TWENTIETH CENTURY INVESTORS, INC.
Fixed Income Funds
Annual Report
October 31,
1995
[company logo]
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INDICES USED FOR PERFORMANCE COMPARISON
CONSUMER PRICE INDEX is a measure of the average change in prices over time in a
fixed market basket of goods and services.
MERRILL LYNCH GOVERNMENT (1-3 YEAR) INDEX is based on fluctuations of bond
values of U.S. Treasury notes with maturities ranging between one-three years.
MERRILL LYNCH MUNI (0-3 YEAR) INDEX is a market value weighted index composed of
short-term municipal debt issues with an overall maturity of approximately 1.5
years.
MERRILL LYNCH GOVT./CORP. (1-5 YEAR) INDEX is a market value weighted index
composed of corporate and treasury debt with an overall maturity of
approximately three years. The index consists of approximately 23% corporate
debt and 76% government debt. The corporate debt issues are all rated BBB or
better by Standard & Poor's.
LEHMAN INTERMEDIATE GOVT. BOND INDEX is made up of over 855 issues with an
average maturity of 3.8 years and an average yield of 7.1%. Approximately 87% of
the index is U.S. Treasuries issues-the other 13% is U.S. government agency
issues-and the average credit rating is AAA.
LEHMAN INTERMEDIATE GOVT./CORP. INDEX includes the Lehman Government and
Corporate Bond Indices, including U.S. government Treasury and agency
securities, corporate and Yankee bonds with 1-10 year maturities.
LEHMAN AGGREGATE BOND INDEX is composed of the Lehman Government/Corporate Index
and the Lehman Mortgage-Backed Securities Index. It also includes Treasury
issues, agency issues, corporate bond issues and mortgage-backed securities.
LEHMAN 5-YEAR GENERAL OBLIGATION INDEX holds an average quality rating of AA
with an average maturity of five years. This index holds securities that mature
in four-six years and a quality rating of BBB or higher. More than 11,000 actual
bonds are included in this index.
LEHMAN MUNI BOND INDEX is comprised of 8,000 actual municipal bonds. The bonds
are all investment-grade, fixed-rate, long-term maturities (greater than two
years) and are selected from issues larger than $50 million dated since January
1994.
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TABLE OF CONTENTS
Our Message to You....................................................2
Investment Objectives and Strategy....................................3
Period Overview.......................................................4
Cash Reserve.....................................................4
U.S. Governments Short-Term......................................5
U.S. Governments Intermediate-Term...............................6
Limited-Term Bond................................................7
Intermediate-Term Bond...........................................8
Long-Term Bond...................................................9
Tax-Exempt Short-Term...........................................10
Tax-Exempt Intermediate-Term ...................................11
Tax-Exempt Long-Term............................................12
Schedules of Investments.............................................13
Cash Reserve....................................................13
U.S. Governments Short-Term.....................................15
U.S. Governments Intermediate-Term..............................16
Limited-Term Bond...............................................16
Intermediate-Term Bond..........................................18
Long-Term Bond..................................................19
Tax-Exempt Short-Term...........................................20
Tax-Exempt Intermediate-Term....................................23
Tax-Exempt Long-Term............................................25
Statements of Assets and Liabilities.................................28
Statements of Operations.............................................30
Statements of Changes in Net Assets..................................32
Notes to Financial Statements........................................34
Financial Highlights.................................................37
Independent Accountants' Report......................................39
IMPORTANT NOTICE FOR ALL IRA AND 403(B) SHAREHOLDERS
As required by law, any distributions you receive from an IRA and certain
403(b) distributions [not eligible for rollover to an IRA or to another 403(b)]
are subject to federal income tax withholding at the rate of 10% of the total
amount withdrawn, unless you elect not to have withholding apply. If you don't
want us to withhold on this amount, you may send us a written notice not to have
the federal income tax withheld. Your written notice is valid for six months
from the date of receipt at Twentieth Century. Even if you plan to roll over the
amount you withdraw to another tax-deferred account, the withholding rate still
applies to the withdrawn amount, unless we have received a written notice not to
withhold federal income tax within six months prior to the withdrawal.
When you plan to withdraw, you may make your election by completing our
Conversions/Redemptions form or an IRS Form W-4P. Call Twentieth Century for
either form. Your written election is valid for only six months from the date of
receipt at Twentieth Century. You may revoke your election at any time by
sending a written notice to us.
Remember, even if you elect not to have income tax withheld, you are liable
for paying income tax on the taxable portion of your withdrawal. If you elect
not to have income tax withheld or you don't have enough income tax withheld,
you may be responsible for payment of estimated tax. You may incur penalties
under the estimated tax rules if your withholding and estimated tax payments are
not sufficient.
1
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OUR MESSAGE TO YOU
[photo of James E. Stowers and James E. Stowers III in the left margin]
The continued combination of moderate economic growth, subdued inflation
and declining interest rates provided a positive environment for fixed income
investors during the 12 months ended October 31, 1995. In a continuing effort to
curb inflation, the Federal Reserve Board increased short-term interest rates
consistently until July. Mid-summer easing of monetary policy in the wake of
muted economic activity and moderate inflation resulted in lowered yields for
short-term money market fund investors but higher bond prices for bond fund
investors.
Although continuing corporate financial health and Congressional moves
toward a balanced budget were positive signs for fixed income investors,
tax-reform discussions caused concern among tax-exempt investors and unrest in
the municipal bond market. Uncertainty surrounding discussion of a flat tax,
which could reduce the tax-advantaged benefits of municipal securities, prompted
municipal securities of all maturities to underperform the Treasury market.
You will find details about all of the Twentieth Century Investors, Inc.
fixed income funds performance results for the 12-month period under Period
Overview beginning on page 4.
During the last half of the period, members of the fixed income management
team began working closely with their new colleagues at The Benham Group. The
June 1995 merger of the parent company of your funds' investment manager with
the parent of The Benham Group's investment manager has substantially increased
the resources available for your fund managers to use in making investment
decisions. Additionally, the integration of the two firms has created an even
broader range family of mutual funds.
As the combined Twentieth Century/Benham company continues to grow, you
will see greater efforts to enhance the information and services you receive.
For example, this Twentieth Century Investors, Inc. Fixed Income Funds Annual
Report has been expanded to include a synopsis of the investment philosophy that
guides your funds. You also will be receiving a consolidated statement in
January that will summarize your account history with Twentieth Century.
We appreciate your confidence in the Twentieth Century family of funds and
remain committed to providing you with high quality investment management and
service, along with a wide selection of funds designed to help you pursue your
investment objectives.
Sincerely,
/s/James E. Stowers /s/James E. Stowers III
James E. Stowers.. James E. Stowers III
Chairman of the Board and Founder President
2
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October 31, 1995
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INVESTMENT OBJECTIVES AND STRATEGY
In a continuing effort to provide investors with funds to meet a wide
variety of investment needs, Twentieth Century introduced its first fixed income
fund--U.S. Governments Short-Term--in 1982. Since then, 11 more fixed income
funds have been introduced, ranging from money market funds to long-term bond
funds and including both taxable and tax-exempt funds.
o Cash Reserve is a money market1 fund. It seeks to provide current income
while also seeking to maintain a stable share price by investing in a
diversified portfolio of short-term money market securities. The fund, which
was established on March 1, 1985, must maintain a weighted average maturity
of not more than 90 days.
o U.S. Governments Short-Term seeks to provide a competitive level of income
with limited price fluctuations by investing in securities of the U.S.
government and its agencies. The fund, which was established on December 15,
1982, intends to maintain a weighted average maturity of three years or less.
o U.S. Governments Intermediate-Term was established on March 1, 1994, and is
designed for investors who seek a higher level of current income and can
accept a greater degree of price fluctuation. The fund invests in securities
of the U.S. government and its agencies and seeks to maintain a weighted
average maturity of three to 10 years.
o Limited-Term Bond, which was established on March 1, 1994, is designed for
investors seeking above-average income with limited price fluctuation. The
fund invests primarily in investment-grade2 corporate securities and other
debt instruments and maintains a weighted average portfolio maturity of five
years or less.
o Intermediate-Term Bond is designed for investors who seek a higher level of
income than that provided by Limited-Term Bond but with somewhat greater
price volatility. The fund, which was established on March 1, 1994, invests
in investment-grade securities. It seeks to maintain a weighted average
maturity of three to 10 years.
o Long-Term Bond, which was established on March 2, 1987, is designed for
investors who seek higher income while accepting the generally greater price
volatility associated with longer-term bonds. The fund invests in
investment-grade corporate bonds and other debt instruments. It maintains a
weighted average portfolio maturity of 10 years or more.
o Tax-Exempt Short-Term is designed for investors who seek tax-advantaged
income and can accept some fluctuation in principal. Established on March 1,
1993, the fund invests primarily in short-term municipal bonds. It seeks to
maintain a weighted average maturity of three years or less.
o Tax-Exempt Intermediate-Term, which was established on March 2, 1987, is
designed for investors who can accept fluctuation in the value of their
investment in order to earn a higher level of income than is generally
available with tax-exempt short-term bonds. The fund invests in tax-exempt
bonds and its weighted average maturity cannot exceed 10 years.
o Tax-Exempt Long-Term is designed for investors who seek a higher level of
tax-exempt income and can accept the higher degree of price fluctuation
associated with longer-term bonds. The fund was established on March 2, 1987,
and invests in longer-term tax-exempt bonds. It seeks to maintain a weighted
average maturity of 10 years or more.
1 An investment in Cash Reserve is neither insured nor guaranteed by the U.S.
government, and there can be no assurance that the fund will be able to
maintain a stable net asset value per share.
2 Securities rated Baa or above by Moody's Investors Service, Inc. and BBB
or above by Standard & Poor's Corporation are considered to be
investment-grade.
3
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PERIOD OVERVIEW
In a continuing effort to restrain economic growth and hold inflation in
check, the Federal Reserve Board raised short-term interest rates consistently
until mid-summer. As it became apparent in July that the strategy was achieving
its goal, the Board lowered short-term rates. As a result, two-year Treasury
notes, which had increased to 6.85%, fell to 5.62% over the 12 months ended
October 31, 1995. During the same period, 30-year Treasury bond yields fell from
7.98% to 6.34%. While these lower rates are good for most fixed income investors
given that declining rates drive up bond prices, declining rates lower money
market yields. Unlike the first half of the period when the Federal Reserve
raised very short-term interest rates, short-term rates fell in the second half
of the period. Taxable securities generally outperformed their tax-exempt
counterparts for the year.
Falling interest rates generated higher bond prices and positive total
returns across the maturity spectrum for fixed income investors. Longer-term
securities, which generally are more interest rate sensitive than are short-term
issues, did best during the period. Keep in mind that when interest rates fall,
bond prices rise, and when interest rates rise, bond prices fall. As a general
rule, during periods of rising interest rates, shorter maturities can help
reduce the effect of falling bond prices on a fund's net asset value.
Municipal bonds of all maturities trailed Treasury market performance in
the last half of the period as tax reform discussions cooled investors' interest
in municipal securities. In particular, investors responded to the fact that a
flat tax, which has been proposed by several members of Congress, could
significantly reduce the tax-advantaged status of municipal securities.
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CASH RESERVE
Because declining interest rates lowered the returns for short-term money
market investors, we positioned Cash Reserve at the longer end of its maturity
range throughout the period. Anticipating continued lower rates, the fund's
investment managers extended its weighted average maturity to approximately 70
days, near the longer end of its allowable 90-day maturity range. Extending the
maturity allowed managers to lock in rates and maintain higher yields longer.
Designed for investors whose priority is principal protection with minimal
credit risk, Cash Reserve invests in the top two ratings of commercial paper and
other securities. At the end of the 12-month period, the portion of the fund's
portfolio invested in securities rated A 1+, the highest rating available for
money market securities, exceeded 80%.
Cash Reserve posted a total return of 5.38% for the period with a seven-day
effective yield on October 31, 1995, of 5.29%.
As of the end of the 12-month period, $38,500,000, or 2.62%, of Cash
Reserve's assets were invested in taxable variable-rate notes issued by Orange
County, California. For further discussion, please see Note 2 of Notes to
Financial Statements on page 35.
4
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October 31, 1995
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U.S. GOVERNMENTS SHORT-TERM
In order to capture the price appreciation that resulted from falling
interest rates, portfolio managers for U.S. Governments Short-Term extended the
fund's average weighted maturity throughout the 12-month period to 2.2 years,
closer to the longer end of the allowable three-year maturity range. The
weighted average duration was extended to approximately two years. Duration is a
measure of a bond fund's sensitivity to interest rate changes. It is based upon
the total present value of all principal and interest payments to be received,
is calculated at prevailing interest rates and is expressed in years. The higher
a security's duration, the more sensitive is its price to changes in interest
rates.
Because Treasury securities generally outperform mortgage-backed securities
in a declining interest rate environment, the fund's managers reduced
mortgage-backed holdings from nearly 30% to approximately 12% and increased
investments in Treasuries. U.S. Governments Short-Term produced a total return
of 8.42% for the 12 months. That compares with a 9.02% return for two-year
Treasury securities and 8.95% for the Merrill Lynch Government (1-3 Year) Index.
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Quality Diversification (as of October 31, 1995)
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(Moody's ratings) % of fund investments
AAA 100%
Average Weighted Maturity (as of October 31, 1995)
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Years 2.2
Average weighted maturity indicates the average time until the principal on the
Fund's bonds is expected to be repaid, weighted by dollar amount.
Duration (as of October 31, 1995)
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Years 2.0
Duration is a measure of the sensitivity of a portfolio to changes in interest
rates. As the duration of a fund increases, the impact of a change in interest
rates on the value of its portfolio also increases.
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Average Annual Total Returns (as of October 31, 1995)
U.S. Governments Merrill Lynch Govt.
Short-Term (1-3) Year Index
--------------------------------------------
1 Year 8.42% 8.95%
5 Year 6.09% 7.03%
10 Year 6.74% 7.81%
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Asset Allocation (as of October 31, 1995)
Percent of fund investments.
Treasury 83%
Mortgage 12%
Temporary Cash Investments 5%
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[mountain graph. graph data described below]
$10,000 Over a 10-Year Period (as of October 31, 1995)
Value on 10/31/95: $19,195 U.S. Governments Short-Term
$21,224 Merrill Lynch Govt. (1-3 Year) Index
$13,866 Consumer Price Index*
$10,000 lump sum investment on 10/31/85 (inception date)
U.S. GOVT MERRILL LYNCH GOVT.
SHORT-TERM 1-3 YEAR INDEX CPI*
$10,000 $10,000 $10,000
Dec-85 $10,252 $10,253 $10,058
Mar-86 $10,615 $10,625 $10,015
Jun-86 $10,790 $10,836 $10,073
Sep-86 $11,073 $11,118 $10,143
Dec-86 $11,264 $11,315 $10,171
Mar-87 $11,389 $11,456 $10,217
Jun-87 $11,338 $11,531 $10,344
Sep-87 $11,260 $11,552 $10,475
Dec-87 $11,696 $11,954 $10,514
Mar-88 $12,006 $12,269 $10,614
Jun-88 $12,116 $12,396 $10,751
Sep-88 $12,284 $12,577 $10,916
Dec-88 $12,354 $12,698 $10,979
Mar-89 $12,477 $12,856 $11,143
Jun-89 $13,117 $13,495 $11,306
Sep-89 $13,240 $13,691 $11,389
Dec-89 $13,590 $14,078 $11,489
Mar-90 $13,546 $14,203 $11,726
Jun-90 $13,875 $14,601 $11,835
Sep-90 $14,135 $14,949 $12,090
Dec-90 $14,614 $15,447 $12,191
Mar-91 $14,855 $15,787 $12,301
Jun-91 $15,109 $16,098 $12,392
Sep-91 $15,676 $16,639 $12,501
Dec-91 $16,315 $17,251 $12,564
Mar-92 $16,178 $17,278 $12,693
Jun-92 $16,620 $17,775 $12,775
Sep-92 $17,102 $18,305 $12,875
Dec-92 $17,032 $18,338 $12,929
Mar-93 $17,355 $18,743 $13,084
Jun-93 $17,503 $18,945 $13,157
Sep-93 $17,687 $19,217 $13,220
Dec-93 $17,743 $19,331 $13,284
Mar-94 $17,561 $19,234 $13,411
Jun-94 $17,517 $19,250 $13,484
Sep-94 $17,664 $19,440 $13,612
Dec-94 $17,655 $19,441 $13,639
Mar-95 $18,216 $20,093 $13,658
Jun-95 $18,770 $20,738 $13,758
Oct-95 $19,195 $21,224 $13,866
Past Performance is not predictive of future performance.
