<PAGE> 1
A MESSAGE TO SHAREHOLDERS
FELLOW SHAREHOLDER:
The six months ended February 29, the first half of the 1996 fiscal year for
Vanguard Municipal Bond Fund, witnessed steadily declining interest rates from
September through December, only to see rates reverse course and rise sharply
in January and February. On balance over the entire six-month period, interest
rates declined slightly and municipal bonds of all maturities provided positive
returns.
In this environment, the net asset values of the Fund's seven
Portfolios increased, as reflected in the table on page 3. (The net asset
value of the Money Market Portfolio, as you would expect, remained constant at
$1.00 per share, although this price is neither guaranteed nor insured.) The
dimension of each Portfolio's price appreciation varied in proportion to its
maturity, with the longer-term Portfolios providing larger increases than the
shorter-term Portfolios. In addition, the table also shows the current yield,
average quality, and dividend and capital gains distribution of each Portfolio.
As you know, share price appreciation accounts for only part of the
total return of our Portfolios. Over time, the primary component of return has
come from a fund's interest income. During our Semi-Annual period ended
February 29, 1996, the Portfolios' total returns (change in net asset value
plus six month's income) ranged from +2.2% for the Short-Term Portfolio to
+5.8% for the Long-Term Portfolio. The returns of the remaining Portfolios
varied roughly in proportion to each Portfolio's maturity. (The Money Market
Portfolio, which had no price appreciation, provided a return of +1.8%.)
During the past six months, the yield on high-grade, long-term
tax-exempt bonds dropped from 5.9% on August 31, 1995, to 5.3% by calendar year
end, and then rose to 5.5% by February 29, 1996--the net result being a price
increase of about +5% for the full period. The change was similar in direction
but not in dimension on the short end of the tax-exempt spectrum, with
high-quality, short-term municipal yields declining from 4.2% to 4.0% and then
rising back to 4.1%. As is often the case, the longer maturity bonds exhibited
the highest degree of principal volatility in addition to offering higher
yields.
Shareholders who wish to capture higher yields than those provided by
money market portfolios, while also minimizing the risks associated with net
asset value swings, might consider selecting either the Short-Term or
Limited-Term Portfolio. Both of these Portfolios produce enhanced income with
only a modest increase in principal risk. On the other hand, investors with
longer time horizons who are willing to ride out the swings in price might
consider one of our longer-term Portfolios in order to reap the benefits of a
higher yield and increased income durability.
Six months ago in our 1995 Annual Report, we pointed out that
potential changes in the Federal income tax structure had negatively impacted
the prices of municipal securities, since a "flat tax" would benefit taxable
bonds more so than their municipal brethren. The potential loss of municipal
bonds' tax-exempt advantage forced the yield on 20-year municipal bonds to 93%
of the comparable yield on 20-year taxable bonds. Since then, the potential for
passage of damaging tax legislation has diminished, and the yield differential
between taxable and tax-exempt bonds has declined to 89%, which is in line with
its average over the past five years.
More recently, the news in the municipal bond market has shifted away
from government legislation and focused on credit quality and default risk. We
are pleased to report that all seven of our Portfolios adhere to uncompromising
quality standards. Vanguard Municipal Bond Fund not only holds the
highest-quality bonds available (as you can see in the table that follows this
letter), but in many instances our bonds are protected with letters-of-credit
from leading banks. (In our Insured Long-Term Portfolio, insurance on
individual bonds provides an important additional enhancement to our quality,
as evidenced by its Aaa average quality, the highest rating of any of our
longer-term portfolios.) While there is no guarantee that any individual
holding won't unexpectedly fall from grace, we do everything possible to
minimize the possibility of such an occurrence.
(continued)
1
<PAGE> 2
This emphasis on quality has been, and will continue to be, a
fundamental part of the Fund's investment philosophy. Why? Holding all other
factors equal, the expense ratio advantage of Vanguard Municipal Bond Fund
(0.2% for the Fund versus 0.9% for the average competitive fund) provides a
savings of 0.7% per year for Vanguard shareholders. Since this cost advantage
gives us a "natural" yield advantage over our peers, there is no incentive for
our portfolio managers to venture into riskier bonds to enhance yields. In
short, our overall credit quality is unsurpassed among our peers in the
industry.
Although the Semi-Annual period has been favorable to Vanguard
Municipal Bond Fund shareholders, interest rates and financial markets
continually fluctuate, as the recent difficulties of the past two months have
demonstrated. In the long run, however, remember that the interest component of
the total return equation is the dominant variable. So, "staying the course" is
often the best long-term strategy.
We look forward to reporting to you on the full year's results, six
months from now in our 1996 Annual Report.
Sincerely,
/s/ JOHN C. BOGLE
- -------------------------
John C. Bogle
Chairman of the Board
/s/ JOHN J. BRENNAN
- ------------------------
John J. Brennan
President
March 22, 1996
Note: Mutual fund data from Lipper Analytical Services, Inc.
2
<PAGE> 3
PORTFOLIO STATISTICS
<TABLE>
<CAPTION>
Net Asset Value
Per Share SEC
-------------------------------- 12-Month Total Return Current
Average Average February August February Income ------------------- Annualized
Portfolio Maturity Quality 28, 1995 31, 1995 29, 1996 Dividends 6-Month 12-Month Yield*
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SHORTER-TERM
MONEY MARKET 61 DAYS MIG 1 $ 1.00 $ 1.00 $ 1.00 $.037 +1.8% + 3.7% 3.24%
SHORT-TERM 458 DAYS AA1 15.45 15.59 15.63 .616 +2.2 + 5.2 3.30
LIMITED-TERM 3.2 YEARS AA2 10.52 10.71 10.76 .486 +2.7 + 7.0 3.76
- ----------------------------------------------------------------------------------------------------------------------------------
LONGER-TERM
INTERMEDIATE-TERM 7.1 YEARS AA2 $12.83 $13.14 $13.35** $.676 +4.2% + 9.5% 4.26%
INSURED LONG-TERM 12.6 YEARS AAA 11.95 12.12 12.46 .670 +5.6 +10.1 4.82
LONG-TERM 12.2 YEARS AA2 10.46 10.68 11.00 .597 +5.8 +11.1 4.93
HIGH-YIELD 12.3 YEARS A1 10.21 10.43 10.65 .607 +5.0 +10.5 5.34
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Yield for Money Market Portfolio is a 7-day yield. All others are 30-day
yields.
**Includes a capital gains distribution of $.009. Net asset value after capital
gains distribution is $13.34.
AVERAGE ANNUAL TOTAL RETURNS--THE AVERAGE ANNUAL TOTAL RETURNS FOR THE
PORTFOLIOS (PERIODS ENDED DECEMBER 31, 1995) 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 + 3.75% +3.30% +4.30% +4.30% 0.00%
SHORT-TERM 9/1/77 + 5.92 +4.65 +5.40 +4.98 +0.42
LIMITED-TERM 8/31/87 + 8.57 +6.11 +6.58* +5.52* +1.06*
INTERMEDIATE-TERM 9/1/77 +13.65 +8.66 +8.79 +6.60 +2.19
INSURED LONG-TERM 9/30/84 +18.60 +9.23 +9.45 +7.01 +2.44
LONG-TERM 9/1/77 +18.72 +9.51 +9.53 +7.09 +2.44
HIGH-YIELD 12/27/78 +18.13 +9.76 +9.65 +7.36 +2.29
</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.
3
<PAGE> 4
REPORT FROM THE INVESTMENT ADVISER
THE CALM BEFORE . . .
The fiscal six-month period ended February 29, 1996, could be described as a
relatively tranquil and benign interval, particularly when using the bond
market's beginning and ending "snapshots." Interest rates declined moderately
over the entire spectrum of bond maturities by about -0.2 to -0.4 percentage
points, producing principal (capital) appreciation ranging from 3%-6% for
long-term bonds, to 1%-3% for intermediate-term bonds, to 0%-1% for money
market and short-term notes.
The seven Portfolios of Vanguard Municipal Bond Fund participated
fully, commensurate with their general interest rate risk exposure, in the
rally that lifted municipal bond prices. These percentage changes in net asset
value are one of the two components of "total return," the other being interest
income. Our ongoing objective is to maximize your total returns, consistent
with the Portfolio-specific risk guidelines detailed in the Fund's prospectus.
Typically, and especially over the long haul, the bulk of total return is the
interest income portion. The respective total returns for the seven Portfolios
are given in the table following the Message to Shareholders.
The last six months was certainly a welcome continuation of the
previous 12 months (covered in our 1995 Annual Report) at least in direction,
if not in magnitude. Indeed, the frothy bond rally in 1995 occurred mostly
during the months preceding the beginning of our new fiscal year. As calendar
1995 drew to a close, the ebullient bond rally seemed to be running a bit out
of steam. In 1996, during the fading days of winter, market participants began
to wonder whether the confluence of favorable economic factors would remain in
place. Of particular interest to investors was the likelihood of additional
monetary accommodation on the part of the Federal Reserve Board policymakers.
Many market participants were pinning their hopes on several additional
"easing" initiatives by the Fed through their orchestration of open market
operations to pump additional monetary reserves into the economy. Such
activities promote and facilitate lower short-term interest rates and, at the
margin, stimulate incremental borrowing in the private sector of the economy.
Federal Reserve easing is often (but not always) associated with
declines in long-term interest rates because such easing coincides with periods
of low inflation and substandard economic growth, both of which help bolster
investors' desire to hold bonds. Consequently, bond market participants were
generally happy to see the inflation statistics released in January, February,
and March (all low), and the anemic levels of consumption and production
reported by the various government agency statistical services. Expectations of
two or more easing initiatives were so widespread that they became "built-in"
to the prevailing level of interest rates. The fiscal six-month period ended
just a few days before these expectations--and the markets in general--came to
a rude awakening.
. . . THE HICCUP
The economic numbers released in December and January were especially hard-hit
owing to the temporary shutdown of much of the Federal government workforce (a
consequence of Congressional/Administration wrangling over the debt ceiling), a
strike at Boeing, and the blizzards that dumped a record amount of snow in the
northeast region. Over this interval, consumers in many parts of the country
postponed their purchases of goods and services; however, as the weather
moderated, some of this deferred consumption resumed, and during the waning
days of February, the balance of economic indicators began to shift away from
weakness and more toward a healthier expansion.
Then, on March 8, 1996, the Labor Department announced that the
unemployment rate fell 0.3% to 5.5% and that non-farm payrolls had grown by
705,000 jobs, a number so great we haven't seen its like since 1983. Such
astonishing strength in employment (and the sharp reversal from previous
weakness) startled investors back into the belief that the Fed not only would
refrain from easing again, but that they might reverse course and tighten
monetary policy. The Federal Reserve policymakers put credence in the belief
that the economy can only grow so robustly before labor shortages force up the
cost of labor and thereby, inflation.
4
<PAGE> 5
Economists argue over exactly how much robust growth is too much, but
a consensus has formed around the 2% to 2.5% annual rate of growth as being
acceptable, sustainable, and non-inflationary. What the March 8 announcement
did was to at least temporarily shock investors into the belief that the
economy was growing well above the "safe" annual rate. There was an immediate
negative reaction in the bond markets (mirrored almost exactly in the equity
markets) that sent municipal interest rates back up to where they were at the
beginning of this fiscal year.
Thus, six-months-worth of price appreciation was wiped out in a few
trading days. It is impossible to say with certainty whether the economy really
has reaccelerated sharply, but we believe it has not. If so, then the recent
backup in interest rates should prove to be a brief and inconsequential
"hiccup."
A NOTE ON TAX REFORM AND . . .
The prospects of a flat tax that will eliminate the special exemption of
municipal bond interest income (by broadening the exemption to include
currently taxable bonds) continue to affect the market for municipal bonds.
Investors have only to turn on the television to see one or more Republican
Presidential candidates running on a flat-tax platform. Most of the media
attention regarding flat taxes has been focused on a single candidate (Steven
Forbes) who, as of this writing, is dropping out of the race. Nonetheless, his
unremitting emphasis on a flat tax keeps it "in the spotlight" and his
political fortunes can be viewed as a referendum on its popular appeal. Since
his low popularity did not turn around, the primary voting public cast an
unambiguous ballot in favor of other candidates and other issues. This waning
popularity of flat-tax candidates suggests the flat tax is less likely to
appear as a pressing platform theme in the front-runner's (Robert Dole)
upcoming candidacy for the Presidency.
Our opposition to the flat tax does not arise from the belief that it
would stimulate savings and investment--such activities, if they actually
occur, are most desirable. Rather, we cannot envision a way to eliminate the
special treatment of municipal bond interest without dramatically and adversely
affecting the price of outstanding municipal bonds. We have long stated our
belief that meaningful flat-tax reform was and is only a remote possibility.
Fortunately, recent political events further bolster that conviction, and bode
well for the imminent recovery of municipal bond value vis-a-vis the taxable
bond market. The flat-tax champion has taken his message to the people and
failed to garner a meaningful vote of confidence from the electorate. Some
dangers remain, owing to factions in Congress that zealously desire tax reform;
however, the risks of legislation that will severely damage municipal bonds
have lessened since our last letter.
A NOTE ON EXPENSES . . .
Your Vanguard Municipal Bond Fund Portfolios carry some of the lowest expenses
in the industry. This expense ratio advantage will produce either higher
Portfolio average quality at the same yield as competitors' funds, higher yield
than competitors at approximately the same average Portfolio quality, or a
combination of higher yield and quality. It is an enduring advantage that they
will find difficult to overcome. Obviously, it enhances our effectiveness as
well as your returns, particularly during these times when interest rates are
historically low.
Sincerely,
Ian A. MacKinnon, Senior Vice President
Jerome J. Jacobs, Principal
Pamela E. Tynan, Principal
David E. Hamlin, Principal
Christopher M. Ryon, Principal
Vanguard Fixed Income Group
March 12, 1996
5
<PAGE> 6
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
MONEY MARKET SHORT-TERM LIMITED-TERM
PORTFOLIO PORTFOLIO PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------------
Six Months Ended Six Months Ended Six Months Ended
February 29, 1996 February 29, 1996 February 29, 1996
(000) (000) (000)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME
Interest . . . . . . . . . . . . . . $77,998 $29,448 $39,593
- -------------------------------------------------------------------------------------------------------------------------------
Total Income . . . . . . . . . . . 77,998 29,448 39,593
- -------------------------------------------------------------------------------------------------------------------------------
EXPENSES
The Vanguard Group--Note B
Investment Advisory Services . . . . . . 213 74 86
Management and Administrative . . . . . 3,111 1,054 1,341
Marketing and Distribution . . . . . . . 549 189 217
Taxes (other than income taxes) . . . . . . 169 59 67
Custodian Fees . . . . . . . . . . . . . . 65 21 21
Auditing Fees . . . . . . . . . . . . . . 5 4 4
Shareholders' Reports . . . . . . . . . . . 27 12 15
Annual Meeting and Proxy Costs . . . . . . 12 6 10
Directors' Fees and Expenses . . . . . . . 6 2 3
- -------------------------------------------------------------------------------------------------------------------------------
Total Expenses . . . . . . . . . . 4,157 1,421 1,764
Expenses Paid Indirectly--Note C. . (65) (25) (112)
- -------------------------------------------------------------------------------------------------------------------------------
Net Expenses . . . . . . . . . . . 4,092 1,396 1,652
- -------------------------------------------------------------------------------------------------------------------------------
Net Investment Income . . . . . 73,906 28,052 37,941
- -------------------------------------------------------------------------------------------------------------------------------
REALIZED NET GAIN (LOSS)
Investment Securities Sold . . . . . . . . (29) 400 913
Futures Contracts . . . . . . . . . . . . . -- -- --
- -------------------------------------------------------------------------------------------------------------------------------
Realized Net Gain (Loss) . . . . (29) 400 913
- -------------------------------------------------------------------------------------------------------------------------------
CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION)
Investment Securities . . . . . . . . . . . -- 2,715 7,429
Futures Contracts . . . . . . . . . . . . . -- -- --
- -------------------------------------------------------------------------------------------------------------------------------
Change in Unrealized
Appreciation (Depreciation) . -- 2,715 7,429
- -------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations . . $73,877 $31,167 $46,283
===============================================================================================================================
</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.
6
<PAGE> 7
<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 29, 1996 February 29, 1996 February 29, 1996 February 29, 1996
(000) (000) (000) (000)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
INCOME
Interest . . . . . . . . . . . . . . . . . $148,848 $ 55,334 $30,808 $57,218
- ------------------------------------------------------------------------------------------------------------------
Total Income . . . . . . . . . . . 148,848 55,334 30,808 57,218
- ------------------------------------------------------------------------------------------------------------------
EXPENSES
The Vanguard Group--Note B
Investment Advisory Services . . . . . . 281 100 54 96
Management and Administrative . . . . . 4,507 1,576 900 1,677
Marketing and Distribution . . . . . . . 552 161 93 173
Taxes (other than income taxes) . . . . . . 229 80 45 79
Custodian Fees . . . . . . . . . . . . . . 66 24 17 24
Auditing Fees . . . . . . . . . . . . . . . 5 4 4 4
Shareholders' Reports . . . . . . . . . . . 47 17 10 17
Annual Meeting and Proxy Costs . . . . . . 29 8 4 8
Directors' Fees and Expenses . . . . . . . 9 3 2 3
- ------------------------------------------------------------------------------------------------------------------
Total Expenses . . . . . . . . . . 5,725 1,973 1,129 2,081
Expenses Paid Indirectly--Note C . (144) (29) (57) (172)
- -------------------------------------------------------------------------------------------------------------------
Net Expenses . . . . . . . . . . . 5,581 1,944 1,072 1,909
- ------------------------------------------------------------------------------------------------------------------
Net Investment Income . . . . . 143,267 53,390 29,736 55,309
- ------------------------------------------------------------------------------------------------------------------
REALIZED NET GAIN (LOSS)
Investment Securities Sold . . . . . . . . 3,435 6,577 13,312 16,953
Futures Contracts . . . . . . . . . . . . . 3,757 (8,334) (4,740) (8,846)
- -------------------------------------------------------------------------------------------------------------------
Realized Net Gain (Loss) . . . . 7,192 (1,757) 8,572 8,107
- ------------------------------------------------------------------------------------------------------------------
CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION)
Investment Securities . . . . . . . . . . . 84,079 52,243 23,113 30,836
Futures Contracts . . . . . . . . . . . . . (2,850) 4,269 21 252
- ------------------------------------------------------------------------------------------------------------------
Change in Unrealized
Appreciation (Depreciation) . 81,229 56,512 23,134 31,088
- ------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations . . $231,688 $108,145 $61,442 $94,504
==================================================================================================================
</TABLE>
7
<PAGE> 8
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 29, 1996 August 31, 1995 FEBRUARY 29, 1996 August 31, 1995
(000) (000) (000) (000)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net Investment Income . . . . . . . . . $ 73,906 $ 149,391 $ 28,052 $ 57,328
Realized Net Gain (Loss) . . . . . . . . (29) (150) 400 (212)
Change in Unrealized Appreciation
(Depreciation) . . . . . . . . . . . -- -- 2,715 11,658
- ------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations . . 73,877 149,241 31,167 68,774
- ------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS (1)
Net Investment Income . . . . . . . . . (73,906) (149,391) (28,052) (57,328)
Realized Net Gain . . . . . . . . . . . -- -- -- (97)
- -------------------------------------------------------------------------------------------------------------------
Total Distributions . . . . . . (73,906) (149,391) (28,052) (57,425)
- -------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (2)
Issued --Regular . . . . . . . . . . 2,108,206 3,857,068 285,437 511,853
--In Lieu of Cash Distributions 68,280 137,361 23,649 47,474
--Exchange . . . . . . . . . 346,661 1,258,511 47,650 240,638
Redeemed --Regular . . . . . . . . . . (1,781,004) (3,841,577) (242,033) (551,088)
--Exchange . . . . . . . . . (531,609) (1,409,143) (122,588) (378,778)
- -------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) from
Capital Share Transactions . . 210,534 2,220 (7,885) (129,901)
- -------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) . . . 210,505 2,070 (4,770) (118,552)
- -------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of Period . . . . . . . . . . 4,165,695 4,163,625 1,442,009 1,560,561
- ------------------------------------------------------------------------------------------------------------------
End of Period . . . . . . . . . . . . . $ 4,376,200 $ 4,165,695 $1,437,239 $1,442,009
==================================================================================================================
(1) Distributions Per Share
Net Investment Income . . . . . . $.018 $.036 $.261 $.600
Realized Net Gain . . . . . . . . -- -- -- $.001
- ------------------------------------------------------------------------------------------------------------------
(2) Shares Issued and Redeemed
Issued . . . . . . . . . . . . . . 2,454,867 5,115,579 21,330 48,700
Issued in Lieu of Cash
Distributions . . . . . . . . . 68,280 137,361 1,515 3,070
Redeemed . . . . . . . . . . . . . (2,312,613) (5,250,720) (23,358) (60,206)
- -------------------------------------------------------------------------------------------------------------------
210,534 2,220 (513) (8,436)
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE> 9
<TABLE>
<CAPTION>
LIMITED-TERM INTERMEDIATE-TERM
PORTFOLIO PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED Year Ended SIX MONTHS ENDED Year Ended
FEBRUARY 29, 1996 August 31, 1995 FEBRUARY 29, 1996 August 31, 1995
(000) (000) (000) (000)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net Investment Income . . . . . . . . . $ 37,941 $ 75,985 $ 143,267 $ 268,611
Realized Net Gain (Loss) . . . . . . . . 913 (3,378) 7,192 3,748
Change in Unrealized Appreciation
(Depreciation) . . . . . . . . . . . 7,429 21,146 81,229 104,438
- -------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations . . 46,283 93,753 231,688 376,797
- -------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS (1)
Net Investment Income . . . . . . . . . (37,941) (75,985) (143,267) (268,611)
Realized Net Gain . . . . . . . . . . . -- -- (3,701) (57,697)
- -------------------------------------------------------------------------------------------------------------------
Total Distributions . . . . . . (37,941) (75,985) (146,968) (326,308)
- -------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (2)
Issued --Regular . . . . . . . . . . 236,243 407,939 531,916 905,510
--In Lieu of Cash
Distributions . . . . . . . 30,223 59,862 109,880 247,714
--Exchange . . . . . . . . . 87,238 251,187 222,460 632,641
Redeemed --Regular . . . . . . . . . . (162,295) (407,423) (285,190) (674,489)
--Exchange . . . . . . . . . (117,353) (475,094) (179,668) (781,216)
- -------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) from Capital
Share Transactions . . . . . 74,056 (163,529) 399,398 330,160
- -------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) . . . 82,398 (145,761) 484,118 380,649
- -------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of Period . . . . . . . . . . 1,668,559 1,814,320 5,448,261 5,067,612
- -------------------------------------------------------------------------------------------------------------------
End of Period . . . . . . . . . . . . . $1,750,957 $1,668,559 $5,932,379 $5,448,261
===================================================================================================================
(1) Distributions Per Share
Net Investment Income . . . . . . $.242 $.476 $.335 $.686
Realized Net Gain . . . . . . . . -- -- $.009 $.158
- -------------------------------------------------------------------------------------------------------------------
(2) Shares Issued and Redeemed
Issued . . . . . . . . . . . . . . 30,095 62,583 56,689 120,215
Issued in Lieu of Cash
Distributions . . . . . . . . . 2,813 5,677 8,255 19,472
Redeemed . . . . . . . . . . . . . (26,033) (84,035) (34,935) (114,445)
- -------------------------------------------------------------------------------------------------------------------
6,875 (15,775) 30,009 25,242
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE> 10
STATEMENT OF CHANGES IN NET ASSETS (continued)
<TABLE>
<CAPTION>
INSURED LONG-TERM LONG-TERM
PORTFOLIO PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED Year Ended SIX MONTHS ENDED Year Ended
FEBRUARY 29, 1996 August 31, 1995 FEBRUARY 29, 1996 August 31, 1995
(000) (000) (000) (000)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net Investment Income . . . . . . . . . $ 53,390 $ 108,265 $ 29,736 $ 58,321
Realized Net Gain (Loss) . . . . . . . . (1,757) (442) 8,572 792
Change in Unrealized Appreciation
(Depreciation) . . . . . . . . . . . 56,512 46,692 23,134 25,220
- ------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations . . 108,145 154,515 61,442 84,333
- ------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS (1)
Net Investment Income . . . . . . . . . (53,390) (108,265) (29,736) (58,321)
Realized Net Gain . . . . . . . . . . . -- (26,395) -- (14,264)
- -------------------------------------------------------------------------------------------------------------------
Total Distributions . . . . . . (53,390) (134,660) (29,736) (72,585)
- -------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (2)
Issued --Regular . . . . . . . . . . 83,839 161,563 57,803 130,852
--In Lieu of Cash
Distributions . . . . . . . 33,668 89,251 20,170 51,136
--Exchange . . . . . . . . . 42,936 152,745 45,798 162,862
Redeemed --Regular . . . . . . . . . . (87,616) (196,195) (47,632) (111,827)
--Exchange . . . . . . . . . (60,656) (229,928) (41,286) (191,589)
- -------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) from
Capital Share Transactions . 12,171 (22,564) 34,853 41,434
- ------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) . . . 66,926 (2,709) 66,559 53,182
- ------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of Period . . . . . . . . . . 1,935,308 1,938,017 1,054,120 1,000,938
- ------------------------------------------------------------------------------------------------------------------
End of Period . . . . . . . . . . . . . $2,002,234 $1,935,308 $1,120,679 $1,054,120
==================================================================================================================
(1) Distributions Per Share
Net Investment Income . . . . . . $.334 $.684 $.297 $.608
Realized Net Gain . . . . . . . . -- $.173 -- $.156
- ------------------------------------------------------------------------------------------------------------------
(2) Shares Issued and Redeemed
Issued . . . . . . . . . . . . . . 10,209 26,844 9,459 28,855
Issued in Lieu of Cash
Distributions . . . . . . . . . 2,709 7,678 1,843 4,999
Redeemed . . . . . . . . . . . . . (11,943) (36,608) (8,119) (29,758)
- -------------------------------------------------------------------------------------------------------------------
975 (2,086) 3,183 4,096
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE> 11
<TABLE>
<CAPTION>
HIGH-YIELD
PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED Year Ended
FEBRUARY 29, 1996 August 31, 1995
(000) (000)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net Investment Income . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 55,309 $ 106,379
Realized Net Gain (Loss) . . . . . . . . . . . . . . . . . . . . . . . . . . 8,107 (13,776)
Change in Unrealized Appreciation
(Depreciation) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,088 46,507
- ------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations . . . . . . . . . . . . . . . . . . . . 94,504 139,110
- ------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS (1)
Net Investment Income . . . . . . . . . . . . . . . . . . . . . . . . . . . (55,309) (106,379)
Realized Net Gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (27,681)
- -------------------------------------------------------------------------------------------------------------------
Total Distributions . . . . . . . . . . . . . . . . . . . . . . . . (55,309) (134,060)
- -------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (2)
Issued --Regular . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145,151 243,271
--In Lieu of Cash Distributions . . . . . . . . . . . . . . . . . 37,520 95,233
--Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . 93,760 298,072
Redeemed --Regular . . . . . . . . . . . . . . . . . . . . . . . . . . . . (96,831) (226,298)
--Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . (80,232) (331,292)
- -------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) from Capital
Share Transactions . . . . . . . . . . . . . . . . . . . . . . . 99,368 78,986
- -------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) . . . . . . . . . . . . . . . . . . . . . 138,563 84,036
- -------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,865,165 1,781,129
- -------------------------------------------------------------------------------------------------------------------
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,003,728 $1,865,165
===================================================================================================================
(1) Distributions Per Share
Net Investment Income . . . . . . . . . . . . . . . . . . . . . . . . $.300 $.625
Realized Net Gain . . . . . . . . . . . . . . . . . . . . . . . . . . -- $.173
- -------------------------------------------------------------------------------------------------------------------
(2) Shares Issued and Redeemed
Issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,442 53,728
Issued in Lieu of Cash Distributions . . . . . . . . . . . . . . . . . 3,529 9,523
Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16,658) (55,774)
- --------------------------------------------------------------------------------------------------------------------
9,313 7,477
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE> 12
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
- ------------------------------------------------------------------------------------------------------------------------------
Year Ended August 31,
SIX MONTHS ENDED ---------------------------------------------------
For a Share Outstanding Throughout Each Period FEBRUARY 29, 1996 1995 1994 1993 1992 1991
- -------------------------------------------------------------------------------------------------------------------------------
<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 . . . . . . . . . . . . . . . .018 .036 .024 .025 .035 .050
Net Realized and Unrealized Gain (Loss)
on Investments . . . . . . . . . . . . . . . . . -- -- -- -- -- --
------ ------ ------ ------ ------ -----
TOTAL FROM INVESTMENT OPERATIONS . . . . . . .018 .036 .024 .025 .035 .050
- -------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
Dividends from Net Investment Income . . . . . . . . (.018) (.036) (.024) (.025) (.035) (.050)
Distributions from Realized Capital Gains . . . . . -- -- -- -- -- --
------ ------ ------ ------ ------ -----
TOTAL DISTRIBUTIONS . . . . . . . . . . . . . (.018) (.036) (.024) (.025) (.035) (.050)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD . . . . . . . . . . . . $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===============================================================================================================================
TOTAL RETURN . . . . . . . . . . . . . . . . . . . . . +1.79% +3.63% +2.43% +2.51% +3.54% +5.08%
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net Assets, End of Period (Millions) . . . . . . . . . $4,376 $4,166 $4,164 $3,538 $3,165 $2,709
Ratio of Expenses to Average Net Assets . . . . . . . . .20%*+ .22%+ .20% .20% .23% .25%
Ratio of Net Investment Income to
Average Net Assets . . . . . . . . . . . . . . . . . 3.55%* 3.56% 2.41% 2.48% 3.45% 4.94%
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 29, 1996 1995 1994 1993 1992 1991
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD . . . . . . . . . $15.59 $15.46 $15.63 $15.64 $15.53 $15.35
------- ------- ------- ------- ------- ------
INVESTMENT OPERATIONS
Net Investment Income . . . . . . . . . . . . . . . .261 .600 .534 .609 .720 .861
Net Realized and Unrealized Gain (Loss)
on Investments . . . . . . . . . . . . . . . . . .040 .131 (.150) .033 .171 .180
------- ------- ------- ------- ------- ------
TOTAL FROM INVESTMENT OPERATIONS . . . . . . .301 .731 .384 .642 .891 1.041
- -------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
Dividends from Net Investment Income . . . . . . . . (.261) (.600) (.534) (.609) (.720) (.861)
Distributions from Realized Capital Gains . . . . . -- (.001) (.020) (.043) (.061) --
------- ------- ------- ------- ------- ------
TOTAL DISTRIBUTIONS . . . . . . . . . . . . . (.261) (.601) (.554) (.652) (.781) (.861)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD . . . . . . . . . . . . $15.63 $15.59 $15.46 $15.63 $15.64 $15.53
===============================================================================================================================
TOTAL RETURN . . . . . . . . . . . . . . . . . . . . . +2.24% +4.83% +2.49% +4.18% +5.87% +6.96%
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net Assets, End of Period (Millions) . . . . . . . . . $1,437 $1,442 $1,561 $1,329 $1,061 $841
Ratio of Expenses to Average Net Assets . . . . . . . . .20%*+ .22%+ .20% .20% .23% .25%
Ratio of Net Investment Income to
Average Net Assets . . . . . . . . . . . . . . . . . 3.94%* 3.88% 3.42% 3.88% 4.58% 5.55%
Portfolio Turnover Rate . . . . . . . . . . . . . . . . 36%* 32% 27% 46% 60% 104%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized.
