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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES

        Investment Company Act file number: 811-08763

MH Elite Portfolio of Funds, Inc.

(Exact Name of Registrant as Specified in Charter)

220 Russell Avenue

Rahway, NJ 07065

(Address of Principal Executive Offices)  (Zip Code)

Harvey Merson

or

Jeff Holcombe

220 Russell Avenue

Rahway, NJ 07065

(Name and Address of Agent for Service)

With copy to:

JoAnn M. Strasser, Thompson Hine LLP

312 Walnut Street, 14th Floor, Cincinnati, Ohio  45202

Registrant’s Telephone Number, including Area Code:   800-318-7969

Date of fiscal year end: December 31

Date of reporting period: December 31, 2013

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).  The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public.  A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number.  Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609.  The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

Dear Fellow Shareholder:

We are pleased to present our combined 2013 annual report for MH Elite Small Cap Fund of Funds, MH Elite Fund of Funds, MH Elite Select Portfolio of Funds and MH Elite Income Fund of Funds.

It was a wonderful year to be an investor in the U.S. stock market. Despite a few hiccups throughout 2013, it was a record setting year for the U.S. equity markets. The Dow Jones Industrial Average had its best year since 1995 with a gain of 27%. The S&P 500 index’s gain of 32% was its best year since 1997 while the Nasdaq Composite and Russell 2000 indexes both ended the year with returns in excess of 38%.

The Fed’s accommodative monetary policy and low interest rates overshadowed Washington’s dysfunctional behavior, high unemployment, a federal shutdown and an embarrassing start to Obamacare. Surprisingly, consumer confidence improved to its highest level in 5 years. Globally there are signs of instability that could wreak havoc on the stock market at any time. Currently Syria, Libya, Egypt, Iran, Iraq, Mozambique and Kenya are all ticking time bombs. Led by turmoil in Brazil and China’s slowdown in growth, emerging markets were mostly in the red. Bright spots globally included Europe’s recovery from the financial crisis and Japan’s Nikkei 225 index having its best annual performance in more than four decades.

2013 started off on the right foot as an agreement was reached to offset the impact of the looming fiscal cliff nightmare, improving U.S. economic data, stabilization of the debt crisis in Europe and better than expected fourth quarter 2012 corporate earnings reports.

With a spike in consumer confidence, retail sales increased more than was forecasted and the housing market strengthened during the first quarter. After sitting on the sidelines for the past few years, investors started pouring more money into U.S. stocks during January fueling a strong first quarter, led by financials (+10%), utilities (+11%) and health care (+16%) stocks. But not all was rosy as concerns over ending QE3 drove demand and prices for precious metals and mining stocks into a tailspin. By the end of the first quarter the precious metals sector was down 17%.

A bump in the road dampened enthusiasm for the stock and bond markets in May and June. Remarks by Fed Chairman Ben Bernanke that the Fed was considering tapering its purchases of bonds later in the year resulted in a quick spike in longer-term interest rates for the first time in nearly three years. This in turn negatively impacted stocks, bonds, gold and emerging markets debt and equity. The stock market responded with a better than 2% loss in mid-June, with the Dow falling over 550 points in just two days. This was in response to what might happen not because anything did happen. It became apparent that economic data was taking a back seat to monetary policies as the Fed was now in the driver seat for stimulating the economy and ultimately the performance of the stock market. Spooked by the rise in interest rates, investors broke an almost two year streak of inflows into bond funds by withdrawing over $60 billion out of bond funds in June. By the end of the second quarter bond returns turned negative with inflation protected bonds down 6.9%, the world bond category down 4.7% and the Barclay’s Aggregate Bond Index down 2.4%. Precious metals continued to sour with a mid-year loss of 46% while the broad equity indexes still managed modest gains for the quarter.

It’s all about the Fed. Reassuring statements from the Federal Reserve in July boosted returns over 5%. Fears about the Federal Reserve’s tapering plans pushed markets lower by 3% in August. Hardest hit by Fed tapering were emerging markets which rely on cheap financing to prosper. The Fed’s decision to postpone its planned tapering coupled with improved global economic data aided the stock market’s performance in September as markets advanced again by 3 to 7%, led by foreign stocks, small caps and the technology sector. Europe was showing signs of coming out of its longest recession with a pickup in manufacturing in Italy and Spain and economic growth in Germany. Domestically, inaction by Congress and the possibility of a government shutdown weighed on the markets as we entered the fourth quarter.

