nordstrom, Inc.	45,000		1,710,000
			4,114,240
Diversified Consumer Services — 0.8%
Laureate Education, Inc. (2)	30,000		1,553,400
Hotels — 0.6%
Starwood Hotels & Resorts Worldwide, Inc.	19,000		1,206,500
Leisure Facilities — 1.0%
LIFE TIME FITNESS, Inc. (2)	44,000		1,846,240
Leisure Products — 0.8%
SCP Pool Corp.	34,000		1,477,980
Restaurants — 0.6%
Panera Bread Co., Class A (1)(2)	15,000		1,062,900
Retail-Apparel — 2.0%
Abercrombie & Fitch Co., Class A	20,000		1,346,400
AnnTaylor Stores Corp. (2)	37,000		1,343,100
Chico’s FAS, Inc. (2)	25,000		1,176,250
			3,865,750
Retail-Automotive — 1.6%
Advance Auto Parts, Inc.	38,000		1,571,300
O’Reilly Automotive, Inc. (2)	45,000		1,472,400
			3,043,700
Retail-Computer & Electronics — 0.5%
GameStop Corp. (1)(2)	25,000		1,000,750
Retail-Internet — 1.0%
IAC/Interactive Corp. (1)(2)	62,500		1,827,500
Specialty Stores — 1.1%
Coldwater Creek, Inc. (1)(2)	89,000		1,999,830
Total Consumer Discretionary			30,337,200
Consumer Staples — 1.0%
Retail-Drug — 1.0%
CVS Corp.	65,000		1,841,450
Total Consumer Staples			1,841,450

(See Notes which are an integral part of the Financial Statements)

9

Marshall Funds

Mid-Cap Growth Fund (continued)

Description	Shares	Value
Common Stocks (continued)
Energy — 9.8%
Coal & Consumable Fuels — 0.7%
Cameco Corp. (1)	38,000	$	1,410,560
Oil & Gas-Drilling — 1.7%
ENSCO International, Inc.	27,500		1,228,975
Nabors Industries Ltd. (2)	12,000		791,400
Patterson-UTI Energy, Inc.	46,000		1,267,300
			3,287,675
Oil & Gas-Equipment and Services — 2.0%
BJ Services Co.	50,000		1,565,500
Grant Prideco, Inc. (2)	24,000		971,280
National-Oilwell Varco, Inc. (2)	20,000		1,217,600
			3,754,380
Oil & Gas-Exploration and Production — 5.4%
Chesapeake Energy Corp.	84,000		2,493,960
Denbury Resources, Inc. (2)	87,000		2,466,450
Encore Acquisition Co. (2)	34,000		1,041,760
Plains Exploration & Production Co. (2)	37,000		1,507,750
Quicksilver Resource, Inc. (2)	21,000		762,720
XTO Energy, Inc.	44,000		1,843,160
			10,115,800
Total Energy			18,568,415
Financials — 8.7%
Asset Management — 3.7%
Affiliated Managers Group, Inc. (1)(2)	31,000		3,051,330
Franklin Resources, Inc.	14,000		1,437,520
Nuveen Investments, Class A	53,000		2,553,010
			7,041,860
Commercial Banks — 0.9%
SVB Financial Group (1)(2)	35,000		1,784,650
Diversified Financial Services — 0.7%
Chicago Mercantile Exchange Holdings, Inc.	3,000		1,276,800
Insurance Brokers — 1.0%
National Financial Partners Corp.	31,000		1,824,350
Multi-Line Insurance — 1.6%
Assured Guaranty, Ltd.	70,000		1,848,000
Conseco, Inc. (2)	45,000		1,117,800
			2,965,800
Real Estate Services — 0.8%
CB Richard Ellis Group, Inc., Class A (2)	22,000		1,510,960
Total Financials			16,404,420
Healthcare — 16.2%
Biotechnology — 3.6%
Celgene Corp. (1)(2)	46,000		1,748,000
Cephalon, Inc. (1)(2)	19,000		1,510,120
Cubist Pharmaceuticals, Inc. (2)	51,000		1,127,610
Genzyme Corp. (2)	17,000		1,178,780
PDL BioPharma, Inc. (1)(2)	38,000		1,189,780
			6,754,290

Description	Shares	Value
Common Stocks (continued)
Healthcare (continued)
Healthcare-Equipment — 2.4%
Cytyc Corp. (2)	74,000	$	2,133,420
Hologic, Inc. (1)(2)	23,000		1,100,090
Resmed, Inc. (1)(2)	33,000		1,339,470
			4,572,980
Healthcare-Facilities — 1.7%
Psychiatric Solutions, Inc. (2)	58,000		1,915,740
Sunrise Senior Living, Inc. (1)(2)	39,000		1,382,940
			3,298,680
Healthcare-Managed Care — 2.1%
Humana, Inc. (2)	35,000		1,808,450
WellPoint, Inc. (2)	28,000		2,150,120
			3,958,570
Healthcare-Services — 5.5%
Caremark Rx, Inc. (2)	37,000		1,840,750
Covance, Inc. (2)	33,000		1,862,850
DaVita, Inc. (2)	36,000		2,102,040
Express Scripts, Inc. (2)	7,000		610,890
IMS Health, Inc.	66,000		1,590,600
Medco Health Solutions, Inc. (2)	16,000		891,520
Omnicare, Inc. (1)	24,000		1,460,400
			10,359,050
Healthcare-Supplies — 0.9%
Haemonetics Corp. (1)(2)	31,000		1,605,800
Total Healthcare			30,549,370
Industrials — 13.3%
Aerospace & Defense — 1.8%
Precision Castparts Corp.	34,000		1,803,360
Rockwell Collins, Inc.	30,000		1,594,500
			3,397,860
Air Freight & Couriers — 0.8%
C.H. Robinson Worldwide, Inc.	33,000		1,479,060
Building Products — 0.5%
Lennox International, Inc.	31,000		996,650
Commercial Services & Supplies — 1.2%
Dun & Bradstreet Corp. (2)	16,000		1,163,840
Herman Miller, Inc.	39,000		1,177,410
			2,341,250
Construction & Engineering — 1.7%
Fluor Corp.	17,000		1,467,100
Jacobs Engineering Group, Inc. (2)	20,000		1,714,800
			3,181,900
Construction & Farm Machinery — 1.8%
JLG Industries, Inc.	17,000		1,002,830
Joy Global, Inc.	27,000		1,392,120
Terex Corp. (2)	12,000		949,800
			3,344,750
Electrical Equipment — 2.1%
Rockwell Automation, Inc.	37,000		2,522,290
Roper Industries, Inc.	33,000		1,487,310
			4,009,600

(See Notes which are an integral part of the Financial Statements)

10

February 28, 2006 (Unaudited)

Schedule of Investments

Mid-Cap Growth Fund (continued)

Description	Shares	Value
Common Stocks (continued)
Industrials (continued)
Industrial Conglomerates — 0.8%
Textron, Inc.	17,000	$	1,497,870
Industrial Machinery — 1.5%
Harsco Corp.	17,000		1,356,260
ITT Industries, Inc.	28,000		1,470,000
			2,826,260
Railroads — 1.1%
Norfolk Southern Corp.	23,000		1,177,140
Union Pacific Corp.	11,000		974,050
			2,151,190
Total Industrials			25,226,390
Information Technology — 25.8%
Application Software — 1.4%
Fair Isaac Corp.	30,000		1,278,600
Nuance Communications, Inc. (2)	135,000		1,444,500
			2,723,100
Communications Equipment — 2.9%
Comverse Technology, Inc. (1)(2)	73,000		2,099,480
Corning, Inc. (2)	57,000		1,391,370
Powerwave Technologies, Inc. (1)(2)	135,000		1,981,800
			5,472,650
Computer-Network Devices — 2.0%
Electronics for Imaging, Inc. (2)	77,000		2,065,140
Network Appliance, Inc. (1)(2)	50,000		1,658,000
			3,723,140
Consulting & Services — 1.9%
Akamai Technologies, Inc. (2)	77,000		2,040,500
Cognizant Technology Solutions Corp. (2)	27,000		1,555,470
			3,595,970
Data Processing — 3.2%
Alliance Data Systems Corp. (1)(2)	33,000		1,427,580
Ceridian Corp. (2)	57,000		1,474,020
Electronic Data Systems Corp.	52,000		1,388,400
Paychex, Inc.	43,000		1,722,150
			6,012,150
Electronic Components — 0.6%
Amphenol Corp., Class A	25,000		1,255,750
Electronic Manufacturing Services — 1.2%
Jabil Circuit, Inc. (2)	59,000		2,233,150
Equipment Manufacturing — 2.0%
Agilent Technologies, Inc. (2)	70,000		2,520,000
Symbol Technologies, Inc.	110,000		1,278,200
			3,798,200
Financial Software — 1.4%
Transaction Systems Architects, Inc. (2)	78,000		2,602,080

Description	Shares	Value
Common Stocks (continued)
Information Technology (continued)
Internet Software & Services — 0.7%
Webex Communications, Inc. (2)	50,000	$	1,394,000
Office Electronics — 0.5%
Zebra Technologies Corp. (2)	20,000		882,800
Semiconductors — 8.0%
Broadcom Corp., Class A (2)	46,500		2,096,685
Freescale Semiconductor, Inc. (2)	33,000		887,370
Intersil Corp. (1)	65,000		1,842,100
Lam Research Corp. (2)	35,000		1,508,500
MEMC Electronic Materials, Inc. (2)	35,000		1,172,150
Microchip Technology, Inc.	34,000		1,196,800
Micron Technology, Inc. (2)	90,000		1,395,900
Microsemi Corp. (2)	62,000		1,906,500
National Semiconductor Corp. (1)	48,000		1,346,400
SiRF Technology Holdings, Inc. (2)	45,000		1,684,350
			15,036,755
Total Information Technology			48,729,745
Materials — 2.3%
Fertilizers & Agricultural Chemicals — 0.8%
Monsanto Co.	17,500		1,467,900
Gold — 1.5%
Anglogold Ashanti Ltd., ADR (1)	18,000		916,560
Bema Gold Corp. (1)(2)	225,000		929,250
Meridian Gold, Inc. (2)	40,000		1,013,600
			2,859,410
Total Materials			4,327,310
Telecommunications — 2.2%
Wireless Telecommunication Services — 2.2%
American Tower Corp. (1)(2)	67,000		2,132,610
NII Holdings, Inc. (2)	40,000		2,048,800
Total Telecommunications			4,181,410
Utilities — 0.0%
Pipelines — 0.0%
Kinder Morgan Management LLC (2)	1		16
Total Utilities			16
Total Common Stocks (identified cost $148,789,403)			180,165,726
Master Limited Partnership — 0.8%
Kayne Anderson MLP Investment Company (1) (identified cost $1,430,446)	55,000		1,398,650
Short-Term Investments — 17.6%
Collateral Pool Investment for Securities on Loan — 15.6% (See Note 2 of the Financial Statements)			29,432,865

(See Notes which are an integral part of the Financial Statements)

11

Marshall Funds

Mid-Cap Growth Fund (continued)

Description	Principal Amount		Value
Short-Term Investments (continued)
Repurchase Agreement — 2.0%
Agreement with Morgan Stanley & Co., Inc., 4.56%, dated 2/28/2006 to be repurchased at $3,866,876 on 3/1/2006, collateralized by U.S. Government Agency Obligations with maturity on 6/16/2006, with a market value of $3,963,318 (at amortized cost)	$	3,866,386	$	3,866,386
Total Short-Term Investments (identified cost $33,299,251)				33,299,251
Total Investments — 113.8% (identified cost $183,519,100)				214,863,627
Other Assets and Liabilities — (13.8)%				(26,073,144	)
Total Net Assets — 100.0%			$	188,790,483

Portfolio Sector Allocations*

Sector	Fund
Consumer Discretionary	16.1%
Consumer Staples	1.0%
Energy	9.8%
Financials	8.7%
Healthcare	16.2%
Industrials	13.3%
Information Technology	25.8%
Master Limited Partnership	0.8%
Materials	2.3%
Telecommunications	2.2%
Other Assets & Liabilities	3.8%
Total	100.0%

Small-Cap Growth Fund

Description	Shares	Value
Common Stocks — 92.8%
Consumer Discretionary — 16.3%
Advertising — 2.3%
24/7 Real Media, Inc. (1)(2)	120,000	$	1,059,600
Harris Interactive, Inc. (2)	220,000		1,236,400
Marchex, Inc. (1)(2)	90,000		1,974,600
			4,270,600
Auto Parts & Equipment — 1.2%
Keystone Automotive Industries, Inc. (2)	50,000		2,210,000
Automotive Retail — 0.8%
Monro Muffler Brake, Inc.	40,000		1,447,200

Description	Shares	Value
Common Stocks (continued)
Consumer Discretionary (continued)
Casinos & Gaming — 0.8%
Scientific Games Corp. (2)	48,000	$	1,467,840
Commercial Services-Printing — 1.8%
American Reprographics Co. (2)	70,000		2,009,000
VistaPrint Ltd. (2)	40,000		1,446,400
			3,455,400
Diversified Consumer Services — 1.0%
Bright Horizons Family Solutions, Inc. (2)	55,000		1,843,050
Home Improvement-Remodeling — 0.9%
Home Solutions of America, Inc. (1)(2)	300,000		1,755,000
Homebuilding — 1.3%
Desarrolladora Homex, ADR (1)(2)	70,000		2,405,900
Housewares — 0.7%
Lifetime Brands, Inc.	60,000		1,354,800
Leisure Facilities — 1.2%
LIFE TIME FITNESS, Inc. (2)	57,000		2,391,720
Leisure Products — 1.3%
SCP Pool Corp.	55,000		2,390,850
Movies & Entertainment — 0.7%
Imax Corp. (1)(2)	155,000		1,410,500
Restaurants — 1.2%
BJ’s Restaurants, Inc. (2)	38,000		964,820
Texas Roadhouse, Inc. (2)	85,000		1,305,600
			2,270,420
Retail-Apparel — 1.1%
Coldwater Creek, Inc. (1)(2)	90,000		2,022,300
Total Consumer Discretionary			30,695,580
Consumer Staples — 1.5%
Drug Retail — 0.5%
Allion Healthcare, Inc. (2)	50,000		827,500
Food & Beverage — 1.0%
Central European Distribution Corp. (1)(2)	45,000		1,885,950
Total Consumer Staples			2,713,450
Energy — 7.9%
Oil & Gas-Drilling — 0.6%
Bronco Drilling Company, Inc. (2)	50,000		1,210,500
Oil & Gas-Exploration and Production — 7.3%
BPZ Energy, Inc. (2)	541,097		1,758,565
Contango Oil & Gas Co. (1)(2)	220,000		2,527,800
Denbury Resources, Inc. (2)	54,000		1,530,900
Encore Acquisition Co. (2)	25,000		766,000
Energy Partners, Ltd. (1)(2)	70,000		1,609,300
Gasco Energy, Inc. (1)(2)	480,000		2,740,800
The Exploration Co. of Delaware (2)	276,900		2,738,541
			13,671,906
Total Energy			14,882,406

(See Notes which are an integral part of the Financial Statements)

12

February 28, 2006 (Unaudited)

Schedule of Investments

Small-Cap Growth Fund (continued)

Description	Shares	Value
Common Stocks (continued)
Financials — 9.5%
Asset Management — 3.3%
Affiliated Managers Group, Inc. (1)(2)	35,000	$	3,445,050
Nuveen Investments	55,000		2,649,350
			6,094,400
Diversified Financial Services — 0.9%
National Financial Partners Corp.	30,000		1,765,500
Insurance — 1.7%
Amerisafe, Inc. (2)	104,000		1,008,800
Assured Guaranty Ltd.	85,000		2,244,000
			3,252,800
Insurance Brokers — 1.1%
U.S.I. Holdings Corp. (1)(2)	140,000		2,007,600
Investment Bank & Brokerage — 0.8%
optionsXpress Holdings, Inc. (1)	50,000		1,539,000
Real Estate Services — 1.7%
CB Richard Ellis Group, Inc. (2)	25,000		1,717,000
Trammell Crow Co. (2)	45,000		1,461,600
			3,178,600
Total Financials			17,837,900
Healthcare — 17.6%
Biotechnology — 3.0%
Illumina, Inc. (1)(2)	62,000		1,576,660
Nektar Therapeutics (1)(2)	66,000		1,380,060
PDL BioPharma, Inc. (1)(2)	45,000		1,408,950
Serologicals Corp. (2)	49,000		1,185,310
			5,550,980
Healthcare-Equipment & Supplies — 5.3%
American Medical Systems Holdings, Inc. (2)	64,000		1,386,880
Hologic, Inc. (2)	29,000		1,387,070
Integra Lifesciences Holdings (2)	29,000		1,155,360
IntraLase Corp. (1)(2)	60,000		1,111,800
Natus Medical, Inc. (2)	133,000		2,654,680
ResMed, Inc. (1)(2)	32,000		1,298,880
SonoSite, Inc. (1)(2)	25,000		1,009,000
			10,003,670
Healthcare-Facilities — 1.8%
Psychiatric Solutions, Inc. (1)(2)	60,000		1,981,800
Sunrise Senior Living, Inc. (1)(2)	38,000		1,347,480
			3,329,280
Healthcare-Managed Care — 1.0%
Wellcare Health Plans, Inc. (1)(2)	46,000		1,791,700
Healthcare-Products — 1.4%
Adeza Biomedical Corp. (2)	61,000		1,354,200
NuVasive, Inc. (2)	72,500		1,340,525
			2,694,725
Healthcare-Services — 2.1%
Gentiva Health Services, Inc. (2)	74,000		1,232,840
Health Grades, Inc. (2)	150,000		879,000

Description	Shares	Value
Common Stocks (continued)
Healthcare (continued)
Healthcare-Services (continued)
Matria Healthcare, Inc. (1)(2)	43,000	$	1,860,610
			3,972,450
Healthcare-Software — 0.9%
Emageon, Inc. (1)(2)	99,000		1,737,450
Pharmaceuticals — 2.1%
Cubist Pharmaceuticals, Inc. (2)	48,000		1,061,280
CV Therapeutics, Inc. (1)(2)	52,000		1,399,320
First Horizon Pharmaceutical Corp. (2)	69,000		1,415,880
			3,876,480
Total Healthcare			32,956,735
Industrials — 12.9%
Aerospace & Defense — 4.5%
AAR Corp. (1)(2)	107,000		2,708,170
Aviall, Inc. (2)	39,000		1,487,850
BE Aerospace, Inc. (2)	114,000		2,734,860
Moog, Inc.	43,000		1,443,080
			8,373,960
Construction & Farm Machinery — 0.8%
The Greenbrier Companies, Inc.	40,000		1,511,200
Diversified Commercial & Professional Services — 1.1%
CBIZ, Inc. (2)	275,000		1,996,500
Electrical Components — 1.0%
WESCO International, Inc. (2)	33,000		1,891,560
Electrical Equipment — 0.5%
Color Kinetics, Inc. (1)(2)	60,000		1,048,200
Machinery-Construction/Mining — 1.1%
Joy Global, Inc.	38,000		1,959,280
Rail & Trucking Equipment — 0.9%
Freightcar America, Inc.	25,000		1,762,500
Services-Employment — 1.6%
On Assignment, Inc. (2)	275,000		3,049,750
Transportation Services — 1.4%
Forward Air Corp.	32,000		1,135,360
Hub Group, Inc. (2)	36,000		1,501,200
			2,636,560
Total Industrials			24,229,510
Information Technology — 24.5%
Application Software — 3.8%
Aspen Technology, Inc. (2)	185,000		2,216,300
Kenexa Corp. (2)	100,000		2,672,000
Nuance Communications, Inc. (2)	220,000		2,354,000
			7,242,300
Communications Equipment — 2.9%
Ditech Communications Corp. (2)	175,000		1,804,250
MasTec, Inc. (2)	120,000		1,554,000
Powerwave Technologies, Inc. (2)	137,500		2,018,500
			5,376,750

(See Notes which are an integral part of the Financial Statements)

13

Marshall Funds

Small-Cap Growth Fund (continued)

Description	Shares	Value
Common Stocks (continued)
Information Technology (continued)
Computer Hardware — 1.1%
Rackable Systems, Inc. (2)	52,000	$	2,050,360
Computer Network Devices — 1.1%
Electronics for Imaging, Inc. (2)	75,000		2,011,500
Computer Storage & Peripherals — 0.6%
Komag, Inc. (1)(2)	25,000		1,171,000
Consulting & Other Services — 1.7%
Akamai Technologies, Inc. (1)(2)	90,000		2,385,000
Lionbridge Technologies, Inc. (2)	120,000		859,200
			3,244,200
Electronic Equipment Manufacturing — 0.5%
Symbol Technologies, Inc.	80,000		929,600
Financial Software — 3.1%
INVESTools, Inc. (2)	220,000		1,705,000
Online Resources Corp. (2)	110,000		1,397,000
Transaction Systems Architects, Inc. (2)	80,000		2,668,800
			5,770,800
Intellectual Property — 1.1%
Acacia Research Corp. (1)(2)	243,000		2,016,900
Internet Software & Services — 2.2%
HomeStore, Inc. (1)(2)	400,000		2,488,000
The Knot, Inc. (2)	107,000		1,625,330
			4,113,330
Security Software — 0.7%
Vasco Data Security International, Inc. (1)(2)	138,000		1,378,620
Semiconductors — 4.6%
Cirrus Logic, Inc. (2)	200,000		1,518,000
Kulicke and Soffa Industries, Inc. (2)	60,000		672,000
Microsemi Corp. (2)	60,000		1,845,000
Silicon Motion Technology Corp., ADR (2)	115,000		1,657,150
SiRF Technology Holdings, Inc. (2)	45,000		1,684,350
Trident Microsystems, Inc. (1)(2)	45,000		1,257,300
			8,633,800
Software & Services — 1.1%
Neoware, Inc. (1)(2)	86,500		2,121,845
Total Information Technology			46,061,005
Materials — 1.5%
Gold — 1.5%
Bema Gold Corp. (1)(2)	275,000		1,135,750
Kinross Gold Corp. (2)	87,000		800,400
Meridian Gold, Inc. (2)	35,000		886,900
			2,823,050
Total Materials			2,823,050

Description	Shares or Principal Amount		Value
Common Stocks (continued)
Utilities — 1.1%
Gas Utilities — 0.0%
Kinder Morgan Management LLC (2)		1	$	30
Water Utilities — 1.1%
PICO Holdings, Inc. (1)(2)		61,000		2,059,970
Total Utilities				2,060,000
Total Common Stocks (identified cost $131,101,681)				174,259,636
Master Limited Partnership — 1.4%
Kayne Anderson MLP Investment Co. (1) (identified cost $2,750,242)		105,978		2,695,021
Short-Term Investments — 32.6%
Collateral Pool Investment for Securities on Loan — 28.1% (See Note 2 of the Financial Statements)				52,851,090
Repurchase Agreement — 4.5%
Agreement with Morgan Stanley & Co., Inc., 4.56% dated 2/28/2006, to be repurchased at $8,480,453 on 3/1/2006, collateralized by a U.S. Government Agency Obligation with a maturity of 6/16/2006, with a market value of $8,690,709 (at amortized cost)	$	8,479,378		8,479,378
Total Short-Term Investments (identified cost $61,330,468)				61,330,468
Total Investments — 126.8% (identified cost $195,182,391)				238,285,125
Other Assets and Liabilities — (26.8)%				(50,436,056	)
Total Net Assets — 100.0%			$	187,849,069

Portfolio Sector Allocations*
Sector	Fund
Consumer Discretionary	16.3%
Consumer Staples	1.5%
Energy	7.9%
Financials	9.5%
Healthcare	17.6%
Industrials	12.9%
Information Technology	24.5%
Master Limited Partnership	1.4%
Materials	1.5%
Utilities	1.1%
Other Assets & Liabilities	5.8%
Total	100.0%

(See Notes which are an integral part of the Financial Statements)

14

February 28, 2006 (Unaudited)

Schedule of Investments

International Stock Fund

Description	Shares	Value
Common Stocks — 96.1%
Australia — 2.0%
Australian Stock Exchange Ltd.	2,838	$	68,040
Babcock & Brown Ltd.	13,699		174,815
Caltex Australian Ltd. (1)	58,837		749,424
Leighton Holdings Ltd.	10,816		145,962
News Corp. (1)	114,925		1,961,194
QBE Insurance Group Ltd. (1)	73,959		1,130,897
Rinker Group Ltd.	117,079		1,539,027
Santos Ltd.	188,165		1,584,041
Telstra Corp., Ltd. (1)	164,406		467,972
			7,821,372
Austria — 0.0%
OMV AG (2)	2,978		184,751
Belgium — 0.9%
Dexia	5,892		146,292
Inbev NV (2)	12,388		572,738
KBC GROEP NV	20,600		2,150,715
Option NV (2)	1,439		145,834
Umicore	3,177		451,544
			3,467,123
Brazil — 0.3%
Petroleo Brasileiro SA, ADR	14,800		1,295,592
Canada — 1.2%
EnCana Corp.	63,800		2,638,567
Goldcorp, Inc.	45,900		1,169,260
Husky Energy, Inc.	5,600		342,766
Imperial Oil Ltd.	5,000		482,203
Telus Corp.	8,100		315,034
			4,947,830
China — 0.5%
Aluminum Corp. of China Ltd.	304,000		311,873
China Petroleum & Chemical Corp.	200,000		119,392
PetroChina Co., Ltd.	1,698,000		1,654,381
			2,085,646
Denmark — 0.6%
A.P. Moller — Maersk A/S (2)	251		2,300,208
Finland — 2.2%
Fortum Oyj	118,000		2,852,012
Metso Corp.	8,700		320,770
Nokia Oyj (1)	138,450		2,574,523
Sampo Oyj, Class A (1)	144,900		2,902,700
			8,650,005
France — 7.2%
Air France — KLM	23,739		549,247
Alstom (2)	33,800		2,885,158
AXA SA (1)	50,541		1,787,276
BNP Paribas SA (1)	93,637		8,665,697
Credit Agricole SA (1)	17,885		653,176
Lafarge SA (2)	23,600		2,465,106
L’Oreal SA (1)(2)	31,438		2,780,144
Sanofi-Aventis (1)	25,150		2,137,682
Schneider Electric SA (1)	20,950		2,139,552
Societe Television Francaise (1)(2)	68,900		2,075,016
Total SA	1,210		303,943
Vallourec SA	1,407		1,100,936

Description	Shares	Value
Common Stocks (continued)
France (continued)
Vivendi Universal SA (2)	33,082	$	997,478
			28,540,411
Germany — 7.7%
Adidas-Salomon AG	1,808		353,394
Allianz AG (1)(2)	69,545		11,223,666
Bayerische Motoren Werke AG (1)(2)	62,143		2,987,422
Commerzbank AG	94,000		3,421,323
Continental AG (1)	12,262		1,254,564
Deutsche Lufthansa AG	27,535		454,504
Deutsche Telekom AG (1)(2)	124,150		1,959,024
Fresenius AG, Pfd	7,900		1,266,195
Fresenius Medical Care AG (1)	3,300		354,672
MAN AG	44,407		2,796,333
Metro AG (1)	51,400		2,732,572
Porsche AG, Pfd	905		761,971
Puma AG	609		218,982
Salzgitter AG	10,291		704,755
Solarworld AG	911		237,676
			30,727,053
Greece — 0.7%
OPAP SA	71,800		2,727,115
Hong Kong — 2.7%
ASM Pacific Technology Ltd.	34,000		189,178
Cheung Kong Ltd.	147,000		1,542,309
CNPC Hong Kong Ltd. (2)	240,000		71,567
China Mobile Ltd.	403,500		1,951,080
China Netcom Group Corp., Ltd. (2)	101,000		180,261
Hong Kong Exchanges & Clearing Ltd.	34,000		173,829
Hutchison Whampoa Ltd.	347,000		3,283,738
Shangri-La Asia Ltd.	98,000		156,589
Solomon Systech International Ltd.	228,000		106,531
Sun Hung Kai Properties	263,500		2,735,318
Television Broadcasts Ltd.	18,000		100,493
			10,490,893
Indonesia — 0.8%
PT Gudang Garam Tbk	1,075,934		1,282,686
PT Telekomunikasi Indonesia Tbk (2)	3,014,750		2,022,938
			3,305,624
Ireland — 0.6%
Irish Life & Permanent PLC	116,850		2,567,550
Italy — 3.0%
Assicurazioni Generali SpA (2)	72,267		2,596,026
Eni SpA (1)	30,784		882,029
Marzotto SpA (2)	5,633		23,966
Mediobanca SpA (1)	130,091		2,714,548
Saipem SpA	117,223		2,505,024
Fondiaria-Sai SpA (2)	7,058		281,707
UniCredito Italiano SpA (1)(2)	408,295		2,966,253
			11,969,553
Japan — 23.8%
ADVANTEST Corp.	8,400		954,444
AISIN SEIKI Co., Ltd.	13,800		488,958
Credit Saison Co., Ltd.	56,000		2,652,795
Daito Trust Construction Co., Ltd. (2)	10,300		483,420

(See Notes which are an integral part of the Financial Statements)

15

Marshall Funds

International Stock Fund (continued)

Description	Shares	Value
Common Stocks (continued)
Japan (continued)
Denso Corp.	14,400	$	525,199
Don Quijote Co., Ltd.	23,200		1,759,400
Fujikura Ltd.	22,000		244,568
Haseko Corp. (1)(2)	1,009,500		3,531,790
Hikari Tsushin, Inc. (1)	19,700		1,353,984
Hitachi High-Technologies Corp.	19,800		515,599
Jupiter Telecommunications Co., Ltd. (2)	2,577		1,730,133
KDDI Corp.	877		4,506,119
Kenwood Corp.	39,000		83,667
Keyence Corp.	9,500		2,590,627
Komeri Co., Ltd.	59,300		2,190,988
Lawson, Inc.	9,700		361,851
Makita Corp.	23,600		686,218
Marubeni Corp.	177,000		879,172
Matsumotokiyoshi Co., Ltd.	28,200		777,332
Mazda Motor Corp.	32,000		183,006
Mitsubishi Corp. (2)	351,100		8,138,144
Mitsubishi Tokyo Financial Group, Inc.	214		3,274,402
Mitsui O.S.K. Lines Ltd. (1)	730,000		5,322,444
Mizuho Financial Group, Inc.	1,049		8,356,027
NGK Spark Plug Co., Ltd.	5,000		112,928
Nikon Corp.	16,000		272,438
Nintendo Co., Ltd.	10,660		1,575,380
Nippon Electric Glass Co., Ltd.	75,972		1,828,801
Nippon Television Network Corp. (1)	11,520		1,682,703
Nippon Yusen Kabushiki Kaisha	82,000		533,982
Nipponkoa Insurance Co.	201,000		1,814,226
Nissan Motor Co., Ltd.	268,000		3,090,445
Nitori Co., Ltd.	47,300		2,311,234
NTT DoCoMo, Inc.	1,605		2,384,211
Santen Pharmaceutical Co., Ltd.	3,400		79,551
Seven & I Holdings Co., Ltd.	43,040		1,751,499
Shinko Electric Industries Co., Ltd. (2)	1,100		80,333
Sony Corp.	141,600		6,605,393
Sumikin Bussan Corp.	26,000		109,712
Sumitomo Metal Industries, Ltd.	400,000		1,775,308
Suzuki Motor Corp. Ltd.	230,300		4,567,394
Takeda Pharmaceutical Co., Ltd.	6,300		352,149
Tokyo Electron Ltd.	36,900		2,461,577
USS Co., Ltd.	29,340		1,933,859
Yamada Denki Co., Ltd.	69,200		7,404,052
Yamaha Motor Co., Ltd.	15,900		362,674
			94,680,136
Malaysia — 0.4%
Digi.com Berhad (2)	94,200		222,124
Genting Berhad	7,900		50,774
Resorts World Berhad	374,805		1,310,782
Shell Refining Co., Berhad	19,800		52,546
Telekom Malaysia Berhad	34,000		90,528
			1,726,754
Netherlands — 4.7%
Aegon NV (1)	417,171		6,874,210
Euronext NV (2)	3,544		221,998
Fortis	31,700		1,133,314
Heineken NV	7,572		284,966
ING Groep NV	134,739		5,063,679
Nutreco Holding NV	3,508		206,222
Royal Dutch Shell PLC, Class A	106,799		3,217,452