+ Effective in fiscal 1995, does not include reductions from directed
brokerage and custodian fee offset arrangements. The 1996 and 1995 Ratios of
Expenses to Average Net Assets were .20% and .21%, respectively, after
including these reductions. See Note C.
12
<PAGE> 13
<TABLE>
<CAPTION>
LIMITED-TERM PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------------
Year Ended August 31,
SIX MONTHS ENDED ----------------------------------------------------
For a Share Outstanding Throughout Each Period FEBRUARY 29, 1996 1995 1994 1993 1992 1991
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD . . . . . . . . . $10.71 $10.57 $10.80 $10.64 $10.43 $10.17
------- ------- ------- ------- ------- ------
INVESTMENT OPERATIONS
Net Investment Income . . . . . . . . . . . . . . . .242 .476 .454 .485 .541 .614
Net Realized and Unrealized Gain (Loss)
on Investments . . . . . . . . . . . . . . . . . .050 .140 (.208) .209 .271 .265
------- ------- ------- ------- ------- ------
TOTAL FROM INVESTMENT OPERATIONS . . . . . . .292 .616 .246 .694 .812 .879
- -------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
Dividends from Net Investment Income . . . . . . . . (.242) (.476) (.454) (.485) (.541) (.614)
Distributions from Realized Capital Gains . . . . . -- -- (.022) (.049) (.061) (.005)
------- ------- ------- ------- ------- ------
TOTAL DISTRIBUTIONS . . . . . . . . . . . . . (.242) (.476) (.476) (.534) (.602) (.619)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD . . . . . . . . . . . . $10.76 $10.71 $10.57 $10.80 $10.64 $10.43
===============================================================================================================================
TOTAL RETURN . . . . . . . . . . . . . . . . . . . . . +2.75% +5.99% +2.31% +6.68% +8.01% +8.88%
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net Assets, End of Period (Millions) . . . . . . . . . $1,751 $1,669 $1,814 $1,625 $873 $420
Ratio of Expenses to Average Net Assets . . . . . . . . .21%*+ .22%+ .20% .20% .23% .25%
Ratio of Net Investment Income to
Average Net Assets . . . . . . . . . . . . . . . . . 4.51%* 4.51% 4.24% 4.50% 5.08% 5.91%
Portfolio Turnover Rate . . . . . . . . . . . . . . . 32%* 35% 21% 20% 37% 57%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE-TERM PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------------
Year Ended August 31,
SIX MONTHS ENDED ----------------------------------------------------
For a Share Outstanding Throughout Each Period FEBRUARY 29, 1996 1995 1994 1993 1992 1991
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD . . . . . . . . . $13.14 $13.02 $13.45 $12.85 $12.41 $11.90
------- ------- ------- ------- ------- ------
INVESTMENT OPERATIONS
Net Investment Income . . . . . . . . . . . . . . . .335 .686 .683 .710 .747 .791
Net Realized and Unrealized Gain (Loss)
on Investments . . . . . . . . . . . . . . . . . .209 .278 (.354) .721 .516 .605
------- ------- ------- ------- ------- ------
TOTAL FROM INVESTMENT OPERATIONS . . . . . . .544 .964 .329 1.431 1.263 1.396
- -------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
Dividends from Net Investment Income . . . . . . . . (.335) (.686) (.683) (.710) (.747) (.791)
Distributions from Realized Capital Gains . . . . . (.009) (.158) (.076) (.121) (.076) (.095)
------- ------- ------- ------- ------- ------
TOTAL DISTRIBUTIONS . . . . . . . . . . . . . (.344) (.844) (.759) (.831) (.823) (.886)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD . . . . . . . . . . . . $13.34 $13.14 $13.02 $13.45 $12.85 $12.41
===============================================================================================================================
TOTAL RETURN . . . . . . . . . . . . . . . . . . . . . +4.17% +7.82% +2.49% +11.54% +10.52% +12.15%
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net Assets, End of Period (Millions) . . . . . . . . . $5,932 $5,448 $5,068 $4,945 $3,102 $2,006
Ratio of Expenses to Average Net Assets . . . . . . . . .20%*+ .22%+ .20% .20% .23% .25%
Ratio of Net Investment Income to
Average Net Assets . . . . . . . . . . . . . . . . . 5.05%* 5.35% 5.15% 5.41% 5.91% 6.49%
Portfolio Turnover Rate . . . . . . . . . . . . . . . . 10%* 12% 18% 15% 32% 27%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized.
+ Effective in fiscal 1995, does not include reductions from directed
brokerage and custodian fee offset arrangements. The 1996 and 1995 Ratios of
Expenses to Average Net Assets were .20% and .21%, respectively, after
including these reductions. See Note C.
13
<PAGE> 14
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
INSURED LONG-TERM PORTFOLIO
- ------------------------------------------------------------------------------------------------------------------------------
Year Ended August 31,
SIX MONTHS ENDED ---------------------------------------------------
For a Share Outstanding Throughout Each Period FEBRUARY 29, 1996 1995 1994 1993 1992 1991
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD . . . . . . . . . $12.12 $11.98 $12.89 $12.28 $11.74 $11.25
------- ------- ------- ------- ------- ------
INVESTMENT OPERATIONS
Net Investment Income . . . . . . . . . . . . . . . .334 .684 .699 .718 .768 .775
Net Realized and Unrealized Gain (Loss)
on Investments . . . . . . . . . . . . . . . . . .340 .313 (.734) .813 .616 .615
------- ------- ------- ------- ------- ------
TOTAL FROM INVESTMENT OPERATIONS . . . . . . .674 .997 (.035) 1.531 1.384 1.390
- -------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
Dividends from Net Investment Income . . . . . . . . (.334) (.684) (.699) (.718) (.768) (.775)
Distributions from Realized Capital Gains . . . . . -- (.173) (.176) (.203) (.076) (.125)
------- ------- ------- ------- ------- ------
TOTAL DISTRIBUTIONS . . . . . . . . . . . . . (.334) (.857) (.875) (.921) (.844) (.900)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD . . . . . . . . . . . . $12.46 $12.12 $11.98 $12.89 $12.28 $11.74
===============================================================================================================================
TOTAL RETURN . . . . . . . . . . . . . . . . . . . . . +5.60% +8.88% -0.32% +13.06% +12.22% +12.79%
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net Assets, End of Period (Millions) . . . . . . . . . $2,002 $1,935 $1,938 $2,194 $1,947 $1,551
Ratio of Expenses to Average Net Assets . . . . . . . . .20%*+ .22%+ .20% .20% .23% .25%
Ratio of Net Investment Income to
Average Net Assets . . . . . . . . . . . . . . . . . 5.40%* 5.82% 5.62% 5.77% 6.34% 6.77%
Portfolio Turnover Rate . . . . . . . . . . . . . . . . 13%* 7% 16% 30% 42% 33%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
LONG-TERM PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------------
Year Ended August 31,
SIX MONTHS ENDED ----------------------------------------------------
For a Share Outstanding Throughout Each Period FEBRUARY 29, 1996 1995 1994 1993 1992 1991
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD . . . . . . . . . $10.68 $10.58 $11.38 $10.95 $10.58 $10.13
------- ------- ------- ------- ------- ------
INVESTMENT OPERATIONS
Net Investment Income . . . . . . . . . . . . . . . .297 .608 .609 .640 .711 .722
Net Realized and Unrealized Gain (Loss)
on Investments . . . . . . . . . . . . . . . . . .320 .256 (.595) .715 .561 .626
------- ------- ------- ------- ------- ------
TOTAL FROM INVESTMENT OPERATIONS . . . . . . .617 .864 .014 1.355 1.272 1.348
- -------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
Dividends from Net Investment Income . . . . . . . . (.297) (.608) (.609) (.640) (.711) (.722)
Distributions from Realized Capital Gains . . . . . -- (.156) (.205) (.285) (.191) (.176)
------- ------- ------- ------- ------- ------
TOTAL DISTRIBUTIONS . . . . . . . . . . . . . (.297) (.764) (.814) (.925) (.902) (.898)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD . . . . . . . . . . . . $11.00 $10.68 $10.58 $11.38 $10.95 $10.58
===============================================================================================================================
TOTAL RETURN . . . . . . . . . . . . . . . . . . . . . +5.83% +8.74% +0.08% +13.09% +12.60% +13.86%
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net Assets, End of Period (Millions) . . . . . . . . . $1,121 $1,054 $1,001 $1,131 $962 $798
Ratio of Expenses to Average Net Assets . . . . . . . . .21%*+ .23%+ .20% .20% .23% .25%
Ratio of Net Investment Income to
Average Net Assets . . . . . . . . . . . . . . . . . 5.45%* 5.87% 5.56% 5.81% 6.52% 7.09%
Portfolio Turnover Rate . . . . . . . . . . . . . . . . 24%* 35% 45% 36% 63% 62%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized.
+ Effective in fiscal 1995, does not include reductions from directed
brokerage and custodian fee offset arrangements. The 1996 and 1995 Ratios of
Expenses to Average Net Assets were .20% and .21%, respectively, after
including these reductions. See Note C.
14
<PAGE> 15
<TABLE>
<CAPTION>
HIGH-YIELD PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------------
Year Ended August 31,
SIX MONTHS ENDED ----------------------------------------------------
For a Share Outstanding Throughout Each Period FEBRUARY 29, 1996 1995 1994 1993 1992 1991
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD . . . . . . . . . $10.43 $10.39 $11.17 $10.76 $10.32 $ 9.90
------- ------- ------- ------- ------- -------
INVESTMENT OPERATIONS
Net Investment Income . . . . . . . . . . . . . . . .300 .625 .626 .669 .723 .732
Net Realized and Unrealized Gain (Loss)
on Investments . . . . . . . . . . . . . . . . . .220 .213 (.566) .664 .546 .560
------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS . . . . . . .520 .838 .060 1.333 1.269 1.292
- -------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
Dividends from Net Investment Income . . . . . . . . (.300) (.625) (.626) (.669) (.723) (.732)
Distributions from Realized Capital Gains . . . . . -- (.173) (.214) (.254) (.106) (.140)
------- ------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS . . . . . . . . . . . . . (.300) (.798) (.840) (.923) (.829) (.872)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD . . . . . . . . . . . . $10.65 $10.43 $10.39 $11.17 $10.76 $10.32
===============================================================================================================================
TOTAL RETURN . . . . . . . . . . . . . . . . . . . . . +5.02% +8.69% +0.52% +13.08% +12.81% +13.66%
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net Assets, End of Period (Millions) . . . . . . . . . $2,004 $1,865 $1,781 $1,931 $1,505 $1,215
Ratio of Expenses to Average Net Assets . . . . . . . . .21%*+ .22%+ .20% .20% .23% .25%
Ratio of Net Investment Income to
Average Net Assets . . . . . . . . . . . . . . . . . 5.70%* 6.15% 5.83% 6.15% 6.83% 7.34%
Portfolio Turnover Rate . . . . . . . . . . . . . . . . 14%* 33% 50% 34% 64% 58%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized.
+ Effective in fiscal 1995, does not include reductions from directed
brokerage and custodian fee offset arrangements. The 1996 and 1995 Ratios of
Expenses to Average Net Assets were .20% and .21%, respectively, after
including these reductions. See Note C.
15
<PAGE> 16
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
contract termination, 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
16
<PAGE> 17
under methods approved by the Board of Directors. At February 29, 1996, the
Fund had contributed capital aggregating $2,049,000 to Vanguard (included in
Other Assets), representing 10.2% of Vanguard's capitalization. The Fund's
officers and directors are also officers and directors of Vanguard.
C. The Fund's investment adviser may direct new issue portfolio purchases,
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. The Fund's custodian bank has also agreed to reduce
its fees when the Fund maintains cash on deposit in the non-interest bearing
custody account. For the six months ended February 29, 1996, directed brokerage
and custodian fee offset arrangements reduced expenses by:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------
Expense Reduction
(000) Total Expense
------------------------- Reduction as a
Directed Custodian Percent of Average
Portfolio Brokerage Fees Net Assets
- -----------------------------------------------------------------------
<S> <C> <C> <C>
MONEY MARKET -- $65 --
SHORT-TERM $ 4 21 --
LIMITED-TERM 91 21 .01%
INTERMEDIATE-TERM 78 66 --
INSURED LONG-TERM 5 24 --
LONG-TERM 40 17 .01
HIGH-YIELD 148 24 .01
- -----------------------------------------------------------------------
</TABLE>
D. During the six months ended February 29, 1996, purchases and sales of
investment securities other than temporary cash investments were:
<TABLE>
<CAPTION>
- -------------------------------------------------------
(000)
------------------------
Portfolio Purchases Sales
- -------------------------------------------------------
<S> <C> <C>
SHORT-TERM $169,420 $411,476
LIMITED-TERM 260,483 284,471
INTERMEDIATE-TERM 632,616 254,188
INSURED LONG-TERM 126,762 119,693
LONG-TERM 120,863 159,129
HIGH-YIELD 120,762 194,791
- -------------------------------------------------------
</TABLE>
E. For Federal income tax purposes, the aggregate capital losses available to
offset future capital gains at August 31, 1995, were:
<TABLE>
<CAPTION>
- -------------------------------------------------------
Expiration
Fiscal Year(s) Amount
Portfolio Ending August 31, (000)
- -------------------------------------------------------
<S> <C> <C>
MONEY MARKET 2001-2004 $ 694
SHORT-TERM 2003-2004 212
LIMITED-TERM 2003-2004 5,251
INSURED LONG-TERM 2003 1,482
LONG-TERM 2003 2,484
HIGH-YIELD 2003 13,411
- -------------------------------------------------------
</TABLE>
17
<PAGE> 18
NOTES TO FINANCIAL STATEMENTS (continued)
F. At February 29, 1996, net unrealized appreciation of investment securities
for financial reporting and Federal income tax purposes was:
<TABLE>
<Caption
- --------------------------------------------------------
(000)
-------------------------------------
Net
Appreciated Depreciated Unrealized
Portfolio Securities Securities Appreciation
- --------------------------------------------------------
<S> <C> <C> <C>
SHORT-TERM $ 11,354 $ (132) $ 11,222
LIMITED-TERM 31,392 (833) 30,559
INTERMEDIATE-TERM 342,753 (1,028) 341,725
INSURED LONG-TERM 178,341 (584) 177,757
LONG-TERM 85,677 (361) 85,316
HIGH-YIELD 121,417 (14,444) 106,973
- ------------------------------------------------------
</TABLE>
At February 29, 1996, the Insured Long-Term Portfolio had short positions in
U.S. Treasury Bond futures contracts expiring in March 1996, with an aggregate
settlement value and net unrealized appreciation of $50,531,000 and $1,825,000,
respectively. The market value of securities deposited as initial margin for
open futures contracts was $6,799,000.
18
<PAGE> 19
DIRECTORS AND OFFICERS
JOHN C. BOGLE, Chairman of the Board
Chairman and Director of The Vanguard Group, Inc., and of each of the
investment companies in The Vanguard Group.
JOHN J. BRENNAN, President and Chief Executive Officer
President and Director of The Vanguard Group, Inc., and of each of the
investment companies in The Vanguard Group.
ROBERT E. CAWTHORN, Chairman of Rhone-Poulenc Rorer Inc.; Director of Sun
Company, Inc.; Director of Westinghouse Electric Corporation.
BARBARA BARNES HAUPTFUHRER, Director of The Great Atlantic and Pacific Tea Co.,
Alco Standard Corp., Raytheon Co., Knight-Ridder, Inc., and Massachusetts
Mutual Life Insurance Co.
BURTON G. MALKIEL, Chemical Bank Chairman's Professor of Economics, Princeton
University; Director of Prudential Insurance Co. of America, Amdahl Corp.,
Baker Fentress & Co., The Jeffrey Co., and Southern New England Communications
Co.
ALFRED M. RANKIN, JR., Chairman, President, and Chief Executive Officer of
NACCO Industries, Inc.; Director of NACCO Industries, The BFGoodrich Co., and
The Standard Products Co.
JOHN C. SAWHILL, President and Chief Executive Officer of The Nature
Conservancy; formerly, Director and Senior Partner of McKinsey & Co. and
President of New York University; Director of Pacific Gas and Electric Co. and
NACCO Industries.
JAMES O. WELCH, JR., Retired Chairman of Nabisco Brands, Inc.; retired Vice
Chairman and Director of RJR Nabisco; Director of TECO Energy, Inc. and Kmart
Corp.
J. LAWRENCE WILSON, Chairman and Chief Executive Officer of Rohm & Haas Co.;
Director of Cummins Engine Co.; Trustee of Vanderbilt University.
OTHER FUND OFFICERS
RAYMOND J. KLAPINSKY, Secretary; Senior Vice President and Secretary of The
Vanguard Group, Inc.; Secretary of each of the investment companies in The
Vanguard Group.
RICHARD F. HYLAND, Treasurer; Treasurer of The Vanguard Group, Inc., and of
each of the investment companies in The Vanguard Group.
KAREN E. WEST, Controller; Vice President of The Vanguard Group, Inc.;
Controller of each of the investment companies in The Vanguard Group.
OTHER VANGUARD GROUP OFFICERS
ROBERT A. DISTEFANO F. WILLIAM MCNABB III
Senior Vice President Senior Vice President
Information Technology Institutional
JAMES H. GATELY RALPH K. PACKARD
Senior Vice President Senior Vice President
Individual Investor Group Chief Financial Officer
IAN A. MACKINNON
Senior Vice President
Fixed Income Group
19
<PAGE> 20
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 Selected Value Portfolio
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 Portfolio
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 Horizon Fund
Global Equity Portfolio
Global Asset Allocation Portfolio
Capital Opportunity Portfolio
Aggressive Growth Portfolio
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
<PAGE> 21
[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.
Q952-2/96
<PAGE> 22
VANGUARD
MUNICIPAL
BOND FUND
Semi-Annual Report
February 29, 1996
<PAGE> 23
STATEMENT OF NET ASSETS
VANGUARD MUNICIPAL FINANCIAL STATEMENTS (unaudited)
BOND FUND February 29, 1996
<TABLE>
<CAPTION>
Face Market
MONEY MARKET Amount Value
PORTFOLIO (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL MONEY MARKET INSTRUMENTS
(100.2%)
- --------------------------------------------------------------------------------
ALABAMA (2.8%)
Alabama Special Care Facilities
VRDO 3.30%, 3/6/96 (3) $21,400 $ 21,400
Birmingham AL GO VRDO
3.35%-3.375%,
3/6/96-3/7/96 LOC 11,900 11,900
Chatom AL National Rural
Utilities IDA CP
(Alabama Electric)
3.25%, 5/15/96 4,900 4,900
Huntsville AL Health Care
Auth. VRDO
3.05%-3.25%, 3/7/96 (1) 40,400 40,400
McIntosh AL IDA VRDO
(Ciba-Geigy)
3.30%, 3/6/96 LOC 22,400 22,400
Montgomery AL IDA Pollution
Control & Solid Waste CP
(General Electric Co. Project)
3.25%-3.75%, 4/8/96-5/20/96 19,705 19,705
----------
STATE TOTAL 120,705
----------
- --------------------------------------------------------------------------------
ALASKA (2.8%)
Alaska Housing Finance Corp. VRDO
3.20%-3.40%, 3/6/96 67,700 67,700
Valdez AK Marine Terminal
(Atlantic Richfield)
CP 3.25%, 3/14/96 4,300 4,300
(Exxon Pipeline Project)
VRDO 3.35%, 3/4/96 20,600 20,600
(Mobile Pipeline)
VRDO 3.30%, 3/6/96 28,350 28,350
----------
STATE TOTAL 120,950
----------
- --------------------------------------------------------------------------------
ARIZONA (1.6%)
Arizona Health Facilities Auth.
(Samaritan Health Services)
VRDO 3.25%, 3/7/96 (3) 32,160 32,160
Salt River AZ Project Agricultural
Improvement & Power Dist.
TOB VRDO 3.30%, 3/6/96 26,370 26,370
CP 3.65%-3.70%,
4/8/96-4/10/96 13,000 12,997
----------
STATE TOTAL 71,527
----------
- --------------------------------------------------------------------------------
CALIFORNIA (11.7%)
California Higher Education Loan
Auth. Student Loan Rev. VRDO
3.25%, 3/6/96 LOC 88,400 88,400
California RAW
5.75%, 4/25/96 LOC 72,750 72,967
California School Cash Reserve
Program Notes
4.75%, 7/3/96 (1) LOC 10,000 10,033
California Statewide Communities
Development Auth. TRAN
4.75%, 7/5/96 (5) 10,000 10,023
Fresno County CA TRAN
4.50%, 7/2/96 16,500 16,538
Kern County CA TRAN
4.50%, 7/2/96 10,000 10,019
Los Angeles County CA Metropolitan
Transportation Auth. CP
3.60%, 3/8/96 LOC 24,111 24,111
Los Angeles County CA TRAN
4.50%, 7/1/96 LOC 94,200 94,414
Orange County CA Sanitation Dist.
VRDO 3.35%, 3/4/96 (3) 2,200 2,200
Riverside County CA TRAN
4.75%, 7/1/96 35,000 35,104
Sacramento County CA TRAN
4.75%, 10/4/96-12/27/96 61,900 62,307
San Diego County CA TRAN
4.50%, 9/30/96 10,000 10,053
Santa Clara County CA TRAN
4.50%, 8/2/96 50,000 50,139
Ventura County CA TRAN
4.50%, 7/2/96 25,000 25,058
----------
STATE TOTAL 511,366
----------
- --------------------------------------------------------------------------------
COLORADO (2.0%)
Colorado Health Facilities Auth.
Rev. VRDO
(Kaiser Permanente)
3.25%, 3/6/96 12,000 12,000
(Sisters of Charity)
3.25%, 3/7/96 5,400 5,400
Colorado TRAN
4.50%, 6/27/96 71,000 71,194
----------
STATE TOTAL 88,594
----------
- --------------------------------------------------------------------------------
</TABLE>
THE PORTFOLIO LISTINGS BEGIN ON THE FOLLOWING PAGES:
<TABLE>
<S> <C>
MONEY MARKET PORTFOLIO . . . . . . . . . . . . . . . . . . . . . 1
SHORT-TERM PORTFOLIO . . . . . . . . . . . . . . . . . . . . . . 8
LIMITED-TERM PORTFOLIO . . . . . . . . . . . . . . . . . . . . . 13
INTERMEDIATE-TERM PORTFOLIO . . . . . . . . . . . . . . . . . . 19
INSURED LONG-TERM PORTFOLIO . . . . . . . . . . . . . . . . . . 30
LONG-TERM PORTFOLIO . . . . . . . . . . . . . . . . . . . . . . 38
HIGH-YIELD PORTFOLIO . . . . . . . . . . . . . . . . . . . . . . 42
</TABLE>
1
<PAGE> 24
<TABLE>
<CAPTION>
Face Market
MONEY MARKET Amount Value
PORTFOLIO (continued) (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
CONNECTICUT (.6%)
Connecticut Development Auth.
PCR VRDO
(Connecticut Light & Power)
3.15%, 3/6/96 LOC $ 6,460 $ 6,460
Connecticut Economic
Recovery Notes VRDO
3.30%, 3/6/96 13,600 13,600
Connecticut Special Tax Obligation
VRDO 3.20%, 3/6/96 LOC 3,900 3,900
----------
STATE TOTAL 23,960
----------
- --------------------------------------------------------------------------------
DISTRICT OF COLUMBIA (.8%)
District of Columbia VRDO
(George Washington Univ.)
3.60%, 3/6/96 LOC 36,600 36,600
----------
- --------------------------------------------------------------------------------
FLORIDA (8.1%)
Broward County FL
7.875%, 7/1/96 (Prere.) 20,000 20,663
Dade County FL Water & Sewer
System Rev. VRDO
3.05%, 3/6/96 (3) 9,455 9,455
(Eagle Trust)
TOB 3.37%, 3/7/96 (3) 24,000 24,000
Gainesville FL Utilities System CP
3.25%-3.75%, 4/9/96-5/23/96 14,016 14,016
Gulf Breeze FL Local Govt. Loan
Program VRDO
3.10%, 3/7/96 (3) 14,825 14,825
Hillsborough County FL
IDA PCR VRDO
(Tampa Electric Co. Project)
3.45%, 3/4/96 9,100 9,100
Jacksonville FL Electric Auth. CP
3.20%-3.75%, 3/8/96-5/24/96 62,500 62,500
Jacksonville FL PCR CP
(Florida Light & Power)
3.30%, 3/19/96 9,200 9,200
Lee County FL Hosp. Board CP
(Lee Memorial Hosp. Project)
3.25%-3.80%, 3/27/96-5/23/96 74,500 74,500
Orlando & Orange County FL
Expressway Auth. Rev.
7.125%, 7/1/96 (Prere.) 4,000 4,132
Orlando FL Utilities Comm. Water &
Electric Rev. BAN VRDO
3.10%, 3/7/96 39,950 39,950
Palm Beach County FL School
Dist. TAN
4.50%, 9/27/96 20,000 20,072
St. Lucie County FL PCR CP
(Florida Power & Light Co. Project)
3.35%, 5/15/96 6,350 6,350
Sunshine State Govt. Finance
Committee CP
3.25%-3.60%,
3/12/96-5/13/96 LOC 45,765 45,765
----------
STATE TOTAL 354,528
----------
- --------------------------------------------------------------------------------
GEORGIA (1.9%)
Burke County GA Development
Auth. (Oglethorpe Power)
VRDO 3.05%, 3/6/96 (3) 59,700 59,700
CP 3.20%-3.65%,
3/11/96-5/26/96 LOC 16,550 16,550
Georgia GO
7.40%, 8/1/96 7,930 8,060
----------
STATE TOTAL 84,310
----------
- --------------------------------------------------------------------------------
HAWAII (.6%)
Hawaii GO
TOB VRDO 3.30%, 3/6/96 9,600 9,600
5.00%, 11/1/96 5,260 5,308
Honolulu HI City & County
3.15%-3.20%, 3/11/96-5/15/96 12,750 12,750
----------
STATE TOTAL 27,658
----------
- --------------------------------------------------------------------------------
IDAHO (.4%)
Idaho TAN
4.50%, 6/27/96 15,000 15,033
----------
- --------------------------------------------------------------------------------
ILLINOIS (9.1%)
Chicago IL GO
PUT 3.10%-3.75%,
10/31/96-2/4/97 LOC 43,900 43,900
VRDO 3.90%, 3/7/96 LOC 34,800 34,800
Illinois Development Finance
Auth. PCR VRDO
(Illinois Power Co.)
3.30%, 3/6/96 LOC 13,200 13,200
Illinois Education
Facilities VRDO
(DePaul Univ.)
3.25%, 3/6/96 LOC 30,800 30,800
Illinois GO
5.25%, 7/1/96 (3) 9,740 9,786
Illinois Health Facilities Auth.
(Evanston Hosp. Corp.)
PUT 3.15%, 1/31/97 10,000 10,000
CP 4.00%, 5/15/96 15,000 15,000
(Franciscan Sisters)
VRDO 3.25%, 3/6/96 LOC 27,000 27,000
(Hosp. Sisters Service)
VRDO 3.30%, 3/6/96 (1) 23,900 23,900
</TABLE>
2
<PAGE> 25
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
(Pooled Finance)
VRDO 3.25%, 3/6/96 LOC $ 6,000 $ 6,000
(Rush-Presbyterian St. Lukes
Medical Center)
CP 3.30%, 3/21/96 8,000 8,000
(Swedish Covenant Hosp.)
VRDO 3.30%, 3/6/96 (2) 35,000 35,000
(Univ. of Chicago Hosp.)
VRDO 3.25%, 3/6/96 (1) 21,000 21,000
Illinois RAN
4.50%, 4/12/96-6/10/96 94,600 94,698
Illinois Toll Highway Auth. VRDO
3.05%, 3/6/96 (1) LOC 24,400 24,400
----------
STATE TOTAL 397,484
----------
- --------------------------------------------------------------------------------
INDIANA (1.5%)
City of Hammond IN PCR VRDO
(Amoco Project)
3.35%, 3/4/96 7,500 7,500
Indiana Educational Facilities Auth.
VRDO (Univ. of Notre Dame)
3.15%, 3/7/96 1,400 1,400
Indianapolis IN Local Public
Improvement Board
4.50%, 7/11/96 6,800 6,819
Mt. Vernon IN PCR PUT
(Southern Indiana Gas & Electric)
4.35%, 5/1/96 12,000 12,029
Mt. Vernon IN PCR & Solid Waste
Disposal CP
(General Electric Project)
3.25%-3.70%, 4/9/96-5/24/96 17,340 17,340
Petersburg IN PCR CP
(Indianapolis Power & Light Co.)
3.25%-3.75%, 4/9/96-8/9/96 22,500 22,500
----------
STATE TOTAL 67,588
----------
- --------------------------------------------------------------------------------
IOWA (.1%)
Iowa School Corp.
(Iowa School Cash
Anticipation Project)
4.25%, 1/30/97 (4) 6,300 6,348
----------
- --------------------------------------------------------------------------------
KANSAS (.2%)
Burlington KS PCR CP
(Kansas City Power & Light)
3.25%, 3/14/96 LOC 10,600 10,600
----------
- --------------------------------------------------------------------------------
KENTUCKY (.3%)
Trimble KY PCR CP
(Louisville Gas & Electric Project)
3.30%-3.60%, 4/10/96-5/16/96 11,000 11,000
----------
- --------------------------------------------------------------------------------
LOUISIANA (3.0%)
East Baton Rouge Parish LA VRDO
(Exxon Project)
3.40%, 3/4/96 17,000 17,000
Louisiana Public Facilities Auth. CP
(Lady of Lakes Regional
Medical Center)
3.20%-4.15%,
3/7/96-5/14/96 (4) 79,090 79,090
(Sisters of Charity)
CP 3.30%-3.45%, 3/4/96-7/25/96 29,000 29,000
Louisiana Recovery Dist. Sales Tax
VRDO 3.50%, 3/4/96 (3) 1,200 1,200
Plaquemines LA Port Harbor &
Terminal CP
3.35%, 5/23/96 5,200 5,200
----------
STATE TOTAL 131,490
----------
- --------------------------------------------------------------------------------
MAINE (.4%)
Maine Health & Higher Education
Facilities Auth. VRDO
(Bowdoin College)
3.30%, 3/6/96 LOC 6,500 6,500
Maine TAN
4.50%, 6/28/96 10,000 10,021
----------
STATE TOTAL 16,521
----------
- --------------------------------------------------------------------------------
MARYLAND (.6%)
Howard County MD Consolidated
Public Improvement CP
3.45%, 3/18/96 4,000 4,000
Maryland Health & Higher
Education Facilities Auth.
(Univ. Medical System)
9.50%, 7/22/96 (Prere.) 22,390 23,315
----------
STATE TOTAL 27,315
----------
- --------------------------------------------------------------------------------
MASSACHUSETTS (1.1%)
Massachusetts Bay Transportation
Auth. CP
3.40%, 3/21/96 LOC 8,500 8,500
Massachusetts Health & Education
Facility Auth. Rev. CP
(Harvard Univ.)