*Source: Lipper Analytical Services, Inc.
5
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U.S. GOVERNMENTS INTERMEDIATE-TERM
U.S. Governments Intermediate-Term produced a total return of 11.58% for
the period, outpacing the 11.09% return on three-year Treasury securities. The
benchmark Lehman Intermediate Government Bond Index posted an 11.79% return for
the 12 months.
Treasury securities comprised the bulk of the fund's holdings throughout
the period with the remainder invested in government-agency-issued
mortgage-backed securities. Mortgage holdings were reduced from close to 20% to
approximately 13% in anticipation of further interest rate declines. In order to
take advantage of the price appreciation that accompanies declining interest
rates, the fund's portfolio managers extended the fund's weighted average
maturity from 3.9 years to approximately 5.5 years and extended weighted average
duration from 3.0 years to 4.1 years by the end of the period.
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Quality Diversification (as of October 31, 1995)
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(Moody's ratings) % of fund investments
AAA 100%
Average Weighted Maturity (as of October 31, 1995)
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Years 5.5
Average weighted maturity indicates the average time until the principal on the
Fund's bonds is expected to be repaid, weighted by dollar amount.
Duration (as of October 31, 1995)
- --------------------------------
Years 4.1
Duration is a measure of the sensitivity of a portfolio to changes in interest
rates. As the duration of a fund increases, the impact of a change in interest
rates on the value of its portfolio also increases.
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Average Annual Total Returns (as of October 31, 1995)
U.S. Governments Lehman Intermediate
Intermediate-Term Govt. Bond Index
---------------------------------------------
1 Year 11.58% 11.79%
Inception 6.14% 6.12%
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Asset Allocation (as of October 31, 1995)
Percent of fund investments.
Treasury 85%
Mortgage 13%
Temporary Cash Investments 2%
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[mountain graph. graph data described below]
$10,000 Over Life of Fund (as of October 31, 1995)
Value on 10/31/95: $11,046 U.S. Governments Intermediate-Term
$11,042 Lehman Intermediate Govt. Bond Index
$10,478 Consumer Price Index*
$10,000 lump sum investment made on 3/1/94 (inception date)
U.S. GOVT LEHMAN INTMDT
INTERMEDIATE GOVT. BOND INDEX CPI*
$10,000 $10,000 $10,000
Mar-1994 $9,895 $9,854 $10,034
Apr-1994 $9,851 $9,790 $10,048
May-1994 $9,854 $9,797 $10,055
Jun-1994 $9,846 $9,799 $10,089
Jul-1994 $9,962 $9,927 $10,117
Aug-1994 $9,979 $9,956 $10,157
Sep-1994 $9,892 $9,873 $10,184
Oct-1994 $9,899 $9,875 $10,192
Nov-1994 $9,854 $9,831 $10,205
Dec-1994 $9,893 $9,863 $10,205
Jan-1995 $10,030 $10,024 $10,246
Feb-1995 $10,216 $10,217 $10,286
Mar-1995 $10,271 $10,274 $10,320
Apr-1995 $10,377 $10,393 $10,355
May-1995 $10,687 $10,686 $10,375
Jun-1995 $10,749 $10,754 $10,396
Jul-1995 $10,726 $10,760 $10,396
Aug-1995 $10,822 $10,849 $10,423
Sep-1995 $10,905 $10,922 $10,444
Oct-1995 $11,046 $11,042 $10,478
Past Performance is not predictive of future performance.
*Source: Lipper Analytical Services, Inc.
6
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October 31, 1995
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LIMITED-TERM BOND
Limited-Term Bond posted an 8.89% total return for the 12 months, closely
tracking two-year Treasury notes, which gained 9.02% for the period. In
comparison, the somewhat longer Merrill Lynch Government/Corporate (1-5 Year)
Index returned 10.48% for the period.
Reflecting improvements in credit quality in the corporate market because
of the continuing economic recovery, more than half of Limited-Term Bond's
portfolio was invested in corporate securities during the 12 months ended
October 31. The remainder of the portfolio held Treasury securities and
mortgage-backed securities issued by agencies of the federal government. All of
the fund's portfolio holdings were investment grade-AAA, AA, A or BBB-with more
than half in the top three of these grades. As the fund continues to grow, it
will likely invest an increasingly greater proportion of its assets in
investment-grade corporate securities, which normally offer opportunities for
slightly higher yields than government and agency securities of comparable
maturity.
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Quality Diversification (as of October 31, 1995)
- -----------------------------------------------
(Moody's ratings) % of fund investments
AAA 27%
AA 13%
A 44%
BBB 16%
Average Weighted Maturity (as of October 31, 1995)
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Years 2.5
Average weighted maturity indicates the average time until the principal on the
Fund's bonds is expected to be repaid, weighted by dollar amount.
Duration (as of October 31, 1995)
- --------------------------------
Years 2.2
Duration is a measure of the sensitivity of a portfolio to changes in interest
rates. As the duration of a fund increases, the impact of a change in interest
rates on the value of its portfolio also increases.
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Average Annual Total Returns (as of October 31, 1995)
Limited-Term Merrill Lynch Govt./Corp.
Bond (1-5 Year) Index
------------------------------------------
1 Year 8.89% 10.48%
Inception 5.19% 6.26%
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Asset Allocation (as of October 31, 1995)
Percent of fund investments.
Corporate 56%
Treasury 26%
Mortgage 12%
Temporary Cash Investments 6%
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[mountain graph. graph data described below]
$10,000 Over Life of Fund (as of October 31, 1995)
Value on 10/31/95: $10,881 Limited-Term Bond
$11,035 Merrill Lynch Govt./Corp. (1-5 Year) Index
$10,478 Consumer Price Index*
$10,000 lump sum investment made on 3/1/94 (inception date)
MERRILL LYNCH
LIMITED- GOVT/CORP
TERM BOND (1-5 YEAR) INDEX CPI*
$10,000 $10,000 $10,000
Mar-94 $9,933 $9,909 $10,034
Apr-94 $9,888 $9,851 $10,048
May-94 $9,887 $9,865 $10,055
Jun-94 $9,907 $9,885 $10,089
Jul-94 $9,999 $9,990 $10,117
Aug-94 $10,030 $10,026 $10,157
Sep-94 $9,990 $9,974 $10,184
Oct-94 $9,992 $9,988 $10,192
Nov-94 $9,958 $9,935 $10,205
Dec-94 $9,980 $9,961 $10,205
Jan-95 $10,102 $10,113 $10,246
Feb-95 $10,230 $10,285 $10,287
Mar-95 $10,291 $10,347 $10,321
Apr-95 $10,393 $10,454 $10,355
May-95 $10,582 $10,699 $10,375
Jun-95 $10,621 $10,763 $10,396
Jul-95 $10,650 $10,791 $10,396
Aug-95 $10,722 $10,865 $10,423
Sep-95 $10,795 $10,927 $10,444
Oct-95 $10,881 $11,035 $10,478
Past Performance is not predictive of future performance.
*Source: Lipper Analytical Services, Inc.
7
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INTERMEDIATE-TERM BOND
Intermediate-Term Bond realized a total return of 12.19% for the 12-month
period ended October 31, 1995. In comparison, its benchmark Lehman Intermediate
Government/Corporate Index gained 12.54% for the same period.
Intermediate-Term Bond's investment managers maintained a weighted average
portfolio maturity beyond five years with a weighted average duration of
approximately four years. Confidence in improving corporate financial health led
portfolio managers to invest 61% of the fund's portfolio in corporate securities
with the remainder in Treasury and agency securities, mortgage-backed securities
and cash. More than 80% of the portfolio held securities rated AAA, AA and A; as
the economy continued to improve, BBB-rated holdings were increased to
approximately 16%.
As the fund attracts additional assets, we expect it to hold a greater
proportion of its portfolio in investment-grade corporate securities.
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Quality Diversification (as of October 31, 1995)
- -----------------------------------------------
(Moody's ratings) % of fund investments
AAA 33%
AA 17%
A 34%
BBB 16%
Average Weighted Maturity (as of October 31, 1995)
- -------------------------------------------------
Years 5.2
Average weighted maturity indicates the average time until the principal on the
Fund's bonds is expected to be repaid, weighted by dollar amount.
Duration (as of October 31, 1995)
- --------------------------------
Years 4.2
Duration is a measure of the sensitivity of a portfolio to changes in interest
rates. As the duration of a fund increases, the impact of a change in interest
rates on the value of its portfolio also increases.
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Average Annual Total Returns (as of October 31, 1995)
Intermediate-Term Lehman Intermediate
Bond Govt./Corp. Index
---------------------------------------------
1 Year 12.19% 12.54%
Inception 6.34% 6.41%
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Asset Allocation (as of October 31, 1995)
Percent of fund investments.
Corporate 61%
Treasury 21%
Mortgage 7%
Temporary Cash Investments 7%
Sovereign Governments & Agencies 4%
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[mountain graph. graph data described below]
$10,000 Over Life of Fund (as of October 31, 1995)
Value on 10/31/95: $11,080 Intermediate-Term Bond
$11,091 Lehman Intermediate Govt./Corp. Index
$10,478 Consumer Price Index*
$10,000 lump sum investment made on 3/1/94
INTERMEDIATE- LEHMAN INTMDT
TERM BOND GOVT./CORP. INDEX CPI*
$10,000 $10,000 $10,000
Mar-94 $9,856 $9,835 $10,034
Apr-94 $9,784 $9,768 $10,048
May-94 $9,798 $9,775 $10,055
Jun-94 $9,800 $9,776 $10,089
Jul-94 $9,926 $9,917 $10,117
Aug-94 $9,950 $9,947 $10,157
Sep-94 $9,881 $9,856 $10,184
Oct-94 $9,876 $9,855 $10,192
Nov-94 $9,840 $9,811 $10,205
Dec-94 $9,879 $9,845 $10,205
Jan-95 $10,014 $10,011 $10,246
Feb-95 $10,200 $10,219 $10,287
Mar-95 $10,264 $10,277 $10,321
Apr-95 $10,369 $10,403 $10,355
May-95 $10,701 $10,717 $10,375
Jun-95 $10,753 $10,789 $10,396
Jul-95 $10,743 $10,790 $10,396
Aug-95 $10,863 $10,888 $10,423
Sep-95 $10,949 $10,967 $10,444
Oct-95 $11,080 $11,091 $10,478
Past Performance is not predictive of future performance.
*Source: Lipper Analytical Services, Inc.
8
<PAGE>
October 31, 1995
- --------------------------------------------------------------------------------
LONG-TERM BOND
Posting a 17.16% total return for the period, Long-Term Bond outperformed
the benchmark Lehman Aggregate Bond Index, which returned 15.65%. This
performance can be attributed to both a somewhat longer duration than the index
throughout the period based on our expectations of declining interest rates as
well as to our success investing in improving credits in the corporate bond
market.
Long-Term Bond's investment team positioned the fund's weighted average
maturity at slightly more than 10 years throughout the period, while maintaining
a weighted average duration of approximately 5.6 years. Long-Term Bond's
portfolio was even more heavily weighted in corporate securities than was
Intermediate-Term Bond-nearly 70%, with the remainder in Treasury and agency
securities, mortgage-backed securities and cash. All of the fund's holdings were
investment-grade, with more than 80% in the top three categories.
- --------------------------------------------------------------------------------
Quality Diversification (as of October 31, 1995)
- -----------------------------------------------
(Moody's ratings) % of fund investments
AAA 25%
AA 12%
A 46%
BBB 17%
Average Weighted Maturity (as of October 31, 1995)
- -------------------------------------------------
Years 11.1
Average weighted maturity indicates the average time until the principal on the
Fund's bonds is expected to be repaid, weighted by dollar amount.
Duration (as of October 31, 1995)
- --------------------------------
Years 5.6
Duration is a measure of the sensitivity of a portfolio to changes in interest
rates. As the duration of a fund increases, the impact of a change in interest
rates on the value of its portfolio also increases.
- --------------------------------------------------------------------------------
Average Annual Total Returns (as of October 31, 1995)
Long-Term Lehman Aggregate
Bond Bond Index
----------------------------------
1 Year 17.16% 15.65%
5 Year 9.75% 9.65%
Inception 8.02% 8.76%
- --------------------------------------------------------------------------------
Asset Allocation (as of October 31, 1995)
Percent of fund investments.
Corporate 66%
Treasury 22%
Mortgage 6%
Temporary Cash Investments 3%
Sovereign Governments & Agencies 2%
U.S. Govt. Agencies 1%
- --------------------------------------------------------------------------------
[mountain graph. graph data described below]
$10,000 Over Life of Fund (as of October 31, 1995) $10,000
Value on 10/31/95: $19,510 Long-Term Bond made 3/2/87
$20,702 Lehman Aggregate Bond
$13,769 Consumer Price Index*
$10,000 lump sum investment made on 3/2/87
LEHMAN
LONG-TERM AGGREGATE
BOND BOND INDEX CPI*
$10,000 $10,000 $10,000
Mar-97 $9,890 $9,955 $10,045
Jun-87 $9,620 $9,777 $10,171
Sep-87 $9,109 $9,510 $10,299
Dec-87 $9,790 $10,062 $10,338
Mar-88 $10,207 $10,441 $10,436
Jun-88 $10,259 $10,564 $10,571
Sep-88 $10,455 $10,774 $10,732
Dec-88 $10,606 $10,856 $10,795
Mar-89 $10,642 $10,980 $10,956
Jun-89 $11,612 $11,855 $11,117
Sep-89 $11,651 $11,989 $11,198
Dec-89 $12,089 $12,435 $11,296
Mar-90 $11,657 $12,335 $11,529
Jun-90 $12,086 $12,786 $11,636
Sep-90 $12,036 $12,896 $11,888
Dec-90 $12,820 $13,548 $11,986
Mar-91 $13,086 $13,926 $12,094
Jun-91 $13,233 $14,154 $12,184
Sep-91 $14,123 $14,958 $12,291
Dec-91 $15,063 $15,717 $12,353
Mar-92 $14,739 $15,516 $12,479
Jun-92 $15,349 $16,143 $12,561
Sep-92 $16,027 $16,837 $12,659
Dec-92 $15,905 $16,882 $12,712
Mar-93 $16,596 $17,579 $12,864
Jun-93 $17,024 $18,045 $12,936
Sep-93 $17,547 $18,516 $12,998
Dec-93 $17,519 $18,527 $13,061
Mar-94 $16,949 $17,996 $13,186
Jun-94 $16,671 $17,810 $13,257
Sep-94 $16,706 $17,919 $13,383
Dec-94 $16,733 $17,987 $13,410
Mar-95 $17,621 $18,893 $13,563
Jun-95 $18,869 $20,044 $13,662
Oct-95 $19,510 $20,702 $13,769
Past Performance is not predictive of future performance.
*Source: Lipper Analytical Services, Inc.
9
<PAGE>
- --------------------------------------------------------------------------------
TAX-EXEMPT SHORT-TERM
Tax-Exempt Short-Term entered the 12-month period in a defensive posture
because we believed that strong economic growth could lead to higher inflation
and higher interest rates. As economic and market conditions changed, however,
we extended the weighted average maturity from 1.1 years to 2.4 years and
extended weighted average duration from 1.11 years to 2.09 years. The strategy
resulted in noteworthy performance in the second half of the period when twoto
three-year municipal bonds provided strong combinations of yield and price
appreciation in the maturity range.
Fund managers increased holdings in one-year securities near the end of the
period when such bonds' prices rose above those for two- and three-year bonds.
Balancing these with purchases of five- and six-year maturities enabled managers
to maintain a weighted average maturity near 2.4 years. As readily available
AAA-rated securities continued to afford attractive yields, the investment team
increased holdings in these securities to more than 40% of the portfolio.
With a total return of 5.95% for the 12-month period, Tax-Exempt Short-Term
performed well compared to its benchmark Merrill Lynch Muni (0-3 Year) Index,
which returned 6.60%. Because the fund's manager has waived the fund's fees
until January 1, 1996, the average total return for the period was not reduced
by management fees.