Description	Shares	Value
Common Stocks (continued)
Netherlands (continued)
TNT NV	20,971	$	682,383
TomTom NV (1)(2)	27,449		846,437
			18,530,661
New Zealand — 0.0%
Fletcher Building Ltd.	5,933		30,944
Norway — 2.9%
Fjord Seafood ASA	92,000		91,731
Norsk Hydro ASA (1)(2)	45,900		5,377,760
Statoil ASA (1)	240,700		6,152,889
			11,622,380
Russian Federation — 0.2%
GMK Norilsk Nickel, ADR	6,400		825,600
LUKOIL, ADR	1,300		103,695
			929,295
Singapore — 0.7%
Chartered Semiconductor Manufacturing Ltd. (2)	975,000		803,360
MobileOne Ltd.	49,000		66,376
Singapore Telecommunications Ltd. (2)	1,052,950		1,700,733
StarHub Ltd.	51,000		68,378
STX Pan Ocean Co., Ltd. (2)	137,000		80,334
United Test and Assembly Center Ltd. (2)	101,000		55,767
			2,774,948
South Korea — 1.1%
Kookmin Bank, ADR	17,700		1,340,775
Samsung Electronics Co., Ltd.	3,180		2,228,661
Shinhan Financial Group Co., Ltd.	16,467		648,301
			4,217,737
Spain — 3.0%
ACS SA	93,402		3,483,282
Banco de Sabadell SA	9,469		285,357
Banco Santander Central Hispano SA	565,448		8,256,844
			12,025,483
Sweden — 1.5%
ForeningsSparbanken AB (1)	41,100		1,095,786
JM AB	6,000		334,229
Lindex AB (2)	3,800		43,687
Nordea Bank AB (1)	110,500		1,249,654
Skandinaviska Enskilda Banken AB, Class A (1)	32,400		716,243
Telefonaktiebolaget LM Ericsson, Class B (1)	697,017		2,376,778
			5,816,377
Switzerland — 7.4%
ABB Ltd. (2)	208,537		2,491,043
Compagnie Financiere Richemont AG, Class A	40,726		1,774,070
Credit Suisse Group (1)	78,582		4,350,108
Julius Baer Holding Ltd., AG	28,320		2,433,364
Nestle SA	15,200		4,467,527
Novartis AG-REG (1)	46,464		2,477,890
Phonak Holding AG (2)	1,655		79,932
Roche Holding AG	2,321		342,874
Swatch Group AG	18,398		2,985,945
Syngenta AG (2)	420		58,118

(See Notes which are an integral part of the Financial Statements)

16

February 28, 2006 (Unaudited)

Schedule of Investments

International Stock Fund (continued)

Description	Shares	Value
Common Stocks (continued)
Switzerland (continued)
UBS AG (1)	20,940	$	2,219,911
Zurich Financial Services AG (2)	23,705		5,599,119
			29,279,901
Taiwan — 1.6%
Chi Mei Optoelectronics Corp.	775,000		1,178,644
Compal Electronics (2)	1,482,000		1,380,698
Hon Hai Precision Industry Co., Ltd.	279,022		1,762,447
Taiwan Semiconductor Manufacturing Co., Ltd. (2)	1,120,945		2,088,936
			6,410,725
Thailand — 0.4%
Bangkok Bank PCL	414,800		1,341,234
Siam Cement PCL	46,608		315,498
			1,656,732
Turkey — 1.7%
Dogan Sirketler Grubu Holding AS (2)	406,338		2,153,343
Eregli Demir ve Celik Fabrikalari AS (2)	107,659		726,503
Haci Omer Sabanci Holding AS	30,674		241,691
Koc Holding AS	172,544		1,046,224
Petkim Petrokimya Holding AS (2)	36,395		202,656
Tofas Turk Otomobil Fabrikasi AS (2)	62,222		206,556
Tupras-Turkiye Petrol Rafinerileri AS (2)	44,668		855,420
Turkcell Iletisim Hizmetleri AS (2)	51,019		368,214
Turkiye Garanti Bankasi AS (2)	129,685		584,851
Turkiye Is Bankasi	19,393		183,459
Vestel Elektronik Sanayi ve Ticaret AS (2)	23,444		102,155
			6,671,072
United Kingdom — 16.3%
Amvescap PLC	219,150		2,069,884
Antofagasta PLC	64,220		2,312,955
ARM Holdings PLC	897,400		2,154,207
Ashtead Group PLC (2)	51,617		197,166
AstraZeneca PLC	150,281		6,943,450
AWG PLC	31,618		614,264
BHP Billiton PLC	416,819		7,034,056
British American Tobacco PLC	226,906		5,414,942
British Sky Broadcasting Group PLC	283,100		2,502,298
Compass Group PLC	339,859		1,294,330
Diageo PLC	187,950		2,887,432
HSBC Holdings PLC	487,216		8,336,448
Kingfisher PLC	521,600		2,088,182
London Stock Exchange PLC	10,158		152,181
Marks & Spencer Group PLC	77,432		704,018
Misys PLC	434,900		1,791,290
National Grid PLC	207,682		2,185,095
NETeller PLC (2)	57,597		759,476
Next PLC	16,789		483,998
Reuters Group PLC	328,700		2,189,962
Royal Bank of Scotland Group PLC	80,150		2,682,518

Description	Shares or Principal Value		Value
Common Stocks (continued)
United Kingdom (continued)
Smiths Group PLC		156,700	$	2,579,692
Standard Chartered PLC		178,124		4,652,071
Vodafone Group PLC		1,478,700		2,825,843
				64,855,758
Venezuela — 0.0%
Compania Anonima Nacional Telefonos de Venezuela, ADR		3,500		60,620
Total Common Stocks (identified cost $324,855,738)				382,370,249
Purchased Put Option — 0.0%
Syngenta AG, 5/23/06 Strike Price $234.00		410		506
Short-Term Investments — 25.7%
Collateral Pool Investment for Securities on Loan — 23.3% (See Note 2 of the Financial Statements)				92,655,140
Repurchase Agreement — 2.4%
Agreement with IBT Corp., 3.90%, dated 2/28/2006, to be repurchased at $9,503,844 on 3/1/2006, collateralized by various U.S. Government Agency Obligations with various maturities to 8/1/2035, with a market value of $9,932,115 (at amortized cost)	$	9,502,814		9,502,814
Total Short-Term Investments — 25.7% (identified cost $102,157,954)				102,157,954
Total Investments — 121.8% (identified cost $427,013,692)				484,528,709
Other Assets and Liabilities — (21.8)%				(86,868,649	)
Total Net Assets — 100.0%			$	397,660,060

(See Notes which are an integral part of the Financial Statements)

17

Marshall Funds

International Stock Fund (continued)

Industry Division

Industry	Market Value			% of Total Net Assets
Airlines	$	1,003,751		0.3	%
Apparel		596,342		0.1
Automobiles		14,178,444		3.6
Beverages		3,745,136		0.9
Chemicals		1,526,968		0.4
Commercial Banks		55,589,355		14.0
Commercial Services		197,166		0.0
Computers		1,380,698		0.3
Construction Materials		4,350,576		1.1
Cosmetics		2,780,144		0.7
Distribution/Wholesale		9,642,627		2.4
Diversified Financial Services		21,676,134		5.5
Diversified Holding Companies		15,061,950		3.8
Diversified Manufacturing		2,852,130		0.7
Electronics		15,458,701		3.9
Energy		237,676		0.1
Engineering & Construction		9,986,306		2.5
Entertainment		4,037,897		1.0
Food & Staple Retailing		8,792,382		2.2
Healthcare Products & Services		434,604		0.1
Home Furnishings		6,791,215		1.7
Insurance		36,370,805		9.1
Leisure Time		362,674		0.1
Lodging		207,363		0.1
Machinery		6,688,479		1.7
Media		13,239,278		3.3
Metals & Mining		16,412,789		4.1
Oil & Gas		31,425,455		7.9
Pharmaceuticals		12,333,596		3.1
Real Estate		4,761,047		1.2
Retail		28,145,496		7.1
Semiconductor Equipment & Products		10,168,550		2.5
Software		2,637,727		0.7
Telecommunications		23,066,051		5.8
Tobacco		6,697,628		1.7
Transportation		8,385,369		2.1
Utilities		1,148,246		0.3
Total Common Stocks		382,370,755		96.1
Collateral Pool Investment for Securities on Loan		92,655,140		23.3
Repurchase Agreement		9,502,814		2.4
Total Investments		484,528,709		121.8
Other Assets & Liabilities		(86,868,649	)	(21.8	)
Total Net Assets	$	397,660,060		100.0	%

Government Income Fund

Description	Principal Amount		Value
Asset-Backed Securities — 2.0%
Green Tree Home Equity Loan Trust 1998-B, Class B1, 7.810%, 11/15/2029	$	5,098,458	$	5,093,594
GSR Mortgage Loan Trust 2005-5F, Class 2A8, 5.500%, 6/25/2035		6,000,000		5,839,764
Total Asset-Backed Securities (identified cost $10,966,279)				10,933,358
Collateralized Mortgage Obligations — 13.2%
Chase Mortgage Finance Corp., 5.500%, 5/25/2035 (Series 2005-S1-1A7)		5,000,000		4,733,325
Countrywide Home Loans, 5.750%, 3/25/2033 (Series 2003-J1-1A8)		1,975,000		1,968,054
Federal Home Loan Mortgage Corp., 4.840%, 8/25/2031, REMIC (Series T-32-A1) (4)		1,766,784		1,776,216
Federal Home Loan Mortgage Corp., 5.000%, 10/15/2029, REMIC (Series 2745-AY)		5,000,000		4,875,630
Federal Home Loan Mortgage Corp., 5.000%, 10/15/2034, REMIC (Series 2876-DQ)		756,405		743,658
Federal Home Loan Mortgage Corp., 5.000%, 4/15/2035, REMIC (Series 2963-ED)		3,901,339		3,742,347
Federal Home Loan Mortgage Corp., 5.500%, 10/15/2035, REMIC (Series 3058-WC)		5,140,882		5,150,701
Federal Home Loan Mortgage Corp., 6.500%, 10/15/2016, REMIC (Series 1702-PK)		4,320,164		4,346,249
Federal National Mortgage Association, 4.000%, 10/25/2032, REMIC (Series 2003-28-GA)		591,472		557,972
Federal National Mortgage Association, 4.830%, 1/25/2031, REMIC (Series 2001-25-FA) (4)		3,285,521		3,291,991
Federal National Mortgage Association, 5.000%, 10/25/2016, REMIC (Series 2003-16-PD)		5,000,000		4,951,400
Federal National Mortgage Association, 5.000%, 10/15/2031, REMIC (Series 2543-LN)		5,091,854		5,017,941
Federal National Mortgage Association, 5.000%, 5/15/2033, REMIC (Series 2791-BL)		2,853,720		2,791,121
Federal National Mortgage Association, 5.500%, 11/25/2035, REMIC (Series 2005-100-DA) (1)		2,735,304		2,728,515
Government National Mortgage Association, 4.500%, 11/16/2028, REMIC (Series 2003-77-TE)		806,763		804,341

(See Notes which are an integral part of the Financial Statements)

18

February 28, 2006 (Unaudited)

Schedule of Investments

Government Income Fund (continued)

Description	Principal Amount		Value
Collateralized Mortgage Obligations (continued)
Master Asset Securitization Trust, 5.000%, 3/25/2034, REMIC (Series 2004-3-4A5)	$	15,215,000	$	14,815,332
Residential Accredit Loans, Inc., 4.000%, 7/25/2033 (Series 2003-QR24-A5)		2,023,520		2,000,854
Structured Asset Securities Corporation, 4.910%, 8/25/2034 (Series 2004-16XS-A2)		2,997,939		2,987,665
Structured Asset Securities Corporation, 5.250%, 8/25/2033 (Series 2003-21-2A2)		3,572,988		3,448,069
Washington Mutual, 3.530%, 10/25/2033, REMIC (Series 2003-AR10-A3A)		443,993		442,564
Total Collateralized Mortgage Obligations (identified cost $72,142,298)				71,173,945
Corporate Bonds & Notes — 3.7%
CIT Group, Inc. FRN, 4.980%, 11/3/2010 (4)		5,000,000		5,009,925
DaimlerChrysler North America Holding Corp. FRN, 4.700%, 3/7/2007 (4)		3,000,000		3,002,436
HSB Capital I FRN, 5.510%, 7/15/2027 (4)		3,000,000		3,002,850
SLM Corp. FRN, 4.691%, 9/15/2006 (4)		4,000,000		4,006,372
SLM Corp. FRN, 4.763%, 7/27/2009 (4)		5,000,000		4,998,445
Total Corporate Bonds & Notes (identified cost $19,968,950)				20,020,028
Mortgage-Backed Securities — 51.6%
Federal Home Loan Mortgage Corporation — 6.5%
5.000%, 8/1/2014		4,344,547		4,302,023
5.000%, 10/1/2033 (1)		4,002,716		3,894,526
5.000%, 3/1/2036 (6)		20,000,000		19,381,240
5.500%, 11/1/2018		5,238,009		5,262,979
6.500%, 9/1/2016		330,500		338,785
7.000%, 11/1/2009		258,161		261,343
7.500%, 9/1/2013		129,867		136,808
7.500%, 4/1/2024		336,543		353,461
7.500%, 4/1/2027		198,344		208,170
8.000%, 8/1/2030		268,424		286,993
8.500%, 9/1/2024		186,098		201,400
9.000%, 6/1/2019		369,018		398,772
9.500%, 2/1/2025		272,877		299,450
				35,325,950
Federal National Mortgage Association — 41.2%
5.000%, 5/1/2018 (1)		3,224,583		3,188,767
5.000%, 3/1/2021 (6)		6,000,000		5,921,250
5.000%, 7/1/2035 (1)		5,745,191		5,584,315
5.000%, 3/1/2036 (6)		35,000,000		34,004,670
5.500%, 1/1/2023 (1)		3,485,838		3,486,542

Description	Principal Amount		Value
Mortgage-Backed Securities (continued)
Federal National Mortgage Association (continued)
5.500%, 10/1/2024	$	3,987,433	$	3,985,575
5.500%, 2/1/2033		2,154,867		2,140,050
5.500%, 6/1/2035 (1)		7,115,015		7,053,634
5.500%, 3/1/2036 (6)		80,000,000		79,275,040
6.000%, 9/1/2013		1,529,457		1,559,359
6.000%, 10/1/2016		905,338		923,520
6.000%, 3/1/2036 (6)		60,000,000		60,562,500
6.500%, 9/1/2016		544,480		559,474
6.500%, 9/1/2016		1,061,039		1,090,258
6.500%, 8/1/2030 (1)		5,644,739		5,805,235
6.500%, 12/1/2031		348,463		357,763
7.000%, 12/1/2010		442,329		447,235
7.000%, 3/1/2029		497,393		515,874
7.000%, 7/1/2029		1,408,991		1,461,344
7.000%, 2/1/2030		1,126,396		1,168,248
7.500%, 12/1/2009		968,382		991,757
7.500%, 10/1/2030		228,646		239,513
8.000%, 10/1/2028		1,587,739		1,695,899
8.000%, 4/1/2030		422,953		452,047
				222,469,869
Government National Mortgage Association — 3.9%
5.000%, 4/15/2034		2,686,586		2,647,717
5.500%, 9/15/2033 (1)		6,821,853		6,850,655
6.000%, 12/20/2033 (1)		7,791,217		7,933,492
6.500%, 9/15/2032 (1)		1,451,368		1,514,106
7.000%, 6/15/2029		582,601		609,063
7.000%, 8/15/2031		344,430		360,045
8.500%, 6/15/2010		363,106		378,576
9.000%, 11/15/2009		598,513		617,533
9.000%, 1/15/2010		194,650		202,119
9.500%, 10/15/2024		125,212		137,975
				21,251,281
Total Mortgage-Backed Securities (identified cost $278,779,381)				279,047,100
U.S. Treasury Bonds & Notes — 46.0%
2.000%, 5/15/2006		25,000,000		24,873,050
2.375%, 8/31/2006		25,000,000		24,717,775
2.750%, 7/31/2006		25,000,000		24,807,625
3.875%, 9/15/2010 (1)		20,000,000		19,394,540
4.000%, 8/31/2007 (1)		10,000,000		9,901,570
4.000%, 4/15/2010 (1)		10,000,000		9,762,900
4.375%, 1/31/2008 (1)		25,000,000		24,863,300
4.375%, 11/15/2008 (1)		20,000,000		19,858,600
4.375%, 12/15/2010 (1)		30,000,000		29,691,810
7.000%, 7/15/2006		60,000,000		60,513,300
Total U.S. Treasury Bonds & Notes (identified cost $249,343,021)				248,384,470
Total Investments in Securities — 116.5% (identified cost $631,199,929)				629,558,901
Short-Term Investments — 46.1%
Collateral Pool Investments for Securities on Loan — 35.7% (See Note 2 of the Financial Statements)				192,965,297

(See Notes which are an integral part of the Financial Statements)

19

Marshall Funds

Government Income Fund (continued)

Description	Principal Amount		Value
Short-Term Investments (continued)
Repurchase Agreement — 10.4%
Agreement with Morgan Stanley & Co., Inc., 4.56% dated 2/28/2006, to be repurchased at $55,911,694 on 3/1/2006, collateralized by U.S. Government Agency Obligations with various maturities to 6/16/2006, with a market value of $57,190,022 (at amortized cost)	$	55,904,613	$	55,904,613
Total Short-Term Investments (identified cost $248,869,910)				248,869,910
Total Investments — 162.6% (identified cost $880,069,839)				878,428,811
Other Assets and Liabilities — (62.6)%				(338,176,193	)
Total Net Assets — 100.0%			$	540,252,618

Portfolio Sector Allocations*
Sector	Fund
Asset-Backed Securities	2.0%
Collateralized Mortgage Obligations	13.2%
Corporate Bonds & Notes	3.7%
Mortgage-Backed Securities	51.6%
U.S. Treasury Bonds & Notes	46.0%
Other Assets & Liabilities	(16.5)%
Total	100.0%

Intermediate Bond Fund

Description	Principal Amount		Value
Asset-Backed Securities — 2.2%
Citibank Credit Card Issuance Trust 2002-A1, Class A1, 4.950%, 2/9/2009	$	6,000,000	$	5,997,786
Green Tree Home Improvement Loan Trust 1998-B, Class HEB1, 7.810%, 11/15/2029		5,948,201		5,942,526
Structured Asset Securities Corp. Trust 2004-16XS, Class A2, 4.910%, 8/25/2034 (4)		2,997,939		2,987,665
Total Asset-Backed Securities (identified cost $14,948,409)				14,927,977
Collateralized Mortgage Obligations — 6.2%
CS First Boston Mortgage Securities Corp. 2003-11, Class 1A3, 4.500%, 6/25/2033		2,914,040		2,869,781

Description	Principal Amount		Value
Collateralized Mortgage Obligations (continued)
Federal Home Loan Mortgage Corp., Class AY, (Series 2745), 5.000%, 10/15/2029	$	605,000	$	589,951
Federal Home Loan Mortgage Corp., Class WC, 5.500%, 7/15/2032 (1)		10,000,000		9,890,250
Federal Home Loan Mortgage Corp., Class WC, (Series 3058), 5.500%, 10/15/2035		5,997,695		6,009,151
Federal National Mortgage Association, Pass-Thru, 15-year, 5.500%, 11/1/2018 (1)		11,547,516		11,609,930
Federal National Mortgage Association, Pass-Thru, 30-year, 5.500%, 11/25/2035 (1)		2,735,304		2,728,515
Federal National Mortgage Association, Pass-Thru, 30-year, 6.500%, 10/1/2031		769,411		789,945
Federal National Mortgage Association, Pass-Thru, 15-year, 7.000%, 12/1/2015		831,304		857,886
GSR Mortgage Loan Trust 2005-5F, Class 2AB, 5.500%, 6/25/2035		4,000,000		3,893,176
Prudential Home Mortgage Securities 1993-H, Class 2B, (Series 144A), 6.980%, 9/28/2008 (4)(7)(8)		52,287		51,999
Residential Accredit Loans, Inc., Class A5, (Series 2003-QR24), 4.000%, 7/25/2033		2,023,520		2,000,854
Total Collateralized Mortgage Obligations (identified cost $41,800,431)				41,291,438
Corporate Bonds & Notes — 55.1%
Aerospace/Defense — 0.6%
BAE Systems Holdings, Inc., Note, (Series 144A), 4.750%, 8/15/2010 (7)(8)		2,000,000		1,948,738
United Technologies Corp., Note, 4.375%, 5/1/2010 (1)		2,000,000		1,951,610
				3,900,348
Automotive & Related — 2.0%
DaimlerChrysler North America Holding Corp., Company Guarantee, 4.700%, 3/7/2007 (4)		4,000,000		4,003,248
Ford Motor Credit Co., Senior Note, 4.950%, 1/15/2008		5,000,000		4,608,130
General Motors Acceptance Corp., Note, 6.875%, 8/28/2012		5,000,000		4,460,585
				13,071,963
Banks — 6.6%
Bank of America Corp., Sr. Unsecured Note, 4.780%, 8/2/2010 (1)(4)		7,000,000		7,011,060
Citicorp, Sub. Note, (Series MTNF), 6.375%, 11/15/2008		7,000,000		7,228,830

(See Notes which are an integral part of the Financial Statements)

20

February 28, 2006 (Unaudited)

Schedule of Investments

Intermediate Bond Fund (continued)

Description	Principal Amount		Value
Corporate Bonds & Notes (continued)
Banks (continued)
NationsBank Corp., Sub. Note, 7.800%, 9/15/2016	$	2,000,000	$	2,372,592
UBS Preferred Funding Trust, Bond, 8.622%, 10/29/2049		7,000,000		7,901,698
US Bank NA, Sr. Note, (Series BKNT), 4.400%, 8/15/2008		10,000,000		9,842,790
Wachovia Corp., Note, 4.710%, 10/28/2008 (4)		5,000,000		5,004,565
World Savings Bank FSB, Sr. Note, (Series BKN1), 4.545%, 3/2/2009 (4)		5,000,000		5,010,360
				44,371,895
Beverages & Foods — 2.3%
General Mills, Inc., Note, 3.875%, 11/30/2007		5,000,000		4,888,310
Kraft Foods, Inc., Note, 5.250%, 6/1/2007		5,000,000		4,998,575
Kroger Co., 8.050%, 2/1/2010		5,000,000		5,427,510
				15,314,395
Broker/Dealers — 6.7%
Credit Suisse, London, Sub. Note, (Series 144A), 7.900%, 5/29/2049 (7)(8)		5,000,000		5,142,935
Goldman Sachs Group, Inc., Note, 4.500%, 6/15/2010		6,000,000		5,834,154
Goldman Sachs Group, Inc., Note, 4.819%, 6/28/2010 (4)		10,000,000		10,000,000
Goldman Sachs Group, Inc., Note, 5.000%, 10/1/2014		3,000,000		2,913,807
Merrill Lynch & Co., Sr. Note, (Series MTNC), 3.000%, 4/30/2007		7,000,000		6,815,109
Merrill Lynch & Co., Note, (Series MTNC), 4.930%, 2/5/2010 (4)		7,000,000		7,000,000
Morgan Stanley, Sr. Note, (Series MTNF), 4.725%, 1/18/2008 (4)		7,000,000		7,012,502
				44,718,507
Construction Equipment — 0.6%
CRH America, Inc., Note, 6.950%, 3/15/2012		4,000,000		4,301,796
Corporate-Other — 0.8%
Core Investment Grade Trust, Pass-Thru Certificate, 4.659%, 11/30/2007 (4)		5,451,853		5,353,747
Domestic & International Oil — 0.4%
Occidental Petroleum Corp., Note, 4.000%, 11/30/2007		2,500,000		2,452,333
Electrical Equipment — 0.7%
General Electric Co., Note, 5.000%, 2/1/2013		5,000,000		4,955,605

Description	Principal Amount		Value
Corporate Bonds & Notes (continued)
Financial Services — 15.2%
American General Finance Corp., Note, (Series G), 4.500%, 11/15/2007 (1)	$	5,000,000	$	4,953,930
American General Finance Corp., Note, (Series G), 5.375%, 10/1/2012		2,500,000		2,491,187
Countrywide Home Loans, Global Bond, 2.875%, 2/15/2007		5,000,000		4,887,260
General Electric Capital Corp., Note, 4.480%, 3/4/2008 (4)		4,000,000		4,004,484
General Electric Capital Corp., Note, (Series MTNA), 6.125%, 2/22/2011		5,000,000		5,204,280
Household Finance Corp., Note, 5.000%, 6/30/2015		5,000,000		4,825,610
Household Finance Corp., Sr. Unsub., 5.030%, 11/16/2009 (4)		6,000,000		6,020,988
John Deere Capital Corp., Note, (Series MTND), 4.400%, 7/15/2009		6,000,000		5,859,042
JPMorgan Chase & Co., Note, 4.600%, 1/17/2011 (1)		5,000,000		4,874,710
JPMorgan Chase & Co., Note, 4.770%, 1/17/2011 (1)(4)		10,000,000		10,015,870
MBNA Capital B, Jr. Sub. Note, (Series B), 5.480%, 2/1/2027 (4)		3,000,000		2,962,809
Morgan Stanley, Convertible, 5.375%, 12/30/2011		5,000,000		4,975,110
National Rural Utilities Cooperative Finance Corp., Collateral Trust, 3.875%, 2/15/2008		4,000,000		3,907,228
Residential Capital Corp., Unsecured, 5.896%, 6/29/2007 (1)(4)		7,000,000		7,048,174
Residential Capital Corp., Company Guarantee, 6.000%, 2/22/2011		5,000,000		4,973,345
SLM Corp., Note, (Series MTNA), 4.691%, 9/15/2006 (4)		5,000,000		5,007,965
SLM Corp., Note, (Series MTNA), 4.763%, 7/27/2009 (4)		15,000,000		14,995,335
SLM Corp., Note, (Series MTNA), 5.625%, 4/10/2007		5,000,000		5,017,420
				102,024,747
Healthcare Providers & Services — 1.2%
United Healthcare Group, Unsecured, 4.920%, 3/2/2009 (4)		8,000,000		8,004,376
Home Builders — 1.9%
Centex Corp., Note, (Series MTN), 4.930%, 8/1/2007 (4)		8,000,000		8,002,696
MDC Holdings, Inc., Sr. Note, 5.375%, 7/1/2015		5,000,000		4,602,435
				12,605,131

(See Notes which are an integral part of the Financial Statements)

21

Marshall Funds

Intermediate Bond Fund (continued)

Description	Principal Amount		Value
Corporate Bonds & Notes (continued)
Insurance — 5.6%
AIG, Inc., (Series 144A), 5.050%, 10/1/2015 (1)(7)(8)	$	5,000,000	$	4,855,395
AIG SunAmerica Global Financial, Bond, (Series 144A), 5.850%, 8/1/2008 (7)(8)		7,000,000		7,102,522
Berkshire Hathaway Finance Corp., Company Guarantee, 4.750%, 5/15/2012 (1)		4,000,000		3,898,116
GE Global Insurance Holding, Note, 7.500%, 6/15/2010		4,825,000		5,216,935
HSB Capital I, Company Guarantee, (Series B), 5.510%, 7/15/2027 (4)		4,000,000		4,003,800
Protective Life Corp., Unsecured Note, 4.000%, 4/1/2011		8,000,000		7,550,208
Prudential Funding Corp., Note, (Series MTN), (Series 144A), 6.600%, 5/15/2008 (7)(8)		5,000,000		5,146,140
				37,773,116
Leasing — 0.3%
International Lease Finance Corp., Note, 4.500%, 5/1/2008		2,000,000		1,971,454
Media — 2.5%
AOL Time Warner, Inc., Note, 6.125%, 4/15/2006		4,000,000		4,004,440
Comcast Corp., Company Guarantee, 4.950%, 6/15/2016 (1)		6,000,000		5,616,546
Comcast Corp., Company Guarantee, 5.900%, 3/15/2016		4,000,000		3,994,480
Comcast Corp., Note, 6.750%, 1/30/2011		3,000,000		3,151,845
				16,767,311
Metals & Mining — 0.7%
BHP Billiton Finance, Company Guarantee, 5.250%, 12/15/2015		5,000,000		4,971,360
Publishing — 0.4%
Reed Elsevier, Inc., Company Guarantee, 6.125%, 8/1/2006		2,500,000		2,510,048
Real Estate Investment Trusts Diversified — 0.6%
Vornado Realty Trust, Bond, 5.625%, 6/15/2007		4,000,000		4,001,560
Short-Term Business Credit — 2.2%
CIT Group, Inc., Sr. Note, 3.650%, 11/23/2007		5,000,000		4,880,360
CIT Group, Inc., Sr. Note, 4.980%, 11/3/2010 (4)		10,000,000		10,019,850
				14,900,210
Telecommunications — 3.1%
BellSouth Corp., Note, 4.750%, 11/15/2012 (1)		3,000,000		2,907,405
Intelsat, Ltd., Sr. Note, 5.250%, 11/1/2008		2,000,000		1,900,000

Description	Principal Amount		Value
Corporate Bonds & Notes (continued)
Telecommunications (continued)
Telecom Italia Capital, Company Guarantee, 5.250%, 11/15/2013	$	5,000,000	$	4,836,115
Telecom Italia Capital, Note, 5.160%, 2/1/2011 (4)		3,000,000		3,021,777
Telecom Italia Capital, Note, 5.250%, 10/1/2015		4,000,000		3,827,968
Verizon Global Funding, Note, 4.900%, 9/15/2015 (1)		1,000,000		955,804
Verizon Global Funding, Note, 7.375%, 9/1/2012		3,000,000		3,310,248
				20,759,317
Transportation — 0.7%
Systems 2001 Asset Trust, Pass- Thru Certificate, (Series 144A), 6.664%, 9/15/2013 (7)(8)		4,346,976		4,613,728
Total Corporate Bonds & Notes (identified cost $373,460,605)				369,342,947
Government Agencies — 0.7%
Federal Home Loan Bank — 0.7%
5.430%, 11/17/2008 (1)		5,000,000		5,071,265
Total Government Agencies (identified cost $4,972,550)				5,071,265
Mortgage-Backed Securities — 9.6%
Federal Home Loan Mortgage Corporation — 0.1%
7.500%, 2/1/2031		551,972		578,277
7.500%, 6/1/2031		165,607		173,469
				751,746
Federal National Mortgage Association — 9.4%
5.000%, 7/1/2035 (1)		2,831,395		2,752,110
5.500%, 12/15/2035 (6)		20,000,000		19,818,760
6.000%, 12/15/2035 (6)		40,000,000		40,375,000
				62,945,870
Government National Mortgage Association — 0.1%
7.000%, 3/15/2032		635,859		664,638
Total Mortgage-Backed Securities (identified cost $64,715,387)				64,362,254
U.S. Treasury Bonds & Notes — 20.0%
4.375%, 1/31/2008 (1)		25,000,000		24,863,300
4.375%, 11/15/2008 (1)		50,000,000		49,646,500
4.375%, 12/15/2010 (1)		60,000,000		59,383,620
Total U.S. Treasury Bonds & Notes (identified cost $134,093,720)				133,893,420
Total Investments in Securities — 93.8% (identified cost $633,991,102)				628,889,301