3.55%, 4/10/96 7,200 7,200
Massachusetts Water
Resource Auth. CP
3.35%-3.70%,
3/21/96-3/25/96 LOC 34,000 34,000
----------
STATE TOTAL 49,700
----------
- --------------------------------------------------------------------------------
</TABLE>
3
<PAGE> 26
<TABLE>
<CAPTION>
Face Market
MONEY MARKET Amount Value
PORTFOLIO (continued) (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
MICHIGAN (3.7%)
Michigan GO
4.00%, 9/30/96 $95,000 $ 95,534
Michigan Hosp. Finance Auth.
VRDO (Daughters of Charity-
Providence Hosp.)
3.20%, 3/6/96 22,800 22,800
Michigan Municipal Bond Auth.
Rev. Notes
4.50%, 7/3/96 15,000 15,035
Regents of Univ. of Michigan
Hosp. Rev.
VRDO 3.45%, 3/4/96 26,900 26,900
----------
STATE TOTAL 160,269
----------
- --------------------------------------------------------------------------------
MINNESOTA (1.1%)
Anoka-Hennepin MN Independent
School Dist. TAN
5.50%, 3/6/96 19,930 19,932
Becker MN PCR CP
(Northern State Power Co. Project)
3.20%, 5/21/96 7,400 7,400
Minnesota Housing Finance Agency
(Single Family Mortgage)
PUT 3.50%, 12/12/96 5,900 5,900
Regents of Univ. of Minnesota
CP VRDO 3.25%-3.40%,
5/16/96-5/24/96 11,000 11,000
PUT 3.25%, 8/1/96 5,600 5,600
----------
STATE TOTAL 49,832
----------
- --------------------------------------------------------------------------------
MISSOURI (2.5%)
Missouri Health & Education
Facilities Auth.
(SSM Health Care Project)
CP 3.20%, 3/15/96 LOC 14,200 14,200
VRDO 3.30%, 3/6/96 (1) 10,000 10,000
(Sisters of Mercy Health
Care System)
VRDO 3.15%, 3/6/96 20,000 20,000
(Washington Univ.)
3.35%-3.40%, 3/4/96 29,400 29,400
Missouri Health & Education
Finance Auth. VRDO
(St. Anthony's Medical Center)
3.65%, 3/5/96 11,200 11,200
St. Louis MO VRDO
(Sisters of Mercy Health
Care System)
3.15%, 3/7/96 24,700 24,700
----------
STATE TOTAL 109,500
----------
- --------------------------------------------------------------------------------
MONTANA (.2%)
Montana TRAN
4.50%, 6/30/96 10,000 10,023
----------
- --------------------------------------------------------------------------------
NEBRASKA (.7%)
Lincoln NE CP
(Lincoln Electric System)
3.20%, 5/15/96 25,000 25,000
Omaha NE Public Power Dist. CP
3.25%, 5/24/96 5,500 5,500
----------
STATE TOTAL 30,500
----------
- --------------------------------------------------------------------------------
NEVADA (1.6%)
Clark County NV Airport VRDO
3.05%, 3/6/96 (1) 61,520 61,520
Nevada GO TOB VRDO
3.30%, 3/7/96 9,225 9,225
----------
STATE TOTAL 70,745
----------
- --------------------------------------------------------------------------------
NEW JERSEY (.6%)
New Jersey GO TOB PUT VRDO
3.10%, 3/6/96 4,500 4,500
New Jersey TRAN CP
3.25%, 5/13/96 23,100 23,100
----------
STATE TOTAL 27,600
----------
- --------------------------------------------------------------------------------
NEW MEXICO (.6%)
Bernalillo County NM GO
6.00%, 8/1/96 2,000 2,018
Hurley NM PCR VRDO
(Kennecott Sante Fe Corp. Project)
3.45%, 3/4/96 24,200 24,200
----------
STATE TOTAL 26,218
----------
- --------------------------------------------------------------------------------
NEW YORK (5.6%)
Erie County NY RAN
4.50%, 9/20/96 LOC 10,000 10,035
Nassau County NY TAN
4.50%, 3/15/96 13,700 13,703
New York City NY GO
VRDO 3.15%, 3/6/96 LOC 1,800 1,800
CP 3.35%, 8/9/96 (4) 12,000 12,000
RAN 4.75%, 6/28/96 LOC 77,600 77,830
New York City NY Municipal Water
Finance Auth.
CP 3.20%-3.30%,
3/19/96-5/8/96 LOC 53,700 53,700
VRDO 3.35%, 3/4/96 (3) 41,600 41,600
Port Washington NY Unified
School Dist. TAN
4.25%, 6/27/96 4,500 4,508
</TABLE>
4
<PAGE> 27
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Suffulk County NY TAN
4.50%, 9/12/96 LOC $ 4,000 $ 4,013
Westchester County NY TAN
3.75%, 12/11/96 25,000 25,124
----------
STATE TOTAL 244,313
----------
- --------------------------------------------------------------------------------
NORTH CAROLINA (1.9%)
Charlotte NC Airport Refunding Rev.
VRDO 3.05%, 3/6/96 (1) 5,900 5,900
North Carolina Education Facilities
Auth. VRDO
(Duke Univ.)
3.20%, 3/7/96 25,900 25,900
North Carolina Medical Care
Hosp. Rev. VRDO
(Duke Univ. Hosp.)
3.20%, 3/7/96 20,400 20,400
(Moses Cone Hosp.)
3.25%, 3/7/96 19,500 19,500
Wake County NC Pollution Control
Finance Auth. VRDO
(Carolina Power & Light)
3.30%, 3/6/96 LOC 11,500 11,500
----------
STATE TOTAL 83,200
----------
- --------------------------------------------------------------------------------
OHIO (.9%)
Beavercreek OH Local School Dist.
BAN 4.03%, 7/18/96 10,000 10,020
Columbus OH GO VRDO
3.05%, 3/7/96 500 500
Hamilton County OH Hosp.
Facilities Rev. VRDO
(Bethesda Hosp.)
3.15%, 3/7/96 LOC 14,500 14,500
Ohio Air Quality Development
Auth. VRDO
(Cincinnati Gas & Electric
Co. Project)
3.45%-3.50%, 3/4/96 LOC 10,400 10,400
Ohio Water Development
Auth. VRDO (Mead Corp.)
3.45%, 3/4/96 LOC 2,100 2,100
Univ. of Cincinnati OH GO BAN
4.25%, 8/28/96 1,000 1,002
----------
STATE TOTAL 38,522
----------
- --------------------------------------------------------------------------------
OKLAHOMA (1.0%)
Garfield County OK IDA
PCR VRDO
(Oklahoma Gas & Electric
Co. Project)
3.35%, 3/6/96 19,200 19,200
Oklahoma City OK Industrial &
Cultural Facilities Trust VRDO
(St. Anthony Hosp.)
3.35%, 3/5/96 LOC 24,900 24,900
----------
STATE TOTAL 44,100
----------
- --------------------------------------------------------------------------------
PENNSYLVANIA (.5%)
Allegheny County PA Hosp.
Development Auth. VRDO
(Allegheny General Hosp.)
3.25%, 3/6/96 LOC 9,800 9,800
Delaware County PA PCR CP
(PECO Energy Co.)
3.70%, 3/12/96 (3) 2,500 2,500
Pennsylvania Higher Education
Facilities Auth. VRDO
(Carnegie Mellon)
3.45%, 3/4/96 9,600 9,600
----------
STATE TOTAL 21,900
----------
- --------------------------------------------------------------------------------
SOUTH CAROLINA (1.2%)
Berkeley SC PCR VRDO
(Amoco Chemical Co. Project)
3.35%, 3/4/96 5,100 5,100
Greenville SC Hosp. System VRDO
3.10%-3.20%, 3/7/96 25,400 25,400
South Carolina Public Service Auth.
CP 3.60%, 3/12/96-3/13/96 20,000 20,000
----------
STATE TOTAL 50,500
----------
- --------------------------------------------------------------------------------
SOUTH DAKOTA (.1%)
South Dakota School Dist. Certificates
(Cash Flow Finance Project)
4.75%, 7/30/96 2,795 2,804
----------
- --------------------------------------------------------------------------------
TENNESSEE (1.8%)
Metropolitan Govt. of Nashville
& Davidson County TN
Health & Education CP
(Baptist Hosp.)
3.20%-3.25%, 5/15/96-5/24/96 43,300 43,300
(Vanderbilt Univ.)
3.20%-3.75%, 4/8/96-5/24/96 22,950 22,950
Tennessee VRDO
3.25%, 3/6/96 10,800 10,800
----------
STATE TOTAL 77,050
----------
- --------------------------------------------------------------------------------
TEXAS (13.0%)
Dallas TX Waterworks & Sewer TOB
(Dallas, Denton & Collin Counties)
VRDO 3.30%, 3/6/96 30,000 30,000
Gulf Coast Waste Disposal
Auth. TX PCR
(Amoco Oil Project)
VRDO 3.35%, 3/4/96 1,000 1,000
</TABLE>
5
<PAGE> 28
<TABLE>
<CAPTION>
Face Market
MONEY MARKET Amount Value
PORTFOLIO (continued) (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
(Exxon Project)
CP 3.35%, 3/21/96 $ 6,000 $ 6,000
VRDO 3.35%, 3/4/96 9,700 9,700
Harris County TX Health Facility
Development Corp. VRDO
(Children's Hosp.)
3.30%, 3/6/96 21,000 21,000
(Methodist Hosp.)
3.45%, 3/4/96 7,600 7,600
(St. Luke's Episcopal Hosp.)
3.45%, 3/4/96 2,300 2,300
Harris County TX School Health
Care System CP (Sisters of Charity)
3.20%-3.45%,
3/4/96-7/25/96 57,600 57,600
Harris County TX Toll
Road VRDO
3.15%-3.30%, 3/6/96 115,200 115,200
Houston TX CP
3.20%, 3/15/96 21,000 21,000
Houston TX Independent
School Dist. TRAN
4.50%, 8/29/96 15,000 15,043
Houston TX TRAN
4.50%, 6/27/96 10,000 10,025
Houston TX VRDO
3.30%, 3/6/96 4,600 4,600
North Central Texas Health
Facilities Development Corp.
(Presbyterian Medical Center)
VRDO 3.50%, 3/4/96 (1) 5,300 5,300
Plano TX Health Facility
Development Corp. Hosp. Rev. CP
(Children's & Presbyterian
Health Care Center)
3.20%, 5/10/96 (1) 7,000 7,000
Richardson TX Independent
School Dist. TRAN
4.50%, 8/30/96 9,000 9,020
Southwest TX Higher Education
Auth. VRDO
(Southern Methodist Univ.)
3.35%, 3/4/96 LOC 7,300 7,300
Spring Branch TX Independent
School Dist. TRAN
4.50%, 8/30/96 5,000 5,017
Texas Public Finance Auth. GO CP
3.20%-3.50%, 4/4/96-5/29/96 88,100 88,100
Texas Research Laboratory
GO TOB VRDO
3.25%, 3/7/96 (Prere.) 9,350 9,350
Texas Tax & Rev. Anticipation CP
3.65%, 8/20/96 23,400 23,400
Texas TRAN
4.75%, 8/30/96 78,070 78,415
Univ. of Texas System Board of
Regents Rev. Finance System CP
3.20%, 5/8/96-5/9/96 25,370 25,370
Univ. of Texas System Board of
Regents Univ. Permanent Fund CP
3.20%-3.75%, 4/9/96-5/20/96 11,055 11,055
----------
STATE TOTAL 570,395
----------
- --------------------------------------------------------------------------------
UTAH (2.7%)
Emery County UT PCR VRDO
(Pacific Corp.)
3.30%, 3/6/96 LOC 35,500 35,500
3.40%, 3/4/96 (2) 33,300 33,300
Intermountain Power Agency UT CP
3.70%-3.75%, 4/8/96-4/9/96 LOC 20,500 20,500
Salt Lake City UT CP
(Pooled Hosp. Financing Program)
3.25%, 5/17/96 22,800 22,800
Utah GO
6.00%, 7/1/96 5,000 5,043
----------
STATE TOTAL 117,143
----------
- --------------------------------------------------------------------------------
VERMONT (1.0%)
Vermont GO RAN CP
3.65%-3.75%, 3/15/96-4/9/96 42,500 42,502
----------
- --------------------------------------------------------------------------------
VIRGINIA (2.4%)
Commonwealth of Virginia GO BAN
CP 3.15%, 5/21/96 10,000 10,000
Fairfax VA IDA
(Inova Hosp. Project)
CP 3.20%-3.35%, 4/1/96-5/30/96 8,800 8,800
VRDO 3.40%, 3/6/96 18,500 18,500
IDA of Chesapeake VA
(Virginia Electric Power Co.)
3.75%, 3/7/96 5,000 5,000
Virginia Housing Development Auth.
Commonwealth Mortgage PUT
3.10%, 5/30/96 55,000 55,000
York County VA IDA PCR CP
(Virginia Electric Power Co.)
3.35%, 5/13/96 9,600 9,600
----------
STATE TOTAL 106,900
----------
- --------------------------------------------------------------------------------
WASHINGTON (3.0%)
Port of Seattle WA GO VRDO
3.30%, 3/6/96 2,500 2,500
Seattle WA Municipal
Light & Power
CP 3.20%, 5/7/96 3,500 3,500
VRDO 3.30%, 3/6/96 30,700 30,700
</TABLE>
6
<PAGE> 29
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Seattle WA Water System
Rev. VRDO
3.30%, 3/6/96 LOC $19,800 $ 19,800
Washington GO
3.80%, 10/1/96 6,000 6,010
8.00%, 9/1/96 (Prere.) 9,200 9,383
VRDO 3.35%, 3/6/96 60,000 60,000
----------
STATE TOTAL 131,893
----------
- --------------------------------------------------------------------------------
WISCONSIN (3.3%)
Milwaukee WI Industrial
Development VRDO
(Wisconsin Electric Power
Co. Project)
3.30%, 3/7/96 10,000 10,000
Milwaukee WI School
Order Notes
4.50%, 8/22/96 20,000 20,046
Oak Creek WI VRDO
(Wisconsin Electric Power
Co. Project)
3.40%, 3/6/96 33,800 33,800
Village of Pleasant Praise WI
PCR VRDO
(Wisconsin Electric Power
Co. Project)
3.30%, 3/7/96 18,500 18,500
Wisconsin GO TOB VRDO
3.30%, 3/6/96 25,570 25,570
Wisconsin Operating Notes
4.50%, 6/17/96 35,000 35,082
----------
STATE TOTAL 142,998
----------
- --------------------------------------------------------------------------------
WYOMING (1.2%)
Lincoln WY PCR VRDO (Exxon)
3.35%, 3/4/96 24,200 24,200
Sublette County WY VRDO
(Exxon Project)
3.35%, 3/4/96 8,000 8,000
Sweetwater County WY
PCR PUT (Chevron Project)
4.30%, 6/15/96 6,800 6,833
Uinta County WY PCR
(Chevron Project)
VRDO 3.35%, 3/4/96 5,900 5,900
PUT 4.30%, 6/15/96 6,150 6,180
----------
STATE TOTAL 51,113
----------
- --------------------------------------------------------------------------------
TOTAL MUNICIPAL MONEY MARKET
INSTRUMENTS
(Cost $4,383,297) 4,383,297
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (-.2%)
- --------------------------------------------------------------------------------
Other Assets--Note B 91,194
Liabilities (98,291)
----------
(7,097)
- --------------------------------------------------------------------------------
NET ASSETS (100%)
- --------------------------------------------------------------------------------
Applicable to 4,376,908,716 outstanding
$.001 par value shares
(authorized 5,500,000,000 shares) $4,376,200
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE $1.00
================================================================================
</TABLE>
+ See Note A to Financial Statements.
For explanations of abbreviations and other references, see page 48.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AT FEBRUARY 29, 1996,
NET ASSETS CONSISTED OF:
- --------------------------------------------------------------------------------
Amount Per
(000) Share
---------- --------
<S> <C> <C>
PAID IN CAPITAL $4,376,923 $1.00
UNDISTRIBUTED NET
INVESTMENT INCOME -- --
ACCUMULATED NET
REALIZED LOSSES (723) --
UNREALIZED APPRECIATION
OF INVESTMENTS -- --
- --------------------------------------------------------------------------------
NET ASSETS $4,376,200 $1.00
- --------------------------------------------------------------------------------
</TABLE>
7
<PAGE> 30
<TABLE>
<CAPTION>
Face Market
SHORT-TERM Amount Value
PORTFOLIO (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS (98.8%)
- --------------------------------------------------------------------------------
ALABAMA (1.8%)
Birmingham AL GO VRDO
3.35%, 3/7/96 LOC $ 9,700 $ 9,700
Columbia AL IDA PCR VRDO
(Alabama Power Co. Project)
3.50%, 3/4/96 8,400 8,400
City of Huntsville AL Health
Care Auth.
VRDO 3.25%, 3/7/96 (1) 7,700 7,700
----------
STATE TOTAL 25,800
----------
- --------------------------------------------------------------------------------
ALASKA (2.5%)
Alaska Housing Finance
Corp. VRDO
3.20%, 3/6/96 6,700 6,700
3.40%, 3/6/96 14,100 14,100
North Slope Borough AK GO
7.125%, 7/1/98 (1) 7,710 8,253
7.15%, 7/1/99 (1) 5,670 6,193
----------
STATE TOTAL 35,246
----------
- --------------------------------------------------------------------------------
ARIZONA (.5%)
Arizona Transportation Board-
Maricopa County Regional Area
5.50%, 7/1/98 (2) 7,315 7,595
----------
- --------------------------------------------------------------------------------
CALIFORNIA (9.6%)
Alameda County CA Public
Facilities Corp. COP PUT
6.15%, 9/1/96 LOC 5,000 5,011
Anaheim CA Public Improvement
Corp. Lease COP VRDO
3.05%, 3/6/96 (2) LOC 3,630 3,630
California Dept. of Water
(Central Valley Project)
8.75%, 12/1/00 4,540 5,410
California GO
10.00%, 4/1/97 (2) 10,000 10,694
California Health Facilities Auth.
(Adventist Health System
West Sutter Health)
VRDO 2.85%, 3/7/96 LOC 700 700
California Higher Education Loan
Auth. Student Loan Rev. VRDO
3.25%, 3/6/96 LOC 11,700 11,700
Los Angeles CA COP
5.50%, 12/1/96 3,400 3,446
Los Angeles CA Dept. of Water &
Power Rev.
9.00%, 11/15/97 5,855 6,354
Orange County CA Sanitation
Dist. VRDO
2.95%, 3/7/96 (2) LOC 21,431 21,431
3.20%, 3/4/96 LOC 3,600 3,600
Riverside County CA VRDO
(Public Facilities Project)
3.05%, 3/5/96 LOC 10,625 10,625
3.85%, 3/5/96 LOC 2,855 2,855
Sacramento CA Utility Rev.
7.875%, 8/15/98 (Prere.) 4,000 4,459
Sacramento County CA TRAN
4.75%, 10/4/96 20,000 20,175
San Diego CA Unified School Dist.
TRAN 4.75%, 10/10/96 LOC 10,000 10,088
San Diego County CA TRAN
4.50%, 9/30/96 15,000 15,107
Santa Clara County CA Finance
Auth. Lease Rev. VRDO
2.90%, 3/6/96 2,000 2,000
----------
STATE TOTAL 137,285
----------
- --------------------------------------------------------------------------------
COLORADO (.2%)
Colorado TRAN
4.50%, 6/27/96 3,200 3,211
----------
- --------------------------------------------------------------------------------
CONNECTICUT (1.1%)
Connecticut Development Auth.
PCR VRDO
(Connecticut Light & Power Co.)
3.15%, 3/6/96 LOC 11,230 11,230
Connecticut Economic
Recovery Notes VRDO
3.30%, 3/6/96 2,100 2,100
Connecticut GO
5.65%, 11/15/98 2,500 2,619
----------
STATE TOTAL 15,949
----------
- --------------------------------------------------------------------------------
DISTRICT OF COLUMBIA (.7%)
District of Columbia GO
0.00%, 6/1/00 (1) 6,900 5,676
5.60%, 6/1/96 (3) 5,000 5,027
----------
STATE TOTAL 10,703
----------
- --------------------------------------------------------------------------------
FLORIDA (5.8%)
Dade County FL School Dist.
7.00%, 8/1/98 (3) 7,510 8,064
Dade County FL Water & Sewer
System Rev. VRDO
3.05%, 3/6/96 (3) 16,320 16,320
Gulf Breeze FL Local Govt.
Loan Program VRDO
3.10%, 3/7/96 (3) 18,640 18,640
</TABLE>
8
<PAGE> 31
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Hillsborough County FL
IDA PCR VRDO
(Tampa Electric Co.)
3.35%, 3/4/96 $ 3,600 $ 3,600
Jacksonville FL Hosp. Rev.
10.50%, 10/1/97 (Prere.) 8,000 8,992
Jacksonville FL Transportation Auth.
9.00%, 1/1/98 (Prere.) 3,780 4,203
Orlando FL Utilities Comm.
Water & Electric Rev.
BAN VRDO 3.10%, 3/7/96 12,550 12,550
4.40%, 10/1/96 3,255 3,276
Tampa FL Utilities Auth.
8.00%, 10/1/97 (Prere.) 7,700 8,366
----------
STATE TOTAL 84,011
----------
- --------------------------------------------------------------------------------
GEORGIA (3.2%)
Burke County GA Development
Auth. VRDO
(Oglethorpe Power)
3.05%, 3/6/96 (3) 17,000 17,000
Georgia GO
6.80%, 8/1/97 4,815 5,036
6.80%, 8/1/98 6,155 6,597
7.40%, 8/1/00 5,000 5,672
7.70%, 4/1/99 5,000 5,545
Gwinnett County GA Water &
Sewer Auth.
8.75%, 8/1/96 (Prere.) 6,000 6,255
----------
STATE TOTAL 46,105
----------
- --------------------------------------------------------------------------------
HAWAII (2.4%)
Hawaii GO
5.00%, 11/1/96 12,870 13,014
5.00%, 11/1/97 1,250 1,278
5.00%, 11/1/98 16,000 16,495
Honolulu HI City & County GO
9.00%, 3/1/96 3,000 3,001
----------
STATE TOTAL 33,788
----------
- --------------------------------------------------------------------------------
ILLINOIS (6.9%)
Chicago IL GO
VRDO 3.90%, 3/7/96 LOC 27,100 27,100
7.50%, 1/1/99 (Prere.) 5,000 5,554
Chicago IL Metropolitan
Sanitation Dist.
7.85%, 1/1/98 (Prere.) 5,600 6,110
Chicago IL Metropolitan Water
7.25%, 1/1/99 (Prere.) 3,490 3,791
Chicago IL Metropolitan Water
Capital Improvement
6.40%, 1/1/00 5,000 5,397
Chicago IL Public Building Comm.
4.50%, 12/1/98 (1) 8,000 8,116
7.75%, 1/1/99 (Prere.) 5,000 5,587
Chicago IL School Finance Auth. GO
4.40%, 6/1/98 (1) 6,755 6,821
Illinois GO
5.50%, 8/1/98 7,700 7,975
Illinois Housing Development
Auth. VRDO
3.65%, 3/6/96 LOC 15,000 15,000
Illinois Toll Highway Auth. Rev.
VRDO 3.05%, 3/6/96 (1) LOC 7,600 7,600
----------
STATE TOTAL 99,051
----------
- --------------------------------------------------------------------------------
INDIANA (.3%)
Merriville IN
7.50%, 7/15/00 (Prere.) 4,000 4,594
----------
- --------------------------------------------------------------------------------
LOUISIANA (1.4%)
Louisiana GO
8.00%, 5/1/97 (2) 6,030 6,344
Louisiana Recovery Dist. Sales Tax
VRDO 3.50%, 3/4/96 (3) 3,400 3,400
5.50%, 7/1/97 10,000 10,217
----------
STATE TOTAL 19,961
----------
- --------------------------------------------------------------------------------
MAINE (.7%)
Maine Municipal Bond Bank
3.875%, 11/1/96 10,000 10,034
----------
- --------------------------------------------------------------------------------
MASSACHUSETTS (6.4%)
Massachusetts Bay
Transportation Auth.
7.10%, 3/1/99 (3) (Prere.) 7,800 8,617
Massachusetts Consolidated Loan
7.00%, 6/1/99 (Prere.) 10,000 11,066
7.50%, 2/1/99 (3) (Prere.) 6,400 7,097
Massachusetts GO
5.50%, 7/1/99 10,000 10,439
5.70%, 8/1/96 8,000 8,077
7.25%, 7/1/98 (Prere.) 5,000 5,452
9.25%, 7/1/00 10,000 11,945
Massachusetts Municipal
Wholesale Electric
6.00%, 7/1/97 2,355 2,422
Massachusetts Turnpike
Auth. BAN
5.00%, 6/1/99 7,000 7,198
Massachusetts Water
Resources Auth.
7.625%, 4/1/00 (Prere.) 17,645 20,212
----------
STATE TOTAL 92,525
----------
- --------------------------------------------------------------------------------
</TABLE>
9
<PAGE> 32
<TABLE>
<CAPTION>
Face Market
SHORT-TERM Amount Value
PORTFOLIO (continued) (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
MICHIGAN (1.0%)
Michigan Trunk Line
5.50%, 11/15/98 $13,720 $ 14,293
----------
- --------------------------------------------------------------------------------
MINNESOTA (.4%)
Minnesota GO
6.00%, 8/1/99 5,730 6,112
----------
- --------------------------------------------------------------------------------
MISSISSIPPI (.6%)
Jackson County MS Port Facilities
Rev. VRDO
(Chevron)
3.35%, 3/4/96 8,500 8,500
----------
- --------------------------------------------------------------------------------
MISSOURI (.9%)
Missouri Health & Educational
Facilities Auth. VRDO
(St. Anthony's Medical Center)
3.65%, 3/5/96 7,200 7,200
St. Louis MO VRDO
(Sisters of Mercy Health System)
3.15%, 3/7/96 4,600 4,600
----------
STATE TOTAL 11,800
----------
- --------------------------------------------------------------------------------
NEVADA (1.1%)
Clark County NV Airport
VRDO 3.05%, 3/6/96 (1) 11,675 11,675
13.25%, 7/1/97 (Prere.) 3,015 3,392
----------
STATE TOTAL 15,067
----------
- --------------------------------------------------------------------------------
NEW JERSEY (.3%)
New Jersey Sports and Exposition
Auth. VRDO
3.10%, 3/7/96 (1) 3,800 3,800
----------
- --------------------------------------------------------------------------------
NEW MEXICO (.3%)
Albuquerque NM Water & Sewer
5.90%, 7/1/98 (ETM) 4,105 4,297
----------
- --------------------------------------------------------------------------------
NEW YORK (9.7%)
Erie County NY Water Auth.
Waterworks System Rev. VRDO
3.10%, 3/6/96 (2) 6,000 6,000
Nassau County NY
General Improvement
5.125%, 11/1/99 (3) 7,525 7,798
New York City NY GO
VRDO 3.15%, 3/6/96 LOC 12,100 12,100
VRDO 3.35%, 3/6/96 LOC 9,100 9,100
6.80%, 2/1/97 9,985 10,265
6.80%, 2/1/97 (Prere.) 2,990 3,084
New York Medical Care Facilities
Finance Agency Rev.
7.80%, 2/15/99 (Prere.) 5,000 5,623
8.00%, 8/15/97 (Prere.) (8) 8,700 9,393
8.875%, 8/15/97 (Prere.) 12,100 13,250
(Mental Health Service)
7.90%, 8/15/96 8,145 8,305
New York State Dormitory Auth.
(City Univ.)
4.90%, 7/1/96 5,205 5,229
5.25%, 7/1/97 2,780 2,831
7.625%, 7/1/00 (Prere.) 21,600 24,950
(State Univ.)
7.25%, 5/15/00 (Prere.) 2,070 2,354
New York State Local Govt.
Assistance Corp. VRDO
3.10%, 3/6/96 LOC 2,900 2,900
New York State Thruway Auth.
(Highway & Bridge Trust Fund)
5.00%, 4/1/98 8,750 8,890
New York Urban Development Corp.
7.75%, 1/1/00 (Prere.) 3,900 4,469
Triborough Bridge & Tunnel NY Rev.
TOB VRDO 3.25%, 3/7/96 3,200 3,200
----------
STATE TOTAL 139,741
----------
- --------------------------------------------------------------------------------
NORTH CAROLINA (1.4%)
Charlotte NC Airport Refunding Rev.
VRDO 3.05%, 3/6/96 (1) 800 800
North Carolina Eastern Municipal
Power Agency
7.25%, 1/1/99 (Prere.) 3,000 3,317
North Carolina Medical Care VRDO
(Duke Univ. Hosp.)
3.20%, 3/7/96 9,200 9,200
North Carolina Municipal
Power Agency
7.875%, 1/1/98 (Prere.) 6,000 6,553
----------
STATE TOTAL 19,870
----------
- --------------------------------------------------------------------------------
OHIO (4.6%)
Columbus OH Electric System VRDO
3.35%, 4/1/96 LOC 3,040 3,040
Columbus OH GO VRDO
3.05%, 3/7/96 2,600 2,600
Columbus OH Refunding
Limited Tax
3.90%, 7/1/97 4,850 4,877
Columbus OH Sewer Rev. VRDO
3.05%, 3/7/96 7,200 7,200
Ohio Air Quality Development
Auth. VRDO
(Cincinnati Gas and Electric Project)
3.35%, 3/4/96 LOC 1,400 1,400
3.45%, 3/4/96 LOC 11,200 11,200
Ohio Public Facilities Comm.
4.25%, 6/1/96 12,660 12,688
5.30%, 12/1/96 5,000 5,068
</TABLE>
10
<PAGE> 33
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Ohio Student Loan Rev. VRDO
(Student Loan Funding Corp.
of Cincinnati)
3.75%, 3/6/96 LOC $10,800 $ 10,800
Ohio Water Development Auth.
Water Rev.
4.60%, 6/1/96 6,800 6,821
----------
STATE TOTAL 65,694
----------
- --------------------------------------------------------------------------------
OKLAHOMA (1.7%)
Grand River Dam OK Auth.
4.90%, 6/1/98 10,000 10,226
Oklahoma Industries Auth.
Health System Rev.
VRDO 3.35%, 3/6/96 14,625 14,625
----------
STATE TOTAL 24,851
----------
- --------------------------------------------------------------------------------
OREGON (1.9%)
Oregon Veterans Welfare Program
VRDO 3.35%, 3/6/96 27,200 27,200
----------
- --------------------------------------------------------------------------------
PENNSYLVANIA (5.4%)
Berks County PA GO
7.25%, 11/15/20 (Prere.) (3) 6,700 7,684
Geisinger PA Health Systems Rev.
VRDO 3.40%, 3/4/96 5,100 5,100
Pennsylvania GO
10.00%, 4/15/98 16,000 17,956
Pennsylvania Higher Education
Facilities Auth. VRDO
(Temple Univ.)
3.40%, 3/4/96 LOC 9,100 9,100
Philadelphia PA GO
5.25%, 11/15/96 (3) 4,150 4,204
5.75%, 11/15/98 (3) 6,655 6,970
6.00%, 11/15/99 (3) 10,000 10,647
Philadelphia PA School Dist.