- --------------------------------------------------------------------------------
Quality Diversification (as of October 31, 1995)
- -----------------------------------------------
(Moody's ratings) % of fund investments
AAA 41%
AA 24%
A 25%
BBB 10%
Average Weighted Maturity (as of October 31, 1995)
- -------------------------------------------------
Years 2.4
Average weighted maturity indicates the average time until the principal on the
Fund's bonds is expected to be repaid, weighted by dollar amount.
Duration (as of October 31, 1995)
- --------------------------------
Years 2.09
Duration is a measure of the sensitivity of a portfolio to changes in interest
rates. As the duration of a fund increases, the impact of a change in interest
rates on the value of its portfolio also increases.
- --------------------------------------------------------------------------------
Average Annual Total Returns (as of October 31, 1995)
Tax-Exempt Merrill Lynch Muni
Short-Term (0-3 Year) Index
------------------------------------
1 Year 5.95% 6.60%
Inception 4.22% 4.19%
- --------------------------------------------------------------------------------
Asset Allocation (as of October 31, 1995)
Percent of fund investments.
General Obligations 33%
Other Revenue 23%
Electric Revenue 17%
Hospital Revenue 11%
Temporary Cash Investments 6%
Water and Sewer Revenue 4%
Indust. Dev. Revenue 2%
Housing Revenue 2%
Education Revenue 2%
- --------------------------------------------------------------------------------
[mountain graph. graph data described below]
$10,000 Over Life of Fund (as of October 31, 1995)
Value on 10/31/95: $11,165 Tax-Exempt Short-Term made 3/1/94
$11,155 Merrill Lynch Muni (0-3 Year) Index
$10,741 Consumer Price Index*
$10,000 lump sum investment made on 3/1/93 (inception date)
MERRILL
TAX-EXEMPT LYNCH MUNI
SHORT-TERM (0-3 YRS) CPI
$10,000 $10,000 $10,000
Mar-93 $10,014 $9,993 $10,035
Jun-93 $10,132 $10,112 $10,091
Sep-93 $10,227 $10,151 $10,140
Dec-93 $10,336 $10,323 $10,188
Mar-94 $10,322 $10,320 $10,286
Jun-94 $10,426 $10,397 $10,342
Sep-94 $10,524 $10,500 $10,440
Dec-94 $10,592 $10,459 $10,461
Mar-95 $10,791 $10,694 $10,580
Jun-95 $10,965 $10,905 $10,657
Oct-95 $11,165 $11,155 $10,741
Past Performance is not predictive of future performance.
*Source: Lipper Analytical Services, Inc.
10
<PAGE>
OCTOBER 31, 1995
- --------------------------------------------------------------------------------
TAX-EXEMPT INTERMEDIATE-TERM
With a total return of 10.41%, Tax-Exempt Intermediate-Term outperformed
the benchmark Lehman 5-Year General Obligation Index's 10.35% return for the
12-month period ended October 31, 1995. Believing that continued economic growth
could lead to higher inflation and higher interest rates, fund managers
positioned Tax-Exempt Intermediate-Term defensively at the beginning of the
period.
As it became apparent that both inflation and interest rates would remain
subdued, the portfolio managers extended the weighted average maturity from 6.4
years to 7.5 years, and weighted average duration extended from 4.92 years to
5.42 years. The strategy proved beneficial in the second half of the period when
seven-year securities provided among the best combinations of yield and price
appreciation in this maturity sector. Recently, in the face of continuing
appreciation of longer-term securities, fund managers have added 10- to 15-year
securities to the fund's portfolio, balancing the weighted average maturity with
shorter-term bonds.
The fund's holdings at the end of the period reflected Twentieth Century's
strong emphasis on high quality, with 68% of the fund invested in AAA-rated
securities.
- --------------------------------------------------------------------------------
Quality Diversification (as of October 31, 1995)
- -----------------------------------------------
(Moody's ratings) % of fund investments
AAA 68%
AA 14%
A 17%
BBB 1%
Average Weighted Maturity (as of October 31, 1995)
- -------------------------------------------------
Years 7.5
Average weighted maturity indicates the average time until the principal on the
Fund's bonds is expected to be repaid, weighted by dollar amount.
Duration (as of October 31, 1995)
- --------------------------------
Years 5.42
Duration is a measure of the sensitivity of a portfolio to changes in interest
rates. As the duration of a fund increases, the impact of a change in interest
rates on the value of its portfolio also increases.
- --------------------------------------------------------------------------------
Average Annual Total Returns (as of October 31, 1995)
Tax-Exempt Lehman 5-Year Gen.
Intermediate-Term Obligation Index
--------------------------------------------
1 Year 10.41% 10.35%
5 Year 7.17% 7.47%
Inception 6.11% 6.45%
- --------------------------------------------------------------------------------
Asset Allocation (as of October 31, 1995)
Percent of fund investments.
Other Revenue 37% Electric Revenue 9%
General Obligations 18% Education Revenue 4%
Hospital Revenue 15% Housing Revenue 3%
Water and Sewer Revenue 14%
- --------------------------------------------------------------------------------
[mountain graph. graph data described below]
$10,000 Over Life of Fund (as of October 31, 1995)
Value on 10/31/95: $16,717 Tax-Exempt Intermediate-Term made 3/2/87
$17,327 Lehman 5-Year General Obligation Index
$13,769 Consumer Price Index*
$10,000 lump sum investment made on 3/2/87 (inception date)
LEHMAN 5-YEAR
TAX-EXEMPT GEN. OBLIGATION
INTMT-TERM INDEX CPI*
$10,000 $10,000 $10,000
Mar-87 $9,958 $9,943 $10,045
Jun-87 $9,856 $9,852 $10,171
Sep-87 $9,720 $9,649 $10,299
Dec-87 $10,036 $10,017 $10,338
Mar-88 $10,235 $10,328 $10,436
Jun-88 $10,402 $10,371 $10,571
Sep-88 $10,521 $10,489 $10,732
Dec-88 $10,640 $10,553 $10,795
Mar-89 $10,630 $10,524 $10,956
Jun-89 $10,964 $11,018 $11,117
Sep-89 $11,070 $11,141 $11,198
Dec-89 $11,349 $11,474 $11,296
Mar-90 $11,394 $11,529 $11,529
Jun-90 $11,575 $11,787 $11,636
Sep-90 $11,700 $11,912 $11,888
Dec-90 $12,062 $12,307 $11,986
Mar-91 $12,316 $12,572 $12,094
Jun-91 $12,505 $12,792 $12,184
Sep-91 $12,885 $13,246 $12,291
Dec-91 $13,275 $13,690 $12,353
Mar-92 $13,348 $13,679 $12,479
Jun-92 $13,720 $14,124 $12,561
Sep-92 $13,976 $14,475 $12,659
Dec-92 $14,228 $14,705 $12,712
Mar-93 $14,581 $15,079 $12,864
Jun-93 $14,925 $15,435 $12,936
Sep-93 $15,305 $15,768 $12,998
Dec-93 $15,518 $15,962 $13,061
Mar-94 $14,969 $15,459 $13,186
Jun-94 $15,142 $15,667 $13,257
Sep-94 $15,262 $15,793 $13,383
Dec-94 $15,198 $15,741 $13,410
Mar-95 $15,832 $16,380 $13,563
Jun-95 $16,194 $16,798 $13,662
Oct-95 $16,717 $17,327 $13,769
Past Performance is not predictive of future performance.
*Source: Lipper Analytical Services, Inc.
11
<PAGE>
- --------------------------------------------------------------------------------
TAX-EXEMPT LONG-TERM
The amount of the Tax-Exempt Long-Term portfolio invested in AAA-rated
securities, the highest quality rating available, reached 62% at the end of the
period. The fund's 14.45% total return for the 12 months slightly trails its
benchmark Lehman Muni Bond Index, which returned 14.84%.
Although Tax-Exempt Long-Term entered the 12 months in a moderately
defensive position, portfolio managers extended the fund's weighted average
maturity as economic and market conditions changed early in 1995. Because we
believed shorter-term securities-those with maturities of five or fewer
years-had already experienced their greatest price appreciation, fund managers
replaced these securities with attractively priced longer-term bonds, those with
maturities of 15 to 30 years. As a result of this positioning, Tax-Exempt
Long-Term's weighted average maturity was extended from 15.5 years to 18.4
years, and the weighted average duration was extended from 7.78 years to 9.06
years. The repositioning enabled the fund to benefit from the municipal security
rally near the end of the period.
- --------------------------------------------------------------------------------
Quality Diversification (as of October 31, 1995)
- -----------------------------------------------
(Moody's ratings) % of fund investments
AAA 62%
AA 24%
A 12%
BB 2%
Average Weighted Maturity (as of October 31, 1995)
- -------------------------------------------------
Years 18.4
Average weighted maturity indicates the average time until the principal on the
Fund's bonds is expected to be repaid, weighted by dollar amount.
Duration (as of October 31, 1995)
- --------------------------------
Years 9.06
Duration is a measure of the sensitivity of a portfolio to changes in interest
rates. As the duration of a fund increases, the impact of a change in interest
rates on the value of its portfolio also increases.
- --------------------------------------------------------------------------------
Average Annual Total Returns (as of October 31, 1995)
Tax-Exempt Lehman Muni
Long-Term Bond Index
-----------------------------
1 Year 14.45% 14.84%
5 Year 8.56% 8.78%
Inception 7.31% 7.75%
- --------------------------------------------------------------------------------
Asset Allocation (as of October 31, 1995)
Percent of fund investments.
Other Revenue 41% Hospital Revenue 4%
General Obligations 15% Indust. Dev. Revenue 4%
Water and Sewer Revenue 14% Housing Revenue 2%
Electric Revenue 14% Temporary Cash Investments 2%
Education Revenue 4%
- --------------------------------------------------------------------------------
[mountain graph. graph data described below]
$10,000 Over Life of Fund (as of October 31, 1995)
Value on 10/31/95: $18,424 Tax Exempt Long-Term made 3/2/87
$19,092 Lehman Muni Bond Index
$13,769 Consumer Price Index*
$10,000 lump sum investment made on 3/2/87 (inception date)
TAX-EXEMPT LEHMAN MUNI
LONG-TERM BOND INDEX CPI*
$10,000 $10,000 $10,000
Mar-87 $9,890 $9,955 $10,045
Jun-87 $9,620 $9,777 $10,171
Sep-87 $9,109 $9,510 $10,299
Dec-87 $9,790 $10,062 $10,338
Mar-88 $10,207 $10,441 $10,436
Jun-88 $10,259 $10,564 $10,571
Sep-88 $10,455 $10,774 $10,732
Dec-88 $10,606 $10,856 $10,795
Mar-89 $10,642 $10,980 $10,956
Jun-89 $11,612 $11,855 $11,117
Sep-89 $11,651 $11,989 $11,198
Dec-89 $12,089 $12,435 $11,296
Mar-90 $11,657 $12,335 $11,529
Jun-90 $12,086 $12,786 $11,636
Sep-90 $12,036 $12,896 $11,888
Dec-90 $12,820 $13,548 $11,986
Mar-91 $13,086 $13,926 $12,094
Jun-91 $13,233 $14,154 $12,184
Sep-91 $14,123 $14,958 $12,291
Dec-91 $15,063 $15,717 $12,353
Mar-92 $14,739 $15,516 $12,479
Jun-92 $15,349 $16,143 $12,561
Sep-92 $16,027 $16,837 $12,659
Dec-92 $15,905 $16,882 $12,712
Mar-93 $16,596 $17,579 $12,864
Jun-93 $17,024 $18,045 $12,936
Sep-93 $17,547 $18,516 $12,998
Dec-93 $17,519 $18,527 $13,061
Mar-94 $16,949 $17,996 $13,186
Jun-94 $16,671 $17,810 $13,257
Sep-94 $16,706 $17,919 $13,383
Dec-94 $16,733 $17,987 $13,410
Mar-95 $17,621 $18,893 $13,563
Jun-95 $18,869 $20,044 $13,662
Oct-95 $18,424 $19,092 $13,769
Past Performance is not predictive of future performance.
*Source: Lipper Analytical Services, Inc.
12
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS October 31, 1995
CASH RESERVE
- --------------------------------------------------------------------------------
Principal Amount Value
- --------------------------------------------------------------------------------
($ In Thousands)
COMMERCIAL PAPER
Aerospace & Defense-1.9%
$14,000 AlliedSignal Inc., 5.75%, 11-9-95 $13,982
14,500 Raytheon Co., 5.73%, 11-17-95 14,463
------
28,445
------
Agriculture-0.6%
8,100 Cargill Financial Services Corp.,
5.70%, 12-21-95 (Acquired 6-30-95;
Cost $7,877)+ 8,036
-----
Automobiles & Auto Parts-5.9%
40,000 Daimler-Benz North America
Corp., 5.79%-5.95%, 12-6-95
through 12-22-95 39,720
47,000 Ford Motor Credit Co.,
5.67%-5.70%, 11-8-95
through 12-4-95 46,858
------
86,578
------
Banking-10.3%
53,000 ABN Amro-Canada, 5.56%-5.72%,
12-1-95 through 3-5-96 52,122
40,000 Abbey National PLC, 5.67%,
12-5-95 39,786
40,000 Toronto-Dominion Bank,
5.68%, 12-29-95 39,634
19,900 Union Bank of Switzerland,
5.90%, 11-1-95 19,900
-------
151,442
-------
Chemicals & Resins-5.0%
9,300 Air Products & Chemicals, 5.64%-
5.77%, 11-3-95 through 12-11-95 9,261
23,500 Bayer AG, 5.70%, 12-20-95 23,318
42,100 du Pont (E.I.) de Nemours & Co.,
5.50%-5.68%, 11-15-95 through
8-1-96 (Acquired 8-24-95 through
8-30-95; Cost $40,258)+ 40,755
------
73,334
------
Communications Services-7.8%
63,000 AT&T Corp., 5.56%-5.59%,
1-10-96 through 3-14-96 62,023
28,400 Ameritech Capital Funding
Corp., 5.58%-5.67%, 12-11-95
through 12-21-95 28,184
25,000 BellSouth Telecommunications
Inc., 5.71%, 11-17-95 24,936
------
115,143
-------
Diversified Companies-3.7%
54,400 General Electric Capital
Corp., 5.63%-5.73%, 11-7-95
through 2-9-96 54,040
------
Education-1.6%
24,000 Stanford University,
5.47%-5.62%, 12-14-95
through 2-5-96 23,770
------
Electrical & Electronic Components-1.3%
18,500 Siemens Corp., 5.65%, 11-20-95 18,445
------
Energy-3.8%
30,000 Exxon Imperial USA Inc.,
5.58%-5.73%, 11-20-95
through 12-20-95
(Acquired 6-26-95 through
10-12-95; Cost $29,283)+ 29,795
25,398 Statoil (Den Norske Stats
Oljeselskap A/S),
5.74%-5.75%, 11-8-95
through 11-29-95 25,345
------
55,140
------
Financial Services-4.4%
15,500 American Express Credit Corp.,
5.70%, 11-6-95 15,488
50,000 Goldman Sachs Group, L.P.,
5.67%-5.73%, 11-22-95
through 11-24-95 49,828
------
65,316
------
Food & Beverage-3.1%
10,796 Brown-Forman Corp., 5.70%-5.72%,
11-13-95 through 12-11-95 10,748
28,000 Hershey Foods Corp., 5.72%, 12-1-95
(Acquired 10-18-95; Cost $27,804)+ 27,867
4,500 Pepsico Inc., 5.70%, 12-8-95
(Acquired 10-27-95; Cost $4,470)+ 4,474
2,500 Unilever Capital Corp.,
5.60%, 12-11-95 2,484
-----
45,573
------
Industrial Equipment & Machinery-2.9%
42,823 Dover Corp., 5.75%-5.76%, 11-3-95
through 11-9-95 (Acquired
10-4-95 through 10-27-95;
Cost $42,629)+ 42,783
------
13
See Notes to Financial Statements
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS (CONTINUED) October 31, 1995
CASH RESERVE (CONTINUED)
- --------------------------------------------------------------------------------
Principal Amount Value
- --------------------------------------------------------------------------------
($ In Thousands)
Insurance-11.5%
$46,200 American Family Financial
Services Inc., 5.72%-5.76%,
11-7-95 through 12-12-95 $46,052
13,000 Aon Corp., 5.67%-5.71%,
11-28-95 through 12-11-95 12,938
57,581 Metlife Funding Inc.,
5.70%, 12-7-95 57,253
13,000 Principal Mutual Life
Insurance Co., 5.73%,
11-10-95 through 11-13-95 12,976
13,900 SAFECO Credit Co. Inc.,
5.70%, 12-22-95 13,788
27,000 USAA Capital Corp., 5.65%-5.68%,
12-11-95 through 12-19-95 26,801
------
169,808
-------
Metals & Mining-3.9%
22,200 RTZ America Inc., 5.69%, 2-5-96
(Acquired 10-26-95; Cost $21,842)+ 21,863
35,785 U.S. Borax & Chemical Corp., 5.65%-
5.70%, 11-16-95 through 1-26-96
(Acquired 8-9-95 through
10-30-95; Cost $35,246)+ 35,563
------
57,426
------
Office Equipment & Supplies-2.4%
36,000 Pitney Bowes Credit Corp., 5.64%-
5.68%, 11-6-95 through 12-4-95 35,923
------
Paper & Forest Products-0.8%
12,000 Weyerhaeuser Mortgage Co.,
5.73%, 11-16-95 11,971
------
Pharmaceuticals-3.0%
25,000 Lilly (Eli) & Co., 5.70%, 11-30-95 24,885
20,000 Sandoz Corp., 5.70%, 12-8-95
(Acquired 10-17-95;
Cost $19,835)+ 19,883
------
44,768
------
Publishing-4.3%
18,500 Dow Jones & Co. Inc.,
5.65%-5.68%, 11-17-95
through 12-11-95
(Acquired 8-31-95; Cost $18,237)+ 18,416
44,300 Reed Elsevier Inc., 5.29%-5.30%,
12-4-95 (Acquired 10-23-95
through 10-25-95;
Cost $44,031)+ 44,085
------
62,501
------
Retail (General Merchandise)-0.9%
$12,800 Penney (J.C.) Company, Inc.,
5.72%, 11-27-95 $12,747
------
Sovereign Governments & Agencies-7.3%
16,000 Canadian Wheat Board,
5.55%-5.58%, 2-27-96 15,708
50,700 Sweden (Kingdom of),
5.58%-5.71%, 12-4-95
through 3-20-96 50,096
42,000 Ontario Hydro, 5.68%, 12-29-95 41,616
------
107,420
-------
Tobacco Products-2.3%
33,900 BAT Capital Corp., 5.72%,
11-27-95 through 11-29-95 33,756
------
Utilities (Electric)-1.4%
20,000 National Rural Utilities
Cooperative
Finance Corp., 5.70%, 12-6-95 19,889
------
Total Commercial Paper-90.1% 1,324,254
---------
CERTIFICATES OF DEPOSIT
17,000 Abbey National PLC,
5.72%, 10-21-96 17,000
38,000 Deutsche Bank, 5.75%, 11-10-95 38,000
------
Total Certificates of Deposit-3.7% 55,000
------
MUNICIPAL OBLIGATIONS
22,000 Orange County, CA, VRN,
6.825%, 6-30-96
(LOC: State Street Bank)++ 22,000
16,500 Orange County, CA, VRN,
6.825%, 6-30-96++ 16,500
------
Total Municipal Obligations-2.6% 38,500
------
U.S. GOVERNMENT AGENCY SECURITIES
18,100 FNMA, 5.59%, 7-1-96 18,087
24,500 FNMA, 5.76%, 9-3-96 24,500
10,000 SLMA, MTN, 5.90%, 10-4-96 10,000
------
Total U.S. Government Agency Securities-3.6% 52,587
------
TOTAL INVESTMENT SECURITIES-100.0% $1,470,341
=========
14
See Notes to Financial Statements
<PAGE>
+ Private placement securities exempt from registration under rule 144A of the
Securities Act of 1933. These securities may only be resold in transactions
exempt from registration, normally to qualified institutional investors. The
aggregate value of these securities at October 31, 1995, was $293,520 which
represented 19.97% of net assets.