In spite of itself, Congress was able to reach an agreement to postpone the debt battle until 2014. Markets moved higher in October, despite the government shutting down for a couple of weeks, as third quarter earnings were better than expected and consumers remained optimistic. The nomination of Janet Yellen to replace Ben Bernanke as next Fed Chairman was received positively. A no news is good news scenario kept the U.S. stock market moving forward in November while developed and emerging markets struggled. The Fed’s announcement it would cut back its asset purchase program to $75 billion from $85 billion per month slowed the U.S. stock market’s rally in December. The Fed also stated it plans to keep short term interest rates near zero as long as unemployment stays relatively high and inflation low.

The U.S. stock market ended 2013 at record highs while the bond market was negative for the year. European and Japanese stocks flourished while emerging market equities and bonds floundered in negative territory. The importance of diversification and asset allocation cannot be stressed enough. Assembling a diversified multi-asset class portfolio is an investor’s best anecdote to market volatility. With proper planning and asset allocation you can weather the expectations and drown out the noise. How many times have you heard “This time it’s different”? It is never different, only the expectations change when it comes to investing. The stock and bond market will always have peaks and valleys. Volatility is the norm, not the exception. The stock market needs volatility to flourish. How many investors are out of the market in fear that the financial crisis that happened in 2008 could happen again.  Fact is it will happen again but so will the recovery like  we have witnessed over the past 5 years. Unfortunately poor planning and investor behavior have crippled many investment portfolios more so than the 2008 recession and recovery.

MH Elite Small Cap Fund of Funds gained 35.6% in 2013. By comparison, the Russell 2000 index of small cap stocks gained 38.8%. Acknowledging that top performing funds will generally under perform their respective benchmarks 30% of the time over a ten year cycle, there will always be a few positions within the portfolio that will be a drag on our overall performance in any given year. Relative to the small cap categories tracked by Morningstar, our performance was comparable to other small cap funds. In general, small cap growth funds outperformed value funds by approximately 10% this past year. When comparing our performance vs. an index keep in mind indexes do not have expenses, trading costs and do not have to handle cash flow issues. Some or all of these issues can have a positive or negative impact on a fund’s performance relative to an index. It is not a fair analysis to compare a portfolio of funds against an individual fund or index.

In 2013, the following funds were added in November, micro-cap funds Buffalo Emerging Opportunities and DFA US Micro Cap, small cap blend funds, Hodges Small Cap and Glenmede Small Cap Equity and small cap value funds, Cove St. Capital Small Cap Value and DFA US Targeted Value. We added to a number of existing positions, including Alliance Bernstein Growth, TFS Small Cap, Walthausen Small Cap Value, Fidelity Small Cap Discovery and SouthernSun Small Cap. We also trimmed our position in T Rowe Price Small Cap Stock to add to T Rowe Price New Horizons. We liquidated our positions in Allianz NFJ Small Cap Value, Cambiar Small Cap, Royce Dividend Value and Berwyn. Due to a change in portfolio managers we also sold Janus Triton. We were rewarded nicely for our commitment to a few funds with returns in excess of 40%. Our top performers were T. Rowe Price New Horizons (49.1%), Alliance Bernstein Small Cap Growth (45.5%), Adirondack Small Cap (44.9%), TFS Small Cap (44%), BMO Small Cap Growth (42.2%) and SouthernSun Small Cap (42%). Picking up the rear in terms of performance was Huber Capital Small Cap Value with a gain of 28.3%. Our other holdings all had returns in excess of 30% for the year. We continue to search for the best mix of funds we believe will create a balanced approach to investing in small cap stocks over the long term. We try to look for consistency over 1, 3 and 5 year average annual returns.