6.60%, 7/1/98 (1) 4,815 5,115
6.70%, 7/1/99 (1) 5,145 5,566
Philadelphia PA Water & Sewer
6.90%, 10/1/99 (Prere.) 5,000 5,558
----------
STATE TOTAL 77,900
----------
- --------------------------------------------------------------------------------
SOUTH CAROLINA (.7%)
Greenville SC Hosp. System
Facility Rev. VRDO
3.20%, 3/7/96 10,300 10,300
----------
- --------------------------------------------------------------------------------
TENNESSEE (3.1%)
Metropolitan Govt. of Nashville &
Davidson County TN
10.50%, 12/1/97 (Prere.) 5,750 6,411
Nashville TN Airport Improvement
VRDO 3.30%, 3/6/96 (3) 28,000 28,000
Tennessee GO
5.00%, 5/1/99 10,070 10,412
----------
STATE TOTAL 44,823
----------
- --------------------------------------------------------------------------------
TEXAS (12.3%)
Austin TX Combined Utility
System Rev.
7.60%, 11/15/99 (1) 5,000 5,602
11.125%, 11/15/99 (Prere.) 4,000 4,958
14.25%, 5/15/97 (Prere.) 7,090 7,989
Dallas TX GO
4.25%, 2/15/97 3,405 3,435
6.00%, 2/15/97 2,750 2,819
Fort Worth TX Water & Sewer Rev.
5.60%, 2/15/98 3,500 3,621
Gulf Coast TX Waste Disposal Auth.
PCR VRDO
(Amoco Oil Project)
3.35%, 3/4/96 3,000 3,000
Harris County TX Health Facilities
Development Corp. VRDO
(Methodist Hosp.)
3.45%, 3/4/96 27,000 27,000
Harris County TX Toll Road VRDO
3.15%, 3/6/96 43,500 43,500
Houston TX Hotel Occupancy Rev.
6.00%, 7/1/99 (4) 4,000 4,222
Houston TX Water & Sewer System
8.10%, 12/1/96 (Prere.) 10,000 10,551
Northside TX Independent
School Dist.
4.90%, 2/1/00 5,000 5,136
Texas Municipal Power Agency Rev.
5.00%, 9/1/96 5,000 5,039
14.25%, 3/1/97 (Prere.) 5,250 5,812
Texas National Research GO
7.125%, 4/1/00 (Prere.) 11,805 13,303
Texas Public Finance Auth.
GO CP 3.15%, 3/5/96 7,200 7,200
8.00%, 10/1/98 3,000 3,311
Texas TRAN
4.75%, 8/30/96 20,800 20,948
----------
STATE TOTAL 177,446
----------
- --------------------------------------------------------------------------------
UTAH (1.2%)
Emery County UT PCR VRDO
(Pacific Project)
3.40%, 3/4/96 (2) 9,100 9,100
Intermountain Power Agency UT
7.00%, 7/1/99 (Prere.) 5,100 5,654
7.75%, 7/1/96 (Prere.) 2,500 2,587
----------
STATE TOTAL 17,341
----------
- --------------------------------------------------------------------------------
</TABLE>
11
<PAGE> 34
<TABLE>
<CAPTION>
Face Market
SHORT-TERM Amount Value
PORTFOLIO (continued) (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
VIRGINIA (.2%)
Virginia Public School Auth.
7.30%, 1/1/97 (Prere.) $ 3,345 $ 3,520
----------
- --------------------------------------------------------------------------------
WASHINGTON (6.3%)
King County WA GO
6.70%, 1/1/99 9,000 9,653
Snohomish County WA Public
Utility Dist. Rev.
5.00%, 1/1/00 (3) 3,000 3,079
9.75%, 1/1/99 (3) 5,315 6,111
Washington GO
7.00%, 10/1/96 6,405 6,540
7.60%, 9/1/96 (Prere.) 4,325 4,418
7.75%, 12/1/98 (Prere.) 2,500 2,757
8.00%, 9/1/96 (Prere.) 21,695 22,204
8.60%, 10/1/97 (Prere.) 5,000 5,381
9.20%, 5/1/96 (Prere.) 2,300 2,323
9.30%, 5/1/96 (Prere.) 5,000 5,051
Washington Health Care Auth.
(Empire Health Spokane)
8.00%, 11/1/97 (1)(Prere.) 9,200 10,021
Washington Motor Vehicle Fuel Tax
8.00%, 9/1/96 (Prere.) 12,750 13,049
----------
STATE TOTAL 90,587
----------
- --------------------------------------------------------------------------------
WEST VIRGINIA (.5%)
West Virginia School Building Auth.
6.00%, 7/1/98 7,000 7,327
----------
- --------------------------------------------------------------------------------
WISCONSIN (.8%)
Milwaukee WI GO
5.00%, 6/1/96 7,710 7,741
Wisconsin GO
7.00%, 5/1/98 (Prere.) 3,185 3,428
----------
STATE TOTAL 11,169
----------
- --------------------------------------------------------------------------------
WYOMING (.9%)
Lincoln County WY PCR VRDO
(Exxon Project)
3.35%, 3/4/96 3,600 3,600
Sublette County WY VRDO
(Exxon Project)
3.35%, 3/4/96 8,900 8,900
----------
STATE TOTAL 12,500
----------
- --------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(Cost $1,408,774) 1,419,996
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (1.2%)
- --------------------------------------------------------------------------------
Other Assets--Note B 21,155
Liabilities (3,912)
----------
17,243
- --------------------------------------------------------------------------------
NET ASSETS (100%)
- --------------------------------------------------------------------------------
Applicable to 91,976,118 outstanding
$.001 par value shares
(authorized 250,000,000 shares) $1,437,239
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE $15.63
================================================================================
</TABLE>
+ See Note A to Financial Statements.
For explanations of abbreviations and other references, see page 48.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AT FEBRUARY 29, 1996,
NET ASSETS CONSISTED OF:
- --------------------------------------------------------------------------------
Amount Per
(000) Share
---------- ------
<S> <C> <C>
PAID IN CAPITAL $1,425,829 $15.51
UNDISTRIBUTED NET
INVESTMENT INCOME -- --
ACCUMULATED NET
REALIZED GAINS 188 --
UNREALIZED APPRECIATION OF
INVESTMENTS--NOTE F 11,222 .12
- --------------------------------------------------------------------------------
NET ASSETS $1,437,239 $15.63
- --------------------------------------------------------------------------------
</TABLE>
12
<PAGE> 35
<TABLE>
<CAPTION>
Face Market
LIMITED-TERM Amount Value
PORTFOLIO (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS (100.1%)
- --------------------------------------------------------------------------------
ALABAMA (.3%)
Columbia AL IDA PCR VRDO
(Alabama Power Co. Project)
3.45%, 3/4/96 $ 1,600 $ 1,600
3.50%, 3/4/96 4,100 4,100
Huntsville AL Health Care Auth.
VRDO 3.05%, 3/7/96 (1) 500 500
----------
STATE TOTAL 6,200
----------
- --------------------------------------------------------------------------------
ALASKA (1.8%)
Alaska Housing Finance Corp.
VRDO 3.40%, 3/6/96 3,600 3,600
Anchorage AK GO
4.70%, 8/1/01 (1) 5,000 5,074
North Slope Borough AK GO
0.00%, 6/30/97 (1) 1,000 950
7.25%, 6/30/00 (5) 20,000 22,299
Valdez AK Marine Terminal VRDO
(Exxon Pipe Project)
3.35%, 3/4/96 400 400
----------
STATE TOTAL 32,323
----------
- --------------------------------------------------------------------------------
ARIZONA (2.4%)
Arizona Transportation Board-
Maricopa County Regional Area
6.00%, 7/1/02 (2) 25,185 27,493
Maricopa County AZ School Dist.
6.00%, 7/1/97 (2) 10,000 10,314
City of Mesa AZ Utility System Rev.
6.10%, 7/1/96 (3) 4,000 4,037
----------
STATE TOTAL 41,844
----------
- --------------------------------------------------------------------------------
CALIFORNIA (8.2%)
Alameda County CA Public
Facilities Corp. COP
6.15%, 9/1/96 LOC 10,000 10,023
California GO
7.50%, 11/1/03 (3) 6,000 7,154
8.90%, 3/1/97 3,000 3,161
10.00%, 4/1/98 19,600 21,941
10.50%, 10/1/00 3,000 3,756
California Dept. of Water
(Central Valley Project)
8.25%, 12/1/01 4,790 5,735
8.25%, 12/1/02 5,060 6,175
8.25%, 12/1/05 5,685 7,230
Clovis CA Unified School Dist.
4.50%, 8/1/96 11,250 11,303
Contra Costa CA Transportation
Auth. Sales Tax Rev.
6.00%, 3/1/96 4,165 4,166
6.00%, 3/1/97 2,580 2,649
East Bay CA Municipal Utility
Dist. Rev.
6.00%, 6/1/00 (3) 3,000 3,211
6.00%, 6/1/02 (3) 2,000 2,175
Irvine CA Assessment Dist. VRDO
3.75%, 3/4/96 LOC 2,052 2,052
Los Angeles CA COP
5.50%, 12/1/96 5,000 5,068
6.00%, 5/1/96 3,000 3,010
Los Angeles CA Dept. of Water &
Power Waterworks Rev.
9.00%, 5/15/02 9,135 11,301
9.00%, 5/15/03 5,355 6,760
San Bernardino County CA
Transportation Auth.
3.75%, 3/1/97 (1) 4,280 4,295
San Diego CA Area Local Govt.
TRAN 4.75%, 10/18/96 7,000 7,057
San Diego CA Unified School Dist.
TRAN 4.75%, 10/10/96 LOC 5,000 5,044
Santa Clara County CA Finance
Auth. Lease Rev.
VRDO 2.90%, 3/6/96 2,700 2,700
University of California Rev.
10.00%, 9/1/01 (2) 5,500 6,979
----------
STATE TOTAL 142,945
----------
- --------------------------------------------------------------------------------
COLORADO (.1%)
Colorado Health Facility Auth.
(Sisters of Charity Health
System Inc.)
5.75%, 5/15/96 2,400 2,412
----------
- --------------------------------------------------------------------------------
CONNECTICUT (3.9%)
Connecticut GO
9.875%, 3/1/01 6,750 8,423
Connecticut Development Auth.
PCR VRDO
(Connecticut Light & Power)
3.15%, 3/6/96 LOC 6,800 6,800
Connecticut Special Assessment
Unemployment Compensation
4.00%, 5/15/96 10,175 10,187
4.00%, 11/15/96 20,295 20,382
Connecticut Special Tax
Obligation Rev.
4.00%, 10/1/99 11,000 10,989
4.80%, 9/1/97 6,350 6,463
6.25%, 10/1/02 (3) 4,000 4,431
----------
STATE TOTAL 67,675
----------
- --------------------------------------------------------------------------------
DISTRICT OF COLUMBIA (.2%)
District of Columbia GO
6.00%, 6/1/97 (1) 3,250 3,342
----------
- --------------------------------------------------------------------------------
</TABLE>
13
<PAGE> 36
<TABLE>
<CAPTION>
Face Market
LIMITED-TERM Amount Value
PORTFOLIO (continued) (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
FLORIDA (5.8%)
Dade County FL Aviation Rev.
4.30%, 10/1/96 $ 2,500 $ 2,513
Dade County FL School Dist.
5.00%, 7/15/02 (1) 5,000 5,196
6.80%, 7/1/96 3,150 3,187
7.375%, 7/1/08 (Prere.) 19,600 21,997
Dade County FL Water & Sewer
System VRDO
3.05%, 3/6/96 (3) 2,935 2,935
Florida Board of Education
(Capital Outlay Rev.)
6.50%, 6/1/04 5,565 6,321
Florida Dept. of General Services
6.10%, 7/1/97 (2) 6,900 7,134
Florida Govt. Finance
Comm. Rev.
CP 3.20%, 4/11/96 LOC 4,300 4,300
Florida Municipal
Power Agency
(St. Lucie Project)
4.20%, 10/1/96 (3) 2,055 2,066
4.40%, 10/1/97 (3) 2,230 2,257
Florida Turnpike Auth. Rev.
9.50%, 7/1/99 (2) 4,000 4,680
Hillsborough County FL
Aviation Auth.
(Tampa Airport)
3.90%, 10/1/96 (3) 7,155 7,179
City of Homestead FL Special
Insurance Assessment Rev.
4.20%, 9/1/96 (1) 6,025 6,050
4.20%, 9/1/96 (1) (Prere.) 165 166
4.40%, 3/1/97 (1) 7,010 7,084
4.40%, 3/1/97 (1) (Prere.) 190 192
City of Lakeland FL Electric &
Water Rev.
6.25%, 10/1/02 (3)++ 5,000 5,460
Lee County FL School Board
6.00%, 8/1/02 (4) 2,750 2,989
Palm Beach FL Solid Waste
Auth. Rev.
8.00%, 7/1/98 4,000 4,316
Port Everglade FL Port
Facilities Rev.
7.00%, 9/1/97 (4) 2,600 2,731
City of Sunrise FL Public Service
8.00%, 10/1/97 (2) 2,035 2,166
----------
STATE TOTAL 100,919
----------
- --------------------------------------------------------------------------------
GEORGIA (3.2%)
Burke County GA Development
Auth. VRDO
(Oglethorpe Power)
3.05%, 3/6/96 (3) 1,500 1,500
Burke County GA PCR VRDO
(Georgia Power)
3.40%, 3/4/96 8,600 8,600
3.45%, 3/4/96 1,600 1,600
Georgia GO
5.75%, 3/1/02 5,600 6,047
7.25%, 7/1/02 5,620 6,550
7.25%, 9/1/02 8,160 9,542
7.40%, 8/1/02 12,360 14,528
Metropolitan Atlanta GA Rapid
Transportation Auth.
6.35%, 7/1/04 3,560 3,904
Monroe County GA
Development Auth.
(Oglethorpe Power)
5.10%, 1/1/97 3,880 3,934
----------
STATE TOTAL 56,205
----------
- --------------------------------------------------------------------------------
HAWAII (1.7%)
Hawaii Airport System Rev.
4.85%, 7/1/96 (1) 1,765 1,774
5.10%, 7/1/97 (1) 1,855 1,891
7.50%, 7/1/97 3,890 4,030
Hawaii GO
4.50%, 1/1/98 5,000 5,069
4.60%, 1/1/97 5,500 5,558
5.00%, 11/1/97 4,000 4,091
Honolulu HI City & County GO
4.60%, 10/1/99 6,500 6,627
----------
STATE TOTAL 29,040
----------
- --------------------------------------------------------------------------------
ILLINOIS (3.5%)
Chicago IL GO
6.25%, 10/31/02 (1) 4,250 4,674
Chicago IL Water Capital
Improvement
4.70%, 12/1/99 7,710 7,880
4.90%, 12/1/01 9,290 9,567
Chicago IL Water Rev.
4.70%, 11/1/97 (2) 3,250 3,305
Cook County IL GO
4.75%, 11/15/97 (3) 5,000 5,090
Dupage County IL Rev.
(Storm Water Project)
6.55%, 1/1/02 (Prere.) 10,000 11,267
Illinois GO
6.40%, 8/1/01 5,365 5,795
</TABLE>
14
<PAGE> 37
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Illinois Sales Tax Rev.
6.90%, 6/15/97 $ 2,000 $ 2,084
7.20%, 6/1/99 (Prere.) 7,600 8,464
Metropolitan Water Recovery Dist.
of Chicago IL
6.80%, 1/1/97 3,400 3,498
----------
STATE TOTAL 61,624
----------
- --------------------------------------------------------------------------------
KANSAS (.2%)
Kansas City KS Utility System Rev.
5.80%, 3/1/96 (2) 3,155 3,155
----------
- --------------------------------------------------------------------------------
KENTUCKY (1.1%)
Kentucky Development Finance
Auth. Hosp. Rev.
6.10%, 11/1/96 (3) 3,105 3,162
Kentucky Property &
Building Commission
6.00%, 11/1/02 2,000 2,176
6.75%, 11/1/99 9,500 10,349
Kentucky Turnpike Auth.
4.30%, 7/1/97 (2) 3,150 3,182
----------
STATE TOTAL 18,869
----------
- --------------------------------------------------------------------------------
LOUISIANA (1.5%)
East Baton Rouge Parish LA VRDO
(Exxon Project)
3.40%, 3/4/96 6,200 6,200
Louisiana Recovery Dist. Sales Tax
VRDO 3.50%, 3/4/96 (3) 300 300
5.50%, 7/1/97 6,000 6,130
7.625%, 7/1/96 2,250 2,277
New Orleans LA GO
6.50%, 10/1/01 (2) 10,655 11,808
----------
STATE TOTAL 26,715
----------
- --------------------------------------------------------------------------------
MAINE (.9%)
Maine Health & Higher Education
(Sebasticook Hosp.)
10.10%, 7/1/01 (Prere.) 4,450 5,728
Maine Municipal Bond Bank
4.125%, 11/1/97 10,000 10,073
----------
STATE TOTAL 15,801
----------
- --------------------------------------------------------------------------------
MARYLAND (.3%)
Maryland Dept. of Transportation
6.70%, 8/15/99 (Prere.) 5,000 5,500
----------
- --------------------------------------------------------------------------------
MASSACHUSETTS (5.7%)
Massachusetts GO
5.80%, 8/1/97 7,000 7,209
6.25%, 7/1/02 12,500 13,745
6.875%, 7/1/01 (Prere.) 17,400 19,820
7.00%, 7/1/98 LOC 10,000 10,677
9.25%, 7/1/00 10,000 11,945
Massachusetts Turnpike Auth.
BAN 5.00%, 6/1/99 4,000 4,113
Massachusetts Water
Resources Auth.
BAN 4.30%, 10/15/96 7,000 7,043
5.80%, 7/15/97 7,145 7,341
6.875%, 12/1/01 (Prere.) 9,945 11,410
7.30%, 4/1/00 (Prere.) 5,000 5,667
----------
STATE TOTAL 98,970
----------
- --------------------------------------------------------------------------------
MICHIGAN (2.6%)
Detroit MI GO
5.60%, 5/1/00 (2) 7,040 7,400
5.70%, 5/1/01 (2) 5,000 5,309
Michigan GO
(Environmental Protection
Program)
6.00%, 11/1/02 4,845 5,309
(Recreation Program)
6.00%, 11/1/00 11,910 12,847
6.00%, 11/1/01 5,910 6,432
Michigan State Building Auth.
6.30%, 10/1/03 (4) 7,800 8,584
----------
STATE TOTAL 45,881
----------
- --------------------------------------------------------------------------------
MINNESOTA (.1%)
Minnesota GO
4.50%, 8/1/96 2,500 2,513
----------
- --------------------------------------------------------------------------------
MISSOURI (1.6%)
Kansas City MO School Dist.
10.50%, 2/1/99 (3) 7,545 8,853
Missouri Higher Education
Loan Auth.
5.15%, 2/15/98 11,365 11,581
St. Louis MO VRDO
(Sisters of Mercy Health System)
3.15%, 3/7/96 6,800 6,800
----------
STATE TOTAL 27,234
----------
- --------------------------------------------------------------------------------
NEBRASKA (.1%)
Omaha NE Public Power Dist.
4.35%, 2/1/98 2,400 2,427
----------
- --------------------------------------------------------------------------------
NEVADA (1.1%)
Clark County NV School Dist. GO
9.75%, 6/1/01 (1) 10,000 12,510
Nevada GO
9.70%, 5/1/97 6,275 6,718
----------
STATE TOTAL 19,228
----------
- --------------------------------------------------------------------------------
NEW JERSEY (4.6%)
Camden County NJ GO
4.65%, 6/1/97 (1) 3,565 3,616
</TABLE>
15
<PAGE> 38
<TABLE>
<CAPTION>
Face Market
LIMITED-TERM Amount Value
PORTFOLIO (continued) (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
New Jersey Health Care
Facility Finance Auth. Rev.
(Union Hosp./Mega Care)
5.40%, 7/1/96 $ 2,170 $ 2,180
5.75%, 7/1/97 2,670 2,716
New Jersey Transportation
Trust Fund
3.80%, 6/15/96 17,695 17,719
4.10%, 6/15/97 15,000 15,117
4.40%, 6/15/99 10,000 10,100
New Jersey Turnpike Auth.
VRDO 2.80%, 3/6/96 (3) LOC 5,000 5,000
5.20%, 1/1/98 15,000 15,301
6.00%, 1/1/98 8,000 8,273
----------
STATE TOTAL 80,022
----------
- --------------------------------------------------------------------------------
NEW YORK (13.5%)
Battery Park City NY Auth.
7.70%, 5/1/99 (Prere.) 5,000 5,635
Erie County NY GO
10.00%, 2/1/97 (3) 4,325 4,580
Erie County NY Water Auth.
Waterworks System Rev. VRDO
3.10%, 3/6/96 (2) 2,200 2,200
Municipal Assistance Corp. for
New York City NY
6.00%, 7/1/00 (2) 10,000 10,723
6.80%, 7/1/96 6,000 6,069
New York City NY GO
VRDO 3.15%, 3/6/96 LOC 1,100 1,100
VRDO 3.30%, 3/4/96 LOC 1,600 1,600
VRDO 3.35%, 3/4/96 LOC 3,250 3,250
VRDO 3.40%, 3/4/96 LOC 800 800
5.50%, 8/1/98 15,000 15,402
5.60%, 8/15/97 19,170 19,606
New York City NY IDA
(USTA National Tennis
Center Project)
7.75%, 11/15/00 3,125 3,585
7.75%, 11/15/01 4,380 5,121
7.75%, 11/15/02 3,100 3,684
New York City NY Municipal
Water Finance Auth. VRDO
3.35%, 3/4/96 (3) 13,900 13,900
New York State Medical Care
Facilities Finance Agency Rev.
7.875%, 8/15/00 (Prere.) 8,000 9,350
(Mental Health Service)
5.00%, 2/15/01 2,445 2,447
5.00%, 8/15/01 6,760 6,766
New York State COP
4.50%, 2/1/98 4,985 5,010
4.70%, 2/1/99 4,580 4,569
New York State Dormitory Auth.
(City Univ.)
5.50%, 7/1/98 6,300 6,492
9.00%, 7/1/00 (3) 15,515 18,514
(State Univ.)
7.70%, 5/15/00 (Prere.) 6,500 7,503
New York State Environmental
Facilities PCR
(State Water Revolving Fund)
4.00%, 6/15/01 1,750 1,729
4.10%, 6/15/02 3,000 2,957
4.20%, 2/15/03 3,840 3,778
4.20%, 6/15/03 6,120 6,018
4.30%, 6/15/04 6,025 5,913
New York State Hosp.
Finance Agency
7.80%, 3/15/01 (Prere.) 15,000 17,667
New York State Local Govt.
Assistance Corp.
4.50%, 4/1/96 2,000 2,002
7.00%, 4/1/01 (Prere.) 11,550 13,198
New York State Power Auth.
7.10%, 1/1/99 6,400 6,869
New York State Thruway Auth.
(Highway & Bridge Trust Fund)
4.80%, 4/1/02 5,000 5,111
6.00%, 4/1/02 (1) 11,965 12,977
----------
STATE TOTAL 236,125
----------
- --------------------------------------------------------------------------------
NORTH CAROLINA (.4%)
North Carolina Education Facilities
Auth. VRDO
(Duke Univ.)
3.20%, 3/7/96 800 800
North Carolina Medical Care Hosp.
Rev. VRDO
(Duke Univ. Hosp.)
3.20%, 3/7/96 2,500 2,500
North Carolina Municipal
Power Agency
(Catawba Electric)
5.10%, 1/1/98 3,980 4,052
----------
STATE TOTAL 7,352
----------
- --------------------------------------------------------------------------------
OHIO (2.6%)
Columbus OH Library Rev.
4.60%, 10/1/96 2,500 2,519
Columbus OH Sewer
Improvement
9.00%, 9/15/96 5,065 5,219
Ohio Air Quality Development
Auth. VRDO
(Cincinnati Gas & Electric)
3.45%, 3/4/96 LOC 3,300 3,300
</TABLE>
16
<PAGE> 39
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Ohio Building Auth.
7.00%, 9/1/00 $ 4,000 $ 4,136
Ohio Higher Education
Facilities Rev.
5.875%, 12/1/96 6,650 6,772
Ohio Public Facilities Comm.
4.40%, 12/1/96 7,000 7,052
6.50%, 12/1/97 2,950 3,091
Ohio Water Development Auth.
4.60%, 12/1/96 5,000 5,044
4.90%, 6/1/97 4,085 4,152
4.90%, 12/1/97 3,455 3,522
----------
STATE TOTAL 44,807
----------
- --------------------------------------------------------------------------------
OKLAHOMA (1.4%)
Grand River Dam Auth. OK
4.90%, 6/1/98 17,500 17,896
6.30%, 6/1/97 3,450 3,568
Oklahoma City OK GO
10.00%, 8/1/96 2,465 2,532
----------
STATE TOTAL 23,996
----------
- --------------------------------------------------------------------------------
OREGON (.3%)
Oregon Veterans Welfare Program
VRDO 3.35%, 3/6/96 LOC 4,500 4,500
----------
- --------------------------------------------------------------------------------
PENNSYLVANIA (8.0%)
Northumberland County PA Auth.
Commonwealth Lease Rev.
6.00%, 10/15/96 (1) 4,960 5,041
Pennsylvania Convention
Center Auth. Rev.
5.75%, 9/1/99 16,450 16,694
Pennsylvania GO
5.00%, 7/1/97 3,930 4,002
5.00%, 5/1/00 6,210 6,398
5.40%, 7/1/00 4,000 4,188
6.00%, 9/15/97 5,885 6,096
Pennsylvania Housing
Finance Agency
6.60%, 7/1/96 1,145 1,153
Pennsylvania Intergovernmental
Cooperation Auth.
5.40%, 6/15/97 (3) 4,000 4,091
Philadelphia PA GO
6.00%, 11/15/99 (3) 8,505 9,055
6.00%, 11/15/00 (3) 13,000 13,961
Philadelphia PA Hosp. & Higher
Education Facilities Auth. VRDO
(Children's Hosp.)
3.40%, 3/4/96 LOC 8,600 8,600
Philadelphia PA Municipal Lease
5.25%, 7/15/98 4,705 4,789
Philadelphia PA School Dist.
4.70%, 7/1/99 (1) 14,000 14,259
6.60%, 7/1/98 (2) 3,000 3,183
Philadelphia PA Water & Sewer
6.90%, 10/1/99 (Prere.) 15,000 16,674
Philadelphia PA Water &
Wastewater Rev.
4.25%, 6/15/96 15,000 15,030
6.25%, 8/1/02 (1) 5,450 5,989
----------
STATE TOTAL 139,203
----------
- --------------------------------------------------------------------------------
PUERTO RICO (.8%)
Puerto Rico Electric Power
Auth. Rev.
6.00%, 7/1/03 (1) 12,290 13,527
----------
- --------------------------------------------------------------------------------
RHODE ISLAND (.2%)
Rhode Island GO
6.00%, 5/15/97 4,215 4,340
----------
- --------------------------------------------------------------------------------
SOUTH CAROLINA (.2%)
Piedmont SC Municipal
Power Agency
4.90%, 1/1/97 3,350 3,385
----------
- --------------------------------------------------------------------------------
TENNESSEE (.9%)
Metropolitan Govt. of Nashville &
Davidson County TN GO
4.75%, 5/15/01 16,125 16,550
----------
- --------------------------------------------------------------------------------
TEXAS (11.1%)
Anderson County TX
(Coffield Prison Farm Project)
8.00%, 3/15/97 (2) 4,135 4,332
Austin TX Combined Utilities
System Rev.
4.00%, 11/15/96 7,820 7,857
5.50%, 5/15/02 3,500 3,715
9.75%, 5/15/97 (1) 2,835 3,039
9.75%, 5/15/97 (1) (Prere.) 1,165 1,251
10.00%, 5/15/00 (Prere.) 5,000 6,104
11.00%, 11/15/96 1,600 1,683
11.00%, 11/15/96 (ETM) 320 337
Corpus Christi TX Utilities
System Rev.
6.20%, 7/15/96 (3) 2,965 2,997
6.30%, 7/15/97 (3) 2,460 2,550
Dallas-Fort Worth TX
Regional Airport
3.75%, 11/1/96 (1) 4,000 4,009
4.00%, 11/1/97 (1) 9,000 9,031
Dallas TX Waterworks &
Sewer System
5.90%, 10/1/97 7,265 7,517
6.75%, 4/1/96 11,250 11,283
6.90%, 4/1/97 2,000 2,075
</TABLE>
17
<PAGE> 40
<TABLE>
<CAPTION>
Face Market
LIMITED-TERM Amount Value
PORTFOLIO (continued) (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Harris County TX Flood
Control Dist. GO
5.50%, 10/1/00 $ 3,000 $ 3,168
Harris County TX Toll Road
Refunding GO
5.50%, 10/1/00 2,645 2,793
5.60%, 10/1/97 10,000 10,304
Harris County TX Toll Road VRDO
3.15%, 3/6/96 9,100 9,100
Houston TX GO
3.90%, 3/1/96 2,415 2,415
Houston TX Hotel Occupancy
6.00%, 7/1/00 (4) 4,250 4,524
6.00%, 7/1/01 (4) 4,000 4,291
6.00%, 7/1/02 (4) 2,250 2,426
Houston TX Public Improvement
5.25%, 3/1/98 5,000 5,145
Houston TX Water & Sewer System
4.65%, 12/1/96 11,315 11,419
4.90%, 12/1/97 5,000 5,097
5.40%, 12/1/00 8,000 8,374
5.70%, 12/1/97 (2) 7,000 7,246
San Antonio TX Electric & Gas Rev.
6.75%, 2/1/97 2,000 2,062
San Antonio TX GO
5.40%, 8/1/04 7,495 7,855
Texas A&M Univ. Rev.
6.90%, 8/15/97 5,425 5,680
Texas GO
4.625%, 10/1/97 2,700 2,743
Texas Municipal Power Agency Rev.
5.00%, 9/1/96 8,585 8,651
5.80%, 9/1/03 (1) 6,750 7,295
6.40%, 9/1/98 (3) 3,000 3,168
University of Texas Permanent Fund
5.00%, 7/1/01++ 7,500 7,777
5.00%, 7/1/02++ 5,500 5,705
----------
STATE TOTAL 195,018
----------
- --------------------------------------------------------------------------------
UTAH (.4%)
Intermountain Power Agency UT
3.90%, 7/1/96 7,000 7,011
----------
- --------------------------------------------------------------------------------
VIRGINIA (.4%)
Virginia Public School Auth.
4.00%, 1/1/97 2,500 2,515
4.25%, 1/1/98 5,250 5,301
----------
STATE TOTAL 7,816
----------
- --------------------------------------------------------------------------------
WASHINGTON (5.2%)
King County WA GO
5.00%, 1/1/03 6,400 6,598
Renton WA School Dist. GO
5.50%, 12/1/96 6,000 6,092
Washington GO
4.875%, 10/1/01 7,500 7,719
5.00%, 5/1/01 5,000 5,165
5.30%, 9/1/99 5,000 5,206
6.10%, 9/1/00 5,000 5,391
6.30%, 9/1/02 4,700 5,174
6.75%, 6/1/01 (Prere.) 30,000 33,437
7.00%, 10/1/99 7,555 8,297
Washington Health Care
Facilities Auth.
