<PAGE> 1
CHAIRMAN'S LETTER
FELLOW SHAREHOLDER:
The bond market has been "in the headlines" during the past twelve months, and
much of the news has been negative. Nonetheless, on balance over the past six
and twelve months alike, each of the Portfolios of Vanguard Municipal Bond Fund
provided a positive total return.
So, it is a special pleasure to send you this Semi-Annual Report for
the six-month fiscal period ended February 28, 1995. I call your particular
attention to the table on the next page showing each Portfolio's net asset
value, dividend and capital gains distributions, and current yield. Most
noteworthy is the fact that all of our Portfolios maintained asset values
(adjusted for last December's distributions from net realized capital gains)
that were largely unchanged on balance for the six months. (The net asset value
of our Money Market Portfolio remained stable at $1.00 per share.)
That share price stability, of course, concealed far more than it
revealed. The fact is the yield on long-term tax-exempt bonds leaped upward
from 6.2% on August 31, 1994, to a high of 7.1% on November 25, 1994,
engendering a price decline of about -11%. Then, the tables turned and the
yield retraced not only the lost ground, but a bit more, closing the fiscal
period at 6.1% on February 28, 1995. It was a welcome reversal of fortune for
bond investors.
The net result was that--for the first time, and perhaps for the
last--all of our Portfolios provided similar returns for the six months. But I
should quickly note that each Portfolio experienced very different levels of
price volatility. For example, the price decline from August 31, 1994, to the
November 1994 low for our Long-Term Portfolio was -7.6%, compared to -5.0% for
our Intermediate-Term Portfolio and -0.6% for our Short-Term Portfolio. By the
same token, each Portfolio experienced a roughly commensurate price increase in
the subsequent bond market rally. In the municipal bond market, higher
principal risk is usually accompanied by higher current yield and higher income
durability. Each of our seven Portfolios is structured to strike a particular
balance among these competing characteristics.
The ups and downs in the tax-exempt bond market during the past six
months were shaped primarily by two factors: (1) the general level of interest
rates; and (2) questions about the quality of certain types of municipal bonds.
The price volatility in the municipal bond market over the past six months was
somewhat higher than that of the taxable bond market. In my view, the greater
volatility of municipal bonds largely reflected marketplace concerns about some
specific credit quality issues. In particular, of course, was the bankruptcy of
Orange County, California--a huge and prosperous community. It was caused by
the assumption of substantial--even shocking--risk in exotic, speculative
derivative securities in a $20 billion investment pool managed for local
counties, which eventually resulted in losses totaling $3 billion. Our
Portfolios, I am pleased to report, had no direct exposure to Orange County
obligations.
There may be some luck involved in avoiding specific AAA-rated bonds
that unexpectedly fall from grace. But you should know that the Fixed Income
Group for Vanguard Municipal Bond Fund not only emphasizes the highest quality
bonds available, but in many cases, secures its bonds with insurance provisions
or letters-of-credit from leading banks. These features provide an important
enhancement to our already high quality. (What is more, our Insured Long-Term
Portfolio is comprised almost entirely of bonds whose interest and, at
maturity, principal payments are backed by private insurers.)
In short, we not only avoided some land mines during the past six
months, but also successfully negotiated a tricky and volatile bond market. I
look forward to writing to you in further detail in our Annual Report six
months hence.
Sincerely,
/s/ JOHN C. BOGLE
- -----------------
John C. Bogle
Chairman of the Board
March 8, 1995
1
<PAGE> 2
PORTFOLIO RESULTS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value
Per Share SEC
--------------------------------- Total Return Current
Average Average February August February 12-Month --------------------- Annualized
Maturity Quality 28, 1994 31, 1994 28, 1995** Dividends 6-Month 12-Month Yield*
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SHORTER-TERM
MONEY MARKET 46 DAYS MIG 1 $ 1.00 $ 1.00 $ 1.00 $.029 +1.7% +3.0% 3.84%
SHORT-TERM 433 DAYS Aa1 15.55 15.46 15.45 .558 +1.8 +3.0 4.26
LIMITED-TERM 2.5 YEARS Aa2 10.70 10.57 10.52 .457 +1.8 +2.7 4.57
- ------------------------------------------------------------------------------------------------------------------------------------
LONGER-TERM
INTERMEDIATE-TERM 8.0 YEARS Aa2 $13.26 $13.02 $12.99 $.686 +2.6% +3.4% 5.18%
INSURED LONG-TERM 15.0 YEARS Aaa 12.48 11.98 12.12 .695 +4.4 +3.2 5.62
LONG-TERM 15.6 YEARS Aa2 11.00 10.58 10.62 .611 +3.5 +2.5 5.73
HIGH-YIELD 15.8 YEARS A1 10.79 10.39 10.38 .627 +3.3 +2.5 6.11
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Yield for Money Market Portfolio is a 7-day yield. All others are 30-day
yields.
**Includes capital gains distributions of $.001 for Short-Term, $.158 for
Intermediate-Term, $.173 for Insured Long-Term, $.156 for Long-Term, and
$.173 for High-Yield. Net asset values after capital gains distributions
are: $15.45 for Short-Term, $12.83 for Intermediate-Term, $11.95 for Insured
Long-Term, $10.46 for Long-Term, and $10.21 for High-Yield.
AVERAGE ANNUAL TOTAL RETURNS
THE AVERAGE ANNUAL TOTAL RETURNS FOR THE PORTFOLIOS (PERIODS ENDED DECEMBER 31,
1994) ARE AS FOLLOWS:
<TABLE>
<CAPTION>
10 YEARS
------------------------------------------
INCEPTION TOTAL INCOME CAPITAL
PORTFOLIO DATE 1 YEAR 5 YEARS RETURN RETURN RETURN
- ---------- ---- ------ ------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
MONEY MARKET 6/10/80 +2.75% +3.71% +4.44% +4.44% 0.00%
SHORT-TERM 9/1/77 +1.70 +4.78 +5.50 +5.21 +0.29
LIMITED-TERM 8/31/87 +0.07 +5.81 +6.31* +5.61* +0.70*
INTERMEDIATE-TERM 9/1/77 -2.12 +7.40 +9.13 +6.92 +2.21
INSURED LONG-TERM 9/30/84 -5.58 +7.02 +9.52 +7.33 +2.19
LONG-TERM 9/1/77 -5.75 +7.22 +9.72 +7.42 +2.30
HIGH-YIELD 12/27/78 -5.06 +7.39 +9.97 +7.69 +2.28
</TABLE>
* PERFORMANCE FIGURES SINCE INCEPTION.
ALL OF THESE DATA REPRESENT PAST PERFORMANCE. THE INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT INVESTORS' SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. AN INVESTMENT IN
THE MONEY MARKET PORTFOLIO IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT, AND THERE IS NO ASSURANCE THAT THE PORTFOLIO WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
2
<PAGE> 3
REPORT FROM THE INVESTMENT ADVISER
Fiscal 1995 began just about as badly as any time period in our recollection.
The municipal bond market started the new fiscal year with a protracted
sell-off that lasted through late November and pushed long-term tax-exempt
interest rates up an astonishing 0.9% (90 "basis points"). The damage was
hardly confined to the long end of the market, as short- and intermediate-term
interest rates also rose by about 0.9% on balance.
Anyone within reach of a newspaper probably was well aware of the
consequent effects of rising yields on bond fund net asset values during the
months of September, October, and November: they were down sharply. A garden
variety long-term bond fund dropped about -6% in principal value over this
interval, while short- and intermediate-term bond funds were off from -1% to
- -4%.
Just when it seemed that nothing else could possibly go wrong in the
bond market, the multi-billion-dollar Orange County Investment Pool collapsed
under the combined burdens of excessive leverage and exotic synthetic
securities. The additional disruptions in Orange County roiled the market for
all California-specific bonds and notes, but particularly those local
entities--187 in all--that participated in the ill-starred Pool. Vanguard's
Chairman has already written to you explicitly about Orange County, but it
bears repeating that we have had no direct credit exposure to the Orange County
debacle.
Fortunately, the fiscal six-month period did not end with the dismal
performance of the first three months. Rather, the market, representing
thousands if not millions of individual decision-makers, seemed to regain its
"footing" in December. Indeed, investors returned to the municipal bond market
in increasing numbers as the new year progressed. The commingled elements of
attractive yields, low new-issue supply, extensive bond redemptions, and
favorable mutual fund cash flows acted to buoy market prices. The rally that
followed was as exhilarating as the descent was frightening.
Ironically, interest rates over the past six months actually decreased
slightly, producing modest capital appreciation to supplement tax-free interest
income. The point-to-point appearance of relative tranquility belies the
dramatic ups and downs of recent times. If anything, recent bond price activity
underscores the inherent volatility of the financial markets and the wisdom of
"staying the course." Those investors who panicked and dumped their bond
holdings when the markets dropped almost certainly failed to recoup their
losses during the subsequent rally. In the broader context of the past decade,
municipal bonds--and the Vanguard Municipal Bond Fund Portfolios--have
acquitted themselves well. Details of the Fund's performance over the past six
months are outlined in the Chairman's letter.
FED ACTIVITY AND THE MUNICIPAL MARKET
If one pulls aside the backdrop of our modern bond markets, it's possible to
spot a central bank pulling the economy's monetary "strings." Such was the case
over the past six months, when the Federal Reserve Open Market Committee acted
on three separate occasions to tighten monetary policy. This tightening was
achieved through the simple expedience of the Federal Reserve Bank of New York
selling large quantities of Treasury securities. As bond dealers and the public
paid for these securities, they drew down their balances at banks, thereby
lowering overall bank reserves. The shrinkage in bank reserves (relative to
demand) caused immediate upward pressure on short-term interest rates. Over the
entire fiscal period, the Fed raised short-term interest rates 125 basis
points, from 4.75% to 6.00%.
As the fiscal period drew to a close, there began to appear some
statistical evidence that the cumulated Fed tightening (which began in February
of 1994) was finally beginning to throttle down excessive growth and potential
inflation in the U.S. economy. The recent improvement in bond prices appears
to be a direct consequence of market participants' belief that
3
<PAGE> 4
the Fed has pretty much concluded its tightening program. Whether this belief
will be corroborated in subsequent months is open to conjecture. We happen to
think the Fed has more "tightening" to do. Regardless, the markets will
continue to react, probably strongly, to economic announcements that reveal
greater or lesser economic vigor.
The first six months of the 1995 fiscal year were characterized by
highly volatile bond prices and yields. We have no reason to expect the second
six months will be any less so. Having said that, we would also have to
reaffirm the prudence of sticking with a disciplined long-term investment plan.
At Vanguard, each of our Municipal Bond Fund Portfolios represents a highly
efficient vehicle for executing those plans with excellent relative
predictability.
Sincerely,
I. A. MacKinnon, Senior Vice President
J. J. Jacobs, Vice President
P. E. Tynan, Vice President
D. E. Hamlin, Assistant Vice President
C. M. Ryon, Assistant Vice President
Vanguard Fixed Income Group
March 15, 1995
4
<PAGE> 5
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
MONEY MARKET SHORT-TERM LIMITED-TERM
PORTFOLIO PORTFOLIO PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------
Six Months Ended Six Months Ended Six Months Ended
February 28, 1995 February 28, 1995 February 28, 1995
(000) (000) (000)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME
Interest . . . . . . . . . . . . . . . . . . . . . $75,429 $30,141 $39,762
- -------------------------------------------------------------------------------------------------------------------------
Total Income . . . . . . . . . . . . . . . . . 75,429 30,141 39,762
- -------------------------------------------------------------------------------------------------------------------------
EXPENSES
The Vanguard Group--Note B
Investment Advisory Services . . . . . . . . . . . . 260 92 108
Management and Administrative . . . . . . . . . . . 3,264 1,143 1,288
Marketing and Distribution . . . . . . . . . . . . . 538 197 222
Taxes (other than income taxes) . . . . . . . . . . . 173 63 70
Auditing Fees . . . . . . . . . . . . . . . . . . . . 6 4 4
Shareholders' Reports . . . . . . . . . . . . . . . . 69 35 46
Annual Meeting and Proxy Costs . . . . . . . . . . . . 4 3 6
Directors' Fees and Expenses . . . . . . . . . . . . . 5 2 2
- -------------------------------------------------------------------------------------------------------------------------
Total Expenses . . . . . . . . . . . . . . . . 4,319 1,539 1,746
- -------------------------------------------------------------------------------------------------------------------------
Net Investment Income . . . . . . . . . . . 71,110 28,602 38,016
- -------------------------------------------------------------------------------------------------------------------------
REALIZED NET GAIN (LOSS)
Investment Securities Sold . . . . . . . . . . . . . . (98) (220) (6,183)
Futures Contracts . . . . . . . . . . . . . . . . . . -- -- 1,911
- -------------------------------------------------------------------------------------------------------------------------
Realized Net Gain (Loss) . . . . . . . . . . (98) (220) (4,272)
- -------------------------------------------------------------------------------------------------------------------------
CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION)
Investment Securities . . . . . . . . . . . . . . . . -- (1,225) (6,159)
Futures Contracts . . . . . . . . . . . . . . . . . . -- -- (293)
- -------------------------------------------------------------------------------------------------------------------------
Change in Unrealized
Appreciation (Depreciation) . . . . . . . . -- (1,225) (6,452)
- -------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations . . . . . . . . . $71,012 $27,157 $27,292
=========================================================================================================================
</TABLE>
The Statements of Net Assets, integral parts of the financial statements for
each of the Vanguard Municipal Bond Fund Portfolios, are included as an insert
to this Report.
5
<PAGE> 6
STATEMENT OF OPERATIONS (continued)
<TABLE>
<CAPTION>
INSURED
INTERMEDIATE-TERM LONG-TERM LONG-TERM HIGH-YIELD
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- -----------------------------------------------------------------------------------------------------------------------------------
Six Months Ended Six Months Ended Six Months Ended Six Months Ended
February 28, 1995 February 28, 1995 February 28, 1995 February 28, 1995
(000) (000) (000) (000)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
INCOME
Interest . . . . . . . . . . . . . . . . $136,149 $56,731 $30,011 $54,875
- -----------------------------------------------------------------------------------------------------------------------------------
Total Income . . . . . . . . . . . . 136,149 56,731 30,011 54,875
- -----------------------------------------------------------------------------------------------------------------------------------
EXPENSES
The Vanguard Group--Note B
Investment Advisory Services . . . . . . . 299 114 59 104
Management and Administrative . . . . . . 3,738 1,477 761 1,298
Marketing and Distribution . . . . . . . . 500 155 82 157
Taxes (other than income taxes) . . . . . . 197 74 41 72
Auditing Fees . . . . . . . . . . . . . . . 6 4 4 4
Shareholders' Reports . . . . . . . . . . . 135 49 25 52
Annual Meeting and Proxy Costs . . . . . . . 15 3 1 3
Directors' Fees and Expenses . . . . . . . . 7 2 1 2
- -----------------------------------------------------------------------------------------------------------------------------------
Total Expenses . . . . . . . . . . . 4,897 1,878 974 1,692
- -----------------------------------------------------------------------------------------------------------------------------------
Net Investment Income . . . . . . 131,252 54,853 29,037 53,183
- -----------------------------------------------------------------------------------------------------------------------------------
REALIZED NET GAIN (LOSS)
Investment Securities Sold . . . . . . . . . 3,038 (2,598) 1,882 (6,735)
Futures Contracts . . . . . . . . . . . . . 1,577 2,069 (241) (3,487)
- -----------------------------------------------------------------------------------------------------------------------------------
Realized Net Gain (Loss) . . . . . 4,615 (529) 1,641 (10,222)
- -----------------------------------------------------------------------------------------------------------------------------------
CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION)
Investment Securities . . . . . . . . . . . (23,371) 20,792 2,878 6,291
Futures Contracts . . . . . . . . . . . . . 774 (826) (113) (651)
- -----------------------------------------------------------------------------------------------------------------------------------
Change in Unrealized
Appreciation (Depreciation) . . (22,597) 19,966 2,765 5,640
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations . . . $113,270 $74,290 $33,443 $48,601
===================================================================================================================================
</TABLE>
6
<PAGE> 7
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MONEY MARKET SHORT-TERM
PORTFOLIO PORTFOLIO
- -----------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED Year Ended SIX MONTHS ENDED Year Ended
FEBRUARY 28, 1995 August 31, 1994 FEBRUARY 28, 1995 August 31, 1994
(000) (000) (000) (000)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net Investment Income . . . . . . . . . . . . $ 71,110 $ 98,343 $ 28,602 $ 50,920
Realized Net Gain (Loss) . . . . . . . . . . . (98) (378) (220) 153
Change in Unrealized Appreciation
(Depreciation) . . . . . . . . . . . . . . . -- -- (1,225) (14,693)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations . . . . . . . 71,012 97,965 27,157 36,380
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS (1)
Net Investment Income . . . . . . . . . . . . (71,110) (98,343) (28,602) (50,920)
Realized Net Gain . . . . . . . . . . . . . . -- -- (96) (1,836)
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distributions . . . . . . . . . . . (71,110) (98,343) (28,698) (52,756)
- -----------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (2)
Issued --Regular . . . . . . . . . . . . . 1,979,118 4,182,559 265,317 796,836
--In Lieu of Cash Distributions . . 65,243 89,767 23,478 43,222
--Exchange . . . . . . . . . . . . . 828,407 1,748,976 158,500 413,024
Redeemed --Regular . . . . . . . . . . . . . (2,070,892) (4,044,714) (309,968) (628,207)
--Exchange . . . . . . . . . . . . . (831,987) (1,350,414) (229,175) (376,843)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) from Capital
Share Transactions . . . . . . . . . . . (30,111) 626,174 (91,848) 248,032
- -----------------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) . . . . . . . . (30,209) 625,796 (93,389) 231,656
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of Period . . . . . . . . . . . . . 4,163,625 3,537,829 1,560,561 1,328,905
- -----------------------------------------------------------------------------------------------------------------------------------
End of Period . . . . . . . . . . . . . . . . $4,133,416 $4,163,625 $1,467,172 $1,560,561
===================================================================================================================================
(1) Distributions Per Share
Net Investment Income . . . . . . . . . . $.017 $.024 $.292 $.534
Realized Net Gain . . . . . . . . . . . . -- -- $.001 $.020
- -----------------------------------------------------------------------------------------------------------------------------------
(2) Shares Issued and Redeemed
Issued . . . . . . . . . . . . . . . . . . 2,807,525 5,931,535 27,542 77,761
Issued in Lieu of Cash Distributions . . . 65,243 89,767 1,525 2,781
Redeemed . . . . . . . . . . . . . . . . . (2,902,879) (5,395,128) (35,047) (64,634)
- -----------------------------------------------------------------------------------------------------------------------------------
(30,111) 626,174 (5,980) 15,908
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE> 8
STATEMENT OF CHANGES IN NET ASSETS (continued)
<TABLE>
<CAPTION>
LIMITED-TERM INTERMEDIATE-TERM
PORTFOLIO PORTFOLIO
- -----------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED Year Ended SIX MONTHS ENDED Year Ended
FEBRUARY 28, 1995 August 31, 1994 FEBRUARY 28, 1995 August 31, 1994
(000) (000) (000) (000)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net Investment Income . . . . . . . . . . . . $ 38,016 $ 76,087 $ 131,252 $ 262,995
Realized Net Gain (Loss) . . . . . . . . . . . (4,272) (1,555) 4,615 51,878
Change in Unrealized Appreciation
(Depreciation) . . . . . . . . . . . . . . . (6,452) (35,516) (22,597) (200,274)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations . . . . . . . 27,292 39,016 113,270 114,599
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS (1)
Net Investment Income . . . . . . . . . . . . (38,016) (76,087) (131,252) (262,995)
Realized Net Gain . . . . . . . . . . . . . . -- (3,611) (57,689) (29,272)
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distributions . . . . . . . . . . . (38,016) (79,698) (188,941) (292,267)
- -----------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (2)
Issued --Regular . . . . . . . . . . . . . 206,523 705,088 404,026 1,111,290
--In Lieu of Cash Distributions . . 29,710 63,053 145,022 223,421
--Exchange . . . . . . . . . . . . . 158,611 403,840 366,245 661,185
Redeemed --Regular . . . . . . . . . . . . . (232,328) (466,315) (377,637) (753,226)
--Exchange . . . . . . . . . . . . . (324,595) (475,703) (500,855) (942,767)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) from Capital
Share Transactions . . . . . . . . . . . (162,079) 229,963 36,801 299,903
- -----------------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) . . . . . . . . (172,803) 189,281 (38,870) 122,235
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of Period . . . . . . . . . . . . . 1,814,320 1,625,039 5,067,612 4,945,377
- -----------------------------------------------------------------------------------------------------------------------------------
End of Period . . . . . . . . . . . . . . . . $1,641,517 $1,814,320 $5,028,742 $5,067,612
===================================================================================================================================
(1) Distributions Per Share
Net Investment Income . . . . . . . . . . $.231 $.454 $.345 $.683
Realized Net Gain . . . . . . . . . . . . -- $.022 $.158 $.076
- -----------------------------------------------------------------------------------------------------------------------------------
(2) Shares Issued and Redeemed
Issued . . . . . . . . . . . . . . . . . . 34,945 103,446 43,585 133,187
Issued in Lieu of Cash Distributions . . . 2,845 5,898 29,034 16,855
Redeemed . . . . . . . . . . . . . . . . . (53,409) (88,203) (69,999) (128,504)
- -----------------------------------------------------------------------------------------------------------------------------------
(15,619) 21,141 2,620 21,538
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE> 9
<TABLE>
<CAPTION>
INSURED LONG-TERM LONG-TERM HIGH-YIELD
PORTFOLIO PORTFOLIO PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED Year Ended ENDED Year Ended ENDED Year Ended
FEBRUARY 28, August 31, FEBRUARY 28, August 31, FEBRUARY 28, August 31,
1995 1994 1995 1994 1995 1994
(000) (000) (000) (000) (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE)
IN NET ASSETS
OPERATIONS
Net Investment Income . . . . . . . $ 54,853 $ 115,496 $ 29,037 $ 58,507 $ 53,183 $ 107,526
Realized Net Gain (Loss) . . . . . . (529) 30,179 1,641 19,366 (10,222) 39,887
Change in Unrealized
Appreciation (Depreciation) . . . 19,966 (153,870) 2,765 (76,503) 5,640 (139,457)
- ---------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in
Net Assets Resulting
from Operations . . . . . . 74,290 (8,195) 33,443 1,370 48,601 7,956
- ---------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS (1)
Net Investment Income . . . . . . . (54,853) (115,496) (29,037) (58,507) (53,183) (107,526)
Realized Net Gain . . . . . . . . . (26,394) (29,332) (14,263) (19,678) (27,683) (36,102)
- ---------------------------------------------------------------------------------------------------------------------------------
Total Distributions . . . . . (81,247) (144,828) (43,300) (78,185) (80,866) (143,628)
- ---------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (2)
Issued --Regular . . . . . . . . . 66,371 213,973 78,014 123,617 109,490 288,307
--In Lieu of Cash
Distributions . . . . . 55,318 98,489 31,148 56,630 58,491 104,549
--Exchange . . . . . . . . 94,123 135,738 119,709 129,162 179,873 257,090
Redeemed --Regular . . . . . . . . . (109,981) (223,877) (67,370) (130,205) (122,160) (263,156)
--Exchange . . . . . . . . (142,600) (327,530) (125,576) (232,028) (222,236) (400,749)
- ---------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease)
from Capital Share
Transactions . . . . . . . . (36,769) (103,207) 35,925 (52,824) 3,458 (13,959)
- ---------------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) . . (43,726) (256,230) 26,068 (129,639) (28,807) (149,631)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of Period . . . . . . . . 1,938,017 2,194,247 1,000,938 1,130,577 1,781,129 1,930,760
- ---------------------------------------------------------------------------------------------------------------------------------
End of Period . . . . . . . . . . . $1,894,291 $1,938,017 $1,027,006 $1,000,938 $1,752,322 $1,781,129
=================================================================================================================================
(1) Distributions Per Share
Net Investment Income . . . . . $.348 $.699 $.308 $.609 $.317 $.626
Realized Net Gain . . . . . . . $.173 $.176 $.156 $.205 $.173 $.214
- ---------------------------------------------------------------------------------------------------------------------------------
(2) Shares Issued and Redeemed
Issued . . . . . . . . . . . . . 14,067 28,101 19,779 23,106 29,317 50,641
Issued in Lieu of Cash
Distributions . . . . . . . . 4,859 7,892 3,110 5,128 5,971 9,687
Redeemed . . . . . . . . . . . . (22,184) (44,443) (19,308) (33,017) (35,113) (61,773)
- ---------------------------------------------------------------------------------------------------------------------------------
(3,258) (8,450) 3,581 (4,783) 175 (1,445)
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE> 10
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------------
Year Ended August 31,
SIX MONTHS ENDED -------------------------------------------------------
For a Share Outstanding Throughout Each Period FEBRUARY 28, 1995 1994 1993 1992 1991 1990
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD . . . . . . . . $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS
Net Investment Income . . . . . . . . . . . . . . .017 .024 .025 .035 .050 .057
Net Realized and Unrealized Gain (Loss)
on Investments . . . . . . . . . . . . . . . . . -- -- -- -- -- --
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS . . . . . . .017 .024 .025 .035 .050 .057
- -------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
Dividends from Net Investment Income . . . . . . . (.017) (.024) (.025) (.035) (.050) (.057)
Distributions from Realized Capital Gains . . . . . -- -- -- -- -- --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS . . . . . . . . . . . . . (.017) (.024) (.025) (.035) (.050) (.057)
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD . . . . . . . . . . . $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===============================================================================================================================
TOTAL RETURN . . . . . . . . . . . . . . . . . . . . +1.69% +2.43% +2.51% +3.54% +5.08% +5.90%
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net Assets, End of Period (Millions) . . . . . . . . $4,133 $4,164 $3,538 $3,165 $2,709 $2,488
Ratio of Expenses to Average Net Assets . . . . . . . .21%* .20% .20% .23% .25% .25%
Ratio of Net Investment Income to
Average Net Assets . . . . . . . . . . . . . . . . 3.39%* 2.41% 2.48% 3.45% 4.94% 5.72%
Portfolio Turnover Rate . . . . . . . . . . . . . . . N/A N/A N/A N/A N/A N/A
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------------
Year Ended August 31,
SIX MONTHS ENDED -------------------------------------------------------
For a Share Outstanding Throughout Each Period FEBRUARY 28, 1995 1994 1993 1992 1991 1990
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD . . . . . . . . $15.46 $15.63 $15.64 $15.53 $15.35 $15.30
------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS
Net Investment Income . . . . . . . . . . . . . . .292 .534 .609 .720 .861 .906
Net Realized and Unrealized Gain (Loss)
on Investments . . . . . . . . . . . . . . . . . (.009) (.150) .033 .171 .180 .050
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS . . . . . . .283 .384 .642 .891 1.041 .956
- -------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
Dividends from Net Investment Income . . . . . . . (.292) (.534) (.609) (.720) (.861) (.906)
Distributions from Realized Capital Gains . . . . . (.001) (.020) (.043) (.061) -- --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS . . . . . . . . . . . . . (.293) (.554) (.652) (.781) (.861) (.906)
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD . . . . . . . . . . . $15.45 $15.46 $15.63 $15.64 $15.53 $15.35
===============================================================================================================================
TOTAL RETURN . . . . . . . . . . . . . . . . . . . . +1.85% +2.49% +4.18% +5.87% +6.96% +6.42%
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net Assets, End of Period (Millions) . . . . . . . . $1,467 $1,561 $1,329 $1,061 $841 $751
Ratio of Expenses to Average Net Assets . . . . . . . .21%* .20% .20% .23% .25% .25%
Ratio of Net Investment Income to
Average Net Assets . . . . . . . . . . . . . . . . 3.82%* 3.42% 3.88% 4.58% 5.55% 5.90%
Portfolio Turnover Rate . . . . . . . . . . . . . . . 24%* 27% 46% 60% 104% 78%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized.