(See Notes which are an integral part of the Financial Statements)

22

February 28, 2006 (Unaudited)

Schedule of Investments

Intermediate Bond Fund (continued)

Description	Principal Amount		Value
Short-Term Investments — 37.8%
Collateral Pool Investment for Securities on Loan —30.3% (See Note 2 of the Financial Statements)			$	203,339,798
Repurchase Agreement — 7.5%
Agreement with Morgan Stanley & Co., Inc., 4.56%, dated 2/28/2006 to be repurchased at $50,552,972 on 3/1/2006, collateralized by a U.S. Government Agency Obligation with a maturity of 6/16/2008, with a market value of $51,784,398 (at amortized cost)	$	50,546,570		50,546,570
Total Short-Term Investments (identified cost $253,886,368)				253,886,368
Total Investments — 131.6% (identified cost $887,877,470)				882,775,669
Other Assets and Liabilities — (31.6)%				(211,936,392	)
Total Net Assets — 100.0%			$	670,839,277

Portfolio Sector Allocations*
Sector	Fund
Asset-Backed Securities	2.2%
Collateralized Mortgage Obligations	6.2%
Corporate Bonds & Notes	55.1%
Government Agencies	0.7%
Mortgage-Backed Securities	9.6%
U.S. Treasury Bonds & Notes	20.0%
Other Assets & Liabilities	6.2%
Total	100.0%

Intermediate Tax-Free Fund

Description/Credit Rating (9)	Principal Amount		Value
Municipals — 96.5%
Arizona — 3.8%
Maricopa County, AZ, School District No. 28 Kyrene Elementary, (Series 2001 A), GO UT, 5.000%, (MBIA Insurance Corp.)/(Original Issue Yield: 4.59%), 7/1/2013 NR/Aaa	$	1,385,000	$	1,500,495
Phoenix, AZ, Civic Improvement Corp., Subordinate Excise Tax Revenue Bonds, (Series 2003 A), 5.000%, (MBIA Insurance Corp.)/ (Original Issue Yield: 3.87%), 7/1/2015 AAA/Aaa		1,000,000		1,076,070

Description/Credit Rating (9)	Principal Amount		Value
Municipals (continued)
Arizona (continued)
Phoenix, AZ, Civic Improvement Corp., Jr. Lien Water System Revenue Refunding Construction Bonds, 5.250%, (FGIC)/(Original Issue Yield: 4.69%), 7/1/2016 AAA/Aaa	$	500,000	$	559,160
				3,135,725
Arkansas — 0.6%
Arkansas Development Finance Authority, State Agency Facilities Construction Bonds, Revenue Department Building Commission Project, (Series 1997), Revenue Bonds, 5.000%, (AMBAC INS)/ (Original Issue Yield: 5.055%), 7/1/2020 AAA/Aaa		475,000		484,296
Colorado — 8.9%
Eagle, Garfield & Routt Counties, CO, School District No. RE 50J, GO UT Refunding Bonds, 4.750%, (FSA State Aid Withholding)/ (Original Issue Yield: 3.88%), 12/1/2018 AAA/Aaa		1,000,000		1,080,490
El Paso County, CO, School District No. 49 Falcon, GO UT Series 2002, 5.750%, (FGIC State Aid Withholding)/(Original Issue Yield: 4.75%), 12/1/2013 AAA/Aaa		1,875,000		2,075,231
Larimer County, CO, School District No. R-1 Poudre, GO UT Refunding Bonds, (Series 1998), 5.250%, (State Aid Withholding)/ (Original Issue Yield: 4.65%), 12/15/2009 AA-/Aa3		2,500,000		2,610,875
University of Northern Colorado, Auxiliary Facilities System Revenue Refunding & Improvement Bonds Series 2005, 5.000%, (FSA Insurance Corp.)/ (Original Issue Yield: 3.88%), 6/1/2017 AAA/Aaa		1,445,000		1,564,964
				7,331,560
Florida — 2.0%
Lee County, FL, Transportation Facilities, Sanibel Bridges & Causeway Project, (Series 2005 B), Revenue Bonds, 5.000%, (CIFG)/(Original Issue Yield: 3.95%), 10/1/2018 AAA/Aaa		1,525,000		1,651,621
Georgia — 5.1%
Coweta County, GA, Water & Sewer Authority Revenue Refunding Bonds, 5.000%, (FSA Insurance Corp.)/(Original Issue Yield: 3.79%), 6/1/2017 NR/Aaa		1,200,000		1,323,768
De Kalb County, GA, GO UT Refunding Bonds, (Series 2003 A), 5.000%, (Original Issue Yield: 2.15%), 1/1/2007 AA+/Aaa		1,790,000		1,814,272

(See Notes which are an integral part of the Financial Statements)

23

Marshall Funds

Intermediate Tax-Free Fund (continued)

Description/Credit Rating (9)	Principal Amount		Value
Municipals (continued)
Georgia (continued)
Georgia Municipal Electric Authority, Project One Subordinated Revenue Bonds, (Series 1998 A), 5.250%, (MBIA Insurance Corp.)/ (Original Issue Yield: 4.70%), 1/1/2014 AAA/Aaa	$	1,000,000	$	1,098,750
				4,236,790
Hawaii — 5.2%
State of Hawaii GO UT Bonds 2005, (Series DF), 5.000%, (AMBAC INS)/(Original Issue Yield: 3.41%), 7/1/2012 AAA/Aaa		2,000,000		2,151,220
State of Hawaii GO UT Refunding Bonds 2005, (Series DG), 5.000%, (AMBAC INS)/(Original Issue Yield: 3.69%), 7/1/2015 AAA/Aaa		2,000,000		2,185,260
				4,336,480
Illinois — 2.9%
Kendall, Kane & Will Counties, IL, Community Unit School District No. 308, GO UT, (Series 2004), 5.250%, (FSA Insurance Corp.)/(Original Issue Yield: 4.38%), 10/1/2016 NR/Aaa		1,125,000		1,244,295
University of Illinois, Auxiliary Facilities System Revenue Refunding Bonds, (Series 2001 A), 5.250%, (AMBAC INS)/(Original Issue Yield: 4.53%), 4/1/2013 AAA/Aaa		1,060,000		1,158,697
				2,402,992
Iowa — 3.7%
Iowa Finance Authority, Solid Waste Disposal Revenue Bonds, (Series 1997), (IPSCO Project), 6.000%, 6/1/2027 (Mandatory Tender 6/1/2007) NR (10)		3,000,000		3,054,360
Louisiana — 4.9%
Louisiana State University Agricultural and Mechanical College Auxiliary Board Revenue Refunding Bonds, (Series 2005 A), 5.000%, (AMBAC INS)/ (Original Issue Yield: 3.76%), 7/1/2015 AAA/Aaa		1,000,000		1,085,270
New Orleans, LA, Sewer Service Revenue Refunding Bond Anticipation Notes, 3.000%, (Original Issue Yield: 2.65%), 7/26/2006 SG/SP-3		3,000,000		2,970,240
				4,055,510

Description/Credit Rating (9)	Principal Amount		Value
Municipals (continued)
Michigan — 5.0%
Detroit, MI, City School District, School Building & Site Improvement Bonds (Series 1998 B), GO UT, 5.000%, (FGIC Q-SBLF)/(Original Issue Yield: 4.50%), 5/1/2009 AAA/Aaa	$	2,000,000	$	2,093,820
Michigan State Strategic Fund, Ltd., Oblig Revenue Refunding Bonds, (OBG-DOW Chemical Project), (Series 2003), 4.600%, (Original Issue Yield: 4.599%), 6/1/2014 A-/A-2/A3/P-2		2,000,000		2,035,300
				4,129,120
Minnesota — 2.6%
Minneapolis/St. Paul, MN, Metropolitan Airports, Commission Airport Revenue Bonds, (Series 2001 B), (AMT), 5.500%, (FGIC)/(Original Issue Yield: 4.75%), 1/1/2011 AAA/Aaa (10)		2,000,000		2,142,200
Nevada — 2.5%
Clark County, NV, School District, GO Ltd., Building & Refunding Bonds, (Series 2001 D), 5.250%, (FGIC)/(Original Issue Yield: 4.48%), 6/15/2014 AAA/AA-		1,880,000		2,069,241
New Jersey — 1.6%
New Jersey State Transportation Trust Fund Authority Transportation Systems Bonds, (Series 2003 C), 5.000%, (Original Issue Yield: 3.86%), 6/15/2012 AA-/A1		1,200,000		1,277,676
New Mexico — 2.7%
Belen, NM, Consolidated School District No. 002, GO UT, Refunding Bonds, (Series 2005 A), 4.000%, (MBIA State Aid Withholding)/(Original Issue Yield: 2.42%), 8/1/2006 NR/Aaa		1,150,000		1,152,932
New Mexico State Highway Commission, Senior Subordinate Lien Tax Revenue Bonds, (Series 1999), 6.000%, (Original Issue Yield: 5.37%), 6/15/2010 (Prerefunded 6/15/2009), AA+/Aa2		1,000,000		1,076,520
				2,229,452
New York — 10.4%
Metropolitan Transit Authority, NY, Transportation Revenue Bonds, (Series 2005 A), 5.500%, (AMBAC INS)/(Original Issue Yield: 3.61%), 11/15/2016 AAA/Aaa		1,500,000		1,719,540
New York, NY, GO UT, (Series C), 5.500%, (FGIC-TCRS)/(Original Issue Yield: 4.80%), 8/1/2015 AAA/Aaa		2,000,000		2,202,320

(See Notes which are an integral part of the Financial Statements)

24

February 28, 2006 (Unaudited)

Schedule of Investments

Intermediate Tax-Free Fund (continued)

Description/Credit Rating (9)	Principal Amount		Value
Municipals (continued)
New York (continued)
Oswego County, NY, GO UT, 6.700%, (Original Issue Yield: 6.80%), 6/15/2010 (Econ Defeased to Maturity), NR/A3	$	1,100,000	$	1,237,885
Oswego County, NY, GO UT, 6.700%, (Original Issue Yield: 6.80%), 6/15/2011 (Econ Defeased to Maturity), NR/A3		1,100,000		1,263,801
White Plains, NY, GO UT, Public Improvement Revenue Refunding Bonds, (Series B), 3.500%, (Original Issue Yield: 2.31%), 1/15/2007 Aa1/NR		1,365,000		1,367,048
White Plains, NY, GO UT, Public Improvement Revenue Refunding Bonds, (Series B), 3.500%, (Original Issue Yield: 2.66%), 1/15/2008 Aa1/NR		820,000		821,886
				8,612,480
North Dakota — 5.9%
Fargo, ND, Health System Revenue Bonds (Meritcare), (Series 2000 A), 5.750%, (FSA Insurance Corp.)/(Original Issue Yield: 5.30%), 6/1/2012 AAA/Aaa		2,940,000		3,190,047
North Dakota State Water Commission, Water Development and Management Program Revenue Bonds, (Series 2000 A), 6.000%, (MBIA Insurance Corp.)/(Original Issue Yield: 5.39%), 8/1/2011 (Prerefunded 8/1/2010) AAA/Aaa		1,545,000		1,700,226
				4,890,273
Ohio — 4.6%
Butler County, OH, Sewer System Refunding Revenue Bonds, (Series 2005), 5.000%, (FSA Insurance Corp.)/(Original Issue Yield: 3.87%), 12/1/2017 NR/Aaa		2,450,000		2,701,860
Olentangy, OH, Local School District, (Series 2004 B), GO UT Refunding Bonds, 5.500%, (FGIC)/(Original Issue Yield: 4.48%), 12/1/2016 AAA/Aaa		1,000,000		1,114,800
				3,816,660
Pennsylvania — 2.7%
Pennsylvania State Industrial Development Authority Economic Development Revenue Bonds, 5.500%, (AMBAC Insurance)/(Original Issue Yield: 4.52%), 7/1/2014 AAA/Aaa		2,000,000		2,216,000
Tennessee — 1.6%
Putnam County, TN, GO UT School Refunding Bonds, (Series 2001), 5.250%, (FGIC)/(Original Issue Yield: 4.53%), 4/1/2013 NR/Aaa		1,200,000		1,318,776

Description/Credit Rating (9)	Principal Amount		Value
Municipals (continued)
Texas — 2.6%
Tarrant County, TX, HFDC, Texas Health Resource System Revenue Bonds, (Series 1997 A), 5.750%, (MBIA Insurance Corp.)/ (Original Issue Yield: 5.05%), 2/15/2009 AAA/Aaa	$	2,000,000	$	2,117,160
Utah — 5.1%
Alpine, Utah, School District, GO UT, 4.000%, (School Board Guaranty)/(Original Issue Yield: 2.35%), 3/15/2006 NR/Aaa		1,000,000		1,000,240
Jordan, Utah, School District, GO UT Refunding Bonds, (Series 1997 A), 5.250%, (School Board Guaranty)/(Original Issue Yield: 4.70%), 6/15/2006 AAA/NR		2,000,000		2,010,620
South Valley Sewer District, Utah, Sewer Revenue Bonds, (Series 2005), 5.000%, (FSA Insurance Corp.)/(Original Issue Yield: 3.72%), 1/1/2014 NR/Aaa		1,100,000		1,192,477
				4,203,337
Virginia — 3.2%
Suffolk, VA, Redevelopment & Housing Authority, Multi Family Housing Revenue Refunding Bonds (Windsor at Potomac Vista Limited Partnership Project), 4.850%, (Fannie Mae — Standby Liq Fac)/(Original Issue Yield: 4.85%)/(Mandatory Tender 7/1/2011), 7/1/2031 NR/Aaa		1,500,000		1,571,850
Virginia State Public School Authority, School Financing Revenue Refunding Bonds, (Series C), 5.000%, (Original Issue Yield: 3.51%), 8/1/2013 AA+/Aa1		1,000,000		1,081,540
				2,653,390
Washington — 1.3%
Port Longview, WA, Industrial Development Corp., Solid Waste Disposal Revenue Bonds, (Weyerhaeuser Co. Project Series 1992), 6.875%, (Original Issue Yield: 6.874%), 10/1/2008 BBB/NR (10)		1,000,000		1,067,190
West Virginia — 1.4%
West Virginia State Hospital Finance Authority, Hospital Revenue Bonds, (Series 2000 B), (Oak Hill Hospital, Inc.), 6.750%, (Original Issue Yield: 6.95%), 9/1/2030, (Prerefunded 9/1/2010), NR/A2		1,000,000		1,139,500
Wisconsin — 6.2%
Oconomowoc, Wisconsin Area School District Refunding Bonds, (Series 2006 A), GO UT, 4.500%, (Original Issue Yield: 4.17%), 4/1/2019 NR/Aaa		500,000		515,525

(See Notes which are an integral part of the Financial Statements)

25

Marshall Funds

Intermediate Tax-Free Fund (continued)

Description/Credit Rating (9)	Principal Amount		Value
Municipals (continued)
Wisconsin (continued)
Oconomowoc, Wisconsin Area School District Refunding Bonds, (Series 2006 A), GO UT, 4.500%, (Original Issue Yield: 4.21%), 4/1/2020 NR/Aaa	$	595,000	$	611,499
Oconomowoc, Wisconsin Area School District Refunding Bonds, (Series 2006 A), GO UT, 4.500%, (Original Issue Yield: 4.25%), 4/1/2021 NR/Aaa		630,000		645,378
Pewaukee, WI, School District, Refunding GO UT, 5.000%, (FSA Insurance Corp.)/ (Original Issue Yield: 3.90%), 3/1/2016 NR/Aaa		1,340,000		1,461,029
Wisconsin State, GO UT, (Series C), 6.000%, (Original Issue Yield: 5.75%), 5/1/2014, (Prerefunded 5/1/2010), AA-/Aa3		1,750,000		1,915,830
				5,149,261
Total Municipals (identified cost $78,704,113)				79,721,050
Mutual Funds — 4.0%
Federated Tax-Free Obligations Fund		1,609,820		1,609,820
Fidelity Tax Exempt Money Market		1,675,727		1,675,727
Total Mutual Funds (identified cost $3,285,547)				3,285,547
Total Investments — 100.5% (identified cost $81,989,660) (10)				83,006,597
Other Assets and Liabilities — (0.5)%				(408,115	)
Total Net Assets — 100.0%			$	82,598,482

Portfolio Sector Allocations*
Sector	Fund
AAA	46.9%
AA	14.5%
A	2.5%
BBB	1.3%
NR	31.3%
Other Assets & Liabilities	3.5%
Total	100.0%

Short-Term Income Fund

Description	Principal Amount		Value
Asset-Backed Securities — 8.4%
Capital Auto Receivables Asset Trust 2004-1, Class A4, 2.640%, 11/17/2008	$	1,000,000	$	972,201
Caterpillar Financial Asset Trust 2005-A, Class A3, 3.900%, 2/25/2009		1,000,000		987,243
CNH Equipment Trust 2003-A, Class A3B, 1.890%, 7/16/2007		34,160		34,143
DaimlerChrysler Auto Trust 2004-B, Class A3, 3.180%, 9/8/2008		883,572		876,072
Green Tree Home Equity Loan Trust 1998-B, Class B1, 7.810%, 11/15/2029		2,549,229		2,546,797
Honda Auto Receivables Owner Trust 2005-2, Class A3, 3.930%, 1/15/2009		1,500,000		1,482,079
John Deere Owner Trust 2001-A, Class A3, 1.790%, 4/15/2007		123,311		123,179
Pegasus Aviation Lease Securitization 1999-1A, Class A1, 6.300%, 3/25/2029 (7)		750,654		345,770
Residential Asset Mortgage Products, Inc. 2004-RS2, Series RS2, 3.350%, 8/25/2029		658,182		652,176
USAA Auto Owner Trust 2004-2, Class A3, 3.030%, 6/16/2008		1,502,014		1,490,575
WFS Financial Owner Trust 2004-1, Class A4, 2.810%, 8/22/2011		1,150,000		1,113,905
Total Asset-Backed Securities (identified cost $11,148,700)				10,624,140
Collateralized Mortgage Obligations — 26.8%
Government National Mortgage Association — 3.1%
2.866%, Series 0348, Class AB, 2/16/2020		676,608		650,909
3.206%, Series 2003-72, Class A, 4/16/2018		1,497,389		1,449,612
3.313%, Series 2002-83, Class A, 4/16/2017		989,410		963,005
3.590%, Series 2004-78, Class A, 11/16/2017		908,313		879,397
				3,942,923
Federal Home Loan Mortgage Corporation — 1.6%
3.150%, Class A3, 5/15/2010		2,000,000		1,966,206
Other Financial — 22.1%
CS First Boston Mortgage Securities Corp. 2003-11, Class 1A3, 4.500%, 6/25/2033		650,455		640,576
CS First Boston Mortgage Securities Corp. 2004-C1, Class A1, 2.254%, 1/15/2037		1,095,307		1,065,019
Countrywide Alternative Loan Trust 2004-J9, Class 1A2, 4.586%, 10/25/2034		2,400,000		2,378,239
Countrywide Home Loans 2006-HYB1, Class 2A2A, 5.635%, 3/20/2036		2,586,970		2,585,748
GSR Mortgage Loan Trust 2005-AR5, Class 2A2, 5.197%, 10/25/2035		1,814,142		1,798,665

(See Notes which are an integral part of the Financial Statements)

26

February 28, 2006 (Unaudited)

Schedule of Investments

Short-Term Income Fund (continued)

Description	Principal Amount		Value
Collateralized Mortgage Obligations (continued)
Other Financial (continued)
GSR Mortgage Loan Trust 2004-12, Class 3A3, 4.442%, 12/25/2034	$	1,600,000	$	1,580,637
Impac Secured Assets Common Owner Trust 2004-2, Class A3, 4.995%, 8/25/2034		976,753		971,522
J.P. Morgan Chase Commercial Mortgage Securities, Class A1, 3.053%, 1/15/2038		1,173,321		1,123,427
LB-UBS Commercial Mortgage Trust 2004-C1, Class A1, 2.964%, 1/15/2029		1,239,920		1,190,960
Master Adjustable Rate Mortgages Trust 2004-13, Class 3A4, 3.787%, 11/21/2034		1,900,000		1,835,962
Morgan Stanley Capital, Inc. 2003-IQ6, Class A1, 2.800%, 12/15/2041		1,008,905		982,493
Wachovia Bank Commercial Mortgage Trust, Class A1, 3.065%, 2/15/2041		1,494,148		1,438,563
Wachovia Bank Commercial Mortgage Trust, Class A1, 3.291%, 12/15/2035		1,840,476		1,778,404
Washington Mutual 2002-R10, Class A6, 4.820%, 10/25/2032		241,063		239,602
Washington Mutual 2004-AR7, Class A4, 3.954%, 7/25/2034		3,000,000		2,928,288
Washington Mutual 2005-AR5, Class A2, 4.678%, 5/25/2035		2,500,000		2,483,690
Wells Fargo Mortgage Backed Securities 2004-N, Class A2, 3.599%, 8/25/2034		1,556,535		1,553,668
Wells Fargo Mortgage Backed Securities 2004-W, Class A4, 4.578%, 11/25/2034		1,226,689		1,222,307
				27,797,770
Total Collateralized Mortgage Obligations (identified cost $34,358,384)				33,706,899
Corporate Bonds & Notes — 36.4%
Banks — 3.3%
Bank of New York Co., Inc., Note, 2.200%, 5/12/2006		1,100,000		1,094,448
Union Planters Bank, Note, 5.125%, 6/15/2007		1,500,000		1,500,084
Wachovia Corp., Note, 4.950%, 11/1/2006		1,600,000		1,597,758
				4,192,290
Broadcasting — 1.2%
Clear Channel Communications, Inc., 6.000%, 11/1/2006		1,500,000		1,506,228
Broker/Dealers — 3.1%
Credit Suisse First Boston USA, Inc., Note, 5.875%, 8/1/2006		1,220,000		1,224,275
Goldman Sachs Group, Inc., Note, Series MTNB, 2.850%, 10/27/2006		1,900,000		1,873,140
Morgan Stanley, Unsubordinated, 6.100%, 4/15/2006		810,000		811,225
				3,908,640

Description	Principal Amount		Value
Corporate Bonds & Notes (continued)
Computer Services — 1.2%
IBM Corp., Unsecured Note, 2.375%, 11/1/2006	$	1,500,000	$	1,474,585
Construction Equipment — 1.0%
Caterpillar Financial Services Corp., Note, Series MTNF, 2.350%, 9/15/2006		1,300,000		1,281,536
Corporate-Other — 1.2%
Core Investment Grade Bond, 4.659%, 11/30/2007		1,544,690		1,516,894
Electric — 3.1%
Alabama Power Co., 2.800%, 12/1/2006		1,250,000		1,229,745
CalEnergy Co., Inc., Sr. Note, 7.630%, 10/15/2007		1,000,000		1,034,479
FPL Group, Inc., Company Guarantee, 7.625%, 9/15/2006		1,600,000		1,620,616
				3,884,840
Energy — 1.2%
Marathon Oil Corp., Note, 5.375%, 6/1/2007		1,500,000		1,501,979
Entertainment — 1.3%
AOL Time Warner, Inc., Note, 6.125%, 4/15/2006 (1)		1,610,000		1,611,787
Financial Services — 3.3%
Cendant Corp., Unsecured Note, 6.875%, 8/15/2006		1,550,000		1,560,151
MBNA Corp., 6.250%, 1/17/2007		1,290,000		1,302,544
National City Bank, Indiana, Note, 2.375%, 8/15/2006		1,275,000		1,259,093
				4,121,788
Forest Products & Paper — 0.4%
Reed Elsevier, Inc., Company Guarantee, 6.125%, 8/1/2006		490,000		491,969
Industrial Services — 3.4%
Dayton-Hudson Corp., Note, 7.500%, 7/15/2006		1,700,000		1,716,245
FedEx Corp., Note, 2.650%, 4/1/2007		2,200,000		2,138,451
Tyco International Group, Note, 5.800%, 8/1/2006		410,000		410,898
				4,265,594
Insurance — 2.8%
HSB Capital I, Company Guarantee, 5.510%, 7/15/2027 (4)		2,430,000		2,432,308
MGIC Investment Corp., Sr. Note, 6.000%, 3/15/2007		1,100,000		1,104,377
				3,536,685
Leasing — 0.8%
General Electric Capital Corp., 5.350%, 3/30/2006		1,000,000		1,000,479
Media — 1.2%
Cox Communications, Inc., 7.750%, 8/15/2006		1,500,000		1,514,639

(See Notes which are an integral part of the Financial Statements)

27

Marshall Funds

Short-Term Income Fund (continued)

Description	Principal Amount		Value
Corporate Bonds & Notes (continued)
Personal Credit — 3.7%
Ford Motor Credit Co., Sr. Note, 4.950%, 1/15/2008	$	2,300,000	$	2,119,740
General Motors Acceptance Corp., Note, 6.125%, 9/15/2006 (1)		2,600,000		2,568,909
				4,688,649
Real Estate — 3.7%
Duke Realty Corp., Note, 3.350%, 1/15/2008		1,500,000		1,446,293
Kimco Realty Corp., Note, Series MTN, 7.460%, 5/29/2007		1,700,000		1,745,125
Vornado Realty Trust, Bond, 5.625%, 6/15/2007		1,500,000		1,500,585
				4,692,003
Telecommunications — 0.5%
France Telecommunications, Note, 7.450%, 3/1/2006		570,000		570,000
Total Corporate Bonds & Notes (identified cost $46,544,682)				45,760,585
Government Agencies — 11.9%
Federal Home Loan Bank — 1.4%
Federal Home Loan Bank, 3.875%, 2/15/2008 (1)		1,800,000		1,766,704
Federal Home Loan Mortgage Company — 2.3%
Federal Home Loan Mortgage Company, Note, 4.300%, 5/5/2008 (1)		3,000,000		2,956,389
Federal National Mortgage Association — 8.2%
4.000%, 12/14/2007 (1)		3,500,000		3,443,261
4.125%, 6/16/2008 (1)		4,000,000		3,934,264
4.200%, 6/8/2009 (1)		3,000,000		2,933,028
				10,310,553
Total Government Agencies (identified cost $15,293,054)				15,033,646
Mortgage-Backed Securities —1.2%
Federal Home Loan Mortgage Corporation — 0.1%
9.000%, 7/1/2014		33,575		34,658
11.000%, 8/1/2019		66,099		71,159
				105,817
Federal National Mortgage Association — 1.0%
7.000%, 12/1/2015		224,510		231,689
7.500%, 9/1/2015		258,399		271,003
8.000%, 8/1/2007		308		312
8.000%, 5/1/2008		39,524		39,756
9.000%, 7/1/2009		37,655		39,207
9.500%, 12/1/2024		81,196		89,669
9.500%, 1/1/2025		78,313		86,485

Description	Principal Amount		Value
Mortgage-Backed Securities (continued)
Federal National Mortgage Association (continued)
9.500%, 1/1/2025	$	149,512	$	165,508
10.000%, 7/1/2020		102,054		112,869
11.000%, 12/1/2015		187,233		203,616
				1,240,114
Government National Mortgage Association — 0.1%
9.000%, 12/15/2019		80,091		86,943
Total Mortgage-Backed Securities (identified cost $1,405,358)				1,432,874
Mutual Funds — 9.5%
Eaton Vance Institutional Senior Loan Fund (11)		645,161		5,990,716
Fidelity Advisor Floating Rate High Income Fund (12)		603,622		6,024,145
Total Mutual Funds (identified cost $12,000,000)				12,014,861
Total Investments in Securities — 94.2% (identified cost $120,750,178)				118,573,005
Short-Term Investments — 21.1%
Collateral Pool Investment for Securities on Loan — 15.8% (See Note 2 of the Financial Statements)				19,887,358
Repurchase Agreement — 5.3%
Agreement with Morgan Stanley & Co., Inc., 4.56%, dated 2/28/2006, to be repurchased at $6,676,025 on 3/1/2006, collateralized by a U.S. Government Agency Obligation with a maturity of 6/16/2006, with a market value of $6,842,146 (at amortized cost)		6,675,179		6,675,179
Total Short-Term Investments (identified cost $26,562,537)				26,562,537
Total Investments — 115.3% (identified cost $147,312,715)				145,135,542
Other Assets and Liabilities — (15.3)%				(19,254,661	)
Total Net Assets — 100.0%			$	125,880,881

Portfolio Sector Allocations*
Sector	Fund
Asset-Backed Securities	8.4%
Collateralized Mortgage Obligations	26.8%
Corporate Bonds & Notes	36.4%
Government Agencies	11.9%
Mortgage-Backed Securities	1.2%
Mutual Funds	9.5%
Other Assets & Liabilities	5.8%
Total	100.0%

(See Notes which are an integral part of the Financial Statements)

28

February 28, 2006 (Unaudited)

Schedule of Investments

Government Money Market Fund

Description	Principal Amount		Value
Government Agencies — 27.0%
Federal Home Loan Bank — 13.9%
Federal Home Loan Bank, 2.400%, 3/17/2006	$	200,000	$	199,885
Federal Home Loan Bank, 2.060%, 4/24/2006		500,000		498,779
Federal Home Loan Bank, 1.950%, 4/28/2006		500,000		498,555
Federal Home Loan Bank, 2.750%, 5/15/2006		310,000		309,417
Federal Home Loan Bank, 4.396%, 4/4/2007 (4)		25,000,000		24,989,285
				26,495,921
Federal Home Loan Mortgage Corporation — 2.4%
Federal Home Loan Mortgage Corp., 2.375%, 4/15/2006		1,050,000		1,048,355
Federal Home Loan Mortgage Corp., 1.950%, 4/26/2006		500,000		498,645
Federal Home Loan Mortgage Corp., 3.830%, 6/20/2006		3,000,000		3,000,000
				4,547,000
Federal National Mortgage Association — 10.7%
Federal National Mortgage Association, 2.625%, 4/28/2006		500,000		499,178
Federal National Mortgage Association, 4.665%, 5/22/2006 (4)		10,000,000		9,999,539
Federal National Mortgage Association, 4.371%, 12/22/2006 (4)		10,000,000		9,993,576
				20,492,293
Total Government Agencies				51,535,214
Repurchase Agreements — 72.9%
Agreement with Barclay’s Capital, Inc., Tri-Party Agency, 4.560%, dated 2/28/2006, to be repurchased at $30,003,800 on 3/1/2006, collateralized by a U.S. Government Agency Mortgage Pools with a maturity of 11/17/2010, with a market value of $30,600,356		30,000,000		30,000,000
Agreement with Deutsche Bank Alex Brown, Inc., 4.570%, dated 2/28/2006, to be repurchased at $35,004,443 on 3/1/2006, collateralized by U.S. Government Agency Mortgage Pools with various maturities to 12/1/2035, with a market value of $35,700,001		35,000,000		35,000,000

Description	Principal Amount		Value
Repurchase Agreements (continued)
Agreement with Morgan Stanley & Co., Inc., 4.570%, dated 2/28/2006, to be repurchased at $34,004,316 on 3/1/2006, collateralized by U.S. Government Agency Mortgage Pools with various maturities to 1/1/2036, with a market value of $37,997,674	$	34,000,000	$	34,000,000
Agreement with State Street Bank & Trust Co., Inc., 4.280%, dated 2/28/2006, to be repurchased at $10,198,552 on 3/1/2006, collateralized by a U.S. Government Agency Obligation with a maturity of 4/30/2007, with a market value of $10,989,528		10,197,340		10,197,340
Agreement with Wachovia Capital, LLC, 4.560%, dated 2/28/2006, to be repurchased at $30,003,800 on 3/1/2006, collateralized by U.S. Government Agency Mortgage Pools with various maturities to 6/15/2012, with a market value of $30,600,726		30,000,000		30,000,000
Total Repurchase Agreements				139,197,340
Total Investments — 99.9% (at amortized cost)				190,732,554
Other Assets and Liabilities — 0.1%				195,641
Total Net Assets — 100.0%			$	190,928,195