(Sisters of Providence)
6.00%, 10/1/00 (2) 3,030 3,242
6.00%, 10/1/01 (2) 4,735 5,107
----------
STATE TOTAL 91,428
----------
- --------------------------------------------------------------------------------
WEST VIRGINIA (.1%)
Cabell WV Board of Education
8.00%, 5/1/97 (1) 2,120 2,230
----------
- --------------------------------------------------------------------------------
WISCONSIN (2.8%)
Wisconsin GO
4.125%, 11/1/98 33,625 33,924
6.00%, 5/1/03 14,055 15,397
----------
STATE TOTAL 49,321
----------
- --------------------------------------------------------------------------------
WYOMING (.9%)
Platte County WY PCR
4.20%, 1/1/99 3,370 3,369
4.40%, 1/2/00 3,945 3,952
Sublette County WY VRDO
(Exxon Project)
3.35%, 3/4/96 7,600 7,600
----------
STATE TOTAL 14,921
----------
- --------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(Cost $1,721,815) 1,752,374
- --------------------------------------------------------------------------------
</TABLE>
18
<PAGE> 41
<TABLE>
<CAPTION>
Market
Value
(000)+
- --------------------------------------------------------------------------------
<S> <C>
OTHER ASSETS AND LIABILITIES (-.1%)
- --------------------------------------------------------------------------------
Other Assets--Note B $ 27,706
Liabilities (29,123)
----------
(1,417)
- --------------------------------------------------------------------------------
NET ASSETS (100%)
- --------------------------------------------------------------------------------
Applicable to 162,685,236 outstanding
$.001 par value shares
(authorized 250,000,000 shares) $1,750,957
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE $10.76
================================================================================
</TABLE>
+ See Note A to Financial Statements.
For explanations of abbreviations and other references, see page 48.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AT FEBRUARY 29, 1996,
NET ASSETS CONSISTED OF:
- --------------------------------------------------------------------------------
Amount Per
(000) Share
---------- -----
<S> <C> <C>
PAID IN CAPITAL $1,725,404 $10.60
UNDISTRIBUTED NET
INVESTMENT INCOME -- --
ACCUMULATED NET
REALIZED LOSSES (5,006) (.03)
UNREALIZED APPRECIATION OF
INVESTMENTS--NOTE F 30,559 .19
- --------------------------------------------------------------------------------
NET ASSETS $1,750,957 $10.76
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Face Market
INTERMEDIATE-TERM Amount Value
PORTFOLIO (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS (98.6%)
- --------------------------------------------------------------------------------
ALABAMA (.2%)
Huntsville AL Health Care Auth.
Rev. VRDO
3.25%, 3/7/96 (1) $10,400 $ 10,400
Univ. of Southern
Alabama Hosp.
7.00%, 5/15/04 (2) 3,250 3,602
----------
STATE TOTAL 14,002
----------
- --------------------------------------------------------------------------------
ALASKA (1.5%)
Alaska Housing Finance
Corp. VRDO
3.20%, 3/6/96 57,800 57,800
3.40%, 3/6/96 15,900 15,900
Anchorage AK Electric Rev.
8.00%, 12/1/11 (1) 5,395 6,958
North Slope Borough AK GO
0.00%, 6/30/96 (1) 4,500 4,446
Valdez AK Marine
Terminal VRDO
(Exxon Pipeline Project)
3.35%, 3/4/96 8,600 8,600
----------
STATE TOTAL 93,704
----------
- --------------------------------------------------------------------------------
ARIZONA (1.8%)
Arizona Transportation Board
8.75%, 7/1/03 10,000 12,676
Arizona Transportation Board-
Maricopa County Regional Area
6.00%, 7/1/05 (2) 18,885 20,843
Maricopa County AZ
(Samaritan Health Service)
7.15%, 12/1/04 (1) 9,900 11,727
7.15%, 12/1/05 (1) 6,080 7,219
Maricopa County AZ COP
6.00%, 6/1/04 5,275 5,451
Maricopa County AZ PCR VRDO
(Arizona Public Service)
3.35%, 3/4/96 LOC 5,500 5,500
3.45%, 3/4/96 LOC 3,000 3,000
Phoenix AZ Highway Rev. GO
9.25%, 7/1/07 4,000 5,491
Salt River AZ Project Agricultural
Improvement & Power Dist.
6.00%, 1/1/07 3,515 3,840
Tucson AZ Unified School Dist.
7.50%, 7/1/06 (3) 8,840 10,905
7.50%, 7/1/07 (3) 9,125 11,314
7.50%, 7/1/08 (3) 8,060 10,051
----------
STATE TOTAL 108,017
----------
- --------------------------------------------------------------------------------
</TABLE>
19
<PAGE> 42
<TABLE>
<CAPTION>
Face Market
INTERMEDIATE-TERM Amount Value
PORTFOLIO (continued) (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
CALIFORNIA (9.6%)
California Department of Water
(Central Valley Project)
8.25%, 12/1/03 $ 5,290 $ 6,561
8.25%, 12/1/04 5,545 6,973
California Health Facilities
Finance Auth.
(Sisters of Providence)
6.00%, 10/1/02 3,865 4,199
6.00%, 10/1/03 4,095 4,467
6.00%, 10/1/04 4,340 4,751
California Higher Education
Loan Auth. Student Loan Rev.
VRDO 3.25%, 3/6/96 LOC 18,200 18,200
California GO
5.70%, 8/1/07 17,500 18,523
5.75%, 8/1/08 (3) 15,000 15,867
6.40%, 2/1/06 (1) 4,500 5,089
7.00%, 10/1/05 (1) 5,000 5,888
11.00%, 3/1/06 13,185 19,407
California Public Works Board
(State Prison)
5.25%, 12/1/04 (1) 20,000 20,956
7.00%, 9/1/00 (Prere.) 7,400 8,398
(Univ. of California)
6.10%, 12/1/05 (2) 6,515 7,140
6.20%, 12/1/06 (2) 3,320 3,617
Clovis CA Unified School Dist. GO
0.00%, 8/1/00 7,000 5,752
0.00%, 8/1/01 11,180 8,695
Contra Costa CA Transportation
Auth. VRDO
3.10%, 3/6/96 (3) 4,200 4,200
East Bay CA Municipal Utility
Dist. Rev.
6.00%, 6/1/03 (3) 2,950 3,225
Fresno CA Sewer Rev.
6.25%, 9/1/14 (2) 12,000 13,334
Irvine CA Ranch Water Dist. VRDO
3.75%, 3/4/96 LOC 400 400
Long Beach CA Financing Auth. Rev.
6.00%, 11/1/07 (2) 3,070 3,405
Long Beach CA Harbor Rev.
7.10%, 5/15/99 2,900 3,157
7.15%, 5/15/00 10,000 11,095
7.20%, 5/15/01 2,000 2,260
Los Angeles CA COP
7.50%, 6/1/98 (Prere.) 3,950 4,333
7.60%, 6/1/98 (Prere.) 3,995 4,391
Los Angeles County CA Sanitation
Dist. Finance Auth.
5.00%, 10/1/02 3,460 3,573
5.10%, 10/1/04 8,100 8,373
Los Angeles County CA
Transportation Auth. Sales
Tax Rev.
8.00%, 7/1/01 (2) 6,365 7,467
8.00%, 7/1/02 (2) 3,915 4,680
Los Angeles County CA
Transportation Comm.
Sales Tax Rev.
6.50%, 7/1/10 51,070 57,276
Metropolitan Water Dist. of
Southern California
7.75%, 7/1/01 (Prere.) 18,085 21,358
Northern California Power Agency
(Geothermal Project)
6.75%, 7/1/01 19,530 19,993
(Hydroelectric Project)
6.10%, 7/1/05 (1) 5,575 6,168
6.20%, 7/1/06 (1) 5,940 6,647
6.25%, 7/1/07 (1) 6,685 7,543
Oakland CA Redevelopment Agency
(Central Dist. Project)
5.75%, 2/1/04 (2) 1,535 1,653
5.90%, 2/1/05 (2) 4,870 5,299
6.00%, 2/1/07 (2) 3,360 3,708
Orange County CA Sanitation
Dist. VRDO
2.95%, 3/7/96 (2) LOC 24,095 24,095
3.35%, 3/4/96 (3) 700 700
Orange County CA VRDO
(Irvine Coast Assessment)
3.75%, 3/4/96 LOC 27,900 27,900
Poway CA Redevelopment Agency
(Paguay Project)
7.125%, 12/15/04 (3) 4,840 5,721
Riverside County CA VRDO
(Public Facilities Project)
2.95%, 3/5/96 LOC 1,675 1,675
Sacramento CA Municipal
Utility Dist. Electric Rev.
6.60%, 2/1/97 4,000 4,113
San Bernardino CA COP
5.75%, 8/1/06 (1) 3,300 3,557
5.75%, 8/1/07 (1) 3,420 3,669
6.75%, 8/1/10 (Prere.) 11,385 12,961
7.00%, 8/1/08 (1) 9,045 10,676
7.00%, 8/1/09 (1) 9,705 11,470
7.00%, 8/1/10 (1) 10,525 12,406
San Diego County CA Regional
Transportation Auth. Sales
Tax Rev.
7.00%, 4/1/01 (Prere.) 3,220 3,681
7.00%, 4/1/06 1,780 1,960
</TABLE>
20
<PAGE> 43
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
San Diego County CA Water
Rev. COP
5.40%, 5/1/03 $ 5,000 $ 5,279
5.50%, 5/1/04 5,000 5,310
5.50%, 5/1/05 4,245 4,502
San Diego CA Transportation Sales
Tax Rev.
5.00%, 4/1/07 (3) 12,730 12,903
San Diego CA Unified School Dist.
TRAN 4.75%, 10/10/96 LOC 25,000 25,218
Southern California Public
Power Auth.
6.75%, 7/1/99 6,190 6,667
Southern California Rapid Transit
Dist. Rev.
5.70%, 9/1/04 (2) 14,040 15,138
Univ. of California Rev.
10.00%, 9/1/03 (2) 3,790 5,062
----------
STATE TOTAL 572,684
----------
- --------------------------------------------------------------------------------
COLORADO (.6%)
Colorado Health Facilities Auth.
(Sisters of Charity Health
System Inc.)
8.50%, 5/15/04 (1) 17,500 22,149
Colorado TRAN
4.50%, 6/27/96 2,000 2,007
Denver CO City & County
School Dist.
6.95%, 12/15/00 (3) 9,250 10,219
----------
STATE TOTAL 34,375
----------
- --------------------------------------------------------------------------------
CONNECTICUT (2.8%)
Connecticut Economic
Recovery Notes VRDO
3.30%, 3/6/96 2,700 2,700
Connecticut GO
5.00%, 10/1/03 9,070 9,394
5.30%, 11/15/06 16,940 17,457
5.40%, 11/15/07 24,010 24,935
6.00%, 10/1/04 5,660 6,242
Connecticut Resource Recovery Auth.
(Bridgeport Resco)
8.40%, 1/1/99 4,950 5,066
Connecticut Special Tax
Obligation Rev.
VRDO 3.20%, 3/6/96 LOC 10,400 10,400
4.80%, 10/1/05 9,085 9,189
5.125%, 9/1/05 11,575 11,966
5.25%, 9/1/06 42,550 43,476
7.125%, 6/1/10 12,000 14,317
7.75%, 6/1/00 11,300 12,839
----------
STATE TOTAL 167,981
----------
- --------------------------------------------------------------------------------
DELAWARE (.3%)
Delaware Transportation Auth. Rev.
5.625%, 7/1/06 (1) 11,420 12,052
5.80%, 7/1/08 7,545 7,894
----------
STATE TOTAL 19,946
----------
- --------------------------------------------------------------------------------
DISTRICT OF COLUMBIA (1.1%)
District of Columbia GO
6.10%, 6/1/11 (1) 7,000 7,269
6.30%, 6/1/08 (1) 15,000 16,096
7.50%, 6/1/99 (2) (Prere.) 17,875 20,050
7.75%, 6/1/97 (6) (Prere.) 5,000 5,334
8.00%, 6/1/96 (Prere.) 18,420 18,995
----------
STATE TOTAL 67,744
----------
- --------------------------------------------------------------------------------
FLORIDA (3.8%)
Broward County FL School Dist. GO
5.30%, 2/15/04 3,295 3,465
5.40%, 2/15/05 5,000 5,283
5.50%, 2/15/06 10,080 10,641
Dade County FL Solid Waste System
7.00%, 10/1/01 6,240 6,466
Dade County FL Water & Sewer Rev.
VRDO 3.05%, 3/6/96 (3) 31,955 31,955
Florida Board of Education
(Capital Outlay Rev.)
4.70%, 6/1/07 3,580 3,535
4.90%, 6/1/08 6,905 6,867
5.00%, 6/1/09 3,620 3,602
5.625%, 6/1/06 6,310 6,772
6.50%, 6/1/05 5,940 6,782
Florida Dept. of General Services
6.25%, 7/1/06 5,600 6,115
Florida School Board Assn.
(Orange County)
6.90%, 7/1/99 (2) 12,450 13,450
7.00%, 7/1/00 (2) 13,820 15,299
Gulf Breeze FL Local Govt.
Loan Program VRDO
3.10%, 3/7/96 (3) 43,900 43,900
Hillsborough County FL
School Dist. GO
7.10%, 8/15/03 23,665 26,854
City of Lakeland FL Electric &
Water Rev.
6.25%, 10/1/03 (3)++ 6,465 7,100
6.50%, 10/1/06 (3)++ 5,300 5,962
Lee County FL School Board
6.00%, 8/1/05 (4) 4,975 5,451
Palm Beach County FL School Board
6.00%, 8/1/05 (2) 6,115 6,773
6.00%, 8/1/06 (2) 6,480 7,173
----------
STATE TOTAL 223,445
----------
- --------------------------------------------------------------------------------
</TABLE>
21
<PAGE> 44
<TABLE>
<CAPTION>
Face Market
INTERMEDIATE-TERM Amount Value
PORTFOLIO (continued) (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
GEORGIA (4.8%)
Burke County GA PCR
(Georgia Power Co.) VRDO
3.40%, 3/4/96 $13,200 $ 13,200
3.45%, 3/4/96 6,050 6,050
3.50%, 3/4/96 3,700 3,700
(Oglethorpe Power Corp.)
VRDO 3.05%, 3/6/96 (3) 31,200 31,200
4.50%, 1/1/02 (2) 7,375 7,412
4.60%, 1/1/03 (2) 9,955 10,012
4.70%, 1/1/04 (2) 13,160 13,245
Fulton County GA School Dist.
6.375%, 5/1/10 15,000 17,009
Georgia GO
6.00%, 7/1/04 5,000 5,542
6.25%, 9/1/08 6,490 7,354
6.30%, 3/1/07 15,000 16,989
6.50%, 8/1/01 3,230 3,598
6.75%, 9/1/10 8,000 9,405
6.80%, 8/1/02 8,000 9,145
7.00%, 11/1/05 15,670 18,673
7.00%, 11/1/06 16,780 20,098
7.00%, 11/1/07 17,960 21,565
7.10%, 9/1/09 3,400 4,125
7.25%, 9/1/06 5,860 7,126
7.40%, 8/1/07 11,200 13,804
7.50%, 4/1/01 5,500 6,336
Monroe County GA
Development Auth.
(Oglethorpe Power Corp.)
6.65%, 1/1/08 9,220 10,451
Municipal Electric Power Auth.
of Georgia
6.30%, 1/1/05 12,775 14,161
8.00%, 1/1/02 9,505 10,395
8.10%, 1/1/03 2,320 2,541
----------
STATE TOTAL 283,136
----------
- --------------------------------------------------------------------------------
HAWAII (2.8%)
Hawaii Airport System Rev.
5.40%, 7/1/02 (1) 7,855 8,258
5.85%, 7/1/02 (1) 7,830 8,452
5.95%, 7/1/03 (1) 2,590 2,822
6.05%, 7/1/04 (1) 3,145 3,458
6.15%, 7/1/05 (1) 10,735 11,844
6.25%, 7/1/06 5,000 5,514
Hawaii GO
5.00%, 11/1/97 4,000 4,090
5.00%, 11/1/99 20,000 20,689
5.00%, 2/1/04 10,000 10,310
5.00%, 2/1/05 6,650 6,828
5.125%, 2/1/06 11,605 11,927
5.50%, 7/1/01 6,500 6,890
6.40%, 3/1/07 5,555 6,339
Honolulu City & County HI GO
5.75%, 1/1/06 8,825 9,519
6.00%, 1/1/08 5,000 5,461
6.30%, 3/1/10 4,830 5,185
8.00%, 10/1/09 30,560 39,275
----------
STATE TOTAL 166,861
----------
- --------------------------------------------------------------------------------
ILLINOIS (7.0%)
Chicago IL Metropolitan
Sanitation Dist.
8.75%, 1/1/00 (Prere.) 2,980 3,461
Chicago IL Metropolitan Water
Reclamation Dist.
5.50%, 12/1/08 5,300 5,512
5.85%, 12/1/03 6,355 6,907
5.90%, 12/1/06 4,450 4,853
5.95%, 12/1/07 7,200 7,849
6.00%, 12/1/08 9,900 10,776
6.05%, 12/1/09 3,000 3,270
6.10%, 12/1/06 5,300 5,823
6.25%, 12/1/08 15,000 16,360
6.50%, 12/1/07 10,000 11,254
Chicago IL Public Building
Comm. Rev.
7.50%, 1/1/02 (1) 2,500 2,821
7.60%, 1/1/03 (1) 2,500 2,818
7.70%, 1/1/08 (1) (ETM) 4,000 4,409
Chicago IL School Finance Auth.
4.40%, 6/1/98 (1) 5,000 5,049
4.90%, 6/1/02 (3) 10,000 10,270
5.00%, 6/1/03 (3) 25,190 25,960
5.10%, 6/1/04 (3) 26,155 26,754
5.20%, 6/1/05 (3) 3,000 3,088
6.00%, 6/1/01 (3) 8,305 8,962
6.10%, 6/1/02 (3) 11,945 13,044
Chicago IL Water Rev.
5.50%, 11/1/03 (2) 5,000 5,288
Cook County IL GO
4.60%, 11/15/00 (1) 5,360 5,450
5.75%, 11/15/03 (3) 5,000 5,403
5.80%, 11/15/04 10,000 10,852
6.60%, 11/1/03 (2) 4,785 5,357
6.75%, 11/1/01 (2) 3,000 3,418
Illinois GO
5.125%, 12/1/97 (3) 20,000 20,496
5.125%, 12/1/02 (3) 5,025 5,236
6.25%, 10/1/05 6,000 6,581
Illinois Health Facility Auth.
(Lutheran General Health Systems)
7.25%, 4/1/99 (Prere.) 1,675 1,824
7.25%, 4/1/00 9,025 9,794
(Univ. of Chicago Hosp.)
VRDO 3.25%, 3/6/96 (1) 700 700
</TABLE>
22
<PAGE> 45
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Illinois Housing Development Auth.
VRDO 3.65%, 3/6/96 LOC $33,955 $ 33,955
Illinois Regional
Transportation Auth.
9.00%, 6/1/05 (2) 5,220 6,851
9.00%, 6/1/08 (2) 6,840 9,331
9.00%, 6/1/09 (2) 4,255 5,849
Illinois Sales Tax Rev.
6.50%, 6/15/13 5,000 5,643
Illinois Toll Highway Auth. VRDO
3.05%, 3/6/96 (1) LOC 28,500 28,500
Joliet IL Port Dist. Marine Terminal
VRDO (Exxon Project)
3.35%, 3/4/96 9,400 9,400
Metropolitan Pier & Exposition
Auth. IL
6.50%, 6/1/06 11,885 13,382
6.75%, 6/1/10 25,000 28,457
7.25%, 6/15/05 15,000 17,654
----------
STATE TOTAL 418,661
----------
- --------------------------------------------------------------------------------
INDIANA (1.4%)
East Allen IN County Schools TAW
4.00%, 12/31/96 6,900 6,924
East Chicago IN School
Building Corp.
11.75%, 2/1/99 (Prere.) 5,000 6,043
Indiana Educational
Facilities Auth.
(Univ. of Notre Dame)
VRDO 3.15%, 3/7/96 16,600 16,600
Indiana Municipal Power Agency
5.875%, 1/1/10 (1) 4,500 4,824
Indiana State Office Building
Comm. Rev.
6.65%, 7/1/01 4,500 4,874
6.70%, 7/1/02 5,290 5,720
Indiana Univ. Student Fee Bonds
6.80%, 8/1/04 25,000 27,951
7.00%, 8/1/06 5,845 6,652
Rockport IN PCR VRDO
(AEP Generating Co. Project)
3.40%, 3/4/96 (2) 2,100 2,100
----------
STATE TOTAL 81,688
----------
- --------------------------------------------------------------------------------
KENTUCKY (1.3%)
Kentucky Development
Finance Auth.
(St. Elizabeth Medical Center)
6.625%, 11/1/04 (3) 20,025 22,196
(Sisters of Charity)
6.60%, 11/1/06 5,000 5,371
Kentucky Property & Buildings Rev.
5.25%, 11/1/08 2,500 2,519
5.50%, 9/1/03 8,000 8,473
5.60%, 9/1/04 3,000 3,196
5.70%, 9/1/05 7,350 7,829
6.875%, 8/1/06 10,400 11,864
Kentucky Turnpike Auth. Resource
Recovery Road Rev.
8.00%, 7/1/03 14,750 15,764
13.125%, 7/1/97 (Prere.) 820 921
13.125%, 1/1/98 (Prere.) 30 35
----------
STATE TOTAL 78,168
----------
- --------------------------------------------------------------------------------
LOUISIANA (1.7%)
Jefferson Parish LA Sales Tax Rev.
6.75%, 12/1/06 (3) 11,000 12,258
Louisiana Gas & Fuel Tax Rev.
7.20%, 11/15/99 9,500 10,442
7.25%, 11/15/00 5,250 5,833
7.25%, 11/15/04 11,000 12,078
Louisiana GO
7.00%, 9/1/00 (Prere.) 11,540 13,061
8.75%, 9/1/00 (4) 8,830 10,435
8.75%, 9/1/01 (4) 9,445 11,253
Louisiana Recovery Dist.
Sales Tax Rev.
VRDO 3.50%, 3/4/96 (1) 8,700 8,700
VRDO 3.50%, 3/4/96 (3) 2,100 2,100
7.375%, 7/1/96 (2) 4,000 4,051
New Orleans LA Public
Improvement GO
7.70%, 10/1/99 (6) (Prere.) 2,395 2,645
7.75%, 10/1/00 (6) (Prere.) 5,510 6,093
----------
STATE TOTAL 98,949
----------
- --------------------------------------------------------------------------------
MAINE (.2%)
Maine Municipal Bond Bank
4.90%, 11/1/02 13,000 13,356
----------
- --------------------------------------------------------------------------------
MASSACHUSETTS (5.9%)
Boston MA Water & Sewer Comm.
5.75%, 11/1/13 6,325 6,538
Massachusetts Bay Transit Auth.
5.30%, 3/1/04 32,380 33,817
7.25%, 3/1/03 (3) 16,000 17,827
Massachusetts GO
5.10%, 2/1/05 25,000 25,666
5.50%, 2/1/11 10,000 10,063
6.25%, 7/1/02 10,000 10,996
6.50%, 5/1/96 (3) 4,000 4,121
6.50%, 8/1/04 3,840 4,352
6.90%, 6/1/00 (2) 2,500 2,747
7.00%, 6/1/99 (Prere.) 3,000 3,320
</TABLE>
23
<PAGE> 46
<TABLE>
<CAPTION>
Face Market
INTERMEDIATE-TERM Amount Value
PORTFOLIO (continued) (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
7.00%, 6/1/02 (2) $ 5,000 $ 5,477
7.50%, 12/1/00 (Prere.) 10,000 11,587
7.50%, 6/1/04 3,975 4,742
Massachusetts Industrial Finance
Agency (Refusetech Inc. Project)
6.15%, 7/1/02 5,040 5,199
6.30%, 7/1/05 21,500 22,533
Massachusetts Industrial Finance
Auth. Rev.
(BioMed Research Corp.)
0.00%, 8/1/04 10,000 6,522
7.10%, 8/1/99 21,435 23,172
Massachusetts Turnpike Auth.
BAN 5.00%, 6/1/99 11,000 11,312
4.70%, 1/1/03 5,000 5,049
4.75%, 1/1/04 2,500 2,519
Massachusetts Water
Resources Auth.
5.25%, 3/1/07 5,000 5,039
5.25%, 3/1/09 7,175 7,201
5.50%, 11/1/07 32,860 33,793
6.50%, 7/15/10 30,220 33,998
6.50%, 7/15/19 37,515 42,148
7.25%, 4/1/01 9,800 10,978
----------
STATE TOTAL 350,716
----------
- --------------------------------------------------------------------------------
MICHIGAN (1.8%)
Detroit MI GO
5.80%, 5/1/02 (2) 8,970 9,612
5.90%, 5/1/03 (2) 9,490 10,260
Michigan Municipal Bond Auth.
Local Govt. Loan Auth.
0.00%, 12/1/99 (3) LOC 6,000 5,116
0.00%, 12/1/00 (3) LOC 5,590 4,547
0.00%, 12/1/01 (3) LOC 9,630 7,416
Michigan Public Power Agency
5.30%, 1/1/05 13,075 13,607
5.375%, 1/1/06 13,790 14,315
5.50%, 1/1/07 14,545 15,079
5.50%, 1/1/08 9,360 9,630
Michigan State Building Auth.
5.50%, 10/1/07 (2) 10,020 10,501
6.50%, 10/1/03 (2) 3,000 3,340
Univ. of Michigan Hosp. Rev. VRDO
3.45%, 3/4/96 5,500 5,500
----------
STATE TOTAL 108,923
----------
- --------------------------------------------------------------------------------
MINNESOTA (.3%)
Minnesota GO
4.70%, 8/1/97 16,315 16,588
----------
- --------------------------------------------------------------------------------
MISSISSIPPI (.4%)
Jackson County MS Port
Facilities Rev. VRDO
(Chevron)
3.35%, 3/4/96 7,100 7,100
Mississippi GO
5.25%, 5/1/08 5,805 5,923
6.50%, 5/1/03 4,285 4,839
7.00%, 5/1/05 4,840 5,709
----------
STATE TOTAL 23,571
----------
- --------------------------------------------------------------------------------
MISSOURI (.2%)
St. Louis County MO Rockwood
School Dist. GO
8.50%, 2/1/01 8,000 9,472
----------
- --------------------------------------------------------------------------------
NEBRASKA (.5%)
Consumers Public Power Dist.
Electric Rev.
5.10%, 1/1/03 13,035 13,050
Nebraska Public Power Dist.
5.60%, 7/1/03 13,175 14,046
----------
STATE TOTAL 27,096
----------
- --------------------------------------------------------------------------------
NEVADA (1.7%)
Clark County NV GO
4.80%, 7/1/01 (1) 7,440 7,615
7.50%, 6/1/06 (2) 3,575 4,359
7.50%, 6/1/07 (2) 9,550 11,715
7.50%, 6/1/09 (2) 6,825 8,434
8.00%, 6/1/08 (2) 9,875 12,597
Clark County NV School Dist. GO
5.375%, 5/1/06 (3) 3,740 3,886
5.375%, 5/1/07 (3) 9,195 9,445
5.375%, 5/1/08 (3) 9,170 9,345
7.25%, 6/15/02 (1) 3,995 4,612
7.40%, 3/1/00 10,000 10,882
9.75%, 6/1/00 (1) 4,580 5,550
Nevada GO
6.00%, 5/1/05 10,450 11,149
----------
STATE TOTAL 99,589
----------
- --------------------------------------------------------------------------------
NEW JERSEY (5.2%)
Camden County NJ Municipal
Utilities Auth.
0.00%, 9/1/99 (3) 12,545 10,855
0.00%, 9/1/00 (3) 18,500 15,206
0.00%, 9/1/02 (3) 18,545 13,804
0.00%, 9/1/03 (3) 18,545 13,114
Essex County NJ TAN
4.00%, 8/19/96 LOC 8,500 8,525
New Jersey Economic
Development Auth.
5.125%, 9/1/04 (2) 9,340 9,715
5.80%, 7/1/07 (1) 17,800 19,071
</TABLE>
24
<PAGE> 47
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
5.80%, 7/1/08 (1) $ 4,000 $ 4,239
7.00%, 7/1/03 (1) 26,195 30,354
New Jersey Health Care Rev.
(Union Hosp./Mega Care)
6.00%, 7/1/98 2,820 2,897
6.20%, 7/1/99 3,080 3,164
6.40%, 7/1/00 3,295 3,407
New Jersey Sports & Exposition Auth.
6.50%, 3/1/06 4,725 5,219
6.50%, 3/1/07 3,500 3,844
New Jersey Transportation
Trust Fund Auth.
5.30%, 12/15/01 5,000 5,262
6.00%, 12/15/04 (1) 4,000 4,413
6.00%, 12/15/05 (1) 7,510 8,300
New Jersey Turnpike Auth.
VRDO 2.80%, 3/6/96 (3) LOC 7,800 7,800
4.75%, 1/1/06 (ETM) 25,970 25,847
5.90%, 1/1/03 4,700 4,973
5.90%, 1/1/04 19,030 20,141
6.00%, 1/1/05 22,220 23,615
6.50%, 1/1/09 50,000 56,785
Rutgers State Univ. NJ Rev.
6.40%, 5/1/13 4,675 5,238
----------
STATE TOTAL 305,788
----------
- --------------------------------------------------------------------------------
NEW YORK (10.2%)
Metropolitan Transportation
Auth. NY
5.40%, 7/1/03 16,040 16,431
5.625%, 7/1/05 11,485 11,825
5.75%, 7/1/06 12,320 12,746
6.10%, 7/1/07 (1) 3,625 4,020
6.10%, 7/1/08 (1) 7,200 7,964
New York City NY GO
VRDO 3.15%, 3/6/96 LOC 4,300 4,300
VRDO 3.40%, 3/4/96 LOC 200 200
VRDO 3.45%, 3/4/96 (1) 9,600 9,600
6.00%, 8/15/99 13,070 13,535
6.10%, 8/1/02 4,000 4,150
6.15%, 8/15/00 14,670 15,271
6.25%, 8/1/03 14,000 14,615
6.375%, 8/1/04 20,000 20,987
7.00%, 8/1/97 (Prere.) 820 871
7.00%, 8/15/99 (3) 5,550 6,074
7.00%, 8/15/99 (3) (ETM) 9,450 10,361
7.00%, 8/1/00 4,830 5,009
7.00%, 8/1/03 6,000 6,534
7.00%, 2/1/05 5,000 5,461
8.00%, 8/1/99 4,560 5,005
8.00%, 8/1/99 (ETM) 615 691
8.00%, 11/1/00 (2) 4,420 4,777
8.125%, 11/1/04 (3) 11,155 12,128
New York City NY IDA
(USTA National Tennis
Center Project)
6.375%, 11/15/07 (4) 6,200 6,928
6.40%, 11/15/08 (4) 4,105 4,563
6.50%, 11/15/09 (4) 6,745 7,499
6.50%, 11/15/10 (4) 3,500 3,876
New York City NY Municipal
Finance Auth. Water and Sewer
System Rev.
5.30%, 6/15/06 27,665 28,377
6.00%, 6/15/10 4,000 4,274
New York State Dormitory Auth.
(City Univ.)
6.25%, 7/1/03 4,250 4,514
6.35%, 7/1/04 2,500 2,670
6.45%, 7/1/05 1,500 1,636
7.00%, 7/1/01 10,000 11,275
(New York Univ.)