10
<PAGE> 11
<TABLE>
<CAPTION>
LIMITED-TERM PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------------
Year Ended August 31,
SIX MONTHS ENDED -------------------------------------------------------
For a Share Outstanding Throughout Each Period FEBRUARY 28, 1995 1994 1993 1992 1991 1990
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD . . . . . . . . $10.57 $10.80 $10.64 $10.43 $10.17 $10.14
------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS
Net Investment Income . . . . . . . . . . . . . . .231 .454 .485 .541 .614 .643
Net Realized and Unrealized Gain (Loss)
on Investments . . . . . . . . . . . . . . . . . (.050) (.208) .209 .271 .265 .041
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS . . . . . . .181 .246 .694 .812 .879 .684
- -------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
Dividends from Net Investment Income . . . . . . . (.231) (.454) (.485) (.541) (.614) (.643)
Distributions from Realized Capital Gains . . . . . -- (.022) (.049) (.061) (.005) (.011)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS . . . . . . . . . . . . . (.231) (.476) (.534) (.602) (.619) (.654)
NET ASSET VALUE, END OF PERIOD . . . . . . . . . . . $10.52 $10.57 $10.80 $10.64 $10.43 $10.17
===============================================================================================================================
TOTAL RETURN . . . . . . . . . . . . . . . . . . . . +1.75% +2.31% +6.68% +8.01% +8.88% +6.93%
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net Assets, End of Period (Millions) . . . . . . . . $1,642 $1,814 $1,625 $873 $420 $245
Ratio of Expenses to Average Net Assets . . . . . . . .21%* .20% .20% .23% .25% .25%
Ratio of Net Investment Income to
Average Net Assets . . . . . . . . . . . . . . . . 4.46%* 4.24% 4.50% 5.08% 5.91% 6.31%
Portfolio Turnover Rate . . . . . . . . . . . . . . . 26%* 21% 20% 37% 57% 55%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE-TERM PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------------
Year Ended August 31,
SIX MONTHS ENDED -------------------------------------------------------
For a Share Outstanding Throughout Each Period FEBRUARY 28, 1995 1994 1993 1992 1991 1990
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD . . . . . . . . $13.02 $13.45 $12.85 $12.41 $11.90 $12.08
------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS
Net Investment Income . . . . . . . . . . . . . . .345 .683 .710 .747 .791 .822
Net Realized and Unrealized Gain (Loss)
on Investments . . . . . . . . . . . . . . . . . (.032) (.354) .721 .516 .605 (.114)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS . . . . . . .313 .329 1.431 1.263 1.396 .708
- -------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
Dividends from Net Investment Income . . . . . . . (.345) (.683) (.710) (.747) (.791) (.822)
Distributions from Realized Capital Gains . . . . . (.158) (.076) (.121) (.076) (.095) (.066)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS . . . . . . . . . . . . . (.503) (.759) (.831) (.823) (.886) (.888)
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD . . . . . . . . . . . $12.83 $13.02 $13.45 $12.85 $12.41 $11.90
===============================================================================================================================
TOTAL RETURN . . . . . . . . . . . . . . . . . . . . +2.56% +2.49% +11.54% +10.52% +12.15% +6.05%
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net Assets, End of Period (Millions) . . . . . . . . $5,029 $5,068 $4,945 $3,102 $2,006 $1,259
Ratio of Expenses to Average Net Assets . . . . . . . .21%* .20% .20% .23% .25% .25%
Ratio of Net Investment Income to
Average Net Assets . . . . . . . . . . . . . . . . 5.51%* 5.15% 5.41% 5.91% 6.49% 6.83%
Portfolio Turnover Rate . . . . . . . . . . . . . . . 2%* 18% 15% 32% 27% 54%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized.
11
<PAGE> 12
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
INSURED LONG-TERM PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------------
Year Ended August 31,
SIX MONTHS ENDED -------------------------------------------------------
For a Share Outstanding Throughout Each Period FEBRUARY 28, 1995 1994 1993 1992 1991 1990
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD . . . . . . . . $11.98 $12.89 $12.28 $11.74 $11.25 $11.67
------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS
Net Investment Income . . . . . . . . . . . . . . .348 .699 .718 .768 .775 .805
Net Realized and Unrealized Gain (Loss)
on Investments . . . . . . . . . . . . . . . . . .143 (.734) .813 .616 .615 (.267)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS . . . . . . .491 (.035) 1.531 1.384 1.390 .538
- -------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
Dividends from Net Investment Income . . . . . . . (.348) (.699) (.718) (.768) (.775) (.805)
Distributions from Realized Capital Gains . . . . . (.173) (.176) (.203) (.076) (.125) (.153)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS . . . . . . . . . . . . . (.521) (.875) (.921) (.844) (.900) (.958)
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD . . . . . . . . . . . $11.95 $11.98 $12.89 $12.28 $11.74 $11.25
===============================================================================================================================
TOTAL RETURN . . . . . . . . . . . . . . . . . . . . +4.40% -0.32% +13.06% +12.22% +12.79% +4.74%
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net Assets, End of Period (Millions) . . . . . . . . $1,894 $1,938 $2,194 $1,947 $1,551 $1,122
Ratio of Expenses to Average Net Assets . . . . . . . .21%* .20% .20% .23% .25% .25%
Ratio of Net Investment Income to
Average Net Assets . . . . . . . . . . . . . . . . 6.11%* 5.62% 5.77% 6.34% 6.77% 6.99%
Portfolio Turnover Rate . . . . . . . . . . . . . . . 6%* 16% 30% 42% 33% 47%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
LONG-TERM PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------------
Year Ended August 31,
SIX MONTHS ENDED -------------------------------------------------------
For a Share Outstanding Throughout Each Period FEBRUARY 28, 1995 1994 1993 1992 1991 1990
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD . . . . . . . . $10.58 $11.38 $10.95 $10.58 $10.13 $10.53
------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS
Net Investment Income . . . . . . . . . . . . . . .308 .609 .640 .711 .722 .732
Net Realized and Unrealized Gain (Loss)
on Investments . . . . . . . . . . . . . . . . . .036 (.595) .715 .561 .626 (.233)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS . . . . . . .344 .014 1.355 1.272 1.348 .499
- -------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
Dividends from Net Investment Income . . . . . . . (.308) (.609) (.640) (.711) (.722) (.732)
Distributions from Realized Capital Gains . . . . . (.156) (.205) (.285) (.191) (.176) (.167)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS . . . . . . . . . . . . . (.464) (.814) (.925) (.902) (.898) (.899)
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD . . . . . . . . . . . $10.46 $10.58 $11.38 $10.95 $10.58 $10.13
===============================================================================================================================
TOTAL RETURN . . . . . . . . . . . . . . . . . . . . +3.53% +0.08% +13.09% +12.60% +13.86% +4.88%
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net Assets, End of Period (Millions) . . . . . . . . $1,027 $1,001 $1,131 $962 $798 $683
Ratio of Expenses to Average Net Assets . . . . . . . .21%* .20% .20% .23% .25% .25%
Ratio of Net Investment Income to
Average Net Assets . . . . . . . . . . . . . . . . 6.14%* 5.56% 5.81% 6.52% 7.09% 7.04%
Portfolio Turnover Rate . . . . . . . . . . . . . . . 23%* 45% 36% 63% 62% 110%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized.
12
<PAGE> 13
<TABLE>
<CAPTION>
HIGH-YIELD PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------------
Year Ended August 31,
SIX MONTHS ENDED -------------------------------------------------------
For a Share Outstanding Throughout Each Period FEBRUARY 28, 1995 1994 1993 1992 1991 1990
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD . . . . . . . . $10.39 $11.17 $10.76 $10.32 $9.90 $10.27
------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS
Net Investment Income . . . . . . . . . . . . . . .317 .626 .669 .723 .732 .739
Net Realized and Unrealized Gain (Loss)
on Investments . . . . . . . . . . . . . . . . . (.007) (.566) .664 .546 .560 (.259)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS . . . . . . .310 .060 1.333 1.269 1.292 .480
- -------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
Dividends from Net Investment Income . . . . . . . (.317) (.626) (.669) (.723) (.732) (.739)
Distributions from Realized Capital Gains . . . . . (.173) (.214) (.254) (.106) (.140) (.111)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS . . . . . . . . . . . . . (.490) (.840) (.923) (.829) (.872) (.850)
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD . . . . . . . . . . . $10.21 $10.39 $11.17 $10.76 $10.32 $9.90
===============================================================================================================================
TOTAL RETURN . . . . . . . . . . . . . . . . . . . . +3.28% +0.52% +13.08% +12.81% +13.66% +4.82%
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net Assets, End of Period (Millions) . . . . . . . . $1,752 $1,781 $1,931 $1,505 $1,215 $962
Ratio of Expenses to Average Net Assets . . . . . . . .21%* .20% .20% .23% .25% .25%
Ratio of Net Investment Income to
Average Net Assets . . . . . . . . . . . . . . . . 6.46%* 5.83% 6.15% 6.83% 7.34% 7.30%
Portfolio Turnover Rate . . . . . . . . . . . . . . . 27%* 50% 34% 64% 58% 82%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized.
13
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS
Vanguard Municipal Bond Fund is registered under the Investment Company Act of
1940 as a diversified open-end investment company and consists of the Money
Market, Short-Term, Limited-Term, Intermediate-Term, Insured Long-Term,
Long-Term, and High-Yield Portfolios. Each Portfolio invests in debt
instruments of municipal issuers; although each Portfolio maintains a
diversified schedule of investments, the issuers' abilities to meet their
obligations may be affected by economic and political developments in a
specific state or region.
A. The following significant accounting policies are in conformity with
generally accepted accounting principles for investment companies. Such
policies are consistently followed by the Fund in the preparation of financial
statements.
1. SECURITY VALUATION: Money Market Portfolio: investment securities
are stated at amortized cost which approximates market value. Other
Portfolios: municipal bonds are valued utilizing primarily the latest bid
prices or, if bid prices are not available, on the basis of valuations
based on a matrix system (which considers such factors as security prices,
yields, maturities, and ratings), both as furnished by an independent
pricing service.
2. FEDERAL INCOME TAXES: Each Portfolio of the Fund intends to
continue to qualify as a regulated investment company and distribute all of
its income. Accordingly, no provision for Federal income taxes is required
in the financial statements.
3. FUTURES CONTRACTS: Each Portfolio of the Fund, except the Money
Market Portfolio, utilizes Municipal Bond Index, U.S. Treasury Bond, and
U.S. Treasury Note futures contracts to a limited extent, with the
objectives of enhancing returns, managing interest rate risk, maintaining
liquidity, diversifying credit risk and minimizing transaction costs. The
Portfolios may purchase futures contracts instead of municipal bonds when
futures contracts are believed to be priced more attractively than
municipal bonds. The Portfolios may also seek to take advantage of price
differences among bond market sectors by simultaneously buying futures (or
bonds) of one market sector and selling futures (or bonds) of another
sector. Futures contracts may also be used to simulate a fully invested
position in the underlying bonds while maintaining a cash balance for
liquidity.
The primary risks associated with the use of futures contracts are
imperfect correlation between changes in market values of bonds held by the
Portfolios and the prices of futures contracts, and the possibility of an
illiquid market. Futures contracts are valued based upon their quoted daily
settlement prices. Fluctuations in the values of futures contracts are
recorded as unrealized appreciation (depreciation) until terminated at
which time realized gains (losses) are recognized. Unrealized appreciation
(depreciation) related to open futures contracts is required to be treated
as realized gain (loss) for Federal income tax purposes.
4. DISTRIBUTIONS: Distributions from net investment income are
declared on a daily basis payable on the first business day of the
following month. Annual distributions from realized gains, if any, are
recorded on the ex-dividend date. Capital gains distributions are
determined on a tax basis and may differ from realized capital gains for
financial reporting purposes due to differences in the timing of
realization of gains.
5. OTHER: Security transactions are accounted for on the date the
securities are purchased or sold. Costs used in determining realized gains
and losses on sales of investment securities are those of specific
securities sold. Premiums and original issue discounts are amortized and
accreted, respectively, to interest income over the lives of the respective
securities.
B. The Vanguard Group, Inc. furnishes at cost investment advisory, corporate
management, administrative, marketing and distribution services. The costs of
such services are allocated to the Fund under methods approved by the Board of
Directors. At February 28, 1995, the Fund had contributed
14
<PAGE> 15
capital aggregating $2,522,000 to Vanguard (included in Other Assets),
representing 12.6% of Vanguard's capitalization. The Fund's officers and
directors are also officers and directors of Vanguard.
The Fund's investment adviser may direct new issue portfolio trades, subject to
obtaining the best price and execution, to underwriters who have agreed to
rebate or credit to the Fund a portion of the underwriting fees generated. Such
rebates or credits are used solely to reduce the Fund's administrative
expenses. For the six months ended February 28, 1995, directed brokerage
arrangements reduced expenses of the Limited-Term, Intermediate-Term, Insured
Long-Term, and Long-Term Portfolios by $63,000 (an annual rate of .01% of
average net assets), $174,000 (.01% of average net assets), $69,000 (.01% of
average net assets), and $78,000 (.02% of average net assets), respectively.
C. During the six months ended February 28, 1995, purchases and sales of
investment securities other than temporary cash investments were:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
(000)
-------------------------
Portfolio Purchases Sales
- -------------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM $142,520 $240,465
LIMITED-TERM 206,180 335,702
INTERMEDIATE-TERM 34,020 287,833
INSURED LONG-TERM 52,699 142,715
LONG-TERM 101,801 172,091
HIGH-YIELD 204,744 416,466
- -------------------------------------------------------------------------------------
</TABLE>
D. At February 28, 1995, unrealized appreciation (depreciation) of investment
securities for financial reporting and Federal income tax purposes was:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
(000)
-----------------------------------------
Net
Unrealized
Appreciated Depreciated Appreciation
Portfolio Securities Securities (Depreciation)
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHORT-TERM $ 1,972 $ (6,348) $ (4,376)
LIMITED-TERM 7,752 (12,352) (4,600)
INTERMEDIATE-TERM 166,589 (33,128) 133,461
INSURED LONG-TERM 102,495 (6,151) 96,344
LONG-TERM 45,623 (5,783) 39,840
HIGH-YIELD 61,976 (26,958) 35,018
- -------------------------------------------------------------------------------------
</TABLE>
At February 28, 1995, the aggregate settlement value and unrealized
appreciation (depreciation) of long positions in 2-Year U.S. Treasury Note
futures contracts expiring in June 1995 (Limited-Term Portfolio), and short
positions in Municipal Bond Index futures contracts expiring in June 1995
(Long-Term Portfolio), and the market value of securities deposited as initial
margin for those contracts were:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
(000)
-----------------------------------------
Market Value
Aggregate Unrealized of Securities
Settlement Appreciation Deposited as
Portfolio Value (Depreciation) Initial Margin
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
LIMITED-TERM $ 132,194 $ 132 $ 1,305
LONG-TERM 9,069 (113) 33,237
- -------------------------------------------------------------------------------------
</TABLE>
15
<PAGE> 16
THE VANGUARD FAMILY OF FUNDS
FIXED INCOME FUNDS
MONEY MARKET FUNDS
Vanguard Admiral Funds
U.S. Treasury Money Market Portfolio
Vanguard Money Market Reserves
TAX-EXEMPT MONEY MARKET FUNDS
Vanguard Municipal Bond Fund
Money Market Portfolio
Vanguard State Tax-Free Funds
Money Market Portfolios
(CA, NJ, OH, PA)
TAX-EXEMPT INCOME FUNDS
Vanguard Municipal Bond Fund
Vanguard State Tax-Free Funds
Insured Longer-Term Portfolios
(CA, FL, NJ, NY, OH, PA)
INCOME FUNDS
Vanguard Admiral Funds
Vanguard Fixed Income Securities Fund
Vanguard Preferred Stock Fund
EQUITY AND BALANCED FUNDS
GROWTH AND INCOME FUNDS
Vanguard Convertible
Securities Fund
Vanguard Equity Income Fund
Vanguard Quantitative Portfolios
Vanguard/Trustees' Equity Fund
U.S. Portfolio
Vanguard/Windsor Fund
Vanguard/Windsor II
BALANCED FUNDS
Vanguard Asset Allocation Fund
Vanguard LifeStrategy Funds
Income Portfolio
Conservative Growth Portfolio
Moderate Growth Portfolio
Growth Portfolio
Vanguard STAR Fund
Vanguard/Wellesley Income Fund
Vanguard/Wellington Fund
GROWTH FUNDS
Vanguard/Morgan Growth Fund
Vanguard/PRIMECAP Fund
Vanguard U.S. Growth Portfolio
AGGRESSIVE GROWTH FUNDS
Vanguard Explorer Fund
Vanguard Specialized Portfolios
INTERNATIONAL FUNDS
Vanguard International
Growth Portfolio
Vanguard/Trustees' Equity Fund
International Portfolio
INDEX FUNDS
Vanguard Index Trust
Total Stock Market Portfolio
500 Portfolio
Extended Market Portfolio
Growth Portfolio
Value Portfolio
Small Capitalization Stock Portfolio
Vanguard International Equity
Index Fund
European Portfolio
Pacific Portfolio
Emerging Markets Portfolio
Vanguard Bond Index Fund
Vanguard Tax-Managed Fund
Vanguard Balanced Index Fund
[THE VANGUARD GROUP LOGO]
Vanguard Financial Center Valley Forge, Pennsylvania 19482
New Account Information: Shareholder Account Services:
1-(800) 662-7447 1-(800) 662-2739
This Report has been prepared for shareholders and may be distributed to others
only if preceded or accompanied by a current prospectus. All Funds in the
Vanguard Family are offered by prospectus only.
Q950-2/95
VANGUARD
MUNICIPAL
BOND FUND
SEMI-ANNUAL REPORT
FEBRUARY 28, 1995
<PAGE> 17
VANGUARD MUNICIPAL FINANCIAL STATEMENTS
BOND FUND (unaudited)
February 28, 1995
STATEMENT OF NET ASSETS
<TABLE>
<CAPTION>
Face Market
Amount Value
MONEY MARKET PORTFOLIO (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL MONEY MARKET INSTRUMENTS
(99.4%)
- --------------------------------------------------------------------------------
ALABAMA (1.6%)
Alabama Special Care
Facilities VRDO 4.00%, 3/8/95 (3) $ 3,800 $ 3,800
Birmingham GO VRDO
4.05%-4.15%,
3/2/95-3/8/95 (LOC) 6,900 6,900
Huntsville Health Care
Auth. VRDO
4.10%, 3/2/95 (1) 32,500 32,500
Macintosh Industrial
Development Auth. VRDO
(Ciba-Geigy)
4.00%, 3/8/95 (LOC) 24,400 24,400
-----------
STATE TOTAL 67,600
-----------
- --------------------------------------------------------------------------------
ALASKA (2.0%)
Alaska Housing Finance
Corp. VRDO
3.85%, 3/8/95 12,700 12,700
4.10%, 3/8/95 (LOC) 20,000 20,000
Valdez Marine Terminal VRDO
(Exxon Pipe Project)
3.90%, 3/2/95 22,100 22,100
(Mobile Pipeline) 4.00%, 3/8/95 28,350 28,350
-----------
STATE TOTAL 83,150
-----------
- --------------------------------------------------------------------------------
ARIZONA (5.1%)
Arizona Health
Facilities Auth. VRDO
4.40%, 3/2/95 (3) 32,160 32,160
Maricopa County PCR VRDO
(Arizona Public Service)
3.75%-3.90%, 3/2/95 (LOC) 14,500 14,500
Phoenix VRDO
4.00%, 3/2/95 9,800 9,800
Salt River Project Agricultural
Improvement & Power Dist. CP
3.85%-4.25%, 3/6/95-7/10/95 128,733 128,733
TOB VRDO 4.15%, 3/8/95 26,370 26,370
-----------
STATE TOTAL 211,563
-----------
- --------------------------------------------------------------------------------
CALIFORNIA (8.1%)
California GO
5.00%, 8/1/95 (2) 15,600 15,652
California Higher Education Loan
Auth. Student Loan Rev. VRDO
4.00%-4.10%, 3/8/95 (LOC) 38,900 38,900
California RAN
5.00%, 6/28/95 74,140 74,332
Los Angeles County TRAN
4.50%, 6/30/95 63,100 63,219
Los Angeles County Unified
School Dist. TRAN
4.50%, 7/10/95 23,000 23,072
Northern California Power
Agency Public Power
9.75%, 7/1/95 (Prere.) 9,000 9,343
Orange County Unit Priced
Apartment CP (Irvine County)
4.75%, 3/7/95 (LOC) 29,900 29,900
Riverside County VRDO
3.90%, 3/7/95 (LOC) 2,400 2,400
San Bernardino County TRAN
4.50%, 7/31/95 10,000 10,009
San Francisco Unified School
Dist. TRAN
4.75%, 8/24/95 17,000 17,045
Sonoma County TRAN
4.75% 10/10/95 25,000 25,089
Ventura County TRAN
4.50%, 8/1/95 23,950 24,013
-----------
STATE TOTAL 332,974
-----------
- --------------------------------------------------------------------------------
COLORADO (.4%)
Colorado TRAN
4.50%, 6/27/95 15,000 15,026
-----------
- --------------------------------------------------------------------------------
CONNECTICUT (1.1%)
Connecticut Development
Auth. PCR VRDO
(Connecticut Light & Power)
3.95%, 3/8/95 (LOC) 14,900 14,900
Connecticut Economic
Recovery VRDO
4.10%, 3/8/95 15,500 15,500
Connecticut Special Obligation
VRDO 4.00%, 3/8/95 (LOC) 14,300 14,300
-----------
STATE TOTAL 44,700
-----------
- --------------------------------------------------------------------------------
</TABLE>
THE PORTFOLIO LISTINGS BEGIN ON THE FOLLOWING PAGES:
<TABLE>
<S> <C>
MONEY MARKET PORTFOLIO . . . . . . . . . . . . . . . . . 1
SHORT-TERM PORTFOLIO . . . . . . . . . . . . . . . . . . 7
LIMITED-TERM PORTFOLIO . . . . . . . . . . . . . . . . . 13
INTERMEDIATE-TERM PORTFOLIO . . . . . . . . . . . . . . . 19
INSURED LONG-TERM PORTFOLIO . . . . . . . . . . . . . . . 28
LONG-TERM PORTFOLIO . . . . . . . . . . . . . . . . . . . 36
HIGH-YIELD PORTFOLIO . . . . . . . . . . . . . . . . . . 39
</TABLE>
2
<PAGE> 18
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
DELAWARE (.2%)
Delaware Transportation Auth.
Motor Fuel Tax
10.30%, 7/1/95 (Prere.) $ 2,975 $ 3,098
Wilmington VRDO
(Franciscan Health Systems)
3.75%, 3/2/95 (LOC) 3,400 3,400
-------------
STATE TOTAL 6,498
-------------
- --------------------------------------------------------------------------------
DISTRICT OF COLUMBIA (.9%)
District of Columbia VRDO
(George Washington Univ.)
4.25%, 3/8/95 (LOC) 36,600 36,600
------------
- --------------------------------------------------------------------------------
FLORIDA (8.1%)
Dade County Solid Waste System
10.00%, 10/1/95 (Prere.) 5,000 5,263
Dade County Water & Sewer
System Rev. VRDO
3.95%, 3/8/95 (3) 57,280 57,280
Florida Board of Education GO
8.40%, 6/1/95 (Prere.) 17,000 17,488
Florida Dept. of Transportation
TOB VRDO 4.20%, 3/2/95 (3) 14,980 14,980
Florida Municipal Power
Agency Rev. CP 4.10%, 4/6/95 (LOC) 7,185 7,185
Gulf Breeze Local Govt.
Loan Program VRDO
4.00%, 3/2/95 (3) 75,015 75,015
Hillsborough County School
Dist. GO TOB VRDO
4.30%, 3/8/95 (1) 15,165 15,165
Jacksonville Electric Auth. CP
4.25%, 7/10/95 8,500 8,500
Lee County Hosp. Board CP
(Lee Memorial Hosp. Project)
4.00%, 3/1/95 15,000 15,000
Orlando Utilities Comm. Water &
Electric Rev. BAN VRDO
3.875%, 3/2/95 87,850 87,850
Orlando Waste Water System CP
3.95%, 3/22/95 10,365 10,365
Sunshine State Govt. Finance
Committee CP
3.95%, 3/9/95 6,775 6,775
4.10%, 4/3/95-4/6/95 (LOC) 9,500 9,500
Volusia County Tourist
Development TOB VRDO
4.20%, 3/2/95 3,100 3,100
-----------
STATE TOTAL 333,466
-----------
- --------------------------------------------------------------------------------
GEORGIA (3.7%)
Burke County Development
Auth. PCR CP
(Oglethorpe Power)
VRDO 3.90%-3.95%,
3/8/95 (3) 98,800 98,800
4.10%, 4/6/95 (LOC) 15,050 15,050
Burke County PCR VRDO
(Georgia Power)
3.75%, 3/2/95 3,700 3,700
Fulco Hosp. Auth. CP
(St. Joseph's Hosp.)
4.25%, 7/11/95 (LOC) 12,800 12,800
Municipal Gas Auth. CP
(Southern Project)
4.25%-4.30%,
5/15/95-5/16/95 (LOC) 22,200 22,200
------------
STATE TOTAL 152,550
------------
- --------------------------------------------------------------------------------
HAWAII (.7%)
Hawaii GO TOB VRDO
4.15%, 3/8/95 9,600 9,600
Honolulu City & County CP
3.80%-4.10%, 3/9/95-4/7/95 17,500 17,500
-----------
STATE TOTAL 27,100
-----------
- --------------------------------------------------------------------------------
IDAHO (.1%)
Idaho TAN
4.50%, 6/29/95 4,000 4,006
-----------
- --------------------------------------------------------------------------------
ILLINOIS (9.5%)
Chicago GO
VRDO 4.00%, 3/2/95 (LOC) 50,100 50,100
4.60%, 10/31/95* (LOC) 22,050 22,050
Illinois Development Finance
Auth. PCR CP
(Illinois Power)
VRDO 4.00%, 3/8/95 (LOC) 11,600 11,600
4.10%-4.25%, 4/11/95-7/10/95 15,000 15,000
Illinois Education Facilities VRDO
(DePaul Univ.)
4.20%, 3/8/95 (LOC) 29,900 29,900
Illinois GO
4.75%, 5/15/95-6/15/95 49,000 49,088
Illinois Health Facilities Auth.
(Franciscan Sisters)
VRDO 4.00%, 3/8/95 (LOC) 15,100 15,100
(Hosp. Sisters Service)
VRDO 4.00%, 3/8/95 (1) 17,100 17,100
VRDO 4.10%, 3/8/95 (LOC) 6,000 6,000
(Evanston Hosp.)
CP 3.40%, 3/31/95 15,000 15,000
</TABLE>
2
<PAGE> 19
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
(Northwest Community Hosp.)
VRDO 4.056%, 3/2/95 (LOC) $ 34,570 $ 34,570
(Univ. of Chicago Hosp.)
VRDO 4.00%, 3/1/95 (1) 19,200 19,200
Illinois Housing
Development Auth.
(Center Apartments) VRDO
4.10%, 3/8/95 (LOC) 48,100 48,100
Illinois Toll Highway
Auth. VRDO
3.85%, 3/8/95 (1) 61,400 61,400
-----------
STATE TOTAL 394,208
-----------
- --------------------------------------------------------------------------------
INDIANA (.9%)
Indianapolis Local Public
Improvement Notes
5.25%, 7/14/95 20,000 20,029
Mt. Vernon PCR & Solid
Waste Disposal CP
(General Electric Project)
3.90%-4.20%, 3/9/95-4/7/95 16,400 16,400
-----------
STATE TOTAL 36,429
-----------
- --------------------------------------------------------------------------------
KENTUCKY (.1%)
Trimble PCR CP
(Louisville Gas & Electric)
4.00%, 5/15/95 5,300 5,300
-----------
- --------------------------------------------------------------------------------
LOUISIANA (2.9%)
East Baton Rouge Economic
Development Auth. PCR CP
(Exxon)
4.00%, 3/1/95 3,300 3,300
Louisiana GO TOB VRDO
4.15%, 3/8/95 (1) 23,645 23,645
Louisiana Public Facilities Auth.
Hosp. Rev. CP
(Lady of Lakes Regional
Medical Center)
4.25%-4.45%,
3/1/95-5/11/95 (4) 55,825 55,825
(Sisters of Charity)
3.90%-4.00%,
3/10/95-4/5/95 8,600 8,600
Orleans Levee Dist. VRDO
4.15%, 3/8/95 (LOC) 28,905 28,905
-----------
STATE TOTAL 120,275
-----------
- --------------------------------------------------------------------------------
MARYLAND (.4%)
Maryland Health & Higher
Education Auth. CP
(Johns Hopkins Hosp.)
4.05%, 4/12/95 14,770 14,770
-----------
- --------------------------------------------------------------------------------
MASSACHUSETTS (1.9%)
Commonwealth of Massachusetts
GO TOB VRDO
4.10%, 3/8/95 (1) 19,400 19,400
Massachusetts Bay
Transit Auth.