Portfolio Sector Allocations*

Sector	Fund
Government Agencies	27.0%
Repurchase Agreements	72.9%
Other Assets & Liabilities	0.1%
Total	100.0%

Prime Money Market Fund

Description	Principal Amount		Value
Certificates of Deposit — 3.1%
Banks — 3.1%
Associated Bank, 4.600%, 4/3/2006	$	50,000,000	$	50,000,000
Associated Bank, 4.640%, 5/2/2006		50,000,000		50,000,000
First Tennessee Bank, (Series CD), 4.440%, 3/21/2006 (4)		20,500,000		20,499,535
Total Certificates of Deposit				120,499,535

(See Notes which are an integral part of the Financial Statements)

29

Marshall Funds

Prime Money Market Fund (continued)

Description	Principal Amount		Value
Collateralized Loan Agreements — 7.7%
Brokerage — 7.7%
Deutsche Bank Alex Brown, Inc., 4.623%, 3/1/2006	$	100,000,000	$	100,000,000
Morgan Stanley & Co., Inc., 4.623%, 3/1/2006		100,000,000		100,000,000
Wachovia Securities, Inc., 4.630%, 3/1/2006		100,000,000		100,000,000
Total Collateralized Loan Agreements				300,000,000
Commercial Paper — 18.8%
Asset-Backed — 10.1%
Beta Finance, Inc., 144A, 4.770%, 11/22/2006 (4)(7)(8)		50,000,000		50,008,350
Crown Point Capital Co., 144A, 4.440%, 3/13/2006 (7)(8)		50,377,000		50,302,442
Lexington Parker Cap. Co. LLC, 144A, 4.710%, 5/15/2006 (7)(8)		47,352,000		46,887,359
Liquid Funding Ltd., 144A, 4.420%, 6/7/2006 (4)(7)(8)		50,000,000		50,000,000
Liquid Funding Ltd., 144A, 4.610%, 10/26/2006 (4)(7)(8)		50,000,000		49,992,623
Mortgage Interest Networking Trust, 4.520%, 3/3/2006 (7)(8)		50,000,000		49,987,445
World Omni Vehicle Leasing, Inc., 144A, 4.570%, 3/22/2006 (7)(8)		50,000,000		49,866,708
World Omni Vehicle Leasing, Inc., 144A, 4.570%, 3/27/2006 (7)(8)		48,767,000		48,606,042
				395,650,969
Diversified — 3.8%
Liberty Light U.S. Capital, (Series MTN), 4.640%, 2/1/2007 (4)(7)(8)		50,000,000		49,991,229
Sigma Financial, Inc., 144A, 4.601%, 1/18/2007 (4)(7)(8)		100,000,000		100,019,863
				150,011,092
Foreign Banks — 3.6%
Britannia Building Society, 4.390%, 3/7/2006		15,000,000		14,989,025
Britannia Building Society, 4.510%, 3/22/2006		17,798,000		17,751,176
Britannia Building Society, 4.560%, 4/24/2006		14,000,000		13,904,240
Britannia Building Society, 4.685%, 5/15/2006		21,500,000		21,290,151
Britannia Building Society, 4.695%, 5/16/2006		23,500,000		23,267,076
Natexis Banques Populaires U.S. Finance Company, LLC, 4.470%, 4/11/2006		50,000,000		49,745,458
				140,947,126

Description	Principal Amount		Value
Commercial Paper (continued)
Insurance — 1.3%
Torchmark Corp., 4.540%, 3/15/2006	$	19,000,000	$	18,966,454
Torchmark Corp., 4.540%, 3/20/2006		10,000,000		9,976,039
Torchmark Corp., 4.550%, 3/10/2006		12,000,000		11,986,350
Torchmark Corp., 4.560%, 3/24/2006		10,000,000		9,970,867
				50,899,710
Total Commercial Paper				737,508,897
Corporate Bonds & Notes — 4.3%
Automotive — 1.8%
BMW U.S. Capital LLC, 144A, 4.149%, 6/7/2006 (7)(8)		70,000,000		70,062,211
Banks — 0.5%
Credit Suisse First Boston USA, Inc., (Series YCD), 4.810%, 12/5/2006		15,000,000		15,004,185
J.P. Morgan Securities, Inc., 5.350%, 3/1/2007		5,000,000		5,019,922
				20,024,107
Brokerage — 0.2%
Merrill Lynch & Co., Inc., (Series MTNB), 2.490%, 5/5/2006		8,775,000		8,755,413
Foreign Banks — 1.1%
HBOS Treasury Services, PLC, (Series YCD), 5.000%, 2/13/2007		25,000,000		25,000,000
Household Finance Corp., 5.750%, 1/30/2007		20,000,000		20,168,044
				45,168,044
Personal Credit — 0.3%
American Express Credit, (Series MTNB), 4.666%, 3/5/2007 (4)		10,000,000		10,010,022
Telecommunications — 0.4%
SBC Communications, 144A, 4.389%, 6/5/2006 (7)(8)		14,935,000		14,914,063
Total Corporate Bonds & Notes				168,933,860
Notes-Variable — 61.6%
Banks — 7.2%
Citigroup Global, (Series MTNA), 4.561%, 3/16/2007 (4)		51,000,000		51,053,215
First Tennessee Bank, 144A, 4.560%, 3/16/2007 (4)(7)(8)		45,000,000		45,000,000
National City Bank, (Series BKN1), 4.615%, 7/26/2006 (4)		50,000,000		50,000,833
SMM Trust, (Series 2006-M), 144A, 4.591%, 2/2/2007 (4)(7)(8)		8,536,000		8,536,000
Washington Mutual, Inc., (Series CD1), 4.499%, 7/26/2006 (4)		50,000,000		49,994,303

(See Notes which are an integral part of the Financial Statements)

30

February 28, 2006 (Unaudited)

Schedule of Investments

Prime Money Market Fund (continued)

Description	Principal Amount		Value
Notes-Variable (continued)
Banks (continued)
Washington Mutual, Inc., (Series CD1), 4.750%, 5/31/2006 (4)	$	50,000,000	$	50,000,000
Westpac Bank NY, (Series MTN), 4.490%, 1/11/2007 (4)		25,000,000		25,000,008
				279,584,359
Broker/Dealers — 13.2%
Bank of America Securities, LLC, 4.440%, 5/26/2006 (4)(7)(8)		100,000,000		100,000,000
Bear Stearns Master Note, 144A, 4.810%, 5/26/2006 (4)(7)(8)		100,000,000		100,000,000
Credit Suisse First Boston USA, Inc., (Series YCD), 4.572%, 7/19/2006 (4)		85,000,000		85,000,000
First Clearing, LLC, 4.670%, 3/6/2006 (4)(7)(8)		25,000,000		25,000,000
Goldman Sachs Group, Inc., (Series MTNB), 4.810%, 10/27/2006 (4)		100,000,000		100,125,651
Lehman Brothers, Inc., 4.660%, 2/22/2007 (4)		25,000,000		25,021,236
Merrill Lynch & Co., Inc., (Series MTN), 4.727%, 6/19/2006 (4)		10,000,000		10,007,028
Merrill Lynch & Co., Inc., (Series MTN5), 4.770%, 2/9/2007 (4)		20,000,000		20,000,000
Merrill Lynch & Co., Inc., (Series MTNB), 4.592%, 10/16/2006 (4)		29,000,000		29,037,863
Merrill Lynch & Co., Inc., (Series MTNB), 4.651%, 12/22/2006 (4)		5,150,000		5,155,906
Merrill Lynch & Co., Inc., (Series MTNB), 4.662%, 10/19/2006 (4)		15,000,000		15,007,723
				514,355,407
Foreign Banks — 12.7%
Bos Intl Australia Ltd., (Series EMTN), 4.547%, 3/17/2006 (4)		10,000,000		10,000,265
Calyon NY, (Series YCD), 5.000%, 2/12/2007		25,000,000		25,000,000
Dekabank, 144A, 4.602%, 8/15/2006 (4)(7)(8)		100,000,000		100,000,000
Depfa-Bank PLC, 4.501%, 10/15/2006 (4)(7)(8)		50,000,000		50,000,000
HBOS Treasury Services, PLC, 144A, (Series MTN), 4.840%, 12/20/2006 (4)(7)(8)		30,000,000		30,000,000
Household Finance Corp., 4.551%, 6/22/2006 (4)		80,000,000		80,019,786
Northern Rock PLC, 144A, 4.498%, 1/9/2007 (4)(7)(8)		50,000,000		50,000,000

Description	Principal Amount		Value
Notes-Variable (continued)
Foreign Banks (continued)
Northern Rock PLC, 144A, 4.651%, 10/20/2006 (4)(7)(8)	$	50,000,000	$	50,022,285
Westlb AG NY, 144A, 4.580%, 2/9/2007 (4)(7)(8)		100,000,000		100,000,000
				495,042,336
Financial Services — 1.0%
GE Capital Corp., (Series MTN), 4.670%, 2/16/2007 (4)		40,000,000		40,063,961
Industrial Services — 2.6%
Caterpillar Financial Services Corp., (Series MTNF), 4.580%, 4/7/2006 (4)		25,000,000		25,001,105
Caterpillar Financial Services Corp., (Series MTNF), 4.680%, 7/10/2006 (4)		75,000,000		75,000,000
				100,001,105
Insurance — 11.6%
American General Finance, (Series MTNH), 4.551%, 3/29/2006 (4)		61,225,000		61,228,034
Genworth Life Insurance, Co., 144A, 4.661%, 4/20/2006 (4)(7)		75,000,000		75,000,000
Jackson National Life Insurance Co., 144A, 4.845%, 2/12/2007 (4)(7)(8)		24,713,000		24,737,792
Metropolitan Life Insurance Co., 4.450%, 6/1/2006 (4)(7)		65,000,000		65,000,000
Monumental Life Insurance Co., 144A, 4.590%, 10/13/2006 (4)(7)		10,000,000		10,000,000
Monumental Life Insurance Co., 4.600%, 12/5/2006 (4)(7)		25,000,000		25,000,000
Monumental Life Insurance Co., 144A, 4.880%, 8/2/2006 (4)(7)		40,000,000		40,000,000
Pricoa Global Funding, Inc., 144A, 4.520%, 3/2/2007 (4)(7)(8)		74,065,000		74,147,577
Principal Life Insurance Co., 4.726%, 2/14/2007 (4)		27,157,000		27,155,678
Travelers Insurance Co., 144A, 4.730%, 2/1/2007 (4)(7)		50,000,000		50,000,000
				452,269,081
Mortgage Banking — 2.5%
Countrywide Home Loans, (Series MTNL), 4.550%, 9/13/2006 (4)		18,000,000		18,000,000
Countrywide Home Loans, (Series MTNL), 4.641%, 3/29/2006 (4)		45,500,000		45,501,503
Countrywide Home Loans, (Series MTNL), 4.970%, 8/25/2006 (4)		36,500,000		36,518,648
				100,020,151

(See Notes which are an integral part of the Financial Statements)

31

Marshall Funds

Prime Money Market Fund (continued)

Description	Principal Amount		Value
Notes-Variable (continued)
Personal Credit — 2.5%
American Honda Finance Corp., 144A, 4.600%, 10/18/2006 (4)(7)(8)	$	15,000,000	$	15,002,371
American Honda Finance Corp., 144A, 4.711%, 10/6/2006 (4)(7)(8)		40,000,000		40,047,317
American Honda Finance Corp., 144A, 4.760%, 5/10/2006 (4)(7)(8)		20,000,000		20,001,596
American Honda Finance Corp., 144A, 4.919%, 8/15/2006 (4)(7)(8)		25,000,000		25,022,336
				100,073,620
Short-Term Business Loans — 2.5%
CIT Group, Inc., (Series MTN), 4.702%, 4/19/2006 (4)		25,000,000		25,002,830
CIT Group, Inc., (Series MTN), 4.717%, 6/19/2006 (4)		7,300,000		7,304,044
CIT Group, Inc., (Series MTN), 4.750%, 5/12/2006 (4)		37,000,000		37,001,345
CIT Group, Inc., (Series MTN), 4.800%, 8/18/2006 (4)		30,000,000		30,003,352
				99,311,571
Student Loans — 2.6%
SLM Corp., 144A, (Series MTN), 4.620%, 3/2/2007 (4)(7)(8)		15,000,000		15,000,000
SLM Corp., (MTNA), 4.691%, 3/15/2006 (4)		20,000,000		20,001,918
SLM Corp., (Series MTNA), 4.691%, 9/15/2006 (4)		65,000,000		65,073,699
				100,075,617
Telecommunications — 1.9%
Verizon Global Funding, 144A, 4.601%, 1/12/2007 (4)(7)(8)		75,000,000		75,000,000
Toiletries — 1.3%
Procter & Gamble Co., 144A, 4.450%, 12/2/2006 (4)(7)(8)		50,000,000		50,000,000
Total Notes-Variable				2,405,797,208
Trust Demand Notes — 0.5%
Broker/Dealers — 0.5%
J.P. Morgan Securities, Inc., 144A, 4.880% (4)(7)(8)		20,000,000		20,000,000
Total Trust Demand Notes				20,000,000

Description	Principal Amount		Value
Repurchase Agreements — 3.1%
Agreement with State Street Bank & Trust Co., Inc., 4.28%, dated 2/28/2006 to be repurchased at $100,161,134 on 3/1/2006, collateralized by a U.S. Government Agency Obligation with a maturity of 12/31/2006, with a market value of $103,987,590	$	100,149,227	$	100,149,227
Agreement with Morgan Stanley & Co., Inc., 4.56%, dated 2/28/2006 to be repurchased at $21,002,660 on 3/1/2006, collateralized by a U.S. Government Agency Obligation with a maturity of 6/16/2006, with a market value of $21,517,268		21,000,000		21,000,000
Total Repurchase Agreements				121,149,227
Total Investments — 99.1% (at amortized cost)				3,873,888,727
Other Assets and Liabilities — 0.9%				34,046,430
Total Net Assets — 100.0%			$	3,907,935,157

Portfolio Sector Allocations*
Sector	Fund
Certificates of Deposit	3.1%
Collateralized Loan Agreements	7.7%
Commercial Paper	18.8%
Corporate Bonds & Notes	4.3%
Notes-Variable	61.6%
Repurchase Agreements	3.1%
Trust Demand Notes	0.5%
Other Assets & Liabilities	0.9%
Total	100.0%

(See Notes which are an integral part of the Financial Statements)

32

February 28, 2006 (Unaudited)

Schedule of Investments

Tax-Free Money Market Fund

Description	Principal Amount		Value
Municipals — 99.5%
Alabama — 5.4%
Columbia, Alabama Industrial Development Board Pollution Control, Revenue Bonds (Series D), 3.030%, 10/1/2022 (4)	$	1,000,000	$	1,000,000
Florence-Scs, Alabama Educational Building Authority, Revenue Bonds, 3.300%, 4/1/2017 (4)		820,000		820,000
Gardendale, Alabama Multifamily Housing, Revenue Bonds, 3.250%, 10/1/2032 (4)		745,000		745,000
Gardendale, Alabama Multifamily Housing, Revenue Bonds, 3.250%, 10/1/2032 (4)		1,000,000		1,000,000
Gardendale, Alabama Multifamily Housing, Revenue Bonds, 3.250%, 10/1/2032 (4)		1,284,000		1,284,000
Gardendale, Alabama Multifamily Housing, Revenue Bonds, 3.250%, 10/1/2032 (4)		3,000,000		3,000,000
Taylor-Ryan Impt District No. 2, Alabama, Revenue Bonds, 3.230%, 11/1/2035 (4)		5,000,000		5,000,000
University of South Alabama, Revenue Bonds, 3.220%, 3/15/2012 (4)		2,875,000		2,875,000
				15,724,000
Alaska — 0.0%
Alaska Industrial Development & Export Authority, Revenue Bonds, 3.700%, 7/1/2007 (4)		60,000		60,000
Arizona — 1.3%
Phoenix, Arizona Civic Improvement Corp., Revenue Bonds (Series Z-11), 3.250%, 5/8/2034 (4)		3,875,000		3,875,000
Colorado — 6.3%
Colorado Educational & Cultural Facilities Authority, Revenue Bonds, 3.190%, 9/1/2034 (4)		4,100,000		4,100,000
Colorado Housing & Finance Authority, Revenue Bonds (Series A-5), 3.430%, 1/3/2007		2,700,000		2,700,000
Denver, Colorado City & County, Certificate Participation, 3.190%, 12/1/2029 (4)		2,010,000		2,010,000
Denver, Colorado City & County Excise Tax, Revenue Bonds (Series B), 3.180%, 9/1/2025 (4)		3,125,000		3,125,000
Park Creek Metropolitan District, Revenue Bonds, 3.500%, 12/1/2037 (4)		6,500,000		6,500,000
				18,435,000

Description	Principal Amount		Value
Municipals (continued)
Connecticut — 0.9%
Connecticut State Health & Educational Facilities Authority, Revenue Bonds (Series C), 3.180%, 7/1/2032 (4)	$	1,090,000	$	1,090,000
Connecticut State Health & Educational Facilities Authority, Revenue Bonds (Series C), 3.190%, 7/1/2030 (4)		1,500,000		1,500,000
				2,590,000
Delaware — 1.5%
Delaware State Economic Development Authority, Revenue Bonds, 3.300%, 12/1/2032 (4)		4,300,000		4,300,000
District of Columbia — 2.8%
ABN AMRO Munitops Certificates Trust, Revenue Bonds, 144A, 3.230%, 4/1/2012 (4)(7)		8,345,000		8,345,000
Florida — 4.6%
Florida State Board of Education Lottery, Revenue Bonds (Series 222Z), 3.220%, 7/1/2017 (4)		3,000,000		3,000,000
Miami-Dade County, Florida Special Obligation, Revenue Bonds (Series Z-9), 3.250%, 4/17/2015 (4)		1,725,000		1,725,000
Miami-Dade County, Florida Special Obligation, Revenue Bonds (Series Z-12), 3.250%, 5/15/2015 (4)		3,530,000		3,530,000
Palm Beach County, Florida School District, Commercial Paper, 3.220%, 5/8/2006		3,000,000		3,000,000
Pinellas County, Florida Industrial Development Authority, Revenue Bonds, 3.240%, 7/1/2024 (4)		2,375,000		2,375,000
				13,630,000
Georgia — 3.3%
Albany-Dougherty County, Georgia Hospital Authority, Revenue Bonds, 3.230%, 9/1/2020 (4)		2,200,000		2,200,000
Bibb County, Georgia Development Authority, Revenue Bonds, 3.220%, 6/1/2026 (4)		630,000		630,000
Clayton County, Georgia Housing Authority, Multifamily Housing, Revenue Bonds, 3.240%, 1/1/2021 (4)		100,000		100,000
Clayton County, Georgia Housing Authority, Multifamily Housing, Revenue Bonds, 3.240%, 1/1/2021 (4)		565,000		565,000
Dahlonega, Georgia Downtown Development Authority, Student Housing, Revenue Bonds, 3.180%, 6/1/2028 (4)		3,225,000		3,225,000

(See Notes which are an integral part of the Financial Statements)

33

Marshall Funds

Tax-Free Money Market Fund (continued)

Description	Principal Amount		Value
Municipals (continued)
Georgia (continued)
De Kalb County, Georgia Development Authority, Revenue Bonds, 3.240%, 10/1/2022 (4)	$	1,055,000	$	1,055,000
Gainesville & Hall County Georgia Development Authority, Revenue Bonds, 3.030%, 11/15/2010 (4)		1,200,000		1,200,000
Gainesville & Hall County Georgia Development Authority, Revenue Bonds, 3.030%, 11/15/2033 (4)		600,000		600,000
				9,575,000
Hawaii — 1.4%
ABN AMRO Munitops Certificates Trust, GO UT, 3.230%, 7/1/2012 (4)		4,000,000		4,000,000
Illinois — 11.0%
Chicago, Illinois Tender Notes, 3.230%, 1/1/2028 (4)		2,720,000		2,720,000
Illinois Health Facilities Authority, Revenue Bonds (Series B), 3.230%, 11/15/2029 (4)		900,000		900,000
Lakemoor, Illinois Multifamily, Revenue Bonds (Series A), 3.330%, 12/1/2020 (4)		9,000,000		9,000,000
Lakemoor, Illinois Multifamily, Revenue Bonds (Series B), 3.420%, 12/1/2020 (4)		4,000,000		4,000,000
Metropolitan Pier & Exposition Authority, Revenue Bonds, 3.260%, 12/15/2021 (4)		2,345,000		2,345,000
Metropolitan Pier & Exposition Authority, Revenue Bonds, 3.260%, 6/15/2033 (4)		500,000		500,000
Metropolitan Pier & Exposition Authority, Revenue Bonds (Series Z-5), 3.260%, 4/3/2034 (4)		5,335,000		5,335,000
Metropolitan Pier & Exposition Authority, Revenue Bonds, 3.260%, 12/15/2036 (4)		1,500,000		1,500,000
Phoenix Realty SPL Account-U LP Illinois, Multifamily, Refunding Revenue Bonds, 3.400%, 4/1/2020 (4)		4,075,000		4,075,000
Will County, Illinois Community Unit School District No. 365, GO UT (Series Z-10), 3.250%, 4/15/2020 (4)		2,045,000		2,045,000
				32,420,000
Indiana — 2.5%
Dekko Foundation Educational Facilities Tax Exempt Income Trust, Certificates of Ownership (Series 1), 3.430%, 4/1/2021 (4)		200,000		200,000

Description	Principal Amount		Value
Municipals (continued)
Indiana (continued)
Goshen, Indiana Economic Development, Revenue Bonds, 3.230%, 10/1/2037 (4)	$	2,600,000	$	2,600,000
Indiana State Educational Facilities Authority, Revenue Bonds, 3.270%, 12/1/2029 (4)		200,000		200,000
Indianapolis, Indiana LOC Public Improvement Bd Bk, Revenue Bonds (Series Z-7), 3.250%, 9/9/2019 (4)		2,240,000		2,240,000
Indianapolis, Indiana LOC Public Improvement Bd Bk, Revenue Bonds, 3.260%, 2/1/2025 (4)		2,220,000		2,220,000
				7,460,000
Kentucky — 1.0%
Jefferson County, Kentucky Industrial Building Revenue, 3.280%, 3/1/2010 (4)		3,000,000		3,000,000
Louisiana — 4.8%
Jefferson, Louisiana Sales Tax District, Special Sales Tax Revenue Bonds (Series DB-156), 3.220%, 12/1/2020 (4)		6,385,000		6,385,000
Jefferson Parish, Louisiana Hospital Service District No. 2, Revenue Bonds, 3.270%, 7/1/2009 (4)		2,100,000		2,100,000
Lafayette Parish, Louisiana Industrial Development Board, Inc., Revenue Bonds, 3.430%, 12/15/2014 (4)		755,000		755,000
Louisiana Public Facilities Authority, Revenue Bonds, 3.210%, 9/1/2034 (4)		1,000,000		1,000,000
Louisiana State, GO UT, 3.140%, 10/15/2018 (4)		2,000,000		2,000,000
New Orleans, Louisiana, GO UT, 3.230%, 12/1/2015 (4)		2,000,000		2,000,000
				14,240,000
Maryland — 2.1%
Anne Arundel County, Maryland Economic, Revenue Bonds, 3.340%, 12/1/2015 (4)		2,500,000		2,500,000
Baltimore, Maryland Convention Center Hotel, Revenue Bonds (Series 1251), 3.220%, 3/1/2014 (4)		3,055,000		3,055,000
Washington Suburban Sanitary District, GO UT, 3.100%, 6/1/2023 (4)		500,000		500,000
				6,055,000
Massachusetts — 0.3%
Massachusetts State Industrial Financial Agency, Revenue Bonds, 3.200%, 12/1/2019 (4)		1,000,000		1,000,000

(See Notes which are an integral part of the Financial Statements)

34

February 28, 2006 (Unaudited)

Schedule of Investments

Tax-Free Money Market Fund (continued)

Description	Principal Amount		Value
Municipals (continued)
Michigan — 0.6%
Michigan Municipal Bond Authority, Revenue Bonds (Series C-A), Zero Coupon, 6/15/2006	$	1,700,000	$	1,683,816
Minnesota — 0.7%
Burnsville, Minnesota Housing, Revenue Bonds (Series A), 3.440%, 1/1/2045 (4)		2,000,000		2,000,000
Mississippi — 0.4%
Jackson, Mississippi Public School District, Revenue Bonds, 4.000%, 8/1/2006		1,150,000		1,153,552
Missouri — 0.5%
Kansas City, Missouri Municipal Assistance Corp., Revenue Bonds, 3.260%, 4/15/2031 (4)		1,500,000		1,500,000
Nebraska — 2.9%
Lancaster County, Nebraska Hospital Authority, Revenue Bonds (Series A), 3.010%, 7/1/2030 (4)		1,300,000		1,300,000
Nebraska Invt Finance Authority, Multifamily, Revenue Bonds, 5.400%, 2/1/2024		7,220,000		7,220,000
				8,520,000
Nevada — 0.4%
Nevada State (Series 344), GO UT, 3.240%, 5/15/2028 (4)		1,100,000		1,100,000
New Hampshire — 1.4%
New Hampshire Health & Educational Facilities Authority, Revenue Bonds, 3.250%, 10/1/2030 (4)		4,025,000		4,025,000
New York — 9.9%
Cayuga County, New York Hospital Improvement Corp., Certificate Participation, 3.250%, 1/1/2021 (4)		11,350,000		11,350,000
New York, New York, GO UT, 3.170%, 8/1/2029 (4)		2,475,000		2,475,000
New York, New York, GO UT, 3.170%, 8/15/2034 (4)		2,615,000		2,615,000
New York State Tollway Authority, Revenue Bonds (Series 1102), 3.220%, 7/1/2013 (4)		2,495,000		2,495,000
Suffolk County, New York Industrial Development Agency, Revenue Bonds, 3.200%, 4/1/2018 (4)		3,785,000		3,785,000
Tobacco Settlement Financing Corp., New York, Revenue Bonds, 3.000%, 8/12/2011 (4)		1,500,000		1,500,000

Description	Principal Amount		Value
Municipals (continued)
New York (continued)
Tobacco Settlement Financing Corp., New York, Revenue Bonds (Series 376), 3.220%, 6/1/2009 (4)	$	4,995,000	$	4,995,000
				29,215,000
North Carolina — 0.3%
North Carolina Medical Care Community Health Care Facilities, Revenue Bonds, 3.300%, 7/1/2017 (4)		935,000		935,000
Ohio — 6.5%
Cleveland, Ohio Waterworks, Revenue Bonds (Series L), 3.160%, 1/1/2033 (4)		500,000		500,000
Hamilton County, Ohio Hospital Facilities, Revenue Bonds, 3.270%, 7/15/2029 (4)		6,500,000		6,500,000
Lawrence County, Ohio Industrial Development, Revenue Bonds, 3.280%, 11/1/2011 (4)		1,100,000		1,100,000
Miami Trace, Ohio Local School District, GO UT, 4.000%, 7/18/2006		500,000		501,417
Miami Trace, Ohio Local School District, GO UT, 4.000%, 7/18/2006		1,500,000		1,503,940
Montgomery County, Ohio Industrial Development, Refunding Revenue Bonds, 3.280%, 10/1/2009 (4)		4,700,000		4,700,000
Ohio State Higher Educational Facility Commission, Revenue Bonds, 3.270%, 9/1/2026 (4)		4,290,000		4,290,000
				19,095,357
Oklahoma — 1.0%
Oklahoma State Industrial Authority, Revenue Bonds, 3.430%, 8/1/2018 (4)		1,875,000		1,875,000
Tulsa, Oklahoma Industrial Authority, Revenue Bonds, 3.360%, 11/1/2030 (4)		1,000,000		1,000,000
				2,875,000
Pennsylvania — 6.1%
Allegheny County, Pennsylvania Industrial Development Authority Health & Housing Facilities, Revenue Bonds, 3.280%, 7/1/2010 (4)		3,100,000		3,100,000
Bucks County, Pennsylvania Industrial Development Authority, Revenue Bonds, 3.300%, 9/1/2019 (4)		1,605,000		1,605,000
Montgomery County, Pennsylvania Industrial Development Authority, Commercial Paper, 3.150%, 3/14/2006		2,000,000		2,000,000

(See Notes which are an integral part of the Financial Statements)

35

Marshall Funds

Tax-Free Money Market Fund (continued)

Description	Principal Amount		Value
Municipals (continued)
Pennsylvania (continued)
Montgomery County, Pennsylvania Industrial Development Authority, Revenue Bonds, 3.020%, 11/15/2029 (4)	$	1,000,000	$	1,000,000
Philadelphia, Pennsylvania Authority for Industrial Development, Revenue Bonds, 3.210%, 12/1/2035 (4)		4,700,000		4,700,000
Schuylkill County, Pennsylvania Industrial Development Authority, Revenue Bonds, 3.020%, 12/1/2022 (4)		500,000		500,000
Schuylkill County, Pennsylvania Industrial Development Authority, Revenue Bonds, 3.210%, 4/1/2021 (4)		4,925,000		4,925,000
				17,830,000
Puerto Rico — 2.0%
JPMorgan Chase Bank NA, Enhancement Custodian, Revenue Bonds, 144A, 3.250%, 7/24/2006 (7)		4,000,000		4,000,000
Puerto Rico Industrial Medical & Environmental Pollution Control Facilities, Financing Authority, Revenue Bonds, 2.550%, 3/1/2023		2,000,000		2,000,980
				6,000,980
South Carolina — 1.1%
Piedmont Municipal Power Agency, South Carolina Electric, Revenue Bonds, 3.260%, 1/1/2032 (4)		940,000		940,000
South Carolina Jobs Economic Development Authority, Revenue Bonds, 4.000%, 11/1/2006		2,180,000		2,188,659
				3,128,659
Tennessee — 1.2%
Memphis, Tennessee Health, Educational, & Housing Facility Board, Revenue Bonds, 3.360%, 8/1/2032 (4)		800,000		800,000
Metropolitan Government, Nashville & Davidson County, Tennessee Industrial Development Board, Revenue Bonds, 3.130%, 12/1/2014 (4)		1,755,000		1,755,000
Rutherford County, Tennessee Industrial Development Board, Revenue Bonds, 3.280%, 7/1/2010 (4)		1,000,000		1,000,000
				3,555,000

Description	Principal Amount		Value
Municipals (continued)
Texas — 8.3%
ABN AMRO Munitops Certificates Trust, GO UT, 144A, 3.230%, 2/15/2013 (4)(7)	$	5,470,000	$	5,470,000
Collin County, Texas Housing Financial Corp. Multifamily, Revenue Bonds, 3.250%, 9/1/2018 (4)		8,145,000		8,145,000
Houston, Texas Airport, Revenue Bonds (Series 404), 3.250%, 7/1/2025 (4)		550,000		550,000
Northside, Texas Independent School District, GO UT, 2.850%, 6/15/2035 (4)		1,500,000		1,500,000
Sam Rayburn, Texas Municipal Power Agency, Revenue Bonds, 3.230%, 10/1/2021 (4)		6,565,000		6,565,000
Texas State Student Housing Authority, Revenue Bonds, 3.270%, 10/1/2033 (4)		1,695,000		1,695,000
Victoria, Texas Independent School District, GO UT, 3.220%, 2/15/2023 (4)		450,000		450,000
				24,375,000
Vermont — 0.8%
Vermont Educational & Health Buildings Financing Agency, Revenue Bonds, 3.250%, 4/1/2032 (4)		2,225,000		2,225,000
Virginia — 0.4%
Suffolk, Virginia Redevelopment & Housing Authority Multi-Family Housing, Revenue Bonds, 3.290%, 9/1/2019 (4)		1,105,000		1,105,000
Washington — 0.9%
Clark County, Washington School District Number 037, GO UT, 3.260%, 12/1/2020 (4)		1,000,000		1,000,000
Washington State Putters, GO UT, (Series 333), 3.250%, 12/1/2014 (4)		1,730,000		1,730,000
				2,730,000
Wisconsin — 3.6%
Campbell, Wisconsin Industrial Development, Revenue Bonds, 3.240%, 5/1/2020 (4)		1,410,000		1,410,000
Monroe, Wisconsin School District, Revenue Notes, 4.250%, 10/24/2006		1,500,000		1,509,870
Oshkosh, Wisconsin Area School District, GO UT, 4.000%, 8/29/2006		1,500,000		1,507,220
Verona, Wisconsin Area School District, Revenue Notes, 3.250%, 8/25/2006		1,000,000		1,000,947
Wisconsin Health & Educational Facilities, Authority Health Facilities, Revenue Bonds, 3.190%, 8/15/2034 (4)		3,625,000		3,625,000

(See Notes which are an integral part of the Financial Statements)

36

February 28, 2006 (Unaudited)

Schedule of Investments

Tax-Free Money Market Fund (continued)

Description	Principal Amount		Value
Municipals (continued)
Wisconsin (continued)
Wisconsin State Health & Educational Facilities Authority, Revenue Bonds, 3.200%, 8/15/2019 (4)	$	1,500,000	$	1,500,000
Wisconsin State Health & Educational Facilities Authority, Revenue Bonds, 3.430%, 5/1/2026 (4)		200,000		200,000
				10,753,037
Wyoming — 1.3%
Gillette, Wyoming Pollution Control, Revenue Bonds, 3.280%, 1/1/2018 (4)		3,850,000		3,850,000
Total Municipals				292,364,401
Mutual Funds — 0.0%
Federated Tax-Free Obligations Fund		97,743		97,743
Total Mutual Funds (identified cost $97,743)				97,743
Total Investments — 99.5% (at amortized cost)				292,462,144
Other Assets and Liabilities — 0.5%				1,432,088
Total Net Assets — 100.0%			$	293,894,232

Portfolio Sector Allocations*
Sector	Fund
Municipals	99.5%
Other Assets & Liabilities	0.5%
Total	100.0%

(See Notes which are an integral part of the Financial Statements)

37

Notes to Schedule of Investments

* Portfolio composition will change due to ongoing management of the Fund. The portfolio sector allocation percentages are based on net assets at the close of business on February 28, 2006 and may not necessarily reflect adjustments that are routinely made when presenting net assets for formal financial statement processes. Other assets and liabilities include short-term investments.