6.375%, 7/1/07 (3) 27,000 29,346
(State Univ.)
5.10%, 7/1/01 (2) 6,160 6,398
5.25%, 7/1/02 (2) 4,500 4,714
5.80%, 5/15/05 5,400 5,630
5.90%, 5/15/06 2,000 2,092
6.00%, 7/1/03 (2) 4,000 4,376
6.00%, 7/1/04 (2) 4,000 4,390
6.10%, 5/15/08 2,000 2,088
7.00%, 5/15/99 14,105 15,584
7.00%, 5/15/01 4,180 4,532
7.10%, 5/15/00 6,050 6,572
New York State Environmental
Facilities PCR
(State Water Revolving Fund)
4.30%, 2/15/04 3,875 3,806
4.30%, 12/15/04 2,605 2,554
4.40%, 6/15/05 5,130 5,034
4.50%, 2/15/06 4,025 3,949
4.65%, 6/15/07 3,000 2,942
New York State GO
6.00%, 10/1/03 4,800 5,249
6.00%, 10/1/04 9,195 10,079
7.80%, 11/15/99 5,000 5,627
New York State Local Govt.
Assistance Corp.
4.25%, 4/1/00 2,500 2,501
4.375%, 4/1/01 3,000 3,005
5.00%, 7/1/03 (2) 2,900 2,997
5.20%, 7/1/07 (2) 4,500 4,586
5.25%, 7/1/02 (2) 4,000 4,195
</TABLE>
25
<PAGE> 48
<TABLE>
<CAPTION>
Face Market
INTERMEDIATE-TERM Amount Value
PORTFOLIO (continued) (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
New York State Medical Care
Facilities Finance Agency Rev.
7.875%, 8/15/00 (Prere.) $ 6,815 $ 7,965
8.875%, 8/15/97 (Prere.) 20,000 21,901
New York State Thruway Auth.
(Highway & Bridge Trust Fund)
5.30%, 4/1/08 (1) 7,740 7,875
5.40%, 4/1/07 (1) 9,215 9,552
6.25%, 4/1/06 (3) 10,000 11,208
New York State Urban
Development Corp.
6.40%, 1/1/04 9,685 10,341
Onondaga County NY PCR
(Anheuser Busch)
6.625%, 8/1/06 10,000 10,954
Suffolk County NY Water Auth.
6.80%, 8/17/10 (ETM) 10,660 12,431
Triborough Bridge & Tunnel NY
Auth. Rev.
0.00%, 1/1/03 19,185 13,264
5.80%, 1/1/06 6,000 6,490
6.00%, 1/1/12 12,000 12,932
6.60%, 1/1/10 59,325 67,695
----------
STATE TOTAL 603,021
----------
- --------------------------------------------------------------------------------
NORTH CAROLINA (1.3%)
Charlotte NC Airport VRDO
3.05%, 3/6/96 (1) 2,300 2,300
Charlotte NC GO
5.50%, 7/1/05 5,000 5,329
North Carolina Educational
Facilities Auth. VRDO
(Duke Univ.)
3.20%, 3/7/96 4,100 4,100
North Carolina Municipal
Power Agency
(Catawba Electric)
6.00%, 1/1/04 7,000 7,440
6.00%, 1/1/05 28,750 30,528
7.00%, 1/1/00 (Prere.) 6,040 6,762
7.25%, 1/1/07 10,410 12,442
Wake County NC Industrial
Facilities & Pollution Control
Finance Auth.
(Carolina Power & Light)
VRDO 3.30%, 3/6/96 LOC 9,000 9,000
----------
STATE TOTAL 77,901
----------
- --------------------------------------------------------------------------------
OHIO (2.7%)
Cleveland OH School Dist.
8.125%, 12/1/98 (ETM) 2,205 2,431
9.00%, 12/1/98 (Prere.) 4,000 4,612
Cleveland OH Water Works
6.25%, 1/1/05 (2) 9,155 10,001
Columbus OH Electric System
VRDO 3.35%, 4/1/96 LOC 700 700
Columbus OH Sewer Rev. VRDO
3.05%, 3/7/96 6,000 6,000
Cuyahoga County OH Hosp.
Improvement VRDO
(St. Luke's Hosp.)
3.25%, 3/6/96 LOC 7,510 7,510
Ohio Air Quality
Development Auth.
(Cincinnati Gas & Electric Co.)
VRDO 3.35%, 3/4/96 LOC 5,000 5,000
Ohio Building Auth.
(State Correctional Facilities)
5.70%, 10/1/03 3,305 3,555
5.70%, 10/1/04 2,725 2,934
5.80%, 10/1/06 4,360 4,711
5.90%, 10/1/07 2,500 2,710
6.50%, 10/1/02 3,790 4,238
6.50%, 10/1/02 (1) 5,350 5,993
6.50%, 10/1/03 5,500 6,121
6.50%, 10/1/03 (1) 5,710 6,445
6.50%, 10/1/04 2,500 2,769
7.20%, 8/1/00 10,000 11,144
7.25%, 8/1/01 7,500 8,370
7.30%, 8/1/02 10,000 11,176
7.35%, 8/1/03 4,945 5,534
(State Data Center)
5.70%, 10/1/04 2,895 3,117
5.75%, 10/1/05 3,070 3,314
Ohio GO
3.70%, 8/1/97 3,725 3,738
Ohio Higher Education Facilities
5.90%, 12/1/05 8,175 8,763
Ohio Public Facilities Comm.
5.50%, 12/1/06 5,465 5,715
Ohio State Univ. VRDO
3.15%, 3/7/96 4,300 4,300
Ohio Water Development Auth.
5.625%, 6/1/06 (1) 3,525 3,777
5.625%, 12/1/06 (1) 5,955 6,387
6.00%, 12/1/08 (2) 6,000 6,412
----------
STATE TOTAL 157,477
----------
- --------------------------------------------------------------------------------
OKLAHOMA (2.1%)
Grand River Dam Auth. OK
Electric Rev.
5.50%, 6/1/13 (2) 8,100 8,299
5.70%, 6/1/05 20,000 21,485
5.75%, 6/1/06 19,350 20,807
5.875%, 6/1/07 14,500 15,672
6.25%, 6/1/11 (2) 7,600 8,492
8.00%, 6/1/02 21,000 25,030
</TABLE>
26
<PAGE> 49
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Oklahoma Industrial Auth.
(St. Anthony's Hosp.)
7.50%, 10/1/03 (1) $ 5,470 $ 5,597
Tulsa County OK Industrial Auth.
(St. Francis Hosp.)
5.15%, 12/15/03 8,715 8,815
Tulsa OK Metropolitan Utility Auth.
7.00%, 2/1/03 8,465 9,529
----------
STATE TOTAL 123,726
----------
- --------------------------------------------------------------------------------
OREGON (.3%)
Oregon Veterans Welfare
Program VRDO
3.20%, 3/6/96 LOC 13,300 13,300
3.35%, 3/6/96 LOC 6,445 6,445
----------
STATE TOTAL 19,745
----------
- --------------------------------------------------------------------------------
PENNSYLVANIA (7.6%)
Allegheny County PA GO
7.45%, 2/15/98 2,000 2,137
7.60%, 11/1/98 (Prere.) 2,000 2,191
Allegheny County PA Hosp.
Development Auth.
(South Hills Health System)
VRDO 3.25%, 3/6/96 LOC 6,450 6,450
Berks County PA GO
7.25%, 11/15/00 (3) (Prere.) 10,000 11,469
Delaware County PA Hosp. Rev.
(Crozer-Chester Medical Center)
VRDO 3.43%, 3/6/96 LOC 4,900 4,900
Emmaus PA General Auth. Local
Govt. Rev. VRDO
(Great Valley School Dist.)
3.90%, 3/6/96 LOC 7,000 7,000
Erie County PA Prison Auth.
Commonwealth Lease Rev.
6.75%, 11/1/01 (1) (Prere.) 5,295 5,950
Northumberland County PA
Commonwealth Lease Rev.
6.70%, 10/15/01 (1) 7,005 7,889
7.75%, 10/15/01 (1) 6,000 7,028
Pennsylvania Convention
Center Auth.
6.25%, 9/1/04 15,200 15,935
6.70%, 9/1/14 (1) 4,500 5,017
Pennsylvania COP
4.80%, 7/1/01 (2) 20,000 20,385
4.90%, 7/1/02 (2) 13,665 13,970
5.00%, 7/1/03 (2) 6,555 6,720
Pennsylvania GO
5.00%, 4/15/05 24,290 24,824
5.00%, 4/15/07 7,950 7,956
5.00%, 4/15/08 9,250 9,183
5.25%, 5/1/06 (3) 8,660 8,991
5.25%, 6/15/06 8,105 8,391
5.30%, 5/1/07 (3) 2,500 2,578
6.20%, 11/15/04 12,480 13,616
6.50%, 11/1/06 4,260 4,696
7.10%, 11/1/08 6,700 7,477
10.00%, 4/15/02 (2) 10,160 13,148
Pennsylvania Higher Education
Facilities Auth.
(Carnegie Mellon)
VRDO 3.45%, 3/4/96 2,300 2,300
Pennsylvania IDA
VRDO 3.40%, 3/7/96 3,500 3,500
6.50%, 7/1/98 9,850 10,408
6.60%, 1/1/99 5,065 5,394
6.60%, 7/1/99 10,355 11,121
6.70%, 1/1/00 7,420 8,043
6.70%, 7/1/00 9,080 9,926
6.80%, 1/1/01 5,000 5,513
6.80%, 7/1/01 5,480 6,094
Pennsylvania Infrastructure
Investment Auth.
(Pennvest Loan Pool Program)
VRDO 3.30%, 3/6/96 1,600 1,600
Pennsylvania Intergovernmental
Cooperation Auth.
4.70%, 6/15/01 (3) 3,410 3,474
4.80%, 6/15/02 (3) 6,275 6,391
5.45%, 6/15/08 (3) 14,595 14,827
5.75%, 6/15/99 (3) 17,000 17,855
Philadelphia PA GO
4.60%, 5/15/99 (3) 4,345 4,416
6.00%, 11/15/00 (3) 11,995 12,882
Philadelphia PA Municipal
Lease Rev.
6.00%, 7/15/03 5,065 5,183
Philadelphia PA School Dist. GO
0.00%, 7/1/00 (2) 15,500 12,855
5.35%, 7/1/03 (1) 6,800 7,157
5.375%, 7/1/05 (1) 7,500 7,844
6.25%, 9/1/05 (2) 5,870 6,585
6.25%, 9/1/06 (2) 2,000 2,244
6.25%, 9/1/08 (2) 4,000 4,473
6.25%, 9/1/09 (2) 2,080 2,320
6.70%, 7/1/99 (2) 9,000 9,737
Philadelphia PA Water &
Sewer Rev.
6.875%, 10/1/06 (1) 15,455 16,954
Philadelphia PA Water &
Wastewater Rev.
4.75%, 6/15/98 11,540 11,672
6.25%, 8/1/07 (1) 5,000 5,613
</TABLE>
27
<PAGE> 50
<TABLE>
<CAPTION>
Face Market
INTERMEDIATE-TERM Amount Value
PORTFOLIO (continued) (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
6.25%, 8/1/08 (1) $ 5,000 $ 5,603
6.25%, 8/1/09 (1) 3,400 3,801
6.25%, 8/1/10 (1) 2,730 3,036
Schuylkill PA Redevelopment Auth.
6.95%, 6/1/01 (3) (Prere.) 3,995 4,491
----------
STATE TOTAL 451,213
----------
- --------------------------------------------------------------------------------
PUERTO RICO (.6%)
Puerto Rico Electric Power
Auth. Rev.
6.50%, 7/1/05 (1) 20,525 23,491
Puerto Rico Telephone
Auth. Rev.
5.40%, 1/1/08 9,550 9,747
----------
STATE TOTAL 33,238
----------
- --------------------------------------------------------------------------------
RHODE ISLAND (.5%)
Rhode Island Depositors Economic
Protection Corp.
6.55%, 8/1/10 (1) 26,850 30,671
----------
- --------------------------------------------------------------------------------
SOUTH CAROLINA (.1%)
Piedmont SC Municipal Power
Agency Rev.
5.40%, 1/1/07 (1) 3,200 3,348
South Carolina GO
7.25%, 5/1/97 3,915 4,090
----------
STATE TOTAL 7,438
----------
- --------------------------------------------------------------------------------
SOUTH DAKOTA (.1%)
South Dakota Health & Education
Auth. Rev.
(McKennan Hosp.)
7.50%, 7/1/04 (1) 5,845 6,477
----------
- --------------------------------------------------------------------------------
TENNESSEE (.5%)
Metropolitan Govt. of Nashville and
Davidson County TN Health
and Education CP
(Baptist Hosp.)
3.25%, 3/13/96 4,300 4,300
Shelby County TN
(Methodist Health Systems)
6.25%, 8/1/06 4,915 5,524
Tennessee BAN VRDO
3.25%, 3/6/96 18,000 18,000
----------
STATE TOTAL 27,824
----------
- --------------------------------------------------------------------------------
TEXAS (10.2%)
Anderson County TX Rev.
(Coffield Prison Farm Project)
5.50%, 3/15/04 (2) 5,715 6,035
5.50%, 3/15/05 (2) 5,590 5,869
5.50%, 3/15/06 (2) 6,985 7,287
Austin TX Combined Utilities
System Rev.
5.125%, 11/15/02 9,500 9,901
5.20%, 11/15/03 3,360 3,514
5.30%, 5/15/04 5,770 6,047
5.30%, 11/15/04 5,735 6,024
5.50%, 5/15/06 (1) 5,000 5,269
5.80%, 11/15/06 5,255 5,691
6.00%, 11/15/06 (1) 23,265 25,744
7.25%, 11/15/03 6,000 6,522
Bell County TX Health Facilities
Development Corp.
(Scott & White Hosp.)
7.625%, 9/1/03 8,340 9,004
Corpus Christi TX GO
7.50%, 11/1/97 (2) (Prere.) 1,155 1,227
7.50%, 11/1/98 (2) 1,865 1,974
Dallas-Fort Worth TX
Regional Airport
8.75%, 11/1/03 4,890 5,242
Dallas TX Independent School Dist.
5.30%, 8/15/08 7,510 7,648
5.40%, 8/15/09 20,440 20,840
5.50%, 8/15/10 24,210 24,692
5.60%, 8/15/03 (Prere.) 2,220 2,378
5.60%, 8/15/04 5,780 6,156
5.70%, 8/15/03 (Prere.) 1,230 1,325
5.70%, 8/15/06 3,520 3,723
Gulf Coast TX Waste Disposal Auth.
PCR (Amoco Oil Project)
VRDO 3.35%, 3/4/96 21,675 21,675
Harris County TX Flood Control Dist.
GO 5.60%, 10/1/01 8,900 9,492
Harris County TX Health Facilities
Development Corp. VRDO
(Methodist Hosp.)
3.45%, 3/4/96 29,500 29,500
Harris County TX Toll Road
VRDO 3.15%, 3/6/96 19,900 19,900
6.30%, 8/15/02 (3) (Prere.) 4,470 5,019
6.30%, 8/15/04 (3) 840 933
Houston TX GO
5.00%, 3/1/04 6,265 6,432
5.10%, 3/1/06 12,200 12,445
5.80%, 3/1/02 5,080 5,466
7.00%, 3/1/08 48,405 57,403
7.30%, 3/1/98 (3) (Prere.) 3,000 3,205
Houston TX Hotel Occupancy
5.25%, 7/1/07 (4) 6,585 6,668
Houston TX Housing Finance Corp.
TOB VRDO 3.35%, 3/7/96 (4) 3,875 3,875
</TABLE>
28
<PAGE> 51
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Houston TX Water & Sewer
System Rev.
7.00%, 12/1/01 (2) $ 3,220 $ 3,668
7.00%, 12/1/02 (2) 4,125 4,759
7.00%, 12/1/03 (2) 3,100 3,613
7.60%, 12/1/02 (6) 4,010 4,295
North Central TX Health Facilities
Development Corp.
(Presbyterian Medical Center)
VRDO 3.50%, 3/4/96 (1) 7,800 7,800
San Antonio TX Electric & Gas
5.50%, 2/1/04 4,545 4,796
5.80%, 2/1/06 8,000 8,645
Tarrant County TX Water Control
& Improvement Dist.
4.50%, 3/1/11 (3) 5,000 4,546
Texas GO
6.00%, 10/1/06 6,000 6,634
6.00%, 10/1/08 5,000 5,527
8.00%, 10/1/07 50,000 64,300
Texas Municipal Power Agency
6.10%, 9/1/07 (1) 12,500 13,889
6.10%, 9/1/08 (1) 27,840 30,909
6.10%, 9/1/09 (1) 5,000 5,530
Texas Public Finance Auth.
Building Rev.
5.45%, 10/1/06 3,260 3,432
5.75%, 10/1/09 5,000 5,252
6.60%, 2/1/00 (1) 5,000 5,437
6.75%, 2/1/02 (1) 5,000 5,524
6.80%, 2/1/03 (1) 5,000 5,512
Texas Water Resource
Finance Auth.
7.50%, 8/15/01 3,945 4,293
Univ. of Texas Permanent
Univ. Fund
5.00%, 7/1/03++ 7,250 7,511
5.00%, 7/1/04++ 6,000 6,198
6.00%, 7/1/05++ 3,740 4,131
6.00%, 7/1/06++ 3,000 3,311
6.40%, 7/1/02 5,000 5,583
Univ. of Texas Rev.
7.00%, 8/15/07 20,750 23,422
----------
STATE TOTAL 602,642
----------
- --------------------------------------------------------------------------------
UTAH (.1%)
Salt Lake County UT PCR VRDO
(British Petroleum)
3.45%, 3/4/96 3,500 3,500
----------
- --------------------------------------------------------------------------------
VIRGINIA (.3%)
Chesapeake Bay Bridge &
Tunnel VA
5.40%, 7/1/05 (3) 6,090 6,409
Fairfax County VA GO
7.25%, 6/1/00 5,805 6,514
Louisa VA IDA PCR CP
(Virginia Electric & Power Co.)
3.25%, 3/11/96 4,100 4,100
----------
STATE TOTAL 17,023
----------
- --------------------------------------------------------------------------------
WASHINGTON (3.2%)
King County WA GO
6.00%, 12/1/04 5,000 5,445
6.10%, 12/1/05 5,000 5,446
Seattle WA Water System
4.90%, 12/1/02 5,890 6,046
5.00%, 12/1/03 2,000 2,059
5.10%, 12/1/04 4,000 4,131
5.20%, 12/1/05 2,320 2,399
Tacoma WA Electric System Rev.
5.70%, 1/1/03 (2) 6,845 7,323
Washington GO
5.60%, 9/1/04 5,000 5,356
5.625%, 5/1/08 7,535 7,839
5.75%, 9/1/07 19,950 21,501
5.75%, 9/1/08 4,000 4,288
6.10%, 6/1/06 9,495 10,525
6.125%, 6/1/07 10,110 11,208
6.20%, 6/1/08 10,765 11,979
6.25%, 6/1/09 11,465 12,782
6.25%, 9/1/09 10,000 10,580
6.25%, 6/1/10 7,450 8,262
6.25%, 2/1/11 6,680 7,358
7.00%, 10/1/98 3,900 4,203
7.10%, 9/1/99 7,500 8,043
7.20%, 9/1/98 (Prere.) 2,365 2,555
Washington Health Care
Facilities Auth.
(Sisters of Providence)
VRDO 3.35%, 3/4/96 3,000 3,000
6.00%, 10/1/02 (2) 5,105 5,537
6.00%, 10/1/03 (2) 5,270 5,738
6.00%, 10/1/04 (2) 5,515 6,025
6.00%, 10/1/05 (2) 4,830 5,279
6.00%, 10/1/06 (2) 6,055 6,605
----------
STATE TOTAL 191,512
----------
- --------------------------------------------------------------------------------
WISCONSIN (1.6%)
Wisconsin GO
4.25%, 11/1/99 4,000 4,036
5.00%, 5/1/97 5,450 5,550
5.00%, 5/1/00 7,335 7,577
</TABLE>
29
<PAGE> 52
<TABLE>
<CAPTION>
Face Market
INTERMEDIATE-TERM Amount Value
PORTFOLIO (continued) (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
6.20%, 5/1/06 $20,990 $ 23,457
6.25%, 5/1/07 22,970 25,738
6.25%, 5/1/08 24,365 27,257
----------
STATE TOTAL 93,615
----------
- --------------------------------------------------------------------------------
WYOMING (.3%)
Lincoln WY PCR VRDO
(Exxon Project)
3.35%, 3/4/96 8,000 8,000
Platte County WY PCR
4.50%, 1/1/01 2,250 2,241
4.60%, 1/1/02 2,430 2,424
Sublette County WY VRDO
(Exxon Project)
3.35%, 3/4/96 6,900 6,900
----------
STATE TOTAL 19,565
----------
- --------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(Cost $5,509,323) 5,851,048
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (1.4%)
- --------------------------------------------------------------------------------
Other Assets--Note B 159,007
Liabilities (77,676)
----------
81,331
- --------------------------------------------------------------------------------
NET ASSETS (100%)
- --------------------------------------------------------------------------------
Applicable to 444,559,939 outstanding
$.001 par value shares
(authorized 550,000,000 shares) $5,932,379
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE $13.34
================================================================================
</TABLE>
+ See Note A to Financial Statements.
For explanations of abbreviations and other references, see page 48.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AT FEBRUARY 29, 1996,
NET ASSETS CONSISTED OF:
- --------------------------------------------------------------------------------
Amount Per
(000) Share
---------- ------
<S> <C> <C>
PAID IN CAPITAL $5,614,634 $12.62
UNDISTRIBUTED NET
INVESTMENT INCOME -- --
OVERDISTRIBUTED NET
REALIZED GAINS (23,980) (.05)
UNREALIZED APPRECIATION OF
INVESTMENTS--NOTE F 341,725 .77
- --------------------------------------------------------------------------------
NET ASSETS $5,932,379 $13.34
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Face Market
INSURED LONG-TERM Amount Value
PORTFOLIO (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS (98.9%)
- --------------------------------------------------------------------------------
ALABAMA (1.0%)
Birmingham AL Medical Center
(Special Care Medical Center)
7.25%, 7/1/15 (1) $ 6,715 $ 6,924
Columbia AL Industrial
Development Board PCR VRDO
(Alabama Power Co.)
3.45%, 3/4/96 1,400 1,400
McIntosh AL IDA VRDO
(Ciba-Geigy)
3.30%, 3/6/96 LOC 2,600 2,600
Medical Clinic Board of Bessemer AL
(Bessemer-Carraway Hosp.)
7.25%, 4/1/15 (1) 5,000 5,544
Mobile AL Water & Sewer
Commission
5.50%, 1/1/10 (3) 4,000 4,075
----------
STATE TOTAL 20,543
----------
- --------------------------------------------------------------------------------
ALASKA (1.3%)
Alaska Housing Finance Corp. VRDO
3.40%, 3/6/96 200 200
Anchorage AK Electric Rev.
8.00%, 12/1/09 (1) 2,565 3,306
8.00%, 12/1/10 (1) 2,960 3,817
Municipality of Anchorage AK GO
7.20%, 6/1/17 (2) 11,000 11,998
7.625%, 8/1/96 (3) (Prere.) 3,000 3,113
North Slope Borough AK GO
9.85%, 6/30/97 (2) (ETM) 3,000 3,240
10.00%, 6/30/04 (2) (ETM) 850 1,160
----------
STATE TOTAL 26,834
----------
- --------------------------------------------------------------------------------
ARIZONA (.6%)
Maricopa County AZ
(Samaritan Health Service)
7.00%, 12/1/16 (1) 8,650 10,437
Tucson AZ GO
5.50%, 7/1/12 (3) 1,500 1,521
----------
STATE TOTAL 11,958
----------
- --------------------------------------------------------------------------------
ARKANSAS (.5%)
North Little Rock AR Electric System
6.50%, 7/1/10 (1) 3,500 3,978
6.50%, 7/1/15 (1) 4,500 5,118
----------
STATE TOTAL 9,096
----------
- --------------------------------------------------------------------------------
CALIFORNIA (14.8%)
California Health Facilities
Finance Auth.
(Adventist Health System)
6.75%, 3/1/11 (1) 12,000 13,191
</TABLE>
30
<PAGE> 53
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
California Higher Education Loan
Auth. Student Loan Rev. VRDO
3.25%, 3/6/96 LOC $ 2,150 $ 2,150
California Housing Finance Agency
8.625%, 8/1/15 (1) 2,550 2,701
Culver City CA
Redevelopment Auth.
7.10%, 11/1/99 (2) (Prere.) 390 430
Fresno CA COP
(City Hall Project)
6.375%, 8/1/10 (2) 10,500 11,179
Irvine CA Assessment Dist. VRDO
3.75%, 3/4/96 LOC 4,500 4,500
Kern County CA Public Facilities
Project VRDO
2.95%, 3/6/96 LOC 600 600
Long Beach CA Financing Auth. Rev.
6.00%, 11/1/09 (2) 3,735 4,121
Modesto CA Irrigation Dist.
Finance Auth.
(Woodland Project)
6.50%, 10/1/22 (2) 20,225 23,063
Modesto San Juan CA Public
Power Agency
6.125%, 7/1/13 (2) 7,000 7,624
6.75%, 7/1/20 (1) 13,000 15,282
Northern California Power Agency
(Combustion Turbine Project)
6.00%, 8/15/10 (1) 3,500 3,596
(Hydroelectric Project)
5.50%, 7/1/23 (1) 23,200 22,717
Oakland CA Redevelopment Agency
(Central Dist. Project)
5.50%, 2/1/14 (2) 6,300 6,386
6.00%, 2/1/08 (2) 5,585 6,161
Orange County CA Sanitation
Dist. VRDO
2.95%, 3/7/96 (2) LOC 17,145 17,145
Pasadena CA Electric Works Rev.
5.375%, 8/1/12 9,000 8,812
Pittsburg CA
Redevelopment Agency
5.50%, 8/1/07 (3) 3,000 3,117
5.50%, 8/1/15 (3) 5,000 4,912
Riverside County CA
Transportation Comm.
5.75%, 6/1/07 (2) 3,495 3,746
5.75%, 6/1/08 (2) 1,750 1,892
Sacramento County CA TRAN
4.75%, 10/4/96 7,500 7,566
Sacramento CA Municipal
Utility Dist.
5.75%, 8/15/13 (1) 12,360 12,533
6.50%, 9/1/13 (1) 8,895 10,070
San Diego County CA TRAN
4.50%, 9/30/96 10,000 10,070
San Diego CA Area Local
Govt. TRAN
4.75%, 10/18/96 9,000 9,074
San Jose CA Merged Area
Redevelopment Project Rev.
7.50%, 8/1/96 (1) (Prere.) 2,700 2,801
7.50%, 8/1/96 (3) (Prere.) 1,440 1,494
San Jose CA Tax Redevelopment
6.00%, 8/1/10 (1) 8,105 8,878
Santa Clara CA County
Finance Auth.
Lease Rev. VRDO
2.90%, 3/6/96 12,100 12,100
Santa Clara CA Redevelopment
Agency
(Bayshore North Project)
7.00%, 7/1/10 (2) 3,000 3,561
Santa Clara CA Valley Water Dist.
6.00%, 2/1/24 (3) 5,000 5,173
Santa Margarita/Dana Point CA
Improvement Dist.
5.75%, 8/1/20 (1) 8,500 8,566
Santa Rosa CA Waste
Water Recovery
6.00%, 9/1/15 (3) 5,000 5,328
South County CA Waste
Water Auth.
(Gilroy)
5.50%, 8/1/22 (3) 8,000 7,836
(Morgan Hill)
5.50%, 8/1/22 (3) 7,000 6,856
Southern California Public
Power Auth.
(Palo Verde)
5.00%, 7/1/15 (2) 2,605 2,401
Southern California Rapid
Transit Dist.
5.80%, 9/1/06 (2) 4,000 4,351
5.90%, 9/1/07 (2) 3,155 3,468
Transmission Agency of Northern
California
5.25%, 5/1/08 (1) 4,000 4,108
Ukiah CA Electric Rev.
6.25%, 6/1/18 (1) 6,330 6,934
----------
STATE TOTAL 296,493
----------
- --------------------------------------------------------------------------------
COLORADO (.8%)
Colorado Health Facilities Auth.
(Sisters of Charity Health
System Inc.)
6.00%, 5/15/13 (1) 12,500 12,818
</TABLE>
31
<PAGE> 54
<TABLE>
<CAPTION>
Face Market
INSURED LONG-TERM Amount Value
PORTFOLIO (continued) (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Denver County CO Health Facilities
(St. Anthony's Hosp.)
7.70%, 5/1/07 (1) $ 2,800 $ 3,126
----------
STATE TOTAL 15,944
----------
- --------------------------------------------------------------------------------
CONNECTICUT (.3%)
Connecticut Transportation
Infrastructure Rev.
5.625%, 10/1/14 (3) 3,000 3,045
South Central Connecticut
Regional Water Auth.
5.75%, 8/1/12 (3) 3,100 3,195
----------
STATE TOTAL 6,240
----------
- --------------------------------------------------------------------------------
DELAWARE (1.3%)
Delaware Economic
Development Auth.
(Delmarva Power and Light)
7.30%, 9/1/15 (3) 4,000 4,468
Delaware Health Facilities Auth.
(Delaware Medical Center)
7.00%, 10/1/15 (1) 6,000 6,594
Dover DE Electric Rev.
5.75%, 7/1/15 (3) 5,225 5,297
6.10%, 7/1/11 (3) 2,000 2,128
Sussex County DE Waste
Water Rev.
5.50%, 6/15/20 (1) 3,000 2,945
5.50%, 6/15/25 (1) 2,100 2,058
6.60%, 6/15/25 (1) 2,500 2,864
----------
STATE TOTAL 26,354
----------
- --------------------------------------------------------------------------------
DISTRICT OF COLUMBIA
District of Columbia Housing
Finance Agency
10.25%, 11/1/09 (3) 825 846
----------
- --------------------------------------------------------------------------------
FLORIDA (8.1%)
Coral Springs FL Improvement
Dist. Water & Sewer GO
6.00%, 6/1/10 (1) 3,000 3,287
Dade County FL Water &
Sewer System Rev.
VRDO 3.05%, 3/6/96 (3) 3,605 3,605
5.50%, 10/1/25 (3) 13,000 12,812
Davie FL Water & Sewer Rev.
6.375%, 10/1/12 (2) 2,620 2,962
Florida Municipal Power Agency
(Stanton Project)
5.00%, 10/1/19 (1) 8,100 7,468
Florida State Board of Education
5.50%, 6/1/17 (1) 8,650 8,564
City of Jacksonville FL Guaranteed
Entitlement Rev.
5.50%, 10/1/12 (2) 4,900 4,957
Lee County FL Gas Tax
5.50%, 10/1/09 (1) 2,000 2,030
Orange and Orlando County FL
Expressway Auth.
8.25%, 7/1/13 (3) 9,695 13,005
8.25%, 7/1/15 (3) 8,360 11,283
8.25%, 7/1/16 (3) 12,295 16,718
Orange County FL Health
Auth. Hosp.
(Adventist for Sunbelt Group)
6.25%, 11/15/10 (2) 4,000 4,357
Palm Beach FL Criminal Justice
7.20%, 6/1/14 (3) 16,300 19,915
7.20%, 6/1/15 (3) 4,000 4,915
Palm Beach FL Solid Waste Auth.