8.60%-8.70%, 3/1/95 (Prere.) 9,500 9,785
5.00%, 9/8/95 49,900 50,122
-----------
STATE TOTAL 79,307
-----------
- --------------------------------------------------------------------------------
MICHIGAN (1.5%)
Michigan State Hosp. Finance
Auth. VRDO
(Daughters of Charity)
4.10%, 3/8/95 23,100 23,100
Michigan State Housing
Development Auth. VRDO
4.10%, 3/8/95 (LOC) 40,345 40,345
-----------
STATE TOTAL 63,445
-----------
- --------------------------------------------------------------------------------
MINNESOTA (.6%)
Anoka-Hennepin Independent
School Dist. TAN
5.50%, 3/6/96 19,930 20,050
Univ. of Minnesota CP
4.05%, 4/10/95 4,600 4,600
-----------
STATE TOTAL 24,650
-----------
- --------------------------------------------------------------------------------
MISSISSIPPI (.1%)
Jackson County PCR VRDO
(Chevron)
3.90%, 3/2/95 4,500 4,500
----------
- --------------------------------------------------------------------------------
MISSOURI (.9%)
Missouri Health & Education
Finance Auth. VRDO
(St. Anthony's Medical Center)
4.05%, 3/7/95 29,300 29,300
Sisters of Mercy Health Care
System VRDO
4.05%, 3/2/95 9,200 9,200
-----------
STATE TOTAL 38,500
-----------
- --------------------------------------------------------------------------------
NEBRASKA (.3%)
Nebraska Public Power Dist. CP
4.10%, 4/13/95 10,000 10,000
-----------
- --------------------------------------------------------------------------------
NEVADA (3.0%)
Clark County Airport VRDO
3.95%, 3/8/95 (1) 114,255 114,255
Nevada GO TOB VRDO
4.208%, 3/2/95 9,225 9,225
-----------
STATE TOTAL 123,480
-----------
- --------------------------------------------------------------------------------
</TABLE>
3
<PAGE> 20
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
NEW JERSEY (.4%)
New Jersey CP
4.00%, 5/1/95 $ 4,100 $ 4,100
New Jersey GO TOB
4.65%, 8/15/95* 12,200 12,200
-----------
STATE TOTAL 16,300
-----------
- --------------------------------------------------------------------------------
NEW YORK (5.1%)
Erie County BAN
4.75%, 8/15/95 9,865 9,894
New York City GO VRDO
3.75%, 3/2/95 (1) 7,150 7,150
3.75%, 3/2/95 (4) 5,000 5,000
3.95%, 3/2/95 (LOC) 5,000 5,000
New York City RAN
4.50%-4.75%,
4/12/95-6/30/95 112,400 112,522
New York City Municipal
Water & Sewer Rev. VRDO
3.70%-3.90%, 3/2/95 (3) 34,100 34,100
New York City Municipal
Water Finance Auth. CP
4.45%, 7/10/95 (LOC) 37,800 37,800
-----------
STATE TOTAL 211,466
-----------
- --------------------------------------------------------------------------------
NORTH CAROLINA (3.6%)
Charlotte Airport VRDO
3.95%, 3/8/95 (1) 15,300 15,300
North Carolina Education
Facilities Auth. VRDO
(Duke Univ.)
4.106%, 3/2/95 21,700 21,700
North Carolina Medical
Care Hosp. Rev. VRDO
(Duke Univ. Hosp.)
4.106%, 3/2/95 23,400 23,400
(Moses Cone Hosp.)
4.00%, 3/2/95 19,500 19,500
North Carolina Municipal
Power Agency
CP 4.10%, 4/11/95 9,000 9,000
TOB VRDO 4.15%, 3/8/95 (2) 45,000 45,000
Wake County Pollution Control
Finance Auth. VRDO
(Carolina Power & Light)
4.00%, 3/8/95 (LOC) 14,500 14,500
-----------
STATE TOTAL 148,400
-----------
- --------------------------------------------------------------------------------
OHIO (1.0%)
Butler County GO BAN
4.80%, 11/3/95 1,700 1,704
Columbus Electric System
Rev. VRDO
3.85%, 4/3/95 (LOC) 7,600 7,600
Columbus Sewer Rev. VRDO
3.90%, 3/2/95 700 700
Euclid City BAN
4.24%, 9/29/95 2,640 2,642
Ohio Air Quality Development
Auth. PCR CP
(Cincinnati Gas & Electric)
3.95%-4.10%,
3/6/95-4/3/95 (LOC) 14,200 14,200
Ohio Student Loan VRDO
4.00%, 3/8/95 (LOC) 14,950 14,950
-----------
STATE TOTAL 41,796
-----------
- --------------------------------------------------------------------------------
OKLAHOMA (.3%)
Oklahoma City Industrial &
Cultural Facilities Trust VRDO
4.05%, 3/7/95 (LOC) 13,600 13,600
-----------
- --------------------------------------------------------------------------------
OREGON (3.7%)
Klamath Falls
(Salt Caves Hydro Project)
3.75%, 5/2/95 (ETM) 10,000 10,000
Oregon Veterans
Welfare VRDO
4.05%-4.10%, 3/8/95 (LOC) 144,045 144,045
-----------
STATE TOTAL 154,045
-----------
- --------------------------------------------------------------------------------
PENNSYLVANIA (1.9%)
Beaver County Industrial
Development Auth. PCR CP
(Duquesne Light Co.)
4.10%, 4/7/95 (LOC) 5,450 5,450
Lehigh County Auth. CP
(Hosp. Central Services)
4.10%, 4/6/95 (1) 5,700 5,700
Northeast Pennsylvania
Hosp. Auth. CP
(Hosp. Central Services)
4.10%, 4/11/95 (1) 2,460 2,460
Pennsylvania System of
Higher Education VRDO
(Univ. of Pittsburgh)
3.954%, 3/2/95 (LOC) 9,800 9,800
Pennsylvania TAN
4.75%, 6/30/95 35,000 35,089
Philadelphia Gas Works Rev. CP
4.20%-4.25%,
5/1/95-5/31/95 (LOC) 13,000 13,000
Sayre Health Care Facility
Auth. VRDO
4.05%, 3/8/95 (2) 4,900 4,900
-----------
STATE TOTAL 76,399
-----------
- --------------------------------------------------------------------------------
</TABLE>
4
<PAGE> 21
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
SOUTH CAROLINA (1.3%)
Greenville Hosp. System VRDO
3.90%, 3/2/95 $ 24,500 $ 24,500
South Carolina Public
Service Auth. CP
4.05%, 4/10/95 17,350 17,350
York County PCR CP
(Duke Power Co.)
3.85%-4.30%, 3/1/95-7/11/95 12,050 12,050
-----------
STATE TOTAL 53,900
-----------
- --------------------------------------------------------------------------------
TENNESSEE (1.8%)
Metropolitan Govt. of Nashville
and Davidson County
Health Education CP
(Baptist Hosp.)
4.00%, 5/15/95 24,400 24,400
Tennessee GO TOB VRDO
4.15%, 3/2/95 7,080 7,080
Tennessee Local Development
Auth. BAN
4.50%, 6/1/95 5,900 5,908
Tennessee VRDO
4.00%, 3/8/95 38,400 38,400
-----------
STATE TOTAL 75,788
-----------
- --------------------------------------------------------------------------------
TEXAS (17.8%)
Abilene Health Facility Development
Corp. VRDO
(Hendrick Medical Center)
4.30%, 3/8/95 (LOC) 10,650 10,650
Bexar County VRDO
(Incarnate Word Health Service)
4.05%, 3/8/95 (4) 74,200 74,200
Dallas Counties Waterworks
& Sewer TOB VRDO
4.15%, 3/8/95 30,000 30,000
Dallas GO
8.20%, 5/1/95 4,300 4,325
Dallas Independent
School Dist. TRAN
4.875%, 8/30/95 26,750 26,851
Gulf Coast Waste Disposal
Auth. PCR VRDO
(Amoco Oil Project)
3.70%, 3/2/95 6,500 6,500
Harris County Health Facility
Development Corp. VRDO
(Children's Hosp.)
3.85%, 3/8/95 21,000 21,000
(St. Luke's Episcopal Hosp.)
3.75%, 3/2/95 8,700 8,700
Harris County School Health
System CP
(Sisters of Charity)
3.95%-4.25%,
3/8/95-7/11/95 46,350 46,350
Harris County Toll Road VRDO
4.00%, 3/8/95 88,800 88,800
Houston CP
4.15%, 4/13/95 4,000 4,000
Houston City VRDO
3.85%, 3/8/95 23,700 23,700
3.85%, 3/8/95 (LOC) 50,700 50,700
Plano Health Facility
Development Corp. CP
4.00%-4.20%, 4/11/95 (1) 15,200 15,200
Richardson Independent School
Dist. TRAN
5.00%, 8/31/95 12,000 12,047
San Antonio Electric & Gas CP
4.00%-4.25%,
4/11/95-5/16/95 42,200 42,200
San Antonio GO TOB VRDO
4.05%, 3/2/95 6,000 6,000
Southwest Higher Education
Auth. VRDO
(Southern Methodist Univ.)
4.00%, 3/2/95 (LOC) 10,100 10,100
Tarrant County Health Facility
Development Corp. VRDO
(Harris Methodist Health)
4.10%, 3/2/95 (LOC) 9,900 9,900
Texas A&M Board of
Regents CP
3.85%-4.50%,
3/1/95-5/30/95 62,450 62,450
Texas Municipal Power
Agency Rev.
9.50%, 9/1/95 (Prere.) 4,050 4,235
Texas Public Finance Auth. CP
4.25%, 5/18/95-5/25/95 48,500 48,500
4.50%, 5/11/95 50,000 50,000
Texas GO TOB VRDO
4.157%, 3/2/95 (Prere.) 9,350 9,350
Texas School Board TAN
4.75%, 8/31/95 (LOC) 16,000 16,047
Texas TRAN
5.00%, 8/31/95 30,000 30,039
Univ. of Texas Board
of Regents
CP 4.25%, 7/10/95 14,970 14,970
TOB VRDO 4.05%, 3/2/95 10,170 10,170
-----------
STATE TOTAL 736,984
-----------
- --------------------------------------------------------------------------------
</TABLE>
5
<PAGE> 22
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
UTAH (1.1%)
Emery County PCR VRDO
(Pacific Corp.)
4.00%, 3/2/95 (2) $ 13,200 $ 13,200
Intermountain Power Agency
3.75%, 3/15/95* 10,000 10,000
CP 4.20%-4.25%,
5/12/95-5/31/95 9,400 9,400
Salt Lake City CP
4.10%, 4/6/95 (LOC) 4,510 4,510
Utah Board of Regents
TOB VRDO 4.30%, 3/8/95 (2) 10,000 10,000
-----------
STATE TOTAL 47,110
-----------
- --------------------------------------------------------------------------------
VERMONT (.5%)
Vermont GO CP
4.00%, 5/15/95 21,000 21,000
----------
- --------------------------------------------------------------------------------
VIRGINIA (1.3%)
Fairfax County Industrial
Development Auth.
(Fairfax Hosp.)
VRDO 4.05%, 3/8/95 (LOC) 8,000 8,000
(Inova Health System Project)
CP 4.20%-4.25%
4/7/95-5/30/95 25,000 25,000
Peninsula Port Auth. VRDO
(Shell Oil)
3.75%, 3/2/95 4,100 4,100
Virginia Housing Commonwealth
Mortgage Bond
4.25%, 7/12/95* 15,000 15,000
-----------
STATE TOTAL 52,100
-----------
- --------------------------------------------------------------------------------
WASHINGTON (1.3%)
Chelan County Development
Corp. VRDO (Alcoa Project)
4.00%, 3/7/95 (LOC) 8,300 8,300
Port of Seattle GO VRDO
4.00%, 3/8/95 2,800 2,800
Seattle Municipal
Light & Power
9.70%, 9/1/95 (Prere.) 4,865 5,092
VRDO 4.00%, 3/8/95 30,700 30,700
Washington Health
Care Facilities VRDO
(Sisters of Providence)
3.95%, 3/2/95 3,500 3,500
Washington Motor Vehicle
9.50%, 9/1/95 (Prere.) 4,700 4,823
-----------
STATE TOTAL 55,215
-----------
- --------------------------------------------------------------------------------
WEST VIRGINIA (.4%)
Kanawah Building Comm.
Hosp. VRDO
(Charleston Medical Inc.)
4.15%, 3/8/95 (LOC) 18,435 18,435
-----------
- --------------------------------------------------------------------------------
WISCONSIN (3.3%)
Milwaukee Short Term
Promissory Notes
5.50%, 2/22/96 15,000 15,105
Oak Creek City VRDO
(Wisconsin Electric Power Co.)
4.05%, 3/8/95 33,800 33,800
Wisconsin GO TOB VRDO
4.15%, 3/8/95 25,570 25,570
Wisconsin Operating Notes
4.50%, 6/15/95 60,000 60,104
-----------
STATE TOTAL 134,579
-----------
- --------------------------------------------------------------------------------
WYOMING (.5%)
Lincoln PCR VRDO
(Exxon)
3.90%, 3/2/95 17,600 17,600
Sublette County PCR VRDO
(Exxon)
3.90%, 3/2/95 3,100 3,100
-----------
STATE TOTAL 20,700
-----------
- --------------------------------------------------------------------------------
TOTAL MUNICIPAL MONEY MARKET
INSTRUMENTS
(Cost $4,107,914) 4,107,914
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (.6%)
- --------------------------------------------------------------------------------
Other Assets--Note B 77,856
Liabilities (52,354)
------------
25,502
- --------------------------------------------------------------------------------
NET ASSETS (100%)
- --------------------------------------------------------------------------------
Applicable to 4,134,042,552 outstanding
$.001 par value shares
(authorized 5,500,000,000 shares) $4,133,416
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE $1.00
================================================================================
</TABLE>
+See Note A to Financial Statements.
For explanations of abbreviations and other references, see page 44.
6
<PAGE> 23
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AT FEBRUARY 28, 1995, NET ASSETS CONSISTED OF:
- --------------------------------------------------------------------------------
Amount Per
(000) Share
------------ -----------
<S> <C> <C>
Paid in Capital $4,134,068 $1.00
Undistributed Net
Investment Income -- --
Accumulated Net
Realized Losses (652) --
Unrealized Appreciation of
Investments -- --
- --------------------------------------------------------------------------------
NET ASSETS $4,133,416 $1.00
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Face Market
Amount Value
SHORT-TERM PORTFOLIO (000) (000)+
- --------------------------------------------------------------------------------
MUNICIPAL BONDS (99.0%)
- --------------------------------------------------------------------------------
<S> <C> <C>
ALABAMA (1.3%)
Birmingham GO VRDO
4.05%, 3/2/95 (LOC) $ 9,700 $ 9,700
Birmingham North
Medical Clinic
(Carraway Hosp.)
9.00%, 10/1/95 (Prere.) 8,500 8,898
-----------
STATE TOTAL 18,598
-----------
- --------------------------------------------------------------------------------
ALASKA (3.5%)
Alaska Housing Finance
Corp. VRDO
3.85%, 3/8/95 1,300 1,300
4.00%, 3/8/95 20,000 20,000
Anchorage Electric Rev.
9.75%, 9/1/95 (Prere.) 3,700 3,874
North Slope Borough GO
7.125%, 7/1/98 (1) 7,710 8,178
7.15%, 7/1/99 (1) 5,670 6,085
Valdez PCR CP
4.20%, 4/12/95 11,500 11,500
-----------
STATE TOTAL 50,937
-----------
- --------------------------------------------------------------------------------
ARIZONA (.7%)
City of Phoenix GO
6.50%, 7/1/95 5,000 5,034
Mesa Municipal Development
Corp. CP
4.05%, 3/6/95 (LOC) 5,585 5,585
-----------
STATE TOTAL 10,619
-----------
- --------------------------------------------------------------------------------
CALIFORNIA (8.7%)
Alameda County Public Facilities Corp.
COP 6.15%, 9/1/96* (LOC) 5,000 5,030
California Health Facility Auth.
(Catholic Health Care West)
VRDO 3.85%, 3/8/95 (1) 400 400
Clovis Unified School Dist.
4.20%, 8/1/95 5,800 5,790
Contra Costa Transportation Auth.
Sales Tax Rev.
5.80%, 3/1/95 3,730 3,730
Irvine Assessment Dist. CP
(Irvine County)
4.80%, 3/7/95 (LOC) 15,000 15,000
Los Angeles COP
5.50%, 12/1/96 3,400 3,429
Los Angeles County TRAN
4.50%, 6/30/95 6,700 6,703
Los Angeles Dept. of Water and
Power Rev.
9.00%, 11/15/97 5,855 6,417
</TABLE>
7
<PAGE> 24
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Oakland Redevelopment Agency
COP 9.25%, 8/1/95 (Prere.) $ 3,695 $ 3,847
Orange County VRDO
(Irvine Coast Assessment)
4.20%, 3/2/95 (LOC) 400 400
Sacramento County TRAN
4.50%, 9/29/95 25,000 25,010
Sacramento Utility Dist. Rev.
7.875%, 8/15/98 (Prere.) 4,000 4,448
San Bernardino County TRAN
4.50%, 7/31/95 17,970 17,917
San Diego County TRAN
4.50%, 9/29/95 15,000 14,940
Santa Barbara County TRAN
4.25%, 7/31/95 15,000 14,935
-----------
STATE TOTAL 127,996
-----------
- --------------------------------------------------------------------------------
COLORADO (.9%)
Colorado Health Auth.
(Sisters of Charity Health System)
5.70%, 5/15/95 2,300 2,306
Jefferson County School Dist.
8.50%, 12/15/95 (Prere.) 5,000 5,164
Municipal Subdist. of
Northern Colorado
9.00%, 12/1/95 (Prere.) 3,000 3,133
9.25%, 12/1/95 (Prere.) 2,420 2,532
-----------
STATE TOTAL 13,135
-----------
- --------------------------------------------------------------------------------
CONNECTICUT (2.0%)
Connecticut Development Auth.
PCR VRDO
(Connecticut Light & Power Co.)
3.95%, 3/8/95 (LOC) 11,900 11,900
Connecticut Economic
Recovery Notes
VRDO 4.10%, 3/8/95 1,100 1,100
GO 5.40%, 6/15/95 5,455 5,472
Connecticut GO
5.65%, 11/15/98 2,500 2,566
Connecticut Special Tax
Obligation Rev.
4.25%, 9/1/95 5,630 5,625
8.60%, 10/15/95 (Prere.) 3,075 3,217
-----------
STATE TOTAL 29,880
-----------
- --------------------------------------------------------------------------------
DISTRICT OF COLUMBIA (.7%)
District of Columbia GO
5.50%, 6/1/95 (3) 4,705 4,712
5.60%, 6/1/96 (3) 5,000 5,023
-----------
STATE TOTAL 9,735
-----------
- --------------------------------------------------------------------------------
FLORIDA (6.6%)
Dade County School Dist.
7.00%, 8/1/98 (3) 7,510 7,982
Dade County Water & Sewer
VRDO 3.95%, 3/8/95 (3) 16,675 16,675
4.50%, 10/1/98 (3) 4,000 3,932
Gulf Breeze Local Govt. Loan
VRDO 4.00%, 3/2/95 (3) 8,395 8,395
Hillsborough County
Aviation Auth.
(Tampa Airport)
3.50%, 10/1/95 (3) 4,980 4,939
Jacksonville Electric Auth. Rev.
7.50%, 10/1/95 (Prere.) 9,090 9,393
(St. John's River Project)
10.25%, 10/1/95 (Prere.) 5,000 5,272
Jacksonville Hosp. Rev.
10.50%, 10/1/97 (Prere.) 8,000 9,252
Jacksonville Transportation Auth.
9.00%, 1/1/98 (Prere.) 3,780 4,262
Orlando Utility Comm. Water
& Electric Rev. 4.40%, 10/1/96 3,255 3,236
8.50%, 10/1/95 (Prere.) 13,980 14,599
Tampa Utilities
8.00%, 10/1/97 (Prere.) 7,700 8,443
-----------
STATE TOTAL 96,380
-----------
- --------------------------------------------------------------------------------
GEORGIA (4.8%)
Burke County Development
Auth. VRDO
(Oglethorpe Power)
3.95%, 3/8/95 13,900 13,900
Burke County PCR VRDO
(Georgia Power)
4.05%, 3/2/95 22,600 22,600
Georgia GO
6.80%, 8/1/98 6,155 6,539
7.00%, 7/1/95 3,000 3,117
7.00%, 11/1/95 4,725 4,810
7.70%, 4/1/95 4,000 4,011
7.70%, 4/1/99 5,000 5,511
Gwinnett County Water &
Sewer Auth. 8.75%, 8/1/96 (Prere.) 6,000 6,448
Metropolitan Atlanta Rapid
Transit Auth. 8.50%, 7/1/95 (Prere.) 3,000 3,102
-----------
STATE TOTAL 70,038
-----------
- --------------------------------------------------------------------------------
</TABLE>
8
<PAGE> 25
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
HAWAII (2.7%)
Hawaii GO
5.00%, 11/1/96 $ 12,870 $ 12,937
5.00%, 11/1/97 10,000 10,051
Honolulu City & County GO
3.60%, 10/1/95 14,000 13,860
9.00%, 3/1/96 3,000 3,128
-----------
STATE TOTAL 39,976
-----------
- --------------------------------------------------------------------------------
Illinois (5.2%)
Chicago GO
7.50%, 1/1/99 (Prere.) 5,000 5,518
Chicago Metropolitan
Sanitation Dist.
7.85%, 1/1/98 (Prere.) 5,600 6,137
Chicago Metropolitan Water
7.25%, 1/1/99 (Prere.) 3,490 3,761
Chicago Metropolitan Water
Capital Improvement
6.40%, 1/1/00 5,000 5,245
Chicago Public Building Comm.
4.50%, 12/1/98 (1) 8,000 7,781
7.75%, 1/1/99 (3)(Prere.) 5,000 5,561
Chicago School Finance Auth. GO
4.40%, 6/1/98 (1) 6,755 6,557
Illinois GO
5.50%, 8/1/98 7,700 7,795
Illinois Metropolitan Fair &
Exposition Auth.
10.375%, 6/1/95 (Prere.) 17,105 17,878
Illinois Sales Tax Rev.
9.375%, 6/15/95 (Prere.) 4,325 4,496
Illinois Toll Highway Auth. VRDO
3.85%, 3/8/95 (1) 5,600 5,600
-----------
STATE TOTAL 76,329
-----------
- --------------------------------------------------------------------------------
INDIANA (.5%)
Indiana State Univ. Student
Fee Bonds
9.40%, 8/1/95 (Prere.) 3,500 3,610
Indiana Toll Road Auth.
9.00%, 7/1/95 (Prere.) 4,000 4,143
-----------
STATE TOTAL 7,753
-----------
- --------------------------------------------------------------------------------
KENTUCKY (1.2%)
Ashland City PCR VRDO
(Ashland Oil)
3.75%, 3/2/95 (LOC) 5,700 5,700
Kentucky Property & Buildings
4.00%, 9/1/95 6,420 6,394
Kentucky Turnpike Auth.
9.20%, 7/1/95 (Prere.) 4,850 5,074
-----------
STATE TOTAL 17,168
-----------
- --------------------------------------------------------------------------------
LOUISIANA (1.0%)
Jefferson Parish Sales Tax Rev.
5.90%, 12/1/95 (3) 4,175 4,218
Louisiana Recovery Dist. Sales Tax
5.50%, 7/1/97 10,000 10,078
-----------
STATE TOTAL 14,296
-----------
- --------------------------------------------------------------------------------
MAINE (.7%)
Maine Municipal Bond Bank
3.875%, 11/1/96 10,000 9,793
- --------------------------------------------------------------------------------
MARYLAND (1.7%)
Maryland State Transportation Auth.
3.625%, 6/15/95 11,185 11,156
9.00%, 7/1/95 (Prere.) 13,450 13,932
-----------
STATE TOTAL 25,088
-----------
- --------------------------------------------------------------------------------
MASSACHUSETTS (4.9%)
Massachusetts Bay
Transportation Auth.
7.10%, 3/1/99 (3) (Prere.) 7,800 8,516
Massachusetts Consolidated Loan
7.00%, 6/1/99 (Prere.) 10,000 10,911
Massachusetts GO
4.05%, 9/1/95 12,000 11,946
5.70%, 8/1/96 8,000 8,105
7.25%, 7/1/98 (Prere.) 10,000 10,840
Massachusetts Health & Educational
Facilities Auth.
9.375%, 7/1/95 (Prere.) 8,900 9,317
Massachusetts Municipal
Wholesale Electric
6.00%, 7/1/97 2,355 2,394
Massachusetts Water Resources
Auth. BAN
4.125%, 10/15/95 10,000 9,970
-----------
STATE TOTAL 71,999
-----------
- --------------------------------------------------------------------------------
MICHIGAN (.9%)
Michigan Trunk Line
5.50%, 11/15/98 13,720 13,930
-----------
- --------------------------------------------------------------------------------
MINNESOTA (.4%)
Southern Minnesota Municipal
Power Agency
4.70%, 1/1/97 (2) 6,640 6,626
-----------
- --------------------------------------------------------------------------------
MISSISSIPPI (.2%)
Jackson County VRDO
(Chevron)
3.90%, 3/2/95 2,400 2,400
-----------
- --------------------------------------------------------------------------------
</TABLE>
9
<PAGE> 26
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
NEBRASKA (.1%)
Nebraska Public Power Dist.
Electric System Rev.
4.80%, 1/1/96 $ 2,000 $ 2,001
-----------
- --------------------------------------------------------------------------------
NEVADA (1.4%)
Clark County Airport
VRDO 3.95%, 3/8/95 (1) 12,460 12,460
13.25%, 7/1/97 (Prere.) 3,015 3,572
Clark County School Dist.
3.30%, 7/1/95 (2) 4,600 4,580
-----------
STATE TOTAL 20,612
-----------
- --------------------------------------------------------------------------------
NEW JERSEY (1.1%)
New Jersey Health Care
Facility Auth.
(Union Hosp./Mega Care Inc.)
5.125%, 7/1/95 1,805 1,805
New Jersey Transportation
Trust Fund 3.50%, 6/15/95 5,000 4,981
New Jersey Turnpike Auth.
VRDO 3.75%, 3/8/95 (3) (LOC) 1,900 1,900
4.80%, 1/1/96 7,000 7,009
-----------
STATE TOTAL 15,695
-----------
- --------------------------------------------------------------------------------
NEW YORK (5.5%)
Erie County Water Auth. VRDO
3.75%, 3/8/95 (2) 300 300
New York City GO
4.90%, 8/15/95 23,170 23,167
6.80%, 2/1/97 9,985 10,227
6.80%, 2/1/97 (Prere.) 2,990 3,107
New York City Water
Finance Auth. VRDO
3.90%, 3/2/95 (3) 300 300
New York State Dormitory Auth.
(City Univ.)
4.90%, 7/1/96 5,205 5,197
5.25%, 7/1/97 2,780 2,782
New York State GO
6.625%, 8/1/95 5,000 5,044
New York State Local Govt.
Assistance Corp. VRDO
3.85%, 3/8/95 (LOC) 1,700 1,700
New York State Medical
Care Facility
(Mt. Sinai Hosp.)
8.875%, 1/15/96 (Prere.) 7,000 7,418
(Mental Health Service)
7.90%, 8/15/96 8,145 8,460
New York State
Urban Development
6.75%, 1/1/96 3,135 3,184
Triborough Bridge &
Tunnel Auth.
5.50%, 1/1/97 5,000 5,069
7.875%, 1/1/98 (Prere.) 5,000 5,469
-----------
STATE TOTAL 81,424
-----------
- --------------------------------------------------------------------------------
NORTH CAROLINA (3.2%)
Charlotte Airport VRDO
3.95%, 3/8/95 (1) 1,500 1,500
North Carolina Eastern Municipal
Power Agency
7.25%, 1/1/99 (Prere.) 3,000 3,283
North Carolina Medical
Care VRDO
(Duke Univ. Hosp.)
4.106%, 3/2/95 6,200 6,200
North Carolina Municipal
Power Agency
7.875%, 1/1/98 (Prere.) 12,000 13,158
(Catawba Electric)
4.50%, 1/1/96 2,000 1,989
7.625%, 1/1/98 (2) (Prere.) 5,000 5,450
9.00%, 1/1/96 (Prere.) 5,845 6,179
Wake County PCR CP
(Carolina Power & Light)
4.10%, 3/6/95 (LOC) 8,900 8,900
-----------
STATE TOTAL 46,659
-----------
- --------------------------------------------------------------------------------
OHIO (3.2%)
Columbus Refunding
Limited Tax
3.90%, 7/1/97 4,850 4,730
Columbus Sewer Rev. VRDO
3.90%, 3/2/95 700 700
Ohio Public Facilities Comm.