MH Elite Small Cap Fund of Funds has performed very well relative to other fund of funds. Our 5 year average annual return ranked in the top 1% out of 4133 fund of funds according to a recent search performed using Morningstar’s Principia mutual fund database. This research only identified 18 fund of funds that had a higher 5 year average annual return than the Small Cap Fund of Funds. Most fund of funds are asset allocation funds that invest in various asset classes and are not a direct comparison to the MH Elite Small Cap Fund of Funds.  By using MH Elite Funds we allow the shareholder to create their own asset allocation which sets us apart from the industry. We maintain a unique investing style, and to the best of our knowledge, there is only one other fund with a similar investing strategy of investing only in the small cap sector within the fund of funds structure. We have outperformed this fund for 5 consecutive years and in 8 of the past 10 years had a higher 1, 3, 5 and 10 year average annual return.

MH Elite Fund of Funds gained 30% in 2013 which trailed the returns of the S&P 500 Index and the Russell 1000 Index, up 32.4% and 33.1%, respectively. Through September, we had a slight edge in performance over the indexes but fell behind in the last quarter, trailing the index’s performance by 1% in each of those months.

Our best performers for the year were mid cap holdings, Primecap Odyssey Aggressive Growth (54.9%) and Aston/Fairpointe Mid Cap (44.5%). Other notable contributors to performance were T. Rowe Price Media and Telecommunications (40.8%), Scout Mid Cap (37.7%) Royce Special Equity Multi Cap (36.3%), Artisan Mid Cap Value (35.8%), Fairholme (35.5%) and PIMCO Fundamental Index Plus Trust (34.9%).

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Funds that detracted from our performance in 2013 and subsequently liquidated in December were Fidelity Consumer Staples, Columbia Dividend Opportunity, BBH Core Select and Ivy Mid Cap Growth. Other holdings that underperformed relative to the indexes were Sterling Capital Equity Income (24.1%), Yacktman (27.7%) and Brown Advisory Growth Equity (28.6%). In December we added mid cap growth fund, Akre Focus, mid cap value fund, Vanguard Selected Value and large cap value fund, T. Rowe Price Value.

MH Elite Fund of Funds has also performed well when compared with the 4133 fund of funds tracked by Morningstar. The 5 year average annual return for this fund is in the top 7% out of the 4133 fund of funds tracked by Morningstar. The fund has also outperformed comparable fund of funds with similar investing strategies over the prior 1, 3 and 5 year time periods.

MH Elite Select Portfolio of Funds gained 11.3% in 2013. Our diversification into various asset classes hurt overall performance. Weaknesses in Gold (its worst year in terms of performance since 1981) and Precious Metals, Global Real Estate, Emerging Markets and Latin America offset gains in Health Care and Foreign Developed Markets. To highlight the extremes in performance, gold funds (we sold Tocqueville Gold in May due to increased volatility) were down over 40% while T. Rowe Price Health Sciences was our best performer with a gain of 51.4%. The Emerging Market fund category posted negative returns for the year while funds representing the Foreign Developed Markets had returns in excess of 25% including MFS International Value (27.7%), Oakmark International (29.3%) and Oppenheimer International Growth (25.5%). Virtus Emerging Markets Opportunities and Wasatch Emerging Markets Small Cap were down 6.3% and 3.6% respectively. An exception to the dismal performance of emerging market funds was Wasatch Frontier Emerging Small Countries with a gain of 18%. We also received strong performances from two Vanguard funds, Energy Index (up 25.8%) and Materials Index (up 24.9%).

Mid-year changes included replacing Nuveen Global Infrastructure with Alpine Global Infrastructure, replacing Westcore International Small Cap with Franklin International Small Cap Growth, replacing Harbor International with Lazard International Strategic Equity and replacing Allianz NFJ International Value with Pimco International StocksPlus. Other funds sold were Janus Overseas, Fidelity Canada, Lazard Emerging Market, Permanent Portfolio and TFS Market Neutral. T. Rowe Global Technology was sold due to a heavy weighting to US stocks and will be considered for inclusion in the MH Elite Fund of Funds portfolio. Smaller positions were taken in Seafarer Overseas Growth and Income, Columbia Acorn Emerging Market, Calvert Global Water, Pimco CommoditiesPLUS Strategy and Fidelity Select Chemicals.

The fund has allocated approx. 35% to Foreign Develop Markets, 25% to Emerging Market funds, 5% to Commodities, 5% to the Real Estate sector, 10% to the Natural Resources sector and 20% to other alternative strategies including the health care sector, infrastructure, long/short funds, global asset allocation and cash.