7.40%, 12/1/05 (6) 750 824
St. Lucie County FL Utilities
System Rev.
6.00%, 10/1/20 (3) (ETM) 2,350 2,581
Seacoast FL Utility Auth.
Water & Sewer
5.00%, 3/1/19 (3) 2,000 1,846
5.50%, 3/1/13 (3) 4,000 4,028
5.50%, 3/1/19 (3) 2,000 2,039
Tampa FL Utilities Rev.
6.75%, 10/1/10 (2) 9,330 10,953
6.75%, 10/1/11 (2) 9,965 11,659
6.75%, 10/1/12 (2) 10,635 12,464
----------
STATE TOTAL 162,272
----------
- --------------------------------------------------------------------------------
GEORGIA (2.6%)
Burke County GA Development
Auth. PCR VRDO
(Oglethorpe Power)
3.05%, 3/6/96 (3) 4,700 4,700
(Georgia Power Co.)
3.40%, 3/4/96 6,700 6,700
3.45%, 3/4/96 6,400 6,400
3.50%, 3/4/96 6,400 6,400
Henry County GA School Dist. GO
6.45%, 8/1/11 (1) 4,000 4,535
Municipal Electric Auth. of Georgia
CP 3.25%, 3/15/96 LOC 17,600 17,600
Private Colleges & Universities
Auth. GA
(Mercer Univ.)
6.50%, 11/1/15 (1) 5,000 5,654
----------
STATE TOTAL 51,989
----------
- --------------------------------------------------------------------------------
</TABLE>
32
<PAGE> 55
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
HAWAII (1.7%)
Hawaii Airport System Rev.
6.35%, 7/1/07 (1) $ 8,000 $ 8,840
Hawaii County GO
5.50%, 5/1/08 (3) 2,000 2,111
5.55%, 5/1/09 (3) 1,000 1,055
5.55%, 5/1/10 (3) 2,500 2,615
Honolulu HI City & County GO
5.10%, 11/1/07 (1) 3,480 3,522
5.10%, 11/1/08 (1) 1,000 1,003
6.00%, 11/1/10 (1) 1,500 1,624
8.00%, 10/1/10 11,000 14,214
----------
STATE TOTAL 34,984
----------
- --------------------------------------------------------------------------------
ILLINOIS (5.2%)
Chicago IL Board of Education GO
6.25%, 1/1/11 (1) 7,000 7,692
Chicago IL Public Building Comm.
7.00%, 1/1/20 (1) (ETM) 21,500 25,464
Chicago IL Waste Water
Transmission
6.50%, 1/1/08 (3) 1,315 1,483
Cook County IL GO
7.25%, 11/1/07 (1) 6,000 7,245
Illinois Development
Finance Auth. PCR
(Illinois Power Co.)
7.40%, 12/1/24 (1) 14,000 16,408
Illinois Regional Transit
Auth. Cook, DuPage and
Kane Counties GO
7.20%, 11/1/20 (2) 24,000 29,396
O'Hare International
Airport IL Rev.
6.375%, 1/1/15 (1) 11,500 12,420
Will County IL Community Unit
School Dist.
(Romeoville)
7.10%, 12/1/09 (2) 1,750 2,097
7.10%, 12/1/10 (2) 1,615 1,930
----------
STATE TOTAL 104,135
----------
- --------------------------------------------------------------------------------
INDIANA (1.0%)
Indiana Municipal Power Agency
6.125%, 1/1/13 (1) 13,250 14,410
Merrillville IN School Building Corp.
6.65%, 7/1/06 (1) 5,500 6,287
----------
STATE TOTAL 20,697
----------
- --------------------------------------------------------------------------------
KANSAS (.1%)
Kansas Highway Refunding Rev.
9.00%, 7/1/97 (1) (ETM) 1,200 1,285
----------
- --------------------------------------------------------------------------------
KENTUCKY (1.6%)
Boone County KY PCR
(Cincinnati Gas & Electric)
5.50%, 1/1/24 (1) 2,000 1,958
Kentucky Development Finance
Auth. Hosp. Facilities Rev.
(St. Elizabeth's Medical Center)
6.00%, 11/1/10 (3) 23,885 24,906
Kentucky Housing Corp.
8.875%, 7/1/19 (6) 465 476
Kentucky Turnpike Economic
Development
5.50%, 7/1/09 (2) 3,630 3,801
----------
STATE TOTAL 31,141
----------
- --------------------------------------------------------------------------------
LOUISIANA (2.2%)
Jefferson Parish LA Sales Tax Rev.
6.75%, 12/1/06 (3) 8,500 9,472
New Orleans LA Capital
Appreciation
0.00%, 9/1/13 (2) 9,000 3,365
New Orleans LA GO
0.00%, 9/1/10 (2) 8,500 3,842
0.00%, 9/1/11 (2) 10,475 4,449
6.00%, 9/1/21 (2) 22,250 22,836
----------
STATE TOTAL 43,964
----------
- --------------------------------------------------------------------------------
MAINE (.8%)
Maine Health & Higher Education
Facilities Auth.
(Eastern Maine Medical Center)
6.375%, 10/1/21 (3) 8,000 8,490
Maine Turnpike Rev.
6.00%, 7/1/18 (1) 7,000 7,284
----------
STATE TOTAL 15,774
----------
- --------------------------------------------------------------------------------
MARYLAND (.7%)
Maryland Health & Education
Facilities Auth.
(Univ. of Maryland
Medical System)
7.00%, 7/1/22 (3) 12,025 14,595
----------
- --------------------------------------------------------------------------------
MASSACHUSETTS (7.6%)
Boston MA GO
6.50%, 7/1/12 (2) 4,750 5,235
Boston MA Water & Sewer Comm.
5.25%, 11/1/11 (3) 5,000 4,890
7.25%, 11/1/06 (6) 2,500 2,685
Lawrence MA GO
4.75%, 2/15/14 (2) 1,500 1,369
Massachusetts GO
TOB VRDO 3.00%, 3/6/96 (1) 700 700
7.00%, 7/1/09 (3) 32,250 38,367
</TABLE>
33
<PAGE> 56
<TABLE>
<CAPTION>
Face Market
INSURED LONG-TERM Amount Value
PORTFOLIO (continued) (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Massachusetts Health and
Education Facilities Auth.
(Boston College)
6.75%, 7/1/11 (3) $ 6,595 $ 7,313
(Falmouth Hosp.)
5.50%, 7/1/08 (1) 1,425 1,471
(Lahey Clinic)
5.25%, 7/1/10 (1) 14,120 13,951
7.85%, 7/1/03 (1) 3,360 4,033
(Massachusetts General Hosp.)
6.25%, 7/1/12 (2) 19,650 21,627
Massachusetts Housing Finance
Agency Rev.
5.55%, 10/1/05 (2) 5,230 5,347
5.95%, 10/1/08 (2) 27,485 28,339
Massachusetts Municipal
Wholesale Electric Power Supply
System Rev.
5.10%, 7/1/07 (2) 3,280 3,308
Massachusetts State Turnpike
Auth. BAN
5.00%, 6/1/99 11,000 11,312
Southeastern Massachusetts Univ.
Building Auth. Rev.
5.75%, 5/1/16 (2) 2,000 2,023
----------
STATE TOTAL 151,970
----------
- --------------------------------------------------------------------------------
MICHIGAN (3.9%)
Detroit MI Sewer System Rev.
5.45%, 7/1/07 (3) 6,850 7,099
5.684%, 7/1/23 (3) 10,000 9,876
Michigan Strategic Fund
(Detroit Edison)
7.00%, 7/15/08 (1) 18,375 21,999
Monroe County MI Economic
Development Corp.
(Detroit Edison)
6.95%, 9/1/22 (3) 25,000 30,266
St. Clair MI Economic
Development Corp. PCR
(Detroit Edison)
6.40%, 8/1/24 (2) 8,000 8,786
----------
STATE TOTAL 78,026
----------
- --------------------------------------------------------------------------------
MINNESOTA (.6%)
Dakota County MN Housing &
Redevelopment Auth.
9.375%, 5/1/18 (3) 40 42
Southern Minnesota Municipal Power
Agency Supply System Rev.
5.50%, 1/1/15 (2) (Prere.) 3,880 3,934
5.50%, 1/1/15 (2) 6,120 6,014
Western Minnesota Municipal
Power Agency
9.75%, 1/1/16 (1) (ETM) 845 1,292
----------
STATE TOTAL 11,282
----------
- --------------------------------------------------------------------------------
MISSISSIPPI (1.1%)
Jackson County MS PCR Rev.
(Chevron)
VRDO 3.35%, 3/4/96 8,500 8,500
Jackson County MS Port
Facilities Rev. VRDO
(Chevron)
3.35%, 3/4/96 10,500 10,500
Jackson MS Water & Sewer System
4.50%, 9/1/10 (1) 1,500 1,375
5.20%, 9/1/07 (1) 2,000 2,031
----------
STATE TOTAL 22,406
----------
- --------------------------------------------------------------------------------
MISSOURI (.3%)
Missouri Health & Education
Facilities Auth.
(Lester Cox Medical Center)
5.25%, 6/1/15 (1) 5,000 4,905
St. Louis County MO Single Family
Mortgage Rev.
9.25%, 10/1/16 (2) 890 946
----------
STATE TOTAL 5,851
----------
- --------------------------------------------------------------------------------
MONTANA (.1%)
Forsyth MT PCR
(Montana Power Co.)
6.125%, 5/1/23 (2) 1,500 1,580
----------
- --------------------------------------------------------------------------------
NEBRASKA
Nebraska Investment Finance Auth.
9.10%, 11/15/06 (3) 823 851
----------
- --------------------------------------------------------------------------------
NEVADA (.3%)
Clark County NV GO
6.50%, 6/1/17 (2) 5,000 5,662
----------
- --------------------------------------------------------------------------------
NEW HAMPSHIRE (.4%)
New Hampshire Higher Education
(Hitchcock Clinic)
6.00%, 7/1/15 (1) 7,560 7,806
----------
- --------------------------------------------------------------------------------
NEW JERSEY (5.4%)
Atlantic County NJ COP
7.40%, 3/1/12 (3) 4,335 5,325
Camden County NJ Municipal
Utility Auth.
5.30%, 7/15/13 (3) 5,000 4,917
5.30%, 7/15/14 (3) 5,000 4,905
</TABLE>
34
<PAGE> 57
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Hoboken-Union City-Weehawken NJ
Sewage Auth.
6.25%, 8/1/14 (1) $10,185 $ 11,326
6.25%, 8/1/15 (1) 10,820 12,071
New Jersey GO PUT
TOB VRDO 3.10%, 3/6/96 2,200 2,200
New Jersey Health Care Facility
Finance Auth.
(St. Clares-Riverside
Medical Center)
5.75%, 7/1/14 (1) 3,000 3,025
New Jersey Sports &
Exposition Auth.
6.50%, 3/1/13 (1) 18,795 21,462
New Jersey Turnpike Auth.
VRDO 2.80%, 3/6/96 (3) LOC 3,400 3,400
6.50%, 1/1/13 (1) 30,000 34,156
6.50%, 1/1/16 (1) 5,000 5,658
----------
STATE TOTAL 108,445
----------
- --------------------------------------------------------------------------------
NEW MEXICO (.7%)
Albuquerque NM Hosp. System
(Presbyterian Health)
6.375%, 8/1/07 (1) 4,000 4,394
Farmington NM Utility Systems Rev.
5.75%, 5/15/13 (3) 3,000 3,063
Santa Fe NM Rev.
6.30%, 6/1/24 (2) 5,000 5,611
----------
STATE TOTAL 13,068
----------
- --------------------------------------------------------------------------------
NEW YORK (2.1%)
New York City GO
RAN 4.75%, 6/28/96 LOC 10,000 10,041
6.625%, 8/1/15 (2) 50 55
New York City Municipal Water and
Sewer System Rev.
7.00%, 6/15/01 (2) (Prere.) 1,905 2,170
7.00%, 6/15/09 (2) 1,845 2,061
New York Municipal Water
Finance Auth.
5.875%, 6/15/25 (1) 4,000 4,101
New York State Medical Care
Facilities Finance Agency Mental
Health Improvement
6.00%, 8/15/15 (1) 5,000 5,191
Suffolk County NY Water Auth.
5.75%, 6/1/13 (2) 7,345 7,533
Triborough Bridge & Tunnel
Auth. NY Rev.
5.00%, 1/1/17 (1) 6,000 5,519
6.00%, 1/1/14 4,500 4,651
6.00%, 1/1/15 (2) 1,275 1,323
----------
STATE TOTAL 42,645
----------
- --------------------------------------------------------------------------------
NORTH CAROLINA (.2%)
North Carolina Municipal
Power Agency
(Catawba Electric)
6.00%, 1/1/10 (1) 4,000 4,366
----------
- --------------------------------------------------------------------------------
NORTH DAKOTA (1.1%)
Bismarck ND Medical Center
7.50%, 5/1/13 (6) 10,000 11,041
Mercer County ND PCR
(Basin Electric Power)
6.05%, 1/1/19 (2) 10,000 10,460
----------
STATE TOTAL 21,501
----------
- --------------------------------------------------------------------------------
OHIO (4.1%)
Akron Bath Copley OH Joint
Township Hosp. Dist.
(Akron General)
6.00%, 1/1/22 (2) 3,100 3,178
Cleveland OH Airport System Rev.
0.00%, 1/1/06 (1) 3,475 2,140
7.25%, 1/1/20 (1) 50 55
Cleveland OH GO
5.30%, 9/1/07 (2) 3,500 3,621
Cleveland OH Public Power
System Rev.
7.00%, 11/15/16 (1) 5,000 5,760
Cleveland OH School Dist. GO
5.875%, 12/1/11 (3) 4,720 4,894
Cleveland OH Water Works Rev.
5.50%, 1/1/21 (1) 1,000 1,004
6.25%, 1/1/15 (2) 2,500 2,662
Columbus OH Sewer Rev. VRDO
3.05%, 3/7/96 5,200 5,200
Cuyahoga County OH VRDO
(St. Luke's Hosp.)
3.25%, 3/6/96 LOC 1,300 1,300
Franklin OH Convention
Center Rev.
0.00%, 12/1/06 (1) 4,355 2,580
Franklin OH Hosp. Facility Auth.
(Riverside Hosp.)
7.25%, 5/15/20 (1) 2,050 2,279
Hamilton OH Gas System
5.15%, 10/15/13 (1) 2,750 2,627
Lucas County OH GO
6.95%, 12/1/11 (1) 900 1,001
Northeast Ohio Regional Sewer Dist.
6.50%, 11/15/16 (2) 5,750 6,439
Ohio Air Quality Development
Auth. PCR
(Ohio Edison)
7.10%, 6/1/18 (3) 6,500 7,204
7.45%, 3/1/16 (3) 9,500 10,605
</TABLE>
35
<PAGE> 58
<TABLE>
<CAPTION>
Face Market
INSURED LONG-TERM Amount Value
PORTFOLIO (continued) (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Ohio Building Auth.
(Transportation Facilities)
7.00%, 9/1/07 (1) $ 1,420 $ 1,580
Ohio GO
7.625%, 8/1/09 4,345 5,489
Ohio Higher Education
Facilities Auth.
(Univ. of Dayton)
6.60%, 12/1/17 (3) 1,200 1,337
Ohio Water Development Auth.
5.50%, 12/1/14 (1) 3,500 3,520
7.00%, 12/1/09 (2) (ETM) 1,500 1,737
Reynoldsburg OH School Dist. GO
6.55%, 12/1/17 (3) 2,000 2,215
Summit OH Limited Tax GO
6.90%, 8/1/12 (2) 2,750 3,071
Univ. of Toledo OH
5.75%, 12/1/12 (3) 1,000 1,025
----------
STATE TOTAL 82,523
----------
- --------------------------------------------------------------------------------
OKLAHOMA (.3%)
Grand River OK Dam Auth. Rev.
5.75%, 6/1/06 (4) 5,800 6,325
----------
- --------------------------------------------------------------------------------
OREGON (.1%)
Oregon Health, Housing,
Educational & Cultural Facilities
(Lewis & Clark College)
6.00%, 10/1/13 (1) 2,250 2,369
----------
- --------------------------------------------------------------------------------
PENNSYLVANIA (9.3%)
Allegheny County PA Hosp. Auth.
(Presbyterian Hosp.)
7.125%, 7/1/99 (1) (Prere.) 12,500 13,907
Allegheny County PA Sanitary Auth.
5.50%, 12/1/16 (3) 10,000 9,841
Armstrong County PA Hosp.
Auth. Rev.
6.25%, 6/1/13 (2) 18,400 19,567
Delaware River Joint Toll
Bridge Comm. PA Rev.
6.00%, 7/1/18 (3) 10,500 10,845
Lehigh County PA General
Purpose Auth.
(Lehigh Valley Hosp.)
6.50%, 7/1/10 (1) 6,655 7,377
Pennsylvania Convention Center
Auth. Rev.
6.00%, 9/1/19 (3) 10,000 10,949
6.70%, 9/1/16 (3) 9,970 11,579
Pennsylvania Turnpike Comm. Rev.
5.50%, 12/1/12 (2) 7,000 7,050
5.50%, 12/1/17 (3) 10,470 10,222
5.50%, 12/1/19 (3) 25,000 24,511
6.00%, 6/1/15 (1) 1,000 1,034
Philadelphia PA Gas Works Rev.
6.00%, 5/15/12 (2) 3,000 3,108
Philadelphia PA GO
5.00%, 5/15/20 (1) 10,000 9,259
Philadelphia PA Water &
Wastewater Rev.
7.00%, 6/15/10 (3) 15,000 17,799
7.00%, 6/15/11 (3) 16,500 19,528
Pittsburgh PA Water & Sewer
System Rev.
7.25%, 9/1/14 (3) (ETM) 5,000 5,916
Sayre PA Health Care Facility Auth.
VRDO 3.20%, 3/6/96 (2) 3,700 3,700
----------
STATE TOTAL 186,192
----------
- --------------------------------------------------------------------------------
PUERTO RICO (.2%)
Puerto Rico Public Building Auth.
0.00%, 7/1/01 (3) 4,150 3,290
----------
- --------------------------------------------------------------------------------
RHODE ISLAND (.5%)
Rhode Island Public Building Auth.
6.00%, 2/1/11 (2) 3,805 3,901
Rhode Island Convention Auth.
5.25%, 5/15/15 (1) 3,000 2,881
Rhode Island Depositors
Economic Project
5.80%, 8/1/11 (1) 1,250 1,317
5.80%, 8/1/12 (1) 2,000 2,102
----------
STATE TOTAL 10,201
----------
- --------------------------------------------------------------------------------
SOUTH CAROLINA (4.2%)
North Charleston SC Sewer Dist. Rev.
6.375%, 7/1/12 (1) 2,750 3,080
Piedmont SC Municipal Power
Agency Rev.
5.00%, 1/1/18 (3) 27,500 25,175
6.75%, 1/1/19 (3) 10,600 12,418
6.75%, 1/1/20 (3) 23,515 27,635
South Carolina Public Service
Auth. Rev.
6.25%, 1/1/22 (2) 13,000 13,910
----------
STATE TOTAL 82,218
----------
- --------------------------------------------------------------------------------
SOUTH DAKOTA (.7%)
South Dakota Health &
Educational Facilities Auth. Rev.
(McKennan Hosp.)
7.625%, 7/1/14 (1) 11,500 12,796
----------
- --------------------------------------------------------------------------------
TENNESSEE (.7%)
Knox County TN Health, Education &
Housing Facility
(Fort Sanders Hosp.)
8.00%, 1/1/08 (1) 3,000 3,245
</TABLE>
36
<PAGE> 59
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Shelby County TN Health,
Education & Housing Facility
(Methodist Health System)
5.50%, 8/1/12 (1) $ 7,500 $ 7,506
Tennessee Housing
Development Agency
7.125%, 7/1/17 (1) 2,760 2,936
----------
STATE TOTAL 13,687
----------
- --------------------------------------------------------------------------------
TEXAS (6.4%)
Austin TX Combined Utilities
System Rev.
5.75%, 11/15/16 (2) 10,000 10,082
Colorado River Municipal Water
Dist. TX Rev.
6.00%, 1/1/16 (2) 6,000 6,159
Corpus Christi TX Utilities
System Rev.
7.00%, 7/15/10 (3) 7,500 8,341
Harris County Toll Road VRDO
3.15%, 3/6/96 600 600
Houston TX Public Improvement
7.00%, 3/1/08 16,000 18,974
Houston TX Water & Sewer Rev.
7.00%, 12/1/20 (1) 12,280 13,756
Houston TX Water Conveyance
System
6.125%, 12/15/09 (2) 2,000 2,231
6.25%, 12/15/12 (2) 8,340 9,302
6.80%, 12/15/10 (2) 5,490 6,470
6.80%, 12/15/11 (2) 8,910 10,464
7.50%, 12/15/12 (2) 1,000 1,254
7.50%, 12/15/13 (2) 1,100 1,382
Lower Colorado River Auth. TX Rev.
5.625%, 1/1/15 (4) (Prere.) 3,055 3,148
San Antonio TX Electric & Gas
System Rev.
0.00%, 2/1/06 (3) 18,000 10,879
0.00%, 2/1/07 (3) 15,000 8,517
Texas TRAN
4.75%, 8/30/96 11,950 12,035
Texas Turnpike Auth. Dallas
North Toll
(Addison Project)
6.60%, 1/1/23 (3) 4,500 4,968
----------
STATE TOTAL 128,562
----------
- --------------------------------------------------------------------------------
VIRGINIA (1.2%)
Chesapeake Hosp. Auth. VA
(Chesapeake General Hosp.)
5.30%, 7/1/08 (1) 2,250 2,274
5.50%, 7/1/12 (1) 2,000 2,001
Henry County VA Public
Service Auth.
6.25%, 11/15/19 (3) 1,500 1,573
Norfolk VA Water Development
5.90%, 11/1/25 (1) 12,150 12,490
Prince William County VA Service
Auth. Rev.
6.00%, 7/1/29 (3) 4,500 4,617
----------
STATE TOTAL 22,955
----------
- --------------------------------------------------------------------------------
WASHINGTON (1.3%)
Snohomish County WA Mukilteo
School Dist.
5.60%, 12/1/08 (3) 6,960 7,424
5.65%, 12/1/09 (3) 9,160 9,765
5.65%, 12/1/10 (3) 3,950 4,177
5.70%, 12/1/11 (3) 5,000 5,277
----------
STATE TOTAL 26,643
----------
- --------------------------------------------------------------------------------
WEST VIRGINIA (1.3%)
Berkeley Brooke Fayette
Counties WV Single
Family Mortgage
9.10%, 8/1/11 (3) 470 482
West Virginia Hosp. Finance Auth.
(Charleston Medical Center)
5.75%, 9/1/13 (1) 8,000 8,148
West Virginia State Building
Comm. Rev.
7.00%, 7/1/11 (1) 7,325 8,672
7.00%, 7/1/12 (1) 7,840 9,303
----------
STATE TOTAL 26,605
----------
- --------------------------------------------------------------------------------
WISCONSIN (.2%)
Wisconsin Health & Education
(St. Luke's Medical Center)
7.10%, 8/15/11 (1) 4,000 4,497
----------
- --------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(Cost $1,801,709) 1,979,466
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (1.1%)
- --------------------------------------------------------------------------------
Other Assets--Note B 28,785
Liabilities (6,017)
----------
22,768
- --------------------------------------------------------------------------------
NET ASSETS (100%)
- --------------------------------------------------------------------------------
Applicable to 160,671,279 outstanding
$.001 par value shares
(authorized 250,000,000 shares) $2,002,234
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE $12.46
================================================================================
</TABLE>
+ See Note A to Financial Statements.
For explanations of abbreviations and other references, see page 48.
37
<PAGE> 60
INSURED LONG-TERM
PORTFOLIO (continued)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AT FEBRUARY 29, 1996,
NET ASSETS CONSISTED OF:
- --------------------------------------------------------------------------------
Amount Per
(000) Share
---------- ------
<S> <C> <C>
PAID IN CAPITAL $1,840,826 $11.46
UNDISTRIBUTED NET
INVESTMENT INCOME -- --
OVERDISTRIBUTED NET
REALIZED GAINS (18,174) (.11)
UNREALIZED APPRECIATION
--NOTE F:
INVESTMENT SECURITIES 177,757 1.10
FUTURES CONTRACTS 1,825 .01
- --------------------------------------------------------------------------------
NET ASSETS $2,002,234 $12.46
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Face Market
LONG-TERM Amount Value
PORTFOLIO (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS (100.0%)
- --------------------------------------------------------------------------------
ALASKA (.6%)
Alaska Housing Finance
Corp. VRDO
3.20%, 3/6/96 $ 6,800 $ 6,800
----------
- --------------------------------------------------------------------------------
CALIFORNIA (10.2%)
California GO
6.00%, 8/1/15 (3) 15,000 15,673
6.25%, 9/1/12 5,000 5,437
California Public Works Rev.
(Community College Project)
7.00%, 3/1/19 5,800 6,501
Foothill/Eastern CA Transport
Corridor Agency Rev.
6.00%, 1/1/34 3,725 3,559
Fresno CA Sewer
6.25%, 9/1/10 (2) 6,395 7,170
Los Angeles County CA COP
(Capital Facility Project)
6.50%, 3/1/10 21,815 22,391
Riverside County CA VRDO
(Public Facilities Project)
2.95%, 3/5/96 LOC 2,800 2,800
San Bernardino CA COP
(Capital Facility Project)
6.875%, 8/1/24 (ETM) 18,000 22,077
(Medical Center Project)
5.50%, 8/1/19 11,400 10,447
5.50%, 8/1/24 14,295 12,912
Santa Clara CA El Camino Hosp.
Dist. VRDO
2.90%, 3/5/96 LOC 5,400 5,400
----------
STATE TOTAL 114,367
----------
- --------------------------------------------------------------------------------
CONNECTICUT (1.6%)
Connecticut Development Auth. PCR
(Connecticut Light & Power)
VRDO 3.15%, 3/6/96 LOC 17,410 17,410
----------
- --------------------------------------------------------------------------------
DISTRICT OF COLUMBIA (1.7%)
District of Columbia GO
6.75%, 6/1/05 (2) 6,290 6,831
7.75%, 6/1/96 (Prere.) 11,970 12,337
----------
STATE TOTAL 19,168
----------
- --------------------------------------------------------------------------------
FLORIDA (1.0%)
Dade County FL Water & Sewer
System Rev. VRDO
3.05%, 3/6/96 (3) 9,760 9,760
Gulf Breeze FL Local Govt.
Loan Program VRDO
3.10%, 3/7/96 (3) 2,000 2,000
----------
STATE TOTAL 11,760
----------
- --------------------------------------------------------------------------------
</TABLE>
38
<PAGE> 61
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
GEORGIA (4.2%)
Burke County GA Development
Auth. VRDO
(Georgia Power Co.)
3.40%, 3/4/96 $ 6,600 $ 6,600
(Oglethorpe Power)
3.05%, 3/6/96 (3) 13,700 13,700
College Park GA GO
(Civic Center)
7.00%, 9/1/10 11,500 13,227
Metropolitan Atlanta GA Rapid
Transit Auth. Rev.
6.25%, 7/1/18 12,170 13,335
----------
STATE TOTAL 46,862
----------
- --------------------------------------------------------------------------------
ILLINOIS (5.0%)
Chicago IL Metropolitan Water
Capital Improvement Rev.
7.00%, 1/1/11 20,000 23,552
Chicago IL Public Building Comm.
7.00%, 1/1/20 (1) (ETM) 6,000 7,106
Chicago IL Skyway Toll Bridge Rev.
6.50%, 1/1/10 7,750 8,011
Illinois Development Finance
Auth. PCR
(Illinois Power Co. Project)
VRDO 3.30%, 3/6/96 LOC 700 700
7.40%, 12/1/24 (1) 8,150 9,552
Metropolitan Pier & Exposition
Auth. IL Rev.
6.75%, 6/1/10 (1) 6,000 6,967
----------
STATE TOTAL 55,888
----------
- --------------------------------------------------------------------------------
INDIANA (2.5%)
Indiana Health Facilities Finance
Auth. Rev.
(Ancilla System, Inc.)
5.75%, 7/1/15 (1) 4,470 4,470
Indiana State Office Building
Comm. Rev.
6.90%, 7/1/11 16,875 19,471
Rockport IN PCR VRDO
(AEP Generating Co. Project)
3.45%, 3/4/96 (2) 4,000 4,000
----------
STATE TOTAL 27,941
----------
- --------------------------------------------------------------------------------
LOUISIANA (2.6%)
De Soto Parish LA PCR
(Southwestern Electric
Power Co.)
7.60%, 1/1/19 24,300 27,854
Jefferson Parish LA Single Family
Mortgage Rev.
9.375%, 11/1/07 (3) 175 185
Louisiana Recovery Dist. Sales Tax
VRDO 3.50%, 3/4/96 (3) 1,200 1,200
----------
STATE TOTAL 29,239
----------
- --------------------------------------------------------------------------------
MASSACHUSETTS (7.9%)
Massachusetts Bay
Transportation Auth. Rev.
7.00%, 3/1/21 15,000 17,968
Massachusetts GO
5.75%, 5/1/12 7,500 7,597
6.50%, 8/1/11 5,460 5,912
Massachusetts Housing
Finance Agency
6.125%, 11/15/08 3,500 3,608
Massachusetts Turnpike Auth. BAN
5.00%, 6/1/99 7,000 7,198
Massachusetts VRDO
3.35%, 3/4/96 LOC 5,000 5,000
Massachusetts Water Resources
Auth. Rev.
5.50%, 7/15/22 5,000 4,798
6.50%, 7/15/19 32,000 35,952
----------
STATE TOTAL 88,033
----------
- --------------------------------------------------------------------------------
MICHIGAN (3.3%)
Detroit MI GO
6.375%, 4/1/06 8,635 8,996
6.375%, 4/1/07 10,500 10,910
Grand Rapids MI Tax
Increment Rev.
(Downtown Project)
6.875%, 6/1/24 (1) 7,500 8,502
Michigan Hosp. Finance
Auth. Rev.
(Detroit Medical Center
Obligated Group)
6.25%, 8/15/13 3,000 3,084
6.50%, 8/15/18 5,000 5,230
----------
STATE TOTAL 36,722
----------
- --------------------------------------------------------------------------------
MISSISSIPPI (1.0%)
Claiborne County MS PCR
(Middle South Energy)
9.875%, 12/1/14 10,000 11,433
----------
- --------------------------------------------------------------------------------
NEVADA (1.0%)
Humbolt County NV PCR
(Idaho Power Co.)
8.30%, 12/1/14 9,100 10,831
----------
- --------------------------------------------------------------------------------
</TABLE>
39
<PAGE> 62
<TABLE>
<CAPTION>
Face Market
LONG-TERM Amount Value
PORTFOLIO (continued) (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
NEW JERSEY (6.8%)
New Jersey Economic
Development Auth. Market
Transition Facility
5.75%, 7/1/06 (1) $34,165 $ 36,755
New Jersey Health Care
Facilities Auth. Rev.
(Atlantic City Medical Center)
6.80%, 7/1/05 3,500 3,857
New Jersey Sports & Exposition
Auth. Rev.