4.10%, 12/1/95 9,830 9,773
5.30%, 12/1/95 6,000 6,031
5.30%, 12/1/96 5,000 5,041
Ohio Student Loan VRDO
4.00%, 3/8/95 (LOC) 9,200 9,200
Ohio Water Development Auth.
4.40%, 12/1/95 5,000 4,992
4.60%, 6/1/96 6,800 6,777
STATE TOTAL 47,244
- --------------------------------------------------------------------------------
OKLAHOMA (2.2%)
Grand River Dam Auth.
4.90%, 6/1/98 10,000 9,949
Oklahoma Hosp. Rev. CP
(Baptist Medical Center)
4.35%, 4/6/95 23,200 23,200
-----------
STATE TOTAL 33,149
-----------
- --------------------------------------------------------------------------------
</TABLE>
10
<PAGE> 27
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
OREGON (.1%)
Oregon Veterans Welfare
Program GO VRDO
4.05%, 3/8/95 $ 1,300 $ 1,300
-----------
- --------------------------------------------------------------------------------
PENNSYLVANIA (3.1%)
Northumberland County
Commonwealth Lease Rev.
5.75%, 10/15/95 (1) 3,480 3,510
Pennsylvania Higher Education
Facilities Auth. VRDO
(Carnegie Mellon Univ.)
3.75%, 3/8/95 1,100 1,100
Pennsylvania Turnpike Comm.
7.875%, 12/1/96 (Prere.) 7,640 8,192
Philadelphia GO
5.25%, 11/15/96 (3) 4,150 4,182
5.75%, 11/15/98 (3) 6,655 6,815
Philadelphia School Dist.
6.60%, 7/1/98 (1) 4,815 5,038
6.70%, 7/1/99 (1) 5,145 5,441
Philadelphia Water &
Wastewater Rev.
4.00%, 6/15/95 11,700 11,674
-----------
STATE TOTAL 45,952
-----------
- --------------------------------------------------------------------------------
RHODE ISLAND (.4%)
Rhode Island Student
Loan Auth. Rev. 5.40%, 12/1/95 6,000 6,025
-----------
- --------------------------------------------------------------------------------
SOUTH CAROLINA (2.2%)
Greenville Hosp. System Facility
Rev. VRDO
3.90%, 3/2/95 6,700 6,700
Piedmont Municipal
Power Agency 7.75%, 1/1/96 (Prere.) 3,700 3,855
8.00%, 1/1/96 (Prere.) 9,430 9,855
9.70%, 1/1/96 (Prere.) 4,500 4,831
South Carolina Public
Service Auth.
(Santee Cooper)
9.50%, 7/1/95 (Prere.) 6,500 6,807
-----------
STATE TOTAL 32,048
-----------
- --------------------------------------------------------------------------------
TENNESSEE (.8%)
Metropolitan Govt. of Nashville
& Davidson County
8.75%, 1/1/96 (Prere.) 5,000 5,275
10.50%, 12/1/97 (Prere.) 5,750 6,582
-----------
STATE TOTAL 11,857
-----------
- --------------------------------------------------------------------------------
TEXAS (13.6%)
Austin Combined Utility
System Rev.
5.00%, 11/15/95 (2) 3,840 3,856
7.60%, 11/15/99 (1) 5,000 5,506
10.25%, 11/15/95 (Prere.) 24,395 25,886
Austin Water, Sewer &
Electric Rev.
14.25%, 5/15/97 (Prere.) 7,090 8,488
Dallas-Fort Worth
Regional Airport
3.40%, 11/1/95 (1) 15,555 15,373
Dallas Waterworks & Sewer
6.50%, 4/1/95 5,000 5,008
El Paso Health Facilities VRDO
(Providence Memorial Hosp.)
3.75%, 3/2/95 (LOC) 3,000 3,000
Fort Worth Water & Sewer
5.60%, 2/15/98 3,500 3,563
Gulf Coast Waste Disposal Auth.
PCR VRDO (Amoco)
3.70%, 3/2/95 9,865 9,865
Harris County Health Facility
Development Corp. VRDO
(Methodist Hosp.) 3.75%, 3/2/95 13,900 13,900
Harris County Toll Road VRDO
4.00%, 3/8/95 28,400 28,400
Houston GO
7.50%, 3/1/95 3,185 3,185
Houston Water & Sewer System
8.10%, 12/1/96 (Prere.) 10,000 10,764
9.375%, 12/1/95 (3) (Prere.) 9,320 9,851
Sam Rayburn Municipal
Power Agency
9.25%, 9/1/95 (Prere.) 37,000 38,645
San Antonio GO
8.875%, 8/1/95 (Prere.) 2,500 2,549
Texas Municipal Power Agency
5.00%, 9/1/96 5,000 5,008
14.25%, 3/1/97 (Prere.) 5,250 6,188
-----------
STATE TOTAL 199,035
-----------
- --------------------------------------------------------------------------------
UTAH (3.8%)
Intermountain Power Agency
7.00%, 7/1/95 (Prere.) 5,000 5,046
7.75%, 7/1/96 (Prere.) 2,500 2,647
8.90%, 7/1/95 (Prere.) 4,000 4,142
9.00%, 7/1/95 6,000 6,086
9.20%, 7/1/95 (Prere.) 9,375 9,670
9.50%, 7/1/95 (Prere.) 5,000 5,187
9.625%, 7/1/95 (Prere.) 5,650 5,893
10.25%, 7/1/95 (Prere.) 6,225 6,473
</TABLE>
11
<PAGE> 28
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C>
Salt Lake County PCR VRDO
(British Petroleum)
3.90%, 3/2/95 $ 10,000 $ 10,000
-----------
STATE TOTAL 55,144
-----------
- --------------------------------------------------------------------------------
VIRGINIA (1.1%)
Fairfax County GO
7.30%, 10/1/95 (Prere.) 4,495 4,661
Southeast Public Service Auth.
10.50%, 7/1/95 (Prere.) 8,000 8,327
Virginia Public School Auth.
7.30%, 1/1/97 (Prere.) 3,345 3,557
-----------
STATE TOTAL 16,545
-----------
- --------------------------------------------------------------------------------
WASHINGTON (7.1%)
King County GO
6.70%, 1/1/99 9,000 9,493
Renton School Dist. GO
5.50%, 12/1/95 5,600 5,640
Seattle Metropolitan Municipality
7.875%, 1/1/96 (Prere.) 3,700 3,876
Seattle Municipal Sewer
9.75%, 7/1/95 (Prere.) 4,000 4,153
Snohomish County Public
Utility Dist.
9.75%, 1/1/99 (3) 5,315 6,127
Washington GO
3.35%, 10/1/95 2,000 1,981
7.00%, 10/1/96 6,405 6,626
7.60%, 9/1/96 (Prere.) 4,325 4,510
7.75%, 12/1/98 (Prere.) 2,500 2,743
8.00%, 9/1/96 (Prere.) 21,695 22,742
8.10%, 9/1/95 5,000 5,090
9.20%, 5/1/96 (Prere.) 2,300 2,422
9.30%, 5/1/96 (Prere.) 5,000 5,272
Washington Health Care Auth.
(Empire Health Spokane)
8.00%, 11/1/97 (1)(Prere.) 9,200 10,092
Washington Motor Vehicle Fuel
8.00%, 9/1/96 (Prere.) 12,750 13,365
-----------
STATE TOTAL 104,132
-----------
- --------------------------------------------------------------------------------
WEST VIRGINIA (.5%)
West Virginia School Building Auth.
6.00%, 7/1/98 7,000 7,199
-----------
- --------------------------------------------------------------------------------
WISCONSIN (.8%)
City of Milwaukee GO
5.00%, 6/1/96 7,710 7,738
Wisconsin GO
7.00%, 5/1/98 (Prere.) 3,185 3,411
-----------
STATE TOTAL 11,149
-----------
- --------------------------------------------------------------------------------
WYOMING (.2%)
Platte County PCR
3.60%, 1/1/96 3,000 2,954
-----------
- --------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(Cost $1,457,176) 1,452,800
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (1.0%)
- --------------------------------------------------------------------------------
Other Assets--Note B 26,118
Liabilities (11,746)
------------
14,372
- --------------------------------------------------------------------------------
NET ASSETS (100%)
- --------------------------------------------------------------------------------
Applicable to 94,945,550 outstanding
$.001 par value shares
(authorized 250,000,000 shares) $1,467,172
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE $15.45
================================================================================
</TABLE>
+See Note A to Financial Statements.
For explanations of abbreviations and other references, see page 44.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AT FEBRUARY 28, 1995,
NET ASSETS CONSISTED OF:
- --------------------------------------------------------------------------------
Amount Per
(000) Share
---------- -----------
<S> <C> <C>
Paid in Capital $1,471,767 $15.50
Undistributed Net
Investment Income -- --
Accumulated Net
Realized Losses (219) --
Unrealized Depreciation of
Investments--Note D (4,376) (.05)
- --------------------------------------------------------------------------------
NET ASSETS $1,467,172 $15.45
- --------------------------------------------------------------------------------
</TABLE>
12
<PAGE> 29
<TABLE>
<CAPTION>
Face Market
Amount Value
LIMITED-TERM PORTFOLIO (000) (000)+
- --------------------------------------------------------------------------------
MUNICIPAL BONDS (100.5%)
- --------------------------------------------------------------------------------
<S> <C> <C>
ALABAMA (1.2%)
Huntsville Health Care Auth.
VRDO 4.10%, 3/2/95 (1) $ 18,800 $ 18,800
-----------
- --------------------------------------------------------------------------------
ALASKA (2.1%)
Alaska Housing Finance
Corp. VRDO
3.85%, 3/8/95 7,000 7,000
North Slope Borough GO
0.00%, 6/30/95 (1) 5,000 4,928
0.00%, 6/30/97 (1) 1,000 888
7.25%, 6/30/00 (5) 20,000 21,656
-----------
STATE TOTAL 34,472
-----------
- --------------------------------------------------------------------------------
ARIZONA (1.5%)
Maricopa County GO
6.00%, 7/1/97 (2) 10,000 10,260
City of Mesa Utility System Rev.
6.10%, 7/1/96 (3) 4,000 4,072
Salt River Project Agricultural
Improvement & Power Dist.
CP 3.75%, 3/1/95 (LOC) 8,500 8,500
5.80%, 1/1/96 2,000 2,022
-----------
STATE TOTAL 24,854
-----------
- --------------------------------------------------------------------------------
CALIFORNIA (11.2%)
Alameda County Public
Facilities Corp. COP
6.15%, 9/1/96* (LOC) 10,000 10,060
California GO
7.50%, 11/1/03 (3) 6,000 6,832
8.90%, 3/1/97 3,000 3,213
10.00%, 4/1/98 19,600 22,235
10.50%, 10/1/00 3,000 3,743
Clovis Unified School Dist.
4.50%, 8/1/96 11,250 11,190
Contra Costa Transportation
Auth. Sales Tax Rev.
VRDO 3.90%, 3/8/95 (3) 6,800 6,800
6.00%, 3/1/96 4,165 4,225
6.00%, 3/1/97 2,580 2,636
Irvine Assessment Dist. VRDO
4.10%, 3/2/95 (LOC) 500 500
Irvine Ranch Water Dist. VRDO
4.20%, 3/2/95 5,900 5,900
Los Angeles COP
5.25%, 12/1/95 7,775 7,807
5.50%, 12/1/96 5,000 5,043
6.00%, 5/1/96 3,000 3,025
Los Angeles Dept. of Water &
Power Rev.
9.00%, 5/15/02 9,135 11,004
9.00%, 5/15/03 5,355 6,544
Orange County Apartment
Development Rev. CP
5.50%, 3/7/95 (LOC) 5,000 5,000
Orange County Sanitation
Dist. VRDO 4.15%, 3/2/95 (LOC) 1,100 1,100
4.75%, 3/2/95 (2) (LOC) 15,000 15,000
Sacramento County TRAN
4.50%, 9/29/95 28,000 28,012
San Bernardino County
Transportation Auth.
3.75%, 3/1/97 (1) 4,280 4,143
San Diego County TRAN
4.50%, 9/29/95 10,000 9,960
Santa Barbara County TRAN
4.25%, 7/31/95 10,000 9,957
-----------
STATE TOTAL 183,929
-----------
- --------------------------------------------------------------------------------
COLORADO (1.1%)
Colorado Health Facility Auth.
(Rocky Mountain Hosp.)
5.50%, 2/1/96 4,000 3,985
(Sisters of Charity Health
System Inc.)
5.75%, 5/15/96 2,400 2,429
Municipal Subdist. of
Northern Colorado
9.25%, 12/1/95 (Prere.) 6,025 6,304
Platte River Power Auth.
3.50%, 6/1/95 4,990 4,977
-----------
STATE TOTAL 17,695
-----------
- --------------------------------------------------------------------------------
CONNECTICUT (3.8%)
Connecticut Development
Auth. PCR VRDO
(Connecticut Light & Power)
3.95%, 3/8/95 (LOC) 15,300 15,300
Connecticut Special Assessment
Unemployment Compensation
4.00%, 5/15/96 10,175 10,015
4.00%, 11/15/96 20,295 19,967
Connecticut Special
Tax Obligation Rev.
4.00%, 10/1/99 11,000 10,329
4.80%, 9/1/97 6,350 6,348
-----------
STATE TOTAL 61,959
-----------
- --------------------------------------------------------------------------------
DISTRICT OF COLUMBIA (.5%)
District of Columbia GO
6.00%, 6/1/97 (1) 3,250 3,294
9.25%, 6/1/95 (Prere.) 4,000 4,130
-----------
STATE TOTAL 7,424
-----------
- --------------------------------------------------------------------------------
</TABLE>
13
<PAGE> 30
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
FLORIDA (7.3%)
Dade County Aviation Rev.
4.30%, 10/1/96 $ 2,500 $ 2,481
Dade County School Dist.
6.80%, 7/1/96 3,150 3,233
7.375%, 7/1/08 (Prere.) 19,600 21,743
Dade County Water & Sewer
System Rev. VRDO
3.95%, 3/8/95 (3) 19,150 19,150
Florida COP
5.75%, 5/15/95 990 993
Florida Dept. of General Services
6.10%, 7/1/97 (2) 6,900 7,122
Florida Municipal Power Agency
(St. Lucie Project)
3.90%, 10/1/95 (3) 1,595 1,589
4.20%, 10/1/96 (3) 2,055 2,035
4.40%, 10/1/97 (3) 2,230 2,199
Florida Turnpike Auth. Rev.
9.50%, 7/1/99 (2) 4,000 4,679
Hillsborough County Aviation Auth.
(Tampa Airport)
3.90%, 10/1/96 (3) 7,155 7,042
City of Homestead Special
Insurance Assessment Rev.
4.20%, 9/1/96 (1) 6,190 6,138
4.40%, 3/1/97 (1) 7,200 7,129
Jacksonville Electric Auth. Rev.
7.50%, 10/1/95 (Prere.) 15,500 16,017
Orlando Utility Comm. Water &
Electric Rev.
BAN VRDO 3.875%, 3/2/95 100 100
4.00%, 10/1/95 4,750 4,736
Palm Beach Solid Waste Auth. Rev.
8.00%, 7/1/98 4,000 4,372
Port Everglade Port Facilities Rev.
7.00%, 9/1/97 (4) 2,600 2,731
Sarasota County Hosp. Dist. CP
(Sarasota Memorial Hosp.)
4.10%, 4/3/95 (LOC) 3,875 3,875
City of Sunrise Public Service
8.00%, 10/1/97 (2) 2,940 3,176
-----------
STATE TOTAL 120,540
-----------
- --------------------------------------------------------------------------------
GEORGIA (.2%)
Monroe County Development Auth.
(Oglethorpe Power)
5.10%, 1/1/97 3,880 3,882
-----------
- --------------------------------------------------------------------------------
HAWAII (3.3%)
Hawaii Airport System Rev.
4.50%, 7/1/95 (1) 1,690 1,690
4.85%, 7/1/96 (1) 1,765 1,768
5.10%, 7/1/97 (1) 1,855 1,867
7.50%, 7/1/97 3,890 4,115
Hawaii GO
3.85%, 2/1/96 16,500 16,362
4.50%, 1/1/98 5,000 4,919
4.60%, 1/1/97 5,500 5,470
5.00%, 11/1/97 11,130 11,187
Honolulu City & County GO
4.60%, 10/1/99 6,500 6,329
-----------
STATE TOTAL 53,707
-----------
- --------------------------------------------------------------------------------
ILLINOIS (4.8%)
Chicago Park Dist. GO
9.70%, 1/1/96 3,000 3,118
Chicago School Finance Auth. GO
4.50%, 6/1/99 (3) 10,000 9,690
Chicago Waste Water Transmission
3.85%, 1/1/96 (3) 5,000 4,957
Chicago Water Capital Improvement
4.70%, 12/1/99 7,710 7,498
4.90%, 12/1/01 9,290 9,013
Chicago Water Rev.
4.70%, 11/1/97 (2) 3,250 3,222
Cook County GO
4.75%, 11/15/97 (3) 5,000 4,965
Dupage County Rev.
(Storm Water Project)
6.55%, 1/1/02 (Prere.) 15,115 16,470
Illinois Sales Tax Rev.
6.90%, 6/15/97 2,000 2,080
7.20%, 6/1/99 (Prere.) 7,600 8,362
Metropolitan Water Recovery Dist.
of Chicago
6.80%, 1/1/97 3,400 3,525
7.25%, 1/1/96 5,200 5,321
-----------
STATE TOTAL 78,221
-----------
- --------------------------------------------------------------------------------
INDIANA (1.2%)
Indiana Toll Finance Auth.
9.00%, 7/1/95 (Prere.) 8,210 8,503
City of Rockport PCR
(Indiana & Michigan Electric Co.)
6.75%, 8/1/95* 11,500 11,593
-----------
STATE TOTAL 20,096
-----------
- --------------------------------------------------------------------------------
KANSAS (.2%)
Kansas City Utility System
5.80%, 3/1/96 (2) 3,155 3,189
-----------
- --------------------------------------------------------------------------------
KENTUCKY (.8%)
Kentucky Development Finance
Auth. Hosp. Rev.
6.10%, 11/1/96 (3) 3,105 3,174
</TABLE>
14
<PAGE> 31
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Kentucky Turnpike Auth.
4.30%, 7/1/97 (2) $ 3,150 $ 3,100
9.20%, 7/1/95 (Prere.) 7,050 7,376
-----------
STATE TOTAL 13,650
-----------
- --------------------------------------------------------------------------------
LOUISIANA (.7%)
Louisiana GO
9.30%, 5/1/95 (Prere.) 3,000 3,086
Louisiana Recovery Dist. Sales Tax
5.50%, 7/1/97 6,000 6,047
7.625%, 7/1/96 2,250 2,317
-----------
STATE TOTAL 11,450
-----------
- --------------------------------------------------------------------------------
MAINE (.9%)
Maine Health & Higher Education
(Sebasticook Hosp.)
10.10%, 7/1/01 (Prere.) 4,500 5,743
Maine Municipal Bond Bank
4.125%, 11/1/97 10,000 9,712
-----------
STATE TOTAL 15,455
-----------
- --------------------------------------------------------------------------------
MARYLAND (.5%)
Maryland Dept. of Transportation
6.70%, 8/15/99 (Prere.) 5,000 5,406
Maryland Suburban Sanitation Dist.
5.00%, 6/1/98 3,000 3,011
-----------
STATE TOTAL 8,417
-----------
- --------------------------------------------------------------------------------
MASSACHUSETTS (5.1%)
Massachusetts GO
4.40%, 9/1/96 7,300 7,251
5.10%, 9/1/99 7,000 7,003
5.80%, 8/1/97 7,000 7,150
6.00%, 8/1/98 3,000 3,093
7.00%, 7/1/98 (LOC) 10,000 10,573
7.25%, 7/1/98 (Prere.) 14,500 15,718
Massachusetts Water
Resources Auth.
BAN 4.125%, 10/15/95 14,000 13,958
BAN 4.30%, 10/15/96 7,000 6,940
5.80%, 7/15/97 7,145 7,279
7.30%, 4/1/00 (Prere.) 5,000 5,565
-----------
STATE TOTAL 84,530
-----------
- --------------------------------------------------------------------------------
MICHIGAN (.8%)
Detroit GO
5.60%, 5/1/00 (2) 7,040 7,124
5.70%, 5/1/01 (2) 5,000 5,083
Michigan State Housing
Development Auth. VRDO
4.10%, 3/8/95 (LOC) 605 605
-----------
STATE TOTAL 12,812
-----------
- --------------------------------------------------------------------------------
MINNESOTA (.2%)
Minnesota GO
4.50%, 8/1/96 2,500 2,495
-----------
- --------------------------------------------------------------------------------
MISSISSIPPI (.5%)
Jackson County PCR VRDO
(Chevron)
3.90%, 3/2/95 7,500 7,500
-----------
- --------------------------------------------------------------------------------
MISSOURI (1.2%)
Kansas City School Dist.
10.50%, 2/1/99 (3) 7,545 8,939
Missouri Higher Education
Loan Auth.
5.15%, 2/15/98 11,365 11,288
-----------
STATE TOTAL 20,227
-----------
- --------------------------------------------------------------------------------
NEBRASKA (.4%)
Nebraska Public Power Dist.
4.30%, 1/1/96 5,000 4,977
Omaha Public Power Dist.
4.35%, 2/1/98 2,400 2,342
-----------
STATE TOTAL 7,319
-----------
- --------------------------------------------------------------------------------
NEVADA (1.2%)
Clark County School Dist. GO
9.75%, 6/1/01 (1) 10,000 12,319
Nevada GO
9.70%, 5/1/97 6,275 6,878
-----------
STATE TOTAL 19,197
-----------
- --------------------------------------------------------------------------------
NEW JERSEY (4.5%)
Camden County GO
4.65%, 6/1/97 (1) 3,565 3,545
New Jersey Health Care
Facility Auth.
(Union Hosp./Mega Care)
5.40%, 7/1/96 2,170 2,171
5.75%, 7/1/97 2,670 2,680
New Jersey Transportation
Trust Fund
3.80%, 6/15/96 17,695 17,365
4.10%, 6/15/97 15,000 14,681
4.40%, 6/15/99 10,000 9,628
New Jersey Turnpike Auth.
5.20%, 1/1/98 15,000 15,062
6.00%, 1/1/98 8,000 8,196
-----------
STATE TOTAL 73,328
-----------
- --------------------------------------------------------------------------------
New Mexico (.4%)
Hurley PCR VRDO
3.90%, 3/2/95 7,000 7,000
----------
- --------------------------------------------------------------------------------
</TABLE>
15
<PAGE> 32
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
NEW YORK (10.4%)
Battery Park Auth.
7.70%, 5/1/99 (Prere.) $ 5,000 $ 5,584
Erie County GO
10.00%, 2/1/96 (3) 4,530 4,746
10.00%, 2/1/97 (3) 4,325 4,719
Municipal Assistance Corp. for
New York City
6.80%, 7/1/96 6,000 6,167
9.00%, 7/1/95 (Prere.) 6,000 6,217
New York City GO
5.50%, 8/1/98 15,000 14,944
5.60%, 8/15/97 19,170 19,261
New York City Industrial
Development Agency (Vista)
7.75%, 11/15/00 3,125 3,496
7.75%, 11/15/01 4,380 4,966
7.75%, 11/15/02 3,100 3,556
New York City RAN
4.75%, 6/30/95 21,700 21,725
New York City Water Finance
Auth. Water & Sewer System
3.90%, 3/2/95 (3) 100 100
New York Medical Care Facilities
(Mental Health Service)
5.00%, 2/15/01 2,445 2,318
5.00%, 8/15/01 6,760 6,385
New York State COP
4.50%, 2/1/98 4,985 4,795
4.70%, 2/1/99 4,580 4,360
New York State Dormitory Auth.
(City Univ.)
5.50%, 7/1/98 6,300 6,313
9.00%, 7/1/00 (3) 15,515 18,285
New York State Housing
Finance Agency
8.875%, 11/1/95 (Prere.) 12,500 13,127
New York State Local Govt.
Assistance Corp.
4.10%, 4/1/95 2,400 2,399
4.50%, 4/1/96 2,000 1,994
7.00%, 4/1/01 (Prere.) 6,875 7,652
New York State Power Auth.
7.10%, 1/1/99 6,400 6,857
-----------
STATE TOTAL 169,966
-----------
- --------------------------------------------------------------------------------
NORTH CAROLINA (.6%)
North Carolina Municipal Power
Agency (Catawba Electric)
5.10%, 1/1/98 3,980 3,947
Wake County Pollution Control
Finance CP
(Carolina Power & Light)
3.85%, 3/1/95 (LOC) 5,345 5,345
---------
STATE TOTAL 9,292
---------
- --------------------------------------------------------------------------------
OHIO (2.5%)
Columbus Library Rev.
4.60%, 10/1/96 2,500 2,497
Columbus Sewer Improvement
9.00%, 9/15/96 5,065 5,387
Ohio Building Auth.
7.00%, 9/1/00 4,000 4,193
Ohio Higher Education Facilities
5.875%, 12/1/96 6,650 6,770
Ohio Public Facilities Comm.
4.40%, 12/1/96 7,000 6,920
6.50%, 12/1/97 2,950 3,059
Ohio Water Development Auth.
4.60%, 12/1/96 5,000 4,977
4.90%, 6/1/97 4,085 4,082
4.90%, 12/1/97 3,455 3,452
-----------
STATE TOTAL 41,337
-----------
- --------------------------------------------------------------------------------
OKLAHOMA (1.4%)
Grand River Dam Auth.
4.90%, 6/1/98 17,500 17,410
6.30%, 6/1/97 3,450 3,550
Oklahoma City GO
10.00%, 8/1/96 2,465 2,637
-----------
STATE TOTAL 23,597
-----------
- --------------------------------------------------------------------------------
PENNSYLVANIA (8.2%)
Erie County Prison Auth.
5.65%, 11/1/95 (1) 3,125 3,156
Northumberland County Auth.
Commonwealth Lease Rev.
6.00%, 10/15/96 (1) 4,960 5,062
Pennsylvania Convention
Center Auth. 5.75%, 9/1/99 20,000 19,743
Pennsylvania GO
5.00%, 7/1/97 3,930 3,943
5.40%, 7/1/00 4,000 4,029
6.00%, 9/15/96 4,550 4,635
6.00%, 11/1/96 (1) 5,000 5,109
6.00%, 9/15/97 5,885 6,044
8.30%, 4/15/97 3,800 3,966
Pennsylvania Housing
Finance Agency
6.60%, 7/1/96 2,220 2,250
</TABLE>
16
<PAGE> 33
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Pennsylvania Intergovernmental
Cooperation Auth.
5.20%, 6/15/96 (3) $ 5,650 $ 5,680
5.40%, 6/15/97 (3) 4,000 4,043
Philadelphia GO
6.00%, 11/15/99 (3) 18,505 19,060
6.00%, 11/15/00 (3) 13,000 13,371
Philadelphia Municipal Lease
5.25%, 7/15/98 6,135 6,053
Philadelphia School Dist. GO
4.70%, 7/1/99 (1) 14,000 13,677
Philadelphia Water &
Wastewater Rev.
4.25%, 6/15/96 15,000 14,824
-----------
STATE TOTAL 134,645
-----------
- --------------------------------------------------------------------------------
PUERTO RICO
Puerto Rico Govt. Development
Bank VRDO
3.90%, 3/8/95 (LOC) 700 700
-----------
- --------------------------------------------------------------------------------
RHODE ISLAND (.9%)
Rhode Island GO
6.00%, 5/15/97 4,215 4,316
Rhode Island Student Loan
Auth. Rev.
5.40%, 12/1/95 10,000 10,041
-----------
STATE TOTAL 14,357
-----------
- --------------------------------------------------------------------------------
SOUTH CAROLINA (.7%)
Piedmont Municipal Power Agency
4.90%, 1/1/97 3,350 3,341
South Carolina Public Service Auth.