Note:  The categories of investments are shown as a percentage of total net assets for each Fund as of February 28, 2006.

(1) Certain shares or principal amounts are temporarily on loan to unaffiliated brokers-dealers.

(2) Non-income producing.

(3) Represents the initial deposit within a margin account used to ensure the Fund is able to satisfy the obligations of its outstanding long futures contracts.

(4) All variable, floating, and multi-coupon rate securities whose yields are either fixed or vary with a designated market index or market rate. These securities are shown at their current rates as of February 28, 2006.

(5) Securities held as collateral for dollar roll transactions.

(6) Denotes a security subject to dollar roll transactions and deemed a when-issued security.

(7) Denotes a restricted security which is subject to restrictions on resale under federal securities law. At February 28, 2006, these securities amounted to:

	Amount		% of Total Net Assets
Intermediate Bond	$	28,861,457	4.30	%
Short-Term Income		345,770	0.27
Prime Money Market		1,863,155,609	47.68
Tax-Free Money Market		17,815,000	6.06

(8) Denotes a restricted security which has been deemed liquid by criteria approved by the Fund’s Board of Directors.

(9) Please refer to the Statement of Additional Information for an explanation of the credit ratings.

(10) Securities that are subject to alternative minimum tax represent 7.55% of Intermediate Tax-Free Fund’s portfolio as calculated based upon total portfolio market value.

(11) Offshore fund.

(12) Securities have redemption features that may delay redemption beyond seven days.

The following acronyms are used throughout this report:

ADR —American Depositary Receipt

AMBAC—American Municipal Bond Assurance Corporation

CFC —Cooperative Finance Corporation

CIFG —CDC IXIS Financial Guaranty

COL —Collateralized

FGIC —Financial Guaranty Insurance Corporation

FRN —Floating Rate Note

GDR —Global Depository Receipt

GO —Government Obligation

HFDC —Health Facility Development Corporation

IDC —Industrial Development Corporation

INS —Insured

LIQ —Liquidity Agreement

LP —Limited Partnership

LOC —Letter of Credit

MTN —Medium Term Note

PCA —Pollution Control Authority

REITs —Real Estate Investment Trusts

REMIC —Real Estate Mortgage Investment Conduit

TCRs —Transferable Custody Receipts

TRANs —Tax and Revenue Anticipation Notes

UT —Unlimited Tax

VRNs —Variable Rate Notes

Fund	Cost of Investments for Federal Tax Purposes		Gross Unrealized Appreciation for Federal Tax Purposes		Gross Unrealized (Depreciation) for Federal Tax Purposes			Net Unrealized Appreciation (Depreciation) for Federal Tax Purposes
Large-Cap Value Fund	$	318,253,840	$	39,199,733	$	(5,094,603	)	$	34,105,130
Large-Cap Growth Fund		235,511,115		20,144,857		(7,076,455	)		13,068,392
Mid-Cap Value Fund		672,948,788		123,747,437		(18,415,724	)		105,331,713
Mid-Cap Growth Fund		183,720,200		32,814,445		(1,671,018	)		31,143,427
Small-Cap Growth Fund		195,204,389		44,908,250		(1,827,514	)		43,080,736
International Stock Fund		427,368,242		62,611,726		(5,451,259	)		57,160,467
Government Income Fund		880,004,774		2,433,296		(4,009,259	)		(1,575,963	)
Intermediate Bond Fund		887,793,757		1,603,144		(6,621,232	)		(5,018,088	)
Intermediate Tax-Free Fund		81,957,422		1,374,086		(324,911	)		1,049,175
Short-Term Income Fund		149,007,152		89,687		(3,961,297	)		(3,871,610	)
Government Money Market Fund*		190,732,553		—		—			—
Prime Money Market Fund*		3,873,888,727		—		—			—
Tax-Free Money Market Fund*		292,462,144		—		—			—

* at amortized cost

(See Notes which are an integral part of the Financial Statements)

38

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Six Months Ended February 28, 2006 (Unaudited)

Statements of Assets and Liabilities

	Large-Cap Value Fund			Large-Cap Growth Fund			Mid-Cap Value Fund			Mid-Cap Growth Fund			Small-Cap Growth Fund
Assets:
Investments in securities, at value	$	348,232,458	(1)	$	247,599,332	(1)	$	739,415,757	(1)	$	210,997,241	(1)	$	229,805,747	(1)
Investments in repurchase agreements		4,126,512			980,175			38,864,744			3,866,386			8,479,378
Cash		—			—			—			—			—
Cash denominated in foreign currencies (identified cost, $2,271,590)		—			—			—			—			—
Income receivable		780,025			315,799			755,718			47,005			20,549
Receivable for investments sold		—			48,585,345			906,354			1,388,546			4,259,527
Receivable for capital stock sold		1,357,311			3,709,644			2,005,496			3,228,438			345,578
Receivable for daily variation margin		—			—			—			—			—
Net receivable for foreign currency exchange contracts		—			—			—			—			—
Prepaid expenses		18,208			112,790			23,297			12,710			137,188
Total assets		354,514,514			301,303,085			781,971,366			219,540,326			243,047,967
Liabilities:
Payable for capital stock redeemed		292,330			30,883			205,844			121,707			53,098
Payable to bank		—			—			—			—			—
Payable for investments purchased		—			44,978,575			7,085,248			991,730			1,952,734
Payable on collateral due to broker		15,517,946			12,709,940			87,402,523			29,432,865			52,851,090
Call options written, at value (premium received $49,980)		33,940			—			—			—			—
Put options written, at value (proceeds received $44,598)		28,000			—			—			—			—
Payable for income distribution		—			—			—			—			—
Payable for dollar roll transactions		—			—			—			—			—
Payable to affiliates (Note 5)		289,852			260,538			579,563			159,479			292,011
Payable for portfolio accounting fees		18,593			14,658			30,957			12,167			12,124
Payable for transfer and dividend disbursing agent fees		21,273			43,670			11,252			26,922			29,465
Accrued expenses		10,224			31,610			32,793			4,973			8,376
Total liabilities		16,212,158			58,069,874			95,348,180			30,749,843			55,198,898
Total Net Assets	$	338,302,356		$	243,233,211		$	686,623,186		$	188,790,483		$	187,849,069
Net Assets Consist of:
Paid-in-capital	$	283,472,503		$	219,712,081		$	569,652,245		$	194,239,597		$	135,643,861
Net unrealized appreciation on investments, options, futures contracts and foreign currency translation		34,753,399			13,068,392			105,681,825			31,344,527			43,102,734
Accumulated net realized gain (loss) on investments, options, futures contracts and foreign currency transactions		19,010,365			10,469,931			11,120,216			(36,226,975	)		9,861,125
Undistributed net investment income (distributions in excess of net investment income)		1,066,089			(17,193	)		168,900			(566,666	)		(758,651	)
Total Net Assets	$	338,302,356		$	243,233,211		$	686,623,186		$	188,790,483		$	187,849,069
Net Asset Value, Offering Price and Redemption
Proceeds Per Share
Investor Class of Shares:
Net Asset Value, Offering Price and Redemption Proceeds Per Share	$	13.49		$	12.30		$	15.05		$	15.11		$	17.59
Advisor Class of Shares:
Net Asset Value and Redemption Proceeds Per Share	$	13.49		$	12.30		$	15.05		$	15.11		$	17.59
Offering Price Per Share	$	14.31	(2)	$	13.05	(2)	$	15.97	(2)	$	16.03	(2)	$	18.66	(2)
Institutional Class of Shares:
Net Asset Value, Offering Price and Redemption Proceeds Per Share	$	—		$	—		$	—		$	—		$	—
Net Assets:
Investor Class of Shares	$	326,025,673		$	234,248,644		$	673,376,328		$	183,740,749		$	180,723,384
Advisor Class of Shares		12,276,683			8,984,567			13,246,858			5,049,734			7,125,685
Institutional Class of Shares		—			—			—			—			—
Total Net Assets	$	338,302,356		$	243,233,211		$	686,623,186		$	188,790,483		$	187,849,069
Shares Outstanding:
Investor Class of Shares		24,159,724			19,050,275			44,755,678			12,158,802			10,277,044
Advisor Class of Shares		909,732			730,588			880,451			334,125			405,210
Institutional Class of Shares		—			—			—			—			—
Total Shares Outstanding		25,069,456			19,780,863			45,636,129			12,492,927			10,682,254
Investments, at identified cost	$	317,638,209		$	235,511,115		$	672,598,676		$	183,519,100		$	195,182,391

(1) Including $15,029,422, $12,309,813, $84,650,968, $28,506,279, $51,187,259, $89,738,226, $186,890,476, $196,938,379 and $19,261,277, respectively, of securities loaned.

(2) Computation of offering price per share 100/94.25 of net asset value.

(3) Computation of offering price per share 100/96.25 of net asset value.

(4) Computation of offering price per share 100/98.00 of net asset value.

(See Notes which are an integral part of the Financial Statements)

40

Marshall Funds

International Stock Fund			Government Income Fund			Intermediate Bond Fund			Intermediate Tax-Free Fund			Short-Term Income Fund			Government Money Market Fund		Prime Money Market Fund			Tax-Free Money Market Fund
$	475,025,895	(1)	$	822,524,198	(1)	$	832,229,099	(1)	$	83,006,597		$	138,460,363	(1)	$	51,535,214	$	3,752,739,500		$	292,462,144
	9,502,814			55,904,613			50,546,570			—			6,675,179			139,197,340		121,149,227			—
	—			—			—			—			—			—		—			—
	2,274,961			—			—			—			—			—		—			—
	417,355			2,701,780			5,386,334			917,168			969,682			390,449		19,286,430			1,367,336
	2,318,587			74,841,462			54,907,598			—			—			—		—			2,831,841
	3,242,542			1,518,072			4,468,197			634,440			184,075			—		26,112,924			—
	—			—			—			—			—			—		—			—
	—			—			—			—			—			—		—			—
	8,458			84,665			52,619			26,141			45,532			696		38,776			56,387
	492,790,612			957,574,790			947,590,417			84,584,346			146,334,831			191,123,699		3,919,326,857			296,717,708
	831,249			176,655			74,882			—			260,595			—		—			—
	—			—			—			—			—			—		—			—
	668,830			24,906,789			11,994,480			1,765,269			—			—		—			2,201,079
	92,655,140			192,965,297			203,339,798			—			19,887,358			—		—			—
	—			—			—			—			—			—		—			—
	—			—			—			—			—			—		—			—
	—			578,407			905,754			174,597			249,665			168,097		10,093,107			546,579
	—			198,340,714			60,039,620			—			—			—		—			—
	810,387			317,668			335,295			29,011			35,216			17,692		975,840			64,742
	30,953			26,258			29,977			3,789			9,088			7,947		71,752			11,076
	39,514			—			21,037			6,173			—			1,144		202,522			—
	94,479			10,384			10,297			7,025			12,028			624		48,479			—
	95,130,552			417,322,172			276,751,140			1,985,864			20,453,950			195,504		11,391,700			2,823,476
$	397,660,060		$	540,252,618		$	670,839,277		$	82,598,482		$	125,880,881		$	190,928,195	$	3,907,935,157		$	293,894,232
$	326,202,477		$	544,821,982		$	693,767,573		$	81,569,095		$	137,664,843		$	190,928,195	$	3,908,426,401		$	293,892,117
	57,515,017			(1,641,028	)		(5,101,801	)		1,016,937			(2,177,173	)		—		—			—
	14,877,505			(4,494,326	)		(19,804,804	)		(15,262	)		(9,221,585	)		—		(500,420	)		2,062
	(934,939)			1,565,990			1,978,309			27,712			(385,204	)		—		9,176			53
$	397,660,060		$	540,252,618		$	670,839,277		$	82,598,482		$	125,880,881		$	190,928,195	$	3,907,935,157		$	293,894,232
$	15.35		$	9.44		$	9.23		$	10.04		$	8.96		$	1.00	$	1.00		$	1.00
$	15.35		$	9.44		$	9.23		$	—		$	8.96		$	1.00	$	1.00		$	—
$	16.29	(2)	$	9.81	(3)	$	9.59	(3)	$	—		$	9.14	(4)	$	—	$	—		$	—
$	15.51		$	—		$	—		$	—		$	—		$	1.00	$	1.00		$	1.00
$	221,529,552		$	533,608,835		$	664,035,448		$	82,598,482		$	123,094,548		$	106,501,528	$	2,117,903,927		$	192,641,162
	6,551,342			6,643,783			6,803,829			—			2,786,333			—		83,172,141			—
	169,579,166			—			—			—			—			84,426,667		1,706,859,089			101,253,070
$	397,660,060		$	540,252,618		$	670,839,277		$	82,598,482		$	125,880,881		$	190,928,195	$	3,907,935,157		$	293,894,232
	14,434,266			56,546,895			71,932,333			8,224,856			13,741,684			106,501,528		2,118,198,329			192,640,443
	426,840			704,010			736,988			—			311,079			—		83,206,502			—
	10,931,509			—			—			—			—			84,426,667		1,707,021,571			101,251,674
	25,792,615			57,250,905			72,669,321			8,224,856			14,052,763			190,928,195		3,908,426,402			293,892,117
$	427,013,692		$	880,069,839		$	887,877,470		$	81,989,660		$	147,312,715		$	190,732,554	$	3,873,888,727		$	292,462,144

41

Six Months Ended February 28, 2006 (Unaudited)

Statements of Operations

	Large-Cap Value Fund			Large-Cap Growth Fund			Mid-Cap Value Fund			Mid-Cap Growth Fund			Small-Cap Growth Fund
Investment Income:
Interest income	$	55,376		$	54,911		$	475,788		$	128,566		$	178,748
Securities lending income		28,344			19,017			62,766			34,077			182,272
Dividend income		4,397,618			1,437,630			4,863,849			424,203	(2)		181,286
Total investment income		4,481,338			1,511,558			5,402,403			586,846			542,306
Expenses:
Investment adviser fee (Note 5)		1,251,746			907,794			2,454,386			665,314			843,400
Shareholder services fees (Note 5)—
Investor Class of Shares		402,397			291,540			802,335			215,765			202,798
Advisor Class of Shares		14,851			11,058			15,793			6,006			8,052
Institutional Class of Shares		—			—			—			—			—
Administrative fees (Note 5)		164,753			121,039			305,192			88,708			84,340
Portfolio accounting fees		56,882			44,958			91,932			36,133			34,823
Transfer and dividend disbursing agent fees		80,539			79,128			114,623			81,828			73,912
Custodian fees (Note 5)		29,087			24,207			45,123			17,742			16,868
Registration fees		9,046			10,707			10,824			8,949			8,516
Auditing fees		9,869			9,869			9,869			9,927			9,869
Legal fees		2,892			3,076			3,076			3,076			3,076
Printing and postage		12,542			16,079			31,283			11,958			8,280
Directors’ fees		6,648			6,645			6,647			6,651			6,651
Insurance premiums		4,203			3,022			5,718			2,151			1,618
Distribution services fees (Note 5)—
Advisor Class of Shares		4,923			3,671			5,128			1,975			2,571
Miscellaneous		5,876			5,626			4,827			3,739			2,971
Total		2,056,254			1,538,419			3,906,756			1,159,922			1,307,745
Deduct (Note 5)—
Waiver of investment adviser fee		—			—			—			—			—
Waiver of administrative fee		(10,491	)		(6,052	)		(18,596	)		(4,435	)		(4,217	)
Waiver of shareholder services fees—
Investor Class of Shares		—			—			—			—			—
Advisor Class of Shares		(4,923	)		(3,671	)		(5,128	)		(1,975	)		(2,571	)
Institutional Class of Shares		—			—			—			—			—
Total Waivers		(15,414	)		(9,723	)		(23,724	)		(6,410	)		(6,788	)
Net expenses		2,040,840			1,528,696			3,883,032			1,153,512			1,300,957
Net investment income (loss)		2,440,498			(17,138	)		1,519,371			(566,666	)		(758,651	)
Net Realized and Unrealized Gain (Loss) on Investments, Options, Futures Contracts and Foreign Currency:
Net realized gain (loss) on investment transactions and options		40,735,320			33,700,280			24,498,031			8,805,076			13,788,212
Net realized gain (loss) on futures contracts		—			—			260,785			305,802			671,448
Net realized loss on foreign currency contracts		—			—			—			—			—
Net change in unrealized appreciation/depreciation on investments, options, futures contracts and foreign currency translation		(18,379,299	)		(23,994,217	)		5,785,344			9,882,803			16,684,703
Net realized and unrealized gain (loss) on investments, options, futures contracts and foreign currency		22,356,021			9,706,063			30,544,160			18,993,681			31,144,363
Change in net assets resulting from operations	$	24,796,519		$	9,688,925		$	32,063,531		$	18,427,015		$	30,385,712

(1) Net of dollar roll expense of $2,585,180 and $742,674, respectively.

(2) Net of foreign taxes withheld of $844 and $89,985, respectively.

(3) Net of foreign taxes withheld of $47,553.

(See Notes which are an integral part of the Financial Statements)

42

Marshall Funds

International Stock Fund			Government Income Fund			Intermediate Bond Fund			Intermediate Tax-Free Fund			Short-Term Income Fund			Government Money Market Fund			Prime Money Market Fund			Tax-Free Money Market Fund
$	168,695		$	13,346,190	(1)	$	16,231,216	(1)	$	1,738,422		$	2,341,865		$	3,727,282		$	81,132,193		$	3,263,298
	114,561			258,099			126,570			—			6,186			—			—			—
	1,547,143	(2)		—			—			—			321,511			—			—			—
	1,830,399			13,604,289			16,357,786			1,738,422			2,669,562			3,727,282			81,132,193			3,263,298
	1,809,448			1,891,445			1,942,199			254,827			392,204			183,960			2,924,692			216,340
	251,953			622,279			800,680			106,178			159,958			133,498			2,636,487			209,071
	7,238			8,203			8,570			—			3,460			—			97,790			—
	—			—			—			—			—			—			—			—
	179,136			244,848			302,350			42,471			65,367			34,072			721,675			39,961
	61,536			76,904			91,328			12,741			29,131			27,706			214,557			26,610
	83,746			99,583			78,054			18,318			22,633			23,813			459,659			18,170
	117,484			37,617			44,767			8,494			13,073			18,334			207,377			21,253
	6,957			20,995			12,153			8,090			9,756			31,920			42,234			5,216
	14,566			9,031			9,031			9,031			9,030			11,437			7,900			3,711
	2,757			2,454			2,702			2,701			2,701			1,702			2,699			2,172
	17,498			11,469			5,804			1,890			2,823			3,589			31,866			1,679
	6,596			6,588			6,588			6,589			6,586			6,123			6,281			6,586
	6,990			4,742			6,686			1,031			1,668			1,763			38,724			993
	7,238			2,737			2,938			—			1,176			—			117,348			—
	7,680			7,825			9,755			5,347			10,481			5,580			36,013			2,303
	2,580,823			3,046,720			3,323,605			477,708			730,047			483,497			7,545,302			554,065
	(34,712	)		(252,193	)		(194,220	)		(114,672	)		(222,249	)		(165,385	)		(779,918	)		(127,352	)
	(11,968	)		(18,398	)		(18,596	)		(2,124	)		(3,268	)		(797	)		(16,867	)		(932	)
	—			(572,497	)		(736,626	)		(97,684	)		(147,162	)		—			—			—
	(7,238	)		(2,737	)		(2,938	)		—			(1,176	)		—			—			—
	—			—			—			—			—			—			—			—
	(53,918	)		(845,825	)		(952,380	)		(214,480	)		(373,855	)		(166,182	)		(796,785	)		(128,284	)
	2,526,905			2,200,895			2,371,225			263,228			356,192			317,315			6,748,517			425,781
	(696,506	)		11,403,394			13,986,561			1,475,194			2,313,370			3,409,967			74,383,676			2,837,517
	53,859,174	(3)		(2,352,341	)		(4,885,258	)		111,220			3,903			—			(51,696	)		10,402
	—			—			—			—			—			—			—			—
	(465,941	)		—			—			—			—			—			—			—
	1,568,935			(6,288,167	)		(7,149,432	)		(1,277,739	)		(715,834	)		—			—			—
	54,962,168			(8,640,508	)		(12,034,690	)		(1,166,519	)		(711,931	)		—			(51,696	)		10,402
$	54,265,662		$	2,762,886		$	1,951,871		$	308,675		$	1,601,439		$	3,409,967		$	74,331,980		$	2,847,919

43

Statements of Changes in Net Assets

	Large-Cap Value Fund						Large-Cap Growth Fund
	Six Months Ended February 28, 2006 (Unaudited)			Year Ended August 31, 2005			Six Months Ended February 28, 2006 (Unaudited)			Year Ended August 31, 2005
Increase (Decrease) in Net Assets
Operations—
Net investment income (loss)	$	2,440,498		$	8,176,106		$	(17,138	)	$	1,613,665
Net realized gain (loss) on investment transactions and options		40,735,320			23,570,751			33,700,280			29,955,991
Net realized gain (loss) on futures contracts		—			—			—			87,794
Net realized gain (loss) on foreign currency contracts		—			—			—			—
Net change in unrealized appreciation/depreciation on investments, options, futures contracts and foreign currency translation		(18,379,299	)		1,495,058			(23,994,217	)		1,357,532
Change in net assets resulting from operations		24,796,519			33,241,915			9,688,925			33,014,982
Distributions to Shareholders—
Distributions to shareholders from net investment income
Investor Class of Shares		(2,278,776	)		(8,600,689	)		(274,807	)		(1,784,677	)
Advisor Class of Shares		(83,803	)		(273,887	)		(10,487	)		(60,788	)
Institutional Class of Shares		—			—			—			—
Distributions to shareholders from net realized gain on investments
Investor Class of Shares		(41,137,284	)		(17,406,313	)		(31,496,880	)		—
Advisor Class of Shares		(1,526,618	)		(533,830	)		(1,201,535	)		—
Institutional Class of Shares		—			—			—			—
Change in net assets resulting from distributions to shareholders		(45,026,481	)		(26,814,719	)		(32,983,709	)		(1,845,465	)
Capital Stock Transactions—
Proceeds from sale of shares		12,221,949			28,445,249			9,935,121			17,505,093
Net asset value of shares issued to shareholders in payment of distributions declared		43,214,883			22,317,700			32,278,123			1,239,705
Cost of shares redeemed		(37,670,899	)		(85,033,510	)		(21,775,234	)		(69,634,808	)
Redemption fees		140			681			199			512
Change in net assets resulting from capital stock transactions		17,766,073			(34,269,880	)		20,438,209			(50,889,498	)
Change in net assets		(2,463,889	)		(27,842,684	)		(2,856,575	)		(19,719,981	)
Net Assets:
Beginning of period		340,766,245			368,608,929			246,089,786			265,809,767
End of period	$	338,302,356		$	340,766,245		$	243,233,211		$	246,089,786
Undistributed net investment income (distributions in excess of net investment income) included in net assets at end of period	$	1,066,089		$	988,170		$	(17,193	)	$	285,239

(See Notes which are an integral part of the Financial Statements)

44

Marshall Funds

Mid-Cap Value Fund						Mid-Cap Growth Fund						Small-Cap Growth Fund						International Stock Fund
Six Months Ended February 28, 2006 (Unaudited)			Year Ended August 31, 2005			Six Months Ended February 28, 2006 (Unaudited)			Year Ended August 31, 2005			Six Months Ended February 28, 2006 (Unaudited)			Year Ended August 31, 2005			Six Months Ended February 28, 2006 (Unaudited)			Year Ended August 31, 2005
$	1,519,371		$	1,441,208		$	(566,666	)	$	(1,324,070	)	$	(758,651	)	$	(1,854,322	)	$	(696,506	)	$	3,795,894
	24,498,031			54,501,720			8,805,076			23,363,165			13,788,212			11,321,080			53,859,174			58,410,768
	260,785			1,945,332			305,802			606,626			671,448			472,396			—			—
	—			—			—			—			—			—			(465,941	)		(1,700,636	)
	5,785,344			37,615,947			9,882,803			15,714,289			16,684,703			25,631,554			1,568,935			31,379,173
	32,063,531			95,504,207			18,427,015			38,360,010			30,385,712			35,570,708			54,265,662			91,885,199
	(2,131,338	)		(2,172,992	)		—			—			—			—			(1,630,652	)		(1,270,574	)
	(42,247	)		(41,606	)		—			—			—			—			(45,793	)		(28,611	)
	—			—			—			—			—			—			(1,583,456	)		(1,325,794	)
	(60,368,022	)		(32,166,898	)		—			—			(12,952,104	)		—			—			—
	(1,209,654	)		(594,236	)		—			—			(527,827	)		—			—			—
	—			—			—			—			—			—			—			—
	(63,751,261	)		(34,975,732	)		—			—			(13,479,931	)		—			(3,259,901	)		(2,624,979	)
	57,379,713			146,768,005			10,328,000			16,651,326			11,651,959			22,523,133			40,853,316			75,193,217
	62,159,936			33,920,383			—			—			13,131,470			—			2,476,313			1,966,320
	(51,024,831	)		(62,993,198	)		(16,884,767	)		(66,933,633	)		(15,340,127	)		(31,327,235	)		(61,527,089	)		(264,200,728	)
	6,278			5,443			70			523			306			734			945			5,428
	68,521,096			117,700,633			(6,556,697	)		(50,281,784	)		9,443,608			(8,803,368	)		(18,196,515	)		(187,035,763	)
	36,833,366			178,229,108			11,870,318			(11,921,774	)		26,349,389			26,767,340			32,809,246			(97,775,543	)
	649,789,820			471,560,712			176,920,165			188,841,939			161,499,680			134,732,340			364,850,814			462,626,357
$	686,623,186		$	649,789,820		$	188,790,483		$	176,920,165		$	187,849,069		$	161,499,680		$	397,660,060		$	364,850,814
$	168,900		$	823,114		$	(566,666	)	$	—		$	(758,651	)	$	—		$	(934,939	)	$	3,021,468

45

Statements of Changes in Net Assets

	Government Income Fund						Intermediate Bond Fund
	Six Months Ended February 28, 2006 (Unaudited)			Year Ended August 31, 2005			Six Months Ended February 28, 2006 (Unaudited)			Year Ended August 31, 2005
Increase (Decrease) in Net Assets
Operations—
Net investment income (loss)	$	11,403,394		$	15,064,952		$	13,986,561		$	23,447,343
Net realized gain (loss) on investment transactions and options		(2,352,341	)		3,602,480			(4,885,258	)		423,579
Net realized gain (loss) on futures contracts		—			—			—			—
Net realized gain (loss) on foreign currency contracts		—			—			—			—
Net change in unrealized appreciation/depreciation on investments, options, futures contracts and foreign currency translation		(6,288,167	)		(4,212,066	)		(7,149,432	)		(5,475,618	)
Change in net assets resulting from operations		2,762,886			14,455,366			1,951,871			18,395,304
Distributions to Shareholders—
Distributions to shareholders from net investment income
Investor Class of Shares		(11,055,124	)		(15,616,752	)		(13,694,456	)		(24,618,631	)
Advisor Class of Shares		(137,394	)		(223,191	)		(138,542	)		(261,016	)
Institutional Class of Shares		—			—			—			—
Distributions to shareholders from net realized gain on investments
Investor Class of Shares		—			—			—			—
Advisor Class of Shares		—			—			—			—
Institutional Class of Shares		—			—			—			—
Change in net assets resulting from distributions to shareholders		(11,192,518	)		(15,839,943	)		(13,832,998	)		(24,879,647	)
Capital Stock Transactions—
Proceeds from sale of shares		99,736,772			172,498,659			57,854,906			95,921,548
Net asset value of shares issued to shareholders in payment of distributions declared		7,729,518			10,065,417			8,397,391			14,342,634
Cost of shares redeemed		(41,239,288	)		(48,585,491	)		(37,617,981	)		(82,472,367	)
Redemption fees		16,317			13,528			2,751			2,279
Change in net assets resulting from capital stock transactions		66,243,319			133,992,113			28,637,067			27,794,094
Change in net assets		57,813,687			132,607,536			16,755,940			21,309,751
Net Assets:
Beginning of period		482,438,931			349,831,395			654,083,337			632,773,586
End of period	$	540,252,618		$	482,438,931		$	670,839,277		$	654,083,337
Undistributed net investment income (distributions in excess of net investment income) included in net assets at end of period	$	1,565,990		$	692,287		$	1,978,309		$	496,573

(1) Commenced operations on September 22, 2004.