++ This security has been downgraded by both Moody's and S&P, due to the
bankruptcy filing of Orange County, California. According to Securities and
Exchange Commission Regulations, this security is no longer considered an
eligible security without Board of Directors approval. On December 7, 1994, the
Board of Directors determined that it was not in the best interest of the Fund
to dispose of this security. This security was originally due to mature on July
10, 1995. Orange County revised the terms of this security to extend the
maturity to June 30, 1996. The revised terms also included an increase in the
security's interest rate and an interest payment schedule requiring partial
payments of interest prior to June 30, 1996, with the remaining interest
payments due at maturity. See Note 2 of the accompanying Notes to the Financial
Statements.
U.S. GOVERNMENTS SHORT-TERM
- --------------------------------------------------------------------------------
Principal Amount Value
- --------------------------------------------------------------------------------
($ In Thousands)
U.S. TREASURY SECURITIES
$14,500 U.S. Treasury Notes,
6.25%, 8-31-96 $14,577
20,500 U.S. Treasury Notes,
8.00%, 10-15-96 20,956
11,100 U.S. Treasury Notes,
7.50%, 1-31-97 11,352
25,400 U.S. Treasury Notes,
6.75%, 2-28-97 25,768
21,400 U.S. Treasury Notes,
8.50%, 4-15-97 22,249
18,200 U.S. Treasury Notes,
6.50%, 5-15-97 18,435
10,500 U.S. Treasury Notes,
6.125%, 5-31-97 10,579
24,800 U.S. Treasury Notes,
5.875%, 7-31-97 24,910
18,000 U.S. Treasury Notes,
6.50%, 8-15-97 18,267
31,600 U.S. Treasury Notes,
7.375%, 11-15-97 32,647
23,200 U.S. Treasury Notes,
6.00%, 12-31-97 23,385
23,100 U.S. Treasury Notes,
7.875%, 1-15-98 24,154
13,115 U.S. Treasury Notes,
4.75%, 8-31-98 12,799
20,570 U.S. Treasury Notes,
7.75%, 12-31-99 22,041
27,985 U.S. Treasury Notes,
7.75%, 1-31-00 30,010
11,025 U.S. Treasury Notes,
5.75%, 8-15-03 10,881
------
Total U.S. Treasury Securities-83.4% 323,010
(Cost $319,682) -------
MORTGAGE-BACKED SECURITIES*
12,346 FHLMC Series 1702-B
TA PAC REMIC,
5.85%, 9-15-97 12,264
16,650 FHLMC Series 1576
PD PAC REMIC,
5.50%, 3-15-98 16,410
5,000 FNMA 93 Series 185
PB PAC REMIC,
4.90%, 11-15-96 4,923
13,000 FNMA 92 Series 18
G PAC REMIC,
7.15%, 12-15-98 13,240
------
Total Mortgage-Backed Securities-12.1% 46,837
(Cost $46,483) ------
TEMPORARY CASH INVESTMENTS-4.5%
Repurchase Agreement
(Goldman Sachs & Co., Inc.),
5.75%, due 11-1-95; collateralized by
$14,395 par value U.S. Treasury
Bonds, 8.00%, due 11-15-21
(Delivery value $17,302) 17,299
(Cost $17,299) ------
Total Investment Securities-100.0% $387,146
(Cost $383,464) =======
15
See Notes to Financial Statements
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS (CONTINUED) October 31, 1995
U.S. GOVERNMENTS INTERMEDIATE-TERM
- --------------------------------------------------------------------------------
Principal Amount Value
- --------------------------------------------------------------------------------
($ In Thousands)
U.S. TREASURY SECURITIES
$205 U.S. Treasury Notes,
6.875%, 3-31-97 $209
1,400 U.S. Treasury Notes,
6.125%, 5-31-97 1,410
660 U.S. Treasury Notes,
8.50%, 7-15-97 691
300 U.S. Treasury Notes,
6.50%, 8-15-97 304
990 U.S. Treasury Notes,
6.00%, 11-30-97 997
305 U.S. Treasury Notes,
7.875%, 1-15-98 319
1,000 U.S. Treasury Notes,
5.875%, 8-15-98 1,005
1,000 U.S. Treasury Notes,
5.875%, 3-31-99 1,005
700 U.S. Treasury Notes,
6.875%, 8-31-99 726
485 U.S. Treasury Notes,
7.125%, 9-30-99 507
1,100 U.S. Treasury Notes,
7.50%, 10-31-99 1,167
500 U.S. Treasury Notes,
5.875%, 6-30-00 502
500 U.S. Treasury Notes,
6.125%, 7-31-00 506
550 U.S. Treasury Notes,
6.25%, 8-31-00 561
1,000 U.S. Treasury Notes,
6.125%, 9-30-00 1,014
1,145 U.S. Treasury Notes,
7.75%, 2-15-01 1,244
1,600 U.S. Treasury Notes,
7.50%, 5-15-02 1,739
1,120 U.S. Treasury Notes,
5.75%, 8-15-03 1,105
1,060 U.S. Treasury Bonds,
11.625%, 11-15-04 1,468
905 U.S. Treasury Bonds,
9.125%, 5-15-09 1,082
250 U.S. Treasury Bonds,
11.25%, 2-15-15 386
310 U.S. Treasury Bonds,
8.125%, 8-15-19 373
----
Total U.S. Treasury Securities-85.6% 18,320
(Cost $17,824) ------
MORTGAGE-BACKED SECURITIES*
360 FHLMC Series 1702-B
TA PAC REMIC,
5.85%, 9-15-97 358
300 FHLMC Series 1576
PD PAC REMIC,
5.50%, 3-15-98 296
219 FHLMC Pool #E00279,
6.50%, 1-15-00 217
300 FHLMC Series 1684
D PAC REMIC,
5.35%, 8-15-00 293
1,485 FNMA Series 1993-5
G PAC REMIC,
7.15%, 5-15-01 1,522
-----
Total Mortgage-Backed Securities-12.6% 2,686
(Cost $2,628) -----
TEMPORARY CASH INVESTMENTS-1.8%
Repurchase Agreement (Goldman
Sachs & Co., Inc.), 5.75%, due
11-1-95; collateralized by $300
par value U.S. Treasury Bonds,
9.00%, due 11-15-18
(Delivery value $389) 389
(Cost $389) ---
TOTAL INVESTMENT SECURITIES-100.0% $21,395
(Cost $20,841) ======
LIMITED-TERM BOND
- --------------------------------------------------------------------------------
Principal Amount Value
- --------------------------------------------------------------------------------
($ In Thousands)
U.S. TREASURY SECURITIES
$250 U.S. Treasury Notes,
5.125%, 3-31-96 $250
16
See Notes to Financial Statements
<PAGE>
- --------------------------------------------------------------------------------
Principal Amount Value
- --------------------------------------------------------------------------------
($ In Thousands)
$400 U.S. Treasury Notes,
5.875%, 5-31-96 $401
200 U.S. Treasury Notes,
5.625%, 6-30-97 200
1,000 U.S. Treasury Notes,
5.875%, 8-15-98 1,005
-----
Total U.S. Treasury Securities-26.0% 1,856
(Cost $1,849) -----
MORTGAGE-BACKED SECURITIES*-12.1%
868 FHLMC Series 1239 E PAC
REMIC, 6.80%, 4-15-96 868
(Cost $868) ---
CORPORATE BONDS
Automobiles & Auto Parts-6.5%
200 Ford Motor Credit Co.,
7.75%, 10-1-99 210
250 General Motors Acceptance
Corp., MTN, 7.30%, 2-2-98 256
---
466
---
Banking-9.1%
200 Chase Manhattan Corp.,
8.80%, 2-1-00 206
200 Golden West Financial Corp.,
9.15%, 5-23-98 214
200 Republic New York Corp.,
9.75%, 12-1-00 230
---
650
---
Financial Services-11.4%
100 Commercial Credit Co.,
5.75%, 7-15-00 98
275 Lehman Brothers Holdings Inc.,
MTN, 8.875%, 2-15-00 297
200 Paine Webber Group Inc.,
MTN, 7.96%, 4-28-00 210
200 Standard Credit Card Trust
Series 1995-2, 8.625%, 1-7-00 208
---
813
---
Food & Beverage-3.0%
200 Nabisco, Inc., 8.00%, 1-15-00 212
---
Industrial Equipment & Machinery-4.3%
300 Caterpillar Financial Services
Corp., MTN, 7.46%, 10-15-97 309
---
Insurance-2.9%
200 American General Corp.,
7.70%, 10-15-99 210
---
Paper & Forest Products-2.9%
200 Boise Cascade Co.,
7.375%, 8-1-97 204
---
Retail (General Merchandise)-3.0%
200 Sears, Roebuck & Co., Inc.,
MTN, 8.00%, 2-16-99 211
---
Tobacco Products-4.3%
100 Philip Morris Companies Inc.,
7.50%, 3-15-97 102
200 Philip Morris Companies Inc.,
7.375%, 2-15-99 206
---
308
---
Utilities-8.5%
200 Cincinnati Gas & Electric Co.,
5.80%, 2-15-99 198
200 Duke Power Co., 8.00%, 11-1-99 214
200 Texas Utilities Electric Co.,
5.75%, 7-1-98 198
---
610
---
Total Corporate Bonds-55.9% 3,993
(Cost $3,917) -----
TEMPORARY CASH INVESTMENTS
Repurchase Agreement (Goldman Sachs
& Co., Inc.), 5.75%, due 11-1-95;
collateralized by $275 par value
U.S. Treasury Bonds, 8.00%,
due 11-15-21 (Delivery value $327) 327
100 Units of Participation in Provident
Institutional Funds (TempCash
Portfolio) 100
---
Total Temporary Cash Investments-6.0% 427
(Cost $427) ---
Total Investment Securities-100.0% $7,144
(Cost $7,061) -----
17
See Notes to Financial Statements
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS (CONTINUED) October 31, 1995
INTERMEDIATE-TERM BOND
- --------------------------------------------------------------------------------
Principal Amount Value
- --------------------------------------------------------------------------------
($ In Thousands)