(Santee Cooper)
9.20%, 7/1/95 (Prere.) 7,180 7,512
-----------
STATE TOTAL 10,853
-----------
- --------------------------------------------------------------------------------
TEXAS (11.8%)
Anderson County
(Coffield Prison Farm Project)
8.00%, 3/15/97 (2) 4,135 4,376
Austin Combined Utility System
4.00%, 11/15/96 7,820 7,677
6.80%, 11/15/95 1,380 1,398
6.80%, 11/15/95 (Prere.) 1,620 1,641
9.75%, 5/15/97 (1) 2,835 3,115
9.75%, 5/15/97 (Prere.) 1,165 1,280
10.00%, 5/15/00 (Prere.) 5,000 6,098
11.00%, 11/15/96 3,830 4,220
11.125%, 11/15/99 (Prere.) 4,000 5,000
Corpus Christi Utility System Rev.
6.20%, 7/15/96 (3) 2,965 3,025
6.30%, 7/15/97 (3) 2,460 2,541
Dallas-Fort Worth Regional Airport
3.75%, 11/1/96 (1) 4,000 3,904
4.00%, 11/1/97 (1) 9,000 8,694
Dallas Waterworks & Sewer System
5.90%, 10/1/97 7,265 7,461
6.75%, 4/1/96 11,250 11,518
6.90%, 4/1/97 2,000 2,082
Fort Worth Water & Sewer
5.20%, 2/15/96 3,000 3,018
Harris County Flood
Control Dist. GO 5.50%, 10/1/00 3,000 3,057
5.60%, 10/1/97 10,000 10,197
Harris County Health Facility
Development Corp. VRDO
(Methodist Hosp.)
3.75%, 3/2/95 5,500 5,500
Harris County Road Refunding GO
5.50%, 10/1/00 2,645 2,684
8.60%, 10/1/95 2,000 2,048
Harris County Toll Road
Comm. VRDO
4.00%, 3/8/95 7,000 7,000
Houston GO
3.40%, 3/1/95 5,000 5,000
3.90%, 3/1/96 2,415 2,395
Houston Public Improvement
5.25%, 3/1/98 5,000 5,044
Houston Water and Sewer System
4.65%, 12/1/96 11,315 11,241
4.90%, 12/1/97 5,000 4,988
5.70%, 12/1/97 (2) 7,000 7,160
North Central Health Facilities
Development Corp. CP
(Methodist Hosp. Dallas)
4.10%, 4/3/95 (1) 5,000 5,000
San Antonio Electric & Gas Rev.
6.75%, 2/1/97 2,000 2,070
San Antonio GO
8.875%, 8/1/95 (Prere.) 4,000 4,078
Texas A&M Univ. Rev.
6.90%, 8/15/97 5,425 5,684
Texas GO
4.625%, 10/1/97 2,700 2,685
6.75%, 8/1/95 (ETM) 7,895 7,979
Texas Municipal Power Agency
5.00%, 9/1/96 8,585 8,600
6.40%, 9/1/98 (3) 3,000 3,130
Texas Public Finance Auth.
6.20%, 2/1/96 (1) 6,000 6,087
9.00%, 10/1/95 4,675 4,798
-----------
STATE TOTAL 193,473
-----------
- --------------------------------------------------------------------------------
</TABLE>
17
<PAGE> 34
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
UTAH (1.6%)
INTERMOUNTAIN POWER AGENCY
3.90%, 7/1/96 $ 7,000 $ 6,855
4.60%, 7/1/95 5,000 5,002
8.75%, 7/1/95 (Prere.) 3,885 4,021
8.875%, 7/1/95 (Prere.) 10,000 10,304
-----------
STATE TOTAL 26,182
-----------
- --------------------------------------------------------------------------------
VIRGINIA (1.4%)
Peninsula Port Auth. VRDO
(Shell Oil) 3.75%, 3/2/95 1,900 1,900
Southeast Public Service Auth.
10.50%, 7/1/95 (Prere.) 12,890 13,416
Virginia Public School Auth.
4.00%, 1/1/97 2,500 2,455
4.25%, 1/1/98 5,250 5,126
-----------
STATE TOTAL 22,897
-----------
- --------------------------------------------------------------------------------
WASHINGTON (2.0%)
Renton School Dist. GO
5.50%, 12/1/96 6,000 6,068
Washington GO
3.80%, 10/1/96 6,000 5,889
4.50%, 9/1/95 8,000 8,003
5.30%, 9/1/99 5,000 5,048
7.00%, 10/1/99 7,555 8,132
-----------
STATE TOTAL 33,140
-----------
- --------------------------------------------------------------------------------
WEST VIRGINIA (.1%)
Cabell Board of Education
8.00%, 5/1/97 (1) 2,120 2,247
-----------
- --------------------------------------------------------------------------------
WISCONSIN (2.9%)
Wisconsin GO
4.125%, 11/1/98 33,625 32,352
6.60%, 5/1/98 (Prere.) 4,725 5,000
7.00%, 8/1/95 10,130 10,232
-----------
STATE TOTAL 47,584
-----------
- --------------------------------------------------------------------------------
WYOMING (.4%)
Platte County PCR
4.20%, 1/1/99 3,370 3,194
4.40%, 1/1/00 3,945 3,716
-----------
STATE TOTAL 6,910
-----------
- --------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(Cost $1,653,928) 1,649,328
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Market
Value
(000)+
- --------------------------------------------------------------------------------
<S> <C>
OTHER ASSETS AND LIABILITIES (-.5%)
- --------------------------------------------------------------------------------
Other Assets--Note B $ 25,664
Liabilities (33,475)
-----------
(7,811)
-----------
- --------------------------------------------------------------------------------
NET ASSETS (100%)
- --------------------------------------------------------------------------------
Applicable to 155,966,391 outstanding
$.001 par value shares
(authorized 250,000,000 shares) $1,641,517
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE $10.52
================================================================================
</TABLE>
+See Note A to Financial Statements.
For explanations of abbreviations and other references, see page 44.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AT FEBRUARY 28, 1995, NET ASSETS CONSISTED OF:
- --------------------------------------------------------------------------------
Amount Per
(000) Share
---------- ----------
<S> <C> <C>
Paid in Capital $1,652,798 $10.60
Undistributed Net
Investment Income -- --
Accumulated Net
Realized Losses (6,813) (.05)
Unrealized Depreciation of
Investments--Note D (4,468) (.03)
- --------------------------------------------------------------------------------
NET ASSETS $1,641,517 $10.52
- --------------------------------------------------------------------------------
</TABLE>
18
<PAGE> 35
<TABLE>
<CAPTION>
Face Market
Amount Value
INTERMEDIATE-TERM PORTFOLIO (000) (000)+
- --------------------------------------------------------------------------------
MUNICIPAL BONDS (98.6%)
- --------------------------------------------------------------------------------
<S> <C> <C>
ALABAMA (.1%)
Univ. of Southern Alabama Hosp.
7.00%, 5/15/04 (2) $ 3,250 $ 3,529
-----------
- --------------------------------------------------------------------------------
ALASKA (1.0%)
Anchorage Electric Rev.
8.00%, 12/1/11 (1) 5,395 6,623
Alaska Housing Finance
Corp. VRDO
3.85%, 3/8/95 41,100 41,100
North Slope Borough GO
0.00%, 6/30/96 (1) 4,500 4,220
-----------
STATE TOTAL 51,943
-----------
- --------------------------------------------------------------------------------
ARIZONA (1.6%)
Arizona Transportation Board
8.75%, 7/1/03 10,000 12,270
Maricopa County
(Samaritan Health Service)
7.15%, 12/1/04 (1) 9,900 11,386
7.15%, 12/1/05 (1) 6,080 6,966
Maricopa County COP
6.00%, 6/1/04 5,275 5,349
Maricopa County PCR VRDO
(Arizona Public Service)
3.75%, 3/2/95 (LOC) 3,000 3,000
Phoenix Highway Rev.
9.25%, 7/1/07 4,000 5,326
Salt River Project Agricultural
Improvement & Power Dist.
6.00%, 1/1/07 3,515 3,629
Tucson Unified School Dist.
7.50%, 7/1/06 (3) 8,840 10,498
7.50%, 7/1/07 (3) 9,125 10,852
7.50%, 7/1/08 (3) 8,060 9,586
-----------
STATE TOTAL 78,862
-----------
- --------------------------------------------------------------------------------
CALIFORNIA (10.7%)
California GO
5.70%, 8/1/07 17,500 17,361
5.75%, 8/1/08 (3) 15,000 15,024
California Health Facilities Auth.
VRDO 3.90%, 3/8/95 3,200 3,200
California Higher Education Loan
Auth. VRDO 4.10%, 3/8/95 (LOC) 2,200 2,200
California Public Works Board
(State Prison)
5.25%, 12/1/04 (1) 25,000 24,716
7.00%, 9/1/00 (Prere.) 7,400 8,199
(Univ. of California)
6.10%, 12/1/05 (2) 6,515 6,831
6.20%, 12/1/06 (2) 3,320 3,511
California RAN
5.00%, 6/28/95 36,690 36,765
Clovis Unified School Dist. GO
0.00%, 8/1/00 7,000 5,201
0.00%, 8/1/01 11,180 7,826
Corona COP
10.00%, 11/1/02 (Prere.) 6,000 7,906
Irvine Ranch Water Dist. VRDO
4.10%, 3/2/95 (LOC) 23,200 23,200
4.20%, 3/2/95 6,000 6,000
4.20%, 3/2/95 (LOC) 5,500 5,500
Long Beach Financing Auth. Rev.
6.00%, 11/1/07 (2) 3,070 3,180
Long Beach Harbor Rev.
7.10%, 5/15/99 2,900 3,110
7.15%, 5/15/00 10,000 10,837
7.20%, 5/15/01 2,000 2,195
Los Angeles COP
7.50%, 6/1/98 (Prere.) 3,950 4,328
7.60%, 6/1/98 (Prere.) 3,995 4,389
Los Angeles County Metropolitan
Sanitation Dist. Finance Auth.
5.00%, 10/1/02 3,460 3,385
5.10%, 10/1/04 8,100 7,884
Los Angeles County Transportation
Auth. Sales Tax
6.50%, 7/1/10 51,070 53,655
8.00%, 7/1/01 (2) 6,365 7,272
8.00%, 7/1/02 (2) 3,915 4,535
Los Angeles County TRAN
4.50%, 6/30/95 5,000 5,002
Metropolitan Water Dist. of
Southern California
7.75%, 7/1/01 (Prere.) 18,085 20,916
Northern California Power Agency
(Geothermal Project)
6.75%, 7/1/01 19,530 20,251
(Hydroelectric Project)
6.10%, 7/1/05 (1) 5,575 5,858
6.20%, 7/1/06 (1) 5,940 6,277
6.25%, 7/1/07 (1) 6,685 7,062
Oakland Redevelopment Agency
(Central Dist. Project)
5.75%, 2/1/04 (2) 1,535 1,573
5.90%, 2/1/05 (2) 4,870 5,036
6.00%, 2/1/07 (2) 3,360 3,481
Orange County Apartment
Development Rev. CP
5.75%, 3/7/95 (LOC) 9,300 9,300
5.75%, 3/10/95 (LOC) 10,000 10,000
</TABLE>
19
<PAGE> 36
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Orange County Sanitation
Dist. VRDO
4.15%, 3/2/95 (LOC) $ 5,000 $ 5,000
4.15%, 3/2/95 (3) 20,800 20,800
Orange County VRDO
(Irvine Coast Assessment)
4.20%, 3/2/95 (LOC) 17,423 17,423
Poway Redevelopment Agency
(Paguay Project)
7.125%, 12/15/04 (3) 4,840 5,478
Sacramento County TRAN
4.50%, 9/29/95 30,000 30,013
Sacramento Municipal Utility Dist.
Electric Rev.
6.60%, 2/1/97 4,000 4,105
San Bernardino COP
6.75%, 8/1/10 (Prere.) 11,385 12,551
San Diego County Regional
Transportation Auth. Sales Tax
7.00%, 4/1/01 (Prere.) 3,220 3,584
7.00%, 4/1/06 1,780 1,939
San Diego County TRAN
4.50%, 9/29/95 10,500 10,458
San Diego County Water Rev. COP
5.40%, 5/1/03 5,000 5,016
5.50%, 5/1/04 5,000 5,035
5.50%, 5/1/05 4,245 4,258
Santa Clara County Finance Auth.
VRDO 3.95%, 3/8/95 10,500 10,500
Santa Clara VRDO
(El Camino Hosp.-Valley Medical)
3.85%, 3/7/95 (LOC) 2,600 2,600
Southern California Public
Power Auth.
6.75%, 7/1/99 6,190 6,538
Southern California Rapid
Transit Dist. Rev.
5.70%, 9/1/04 (2) 14,040 14,350
Univ. of California Rev.
10.00%, 9/1/03 (2) 3,790 4,949
-----------
STATE TOTAL 537,563
-----------
- --------------------------------------------------------------------------------
COLORADO (.6%)
Colorado Health Auth.
(Sisters of Charity Health System)
8.50%, 5/15/04 (1) 17,500 21,654
Denver City & County School Dist.
6.95%, 12/15/00 (3) 9,250 9,980
-----------
STATE TOTAL 31,634
-----------
- --------------------------------------------------------------------------------
CONNECTICUT (3.0%)
Connecticut Development
Auth. PCR VRDO
3.95%, 3/8/95 (LOC) 19,300 19,300
Connecticut Economic Recovery
Notes VRDO
4.10%, 3/8/95 13,600 13,600
Connecticut GO
5.30%, 11/15/06 10,875 10,725
5.40%, 11/15/07 24,010 23,682
Connecticut Resource
Recovery Auth.
(Bridgeport Resco)
8.40%, 1/1/99 4,950 5,174
Connecticut Special Tax
Obligation Rev.
5.125%, 9/1/05 11,575 11,304
5.25%, 9/1/06 42,550 41,580
7.125%, 6/1/10 12,000 13,607
7.75%, 6/1/00 11,300 12,593
-----------
STATE TOTAL 151,565
-----------
- --------------------------------------------------------------------------------
DELAWARE (.4%)
Delaware Transportation
Auth. Rev.
5.625%, 7/1/06 (1) 11,420 11,481
5.80%, 7/1/08 7,545 7,544
-----------
STATE TOTAL 19,025
-----------
- --------------------------------------------------------------------------------
DISTRICT OF COLUMBIA (1.3%)
District of Columbia GO
VRDO 4.40%, 3/2/95 3,700 3,700
6.30%, 6/1/08 (1) 15,000 15,176
7.50%, 6/1/99 (2) (Prere.) 17,875 19,843
7.75%, 6/1/97 (6) (Prere.) 5,000 5,384
8.00%, 6/1/05 (Prere.) 18,420 19,504
-----------
STATE TOTAL 63,607
-----------
- --------------------------------------------------------------------------------
FLORIDA (2.4%)
Broward County School Dist. GO
5.30%, 2/15/04 3,295 3,304
5.40%, 2/15/05 9,000 9,055
5.50%, 2/15/06 10,080 10,149
Dade County Solid Waste System
7.00%, 10/1/01 6,240 6,484
Dade County Water & Sewer
Rev. VRDO
3.95%, 3/8/95 (3) 19,390 19,390
Florida Dept. of General Services
6.25%, 7/1/06 5,600 5,939
Florida Municipal Loan Council
4.25%, 5/9/95 (LOC) 6,000 6,000
</TABLE>
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<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Florida School Board Assn.
6.90%, 7/1/99 (2) $ 12,450 $ 13,372
7.00%, 7/1/00 (2) 13,820 15,040
Gulf Breeze Local Govt.
Loan Program VRDO
4.00%, 3/2/95 (3) 2,210 2,210
Hillsborough County
School Dist. GO
7.10%, 8/15/03 23,665 26,436
Port Everglades Port Facilities Rev.
6.90%, 9/1/98 (3) 2,000 2,129
-----------
STATE TOTAL 119,508
-----------
- --------------------------------------------------------------------------------
GEORGIA (4.3%)
Burke County PCR
(Georgia Power Co.)
VRDO 4.05%, 3/2/95 3,600 3,600
(Oglethorpe Power Corp.)
4.35%, 1/1/01 6,080 5,651
4.50%, 1/1/02 7,375 6,831
4.60%, 1/1/03 9,955 9,163
4.70%, 1/1/04 13,160 12,049
Fulton County School Dist.
6.375%, 5/1/10 15,000 15,892
Georgia GO
6.30%, 3/1/07 15,000 16,113
6.50%, 8/1/01 3,230 3,471
6.80%, 8/1/02 8,000 8,795
7.00%, 11/1/05 15,670 17,915
7.00%, 11/1/06 16,780 19,120
7.00%, 11/1/07 17,960 20,571
7.40%, 8/1/96 7,930 8,236
7.40%, 8/1/07 11,200 13,108
7.50%, 4/1/01 5,500 6,190
Monroe County Development Auth.
(Oglethorpe Power Corp.)
6.65%, 1/1/08 9,220 9,742
Municipal Electric Power Auth.
of Georgia
CP 3.80%, 3/1/95 6,330 6,330
CP 4.30%, 4/11/95 5,000 5,000
6.30%, 1/1/05 12,775 13,463
8.00%, 1/1/02 9,505 10,453
8.10%, 1/1/03 2,320 2,557
-----------
STATE TOTAL 214,250
-----------
- --------------------------------------------------------------------------------
HAWAII (3.5%)
Hawaii Airport System Rev.
5.85%, 7/1/02 (1) 7,830 8,074
5.95%, 7/1/03 (1) 2,590 2,690
6.05%, 7/1/04 (1) 3,145 3,289
6.15%, 7/1/05 (1) 10,735 11,305
Hawaii GO
5.00%, 11/1/98 21,000 21,054
5.00%, 11/1/99 20,000 19,957
5.00%, 2/1/04 10,000 9,712
5.00%, 2/1/05 11,650 11,234
5.125%, 2/1/06 11,605 11,204
5.50%, 7/1/01 6,500 6,583
6.30%, 3/1/06 5,555 5,909
6.40%, 3/1/07 5,555 5,955
Honolulu City & County GO
5.75%, 1/1/06 8,825 9,039
6.00%, 1/1/08 5,000 5,172
6.30%, 3/1/10 4,830 5,001
8.00%, 10/1/09 30,560 37,561
-----------
STATE TOTAL 173,739
-----------
- --------------------------------------------------------------------------------
ILLINOIS (5.6%)
Chicago Metropolitan
Sanitation Dist.
8.75%, 1/1/00 (Prere.) 2,980 3,438
Chicago Public Building
Comm. Rev.
7.50%, 1/1/02 (1) 2,500 2,755
7.60%, 1/1/03 (1) 2,500 2,745
7.70%, 1/1/08 (1)(ETM) 4,000 4,391
9.00%, 1/1/96 1,150 1,188
Chicago School Finance Auth.
4.40%, 6/1/98 (1) 10,000 9,707
4.90%, 6/1/02 (3) 10,000 9,598
5.00%, 6/1/03 (3) 25,190 24,215
5.10%, 6/1/04 (3) 26,155 25,127
6.00%, 6/1/01 (3) 8,305 8,570
6.10%, 6/1/02 (3) 11,945 12,411
Chicago Metropolitan Water
Reclamation Dist.
5.50%, 12/1/08 5,300 5,111
5.90%, 12/1/06 4,450 4,537
5.95%, 12/1/07 7,200 7,328
6.00%, 12/1/08 9,900 10,057
6.05%, 12/1/09 3,000 3,041
Chicago Water Rev.
5.50%, 11/1/03 (2) 5,000 5,003
Cook County GO
4.375%, 11/15/99 (1) 6,565 6,272
4.60%, 11/15/00 (1) 5,360 5,121
5.75%, 11/15/03 (3) 5,000 5,102
5.80%, 11/15/04 10,000 10,192
6.60%, 11/1/03 (2) 4,785 5,175
6.75%, 11/1/01 (2)(Prere.) 3,000 3,300
Illinois Educational Facilities
Auth. VRDO (DePaul Univ.)
4.20%, 3/8/95 (LOC) 900 900
</TABLE>
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<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Illinois GO
6.25%, 10/1/05 $ 6,000 $ 6,309
Illinois Health Facility Auth.
(Lutheran General Health Systems)
7.25%, 4/1/99 (Prere.) 1,945 2,093
7.25%, 4/1/00 10,490 11,156
(Univ. of Chicago Hosp.)
VRDO 4.00%, 3/1/95 (1) 2,500 2,500
Illinois Regional
Transportation Auth.
9.00%, 6/1/05 (2) 5,220 6,675
9.00%, 6/1/08 (2) 6,840 8,934
9.00%, 6/1/09 (2) 4,255 5,577
Illinois Sales Tax Rev.
6.50%, 6/15/13 5,000 5,327
Illinois Toll Highway Auth. VRDO
3.85%, 3/8/95 (1) 3,500 3,500
Metropolitan Pier &
Exposition Auth.
6.50%, 6/1/06 11,885 12,605
6.75%, 6/1/10 25,000 26,647
7.25%, 6/15/05 15,000 16,766
-----------
STATE TOTAL 283,373
-----------
- --------------------------------------------------------------------------------
INDIANA (1.3%)
East Chicago School
Building Corp.
11.75%, 2/1/99 (Prere.) 5,000 6,177
Indiana Municipal Power Agency
5.875%, 1/1/10 (1) 4,500 4,524
Indiana State Office Building
6.65%, 7/1/01 4,500 4,664
6.70%, 7/1/02 5,290 5,491
Indiana Univ. Student Fee Bonds
6.80%, 8/1/04 25,000 26,992
7.00%, 8/1/06 5,845 6,230
Marion County Hosp. Auth.
(Daughters of Charity)
9.75%, 11/1/00 4,600 4,826
Petersburg PCR
(Indianapolis Power & Light
Co. Project)
10.625%, 12/1/14 5,300 5,421
-----------
STATE TOTAL 64,325
-----------
- --------------------------------------------------------------------------------
KENTUCKY (1.5%)
Kentucky Development
Finance Auth.
(St. Elizabeth Medical Center)
6.625%, 11/1/04 (3) 20,025 21,476
(Sisters of Charity)
6.60%, 11/1/06 5,000 5,122
Kentucky Property &
Buildings Rev.
5.50%, 9/1/03 8,000 7,968
5.60%, 9/1/04 3,000 2,996
5.70%, 9/1/05 7,350 7,361
6.875%, 8/1/06 10,400 11,430
Kentucky Turnpike Auth. Resource
Recovery Road Rev.
8.00%, 7/1/03 14,750 16,005
13.125%, 7/1/97 (Prere.) 820 969
13.125%, 1/1/98 (Prere.) 30 36
-----------
STATE TOTAL 73,363
-----------
- --------------------------------------------------------------------------------
LOUISIANA (1.8%)
Jefferson Parish Sales Tax
6.75%, 12/1/06 (3) 11,000 11,779
Louisiana Gas & Fuel Tax Rev.
7.20%, 11/15/99 9,500 10,157
7.25%, 11/15/00 5,250 5,663
7.25%, 11/15/04 11,000 11,840
Louisiana GO
7.00%, 9/1/00 (Prere.) 11,540 12,768
8.75%, 9/1/00 (4) 8,830 10,278
8.75%, 9/1/01 (4) 9,445 11,071
Louisiana Recovery Dist. Sales Tax
VRDO 3.75%, 3/2/95 (3) 5,100 5,100
7.375%, 7/1/96 (2) 4,000 4,124
New Orleans Public
Improvement GO
7.70%, 10/1/99 (6) 2,395 2,637
7.75%, 10/1/00 (6) 5,510 6,056
-----------
STATE TOTAL 91,473
-----------
- --------------------------------------------------------------------------------
MAINE (.3%)
Maine Municipal Bond Bank
4.90%, 11/1/02 13,000 12,516
-----------
- --------------------------------------------------------------------------------
MASSACHUSETTS (6.8%)
Boston Water & Sewer Comm.
5.75%, 11/1/13 6,325 6,127
Massachusetts Bay Transit Auth.
5.30%, 3/1/04 32,380 31,970
7.25%, 3/1/03 (3) 16,000 17,685
Massachusetts GO
VRDO 3.65%, 3/2/95 (LOC) 10,000 10,000
5.10%, 2/1/05 25,000 24,241
6.50%, 5/1/04 (3) 4,000 4,143
6.50%, 8/1/04 3,840 4,187
6.50%, 8/1/08 9,400 10,107
6.90%, 6/1/00 (2) 2,500 2,690
7.00%, 6/1/99 (Prere.) 3,000 3,273
7.00%, 6/1/02 (2) 5,000 5,392
7.50%, 12/1/00 (Prere.) 10,000 11,344
7.50%, 6/1/04 3,975 4,640
</TABLE>
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<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Massachusetts Industrial Finance
Agency (Refusetech Inc. Project)
6.15%, 7/1/02 $ 5,040 $ 5,042
6.30%, 7/1/05 21,500 21,417
Massachusetts Industrial Finance
Auth. Rev.
(BioMed Research Corp.)
7.10%, 8/1/99 25,395 27,248
Massachusetts Turnpike Auth.
4.70%, 1/1/03 5,000 4,681
4.75%, 1/1/04 2,500 2,328
Massachusetts Water
Resources Auth.
5.25%, 3/1/07 5,000 4,748
5.25%, 3/1/09 7,175 6,767
5.25%, 3/1/13 20,000 18,218
5.50%, 11/1/07 32,860 31,895
6.50%, 7/15/10 30,220 32,002
6.50%, 7/15/19 37,515 39,550
7.25%, 4/1/01 9,800 10,714
-----------
STATE TOTAL 340,409
-----------
- --------------------------------------------------------------------------------
MICHIGAN (1.7%)
Detroit GO
5.80%, 5/1/02 (2) 8,970 9,159
5.90%, 5/1/03 (2) 9,490 9,743
Michigan Municipal Bond Auth.
0.00%, 12/1/99 (3)(LOC) 6,000 4,686
0.00%, 12/1/00 (3)(LOC) 5,590 4,115
0.00%, 12/1/01 (3)(LOC) 9,630 6,705
Michigan Public Power Agency
5.30%, 1/1/05 13,075 12,858
5.375%, 1/1/06 13,790 13,528
5.50%, 1/1/07 14,545 14,296
5.50%, 1/1/08 9,360 9,116
Michigan State Building Auth.
(Univ. of Michigan Adult
General Hosp.)
6.50%, 10/1/03 (2) 3,000 3,211
Michigan State Housing
Development Auth. VRDO
4.10%, 3/8/95 (LOC) 250 250
-----------
STATE TOTAL 87,667
-----------
- --------------------------------------------------------------------------------
MINNESOTA (.3%)
Minnesota GO
4.70%, 8/1/97 16,315 16,296
-----------
- --------------------------------------------------------------------------------
MISSOURI (.2%)
Missouri Housing
Development Comm.
9.80%, 8/1/97 120 124
St. Louis County Rockwood
School Dist. GO
8.50%, 2/1/01 8,000 9,296
-----------
STATE TOTAL 9,420
-----------
- --------------------------------------------------------------------------------
NEBRASKA (.6%)
Consumers Public Power Dist.
Electric Rev.
5.10%, 1/1/03 14,500 14,490
Nebraska Public Power Dist.
5.60%, 7/1/03 13,175 13,243
-----------
STATE TOTAL 27,733
-----------
- --------------------------------------------------------------------------------
NEVADA (2.0%)
Clark County Airport VRDO
3.95%, 3/8/95 (1) 7,800 7,800
Clark County GO
4.80%, 7/1/01 (1) 7,440 7,187
7.50%, 6/1/06 (2) 3,575 4,128
7.50%, 6/1/07 (2) 9,550 11,078
7.50%, 6/1/09 (2) 6,825 7,954
8.00%, 6/1/08 (2) 9,875 11,956
Clark County School Dist. GO
5.375%, 5/1/06 (3) 3,740 3,695
5.375%, 5/1/07 (3) 9,195 8,974
5.375%, 5/1/08 (3) 9,170 8,912
7.40%, 3/1/00 10,000 10,736
9.75%, 6/1/00 (1) 4,580 5,506
Nevada GO
6.00%, 5/1/05 10,450 10,782
Reno Hosp. Rev. CP
(St. Mary's Hosp.)
9.40%, 7/1/99 (1) 2,505 2,600
-----------
STATE TOTAL 101,308
-----------
- --------------------------------------------------------------------------------
NEW JERSEY (5.9%)
Camden County Municipal
Utilities Auth.
0.00%, 9/1/99 (3) 12,545 9,909
0.00%, 9/1/00 (3) 18,500 13,757
0.00%, 9/1/02 (3) 18,545 12,295
0.00%, 9/1/03 (3) 18,545 11,592
New Jersey Economic
Development Auth.
7.00%, 7/1/03 (1) 26,195 29,182
New Jersey Health Care Rev.
(Union Hosp./Mega Care)
6.00%, 7/1/98 2,820 2,838
6.20%, 7/1/99 3,080 3,103
6.40%, 7/1/00 3,295 3,321
New Jersey Sports & Exposition Auth.