(See Notes which are an integral part of the Financial Statements)

46

Marshall Funds

Intermediate Tax-Free Fund						Short-Term Income Fund						Government Money Market Fund						Prime Money Market Fund						Tax-Free Money Market Fund
Six Months Ended February 28, 2006 (Unaudited)			Year Ended August 31, 2005			Six Months Ended February 28, 2006 (Unaudited)			Year Ended August 31, 2005			Six Months Ended February 28, 2006 (Unaudited)			Year Ended August 31, 2005			Six Months Ended February 28, 2006 (Unaudited)			Year Ended August 31, 2005			Six Months Ended February 28, 2006 (Unaudited)			Year Ended August 31, 2005(1)
$	1,475,194		$	3,230,429		$	2,313,370		$	4,437,445		$	3,409,967		$	3,954,318		$	74,383,676		$	80,150,986		$	2,837,517		$	2,110,311
	111,220			1,551,462			3,903			(77,260	)		—			—			(51,696	)		6,471			10,402			—
	—			—			—			—			—			—			—			—			—			—
	—			—			—			—			—			—			—			—			—			—
	(1,277,739	)		(3,090,710	)		(715,834	)		(1,819,798	)		—			—			—			—			—			—
	308,675			1,691,181			1,601,439			2,540,387			3,409,967			3,954,318			74,331,980			80,157,457			2,847,919			2,110,311
	(1,445,288	)		(3,228,761	)		(2,675,984	)		(5,449,947	)		(1,908,106	)		(2,355,328	)		(39,138,605	)		(45,887,493	)		(2,121,285	)		(2,019,005	)
	—			—			(54,211	)		(98,994	)		—			—			(1,335,623	)		(1,580,750	)		—			—
	—			—			—			—			(1,501,861	)		(1,598,990	)		(33,909,448	)		(32,682,743	)		(716,233	)		(91,252	)
	(2,148,867	)		(49,146	)		—			—			—			—			—			—			(1,677	)		—
	—			—			—			—			—			—			—			—			(6,663	)		—
	—			—			—			—			—			—			—			—			—			—
	(3,594,155	)		(3,277,907	)		(2,730,195	)		(5,548,941	)		(3,409,967	)		(3,954,318	)		(74,383,676	)		(80,150,986	)		(2,845,858	)		(2,110,257	)
	12,044,827			12,130,236			7,464,818			30,460,670			1,590,551,571			3,090,240,254			7,948,652,703			13,537,482,744			400,521,934			573,350,458
	2,323,387			465,638			1,113,141			2,242,778			2,717,618			2,851,886			17,119,401			19,917,654			649,746			462,243
	(19,103,502	)		(17,342,348	)		(20,254,092	)		(42,658,748	)		(1,561,425,224	)		(3,116,620,951	)		(7,762,897,493	)		(13,592,936,840	)		(274,316,428	)		(406,775,836	)
	—			—			45			658			—			—			—			—			—			—
	(4,735,288	)		(4,746,474	)		(11,676,088	)		(9,954,642	)		31,843,965			(23,528,811	)		202,874,611			(35,536,442	)		126,855,252			167,036,865
	(8,020,768	)		(6,333,200	)		(12,804,844	)		(12,963,196	)		31,843,965			(23,528,811	)		202,822,915			(35,529,971	)		126,857,313			167,036,919
	90,619,250			96,952,450			138,685,725			151,648,921			159,084,230			182,613,041			3,705,112,242			3,740,642,213			167,036,919			—
$	82,598,482		$	90,619,250		$	125,880,881		$	138,685,725		$	190,928,195		$	159,084,230		$	3,907,935,157		$	3,705,112,242		$	293,894,232		$	167,036,919
$	27,712		$	(525	)	$	(385,204	)	$	31,621		$	—		$	—		$	9,176		$	9,176		$	53		$	54

47

Statement of Cash Flows

	Government Income Fund
	Six Months Ended February 28, 2006 (Unaudited)
Increase (Decrease) in Cash
Cash Flows from Operating Activities
Change in net assets resulting from operations	$	2,762,886
Adjustments to Reconcile Change in Net Assets Resulting from Operations to Net Cash Used in Operating Activities:
Purchases of investment securities		(1,881,962,308	)
Paydown on investment securities		38,747,200
Realized gain on paydowns		(73,648	)
Proceeds from sale of investment securities		1,682,484,352
Net purchases of short term investment securities		33,420,755
Increase in income receivable		(921,509	)
Increase in payable on collateral due to broker		78,877,110
Increase in payable to affiliates		9,594
Increase in accrued expenses		(84,665	)
Decrease in receivable for investments sold		(74,841,462	)
Increase in payable for investments purchased		(61,386,279	)
Net realized loss on investments		2,441,020
Net amortization/accretion of premium/discount		859,908
Net unrealized depreciation on investments		6,154,743
Net cash used in operating activities		(173,512,303	)
Cash Flows from Financing Activities
Cash received from dollar roll transactions, net		117,641,684
Proceeds from sale of shares		100,355,793
Cash distributions paid		(3,351,093	)
Payment of shares redeemed		(41,134,081	)
Net cash provided in financing activities		173,512,303
Net change in cash		—
Cash:
Beginning of period		—
End of period	$	—

Supplemental disclosure of cash flow information. Non-cash financing not included herein consists of reinvestment of dividend and distributions of $7,729,518.

(See Notes which are an integral part of the Financial Statements)

48

Financial Highlights—Advisor Class of Shares (For a share outstanding throughout each period)

Period Ended August 31,	Net asset value, beginning of period		Net investment income (loss)		Net realized and unrealized gain (loss) on investments, options, futures contracts and foreign currency		Total from investment operations		Dividends to shareholders from net investment income		Distributions to shareholders from net realized gain on investments, options, futures contracts and foreign currency		Total distributions		Net asset value, end of period		Total return(1)		Ratios to Average Net Assets						Net assets, end of, period (000 omitted)		Portfolio turnover rate
																			Expenses		Net investment income (loss)		Expense waiver(2)
Large-Cap Value Fund
2001	$	14.62	0.16		0.16		0.32		(0.14	)	(0.10	)	(0.24	)	$	14.70	2.20	%	1.19	%	1.09	%	0.25	%	$	3,628	78	%
2002(3)	$	14.70	0.14		(1.99	)	(1.85	)	(0.18	)	(0.55	)	(0.73	)	$	12.12	(13.16	)%	1.20	%	1.30	%	0.25	%	$	4,360	50	%
2003(3)	$	12.12	0.24		0.42		0.66		(0.20	)	—		(0.20	)	$	12.58	5.56	%	1.23	%	2.03	%	0.25	%	$	5,757	62	%
2004(3)	$	12.58	0.30		1.62		1.92		(0.30	)	—		(0.30	)	$	14.20	15.39	%	1.22	%	2.30	%	0.25	%	$	10,255	103	%
2005(3)	$	14.20	0.32		1.01		1.33		(0.35	)	(0.72	)	(1.07	)	$	14.46	9.77	%	1.22	%	2.30	%	0.25	%	$	11,918	103	%
2006(9)	$	14.46	0.10		0.91		1.01		(0.10	)	(1.88	)	(1.98	)	$	13.49	7.58	%(8)	1.22	%(7)	1.46	%(7)	0.09	%(7)	$	12,277	89	%
Large-Cap Growth Fund
2001	$	19.22	0.01		(4.66	)	(4.65	)	(0.01	)	(0.81	)	(0.82	)	$	13.75	(24.79	)%	1.19	%	0.05	%	0.25	%	$	4,771	63	%
2002(3)	$	13.75	0.01		(3.16	)	(3.15	)	(0.01	)	—		(0.01	)	$	10.59	(22.94	)%	1.21	%	0.01	%	0.25	%	$	4,964	62	%
2003(3)	$	10.59	0.04		0.71		0.75		(0.02	)	—		(0.02	)	$	11.32	7.11	%	1.28	%	0.37	%	0.25	%	$	6,349	73	%
2004(3)	$	11.32	0.02		0.78		0.80		(0.02	)	—		(0.02	)	$	12.10	7.08	%	1.25	%	0.20	%	0.25	%	$	8,126	129	%
2005(3)	$	12.10	0.08		1.55		1.63		(0.09	)	—		(0.09	)	$	13.64	13.51	%	1.26	%	0.63	%	0.25	%	$	8,796	146	%
2006(9)	$	13.64	0.07		0.47		0.54		(0.01	)	(1.87	)	(1.88	)	$	12.30	4.05	%(8)	1.26	%(7)	1.25	%(7)	0.09	%(7)	$	8,985	117	%
Mid-Cap Value Fund
2001	$	10.85	0.02		2.62		2.64		(0.07	)	(0.70	)	(0.77	)	$	12.72	25.80	%	1.30	%	0.17	%	0.25	%	$	2,288	104	%
2002(3)	$	12.72	0.02		(0.40	)	(0.38	)	(0.01	)	(1.68	)	(1.69	)	$	10.65	(4.25	)%	1.26	%	0.13	%	0.25	%	$	3,956	44	%
2003(3)	$	10.65	0.01		1.86		1.87		(0.01	)	—		(0.01	)	$	12.51	17.63	%	1.27	%	0.13	%	0.25	%	$	5,428	39	%
2004(3)	$	12.51	0.05		2.14		2.19		(0.01	)	(0.45	)	(0.46	)	$	14.24	17.76	%	1.22	%	0.42	%	0.25	%	$	8,456	33	%
2005(3)	$	14.24	0.03		2.61		2.64		(0.06	)	(0.96	)	(1.02	)	$	15.86	19.16	%	1.20	%	0.25	%	0.25	%	$	12,497	37	%
2006(9)	$	15.86	0.03		0.71		0.74		(0.05	)	(1.50	)	(1.55	)	$	15.05	4.91	%(8)	1.19	%(7)	0.46	%(7)	0.09	%(7)	$	13,247	36	%
Mid-Cap Growth Fund
2001	$	27.43	(0.06	)(4)	(8.67	)	(8.73	)	—		(4.97	)	(4.97	)	$	13.73	(34.17	)%	1.19	%	(0.39	)%	0.25	%	$	3,051	118	%
2002(3)	$	13.73	(0.09	)(4)	(4.29	)	(4.38	)	—		(0.04	)	(0.04	)	$	9.31	(32.01	)%	1.24	%	(0.73	)%	0.25	%	$	2,596	167	%
2003(3)	$	9.31	(0.08	)(4)	2.34		2.26		—		—		—		$	11.57	24.27	%	1.28	%	(0.79	)%	0.25	%	$	3,663	121	%
2004(3)	$	11.57	(0.10	)(4)	(0.32	)	(0.42	)	—		—		—		$	11.15	(3.63	)%	1.24	%	(0.84	)%	0.25	%	$	4,209	240	%
2005(3)	$	11.15	(0.10	)	2.60		2.50		—		—		—		$	13.65	22.42	%	1.29	%	(0.72	)%	0.26	%	$	4,784	188	%
2006(9)	$	13.65	(0.05	)	1.51		1.46		—		—		—		$	15.11	10.70	%(8)	1.30	%(7)	(0.64	)%(7)	0.09	%(7)	$	5,050	72	%
Small-Cap Growth Fund
2001	$	18.82	(0.08	)(4)	(4.52	)	(4.60	)	—		(1.63	)	(1.63	)	$	12.59	(24.23	)%	1.58	%	(0.70	)%	0.25	%	$	2,399	287	%
2002(3)	$	12.59	(0.14	)(4)	(3.12	)	(3.26	)	—		(0.58	)	(0.58	)	$	8.75	(27.23	)%	1.63	%	(1.21	)%	0.25	%	$	2,440	292	%
2003(3)	$	8.75	(0.07	)(4)	3.15		3.08		—		—		—		$	11.83	35.20	%	1.72	%	(0.76	)%	0.25	%	$	3,763	248	%
2004(3)	$	11.83	(0.17	)(4)	0.94		0.77		—		—		—		$	12.60	6.51	%	1.58	%	(1.29	)%	0.25	%	$	4,857	267	%
2005(3)	$	12.60	(0.18	)	3.60		3.42		—		—		—		$	16.02	27.14	%	1.55	%	(1.21	)%	0.26	%	$	6,173	195	%
2006(9)	$	16.02	(0.07	)	3.01		2.94		—		(1.37	)	(1.37	)	$	17.59	19.16	%(8)	1.54	%(7)	(0.90	)%(7)	0.08	%(7)	$	7,126	77	%
International Stock Fund
2001	$	16.33	0.04	(4)	(4.03	)	(3.99	)	—		(1.61	)	(1.61	)	$	10.73	(26.36	)%	1.46	%	0.34	%	0.27	%	$	3,555	156	%
2002(3)	$	10.73	0.03	(4)	(1.46	)	(1.43	)	—		—		—		$	9.30	(13.33	)%	1.49	%	0.30	%	0.27	%	$	4,183	83	%
2003(3)	$	9.30	0.05	(4)	0.66		0.71		—		—		—		$	10.01	7.63	%	1.54	%	0.59	%	0.27	%	$	3,735	171	%
2004(3)	$	10.01	0.00	(4)	1.03		1.03		(0.04	)	—		(0.04	)	$	11.00	10.28	%	1.50	%	0.03	%	0.27	%	$	4,455	137	%
2005(3)	$	11.00	0.09		2.33		2.42		(0.07	)	—		(0.07	)	$	13.35	22.03	%	1.48	%	0.70	%	0.27	%	$	5,449	150	%
2006(9)	$	13.35	(0.03	)	2.15		2.12		(0.12	)	—		(0.12	)	$	15.35	15.90	%(8)	1.50	%(7)	(0.49	)%(7)	0.28	%(7)	$	6,551	85	%
Government Income Fund
2001	$	9.20	0.55		0.33		0.88		(0.55	)	—		(0.55	)	$	9.53	9.77	%	1.10	%	5.81	%	0.35	%	$	2,451	122	%
2002(3)	$	9.53	0.47	(4)(5)	0.20	(5)	0.67		(0.48	)	—		(0.48	)	$	9.72	7.25	%	1.10	%	4.90	%(5)	0.35	%	$	3,839	76	%
2003(3)	$	9.72	0.30	(4)	(0.09	)	0.21		(0.33	)	—		(0.33	)	$	9.60	2.22	%	1.10	%	3.06	%	0.35	%	$	4,615	539	%
2004(3)	$	9.60	0.41	(4)	0.08		0.49		(0.45	)	—		(0.45	)	$	9.64	5.26	%	1.10	%	4.30	%	0.35	%	$	5,579	113	%
2005(3)	$	9.64	0.34		(0.02	)	0.32		(0.36	)	—		(0.36	)	$	9.60	3.37	%	1.11	%	3.52	%	0.35	%	$	6,519	561	%
2006(9)	$	9.60	0.20		(0.16	)	0.04		(0.20	)	—		(0.20	)	$	9.44	0.40	%(8)	1.10	%(7)	4.29	%(7)	0.19	%(7)	$	6,644	411	%

(See Notes which are an integral part of the Financial Statements)

49

Financial Highlights—Advisor Class of Shares (For a share outstanding throughout each period)

Period Ended August 31,	Net asset value, beginning of period		Net investment income (loss)		Net realized and unrealized gain (loss) on investments, options, futures contracts and foreign currency		Total from investment operations	Dividends to shareholders from net investment income		Distributions to shareholders from net realized gain on investments, options, futures contracts and foreign currency	Total distributions		Net asset value, end of period		Total return(1)		Ratios to Average Net Assets						Net assets, end of period (000 omitted)		Portfolio turnover rate
																	Expenses		Net investment income (loss)		Expense waiver(2)
Intermediate Bond Fund
2001	$	9.16	0.53		0.35		0.88	(0.53	)	—	(0.53	)	$	9.51	9.89	%	0.95	%	5.67	%	0.31	%	$	3,230	273	%
2002(3)	$	9.51	0.45	(4)(5)	(0.04	)(5)	0.41	(0.48	)	—	(0.48	)	$	9.44	4.46	%	0.95	%	4.77	%(5)	0.31	%	$	4,255	187	%
2003(3)	$	9.44	0.39	(4)	0.06		0.45	(0.42	)	—	(0.42	)	$	9.47	4.86	%	0.95	%	4.05	%	0.31	%	$	5,403	317	%
2004(3)	$	9.47	0.39	(4)	0.02		0.41	(0.38	)	—	(0.38	)	$	9.50	4.44	%	0.95	%	4.06	%	0.31	%	$	6,865	279	%
2005(3)	$	9.50	0.33		(0.08	)	0.25	(0.35	)	—	(0.35	)	$	9.40	2.66	%	0.96	%	3.47	%	0.32	%	$	7,123	357	%
2006(9)	$	9.40	0.23		(0.21	)	0.02	(0.19	)	—	(0.19	)	$	9.23	0.18	%(8)	0.96	%(7)	4.09	%(7)	0.15	%(7)	$	6,804	205	%
Short-Term Income Fund
2001(6)	$	9.26	0.46		0.28		0.74	(0.46	)	—	(0.46	)	$	9.54	8.15	%(8)	0.76	%(7)	5.68	%(7)	0.59	%(7)	$	97	79	%
2002(3)	$	9.54	0.39	(4)(5)	(0.06	)(5)	0.33	(0.45	)	—	(0.45	)	$	9.42	3.53	%	0.79	%	4.21	%(5)	0.59	%	$	824	54	%
2003(3)	$	9.42	0.30	(4)	(0.02	)	0.28	(0.38	)	—	(0.38	)	$	9.32	2.99	%	0.81	%	3.19	%	0.59	%	$	2,207	43	%
2004(3)	$	9.32	0.25	(4)	(0.02	)	0.23	(0.34	)	—	(0.34	)	$	9.21	2.51	%	0.77	%	2.70	%	0.59	%	$	2,914	40	%
2005(3)	$	9.21	0.25		(0.11	)	0.14	(0.32	)	—	(0.32	)	$	9.03	1.51	%	0.77	%	2.72	%	0.59	%	$	2,792	52	%
2006(9)	$	9.03	0.15		(0.04	)	0.11	(0.18	)	—	(0.18	)	$	8.96	1.19	%(8)	0.77	%(7)	3.32	%(7)	0.43	%(7)	$	2,786	6	%
Prime Money Market Fund
2001	$	1.00	0.05		—		0.05	(0.05	)	—	(0.05	)	$	1.00	5.00	%	0.76	%	4.90	%	0.05	%	$	127,707	—
2002	$	1.00	0.02		—		0.02	(0.02	)	—	(0.02	)	$	1.00	1.69	%	0.75	%	1.69	%	0.04	%	$	113,662	—
2003	$	1.00	0.01		—		0.01	(0.01	)	—	(0.01	)	$	1.00	0.75	%	0.75	%	0.74	%	0.03	%	$	93,059	—
2004	$	1.00	0.01	(4)	—		0.01	(0.01	)	—	(0.01	)	$	1.00	0.46	%	0.75	%	0.45	%	0.04	%	$	84,397	—
2005	$	1.00	0.02		—		0.02	(0.02	)	—	(0.02	)	$	1.00	1.91	%	0.75	%	1.90	%	0.04	%	$	75,993	—
2006(9)	$	1.00	0.02		—		0.02	(0.02	)	—	(0.02	)	$	1.00	1.70	%(8)	0.75	%(7)	4.26	%(7)	0.04	%(7)	$	83,172	—

(1) Based on net asset value, which does not reflect the sales charge, or contingent deferred sales charge, if applicable.

(2) This voluntary expense decrease is reflected in both the expense and net investment income (loss) ratios.

(3) Effective September 1, 2001, the Funds adopted the provisions of the revised American Institute of Certified Public Accountants (“AICPA”) Audit and Accounting Guide for Investment Companies which requires the disclosure of the per share effect of redemption fees. Redemption fees consisted of the following per share amounts:

	Per Share Amount
Fund	2002		2003		2004		2005		2006
International Stock Fund	$	0.01	$	0.01	$	0.01	$	0.00	$	0.00

Funds not shown had redemption fees of less than $0.01. Periods prior to September 1, 2001 have not been restated to reflect this change.

(4) Per share information is based on average shares outstanding.

(5) Effective September 1, 2001, the Government Income Fund, Intermediate Bond Fund and Short-Term Income Fund adopted the provisions of the revised AICPA Audit and Accounting Guide for Investment Companies and began accreting discount/amortizing premium on long-term debt securities. The effect of this change for the fiscal year ended August 31, 2002 was as follows:

	Net Investment Income per Share			Net Realized/Unrealized Gain/Loss per Share		Ratio of Net Investment Income to Average Net Assets
Increase (Decrease)
Government Income Fund	$	(0.01	)	$	0.01	(0.12	)%
Intermediate Bond Fund		(0.03	)		0.03	(0.32	)
Short-Term Income Fund		(0.04	)		0.04	(0.40	)

Per share, ratios and supplemental data for periods prior to September 1, 2001 have not been restated to reflect this change in presentation.

(6) Reflects operations for the period from October 31, 2000 (start of performance) to August 31, 2001.

(7) Annualized.

(8) Unannualized.

(9) For the six months ended February 28, 2006 (unaudited).

(See Notes which are an integral part of the Financial Statements)

50

Financial Highlights—Institutional Class of Shares (For a share outstanding throughout each period)

Period Ended August 31,	Net asset value, beginning of period		Net investment income (loss)		Net realized and unrealized gain (loss) on investments, options, futures contracts and foreign currency		Total from investment operations		Dividends to shareholders from net investment income		Distributions to shareholders from net realized gain on investments and foreign currency transactions		Total distributions		Net asset value, end of period		Total return(1)		Ratios to Average Net Assets						Net assets, end of period (000 omitted)		Portfolio turnover rate
																			Expenses		Net investment income (loss)		Expense waiver(2)
International Stock Fund
2001	$	16.35	0.07	(3)	(4.04	)	(3.97	)	—		(1.61	)	(1.61	)	$	10.77	(26.19	)%	1.21	%	0.55	%	0.02	%	$	109,367	156	%
2002(4)	$	10.77	0.06	(3)	(1.46	)	(1.40	)	—		—		—		$	9.37	(13.00	)%	1.24	%	0.59	%	0.02	%	$	102,233	83	%
2003(4)	$	9.37	0.08	(3)	0.66		0.74		—		—		—		$	10.11	7.90	%	1.29	%	0.90	%	0.02	%	$	116,761	171	%
2004(4)	$	10.11	0.04	(3)	1.02		1.06		(0.06	)	—		(0.06	)	$	11.11	10.52	%	1.25	%	0.36	%	0.02	%	$	242,089	137	%
2005(4)	$	11.11	0.16		2.32		2.48		(0.07	)	—		(0.07	)	$	13.52	22.38	%	1.23	%	0.95	%	0.02	%	$	168,128	150	%
2006(9)	$	13.52	0.01		2.13		2.14		(0.15	)	—		(0.15	)	$	15.51	15.91	%(7)	1.25	%(5)	(0.24	)%(5)	0.03	%(5)	$	169,579	85	%
Government Money Market Fund
2004(6)	$	1.00	—		—		—		—		—		—		$	1.00	0.28	%(7)	0.20	%(5)	1.18	%(5)	0.17	%(5)	$	64,212	—
2005	$	1.00	0.02		—		0.02		(0.02	)	—		(0.02	)	$	1.00	2.37	%	0.20	%	2.34	%	0.18	%	$	37,372	—
2006(9)	$	1.00	0.02		—		0.02		(0.02	)	—		(0.02	)	$	1.00	1.93	%(7)	0.20	%(5)	3.85	%(5)	0.18	%(5)	$	84,427	—
Prime Money Market Fund
2001	$	1.00	0.05		—		0.05		(0.05	)	—		(0.05	)	$	1.00	5.58	%	0.21	%	4.98	%	0.05	%	$	914,693	—
2002	$	1.00	0.02		—		0.02		(0.02	)	—		(0.02	)	$	1.00	2.25	%	0.20	%	2.24	%	0.04	%	$	910,196	—
2003	$	1.00	0.01		—		0.01		(0.01	)	—		(0.01	)	$	1.00	1.30	%	0.20	%	1.26	%	0.03	%	$	1,302,242	—
2004	$	1.00	0.01	(3)	—		0.01		(0.01	)	—		(0.01	)	$	1.00	1.01	%	0.20	%	1.01	%	0.04	%	$	1,532,640	—
2005	$	1.00	0.02		—		0.02		(0.02	)	—		(0.02	)	$	1.00	2.47	%	0.20	%	2.45	%	0.04	%	$	1,550,128	—
2006(9)	$	1.00	0.02		—		0.02		(0.02	)	—		(0.02	)	$	1.00	1.98	%(7)	0.20	%(5)	3.37	%(5)	0.04	%(5)	$	1,706,859	—
Tax-Free Money Market Fund
2005(8)	$	1.00	—		—		—		—		—		—		$	1.00	0.39	%(7)	0.20	%(5)	0.78	%(5)	0.06	%(5)	$	24,211	—
2006(9)	$	1.00	0.01		—		0.01		(0.01	)	—		(0.01	)	$	1.00	1.39	%(7)	0.20	%(5)	2.80	%(5)	0.12	%(5)	$	101,253	—

(1) Based on net asset value, which does not reflect the sales charge, or contingent deferred sales charge, if applicable.

(2) This voluntary expense decrease is reflected in both the expense and net investment income (loss) ratios.

(3) Per share information is based on average shares outstanding.

(4) Effective September 1, 2001, the Funds adopted the provisions of the revised American Institute of Certified Public Accountants (“AICPA”) Audit and Accounting Guide for Investment Companies which requires the disclosure of the per share effect of redemption fees. Redemption fees consisted of the following per share amounts:

	Per Share Amount
Fund	2002		2003		2004		2005		2006
International Stock Fund	$	0.01	$	0.01	$	0.00	$	0.00	$	0.00

Funds not shown had redemption fees of less than $0.01. Periods prior to September 1, 2001 have not been restated to reflect this change.

(5) Annualized.

(6) Reflects operations for the period from May 28, 2004 (start of performance) to August 31, 2004.

(7) Unannualized.

(8) Reflects operations for the period from June 29, 2005 (start of performance) to August 31, 2005.

(9) For the six months ended February 28, 2006 (unaudited).

(See Notes which are an integral part of the Financial Statements)

51

Financial Highlights—Investor Class of Shares (For a share outstanding throughout each period)

Period Ended August 31,	Net asset value, beginning of period		Net investment income (loss)		Net realized and unrealized gain (loss) on investments, options, futures contracts and foreign currency		Total from investment operations		Distributions to shareholders from net investment income		Distributions to shareholders from net realized gain on investments, options, futures contracts and foreign currency		Total distributions		Net asset value, end of period		Total return(1)		Ratios to Average Net Assets						Net assets, end of period (000 omitted)		Portfolio turnover rate
																			Expenses		Net investment income (loss)		Expense waiver(2)
Large-Cap Value Fund
2001	$	14.62	0.16		0.16		0.32		(0.14	)	(0.10	)	(0.24	)	$	14.70	2.20	%	1.19	%	1.07	%	—		$	414,651	78	%
2002(3)	$	14.70	0.14		(1.99	)	(1.85	)	(0.18	)	(0.55	)	(0.73	)	$	12.12	(13.16	)%	1.20	%	1.28	%	—		$	338,512	50	%
2003(3)	$	12.12	0.24		0.42		0.66		(0.20	)	—		(0.20	)	$	12.58	5.56	%	1.23	%	2.04	%	—		$	343,475	62	%
2004(3)	$	12.58	0.30		1.62		1.92		(0.30	)	—		(0.30	)	$	14.20	15.39	%	1.22	%	2.27	%	—		$	358,354	103	%
2005(3)	$	14.20	0.33		1.00		1.33		(0.35	)	(0.72	)	(1.07	)	$	14.46	9.77	%	1.22	%	2.30	%	—		$	328,848	103	%
2006(11)	$	14.46	0.10		0.91		1.01		(0.10	)	(1.88	)	(1.98	)	$	13.49	7.58	%(8)	1.22	%(9)	1.46	%(9)	—		$	326,026	89	%
Large-Cap Growth Fund
2001	$	19.22	0.01		(4.66	)	(4.65	)	(0.01	)	(0.81	)	(0.82	)	$	13.75	(24.79	)%	1.19	%	0.03	%	—		$	386,911	63	%
2002(3)	$	13.75	0.01		(3.16	)	(3.15	)	(0.01	)	—		(0.01	)	$	10.59	(22.94	)%	1.21	%	0.01	%	—		$	274,960	62	%
2003(3)	$	10.59	0.04		0.71		0.75		(0.02	)	(1.87	)	(0.02	)	$	11.32	7.11	%	1.28	%	0.38	%	—		$	254,286	73	%
2004(3)	$	11.32	0.02		0.78		0.80		(0.02	)	—		(0.02	)	$	12.10	7.08	%	1.25	%	0.20	%	—		$	257,684	129	%
2005(3)	$	12.10	0.09		1.54		1.63		(0.09	)	—		(0.09	)	$	13.64	13.51	%	1.26	%	0.63	%	—		$	237,294	146	%
2006(11)	$	13.64	0.07		0.47		0.54		(0.01	)	(1.87	)	(1.88	)	$	12.30	4.05	%(8)	1.26	%(9)	1.25	%(9)	0.01	%(9)	$	234,249	117	%
Mid-Cap Value Fund
2001	$	10.85	0.02		2.62		2.64		(0.07	)	(0.70	)	(0.77	)	$	12.72	25.80	%	1.30	%	0.16	%	—		$	172,719	104	%
2002(3)	$	12.72	0.02		(0.40	)	(0.38	)	(0.01	)	(1.68	)	(1.69	)	$	10.65	(4.25	)%	1.26	%	0.13	%	—		$	196,254	44	%
2003(3)	$	10.65	0.01		1.86		1.87		(0.01	)	—		(0.01	)	$	12.51	17.63	%	1.27	%	0.13	%	—		$	267,309	39	%
2004(3)	$	12.51	0.05		2.14		2.19		(0.01	)	(0.45	)	(0.46	)	$	14.24	17.76	%	1.22	%	0.44	%	—		$	463,104	33	%
2005(3)	$	14.24	0.03		2.61		2.64		(0.06	)	(0.96	)	(1.02	)	$	15.86	19.16	%	1.20	%	0.25	%	—		$	637,293	37	%
2006(11)	$	15.86	0.03		0.71		0.74		(0.05	)	(1.50	)	(1.55	)	$	15.05	4.91	%(8)	1.19	%(9)	0.46	%(9)	0.01	%(9)	$	673,376	36	%
Mid-Cap Growth Fund
2001	$	27.43	(0.06	)(4)	(8.67	)	(8.73	)	—		(4.97	)	(4.97	)	$	13.73	(34.17	)%	1.19	%	(0.39	)%	—		$	333,718	118	%
2002(3)	$	13.73	(0.09	)(4)	(4.29	)	(4.38	)	—		(0.04	)	(0.04	)	$	9.31	(32.01	)%	1.24	%	(0.72	)%	—		$	203,010	167	%
2003(3)	$	9.31	(0.08	)(4)	2.34		2.26		—		—		—		$	11.57	24.27	%	1.28	%	(0.78	)%	—		$	236,981	121	%
2004(3)	$	11.57	(0.10	)(4)	(0.32	)	(0.42	)	—		—		—		$	11.15	(3.63	)%	1.24	%	(0.85	)%	—		$	184,632	240	%
2005(3)	$	11.15	(0.10	)	2.60		2.50		—		—		—		$	13.65	22.42	%	1.29	%	(0.72	)%	0.01	%	$	172,137	188	%
2006(11)	$	13.65	(0.05	)	1.51		1.46		—		—		—		$	15.11	10.70	%(8)	1.30	%(9)	(0.64	)%(9)	—		$	183,741	72	%
Small-Cap Growth Fund
2001	$	18.82	(0.08	)(4)	(4.52	)	(4.60	)	—		(1.63	)	(1.63	)	$	12.59	(24.23	)%	1.58	%	(0.62	)%	—		$	105,397	287	%
2002(3)	$	12.59	(0.14	)(4)	(3.12	)	(3.26	)	—		(0.58	)	(0.58	)	$	8.75	(27.23	)%	1.63	%	(1.20	)%	—		$	77,713	292	%
2003(3)	$	8.75	(0.07	)(4)	3.15		3.08		—		—		—		$	11.83	35.20	%	1.72	%	(0.82	)%	—		$	90,126	248	%
2004(3)	$	11.83	(0.17	)(4)	0.94		0.77		—		—		—		$	12.60	6.51	%	1.58	%	(1.28	)%	—		$	129,875	267	%
2005(3)	$	12.60	(0.18	)	3.60		3.42		—		—		—		$	16.02	27.14	%	1.55	%	(1.21	)%	0.01	%	$	155,327	195	%
2006(11)	$	16.02	(0.07	)	3.01		2.94		—		(1.37	)	(1.37	)	$	17.59	19.16	%(8)	1.54	%(9)	(0.90	)%(9)	—		$	180,723	77	%
International Stock Fund
2001	$	16.33	0.03	(4)	(4.02	)	(3.99	)	—		(1.61	)	(1.61	)	$	10.73	(26.36	)%	1.46	%	0.25	%	0.02	%	$	246,649	156	%
2002(3)	$	10.73	0.03	(4)	(1.45	)	(1.42	)	—		—		—		$	9.31	(13.23	)%	1.49	%	0.32	%	0.02	%	$	195,496	83	%
2003(3)	$	9.31	0.06	(4)	0.65		0.71		—		—		—		$	10.02	7.63	%	1.54	%	0.65	%	0.02	%	$	204,477	171	%
2004(3)	$	10.02	0.00	(4)	1.02		1.02		(0.04	)	—		(0.04	)	$	11.00	10.20	%	1.50	%	0.00	%(5)	0.02	%	$	216,082	137	%
2005(3)	$	11.00	0.09		2.33		2.42		(0.07	)	—		(0.07	)	$	13.35	22.03	%	1.48	%	0.70	%	0.02	%	$	191,274	150	%
2006(11)	$	13.35	(0.03	)	2.15		2.12		(0.12	)	—		(0.12	)	$	15.35	15.90	%(8)	1.50	%(9)	(0.50	)%(9)	0.03	%(9)	$	221,530	85	%
Government Income Fund
2001	$	9.20	0.57		0.33		0.90		(0.57	)	—		(0.57	)	$	9.53	10.02	%	0.87	%	6.04	%	0.33	%	$	380,308	122	%
2002(3)	$	9.53	0.49	(4)(6)	0.20	(6)	0.69		(0.50	)	—		(0.50	)	$	9.72	7.50	%	0.87	%	5.16	%(6)	0.33	%	$	377,594	76	%
2003(3)	$	9.72	0.32	(4)	(0.08	)	0.24		(0.36	)	—		(0.36	)	$	9.60	2.45	%	0.87	%	3.30	%	0.33	%	$	382,287	539	%
2004(3)	$	9.60	0.43	(4)	0.09		0.52		(0.48	)	—		(0.48	)	$	9.64	5.50	%	0.87	%	4.49	%	0.33	%	$	344,253	113	%
2005(3)	$	9.64	0.37		(0.03	)	0.34		(0.38	)	—		(0.38	)	$	9.60	3.61	%	0.88	%	3.75	%	0.33	%	$	475,920	561	%
2006(11)	$	9.60	0.21		(0.16	)	0.05		(0.21	)	—		(0.21	)	$	9.44	0.51	%(8)	0.87	%(9)	4.52	%(9)	0.34	%(9)	$	533,609	411	%