U.S. TREASURY SECURITIES
$1,000 U.S. Treasury Notes,
5.875%, 6-30-00 $1,003
1,500 U.S. Treasury Notes,
5.75%, 10-31-00 1,497
250 U.S. Treasury Notes,
6.50%, 8-15-05 259
---
Total U.S. Treasury Securities-21.8% 2,759
(Cost $2,751) -----
MORTGAGE-BACKED SECURITIES*-6.9%
874 FHLMC Pool #E00279,
6.50%, 1-15-00 869
(Cost $877) ---
CORPORATE BONDS
Automobiles & Auto Parts-4.4%
200 Ford Motor Credit Co.,
7.75%, 10-1-99 210
300 General Motors Corp.
Global Notes, 9.625%, 12-01-00 342
---
552
---
Banking-11.8%
200 Abbey National First Capital
B.V., 8.20%, 10-15-04 221
500 BankAmerica Corp.,
7.75%, 7-15-02 534
200 Chase Manhattan Corp.,
8.80%, 2-1-00 206
300 KeyCorp, MTN, 7.30%, 2-3-03 312
200 Wells Fargo & Co.,
8.375%, 5-15-02 221
---
1,494
-----
Energy-3.6%
200 Occidental Petroleum Corp.,
10.125%, 11-15-01 236
200 Texaco Capital Inc., 9.45%, 3-1-00 224
---
460
---
Financial Services-5.7%
100 Commercial Credit Co.,
5.75%, 7-15-00 98
300 Paine Webber Group Inc.,
MTN, 7.96%, 4-28-00 315
300 Standard Credit Card Trust Series
1995-2, 8.625%, 1-7-00 312
---
725
---
Food & Beverage-5.2%
300 Nabisco, Inc., 8.00%, 1-15-00 318
300 Seagram Co. Ltd., 8.35%, 11-15-06 337
---
655
---
Industrial Equipment & Machinery-2.4%
300 Caterpillar Financial Services
Corp., MTN, 7.46%, 10-15-97 309
---
Insurance-7.9%
200 American General Corp.,
7.70%, 10-15-99 210
200 American General Corp.,
6.75%, 6-15-05 202
300 Delphi Financial Group, Inc.,
8.00%, 10-1-03 292
300 London Insurance Group,
6.875%, 9-15-05 302
---
1,006
-----
Paper & Forest Products-2.2%
250 Boise Cascade Corp.,
9.90%, 3-15-00 280
---
Retail (General Merchandise)-5.3%
200 Sears, Roebuck & Co., Inc.,
MTN, 8.29%, 6-10-02 219
125 Sears, Roebuck & Co., Inc.,
MTN, 8.23%, 10-21-04 139
200 Wal-Mart Stores, Inc.,
6.75%, 5-15-02 205
100 Wal-Mart Stores, Inc.,
7.50%, 5-15-04 107
---
670
---
Tobacco Products-3.3%
100 Philip Morris Companies Inc.,
7.50%, 3-15-97 102
200 Philip Morris Companies Inc.,
7.375%, 2-15-99 207
100 Philip Morris Companies Inc.,
7.50%, 1-15-02 105
---
414
---
Utilities-8.9%
300 Baltimore Gas & Electric Co.,
8.375%, 8-15-01 331
300 Duke Power Co., 8.00%, 11-1-99 320
18
See Notes to Financial Statements
<PAGE>
- --------------------------------------------------------------------------------
Principal Amount Value
- --------------------------------------------------------------------------------
($ In Thousands)
$250 Idaho Power Co., 8.65%, 1-1-00 $273
200 Texas Utilities Electric Co.,
5.75%, 7-1-98 198
---
1,122
-----
Total Corporate Bonds-60.7% 7,687
(Cost $7,492) -----
SOVEREIGN GOVERNMENTS & AGENCIES
200 Hydro-Quebec, 7.375%, 2-1-03 208
250 Province of Ontario Global
Bonds, 6.125%, 6-28-00 249
---
Total Sovereign Governments & Agencies-3.6% 457
(Cost $445) ---
TEMPORARY CASH INVESTMENTS
500 par value FFCB Discount Note,
5.58%, 12-7-95 497
Repurchase Agreement (Goldman
Sachs & Co., Inc.), 5.75%, due
11-1-95; collateralized by $330 par
value U.S. Treasury Bonds, 8.00%,
due 11-15-21 (Delivery value $392) 392
---
Total Temporary Cash Investments-7.0% 889
(Cost $889) ---
Total Investment Securities-100.0% 12,661
(Cost $12,454) ======
LONG-TERM BOND
- --------------------------------------------------------------------------------
Principal Amount Value
- --------------------------------------------------------------------------------
($ In Thousands)
U.S. TREASURY SECURITIES
5,000 U.S. Treasury Notes,
5.125%, 3-31-96 4,992
2,000 U.S. Treasury Notes,
6.875%, 10-31-96 2,025
5,000 U.S. Treasury Notes,
5.625%, 6-30-97 5,002
4,000 U.S. Treasury Notes,
5.875%, 7-31-97 4,018
4,000 U.S. Treasury Notes,
5.75%, 9-30-97 4,011
5,000 U.S. Treasury Notes,
5.625%, 10-31-97 5,002
5,000 U.S. Treasury Notes,
5.75%, 10-31-00 4,989
2,000 U.S. Treasury Bonds,
6.875%, 8-15-25 2,148
-----
Total U.S. Treasury Securities-21.9% 32,187
(Cost $32,106) ------
U.S. GOVERNMENT AGENCIES-1.3%
2,000 Tennessee Valley Authority,
6.875%, 12-15-43 1,932
(Cost $1,854) -----
MORTGAGE-BACKED SECURITIES*
1,695 FHLMC Series 19 E PAC REMIC,
8.00%, 11-15-96 1,726
1,000 FHLMC Series 116 F PAC REMIC,
8.50%, 5-15-99 1,068
2,804 FNMA 91 Series 21 G PAC REMIC,
6.00%, 3-25-96 2,781
1,926 FNMA 90 Series 88 H PAC REMIC,
7.75%, 8-25-96 1,956
1,534 FNMA 89 Series 35 G REMIC,
9.50%, 2-15-99 1,623
-----
Total Mortgage-Backed Securities-6.2% 9,154
(Cost $8,327) -----
CORPORATE BONDS
Aerospace & Defense-1.5%
2,000 Boeing Co., 7.875%, 4-15-43 2,215
-----
Automobiles & Auto Parts-6.3%
3,000 Ford Motor Credit Co., 7.75%, 6-15-43 3,218
6,000 General Motors Acceptance Corp.,
MTN, 6.25%, 1-6-00 5,978
-----
9,196
-----
Banking-11.5%
5,000 Citicorp Euro, 7.00%, 1-2-04 5,106
4,000 First Bank System Inc., 7.625%, 5-1-05 4,285
3,000 First Union Corp., 8.77%, 11-15-04 3,281
4,000 KeyCorp, MTN, 7.30%, 2-3-03 4,165
-----
16,837
------
19
See Notes to Financial Statements
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS (CONTINUED) October 31, 1995
LONG-TERM BOND (CONTINUED)
- --------------------------------------------------------------------------------
Principal Amount Value
- --------------------------------------------------------------------------------
($ In Thousands)
Chemicals & Resins-7.1%
$5,000 ARCO Chemical Co.,
10.25%, 11-1-10 $6,713
3,000 Dow Capital B.V., 9.20%, 6-1-10 3,701
-----
10,414
------
Communications Services-5.1%
4,000 Motorola Inc., 6.50%, 9-1-25 4,065
3,000 TKR Cable I Inc.,
10.50%, 10-30-07 3,368
-----
7,433
-----
Energy (Production & Marketing)-1.6%
2,000 Texaco Capital Inc.,
8.625%, 4-1-32 2,408
-----
Financial Services-2.1%
3,000 Paine Webber Group Inc.,
MTN, 7.96%, 4-28-00 3,146
-----
Food & Beverage-2.9%
4,000 Nabisco, Inc., 8.00%, 1-15-00 4,235
-----
Insurance-3.8%
2,000 Delphi Financial Group, Inc.,
8.00%, 10-1-03 1,945
3,000 Lincoln National Corp.,
9.125%, 10-1-24 3,656
-----
5,601
-----
Paper & Forest Products-3.2%
1,000 Boise Cascade Corp.,
MTN, 9.80%, 4-15-03 1,165
2,000 Boise Cascade Corp.,
9.45%, 11-1-09 2,402
1,000 Georgia-Pacific Corp.,
9.50%, 12-1-11 1,201
-----
4,768
-----
Retail (General Merchandise)-7.7%
5,000 Sears, Roebuck & Co., Inc.,
9.375%, 11-1-11 6,156
5,000 Wal-Mart Stores Inc.,
6.75%, 5-15-02 5,131
-----
11,287
------
Tobacco Products-2.9%
4,000 Philip Morris Companies Inc.,
7.50%, 1-15-02 4,185
-----
Utilities-10.1%
5,000 Pacific Gas & Electric Co.,
5.50%, 6-1-99 4,894
5,000 Texas Utilities Electric Co.,
8.25%, 4-1-04 5,513
4,000 Union Electric Co.,
7.65%, 7-15-03 4,360
-----
14,767
------
Total Corporate Bonds-65.8% 96,492
(Cost $91,995) ------
SOVEREIGN GOVERNMENTS & AGENCIES-2.3%
3,000 Hydro-Quebec, 8.05%, 7-7-24 3,311
(Cost $3,251) -----
TEMPORARY CASH INVESTMENTS-2.5%
Repurchase Agreement (Goldman
Sachs & Co., Inc.), 5.75%, due
11-1-95; collateralized by $3,080
par value U.S. Treasury Bonds,
8.125%, due 8-15-21
(Delivery value $3,685) 3,684
(Cost $3,684) -----
Total Investment Securities-100.0% $146,760
(Cost $141,217) =======
TAX-EXEMPT SHORT-TERM
- --------------------------------------------------------------------------------
Principal Amount Value
- --------------------------------------------------------------------------------
($ In Thousands)
MUNICIPAL BONDS
Alabama-1.7%
1,000 Alabama GO, 5.70%, 3-1-98 1,036
-----
Alaska-0.9%
565 Alaska Industrial Development
and Export Auth. Rev., 4.70%,
4-1-96 567
---
20
See Notes to Financial Statements
<PAGE>
- --------------------------------------------------------------------------------
Principal Amount Value
- --------------------------------------------------------------------------------
($ In Thousands)
Arizona-3.2%
$1,000 Maricopa County Community
College District GO,
6.80%, 7-1-98 $1,067
375 Tucson Certificates of
Participation, 5.00%, 1-1-96
(Asset Guaranty) 375
535 Tucson Certificates of
Participation, 5.25%, 1-1-97
(Asset Guaranty) 539
---
1,981
-----
Arkansas-1.1%
690 Jefferson County Pollution Control
Rev., 3.40%, 12-15-95 (CFCG) 690
---
California-5.4%
2,000 California GO, 11.00%, 3-1-98 2,300
1,000 Los Angeles Municipal
Improvement Corp. Certificates
of Participation, 4.50%, 6-1-96 1,004
-----
3,304
-----
Florida-3.7%
1,200 Florida Housing Finance Agency
Rev., 5.50%, Mandatory Put
11-1-96 (FSA)* 1,222
1,000 Florida State Board of Education
GO, 5.40%, 6-1-00 1,044
-----
2,266
-----
Georgia-3.4%
1,000 Gwinnett County Water and Sewer
Rev., 6.50%, Prerefunded
8-1-98 at 102% of Par** 1,078
1,000 Metropolitan Atlanta Rapid
Transit Auth. Sales Tax Rev.,
6.80%, 7-1-96 1,019
-----
2,097
-----
Guam-2.5%
1,000 Government of Guam GO,
5.50%, 8-15-97 1,020
500 Guam Power Auth. Rev., 5.20%,
10-1-97 505
---
1,525
-----
Illinois-6.6%
1,015 Cook County GO,
5.75%, 11-15-99 (MBIA) 1,068
1,000 Illinois Development and Finance
Auth. Rev. (Wheaton Schools),
8.00%, 12-1-95 (MBIA) 1,003
1,960 Illinois Health Facilities Auth.
Rev. (OSF Healthcare), 3.80%,
11-15-95 1,960
-----
4,031
-----
Indiana-3.3%
1,960 Indiana Transportation Finance
Auth. Highway Rev., 6.70%,
6-1-97 2,036
-----
Kentucky-1.6%
1,000 Kentucky Development Finance
Auth. Rev. (Sisters of Charity
of Nazareth Health Corp.),
5.60%, 11-1-95 1,000
-----
Louisiana-2.4%
1,500 Louisiana Public Facilities Auth.
Rev. (Browning-Ferris Project),
3.85%, 11-1-96 1,486
-----
Maryland-4.2%
1,500 Baltimore County GO,
5.00%, 8-1-01 1,550
1,000 Maryland GO, 4.85%, 4-15-02 1,025
-----
2,575
-----
Massachusetts-3.4%
2,000 Massachusetts GO, 5.50%, 7-1-99 2,075
-----
Michigan-1.7%
500 Michigan Hospital Finance Auth.
Rev. (Genesys Health Systems),
6.10%, 10-1-96 506
500 Michigan Hospital Finance Auth.
Rev. (Genesys Health Systems),
6.40%, 10-1-97 511
---
1,017
-----
Minnesota-6.0%
1,200 Minneapolis Hospital Rev. (Lifespan
Inc.-Abbott Northwestern),
7.00%, Prerefunded 12-1-99 to
102% of Par** 1,345
1,000 Minnesota GO, 6.40%, 8-1-98 1,061
1,275 Southern Minnesota Municipal
Power Agency Rev., 4.70%,
1-1-02 (AMBAC) 1,282
-----
3,688
-----
Nevada-2.5%
500 Nevada GO, 5.20%, 4-1-96 503
1,010 Washoe County Hospital Facility
Rev. (Washoe Medical Center,
Inc.), 4.55%, 6-1-96 (AMBAC) 1,014
-----
1,517
-----
21
See Notes to Financial Statements
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS (CONTINUED) October 31, 1995
TAX-EXEMPT SHORT-TERM (CONTINUED)
- --------------------------------------------------------------------------------
Principal Amount Value
- --------------------------------------------------------------------------------
($ In Thousands)
New Jersey-3.0%
$1,750 West Windsor Plainsboro GO,
5.25%, 12-1-02 (FGIC) $1,828
-----
New York-4.1%
1,000 Nassau County GO, 6.30%,
11-1-96 (FGIC) 1,024
1,000 New York State Certificates of
Participation, 5.50%, 9-1-96 1,009
445 Port Authority of New York and
New Jersey Rev. Consolidated
Notes, Series SS, 4.90%, 9-1-97 446
---
2,479
-----
Ohio-1.5%
930 Montgomery County Water Rev.,
3.40%, 11-15-95 (AMBAC) 930
---
Oregon-4.4%
1,000 Oregon GO, 5.30%, 4-15-98 1,029
1,610 Washington County Unified
Sewer Agency Rev., 4.80%,
10-1-98 (AMBAC) 1,638
-----
2,667
-----
Pennsylvania-6.1%
900 Delaware County Health Care Rev.
(Mercy Health Corporation
Southeast), 4.125%, 11-15-95 900
750 Lehigh County Hospital Rev.
(St. Luke's Bethlehem Project),
3.50%, 11-15-95 (AMBAC) 750
2,000 Philadelphia Gas Works Rev.,
5.40%, 7-1-98 2,046
-----
3,696
-----
Puerto Rico-2.1%
1,280 Puerto Rico Electric Power Auth.
Rev., 4.25%, 7-1-97 1,282
-----
Tennessee-1.7%
1,000 Metropolitan Nashville Airport
Rev., 6.125%, 7-1-98 (FGIC) 1,045
-----
Texas-11.7%
1,780 Brownsville Utility System Rev.,
5.00%, 9-1-00 (AMBAC) 1,824
1,000 Colorado River Municipal Water
District Rev., 8.25%, Prerefunded
1-1-01 to Par (AMBAC)** 1,185
1,000 Houston Hotel Occupancy Tax
Rev., 5.00%, 7-1-97 (FSA) 1,013
1,000 Texas Public Finance Auth.
GO, 8.00%, 10-1-97 1,073
2,000 Texas Tax and Revenue
Anticipation Notes, Series A,
4.75%, 8-30-96 2,016
-----
7,111
-----
Utah-3.5%
500 Utah Board of Regents Student
Loan Rev., 7.00%, 11-1-95
(AMBAC) 500
1,600 Utah GO, 5.50%, 7-1-98 1,659
-----
2,159
-----
Washington-4.4%
1,680 Snohomish County Public Utility
District #1 Electric Rev.,
4.75%, 1-1-00 1,671
1,000 Washington Public Power Supply
System Rev. (Nuclear Project
#2), 3.75%, 7-1-97 989
---
2,660
-----
West Virginia-1.7%
1,000 West Virginia School Building
Auth. Capital Improvement
Rev., 6.25%, 7-1-96 1,012
-----
Total Municipal Bonds-97.8% 59,760
(Cost $59,267) ------
SHORT-TERM TAX-EXEMPT SECURITIES
Washington-0.8%
500 Washington State Housing
Finance Commission Rev.
(Inglenook Court Project),
4.15%, VRDO, 11-1-95
(LOC: Bank of America) 500
(Cost $500) ---
TEMPORARY CASH INVESTMENTS-1.4%
834 Units of Participation in Provident
Institutional Funds (Muni Fund
Portfolio) 834
(Cost $834) ---
Total Investment Securities-100.0% $61,094
(Cost $60,601) ======
22
See Notes to Financial Statements
<PAGE>
TAX-EXEMPT INTERMEDIATE-TERM
- --------------------------------------------------------------------------------
Principal Amount Value
- --------------------------------------------------------------------------------
($ In Thousands)
MUNICIPAL BONDS
Alabama-2.1%
$1,525 City of Huntsville GO,
5.50%, 2-1-05 $1,599
-----
California-2.7%
1,000 California GO, 6.25%, 9-1-08 1,089
1,000 Central Valley Financing Auth.