The Fund’s allocation does not have a clear fit to a Morningstar category and consequently its star rating is not an accurate indicator of performance. The Morningstar Category for the Select Portfolio of Funds is World Stock. It is by intention that we limit U.S. exposure to fewer than 25% of the portfolio as our emphasis is on foreign markets to complement our other equity funds. Currently we have less than 21% allocated to the U.S. market. In contrast, top performing funds in the World Stock category have 40 to 50% allocated to the U.S. market. Only 21 funds out of 1122 funds in the World Stock category have less than 21% of their portfolio allocated to the U.S. With a strong underweight to the U.S. it is very clear why MH Elite Select Portfolio of Funds lagged the World Stock category in 2013.

MH Elite Income Fund of Funds ended the year down slightly. Its -0.2% return fared better than the Barclay’s Aggregate Bond Index loss of 1.3%. Having provided above average returns over the past 5 years it was perhaps time for bond funds to take a breather. The negative impact on bond fund returns when interest rates rise was exposed in May and June. With the anticipation of the Fed reducing its monthly bond purchases, interest rates spiked and bond returns turned negative.

Changes to the portfolio in 2013 included replacing Pimco Foreign Bond-Unhedged with Pimco Foreign Bond-Hedged to reduce the volatility in foreign currencies. Berwyn Income was replaced with Westwood Income Opportunity and Thornburg Limited Term Income was purchased to replace Weitz Short/Intermediate Income. Allianz Convertible and Pimco Real Estate Real Return Strategy were sold with proceeds added to other existing positions. The daily price swings for the Pimco Real Estate Real Return were deemed unsuitable for the portfolio at this time.

We received strong positive returns from Vanguard High Dividend Yield Index (30.1%), Ivy High Income (10.5%), multisector bond funds, Loomis Sayles Bond (5.9%) and Pimco Income (4.8%), and Credit Suisse Floating Rate High Income (5.2%). Our weakest performers were emerging market bond funds Fidelity New Markets Income (-6.4%) and TCW Emerging Markets Income (-4.7%). A non-traditional bond holding, Forward Credit Analysis Long/Short Fund lost 14.2% and is being watched carefully. With the ability to short the fixed income market, I had expectations this fund would have handled the rise in interest rates more effectively.  Our other holdings had returns ranging from a loss of 1.7% to a modest gain of 1.9%.

Forty percent of the portfolio is allocated towards traditional bond funds with an emphasis on short, intermediate term and multisector bond funds. We have diversified the portfolio by allocating 10% to High Yield Bond Funds, 5% to Bank Loan Funds, 20% to Emerging Market and World Bond Funds, 7% to Conservative Allocation Funds, 5% to a fund that generates income from stock dividends and 13% to cash.

The fund has succeeded in providing a stable alternative to our other three equity funds. Shareholders now have the option to reduce their risk exposure to stocks and create a more balanced investment approach, all within the MH Elite Family of Funds.

I recently came across a marketing brochure highlighting a fund’s recent Morningstar 4-Star rating. The fund is a balanced fund of funds within Morningstar’s tactical allocation category. The fund allocates approximately 65% to stock funds and 35% to bond funds. A similar allocation to MH Elite Fund of Funds and MH Elite Income Fund of Funds would have yielded a higher return as shown in the table below.

The purpose of making this reference is to reiterate that our funds represent a portfolio and while we may not get the stars or recognition from Morningstar and other reporting services we do provide very competitive returns and give shareholders the opportunity to decide how they want to allocate their investments by offering very specific asset classes for each of our funds. While we have not earned 4 stars for our funds we have been able to generate comparable 4 star returns when used to build a diversified multi-asset portfolio.

The Board of Directors has approved a reduction in the Investment Advisory Fee paid by MH Elite Select Portfolio of Funds to MH Investment Management Inc. Effective May 1, 2014 the Investment Advisory Fee will be reduced by 75 basis points, from 1.75% to 1%. The Fund’s overall expense ratio will be 1.25%. This is a direct benefit for shareholders. By lowering the expense ratio, the Fund’s returns will increase by the amount of the reduction.