(See Notes which are an integral part of the Financial Statements)

52

Financial Highlights—Investor Class of Shares (For a share outstanding throughout each period)

Period Ended August 31,	Net asset value, beginning of period		Net investment income (loss)		Net realized and unrealized gain (loss) on investments, options, futures contracts and foreign currency		Total from investment operations	Distributions to shareholders from net investment income		Distributions to shareholders from net realized gain on investments, options, futures contracts and foreign currency		Total distributions		Net asset value, end of period		Total return(1)		Ratios to Average Net Assets						Net assets, end of period (000 omitted)		Portfolio turnover rate
																		Expenses		Net investment income (loss)		Expense waiver(2)
Intermediate Bond Fund
2001	$	9.16	0.55		0.35		0.90	(0.55	)	—		(0.55	)	$	9.51	10.14	%	0.72	%	5.93	%	0.29	%	$	640,863	273	%
2002(3)	$	9.51	0.47	(4)(6)	(0.04	)(6)	0.43	(0.50	)	—		(0.50	)	$	9.44	4.70	%	0.72	%	5.00	%(6)	0.29	%	$	631,518	187	%
2003(3)	$	9.44	0.41	(4)	0.07		0.48	(0.45	)	—		(0.45	)	$	9.47	5.10	%	0.72	%	4.30	%	0.29	%	$	629,664	317	%
2004(3)	$	9.47	0.38	(4)	0.06		0.44	(0.41	)	—		(0.41	)	$	9.50	4.68	%	0.72	%	3.98	%	0.29	%	$	625,908	279	%
2005(3)	$	9.50	0.35		(0.08	)	0.27	(0.37	)	—		(0.37	)	$	9.40	2.90	%	0.73	%	3.70	%	0.30	%	$	646,961	357	%
2006(11)	$	9.40	0.24		(0.21	)	0.03	(0.20	)	—		(0.20	)	$	9.23	0.29	%(8)	0.73	%(9)	4.32	%(9)	0.30	%(9)	$	664,035	205	%
Intermediate Tax-Free Fund
2001	$	9.95	0.43		0.40		0.83	(0.43	)	—		(0.43	)	$	10.35	8.52	%	0.62	%	4.24	%	0.50	%	$	102,300	51	%
2002(3)	$	10.35	0.40	(6)	0.22	(6)	0.62	(0.40	)	—		(0.40	)	$	10.57	6.12	%	0.62	%	3.84	%(6)	0.50	%	$	109,693	27	%
2003(3)	$	10.57	0.38		(0.07	)	0.31	(0.38	)	—		(0.38	)	$	10.50	2.95	%	0.60	%	3.57	%	0.50	%	$	102,717	17	%
2004(3)	$	10.50	0.37		0.13		0.50	(0.37	)	(0.02	)	(0.39	)	$	10.61	4.88	%	0.62	%	3.51	%	0.50	%	$	96,952	8	%
2005(3)	$	10.61	0.37		(0.18	)	0.19	(0.36	)	(0.01	)	(0.37	)	$	10.43	1.83	%	0.61	%	3.48	%	0.50	%	$	90,619	57	%
2006(11)	$	10.43	0.17		(0.13	)	0.04	(0.17	)	(0.26	)	(0.43	)	$	10.04	0.45	%(8)	0.62	%(9)	3.48	%(9)	0.51	%(9)	$	82,598	13	%
Short-Term Income Fund
2001	$	9.21	0.58		0.33		0.91	(0.58	)	—		(0.58	)	$	9.54	10.16	%	0.53	%	6.16	%	0.57	%	$	126,008	79	%
2002(3)	$	9.54	0.42	(4)(6)	(0.07	)(6)	0.35	(0.47	)	—		(0.47	)	$	9.42	3.77	%	0.56	%	4.51	%(6)	0.57	%	$	114,320	54	%
2003(3)	$	9.42	0.33	(4)	(0.03	)	0.30	(0.40	)	—		(0.40	)	$	9.32	3.22	%	0.58	%	3.47	%	0.57	%	$	150,302	43	%
2004(3)	$	9.32	0.27	(4)	(0.02	)	0.25	(0.36	)	—		(0.36	)	$	9.21	2.75	%	0.54	%	2.94	%	0.57	%	$	148,735	40	%
2005(3)	$	9.21	0.26		(0.10	)	0.16	(0.34	)	—		(0.34	)	$	9.03	1.74	%	0.54	%	2.95	%	0.57	%	$	135,894	52	%
2006(11)	$	9.03	0.16		(0.04	)	0.12	(0.19	)	—		(0.19	)	$	8.96	1.30	%(8)	0.54	%(9)	3.55	%(9)	0.58	%(9)	$	123,095	6	%
Government Money Market Fund
2004(7)	$	1.00	0.00		—		0.00	0.00		—		0.00		$	1.00	0.23	%(8)	0.45	%(9)	0.96	%(9)	0.17	%(9)	$	118,401	—
2005	$	1.00	0.02		—		0.02	(0.02	)	—		(0.02	)	$	1.00	2.11	%	0.45	%	2.09	%	0.18	%	$	121,712	—
2006(11)	$	1.00	0.02		—		0.02	(0.02	)	—		(0.02	)	$	1.00	1.80	%(8)	0.45	%(9)	3.60	%(9)	0.18	%(9)	$	106,502	—
Prime Money Market Fund
2001	$	1.00	0.05		—		0.05	(0.05	)	—		(0.05	)	$	1.00	5.32	%	0.46	%	5.22	%	0.05	%	$	1,697,200	—
2002	$	1.00	0.02		—		0.02	(0.02	)	—		(0.02	)	$	1.00	1.99	%	0.45	%	1.95	%	0.04	%	$	1,857,948	—
2003	$	1.00	0.01		—		0.01	(0.01	)	—		(0.01	)	$	1.00	1.05	%	0.45	%	1.04	%	0.03	%	$	1,889,427	—
2004	$	1.00	0.01	(4)	—		0.01	(0.01	)	—		(0.01	)	$	1.00	0.76	%	0.45	%	0.76	%	0.04	%	$	2,123,605	—
2005	$	1.00	0.02		—		0.02	(0.02	)	—		(0.02	)	$	1.00	2.22	%	0.45	%	2.20	%	0.04	%	$	2,078,992	—
2006(11)	$	1.00	0.02		—		0.02	(0.02	)	—		(0.02	)	$	1.00	1.85	%(8)	0.45	%(9)	4.17	%(9)	0.04	%(9)	$	2,117,904	—
Tax-Free Money Market Fund
2005(10)	$	1.00	0.02		—		0.02	(0.02	)	—		(0.02	)	$	1.00	1.60	%(8)	0.45	%(9)	1.76	%(9)	0.14	%(9)	$	142,826	—
2006(11)	$	1.00	0.01		—		0.01	(0.01	)	—		(0.01	)	$	1.00	1.26	%(8)	0.45	%(9)	2.55	%(9)	0.12	%(9)	$	192,641	—

(1) Based on net asset value, which does not reflect the sales charge, or contingent deferred sales charge, if applicable.

(2) This voluntary expense decrease is reflected in both the expense and net investment income (loss) ratios shown.

(3) Effective September 1, 2001, the Funds adopted the provisions of the revised American Institute of Certified Public Accountants (“AICPA”) Audit and Accounting Guide for Investment Companies which requires the disclosure of the per share effect of redemption fees. Redemption fees consisted of the following per share amounts:

	Per Share Amount
Fund	2002		2003		2004		2005		2006
International Stock Fund	$	0.01	$	0.01	$	0.00	$	0.00	$	0.00
Intermediate Tax-Free Fund		0.01		0.01		0.00		0.00		0.00

(See Notes which are an integral part of the Financial Statements)

53

Financial Highlights—Investor Class of Shares (For a share outstanding throughout each period)

   Funds not shown had redemption fees of less than $0.01. Periods prior to September 1, 2001 have not been restated to reflect this change.

(4)   Per share information is based on average shares outstanding.

(5)   Represents less than 0.001%.

(6)   Effective September 1, 2001, the Government Income Fund, Intermediate Bond Fund, Intermediate Tax-Free Fund and Short-Term Income Fund adopted the provisions of the revised AICPA Audit   and Accounting Guide for Investment Companies and began accreting discount/amortizing premium on long-term debt securities. The effect of this change for the fiscal year ended August 31, 2002   was as follows:

	Net Investment Income per Share			Net Realized/Unrealized Gain/Loss per Share			Ratio of Net Investment Income to Average Net Assets
Increase (Decrease)
Government Income Fund	$	(0.01	)	$	0.01		(0.12	)%
Intermediate Bond Fund		(0.03	)		0.03		(0.32	)
Intermediate Tax-Free Fund		0.00			(0.00	)	0.00
Short-Term Income Fund		(0.04	)		0.04		(0.40	)

  Per share, ratios and supplemental data for periods prior to September 1, 2001 have not been restated to reflect this change in presentation.

(7)   Reflects operations for the period from May 17, 2004 (start of performance) to August 31, 2004.

(8)   Unannualized.

(9)   Annualized.

(10) Reflects operations for the period from September 22, 2004 (start of performance) to August 31, 2005.

(11) For the six months ended February 28, 2006 (unaudited).

(See Notes which are an integral part of the Financial Statements)

54

February 28, 2006 (Unaudited)

Notes to Financial Statements

1. Organization

Marshall Funds, Inc. (the “Corporation”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. The Corporation consists of thirteen diversified portfolios (individually referred to as the “Fund,” or collectively as the “Funds”), with multiple classes of shares as indicated in the accompanying table:

Portfolio Name	Advisor Class	Investor Class	Institutional Class	Investment Objective
Marshall Large-Cap Value Fund* (“Large-Cap Value Fund”)	X	X	—	To provide capital appreciation and above-average dividend income.
Marshall Large-Cap Growth Fund* (“Large-Cap Growth Fund”)	X	X	—	To provide capital appreciation.
Marshall Mid-Cap Value Fund (“Mid-Cap Value Fund”)	X	X	—	To provide capital appreciation.
Marshall Mid-Cap Growth Fund (“Mid-Cap Growth Fund”)	X	X	—	To provide capital appreciation.
Marshall Small-Cap Growth Fund (“Small-Cap Growth Fund”)	X	X	—	To provide capital appreciation.
Marshall International Stock Fund (“International Stock Fund”)	X	X	X	To provide capital appreciation.
Marshall Government Income Fund (“Government Income Fund”)	X	X	—	To provide current income.
Marshall Intermediate Bond Fund (“Intermediate Bond Fund”)	X	X	—	To maximize total return consistent with current income.
Marshall Intermediate Tax-Free Fund (“Intermediate Tax-Free Fund”)	—	X	—	To provide a high level of current income that is exempt from federal income tax and is consistent with preservation of capital.
Marshall Short-Term Income Fund (“Short-Term Income Fund”)	X	X	—	To maximize total return consistent with current income.
Marshall Government Money Market Fund (“Government Money Market Fund”)	—	X	X	To provide current income consistent with stability of principal.
Marshall Prime Money Market Fund* (“Prime Money Market Fund”)	X	X	X	To provide current income consistent with stability of principal.
Marshall Tax-Free Money Market Fund (“Tax-Free Money Market Fund”)	—	X	X	To provide current income that is exempt from federal income tax and is consistent with stability of principal.

* Effective October 28, 2005, the Marshall Equity Income Fund changed its name to the Marshall Large-Cap Value Fund; the Marshall Large-Cap Growth & Income Fund changed its name to the Marshall Large-Cap Growth Fund; and the Marshall Money Market Fund changed its name to the Marshall Prime Money Market Fund.

2. Significant Accounting Policies

The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements. These policies are in conformity with generally accepted accounting principles (“GAAP”) in the United States of America.

Investment Valuations—Listed equity securities are valued at the last sale price or official closing price reported on a national securities exchange or NASDAQ. U.S. government securities, listed corporate bonds, other fixed income and asset-backed securities, and unlisted securities are generally valued at the mean of the latest bid and asked price as furnished by an independent pricing service. Private placement securities are valued at the mean of the latest bid and asked prices as furnished by an independent pricing service. Securities listed on a foreign exchange are valued at the last closing price on the principal exchange on which they are traded immediately prior to the time for determination of NAV or at “fair value” as discussed below. Municipal bonds are valued by an independent pricing service, taking into consideration yield, liquidity, risk, credit quality, coupon, maturity, type of issue and any other factors or market data the pricing service deems relevant. The money market funds use the amortized cost method to value portfolio securities in accordance with Rule 2a-7 under the Act. Fixed income securities with remaining maturities of 60 days or less at the time of purchase are valued at amortized cost, which approximates fair value. Investments in other open-end registered investment companies are valued at net asset value.

Securities for which market quotations are not readily available, or are deemed not to reflect fair value, are valued at fair value as determined in good faith using methods approved by the Board of Directors (the “Directors”). The Directors have established a Pricing Committee, which is responsible for determinations of fair value, subject to the supervision of the Directors. In determining fair value, the Pricing Committee takes into account all information available and any factors it deems appropriate. Consequently, the price of securities used by a Fund to calculate its NAV may differ from quoted or

55

Notes to Financial Statements (continued)

published prices for the same securities. Fair value pricing involves subjective judgments and it is possible that the fair value determined for a security is materially different than the value that could be realized upon the sale of that security and the differences may be material to the NAV of the respective Fund or the financial statements presented.

Securities held in the Marshall International Stock Fund may be listed on foreign exchanges that do not value their listed securities at the same time that the Fund calculates its NAV. Most foreign markets close well before the Fund values its securities, generally 3:00 p.m. (Central Time). The earlier close of these foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim, which may affect a security’s value.

The Pricing Committee may determine that a security needs to be fair valued if, among other things, it believes the value of the security might have been materially affected by events occurring after the close of the market in which the security was principally traded, but before the time for determination of the NAV (“a subsequent event”). A subsequent event might include a company-specific development (for example, announcement of a merger that is made after the close of the foreign market), a development that might affect an entire market or region (for example, weather related events) or a potentially global development (such as a terrorist attack that may be expected to have an impact on investor expectations worldwide). The Directors have retained an independent fair value pricing service to assist in valuing foreign securities. The service utilizes statistical data based on historical performance of securities, markets and other data in developing factors used to estimate a fair value. As of February 28, 2006, 97.6% and 0.9% of the total investments of the International Stock Fund and the Small-Cap Growth Fund were fair valued, respectively.

Repurchase Agreements—It is the policy of the Funds to require the custodian bank to take possession, to have legally segregated in the Federal Reserve Book Entry System, or to have segregated within the custodian bank’s vault, all securities held as collateral under repurchase agreement transactions. Additionally, procedures have been established by the Funds to monitor, on a daily basis, the market value of each repurchase agreement’s collateral to ensure that the value of collateral at least equals the repurchase price to be paid under the repurchase agreement, including accrued interest.

The Funds will enter only into repurchase agreements with banks and other recognized financial institutions, such as broker-dealers, which are deemed by the Funds’ adviser (or sub-adviser with respect to International Stock Fund) to be creditworthy pursuant to the guidelines and/or standards reviewed or established by the Directors. Risks may arise from the potential inability of counterparties to honor the terms of the repurchase agreement. Accordingly, the Funds could receive less than the repurchase price on the sale of collateral securities.

Investment Income, Expenses and Distributions—Interest income and expenses are accrued daily. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair market value.

The Funds offer multiple classes of shares (except Intermediate Tax-Free Fund) which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Funds based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses. Income, non-class specific expenses and realized and unrealized gains and losses are allocated daily to each class of shares based on the average daily net assets of each class, without distinction between share classes. Expenses attributable to a particular class of shares, such as distribution fees and shareholder servicing fees are allocated directly to that class.

Premium and Discount Amortization/Paydown Gains and Losses—All premiums and discounts on fixed income securities are amortized/accreted for financial statement purposes. Gains and losses realized on principal payments of mortgage-backed securities (paydown gains and losses) are classified as part of net investment income.

Federal Income Taxes—It is the Funds’ policy to comply with the Subchapter M provision of the Internal Revenue Code (the “Code”) and to distribute to shareholders each year substantially all of their income. Accordingly, no provisions for federal tax are necessary.

Withholding taxes on foreign dividends have been provided in accordance with the applicable country’s tax rules and rates.

When-Issued and Delayed Delivery Transactions—The Funds may engage in when-issued or delayed delivery transactions. The Funds record when-issued securities on the trade date and maintain security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked-to-market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.

Futures Contracts—All Funds except the Government Money Market Fund, Prime Money Market Fund and Tax-Free Money Market Fund may purchase futures contracts to manage cashflows, enhance yield, and to potentially reduce transaction costs. Upon entering into a stock index futures contract with a broker, the Fund is required to deposit in a segregated account a specified amount of cash or U.S. government securities. Futures contracts are valued daily and unrealized gains or losses are recorded in a “variation margin” account. Daily, the Fund receives from or pays to the broker a specified amount of cash based upon changes in the variation margin account. When a contract is closed, the Fund recognizes a realized gain or loss. Futures contracts have market risks, including the risk that the change in the value of the contract may not correlate with changes in the value of the underlying securities.

At February 28, 2006, the Funds had no outstanding futures contracts.

Written Options Contracts—All Funds except the Government Money Market Fund, Prime Money Market Fund and Tax- Free Money Market Fund may write option contracts. A written option obligates the Fund to deliver a call, or to receive a put, for

56

Marshall Funds

the contract amount upon exercise by the holder of the option. The value of the option contract is recorded as a liability and unrealized gain or loss is measured by the difference between the current value and the premium received. For the period ended February 28, 2006, the Large-Cap Value Fund had $259,605 in realized gains on written options.

The following is a summary of the Large-Cap Value Fund’s written option activity:

Contracts	Number of Contracts		Premium
Outstanding @ 8/31/05	2,052		$	212,355
Options written	2,781			324,240
Options expired	(1,827	)		(187,587	)
Options exercised	(374	)		(49,826	)
Options closed	(1,859	)		(204,604	)
Outstanding @ 2/28/06	773		$	94,578

At February 28, 2006, the Large-Cap Value Fund had the following outstanding options:

Contracts	Type	Expiration Date	Exercise Price		Number of Contracts	Market Value		Unrealized Appreciation (Depreciation)
Broadcom Corp.	Call	May 2006	$	46.63	100	$	30,000	$	(14,301	)
Nucor Corp.	Call	March 2006		95.00	98		2,940		6,566
Phelps Dodge Corp.	Call	March 2006		170.00	100		1,000		6,800
Valero Energy Corp.	Call	March 2006		70.00	175		0		16,974
Altria Group, Inc.	Put	January 2007		50.00	200		21,000		11,899
Transocean, Inc.	Put	May 2006		60.00	100		7,000		4,700
Net Unrealized Depreciation on Written Options Contracts					773			$	32,638

Foreign Exchange Contracts—The International Stock Fund may enter into foreign currency exchange contracts as a way of managing foreign exchange rate risk. The International Stock Fund may enter into these contracts for the purchase or sale of a specific foreign currency at a fixed price on a future date as a hedge or cross hedge against either specific transactions or portfolio positions. The objective of the International Stock Fund’s foreign currency hedging transactions is to reduce the risk that the U.S. dollar value of the International Stock Fund’s foreign currency denominated securities will decline in value due to changes in foreign currency exchange rates. All foreign currency exchange contracts are “marked-to-market” daily at the applicable translation rates resulting in unrealized gains or losses. Realized gains or losses are recorded at the time the foreign currency exchange contract is offset by entering into a closing transaction or by the delivery or receipt of the currency. Risk may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. At February 28, 2006, the International Stock Fund had outstanding foreign spot currency exchange contracts as set forth below:

Settlement Date	Foreign Currency Units to Deliver/Receive	In Exchange For		Contract at Value		Unrealized Appreciation (Depreciation)
3/1/2006	54 Swiss Franc	$	41	$	41	$	—
3/1/2006	44,066 Euro		52,130		52,538		(408	)
3/1/2006	35,297,770 Japanese Yen		304,922		304,751		171
3/1/2006	6,064,481 Thai Baht		153,804		154,872		(1,068	)

57

Notes to Financial Statements (continued)

Foreign Currency Translation—The accounting records of the Funds are maintained in U.S. dollars. All assets and liabilities denominated in foreign currencies (“FC”) are translated into U.S. dollars based on the rate of exchange of such currencies against U.S. dollars on the date of valuation. Purchases and sales of securities, income and expenses are translated at the rate of exchange quoted on the respective date that such transactions are recorded. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.

Reported net realized foreign exchange gains or losses arise from sales of portfolio securities, sales and maturities of short-term securities, sales of FCs, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds’ books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end, resulting from changes in the exchange rate.

Dollar Roll Transactions—The Funds, except for the money market funds, may enter into dollar roll transactions, with respect to mortgage securities issued by Government National Mortgage Association, Federal National Mortgage Association and Federal Home Loan Mortgage Corporation, in which the Funds loan mortgage securities to financial institutions and simultaneously agree to accept substantially similar (same type, coupon and maturity) securities at a later date at an agreed upon price. Dollar roll transactions are short-term financing arrangements which will not exceed twelve months. The Funds use the proceeds generated from the transactions to invest in short-term investments, which may enhance the Funds’ current yield and total return.

Information regarding dollar roll transactions for the Intermediate Bond Fund for the period ended February 28, 2006, was as follows:

Maximum amount outstanding during the period	$	60,589,990
Average amount outstanding during the period (1)	$	23,391,032
Average shares outstanding during the period		70,473,031
Average debt per share outstanding during the period		0.33

Information regarding dollar roll transactions for the Government Income Fund for the period ended February 28, 2006, was as follows:

Maximum amount outstanding during the period	$	199,733,597
Average amount outstanding during the period (1)	$	82,495,527
Average shares outstanding during the period		53,788,132
Average debt per share outstanding during the period		1.53

(1) The average amount outstanding during the period was calculated by adding the borrowings at the end of the day and dividing the sum by the number of days in the period ended February 28, 2006.

Securities Lending—The Funds participate in a securities lending program providing for the lending of corporate bonds, equity and government securities to qualified brokers. The Funds receive cash as collateral in return for the securities and record a corresponding payable for collateral due to the respective broker. The amount of cash collateral received is maintained at a minimum level of 100% of the prior day’s market value on securities loaned. Collateral is reinvested in short-term securities including overnight repurchase agreements, commercial paper, master notes, floating rate corporate notes (with at least quarterly reset rates) and money market funds. On May 18, 2000, the Securities and Exchange Commission issued an order to the Marshall Funds that exempts certain securities lending activities from prohibitions under the Act. Under the terms of the exemptive order, (i) the Funds may pay a portion of net revenue to Marshall & Ilsley Trust Company N.A. (“M&I Trust”) for its services as securities lending agent, and (ii) cash collateral received for a loan of one Fund’s securities may be invested jointly with collateral received for loans of other Funds’ securities.

As of February 28, 2006, the value of securities loaned, the payable due to collateral due to broker and the value of reinvested cash collateral securities was as follows:

Fund	Market Value of Securities Loaned		Payable on Collateral Due to Broker
Large-Cap Value Fund	$	15,029,422	$	15,517,946
Large-Cap Growth Fund		12,309,813		12,709,940
Mid-Cap Value Fund		84,650,968		87,402,523
Mid-Cap Growth Fund		28,506,279		29,432,865
Small-Cap Growth Fund		51,187,259		52,851,090
International Stock Fund		89,738,226		92,655,140
Government Income Fund		186,890,476		192,965,297
Intermediate Bond Fund		196,938,379		203,339,798
Short-Term Income Fund		19,261,277		19,887,358

58

Marshall Funds

Cash collateral was jointly pooled and invested in the following securities as of February 28, 2006 (1):

	Large-Cap Value Fund		Large-Cap Growth Fund		Mid-Cap Value Fund		Mid-Cap Growth Fund		Small-Cap Growth Fund		International Stock Fund		Government Income Fund		Intermediate Bond Fund		Short-Term Income Fund		Total
Alliance & Leicester PLC, 4.560%, 3/1/2006	$	439,147	$	359,683	$	2,473,437	$	832,932	$	1,495,653	$	2,622,082	$	5,460,797	$	5,754,389	$	562,800	$	20,000,920
Allstate Life Global Fd II, 4.630%, 3/18/2006		439,127		359,667		2,473,323		832,893		1,495,584		2,621,962		5,460,546		5,754,124		562,774		20,000,000
American Express Credit, 4.666%, 3/5/2006		439,596		360,050		2,475,957		833,780		1,497,177		2,624,754		5,466,361		5,760,252		563,373		20,021,300
Barclays Capital Repo, 4.560%, 3/1/2006		1,756,513		1,438,667		9,893,291		3,331,573		5,982,335		10,487,847		21,842,182		23,016,496		2,251,096		80,000,000
Bayerische Landesbank NY, 4.591%, 3/24/2006		439,127		359,667		2,473,323		832,893		1,495,584		2,621,962		5,460,546		5,754,124		562,774		20,000,000
Bear Stearns Co., 4.620%, 3/5/2006		329,479		269,858		1,855,734		624,920		1,122,136		1,967,258		4,097,047		4,317,319		422,249		15,006,000
BMW US Capital LLC, 4.540%, 3/15/2006		483,031		395,626		2,720,601		916,164		1,645,109		2,884,100		6,006,480		6,329,410		619,039		21,999,560
Canadian Imperial Bank, 4.630%, 3/15/2006		329,347		269,750		1,854,992		624,670		1,121,688		1,966,471		4,095,409		4,315,593		422,080		15,000,000
CIT Group, Inc., 4.770%, 3/1/2006		439,316		359,821		2,474,384		833,251		1,496,225		2,623,087		5,462,888		5,756,593		563,015		20,008,580
Deutsche Bank Repo, 4.570%, 3/1/2006		1,976,076		1,618,500		11,129,952		3,748,020		6,730,127		11,798,828		24,572,455		25,893,559		2,532,483		90,000,000
GE Capital Corp., 4.670%, 3/17/2006		329,840		270,155		1,857,775		625,607		1,123,370		1,969,421		4,101,552		4,322,066		422,714		15,022,500
Goldman Sachs Group, 4.670%, 3/16/2006		439,432		359,915		2,475,029		833,468		1,496,616		2,623,771		5,464,313		5,758,094		563,162		20,013,800
HBOS Treasury Services PLC, 4.620%, 3/1/2006		439,127		359,667		2,473,323		832,893		1,495,584		2,621,962		5,460,546		5,754,124		562,774		20,000,000
HSBC Finance Corp., 4.561%, 3/24/2006		329,354		269,757		1,855,038		624,686		1,121,716		1,966,520		4,095,512		4,315,701		422,091		15,000,375
HSH Nordbank NY, 4.570%, 3/23/2006		439,286		359,797		2,474,216		833,194		1,496,124		2,622,908		5,462,517		5,756,201		562,977		20,007,220
IBM Corp., 4.560%, 3/8/2006		439,103		359,646		2,473,182		832,846		1,495,499		2,621,812		5,460,234		5,753,796		562,742		19,998,860
Irish Life & Permanent, 4.570%, 3/22/2006		439,079		359,626		2,473,043		832,799		1,495,415		2,621,665		5,459,929		5,753,474		562,710		19,997,740
Jackson National Life Global, 4.660%, 3/22/2006		439,239		359,757		2,473,946		833,103		1,495,961		2,622,622		5,461,922		5,755,574		562,916		20,005,040
Liquid Funding LTD, 4.550%, 3/14/2006		329,347		269,750		1,854,992		624,670		1,121,688		1,966,471		4,095,409		4,315,593		422,080		15,000,000
Merrill Lynch & Co., 4.770%, 3/11/2006		439,127		359,667		2,473,323		832,893		1,495,584		2,621,962		5,460,546		5,754,124		562,774		20,000,000
Metlife Insurance FA, 4.650%, 3/1/2006		439,127		359,667		2,473,323		832,893		1,495,584		2,621,962		5,460,546		5,754,124		562,774		20,000,000
Monumental Life FA, 4.680%, 3/15/2006		329,347		269,750		1,854,992		624,670		1,121,688		1,966,471		4,095,409		4,315,593		422,080		15,000,000
Morgan Stanley CP, 4.620%, 3/1/2006		439,142		359,679		2,473,407		832,922		1,495,635		2,622,051		5,460,731		5,754,320		562,793		20,000,680
Natexis Banq Populair NY, 4.570%, 3/23/2006		329,347		269,750		1,854,992		624,670		1,121,688		1,966,471		4,095,409		4,315,593		422,080		15,000,000
Northern Rock PLC, 4.611%, 3/3/2006		439,127		359,667		2,473,323		832,893		1,495,584		2,621,962		5,460,546		5,754,124		562,774		20,000,000
Provident Money Market Fund, 4.446%, 3/1/2006		7,885		6,457		44,405		14,954		26,851		47,074		98,037		103,308		10,104		359,075
Prudential Funding, 4.595%, 3/15/2006		439,127		359,667		2,473,323		832,893		1,495,584		2,621,962		5,460,546		5,754,124		562,774		20,000,000
RMAC 2004-NS2A A1, 4.570%, 3/12/2006		204,254		167,295		1,150,438		387,411		695,654		1,219,576		2,539,911		2,676,465		261,768		9,302,772
SLM Corp., 4.570%, 3/20/2006		439,251		359,767		2,474,015		833,127		1,496,003		2,622,696		5,462,075		5,755,735		562,931		20,005,600
Treasury Bank, 4.650%, 3/22/2006		439,127		359,667		2,473,323		832,893		1,495,584		2,621,962		5,460,546		5,754,124		562,774		20,000,000
Wachovia, 4.670%, 3/1/2006		109,783		89,917		618,331		208,223		373,896		655,490		1,365,136		1,438,531		140,693		5,000,000
Wells Fargo & Co., 4.620%, 3/2/2006		219,712		179,954		1,237,492		416,727		748,294		1,311,862		2,732,108		2,878,995		281,576		10,006,720
Westlb AG NY FRN, 4.580%, 3/10/2006		329,387		269,784		1,855,224		624,748		1,121,828		1,966,717		4,095,921		4,316,133		422,133		15,001,875
Westpac Bank NY, 4.490%, 3/18/2006		219,637		179,893		1,237,074		416,586		748,042		1,311,419		2,731,185		2,878,023		281,481		10,003,340
	$	15,517,946	$	12,709,940	$	87,402,523	$	29,432,865	$	52,851,090	$	92,655,140	$	192,965,297	$	203,339,798	$	19,887,358	$	706,761,957

(1) The collateral pool is managed by the Fund Manager of the Short-Term Income, Prime Money Market and Government Money Market Funds, at no cost to the Funds.