Rev. (Carson Ice-Generation
Project), 5.00%, 7-1-98 1,009
-----
2,098
-----
Colorado-1.4%
1,000 Denver Sales Tax Rev. (Major
League Baseball Stadium
District), 6.10%, 10-1-01 (FGIC) 1,086
-----
Connecticut-1.4%
1,040 Connecticut State Special Tax
Obligation Rev., 6.10%, 10-1-01 1,125
-----
District of Columbia-8.8%
2,000 District of Columbia GO, 4.65%,
6-1-02 (MBIA) 1,973
1,000 District of Columbia Hospital
Rev. (Medlantic Health Care
Group), 5.25%, 8-15-02 (MBIA) 1,033
1,275 Metropolitan Airport Auth.
General Rev., 6.30%, 10-1-03
(MBIA) 1,397
2,450 Metropolitan Area Transportation
Auth. Rev., 4.60%, 7-1-02 (FGIC) 2,452
-----
6,855
-----
Florida-1.8%
385 Florida State Certificates of
Participation, 5.75%, 11-15-95 385
1,000 Miami Beach Water and Sewer
Rev., 5.10%, 9-1-05 (FSA) 1,028
-----
1,413
-----
Georgia-2.8%
1,000 City of Atlanta Airport Facilities
Rev., 7.00%, 1-1-01 1,098
1,000 Metropolitan Atlanta Rapid
Transit Auth. Sales Tax Rev.,
6.05%, 7-1-01 1,071
-----
2,169
-----
Illinois-5.7%
2,000 Chicago O'Hare International
Airport Rev., 5.00%, 1-1-00
(MBIA) 2,030
2,250 Illinois GO, 6.00%, 10-1-01 2,409
-----
4,439
-----
Iowa-1.3%
1,000 Iowa Finance Auth. Rev.,
4.90%, 6-15-05 1,002
-----
Louisiana-1.4%
1,000 Louisiana GO, 7.00%, 8-1-02 1,063
-----
Maryland-1.3%
1,000 Maryland Health and Higher
Education Facilities Auth. Rev.
(Francis Scott Key Hospital),
5.00%, 7-1-03 (FGIC) 1,022
-----
Massachusetts-9.9%
2,605 Massachusetts Bay Transportation
Auth. Rev., 5.40%, 3-1-00 2,698
1,500 Massachusetts GO, 5.40%,
11-1-07 (MBIA) 1,550
2,000 Massachusetts Housing Finance
Agency Housing Rev., 5.90%,
1-1-03 (AMBAC) 2,072
1,000 Massachusetts State Refunding
GO, 4.95%, 8-1-05 (AMBAC) 1,006
360 Massachusetts Water Resources
Auth. Rev., 6.90%, 4-1-97** 375
---
7,701
-----
Mississippi-2.6%
2,000 Mississippi Hospital Equipment
and Facilities Auth. Rev. (North
Miss. Health Service), 5.00%,
5-15-00 (AMBAC) 2,035
-----
Missouri-1.4%
1,000 Missouri Board of Public
Buildings State Office Buildings
Special Obligation Rev., 6.30%,
12-1-05 1,075
-----
Nebraska-2.7%
2,000 Nebraska Investment Finance
Auth. Hospital Rev. (Methodist
Health), 6.55%, 3-1-99 (MBIA) 2,131
-----
New Jersey-9.1%
1,030 Atlantic City Board of Education
GO, 6.00%, 12-1-06 (AMBAC) 1,109
23
See Notes to Financial Statements
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS (CONTINUED) October 31, 1995
TAX-EXEMPT INTERMEDIATE-TERM (CONTINUED)
- --------------------------------------------------------------------------------
Principal Amount Value
- --------------------------------------------------------------------------------
($ In Thousands)
$1,410 New Jersey Educational Facility
Auth. Rev. (New Jersey
Institute of Technology),
5.90%, 7-1-08 (MBIA) $1,489
1,000 New Jersey Health Care
Facilities Financing Auth.
Rev. (Atlantic City Medical
Center), 6.15%, 7-1-99 1,047
1,000 New Jersey Transportation
System Trust Fund Auth.
Rev., 6.25%, 12-15-03 1,108
1,000 New Jersey Turnpike Auth.
Rev., 6.20%, 1-1-00 1,063
1,200 New Jersey Wastewater Treatment
Trust Rev., 7.25%, 5-15-02 1,288
-----
7,104
-----
New York-2.7%
2,045 New York State Medical Care
Facilities Finance Agency
Rev., 5.95%, 8-15-09 (FHA) 2,126
-----
Ohio-6.6%
1,450 Ohio Higher Educational
Facility Community Rev.
(University of Dayton), 5.55%,
12-1-07 (FGIC) 1,508
3,320 Ohio Water Development Auth.
Pollution Control Rev.,
6.00%, 12-1-05 (MBIA) 3,620
-----
5,128
-----
Oregon-6.0%
1,805 Lane County School District
#19 GO, 6.375%, 10-15-05 (MBIA) 2,012
1,000 Oregon State Department of
Transportation Rev., 5.50%,
6-1-00 (MBIA) 1,048
1,500 Washington County Unified
Sewerage Agency Rev., 5.30%,
10-1-01 (AMBAC) 1,567
-----
4,627
-----
Pennsylvania-11.3%
1,000 Harrisburg Lease Rev., 6.25%,
6-1-00 (Subject to Crossover
Refunding 7-1-96)(CGIC) 1,062
1,500 Pennsylvania Turnpike
Commission Rev., 6.25%,
6-1-01 (AMBAC) 1,626
2,000 Philadelphia Gas Works Rev.,
5.70%, 7-1-00 (CGIC) 2,098
1,000 Philadelphia Hospitals & Higher
Education Facilities Auth. Rev.
(Temple University Hosp.),
5.60%, 11-15-98 1,012
2,000 Philadelphia Water and
Wastewater Rev., 5.15%,
6-15-04 (FGIC) 2,050
1,000 Philadelphia Water and
Wastewater Rev., 5.00%,
6-15-12 (FGIC) 943
---
8,791
-----
Puerto Rico-1.4%
1,000 Puerto Rico Electric Power
Auth. Rev., 5.70%, 7-1-00 1,047
-----
Texas-9.2%
535 Austin Utility System Rev.,
7.50%, 11-15-98** 586
2,000 Brazos Higher Education Auth.
Student Loan Rev., 5.50%, 12-1-98 2,055
1,875 Brownsville Utility System Rev.,
6.00%, 9-1-08 (AMBAC) 2,028
1,000 City of Dallas-Fort Worth Regional
Airport Rev., 5.90%, 11-1-08
(MBIA) 1,044
1,340 Harris County Health Facility
Development Corp. Hospital
Rev. (St. Luke's Episcopal
Hosp.), 6.40%, 2-15-00 1,426
-----
7,139
-----
Utah-1.4%
1,000 Salt Lake County Municipal
Building Auth. Lease Rev.,
6.00%, 10-1-07 (MBIA) 1,071
-----
Virginia-2.2%
1,650 Chesapeake Bay Bridge and
Tunnel District Rev.,
5.20%, 7-1-02 (FGIC) 1,707
-----
Washington-2.8%
1,000 Tacoma Washington Electric
System Rev., 6.10%, 1-1-07
(FGIC) 1,080
24
See Notes to Financial Statements
<PAGE>
- --------------------------------------------------------------------------------
Principal Amount Value
- --------------------------------------------------------------------------------
($ In Thousands)
$1,000 Washington Public Power
Supply System Rev. (Nuclear
Project #2), 7.30%, 7-1-00 $1,103
-----
2,183
-----
TOTAL INVESTMENT SECURITIES-100% $77,736
(Cost $75,215) ======
TAX-EXEMPT LONG-TERM
- --------------------------------------------------------------------------------
Principal Amount Value
- --------------------------------------------------------------------------------
($ In Thousands)
MUNICIPAL BONDS
Alaska-0.2%
85 Alaska Housing Finance Corp.
Rev., 8.75%, 12-1-16 90
--
California-20.4%
1,000 California Department of Water
Resources Rev., (Central
Valley Project), 5.75%, 12-1-13 1,006
2,000 California Public Works Board
Lease Rev., 5.00%, 12-1-19 (AMBAC) 1,829
1,000 California Public Works Board
Lease Rev., 6.20%, 10-1-08 1,054
1,000 East Bay Municipal Utility
District Rev., 5.00%, 6-1-06
(MBIA) 1,003
1,400 Los Angeles County Metropolitan
Transit Auth. Sales Tax Rev.,
5.50%, 7-1-13 (MBIA) 1,387
1,000 Los Angeles County Metropolitan
Transit Auth. Sales Tax Rev.,
5.00%, 7-1-25 (AMBAC) 902
1,000 Los Angeles County Sanitation
District Auth. Rev.,
5.25%, 10-1-10 (MBIA) 982
1,500 Metropolitan Water District
Rev. (Southern California
Waterworks), 5.75%, 7-1-21 1,511
1,850 Northern California Power
Agency Rev. (Hydroelectric
Project #1), 6.25%, 7-1-12
(MBIA) 1,949
-----
11,623
------
Colorado-0.6%
300 Colorado Housing & Finance
Auth. Housing Rev., 8.70%,
9-1-07 321
---
Connecticut-1.9%
1,000 Connecticut GO, 6.00%, 3-15-12 1,066
-----
District of Columbia-1.9%
1,000 Metropolitan Area
Transportation Auth. Rev.,
6.00%, 7-1-10 (FGIC) 1,067
-----
Florida-4.9%
1,500 Reedy Creek Utility Rev.,
5.00%, 10-1-19 (MBIA) 1,378
1,350 Tampa Sports Auth. Sales Tax
Rev. (Tampa Bay Arena Project),
5.75%, 10-1-25 (MBIA) 1,400
-----
2,778
-----
Georgia-1.7%
1,000 DeKalb County GO, 5.50%,
1-1-16 985
---
Illinois-9.8%
1,000 City of Chicago Rev. (Peoples
Gas, Light and Coke Co.),
7.50%, 3-1-15 1,107
1,000 Cook County GO, 7.00%,
Prerefunded 11-1-00 at 102%
of Par (MBIA)** 1,134
500 Illinois Dedicated Tax Rev. (Civic
Center), 6.25%, 12-15-20 (AMBAC) 539
1,500 Illinois GO, 6.25%, 10-1-06 1,626
1,000 Illinois Regional Transportation
Auth. Rev., 7.20%, 11-1-20
(AMBAC) 1,204
-----
5,610
-----
Indiana-3.6%
1,000 Indiana State Toll Finance Auth.
Rev., 6.875%, 7-1-12 (FGIC) 1,048
1,000 Indiana University Student Fee
Rev., 5.10%, 8-1-08 991
---
2,039
-----
Iowa-1.7%
1,000 Iowa Finance Auth. Rev.,
5.50%, 6-15-15 (AMBAC) 990
---
25
See Notes to Financial Statements
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS (CONTINUED) October 31, 1995
TAX-EXEMPT LONG-TERM (CONTINUED)
- --------------------------------------------------------------------------------
Principal Amount Value
- --------------------------------------------------------------------------------
($ In Thousands)
Kansas-1.9%
$1,000 Kansas City Utility System
Rev., 6.375%, 9-1-23 (FGIC) $1,069
-----
Kentucky-4.3%
1,000 Carroll County Pollution Control
Rev. (Kentucky Utilities Co.
Project), 7.45%, 9-15-16 1,132
325 Kentucky Housing Corp. Rev.,
7.90%, 1-1-21 (FHA) 345
1,000 Kentucky Turnpike Auth.
Economic Development Road
Rev., 5.625%, 7-1-15 (AMBAC) 1,003
-----
2,480
-----
Maryland-1.6%
1,000 Maryland Health and Higher
Education Facility Auth. Rev.
(Anne Arundel Medical Center),
5.00%, 7-1-23 (AMBAC) 899
---
Massachusetts-7.1%
1,000 Boston GO Series B, 5.875%,
8-1-12 (AMBAC) 1,030
1,000 Boston GO Series B, 5.875%,
8-1-13 (AMBAC) 1,025
1,000 Massachusetts GO Series A,
5.40%, 11-1-06 1,037
1,000 Massachusetts Water
Resources Auth. Rev.,
5.50%, 11-1-15 970
---
4,062
-----
Michigan-1.7%
1,000 University of Michigan
Hospital Rev., 5.75%, 12-1-12 996
---
Montana-3.2%
460 Montana State Board
Investment Payroll Tax Rev.,
6.875%, 6-1-20** 519
1,190 Montana State Board
Investment Workers
Compensation Program
Rev., 6.875%, 6-1-20 (MBIA) 1,310
-----
1,829
-----
Nebraska-2.0%
1,000 Omaha Public Power District
Electric Rev., 6.50%, Pre-
refunded 2-1-02 at 101.5%
of Par** 1,118
-----
New York-7.6%
1,000 Municipal Assistance Corp.
Rev., 7.625%, 7-1-08 1,127
1,000 New York Local Government
Assistance Corp. Rev.,
6.75%, 4-1-07 1,096
1,000 New York State Environmental
Facilities Corp. Rev., 6.30%,
6-15-02 1,093
1,000 New York State Medical Care
Facility Agency Rev., 5.25%,
8-15-08 (FSA) 997
---
4,313
-----
North Carolina-2.9%
520 North Carolina Eastern
Municipal Power Agency
System Rev., 7.50%, 1-1-10** 616
1,000 North Carolina Municipal
Power Agency #1 Rev.,
6.00%, 1-1-10 (MBIA) 1,065
-----
1,681
-----
Ohio-2.3%
500 Ohio Higher Education Facility
Commission Rev. (University
of Dayton Project), 5.80%,
12-1-14 (FGIC) 507
750 Ohio Higher Education Facility
Commission Rev. (Case
Western Reserve Univ.),
6.50%, 10-1-20 839
---
1,346
-----
Pennsylvania-5.2%
1,125 Pennsylvania Intergovernmental
Cooperative Auth. Special Tax
Rev., 5.00%, 6-15-22 (MBIA) 1,013
1,000 Philadelphia Gas Works Rev.,
5.375%, 8-1-07 (CGIC) 1,017
1,000 Philadelphia Water and Waste
Water Rev., 5.25%,
6-15-23 (MBIA) 940
---
2,970
-----
26
See Notes to Financial Statements
<PAGE>
- --------------------------------------------------------------------------------
Principal Amount Value
- --------------------------------------------------------------------------------
($ In Thousands)
Puerto Rico-3.0%
$1,300 Puerto Rico Electric Power
Auth. Rev., 5.25%, 7-1-21 $1,204
500 Puerto Rico GO,
6.45%, 7-1-17 529
---
1,733
-----
Rhode Island-1.9%
1,000 Rhode Island Depositors
Economic Protection Corp.
Special Obligation Rev., 6.25%,
8-1-16 (MBIA) 1,081
-----
Texas-5.0%
1,000 Alliance Airport Auth. Special
Facilities Rev. (American Air-
lines Project), 7.00%, 12-1-11 1,082
1,875 Brownsville Utility System Rev.,
5.25%, 9-1-15 (AMBAC) 1,795
-----
2,877
-----
Utah-0.4%
230 Utah Housing Finance Agency
Rev., 8.50%, 7-1-04 241
---
Virginia-1.0%
500 Norfolk Hospital Rev. (Children's
Hospital), 7.00%, Prerefunded
6-1-01 at 102% of Par
(AMBAC)** 571
---
Wyoming-0.5%
265 Wyoming Community
Development Auth. Rev.,
8.125%, 6-1-21 282
---
Total Municipal Bonds-98.3% 56,117
(Cost $53,281) ------
TEMPORARY CASH INVESTMENTS-1.7%
953 Units of Participation in Provident
Institutional Funds (Muni Fund
Portfolio) 953
(Cost $953) ---
TOTAL INVESTMENT SECURITIES-100.0% $57,070
(Cost $54,234) ======
NOTES TO SCHEDULES OF INVESTMENTS
AMBAC = AMBAC Indemnity Corp.
CFCG = Cooperative Finance Corporation Guaranty
CGIC = Capital Guaranty Insurance Company
FFCB = Federal Farm Credit Banks
FGIC = Financial Guaranty Insurance Company
FHA = Federal Housing Authority
FHLMC = Federal Home Loan Mortgage Corporation
FNMA = Federal National Mortgage Association
FSA = Financial Security Assurance
GO = General Obligation
LOC = Letter of Credit
MBIA = Municipal Bond Insurance Association
MTN = Medium Term Note
VRDO = Variable Rate Demand Obligation. Interest reset dates are indicated and
used in calculating the average weighted portfolio maturity. Rates shown
were effective at 10-31-95.