VRDO 3.90%, 3/2/95 (1) 1,500 1,500
6.50%, 3/1/06 4,725 5,043
6.50%, 3/1/07 3,500 3,715
</TABLE>
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<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
New Jersey TRAN
CP 3.85%, 3/6/95 $ 11,300 $ 11,300
5.00%, 6/15/95 20,000 20,042
New Jersey Transportation
Trust Fund
3.50%, 6/15/95 12,000 11,955
5.30%, 12/15/01 7,500 7,512
New Jersey Turnpike Auth.
VRDO 3.75%, 3/8/95 (3) (LOC) 13,300 13,300
4.75%, 1/1/06 (ETM) 32,065 31,635
5.90%, 1/1/03 4,700 4,833
5.90%, 1/1/04 19,030 19,556
6.00%, 1/1/05 22,220 22,972
6.50%, 1/1/09 50,000 53,196
Rutgers State Univ. Rev.
6.40%, 5/1/13 4,675 4,912
-----------
STATE TOTAL 297,468
-----------
- --------------------------------------------------------------------------------
NEW YORK (11.7%)
Metropolitan Transportation Auth.
5.40%, 7/1/03 16,040 15,404
5.625%, 7/1/05 11,485 10,994
5.75%, 7/1/06 12,320 11,833
6.10%, 7/1/07 (1) 3,625 3,776
6.10%, 7/1/08 (1) 7,200 7,473
New York City GO
VRDO 3.95%, 3/2/95 (LOC) 8,700 8,700
6.00%, 8/15/99 13,070 13,171
6.10%, 8/1/02 4,000 3,976
6.15%, 8/15/00 14,670 14,764
6.25%, 8/1/03 14,000 14,127
6.30%, 8/15/01 10,000 10,100
6.375%, 8/1/04 20,000 19,950
7.00%, 8/1/97 (Prere.) 600 639
7.00%, 8/15/99 (3) 15,000 16,140
7.00%, 8/1/00 5,050 5,220
7.00%, 8/1/03 6,000 6,251
7.00%, 2/1/05 5,000 5,136
8.00%, 8/1/99 4,560 4,935
8.00%, 8/1/99 (ETM) 615 686
8.00%, 11/1/00 (2) 4,420 4,802
8.125%, 11/1/04 (3) 11,155 12,222
New York City Municipal Finance
Auth. Water and Sewer Rev.
VRDO 3.90%, 3/2/95 (3) 28,400 28,400
6.00%, 6/15/10 4,000 4,027
New York City RAN
4.50%, 4/12/95 59,095 59,116
4.75%, 6/30/95 7,000 7,008
New York Medical Care Facilities
6.00%, 8/15/02 13,140 13,124
6.00%, 8/15/03 18,340 18,196
7.875%, 8/15/00 (Prere.) 6,815 7,821
New York State COP
4.50%, 8/1/98 4,490 4,292
4.70%, 8/1/99 2,490 2,357
New York State Dormitory Auth.
(City Univ.)
6.25%, 7/1/03 4,250 4,305
6.35%, 7/1/04 2,500 2,535
6.45%, 7/1/05 1,500 1,520
7.00%, 7/1/01 10,000 10,904
(New York Univ.)
6.375%, 7/1/07 (3) 27,000 28,376
(State Univ.)
5.80%, 5/15/05 5,400 5,214
5.90%, 5/15/06 2,000 1,936
6.10%, 5/15/08 2,000 1,947
7.00%, 5/15/01 18,285 19,248
7.10%, 5/15/00 6,050 6,379
7.25%, 5/15/00 (Prere.) 2,000 2,230
New York State GO
7.80%, 11/15/99 5,000 5,528
New York State Local Govt.
Assistance Corp.
4.25%, 4/1/00 2,500 2,325
4.375%, 4/1/01 3,000 2,779
New York State Urban
Development Corp.
6.30%, 1/1/03 14,340 14,560
6.40%, 1/1/04 24,930 25,936
Onondaga County PCR
(Anheuser Busch)
6.625%, 8/1/06 10,000 10,452
Suffolk County Water Auth.
6.80%, 8/17/10 (ETM) 10,660 11,568
Triborough Bridge &
Tunnel Auth.
0.00%, 1/1/03 19,185 11,840
5.80%, 1/1/06 6,000 6,185
6.00%, 1/1/12 12,000 12,177
6.60%, 1/1/10 59,325 64,121
-----------
STATE TOTAL 586,705
-----------
- --------------------------------------------------------------------------------
NORTH CAROLINA (1.3%)
Charlotte Airport VRDO
3.95%, 3/8/95(1) 10,200 10,200
North Carolina Medical Care VRDO
(Duke Univ. Hosp.)
4.106%, 3/2/95 4,100 4,100
</TABLE>
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<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
North Carolina Municipal
Power Agency
(Catawba Electric) 6.00%, 1/1/04 $ 7,000 $ 6,994
6.00%, 1/1/05 28,750 28,558
7.00%, 1/1/00 (Prere.) 6,040 6,613
7.25%, 1/1/07 10,410 11,261
----------
STATE TOTAL 67,726
----------
- --------------------------------------------------------------------------------
OHIO (2.4%)
Cleveland School Dist.
8.125%, 12/1/98 (ETM) 2,815 3,117
9.00%, 12/1/98 (Prere.) 4,000 4,617
Cleveland Water Works
6.25%, 1/1/05 (2) 4,455 4,702
Cuyahoga County Hosp.
Improvement VRDO
(St. Luke's Hosp.)
4.25%, 3/8/95 (LOC) 6,910 6,910
Hamilton County BAN
3.25%, 4/14/95 9,880 9,862
Ohio Building Auth.
(State Correctional Facilities)
5.70%, 10/1/03 3,305 3,366
5.70%, 10/1/04 2,725 2,769
5.80%, 10/1/06 4,360 4,430
5.90%, 10/1/07 2,500 2,524
6.50%, 10/1/02 3,790 4,049
6.50%, 10/1/02 (1) 5,350 5,736
6.50%, 10/1/03 5,500 5,896
6.50%, 10/1/03 (1) 5,710 6,145
6.50%, 10/1/04 2,500 2,673
7.20%, 8/1/00 10,000 11,011
7.25%, 8/1/01 7,500 8,273
7.30%, 8/1/02 10,000 11,051
7.35%, 8/1/03 4,945 5,474
(State Data Center)
5.70%, 10/1/04 2,895 2,942
5.75%, 10/1/05 3,070 3,123
Ohio Higher Education Facilities
5.90%, 12/1/05 8,175 8,379
Ohio Public Facilities Comm.
5.50%, 12/1/06 5,465 5,326
----------
STATE TOTAL 122,375
----------
- --------------------------------------------------------------------------------
OKLAHOMA (2.6%)
Grand River Dam Auth.
Electric Rev.
5.70%, 6/1/05 20,000 20,230
5.75%, 6/1/06 19,350 19,540
5.875%, 6/1/07 14,500 14,707
8.00%, 6/1/02 21,000 24,186
Oklahoma Health System CP
(Baptist Medical Center)
4.20%, 5/9/95 5,000 5,000
4.45%, 7/11/95 25,000 25,000
Oklahoma Industrial Auth.
(St. Anthony's Hosp.)
7.50%, 10/1/03 (1) 5,470 5,675
Tulsa County Industrial Auth.
(St. Francis Hosp.)
5.15%, 12/15/03* 8,715 8,282
Tulsa Metropolitan Utility Auth.
7.00%, 2/1/03 8,465 9,311
----------
STATE TOTAL 131,931
----------
- --------------------------------------------------------------------------------
PENNSYLVANIA (6.8%)
Allegheny County GO
7.45%, 2/15/98 2,000 2,132
7.60%, 11/1/98 (Prere.) 2,000 2,179
Berks County GO
7.25%, 11/15/00 (3)(Prere.) 10,000 11,219
Delaware County Industrial
Development Auth. VRDO
3.75%, 3/2/95 3,600 3,600
Erie County Prison Auth.
Commonwealth Lease Rev.
6.75%, 11/1/01 (1) (Prere.) 5,295 5,752
Northumberland County
Commonwealth Lease Rev.
6.70%, 10/15/01 (1) 7,005 7,526
7.75%, 10/15/01 (1) 6,000 6,841
Pennsylvania Convention
Center Auth. 6.25%, 9/1/04 15,200 15,029
Pennsylvania COP
4.80%, 7/1/01 (2) 20,000 19,257
4.90%, 7/1/02 (2) 13,665 13,111
5.00%, 7/1/03 (2) 6,555 6,346
Pennsylvania GO
5.00%, 4/15/05 24,290 23,336
5.00%, 4/15/07 7,950 7,454
5.00%, 4/15/08 14,250 13,187
6.20%, 11/15/04 12,480 13,137
6.50%, 11/1/06 4,260 4,522
7.10%, 11/1/08 6,700 7,353
10.00%, 4/15/02 (2) 10,160 12,901
Pennsylvania Industrial
Development Auth.
6.50%, 7/1/98 9,850 10,317
6.60%, 1/1/99 5,065 5,352
6.60%, 7/1/99 10,355 11,002
6.70%, 1/1/00 7,420 7,930
6.70%, 7/1/00 9,080 9,760
6.80%, 1/1/01 5,000 5,403
6.80%, 7/1/01 5,480 5,954
</TABLE>
25
<PAGE> 42
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Pennsylvania Intergovernmental
Cooperation Auth.
4.70%, 6/15/01 (3) $ 3,410 $ 3,247
4.80%, 6/15/02 (3) 6,275 5,959
5.75%, 6/15/99 (3) 17,000 17,387
Philadelphia GO
4.60%, 5/15/99 (3) 4,345 4,236
6.00%, 11/15/00 (3) 11,995 12,338
Philadelphia Municipal Lease Rev.
6.00%, 7/15/03 5,065 5,038
Philadelphia School Dist. GO
0.00%, 7/1/00 (2) 15,500 11,667
6.70%, 7/1/99 (2) 9,000 9,518
Philadelphia Water & Sewer Rev.
6.875%, 10/1/06 (1) 15,455 16,560
8.90%, 10/1/95 (Prere.) 10,000 10,455
Philadelphia Water & Wastewater Rev.
4.75%, 6/15/98 11,540 11,325
Schuylkill Redevelopment Auth.
6.95%, 6/1/01 (3) 3,995 4,359
----------
STATE TOTAL 342,689
----------
- --------------------------------------------------------------------------------
PUERTO RICO (.2%)
Puerto Rico Telephone Auth. Rev.
5.40%, 1/1/08 9,550 9,157
----------
- --------------------------------------------------------------------------------
RHODE ISLAND (.6%)
Rhode Island Depositors Economic
Protection Corp.
6.55%, 8/1/10 (1) 26,850 28,460
----------
- --------------------------------------------------------------------------------
SOUTH CAROLINA (.2%)
Charleston Water Works & Sewer
9.625%, 1/1/96 (Prere.) 4,000 4,248
Piedmont Municipal Power Agency
5.40%, 1/1/07 (1) 3,200 3,161
South Carolina Capital Improvement
GO 6.50%, 2/1/96 3,000 3,059
----------
STATE TOTAL 10,468
----------
- --------------------------------------------------------------------------------
SOUTH DAKOTA (.1%)
South Dakota Health & Education
Auth. Rev. (McKennan Hosp.)
7.50%, 7/1/04 (1) 5,845 6,454
----------
- --------------------------------------------------------------------------------
TEXAS (10.2%)
Anderson County Rev.
(Coffield Prison Farm Project)
5.50%, 3/15/04 (2) 5,715 5,722
5.50%, 3/15/05 (2) 5,590 5,604
5.50%, 3/15/06 (2) 6,985 6,911
Austin Combined Utility System
5.125%, 11/15/02 9,500 9,324
5.20%, 11/15/03 3,360 3,293
5.30%, 5/15/04 5,770 5,671
5.30%, 11/15/04 5,735 5,632
5.80%, 11/15/06 5,255 5,308
6.00%, 11/15/06 (1) 23,265 24,257
7.25%, 11/15/03 6,000 6,520
Bell County Health Facilities
Development Corp.
(Scott & White Hosp.)
7.625%, 9/1/03 8,340 9,036
Bexar County VRDO
(Incarnate Word Health Service)
4.05%, 3/8/95 (4) 6,800 6,800
Corpus Christi GO
7.50%, 11/1/97 (2) (Prere.) 1,155 1,232
7.50%, 11/1/98 (2) 1,865 1,974
Dallas-Fort Worth Regional Airport
8.75%, 11/1/03 4,890 5,372
Harris County Flood
Control Dist. GO
5.60%, 10/1/01 8,900 9,121
Harris County Health Facility
Development Corp. VRDO
(Methodist Hosp.)
3.75%, 3/2/95 15,200 15,200
Harris County Toll Road VRDO
4.00%, 3/8/95 32,600 32,600
6.30%, 8/15/02 (3)(Prere.) 4,470 4,826
6.30%, 8/15/04 (3) 840 895
Houston GO 5.00%, 3/1/04 6,265 6,084
5.10%, 3/1/06 12,200 11,752
7.00%, 3/1/08 37,405 41,755
7.30%, 3/1/98 (3) (Prere.) 3,000 3,203
Houston Housing Finance
Corp. TOB VRDO
4.30%, 3/2/95 (4) 4,275 4,275
Houston Water & Sewer
System Rev.
CP 4.05%, 3/10/95 8,000 8,000
7.00%, 12/1/01 (2) 3,220 3,527
7.00%, 12/1/02 (2) 4,125 4,555
7.00%, 12/1/03 (2) 3,100 3,445
7.60%, 12/1/02 (6) 4,010 4,299
San Antonio Electric & Gas
5.50%, 2/1/04 4,545 4,574
5.80%, 2/1/06 8,000 8,155
Tarrant County Water Control
& Improvement Dist.
4.50%, 3/1/11 (3) 5,000 4,258
</TABLE>
26
<PAGE> 43
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Texas GO
6.00%, 10/1/06 $ 6,000 $ 6,280
8.00%, 10/1/07 50,000 60,990
Texas Municipal Power Agency
6.00%, 9/1/02 (1) (Prere.) 9,270 9,822
6.10%, 9/1/07 (1) 12,500 13,125
6.10%, 9/1/08 (1) 27,840 29,173
6.10%, 9/1/09 (1) 5,000 5,211
Texas Public Finance Auth.
Building Rev.
6.60%, 2/1/00 (1) 5,000 5,276
6.75%, 2/1/02 (1) 5,000 5,362
6.80%, 2/1/03 (1) 5,000 5,361
Texas TRAN
5.00%, 8/31/95 68,000 68,207
Texas Water Resource Finance Auth.
7.50%, 8/15/01 3,945 4,161
Univ. of Texas Permanent
Univ. Fund 6.40%, 7/1/02 5,000 5,327
Univ. of Texas Rev.
7.00%, 8/15/07 20,750 22,526
----------
STATE TOTAL 514,001
----------
- --------------------------------------------------------------------------------
UTAH (.5%)
Emery County PCR VRDO
(Pacific Corp.)
4.00%, 3/2/95 (2) 7,000 7,000
Salt Lake County PCR VRDO
(British Petroleum)
3.90%, 3/2/95 3,500 3,500
Utah GO
6.00%, 7/1/96 5,000 5,093
Utah Housing Finance Auth. VRDO
4.05%, 3/8/95 11,700 11,700
----------
STATE TOTAL 27,293
----------
- --------------------------------------------------------------------------------
VIRGINIA (.4%)
Chesterfield County CP
(Virginia Electric Power Co.)
4.10%, 3/6/95 16,100 16,100
Fairfax County GO
7.25%, 6/1/00 5,805 6,376
----------
STATE TOTAL 22,476
----------
- --------------------------------------------------------------------------------
WASHINGTON (2.8%)
King County GO
6.00%, 12/1/04 5,000 5,201
6.10%, 12/1/05 5,000 5,216
Seattle Water System
4.90%, 12/1/02 5,890 5,712
5.00%, 12/1/03 2,000 1,949
5.10%, 12/1/04 4,000 3,904
5.20%, 12/1/05 2,320 2,267
Tacoma Electric System Rev.
5.70%, 1/1/03 (2) 6,845 6,922
Washington GO
5.60%, 9/1/04 5,000 5,074
5.75%, 9/1/07 19,950 20,288
5.75%, 9/1/08 4,000 4,037
6.10%, 6/1/06 9,495 9,992
6.125%, 6/1/07 10,110 10,621
6.20%, 6/1/08 10,765 11,321
6.25%, 6/1/09 11,465 12,051
6.25%, 6/1/10 7,450 7,778
6.25%, 2/1/11 6,680 6,982
7.00%, 10/1/98 3,900 4,156
7.10%, 9/1/99 7,500 7,974
7.20%, 9/1/98 (Prere.) 2,365 2,538
Washington State
Health Care Auth. VRDO
(Sisters of Providence)
3.95%, 3/2/95 8,900 8,900
----------
STATE TOTAL 142,883
----------
- --------------------------------------------------------------------------------
WISCONSIN (1.6%)
Wisconsin GO
4.25%, 11/1/99 4,000 3,809
6.20%, 5/1/06 20,990 22,310
6.25%, 5/1/07 22,970 24,440
6.25%, 5/1/08 24,365 25,801
Wisconsin Health & Education
Facilities Auth. CP
4.20%, 5/31/95 (LOC) 5,000 5,000
----------
STATE TOTAL 81,360
----------
- --------------------------------------------------------------------------------
WYOMING (.3%)
Lincoln PCR VRDO (Exxon)
3.90%, 3/2/95 11,600 11,600
Platte County PCR
4.50%, 1/1/01 2,250 2,101
4.60%, 1/1/02 2,430 2,254
----------
STATE TOTAL 15,955
----------
- --------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(Cost $4,827,048) 4,960,509
- --------------------------------------------------------------------------------
</TABLE>
27
<PAGE> 44
<TABLE>
<CAPTION>
Market
Value
(000)+
- --------------------------------------------------------------------------------
<S> <C>
OTHER ASSETS AND LIABILITIES (1.4%)
- --------------------------------------------------------------------------------
Other Assets--Note B $ 79,860
Liabilities (11,627)
----------
68,233
- --------------------------------------------------------------------------------
NET ASSETS (100%)
Applicable to 391,929,089 outstanding
$.001 par value shares
(authorized 500,000,000 shares) 5,028,742
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE $12.83
================================================================================
</TABLE>
+See Note A to Financial Statements.
For explanation of abbreviations and other references, see page 44.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AT FEBRUARY 28, 1995,
NET ASSETS CONSISTED OF:
- --------------------------------------------------------------------------------
Amount Per
(000) Share
---------- ------
<S> <C> <C>
Paid in Capital $4,921,877 $12.56
Undistributed Net Investment Income -- --
Overdistributed Net Realized Gains (26,596) (.07)
Unrealized Appreciation of Investments--Note D 133,461 .34
- --------------------------------------------------------------------------------
NET ASSETS $5,028,742 $12.83
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Face Market
Amount Value
INSURED LONG-TERM PORTFOLIO (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS (99.6%)
- --------------------------------------------------------------------------------
ALABAMA (.7%)
Birmingham Medical Center
(Special Care Medical Center)
7.25%, 7/1/15 (1) $ 6,715 $ 6,957
Macintosh Industrial
Development Auth. VRDO
(Ciba-Geigy)
4.00%, 3/8/95 (LOC) 600 600
Medical Clinic Board of Bessemer
(Bessemer-Carraway Hosp.)
7.25%, 4/1/15 (1) 5,000 5,342
----------
STATE TOTAL 12,899
----------
- --------------------------------------------------------------------------------
ALASKA (2.3%)
Alaska Housing Finance Corp. VRDO
4.00%, 3/8/95 17,100 17,100
Anchorage Electric Rev.
8.00%, 12/1/09 (1) 2,565 3,128
8.00%, 12/1/10 (1) 2,960 3,619
Municipality of Anchorage GO
7.20%, 6/1/17 (2) 11,000 11,612
7.625%, 8/1/96 (3) (Prere.) 3,000 3,179
North Slope Borough GO
9.85%, 6/30/97 (2) (ETM) 3,000 3,333
10.00%, 6/30/04 (2) (ETM) 850 1,123
----------
STATE TOTAL 43,094
----------
- --------------------------------------------------------------------------------
ARIZONA (.6%)
Maricopa County
(Samaritan Health Service)
7.00%, 12/1/16 (1) 8,650 9,946
Tucson GO
5.50%, 7/1/12 (3) 1,500 1,429
----------
STATE TOTAL 11,375
----------
- --------------------------------------------------------------------------------
ARKANSAS (.5%)
North Little Rock Electric System
6.50%, 7/1/10 (1) 3,500 3,806
6.50%, 7/1/15 (1) 4,500 4,913
----------
STATE TOTAL 8,719
----------
- --------------------------------------------------------------------------------
CALIFORNIA (18.0%)
California GO
6.00%, 8/1/24 (1) 25,000 24,692
California Finance Auth.
PCR VRDO
(Southern California Edison)
4.00%, 3/2/95 600 600
California Health Facilities Finance
Auth. (Adventist Health System)
6.75%, 3/1/11 (1) 12,000 12,643
</TABLE>
28
<PAGE> 45
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
California Housing Finance Agency
8.625%, 8/1/15 (1) $ 3,045 $ 3,173
California RAN
5.00%, 6/28/95 10,000 10,020
Contra Costa Transportation Auth.
VRDO 3.90%, 3/8/95 (3) 1,100 1,100
Contra Costa Water Dist. Rev.
5.00%, 10/1/24 (1) 23,000 19,747
Culver City Redevelopment Auth.
7.10%, 11/1/99 (2) (Prere.) 390 418
Fresno COP (City Hall Project)
6.375%, 8/1/10 (2) 10,500 10,887
Long Beach Finance Auth.
6.00%, 11/1/09 (2) 3,735 3,834
Modesto Irrigation Dist.
Finance Auth.
(Woodland Project)
6.50%, 10/1/22 (2) 20,225 21,780
Modesto San Juan
Public Power Agency
6.125%, 7/1/13 (2) 7,000 7,190
6.75%, 7/1/20 (1) 13,000 14,387
Northern California Power Agency
(Combustion Turbine Project)
6.00%, 8/15/10 (1) 3,500 3,519
(Hydroelectric Project)
5.50%, 7/1/23 (1) 23,200 21,361
Oakland Redevelopment Agency
(Central Dist. Project)
5.50%, 2/1/14 (2) 6,300 5,960
6.00%, 2/1/08 (2) 5,585 5,747
Orange County Sanitation Dist.
VRDO 4.75%, 3/2/95 (2) (LOC) 17,600 17,600
Palmdale Single Family Mortgage Rev.
9.875%, 4/1/08 (3) 79 102
Pasadena Electric Works Rev.
5.375%, 8/1/12 9,000 8,305
Pittsburg Redevelopment Agency
5.50%, 8/1/07 (3) 3,000 2,986
5.50%, 8/1/15 (3) 5,000 4,741
Riverside County Transportation Comm.
5.75%, 6/1/07 (2) 3,495 3,547
5.75%, 6/1/08 (2) 1,750 1,768
Sacramento County TRAN
4.50%, 9/29/95 30,000 30,013
Sacramento Municipal Utility Dist.
5.75%, 8/15/13 (1) 12,360 11,990
6.50%, 9/1/13 (1) 8,895 9,585
San Diego County TRAN
4.50%, 9/29/95 15,000 14,940
San Jose Merged Area Redevelopment
Project Rev.
7.50%, 8/1/96 (1) (Prere.) 2,700 2,858
7.50%, 8/1/96 (3) (Prere.) 1,440 1,525
San Jose Tax Redevelopment
6.00%, 8/1/10 (1) 8,105 8,293
Santa Clara Redevelopment Agency
(Bayshore North)
7.00%, 7/1/10 (2) 3,000 3,375
Santa Clara Valley Water Dist.
6.00%, 2/1/24 (3) 5,000 4,939
Santa Margarita/Dana Point
Improvement Dist.
5.75%, 8/1/20 (1) 8,500 8,139
Santa Rosa Waste Water Recovery
6.00%, 9/1/15 (3) 5,000 5,035
South County Waste Water Auth.
(Gilroy) 5.50%, 8/1/22 (3) 8,000 7,354
(Morgan Hill) 5.50%, 8/1/22 (3) 7,000 6,435
Southern California Public
Power Auth. (Palo Verde) 5.00%, 7/1/15 (2) 2,605 2,282
Southern California Rapid
Transit Dist. 5.80%, 9/1/06 (2) 4,000 4,088
5.90%, 9/1/07 (2) 3,155 3,231
Transmission Agency of Northern
California
5.25%, 5/1/08 (1) 4,000 3,772
Ukiah Electric Rev.
6.25%, 6/1/18 (1) 6,330 6,591
----------
STATE TOTAL 340,552
----------
- --------------------------------------------------------------------------------
COLORADO (.8%)
Colorado Health Auth.
(Sisters of Charity Health System)
6.00%, 5/15/13 (1) 12,500 12,608
Denver County Health Facilities
(St. Anthony's Hosp.)
7.70%, 5/1/07 (1) 2,800 3,070
----------
STATE TOTAL 15,678
----------
- --------------------------------------------------------------------------------
CONNECTICUT (.8%)
Connecticut Development
Auth. PCR VRDO
(Connecticut Light & Power)
3.95%, 3/8/95 (LOC) 11,700 11,700
</TABLE>
29
<PAGE> 46
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
South Central Connecticut Regional
Water Auth. 5.75%, 8/1/12 (3) $ 3,100 $ 3,107
----------
STATE TOTAL 14,807
----------
- --------------------------------------------------------------------------------
DELAWARE (1.5%)
Delaware Economic
Development Auth.
(Delmarva Power and Light)
7.30%, 9/1/15 (3) 4,000 4,326
Delaware Health Facilities Auth.
(Delaware Medical Center)
7.00%, 10/1/15 (1) 6,000 6,376
Dover Electric Rev.
5.75%, 7/1/15 (3) 5,225 5,084
6.10%, 7/1/11 (3) 2,000 2,068
Sussex County Waste Water Rev.
6.60%, 6/15/25 (1) 2,500 2,610
Wilmington GO
5.00%, 7/1/22 (3) 8,700 7,444
----------
STATE TOTAL 27,908
----------
- --------------------------------------------------------------------------------
DISTRICT OF Columbia (.3%)
District of Columbia GO VRDO
4.40%, 3/2/95 (LOC) 5,400 5,400
District of Columbia Housing
Finance Agency
10.25%, 11/1/09 (3) 930 956
----------
STATE TOTAL 6,356
----------
- --------------------------------------------------------------------------------
FLORIDA (7.7%)
Coral Springs Improvement Dist. GO
Water & Sewer
6.00%, 6/1/10 (1) 3,000 3,103
Dade County Water &
Sewer System Rev. VRDO
3.95%, 3/8/95 (3) 280 280
Davie Water & Sewer Rev.
6.375%, 10/1/12 (2) 2,620 2,806
Florida Housing Finance Agency
9.125%, 12/15/16 (3) 10 10
Florida Municipal Power Agency
(St. Lucie Project)
5.50%, 10/1/12 (3) 4,070 3,954
(Stanton Project)
5.00%, 10/1/19 (1) 8,100 7,065
Gulf Breeze Local Govt.
Loan Program 4.00%, 3/2/95 (3) 5,700 5,700
Indian River County Water &
Sewer Rev.
5.25%, 9/1/18 (3) 3,200 2,907
City of Jacksonville Guaranteed
Entitlement Rev.
5.50%, 10/1/12 (2) 4,900 4,760
Lee County Gas Tax
5.50%, 10/1/09 (1) 2,000 1,988
Orange and Orlando County
Expressway Auth.
8.25%, 7/1/13 (3) 9,695 12,484
8.25%, 7/1/15 (3) 8,360 10,870
8.25%, 7/1/16 (3) 12,295 16,026
Palm Beach Criminal Justice
7.20%, 6/1/14 (3) 16,300 19,113
7.20%, 6/1/15 (3) 4,000 4,683
Palm Beach Solid Waste Auth.
7.40%, 12/1/05 (6) 750 829
St. Lucie County Utilities System
6.00%, 10/1/20 (3) (ETM) 2,350 2,384
Seacoast Utility Auth.
Water & Sewer
5.00%, 3/1/19 (3) 9,450 8,288
5.50%, 3/1/13 (3) 4,000 3,845
5.50%, 3/1/19 (3) 2,000 1,920
Tampa Utilities Rev.