6.50%, 3/1/13 10,000 11,286
6.50%, 3/1/19 20,000 21,491
New Jersey Turnpike Auth. Rev.
VRDO 2.80%, 3/6/96 (3) LOC 2,900 2,900
----------
STATE TOTAL 76,289
----------
- --------------------------------------------------------------------------------
NEW YORK (13.7%)
Babylon NY Waste Water
Facilities GO
9.00%, 8/1/08 (3) 4,900 6,714
9.00%, 8/1/09 (3) 2,800 3,865
9.00%, 8/1/10 (3) 4,900 6,847
Metropolitan NY Transportation
Commuter Facilities Auth. Co.
5.70%, 7/1/24 (4) 12,545 12,526
6.375%, 7/1/18 (1) 7,500 8,078
New York City NY GO
VRDO 3.45%, 3/4/96 (1) 4,100 4,100
RAN 4.75%, 6/28/96 LOC 500 502
6.375%, 8/1/04 5,000 5,247
6.375%, 8/15/09 16,500 16,924
7.10%, 2/1/10 (1) 7,500 8,506
New York City NY Municipal
Finance Auth. Water and Sewer
System Rev.
7.00%, 6/15/01 (Prere.) 2,520 2,863
7.00%, 6/15/09 2,480 2,764
New York City NY Municipal Water
Finance Auth. VRDO
3.35%, 3/4/96 (3) 8,200 8,200
New York Local Govt.
Assistance Corp. Rev.
6.50%, 4/1/20 10,000 10,775
6.875%, 4/1/19 8,000 8,897
New York Medical Care
Facilities Finance Agency
(Hosp. & Nursing Home)
6.875%, 2/15/32 (8) 5,000 5,391
New York State Dormitory Auth. Rev.
(State Univ.)
7.50%, 5/15/11 18,900 22,499
New York Urban Development
Corp. Rev. (Correctional Facilities)
5.75%, 1/1/13 7,930 7,729
Triborough Bridge & Tunnel Auth.
NY General Purpose Rev.
6.125%, 1/1/21 10,000 11,057
----------
STATE TOTAL 153,484
----------
- --------------------------------------------------------------------------------
NORTH CAROLINA (2.7%)
Charlotte NC Airport Rev. VRDO
3.05%, 3/6/96 (1) 18,600 18,600
North Carolina Eastern Municipal
Power Agency Rev.
6.50%, 1/1/18 (ETM) 4,625 5,554
7.50%, 1/1/09 (Prere.) 4,935 6,050
----------
STATE TOTAL 30,204
----------
- --------------------------------------------------------------------------------
OHIO (.4%)
Franklin County OH Hosp. Rev.
(Holy Cross Health System)
VRDO 3.30%, 3/7/96 4,700 4,700
----------
- --------------------------------------------------------------------------------
OREGON (1.1%)
Oregon Veterans Welfare Program
GO VRDO 3.20%, 3/6/96 LOC 12,000 12,000
----------
- --------------------------------------------------------------------------------
PENNSYLVANIA (6.4%)
Pennsylvania GO
6.375%, 9/15/09 11,000 12,005
6.375%, 9/15/10 8,820 9,578
6.375%, 9/15/11 5,975 6,439
Pennsylvania Higher Education
Facilities Auth. Rev.
(Drexel Univ.)
7.70%, 5/1/12 (1) 2,660 2,722
(Temple Univ.)
VRDO 3.40%, 3/4/96 LOC 1,100 1,100
Pennsylvania Housing Finance
Agency Residential
Development Rev.
7.50%, 7/1/06 3,890 4,225
Philadelphia PA Water &
Wastewater Rev.
7.00%, 6/15/10 (3) 20,000 23,732
Pittsburgh PA Water & Sewer
Auth. Rev.
6.50%, 9/1/13 (3) 10,000 11,394
Radnor Township PA School Auth.
9.875%, 9/15/00 (ETM) 465 523
Sayre PA Health Care Facility Auth.
VRDO 3.20%, 3/6/96 (2) 200 200
----------
STATE TOTAL 71,918
----------
- --------------------------------------------------------------------------------
</TABLE>
40
<PAGE> 63
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
SOUTH CAROLINA (2.1%)
Piedmont SC Municipal Power
Agency Rev.
6.15%, 1/1/07 (1) $ 4,040 $ 4,482
6.20%, 1/1/08 (1) 3,000 3,336
6.50%, 1/1/15 (3) 14,245 16,155
----------
STATE TOTAL 23,973
----------
- --------------------------------------------------------------------------------
TEXAS (13.4%)
Austin TX Utility System Auth. Rev.
5.75%, 11/15/14 (1) 5,000 5,047
Dallas TX Independent School
Dist. Rev.
5.60%, 8/15/11 24,110 24,610
Houston TX GO
5.75%, 4/1/12 5,000 5,160
5.75%, 4/1/13 5,000 5,142
Houston TX Hotel Occupancy Rev.
5.50%, 7/1/11 (4) 21,760 21,809
Houston TX Public Improvement
7.00%, 3/1/08 5,000 5,929
Houston TX Water & Sewer
System Rev.
6.375%, 12/1/17 (2) 6,000 6,401
San Antonio TX Electric & Gas Rev.
5.00%, 2/1/17 14,135 13,015
Southwest TX Higher Education
Auth. VRDO
(Southern Methodist Univ.)
3.35%, 3/4/96 LOC 1,500 1,500
Texas City TX IDR
(Arco Pipeline Project)
7.375%, 10/1/20 17,000 20,870
Texas GO
5.50%, 4/1/20 15,000 14,693
Texas Water Development
Board Rev.
6.50%, 7/15/10 17,425 19,774
7.05%, 8/1/25 5,655 6,354
----------
STATE TOTAL 150,304
----------
- --------------------------------------------------------------------------------
VIRGINIA (2.4%)
Richmond VA Metropolitan
Expressway Auth. Rev.
6.25%, 7/15/22 (3) 7,750 8,221
6.375%, 7/15/16 (3) 5,400 5,803
Virginia Public Building Auth. Rev.
5.75%, 8/1/12 12,915 13,208
----------
STATE TOTAL 27,232
----------
- --------------------------------------------------------------------------------
WASHINGTON (3.0%)
Washington Dept. of Ecology COP
(State Office Building Project)
5.00%, 4/1/16 27,820 25,948
Washington GO
5.50%, 5/1/18 4,000 3,984
6.75%, 2/1/15 3,450 3,962
----------
STATE TOTAL 33,894
----------
- --------------------------------------------------------------------------------
WEST VIRGINIA (1.0%)
West Virginia State Building
Comm. Lease Rev.
(Jail & Correctional Facilities)
7.00%, 7/1/14 (1) 8,975 10,656
----------
- --------------------------------------------------------------------------------
WISCONSIN (4.0%)
Oak Creek WI VRDO
(Wisconsin Electric
Power Co. Project)
3.40%, 3/6/96 4,000 4,000
Wisconsin Clean Water Rev.
6.875%, 6/1/11 20,500 23,965
Wisconsin GO
6.25%, 5/1/09 10,000 11,236
Wisconsin Health and Education
Facilities Auth. CP
(Alexian Village of Milwaukee
Inc. Refinancing)
3.65%, 3/12/96 LOC 5,500 5,500
----------
STATE TOTAL 44,701
----------
- --------------------------------------------------------------------------------
WYOMING (.4%)
Sublette County WY VRDO
(Exxon Project)
3.35%, 3/4/96 4,500 4,500
----------
- --------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(Cost $1,034,993) 1,120,309
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
Other Assets--Note B 16,223
Liabilities (15,853)
----------
370
- --------------------------------------------------------------------------------
NET ASSETS (100%)
- --------------------------------------------------------------------------------
Applicable to 101,874,841 outstanding
$.001 par value shares
(authorized 250,000,000 shares) $1,120,679
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE $11.00
================================================================================
</TABLE>
+ See Note A to Financial Statements.
For explanations of abbreviations and other references, see page 48.
41
<PAGE> 64
LONG-TERM
PORTFOLIO (continued)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AT FEBRUARY 29, 1996,
NET ASSETS CONSISTED OF:
- --------------------------------------------------------------------------------
Amount Per
(000) Share
---------- ------
<S> <C> <C>
PAID IN CAPITAL $1,041,545 $10.22
UNDISTRIBUTED NET
INVESTMENT INCOME -- --
OVERDISTRIBUTED NET
REALIZED GAINS (6,182) (.06)
UNREALIZED APPRECIATION OF
INVESTMENTS--NOTE F 85,316 .84
- --------------------------------------------------------------------------------
NET ASSETS $1,120,679 $11.00
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Face Market
HIGH-YIELD Amount Value
PORTFOLIO (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS (99.2%)
- --------------------------------------------------------------------------------
ALABAMA (.2%)
Columbia AL IDA VRDO
(Alabama Power Co. Project)
3.45%, 3/4/96 $ 4,100 $ 4,100
----------
- --------------------------------------------------------------------------------
ALASKA (.8%)
Alaska Housing Finance Corp. Rev.
VRDO 3.40%, 3/6/96 8,200 8,200
North Slope Borough AK GO
7.50%, 6/30/01 (5) 2,000 2,289
Valdez AK Rev. VRDO
(Exxon Pipeline Project)
3.35%, 3/4/96 6,300 6,300
----------
STATE TOTAL 16,789
----------
- --------------------------------------------------------------------------------
ARIZONA (1.8%)
Board of Regents Rev.
(Univ. of Arizona)
6.20%, 6/1/16 26,660 29,439
Pima County AZ IDA Rev.
(La Cholla Project)
8.50%, 7/1/20 6,650 5,744
----------
STATE TOTAL 35,183
----------
- --------------------------------------------------------------------------------
ARKANSAS (.2%)
North Little Rock AR
Electric System Rev.
6.50%, 7/1/15 (1) 3,450 3,924
----------
- --------------------------------------------------------------------------------
CALIFORNIA (11.6%)
California GO
5.50%, 3/1/20 (4) 12,875 12,606
California Higher Education
Auth. Student Loan Rev. VRDO
3.25%, 3/6/96 LOC 4,100 4,100
California Public Works Rev.
(Community College Project)
7.00%, 3/1/14 14,275 15,999
7.00%, 3/1/19 18,000 20,174
(Univ. Project)
6.40%, 12/1/16 (2) 8,450 9,120
Irvine CA Assessment Dist. VRDO
3.75%, 3/4/96 LOC 4,300 4,300
Irvine CA Water Dist. VRDO
3.75%, 3/4/96 LOC 500 500
(Capital Improvement Project)
3.30%, 3/4/96 LOC 700 700
Metropolitan Water Dist. of
Southern California Rev.
6.625%, 7/1/12 3,000 3,383
</TABLE>
42
<PAGE> 65
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Orange County CA Sanitation
Dist. VRDO
2.95%, 3/7/96 (2) LOC $ 7,200 $ 7,200
3.20%, 3/4/96 LOC 4,200 4,200
3.35%, 3/4/96 (3) 2,800 2,800
San Bernardino County CA COP
(Capital Facilities Project)
6.875%, 8/1/24 (ETM) 25,220 30,933
(Medical Center Funding)
4.75%, 8/1/28 10,425 8,323
5.00%, 8/1/26 15,045 12,533
7.00%, 8/1/20 12,180 13,971
San Diego County CA TRAN
4.50%, 9/30/96 24,000 24,169
San Diego CA IDR
(San Diego Gas & Electric)
8.75%, 3/1/23 4,450 4,782
San Diego CA Unified School Dist.
TRAN 4.75%, 10/10/96 LOC 10,000 10,087
San Joaquin Hills CA
Transportation Agency Rev.
0.00%, 1/1/01 7,340 5,409
0.00%, 1/1/02 14,000 9,642
San Mateo County CA TRAN
4.50%, 7/1/96 16,000 16,055
Southern California Public Power
Auth. Rev.
5.50%, 7/1/20 7,700 7,323
6.00%, 7/1/18 3,985 3,989
----------
STATE TOTAL 232,298
----------
- --------------------------------------------------------------------------------
CONNECTICUT (.5%)
Connecticut Development Auth. PCR
(Connecticut Light & Power)
VRDO 3.15%, 3/6/96 LOC 10,705 10,705
----------
- --------------------------------------------------------------------------------
DISTRICT OF COLUMBIA (2.0%)
Metropolitan Washington Airport
Auth. Rev.
5.50%, 10/1/24 (1) 23,825 22,864
5.875%, 10/1/15 (1) 17,600 17,855
----------
STATE TOTAL 40,719
----------
- --------------------------------------------------------------------------------
FLORIDA (2.5%)
Cape Coral FL Health Facilities
Auth. Rev.
(Cape Coral Medical Center)
7.50%, 11/15/21 22,000 18,040
Citrus County FL PCR
(Florida Power Corp.)
6.35%, 2/1/22 7,000 7,381
Dade County FL Water & Sewer
System Rev. VRDO
3.05%, 3/6/96 (3) 18,380 18,380
Orlando FL Utilities Comm. Rev.
6.75%, 10/1/17 2,200 2,601
Tarpon Springs FL Health Facility
Auth. Rev.
(Tarpon Springs Hosp.)
8.75%, 5/1/12 4,000 4,317
----------
STATE TOTAL 50,719
----------
- --------------------------------------------------------------------------------
GEORGIA (2.8%)
Burke County GA PCR VRDO
(Georgia Power Co.)
3.40%, 3/4/96 3,000 3,000
3.45%, 3/4/96 4,800 4,800
(Oglethorpe Power)
3.05%, 3/6/96 (3) 22,840 22,840
Cartersville GA Water & Wastewater
Facilities (Anheuser-Busch)
7.40%, 11/1/10 5,000 6,041
Municipal Electric Auth. of
Georgia Rev.
6.60%, 1/1/18 5,000 5,578
Savannah GA Hosp. Auth. Rev.
(Candler Hosp.)
7.00%, 1/1/23 13,000 13,286
----------
STATE TOTAL 55,545
----------
- --------------------------------------------------------------------------------
ILLINOIS (6.3%)
Chicago IL Public Building Comm.
7.00%, 1/1/15 (1) (ETM) 10,000 11,401
7.00%, 1/1/20 (1) (ETM) 10,000 11,844
Chicago IL Skyway Toll Bridge Rev.
6.75%, 1/1/14 10,000 10,422
6.75%, 1/1/17 18,185 18,898
Cook County IL GO
6.60%, 11/15/22 (1) 12,000 13,342
Illinois Development Finance
Auth. Rev.
(Regency Park Project)
10.25%, 4/15/19* 6,500 4,875
10.625%, 4/15/20* 6,000 4,500
Illinois Development Finance
Auth. Rev. PCR
(Illinois Power Co.)
7.40%, 12/1/24 (1) 20,000 23,440
Illinois Health Facilities Auth. Rev.
(United Medical Center)
8.125%, 7/1/01 (Prere.) 2,925 3,447
Illinois Health Facilities Auth.
Certificate of Beneficial Interest
(Adventist Living Centers)* 770 62
Illinois Toll Highway Auth. Rev.
6.30%, 1/1/11 5,000 5,482
</TABLE>
43
<PAGE> 66
<TABLE>
<CAPTION>
Face Market
HIGH-YIELD Amount Value
PORTFOLIO (continued) (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Loves Park IL First Mortgage Rev.
(Hoosier Care)
9.75%, 8/1/19 $ 1,565 $ 1,716
Robbins IL Resources Recovery
Project Rev.
9.25%, 10/15/14 15,000 14,525
9.25%, 10/15/16 3,000 2,902
----------
STATE TOTAL 126,856
----------
- --------------------------------------------------------------------------------
INDIANA (3.3%)
Indiana Health Facilities Finance
Auth. Rev.
(Ancilla System Inc.)
7.375%, 7/1/23 19,400 21,515
Indiana State Office Building
Comm. Rev.
6.90%, 7/1/11 15,660 18,070
Indianapolis IN Local Public
Improvement Bond Bank
6.75%, 2/1/14 21,500 24,205
6.75%, 2/1/20 2,500 2,712
----------
STATE TOTAL 66,502
----------
- --------------------------------------------------------------------------------
KENTUCKY (.2%)
Kentucky Property &
Buildings Comm. Rev.
5.80%, 9/1/06 3,100 3,299
----------
- --------------------------------------------------------------------------------
LOUISIANA (.4%)
Louisiana Recovery Dist. Sales Tax
VRDO 3.50%, 3/4/96 (1) 3,000 3,000
West Feliciana Parish LA PCR
(Gulf States Utilities)
9.00%, 5/1/15 4,000 4,534
----------
STATE TOTAL 7,534
----------
- --------------------------------------------------------------------------------
MARYLAND (.9%)
Hagerstown MD Energy Finance
Administration Recycling Rev.
(Hagerstown Fiber Project)
9.00%, 10/15/16 17,500 17,609
----------
- --------------------------------------------------------------------------------
MASSACHUSETTS (9.0%)
Massachusetts Bay Transit Auth.
6.25%, 3/1/05 2,000 2,225
Massachusetts GO
5.25%, 2/1/08 35,575 35,876
6.00%, 6/1/11 14,750 15,081
Massachusetts Industrial
Finance Agency
(Massachusetts Recycling Assoc.)
9.00%, 8/1/16 17,000 16,841
(Refusetech Inc. Project)
6.30%, 7/1/05 26,500 27,773
Massachusetts Turnpike Auth.
BAN 5.00%, 6/1/99 11,000 11,312
Massachusetts Water
Resources Auth.
5.50%, 7/15/22 22,420 21,515
6.50%, 7/15/19 43,700 49,097
----------
STATE TOTAL 179,720
----------
- --------------------------------------------------------------------------------
MICHIGAN (5.1%)
Detroit MI GO
6.25%, 4/1/05 13,000 13,482
Dickinson County MI Memorial Hosp.
System Rev.
7.625%, 11/1/05 1,150 1,195
8.00%, 11/1/14 5,700 6,098
Michigan Hosp. Finance Auth. Rev.
(Genesys Health System)
7.50%, 10/1/27 6,620 6,963
8.10%, 10/1/13 5,000 5,521
8.125%, 10/1/21 15,000 16,590
Michigan Housing
Development Auth. Rev.
6.30%, 4/1/04 6,500 6,840
Michigan Public Power Agency Rev.
(Belle River Project)
5.50%, 1/1/13 46,595 45,938
----------
STATE TOTAL 102,627
----------
- --------------------------------------------------------------------------------
MINNESOTA (.3%)
Washington County MN Housing &
Redevelopment Auth. Rev.
(Woodland Park Project)
0.00%, 5/1/20 35,070 1,670
9.75%, 5/1/20 5,000 4,750
----------
STATE TOTAL 6,420
----------
- --------------------------------------------------------------------------------
MISSISSIPPI (1.4%)
Claiborne County MS PCR
(Middle South Energy)
9.50%, 4/1/16 5,000 5,175
9.875%, 12/1/14 21,000 24,008
----------
STATE TOTAL 29,183
----------
- --------------------------------------------------------------------------------
NEVADA (.5%)
Clark County NV Airport VRDO
3.05%, 3/6/96 (1) 9,595 9,595
----------
- --------------------------------------------------------------------------------
NEW HAMPSHIRE (.3%)
New Hampshire Health & Higher
Education Rev.
(Catholic Medical Center)
6.00%, 7/1/17 6,580 6,217
----------
- --------------------------------------------------------------------------------
</TABLE>
44
<PAGE> 67
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
NEW JERSEY (1.0%)
New Jersey Sports & Exposition
Auth. Rev.
VRDO 3.10%, 3/7/96 (1) $ 1,100 $ 1,100
6.50%, 3/1/13 15,000 16,929
New Jersey Turnpike Auth. Rev.
VRDO 2.80%, 3/6/96 (3) LOC 1,700 1,700
----------
STATE TOTAL 19,729
----------
- --------------------------------------------------------------------------------
NEW YORK (13.6%)
Glencove NY Industrial
Development Auth. Rev.
(Regency at Glencove Project)
9.50%, 7/1/12 10,000 10,000
Metropolitan NY Transit
Auth. Rev.
6.375%, 7/1/20 (1) 25,690 27,653
7.375%, 7/1/08 22,870 26,176
New York City NY GO
VRDO 3.15%, 3/6/96 LOC 2,100 2,100
VRDO 3.30%, 3/4/96 LOC 11,800 11,800
VRDO 3.45%, 3/4/96 (1) 5,000 5,000
5.75%, 8/15/08 10,000 9,783
6.375%, 8/15/09 28,000 28,720
New York City NY Municipal Water
Finance Auth. Water & Sewer
System Rev.
5.50%, 6/15/20 25,000 23,871
New York City NY Municipal Water
Finance Auth. VRDO
3.35%, 3/4/96 (3) 9,200 9,200
New York State Dormitory
Auth. Rev.
(City Univ.)
6.375%, 7/1/08 3,150 3,323
7.50%, 7/1/10 5,500 6,494
(State Univ.)
5.375%, 5/15/07 (2) 2,100 2,200
7.50%, 5/15/13 11,500 13,835
New York State Housing
Finance Agency Rev.
5.625%, 3/15/09 4,685 4,602
New York State Local Govt.
Assistance Corp. Rev.
6.00%, 4/1/16 6,400 6,668
6.50%, 4/1/20 16,110 17,358
7.00%, 4/1/10 6,320 7,055
New York State Power Auth. Rev.
6.50%, 1/1/19 26,250 28,628
Triborough Bridge & Tunnel
Auth. NY Rev.
(Convention Center Project)
7.25%, 1/1/10 13,500 15,624
(General Purpose Rev.)
5.00%, 1/1/17 3,000 2,770
5.50%, 1/1/17 10,000 10,073
----------
STATE TOTAL 272,933
----------
- --------------------------------------------------------------------------------
NORTH CAROLINA (1.3%)
Charlotte NC Airport Rev. VRDO
3.05%, 3/6/96 (1) 8,000 8,000
North Carolina Eastern Municipal
Power Agency Rev.
5.00%, 1/1/20 (ETM) 10,385 9,874
6.50%, 1/1/18 (ETM) 6,665 8,004
----------
STATE TOTAL 25,878
----------
- --------------------------------------------------------------------------------
OHIO (.7%)
Columbus OH GO VRDO
3.05%, 3/7/96 2,500 2,500
Columbus OH Sewer Rev. VRDO
3.05%, 3/7/96 2,200 2,200
Lucas County OH Hosp. Facility Rev.
(Flower Memorial Hosp.)
8.125%, 12/1/11 8,900 9,660
----------
STATE TOTAL 14,360
----------
- --------------------------------------------------------------------------------
OKLAHOMA (.4%)
Jackson County OK Memorial Hosp.
Auth. Rev.
(Jackson Memorial)
6.75%, 8/1/04 4,700 4,628
7.30%, 8/1/15 4,000 3,907
----------
STATE TOTAL 8,535
----------
- --------------------------------------------------------------------------------
OREGON (.1%)
Oregon Veterans Welfare
Program VRDO
3.20%, 3/6/96 LOC 1,500 1,500
----------
- --------------------------------------------------------------------------------
PENNSYLVANIA (12.7%)
Allegheny County PA Pittsburgh
Children's Hosp. Rev.
3.10%, 3/7/96 (1) 8,800 8,800
Emmaus PA General Auth. Local
Govt. Rev. VRDO
(Great Valley School Dist.)
3.90%, 3/6/96 8,000 8,000
Langhorne PA Higher Education &
Health Auth. Rev.
(Lower Bucks Hosp.)
7.30%, 7/1/12 4,500 4,228
7.35%, 7/1/22 2,500 2,290
Montgomery County PA Higher
Education & Health Auth. Rev.
(Brittany Point Project)
8.50%, 1/1/22 5,000 5,392
</TABLE>
45
<PAGE> 68
<TABLE>
<CAPTION>
Face Market
HIGH-YIELD Amount Value
PORTFOLIO (continued) (000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Pennsylvania COP
5.40%, 7/1/08 (2) $15,000 $ 15,390
5.40%, 7/1/09 (2) 25,000 25,464
Pennsylvania Convention
Center Auth. Rev.
6.60%, 9/1/09 2,500 2,688
6.70%, 9/1/14 2,500 2,708
6.75%, 9/1/19 6,600 7,172
Pennsylvania Economic
Development Auth. Rev.
(Colver Project)
7.05%, 12/1/10 2,500 2,661
7.125%, 12/1/15 14,000 14,981
Pennsylvania Housing
Finance Agency Rev.
7.60%, 7/1/13 10,000 10,780
Pennsylvania State Higher Education
Assistance VRDO
(Student Loan Rev.)
3.40%, 3/6/96 LOC 28,600 28,600
Pennsylvania Turnpike Comm. Rev.
5.50%, 12/1/17 17,735 17,296
Philadelphia PA Hosp. & Higher
Education Facilities Auth. Rev.
(Childrens Seashore Hosp.)
7.00%, 8/15/12 3,540 3,795
7.00%, 8/15/17 1,000 1,067
7.00%, 8/15/22 500 530
(Graduate Health System)
7.25%, 7/1/10 15,000 15,807
(Methodist Hosp.)
7.75%, 7/1/23 12,290 12,430
(Roxborough Memorial Hosp.)
7.25%, 3/1/24 10,000 9,636
Philadelphia PA Municipal Auth. Rev.
6.125%, 7/15/08 4,000 4,128
6.25%, 7/15/13 5,785 5,883
6.30%, 7/15/17 1,750 1,773
8.625%, 11/15/16 1,600 1,696
Philadelphia PA Water &
Wastewater Rev.
7.00%, 6/15/11 (3) 21,500 25,445
Scranton-Lackawanna PA Health &
Welfare (Moses Taylor Hosp.)
8.50%, 7/1/20 14,375 15,576
----------
STATE TOTAL 254,216
----------
- --------------------------------------------------------------------------------
RHODE ISLAND (.3%)
Convention Center Auth. Rev. RI
5.75%, 5/15/20 (2) 5,000 4,974
----------
- --------------------------------------------------------------------------------
SOUTH CAROLINA (1.3%)
Greenville SC Hosp. System
Facilities Rev. VRDO
3.10%, 3/7/96 18,000 18,000
Piedmont Municipal Power
Agency SC Rev.
6.25%, 1/1/21 (3) 6,640 7,377
----------
STATE TOTAL 25,377
----------
- --------------------------------------------------------------------------------
TEXAS (12.5%)
Austin TX Airport System Rev.
6.125%, 11/15/25 (1) 38,000 39,693
6.45%, 11/15/20 17,040 18,285
Austin TX Water, Sewer &
Electric Rev.
14.00%, 11/15/01 200 270
Dallas TX Independent
School District
5.70%, 8/15/12 18,645 19,130
5.75%, 8/15/13 20,330 20,866
Gulf Coast Waste Disposal Auth.
TX PCR VRDO
(Exxon Project)
3.35%, 3/4/96 11,600 11,600
Harris County TX Health Facility
Development Corp. VRDO
(Methodist Hosp.)
3.45%, 3/4/96 10,500 10,500
Harris County TX Hosp. Dist. Rev.
7.40%, 2/15/10 (2) 17,500 21,485
Harris County TX Toll Road
VRDO 3.15%, 3/6/96 4,000 4,000
6.25%, 8/15/15 (1) 5,000 5,344
Houston TX Hotel Occupancy
5.50%, 7/1/15 (4) 6,000 5,874
Houston TX Water & Sewer
System Rev.
6.375%, 12/1/17 (2) 4,820 5,142
North Central TX Health Facilities
Development Corp. VRDO
(Presbyterian Medical Center)
3.50%, 3/4/96 (1) 4,000 4,000
Odessa TX Junior College Dist. Rev.
8.125%, 12/1/18 10,000 10,877
San Antonio TX Electric & Gas Rev.
5.00%, 2/1/17 3,500 3,223
Southwest TX Higher
Education Auth. VRDO
(Southern Methodist Univ.)
3.35%, 3/4/96 LOC 2,900 2,900
Tarrant County TX Health Facilities
(Harris Methodist Health System)
VRDO 4.25%, 3/7/96 LOC 13,600 13,600
</TABLE>
46
<PAGE> 69
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
Texas GO
5.50%, 4/1/20 $40,050 $ 39,231
Texas Turnpike Auth. Rev.
5.50%, 1/1/15 (3)++ 14,605 13,846
----------
STATE TOTAL 249,866
----------
- --------------------------------------------------------------------------------
UTAH (.4%)
Emery County UT PCR VRDO
(PacifiCorp)
3.40%, 3/4/96 (2) 8,100 8,100
----------
- --------------------------------------------------------------------------------
VIRGINIA (1.4%)
Alexandria VA Redevelopment &
Housing Auth. Rev.
(Portals West Project)
9.50%, 7/15/20** 9,680 6,098
Chesterfield County VA IDA
3.25%, 5/15/96 8,650 8,651
Chesterfield County VA
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 5,600
10.625%, 7/1/16** 10,400 7,280
----------
STATE TOTAL 27,889
----------
- --------------------------------------------------------------------------------
WASHINGTON (2.9%)
Port of Seattle WA GO
5.75%, 5/1/14 15,600 15,599
Snohomish County WA Public Utility
Dist. Rev.
5.50%, 1/1/20 (3) 43,710 42,409
----------
STATE TOTAL 58,008
----------
- --------------------------------------------------------------------------------
WEST VIRGINIA (.5%)
West Virginia State Building
Comm. Rev.
7.00%, 7/1/13 (1) 8,390 9,962
----------
- --------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(Cost $1,879,898) 1,986,871
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (.8%)
- --------------------------------------------------------------------------------
Other Assets--Note B $ 44,433
Liabilities (27,576)
----------
16,857
- --------------------------------------------------------------------------------
NET ASSETS (100%)
- --------------------------------------------------------------------------------
Applicable to 188,224,975 outstanding
$.001 par value shares
(authorized 250,000,000 shares) $2,003,728
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE $10.65
================================================================================
</TABLE>
+ See Note A to Financial Statements.
For explanations of abbreviations and other references, see page 48.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AT FEBRUARY 29, 1996,
NET ASSETS CONSISTED OF:
- --------------------------------------------------------------------------------
Amount Per
(000) Share
---------- ------
<S> <C> <C>
PAID IN CAPITAL $1,913,007 $10.17
UNDISTRIBUTED NET
INVESTMENT INCOME -- --
ACCUMULATED NET
REALIZED LOSSES (16,252) (.09)
UNREALIZED APPRECIATION
OF INVESTMENTS--NOTE F 106,973 .57
- --------------------------------------------------------------------------------
NET ASSETS $2,003,728 $10.65
- --------------------------------------------------------------------------------
</TABLE>
47
<PAGE> 70
BAN = Bond Anticipation Note
COP = Certificate of Participation
CP = Commercial Paper
GO = General Obligation Bond
IDA = Industrial Development Authority Bond
IDR = Industrial Development Revenue Bond
PCR = Pollution Control Revenue Bond
PUT = Put Option Obligation
RAN = Revenue Anticipation Note
RAW = Revenue Anticipation Warrant
Rev. = Revenue Bond
TAN = Tax Anticipation Note
TAW = Tax Anticipation Warrant
TOB = Tender Option Bond
TRAN = Tax Revenue Anticipation Note
VRDO = Variable Rate Demand Obligation
(ETM) = Escrowed to Maturity
(Prere.) = Prerefunded
* Non-Income Producing Security.
** Only partial interest was paid on the last interest payment date.
++ Security purchased on a when-issued or delayed delivery basis for which the
Fund has not taken delivery as of February 29, 1996.
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.
F952-02/96
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