To our loyal shareholders, we appreciate and thank you for the trust you have placed in our management and we would like to extend a special welcome to all new shareholders.

For more information on our investing strategies and updates to fund holdings please visit our website, www.mhelite.com .

Sincerely,

Harvey Merson

President

Past Performance is no guarantee of future results.  The Fund’s average annual total return assumes reinvestment of all dividends and capital gain distributions.  Investment return and principal value will fluctuate so that, when redeemed, an investor’s shares may be worth more or less than their original cost.

4

Short-Term Securities and Other Assets – 5.0%

Percentage of Fund assets allocated to each investment style

based on the underlying securities held by each underlying fund

5

MH Elite Portfolio of Funds, Inc.

MH Elite Small Cap Fund of Funds

December 31, 2013

Comparison of Change in Value of $10,000 investment in

MH Elite Small Cap Fund of Funds vs. Russell 2000 Index

This chart assumes a hypothetical $10,000 initial investment in the Fund made on December 31, 2003 and reflects Fund expenses.  Investors should note that the Fund is a professionally managed mutual fund while the Russell 2000 Index is unmanaged, does not incur sales charges and/or expenses and is not available for investment.

The performance data quoted represents past performance.  Past performance is not indicative of future results.  Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.  Current performance may be lower or higher. Returns shown include the reinvestment of all dividends and other distributions and do not reflect taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares.

6

* Non-income producing security during the period.

The accompanying notes are integral part of these financial statements.

7

Short-Term Securities and Other Assets – 7.1%

Percentage of Fund assets allocated to each investment style

based on the underlying securities held by each underlying fund

11

MH Elite Portfolio of Funds, Inc.

MH Elite Fund of Funds

December 31, 2013

Comparison of Change in Value of $10,000 investment in

MH Elite Fund of Funds vs. Russell 1000 Index

This chart assumes a hypothetical $10,000 initial investment in the Fund made on January 13, 2004, the Fund’s inception date, and reflects Fund expenses.  Investors should note that the Fund is a professionally managed mutual fund while the Russell 1000 Index is unmanaged, does not incur sales charges and/or expenses and is not available for investment.

The performance data quoted represents past performance.  Past performance is not indicative of future results.  Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.  Current performance may be lower or higher. Returns shown include the reinvestment of all dividends and other distributions and do not reflect taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares.

12

* Non-income producing security during the period.

The accompanying notes are integral part of these financial statements.

13

Short-Term Securities and Other Assets – 4.2%

17

MH Elite Portfolio of Funds, Inc.

MH Elite Select Portfolio of Funds

December 31, 2013

Comparison of Change in Value of $10,000 investment in

MH Elite Select Portfolio of Funds vs. S & P 500 Index

This chart assumes a hypothetical $10,000 initial investment in the Fund made on April 6, 2006, the Fund’s inception date, and reflects Fund expenses.  Investors should note that the Fund is a professionally managed mutual fund while the S & P 500 Index is unmanaged, does not incur sales charges and/or expenses and is not available for investment.

The performance data quoted represents past performance.  Past performance is not indicative of future results.  Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.  Current performance may be lower or higher. Returns shown include the reinvestment of all dividends and other distributions and do not reflect taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares.

18

* Non-income producing security during the period.

The accompanying notes are integral part of these financial statements.

19

Short-Term Securities and Other Assets – 12.8%

23

MH Elite Portfolio of Funds, Inc.

MH Elite Income Fund of Funds

December 31, 2013

Comparison of Change in Value of $10,000 investment in

MH Elite Income Fund of Funds vs. Barclays Capital Aggregate Bond Index

This chart assumes a hypothetical $10,000 initial investment in the Fund made on August 15, 2011, the Fund’s inception date, and reflects Fund expenses.  Investors should note that the Fund is a professionally managed mutual fund while the Barclays Capital Aggregate Bond Index is unmanaged, does not incur sales charges and/or expenses and is not available for investment.

The performance data quoted represents past performance.  Past performance is not indicative of future results.  Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.  Current performance may be lower or higher. Returns shown include the reinvestment of all dividends and other distributions and do not reflect taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares.

24

The accompanying notes are integral part of these financial statements.

25