6.75%, 10/1/10 (2) 9,330 10,394
6.75%, 10/1/11 (2) 9,965 11,055
6.75%, 10/1/12 (2) 10,635 11,890
---------
STATE TOTAL 146,354
----------
- --------------------------------------------------------------------------------
GEORGIA (.5%)
Henry County School Dist. GO
6.45%, 8/1/11 (1) 4,000 4,264
Private Colleges & Universities
Auth. (Mercer Univ.)
6.50%, 11/1/15 (1) 5,000 5,399
----------
STATE TOTAL 9,663
----------
- --------------------------------------------------------------------------------
HAWAII (1.4%)
Hawaii Airport System Rev.
6.35%, 7/1/07 (1) 8,000 8,449
Hawaii GO
5.50%, 5/1/08 (3) 2,000 1,981
5.55%, 5/1/09 (3) 1,000 986
5.55%, 5/1/10 (3) 2,500 2,437
Honolulu City & County GO
8.00%, 10/1/10 11,000 13,551
----------
STATE TOTAL 27,404
----------
- --------------------------------------------------------------------------------
IDAHO
Idaho Health Facilities Auth.
(St. Joseph Regional
Medical Center)
5.25%, 7/1/16 (1) 1,000 898
----------
- --------------------------------------------------------------------------------
</TABLE>
30
<PAGE> 47
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
ILLINOIS (4.7%)
Chicago Board of Education GO
6.25%, 1/1/11 (1) $ 7,000 $ 7,242
Chicago Public Building Comm.
7.00%, 1/1/20 (1) (ETM) 21,500 24,016
Chicago Waste Water Transmission
6.50%, 1/1/08 (3) 1,315 1,402
Cook County GO
7.25%, 11/1/07 (1) 6,000 6,860
Cook County Single Family
Mortgage
9.30%, 12/1/05 (1) 20 21
Illinois Development Finance Auth.
PCR (Illinois Power Co.)
7.40%, 12/1/24 (1) 14,000 15,598
Illinois Regional Transit Auth.
Cook, DuPage and Kane
Counties GO
7.20%, 11/1/20 (2) 24,000 27,641
Southern Illinois Univ.
10.25%, 4/1/95 (Prere.) 3,000 3,076
Will County Community Unit
School Dist. (Romeoville)
7.10%, 12/1/09 (2) 1,750 1,977
7.10%, 12/1/10 (2) 1,615 1,824
----------
STATE TOTAL 89,657
----------
- --------------------------------------------------------------------------------
INDIANA (1.1%)
Indiana Municipal Power Agency
6.125%, 1/1/13 (1) 13,250 13,487
Marion County Hosp. Auth.
(Community Hosp.)
9.00%, 5/1/08 (1) 1,500 1,543
Merrillville School Building Corp.
6.65%, 7/1/06 (1) 5,500 5,974
----------
STATE TOTAL 21,004
----------
- --------------------------------------------------------------------------------
KANSAS (.1%)
Kansas Highway Refunding Rev.
9.00%, 7/1/97 (1) (ETM) 1,200 1,312
----------
- --------------------------------------------------------------------------------
KENTUCKY (1.6%)
Boone County PCR
(Cincinnati Gas & Electric)
5.50%, 1/1/24 (1) 2,000 1,835
Kentucky Development Finance
Auth. Hosp. Facilities
(St. Elizabeth's Medical Center)
6.00%, 11/1/10 (3) 23,885 24,144
Kentucky Housing Corp.
8.875%, 7/1/19 (6) 465 484
Kentucky Turnpike Economic
Development
5.50%, 7/1/09 (2) 3,630 3,612
----------
STATE TOTAL 30,075
----------
- --------------------------------------------------------------------------------
LOUISIANA (2.2%)
Jefferson Parish Sales Tax Rev.
6.75%, 12/1/06 (3) 8,500 9,102
New Orleans GO
0.00%, 9/1/10 (2) 8,500 3,357
0.00%, 9/1/11 (2) 10,475 3,885
0.00%, 9/1/13 (2) 9,000 2,939
6.00%, 9/1/21 (2) 22,250 21,930
----------
STATE TOTAL 41,213
----------
- --------------------------------------------------------------------------------
MAINE (.8%)
Maine Health & Higher Education
Facilities Auth.
(Eastern Maine Medical Center)
6.375%, 10/1/21 (3) 8,000 8,065
Maine Turnpike Rev.
6.00%, 7/1/18 (1) 7,000 6,956
----------
STATE TOTAL 15,021
----------
- --------------------------------------------------------------------------------
MARYLAND (.7%)
Maryland Health & Education
Facilities Auth.
(Univ. of Maryland
Medical System)
7.00%, 7/1/22 (3) 12,025 13,826
----------
- --------------------------------------------------------------------------------
MASSACHUSETTS (7.6%)
Boston GO
6.50%, 7/1/12 (2) 4,750 4,990
Boston Water & Sewer Comm.
5.25%, 11/1/11 (3) 5,000 4,668
7.25%, 11/1/06 (6) 2,500 2,664
Lawrence GO
4.75%, 2/15/14 (2) 1,500 1,289
Massachusetts GO
TOB VRDO 4.10%, 3/8/95 (1) 700 700
7.00%, 7/1/09 (3) 32,250 36,350
Massachusetts Health and
Education Facilities Auth.
(Boston College)
6.75%, 7/1/11 (3) 6,595 6,959
(Cape Cod Health System)
5.25%, 11/15/21 (7) 2,500 2,160
(Falmouth Hosp.) 5.50%, 7/1/08 (1) 1,425 1,401
(Lahey Clinic) 5.25%, 7/1/10 (1) 14,120 13,053
7.85%, 7/1/03 (1) 3,360 3,890
</TABLE>
31
<PAGE> 48
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
(Massachusetts General Hosp.)
6.25%, 7/1/12 (2) $ 19,650 $ 20,432
Massachusetts Housing
Finance Agency Rev.
5.55%, 10/1/05 (2) 5,230 5,201
5.95%, 10/1/08 (2) 27,485 27,545
8.875%, 7/1/18 (1) 7,935 8,171
Massachusetts Municipal Wholesale
Electric Power
5.10%, 7/1/07 (2) 3,280 3,068
Southeastern Massachusetts Univ.
Building Auth. Rev.
5.75%, 5/1/16 (2) 2,000 1,945
----------
STATE TOTAL 144,486
----------
- --------------------------------------------------------------------------------
MICHIGAN (3.7%)
Detroit Sewer System Rev.
5.45%, 7/1/07 (3) 6,850 6,741
5.55%, 7/1/08 (3) 7,100 6,942
Michigan Strategic Fund
(Detroit Edison)
7.00%, 7/15/08 (1) 18,375 20,625
Monroe County Economic Development
Corp. (Detroit Edison)
6.95%, 9/1/22 (3) 25,000 28,475
St. Clair Economic Development
Corp. PCR (Detroit Edison)
6.40%, 8/1/24 (2) 8,000 8,217
----------
STATE TOTAL 71,000
----------
- --------------------------------------------------------------------------------
MINNESOTA (.6%)
Dakota County Housing &
Redevelopment Auth.
9.375%, 5/1/18 (3) 55 59
Southern Minnesota Municipal
Power Agency
5.50%, 1/1/15 (2) 10,000 9,625
Western Minnesota Municipal
Power Agency
9.75%, 1/1/16 (1) (ETM) 845 1,216
----------
STATE TOTAL 10,900
----------
- --------------------------------------------------------------------------------
MISSISSIPPI (.2%)
Jackson Water & Sewer System
4.50%, 9/1/10 (1) 1,500 1,267
5.20%, 9/1/07 (1) 2,000 1,903
----------
STATE TOTAL 3,170
----------
- --------------------------------------------------------------------------------
MISSOURI (.5%)
Missouri Health & Education
Facilities Auth.
(Lester Cox Medical Center)
5.25%, 6/1/15 (1) 10,000 9,094
St. Louis County Single Family
Mortgage Rev.
9.25%, 10/1/16 (2) 905 979
----------
STATE TOTAL 10,073
----------
- --------------------------------------------------------------------------------
MONTANA (.1%)
Forsyth PCR (Montana Power Co.)
6.125%, 5/1/23 (2) 1,500 1,502
----------
- --------------------------------------------------------------------------------
NEBRASKA (.1%)
Nebraska Investment Finance Auth.
9.10%, 11/15/06 (3) 1,258 1,310
----------
- --------------------------------------------------------------------------------
NEVADA (.5%)
Clark County GO
6.50%, 6/1/17 (2) 5,000 5,362
Clark County Airport System VRDO
3.95%, 3/8/95 (1) 1,390 1,390
Reno Hosp. Rev. (St. Mary's Hosp.)
9.875%, 7/1/12 (1) 3,000 3,123
----------
STATE TOTAL 9,875
----------
- --------------------------------------------------------------------------------
NEW HAMPSHIRE (.4%)
New Hampshire Higher Education
(Hitchcock Clinic)
6.00%, 7/1/15 (1) 7,560 7,515
----------
- --------------------------------------------------------------------------------
NEW JERSEY (5.0%)
Atlantic County COP
7.40%, 3/1/12 (3) 4,335 5,089
Hoboken-Union City-Weehawken
Sewage Auth.
6.25%, 8/1/14 (1) 10,185 10,788
6.25%, 8/1/15 (1) 10,820 11,438
New Brunswick Housing & Urban
Development
5.75%, 7/1/24 (1) 5,000 4,801
New Jersey Health Care
Facility Finance Auth.
(St. Clares-Riverside Medical Center)
5.75%, 7/1/14 (1) 3,000 2,898
New Jersey Sports &
Exposition Auth.
6.50%, 3/1/13 (1) 18,795 20,496
New Jersey Turnpike Auth.
VRDO 3.75%, 3/8/95 (3) (LOC) 600 600
6.50%, 1/1/13 (1) 30,000 32,557
6.50%, 1/1/16 (1) 5,000 5,400
----------
STATE TOTAL 94,067
----------
- --------------------------------------------------------------------------------
NEW MEXICO (.7%)
Albuquerque Hosp. System
(Presbyterian Health)
6.375%, 8/1/07 (1) 4,000 4,195
</TABLE>
32
<PAGE> 49
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Farmington Utility Systems Rev.
5.75%, 5/15/13 (3) $ 3,000 $ 2,940
Santa Fe Rev.
6.30%, 6/1/24 (2) 5,000 5,087
----------
STATE TOTAL 12,222
----------
- --------------------------------------------------------------------------------
NEW YORK (1.8%)
New York City GO
VRDO 3.95%, 3/2/95 (LOC) 1,800 1,800
6.625%, 8/1/02 (2) (Prere.) 4,950 5,421
6.625%, 8/1/15 (2) 50 52
New York City Trust for Cultural
Resources VRDO (Carnegie Hall)
4.10%, 3/8/95 (LOC) 2,000 2,000
New York City Municipal Water
Finance Auth. Water and
Sewer System Rev.
VRDO 3.90%, 3/2/95 (3) 600 600
7.00%, 6/15/09 (2) 3,750 4,041
New York State Thruway Auth.
5.80%, 4/1/11 (2) 8,635 8,554
Triborough Bridge & Tunnel Rev.
5.00%, 1/1/17 (1) 6,000 5,202
6.00%, 1/1/14 4,500 4,464
6.00%, 1/1/15 (2) 1,275 1,277
----------
STATE TOTAL 33,411
----------
- --------------------------------------------------------------------------------
NORTH CAROLINA (.2%)
North Carolina Municipal Power
Agency (Catawba Electric)
6.00%, 1/1/10 (1) 4,000 4,103
----------
- --------------------------------------------------------------------------------
NORTH DAKOTA (.6%)
Bismark Medical Center
7.50%, 5/1/13 (6) 10,000 10,736
----------
- --------------------------------------------------------------------------------
OHIO (4.1%)
Akron Bath Copley Joint Township
Hosp. Dist. (Akron General)
6.00%, 1/1/22 (2) 3,100 3,100
Cleveland Airport System Rev.
0.00%, 1/1/05 (1) 3,975 2,302
0.00%, 1/1/06 (1) 3,475 1,885
7.25%, 1/1/20 (1) 50 54
Cleveland City GO
5.30%, 9/1/07 (2) 3,500 3,431
Cleveland Public Power System Rev.
7.00%, 11/15/16 (1) 5,000 5,498
Cleveland Water Works Rev.
5.50%, 1/1/21 (1) 1,000 940
6.25%, 1/1/15 (2) 2,500 2,551
Columbus Sewer Rev. VRDO
3.90%, 3/2/95 5,900 5,900
Cuyahoga County Hosp.
Improvement VRDO
(St. Luke's Hosp.)
4.25%, 3/8/95 (LOC) 1,500 1,500
Franklin Convention Center Rev.
0.00%, 12/1/06 (1) 4,355 2,264
Franklin Hosp. Facility Auth.
(Riverside Hosp.)
7.25%, 5/15/20 (1) 2,050 2,212
Hamilton County (Children's Hosp.)
5.20%, 5/15/09 (1) 2,500 2,358
Lucas County GO
6.95%, 12/1/11 (1) 900 971
Northeast Ohio Regional
Sewer Dist. 6.50%, 11/15/16 (2) 5,750 5,971
Ohio Air Quality Development
Auth. PCR
(Ohio Edison)
7.10%, 6/1/18 (3) 6,500 6,955
7.45%, 3/1/16 (3) 9,500 10,315
Ohio Building Auth.
(Transportation Facilities)
7.00%, 9/1/07 (1) 1,420 1,547
Ohio GO
7.625%, 8/1/09 4,345 5,184
Ohio Higher Education
Facilities Auth.
(Univ. of Dayton)
6.60%, 12/1/17 (3) 1,200 1,267
Ohio Student Loan VRDO
4.00%, 3/8/95 (LOC) 3,500 3,500
Ohio Water Development Auth.
7.00%, 12/1/09 (2) (ETM) 1,500 1,677
Reynoldsburg School Dist.
GO 6.55%, 12/1/17 (3) 2,000 2,103
Summit Limited Tax GO
6.90%, 8/1/12 (2) 2,750 2,959
Univ. of Toledo
5.75%, 12/1/12 (3) 1,000 990
----------
STATE TOTAL 77,434
----------
- --------------------------------------------------------------------------------
OKLAHOMA (1.7%)
Grand River Dam Auth. Rev.
5.75%, 6/1/06 (4) 5,800 5,994
Oklahoma Industrial Development
Auth. Hosp. Rev. CP
(Baptist Medical Center)
4.35%, 4/6/95 26,300 26,300
----------
STATE TOTAL 32,294
----------
- --------------------------------------------------------------------------------
</TABLE>
33
<PAGE> 50
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
OREGON (.1%)
Oregon Health, Housing,
Educational & Cultural Facilities
(Lewis & Clark College)
6.00%, 10/1/13 (1) $ 2,250 $ 2,280
----------
- --------------------------------------------------------------------------------
PENNSYLVANIA (8.8%)
Allegheny County Hosp. Auth.
(Presbyterian Hosp.)
7.125%, 7/1/01 (1) (Prere.) 12,500 13,700
Allegheny County Sanitary Auth.
5.50%, 12/1/16 (3) 10,000 9,489
Armstrong County Hosp. Auth.
6.25%, 6/1/13 (2) 18,400 18,813
Delaware County Industrial
Development Auth. VRDO
(United Parcel Service)
3.75%, 3/2/95 1,100 1,100
Delaware River Joint Toll
Bridge Comm.
6.00%, 7/1/18 (3) 10,500 10,530
Lehigh County General
Purpose Auth.
6.50%, 7/1/10 (1) 6,655 6,972
Pennsylvania Convention
Center Auth.
6.00%, 9/1/19 (3) 10,000 10,025
6.70%, 9/1/16 (3) 9,970 10,832
Pennsylvania Turnpike Comm.
5.50%, 12/1/12 (2) 7,000 6,723
5.50%, 12/1/17 (3) 10,470 9,848
5.50%, 12/1/19 (3) 25,000 23,396
6.00%, 6/1/15 (1) 1,000 1,002
Philadelphia Gas Works
6.00%, 5/15/12 (2) 3,000 3,028
Philadelphia Water &
Wastewater Rev.
7.00%, 6/15/10 (3) 15,000 16,889
7.00%, 6/15/11 (3) 16,500 18,567
Pittsburgh Water &
Sewer System Rev.
7.25%, 9/1/14 (3) (ETM) 5,000 5,770
----------
STATE TOTAL 166,684
----------
- --------------------------------------------------------------------------------
PUERTO RICO (.2%)
Puerto Rico Public Building Auth.
0.00%, 7/1/01 (3) 4,150 3,001
----------
- --------------------------------------------------------------------------------
RHODE ISLAND (.5%)
Rhode Island Public Building Auth.
6.00%, 2/1/11 (2) 3,805 3,820
Rhode Island Convention Auth.
5.25%, 5/15/15 (1) 3,000 2,702
Rhode Island Depositors
Economic Project
5.80%, 8/1/11 (1) 1,250 1,234
5.80%, 8/1/12 (1) 2,000 1,963
----------
STATE TOTAL 9,719
----------
- --------------------------------------------------------------------------------
SOUTH CAROLINA (4.4%)
North Charleston Sewer Dist.
6.375%, 7/1/12 (1) 2,750 2,903
Piedmont Municipal Power Agency
5.00%, 1/1/18 (3) 27,500 23,948
5.00%, 1/1/22 (3) 8,000 6,821
6.75%, 1/1/19 (3) 10,600 11,629
6.75%, 1/1/20 (3) 23,515 25,839
Public Service Auth. Rev.
6.25%, 1/1/22 (2) 13,000 12,699
----------
STATE TOTAL 83,839
----------
- --------------------------------------------------------------------------------
SOUTH DAKOTA (1.1%)
Heartland Consumer Power Dist.
7.625%, 1/1/01 (1) (Prere.) 7,000 7,485
South Dakota Health &
Educational Facilities Auth.
(McKennan Hosp.)
7.625%, 7/1/14 (1) 11,500 12,432
----------
STATE TOTAL 19,917
----------
- --------------------------------------------------------------------------------
TENNESSEE (.3%)
Knox County Health, Education
& Housing Facility
(Fort Sanders Hosp.)
8.00%, 1/1/08 (1) 3,000 3,292
Tennessee Housing
Development Agency
7.125%, 7/1/17 (1) 3,000 3,142
----------
STATE TOTAL 6,434
----------
- --------------------------------------------------------------------------------
TEXAS (6.9%)
Austin Combined Utilities
System Rev.
5.75%, 11/15/16 (2) 25,000 24,303
Colorado River Municipal
Water Dist.
6.00%, 1/1/16 (2) 6,000 5,971
Corpus Christi Utilities
System Rev.
7.00%, 7/15/10 (3) 7,500 8,078
Denton County Housing
Finance Corp.
10.00%, 9/1/05 (1) 30 31
El Paso Health Facility Rev. VRDO
(Providence Memorial Hosp.)
3.75%, 3/2/95 (LOC) 4,600 4,600
</TABLE>
34
<PAGE> 51
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Houston Public Improvement
7.00%, 3/1/08 $ 16,000 $ 17,861
Houston Water & Sewer Rev.
7.00%, 12/1/20 (1) 12,280 13,162
Houston Water Conveyance System
6.125%, 12/15/09 (2) 2,000 2,080
6.25%, 12/15/12 (2) 8,340 8,762
6.80%, 12/15/10 (2) 5,490 6,046
6.80%, 12/15/11 (2) 8,910 9,827
7.50%, 12/15/12 (2) 1,000 1,189
7.50%, 12/15/13 (2) 1,100 1,309
Lower Colorado River Auth.
5.625%, 1/1/15 (4) (Prere.) 3,055 2,933
San Antonio Electric & Gas System
0.00%, 2/1/06 (3) 18,000 9,648
0.00%, 2/1/07 (3) 15,000 7,515
San Antonio Sewer Rev.
8.00%, 5/1/95 (Prere.) 4,000 4,105
Texas Turnpike Auth. Dallas
North Toll
(Addison Project)
6.60%, 1/1/23 (3) 2,250 2,339
----------
STATE TOTAL 129,759
----------
- --------------------------------------------------------------------------------
VIRGINIA (.5%)
Chesapeake Hosp. Auth.
(Chesapeake General Hosp.)
5.30%, 7/1/08 (1) 2,250 2,167
5.50%, 7/1/12 (1) 2,000 1,899
Henry County Public Service Auth.
6.25%, 11/15/19 (3) 1,500 1,518
Prince William County Service Auth.
6.00%, 7/1/29 (3) 4,500 4,467
----------
STATE TOTAL 10,051
----------
- --------------------------------------------------------------------------------
WASHINGTON (1.4%)
Snohomish County Mukilteo
School Dist.
5.60%, 12/1/08 (3) 6,960 6,920
5.65%, 12/1/09 (3) 9,160 9,033
5.65%, 12/1/10 (3) 3,950 3,881
5.70%, 12/1/11 (3) 5,000 4,915
Washington Health Care Facilities
Auth. (General Hosp. of Everett)
9.00%, 1/1/11 (3) 1,700 1,761
----------
STATE TOTAL 26,510
----------
- --------------------------------------------------------------------------------
WEST VIRGINIA (.9%)
Berkeley Brooke Fayette Counties
Single Family Mortgage
9.10%, 8/1/11 (3) 540 574
West Virginia State Building Comm.
7.00%, 7/1/11 (1) 7,325 8,178
7.00%, 7/1/12 (1) 7,840 8,749
----------
STATE TOTAL 17,501
----------
- --------------------------------------------------------------------------------
WISCONSIN (.3%)
Wisconsin Health Facilities Auth.
(Columbia Hosp.)
9.50%, 6/1/95 (6) (Prere.) 2,000 2,066
(St. Luke's Medical Center)
7.10%, 8/15/11 (1) 4,000 4,275
----------
STATE TOTAL 6,341
----------
- --------------------------------------------------------------------------------
WYOMING (.1%)
Lincoln VRDO (Exxon Corp.)
3.90%, 3/2/95 2,000 2,000
- --------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(Cost $1,789,605) 1,885,949
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (.4%)
- --------------------------------------------------------------------------------
Other Assets--Note B 35,141
Liabilities (26,799)
----------
8,342
- --------------------------------------------------------------------------------
NET ASSETS (100%)
- --------------------------------------------------------------------------------
Applicable to 158,524,270 outstanding
$.001 par value shares
(authorized 250,000,000 shares) $1,894,291
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE $11.95
================================================================================
</TABLE>
+ See Note A to Financial Statements.
For explanations of abbreviations and other references, see page 44.
<TABLE>
- --------------------------------------------------------------------------------
AT FEBRUARY 28, 1995,
NET ASSETS CONSISTED OF:
- --------------------------------------------------------------------------------
Amount Per
(000) Share
---------- ------
<S> <C> <C>
Paid in Capital $1,814,314 $11.44
Undistributed Net
Investment Income -- --
Overdistributed Net
Realized Gains (16,367) (.10)
Unrealized Appreciation of
Investments--Note D 96,344 .61
- --------------------------------------------------------------------------------
NET ASSETS $1,894,291 $11.95
- --------------------------------------------------------------------------------
</TABLE>
35
<PAGE> 52
<TABLE>
<CAPTION>
Face Market
Amount Value
LONG-TERM PORTFOLIO (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS (97.3%)
- --------------------------------------------------------------------------------
ALASKA (1.3%)
Valdez PCR CP
(Arco)
4.20%, 4/11/95 $ 13,700 $ 13,700
----------
- --------------------------------------------------------------------------------
CALIFORNIA (17.5%)
California GO
6.00%, 8/1/24 (1) 20,000 19,754
6.25%, 9/1/12 5,000 5,123
California Public Works
(Community College Project)
7.00%, 3/1/19 5,800 6,049
Contra Costa Transportation Auth.
VRDO 3.90%, 3/8/95 (3) 1,000 1,000
Contra Costa Water Dist.
5.00%, 10/1/24 (1) 23,000 19,747
City of Fresno Sewer
6.25%, 9/1/10 (2) 6,395 6,700
Irvine Assessment Dist. CP
(Irvine County)
4.80%, 3/7/95 (LOC) 10,000 10,000
Los Angeles County COP
6.50%, 3/1/10 21,815 22,108
Metropolitan Water Dist.
5.50%, 7/1/19 39,175 35,979
Sacramento County TRAN
4.50%, 9/29/95 14,870 14,876
San Bernardino COP
(Medical Center Project)
4.75%, 8/1/28 10,425 7,201
5.00%, 8/1/26 15,045 11,003
(Capital Facility Project)
6.875%, 8/1/24 (ETM) 18,000 20,381
----------
STATE TOTAL 179,921
----------
- --------------------------------------------------------------------------------
DELAWARE (.1%)
Delaware Economic Development
Auth. IDR (Cargill)
10.35%, 12/1/99 1,350 1,404
----------
- --------------------------------------------------------------------------------
DISTRICT OF COLUMBIA (2.0%)
District of Columbia GO
VRDO 4.40%, 3/2/95 400 400
6.75%, 6/1/05 (2) 7,540 7,954
7.75%, 6/1/96 (Prere.) 11,970 12,639
----------
STATE TOTAL 20,993
----------
- --------------------------------------------------------------------------------
FLORIDA (1.1%)
Dade County Water & Sewer
System Rev. VRDO
3.95%, 3/8/95 10,855 10,855
----------
- --------------------------------------------------------------------------------
GEORGIA (5.9%)
Burke County PCR VRDO
(Georgia Power) 4.00%, 3/2/95 1,800 1,800
College Park GO (Civic Center)
7.00%, 9/1/10 11,500 12,348
Metropolitan Atlanta Rapid
Transit Auth.
6.25%, 7/1/18 12,170 12,548
6.25%, 7/1/20 (2) 23,275 24,212
Municipal Electric Auth. of Georgia CP
4.25%, 4/6/95 10,000 10,003
----------
STATE TOTAL 60,911
----------
- --------------------------------------------------------------------------------
ILLINOIS (5.3%)
Chicago Metropolitan Water
Capital Improvement
7.00%, 1/1/11 20,000 21,916
Chicago Public Building Comm.
7.00%, 1/1/20 (1) (ETM) 6,000 6,702
Chicago Skyway Toll Bridge
6.50%, 1/1/10 7,750 7,569
Illinois Development Finance
Auth. PCR (Illinois Power Co.)
VRDO 4.00%, 3/8/95 (LOC) 2,300 2,300
7.40%, 12/1/24 (1) 8,150 9,080
Metropolitan Pier & Exposition Auth.
6.75%, 6/1/10 (1) 6,000 6,489
----------
STATE TOTAL 54,056
----------
- --------------------------------------------------------------------------------
INDIANA (2.2%)
Indiana Health Facilities Finance Auth.
(Ancilla System, Inc.)
5.75%, 7/1/15 (1) 4,470 4,229
Indiana State Office Building Comm.
6.90%, 7/1/11 16,875 18,275
----------
STATE TOTAL 22,504
----------
- --------------------------------------------------------------------------------
KENTUCKY (.1%)
Jefferson County Capital Project Corp.
9.375%, 8/15/95 (Prere.) 1,000 1,053
----------
- --------------------------------------------------------------------------------
LOUISIANA (2.7%)
De Soto Parish PCR
(Southwestern Electric Power)
7.60%, 1/1/19 24,300 26,805
Jefferson Parish Single Family
Mortgage Rev.
9.375%, 11/1/07 (3) 515 542
----------
STATE TOTAL 27,347
----------
- --------------------------------------------------------------------------------
</TABLE>
36
<PAGE> 53
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
MASSACHUSETTS (7.4%)
Massachusetts Bay
Transportation Auth.
7.00%, 3/1/21 $ 15,000 $ 17,114
Massachusetts GO
5.75%, 5/1/12 7,500 7,284
6.50%, 8/1/11 5,460 5,682
Massachusetts Housing Finance Agency
6.125%, 11/15/08 3,500 3,555
9.125%, 12/1/20 4,390 4,564
Massachusetts Water Resources Auth.
5.50%, 7/15/22 5,000 4,572
6.50%, 7/15/19 32,000 33,736
----------
STATE TOTAL 76,507
----------
- --------------------------------------------------------------------------------
MICHIGAN (3.1%)
Grand Rapids
(Downtown Project)
6.875%, 6/1/24 (1) 7,500 8,012
Michigan Hosp. Finance Auth.
(Detroit Medical Center)
6.25%, 8/15/13 3,000 2,917
6.50%, 8/15/18 5,000 4,894
Michigan Trunk Line
5.50%, 10/1/21 17,000 15,540
----------
STATE TOTAL 31,363
----------
- --------------------------------------------------------------------------------
MISSISSIPPI (1.1%)
Claiborne County PCR
(Middle South Energy)
9.875%, 12/1/14 10,000 11,434
----------
- --------------------------------------------------------------------------------
NEVADA (1.4%)
Clark County Airport VRDO
3.95%, 3/8/95 (1) 3,930 3,930
Humbolt County PCR
(Idaho Power Co.)