VRN = Variable Rate Note, rates shown were effective at 10-31-95.
* Remaining expected average life is indicated and used for calculating the
average weighted portfolio maturity.
** Escrowed in U.S. Government securities.
27
See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
U.S. Governments U.S. Governments Limited-Term
October 31, 1995 Cash Reserve Short-Term Intermediate-Term Bond
---------------------($ in Thousands, Except Per-Share Amounts)-------------
<S> <C> <C> <C> <C>
ASSETS
Investment securities, at value
(amortized cost for Cash Reserve;
identified cost of $383,464, $20,841,
$7,061, $12,454, $141,217, $60,601,
$75,215, and $54,234, respectively)
(Note 3)............................. $1,470,341 $387,146 $21,395 $7,144
Cash................................... 6,211 -- 300 1
Receivable for investments sold........ -- -- -- --
Interest receivable.................... 1,305 5,920 359 103
--------- --------- --------- ---------
1,477,857 393,066 22,054 7,248
--------- --------- --------- ---------
LIABILITIES
Disbursements in excess of demand
deposit cash......................... 6,401 707 14 46
Payable for investments purchased...... -- -- -- --
Payable for capital shares redeemed.... 18 540 30 --
Dividends payable...................... 871 231 14 5
Accrued management fees (Note 2)....... 870 229 13 4
Other liabilities...................... 151 28 2 --
--------- --------- --------- ---------
8,311 1,735 73 55
--------- --------- --------- ---------
NET ASSETS APPLICABLE
TO OUTSTANDING SHARES................ $1,469,546 $391,331 $21,981 $7,193
========= ========= ========= =========
-----------------------------(Shares In Thousands)-----------------------
CAPITAL SHARES, $.01 PAR VALUE
Authorized............................. 2,000,000 60,000 20,000 20,000
========= ========= ========= =========
Outstanding............................ 1,469,626 41,168 2,190 722
========= ========= ========= =========
NET ASSET VALUE PER SHARE $ 1.00 $ 9.51 $ 10.04 $ 9.96
========= ========= ========= =========
NET ASSETS CONSIST OF:
Capital (par value and
paid-in surplus)..................... $1,469,626 $407,268 $21,297 $7,121
Accumulated undistributed net
realized gain (loss) from
security transactions................ (80) (19,619) 130 (11)
Net unrealized appreciation
on investments (Note 3).............. -- 3,682 554 83
--------- --------- --------- ---------
$1,469,546 $391,331 $21,981 $7,193
========= ========= ========= =========
</TABLE>
See Notes to Financial Statements
28
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
Intermediate-Term Long-Term Tax-Exempt Tax-Exempt Tax-Exempt
October 31, 1995 Bond Bond Short-Term Intermediate-Term Long-Term
---------------------($ in Thousands, Except Per-Share Amounts)--------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment securities, at value
(amortized cost for Cash Reserve;
identified cost of $383,464, $20,841,
$7,061, $12,454, $141,217, $60,601,
$75,215, and $54,234, respectively)
(Note 3)............................. $12,661 $146,760 $61,094 $77,736 $57,070
Cash................................... 11 10,204 -- -- 64
Receivable for investments sold........ -- 57 -- 2,648 -
Interest receivable.................... 188 2,675 972 1,251 955
--------- --------- --------- --------- ---------
12,860 159,696 62,066 81,635 58,089
--------- --------- --------- --------- ---------
LIABILITIES
Disbursements in excess of demand
deposit cash......................... 13 148 94 1,306 23
Payable for investments purchased...... -- 9,989 2,748 -- -
Payable for capital shares redeemed.... 4 125 358 1 7
Dividends payable...................... 8 107 29 40 33
Accrued management fees (Note 2)....... 8 95 -- 40 29
Other liabilities...................... -- 9 -- -- -
--------- --------- --------- --------- ---------
33 10,473 3,229 1,387 92
--------- --------- --------- --------- ---------
NET ASSETS APPLICABLE
TO OUTSTANDING SHARES................ $12,827 $149,223 $58,837 $80,248 $57,997
========= ========= ========= ========= =========
-----------------------------(Shares In Thousands)--------------------------------
CAPITAL SHARES, $.01 PAR VALUE
Authorized............................. 20,000 21,000 30,000 14,000 11,000
========= ========= ========= ========= =========
Outstanding............................ 1,274 15,251 5,829 7,677 5,503
========= ========= ========= ========= =========
NET ASSET VALUE PER SHARE.............. $ 10.07 $ 9.78 $ 10.09 $ 10.45 $ 10.54
========= ========= ========= ========= =========
NET ASSETS CONSIST OF:
Capital (par value and
paid-in surplus)..................... $12,489 $143,489 $58,351 $77,179 $55,188
Accumulated undistributed net
realized gain (loss) from
security transactions................ 131 191 (7) 548 (27)
Net unrealized appreciation
on investments (Note 3).............. 207 5,543 493 2,521 2,836
--------- --------- --------- --------- ---------
$12,827 $149,223 $58,837 $80,248 $57,997
========= ========= ========= ========= =========
</TABLE>
See Notes to Financial Statements
29
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
U.S. Governments U.S. Governments
Year Ended October 31, 1995 Cash Reserve Short-Term Intermediate-Term Limited-Term Bond
--------------------------($ In Thousands)----------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Income:
Interest.......................... $81,341 $24,200 $ 944 $ 378
-------- -------- -------- --------
Expenses:
Management fees (Note 2).......... 9,547 2,709 104 41
Directors' fees and expenses...... 17 5 -- --
Fees waived by manager (Note 2)... -- -- -- --
-------- -------- -------- --------
9,564 2,714 104 41
-------- -------- -------- --------
Net investment income............... 71,777 21,486 840 337
-------- -------- -------- --------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTE 3)
Net realized gain (loss) during
the year on investments........... (80) 506 200 15
Change in net unrealized
appreciation during the year
on investments.................... -- 9,263 629 167
-------- -------- -------- --------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS........ (80) 9,769 829 182
-------- -------- -------- --------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS......... $71,697 $31,255 $1,669 $519
======== ======== ======== ========
</TABLE>
See Notes to Financial Statements
30
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
Intermediate- Long-Term Bond Tax-Exempt Tax-Exempt Tax-Exempt
Year Ended October 31, 1995 Term-Bond Short-Term Short-Term Intermediate-Term Long-Term
------------------------------------($ In Thousands)------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Income:
Interest.......................... $550 $9,707 $2,615 $4,236 $3,119
-------- -------- -------- -------- --------
Expenses:
Management fees (Note 2).......... 60 1,038 358 471 317
Directors' fees and expenses...... -- 2 1 1 1
Fees waived by manager (Note 2)... -- -- (358) -- --
-------- -------- -------- -------- --------
60 1,040 1 472 318
-------- -------- -------- -------- --------
Net investment income............... 490 8,667 2,614 3,764 2,801
-------- -------- -------- -------- --------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTE 3)
Net realized gain (loss) during
the year on investments........... 152 412 25 553 (24)
Change in net unrealized
appreciation during the year
on investments.................... 340 12,096 829 3,482 4,424
-------- -------- -------- -------- --------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS........ 492 12,508 854 4,035 4,400
-------- -------- -------- -------- --------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS......... $982 $21,175 $3,468 $7,799 $7,201
======== ======== ======== ======== ========
</TABLE>
See Notes to Financial Statements
31
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
Years Ended October 31, 1995 U.S. Governments U.S. Governments
and October 31, 1994 Cash Reserve Short-Term Intermediate-Term Limited-Term Bond
Increase (Decrease) 1995 1994 1995 1994 1995 1994* 1995 1994*
in Net Assets ---- ---- ---- ---- ---- ----- ---- -----
---------------------------------------($ In Thousands)-------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net investment
income................... $71,777 $ 41,226 $ 21,486 $ 18,649 $ 840 $ 141 $ 337 $ 120
Net realized gain
(loss) on
investments.............. (80) -- 506 (13,214) 200 (70) 15 (26)
Change in net
unrealized
appreciation
(depreciation)
on investments........... -- -- 9,263 (5,851) 629 (75) 167 (84)
--------- --------- --------- --------- --------- -------- --------- ---------
Net increase
(decrease) in
net assets
resulting
from operations.......... 71,697 41,226 31,255 (416) 1,669 (4) 519 10
--------- --------- --------- --------- --------- -------- --------- ---------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment
income................... (71,777) (41,226) (21,486) (18,649) (840) (141) (337) (120)
From net realized
gains from
security
transactions............. -- -- -- -- -- -- -- --
--------- --------- --------- --------- --------- -------- --------- ---------
(Decrease) in net
assets from
distributions............ (71,777) (41,226) (21,486) (18,649) (840) (141) (337) (120)
--------- --------- --------- --------- --------- -------- --------- ---------
CAPITAL SHARE TRANSACTIONS
Proceeds from
shares sold.............. 1,917,043 1,806,442 86,423 103,353 21,446 7,602 3,681 5,107
Proceeds from
reinvestment of
distributions............ 69,197 40,341 20,147 17,739 805 135 325 117
Payments for
shares
redeemed................. (1,815,596) (1,803,813) (121,761) (217,255) (7,379) (1,312) (1,370) (739)
--------- --------- --------- --------- --------- -------- --------- ---------
Net increase
(decrease) in
net assets from
capital share
transactions............. 170,644 42,970 (15,191) (96,163) 14,872 6,425 2,636 4,485
--------- --------- --------- --------- --------- -------- --------- ---------
NET INCREASE
(DECREASE) IN
NET ASSETS............... 170,564 42,970 (5,422) (115,228) 15,701 6,280 2,818 4,375
NET ASSETS
Beginning of
period................... 1,298,982 1,256,012 396,753 511,981 6,280 -- 4,375 --
--------- --------- --------- --------- --------- -------- --------- ---------
End of period.............. $1,469,546 $1,298,982 $391,331 $396,753 $21,981 $6,280 $7,193 $4,375
========= ========= ========= ========= ========= ======== ========= =========
TRANSACTIONS IN SHARES OF
THE FUNDS: (IN THOUSANDS)
Sold....................... 1,917,043 1,806,442 9,240 10,895 2,205 778 377 516
Issued in
reinvestment of
distributions............ 69,197 40,341 2,152 1,882 82 14 33 12
Redeemed................... (1,815,596) (1,803,813) (13,034) (22,907) (754) (135) (140) (76)
--------- --------- --------- --------- --------- -------- --------- ---------
Net increase
(decrease)................. 170,644 42,970 (1,642) (10,130) 1,533 657 270 452
========= ========= ========= ========= ========= ======== ========= =========
See Notes to Financial Statements *March 1, 1994 (inception) through October 31, 1994.
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
Years Ended October 31, 1995
and October 31, 1994 Intermediate- Tax-Exempt Tax-Exempt Tax-Exempt
Term Bond Long-Term Bond Short-Term Intermediate-Term Long-Term
Increase (Decrease)
in Net Assets 1995 1994* 1995 1994 1995 1994 1995 1994 1995 1994
---- ----- ---- ---- ---- ---- ---- ---- ---- ----
------------------------------------------------($ In Thousands)-------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net investment
income............... $ 490 $ 122 $ 8,667 $ 8,562 $ 2,614 $ 2,094 $ 3,764 $ 4,116 $ 2,801 $ 3,013
Net realized gain
(loss) on
investments.......... 152 (20) 412 (216) 25 (32) 553 634 (24) 227
Change in net
unrealized
appreciation
(depreciation)
on investments....... 340 (134) 12,096 (16,630) 829 (484) 3,482 (5,959) 4,424 (6,081)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net increase
(decrease) in
net assets
resulting
from operations...... 982 (32) 21,175 (8,284) 3,468 1,578 7,799 (1,209) 7,201 (2,841)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment
income............... (490) (122) (8,667) (8,562) (2,614) (2,094) (3,764) (4,116) (2,801) (3,013)
From net realized
gains from
security
transactions......... -- -- -- (2,961) -- -- (639) (1,197) (225) (2,116)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
(Decrease) in net
assets from
distributions........ (490) (122) (8,667) (11,523) (2,614) (2,094) (4,403) (5,313) (3,026) (5,129)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
CAPITAL SHARE TRANSACTIONS
Proceeds from
shares sold..........10,476 4,638 56,502 56,947 30,735 54,880 15,630 26,204 19,427 19,566
Proceeds from
reinvestment of
distributions........ 456 118 7,979 10,679 2,326 1,907 3,755 4,669 2,594 4,419
Payments for
shares
redeemed)............(2,859) (340) (48,778) (98,927) (35,935) (47,679) (23,933) (41,691) (19,163) (35,808)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net increase
(decrease) in
net assets from
capital share
transactions......... 8,073 4,416 15,703 (31,301) (2,874) 9,108 (4,548) (10,818) 2,858 (11,823)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net increase
(decrease) in
net assets........... 8,565 4,262 28,211 (51,108) (2,020) 8,592 (1,152) (17,340) 7,033 (19,793)
NET ASSETS
Beginning of
period............... 4,262 -- 121,012 172,120 60,857 52,265 81,400 98,740 50,964 70,757
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
End of period.........$12,827 $4,262 $149,223 $121,012 $58,837 $60,857 $80,248 $81,400 $57,997 $50,964
======== ======== ======== ======== ======== ======== ======== ======== ======== ========
TRANSACTIONS IN SHARES OF
THE FUNDS: (IN THOUSANDS)
Sold................... 1,072 470 6,052 6,006 3,071 5,483 1,538 2,486 1,921 1,876
Issued in
reinvestment of
distributions........ 47 12 855 1,120 232 191 371 449 258 421
Redeemed............... (292) (35) (5,244) (10,399) (3,589) (4,765) (2,366) (3,988) (1,906) (3,441)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net increase
(decrease)............. 827 447 1,663 (3,273) (286) 909 (457) (1,053) 273 (1,144)
======== ======== ======== ======== ======== ======== ======== ======== ======== ========
See Notes to Financial Statements *March 1, 1994 (inception) through October 31, 1994.
</TABLE>
33
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS October 31, 1995
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization-
Twentieth Century Investors, Inc. (the Corporation) is registered under the
Investment Company Act of 1940 as an open-end diversified investment company.
Sixteen series of shares are currently issued, nine of which invest primarily in
fixed income securities: Cash Reserve, U.S. Governments Short-Term, U.S.
Governments Intermediate-Term, Limited-Term Bond, Intermediate-Term Bond,
Long-Term Bond, Tax-Exempt Short-Term, Tax-Exempt Intermediate-Term and
Tax-Exempt Long-Term (the Funds). The following significant accounting policies
are in accordance with accounting policies generally accepted in the investment
company industry.
Security Valuations-
Debt securities of all Funds except Cash Reserve are valued through
valuations obtained by a commercial pricing service or at the mean of the bid
and asked prices. The portfolio securities of Cash Reserve and short-term
investments of all other Funds are valued at amortized cost, which approximates
current value. When valuations are not readily available, securities are valued
at fair value as determined in good faith by the board of directors.
Security Transactions-
Security transactions are accounted for on the date purchased or sold. Net
realized gains and losses are determined on the identified cost basis, which is
also used for federal income tax purposes.
Investment Income-
Interest income is recorded on the accrual basis and includes amortization
of premiums and discounts.
Repurchase Agreements-
Securities pledged as collateral for repurchase agreements are held by the
Federal Reserve Bank and are designated as being held on the Funds' behalf by
its custodian under a book-entry system. The Funds monitor the adequacy of the
collateral daily and can require the seller to provide additional collateral in
the event the market value of the securities pledged falls below the carrying
value of the repurchase agreement.
Income Tax Status-
It is the policy of the Funds to distribute all taxable income and capital
gains to shareholders and to otherwise qualify as a regulated investment company
under provisions of the Internal Revenue Code. Accordingly, no provision has
been made for federal or state taxes.
Distributions to Shareholders-
Net investment income dividends from all Funds except Cash Reserve are
declared daily and distributed monthly. Cash Reserve dividends are declared
daily from the total of net investment income, plus or minus realized gains or
losses on portfolio securities, and distributed monthly. Cash Reserve does not
expect to realize any long-term capital gains, and accordingly, does not expect
to pay any capital gains distributions. Net realized gains in excess of
available capital loss carryovers for all other Funds will be distributed each
December.