Restricted Securities—Restricted securities are securities that may be resold only upon registration under federal securities laws or in transactions exempt from such registration. In some cases, the issuer of restricted securities has agreed to register such securities for resale, at the issuer’s expense either upon demand by the Funds or in connection with another registered offering of the securities. Many restricted securities may be resold in the secondary market in transactions exempt from registration. Such restricted securities may be determined to be liquid under criteria established by the Directors. The Funds will not incur any registration costs upon such resales. The Funds’, except for the money market funds, restricted securities

59

Notes to Financial Statements (continued)

are valued at the price provided by dealers in the secondary market or, if no market prices are available, the fair value as determined in good faith using methods approved by the Directors. The money market funds’ restricted securities are valued at amortized cost in accordance with Rule 2a-7 under the Act.

Additional information on each illiquid restricted security held by the Prime Money Market Fund at February 28, 2006 is as follows:

Security	Acquisition Date	Acquisition Cost
GE Capital Assurance Co.	4/20/2005	$	75,000,000
Metropolitan Life Insurance Co.	6/1/2005		65,000,000
Monumental Life Insurance Co.	8/2/1993-11/30/1993		40,000,000
Monumental Life Insurance Co.	10/15/1996		10,000,000
Monumental Life Insurance Co.	1/4/2000		25,000,000
Travelers Insurance Co.	1/19/2001		50,000,000

Redemption Fees—The Funds (other than the Government Money Market Fund, Prime Money Market Fund, and Tax-Free Money Market Fund) impose a 2.00% redemption fee to shareholders of the Investor and Advisor Class of Shares, and, with respect to the International Stock Fund, the Institutional Class of Shares, who redeem shares held for 30 days or less. All redemption fees are recorded by the Funds as paid-in-capital.

Other—Investment transactions are accounted for on a trade date basis. Net realized gains and losses on securities are computed on the basis of specific security lot identification.

3. Capital Stock

The Articles of Incorporation permit the Directors to issue an indefinite number of full and fractional shares of common stock, par value $0.0001 per share. At February 28, 2006, the capital paid-in was as follows:

Fund	Capital Paid-In
Large-Cap Value Fund	$	283,472,503
Large-Cap Growth Fund		219,712,081
Mid-Cap Value Fund		569,652,245
Mid-Cap Growth Fund		194,239,597
Small-Cap Growth Fund		135,643,861
International Stock Fund		326,202,477
Government Income Fund		554,821,982
Intermediate Bond Fund		693,767,573
Intermediate Tax-Free Fund		81,569,095
Short-Term Income Fund		137,664,843
Government Money Market Fund		190,928,195
Prime Money Market Fund		3,908,426,401
Tax-Free Money Market Fund		293,892,117

Transactions in capital stock were as follows:

	Period Ended February 28, 2006					Year Ended August 31, 2005
	Shares		Amount			Shares		Amount
LARGE-CAP VALUE FUND—INVESTOR CLASS
Shares sold	861,375		$	11,716,959		1,829,109		$	26,021,484
Shares issued to shareholders in payment of distributions declared	3,206,065			41,649,166		1,543,426			21,530,773
Shares redeemed	(2,652,381	)		(36,690,548	)	(5,861,874	)		(83,244,440	)
Net change resulting from Investor Class of Share transactions	1,415,059		$	16,675,577		(2,489,339	)	$	(35,692,183	)
LARGE-CAP VALUE FUND—ADVISOR CLASS
Shares sold	35,783		$	504,990		171,705		$	2,423,765
Shares issued to shareholders in payment of distributions declared	120,368			1,565,717		56,331			786,927
Shares redeemed	(70,709	)		(980,351	)	(125,873	)		(1,789,070	)
Net change resulting from Advisor Class of Share transactions	85,442		$	1,090,356		102,163		$	1,421,622
Net change resulting from Fund Share transactions	1,500,501		$	17,765,933		(2,387,176	)	$	(34,270,561	)

60

Marshall Funds

	Period Ended February 28, 2006					Year Ended August 31, 2005
	Shares		Amount			Shares		Amount
LARGE-CAP GROWTH FUND—INVESTOR CLASS
Shares sold	753,275		$	9,491,424		1,260,357		$	16,412,745
Shares issued to shareholders in payment of distributions declared	2,539,454			31,081,965		88,525			1,180,035
Shares redeemed	(1,640,092	)		(21,186,409	)	(5,247,593	)		(68,142,663	)
Net change resulting from Investor Class of Share transactions	1,652,637		$	19,386,980		(3,898,711	)	$	(50,549,883	)
LARGE-CAP GROWTH FUND—ADVISOR CLASS
Shares sold	33,701		$	443,697		84,156		$	1,092,348
Shares issued to shareholders in payment of distributions declared	97,729			1,196,158		4,476			59,670
Shares redeemed	(45,671	)		(588,825	)	(115,395	)		(1,492,145	)
Net change resulting from Advisor Class of Share transactions	85,759		$	1,051,030		(26,763	)	$	(340,127	)
Net change resulting from Fund Share transactions	1,738,396		$	20,438,010		(3,925,474	)	$	(50,890,010	)
MID-CAP VALUE FUND—INVESTOR CLASS
Shares sold	3,714,771		$	56,349,698		9,467,073		$	143,028,970
Shares issued to shareholders in payment of distributions declared	4,145,962			60,977,713		2,280,717			33,306,266
Shares redeemed	(3,298,352	)		(50,189,764	)	(4,077,273	)		(61,533,012	)
Net change resulting from Investor Class of Share transactions	4,562,381		$	67,137,647		7,670,517		$	114,802,224
MID-CAP VALUE FUND—ADVISOR CLASS
Shares sold	66,698		$	1,030,015		248,166		$	3,739,035
Shares issued to shareholders in payment of distributions declared	80,383			1,182,223		42,031			614,117
Shares redeemed	(54,517	)		(835,067	)	(96,159	)		(1,460,186	)
Net change resulting from Advisor Class of Share transactions	92,564		$	1,377,171		194,038		$	2,892,966
Net change resulting from Fund Share transactions	4,654,945		$	68,514,818		7,864,555		$	117,695,190
MID-CAP GROWTH FUND—INVESTOR CLASS
Shares sold	712,670		$	10,201,803		1,256,962		$	16,203,819
Shares issued to shareholders in payment of distributions declared	—			—		—			—
Shares redeemed	(1,163,096	)		(16,529,229	)	(5,202,764	)		(66,143,660	)
Net change resulting from Investor Class of Share transactions	(450,426	)	$	(6,327,426	)	(3,945,802	)	$	(49,939,841	)

61

.

Notes to Financial Statements (continued)

	Period Ended February 28, 2006					Year Ended August 31, 2005
	Shares		Amount			Shares		Amount
MID-CAP GROWTH FUND—ADVISOR CLASS
Shares sold	8,630		$	123,838		34,844		$	447,507
Shares issued to shareholders in payment of distributions declared	—			—		—			—
Shares redeemed	(24,869	)		(353,179	)	(61,917	)		(789,973	)
Net change resulting from Advisor Class of Share transactions	(16,239	)	$	(229,341	)	(27,073	)	$	(342,466	)
Net change resulting from Fund Share transactions	(466,665	)	$	(6,556,767	)	(3,972,875	)	$	(50,282,307	)
SMALL-CAP GROWTH FUND—INVESTOR CLASS
Shares sold	686,272		$	11,303,544		1,456,780		$	21,659,686
Shares issued to shareholders in payment of distributions declared	786,510			12,615,613		—			—
Shares redeemed	(891,429	)		(14,797,639	)	(2,072,187	)		(30,464,957	)
Net change resulting from Investor Class of Share transactions	581,353		$	9,121,518		(615,407	)	$	(8,805,271	)
SMALL-CAP GROWTH FUND—ADVISOR CLASS
Shares sold	20,740		$	348,416		58,107		$	863,447
Shares issued to shareholders in payment of distributions declared	32,161			515,857		—			—
Shares redeemed	(33,106	)		(542,489	)	(58,317	)		(862,278	)
Net change resulting from Advisor Class of Share transactions	19,795		$	321,784		(210	)	$	1,169
Net change resulting from Fund Share transactions	601,148		$	9,443,302		(615,617	)	$	(8,804,102	)
INTERNATIONAL STOCK FUND—INVESTOR CLASS
Shares sold	1,210,624		$	17,506,037		1,722,657		$	20,871,413
Shares issued to shareholders in payment of distributions declared	59,750			865,186		51,159			639,999
Shares redeemed	(1,161,554	)		(16,491,885	)	(7,095,529	)		(87,175,523	)
Net change resulting from Investor Class of Share transactions	108,820		$	1,879,338		(5,321,713	)	$	(65,664,111	)
INTERNATIONAL STOCK FUND—ADVISOR CLASS
Shares sold	40,022		$	603,172		46,266		$	563,005
Shares issued to shareholders in payment of distributions declared	3,028			43,841		2,240			28,002
Shares redeemed	(24,302	)		(347,961	)	(45,622	)		(561,499	)
Net change resulting from Advisor Class of Share transactions	18,748		$	299,052		2,884		$	29,508

62

Marshall Funds

	Period Ended February 28, 2006					Year Ended August 31, 2005
	Shares		Amount			Shares		Amount
INTERNATIONAL STOCK FUND—INSTITUTIONAL CLASS
Shares sold	1,554,614		$	22,744,107		4,328,499		$	53,758,799
Shares issued to shareholders in payment of distributions declared	107,128			1,567,286		102,715			1,298,319
Shares redeemed	(3,171,059	)		(44,687,243	)	(13,785,943	)		(176,463,706	)
Net change resulting from Institutional Class of Share transactions	(1,509,317	)	$	(20,375,850	)	(9,354,729	)	$	(121,406,588	)
Net change resulting from Fund Share transactions	(1,381,749	)	$	(18,197,460	)	(14,673,558	)	$	(187,041,191	)
GOVERNMENT INCOME FUND—INVESTOR CLASS
Shares sold	10,459,609		$	99,004,087		17,831,487		$	170,901,289
Shares issued to shareholders in payment of distributions declared	804,740			7,603,277		1,027,448			9,859,322
Shares redeemed	(4,291,940	)		(40,617,058	)	(4,977,741	)		(47,747,868	)
Net change resulting from Investor Class of Share transactions	6,972,409		$	65,990,306		13,881,194		$	133,012,743
GOVERNMENT INCOME FUND—ADVISOR CLASS
Shares sold	77,430		$	732,685		166,570		$	1,597,370
Shares issued to shareholders in payment of distributions declared	13,361			126,241		21,475			206,095
Shares redeemed	(65,830	)		(622,230	)	(87,408	)		(837,623	)
Net change resulting from Advisor Class of Share transactions	24,961		$	236,696		100,637		$	965,842
Net change resulting from Fund Share transactions	6,997,370		$	66,227,002		13,981,831		$	133,978,585
INTERMEDIATE BOND FUND—INVESTOR CLASS
Shares sold	6,220,670		$	57,579,278		10,093,559		$	94,841,266
Shares issued to shareholders in payment of distributions declared	893,676			8,266,201		1,497,934			14,095,705
Shares redeemed	(3,998,064	)		(37,020,495	)	(8,650,915	)		(81,477,978	)
Net change resulting from Investor Class of Share transactions	3,116,282		$	28,824,984		2,940,578		$	27,458,993
INTERMEDIATE BOND FUND—ADVISOR CLASS
Shares sold	29,705		$	275,628		114,702		$	1,080,282
Shares issued to shareholders in payment of distributions declared	14,183			131,190		26,238			246,929
Shares redeemed	(64,509	)		(597,486	)	(105,897	)		(994,389	)
Net change resulting from Advisor Class of Share transactions	(20,621	)	$	(190,668	)	35,043		$	332,822
Net change resulting from Fund Shares transactions	3,095,661		$	28,634,316		2,975,621		$	27,791,815

63

Notes to Financial Statements (continued)

	Period Ended February 28, 2006					Year Ended August 31, 2005
	Shares		Amount			Shares		Amount
INTERMEDIATE TAX-FREE FUND—INVESTOR CLASS
Shares sold	1,195,744		$	12,044,827		1,156,165		$	12,130,236
Shares issued to shareholders in payment of distributions declared	232,165			2,323,387		44,387			465,638
Shares redeemed	(1,890,621	)		(19,103,502	)	(1,652,466	)		(17,342,348	)
Net change resulting from Investor Class of Share transactions	(462,712	)	$	(4,735,288	)	(451,914	)	$	(4,746,474	)
SHORT-TERM INCOME FUND—INVESTOR CLASS
Shares sold	820,201		$	7,355,201		3,269,074		$	29,927,755
Shares issued to shareholders in payment of distributions declared	118,343			1,061,596		236,508			2,149,606
Shares redeemed	(2,241,013	)		(20,110,289	)	(4,610,090	)		(41,967,477	)
Net change resulting from Investor Class of Share transactions	(1,302,469	)	$	(11,693,492	)	(1,104,508	)	$	(9,890,116	)
SHORT-TERM INCOME FUND—ADVISOR CLASS
Shares sold	12,196		$	109,617		58,534		$	532,915
Shares issued to shareholders in payment of distributions declared	5,748			51,545		10,257			93,172
Shares redeemed	(16,031	)		(143,803	)	(75,965	)		(691,271	)
Net change resulting from Advisor Class of Share transactions	1,913		$	17,359		(7,174	)	$	(65,184	)
Net change resulting from Fund Share transactions	(1,300,556	)	$	(11,676,133	)	(1,111,682	)	$	(9,955,300	)
GOVERNMENT MONEY MARKET FUND—INVESTOR CLASS
Shares sold	909,052,168		$	909,052,168		1,855,824,949		$	1,855,824,949
Shares issued to shareholders in payment of distributions declared	1,869,846			1,869,846		2,325,539			2,325,539
Shares redeemed	(926,132,682	)		(926,132,682	)	(1,854,838,991	)		(1,854,838,991	)
Net change resulting from Investor Class of Share transactions	(15,210,668	)	$	(15,210,668	)	3,311,497		$	3,311,497
GOVERNMENT MONEY MARKET FUND—INSTITUTIONAL CLASS
Shares sold	681,499,403		$	681,499,403		1,234,415,305		$	1,234,415,305
Shares issued to shareholders in payment of distributions declared	847,772			847,772		526,347			526,347
Shares redeemed	(635,292,542	)		(635,292,542	)	(1,261,781,960	)		(1,261,781,960	)
Net change resulting from Institutional Class of Share transactions	47,054,633		$	47,054,633		(26,840,308	)	$	(26,840,308	)
Net change resulting from Fund Share transactions	31,843,965		$	31,843,965		(23,528,811	)	$	(23,528,811	)

64

.

Marshall Funds

	Period Ended February 28, 2006					Year Ended August 31, 2005
	Shares		Amount			Shares		Amount
PRIME MONEY MARKET FUND—INVESTOR CLASS
Shares sold	2,444,967,924		$	2,444,967,924		4,400,996,839		$	4,400,996,839
Shares issued to shareholders in payment of distributions declared	7,996,674			7,996,674		9,910,812			9,910,812
Shares redeemed	(2,414,024,750	)		(2,414,024,750	)	(4,455,527,096	)		(4,455,527,096	)
Net change resulting from Investor Class of Share transactions	38,939,848		$	38,939,848		(44,619,445	)	$	(44,619,445	)
PRIME MONEY MARKET FUND—ADVISOR CLASS
Shares sold	106,803,167		$	106,803,167		195,786,593		$	195,786,593
Shares issued to shareholders in payment of distributions declared	1,308,157			1,308,157		1,549,235			1,549,235
Shares redeemed	(100,931,060	)		(100,931,060	)	(205,740,408	)		(205,740,408	)
Net change resulting from Advisor Class of Share transactions	7,180,264		$	7,180,264		(8,404,580	)	$	(8,404,580	)
PRIME MONEY MARKET FUND—INSTITUTIONAL CLASS
Shares sold	5,396,881,612		$	5,396,881,612		8,940,699,312		$	8,940,699,312
Shares issued to shareholders in payment of distributions declared	7,814,570			7,814,570		8,457,607			8,457,607
Shares redeemed	(5,247,941,683	)		(5,247,941,683	)	(8,931,669,336	)		(8,931,669,336	)
Net change resulting from Institutional Class of Share transactions	156,754,499		$	156,754,499		17,487,583		$	17,487,583
Net change resulting from Fund Share transactions	202,874,611		$	202,874,611		(35,536,442	)	$	(35,536,442	)
TAX-FREE MONEY MARKET FUND—INVESTOR CLASS
Shares sold	228,045,664		$	228,045,664		537,707,175		$	537,707,175
Shares issued to shareholders in payment of distributions declared	637,138			637,138		462,243			462,243
Shares redeemed	(178,868,323	)		(178,868,323	)	(395,343,454	)		(395,343,454	)
Net change resulting from Investor Class of Share transactions	49,814,479		$	49,814,479		142,825,964		$	142,825,964
TAX-FREE MONEY MARKET FUND—INSTITUTIONAL CLASS
Shares sold	172,476,270		$	172,476,270		35,643,283		$	35,643,283
Shares issued to shareholders in payment of distributions declared	12,609			12,609		—			—
Shares redeemed	(95,448,106	)		(95,448,106	)	(11,432,382	)		(11,432,382	)
Net change resulting from Institutional Class of Share transactions	77,040,773		$	77,040,773		24,210,901		$	24,210,901
Net change resulting from Fund Share transactions	126,855,252		$	126,855,252		167,036,865		$	167,036,865

65

Notes to Financial Statements (continued)

4. Federal Tax Information

The tax character of distributions reported on the Statement of Changes in Net Assets for the years ended August 31, 2005 and 2004 was as follows:

	2005						2004
Fund Name	Ordinary Income(1)		Tax-Exempt Income		Long-Term Capital Gains		Ordinary Income(1)		Tax-Exempt Income		Long-Term Capital Gains
Large-Cap Value Fund	$	13,421,810	$	—	$	13,392,909	$	8,135,126	$	—	$	—
Large-Cap Growth Fund		1,845,465		—		—		482,327		—		—
Mid-Cap Value Fund		8,203,315		—		26,772,417		1,165,030		—		9,720,983
Mid-Cap Growth Fund		—		—		—		—		—		—
Small-Cap Growth Fund		—		—		—		—		—		—
International Stock Fund		2,624,979		—		—		1,659,805		—		—
Government Income Fund		15,839,943		—		—		17,983,387		—		—
Intermediate Bond Fund		24,879,647		—		—		27,304,027		—		—
Intermediate Tax-Free Fund		—		3,228,761		49,146		15,486		3,517,412		210,991
Short-Term Income Fund		5,548,941		—		—		6,048,287		—		—
Government Money Market Fund		3,954,318		—		—		324,441		—		—
Prime Money Market Fund		80,150,986		—		—		28,390,302		—		—
Tax-Free Money Market Fund		—		2,110,257		—		—		—		—

(1) For tax purposes, short-term capital gain distributions are considered ordinary income.

At August 31, 2005, the Funds had capital loss carryforwards, which reduce the Funds’ taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Code, and thus will reduce the amount of distributions to shareholders which would otherwise be necessary to relieve the Funds of any liability for federal tax. Pursuant to the Code, such capital loss carryforward will expire as follows:

	Capital Loss Carryforward to Expire In
Fund	2006	2007	2008	2009	2010	2011	2012	2013	Total
Mid-Cap Growth Fund	—	—	—	—	—	45,074,406	—	—	45,074,406
International Stock Fund	—	—	—	—	—	38,210,583	—	—	38,210,583
Government Income Fund	—	—	1,467,490	—	—	—	—	—	1,467,490
Intermediate Bond Fund	—	—	1,553,692	—	6,283,428	3,131,248	—	—	10,968,368
Short-Term Income Fund	618,371	952,637	222,218	928,524	944,182	322,004	1,989,874	797,744	6,775,554
Prime Money Market Fund	—	—	—	—	53,396	395,328	—	—	448,724

As of August 31, 2005, the Intermediate Bond and Short-Term Income Funds had $2,580,911 and $901,045, respectively, of post-October losses, which are deferred until September 1, 2005 for tax purposes. Net capital losses incurred after October 31, and within the taxable year are deemed to arise on the first day of the Fund’s next taxable year.

66

Marshall Funds

5. Investment Adviser Fee and Other Transactions with Affiliates

Investment Adviser Fee—M&I Investment Management Corp., the Funds’ investment adviser (the “Adviser”), receives for its services an annual investment adviser fee based on a percentage of each Fund’s average daily net assets as listed below. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.

Fund	Annual Rate
Large-Cap Value Fund	0.75	%
Large-Cap Growth Fund	0.75	%
Mid-Cap Value Fund	0.75	%
Mid-Cap Growth Fund	0.75	%
Small-Cap Growth Fund	1.00	%
International Stock Fund	1.00	%
Government Income Fund	0.75	%
Intermediate Bond Fund	0.60	%
Intermediate Tax-Free Fund	0.60	%
Short-Term Income Fund	0.60	%
Government Money Market	0.20	%
Prime Money Market Fund	0.15	%
Tax-Free Money Market Fund	0.20	%

The International Stock Fund’s sub-advisers are Trilogy Global Advisors, LLC and Acadian Asset Management, Inc. The Adviser compensates the sub-advisers based on the level of average aggregate daily net assets of the International Stock Fund.

Administrative Fee—M&I Trust, under the Administrative Services Agreement, provides the Funds with administrative personnel and services. The fee paid to M&I Trust is based on each Fund’s average daily net assets with respect to the Equity Funds and Income Funds and the aggregate average daily net assets of all Money Market Funds as follows:

Maximum Fee	Fund’s ADNA
0.100%	on the first $250 million
0.095%	on the next $250 million
0.080%	on the next $250 million
0.060%	on the next $250 million
0.040%	on the next $500 million
0.020%	on assets in excess of $1.5 billion

M&I Trust may voluntarily choose to waive any portion of its fee. M&I Trust can modify or terminate this voluntary waiver at any time at its sole discretion.

UMB Fund Services, Inc. serves as the sub-administrator to the Funds. All fees of the sub-administrator are paid by M&I Trust.

Distribution Services Fee—The Prime Money Market Fund has a Distribution Plan (the “Plan”) pursuant to Rule 12b-1 under the Act. The Plan authorizes payments by the Fund to finance activities intended to result in the sale of shares of the Fund’s Advisor Class of Shares. The Plan provides that the Fund may incur distribution expenses up to 0.30% of the average daily net assets of the Fund’s Advisor Class of Shares annually.

Shareholder Services Fee—Under the terms of a Shareholder Services Agreement with Marshall Investor Services (“MIS”), a division of M&I Trust, each Fund will pay MIS up to 0.25% of average daily net assets of the Fund’s Investor and Advisor Class of Shares for the period. The fee paid to MIS is used for certain services for shareholders and to maintain shareholder accounts. MIS may voluntarily choose to waive any portion of its fee. MIS can modify or terminate this voluntary waiver at any time at its sole discretion.

Custodian Fees—M&I Trust is the Funds’ custodian, except for the International Stock Fund for which Investors Bank & Trust maintains custody. M&I Trust receives fees based on the level of each Fund’s average daily net assets for the period.

Securities Lending—The Funds pay a portion of net revenue to M&I Trust for its services as the securities lending agent. The securities lending income as shown in the Statement of Operations is net of these expenses. The following amounts were paid for the fiscal period ended February 28, 2006:

Fund	Fees Paid
Large-Cap Value Fund	$	12,145
Large-Cap Growth Fund		8,148
Mid-Cap Value Fund		26,898
Mid-Cap Growth Fund		14,601
Small-Cap Growth Fund		78,108
International Stock Fund		49,095
Government Income Fund		110,612
Intermediate Bond Fund		54,242
Short-Term Income Fund		2,651

67

Notes to Financial Statements (continued)

General—Certain of the Officers and Directors of the Corporation are Officers and Directors or Trustees of one or more of the above companies. None of the Fund officers or interested directors receive any compensation from the Funds.

6. Investment Transactions

Purchases and sales of investments, excluding short-term obligations and in-kind contributions, for the period ended February 28, 2006, were as follows:

	Other than U.S. Government Securities				U.S. Government Securities
Fund	Purchases		Sales		Purchases		Sales
Large-Cap Value Fund	$	297,861,707	$	321,433,699	$	—	$	—
Large-Cap Growth Fund		281,993,005		300,259,973		—		—
Mid-Cap Value Fund		232,548,482		249,791,253		—		—
Mid-Cap Growth Fund		125,071,906		131,626,012		—		—
Small-Cap Growth Fund		126,145,835		135,874,324		—		—
International Stock Fund		301,982,879		330,215,109		—		—
Government Income Fund		15,678,083		21,307,459		1,866,284,225		1,700,012,772
Intermediate Bond Fund		165,980,340		245,749,080		1,110,966,298		1,054,887,731
Intermediate Tax-Free Fund		10,170,609		18,892,535		—		—
Short-Term Income Fund		2,600,000		11,720,158		1,978,438		7,685,275

7. Line of Credit

Marshall Funds, Inc., on behalf of its respective Funds, entered into a $25,000,000 unsecured, committed revolving line of credit (“LOC”) agreement with State Street Bank & Trust Company. The LOC was made available for extraordinary or emergency purposes, primarily for financing redemption payments. Borrowings are charged interest at a rate of 0.50% per annum over the Federal Funds Rate. The LOC includes a commitment fee of 0.09% per annum on the daily unused portion. The Tax-Free Money Market Fund utilized the LOC during the period ended February 28, 2006. The weighted average borrowings during the period were $2,912, and the weighted average interest rate was 4.75%. There was no outstanding LOC at February 28, 2006.

68

Results of the Special Meeting

A special meeting of the shareholders of the Marshall Intermediate Bond Fund and the Marshall Short-Term Income Fund, series of the Marshall Funds, Inc., was held on October 19, 2005.

The matters voted on by the shareholders of record as of August 31, 2005 and the results of the vote at the shareholder meeting held October 19, 2005 were as follows:

1.  Approval to amend the Marshall Intermediate Bond Fund’s fundamental investment limitation to permit investments in financial futures contracts and related options.
	Affirmative	Against	Abstain
	53,199,018.91	0	0
2.  Approval to amend the Marshall Short-Term Income Fund’s fundamental investment limitation to permit investments in financial futures contracts and related options.
	Affirmative	Against	Abstain
	13,907,771.51	0	0

69

Mutual funds are not bank deposits or obligations, are not guaranteed by any bank, and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other government agency. Investment in mutual funds involves investment risk, including the possible loss of principal.

This report is authorized for distribution to prospective investors only when preceded or accompanied by the Funds’ prospectuses, which contain facts concerning each Fund’s objective and policies, management fees, expenses, and other information.

Proxy Voting

A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling toll free, 1-800-236-FUND (3863). A description of these policies and procedures is also included in the Funds’ Statement of Additional Information, which is available on the Funds’ website at http://www.marshallfunds.com or on the SEC’s website at http://www.sec.gov.

Each Fund’s proxy voting record for the most recent 12-month period ended June 30 is available without charge, upon request, by calling toll free, 1-800-236-FUND (3863) and by accessing the SEC’s website at http://www.sec.gov.

Disclosure of Portfolio Holdings

The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Each Fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

70

Notes

71

[THIS PAGE INTENTIONALLY LEFT BLANK]

Marshall Investor Services

P.O. Box 1348

Milwaukee, Wisconsin 53201-1348

1-800-236-FUND(3863)

414-287-8555

TDD: Speech and Hearing Impaired Services

1-800-209-3520

http://www.marshallfunds.com

Grand Distribution Services, LLC, Distributor

M&I Investment Management Corp., Investment Adviser

©2006 Marshall Funds, Inc. 06-321-074 (03/06)

Not FDIC Insured No Bank Guarantee May Lose Value

Item 2. Code of Ethics

Not applicable to semi-annual reports.

Item 3. Audit Committee Financial Expert

Not applicable to semi-annual reports.

Item 4. Principal Accountant Fees and Services

Not applicable to semi-annual reports.

Item 5. Audit Committee of Listed Registrants

Not applicable.

Item 6. Schedule of Investments

Included as part of the report to shareholders filed under Item 1 of this Form N-CSR.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

Not applicable to open-end investment companies.

Item 8. Portfolio Managers of Closed-End Management Investment Companies

Not applicable to open-end investment companies.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers

Not applicable to open-end investment companies.

Item 10. Submission of Matters to a Vote of Security Holders

No material changes to report.

Item 11. Controls and Procedures

a) The Registrant’s principal executive officer and principal financial officer have reviewed the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “Act”)) as of a date within 90 days of the filing of this report and have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized, reported and made known to them by others within the Registrant and by the Registrant’s service providers.

b) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the Registrant’s second fiscal quarter ended February 28, 2006 that materially affected, or were reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 12. Exhibits

(a)(1) Not applicable to semi-annual reports.

(a)(2) Certifications required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 are filed herewith.

(a)(3) Not applicable to open end investment companies.

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith.

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.

Marshall Funds, Inc.
By:	/s/    John M. Blaser
	John M. Blaser
	President
	April 19, 2006

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/    John M. Blaser
	John M. Blaser
	President
	(Principal Executive Officer)
	April 19, 2006

By:	/s/    Timothy M. Bonin
	Timothy M. Bonin
	Treasurer
	(Principal Financial Officer)
	April 19, 2006