8.30%, 12/1/14 9,100 10,414
----------
STATE TOTAL 14,344
----------
- --------------------------------------------------------------------------------
NEW JERSEY (6.6%)
New Jersey Economic
Development Auth.
5.75%, 7/1/06 (1) 34,165 34,991
New Jersey Health Care
Facilities Auth.
(Atlantic City Medical Center)
6.80%, 7/1/05 4,500 4,713
New Jersey Sports &
Exposition Auth.
VRDO 3.90%, 3/2/95 (1) 100 100
6.50%, 3/1/13 10,000 10,683
New Jersey Turnpike Auth.
6.50%, 1/1/16 16,195 17,010
----------
STATE TOTAL 67,497
----------
- --------------------------------------------------------------------------------
NEW YORK (11.9%)
Babylon Waste Water GO
9.00%, 8/1/08 (3) 4,900 6,546
9.00%, 8/1/09 (3) 2,800 3,743
9.00%, 8/1/10 (3) 4,900 6,590
Erie County Water Auth. VRDO
3.75%, 3/8/95 (2) 1,000 1,000
Metropolitan Transportation Auth.
6.375%, 7/1/18 (1) 7,500 7,697
New York City GO
6.375%, 8/1/04 5,000 4,987
7.10%, 2/1/10 (1) 7,500 8,138
New York City Municipal
Water and Sewer System Rev.
3.90%, 3/2/95 3,000 3,000
New York Medical Care
Facilities Auth.
5.25%, 8/15/07 23,420 21,488
6.875%, 2/15/32 (8) 5,000 5,212
New York State Dormitory Auth.
(City Univ.)
5.75%, 7/1/09 7,930 7,486
(State Univ.)
5.25%, 5/15/21 7,875 6,722
7.50%, 5/15/11 18,900 21,221
New York State and Local Govt.
Assistance Corp.
6.875%, 4/1/19 8,000 8,387
Triborough Bridge & Tunnel Auth.
General Purpose Rev.
6.125%, 1/1/21 10,000 10,123
----------
STATE TOTAL 122,340
----------
- --------------------------------------------------------------------------------
NORTH CAROLINA (1.0%)
North Carolina Eastern
Municipal Power Agency
6.50%, 1/1/18 (ETM) 4,625 4,869
7.50%, 1/1/09 (Prere.) 4,935 5,698
----------
STATE TOTAL 10,567
----------
- --------------------------------------------------------------------------------
OHIO
Columbus Sewer VRDO
3.90%, 3/2/95 500 500
----------
- --------------------------------------------------------------------------------
PENNSYLVANIA (5.1%)
Delaware County Industrial
Development Auth. VRDO
(United Parcel Service)
3.75%, 3/2/95 1,300 1,300
</TABLE>
37
<PAGE> 54
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Pennsylvania Higher Education
Facilities Auth.
(Drexel Univ.)
7.70%, 11/1/95 (1) (Prere.) $ 3,340 $ 3,481
7.70%, 5/1/12 (1) 2,660 2,761
Pennsylvania Housing
Finance Agency
7.50%, 7/1/06 3,890 4,174
Philadelphia Water & Wastewater
7.00%, 6/15/10 (3) 20,000 22,519
Pittsburgh Water & Sewer Auth.
6.50%, 9/1/13 (3) 10,000 10,835
Radnor Township School Auth.
9.875%, 9/15/00 (ETM) 530 623
Sayre Health Care Facility Auth.
VRDO 4.05%, 3/8/95 (2) 6,200 6,200
----------
STATE TOTAL 51,893
----------
- --------------------------------------------------------------------------------
SOUTH CAROLINA (2.2%)
Piedmont Municipal Power Agency
6.15%, 1/1/07 (1) 4,040 4,227
6.20%, 1/1/08 (1) 3,000 3,146
6.50%, 1/1/15 (3) 14,245 15,270
----------
STATE TOTAL 22,643
----------
- --------------------------------------------------------------------------------
TEXAS (11.1%)
Austin Combined Utility System
6.00%, 11/15/13 14,505 14,263
Gulf Coast Waste Disposal
Auth. PCR VRDO (Amoco Oil)
3.70%, 3/2/95 4,300 4,300
Harris County Health Facility
Development Corp. VRDO
(Methodist Hosp.)
3.75%, 3/2/95 10,000 10,000
Houston Public Improvement
7.00%, 3/1/08 5,000 5,581
San Antonio Electric & Gas
5.00%, 2/1/17 14,135 12,252
Texas City IDR (Arco)
7.375%, 10/1/20 17,000 19,259
Texas GO
5.50%, 4/1/20 15,000 13,904
Texas TRAN
5.00%, 8/31/95 10,000 10,030
Texas Water Development Board
6.50%, 7/15/10 17,425 18,489
7.05%, 8/1/25 5,655 6,064
----------
STATE TOTAL 114,142
----------
- --------------------------------------------------------------------------------
WASHINGTON (3.1%)
Washington Dept. of Ecology
COP 5.00%, 4/1/16 27,820 23,919
Washington GO
5.50%, 5/1/18 4,000 3,732
6.75%, 2/1/15 3,450 3,786
----------
STATE TOTAL 31,437
----------
- --------------------------------------------------------------------------------
WEST VIRGINIA (1.0%)
West Virginia State Building Comm.
7.00%, 7/1/14 (1) 8,975 10,070
----------
- --------------------------------------------------------------------------------
WISCONSIN (3.2%)
Wisconsin Clean Water Rev.
6.875%, 6/1/11 20,500 22,411
Wisconsin GO
6.25%, 5/1/09 10,000 10,569
----------
STATE TOTAL 32,980
----------
- --------------------------------------------------------------------------------
WYOMING (.9%)
Lincoln PCR VRDO (Exxon)
3.90%, 3/2/95 3,400 3,400
Sublette County PCR VRDO
3.90%, 3/2/95 5,500 5,500
----------
STATE TOTAL 8,900
----------
- --------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(Cost $959,521) 999,361
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (2.7%)
- --------------------------------------------------------------------------------
Other Assets--Note B 30,872
Liabilities (3,227)
----------
27,645
- --------------------------------------------------------------------------------
NET ASSETS (100%)
- --------------------------------------------------------------------------------
Applicable to 98,176,519 outstanding
$.001 par value shares
(authorized 250,000,000 shares) $1,027,006
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE $10.46
================================================================================
</TABLE>
+ See Note A to Financial Statements.
For explanations of abbreviations and other references, see page 44.
38
<PAGE> 55
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AT FEBRUARY 28, 1995,
NET ASSETS CONSISTED OF:
- --------------------------------------------------------------------------------
Amount Per
(000) Share
---------- ------
<S> <C> <C>
Paid in Capital $1,001,183 $10.20
Undistributed Net
Investment Income -- --
Overdistributed Net
Realized Gains (13,904) (.14)
Unrealized Appreciation of
Investments--Note D 39,727 .40
- --------------------------------------------------------------------------------
NET ASSETS $1,027,006 $10.46
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Face Market
Amount Value
HIGH-YIELD PORTFOLIO (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS (98.7%)
- --------------------------------------------------------------------------------
ALABAMA (.3%)
Huntsville Health Care Auth.
Rev. VRDO
4.10%, 3/2/95 (1) $ 4,400 $ 4,400
----------
- --------------------------------------------------------------------------------
ALASKA (1.6%)
Alaska Housing Finance
Corp. VRDO
3.85%, 3/8/95 16,300 16,300
4.00%, 3/8/95 1,500 1,500
North Slope Borough GO
7.50%, 6/30/01 2,500 2,766
Valdez Marine Terminal
Rev. VRDO
(Exxon Pipe Project)
3.90%, 3/2/95 7,000 7,000
----------
STATE TOTAL 27,566
----------
- --------------------------------------------------------------------------------
ARIZONA (2.0%)
Board of Regents
(Univ. of Arizona)
6.20%, 6/1/16 26,660 28,050
Pima County Industrial
Development Auth.
(La Cholla Project)
8.50%, 7/1/20 6,650 6,383
----------
STATE TOTAL 34,433
----------
- --------------------------------------------------------------------------------
ARKANSAS (.2%)
North Little Rock Electric System
6.50%, 7/1/15 (1) 3,450 3,766
----------
- --------------------------------------------------------------------------------
CALIFORNIA (13.1%)
California GO
5.50%, 3/1/20 (4) 12,875 11,813
6.00%, 8/1/19 (3) 17,125 16,929
California Health Facilities
Auth. VRDO
3.85%, 3/8/95 (1) 2,600 2,600
California Public Works
(Community College Project)
7.00%, 3/1/14 14,275 14,973
7.00%, 3/1/19 18,000 18,771
(Univ. Project)
6.40%, 12/1/16 (2) 6,650 6,824
Contra Costa Transportation
Auth. Sales Tax VRDO
3.90%, 3/8/95 (3) 4,400 4,400
Irvine Ranch Water Dist. VRDO
4.20%, 3/2/95 3,900 3,900
</TABLE>
39
<PAGE> 56
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Metropolitan Water Dist. of
Southern California
5.00%, 7/1/20 $ 6,400 $ 5,446
5.50%, 7/1/19 2,000 1,837
6.625%, 7/1/12 3,000 3,109
Orange County Apartment
Development Rev. CP
5.50%, 3/7/95 (LOC) 15,000 15,000
Orange County Sanitation
Dist. VRDO
4.15%, 3/2/95 (LOC) 1,010 1,010
4.75%, 3/2/95 (2)(LOC) 15,000 15,000
Orange County Water Dist. VRDO
4.15%, 3/2/95 (LOC) 14,000 14,000
San Bernardino County COP
5.50%, 8/1/19 11,400 9,286
5.50%, 8/1/24 14,295 11,427
6.875%, 8/1/24 (ETM) 25,220 28,556
7.00%, 8/1/20 12,180 12,022
San Bernardino County TRAN
4.50%, 7/31/95 7,500 7,478
San Joaquin Hills Transportation Agency
0.00%, 1/1/01 7,340 4,939
0.00%, 1/1/02 14,000 8,737
Santa Clara County Finance Auth. VRDO
3.95%, 3/8/95 1,200 1,200
Southern California Public Power Auth.
5.50%, 7/1/20 7,700 6,880
6.00%, 7/1/18 3,985 3,830
----------
STATE TOTAL 229,967
----------
- --------------------------------------------------------------------------------
COLORADO (.7%)
Colorado Health Facilities Auth.
(St. Luke's Healthcare)
8.50%, 2/15/21 10,950 11,762
----------
- --------------------------------------------------------------------------------
CONNECTICUT
Connecticut Development Auth.
PCR VRDO
(Connecticut Light & Power)
3.95%, 3/8/95 (LOC) 700 700
----------
- --------------------------------------------------------------------------------
DISTRICT OF COLUMBIA (2.5%)
District of Columbia
GO VRDO
4.40%, 3/2/95 5,000 5,000
Metropolitan Washington
Airport Auth.
5.50%, 10/1/24 (1) 23,825 21,515
5.875%, 10/1/15 (1) 17,600 17,038
----------
STATE TOTAL 43,553
----------
- --------------------------------------------------------------------------------
FLORIDA (3.7%)
Cape Coral Health Facilities Auth.
(Cape Coral Medical Center)
7.50%, 11/15/21 22,000 22,649
Dade County Water &
Sewer Rev. VRDO
3.95%, 3/8/95 (3) 26,195 26,195
Gulf Breeze Local Govt.
Loan Program
4.00%, 3/2/95 (3) 1,575 1,575
Lee County Hosp. CP
4.20%, 4/12/95 (LOC) 7,000 7,000
Orlando Utilities Comm.
6.75%, 10/1/17 2,200 2,446
Tarpon Springs Health Facility Auth.
(Tarpon Springs Hosp.)
8.75%, 5/1/12 4,000 4,216
----------
STATE TOTAL 64,081
----------
- --------------------------------------------------------------------------------
GEORGIA (1.7%)
Burke County PCR VRDO
(Georgia Power Co.)
3.75%, 3/2/95 2,500 2,500
Cartersville Water & Wastewater
Facilities (Anheuser-Busch)
7.40%, 11/1/10 5,000 5,526
Municipal Electric Auth. of Georgia
6.60%, 1/1/18 5,000 5,350
Savannah Hosp. Auth. Rev.
(Candler Hosp.)
7.00%, 1/1/23 13,000 12,507
Tri-City Hosp. Auth. Rev.
6.375%, 7/1/16 4,950 4,072
----------
STATE TOTAL 29,955
----------
- --------------------------------------------------------------------------------
ILLINOIS (6.2%)
Chicago Public Building Comm.
7.00%, 1/1/15 (1) (ETM) 9,000 10,035
7.00%, 1/1/20 (1) (ETM) 10,000 11,170
Chicago Skyway Toll Bridge
6.75%, 1/1/14 10,000 9,925
6.75%, 1/1/17 4,000 3,919
Cook County GO
6.60%, 11/15/22 (1) 12,000 12,371
Illinois Development Finance Auth.
PCR (Illinois Power Co.)
7.40%, 12/1/24 (1) 20,000 22,283
Illinois Development Finance Auth.
(Regency Park Project)
10.25%, 4/15/19 6,500 4,875
10.625%, 4/15/20 6,000 4,500
</TABLE>
40
<PAGE> 57
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Illinois Health Facilities Auth.
(United Medical Center)
8.125%, 7/1/03 (Prere.) $ 3,085 $ 3,596
Illinois Health Facilities Auth.
Certificate of Beneficial Interest
(Adventist Living Centers)** 770 170
Illinois Toll Highway Auth.
6.30%, 1/1/11 5,000 5,126
Loves Park First Mortgage
(Hoosier Care)
9.75%, 8/1/19 1,570 1,675
Robbins Resources Recovery
Project Rev.
9.25%, 10/15/14 18,000 19,146
----------
STATE TOTAL 108,791
----------
- --------------------------------------------------------------------------------
INDIANA (3.5%)
Indiana Health Facilities Finance
Auth. (Ancilla System Inc.)
7.375%, 7/1/23 19,400 19,397
Indiana State Office Building Comm.
6.90%, 7/1/11 15,660 16,960
Indianapolis Local Public
Improvement Bond Bank
6.75%, 2/1/14 21,500 22,830
6.75%, 2/1/20 2,500 2,554
----------
STATE TOTAL 61,741
----------
- --------------------------------------------------------------------------------
KANSAS (1.0%)
Burlington PCR CP
(Kansas Power & Light)
4.15%, 4/7/95 (LOC) 16,600 16,600
----------
- --------------------------------------------------------------------------------
KENTUCKY (.3%)
Ashland PCR VRDO
3.75%, 3/2/95 2,900 2,900
Kentucky Property & Buildings Comm.
5.80%, 9/1/06 3,100 3,109
----------
STATE TOTAL 6,009
----------
- --------------------------------------------------------------------------------
LOUISIANA (.3%)
West Feliciana Parish PCR
(Gulf States Utilities)
9.00%, 5/1/15 4,000 4,478
----------
- --------------------------------------------------------------------------------
MARYLAND (1.0%)
Hagerstown Energy Finance
Administration Recycling Rev.
(Hagerstown Fiber Project)
9.00%, 10/15/16 17,500 18,201
----------
- --------------------------------------------------------------------------------
MASSACHUSETTS (9.3%)
Massachusetts GO
5.25%, 2/1/08 35,575 33,873
6.00%, 6/1/11 14,750 14,733
Massachusetts Housing
Finance Agency
6.375%, 4/1/21 19,000 18,914
Massachusetts Industrial
Finance Agency
(Massachusetts Recycling Assoc.)
9.00%, 8/1/16 17,000 17,632
(Refusetech Inc. Project)
6.30%, 7/1/05 11,900 11,854
Massachusetts Water
Resources Auth.
5.50%, 7/15/22 22,420 20,500
6.50%, 7/15/19 43,700 46,071
----------
STATE TOTAL 163,577
----------
- --------------------------------------------------------------------------------
MICHIGAN (5.8%)
Dickinson County Memorial Hosp.
System Rev.
7.625%, 11/1/05 1,150 1,193
8.00%, 11/1/14 5,700 5,936
Michigan Hosp. Finance Auth. Rev.
(Genesys Health System)
7.50%, 10/1/27 5,620 5,466
8.10%, 10/1/13 5,000 5,155
8.125%, 10/1/21 15,000 15,348
Michigan Housing Development Auth.
6.30%, 4/1/04 6,900 7,038
Michigan Public Power Agency
(Belle River Project)
5.50%, 1/1/13 46,595 44,109
Michigan Trunk Line
5.50%, 10/1/21 18,500 16,911
----------
STATE TOTAL 101,156
----------
- --------------------------------------------------------------------------------
MINNESOTA (.3%)
Washington County Housing &
Redevelopment Auth.
(Woodland Park Project)
0.00%, 5/1/20 35,070 1,236
9.75%, 5/1/20 5,000 3,850
----------
STATE TOTAL 5,086
----------
- --------------------------------------------------------------------------------
MISSISSIPPI (2.0%)
Claiborne County PCR
(Middle South Energy)
9.50%, 4/1/16 5,000 5,326
9.875%, 12/1/14 21,000 24,011
12.50%, 6/15/15 2,000 2,099
</TABLE>
41
<PAGE> 58
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Jackson County Port Facilities
VRDO (Chevron)
3.90%, 3/2/95 $ 4,150 $ 4,150
----------
STATE TOTAL 35,586
----------
- --------------------------------------------------------------------------------
NEW HAMPSHIRE (.3%)
New Hampshire Health &
Higher Education
(Catholic Medical Center)
6.00%, 7/1/17 6,580 5,663
----------
- --------------------------------------------------------------------------------
NEW JERSEY (4.1%)
New Jersey Economic
Development Auth. VRDO
(New Jersey American Water Co.)
3.55%, 3/8/95 (3) 3,400 3,400
New Jersey Sports &
Exposition Auth.
6.50%, 3/1/13 15,000 16,024
New Jersey TRAN
5.00%, 6/15/95 5,000 5,011
New Jersey Turnpike Auth.
6.50%, 1/1/16 44,340 46,573
----------
STATE TOTAL 71,008
----------
- --------------------------------------------------------------------------------
NEW YORK (11.4%)
Glencove Industrial
Development Auth.
(Regency at Glencove Project)
9.50%, 7/1/12 10,000 10,320
Metropolitan Transit Auth.
5.75%, 7/1/15 16,545 15,206
6.375%, 7/1/20 (1) 25,690 26,301
7.375%, 7/1/08 22,870 25,260
New York City GO
VRDO 3.95%, 3/2/95 (LOC) 1,700 1,700
5.75%, 8/15/08 10,000 9,228
New York City Municipal Water Auth.
5.50%, 6/15/20 25,000 22,807
New York City RAN
4.50%, 4/12/95 2,895 2,896
New York City VRDO
4.05%, 3/2/95 (LOC) 3,800 3,800
New York Medical Care Facilities
5.25%, 2/15/07 8,700 7,981
5.25%, 2/15/08 11,875 10,708
New York State Dormitory Auth.
(City Univ.) 6.375%, 7/1/08 3,150 3,219
7.50%, 7/1/10 5,500 6,154
(State Univ.)
5.375%, 5/15/07 (2) 2,100 2,073
7.50%, 5/15/13 10,250 11,522
New York State Housing
Finance Agency 5.625%, 3/15/09 10,435 9,656
New York State Local Govt.
Assistance Corp.
7.00%, 4/1/10 4,320 4,571
Triborough Bridge & Tunnel Auth.
(Convention Center Project)
7.25%, 1/1/10 13,500 14,751
(General Purpose Rev.)
5.00%, 1/1/17 3,000 2,621
5.50%, 1/1/17 10,000 9,337
----------
STATE TOTAL 200,111
----------
- --------------------------------------------------------------------------------
NORTH CAROLINA (.9%)
North Carolina Eastern Municipal
Power Agency
5.00%, 1/1/20 (ETM) 10,385 9,004
6.50%, 1/1/18 6,665 7,016
----------
STATE TOTAL 16,020
----------
- --------------------------------------------------------------------------------
OHIO (1.3%)
Columbus Electric VRDO
3.85%, 4/3/95 (LOC) 1,000 1,000
Columbus Sewer Rev. VRDO
3.90%, 3/2/95 7,000 7,000
Cuyahoga County Hosp. VRDO
(St. Luke's Hosp.)
4.25%, 3/8/95 (LOC) 3,995 3,995
Lucas County Hosp. Facility
(Flower Memorial Hosp.)
8.125%, 12/1/11 8,900 9,385
Ohio Student Loan VRDO
4.00%, 3/8/95 1,100 1,100
----------
STATE TOTAL 22,480
----------
- --------------------------------------------------------------------------------
OKLAHOMA (1.0%)
Jackson County Memorial Hosp. Auth.
(Jackson Memorial)
6.75%, 8/1/04 4,700 4,467
7.30%, 8/1/15 4,000 3,805
Oklahoma Industrial Development
Auth. Hosp. Rev. CP
(Baptist Medical Center)
4.20%, 5/9/95 10,000 10,000
----------
STATE TOTAL 18,272
----------
- --------------------------------------------------------------------------------
</TABLE>
42
<PAGE> 59
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
OREGON
Oregon GO VRDO
4.05%, 3/8/95 $ 400 $ 400
----------
- --------------------------------------------------------------------------------
PENNSYLVANIA (12.8%)
Delaware County Industrial
Development Auth. VRDO
(United Parcel Service)
3.75%, 3/2/95 3,800 3,800
Langhorne Higher Education
& Health Auth.
(Lower Bucks Hosp.)
7.30%, 7/1/12 4,500 4,275
7.35%, 7/1/22 2,500 2,318
Montgomery County Higher Education
& Health Auth.
(Brittany Point Project)
8.50%, 1/1/22 5,000 5,236
Pennsylvania Convention
Center Auth.
6.60%, 9/1/09 2,500 2,436
6.70%, 9/1/14 2,500 2,403
6.75%, 9/1/19 6,600 6,282
Pennsylvania COP
5.40%, 7/1/08 (2) 15,000 14,678
5.40%, 7/1/09 (2) 25,000 24,293
Pennsylvania Economic
Development Auth.
(Colver Project)
7.05%, 12/1/10 2,500 2,533
7.125%, 12/1/15 16,000 16,143
Pennsylvania Housing
Finance Agency
7.60%, 7/1/13 10,000 10,681
Pennsylvania Turnpike Comm.
5.50%, 12/1/17 17,735 16,311
Philadelphia Hosp. & Higher
Education Facilities
(Childrens Seashore Hosp.)
7.00%, 8/15/12 3,540 3,584
7.00%, 8/15/17 1,000 1,013
7.00%, 8/15/22 500 507
(Graduate Hosp.)
7.25%, 7/1/10 15,000 15,139
(Methodist Hosp.)
7.75%, 7/1/23 12,290 11,875
(Roxborough Memorial Hosp.)
7.25%, 3/1/24 10,000 9,004
Philadelphia Municipal Auth.
6.125%, 7/15/08 4,000 3,857
6.25%, 7/15/13 2,785 2,584
6.30%, 7/15/17 1,750 1,609
8.625%, 11/15/16 1,600 1,726
Philadelphia Water & Sewer Rev.
9.10%, 10/1/95 (Prere.) 6,250 6,542
9.10%, 12/1/95 (Prere.) 9,650 10,172
Philadelphia Water &
Wastewater Rev.
5.50%, 6/15/14 (5) 5,650 5,304
7.00%, 6/15/11 (3) 21,500 24,194
Sayre Health Care Facility Auth.
VRDO 4.05%, 3/8/95 (2) 900 900
Scranton-Lackawanna Health &
Welfare (Moses Taylor Hosp.)
8.50%, 7/1/20 14,375 14,681
----------
STATE TOTAL 224,080
----------
- --------------------------------------------------------------------------------
RHODE ISLAND (.3%)
Convention Center Auth.
5.75%, 5/15/20 (2) 5,000 4,720
----------
- --------------------------------------------------------------------------------
SOUTH CAROLINA (.4%)
Piedmont Municipal Power
Agency Rev.
6.25%, 1/1/21 (3) 6,640 6,803
----------
- --------------------------------------------------------------------------------
TEXAS (6.3%)
Austin Water, Sewer &
Electric Rev.
14.00%, 11/15/01 200 288
Brazos River Auth. PCR
(Texas Utilities)
9.875%, 10/1/17 (3) 20,000 22,368
Harris County Health Facility
Development Corp. VRDO
(Methodist Hosp.)
3.75%, 3/2/95 7,600 7,600
(St. Luke's Hosp.)
3.75%, 3/2/95 4,200 4,200
Harris County Hosp. Dist.
7.40%, 2/15/10 (2) 17,500 20,123
Harris County Toll Road VRDO
4.00%, 3/8/95 10,000 10,000
6.25%, 8/15/15 (1) 5,000 5,102
San Antonio Electric & Gas Rev.
5.00%, 2/1/17 3,500 3,034
Texas GO
5.50%, 4/1/20 40,050 37,125
----------
STATE TOTAL 109,840
----------
- --------------------------------------------------------------------------------
VIRGINIA (.8%)
Alexandria Redevelopment &
Housing Auth.
(Portals West Project)
9.50%, 7/15/20 4,740 3,318
</TABLE>
43
<PAGE> 60
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Chesterfield County Mortgage Rev.
(Brandermill Woods Project)
0.00%, 7/1/17 $ 2,600 $ 52
0.00%, 7/1/18 2,600 52
0.00%, 7/1/19 2,600 52
0.00%, 7/1/20 2,600 52
0.00%, 7/1/21 2,600 52
10.25%, 7/1/15 8,000 4,800
10.625%, 7/1/16 10,400 6,240
----------
STATE TOTAL 14,618
----------
- --------------------------------------------------------------------------------
WASHINGTON (3.1%)
Port of Seattle GO
5.75%, 5/1/14 15,600 14,750
Snohomish County Public
Utility Dist.
5.50%, 1/1/20 (3) 43,710 39,344
----------
STATE TOTAL 54,094
----------
- --------------------------------------------------------------------------------
WEST VIRGINIA (.5%)
West Virginia State Building Comm.
7.00%, 7/1/13 (1) 8,390 9,435
----------
- --------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(Cost $1,693,934) 1,728,952
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (1.3%)
- --------------------------------------------------------------------------------
Other Assets--Note B 40,753
Liabilities (17,383)
----------
23,370
- --------------------------------------------------------------------------------
NET ASSETS (100%)
- --------------------------------------------------------------------------------
Applicable to 171,609,813 outstanding
$.001 par value shares
(authorized 250,000,000 shares) $1,752,322
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE $10.21
================================================================================
</TABLE>
+ See Note A to Financial Statements.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AT FEBRUARY 28, 1995,
NET ASSETS CONSISTED OF:
- --------------------------------------------------------------------------------
Amount Per
(000) Share
---------- ------
<S> <C> <C>
Paid in Capital $1,738,111 $10.13
Undistributed Net
Investment Income -- --
Accumulated Net
Realized Losses (20,807) (.12)
Unrealized Appreciation of
Investments--Note D 35,018 .20
- --------------------------------------------------------------------------------
NET ASSETS $1,752,322 $10.21
- --------------------------------------------------------------------------------
</TABLE>
BAN = Bond Anticipation Note
COP = Certificate of Participation
CP = Commercial Paper
GO = General Obligation
IDR = Industrial Development Revenue
PCR = Pollution Control Revenue
RAN = Revenue Anticipation Note
RAW = Revenue Anticipation Warrant
TAN = Tax Anticipation Note
TOB = Tender Option Bond
TRAN = Tax Revenue Anticipation Note
VRDO = Variable Rate Demand Obligation
(ETM) = Escrowed to Maturity
(Prere.) = Prerefunded
*Put Option Obligation.
**Non-Income Producing Security.
Scheduled principal and interest payments are guaranteed by:
(1) MBIA (Municipal Bond Insurance Association)
(2) AMBAC (AMBAC Indemnity Corporation)
(3) FGIC (Financial Guaranty Insurance Company)
(4) FSA (Financial Security Assurance)
(5) CGI (Capital Guaranty Insurance)
(6) BIGI (Bond Investors Guaranty Insurance)
(7) Connie Lee Inc.
(8) FHA (Federal Housing Authority)
The insurance does not guarantee the market value of the municipal bonds.
(LOC) = Scheduled principal and interest payments are guaranteed by bank letter
of credit.
44