At October 31, 1995, accumulated net realized capital loss carryovers of
$19,619,040 for U.S. Governments Short-Term, $10,706 for Limited-Term Bond,
$7,254 for Tax-Exempt Short-Term and $27,014 for Tax-Exempt Long-Term (expiring
1998 through 2003) may be used to offset future taxable gains. Distributions
from net investment income for Tax-Exempt Short-Term, Tax-Exempt
Intermediate-Term, and Tax-Exempt Long-Term for the year ended October 31, 1995,
are exempt from federal income taxes.
The character of distributions made during the year from net investment
income or net realized gains may differ from their ultimate characterization for
federal income tax purposes due to differences in the recognition of income and
expense items for financial statement and tax purposes.
Supplementary Information-
Certain officers and directors of the Corporation are also officers and/or
directors, and, as a group, controlling stockholders of Twentieth Century
Companies, Inc., the parent of the Corporation's investment manager, Investors
Research Corporation (IRC).
34
<PAGE>
- --------------------------------------------------------------------------------
2. MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Management Agreement with IRC provides for a monthly management fee
computed by multiplying the applicable fee for each Fund by the average daily
closing value of such Fund's net assets during the previous month. The Agreement
further provides that all expenses of the Fund, except brokerage commissions,
taxes, interest, expenses of those directors who are not considered "interested
persons" as defined in the Investment Company Act of 1940 (including counsel
fees) and extraordinary expenses, will be paid by IRC. The Agreement may be
terminated by either party upon 60 days' written notice.
The current annual management fee for each Fund is as follows:
Cash Reserve .70% Long-Term Bond .80%
U.S. Governments Short-Term .70% Tax-Exempt Short-Term .60%*
U.S. Governments Intermediate-Term .75% Tax-Exempt Intermediate-Term .60%
Limited-Term Bond .70% Tax-Exempt Long-Term .60%
Intermediate-Term Bond .75%
* The fee has been waived by IRC through December 31, 1995. For the fiscal year
ended October 31, 1995, the management fees absorbed by IRC were $358,147.
Cash Reserve owns $38,500,000 of taxable variable-rate notes issued by
Orange County, California, which filed for bankruptcy protection on December 6,
1994. On December 13, 1994, Twentieth Century Companies, Inc. (TCC) arranged for
the issuance of an irrevocable standby letter of credit by Chase Manhattan Bank
in favor of Cash Reserve. In July 1995, a new letter of credit arrangement was
entered into with State Street Bank and Trust Company. The terms of this letter
of credit provide for the payment of up to $25,000,000 to the Cash Reserve Fund
should Orange County default in the payment of principal and/or interest on such
note. Since the letter of credit only covers a portion of the amount of the
Orange County note held, the Fund continues to be exposed to some risk of loss
of principal and/or interest on the Orange County security. The market value of
this security on October 31, 1995 was $36,501,850. TCC has agreed to reimburse
State Street Bank for any payments made by the bank to the Fund under this
letter of credit. The value of the letter of credit is not considered material
to the Fund's financial statements.
35
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED) October 31, 1995
3. INVESTMENT TRANSACTIONS
Investment transactions (excluding short-term investments) for the period were
as follows:
<TABLE>
<CAPTION>
U.S.
U.S. Governments Limited- Intermediate-
Governments Intermediate- Term Term Long-Term
Short-Term Term Bond Bond Bond
------------ ------------- -------- ------------- ----------
-----------------------------($ In Thousands)---------------------------------
<S> <C> <C> <C> <C> <C>
PURCHASES
U.S. Treasury &
Agency Obligations $485,936 $32,407 $3,868 $9,714 $66,009
Other Debt Obligations 3,349 7,377 77,873
Proceeds From Sales
U.S. Treasury & Agency
Obligations $512,150 $17,413 $4,550 $8,328 $49,947
Other Debt Obligations 1,048 1,447 80,659
</TABLE>
Tax-Exempt
Tax-Exempt Intermediate- Tax-Exempt
Short-Term Term Long-Term
----------- ------------- -----------
-------------($ In Thousands)----------------
PURCHASES
Municipal Debt Obligations $45,452 $24,936 $33,383
PROCEEDS FROM SALES
Municipal Debt Obligations $45,006 $27,828 $30,719
On October 31, 1995, the composition of unrealized appreciation and
(depreciation) of investment securities based on the aggregate cost of
investments for federal income tax purposes was as follows:
<TABLE>
<CAPTION>
Federal
Appreciation (Depreciation) Net Tax Cost
------------ ------------ ----- --------
---------------------($ In Thousands)-------------
<S> <C> <C> <C> <C>
U.S. Governments Short-Term $3,765 $ (83) $3,682 $383,464
U.S. Governments Intermediate-Term 556 (2) 554 20,841
Limited-Term Bond 84 (1) 83 7,061
Intermediate-Term Bond 215 (8) 207 12,454
Long-Term Bond 5,935 (426) 5,509 141,251
Tax-Exempt Short-Term 525 (32) 493 60,601
Tax-Exempt Intermediate-Term 2,546 (25) 2,521 75,215
Tax-Exempt Long-Term 2,949 (113) 2,836 54,234
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
INCOME FROM
INVESTMENT OPERATIONS DISTRIBUTIONS
---------------------------------- ---------------------------------------------------------------
Net Realized Distributions Distributions [table
and from Net in Excess of cont.
Net Asset Unrealized Total Distributions Realized Net Realized Net Asset below]
Value, Net Gains from from Net Gains on Gains on Value,
Beginning Investment (Losses) on Investment Investment Investment Investment Total End of Total
of Period Income Investments Operations Income Transactions Transactions Distributions Period Return1
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CASH RESERVE
Year Ended Oct. 31,
1991 $1.00 $.06 -- $.06 $(.058) -- -- $(.058) $1.00 5.95%
1992 1.00 .04 -- .04 (.037) -- -- (.037) 1.00 3.74%
1993 1.00 .02 -- .02 (.023) -- -- (.023) 1.00 2.30%
1994 1.00 .03 -- .03 (.032) -- -- (.032) 1.00 3.21%
1995 1.00 .05 -- .05 (.052) -- -- (.052) 1.00 5.38%
U.S. GOVERNMENTS SHORT-TERM
Year Ended Oct. 31,
1991 $9.08 $.63 $.33 $.96 $(.635) -- -- $(.635) $9.41 10.99%
1992 9.41 .44 .20 .64 (.441) -- -- (.441) 9.61 6.85%
1993 9.61 .36 (.26) .10 (.036) -- -- (.036) 9.67 4.45%
1994 9.67 .40 (.40) -- (.402) -- -- (.402) 9.27 .07%
1995 9.27 .52 .24 .76 (.519) -- -- (.519) 9.51 8.42%
U.S. GOVERNMENTS INTERMEDIATE-TERM
Mar. 1, 1994 (inception) through Oct. 31,
1994 $10.00 $.34 $(.45) $(.11) $(.343) -- -- $(.343) $ 9.55 (1.01%)
1995 9.55 .58 .49 1.07 (.583) -- -- (.583) 10.04 11.58%
LIMITED-TERM BOND
Mar. 1, 1994 (inception) through Oct. 31,
1994 $10.00 $.31 $(.32) $(.01) $(.312) -- -- $(.312) $9.68 (.08%)
1995 9.68 .56 .28 .84 (.557) -- -- (.557) 9.96 8.89%
INTERMEDIATE-TERM BOND
Mar. 1, 1994 (inception) through Oct. 31,
1994 $10.00 $.34 $(.47) $(.13) $(.337) -- -- $(.337) $ 9.53 (1.24%)
1995 9.53 .59 .54 1.13 (.587) -- -- (.587) 10.07 12.19%
</TABLE>
[table continued]
RATIOS/SUPPLEMENTAL DATA
---------------------------------------------
Ratio of Net Net
Ratio of Investment Assets,
Operating Income End of
Expenses to Portable Period
to Average Average Turnover (in
Net Assets Net Assets Rate1 thousands)
CASH RESERVE
Year Ended Oct. 31,
1991 .97%+ 5.75% -- $1,236,309
1992 .98%+ 3.62% -- 1,487,961
1993 1.00% 2.30% -- 1,256,012
1994 .80% 3.18% -- 1,298,982
1995 .70% 5.27% -- 1,469,546
U.S. GOVERNMENTS SHORT-TERM
Year Ended Oct. 31,
1991 .99%+ 6.88% 779% $534,515
1992 .99%+ 4.62% 391% 569,430
1993 1.00% 3.73% 413% 511,981
1994 .81% 4.17% 470% 396,753
1995 .70% 5.53% 128% 391,331
U.S. GOVERNMENTS INTERMEDIATE-TERM
Mar. 1, 1994 (inception) through Oct. 31,
1994 .75%2 5.43%2 205% $ 6,280
1995 .74% 5.99% 137% 21,981
LIMITED-TERM BOND
Mar. 1, 1994 (inception) through Oct. 31,
1994 .70%2 4.79%2 48% $4,375
1995 .69% 5.70% 116% 7,193
INTERMEDIATE-TERM BOND
Mar. 1, 1994 (inception) through Oct. 31,
1994 .75%2 5.23%2 48% $ 4,262
1995 .74% 6.05% 133% 12,827
1 Actual total return and portfolio turnover rate for periods indicated.
2 Annualized
+ Expenses are shown net of management fees waived by Investors Research
Corporation for low-balance account fees collected during period.
See Notes to Financial Statements
37
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED) (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
INCOME FROM
INVESTMENT OPERATIONS DISTRIBUTIONS
----------------------------------- --------------------------------------------------------
Net Realized Distributions Distributions [table
and from Net in Excess of cont.
Net Asset Unrealized Total Distributions Realized Net Realized Net Asset below]
Value, Net Gains from from Net Gains on Gains on Value,
Beginning Investment (Losses) on Investment Investment Investment Investment Total End of Total
of Period Income Investments Operations Income Transactions Transactions Distributions Period Return1
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LONG-TERM BOND
Year Ended Oct. 31,
1991 $ 8.90 $.75 $ .66 $1.41 $(.746) -- -- $ (.746) $ 9.56 16.44%
1992 9.56 .63 .35 .98 (.622) -- -- (.622) 9.92 10.40%
1993 9.92 .66 1.88 2.54 (.662) $(1.587) -- (2.249) 10.21 11.81%
1994 10.21 .58 (1.12) (.54) (.576) (.186) -- (.762) 8.91 (5.47%)
1995 8.91 .61 .87 1.48 (.611) -- -- (.611) 9.78 17.16%
TAX-EXEMPT SHORT-TERM
Mar. 1, 1993 (inception)
through Oct. 31,
1993 $10.00 $.21 $ .04 $.25 $(.214) -- -- $(.214) $10.04 2.55%
1994 10.04 .36 (.09) .27 (.362) -- -- (.362) 9.95 2.75%
1995 9.95 .44 .14 .58 (.440) -- -- (.440) 10.09 5.95%
TAX-EXEMPT INTERMEDIATE-TERM
Year Ended Oct. 31,
1991 $ 9.66 $.54 $.40 $ .94 $(.536) -- -- $(.536) $10.06 9.91%
1992 10.06 .48 .21 .69 (.481) -- -- (.481) 10.27 7.00%
1993 10.27 .48 .55 1.03 (.476) $(.078) -- (.554) 10.75 10.25%
1994 10.75 .48 (.61) (.13) (.476) (.133) -- (.609) 10.01 (1.25%)
1995 10.01 .49 .52 1.01 (.487) (.082) -- (.569) 10.45 10.41%
TAX-EXEMPT LONG-TERM
Year Ended Oct.
1991 $9.62 $.57 $.61 $1.18 $(.572) -- -- $(.572) $10.23 12.54%
1992 10.23 .53 .22 .75 (.530) $(.088) -- (.618) 10.36 7.43%
1993 10.36 .53 .90 1.43 (.529) (.161) $(.003) (.693) 11.10 14.32%
1994 11.10 .52 (1.01) (.49) (.519) (.342) -- (.861) 9.75 (4.70%)
1995 9.75 .53 .83 1.36 (.532) (.044) -- (.576) 10.54 14.45%
</TABLE>
[table continued]
RATIOS/SUPPLEMENTAL DATA
---------------------------------------------
Ratio of Net Net
Ratio of Investment Assets,
Operating Income End of
Expenses to Portable Period
to Average Average Turnover (in
Net Assets Net Assets Rate1 thousands)
LONG-TERM BOND
Year Ended Oct. 31,
1991 .96%+ 8.06% 219% $114,342
1992 .98%+ 6.30% 186% 154,031
1993 1.00% 6.54% 113% 172,120
1994 .88% 6.07% 78% 121,012
1995 .78% 6.53% 105% 149,223
TAX-EXEMPT SHORT-TERM
Mar. 1, 1993 (inception)
through Oct. 31,
1993 --3 3.09%2 3% $52,265
1994 --3 3.62% 42% 60,857
1995 --3 4.38% 78% 58,837
TAX-EXEMPT INTERMEDIATE-TERM
Year Ended Oct. 31,
1991 .96%+ 5.40% 62% $45,359
1992 .98%+ 4.68% 36% 76,745
1993 .72% 4.51% 38% 98,740
1994 .60% 4.59% 74% 81,400
1995 .60% 4.77% 32% 80,248
TAX-EXEMPT LONG-TERM
Year Ended Oct.
1991 .96%+ 5.73% 110% $39,229
1992 .98%+ 5.07% 88% 61,825
1993 .73% 4.90% 81% 70,757
1994 .60% 5.00% 66% 50,964
1995 .59% 5.24% 61% 57,997
1 Actual total return and portfolio turnover rate for periods indicated.
2 Annualized
3 Investors Research Corporation has voluntarily waived its management fee
through December 31, 1995. In absence of the waiver, the ratio of expenses
to average net assets would have been .60%.
+ Expenses are shown net of management fees waived by Investors Research
Corporation for low-balance account fees collected during period.
See Notes to Financial Statements
38
<PAGE>
- --------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS' REPORT
To the Shareholders and Board of Directors:
Twentieth Century Investors, Inc.
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of the Cash Reserve Fund, U.S.
Governments Short-Term Fund, U.S. Governments Intermediate-Term Fund,
Limited-Term Bond Fund, Intermediate-Term Bond Fund, Long-Term Bond Fund,
Tax-Exempt Short-Term Fund, Tax-Exempt Intermediate-Term Fund and Tax-Exempt
Long-Term Fund (nine of the 16 funds in TWENTIETH CENTURY INVESTORS, INC.), as
of October 31, 1995, and the related statements of operations, the statements of
changes in net assets and the financial highlights for each of the periods
indicated. These financial statements and financial highlights are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
Cash Reserve Fund, U.S. Governments Short-Term Fund, U.S. Governments
Intermediate-Term Fund, Limited-Term Bond Fund, Intermediate-Term Bond Fund,
Long-Term Bond Fund, Tax-Exempt Short-Term Fund, Tax-Exempt Intermediate-Term
Fund and Tax-Exempt Long-Term Fund as of October 31, 1995, and the results of
their operations, changes in their net assets and the financial highlights for
each of the periods indicated in conformity with generally accepted accounting
principles.
/s/Baird, Kurtz & Dobson
BAIRD, KURTZ & DOBSON
Kansas City, Missouri
November 27, 1995
39
<PAGE>
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<PAGE>
TWENTIETH CENTURY INVESTORS, INC.
Investment Manager
Investors Research Corporation
Kansas City, Missouri Twentieth Century
Investors, Inc.
This report and the financial
statements contained herein Fixed Income Funds
are submitted for the general Annual Report
information of our shareholders.
This report is not authorized for October 31, 1995
distribution to prospective
investors unless preceded
or accompanied by a current
prospectus.
[company logo]
Investments That Work(TM)
- -----------------------------------
P.O. Box 419200
Kansas City, Missouri
64141-6200
- -----------------------------------
Person-to-person assistance:
1-800-345-2021 or 816-531-5575
- -----------------------------------
Automated information line:
1-800-345-8765
- -----------------------------------
Telecommunications Device for the Deaf:
1-800-634-4113 or 816-753-1865
- -----------------------------------
Fax: 816-340-7962
- -----------------------------------
[company logo]
- --------------------------------------------------------------------------------
SH-BKT-3637
9511 Recycled
(C) 1995 Twentieth Century Services, Inc.
